Musings on Investing

India: Futility of Elections

In the recently concluded Indian elections, Modi lost his majority, although this should not be construed as a loss of support, which went down from 37.70% to 36.56% on a vote-count basis. Every party in India has two policies, in different proportions: religion and freebies. That is why it does not matter who runs India. Indians have no vision. Here is a conversation that Labyrinth and I had before the elections:

Darcy Gerow and Clayton Reeder now run a yearly Capitalism & Morality seminar in Calgary, a fabulous event I recently attended. I continue to run the seminar in Vancouver. Linked in the following is a conversation with Darcy on why capitalism and morality have a symbiotic relationship:

On Investments

Shad Marquitz, Maurice Jackson, and I talk about what I think about the market:

Here are thoughts on some companies:

  • Irving Resources (IRV; $0.37): They recently raised a million dollars to fund their portion of the JV at the Yamagano project in Japan. Newmont and Sumitomo are the partners. These two majors were interested in the JV, which entails a lot of complex legal work incorporating several jurisdictions, because they recognized the importance of the project. Drilling under the umbrella of the JV is expected to start in early July. Also, IRV is well on its way to option a small silica-rich area of the Omu project to Japan’s biggest mining company, JX Metals. I am mainly focused on the former project, but I am glad that IRV will no longer have to fund the latter project once the option agreement has been finalized.
  • Aztec Minerals (AZT; $0.155): They recently released assays from channel sampling at the Tombstone project, one of which was 30 meters of 3.72 g/t. More results are awaited. The rock is oxidized and should have excellent recoveries. If they can define a small area with similar grades, they can add a lot of ounces and think about having a process plant instead of a heap-leach pad, which would be more palatable to everyone.
  • Blackwolf Copper (BWCG; $0.115), Argonaut Gold (AR; $0.42), and Osino Resources (OSI; $1.74) will be acquired over the next few days. They offer 8-10% arbitrage upsides. The OSI share price fell because it will be converted to cash and, after June 30th, attract higher capital gains tax for Canadian taxpayers. (Do vote for Maxime Bernier of PPC in the upcoming Canadian elections. That is unless you want Canada destroyed).
  • Hess Corporation (HES; US$147) offers an arbitrage irrespective of whether it goes to Exxon or Chevron. I am ambivalent. The upside is 9%.
  • Base Resources (BSE.ASX/LSE; A$0.26) offers a 16% arbitrage upside.
  • Marel hf (FRA; €3.25) and Integrated Financial Holdings (IFHI; US$30.50) are two other companies. They offer 15% and 10% arbitrage upside, respectively.

Jayant Bhandari

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