ROSS BEATY: I have the benefit of experience, a lot of experience in being able to sort the wheat from the chaff. You have to cross your fingers a lot and hope things don't happen. But when they do, the only way to deal with it is to build a business that's big enough that it's not going to be a killer to your whole business plan. And that means diversification and scale.

So the power business itself, it's all about scale. The bigger the scale, the less a calamity on one project affects the mother ship. Plus, of course, the bigger it is, the lower the cost of capital, which is wealth creating by itself. So getting big really does make a difference in the power business.

Clean energy is no exception. If you have a large clean energy company and you're focused on clean energy, you have a niche that investors who want that kind of company will go to. The only way you can appeal to them is to stay pure but be diversified enough to give them the coverage when it's not blowing-- in Texas, in 2008, when I began my geothermal power company, there were 16 public companies in Australia and Canada. 16 power companies whose name had "geothermal" in them. By 2011 or 2012, there were 3.

GRANT WILLIAMS: Right.

ROSS BEATY: The others had gone under. There were 3. Some of them had gone under through being combined and merged. But the shareholder wealth loss, or dissipation, in that period from that business was colossal. Why? It was sort of the flavor of the month from 2004 to 2008-- or 2009. And it was a bad business sector. Ask Rick Rule for the lessons he's learned.

GRANT WILLIAMS: No, no. I'm sure. I'm sure.

ROSS BEATY: Because he was from what is so many of those companies. Proved to be a very tough business. The ones that survived, like mine, survived because we diversified and we grew much, much bigger, which is hard work by itself but you can-- ultimately, you can do it.

GRANT WILLIAMS: But when you are-- let's say you have to close a mine for whatever. There's a cave-in or something. What's the process of that from a management perspective? Where in the scale of the problems that creates is the shareholder?

Because to them, obviously, it's everything. And they can overreact, and they tend to overreact. As soon as you get those things happen, people dump the shares because they're terrified of how bad it could be. Do you focus on that at all, or can you not do-- you really--

ROSS BEATY: You really can't.

GRANT WILLIAMS: --can't afford to do that.

ROSS BEATY: When you're-- like when you're me in a company, Grant, you're not a seller. You can't--

GRANT WILLIAMS: Right.

ROSS BEATY: --I can't sell out, right? I've got two outcomes-- either I get bought out, I sell once-- and I've done that many, many times-- but I only do it once. I don't sell along the way. I buy along the way. But I only sell once.

Or if I'm in a company-- if I'm building a company that's going to be a long-term operating business, my attitude is I'm going to build that company until I'm no longer needed to be there, in which case I then either resign or retire or leave it or die, or something like that. And the company survives my exiting the company, in which case, it's a happy ending. Maybe it just at my death I-- the stock is sold when I croak. I mean, in other words, I don't build these companies to exit along the way. Either I get bought out or I hold them until the long-term.

The critical thing is we tell shareholders what we're going to do and we follow through. We execute that plan. The companies that frustrate me are the companies where I invest in them. I give them a million dollars to do x and they go out and spend it on y.

GRANT WILLIAMS: Right.

ROSS BEATY: That drives me crazy. And I never invest in them again. I don't mind if they take that million dollars, if they say they're going to go and explore a bunch of holes in this place for this commodity. And they come up with nothing, that's fine. They execute well, that's exactly what I made that bet for.

I give them a million dollars. I understand this risk. I understand it may end up with zero. But I also may end up with $10 million--

GRANT WILLIAMS: Yeah.

ROSS BEATY: --if they get lucky. And I'm prepared to take that risk. And I never whine if it goes to zero because that's the nature of the business. But if they go and divert it somewhere else, then I get mad.

GRANT WILLIAMS: So people watching this who invest-- I mean, plenty of people are watching who do invest in resource stocks. There'll be plenty that maybe will end up investing in them. And you invest not in companies you run, but you also invest in other companies.

What's kind of your checklist? What do you look for? And what order of importance? And how do you figure out, OK, this is a company worth my investment?

ROSS BEATY: Well, the first, by far, is who's involved. I look very carefully at who's involved. And I look at their record and I often meet them in conferences or wherever. And I encourage all investors to try to do that, especially with the smaller companies to get a measure of the people who are involved.

Because at the end of the day, the smaller companies-- not necessarily the big ones-- but even it applies there. It's the management that's very important. But really the second thing and it's-- for me, it's as important is the quality of the project. I do try to look at that carefully.

You can't get too cute because you never really know what it's going to be like until, you know, you drill a few holes, or until you do a bunch of engineering work to make sure that the gold or copper or whatever it is can actually be recovered--

GRANT WILLIAMS: Yeah.

ROSS BEATY: --which doesn't always happen. So I do look at the property. I have the benefit of experience, a lot of experience, in being able to sort the wheat from the chaff and looking at quality projects. And so-- but even I'll get involved in projects that don't work out. And that's just the nature of the business-- the risk of the business.

So the story there is, I think, again, diversification. You want to have a portfolio of these type of companies. Out of 10 companies-- not 50, not crazy numbers but 5 or 10. And you're going to have 10% or 20% that go to 0. You're going to have, hopefully, maybe 1 out of 10 that really has a huge, huge gain. And the ones in the middle, you're going to maybe get your money back. And at the end of the day, you're going to outperform on average.

Now, if you have a portfolio-- if you then also step back and try to ignore the noise in the market, the noise in the newspapers, the noise and all the pundits, and actually think for yourself for a minute. Travel the world, understand what's happening in the world and take a long view on metal prices. Look at where they are in the cycle.

If you buy at the top, doesn't matter what you buy, it's going to go down. If the metal price turns. Similar at the bottom, if you buy almost anything at the bottom, everything will rise. The rising tide lifts all ships. But even in that environment, you will get better performance out of certain companies, certain management, and certain properties than others. And that's, I think, the thing to focus on is to think for yourself, identify trends. It's a cyclical business. It's not making a computer. It's not something you have to worry about any revenue. Revenue's set by world prices.

GRANT WILLIAMS: Yeah.

ROSS BEATY: You don't have control over your revenues. So you've got to understand how these cycles work and they really are-- they're somewhat predictable in that you know when things are not at the top. You don't know ever when it's going to be at the top. You know when it's not at the top. If it's sort of-- like today gold is around $1200 and some-- the high was $1800. The next cycle is going to shoot through that. I know that. I absolutely know that. I just don't know when.

So buying today is a much better time than buying when gold hit $1800 5 years ago or 7 years ago. And when you have that happen, then you're going to do well regardless. But you can also do well even in a down market. It's just much more difficult. And for that you have to be a very astute investor. You have to follow the companies. You have to be diversified enough to have that ability to see losses in a few companies and gains in others. And then you have to rely on management and on lady luck.

GRANT WILLIAMS: Well, this is-- for me I've always-- I would look for management and you look for execution, and to your point, doing what you said you were going to do. And really after that, everything else is slings and arrows. You can't really--

ROSS BEATY: It's a little bit slings and arrows.

GRANT WILLIAMS: Yeah.

ROSS BEATY: It's a little bit of a roll of the roulette table.

GRANT WILLIAMS: But it's very difficult, I think, for individual investors the only problem you have there is between your ears. Because you've wrestled with the fact that you might be losing money and people get over-committed and they do-- they keep buying all the way down till they get much too big a position for their own comfort levels. But institutional investors have to answer to investors.

ROSS BEATY: Right, which is really hard. I mean, I see institutional investors making the most boneheaded decisions again and again and again because they kind of lose confidence, and they don't want to look bad. And they sell the-- they sell companies they should hold onto. When things turn a little bit south, they sell these companies.

I've had that happen more often in my own companies when I see a great institutional investor have to sell and then the stock triples. And I just say, why didn't you hold on? This was going to have-- I could have told you that if he'd had the time to phone me or come and visit our management, I would have told you what we were doing. Instead, you just have this knee jerk reaction to hit your quarterly numbers, to sell and it's just boneheaded.

If you had invested in 1985 or through the last 30 years only in 4 people, you'd have thousands and thousands and thousands of percent gains over that period. You'd have-- you'd have had compounded gains of, I'm going to say, 25% to 30% per year for 20 years, 30 years, like crazy gains. Me, Lukas Lundin, Richard Work, and Robert Friedland, those are the 4 that pop up. Now, there's plenty of other names. There's some great entrepreneurs in Australia. There's some great entrepreneurs in England and in Toronto. They're just 4 names that I know really well. A handful of others, as well. But only those for whom-- you know, you'd have made out like a real bandit. And that's all you'd have had to invest in.

GRANT WILLIAMS: Yeah. But it's against the people.

ROSS BEATY: And that's talking about purely people.

GRANT WILLIAMS: Yeah.

ROSS BEATY: It doesn't matter-- you know, I was into nickel and copper and gold and silver. Friedland has been in all kinds of stuff. Lundin's mostly oil, his big hits actually oil and gas and-- but it's just-- he just knows how to create wealth. And I just can't-- in my personal world, I can't put a finger to why that is in my world that I've been so lucky, and why everybody can't do it? It's not brains. I don't think it's brains. I don't have any more brains than any other guy in this business.

I just-- I treat the money like it's mine and I don't spend it--

GRANT WILLIAMS: Right.

ROSS BEATY: --crazily. I don't consider other people's money when I get given shareholder money. I feel it's a great privilege, and it's an honor to be guarding it for them as a guardian. And I try to spend it-- I'm known as a very frugal, very cheap manager. I don't pay my people very well. I have very low overhead. I try to treat the money like it's-- like it belongs to my shareholders, as it does.

And, you know, I try to spread risk. I try to joint venture things if they're really risky. I try to spend my own shareholders money on things that are much more certain. I do try to diversify. I try to have lots of balls and lots of places a lot-- in the air a lot, as much as I can.

Also, I'd say I try to lead a full life myself personally where I have a really great family and I have a lot of karmic energy from that. And it helps my business run. I love life, as well. I love hiking. And I love getting outdorrs. I'm fairly healthy and fit. And that feeds into the business success somehow. I can't put a tangible value on it, but I think it all-- it all kinds of fits in a box.

GRANT WILLIAMS: When you talk about it's not intelligence, I think there's a certain-- there is a certain intelligence that comes through as you have success and you have failure, you learn what was successful and then you learn what not to do.

ROSS BEATY: That's true. Success begets success, and failure almost implies you're going to keep failing because you don't have the-- right now, I have the financial resources that I've never had before. And just for that reason alone, I was able to prop up my clean energy company again and again when I needed money.

If I didn't have that ability to help it, it wouldn't have gone through those tough years. With Equinox goals now, I have the financial capacity to just-- to sort of support it. Even if we're wrong and the gold price-- the gold price goes down, the assets we're building now that are going to have great value, if the gold price goes down, that value is going to disappear.

Well, I have the capacity to bail that company out. And that alone is going to ensure its success. Because I'll end up just-- if I have to buy shares at a lower price, I'll buy the whole company. I mean, I can afford to do that now. So that's a nice little thing to have in my pocket now that I never used to have. And it's-- it's reassuring, as well.