One of our principal goals for any Front Line Profits recommendation is its ability to double our money in the first 12 months of the position. That doesn’t always happen, but it’s our goal.

Right at the start, we said Gensource Potash (Toronto Venture: GSP) was a little different.

It turns out that it is too different. After two years and a successful mine construction, we are still down around 32%.

And we saw nearly 10% dilution on our position.

Now the company plans to borrow $180 million to finance its new Tugaske project. That lets us in for a long period of construction frustration.

Every little hiccup in construction will send shares lower. Every deadline Gensource meets will just tick a box. There’s little upside for us in the next 12 months. And the risk of construction is enough for us to sell.

We’ll put our capital to work somewhere else and keep an eye on Gensource for possible re-entry later. Here’s what to do now…

Action to take: Use a limit order to sell Gensource Potash (Toronto Venture: GSP; Over-the-Counter: AGCCF) at the market price down to C$0.08 per share.

We will record a loss around 32% on the position. We can find better opportunities in this market. I don’t see Gensource doubling in value in the next 12 months.

2 More Actions to Take

In case you missed it in yesterday’s podcast, we have two more positions to sell if you’re still holding them:

Action to take: Sell shares of Almadex (Toronto Venture: DEX) and Azucar (Toronto Venture: AMZ) at the market.

It’s time to cut our losses on those positions.

At the moment, I’m reviewing new companies for our portfolio that can double our money in the next year, with the potential for a 1,000% gain in the next two or three years.

This market, more than any we’ve seen in a decade, offers us many of those kinds of opportunities.

If you have questions, send an email to my team and me at frontline@banyanhill.com.

Good investing,

Matt Badiali
Editor, Front Line Profits