Musings on Investing

India: At Mines & Money London

Group Eleven, etc.

For the last many years, I have attended Mines & Money conferences in London and Hong Kong. I find both very useful, for they are the only mining-related conferences I know of that also address the macro issues to do with mining and socio-political aspects of the jurisdictions. The recently held London event was, as usual, fabulous, thanks to Andrew Thake for the great work he does.

One booth that caught people’s eyes was that of India. It was by far the biggest booth. India wanted to show that it is inviting the participation of investors in mining with a bang. While China was missing, India was there. What was not there for a nationalist like me to feel proud of?

I have to congratulate the Indian contingent for giving a very honest portrayal of India…

The booth was set up to do many meetings in parallel. The only problem is that no meeting was held. I am sure they will concoct some fake meetings with important people for justifying spending a fortune for their participation. Most of the team members of the contingent never made it to the hall. The booth was mostly unmanned. Only once did I see two very badly-dressed, disinterested bureaucrats. They spent virtually all of their time enjoying the scenes in London, taking selfies, booking expenses, etc., exactly how it is in real life in India.

Anil Kumar Nayak, Joint Secretary of the Government of India, was to give a ten-minute speech, except that he failed to turn up. Other countries—even the most bureaucratic, corrupt, and lazy ones—would have insisted on a much longer speech-slot and a participation in panel discussions.

No one exhibits the reality with honesty the way the Ministry of Mines of India did.

Two badly-dressed, disinterested bureaucrats

The booth mostly had no one in it, exactly the way it is in the offices in Delhi

I wonder who read this verbose. Who are Indian government’s marketing consultants? What fortune was paid to transport these panels to London?

If you want a detailed explanation about mining in India, linked is an earlier article of mine.

On Investments…

If you look at the graph of the TSX Venture index, you might realize that it likely bottomed on 19 November. I wonder if the tax-loss selling is already over. It is often hard to distinguish whether a stock has fallen because something is wrong with it or because of tax-loss selling. Here are some stocks I am paying attention to:

  • Group Eleven Resources (ZNG; C$0.035): They recently issued shares to Glencore at a price of C$0.12. The market is not keen on zinc projects, and tax-losing selling has perhaps worsened the share price.
  • Strongbow Exploration (SBW; C$0.03): This is another company that has fallen a lot. Their last financing was done at C$0.14. They have been unable to raise money to move the project forward. My guess is that the lack of bids, tax-loss selling, and their complicated balance sheet has resulted in the fall of the share price. I have not been able to get full clarity on financials, the reason why I would explore this issue more before buying aggressively.
  • Helio Resource (HRC; C$0.09): Their project in Tanzania was taken away by the government. The share price is a fraction of what it used to be. If they manage to get the Tanzanian project back, the upside can be very nice. If they don’t get it back, once the tax-loss selling is over, I don’t see much downside risk.
  • Commander Resources (CMD; C$0.06): While I don’t see as much upside as I see in other stocks listed here, I still see a 50% upside in owning CMD.
  • Riverside Resources (RRI; C$0.125): This is a generative company with a good management team, again suffering from tax-loss selling.
  • Maritime Resources (MAE; C$0.075): They are expected to release a pre-feasibility report next month. It is one of my favorite stocks.
  • Aethon Minerals (AET; C$0.15): This is an arbitrage opportunity. My friend, Brian Leni, wrote a report here.
  • First Mining Gold (FF; C$0.215): Removal from GDXJ and tax-loss selling has hurt their share price.
  • O3 Mining (OIII; C$2.35): Among the mid-sized companies, OIII is my favorite.
  • Amarillo Gold (AGC; C$0.165): This is possibly the cheapest gold junior I know of. I am no longer a buyer, for I am already well-invested in it. As such, I see nothing wrong with it, and I recently got an update from the management. However, when something stays weak for too long, I do start to worry, for it makes me wonder if there is something I don’t know.

Warm regards,

Jayant Bhandari

Associate: Rajni Bala

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