Strong & Splashy
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.
If you want to find out who these two exciting companies are, sign up for a free trial. Or if you've already used up your free trial, subscribe here!
have been investing in the precious metals space for about 20 years so I am more comfortable using your geological knowledge as a guide for my portfolio but when it comes to uranium that is an entirely new field where I am not as familiar with grades, jurisdiction value, etc. so I prefer some stability with the effort to play the market. Your reply offered just that!
Thanks for all your hard work, but especially your honesty and integrity. I can feel your desire to take of us through your writing. As you have recently written, that is not always the case in this sector….I’m sure your new subscribers have no idea what they are in store for. I have almost doubled my portfolio since the lows in March. I would have done even better if I could have exited my positions when you recommended them, but I was overseas and unable to act. I was okay with it as I knew from experience it would bounce back. and boy has it AND ITS JUST STARTING!... After many years in the red, all but of a couple of stocks are in the green. The daily rise in my portfolio is unbelievable. And a lot of that is happening is because I trusted you. I’m afraid I’m going to need the benefits of your hard work and wisdom to once again help my family and because of all your hard work I’ll be able to if they need it. I can’t thank you enough for the sacrifices you make to make what you do possible. If your religious at all, you really are doing God’s work. You are making a difference in many peoples lives.
Blessings upon you and your family.