Good afternoon
I have to say, that I do not like this incredible volatility in markets….when Tesla has intra-day swings in it´s valuation by 80-90 bill US$, something is wrong. I am frightened!
I do not want to rule out, that I am just subject to the famous wall of worry climb - but FOMO ( fear of missing out ) is ruling markets, and that is dangerous. By reducing what should be very profitable investments, you might miss the last 10% in markets - but eventually, you might be happy to have done so!!
This is general comment, not especially targeted at resources investments. These might be a little different…:
Not many people are overweight in resources - most have even very limited exposure
Inflation or rising interest rates, which are a fear for “normal markets”, might/should actually be good for resources
the current scenario for massive stimulus by central banks and governments in a concerted effort could/should trigger strong growth, once this virus is controlled - hopefully in a few month time
severe underinvestment from oil to copper to you name it over the last few years might pose a big problem in satisfying world demand
Nevertheless - the next Black Swan will definitely be something which comes unexpected, and you should be invested in a balanced and cautious way!!!
Bonds are weak again - equities are fighting…pretty volatile again today, but swings are not nearly as violent as yesterday!
Chalice - managed to get Stephen McIntosh for it´s board - very expereinced and highly regarded RIO man. This type of guy is not only bringing major project experience to the company, but also some validation of Chalice´management-and project quality! Very similar to the recent appointment at Liontown for their lithium project. Tim Goyder is doing all the right things….
KGL Resources - very old name for us…remember Kyrgysia, and their gold project? We lost a lot opf money there…well, they also had a second project, a copper project right in the middle of Australia - very remote. Anyway, the current management , backed with Indonesian family money, have done a good job over many years to slowly advance this project - final feasibiliyt study is in fulls wing to produce about 30.000t of copper p.a. from their asset called Jervois. This is not a worldclass resource, but at 4.20$/lb for copper, it´s certainly sexy! The company has done a placement at 42ct, and is also conducting a 1:13 rights ssue at 42ct to raise a total of 28 mill A$. Funds will finish off the stauy, give them a lot of room for exploration. I am not dead-keen here, but if I held stock, I would participate.
Lefroy Exploration - the stock exploded yesterday…60m with 5,22g gold and 0,38% copper caught the punters attention! The company , which as large JV with neighbouring Goldfields Ltd on some if it´s assets, has long been on the watchlist of some savy investors. We do not know as yet, whether this is a one-day wonder - but being a neighbour of some very aquisitive gold miners, any furtehr success would still drive them higher. In this market, a market cap of 60 mill is not that demanding - and the stock is very tightly held incl Goldfields as their largest investor! I had only a small position which now became a resonable position, and will probably keep the stock to see what happens here!
Carawine - another sleeper with some very positve exploration results from their North Tropicana Project near Kalgoorlie: 4m with 26g / 3m with 22g / 3m with 10g plus some more ersults. We are not talking about hundred thousands of ounces here yet - but some people point out similarities to the early days of Tropicana, which ended up as a major mine. Again - eraly days, but several irons in the fire with CWX, enough cash in the bank, and many assay reults still to receive. Again - I ahve s amll position but will keep it for further information!
Venturex - this one was the big sensation today! Bill Beamont, who is extremely highly regarded and is probably one of the top 2 gold mining executives in Australia ( the other one is Jake Klein, and they are followed by Raleigh Finlayson and probably Mark Clark ) , stepepd down from his position as executive chairman of Northern Star ( a 12 bill$ company and his baby from humble beginnings more than 10 years ago ), to take an executive job ( and no doubt, the big force in the company ) at what was a 30 mill A$ company a few days ago! Bill is taking a 9 mill$ placement at 8ct with free attached options to show his commitment! The stock closed up 24ct at 35ct - and an enterprise value of about 200 mill A$ fully diluted!!! Amazing… teh company has an interesting copper / zinc project in Western Australia, basically readily advanced to financing. This financing ( 200 millA$ ++ total cost ) had been seen as a major obstacle for this small company - but shoudl not be a problem to finish with Beamont running the show. And this will not be the end of it, I guess….
So what is a legend like B.B. worth? ?? Is he worth an immediate uplift to 270 mill A$ market cap??? Well time will show - but for Northern Star, he has certanly been worth a lot more than that over time! And I ahve learned over many years, that you either back great people or great projects - but the latter will be worth only half their value with the wrong management! Unfortunately, I do not own any VXR currently…that might change . I have not made up my mind as yet.
Northern Star - B-B. resigned as you read abnove…problem?? I guess not…Apparently, Bill has been a bit tired to run such a large company, with all it´s bureaucracy and compliance etc. Makes sense to me, and these rumours had been around for two years or so. Finishing the merger with saracen and taking over the Golden Mile made them not only the second largest gold miner in Australia and a formidable force worldwide, but also brought with it an excellent MD, Raleigh Finnlayson. Yes - this will be new task for him…but he should be up to it. So I do not see any negatives arising from the change at the top here! But it also does not change my view, that EVN and Jake are the No.1 !
Have a nice evening
WS