Agoracom Blog

3-Way Junior Mining Consolidation Is Pierre Lassonde’s “Peanut Butter Manifesto”

Posted by AGORACOM at 6:50 PM on Thursday, April 3rd, 2008

If you’re an investor in the junior gold mining and exploration sector, then you owe a hat tip to Pierre Lassonde. Lassonde is apparently the man responsible for consolidating 3 juniors into one earlier this week.

If you haven’t heard by now, Metallica Resources Inc., New Gold Inc. and Peak Gold Ltd. combined to create a new, mid-sized gold producer with a market cap of approximately $1.6-billion. I’m not going to bother with the details, carried the full story here. I’m covering this because it points to both a problem and solution in the junior mining and exploration sector.


What the hell does that mean? Listen closely. This is important and will only take a minute.

If you had told me 18 months ago that gold, silver, copper, platinum, etc were trading at today’s prices, I would have danced a jig while celebrating sky-rocketing share prices in the junior sector. So would many of my friends at Sprott, Pinetree and Canaccord, as well as, just about every one of our clients in the space.

Unfortunately, that has not transpired.


Over supply. Much like an overbuilt condo market, there is far too much supply of junior mining and exploration companies, especially exploration companies. Today, just about anybody with a piece of land in a far away location, whose grandfather once spotted a shiny rock, has become an “explorer”.

This creates a peanut butter effect where investors are thinly spread out over a far too large sector. If you think this sounds cute, don’t be fooled. The Peanut Butter Effect can take down some pretty big whales. It almost took down Yahoo, until a Senior Vice-President wrote the now infamous Peanut Butter Manifesto in which he summarized the company as follows:

“I’ve heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the online world. The result: a thin layer of investment spread across everything we do and thus we focus on nothing in particular.  I hate peanut butter and so should you”

This is exactly what is happening in this industry. A thin layer of investors spread across way too many companies, with no particular focus on the good companies.


Lassonde obviously hates peanut butter, so he took action. We should all hate peanut butter and take similar action. Let the fly by nights die, consolidate those with decent assets and let the superstars stand up on their own two feet.

Quality over Quantity folks.  It is that simple.

It worked for AGORACOM in building this community to more than 10,000,000 pages per month. It has started working for Yahoo in re-building its business.  It will work for the junior mining and exploration sector.  The sooner the better.


3 Responses to “3-Way Junior Mining Consolidation Is Pierre Lassonde’s “Peanut Butter Manifesto””

  1. […] because we are now clearly seeing the wheat separated from the chaff.  At the time of my original peanut butter manifesto, there were simply too many bogus resource companies that were strong on promotion but light on […]

  2. […] Back in April 2008, I posted a story titled:  3-Way Junior Mining Consolidation Is Pierre Lassonde’s “Peanut Butter Manifesto” […]

  3. […] because, as readers of this blog know full well, I won’t shed a tear for the extinction of peanut butter small-cap resource companies that had no reason to be public other than to be […]