A look at the portfolio heading into the second half of 2025
A lot of sales to reposition the portfolio since the last time I put one of these updates out. The idea is to get exposure to irreplaceable assets and structural demand for gold from central bank buying. Essentially I think there’s a long-term supply/demand imbalance in the gold market.
What’s missing is pure-play copper exposure. For now, copper upside comes from a possible spin out from Minera Alamos and the prospect generators.
Mining
- Minera Alamos
- KGCRF – Kinross Contingent Value Rights
Industrials
- Comstock Inc. – Silver
- Aecon – Nuclear
- CVR Partners – Urea
Royalties
- Undisclosed Royalty Co.
- Triple Flag Precious Metals
- Star Royalties
- Royalty Management Holding Company
Exploration/Prospect Generators
- Kenorland Minerals
- Orogen 2.0
- Kingfisher Metals
- Vulcan Minerals
Specials/Workouts
- Metals X
- Chibougamau Independent Mines
- Eagle Royalties
Raw Commodities
- Sprott Physical Uranium Trust
Long time holdings like Centrus Energy, Sailfish Royalty and Elemental Altus leave the portfolio as multi-baggers to make way for gold exposure trading at distressed levels. I also culled laggards like Salazar and Sable Resources, where a distressed buying strategy limited losses and helped avoid the wipeouts junior mining stocks are infamous for.
I think this is a local top for uranium stocks. Physical uranium? Yes. Nuclear construction exposure? Also yes.
Uranium mining stocks? No thanks. At least for now.
Minera Alamos/Star Royalties: A Copperstone story
When you’re buying deep value you don’t pick the assets, the assets pick you. Copperstone is an underground restart project in Arizona. It was a stranded asset inside the functionally bankrupt Sabre Gold Mines. As part of Minera Alamos it’s the catalyst for two companies to become multi-baggers.
My baseline assumptions for Copperstone are 40,000 ounces of annual production for 15 years. Given the Mexican permit hell Minera Alamos is dealing with, they’ll build Copperstone and put it into production or die trying. All I have to do is wait.
I’ve tweeted multiple times on my valuation of Star. If my projections for MAI are correct, those numbers are low.
Kinross CVRs
My cost basis is down to a penny after trimming in the low 70s. I’ll have a decision to make on whether to hold through or sell if these contingent value rights start trading above $1. Regardless, what started as a simple arbitrage is turning into a career-making trade.
Comstock
Two potential high growth businesses in a deep value wrapper. The non-core assets CEO Corrado Degasperis is actively working to monetize exceed the current market cap. There’s also more than $200-million in tax losses to shield future earnings. I’ll admit I wasn’t a believer at first, but this is a high conviction position for me now. I’m buying more when I can and the stupid cheap valuation of Comstock played a big part in recent sales.
Triple Flag buys Orogen’s Silicon NSR
This started as an arbitrage. Triple Flag’s purchase of Orogen’s Silicon NSR gives shareholders:
- $1.63 in cash or 0.05355 of a Triple Flag share
- 0.25 of a share in Orogen 2.0 – which is some cash and everything Orogen had before except Silicon.
In the $1.70s where I bought Orogen this valued ‘Orogen 2.0’ at between 25 and 40 cents. I’ve been convinced of the merits of both companies and will be keeping them as long-term holdings – another reason the other royalty companies were sold. If there’s consolidation of the royalty space, Triple Flag is best equipped to swallow a large prize. It’s well run and now has its cornerstone asset that will produce for decades once it’s up and running.
Not long for the portfolio
CVR Partners has generated a nice income stream, but I’ll be looking to use recent strength to exit and raise cash to put into higher conviction positions. I’m going to claim temporary insanity on buying Metals X again and leave it at that … I never want to be in a position where I’m cheering rebel forces so my stock moves.
Cornerstone royalties
With Orogen’s Silicon royalty off the market, these are the royalties I track. They’re the type of asset a major pays a sickening premium for – gold NSRs on long life assets.
- Silicon: ALS.TO
- Odyssey: GROY
- Spring Valley/Moonlight: FISH.V
- Timok royalty basket: EMX.V
- Frotet: KLD.V
Much easier than tracking dozens of companies holding hundreds of royalties.
