I’ve been following the market as closely as usual, moving a bit of money around here and there, but ultimately not doing much since the bull market really started ripping.
Good News
- FPX Nickel has caught a bid. This is my largest position so it’s nice to be nicely in the green. In general, nickel stocks have moved. I believe there’s more money coming into the sector, seeing nickel has the best contrarian bet. There’s also some more tempered optimism around the nickel price and pessimism around Indonesia’s ability to pollute its own backyard indefinitely. Regarding FPX, the Tl’azt’en MOU has not been released yet, but I’m glad that catalyst awaits.
New Positions & Updates
I took a position in ARC Resources. Whenever I look at the O&G stocks, this is the one I come away with wanting to own. Dividend-paying, the stock was trading near yearly lows, so I bought some shares (25.38 ACB) to diversify my portfolio.
Kenorland Minerals — this is a name I’ve been following lazily since watching it sit at around 70 cents for what seemed like a whole year after its IPO. What kept me from buying it was not dislike of the stock, but that I already own Altius Minerals as a prospect generator in my portfolio (I’m trying to only own about 10-12 stocks). I bought some for my son’s RESP though at 1.78 cents.
I added more to Regulus Resources at 2.20, which looks good now. It’s my third buy of REG, which I believe is a matter-of-time story. If I’m getting better at anything, it’s adding to my winners.
Aecon is looking good. I see Aecon benefitting greatly from Carney’s budget focusing on Canada-wide infrastructure and nuclear buildouts.
Bad News
B2Gold. Sigh. You sonnavabitch.
Watching the stock fall two weeks ago, I assumed it was due to the gold pullback. Watching it fall last week, I (and many others) assumed it was relating to the upcoming earnings. Watching it fall another 5% today (after earnings came out), I’m finally seeing that the outflows in the stock are due to the conflict in Mali that threatens the country’s stability.
Frankly, I should have been keeping a closer watch on Mali instead of just following the surface-level commentary on CEO.ca. The situation in Mali, while understated by the company on its conference call (obviously), is significant. The most extensive coverage I’ve seen on it is from Africa Today, whose host argues that the Mali junta (current admin) can survive the pressure from the JNIM (al-Qaeda-affiliated jihadist group) with the help of its Russian ties. The main threat seems to be JNIM blocking fuel delivery into Mali in order to sow discontent among the people, with the ultimate aim of regime change.
Regardless of whether you think they will be successful, the media I have digested today clearly establishes that this is a real risk. If they do not succeed in orchestrating a coup, the risk of fuel shortages affecting B2Gold is very real. Ultimately the conflict is enough to make me want to step aside either indefinitely or until the dust settles.
A month ago, up approximately 100%, I didn’t beat myself up much for picking this laggard since I believe Goose will deliver and I’ve been receiving dividends while reaching a two-bagger. But good lord, I can’t help but kick myself (like all other shareholders I’m sure) for being attached to this miner-with-warts-soon-to-rerate play instead of picking virtually any other gold producer.
Buy cheap shit, get cheap results I suppose. I’ve written this post mainly for myself so I can reflect upon selling (which I plan to do tomorrow). The last time I sold out of fear was Sibanye-Stillwater, which I sold very close to the bottom before it rebounded. B2Gold will likely rebound and selling here will be for a 36% gain, not a loss. I may come on board when the dust settles but I believe the tempest in Mali will take some time to settle.
-MB
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