Wednesday, July 4, 2018

Recent Buy – EQX

A quick update on a recent purchase in my portfolio. This round is a new position in my portfolio.

Although I have been pulling back from the Basic Materials sector since the sector has grown to a big part of my overall portfolio, I find some good lucrative businesses to invest in, as the sector still remains one of the most undervalued sectors of the economy. I initiated a new position in Equinox Gold (EQX.V).
I bought the company in two tranches, first in May and the second earlier this month. I own a total of 2,000 shares with an average cost basis of C$1.05.

Recent Buy Decision

  • A company chaired by Ross Beaty, a legend in the mining sector. Ross Beaty is a serial entrepreneur, who has started, run, grown and sold a series of successful businesses over the past few decades. While the management team is young, Ross’ leadership should guide this company to a successful outcome. In addition, Ross’ first successful company was also called Equinox, and he has indicated that he wants sandwich his career with two companies with same names.
  • His success has resulted in fortunes being made by many investors and I intend to join that club with this investment. Betting on smart, successful entrepreneurs with a proven track record make this a relatively safer speculation. While Ross has built his career in the silver sector, he has turned his attention to gold on this company. Ross thinks that gold mining is more lucrative in current environment.
  • The company owns resources in US (Castle Mountain, California) and Brazil (Aurizona); while owning some other assets in other countries including Ecuador, Canada etc. In fact, last night it was announced that Equinox will spin off its copper assets to create Solaris Copper.
  • The company is on a fast track to start producing gold. Aurizona is on track to start pouring before the end of the year. The resource estimates show that this will be a producing mine for decades to come.
  • The company also intends to grow substantially to become a major mid-tier mining company via acquisitions with its $200M debt facility.
For more details, see Equinox Gold’s corporate presentation.
Full Disclosure: Long EQX.V. Our full list of holdings is available here.

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