Today we got news that one of the GP10X companies is being acquired.
It’s called Rupert Resources (OTC: RUPRF).
Today, the stock jumped 60% to reflect the bid from Agnico Eagle. I don’t recommend buying shares at this price. If for some reason, the deal falls through, you might be able to scoop up shares later for a discount, but please do not buy Rupert today after this big price spike.
Agnico Eagle is one of the best major gold miners in the world, and the number one reason for their success is the focus on high grade gold mines.
High grade gold deposits are a massive advantage and can overcome many challenges. Rupert owns the Ikkari gold project in Northern Finland.
Ikkari fits the bill for a high-grade gold project:
- 3.5 million ounces of gold in probable mineral reserves (52.0 million tonnes at 2.10 g/t)
- 4.1 million ounces in indicated mineral resources (58.4 million tonnes at 2.18 g/t)
And for Agnico, the project makes additional sense because it’s within ~30 miles of another Agnico project.
As I’ve said before, it’s always melancholy when one of my junior gold stocks gets acquired. My long-term price target for Rupert was $19.20/share. We bought at $2.63/share.
We’re getting taken out at a ~228% gain – which is fantastic. You’ll never go broke taking down triples like this.
But if we hit my fair valuation, it would have meant a 7-bagger…
There’s also a very interesting “kicker” for this Rupert acquisition, which could pay out another $3/share over the next decade. Think of it as a potential 100% special dividend that Rupert shareholders could see if Ikkari hits certain targets.
We also saw G2 Goldfields acquired on April 9th – closing out the position for a 1,500% gain – which turns every $10,000 invested into $160,000.
G2 was bought by G Mining, which owned territory nearby G2’s Oko-Ghanie Project gold project, creating one large tier 1 gold project that is projected to produce 500,000 ounces of gold per year.
We’ve had 10+ acquisitions over the past calendar year. If you scroll down and look at the newly added “Golden Portfolio Hall of Fame” graphic at the bottom of this page, you’ll see that almost all of my HOFers are acquisitions…
That’s part of the deal of investing in juniors. If they’re a great value, eventually the gold majors will notice.
And it’s okay: we have plenty of other opportunities in the GP10X service.
For instance, I just added four stocks to the portfolio on March 25. They’re all doing great: already up 11%, 18%, 12% and 60% in under a month – and they’re all still well under my target price.
It may be the case that most of these firms in my portfolios get taken over by gold majors.
Some will slip through the cracks and grow too quickly for the majors to acquire. Some will get taken out early for massive premiums.
But we’re starting to enter an era when the majors are feeling less nervous about making acquisitions. For 10+ years after the 2012 bloodbath, majors were not willing to go out on a limb.
We’re turning the corner. Gold seems to have stabilized above the $4,750 mark, which gives most gold projects a lot of leeway, and that’s helping gold majors feel a little less nervous about the future.
But look out: when these firms get greedy, we could start to see a real acquisition bonanza… You want to be on this side of that kind of market action.
As you can see from Rupert’s price action today, shares move swiftly on acquisition news.
Best,
Garrett Goggin, CFA, CMT
Lead Analyst and Founder, Golden Portfolio