6 The IKN Weekly, issue 631 — Jun 28, 2021
The IKN Weekly
Week 631, June 27th 2021
Contents
This Week: Trade heads-up, In today’s edition, Market dates and holidays, Buy low sell high.
Fundamental Analysis: Argonaut Gold (AR.to): Buying the compelling value.
Stocks to Follow: Orezone (ORE.v), Amarillo Gold (AGC.v),
Copper Basket: Overview, Chakana Copper (PERU.v).
Producer Basket: Overview, B2Gold (BTG) (BTO.to).
Tiny Dogs: Overview, Golden Pursuit (GDP.v).
Regional Politics: Argentina: Truck tire recycling in San Juan, Argentina, Chile: The Royalty
law’s slow passage, Guatemala: “Pre-consulting” at Escobal continues, Ecuador: Chocó Andino
in the spotlight Peru: Two ex-mining ministers on Castillo’s entry, This week in Peru.
Market Watching: South America’s New Green Copper Deal, Think Zinc, Part 722, News from
Rio2 Ltd (RIO.v) to break the financing logjam.
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
“
Trade heads-up
I am a buyer of Argonaut Gold (AR.to) in the week ahead. See today’s main Fundamentals
section for more.
In Today’s Edition
The drop to under $3.00 make the stock impossible to ignore any longer. I am a buyer
of Argonaut Gold (AR.to) next week and today’s main Fundies section hopefully does a
better job of explaining the trade’s attraction than I’ve done for the past two weeks
However, the main news in this edition, for me at least, is the update on Rio2 (RIO.v)
in ‘Market Watching’ below. We bear glad tidings.
Regional Politics continues with the Peru mess, but plenty more besides.
Market dates and holidays
“O blessed breeding sun, draw from the earth
Rotten humidity; below thy sister’s orb
Infect the air!”
Timon of Athens, Act 4, Sc 3
Summer’s lease may not be long, but we’re now moving into the Northern hemisphere summer
and it’s normally a quiet period for junior mining stories and stocks. It’s also when we get
plenty of disrupted markets due to holidays and next week that process begins, with Canada
closed Thursday July 1st for Canada Day and then US Markets closed in two Mondays’ time for
July 4th hangover (it falls on a Sunday this year). However, among those dates we also get
major macro news, the US BLS jobs report coming on Friday July 2nd. Consensus on the
numbers (1) is currently +675k NFP jobs added, with the headline unemployment rate set to
drop to 5.6%. If those numbers hold, the perception arising will be important as the Fed tries to
1
balance job growth against inflation pressures.
To expand on the subject a little, among the pages of market commentary available to the
reader this weekend, these three lines summed up the week for precious metals nicely (2):
Gold and silver prices saw support Friday after the U.S. PCE deflator was slightly
weaker than expected and was dovish for Fed policy. Gold prices also saw some
support from Friday's weaker-than-expected U.S. consumer sentiment report.
All fair. This desk is hardly the only one to have noticed the change in Federal Reserve
attention, away from the Consumer Price Index (CPI) to gauge the effects of inflation on the
country and toward the so-called “PCE Deflator”, which measured habits in spending as much
as prices paid. According to the PCE reading, here’s how personal spending by the average US
citizen has changed, Year-over-Year:
PCE deflator in 2021
May 2021 3.9 percent
April 2021 3.6 percent
March 2021 2.4 percent
February 2021 1.6 percent
That makes sense, considering what the world went through in 2q20. It’s also the backbone of
reasoning behind the Fed’s insistence that inflation in 2021 will be a transitory phenomenon,
which is probably why they prefer this dataset to others these days.
We again stress our basic point: There’s no need for gold (or its proponents) to “fight the Fed”
when the Fed’s own loose and expansive monetary policy is tailor made for rising gold prices.
Buy low sell high
A typical edition of The IKN Weekly starts life on Friday afternoon as a list of working titles.
Then once the main subjects of the weekend are identified, the notes get added, ideas padded
out etc in a normal process most author will recognize, which includes your end of month report
for you boss (we’re all in the same boat, ultimately). But this weekend, instead of instead of
burying the working titles and losing them before they morph and disappear, I’ve left them the
way there were on Friday night:
Gold is set fair
Copper rebounded in style
Copper Mountain purchase worked
Amarillo Gold addition went as planned
Argonaut Gold is cheaper by the day (literally)
It struck me this Saturday morning how clear that list was. Yes, gold and copper traded in the
right way last week, the we’d expect them to during their secular bull markets. There is plenty
of other market noise to distract us, but for our purposes as long as we know gold is buoyant
and Dr. Copper feels fit as a fiddle, the metals market then takes care of itself. Then yes, those
two buys I made last week worked very nicely and I’m happy to have got the message out
before trading started on Monday. For an example, two readers who trade more frequently than
I made good coin, in-out, on CMMC. Their coincidental and unsolicited testimonies were
appreciated, as much for the fact that they are happy with the service provided and use it their
own way. Then yes, the previously identified AR.to went under C$3.00 last week, a deep
bargain price that I am not going to ignore.
But more than their substance, it was the style of the working titles that got my attention on
Saturday morning; straightforward and factual without trying to be boastful or long-winded.
That’s something we need more of in this publication, I think, so here a statement of intent for
The IKN Weekly in the weeks to come:
2
We fully expect the prices of all metals, be they base, industrial or silver* to continue on their
upward trend this year. This means that while we wait for the end of the drudge periods and
inertia in our Top Pick choices, Minera Alamos (MAI.v) and Rio2 Ltd (RIO.v), there are going to
be plenty of trade and investment opportunities and in this current market, I plan to use them.
That means keeping cash on standby in the account and perhaps trading more frequently than
my normal. It also means I may sell positions to make room for active traders.
It’s been a long and quiet period for the two Top Pick stocks, and the drudge that those of you
long Minera Alamos feel is nothing compared to that of Rio2 Ltd holders. The top picks need
time to mature, meanwhile market opportunities will always arise and, as the Top Picks have
been largely inert for quarters on end, it’s to those places we’ve looked for market advantage
an edge. Which is where Argonaut Gold comes in.
Fundamental Analysis of Mining Stocks
Argonaut Gold (AR.to): Buying the compelling value
Today marks the end of IKN pussyfooting around this company, as the combo of a stock price
now at bargain basement levels and a company growing in value by the quarter means
Argonaut Gold (AR.to) is an obvious buy in today’s market. The job today is to get to the heart
of the matter, as well as catch up on recent coverage and see how AR.to will fit into the
portfolio going forward (as this planned purchase means I have 17 open positions when
maximum is supposed to be 15). We do thee three things in today’s Fundies section:
Consider recent coverage and trades, in light of a volatile and overall bullish market
We demonstrate that AR is on course to “Do a Wesdome” and build out its new Magino
mine organically, using funds available and organic cash profits from operations.
We then put the piece together and see how AR.to’s share price is set to go up in
almost inexorable fashion, as long as gold maintains its bull market status.
So, here we go:
A review of recent fundamentals coverage
As mentioned in the preview post on the blog Friday, in the last two weeks of reports I’ve made
mention of Argonaut Gold (AR.to) as a clear and obvious investment opportunity without
executing well on the case. Perhaps it’s because Copper Mountain cleared the decks last
weekend with its obvious and punctual buying opportunity, but there’s probably more at play.
One of the topics mentioned in this week’s intro (above) is the way this bull market has been
and probably will continue to offer plenty of investment opportunities in new names or
companies that ride the bull market during their own corporate growth moments. This has
manifested in the last few weeks of coverage here at The IKN Weekly and a quick re-cap of the
main Fundies sections of the last five editions is an illustration of sorts:
IKN 624: A first heads-up on McEwen Mining (MUX), which looked cheap after
reporting its quarter and a note to go in to more detail on the stock in
IKN625.
IKN 625: MUX is bumped for new coverage note to buy Aldebaran (ALDE.v), a
coattail play on a very cheap stock doing the same metal in the same region
as Filo Mining (FIL.v) and its new discovery
IKN 626: We do McEwen Mining Part one of two, in which I try to get to the
bottom of this difficult company to trade.
IKN 627: MUX part two is bumped for new coverage note to buy Amarillo
Gold (AGC.v), the trade timing specifically (to the day, in fact) to take
3
advantage of the way Eric Sprott had been trying to suppress the share price
for near-term advantage.
IKN 628: We get round to McEwen Mining Part two of two, by which time the
stock has already moved up to U$1.44 (the same as this weekend, fwiw).
Eventually and after much huffing and puffing, I don’t buy.
IKN 629: We feature Argonaut Gold (AR.to), though it was not the edition’s
obvious main event with a lot going in Peru and at Mene inc (MENE.v), as well
as expanding on the decision to sell Orezone (ORE.v) and watching it morph
into policy.
IKN 630: Which brings us to last week and my decision to first feature
Argonaut Gold (AR.to) as an obvious, “table bang” trade at the moment, only
to defer and concentrate fully on Copper Mountain (CMMC.to) last weekend
after the way the market offered up its gilt-edged entry point on the stock.
Which brings us to today: The last eight weeks have felt like a constant series of catch-up notes
here at the Weekly, with the firm decision to finally cover McEwen Mining (MUX) coming right
before a series of punctual and attractive trade opportunities. Since mentioning MUX again I’ve
pulled the trigger on Aldebaran (ALDE.v) for copper, Amarillo Gold (AGC.v) for its specific trade
timing and upcoming construction re-rating, then Copper Mountain last week because $3.43
was so cheap it was almost laughable (that one, so far so good). And during the process
McEwen Mining passed me by, the stock did turn out to be cheap back in IKN624, rose well for
four weeks, but recent weakness has MUX up around 11% since that first mention in IKN624.
I don’t have many regrets about missing the window on MUX, because Argonaut Gold (AR.to)
offers a better opportunity to MUX today and will now take my cash in preference. MUX is still
an interesting prospect and, if it delivers on Fox Complex growth and production expansion, the
share price will indeed launch a lot higher. However, success is by no means guaranteed at
MUX, its track record of delivery is poor and we simply do not need to bet on a debt-laden, high
cash cost MUX depended on exploration and discovery success at its Red Lake properties for
upside. Argonaut has the same type of production/growth mix as MUX, but 1) its balance sheet
is in far superior state and 2) its growth is now set on a much clearer and easier path, thanks to
Magino. My debt today, therefore, is to update, expand and explain further on Argonaut Gold
(AR.to), which this weekend is an even more compelling investment opportunity than before,
thanks to a price drop of around 10% in the last two weeks and as this chart shows, AR has
even underperformed the GDXJ for the first time this year (so far +20% to the benchmark).
If ever there were a time to buy the dip on this stock, it’s now.
AR is going to “Do a Wesdome”
By which we mean emulate WDO in the way it developed and s building out its exciting Kiena
mine by use of pure company cash flow and available funds. WDO added real value and
became the success story it is today, thanks CEO Middlemiss and his firm strategy decision not
to dilute shareholders any further, this desk firmly believes AR and CEO Dougherty is on course
to do the same thing at Magino. We touched on this subject in UIKN629, but it needs more and
4
to date, AR.to has raised U$152m of the estimated U$360m to U$380m (C$480m to C$510m,
AR.to figures) capex for Magino. Some U$23.4m of that capital was deployed by end 2022 and
the rest gets spent this year (e.g. the U$46m of spend on the property during 1q21 as
contractors Ausenco begin to ramp up the big civil works). The capex from the original raise
should get deployed mostly this year and, as at 4q20, means AR will need to cover another
U$208m to U$228m to bring Magino online at budget. This is where the newly impressive cash
flow at AR.to comes into play, its “harvest” policy is key to AR doing a WDO and building its
new Canadian mine directly from treasury,
organic growth that will not require any extra
AR.to: Op. Earnings
shares sold or debt deals done. Here’s how we
cover a U$228m capex bill:
1) From today until 2q23, the estimated date of
commissioning at Magino, we have eight
quarters of operations. If, in that time, AR.to
can return an average of U$20m of free cash
flow per quarter, it covers U$160k of the
U$228m outstanding. This chart (right) shows
that type of quarterly internal margin to be
perfectly possible, perhaps even lowballing AR’s
cash flow potential this year. Considering other
commitments at the company (exploration etc), a $20m/quarter funding of Magino from
treasury looks reasonably conservative.
2) Cash treasury remains in good shape at AR even if we assume the U$152m totally spent
Cash stood at U$227m as at end 1q21 and while it needs a certain level of liquidity to fund its
separate arms of operation, we also see from historical returns that “under $50m” has always
been enough to keep the company working well. At the moment AR needs to finish the build-
out, they can lean on their other divisions for $50m of internal credit quite easily and means AR
has $210m of organic cash available, that’s almost Magino done.
3) The revolving credit facility: We can make the case of an AR which stretches and makes
capex organically, but debate on whether AR will need to go to market again and sell shares
stops here. Not for nothing did AR renegotiate its U$75m revolver last year, adding a $25m
concertina facility that will allow it to draw up to U$100m between now and 2023. While we’d
prefer AR not to use its debt (of course), it’s here for a good reason and they will know their
time-sensitive commitments for this long-term build.
Between these three pieces, we reasonably estimate AR has U$310m on hand for a U$230m
build out and now expect Magino with no further share dilution to the company and that makes
all the difference.
It’s all about the asset value
Now to put those pieces together and gauge the effect a built-out Magino’s development will
have on an Argonaut Gold that remains at 310m shares out. In IKN629 we covered the
overview balance sheet items and while a couple of those charts get repeated today, our focus
is fixed mostly on fixed assets. Here’s hw the mine property (etc) valuation breakdown at AR
has developed since late 2017, a period that witnesses the disappearance of the ill-fated San
Antonio project and the arrival of Florida Canyon into the fold, via the purchase of Alio.
5
7.6 5.6 8.0 3.4
8.31
4.01
7.0
0.02-
6.7 7.5
7.01
1.02-
6.9 2.6
9.82 0.82
5.22
40
35
30
25
20
15 10 5
0
-5
-10
-15
-20
-25
-30
71q1 71q2 71q3 71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1
source: company filings
srallod
fo
snoillim
U$m AR.to: Mine prop value, per asset
800 El Castillo La Colorada
700 Florida Canyon Magino
San Antonio Other
600
500
400
300
200
100
0
4q171q182q183q184q181q192q19 3q194q191q202q203q204q201q21
source: company filings
In that chart, we can also get a visual grasp of the way AR is “harvesting” at its operations by
the declines in value of El Castillo (mostly) and La Colorada (a little). Eight quarters ago, those
combined to be worth U$184.37m that aggregate total is down to U$130.03m. However, it also
features the pale blue of Magino and if we separate that out..
AR.to: Magino Mine Prop asset value
400
350
300
250
200
150
100
50
0
6
71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 tse12q2
U$m
source: company filings, IKN ests
…we see how much value has gone in since its last minor impairment of 1q20. AR ran its 3q20
financing and raised over U$150m for this job, so the 2q21 estimate shows how we expect
spend and resulting capitalization to continue. And once Magino is at full speed operations
come 2025 or so, there’s every reason to believe it will emulate the profit-making ability and
asset value of its neighbour, AGI’s Island Gold operation.
We sketched out the valuation potential of Magino based on Island in IKN629, arguing that its
U300m carry today see a full billion added and a total NAV of around U$1.3Bn, which is the
apparent influence of Island on the totality of AGI. This chart puts a quant on the sketch, as y
making reasonably extrapolations of the spend AR will need to get Magino online from today,
we arrive at an overall asset spend of U$660m.
AR.to: Magino Mine Prop asset value
700
600
500
400
300
200
100
0
91q4 02q1 02q2 02q3 02q4 12q1 tse12q2 tse12q3 tse12q4 tse22q1 tse22q2 tse22q3 tse22q4 tse32q1 tse32q2
U$m
source: company filings, IKN ests
This assumption goes a long way to confirm the type of NAV Magino is expected to command,
one matching its neighbour Island (AGI) today. With AR currently commanding s Price/Book
ratio of around 1.6X, a fully fledged Magino is valued at U$1.06Bn on day one That’s a gross
add of around U$700m to the company and while we expect normal straight line depletion at its
other operations, our model estimates total mine property value of U$950m at AR at end 2q23,
with Magino accounting for U$660m of the whole.
For what that means to the share price and a target for the stock, the next chart shows the
Price/Book ratio commanded by AR.to over the long-term, with a moving average added to help
the eye take in my estimates for the rest of 2021. The recent price drop to under C$3.00 has
dragged this ratio down to the 1.29X reading (2q21est), but we expect that to be an anomaly
and, as AR npw makes healthy quarterly profits and is in the process of swapping out non-
performing assets for performing assets, the P/Bv should at least maintain at the recent 1.6X:
AR.to: Price / Book Ratio
2.00 (baseline in US Dollars)
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
7
51q4 61q1 61q2 61q3 61q4 71q1 71q2 71q3 71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 tse12q2 tse12q3 tse12q4 tse22q1
P/BV
source: TSX, AR filings, IKN calcs
As long as that reasonable P/Bv assumption holds (and there’s every reason for a 1.6X to hold,
e.g. Wesdome typically runs a 5X Price/Book ratio), all it will take for AR shares to meet C$4.00
in the next 12 months is the company to execute to plan. The process of changing treasury
cash into mining asset adds value to every dollar inside the company and as Magino builds out,
so that continues. All future change to book value will be driven by Magino (e.g. AR will not
hoard treasury) therefore, by using our U$950m asset value forecast and reasonable multiple
assumption (as well as U$0.80 = CAD$1.00), we get this basic math:
950 x 1.2 = C$1,140
Price/Book multiple = $1,824m
310m shares out = C$5.88
We estimate that under a neutral gold price scenario, Argonaut Gold’s current corporate
strategy will add a little under C$3.00 per share to the company; in effect, Magino’s build-out
makes AR a double at this weekend’s C$2.96. Compelling.
Discussion and conclusion
I’m a buyer of Argonaut Gold (AR.to)in the days ahead because the market hasn’t realized yet
how much value it is going to add to the corporate structure during the current “harvest and
build” phase. This stock will become part of the long-term portfolio and I expect to hold it until
Magino becomes a working reality, but those of you interested in a nearer-term trade should
also be interested. This five and a bit years’ chart that takes in the 2016 bull market shows how
AR got popular and overbought that summer, but this years’ move has yet to match the
enthusiasm despite the company being in far better financial shape than before. There seems
to be room for AR to rush back up to $4.00
n the near-term as well, which would
please plenty in this audience and for a
catalyst, the 2q21 production report out in
two or three weeks’ time would fit the bill.
The main attraction of AR as a trade today
is its organic upside and low risk, Magino
has already begun its build and to round
off, note the company has a page on its
site dedicated to following Magino’s
development into production, with monthly
updates on the page and a free monthly
newsletter to sign up for (8). Visitors to the
page (recommended) get a bullet point list
of the developments that month, as well as links and plenty of data. Smart PR move, a page
I’m going to visit a lot.
Stocks to Follow
A clear and defined split in the fate of our Stocks to Follow, the market running lower early
week before loose dollars and gold’s reaction changed the trend. By Friday, large caps were
back in the green (see Producer Basket) and the rebound had reached Tier 2 and juniors, so it
wasn’t a surprise to see out more liquid plays finish up (MAI.v, TMQ). In fact, all five of the top
five in the table were winners, along with MIRL. There was one UNCH in Mene Inc (MENE.v)
and the rest were losers, mostly modest and the only large percentage loss from Aurelius
(AUL.v down 13.0%).
With the addition of Copper Mountain (CMMC.to) last week, the list is back up to 16 open
positions, one over the house maximum. That’s going to two as Argonaut Gold (AR.to) is such
an obvious investment, there’s no way to ignore it any longer. We have just six of the 16 stocks
in the green at the moment, the others red. Not good.
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$0.66 214.3% $1.14 tgt Aug'20, #1 idea
Rio2 Ltd. RIO.v STR BUY C$0.83 22-Apr-18 C$0.78 -6.0% $1.58 tgt, finance capex due
Recommended stocks (In order of preference)
Copper Mountain CMMC.to STR BUY C$3.51 18-Jun-21 C$3.82 8.8% A return to obvious, deep value
Trilogy Metals TMQ BUY U$1.84 15-Sep-19 U$2.50 35.9% Cu for 2021, going well
Amarillo Gold AGC.v BUY C$0.31 30-May-21 C$0.315 1.6% add now, capex deal soon
Strategic Metals SMD.v STR BUY C$0.42 31-Jan-21 C$0.385 -8.3% Canadian land asset bet
Excelsior Mining MIN.to STR BUY C$0.93 10-Mar-19 C$0.58 -37.6% Delayed, but still great value
Aldebaran Res. ALDE.v BUY C$0.68 16-May-21 C$0.58 14.7% Bet on big copper, pol risk okay
QC Copper &Gold QCCU.v STR BUY C$0.205 25-Apr-21 C$0.195 -4.9% Cu Jr, fast-tracking resource
Royal Road Min. RYR.v BUY C$0.155 17-Mar-19 C$0.30 93.5% Model paying off in Nica
Wolfden Res. WLF.v spec buy C$0.30 11-Apr-21 C$0.295 -1.7% Zn trade needs to move soon
Great Bear Res GBR.v BUY C$15.83 26-Aug-20 C$14.68 -7.3% Binary M&A trade, wait for print
Cartier Resources ECR.v hold C$0.32 21-Mar-21 C$0.28 -4.7% Binary M&A trade, wait for print
Aurelius Min. AUL.v spec buy C$0.75 28-Jun-20 C$0.47 -28.0% has until its 43-101 to improve
Minera IRL MIRL.cse hold C$0.195 22-Jul-12 C$0.085 -61.5% CEO change will move stock
Long-term non-mining hold
Mene Inc. MENE.v LT Hold C$0.62 6-Dec-20 C$0.61 -1.6% LT bet on jockey&horse,will add
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-Seo-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
Pucara Gold TORO.v apr'21 C$0.65 4-Oct-20 C$0.26 -60.0% Cut loser, Peru risk call
Copper Mountain CMMC.to apr'21 C$1.40 22-Nov-20 C$4.18 198.6% tgt hit, profit taken
New Gold NGD may'21 U$0.76 9-Feb-20 U$2.14 181.6% Sold to buy AGC, nice win
Orezone Gold ORE.v jun'21 C$0.79 21-Jun-20 C$1.61 103.8% sold on pop, leaky boat
2015 to 2020 annual closed positions in appendices below, 2009 to 2014 closed positions in editions IKN553 or earlier
Now for notes on some of our covered stocks:
Copper Mountain (CMMC.to): POSITION RE-OPENED. It was going to go up, so I bought
as soon as possible on Monday morning. There was all the C$3.50 I wanted and finished by
averaging $3.51, a price that proves friction in markets and if anything, with spot copper
favourable again CMMC underperformed by not reaching a 4-handle Friday. Fish in a barrel,
8
CMMC will get higher copper prices even though it doesn’t need them to appreciate further. Still
wildly cheap, don’t think for a moment you’ve missed out on a good return on CMMC this cycle,
the stock is going a lot higher.
Amarillo Gold (AGC.v): ADDED: To all intents and purposed, AGC performed as if reading
from a script last week. Its obvious floor price is 30c, speculators are willing to reach to 32c
maximum until project finance news flows. I bought enough to get the personal cost average to
31c and size-wise, I too am happy until further notice. Set fair and bound to move up once Eric
Sprott makes I centre stage for his considerable market megaphone.
Aldebaran Resources (ALDE.v): So far so quiet at this trade, which has picked up the REG
habit of going back to sleep after a flurry of trading. This may be the time to pick up more and
while Neil Ringdahl can decide to be wilfully ignorant about Cajamarca in public, I dare say all
those inside “Antares Group” know the truth and that Argentina in 2021 will provide ALDE with
a lot more positive newsflow than REG can. Please see the lead ‘Market Watching’ piece today
for a few more thoughts on how copper, San Juan and this company are in the right place at
the right time.
Wolfden Resources (WLF.v): Bought as a fliptrade on Zn for the first half of 2021, WLF has
fiddled around its purchase price without exciting or disappointing since then. The table notes
for WLF above say that this trade needs to do something soon. That is true, however it has
ample opportunity to do just that and impress us in the weeks ahead via drill assays NRs and
any other corporate news it can garner.
That flowery paragraph is your trade heads-up, ladies and gentlemen: Given a couple of days,
we are now at the end of 2q21 and the window in which WLF must deliver good and market
moving news, else see me fold this trade and move on. For a little more on the general
backdrop to Zn, see today’s ‘Market Watching’ note.
Rio2 Ltd (RIO.v): Despite receiving positive and de-bottlenecking news, RIO traded flat and
gained just two cents on the week. The news and its muted reaction get fuller treatment in
‘Market Watching’ below, as it’s the first major positive we can expect from the company in the
next few weeks. Top Pick and about to reward our patience.
Minera IRL (MIRL.cse): The announcement last week that the settlement agreement
between Cofide and MIRL has been officialised underscores just how incompetent this
management has been and how entrenched CEOs get paid for doing nothing. The most
important takeaway from the news is that in the event of a dispute, any and all disputed assets
are placed into an escrowed trust until settlement. This means that MIRL really is set to lose its
asset in around three months’ time when the clock runs out on the bridge loan payback
window. Diego Benavides is paid U$1,500 per day. By us.
9
QC Copper & Gold (QCCU.v): A bit of a soft week for this tinycap and, with around two
months to go before it finishes its drill program at Opemiska and delivers a 43-101 resource
(then PEA), a look at the look says that at or under the 20c line is the place to accumulate if
you like the potential in this trade.
Aurelius Minerals (AUL.v): Another NR, another week of arch frustration as constant selling
drives the stock price lower. First the news and on Thursday pre-open we got this NR (4) which
wrapped up the phase one drill program at Aureus East. We got the same type of strong but
narrow gold hits seen in previous NRs, once again the market not getting the saddle concept of
the mineralization. The company is now moving to phase two and according to CEO Ashcroft,
the drilling is going well and lab turnaround times have improved, so last week’s “End Of Part
One” is by no means the end of news in 2021 and AUL wants to put another 15,000m into
Aureus East before the season ends.
The above outline of data and information came in a mail from CEO Ashcroft. Here’s my reply
to him that Thursday:
IKN: “Who is selling? It's constant, boring and killing interest in your stock as a speculation
medium. It's obviously deliberate, too.”
It’s all well and good talking up the project, but AUL’s price action has been poor and, in my
opinion, unrepresentative of the success to date at Aureus. Therefore, we tackle the elephant in
the room and here’s how CEO Ashcroft replied:
Aurelius: “I wish I could figure it out. I don’t know where the stock is coming from…and I don’t
understand why the pressure is there. If we weren’t delivering on these programs, I could
understand it…but we’ve had really good results.”
And the conversation continued in the following short mails:
IKN: “I agree on all points, apart from the mystery. You must have some idea.”
Aurelius: “If I did know, I would engage and speak to it. I do not know. I’ve been told
algorithms…but I struggle to believe that.
IKN: “Just making sure you understand the
level of frustration among your retail
shareholders.”
Aurelius: “Thanks. I do. I really wish we could
figure it out. I own AUL shares, bought more in
May, and share the frustration.”
With just under C$5m at bank, AUL has all the
cash it requires to get through 2021 and into the
10
first half of 2022 and it does seem as though it’s on track to discover and report on a sizeable
deposit of gold. Personally a small position, for the moment I’ll hold and hope for better things
in the second half of this year. We leave you with the AUL 2021 year-to-date chart, which looks
horrible.
The Copper Basket
After twenty-five weeks of 2021, The Copper Basket shows a gain of 37.28% to level stakes.
company ticker price 1/1/21 Shares out Market Cap current pps gain/loss%
1 Solaris Res SLS.to 6.08 107.53 1271.00 11.82 94.4%
2 Copper Mtn CMMC.to 1.81 207.5 792.65 3.82 111.0%
3 Oroco Res OCO.v 1.85 186.96 645.01 3.45 86.5%
4 Marimaca Cop MARI.to 3.25 87.737 350.95 4.00 23.1%
5 Western Copper WRN.to 1.57 135.798 340.85 2.51 59.9%
6 Amerigo Res ARG.to 0.80 181.79 219.97 1.21 51.3%
7 Excelsior Min. MIN.to 1.12 273.585 158.68 0.58 -48.2%
8 Regulus Res. REG.v 1.07 101.85 78.42 0.77 -28.0%
9 Aldebaran Res. ALDE.v 0.455 125.24 72.64 0.58 27.5%
10 C3 Metals CCCM.v 0.115 438.56 72.36 0.165 43.5%
11 Doré Copper DCMC.v 1.00 53.304 46.91 0.88 -12.0%
12 Element 29 Res ECU.v 0.45 68.281 39.60 0.58 28.9%
13 Chakana Cop PERU.v 0.60 111.41 32.87 0.295 -50.8%
14 US Copper USCU.v 0.105 87.53 17.51 0.20 90.5%
15 Chibougamau CBG.v 0.165 53.077 15.92 0.30 81.8%
NB: All stocks in CAD$ Portfolio avg 37.28%
Copper stocks had a good week, the relief rally in spot copper doing the heavy lifting and
despite China’s continued dumping of large
The Copper Basket 2021, weekly evolution
tonnages on the LME, in a bid to suppress 70%
the price. Copper equities of all sizes reacted
60%
well as buyers came for the metal, e.g.
50%
sector ETF COPX recovering 7.5% of its
40%
11%+ loss of the previous week. As for our
30%
smaller company focus, The Copper Basket
also had a good week and rebounded by just 20%
under 4%. And after five lines we get to the 10%
reason for the preamble: As one would 0%
expect, the larger caps to rebound first and
fastest, this suggests there’s still some catch-
up left in the prices you see in the table
above.
As for the details, seven of our 15 Copper Basket stocks returned gains on the week (SLS.to,
CMMC.to, OCO.v, ARG.to, PERU.v, ECU.v, USCU.v), three were unchanged (REG.v, CCCM.v,
CBG.v) and five were losers (MIN.to, WRN.to, MARI.to, ALDE.v, DCMC.v). The biggest movers
were both to the upside, specifically from Element 29 (ECU.v up 11.5%) and Copper Mountain
(CMMC.to up 11.4% glad to say).
As for the market, copper-the-metal traded well and the stocks responded, a glance at the YTD
price chart is enough to show its bullish nature:
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source: IKN calcs
To repeat: Others may demand U$5.00/lb copper, all we require for highly successful
investments in Copper Mountain (CMMC.to), Trilogy (TMQ), Excelsior (MIN.to) and others is for
copper to remain at and above the U$4.00/lb line. As long as that happens, it’s fish in a dry
barrel with a sawn-off shotgun (as long as the companies deliver, of course).
The main market fun in copper was centered on one of our standard focus subjects, world
inventories, so we’ll jump straight ahead with the weekly data and comment afterward:
World copper stocks moved up again, China making its second large-scale deposit of
copper onto the world markets in as many weeks. Total aggregate stocks rose by
21,665mt to reach 411,235mt, up % on the week and breaching the 400k line in the
process. Despite that, copper prices rose at market and more thoughts on that below.
At the SHFE, the message was very different from the one China wants to send the
world via LME, stocks dropped by 18,723mt (10.9%) to close at 153,804mt and buyers
are buying, no matter how much Central Government tries to keep them down.
The statistical action was all LME last week, up 42,300 metric tonnes with over 35kmt
of that delivered to one warehouse, that of Rotterdam Holland. That makes 60kmt to
one place in two weeks and a lot of copper for Europe to absorb. China is trying to
make its point and won’t stop at just one or two dumpages, it remains to be seen if the
law of diminishing effects comes into play sooner, or later.
The COMEX inventories joined in the bullish real world signal and dropped by another
1,912mt, closing the week at 46,456mt. Real end users need copper and are buying it.
Here’s the Shanghai-only inventories chart and it’s not just the fact we’re back at 150k, it’s the
speed at which it arrived.:
Shanghai Futures Exchange Warehouse Stocks, 2014 to date
400000
350000
300000
250000
200000
150000
100000
50000
0
12
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ts1ram
ht01 ht91 ht72 ht6ced ht41 ht42 6102
dr3luJ
ht11 ht72 ht5beF ht61 ht52 7102
dr3pes
ht21 ts12 8102
ts1rpa
ht71 ht62 8102
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9102
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ht42 9102
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ht11 ht02 ht92 ht8 ht71 0202ht62luj ht4tco 0202ht31ced ts12 1202dn2yam
Mt Cu
|
source: Cochilco
Last week, our view was that of a temporary hit to copper prices, not a systemic change. That
was borne out by last week’s market, it’s also clear in the data from the three official futures
markets for the metal and their respective warehouses. We follow this data set religiously,
knowing full well it has little more than a monitory effect most of the time. That’s because close
observation reveals those moments when it becomes the centre of the battle. That’s today, with
the world’s end-user (China) trying to convince the world there’s a surplus of copper out there
by jawboning the market and dumping on the LME. The world fell for it for a while (and for the
sheer weight of the first dump, but last week the bulls called the bluff and aren’t having any
more of China’s temporary gamesmanship, buying up the metal and noting the continued draw
downs at SHFE. The above chart is a trend that reveals the true availability of copper to real
end users.
US Copper (USCU.v): We had short note on USCU
last week, noting it was up on what was likely to be
a “… false reading and due to quick-dry paint on the
tape”. Here now is the ten day chart, which shows
the careful massaging of the company stock price
continued over the week:
The only real volume last week was Monday and
what looks like a near-term bottom, then came the
technical rebound on gossamer volumes and,
impressively, USCU managed to stay UNCH on the
week. Avoid.
Chibougamau (CBG.v): Another tinycap showing volatile trading is here, as people try to
work out if there really is a new mining camp
installing in the town with a new collective focus on
copper. Since catching light and moving up at the
beginning of May (touched 46c), CBG has been on a
classic pennant trend and the last month of trading
shows in this ugly chart, big jumps between bids and
asks intraday and sporadic lumps of volume making
it difficult to read. For me, we’re in a period when
people’s attitudes must change first. The selling has
the look of locals cashing in after a long wait, the
buyers moving in on the same speculation that
brought a little of my money to QCCU this year.
Element 29 (ECU.v): From IKN630, last weekend: “…ECU.v today ticks the boxes for cash,
permits and experience as well as being able to benefit from true long-term CSR practices at its
Elida project.” Here’s a five day price chart:
13
We show ECU alongside the copper ETF (COPX) and the Peru general index ETF (EPU), as last
week’s 11.5% rise and the fortnightly gain of 16% are more impressive under current macro
circumstances. So whoopee-doo and a right call perhaps, but time is the real decider and as
this YTD chart shows…
…in fact I’m late to this trend. ECU.v has been rising despite all the political goings-on in Peru
for two months, not just two weeks, and anyone who had the gumption to buy at 35c while
your was telling the world to run away from the country and its second round election would
have made good money. ECU is now at the price deck from which I sold back in late February,
having bought just a couple of weeks earlier. Pedro Castillo and Keiko Fujimori changed the
portfolio and the macro decision to continue avoiding Peru is still the right one, however ECU
shows there are exceptions to the rule. Wishing these guys the best of fortune, it’s good to
have some real professionals in an exploreco down here.
The Producer Basket
After twenty-five weeks of 2021, the Producer Basket shows a loss of 11.06% to level stakes.
company ticker price 1/1/20 Shares out Mkt Cap (U$Bn) current pps gain/loss%
1 Newmont NEM 59.89 805 50.46 62.68 4.7%
2 Barrick GOLD 22.78 1778.04 37.14 20.89 -8.3%
3 Agnico Eagle AEM 70.51 244.187 15.22 62.32 -11.6%
4 Kirkland Lake KL 41.27 267.056 10.63 39.79 -3.6%
5 Kinross Gold KGC 7.34 1261.07 8.05 6.38 -13.1%
6 Pan American PAAS 34.71 210.262 5.96 28.33 -18.4%
7 Endeavour Min EDV.to 29.62 252.568 5.73 27.21 -8.1%
8 B2Gold BTG 5.60 1051.697 4.44 4.22 -24.6%
9 Alamos Gold AGI 8.75 392.739 3.03 7.71 -11.9%
10 Pretium Res PVG 11.48 187.833 1.82 9.68 -15.7%
Prices in U$ except EDV.to (share price in CAD$ and mkt cap in approx USD) Port. avg -11.06%
The rich get richer and the poor get poorer. The four winners on our list (NEM, GOLD, KL,
PAAS) are found in the top places, the other six were losers (AEM, KGC, EDV.to, BTG, PVG,
AGI) and the four worst performers were the smallest market cappers in this big swimming
pool. Most of the moves in either direction were small worth the biggest change the drop in
EDV, down 7.8% on the fall-out from its recent LSE IPO (aka a nasty hangover from a night out
in London). Meanwhile, BTG also underperformed (see below). With GDX managing to rally
0.67% on the week, the EDV weakness and BTG legal action means our Basket dropped even
further behind the benchmark
14
The 2021 Producer Basket: Weekly performance and 20%
comparative to GDX control
15%
10%
5%
0%
-5%
-10%
-15%
-20%
Nearly half a year gone and this is my worst performance ever versus the GDX, so far at least.
Now for a little on BTG:
B2 Gold (BTG) (BTO.to): The chart chosen to accompany this short note on BTG is the YTD
comparative with GDX, to remind you how badly this company is lagging its field in 2021
despite all that cash. We had news last week and while there may be some haste about the
way B2Gold (BTG) (BTO.to) has reached for litigation and decided to take the government of
Mali to court over the non-appearance of some permits (5), for me the lesson of the NR last
week different; BTG shows how companies will manage to keep difficult and negative
developments well away from the eyes of the outside world until they are absolutely obliged to
do so. We note the process that brought last week’s NR started in October, when BTG applied
for a permit extension that was its right under the 2012 mining code, but was told that the
2019 mining code now took preference. It must have been obvious to the company back then
they were en route for a shakedown, but we on
the outside knew nothing. Cut to today and BTG
brings out the lawyers to stop a concession
pirate from getting its prized Anaconda and, in all
likelihood, the company will prevail. Clive
Johnson may be more belligerent than the
average CEO, but he chooses his fights with
government better than others (e.g. Neumeyer
and Mexico).
Finally and a semi-aside, Josh Wolfson of RBC
recently reiterated his ‘market perform’ rating
and U$5.75 price target for BTG, representing a
36.3% upside to this weekend’s price. For what
it’s worth, Wolfson is one of the better brokerage analysts and without having his depth of
detail on the company, I basically agree with that call.
The Tiny Dogs
After twenty-five weeks of 2021, the Tiny Dogs show a loss of 2.32% to level stakes.
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The 2021 Producer Basket: Percentage difference between
GDX benchmark and basket (negative = IKN basket ahead) 8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
basket 1.0%
gdx control 0.0%
source: Google, IKN Calcs ts1
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t01naJ ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht7ram ht41 ts12 ht82 ht4rpa ht11 ht81 ht52 n2yam ht9 ht61 dr32 ht03 ht6nuj ht31 ht02 ht72
source: IKN calcs, NYSE/Nasdaq/TSX data
company ticker price 1/1/21 Shares out Mkt Cap current pps gain/loss%
Antler Gold ANTL.v 0.205 61.348 7.06 0.115 -43.9%
Aston Bay BAY.v 0.045 163.975 7.38 0.045 0.0%
Constantine Met CEM.v 0.17 45.4 10.90 0.24 41.2%
Contact Gold C.v 0.115 240.757 21.67 0.09 -21.7%
Golden Pursuit GDP.v 0.22 40 6.80 0.17 -22.7%
Manitou Gold MTU.v 0.045 230.79 17.31 0.075 66.7%
Precipitate Gold PRG.v 0.240 106.241 13.28 0.125 -47.9%
QC Copper QCCU.v 0.315 105 20.48 0.195 -38.1%
Red Pine Expl RPX.v 0.400 95.806 61.32 0.64 60.0%
Warrior Gold WAR.v 0.090 91.818 6.89 0.075 -16.7%
Prices in CAD$, data from TSXV basket avg -2.32%
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.
Very difficult to scrape a signal from this basket 20% Tiny Dogs, 2021 weekly tracker
18%
today, with just two winners on the week
16%
(WAR.v, GDP.v) and three losers (ANTL.v, QCU.v, 14%
12%
RPX.v) the other five stocks unchanged. Volumes
10%
were light and the only moves of note were 8%
6%
Antler Gold (ANTL down 17.9%) to the downside 4%
and Golden Pursuit (GDP.v up 30.8%) to the 2%
0%
positive. The only conclusion to draw is the same -2%
-4%
as from recent weeks, that the broader market
-6%
remains uninterested in the tiniest of the mining
plays and is a signal of relative indifference.
Golden Pursuit (GDP.v): The company rose 30.8% last week on its first real news, namely
the filing of its 43-101 compliant technical report on its South Gordon Lake property in NWT
Canada. In effect, the technical report is an outline of the company’s prospective moose
pasture and the real information is at the end of the accompanying NR (6):
Aurora Geosciences Ltd. of Yellowknife, NT, has been contracted to evaluate the
historical work and develop an exploration program to systematically evaluate the
potential for economic mineralization at the SGLP. This exploration program will be
initiated during the summer of 2021.
This early stage exploreco now moves to the field, burns some boot rubber and with luck will be
able to report positive findings in the autumn. It is your actual early stage exploreco with a
project of merit and we wish them fortune, as last week’s price pop was more about the
company coming out of hibernation than the prospectivity of South Gordon Lake
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.
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source: IKN calcs, TSX data
Regional politics
Argentina: Truck tire recycling in San Juan, Argentina
An example of how mining is now integrated into the economy of San Juan, Argentina. In a
country with no plantations or industry, Argentina has to import all its rubber. However in 2018
a company was set up in San Juan to recycle the approximate 650 mine truck tires that are
used and worn by local mines (e.g. Veladero). The U$2.5m investment at a local industrial park
provides jobs and the only rubber re-cycling processor in the country, a benefit to economy and
ecology.
Chile: The Royalty law’s slow passage
When the false polemic broke a few weeks ago, these pages noted that one of the potential
futures was a Chilean Senate that decides to slow-play this controversial law package, one
based mostly around a 3% royalty on sales (and not mine gate value, which has the mining
companies most worried). It’s turned out to be so and the largely pro-Piñera Senate has
enough political manoeuvres to keep the vote from happening until now.
However, the project is now expected out of Committee and onto the Senate floor in two to
three weeks (Mid-July, with the 14th currently pencilled in) and last week saw a new complaint
arising from Senate, how the country’s fiscal standstill agreements with companies stop any
new taxes from being raised. The talk is of first how it will be “illegal” to raise a new royalty on
mining (ironic, coming from the people who literally make the laws) to the “unfairness” the way
most fiscal standstill agreements between government and mining companies lapse in 2023,
e.g. the world’s biggest copper mine at La Escondida, but other agreements will go on for many
more ears, e.g. Spence and La Quebrada would be able to avoid paying any new burden until
2031 and 2032 respectively. Expect the foot-dragging to continue all through 2021 and this hot
potato then gets handed to the new President by the outgoing Sebástian Piñera (7).
Guatemala: “Pre-consulting” at Escobal continues
Last weekend saw the second “pre-consultation” meeting between the actors around d the
Escobal mine in Guatemala, illegally given a permit to operate in 2013 after Tahoe Resources
paid a large cash bribe to the President of the country. The process to unravel the mess
promises to be long, the first “pre-consultation” meetings all about setting the rules to the
satisfaction of all sides and resolutions passed at a snail’s pace. The next meeting is scheduled
for July 17th, at which we should begin to get an idea as to whether the process will move to
“consultation” before the end of 2021.
Ecuador: Chocó Andino in the spotlight
Move over Cuenca and Azuay, from now we have a new region of Ecuador at the head of
resistance to the arrival of mining, The Chocó Andino region in the North of the country has
been organizing its anti-mining movement for the last 18 months by collecting the requisite
amount of signatures for a full local referendum question on mining. Last week (8) the petition
was officially recognized by the Ecuador electoral body (CNE), which means it has passed the
verification of the 200,000+ signatures required to demand a referendum question.
The CNE now has until mid-July to pronounce on the case and, assuming all paperwork is on
order, the job will then move to organizing the vote and deciding on the question to be asked.
This region hosts the highly controversial Llurimagua project in the Intag region of the country,
which Ecuador in JV with Chile’s Codelco has tried and failed to move forward for years. Please
recall that in Cuenca this year, the referendum vote went against mining by 80/20.
Peru: Two ex-mining ministers on Castillo’s entry
BN Americas interviewed two ex-Ministers of Mining in Peru last week for their views on Pedro
Castillo’s election win (8). Francisco Ísmodes, who since leaving the job has been working in a
company promoting CSR and sustainability in mining, said that apart from the nervousness he
sees in the market, “Castillo has “been trying to distance himself from the most strident talk of
17
expropriation and nationalization of mining assets”, and that for the most part, mining
companies will flatly refuse to negotiate any new payments. He said, “We have to wait for the
first messages from the new authorities”, which is the same line used on these pages in the last
couple of weeks; the real substance of the Castillo government comes with his inaugural speech
(one month to go). He was also optimistic about the arrival of left wing economist Pedro
Francke in the Castillo team, as he will be able to guide the inexperienced Castillo team on what
they can and cannot reasonably achieve.
Another ex-minister in Peru, Guillermo Shinno, was less diplomatic. Shinno was at MINEM for
five years and was Minister in the Humala government, but since 2020 has headed the Guido
del Castillo gold mining empire of Anabi SAC (which includes the Aruntani, Anabi and Apumayo
gold mines. Shinno said that investors are nervous and aren’t going to invest anything until the
Perú Libre party’s plans for a constitutional overhaul are better defined. The fear he outlined in
Peru business circles is a process on a par with Chile at the moment, which would first decide
whether the country wants a new Constitution and then go about adding the details. Shinno
expects capital works projects that are already happening to continue, such as Quellaveco
(Anglo) and Mina Justa (Chinese capitals), He sees the problem is with brown fields projects or
those requiring outside capital, very much among the lines of the house argument last
weekend. It’s worth noting that Anabi SAC has a poor track record in social and environmental
matters and their mine in Puno has been ordered to close by a multitude of authorities due to
long-term environmental damage.
This week in Peru
It was another week in which coverage on Peru is a choice between covering the main points or
writing 25 pages of script. You’ll be happy to know I’ve gone for the former, here are three
clear statements:
It’s a small margin, but it’s enough. Pedro Castillo has won the election in Peru (by
roughly the same amount with which PPK beat Keiko Fujimori in 2016) and will be the
country’s next President.
The right wing in Peru is trying to stop the result from being ratified. It won’t work and,
more than any legal or military schemes they may have, public opinion in Lima has
moved away from more reactionary plans.
There are all sorts of legal plays going on and plenty of shouting about (empty) legal
threats, but the chances of serious disruption to the handover process in Peru has
dropped to virtually zero. Come July 28th and 29th, Peru will have its new President (and
then the bad things start).
Last week we talked about the “storm before the calm” in Peru, that storm probably hit its peak
on Tuesday when a large number of Peruvian military officers (some former, some current and
even some in uniform) held a protest meeting in one of Lima’s main squares about the
imminent arrival of Pedro Castillo as their President. The implied message was “military coup”
but the reaction from the general population was negative. The right wing’s attempts to
“influence the election result” in order to favour Keiko Fujimori are wearing thin and the general
population is now tired of the Fujimori lines of attack. Another dynamic is the growing
realization, even among enemies, that the Peru Libre policy line and message is getting watered
down quickly. For this we need to tap into the public opinion of the capital city Lima, which got
the “Communist Threat, New Venezuela soon” imagery all through the run-off campaign.
During the run-off campaign, one of the lines used was that “Castillo will expropriate your
house” and “Castillo will bring people for Cajamarca to live in Lima for free in stolen houses”.
While we agree the Perú Libre party is the wolf in sheep’s clothing today, the Right has made
no end of mistakes by trying to paint Pedro Castillo as the right-hand-man and close ideological
partner of party chair, Vladimir Cerrón.
Castillo is, after all, a State school teacher. His nerves of a bigger stage are now mostly
disappeared and while he knows how to deliver polemic rhetoric in the style his supporters like,
18
he’s also softly-spoken by nature, a family man and regular churchgoer on Sundays and, as one
example of the non-progressive nature of the incoming Peru left wing, upholds socially
conservative views on same-sex unions and is pro-corporal punishment for criminals (this is
nobody’s idea of a hand-wringing Lefty, folks). So the opposition’s insistence on personality
politics has put Castillo the person into the spotlight and that now works in his favour. The
week’s best example was when ex-candidate and family member of Lima Society George
Forsyth (his father the ambassador to Japan) made his first public declarations since the
election after meeting with Pedro Castillo at his party HQ in Lima. Forsyth told the press outside
the door this (translated) (10):
“The conversations I have had with Mr. Castillo are ones in which he has again
commented and assured me that he is not a Communist and isn’t going to expropriate
(your houses). We should not have this fear. This is a message that I, like many
Peruvians, wanted to hear, that he has this commitment. They have created an image
around him which is not true, he isn’t a Communist and isn’t going to expropriate (your
home).”
Forsyth went on to criticize Congress for destabilizing the country and asked the Electoral Body
to ratify the election as soon as possible. That will be a key moment, as it also then allows
foreign countries to send their messages and congratulate the winner. That’s when Keiko
Fujimori’s world falls apart (her husband and children are rumoured to have left town last week,
and she still faces prison time).
All pointers are to the same result, that Peru resolves its election and Castillo gets the big job.
From that point, the country will get busy on its domestic agenda but for those on the outside,
the main tell will be how the economy is managed and under the upcoming Castillo
government, Dora the Explorer's Map* is not required to work out the direction Peru now takes.
With the nation's (brand-new and self-appointed) financial guru Pedro Francke tipped by all for
the FinMin job, and orthodox centre-left wing Oscar Dancourt ready in the wings when Julio
Velarde retires from the BCRP once the inauguration is done, Peru new leaders will set sail for
Uruguay. Both men admire the monetary and fiscal policies used in "the best run province in
Argentina" (as the old joke goes**) and to be fair, they have done well for Uruguay over the
last two decades. However, Peru doesn't suddenly transform from one of the most open marlet
economies in South America to a stable Utopia of the Left and to get there, the first thing the
Castillo government will do is open up the Soles sluice. A looser monetary policy is an absolute
given in Peru's near future, as is a singular blast of inflation that will not go away. The, those
admirers of the Uruguay model about to take over control will start drawing in the monetary
levers at 8% to 10% inflation, as their theory believe that to be an optimum level for cross
sector growth. And that’s a long-winded paragraph to tell you that the Peru Sol (PEN) is going
to S/4.50 against the US Dollar next year and by then, with Covid-19 under control, Peru will
likely be able to offer you a great vacation at a very reasonable price. Your chance to visit a real
Communist country in the 21st century, as well as stay in 5 star luxury hotels.
*Let's face it, Map does all the work. And Boots is an all-time hanger-on.
**Aside Las Malvinas, of course
Market Watching
South America’s New Green Copper Deal
This is one of those piece that could have been part of the ‘Regional Politics’ section as well. It’s
gone here in “Market Watching” because I want to underscore the actionability and the way
both copper and lithium mining is being sold to South America (by governments eager for hard
dollar projects).
This interview with Vice Minister of Mining in Chile, Juan Carlos Jobet, on CNN Español (11) last
week was headlined loud and clear: “Our mining will be essential to produce those minerals
19
required to stop climate change”. The Vice-minister then lays out the pro-mining case for the
Green Revolution, with an emphasis as you’d expect on lithium and copper during the generalist
news hour Q&A.
Next up, here’s Argentina “Superminister” of Production, Matias Kulfas:
“Our Productive Agenda is Based on Green Development” (12)
A long, detailed and interesting Q&A on the country’s plans for its New Green Deal with fellow
Argentines, the mining industry central to the interview. Kulfas gives his always pro-mining (and
critical of left y ecologist types) views on Catamarca, Chubut and San Juan, again with plenty to
say about copper and lithium. Kulfas takes his cue from Alberto Hensel, who is now showing
Ecuador’s new administration the way forward, etc. This trend is coming to a South American
country near you, the government policy of promoting open pit mega-mines as an integral and
welcome part of the New Green Deal. What’s more, across the region it’s proving to be a vote
winner, allowing populations to back development and economic growth and counter all the
legitimate arguments against the installation of a region-changing mine with solid arguments of
their own.
The effects of this new and apparently effective promotion won’t be felt first in the sensitive or
politically difficult zones. Instead, this is a message that helps pro-mining regions push forward
faster and at this point, this desk’s thoughts once again turn to San Juan and its combination of
positive factors. Not only is it know known in mining circles as “the miner friendly province”, it
will also benefit from a long-standing (and culturally deep) rivalry with Chile, its Andean
neighbour. With Chile’s image temporarily dented by the royalty debate and its consequences,
there is nothing San Juan would like more than to take over the mantle as the place to go for
copper mining, preferable even to Chile. With Filo Mining’s discovery and two large mines
already operating and superior geology, San Juan is surely the place SuperMin is looking to for
his copper development programs.
PS: On first re-read, I convinced myself Aldebaran is a good speculation at the right price, a
strategy that fits current political circumstances well.
Think Zinc, Part 722
From time to time our eye is drawn by “unsexy” zinc and we make mention of its potential as a
near-term trade vehicle.
The Zinc Panel being run by the 6ix webinar people got mention on the blog last week (13)
and, jovialities aside, I will indeed be listening in tomorrow on the views of the panel on Zn. My
own chosen vehicle to ride any wave of Zn interest, Wolfden Resources (WLF.v), isn’t part of
the gig but three other juniors in the same field are and, with Zn looking ready to make a run in
the spot market, the time may be upon us to trade out of WLF. This panel looks a cut above
the standard and is worth your time.
News from Rio2 Ltd (RIO.v) to break the financing logjam
Finally, some real news out of Rio2 Ltd (RIO.v) last week and, after dutifully digesting its
significance, this weekend I get to make strident and bullish comments about this house Top
Pick stock for the first time in a long time. On Tuesday June 22nd pre-open, our Top Pick filed
this NR (14) entitled “Rio2 Selects Run-of-Mine Leaching for the Fenix Gold Mine”. We then get
plenty of results data and analysis of what moving to Run-of-Mine (ROM) means for Fenix
project economics, but we’re not going the numerical route to convince this audience that the
time to buy and grab hold of Rio2. Instead, the real catalyst in last week’s NR was buried right
at the bottom. The CEO notes had three separate statements:
“The successful completion of the ROM heap leaching trial is an important milestone
for Rio2 as it simplifies the mining and processing components of the Fenix Gold Mine
by eliminating the need for installing a crusher and the subsequent double handling of
mined material before its placed on the leach pad.
20
True. Then…
“The resultant reduction of cyanide and lime consumption will also have a positive
impact on the mine’s operating costs.”
True. Then…
“The results of this ROM test work were pending for the finalization of the construction
financing for the project.”
Aha! The buried lede and the reason I was keen on meeting up with RIO.v CEO Alex Black that
very afternoon, his time finally available for a real chat (an informal blackout period, all
fair). We went through the details of the NR and he also added some flavour which allows this
author to tweak the model slightly (though when your base case uses U$1,300/oz gold and
your pit model is based of a U$1m,500/oz shell, the project was economically robust even
before ROM improves margins. Under the new ROM protocol, benchmark recovery is 77% on a
relatively fast approx 60 to 65 day cycle (which rises as residual ounces leach out but for
economic mine purposes you have a cut-off). Do not underestimate how well RIO at Fenix
scores on these points; this project is technically and geologically straightforward, met results
show low or standard use of NaCN and lime reagents, everything is box standard,
straightforward. Even water consumption, now calculated to the Nth degree for all stages of
development and a plan that covered it al (they used the water under the main contract from
Copiapó in their sampling and testing to cover that base at the same time; all good).
Long story short, while capex won’t change much, the op-ex savings from the ROM trade-off
are substantial and will surely lower AISC projections. In brief, the results of ROM testing have
confirmed all suspicions and expectations in-house at RIO. Now as to why that’s important to
then financing, as CEO Black explained last week (now open to explain the point) that the
probable move to ROM leaching started around Q4 last year, coincidentally around the time
financing talks got serious. Which now, finally a post-facto, shows the bottleneck this new
direction caused the financing deal and why it's been delayed so long.
Frankly, I was relieved to hear and logical and sound reason, finally, for this extended and
utterly frustrating delay. Therefore, to paraphrase and illustrate what I learned last week, here’s
a pretend conversation between RIO.v and The Financiers in, let's say, January of 2021:
Financiers: “So all good, and we like the PFS data”
RIO2:” And what's more, we think we can improve the economic metrics by using ROM.”
Financiers: “Really? That would be good. Show us the data and we can perhaps improve
terms.”
And that's what RIO2 did for Fenix, via re-logging, more drilling, met and recoveries testing etc.
However, then life happened as, for the gold assays from Fenix, core has to be sent from the
site to Santiago then to ALS Chemex Lima Peru. With Peru labs already highly backlogged,
RIO.v was caught in the delay and the extended wait knocked against the financing deal, with
all sides (and not just the bankers) wanting to know about improved economics and how the
economic trade-off are optimized before closing the deal. Which is where we are today: Now,
finally the technical teams of the two
parties about to fund Rio2 Ltd into
operation at Fenix review their data, the
parties get together and we can close this
most annoying financing.
The bottom line: It’s testimony to the tight
lips of CEO Alex Black that I only found
out about the Gordian Knot that last
week’s NR untied on reading the NR after
no end of coffees and chit-chat these last
21
six months. But we now know seemingly endless financing process at RIO.v has been held up
because of “the labs in Peru”, in an exponentially worse way than normal way suffered by
junior explorecos. We get to finish with a flourish and good news about this Top Pick stock; the
logjam is now broken, the delay is now behind us and CEO Black expects the financing process
to wrap up quickly. Time to get on, latecomers.
Conclusion
IKN631 is done, we end with bullet points:
Even though Friday’s blog post and today’s main Fundies section are all about Argonaut
Gold (AR.to), and even though I’m now finally buying the stock (at an excellent price),
today’s most important event is the note on Rio2 (RIO.v). This is a big personal position
as well as a Top Oick on my reputation as an analyst, so it’s great to finally see the
movement we need. Expect the financing to happen soon, then after that Rio2 will
never be quiet again.
However, Argonaut Gold (AR.to) is still compellingly priced at today’s levels compared
to where we can confidently expect the company to be in a couple of years. An obvious
buy, I am buying.
Last week’s re-entry into Copper Mountain (CMMC.to paid off immediately, it should
now re-take the 4-handle easily and move higher, but we need to watch out for
volatility in the copper space these days.
Once again, this Weekly gets all its job done in 25 pages, a better and easier read
when I cut out the blabber.
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.
Best, Mark
Footnotes, appendices, references, disclaimer
(1) https://www.calculatedriskblog.com/2021/06/schedule-for-week-of-june-27-2021.html
(2) https://www.barchart.com/story/news/1953318/precious-metals-close-higher-on-dovish-us-inflation-data
(3) https://www.argonautgold.com/English/assets/development/magino/default.aspx
(4) https://finance.yahoo.com/news/aurelius-expands-multiple-high-grade-100000840.html
22
(5) https://www.b2gold.com/news/b2gold-commences-international-arbitration-proceedings-against-the-republic-of-mali-
relating-to-the-menankoto-permit
(6) https://www.goldpursuit.ca/golden-pursuit-resources-ltd/
(7) https://gestion.pe/economia/estabilidad-tributaria-la-piedra-en-el-zapato-del-proyecto-de-regalias-mineras-en-chile-
noticia/
(8) https://mundo.sputniknews.com/20210623/ambientalistas-de-ecuador-presionan-por-consulta-popular-sobre-
mineria-en-quito-1113489790.html
(9) https://www.bnamericas.com/es/noticias/ex-altos-funcionarios-del-sector-minero-anticipan-menor-dinamismo-en-
nuevas-inversiones
(10) https://larepublica.pe/elecciones/2021/06/19/elecciones-2021-george-forsyth-tras-reunion-con-pedro-castillo-no-es-
comunista-ni-va-a-expropiar-pltc/?ref=lre
(11) https://www.cnnchile.com/m360/ministro-jobet-mineria-esencial-minerales-requeridos-frenar-cambio-
climatico_20210626/
(12) https://eleconomista.com.ar/2021-06-kulfas-agenda-productiva-verde/
(13) https://iknnews.com/dont-miss-the-live-6ix-webinar-on-monday-featuring-brandon-macdonald-of-fireweed-zinc-fwz-
v/
(14) https://finance.yahoo.com/news/rio2-selects-run-mine-leaching-120000161.html
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
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
23
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
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
24
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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