Portfolio Update: Reshuffling the Deck (October 13, 2017)

by FI Fighter on October 14, 2017

in Cobalt, Cobalt Updates, Precious Metals, Precious Metals Updates

Just a few trades for this week, perhaps slightly less that usual.

Here’s what we got for the week ending on October 13, 2017.

  • Bought 7,000 shares of eCobalt Solutions (ECSIF) @ $0.88/share
  • Bought 369,000 shares of Alexandria Minerals (ALXDF) @ $0.047/share 
  • Bought 10,000 shares of eCobalt Solutions (ECS.TO) @ C$1.07/share
  • Bought 15,000 shares of eCobalt Solutions (ECS.TO) @ C$1.03/share

eCobalt Solutions

I made three separate purchases this week to add shares of eCobalt Solutions (ECS.TO/ECSIF).

The idea here was to add to my existing position which is my way to gain exposure into the cobalt sector, which I feel is a commodity that will see increasing demand over the next few years. Just speculating here, but I think shares of eCobalt Solutions are showing a lot of weakness lately due to a somewhat disappointing Definitive Feasibility Study (DFS) that highlights higher initial project CAPEX ($186.7 million vs. previously assumed $147 million) and slightly lower cobalt reserve grades (0.47% vs. previous Measured + Indicated of 0.55%).

From eCobalt Solutions.

From eCobalt Solutions.

I think some of the price drop was justified, but shares of ECS.TO/ECSIF look a bit oversold to me at the moment…

Since I think the market demand for cobalt and cobalt equities will only intensify in the future, I thought now was a decent time to add some more shares… No, eCobalt Solutions is NOT the perfect cobalt stock by any means (it’s a small project and the IRR isn’t spectacular), but quite frankly, there are very few viable options out there (e.g. Congo, low grade nickel laterite deposits, etc.) and this company is further along and more de-risked than most juniors… The Idaho Cobalt Project (ICP) is fully permitted and the next stage of development will be to secure debt/equity financing, which should be achievable in this current market environment.

At this point in time, I think I have a pretty decent sized position in eCobalt Solutions, so I may ultimately elect to trade a few shares if there is a robust recovery in the short-term…

We’ll see…

Alexandria Minerals

I initiated a postion in a new company this past week, adding shares of Alexandria Minerals (AZX.V/ALXDF) to the portfolio for the first time.

Alexandria is located in the right address (Quebec), and they’ve got an interesting gold project (and large land package) that is next door to a lot of major gold companies (potential takeover candidate?)…

From Alexandria Minerals.

A resource upgrade is due at the end of this year/early next year, and if that looks good, I can see the share price re-rating quite significantly… And of course if gold and gold stocks ever catch a bid, look out!

From Alexandria Minerals.

There has been lots of drilling in 2017…

This particular comment, made in early August, caught my attention….

From Alexandria Minerals.

“These latest high-grade gold assays continue to confirm our belief in the enormous exploration upside at our flagship property in this highly prolific mining region,” said Eric Owens, President and CEO of Alexandria. “Our summer drill program is underway and has rapidly expanded upon our very successful winter drill program. We have enlarged and better defined the high grade vein system there, extended those veins to 1,100 metres in length, deepened them by 150 metres below the pre-existing resources, discovered additional high-grade vein sets, and begun building across-strike volume. We are very confident that our summer drill program will deliver further growth, contributing to a new resource estimate by the end of the year. Our expectation is that our new resource estimate will be more than double our existing resource estimate from 2009.

Getting to 1 million plus ounces of total resource should certainly appease the market, one would think…

The biggest knock on this company is the terrible share structure (about 581 million shares fully diluted), but there’s going to be a meeting next week and one of the items on the agenda is the proposal of a share rollback, which would obviously help sell this story a lot better were it to go through (which I think it will)…

From Alexandria Minerals.

Still, at ~C$40 million market cap fully diluted, I think investors will be hard pressed to locate better value in the gold space at this time…

Conclusion

Not too many moves this past week… Shares of eCobalt Solutions continue to get whacked, so I added to my position here… Alexandria Minerals was struggling for the better part of the week as well, so I initiated a position, and then it went on to close the week pretty strongly (volume and share price performance).

Here’s where things stand now…

Until next time…

 

Fight On!

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