R. Michael Jones is known for his ability to build precious metal mining companies, but now he’s hyped about natural gas.
“When you look at the difference in the BTU [British thermal unit] cost in oil versus gas it’s huge,” Jones told BIV. “Again, it’s a lot like mineral deposits. Grade always finds its way to the surface, the market always finds its way to the lowest cost source of energy and natural gas is there.”
Jones’ latest play is the venture-listed Nextraction Energy Corp. (TSX-V:NE), which is focused on unconventional gas development in the U.S. Nextraction is still a fledgling company, but Jones is the man behind Vancouver-based precious metal explorers such as MAG Silver Corp. (TSX:MAG) and Platinum Group Metals Ltd. (TSX:PTM).
He also co-founded West Timmins Mining, which was sold to Lakeshore Gold Corp. (TSX:LSG) last year for $340 million.
Jones believes emerging markets around the world are going to create a great deal of energy demand, and natural gas is going to become a low-cost alternative to oil.
He said the gas business isn’t all that different from mining, and new technology means previously uneconomic shale gas plays are ripe for the picking.
“It’s a lot like what we look for in the precious metals business,” he said. “We look for a paradigm shift where there’s a new piece of information that changes the dynamic of an area, and this is an example of that.”