In the portfolios I do not actively manage (family/friends) I include a core of “low maintenance” picks. These are companies with high insider ownership, good growth profile and pipeline of projects, good to great jurisdictions, solid backers and cash position, and also competent management. The idea is that these companies have a lot of value to be unlocked in the future and _should_ enable a “hands off”, which basically means that one doesn’t need to check up on them all the time for some company making/breaking catalyst. 

In short: The fundamental trend is up and they probably (hopefully) got all the required ingredients to make it happen.

 

Companies that I consider to fit the bill:

 

Kirkland Lake Gold 

  • High margin producer in tier one jurisdictions.
  • Good growth profile and largest shareholder in Novo Resources.
  • Competent/experienced management.
  • Solid backers and high insider ownership.

Equinox Gold 

  • Strong backing by and priority vehicle of Ross Beaty.
  • Decent margin producer with growth prospects and I wouldn’t be surprised to see even more deals in the future.
  • Competent/experienced management.
  • Acceptable jurisdictions.

Premier Gold Mines

  • Competent (long term) management with a lot of skin in the game.
  • Superb growth profile and tonnes of projects in the pipeline.
  • Multiple JVs and thus diversified risk.
  • Tier one jurisdictions and tier one JV partners (Barrick Gold etc).

 

Liberty Gold

  • Competent management with a long history of success.
  • Backers and management with a lot of skin in the game.
  • Multiple core assets in tier one jurisdictions.
  • Solid peripheral (shelved) assets in Turkey (higher risk jurisdiction).
  • Cashed up and great access to capital.
  • Huge pipeline of projects and IMHO very cheap based on “sum of its parts”.
    • Spin outs collective value would be higher than the current Enterprise Value.

Novo Resources

  • Competent management with skin in the game.
  • Tier one backers.
  • Two projects with near term cash flow potential.
  • Unparalleled growth potential.
  • Cashed up and great access to capital.

 

Runner ups

– Not core since they need a bit more frequent check ups, but fundamental trend ought to be up.

Orca Gold

  • World class management (with skin in the game) and backers.
  • Two advanced projects in two african jurisdictions.
  • One way or another, the Orca team will create a success IMHO.

White Gold Corp

  • Competent management with skin in the game.
  • Cashed up with tier one backers.
  • Excellent growth profile in a tier one jurisdiction.

Pure Gold Mining

  • Competent management with skin in the game.
  • Tier one backers.
  • Advanced low CAPEX project in tier one jurisdiction.
  • More limited growth profile relative to the rest, but makes it up with having the most advanced project.

 

Best regards,

The Hedgeless Horseman

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