Monday, April 4, 2016

Eric Sprott Acquires 10 Million Shares Of Newmarket Gold

Newmarket Gold announced today that Mr. Eric Sprott acquired 10 million common shares of Newmarket Gold from the biggest company's shareholder, Luxor Capital Partners. Mr. Sprott paid C$2.25 per share. After this transaction Mr. Sprott holds 15,151,196 shares of Newmarket Gold (which accounts for an 8.67% stake in the company). 

In my opinion, high involvement of such a notable shareholder should be perceived as a big plus for the current Newmarket Gold's management. 
The management shares my opinion (or, better say, I share the management's opinion):

Douglas Forster, President and Chief Executive Officer of Newmarket stated: “Mr. Sprott is a renowned and respected leader in the investment community and one of the world’s premiere gold and silver investors. Newmarket is very pleased to have Eric as a larger shareholder of the Company and we appreciate his continued support as we continue to focus on creating shareholder value from our three producing gold mines in Australia.”

What is more, Mr. Sprott stated:

“Newmarket has a strong management team and Board of Directors. I am impressed with the progress that Newmarket has made with record gold production in 2015, the very positive outlook for production growth and operating cost reductions and its strong balance sheet with essentially no debt. I look forward to being a supportive shareholder and participating in the growth of the Company.”

What is really important - the shares were acquired at current market prices which supports my thesis that this company is strongly undervalued against its peers. 

Another thing, most recently the company's shares were trading at very high volume (an area in yellow):


It is highly probable that the supply was coming from investors who were selling shares redeemed from convertible debentures. However the question is who was buying these shares. If the buyers were investors of the similar investment attitude as Mr. Sprott, it would mean that now these shares are in strong hands...


  1. All I can say Mr Sprott knows a bargain when he sees one

  2. What is the history of Luxor Capital Partners ownership in Newmarket? Do they still own some shares? Thanks for all your great work Simple.

  3. Luxor still has a large stake in Newmarket Gold - around 29.2%, according to my calculations.
    As for the history - Luxor was the largest shareholder in Crocodile Gold and after amalgamation with Newmarket Gold in 2015 it became, automatically, the biggest shareholder in NMI.