Scotiabank’s 1832 Asset Management has been buying up shares of Great Bear Royalties like candy. Based on the early warning report filed Monday, they now own more than 18% of the 27.2 million outstanding shares.
Banks generally don’t corner the market on small-cap stocks, but I can see why they are making an exception here. Great Bear Royalties owns a 2% royalty on the massive Dixie deposit, and was spun out to shareholders of Great Bear Resources last year as a private company. I have no doubt both companies will be sold this cycle at a disgusting premium.
I tried for months to buy shares privately ahead of its listing on the TSX Venture Exchange. I contacted 20 shareholders and two brokers and none of them would consider selling or had supply.
The returns so far make it obvious why. Great Bear Royalties completed a rights offering in December at 15 cents/share while it was still private. It opened trading last month on the TSXV at $2.50 and is currently sitting above $4. With $5-million in cash they have the option of simply waiting for Dixie to move into production.
No position but I will be looking for an entry point to add this to my gold basket. This was much easier to love when my thesis was “it’s worth a lot more than 15 cents.” It’s very likely GBRR has passed me by.
