Brazilian Cosan, a company in the sugar cane refining and logistics business whose ADR we used to own, is in the process of consolidating its offshore companies into the Brazilian parent to improve the groups valuation. We sold in part because its accounts were incomprehensible because of the complex of holdings. As is usual with Cosan they sent out a shareholder notification of the proxy vote to approve the proposed changes on which a vote is being held--but described the holdings to be incorporated only in Portuguese. Luckily your editor is a former student of the Fundaçäão Gulbenkian where you can study Portuguese.

The essentials of the incorporation were to take control of Cosan Ltd, a registered entity in Hamilton, Bermuda under legal terms and conditions proposed by Cosan's special independent committee in a meeting August 4 based on a directive of Sept. 1, 2008 (when we still owned the company but were not consulted. This results in a deed of merger under the terms of the Bermudas companies act which was validated by legal counsel.

A further incorporation of Cosan's separate São Paulo logistics arm, Cosan Logistica S.A. by way of a share swap also authorized by the special independent committee. It was also validated by the lawyers.

Now without translation US ADR owners of (CZZ) are being asked to approve this complex matter.

I assume there will be some problems and I have put in an order to buy CZZ at a level barely higher than its Friday close. Portuguese speakers already boosted the share price by 0.62% last week. It trades at a p/e ratio of 15x, an earnings ratio which may be historic now and yields 0.6% in dividends, also no longer accurate as it is ceding shares to the two newly incorporated entities.

I think this is a possible bargain given that the point of the incorporation is to improve the standing of CZZ parent, but given that this is an obscure Brazilian tangle, it may not be for that reason.

*It is that time of year again when writers are asked to name their best idea for the coming year. My personal pick is the result of having 5 close relatives who vote in Georgia, because I think they are all into getting rid of Republican senators even at some cost to their own potential tax bills under a Biden presidency.

So I am going Neanderthal and picking a way to beat inflation, gold. My pick is Kirkland Lake Gold, (KL) on the NYSE, a Canadian mod-cap. It just signed a strategic alliance with the largest gold major, Newmont Goldcorp, itself formed by a recent merger with Barrick, to work together to resume mining for the yellow metal at the open pit Holt Mine which KL resumed excavating early in 2019 under a new royalty agreement. KL then suspended its work in July, 2020 over covid-19 risks to miners, which clobbered its stock.

The duo will also work on reviving Newmont properties near Timmins, Ont. The main reason I am buying KL, which trades under that ticker both on the NYSE and in Toronto, is that it upped its quarterly dividend to 18.75 US cents from 12.5¢ (50%) last Wednesday, something it would not have done without some good reason, like finding more gold in these very old Canadian mines. The dividend is payable to shareholder of record on Dec. 31, New Year's eve, on January 14, 2021. The money was raised by KL by selling shares of Novo Resources Corp and warrants on its own shares early in Dec. The warrants, not registered or sold to US shareholders, allow the holders to buy new KL shares at $2.80/sh in 2021, giving KL proceeds of $71 mn which will fund a lot of digging. KL still retains 4% of Novo, vs the 12.1% it owned before the last sale. It now doesn't have to inform shareholders of any future Novo sales under Canadian law because it owns less than 10%.

Kirkland tries to be good to shareholders, even non-Canadians who don't get a tax break or the right to buy warrants. Its actively bought back its shares for about $618 mn (US) and paid dividends of $2.71/sh through the first 3 quarters of this year. Note that in addition to aged mines in Ontario, it also owns open pit Detour Lake and Macassa in Ontario. Kirkland also has a mine in Victoria, Australia. Before the covid shutdown it earned $2.06/sh, 42% up from prior year and free cash flow topped $500 mn, up 92% from 2019 thanks in part to Australian tax breaks. It has zero debt, unusual for a goldmine.