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In a Rough Market - Holding Quality Stocks Wins

After a couple of rough days on the global and local stock market, it’s never been a better time to hold a handful of carefully researched and vetted long term positions - like those in ourstock portfolio. Investing in a select few quality companies with excellent management teams on a 3 to 5 year investment horizon, is a peaceful way to roll through the ups and downs of the market. We first invested inThomson Resources (ASX: TMZ)in December last year. TMZ is the only silver focused stock we own, and we think it's attractively valued on a silver equivalent resource basis compared to its ASX peers. We see upside in TMZ as it catches up to them. ASX: TMZ Yesterday, TMZ announced it had acquired the Texas Silver Project on the Queensland / NSW border - right near TMZ’s growing collection of NSW silver assets. The best part of TMZ’s latest acquisition is that it comes with permitted mine infrastructure, a connection to a power grid, and has been maintained in excellent condition. The infrastructure is in such good condition that TMZ is considering firing it up and potentially generating near term cash flow from the silver currently sitting at the project. The company said in the announcement it will “explore the feasibility of shareholder distributions of physical metal”... We must say we haven’t seen this before: Does this mean actual physical silver as a shareholder dividend? That would be very cool if it happened - we can't imagine how that dividend would get delivered though...? Sounds a bit like a gimmick but we are sold! As big fans of the “silver squeeze” we will gladly add to the modest but growing physical silver holding in our portfolio. I guess we will have to wait and see. Anyway, back to TMZ’s latest acquisition… Given the Texas Silver Project’s proximity to its other silver assets, TMZ can truck mined ore in and start processing it there. TMZ picked up these new assets from liquidators who were desperate to offload as quickly as possible - we love a good fire sale asset pick up. TMZ has a goal of building a silver dominant resource base of at least 100 million oz. silver equivalent in the NSW and Queensland border region. This new acquisition is a big step towards that strategy - you can see they are consolidating a nice package of assets in the region: We like TMZ’s current market cap compared to other ASX silver stocks. Investigator Resources has a 42 million oz. silver resource - and is capped at $121M. Silver Mines Ltd has an 87 million oz. silver resource - and is capped at $266M. TMZ is capped at $46M - a fraction of its peers. TMZ is aiming to have a larger silver resource inventory than both of them. We intend to hold TMZ for the long term, and expect the company’s valuation to soon catch up to its peers as it realises its strategy. ASX: TMZ What's next for TMZ? Over the last few months, TMZ has gone on a shrewd silver shopping spree, picking up strategic assets all in the same region. TMZ will need to pay for the assets over the coming months, and is looking at potential debt financing options. TMZ is also in the process of having the existing resources for its silver projects re-estimated to the JORC 2012 reporting standard. Once that is complete, TMZ will be able to publish consolidated reserves and resources under its own name. This will allow a much clearer peer comparison to Silver Mines and Investigator Resources. As long term shareholders we are hoping for a steady share price re-rate for TMZ, as it realises its silver strategy. For a further detailed analysis on TMZ’s latest news: