Conroy Gold & Natural Reso (AIM:CGNR) We ask the 6.04% shareholder why he invested?

Conroy Gold and Natural Resources plc (AIM: CGNR), the gold exploration and development company focused on Ireland and Finland, was informed today that Mr Paul Johnson is now beneficially interested in 1,210,973 ordinary shares of €0.001 in the Company, equal to approximately 6.04 percent of the issued share capital and voting rights of the Company (including those of his wife, Michelle Johnson).


We ask the question, why does an investor buy 6.04% of a company? Here is Mr Johnson reply.





Note: The writer and connected parties have just declared a 6% holding in CGNR.


I have been an investor on and off in Conroy Gold for a decade more or less and yet, despite some good fortune along the way the investment has been a serial poor performer.

The scenario of investing in Conroy follows much the same pathway as Greatland Gold (LON:GGP) where I followed the story for nearly a decade and where, despite much promise along the route, the stock was often missing the punch needed to deliver the outsize returns I sought as a higher risk junior resource company investor.

Investing colleagues and market commentators told me to give up hope with Greatland but I fought back with the idea that one day I would make a very good return from the company and it was just a question of when.

In the end, we saw the lift off in value with the GGP share price rising from well below 0.1p per share in late 2015 / early 2016 to the highs of circa 2.5p in late 2017, with extreme bottom to top measuring a circa 40x return in under two years.

When buying GGP at 0.08p people laughed at my stupidity, then as I derisked at 0.8p people were disappointed and when the share price rocketed to over 2p, so was I to a degree, because perhaps I misjudged how high share prices can drive when in favour.

Sadly in our investing world the major attraction is not undervaluation driven contrarian thinking, but the comfort of acting together with others in crowds (or herds as they are also known) where investors are buoyed by a sense of united excitement as to the potential.

Occasionally herd investments deliver, but they usually don’t, and that is why for me my many years of trying to make money from AIM has taught me some painful lessons. The principal lesson being, ‘buy when nobody wants a share and sell when everyone does’.  Maxims like this are over rated, but I have to say this one is key to generating returns on AIM.

In the case of CGNR I participated heavily in the financing in December 2017, which saw a move away from the corporate action undertaken earlier that year (General Meetings called to make changes to the board and thus the direction/policies of the company).  There is a time to move on from disputes and at the end of 2017, with those involved on all sides of the corporate action events aligned to a more forward thinking approach for the company, it was time to do just that.

Since investing in that December 2017 financing I have continued buying CGNR on market and now hold a little over 6% of the Company.  I expect I will further increase that position.

As to why its quite easy to explain.  Gold in Ireland is drawing considerable interest as evidenced during my recent trip to the PDAC show in Toronto where the CGNR stand was repeatedly busy and there was generally a clear interest in Irish resource plays.

Conroy also has the advantage of 517,000 ounces of gold under a JORC compliant resource providing a foundation of value.  However an existing resource doesn’t really intrigue me as I am more drawn to the potential that multiple discoveries along a 65 kilometre mineralised gold trend, from which the Clontibret & Clay Lake area alone has a target of 5 million ounces of gold just to itself, a decent JORC Compliant ‘Exploration Target’.  This target comes from the Company’s RNS of 31 March 2016 through the following link:—38–natural-reso–cgnr-/prn/targeting-5-million-oz-of-gold-at-clay-lake—–/20160331070000PEC93/.

In addition a wider view of the Company can be sourced from their corporate presentation which can be viewed through the following link:  The relevant JORC ‘Exploration Target’ table from that presentation is as per below:

That is what I think the market has missed in giving CGNR a market capitalisation of just under £4million, a valuation that I think (for what its worth) is so detached from reality that the investment proposition is personally very attractive.

If your research on Conroy extends to include bulletin board and Twitter commentary you will find a feast of negative discussion.  The same is true of so many companies that have experienced long periods of share price decline, especially after the post 2011 trashing of junior resource stocks across the world. From my perspective that is a key indicator, preferring as I do to buy shares out of favour and unloved.  Of course one has to question how much of the negativity is heart felt (shareholders who have lost money over the years and become disillusioned with the loss and the company behind it) or how much of the commentary is economically driven, with paid or otherwise compensated actors driving to suppress share prices for personal gain. As I said negativity is key so I find it inspirational the greater the anti-company bias.

With a position set or building, the chief investment tool appears to be patience, along with the ability to ignore the noise of protestation about how worthless an investment is in the ‘eyes’ of others.  I am finding this easier to do because ‘bashers’ as they are known will certainly not be around to apologise if they cause you to miss out on a major financial success.  Then again they wont be enjoying the benefits with you if you hold firm and achieve a successful outcome.

So I wait for Conroy to reveal more of the results of their current drilling programme, the first hole of which yielded superb results. I wait to more details of the exploration potential across the entire 65km mineralised trend.  And I wait for what seems to be increasingly likely after PDAC namely, a move by other players to secure strong positions in Irish gold exploration and development.

As with Greatland and many others the proof is always in the share price outcome.  I would suggest if I am correct and the Conroy share price has considerable upward movement to come, then a good barometer of that success is how many criticise me for selling down at considerably higher levels.

As always I may be wrong…..

Paul Johnson


Share Talk holds no stock in Conroy Gold (LON:CGNR) or any of the blogs we publish and we have received no payments to publish these articles, we are happy for shareholders to share their views, thoughts and please seek professional advice when investing.


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