Now that it has been established how necessary the Lockdown was, one can appreciate being allowed out in the open air even more than before. When you add in the Russian Roulette of train strikes et al, a day without disruption when you can meet and talk to small cap companies, and be eyeball to eyeball, is particularly sweet. What I was reminded of this week is that with this space it really does require management who have “been there, done that”, are leaders in their field, and those who put in the hours, that will prevail in current markets.
First Class Metals:
I met the management of First Class Metals (FCM), and here the contrast between the impression I had previously – from interviewing the company, to where it actually is was quite stark. Marc Sale, CEO, has an education and CV in mining which is jaw-dropping, and to bring that to the table at FCM is certainly a highlight for shareholders. The key here will be proving up projects for the majors to then acquire, and for this the management is fully up to the task. The shares listed on the main market of the LSE last summer, and the directors have decent skin in the game. Any dip towards the 10p IPO level has to be regarded as an attractive entry point, especially given the Ontario, Canada focused company has made since then, with a highlight the double digit gold assay from Hemlo last month.
In a similar space I met and attended a presentation of Barton Gold (ASX:BGD), organised by NR Private Market. Here, once again, the CEO Alexander Scanlon, is someone who I have interviewed previously, but face to face is a different ball game. Apart from him having studied at both Oxford and Cambridge, the gold exploration company is based on a 1.1Moz Au JORC mineral resource, with a pipeline of projects in South Australia. But as in the case of First Class, it is meeting the company which really gives one the understanding and the feel for its potential.
The third of my meetings to mention here, in a busy week, was with Arrow Exploration (AXL). This is a company I have interviewed a couple of times previously, and charted on several occasions. What struck me just before interviewing AXL the first time was reading up on the board. This seemed to me more appropriate to a FTSE 250 company than a small cap. I am sure this will prove to be the case. Marshall Abbott and the team, are among the most solid I have met in over 20 years of writing about the small caps space. That the share price is currently not far where it was a year ago, with all the progress made since then, seems like a great aberration for those not currently in the stock.
The week finished off with a company in Ajax Resources which I would imagine only the stock market cognoscenti are currently aware of, but I would imagine this state of affairs will change soon. I say this on the basis of the following key points which investors tend to like with small caps. They are, in no particular order: credible high profile investors (Aidan O’Hara with 6.49%), management with skin in the game (the CEO has 22%), relatively few shares in issue (46.9m), a main market listing on the LSE, a heavyweight Non-Executive Chairman, and a company ready to pounce on the best opportunities in new energy or natural resources. Given that the stock is so tightly held it is not surprising that having listed at 4p last April, they are still well over double this share price now. It is not too difficult to imagine the direction of flow here. I interviewed CEO Ippolito Cattaneo on Friday.
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