The Next Bull Market Move Interview - Gianni Kovacevic, Executive Chairman & CEO of CopperBank Resources

Today I had the chance to connect with Gianni Kovacevic, who is the CEO of CopperBank Resources and the author of the excellent book "My Electrician Drives A Porsche? Profiting From The Largest Migration In History." Enjoy!

Hi Gianni, give us some background on how you got involved in the mining sector? Have you always been interested in the markets?

Well, I suppose that is a good question for those that wonder - how does one get involved in such a niche sector?Being raised in Vancouver, Canada - it is a world capital of the exploration and development arm of the global natural resource industry, a sort of research and developmentfor the sector if you will.Or put a different way, what software and computers are to Seattle, is what rocks and minerals are to Vancouver. When you operate in certain circles of Vancouver you are surrounded by people engaged in the mining sector - we truly have some of the greatest success stories in mineral extraction that were created and advanced out of Vancouver and many of the driving participants are friends and colleagues of mine.

I read your book and really loved it. Could you give us a brief explanation about what it's about and the reasons behind why you wrote it?

In the Summer of 2009 I drove across Eastern Europe with Doug Casey - a legend in the writing and speculating in Jr. Mining Shares business - and he suggested I write a book. After a couple years of thinking about it, I said why not?

I hired a ghost writer to keep me on track, it's like having a fitness trainer, when you are paying them, you show up!After he helped me open the book and idea up, it seemed that only I could write this story. So, after mid-2nd chapter I took over and to be clear the book is about 80% my real life experience and how I came to be so involved in following and investing in Jr. Mining Companies, and, if it was effective, enable me to explain over about 5 hours of reading why it is A., such an interesting sector, B., a fantastic way to make disproportionate investment returns, and C., why the emerging consumer and modern energy pivot will be so relevant for decades to come - all very worthwhile reasons to be a participant and not a victim.

The book was written like a novel to make it more palatable for the average Joe or Jane - so you are given 100's of snippets of wisdom, facts, humour etc., while the reader is taken on a global adventure of enlightenment.18,000 copies later, I think I can say a few people have enjoyed it.As the book is not stale dated, the themes within the 200 pages should be relevant for years to come.

Let's move on to your company CopperBank Resources. What are your plans for 2017 and beyond? Why should investors invest in CopperBank Resources?

Let's answer this in three parts, in a longish kind of way.PART 1. One of the best reasons to follow Jr. Mining Stocks is the optionality offered in discovery of new deposits, or the torque in established resources and reserves in the ground. One of the worst reasons to follow Jr. Mining Stocks is the punishment one suffers when new exploration fails with duster holes, or when the bubble bursts and commodity prices crash and individual Jr.'s, no matter how good their assets are, drop by as much as 95% from their highs. Then the dilution trap begins! Shareholders are punished as management teams endlessly finance the ongoing machine through bear markets while shareholders are punched in the face with punitive financing's, usually attached with full 5-year warrants.

Once you have seen that movie play out a couple of times - as I have, you want to ask the question; what if a group of patient, business oriented investors acquired a few of these established projects and removed the lifestyle dilution trap from the projects? Why drill new holes for $150 - $200 per meter when you can buy drilled holes at pennies on the dollar with ZERO management or holding costs?

One person can manage established assets - not a full technical/financial team - just imagine how much it costs simply if qualified manpower to acquire land, raise capital, become stock listed and compliant, drill numerous years in a row with a talented group of people... only to have the overall market crash!How many shares of dilution does that require for a penny share?Enter PART 2 of this answer.In mid-2014 that is exactly what we did at CopperBank - we built a shareholder friendly company for like-minded investors who wanted to own huge optionality with copper pounds in the ground, and then the important part, not be diluted out of that value proposition.

I cannot do the math for you due to 43-101 rules, however, if you do a simple calculation of how many pounds of copper you obtain for each CopperBank share - you will see it has not changed too much since the November 2014 ipo.We did not need to issue shares for much of anything as we do not have many expenses, furthermore, we purchased our own stock as the per share value proposition is compelling.

Over the past two years CopperBank has had the most insider buying of any listed company in Canada - who would have thought that 50% of the company's shares would trade hands at a 50% discount to the already low ipo valuation of $13 Million. It was an epic bear market! Recall we issued shares to acquire established assets - we purchased assets that had $10's of millions spent on them - so it would seem the previous holders of the public companies we purchased were the sellers. In that epic bear market those holders dumped shares from Day 1 of the ipo and did not stop, thus me and my investor group acquired, and kept acquiring, over 50% of CopperBank, all on the open market, at an implied valuation of ~$5 or $6 Million!

We already owned a good portion on ipo day so imagine what we own at this point? CopperBank is very tightly held. Now for PART 3 of the answer, what are CopperBank's projects actually worth, and what do we do with these assets in 2017 and beyond?We have not been able to acquire any additional projects - we have looked at hundreds of opportunities, and nothing made sense.The available projects were either in bad locations, management buy-outs were more than the asset to buy - out of principle we won't do that as we won't give millions of shares to obvious sellers for mediocre assets - or, projects being offered to us still needed significant spending on them - that did not fit our business model of controlling dilution.

All the while our group, all technical guys, spent lots of time and effort on our existing portfolio, and we reached a decision to roll-out step #2 of the business model with our current project base. We are going to look at ways to enhance shareholder value buy accretively and strategically advancing our portfolio to enhance shareholder value. Now you can see why we detest dilution - we are the biggest shareholders of the company and we are fully aligned with all of our shareholders. Imagine what these projects each look like in their own company?

Will the market cap remain the same if you added the three up? I have my own option of that, so if I have your readers interested to this point, and they want to learn about our individual assets and some of the ideas we are looking to move forward, I encourage them to visit the www.copperbankcorp.com website and listen/view my 14 minute interactive corporate presentation under our "Energy Zone" button. It's the first video on the top. Keep in mind our current market cap is about $10 Million, we do not have a big cash balance, but we also have negligible expenses so I encourage folks to follow our moves early in 2017, the key is we are not fans of non-accretive dilution.

What does it take to become a successful investor/speculator? Any major things you've learnt in regards to the psychology behind contrarian investing?

Patience is key, as investors need to live through cycles - these really high highs and really low lows I was talking about.Patience ensure one does not get bucked off before the lift, or, as things recover because these assets and company's can move sideways for a while - then pop, they have a revaluation! Always ask yourself, what is the real value proposition here?

Using CopperBank as an example, we know that it would take ~$50 Million to duplicate all the drilling, engineering and work already completed on our projects, however our market Cap is $10 Million. Clearly there is no guarantee that these assets ever go back to their 2010 highs, however, how much downside is there if the assets have no mandatory work obligations and the team that holds them have already demonstrated limited dilution?How much upside is there?

Also don't take just one opinion about a project, team or jurisdiction. I have seen so many times where the cognoscenti poo-poo an idea that turns people off of an otherwise interesting investment opportunity.When 7 or 8 really smart people all give valid cautions - hopefully for different reasons - start researching another undervalued idea, that one seems to close to call, there probably is reason it's too cheap.

To be prepared investors need to travel (go to conferences), network (subscribe to newsletter folks that you trust - Brent Cook and Joe Mazumdar at www.explorationinsights.com are the best in my opinion) and allocate responsible amounts of capital into these ideas - the more risky, the smaller %, however, when you do invest, invest with teams that have track-record either by way of moving mineral assets forward, or raising capital and building teams and passing the baton to those more qualified. But most of all, be in the game and know cotton from corn by following all of the above, oh, and read my book too!

Thanks Gianni,

For more information on Gianni go to http://kovacevic.com/ or his Bloomberg page.

Grab a copy of Gianni's excellent book "My Electrician Drives A Porsche? Profiting From The Largest Migration In History" here:

https://www.amazon.com/My-Electrician-Drives-Porsche-Investing/dp/1626342512

To read more interviews like this, go to The Next Bull Market Move