All About Private Placements - Part 2

Watch: All About Private Placements - Part I 

Tekoa Da Silva of Sprott USA, sits down with Maurice Jackson of Proven and Probable in this exclusive 4 Part Series entitled: All About Private Placements. This is one, if not, the most comprehensive beginners guide to understanding the value proposition of private placements.
 

0:35 | Can I Find Private Placements on My Own?
5:34 | What People & Resources do I Need to Participate in Private Placements
10:23 | How Much do Private Placements Cost – Is There A Minimum
11:13 | What Are 3rd Party Fees
15:23 | What To Do With Units/Security Certificates After I Buy Them
 


Video length: 00:20:16
Watch: All About Private Placements - Part 3


Transcript

Maurice Jackson: Thank you for joining us for a special four-part series entitled, 'All About Private Placements, Part 2.' Joining us for conversation is Tekoa Da Silva; he is an accomplished licensed financial advisor for Sprott USA, the preeminent name in the natural resource space. Full disclosure, the following is not a Sprott USA endorsed product and it is for educational purposes only.

Tekoa, can I find a private placement on my own or do I have to use a broker?

Tekoa Da Silva: For the reader, you can find a private placement on your own. I think it's probably good if a person wants to do that. They could try it out for a bit to see if it fits. And the best way to start that process is to visit a couple of news websites that [have] published press releases and other information on junior mining companies. Those websites will routinely republish the press releases announcing private placement by companies in the space. And the way to dip your toes in is to call and e-mail the contact information at the bottom of some of those press releases—the investor relations contact—and just start talking to them. If you like the way that a certain private placement looks, you can request the paperwork; you can participate in it if you like. That could be a way to sort of dip your toes in and see if you like that process, if you want to do it.

If you want to create for yourself a pipeline of incoming deals—I would say that process probably takes a couple of years—a great way to build that for yourself, is to do what I just mentioned. . .put together a list of websites that publish those things. One that comes to mind is, of course, Proven and Probable, your website, Maurice, which is fantastic. And then 321 gold, Bob Moriarty's site, is wonderful for that too, as well as kitco.com and many other sites. Speculators can start to bookmark those first.

But building out the infrastructure, I think, also includes two very good sources of information. And the first one is brokerage houses. A person can open two to three brokerage accounts with natural resource specialist firms where they indicate that they have an ongoing stream of private placement opportunities available to them.

Just get the account open, see if you can open it with maybe a zero deposit or something like that so you can get to know them. And then talk to a couple of different brokers there and see if there's someone that you seem to get along with. And then give them 6 months or 12 months of getting to know each other and see what they present to you.

During poor market conditions you will always be fed a stream of probably suspect private placement deals, where the cost of capital is really low for the issuer and high for you, the investor. And in many of those cases it will be a capital markets or a capital raising group who's earning a commission selling the deal. They're not buying it themselves in many cases, they're just making a fee selling it. You want to keep that in mind as you consider deals from those sources, one at a time. So that's the second source.

The third source I think is wonderful is a growing source, and that is newsletters that focus on natural resource mining or junior mining shares that are building out a private placement information delivery part of their service. There are a couple that come to mind, but the best way to do it is to e-mail the dozen or so junior mining resource newsletters out there and ask the editor of every single one of them, do you cover private placements? Can you put me on your VIP list? And I know they'll tell you, as opposed to me recommending, which may or may not be good for any one person.

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