Triple Flag Precious Metals Corp. (TFPM:TSX; TFPM:NYSE) announced a settlement with Steppe Gold over a stream that had not been paid for over a year. Though the agreement will see approximately 30% lower payments going forward, the positives are that Triple Flag will get the arrears paid and will get something going forward. On the back of the settlement, the company increased its full-year guidance. Steppe represents only 3% of Triple Flag's NAV.
Separately, it announced a new gold stream on the Ravenswood mine, for $440 million, continuing the moves from North American royalty companies into Australia, and the growing acceptance of the royalty/streaming financing model in that country.
Initially, Triple Flag will purchase 5.5% of the gold from the mine at 10% of spot, which will decline with higher payments after delivery targets have been met. This is a good deal, diversifying the revenue sources and increasing exposure to Tier One jurisdictions.
We are holding. Though the stock is unquestionably inexpensive here, in the context of the market right now, we prefer buying others.
Altius Joins the Big-League Index
Altius Minerals Corp. (ALS:TSX) is to join the S&P/TSX Composite Index on June 22nd, a move sure to see some additional buying from index-hugging investment firms. The Index is the premier equity index for Canada, comprising 220 of the largest and most actively traded stocks on the TSX.
In a typical self-effacing manner, founder and CEO Brian Dalton commented, "Inclusion in Canada's premier market index, amongst a humbling list of Canada's strongest public companies, represents an honor for the entire team at Altius. It is certainly fair to say that this achievement was not on our list of goals when we established Altius 29 years ago as a junior capital pool company. We would like to offer a sincere thank you to our shareholders for their long-term support and encouragement, while also pledging to continue to work hard to find ways to grow enduring value on your behalf. I would also like to personally express my gratitude and congratulations to current and former colleagues for your incredible efforts and camaraderie."
As long-time shareholders, we can only add, "thank you, Brian and the team for building a world-class company from scratch."
Altius is a core holding for broad, low-risk exposure to the entire commodities complex, with insightful management, willing to take large contrarian bets and who rarely put a foot wrong; a strong, experienced board; a healthy balance sheet; and multiple catalysts for growth in the coming years.
Though we would like to see lower prices to add, if you do not own it, then buy.
Metalla's Denouement Approaching?
Metalla Royalty & Streaming Ltd. (MTA:TSX.V; MTA:NYSE American) saw its largest shareholder, Tether International, increase its position to over 12%; the last filing was a month ago at 11%. Tether has been a steady buyer since it first reported a 5.5% position in October, with six subsequent filings each reporting an increase in its ownership.
Although Tether has reportedly approached most of Metalla's large shareholders about buying blocks of stock, most of the buying, since the initial filing, has been in the market. It is not thought that Tether has made any hostile efforts to control the company; nonetheless, its position is approaching an ownership position where it can start to demand a board seat or otherwise have a say in the company's direction (exercising its proxy rights and so on). There are rumours (reasonably well-informed, I would say), that Metalla has had informal discussions with other royalty companies, but it's not clear if any of these will progress. The company is not commenting. It is certainly not a foregone conclusion that Metalla will not remain as an independent company and continue its growth trajectory, but Tether's strong and growing share ownership adds another dimension to its plans.
Growing Revenue and Under-Appreciated NAV
We like Metalla, which is now seeing strong growth in revenues from multiple mines. It also holds royalties on some significant long-duration projects, including IAMGOLD Corp.'s (IMG:TSX; IAG:NYSE) Gosselin, adjacent to its producing Cȏté mine in Ontario; HudBay Minerals Inc.'s (HBM:TSX; HBM:NYSE) Copperworld in Arizona; and First Quantum Minerals Ltd.'s (FM:TSX; FQM:LSE) Taca Taca, another copper project, in Argentina. I do not think that Metalla is getting proper value in the market for these non-producing but long-duration royalties. It continues to trade at less than my estimate of net asset value.
In Bulletin 1009, a month ago, I called Metalla, then trading at $6.81, "a steal". Tether seems to be buying consistently every day, on a VWAP basis, rather than aggressively buying more on lower prices, so when the stock does decline, you also have the opportunity to buy at good prices with an elephant pushing you out of the way. Many of you bought significant positions after the last review of the company.
Though we would buy it here, particularly if you are underweight, we will be more aggressive on any dip below $7.
Vote in Favor of Fox Transaction
Fox River Resources Corp. (FOX:CSE) proxies have been sent to shareholders, and we urge you to vote in favor of the takeover of the company by an Agnico Eagle Mines Ltd. (AEM:TSX; AEM:NYSE) unit, prior to the transfer agent's deadline of June 19; each custodian has its own deadline ahead of this, so you should vote as soon as possible.
If you have not received a proxy, please contact your brokerage and ask them to send you the proxy or instruct them to vote in favor. Hold and vote.
TOP BUYS this week, in addition to above, include Agnico Eagle, Franco-Nevada Corp. (FNV:TSX; FNV:NYSE), Royal Gold Inc. (RGLD:NASDAQ), Pan American Silver Corp. (PAAS:TSX; PAAS:NYSE), Fortuna Mining Corp. (FSM:NYSE; FVI:TSX; FVI:BVL; F4S:FSE), Lara Exploration Ltd. (LRA:TSX.V), Orogen Royalties Inc. (OGN:TSXV; OGNNF:OTC), Midland Exploration Inc. (MD:TSX.V), and Kingsmen Creatives Ltd. (KMEN:SI).
With the gold stocks down sharply over the past two weeks, notwithstanding rallies the last two days on optimism about a U.S.-Iran deal, virtually all of the stocks on our list would be buys. But we can't call every gold stock on our list a "top buy"! So what to buy depends partly on what you already own. For example, if you do not already own OR Royalties (OR:TSX; OR:NYSE) that would be a good buy here.
| Want to be the first to know about interesting Gold, Silver and Copper investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter. | Subscribe |
Important Disclosures:
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Agnico Eagle Mines Ltd., Triple Flag Precious Metals Corp., Altius Minerals Corp., Metalla Royalty & Streaming Ltd., Fox River Resources Corp., Franco-Nevada Corp., OR Royalties, Pan American Silver Corp., Fortuna Mining Corp., Lara Exploration Ltd., Orogen Royalties Inc., and Midland Exploration Inc.
- Adrian Day: I, or members of my immediate household or family, own securities of: All. My company has a financial relationship with: None. My company has purchased stocks mentioned in this article for my management clients: All. I determined which companies would be included in this article based on my research and understanding of the sector.
- Statements and opinions expressed are the opinions of the author and not of Streetwise Reports, Street Smart, or their officers. The author is wholly responsible for the accuracy of the statements. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Any disclosures from the author can be found below. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
- This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.
For additional disclosures, please click here.
Adrian Day Disclosures
Adrian Day’s Global Analyst is distributed for $990 per year by Investment Consultants International, Ltd., P.O. Box 6644, Annapolis, MD 21401. (410) 224-8885. www.AdrianDayGlobalAnalyst.com. Publisher: Adrian Day. Owner: Investment Consultants International, Ltd. Staff may have positions in securities discussed herein. Adrian Day is also President of Global Strategic Management (GSM), a registered investment advisor, and a separate company from this service. In his capacity as GSM president, Adrian Day may be buying or selling for clients securities recommended herein concurrently, before or after recommendations herein, and may be acting for clients in a manner contrary to recommendations herein. This is not a solicitation for GSM. Views herein are the editor’s opinion and not fact. All information is believed to be correct, but its accuracy cannot be guaranteed. The owner and editor are not responsible for errors and omissions. © 2023. Adrian Day’s Global Analyst. Information and advice herein are intended purely for the subscriber’s own account. Under no circumstances may any part of a Global Analyst e-mail be copied or distributed without prior written permission of the editor. Given the nature of this service, we will pursue any violations aggressively.
