Several updates since last week’s mid-year review.
Star Royalties
The latest MJG Capital shareholder letter details Star Royalties total failure to execute since inception and calls for the company to liquidate.
Ultimately, Star has made three big bets as a company – the US$10.63 million royalty purchase at the Elk Gold Mine, the US$9 million paid for a 4% life-of-mine gold stream at the Copperstone Gold Mine, and the US$10.6 million deployed into CarbonNOW via Green Star – with each of these having gone awry.
Given this reality, it is becoming increasingly apparent that shareholders would be best served by a full sale of the business (likely in two separate transactions given the different pools of potential buyers for the mineral and carbon credit royalty/streaming interests).
Should the company go this route, Star shareholders will almost certainly be able to recoup an amount greater than the current C$0.22 share price.
I agree with Geiger on the botched execution and bad capital allocation, which is why all my purchases happened mostly in the teens and low 20s. If it comes, I’d prefer liquidation after progress is made at Copperstone to bolster the underlying value of the 4% stream and allow Star’s Minera Alamos shares to increase in value. Alternatively, I would take MAI shares as a special dividend on a 1:10 basis.
Chibougamau Independent Mines
With cash in hand from recent asset sales, TomaGold will start drilling on properties optioned from Chibougamau Independent Mines. Note that CBG retains a 2% gross metal royalty on the claims. It also owns a royalty on Cerrado Gold’s Mt. Sorcier iron deposit.
Eagle Royalties
Summit Royalty will go public through a reverse takeover of Eagle Royalties, closing the book on this special situation. I’ll sell as soon as the deal closes and liquidity comes into the stock. This outcome has been telegraphed for almost a year by management at Eagle Plains Resources, the controlling shareholder and prospect generator that spun out Eagle Royalties to surface the value of its organically generated NSRs. Eagle Plains is preparing to spin out its Osprey Power clean power prospect generator – and doesn’t like to have two public spincos trading at the same time.
Kingfisher Metals and Vulcan Minerals
Kingfisher Metals is beginning its 2025 drill campaign.
I don’t usually buy explorecos, but Kingfisher spoke to me because they’ve consolidated a large land package and have the expertise and access to capital to see it through, unlike Golden Ridge Resources. I don’t know if it’ll work, but I like the setup and it’s sized appropriately.
I’m told mineral rights in Newfoundland are being returned the province. Companies that owned the claims weren’t doing any work because they don’t have any money. I’m hoping Vulcan Minerals picks up valuable claims on the cheap while the build out of the Great Atlantic salt mine continues.
Royalty Management Holding Corporation
This tweet is most likely responsible for last week’s extreme move in Royalty Management Holding Corporation.
If you believe the chromatography technology has value, then AREC is correct and this is still a bargain price. The capital structure is set to improve in March when 9.1-million out of the money warrants ($11.50 strike price) expire worthless. That should help RMCO screen better. In the meantime, the environmental services business finances the corporate overhead, the dividend and share buybacks.
Orogen
With the surge in Triple Flag’s share price, Orogen is now trading above $2. This means we’re eventually getting the Orogen spinout for free based on a purchase prices ranging from $1.73 to $1.77. That’s about what the Triple Flag share consideration is now worth.
