Portfolio Snapshot
I'm up 40% year to date in my portfolio. I'll try to do another post on what worked and what didn't in the first 7.5 months of the year. But I thought since things have changed I'd do an update of how I'm positioned to close our the year.
Pound the table - 10%+ portfolio allocation
Full position - roughly 5% portfolio allocation
Half position - roughly 2.5% portfolio allocation
Quarter position - roughly 1.25% portfolio allocation
All positions hard capped at 20% of portfolio at mark to market
If it's less than a quarter position I either exit or add.
Pre-Production Sweet Spot
This is pretty simple. Buy at fully financed and permitted, hold through construction, sell at first pour or declaration of commercial produciton.
$RIO.V - Rio2 a full position that has grown to be bigger. Plan to sell some at first pour but hold a good portion to declaration of commercial production. The big Fenix plan with more water is the real prize here so potential catalysts are not just going into production but signing water agreement and updated study on the bigger production.
$ERD.V - Erdene. Full position. I think there's a lot of upside here on exploration. I expect the mine plan to add a lot of ounces not just to extend mine life, but to sequence more higher grade earlier. Also good mill expansion opportunities.
$MAU.TO - Montage Half position. Lundin's taking a mine to production. Would be a full position but the Lundin name has already pushed the valuation up.
$RBX.V - Quarter position. Robex.
Royalty
I'm the lightest in royalty companies I have been in a very long time. I had been heavily exposed to mid-tier precious companies in anticipation of consolidation. Instead the valuation discounts closed. I exited a lot of them because at $3300/oz gold at P/NAVs often exceeding 1x the takeover premiums probably won't be large.
$ELE.V - Elemental. This went from a pound the table sized allocation to taking profits and reducing to a full sized position. Tether effectively took control by buying out the two largest shareholders. I still think there's value here, but it's more rationally priced than it used to be.
$FNV - Franco. Half position. The GOAT. Think Cobre Panama could re-start and if royalty valuations are going to be fully valued I'd rather pay up for quality.
$LIRC.TO - Lithium Royalty. Was a pound the table pre tender. I tendered roughly half my shares and now it's just a full position. Lithium isn't dead. Several key assets coming online or expanding production. Real upside is the Orion litigation settlement that is now expected late 2026, but good value even without that.
$VNOM - half position. I don't feel like I have any analytical advantage in oil and gas royalties, which don't have the same optionality upside. But I like having some oil and gas exposure to diversify my portfolio and to force me to try to figure out the sector.
$DRR.AX Deterra. Half position. Probably fairly valued on the iron ore royalty which is most of their current revenue, but I like the upside on the Thacker Pass royalty.
Project Generators
I'm down to one project generator, but am looking to add more.
$KLD.V Kenorland. Full position. This has in the past been a pound the table level position that worked out. Great management and great strategy and execution. Luck hasn't been good lately with the drill bit but this is one I'm happy to just hold long term.
Miners Expanding Production
$HCC - Warrior Met Coal. Full position. Someday Blue Creek will open. Until then they are still a low cost producer of met coal. It's a long term position for me.
$MAI.V - Minera Alamos. Half position. Current shareholders hate the new acquisition / reverse takeover. I actually think it's pretty perfect for this operational team to build a couple of mines in the US and have potential upside if the Mexico permitting ever gets unclogged. I also like deals where current shareholders capitulate as the new plan is very different than what they were invested for. Once some of the sequencing plans get more concrete I might increase this to a full position. Also worth noting they plan to seek a US listing and post deal closure their operating mine is in the US and their two next development projects are in the US, could cause a real liquidity bump.
Explorers
My record with explorers is mixed. But I think we are at a point in the gold cycle where explorers hitting gold can raise capital and get acquired for good premiums. I also think we are going to need new copper mines and not just adding more milling capacity and dropping cutoff grade at brownfields. Expect a lot of turnover and small positions in my explorer investments, neither of which I find helpful in investing.
$QTWO.V - Q2 Metals. Full position. This is in my opinion going to be 200+ Mt at good grade and near a paved highway in a country that has a lot of incentives to develop critical minerals. If we see good DMS met work and the shares are roughly where they are now I'm going to pound the table, but waiting on DMS met work first.
$KFR.V - Kingfisher 3/4 position. They seem to have confirmed that historical drilling continues to depth and have developed other targets I consider highly prospective. Mostly I like management and porphyry copper targets.
$BIG.V - Hercules. Half position. I think there's a good chance they've figured out their targeting model and their current hits can be repeated at scale. Not in love with Barrick exiting the neighboring projects for next to nothing. Also not in love with potential permitting. But there aren't a lot of projects that I think have this potential for proving scale this season.
$ARIC.V - Awale. Half position. They've got a whole district with more permits getting granted. It's not rocket science expoloration either. Trace termite samples and soil samples and drill it with RC, put a few diamond holes if the RC hits. Repeat.
$ANDC.CA - Andina Copper (formerly Pampa Metals). Half position. I don't like Colombia as a jurisdiction, but I think they've got a real deposit there, and ultimately geology matters. Maybe they can flip the Argentina project to their neighbor as near surface starter material. Their Chile project seems to be a a good neighborhood. I also think there's an interesting liquidity angle as they look to potentially uplist to TSX-V and cross list to Australia.
$AE.V - American Eagle. 3/4 position. I like the management team and while I wasn't excited aboutt his season's exploration program because their existing deposit seemed pretty well constrained they seem to have a chance of 1) discovering a new system to the north and 2) expanding the southern shallow gold system. It's early days but I'll pay to see those assays.
$TDG.V - TDG Gold. 1/4 position. This is pretty simple. The deposit of their neighbors seems to have every indication of crossing to their side of the claim boundry. That alone is a big deal and I really like those odds. In baseball terms I think it's almost certain they get on base. A bigger deal would be if they can prove out the idea that similar targets occur at previously undrilled depths elsewhere on their property. In baseball terms they have a small chance of getting the next batter to hit a home run.
Misc Natural Resources
$SIVR physical silver ETF. Half positin. Thesis is simple here, buy at gold:silver ratio > 100:1 sell when it gets down to 80:1. It's at 87:1 now so close to exiting.
$KRY.V - Copper project developer. This is a bet on management. Its an OK project in an OK jurisdiction and I think we need more copper mines. But Heye Daun and the team around him are legit, and that's really the investment thesis. I'd love to increase this to a full position despite generally not investing in this stage of the lassonde curve.
Misc Non-Resource
$AER Aercap - full position. Best capital allocation out there, better business than people give them credit for. But no longer dirt cheap stock price relative to value.
Cash 11% - Was up above 20% as closed out positions, but have been finding places to put it. Feel like I'd like more cash as the market feels primed for major dislocations.
$FLYD - Cambria foreign shareholder yield ETF. Full position. $IEFA largely worked as it outperformed the US and had good returns and I have now largely rotated into foreign shareholder yield as I see US large cap and US growth as overvalued. P/E is around 10, P/yield is around 10, P/cashflow is around 4.5.
$YELP - Half position. -20% year to date while my overall portfolio is +40% can turn a full position into a half position. I may increase back to a full position. They are quietly building a nice 2 sided marketplace for small business. Just need to think through the impact of AI on them.
$PYPL - full position. I've always loved the business. Two sided marketplace payment network. But I never loved the valuation. Well -18% year to date and -65% 5 year has fixed the valuation. An EV/EBIT of 10 is too cheap for such a quality business. I think the risk from crypto is overstated and while growth has hit some bumps I think there's a lot of potential growth ahead, even if growing at more modest rates.
$CHL.AX - Camplify. Quarter position. This has largely been a failed investment as their execution of integrating an acquisition has gone poorly. But I like the 2 sided marketplace so I either need to fish or cut bait here. I'm not sure which I'm likely to do.
Future
I'm not excited about my current portfolio and am looking for new themes and new individual ideas. Earlier in the year I felt like I was well positioned and the hardest part was just letting it play out and not being too active. Now I feel like many of my positions are tactical and I'm not as well positioned overall. I hope to close the year with a very different portfolio composition than the one I currently have.