Last week I notified my subscribers about my two new Maven buys and while the details of the two certainly differ, they share a fundamental concept: both companies are strong and splashy.
That’s a phrase that I came up with early this year to describe the kind of projects I really like at this juncture in the market. (I don’t love the phrase but haven’t been able to come up with something better!)
Strong describes assets with clear value, via a defined resource that is advancing towards development. Ideally I like projects that are still fairly early in that development process, such as prepping the first Preliminary Economic Assessment (PEA), because an initial PEA can really demonstrate a project’s value to the market. In addition, once a project has a PEA in hand it adds a slew of investors to its potential buyers list – many funds will not invest in an asset until it has demonstrates positive initial economics – and that new interest can create new share price momentum.
Splashy describes the potential for new excitement. It could come from a new discovery at a nearby target, a strategic investor, a big step out drill hole that demonstrates significant expansion potential, an asset sale, any piece of news that impacts or underlines valuation.
In the early stages of a new gold market, speculative gold investors don’t need to take on all kinds of risk. Instead, they can buy proven gold resources on the cheap and enjoy the ride as those assets rise in value.
Doing that alone is playing what’s called Optionality. Ounces in the ground that are not economic or interesting in a weak gold market become economic, interesting, and valuable in a good gold market.
Strong companies offer exactly that optionality, but I like to demand another layer. Sure, in a rising gold market one doesn’t need to bet on excitement…but if you can add excitement from exploration or M&A or a strong new investor to a story that already makes sense, so much the better!
The two companies I wanted to include in my Maven Letter offer both strength, in terms of large, defined gold deposits, and the potential for splash, through exploration or corporate interest.
And I wanted to add them both to the portfolio because the Maven portfolio doesn’t have enough of these strong, splashy projects. We have great explorers, solid developers, and a few great operators, but only Integra Resources, Regulus, Tinka, and Nighthawk really fit the strong & splashy category. I’m greedy: I want more.
So, what two companies were added to the Maven portfolio?!
The first company is an ideal optionality play. The company has two key projects, both are in the states and both host significant gold resources already, totaling 4 million oz. Both deposits sit at surface and are oxide, meaning they would be open pit, heap leach mines. And both have seen a huge amount of past work.
The second is a company with two large, high-grade gold-silver resources in BC, both in projects able to generate splashy high-grade exploration results. This company has changed 6 a lot in the last few years and, in my opinion, the market is just figuring out that now the team really has its ducks in a row.
In her letter, Resource Maven explains what she is buying and selling, and why. Maven has bought into several of the markets best - performing stocks well ahead of the curve. She regularly identifies exciting new exploration opportunities and manages the inherent risk by selling some into speculative gains. And the mine builder and operator stocks that form the basis of the portfolio give strong, ongoing leverage to the rising prices of gold and silver. She has your precious metal bases covered.
This note is to thank you SO MUCH for all great work that you do. I know I pay for my subscription but honestly feel you give incredible value!
In particular I’m very happy with your recommendation on Troilus which I wouldn’t have known about had you not recommended purchase.
Thank you for the update. I am actually quite glad that you are flexible with your letters to enable you to get your readers the best information. And, I appreciate your offer to join the premium newsletter. I hope to continue to build my portfolio, with the help of your newsletter, to the point where I am able to take advantage of your offer and join the pp world in the not too distant future. I have really enjoyed your newsletter, read it with interest and have aligned my commodity portfolio with your recommendations, which has worked out very well. You are clearly a very trustworthy person, which is not always commone in the world of commodity investing. Thank yo for doing what you do so the small retail investor/speculator like me can have a better chance at success.