Steve Todoruk is a Sprott investment executive and professional geologist who has spent decades backing early-stage “new discovery” plays. He was hired by Rick Rule in 2003 after years of running and consulting for juniors. In this interview, I tried to get insights on his investing strategy. When it’s rational to buy a stock that’s just doubled on a discovery hole? What qualifies as a real discovery? How many stocks are too many stocks? Why do most junior mining investors lose money? How should non-geos deal with junior mining? And, finally, is there hope for me?

TLDR

1. Chasing a spike can be rational, if the first hole screams scale.
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   Steve says that you anchor your valuation expectations to the a pre-rerate price, but to evidence. When a discovery hole is thick (in true thickness), high grade, and internally consistent, it often sits within a large, expandable system that could generate years of value-adding drill results. Todoruk’s rule is to look for giant holes belong to giant deposits. Narrow high-grade needs extraordinary continuity to compete in this market, so he ignores narrow high-grade hits. In that context, buying post-gap and then adding as step-outs confirm geometry and continuity is not recklessness, according to Steve. He calls it disciplined underwriting of a multi-year program rather than a one-day chart move.
2. What is a “real” discovery?
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   A “real” discovery must have a credible path to major scale, and someone capable of building it. Todoruk’s minimum hurdle is a believable route to at least 2 million ounces of gold (or gold equivalent). A “real” discovery is supported that by width, grade, and continuity of both. It also needs true-width reality (not smeared composites), and early metallurgy that doesn’t kill the economics. He prefers outcomes where a major eventually builds the mine, because letting first-timers try invites avoidable execution risk. The thicker the intercepts and the more coherent the model, the less you need perfection elsewhere, and the more likely you’ll have an exit to a buyer with a building team.
3. How many stocks is too many stocks?
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   Steve says around 10 positions is his practical ceiling. Enough to visit sites, interrogate core, and actually monitor programs closely. His playbook is a small initial buy on proof, then multiple adds over quarters/years as drilling grows the footprint, nails orientation, and de-risks metallurgy. Returns target the portfolio, not the mythical 100X trade. For Todoruk, a double on a large dollar base matters more than chasing huge wins across fifty tickers.
4. Why do most junior mining investors lose money?
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   In a simple sentence; because they don’t follow the rules they already know and have heard 100s of times. Portfolios bloated with pre-drill or lightly drilled stories are promotional victories, not investment theses. Geophysical anomalies are targets, not ore. Core is the only truth. Jurisdiction risk is real and non-linear, because one policy or court decision can zero years of capex. Post-discovery, teams must upgrade. Serious companies need at least one seasoned geo on the board and at least one seasoned operator who’s been successful at the task at hand before. Capital raises, study work, and eventual build/sale should be competently handled by experience. Fewer stocks, higher standards, and relentless skepticism beat the “own everything” strategy over multiple cycles. Maybe not in a bull market, but eventually. According to Steve, cornerstones (royalties and/or majors) carry the cycle. Prospect generators can supply shots-on-goal without you bankrolling every wildcat, but there are limitations to the model.
5. How much work does it really take?
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   Steve says that most mornings nothing actionable happens, and his job is mostly waiting. When evidence hits, system-defining hole, clean step-outs, or a strategic corporate catalyst such as non-core mine sales, he moves with size. He looks to sell or reduce his exposure to individual names when geology stalls (fault offsets, continuity breaks, ugly metallurgy), when management won’t upgrade to match the asset, or if macro red flags flash (broad deleveraging events). Todoruk also says he doesn’t try to predict the postcode of the next discovery. He lets the drill bit announce it, then underwrites it with position size that makes the win count.

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