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The IKN Weekly
Week 694 September 4th 2022
Contents
This Week: In Today’s Edition, Labo(u)r Day, Unpleasantly accurate.
Fundamental Analysis: Rio2 Ltd (RIO.v): Positive developments on both company and
national level.
Stocks to Follow: Amerigo Resources (ARG.to), Superior Gold (SGI.v), Newcore Gold
(NCAU.v), Goldshore Resources (GSHR.v), Anacortes Mining (XYZ.v), Aldebaran Resources
(ALDE.v), QC Copper & Gold (QCCU.v), Minera Alamos (MAI.v).
Copper Basket: Overview, Marimaca (MARI.to), Element 29 (ECU.v), Copper Mountain
(CMMC.to).
Producer Basket: Overview, Barrick (GOLD).
TinyCaps Basket: Overview, Aurelius Minerals (AUL.v), Signature Resources (SGU.v).
Regional Politics: Brazil: Lula maintains his advantage, Colombia and the mess that’s about
to hit its mining industry.
Market Watching: Deferred.
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 main Fundies section combines two topical subjects as we catch up with
the problem trade Rio2 Ltd (RIO.v) and the upcoming as well as likely news flow on its
financial situation as well as movement on its appeals process. Dovetailing with that is
the macro scene for mining and politics in Chile, which gets its own column inches as
we report on the improving atmosphere for mining and business in the country.
 We also catch up with the latest in a truly challenged jurisdiction for mining in South
America. Chile’s issues are child’s play compared to the mess that’s brewing for hard
rock mining companies in Colombia.
 Considering that we’ve just suffered yet another price dump in the junior mining space,
most of the notes in the ‘Stocks to Follow’ section are surprisingly upbeat. That might
just be me, the natural-born contrarian has to show their colours somehow.
Labo(u)r Day
A brief reminder that tomorrow Monday is closed for business in North America as both US and
Canadian stock markets are closed due to Labo(u)r Day (spelling depends on your country…eh).
Unpleasantly accurate
The first bullet point in last week’s edition ended with these words:
“…this sentiment-driven market shows every sign of pushing metals lower”
One look at the price action in gold, silver, etc will tell you that happened. However, another of
last weekend’s bullets started with, “Copper remains the conundrum, however” and that may
have been a mystery to me, but the market had far fewer doubts. Here’s gold and copper:
1

GLD gold holdings, 2021 to date (metric tonnes)
1200
1180
1160
1140
1120
1100
1080
1060
1040
1020
1000
980
960
940 920
900
2
02/21/13 12/1/02 12/2/9 12/3/1 12/3/12 12/4/01 12/4/03 12/5/02 12/6/9 12/6/92 12/7/91 12/8/8 12/8/82 12/9/71 12/01/7 12/01/72 12/11/61 12/21/6 12/21/62 22/1/51 22/2/4 22/2/42 22/3/61 22/4/5 22/4/52 22/5/51 22/6/4 22/6/42 22/7/41 22/8/3 22/8/32
It’s one thing to call metals lower, another is to be blown away by the speed and power of a
sell-off and that’s been one of my long-term weaknesses as a market observer. For some
reason, my brain assumes changes will be moderated by time and the ups and downs of the
market will come in gradual stages; instead copper once again confounded my expectations by
not just dropping, but dumping hard. As for gold…
mt GLD: Inventory/Price Ratio, 2021 to date
7.00
6.80
6.60
6.40
6.20
6.00
5.80
5.60
source: SPDR GLD data 5.40
…the GLD inventory trackers continue to show the total lack of appetite for the monetary metal
as a safe haven against market or recessionary storms. Total holdings last week dropped to just
over 973 metric tonnes and that’s the lowest reading during the President Biden presidency,
meanwhile the inventory/price ratio continues to bounce along the 6X “Sentiment Washout”
level and with no signs of changing course.
For that, we’re going to need a change in attitude in The USA and that may come from inflation
reading and Friday’s job data, as they saw the market drop its expectations and allow that The
Fed may only hike by 50bps at the end of this month. Would that be the start of “The fed Pivot”
that allows gold to regain momentum? Yes, potentially, but we’re a good four weeks from that
call and before that will come plenty of Fed Kabuki Theatre (e.g. this Wednesday the Fed Vice
Chair gives a prepared speech and then on Thursday, Fed Head Jay Powell is in conversation at
the Cato Institute). Instead we’re going to need the input of US politics to change the country’s
monetary and fiscal policy as first the midterms, then the start of the long US Presidential
campaign cycle kicks into gear and on that, I’m going to try hard to stay away from the
keyboard. This is not and never will be a publication that goes US party political or does a
running commentary of the comings and goings between GOPs and DEMs in The USA. We keep
on-topic and US macro is as far into the weeds as this author will tread but, with the US
threatening to go into recession at a critical point in its election cycle, there’s no way we can
ignore the potential of ideology on what happens next. To this end, the people at Politico Dot
Com did a good job in this report (1) of covering the way politics meets economics around the
recession/stagflation issue, without adding too much party line and offering up as many of the
talking points as the politically neutrals can agree on. Coming after a week of the effects of Jay
Powell’s Jackson Hole speech as well as after President Biden’s “Gloves off against MAGA
extremists” speech, it was entitled “Powell’s ‘dangerous’ words risk resistance from lawmakers”
with heavily featured quotes from Dem Senator Elizabeth Warren. The subhead went “The
13/21/0202 02/1/1202 9/2/1202 1/3/1202 12/3/1202 01/4/1202 03/4/1202 02/5/1202 9/6/1202 92/6/1202 91/7/1202 8/8/1202 82/8/1202 71/9/1202 7/01/1202 72/01/1202 61/11/1202 6/21/1202 62/21/1202 51/1/2202 4/2/2202 42/2/2202 61/3/2202 5/4/2202 52/4/2202 51/5/2202 4/6/2202 42/6/2202 41/7/2202 3/8/2202 32/8/2202
Source: SPDR data, IKN calcs

more pain there is, the more lawmakers are likely to join Sen. Elizabeth Warren (D-Mass.) in
blasting the central bank, with progressive groups ramping up their criticism, saying the Fed’s
actions will potentially lead to millions of job losses” and that set the tone, here’s the required
excerpt and we make a few notes underneath:
“Jerome Powell’s rhetoric is dangerous, and a Fed-manufactured recession is not
inevitable — it’s a policy choice,” Warren told POLITICO. “Some might find this
controversial, but higher unemployment should not be the economic policy of the
United States, particularly when the Fed’s aggressive interest rate hikes are ill-suited to
address inflated food and energy prices from Putin’s war in Ukraine, supply chain
bottlenecks, and corporate price gouging.”
The stock market tumbled on concern that higher interest rates will spark a recession
after Powell said last week that “some pain” is ahead for the American people.
 Jay’s dangerous rhetoric? Debatable, as inaction would see inflation spiral
 A Fed-manufactured recession is a policy choice? Yes that’s reasonable, but the
language Warren uses is up for question as The Fed can counter by saying its policies
are apolitical.
 Higher unemployment should not be the economic policy of the United States? True,
she scores an easy point there.
 Fed’s interest rate hikes ill-suited to address inflat(ion)? Likely true, but it’s all they
have.
 Corporate price gouging? The only overtly left of centre political position
 Stock market down on Powell’s “some pain” speech? True enough, even the political
right would have a hard time refuting that statement. Required medicine perhaps, but
that’s another story.
And really, that’s as far as I want to go and there are dozens of other places to start reading
about the ins and outs of US politics, with or without their effect on the world markets. The
only point I want to make is that the convergence of the recession scenario with the round of
upcoming elections means that neither will be able to live in a vacuum going forward and that
Jay Powell may want to take the politically neutral stance, but will likely find it harder to do as
the weeks and months roll on.
Catching up with the Gold/Silver Ratio
It’s been a while since we featured this chart and since I gave up on backing anything in silver,
there’s been less reason to do so. But the recent events have shown clearly in the Gold/Silver
Ratio (GSR) as we know the drop in gold has been bad, but silver’s takes the biscuit:
The GSR is a classic recession indicator and the recent move from 75X to 80X at the start of
3

this year to the 96.34X reading at the close on Friday is what you’d expect as the world’s
economy’s slow down. However and on considering the longer-term chart above, it also
suggests there’s a bigger trend of silver deflation at play. As long as we remove the
action/reaction of the Covid crisis, the trend is not the friend of silver miners and if we go
“100X” in the near future, we’re bound to get plenty of commentary on the weakness in the
silver market in the trade papers (as well as all the “It’s A Fix!” talk on social media). But as for
today, the GSR backs up the other indicative charts and ratios that tell us the world is slipping
into recession, no matter what our overlords might want us to believe to the contrary.
Fundamental Analysis of Mining Stocks
Rio2 Ltd (RIO.v): Positive developments on both company and national level
Today’s main Fundamentals section centres on developments around our investment in troubled
gold developer company in Chile, Rio2 Ltd (RIO.v). While the company has been quiet on the
airwaves over the Northern summer, things have been moving in the background and we’re
likely to get a series of positive developments in the weeks to come as the company sets about
repairing the damage done by the July 2022 EIA permit denial for its Fenix Gold project. But
that’s not all in today’s note, as we also include
the latest political developments in Chile including
the way the mining sector is moving to lobby the
Boric government as well as today’s key national
referendum vote on its draft Constitution, which
has turned out favourably for the country’s
business and economic communities, for the
mining sector and indeed for the Rio2 Ltd cause.
That’s further down the page, however, we first
focus on the company in question starting with a
look at the three month chart, a painful reminder
of its recent price action that shows when the
previously uneventful permitting track for its Fenix
project in Atacama Region hit the skids. We documented the events at the time as the first
negative arrived in late June, when the normal rubber stamp from the SEA environmental
authorities was denied to its report. Then came early June when the application was rejected by
the regional committee. We’re not dwelling on those moments this week but for a quick
sentence to say that the reversals came as a surprise to one and all, even from a new
administration that had rejected other environmental permit applications from other mining
projects and operations (most notably the Anglo Los Bronces U$3Bn growth project, now also in
the appeals track). It’s no help to the reality or the RIO.v share price, but it’s worth
underscoring that to this point the company had complied with all demands and observations
made to it by the Chilean authorities including SEA and there was no reason to expect problems
at this late stage. 20/20 hindsight tells us a different story but at the time, there was no hint of
anything untoward up to the moment that the SEA authorities pointed to the well-being of local
fauna, i.e., the wild populations of chinchilla, vicuña and guanaco, as good reason to reject the
permit application.
More about that later, we first consider what has happened at RIO.v since the permit denial and
at first appearances the basic answer is “not a lot”. The share price has flat-lined through late
July and August (and in fact has deteriorated slightly, to new recent lows) in a period when
there’s been no news or updates from the company. Traded volume has dropped to “patchy at
best” and the market has taken to ignoring the stock…holders such as you and I perhaps
deliberately ignoring the pain. However, behind the scenes and away from the market radar
plenty has been happening, we’re about to see RIO.v stick its head above the parapet as it
prepares news and updates for the market. So between information gathered from Chile, from
official company and SEA filings, as well a meeting with company CEO Alex Black a couple of
4

days ago, it’s time to get up to speed and today’s Fundies section is all about the company
specifics, as well as what’s been happening in Chile. There are four general categories to cover:
 Rio2 company financials to date
 Company financial situation going forward
 The Rio2 Ltd appeals process against its permit denial
 Changes in the macro political backdrop
Rio2 Ltd financials to date: This is a brief reminder to set the scene, as we covered the
2q22 filings as reported by RIO.v in IKN 691 dated August 14th and you don’t get a full repeat
of all the ins and outs of its financials, instead these couple of charts of the bit that matters,
treasury and working cap. Notes below:
RIO.v: Treasury per qtr
 Back in IKN691, our take on the treasury and liquidity position of RIO.v was “Not as
bad as it might have been.” We knew the company was caught at a bad time with the
permit denial as it well into its process of spending the first $25m forwarded to it by
Wheaton Precious Metals (WPM) as part of its streaming deal and was expecting the
second tranche to drop at any moment. The worry was that it had spent all the cash
and would now be caught in a tight cash situation.
 In fact, the $13.62m in cash and $11.11m in working capital wasn’t too bad (though
hardly optimum) and we also noted that it gave the company room to make the
necessary redundancy payments as it cut its payroll drastically (around 3 of 4 staff were
laid off). In IKN691 we noted that CEO Alex Black had told these pages the company
had $8.3m in treasury left and no big obligations in the near future, i.e. it had steadied
the ship.
 At that point, we estimated that RIO would have the cash to keep background burn
going into 2023 and therefore, cash wasn’t at emergency levels but “something” would
need to be done. CEO Black agreed and said that there wouldn’t be a deal struck
immediately during the August Doldrums, but once Labor Day and the “back to work”
signal they would have something.
That brings us up to date. Labor Day is now upon us and the subject was part of my agenda
with RIO.v CEO Alex Black last week.
Financial situation going forward: What I learned from our chat was also better than
expected. The company is clear about the need to raise capital for its appeals process (see
below) and while there has been no official word, we’ve had unofficial signals about RIO.v in
negotiations with its main lender Wheaton Precious Metals (WPM). There’s still nothing official,
but that should change soon and here’s what I managed to glean:
 Rio2’s preferred partner in any new funding deal is indeed Wheaton and WPM also
seems keen on continued sponsorship of the company. In this desk’s opinion, another
deal between RIO.v and WPM that adapts to the new circumstances is the optimum
situation, as if WPM extends its relationship it will send all the right signals to the
5
297.41
47.9 579.9
434.3 535.3 554.1 560.32 543.12
966.33
416.31
40
35
30
25
20
15 10
5
0
02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2
U$m RIO.v: Working capital
source: company filings
69.31
92.9 19.9
64.1 60.3 80.0-
68.22
54.91
63.52
11.11
30
25
20
15
10
5
0
-5
02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2
U$m
source: company filings

market, to other partners (we recall BHPP in the background with the main Senior
Secured financing deal that has yet to be triggered) and to the government and
authorities in Chile (WPM has world-level ESG criteria to justify these days).
 I got a little out of CEO Alex Black about the shape of any deal with WPM, which would
likely be either based around the sale of non-core royalties unrelated to Fenix, or as
non-dilutive or low dilution to the share count as possible if there are any shares as
part of the deal. Without finding out too much, I understand that the company owns
some royalties unconnected to Fenix that it can monetize.
 The company isn’t looking to raise a massive amount of capital, plans seem to be based
on “one year plus contingency” to get from today and through the appeals process. It
needs capital for three main pots, namely 1) legal fees for the appeals process in Chile
2) certain payments is has to cover for long lead time machinery orders that are now
firm and 3) general working cap to cover the (now much lower) background burn rate.
From asking the same type of question from two or three angles, RIO.v wants to strike
a balance between having the funds to calm outsider and shareholder nerves (that
should answer some silly “they might go bankrupt” talk some desks have been
propagating) without over-raising at a strategically weak moment.
 Aside from WPM, RIO.v has apparently been approached by “several” larger funds
and/or instos that are interested in providing funding and at least “a few” of those
aren’t just tire-kickers. Away from the near-term reactions of the day-to-day market,
there are certain deeper pockets with longer-term outlooks that see the right
combination of 1) 5m oz gold 2) a distressed share price 3) an anti-mining political
scene in what is normally a pro-mining jurisdiction that the deep pockets consider to be
a temporary road bump, rather than a sea change. While any deal with serious deeper
pockets would probably come with new levels of share dilution, the right sort of
strategic deal with the right partner would also send a positive message to the market.
The bottom line to the financial situation at Rio2 going forward is “getting better”. On a
personal level, I would much prefer a follow-on deal with WPM as it would send the right
signals and, if RIO.v can sell a non-core royalty unrelated to Fenix in order to raise working cap,
then so much the better. It’s also good news to hear about larger pockets with interest and as
they would come with the right type of long-term outlook to the project as it goes through
appeals, even a dilutive share sale would probably help the beaten-down share price today.
We should expect movement and some public pronouncement from Rio2 this month of
September on financing and a deal to fund the next year, but even before that we’re almost
certain to get a NR from the company in the days ahead regarding our next agenda point.
Rio2 Ltd’s appeal against permit denial: As from last week, the company’s appeal process
against the permit denial for Fenix began officially. The legal beagles have done their job and
the process began with the deposition and filing of its appeals document with SEA. You too can
get your copy of the 105-page appeal on this link (2) if you enjoy densely written Spanish
language legalese as much as I’ve done this weekend. Yes, that was irony, thanks for noticing.
The document is worth reading as the devil is in the details and the appeal are largely technical
in nature. As the Fenix project was rejected by the environmental authorities on what they
claim to be technical infractions, the appeal is going to happen on that same playing field and in
this desk’s opinion, that’s the right course of action. To interject for one moment, we know that
since the Boric government arrived and placed academic ideologues in key positions in the
government structure, i.e. the new Minister of the Environment and the new head of SEA, Chile
has gone from the country which rejected only one EIA permit application in the previous seven
years to March 2022, to rejecting six EIA applications and not allowing a single meaningful EIA
permit to prosper in the last six months. This is the list of rejected EIA as seen in IKN688, to
which we can add the Aclara project which decided to withdraw its application before having it
rejected:
6

 Minera San Cayetano (U$20.5m)
 Exploraciones Ricardo II (U$1.1m)
 Fenix Gold (U$206m)
 Los Bronces Integrado (U$3Bn)
 Plan de Desarrollo LP Minera Cerro Negro S.A. (U$22m)
 Fase V de El Soldado (U$40m)
In plain English, the country of Chile doesn’t go from near-total EIA approvals to near-total EIA
rejections on a purely technical basis, the sudden change in attitude is clearly political and
clearly connected to the arrival of a politically left wing government. This is why Rio2’s grounds
for appeal, based firmly on the same technical criteria and eschewing all political nuances, is
the right course of action. Put simply, its argument will be “Okay, you want to pretend there are
no politics in play and say there are technical reasons for our EIA rejection? Fine by us, those
technical issues don’t exist and here’s why” followed by the data, details and expert opinions
that the Atacama regional committee largely ignored in early July.
For those who’d like a flavour for the appeals grounds but don’t want to wade through the
entire 105 page document, the good news is that appeal application also includes an executive
summary on the first few pages that sums up the three major grounds for appeal. We once
again remind readers that the vast majority of the EIA application was accepted by the relevant
authorities, including all plans for construction, supply, workforce, etc as well as most of the
environmental impact criteria (so please do not ask whether the “trucking water to site” aspect
is an issue again, Chile fully approved of all that from start to finish and it gets slightly boring to
reply to the same query). We should also note that unlike many other projects in the country
such as those owned by Aclara, Los Andes and now most recently locals opposing Codelco’s
lithium mine plans, Fenix received full community approval from all six communities directly and
indirectly affected by the project plan. This underscores the odd situation, in which the locals
approve but the national government has made ideological objections…in nearly every other
case of a “problem project” in Chile and even wider South America, it’s the other way around.
The three subjects of appeal are those that SEA used to deny the permit. They are:
 The Area of Influence of Fauna
 Adverse effects of the project on the population of wild chinchilla
 Adverse effects of the project on the population of wild camelids
Regarding the Area of Influence of Fauna, RIO.v argues that its Area of Influence
complies fully with the law. As such its EIA cannot be judged on the effects the project might
have on areas that may be around its Area of Influence and may contain populations of fauna
and/or fauna but do not form part of the project or its Area of Influence. On this point, the
Chilean law is clear and while the company has shown plenty of will to monitor and take care of
zones outside of its officially designated Area of Influence on a voluntary basis, the EIA
rejection cannot be predicated on those outer zones.
Regarding the chinchilla, the appeal seeks to discard adverse effects on local chinchilla
populations by arguing:
 Fenix Gold complied with all demands for tracking and monitoring of the chinchilla
population by the relevant authorities
 It set up and monitored chinchilla populations in all zones required of it, reported back
findings and sought expert opinion. Only one area of chinchilla activity was discovered,
in a zone that does not form part of the project Area of Influence and where no works
or disturbances were planned.
 Expert third-party opinion stated that the project did not represent a significant impact
on the chinchilla population.
 A demand made by the environmental authorities for an extra round of tracking and
monitoring of the chinchilla population was made at a very late stage and after the
official observation period had closed. That extra demand was then used as grounds for
rejection of the EIA by the Atacama regional committee. This is a technical point, but in
7

general terms the Chilean environmental authorities had 18 months in which they could
demand the company make studies of its choosing, to which RIO.v fully complied.
However, after a cut-off point (called the “extraordinary addenda”), the Chilean
authorities did not have the right to demand further studies and, as the company had
fully complied with all requirements to that point, did not give grounds for the Chilean
authorities to refuse the permit.
As for camelids, there are four types in South America, with llamas and alpacas being
domestic/semi domestic and vicuñas and guanacos being wild. The latter two are the issue at
Fenix and the permit denial was based partly on the effects Fenix would have on the local
populations of vicuña and guanaco. The appeal seeks to discard adverse effects on guanaco
and vicuña populations by arguing:
 RIO.v again conducted all studies demanded of it by authorities
 The main effect was around the migratory patterns of the camelids as they moved from
zone to zone, as they tended to use one valley pass that would be partially blocked by
the company’s proposed sterile waste dump.
 The expert opinion gathered from third parties was that the effect would not be
significant to the camelid populations
 Third party expert opinion also advised the company and the authorities against the
authorities’ request for a collar/GPS tracking program. The expert opinion was that such
a study would be too invasive to a wild animal population and cause the camelids
undue stress.
Overall, the appeals document lays out serious and sober grounds for a successful appeal. As
for the timescale involved, the appeal will be made to the national level “Council of Ministers”
and we also have a sort of “pathfinder appeal” with that same body, as Anglo has already
begun its appeals process for the U$3Bn Los Bronces expansion. We’ll be able to watch that
progress and presumably, the Fenix Gold appeal will come behind that in the pecking order. We
also know that Anglo expects its appeals process to continue for around 10 months from here
and that means the Fenix Gold appeal may take a year form this point. That’s not a brief period
of time but, as you’re about to read, even that may be to the advantage of the company as
Chile’s government now looks set to swing back from the left wing and to the centre of the
political spectrum.
Chile’s mining scene and the post-referendum scenario
We’ll get to today’s big vote and the country’s clear rejection of the left wing constitution by a
wide margin in a moment, first we take in the latest from the country’s national level mining
scene. It so happens that last Wednesday August 31st was the night of the annual Gala Dinner
of Chile’s largest and most influential mining chamber of commerce. That’s the Sociedad
Nacional de Minera (National Mining Society), known by
the double-letter initials Sonami to one and all in the
country’s mining and wider business world. Along with the
food and wine the outgoing President of Sonami, Diego
Hernández, gave his last speech before handing over the
reins to the incoming President for the 2022-2025 period,
one Jorge Riesco (a corporate lawyer in the mining field).
Notably, the gala dinner also saw the presence of Chile’s
new President Gabriel Boric, who also gave a speech to
the assembled room of mining. The insert photo (right)
shows President Boric and Señor Hernández in
conversation at the top table on Wednesday and is from a
report on the evening out of Chile’s largest business
newspaper, Diario Financiero (this link has the full report
(3), move the date to September 1st and go to page 2).
Don Diego Hernández is a major figure in the Chilean
mining scene, having been CEO of Codelco in his time and is currently the President of
8

Antofagasta Mining (ANTO.L). His presidency of Sonami has been well-received and in his
outgoing speech and with President Boric sitting next to him, he didn’t hold his opinions back
on how he perceives about way the new government is treating the mining industry.
His words on the proposed mining royalty made most headlines in the papers the next day, as
it’s a higher level subject that isn’t limited to “the mining sector”. Diego Hernández said (quote
translated, “We consider that the royalty, as it is currently structured with an ad valorem
component and disproportionate (tax) rates, makes Chilean mining less competitive and puts a
good number of higher cost mining operations at serious risk.” He also made minor gripes
regarding the support required for small-scale mining operations, as well as comments on the
need for better security for mining operations in light of recent thefts reported at either mines
or from trucks carrying concentrate. But then he got a subject close to our focus (4):
“Our greatest challenge is the paperwork and approval process of environmental
permits, in which we take double the time of our competitors.” He then continued with
the pay dirt, “In the last six months, there have been no environmental permit approved
for a mining project and, as a worrying example, two medium-scale mining projects
have been rejected by regional committees of Valparaiso and Atacama, even though
these projects met and even superseded their technical instances.”
In his reply speech, President Boric began by joking that that he didn’t realize beforehand that
he needed to have dressed in combat gear for the evening. He then got a bad reception from
his audience (dissenting whistles, a kind of “polite booing”) when addressing
the royalty issue by saying (quote translated), "Don Diego said that you are
against diminishing profits in time of low prices and I ask him, When have you
been in favour of handing over a part of your profits? When has Sonami ever
said that now is the time to move forward on a royalty law and a better
distribution of wealth?" However and notably, President Boric didn’t address
the complaint about slow paperwork and the series of EIA rejections since the
Boric government had come to power. Instead, the Presidential Palace issued a
communiqué the next day (inset right from the DF report link, above) which
said that “The government stated that on the contrary, it had approved 15 EIA
initiatives and that Fenix Gold had been rejected on technical grounds.”
This fits with the Rio2 view of what’s going on in the political halls of power
and that the current executive has either been the source of, or has been
influenced by, a distorted view of the Rio2 Ltd EIA application and the
technical work completed. And before moving to tonight’s big referendum
report, I was also told by RIO CEO Black that the company had a “very positive virtual meeting
with President of Sonami, Diego Hernandez two weeks ago” and that Sonami had provide
whatever support possible during our path to EIA approval. That may be why Diego Hernandez
had the issue on his mind as he got up to speak at last week’s Gala Dinner.
Chile’s Referendum Result and the macro backdrop
We begin this section with a screenshot from CNNChile tonight (as for those of you tuning in
from North America, CNN Chile is a different type o editorial desk and enjoys a strong
reputation locally).
Over 13m people voted in the referendum, which was way above expectations and of the valid
votes, Reject at 7.88m beat Accept at 4.86m by over three million votes. The 24 point gap
between the two sides was much greater than expected and the sum total of today’s vote is a
clear slap in the face of the Gabriel Boric government and its policies. We can of course begin
9

to dissect the result and note that in his address to the Nation this evening, President Boric did
the right thing by taking the “Statesman’s Position”, applauding his country for the democratic
decision and telling them he would pay close attention to it as his government moves again to
find a new method of updating the country’s constitution (yes, that process will continue). But
the size of the victory now leaves him very little political space to advance his government’s
current agenda and politicians and parties of the left, right and centre all recognize this.
Therefore, it’s fair to say that the biggest loser tonight is the hard Left wing of the Boric “Chile
Vamos” coalition and that the power base will now shift more toward the centre. That means
the PC (Communist Party) from which Boric himself rose and means he will have to cut ties with
his party companions if he wants to retain reasonable control of the executive. That means 1)
allowing more power to the hands of the centre-left parties and 2) more immediately, a
necessary cabinet re-shuffle in which he will be closely watched to see how many of the current
crop of ministers from the Left and Hard Left are allowed to keep their jobs. For a couple of
representative opinions, take for example Eric Aedo in this interview last Wednesday (5). For
another and more up-to-date opinion, the President of Chile’s Confederation of Production and
Commerce, Juan Sutil, tonight while celebrating the victory of the Reject camp said (6), “We
can only advance with growth, good employment and more investment.” Quite right, too. Señor
Aedo is a key player in Chile’s political scene, being the president of the Centre-Left DC party
and its spokesperson in the current Congress. His party was a member of the Michelle Bachelet
coalition government and was in opposition to the right wing Sebastian Piñera administrations.
His is the voice of the political centre/centre-left and while he may have been a natural ally to
the current government, he was a vociferous proponent of the “Reject” option in this
referendum. By last week along with most politicos, he sensed the clear victory for his side and
said, “After the Referendum, President Boric has to make a deep cabinet change.” He was
probably doing the same as the rest of us and expecting an approx 55/45 win for Reject, so the
blow-out result of 62% to 38% (approx) makes his opinion even stronger.
The bottom line to tonight’s referendum result: President Boric will make the best of the
situation and the search for an updated Constitution will now go on, the country will now look
for a new method to updated its old and mostly unloved Constitution. However and be clear,
the victory for “Reject” marks the end of the out-sized influence of Chile’s hard Left wing on its
politics and from here, the country’s line is bound to moderate. That’s good news for those of
us on the outside looking in at investments and FDI and we should also recognize how “It’s The
Economy Stupid” is going to become the most important part of Boric’s agenda in 2023 and
beyond as the country moves into a widely predicted recession. Ideology takes a back seat at
those moments and with the country making a clear protest vote against the 2022 direction to
date, the first thing we’ll see is a cabinet reshuffle that moves ministries away from the left
wing. That’s either good or very good for the mining sector, depending on how the cards
fall/cookie crumbles/which specific ministers gets swapped out.
As for the specific subject of today’s main fundies note: Don’t give up on Rio2! That was the
message after the disaster news in July and after a quiet summer, it’s the same message now
as the company now gets its recovery program into gear. The way I’m playing the trade is
simplicity itself and can be summed up in one word, HOLD. However, the able and nimble
traders among you are about to get plenty of news and events with which to trade around and
if you take the stance that the longer-term insto money looking for distressed stories seem to
be taking, there’s plenty of reason to see this stock re-rate as its appeal moves forward.
Stocks to Follow
Gold dropped by 1.55% (GLD proxy), precious metals dumped, base metals dumped and
mining stocks of all shapes and sizes dumped, as witnessed by the losses in the benchmark
mining ETFs. With GDX down 4.5% and GDXJ down 5.3% it’s not going to be pleasant
reviewing a mining stock portfolio this weekend and The Stocks To Follow list is no exception.
10

However, and you might rail at me for saying it in words, but it really wasn’t that bad for my
portfolio. Yes there were four double figure losers and the list in order of nastiness is Goldshore
(GSHR.v down 21.1%), Newcore (NCAU.v down 14.8%), Amerigo (ARG.to down 12.2%) and
Rio2 (RIO.v down 11.5%) but of those, only ARG hit my back pocket significantly (for more on
RIO.v, see above) and the other losing holdings were minor, at least over last week (SGI,
ALDE, APN, MIRL, ELBM, WRN, MENE). However, the three unchanged stocks (MAI.v, QCCU.v,
CKG.v) include the Top Pick Minera Alamos and a decent rearguard action in QC Copper & Gold,
which is finally seeing a few buyers as well. There were also two winners on the week (PA.v,
XYZ.v) and while Anacortes is only on the watchlist and I don’t own any, its 20.9% gain was an
eye-catching move against the grain. As for the count, still only 16 covered stocks and still only
two blobs of green, but one has moved.
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$0.49 121.4% $1.14 tgt, #1 idea on FY22 dev
RECOMMENDED STOCKS
CheapCu exp low downside
Amerigo Res ARG.to STR BUY C$1.36 12-Dec-21 C$1.01 -25.7% risk
Superior Gold SGI.v STR BUY C$0.95 3-Apr-22 C$0.45 -52.6% Au prod jr, Q2 report this week
QC Copper&Gold QCCU.v BUY C$0.275 25-Apr-21 C$0.16 -47.3% Now drilling. Easy hold
Rio2 Ltd. RIO.v HOLD C$0.83 22-Apr-18 C$0.115 -86.1% Downgrade on permit denial
SPECULATIVE TRADES
Chesapeake Gold CKG.v SPEC BUY C$3.07 20-Feb-22 C$2.12 -30.9% Au leverage, small trade so far
Aldebaran Res. ALDE.v BUY C$0.72 16-May-21 C$0.70 -2.8% hole 221 may give boost
Palamina Corp PA.v SPEC BUY C$0.295 21-Nov-21 C$0.095 -67.8% Au expl in S.Peru
Altiplano Metals APN.v HOLD C$0.31 17-Sep-21 C$0.185 -40.3% Cheap entry, plan on track.
Minera IRL MIRL.cse hold C$0.195 22-Jul-12 C$0.08 -59.0% CEO change will move stock
A WATCHLIST OF POTENTIAL TRADES. NB: I DO NOT OWN
Newcore Gold NCAU.v WATCH C$0.51 20-Mar-22 C$0.23 -54.9% potential gold exploreco trade
Electra Battery ELBM.v WATCH C$5.31 20-Mar-22 C$4.05 -23.7% potential battery metals play
Anacortes Mining XYZ.v WATCH C$0.49 22-Jul-22 C$0.52 6.1% potential gold exploreco trade
Goldshore Res GSHR.v WATCH C$0.33 22-Jul-22 C$0.205 -37.9% potential gold exploreco trade
Western Copper WRN.to SPEC BUY C$2.41 20-Mar-22 C$1.68 -30.3% potential copper trade
LONG-TERM NON-MINING HOLD
Mene Inc. MENE.v adding C$0.66 6-Dec-20 C$0.51 -22.7% 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
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
Discovery Silver DSV.v Jun'22 C$1.77 24-Oct-21 C$1.39 -21.5% Cutting Ag exp.& raising cash
Element 29 ECU.v Jul'22 C$0.58 6-Mar-22 C$0.30 -48.3% sold to cut Cu exposure
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 some of the covered companies:
Amerigo Resources (ARG.to): This ten-day chart indicates that enough holders hung around
for the 3c cash divi before dumping their positions into the weakening copper market, with the
result that our main copper trade did worse than the average Cu company last week.
11

It also means that buyers at this weekend’s
price get an 11.9% yield even before any
bonus/top-up/whatever it’s called dividends are
considered or the next round of buybacks
begin. We’ve done the math here at the Weekly
and know that the 3c quarterly dividend is safe
for many quarters at current copper prices, the
doubts would only appear if 1) we went to or
below U$3.00/lb copper and 2) those low
copper prices stayed around for more than a
couple of quarters. At the current price deck,
ARG continues to stand out as an under-
appreciated and financially solid risk/reward on
the metal. This is the epitome of the mining
value investment and I’ll stay long, thanks.
Superior Gold (SGI.v): Superior Gold’s Chris Jordaan appeared on a 28-minute Crux Investor
segment last week (watch it here (7)). There was nothing particularly new in the presentation
compared to the Conference Call and webinar ran by the company around its 2q22 financials as
published on August 17th and examined by these pages two weeks ago, in IKN692 dated
August 21st. They ran through the issues caused by Covid in WA Australia, then the rainfall
issue suffered by the company and as we noted in IKN692, SGI’s main problems during the
quarter came down to a dose of bad luck, rather than company incompetence. However, this is
an unforgiving market and we already know how the quarter’s numbers were received.
More interesting are the segments as from around nine minutes in when CEO Jordaan looks to
the future and talks about its new and revised guidance numbers. He’s still confident about
getting to that desired 100koz/annum run rate, it’s a question of a story delayed rather than
stopped. He then checked off the improvements already made to mine plant and infrastructure
and, as well as noting the major bottleneck of underground mined tonnages (and they’re
working on that, he reports). As for costs, he said roughly the same thing about costs as we
heard two weeks ago and that cash costs and AISC will drop as production increases. All normal
and our current estimate of an AISC hovering around U$1,500/oz once production improves
means the company isn’t about to go bust.
The only issue I have with the presentation is the way he refused to directly address whether
they’d raise more capital at market. CEO Jordaan pointed to the upcoming resource update and
how from that moment, they’d weigh their options. The inference is that they were considering
the advantages of growing organically via cash flow or accelerating development via a capital
injection (presumably a share sale). With a confirmed U$18.2m at bank, as noted in IKN692
SGI is in a reasonable position and with no liquidity issues as long as the company starts
delivering on its revised guidance and moves through the gears to that “towards 100k/annum”
run rate at year’s end (gold price notwithstanding, of course).
Newcore Gold (NCAU.v): What I most liked about this webinar appearance from NCAU CEO
Luke Alexander (8) last week was to hear that the company insiders are buying shares. We also
heard that the resource update is on-course for its expected delivery in 4q22, now that the
80kmt drilling program is complete. CEO Alexander also confirmed that 45,000 of the new
metres should add to the resource and while not new, his estimate for the resource is now
slightly higher than our house estimate. We said “Just under 2m oz”, they now say, “2m oz”
and while that’s not a great deal of difference, we are susceptible creatures and probably
understand why having a 2-handle on your gold resource grabs more attention. NCAU does too
and from the commentary, it’s safe to say that the company is looking to add a small resource
from its higher grade underground drill intercepts to the main open-pittable number In order to
get over the two million ounce barrier.
Goldshore Resources (GSHR.v): Everything written in last week’s Stock to Follow comments
12

regarding GSHR, which ended…
However, this is a highly risky trade at this stage of the cycle and only the brave should
apply at the moment. Being a self-confessed chicken, I pass.
…applies this weekend, too. Definitely worth watching as if/when gold turns, there could be a
big and quick fliptrade profit to make on the
long side. However, the way GSHR dumped last
week underscores its highly risky nature. When
an exploreco gets plenty of exposure from the
higher traffic (junior) mining newsletters and the
trade goes wrong, the dumping they suffer as a
consequence can truly crush a stock price as the
same retail who piled in will invariably sell en
masse at the worst of times. GSHR in 2022 is a
copybook example and while I readily agree that
it could shoot higher in no time if you are lucky
enough (there is no other phrase and dson’t try
and fool yourself otherwise) to catch the bottom,
this is also the classic falling knife.
Anacortes Mining (XYZ.v): Which price chart does better justice to the reality of XYZ at the
moment? The three-month example to the left which includes that nasty waterfall drop on
receipt of its first two holes, a somewhat disappointing release? Or the second chart below right
showing its ten-day action compared to GDXJ?
A trick question, as both have their stories to tell. It occurs to this desk that XYZ would have
done a better job of price management had they not released the results of its first two holes
on July 19th (9), primarily the rather mysteriously low returns from hole #501 that failed to twin
the grade and lengths of a historic reverse-circulation hole sunk at the same location previous.
Since then we’ve had better assays show on August 4th (10), in particular hole #504 and its
(quote) “…142.90m of 1.43 g/t Gold and 39.40m of 1.45 g/t Gold in Two Separate Intervals.”
Volume was meagre in XYZ last week, but it was still enough to see the stock price rise above
50c for the first time since the selling occurred and all in a difficult week for junior and
exploreco stories. This suggests XYZ is acting as a flipside to the more promoted and more
widely owned speculation in Goldshore (above) as there aren’t any sellers left in this story,
nobody around to throw any more towels. Add this to what I believe to be a slow realization
that #501 was an anomalous result and Trees Cruces is indeed prospective, both in its upper
oxides and the larger potential of the deep sulphides, and the stock gets to gently float back
up.
Aldebaran Resources (ALDE.v): The last four months of ALDE, with a cpouple of selling
bursts as exceptions and a couple of pennies leeway either side, can be summed up in a simple
phrase: “Low volume with a clear floor price at 70c.”
13

Not a very pleasant reality, but reality all the same and with newsflow set to increase, those of
you wanting big and cheap copper exposure need
not pay more than this price at the moment.
QC Copper & Gold (QCCU.v): The jury is still
out, but QCCU is another showing “no sellers left
to sell” signals and the recent positive assay
results (see IKN693 last weekend) give reason to
be cheerful as we move toward the expected
resource update in Q4.
Minera Alamos (MAI.v): To close out this
weekend’s covered stock notes with a flourish, we
note that Top Pick MAI saw sustained support at
4c and 50c all week and managed to buck a trend
in which most of its peers were dragged down by the malaise in the sub-sector. We picked over
MAI’s 2q22 financial results in some detail last weekend in IKN693 and came to the conclusion
that its mini-rally of the week before was fully justified, so no repeating of the numbers and
thoughts on them here today. Instead we look to the future and with Labo(u)r Day upon us and
the mining world’s autumnal conference season on its heels (Beaver Creek, Denver Gold Show,
etc) we also know Minera Alamos wants to get its much-anticipated 43-101 technical report of
Cerro de Oro out in time for presentation at those shows. Behind that should come the maiden
43-101 for Santana, then official commercial production at that mine (and we know that
unofficially it’s already profitable enough to support the entire corporation) and at some point,
triggers pulled for Cerro de Oro permits and Santana growth projects.
I may sound too chipper about last week’s trading in the overview notes above and now,
closing the section out in upbeat style may also stick in your craw. However, I cannot help but
feel “glass half full” about the portfolio in early September 2022, what with MAI being the
stalwart and ARG as cheap as it is while delivering on its game plan and dividend. Some good
news and the start of a recovery in Rio2 Ltd in the days ahead would add to the personal
optimism. “If you can keep your head when all about you are losing theirs…”
14

The Copper Basket
After thirty-five weeks of 2022, The Copper Basket shows a loss of 46.41% level stakes:
company ticker price 1/1/22 Shares out Market Cap current pps gain/loss%
1 Copper Mtn CMMC.to 3.42 210.166 308.94 1.47 -57.0%
2 Marimaca Cop MARI.to 3.77 88.118 277.57 3.15 -16.4%
3 Western Copper WRN.to 2.00 151.451 254.44 1.68 -16.0%
4 Oroco Res OCO.v 2.04 203.4 168.82 0.83 -59.3%
5 Nevada Copper NCU.to 0.71 448.437 143.50 0.32 -54.9%
6 Aldebaran Res. ALDE.v 0.84 138.401 96.88 0.70 -16.7%
7 Meridian Min MNO.to 1.18 153.735 89.17 0.58 -50.8%
8 Hot Chili HCH.v 1.53 109.223 87.38 0.80 -47.7%
9 Regulus Res. REG.v 1.06 101.85 70.28 0.69 -34.9%
10 Kutcho Copper KC.v 0.88 103.94 32.22 0.31 -64.8%
11 C3 Metals CCCM.v 0.16 645.379 29.04 0.045 -71.9%
12 Element 29 Res ECU.v 0.58 79.24 24.96 0.315 -45.7%
13 Doré Copper DCMC.v 0.79 66.123 24.47 0.37 -53.2%
14 QC Copper QCCU.v 0.34 129.06 20.65 0.16 -52.9%
15 Coast Copper COCO.v 0.13 41.335 2.48 0.06 -53.8%
NB: All stocks in CAD$ Portfolio avg -46.41%
Below this intro you’ll see the Comex HGZ copper
The Copper Basket 2022, weekly evolution
futures contract chart, the current benchmark for 10%
the world market and the precipitous drop it 0%
showed last week, down 30c/lb, from around -10%
U$3.70/lb to around U$3.40/lb on the week. -20%
Despite this painfully bearish performance our list -30%
of 15 juniors somehow managed to return two -40%
winners on the week (OCO.v, MARI.to) as well as
-50%
four other stocks that remained unchanged
-60%
(HCH.v, CCCM.v, QCCU.v, COCO.v). So yes, there
were nine losers (CMMC.to, NCU.to, WRN.to,
MNO.to, REG.v, ALDE.v, KC.v, DCMC.v, ECU.v)
and the overall average duly suffered, but it could have been a lot worse and we should also
note there were only two double figure percentage losers (NCU.to down 11.1% and CMMC.to
down 10.4%). On other occasions of waterfall copper price drops, there would have been
greater carnage and that suggests we’re either at or close to some kind of bottom, or at least a
sentiment low tide that has already shaken speculators out of this most speculative of sectors,
with only the diehards left. Yeah, that’s you and me.
This week we use two visuals to document the drop in copper, starting with the longer
timescale that takes in the whole of 2022:
15
ts1naJ ht9naJ ht61 dr32 ht03 ht6bef ht31 ht02 ht72 t6raM ht31 ht02 ht72 dr3rpA ht01 ht71 ht42 1yam ht8 ht51 dn22 ht92 ht5nuj ht21 ht91 ht62 dr3yluj ht01 ht71 ht42 ts13 t7gua ht41 ts12 ht82 t4pes
source: IKN calcs

We see the Russia Invasion high, we see the first breakdown when the Fed got busy, we then
see that record drop from U$4.60/lb to U$3.15/lb when the world went recession crazy before
realizing that the world’s main customer for the metal China was still buying hand over fist,
filling order books and depleting inventories with barely a pause. The rebound too us to almost
U$3.80/lb before Jerome Powell went full Punchbowl Snatcher at Jackson Hole (was it really
only ten days ago?) and this weekend, copper has dumped for the third time since April.
This closer range chart of the same Comex contract over the last two trading weeks shows the
carnage of last week in more detail and the unrelenting nature of the sell-off.
The financial backdrop is the major reason for the drop in Dr. Copper, we know that and for the
potted quote from the markets, this one from Reuters (11) does it nicely:
“One main reason we’re seeing prices move to the downside is that the way central
banks are reacting is concerning investors and traders who are worried about a
potential recession.”
Another way of saying that last week, Fear > Greed. We know that, too. However, copper’s
bearish process was egged along by new macro data and another round of ChinaFear! This is
easier to ignore in the long-term, as data from the otherwise murky world of Chinese economics
tend to be used retroactively as justification, but the markets are suitably spooked at the
moment and willing to sell sentiment so the combo of…
 Chinese August’22 PMI reading for its manufacturing sector came in at 49.4. That’s up
from the 49.0 reading for July but still under the magic 50 level, which indicates overall
contraction.
 August new house prices in China dropped by the thinnest 0.01% margin compared to
July, but treading water isn’t good enough.
 New Covid restrictions under China’s much vaunted (and increasingly criticized) Zero
Covid Policy hit the Chengdu conurbation, home to a cool 21.2m people (and a
reminder of the recent growth spurt in the country, how many cities of over 10m do
they have that outsiders rarely hear about?). Anyway, Chengdu is now under near-
lockdown and tight travel restrictions, while Guangzhou and Shenzhen have new
restrictions as well also happen to be high density manufacturing zones.
…was enough to stoke the selling. As for your ChinaFear! quote, we lean on the oft-quoted
Swiss bankers Julius Baer and its main commodities analyst, Carsten Menke (12):
“We don’t see a big push in terms of China fostering metals demand. We expect the
government in China to work towards stabilisation, we don’t expect a big stimulus,”
said Julius Baer analyst Carsten Menke.
“For property, it’s about avoiding a crash. On the infrastructure side there is a
realisation that it will be hard to move the needle because the base is already so big.”
So copper’s demand outlook fell into line with the financial market narrative and prices dropped
16

further. Meanwhile on the demand side, we noted last week the supply crimp in 2022 from the
world’s two largest producers Chile and Peru. In the case of #1 Chile, its production total of
2.626mt Cu for the first six of months of 2022 was 6.2% down compared to the first six months
of 2021 and this week, Chile’s INE stats office underscored the production dip July 2022 came
in at 430,028mt Cu, which is 8.6% down on July 2021. So Chile’s overall copper production is
down in 2022 to date and if State giant Codelco is anything to go by, that will only get worse in
the future. New head of Codelco hit the press circle last week and in an interview with major
daily El Mercurio (13) noted Codelco’s production was set to drop:
 In 2022, guidance has been dropped from 1.61 million metric tonnes (mmt) to
“between 1.49mmt and 1.51mmt”
 In 2023, budgeted production is 1.45mmt
 In the period 2023 to 2027 and to quote the man, “the best forecast we have is for
1.5mmt on average.”
So despite the heavy drop in copper spot and futures prices, the underlying narrative is similar
to that of last week. The difference is how the noise from financial market bears drowned out
any consideration of the supportive factors coming from the real world of copper use. We
underscore the general supply tightness by moving to the subject of copper inventories and as
it’s the end of another month, we begin with the long-term charts:
Key Cu inventory aggregate, 2012 to date
1000000
900000
800000
700000
600000
500000
400000
300000
200000
100000
0
17
21.naJ ram yam luj pes von 31.naJ ram yam luj pes von 41.naj ram yam luj pes von 51.naj ram yam luj pes von 61.naj ram yam luj pes von 71.naj ram yam luj pes von 81
naj
ram yam luj pes von 91
naj
ram yam luj pes von 02
naj
ram yam luj pes von 12
naj
ram yam luj pes von 22
naj
ram yam luj
Mt Cu
Comex
Shanghai
LME
source: Cochilco
These are useful for perspective, as after a while the observers of copper in 2022 might get
used to seeing LME and SHFE stocks as low as they are. It take a comparative to previous years
to understand how tight things are and how close the world is to “stocking out” on copper, to
use the Goldman Sachs phraseology.
Copper inventories: percentage held per exchange
80
70
60
50
40
30
20
10
0
21.naJ ram yam luj pes von 31.naJ ram yam luj pes von 41.naj ram yam luj pes von 51.naj ram yam luj pes von 61.naj ram yam luj pes von 71.naj ram yam luj pes von 81
naj
ram yam luj pes von 91
naj
ram yam luj pes von 02
naj
ram yam luj pes von 12
naj
ram yam luj pes von 22
naj
ram yam luj
LME Shanghai Comex source: Cochilco
The monthlies demonstrate the trend and decline in world stocks, we now get the topical story
via our regular weekly look at the inventory data from the world’s three official warehouse
systems, as compiled by Chilean beancounters Cochilco:
 Copper stocks around the world dropped again, this time under the 200k barrier to
close down 9,160mt at 194,039mt.
 The only gainer on the week was the SHFE system, which saw a modest 2,579mt
addition to close the week at 37,477mt. However and the same comment as last week,
this has also occurred when SHFE was supposed to take on new stocks from recent
port arrivals and the total addition isn’t as much as expected.

 The big change happened at the LME, which dropped 9,975mt to close at 110,550mt
and has finally broken out of a stubborn
range. That it did so to the downside, even
as copper spot prices dropped through the
floor, is telling on the dichotomy we continue
to witness between the action in the financial
markets and in the real world of end-user demand. We note that the entire change in
LME stocks is also the change in cancelled
warrants, which again suggests the recent
build-up of cancelled warrant tonnage is not
a case of market participants trying to send
false signals. Instead, it’s real users making
good on their claims.
 At the Comex, inventories were down by
1,764mt to close Friday at 46,012mt. In the
great scheme of things, it’s still no biggie and
the Comex system continues to be very much
the third string, but the drop over the last
couple of months is now somewhat notable
and stocks are at their lowest level since the
height of the 2020 pandemic lockdown.
Here are the dedicated SHFE charts and a bounce 4k up and 4k down doesn’t change the fact
that for all intents and purposes, there’s no copper available from Shanghai ports.
Shanghai Futures Exchange Warehouse Stocks, 2014 to date
400000
350000
300000
250000
200000
150000
100000
50000
0
18
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 ht91 ht41
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
LME: Cu tonnage under cancelled warrant
MT Cu 2022
2021
2020
2019
2018
source: Cochilco data
Now for some notes on three of our basket stocks:
Marimaca (MARI.to): One of only two of our 15 stocks that managed to rise last week, it’s
less that MARI is doing well over the year, and more...
00142 52074 57334 00714 52045 05205 52027 52418 52926 05694 57332 52271 05761 52511 57471 52581 52862 00642 00743 57924 00914 52975
05174
100000
90000
80000
70000
60000
50000 40000 30000
20000
10000
0
dr3rpa ht01 ht71 ht42 1.yam ht8 ht51 dn22 ht92 ht5nuj ht21 ht91 ht62 dr3yluj ht01 ht71 ht42 ts13 ht7gua ht41 ts12 ht82 ht4pes
mt Cu
source: Cochilco
Comex copper stocks, 2020 to date
80000
70000
60000
50000
40000
30000
20000
10000
0
02
naj
bef ram rpa yam nuj luj gua pes tco von ced 12
naj
bef ram rpa yam nuj luj gua pes tco von ced 22
naj
bef ram rpa yam nuj luj gua
mt Cu
source: Comex data

…that’s it’s one of the very few copper developer stories taken seriously enough by the wider
market. That allows it to maintain pace with the bigger Cu companies and stories, hence the in-
line performance in 2022 to date with the main copper producers’ ETF, COPX.
Element 29 (ECU.v): A sometime holding and component of the Stocks to Follow list in early
2022 until portfolio management got me to sell,
ECU.v has been quite for two months on the news
scene but despite that, has managed to put a
bottom in its price dip and even seen some
modest buying of any price around or under 30c
We haven’t had a NR from the company since July
6th but that’s sure to change, what with post
Labo(u)r Day and the scheduled work plan at its
two assets, with the main event the start of its
next stage of drilling at the promising and
potentially large Elida project in Northern Peru
(and while Flor de Cobre in the South of the
country is good, Elida has always been my pick. A
look at the latest corporate presentation from the company dated August 16th shows that the
Elida drill program is set to kick off at the end of 3q22…that’s this month.
Copper Mountain (CMMC.to): Down 10.4% on the week, the more I think about the way in
which CMMC’s ex-CFO late filed the selling of 915,000 shares as noted in this post on the open
blog dated August 22nd (14), the more annoying it gets. This is why:
It’s not just that now ex-CFO Rod Shier got much higher prices, it’s also the fact that his desk
was in charge of the financial information coming in at the company and knew with absolutely
19

certainty what the publication of its 1q22 financials would do to the company share price. It’s
good that he was summarily fired, of that there is no doubt and CMMC did the right thing there,
but this is worse than scandalous and the firing shouldn’t be the end to the difficult questions
posed to the company around this event. What else did Mr. Shier get up to while in charge of
the CMMC books? Also, let’s note that while employed at the company he was corporate
secretary and that gives him access to other sensitive data.
The Producer Basket
After thirty-five weeks of 2022, the Producer Basket shows a loss of 22.21% to level stakes:
company ticker price 1/1/22 Shares out MktCap(U$Bn) current pps gain/loss%
1 Newmont NEM 62.02 797.44 33.23 41.67 -32.8%
2 Barrick GOLD 19.00 1779 26.51 14.90 -21.6%
3 Franco-Nevada FNV 138.29 191.192 23.25 121.59 -12.1%
4 Agnico Eagle AEM 53.14 454.904 18.91 41.56 -21.8%
5 Wheaton PM WPM 42.93 450.3 14.03 31.15 -27.4%
6 Gold Fields GFI 10.99 887.72 7.25 8.17 -25.7%
7 Kinross Gold KGC 5.81 1296.5 4.25 3.28 -43.5%
8 B2Gold BTG 3.93 1055.6 3.29 3.12 -20.6%
9 Alamos Gold AGI 7.69 392.503 2.81 7.17 -6.8%
10 Sandstorm SAND 6.20 191.4 1.07 5.59 -9.8%
All prices and stock quotes in U$ Port. avg -22.21%
It was another rotten, bearish week for precious metals producers and the way GDX dropped
4.5% and GDXJ dropped 5.3% is fair testimony for the market and for our ten picks in 2022. All
ten of our stocks lost ground, most of them in a narrow range around the GDX/J average losses
and the only one that sticks out is the least worst performance of Wheaton (WPM down 1.6%).
The 2022 Producer Basket: Weekly performance and
35% comparative to GDX control
30%
25%
20%
15%
10%
5%
0%
-5%
-10%
-15%
-20%
-25%
We did better than the GDX by 0.03% and we’re now 1.78% in front of the benchmark. Neither
good nor bad. As for company developments, there wasn’t much during this pre-Labo(u)r Day
(and Labour Day) week but the news out of Barrick (GOLD) Thursday involved interaction with
juniors so let’s check that out briefly before moving on.
Barrick (GOLD): On Thursday Barrick announced in two separate NRs (15) (16) that it had
sold a suite of royalties to two small royalty/streamer companies. One deal with Maverix Metals
(MMX) exchanges U$50m cash and potential bonus payments of up to U$10m for a suite of
“…22 royalties on the production of minerals from mines located in North America, South
America, Australia and Africa.” The star asset in the suite an NSR on the Eskay property, which
was once Barrick’s. The second is a deal with Gold Royalty Corp (GROY) and here’s an excerpt
from that NR to get the gist:
The Portfolio consists of three royalties on the production of minerals from the Granite
20
ts1naJ ht9naJ ht61 dr32 ht03 ht6bef ht31 ht02 ht72 t6ram ht31 ht02 ht72 dr3rpa ht01 ht71 ht42 1yam ht8 ht51 dn22 ht92 ht5nuj ht21 ht91 ht62 dr3luj ht01 ht71 ht42 ts13 ht7 ht41 ts12 ht82 t4pes
The 2022 Producer Basket: Percentage difference
5.0% between GDX benchmark & basket (negative = IKN ahead)
ikn
4.0% gdx control
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
source: NYSE, IKN Calcs
ts1naJ ht9naJ ht61 dr32 ht03 ht6bef ht31 ht02 ht72 t6ram ht31 ht02 ht72 dr3rpa ht01 ht71 ht42 1yam ht8 ht51 dn22 ht92 ht5nuj ht21 ht91 ht62 dr3luj ht01 ht71 ht42 ts13 ht7 ht41 ts12 ht82 t4pes
source: IKN calcs, NYSE data

Creek and Bald Mountain projects located in the State of Nevada. The total
consideration of $27.5 million will be satisfied through the issuance by Gold Royalty of
9,393,681 common shares (the
“Consideration Shares”). Upon closing,
NGM is expected to hold approximately
7.0% of the issued and outstanding shares
of Gold Royalty on a pro forma basis.
These numbers that gets to a total of U$87.5m
is small potatoes for a U$26.5Bn market capper
and as seen in this five day chart, Barrick’s
share price hardly blipped compared to the
GDX benchmark. However, the two small
royaltycos had a leverage advantage on Friday
and the deals were accepted well enough by
the market.
The TinyCaps List
After thirty-five weeks of 2022, the TinyCaps show a loss of 27.60% to level stakes:
company ticker price 1/1/22 Shares out Mkt Cap current pps gain/loss%
Aurelius Min AUL.v 0.24 45.836 5.50 0.12 -50.0%
Golden Pursuit GDP.v 0.13 34.638 5.89 0.17 30.8%
Infield Min INFD.v 0.06 48.445 2.18 0.045 -25.0%
Kingfisher Met KFR.v 0.30 103.007 19.57 0.19 -36.7%
Latin Metals LMS.v 0.12 57.686 6.35 0.11 -8.3%
Manitou Gold MTU.v 0.06 344.57 13.78 0.04 -33.3%
Melkior Res MKR.v 0.295 24.011 5.28 0.22 -25.4%
Precipitate Gold PRG.v 0.105 129.322 9.70 0.075 -28.6%
Signature Res SGU.v 0.07 238.4 4.77 0.02 -71.4%
Winshear Gold WINS.v 0.08 61.585 3.70 0.06 -25.0%
Prices in CAD$, data from TSXV basket avg -27.60%
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 2022. 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.
Our ten somehow managed to contain three modest-sized winners last week (GDP.v, LMS.v,
PRG.v) along with three unchanged stocks
(INFD.v, MKR.v, WINS.v) but the four losers 15% TinyCaps, 2022 weekly tracker
10%
(AUL.v, KFR.v, MTU.v, SGU.v) held sway and saw
5%
our basket average drop 2.57% due mostly to
0%
the two bigger losers Aurelius (AUL.v down -5%
29.4%) and Signature (SGU.v down 20.0%). -10%
However, the unchanged story of low volume -15%
-20%
21 -25%
-30%
-35%
dn2naJ ht9
naJ
ht61naJ dr32 ht03 ht6bef ht31 ht02 ht72 ht6ram ht31 ht02 ht72 dr3rpa ht01 ht71 ht42 ts1yam ht8 ht51 dn22 ht92 ht5nuj ht21 ht91 ht62 dr3yluj ht01 ht71 ht42 ts13 ht7gua ht41 ts12 ht82 ht4pes
source: IKN calcs, TSX data

and market disinterest in these tinycap issues continues to be the major theme.
Aurelius Minerals (AUL.v): AUL filed its 2q22
financials the week before last with no big
surprises in the numbers. It also closed its small
($385k) placement at 10c last Tuesday, but
neither of those events are good reason for the
near-30% drop in the share price last week. The
real reason is sheer apathy:
After gaining a few pennies in late July and early
August, sellers in AUL found no buyers and had
the choice between scant, lowball stink bids or not
selling. As the volume columns show, there
weren’t many sellers but no buying appetite
means that was enough. A fair microcosm of an
awful market for illiquid tinycaps.
Signature Resources (SGU.v): We finally got to read the reason
behind the recent abject weakness in the stock price as on Tuesday
August 30th SGU announced (17) results of its recent drill program.
Two datapoints and one part of the CEO comment will sum this one
up. First, this line from the second paragraph:
“Out of 30 holes sampled, 7 holes have newly identified low-grade
mineralization and a number of higher-grade shoots.”
Which is a nice way of saying they paid for twenty-three dusters.
Second, the selected assay results table and if these thin-vein and
often low grade returns are the best, let’s not worry too much about
the other holes. Third the comment from company President and CEO
Robert Vallis, “We are very pleased with these results”, which can only
mean he’s a man that’s easily pleased. A good thing for one’s personal
life, I’d vouch.
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
Brazil: Lula maintains his advantage
We’re on the other side of the first live TV debate between candidates for 2022’s biggest
regional election, that of Brazil, and polls show there’s little change to the forecast outcome
after what was a fractious and insult-charged show. Respected pollster Ipespe/Abrapel took its
voter intention reading between August 30th and September 1st last week and published its
results yesterday Saturday (18). With 1,100 interviews and a margin of error of +/-3% here's
the full list including Lula's real name:
 Luiz Inácio da Silva: 44%
 Jair Bolsonaro: 35%
 Ciro Gomes: 9%
 Simone Tebet: 5%
 Felipe D'Ávila: 1%
 Soraya Thronicke: 1%
 Vote in White/Spoil Ballot: 3%
 Don't know/No answer: 2%
22

Almost as important, if Lula doesn't make it to 50%+1 vote and direct victory in the first round
of voting on October 2nd (just four weeks from today), an eventual round two run-off between
him and President Bolsonaro is forecast at 53% Lula versus 38% Jair, with 7% voting in white
and 2% no answer.
Colombia and the mess that’s about to hit its mining industry
We last mentioned the mining scene in Colombia two weekends ago in IKN692 when noting
that the new Gustavo Petro government hadn’t said much to date about its hard rock mining
sector and the country’s new Minister of Mining and Energy, Irene Vélez, had “…been mostly
quiet so far” on the subject. Last week that changed with a vengeance last week when the
(historic, tourist attractive, beautiful, recommended to visit) city of Cartagena hosted Colombia’s
Seventh National Mining Congress, on Thursday and Friday. The conference featured news,
views and opinions on mining large and small in Colombia and was capped off by a keynote
closing speech by new President Gustavo Petro, but the event will likely be remembered as the
time when Minister Vélez shows her true colours and her views toward what her new job
entails, as well as a couple of diplomatic faux pas to remember.
The Irene Vélez Show: The quote attributed to Abe Lincoln, “Better to remain silent and be
thought a fool than to speak out and remove all doubt” came to mind this weekend while
considering the appearance of Minister Vélez in Cartagena. She started in reasonable fashion
with a prepared speech that was full of complicated language but said nothing in favour of the
sector, the subtext of her message clearly favouring environmental and social concerns over the
act of mining itself. Here’s an extended quote (translated) (19)
“…we hope that companies feel the incentive from the perspective of their corporate
and social responsibilities and from the compliance of standards, which are well
evaluated at an international level. Therefore, it may also be an incentive for
companies to demonstrate with transparency the socio-ecological commitment that we
are expressing.”
If it’s any help, it doesn’t make much sense in the original Spanish, either. She also said that
mining was a necessary activity for the country and that, “…it’s urgent that we continue
advancing in energy transition to de-carbonize the economy and comply with the Colombia’s
commitments to climate change”, but also warned that, “…this may also create an exacerbated
“extractivism” (and that) we are no going to fall for the errors of “extractivism” which can be
socially and environmentally costly and that later reflects in the general economy of the nation.”
The use of the word “extractivism” raised immediate hackles among the mining audience, being
a classic code word commonly used by environmental activists and anti-mining NGOs when
railing against the industry. Things didn’t get much better when at the end of her presentation,
she announced that the Ministry of Mines and Energy would launch a revision of all previously
granted mining concessions in Colombia in order to confirm whether the concession holders and
companies working them “have fiscal and environmental responsibility”. This would be done by
her ministry in conjunction with The National Environmental Licensing Authority (ANLA) and the
National Mining Agency (ANM) in order to “clean and organize the house.”
That did not go down well at a mining conference, either. Then came the Q&A session, which
was moderated by a presenter and included Colombia’s new Minister of the Environment
Susana Muhamad (see below for more) on stage. Things went from bad to worse and the
audience was already growing somewhat hostile to the messaging. When asked about the Petro
government’s warning that no more mining concessions would be emitted, Minister Vélez
replied the Petro government had never said it would prohibit new concessions (which may be
true, but the President himself in campaign this year clearly said otherwise) and went on the
say (translated), “What we have said is that the major policy line of territorial ordinance is
water. That’s to say we don’t want to give mining concessions in ecologically strategic locations,
and that means the páramos are going to be protected.”
Not great news for Soto Norte and there was more to come. When asked whether her
23

government would support the mining industry while maintaining a pro-social and pro-
environmental standpoint, she answered, “That doesn’t mean that we’re not going to back
mining, only that we’re not going to fall back into extreme extractivism that does social and
environmental damage.” Then when another audience member pointed out that mining was an
important component of the country GDP she replied, “OK, mining contributes to GDP, but how
much damage does it cause to communities and to the environment?” By this point the dissent
had turned into general muttering among audience members as well as several journalists
trying to get their pointed questions. Now I’ll let a section of this report (20) (translated) take
over as it’s better to hear it from another person’s keyboard; otherwise you may think I was
making it up:
The incident happened at the National Mining Congreso, where the Minister was the
protagonist of various polemic moments. First when she was talking to the auditorium
she said that it was necessary to “demand that other countries decrease their
economic growth.” Then she treated the audience like children at school by asking
them for silence; “As I say to my students” was the phrase she used to ask them to
speak more quietly amongst themselves, as the commentaries were already being
shared about her presentation at the event.
Finally, at the press conference after the presentation she preferred to leave abruptly
and leave journalists with their questions unanswered, after whispering to her
colleague that she didn’t know how to respond to their first set of questions. “Thank
you very much to those who managed to listen (to me), I have to travel”, she said
before walking off stage.
Minister Vélez later apologized for her sudden exit, saying that she was late for another
appointment, she realized that she’d made a bad impression and that she was sorry for any
misunderstanding. But the damage was done and now the entire Colombian mining community
knows that the new Minister in charge of their portfolio knows little or nothing about the act of
mining. What’s more, they also know she is versed in the thought and vocabulary of anti-mining
environmental activists and this begged the obvious question of those attending the show. If
Gustavo Petro had appointed somebody to the role of Minister of Mines and Energy who knows
nothing about mines and nothing about energy, but a lot about the social and environmental
damage caused by the industry and with a clear intention of moving forward that agenda, 1)
why was she appointed and 2) what was about to happen to the sector? As for the faux pas,
criticisms were quick to arrive and rather than list the dozens of examples that rained down, I’ll
give just one from right-wing Presidential candidate Enrique Gomez (21):
“What a disgrace. I don’t know whether she’s a lunatic or ignorant, to limit our energy
policy and ask developed countries not to develop any more. Let’s all go back to the
Stone Age and warm our food on campfires.”
And just to make sure that stupidity is not missed, here’s another report on Minister Vélez’s
views on the future of the world economy, one that only an Ivory Towered academic could ever
sustain (22) “We need to demand that other countries, in the framework of global geopolitics,
start to decrease their economic activity. We depend on this decrease in activity to achieve a
better balance and that the impact of climate change has a lesser effect on us.” Yes, she really
said that.
The courtroom drama: After the fun of Minister Vélez’s appearance on Day One of the
Cartagena conference, Friday saw a separate event make mining headlines; a long-awaited
official ruling on the rules and regulations regarding permitting for the mining industry and the
environmental laws affected by the current permitting track was handed down by Colombia’s
“Consejo de Estado”. For the record, the Consejo de Estado translates as “Council of the State”
and is effectively a Supreme Court body that regulates the national government. It rules on
whether decisions and policies enacted by any government or executive comply with Colombia’s
laws and/or its Constitution. From here on and for simplicity’s sake we refer to it as “Supreme
Court”.
That job done we get to the news and it may have been pure coincidence that publication of
the long-awaited 475 page ruling (23) came during the 7th National Mining Conference, but the
consequences are the same and it means we get to tie off several strings at once. The Supreme
24

Court ruling has several aspects concerning mining, mining concessions and permitting of
mining operations but the main ones include:
 National Nature Reserve zones (Sistema Nacional de Áreas Protegidas (Sinap)) should
from now on be exclusion zones for mining activity.
 Areas of “special ecological importance” as well and areas of importance to public
defence (e.g. military exclusion zones, frontier zones, etc) should also be exclusion
zones for mining activity. This second category is somewhat more subjective than the
officially categorized National Nature Reserves, of course.
 The Supreme Court also puts the onus on the person or company seeking a new mining
concession. In order to get title to a concession, the interested party must have a
certificate that recognizes that mining is permitted in the area in question. This is an
important new ruling, as it is now the applicant that must guarantee the zone allows
mining to take place, it’s not up to the government to show it is not allowed.
 As well as National Nature Reserves, areas off-limits to mining should also include
forestry reserves, water aquifers and basins, wetlands, “páramos” and “subparamos”
(high country zones and wetlands) coral reefs, mangroves and certain areas around the
capital city of Bogotá.
With these outlines, The Supreme Court has ordered the government to take an inventory of
current mining concessions to see whether they comply with the new rules in the next two
months. The government must also compile data on whether exploration-stage projects
generate substantial negative environmental impact and whether they are sufficiently controlled
and monitored during exploration phases. The government is also charged with compiling data
on environmental black spots left by historic mining operations (e.g. tailings) and to adopt
preventative and corrective policies to improve their environmental footprint in the near (12
months), medium (24 months) and long term (five years). There are other rulings to this long
document but those are the main ones that will most likely affect mining operations and
exploration-stage projects in the near term and it’s worth underscoring that these new rules
apply equally to oil&gas, coal, other non-metallic and metallic mining operations and exploration
projects. In effect, any place where rock is drilled or dug for profit in the country of Colombia.
Colombia’s new Minister of the Environment welcomed the Supreme Court ruling and she
welcomed it with near-glee, too. The Supreme Court decision arrived Friday, but just one day
before this on Thursday at the Cartagena National Mining Congress, new Minister of the
Environment Susana Muhamad announced to the mining executives, representatives of mining
companies and journalists present that new restrictions and controls on mining activity were
coming, including a new initiative that would mean exploration stage companies would need to
apply for and receive an Environmental Permit (EIA) in order to do standard work such as
general exploration, baseline geology and drilling. Here’s how Reuters reported on Minister
Muhamad’s presentation on Thursday (24):
“I think we must put an environmental license for exploration … because there are also
lots of conflict and a lack of control over mining exploration processes,” Muhamad said.
“That would help exploration be firmed up in a better way, there can be dialogue and
regulation mechanisms and joint work between the government, the companies and
communities,” she said.
Another licensing process would slow already sluggish permitting, an industry source
said, and present a new obstacle to exploration for minerals like copper, key to the
renewables transition touted by leftist President Gustavo Petro.
“Exploration projects have a period of between eight and 18 years during which
companies invest millions in resources without any certainty of finding a deposit,” the
source told Reuters. “An environmental license would extend those time-frames and
de-stimulate key investment.”
Please note that Reuters’ “industry source” wasn’t feeling up to putting their name on the
record, a signal of the new nervousness in the sector. Anyway, with the announcement of the
Supreme Court ruling Minister Muhamad wasted no time and published this statement
(translated) (25):
25

“Yesterday we stated clearly along with (Minister of Mining) Irene Vélez at the 2022
Cartagena National Mining Congress that we will have to revise mining concession
titles that have been emitted in protected zones and strategic ecosystems. Today
comes a judicial order to which we will adhere.”
In other words, on Thursday the industry was duly warned that the government was about to
clamp down on their activity, place a moratorium on concessions, stifle new projects and put
companies through a series of examinations to see whether they deserved to keep their current
concessions. On Friday the Supreme Court handed the government the weaponry to do just
that. You have been warned.
Petro’s keynote conference speech: Then to the main event of Friday, new President
Gustavo Petro was the keynote speaker at the close of the Seventh National Mining Congress in
Cartagena and you can watch all 42 minutes of his speech on this link (26), but to cut a (very)
long story short, I watched it so that you don’t have to. As is his style, he began by waxing
philosophical on the history of mining (literally over the last million years) and under this
context, put forward his vision of “the debate around mining”, which he finally got to at minute
28 of his speech. Even then it was mostly hot air as he talked in very general terms about the
need for some new strategic minerals. He mentioned a list of 12 minerals and according to
Petro, Colombia doesn’t have any of them except for for nickel and some copper. His
overriding point to the audience was that as oil, gas and coal production decreases these new
strategic mineral will increase in value as demand grows around the world for green energy
consumption and in his translated words, “If we want to develop our energy matrix, we need to
be capable of producing these minerals.”
He then got to the crux of his discourse, which was the point where mining and the
environment meet and he came down firmly on the green side of the argument. Again while
underscoring that Colombia wasn’t going to ban mining” he made to the State Council
(Supreme Court) ruling earlier that day which prohibits mining from taking place in
environmentally sensitive zones and gives the ministries in charge (Environment and Mining)
two and a half years to do their inventory and decide on the limits to zones where mining can
take place. Then finally, at minute 39 of the 42, we got a useful statement from Petro on
mining in Colombia under his new government when, after asking the mining community to got
out and look for the minerals the country will need for the new green deal energy production
(lithium etc) he went on to warn in this way: “(But) not in the paramos (high country
wetlands), not in the jungle, not in strategic water basins or aquifers because this is a debate
that’s been going on for several decades and I think it’s finally over, because definitively there
is no exploration or mining operations in this areas strategic for (human) life, those places
where mining can cause human deaths (from pollution) are not for mining.”
It took until then to get a proactive statement from the new President on mining. His general
discourse was to talk up “transition materials” without explaining where or how they would
appear, instead he exhorted the mining community to change direction and go look for lithium,
phosphates and nickel. But when policy was on the table, all he had to offer were measures
that were about to stop mining development in the country and his message fit in well with
those of his academia sourced ministers of Mining and Environment; the mining community is
about to have its wings clipped by a government that will make good on its election pledges to
put “the environment” first, no matter the cost. The ministries in charge of permitting are now
run by “water is worth more than gold” activists who know precious little about the mining
industry and don’t seem to care much about learning, either, people selected by a President
who campaigned on an overtly anti-mining platform and has just been given the judicial tools to
stymie the industry for an indefinite period.
If you haven’t already, run away from the Colombia mining sector now.
26

Market Watching
Deferred.
Conclusion
IKN694 is done, we end with bullet points:
 Hope Canadian and US readers enjoy their long weekend.
 The coming week should see the normal pick-up in news flow and sector activity as the
Northern summer draws to a close and people get their Back to Work/School faces on.
 Until such time as the market finds a turning point, I’m going to hold back on new
trade ideas. I see no point at the moment.
 However, Rio2 (RIO.v) looks ready to start its recovery and while there’s a long, long
way to go to get back even to the 50c prices of early year, you have to start
somewhere and news of a financing deal that brings peer approval with it would be a
good start. With Chile moving back toward the political right this weekend, fliptraders
might want to consider RIO.v as a vehicle in the days ahead. I will merely hold.
I thank you in advance for any feedback. Our Top Pick stock is Minera Alamos (MAI.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.politico.com/news/2022/09/02/powell-pain-fed-00054569
(2) https://seia.sea.gob.cl/expediente/expedientesRecursos.php?modo=ficha&id_expediente=2146327395
(3) https://pressreader.df.cl/diario-financieroebp3/20220901
(4) https://www.induambiente.com/debate-sobre-el-royalty-y-temas-ambientales-marcan-cena-anual-de-la-mineria
(5) https://www.ex-ante.cl/eric-aedo-diputado-dc-despues-del-plebiscito-el-presidente-boric-tiene-que-hacer-un-cambio-
de-gabinete-profundo/
(6) https://www.cnnchile.com/plebiscito/juan-sutil-celebra-victoria-rechazo-crecimiento-empleos-inversion_20220904/
(7) https://www.youtube.com/watch?v=QNfi2G4wxb4
(8) https://www.youtube.com/watch?v=jldEMrkGi4Q
(9) https://anacortesmining.com/2022/07/anacortes-reports-significant-near-surface-gold-intercepts-in-first-two-holes-at-
tres-cruces-phase-1-drilling-program/
(10) https://anacortesmining.com/2022/08/anacortes-mining-drill-hole-atc-504-assays-142-90m-of-1-43-g-t-gold-and-39-
40m-of-1-45-g-t-gold-in-two-separate-intervals/
(11) https://www.hellenicshippingnews.com/copper-touches-one-month-low-on-china-lockdowns-recession-fears/
(12) https://www.hellenicshippingnews.com/metals-poor-china-demand-prospects-pressure-copper/
(13) https://www.americaeconomia.com/codelco-preve-mayor-caida-produccion-2023
(14) https://iknnews.com/rodney-shiers-insider-selling-of-copper-mountain-ccmc-to/
(15) https://www.barrick.com/English/news/news-details/2022/barrick-agrees-to-sell-royalty-portfolio-to-maverix-metals-
for-total-consideration-of-up-to-60-million/default.aspx
27

(16) https://www.barrick.com/English/news/news-details/2022/nevada-gold-mines-agrees-to-sell-royalty-portfolio-to-
gold-royalty-corp-for-total-consideration-of-27.5-million/default.aspx
(17) https://www.signatureresources.ca/news-media/news-releases/2022/-signature-resources-expands-gold-
mineralization-with-ongoing-initial-resource-estimation-development-work
(18) https://veja.abril.com.br/politica/pesquisa-ipespe-mostra-lula-com-44-e-bolsonaro-com-35/
(19) https://www.semana.com/economia/macroeconomia/articulo/gobierno-petro-dice-que-exigira-licencia-ambiental-
para-exploracion-minera-en-colombia/202202/
(20) https://www.pulzo.com/nacion/monica-rodriguez-pide-ministra-irene-velez-minas-que-no-sea-altanera-PP1828734
(21) https://www.rcnradio.com/politica/enrique-gomez-preocupado-por-la-minminas-no-se-si-es-lunatica-o-ignorante
(22) https://www.pulzo.com/nacion/irene-velez-ministra-minas-pide-decrecimiento-va-rueda-prensa-PP1827966
(23) https://www.portafolio.co/economia/fallo-exige-reordenamiento-minero-para-proteger-medioambiente-570475
(24) https://www.mining.com/web/colombia-may-require-environmental-licenses-for-mining-exploration/
(25) https://twitter.com/susanamuhamad/status/1565735327897092102
(26) https://www.youtube.com/watch?v=5z2DVUeeB_s
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
28

Great Panther GPR.to Aug'20 C$0.60 21-Jun-20 C$1.10 83.3% Profit taken, good trade
Jaguar Mining JAG.v Aug'20 C$0.42 21-Jun-20 C$0.65 54.8% Profit taken, good trade
Sandstorm Gold SAND Aug'20 U$7.76 10-May-20 U$9.37 20.7% Profit taken, good trade
Integra Resources ITR.v Aug'20 C$2.23 13-Aug-18 C$5.40 142.2% Profit taken, good trade
Wesdome Gold WDO.to Aug'20 C$2.37 14-Oct-17 C$14.82 525.3% last 1/2 of big win closed
INV Metals INV.to Sep'20 C$0.40 17-May-20 C$0.45 12.5% Cut all Ecuador exposure
Cartier Resources ECR.v Nov'20 C$0.155 3-Aug-18 C$0.25 67.7% Exact close price TBA
Tinka Res TK.v Dec'20 C$0.195 19-Apr-16 C$0.195 0.0% Closed on a round trip fail
2015 to 2019 annual closed positions in appendices below, 2009 to 2014 closed positions in editions IKN553 or earlier
Stocks To Follow Closed Positions 2019
Closed in 2019 closed close price
Atico Mining ATY.v jan'19 C$0.55 24-Jul-16 C$0.32 41.8% patience ran out, made room
Candente Copper DNT.to jan'19 C$0.075 3-Ago-18 C$0.05 -33.3% tiny trade, made room for new
B2Gold BTO.to feb'19 C$2.11 12-Set-14 C$4.05 91.9% Took 1/2 profits, reduce size
Western Copper WRN.to mar'19 C$0.80 20-Ene-19 C$0.81 1.3% Spec trade that didn't work
B2Gold BTO.to mar'19 C$2.11 12-Set-14 C$4.15 96.7% Took rest of profit.
GT Gold GTT.v mar'19 C$1.17 10-Oct-18 C$0.90 -23.1% Took loss. Story changed
NovaGold NG apr'19 U$3.84 13-Ene-19 U$4.15 -8.1% Short that didn't work, sm loss
Zinc One Z.v jun'19 C$0.47 14-Set-17 C$0.025 -94.7% clearing out dead trade
Amarillo Gold AGC.v jun'19 C$0.24 22-Ago-18 C$0.20 -16.7% clearing out dead trade
New Gold NGD aug'19 U$1.44 31-Jul-19 U$1.23 14.6% ST short win thru Q2 earnings
IMPACT Silver IPT.v aug'19 C$0.39 21-Jul-19 C$0.46 18.0% took a quick profit
Fiore Gold F.v aug'19 C$0.34 26-May-19 C$0.56 64.7% Took profit, 2q19 avg
Chakana Copper PERU.v oct'19 C$0.84 22-Mar-18 C$0.16 -81.0% Exploreco trade fail. Want space
Wesdome Gold WDO.to oct'19 C$2.37 14-Oct-17 C$7.57 219.4% Sold half, profit taking
Superior Gold SGI.v oct'19 C$1.46 8-Abr-18 C$0.47 -67.8% Failed sm spec on Au. Moved on
Amerigo Res ARG.to nov'19 C$0.91 23-Set-18 C$0.50 -45.1% worst trade of year, hefty loss
Guyana Goldfields GUY.to dec'19 C$0.94 14-Abr-19 C$0.56 -40.4% taking the loss, financials weak
Tethyan Res TETH.v dec'19 C$0.30 8-Set-19 C$0.16 -46.7% tiny trade, word of probs in co
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
29

Lara Expl. LRA.v Mar'17 C$1.15 8-Apr-12 C$1.05 -8.7% cut to make room for new trade
Rye Patch Gold RPM.v Apr'17 C$0.31 2-Sep-16 C$0.32 3.2% cut for doubts & new stock
Cordoba Min. CDB.v Jun'17 C$0.75 15-Sep-16 C$0.63 -16.0% closed
Constantine Metal CEM.v Aug'17 C$0.135 9-Apr-17 C$0.28 107.4% spec trade closed, good win
Red Eagle Min. R.to Sep'17 C$0.67 13-Dec-16 C$0.27 -59.7% IKN's biggest failure in years
Starcore Intl SAM.to Sep'17 C$0.61 10-Jan-15 C$0.31 -49.2% Patience ran out
B2Gold BTO.to Dec'17 C$2.11 12-Sep-14 C$3.39 60.7% sold small portion for liquidity
Stocks To Follow Closed Positions 2016
Closed in 2016 closed close price
Phoscan Chem FOS.to jan16 C$0.28 29-mar-15 C$0.265 -5.4% Buyout trade, bot but poor deal
True Gold TGM.v jan16 C$0.18 23-ago-15 C$0.25 38.9% okay trade, sold on pol risk
McEwen Mining MUX jan16 U$1.09 25-ene-15 U$1.20 10.1% sold due to lack of value
Lake Shore Gold LSG.to feb-16 C$1.10 07-abr-15 C$1.69 53.6% bot out, sold early in process
Atacama Pacific ATM.v feb-16 C$0.19 26-abr-15 C$0.40 110.5% sold for a double on big pop
New Gold NGD feb-16 U$2.06 24-ene-16 U$2.96 43.7% closed good near-term trade
Sandspring Res SSP.v mar-16 C$0.195 18-oct-15 C$0.32 64.1% Hit tgt, took profit
Teranga Gold TGZ.to mar-16 C$0.54 15-feb-15 C$0.60 11.1% disappointing trade
B2Gold BTG mar-16 U$0.85 13-ene-16 U$1.30 52.9% Separate trade on B2, hit tgt
Dalradian Res DNA.to mar-16 C$0.67 27-oct-13 C$1.00 49.3% Hit target, sold, good win
HudBay Min. HBM may-16 U$4.10 03-abr-16 U$4.36 -6.3% Short trade, poor timing
Nevada Sunrise NEV.v may-16 C$0.185 28-feb-16 C$0.23 24.3% V. small, no big deal either way
Richmont RIC jun-16 U$7.60 01-may-16 U$9.30 22.4% near-term trade, profit taken
INV Metals INV.to jul-16 C$0.25 03-abr-16 C$0.95 280.0% Trade closed on time
HudBay Min. HBM aug16 U$4.98 09-jun-16 U$4.80 3.6% short trade covered, no big deal
Miranda Gold MAD.v oct-16 C$0.125 03-jul-16 C$0.10 -20.0% tiny spec trade, didn't work
Avino G & S ASM nov-16 U$2.00 21-oct-16 U$1.40 -30.0% Abandon trade on bad bot deal
Stocks To Follow Closed Positions 2015
Closed in 2015 closed close price
Argonaut Gold AR.to jan'15 C$1.47 14-dec-14 C$2.53 72.1% Big gain small time, profit taken
Amerigo Res ARG.to jan'15 C$0.405 20-jul-14 C$0.285 -29.6% Given up on weak Cu prices
Reservoir Min. RMC.v jan'15 C$6.05 18-jun-14 C$4.12 -31.9% sold on Cu downturn
Coro Mining COP.to jan'15 C$0.075 26-jan-14 C$0.035 -53.3% sm, sold on Cu downturn
Fortuna Silver FSM mar'15 U$4.12 10-nov-14 U$3.75 9.0% Short used as hedge
GoldQuest Min. GQC.v mar'15 C$0.26 27-oct-13 C$0.085 -67.3% given up ghost
Rio Alto Mining RIO.to apr'15 C$2.30 07-apr-11 C$3.57 55.2% Top pick, bot out, big win
Timmins Gold TGD jun'15 U$0.60 19-apr-15 U$0.62 3.3% near-term trade, out of time
First Majestic AG jul'15 U$10.51 10-aug-14 U$4.55 56.7% horrible failed trade
NovaCopper NCQ.to jul'15 C$1.05 09-apr-14 C$0.50 -52.4% no more Cu exposure, sm sell
McEwen Mining MUX aug'15 U$0.695 21-jul-15 U$0.92 32.4% Closed nearterm flip for win
Midas Gold MAX.to sep'15 C$0.39 21-sep-15 C$0.35 -10.3% Sm. trade idea that didn't work
New Gold NGD oct'15 U$2.18 23-aug-15 U$3.05 39.9% trade closed, profit taken
Legend Gold LGN.v nov'15 C$0.085 01-mar-15 C$0.035 -58.8% tiny "land grab" idea, failed
Timmins Gold TGD nov'15 U$0.245 20-sep-15 U$0.15 -38.8% small near-term loser
Please note that due to space considerations closed positions 2009 to 2014 are now
available on request, or were published in any edition to IKN553 (end 2019).
Important Disclosure
The information and opinions contained within this report reflect the personal views of the author and therefore all
material within should not be construed as accurate or reliable or be utilized as advice for investment or business
purposes. Independent due diligence and discussions with ones own investment and business advisor is strongly
recommended. Accordingly, nothing in this report should be construed as offering a guarantee of the accuracy or
completeness of the information contained herein, as an offer or solicitation with respect to the purchase or sale of any
security or as an endorsement of any product or service. All opinions and estimates included in this report are subject to
change without notice. It is prohibited to copy or redistribute this report to any type of third party without the express
permission of the author.
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