This past week I attended the John Tumazos Very Independent Research Conference at the Jersey Shore. JTVIR followed the 121 Conference a few weeks back. The end result is the culmination of a very busy month of conferences, networking and meetings. I will add, too, that we added a new member to the family. A very busy month indeed and another future mining investor 😁.
The timing of these gatherings could not have been any better with Gold’s 🥇 performance of late. Breaking out of multi-year resistance will certainly lift the animal spirits in a sector that has been decimated for so long. If this Gold breakout is the real deal, it may be time for me to consider allocating some funds to those miners that are a bit further away in the risk spectrum. Let’s hope this can last more than a few weeks, huh? To that end, is it too early to proclaim: “welcome to the new gold bull market”?
Minera Alamos (I bought some Monday and Tuesday). Met with the Company at JTVIR. My initial impression is that I like the management team. They’ve done this before. It’s an achievable plan. It also sports an intriguing valuation provided they can execute. Two properties currently in permitting stage (permits shall come soon) offering near term production and once approved should be producing 100k by 2021. Both properties have low capital intensity, which I like, and so the idea here is to bring them on in a staged approach and fund the second with cash flows from the first. Financing will be an integral part of the process but believe they could do so with limited further dilution. The warrant overhang will all be gone by July, majority were worked off in May and June. At $1400 Gold, margins would look nice on paper assuming all is built to plan and can execute. But even at $1250 they would do fine. With longer term aspirations of being a 150k producer, that sort of profile sells for quite a bit more than today’s market is paying even after allowing for some equity raise. Let’s see how this starter position goes.
Corvus Gold. Maybe it’s a little too obvious but this company is being put together to be sold. AngloGold would be the prime suspect. They own 19.9%. Current management team has a significant AngloGold component to it and AngolGold has a neighboring property they would be keen to consolidate the district. AngloGold I am sure would also like to continue diversifying particularly in North America. Hard to build a thesis around something like this, but let’s see what happens. On the watch list.
Marathon Gold. Liked it at $1250 Gold and like it even more at higher gold prices especially after the Atlantic Gold sale. Exploration work is ongoing as they look to increase the resource base well north of 4m ounces.
NightHawk Gold is an early stage explorer that has had a steady stream of insider buying of late. They recently did a fund raise that was over-subscribed in a very tough market (Yes May was tough and still is for some). They have also been putting out some decent exploration results. Nighthawk is well funded through next year helping mitigate any near term equity dilution while at the same time funding a record exploration program. The property has been largely under-explored and offers district scale potential but is in a remote area that has had prior mining in the past. Like the team. Early days. We shall see.
TMAC Resources. They have had start up issues and it has been very frustrating. But if they can get it right, a big if in this part of the world, it has good potential. I would be inclined to wait until after Q2 production results though since they haven’t had two consecutive quarters of successful production metrics without a setback. This would help build on the thesis that they may have just turned the corner. Watching patiently for these signs and staying close to the story. Higher gold helps, too, as it helps all. Aside from the operational risks, another draw back is the illiquidity of the stock. Very thinly traded not a big trading float. I am sure their top 2 shareholders (Newmont being one of them) would love more liquidity. Remains on watch list for now and not for the faint of heart.
That’s it for now.