Member Info for Equanimity

I am reluctant to trim, with gold making all time highs every day. There will be a correction at some point, but the risk is to miss the move of lifetime underexposed. Yesterday, I found myself adding to juniors that lagged so far, like Silver Tiger and US Gold Corp. Fres is one of my core holdings. Go for the jugular.

What makes you think the company was "poorly managed" compared to its peers? I have not encountered anything pointing to that - I would not be invested here otherwise. There were headwinds for sure (mostly related to Mexica and MXN strength), which are likely to mean-revert as soon as MXN carry trade collapses. However, it has nothing to do with the management.

I am pleased to find Fresnillo close to the top:

https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fbe48993d-73bc-4492-8b07-2b23128e7116_2000x1702.png

Newmont moved >5% on Friday. FRES has to catch up.

Timing is all :)

Back to FRES, it's still doing better than peers today. Gold and silver are holding their ground. Not trimming my exposure here.

It was more about Middle East escalation concern. Both oil and the US arms manufacturers rallied. Gold quickly retraced too. The trade "long gold miners - short Magnificent 7" does great so far.

Close your shorts, friends, or your brokers will do it for you soon. :)

What 21 P/E? At the current gold, silver prices and production rate, we are talking about almost 1 billion EBIDTA, with a market cap around 4 billions. Also, don't forget about 2.2b Oz silver resources (and 38M Oz gold). If only silver resources are revalued by 1$/Oz and gold resources by $50/Oz as prices go up, we are talking about doubling the market cap from here.

If current gold/silver run is sustained, I see FRES breaking 10 pounds quite soon. It has all chances to outperform other miners because of the past underperformance due to forced seller.

With silver and gold up, while S&P and US Treasuries dropping, is the best setup for precious metals miners. Silver no longer behaves like industrial metal. I shorted Magnificent 7 for an extra spice, let's see how it goes.

Https://www.lse.co.uk/ShareChat.html?ShareTicker=FRES&share=Fresnillo&thread=361BD8B3-0869-4C6D-9979-E34A4255AB35

On Mon/29, the reasons for a jump were different.

Somehow, I believe in silver breakout and miners following this time. One of my top holdings, Avino Silver, moved 21% up yesterday. I would not touch FRES until the price reaches the 600-700 range, or even higher, depending on how silver goes. One caveat of short-term trading is occasionally missing the real move.

Fogthemogg, I hope you are kidding. 56M Oz annual silver production, with the silver price increasing from 25 to 50, gives 1.4B USD extra annual profit, before tax, etc. Also, what value would you assign to 2.2B Oz silver resources, at $50?

When the seller is finished. We had relatively high volumes since the beginning of March. What was suppressed will overshoot.

I believe the USDMXN rate has a secondary impact on Fres profitability compared to, say, the silver price (+$2 to silver AISC or less?), and it will mean-revert anyway. The JPY/MXN carry trade started in 2020 will collapse spectacularly at some point, as all carry trades did in the past. BOJ already raised its rate, and BOM already cut. That is not enough to break the inertia and start the repatriation of money just yet. However, the carry trade becomes more fragile as the new direction is set. Any exogenous shock could blow it now.

People are wired to look for reasons and causes. If the share price dropped, it must be because of this or that. Most likely it was forced selling in the illiquid market. Once selling is finished and absorbed, the share price will mean-revert back to the fundamentals. With the current market cap, only silver reserves and resources are priced at around $1.6/Oz. If silver goes up, this share will get ballistic.

With group silver AISC in the $16-18 range, and gold AISC around $1600, Fresnillo is a highly leveraged play against the metal prices. Just a few dollars move higher in silver, and a few hundreds of dollars move higher in gold would double the gross profit.

Recently, many PMs in the mining sector have been fired. When PM is fired, her holdings are first actioned inside the firm, and if no one wants them, liquidated into the market. I think this has been happening to Fresnillo recently. If we look at the last week only, the silver price moved by around $1.2, gold by around $100. These would add around 128M gross profit per year with the current rate of production, if the price changes are sustainable. FRES price declined during the week. To me, it muses as an attractive entry or adding point.

Price target depends on trading horizon and what gold/silver will do next. I think 800-1000p is quite probable in the next few months. Price will act like a coiled spring at some point.

I don't see how supporting Ukraine could be bullish for gold. It is on the border of irrelevance at this point. I could even argue that if Putin took all the territories left of the Dnipro river, it would rise geopolitical tension in Europe.

I entered the full limit at around 473. The price action has been irrational for the last few days. Gold is making all time highs daily, silver is at 24.5. Moreover, the stickiness of the gold price demonstrates it is forming a new base above 2100 and likely to break higher. This should eventually be reflected in the share price.

The stock has not been reacting to the silver/gold price for the last few days. Quite unusual for the company of Fresnillo size. Perhaps, an idiosyncratic selling pressure. Once the seller is out, it may go up faster than peers.

This could play some role too. Egypt secures $8bn IMF deal after removing currency controls - https://on.ft.com/432uV3Z via @FT