IKN #616Premium

The IKN Weekly
Week 616, March 14th 2021
Contents
This Week: In today’s edition, The US vaccine program and bonds yields.
Fundamental Analysis: The Wesdome Gold (WDO.to) 4q21 financials, Excelsior Mining
(MIN.to) lays out its case.
Stocks to Follow: Copper Mountain (CMMC.to), Minera IRL (MIRL.cse), Minera Alamos
(MAI.v), Mene Inc (MENE.v), Great Bear (GBR.v).
Copper Basket: Overview, Doré Copper (DCMC.v), Aldebaran (ALDE.v).
Producer Basket: Overview, StreamerWatch.
Tiny Dogs: Overview, Manitou Gold (MTU.v), Antler Gold (ANTL.v).
Regional Politics: Brazil: Lula changes everything, Peru: Latest opinion polls, Ecuador
Presidential election update, Colombia to auction copper concession blocks, Argentina: Chubut
mining and a Presidential near-miss.
Market Watching: Bluestone Resources (BSR.to) pays the price of continuity, First Majestic
Silver (FR.to) (AG) buys Jerritt Canyon.
I remind subscribers that no part of this newsletter can be copied, reproduced or
given to any third party without the express permission of the author.
This Week
“
In today’s edition
 We run the numbers on Wesdome one more time and get to a decision point (at last).
The best choice is to add NGD.
 Last week Excelsior Mining (MIN.to) laid its cards on the table and there’s plenty still
left to like about this stock. Look beyond these early glitches, the upside is tremendous
once it gets all ducks into line.
 Check out today’s Regional Politics section for madness from Argentina, as President
avoids getting lynched by an angry anti-mining mob in Chubut. Bananas from the Brazil
republic as ex-President Lula gets his convictions quashed and immediately starts his
2022 election campaign. Plus more crazy from Peru’s electoral campaign and the
insanity from Ecuador’s car crash election.
 We may be in for more bearish near-term action in gold, but its effects are likely to be
short-lived and not a major concern for this desk. That’s today’s intro.
 Minra IRL (MIRL.cse) is of some concern once again. That’s in today’s ‘Stocks to Follow’
notes and feels like a bad case of Groundhog Day.
The US vaccine program and bonds yields
Three quotes from last week’s intro:
“In Janet Yellen’s Treasury, everything is already on the direct path to Goldilocks.”
1

“…until proven otherwise, this is rate normalization and not a zoom into the
inflationary stratosphere. As such, its negative influence on gold and the mining
companies will be limited and, thanks to Janet Go Big Yellen, might even have ended
on Friday.”
“I think we’re now at the bottom for the gold price slump, because the US Yields will
not continue to climb until there’s clear evidence of inflation, rather than mostly talk.
Gold should rebound, meanwhile copper will be able to do its own thing and go back
to responding to its tight market, all the talk about imminent inflation will kind of die
down as gold climbs back to U$1,800/oz. Then at some point in the medium-term
future we’ll find out who is right and who is wrong about inflation but by then, our
mining stocks should have run well anyway.”
The only one of that lasted the week intact was the first, as JGB Yellen last week underscored
her view that there wasn’t any inflation in the pipeline and large-scale stimuli were the way to
Get America Back To Work (as Yellen is now a politician, she gets to capitalize that line). The
second and third need more written on them, as while I still believe they’re in the right ballpark
it’s too early to call a precise bottom on the price of gold and in the near-term, the market set
up for a continuation of the USD rally. The reasons? First the facetious one, it’s a Democrat
government so suddenly the debt pile is important and the Bond Vigilantes are back. It’s
understandable that Republicans make political hay with all things financial, they need
something solid with which to oppose the Dems and when it comes to Wall St. they have solid
ground, plenty of support and real policy points worthy of debate (Freshwater economists battle
Saltwater economists, all they do is provide ammo for either side). The other reason is that, for
my money at least the GOP is on the right side of history, Joe Biden and the Dems are trying to
have their cake and eat it and what’s more, Wall St. is saying the same thing.
Ironically, Janet Go Big Yellen will have to fight hard for her Goldilocks due to the success of
the US vaccine program, which has rolled out quickly and under President Biden. The news
from his own lips last week, that they expect to achieve the first goal of “100m shots in arms”
in the first 60 days of his administration instead of the first 100 days, underscored the effects of
the rapid improvement in (quite literally) the financial health of the world’s biggest and most
important economy. However, before launching into the main argument of this week’s intro,
let’s take a moment to be non-partisan and note the NYT report this week (1) which gave
plenty of credit to the moves made by the Trump administration that aided the vaccine rollout.
Please read it yourself, my interpretation is that while the Biden team brought order to supply
chain chaos, decisions made by the Trump team in 2020 provided the wholesale boost, laying
the groundwork for a manufacturing base that would be able to expand production rapidly.
With that attempt at political kumbaya done, we get to the point.
Statement of fact: China’s economy recovered rapidly from the Covid-19 pandemic
Statement of fact: The USA is now joining China and starting its economic recovery phase
To date, The IKN Weekly has reiterated on how this recession is different because for the first
time, The USA is not leading the world out of the slump. That job has been for China and
consequently, those items desired by China and priced in US Dollars (a long list, with copper
and oil high on it) got more expensive quickly. However, this weekend marks a change in house
position, because when The USA starts playing catch-up on recovery it does so more
dynamically than any other world economy. It’s at this point that we leave The IKN Weekly’s
wheelhouse and, as last week, visit the specialist world of fixed interest traders and bonds
vigilantes who have the occasional taper tantrum. I am forced to lean on experts and their
commentary on this subject, so the published opinion that “There will be no peace until U.S.
10s reach 2%,” from Kit Juckes, global macro strategist at Société Générale, in a note to clients
(2) last week sticks out. A further quote from the same source:
“The pattern seems clear enough: The equity market is seeing a sector rotation but not
a correction; the bond market is seeking a new equilibrium in the light of a vastly
improved economic outlook in both the U.S. and elsewhere; some policy makers are
pushing back against the bond moves, with little success.”
2

And…
“As yields rise, the dollar rallies, but when yields settle at a new level, the dollar drops back. The
pattern probably goes on until bonds find an equilibrium, unlikely before 10-year note yields have
a 2-handle, judging by taper tantrums and past cycles.”
That sounds right and what’s more, we see it in the near-term movements of the now
(in)famous Ten Year Yield (frankly, I would have been drummed out of The Gold Owners’
Society if I hadn’t used this chart at some point in this issue):
In IKN615 last weekend, I thought JGB Yellen may have crimped the rise. That was wrong, Kit
Juckes rightly observed policymakers trying and failing to kick back against the market, there’s
an example. My scribbled-in box 1 shows that the combined position of Yellen and the Fed
worked until around midweek (and a much vaunted treasuries auction went more smoothly
than their opponents expected) but come box 2, the market brushed off the Admin’s jawbone.
If the USA gets quicker syringes in arms than expected, it also gets quicker than expected
economic recovery, QED.
Therefore, we are in a near-term situation that is bearish for the price of gold. A combination of
expected near-term USD strength (against the Euro and others), more attractive USD
denominated bonds yields and the talk of inflation, which importantly precedes it no matter
whether it appears or not. Any one of those is a headwind for gold bullion prices, but seeing the
USD strengthen while interest rates increase is particularly bad news for the monetary metal*.
To illustrate the interest rates aspect, in the same spirit as last week we dial in a different FRED
chart than that of TIPS. This time it’s the rolling yield on the US 10 year TIIS Right), a useful
graphic that does math for us and is a useful hack on real US interests rates once inflation has
been factored in. We see that since the beginning of the Covid-related recession, “true yields”
(you get what I mean) have been stuck firmly in the negative, around 1%. Also on the chart
are two red squares, showing the period leading into 2013 when “true yields” did something
very similar before rallying back. Those of us around the gold market in 2013 need no reminder
of what happened to the metals and
their miners that year, trauma
creates long-term memories.
The inference is clear, we have
higher yields to come and while they
won’t reach the 3% and 4% that the
Inflation Doomsters are trying to
scare the market with (see IKN 615),
there’s enough left to add to affect
gold in the near term.
3

The US economy is rebounding. That means the US Dollar will continue its rally, as the key
element of its index weighting is the Euro (58% of
DXY) and not only is the Eurozone lagging in economic
recovery (due in part to a far slower roll-out of
vaccines in Mainland Europe than The USA), but it is
set to lag even further due to their reluctances to
indebt any further. And indeed DXY is off its recent
lows and rallied sharply in March as seen in the chart
(right). As to where that rally might take us, I’m not
your man for TA but a quick look puts 94 as a first and
most obvious stop.
The “Ten Year Yield” does indeed have a tight
relationship with the price of gold, a statement that
doesn’t go down well with hardcore goldbugs who prefer to live in a world where gold remains
pristine, unaffected by the sordid workings of the modern financial system. However, the Ten
Year’s influence is more cyclical than near-term, only coming to the fore as a price driver at
certain key moments. We’re at one today and while the main message of the bonds market
(supposedly “smarter” than the equities market about the macro) concerns the potential for
inflation, they affect gold in a direct way by making the dollar and its interest-bearing vehicles
more attractive. That’s the money with which GLD, Bullion Desks and other precious metals
vehicles compete, it’s natural that one goes down while the other goes up.
Unsurprising, therefore, to see GLD inventory drop another 17.19mt last week and the
inventory/price ratio drop to 6.51X. There’s no way around the numbers, GLD data are also
bearish on gold, at least in the near-term.
GLD gold holdings, 2021 year to date (metric tonnes)
1250
1225
1200
1175
1150
1125
1100
1075
1050
1025
1000
975
950
It’s a noisy dataset in the near-term, hence the swings as lumps of inventory are remitted or
added, so it’s by no means certain that 6.51X finish last week gets worse in the days ahead, but
any lower would not be good news.
4
02/21/13 12/1/2 12/1/4 12/1/6 12/1/8 12/1/01 12/1/21 12/1/41 12/1/61 12/1/81 12/1/02 12/1/22 12/1/42 12/1/62 12/1/82 12/1/03 12/2/1 12/2/3 12/2/5 12/2/7 12/2/9 12/2/11 12/2/31 12/2/51 12/2/71 12/2/91 12/2/12 12/2/32 12/2/52 12/2/72 12/3/1 12/3/3 12/3/5 12/3/7 12/3/9 12/3/11
mt 7.00 GLD: Inventory/Price Ratio, 2021 YTD
6.95
6.90
6.85
6.80
6.75
6.70
6.65
6.60
6.55
source: SPDR GLD data 6.50
6.45
6.40
13/21 2/1 4/1 6/1 8/1 01/1 21/1 41/1 61/1 81/1 02/1 22/1 42/1 62/1 82/1 03/1 1/2 3/2 5/2 7/2 9/2 11/2 31/2 51/2 71/2 91/2 12/2 32/2 52/2 72/2 1/3 3/3 5/3 7/3 9/3 11/3
Source: SPDR data, IKN calcs

To wrap up today’s intro, please notice that today’s talk revolving around gold and its price has
no chart of the gold price and contains no prediction on what the gold price might do in the
near future. That’s because despite all the above and my near-term bearish outlook on the
metal, it’s perfectly possible that the USD and all the bonds do all the things mentioned and
gold laps up the hits without losing a dollar of value. After all, we’ve seen so many strange
financial happenings in the last 12 months, one more that merely defies a probable outcome
would be easy to take. Also, in this case the call for gold price weakness is all about the near
term and once the yields find their new levels, gold will also find its new base and move up as
bonds lose their temporary attraction.
As for a personal position, I won’t be making any changes to the Stocks to Follow list on the
back of a forecast near-term weak period for gold, as nearly all the trades held are envisaged
over the long-term plus for the binary trades, $50/oz or so either way won’t stop M&A from
happening. However, it is a factor in the decisions I made about the next subject in today’s
edition, Wesdome Gold.
*Gold is the only monetary metal, the others are merely precious.
Fundamental Analysis of Mining Stocks
The Wesdome Gold (WDO.to) 4q21 financials (in Canadian Dollars unless stated)
For a company that I don’t currently own and with a market cap nominally too large for
coverage at The IKN Weekly these days (with its juniors focus), There’s been plenty of
coverage on Wesdome Gold (WDO.to) on these pages in 2021. We first looked at Wesdome’s
4q20 production quarter in IKN608, dated January 17th, and in that note came to this
conclusion:
The bottom line to today’s revisit to Wesdome (WDO.to) is to prepare you for the
moment I jump back in and buy the stock. That won’t be this week, nor is it a
guarantee, but with the stock price in The Doldrums and a okay-at-best Q4 left to
report, there may be a bargain entry point in the near future. The prize is clear, WDO
will become a cash generation machine this year thanks to lower AISC, from there
Kiena re-starts and the company re-rates. That’s the plan (and what could possibly go
wrong?), the search for an entry point begins once Wesdome reports its annuals.
That “doldrums” stock price of IKN608 was $9.25, this weekend the stock sits at $8.19 and
there were sub-$8.00 prices available last Friday morning. For what it’s worth I was quietly
hoping they would last the day, but it was not to be and bargain hunters moved in. Also in the
last two weeks in IKN614 and IKN615, I’ve laid my cards more clearly on the table in a pair of
back-to-back notes that may have been tied to coverage of direct market rival New Gold (NGD),
but stood up in their own right and last week’s in particular made my interest clear.
Today, we straighten the ledger. WDO has reported its annuals, what remains is a financially
strong gold mining company trading at a significant discount to 2020 and even 2021 highs. A
price chart would be useful at this point and rather than the standard 12 month, distorted by
the fun and games of this time last year, the two-year offers more information. Covid Crash
aside, this weekend we’re back to the price deck last seen in November 2019. To the right, an
extra chart comparing to GDX/J on the same timescale:
5

Ostensibly, the chart of a company whose share price got ahead of itself. Wesdome couldn’t
hold its mid-2020 price deck but then again very few gold miners could. Then the break in
November made the most difference on the way down, but 2021 to date hasn’t shone brightly
either. I’m not going to clutter this up with bunches of price charts, let’s simply note that in
2021 to date GDX is down 14%, GDXJ down around 19% and WDO.to just under 28%.
Introduction done, we now have relatively simple work to do (compared to most buy call
analyses, anyway), as the case for the stock is already laid out (i.e. IKN615). First we do the
numbers and report on the company 4q21, then we consider any new guidance information
gleaned, then we crunch some numbers:
We already knew production and sales this is the only chart today without new information:
Ozt Au WDO: Gold production vs sales, per qtr Production
30000 Sales
25000
20000
15000
10000
5000
0
1q19 2q19 3q19 4q19 1q20 2q20 3q20 4q20
source: company filings
WDO also pre-announced revenues of $48.33m, so $48.36m didn’t surprise and we were
prepared for a lower quarter than anything else in 2020.
WDO.to: Operations overview chart
6
277.4
823.8
501.6 940.5
53.21
151.31
197.81
479.41
247.91
753.52
426.22
236.21
60
55
50
45
40
35
30
25
20
15
10
5
0
81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4
C$m
revenues
total op expenses
Op earnings
source: company filings, IKN calcs
What did surprise was the cost hike, the total up sharply to $35.7m and the main cause a big
jump in on-site mine COGS, to $30.483m. Here’s how WDO explained the rise in its literature:
Cost of sales increased by $7.7 million from $22.8 million in Q4 2019. The increase in
cost of sales was mainly due to: (i) a $2.9 million increase in mining costs primarily
resulting from increased tonnes mined and milled; (ii) a $1.9 million increase in ore
stockpile and bullion inventory adjustment resulting from inventory level changes; (iii)
an increase of $0.9 million in non-cash depletion and depreciation as a result of the
increase in the asset base; and (iv) $1.0 million of incremental COVID-19 costs.
In other words, a mix of one-time costs and 20 WDO.to: Net Earnings
cost-creep, which we factor into our 2021 18
16.1
model. Once the taxman was paid we were left 16 14.6
with the ho-hum net earnings result of 14 12.4 12.1 11.5
12
$8.491m. Your author’s model wasn’t expecting
10 8.1 8.3 8.5
much more, the net earnings forecast at 8
5.7
C$12m. This was worse and when the stock 6
3.6
price reaction on Thursday and Friday was 4 2.9 2.6
2
0
81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4
source: company filings
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modestly negative, this desk wasn’t surprised. However, over at the balance sheet WDO looks
more buyable and as that’s what really matters here, we also check up on results compared to
forecast. The WDO asset base continues to grow, the Kiena work capitalized along with Eagle.
WDO.to: Assets
400
350
300
250
200
150
100
50
0
7
61q1 61q2 61q3 61q4 71q1 71q2 71q3 71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4
$m
fixed
other current
cash
source: WDO.to filings
Though cash treasury dropped by $10m on the quarter, WDO is still in excellent shape
financially and the working cap dropped by less due to higher carried inventory:
WDO: Inventories
22
20
18
16
14
12
10
8
6
4
2
0
81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4
C$m
ore stockpiles
supplies
gold in progress
source: WDO filings
The long view chart of WDO’s working capital underscores its current balance sheet luxury:
80 WDO.to: Working Capital per qtr
70
60
50
40
30
20
10
0
Here’s where the money went, WDO adding another $12.8m to its fixed asset base.
C$m WDO: Change in fixed asset value
20 18.11
17.33
18 16.57
16
14 12.8
12 9.31 9.44 9.1 10.63 8.9
10
6.94
8
6 3.78 4.28
4
2
0
1q182q18 3q184q18 1q192q19 3q194q19 1q202q20 3q204q20
source: company filings
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 71q1 71q2 71q3 71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4
source company filings
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WDO.to: Cash treasury per qtr
64.62 917.62 417.03 873.72 748.72 593.72
116.83 756.53
893.94
337.66 315.37 84.36
80
70
60
50
40
30
20
10
0
81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4
source: company filings
DAC
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As for liabilities at WDO, a repeated message is the strength of the company’s balance sheet
and it lack of financial obligations. That’s still true today, even though the curve is upward:
120 WDO.to: Liabilities Breakdown per qtr
100
80
60
40
20
0
8
61q1 61q2 61q3 61q4 71q1 71q2 71q3 71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4
source: company filings
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snoillim
long term
current
Most of that rise is due to 1) deferred mining taxes that are no cash and come with the
ownership of mines in Canada and 2)
WDO.to: Shares Out
decommissioning liabilities, which rise not WDO 160
has two mines on its hands. Meanwhile on the 140
current, trade payables will also increase when 120
the company has two assets to run, rather than 100
one. Financials bottom line: WDO is still pristine 80
on its balance sheet, even after all these years 60
and all that development paid for organically. 40
Before moving on to 2021, we check the shares 20
out table, which is slightly to 139.312m. On this 0
score, WDO has always been the perfect
corporate model.
Moving on, the other main lessons from last week’s WDO came in the Conference Call (3) the
next day, that link the March 11th corporate presentation of the ConfCall. The call didn’t come
up with many surprises, but during the Q&A a couple of factors stood out:
1) WDO expects 2021 to be transitional and expects to stick closely to guidance at Eagle, which
is set at an unsurprising 92,000 to 105,000 oz. There is the potential for some extra grade
during Q3, but apart from that WDO is confident in its knowledge this year. Here’s the new
guidance as per the FY20 MD&A:
This means we are more confident in our blanket “25,000 oz per quarter” call for the year
ahead. WDO knows its grade and knows how fast it has to run its mill to achieve that
production target, a run rate the mill can handle easily enough. It now has to deliver.
The other notable factor was the lack of FY20 guidance on Kiena production in the MD&A, as
previously WDO had mentioned it likely. In fact it still is to a point, as this chart from the
presentation shows:
71q1 71q2 71q3 71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3
source: company filings/IKN ests
serahs
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They expect to salvage up to 9k oz in 4q21 from initial start-up operations, which is less than
the previously slated 15k to 25k as per CEO Middlemiss at the end of last year. Another not so
great thing is the 2022 column, as the previous house assumption that Kiena would ramp up
quickly and make WDO a 200k producer at some point next year has fallen away. Instead,
WDO guides for 45k oz Au, which means we wait until 2023 for its milestone. That’s a negative
development, however. Aside from that all is well at Kiena and don’t be discouraged by that
apparent short mine life just on the above visual, there’s more reserve to come as drilling
progresses and the above plan allows the company in for and more accurate cost-effective
resource and exploration drilling. There are many underground high grade vein mines around
the world that run 20 and 30 years on a three to five year reserve, this is a candidate to join
them.
Adjusting the Wesdome 12 month target
Last week had some preliminary numbers, this week firms them up, we make two adjustments.
The minor change shows in the first table below, our condensed model incomes statement with
COGS increased slightly to take into account more cost creep than previously modelled:
Wesdome Gold: Condensed income statement (U$m)
U$1,600/oz U$1,700/oz U$1,800/oz U$1,900/oz U$2,000/oz
Sales (U$m) 277.4 294.7 312.0 329.4 346.7
Cash COGS 124.0 128.0 130.0 130.0 132.0
Depreciation 16.0 16.0 16.0 16.0 16.0
G&A 7.0 7.0 7.0 7.0 7.0
fin. Costs 5.0 5.0 5.0 5.0 5.0
NSR 4.2 4.5 4.8 5.0 5.3
Op income 121.2 134.2 149.3 166.4 181.4
Exploration 7.0 7.0 7.0 7.0 7.0
worker part. 3.7 4.1 4.6 5.1 5.6
Eff. Tax 22.1 24.6 27.5 30.9 33.8
Net income 88.4 98.5 110.2 123.4 135.1
Shares 140.0 140.0 140.0 140.0 140.0
EPS 0.63 0.70 0.79 0.88 0.96
Capex 6 6 6 6 6
FCF 0.79 0.86 0.94 1.04 1.12
Sources: WDO.to data, IKN estimates
The second makes more of a different to the price target and shows here:
9

Sales & earnings model U$/oz Au prices Target price & valuation data for WDO.to based on
USD $1.6k/oz $1.7k/oz $1.8k/oz $1.9k $2.0k/oz 200k/annum model year economics
Sales (U$m) 277.4 294.7 312.0 329.4 346.7 12-month target $9.84 based on 10x earnings on 200k
Upside to target 20% prod year & U$1,800/oz Au
EPS 0.63 0.70 0.79 0.88 0.96 Mkt cap (CAD$m) $1,141 Enterprise value $1,078
FCF 0.79 0.86 0.94 1.04 1.12 P/sales ($1.6k/oz) 3.66 EV/sales ($1.6k/oz) 3.45
P/E ($1.6k/oz) 13.0 EV/EBITDA ($1.6k/oz) 7.9
P/E ($1.8k/oz) 10.4 EV/EBITDA ($1.8k/oz) 6.5
P/E ($1.9k) 9.3 EV/EBITDA ($1.9k) 5.9
This is, after all, a 12 month price target. We could either model WDO on guided FY21
produciton of 145k, or we could slide FY21 to FY22 and price WDO on production two years fro
now. In the end I’ve decided on the latter option, but the extra year means we cannot be as
blasé about the multiple WDO might command to earnings. With 2021 guided carefully and
costs rising slightly, the push out of Kiena from “15k to 25k in 4q20” to “45k in 2021” makes a
difference I can’t ignore. As such, the PE multiple drops to 10X on our target, now $9.84 and
offering an upside to this weekend of 20%.
Discussion and conclusion: Much as I’d like to like WDO enough to buy it this weekend, even
without the bearish near-term winds for gold there’s not enough meat on this bone at the
moment to justify a purchase. The most likely culprit is timing, as a different set of
circumstances could make its current share price look very attractive, e.g. just knocking three
months off the calendar and getting to the day when Kiena is officially Green Lighted. However
today, even with its worst quarter behind it there’s too much time between us and 200k to
make the price a bargain. Ultimately, the message is the same as last week’s and if WDO drops
on any weakness in the next few days or weeks, the right entry point can make me a buyer.
However, until that time there is still more upside leverage and potential in New Gold (NGD)
than WDO and in early 2021, I would add NGD before opening on Wesdome Gold at their
respective current price decks.
Excelsior Mining (MIN.to) lays out its case
Last week saw an unusual event, one that subscriber and mailpal “BW” also noticed:
Hi Mark,
Normally these type of investor presentations are mostly motherhood and apple pie,
but this one by Stephen Twyerould, who is actually a technical CEO is worth the watch.
I now have a clearer picture of the root cause of some of the teething pain they went
through and are still working out as they optimize the well field and their process of
recovery.
All the best, B
Quite correct. Among the good, great and not-so-great presentations, conferences, fireside
chats, keynote speeches and webinars out of mining companies large and small in PDAC week,
the presentation given by Stephen Twyerould, CEO of Excelsior Mining (MIN.to), stood out for
several reasons and if you haven’t seen it, paste this into your browser…
https://register.gotowebinar.com/recording/viewRecording/2827960812746103307/2224798420697500431
/renrutkram@gmail.com?registrantKey=4605878811512036622&type=ATTENDEEEMAILRECORDINGLI
NK
…and make sure to catch up later if this trade interests you or find it on link (4) below. The
presentation stood out mostly due to its honesty, the basic program designed to show the
viewer the problems that MIN.to has gone through at its Gunnison ISR operation AZ USA. Now,
at this point it’s fair to say that most of the presentation focused on problems that were in the
10

past and true transparency would be to disclose every detail about all issues at the time MIN
faced them. However, transparency is one thing and financial/business suicide quite another,
the company worked them out before telling us and hey…fair game. Finally and before we get
into it, the Amvest Webinar presentation PDF isn’t up on the MIN.to website (yet, there’s the
Feb 25th corp presentation instead (5)) but after the show last week, VP IR JJ Jennex sent me
over a PDF version (without the flashy Powerpoint thingies, but with all the info) so if you’d like
a copy you know my mail address.
Onward. After a fairly standard open to the presentation, the fun started on slide 9 when the
company showed a photo of a pump affected by precipitation of solids (they say mainly a
copper hydroxide) from the pregnant solution. From that slide to slide 15, MIN and CEO
Twyerould explained the troubleshooting steps the company went through and how the issue
was resolved (much along the lines of one of our update reports on the stock last year), and
finished by explaining how due to the change in pump plan, the field was now far more flexible
and would be easier to manage on a day-to-day basis, as all pumps are now reversible (i.e. can
suck and blow).
Then came slide 16, which was an issue presented on a single slide, but CEO Twyerould talked
extensively on how they were getting recovery and purity issues at the start of their Solvent
Extraction (SX) process but as above, MIN ID’d the problem and resolved it.
Finally we got to the last slide the issue CEO Twyerould candidly mentioned that they were
currently solving. The problem is carbon dioxide released during the underground chemical
reaction to collect the copper in solution. It’s being caused by the presence of calcite, so the
company has found that by pumping water through progressively dissolves he calcite and
improves flow rates. Here’s one of the visuals they used in last week’s presentation...
…which helped explain how they are tackling the problem and how the improvements are
showing through. Once again, CEO Twyerould was refreshingly candid about the fact that this
was a problem they still hadn’t fully solved, but they expected to do so soon enough. While on
the subject Reader BW and your author weren’t the only ones to notice the novelty of the
MIN.to presentation, with one WhatsApp conversation (that by necessity must be paraphrased)
going like this:
Other: I didn’t realize Twyerould was an engineer.
Mark: He’s not. He a geol, and a decorated one too. Doctorate in Geology and
Geochemistry.
Other: Yes, but he thinks like an engineer. Talks like an engineer. He’s an engineer!
Mark: (smile emoji)
The presentation and Twyerould’s manner make you think that. His confidence that the mine
will work is also clear too, merely a matter of time and now some extra wells to make up for
lower average output per well. However, with the recently raised cash (which we’ll come back
to in a moment) and the low capex and tech requirement to add wells, this is not a major
hurdle once the wells are clean and running on breakthrough, as anticipated.
11

This leads me into my main beef around MIN and last week, namely the market’s reaction
which was dumb. Here’s a five day chart mapping MIN.to against the copper miners’ ETf
(COPX), which shows what they did to the stock once the presentation on Friday afternoon had
been digested.
It was taken as an excuse to liquidate by some smaller players, as well as negative press by
those who had already made erroneous statements galore about the stock on social media, the
ones that simply didn’t want to understand. CEO Twyerould made allusions to the main point
during his presentation, but the point got lost somewhat so to underscore, here’s a tables from
the 43-101 compliant feasibility study:
People last week, both questioners after the presentation and those online Friday, were fixating
on whether MIN reaches 25mlbs/year run rate by the end of this year. Honestly, it doesn’t
matter because the current 25mlb set-up always was Proof of Concept, Gunnison’s plans are
clear and involve a heavy capex injection in order to build enough processing capacity to reach
125mlbs per year. The current Johnson Camp SX/EW gets them to 25mlbs and that’s fine, but
it’s a milestone and by no means the goal. The goal at MIN is much larger, the goal is that table
above so don’t miss the forest for the trees. This is a project that, as per its feas, once mature
will produce 2.165Bn lbs copper over 24 years. Up and fully functioning, MIN expects Gunnison
to produce 125m lbs copper per annum (and that’s “Five Nines” copper, 99.999% purity with
minimal TC/RC) and at a cash cost that’s up for debate, but even if their U$1.24/lb and
U$1.33/lb numbers from Life of Mine AISC are low, they aren’t that low and I’d expect a range
that wouldn’t move over U$1.80/lb unless input costs start to rise considerably. And for the
record, in our treatment we opt for the MIN base case assumption that needs the most capex
12

and provides the most IRR, the one that assumes they eventually build their own H2SO4 plant.
Friday’s reaction was classic small-thinking retail and a world away from the reality of MIN in
2021. Let’s now return to the subject of the recent bought deal financing at 95c, which started
as a $20m book and closed with gross proceeds of $31.57m. Do you think the large money that
bought the deal was unaware of the company plans? Do you think that’s the first time CEO
Twyerould has been on zoom to explain how they are fixing the CO2 issue? The insto money
was well aware of most of information we learned last week and they were happy to get on at
95c, you guys sold the stock down from 82c to 79c on what was middling volume at best (1m
shares on the MIN.to ticker, plus another 290k on the active and liquid OTC ticker EXMGF).
Excelsior is worth far more than 79c, 82 or 95c here’s the simple math: With the share count up
to 274m and this weekend’s C$0.79, the market cap is currently C$216.5m. However, as the
recent financing came with warrants that we should expect made whole, a better real world
valuation of MIN.to this weekend is its fully diluted market cap of C$260.7m (U$208.6m at
house forex 0.8/1). Compare that company valuation with either of these lines of simple math:
2.165Bn lbs copper X (U$3.00/lb – U$1.80/lb) =U$2.598Bn
That LoM production result doesn’t give a final NPV, but today’s market cap is 8% of the
expected margin of net cash flow minus “the financials” (e.g. loan payments, taxes) even if
costs rise 20% and copper drops to U$3.00/lb. Some more math:
125m lbs copper X (U$3.00/lb – U$1.80/lb) =U$150m
125m lbs copper X (U$3.50/lb – U$1.80/lb) =U$212.50m
125m lbs copper X (U$4.00/lb – U$1.80/lb) =U$275m
125m lbs copper X (U$4.50/lb – U$1.80/lb) =U$337.50m
Those aren’t expected top line revenues, those are EBITDA on a single year of MIN working at
full capacity. Due to the nature of the mine, as it starts small and then after Proof of Concept
gets big, the initial capex number (U$46.9m and now mostly embedded) and the sustaining
capex number U$741.8m (if you don’t build the acid plant that drops to U$660.6m) are best
lumped together. In other words, getting that machine which will produce 125m lbs of cheap
copper isn’t a free ride from here, MIN must raise capital in order to build. However, be clear
that those lines of average annual pre-tax earnings include their share of capex and sustaining
capital, over a 24 year basis. Or if you like, in a high copper price environment capital cost
payback could come in the first three years, leaving 21 years of gravy.
Last week was retail throwing a hissyfit about a story they either don’t understand, or shouldn’t
be involved in. My own issues with the company are minor compared to the false scandals
around MIN last Friday. They are less “if” and more “when”, because in March 2019 when I
went on site visit MIN said they would need around a year to iron out glitches. With leeway and
goodwill they are a year behind schedule, that year is money. Also money is the capex required
to make up production shortfall. The announcement last week that MIN would add nine wells to
the array in order to get up to 25mlbs and fill the Johnson Camp SX/EW. This brings the
implication that the wells will now only run at around 80% of their previously theorized
production rate. That’s not a major issue at this because the copper is still modelled to comes
out as planned, just less quickly than expected. Hence, more wells to get to the first milestone
run rate and we’ll see how much they need to expand to get to 125mlbs later, but it’s less of an
issue than it might seem.
Conclusion: We wrap up today’s note with a faux Q&A.
Has Excelsior been disappointing so far? Yes
Is its slow ramp up of concern? Not any more
Will they get to 25m lbs? Yes, but that was never the point of owning the stock
So what is the point of owning it? Once MIN has proof of concept, it goes to market in order to
raise upwards of U$700m in order to build its big mine. At that point, the share price would
have matured into a future expectation of 125m lbs per year at a tiny cash cost for two
13

decades, it will no longer reflect the doubts of people who have decided they do not want to
understand. Fortunately, the people who funded MIN to the tune of over $30m recently have a
bigger and better say on whether this project will succeed, we should see that reaction begin
this week in the stock price. Last week’s presentation brought a double benefit; first it cleared
up where MIN is and what they will achieve. They need more time yes, but proof of concept is
now at hand and with that, it doesn’t really matter whether they reach 25m lbs before the big
debt financing begins. Doubts assuaged, it’s much easier to hold the stock and that brings in
last week’s second benefit, it loosened a few hands that should not have been here. FWIW I
think MIN.to is a tremendous near-term trade opportunity at this current price but it’s not why
I’m here, this is to see the fruits of an investment. MIN has the money and know-how required,
last week bought it the time even as the impatient leave. Eyes on the prize because with this
stock, the prize is big indeed. Hold it, add to it, but MIN.to is not a sell at this price.
Stocks to Follow
Before the real stuff, many of you spotted the percentage change column had several errors in
last week’s edition (and there was a basic number error that did not affect the rest of the table
in one of the NGD charts, as well). The reasons are tedious and connected with formatting
problems this last Sunday evening, however the mistakes were mine and I must apologise. Rest
assured that all numbers are correct this weekend*.
The 14 open positions on the Stocks to Follow list returned a strongly positive balance last
week, with just three losers (TMQ, MIN.to, RYR.v) and two others UNCH (AUL.v, TORO.v). All
the others were winners, the best movers were Minera Alamos (MAI.v up 12.0%), Great Bear
(GBR.v up 10.9%) and Copper Mountain (CMMC.to up 10.7%) with other names bubbling under
the 10% line. Nice to report such a week.
We currently have 14 open positions on the Stock to Follow list, one below our maximum. Six of
our stocks are in the green, eight are in the red.
*crosses fingers
company Ticker this week Avg Price Reco date Current PPS Gain/Loss% Notes
TOP PICKS
Minera Alamos MAI.v STR BUY C$0.21 13-Oct-19 C$0.56 166.7% New $1.14 tgt Aug'20 #1 idea
Rio2 Ltd. RIO.v STR BUY C$0.83 22-Apr-18 C$0.79 -4.8% $1.58 tgt, bot again Nov'20
Recommended stocks (In order of preference)
Copper Mountain CMMC.to STR BUY C$1.40 22-Nov-20 C$3.30 135.7% Added Dec'20, trade for FY21
Trilogy Metals TMQ STR BUY U$1.84 15-Sep-19 U$2.21 20.1% Added Dec'20, Cu for 2021
Strategic Metals SMD.v STR BUY C$0.40 31-Jan-21 C$0.395 -1.3% Asset $ trade, proj generator
New Gold NGD STR BUY U$0.76 9-Feb-20 U$1.73 127.6% 3q20 tgt $2.80
Excelsior Mining MIN.to STR BUY C$0.98 10-Mar-19 C$0.79 -19.4% Delayed, but still great value
Royal Road Min. RYR.v BUY C$0.155 17-Mar-19 C$0.345 122.6% Model paying off in Nica
Great Bear Res GBR.v BUY C$15.83 26-Aug-20 C$15.50 -2.1% M&A major tgt, added IKN590
Orezone ORE.v BUY C$0.79 21-Jun-20 C$0.97 22.8% M&A now, or re-rate later
Aurelius Res AUL.v spec buy C$0.075 28-Jun-20 C$0.045 -40.0% Drillbit good to date, spec buy
Pucara Gold TORO.v hold C$0.65 4-Oct-20 C$0.27 -58.5% Strike One
Minera IRL MIRL.cse hold C$0.195 22-Jul-12 C$0.145 -25.6% hold until further news
Long-term non-mining hold
Mene Inc. MENE.v LT Hold C$0.65 6-Dec-20 C$0.58 -10.8% LT bet on jockey&horse,will add
14

Closed in 2021 closed close price
Fiore Gold F.v jan'21 C$0.98 21-May-20 C$1.17 19.4% closed as part of rebalance
Norsemont Mining NOM.cse feb'21 C$1.55 6-Sep-20 C$0.70 -54.8% Cut loser to reduce Au exp.
Element 29 Res ECU.v feb'21 C$0.49 7-Feb-21 C$0.54 10.2% Cut Peru exposure
Kuya Silver KUYA.cse feb'21 C$1.66 8-Nov-20 C$2.51 51.2% Cut Peru exposure
2015 to 2020 annual closed positions in appendices below, 2009 to 2014 closed positions in editions IKN553 or earlier
Now for some notes on covered stocks:
Copper Mountain (CMMC.to): A good week. More, please.
Minera IRL (MIRL.cse): Ladies and gents, we need to talk about Minera IRL (MIRL.cse). As
well as publishing its newsletter to stakeholders last week, Minera IRL CEO Diego Benavides
gave an update to a third party on timelines and progress for Ollachea. He told the thir party
that Haywood had finished its DD, were happy with the asset and are now working on a
sales/marketing strategy. This is good, but next point is less so, MIRL now has a contract with a
combination third party to produce a 43-101 pre-feasibility study for the current and to date
formally undisclosed mine plan. This is the one that CEO Benavides didn’t do under 43-101
when he should have a couple of years ago, now we hear that the 43-101 (on which will
certainly rest any sales or marketing plan) will take another four months to produce!
We are now in March 2021, that means July 2021 and knowing the way this company works,
let’s be honest and call that August. Which means that before MIRL can even start to market
itself, a full year has ticked by on the maximum two year timeline to make good the U$70m
COFIDE debt, else lose the asset.
We need to be honest; anyone looking to buy or develop Ollachea must now be thinking about
waiting one more year and dealing at a substantial discount directly with COFIDE. In other
words, due to the continued incompetence shown at managerial level by MIRL, we are again
facing the existential danger of losing Ollachea outright. This is the team and CEO who told
anyone who would care to listen that the buyers were lined up for Ollachea, all they needed to
do was settle with COFIDE. As 2020 rolled into 2021 and MIRL contracted Haywood for sales
and marketing of the company, we on the outside got all the confirmation required of that new
extra layer of deception and lies. There was no outside buyer, it was a fabrication from a CEO
who did precisely nothing to forward to development of Ollachea for years on end while all the
time pretending otherwise.
The forfeiture of Ollachea is now a possible again, but at least it’s only the worst case scenario.
However, in real terms the delay also means any deal reached to develop Ollachea by MIRL will
come from an obvious position of weakness and that is our problem, this latest and
unfathomable delay will surely drop the deal price for Ollachea (whatever deal be reached) and
that reflects in the company share price. Or put simply, Ollachea may be “worth a billion” (as its
blowhard CEO once pontificated to the press), but it remains to be seen what percentage of the
total Net Asset Value gets to its equity price. The way things are going, that percentage of the
eventual pay-off is becoming less and less.
Something needs to be done about Minera IRL and it needs to happen quickly. CEO Benavides
either doesn’t realize the danger he has dropped his company in again, or he simply doesn’t
care and is running out the last years of a healthy cash salary (with a 3X Change of Control at
the end of it). I made my position crystal clear last year and the only thing that’s changed is the
entrenched nature of CEO Benavides has become apparent (recall that joke of an AGM), I do
not see why we are forced to wait until July 2021 minimum (more likely post-Labor Day,
Northern summer vacays etc), by which time the clock is ticking loudly in everyone ‘s ears.
Are there any other concerned shareholders out there? And with Peru’s political scene looking
shaky, I confess the temptation to dump and move on. It’s not a strong one to date and I
15

certainly wouldn’t sell a single one without plenty of warning (and space for others first).
Minera Alamos (MAI.v): In a brief exchange with MAI President Doug Ramshaw yesterday
Saturday, your author learned that Ramshaw is keenly aware there’s been a lack of news
coming out of the company recently. However, he expects that to change starting at the end of
this month and then the news will start to flow.
Top Pick and so cheap, it’s laughable. Buy this before any other IKN Weekly idea.
Mene Inc (MENE.v): News Friday, 12 March 2021 (6) and instead of me, you get two quotes
from the presser:
“…it has entered into a debt retirement agreement with a private institutional lender
(the “Lender”). Pursuant to the debt retirement agreement the Company will, subject to
receipt of approval of the TSX Venture Exchange, issue an aggregate of 9,920,635
common shares for deemed consideration of $5,000,000 ($0.504 per common share),
and make a cash payment of CAD$5,057,500 (together with any accrued and unpaid
interest to the date of completion of the debt retirement transaction), in consideration
for the retirement of a total of $10,057,500 in principal and accrued liabilities owing to
the Lender (the “Debt Retirement”).
And:
“We are grateful to one of our first institutional investors for supporting Menē’s growth
in our early days of business with a transformational $20 million gold backed loan. That
capital allowed Menē to scale our business and grow our customer base with minimal
dilution to shareholders. With this repayment, Menē has significantly improved its
balance sheet and has welcomed a strategic investor into our equity capital structure.
Menē is now well positioned to deliver sustainable growth to shareholders into 2021
and 2022 without the need to raise additional equity or debt capital. Our remaining
outstanding debt is owed to Goldmoney Inc. which is strategically aligned with our
long-term objectives,” said Roy Sebag, Founder and CEO of Goldmoney Inc.
The share dilution is the downer, but even that isn’t too dilutive as it adds to 244m shares out.
This is good for three reasons. First, it makes the balance sheet look a lot better. I’m not going
to do detail on MENE until it publishes its annuals (next month) so here’s the liabilities chart as
at 3q20 (its last reported quarter):
MENE.v: Liabilities Breakdown per qtr
40
35
30
25
20
15
10
5
0
16
81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3
source: company filings/IKN ests
srallod
fo
snoillim
note payable
other liab
borrowings
The grey area is the debt that is now all gone, while the orange columns show the “friendly
debt” MENE has with parent-esque company, GoldMoney. Second, the comments by CEO Sebag
indicate the company now has enough money to self-support through 2021 and at its rate of
growth, by 2022 it should start to deliver true net profits. Third, there’s now a lot less to hold
the stock price back, as word of a deal in the works involving equity and a large position will
cause a chilling effect on the stock price. That’s now gone and indeed, MENE had a good week
all told. As it happens, I didn’t act on my thoughts last weekend and buy any MENE at the early
week lows, so the position and cost average remain unchanged. Kicking myself slightly about
missing the 52c and 54c, knowing what we now know about the financially more solid MENE.
Great Bear (GBR.v): GBR probably moved up more for the news that dealflow had arrived in

the sector than for its own drill results, last week’s offering (7) the headline cuts of 15.5m of
29.17 g/t Au and 15.8m of 18.08 g/t Au “From Bedrock Surface at its main LP Fault target at
Dixie. Yes they are magnificent results, but GBR longs are fatigued. Instead NEM buying GT
Gold is the type of deal we require (Big Tier One buying Canadian exploreco) and the stock is
going to move in its own mysterious ways, being a plaything of much deeper pockets. We retail
get to tag along for the ride (hopefully with a good entry point to make any volatility easier),
then wait until the binary result of buyout/no buyout appears. Very simple to hold this stock
and while it could sell at any moment, GBR’s management is determined to stick to its plans
and drill its multi-million dollar program in order to extract as much value as possible. I for one
certainly hope Chris Taylor doesn’t get his way this time.
The Copper Basket
After ten weeks of 2021, The Copper Basket shows a gain of 23.38% to level stakes.
company ticker price 1/1/21 Shares out Market Cap current pps gain/loss%
1 Solaris Res SLS.to 6.08 104.67 748.39 7.15 17.6%
2 Copper Mtn CMMC.to 1.81 207.5 684.75 3.30 82.3%
3 Oroco Res OCO.v 1.85 185.11 362.82 1.96 5.9%
4 Marimaca Cop MARI.to 3.25 64.358 286.39 4.45 36.9%
5 Western Copper WRN.to 1.57 135.6 242.72 1.79 14.0%
6 Excelsior Min. MIN.to 1.12 239.063 188.86 0.79 -29.5%
7 Amerigo Res ARG.to 0.80 180.77 182.58 1.01 26.3%
8 Regulus Res. REG.v 1.07 101.85 121.20 1.19 11.2%
9 Chakana Cop PERU.v 0.60 117.2 63.29 0.54 -10.0%
10 C3 Metals CCCM.v 0.115 375.17 56.28 0.15 30.4%
11 Aldebaran Res. ALDE.v 0.455 93.64 47.76 0.51 12.1%
12 Doré Copper DCMC.v 1.00 40.938 37.25 0.91 -9.0%
13 Element 29 Res ECU.v 0.45 66.7 30.02 0.45 0.0%
14 Crown Mining CWM.v 0.105 87.53 24.95 0.285 171.4%
15 Chibougamau CBG.v 0.165 46.695 7.00 0.15 -9.1%
NB: All stocks in CAD$ Portfolio avg 23.38%
Another simple week to analyze, copper
The Copper Basket 2021, weekly evolution
moved back up from the U$4.00/lb line and
35%
the world decided copper stocks weren’t so
30%
bad after all. There were three week-over-
25%
week (WoW) losers (MIN.ro, ARG.to,
20%
ALDE.v) and two others remained
15%
unchanged (REG.v, CBG.v), so it wasn’t
10%
one-way traffic but ten winners is a lot and
with the sector rising on the tide of spot 5%
copper, most of the gains were similar and 0%
there was only one double figure
percentage change, so Copper Mountain
(CMMC.to up 10.7%) did what it was
supposed to do.
Here’s this weekend’s preferred copper price chart, the ten day version of the May contract and
one line drawn in by these hands, that of the U$9,000 per metric tonne price. The rally came as
expected, copper is still in its perfect storm and no amount of jawbone changes that.
17
ts1
naJ
ht01naJ ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht7ram ht41
source: IKN calcs

The macro market commentaries were all about copper and the dollar, so as we’ve covered the
general thrust (watch those yields) and there are only so many ways I can exhort you to be
long copper in this perfect storm scenario for the metal, let’s move on this weekend to the
regular world copper inventories section:
 We saw another increase in world aggregate inventories last week, though the 18,311
metric tonnes (mt) added was a more modest total and brings with it another hint of
supply drought. The total of the three systems comes to 305,594mt this weekend, still
drum-tight compared to previous years.
 At the SHFE, another 15,067mt was added to stocks but that’s much smaller than the
post-New Year dumps of 30k per week. This weekend’s total is 163,025mt and while in
the right direction, we need to see more lumpy stocks arrive before any thoughts of
supply drought can be rested.
 The LME saw another small add, up 2,800mt as the copper action passed it by and
stayed in Shanghai (the desk running that billion dollar Cu long must have had an
interesting Thursday). The message is the same as last weekend, the new total of
79,025mt is still near historic lows and the signal from LME is of copper’s extreme
tightness.
 At the Comex, stocks rose for the second week running and added a small 444mt,
reaching 63,544mt this weekend.
Here is the Shanghai-only inventories chart, the last three dots on the right of the line
beginning to indicate a stall in the re-stocking. Consider the gaps between the dots during one
of the normal annual SHFE re-stocking spikes, now look back at the potential for stunted
growth in 2021. Not calling this yet, but it’s too early for SHFE to stop collecting copper. The
implications are bullish for the price, of course.
Shanghai Futures Exchange Warehouse Stocks, 2014 to date
400000
350000
300000
250000
200000
150000
100000
50000
0
18
31'13ceD ht9 ht81 ht72 ht5tco ht41 dn22 5102
dr3yam
ht21 ht02 ht92 ht7bef ht71 ht62 ht4peS ht31 ht92 ht9 ht81 ht72 7102
ht5von
ht41 ht52 ht01 ht91 ht82 9102
ht6naJ
ht71 ht62 ht4gua ht31 dn22 0202ts1ram ht01 ht91 ht72 0202ht6ced ht41
Mt Cu
|
source: Cochilco

The direction away from the stocks low is still the right one, the doubt is now about
momentum. Another big stock arrival would do it good, what we’ve seen so far is akin to the
TIPS10 yield normalization, it will need more in the tank to make a difference. But aside from
the covered copper stocks (above), I don’t have much else for you in this section today. Copper
is bullish own copper stocks, now for notes on just two of our basket companies:
Aldebaran (ALDE.v) The big price swings look
interesting and make it a potential volatility trade, but
the volumes are too small and the real reason for the
volatility is apathy; half the time ALDE runs a bid/ask you
could drive a truck through.
Doré Copper (DCMC.v): The second best climber of
the week is getting plenty of promptional push from the
good and the great of the Canadian marketing
community, which is interesting. The company is drilling
at one of its targets (Corner Bay) and expects to bring results plus an updated resource by the
end of this quarter, but the news ten days ago (8) that the main plan is to de-water the Joe-
Mann and Cedar Bay gold mines is more interesting. Here, the company has to commit time
and capital to just the permitting and planning process, then once the permits arrive they can
move to action in 2022. That’s not a story I’m rushing to own today, so the marketing seems to
have worked to date.
The Producer Basket
After ten weeks of 2021, the Producer Basket shows a loss of 11.39% to level stakes.
company ticker price 1/1/20 Shares out Mkt Cap (U$Bn) current pps gain/loss%
1 Newmont NEM 59.89 803.36 47.42 59.03 -1.4%
2 Barrick GOLD 22.78 1779.04 36.15 20.32 -10.8%
3 Agnico Eagle AEM 70.51 242.99 14.37 59.12 -16.2%
4 Kirkland Lake KL 41.27 272.984 9.42 34.52 -16.4%
5 Kinross Gold KGC 7.34 1260 8.47 6.72 -8.4%
6 Pan American PAAS 34.71 210.17 6.74 32.07 -7.6%
7 Endeavour Min EDV.to 29.62 246.2 5.00 24.39 -17.7%
8 B2Gold BTG 5.60 1064 4.80 4.51 -19.5%
9 Alamos Gold AGI 8.75 392.73 3.16 8.05 -8.0%
10 Pretium Res PVG 11.48 187.254 1.98 10.56 -8.0%
Prices in U$ except EDV.to (share price in CAD$ and mkt cap in approx USD) Port. avg -11.39%
There were nine winners that went up largely as a group, the biggest wins were all under 5%
on the week. However, there was one loser in the shape of Endeavour Mining (EDV.to) (on no
news) and B2Gold only improved by a penny, so the mid-cap picks were the problem. The other
small note from last week is the relative underperformance, The IKN producer basket
components are picked to compete against GDX but so far in 2021 they’ve failed to do so and
last week, the underperformance got worse.
The 2021 Producer Basket: Percentage difference between
GDX benchmark and basket (negative = IKN basket ahead)
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
19 ts1
naJ
ht01naJ ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht7ram ht41
The 2021 Producer Basket: Weekly performance and 4%
comparative to GDX control
0%
-4%
-8%
-12%
-16%
-20%
source: IKN calcs, NYSE/Nasdaq/TSX data
ts1
naJ
ht01naJ ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht7ram ht41
basket
gdx control
source: Google, IKN Calcs

Everything is still red YTD, too.
StreamerWatch: Our small theory that the royalty and streamers are the wrong place to be in
2021 took a small knock last week, as our three examples of small (MTA.V) medium (SAND)
and large (FNV) streamers and/or royalty plays all rallied well.
A particularly impressive bounce from Metalla (MTA.v), which for what it’s worth is due to file
its annuals soon.
The Tiny Dogs
After ten weeks of 2021, the Tiny Dogs show a gain of 10.65% to level stakes.
company ticker price 1/1/21 Shares out Mkt Cap current pps gain/loss%
Antler Gold ANTL.v 0.205 61.348 12.88 0.21 2.4%
Aston Bay BAY.v 0.045 163.975 7.38 0.045 0.0%
Constantine Met CEM.v 0.17 45.4 10.22 0.225 32.4%
Contact Gold C.v 0.115 240.757 25.28 0.105 -8.7%
Golden Pursuit GDP.v 0.22 40 6.80 0.17 -22.7%
Manitou Gold MTU.v 0.045 230.79 18.46 0.08 77.8%
Precipitate Gold PRG.v 0.240 106.241 19.12 0.18 -25.0%
QC Copper QCCU.v 0.315 105 23.10 0.22 -30.2%
Red Pine Expl RPX.v 0.040 477.22 33.41 0.07 75.0%
Warrior Gold WAR.v 0.090 91.818 8.72 0.095 5.6%
Prices in CAD$, data from TSXV basket avg 10.65%
This section attempts to track the tinycap mining sub-sector of the market, our ten companies
chosen under the following criteria to put together a list representing the state of play in the
sub-sector of tinycap exploration company stocks. At least, that’s the plan.
 Market capitalization of under $20m. They have to be tiny. In two cases I’ve stretched the window a
little and allowed sub-U$20m market capper in that are just over the C$20m level, but the spirit is unaltered.
 A “non broken” stock price and project story. There are literally hundreds of tinycap juniors of the right
size, but it was a particularly depressing exercise to trawl through the whole of the TSXV and find companies
that are small enough, but with life in them. The vast majority of sub-$20m stocks are broken stocks, either
traded to death on the exchange or with projects that are a bust or with entrenched management more
interested in their monthly paycheck than anything else.
 Likelihood of meaningful newsflow in 2020. This connects to the company’s “unbroken” status, as we
want news and potential catalysts from companies with projects that can work.
 Decent management if possible. When you are down among the little guys it doesn’t pay to be too
choosy, but still I preferred companies that have teams or people with good peer reputations.
There were two uppers (ANTL.v, PRG.v) and two downers (GDP.v, QCCU.v) on our list of ten
last week, which means a full six were unchanged. In fact, the only change worth mentioning
was the big up in Antler Gold (ANTL.v up 31.3%) as, by and large, the investment world
ignored the tinycap stocks over PDAC week.
20

Antler Gold (ANTL.v): Up big this week, but the move is technical in nature and context is
required because to date in 2021, ANTL has failed to break its chronic downtrend:
Until that downtrend is broken, not much reason to own. The only way the above chart
changes direction is with real news.
Manitou Gold (MTU.v): An exploreco has three ways to explain a sub-standard drill assay;
they can admit it, they can just publish it and pretend that in fact it’s good, or they can go to
the effort of explaining why the results are much better than they look at first sight. MTU went
the third route with its NR on Tuesday (9), explaining that the way in which grades increased at
depth could only be a good thing and there’s surely much more to come from…(etc). They just
about got away with it too, with the price UNCH on the week and along the way, managing to
fend off a larger seller on Thursday. Agnico sponsors here, Agnico sponsors the re-formed Red
Pine (RPX.v), these projects aren’t so far away from each other. That’s unlikely to be a
coincidence.
NB: Please be clear that The Tiny Dogs is NOT a list of recommended tinycap stocks. It is a list of companies with
market caps of under $20m offering a reasonable representation of the wider tinycaps market. It is possible that in the
future I may buy shares in one or several of these stocks, but at the moment both my opinion and my wallet are strictly
neutral.
Regional politics
Brazil: Lula changes everything
Monday in Brazil brought a system shock to its political infrastructure and serious concern to
the door of President Jair Bolsonaro. From almost out of nowhere, a Brazil judge quashed all
convictions brought against ex-President and PT (Worker’s) Party head Lula da Silva, among
other things calling his convictions a political scandal of historic levels. The reversal still needs
to be ratified by the Supreme Court, but that now looks likely and Lula wasted no time in going
on the political offensive, with the 2022 elections in mind. We allow Reuters to take over (10)
as it reports on Lula’s first major policy speech post-quashing, a…
“…long, impassioned speech, delivered under a banner proclaiming “Health, jobs and
justice for Brazil” in the union where his political career took off in the 1980s, had the
feel of a campaign launch.
“This country is disorganized and falling apart because it has no government,” he told
the audience at the metalworkers union in Sao Bernardo do Campo, comparing the
current economic crisis to strong growth and falling inequality when he led Brazil from
2003 until 2011.
Lula attacked Bolsonaro directly for his record in handling the coronavirus pandemic,
especially for delays in obtaining vaccines and for his public dismissal of their
effectiveness. Brazil has lost nearly 270,000 people to COVID-19, the worst death toll
outside the United States, as local variants push the country’s outbreak into its worst
phase yet.
“Many of these deaths could have been avoided,” Lula said.
21

The former president’s speech prompted an immediate reaction from Bolsonaro, who
defended his handling of the pandemic.
“(Lula’s criticism) is unjustified. He is now beginning his campaign, but has nothing
good to show. Their campaign is merely to criticize, lie and promote disinformation,”
Bolsonaro told CNN Brasil.
The decision came as such a surprise that it reportedly caught Bolsonaro and his team off-
guard as well, the mood in the Presidential Palace all week despondent. For example, a day
after the speech in which Lula said, (11), “Don't follow any imbecile decisions by the president
of the republic or the health minister: Get vaccinated”, Bolsonaro and all his cabinet attended a
public function all wearing masks, rare for a man who refuses even to be vaccinated.
Meanwhile data on Covid-19 in the country gets worse and not better, the last few days in
Brazil seeing averages of 2,000 deaths from Covid-19 per day and reports of full saturation of
.
hospitals, even in the large and developed infrastructures of Rio and Sao Paulo
Peru: Latest opinion polls
This weekend saw two national level opinion polls from companies with reasonable reputations,
you now get to hear about both.
The first poll came from the reputable IEP and was commissioned by national centrist
newspaper, La Republica. The graphics and links are from an aggregation site that puts
together all published polls (useful for avoiding paywalls), here’s the IEP visual (12):
They call Yonhy Lescano in front, with the surging Rafael Lópex Aliaga in second place, then
the rest battling for third. However, the poll also noted 31% undecided, 11% don’t know/no
opinion, and 2.2% who would spoil their ballot paper. Also, this was a pure telephone poll of
1,220 people and happened between March 4th and 8th, so the methodology isn’t the strongest
and the results may be a little behind the times in this very dynamic vote.
The second poll came out this morning Sunday March 14th, IPSOS is normally Peru’s pollster of
22

choice and it was commissioned by El Comercio (Peru’s newspaper of record, also right wing
establishment). Here’s that visual (13):
This second poll is interesting due to its technical data, as it’s the first one this year which didn’t
use telephone/internet to conduct the questions. All were face-to-face interviews (1,206 people
from all parts of the country, margin of error +/-2.8%) and they included a mock-up of the
physical vote, which is often cited as the best way of getting a handle on spoiled ballots (of
papers left blank). It was also taken between March 10th and 11th and by that time, both
Forsyth and Lópex Aliaga were confirmed on appeal as contenders.
The results of this solidly constructed poll are good news for Yonhy Lescano of course, but also
positive for Forsyth as he’s managed to keep hold of the voter intention he was left with after
his legal battle. Below, López Aliaga doesn’t have the momentum that others make him out to
have (he is a decidedly “Lima Candidate”, they tend not to go down well in the provinces of
Peru) and Keiko Fujimori is stuck with her hardcore and hard ceiling, 8% seems a tough nut to
crack. Then comes Verónika Mendoza, who at 8.4% is only “down the field” on the visual
interpretation of that chart, the numbers tell us it’s very close.
Discussion: It’s still extremely difficult to call this election, with less then four weeks to the vote
there are now four candidates with real chances of making it to the second round. We can now
discard Keiko Fujimori (ceiling), Daniel Urrestí, Hernando de Soto and the 11 other minor
candidates down the list (honestly), this is now between four players:
Yonhy Lescano: If this weekend’s IPSOS poll is accurate, he’s successfully consolidating the
“least worst” vote and is gaining consensus, even among the Lima chattering class as an
“experienced member of Congress” (i.e. easily manageable).
Rafael López Aliaga: Hard right wing, his “Peru’s Trump” image has launched him into
contention. How right wing? He opposes LBGTQ rights (of course), abortion (a vote winning
position in Peru) and uses the epithet “Communist” against nearly all of his political opponents
liberally (if you pardon the pun). A member of the Catholic group Opus Dei, he has practised
celibacy since the age of 19 years old and also auto-flagellates as part of his religious discipline.
When asked about this during a radio interview last week, he replied that he was in love with
the Virgin Mary and anytime he sees a beautiful woman in the street, he thinks of Mary.
George Forsyth: The weekend’s poll will cheer “Forzay” up considerably, he has managed to
keep enough of his support to allow thoughts of momentum in a late campaign. Young,
personable and very much part of the Lima elite, he would be pliable and go down well with the
people who run the country.
Verónika Mendoza: In the last few days, every Peruvian with whom I talk politics has said the
23

same thing; They are all looking at “Vero” holding a candidates position and the ones with a
political brain remember the issue first mentioned on these pages three editions ago as part of
the main “Sell Peru” note in IKN 613, dated February 21st:
Verónika Mendoza voter intention for 2016 election 18.7%
20%
18% 15%
16%
14% 12% 12%
12%
9%
10%
8%
6% 4%
4% 2% 2%
2%
0%
24
51'ced
01-5
61'naj
41-21
61'bef
81-31
61'ram
01-5
61'ram
71-51
61'ram
42-22
61'rpa1/ram03 ht01
noitcele rpa
source: IPSOS/wikipedia
The way Verónika Mendoza picked up votes in the final stretch of the 2016 election is on
everyone’s mind as they watch the “I Vote For Vero” campaign begin to roll out in Lima-centric
social media and reach out for the young vote.
The nerves are for two reasons, firstly she is the only candidate that would cause real damage
to the Peruvian mining industry as it stands today (she would tell you it would mean
improvement for the country and not damage, but the share prices of listed Peru companies
would tell a different story). Secondly, she’s in prime position to attract the student vote, those
newly militant Peruvians who stopped a quasi-coup last year by sheer weight of numbers on the
streets of Lima, but are now being asked to choose between the samo samo candidates
offering the same alternatives. All except Mendoza, who would dissolve the (unloved)
constitution and being real Socialist policies to bear on the country. The numbers of
undecided/don’t know/won’t vote still looms large over this election with less than a month to
run, in all likelihood it will stay that way until the day.
Finally, a look at the comparative chart of South America index-tracker ETFs, including Brazil
(EWZ), Colombia (ICOL) and Chile (ECH) shows that Peru (EPU) is beginning to show some lag
on the markets as the election, vote Sunday April 11th, comes up on the horizon.
A second round that doesn’t include Mendoza would see any weakness on nerves disappear on
Monday April 12th, so it’s good to see at least some of the risk now being baked into the pie
today that could bring benefit tomorrow, the market no longer blithely assumes a pro-business,
pro-mining outcome to next month’s election in Peru.
Ecuador Presidential election update
A ruling handed down today Sunday March 14th put the final nail in the coffi of Yaku Pérez’s
chances of fighting the second round run-off, when the country’s Electoral Tribune handed
down a verdict that his call to recount the first round or declare it null and void was “a
subjective and contentious electoral recourse” and quashed the idea (14). Therefore, and

despite there being plenty of evidence that ballot boxes were stuffed against him, the second
round will happen between Andrés Arauz and Guillermo Lasso. That second round happens on
the same day as Peru’s round one, April 11th, and the early run-off polls put Arauz in the lead
but not by as much as many people expected, difference around five points.
As noted last weekend, the threat to mining in Ecuador is no longer at the Presidential level but
at the level of governability. Arauz (or Lasso) will get zero honeymoon period from the people
of Ecuador and the rural jungle zones are Pachakutik strongholds, places where national rule of
law means little without previous negotiations. A newly powerful Yaku Pérez (who is getting
sniped at by all sides now he’s a political target of worth, LatAm’s progressive left supporters of
Arauz have a special hatred for him) and his large Congressional bloc are not going away.
Colombia to auction copper concession blocks
This a direct lift from this Bloomberg report (15):
Colombia is looking to reduce its dependence on oil and coal by developing copper
deposits ahead of a forecast surge in demand for metals used in rechargeable
batteries.
Authorities plan to award five copper exploration blocks by the end of June in Cordoba
and La Guajira provinces, where much of Colombia’s coal is mined. U.S. and
Canadian juniors, as well as firms already operating locally, are leading the interest,
Mines and Energy Minister Diego Mesa said. A streamlined permitting process to
shorten the path to production is among the incentives.
“Colombia could become one of the main producers of gold and copper,” he said in an
interview Thursday. “We know that the copper belt starts in Chile, continues through
Peru, finishes in Panama.”
This auction is for concession lands that were (stupidly) tied up by AngloGold Ashanti for many
years before being handed back. Now re-packaged, I expect Cordoba Minerals (CDB.v), the
junior operating the Alacrán project in the Cordoba region of Colombia and now financed by
Robert Friedland, to be one of the most interested bidders.
Argentina: Chubut mining and a Presidential near-miss
The Chubut mining issue exploded onto the Argentina political scene once again last week,
three (or perhaps four) separate episodes all pushing the Navidad project.
First and last weekend (should have mentioned it in IKN615, oops), the national Catholic
Church came out with an official position supporting the Chubut Catholic Church’s position
against the development of mining in the province. This carries political weight, as the national
church has no compulsion to follow up so actively with a provincial position and despite all its
local shortcomings, the Church position still carries plenty of weight with Argentina’s electors
and particularly in the provinces.
The regional Chubut PJ Party has started to sanction those of its members who supported or
who still deem to support the pro-mining cause. So far, it’s lost one congress member who
refuses to change his position and continues to support the project, but that’s it. Even without
the other political goings on (see below), this and the position of the Church against mining in
Argentina would probably be enough to end the chances of the “Zonification” law project from
becoming law.
That’s because the anti mining side of the debate has got militant, and then some. First on
Monday, the rumour grew and was quickly confirmed that Governor Arcioni wanted to hold a
snap debate on the “Zonification” mining project the next day Tuesday. Anti-minng protestors
took to the streets and gathered in several strategically important spots, above all the province
Chamber of Congress. With the protests getting rowdy and vociferous, the snap debate was
called of and the anti-miners won a round.
Then on Saturday, this provincial matter exploded onto the national scene in a bizarre incident.
According to reports (and there are hundreds, here one (16)), President Alberto Fernández was
25

doing a helicopter flyover of the large forest fires currently sweeping the Patagonia area (on
both sides of the border, Chile has big issues too). At one point his copter was spooted by a
large group of anti-mining protesters and as the President’s position is national and pro-mining,
he’s now a hated individual. The crowd “started to gesture” at the copter, but apparently (and
this needs to be confirmed, but sounds correct and several sources are saying the same thing),
President Fernández thought they were well-wishers looking to greet him happily and ordered
the copter land. Big mistake.
He left the copter and walked toward the crowd. Suddenly, without any sort of vehicle
protection and only a couple of security detail, he was confronted by a large and angry crowd
that was being cordoned by only a few police officers. The crowd moved toward the President
and finally the danger was seen, officers around him acted quickly, found a vehicle and scooted
him away but, as ex-Veep Pence might recognize, things could have been a lot worse. We’re
glad no serious incident occurred, but according to local witnesses it was a close-run thing for a
time, this local reporter (17) who was on the scene giving a background report on how close
the angry mob got to President Alberto Fernández (to quote the reporter, “the President was a
sitting duck”) and of the improvised rapid escape in the first vehicle to hand. As for President
Alberto’s reaction to having his vehicle stoned as it sped away, he said, “…they are more
worried about the issue of mining (than that of the forest fires), but it’s an issue for the
province and not for me, the people of Chubut must resolve it.” Again, that type of statement is
enough to kill the project alone, no need for the other matters outlined today. The problem now
is that alongside all the polemic PAAS and Navidad has caused in Chubut recently, Argentines
up and down the country are hearing the story of Navidad and Pan American Silver (PAAS) for
the first time this weekend and like it or not, mining is a vote loser in Argentina. At election
time, it even causes drag places as pro-mining as San Juan, Jujuy or Santa Cruz, so for the PJ
electorate in the large conurbations with progressive centrist cultures, it’s kryptonite.
Word is that Governor Mariano Arcioni is going to try to get the debate on the law project on
the agenda for this month of March, any exact date still unknown. However, it’s far more likely
now that he tables the project in order to kill it, the opposition has made it a welter burden
around his neck and Navidad is stopping any other progress (and his own political ambitions).
If, as is now likely, the ‘Zonification’ project fails to prosper and Navidad is unable to be
permitted, it would be a blow to the Federal level mining plans being put together by Mining
Secretary Alberto Hensel, who needs a united front across all “mining provinces” and is not
going to get one.
Market Watching
Bluestone Resources (BSR.to) pays the price of continuity
I’m slightly late to this, the news handed down two Mondays ago and now partially priced into
the stock (BSR opened and closed last week at C$1.76), but a few words are due on Bluestone
Resources and its Cerro Blanco project in Guatemala. A C$2.00+ stock at the start of the year
and nearly the same price just ten days ago, BSR announced news on Monday February 28th
(18) that has pushed it down to this weekend’s C$1.76 where it looks supported (the Lundins
are not averse to mopping markets at their chosen prices). In brief and as you are probably
aware already, BSR under Jack Lundin (fils) has decided to change course and make Cerro
Blanco an open pit mine, rather than the planned and permitted underground operation
envisaged to then. That BSR announced the change with a flurry of trumpets and tried to pass
the news off as good is understandable; they will indeed get better project economics and IRR
from an open pit operation at Cerro Blanco, anyone who takes even the most cursory look at
the resource will see how close to surface it lays. In fact, they may start wondering why it
wasn’t planned as an open-pitter in the first place…
The news last week was indeed mutton dressed as lamb. The issue is structural, as the world
(and Goldcorp (ex-GG), who first tried to build a mine there while still running the Marlin mine
and then sold Cerro Blanco to Bluestone when Marlin closed) knows that while high grading,
the resource has always had continuity issues. Mine plans wouldn’t hand together and the
26

chances a UG would suddenly start mining into waste only was high, so the thinking to simply
strip the overburden away and scoop it all up in an open pit operation makes perfect sense.
The problem is that nobody in their right mind voluntarily rescinds an active permit in a place
like Guatemala without there being very good reason. The permit was for an UG mine and you
can bet, BSR has tried every way possible to make the UG mine work and use its valid permit.
The fact they are willing to go through a permitting process for what would be a highly
contentious mining operation shows a level is despair about hanging the resource together that
would not show if they had a way of making UG work. Now, with an environmentally iffy open
pit mine project on the border of the country with a river next door that runs off into
neighbouring El Salvador and a lake there, this permitting process isn’t only up against
organized and strong opposition inside Guatemala, it promises to be an international affair.
A lot of people laud the Lundin family for being
able to make projects work in politically difficult
locations, one of their recent successes being
Fruta del Norte in Ecuador. This case is very
different, it will be the toughest of tough sells
and until there is clear will from the government
to accept and go through the permitting process
for any open pit mine, the stock will flounder.
Indeed, the last few days of non-action remind
this desk of the way the other Lundin Juniors,
such as Josemaria, go through long periods of
market inaction. A market perform over two
years (the 24 month charts give better reading s
than the 12 month charts, what with the Covid
Crash a year ago), there’s room for weakness in that stock price.
First Majestic Silver (FR.to) (AG) buys Jerritt Canyon
Pre-open on Friday March 12th First Majestic Silver (AG) (FR.to) announced (19) it was buying
the Jerritt Canyon mine, wholly owned by the private Sprott Mining Inc. (i.e. Eric Sprott) and
located in Nevada USA (20). First the bare bones and the transaction summary in FR.to’s NR
does a good job of explaining all the main points:
Under the terms of the Share Purchase Agreement, Sprott Mining will receive
26,719,727 common shares of First Majestic. This represents $470 million in share
consideration based on the 20-day trading volume-weighted average price of $17.59
per First Majestic share on the New York Stock Exchange for the period ended on
March 11, 2021. In addition, Sprott Mining will receive 5 million common share
purchase warrants at an exercise price of $20.00 per share for a term of three years.
Concurrently, Eric Sprott will make a $30 million private placement in First Majestic at a
price of $17.59 per share for a total of 1,705,514 common shares. Upon completion of
the Acquisition and private placement, Eric Sprott, through himself or affiliated
controlled companies, will own 32,925,241 shares, including current shareholdings,
representing approximately 13.1% of the issued and outstanding common shares of
First Majestic.
That also means AG’s share count moves to around 251.4m, putting the market cap at
U$4.22Bn. Finally, if Eric Sprott exercises the $20 warrants his ownership goes up around 2%.
As for the asset itself, Jerritt Canyon is (in)famous for being able to shipwreck mining
companies, as those who remember names such as Queenstake and Veris Gold will quickly
recall. For a long time it suffered from underinvestment and poor worker relations (let’s say,
keeping it diplomatic) but for what it’s worth, the new management brought in by Sprott has
reportedly done a good and diligent job (mostly Kevin Small, who is also a director of Minera
Alamos (MAI.v), but Sprott Mining Inc President Greg Gibson has also taken a more active role
in the last 12 months).
These days Jerritt Canyon works, runs a 4,000tpd mill with Carbon In Leach capture, produces
27

between 120,000 and 160,000 oz gold per year at a fairly high but not prohibitive all-in cash
cost of around U$1,300/oz to U$1,400/oz and has become a steady earner. In other words,
when I saw the news drop on Friday it wasn’t one that got me guffawing at a bad mistake
being made by FR. Quite the contrary, FR is now following the established route used by any
silver mining company that wants to get big. There are examples galore and the top of my head
gives Fresnillo, Pan American, Tahoe and Fortuna without a pause in typing. After its first
gold/silver purchase of Primero (San Dimas), it’s buying a gold mining operation. Not only that,
it’s a producing asset with a substantial amount of Silver Equivalent, because 160,000 oz at a
75/1 ratio is 12m oz AgEq and Keith Neumeyer won’t hesitate a second in using that number.
It’s also in a safer jurisdiction than Mexico and finally, the transaction is no stress on treasury
as the deal is pure paper. The question is on the price of the deal, but a consideration of the
recent price action in First Majestic gives reason even for that:
The 12 month chart of AG next to the silver miner ETF (SIL) and the silver bullion ETF (SLV)
hardly registers the moment in September when Eric Sprott came on board for C$78m at
C$15.60 (now C$20.94), but it shows the kick First Majestic got when inaugurating its dividend
policy in early December. That was sustained and then went into overdrive on all the
SilverSqueeze nonsense, but even though AG gave plenty of the spike gains back it’s managed
to hold onto a lot of them too, thanks in no small measure to its central role in the Silver
squeeze episode plus the tightening relationship the company has with Eric Sprott, the Sprott
empire and the demand delivery games going on at PSLV (which nobody in the serious financial
world cares about, but you cannot tell a silverbug about their metal).
The result is a premium stock valuation compared to peers that’s shown in the last three
months and even if the seller of Jerritt Canyon weren’t Eric Sprott, it makes basic business
sense to swap newly expensive paper for real assets. Therefore yes, the ticket price did look
expensive at first sight but, considering the vendor and his clear desire to get longer First
Majestic, Keith Neumeyer probably recognized a situation of mutual benefit (let’s say) and
agreed to a price that nobody would pay were it cash.
All this aside from the latest headwind to hit AG, its spat with the Mexican tax authorities which
is now making headlines in Mexico. We’re not going to hash over the issue again this weekend,
suffice to say that AG thinks it has paid all the tax it owes from operations at San Dimas and
the Mexican tax authorities don’t agree to the tune of U$500m. It’s either a loophole or they’ll
eventually have to pay, but the decision of AG to take the matter to international NAFTA
tribunal (21) means it is now political fodder and President AMLO has mentioned the case of
“the Canadian miner that doesn’t want to pay its taxes” on several occasions now. That’s got a
lot of pro-AMLO media channels on the case of AG and also casting their aspersions by tarring
the whole of the Canadian mining industry as bad actors.
Last week AG replied with a NR (22) that defended itself (sometimes in a silly way, trying to
make out that it isn’t liable for its purchase) which is only likely to make matters worse and
bring more attention from the President and his government. Not the right fight to pick.
28

The upshot to the deal and the politics is to highlight how expensive AG paper is at the
moment. This deal is logical and understandable, but it doesn’t make that paper any cheaper;
quite the contrary, it now looks vulnerable to the type of market games that Keith Neumeyer
himself assures the world are ruining the capital markets. I remain neutral AG, but if silver
takes a meaningful plunge in the near future, here’s your downside leverage. You may even
consider AG as the short side to a silver pair trade, that stock price is certainly ripe enough and
it now has an asset to digest.
Conclusion
IKN616 is done, we end with bullet points:
 New Gold (NGD) is still a better purchase than Wesdome (WDO.to) at this current price
deck and I can now, at last let the matter rest. Until the prices change.
 But Rio2 and Minera Alamos are better buys than either of them.
 Gold may be in for a rest, but copper is still in the eye of its perfect storm. If you want
a trade vehicle, Copper Mountain is still cheap even after its big move. For an
investment, Excelsior will reward the patient.
I thank you in advance for any feedback. Our Top Pick stocks are Minera Alamos (MAI.v) and
Rio2 Ltd (RIO.v). Flash updates will be sent if required by events.
I wish you good trading fortune, ladies and gentlemen.
Mark
Footnotes, appendices, references, disclaimer
(1) http://https//www.nytimes.com/2021/03/10/us/politics/biden-coronavirus-vaccine.html
(2) https://www.marketwatch.com/story/no-peace-for-markets-until-10-year-treasury-yield-hits-2-strategist-says-
11615577089?mod=mw_more_headlines
(3) https://www.wesdome.com/_resources/presentations/Corporate-Presentation.pdf
(4)
https://register.gotowebinar.com/recording/viewRecording/2827960812746103307/2224798420697500431
/renrutkram@gmail.com?registrantKey=4605878811512036622&type=ATTENDEEEMAILRECORDINGLI
NK
(5) https://www.excelsiormining.com/images/pdf/Presentation/2021/February_25_2021_PPT.pdf
(6) https://www.globenewswire.com/news-release/2021/03/12/2192016/0/en/Men%C4%93-Inc-Announces-Debt-
29

Retirement.html
(7) https://www.juniorminingnetwork.com/junior-miner-news/press-releases/1467-tsx-venture/gbr/94981-great-bear-
drills-29-17-g-t-gold-over-15-50-m-and-18-08-g-t-gold-over-15-80-m-from-bedrock-surface-at-lp-fault.html
(8) https://www.globenewswire.com/news-release/2021/03/05/2187977/0/en/Dor%C3%A9-Copper-Announces-its-
Preparation-Plans-to-Dewater-the-Former-Joe-Mann-Gold-Mine-and-Cedar-Bay-Copper-Gold-Mine.html
(9) https://www.manitougold.com/news/news-releases/manitou-gold-intersects-wide-zones-of-increasing-gold-
mineralization-in-stover-zone-step-down-holes-main-shear-confirmed-along-2-km-strike-length
(10) https://www.reuters.com/article/us-brazil-politics-lula-idUSKBN2B21ZM
(11) https://www.dw.com/en/brazils-lula-slams-bolsonaros-imbecile-covid-19-policies/a-56830620
(12) https://www.encuestas.com.pe/encuesta-presidencial-iep-13-marzo-2021/
(13) https://www.encuestas.com.pe/encuesta-presidencial-ipsos-peru-14-marzo-2021/
(14) https://www.swissinfo.ch/spa/ecuador-elecciones_tribunal-electoral-de-ecuador-niega-recurso-a-candidato-que-
reclamaba-fraude/46447916
the plague.
(15) https://www.bloomberg.com/news/articles/2021-03-12/american-drillers-line-up-to-unlock-copper-riches-in-colombia
(16) https://www.notimerica.com/politica/noticia-argentina-manifestantes-contra-mineria-atacan-vehiculo-presidente-
argentino-chubut-20210313220737.html
(17) https://radiomitre.cienradios.com/un-periodista-de-chubut-relato-el-pormenor-de-los-incidentes-el-presidente-
estaba-regalado/
(18) https://finance.yahoo.com/news/bluestone-increases-npv-cerro-blanco-022700737.html
(19) https://www.firstmajestic.com/investors/news-releases/first-majestic-announces-acquisition-of-jerritt-canyon-mine-
in-nevada-usa
(20) https://jerrittcanyon.com/operations/jerritt-canyon-mine/
(21) https://www.firstmajestic.com/investors/news-releases/first-majestic-initiates-international-arbitration-request-under-
nafta-against-the-government-of-mexico
(22) https://www.firstmajestic.com/investors/news-releases/first-majestic-responds-to-inaccurate-media-reports-and-
provides-update-on-tax-dispute-with-the-government-of-mexico
Stocks To Follow Closed Positions 2020
Closed in 2020 closed close price
TMAC Resources TMR.to Jan'20 C$3.41 20-Dec-19 C$3.61 5.9% TLS flip play, sold new year
Regulus Res REG.v Jan'20 C$1.10 20-Dec-19 C$1.30 18.2% TLS flip play, profit taken
Bonterra Res BTR.v Jan'20 C$1.90 9-Dec-19 C$1.66 -12.6% TLS flip play, loss taken
McEwen Mining MUX Jan'20 U$1.12 2-Dec-19 U$1.18 5.4% TLS flip play, profit taken
Core Gold CGLD.v Jan'20 C$0.255 7-Apr-19 C$0.305 19.6% arb trade, profit taken
HudBay Min HBM Jan'20 U$3.56 9-Dec-19 U$3.36 -5.6% TLS flip play, loss taken
Midas Gold MAX.to Feb'20 C$0.71 5-Jan-20 C$0.57 -19.7% sm & silly trade
Warrior Gold WAR.v Feb'20 C$0.08 3-Aug-18 C$0.05 -31.3% clean out non-perf sm stocks
Contact Gold C.v Feb'20 C$0.40 19-Aug-18 C$0.18 -55.0% clean out non-perf sm stocks
Sandstorm Gold SAND Feb'20 U$3.73 17-Apr-16 U$7.21 93.3% Sold during port rebalance
NexGen Energy NXE Feb'20 U$1.20 2-Dec-19 U$1.06 -11.7% TLS flip play, loss taken
MAG Silver MAG Apr'20 U$8.95 1-Mar-20 U$10.07 12.5% Sold to cut silver exposure
Alexco Res AXU Apr'20 U$1.69 7-Sep-17 U$1.69 0.0% sold to close Ag exp. in FY20
Bonterra Res BTR.v Jun'20 C$1.62 2-Feb-20 C$1.10 -32.1% under-performer cash moved
Regulus Res REG.v Jun'20 C$0.64 6-Apr-15 C$0.79 23.4% moved $ TMQ/MIN & Au stocks
Great Panther GPR.to Aug'20 C$0.60 21-Jun-20 C$1.10 83.3% Profit taken, good trade
Jaguar Mining JAG.v Aug'20 C$0.42 21-Jun-20 C$0.65 54.8% Profit taken, good trade
Sandstorm Gold SAND Aug'20 U$7.76 10-May-20 U$9.37 20.7% Profit taken, good trade
Integra Resources ITR.v Aug'20 C$2.23 13-Aug-18 C$5.40 142.2% Profit taken, good trade
30

Wesdome Gold WDO.to Aug'20 C$2.37 14-Oct-17 C$14.82 525.3% last 1/2 of big win closed
INV Metals INV.to Sep'20 C$0.40 17-May-20 C$0.45 12.5% Cut all Ecuador exposure
Cartier Resources ECR.v Nov'20 C$0.155 3-Aug-18 C$0.25 67.7% Exact close price TBA
Tinka Res TK.v Dec'20 C$0.195 19-Apr-16 C$0.195 0.0% Closed on a round trip fail
2015 to 2019 annual closed positions in appendices below, 2009 to 2014 closed positions in editions IKN553 or earlier
Stocks To Follow Closed Positions 2019
Closed in 2019 closed close price
Atico Mining ATY.v jan'19 C$0.55 24-Jul-16 C$0.32 41.8% patience ran out, made room
Candente Copper DNT.to jan'19 C$0.075 3-Ago-18 C$0.05 -33.3% tiny trade, made room for new
B2Gold BTO.to feb'19 C$2.11 12-Set-14 C$4.05 91.9% Took 1/2 profits, reduce size
Western Copper WRN.to mar'19 C$0.80 20-Ene-19 C$0.81 1.3% Spec trade that didn't work
B2Gold BTO.to mar'19 C$2.11 12-Set-14 C$4.15 96.7% Took rest of profit.
GT Gold GTT.v mar'19 C$1.17 10-Oct-18 C$0.90 -23.1% Took loss. Story changed
NovaGold NG apr'19 U$3.84 13-Ene-19 U$4.15 -8.1% Short that didn't work, sm loss
Zinc One Z.v jun'19 C$0.47 14-Set-17 C$0.025 -94.7% clearing out dead trade
Amarillo Gold AGC.v jun'19 C$0.24 22-Ago-18 C$0.20 -16.7% clearing out dead trade
New Gold NGD aug'19 U$1.44 31-Jul-19 U$1.23 14.6% ST short win thru Q2 earnings
IMPACT Silver IPT.v aug'19 C$0.39 21-Jul-19 C$0.46 18.0% took a quick profit
Fiore Gold F.v aug'19 C$0.34 26-May-19 C$0.56 64.7% Took profit, 2q19 avg
Chakana Copper PERU.v oct'19 C$0.84 22-Mar-18 C$0.16 -81.0% Exploreco trade fail. Want space
Wesdome Gold WDO.to oct'19 C$2.37 14-Oct-17 C$7.57 219.4% Sold half, profit taking
Superior Gold SGI.v oct'19 C$1.46 8-Abr-18 C$0.47 -67.8% Failed sm spec on Au. Moved on
Amerigo Res ARG.to nov'19 C$0.91 23-Set-18 C$0.50 -45.1% worst trade of year, hefty loss
Guyana Goldfields GUY.to dec'19 C$0.94 14-Abr-19 C$0.56 -40.4% taking the loss, financials weak
Tethyan Res TETH.v dec'19 C$0.30 8-Set-19 C$0.16 -46.7% tiny trade, word of probs in co
Stocks To Follow Closed Positions 2018
Closed in 2018 closed close price
Amarillo Gold AGC.v jan'18 C$0.38 24-Mar-17 C$0.31 -18.4% Cut away losing trade
Riverside Res RRI.v jan'18 C$0.39 27-Jun-16 C$0.31 -20.5% Cut away losing trade
Eros Res ERC.v jan'18 C$0.175 1-Mar-17 C$0.16 -8.6% CEO sudden exit, not good
Excellon Res EXN.to jan'18 C$1.54 9-Oct-16 C$1.66 7.8% 4q17 poor, one too many bad qtrs
Wesdome Gold WDO.to jan'18 C$1.68 15-Dec-17 C$2.06 22.6% Near-term trade block, took profit
Sabina G&S SBB.to apr'18 C$2.06 17-Dec-17 C$1.77 -14.1% Near-term trade, bad timing, small
B2Gold BTO.to May'18 C$2.11 12-Sep-14 C$3.67 73.9% sold 25% to reduce exposure
Lara Expl. LRA.v May'18 C$0.65 11-Feb-18 C$0.58 -13.8% Spec on Brazil didn't work
Solitario XPL June'18 U$0.72 19-Mar-17 U$0.41 -43.1% Failed trade, may return in 4q18
SolGold plc SOLG.to July'18 C$0.475 19-Nov-17 C$0.415 -12.6% cut, trade didn't perform
Pan American PAAS July'18 U$17.90 1-Jun-18 U$16.30 8.9% modest win on short position
NGEx Res NGQ.to Sep'18 C$1.01 22-Oct-17 C$1.00 -1.0% Closed to reduce Argentina exp
Sandstorm Gold SAND Oct'18 U$3.73 17-Apr-16 U$4.13 10.7% partial sale to raise cash for GTT
Aldebaran Res ALDE.v Nov'18 n/a n/a n/a n/a liquidate spin out of REG
Stocks To Follow Closed Positions 2017
Closed in 2017 closed close price
Continental Gold CNL.to Jan'17 C$2.68 22-May-16 C$4.17 55.6% trade closed, profit taken
Focus Ventures FCV.v Jan'17 C$0.23 1-Jul-12 C$0.05 -78.3% Give up, a disaster trade
Wesdome Gold WDO.to Feb'17 C$1.72 28-Aug-16 C$3.00 74.4% Target hit, sold, good trade
Belo Sun BSX.to Mar'17 C$0.90 30-Jan-17 C$0.90 0.0% failed near-term flip trade
Lara Expl. LRA.v Mar'17 C$1.15 8-Apr-12 C$1.05 -8.7% cut to make room for new trade
Rye Patch Gold RPM.v Apr'17 C$0.31 2-Sep-16 C$0.32 3.2% cut for doubts & new stock
31

Cordoba Min. CDB.v Jun'17 C$0.75 15-Sep-16 C$0.63 -16.0% closed
Constantine Metal CEM.v Aug'17 C$0.135 9-Apr-17 C$0.28 107.4% spec trade closed, good win
Red Eagle Min. R.to Sep'17 C$0.67 13-Dec-16 C$0.27 -59.7% IKN's biggest failure in years
Starcore Intl SAM.to Sep'17 C$0.61 10-Jan-15 C$0.31 -49.2% Patience ran out
B2Gold BTO.to Dec'17 C$2.11 12-Sep-14 C$3.39 60.7% sold small portion for liquidity
Stocks To Follow Closed Positions 2016
Closed in 2016 closed close price
Phoscan Chem FOS.to jan16 C$0.28 29-mar-15 C$0.265 -5.4% Buyout trade, bot but poor deal
True Gold TGM.v jan16 C$0.18 23-ago-15 C$0.25 38.9% okay trade, sold on pol risk
McEwen Mining MUX jan16 U$1.09 25-ene-15 U$1.20 10.1% sold due to lack of value
Lake Shore Gold LSG.to feb-16 C$1.10 07-abr-15 C$1.69 53.6% bot out, sold early in process
Atacama Pacific ATM.v feb-16 C$0.19 26-abr-15 C$0.40 110.5% sold for a double on big pop
New Gold NGD feb-16 U$2.06 24-ene-16 U$2.96 43.7% closed good near-term trade
Sandspring Res SSP.v mar-16 C$0.195 18-oct-15 C$0.32 64.1% Hit tgt, took profit
Teranga Gold TGZ.to mar-16 C$0.54 15-feb-15 C$0.60 11.1% disappointing trade
B2Gold BTG mar-16 U$0.85 13-ene-16 U$1.30 52.9% Separate trade on B2, hit tgt
Dalradian Res DNA.to mar-16 C$0.67 27-oct-13 C$1.00 49.3% Hit target, sold, good win
HudBay Min. HBM may-16 U$4.10 03-abr-16 U$4.36 -6.3% Short trade, poor timing
Nevada Sunrise NEV.v may-16 C$0.185 28-feb-16 C$0.23 24.3% V. small, no big deal either way
Richmont RIC jun-16 U$7.60 01-may-16 U$9.30 22.4% near-term trade, profit taken
INV Metals INV.to jul-16 C$0.25 03-abr-16 C$0.95 280.0% Trade closed on time
HudBay Min. HBM aug16 U$4.98 09-jun-16 U$4.80 3.6% short trade covered, no big deal
Miranda Gold MAD.v oct-16 C$0.125 03-jul-16 C$0.10 -20.0% tiny spec trade, didn't work
Avino G & S ASM nov-16 U$2.00 21-oct-16 U$1.40 -30.0% Abandon trade on bad bot deal
Stocks To Follow Closed Positions 2015
Closed in 2015 closed close price
Argonaut Gold AR.to jan'15 C$1.47 14-dec-14 C$2.53 72.1% Big gain small time, profit taken
Amerigo Res ARG.to jan'15 C$0.405 20-jul-14 C$0.285 -29.6% Given up on weak Cu prices
Reservoir Min. RMC.v jan'15 C$6.05 18-jun-14 C$4.12 -31.9% sold on Cu downturn
Coro Mining COP.to jan'15 C$0.075 26-jan-14 C$0.035 -53.3% sm, sold on Cu downturn
Fortuna Silver FSM mar'15 U$4.12 10-nov-14 U$3.75 9.0% Short used as hedge
GoldQuest Min. GQC.v mar'15 C$0.26 27-oct-13 C$0.085 -67.3% given up ghost
Rio Alto Mining RIO.to apr'15 C$2.30 07-apr-11 C$3.57 55.2% Top pick, bot out, big win
Timmins Gold TGD jun'15 U$0.60 19-apr-15 U$0.62 3.3% near-term trade, out of time
First Majestic AG jul'15 U$10.51 10-aug-14 U$4.55 56.7% horrible failed trade
NovaCopper NCQ.to jul'15 C$1.05 09-apr-14 C$0.50 -52.4% no more Cu exposure, sm sell
McEwen Mining MUX aug'15 U$0.695 21-jul-15 U$0.92 32.4% Closed nearterm flip for win
Midas Gold MAX.to sep'15 C$0.39 21-sep-15 C$0.35 -10.3% Sm. trade idea that didn't work
New Gold NGD oct'15 U$2.18 23-aug-15 U$3.05 39.9% trade closed, profit taken
Legend Gold LGN.v nov'15 C$0.085 01-mar-15 C$0.035 -58.8% tiny "land grab" idea, failed
Timmins Gold TGD nov'15 U$0.245 20-sep-15 U$0.15 -38.8% small near-term loser
Please note that due to space considerations closed positions 2009 to 2014 are now
available on request, or were published in any edition to IKN553 (end 2019).
Important Disclosure
The information and opinions contained within this report reflect the personal views of the author and therefore all
material within should not be construed as accurate or reliable or be utilized as advice for investment or business
purposes. Independent due diligence and discussions with ones own investment and business advisor is strongly
recommended. Accordingly, nothing in this report should be construed as offering a guarantee of the accuracy or
completeness of the information contained herein, as an offer or solicitation with respect to the purchase or sale of any
security or as an endorsement of any product or service. All opinions and estimates included in this report are subject to
change without notice. It is prohibited to copy or redistribute this report to any type of third party without the express
permission of the author.
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