Greeting Stockpickers,
With summer slipping away and September upon us, it’s time for another look at how the world’s greatest mining stock picking Club (Hys and Lows) is faring. The following is an edited version of my monthly note to the club members, members’ names redacted.
First, a quick reminder of how our exclusive and much-envied club works. It’s not a formal membership-fee type of club, just a casual once-a-year gathering of 25 or so mining people at a steak restaurant in downtown Vancouver. We meet in late January to contemplate the state of the industry, drink good red wine and pick stocks.
It’s All About The Wine
The rules are simple. Everyone chooses 1 mining stock with the caveats that it can’t be a company you work for, and it can’t be halted or pre-IPO. At the dinner, whoever chose the stock that went up the most over the year is declared the winner. Everyone who attends has to bring a $100 bottle of wine except for the winner, who eats and drinks for free. The loser has to wear the toilet-seat-of-shame.
We run it like a fantasy hockey pool with the overall loser picking first for the coming year, but last place also gets to run the club for the next 12 months. We also track the overall performance of the portfolio of stock picks, naively believing a) that we’re somehow smarter than the average resource investor and b) that we represent an experienced and deeply knowledgeable group of mining insiders who should know what they’re doing. Stop sniggering at the back….
And So To Business.
August was almost exciting. Almost. Gold’s up another US$100 on the month, which normally means there will be / has been an economic catastrophe somewhere (all roads lead to Trump on this one.) The positive is that precious metal stocks have finally started to respond, led by the producers of course.
A case in point is First Majestic, a pick that was much derided at the dinner. How the worm has turned, eh? Show’s you what we know. FM has climbed ever higher and now sits in 5th place with a gain of 80%. This evokes a double “WTF?” moment for me. A mid-tier in 5th place is itself miraculous, but an 80% gain and still only in 5th place is something my failing, middle-aged brain can’t quite grasp after the last 2 years of share price slime. Remember that our 2018 winner took first place with an anemic 10% gain, and the portfolio was down a miserable 41%?
Our box score (up-level-down) this month is 14-1-12, almost identical to last month’s, but we’ve seen a solid gain of 16.5% year-to-date in the portfolio. Two months ago we were showing a 1% loss YTD, so a nice swing in what’s supposed to be the junior company quiet season. Anyone following the Sell-In-May-And-Go Away mantra in 2019 will be feeling a bit sore from the market rogering they’ve taken.
The portfolio is still sort of tracking the TSX Gold index; we’re up 5.8% over August compared to the gold index which is up 11%. But the TSX-V is unchanged for August, so we’ve finally beaten it. Fuck yeah. Small victories and all that.
Older, Wiser and Fatter
As I’ve grown older, wiser, and fatter I’ve learned to compensate for the shit that the higher powers throw at us, and I now really appreciate life’s constants. I luxuriate in the little things that you can still rely on when you wake up each morning. The sun rises, it sets again. Fall follows summer, and a good nut scratch is always worth while although I have to reach a bit lower with each passing year.
To this comforting list of truisms I can now add “Miramont is Tail-End Charley again this month” as the tumbleweed blows harder and faster through Miramont’s dry, dusty share register. Yes, they’re down again this month, and not even the gold price could save them. I’m tempted to just declare them the 2019 loser now and have done with that part of the proceedings. Can whoever’s got the toilet seat of shame please wipe the grease off, give it a buff up, and tie on a Wunderbaum?
In mid-July, Miramont announced their latest drill success which must have filled their investors’ hearts with unbridled joy: 88m at 0.1g/t Au starting at 331m down hole. That’s one deep pit. In a masterpiece news release that Captain Obvious would be proud of, they commented
“Given the fact that the two longest anomalous intercepts in hole CH-013 are near the bottom of the hole, Miramont believes the system may be strengthening at depth…(and) now believes the potential for a large volume of near-surface mineralization has greatly diminished but considers the potential for a large body of mineralization at depth still viable.”
Ah me… I’ve read that 6 times and it still makes me chuckle. I think their executive chairman, Doctor Quinton Hennigh (for it is he…), should sprinkle a few of his Ozzie melon seed nuggets in the core tray to spice things up a bit.
And The Leader Is…
And so to the top of the table. It’s official. Our industry has gone for a ball of dog shit. A company that trades once a week, and is named after a short-haired Hungarian dog, has taken top honours this month. Vizsla Resources Corp is er..leading the pack by a whisker, sniffing out a year-to-date gain of 127.6%.
This raises the horrible –nay, nauseating- possibility that the estemeed club member who picked them could win the Hys and Lows challenge 2 years in a row, thereby propelling himself into the ranks of World Class Insufferable Dicks. I can see him now; shit-eating grin on his smug face as he gets his 2 Times Hys And Lows Champion tramp-stamp inked across his white, hairy lower back, just above the “For a fun time, tickle here” tatt. Ugh. Kill me now. If he wins, the dinner is cancelled.
What rankles even more about this sorry state of affairs is a) the lack of meaningful news from Viszla other than a small financing and the appointment of the curiously-named Mr Funk as VP Exploration, and b) it’s a copper explorer, and we all know how well copper has performed in the last 6 months. The flip side is their complete lack of trading volume and the heart-warming bid (25c)-ask (33c) split, big enough to drive BoJo’s Brexit Bus through. Let’s see where you sit next month Viszla, just sayin. Woof. Hot on Vizsla’s heels, nose stuck firmly to the orange canine bum up ahead, is next month’s leader Velocity Minerals up 127.3%.
And on that note, it’s time to head to the couch for my afternoon nap. Rading spreadsheets is exhausting work. Looking forward to what September brings.
Former Chairman Ralph
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