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Monthly rollup | January 2024

Stocks Mentioned: Alphamin (AFM.V), Endeavour Mining (EDV.TO), Gold Fields (GFI), Sibanye-Stillwater (SBSW), B&G Foods (BGS), Seatrium Ltd (S51.SI)

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January 04 2024

I dislike niche metals because the market doesn't value them except during brief spikes, but this is a good intro to the tin market. I have Alphamin (AFM.V) on my watchlist but the stock is in consolidation mode.

Buy Endeavour Mining (EDV.TO)

Endeavour is a gold miner with strong support from the La Mancha group, an investment vehicle of an Egyptian billionaire family. The company did a great job today by ousting its CEO for cause - something Boards are very loath to do. The stock is down 7% on the news. I expect the company to rectify this situation, and this scare to be a buying opportunity rather than a sign of more troubles to come. I base my expectation on my long years of following this company during my 5 years as a gold mining analyst at The Dollar Vigilante. Endeavour was one of our portfolio companies for most of my tenure, and while I have had misgivings about their financials and valuation, I have seen no serious corporate governance issues. I could be wrong, so I will conduct my due diligence this week.

I rate it as a Buy, but you know the risks. If this is the tip of the iceberg, there's more pain to come. If this is one off, we get a great entry on a stock I've been eyeing.

January 05 2024

I've converted my Telegram page into a closed group. DM me if you'd like to invite people in.

I'm working on a soft launch of my subscription based newsletter this quarter. I will be sharing small cap ideas exclusively with paid subscribers, and over time move most of my content to subscriber-only. This decision has been in the works for the past month, ever since a friend (and former subscriber) took me aside and told me bluntly that I should be writing my own letter by now. When I was with The Dollar Vigilante, we scaled up heavily, especially since 2018 when I revamped the site, peaking out at 8k subscribers for the flagship newsletter and 5k subscribers for the crypto newsletter by the time I left. It was a great journey, but I ended up spending a lot of time on marketing and operations, which took time away from doing what I love - researching and writing up trade ideas.

With my current newsletter, my focus will be 100% on researching and writing up trade ideas. It's a labor of love, just that it adds another stream of cash flows to supplement my trading profits. As thanks for sticking with me and encouraging me to continue writing, current subscribers will get a discounted rate. More details to follow.

The first week of the new year is off to a fantastic start. Here's to a great 2024!

Endeavour Mining (EDV.LN) is down 13% in London as I write this. The company is now officially in play.

Pair the long position in EDV with a short position in Gold Fields (GFI, GFI.JO).

Last year, Gold Fields made an unsuccessful bid for Yamana Gold, valuing the company at $6.7 billion. Yamana produced 885,000 gold ounces at an all-in sustaining cost of $1030/oz in 2021.

Fact sheet - Yamana transaction
Download PDF • 1.09MB

In 2023, Endeavour Mining is expected to have produced 1.06-1.135 million gold ounces at an AISC of $895-$950/oz. The stock has a market cap of $4.56 billion and an enterprise value of ~$5.1 billion. Gold Fields is in a position to pounce, taking advantage of this sell-off to add a crown jewel to its African asset portfolio. At a much cheaper valuation than it would have paid for Yamana, with the gold price at ~$2040/oz today vs ~$1850/oz when the Yamana deal was announced.

This should be a no brainer for GFI, and likely several other gold majors too. We may see a bidding war between GFI and Barrick Gold, which I vote as the top 2 candidates in that order. So maybe you'd prefer to short Barrick instead. My gut tells me to go with GFI.

I'm now long EDV on both the TSX and LSE, and adding aggressively today while it is a screaming bargain. I'll short GFI once US opens, and/or Barrick Gold.

The recommended pair trade is equal weight long EDV/short GFI.

January 10 2024

January 11 2024

January 13 2024

January 16 2024

Sibanye-Stillwater (SBSW) is down 5% pre-market and is currently trading at $4.84 after trading up all the way to $5.82 since our entry. Palladium futures have given back most of their gains since the initial pop. Set a sell stop at $4.73. While not ideal, I don't want to give this trade any more room - I'd rather lock in the gains and move on.

Palladium futures

January 17 2024

January 18 2024

Sell B&G Foods (BGS).

We caught the pop in the share price but it is now drifting sideways. The stock hasn't rallied as much as I expected, especially given how other small caps have performed. Time to take profits.

Still waiting for Sibanye-Stillwater (SBSW) to hit my sell stop (note the limit order). There's no reason to panic. Just wait for the up day.

January 19 2024

January 23 2024

Sell Seatrium Ltd (S51.SI)

The company announced a S$400 million loan and the stock tanked right back below the 50 DMA. Shipbuilders aren't reflecting the strength in the shipping sector. Sell and move on.

January 24 2024

Endeavour Mining (EDV.TO, EDV.L, EDVMF) spiked higher today. Other miners in the FTSE are looking great as well. Time to peel off the GFI short and let this one ride. Takeover offer or not, I think we're past the lows in EDV.

SBSW moved up to $4.88 pre-market. Looks like we'll get an even better exit than expected.

January 25 2024

January 26 2024

January 29 2024

January 30 2024

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