The three securities contributing most to the portfolio last quarter were K92, Acuity Ads and Capstone Mining. Collectively, these three names added +4.5% and continue to be positions in the portfolio.

K92 is a mining company producing gold from its Cora deposit in Papua New Guinea. The Cora deposit and the surrounding area are prolific with ongoing exploration programs providing more resource ounces and production. K92 is in very good standing from a government and social perspective. The growth in production at K92 has all been accomplished within the cash-flow of the existing asset. This company continues, despite the tremendous rally last quarter (up over +70%), to be extremely undervalued as the growth in production and reserves is happening at a faster pace than the stock appreciation. K92 remains one of the portfolio’s largest holdings, as we expect much more upside when the gold rally resumes.

Acuity Ads is a programmatic advertiser. The company has seen an ever-increasing growth rate in revenue after the bottoming of the market post the COVID crash. The company has invested heavily in a self-serve advertising platform enabling companies and advertisers to “do-it-yourself”. The company is very enthusiastic about customer feedback in their beta version of their new automated advertising platform. In the coming months we expect to see a further acceleration of revenue with regards to this new platform and a wind-down of the spending associated with R&D, ultimately culminating in improved margins. We continue to hold the stock but have recently trimmed the position given the stock has appreciated over +200% in the last three months.

Capstone Mining Corp. is a copper producer. The production comes from their Pinto Valley mine in the US and their Cozamin asset in Mexico. Capstone had a tremendous move last quarter, up +75%. While copper prices helped, rising from $2.74/lb to $3.03/lb last quarter, Capstone also benefited from positive resource studies on both their Pinto Valley and Cozamin properties.

The three names detracting most from portfolio in the third quarter were Freegold, GTT Resources and Tamarack Valley. Collectively these three names cost the portfolio -2.8% in the quarter. As with the names above, the portfolio continues to hold these three stocks.

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