Commodity Discovery Fund Targets Early-Stage Mines

Commodity Discovery Fund founder Willem Middelkoop is targeting new discoveries and mines nearing production to capture gains from a commodities rally he says could last for decades, according to Mining.com.

The Netherlands-based fund manages about $316 million (€200 million) in assets and invests in roughly 40 to 50 discoveries across different metals, Middelkoop stated. He expects persistent supply shortages to start hitting the wider economy around 2030, while major producers are only beginning to increase their exposure to early exploration.

Focus on the Lassonde Curve

The fund's strategy focuses on two distinct stages of the mining cycle known as the Lassonde Curve: the initial discovery phase, when drilling can sharply increase a company's value, and the approach to production, when investors begin pricing in future cash flow. Middelkoop noted that mining shares can stagnate for years after the initial excitement of a discovery fades, even in a rising metals market.

His approach involves taking profits after the discovery rally and seeking another opportunity as construction nears completion, when investors begin valuing a company's ability to produce metal and generate cash. Meanwhile, a private entity has agreed to acquire Victoria Gold, advancing plans to potentially rehabilitate and restart its Eagle gold mine.

Key facts

• Fund Assets: The Netherlands-based Commodity Discovery Fund holds about $316 million (€200 million) in assets under management.
• Portfolio: The fund invests in roughly 40 to 50 discoveries across various metals.
• Supply Outlook: Persistent supply shortages are expected to begin impacting the wider economy around 2030.
• Mining Cycle: The fund targets the initial discovery stage and the approach to production based on the Lassonde Curve.