Portfolio Update: Reshuffling the Deck (July 14, 2017)

by FI Fighter on July 14, 2017

in Cobalt Updates, Copper Update, Precious Metals Updates

I’ve made quite a number of changes to the mining portfolio in recent weeks… Sorry for the delay in posting an update, but I was busy trying to fine-tune it a bit…

Anyway, it’s still a work in progress but here’s what we’ve got since last time (to the best of my memory):

  • Sold 246,000 shares of Aton Resources (ANLBF) @ ~$0.03/share
  • Bought 15,000 shares of Almaden Minerals (AAU) @ $1.142/share
  • Sold 7,240 shares of Endeavour Silver (EXK) @ $3.00/share
  • Sold 3,340 shares of Endeavour Silver (EXK) @ $3.02/share
  • Sold 69,000 shares of Avnel Gold (AVNZF) @ $0.3127/share
  • Bought 10,000 shares of eCobalt Solutions (ECSIF) @ $0.95/share
  • Bought 80,000 shares of Nzuri Copper (NZC.AX) @ $0.1416/share (A$0.189/share)
  • Bought 8,376 shares of GoldQuest Mining (GQC.V) @ C$0.38/share
  • Bought 45,000 shares of Ardea Resources (ARL.AX) @ A$0.60/share
  • Bought 6,000 shares of Newrange Gold (NRG.V) @ C$0.59/share

 

Man, that’s a lot of transactions!

 

Let me see if I can try and explain my decisions…

Aton Resources

First off, I exited out of my position in Aton Resources (AAN.V/ANLBF) since we are now operating in a low gold price environment and I’m well aware that the company will need to raise more funds sooner rather than later. I’d prefer not to get diluted down at a very unfavorable price and with sentiment across the sector so bearish right now, I really can’t see shares bouncing back to my cost basis, let alone ripping much higher outside of a major new discovery being made ASAP. The clock is ticking until the next fund raising, so I’m trying to be proactive here. If I was a betting man, my guess is that the gold price will stay weak for awhile longer still…

Although I think a published Preliminary Economic Assessment (PEA) for Aton’s Hamama resource would be nice, I really can’t see the market caring all that much about it right now; I would expect a yawn and not much else. So, it’s just a sign of the times which prompted me to cut my losses (~$6,000) and move on. Long-term, I hope the company does well, but I’m going somewhat more conservative at this time. Oh, and Egypt is still a wildcard and nobody really knows if the mining laws will be reformed or not.

Almaden Minerals

I transferred the remaining proceeds from the ANLBF sale into Almaden Minerals (AAU), which I covered in more details here. AAU is a play on both gold/silver, but I like the silver upside, especially with the project being located in Mexico. Hopefully when sentiment recovers in the space, somebody will make a play and take them out. Almaden just completed a financing to raise C$17 million (at higher prices than where shares are trading today), so no fears of dilution with this pick.

Ardea Resources and eCobalt Solutions

I loaded up on more cobalt stocks — Ardea Resources (ARL.AX/ARRRF) and eCobalt Solutions (ECS.TO/ECSIF), which I’ve covered on this blog before. Ardea is a “call option” on cobalt being able to sustain itself at these levels (and possibly rising even further still), and eCobalt Solutions is a near-term producer play. Both are located in safe and stable jurisdictions; Ardea’s cobalt project is in Western Australia and eCobalt’s in Idaho.

Nzuri Copper

The wildcard is my addition of Nzuri Copper (NZC.AX) which I think represents the best overall value in the cobalt space. We’re talking about high grade cobalt and high grade copper and what should be relatively small CAPEX to put their Kalongwe deposit into production.

Here’s a comparison chart that I put together for all my cobalt plays.

Please note: I make mistakes every minute of every single day, so please do your own due diligence and research to confirm any resource numbers for yourself! I don’t know shit about anything…

If Congo doesn’t blow up anytime soon, NZC.AX should do really well as the clean energy boom returns. On the other hand, if Congo descends into chaos and things go from bad to even more bad, well the hope here is that my other cobalt plays, Ardea Resources and eCobalt Solutions will provide a hedge and stand to benefit greatly, more than offsetting any losses from NZC.AX.

I’d like to believe I’m diversified enough in my cobalt plays, but yes, double dipping into Congo (I also own shares of Ivanhoe Mines; IVN.TO/IVPAF) is only for the brave (some would argue reckless).

Speaking of Ivanhoe Mines, Nzuri Copper has an agreement with Big Brother to secure 98% interest in The Fold & Thrust Belt Joint Venture (FTBJV) .

I’m strictly invested in the Nzuri Copper story for the cobalt, but the FTBJV provides exploration upside potential, which I look at as a nice “freebie” to have.

From Nzuri Copper.

Being right next door to Ivanhoe’s mammoth Kamoa + Kakula discoveries, you would have to speculate that the odds are quite good that Nzuri will also be able to find a decent amount of high grade copper (and possibly more cobalt) on their tenements.

From Nzuri Copper.

With all that said, I may triple dip into Congo yet again (I must be borderline insane) since the most prospective lithium project on the planet just so happens to also reside in everyone’s favorite address; I’ll share in a separate post the name of this mystery company (anyone who is even remotely following the lithium sector can easily guess who it is), but this is one stock I’m now watching quite carefully as the first round of assays are just around the corner.

Mother Nature really gifted this region of the earth with exceptional mineralization across many metals; it’s quite amazing, really. If Congo was perceived to be anywhere near as safe and secure as Canada, many of these companies would be trading at multiples of 3x, 5x, or even 10x higher than where they are.

Endeavour Silver

Let’s see, I also closed out my position in Endeavour Silver (EXK) when the latest press release hit the wire and I got scared of the possibility of continued mine problems… I covered the details here. As it stands, I currently only own one primary silver producer, Fortuna Silver (FSM)…

The silver price is extremely weak right now, so I have ZERO interest in adding or holding any marginal/high cost producers… My preference is to focus on the silver explorers/developers in this kind of harsh environment.

GoldQuest Mining

I also lucked out and grabbed some more shares of GoldQuest Mining (GQC.V/GDQMF) before the latest Cachimbo drill results came out; I was able to round off my position at 200,000 shares. GoldQuest has been one of my favorite gold developer plays for awhile now.

Avnel Gold

I cashed out half my position in Avnel Gold (AVK.TO/AVNZF), just as a precaution in case the Endeavour Mining (EDV.TO/EDVMF) merger goes awry for whatever reason. Hey, you just never know in this game for sure! I’ll probably cash out my remaining Avnel shares before the deal closes, since I don’t really want to hold more producers at this stage of the game.

Newrange Gold

Lastly, I added some more shares of Newrange Gold (NRG.V/CMBPF), which is a punt and my “lottery ticket” for a major new gold discovery in Nevada. Shares have retraced quite a bit since the first set of drill holes came out… The excitement has died down so my guess is that shares will either consolidate around these levels or head even lower… well, unless the spot price of gold recovers and it’s happy days again!

See, this is exactly why it’s never a good idea to chase after momentum trains! These stocks are beyond volatile and tend to ALWAYS pull back, no matter how good the initial news results were. Newrange Gold is absolutely the perfect example of that; Mr. Market is extremely fickle, so you gotta be careful! Personally, I’d rather chase Newrange Gold into the ground as opposed to buying it at 52-week highs any day of the week!

 

That’s all for now, folks.

 

Here’s where we stand at the close of market on 7/14/17 (last transaction was 7/13/17 and I currently own 27 total positions)…

I still feel the need to add some more clean energy metals… Cobalt, lithium, graphite, copper, nickel, I’m anxiously awaiting your next boom!

 

Fight On!

{ 5 comments… read them below or add one }

1 VinNo Gravatar July 14, 2017 at 6:18 pm

Thanks for the update Jay. I have added some more GoldQuest at 0.38 CAD as well (props for the Seeking Alpha article!). I am in the process of opening another brokerage account, so I can play the ASX. Any thoughts on when Birimian shares will resume trading?

Reply

2 FI FighterNo Gravatar July 14, 2017 at 6:24 pm

Vin,

Awesome timing there with GoldQuest, congrats!

In regards to BGS, it should be back online by 7/31, according to the latest press release:

http://www.birimiangold.com/pdfs/UpdateOnTimeframeToReinstatementOfTrading29Jun17.pdf

Cheers!

Reply

3 VinNo Gravatar July 14, 2017 at 10:53 pm

Thanks mate! I’ll look at this later tonight, while doing some more due dilligence on Birimian.

Have a great one. Cheers!

Reply

4 Roadmap2RetireNo Gravatar July 17, 2017 at 7:21 am

Whoa thats quite a reshuffle alright. Some very interesting moves there, FIFighter. Some unknown companies for me, will have to check em out.

Thanks for sharing
R2R

Reply

5 alNo Gravatar July 18, 2017 at 3:37 am

“Mother Nature really gifted this region of the earth with exceptional mineralization across many metals; it’s quite amazing, really. If Congo was perceived to be anywhere near as safe and secure as Canada, many of these companies would be trading at multiples of 3x, 5x, or even 10x higher than where they are.”

Actually, DRC is FAR safer than Canada, IF you know and are having great relations with the top local fi$he$, or are willing to $hare some of the potential profit$ that will arise down the road (There are no laws in DRC, contrary to Canada. This is a huge advantage when considering the mining business).

But to get that “great relation”, you will have to do some serious poly-tics studies, and determine the local organigram of the power structure, to determine who are the apex predators in the local power pyramid structure, and pay the needed amount of protection money. You are out of your league there, but the mining executives will probably feel like a big rich fish in a small pond…

As an aside, since you are now balls deep into another adventure (junior mining), and you are sitting on a lot of spare cash because you can’t find dividend plays in the expensive alternatives, why don’t you make a one month or more holiday trip to the DRC katanga region to visit your new investments?

:=))

Since you are not fluent in French, I would advise you to NOT travel to Kinshasa and then board a local flight to the Kolwezi area where those mines are located. But English speaking Zambia is bordering the Kolwezi/Katanga area, and you may make the travel trip of your life by visiting Zambia (great natural parks there, and lots of Chinese around that are investing and building stuff for the locals).

Using you native English speaking abilities to then ask a 3 months tourist DRC visa once in lusaka in Zambia (you will have to bribe the embassy “bus boys” to get a proper valid stamp fast and good), before hiring a local Zambian tourist guide near the DRC border, who is fluent in French/English (pay him let’s say $10 per day + free food/boarding/traveling, you probably double his monthly income), and check if he knows the DRC territory well enough so that he can protect you from local DRC shenanigans.

You will have to get all sorts of innoculation shots before entering Zambia/DRC, and take them well in advance so that your body can recuperate from the mild virus attack and has the time to start growing anti-bodies, your body is then weaponized from local possible diseases.

And never forget, a condom is really needed there, and is a good water container if your water bottle and more gets stolen underway… The richer you look, the bigger a target you may be, so don’t flash you Iphone and jewellery watch and Rayban’s sunglasses. The more downtrodden you look, the less issues you will face…

Have fun.

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