Private investor Don Hansen has honed his resource sector investment approach for more than 20 years.

Hansen then looked at producers, developers and explorers, mentioning his specific criteria for each level.

For example, when it comes to producers, he considers cost of production and whether the company has internal growth potential. In the case of developers, he carefully examines the company’s preliminary economic assessment; he also likes to see a clear trajectory for next steps, including timelines for a prefeasibility study, permitting, construction and production.

At the exploration stage, Hansen wants to see companies with the ability to raise money, preferably from high-profile investors. He also said skilled geologists are key at this stage, as are good relationships with labs that process drill results.

Watch the interview above for more of Hansen’s thoughts on how to evaluate gold and silver stocks. You can also click the the timestamps below to view specific parts of the interview:

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.