6 The IKN Weekly, issue 636 — Aug 02, 2021
The IKN Weekly
Week 636, August 1st 2021
Contents
This Week: In Today’s Edition, US BLS on deck, Summer got hotter but it’s still summer.
Fundamental Analysis: Copper Mountain (CMMC.to) 2q21 financials.
Stocks to Follow: Rio2 Ltd (RIO.v), Minera Alamos (MAI.v), QC Copper & Gold (QCCU.v),
Aldebaran Resources (ALDE.v), Argonaut Gold (AR.to), Amarillo Gold (AGC.v), Minera IRL
(MIRL.cse).
Copper Basket: Overview, Chakana Copper (PERU.v), Solaris (SLS.to).
Producer Basket: Overview, Kirkland Lake (KL),
Tiny Dogs: Overview, Constantine Metals (CEM.v), Precipitate Gold (PRG.v).
Regional Politics: Peru this week, Colombia: Anglogold Ashanti confident of success at
Quebradona, Guatemala political risk, Nicaragua political risk.
Market Watching: Tracking the Buy Peru call, Kuya Silver (KUYA.cse) is long on promises,
Alexco Resource Corp (AXU): Still top of the silver list, Checking the financials at Minera Alamos
(MAI.v), Updating the Harte Gold (HRT.to) side bet, Belo Sun (BSX.to) gets hit by bad CSR
publicity, Some imported gold technical analysis.
I remind subscribers that no part of this newsletter can be copied, reproduced or
given to any third party without the express permission of the author.
This Week
“
In Today’s Edition
Copper Mountain (CMMC.to) is on the right track, its 2q21 production blow-out more
than enough offset the costs jump. We go into detail in today’s main Fundies section.
Copper the metal is back in the limelight, too. We have Goldman Sachs reiterating its
buy call, we have tightening supply in Shanghai and a market pushing back against
Chinese jawbone, we also have potentially significant supply disruptions in the pipeline
from Chile. The Copper Basket is the place for the information.
I wish I could report a calmer Peru this weekend, instead the first full day of President
Castillo’s mandate threw the country back into political chaos. Not great for your author
in the near-term, but those on the outside looking into Peru should welcome last week’s
events as they will accelerate a return to (something approaching) normal. Peru is a
buy and Regional Politics explains why.
Market Watching begin the tracking of the Buy Peru call, with an EPU that dropped
hard last week on the Friday chaos. We also keep tabs on the newly-opened side-bet
trade in Harte Gold (HRT.to), and other things.
US BLS on deck
August 6th is late in the calendar for the US BLS jobs report, but it’s the first Friday of August
and according to Calculated Risk (1) current consensus is +900,000 NFP jobs added and the
headline unemployment rate to drop to 5.7%. After last week’s bucket of cold water GDP
1
figures and the rise of the Delta Variant in The USA, there’s bound to be extra attention on this
month’s BLS data and all with a bearish tint.
Summer got hotter, but it’s still summer
“And summer’s lease hath all too short a date”
Sonnet 18, WS
We’ve made it to the eighth month of 2021 and in the week’s most important news, my father
turned 84 years old so many happy returns, dad. In other news, the Summer Doldrums got a
benefit of a light breeze and, thanks mainly to a USD on a down leg, gold and all our complex
had a good week to break up the drudgery of the previous three.
GLD gold holdings, 2018 to date (metric tonnes)
1400
1300
1200
1100
1000
900
800
700
600
500
It’s certainly more pleasant to sit down early on a Saturday morning, sip some freshly made
coffee and write about a week in which GDX rallied 5.34% and GDXJ 5.04%, but let’s not
pretend that the summer market and its Doldrums have suddenly gone away, either. Volumes
are still light, GLD added just four metric tonnes to its stocks, our sentiment ratio has slipped
back to the 6.0x line and that only happens when Wall St doesn’t care about gold. So despite a
+5% week and a back pocket that feels that much richer, we reiterate the message from last
weekend. Sometime too hot the eye of heaven shines, so sit back and chill because summer’s
lease hath all too short a date. It’ll be September soon, the other side of Labor Day and often is
his gold complexion dimmed until then. Hold your shares, go fishing, or find a beach and lay
down on it, or fire up a motor vehicle and do some miles, or put down that phone and read
some words written on paper. Or write a sonnet or two, that kind of thing.
Fundamental Analysis of Mining Stocks
Copper Mountain (CMMC.to) 2q21 financials
The quick way in to the much-anticipated (!) 2q21 results from Copper Mountain (CMMC.to) last
week is to check out the ten-day price chart:
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
Things went well, with CMMC popping hard at the gate and remaining popular all week to
Friday, when copper metal weakness pulled down the whole complex. So first impressions of
Q2 are good, but for a better hack here’s a comparative chart using the same timescale, but
adding the junior sector (GDXJ) and the main copper producers’ ETF (COPX) as markers:
Indeed, CMMC’s financials were well-received but the Friday action is a reminder of the flipside
to this stock’s nature, its leverage is a double-edged sword. Rounding off the preamble, readers
will also note there was no Flash update on Monday around the results, the positive numbers
more than enough to reiterate our current long position without the need to rush out and buy
more. Our job today is that of the quarter-end dissecting the numbers and forming opinions
around with the aid of last week’s literature, namely last week’s NR (2), PDF presentation (3)
and Conference Call (audio recording here (4)). And we start now.
As Copper Mountain didn’t pre-announced production, that’s where we start and with this
overview chart:
CMMC: Copper production and sales, per qtr
3
016.81 843.91 054.81 139.71 203.61 120.71 885.81 895.71 274.71 268.71 290.81 978.81 439.81 428.71
350.32
217.81
625.52 105.72 515.52
696.12 0.42
0.82
0.42 0.42
30
25
20
15
10
5
0
91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 tse12q2 tse12q3 tse12q4
Mlbs Cu
Cu prod (mlbs)
Cu sales (mlbs)
source: company filings
Production at 25.52m lbs Cu was only just shy of the record set in Q1 and at the top end of
expectations (this desk and others). The most important factor for the 2021 production boost
has been grade. CMMC is working through a higher
grading zone in its current sequence and the mill
CMMC: Mill head grade, per qtr
head grade of 0.42% Cu held up through the
quarter. That should begin to trail back toward the
mine historical average during our current quarter
as all good things come to an end, however the
timing of development also dovetails nicely with the scheduled upgrade in tonnage throughput. CMMC
the plant upgrade is on schedule and the mine will
be ready to go to a 45,000 tonnes per day (tpd)
nameplate capacity as from 4q21. More on outlook
and guidance in a moment, let’s first tie off the
43.0 82.0 03.0 92.0 82.0 62.0 13.0 03.0 82.0 92.0 04.0 24.0 024.0 053.0
0.50
0.45
0.40
0.35
0.30
0.25 0.20 0.15
0.10
0.05
0.00
81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 tse12q3
% Cu
source: company filings
quarter production data. Strip rate came in as per
normal and with recoveries constant production as
set. Sales were lower than production, the sales
sequencing not favouring the quarter but it’s no
biggie, instead Q3 gets an early boost. Copper is
the dominant metal at CMMC, normally providing
around three quarters of revenue. In 2q21 that was
74% and in the normal range, SO as well as the
coppe, CMMC sold 6,545oz gold at an average of
U$1,827/oz, and of silver at an average of
U$26.74/oz. Combined, the two by-product metals
added around U$15.2m of top line revenue.
CMMC: Gold production and sales, per qtr
4
4256 4846 2357 9436 4218 5747 7217 6207 2296 4407 8946 0046 0026 8006 9316 4636 9947 9826 0366 2326 9598 3527 7818 3558 7267 5456
10000
9000
8000
7000
6000
5000 4000
3000
2000
1000
0
81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2
Oz Au
Au prod
Au sold
source: company financials, IKN sales est 4q20
CMMC: Silver sold, per quarter
08226 70756 52275
32668 61008 62168 81418
439441
484061
379741 000031 000031
180000
160000
140000
120000
100000
80000
60000
40000
20000
0
91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 tse12q3 tse12q4
6 CMMC: Strip ratio, per qtr
5
4
3
2
1
0
Oz Ag
source: company filings, IKN ests
I’ve left the approximate guidance for silver production in the next two quarters on the chart,
more to indicate we expect consistency at
CMMC for both gold and silver in the next
two quarters (an by-product production is
best pitched conservatively). However, there
are over 1,000 oz of gold left unsold at end
Q2, which added to the hike in copper
inventory means higher top line revenues
due in 3q21. Here’s how Cu inventories ended Q2 and with a long-term average of
around C$9m held at cost, inventories may
add up to C$15m to 3q21 results as they
normalize.
Before moving to the financial side of
results, let’s take in the updated guidance at CMMC and to do so, I’m stealing a slide from its
latest corporate presentation:
81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2
source: company filings
CMMC: Cu conc inventories
603.11
669.6 394.7 457.8 254.9 949.7 538.8 855.8 150.7 888.5 092.9
15.455
758.1 593.5
297.21
18
16
14
12
10
8
6 4
2
0
71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2
C$m
source: CMMC filings
Up to last week, CMMC was still guiding 2021 to between 85m lbs and 95m lbs Cu. That’s now
a range of 90m to 100m lbs Cu and this desk now expects the top end of that range. Our best-
guess estimates for production Q3 and Q4 of 24m lbs Cu would bring the 2021 total to just over
98m lbs, inside the revised range and
conservatively pitched, but the addition of
throughput capacity as from Q4 may see
100m lbs beaten by the end of the year.
Seeing AISC guidance unchanged at
between U$1.80/lb and U$2.00/lb is a good optic underneath that improved
guidance, but we need to be clear that
costs are expected to rise in the second
half of 2021. Here’s the chart and as a
guided, I’m pencilling in a CMMC AISC at a
straight U$2.00/lb for the rest of the year,
because those would bring the total 2021
average to U$1.82/lb. It means CMMC is baking itself room for higher costs if necessary.
Bottom line to production: Another great quarter from CMMC, with the machine running well
and grade providing the top line boost. Sales lagged and will catch up, but CMMC has made the
most of its mine sequence and the temporary boost, allowing them to increase annual guidance
by 5m lbs Cu.
We move to earnings, beginning with the overview chart:
CMMC.to: Quarterly Earnings overview
180
160
140
120
100
80
60
40
20
0
-20
5
91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 tse12q3 tse12q4
source: company filings, IKN ests
srallod
fo
snoillim
CMMC: AISC/lb Cu in USD, per qtr
revenues
COGS
Gross profit
87.1 31.2 37.1 78.1 58.1 82.2 72.2 41.2 76.1 34.1 85.1 64.1 38.1 00.2 00.2
2.50
2.00
1.50
1.00
0.50
0.00
81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 tse12q3 tse12q4
U$
source: CMMC filings
Q2 sales came to C$142.06m, lower than Q1 and mostly due to the copper left unsold. The
COGS number of C$56.278m was also lower than the house forecast, resulting in an operating
profit of C$77m or operating EPS of 36.7c/share.
CMMC: Operating EPS, per qtr
0.50
0.40
0.30
0.20
0.10
0.00
-0.10
-0.20
-0.30
6
71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 tse12q3 tse12q4
source: company data, IKN calcs
retrauq
rep
erahs/$C
That gives the 30,000 feet view, a closer look at the line items provides extra insight and we
add in thoughts on the next two quarters, as well. Here, revenues using a best-guess U$4.20/lb
copper and assuming sales catch-up of C$150m, with Q4 slightly less but by then, a lot will
depend on the prevailing price of copper (we expect it higher).
CMMC.to: Revenues
With costs coming in under control, the operating profit of $77m was in line. For Q3 and Q4 I’m
definitely pitching to the conservative side here, with improvements on either of those numbers
possible from better production.
Finally, net profit of $38.662m was in-line, CMMC taking extra legal fees during the quarter
from the debt refinancing of April. Going forward, the new and lighter payment schedule sees
frees up cash flow for the next three years, this chart a reminder of how things improve:
CMMC: Under new loan agreement (C$m)
year loan principal paid loan interest paid total
2015 8.406 11.684 20.09
2016 17.416 17.337 34.753
2017 37.361 12.521 49.882
2018 44.074 12.122 56.196
2019 49.344 13.687 63.031
2020 56.299 9.902 66.201
2021 0 22 22
2022 0 22 22
2023 0 22 22
CMMC has just under $5m to service in 3q21, then $10m in Q4, easily manageable and has
allowed the company to boost its 2021 exploration budget by $7m to $40m total.
At the balance sheet, we get our first view of how the new, U$250m in bonds fits into the
structure.
649.77 402.48 27.06 941.37 78.68 441.56 307.26 347.37 465.94 980.19 299.49 1.601
12.261 60.241 051 241
200
180
160
140
120
100 80
60 40
20
0
81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 tse12q3 tse12q4
$m CMMC.to: Operating profit
source: company filings
3.3 7.61
1.21-
8.4 9.91 5.1-
4.5-
2.05-
0.81-
8.82 3.93 5.04
1.58 0.77
0.65 0.26
120
100
80
60 40
20
0
-20
-40
-60
81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 tse12q3 tse12q4
source: company data, IKN ests
srallod
fo
snoillim
CMMC.to: Liabilities Breakdown per qtr
600
550
500
450
400
350
300
250
200
150
100
50
0
7
71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2
source: company filings, IKN ests
srallod
fo
snoillim
LT debt
current debt
The new refi allows CMC to boot obligations five years down the line and until then, collect the
cash required to build its next phases of development. As for assets, the difference is the cash:
CMMC: Assets breakdown, per qtr
1000
900
800
700
600
500
400
300
200
100
0
71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2
C$m
cash&eq A/C Rec
Inventory fixed
source: CMMC filings
Here below is the cash position and the real reason to buy into CMMC at the moment:
200 CMMC.to: Cash and ST
180
160
140
120
100
80
60
40
20
0
t’s taken just four quarters for CMMC to go from a tight treasury position to having over
C$144m in cash and a working capital of nearly $150m. This is the purpose of the corporate
re-working, it allows CMMC to benefit from its new Cash Cow status by collecting as much of
the cash for itself as possible and as for what it would so with the cash, look no further than
Eva. We haven’t made much noise about the Eva project in Australia yet, but it’s the obvious
growth story at CMMC that would double copper production, give a second asset and make the
company international in reach. CMMC set 4q21 for a construction decision on Eva, with one of
their stipulations at the time being a supportive copper price. As Eva uses U$2.97/lb and then
U$3.04/lb for an IRR of 29%, we can assume this project is going to get the green light with
copper over $4/lb. With a P+P reserve of 171mt at 0.46% Cu for 1.7Bn lbs copper as well as
small gold credits, Eva’s 15 year mine plan has production at 100m lbs Cu per year at a cash
cost of $1.44/lb, all very competitive. What’s more, CMMC is now on track to be able to build
Eva from its own treasury and get its “high-quality organic growth potential in a low risk
jurisdiction” with no further dilution.
71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 tse12q3 tse12q4
200 CMMC.to: Working Capital per qtr
160
120
80
40
0
-40
-80
-120
source: company filings, IKN ests
71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 tse12q3 tse12q4
source company filings, IKN ests
srallod
fo
snoillim
Bottom line: If the market needs an
extra catalyst to send CMMC higher, then
perhaps Eva is the one, but the real
reason is its new ability to make money.
CMMC is now a real cash cow, delivering
to treasury at the right time to make the
construction of its growth projects (here
Eva today) financially light work. But
there’s only so many time a sub-$4 stock
can deliver 30c operating earnings per
quarter (not year) and stay under $4.00
and what’s missing is an overdue re-rate,
as even a modest 5X operating earnings
now points us to $5.70 of even $6,00
per share. CMMC is still being treated as
a cyclical stock in a moment of passing
glory, we expect the copper price and the company’s execution on plans to make that
assumption look stupid in 2022. Even after doubling this year, Copper Mountain remains cheap
compared to its results and is a buy.
Stocks to Follow
A good week for the money. Our 17 open positions included 14 winners, one unchanged stock
(MIRL.cse) and the two losers from the small trades (WLF.v, AUL.v). Most of the wins were
firmly inside recent trading ranges and more about the rising with the sector relief rally, but we
did have two double figure percentage winners in the shape of QC Copper & Gold (QCCU.v up
11.8%) and Cartier Resources (ECR.v up 10.4%), so a cheer for those.
We remain at 17 open positions on our Stocks to Follow list, two over our self-imposed limit and
uncomfortable about the idea. Six are winners, one is UNCH, ten are losers.
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$0.64 204.8% $1.14 tgt Aug'20, #1 idea
Rio2 Ltd. RIO.v STR BUY C$0.83 22-Apr-18 C$0.70 -15.7% $1.30 tgt on capex raise, Jul21
Recommended stocks (In order of preference)
Copper Mountain CMMC.to STR BUY C$3.51 18-Jun-21 C$3.61 2.8% reaffirmed buy on strong Q2
Argonaut Gold AR.to STR BUY C$2.92 25-Jun-21 C$3.36 15.1% All right signs, avging up
Trilogy Metals TMQ BUY U$1.84 15-Sep-19 U$2.24 15.2% Cu for 2021, going well
Amarillo Gold AGC.v BUY C$0.31 30-May-21 C$0.30 -3.2% add at 30c/32c, capex NR soon
Strategic Metals SMD.v hold C$0.42 31-Jan-21 C$0.32 -23.8% Canadian land bet/Value trap?
Excelsior Mining MIN.to STR BUY C$0.93 10-Mar-19 C$0.56 -39.8% Delayed, but still great value
Aldebaran Res. ALDE.v STR BUY C$0.68 16-May-21 C$0.68 0.0% Bet on big copper, pol risk ok
QC Copper &Gold QCCU.v BUY C$0.205 25-Apr-21 C$0.19 -7.3% Cu Jr, fast-tracking resource
Royal Road Min. RYR.v BUY C$0.155 17-Mar-19 0.28 80.6% Model paying off in Nica
Wolfden Res. WLF.v spec buy C$0.30 11-Apr-21 C$0.22 -26.7% Zn trade needs to move soon
Great Bear Res GBR.v BUY C$15.83 26-Aug-20 C$14.91 -5.8% Binary M&A trade, wait for print
Cartier Resources ECR.v hold/sell? C$0.32 21-Mar-21 C$0.265 -17.2% Thinking of selling
Aurelius Min. AUL.v hold/sell? C$0.75 28-Jun-20 C$0.42 -44.0% 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$0.85 25.0% LT bet, added again July'21
8
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:
Rio2 Ltd (RIO.v): I’m going to hold off on a longer commentary on RIO.v today, even though
a few of you asked me to comment and at the time of replying to their mails, I said I would.
Instead, let’s allow the current open placement to close (its overallotment fully taken) and allow
that weight to be lifted from its trading price.
Minera Alamos (MAI.v): Fortunately, a strong and tightly-knit team is the team that gets
through bad personal/professional moments. Unfortunately, it’s those very teams that feel the
losses of the type suffered by Minera Alamos most deeply. This desk sends its sincere
commiserations to all at the company. It’s also fortunate that the loss won’t affect the long-
term success in store at MAI, a few extra thoughts on that in ‘Market Watching’, below.
QC Copper & Gold (QCCU.v): Part relief rally, part reaction from another strong drill result,
QCCU was our best mover on the week and I liked the contents of its NR (5), the title “QC
Copper Intersects 100 Metres of 0.5% Copper Eq and 18.3 gpt Gold over 9 Metres in a single
Saddle Zone Hole” once again about turning what
was previously considered waste into ore. The first
100m of the hole ran an average of 0.5% Cu, well
above the rough assumption of a 0.25% cut off.
Then came the gold cut, further downhole and next
to a known copper vein (i.e. where you might
expect to find a little bonanza UG gold). It’s still a
case of waiting for the 43-101, but once again
we’re offered strong evidence Opemiska is about to
transform into a different beast, not only in terms
of tonnages and contained copper but also the key
factor for economics, a significantly lower strip rate.
Last week was a good one for QCCU but as the six-
month chart shows (right), it was little more than a relief rally. By staying long QCCU at the
start of August 2021, knowing full well the company is about to deliver a new economic
resource and conceptual mine plan at the end of August, means we are betting that CEO
Stewart will deliver a mine with compelling economics, the type that cannot be ignored by
neighbours if Lake Chibougamau is indeed
Canada’s next mining camp.
Aldebaran Resources (ALDE.v): In the year
ALDE decided to go the Dog&Pony route and
become a heavily marketed exploreco, its share
price progression has been marked by volume
surges:
Until ALDE turns on the marketing volume we
9
remain where we are, but the current relative silence will only last so long if copper rallies into
Q4.
Argonaut Gold (AR.to): Much as suspected at
the time, the sub-$3 entry price is now looking like
a tremendous bargain. AR once again showed
exemplary relative strength to market last week,
accumulation clear to anyone watching the tape
and I’m hardly the only nerd out there. We have
ten days to wait for AR’s 2q21 financials, which
pencils in IKN638 as the next close look at the
company. Happy holder so far.
Amarillo Gold (AGC.v): The AGC share price is
back in the tight 30c 32c frame, where we expect it to be until the financing package is
unveiled. That timeframe is still “October latest”, which now means news could drop at any
moment. Another four lines of script to report that nothing has changed, we await the catalyst.
Minera IRL (MIRL.cse): The executive appointments announced by MIRL last week (6) also
come at the same time the company is laying off staff at its Peru operations and Lima office.
That is as clear a signal of a new broom entering as they come, but this desk is forced to
reiterate that until its entrenched CEO is ousted, nothing of worth can happen at this company.
The Copper Basket
After thirty weeks of 2021, The Copper Basket shows a gain of 36.19% 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 1586.07 14.75 142.6%
2 Copper Mtn CMMC.to 1.81 207.5 749.08 3.61 99.4%
3 Oroco Res OCO.v 1.85 186.96 559.01 2.99 61.6%
4 Marimaca Cop MARI.to 3.25 87.737 364.11 4.15 27.7%
5 Western Copper WRN.to 1.57 135.798 325.92 2.40 52.9%
6 Amerigo Res ARG.to 0.80 181.79 230.87 1.27 58.8%
7 Excelsior Min. MIN.to 1.12 273.585 153.21 0.56 -50.0%
8 Aldebaran Res. ALDE.v 0.455 125.24 85.16 0.68 49.5%
9 C3 Metals CCCM.v 0.115 438.56 76.75 0.175 52.2%
10 Regulus Res. REG.v 1.07 101.85 76.39 0.75 -29.9%
11 Chakana Cop PERU.v 0.60 111.41 47.91 0.43 -28.3%
12 Doré Copper DCMC.v 1.00 53.304 47.44 0.89 -11.0%
13 Element 29 Res ECU.v 0.45 68.281 33.46 0.49 8.9%
14 US Copper USCU.v 0.105 87.53 14.44 0.165 57.1%
15 Chibougamau CBG.v 0.165 53.077 13.27 0.25 51.5%
NB: All stocks in CAD$ Portfolio avg 36.19%
The Copper Basket average put in a recovery burst last week, up nearly 6% as the sector
reacted to a weaker USD but it wasn’t all the
winning all the time, with four week-over-
The Copper Basket 2021, weekly evolution
week losers (OCO.v, REG.v, ECU.v, CBG.v) 70%
breaking up the eleven winning stocks. Most 60%
of the wins were technicalin nature and on 50%
the wider sector relief rally, the exceptions
40%
being C3 Metals (CCCM.v up 9.4%), Western
30%
(WRN.to up 9.6%), the seemingly
20%
unstoppable Solaris (SLS.to up 11.0%) and
10%
10
0%
ts1
naJ
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 ts1gua
source: IKN calcs
the week’s biggest mover, Chakana Copper (PERU.v up 48.3%) on the news of a NR and some
marketing.
Copper-the-metal mostly accompanied the bullishness in stocks, though we need to point out
that prices dropped sharply on Friday and, after the near-dated September 2021 contract
(HGU21) traded as high as U$4.62/lb on Monday, it closed the week undr U$4.50/lb.
Which opens on this week’s first copper talking point, Chinese jawbone. These pages have gone
out of their way to pooh-pooh the effects of the recent Chinese inventory dumps, with the
reality far less of a concern than the incessant rhetoric out of Beijing trying to dampen prices
for all primary materials and copper in particular. Last week China ratcheted up the noise once
again, promising further off-market auctions of sizeable tonnages (aimed at the local end-users)
but come Friday and the obvious weirdness around the sudden drop in copper, the market was
pushing back. Example A and your curated trade comment this week comes from one Matthew
Fine (7), who runs a portfolio somewhere and is on some reporter’s rolodex. With the stage set
on China’s big June stockpile jawbone and consequent release of tonnages into the market, we
get this:
With “speculative positioning now more normalized,” however, Fine said the
“realization that Chinese reserve releases are not likely to be very large and are
temporary in nature, the fundamentals of a tight physical market and a terrific demand
outlook are being weighted more heavily.”
That wins our Sherlock Holmes analysis award of the week. Then Friday we got the big guns,
with Goldman Sachs (8) publishing an update to its highly bullish early year “Copper is the New
Green Wonder” report (the one that set the metal off to neatly U$5/lb on the rush). Vampire
Squid reiterated its call on copper at U$11,000/tonne by end 2021 (that’s U$4.99/lb, so let’s
round up) and expects a slightly higher average price than that for 2022, after which copper
goes toward its long-term $6.80/lb target. What could possibly go wrong. Cynicism and irony
set aside, of course it’s a positive and GS may herald in a broad market now latching onto the
copper story. Not for nothing do you see the whole industry pushing the Green Energy angle
hard, as the real message conveyed by GS last week the expect non-cyclical nature of prices:
The invitations are now out for Wall St to join the copper party; Come for a trade win, stay for
the carbon credits and world environmental advantages.
The second novelty to the market is the rising threat of supply crimping out of Chile. Last week
three sets of mineworkers voted overwhelmingly to reject the final pay offers of their
employers, with the Andina Norte section of Codelco, the Caserones mine (Lumina copper) and
now the world’s biggest copper mine, La Escondida (BHP et al) all voting to strike. The two
parties in all three cases now have five days or so to get to an emergency agreement or get
any final offer accepted, but that’s currently looking unlikely. BHP for one has said it will not
entertain the union’s main demand, that of 1% of dividends going to workers instead of
shareholders in recompense for the work done to keep the mine open during the Covid-19
crisis. We’re now likely to get a strike and mine stoppage at La Escondida and at other mines in
Chile at the same time, the type that can spook and already tight market.
11
It the end of another month, we catch up on our long-term copper inventory tracking charts:
Copper inventories, per month, 2012 to date
1000000
900000
800000
700000
600000
500000
400000
300000
200000
100000
0
12
21.naJ ram yam luj pes von 31.naJ ram yam luj pes von 41.naj ram yam luj pes von 51.naj ram yam luj pes von 61.naj ram yam luj pes von 71.naj ram yam luj pes von 81
naj
ram yam luj pes von 91
naj
ram yam luj pes von 02
naj
ram yam luj pes von 12
naj
ram yam luj
Mt Cu source: Cochilco
Comex
Shanghai
LME
While the overall total in the three world systems hasn’t hanged much over the last five
months, the make-up certain has:
Copper inventories: percentage held per exchange
80
70
60
50
40
30
20
10
0
21.naJ ram yam luj pes von 31.naJ ram yam luj pes von 41.naj ram yam luj pes von 51.naj ram yam luj pes von 61.naj ram yam luj pes von 71.naj ram yam luj pes von 81
naj
ram yam luj pes von 91
naj
ram yam luj pes von 02
naj
ram yam luj pes von 12
naj
ram yam luj
LME Shanghai Comex source: Cochilco
Shanghai SHFE copper stocks are
disappearing fast, as we will continue to note LME copper stocks, 2014 to date
400000
below. But before leaving the monthly
350000
tracking charts and going back to the week’s
300000
action, a reminder that even though the LME 250000
has seen a decent influx of stock recently 200000
(Chinese dumping), it’s hardly at record 150000
levels itself. The 200k to 250k range is the 100000
50000
long-term median, so it0s difficult to lay
0
blame for the current depletion at SJFE on
any arbitrage.
The monthly data back up the recent data,
here’s some more of that:
Copper stocks rose last week, with LME Asia warehouses receiving over 15kt of stock
seemingly from out of nowhere. The grand total this weekend is 374,961mt, still under
the 400k line and still tight.
At the SHFE another 1,997mt left inventory, Friday’s closing total at 94,090mt.
The changes happened at the LME. In the space of 24 hours its South Korea
warehouses accepted 8,475mt of copper, its Singapore warehouses 2,750mt copper
and its Taiwan warehouses 4,500mt copper. Once a slight adjustment from its Holland
offices was backed out, the total this weekend comes to 239,650mt, up 14,900,t
(+6.6%) from this time last week.
41.naj ram yam luj pes von 51.naj ram yam luj pes von 61.naj ram yam luj pes von 71.naj ram yam luj pes von 81
naj
ram yam luj pes von 91
naj
ram yam luj pes von 02
naj
ram yam luj pes von 12
naj
ram yam luj
source: LME data
reppoc
sennot
cirtem
At the Comex, stocks added 643mt to close at 41,221mt.
Here’s the Shanghai-only inventories chart, in which we continue to track the seasonal
sharpness. But the other chart does it best…
Shanghai Futures Exchange Warehouse Stocks, 2014 to date
400000
350000
300000
250000
200000
150000
100000
50000
0
13
31'13ceD ht9 ht81 ht72 ht5tco ht41 dn22 5102
dr3yam
ht21 ht02 ht92 ht7bef ht71 ht62 ht4peS ht31 ht92 ht9 ht81 ht72 7102
ht5von
ht41 ht52 ht01 ht91 ht82 9102
ht6naJ
ht71 ht62 ht4gua ht31 dn22 0202ts1ram ht01 ht91 ht72 0202ht6ced ht41 ht52 1202ht4luj
Mt Cu
|
source: Cochilco
…and here the gap between the amount of copper in the SHFE system in other years compares
2021:
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 10111213141516171819202122232425262728293031
source: Cochilco data
Chakana Copper (PERU.v): A bunch of explorecos saw constant buying all week, but PERU
was ahead of the field. It started its latest rebound on Tuesday morning and volume at the bell
on this news (9), a different sort of drill result
headline from Soledad:
Chakana Intersects 12m of Massive
Sulfide with 27.39% Copper, 967.7 g/t
Silver, and 0.38 g/t Gold at Soledad, Peru
Different because they went back to one of the
first breccia pipes drilled, Bx7, in order to get a
grandstand headliner. Along with other “resource
definition” drill results from a handful of pipes,
plus one pure exploration hole that didn’t show so
well, PERU announced its intention to be a heavily
marketed and promoted stock in the second half
of 2021, as much as any contained metal at Soledad. With cash, permits in place and multiple
drill targets in the second half of 2021, PERU.v is set to put another 16,000m into Soledad and
that will provide a constant series of NRs.
Solaris (SLS.to): Now over a billion US Dollars in market cap, SLS is still totally dependent on
the good graces of Ecuador CSR for its valuation. Therefore I will continue to be wrong about
this company, and happily so.
The Producer Basket
After thirty weeks of 2021, the Producer Basket shows a loss of 8.48% to level stakes.
company ticker price 1/1/20 Shares out Mkt Cap (U$Bn) current pps gain/loss%
1 Newmont NEM 59.89 805 50.57 62.82 4.9%
2 Barrick GOLD 22.78 1778.04 38.71 21.77 -4.4%
3 Agnico Eagle AEM 70.51 244.187 15.79 64.68 -8.3%
4 Kirkland Lake KL 41.27 267.056 11.41 42.74 3.6%
5 Kinross Gold KGC 7.34 1261.07 8.27 6.56 -10.6%
6 Endeavour Min EDV.to 29.62 252.568 6.25 29.71 0.3%
7 Pan American PAAS 34.71 210.262 5.90 28.07 -19.1%
z8 B2Gold BTG 5.60 1051.697 4.41 4.19 -25.2%
9 Alamos Gold AGI 8.75 392.739 3.19 8.12 -7.2%
10 Pretium Res PVG 11.48 187.833 1.75 9.33 -18.7%
Prices in U$ except EDV.to (share price in CAD$ and mkt cap in approx USD) Port. avg -8.48%
All ten Producer Basket stocks went up last week, the tide of money entering GDX and affecting
components in an equitable manner:
The 2021 Producer Basket: Weekly performance and 20%
comparative to GDX control
15%
10%
5%
0%
-5%
-10%
-15%
-20%
All our ten rose by at least 4%, three of those made it to +7% and the move of all came from
Agnico Eagle (AEM up 7.89%) on a long-overdue rally for this under-performer. The GDX
benchmark beat our list by a tenth or so, rising 5.34% on the week.
Kirkland Lake (KL): KL rose by 7.2% compared to AEM’s 7.9%, but for me KL was the week’s
big winner thanks to its sparkling 2q21 financial results. Kirkland Lake (KL) wowed its audience
with a general return to form, production up over
its assets, costs down and plenty of organic
growth news unpacked in its 2q21 financials (10).
We’re not going into the numbers here because
for one thing, KL is a company covered by no end
of analysts and as I’m way dumber than they are
about this company, there’s nothing I can add of
any great insight. As production was pre-
announced (379,195oz), revenues didn’t surprise
but the AISC of U$780/oz was U$66/oz cheaper
14
ts1
naJ
t01naJ ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht7ram ht41 ts12 ht82 ht4rpa ht11 ht81 ht52 n2yam ht9 ht61 dr32 ht03 ht6nuj ht31 ht02 ht72 ht4luj ht11 ht81 ht52 ts1gua
The 2021 Producer Basket: Percentage difference between
GDX benchmark and basket (negative = IKN basket ahead) 8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
basket 1.0%
gdx control 0.0%
source: Google, IKN Calcs ts1
naJ
t01naJ ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht7ram ht41 ts12 ht82 ht4rpa ht11 ht81 ht52 n2yam ht9 ht61 dr32 ht03 ht6nuj ht31 ht02 ht72 ht4luj ht11 ht81 ht52 ts1gua
source: IKN calcs, NYSE/Nasdaq/TSX data
than the 1q21 period and beat street expectations handily. In fact, a look at the 10-day comp
chart shows how holders were a little nervous going into earnings, so their relief rally was extra
sweet on Thursday morning.
The Tiny Dogs
After thirty weeks of 2021, the Tiny Dogs show a loss of 0.42% to level stakes.
company ticker price 1/1/21 Shares out Mkt Cap current pps gain/loss%
Antler Gold ANTL.v 0.205 61.348 6.44 0.105 -48.8%
Aston Bay BAY.v 0.045 163.975 7.38 0.045 0.0%
Constantine Met CEM.v 0.17 45.4 19.75 0.435 155.9%
Contact Gold C.v 0.115 240.757 20.46 0.085 -26.1%
Golden Pursuit GDP.v 0.22 40 5.60 0.14 -36.4%
Manitou Gold MTU.v 0.045 230.79 16.16 0.07 55.6%
Precipitate Gold PRG.v 0.240 106.241 9.56 0.09 -62.5%
QC Copper QCCU.v 0.315 105 19.95 0.19 -39.7%
Red Pine Expl RPX.v 0.400 95.806 45.99 0.48 20.0%
Warrior Gold WAR.v 0.090 91.818 6.43 0.07 -22.2%
Prices in CAD$, data from TSXV basket avg -0.42%
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
20% Tiny Dogs, 2021 weekly tracker
choosy, but still I preferred companies that have
teams or people with good peer reputations. 16%
12%
The Tiny Dogs basket average rallied by 8% and
8%
almost made it back into positive territory last
4%
week, thanks largely to the run in Constantine
0%
(CEM.v up 40.32%). There were six winners on
-4%
the week in total (ANTL.v, CEM.v, C.v, PRG.v,
-8%
QCCU.v, RPX.v) as the tinycaps mainly bounced,
-12%
but there were three losers (BAY.v, GDP.v,
WAR.v) and one unchanged stock as well
(MTU.v), it wasn’t all in one direction.
Constantine Metals (CEM.v): CEM makes
me look stupid, right on cue after last week’s
comments. A good thing, too. The trading in
CEM last week was a bit of a mystery, right up
to Friday afternoon when a 4m share cross was
registered, which means the previous four days
had been an exercise in coaxing an agreeable
price for both seller and buyer from the open
15
ts1
naJ
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 ts1gua
source: IKN calcs, TSX data
market. Clearly, somebody is willing to risk C$2m or so on a new position here and that may
provide new support for the price, but only if enough people agree with the new buyer.
Precipitate Gold (PRG.v): This stock now at a low ebb, due to the combination of poor
returns from its JV-funded drill program with Barrick to date, alongside the long-term inertia at
Dom Rep governmental level in getting any
legislation done. Unlike other countries, the anti-
mining lobby is well-established and powerful, less
about tree-hugging greenies and centred more on
the Catholic Church and agricultural concerns. As the
agro lobby also brings richer, landed families into the
equation it becomes difficult for a government with a
limited term of office to make parliamentary
progress, etc.
We’re back to the long-term reset level and as
risk/reward propositions go, buying a few at this
point and then waiting a while looks like a simple and
effective business plan. The caveat would be how the future holds more risk than the past,
aside that the chart set-up is as obvious as they come now.
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
Another week in which the best way to report on the state of Peruvian politics is to wait until
midnight Sunday before writing anything. These pages try hard to avoid reporting the minutiae
of any LatAm nation’s political mechanism, as weirdness comes quick and fast no matter where
you are. All the outsider requires are the results of the weirdness, but in the case of Peru 2021
we need to outline what happens when Peru forms a new government in order to understand
what will happen in August and it goes something like this:
The population elects its President and Congress
The new President picks his cabinet of Ministers, including his Prime Minister (known as
“PCM”, or President of the Council of Minister)
The PCM, as the person charged to enact the new President’s political wishes, then has
up to 30 days to go to Congress, explain his cabinet’s plans and get ratification from
Congress.
Congress then ratifies the PCM and his cabinet, and they all get to work. Fin.
That’s what normally happens, this year is not normal. Last week, we began our Peru update
with an unruffled, “It’s gone as expected so far” and I should have known better to display such
hubris. However, before getting to the events that matter and to give myself a break, from
IKN635 on Sunday up to Thursday morning things continued to go as expected and forecast by
my Lima-centric DD of two weeks ago. The investiture and maiden speech on Wednesday went
down well enough, its contents apparently conciliatory toward other political parties and with
plenty of talk of co-operation rather than confrontation. President Castillo referred more to
social issues and less to business, but there were words for the mining industry and here’s his
prepared soundbite section:
“The actors must adapt to the stage, and not the other way around. Communities and
territorial organizations must participate actively in the management of their
development. If a project doesn’t have “Social Rentability”, it will simply not happen.”
The phrase “social rentability” (“rentabilidad social”) is a new one, coined by the Left as a step
16
further than “social agreement”, their argument is that agreeing to co-exist is all well and good,
but the mining company must bring wealth generation to all stakeholders. He also announced
plans to bring more rural communities under the OIT169 statute that provides protection for
indigenous cultures. In effect, OIT169 is the law that gives communities its right to prior
consultancy (though not an outright veto) of a project and one of the strategies used over the
years by mining companies in Peru is to state that the community in question “isn’t indigenous”
and of mixed race, therefore OIY19 doesn’t apply to them.
And that was Wednesday morning, then Wednesday afternoon brought the first signs things
weren’t all they seemed when the scheduled swearing in of Castillo’s ministers was postponed.
Then the next day Thursday, new President Castillo left Lima to swear-in his ministers in a rural
setting and site of a historic battle. Out of Lima and back inside his party political entourage,
Castillo picked one Guido Bellido as his Prime Minister, a hard left politico PL party member and
close associate of party leader, Vladimir Cerrón. Bellido has been a controversial local lefty
politico but never on the national stage, so his choice came as a shock to the whole political set
in Lima (myself and my contacts included). As a result, Peru now gets to watch a fully-fledged
Communist strut on the national stage as its Prime Minister and along with that pick, Castillo
also chose several other candidates as ministers from his own party ranks or political
affiliations, ignoring many other potential picks in a move that makes his cabinet nothing short
of radical Left. Finally, his pick for Minister of Energy and Mining, one Ivan Merino, is a left wing
social scientist who has published extensively on the damage caused by the extractive industry
in Peru, mostly the hydrocarbons sector in the Amazon basin. His wife runs an anti-mining
NGO. Just the kind of person who want to promote mining in a country. Not.
On cue, the same Whore Left that enabled Castillo into power threw up its hands in horror over
Bellido (mainly) and his ministers. “What? A real Communist! Ewww!” and en masse, the
political centre moved to join the right. We now know that when Bellido faces Congress his
ratification will be voted down, which automatically forces his resignation and that of his
cabinet. As Bellido has a maximum of 30 days in which to appear, it means the showdown
happens this month of August and at that point, President Castillo then has to pick a new PCM
and that’s when we’ll find out whether Peru gets better sooner or later:
If Castillo, prompted by Perú Libre party head and true Communist Vladimir Cerrón,
continues to insist on a hard Left Prime Minister and cabinet of Ministers, it will start the
process that leads to Congress voting to “vacate” President Castillo. There are potential
rough moments along this path (not least the call for new Presidential elections) and
the Left will accuse the Right of trampling on democracy and human rights, but sooner
or later Peru will get to vote again and won’t make the same mistakes that led to the
second round nightmare.
However, there’s a much easier way forward: If Castillo moves away from the Party line
and picks a more moderate PCM and cabinet of ministers, thanks to the political space
created by pushing hard Left, he’s now likely to gain the ratification required. Even the
right wing admit there is ground to cede to more social policies and a Castillo who
decides to play ball and allow the economy to work in the usual way get to see out his
five year term.
Most people in Peru this weekend assume President Castillo is either politically stupid, or acting
under the direct influence of Vladimir Cerrón and his Communist cohorts. However, there is the
alternative of a smart politico who has done all this deliberately. In theory at least, his moves
remind this desk of the way Hugo Chavez used to run Venezuela, first by making some highly
radical declaration or edict, then when the pushback happens dilute the message quickly. The
result is a series of two-steps-forward-one-step-back that progresses the cause of the Left
wing. In the case of Castillo, nominating a radical PM may be a ploy as he knows there isn’t a
chance of ratification. Instead, Castillo gets to eschew the direct influence of Cerrón and install
a less moderate cabinet that gets accepted. In fact we’ve already seen this process in action in
Peru, when on Friday the currency, stocks and bonds all went South as the world realized the
17
country had no FinMin. By Friday evening that changed and Pedro Francke had sworn in, the
same person considered a Left wing danger now accepted as a better alternative to chaos.
Francke, a lefty progressive city type, at first refused to join as minister under the controversial
Bellido but, after being talked round, took office Friday evening. His swearing-in statement
(11)…
“For a sustained advance toward well bring, with equality of opportunities without
distinction of gender, ethnic identity, sexual orientation, for democracy and national
unity, I swear!”
…was almost funny, an attempt to burn his Whore Left justification on his own heart to justify
joining this nefarious cabinet. Francke now sees himself as the financial saviour of Peru and has
already talked publicly about his meeting with BCRP head Julio Velarde tomorrow, in which he
will ask Velarde to stay on. Certainly we can expect the Peru currency and stock market to
rebound tomorrow (see below) for the simple reason that when the markets closed on Friday,
Peru didn’t have a FinMin and now it does.
The bottom line: For those inside Peru, we’re going to have some difficult weeks to get through
socially. But for those of you on the outside looking in (approx. 97% of the readership of The
IKN Weekly), it doesn’t matter whether Castillo’s decisions and moves last week turn out to be
5th dimensional chess or 5th Grade Checkers. You get to benefit from the accelerated
denouement of the Castillo government and a return to normality, because he and his PL party
have decided to play all their cards at once. I expected the Hard Left wing of the PL party to at
least be subtle and bide some time, instead it’s gone straight for an ugly power grab that Lima
will never allow to happen. August is going to be very noisy and there will be plenty of Left
wing rhetoric to scare your money, but until Guido Bellido appears before Congress, its all hot
air. Then comes the moment of real truth, when we find out if Pedro Castillo will compromise
and become a sitting President, or try to face down Congress and become an ex-President. It’s
his call, either way Peru goes up once the process is done.
Colombia: Anglogold Ashanti confident of success at Quebradona
Futher to last week’s note on the new Colombian national in charge at Anglogold Ashanti, a
trawling of the internet reveals the company last week began advertising for executive positions
to fill at its new offices in Jericó, Antioquia, Colombia, including that of full-time head of Human
Resources (12)
Guatemala political risk
Nobody’s idea of a stable country politically, Guatemala has in recent weeks seen a serious shift
toward full-scale political crisis. The story has been followed well by good LatAm sources in
English such as Insight Crime or Latin America Daily Bulletin (13), this post from last Monday
explaining the situation and how the excesses of President Alejandro Giammattei and his
attorney general, Consuelo Porras. Since then, street protests have intensitifed and on
Wednesday, the USA decided to make an official move. Quoting AP (14), “…
“The U.S. government has suspended cooperation with Guatemala’s Attorney General’s Office in
response to the firing of its top anti-corruption prosecutor, saying Tuesday that it has “lost
confidence” in the Central American country’s willingness to fight corruption.
U.S. State Department deputy spokeswoman Jalina Porter told reporters in Washington that the
decision by Guatemala Attorney General Consuelo Porras to fire Juan Francisco Sandoval, the
special prosecutor against impunity, “fits a pattern of behavior that indicates a lack of commitment
to the rule of law and independent, judicial, and prosecutorial processes.”
“As a result, we have lost confidence in the attorney general and the intention to cooperate with
the U.S. government and fight corruption in good faith,” Porter said.
She said the suspension would remain in effect while the U.S. reviews its assistance to the
Attorney General’s Office.
That’s a rap on the knuckles for a President who, under normal circumstances suits North
America and had been welcoming to FDI. Indeed, it’s no surprise to see an uptick in activity in
Guatemalan mining since Giammattei came to power 20 months ago and a couple of recent
headline-making companies comes to mind more than Pan American and Escobal these days.
Volcanic Gold (VG.v) has recently seen early exploration success and hit high-grade, the share
18
price popping accordingly. Meanwhile, the Lundin-controlled Bluestone (BSR.to) has switched
gears and now wants to build an open pit mine, a controversial plan in a country sensitive to
the damage caused by Goldcorp at Marlin. BSR will require cooperation at a national political
level and to date, the government has been very supportive of the plans (without revealing
much to locals). This at a time when the Escobal popular consultancy is finally getting
underway, too.
Guatemala will always be a risky address, currently that risk is elevated but even if things calm
on the streets of the capital Guate, don’t expect it to go away and make your decision
accordingly. Personally, this is one of the easiest jurisdictions in the world to avoid and this
weekend, there’s double reason to steer well clear.
Nicaragua political risk
We’ve mentioned the worsening political situation in Nicaragua on a couple of occasions, most
recently last week while commenting on the price drop in our only Nicaragua-exposed stock,
Royal Road (RYR.v). From those comments you’ll understand I’m not about to give up my
shares due to the recent trampling of human rights and dictatorial behaviour of President
Danuel Ortega because there’s nothing really new. However, he has been making new
headlines, with around three months to go before his (and wife Rosa’s) next guaranteed victory
Presidential election, by arresting any opposition figure available, now in jail under spurious
“Treason against the Fatherland” charges. Let’s leave it to Wikipedia for a prosaic view on the
state of democracy in Nica this year (15):
In June 2021, the government arrested five opposition pre-candidates for president:
Cristiana Chamorro Barrios, Arturo Cruz Jr., Félix Maradiaga, Juan Sebastián Chamorro
and Miguel Mora. In July Medardo Mairena and Noel Vidaurre were arrested, and Luis
Fley went into exile citing threats of arrest.
The political noise against Daniel Ortega will grow in the weeks to come, with the November 7th
election and his guaranteed win the focal point. My decision is to hold through on RYR, but
those of you with exposure to the country in RYR or any other stock should factor in upcoming
anti-Nica feeling into decisions.
Market Watching
Tracking the Buy Peru call
As noted last weekend, the decision to reverse course and call “buy” on Peru will be tracked
actively, here’s what has happened so far:
On the political turmoil of last week (see ‘Regional Politics’ above), the Lima stock market
index-tracking ETF (EPU) dropped like a stone
19
Therefore, not a great start to the call, but as most of the uncertainty on Friday was caused by
the lack of FinMin and since the close Pedro Francke has stepped up. He may be left-leaning
but he is a serious economist and qualified to do the job, so expect the Peru markets to
rebound tomorrow Monday as a technical reaction to a strengthening currency.
From that point, we shall see how the chips fall. As noted above in the main piece on Peru, the
timing of how resolution comes is almost impossible to predict, as are the basic order of events.
The way to manage any exposure is to look to the near future, perhaps one month will be
enough at this point, and be prepared to hold over any rough period (they are likely). The “Buy
Peru” call in IKN634 two weeks ago was obviously early, one glance at the above charts is
enough. However, the macro call is fully intact and I am convinced we are in a period that will
bring the turn and rebound. The old market saying to “buy when there’s blood in the streets” is
too dramatic for our current situation and violence is not on the agenda at present. This is a
political battle and either way it goes, Peru will eventually moderate from its present cabinet
make-up. Either Pedro Castillo is smart, changes his Prime Minister and gains political space, or
he/they move to swift confrontation with the Lima elite…and lose. The former will be swift and
market-friendly, the latter slower, rougher and begins when Congress refuses to ratify Guido
BEllido as PCM. However the chips fall, the precipitous moves from the Hard Left behind Pedro
Castillo have brought all issues to a head more quickly than I expected. Not a bad thing, so for
the strong stomachs, buying Peru through August will pay well.
Kuya Silver (KUYA.cse) is long on promises
Last week’s webinar presentation by Kuya Silver (KUYA.cse) (find recording here (16)) saw the
company CEO David Stein going into its latest drill results at Bethania, as published Monday.
The results were typified by the headline, “Kuya Silver Intersects 1.20 m of 1,127 g/t Silver
Equivalent (Including 0.45 m of 2,574 g/t Ag eq) and 2.60 Metres Of 995 g/t Silver Equivalent
(Including 0.40 Metres Of 4,973 g/t Ag eq) in Initial Bethania Drill Program”, emphasizing the
very high grade of silver at the mine, but hosted in thin veins. My comment that Monday to
CEO Stein was to want to know more about the veins and how they would mine them, but the
answers received in the webinar didn’t shed a lot of light. We heard the veins were potentially
close enough together to mine multiple veins on one stope, I doubt that. We didn’t hear
anything about how they plan to mine thin veins but manage to feed a hungry mill with the
tonnages it would need, either. In thin vein systems, underground logistics are vital.
To be fair, KUYA is adopting a dual track development for Bethania, trying to upgrade resources
while pushing forward and opening production on the known resource at the same time. This
brings up my other bone of contention from the webinar, the claim that Bethania will be a
working and producing mine by the end of 2022. It would be possible to truck out mineral and
toll-mill somewhere else, I suppose, but KUYA last week implied it will be able to permit, build
and commission a mill on site in under 16 months. If true we should be buying this stock hand
over fist today, but the details seem vague. When asked CEO Stein weren’t even give the
approximate capex figure for the plant, which left me with a CEO who can publically promise a
mine in 16 months, but doesn’t want to hazard a guess on the capex to the same public. That’s
20
not the line of marketing to win my heart.
The fact is, Peru is going to be difficult for anyone trying to “do things” in mining. Companies in
place with their plans, such as Chakana Copper or Element 29, can get on and do their
budgeted and permitted work precisely because it has already been budgeted and permitted.
Here, in Kuya Silver, is a company that wants to make a radical change to its operations in the
next two years and move from (still very young) exploreco to a producing miner. However, it
does not have the cash to build its mine (yet), nor does it have the permits, which leaves it with
just one thing, a story. And that story will have to improve rapidly if KUYA wants to find success
in Peru, promising a list of good things in a short period is setting yourself up for failure.
Alexco Resource Corp (AXU): Still top of the silver list
We re-opened soft coverage on our favourite silver mining company, Alexco (AXU) in IKN427
dated June 7th, then updated the calculations the very next week in IKN428 to take into account
the surprise financing announced by the company that very week. The conclusion section of
IKN427 summed up the feeling and how “…re-opening coverage on AXU means it’s now primed
for purchase if an opportune moment comes along”, because at that point in time AXU still
looked expensive compared to the house-derived 12 month target of U$3.05:
Now AXU is down in price, the same U$3.05 looks valid, the problem is the fundy valuation:
For a U$3.05 target, AXU requires the type of U$28/oz silver price we enjoyed at the end of
May. The company’s equity has sunk in direct relation to the silver price, with U$25/oz silver
producing a far less interesting U$2.34 price target and one in line with today’s market.
Bottom line: AXU is now a great way to play leverage in silver. If you are bullish the metal, an
approximate 12% rise in its price (U$3/oz, form 25 to 28) should be enough to see AXU back
over U$3.00 from this weekend’s U$2.22, a 35% upside. On checking in with CEO Clynt
Nauman this week to get his views on the current price, I was pleased to find he was of very
little use, with few opinions on stocks and shares because (quote) “…we have had our heads
down taking care of business, not saying much.” However, he reported KHSD is now shipping
regularly and UG development at both Flame&Moth and Bermingham continue. The next
potential catalyst, apart from hitting nameplate production capacity in Q4, will be exploration
results from the zone. That’s one side of AXU which hasn’t created much traction to date,
maybe that’s due a change now the company is in production. Fickle silver and its prices will
keep me on the sidelines looking in, for the moment. Those of you with more stomach for silver
mining companies are urged to look here first, however. AXU remains at the top of my list for
silver exposure, but not a buyer yet because its success or failure are too closely tied with that
of the silver price. AXU today is a good vehicle for speculation, less attractive as an investment.
Checking the financials at Minera Alamos (MAI.v)
Another place of patience is Minera Alamos (MAI.v), as this Top Pick stock may show our
position as a healthy win but, the current trading range has been boring and long-term. As
noted a few weeks ago, there is a limit to patience with this stock and the commissioning of
21
Santana is really here the rubber meets the road. The delays have been understandable, but
we’re now at the point where ROI needs to show.
The NR of July 21st (17) came and went without much comment last week, its reports of small
glitches and a minor commissioning delay due to heavy rainfall didn’t raise eyebrows at this
desk. Santana is an open pit heap leach operation, those tend to run on rails once the
troubleshooting stage is done, so from the start a NR talking about progress while noting issues
was expected. However, with the 2q21 financials
not expected until the end of the month, I
MAI.v: Cash treasury per qtr
doubled back and ask company President 30
Ramshaw about the current treasury position, as 25
this is one of the datasets companies are allowed
20
to tell third parties. His reply was current cash
15
(end July 2021) at C$15.4m, which makes for a
10
chart like this:
5
0
The number was surprising at first, some $4m
higher than the previous model, but is explained
by MAI cashing in around $4m of its Prime
Mining (PRYM) shares. MAI still holds some going
into Q3, but cashing out most at this strategically
important time is a smart move and underscores financial health. My assumptions above are
very conservative and assume MAI decides not to sell an ounce of gold during its
commissioning phase. Even then, they will come out of Santana with C$15m in treasury and
more than enough to start work on their other projects.
Updating the Harte Gold (HRT.to) side bet
Monitoring this now opened “Side Bet” trade in as brief a way as possible, we’ll use some bullet
points to get up to date:
I opened my trade first thing Monday morning and got 6.5c. It was the best price of
the week and I’m happy about that.
HRT then ran to 9c or so before flippers took intraday gains (as they should), but the
Friday close of 7.5c was fine.
Post close Friday, we got the required news (18) from the company. BNPP agreed to
forbear on its rights until the end of this quarter, which gives the other parties ample
time to reach an agreement, even if by that time they are only LOI stage.
The NR out Friday was required, and anything other than BNP being friendly would have been
bad news for HRT. Therefore, we can expect something of a rally in the stock tomorrow, but it’s
by no means out of the woods yet and the devil will be in the details of any deal. On that score,
though the message was repeated it’s worth a thought on this section of Friday’s NR:
To support the continuation of the strategic review process, the Company is actively
managing its liquidity and capital resources, including reducing certain sustaining
capital expenditures, which may adversely impact production over the next six months.
At this time, the Company is unable to provide updated guidance as the process
continues to evolve but believes its revised 2021 guidance, issued on May 13, 2021, is
at risk and may not be achieved.
The implication is clear, those that would take over the running of HRT at Sugar Zone don’t
care much for the current mine plan and
prefer the company saves its money,
even to the cost of affected gold
production. We leave you with a repeat
of one of the charts from IKN633, a
reminder that in strict financial terms
that 1.0458Bn shares outstanding at
HRT are worth bupkis. Our bet is that
22
61q4 71q1 71q2 71q3 71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 tse12q2 tse12q3
source: company filings/IKN ests
srallod
fo
snoillim
C$m HRT: Book Value, per qtr end
140
120
100
80
60
40
20
0
-20
-40
-60
4q17 1q18 2q18 3q18 4q18 1q19 2q19 3q19 4q19 1q20 2q20 3q20 4q20 1q21
source: company filings
Appian carves out its equity and if so, we get to free-ride the deal.
Belo Sun (BSX.to) gets hit by bad CSR publicity
Shares in Belo Sun (BSX.to) dropped sharply last week when Canada’s watchdog body ‘Mining
Watch’ turned its attention to the way it has been doing business in Brazil. Its Volta Grande
project has been source of long-term controversy and Mining Watch last week went into detail
about the way it has been covering up and outright lying about the state of its progress on
environmental and permitting fronts. None of which should come as much surprise to readers
of The IKN blog, of course, we’ve been covering this painfully poor company for many years,
including this August 2019 post explaining exactly why Volta Grande was in a permitting Black
Hole (19). And for full disclosure, we move into first person and underscore that I have posted
dozens of posts about this ne’er-do-well of a company over the years, with titles that include
“Belo Sun (BSX.to) is the poster child for everything that’s wrong in Canadian junior mining” so
I’m not trying to pick sides or remain neutral today, I wish all failure possible on BSX. At the
same time, please note I am not aligned with Mining Watch and its apparent long-term agenda
of wanting to close down all the mines in the world, their preaching and hand-wringing is for
somebody else. However, they also do real work alongside their agenda and in this case I
applaud, and loudly, that a large pressure group has brought more light to bear on Volta
Grande, as even the most ardent pro-miner would have to agree that removing bad apples from
their barrel isn’t a bad idea. Rant done.
There is a larger point to make, however: Last week saw BSX back at the levels achieved during
the first phase of a very expensive, long-term paid marketing campaign run via Stansberry
Research and John Doody (and even cynical me feels the need to use and underscore the word
“very”, it has by all accounts been one of Porter Stansberry’s largest ever personal wins) and is
now coming undone, the way all these fairytales do eventually. Whether via expensive
marketing campaigns or company claims and promises that stretch and spin facts to their limits,
there’s now a growing trend of CSR pigeons coming home to roost. Unfortunately for the
mining companies, the limits of CSR greater importance to CSR don’t stop at the convenience of
the industry and, with the greater transparency and better practices also come historical
examples of how it’s been done badly. BSX at Volta Grande is just one of those and just as one
person, your author has documented hundreds of cases of mining companies treating locals
with disdain and contempt over the years. Therefore, perhaps a valid exercise on portfolio risk
management would be for you, the reader, to use the IKN blog search engine (20) and check
names of companies in your own portfolio. Rather conceited of me but hopefully the point is
clear, IKN is just one resource of a great many. However and (finally!) to get to the larger
point, whatever name or acronym you give it, the trend of Social Emancipation means the sins
of the mining company’s past are now a potential threat to its share price future. Now is the
time to clean up your portfolio, before your portfolio cleans itself.
Some imported gold technical analysis
23
Reader and mailpal “SP” plays a more general market than just mining stocks. He also knows
far more about technical analysis than I, so his efforts over the years to gently educate me are
appreciated. We don’t always see eye-to-eye on his TA calls and I’ll push back at him with
fundamental arguments when required, but his unsolicited mail Friday was good enough to
share with this audience (and I may end up owing you money, SP). l leave you with SP on Au:
The RSI on the QQQ:GDX chart is again pointing to a bottom in gold. It's been almost
spot-on the last few years. The blue ovals (tops in RSI) point to bottoms in gold and
red ovals point to tops.
Not sure how it works but I've been paying attention to this indicator. It's been calling
intermediate term tops and bottoms in gold with regularity.
RSI has started to roll over again currently which on past behavior suggests a near
term low in gold. It's slightly after the fact as an indicator but RSI shows it's made the
turn.
Will this time be different? Don't know but we shall see. I'm positioned very long on
miners and a small short on the QQQ's.
Conclusion
IKN636 is done, we end with bullet points:
Pedro Castillo’s Peru is in for a rough few weeks, but the country is set up as a buy
from here. The Hard Left’s major mistake is to confuse their 19% election showing in
Round One for a mandate from the masses, there will be no groundswell of support to
save them.
Copper Mountain (CMMC.to) put in a great quarter, simple as that. Now making money
hand over fist, our thoughts turn to what it can usefully do with its new wealth and the
answer is Eva.
As for copper the metal, we seem to be heading for a showdown so bet the over and
24
don’t worry too much if you feel aligned with Goldman Sachs; it’s just a trade.
Argonaut Gold (AR.to) is the right place at the right time with the right story, I’m
starting to suspect I am too lightly positioned.
I thank you in advance for any feedback. Our Top Pick stocks are Minera Alamos (MAI.v) and
Rio2 Ltd (RIO.v). Flash updates will be sent if required by events.
I wish you good trading fortune, ladies and gentlemen.
Best, Mark
Footnotes, appendices, references, disclaimer
(1) https://www.calculatedriskblog.com/2021/07/schedule-for-week-of-august-1-2021.html
(2) https://cumtn.com/investors/press-releases/2021/copper-mountain-mining-announces-q2-2021-financial-3346/
(3) https://cumtn.com/investors/events/2021/
(4) https://cumtn.com/site/assets/files/4479/cmmc_q2_2021_conference_call_vfinal.pdf
(5) https://qccopper.com/news/qc-copper-intersects-100-metres-of-0.5-copper-eq-and-18.3-gpt-gold-over-9-metres-in-a-
single-saddle-zone-hole/
(6) https://webfiles.thecse.com/MIRL-NR-ExecAppointments-Jul27-2021.pdf?WiIOYagj9pd8bjvgq_2KHBWEMYndkUK1
(7) https://www.marketwatch.com/story/coppers-run-to-record-highs-may-not-be-over-yet-11627662700?siteid=yhoof2
(8) https://www.mining.com/goldman-recapitulates-5-a-pound-copper-price-by-end-2021/
(9) https://www.chakanacopper.com/news/2021/chakana-intersects-12m-of-massive-sulfide-with-27.39-copper-967.7-g-
t-silver-and-0.38-g-t-gold-at-soledad-peru/
(10) https://www.globenewswire.com/news-release/2021/07/29/2270832/0/en/Kirkland-Lake-Gold-Reports-Record-Net-
Earnings-in-Q2-2021.html
(11) https://larepublica.pe/politica/2021/07/30/pedro-francke-juro-por-la-concertacion-nacional-y-la-igualdad-de-
oportunidades-mdga/
(12) https://co.linkedin.com/jobs/view/hrbp-at-anglogold-ashanti-colombia-minera-de-cobre-quebradona-
2661694847?refId=N8%2F%2B3PZRo77Gg%2FdJtNek5g%3D%3D&trackingId=4kWF8e9xCgRF1Q3XfNWDfw%3D%3
D&position=1&pageNum=0&trk=public_jobs_jserp-result_search-card
(13) http://latinamericadailybriefing.blogspot.com/2021/07/guatemala-anti-corruption-prosecutor.html
(14) https://en.wikipedia.org/wiki/2021_Nicaraguan_general_election
(15) https://event.webinarjam.com/register/17/2n6g3i5
(16) https://mailchi.mp/kuyasilver.com/watch-david-stein-sits-down-for-interview-with-snn-network-
6160862?e=bc5b07049f
(17) https://mineraalamos.com/news/2021/santana-project-operations-update-2021-07-21/
(18) https://www.newswire.ca/news-releases/harte-gold-enters-into-forbearance-agreement-with-bnpp-846261068.html
(19) https://iknnews.com/what-john-doody-is-not-telling-you-about-belo-sun-bsx-to/
(20) https://iknnews.com/?s=%22Belo+Sun%22&orderby=post_date
25
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
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
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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
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
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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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