"Investing is the intersection of economics and psychology,"
according to Guru
, legendary value investor of The Baupost Group, and there is no
more exciting theater for both than that of a possible gold rush,
well-known in Alaskan history. Klarman is investing in companies
that own and know Alaska's Donlin Creek area, one of the largest
known undeveloped gold deposits in the world. Novagold Resources
and its spinoff NovaCopper
are on his buy list.
North to Alaska and Beyond
Here's a look at Klarman's precious metals and mining action from
his fourth quarter portfolio ending Dec. 31, 2012.
Novagold Resources. Inc.
Novagold Resources. Inc. is a precious metals company engaged in
the exploration and development of mineral properties in Alaska
and British Columbia. As of quarter ending Dec. 31, 2012, Guru
Seth Klarman owns 21,688,300 shares of NG, valued as $98 million,
and accounts for 3.2% of his equity portfolio. Klarman added his
positions in the Sep. 30, 2012 quarter by 31.25%, again in the
Dec. 31, 2012 quarter by 3.28%.
Incorporated in 1984 under the Companies Act (Nova Scotia),
Novagold Resources Inc. has a market cap of $935.94 million; its
shares are traded at around $4 with a P/E ratio of 136.8 and P/S
ratio of 3022.9. Novagold Resources Inc. had an annual average
earnings growth of 22.5% over the past 10 years.
Novagold Resources is focused primarily on gold properties, along
with significant copper and silver resources. The company's
properties include among others a 50% stake in Donlin Creek. As
one of the largest known undeveloped gold deposits in the world,
the Donlin property is said to have 31.7 million ounces of gold
and additional inferred resources of 4.2 million ounces of gold.
The company also has stakes in additional gold and copper
reserves in Alaska and British Columbia. Significant competition
exists for the acquisition of properties producing or capable of
producing gold or other metals.
His holding history:
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NovaCopper Inc. (
A spinoff of Novagold Resources, NovaCopper Inc. (
), explores the Ambler District, a high-grade
copper-zinc-lead-gold-silver property in Northwest Alaska. A base
metals exploration company incorporated in 2011, NovaCopper Inc.
has a market cap of $84.9 million; its shares are traded around
As of quarter ending Dec. 31, 2012, Seth Klarman owns 5,005,298
shares of NCQ, valued as $9 million, and accounts for 0.29% of
his equity portfolio. Klarman added his positions in the Sept.
30, 2012 quarter by 46.02%, again in the Dec. 31, 2012 quarter by
His holding history:
The prospect of discovering gold plays on human emotion more than
any other quest. But Klarman once said in a Charlie Rose
interview: "If you can remember that stocks aren't pieces of
paper that gyrate all the time -- they are fractional interests
in businesses -- it all makes sense." Still, it's "North to
Alaska." Time will tell not so much if there is "Gold in Them
Thar Hills," but how much.
Here's an explanation of Seth Klarman's recent trades.About
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