Two years ago, Axcap Ventures was a C$40 million gold explorer selling shares for pennies. This month, SSR Mining agreed to buy it—now renamed Roxmore Resources—for about C$655 million, plus shares of a new small explorer provisionally called SpinCo, with closing expected in December 2026.
Our paid subscribers got to enjoy this ride
VIP and Founder members. On October 29, 2024, we presented to VIPs a place in Axcap’s private placement alongside Doug Casey. Axcap was a public company, and therefore this placement is considered a Private Investment in Public Equity, known as a PIPE.
The offer was open to accredited investors only. The price was C$0.20 per unit. This was pre-consolidation. Post-consolidation (1:10) the cost basis works out to C$2.00/unit. Each unit carried one share plus a “free” five-year warrant with a strike price that, after consolidation, also is C$2.00. A holder of a warrant can exchange that warrant plus C$2.00 for a share of Axcap (now Roxmore) any time during the five years. At a share value of C$6.75, those warrants are substantially in the money.
Paid subscribers. On October 31, 2024, we presented Axcap to all paid members, suggesting they consider buying some in the open market up to C$0.24 and more at C$0.19 or lower. Those are pre-consolidation prices too, so multiply that by 10 for the Roxmore cost basis.
The win
A VIP unit purchased for C$2.00 is now worth C$6.75 in shares, plus the value of its warrant. If the warrants are cashed out for the difference between the share value and their C$2.00 exercise price, as Roxmore’s recent announcement suggests, each warrant would be worth about C$4.75. That would put the combined value at roughly C$11.50 per original C$2.00 investment—a 5.75x multiple (or 475% gain), before taxes, plus whatever value the SpinCo shares ultimately have. The acquisition has not yet closed, so these figures remain subject to the transaction’s completion and final terms.
An open-market buyer taking the position at an average near C$2.00 got a 3.4x multiple (or 240% gain), not as much of a win because they didn’t get the warrants. But a nice return.
Subscribers who bought Axcap/Roxmore may have taken a Casey Free Ride (CFR). When a stock doubles, we often sell enough shares to recover the cost basis and hold the rest. Members who took a CFR had recovered their original cost before this buyout deal was announced. VIPs would have kept roughly half their shares and all their warrants. Depending on whether and when someone took the Casey Free Ride, their precise return could be less than the maximum.
This was a speculation that has worked so far
Roxmore is a fine result. We like those. But lots of speculations don’t work out. On the one hand, speculating in the junior resource sector is not for the faint of heart. On the other hand, it sure can be fun, as long as we only speculate with funds that we can afford to lose.
We like PIPEs because we usually get the benefits of warrants, plus a public market to sell into once the hold period ends. That’s different from speculating or investing in private companies, where liquidity is poor or nonexistent.
Consider upgrading
Paid membership gets you our stock recommendations, detailed lessons about junior resource speculating and other helpful information. VIP membership adds invitations to private placements for accredited investors that we have put through our 9Ps due diligence. We expect to identify more placements in the coming year. If that kind of research suits you, you can upgrade from this link.
If not, please keep reading our letters, which we do hope you find worthwhile, and send them off to those you care about.
Sincerely,
John Hunt, MD
Editor, Doug Casey’s Crisis Investing
This letter discusses a completed private placement and a proposed acquisition that has not yet closed. It is not an offer or solicitation, nor is it personalized investment advice. We cannot promise that the stocks we discuss will perform well or that any PIPE we present will produce a return. That’s not how speculation works. But we like to find good speculations. And we practice what we preach.