Pierre Lassonde: Few people understand how much Franco-Nevada is worth

Interview by Henry Bonner
Sprott Global

Pierre Lassonde
Pierre Lassonde

Pierre Lassonde is one of the ‘superstars’ of the resource sector. He co-founded Franco-Nevada, the largest royalty and streaming company in the mining sector. The company was acquired by Newmont Mining in 2002, and then split off in ’07 at a value of $1.2 billion. Its current market cap is nearly $9 billion. On the phone from his home in the South of France, he shared what he feels are some of his most valuable insights on investing.

Mr. Lassonde says timing isn’t nearly as important as recognizing great business models — like Franco-Nevada or NewGold — and being patient.

Franco-Nevada is currently the top holding of Sprott’s new ETF, the Sprott Gold Miners ETF (NYSE: SGDM). As of July 31, 2014, the ETF had a 16.74% weighting in Franco-Nevada Corporation, which is subject to change. For more information and disclosures, please visit www.SprottETFs.com. Our affiliate, Sprott Asset Management LP, is the sub-advisor to the Sprott Gold Miners ETF.

Hello, Mr. Lassonde. Before we get into your success with Franco-Nevada, what is the most important thing you’ve learned about making money in resources?

Well, I could give you a very ‘tart’ answer — like ‘buy low, sell high’ — but anyone could tell you that. I think that the answer is different depending on whether you’re talking about bullion or stocks. I don’t deal much in bullion, even though I do own some.

For the stocks, it’s a whole different ballgame. I’ve been very fortunate — the four companies that I helped create and whose boards I’m on have all done very, very well. One is a 100-plus bagger; I’ve got another 100-bagger coming; and I’ve got two others that are very solid. So I freely tell what I see as the most important keys to investing.

These companies have four things in common:

One – they have a great CEO. They know how to execute, and they know how to deal with a problem when they see one. They just have a great CEO, whether it’s Randall Oliphant or David Harquail in the mining business. These two guys are simply two of the best CEOs around.

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