Portfolio Update: Reshuffling the Deck (February 21, 2017)

by FI Fighter on February 21, 2017

in Cobalt Updates, Graphite Updates, Lithium Updates, Precious Metals Updates

I leave for the Philippines (Cebu) later this afternoon! But before I head out to the land of sunshine, beaches, and smiles, I thought I would give readers a quick update with my latest wheelings and dealings in mining stocks…

Yes, I have been making a lot of moves as of late, but I assure you, I’m NOT attempting to become a daytrader (I already know that I really suck at that… from experience)! There are certain companies that I own which I deem “Core Holdings”, so I try not to mess around with those too much… But as everyone knows, stocks (especially mining stocks) do tend to get overbought and overvalued as well… So, whenever I’m in good profits, I have no qualms with selling off some shares to book profits and reduce the cost basis… And besides that, there are some “under the radar” gems that I’m digging right now and have been accumulating in recent weeks…

Without further ado, here’s the latest…

  • Bought 15,500 shares of Orezone Gold (ORZCF) @ $0.5379/share (~C$0.7068/share)
  • Bought 32,670 shares of Birimian Limited (EEYMF) @ $0.2307/share (~A$0.30/share)
  • Bought 40,309 shares of Black Rock Mining (BKT.AX) @ A$0.125/share
  • Bought 1,000 shares of First Majestic Silver (AG) @ $9.70/share
  • Bought 1,000 shares of Fortuna Silver (FSM) @ $6.20/share
  • Sold 54,000 shares of Critical Elements (CRECF) @ $0.677/share (~C$0.8895/share)
  • Bought 18,140 shares of eCobalt Solutions (ECSIF) @ $0.9171/share (~C$1.205/share)

 

Orezone Gold

I added to my Orezone Gold (ORE.V/ORZCF) position, as I strongly feel that this gold developer is one of the more undervalued companies at this time.

I shared my thoughts last time around, and if the bull market in precious metals resumes course again, I think Orezone is an attractive option as a potential takeover candidate for a mid-tier/major producer. Sure, Orezone has run into some recent issues (resource downgrade) with their Bombore project in Burkina Faso, but I think that they’ve still ultimately got enough economical gold ounces in the ground to support this mine getting built and put into commercial production.

In summary — Great asset, proven and experienced management team, strong Major Shareholder support (Sun Valley, Sprott, Ross Beaty, etc.), tight share structure (with no outstanding warrants!), workable jurisdiction, and cheap valuation relative to its peer group.

I now own 65,000 shares of ORZCF.

Birimian Limited

I added shares of Birimian Limited (BGS.AX/EEYMF), one of My Top Picks for 2017. Due to uncertainty surrounding the future direction of management (there is a General Meeting scheduled for March 22 to nominate/remove certain directors), the stock has been trading in a very narrow channel in recent weeks.

Yup, despite the company recently publishing some great results on the first set of holes in their most recent drill program, market response has been muted. Since I prefer to “buy low”, oftentimes I’m willing to speculate (and gamble) that the risks will be worth the reward…

Birimian Limited will be a binary bet for me… This speculation will either work out brilliantly, or I will have made a huge mistake with this stock… I just don’t see another possible outcome here.

“Buying low” has ALWAYS been the toughest thing for me to do as an investor/speculator… You typically feel like a total moron while you’re doing it (how come nobody else likes this stock!?!)…

I now own 520,000 shares of Birimian Limited (BGS.AX + EEYMF).

Black Rock Mining

When it comes to clean energy, I am way, way, way more optimistic on the growth prospects of the cobalt and lithium sectors than I am of graphite (which is more opaque and dominated by Chinese suppliers). That being said, if any junior out there has a shot of breaking into the industry and securing a binding offtake agreement (BOA) with a legitimate end user, I think Black Rock Mining (BKT.AX) is as good a bet as any…

Black Rock Mining has extremely high grade and high purity natural flake graphite, and the stock trades at a far more attractive valuation than its more advanced peer, Magnis Resources (MNS.AX). Hence, the appeal…

Most recently, the company released the following update, showing promising battery tests results, so far…

From Black Rock Mining.

A Pre-Feasibility Study (PFS) is due sometime in March, and if that looks promising, I think shares could get re-rated much higher than where they are trading today…

Here’s what the initial Scoping Study (SS) looked like…

From Black Rock Mining.

As you can see from the above chart, the project economics look quite robust… Net Present Value (NPV) of $285.7 million, Internal Rate of Return (IRR) of 62%, and a project payback of only 2 years… CAPEX is also only a modest $57 million, which means financing shouldn’t be too incredibly difficult to obtain…

The PFS should only improve on these initial numbers, but I guess we’ll find out soon enough…

When it comes to graphite, I’ve got more than enough Black Rock Mining shares now… and I have no real interest in adding any additional graphite stocks to my portfolio…

Why the decision to add more shares if I’m not entirely all that bullish on the graphite sector as a whole? Well, as copper, iron ore, zinc, and even coal have demonstrated to me in recent months, when it comes to trying to “forecast” and “predict” the future direction of commodities, it’s really a crapshoot and impossible task for anyone… Maybe graphite also explodes upwards again one day and all these mining stocks tag along for the ride?

Who knows, anything is possible… At these prices, though, I thought it was worth the risk to add just a few more shares to my portfolio…

So I did…

I now own 120,000 shares of BKT.AX.

First Majestic Silver and Fortuna Silver

As I shared with readers previously, when it comes to commodities this year, I’m most bullish on silver and cobalt. When I sat back and analyzed my portfolio, I realized that I was deficient in silver, so I’ve been looking for some opportunities to add a few more shares…

Why First Majestic Silver (AG) and Fortuna Silver (FSM)? These are two of the better silver stocks out there, and companies that I think allow me the luxury of being able to “set it and forget it”…

Quite frankly, I’ve got more than enough shares of junior mining companies to occupy my time, so sometimes it’s just nice to own a few companies who have strong management teams in place that you trust to keep on delivering results and operational excellence…

Also, in the world of junior mining silver stocks, man, it’s been real tough for me to find any that I want to sink capital into… With gold and lithium stocks, I’ve got many ideas that I like, but with silver, I just haven’t been able to find any conviction ideas with the early stage explorers… So, I’m just going to do the easy thing and go with the more proven names in the sector.

Here’s how I’m positioning myself in the silver space.

  • First Majestic Silver
  • Fortuna Silver
  • Endeavour Silver (EXK)
  • Alexco Resource (AXU)
  • Bear Creek Mining (BCM.V)

I still own shares of Defiance Silver (DEF.V), which I’ll probably offload in the coming months… Again, with the junior explorers, I just haven’t been able to find a name that I really like…

Well, maybe I should have listened to my good buddy Sabeel (Roadmap2Retire), and bought some shares of Brixton Metals (BBB.V), which shot up like a cannon earlier today!

WOW!

Oh well, you can’t win em’ all… unless your name is Sabeel… 😉

I think I’m just going to stick to the names that I outlined above…

But damn, congrats Sabeel and all the other BBB.V holders out there!

Critical Elements

Critical Elements (CRE.V/CRECF) is absolutely one of my favorite ideas out in the junior lithium space. Having said that, the stock has gone hyperbolic over the last two weeks or so…

And as you readers all well know, I have no problem trimming positions, or making attempts to “sell high”… With Critical Elements, I was sitting on some nice profits, so I decided to significantly reduce my cost basis today…

My cost basis on my CRECF position is now down to $0.070 USD/share

 

Symbol Description Qty Cost Basis (USD) Price (USD) Contribution (USD) Market Value (USD) % Delta (USD)
CRECF Critical Elements 60,000 $0.070 $0.690 $4,212.73 $41,400.00 4.89% $37,187.27

 

My cost basis on my CRE.V position remains unchanged at C$0.495/share… I have yet to trim (sell) any of my CRE.V shares.

 

Symbol Description Qty Cost Basis (CAD) Price (CAD) Contribution (CAD) Market Value (CAD) % Delta (CAD)
CRE.V Critical Elements 68,000 $0.495 $0.890 $33,627.00 $60,520.00 5.44% $26,893.00

 

I like to try and take wins when I can get them… I still strongly believe in the Critical Elements story, but I also feel the need to de-risk myself as often (and as much) as possible.

I still own 128,000 shares of Critical Elements (CRE.V + CRECF).

eCobalt Solutions

Cobalt is scorching HOT right now, and I don’t want to miss out on this party! Seriously, I don’t like to chase stocks up, but when I saw the spot price of cobalt eclipse over $20/lb, I just had to say, “Wait a minute here…

From InfoMine.

The trend is your friend…

So, I added a few more shares of eCobalt Solutions (ECS.TO/ECSIF) today (fortunately before the late afternoon spike up even higher to close out the day at C$1.43/share), and now I feel a lot better!

I’m just speculating, but I think the best is yet to come in clean energy… for lithium, graphite, copper, nickel, and cobalt… especially cobalt… I mean, Elon Musk hasn’t even gotten back on stage and started dancing and singing again… When that happens (maybe in March/April for the final Model 3 unveiling event?), I want to be sure that I am damn ready to benefit from all that hype…

I now own 50,000 shares of eCobalt Solutions (ECS.TO + ECSIF).

Summary

Lots of transactions once again with this latest update… You know me…

Gotta get some sleep and pack for my flight in a few hours… But before I sign off, I’ll leave you viewers with this…

My current watchlist.

One of these stocks (which I don’t currently own in my portfolio), I want to initiate a large position in because I feel a significant re-rating will take place over the next year or so…

Another one of these stocks (which I also don’t currently own in my portfolio), I think has significant exploration potential and is backed by someone (an industry titan and legend) who I’m quite fond of for helping me realize my greatest investment ever, so I’m keeping close tabs and looking to buy on any meaningful dips.

One of these stocks (I already own), I want to add a few more shares of…

Lastly, one of these stocks, I’m just watching on the sidelines with great interest but no real intentions of buying… However, in case they make a major discovery, I want to be sure I have it on my radar screen…

 

Life is all about balance… With all that said, it’s now about time for me to go out and play again! 🙂

 

Happy Hunting!

{ 8 comments… read them below or add one }

1 Roadmap2RetireNo Gravatar February 21, 2017 at 3:47 pm

Thanks for the shoutout buddy.

BBB seemed like an interesting company and I decided to take a gamble on it and got lucky 🙂 its not over yet…and I started off with a half position last week — hoping I get more buying opportunities in the future.

Have a great time in Cebu & the Phillipines!
R2R

Reply

2 FI FighterNo Gravatar February 21, 2017 at 4:39 pm

Sabeel,

When it comes to junior mining stocks, whether it’s skill, luck, or something else, a win is a win and you just take it with a big smile on your face! 🙂

Congrats on the gains buddy! Hope you have some more great buying opportunities in the near future. I’m definitely watching BBB.V a lot more carefully now lol.

Cheers!

Reply

3 FinanzrNo Gravatar February 22, 2017 at 2:37 am

Congrats on BBB, R2R – you got in at an even better price than me. I pulled the trigger a few days to early. But happy with the recent jump. This stock came off a long way, and I think we will see some nice gains to come!

Reply

4 JasonNo Gravatar February 21, 2017 at 4:32 pm

Any thoughts on Aton? Been waiting for it to move. I know they just announced the start of their drilling today. Would love your thoughts on the potential there. Thanks.

Reply

5 FI FighterNo Gravatar February 21, 2017 at 4:43 pm

Jason,

From a risk vs. reward perspective, I really like Aton Resources (AAN.V). They control a massive land package and already have resources on two of their prospects (Abu Marawat and Hamama West). At the current market cap, the upside could be immense if they hit anything of significance, particularly massive sulphides (VMS) as they are aggressively targeting after.

The Nubian Shield in Egypt is so underexplored, I’m optimistic they will be able to prove up a multimillion ounce gold district, eventually…

It’s going to take a lot of patience with this speculation, but at ~C$10 million market cap, as long as the dilution isn’t extreme (like the last round with full 5 year warrants), the downside risks seem moderate. The new management team seems to be moving in the right direction, and I’m really liking the news flow as of late… They are for sure keeping investors in the loop and moving ahead with a plan, which is a huge turnaround for this once broken gold story.

I’m watching Aton very closely… Just hope they can find 1/2 of a Sukari! 🙂

Cheers!

Reply

6 PonNo Gravatar February 21, 2017 at 4:51 pm

*sent a comment earlier, but forgot to click I’m not a robot, so I think that comment is lost

Yes, I also bought ECS today. 6%up when I woke up, 10% up when I’m in office, 20% end of day…

Reply

7 FI FighterNo Gravatar February 21, 2017 at 4:57 pm

Pon,

Goshdarnit, I would have loved to read what you had to say!

Those anti-spam bots… sighz…

LOL! Yeah, I saw ECS.TO stuck in neutral for awhile and kept looking at the cobalt price… Finally, I decided to just bite the bullet, thinking I might have regrets if I didn’t…

Cobalt is HOT, and we aren’t even into the spring season yet… Usually, Elon likes to come out of hibernation around spring/summer, so we’ll see what he has in store for us this year.

All the best!

Reply

8 Jay GNo Gravatar February 21, 2017 at 10:39 pm

Wow, didn’t realize the cobalt spot price was going bonkers like that. I don’t know jack about the in depth supply/demand outlook, but that looks like it could be just the start of a huge move… Can’t believe I’ve been sitting here watching eCobalt solutions for months now, doing nothing about it. Maybe that changes tomorrow. Just goes to show you how “waiting for a pullback” can cost you big time. I keep learning how each stock/situation needs to be looked at on a case by case basis – the same rules don’t always need to apply to everything, need to integrate and reevaluate the macro picture, etc. Always learning…

Finally bit the bullet myself on a few other names – Mariana and Cordoba. Hot Maden is shaping up to be too good of a deposit to not be involved in, geopolitical risks be damned. I started getting into Nexgen first week of the new year – that one has shown the power of what a world class deposit can do for the share price…

One of those on your watch list is also on mine, just waiting for my global trading account to be enabled and I will be buying asap. Pretty much ticks every box imaginable for what you could hope for in an explorer.

Sold half of my Goldquest position today (just over a double) and feeling like an idiot. Looking at it again, it looks like it’s probably just getting started. This is quite a challenging game we’re playing, but damn it’s exciting.

Reply

Leave a Comment

 

{ 1 trackback }

Previous post:

Next post:

Copyright © 2012 FI Fighter