The junior resource stocks we’ve discovered have seen insiders buying the dip recently and adding to their positions last week during a selloff caused by coronavirus fears
SmallCapPower | March 3, 2020: Insiders are defined as company management or individuals or institutions that own more than 10% of a company’s shares. Today, we have done a deep dive into insider buying in the mining sector and have found three junior resource stocks with significant insider buying over the past week. Although the insiders we’ve identified are institutional investors, rather than a company executives or board members, they are adding to their position. The insights they would have from direct access to management as a large investor (10%+) would imply that they have done their due diligence and are making a well-informed purchase – meaning that they are buying the dip.
*Share prices as at February 28, 2020, data obtained from S&P Capital IQ
Hudbay Minerals Inc. (TSX:HBM) – $3.27
Copper
Hudbay Minerals is an integrated mining company that engages in the production of copper concentrate, molybdenum concentrate, and zinc metals. The Company has assets in North and South America, and is focused on the discovery, production, and marketing of base and precious metals. The Company owns three polymetallic mines, four ore concentrators, copper projects, and a zinc production. On February 27, 2020, GMT Capital Corp, an Atlanta-based hedge fund with US$6B in assets under management, added ~1.05M shares to its position in Hudbay. The purchase adds 0.4% to GMT’s position, bringing them to 10.7% ownership stake (27.05M shares).
- Market Cap: $854.4M
- 7-Day Return: -13.0%
- YTD-Return: -39.2%
- 90-Day Average Trading Volume: 1,360,130
Capstone Mining Corp. (TSX:CS) – $0.64
Copper
Capstone Mining is a Canada-based copper producer with three mines. The Company’s assets include Pinto Valley in the U.S., Cozamin in Mexico and Minto in Canada. In addition, Capstone has two projects under development, Santo Domingo in Chile and Kitcho in Canada. On February 27, 2020, GRM Investments, a private investment company registered in BC, added ~3.5M shares. This adds 0.9% to GRM’s position bringing them to 21.7% ownership (86.75M shares).
- Market Cap: $256.0M
- 7-Day Return: -5.9%
- YTD-Return: -15.8%
- 90-Day Average Trading Volume: 450,910
Golden Star Resources Ltd. (TSX:GSC) – $3.46
Gold
Golden Star Resources is a Toronto-based gold producer and explorer. The Company’s two flagship projects include the Wassa open-pit gold mine in western Ghana, the Wassa underground mine, and the Prestea open-pit mine and the Pressa underground project, also located in western Ghana. On February 28, 2020, La Mancha Holding SARL, a Luxembourg-incorporated private gold investment company, added ~270K shares to its position in Golden Star. This brings La Mancha’s total equity ownership to 32.1% (was 31.9%), or 35.2M shares. La Mancha Holdings became an insider on August 19, 2018, when the investment firm announced it had acquired a 30% stake in Golden Star.
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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