IKN #679Premium

The IKN Weekly
Week 679, May 22nd 2022
Contents
This Week: In Today’s edition, Let’s NOT drone on about gold and inflation, Selling into a
bounce, Copper and gold show relative strength.
Fundamental Analysis: Revisiting Copper Mountain (CMMC.to) in light of recent events.
Stocks to Follow: Strategic Metals (SMD.v), Abrasilver (ABRA.v), Meridian Mining (MNO.to),
Superior Gold (SGI.v), Minera Alamos (MAI.v), Aldebaran Resources (ALDE.v), Discovery Silver
(DSV.v), Newcore Gold (NCAU.v), Amerigo Resources (ARG.to).
Copper Basket: Overview, Hot Chili (HCH.v), Marimaca (MARI.to), Kutcho Copper (KC.v), C3
Metals (CCCM.v).
Producer Basket: Overview, Agnico Eagle (AEM), Kinross Gold (KGC) (K.to).
TinyCaps Basket: Overview, Kingfisher Metals (KFR.v), Precipitate Gold (PRG.v).
Regional Politics: Colombia: A significant late surge for Rodolfo Hernández, Jill Biden does
LatAm, Robert Friedland on mining ESG, Argentina improving mining scene attracts media
attention, Differences in government accountability in Chile and Peru mining, Chile: Dominga to
set off a new round of hysteria, Nicaragua political risk update (including some mining this
time).
Market Watching: Updating the Starcore (SAM.to) arbitrage opportunity.
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
 This week’s Regional Politics section has news on the late and significant developments
in the Colombian presidential election. Next week is the big day, but the scenario has
shifted and not necessarily to the good. Also in this week’s politics section, we again
highlight the strides being made by Argentina in the mining scene and prepare for
another round of illogical anti-Chile rhetoric. All things shall pass.
 The sharp drop in price at Copper Mountain (CMMC.to) plus its recent newsflow
suggests that a return trade in this stock may be in the offing sooner than I’d expected.
There’s no trade decision today, but we walk through the scenario to prime the story
and prepare for an eventual window.
 After trimming sails and reducing exposure to the riskiest end of the market during the
week, we take stock of an overall positive week but recognize that little has truly
changed. We’re still in a highly volatile market and anything could happen, so it’s a
good time to own gold and keep some cash in treasury.
 Despite the.’
Let’s NOT drone on about gold and inflation
“The function of economic forecasting is
to make astrology look respectable.”
John Kenneth Galbraith
1

Three questions:
 Is the author of The IKN Weekly going to fake expertise on US fiscal and monetary
policy? Answer, no
 How far down the Federal Reserve rabbit hole does this junior mining company analyst
want to go? Answer, not far.
 How much do you want from The IKN Weekly on The Fed, its interest rates policy and
Jay Powell’s fight against US inflation? Probable answer, as little as possible.
In other words, let’s not try to fool anyone nor pretend expertise in a field best left to real
Fedwatchers and broad market analysts. This is a letter focusing on (mostly) junior mining
stocks in (mostly) Latin America and I’m not going to try to lead arguments on The Fed and its
policies or attempt thinkpieces that do Lots Of Splainin’ on where monetary policy is going
wrong in our modern world.
That said, recent intro sections to The IKN Weekly have gravitated toward those subjects
because there is at least one macro condition we need to get right, or at least have a decent
handle on, in order to successfully trade the juniors market. That’s the price of gold and what
it’s doing, to which you can add the macro moves in other precious metals and the base metals
scene as well if you like, but ultimately the major price driver of our weird and wonderful sector
is gold. Therefore and without going into reams and reams of script as in other weeks, we do
need to keep a handle on gold’s major price influences and those, at this present period of
time, are led by the decisions being made and announced at the Fed.
So like it or not, we do have to do a minimum of Fedwatching to understand the (precious)
metals background and for that, we move to the main message from Jay Powell last week (1):
“What we need to see is inflation coming down in a clear and convincing way and
we’re going to keep pushing until we see that,” Powell said at a Wall Street Journal
event. “If we don’t see that we will have to consider moving more aggressively” to
tighten financial conditions. The Fed will not hesitate to move beyond a neutral policy,
if needed.”
What does that mean? It means that the current Fed funds rate of 1% (or to be exact, 0.75%
to 1%) won’t be held back when it reaches the neutral rate, normally known as the “natural
rate” of interest. That’s defined as “the real short-term interest rate expected to prevail when
an economy is at full strength and inflation is stable” (2) and comes with a couple of ways to
calculate the answer, according to which grouping of dismal scientists you prefer. In real world
terms, the “natural rate” is currently calculated at around 2.4% (alternative calculations put a
ceiling at 2.75%) and that means Jay Powell isn’t going to make like a Dove and “wait and see”
when base rates reach 2.5%. The linked report on the WSJ event includes consensus opinion of
Jay Powell’s obvious signalling. The market has baked in 50 points added in June, 50 points in
July and any variations to that rhythm will either
be 1) the outside chance of 75 point rises if
inflation doesn’t come under control, then 2) as
from September the rate hikes will continue, the
debate is whether the steps are 25 or 50 points.
The bottom line: Last week’s newsflow was a
continuation of what we know: The Fed is going to
be aggressive and that’s fair enough, but we
already knew the Fed would run above
neutral/natural with no problems two weeks ago
because the same Jay Powell said the same thing.
Last week was the Fed repeating “We’re not
joking about interest rates”, which allowed gold
and the metals complex (here GDX and spot copper) to break away from the negative pull of
the broad markets for the first time in a while and hold onto gains when other US macro data
2

(housing starts, retail earnings) came in soft.
Selling into a bounce
So, a respite for our sector and a long-overdue rebound, which was happily received by this
desk even while trimming sails (see IKN678) and selling some of the riskier end of current
exposure to the market. That’s because The IKN Weekly remains net long the juniors market,
which is worth repeating as, according to feedback on last week’s edition, that main and
important message was lost. There’s a difference between adjusting one’s portfolio and
radically altering it, selling a couple of minor positions while reiterating full confidence in the
main picks and investment vehicles (i.e. Minera Alamos, Rio2, Amerigo) is all about the former.
Copper and gold show relative strength
It’s also about maintaining a bullish position regarding the metals that matter and, as stated in
IKN679 last week, the portfolio is centred even more strongly on the prospects for two in
particular, gold and copper. We remain bullish on The Monetary Metal and The Good Doctor
Copper for different reasons and chart featured above shows how trading in both was more
robust last week, despite the stock market’s weakness. By way of a quick reminder from
IKN678, here’s how we opened on gold:
 “Gold is the Fear Trade metal, the alternative to the US Dollar in times of negative real
interest rates, the financial safe haven.”
The price trading of gold last week was positive, as was the market reaction as seen in our GLD
tracking charts. Bottom left we see the first uptick in GLD physical inventories for a month, with
14.4mt added between last Wednesday and Friday. And bottom right we see that quick uptick
in physical didn’t dent to rebound in sentiment for gold ownership and, with the inventory/price
ratio holding above the 6.0X level as buyers return, appetite for further additions is still there.
GLD gold holdings, 2022 year to date (metric tonnes)
1140
1120
1100
1080
1060
1040
1020
1000
980
960
940
920
900
In other words, we saw gold moving up and Wall St beginning to accumulate GLD again while
the broad markets jagged down. That’s the archtype “Fear Trade” and why we like gold going
forward, certainly more than silver. Moving to copper, here’s how we started our justification of
bullishness in copper under our new market circumstances:
 Copper is the metal China needs. The only industrial metal that China does not produce in
quantity on its own soil and its greatest import weakness in the metals complex.
So copper moved up last week as well, which fits with the narrative. However, it’s worth stress
testing ideas, especially for an industrial metal in times of potential recession, and the bear case
was put forward by (3) from the Chile’s big financial house LarrianVial and its chief economist
Leonardo Suárez (translated), in his note to clients last week “Dollar strength, signs of
recession?”. According to Suárez, who makes his money by following the fate of the biggest
copper producer in the world and the country whose exports depend most on just one metal:
“The dollar in outside markets has continued to appreciate along recessionary lines
and due to the Fed rate hikes. It’s also at historically high levels in Chile, but even so
3
12/21/13 22/1/5 22/1/01 22/1/51 22/1/02 22/1/52 22/1/03 22/2/4 22/2/9 22/2/41 22/2/91 22/2/42 22/3/1 22/3/6 22/3/11 22/3/61 22/3/12 22/3/62 22/3/13 22/4/5 22/4/01 22/4/51 22/4/02 22/4/52 22/4/03 22/5/5 22/5/01 22/5/51 22/5/02
mt GLD: Inventory/Price Ratio, 2022 year to date
6.60
6.50
6.40
6.30
6.20
6.10
6.00
5.90
5.80
5.70
5.60
5.50
source: SPDR GLD data 5.40
13/21/1202 5/1/2202 01/1/2202 51/1/2202 02/1/2202 52/1/2202 03/1/2202 4/2/2202 9/2/2202 41/2/2202 91/2/2202 42/2/2202 1/3/2202 6/3/2202 11/3/2202 61/3/2202 12/3/2202 62/3/2202 13/3/2202 5/4/2202 01/4/2202 51/4/2202 02/4/2202 52/4/2202 03/4/2202 5/5/2202 01/5/2202 51/5/2202 02/5/2202
Source: SPDR data, IKN calcs

could soon touch CLP900 (to the USD). The Chilean Peso is a rollercoaster and in this
context should continue to depreciate as it reacts to the global appreciation of the US
Dollar and the future drop in the price of copper, which could drop to U$3.50/lb in the
case of a global recession.”
Three things to say about that:
 He assumes the USD is on an upward trajectory and while I generally agree, it ain’t
necessarily so. Last week saw the DXY reverse slightly, again likely due to “no new threats”
from the Fed.
 Even if he’s right and we get a bad case of high USD and global recession (a.k.a. the hard
landing), I don’t think U$3.50/lb is that rough a deal. For example, it wouldn’t stop our main
copper pick Amerigo Resources (ARG.to) from maintaining its excellent dividend policy. That
alone will put a line under any price weakness.
 I don’t think he’s right. Suárez (and LarrianVial, for that matter) is one of those voices I follow
in the background because he (they) tend to the pessimistic end of the scale. As such, he
comes as a useful antidote to the permabull messaging of most of the market, but it also
means he tends to under-estimate. For example this (4), in which early last year and while
maintaining a generally bullish position on copper predicted the price to fluctuate between
U$3.50/lb and U$4.00/lb for 2021. I remembering taking the over on his views then and
watching as copper jumped over U$4.00/lb just a couple of weeks later and has stayed there
ever since.
The reason to be long gold is to counter market nerves, something we saw last week as the
market sunk on the type of news that would normally affect copper, too. The reason to be long
copper is to take advantage of the only metal China needs to import in quantity to maintain its
long-term economic plans. That’s not going away and seems to have been missed by Señor
Suárez’s rather dualistic view of the market, where copper is Chile’s version of the AntiDollar.
Once again I’ll take the over on him, even in his worst-case recession scenario.
Fundamental Analysis of Mining Stocks
Revisiting Copper Mountain (CMMC.to) in light of recent events
This has come round quicker than I imagined. In the last two and half years we’ve done
reasonably well from trading Copper Mountain, first with a long position opened in late 2020,
just in time to catch the big tailwind of the copper move and capitalizing on the company’s
greatly improved financials as a result. When then returned in late 2021 and made a modest
percentage profit from a chunky trade, before stepping out in early 2022 and avoiding its nasty,
waterfall drop caused by its recent weak operational results. When we last covered the stock,
just four editions ago, I wrote that it didn’t look god for a return long for a while but recent
events have taken over and drive today’s main fundies piece.
4

Today we revisit CMMC in light of those events and while there’s no new trade planned as yet,
the job is to lay out the changed scenario and make ready for a quick decision if enough pieces
fall into place.
Backdrop: Even before the poor 1q22 results were known, the weakness in CMMC trading and
its new low price had caught your author’s attention. This from a quick comment on CMMC in
IKN675, dated April 24th:
“…is now back at levels which make it almost tempting to buy again, if it weren’t for
the fact that it’s due to report its quarter in two days’ time…”
Then the results hit and they were indeed poor, as we noted in a longer piece on the company
in the ‘Market Watching’ segment of IKN676, dated May 1st. Feel free to check back at that note
from four editions ago as it goes into some detail, but here’s how the piece ended:
The bottom line to this car crash of a quarter is that even now, with CMMC
trading under C$3.00, there’s no reason to buy back in. For one, the lack of
guidance on the mill problems does no favours for the company and its
transparency (the mill breakdown happened in 4q21, we only found out about
it half way through 2q22 ) and for another, 2q22 will not be running at full
tilt and grade remains low. Financially, CMMC gets to paper over the cracks
thanks to the high copper price, but when your operation underperforms this
badly there no reason to jump straight back in. I consider myself lucky to
have got out from my long position with a modest profit earlier this year, but
CMMC is now off the table until 3q22 at a minimum and only then if the
company delivers on expectations in the meantime.
Suffice to say, I were was not impressed and was fortunate to have side-stepped a massive
loser by selling CMMC earlier in the year. However, that last line of the conclusion needs a new
look, because today is mid-Q2 and here we are, back again considering CMMC and its trade
potential. I need to eat my words slightly and for two reasons:
Price. Here are two versions of the 2022 YTD price chart for CMMC. To the left you get it
straight-up, to the right compared to sector benchmark, the COPX ETF:
The stock popped hard on the combo of the Eva rumours and the bottom in the price of
copper, but even now at this weekend’s C$2.59, we’re still significantly below the C$3.27 of
IKN675 and even the post-earnings waterfall drop of C$2.87 in IKN676. That’s a 10% discount
and the only real reason for the delta is copper price, down around 15c/lb (but off lows).
Market rumours: It’s also because of market rumours and three news releases from the
company. Two weeks ago on May 11th, The Australian newspaper (5) published a market
rumour note "Miner hires bank to sell Eva copper project in Queensland".
5

“Canadian miner Copper Mountain is believed to be making moves to sell its
Eva Copper Project in Queensland, expected to fetch $300m.”
Hours later during trading hours in Canada that day, CMMC moved to quash the story (6):
VANCOUVER, BC , May 12, 2022 /CNW/ - Copper Mountain Mining Corporation
(TSX: CMMC) (ASX: C6C) (the “Company” or “Copper Mountain”) notes media
speculation regarding a possible transaction related to the Eva Copper Project in
Queensland , Australia.
The Company’s policy is not to comment on market speculation. The Company notes
that it regularly reviews strategic opportunities to enhance shareholder value, and that
there are no pending transactions with respect to the Eva Copper Project of any nature
to note at this time.
The Company will update the market as necessary in line with its continuous
disclosure obligations.
Not the most convincing denial ever, as by merely denying a “pending transaction” they don’t
deny any decision to shop or market Eva. Despite the denial-that-wasn’t, as seen on this price
chart it took a couple of days before CMMC’s
price started running hard. The news slept,
woke up and among his desk’s mailbag that
Tuesday morning, two separate and long-
standing Canadian-based contacts (MP and
RF, I didn’t answer you and now apologize)
both mentioned swirling market rumours
about a sale of Eva.
Even with the better backdrop for copper
that day and even when taking into account
CMMC’s reputation for volatility and a
preferred stock for the Canadian market’s
casino players when it comes to copper, the
move was eye-catching. When contacted,
other well-placed individuals had also heard the CMMC rumour had legs, with one mentioning a
connection with recent corporate moves. It was time to re-read a couple of previous NRs out of
the company with new eyes, namely this NR from last year (7) and this one from the beginning
of this month (8). Here’s the main body of each, your author adds some bold type:
VANCOUVER , June 11, 2021 /CNW Telbec/ - Copper Mountain Mining Corporation
(TSX: CMMC) (ASX: C6C) (the “Company” or “Copper Mountain”) is pleased to
announce the appointment of Mr. Don Strickland as Executive Vice President,
Sustainability, transitioning from Chief Operating Officer, effective July 1 , 2021.
At that time, Mr. Eric Dell , Copper Mountain Mine’s General Manager, will become
Senior Vice President, Operations.
“The appointment of Don to EVP of Sustainability highlights the priority we place on
our corporate and social responsibility objectives, which are prominent and
central to our business in both Australia and Canada.” commented Gil Clausen ,
Copper Mountain’s President and CEO. “This new role will allow Don to focus 100% of
his efforts on ensuring that we are achieving the sustainability goals that touch every
aspect of our business including health and safety, permitting, public and community
relations, human resources and environmental excellence. Don has been leading our
ESG initiatives and achievements to date and this move was a natural transition at a
time when we are making large strides in these areas.”
“Further, I would like to congratulate Eric Dell on his new role as Senior Vice
President of Operations. Eric has been successfully managing the Copper Mountain
Mine over the last several years. He will bring renewed focus to the operating team at
the Copper Mountain Mine and the Eva Project as we sustainably grow the business in
line with our vision to triple our 2020 production within the next five years.”
We move forward 10 months and the other side of a weak-ish 4q21 and that poor 1q22:
VANCOUVER, BC , May 6, 2022 /CNW/ - Copper Mountain Mining Corporation (TSX:
CMMC) (ASX: C6C) (the “Company” or “Copper Mountain”) is pleased to announce
6

that Mr. Don Strickland has returned to the role of Chief Operating Officer
(“COO”) from Executive Vice President, Sustainability, effective immediately. Mr.
Strickland took on the role of Executive Vice President, Sustainability to establish a
strong sustainability direction and focus for the Company, which was highly successful.
Mr. Strickland will continue to be responsible for the Sustainability and People
functions, in addition to leading Operations and Technical Services. This change in
structure supports the integration of the Company’s Sustainability and People
objectives fully within the Company’s operations and growth initiatives. Copper
Mountain will appoint a Vice President, Sustainability to work with Mr. Strickland and
the team to continue advancing the Company’s sustainability focus under Mr.
Strickland’s general leadership. The Company has eliminated the role of Senior
Vice President, Operations and the Mine General Managers will report directly to
Mr. Strickland. Copper Mountain thanks Mr. Eric Dell for his years of service and
dedication to the Company.
The Company is also pleased to announce that Mr. Lance Newman will assume the
position of Sr. Vice President, Project Development. Mr. Newman will add
Australian Country Management to his overall leadership in Project Development
and Construction.
There’s some unpacking to do:
 In June 2021, Don Strickland changes job title from COO to Executive Vice President,
Sustainability. When his new duties are explained, Australia is mentioned before Canada.
 In the same June 2021 NR, Eric Dell is put in charge of the main Copper Mountain mine, but
isn’t named COO.
 We then see CMMC under-perform at its Canadian operations and inflation push costs from
the original AU$705m (approx CAD$630m) as per the May 2020 Feasibility Study (FS) to
AU$836m (approx CAD$752m), according to the costs update NR of December 2021 (9). Here
right is the table from that NR and, while other metrics had improved mostly due to the
marked improvement in the price of
copper, the initial capex hurdle was up.
As an aside and considering similar
stories from the market in recent times,
it wouldn’t be the biggest shock to see
that new AU$836m number move higher
due to more inflation added this year.
 The on May 6th, Eric Strickland returns
as COO at the main mine. Eric Dell’s
position disappears (goodbye) and the country manager Australia role is handed to Lance
Newman, a VP based in Denver Co who has always worked on the Americas continent, never
in Australia. With hindsight, as well as the image of COO Strickland “back in charge” at the
mis-firing Copper Mountain asset, there’s a clear downgrading of interest for Australia among
CMMC high command. One week later, a rumour that CMMC is marketing Eva seems to have
leaked from legal offices in Australia and while it’s impossible to provide certainty, it fits the
corporate re-shuffle.
Therefore, at CMMC we have a company that has had its problems at its operating project and
an exploration/development project (which happens to be on the other side of the world) that is
now subject to rumours of sale. For sure, CMMC as owner of a valuable asset isn’t obliged to do
what we on the outside think, suppose or even propose, but we can consider the three most
obvious scenarios for CMMC at Eva, going forward:
1) They sell the asset. If so, they’ve run a good deal. With an original deal price of
AUS$93m in late 2017 (deal closed early 2018), there’s no doubt that CMMC got the
“buy well” part of the trade equation right and not only that, but the company they
purchased, Altona, came with a little under AU$40m in cash. If the rumoured asking
price for Eva of AU$300m is true, it would represent a great deal and a nice land-flip.
7

2) They hold onto Eva without developing. Also, a reasonable assumption and arguably,
it’s what CMMC has been doing to date. On announcing the deal back in 2017,
according to the two companies (10) “…the deal will create a multi-jurisdictional, mid-
tier copper producer with annual production of around 73,000 tonnes of copper by
2020.” You may have noticed that it’s now 2022 and they haven’t even broken ground
at Eva, which can only be partially blamed on Covid-19. If the company doesn’t have
the wherewithal to develop Eva (likely) or is offered enough by a third party (possible),
there’s no reason why it can’t hold it fallow a while longer and improve its asset value
in a rising market for copper.
3) They sell Eva. This would fit with the rumour. Also on consideration, it makes sense of
what we can see in the company financials today and to explain, we now expand on
this option:
These charts show the totality of assets (below left) and just the liquid assets (below right):
CMMC: Current assets breakdown, per qtr
300
275
250
225
200
175
150
125
100
75
50
25
0
CMMC is an asset-rich company, with over C$800m of fixed assets and of those, over C$750m
in mining properties (to be exact, C$754,891m Property/Plant/Equipment). However, the
carrying value of its Australian assets (mostly Eva, with the less advanced Cameron project
some 30km away) stood at just under C$80m, a small 10.6% part of the whole. Therefore, if
they were sold tomorrow for the rumoured price of AU$300m (approx C$270m), the deal would
strengthen the balance sheet to the tune of around C$190m. Not bad at all.
In cash too, which and that brings up a salient point, as seen in the next three charts:
Cash at C$143.5m is certainly liquid, but a look over at working capital shows CMMC also has
plenty of liabilities to service. Here’s the overview
chart of that:
Those bars add up to just under C$570m and
that’s a lot of money. The lion’s share is in the LT
section and we’ll get to that in a moment, first
here’s the breakdown of current liabilities as at
1q22, all figures in millions of Canadian Dollars:
8
91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1
CMMC: Assets breakdown, per qtr C$m
1100
1000 Inventory
900
A/C Rec 800
700 cash&eq
600
500
400
300
200
100
0
source: CMMC filings
91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1
C$m
fixed
Inventory
A/C Rec
cash&eq
source: CMMC filings
200 CMMC.to: Cash and ST
180
160
140
120
100
80
60
40
20
0
71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1
CMMC.to: Working Capital per qtr
200
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 12q3 12q4 22q1
source company filings, IKN ests
srallod
fo
snoillim
CMMC.to: Liabilities Breakdown per qtr
600
550
500
450
400
350
300
250
200
150
100
50
0
71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1
source: company filings, IKN ests
srallod
fo
snoillim
LT liab
current liab

 Accounts payable: 83.275
 Lease liabilities: 11.768
 Current portion of debt: 12.496
 Other financial liabilities: 5.115
 Taxes payable: 2.015
Of those, the accounts payable ballooned by nearly C$23m in 1q22. The lease and loan debts
will have to be paid as rolling payments of the long-term deals in place, finally the “other” is a
non-cash line item that will disappear when the costless collar hedge is done at the end of the
year (and tax is tax, you know tax).
As for the long-term liabilities, they break down this way:
 Provisions and other: 26.35
 Lease liabilities: 46.392
 Long-term debt: 281.59
 Deferred tax: 100.721
The tax is non-cash and non-consequential (for we outsiders looking for a trade, at least) as
CMMC’s gig is a going concern with a mine life of over 30 years. Provisions are mostly
pensions/insurance/health plans/etc and also part of the game in a going concern. That leaves
the lease liabilities that are being paid off gradually, then the main event of that C$281.6m in
debt. Yes it’s “friendly debt”, as the counterparty is led by minority JV partner Mitsubishi but it’s
still there, the U$250m facility that matures in 2026 and costs around C$26m per year in
servicing. Again, I don’t want to dramatize this as under present circumstances, CMMC is in
good position to cover its obligations. However, it means CMMC is already indebted and those
who would fund its eventual capex at Eva need consider those.
We should also note the reduced cash generation at CMMC at the moment. We go into these in
more detail in IKN676, here we reproduce the charts and note that the “kitchen sink” period in
the first half of 2022 means lower income, in gross and operating profit terms:
CMMC.to: Quarterly Earnings overview
9
952.03
910.24 713.74
82.69 687.58
146.66 571.27
675.81
23
86
09
200
180
160
140
120
100
80
60
40
20
0
-20
02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 tse22q2 tse22q3 tse22q4
source: company filings, IKN ests
srallod
fo
snoillim
revenues
COGS
Gross profit
CMMC.to: Operating profit
9.91
5.1- 4.5- 2.05- 0.81-
8.82 3.93 5.04 1.58 0.77 2.26 9.46 7.7 0.52 0.16 0.38
120
100
80
60 40
20
0
-20
-40
-60
91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 tse22q2 tse22q3 tse22q4
source: company data, IKN ests
srallod
fo
snoillim
CMMC.to: operating earnings per share, per qtr
0.50
0.40
0.30 0.20
0.10
0.00
-0.10
-0.20
-0.30
91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 tse22q2 tse22q3 tse22q4
C$
source: company filings

Putting this all together, we can say the following:
 At the moment, CMMC is getting precisely zero credit for its ownership of Eva. Bought
cheaply four years ago, it was originally supposed to be in production by 2020 but after
slow-playing its economic studies, we’re still only at feasibility stage and now requires
financing to the tune of around C$630m (U$500m approx) and at least two years of
construction to bring into operation.
 We’ve seen CMMC take big hits on its equity price recently and most of that due to its own
operational issues. 4q21 wasn’t great, 1q22 was awful and largely its own fault and since
then, we’ve seen the company re-shuffle its C-suite in response.
 One of the consequences of that re-shuffle is to have seen Eva in Australia move down its
pecking order of importance. Not inconsequentially, this point fits with the latest market
rumour out of Australia that CMMC is shopping this asset to the highest bidder.
 This makes sense. Capex has ballooned (and is likely higher still here in 2q22) and, as the
asset is carried cheaply on its books, any deal to sell the project would enhance its balance
sheet and improve its balance sheet at the right time by adding cash and eventually allowing
the company to pay down its debt pile (it can call in all that debt as from October 2023).
 For an asset currently doing nothing to improve the equity price of CMMC, such a move
would bring immediate relief from its current funk and bring plenty of financial flexibility. It
would then have pleasant choices it could make, such as investing in its long-life mainstay at
Copper Mountain, developing the Ingerbelle deposit (next to Copper Mountain and definitely
more in its wheelhouse than an asset in Australia) or even the potential to become truly
shareholder-friendly (at last) and start paying a dividend.
 The option to vend Eva also makes sense when considering the alternatives. We agree it is
not under pressure to do anything and wouldn’t have to entertain any old offer, as long as
its operations get back on track as from the second half of 2022 and start returning the type
of cash flow we know it can achieve under current market prices for copper. However, the
prospect of going to the financial market and adding debt at this point in the cycle,
particularly at the price CMMC would have to pay (and in US Dollars), would add extra risk
to the company and put its share price under further pressure (or at a minimum, make a
volatile stock even more so).
 As for the share price, the current C$2.59 is fully justified by CMMC’s operations and has no
hint of any positive effect from its Eva asset. If we take CMMC at its word and run with its
assertion that the current issues are temporary and getting fixed, come the second half of
this year and onward into 2023 and beyond, we will be back to operating earnings per share
of between 30c and 40c per quarter. Yes, that says per quarter and even at the low end of
projections it forecasts at just 2X OEPS at current prices. More than enough to support and
increase the share price without any help from a new mine or development project.
 Finally, if Eva finds a buyer at or around the rumoured AU$300m share price, it would imply
around C$1.28 per share in cash, or 90c per share in net asset gain. Personally, I believe the
former give the clearest idea of the potential price jump on any Eva news as today, the fixed
Eva asset gets basically zero reward on the equity.
Bottom line
The combination of the sharp drop in CMMC’s share price, which happened more quickly and
more deeply than I expected, plus the new angle that would possibly monetize its largely fallow
Eva project that’s done nothing for its share price in recent quarters. The idea of selling Eva
makes sense on a corporate level, the managerial re-shuffle suggests it as well, plus the
prospect of weakening the CMMC balance sheet at the moment in order to raise the required
capex for the build makes far less sense than bolstering it with cash and using proceeds to
improve its current operations (or even rewarding shareholders directly). I didn’t expect CMMC
to go this cheap and, while they have clearly flagged the current 2q22 as another weak quarter,
10

it’s unlikely to be as bad as Q1. After that, guidance is for a return to fully functioning
profitability.
The current macro environment has your author leery about making any new moves, but if
CMMC takes another sharp drop in price or if a deal to sell Eva is announced, the trade window
on this company (which we’ve tended to trade well on these pages, even if I say so myself)
would be too great to ignore. That’s where we end today, with the scenario explained (I hope,
please feel free to ask questions) and the set-up understood so that if required, I can now refer
you to this essay and move fast.
Stocks to Follow
The relief came and most of the Stocks to Follow list put in recovery bounces, with just two
losers (SGI.v, MNO.to) among the 17 stocks left open from last week. With no unchanged, that
means 15 week-over-week winners including the biggest percentage moves in Palamina (PA.v
up 20.0%), Aldebaran (ALDE.v up 15.7%), Chesapeake (CKG.v up 15.5%), Discovery Silver
(DSV.v up 12.1%) and Newcore Gold (NCAU.v up 10.7%). In fact of the whole list, the only real
disappointment was the lack of movement in Superior Gold (SGI.v) and while we’ve still long a
long way to repair all the damage done in the previous weeks of May, reporting winners is
easier than reporting losers.
With the two disposal sales last week, we are down to 17 covered positions, three below our
self-imposed maximum. Three are in the green, 14 are in the red.
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$0.59 181.0% $1.14 tgt, #1 idea on FY22 dev
Rio2 Ltd. RIO.v STR BUY C$0.83 22-Apr-18 C$0.57 -31.3% $1.30 tgt May22 permit catalyst
RECOMMENDED STOCKS
Amerigo Res ARG.to STR BUY C$1.36 12-Dec-21 C$1.69 24.3% $2..40 tgt on FY22 guidance
Discovery Silver DSV.v HOLD C$1.77 24-Oct-21 C$1.39 -21.5% Top Ag play, 1st tgt $2.75
QC Copper&Gold QCCU.v SPEC BUY C$0.275 25-Apr-21 C$0.22 -20.0% Now drilling. Easy hold
Superior Gold SGI.v STR BUY C$0.95 3-Apr-22 C$0.78 -17.9% Au prod jr, right place/time
Element 29 ECU.v HOLD C$0.58 6-Mar-22 C$0.375 -35.3% Cu exploreco w/ 2 Peru assets
SPECULATIVE TRADES
Chesapeake Gold CKG.v SPEC BUY C$3.07 20-Feb-22 C$2.76 -10.1% Au leverage, small trade so far
Aldebaran Res. ALDE.v HOLD C$0.72 16-May-21 C$0.81 12.5% May sell on NR window
Palamina Corp PA.v SPEC BUY C$0.295 21-Nov-21 C$0.15 -49.2% Au expl in S.Peru
Altiplano Metals APN.v SPEC BUY C$0.31 17-Sep-21 C$0.24 -22.6% Cheap entry, plan on track.
Minera IRL MIRL.cse hold C$0.195 22-Jul-12 C$0.09 -53.8% CEO change will move stock
THREE TRADE IDEAS FROM IKN670, March 2022 (originally five)
Meridian Mining MNO.v DROPPING C$0.88 20-Mar-22 C$0.73 -5.7% will leave list next weekend
Newcore Gold NCAU.v HOLD C$0.51 20-Mar-22 C$0.415 -18.6% tracking IKN670 idea
Electra Battery ELBM.v SPEC BUY C$5.31 20-Mar-22 C$4.89 -7.9% tracking IKN670 idea
Western Copper WRN.to SPEC BUY C$2.41 20-Mar-22 C$2.17 -10.0% tracking IKN670 idea
LONG-TERM NON-MINING HOLD
Mene Inc. MENE.v adding C$0.67 6-Dec-20 C$0.57 -14.9% LT bet, adding slowly
CLOSED TRADES IN 2022 date closed close price
Great Bear Res GBR.v Jan'22 C$15.83 26-Aug-20 C$28.58 80.5% Bought out by Kinross, print
Copper Mountain CMMC.to Jan'22 C$3.40 18-Jun-21 C$3.78 15.9% Sold 1/2 position in rebalance
Copper Mountain CMMC.to Feb'22 C$3.40 18-Jun-21 C$3.70 8.8% Sold rest on FY22 guidance
11

Trilogy Metals TMQ Mar'22 U$1.84 15-Sep-19 U$1.04 -41.3% killed by US permit reversal
McEwen Mining MUX Apr'22 U$0.89 2-Jan-22 U$0.82 -7.9% No 2022 turnaround, cut loss
Abrasilver Res. ABRA.v May'22 C$0.42 24-Apr-22 C$0.33 -21.4% sold to reduce Ag exposure
Strategic Metals SMD.v May'22 C$0.42 31-Jan-21 C$0.30 -28.6% trade flatlined 1-5 years
2015 to 2021 annual closed positions in appendices below, 2009 to 2014 closed positions in editions IKN553 or earlier
Now for a few notes on covered companies:
Strategic Metals (SMD.v): Position closed. Not much else to add to this today, except to
confirm the closure of the trade on these pages. The decision is driven by the deteriorating
macro and while I like the company and its way of doing business a lot, its exposure to zinc and
the lack of progress in the year+ of holding has done for it.
Abrasilver (ABRA.v): Position closed. Again, this is a decision made on the new risk in the
macro market and no reflection on a stock that’s doing good work on its project in Argentina
and hitting excellent drill assays. Those of you more bullish than I on the prospects for silver
have every right to laugh at me in my face and buy the shares I sold, as unlike the vast
majority of silver explorecos pout there, ABRA offers a cheap share price compared to the high
prospectivity and likely deposit size/grade that would make for a real mine, not just an exercise
in producing a PEA. I sincerely hope this team proves me wrong for selling.
Meridian Mining (MNO.to): Closing coverage. I can’t write “closing position” or “position
closed” because I never opened one. However, of the five stock ideas tabled in IKN670 (when
Ukraine > Fed) it’s the weakest-looking idea going forward and now looks in the wrong frame
to be an interesting trade idea. This company will not be featured on the list this time next
weekend and if I owned shares, I’d sell them and move on.
Superior Gold (SGI.v): It doesn’t need long on Google to see how the Covid outbreak in
Western Australia has continued to affect industries of all shapes and sizes. Not surprisingly, a
FIFO gold mine dependent on shift workers has
been hit as much as any other, with word reaching
this desk that SGI has had understaffing issues
throughout April and into May and, on consulting
with CEO Jordaan, this desk was told that a few
rotations that saw low numbers in “could affect
production in Q2.” When a CEO says “could” in this
context, it means “will” and as your author isn’t the
only one to have heard this (CEO Jordaan was at
the VRIC Vancouver show and plays a straight bat
with everyone), this probably explains why the
stock price reversed after matching the rebound of
peers in the first days of last week.
Am I concerned about this light production compared to forecasts? No, not really. Our house
forecast is for a straight 22k/qtr for remaining next three quarters of 2022, which would bring
total production to just under 82,000oz and the low end of its 2022 guidance (80k to 90k). This
pitches its second half production very conservatively, as SGI itself predicts leaving this year at
a 100koz/year run rate so as long as Q2 is a big miss, there’s nothing to upset the medium-
term or long-term plans at this company. It’s worth underscoring that SFGI under Jordaan has
become a different and (pardon the pun) superior operation than the time when the geology
wasn’t understood and the management spent its time trying to play catch-up on overly
ambitious guidance. So, if Covid throws a small and temporary spanner in the works in this
quarter, we will give them leeway. Judge SGI on what it does in 2022, not in 2q22.
Minera Alamos (MAI.v): Last week we applauded the resilience in MAI compared to the rest
of the market, here’s the other side of the coin:
12

MAI doesn’t really act like a small exploreco, it has the volume and market kudos to be able to
track the GDXJ these days. We await the upcoming catalysts of Santana resource, Santana PEA
and (we hear it’s the big one) the initial Cerro de Oro resource calculation.
Aldebaran Resources (ALDE.v): The webinar presentation from ALDE last week was at least
honest. It was also another exercise on explaining
just why things were going slowly at a Black/Heather
exploreco and while I suppose we should be used to
the concept, it’s still annoying to watch as the
company fails to catch the market momentum wave
and only now starts reporting holes. The company is
going to try to push the drilling season envelope into
June before the high Andean winter closes them
down and “squeeze and extra hole in”, they also say
they’ll try to set up as early as possible in Q3 and
“squeeze in an extra hole” before the planned holes
move forward. The track record leaves little optimism
and reminds one of sequins.
However and after duly considering the content, I decided to hold through on ALDE and by the
looks of the way it traded last week, that was the market consensus. CEO Black freely admitted
they would have to finance again and probably in late Q3 early Q4 but by then, we should have
more information from QDNM/Radio and on the way to the updated resource number. With this
particular region of Argentina attracting more and more positive press (see Regional Politics,
below) it makes very little sense to dump these shares at these lows and while the stock trades
so thinly. Therefore, I hold for the macro in much the same way that I sold a few shares last
week for macro backdrop reasons. It is one annoying stock to own, however.
Discovery Silver (DSV.v): It feels as though I could use the phrase “wild ride continues”
every weekend when it comes to notes on DSV. At least the volatility was in the right direction
this week and while I didn’t sell many, those that went were sold on the best day, Thursday.
13

Newcore Gold (NCAU.v): Glad to see this stock finally catch a bid on Friday, NCAU didn’t at
all deserve to be priced with a 3-handle and the price action was all about distressed sellers,
nothing about the company. Those of you looking for a fliptrade in the exploreco space should
have realized by now the apparent magnet this stock has with the 50c line.
Amerigo Resources (ARG.to): Luzich continued selling last week, which is something of a
bummer. However, the reason we’re here are the strong fundamentals and they take
preference.
Chesapeake Gold (CKG.v): The rebound was very sharp (and welcome), but as usual CKG
mustered very little traded volume and the moves look purely technical in nature. We’re here
for the met results and they should start in the next few weeks. Anything under $3.00 is dirt
cheap as long as the company delivers good numbers on that, therein lays the risk.
The Copper Basket
After twenty weeks of 2022, The Copper Basket shows a loss of 26.07% level stakes:
company ticker price 1/1/22 Shares out Market Cap current pps gain/loss%
1 Copper Mtn CMMC.to 3.42 210.166 544.33 2.59 -24.3%
2 Marimaca Cop MARI.to 3.77 88.118 343.66 3.90 3.4%
3 Western Copper WRN.to 2.00 151.451 328.65 2.17 8.5%
4 Oroco Res OCO.v 2.04 203.4 268.49 1.32 -35.3%
5 Nevada Copper NCU.to 0.71 448.437 224.22 0.50 -29.6%
6 Hot Chili HCH.v 1.53 109.223 122.33 1.12 -26.8%
7 Meridian Min MNO.to 1.18 153.735 112.23 0.73 -38.1%
8 Regulus Res. REG.v 1.06 101.845 98.79 0.97 -8.5%
9 Aldebaran Res. ALDE.v 0.84 114.495 92.74 0.81 -3.6%
10 Kutcho Copper KC.v 0.88 103.94 49.89 0.48 -45.5%
11 C3 Metals CCCM.v 0.16 645.379 48.40 0.075 -53.1%
12 Doré Copper DCMC.v 0.79 66.123 37.03 0.56 -29.1%
13 Element 29 Res ECU.v 0.58 79.24 29.72 0.375 -35.3%
14 QC Copper QCCU.v 0.34 129.06 28.39 0.22 -35.3%
15 Coast Copper COCO.v 0.13 41.335 3.31 0.08 -38.5%
NB: All stocks in CAD$ Portfolio avg -26.07%
The Copper Basket also got its relief rally, but not
The Copper Basket 2022, weekly evolution
5%
quite as perky as the moves seen in PM stocks
0%
with the average improving by just under 3%.
-5%
-10%
There were no unchanged stocks among the 15,
-15%
with the nine winners (CMMC.to, OCO.v, MARI.to,
-20%
NCU.to, WRN.to, ALDE.v, KC.v, ECU.v, QCCU.v) -25%
beating out the six losers (MNO.to, HCH.v, REG.v, -30%
CCCM.v, DCMC.v, COCO.v). As for the big moves, -35%
they were all to the upside with the best (by far)
Kutcho Copper (KC.v up 35.2%) and followed by
Aldebaran (ALDE.v up 15.7%), Copper Mountain
(CMMC.to up 14.1%) and Marimaca (MARI.to up 13.0%). The common trait with those big
moves is the rebound factor, all coming off oversold lows at the end of the week before last.
The rebound was driven by the obvious candidate, as copper improved from its lows and, a few
days of overselling aside, has managed to hold that U$4.20/lb level and find buyers afterwards.
The hourlies chart makes the copper rally looks pretty spectacular and would be a bullish look
14
ts1naJ ht9naJ ht61 dr32 ht03 ht6bef ht31 ht02 ht72 ht6raM ht31 ht02 ht72 dr3rpA ht01 ht71 ht42 ts1yam ht8 ht51 dn22
source: IKN calcs

this weekend, but let’s keep the sentiment as sober as possible by offering the annual chart,
with more context about the relief rally:
As for macro market commentary, here’s Canada’s FP which does it short’n’sweet (11):
London copper prices edged higher on Friday, poised for their first weekly gain in
seven, as optimism over the easing of some COVID-19 restrictions in top consumer
China lifted demand prospects, while a pullback in the U.S. dollar added support.
It made me reflect on how many “COPPER DROPS ON CHINESE DEMAND CONCERNS”
headlines I’d read in the week before last and just how many bizwires chase market moves with
explanations that fit (at the time). Here’s another snippet, also from a Reuters wire note but
earlier in the week as news reached the market Shanghai would begin its official unfreezing:
"Shanghai is coming out of lockdown gradually and that is giving rise to demand hopes
for cyclical commodities in particular," said Commerzbank analyst Daniel Briesemann.
"From a technical point of view, most of these metals were oversold and sentiment was
quite gloomy so it could only get better."
To be fair, this is also post-fact justification of a market move. It gets a pass more easily
because it explains why copper went up, instead of down . Enough blather, let’s move on to
our weekly look at copper inventories with data supplied as ever by Cochilco:
 It was another week of modest moves in copper inventories, with an aggregate drop of
5,297 metric tonnes (mt) over the three official world systems. The total in stock this
weekend kept just above the 300kmt line, 302,475mt
 SHFE stocks dropped by a small and neat 936mt,the total closing Friday at 54,436mt.
Word out of China is of a Shanghai slowly coming out of its Covid hibernation (I fully
recommend Sinocism mailer updates), but by the same token the Chinese government
doesn’t seem in much of a hurry. President Xi is either rightly proud of the “Zero Covid”
policy or scared rural China will go the way of North Korea if things get out of hand.
 The LME’s inventory total dropped by a small 2,400mt to close at 174,600mt. Inside the
headline number, we note stocks arriving in Europe (Rotterdam +1,425mt) and USA
(New Orleans +3,450mt), but leaving those recently swollen warehouses in South
Korea (-5,200mt) and Taiwan (-1,800mt).
 Finally, Comex was also a net loser of stocks last week, down 1,961mt to close at
73,439mt.
Here are the dedicated SHFE charts that show the relatively benign week just gone, as well as
the oft-mentioned tightness in copper supply:
15

Shanghai Futures Exchange Warehouse Stocks, 2014 to date
400000
350000
300000
250000
200000
150000
100000
50000
0
16
31'13ceD dr32 ht02 ht51 ht01 ht5tco ht03 ht52 dn22 ht71 ht21 ht6pes ts1von 5102ht72ced ts12 ht71 ht21 ht7guA dn2tcO ht4ceD ht92 ht62 ts12 ht61 ht01 7102
ht5von
ts13 ht52 dn22 ht42 ht91 ht41 ht9 9102
dr3bef
ts13 ht62 ts12 ht51 ht01 0202ht5naj 0202ts1ram ht62 ts12 ht61 ht11 0202ht6ced ts13 ht82 dr32 ht81 ht21 ht7 2202dn2naj ht72 ht42
Mt Cu
|
source: Cochilco
SHFE copper inventory levels, 2018 to 2022
400000
350000
300000
250000
200000
150000
100000
50000
0
1 2 3 4 5 6 7 8 9 01 11 21 31 41 51 61 71 81 91 02 12 22 32 42 52 62 72 82 92 03 13 23 33 43 53 63 73 83 93 04 14 24 34 44 54 64 74 84 94 05 15 25
MT Cu 2022
2021
2020
2019
2018
source: Cochilco data
We’ve made our point on that umpteen times, no need for a repeat today. Now for notes on a
couple of basket stocks:
Hot Chili (HCH.v): HCH came out with another long 0.6% CuEq drill assay from the same
zone of Cortadera, which didn’t manage to move the market this time. The market is now used
to the idea that Cortadera will see its average grade improve slightly in the next resource
update, but as these latest drill results are essentially infill, tonnage improvement will be minor.
Marimaca (MARI.to): The better copper Chilean exploreco on our list has done better than
HCH over these last two weeks and for two reasons:
1) It’s a better company with a better project
2) It had strong assay news last week
Though to be fair, the May 19th NR (12) announcing 420m of 0.54% copper from surface (i.e.

the top part in oxides that will expand the resource and should improve economics, the bottom
part in MAMIX transition that would also make the open pit) didn’t move the market. Instead,
MARI simply continued to track the big boy COPX line of producer stocks on relatively low
volumes.
However, the drill results from last week were good and hole 19 in particular has the potential
to expand the pit oxides pit shell. Next major milestones include the resource update planned to
arrive next month (MARI will be forgiven if that milestone bleeds slightly into July and Q3),
followed by the likely decision to move to Feasibility Study level soon after.
Kutcho Copper (KC.v): We’ve mentioned the house of pain that KC has been through since
closing its agreement with WPM in February, but even overselling has its limits.
It so happens that the previous week’s distressed selling in KC reached its climax on Friday
afternoon, so the rebound on notably light volume last week makes for an impressive
percentage pop. However, the real news here is that the selling in KC probably has its limit. We
haven’t had any newsflow from the stock recently, all you see above is trading and technical
only, so if KC were to revisit the lows seen six trading days ago there may be a lucrative trade
in the offing. Even more so if the stock decides to drop quietly on low volume.
C3 Metals (CCCM.v): A case study of how a small and over-promoted company with only one
property of any real interest will try to spin bad news into good in order to justify spending
more money on its project. The NR “C3 Metals’ Deep Drilling Provides Key Evidence of Porphyry
System at Jasperoide Project, Peru” (13) is packed with geological babble of the sequin-
throwing type, with key evidence of this and that mineralized formation typically connected with
world class porphyry systems. The company lays out so much information and clues on how
close they must be to a big hit, the only thing apparently lacking in its long drill intersects is
copper. However, the team is happy to move
ahead with its second phase of deep drilling
and try to find the porphyry they (must have
only just) missed in the first two deep holes
(as although we don’t have the assays back
from the second, you can bet dollars to donuts
they would have told us if there was
something visually exciting from the core to
date)., From the beginning, this desk has
warned about the obvious weaknesses of a
company that had picked a project Hochschild
(HOC.l) has already drilled and were happy to
sell to a third party as its vehicle. As serious
company, or one with alternative projects or
targets of worth on its books, would save its
money and move on. Shareholders should do just that, before their 50% losses become 90%
losses. Do not feed the animals.
17

The Producer Basket
After twenty weeks of 2022, the Producer Basket shows a gain of 0.46% to level stakes:
company ticker price 1/1/22 Shares out MktCap(U$Bn) current pps gain/loss%
1 Newmont NEM 62.02 797.44 53.58 67.19 8.3%
2 Barrick GOLD 19.00 1779 36.93 20.76 9.3%
3 Franco-Nevada FNV 138.29 191.192 26.58 139.02 0.5%
4 Agnico Eagle AEM 53.14 454.904 24.50 53.86 1.4%
5 Wheaton PM WPM 42.93 450.3 18.72 41.58 -3.1%
6 Gold Fields GFI 10.99 887.72 10.16 11.44 4.1%
7 Kinross Gold KGC 5.81 1296.5 5.83 4.50 -22.5%
8 B2Gold BTG 3.93 1055.6 4.35 4.12 4.8%
9 Alamos Gold AGI 7.69 392.503 2.94 7.49 -2.6%
10 Sandstorm SAND 6.20 191.4 1.24 6.48 4.5%
All prices and stock quotes in U$ Port. avg 0.46%
The rebound we enjoyed was enough to change six red blobs on the above table to three, with
nine of ten stocks going up on the week and just one loser, namely Gold Fields (GFI). The
biggest weekly winner was the stock that took the biggest hammering in the previous weeks, as
Kinross (KGC up 8.2%) rebounded first and fastest. Agnico (AEM up 6.4%) took silver medal
position on the week and aside GFI, if there were one we could call an under-performer, that
would be Barrick (GOLD up 1.6%). On the other hand, GOLD is now the best YTD performer of
our ten charges thanks to the shellacking taken by the smaller companies in recent weeks.
Overall, the GDX benchmark out-performed our choice of ten by about a tenth of one percent
and, as seen on the tracking chart, we’re both above the water again after a single week of
bathing. We’ll find out this time next week if the relief rally has legs.
The 2022 Producer Basket: Weekly performance and
35% comparative to GDX control
30%
25%
20%
15%
10%
5%
0%
-5%
-10%
-15%
Agnico (AEM): Potentially boosted from the widely disseminated news that, for the first time
since 2019, the large precious metals fund Paulson & Co (him of the housing short) had added
to its position in AEM during 1q22, according to its 13K posted last week. However, this addition
was almost certainly an automatic one and connected with the shares of Kirkland Lake held by
the fund becoming AEM as the merger was consummated.
Kinross (KGC): This week’s best performer is
basically a wash over two weeks (chart right), as
it was the worst performer the week before last.
Nothing much to see here, aside from classic
market leverage to “cow s__t” companies
compared to Tier Ones. Bristow’s opinion and not
mine, of course, as we retail have the advantage
of being able to look nearer-term than a CEO for
a good price/value deal.
18
ts1naJ ht9naJ ht61 dr32 ht03 ht6bef ht31 ht02 ht72 ht6ram ht31 ht02 ht72 dr3rpa ht01 ht71 ht42 ts1yam ht8 ht51 dn22
The 2022 Producer Basket: Percentage difference
between GDX benchmark & basket (negative = IKN ahead) 5.0%
4.5%
4.0%
ikn 3.5%
gdx control 3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
source: NYSE, IKN Calcs ts1naJ ht9naJ ht61 dr32 ht03 ht6bef ht31 ht02 ht72 ht6ram ht31 ht02 ht72 dr3rpa ht01 ht71 ht42 ts1yam ht8 ht51 dn22
source: IKN calcs, NYSE data

The TinyCaps List
After nineteen weeks of 2022, the TinyCaps show a loss of 20.08% to level stakes:
company ticker price 1/1/22 Shares out Mkt Cap current pps gain/loss%
Aurelius Min AUL.v 0.24 37.134 9.47 0.255 6.3%
Golden Pursuit GDP.v 0.13 34.638 3.46 0.10 -23.1%
Infield Min INFD.v 0.06 48.276 1.93 0.04 -33.3%
Kingfisher Met KFR.v 0.30 84.57 24.10 0.285 -5.0%
Latin Metals LMS.v 0.12 57.296 6.30 0.11 -8.3%
Manitou Gold MTU.v 0.06 344.47 10.33 0.03 -50.0%
Melkior Res MKR.v 0.295 24.011 5.88 0.245 -16.9%
Precipitate Gold PRG.v 0.105 129.322 9.05 0.07 -33.3%
Signature Res SGU.v 0.07 238.4 11.92 0.05 -28.6%
Winshear Gold WINS.v 0.08 61.585 4.62 0.075 -6.3%
Prices in CAD$, data from TSXV basket avg -20.08%
This section attempts to track the tinycap mining sub-sector of the market, our ten companies
chosen under the following criteria to put together a list representing the state of play in the
sub-sector of tinycap exploration company stocks. At least, that’s the plan.
 Market capitalization of under $20m. They have to be tiny. In two cases I’ve stretched the window a
little and allowed sub-U$20m market capper in that are just over the C$20m level, but the spirit is unaltered.
 A “non broken” stock price and project story. There are literally hundreds of tinycap juniors of the right
size, but it was a particularly depressing exercise to trawl through the whole of the TSXV and find companies
that are small enough, but with life in them. The vast majority of sub-$20m stocks are broken stocks, either
traded to death on the exchange or with projects that are a bust or with entrenched management more
interested in their monthly paycheck than anything else.
 Likelihood of meaningful newsflow in 2020. This connects to the company’s “unbroken” status, as we
want news and potential catalysts from companies with projects that can work.
 Decent management if possible. When you are down among the little guys it doesn’t pay to be too
choosy, but still I preferred companies that have teams or people with good peer reputations.
There were two winners (KFR.v, WINS.v), four 15% TinyCaps, 2022 weekly tracker
unchanged stocks (INFD.v, LMS.v, MTU.v, 10%
PRG.v) and four losers (AUL.v, GDP.v, MKR.v, 5%
SGU.v) on the week and another net loss from a 0%
sector that cannot catch a sustained bid. When -5%
volumes drops and bids evaporate, these -10%
tinycappers will often jag lower on very little -15%
volume and such is the case today. -20%
-25%
Kingfisher Metals (KFR.v): The highly volatile
trading in KFR continues, with a wide gap
between bid and ask. However, the overall result
is a decent rally, back from the high-teens prices that recently had me interested in buying KFR
as a potential high-risk trade. I didn’t pull the trigger and missed the lowest prices, so more fool
me but when we consider the ten-day chart (right) there’s a certain smell about the timing and
pattern of the trades. When considered over the last ten days, those 150k-ish trades coming in
at the same time every day scream of a propped share price. As for reasons…
April 27, 2022 – Kingfisher Metals Corp. (TSX-V: KFR) (FSE: 970) (OTCQB: KGFMF)
(“Kingfisher” or the “Company”) is pleased to announce a non-brokered private
placement of charity flow-through units (the “Charity FT Units”) at a price of C$0.28 per
Charity Unit and flow-through units (the “FT Units” and, collectively with the Charity FT
Units, the “Offered Units”) at a price of $0.24 per FT Unit of the Company to raise
aggregate gross proceeds of up to approximately C$3.0 million (the “Offering”). The
Offered Units will be offered pursuant to…(continues)
…the currently open flow-through placement gives us the possible motive for prop trades. We
19
dn2naJ ht9
naJ
ht61naJ dr32 ht03 ht6bef ht31 ht02 ht72 ht6ram ht31 ht02 ht72 dr3rpa ht01 ht71 ht42 ts1yam ht8 ht51 dn22
source: IKN calcs, TSX data

await news on whether its 2022 drill campaign, supposedly ready to roll on May 1st, is
underway or not.
Precipitate Gold (PRG.v): Our take on news on
the deal with Barrick last week was that it mattered
more to Barrick and its Pueblo Viejo mine than it did
to Precipitate. The market eventually agreed, as the
initial pop at the bell Monday morning was sold and
sold again all week, ending UNCH at 7c with a flurry
of selling on Friday.
We remind readers that PRG has just had a whole
bunch of shares from its late December placement
go free trading. It showed last week.
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’s possible in the future
I may buy shares in one or several of these stocks, at the moment both my opinion and wallet are strictly neutral.
Regional politics
Colombia: A significant late surge for Rodolfo Hernández
As the final week of polling and campaigning is now behind us, Colombia now has its one week
“reflection period” before the election next Sunday, May 29th (including the “ley seca” law that
prohibits the sale of alcohol next weekend) and the week has brought something of a surprise,
as the first round is no longer forgone conclusion.
When we began our coverage of this important election for the mining industry in LatAm, way
back in IKN657 dated December 26th 2021 in the note entitled “Colombia: A first overview of its
2022 Presidential election”, we presented the likely candidate from the Left, Gustavo Petro (was
leading and is still leading), the centre Sergio Fajardo (who has faded badly), the right
(undecided and a tough call at the time, they’ve gone with Fico Gutiérrez) and finally Rodolfo
Hernández, who was already making some waves. Here’s how that biography began:
The wild card is Rodolfo Hernandez: Despite his age, he’ll be 77 next year,
Hernandez is without doubt the wild card in this year’s field and is already shaking up
the field with his populist attention grabbing style. A successful businessman in the
housing and residential land sectors, specifically around his home region of
Bucaramanga, Hernandez has vowed to make no pact or coalition with any other party
(rare in Colombia) and even rarer, is funding his own campaign.
Up to a couple of weeks ago, Rodolfo Hernández had been polling at roughly the same level
and hadn’t made any sort of progress against the frontrunner candidacies of Petro or Fico, but
a raft of recent polls (14) have seen him surge and in one or two of them, he’s even in a
technical dead-heat for second place with Fico Gutiérrez. A survey by pollster CNC for the
current affairs magazine Semana gave these numbers:
 Petro: 35.8%
 Gutiérrez: 20.8%
 Hernández: 19.1%
The Invamer polling company also gave its last official and public poll (valid votes only)
 Petro: 40.6%
 Gutiérrez: 27.%
 Hernández: 20.9%
Finally, there is reliable talk of another survey last week, also by pollster CNC but commissioned
by a private businessman and therefore not officially on the airwaves, with these numbers:
20

 Petro: 38%
 Gutiérrez: 23%
 Hernández: 16%
This is a significant late surge for the “outsider candidate” that has added between seven and
ten points to his voter intention in the last couple of weeks, the type of surge that could see
Hernández pip Fico for second and make the run-off. The drive is apparently from Colombians
unhappy with the choice of either the left winger or the establishment that brought them the
highly unpopular Ivan Duque (with the shadow of Alvaro Uribe cast long behind him). The
move toward Hernández is therefore the protest vote, the none-of-the-above in a Colombian
style that combines disaffection for the political system with a populist candidate. We’ve seen
this movie before. Then on Friday more fuel was added to the momentum fire as candidate
Ingrid Betancourt, whose campaign has gone badly and only had 0.6% of voter intention last
week, announced she was stepping down as candidate and would throw her support (or what
was left of it) behind the Rodolfo Hernández candidacy (15). She also said that she’d “phone
Sergio Fajardo” and ask him once again to consider stepping aside and backing Hernández, as
he represents the only alternative to the current political impasse. “He’s the only one who can
defeat the system”, she said.
Betancourt’s endorsement of Hernandez is probably worth a point, but if Fajardo joined this
very late move it would probably push Fico out of the second spot. Long story short, the
Hernández surge has put the cat among the pigeons, the first round vote in Colombia is
suddenly a hot topic again and “Fico vs Petro Run-Off” is no longer a foregone conclusion. We
know Petro will get the most votes next weekend, the questions are now 1) how many and 2)
who joins him in round two. Regarding the former, his staunch supporters are still pushing the
idea of a 50%+1 vote win in round one and automatic victory, but Hernández’s surge has taken
around three points from Petro’s voter intention and may eat more away by next weekend.
Therefore the big uncertainty is who will join Petro in the run-off and if it’s Hernández, polls
suggest that Petro would be even more of a lock to win. As for Fico, the panic was showing in
his supporters last week as they took to the airwaves to insist that, even after his polling surge,
Hernández couldn’t catch Fico. For example, right wing congress member Daniel Barguil said it
was “impossible” to see Fico beaten for second place and when politicians use that sort of
language, you know they are rattled.
Bottom line: The late rise of Rodolfo Hernández has surprised many, this desk included, and
adds new uncertainty into the mix but it has to be stated clearly, all polls to this point have
Petro beating Hernández in round two by a greater margin than he would beat Fico. That might
change between the two rounds, with the second round vote set for June 19th, but at this point
most roads still point to a Gustavo Petro and his left wing agenda. Regarding that, you can
think what you want about the rest of his policy book and while outside observers have tried to
play down the amount of reform a Petro presidency would be able to bring to Colombia (his
party is a long way from control of Congress, for example), in the case of mining the situation is
clearly negative. We all know this industry needs a conducive government for success, so all
Petro need do would be to become a constant block on law projects, rule changes permit
awards etc. In other sectors of the Colombian economy his eventual rise to the Presidency may
be benign, but his anti-mine colours have been flying for many years and he makes no bones
about them. IKN680 next weekend will bring at least the unofficial results and first tendencies
and conclusions from election Sunday.
Jill Biden does LatAm
The moves and potential shift Left in Colombia brings repercussions for the entire region,
including the way its biggest neighbour in North America treats the South America landmass. To
that end, it’s interesting to witness the visit of First Lady Jill Biden to Ecuador last week (16),
first stop on a three-leg trip which then took her to Panama (thereby book-ending Colombia)
and Costa Rica, before presumably flying on to Davos to get in a bit of skiing.
However, her two days in Ecuador are the most important part of the trip as it comes art the
21

same time as the US Congress is (presumably) about to pass the United States-Ecuador
Partnership Act of 2022, designed to deepen relationships between the two countries, support
(etc). Ecuador has been singled out by The USA to be its new BFF in the region, firstly for the
practical reason that it’s running out of non-lefty jurisdictions to be friendly with and secondly
due to the growing influence of China in the country (and the wider region). Though not exactly
full-court politics, this week’s visit at least tells us The USA is paying attention to South America
and is looking to counter China’s growing influence. It’s also a clear demonstration that it thinks
it’s longest-standing bilateral relationship, that of Colombia, is about to hit a quiet period.
Robert Friedland on mining ESG
It’s conference season again and the world is trying to gather physically, rather than just
virtually, in several locations. The most interesting conference last week was the “New
Economy Gateway Latin America” event, put together by Bloomberg and held in Panama City,
Panama, at which one round table called “Critical Minerals and the Green Revolution” featured
Robert Friedland expounding his favourite subjects (metals, the future, Robert Friedland) (17).
This isn’t the first conference panel done by Friedland recently, last week he was in Africa
putting a different slant on his main message by comparing Africa’s low historical carbon
footprint to that of other places. After pointing out that the industrialized nations had developed
by releasing massive amounts of carbon into the atmosphere, especially compared to the
African continent, he went on to note how LatAm copper mines are “…very low grade, and they
produce a lot of global warming gas. They have a lot of work to do to make them green. It’s
Africa where you have a young population where you have the possibility for introducing
sustainable development.”
It was therefore notable to see how he changed his speechifying when landed in Panama.
Suddenly, the key point wasn’t the “E” of ESG, but the “S” as he charged mining companies to
“reinvent their relationship with communities” in order to gain social licenses to grow output
and feed the clean-energy transition”. The basic premise that “copper is the new oil” didn’t
change, but gone was the carbon footprint argument and, in its place, came the social licence
issue. We quote (18):
Referring to ongoing community protests that have stalled output at MMG Ltd.’s Las
Bambas copper mine in Peru, he said: “Miners need to re-examine the enterprise from
day one to try to prevent that kind of problem from occurring.” With regards to ESG, he
said: “Companies that get it right will inherit the industry. Companies that don’t, will die.”
However he pulled back from making the obvious conclusion, the one that every mining
company now jumping on the “We Save The World” ESG bandwagon needs to hear from a big,
Friedland-sized industry voice (rather than a small, backwater newsletter writer). How can
mining companies claim they are the future for a friendlier, greener world in which they are
frontline carers for countries and environments, when they cannot care about the frontline of
people most affected by their operations? In order to truly promote ESG and make mining into
a sector for future optimism and aspiration the industry must put its own house in order
because if mining wants to change its image and show the world it’s working for the
improvement of the world, it cannot treat locals with disdain. It isn’t going to work.
Argentina improving mining scene attracts media attention
The panel on which Friedland sat also included, Fernanda Avila, mining secretary of Argentina
(i.e. minister of mining) who remarked during the event that while Argentina’s mining industry
had been slow to get off the ground, with the rise of ESG as a key factor a “silver lining” was
now showing. She remarked after hearing Friedland out that “Argentina can introduce the ESG
framework from the beginning of the life of the projects.” That’s fair enough, then after the
show she had the opportunity to record a one-on-one with the Bloomie reporter to expand on
the vision Argentina now has for its mining sector, with general-level questions pitched toward
the generalist business audience. Ms. Avila answered in English and spoke fluently enough,
though with a couple of small grammar errors. That’s no biggie, but you’ll see a couple of them
in the quotations below (19). When asked whether Argentina would go the apparent route of
Chile or Peru and raise taxes on mining, here’s her reply (transcript):
22

“From the cabinet level we’re doing a big impulse in the mining sector. Mining
investment is being driven by the new seek (search) for new mining minerals and
metals for the transition to lower carbon economies, so we’re trying to be more
supportive to all the different industries/industrialization of mining in Argentina, so we’re
keeping things (i.e State burdens) as they are right now and fostering investments to
welcome different investments in lithium and copper into Argentina.”
When asked whether mining would be dropped from the proposed export tax currently going
through Argentina’s legislature, she answered:
“We’re keeping the situation as it is, so what we’re doing is giving new policies to
promote investments from the mining sector and to…give the sector more certainty
about what they are trying to do to develop the industry because we know that the
world now needs more minerals to shift towards cleaner energies.”
They then talked lithium a little, in which the reporter asked whether the so-called “Lithium
Triangle” of Chile, Argentina and Bolivia would turn into an OPEC-like cartel a question
prompted by a Friedland aside during the panel show. Secretary Avila flatly denied any cartel
formation and in fact stressed the opposite, on how the region lacked essential infrastructure to
fully develop it lithium potential and was keen to welcome private capitals. To wit, she noted
that Argentina already has six projects in construction worth a total of U$10Bn. Finally and back
to a subject closer to your author’s heart and pocket, she had this to say when asked about
copper projects:
“We are five important projects, which are in more advanced stages and feasibility
study stages and we think that with the start-up of those projects we will put ourselves
in (among) the top producers of copper in the next five years and this year, Argentina
granted a permit to one project that’s called Josemaria, owned by the Lundin Group,
and that project will produce over 130,000 tonnes of copper (per year) and that is very
important for the supply chain, as you know EVs use lots of copper so the world will
need more and more copper in the next few years, so I think we have a promising
future with copper, too.”
Last week’s event in Panama should mark another step forward in Argentina’s charm offensive
on mining and the country’s new and welcoming attitude toward mining FDI. The “Green
Future” vision is the way to sell an expansion of mining to its own population and there’s no
doubt about the country’s untapped mining and geological potential, be it for lithium, copper or
other metals. The only thing we the investor need do is to carefully note which provinces are
pro-mining (e.g. San Juan, Catamarca) which are anti (e.g. Mendoza, Chubut) and not try to
force opinions on to populations.
Differences in government accountability in Chile and Peru mining
We do Peru first and the process to censure (i.e. quasi-impeach) three ministers in the current
Pedro Castillo government moved forward last week (20), as well as new impetus to do the
same to his Prime Minister. In the line of fire are the following:
 Prime Minister, Álvaro Torres
 Minister of the Interior, Alfonso Chávarry
 Minister of Employment, Betssy Chávez
 Minister of Energy and Mining, Carlos Palacios
For us mining FDI people we care most about Mining Minister Palacios, who is in fact now
under two separate censure proceedings brought by two different members of congress. The
reasons include his lack of experience, but now also include the way he has apparently packed
his ministry with people from (his and the President’s) Perú Libre party, handing out cushy,
high, salary jobs to unqualified party colleagues. Indeed, this week Buenaventura (BVN)
stalwart (and oligarchy figurehead) Roque Benavides remarked to the press, “I’ve been in this
(Peru mining) sector for 40 years, I’ve never heard of these people (now running MINEM).”
However, the other “censure” processes are relevant to us as well, because if all three prosper
in Congress (and it’s looking that way, with a matter of process and time between us and the
results) it would probably mean another wholesale change of cabinet for Pedro Castillo, and
that would definitely happen if PM Torres falls. This coming week should see the censure
23

processes get their dates fixed for the Congress for at least the three ministers.
Now for the difference between how the Castillo government in Peru takes over positions of
government power and the system in a serious country, namely Chile. On March 30th as part of
the changing of the guard as new President Boric took over from ex-Prez Piñera, Boric
nominated two women for the board of directors of the State copper company, Codelco (21).
Both nominations are highly qualified with both academic and real world experience in the
sector, but while Josefina Montenegro has been ratified, Pamela Chávez’s nomination has been
rejected because one of the stipulations is to have completed five years of degree-level
academic studies and it so happens that, despite having a degree from the University of Hawaii
USA, Ms. Chávez finished her course in just four years. That makes her ineligible and the
Chilean opposition have stopped her from taking her seat.
Chile: Dominga to set off a new round of hysteria
In other Chile news and much as expected, the legal battle between Andes Iron and the
government over the contentious Dominga iron ore project received a non-judgement from the
Chilean courts last week. Here’s Reuters (22) and here’s the excerpt:
Chile’s top court on Wednesday turned down appeals filed by communities and
environmentalists against the controversial Dominga mining project, saying a final
decision needs input from President Gabriel Boric’s administration.
Last year, environmentalists and surrounding communities appealed a ruling from a
lower court that tossed out a decision by a regulator that denied the company permits.
In its ruling, the Third Chamber of the Supreme Court said that it was turning down the
appeals because it “determined that there is no final judgment that can be reviewed by
this court,” adding that the final decision on the environmental evaluation is “pending a
resolution from the administrative authority.”
The report goes on to explain, the authority in question is the “Consejo de Ministros”, (counsel
of ministers), an all-ministerial body led by the Minister of the Environment Maisa Rojas and
includes the ministers of Agriculture, The Interior, Health, Economy/Tourism/Development,
Energy, Public Works, Transport/Communications and Mining/Planning (that last one being our
friend Marcela Hernando). Be clear, the make-up of this counsel is stacked against Andes Iron,
Dominga is one of the very few mining projects explicitly mentioned by new President Boric
during his election campaign, as well as a mention in his acceptance speech when winning.
Therefore, when Dominga comes up in front of the ministerial counsel, expect it to get the
thumbs-down and when it does, the shrill cries from the Chilean right wing (and there are
many) about Boric and his anti-mining agenda that’s killing the country etc. When they do,
you’re wisest course of action is to remember that Dominga is not representative of the state of
mining in Chile, it’s a political/politicized one-off and once the noise has died down, Chile will
still be mining friendly.
Nicaragua political risk update (including some mining this time)
In March this year we ran a small series of political risk updates on the worsening conditions for
human rights under the dictator Daniel Ortega of Nicaragua, documenting how his increasingly
authoritarian government was closing down press outlets, hundreds of NGOs and arresting
people speaking out against the oppressive regime. Recently, Nicaragua has been the centre of
a small political storm when the USA (as hosts this year) uninvited Ortega and his government
from the upcoming Organization of American States (OAS) summit in June. For a while, the US
move threatened to see other countries boycotting the event until Nicaragua said that it wasn’t
even interested in attending (thereby letting AMLO of Mexico and Arce of Bolivia, among others,
off a hook of their own making).
However, the latest news from Nicaragua has its mining industry as backdrop. Two weeks ago,
the regional Catholic bishop, Monseñor Rolando Álvarez, spoke out at an assembly mass and
decried the development of the Pavon mining project located in his diocese at the nearby town
of Rancho Grande. The project, owned and developed by Calibre Mining (CXB.to), is now in
feasibility stage and nearing the moment when EIA and construction permits are set to be
awarded, It is highly unpopular in the zone and historically opposed by the local population,
24

even to the point when a few years ago Daniel Ortega (via his wife) agreed with locals and told
the previous operators, B2Gold, to shut down development. Now that has changed, which
brought the bishop’s words (translated (23):
“The area (Cerro Pavon) is again being exposed to death, a crime is being committed
against nature and the people of Rancho Grande are being disrespected, because a
ministerial resolution said there World be no more mining in Rancho Grande, and now
there’s the mining company in Cerro Pavon. We want to say, with sincere hearts, no
more mining in Rancho Grande, no more mining development in Cerro Pavon.”
The reply from the Ortega government came this week. This Thursday 19th May, Monseñor
Álvarez announced via the Catholic church TV channel that he and another bishop had been
aggressively tailed by members of the Nicaragua secret police all day and that, when he had
confronted the people tailing him, they answered that they were following orders. The next
day, Friday May 20, the Nicaragua government ordered the immediately closedown of the
Catholic church’s TV channel (24). This adds to the recent accusation made by Ortega that the
bishops in his country have “a criminal terrorist mentality” and are “demons in cassocks”. Nice
man. This publication feels it important you know exactly what you are sponsoring by buying
and owning shares of Canadian mining companies operating in Nicaragua.
Market Watching
Updating the Starcore (SAM.to) arbitrage opportunity
The as-yet unconfirmed move by Mexican private equity group Semper to buy out Starcore Intl
(SAM.to) at 35c per share has three notes of update this week, aside from the fact no official
offer has come from the private equity group as yet:
1) You have to go back a long way to find insider buying from SAM CEO Robert Eadie,
who last bought stock three years ago at 7c. However, it’s notable that he has bought
around 180,000 shares of his own company since the moment Grupo Semper made
contact with the company and he’s now been joined by another director, who bought
41k shares the day before Semper made its first public announcement
2) On Monday 16th SAM announced (25) its board had approved a $2m exploration
program on its assets for 2022, undoubtedly prompted by the thought of losing their
jobs and a defensive move to keep current shareholders onside
3) The share price fell last week:
As seen here, SAM spent most of the week trading in the 25c to 26c range. The market isn’t
taking the Grupo Semper intention too seriously at the
moment and that may be an error, as even the official
word of a 35c hostile bid will push the price over 30c.
There will be room left for arbitrageurs, but the
downside at this weekend’s price looks limited and
assuming Semper is as serious as it sounds, traders can
scalp an easy 20% without needing to wait and see if
the bid eventually prospers.
On due reflection this weekend and seeing how CEO
Eadie and his board have shown clear defensive signals,
I believe we can take this unofficial bid move seriously.
As I currently have some treasury cash available, if the
market allows me in at 25c next week I will buy a few SAM as a sidebet trade, following it here
in Market Watching and not adding it to the main Stocks to Follow list.
Conclusion
IKN679 is done, we end with bullet points:
 IKN678’s conclusion included a bullet beginning, “I’m not expecting this to be a popular
25

edition of The IKN Weekly” and that prediction came true, with six unsubscribers over
the week. Not quite a record, as that was and will always be the weeks of April and
May 2013, but our newly reticent position toward the market and the unrelenting
bearish atmosphere out there combined largely as expected. It’s better for business to
be permabull, no surprise there.
 If I were braver, I wouldn’t just be fishing for a few Starcore (SAM.to) next week on an
unofficial side bet and would wade into Copper Mountain (CMMC.to), not fret too much
if it drops back toward the C$2.00 line and build a position to sell back to the market in
Q4 this year. But I’m not brave at all.
 If you think your politics is going bizarre mondo, you should check out Colombia. At
least the campaign period for round one is done, but there’s very little “cooling off
period showing to date. Next Sunday is a big day for mining in LatAm and it’s not
looking great.
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 wishes, Mark
Footnotes, appendices, references, disclaimer
(1) https://www.reuters.com/article/usa-fed/quotes-powell-says-fed-wont-hesitate-to-move-past-neutral-
idUSKCN2N31YO
(2) https://www.frbsf.org/economic-research/files/wp2016-11.pdf
(3) https://www.nuevamineria.com/revista/larrainvial-cobre-fluctuara-entre-us-35-y-us-4-la-libra/
(4) https://www.latercera.com/pulso/noticia/larrainvial-dolar-llegaria-a-900-a-fin-de-ano-y-cobre-caeria-a-us35-por-
eventual-recesion-global/5BU7Z6ALYFDBDKD3BUSHAV5IGE/
(5) http://theaustralian.com.au%2Fbusiness%2Fdataroom%2Fminer-hires-bank-to-sell-eva-copper-project-in-
queensland%
(6) https://cumtn.com/investors/press-releases/2022/copper-mountain-mining-responds-to-market-speculat-4307/
(7) https://cumtn.com/investors/press-releases/2021/copper-mountain-mining-provides-senior-management-3011/
(8) https://cumtn.com/investors/press-releases/2022/copper-mountain-mining-announces-executive-managem-4279/
(9) https://cumtn.com/investors/press-releases/2021/copper-mountain-mining-announces-updated-economics-3859/
(10) https://www.australianmining.com.au/news/copper-mountain-acquire-altona-93m-deal/
(11) https://financialpost.com/pmn/business-pmn/copper-set-for-first-weekly-gain-in-seven-on-demand-hopes-dollar-
retreat
(12) https://marimaca.com/mamix-discovery-continues-to-grow-mar-19-extended-returns-420m-at-0-54-cut-from-
surface/
(13) https://www.c3metals.com/c3-metals-deep-drilling-provides-key-evidence-of-porphyry-system-at-jasperoide-project-
peru/
(14) https://cnnespanol.cnn.com/2022/05/20/encuestas-elecciones-colombia-orix/
(15) https://www.semana.com/nacion/articulo/atencion-ingrid-betancourt-declina-a-su-candidatura-y-apoya-a-rodolfo-
hernandez/202251/
(16) https://www.elcolombiano.com/internacional/estados-unidos-se-acerca-a-ecuador-en-medio-de-elecciones-en-
colombia-LH17545952
(17) https://www.bloomberg.com/news/videos/2022-05-19/critical-minerals-and-the-green-revolution-video
(18) https://www.mining.com/web/esg-to-decide-winners-losers-in-mining-says-friedland/
26

(19) https://www.bloomberg.com/news/videos/2022-05-19/argentina-trying-to-foster-lithium-copper-investments-video
(20) https://larepublica.pe/politica/2022/05/17/anibal-torres-60-considera-que-el-primer-ministro-debe-ser-censurado-
segun-ipsos-congreso/
(21) https://www.biobiochile.cl/noticias/economia/negocios-y-empresas/2022/05/19/integrante-para-directorio-de-
codelco-nombrada-por-boric-no-podra-asumir-por-falta-de-un-requisito.shtml
(22) https://www.mining.com/web/chiles-top-court-puts-dominga-mining-project-decision-on-boric-admin/
(23) https://100noticias.com.ni/nacionales/115350-monsenor-alvarez-explotacion-minera-cerro-pavon/
(24) https://www.aciprensa.com/noticias/regimen-de-daniel-ortega-cierra-canal-de-television-de-la-iglesia-catolica-en-
nicaragua-54086
(25) https://www.juniorminingnetwork.com/junior-miner-news/press-releases/426-tsx/sam/121317-starcore-announces-
us-2-million-exploration-program-for-2022.html
Stocks To Follow Closed Positions 2021
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 Min NOM.cse feb'21 C$1.55 6-Set-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
Wolfden Res. WLF.v sep'21 C$0.30 11-Abr-21 C$0.19 -36.7% Failed spec trade, cut loss
Cartier Res ECR.v sep'21 C$0.32 21-Mar-21 C$0.235 -26.6% Failed spec trade, cut loss
Amarillo Gold AGC.v sep'21 C$0.31 30-May-21 C$0.30 -3.2% Capex story changed: Out
Excelsior Mining MIN.to oct'21 C$0.93 10-Mar-19 C$0.53 -43.0% May return in 2022
Royal Road Min. RYR.v nov'21 C$0.155 17-Mar-19 C$0.275 77.4% Closed on Nica pol risk
Aurelius Min. AUL.v dec'21 C$0.75 28-Jun-20 0.24 -68.0% cut end 2021, failed trade
Argonaut Gold AR.to dec'21 C$2.95 25-Jun-21 C$2.15 -27.1% cut on capex blowout
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
27

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

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