Added to FSM and CDE, Sold Some Explorers

We have near full positions in CDE now, and continue to add to FSM into this decline. Will continue add here and there. We also sold some of our more risky positions as we appear to be stuck in a liquidity-driven decline, since metals and miners are getting pulled lower along with stocks, cryptos, bonds, just about everything. We are moving more to the mid-cap producers for future positions.

We sold all or partial positions in MGMLF, OCGSF, MXROF, IRVRF, STKXF, and BKRRF. Nothing changed in these explorers individual fundamentals, but we want to be holding miners already operating and producing metal. If the liquidity continues to dry up in the markets, these explorers will have to issue stock (diluting existing shareholders), which could cap the upside at this point in the cycle. We still have shares in most of the explorers, and will consider buying them back once the group starts higher again, and after we see many juniors get secondary offerings out of the way. As Rick Rule continually says, just owning the best names in a group will capture most of the upside potential if one is correct and miners are in bull mode, with much less risk, as they are already cash flow positive, something the explorers can’t use to fund their projects.

One other important consideration regarding the junior explorers, we have seen buyouts and takeovers in the group lately that have not been at substantial, or even acceptable premiums. One example, yesterday GSV, Gold Standard Ventures was taken over by Orla Mining (one of our holdings), at only a 35% premium, no doubt disappointing for GSV shareholders. So, we see potentially more risk in the junior explorers, along with limited upside if an investor is lucky enough to receive a buyout offer, and this is why we made the decision to weight more heavily in the mid-cap producers.