Portfolio Update: Reshuffling the Deck (December 17, 2016)

The markets hate gold and silver… So, it should come to no surprise to readers that I am paying close attention yet again! Sorry lithium, graphite, cobalt, copper, lead, zinc, etc., but you are getting far more love than the precious metals these days, so until the trend changes, I’m most likely going to remain a “one trick pony” for the foreseeable future…

Here’s an update of all my latest wheelings and dealings…

  • Sold 500 shares of First Majestic Silver (AG) @ $9.45/share
  • Sold 1,000 shares of Klondex Mines (KLDX) @ $5.20/share
  • Bought 8,500 shares of Orca Gold (CANWF)@ $0.24/share (~C$0.32/share)
  • Bought 58,143 shares of Aton Resources (ANLBF) @ $0.049/share (~C$0.065/share)
  • Sold 30,000 shares of Altura Mining (AJM.AX) @ A$0.145/share
  • Bought 31,387 shares of Black Rock Mining (BKT.AX) @ A$0.135/share
  • Bought 10,000 shares of GoldQuest Mining (GDQMF) @ $0.20/share (~C$0.267/share)

 

First off, I trimmed some shares of First Majestic Silver (AG) to reduce my cost basis down to $6.204/share, which right now I’m quite grateful for given the NASTY market environment many of these precious metals mining stocks currently find themselves operating in. Ditto for Klondex Mines (KLDX), which I also sold a partial position, cutting down my cost basis to $1.29/share.

When it comes to these mining stocks, one thing that I’ve learned along the way is that you seriously have to book profits, from time to time… Volatility in this space is just off the charts, and what goes up typically comes crashing back down again, sooner or later… No, I’m not trying to “time the markets” with pinpoint precision and accuracy (an impossible task!), but I see absolutely nothing wrong with making an effort towards taking some chips off the tables, whenever that chance arises… Perhaps it has more to do with investor psychology than anything else, but when you have less “skin in the game” and you’re seeing a bit more green in your portfolio, let’s be real, it just makes grinding out the tough time a tad bit less difficult…

Just sharing my own experience, although your own strategies and thoughts may vary, obviously…

Next up, I used the proceeds from those sales above to add to my position in some earlier stage junior companies, Orca Gold (ORG.V/CANWF) and Aton Resources (AAN.V/ANLBF). I have shared my thoughts on Orca before in the past, but with Aton, I still owe readers a write-up so that you can get the inside scoop as to why I elected to purchase up shares at this time… Moving forward, I would like another opportunity to add another tranche of Orca, but with Aton Resources, I’ll probably hold off buying any more shares until at least the initial resource is released for their Hamama West gold deposit…

Moving along, I finally got around to closing out most of my position in Altura Mining (AJM.AX/ALTAF). I took a loss of -A$3,150.08 (-$2,215.78). In hindsight, Altura was a stock that I definitely did chase up during the lithium boom experienced this past spring/summer (doh!)… As a whole, I still like Altura, and strongly do believe that the company will do well once their Pilgangoora deposit gets put into production… But from a risk vs. reward perspective, I just feel like I can do a lot better right now… The current market cap of Altura is ~A$160 million, and we are talking about a relatively low grade spodumene project here… Obviously, I am a much bigger fan of a company like Birimian Limited (BGS.AX/EEYMF), which is currently the largest holding in my portfolio… and one example of a lithium company that I feel offers much more upside potential than Altura. I’m also not really a fan of holding too many stocks (overall), and my position in Altura was so minuscule, anyway, that I decided to exit out at this time so that I could take advantage of tax-loss selling.

The Altura funds were used to increase my stake in Black Rock Mining (BKT.AX), probably my favorite graphite stock at the moment… As it pertains to Black Rock, we are talking about ultra-high purity natural flake graphite, a very modest market cap of ~A$40 million, and a number of catalysts coming up (e.g. Pre-Fesability Study, binding offtake agreements) that could potentially lead to a rather drastic share price re-rating. If/when the graphite sector comes back in favor, I do believe that Black Rock will be leading the pack (of course this is all assuming there are no surprises in store with the PFS report and binding offtake agreements do get executed sooner rather than later)…

Lastly, I closed out my activities by adding more shares of GoldQuest Mining (GQC.V/GDQMF). The company’s Romero project is pretty mature at this point, so anytime I can add shares of a promising development stage story at ~C$50 million market cap, I’m more than happy to do so. GoldQuest operates out in the Dominican Republic, which is a reasonably good mining jurisdiction, and the management team in place has a track record of success with taking a development stage project all the way through to the finish line (sale to a major producer). Let’s hope lightning can strike once again!

Here is where the portfolio stands today, December 17, 2016.

Given the recent smackdown in gold and silver, here are the stocks that I’m watching most closely right now:

As we speak, I’m most interested in adding more shares of: Orca Gold, GoldQuest Mining, and Teranga Gold (TGZ.TO/TGZ.AX/TGCDF). To a lesser degree, I’m keeping tabs on Avino Silver and Gold Mines (ASM), as anytime I can get into shares of a company at a price significantly below the last private placement offering ($1.57/share), it really don’t get much better than that! The same could be said for Teranga Gold (C$1.05/share), actually… But at this point in time, I really don’t know enough about Avino to initiate a position just yet… I’ve got to do a lot more research…

Anyway, I’ve got way too many companies on my radar than spare capital available… I can’t buy up everything I have my eyes on, but if I had to choose right now, again, I’d go with: Orca Gold, GoldQuest Mining, and Teranga Gold.

 

What about you?

 

Happy Hunting!

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Mining Stocks – Rules of the GameJoshSrinikiwisparkyAlexander Gregory Recent comment authors
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Roadmap2Retire
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Thanks for sharing, Jay. Looks like some good moves there….I havent sold my stocks yet, but just before this PM bloodbath managed to sell some covered calls, which Im sure will not get called away come execution date. The companies I hold are solid and will come out on the other side of this just fine. Now I have to decide if I want to add more or look for something else in the space. Your picks on Orca and Aton look very intriguing…hopefully I will get around to researching them this weekend.

cheers
R2R

Burnside
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Burnside

Jay,
In light of your interest in Goldquest, you should take a look at Unigold. It, too, is in the Dominican Republic and is chasing very similar mineralization. Essentially, it’s Goldquest a few years ago, and they recently had some pretty good drill results. Thanks for your insights! I’m an avid reader of this site and your posts on CEO.CA. Like last December, your posts help steel the nerves to run against the tide.

Alexander Gregory
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Alexander Gregory

AG looks great again as well with that drop after the rate hike put it in my buy price again

kiwisparky
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kiwisparky

Whats your thoughts on Volt and its PFS this week as well as the share price tank after its release?

Josh
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Josh

I know you’re not a tax lawyer, but was wondering if you could chime in on a tax harvest idea I just randomly thought up (could be missing something obvious, I rarely do anything beyond long term buy & hold with a few losses sold in late Dec along the way for loss harvesting if I have lost faith in the underlying company’s ability to quickly rebound). As someone who has a bit of new (positions taken in the summer) losing exposure to a couple gold miners, how foolish would it be to sell those stocks to offset gains in… Read more »

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