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The IKN Weekly
Week 635, July 25th 2021
Contents
This Week: Corrigenda, Trade heads up, In Today’s Edition, Hold the dog days of summer.
Fundamental Analysis: Rio2 Ltd (RIO.v) raises capital.
Stocks to Follow: Mene Inc (MENE.v), Copper Mountain (CMMC.to), Argonaut Gold (AR.to),
Cartier Resources (ECR.v), Strategic Metals (SMC.v), Minera IRL (MIRL.cse), Aldebaran
Resources (ALDE.v), QC Copper & Gold (QCCU.v), Rio2 Ltd (RIO.v), Amarillo Gold (AGC.v)
Copper Basket: Overview.
Producer Basket: Overview, Newmont (NEM).
Tiny Dogs: Overview, Red Pine Exploration (RPX.v), Constantine Metals (CEM.v).
Regional Politics: Peru this week, Chile: The royalty debate and Mark Cutifani of Anglo
American, Colombia: Anglogold Ashanti doubles down, Ecuador begins process on its new
mining law, Argentina: San Juan is Becoming investment grade for mining.
Market Watching: Buenaventura (BVN) news supports the bullish Peru case, Southern Copper
(SCCO) technical analysis supports the bullish Peru case, Tracking the ‘Buy Peru’ call, A Side Bet
purchase planned for Harte Gold (HRT.to).
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
“
Corrigenda
After over a decade of doing the same thing, you’d think The IKN Weekly would be a polished
end product by now, some a professionally produced and distributed publication with slick
graphics, letter-perfect script and a balanced look to each page. However and to literally
translate that Spanish expression again, “The reality is other”.
For an example of how Weekly sometimes turns into its own little race against time*, IKN624
last week, its fakey “site visit” escapades around the city of Lima gleaning political information
ate into time normally dedicated to writing. Come Sunday, I was playing catch-up, focused on
the details on the intel and getting the Peru piece right and somehow (and I still don’t know
how) managed to cross wires and believe Copper Mountain was about to report its quarter.
Therefore, to correct and make clear expected coverage, our main copper speculation trade,
Copper Mountain (CMMC.to) reports its 2q21 tomorrow, Monday July 26th. I will be on the
numbers and the call, if there is any change to our current ‘buy’ call and target price you’ll hear
about it in a Flash update. If not, we run the numbers next weekend.
*This desk welcomes hard deadlines with open arms. Nothing gets done otherwise.
Trade heads-up
There won’t be a lot of money on the trade and it will remain a “Side Bet” in the ‘Market
Watching’ section of The IKN Weekly due to its small size, unusual trade set-up and likely quick
holding time. Despite those limitations, I am a buyer of Harte Gold (HRT.to) next week on a
trade around the time HRT should come to market with some type of corporate rescue plan.
Our trade is to align with Appian, see ‘Market Watching’ for more.
1

In Today’s Edition
 The summer market and its Doldrums has near-term consequences for junior mining
portfolios. Grit your teeth, hold through until September, see today’s intro for more.
 Our Top Pick stock Rio2 Ltd (RIO.v) provided the main news of the week, the company
finally reaching an agreement on financing for its Fenix project in Chile. Today’s main
event in Fundies.
 Boring summer or not, I’m going back to market and buying next week. Not an official
IKN position, but a side bet the risky but cheap Harte Gold (HRT.to).
 Last week’s main fundamentals note was an important one, the macro consequences of
the changes in Peru and our renewed bullishness on the country’s mining sector. But
instead of dominating the politics section, we instead use Market Watching to lay the
foundations and note a couple of other bullish indicators, other than my own.
 As for the politics section, we need to cover the inauguration of Castillo but for me, the
most interesting “country” for mining in South America today is San Juan, Argentina.
Hold the dog days of summer
“You know, I gotta keep them cooled out, I gotta keep all you people
happy, I gotta have all the ideas and I gotta do it all alone.”
Sonny Wortzik, Dog Day Afternoon, 1975
Company-specific news aside, and we have plenty of that to chew on with Rio2 this weekend,
last week was another difficult one for mining and junior mining investors. Sketching with our
standard benchmarks, we saw gold trade slightly lower (GLD proxy own 0.5% week-over-
week), but miners (GDX down 2.3%) and junior miners (GDXJ down 2.8%) sold lower still, as
you might expect, but all the above on markedly lower traded volumes. Same story at GLD,
which saw just 1.17 metric tonnes of gold move from its vaults in one transaction on the week.
Nobody added, instos are not taking delivery.
GLD gold holdings, 2018 to date (metric tonnes)
1400
1300
1200
1100
1000
900
800
700
600
500
The Summer Doldrums were reported arrived last weekend, so there’s no great surprise in this
continued market action but holding juniors and explorecos can be particularly unpleasant at
2
81/1/1 81/3/1 81/5/1 81/7/1 81/9/1 81/11/1 91/1/1 91/3/1 91/5/1 91/7/1 91/9/1 91/11/1 02/1/1 02/3/1 02/5/1 02/7/1 02/9/1 02/11/1 12/1/1 12/3/1 12/5/1 12/7/1
mt 7.40 GLD: Inventory/Price Ratio, 2018 to date
7.20
7.00
6.80
6.60
6.40
6.20
6.00
5.80
source: SPDR GLD data 5.60
2/1/8102 11/2/8102 32/3/8102 2/5/8102 11/6/8102 12/7/8102 03/8/8102 9/01/8102 81/11/8102 82/21/8102 6/2/9102 81/3/9102 72/4/9102 6/6/9102 61/7/9102 52/8/9102 4/01/9102 31/11/9102 32/21/9102 1/2/0202 21/3/0202 12/4/0202 13/5/0202 01/7/0202 91/8/0202 82/9/0202 7/11/0202 71/21/0202 62/1/1202 7/3/1202 61/4/1202 62/5/1202 5/7/1202
Source: SPDR data, IKN calcs

times like these. When there’s little new appetite from buyers and nothing happening among
the larger positions, it’s common to see stock prices and market caps marked down on low
volumes and no apparent reason. Worthy of a shoulder shrug if it happens two or three days in
a row, the effect becomes annoying after two or three weeks in a row which is where we are
today. This desk’s advice, borne of experience, is to ignore this summer market and go do
something better with your time. Without a set macro direction at the moment, stocks are likely
to bounce around further and it’s anyone’s guess as to which is next (and in what direction). A
product of lack of volume, the solution is the standard annual market cycle is patience and
before long, Jackson Hole and then Labor Day will see the market tighten up.
Until then we have Tokyo and The Olympics, not a big thing in Spanish speaking South America
but Brazil and Argentina are normally enthusiastic and successful participants. For the rest of
the continent, it’s a world-level football tournament with a few other sports happening around it
the same time. But if sport isn’t your thing, there are plenty of other distractions from the
current market and sometimes, the best investment decision is to do nothing and chill out:
The 2021 Dog Days: July 3 to August 11.
Fundamental Analysis of Mining Stocks
Rio2 Ltd (RIO.v) raises capital
It took a longer than it should, but as of last week Rio2 Ltd (RIO.v) has a firm financing deal on
the table. The announcement of the deal (1) then the pricing of the connected $30m+
placement at 65c the next day (2) means RIO.v has passed the major hurdle it faced to build its
mine and, along with the many positive details that come with this financing package, it’s no
stretch of the imagination to consider RIO.v a debottlenecked project, even before ground is
broken at Fenix. Today’s note on Top Pick Rio2 Ltd has three main sections:
 We go over the details of the deal
 We consider background and information that helps put the financing into context
 We run the numbers and come up with a new target price
Let’s get on with it, beginning with the news and the contents of last week’s NR and with the
superfluous information stripped, we’re left with three parts to this financing:
 A U$50 million Gold Purchase Agreement (“Gold Stream”) with Wheaton
Precious Metals (WPM)
 A U$50m to U$60m Senior Secured Debt facility with BNP Paribas (BNPP)
 C$30m financing, with WPM taking C$5m of the total, priced at 65c per share
As for the CEO comment on the deal, we got this: “Securing this Mine Financing Package is a
3

significant milestone event for Rio2 and a testament to our management team and the strong,
long-life, project fundamentals offered by the Fenix Gold Project.” My only bone to pick with
that is one CEO Black cannot say aloud anyway; last week wasn’t a significant milestone event
for Rio2, it was the significant milestone event. However, for such an important moment the
news wasn’t blasted wide and far, there was no conference call to accompany the NR, no
webinar, not even an updated corporate presentation on the website. On inquiry, CEO Black
said there would be an updated presentation once the financing was closed, and that last week
he did a segment with Crux Investor which should make it to the open airwaves by next
weekend (or subscribe to Crux to see it earlier). But RIO.v isn’t trying to curry favour in Canada
with this announcement and that is its own message.
The deal
Now some background on the quality of the package, starting with the big name players putting
up the cash. In fact, key to the whole process has been Wheaton Precious Metals (WPM), who
signed an NDA early in the process and, as time went by, became evermore enthusiastic about
the project and its potential. With WPM actively interested, Rio2 enjoyed the virtuous circle of
first watching lesser royalty/streamer companies drop out and then being approached by BNP
Paribas for the Senior Secured element of the financing.
Regarding both BNP Paribas and WPM, one of the most intriguing aspects for me the outsider is
to note how small these deals are for them compared to the type of funding they normally
require. Big companies need big deals to move the dial, instead we have WPM putting in $55m
and BNPP good for up to $60m, figures they wouldn’t normally get out of bed for. There are
two reasons for this. Firstly, WPM’s enthusiasm isn’t just based on the economics of the 2019
Feasibility Study (FS). That document focused on the reserves at Fenix, rather than the wider
resource. These two tables from the 2019 FS show the gold RIO plans to mine under the
economic study…
…but that 1.828m oz Au is only part of the larger resource:
The above is the attraction for WPM, they have an open-ended stream on 5m oz of gold and
will be able to book that in the asset column every quarter. The RIO.v stream may be a
relatively small deal for Randy Smallwood & Co, but the way in which it has the potential to
deliver ounces for two or perhaps three decades means the big company was keen.
A similar situation arose with BNP Paribas, a world level international banking and financing
entity that has $60m entries as minor angles on much large deals. In effect BNPP became keen
because WPM became keen, the result of two high quality players backing your company suits
RIO.v fine. This mismatch in size brought practical issues too, such as the way RIO only needs
U$130m or so to build its mine and the financiers wanted to lend more than that. Throughout
the process, RIO.v has had several options in the way it financed Fenix and, as this deal
solidified to one based on WPM and BNPP, other more expensive options were dropped. What’s
more, the financiers also wanted a window to raise at least some of cash via equity, which
takes away more of the U$130m pie. Ultimately, the consortium has split the raising $55m
(WPM) $50/$60m (BNPP), $25m (equity) and it work for all sides, but off record we can confirm
that RIO.v was offered a lot more money than they could have used.
4

The WPM stream
The quality of the financiers and WPM’s enthusiasm are excellent signs from last week’s NR. We
now consider the three elements to the deal separately, before bringing them all together in the
updated economic model to produce a new target price, starting with the WPM stream. In
exchange for U$50m (U$25m immediately) WPM gets the following:
 The right to purchase refined gold equal to 6.0% of the gold production until 90,000
ounces of gold have been delivered
 Then the right to 4.0% of the gold production until 140,000 ounces of gold have been
delivered.
 Then the right to 3.5% of production. In this final stage, once WPM has received its net
U$50m its payments increase to 22% of spot.
The price paid looks expensive at first sight and, if you run traditional Cost of Capital
calculations you get numbers such as 22%, which is crazily expensive. The reason for this is the
bootstrap method RIO is using to reach full production; they don’t need a lot of upfront capital
to enter production and once they do, the plan calls for incremental throughput growth to reach
production of 250,000 or even 300,000 oz per year. The issue is scale, rather than cash which
is visualized here: This is how we are currently modelling production at Fenix:
OzAu Rio2: The stream in context
300,000
250,000 annual production
WPM stream
200,000
150,000
100,000
50,000
-
1 2 3 4 5 6 7 8 9 10 11 12 13
year
Here are the same blue columns of delivery ounces to WPM, separated out for clearer viewing:
Rio2: The stream in context
Oz Au
16,000
14,000
Au delivered to WPM
12,000
10,000
8,000
6,000
4,000
2,000
-
1 2 3 4 5 6 7 8 9 10 11 12 13
year
I would agree 10,000 oz of gold is a lot of money, but this burden is a progressive one and runs
with RIO’s ability to pay more as time goes on. Or put simply, nobody is going to complain
about a lack of blue sky upside to RIO when it is producing over 250,000 oz gold per year and
sending just 10,000 of them to WPM.
5

The equity component
We move on, offering a pro rata share count on how we expect this deal to leave Rio2 on
Production Day 1 (PD1). Here’s a list:
 Current shares out are 199.593m
 The now opened 65c share offering will make for (38.5m x 1.15) 44.275 shares sold, as
the 15% overallotment facility will be fully filled by tomorrow or Tuesday.
 Then 7.69m shares sold to Wheaton Precious Metals (WPM), also at 65c, for its
separate $5m allocation.
 Finally, we need to add the 28.27m warrants held mostly by Eric Sprott, priced at 50c
and with an expiry of August next year. When those become whole they’ll ad a useful
C$14m to treasury but the shares add to our forecast count as well.
With those elements in place, this is our estimate on corporate structure on the first day of
production at Fenix:
Pro rata shares out: 279.9m
Options: 6m
Warrants: Zero
Fully diluted shares: 285.9m
Current share price: C$0.68
Pro rata Market Cap: C$42.3m
Approx cash per S/O: 50c
All prices are in Canadian States Dollars unless stated. Forex U$0.80=CAD$1
Bottom line: We expect Rio2 to have 280m shares out by production day one. Our model has
used 270m shares out to date, so a slight dilution but, on the other hand, the Senior Debt
package is small and less financially onerous on operations.
The Senior Secured debt
The third major part of the Rio2 raise is Senior Secure Debt raised by BHP Paribas and this is
what we know from the NR:
“… engaged BNP to act as the sole and exclusive bookrunner, sole and exclusive lead
arranger, and sole and exclusive administrative agent for the Senior Project Debt
Facility in the amount of US$50-60 million. Proceeds of the Senior Project Debt Facility
will be used to fund the construction and commissioning of the Mine and available by
way of cash advances in US dollars, and for potential cost overruns. The Senior
Project Debt Facility is expected to have a principal grace period in line with
construction and ramp-up period and a tailored amortization profile designed to match
projected cash flows from the Mine. The closing of the Senior Project Debt Facility
remains subject to a number of customary conditions including the completion of
satisfactory due diligence, the receipt of credit approvals and the negotiation of
definitive documentation.
We don’t have the details yet, nor the interest rate RIO will pay, but CEO Black assured this
desk that it will be in line with the market and not an expensive product. Indeed, once again we
underscore that this debt facility may or may not be expensive, but it’s certainly small. For our
model today, we make reasonable ballpark assumptions and the weight of debt is there, but
once underway it’s not difficult to imagine this facility being paid down and away quickly as
Fenix ramps up production.
Other matters
Alongside the mechanics of how the financing package works, your author and CEP Black have
caught up on a couple of other pending issues, now that he is able to speak more freely about
developments at his company.
The move to Run of Mine: One of the last pieces to fall into place has been the recent decision
by RIO.v to move to Run of Mine (RoM) production. This means the company will place the
6

blasted ore directly onto the leach pads without any primary crushing done, this simple method
cutting operating costs significantly. As reported a few weeks ago, the backlog in labs for test
assay results in South America affected Rio2 significantly this year, as the financing parties
(WPM, BNPP) required those results before they could close on any deal. CEO Black informs
me that testing on RoM material was went better than even the company expected and
recoveries are as good as they were under single stage crushing conditions, with fast kinetics
and an approximate 77% recovery rate. In other words, the trade-off to move to RoM was a
no-brainer, with less handling of rock, lower operating costs and the same levels of recovery.
It’s also an angle that has Chilean mining engineers and geologist scratching their heads, they
never envisaged an operation in Chile could run on such a simple method. However, Rio2 has
had this ace up its sleeve for a while, having recognized its clean oxide mineralization was
different to any other in the region.
Updating on water supply: Although it’s been on the table ever since Rio2 took over Atacama
Pacific back in 2018, a couple of lines are in order on this issue because pushback against the
plan is inevitable. Put simply, Rio2 these days has a surfeit of water. The plan to truck water up
to site during stage one operations (to around 20,000tpd) raised eyebrows to begin with, these
days most commentators are comfortable enough with the idea but then quickly shift to “Ah
yes, but what about supplying water for an 80,000tpd operation?”. In response, Rio2 has
always had the plan in place to build its brown water pipeline and bring water up from its
contracted supplier in Copiapó, but aside from that baseline RIO.v has recently identified
several other water sources and owners of water licences in the region who are willing to strike
a deal on supply. Also, the purchase of the Can-Can strategic infrastructure in April last year
came with a quit bonus, as that property located close to Fenix also has water supply and rights
of use. In sum, these days Rio2’s issues are less about getting enough water into its project
and plans, more about choosing which source of water is best, most economic or most suited to
its long-term plans. Bottom line: anyone using the question of water to doubt Rio2 at Fenix
simply has not done their homework.
Chile political risk: Another issue is the apparent rise of the Left wing in Chile and political risk
attached to the shift in politics. The combination of the recent move to impose a new royalty on
mining, the upcoming Presidential election and the current process to upgrade its constitution
have cast LatAm’s best mining country in a new light recently, at least among those who watch
casually. I find it crazy how anyone falls for such nonsense, nobody on the left or the right is
going to mess with the country’s main source of revenue to any great extent. As for the royalty
debate, after watching one ill-informed analyst throwing shade on Rio2’s plans last week due to
current debate in Chile’s Senate I couldn’t help thinking that somebody should tell these people
that Chile plans to levy only on copper and lithium. And Rio2 is a gold miner. Small point.
Valuing Rio2 Ltd
We reach showtime and add new elements and refine our economic model for Fenix and RIO.v,
with a 12 month share price target at the end of the process. We begin with our framework
assumptions:
 RIO bootstraps operations, averaging 10,000 tonnes per day (tpd) in year one, then
20k tpd in years 2 to 5 as its first stage operations plan matures. After that the
company moves up through the gears to eventually reach a daily put of 80,000tpd.
 Grade begins at high levels, averaging 0.7 g/t in year one as the company mines the
sweet spot at Fenix Central. Then in years 2 to 5, grade drops to 0.5 g/t average, then
to 0.47 g/t and eventually the mine runs on low grade and stockpile only.
 The Run of Mine mining is a success and delivers 76% average recoveries. CEO Black is
absolutely confident about leach kinetics.
 Shares out at 280m, debt serving at a conservative $10m annual, plus reasonable
assumptions for depreciation, G&A etc. We also assume the current Chilean tax regime,
as there’s no reason to suppose any change no matter what others might suppose.
7

 A flat gold price of U$1,800/oz all through the model.
 Forex of CAD1 = USD 0.8
Here’s the first results table from those:
RIO.v: Fenix average year operating parameters
Tonnes per year 3,500,000 7,000,000 17,500,000 28,000,000
Avg grade (g/t Au) 0.70 0.50 0.47 0.35
Au prod oz (76% rec) 59,871 85,531 200,997 253,170
total Au rev 102.5 146.4 344.0 433.3
total sales 87.1 124.4 292.4 368.3
source: RIO data, IKN calcs & estimates
I’ve left the calculated The gold production numbers in their raw state, rather then round down
or up. The table shows four scenarios, with Year One and its expected lower throughput of
higher-grading material, the years 2 thru 5 which are set to run at 20,000 tpd, then Fenix runs
at full capacity of 80k tpd. This table takes some of that info and presents other items as well:
RIO at Fenix: Model Year Revenues & Op Income (U$m)
Year Year 1 Year 2-5 Year 5-10 Year 10+
Prod. gold (Oz) 59,871 85,531 200,997 253,170
U$/oz $1,800 $1,800 $1,800 $1,800
WPM stream rev 1.16 1.66 3.91 4.92
Other sales rev 101.30 144.72 340.09 428.36
total Au rev $102.47 $146.38 $343.99 $433.29
Op costs $45.50 $63.00 $157.50 $252.00
Operating income $20.73 $40.18 $111.97 $92.61
Sources: RIO data, IKN calcs and estimates
The move to RoM has dropped our cash cost assumptions, with op costs now ballparked at
$9/t. We move to our condensed income model:
RIO2 at Fenix: Income statement model year (U$m)
at 280m S/O Year 1 Year 2-5 Year 5-10 Year 10+
Sales (U$m) 87.1 124.4 292.4 368.3
Depreciation 12.0 12.0 12.0 12.0
SGA+R&D 8.0 8.0 8.0 8.0
Chile mine tax 0.9 1.2 2.9 3.7
Op income 20.7 40.2 112.0 92.6
Interest 10.0 10.0 10.0 10.0
Shares out 280 280 280 280
EPS 0.03 0.07 0.24 0.20
FCF 0.09 0.14 0.3055 0.26
Sources: RIO data, IKN calcs & estimates
Anybody considering RIO.v needs to understand that the current mine plan is a starting point
and not the entirety of what they are going to do at Fenix. The above table is the best example
of the bootstrap possible, come year seven this company will be free cash flow generating
monster.
Finally, to value RIO.v today we could go with the longer-term plans and imagine the price the
market would pay for a 250,000 oz gold producer running 50% gross margins. But no, instead
we value RIO on its stage one plan only, an intermediate price target that is achievable in the
near-term:
8

Sales and earnings Valuation data for RIO.v at Fenix based on
Year 1.5kAu 1.7kAu 1.8kAu 2.0kAu Year 2-5 avg production and U$1,800/oz gold
Sales (U$m) 87 124 292 368 12-month target $1.30 based on 8x FCF
Sales growth 43% 135% 26% Upside to target 92%
EPS 0.03 0.07 0.24 0.20 Mkt cap (CAD$m) $190 Enterprise value $140
FCF 0.09 0.14 0.31 0.26 P/sales (1.5k Au) 1.53 EV/sales (1.5k Au) 1.13
P/E (1.5k Au) 26.8 EV/EBITDA (1.5k Au) 4.3
P/E (1.7k Au) 9.5 EV/EBITDA (1.7k Au) 2.7
P/E (1.8k Au) 2.8 EV/EBITDA (1.8k Au) 1.1
At 8X free cash flow I’m keeping the model conservative and the price target above is some 28v
lower than the previous. But nobody should consider it the grail target, this is a stepping stone
and what RIO is capable of commanding before it expands production further. This is a new 12
month real world target based on what RIO can do at 20ktpd, enough for the time being.
Discussion and conclusion
This week saw a major moment in the development of our Top Pick stock, as this financing
package is a lot more than mere numbers. The terms of the deal and the raising are fair and
while main player WPM will be pleased with its deal, the structure is one that leaves enough
Blue Sky upside for anyone’s taste, but it’s the quality of the story that captures the
imagination.
 One of the big streamer companies, keen to do a $50m deal
 One of the world’s biggest banks comes on board for just $60m
 A country with a serious and regimented permitting track
 A team with a track record of building and running exactly this type of mine
Of all the stages, milestones and tests of a company that RIO has had to go through, the one
just past represented the greatest threat to success. In effect and while still over two years
before we get a gold pour, this project has been successfully debottlenecked and it’s very
difficult to imagine the circumstance in which Fenix does NOT get built any longer.
Rio2 has always been a long-term investment at The IKN Weekly and, once its potential project
economics were revealed to me, it become a Top Pick. Since that time it’s underperformed and
this weekend the personal position is still in
the red, but as this two year chart shows it’s
more about the way RIO tends to do nothing
at all as a stock price, then suddenly go
through a burst of activity.
It also shows that the stock hasn’t performed
quite as badly as most imagine, just hanging
on until you get financing isn’t such a bad
strategy after all . But now things will
change at RIO.v and the changes are likely to
be fast, the team is ready and will full funding
to production, expect a lot more newsflow
from the company as Fenix is built. Our new
C$1.30 target is based on Stage One activity
only and an initial aim, as the longer-term at RIO involves more production and a lot more
equity value. Top Pick confirmed, our patience with this stock will now pay its dividends.
9

Stocks to Follow
Our 17 open positions saw four winners last week (CMMC.to, AR.to, MIRL.cse, MENE.v) with
one other stock remaining unchanged (AGC.v). This leaves 12 losers and that’s a lot, but the
pain wasn’t too great because most prices drifted down along with the wider sector, all on low
volumes and general investor disinterest. The biggest loser was Cartier Resources (ECR.v down
9.4%) but setting that stock aside, most others were a couple of pennies of percentage points
down. As for the winners, we had two big percentage changes registered in Minera IRL
(MIRL.cse up 26.7%) and Mene Inc (MENE.v u 18.8%), but both were strictly technical in
nature and don’t provide many clues for the week ahead.
We remain at 17 open positions on our Stocks to Follow list, two over our self-imposed limit and
uncomfortable about the idea. Note that just five of our stocks are now in the green, the other
12 red. Judging this publication on my preferred “buy low sell high” criteria, perhaps its time to
unsubscribe.
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$0.60 185.7% $1.14 tgt Aug'20, #1 idea
Rio2 Ltd. RIO.v STR BUY C$0.83 22-Apr-18 C$0.68 -18.1% $1.30 12m tgt jul21
Recommended stocks (In order of preference)
Copper Mountain CMMC.to STR BUY C$3.51 18-Jun-21 C$3.50 -0.2% re-buy, Q2 earnings catalyst
Argonaut Gold AR.to ADDING C$2.92 25-Jun-21 C$3.21 9.9% All right signs, avging up
Trilogy Metals TMQ BUY U$1.84 15-Sep-19 U$2.12 15.2% Cu for 2021, going well
Amarillo Gold AGC.v BUY C$0.31 30-May-21 C$0.29 -6.5% add at 30c/32c, capex NR soon
Strategic Metals SMD.v hold C$0.42 31-Jan-21 C$0.305 -27.4% Canadian land bet/Value trap?
Excelsior Mining MIN.to STR BUY C$0.93 10-Mar-19 C$0.54 -41.9% Delayed, but still great value
Aldebaran Res. ALDE.v BUY C$0.68 16-May-21 C$0.65 -4.4% Bet on big copper, pol risk ok
QC Copper &Gold QCCU.v STR BUY C$0.205 25-Apr-21 C$0.17 -17.1% Cu Jr, fast-tracking resource
Royal Road Min. RYR.v BUY C$0.155 17-Mar-19 0.27 74.2% Model paying off in Nica
Wolfden Res. WLF.v spec buy C$0.30 11-Apr-21 C$0.25 -16.7% Zn trade needs to move soon
Great Bear Res GBR.v BUY C$15.83 26-Aug-20 C$13.92 -12.1% Binary M&A trade, wait for print
Cartier Resources ECR.v hold/sell? C$0.32 21-Mar-21 C$0.24 -25.0% Thinking of selling
Aurelius Min. AUL.v hold C$0.75 28-Jun-20 C$0.43 -42.7% has until its 43-101 to improve
Minera IRL MIRL.cse hold C$0.195 22-Jul-12 C$0.095 -51.3% CEO change will move stock
Long-term non-mining hold
Mene Inc. MENE.v LT Hold C$0.68 6-Dec-20 C$0.82 20.6% LT bet, added again July'21
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
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): Embarrassing moments in publishing aside, a short note to
10

back up today’s intro and remind that CMMC reports tomorrow, July 26th. The ConfCall happens
at 07:30am Pacific Time and the link to that is here (3). This desk will pay close attention to
this set of numbers, with the production and financial data to be revealed and particular
interest on the development of cost inputs. One of the reasons to buy back at this time was to
be long going into these Q2 numbers, the potential catalyst is now on deck.
Aldebaran Resources (ALDE.v): Your example of a summer trading pattern:
ALDE isn’t the most liquid of stocks at the best of times, but that also makes it a good example
of the current market torpor. It happy trades size between larger players at 70c too, the drops
to under 60c recently are only understandable as distressed sales by one or two retail holders.
Mene Inc (MENE.v): Another example of a summer trading pattern, but this one with a
happy ending:
We noted in passing the anomalous close to last week’s trading, which took until Tuesday
morning and a buyer of 150,000 shares to fix. The same things will happen to ALDE, CEM and
any other stock drifting down on no news during the summer.
Argonaut Gold (AR.to): I’m going to save time and space this weekend by using a visual to
repeat the same message about AR.to:
11

The relative strength on display is impressive and the difference shows on negative days, sellers
into the bid are uncommon, the market is accumulating AR shares and the contrast to the way
McEwn Mining (MUX) is trading at the moment is stark. This is the type pattern that makes
people rich in the Canadian mining sector and by which, I specifically mean traders and
investors in mining stocks rather than founders, employees or other stakeholders. It’s not easy
to find a market voice or commentator talking about AR, but that’s not surprising either and
happens when the people accumulating have bought all they want.
Amarillo Gold (AGC.v): News and price action from AGC last week, with the company on
Monday announcing (4) the transition of its country
manager, bringing in highly experience mine
engineer Paulo Serpa for the build phase of Mara
Rosa /Posse, its new country manager in Brazil, as
current employee Arão Portugal retires (a good time
to step aside if you’re not willing to put in the next
three years as the mine is built). The CEO comment
on the change went like this…
“We expect this to be a smooth transition,”
Mutchler said in a statement. “Paulo will build on
the strong foundation set by Arão and lead the
construction phase of our flagship Posse Gold
Project at Mara Rosa. In addition to Paulo, we’ve
made several other key hires in Brazil, where we are building a strong operating team
in anticipation of making a construction decision.”
…and once again, the company cannot be accused of hiding true intentions. We are expecting
the financing deal package this quarter, with closure by the end of the year and construction to
start in 1q22, that timeline remains in place.
In trading news, all was quiet pricewise and the stock traded at 29c and 30c all week, the only
activity of note coming Friday with early morning volume and then 5m share cross at 30c, done
by Research Capital. As they are the holders of the shares and warrants recently made whole,
the likelihood is for some internal re-positioning of the holding inside (ex)Mackie, rather than
shares about to be distributed on the open market.
Royal Road (RYR.v): We’ve seen some selling recently, the worsening political situation in
Nicaragua likely off-putting to some people. However, this is mining and our sector tends to
remain apolitical (ignorant?) of local affairs. The upcoming election and the way in which Daniel
Noriega is cracking down on any type of opposition to his government long before the process
begins is all about avoid the scenes we saw during the last cycle, with protests, street violence
and brutal policing measures. Headlines are currently ugly, but political issues will only affect a
company like RYR so much, its shareholder roster not one for touchy-feely millennial types.
Strategic Metals (SMD.v): This stock has a bad dose of the Summertime Blues, particularly
painful for me to watch because I’m not committing any further cash here for the time being.
SMD in July is the Canadian market sentiment writ large, the negativity may also include the
image created by this year’s problematic wildfires.
This stock more than any other holding was the prompt the Braveheart ‘HOLD’ meme, above.
Down because its other holdings are down, one medium-sized seller into a non-existent bids
was enough to do the damage on Monday. SMD remained oversold and out of fashion all week
on no company news, we’re at the point where SMD becomes a bellwether. No other stock is as
dependent on the phrase “Canadian Land Asset” for its market cap and the company runs itself
on a shoestring to keep its leverage as intact as possible. Today utterly out of favour, I’ve
added “Value Trap?” to the column notes above because unless market appetite for early stage
assets improves in Q3 I’m going to have to take a loss at some point. As with several other
stocks, it has until Labor Day.
12

Minera IRL (MIRL.cse): The most telling data regarding Minera IRL (MIRL.cse) last weej
didn’t come from the announcement of the completion of the PEA for Ollachea on Monday (5).
Instead, this was not the PEA on Monday and the subsequent price pop on volume. Instead this
shows the reality:
Despite that flurry of trading on Monday and the early buyer determined to pay 10c, the last
trade registered in MIRL came on Wednesday 21st. Indeed, two days’ worth of markets came
and went without bid being able to reach ask and the reason is that the PEA doesn’t break the
obvious bottleneck at this company. An opposite to that of Rio2 Ltd (RIO.v) this weekend, it’s
not that the project economics and assumptions used in the PEA are sub-standard or overly
optimistic, either. Compilers Mining Plus have been working on Ollachea on-and-off since the
time of CCC and the local boss is as straight as a die. This isn’t an “optimized PEA”, rather a
realistic reflection of the project as stands:
The PEA is realistically priced, too: Previous guidance from CEO Benavides to as low as U$70m
for the re-worked capex plan was either too sharp or out-of-date post-Covid-19, therefore with
U$70m to pay Cofide and U$89m to build its mine MIRL has a lot of upfront capital to find. To
cut to the chase, there is no reason why any third party or parties should lend U$160m to a
company with a U$20m market cap. There’s even less reason why the smaller company should
expect to retain control of the asset.
13

Which brings us to the true reason MIRL didn’t rally any further last week and why it’s
condemned to drop back, now the buyers have done. The problem isn’t Ollachea or Corihuarmi,
it’s not the rest of the staff at MIRL, either. The CEO
is the bottleneck, nobody is going to lend money to a
company run by Diego Benavides, not after the mess
he has made of bringing MIRL to this point, with a
project PEA required last year during the negotiations
with Cofide. The CEO quote from last week’s NR
included this, “We look forward to building an
exciting future for Ollachea, supported by a robust
base case developed by a remarkable team of consultants…”, which is also a quiet reminder
that there is no COO at Minera IRL and no VP Exploration either. Presumably, the CSR
department is still there…
With this PEA, Minera IRL now has an asset worth developing into a mine but only if it manages
to raise and pay off U$70m to the government of Peru, first. That’s on a two year time limit
now, the clock is ticking and any prospective buyer must be weighing up the option of waiting a
while and getting a better price from the executors of a company in Chapter11. So in effect, the
only option CEO Benavides has at his disposal now is a sale of Ollachea and as quickly as
possible, in order to capture at least some equity value. It would be nice to think he could
attract a deal this year, sell Ollachea and be gone himself before December, it would save us
the bother of voting him out.
The Copper Basket
After twenty-nine weeks of 2021, The Copper Basket shows a gain of 30.23% to level stakes.
company ticker price 1/1/21 Shares out Market Cap current pps gain/loss%
1 Solaris Res SLS.to 6.08 107.53 1429.07 13.29 118.6%
2 Copper Mtn CMMC.to 1.81 207.5 726.25 3.50 93.4%
3 Oroco Res OCO.v 1.85 186.96 564.62 3.02 63.2%
4 Marimaca Cop MARI.to 3.25 87.737 363.23 4.14 27.4%
5 Western Copper WRN.to 1.57 135.798 297.40 2.19 39.5%
6 Amerigo Res ARG.to 0.80 181.79 223.60 1.23 53.8%
7 Excelsior Min. MIN.to 1.12 273.585 147.74 0.54 -51.8%
8 Aldebaran Res. ALDE.v 0.455 125.24 81.41 0.65 42.9%
9 Regulus Res. REG.v 1.07 101.85 77.41 0.76 -29.0%
10 C3 Metals CCCM.v 0.115 438.56 70.17 0.16 39.1%
11 Doré Copper DCMC.v 1.00 53.304 44.78 0.84 -16.0%
12 Element 29 Res ECU.v 0.45 68.281 34.14 0.50 11.1%
13 Chakana Cop PERU.v 0.60 111.41 32.31 0.29 -51.7%
14 Chibougamau CBG.v 0.165 53.077 14.07 0.265 60.6%
15 US Copper USCU.v 0.105 87.53 14.00 0.16 52.4%
NB: All stocks in CAD$ Portfolio avg 30.23%
The basket average dropped just two one hundredths on the week, to close at 30.23%, a losing
week for The Copper Basket only in name.
Seven stocks made gains on the week The Copper Basket 2021, weekly evolution
70%
(SLS.to, CMMC.to, WRN.to, MARI.to, ARG.to,
60%
REG.v, CBG.v), seven were losers (OCO.v,
MIN.to, PERU.v, CCCM.v, ALDE.v, DCMC.v, 50%
USCU.v) and one was unchanged (ECU.v) so 40%
the headcount was split down the middle as 30%
well. To add to a week of balance just one 20%
14 10%
0%
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 ht4luj ht11 ht81 ht52
source: IKN calcs

stock of the 15 moved more than 10% in either direction, namely Chakana Copper (PERU.v
down 11.1%). The apparent neutrality of copper stocks is not reflected in copper the metal,
which had a good week:
It’s a fool’s errand to base too much forecasting on too little evidence, here we have what may
be the indications of a breakout but that’s all, a week of indications and a Friday that saw
trading run higher to lower. Perhaps flimsy, but this time chances are on the side of the bulls
and I’ll risk an early call: Last week’s near-breakout in the price of copper was right time, right
place and for the right reasons. It would take just one week of confirmation, the week ahead,
for theory to become reality and for copper to start moving back up, all to China’s displeasure.
For more evidence, we look to the futures market and the way in which copper is back in
backwardation this weekend. We reported on the sharp backwardation in April and May, that
was one of the stimuli to send the metal off from the U$4.00/lb floor level at the time. This
weekend the backwardation isn’t quite as sharp, but a look at the closes of the contracts with
reasonable open interest shows the pattern easily enough:
 Sep 2021 contract close: U$4.4000/lb
 Oct 2021 contract close: U$4.3950/lb
 Nov 2021 contract close: U$4.3940/lb
 Dec 2021 contract close: U$4.3890/lb
 Mar 2022 contract close: U$4.3800/lb
 May 2022 contract close: U$4.3720/lb
The curve isn’t as sharp as it was in April and May, when for a time we saw +7%
backwardation in the near-dated futures contract, but people are starting to pay up in order to
own copper earlier, rather than later, again.
Your curated copper comments come from no less a figure as Richard Adkerson, top dog at
Freeport McMoran (FCX), whose comments during the FCX conference call last week echoed
those of Mark Cutifani of Anglo American to Chile congressional committee (see below). When
asked about South American politics in general and the situations in Chile (royalty tax debate)
and Peru (entry of Socialist government), Adkerson used his normal disarming tone (6):
“We really don’t know what the outcome is, bottom line. “
“This is going to be supportive of future copper prices.”
“Today, the world consumes 30 million tons of copper per year and by the year 2050,
following this trajectory, we’ve got to produce 60 million tons of copper per year. If you
look at the historical past 10 years, we’ve only added 500,000 tons per year … Do we
have the projects? I don’t think so. I think it will be extremely difficult.”
Once again, a mining CEO flagging the power of demand in the pipeline, comparing it to near-
15

term supply and telling you it’s very bullish. Please, get the message too. Last week, IKN634
included the pep talk on copper and opined that the weeks of soft prices and negative
sentiment are “…not when you sell copper stocks. Last week is when you buy copper stocks.”
You have a second chance to buy this week. We move to our inventory data section and it’s as
bullish as can be:
 Copper stocks took another leg down last week, losing 17,339mt to close at 361,674mt
and the action is all SHFE.
 To begin, my data on SHFE was wrong last week, the normally reliable Cochilco and my
laziness combining to state last weekend that SHFE was closed on break. In fct no, last
week it saw stocks move out and the same thing happened this weekend, with another
17,506mt gone and a total of just 96,087mt in stock. Se below for more.
 At the LME a small 575mt add to copper stocks bring the total this weekend to
224,750mt. However, less than 19,000mt is set to be shipped out on cancelled
warrants this weekend, suggesting inventories won’t drop further.
 At the largely North American influenced Comex, stocks dropped by a small 408mt to
sit this weekend at 40,737mt.
Here’s the Shanghai-only inventories chart, which I did in a slightly larger and more refined
style for a blog post last Friday (7)
Shanghai Futures Exchange Warehouse Stocks, 2018 to date
400000
350000
300000
250000
200000
150000
100000
50000
0
16
8102
ht7naj
ht81 8102
ts1rpa
ht02 8102
ts1yluj
ht21 dr32 8102
ht4von
ht61 ht72 ht01 ts12 9102
dn2nuj
ht41 9102ht52pes 91'ht6tco 9102ht71von ht92 ht9 dn22 0202dr3yam ht41 0202ht62luj ht6pes ht81 ht92 1202
ht01naj
ts12 1202ht4rpa ht61 1202ht72nuj
Mt Cu
|
source: Cochilco
SHFE copper inventory levels, 2017 to 2021 Jan to July
MT Cu
400000 2021
2020
350000
2019
300000 2018
250000
200000
150000
100000
50000
0
1 2 3 4 5 6 7 8 9 101112131415161718192021222324252627282930
source: Cochilco data
We ran the above chart two weekends ago in IKN633, as part of the bullish argument that
SHFE inventories is beginning to reveal. If you weren’t convinced then, maybe the new visual
will help, as in previous July months you either had plenty more copper in stock from which to

draw down (2018), or levels that were already starting to rebound (2019, 2020). The shortfall
to normality looks around 50,000 tonnes and that’s a big number, particularly as the trend
seems to be set fair.
The tedious summer market has taken the fun out of these stocks, notes on basket components
return next weekend.
The Producer Basket
After twenty-nine weeks of 2021, the Producer Basket shows a loss of 13.36% to level stakes.
company ticker price 1/1/20 Shares out Mkt Cap (U$Bn) current pps gain/loss%
1 Newmont NEM 59.89 805 48.39 60.11 0.4%
2 Barrick GOLD 22.78 1778.04 36.68 20.63 -9.4%
3 Agnico Eagle AEM 70.51 244.187 14.64 59.95 -15.0%
4 Kirkland Lake KL 41.27 267.056 10.65 39.88 -3.4%
5 Kinross Gold KGC 7.34 1261.07 7.72 6.12 -16.6%
6 Endeavour Min EDV.to 29.62 252.568 5.96 28.30 -4.5%
7 Pan American PAAS 34.71 210.262 5.65 26.85 -22.6%
8 B2Gold BTG 5.60 1051.697 4.14 3.94 -29.6%
9 Alamos Gold AGI 8.75 392.739 3.06 7.79 -11.0%
10 Pretium Res PVG 11.48 187.833 1.68 8.97 -21.9%
Prices in U$ except EDV.to (share price in CAD$ and mkt cap in approx USD) Port. avg -13.36%
Another dismal week for PM producers, with gold dropping, GDX down 2.3% and GDXJ down
2.8%. Our list followed suit with ten out of ten stocks losing ground last week, but the small
and tight range of percentage losses tells a larger story. Ten large precious metals producer
stocks dropped over a period of five days, but the worst of the drops was just 2.7%. A sector
largely ignored by a market more interested in tech stocks and summer vacations. Our basket
did slightly less worse than the GDX benchmark, we’re still a long way behind though.
The 2021 Producer Basket: Weekly performance and
20%
comparative to GDX control
15%
10%
5%
0%
-5%
-10%
-15%
-20%
Newmont (NEM): The first major to report its 2q21, NEM filed Wednesday evening (9) and
gave its Conference Call Thursday. The market reaction in two words and one image:
17
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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
source: Google, IKN Calcs 0.0%
ts1
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source: IKN calcs, NYSE/Nasdaq/TSX data

In line. There was a slight murmur going into and out of the numbers, but by Friday NEM was
back as sector Top Dog. NEM reported production inside guidance and an 83c EPS, a slight beat
on bottom line but operating revenues were as expected. The most interesting comments were
on forward costs, so here is the prepared comment of CEO Tom Palmer from the ConfCall (8):
“The impacts of the pandemic are also driving cost inflation around the globe. We are
now expecting cost escalation of around 3% to 5% for materials, energy, and labor.
And we expect these pressures to continue through until at least at the end of next
year. We are currently working on our 2022 business plan. I'm sure that the higher
cost through inflation and the application of our wide-ranging controls and safety
protocols built into our assumptions going forward.”
Then later, when responding in the Q&A, he added, “We are seeing both in Canada and
Australia quite hot labour markets for mining” and noted that steel price and fuel oil prices are
jumping hard. He expects an approximate 5% influence on the 2022 company budget. And
finally, when asked about the U$2Bn capex ticket Yanacocha Sulfides expansion project in Peru,
he followed party line and said the company would decide in December. That makes for
another influence over the Castillo government later this year (10).
The next big tell on global precious metals costs comes August 6th, when Barrick (GOLD)
reports its quarter.
The Tiny Dogs
After twenty-nine weeks of 2021, the Tiny Dogs show a loss of 8.63% to level stakes.
company ticker price 1/1/21 Shares out Mkt Cap current pps gain/loss%
Antler Gold ANTL.v 0.205 61.348 6.13 0.10 -51.2%
Aston Bay BAY.v 0.045 163.975 8.20 0.05 11.1%
Constantine Met CEM.v 0.17 45.4 14.07 0.31 82.4%
Contact Gold C.v 0.115 240.757 19.26 0.08 -30.4%
Golden Pursuit GDP.v 0.22 40 6.00 0.15 -31.8%
Manitou Gold MTU.v 0.045 230.79 16.16 0.07 55.6%
Precipitate Gold PRG.v 0.240 106.241 8.50 0.08 -66.7%
QC Copper QCCU.v 0.315 105 17.85 0.17 -46.0%
Red Pine Expl RPX.v 0.400 95.806 41.20 0.43 7.5%
Warrior Gold WAR.v 0.090 91.818 6.89 0.075 -16.7%
Prices in CAD$, data from TSXV basket avg -8.63%
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.
The Tiny Dogs basket average recovered a couple of points last week, despite six of the ten
names losing ground (ANTL.v, C.v, GDP.v, PRG.v, QCCU.v, RPX.v) and two others staying
unchanged (MTU.v, WAR.v). That’s because the two winners made big moves, with the 11.1%
of Aston Bay (BAY.v) complementing the 37.8% rebound in Constantine (CEM.v). To the
18

downside, the biggest loser was Antler Gold (ANTL.v), down 20.0% on no news.
20% Tiny Dogs, 2021 weekly tracker
16%
12%
8%
4%
0%
-4%
-8%
-12%
19
ts1
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source: IKN calcs, TSX data
Red Pine Exploration (RPX.v): The way in which its early gains have been all-but wiped out
is a sobering reminder, round-trip trades are all-to
common. This is also a personal missed bullet.
Tinycap RPX has had my eye since visiting the Wawa
project back in 2018. The rocks look prospective and
the place to look for a new mine is in head-frame
shadows, what it always needed was ownership
consolidation and funding. After years of
machinations, RPX finally got that early this year, we
saw the corporate shifts to bring 100% control of
Wawa, even a share rollback. The combo was exactly
what the doctor ordered and market reaction from
March until June was good. However, the recent
selling is clearly coming from stock that agreed to
the re-working and is now bailing and, we’re back to
square one on price. This may now represent a value entry point, but RPX needs to deliver on
exploration drilling first. The new low price allows us the luxury of being able to consider results
before buying.
Constantine Metals (CEM.v): Aside from its project development at Palmer and other places,
this company also provides an object lesson in an aspect of Value Traps (and how to avoid ‘em)
A mistake learned the hard way. On paper, the in-situ valuation of the metals at Palmer (Zinc
and then all others) makes the company market cap look very cheap. However, its policy and
actions are also largely controlled by its JV partnership and until that moves to a new phase of
development at Palmer (instead of straight exploration), any speculation in the stock will be
met by sellers happy to harvest a few percentage points from the Standard Deviation. As a
result, the 37.8% upmove in CEM last week may look spectacular, but it was only a price

kicking back from being sold down by a couple of retail positions. Equally, buying will stop dead
at 30c and above as anyone in it for the long term will have the patience to add at 25c.
To juxtapose, consider our new and current trade in Amarillo Gold (AGC.v). I got caught in its
Value Trap years ago and eventually left with a loss, but its new circumstances provide the
required catalyst. The difference in today’s open trade is that AGC is no longer on some
indefinite wait for a permit or agreement, instead we are now in 3q21 and the financing
package to build at Posse is supposedly to be ready to go by Q4, with October pencilled in by
all and sundry and reasonable allowances that can be made for year end. Value Traps
disappear when clocks start ticking, and those in with equity include two major positions,
namely investment holding company Baccarat and likely eventual (quasi) owner, Eric Sprott.
With no position above 19.9% and instos holding significant chunks any deal will revolve
around Eric Sprott, but will also have to be friendly between all equity parties and that’s good
news for us, aligned with the major money. AGC has been a chronic value trap, but also
demonstrates that there is light at the end of the tunnel for the CEM’s of this world, too.
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
Peru this week
It’s gone as expected so far. Aside from the detail that Pedro Castillo’s victory was confirmed on
Monday evening rather than Tuesday morning, our forecasts last week have hit the mark and
now we have the main event on July 28th as President-Elect Castillo becomes President Castillo,
a remarkable achievement for a schoolteacher from a small provincial town no national political
experience and a background in union syndicates and locally organized peacekeeping forces
(Ronderos) to call upon. We expected the official declaration to change the atmosphere and it
was indeed the case, with international congratulations always a big showpiece moment for a
winning candidate in South America. Also, King Felipe V of Spain announced he would attend
the handover of power and that tends to be a thing in South America as well, one of the official
protocol marks of distinction. As well as Felipe, the Presidents of Bolivia, Argentina and Ecuador
have confirmed attendance and Peru will get the usual contingent of diplomacy from other
countries, such as Brazil that sends its Veep, Hamilton Mourao.
So on Wednesday we have the inauguration but once that is ove, President Castillo will be
faced with governability. Politically speaking, President-Elect Castillo’s problem is the one
alluded to a couple of editions ago, the magic number 66 required for simply majority in Peru’s
Congress. A headcount of Congress members who are in his party or sympathetic to his cause
gets us to 56, most of the other votes will either be opposition or hard opposition and the only
real road he has to reach consensus is the 10 vote block of the centre-right AP party. This has
made powerful a group of centre and centre-right politicians, today this “the voice of reason”
group provides an entry point for the “government of consensus” Castillo. The question
currently manifests itself in a literal race against time to put together a working government,
with less than a week to pick minister and allow them to start filling their ministries. It has
made for rarefied atmosphere in Lima circles of power that’s difficult to contextualize, but
seeing the way the same old political figures have suddenly found media limelight makes the
idea of a Communist revolution laughable.
We are currently waiting for the names of President-Elect Castillo’s proposed cabinet of
ministers, which will be another key moment. With the nominations, we’ll know how far Castillo
has moved in order to make a workable government and what we on the outside want to see is
as little influence of the Castillo’s Perú Libre party as possible. Aside from the main job of Prime
Minister, the big debate is over who gets the job at Economy and this weekend most
commentators still expect Pedro Francke to get the job, but the name of Alonso Segura is still
being whispered, particularly by those who want the Castillo cabinet to be “technical” and not
20

“political”. As we revealed last weekend, Castillo wants Julio Velarde to stay as head of the
Central Bank and Velarde’s price is the nomination of Segura as FinMin. We shall see how this
piece of the puzzle fits in the days ahead, but if Segura gets the nod expect Peru’s sovereign
bonds and currency to rally. If a market expecting Commies in Power suddenly sees an
orthodox FinMin brought in, then a highly regarded Central Bank chief say he’s staying on, and
perceptions will change rapidly.
Moving to Peru and mining, one Oscar Frias Martinelli was chosen last week to head the
transfer committee at Peru’s Ministry of Energy and Mining (MINEM). Oscar Frias is a veteran
mining engineer from the same La Libertad/Cajamarca uplands mining region as the President-
Elect and is a well known figure in the regional mining scene. He has worked in several of the
major local mines, but is also known for his connections with the local Sanchez-Paredes family,
owners of the san Simon gold mine and investigated for decades, due to alleged cocaine
running activities as a family. At least Frias understands mining, but it would be bad news to
see either him or somebody of his type promoted to the official job next week. The good news
is that the steering committee for MINEM also includes Susana Vilca, the ex-Minister and
seasoned centrist politician. With the others on the committee largely technical, Vilca is the only
“famous politician” on the mining committee and should be able to bring a little sanity.
One notable point is how the mining industry in Peru has moved its goalposts, now adopt a
more conciliatory position toward Castillo and his push for fiscal burdens on mining companies.
Instead of cries of penury, companies have shifted to a policy where they could support a
higher taxes and are willing to talk. This sounds good, but it also opens the door for long and
fruitless talks because when it comes to WFT’s the devil is always in the details.
Example: With Peru’s annual production of copper estimated at 2.5m tonnes for this year, the
normally long-winded conversion from metric tonnes to Imperial Pounds provides insight into
the levels required, at 5.52Bn Lbs. We then choose a baseline at U$4.00/lb (U$4.08/lb is a
round U$9,000/mt), as that price is both current and one at which (we all know) any copper
miner worth its salt will already be making excessively good profits.
It then becomes a question of how much of the windfall or “excess” profits (or however they
will frame them) on copper are captured by Peru’s incoming government. At this point, the
world of large percentage numbers enters and they can look scary as anyone who remembers
how a decade ago, Ecuador under Rafael Correa tried to impose a 70% WFT on gold. However,
the devil is always in the mathematic detail and here are a couple of examples:
 Peru moves to pass a law imposing a 50% WFT on copper prices over U$4.00/lb. The
price then moves and stays at U$5.00/lb for the period of one year, the country takes
50% of the difference between U$4.00 and U$5.00 and at 5.52Bn lbs produced, that is
U$2.76Bn for the country treasury.
 Peru moves to pass a law imposing a 30% WFT on copper prices over U$4.00/lb. The
price then moves and stays at U$4.50/lb for the period of one year, the country takes
30% of the difference between U$4.00 and U$4.50 and at 5.52Bn lbs produced, that is
U$8.28m for the country treasury.
Already we see how price and imposition will affect the calculation wildly, but alongside pure
theory is the practical point that many of the major mines in Peru have signed tax stability
agreements and will not have to pay any new tax imposed by the country, including the major
copper mines Toromocho, Las Bambas, Constancia etc. Even is a WFT were imposed, its
immediate effect wouldn’t be felt by all companies. Therefore, it’s far to say that the headlines
coming out of Peru next week will scare the casual observer, but until we know the scale of the
proposed tax reforms it will be difficult to make a quantifiable call on Peru’s operating mining
companies.
Peru is also a country that needs every dollar it can get its hands on. This is a letter on mining
21

and I rarely go into macroeconomics on the open blog these days, but in a nutshell Peru and its
U$230Bn GDP economy normally has annual GDP in government spending around 13%. But
2020 and Covid-19 was NOT normal, Peru went Full Keynesian under Martín Vizcarra and
government spending as a percentage of GDP hit 16%. The government raised debt via dollar
bonds and debt/GDP rose sharply de to the double whammy of higher obligations and the sharp
recession. Things have recovered quickly and the estimated 11% GDP drop of 2020 is now
getting an estimated +7.5% recovery this year, but the balance of payments is still negative
and with left wing economic politics now in charge, the market expected loose monetary policy
and inflation. Not only that, but with metals providing 60% of exports and the main point of
ingress for US Dollars into the economy, anything that stops the sector from operating will have
serious repercussions on the wider economy.
All that’s for a more distant future. Today we will limit to wishing President Castillo luck, he’s
going to need it.
Chile: The Royalty debate and Mark Cutifani of Anglo American
The law project on whether to impose an extra royalty on mining continues in Chile’s Senate
committee, with the type of royalty (likely 3%) and whether it is applied to mine gate produce
or sales now central to the debate. The committee is taking witnesses and last week, no lesser
figure than Cutifani of Anglo American sat before them to give his opinions (11).
"The mining industry is one that pays its taxes on the profits it makes. Regarding Chile, and
given the consensus that exists for the demand for copper, the quantity of taxes that we pay
today will rise in the future." He went on to say that Chile needs to meet the needs of its
society "…without sacrificing competitivity and long-term growth opportunities for the industry”,
and to underscore his opposition to any new levy on metals in thje country, "There are negative
consequences when, for example, the debate today on a royalty that puts the accelerated
growth of Green Mining in Chile at risk." And then spent time on two related subjects, namely
the need for copper in the new world green economy and the way in which Anglo in Chile is
transitioning to environmentally friendly work practices (e.g. the phasing out of all diesel power
by 2030). By all accounts it was a strong performance and a better defence of mining than
anything managed by the Piñera government to date.
Ecuador begins process on its new mining law
It’s not all Chile and Peru, news regarding mining in other LatAm jurisdictions is starting to
show again in Ecuador as its new Congress and legislature gets into gear.
There were two sets of law projects with the potential to affect directly the industry, these have
been turned into one and the project is back in committee for further local and regional
consultations, a process that lasts three months (12). The contents of the law project as stands
are not to the liking of the mining industry in Ecuador, the country’s Chamber of Mining in a
communiqué this week (13) spoke of the confusion caused by the wording of the law that uses
the word “damage” instead of “impact” when speaking of mining and the environment. They
warn the law as stands would contravene the constitution and sow confusion, here’s an
extended quote (translated):
“Responsible mining uses modern environmental standards that prioritize social and
economic development and protection of the environment. If the reforms were
approved, it would cause a chilling effect on mining in Ecuador, generating a serious
and irreversible effect on the productive sector. In 2020, Ecuador exported more than
U$1Bn in metals product, an important contribution to the national economy.”
The law project will take most of 2021 to get out of Committee, but when it does expect it to
garner plenty of attention. However, one thing you don’t have to worry about (yet) is the
project becoming active law, as President Lasso has made it clear he will use his power of veto
to stop, block and delay any law changes which negatively affect economic activity. This is a
slam dunk case.
22

Colombia: Anglogold Ashanti doubles down
Anglogold Ashanti has been the major influence in Colombian mining over the last 15 years, a
stint that began with its decision to buy up nearly all the concession space available. Those
heavy-handed policies are now a thing of the past and the appointment of relative mining
outsider Alberto Calderon to Anglo CEO of was a surprise to many, this desk included. However,
one of the factors in play was surely the late stage projects held by Anglo in Colombia, home
country to its new CEO. Anglo also has the massive and ill-fated La Colosa, but its main thrusts
are with the copper/gold Quebradona and the Gramalote JV with B2Gold and in Calderon, they
may have hit on the key to unlock their trappy permitting processes. Australian analysis firm
Noah Capital made the right observation when stating (14) that a Quebradona which goes to
plan “… will represent a massive 32% in value of AngloGold” and said the decision to being in a
Colombian national as CEO for a project which “… could constitute a third of the value of the
whole company is therefore considered astute in our opinion.”
Argentina: San Juan becoming investment grade for mining
Without making big headlines, Argentina is slowly becoming a better and more attractive
jurisdiction for mining investment under this current Alberto Fernandez administration. Faced
with the uphill task of maintaining national pro-mining an pro-development policies while
opposed by the same left wing environmental activists who helped to vote him into power,
Fernandez has pleasantly surprised this desk by being practical and, in real terms, delegating
decisions on mining Argentina to his Mining Secretary Alberto Hensel, who ostensibly reports to
“Superminister” Matias Kulfas, but the three are equals on any policy decision for the sector.
Hensel has made all the difference: Previously the minister of mining for the pro-mining, pro
mine investment province of San Juan, his move to national Mining Secretary (i.e. minister)
coincides with momentum for mining activity. As well as plenty of headlines for lithium these
days, with and Argentina in the headlines as China snaps up Li juniors on its patch, the main
thrust has been on copper and the desire to build large scale mines in miner-friendly zones. The
former is good politics, because the ticket price of a single project can move national GDP and
its environmental impact better determined. However it’s the latter which has seen momentum
grow, Hensel’s major insight was to recognize his home province San Juan had developed a
different and better regional mining identity, a brand if you like, that now takes precedence in
the minds of potential investors. Anyone who has had the “Yes I know it’s in Argentina, but it’s
in San Juan” conversation knows what that means, not least because I am a proponent and
have published as much.
As the case of Chubut shows, the real executive power on whether mining goes ahead in
Argentina is at regional, rather than national level. Chubut and its constitution do not like
mining, so from that point it’s all a very tough sell. Therefore, it makes perfect sense not to
continue banging one’s head against a brick wall to pursue an all-encompassing National mining
policy and identity, when the regional identities are just as established and in some cases, more
welcoming.
We saw another step toward this “Province First” approach this week, with the National Mining
Secretary (15) meeting with representatives of 15 provinces, including all regions connected to
mining activity. The agenda was to provide (translated, breathe in) “…a national reference point
for decisions and definition of sector policies oriented toward the integral protection of a
person’s rights, the prevention and mitigation of risks and social impacts and the maximization
of opportunities and benefits that mining may bring to the development of their territories”
(breathe out) and the proposals from the National to the regional governments centred around
aspects of risk management, environmental education and legal requirements a province needs
in order to develop its mining sector. The precise details of the meeting are less important,
more on-point is to witness one in a series of National-Provincial level meetings on mining in
which the Nation, under Alberto Hensel, offers guidelines and policy standards to the provinces
without trying to impose anything on them. At the same time San Juan is promoted as a
leadership models in mining, with Hensel telling one and al, “Here’s your example, here’s how
to do it, we will help you”, but leaving the ball firmly in the court of the province, once done.
23

The other clear pro-mining provinces such as Santa Cruz, Salta and Jujuy are on board readily
and between them, they’re now providing an example for any province that wants to move
forward with mining (e.g. we are seeing Rio Negro start to award concessions).
And this is the momentum building, thanks to a national government that has decided to let the
provinces decide but, once they do, they will promote and market the regions as safe places to
make large scale investments. The policy makes Veladero a San Juan success story, and the
exploration success seen recently by Filo Mining (FIL.v) as good news for the Province, rather
than the country. Rather than trying to get all provinces in the same boat and rowing together,
the new strategy is to let leaders lead, then allow any province that wishes to copy the mining
successes of San Juan, Santa Cruz etc the opportunities to do so. For us the investor, it makes
life easier because we can now invest in the best jurisdictions, knowing they aren’t about to be
dragged down by the anti-mining provinces.
These days, being pro-San Juan and anti-Argentina is a valid market position.
Market Watching
Buenaventura (BVN) news supports the bullish Peru case
Last week saw a significant news release from Peru precious metals miner Buenaventura (BVN),
which has seen its share price do this over the last two years, but despite that poor look,
announced on Monday (we quote), “…the successful issuance of its senior unsecured notes (the
"Notes") due 2026 in an aggregate amount of
US$550 million. The Notes mature on July 23,
2026 and a coupon rate of 5.500% per
annum.” The proceeds from the note are set
to pay off the now due tax debt with the State
of Peru and to fund the Capex for the
company’s San Gabriel project in the South of
the country, which had an estimated ticket of
between U$370m and U$430m at the
beginning of this year.
A clearer statement of confidence in the Peru
mining sector and market isn’t easy to
imagine, what’s more we also get the dynamic
of the North American markets sitting and
watching from the sidelines as Asia money makes further entry into the South American mining
sector. BVN’s plans to fund San Gabriel have taken around a quarter longer than expected,
that’s impressive considering the political turmoil going on around this company and an
indication that China is less concerned about social protests than other FDI countries.
Southern Copper (SCCO) technical analysis supports the bullish Peru case
A long title for a note added in this Sunday, which brings another angle to last week’s “Buy
Peru” call. Subscriber M was kind enough to mail in with (in his words) “…a freebie (no
copyright violations involved) of a technical service with some thoughts that seem to mirror
yours on SCCO, albeit for slightly different reasons”. His service happens to be Schaeffer’s
Investment Research out of Cincinnati, Ohio, a generalist TA house so well-known even I’ve
heard of it before. With reader M’s comment of no copyright infringement confirmed, I’m happy
to share the body of this link (16) here:
In terms of analyst attention, there looks to be ample room for bull notes moving
forward on Southern Copper stock. This is per the five of six covering brokerage firms
that sport a "hold" or "strong sell" rating on the security.
Meanwhile, in the options pits, bears have been circling SCCO, leaving plenty of room
for bulls to enter the ring. Specifically, Southern Copper stock sports a 10-day put/call
volume ratio of 2.03 at the ISE/CBOE/PHLX SONO, which stands in the lofty 96th
24

annual percentile. Echoing this put-skewed trading is SCCO’s front-month gamma-
weighted Schaeffer's put/call open interest ratio (SOIR), which sits at a top-heavy 2.59.
This means that near-the-money puts outweigh calls among options expiring in the
standard August series. What’s more, spikes in the front-month gamma-weighted
SOIR have typically pre-dated pops in the price, which could dislodge Southern
Copper stock out of its current downtrend.
Short interest on SCCO looks to have rolled over after a climb of 44% between May
and June. In fact, Southern Copper's short interest dropped 13.5% during the past two
reporting periods and still accounts for 6.4% of the equity’s float. At Southern Copper
stock’s average pace of daily trading, it would take shorts nearly four days to buy back
their bearish bets.
Lastly, SCCO's Schaeffer's Volatility Scorecard (SVS) rating currently sits at 70 out of
100. This suggests the stock has exceeded these volatility expectations during the past
year -- a boon for premium buyers.
Plenty of TA-speak of the type seldom seen on these pages, but correct interpretation of the
squiggly line is as important as its rules and the people at Schaeffer’s have picked up the
current contrarian nature of Peru as a long idea. On that subject…
Tracking the ‘Buy Peru’ call
I plan to be quantitative about last week’s call to return to Peru, keeping active watch in order
to judge its success (or failure. The way forward will be these two charts, which should pop up
on an occasion here in the ‘Market Watching’ section, with the next couple of weeks surely
covered as Peru changes administration. To cover the markets, we’ll use the year-to-date
comparative chart of the Peru stock market proxy ETF (EPU, along with the S&P500 and the
equivalent Chile ETF as a fair benchmark:
To cover macro financials we use the bluntest of all instruments, local currency versus the USD,
but in the case of the Peruvian Sol (PEN) it’s more of a real reflection and sentiment barometer
than for most other countries:
The week ahead will see the PEN react to the news of President Elect Castillo’s pick for FinMin
and if Alonso Segura gets the nod, it means Julio Velarde also stays and that currency is a buy.
After that, we get the Inauguration on Wednesday and the new President’s inaugural speech,
after which Peru will go quiet for a week or two as the country take sits traditional winter break
25

holiday in the week following Independence Day. By the time the country is back at work, the
new cabinet of minister should be ratified and then the fun begins.
A Side Bet purchase planned for Harte Gold (HRT.to)
Our soft coverage of Harte Gold (HRT.to) began two weeks ago, in the main Fundies note
“Don’t Fear The Receiver”, in which we laid out the speculative buy case for this stock now that
it has been beaten down to distressed level. We continued last weekend with a brief update
which called the 7.5c price of seven days ago “…a nice entry point”. And then this happens:
It would seem like a bad call, however we also went with “…block out the noise” last week
which fits closely this weekend, because now there’s an active trade win in the offing. The set-
up is simple too, sum it up as “shadow Appian” because either it’s suddenly outright war
between the main players around HRT (its management, NGD, Appian) or the reason the three
Appian nominated directors resigned last week was to clear a voting logjam, rather than create
one. We noted in IKN633 that three directors had seen activist opposition, so the news post
close Monday (17) of the resignation of those three directors nominated by Appian puts things
in a new light. Though there was activist pressure, those directors were voted up and could
only leave voluntarily, so what we witnessed was Appian looking after Appian. Whether through
cooperation or opposition to the strategic committee, they have decided that getting out the
way and being an arms length entity is better suited to their cause. They also have several
important liens on the company, including 23.2% of shares out (242.4m), C$27.5m in
outstanding debt, plus the off-take right to 30% of gold production. That is a powerful
combination of controlling factors, and while in theory HRT could push forward without Appian’s
consent or approval on matters, in practice the eventual buyout of HRT by NGD (or other) only
happens with their consent. That means at a price which suits Appian and they will at least
want to recoup their principle, standing around C$60m.
My proposed trade opening this week (likely tomorrow) is a small side bet and a pure
speculation on corporate M&A strategy. We’re not trying to value HRT before buying the shares
and recognize its welter burden of debt should by rights crush equity to zero. The risk is Harte
that announces a corporate strategy decision that starts an internal battle for control, but that
is far outweighed by the likelihood that all parties are in general alignment already, and the
resignations we saw last week are a step toward New Gold taking over the company sooner,
rather than later. We’ve tracked the HRT stock price as it dropped over the last three weeks,
three days ago it seems to have hit its low.
I am a buyer of HRT shares next week and plan to hold into the company’s scheduled
announcement. Although the Strategic Committee is under no obligation to announce its
findings (if any), the BHP debt extension runs out at the end of this week and as that deadline
has already seen one extension, we’re likely to get some sort of resolution. Therefore and
starting from the premise that even if HRT goes bankrupt its shares won’t drop to zero (thanks
to Appian and its vote block), all the risk looks to the upside this weekend. As for the holding
period for this trade, that may turn out to be as short as a couple of weeks but it all depends
on how the corporate actors at the centre of this story play their cards. I am on the outside,
playing the percentages and ready to hold them through what may be a rough few days.
26

Conclusion
IKN635 is done, we end with bullet points:
 Pedro Castillo’s inaugural sppech on Wednesday is widely expected to announce the
start of a Constitutional Assembly, with eyes on improving the country’s constitution. It
may also contain news of new taxes for mining companies and all this may provide a
bottom for Peru stocks.
 Copper Mountain (CMMC.to) really does report tomorrow, we will cover its numbers
next weekend and I’m expecting a strong print tomorrow morning.
 When you can get WPM and BNPP to finance your mine, you’re on the right track. Out
Top Pick Rio2 Ltd (RIO.v) has been inertia-bound for too long but from here on, it has
a straightforward path to production and in Alex Black, you have a real mine builder to
do it. Go make me richer, guys.
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.rio2.com/post/rio2-arranges-project-financing-to-fully-fund-its-fenix-gold-mine-to-production
(2) https://www.rio2.com/post/rio2-prices-c-25-million-marketed-public-offering-and-us-5-million-non-brokered-private-
placement
(3) https://produceredition.webcasts.com/starthere.jsp?ei=1478739&tp_key=16f12ee090
(4) https://www.proactiveinvestors.com/companies/news/955167/amarillo-gold-welcomes-paulo-serpa-as-its-new-
country-manager-in-brazil-955167.html
(5) https://webfiles.thecse.com/MIRL-PEAforOllachea-Jul19-2021.pdf?Eam6NY7IApm10pjHSf8xEEcdioFXuYrT
(6) https://www.bloomberg.com/news/articles/2021-07-22/south-america-politics-are-bullish-for-copper-top-producer-
says?sref=0t3fTriA
(7) https://iknnews.com/copper-is-flying-off-the-shelves-in-china/
(8) https://www.fool.com/earnings/call-transcripts/2021/07/22/newmont-goldcorp-corp-nem-q2-2021-earnings-call-tr/
(9) https://www.reuters.com/business/newmont-quarterly-profit-rises-higher-gold-prices-2021-07-22/
(10) https://www.fool.com/earnings/call-transcripts/2021/07/22/newmont-goldcorp-corp-nem-q2-2021-earnings-call-tr/
(11) https://www.df.cl/noticias/empresas/mineria/ceo-de-anglo-american-y-royalty-minero-lo-que-se-discute-implica-
poner/2021-07-23/213033.html
27

(12) https://www.bnamericas.com/es/noticias/ecuador-retoma-tramite-de-reformas-minera-e-hidrica
(13) https://www.eltelegrafo.com.ec/noticias/economia/4/reformas-ley-recursos-hidricos-industria-minera
(14) https://www.miningmx.com/top-story/46895-anglogold-asanti/
(15) https://www.argentina.gob.ar/noticias/encuentro-entre-autoridades-mineras-provinciales-y-de-nacion-para-la-
construccion-de
(16) https://myaccount.schaeffersresearch.com/members/services/ChartOfTheWeek/default.aspx?chartid=BCDC3358-
0983-4EE1-8291-
EA061D3BBB52&utm_source=7%2F25%2F2021&utm_medium=email&utm_campaign=cotw&trackback=cotwezine&ut
m_content=continuereading&clicklocation=continuereading
(17) https://finance.yahoo.com/news/harte-gold-provides-strategic-review-132000150.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
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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
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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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