Haywood Securities' Chairman, John Tognetti, has added 2.4 million shares to his position in Mirasol Resources (MRZ:TSXV) which brings his total position to over 7.9 million shares or roughly 25% of the company. Mr. Tognetti has been a supporter of Mirasol for a number of years and clearly continues to have his conviction about the company. Tognetti first disclosed his ownership in the company due to him breaching the 10% insider rule in December 2008. This disclosure showed he controlled over 3 million shares at the time some of which had been purchased for $0.115 per share. In 2012 he spent $2.4 million to participate in a $3.30 per share private placement. By my estimation his average cost is above current prices (he has bought shares as high as $7.90 per share.
Mirasol is a prospect generator focused in Argentina, Patagonia and Chile. Late in 2012 they did what very few prospect generators are able to do, and they successfully sold their Joaquin silver-gold project to Coeur d'Alene Mines for a total $30 million cash and 1.3 million Coeur shares (worth roughly $16 million by today's share price).
They recently announced a joint venture on a copper-gold prospect called Rubi in Chile to First Quantum Minerals (FM:TSX) whereby FM is earning a 55% interest by spending $6.5 million over the next four years and another 10% by deliver a PEA. Finally they can earn up to 75% by sourcing project financing for the project and paying MRZ back for the amount they fund to build the mine from 50% of cash flows.
The shares have been on steady decline with the market over the last 3 years, even though they have proven they are capable of delivering on the prospect generator model by successfully selling a project to Coeur. These successful prospect generators appear to have been taken out with the tide.
Dr. John-Mark Staude's Riverside Resources (RRI:TSXV) is another example of a successful prospect generator which is getting no love in the markets. Riverside has three successful joint venture agreements with Hochschild and Antofagasta. These stories should be perfect for a market like this because the risk profile of these quality prospect generators is low. They are typically funded, they have little or no need for equity financing, they are optioning off projects and they are able to option into excellent prospects for cheap.
Some of the smartest money in the resource business invest in these companies. Mirasol's biggest investors include Tognetti, Sprott, US Global (Frank Holmes) and AGF. Riverside investors include Sprott, Adrian Day Asset Management and the Rule Family Trust (Rick Rule).
Read: Mirasol investor Tognetti increases holding to 24.96%
Related: Riverside Resources is Being Proactive, Even in This Market
Riverside Resources is a client. This is an opinion and not investment advice. Due your own due diligence.