Jamie Keech – Valuable Tips for Retail Investors

Interview with Jamie Keech, Co-Founder of ‘Resource Insider.’

A mining engineer, investor and writer, Keech’s job is to look at private mining deals. His company, Resource Insider, is a “deal-flow service.” The focus is on allocating capital to early-stage mining deals and private placements. All members are accredited investors. Keech spends most of his time searching for private placements to invest his own money in. Investors/subscribers are then given the opportunity to get in on the deal with their own capital at the same price, on the same terms. Resource Insider doesn’t take any kickback fees from companies; instead, the company is bankrolled via an annual subscription fee from each investor to fund the research and due diligence process. We were keen to hear his insights into how global markets are recovering from COVID-19, in addition to exploring numerous other retail-oriented themes.

Matthew Gordon talks to Jamie Keech, 17th June 2020


The Vancouver junior mining sector has been going “ballistic” over the last 6-8 weeks. In terms of private mining deals and private placements, there has been a real abundance in the market recently. Life is gradually getting back to normal, and while it is far from the ‘business as usual’ approach in some Australiasian countries, Canada is a little ahead of parts of Europe.

What are the key red flags for retail investors to look out for when considering investing in a company?

Remuneration and Timing

Watch out for management teams, company insiders and directors who are making “boatloads” of money paying themselves well, while their company isn’t driving share price growth for investors; this includes investors who have entered at any time period, from IPO, all the way to the present day. Investors should never be ripped off by timing.

Structure

A poorly structured company can suck every ounce of value out of an investment for a retail investor. Investors need to closely check a company’s history, especially when it comes to share transactions, before taking the plunge. The game is so often stacked against retail investors, and moves like “friends & cronies” getting in for a “fraction of a penny” during “seed round financings” can mean they get masses of shares at an incredibly discounted price, compared to the amount acquirable and cost attainable of shares for retail investors in the next round of financing. By getting in before retail investors have access, these early starters are able to obtain a 100X lift on their initial investment for zero work, and there hasn’t even been an IPO yet.

Investors want to search for teams that are genuinely working in their favour and have align interests; these are becoming increasingly rare. Just a few weeks ago, an undisclosed management team gave themselves 12M shares for just US$9. This is remarkable behaviour, and it serves as further evidence for why retail investors struggle so heavily. The brutal reality is that this “Ponzi scheme” is simply the name of the game. If retail investors want to call, they’ll need to make sure they’re playing a good hand.

How can retail investors level the playing field? Watch to our CRUX-Club.com videos to find out.

Getting In Early

Retail investors need to seek out the appropriate resources to get in as early as possible. Companies like Resource Insider seek to provide this opportunity.

Look At What Management Got In At

This will give investors a pretty good idea of how exactly the management is aligning themselves with the interests of shareholders.

Find Companies That Have Been “Beaten Down”

Look for companies that are well-funded with a good team behind them and have a depressed share price. However, the caveat to this is that it is getting harder and harder each day. There is currently a lot of capital available in the junior mining space that companies with absolutely nothing are fully-subscribing their public offerings. The euphoric sentiment is inflating the stock market enormously.

Retail investors need to recognise their limitations. They do not have the budget, capacity and resources to spend months carrying out incredibly extensive and technical due diligence. Retail investors need to know what they don’t know and compare that to their desired risk profile. It is very unlikely they will ever know everything.

We discuss more ideas and Red Flags with Keech in our extended version which you can find at CRUX-Club.com.

What did you make of Jamie Keech? Comment below and we will respond.

Company Website: https://resource-insider.com/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

Adriatic Metals (ASX: ADT) – A Fast-Moving Project With Very High Grades

The Adriatic Metals company logo
Adriatic Metals
  • ASX: ADT
  • Shares Outstanding: 178M
  • Share price A$1.15 (09.05.2020)
  • Market Cap: C$204M

Crux Investor recently sat down for an interview with the CEO of Adriatic Metals (ASX:ADT), Paul Cronin.

While you’re here, why not check out our latest mining interview or our latest mining article?

Adriatic Metals is a UK-based exploration and development company, listed on the ASX. The company is the owner of the Vareš Mining Concession in Bosnia and Herzegovina, a polymetallic project with promising historical data that has recently been proven via a drill program.

The grades of the project are extremely high, and with permitting moving quickly, Cronin hopes 2020 can be the year for a share price explosion.

We Discuss:

  1. Company Overview
  2. Business Plan and Vision
  3. Bosnia as a Mining Jurisdiction
  4. The Numbers: Raised to Date and Use of Money
  5. Permitting the Project: Timings
  6. Status of Additional Land and Claims
  7. Covid-19
  8. Drilling Update
  9. Big-Name Shareholders
  10. Polymetallic Ore Bodies

Company Website: https://www.adriaticmetals.com/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

The Adriatic Metals company logo

The COVID-19 Crisis – The Inside Word From Goldman Sachs

A crowd of people wearing masks on a busy public street.

COVID-19 – The Reality

There is plenty of blatant fearmongering right now, be that from the media or from individuals. It has struck the heart of the business world, causing convulsions of panic selling to overwhelm international markets. Investors have seemingly lost their bottle, but that is hardly surprising when the ‘news media’ constitutes clueless, dramatic speculation, rather than cold, hard evidence. I recently penned a different article about COVID-19 that you may be interested in reading.

Investors need to cut through the misinformation that is currently thriving and hear what the big business institutions are actually saying. Who better to hear from than Wall Street powerhouse, Goldman Sachs Group?

In an emergency conference call on Sunday 15th March, Goldman cut through the palpable anxiety and explained the fundamentals of the COVID-19 situation in a pragmatic way to 1500 of its clients.

The Goldman Sachs logo on a wooden wall.

Even the most logical investors do not have their heads in the sand. This is a serious, worrying situation that will take thousands of lives. However, let’s hear how the market is reacting beyond sentiment. It would be ignorant and insensitive to have a ‘good’ and ‘bad’ category for the impact of COVID-19 on markets given the large number of deceased individuals. Let’s settle on reasons to be bearish, and reasons to be more bullish.

Bearish (1/2)

  • “50% of Americans will contract the virus (150m people) as it’s very communicable.”

This is an enormous number, and there is no getting away from the unavoidable impact that COVID-19 is going to have on investors and markets. The scale of the problem creates immense volatility and unpredictability. The scale of this number is likely one of the main drivers behind current investor sentiment.

Bullish (2/2)

  • “This is on a par with the common cold (Rhinovirus) of which there are about 200 strains and which the majority of Americans will get 2-4 per year.”

This puts the Coronavirus situation into perspective. While nobody is pretending this is a normal flu situation, it is important for investors to avoid getting carried away. For the vast, vast majority of people, COVID-19 will exhibit either moderate or no symptoms. The elderly population and those with pre-existing conditions, especially respiratory, are at an increased risk, and this needs to be a constant consideration. However, let’s all calm down and take a breath before unnecessarily panicking.

Bearish

  • “70% of Germany will contract it (58M people). This is the next most relevant industrial economy to be affected.”

This is an even more intimidating number than the figure for the U.S and is likely generated by the greater population density in Germany. The German economy is integral to international trade, especially the automotive industry. One of the most important global economies possibly descending into paralysis is a very persuasive factor behind the mass panic selling.

Bearish

  • “Peak-virus is expected over the next eight weeks, declining thereafter.”

Investors will be seriously considering why they should invest now in these unprecedented market conditions, rather than waiting several months to global markets to begin to recover and stabilise. The extended timescale of the virus makes a strong case of caution.

Bearish/Bullish

It Depends On The Geographical Location Of Your Investments!

  • “The virus appears to be concentrated in a band between 30-50 degrees north latitude, meaning that like the common cold and flu, it prefers cold weather.”          

If you are investing in mining companies that are listed on an exchange that either finds itself in the cold season, or operates in an environment that is currently wintry/cold year-round, investors should make this a consideration. The virus appears to flourish in colder environments, so it is likely that environment will play a large factor in national economic performance.

COVID-19 on a cell level.

The coming summer in the northern hemisphere should help. The virus is regarded by many experts as seasonal. Investors like myself are interested in the climate logistics: does this mean a gold mine in what is currently and usually a very hot country, such as in Northern and Central Africa, is a safer, more predictable investment than one in Canada?

Bullish

  • “Of those impacted 80% will be early-stage, 15% mid-stage and 5% critical-stage. Early-stage symptoms are like the common cold and mid-stage symptoms are like the flu; these are stay at home for two weeks and rest. 5% will be critical and highly weighted towards the elderly.”

While this is devastating news, investors will hopefully be able to process these statistics for what they are. The majority of the workforce should be either unaffected or mildly affected. It is incredibly sad that the elderly people are suffering by far the worst, but investors will be aware that elderly individuals do not comprise a huge portion of the mining workforce. The lives of older people do not matter any less; that goes without saying. However, the logistics of this situation are clear.

Bullish

  • “Mortality rate on average of up to 2%, heavily weighted towards the elderly and immunocompromised; meaning up to 3m people (150m*.02).”

The mortality rate is a shocking figure but is relatively low. In addition, the mortality rate is based on total confirmed cases, when the true number may be much higher (but let’s not speculate). Again, the mortality rate is weighted towards the elderly, who play a reduced role in the world of mining and wider business.

Bullish (1/2)

  • “In the US about 3M/year die, mostly due to old age and disease, those two being highly correlated (as a percent very few from accidents). There will be significant overlap, so this does not mean 3M new deaths from the virus, it means elderly people dying sooner due to respiratory issues.”

This further confirms the COVID-19 situation. COVID-19 is not usually the sole cause behind an individual’s demise. It often hastens the death of those already suffering from severe health conditions. That is not to say that all those suffering from these underlying conditions are usually in any mortal danger on a day-to-day basis.

Bearish (2/2)

  • “This may however stress the healthcare system.”

An overworked, possibly overwhelmed healthcare system is rarely an indicator of economic prosperity.

Bearish/Bullish

  • “There is a debate as to how to address the virus pre-vaccine. The US is tending towards quarantine. The UK is tending towards allowing it to spread so that the population can develop natural immunity. Quarantine is likely to be ineffective and result in significant economic damage but will slow        the rate of transmission giving the healthcare system more time to deal with the caseload.”

How well your national economy is preserved depends on the competence of your government, the effectiveness of their coping strategy, and the actions of the populace. If Goldman Sachs is right on the ineffective nature of quarantine, which has perhaps been demonstrated by the situation in Italy, western investors seem to have a big reason to be concerned.

NYSE workers look stressed while talking over a headset.

A lack of national trust in the polarising Donald Trump and Boris Johnson could reduce the confidence of investors in their COVID-19 strategy, creating more volatility and leading to citizens refusing to heed advice. This could cause further deterioration to the situation.

Let’s hope the U.S and UK electorates have elected the right people for the job.

Bearish/Bullish

  • “China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.”

China’s economy is crucial to world economic health. The world relies on China for a huge amount of manufacturing. Disruption to the supply chain will create global uncertainty and this looks to be for an extended time period. This likely means more investors will be keen to sell and remain passive.

However, western investors will be hoping China’s economic frailties can be capitalised on by western businesses. Will western businesses be able to position themselves more strongly? Most of how this plays how depends on a company’s ability to mitigate losses from supply chain and demand disruption, in addition to ability of national governments to deal with this situation appropriately. This is far from a predictable outcome.

Bearish

  • “Global GDP growth rate will be the lowest in 30 years at around 2%. S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.”

Even the most ardent of contrarians will be aware this is likely to destroy investor sentiment for the foreseeable future and have a negative impact on growth.

Bearish/Bullish

  • “There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.”

This is encouraging for investors because, if Goldman Sachs is to be believed, it shows that markets should fully recover from the impact of COVID-19 by 2H/20. However, the impact on investor sentiment/market psychology will be much more long-lasting, insidious and damaging. 

Bearish/Bullish

  • “In the past week there has been a conflating of the impact of the virus with the developing oil price war between USA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.”

Whether this is a positive or negative for you depends entirely on which side of the investment aisle you are stood. Investors perhaps need to decide how they feel this geopolitical situation will develop and may need to adjust their position depending on their degree of confidence in their predicted outcome.

Bullish

  • “Technically the market generally has been looking for a reason to reset after the longest bull market in history.”

If Goldman Sachs is right, COVID-19 could have taken the form of any other catalyst. The message appears to be that this market reset was inevitable, but even optimistic investors will acknowledge the current market situation is far from routine or intentional.

Bullish

  • There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like ​9/11 than it does like 2008.

This is a very significant point. If Goldman Sachs it to be believed, the ferocity of the panic of investors is not fundamentally justified. There are obvious reasons for caution, but the risk appears more temporary than previous economic crashes, and the idea that markets are in dire straits appears to be exaggerated.

After reading this, I hope investors can at least feel more informed about the COVID-19 situation. I hope this article has brought some balance to the discussion, and investors now need to continue to go digital, research, and make their own minds up.

There are significant obstacles for us to overcome. However, this is no reason for people to switch off from investment entirely. Volatility brings risk, but it also brings opportunity. This situation will not last forever. In the meantime, take advantage of your free time at home as my country of residence, the U.K, edges towards what looks like an inevitable total lockdown.

Things will likely get worse before they get better. Stay safe, take care, and be selfless.

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

A crowd of people wearing masks on a busy public street.

Integra Resources (TSX-V: ITR) – A Renowned Team And Exciting Drill Results

A gold tinted photo of some US$100 bills and a pile of gold coins with a white Crux Investor logo in the top right, and a white Integra Resources logo in the top left.
Integra Resources Corp.
  • TSX-V: ITR
  • Shares Outstanding: 119.6M
  • Share price CAD$1.25 (20.02.2020)
  • Market Cap: CAD$150M

We recently conducted an interview with George Salamis, President & CEO of gold-silver explorer, Integra Resources Corp.

We regularly discuss interesting gold market proceedings on this platform. Check out one of our other recent gold company interviews, or maybe some of our recent informative gold investment articles.

The management team at Integra Resources is the former executive team of Integra Gold Corp, renowned for turning a C$15M gold company into a C$590 million (sold to Eldorado in 2017). What have they got this time around? We discussed:

  1. The share price increase: doubled in less than a year.
  2. Its flagship asset purchased from Kinross Gold Corp. in 2017.
  3. Promising drill results in 2019.
  4. Exploration plans for 2020.

We were also keen to ask why a gold-producing giant like Kinross Gold Corp. would sell its gold-silver asset to Integra Resources unless it was a dud? We explored some very impressive drill results and big plans for 2020. Do shareholders have a reason to get excited? With these results and a management team with such an impressive track record, maybe they do…

Company Website: https://www.integraresources.com/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

A gold tinted photo of some US$100 bills and a pile of gold coins with a white Crux Investor logo in the top right, and a white Integra Resources logo in the top left.

China Gold Int (TSX: CGG) – Gold And Copper On A Grand Scale

A photo of a silhouette hand picking out a gold Chinese ring.
China Gold International Resources Corp.
  • TSX: EQX
  • Shares Outstanding: 113.5M
  • Share price C$12.6 (21.02.2020)
  • Market Cap: C$1.43B

We recently sat down for an intriguing interview with Jerry Xie, Executive Vice President and Corporate Secretary of China Gold International Resources Corp. (TSX: CGG, HKSE: 2099).

Investors may want to read one of our most recent gold-related articles, or even watch a different gold interview.

Gold had a good year and an especially positive 2H/19. However, China Gold Int. had a negative correlation on its share price throughout 2019. The company operates two producing gold mines that form a low-grade, bulk-tonnage gold operation with a copper by-product. The operational statistics look good on paper, so why this share price tail-off? We discuss:

  1. The Decline In Share Price: Why?
  2. The Gold Market Outlook For 2020
  3. How China Gold Int. Plans To Get The Share Price Back Up

Company Website: http://www.chinagoldintl.com/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

A photo of a silhouette hand picking out a gold Chinese ring.

Equinox Gold (TSX: EQX) – The Sum of the Parts Sets it Apart.

A graph of rising gold bars with a red arrow curving up them.
Equinox Gold Corp.
  • TSX: EQX
  • Shares Outstanding: 113.5M
  • Share price C$9.73 (29.02.2020)
  • Market Cap: C$1.1B

We recently interviewed Christian Milau, CEO of large-cap gold producer, Equinox Gold (TSX: EQX). CLICK HERE to watch the full interview.

Equinox Gold Corp.

Equinox Gold is a story most gold investors should be familiar with: it is the model of how to build a gold producer in a short timeframe. This gold producer has had a remarkable rise over the past 18 months. Its share price hovered around C$5 at the start of 2019 and rose to heights of C$13.54 this year.

However, this week has seen even successful gold producers, like Equinox Gold, have their share prices brought to a shuddering halt, and even drop back. Equinox Gold’s share price has fallen this week alone from C$13.34 to C$9.73; this has been a truly extraordinary and noteworthy week of panic selling of a commodity that has been traditionally positioned and heralded as a ‘safe haven.’ It seems that truism isn’t true.

Let’s try to look to the world before the Coronavirus and hopefully the world after it. I know that may seem like a casual, almost dismissive statement, but it is not meant to be. There is clearly great global concern about the near-term impact on society and business, and possibly in the light of the current media spotlight, a normal future seems implausible, but history tells us that we humans persevere, adapt and survive, and we will again.

So let’s look to the future, if we may.

Equinox Gold was listed around 2 years ago, with the prodigious Ross Beaty as the main shareholder; if you are familiar with the school of ‘Bet on Beaty Bets’ investing, it will be no surprise to see Equinox Gold doing so well. Its founding goal was to become a multi-jurisdiction, large-cap, low-grade, bulk-tonage gold mining company.

Assets

Equinox Gold has a promising portfolio of assets:

  1. Mesquite Gold Mine, a Californian project producing 125,000-145,000oz gold per annum with an AISC of US$930-$980/oz and a grade of 0.46g/t gold (exclusive of reserves)
  2. Aurizona Gold Mine, a Brazilian gold mine producing 75,000-90,000oz per annum with inferred Resources of 1.1Moz @ 1.98g/t gold (with an exploration upside) and an AISC of US$950-$1,025
  3. Castle Mountain Gold Mine, an under-construction gold mine with a PFS and production potential of 200,000oz per annum and a 16-year life-of-mine (LOM)
  4. A copper-focussed spin-out operation in the form of Solaris Copper Inc.

Our Interview

Milau covered a variety of topics. Equinox Gold’s targets have been well and truly delivered. Mesquite and Aurizona are up and running, producing at a reasonable scale with a good AISC. Castle Mountain should be ready to rock by Q3/20.

These have not been without their hiccups; after all, this is mining. Equinox Gold has, however, kept things simple and it is reaping the rewards. The portfolio is focussed. The management team has created a relentless mining business for low-grade bulk processing. Equinox Gold’s message is simple: make strong acquisitions, then get that gold out of the ground!

Equinox Gold's Corp.'s share price for the last year.
Despite a late tail-off, what a year for Equinox Gold!

Equinox Gold has a significant 11% insider ownership: another reassuring fact for investors. The management team has succeeded in attracting a diversified shareholder base since the last time we spoke with Milau.

Milau also discussed Equinox Gold’s spending strategy and his view on the gold macro environment. What does the outlook for the gold market look like for 2020? He states this is only the beginning of this new gold cycle. He is conscious it won’t all be plain sailing in the gold sector, but this is in the early stage of the turn (US$17T of negative-yielding debt, solid stock markets and slowing global growth). Is the best really yet to come? Gold investors will be breathing heavily and hoping for more.

Equinox Gold has no intention of being taken out, and why would it? The company plans to become a long-term investment opportunity that can last through several cycles. Equinox Gold has had great momentum for those seeking fast returns, but it now also looks supremely appealing to those looking for steadier returns. Could it be a dividend payer in the next 2-3 years? Milau suggest so, but that is a long way away, and markets change. Let’s focus on today. Can that share price continue to grow at the same rate?  

As a gold producer, Equinox Gold has the rising gold price working in its favour, should the price continue on its recent trajectory. Can the management team start to accumulate cash, given they have been buying ounces in the ground? We appreciate Milau’s pragmatic take on gold margins: Equinox Gold is not rushing to produce and there is no spike in production. Equinox Gold is managing a steady, structured increase. However, the markets often don’t reward pragmatism and sensible management decisions. They often prefer pie in the sky stories of twenty-baggers and miracle proprietary technology. The fact the market has latched onto Equinox Gold with such excitement is a testament to just how solid this project seems to be. 1Moz per annum of gold is impressive, but this degree of investor enthusiasm is rare to say the least.

To continue on this trend of growth, Equinox Gold will proceed to develop its current assets and look at new acquisitions when the time is right. On the 28th January, Equinox Gold announced a merger with Leagold Mining Corporation that will combine the companies, ‘creating one of the world’s top gold producing companies operating entirely in the Americas.’ This should position Equinox Gold even more strongly.

one of the world’s top gold producing companies operating entirely in the Americas

Equinox Gold has recently received Serabi Gold’s C$14M payment for the Coringa project in Brazil, as it targets becoming a 1Moz per annum producer.

As far as remuneration, one of our favourite elements of the story, Milau stated that Equinox Gold has continued with its directors’ remuneration policy of paying them mainly shares. Milau claims he hasn’t cashed any in yet, but we can’t see any reason why he’d want to.

A photo of a Seal with a sign saying 'yes.' The words seal of approval are written underneath.
We Are Big Fans Of The Equinox Story

Equinox Gold is an anomaly. It is an abnormal story of inspired management, favourable prices, excellent assets and, as is always the case in mining, luck. We expect Equinox Gold to keep delivering on its promises for shareholders; the team has shown us nothing to make us believe otherwise. No, they don’t pay us and no we don’t own any shares. In an industry of over claiming and under delivering, we see Equinox Gold as company that does what it says.

Company Website: https://www.equinoxgold.com/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

A graph of rising gold bars with a red arrow curving up them.

Search Minerals (TSXv: SMY) – 10 Years: Anything To Show For It?

The Search Minerals Logo.
Search Minerals Inc.
  • TSXv: SMY
  • Shares Outstanding: 230.7M
  • Share price CAD$0.05 (21.02.2020)
  • Market Cap: CA$10.4M

We recently sat down to interview Greg Andrews, President and CEO of rare earths company, Search Minerals (TSXV: SMY). He answered a lot of difficult questions. Investors will need to watch the video to decide if they think he answered them well…

We discussed several topics, including:

  1. Rare Earths? What Are They And What Are They Used For?
  2. Raised CAD$20M, worth CAD$10M. What Happened?
  3. Struggling To Fill A CAD$500,000 Private Placement: Has The Market Had Enough Of Search Minerals?

This is an important interview for investors to watch, especially for its educational exploration of critical rare earth elements (CREEs).

Company Website: http://www.searchminerals.ca/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

The Search Minerals Logo.

MOGO Finance Technology Inc (TSX: MOGO) – Making Investors Money By Saving People Money

MOGO Finance Technology Inc.
  • TSX: MOGO
  • Shares Outstanding: 27.5M
  • Share price CAD$3.40 (21.01.2020)
  • Market Cap: CAD$93.5M

We recently interviewed Greg Feller, President of Canadian fintech, MOGO Finance Technology Inc. We discussed some very interesting topics:

  1. The Battle Of The Banks
  2. Carbon Offset Cards
  3. Saving Young People Money
  4. Big Plans For The Future

This was Crux Investor’s first interview with a fintech. We found Mogo’s business model intriguing, but we have some question marks surrounding certain areas.

If Feller can pull this off, he’s going to make his investors some serious dollars, and all while saving customers many dollars of their own.

Company Website: https://www.mogo.ca/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

Pan African Resources (LSE: PAF) – A Gold Producer That’s Movin’ On Up

A photo of Pan African Gold CEO, Cobus Loots.

We recently interviewed Cobus Loots, CEO of South African gold-producer Pan African Resources (AIM:PAF). CLICK HERE to watch the full interview.

A Decisive, Ambitious Team

One thing that has become very clear after conducting several interviews with Loots is that the Pan African Resources management team gets things done.

Mining is never easy. Mining in South Africa is even harder, but the management team consistently hit their targets.

Pan African Resources is well on its way to becoming a mid-tier gold producer. The team is targeting a solid 185,000oz of gold this year.

Loots ran us through the highs and lows of the last 6 months, including the recently released operational update.

The key highlights from the update?

  1. Pan African Resources is on track to deliver the full-year production guidance of 185,000oz.
  2. Group gold sales increased by 14.7% to 92,941oz (2018: 81,014oz).
  3. The Evander 8 Shaft Pillar project development is progressing according to plan, with steady-state production planned from March 2020.

We’re big fans of the tailings slant on the business because green is very fashionable right now. Some of the best companies we’ve interviewed recently have figured out a way to slot into the green narrative effectively.

Barberton Tailings Retreatment Plant produces a steady stream of gold, c. 25,000oz per annum, and the Shaft Pillar at Evander, an area of developmental focus in the near future for Pan African, could provide 20,000oz, rising to 30,000oz+ “in the years ahead.”

Pan African Resources is now mining more economically, courtesy of a strategy modification: mining at the shaft rather than at deeper levels. The result is an intended sub-US$1,000 AISC for the Pillar project. Solid numbers, and in line with the rest of Pan African’s other operations.

Elikhulu Tailings Retreatment Plant has had a mining feasibility study conducted that is now being independently vetted by a third party, with the view to expand it to a full feasibility study. Loots says it looks like c. 90,000oz per annum, with a 9-year life-of-mine, rising to 20 years with further resource modeling.

By utilising assets with existing infrastructure, Pan African Resources can keep costs down and get things going quicker. This is still a little way off but could be a good addition to the portfolio.

In terms of dividends, Pan African Resources recently released its first dividends for years. Loot states the company was recently one of the highest yielding gold dividend shares in the world, and that is the direction he wants to go in this time round. Let’s see how things turn out.

For now, it’s full speed ahead developing the projects, overcoming issues pertaining to jurisdiction, community and environment difficulties, and getting the share price where investors will no doubt want to see it.

Feel free to check out the full in-depth interview on YouTube. Don’t forget to comment and subscribe. If you have any questions for Cobus Loots, comment below!

Company page: https://www.panafricanresources.com/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

A photo of Pan African Gold CEO, Cobus Loots.

Harvest Minerals (LON: HMI) – There Is More To Invest In Than Mining

An aerial photo of a Brazilian soybean field being harvested. There are 2 Crux Investor logos added.
Harvest Minerals Ltd.
  • LON: HMI
  • Shares Outstanding: 185.84M
  • Share price GB$0.37 (12.02.2020)
  • Market Cap: GB£6.88M

Recently, we interviewed Mark Heyhoe, Chief Operating Officer for Harvest Minerals, an AIM-listed organic natural fertiliser producer located in Brazil. CLICK HERE to watch the full interview.

Crux Investor has previously investigated potash investment, but this one is a little different. Harvest Minerals says it has a unique fertiliser product: KPfertil. Heyhoe claims KPfertil has significant cost, production and technical advantages; let’s unpack them.

  1. KPfertil is much easier to produce than many other fertilisers. It is found at surface in the form of a heavily weathered rock/lava. The only processing step required is for the material to be crushed. The conventional crusher appears to be a relatively inexpensive overhead. Once crushed, KPfertil can be applied to soil to enhance crops.
  2. At surface means KPfertil is cheaper to produce than conventional fertilisers. Heyhoe quotes a current production figure of around US$18 per ton, with a reduction to US$7.50 once Harvest Minerals scales up their operation. This is good news for farmers: Harvest plans to undercut the competition.
  3. KPfertil claims to be considerably more environmentally friendly than other fertilisers, given its organic, natural properties. The modular plant allows for more simple production than more conventional fertilisers: the product is excavated, trucked, homogenised, crushed, then is ready to sell. This is far less environmentally impactful courtesy of the simplified, more energy-efficient process.
  4. Heyhoe says KPfertil has some interesting consumer advantages. With KPfertil there is no leaching, the loss of water-soluble plant nutrients from the soil, due to rain and irrigation, which can reduce the yield of crops significantly. KPfertil goes straight into soil and stays there for longer than other fertiliser options. This is means farmers use less fertiliser and therefore save money in time and product. Studies have shown the remineraliser releases phosphate and other nutrients into the soil in a more gradual way, finding that it was over ten times as effective as TSP in sandy soil after 80 days.

So, what does their business model look like?

Harvest Minerals has performed “extensive” trials in order to the get the product registered; there have been numerous trials performed on KPfertil’s primary markets, such as coffee, sugar cane and maize. Last year, Harvest Minerals produced 50,000t of KPfertil for potential customers to test on their crops; now they have to wait for the reaction from the farmers testing the product.

A photo of some budding plants with a hand placing fertiliser around them.
A long way to grow…

In June 2018, Harvest Minerals had cash and had conducted trials efficiently, but they were missing something; the market wasn’t listening to their story. The company was offered a distribution deal by a local operator that Heyhoe says looked strong on paper. However, disappointing sales figures by their chosen sales partner left Harvest Minerals with a decision to make. They decided to bring sales in house and now have 10 salespeople and a sales manager covering the area. It’s hard to tell if that exercise has delayed their sales efforts in the market or whether it’s just slow getting traction in Brazil at this level. We appreciate it can take time to establish relationships and build trust in a new market, and a few more salespeople on the ground would have helped.

A recently financed 320,000t per annum processing plant is clearly under-utilised, because the testing period by local farmers means smaller orders until they are confident of the product. Even when they are confident of the KPfertil product, the farmers still have relationships with other sales forces and fertiliser companies. This is similar to the pharmaceutical industry: it takes time and the competition won’t let up. Hayhoe defends the decision to spend the money upfront to build a plant of that scale. The cost to build is around US$1M, with the hope that sales dramatically improve once the results of this year’s growing season are in.

The buying season for fertiliser is May to December. Heyhoe may be correct about the order in which they chose to spend their available cash. Current cash to hand is c.$5M and given current plans and the relatively low overheads and burn-rate should not need to go to market to raise more money anytime soon. It rests on how quickly the farmers and grouping groups take up KPfertil and how the competition responds.

The main difficulty with selling KPfertil is inherent in the nature of the market itself. While Harvest Minerals claims Brazil has the world’s fastest-growing fertiliser market, the simple reality is that local agriculturalists were unwilling to risk their entire harvest on an unfamiliar product; normal, prudent, and not alarming. The demand could be there, with 4.5M hectares of potential agricultural land between their operation and the nearest major Brazilian airport.

Heyhoe explains the company currently sells c. 50,000t of KPfertil per annum, to around 70-75 customers. Their largest customer constitutes 9% of total sales. In addition, Heyhoe says there have been ‘positive indications’ that farmers will move to 100% KPfertil use. The number of customers and quantity is unknown. Hayhoe is unwilling to speculate or give guidance as to what they are targeting: a major frustration to Harvest Minerals investors.

Harvest Minerals is waiting for a permit, and the management team is currently working on upgrading storage capacity so that it is more in line with the company’s production capability.

It is very early days, but the share price has seen little movement. We will continue to follow this story closely to see if they do what they say and to see how their competition reacts.

Company Website: http://www.harvestminerals.net/

If you see something in this article that you agree with, or even disagree with, please let us know in the comments below.

Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situations or needs. You should not rely on any advice and / or information contained in this website or via any digital Crux Investor communications. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.

An aerial photo of a Brazilian soybean field being harvested. There are 2 Crux Investor logos added.