The World Is Underestimating the Coming Copper Crisis | Will Thompson

Trevor Hall (0:08)

Hey, everybody, welcome back to Mining Stock Daily and this week's long form episode. We've got something a little different for you today. We're actually going to share a recent episode of The Power Current, which is hosted by Chris Berry and produced right here on the Clear Commodity Network. It was recorded earlier in the week. Chris sits down with Will Thompson.

Some of you will be familiar with Will. He's a founder and managing partner of Massif Capital, and they have a wide-ranging conversation about commodity investing, capital cycles and the growing influence of political and geopolitical risk in resource markets. They get into the structural challenges facing not only copper supply, but the dynamics behind lithium and why identifying a good investment can sometimes be a whole lot easier than knowing when to sell it. So, it's a very thoughtful conversation, one I thought we should expand to the MSD audience as well. If you're interested in this episode, you will probably enjoy all of Chris Berry's Power Current stuff, so just go hit that like and subscribe on the Power Current. You can find that on the Clear Commodity Network.

Special thank you, as always, to Revival Gold, Integra Resources, Equinox Gold and Visa Silver for their continued support, which helps us bring these conversations to you each and every week. Also, big thank you to Terrahutton for their support of the Clear Commodity Network because one of the biggest challenges mining and exploration companies face is communicating what they have beneath the surface because a great project can have strong geology, compelling drill results and tremendous potential, but the story isn't always easy for investors to visualize. Terrahutton helps make the invisible investible. Go check them out over at terrahutton.io. Now, here's Chris Berry with Will Thompson of Massif Capital on The Power Current. Enjoy the conversation. We will see you next week. Happy Thanksgiving to everybody up in Canada. Be well.

Chris Berry (2:31)

Will Thompson, welcome to the podcast.

Will Thompson (2:33)

Thanks for having me, Chris.

Chris Berry (2:35)

Absolutely. So listen, I just want to jump right in. We went through a really, I think, deep background in the preamble here to the podcast. But just to jump in, you have a very diverse background. You worked in investment banking, political risk insurance.

And one of the things that I thought was interesting and want to explore is that you were an advisor to NATO and Afghanistan. So given all of that diversity of experience, I mean, how did this path kind of lead you to where you are today to starting a fund focused on real assets?

Will Thompson (3:07)

Well, it wasn't a natural path, per se. When I left, or I should say, what prompted me to leave insurance actually was, we had run a really clean book in insurance for about four years, and myself and the other guy who started up the political and credit-risk insurance business in New York for Chaucer, the firm we were working for, we'd built it from zero to about 750 million in notional exposure. We'd only had two or three policies go wrong. The challenge with that kind of insurance is, I might write a policy that puts me on the hook for $20 million a year if something goes wrong, but I'm going to get anywhere from two to five percent per piano of that value. So if you think about the asymmetry there, when that policy goes wrong, it wipes out the premium for a lot of policies. Because we've written it so cleanly for so long, I sort of set, and dealing with all the companies I currently deal with, Energy, Materials, Industrial, those are the consumers.

I went to a series of hedge funds, about four or five of them, and went into the offices, explained to them what I did and said, why don't you give me a sleeve of money? And the risk side, I've got managed, and the upside will take care of itself. And I got the same answer from four or five firms, and it was no one ever, ever, ever makes money in mining. That's just a bull's eye. Oil and natural gas, everyone had just gotten burned, so that too was, well, you know, no one really consistently makes money in this, and you can't predict the price of oil, so why would we do that? And then industrials, we already got someone. So the consistency of the first two responses across so many different firms just sort of prompted me to be like, well, jeez, if nobody can make money in it, then God, there must be a lot of money to be made in it.