Buying Into A Natural Resource Investment Portfolio (PINK:PNPFF)

PINETREE CAPITAL LTD ORD (PINK:PNPFF) can be thought of in a number of ways because it has a number of attributes that are common to mutual funds, indices, ETF’s, Venture Capital holdings, and Hedge Funds.

For example; Net Asset Valuations: PNPFF recently announced that as at October 31, 2011, its  unaudited net asset value per share ("NAV") was $3.05. NAV is the method mutual funds use to calculate the value of a ‘share’ of the fund. It is a method calculated at a particular date for PNPFF; daily for a mutual fund. Pinetree discloses an unaudited monthly NAV within 15 days after the month-end.

I like what Pinetree is doing and how it’s set up. I use to work with a lot of Money Managers and they treated investments in a similar manner. PNPFF is focused on small caps and its investments are primarily in the resources sector: Precious Metals, Base Metals, Oil and Gas, Potash, Lithium and Rare Earths, Uranium and Coal. It moves in and out of positions as profits are realized or risks or exposures begin to grow: built on an exit strategy designed to maximize relative return in light of changing fundamentals and opportunities: like a Hedge fund.

The TSX (Toronto) Venture Exchange...

On Nov 15 PNPFF bought 250,000 common shares of Virginia Energy Resources Inc. through the facilities of the TSX Venture Exchange, representing approximately 0.3% of the total issued and outstanding common shares of Virginia Energy as of November 15, 2011. As a result of this transaction, PNPFF held, as of Nov 15, an aggregate of 11,000,000 common shares of Virginia Energy, including rights to acquire an additional 850,000 shares upon exercise of certain convertible securities.

On Nov 11, the same thing: PNPFF bought 290,000 common shares of Caledonia Mining collectively holding an aggregate of 50,263,000 common shares of Caledonia.

PNPFF makes clear that its transactions are made for investment purposes and it could increase or decrease its investment in any company depending on market conditions or any other relevant factor; like geo-political for example.

PNPFF was trading at $1.03 on Oct 4 and is currently trading in the $1.70 range; a gain of 65% in six weeks. Some happy shareholders here. 

Anyone considering this or any other similar investment, without the benefit of a ‘mutual fund prospectus’ really has to perform some serious due diligence, risk analysis, and call the Company’s investor relations department to get a clear understanding of current holdings, volatility and risk, and exit strategy methods as this is essentially a natural resources play.  

I haven’t, don’t, and do not intend on holding any of the companies mentioned in this article.