Closed Out Positions In 4 Companies

Closed Out Positions In 4 Companies

Early last week, I decided to tidy up my portfolio a little.  To that end, I have taken the last few trading days to close out positions in 4 companies: Cipher Resources, Aston Bay Holdings, Africa Oil, and Goldspot Discoveries.

I like the concept at Cipher Resources (TSXV – CIFR) but since the new year, I’ve grown frustrated with the lack of leadership and direction at the company.  They have two large shareholders in Endeavour and Terra but I don’t think they’re any closer to a streaming/royalty deal today than they were 6 months ago.   Other companies have been announcing new streaming/royalty deals nearly weekly.  I’m a big fan of Jim Mustard and he’s always available to get on a call.  But Jim is only a director.  On the other hand, CEO Elena Tanzola, is very hard to reach or communicate with.  You leave messages, no call-back.  You make an appointment for a meeting, Elena is 1 hour late (after having to phone her and remind her of the meeting), etc.  Very frustrating.  That, along with a lack of activity for a very long time, has led me to move on from Cipher and look to re-allocate my money to better opportunities.  I will note that I still own Cipher personally but because of its lack of liquidity, I may be stuck with my personal holdings a little longer than I want to.

Unlike Cipher, I am not at all frustrated with Aston Bay Holdings (TSXV – BAY).  I like Tom Ullrich and the geological team.  And I like Aston Bay’s properties.  I took a position in early January since the stock looked like it was firming up after tax-loss selling.  But it hasn’t really moved up like I thought it might and it has seen a lot of selling since.  With only about $400K in cash left in the till, I think it’s inevitable that Aston Bay will need to do a financing and as such, there’s no driver to help with buying at the moment.  Those who like Aston Bay are probably waiting for a financing so they can get a warrant.  I am one of those people.  If Aston Bay announces a nicely priced financing, I may indeed participate and get back in.  My selling of Aston Bay is only to free up cash for some of the other opportunities I’m looking at.

I bought Africa Oil (TSXV – AOI) in large part because of the exploration punt on the Brulpadda-1AX well in the Outeniqua Basin, offshore South Africa.  And the well hit.  Africa Oil moved up a little in anticipation of the well but it slid back down just as quickly after announcing the well’s success.  Since the main driver behind my ownership in Africa Oil has been proved out, I don’t see the same compelling reason to continue owning the stock, especially when I consider some of the other opportunities that have come across my desk.

I really like Goldspot Discoveries (TSXV – SPOT) and their machine learning approach to exploration.  I also like their model of taking positions in many of the companies they provide services too – including royalties.  The team is great and I will look to find an opportunity to get back in.  But there has been a flurry of discounted financings with nice warrant packages come to my attention and I think my money would be better served taking a punt in some of them.

Speculating in junior mining stocks is a tough business.  You have some winners and you have some losers.  Sometimes, it’s time to move on.  No point spending too much time looking in the rearview mirror since success in this game is more attainable when you’re looking forward to the next opportunities.

Philip O'Neill
Philip O'Neill
poneill@mp1capital.com