Portfolio Update: Adding to My Best Ideas (February 02, 2016)

Off the heels of a very exciting news release (grab samples) from Aurion Resources (AU.V) that caused the stock to rise over 86% in a single trading session, I did the only thing that I possibly could do…

I didn’t chase up…

Not always easy, and although I was a little frustrated for not following up on some tips from other (better) investors, telling me to get into the stock last year, I’m trying to improve my discipline in how I play these mining stocks…

For whatever reason, my track record is infinitely better when I’m chasing stories all the way down into oblivion, as opposed to trying to ride a wave up in hopes of catching an even bigger one…

So, congrats to all the shareholders in AU.V who made a boatload of money, but as I like to believe with investing, “There’s always another train arriving at the station.

Although I will confess, that seeing such positive market reaction to Aurion’s good news did inspire me to go hunting for some potential other deals in the gold sector… As a matter of fact, the rip in AU.V made me think back to just a few weeks ago when one of my core holdings, GoldQuest (GQC.V/GDQMF), surged after announcing to the market an awesome drill hole that could be the makings of another major discovery…

From GoldQuest.

And from that news release…

The Cachimbo discovery is confirmed as VMS mineralization. VMS orebodies host some of the largest and richest mines in the world including Kidd Creek in Canada and Rio Tinto in Spain.

The high level of precious metals intersected in Cachimbo are particularly encouraging. The discovery hole is collared 80 metres from at-surface sampling that returned 167 g/t (5.4 oz/t) of gold. The new mineralization is open in both directions along strike.

Importantly, the Cachimbo discovery hole displays a 60 metre mineralized package from 51 metres depth to 111 metres depth with multiple significant horizons. The upper horizon returned 4.6 metres grading 4.5 g/t gold and 73 g/t silver with minor base metals from 56.4 metres depth and the main VMS horizon was discovered below with a 4.9 metre interval grading 13.8 g/t gold 74 g/t silver, 11.8 % zinc and 1.1% copper and 0.7% lead within a wider horizon of 15 metres grading 5.3 g/t gold, 31 g/t silver 4.2 % zinc and 0.4% copper and 0.3% lead from 70 metre depth.

The ongoing drilling program is on hole 14 in this campaign targeting a separate zone approximately 8 kilometres to the north of hole TIR-16-09. Further drilling at Cachimbo is anticipated to take place systematically once the Company has tested the remaining 17 exploration targets along the belt.

Areas where drilling identifies significant mineralization, such as Cachimbo, or high potential for mineralization will be considered for follow up drilling.

 

Still early days for the new GoldQuest discovery (which may or may not ultimately amount to anything significant), but the market seemed to show initial excitement for this news as well (not quite to the tune of Aurion Resources), as shares of GQC.V are already up over 40% YTD.

Regardless of the recent sharp price movement (which has been mostly muted the last week or so), I decided to add 20,000 shares of GDQMF @ $0.2944/share (~C$0.383/share). I now own 140,000 shares of GoldQuest (GQC.V + GDQMF).

The two companies are trading at similar market caps now (~$72 million for AU.V and ~$82 million for GQC.V), but from a risk vs. reward perspective, at this stage of the game, I gotta say that I like GoldQuest a lot more than Aurion Resources…

No, I’m not saying that Aurion Resources’ market cap and valuation aren’t (won’t be) justified, and who knows, perhaps they are onto a MASSIVE discovery that will unlock billions of dollars for shareholders down the line… But as of this particular moment in time, I favor GoldQuest more because they’ve also got some exploration discovery potential in addition to the company still being predominately an advanced-stage developer…

Yup, so although I wanted to load up on some more shares of GoldQuest for some discovery upside potential, it’s very reassuring to know that the company already has a proven gold project (Romero) that is entering the Definitive Feasibility Study (DFS) stage of its development timeline…

The Pre-Feasibility Study (PFS) shows that Romero should be a robust and economical gold project.

From GoldQuest.

That’s a good fall back plan to have in place, just in case the exploration stuff doesn’t pan out (no guarantees, of course)…

So, investors/speculators are getting a combination of exploration (Cachimbo and other drill prospects) and development (Romero)… And in a rising gold price environment, I think that represents a ton of upside potential… Who knows, the company might even get taken out by a mid-tier/major producer for a market premium at some point during this bull cycle…

Yup, that’s why I’m a buyer at this time…

Even with the recent rise in share price, I still don’t think GoldQuest’s market valuation is out of hand… Below ~C$100 million market cap/enterprise value, I’d be a buyer…

 

And today, I was…

 

Thanks to Aurion Resources, the buzz and market excitement towards early-stage gold exploration plays just might be starting to heat up again… I’ll try not to chase these stocks up (need to learn from my mistakes), but I’d also like to be well situated in some of the better projects/companies before the crowds really rush in again… which I hope will happen sometime later this year.

 

Go gold… and GoldQuest! 🙂

 

Fight On!

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Portfolio Update: Reshuffling the Deck (February 06, 2017)AlexanderFI FighteralexJan Recent comment authors
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Jan

Thanks FI Fighter for your very interesting posts – so different from all the other blogs!

alex
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alex

It seems like our UUUU Uranium invest isn’t doing to bad with camecos recent pulllbacj it seems to be bringing down the entire sector if you like hated assets you think it’s another good time to grab some more companies and shares ?

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[…] Coupled with the previous transaction, I’ve now made three new purchases into GoldQuest this month… GoldQuest has now become a Top 3 holding of mine, and it represents one of the best ideas that I have in the junior gold space… […]

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