Investors seeking a passive way to play the out of favour junior resource sector ought to take a look at Kobex Minerals (TSXV:KXM), a firm with some impressive backers which trades for less than its current cash breakup value.
On Friday, Kobex announced intentions for a Change of Business, evolving from a mineral exploration play to an investment company focused on the resources sector. It simultaneously announced that it had purchased $5 million worth of Mountain Province Diamonds stock in a private placement and said that Kobex still holds $28 million in cash.
Kobex has a current market capitalization of roughly $25 million, about $8 million less than its current break up value.
The reason you should care about this cash pile is because respected natural resources investor, Mr. Paul van Eeden, controls close to 10% of Kobex. Mr. van Eeden is known for his exceptional timing, selling his financial newsletter to Brent Cook in 2008 prior to the global economic crisis. Sources tell us Mr. van Eeden has been largely on the sidelines of the natural resources markets throughout the tumultuous period that followed.
Sprott USA Chairman Rick Rule is also a large shareholder of Kobex. Both Mr. van Eeden and Mr. Rule will be speaking at Sprott’s upcoming Vancouver conference (July 22-25, 2014 here).
Kobex Minerals will also be changing its name to Kobex Capital Corp as part of the proposed re-organization, and has disposed of its Yukon Territory exploration properties.
Phil du Toit, a mining engineer who consults for Mr. van Eeden, is the acting CEO of Kobex, and a very good guy we have shared beers with several times.