Our somewhat aggressive limit to sell Nevsun Resources Ltd. (NSU, NY, 4.38–4.39) has not filled. Given the looming deadline, we now have a choice.
- Sell shares in the market now, with a limit of $4.39. Given the currency conversion fee charged by most brokerages, this is essentially the C$6 tender price.
- Tender your shares for C$6. Unknown currency fluctuations will affect the actual amount you receive in U.S. dollars or other currencies. Tender if pushing the tax gain into next year is important.
- Do nothing; you will not receive more than C$6, but there is always a risk that Zijin, the acquirer, decides not to compulsorily purchase the untendered shares.
The currency is an unknown. There is a good chance that the Canadian dollar strengthens over the next couple of weeks, but the rate on the unknown paydate is unknowable.
So, "officially" we are selling Nevsun at $4.39. To tender, call your broker. Most brokers have an internal deadline of 26th, 27th or 28th of the month.
If we sell at $4.39, we will generate a total return on this second tranche of Nevsun of 65%. (The first tranche we sold for a gain of 1,387%.)
We aim on one more Bulletin before year-end with a discussion of several non-resource companies, and a list of best buys for tax-loss buying.
I would like to wish you all the peace and blessings of the Christmas season.
Adrian Day, London-born and a graduate of the London School of Economics, heads the money management firm Adrian Day Asset Management, where he manages discretionary accounts in both global and resource areas. Day is also sub-adviser to the EuroPacific Gold Fund (EPGFX). His latest book is "Investing in Resources: How to Profit from the Outsized Potential and Avoid the Risks."
[NLINSERT]Disclosure:
1) Adrian Day: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Nevsun Resources. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. Funds controlled by Adrian Day Asset Management hold shares of the following companies mentioned in this article: Nevsun Resources. I determined which companies would be included in this article based on my research and understanding of the sector.
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