6 The IKN Weekly, issue 641 — Sep 06, 2021
The IKN Weekly
Week 641, September 5th 2021
Contents
This Week: Trade heads-up, In Today’s Edition, A good week for gold is not a good week for
everybody.
Fundamental Analysis: Mene (MENE.v) 2q21 financials, Three Sales (Selling Wolfden
Resources (WLF.v), Amarillo Gold (AGC.v) and Cartier Resources (ECR.v)).
Stocks to Follow: Wolfden Resources (WLF.v), Amarillo Gold (AGC.v), Cartier Resources
(ECR.v), Argonaut Gold (AR.to), Rio2 Ltd (RIO.v), Minera Alamos (MAI.v), The Copper Stocks
(Including Trilogy (TMQ), Copper Mountain (CMMC.to), Excelsior (MIN.to), QC Copper & Gold
(QCCU.v), Aldebaran (ALDE.v)) Royal Road (RYR.v).
Copper Basket: Overview, Regulus Resources (REG.v), Aldebaran Resources (ALDE.v),
Amerigo Resources (ARG.to).
Producer Basket: Overview, Kirkland Lake (KL).
Tiny Dogs: Overview, Red Pine Exploration (RPX.v)
Regional Politics: Chile sees water issues.
Market Watching: Tracking the Buy Peru call, Orezone (ORE.v) redux, New Gold (NGD)
redux, Beaver Creek this week, Harte Gold (HRT.to): An eye on the side bet, A heads-up on
Kingfisher Resources (KFR.v), Minera IRL (MIRL.cse): Concerned Shareholders (3).
I remind subscribers that no part of this newsletter can be copied, reproduced or
given to any third party without the express permission of the author.
This Week
“
Trade heads-up
As any good gardener knows, necessary pruning of one’s plant allows it to grow back, healthier
and stronger than before. It’s time for some overdue sales of under-performing positions here
at the Weekly, with three of our smaller trades now closing. Please see today’s main
Fundamentals section for more on the decisions to sell Cartier Resources (ECR.v), Amarillo Gold
(AGC.v) and Wolfden Resources (WLF.v).
Also, please note tomorrow September 6th is USA Labor Day. While not holiday in Canada, it is a
market holiday and there is no trading tomorrow. This gets mentioned as a reminder, while I
contemplate three sales in the next few days: There’s no need to take the first price offered by
a market, even when a dumb newsletter writer sells. I won’t be in a rush to hit any bid and
neither should you, ultimately the only person who can protect your money is yourself.
In Today’s Edition
Mene Inc (MENE.v) is worth more attention from this audience, so I’m not shuffling it
down to Market Watching. Today’s main Fundies section highlights another good
quarter from a growth story like no other. As long as human beings keep wearing gold
on their bodies, sales growth happens here.
This weekend has a loose theme of portfolio management and the main event on that
is the decision to sell three open positions. Today’s main fundies sections explains why
1
ECR, WLF and AGC are closed positions, as from next weekend.
Not every reader follows the section as closely, so today here’s a heads-up to please
take in The Copper Basket and in particular, the developing story of SHFE inventories
as they belie the current round of China Fear with hard data.
Continuing the portfolio management theme, plenty of sections in ‘Market Watching’
this week, but most are short and connected to ongoing stories. The exception is
Kingfisher Resources (KFR.v), which made an interesting market move last week on
equally intriguing news. A company I checked out earlier this year without ever buying,
it gets a heads-up today.
The Minera IRL (MIRL.cse) story should now mostly go off-weekly, which will be a relief
to many of you.
A good week for gold isn’t a good week for everybody
A good week for the metals and mining complex, with gold adding to its gains of the previous
week and performing to type on Friday. GLD added 0.51% on the week, while both GDX and
GDXJ round to +2.1%. However, added to this ten-day chart of those usual suspects, I’ve
added silver-the-metal (proxy SLV) and the silver mining stocks (proxy SILV) to show how the
classic leverage of lower to higher risk mining plays paid off:
Looking back, the intro section of last week’s IKN640 did a good job: We highlighted the likely
influence of the US Jobs report, we noted once again how Jay Powell uses “Taper Talk” to
control the USD, we speculated that gold was
still looking good at U$1,800/oz but with less
chance of moving up from here. But stop,
we’re U$1,827/oz this weekend and that last
one may be wrong. If so I won’t mind, so let’s
consider why gold shifted away from the 1800
line. That was mainly a Fear Trade move on
Friday, the jobs number a bucket of cold
water for the hot stock market. The headline
of 5.2% was expected, but NFP additions of
235,000 jobs was a mile behind 750k+ market
expectations and the market reacted
accordingly, though on these pages we care
about bullion most (right).
Gold popped Friday after spending the week asleep and the near-term money parked at GLD
continued to be nervous about other things (see IKN640). We saw enough further liquidation to
push its inventories to below 1,000 metric tonnes (mt) for the first time since April 2020:
2
8.20 GLD: Inventory/Price Ratio, 2016 to date
8.00
7.80
7.60
7.40
7.20
7.00
6.80
6.60
6.40
6.20
6.00
5.80
5.60
Why should we care about that Inventory/Price ration chart so much? The simple answer:
Right now, Wall St is selling gold
Right now, the gold price is going up
Wall St tends to notice when something goes up in value
The same Wall St desks will buy their gold back, because they always do
Not exactly Frank Holmes’ ‘Love Trade’ and more Gordon Gecko’s greed trade, but the result is
the same.
Fundamental Analysis of Mining Stocks
Mene Inc (MENE.v) 2q21 financials
On schedule last Monday, the only non-mining company covered at The IKN Weekly and the
exception to a strict rule, Mene Inc. (MENE.v), filed its 2q21 financials and MD&A. As noted in
several places along with last week, my plan was to cover this non-miner in the ‘Market
Watching’ segment of the Weekly and that’s been largely the case, however this time I want to
make sure you all see this company and what it has to offer, because as long as the market for
luxury retail holds together, this year is probably the last time you’ll get the opportunity to own
MENE stock at under C$1.00. Its 2q21 financials didn’t set the world on fire, but a look under
the hood shows how well this company is
developing, all on a solid financial footing
that will need no further capital raising.
Also, with three years of sales data behind
us we can make better guesstimates about
what’s to come, so today is also an updated
idea of the forward guidance we can now
place on the stock. It’s reasonable, it’s
wholly achievable and it makes MENE look
like the bargain it is.
And with a reminder of the near-three-year
chart of MENE from its IPO to date (right),
we begin:
Sales and operations: The other pleasant part about writing up a luxury retailer of high
quality gold and precious metals jewelry instead of a mining company is that it’s books are
simple to read, its results cut and dried. Sales are sales, costs are costs and we all know the
role of its inventory accounting.
3
61/4/1 61/61/3 61/62/5 61/8/8 61/81/01 61/92/21 71/41/3 71/42/5 71/4/8 71/61/01 71/72/21 81/21/3 81/22/5 81/2/8 81/21/01 81/42/21 91/8/3 91/02/5 91/13/7 91/01/01 91/02/21 02/5/3 02/51/5 02/82/7 02/7/01 02/71/21 12/3/3 12/11/5 12/22/7
GLD gold holdings, 2020 to date (metric tonnes)
1400
1350
1300
1250
1200
1150
1100
1050
1000
950
900
Source: SPDR data, IKN calcs 850
800
02/1/1 02/2/1 02/3/1 02/4/1 02/5/1 02/6/1 02/7/1 02/8/1 02/9/1 02/01/1 02/11/1 02/21/1 12/1/1 12/2/1 12/3/1 12/4/1 12/5/1 12/6/1 12/7/1 12/8/1 12/9/1
mt
source: SPDR GLD data
Therefore we eschew gold inventory fluctutations and are less interested in sales by weight,
today we stick to the financials and a straight examination of Q2 numbers, starting with sales
and costs:
MENE: Revenues per qtr
8 7.117.203
7
5.754
6 5.157 5.423
4.654
5
4 3.51 3.218 3.439
3
2.7332.457
1.986
2 1.039 1.393
1
0
4
81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2
C$m
source: company filings
Sales were never likely to reach the numbers seen in the high sales season that revolves
around the Holiday Period, but C$5.754m was nobody’s idea of a blowout, either. So with sales
no better than acceptable, we move to costs (below) and a reminder of how MENE reports its
drag; it splits it between “COGS” (e.g. the physical gold in its pieces) and “operating expenses”
(skilled jewellers, design, website, office G&A, etc). In Q2 the aggregate came to C$5.654m:
MENE.v: Costs breakdown
976.1868.0 424.1361.1
998.1
777.1
757.1
725.2
255.2
450.2
38.1
159.1
867.1
465.2
997.2
557.3
127.1
441.4
582.1
125.2
133.1
548.3
319.1
914.5
35.1
664.5
34.1
422.4
8
7
6
5
4
3
2
1
0
81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2
$m
COGS operating exp
source: company filings,IKN ests
Here’s the skinny: MENE did a great job of keeping a lid on costs. Though it was the Covid
affected quarter, we can draw a YoY comparative and note how MENE manages to move
C$1.7m more stock, but that only cost them C$150k I extra op-ex. We’d expect opex to expand
again come 3q21 and 4q21 as inventory gets built and extra orders are fulfilled for the Holiday
period, but all indications are that MENE is watching cost inputs like a hawk.
We like that, and it means MENE turned another operating profit on the quarter, a thin C$0.1k
but an op profit all the same. While net earning was again slightly in the red, that line item is
the least consequential of the lot and the news MENE has maintained breakeven is the
takeaway, as we ask no more of a fast growth story.
1 MENE.v: Operating income, per qtr
0.5
0
-0.5
-1
-1.5
-2
-2.5
81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2
C$m
source: company filings
Regarding that and as a segue to the balance sheet section below, here’s an updated
guesstimate of how the #1 key metric:
MENE:v: Revenues per qtr
5
40.1 93.1
99.1 15.3 37.2 64.2 22.3
56.4
61.5
44.3
24.5
11.7 02.7
57.5
00.7
00.9
05.7 00.7
00.01
00.31 16.0
14.0
12.0
10.0
8.0
6.0 4.0
2.0
0.0
81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 tse12q3 tse12q4 tse22q1 tse22q2 tse22q3 tse22q4
C$m
source: company filings
This weekend I caught up with CEO Roy Sebag and after failed to get any non-public
information about the company, but by asking his views on the Q2 performance, how he sees
the rest of the year and also the plans for further expansion, one gets to read between the
lines to see the corporate strategy, as well as a likely rhythm of sales. Once added to previous
results and then my own guesses on top, we arrive at a MENE which should easily sell C$7m in
good during the current quarter (but I have pitched low), then another reasonable target C$9m
for the key Christmas period. Further out, 2022 should be about first quarter sales consolidation
and preparation to take advantage of what’s becoming it’s clear sales cycle, building company
infrastructure in the first half of 2022 in order to expand sales later.
If that sales pattern hits the mark on every quarter it would be a surprise, but the important
point is at the right-hand side: With MENE now financially stable and needing no extra capital,
it’s ready to move into its second phase of growth. This second chart below only adds the 2021
forecasts, but gives an idea of the margin and continued operating profit we expect:
MENE:v: Revenues and gross profit, per qtr
9.00
7.11 7.20 7.00
5.16 5.42 5.75 4.65
3.51 3.22 3.44
2.73 2.46 1.99 1.04 1.39 71.0 32.0 12.0 89.0 86.0 06.0 00.1 04.1 10.1 29.0 85.1 96.1 47.1 35.1 07.1 00.2
10.0
9.0 8.0
7.0 6.0
5.0
4.0 3.0 2.0
1.0
0.0
-1.0
-2.0
81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 tse12q3 tse12q4
C$m
revenues
gross profit op profit
source: company filings
Further out, the key metric will be sales and after getting a better feel for the direction in which
CEO Sebag would like to take his company, we can confirm he’s very keen on not diluting the
share count any further. If a capital injection comes from
another place then all fair and good, but assuming MENE MENE: Projected annual sales path
grows organically this is how I’m looking at the company,
for the next three years. For sure more speculative, but by
equal measure nothing shocking there, a simple
progression of a successful business model is all you need.
However, at C$50m annual sales MENE stops becoming a
nominal start-up; by that time it will be an established
name, with a brand gaining in value all the time.
That will eventually show up here on the balance sheet
and indeed, C$0.9m of the “other” column for 2q21 is
31
12
92
83
05
C$m
55
50
45
40
35
30
25
20
15
10
5
0
2019 2020 2021 2022 2023
source: company filings, IKN ests
intangibles. In other words, MENE is starting to give a dollar value to its brand.
MENE.v: Assets, per qtr
50
45
40
35
30
25
20
15
10
5
0
6
81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 tse12q3 tse12q4
$m cash inventories ST Inv other
source: company filings, IKN ests
As for the other parts of our overview balance sheet charts for assets (above) and liabilities
(below), the main points are 1) company growing just fine 2) liabilities now minimal, the $10m
outside the friendlies of “friendly debt” with mothership company Goldmoney, and 3) the
projections into the next two quarters show further strengthening.
MENE.v: Liabilities Breakdown per qtr
40
35
30
25
20
15
10
5
0
81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 tse12q3 tse12q4
source: company filings/IKN ests
srallod
fo
snoillim
note payable
other liab
borrowings
The two next charts show the important bits of the MENE balance sheet: Below left
Cash/Inventory is in good shape, the company has found its required liquidity level (around
C$3m) and from that, will be able to better build inventory in the current quarter. That gets
turned into cash in Q4 (and beyond).
MENE.v: Cash & inventory
35
30
25 12.3
20 15.6 12.6 14.9 17.0 15 15.0 9.5 14.3 17.9 17.4 19.5
10 13.7 17.5 10.2
5 10.3 12.0 13.0 8.7 9.1 8.0 0 2.1 4.3 5.1 3.0 3.3 2.0
However, it’s notable that even as inventory value and cash treasury largely flatlined between
1q1 and 2q21m, equity continued to rise, up another C$1.1m. That’s a company looking after
its balance sheet and looking beyond treasury to improve its financial position. It’s that chart,
showing how MENE is now expanding even as results suggest breakeven, which points to the
future of the company. MENE is ready to expand and the assumptions are lowball, as Q4 sales
may see more equity added quickly.
81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 tse12q3 tse12q4
$m MENE.v: Equity per qtr
inventories
cash
source: MENE filings, IKN ests
324.81 4.71 721.51 123.41 188.21 791.21 913.01 279.51 201.71 7.81 4.02
22
20
18
16
14
12 10 8
6
4 2 0
91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 tse12q3 tse12q4
source company filings/IKN ests
srallod
fo snoillim
As for MENE the stock, we’ve seen it pick up and perform well recently, with persistent buying
support at this 80c level and ceiling at 85 (so far). That won’t last forever, it’s not just goldbugs
and hard money people that are naturally attracted to such a company, its cross-sector appeal
as a luxury good play brings brand attraction, it’s internet-only sales platform success will appal
to the tech sector. At 254.63m shares out this weekend’s stock price of C$0.82, MENE this
weekend has a market cap of C$226.6m (approx U$181.3m) with near-unlimited upside
potential. As for the share price potential in medium term and looking a year out, a clear
milestone would be to leave 2022 with at least C$38m in sales. By that time, with an regular
operating profits and positive free cash flow guaranteed, brand value increases between them
the combination add lumps to equity every quarter instead of the current $1m or so. This
company is in the right place at the right time and ticks all the boxes required for success in the
2020’s: Glamorous, high-end luxury retail catering to a new audience unafraid to spend online,
MENE is the jewelry company built for social media: It uses influencers to sell, it relies on the
positive word of mouth it gets from the vast majority of clients (who return, time and again) via
no end of channels, and of course Instagram to feed the envy of others . Above all, in Roy
Sebag and his team, MENE has people building the company the right way. I know I’ve
mentioned this before, but after watching how so many explorecos are run, it’s a sight for sore
eyes to see how a small growth story can be run in a financially prudent manner, with people
not trying to react to the latest piece of news but planning their financial requirement often
years in advance. These traits show, and MENE has the right money brains to back up its
successful business model
As for a target price, it’s difficult to put a target on something that is only projected to continue
up but a reasonable mid-range target would be to see C$2.00 by the end of 2022. By that time
MENE.v should be turning a real profit, that would make for a virtuous circle of faster sales
expansion so if you’d like to buy some now and get off at +150%, it would get no dissnt from
me. Personally I will continue to add in modest tranches when the occasion arises and not sell a
single one, because by owning some MENE I may end up with a slice of the next Tiffany’s.
Three sales (ECR, WLF, AGC)
Your author can hardly be accused of hiding the fact that come September, he was looking to
pare the portfolio down to size. Today is the day and, while Aurelius (AUL.v) misses the cut
today and gets until its 43-101 to impress and improve on its dismal performance to date, there
are three other stocks that will move to “closed positions” as from next weekend in the IKN
Weekly ‘Stocks to Follow’ list. They are Cartier Resources (ECR.v), Wolfden Resources (WLF.v)
and Amarillo Gold (AGC.v) and I expect to take a loss on two, with AGC coming out as a wash.
In other words, three failed trades. However, a few words on why (I believed) they didn’t work,
mistakes made and the reasons to close at this time are in order, so that’s what you now get:
Selling Cartier Resources (ECR.v)
This is the post-mortem that gets least time, because we’ve picked over this failed trade several
times in recent weeks, mostly with my Grumpy Hat on. The issues began literally the day after I
opened position, ECR announcing a resource update that pushed Chimo over 2m oz Au thanks
to style as much as substance. Since then the
stock has failed to show any momentum and a
singular lack of the “competitive tension” we were
promised, as some third party tried to snatch the
asset from under the noses of Agnico (AEM).
Instead the company has started the second cycle
of development and is now repeating the strategy
at Benoist, which makes perfect sense until buyers
and interest arrive for such mine assets. Long-
term, ECR will be fine and its management team’s
impeccable focus on costs and dilution (or lack of)
7
means it will remain a successful example of this business model. The problem is, none of the
internal progress or improvements mean a jot if they don’t move the share price and to do that,
ECR needs to sell Chimo and as there’s precious little sign of that happening, it’s time to leave.
If I am unfortunate and CEO Cloutier closes a sale while I’m on the sidelines I’ll eat my words
and so be it, but ECR is dead money until then.
Selling Wolfden Resources (WLF.v)
There are some company reasons as to why LF hasn’t performed well this year. They include
the continuing permitting overhang, a lack of sparkling drill results, we also got an exploration
and project development update from WLF last week (1) that covered all three of its projects,
including flagship Pickett Mountain in Maine USA, as well as New Brunswick and Manitoba
Canada. At Picket Mountain, the company reports waiting on one final hole before it can
complete its resource update, that should be with us this month and part of the reason to sell
now is to be in front of that liquidity window. That’s because the main reason for WLF’s poor
showing isn’t connected to the company:
Nevada Zinc, Fireweed Zinc, Tinka Resources, Wolfden. Yes, WLF sagged more than the others
in the last few weeks, likely because it held out
better than most for six months. The Zn market
has been another dumpster this year and as that
was the main reason to buy into this spec vehicle
on the metal, this is a simple case of getting the
trade wrong. thought zinc metal prices would
move up sharply in 2021 and take the Zn miners
with it, that was a bad call. As a result, WLF is
chalked up to experience, with the lesson learned
that nobody cares much about zinc.
Selling Amarillo Gold (AGC.v)
If it weren’t for today’s decision to sell, we would run through the basic points of the AGC
financials as posted last week. Instead they can be covered by a wholly truthful “in line, no
surprises” and be done as instead, our decision is indeed to sell and close the position.
The reason came last week and is contained in the MD&A, as well as the cover NR for the
financials (2) entitled “A quarter of progress and consolidation for Amarillo”. To its credit, AGC
was front and centre with its change in financing plans and put them at the top of the NR,
here’s the key segment:
“Our goal is to find the right financing option for our shareholders,” said Mike Mutchler,
Amarillo’s Chief Executive Officer. “We want to make sure that our ultimate choice
8
minimizes dilution and maximizes return for our shareholders.”
“We’ve continued to make great progress at Posse,” added Mutchler, “and launched a
successful exploration program at Lavras do Sul, our second property, where our goal
is to open a second development front.”
As Amarillo reported last quarter, the Company had an exclusivity arrangement with an
established financier that expired at the end of March. Under that arrangement,
Amarillo completed significant technical due diligence, a process that raised no red
flags. However, the Company chose not to extend the exclusivity, so that it could
explore whether there would be other financing options available that would be better
for Amarillo. Over the course of the arrangement, Amarillo has significantly de-risked
the project, and as such, believes that it could get better terms than were originally
contemplated.
Amarillo continues to explore all its options. This process is by nature unpredictable, so
it’s difficult to set timelines around how long it will take, though Amarillo believes this
approach will result in a better outcome for shareholders in the long term.
No need for an Ottotrans, the message they are talking with new financier/s and that they will
need more time to close the deal is easy to infer. Despite that, the stock price did well last
week and found buyers on sporadic volume…
…enough to re-establish the price above 30c (and my own position back from underwater).
However, context is required and that comes from the YTD chart:
While considering the chart, we recap:
First, we made our purchase decision in late May, a special situations trade to take
advantage of market games played around the AGC warrants’ expiry date (most of
those held by Eric Sprott).
We then waited for the promised financing deal, expected delivered by October and led
by Sprott. As seen on the above charts, late July saw a big volume day, just afterwards
AGC sinks under the 30c line once again. To remind readers, 30c was our baseline
assumption for the financing, that line put in by Sprott’s own participation.
Last week with its Q2 numbers, AGC announces it’s no longer exclusive with the
9
previous financing entity and believes it can find a better deal elsewhere.
The subsequent analysis is not rocket science, the conclusion not difficult to draw: The reason I
bought my AGC position was due to a specific, cheap price available that would allow me to
trade Sprott’s financing, due October. The entry price was better for some of you than me, but
my 31c average was easy to hold in this three month period. We now know the Sprott-led
financing isn’t happening and AGC said in last week’s literature it might need some more time
to close any deal, even on better purported terms. As this is a small position, its reason to hold
has now changed substantially and, as luck would have it, it seems the new owners of those
shares/new financiers are also keen to keep the price above 30c. I will therefore take
advantage of their kind offer and sell my position next week, hoping the company proves me
wrong and compels me to buy back in later. Once they have a deal to build Mara Rosa/Posse,
expect my further attention.
Stocks to Follow
Our portfolio of stocks did well. While GDX and GDXJ both rose by a respectable 2.1%, our list
saw ten solid winners from 17 open positions. Not listing them all, just the biggest moves in
Aldebaran (ALDE.v up 22.0%), Amarillo (AGC.v up 16.4%), Royal Road (RYR.v up 11.1%) and
yes, a mention for the peppy 7.9% added by Argonaut Gold (AR.to). Meanwhile the list did
have five losers (CMMC.to, TMQ, ECR.v, AUL.v, MENE.v) and two unchanged stocks (SMD.v,
WLF.v) so we’re not claiming one-way traffic, just a good week.
We currently have 17 open positions, that is likely to change soon. Six are in the green and the
others are in the red, but that balance can shift back in our favour in days. This is junior
mining, after all.
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$0.62 195.2% $1.14 tgt Aug'20, #1 idea
Rio2 Ltd. RIO.v STR BUY C$0.83 22-Apr-18 C$0.69 -16.9% $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$3.25 -7.4% reaffirmed buy on strong Q2
Argonaut Gold AR.to STR BUY C$2.95 25-Jun-21 C$3.29 11.5% All right signs, added more
Trilogy Metals TMQ BUY U$1.84 15-Sep-19 U$2.00 8.7% Cu for 2021, going well
Amarillo Gold AGC.v SELLING C$0.31 30-May-21 C$0.32 3.2% Story has changed; a wash
Strategic Metals SMD.v hold C$0.42 31-Jan-21 C$0.31 -26.2% Canadian land bet/Value trap?
Excelsior Mining MIN.to BUY C$0.93 10-Mar-19 C$0.62 -33.3% Delayed, but still great value
Aldebaran Res. ALDE.v BUY C$0.68 16-May-21 C$0.72 5.9% Bet on big copper, pol risk ok
QC Copper &Gold QCCU.v BUY C$0.205 25-Apr-21 C$0.175 -14.6% Cu Jr, fast-tracking resource
Royal Road Min. RYR.v BUY C$0.155 17-Mar-19 C$0.30 93.5% Model paying off in Nica
Wolfden Res. WLF.v SELLING C$0.30 11-Apr-21 C$0.19 -36.7% Time to cut losses
Great Bear Res GBR.v BUY C$15.83 26-Aug-20 C$13.58 -14.2% Binary M&A trade, wait for print
Cartier Resources ECR.v SELLING C$0.32 21-Mar-21 C$0.24 -25.0% Folding a loser
Aurelius Min. AUL.v hold/sell? C$0.75 28-Jun-20 C$0.355 -52.7% has until its 43-101 to improve
Minera IRL MIRL.cse hold C$0.195 22-Jul-12 C$0.085 -56.4% 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
10
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 a couple of our covered stocks:
Wolfden (WLF.v), Amarillo (AGC.v), Cartier (ECR.v): Selling. A line here to confirm the
decision as seen above, time to cut these under-performers and get back inside the rules. We
do a brief post-mortem in today’s main Fundies section on the stocks, above all to consider
mistakes made and how to avoid them next time. Ultimately, these were smaller positions, with
AGC a wash and ECR a clear loser, but nothing that hurts too much. As for WLF, part of the
strategy would have been to scale in as the story gained momentum. That comes with its own
insurance policy; we didn’t scale in. The real world financial hit is small.
Argonaut Gold (AR.to): ADDED: I took the liberty of adding a few AR.to last week, a small
tranche that moved my cost average up 4c to C$2.95. Last week’s table-bang came at the right
time and AR moved back to its next level of technical resistance , around C$3.30 to C$3.40.
Before those are beaten, there’s no breakout and every price you see is an excellent bargain.
Rio2 Ltd (RIO.v) and Minera Alamos (MAI.v): We’re lumping the two Top Picks together
this weekend, because they coincidentally show
the same trading action. Two weeks ago, they
both rose nicely without being market stars. Last
week the same, both up nicely but neither
grabbed the headlines, but it’s the combination of
the last two weeks that matters (right). I like that
a lot, coming as it does through the start of real
news periods for both of our Top Picks. I have
preached from the book of patience for both these
trades, they are now showing the right signals.
Both at the same time? I don’t see why not!
One paragraph dedicated to Minera Alamos
(MAI.v), however. Last weekend’s call on MAI.v’s
2q21 financials and MD&A, as filed post-close that Friday and written up in IKN640, was in the
first paragraph, “…there’s little of market-moving news contained in the figures.” That’s how
the market took the numbers as well, presuming a reasonable ramp up going forward, then a
Santana impressing us with early production growth data as we leave 2021. All good, and
finally let’s note that there’s always a panicky weak hand out there, no matter what stock as I
was watching the ticker as somebody dumped 20k MAI shares into a 58c bid. The buyer got an
excellent bargain.
Strategic Metals (SMD.v): For a while SMD threatened a recovery rally last week, with
buyers coming for the stock on Tuesday as SMD announced its latest deal (3). They have 40%
(plus a residual via Silver Range) of the newly created Broden Mining and rather than fake
knowledge, here are the first two paragraphs of last week’s NR:
Vancouver, B.C. – August 31, 2021 – Strategic Metals Ltd. (TSX-V: SMD) ("Strategic"
or the "Company") announces that it owns 40% of the outstanding shares of Broden
11
Mining Ltd. ("Broden"), a private company that is working with Ross River Dena
Council ("RRDC") to complete the acquisition of a large package of land ("Vangorda
Lands") in the Faro mining district, southern Yukon (Figure 1). The Vangorda Lands
host several deposits containing zinc, lead, silver and other valuable metals, and there
is excellent potential for additional discoveries.
"Strategic and its partners have been working on this acquisition for several years and
we consider it to be one of, if not the most important milestones in the history of the
Company," states Doug Eaton, CEO of Strategic. "The deposits on the Vangorda
Lands are some of the largest and richest zinc-lead-silver prospects in Canada and
they benefit from excellent infrastructure. We anticipate working closely with our
partners to bring this important mining district back into production."
Most interesting and deserving of interest, but even SMD
with this news couldn’t hold the volume. By the close, all
it took was a desk or two to close out positions to drop it
back to UNCH on the week.
I am non expert on Canadian lands, which is why I won
SMD and let the experts do the work for me. If Doug
Eaton likes The Vangorda Lands, that is good enough for
me and the “patient holder of SMD” status is confirmed.
The only other choice is to sell, after all.
The Copper Stocks (Including Trilogy (TMQ), Copper Mountain (CMMC.to), Excelsior
(MIN.to), QC Copper & Gold (QCCU.v), Aldebaran (ALDE.v)): Here’s how our group of
copper-exposed juniors have done over the last two weeks:
Clearly a bias to the more speculative in the bunch, with more established names with regular
liquid volume feeling more drag from the volatile copper price action. Regarding the suddenly
perky QCCU, while we wait for Opemiska’s “maiden resource” (a slight stretch as a title, but it’s
fair) you may want to consider the latest corporate presentation, dated last week (4). I’m now
expecting the QCCU 43-101 resource to show the week after next, rather than this week. That
means if you want to get on board with a better cost average than me before the catalyst hits,
you have five trading days to do so.
Royal Road (RYR.v): A strong week for RYR and another barn-buster NR from the Caribe
project in Nicaragua (5), where they have found an at-surface, low grade gold deposit as part
of their JV exploration agreement with Hemco (Mineros SA). All questions are now about size,
as despite its remote location the grade and easy access make this a lay-up as a future mining
operation if they find enougn rock. The difficult and boggy drilling conditions (a river runs right
past the location, luckily not a big one and diversion wouldn’t be an issue in an eventual mine
plan) slow things down, but when RYR gets to the end of a hole it gets assays like this:
ROYAL ROAD INTERSECTS 207 METERS AT 1.1 GRAMS PER TONNE
12
GOLD AT ITS CARIBE DISCOVERY; NICARAGUA
That adds a lot of size and the stock duly popped higher. The bullet point highlight holes further
down includes these lines…
CB-DDH-025 207.45 meters at 1.1 grams/tonne gold (including 21 meters at 4.1
grams/tonne gold)
CB-DDH-027 31 meters at 1.0 gram/tonne gold
CB-DDH-029 37.8 meters at 1.0 grams/tonne gold
…as well as suitable CEO comments on this exciting discovery. Ever since its discovery, RYR has
supposed Caribe to be distal to some larger event for some time and much of its geological
detective work has been trying to work out where a larger structure may be located. With this
NR, they have decided to move North and test a few specific targets, we wish them fortune.
The Copper Basket
After thirty-five weeks of 2021, The Copper Basket shows a gain of 28.55% 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 1308.64 12.17 100.2%
2 Copper Mtn CMMC.to 1.81 207.5 674.38 3.25 79.6%
3 Oroco Res OCO.v 1.85 186.96 497.31 2.66 43.8%
4 Marimaca Cop MARI.to 3.25 87.737 351.83 4.01 23.4%
5 Western Copper WRN.to 1.57 135.798 296.04 2.18 38.9%
6 Amerigo Res ARG.to 0.80 181.79 234.51 1.29 61.3%
7 Excelsior Min. MIN.to 1.12 273.585 169.62 0.62 -44.6%
8 Regulus Res. REG.v 1.07 101.85 95.74 0.94 -12.1%
9 Aldebaran Res. ALDE.v 0.455 125.24 90.17 0.72 58.2%
10 C3 Metals CCCM.v 0.115 438.56 74.56 0.17 47.8%
11 Doré Copper DCMC.v 1.00 53.304 46.91 0.88 -12.0%
12 Element 29 Res ECU.v 0.45 68.281 38.24 0.56 24.4%
13 Chakana Cop PERU.v 0.60 111.41 36.77 0.33 -45.0%
14 Chibougamau CBG.v 0.165 53.077 12.74 0.24 45.5%
15 US Copper USCU.v 0.105 87.53 10.94 0.125 19.0%
NB: All stocks in CAD$ Portfolio avg 28.55%
A positive week for The Copper Basket, the average jumping over 5% thanks to ten winners
versus five losers and no UNCH stocks, so we
60% The Copper Basket 2021, weekly evolution
list the losers (CMMC.to, MARI.to, PERU.v, 55%
ECU.v, USCU.v) and then highlight the biggest 50%
45%
of the winners, including Aldebaran (ALDE.v
40%
up 22.0%), Doré Copper (DCMC.v up 14.3%), 35%
30%
C3Metals (CCCM.v up 13.3%) and Regulus
25%
(REG.v up 11.9%). On the whole, the smaller 20%
15%
copper explorecos did better than the larger
10%
explorecos or the producers on the list, plenty 5%
of industrial names took a knee-jerk hit last 0%
week, first on the drop in copper prices and
then on the soft US jobs number which hit
everyone, no matter whether copper, carbon
or ceramics.
In Macro news, the 30kmt of copper auctioned by China’s strategic stockpile people did what
13
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source: IKN calcs
you see to this copper chart:
Later in the week, China’s Producer confidence index (PMI) dropped under 50 and the bear
threshold to read 49.2, with July’s reading also adjusted down to 50.1. The only other time
China’s PMI reading has been under 50 (in living memory) was April 2020 and the height of the
Covid-19 crisis, so make of that what you will. This desk’s best comment on that is the
swooping arrow above, scribbled in red on the chart, as copper climbed its very own wall of
worry to close all-but UNCH on a week when the bears threw the kitchen sink at the metal.
The reason copper continues to be so resilient is almost certainly contained in the cruel reality
of SHFE warehouse data. The SHFE numbers dominate the data, signalling a tight market for
copper in China like no other. Here’s the weekly rundown, data as always supplied by Chile’s
Cochilco:
The aggregate copper tonnage for the three official world systems dropped by 14,910
metric tonnes last week and it should not do that. This weekend’s total is 367,598mt.
The SHFE provides all the fireworks, as despite that apparent 30kmt delivery of stock to
Chinese end-users, SHFE warehouses saw a drawdown of 13,112mt into an already
very tight number. This weekend, stocks at SHFE warehouses total 69,278mt, basically
a historic low and we’re still three full months from the traditional drawdown low. The
dedicated charts below have more ideas
There was no arbitrage with the LME either, its own stocks down 2,025mt to close at
252,225mt. What’s interesting about the LME total is how 156,250mt of the total is
housed in its Rotterdam warehouses, far from the market that most needs the metal.
The Comex added an inconsequential 227mt, to close the week at 46,095mt.
Here’s the Shanghai-only inventories chart, the non-stop drop now threatening the 50kmt line:
Shanghai Futures Exchange Warehouse Stocks, 2014 to date
400000
350000
300000
250000
200000
150000
100000
50000
0
14
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
This newer chart is easier to read and shows how under normal circumstances, stocks go
though a period of calm this time of year before the draw-downs into November and December.
MT Cu SHFE copper inventory levels, 2018 to 2021 Jun to Sept
300000
250000
200000
150000
100000 2021
2020
50000 2019
2018
0
20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
source: Cochilco data
Not true for 2021, week 36 sees the drop accelerating. This is the type of signal you cannot
fake, copper supply is now moving toward distressed levels for the world’s largest end-user of
the metal. I cannot understate how bullish that is, now for some notes on covered stocks:
Regulus Resources (REG.v) and Aldebaran
Resources (ALDE.v): We called these moves right,
at least:
Last week saw the money come back into these sister
companies, and C3 Metals (CCCM.v) as well if you’d
like to add the cousin company (Fernando Pickmann
the connection there). However, once again REG has
decided to “play the social media” and disseminate
information via chats and off-record phone calls with
high traffic mining accounts. This time it was “The
Wealth Miner, Ben Kramer Miller, and either he’s
getting paid for this propaganda or he doesn’t realize
how he’s being used (6):
If this were a supplementary way of informing shareholders, it wouldn’t be a problem. But this
is the ONLY way REG says anything these days and all to avoid liability in RegF documents.
Basically, by disseminating information this way via third parties, they spin the story the way
they want and avoid any legal liability in the process. This is why REG hasn’t published a NR in
almost six months, but at the same time has the gall to say things like this (we quote Ben
Kramer-Miller in a subsequent tweet in that strong):
15
“They’re concerned that otherwise the program could be interrupted, which would be
costly both financially and reputation-wise.”
I laughed out loud. What reputation? What “ongoing program”? REG has not put a single metre
in the ground this year! Please do not take these people and their nudge-and-wink approach to
shareholder transparency seriously any longer.
Amerigo Resources (ARG.to): Since being handed over to competent management (the
cast-offs having gone on to ruin Great Panther), ARG has performed well and while I can argue
mitigation via owning other copper names, there’s no doubt that these pages missed its recent
run. However, there is a good reason for that; I’m no longer willing to risk placing my money in
front of a company dependent on El Teniente getting enough water to operate effectively. We
saw how the drought-related production slowdown hit ARG hard a couple of years ago, so news
now coming out of Chile about large mines curtailing production outlook due to a lack of rainfall
water supply is something longs and watchers alike need to take into consideration.
I urge you not to panic and hit any “SELL” buttons immediately, however. This is far from the
first drought warning event from the Chilean mining sector and they are always region-specific,
often micro-regional. To go with the water theme, its supply to ARG isn’t threatened by a
Perfect Storm of events yet, there’s no imminent Act of God about to stop the company, it’s
more of a rumbling storm on the horizon that may or may not come this way so no SCUBA gear
or emergency umbrellas required this week. However, keeping a pulse on weather news may
pay dividends in the next six months. See ‘Regional Politics’ for more.
The Producer Basket
After thirty-five weeks of 2021, the Producer Basket shows a loss of 10.74% to level stakes:
company ticker price 1/1/20 Shares out Mkt Cap (U$Bn) current pps gain/loss%
1 Newmont NEM 59.89 805 48.03 59.67 -0.4%
2 Barrick GOLD 22.78 1778.04 36.09 20.30 -10.9%
3 Agnico Eagle AEM 70.51 244.187 14.38 58.87 -16.5%
4 Kirkland Lake KL 41.27 267.056 11.25 42.14 2.1%
5 Kinross Gold KGC 7.34 1261.07 7.81 6.19 -15.7%
6 Endeavour Min EDV.to 29.62 252.568 6.51 30.92 4.4%
7 Pan American PAAS 34.71 210.262 5.60 26.62 -23.3%
8 B2Gold BTG 5.60 1051.697 4.20 3.99 -28.8%
9 Alamos Gold AGI 8.75 392.739 3.16 8.05 -8.0%
10 Pretium Res PVG 11.48 187.833 1.93 10.28 -10.5%
Prices in U$ except EDV.to (share price in CAD$ and mkt cap in approx USD) Port. avg -10.74%
16
Ten out of ten winners on our list last week, as the tide of top-down money taking all boats
higher. No real standout performance, with the best move from Kirkland Lake (KL up 6.9%) and
all others 3% or less, tail-ender Barrick (GOLD) up just 0.3%. The same air of calm stocks on a
rising tide comes from the comparative chart to the GDX benchmark, the difference between
the two squiggly lines changed by just 0.02% last week.
The 2021 Producer Basket: Weekly performance and 20%
comparative to GDX control
15%
10%
5%
0%
-5%
-10%
-15%
-20%
Two weekends ago Alamos Gold was a U$7.28 stock, EDV C$28.02 and PVG U$9.51, the trend
change has happened over the last two weeks and that Labor Day feeling has returned, right
on cue.
Kirkland Lake (KL)
The hard financial lessons of the company’s Detour Lake purchase were baked in many quarters
ago, which means the development plans are going to show in the share price as long as the
company delivered. They delivered last week and the share price out-performance is all about
the new resource update from the company on Thursday:
This ten-day comparative chart also shows the non-reaction to KL’s other recent NR announcing
deep, but high grade drill assays at Fosterville. The market ignored that but could not ignore
the new M+I total for Detour Lake, as announced Thursday, of 14.71m oz Au grading 0.8 g/t
(with inferred now at 1.1m oz Au). While we all expected a significant resource increase,
around 10m oz blows expectations out the water and gives substance to CEO Makuch’s
comments, including:
“…we now expect Detour Lake to reach 800 000 oz/y of production in 2025, and to
ultimately grow to over 900 000 oz/y, with average AISC targeted at $775/oz over the
next five years. With today’s results, we have now clearly demonstrated both the
tremendous exploration potential at Detour Lake as well as the considerable success
being achieved through our drilling programmes.”
This is a long-life mine, and that’s your understatement of the week. KL may still be underwater
for 2021, but that was all about its poor Q1 and since the end of March, its stock has beaten
the GDX by a cool 18%. Your Q2 outperformer, threatens to do it again in Q3.
17
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The 2021 Producer Basket: Percentage difference between
GDX benchmark and basket (negative = IKN basket ahead) 8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
basket
gdx control 0.0%
source: Google, IKN Calcs ts1
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t01naJ ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht7ram ht41 ts12 ht82 ht4rpa ht11 ht81 ht52 n2yam ht9 ht61 dr32 ht03 ht6nuj ht31 ht02 ht72 ht4luj ht11 ht81 ht52 ts1gua ht8 ht51 dn22 ht92 ht5pes
source: IKN calcs, NYSE/Nasdaq/TSX data
The Tiny Dogs
After thirty-five weeks of 2021, the Tiny Dogs show a gain of 8.93% to level stakes:
company ticker price 1/1/21 Shares out Mkt Cap current pps gain/loss%
Antler Gold ANTL.v 0.205 61.348 6.44 0.105 -48.8%
Aston Bay BAY.v 0.045 163.975 8.20 0.05 11.1%
Constantine Met CEM.v 0.17 45.4 21.79 0.48 182.4%
Contact Gold C.v 0.115 240.757 16.85 0.07 -39.1%
Golden Pursuit GDP.v 0.22 40 4.80 0.12 -45.5%
Manitou Gold MTU.v 0.045 230.79 19.62 0.085 88.9%
Precipitate Gold PRG.v 0.240 106.241 11.69 0.11 -54.2%
QC Copper QCCU.v 0.315 105 18.38 0.175 -44.4%
Red Pine Expl RPX.v 0.400 95.806 57.48 0.60 50.0%
Warrior Gold WAR.v 0.090 91.818 7.35 0.08 -11.1%
Prices in CAD$, data from TSXV basket avg 8.93%
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.
A net positive week for the basket and the 20% Tiny Dogs, 2021 weekly tracker
average more doubled to finish at +8.93%. 16%
That’s due to four winners (BAY.v, MTU.v, 12%
QCCU.v, RPX.v) and three UNCH stocks (C.v, 8%
PRG.v, WAR.v), with just three out of ten losers 4%
on the week (ANTL.v, CEM.v, GDP.v). The decent 0%
average gain was also mostly due to Red Pine -4%
Exploration (RPX.v up 36.4%) and while not so -8%
small these days, it’s our featured Tiny Dog of -12%
the week:
Red Pine Exporation (RPX.v): The performance of the week, up 36.4% on volume after its
September 2nd NR (7) with this title:
Red Pine Intersects High-Grade Gold in the
Minto Vein, 109.37 g/t gold over 2.68
metres (un-cut and true width) including 314
g/t gold over 0.84 metre
All very good, but that type of hit is something
you’d expect from a Minto “confirmation” hole;
this is a past producing mine, after all. Then
there was the share price action (right), that
has “leaky boat” written al over it and indicative
of a special channel of news, only for some.
18
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source: IKN calcs, TSX data
What RPX gave us last week was a show hole, which is a valid strategy as long as you can
maintain interest with similar assays down the line, the ones that expand and define a resource.
It’s not so surprising to find the junior marketers running this stock, either. I continue to watch
RPX at Wawa for a drill program that builds a significant resource, at one or at all of its large
land package. Not buying.
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
With noisy news rather than significant events out of Peru, Brazil, Mexico, Ecuador and
Argentina last week, I’m going to have another break from the politics and feature just one
background story, that of the drought potential in Chile.
Chile sees water issues
This is mentioned in The Copper Basket above, in a short note about Amerigo Resources
(ARG.to). The news (8) on August 19th that big London-quoted copper miner Antofagasta
(ANTO.L) was cutting production guidance by 20,000mt (from 730-760kmt, to 701-740kmt)
due to the lack of rainfall in the region where Los Pelambres is located (Coquimbo) didn’t hit
that stock price hard, as the shortfall is only a small part of ANTO’s whole (and it is very
profitable at current copper prices), but may become bad news for the wider region (and good
news for copper prices, of course). Here’s a simple and easy to read map of the Central Chile
zone (regions IV V and VI) along with the main copper mine operations, with Los Pelambres in
the North of the segment:
This follow-up story to the ANTO announcement (9) out on Friday quotes experts (always
experts) warning current drought conditions may soon affect other mines, with Los Bronces,
Caserones and El Teniente top of the list. Those are very large mines and the ongoing threat of
water scarcity to these and other future operations is the reason behind Chile’s policy moves.
They want more desalination plants for the copper industry and recognize this growing hot
button issue, however it won’t help the country in the next six months if the rains continue to
hold off. A story to watch, if circumstances deteriorate further you’ll hear about it.
19
Market Watching
Tracking the Buy Peru call
We’re keeping a weekly eye on my decision to wave to al-clear flag on Peru, which came about
a month too early and before the nasty jag down, late July. Here’s our tracking chart that
considers the Lima Stock Market (BVL) ETF tracker (EPU), Buenaventura (BVN) for the miners
and Banco de Credito (BAP) to keep the pulse of the financial side of the country:
I’m going to rescue some good news this weekend, as August has all the look of a macro
bottom in sentiment for Peru. These financial lines will obviously react to future political
happenings, we cannot afford the luxury of pretending otherwise, therefore it’s best to talk in
possibles/probables rather the certainties. However, from my personal peanut gallery we are
seeing the country get back to work and no shortage of activity. It’s Communism, Jim, but not
as we know it. I will continue to maintain the house “buy back Peru” call and while there’s
clearly risk involved, reward at these levels is obvious as long as the government doesn’t start
intervening.
Orezone (ORE.v) redux
In last week’s main fundies note “We need to talk about Orezone (ORE.v)”, the argument was
that the straight math on Bomboré is now too compelling to ignore and the company’s shady
Vancouver office dealings are one thing, but “buy low sell high” is another. The bottom line
went like this:
“…from its current price base, (ORE) represents compelling value for both near and
long-term players. Personally I’m still debating whether to buy back in and won’t mind
missing the first 10c or so or any move, I’m also considering another add to Argonaut
(AR.to) before any new trade. But those of you looking for a leverage play on gold
with guaranteed asset appreciation, look no further. Great entry point this weekend,
too.”
This redux is to note that the great entry point is still with us, ORE up just a couple of cents on
the week to close at C$1.23 Friday:
20
Investment styles are wide and varied, ORE strikes this desk as a place for steady
accumulation, the tape suggests continued selling by weak hand holders, likely the ones caught
by the recent shenanigans in the stock.
New Gold (NGD) redux
Featured two weeks ago as a clear trading opportunity, New Gold (NGD) has moved up nicely
since that edition and closed Friday at U$1.33, up 26c (+24.3%) and while you would have
been very lucky to buy the absolute low, there’s still a 15%-in-two-weeks win and that is good:
But not for me. I didn’t buy, preferring Argonaut Gold (AR.to) at the moment, so I’ll defend
myself with some sort of “long-term outlook” argument and pretend the obvious leverage
wasn’t there. Finally, a quick thought about the strongly bullish trading in NGD we saw on
Friday as the comparative chart suggests NGD might be making a habit of that late week pop.
I’ll have my eye on NGD tomorrow Monday morning and the opening session, it would be good
for new longs to see the Friday prices stick this time.
Beaver Creek this week
Thursday through Saturday Sept 8th to 11th this coming week, I’m going to pretend to be busy
at the Beaver Creek Precious Metals Summit by attending virtually, watching presentations and
doing some one-on-one’s with interesting companies. If you see my nametag floating in some
sidebar of your screen during the show, feel free to say hi.
Harte Gold (HRT.to): An eye on the side bet
The standard brief update note on this near-term “side bet” that won’t make the main Stocks to
Follow list:
Zero changes on the trade, at its 6.5c and 7c range all week while we await news on any deal.
For those of you who like to position before noise starts to build, we should recall that there is
going to be some sort of decision by September 30th. Holding, and maybe the cash here
eventually ends up in KFR…
21
A heads-up on Kingfisher Resources (KFR.v)
The TL:DR: KFR was on my radar earlier this year, last week’s NR and market move has it back
on the radar. An interesting speculative option for market traders in 3q21 and 4q21, I will wait
for drill results before putting my money where my mouth is.
We begin with a quick first-person paragraph of background: After the PDAC data-dump and
around mid-March this year, Kingfisher Resources (KFR.v) IPO’d as a brand new exploreco
doing grassroots exploration on a newly opened and geologically interesting part of Canada. It
was one of the companies that got past my first and second base DD, which means I began to
consider it a potential trade. However, after looking quite closely I eventually dropped the idea
and made zero mention of KFR in public (at least if memory serves). Since then, the stock price
has mostly flat-lined on patchy interest, until last week and this September 2nd NR (19) which
seems to have lit the fuse on the price:
The ten-day chart (right) show the move best. And this is a move to consider, as I think there
may be a trade here for the speculative in the audience. Last week’s NR was entitled “Kingfisher
Provides Update on Diamond Drilling at the Goldrange Project” and I urge you to read it all, but
here are the highlight bullets:
Drilling continues to encounter widespread zones of quartz-carbonate-sulfide veins, quartz-
carbonate-sulfide breccias, and disseminated sulfides within all drill holes completed to date.
The highest density zones of mineralized veins occur within broad bleached and sericite
altered intervals proximal to intrusive-sedimentary contacts. Within bleached zones,
disseminated fuchsite is common.
The majority of drilling has focused on testing structurally-hosted mineralization at the
contacts of the upper diorite. GR21-007 was drilled to 533 m to additionally test the lower
quartz diorite which contained similar quartz-carbonate-sulfide breccias and veins as found
within the upper intrusion.
Those bullet points speak of the Goldrange target, their first generated drill target now
returning core from inside the larger Cloud Drifter trend. At the time in March I was interested
enough to review technical data, including its corporate pitch presentation and a most interest
20 slide technical presentation. The latter was based around soil and rock sampling data and
clearly explained the potential, along with reasons why soil sampling on this concession was a
god idea (happy to forward the PDFs, you know my address). Even though it’s unfair to sample
just one or two slides from such a presentation, I’m going to do just that:
22
These soil sample results from Cloud Drifter (location of Goldrange) return gold, plus the
pathfinders that associate themselves with large disseminated deposits. It than sits Cloud
Drifter against other known deposits, such as Coffee in The Yukon:
…and how those soil stats stack up against the five deposits it compares with:
23
All those and more. Six months on. KFR is already delivering on the promise shown from those
soil samples and providing plenty of proof of concept. The September 2nd NR from Kingfisher
(KFR.v) was its “we have drill results coming back soon, ladies and gents” primer NR, designed
to pump the market and create momentum. As the company has a go-getter young executive
team and connections with one of the larger financing groups currently funding explorecos, we
can expect the to make the most of 21st century media channels, as well. Here’s the share
count, as at August 30th 2021 and its MD&A filing:
Shares out: 78,988,500
Options: 6,411,137
Warrants: 37,563,984
Fully diluted total: 122,963,621
Around 11m of those warrants are at 12.5c, 24m are at 50c, they come from the financing and
are now all in the money, they expire 1q23. This weekend’s C$0.59 share price makes the
market cap C$46.6m (U$37.3m approx), but for all intents and purposes the FD total gives a
better idea of the real valuation now being attached to KFR, that’s around C$72.55m (aprox
U$58m), which means KFR has started to grow as an exploreco but there’s still plenty of room
to run, as long as those promising-sounding cores come back from the assay lab with economic
gold values.
The news last week, added to my own interest in the stock five months ago, means KFR gets a
slot in today’s ‘Market Watching’ and a heads-up for this audience (who will now do what they
want with the information). As noted in the TL:DR above, my choice is to be chicken and wait
for the drill results, first because KFR is not the type of whisper stock I like to chase and
secondly because I’m trying to trim the personal portfolio of names at the moment, rather than
adding to it. However, my personal foibles should not detract from this company and its
potential, after last week’s NR there will be plenty of eyeballs waiting for the first assay
numbers to drop.
Minera IRL (MIRL.cse): Concerned Shareholders (3)
One of the things I am keen to avoid is filling this newsletter with blow-by-blow weekly
accounts of the upcoming AGM battle with Minera IRL (MIRL.cse), as it’s boring for me but very
boring for the majority of IKN Weekly readers who are not also MIRL shareholders (sorry
friends, we are even in a minority here ). That’s now assured, due to the combo of media
outlets at the disposal of Concerned Shareholders:
We have our internal mailing list
24
We have the IKN blog
We have the Silicon Investor bull board
Yes, we also have The IKN Weekly and MIRL will
not go un-mentioned on these pages from now
to December, my desire is to keep the Weekly
clean and able to obsess on several companies,
not just one. Therefore, expect brief mentions of
MIRL here in ‘Market Watching’ and I hope fellow
CS make use of the other channels, which
include mailing me at any time.
In the meantime, we’ll start on the awareness
campaign this coming week. Part of that will be
public posts and social media, but activity also
goes on in the background with leads and
potential lines of interest. That is quickly scalable and can always use more so if you, fellow CS,
know somebody, group or company with potential interest in MIRL please point them in the
right direction by showing them the SI bull board, or any of my writings.
Conclusion
IKN641 is done, we end with bullet points:
Sic gloria transit mundi. The week ahead includes one of those moments that mark the
passing of time, the 20th anniversary of what’s now known as “911”. On a personal
note, it allows a sense of gratitude to have lived these 20 years, knowing that
thousands of people had their lives cut short that day through no fault of their own.
The focus becomes sharpest with personal memories, thinking about just a few of the
trials and tribulations, the good and bad times I’ve experienced since that terrible day is
enough; they were robbed of the greatest privilege of all and I, for one, will remember
them.
Mene Inc. (MENE.v) returned a solid quarter, rather than blowing the roof off with
sales, but its financial stability and growth trajectory speak for itself. The company is in
the right hands, it has a successful and scalable business model, and considering its
high-end, luxury target market, it’s only a matter of time before MENE.v is “discovered”
by a wider investing audience.
There’s always a new trade, and Kingfisher (KFR.v) is one that may fit the bill. Good
address, smart brains trust and good initial results from its 2021 campaign.
An extra mention here for Royal Road (RYR.v), which looks to have found another live
prospect in it Caribe target. Tim Coughlin has a stellar track record of discovery, it’s
why we backed his horse after all. The company gives regular, transparent news
updates and the CEO is always available to answer queries or give follow-up
information. If only all junior investment were as easy as this.
It’s time to take Minera IRL back from the people who treat it as their own. We are the
owners of the company and this time, we want our money.
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
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Footnotes, appendices, references, disclaimer
(1) https://www.wolfdenresources.com/wp-content-uploads-2021-09-wlfsept22021-pdf/
(2) https://amarillogold.com/investors/news/news-details/2021/A-quarter-of-progress-and-consolidation-for-
Amarillo/default.aspx
(3) https://www.strategicmetalsltd.com/news/2021/08/31/strategic-metals-announces-large-share-position-in-broden-
mining
(4) https://qccopper.com/site/assets/files/2670/2qc_copper_investor_presentation_2021_08_31.pdf
(5) https://www.royalroadminerals.com/news/2021/royal-road-intersects-207-meters-at-1-1-grams-per-tonne-gold-at-its-
caribe-discovery-nicaragua/
(6) https://twitter.com/TheWealthMiner/status/1433483895614451712
(7) https://697e0c45-0f64-460b-b9bb-
0f9bbf66060c.filesusr.com/ugd/6f9bc0_10edee32df9f41be960f0f65ba8e3bf5.pdf?index=true
(8) https://www.bloomberg.com/news/articles/2021-08-19/chile-drought-forces-antofagasta-to-cut-copper-output-target
(9) https://www.efe.com/efe/america/economia/la-poderosa-mineria-de-chile-en-jaque-por-alarmante-y-duradera-
sequia/20000011-4621919
(10) https://kingfishermetals.com/kingfisher-provides-update-on-diamond-drilling-at-the-goldrange-project/
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
26
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
27
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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