The three names providing the largest negative contribution last quarter were Trican Well Services Ltd, Sherritt International Corp, and Tinka Resources Ltd. The three stocks cost the portfolio -1.61%. The three stocks that provided the largest positive contribution were Ero Copper Corp, Baylin Technologies Inc and GoEasy Ltd, adding +1.87%.

Trican Well Services Ltd is a pressure pumping company with operations largely in Canada. Despite WTI trading over $70 US a barrel, Canadian oil and gas exploration companies continue to feel pressure as differentials on both Canadian heavy and light oil have blown out. The domestic oil and gas producers have been forced to have more financial discipline as investors are forcing these companies to live within their cash flows. Although the environment has improved for the industry, fracking companies have not seen a rebound in pricing as oil and gas producers have improved their drilling efficiencies. The portfolio sold Trican Well Services last quarter.

Sherritt International is a nickel/cobalt miner whose major asset is its long-life operation in Cuba called MoaBay. Both nickel and cobalt are primary inputs for EV (Electric Vehicle) batteries. Sherritt’s stock price was down 29% in the third quarter due to lower nickel and cobalt commodity prices. Global metal prices fell on a strong US dollar, weakening China demand and international trade concerns. As we move to the fourth quarter, we expect many of these concerns to abate and expect metal prices to recover due to seasonal strength. We expect Sherritt’s stock price to improve with the higher metal prices and have added to the portfolio’s position.

Tinka is a junior exploration company developing its 100% owned Ayawilca zinc project in Peru. The company is fully funded for the next 18 months and continues to step out their drilling with a new resource update expected this November. Tinka’s stock price was down over 30% last quarter in reaction to the price of zinc falling 19% the last 2 quarters. However, zinc’s price appears to have put in a bottom as inventories remain incredibly tight. With our confidence that the fourth quarter will see a rebound in the zinc, nickel, and copper prices, we expect Tinka’s stock price to meaningfully appreciate.

1 2 3 4 5 6 7 8