Bill Powers asked Malcolm Shaw the question newsletter land usually dodges. If you are good at junior resources, why sell a letter?
Shaw did not claim a secret gold number. He said the opposite. He cannot predict commodities. If he could, it would be amazing. What he wants are companies that do well no matter what the tape is doing. Sometimes that takes months. Sometimes it takes years. The job is to follow those names through both.
The Circle’s own lines sit on the site. We don’t predict. We position. We are farmers, not forecasters. That is the investor opportunity in one breath. The market sells weather. Shaw sells a watchlist you can live with when the weather is wrong.
How he got the lens
Shaw started as a geologist in Calgary at PanCanadian, a Canadian Pacific spinout, with a real training program. He could see the next 30 years. He left for Toronto thinking he would do a PhD in planetary science. He spent most of that stretch on junior mining stocks. The mix was wrong for a doctorate. He took a master’s instead and asked people on the street if Bay Street needed a Calgary geologist who knew oil and gas.
The resume landed on a desk of someone leaving. Shaw walked in as an international oil-and-gas analyst. Sell side first: brokers, institutions, price targets, a niche Bay Street was thin on. Then a client hired him. Buy side at a Canadian hedge fund, energy and mining, about three years. At the end of 2011 he stepped out to invest for himself. He has not taken a paycheck from anyone since. When he likes a name he is asked to review, he wants to own it. Friends and co-investors, not an elbows-up shop.
The letter came later. He used to blog when he felt like it. Formalizing the work made him accountable. The money is not the engine. The engine is the process he wished he had found 20 years ago, when he was investing his own cash with no map of how sell side and buy side actually pick names.
The filter that replaces a forecast
A lot of letters sell a season. It is time to buy gold stocks. It is time to buy uranium. Then they list names inside the theme. Shaw reads those notes as a barometer of institutional attention. He does not live inside them.
He wants a big margin of error. He wants to see a marginal project for what it is: a project that only works at high prices. That is the first cut on a wide funnel. Geology matters. He can talk technical detail with most teams. He does not think those details usually make or break a name. The edge, as he tells it, is seeing through both lenses at once. Will the market care? Is this too small for any real depth? Can it move from obscurity toward something more mainstream—through institutions or through industry, which he calls the great equalizer?
Charts are a late add. He used to think technical analysis was nonsense. He still does not worship it. After a long stretch of disinterest and low volatility, a turn can be a reason to look. Not a reason to pretend you know next year’s copper print.
That is bottom-up investing with the lights on. Trends exist. They do not get to pick the company for you.
A 300-name farm, not a hot tip
Deal flow is a screen he enjoys more than he needs. About 300 names get looked at often. A second list feeds press releases he barely watches. Names stay on the list for a long time. He has owned some of them five years earlier. He will also scan top movers on any index. High volume plus a press release is an easy click. If he knows the company, he is back in the file where he left it. If he does not, day one of homework starts.
Volume without price makes him inspect the tape. A single block can be tax-loss selling into a patient bid. A volume spike at 11:53 can be a conference slot or a newsletter plug. His own list, he says, is not built to stampede a name the morning after a note. He thinks that path is a poor way to get rich.
Holds run from weeks in a small situation to years in a real one. He described a name that sat four or five boring years between first purchase and launch. You cannot force the clock. Exits depend on size. More than about 10% of a day’s volume moves the price. If you have 100,000 shares and the stock trades 50,000 a day, you sell in small clips over many sessions. Ease in. Ease out. Nobody buys the exact low or sells the exact high. A single timestamp pretends you can.
The book looks like a log curve. Fifty or 60 names. The top 15 hold about 90% of the capital. Two to four large positions, then a steep drop to 1% and even half-percent slivers. Those slivers are the farm team. Liquidity caps how big a speculative name can get. Names move up and down that curve. They are not all meant to be Tenaz.
What a big bet looks like when it works
The setup he wants for size is dull on purpose. Good management. Long-term alignment. A team that has done it before. A Lundin-style group in a small vehicle early is the dream. Capital falls out of the sky. A first-time Vancouver promoter who has never commercialized anything gets more skepticism. He does not want a 747 on a pilot’s first flight.
Tenaz Energy is the case he would not debate. He first bought it as Altura Energy because of CEO Dave Burghardt, who had worked at Vermilion with Tony Marino. Burghardt looked like a steward. The asset was a simple oil pool just outside Edmonton—hundreds of millions of barrels in place, no debt, a published engineering value the stock often sat under. It was a clean shell and a storage tank in the ground. Production stayed small. The stock did little.
Then Marino joined. Shaw doubled down and kept buying for years. Some of the Street shrugged because Vermilion had not sparkled in that chapter. Shaw kept meeting a methodical CFA-MBA engineer with access to capital. Average cost, after years of adds, sat in the low $2 range Canadian. The stock later traded above $70. It was still his largest position when he spoke. He has sold it down slowly, a little each day, to capture a long average rather than a hero print. What created the value, he said, was not a macro call. It was management’s ability to transact on an asset nobody else took seriously. European gas became a tailwind later. The team came first.
In mining, the winner he named was Alpha Minerals, one half of the Patterson Lake South discovery that sat beside Fission. Thirteen million shares. A move from pocket change that looked violent on a chart and barely registered in market cap. High-grade boulders in the western Athabasca. Then pitchblende in basement rock not far from those boulders. A 70% uranium boulder does not usually travel far. He sized early, held as strike grew, and used Hathor as a mental comp for what a discovery like that could be worth. He sold into the merger liquidity because he was a smaller investor then and the tape finally offered an exit.
He will speculate before a hole. He has not made most of his money that way. If you are already following the story, the discovery hole is soon enough. Missing day one of a real discovery is allowed. The first day never prices the whole thing. Recognizing that the hole matters is the hard skill.
What he will not pretend to love
Developers can be value traps. They spend. They do not throw off cash. On the Lassonde curve that stretch is boring. He still owns some, usually because he thinks a buyer may show up. He keeps those smaller. Foran was the exception that proved the funding rule. Once serious money arrived, infinite dilution stopped being the first fear.
He will own a restart if the person is right. Selkirk Metals and the old Minto mine in the Yukon is a large position because Colin Joudrie put his own money in and ran things like a grown-up. Joudrie spent a long time senior at Teck. Calm. Rational. Seen things. That is enough for Shaw to sit through build risk in one size.
He does not chase marketing budgets. Build it and they will come is close to his view. Value shows up as a higher price or as industry interest. A miner that cannot get invited to mining shows has a problem. Early retail checks can drill a high-risk target. Later checks have to come from people who write larger ones. If management cannot say where that money lives, the story is incomplete.
Energy was about 60% of invested capital when he spoke. Mining was 20% to 25%. Tenaz, Condor, and Gran Tierra were 45% to 50% by themselves. Niche metals make him nervous. When the conversation leaves copper, gold, and barrels for tin and rare earths, he hears that the easy metals are already crowded. Opaque books. Thin markets. Extra variables besides the deposit. He has looked at Alphamin more than once. The numbers can look fine. The Congo keeps him from sizing it. The letter is called The Circle for a reason. Stay inside the circle of competence.
Losers stay on the page
TAG Oil is the open wound he offered. A long New Zealand history, then Egypt, an Eagle Ford analog on paper, a respected CEO he knew from the sell-side years. The well turned into a rodeo. Costs ran. Results did not. The play is not technically dead. He has not made money. He sold some for a tax loss and still holds a chip. Charge is not the question. Reservoir quality at depth is. He will not forget the name until it is finished.
That is the other half of “we acknowledge our losers.” A letter that only shows Tenaz is selling weather. A letter that still owns TAG is showing the farm.
The opportunity, stated without a ticker dare
The opportunity is not a list of Shaw’s holdings. It is the method in a year when everyone has a commodity target.
Build a list you will still read when gold is dull. Size the book like a curve, not like a lottery ticket. Let farm-team names stay small until liquidity and proof allow them to graduate. Prefer people who have commercialized something over people who have only raised something. Treat a discovery as a process, not a day-one price. Ease out of winners so you are not married to one print. Stay inside metals and basins you can touch. Call two friends before you call the story unique.
If nobody has heard of it, that can be alpha or a trap. Either way it is information. Industry remains the equalizer. Institutions remain the depth. Commodity forecasts remain a sideshow you glance at and then put down.
Shaw told Powers he would have paid for a trusted process when he was starting. That is the product. The investor who uses it does not need to win a debate about next month’s copper. He needs a company he would still want if copper is wrong—and the patience to still be there when the market is finally right.
Disclaimer
Market commentary based on a Mining Stock Education interview between Bill Powers and Malcolm Shaw of The Circle (thecircle.ca). Holdings, cost bases, and prices are Shaw’s account of his own book and may be dated. This interview was not sponsored. This article is not investment advice and not a recommendation to buy or sell any security named, or to subscribe to any letter. Junior resource stocks can go to zero. Do your own work. Past performance is not a guide to future results.