Still waiting for that buying opportunity.

Contrarian Miner now stands at £132,993. Over the past week the Contrarian portfolio is up 4%, lagging the FTSE 350 Mining Index which is up 7%. So I suppose its “could do better” for me this week, but it doesn’t feel like it.

With BHP Billiton up a further 2.7% this morning despite a mixed set of quarterly production numbers, I sold the remainder of my holding (350 shares at 987p). I may well want to own these again in future, but for now I feel its the one stock that has really travelled too far too fast and there are better opportunities elsewhere.

With the proceeds (more or less) I have bought a further 60,000 shares in Altona Mining at 9.4c a share.The shares haven’t really moved at all since I bought the first tranche a month back, so I am happy this is a fine time to buy more even within a sector that is feeling generally overbought.

That still leaves me with cash of £19,607 – too high but every time I find something to buy I seem to find something else to sell.

Portfolio performance relative to index below.

So much for the buying opportunities I was looking forward to. Contrarian Miner is up another 2% today to £131,135.

I have just sold half of my shares in Roxgold (ROG:V)  being 7500 shares at C$1.13/share, banking a 75% profit on them.

At the current gold price the company would generate around US$50m in cash each year, which makes for a seemingly generous FCF yield of 13% based on the current EV of just over US$380m.

However, the reserve life of the mine is c8yrs, so at the current gold price the mine would generate cUS$400m in undiscounted free cash flow over the life of mine compared to an EV of US$380m.

Sure the gold price could rise or additional resources could be converted to reserves. But given that its a pre-production asset in Burkina Faso, I’d say its pretty fairly priced right now and am taking some profit. Haven’t decided what to do with the other half – I have a nasty habit of selling things too early so I am tempted to hang on for a bit and see what happens.

I now have £19,030 in cash or 15% of the Contrarian Portfolio. It should be starting to burn a hole in my pocket no matter how overbought the market may be or I’m going to suffer from nasty cash drag. But the contrarian in me wants to sell and not buy on a day like today.

Portfolio below….

A quick update on Contrarian Miner’s performance – following last week’s China-led mining rally the portfolio stands at £128,552 (up over 28% since inception against the FTSE 350 Mining total return index which is up 8% over the same period). Of the portfolio a significant £14,716 is currently in cash – the mining sector has moved a little too much in a straight line in the past two weeks and expect there may be better buying opportunities later this week or next.

Late last week I sold half of my BHP Billiton shares at 893p per share – realising an 8% loss but given the 23% rise in the space of a week I was pretty happy with that price. I bought BHP early on as a relative safe haven given the perceived “strong” balance sheet in what was an extremely volatile market . It has been one of the worst performing stocks in the portfolio – and that serves me right for buying a company that I don’t like because its viewed as “safe” rather than following my own (contrarian) views.

Likewise selling Anglo American at 288p in December has proven to be by far my worst exit. Serves me right for selling a company I liked because I was scared of what the market might do to the share price in the short term.

See below for the full Contrarian portfolio. I like the current geographic and commodity mix but I do need to deploy that excess cash. I’ll be aiming to do so by topping up  recent purchases which remain relatively small holdings currently.

When I last posted a comment on Amara Mining on 29th February, I mentioned that despite the uplift in price following the offer from Perseus, the share price was not reflecting the full value of the Perseus share portion of the offer and was ascribing no value to the warrants. At the time I said that although I was not sure whether I wanted to hold Perseus shares longer term, “given the significant gap between the offer on the table and the share price it seems to me sensible to hold for now in any event”.

Now with the acquisition approved by shareholders and soon to close, the gap between offer value and share price has narrowed (or indeed closed depending on your view of the value of the warrants). So I have just sold all 41,000 Amara shares I held at 16p per share, realising an 82% profit on my average purchase price of 8.8p.

I will need to think what to do with the resulting cash as I already had £5,506 prior to this. However that can be tomorrow’s problem – for once I thought I would get this to you hot off the press.

Contrarian currently stands at £123,946.