Wednesday, March 22, 2017

Recent Buy – Brixton Metals Corp

Another new position in my portfolio. Regular readers are aware that I have been bullish on the precious metals space since mid-2016. The new bull market started last year after a painful 4-5 years and provided investors with lucrative returns over the year. 2017 doesn’t seem to be much different — and investors are seeing almost identical performance through the start of this year as they did in 2016. My top investment pick for the year, a junior gold miner ETF (GDXJ) is up 30% YTD. You can see the live tracking of the top picks on this page.


Earlier this week I initiated a position with 5,000 shares in Brixton Metals Corp (BBB.V) @ C$0.42. Brixton Metals is a gold/silver/cobalt exploration company that operates in Canada.

Recent Buy Decision

  • A leveraged play on the precious metals space. Given all the macro economic environment, I am more bullish than ever on the precious metals space.
  • The company two 100% owned high potential brownfields exploration projects – one in Northeast Ontario and the other in British Columbia. Both these sites have mines closeby in the past and as the saying goes in the business, the best place to explore is close to where previous riches were found. In addition, the old sites provide all the infrastructure needed for mine development
  • The Thorn site in Golden Triangle, BC has two (Outlaw & Chivas) large scale gold targets. Drilling will take place soon this year
  • The Cobalt camp in Ontario has multiple sites (Langis, Hudson Bay, Gowganda) which have already resulted in some proven reserves in the bag for Brixton with high grade silver
  • While the primary target is silver, cobalt/nickel/copper are all targeted as secondary metals. Recently, due to the demand from the renewable space, these metals have been flying high and will provide added tailwinds
  • The current market cap is a low $17M, which makes this the smallest company I have invested in….although there is plenty of room to grow as these exploration projects yield the expected results over the coming months.
  • The people: Current investors include management (owns 12% of the company), Rob McEwen (owns 9%), Institutional (owns 7%), US Funds (owns 6%), Hecla Mining (owns 6%), Eric Sprott (owns 5%), Tahoe Resources (owns 4%) and the retail investors own 53%. If you are at all familiar with the mining world, that is one helluva lineup of investors backing the projects. Each one of these investors have been proven to be extremely successful in the space and are legendary in finding great projects to back. The management is also impressive with the team coming from NovaGold, McEwen Mining, Underworld/Kinross, Abitibi Royalties, etc.
Following is the 1-yr performance. the big spike in summer 2016 was noted when Eric Sprott disclosed a position and this company has been on my watchlist ever since. Now that the company has pulled significantly back, I find it attractive enough to take a position.


What are your thoughts on the prospects of this stock? Share your thoughts below.

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