Portfolio Update: Last Two Weeks Action
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.
Thanks for the Superior Gold tip mate! Appreciate all your hard work. Cheers, Vincent
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.