CRUXinvestor IMHO #1 – Weekly Round Up of Our Interviews

CRUXinvestor IMHO #1 – Weekly Round Up of Our Interviews

Hello everyone. I’m back from my trip to
Canada. I was in Toronto last week had a great time. Met a bunch of companies. I want
to talk today about one of them which was RNC minerals. I took the opportunity
to meet with Paul Huet. He’s the new CEO there. It’s a company that we’ve been
interested in previously and then kind of stepped away a bit because there’s
some things going on which didn’t quite understand. But I am intrigued by Paul’s
background, his story and some of the things I’m hearing. So took the
opportunity met with him last week. What do I make of him. Seems a genuine guy. Seems
really passionate about what they’re doing there. He’s got a good track record
with Klondex. Quite like that back story and he’s a gold guy
and they’re focusing on gold. So he’s been through a review he tells me and
quickly assessed what they had didn’t have. I think that’s interesting in itself. And
make some changes. So in the last 60 days he’s added to the management team.
Graham Sloan’s obviously there. And he’s brought on a couple of his guys. Greg
Harvey and Callum Wynn to look at Beta Hunt and Higginsville mining operations
respectively. So I like the fact that there’s this real focus on gold. That’s
not to say that the Dumont nickel story isn’t important. It is. But we’ll talk
about that in a bit. Paul himself I think he’s had a bit of a shaky start. I think
he kind of got caught out with the investor a call with regards to the
fundraise. He could have handled that a lot better, but as I’ll talk about in a
minute I’ll tell you why I don’t think that matters. I mean please tell me if
you think it does and why. I’m interested in your views and your comments. I want to talk about
the fact that they’re in production. They’ve got the two producing assets.
They have put it through their own mill. The Higginsville acquisition was quite
contentious to say the least. The chat rooms and forums were going berserk. But
I think that’s now starting to look quite cheap, so averaging 8,000
ounces per month for last two months. Looks like they’ll get that sort of average moving forward. So that’s kind of intriguing.
Also some talk about them spending some money to work out if they
can increase the throughput of Higginsville plant. And will be interesting to see if that going to be
25% more, 50% more, 100% more. And there’s going be a cost to that. And
we want to know how they’re going to finance that. Because no one wants
anymore dilution. But maybe that might be an acceptable reason for doing so.
Paul says they’re looking forward to producing their first 2P Maiden
Resource. I’m not quite sure the timing on that one, but I think that would be
good for the company. Also we’ve been talking about
cost-cutting, cost-cutting measures. Now that’s pretty much comes hand-in-hand
with the team they’ve put in place in Australia with Graham Sloan. I think
that’s important that they look at the processes in place at the moment.
Look at how they’re spending the money. Where they’re focusing their money.
Again we’d love to see some guidance as to how that’s going.
I said we talked about the fund raise the $18M. My view, and some
of you who work in contact with me at the time asking me for my opinion, will
know that I said I thought the company needed that to happen.
It needed to happen because it’s going to give it a cash to allow it to move
forward at pace. Otherwise you’re going get the sedentary type stagnation or
lack of growth which given what’s happening with gold at the moment,
I think is really really important. So being able to ramp things up quickly. I
think that’s good for shareholders. The warrant component, again I can see why
that might have been necessary and I think one or two of you
we’re discussion with me, and disagreed with me on that. I could see that
happening. In fact it was a half-warrant iI was only haln the end, so I was only half right. That’s got to be in place. It”s allowing them I think to attract the right sorts
of institutional investors, otherwise you’re going to get people shorting the
stock. And there’s been enough of that kind of fun and games going on from what
I’ve seen over the past few months. So we don’t want that. And let’s talk about
cost-cutting. They need to renegotiate some of these royalties that they’ve
inherited along with the with the project they bought. They’re not good. I
think that they can do better. And they need to know get in there and
do something about it. Also at the same time let’s talk about
the current vendor contracts they may have a place. Get in there and look
at those too. They may not be fit for purpose anymore. And finally G&A. Always vG&A. Companies of this size need to look at their overheads. they’ve got offices in
Toronto and Australia, obviously with Dumont as well going on. There’s a lot of
cost going on. Can they do more. Can they do it for a less. Big question. Don’t know
the answers to that. Very keen again to see the guidance for that for the next in
the next coming months. And let’s talk about the ASX listing. Do I think it’s a
good idea? What do you think it’s a good idea? The people I’ve been speaking to in
Australia are unable to give me an example of where it’s worked taking a TSX
company and also co-listing it on the ASX, especially with gold. I could be
wrong but let’s see how that plays out. The company again has got some big
decisions to make around that. And of course there is Dumont. I keep hearing this
phrase, ‘and you get Dumont for free’. I don’t know what that means.
I don’t like it. What I want to hear from the company is ‘what are they gonna do to
monetize this for shareholders’. It’s got a NAV of nearly a billion bucks. It’s
going take a lot of money to get this thing into production. It’s a huge asset.
It’s got real value for shareholders. So let’s hear from the company what they’re
going to do. What do you think they should do? So those are my views. You
don’t need to agree with them. Or you can agree with them, but let me know in
the comments section below. We love to hear from you, and I will get
back to every single person who comes back to me. Obviously this will be on
Twitter and I guess the CEO guys will also have their views. I look forward
to hearing from you all. Until next time.

Danny Hutson

2 thoughts on “CRUXinvestor IMHO #1 – Weekly Round Up of Our Interviews

  1. Hi Crux investor and thank you for this update! Did you get a sense of what the ASIC looks like at today's production and where they are aiming to get? Overall this is an interesting company with exposure to both Nickel and Gold 😀 Also wonder if you have an update about the 16 level mining due to the chance of high grade hit 🙂

  2. Bullish story with healthy skepticism. But, need follow through and come down with a case of short-termism, or have a habit of stomping on the little guys (retail investors).

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