2010 was a good year to be in mining stocks. Our Mining Top for 2010 ended the year at +45.73%, outperforming the S&P index by +33.03%. It’s now time to give you our opinion about the stocks we recommended a year ago.
Mining Top 2010 Roundup
2010 was a good year to be in mining stocks. Our Mining Top for 2010 ended the year at
[span style=”font-size:16px;font-weight:bold;color:#66b253″]+45.73%[/span]
, outperforming the S&P index by
[span style=”font-size:16px;font-weight:bold;color:#66b253″]+33.03%[/span]
Our returns include profit takings during the year, and are all listed on the website at caesarsreport.com/portfolio
It’s now time to give you our opinion about the stocks we recommended a year ago.
Index
[one_half]
[three_fourth]
1. Iron Ore Holdings
2. Churchill Mining Plc
3. BC Iron Ltd.
4. Tiger Resources
5. Metanor Resources
6. Copper Mountain Mining Corp.
7. Hawthorne Gold Corp.
8. Citigold Corporation Ltd.
9. Resource Generation
10. Polo Resources
11. Baja Mining Corp.
12. European Nickel Plc
13. Cortona Resources Ltd.
[/three_fourth]
[one_fourth_last]
A$ 1.650
£ 95.00p
A$ 1.300
A$ 0.190
C$ 0.560
C$ 2.080
C$ 0.340
A$ 0.140
A$ 0.400
£ 3.77p
C$ 0.720
£ 8.50p
A$ 0.145
[/one_fourth_last]
[/one_half]
[one_half_last]
[three_fourth]
14. First Uranium Corp.
15. Mosquito Cons. Gold Mines Ltd.
16. Hathor Exploration Ltd.
17. Geovic Mining Corp.
18. U.S. Silver Corporation
19. Altona Mining Ltd.
20. FerrAus Ltd.
21. Spanish Mountain Gold
22. Andean American Mining Corp.
23. Avanti Mining Corp.
24. Serengeti Resources Inc.
25. Fission Energy Corp.
[/three_fourth]
[one_fourth_last]
C$ 2.190
C$ 0.95
C$ 1.750
C$ 0.610
$ 0.170
A$ 0.019
C$ 0.66
C$ 0.255
C$ 0.365
C$ 0.180
C$ 0.280
C$ 0.16
[/one_fourth_last]
[/one_half_last]
[divider_top]
[dropcap4]1[/dropcap4]
Iron Ore Holdings Ltd.
[one_sixth][span style=”font-size:22px;color:#66b253″]+36.50%[/span]
[/one_sixth]
[five_sixth_last]
IOH actually did do, exploration wise what we expected them to do, and even over delivered. We officiously expected them to reach half a billion tonnes of Direct Shipping Ore, but right now our total resource estimate stands at 647Mt at 58% Fe-content.
However, there were quite a few negative points this year. The company failed to ink a deal with Rio Tinto on the Iron Valley project, and subsequently, the mine gate sale agreement on the much smaller Phil’s Creek fell through, and CEO Matt Rimes disappeared magically. We were actually counting on Phil’s Creek for IOH to obtain cashflow to explore their other projects. Without this internal funding, we fear more dilution in 2011.
Conclusion
Despite the exploration success, we were quite disappointed in IOH this year as the company failed to monetize any of their assets. We will however, include them again in our Mining Top for 2011.
[/five_sixth_last]
[divider_top]
[dropcap4]2[/dropcap4]
Churchill Mining Plc
[one_sixth][span style=”font-size:22px;color:#66b253″]+33.60%[/span]
[/one_sixth]
[five_sixth_last]
Churchill Mining (finally) released their Feasibility Study in September, and it was quite a disappointment. CapEx threefolded to over 1.5B dollar, and the cash costs per tonne almost doubled to 27.5USD/tonne.
There however were also positive points, as the company is finalizing discussions with several interested parties, which could ultimately lead to a takeover offer, or a Joint Venture deal.
Conclusion
Coal is still hot in Asia, and there are several value creating outcomes possible from the bidding process. We will however not include Churchill Mining in our Mining Top for 2011.
[/five_sixth_last]
[divider_top]
[dropcap4]3[/dropcap4]
BC Iron Limited
[one_sixth][span style=”font-size:22px;color:#66b253″]+62.31%[/span]
[/one_sixth]
[five_sixth_last]
BC Iron did exactly what we expected, and is even on schedule to start their iron ore exports.
Conclusion
Because of the relatively short LOM, and because it’s unlikely they’ll add new resources on the project, we will not include them again in our Mining Top for 2011.
[/five_sixth_last]
[divider_top]
[dropcap4]4[/dropcap4]
Tiger Resources
[one_sixth][span style=”font-size:22px;color:#66b253″]+131.6%[/span]
[/one_sixth]
[five_sixth_last]
Despite the negative perception of the DRC, Tiger still performed well over the past year, thanks to the current copper price. The company is also still on track to start commercial production in spring 2011.
Conclusion
Tiger performed really well. There is still upside left, but we won’t list them in our Mining Top for 2011 again.
[/five_sixth_last]
[divider_top]
[dropcap4]5[/dropcap4]
Metanor Resources
[one_sixth][span style=”font-size:22px;color:#a9000f”]-18.75%[/span]
[/one_sixth]
[five_sixth_last]
We weren’t very pleased to see that they maintained their focus on exploring the Barry-project instead of rehabilitating the Bachelor Underground mine. Bachelor Underground may have been delayed, but it hasn’t been cancelled, and we feel the market is now underrating them, as they are only trading at $40/oz.
Conclusion
Although we placed question marks at the strategic approach of the management, we will include Metanor again in our Mining Top for 2011, as we feel there still is considerable upside.
[/five_sixth_last]
[divider_top]
[dropcap4]6[/dropcap4]
Copper Mountain Mining Corporation
[one_sixth][span style=”font-size:22px;color:#66b253″]+72.60%[/span]
[/one_sixth]
[five_sixth_last]
They also behaved exactly as any company in construction phase should behave. They are still planning to start production somewhere around half 2011.
Conclusion
There still is upside potential at Copper Mountain, certainly with current copper prices, but not enough to guarantee them a place in the new list.
[/five_sixth_last]
[divider_top]
[dropcap4]7[/dropcap4]
Hawthorne Gold Corp.
[one_sixth][span style=”font-size:22px;color:#a9000f”]–52.90%[/span]
[/one_sixth]
[five_sixth_last]
The biggest disillusion of the past year. Despite promising production ‘within the next six months’ since april 2009, they haven’t done a single thing right. Although management was a key factor to list them in our Mining Top last year, we just cannot believe anymore that they’ll reach their proposed targets.
Conclusion
We will not include Hawthorne in our Mining Top for 2011, as we just cannot trust them.
[/five_sixth_last]
[divider_top]
[dropcap4]8[/dropcap4]
CitiGold Corporation Ltd.
[one_sixth][span style=”font-size:22px;color:#a9000f”]–14.30%[/span]
[/one_sixth]
[five_sixth_last]
Another big disappointment. Management never reached any of their proposed targets, so we were deeply disappointed.
Conclusion
Although the proposed Joint Venture could mean substantial progress for the company, we feel like we can’t rely on their targets anymore. CitiGold will not be included in our new Mining Top, as we prefer to stand on the sidelines for now.
[/five_sixth_last]
[divider_top]
[dropcap4]9[/dropcap4]
Resource Generation
[one_sixth][span style=”font-size:22px;color:#66b253″]+34.70%[/span]
[/one_sixth]
[five_sixth_last]
They delivered what they promised. They moved to a 74% ownership of the Ledjadjaproject, and were even able to close a few offtake agreements for their BoikarabeloCoal project.
Conclusion
The company made substantial progress in 2010, and we still believe they won’t disappoint us in 2011. Therefore, the company will again be in our Mining Top for 2011.
[/five_sixth_last]
[divider_top]
[dropcap4]10[/dropcap4]
Polo Resources
[one_sixth][span style=”font-size:22px;color:#66b253″]+40.32%[/span]
[/one_sixth]
[five_sixth_last]
Polo didn’t disappointed us in 2010.
Conclusion
As they distributed most of their cashposition in a special dividend to their shareholders, we don’t think there is much upside potential left, and therefore will not include Polo Resources in our next list.
[/five_sixth_last]
[divider_top]
[dropcap4]11[/dropcap4]
Baja Mining Corp.
[one_sixth][span style=”font-size:22px;color:#66b253″]+51.39%[/span]
[/one_sixth]
[five_sixth_last]
Baja was able to close the financing for their Boleo project, and is starting construction. We anticipate first copper sales in 2013. However, the company closed a large bought deal offering, which diluted all shareholders.
Conclusion
We absolutely didn’t like the dilution, and will not include them again in our next Mining Top. We however acknowledge the management did a great job in securing funding for Boleo.
[/five_sixth_last]
[divider_top]
[dropcap4]12[/dropcap4]
European Nickel Plc
[one_sixth][span style=”font-size:22px;color:#a9000f”]–37.83%[/span]
[/one_sixth]
[five_sixth_last]
ENK had a difficult 2010. Forestry permits were revoked, and the company is now waiting till they’ll be re-issued, but isn’t counting on them before the parliament elections in May, and has therefore put Caldag on care and maintenance, and is fasttracking the Acoje Feasibility Study, in which they now hold 80% through acquiring ASX-listed Rusina Mining NL.
Another encouraging factor is that they can count on the support of Hunter Dickinson, one of the most influential groups active in the mining business. Their support was – and is – extremely important for ENK.
Conclusion
Although we hoped to have our forestry permits reissued by now, we will continue to list European Nickel in our Mining Top, as the company doesn’t get enough appreciation from the market now. ENK will again be in our Mining Top for 2011.
[/five_sixth_last]
[divider_top]
[dropcap4]13[/dropcap4]
Cortona Resources Limited
[one_sixth][span style=”font-size:22px;color:#66b253″]+31.00%[/span]
[/one_sixth]
[five_sixth_last]
Cortona had an interesting 2010, as they released a steady flow of drill results and a new feasibility study. We are currently also waiting on their new updated resource estimate.
Conclusion
Cortona made us a few bucks in 2010, but will not be included in the Top for 2011. We would like to thank MD Peter van der Borgh, as he was always willing to answer our questions.
[/five_sixth_last]
[divider_top]
[dropcap4]14[/dropcap4]
First Uranium Corporation
[one_sixth][span style=”font-size:22px;color:#a9000f”]–39.27%[/span]
[/one_sixth]
[five_sixth_last]
First Uranium also had a troubled 2010. However, they managed to fight their way through the problems, and since they installed a new management team, we feel confident they will leave the past behind.
Conclusion
First Uranium really worried us during the summer, but gained back some ground in the last few months. We are curious what management will achieve in 2011, and will include them again in our Mining Top for 2011.
[/five_sixth_last]
[divider_top]
[dropcap4]15[/dropcap4]
Mosquito Consolidated Gold Mines Ltd.
[one_sixth][span style=”font-size:22px;color:#66b253″]+19.50%[/span]
[/one_sixth]
[five_sixth_last]
After a furious start, Mosquito had a rather boring year, and is now waiting for an updated resource estimate to come out in March 2011.
Conclusion
As we are starting to fear Mosquito will be too big for the global moly-market, we will not recommend them again in 2011.
[/five_sixth_last]
[divider_top]
[dropcap4]16[/dropcap4]
Hathor Exploration Limited
[one_sixth][span style=”font-size:22px;color:#66b253″]+58.43%[/span]
[/one_sixth]
[five_sixth_last]
Hathor did exactly what we expected them to do, they continued to bring out excellent drill results, and their resource base grew substantially.
Conclusion
Despite their great year, we will not cover them again in 2011.
[/five_sixth_last]
[divider_top]
[dropcap4]17[/dropcap4]
Geovic Mining Corp.
[one_sixth][span style=”font-size:22px;color:#66b253″]+23.77%[/span]
[/one_sixth]
[five_sixth_last]
Geovic behaved well, till last week, when they announced the expected capital expenditures for the Nkamouna Cobalt Project will come in much higher than expected.
Conclusion
The higher capex, will cause the Internal Rate of Return to drop. We personally have sold our entire position in Geovic Mining, and will not cover them again in the Mining Top for 2011.
[/five_sixth_last]
[divider_top]
[dropcap4]18[/dropcap4]
U.S. Silver Corporation
[one_sixth][span style=”font-size:22px;color:#66b253″]+54.41%[/span]
[/one_sixth]
[five_sixth_last]
US Silver successfully reopened their Galena shaft, and was profiting from the recent strength in the silver price. When we look back at the chart, we sold them too early.
Conclusion
US Silver now is trading at a fair valuation, so we will not include them again in our Mining Top.
[/five_sixth_last]
[divider_top]
[dropcap4]19[/dropcap4]
Altona Mining Ltd. (Previously Universal Resources)
[one_sixth][span style=”font-size:22px;color:#66b253″]+72.05%[/span]
[/one_sixth]
[five_sixth_last]
Altona started to rise in the second half of 2011 on a rising copper price, and the plans to restart production on their Finnish project.
Conclusion
Altona Mining did a great job, but we have sold our stock, and they will not be recommended to hold in 2011.
[/five_sixth_last]
[divider_top]
[dropcap4]20[/dropcap4]
FerrAus Limited
[one_sixth][span style=”font-size:22px;color:#66b253″]+45.80%[/span]
[/one_sixth]
[five_sixth_last]
FerrAus ticked another few boxes, and even received a takeover-offer from Hong Kong-listed Wah Nam, but the directors unanimously recommended to reject the offer.
Conclusion
Although 2011 could be a pretty exciting year for FerrAus, we’d rate them as a ‘HOLD’ now, and will not be one of our 25 top picks for next year. They were on the shortlist, but didn’t make it to the final ranking.
[/five_sixth_last]
[divider_top]
[dropcap4]21[/dropcap4]
Spanish Mountain Gold (Previously: SkyGold Ventures)
[one_sixth][span style=”font-size:22px;color:#66b253″]+104.9%[/span]
[/one_sixth]
[five_sixth_last]
Spanish Mountain almost tripled this year, thanks to the higher price of gold. The PEA on the Spanish Mountain project however, was worse than we expected. CapEx was almost twice our expectations, and cashcosts also came in higher than expected, and the company does not meet our minimum standards regarding economical rendability of the project. The company is however still cheap based on the EV/oz in ground-valuation.
Conclusion
Spanish Mountain Gold will not be recommended in our Mining Top 25 for 2011.
[/five_sixth_last]
[divider_top]
[dropcap4]22[/dropcap4]
Andean American Gold (Previously: Andean American Mining Corp.
[one_sixth][span style=”font-size:22px;color:#66b253″]+91.10%[/span]
[/one_sixth]
[five_sixth_last]
After a rather boring first half of 2010, Andean finally got under steam in the second half, almost tripling to C$1.00. Although being promised by the end of last year, financing isn’t expected anytime before Q2 2011.
Conclusion
Andean American didn’t make it to the Top for next year.[/five_sixth_last]
[divider_top]
[dropcap4]23[/dropcap4]
Avanti Mining Corp.
[one_sixth][span style=”font-size:22px;color:#66b253″]+72.90%[/span]
[/one_sixth]
[five_sixth_last]
We feel Avanti was the company who made the most progress during 2010. Under the reign of CEO Craig Nelsen, the company brought out an updated partnership, and even found potential partners to develop the worldclass Kitsault Molybdenum project. It’s a shame the market still doesn’t realize the value of Avanti, which could be able to build the mine without any further dilution.
Conclusion
Avanti Mining will definitely be in our Mining Top for 2011, and will gain some places in the ranking.
[/five_sixth_last]
[divider_top]
[dropcap4]24[/dropcap4]
Serengeti Resources Inc.
[one_sixth][span style=”font-size:22px;color:#66b253″]+14.30%[/span]
[/one_sixth]
[five_sixth_last]
Serengeti didn’t really do much in 2010, so there isn’t much news to mention.
Conclusion
Serengeti Resources will not be in our Mining Top for next year.
[/five_sixth_last]
[divider_top]
[dropcap4]25[/dropcap4]
Fission Energy Corp.
[one_sixth][span style=”font-size:22px;color:#66b253″]+256.35%[/span]
[/one_sixth]
[five_sixth_last]
Fission did exactly what we expected them to do. This actually was a pure ‘nearology’-game, but it has paid off. After they struck Uranium mineralization, the stockprice seven folded. We are out with a gain of 256%, and that actually makes Fission our biggest winner from the Mining Top 25.
Conclusion
Fission peformed extraordinarily well, and will not be included again.
[/five_sixth_last]
[divider_top]
Those that do not re-enter the top 25 for 2011 are off the list because they either hit or exceeded our 2010 targets, and upside is now limited, or because they fell short of our expectations and we now have better candidates for growth.
[divider]
Index
[one_half]
[three_fourth]
1. Iron Ore Holdings
2. Churchill Mining Plc
3. BC Iron Ltd.
4. Tiger Resources
5. Metanor Resources
6. Copper Mountain Mining Corp.
7. Hawthorne Gold Corp.
8. Citigold Corporation Ltd.
9. Resource Generation
10. Polo Resources
11. Baja Mining Corp.
12. European Nickel Plc
13. Cortona Resources Ltd.
[/three_fourth]
[one_fourth_last]
A$ 1.650
£ 95.00p
A$ 1.300
A$ 0.190
C$ 0.560
C$ 2.080
C$ 0.340
A$ 0.140
A$ 0.400
£ 3.77p
C$ 0.720
£ 8.50p
A$ 0.145
[/one_fourth_last]
[/one_half]
[one_half_last]
[three_fourth]
14. First Uranium Corp.
15. Mosquito Cons. Gold Mines Ltd.
16. Hathor Exploration Ltd.
17. Geovic Mining Corp.
18. U.S. Silver Corporation
19. Altona Mining Ltd.
20. FerrAus Ltd.
21. Spanish Mountain Gold
22. Andean American Mining Corp.
23. Avanti Mining Corp.
24. Serengeti Resources Inc.
25. Fission Energy Corp.
[/three_fourth]
[one_fourth_last]
C$ 2.190
C$ 0.95
C$ 1.750
C$ 0.610
$ 0.170
A$ 0.019
C$ 0.66
C$ 0.255
C$ 0.365
C$ 0.180
C$ 0.280
C$ 0.16
[/one_fourth_last]
[/one_half_last]
[divider_top]
