LONDON: Warren Irwin is sticking with mining companies, even though his hedge fund, the best performer among its peers in 2006, is down 3.7 percent this year.
Gold mine investments brought Rosseau Limited Partnership a 122 percent return last year, the most among hedge funds that bet on mergers, liquedations and spinoffs, according to the most recent rankings from Hedge Fund Research. Irwin topped 240 other managers in the group, which had average returns of 15 percent in 2006.
Irwin, who is based in Toronto, buys stakes in mines before they have proven their reserves, in the hope that they will be sold. Last year, for example, he quadrupled his money when he sold his holdings in Virginia Gold Mines, a Quebec city exploration company, to GoldCorp, the second-largest Canadian producer after Barrick Gold, the world’s largest.
“It’s hard to turn our backs on the resources sector,” said Irwin, who said he almost died in a helicopter crash while scouting for gold in Ecuador last year.
“It’s extremely hard to find a drill rig in the world today because they’re all working,” he said. The odds against finding a new mineral discovery will remain substantial, he added.
