World of Mining, one month later …

by James Kwantes

Armed with a laptop, a passion for investing and the desire to identify value in the junior mining sector, I started this blog a month and four days ago. Investors from around the world have stopped by – from Canada and the U.S. to Mexico, Germany, Thailand, Australia and points in between. And it’s been an eventful month, both for the markets and for the stocks I’ve written about.

On Aug. 20, the TSX Venture remained mired in “How low can it go?” mode. But Venture stocks got a jolt – along with the price of gold – on Sept. 13 when Big Ben plugged in the U.S. Federal Reserve printing presses and began to fire them up in hopes of papering over the cracks in the American economy. The Venture is up 9 per cent since Aug. 20 and gold has jumped 10 per cent. The stocks I’ve featured have outperformed both.

Below is the performance of featured stocks compared to the benchmark TSX Venture, as well as some significant updates. All data is based on opening prices today and opening prices the day I posted each respective blog.

Sandstorm Gold (SSL)
Aug. 20, up 23% (Venture up 9%)
It’s been a big month for this gold streaming company, which listed on the NYSE on Aug. 20. Days later, Sandstorm announced a bought-deal financing that grew to $150 million by the time it was completed on Sept. 7 – providing plenty of dry powder for acquisitions, as I outlined here. On Sept. 19, Sandstorm made a foray into platinum, acquiring 1.5% of the gold and 35% of the platinum produced by Colossus Minerals’ Serra Pelada mine in Brazil for $60 million up-front and $400/oz of gold and $200/oz of platinum. The price of platinum has been on a tear in the past month-and-a-half due to mining-related violence and unrest in South Africa, where most platinum is mined. The spot price has risen from $1,400/oz to more than $1,600/oz. since mid-August, giving Sandstorm a sweet margin of $1,400 for each ounce of platinum it purchases.

Sandstorm Metals and Energy (SND)
Aug. 20, up 21% (Venture up 9%)
Part of the Sept. 19 deal was an agreement through Sandstorm Gold allowing SND – in exchange for upfront financing of $15 million – to purchase palladium from Colossus Minerals at $100 an ounce. The palladium spot price is currently $645/oz.

Lumina Copper (LCC)
Sept. 10, up 24% (Venture up 5%)
Since I wrote about Lumina Copper as an undervalued takeover target, the company posted this corporate presentation on its website. It outlines all the factors that make Lumina and its Taca Taca deposit in Salta, Argentina attractive to a copper producer, including excellent infrastructure and high grades, as well as gold. Also included are per-pound comparables to other advanced-stage copper projects, which confirm that Lumina looks undervalued. Management’s stated goal had been to sell to a major in 2012, but with geopolitical grief in Argentina and the junior market in the tank for most of the year, I think LCC shareholders had assumed that would be pushed back. So what investors probably liked the most about the corporate presentation was this stated goal: “Sell to a copper producer in 2012.”

Newstrike Capital (NES)
Sept. 20, up 14% (Venture flat)

Thank you, readers, for putting World of Mining on the map during its birth and early days. Sign up for the insider’s list and keep checking back for more interesting, informative content and promising investment ideas.

Disclosure: Please read my disclaimer. I own shares in Sandstorm Gold, Sandstorm Metals and Energy, Lumina Copper and Newstrike Capital.

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