Market Insights From Excelsior – Thu 1 Apr, 2021

Backing Quality Management Teams Through Backing Quality Capital Groups

Here is another article from Excelsior. He is focusing on the Capital Groups that I’m sure you all have heard or seen on certain Company websites. As much as every analyst says you need to focus on management, the truth is management extends to the group behind the scenes as well.

If any of you have articles you would like me to post leas email me at Fleck@kereport.com and I will happily read over it and post it.

Here’s Excelsior’s article!


Backing Quality Management Teams Through Backing Quality Capital Groups

By: Shad @ Excelsior Prosperity

We hear a great deal from industry experts, newsletter writers, and seasoned resource investors about the importance of backing good management teams, that have been serially successful.   The challenge is that most retail investors are not knowledgeable about which teams really are quality, which ones have the skills to execute in their designated roles, or which individuals have successful track records. As a result most have no idea which jockeys to back.

There is no magic bullet for finding the best people, but one observation to make about the resource sector is that often we see that quality capital teams are the ones that can curate the best management teams and boards of directors.  

Quality capital teams also have the ability to share synergies, talent, and expertise within their groups of companies, and also to band together in promoting their portfolio or brand of companies.    As a result, one approach that can help investors separate the wheat from the chaff regarding quality teams, is backing the companies that fall under the umbrellas of success capital groups.    There are much fewer capital groups to keep up with, and they’ve helped do some of the vetting for investors before picking up a new company, project, and team. This is just one tool amongst many to give retail investors an edge.

Here are some examples of winning capital groups that have caught my attention over the last few years, and where I personally invest in some of their portfolio of companies. 

  • Oxygen Capital Corp – (Pure Gold Mining, Discovery Metals, Liberty Gold, Northwest Copper, Frontier Gold {acquired}, True Gold {acquired})
  • Inventa Capital Corp – (Vizsla Silver, Tarchi Gold, Gold Bull Resources, Surge Copper, Iso Energy, Outback Goldfields)
  • Discovery Group – (Great Bear, Kodiak Copper, K2 Gold, Bluestone Resources, Fireweed Zinc, Elemental Royalties, Ethos Gold, ValOre Metals, Genesis Metals, Kaminak {acquired})
  • Metallic Group Companies – (Metallic Minerals, Group Ten Metals, Granite Creek Copper)
  • Crescat Capital – (Novo Resources, Lion One Metals, Irving Resources, New Found Gold, Goliath Resources, Eloro Resources, Eskay Mining, Nulegacy Gold, Precipitate Gold, Tristar Gold, White Rock Minerals, Labrador Gold, Timberline Resources, NV Gold, Defiance Silver, Kuya Silver, Rokmaster Resources, Altamira Gold, and more…)
  • Featherstone Capital – (Newmarket Gold {acquired}, Calibre Mining, Newcore Gold)
  • Lumina Group w/ Ross Beaty – (Equinox Gold, Pan American Silver, Lumina Gold, Solaris Resources, Lumina Copper {acquired}, Lumina Resources {acquired})

Investors should always do their own due diligence, but I’ve found these teams have delivered some solid success stories over the years, and are able to attract the quality teams we so often hear about.  They are able to incubate quality projects, find the right management teams, raise money more effectively, promote their companies better, and have synergies sharing some G&A expenses/technical knowledge/industry experience across their portfolio of companies. 


Comments:
  1. On April 1, 2021 at 9:59 am,
    Holy Grail says:

    Excelsior, this is exceptional information that is a tool for many investors to benefit and reducing many risks associated in investing in the resource stocks. Well done Excelsior and this is extremely helpful for anyone trying to reduce the risks and not only that profit greatly from this sector. Great job. Thank you and for your high integrity that’s not easily found today.

    • On April 1, 2021 at 10:31 am,
      Excelsior says:

      Thanks for the kind words Holy Grail.

      • On April 1, 2021 at 10:44 am,
        Holy Grail says:

        Excelsior, you deserve all of it and more with information you provided. Need to ring out all the risks as much as possible and that’s where success comes in. Increasing odds of winning and lower the odds of losing.

        Of course, nowadays you can buy fake assets and make billions. Hefty price to pay down the road though with anyone following those investing rules. That’s the world we live in though. What should be right side up, is turned upside down.

        • On April 1, 2021 at 11:03 am,
          Excelsior says:

          Much appreciated. Yes, reducing risks is just as important and seeking opportunity, and many investors only look for the bullish narratives, but don’t spend as much time researching the potential roadblocks to wealth and pitfalls to investing.

          Yes, over the last decade, but in particular over the last few years, the fundamental metrics and reality seems to matter much less, than the new fantasy narratives of many sectors and individual stocks. PE ratios are at nosebleed levels, valuations are priced for perfection or beyond, and this has flipped many tradition investing paradigms on their heads. The last few years have been some of the most wild speculative frenzies I remember seeing with the FAANG stocks, Tesla and clean energy stocks massive runs, semiconductor surges, cryptos and cannabis rallies, vaccine stocks and biotech moonshots, Unicorn IPOs, SPACs, digital art NFTs selling at record prices, and the relentless speculation in the general markets by the waves of new stay-at-home investors. It definitely reeks of late stage market froth, and the 4th Turning, and will likely end badly for many. Until then, the speculative froth will simply bubble even higher.

          We live in interesting times…

        • On April 1, 2021 at 11:04 am,
          Excelsior says:

          Much appreciated. Yes, reducing risks is just as important and seeking opportunity, and many investors only look for the bullish narratives, but don’t spend as much time researching the potential roadblocks to wealth and pitfalls to investing.

          Yes, over the last decade, but in particular over the last few years, the fundamental metrics and reality seems to matter much less, than the new fantasy narratives of many sectors and individual stocks. PE ratios are at nosebleed levels, valuations are priced for perfection or beyond, and this has flipped many tradition investing paradigms on their heads. The last few years have been some of the most wild speculative frenzies I remember seeing with the FAANG stocks, Tesla and clean energy stocks massive runs, semiconductor surges, cryptos and cannabis rallies, vaccine stocks and biotech moonshots, Unicorn IPOs, SPACs, digital art NFTs selling at record prices, and the relentless speculation in the general markets by the waves of new stay-at-home investors. It definitely reeks of late stage market froth, and the 4th Turning, and will likely end badly for many. Until then, the speculative froth will simply bubble even higher.

          We live in interesting times…

          • On April 1, 2021 at 12:01 pm,
            Holy Grail says:

            Excelsior, I wholeheartedly agree with all your comments. You speak truth. Interesting times indeed !!

            Quite frankly, I know a lot of people here are pretty successful investing in these smaller companies and startups and what have you. However, I’m looking for lots of liquidity with big chunks of capital. Unfortunately, someone would have to invest in quite a few of these companies, too many to keep track of it all. The capital groups can possibly help in that regard. Haven’t checked it out yet, although it’s a good possibility that’s why this information is really valuable. I would call this a strategy of investing based on stories and success in discovery of resources that will propel these smaller companies in some cases much higher.

            My strategy has been to buy when everything’s just being sold and there’s no sellers left in the market and it’s completely falling on his face depressed to where nobody believes in it anymore. Doesn’t matter what you buy then, everything goes up including the junk. In fact, the junk does the best. The prices get down to really low levels and the percentage gains are just phenomenal most of the time. Those rare opportunities and the liquidity is really great on your NYSE stocks including NASDAQ. The market makers are a concern with everything and they can play a lot of games. Even more so with a real small companies I was just discussing in the paragraph above.

            By the way, there’s always another train coming through the station. If one can identify where the money flows are, as far as concentrated wealth into stocks or sectors you can make fortunes in months. MJ stocks were a guarantee when the sector was really young and just barely getting off the ground. I wasn’t able to take advantage of it because I don’t believe in the product however they were trading at levels in the beginning that we’re just a small fraction of what they ended up trading at. It was too bad too, because I could have made complete fortunes. Briefly, some of the stocks were trading at 20 cents 50 cents whatever and that’s when you make all the big money. Could have sold out early and some of them were trading it at least $10 a share if not more before the top, was much higher. There’s lots of examples of this but MJ was pretty much a guarantee because you knew that they were going to light that sector on fire for a while. Then people believed in it when it was too late and really got killed on the whipsaws and bought thinking it was going to go even higher and just threw money at it just thinking out of greed.

            Doesn’t have to be gold mining shares, but anything that you can identify where the money flows are going to go into you can make fortunes. They’re out there, I’m just not looking for them. I need odds that are at least 95%. It’s a lot of work trying to identify them. Much patience required. One needs to really be careful not to sell out too early because you cut your self off when you could have made a fortune. Let profits run.

            Gold mining companies are good when they’re really depressed and nobody wants them fortunes are made but only rare opportunities. It’s a 99% or better odds however they have to be bought when they’re completely sold out and there’s no sellers left at all. You have to know when to get out too. Otherwise, you’ll never make any money. Let profits run though. That’s a trading rule and that’s what I’ve done

          • On April 1, 2021 at 2:22 pm,
            Excelsior says:

            Good thoughts Holy Grail, regarding buying unloved and washed out sectors and assets when there aren’t any sellers left, and then riding the reversion to the mean back higher again (and letting the winners run). As you stated well, it is all about positioning where the money flows will be heading next, getting in early in front of that trend, and then not overstaying one’s welcome when those sectors or stocks run to irrational levels due to predictable human herd behavior. Rinse and repeat…

          • On April 1, 2021 at 2:53 pm,
            Holy Grail says:

            Excelsior, very well said and all your words are well structured. You’re very thorough. The really big fortunes though are identifying the money flows into new innovations and getting in very early before the crowd at pennies on the dollar before they’re fairly fully valued. Lots of patience and letting your profits run. I know your fully in tune with that and just reiterating because 10,000% capital gains is not unheard of. It’s just identifying that money flow and once you’re 100% positive there’s no question about if, no second thoughts, then it’s just waiting it out. You can’t squeeze out those huge gains though without getting in right before things start to take off at the very low entry prices on that stock or sector and it could take a couple years. Maybe three or four before you actually sell. Great thoughts Excelsior and thanks for the follow-up. By the way, if you see something let me know. Thanks

          • On April 1, 2021 at 5:30 pm,
            Excelsior says:

            Thanks again Holy Grail, and yes if there are any developing trends afoot, then I’m sure we’ll be sharing them on here. Please keep us posted if you see any investing set-ups that you feel are favorable out in these wild markets.

            Many of the interesting trends of the last few years have been around Tech and Energy, and I’d imagine we’ll continue to see that continue. One area lately that has had my attention are changes in battery compositions and components. There are also advances in Hydrogen fuel cells, Vanadium redox flow batteries, Platinum and Palladium use in batteries, and even Silicon in batteries.

            I’ve recently been accumulating a company moving forward with Silicon powders for these new generation batteries called HPQ-Silicon Resources. They are partnered with another innovative company called PyroGenesis Canada that has a breakthrough technology in plasma torches. Plasma is the 4th state of matter, and the least understood or utilized, so that could show some promise. Just throwing out a few ideas there on some new developments.

          • On April 1, 2021 at 9:04 pm,
            Holy Grail says:

            Excelsior, Biden’s new green deal is now 10T. That’s what’s being proposed really stretching the rubber band here. I don’t know this sounds like crazy town now, more so, than ever. You have a lot of really good ideas in the green space and venturing off into some other areas as well sounds lucrative if you can get in early. I like the multiples getting in early just like the gold mining companies buying them when they’re just filthy dirt cheap. A little bit higher levels the multiples go down and you take more risk and you don’t make the fortunes. Making fortunes in derivatives it’s the same thing. Need to be real quick at the draw placing orders and real fast on the exit. All depends, you still don’t want to cut yourself short there again, let your profits run. Problem is, time, and time is very short on derivatives more times than not especially if you have a short term expiration that you didn’t pay any premiums for.

            Nonetheless, some very good analysis with all your ideas venturing off in these other areas. I know you’re busy so don’t worry about messaging me back. No problem though if there’s anything more and I’m just trying to fill in some blanks, if any. Never mind me, I’m just a.micro manager and a perfectionist with everything. Anytime I invest money the forensic white gloves come on discovering anything that might affect my odds. I keep them as high as they can go. 95% minimum. You can’t use stops. Good way to lose your money. If I have to use stops I have no business investing my money there’s something wrong with my analysis. Anytime you get down to 50% loss, that means you need to double your money. Then people get desperate to get their money back only to lose even more money. I know I’m not telling you anything but this is a vicious game and some of the best go down and never come back. Billions to zero.

            I think I mentioned I don’t like all this historic leverage in the system that really scares me. It wasn’t for that, I would be little bit more accommodative.

            Until that changes, as far as my micro analysis goes,.I count it as a big risk. That, I can’t overlook for the life of me because I just keep thinking about it and I don’t want to be caught in that liquidity trap. They called me crazy when the tech bubble popped near the year 2000 what a Claptrap that was. They were buying these tech companies for extreme evaluations just like now with all this fake stuff being sold and all these companies all they had was a desk and a few pens and the shares were selling for astronomical foolish evaluations. Luckily, real estate wasn’t in the bubble then it was just coming out of a for big correction so I was in real estate buying all the choice properties I could get my hands on. This is the everything bubble that’s what really scares me about this and everything’s going to get sold. Everything’s overvalued completely, it’s out of control.

            Right now, I’m going to be patient investing any money and then wait to see when this liquidity trap opens up, who knows this funny money might just keep going. To be honest with you, I expect gold shares to explode at some point. Is that, going to be now, with no liquidity trap opening up or is this going to be after the big liquidation. I have some gold equities not worried about a SmackDown and a big enough position where I’ll do really well. I just haven’t backed up all the trucks yet. Can’t do it until I see that liquidity crisis come to pass and if the gold shares react to the upside I’ll jump in buying with both hands and I’ll own gold shares up to my eyeballs.. So I’ll be watching the gold equities real closely if that happens with the liquidity crisis, that’s if it ever happens and then I’ll just jump right in. I might miss out, however, I can’t for the life me purchase anything right now. No regrets though. I’ll do it very well with what I have. THAT’S MY GRANDIOSE PLAN. Always, another train coming through the station. No worries. Thanks for the information you provide.

    • On April 1, 2021 at 4:20 pm,
      Canuckski says:

      Hey Ex, a big shout out to you for the insight! You always participate so frequently and it’s a joy to have you as a member of the Ker family.
      There’s been a number of writers sharing this wisdom through the years, but rarely do I recall one of them listing so many of their preferred picks.
      I’ll also note that enjoyed the post being short and snappy, so it easily kept my attention.
      Kudos to you man. Keep it up and I look forward to reading more of them if they come our way.

      • On April 1, 2021 at 5:10 pm,
        Excelsior says:

        Hey there Canuckski. I appreciate that feedback and enjoy sharing ideas with the KER crew here. Glad you liked it being “short and snappy” and actually thought of your comments to me last time I did a piece,, about making the next one a bit shorter.

        Hopefully, I can get more organized and send in 1-2 written editorials per week moving forward, and may do one on the royalty companies next week, like we had discussed previously.

  2. On April 1, 2021 at 10:13 am,
    David says:

    Printed it for my “notes” folder. Thanks

    • On April 1, 2021 at 10:24 am,
      irishtony says:

      Hi Shad That is really sound advice, that You just passed on to others…..
      Your a diamond geezer….HaHa

      • On April 1, 2021 at 10:41 am,
        Excelsior says:

        Thanks IrishT. A diamond geezer is the nicest thing I’ve been called in a long while. 😉

        I wish someone would have shared information like this with me over a decade ago, but instead got scrapes and bruises in the school of hard knocks, betting a crappy management teams, lifestyle companies, and teams that overpromised and under-delivered. Betting on quality capital teams doesn’t mean every company they have will do well, but it shows another level of vetting of the projects & teams, gives them a bigger market reach, allows the sharing of technical expertise amongst their teams, and sets up better odds for success. Cheers!

        • On April 1, 2021 at 11:14 am,
          irishtony says:

          Hi Shad….I have watched you grow for a long time here at the KER.
          You worked hard at honeing Your skills & learing Your trade , to get to where You are today…..You deserve the rewards , that You enjoy….. Dont ever stop learning.

          • On April 1, 2021 at 11:29 am,
            Excelsior says:

            Much appreciated sir. Yes, we are all works in progress and learning every day.

            As the saying goes… “When you’re green you grown, when you’re ripe you rot.”

            Each day I realize how much more there is to still learn, and that is why this site is so valuable, where so many smart contributors share their insights and various perspectives, making us all better informed here at the KER.

          • On April 1, 2021 at 2:23 pm,
            OOTB Jerry says:

            Ditto Ex….. on…. always learning…….and sharing……….and many smart contributors here.

          • On April 1, 2021 at 2:36 pm,
            Excelsior says:

            Thanks OOTB. Yes, we have a good group of contributors here on the blog, as well as sharp guests on the show that Cory interviews, making the KER a critical hub of insights and information, day in and day out. Ever Upward!

          • On April 1, 2021 at 2:48 pm,
            OOTB Jerry says:

            Day in and Day out………Takes a lot of energy from all the players here…

          • On April 1, 2021 at 2:50 pm,
            OOTB Jerry says:

            The mining sponsorship has GROWN…..from a handful…to what looks to be 34 paying sponsors….. Looking good to me…. 🙂

          • On April 1, 2021 at 2:54 pm,
            Excelsior says:

            +34

    • On April 1, 2021 at 10:29 am,
      Holy Grail says:

      Thanks David. Good idea. I saved it on my digital notes folder.

  3. On April 1, 2021 at 10:39 am,
    b says:

    Paypal Enables Cryptocurrency Payments at Millions of Stores With ‘Checkout With Crypto’ Launch

    https://www.sgtreport.com/2021/04/paypal-enables-cryptocurrency-payments-at-millions-of-stores-with-checkout-with-crypto-launch/

  4. On April 1, 2021 at 10:42 am,
    b says:

    Great info Ex.

    • On April 1, 2021 at 11:04 am,
      Excelsior says:

      Thanks b.

  5. On April 1, 2021 at 10:58 am,
    Dick Tracy says:

    Excelsior understands that in life and investing you should always listen to the best minds to advise you. Like he say’s those minds are always found in winning capital groups. Excelsior has the ability to discover for himself the facts of a problem and to think it through and to listen to others and in the end make a very wise decision. Well stated! DT

    • On April 1, 2021 at 11:20 am,
      Excelsior says:

      Much appreciated DT. It is important to have a good mastermind group, and consider input from various quality sources to assess any blind spots that we all have. With the winning capital teams, they have their own mastermind groups and collective brain trusts, and in general, this results in minimizing risks and better overall results.

      • On April 1, 2021 at 6:47 pm,
        David says:

        I learn something everyday.

  6. On April 1, 2021 at 11:13 am,
    David says:

    Speaking of Oxygen Capital above, I added to my Pure Gold. The price has continued to drop and they are in the middle of start-up. They reported some disappointment in grade and a few other issues with getting things off the ground. There was also some discussion of additional funding from one of the Sprott activities. I added …

    • On April 1, 2021 at 11:23 am,
      David says:

      I went back and looked at past purchases and I had picked some up back in October for $1.77 and that was preproduction. I bought today at $1.146 US. Quite a drop, but resource is still there. But, do research for sure if interested.

    • On April 1, 2021 at 11:25 am,
      Excelsior says:

      It is interesting that you mention that recent pullback in Pure Gold David. They had quite an epic move higher during their “golden runway” going into production, but I trimmed back a big chunk of my position right before their first pour, as typically that is where many pull profits. In addition, most new mines have about 6-9 months of initial growing pains and kinks to work out on a new mine, and often the shares drift lower as a result. However, then a new set of buyers and institutional investors start following a company once they put out 2 or 3 quarters of production metrics, so it may be wise to start adding a bit over the next few months, to get in front of that new batch of investors. Thanks David.

      • On April 1, 2021 at 11:32 am,
        David says:

        I had decent profits and nearly liquidated…then started back late last year rebuilding. I had gotten back to the 50% point and was sitting to see how start up went. With the drop, I am I about 70% of my original share position. I am willing to wait through some start up issues as I think some of the same stuff is going on with NOVO. Moriarty was interview the other day and talked a little of his history of conducting start-ups and said it would be unusual to not have issues…all part of the game. I guess that helped me to decide whether to step back in some more.

        • On April 1, 2021 at 12:27 pm,
          RICHARD/DOC says:

          Ex, nice job; have and will always appreciate the work you put into PM stock knowledge and information. Pure gold still has further to fall —-it’s one of my stocks that I have not taken gains in but will add once it levels out.

          • On April 1, 2021 at 12:43 pm,
            David says:

            Thanks Doc. Gives me another chance to add.

          • On April 1, 2021 at 12:48 pm,
            David says:

            Doc:
            I went to the simple charts of Schwab I use and it is showing Pure Gold outside the lower Bollinger band. Do you have something similar?

          • On April 1, 2021 at 12:52 pm,
            David says:

            Also RSI of 29.1

          • On April 1, 2021 at 12:58 pm,
            David says:

            Pure gold just got dumped on. Good call Doc. 3 minutes to close and went from 8% down to almost 18% down.

          • On April 1, 2021 at 1:07 pm,
            RICHARD/DOC says:

            David, were you looking at the daily or weekly charts as regards the BBs?

          • On April 1, 2021 at 1:07 pm,
            David says:

            Might have just been someone’s brother in law…price went to 1.08, now shows 1.12 unless you go to their research area and it shows 1.18. Love it…

          • On April 1, 2021 at 1:22 pm,
            David says:

            I gave it 20 Mins: they have a price of 1.12, lower band at 1.19 and an RSI of 26.9. I’d say it’s getting pretty low. If we can get to a lower level, sounds like a buy.

          • On April 1, 2021 at 2:12 pm,
            Excelsior says:

            Thanks Doc, and I always appreciate your work and analysis as well sir.

            Yes, as for Pure Gold, I just have about 1/3 of the initial position left, but have considered adding more now that it has pulled back in a more meaningful and is getting some of the initial production startup kinks worked out. If we get some continued weakness in the sector in Q2 of this year, then I’ll probably start to add back to the position again, as they still have a great asset for mining, and quite a bit of prospective land for exploring and expanding their resources through organic growth. Cheers!

          • On April 1, 2021 at 9:04 pm,
            Excelsior says:

            (PGM) (LRTNF) PureGold Milling Facility Achieves Design Capacity, Additional Liquidity Secured as PureGold Mine Continues Ramping Up

            by @nasdaq on 31 Mar 2021

            “We are pleased by the progress of the ramp-up of the PureGold Mine to date, highlighted by the milling facilities achieving design capacity prior to quarter end. With the mill ramp-up effectively complete, we can now focus our attention solely on ramping up the mine and accessing high grade ore from multiple declines where we are making great progress,” stated Darin Labrenz, President & CEO of PureGold. “The additional US$12.5 million will ensure the PureGold Mine continues its ramp-up phase with maximum financial flexibility, whilst the remaining US$7.5 million can be accessed if needed to provide additional liquidity.”

            https://ceo.ca/@nasdaq/puregold-milling-facility-achieves-design-capacity

          • On April 1, 2021 at 9:28 pm,
            Excelsior says:

            Yep, no sooner did we discuss that most new mines have initial hiccups and challenges to tweak as they get ramped up and a slide in shares as a result, and we see the news on this out today with Pure Gold. This is how things play out at most new mines, and why I sold 2/3 of the position before first gold pour, and will be looking for more weakness over the next few weeks to start accumulating when the investor sentiment goes sour and people have over-reactions like today’s action.

            All the gold is still there in the ground, the mine is built and the company is adjusting several processes on both the mining strategy and milling process, and all the exploration potential is still there exactly the same as when the share-price and valuation was 50%+ higher. If things drop another 10%-15% then I’ll likely start adding to my Pure Gold position, for longer term appreciation, once the mine is running closer to spec.

            This article sums up the current speed bumps well, and none of it looks as bad as short term investors are reacting, and these kinds of emotional over-reactions create inefficient markets temporarily, so I’ll be looking to pounce on any silly sell-downs that show up in the next few weeks.
            ______________________________________

            Pure Gold Ramps Up Mill, Fine Tunes Underground Ops

            By: Magda Gardner, Canadian Mining Journal – April 1, 2021

            https://www.northernminer.com/news/pure-gold-ramps-up-mill-fine-tunes-underground-ops/1003829844/?ctname%3dPure+Gold+ramps+up+mill%2c+fine+tunes+underground+ops

  7. On April 1, 2021 at 1:47 pm,
    Holy Grail says:

    Higher gold price ~ Novo 👉 decided not to give out any Easter treats this year

  8. On April 1, 2021 at 1:49 pm,
    David says:

    Doc:
    Sorry I missed your post getting all excited about the closing smash. I was looking at a 6 month daily. I switched it to a 6month weekly and it showed a 1.15 lower band and 34.6 RSI. I like the daily one as more continuity 9of the candles.