Newstrike Capital update: Lukas Lundin adds to his position

Not a bull, but bullish nevertheless …

by James Kwantes

The filing is in and the buyer of 2 million shares at $1.80 is Lukas Lundin – more specifically, the Lundin family holding company Zebra Holdings and Investments S.a.r.l.

The purchase was filed on Dec. 27 as a “prospectus exempt buy,” which suggests a private placement – except Newstrike is already well-financed and has not issued a news release.

Perhaps the end-game is near, and Lundin simply wanted to average down on his favourite gold junior – after all, Lundin’s Lorito Holdings purchased 800,000 NES shares at $3.11 back in March.

According to INK Research data (subscription required), Lundin now owns – indirectly, through the family trusts – 16,454,800 shares, or about 14.3% of S.O. That doesn’t include whatever his personal stake in the company is – he dipped below the 10% reporting threshold in June 2011 when he sold 300,000 at $2.35.

Like many juniors – even the cream of the crop – Newstrike’s stock has been hammered this year. I wrote up the company on Sept. 20, with an update here. Shares closed today at $1.85, down 4.6%, and the stock has a 52-week range of $1.29 to $3.32.

The biggest near-term catalyst is a maiden 43-101 resource estimate on Ana Paula in the Guerrero Gold Belt that was originally supposed to land this year but will likely be filed in early 2013. Newstrike’s valuation is considerably below that of Torex Gold, which is more advanced but in the same neighbourhood (as is Goldcorp’s Los Filos mine). I expect that gap to decrease when the 43-101 is filed.

High-grade, near-surface gold deposits with good infrastructure in favourable mining jurisdictions are hard to find. Newstrike has one, and the Newstrike team has done a stellar job of building the resource. It’s exactly the type of turn-key deposit coveted by gold producers, who are more focused on the bottom line than ever before.

For more quality info on Newstrike Capital, head over to Caliche Bahada’s investment blog.

Disclosure: I own shares of Newstrike Capital. This is not investment advice, do your own due diligence, etc. Please read my disclaimer.

This entry was posted in Energy, Exploration, Ideas, Mining, Stories, Uncategorized and tagged , , , , . Bookmark the permalink.