Portfolio Update: Building My Positions (December 11, 2015)

Screen Shot 2015-12-11 at 8.49.32 AM

Although my main objective at this time is to conserve cash, I did make a few transactions that I will share with readers now. Rather than having to dip into my cash funds, I sold off shares of First Majestic Silver (AG) for a modest profit last week, and then proceeded to use those funds on other ideas.

Here is a recap of my most recent activities:

Portfolio Transactions:

  • Sold 4,000 shares of First Majestic Silver (AG) @ $3.60/share (+$721.50)
  • Bought 3,100 shares of Energy Fuels (UUUU) @ $1.92/share
  • Bought 15,000 shares of Balmoral Resources (BAR.TO) @ C$0.44/share
  • Bought 25,000 shares of Pilot Gold (PLG.TO) @ C$0.26/share

 

I’m still a big fan of AG, and hopefully I’ll have another opportunity to buy back in should it trade for below $3.00/share again…

As I’ve mentioned before, I see deep value when UUUU is trading at below $2.00/share, so I decided to top off my position with this latest purchase.

Learn more about Energy Fuels:

I now own 10,000 shares at a cost basis of $2.13/share. I should add that my own personal strategy is most likely to liquidate half of this position on the first double (~$4.26/share).

Next, I took a flyer on another exploration company, BAR.TO. This stock has been punished heavily this year, in spite of the company releasing some promising drill results on both of their major projects, Grasset (nickel) and Martiniere (gold).

In general, I like to focus on mid-tier producers since they are inherently less risky than sole-risk exploration speculations such as this… With that said, Balmoral plans to release their first resource estimates for both projects sometime in early Q1 2016, so I took a gamble in advance with the hopes that they will deliver the goods and exceed market expectations. This stock is definitely one of the higher risk propositions in my portfolio.

On the brightside? The management team is strong and has delivered great results before in the past.

Learn more about Balmoral Resources:

Let’s hope they can deliver value to shareholders again!

Lastly, my spreadsheet flashed bright yellow, alerting me that I was down big on PLG.TO (it happens whenever I’m down over 20% on any individual position). As such, I used the opportunity to dollar cost average (DCA) on yet another exploration story. I now own 60,000 shares of PLG.TO at a cost basis of C$0.329/share. I’m still heavily in the RED with this position, but I think I’m just about fully allocated here… I really like the value at C$0.26/share, but I can’t see myself adding any more shares after today’s transaction.

Pilot was a darling of the industry a few years ago, but just like Balmoral, it’s currently residing in the doghouse… With an Enterprise Value (EV) of under C$20 million, I just couldn’t resist adding more shares… The company has 4 key projects: Kinsley Mountain (Nevada), Goldstrike (Utah), TV Tower (Turkey), and Halilaga (Turkey). Not to mention, Pilot is backed by a very competent (and senior) management team that is well versed in exploration.

Learn more about Pilot Gold:

Although drilling results haven’t been spectacular this year, they do have resources out, and you would have to think that the value of all their assets (and work to date) far exceeds their current market valuation.

As a latecomer, it’s AWESOME to be able to buy shares so cheaply when you know that past financings were done at much higher costs:

April 2, 2014:

Pilot_Financing

Not too long ago, capital was raised at C$1.53/share! Shares of PLG.TO are currently trading for C$0.26/share!

The stock would have to rise close to 6x just to get back to those 2014 levels…

That’s insane…

Again, as a latecomer, that’s wonderful news (provided the company isn’t fundamentally broken which I don’t believe is the case with Pilot)… You get to pick up all the work that was previously done on these projects for pennies on the dollar…

Pilot has about C$10 million in the bank, so they should be well funded for 2016, although they may have to raise additional capital soon (hopefully share prices will rebound a bit before that time comes).

 

In any case, I’m done buying any more stocks until after the FOMC meeting next week.

 

Now we play the waiting game…

 

Happy Hunting!

 

Photo Credit: Pilot Gold

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Lithium – A Most Hated Sector (August 16, 2016)FI FighterJNo Nonsense LandlordMike Recent comment authors
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Mike
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Mike

and when they have to dilute the shares to take on more debt to sustain operating expenses?

No Nonsense Landlord
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It’s good you are liquidating stocks that have a gain. I am not sure if BAR.TO is less risky though…

J
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J

I was curious about what you believe in the difference of (DCA). Vs Opportunity cost. I understand the premise that timing a bottom, or a top for that matter, is basically an impossible feat but at what point is the DCA on a downward trajectory, unless you believe sooner then later a possible reversal is in the cards, is costing you in opportunity even if its still yet a cheaper entry point in the coming months.
I do remember a previous entry about catching a deal at any point, as long as the hypothesis is correct, that in the end it’s a win. (Paraphrasing).
So to summarize my ramblings, if we believe in further short term pain, and still believe in the long term commoditie cyles and eventual reversal at what point is DCA taken into account with opportunity cost.
As always, I appreciate your post.

Thank you.

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