Overlooked “evidence” often catches our attention when analyzing stocks that are suffering through bear markets. We have found that an informative indicator can be located in the analysis of the “insider transactions” for companies. If a stock is down sharply in price, we require its officers to be buying its shares with no concurrent selling whatsoever. Insider buying by its officers was the case for Alexandria Minerals. I noted that “insider buying” upon meeting the company’s management at a gold conference.
Alexandria Minerals Corporation, symbol “AZX” is a gold exploration company that owns one of the largest and unexplored properties in the Val d’Or, Quebec, gold mining region. In our view, Alexandria Minerals qualifies as an advanced exploration company based upon their exploration success.
How are we judging its success? In 2014, Alexandria sold its 14 Claim West Zone Gold Copper property to Agnico-Eagle for $5 Million. Keep in mind that 14 claim sale represents a mere 2% of Alexandria’s Cadillac Break Property package. According to the sale’s agreement, Alexandria will also receive a 2% Net Smelter Royalty if a minimum production level is reached. Other elements of the sale were quite positive as well.
That sale of that relatively small percentage of AZX’s assets to Agnico-Eagle is of significance to us. We believe that prudent and profitable sale has given Alexandria Minerals a firm cash position in this “difficult period” in the mining industry. We also believe that the “difficult period” will be changing for the better soon.
Moreover, our technical analysis indicates that the AZX stock is being patiently accumulated during this period of price weakness. While not in a moving up mode technically-at least yet, charts indicate that solid buying on price weakness occurs when any selling occurs. Alexandria’s officers and directors are heavily invested in Alexandria with 13% of the shares; recently we have seen large purchases of the shares made by Alexandria’s officers. We also noted that they are never sellers of their personal shares.
Fundamentally, the news is quite positive. Of significance, in our view, is the fact that Alexandria has three very successful mining companies as its largest shareholders who also are major gold producers, Agnico–Eagle 9%, Iamgold 3.5% and Teck Resources 3.5%. Exploration and Drilling is ongoing…the Val D’or area remains one of the major mining areas in North America with a decades long history of huge gold production…..Alexandria’s cash position is currently $2.5 Million….Officers and directors ownership is at at a high level. The bottom line is that Alexandria merits attention and we will be following it.