This was an interview in yesterdays, The Gold Report. It stresses what this analyst thinks is the most important part in evaluating a mining company. I could not find BGM in their system.   I wonder how Michael Berry would rate BGM's mgt? Like others I am hoping the BGM mgt team are good salesmen and have a world class  asset to sell. They have not done well so far on the production side as over two years ago the mill was supposed to be generating constant positive cash flow.  In addition, I think it is fair to say that the upgrading of the resource reports has not gone very well either.

TGR: Mike, I want to ask you about your 10-point discovery model for emerging companies. Have you revised anything about your model since the downturn of 2008?

MB: No, we just sharpened our focus since 2008. The system worked beautifully. There are no changes, just enhancements. There are 10 basic factors in the Discovery Investing Scoreboard ( (DiS) that address very different issues. We really wanted to better define those issues, so we worked on that. We have about 1,200 users on the system now. We cover about 840 companies—some biotech, quite a few mining and resource companies and some high-tech and infrastructure companies. We can access all companies on the Canadian, American, Australian and Hong Kong exchanges.

We still look for world-class assets, but most important, even critical, we look for world-class management. With emerging companies, mediocre management is anathema.

We break all these factors down into multiple sub-components. For example, a world-class asset would have sub-factors such as grade, tonnage, infrastructure and location and these may be further broken into components.

We look for catalysts for value change, either creation or destruction. We look for sustainability of operations—cash flow, royalties, etc. About a year and a half ago, we began to talk about the most important factor not being world-class asset availability but sustainability. Can a company sustain itself as the market for funds went dry? That is where we are today. Rather than changing the factors, in the DiS we simply allow the user to change the emphasis on the current factors to reflect what is really driving the market now.

TGR: In picking mineral stocks, what is the most important fundamental factor?

MB: It depends where you are in the economic cycle, but almost always, management, management, management—is the most important factor. A great management team can create value in a mediocre project. A lousy management team—there are a lot of them out there—can destroy value in a great project by diluting recklessly, by wasting money on overhead, by chasing the flavor of the day, by giving $0.05 stock to friends and family and by too much diversification with properties. So management expertise and track record are almost always the most important factors.

TGR: Does the market pay any attention to drill core results anymore, especially in micro-cap stocks?

MB: Yes and no. In some sectors drill results work today, and in some sectors they don't matter. We've gone through cycles in the '90s: There was the diamond bubble in the Northwest Territories, there was a bubble in uranium in 2004, followed by lithium, rare earths and now graphite. Part of this is a natural shift in technology, lithium ion batteries, for example, and part is an attempt by the junior space to capitalize on an opportunity. At any given point when we're in one of these technology sub-cycles, if a company gets good drill results, the stock appreciates and then recedes.