Deep Dive: The Next Major Gold Producer in the Making

Our largest position is a gold exploration company, Southern Cross Gold (SXGC/SXGCF). We initiated the position a couple of months ago when gold was trading near $5,000. Since then, gold has sold off roughly 20%, yet Southern Cross literally hit a new all-time high today and is now up close to 50% from our entry.

Southern Cross is not the only mining position in our portfolio to recently hit an all-time high. Faraday Copper (FDY/CPPKF) did the same roughly a month ago. Both companies reached new highs during a period of significant volatility in the underlying metals, which speaks to the quality of the assets we identified. While many mining stocks were hit hard by the broader selloff, these companies managed to power through the macroeconomic headwinds and continue outperforming. In a sector where separating exceptional assets from the rest is extremely difficult, these results are a testament to our ability to identify some of the highest-quality opportunities in mining.

We have been overweight metals and mining for the past couple of years, and we remain bullish on the sector. In this deep dive, we are covering a gold producer that recently completed a transformative transaction. We believe this company has all the ingredients to become the world’s next major gold producer. It remains significantly undervalued, is backed by top-tier investors, has a strong presence in tier-1 jurisdictions, has seen insider buying, and now has an asset base capable of supporting the next stage of its evolution under a new management team with a proven track record of creating generational shareholder value.

We believe the market is still valuing this company for what it was rather than what it is rapidly becoming. In our view, that disconnect creates the potential for 2x upside over the intermediate term.