Endeavour Mining Capital (EDV-T)

Owns shares in company. Troubled by CEO replacement, however assets in West Ghana are valuable. Will continue to hold. Has lots of value in company. 

Very good at business execution.
Africa assets include political instability.
Large deposits very attractive.
Historically very good at M&A activity. 
Will continue to own shares. 

Precious metals is an area of long term opportunities. We saw a great run for a couple years but in the last year, it has gone sideways to down. Enthusiasm has waned and is affected by the bitcoin craze. If Bitcoin loses sails, the inflation hedge money will come back to precious metals. Outlook for gold is good in the next years with governments adding debt. Trading at a low valuation. Has a compelling free cashflow. There is political risk however. Will perform better once gold picks up.

Doesn't follow this one closely, so he has no useful insights. But he does follow EDR, a smaller cap silver company, which looks interesting.

If he was going to buy a silver producer, this would be it. The best of the Canadian producers. His preference is Wheaton Precious Metals as a royalty play.

It has done pretty well but it has a debt load. He doesn’t like it at this point. It has had its day, moved up a lot. If he owned it, he would be looking to sell it.

West Africa mining - strong management team. Ramping up from 500k oz to 800k oz. 7 times cash flow. He sees it trading above its fundamental value. Free cash flow will be negligible for the next couple of years as they build two new mines and they have quite a bit of debt.

They delivered tremendous value and are now fully valued. There is a pipeline of opportunity. It is more about the investor than the company, depending on the timeline the investor has.

He was a large, large shareholder a year ago. The whole West African gold sector has performed extremely well. If you own, he would suggest using trailing stops. Believes there will be further consolidation in West Africa which will be good for the industry.

(Hold or Sell?) Acquiring True Gold (TGM-X). Recently did a comparison of True Gold with Roxgold (ROG-X). They both put out the feasibility at the same time and both say they have had about a 45% IRR with a gold price between $1250 and $1300. The difference is that Roxgold is high grade underground while True Gold’s Karma project is low-grade leaching (?), but are looking at very good recoveries of 85%. Roxgold’s funded through equity and debt while True Gold did a stream. The stream is a significant portion of the upfront capital required. By keeping Endeavor and the True Gold Karma project, the first 5 years of 100,000 ounces, you get 20% of the gold price.

Depressed but he likes it. Hats off to the management team due to a recent announcement. Yield is probably north of 15% and they should use some of that to pay down debt. It is in the risky end of Africa.

What is the outlook for Endeavour Mining? They are producers out of West Aftrica. "At 90 cents you have to like the name".The potential for free cash flow for next year looks good. He does have a position. Good buy here. Sees 2/3 or 75% of net asset values as a realistic target in the next 12 months.