New additions:

 

Superior Gold Inc (SGI)

  • Newly formed company led by Chris Bradbrook
    • Ex CEO of New Gold and founder of Crocodile Gold
  • Latest video presentation can be found HERE.
  • Total land package: 644 Km2 in Western Australia (tier 1 jurisdiction)
  • Flagship asset: The Plutonic Mine, acquired from Northern Star  last year.
    • Located in Australia
    • Over 5Moz of past production
    • Currently producing 80Toz (capacity for 150-200Toz already in place)
    • Aiming for 100Toz/year of production starting next year
    • CEO Expecting 30M of free cash flow next year.
    • ~2Moz Au (Reserves, M&I, inferred)
    • Recent exploration highlights:
      • 2.2m @ 64.0gpt
      • 3.8m @ 25.3gpt
      • 1.5m @ 41.5gpt
      • 4.6m @ 19.7gpt
  • Noteworthy shareholders :
    • 19.2% Northern Star
    • 13.5% Sentry Investments
    • 8.7% Board and management
    • 8.7% Sprott
  • Fully diluted market cap: US$89 M
  • Cash and eqv.: ~US$30 M
  • Enterprise Value: ~US$59 M
  • Catalysts: Production ramp up (80Toz -> 100Toz, 100Toz -> 165Toz?), reserve expansion, maintaining performance and exploration success.
  • Comment: EV of US$59 M for a soon (hopefully) to be 100Toz/year producer with expected FCF of $30 M next year. Cheap based on EV/Resource, EV/Production and especially EV/forecasted FCF. High risk / high reward play. If they are successful in extending the mine life by turning resources into reserves on top of reigning in costs, this could very well be a multi bagger. High beta play with company specific execution risks. Pretty unknown and underfollowed company IMHO (Which I like).
  • NPV example:
    • 80Toz year 1, 100Toz year 2-8
    • 0.88Moz total production over 8 years
    • Gold price: $1300 (over all years)
    • AISC: US$1050 (Higher than quarter avg since takeover)
    • Discount rate: 7% (Bear in mind that most south american and african developers use 5%)
    • Accumulated free cash flow: US$165 M
    • NPV of free cash flow (7% Disc. Rate): US$135 M (vs. company EV of US$59 M)

 

Northern Empire Resources (NM)

Investment thesis can be read HERE.

 

Increased stakes in:

 

AbraPlata Resources Corp (ABRA)

    • Fully diluted market cap: US$15 M
    • Flagship project: Diablillos (Silver/Gold)
      • Resources:  ~2Moz AuEQ or ~155Moz AgEQ
      • Price/AgEQ Resource: 0.09 (way lower than any other name I follow)
    • Multiple Cu-Au-(Mo) porphery exploration properties/targets: Cerro Viejo, Cerro Amarillo, Samenta
    • Catalysts:
      • Exploration success (currently drilling)
      • PEA expected this fall
    • Noteworthy shareholders:
      • 19.9% SSR Mining
      • 12.3% Management
    • Comment: High risk / high reward optionality play. I am holding this for $25+ silver as with basically every other silver developer. Exploration success in any of their other high impact porphery targets could change the story in a heart beat.

 

Impact Silver Corp (IPT)

  • Fully diluted market cap: US$25 M
  • Cash: ~US$5.5 M (Q2)
  • Enterprise value: ~US$19.5 M
  • AgEQ production: 0.95Moz
  • EV/AgEQ production: 20.5 (Compare with other producers HERE)
  • Comment: Turbo charged silver beta with exploration and production upside down the road. High risk / high reward play.

 

Otis Gold Corp (OOO)

  • Fully diluted market cap: US$42 M
  • Comment: Expecting a lot from this company before years end. Insiders have been loading up all year.

Osprey Gold Development Ltd (OS)

  • Fully diluted market cap: US$5 M
  • Comment: One of the best R/R plays I know ATM. If this story even gets a whiff of success, I can easily see it outperform my other holdings. HIGH RISK. Currently waiting for drill assays.

 

Final note: Also added som shares in Novo Resources at CAD$5.80 today.

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2 thoughts on “Portfolio Update: Last Two Weeks Action

  1. Vin says:

    Thanks for the Superior Gold tip mate! Appreciate all your hard work. Cheers, Vincent

  2. Brent says:

    I’m curious what your take is on the latest FF.TO PEA on their Springpole mine.
    They reported a 12 year mine life producing 322K gold oz equivalent at $619 per oz.
    First Finance languishes below .70 CAD despite a 19 million oz portfolio?

    Today TXR, PGM and BGM also reported good results with almost no effect too?
    What’s happening in the mining markets?

    Brent.

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