6 The IKN Weekly, issue 706 — Nov 28, 2022
The IKN Weekly
Week 706, November 27th 2022
Contents
This Week: In Today’s Edition, BLS and the advent of more jawbone, Second call for Basket
Cases.
Fundamental Analysis: Minera Alamos (MAI.v) 3q22 financials.
Stocks to Follow: Orefinders (ORX.v), Electra Battery Materials (ELBM.v), Newcore Gold
(NCAU.v), Western Copper & Gold (WRN.to), Minera IRL (MIRL.cse), Amerigo Resources
(ARG.to).
Copper Basket: Overview, Marimaca Copper Corp (MARI.to), Oroco Resources (OCO.v),
Element 29 (ECU.v), Coast Copper (COCO.v).
Producer Basket: Overview, Barrick (GOLD), Alamos Gold (AGI) (AGI.to).
TinyCaps Basket: Overview, Melkior Resources (MKR.v), Infield Minerals (INFD.v).
Regional Politics: Venezuela: Signs of a thaw, Colombia: The government’s new mining law
bill now set for 2023, Nicaragua: A resignation, Peru: The political mess.
Market Watching: Catching up with Rio2 Ltd (RIO.v), The potential to re-buy Goldshore
Resources (GSHR.v) for another trade, New Gold (NGD) changes its CEO.
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
Today’s main fundies section features the 3q22 financials from our Top Pick stock,
Minera Alamos (MAI.v). Production wasn’t as good as we’d guesstimated for the quarter
and as a result, I’m throttling back on the forecast for Q4 but honestly, these are
details. MAI has delivered all the proof of concept you could ever want from a small
developer making the leap to producer and its positive cash flow augurs well for 2023
and beyond. This company epitomizes why I invest in mining companies, there’s true
wealth creation going on here and what’s more, shareholders are getting their fair
share of the spoils.
In today’s Market Watching, we catch up on the latest from our troubled investment in
Rio2 Ltd. Even though the stock price remains firmly in the penalty box, the reasons to
be optimistic about its future are growing.
Considering all the lockdown talk from China and the return of “It’s a Recession!”
jawbone from the US Fed (likely to continue next week), copper held its U$3.60/lb line
very well last week.
In the Stocks to Follow notes, a small adjustment as from next week. Not a sale, but a
stock gets dropped from the list next week. Meanwhile Orefinders (ORX.v) makes its
debut and Western (WRN) gets the news we wanted.
BLS and the advent of more jawbone
Welcome to Advent, ladies and gentlemen readers of The IKN Weekly, as you may not believe
it’s arrived this fast but come our next edition we’ll be just three weeks from Christmas.
However, between now and IKN707 we have dates to consider, starting with the first course,
1
an hors d’oeuvre on Wednesday when Fed Head Jay Powell gets his jawbone working, this time
via a speech entitled “Economic Outlook, Inflation, and the Labor Market” at the Brookings
Institution in DC. That’s at 1:30pm, then half an hour later on the same day the Fed releases its
latest Beige Book with high chances of Jay’s speech finding echoes in the data.
However, the main course comes Friday morning, when US BLS Jobs Report for the month of
November due and according to the reliable Bill McBride at Calculated Risk (1), consensus is
+200k NFP jobs added and the headline unemployment rate to remain unchanged at 3.7%. For
context, let’s remember what happened in the last US BLS report:
The Fed tried hard to blunt the edge of the Wealth Effect that comes from a strong market, but
ultimately stocks decided against the dire warnings and considered both the BLS numbers
(+261k NFP jobs and a 3.7% headline unemployment rate) as indications of continued strength
in the US job market. As such, we still believe The Fed will have to blink and stop raising rates
sooner, rather than later, because the problem of supply isn’t being fixed with The Fed’s
Hammer (see IKN701 intro note “The hammer is the only tool”, the same weekend this desk
decided it was time to start deploying capital in mining stocks again). The classic recession
indicator, the inverted bond yield curve, is now sending a crystal clear signal and to remind
reader, the grey shaded areas on this chart denote periods of recession:
It’s increasingly unlikely that Jerome Powell, the small boy with the hammer, gets his soft
landing. But that’s not going to stop him
from trying, so we should expect another
“Hey guy, we’re really, really REALLY not
joking about further rate hikes” message
from him on Thursday that might work a
while, but the jobs data the next day takes
precedence the message is continued
economic strength, the rally should
continue. That’s the right recipe for the
metal at the base of most decisions we
need to make on these pages, gold:
2
The theory states that in a high-inflation scenario with the Fed backing off rate rises, gold
should do somewhere between well and very well but as
this chart showing the last ten days of the Dow (DJIA),
gold (GLD) and the US Dollar index (DXY), it’s taking time.
That doesn’t surprise this desk. Even as the USD is acting
how we’d expect in a stagflation scenario (the DXY is now
down eight pips from 114) now the market has decided
inflation isn’t going to go away, it means asset value
unlocking from the USD and finding new places to park
however, this early period suits equities even more than
gold as the Risk On atmosphere isn’t one in which money
runs straight from its standard safe haven (USD) and into
another (bullion). Gold’s moment comes when equities
peak and that also means mining stocks will go through
their own rough period (they follow the broad markets as well as the metal) before de-coupling
and out-performing as a group. The updated GLD data suggests this, with Wall St liquidating
gold and pushing the Inventory/Price ratio to its lowest level since 2016, but the last week also
saw the selling level out. It wasn’t much, but GLD inventories rose by 4.34 metric tonnes last
week and at 908.96mt, have so far held the 900mt line.
GLD gold holdings, 2022 YTD (metric tonnes)
1140
1120
1100
1080
1060
1040
1020
1000
980
960
940
920
900
880
860
The economic stagflation environment has a blueprint back in the pre-Volcker era (we’ve talked
about “That 70s Show” on a couple of occasions as 2022 has unfolded) and we know what
happened top gold as the 70s became the 80s, but students of the era also recognize that it
took time for gold bullion to get popular. If history repeats (or merely rhymes) gold will get its
day in the sun soon enough and 2023 is shaping up that way, this is why I’m positioning into
the stocks I like right now. To round off, please take a moment to consider the two GLD tracker
charts again, even though they show up most weeks in the intro. We know Central Banks are
big net buyers of gold this year, we also know Wall St has been a big net seller and in the last
three quarters, GLD alone has dropped 200mt on the market. At some point banks and instos
will come to an agreement on what to do with bullion and when they do, that inventory price
ratio is going to rally not just back to the 6X level, but to 7X and above. That’s when you’ll want
to be fully positioned in your gold stocks.
Second call for Basket Cases
The same segment as last week, with a few words changed here at the top. Some interesting
suggestions already received from some of you (thank you) but there0s still plenty of time and
space for more, so we repeat and continue the annual call for candidates for our three baskets.
As a reminders, every November/December, your author puts together a long list (then a short
list) of stocks for our three tracking baskets for the year to come, namely The Copper Basket,
Producer Basket Tiny Caps Basket. Every year sees companies leave the lists and replaced by
others, so the list of the companies to be swapped out done, what we need are replacements.
But before making the final list, we throw the subject out to the collective mind of readership
and ask for suggestions that are greatly appreciated because without fail, there are always
3
12/21/13 22/1/01 22/1/02 22/1/03 22/2/9 22/2/91 22/3/1 22/3/11 22/3/12 22/3/13 22/4/01 22/4/02 22/4/03 22/5/01 22/5/02 22/5/03 22/6/9 22/6/91 22/6/92 22/7/9 22/7/91 22/7/92 22/8/8 22/8/81 22/8/82 22/9/7 22/9/71 22/9/72 22/01/7 22/01/71 22/01/72 22/11/6 22/11/61
mt 6.50 GLD: Inventory/Price Ratio, 2022 YTD
6.40
6.30
6.20
6.10
6.00
5.90
5.80
5.70
5.60
5.50
5.40
source: SPDR GLD data 5.30
13/21/1202 01/1/2202 02/1/2202 03/1/2202 9/2/2202 91/2/2202 1/3/2202 11/3/2202 12/3/2202 13/3/2202 01/4/2202 02/4/2202 03/4/2202 01/5/2202 02/5/2202 03/5/2202 9/6/2202 91/6/2202 92/6/2202 9/7/2202 91/7/2202 92/7/2202 8/8/2202 81/8/2202 82/8/2202 7/9/2202 71/9/2202 72/9/2202 7/01/2202 71/01/2202 72/01/2202 6/11/2202 61/11/2202
Source: SPDR data, IKN calcs
some ideas that are better than mine. Here’s how the choices happen for the three and a
reminder of what type of company we need in each list:
For The Copper Basket: We look for a group of 15 stocks that as a whole represent the
junior copper mining world. The maximum market cap is $1Bn, but preferably I like
them lower to better reflect our sector of interest. We welcome tinycaps, as a cross
section is required. As we’re not trying to beat the street and want a faithful reflection
of the sector, always happy to include bad copper companies or dog stocks if they bring
something to the table.
For The Producer Basket: There is no upper limit in market cap size, but we do require
a minimum market cap of U$2Bn. For this list, I’m looking for suggestions for precious
metals producers that will out-perform in 2020, because of the less important (except
for my own ego) of trying to beat the GDX benchmark on the year.
For The Tiny Caps: First and foremost, for this list we require companies with a market
cap of $20m maximum, as The TinyCaps tracks market moves of the smallest
companies. However, at this level of market cap there are many broken stocks and
dead companies with projects going nowhere. They are not interesting, as although we
cannot expect operational or managerial perfection at this level the company still needs
to “have a pulse” and be a reasonable trade or speculative alternative.
I normally look to change between three and five companies on each list, though as this year
has seen quite a few tinycap and copper exploreco stocks get broken, I may need a couple
more for those lists So if you have a good candidate for the Producer, Copper or TinyCap lists,
be they companies you own or not (or if it’s a doggish type of idea, perhaps “owned”) please
drop a line the usual addresses. Thanks in advance for any and all suggestions received and
expect this intro note to run next weekend, as well. Thanks in advance for your replies and
thoughts.
Fundamental Analysis of Mining Stocks
Minera Alamos (MAI.v) 3q22 financials
On those weekends the Fundies section focuses on a single company, particularly when
tracking the latest numbers out of a stock we follow closely, I normally start with the firm
intention to make things as brief and concise as possible, only to end up writing a dozen pages
of waffle. But this time I mean it folks, as even though Minera Alamos (MAI.v) is our Top Pick
and your author’s largest position in any junior mining company (by quite a distance), there’s
only so much to say about a company still getting into gear at its operating asset and finalizing
plans to start building its second mine.
But there are still things to say, so here we are and here we go with numbers, charts, thoughts
and so forth on MAI’s 3q22 financials, as filed on the evening of Monday, November 21st. That
date shows on the near-term price chart, as…
…the reaction Tuesday morning was strong and very welcome, both in price and volume terms.
However, the selling pressure picked up again as the week wore one and while things weren’t
4
helped by the curtailed trading week (US Thanksgiving always hits volumes), it was ultimately a
disappointing week’s worth of trading. A little more on the reasons why that might be in the
discussion section at the end (if you don’t want to wade through all the numerical nonsense).
So to the numbers and we start with the worst news from the quarter, the MAI gold production
and sales figures:
MAI: Gold sales, per qtr
5
104
8512 9213
6324
0055
0007 0008 0008
00001
10000
9000
8000
7000
6000
5000 4000
3000
2000
1000
0
12q4 22q1 22q2 22q3 tse22q4 tse32q1 tse32q2 tse32q3 tse32q4
Au Oz
source: company data, IKN ests
At 4,236oz sold, MAI lagged behind our best guess 5,500oz gold for the quarter. Se base dour
guesstimate on what we knew, i.e. the production
of 2,275oz gold in the month of July (as flagged
by MAI in one of its NRs). And while on the
subject, please note in passing that as MAI kept
finished metal inventory at zero for the quarter
(right), we presume production = sales.
The out-sized July compared to the Q3 total
means August and September together produced
just 1,961oz gold, or less than a thousand oz per
month. That’s not the rhythm expected, even at
this early stage, so on inquiring for reasons I
learned the weather was to blame again. Only this time instead of a lack of rain, a deluge
stymied production from the leach pad and from virtually zero rainfall early year, the company
reported around 400mm of rainfall in August alone. The next obvious question was to ask
whether the unstable weather pattern would affect Q4 (i.e. current quarter) production and
without getting a direct answer (cannot blame them) and just reading between the lines, it’s
reasonable to assume MAI isn’t going to try and put the hammer down on a major production
boost. I still expect the company to declare commercial production for 1q23 (they are cash flow
positive, after all) but instead of an estimated 7,000 oz this quarter, the house best guess is
down to 5,500oz.
Which is a slower than expected ramp-up, so it’s time to see the forest for the trees:
MAI: Est forward sales guidance
60000
Gold ounces per qtr
55000
50000
45000
40000
35000
30000
25000
20000
15000
10000
5000
0
12q4 22q1 22q2 22q3 tse22q4 tse32q1 tse32q2 tse32q3 tse32q4 tse42q1 tse42q2 tse42q3 tse42q4 tse52q1 tse52q2 tse52q3 tse52q4 tse62q1 tse62q2 tse62q3 tse62q4 tse72q1 tse72q2 tse72q3
MAI: Inventories
Oz Au/Qtr
Fortuna Au sales
CdO Au sales
Santana Au sales
source: IKN ests from MAI data
This is the chart that best visualizes why we are here in this stock, the growth being baked into
694.5
337.6
780.9
96.7
C$m supplies
10 finished metal inv
leach pad ore
9
8
7
6
5
4
3
2
1
0
4q21 1q22 2q22 3q22
source: company filings
MAI via cash flow to fund expansion down the line in Cerro de Oro and eventually La Fortuna. It
may be a slight disappointment to see Santana ramping at a slower rate, but the prize is not in
2022 or 2023, for that matter. When MAI is A 200K/annum producer and we look back and
remember that we knew it would get to that level back when it was a U$130m market cap
stock with no debt and a producing mine, it will seem laughable that it was trading this cheaply.
The other potential weak point spotted in the 3q22 numbers was the selling price for gold. As
this chart shows, MAI received an average of CAD$2,147/oz for its wares and the price chart
below (source here (2)) shows that gold hasn’t traded that low recently.
MAI Santana: Financial results and ests for next two quarters
6
1932
5401
3861
3232
2401
9941
7412
7401
9761
0022
5501
5451
C$/oz Au Avg received price C$/oz Au
COGS/Oz sold
2600 Total exp/Oz sold
2400
2200
2000
1800
1600
1400 1200
1000
800
600
400
200
0
1q22 2q22 3q22 4q22est
source: company filings, IKN ests and calcs
On this point, the company replied that
received Au price was after the 3%
royalty, plus a few small extra handling
charges, but also that in Q3 there was
only two deliveries and on both
occasions, they were a little unlucky in
closing the deal while gold was at its
lower levels of the quarter. That won’t
always be the case (of course) and luck
evens out, but it’s also clear that erring
on the side of caution for future
received prices is the right way forward
and for Q4, we pencil in a lowball C$2,200/oz number.
However, we note that COGS/oz was competitive even with the lower than expected production
schedule and while total expenditures per ounce were higher, that’s because MAI accelerated
its exploration budget. That’s a good thing and what’s more, we expect the company to
continue in Q4 and beyond (we want them to invest their cash flow, not leave it in the cash till)
and that shows in the costs chart below left (we also separate out the exploration line item for
better viewing, below right):
MAI: FY22 expenses, per qtr MAI: Exploration & evaluation
C$m
10 other exp
Salaries etc
8 G&A
Expl & Eval
Depreciation
6 COGS
4
2
0
1q22 2q22 3q22 4q22est
source: company filings
587.0
642.0 772.0
179.0 80.0-
623.0 922.0
294.1 2.2
2.2
2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
-0.2
02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 tse22q4
C$m
source: company filings
COGS (which includes on-site production and processing) is the lion’s share of costs and thanks
to the ultra-low carrying value of the Santana
project (recall, they built it for literally $10m)
MAI.v: financial results
DD&A is never going to take big lumps out of the
GAAP numbers. And all this brings us to the
preliminary financial results and even though MAI
at Santana isn’t in official commercial production
yet, there are enough data to put together a
comparative for FY22 quarters, along with a guess
for 4q22 (right). Total expenses include those
exploration costs, which explains why they reached
C$7.114m in 3q22 but that still left a mine
operating income of almost C$2m and once a non-
cash forex adjustment boosted things, MAI
returned a net profit of over $3m on the quarter.
As for what’s to come, if MAI manages to produce and sell 5,500oz gold in the current quarter
at our estimated C$2,200/oz, that’s C$12.1m and even if the company accelerates development
expenditures, they should record another profit on operations.
Moving to balance sheet items, things are progressing well:
The basic assets and liabilities charts give a good overall impression of what’s going on, with no
debt and only standard accounts payable run by
any operation on the liabilities sheets.
Meanwhile, assets continue to expand, the
treasury is collecting cash and there’s even some
expansion of fixed assets these days, as the
company spends on infrastructure (right).
However, what really matters today is liquidity
and as these charts show, even the lower than
expected production levels in these early
quarters have been enough to build treasury.
The working capital chart is a little misleading
because these days, inventory is lumped into the
total and MAI will need to keep that as a going
concern (you don’t want to turn all the gold on
your leach pads into cash, it would mean you have no leach pad left).
7
61.5 136.3
925.1 860.1 962.7
196.4
875.2 37.2 490.9 411.7 89.1 40.3
1.21
2.9 9.2 4
C$m
13 Revenues
12
total exp
11
10 mine op inc
9 net income
8
7
6
5 4
3
2
1
0
1q22 2q22 3q22 4q22est
source: company filings
MAI.v: Assets
55
50
45
40
35
30
25
20
15
10
5
0
61q4 71q1 71q2 71q3 71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3
$m MAI.v: Liabilities per qtr
10
9
inventories
fixed 8
other current 7
cash 6
5
4
3
2
1
0
source: company filings
61q4 71q1 71q2 71q3 71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3
source: company filings
srallod
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snoillim
LT liabs
current liabs
MAI.v: Fixed asset carry
13.0
12.0
11.0
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3
C$m
Mining equipment
Construction in progress
source: company filings
MAI.v: Cash treasury per qtr
24
22
20
18
16
14
12
10
8
6
4
2
0
61q4 71q1 71q2 71q3 71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3
source: company filings
srallod
fo
snoillim
28 MAI.v: Working Capital per qtr
26
24
22
20
18
16
14
12
10
8
6
4
2
0
-2
61q4 71q1 71q2 71q3 71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3
source company filings
srallod
fo
snoillim
So cash is the best benchmark and between operating profits and the small equity raise MAI
ran in Q3, moving shares out to 457.68m as at en
Q3 and also this weekend, MAI has all the MAI.v: Shares Out
(NB: Cut-down Y axis)
ammunition it needs to move Santana through the
gears and while the company has made no secret
of its plan to use a near-term loan to fund the
construction of Cerro de Oro once the permits are
in-hand (this time next year, if all goes well) it’s
not beyond the realms of possibility to see the
second mine totally funded from Santana cash
flow. Even if it’s not, Cerro de Oro won’t need
much financing and MAI wouldn’t need to burden
itself for long.
Discussion and conclusion
Getting this closed off in under four pages of script would be excellent. The Q3 numbers from
Minera Alamos were somewhat light on production compared to my sketched-in forecast of
5,500oz but we perspective is required; we’re still in the very early days of this company’s
production life and with all the growth coming in the quarters to come. What matters most
today is that MAI has shown the gold is there, its circuit works and it makes a clear margin on
each ounce of gold it produces. The water situation (too much/too little/what’s next?) is a latent
worry but these are the factors that show in early quarters of a heapleacher and if they decide
to de-risk the future by building a reservoir, the only potential long-term problem goes away in
one shot and easily paid from cash flow. Going forward, the company now plans to bring
forward stripping/pre-strip activities that were originally slated for later in 2023, but may even
be happening as I write these words (we await the Q4 reports). Thjat makes sense and also
speaks clearly of a company now confident about its cash flow and treasury position and for
this desk, the more they invest early, the better.
So that was 3q22, we now await the official announcement of commercial production at
Santana, expected for the start of 2023. From there we can look forward to incremental
production growth but by then, focus and attention is likely to shift to Cerro de Oro as the team
starts building the second mine. Then comes the third and at come point, that large and long-
term forecast chart seen above become reality and by then, the current sub-40c prices will be
left for dead. And on the subject of current share prices and without naming names or sources,
this desk now have a better idea of just why the MAI share price has come under sustained
pressure in the last few weeks. It’s not corporate weakness, it’s not a problem with current
operations, it’s not Mexican political risk, it’s not a delay in the permitting track on the future
pipeline, it’s not the balance sheet, it’s not even a Machiavellian shorter trying to sit on the price
then attempt a discounted buy-out. Instead, it’s a large insto seller. After receiving some intel
that fits well into the way MAI has traded and certain holders have changed strategy in recent
months, it’s a near-certainty that a large holder that built a position in MAI is now unloading for
its own, in-house reasons. The entity is large and the desk that first bought is apparently under
orders from “the people upstairs” (they are apparently selling several other shareholding in
what for them are “small companies”, this is a big house with billions AUM) but their reasons
are ultimately unimportant, what matters to us is that they’ve been dumping a position that was
at its peak nearly 20m shares. That’s the bad news, the good-ish news is that if the people
helping this desk with the intel have got their sums right, the seller only has around 4m shares
of their position left to sell. This may mean a continued rough passage through the Tax Loss
Selling season and it’s not as if we long-termers in MAI haven’t been through a mess like this
before, as we recall the OGR selling spree this time last year. However, this seller should be
done by the New Year and if so, it would time with the right combo of good news from the
company and with luck, a macro backdrop that moves to favour gold and other metals at the
same time (it’s why I’m a buyer at present, after all). So for fellow suffering longs the message
may be that cringe-worthy newsletter writer’s cliché but, hang in there a while longer. And hey,
you may even be in the position to take advantage of this selling pressure and pick up some
very cheap MAI shares before the insto in question is done. If so, you’ll be getting a bargain to
8
59.003 59.003 59.003
9.053
20.473 20.473 93.673 64.704 24.014
83.634 35.934 45.144 49.144 51.644 2.644 84.844 32.944 86.754
500
475
450
425
400
375
350
325
300
275
250
225
200
81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3
source: company filings
serahs
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snoillim
Stocks to Follow
Gold improved a little (proxy GLD up 0.3%) and the bigcap PMs had a good week (GDX up
3.9%), so the headcount among our juniors of eight winners (MAI.v, ARG.to, QCCU.v, RIO.v,
NCAU.v, ORX.v, PA.v, XYZ.v), two unchanged stocks (PGM.v, ATC.v) and seven losers (WRN.to,
CKG.v, ALDE.v, APN.v, MIRL.cse, ELBM.v, MENE.v) doesn’t look great at first light, but there
was a concentration of winners at the top of the table where it counts for the money and the
light, Thanksgiving week volumes are not conducive for smallcap juniors. As for double figure
percentage moves, by far the biggest was the drop in Minera IRL (MIRL.cse down 50.0%) as
reality and sellers hit the stock after its 3q22 financials. There was also one larger winner, as
unfortunately Orefinders (ORX.v up 12.5%) sprang significantly (and was higher still for a
while). More on that below.
With the addition of ORX to the list we now have 17 stocks on the list (13 owned), which will
drop back to 16 this time next week. There are four in the green, one unchanged, the rest are
still underwater. Pass the SCUBA gear.
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$0.38 81.0% $0.75 first tgt, #1 idea
RECOMMENDED STOCKS
Amerigo Res ARG.to STR BUY C$1.36 12-Dec-21 C$1.27 -6.6% CheapCu w/low downside risk
Western Copper WRN.to BUY C$2.02 13-Nov-22 C$2.11 4.5% New trade, watched for months
QC Copper&Gold QCCU.v BUY C$0.275 25-Apr-21 C$0.16 -41.8% Now drilling. Easy hold
Rio2 Ltd. RIO.v HOLD C$0.83 22-Apr-18 C$0.14 -83.1% Cheap on permit probs, appeal
SPECULATIVE TRADES
Newcore Gold NCAU.v BUY C$0.205 23-Oct-22 C$0.185 -9.8% Near-term spec trade
Orefinders ORX.v.v ADDING C$0.04 23-Oct-22 C$0.045 12.5% plan to build position
Chesapeake Gold CKG.v SPEC BUY C$3.07 20-Feb-22 C$2.02 -34.2% Au leverage, small trade so far
Aldebaran Res. ALDE.v BUY C$0.72 16-May-21 C$0.74 2.8% trying patience
Palamina Corp PA.v SPEC BUY C$0.295 21-Nov-21 C$0.105 -64.4% Au expl in S.Peru
Altiplano Metals APN.v HOLD C$0.31 17-Sep-21 C$0.155 -50.0% Cheap entry, plan on track.
Pure Gold PGM.h hold C$0.14 26-Sep-22 C$0.015 -89.3% tiny trade, hit Ch11 wall
Minera IRL MIRL.cse avoid C$0.195 22-Jul-12 C$0.04 -79.5% run into ground by CEO
A WATCHLIST OF POTENTIAL TRADES. NB: I DO NOT OWN
ATAC Res ATC.v SPEC BUY C$0.095 11-Sep-22 C$0.09 -5.3% Cheap Yukon neighbour play
Electra Battery ELBM.v DROPPING C$5.31 20-Mar-22 C$3.07 -42.2% Dropping from watch list
Anacortes Mining XYZ.v WATCH C$0.49 22-Jul-22 C$0.49 0.0% potential gold exploreco trade
LONG-TERM NON-MINING HOLD
Mene Inc. MENE.v adding C$0.66 6-Dec-20 C$0.425 -35.6% 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
Superior Gold SGI.v Oct'22 C$0.95 3-Apr-22 C$0.24 -74.7% Q3 prod fail was last straw
Goldshore Res GSHR.v Nov'22 C$0.18 23-Oct-22 C$0.34 88.9% Quick profit taken
2015 to 2021 annual closed positions in appendices below, 2009 to 2014 closed positions in editions IKN553 or earlier
9
Now for a few notes on some of the covered companies:
Orefinders (ORX.v): POSITION OPENED. However, I’m not in yet personally because I see
no reason why I need to pay 4.5c or even the 5c at
which ORX traded last week. If I’d been smarter and
faster I could have got some 4c at the bell Monday
morning, but I wasn’t (and frankly, it would have felt
cheesy and queue-jumping). Also, as you can see the
volume lumps came early week and as always, interest
and volume in a tinycap reco from a backwater
newsletter soon tailed off and with 4.5c readily
available in the quiet Thursday and Friday trading,
there’s every reason to believe I’ll get my 4c next
week. So, this weekend I mark price at 4c in the open
trades, the personal position comes later.
Electra Battery Materials (ELBM.v): Dropping from Watch List. I like the concept and
think that if it goes well, this company could become a massive success and that means it’s not
dropping off my personal radar entirely and if its 2023 goes well, it may end up back on the
coverage list (and eventually I’ll buy in personally, which was always the intention. But…but,
but but…the events of the last few weeks have seen me throttle back my enthusiasm for the
stock at the moment.
We’ve seen a delay to its construction timeline and there still no real clarity on when it
will fire up motors on its stage one test circuit to process black mass.
We’ve seen the company announce a shortfall in capital and as a result, raise a small
amount of money on costly terms.
We’ve seen thin trading continue and the current share price looks brittle.
If ELBM were a standard mining company and the normal focus of this publication, it would be
easier to keep it on the Watch List and follow its progress, but it isn’t and that’s a simple fact,
as is the fact that with Mene Inc (MENE.v) on the above list, merely watching another non-
mining stock without any near-term intention to step in and buy with my own money dilutes
message and the mission of The IKN Weekly. Until recently, ELBM was on the Watch List as a
genuine candidate for purchase but these days it isn’t, it’s much more a “let’s see what happens
in 2023” type of story for me now. That makes it difficult to justify its place on the above table
and on looking myself in the eye at one point last week (literally, I was shaving), I decided it
was time to fess up and remove ELBM from the list. So that’s what happens as from next
weekend.
I still think ELBM has a great shot at doing great things and is building into the right type of
metals sector with the right technology at the right time. Also and even though his 2022 hasn’t
gone the way he’d like it at some points, ELBM CEO Trent Mell really is one of the good guys in
this industry, is straight as an arrow and the type of person I want to sponsor with my own
cash, however small it might be.
Newcore Gold (NCAU.v): A small reminder about the psychological trap that exists when you
hold off, then hold off some more, then finally buy into a deeply discounted stock; don’t expect
your timing to be perfect and the rebound to previous levels to begin just days after your own
purchase. NCAU is a prime candidate for Tax Loss
Selling and while I’m in at an average of slightly above
20c and it’s currently slightly below that line, it would
surprise me at all to go through a few more weeks at
these levels. On the brighter side, a look at the YTD
chart (right) shows a recent pike in volume and that’s
what you want to see at a real bottom, it’s the first
time since September 2021 that we’ve had 500k+
days in this ticker.
10
In other news, Reuters last week reported this about NCAU’s jurisdiction (3):
Ghana's government is planning a new policy where gold rather than U.S. dollar
reserves will be used to buy oil products. The move is meant to tackle dwindling
foreign currency reserves coupled with demand for dollars by oil importers, which is
weakening the local cedi and increasing living costs.
"The Bank of Ghana and the Precious Minerals Marketing Company (PMMC) will
coordinate with the large-scale mining companies to ensure compliance with this
directive," the vice-president said.
"The gold to be purchased by the Bank of Ghana and the PMMC will be in cedis at
spot price with no discounts," he added.
Interesting, though notably this news is more about bolstering the Central Bank and combating
inflationary tendencies against the local currency ultimately not a real headwind to developing
or running a gold mine in Ghana as long as subsequent governments don’t change that policy
about paying spot prices. This five-year chart of the Ghanaian Cedi (GHS) vs the US Dollar
illustrates the issue clearly…
…and as any mining observer will immediately recognize, this chart also implies lower running
costs in Dollar terms for any company working the country.
Western Copper & Gold (WRN.to): WRN and RTZ didn’t wait until the last minute and keep
us in suspense, instead the two companies announced on Wednesday (4) that RTZ’s investor
rights agreement had been extended by a year, as per the terms of the deal. This means that
RTZ gets to have board observance as well as three secondees at the Casino project until
November 28th 2023. We got CEO comments from both companies, too:
"We are pleased that Rio Tinto has elected to extend its rights as an investor in the
Company," said Paul West-Sells, President and CEO. "We look forward to extending
our great working relationship with Rio Tinto as they continue to work to assess the
Casino Project."
"We are pleased to continue our evaluation of the Casino Project," said Bold Baatar,
Chief Executive, Copper, Rio Tinto.
All fine and this is the most logical outcome at this point. For RTZ, it would have been strange
to have walked away and it’s commonsense business to use the extension clause at its disposal
as WRN/Casino moves into the permitting process, it
now gets to observe how things go with the Canadian
Yukon authorities. Equally for WRN, they want RTZ to
stay on-board, but they have all cash they need (and
more besides) to get through the permitting process,
there’s nom need to raise more from RTZ and dilute the
share count.
The NR dropped midday Wednesday and there wasn’t
much reaction in the share price at the time, then US
Thanksgiving kept Canadian trading (chart right) to low
volumes on Thursday and Friday. However and once
the market digests this news, it should be seen as the
positive it is and I expect WRN to rally further as long as the copper price plays ball.
11
Minera IRL (MIRL.cse): On Tuesday, after seeing its stock price slump to 4.5c in Monday
trading, MIRL published a Corporate Update NR (5) that tried to spin its year into something
positive (as the AGM approaches). It was a nothingburger and, if MIRL’s idea of a notable
achievement is a paid-for article in a magazine or attending a trade show, it only highlights how
little this team has achieved. This time last year we were promised a result on Ollachea in 1q22,
then in early 2022 that got moved back a quarter, but here in 4q22 the new message is how
2022 was merely a preparation for an eventual deal. However, the NR did at least make
mention of the community protests at Corihuarmi we noted in September that blockaded the
mine and got the company to pledge to file its mine closure plans by the end of this year, the
first time MIRL has admitted anything (so much for their community relations). We repeat:
MIRL has just added the latest penalty payment to COFIDE. What third party would wait for
that $1.4m to be added to their bill before closing a deal to buy the company? Equally, I were a
third party mining company would I want to pay MIRL for Ollachea today and inherit its COFIDE
liability, or would I want to wait until November 2023, wait until the creditor triggered its right
to possession and owned the asset outright, then deal with COFIDE directly and pay a lot less
for the same thing? And on top of that, we now have a company in deteriorating financial
position that’s taking out expensive loans just to maintain normal working liquidity. Where does
this end?
But there’s no need to take my opinion of the NR at face value, the market verdict is clear in
the stock price action. After the NR, MIRL found buyers at 4.5c to mop up the selling, but there
was no sign of a rebound and eventually, it couldn’t even hold the 4.5c line and finished at 4c,
representing a 50% chop in one week.
Amerigo Resources (ARG.to): Though still under my personal cost average of $1.36, I was
encouraged by the way ARG traded last week as
copper held its U$3.60/lb line (see The Copper Basket,
below). Under those circumstances, we’d want a
fundamentally solid and profitable copper producer
such as ARG to hold its own recent price and perhaps
improve as sellers stayed away and sure enough,
that’s what we saw (right). I’ll take this happily for the
moment and assuming copper rallies again, ARG will
be in good position to benefit.
The company has made no secret of the way its
dividend and/or buyback program would augment if
copper begins to trade regularly over U$3.80/lb and that’s just 5% away now, something that
doesn’t reflect in the share price so far.
The Copper Basket
After forty-seven weeks of 2022, The Copper Basket shows a loss of 47.59% to level stakes:
12
company ticker price 1/1/22 Shares out Market Cap current pps gain/loss%
1 Copper Mtn CMMC.to 3.42 210.166 336.27 1.60 -53.2%
2 Western Copper WRN.to 2.00 151.597 319.87 2.11 5.5%
3 Marimaca Cop MARI.to 3.77 88.118 263.47 2.99 -20.7%
4 Oroco Res OCO.v 2.04 207.033 211.17 1.02 -50.0%
5 Nevada Copper NCU.to 0.71 658.638 174.54 0.265 -62.7%
6 Aldebaran Res. ALDE.v 0.84 138.579 102.55 0.74 -11.9%
7 Hot Chili HCH.v 1.53 109.223 84.10 0.77 -49.7%
8 Regulus Res. REG.v 1.06 101.85 71.30 0.70 -34.0%
9 Meridian Min MNO.to 1.18 153.735 59.96 0.39 -66.9%
10 C3 Metals CCCM.v 0.16 645.379 41.95 0.065 -59.4%
11 Doré Copper DCMC.v 0.79 84.1 30.28 0.36 -54.4%
12 Kutcho Copper KC.v 0.88 103.94 21.83 0.21 -76.1%
13 QC Copper QCCU.v 0.34 129.06 20.65 0.16 -52.9%
14 Element 29 Res ECU.v 0.58 79.24 17.43 0.22 -62.1%
15 Coast Copper COCO.v 0.13 41.335 1.86 0.045 -65.4%
NB: All stocks in CAD$ Portfolio avg -47.59%
A neutral week, even though six winners (CMMC.to, MNO.to, REG.v, CCCM.v, ECU.v, QCCU.v)
and one unchanged stock (KC.v) were slightly out-
The Copper Basket 2022, weekly evolution
counted by eight losers (OCO.v, MARI.to, NCU.to, 10%
WRN.to, HCH.v, ALDE.v, DCMC.v, COCO.v). The 0%
US Thanksgiving holiday curtailed market action -10%
late week, even though Canada traded all five -20%
days, so Friday was generally a low volume wash -30%
and sentiment-wise, there aren’t many firm -40%
conclusions to draw in this weekend’s Copper
-50%
Basket comments section. As for our list, there
-60%
were two double-figure percentage movers, one
up (CCCM.v up 18.2c, or a penny) and one down
(COCO.v down 10.0%, or half a penny) and the
tracking chart (right) shows how the basket average continues to track in a tight range, after
the big damage on the year done in Q2.
We move to copper-the-metal and please note, as from this weekend we’ve our focus to the
March 2023 Comex copper futures contract to track metals prices. It’s that time of the cycle,
the players are rolling their open interest
to the March contract and we’re only five
days from the first notice date (Nov
30th). Anyway what matters is in the
visual (right) and the main point is how
copper managed to hold the U$3.60/lb
line after its rapid pop-and-drop earlier in
the month that started at U$3.40 and
topped out at U$3.90. That mouthful is
to set up the main point; this time last
week brought hope (ugh, that word)
copper would hold this new line in the
sand and it’s good news that it did,
particularly when we consider the near-
term newsflow around the metal and its
demand.
The macro commentary this week is China, China and more China. The new round of
lockdowns in China made news in business, general media and metals wire stories as Covid-19
13
ts1naJ ht9naJ ht61 dr32 ht03 ht6bef ht31 ht02 ht72 ht6raM ht31 ht02 ht72 dr3rpA ht01 ht71 ht42 s1yam ht8 ht51 dn22 ht92 ht5nuj ht21 ht91 ht62 dr3yluj ht01 ht71 ht42 ts13 ht7gua ht41 ts12 ht82 ht4pes ht11 ht81 ht52 dn2tco ht9 ht61 dr32 ht03 ht6von ht31 ht02 ht72
source: IKN calcs
cases took a sharp rise in the country (human respiratory infections rise as winter sets in….who
knew?) and that, in a nutshell, is our latest round of ChinaFear! cited by bears.
Against that, bulls have made sure the Codelco estimate of a 8m tonnes copper shortfall by
2032 made the rounds last week and that’s fair enough, we’re back to the tension between
near-term demand slack and the obvious gap opening up in the supply/demand equation over
the long-term. But there was also copper supportive news for the near-term from China when
China’s main banks published and 16 point plan to support the Chinese real estate sector, with
measures including loan payment deferrals and new lines of credit for real estate projects. Also
last week and for the second time this year, China’s Central Bank dropped its reserve
requirement by a quarter point, meaning that national banks don’t have to hold as much in
their reserves and improving liquidity
Those are good reasons to see copper price support and they seem to have worked last week,
however there was something of a false flag story doing the rounds that started (surprise,
surprise) at biz clickbait generator Bloomberg (6):
“Chilean Copper Giant Codelco to Cut Sales to China Next Year”
The story is that according to un-named sources, Codelco plans to reduce shipments of annual
contract copper to China by around 10% next year and that the same 10%-or-so reduction will
apply to spot sales of Cu concentrates. This was followed up by a separate story about cathode
copper sales to China dropping by as much as 50% (7) and quotes from a major client of the
company: “We have been told [by Codelco] to expect that it may even be unable able to deliver
copper cathodes under multi-year evergreen contracts.” That final point may/may not be true,
but cathode isn’t such a big thing at Codelco and the main story is around the Bloomie
headlines of a Codelco looking to drop deliveries to China by around 10% last year. Sounds
serious, especially when it’s framed as the biggest producer in the biggest copper country
supplying less to the biggest customer, so some context is required:
For the ten years to the Covid pandemic, Codelco averaged production of around 1.8m tonnes
per annum (with the best year 2015, at 1.89m tonnes). However, production is now tailing off
due mostly to mature mines processing lower grades and this year, Codelco first guided for
1.61m tonnes but then in August dropped its forecast to just 1.5m tonnes (8). As for revised
guidance (8):
"The production outlook for 2023 is 1.45 million tonnes. For the five-year period
between 2023 and 2027, the best forecast we have is 1.5 million tonnes on average,"
Codelco Chairman Maximo Pacheco told El Mercurio.
Compared to that, we also know China receives around half of Codelco’s total production on
average, so let’s call that 750,000 tonnes Cu this year. In other words, the “big drop”
trumpeted by Bloomberg last week sums to around 75,000 tonnes copper, which for usre is a
lot but compares to the expected 2022 total copper production of an estimated 21.8m tonnes,
of which over 50% is consumed by China. In other words and in ballpark terms, China in 2023
will consume 11m tonnes of copper, but will have 750,000m tonnes less delivered from Codelco
and the “headline-making supply shock” we’re talking about is around 0.7%.
That’s Bloomberg clickbait for you, now it’s time for some data that might matter to the price of
copper, our regular weekly copper inventories data:
We’re bouncing around the 200k level, as last week saw the total aggregate copper
stocks in the three official world systems drop by 15,762 metric tonnes (mt) to close
under the 200k line at 195,106mt.
The big move happened at the SHFE, where 15,568mt left inventory to leave the
weekend total at 70,249mt. After a couple of surprising weeks in which stocks grew at
a time of year they are normally drawn down this was more normal and we’d expect
this direction to continue through December.
Very little change at The LME, down just 500mt to close at 90,750mt. Things are tight
14
and with cancelled warrants (chart right)
down to 13,325mt, we are now at a level
when you’d expect stocks to start
dropping again.
The Comex saw inventory copper rise by
a modest 316mt to close at 34,107mt,
No biggie.
The dedicated SHFE charts continue to tell us
that stocks are low in Asia, but so far no stock-out on the horizon.
SHFE copper inventory levels, 2018 to 2022
400000
350000
300000
250000
200000
150000
100000
50000
0
15
1 2 3 4 5 6 7 8 9 01 11 21 31 41 51 61 71 81 91 02 12 22 32 42 52 62 72 82 92 03 13 23 33 43 53 63 73 83 93 04 14 24 34 44 54 64 74 84 94 05 15 25
MT Cu 2022
2021
2020
2019
2018
source: Cochilco data
Shanghai Futures Exchange Warehouse Stocks, 2014 to date
400000
350000
300000
250000
200000
150000
100000
50000
0
31'13ceD dr32 ht02 ht51 ht01 ht5tco ht03 ht52 dn22 ht71 ht21 ht6pes ts1von 102ht72ced ts12 ht71 ht21 ht7guA dn2tcO ht4ceD ht92 ht62 ts12 ht61 ht01 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 ht9
LME: Cu tonnage under cancelled warrant
Mt Cu
|
source: Cochilco
Now a few notes on basket component stocks:
Marimaca Copper Corp (MARI.to): That might
look like a serious Friday drop on accelerated volume,
but even that was less than 14,000 shares traded. The
wild swings over the last two days on no news are
best ignored, but MARI would benefit from a tighter
bid/ask that encouraged traders to consider it as an
option when thinking copper.
Oroco Resources (OCO.v): To make my position
clear, I have no issue with OCO and even though its
project isn’t high grade, it’s no worse than near-ish
neighbour Bellavista and that shows this grade makes
for a has every chance. As for its price action, I famously missed its big move from mid 2020
through 2021 and called it (or at least considered it in private) overpriced on a dozen occasions
as its valuation grew and grew. In other words, I missed a winner because I was fixed on its
fundamentals without considering its momentum or the positive sentiment it had garnered.
00142
52074 57334 00714 52045 05205
52027 52418
52926 05694
57332
52271 05761 52511 57471
52581 52862 00642
00743 57924 00914 52975 05174 05803 04441 0588 0018 5786 00864 05386
57077
05064 05883 05891
52531
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 ht11 ht81 ht52 dn2tco ht9 ht61 dr32 ht03 ht6von ht31 ht02 ht72
mt Cu
source: Cochilco
However, the months of mid-2022 saw the overselling drag OCO down to discount levels and
the opposite effect, as disaffected “OCO fans” threw in the towel. There was an extended
window when its sub-Loonie prices looked under-priced compared to peers (a phrase we’ll
return to in a moment) and I said as much here, but
of course without buying any personally. Which brings
us to November 2022 and the recent Loonie-or-abouts
prices, which look reasonable value and in-line with
peers, so when OCO started running again two weeks
ago on a renewal of the same retail pump rah-rah I
said as much in IKN706, last weekend. This,
apparently, ruffled a few feathers. However,
considering what the stock did last week (right) it
seems the new promo doesn’t have the legs of
previous attempts and OCO is now priced back with
peers. This weekend I consider it reasonable value
and if you’re long the stock at a Loonie, you won’t
hear any complaints from this corner.
Which brings me to the only issue I have with this stock, i.e. its major promoter and the league
of fans he has gathered around this stock. It’s all fine to point at a company, do a few sums
and state/claim/shout-from-rooftops “This company is undervalued compared to its potential”,
another to look at the wider spectrum of copper explorecos and developers and consider it
among a field of companies that are equally “cheap” (or often even more so). The promo
around OCO has never done much in the way of peer-to-peer comparatives going on, it’s
missed out on bringing other opportunities in the copper exploreco space that have at least as
good, often better, baseline economics and financial arguments in their favour. It’s also easy to
claim that OCO at Santo Tomas is a “takeover candidate” with a dozen or so companies
“watching its progress closely”, even to point out to a less sophisticated audience that
companies such as Arequipa Resources sold for $800m after a single, early-stage drill program.
It’s another to point out that deposits of this type rarely change hands before even a pre-
feasibility study (PFS) is published on the project and that the hype of a “buyout any moment”
which propelled OCO into 2021 was so much hot air.
These days OCO is realistically priced and what’s more, the work being done on the property is
serious and good (as far as I can ascertain, at least). The last thing it needs is another round of
bluster and hype from someone who may know a thing or two about marketing in our modern
visual and social-media dependent world, but when it comes to mining quite literally does not
what he is talking about. Equally, OCO may have benefited from the attention and favourable
financing climate Mariusz brought in its early stages of development, but if it wants to continue
to be taken seriously it would do well to put distance between it and this type of promotion now
that it’s trying to impress a different type of audience (the ones with serious money).
Coast Copper (COCO.v): Last week COCO filed its 3q22 financials and here’s the business
end of the balance sheet page:
16
Cash was down to fumes as at September 30th, but we like the low a/c payable position and the
rest of the financials were reasonably clean. What’s more, in mid-October COCO closed the
non-core property sale to a private third party entity for $3m, with the payments scheduled as
six payments of $250k cash and $250k shares in the privco, the payments arriving every six
months. We assume COCO won’t sell the privco shares back (or to anyone else, not
immediately anyway) which means it now has $250k to cover its background burn for any six
month period. That’s useful money, but not enough to pay a background burn that typically
runs over $100k/quarter, even when COCO isn’t drilling on Vancouver Island. Therefore we can
expect the company to go back to market and run a placement at some point, this desk’s best
guess is early 2023.
Element 29 (ECU.v): I have a meeting slated with management at ECU on Tuesday, so
expect notes forthcoming and opinions on this previously held copper exploreco next weekend.
I continue to believe Elida is the reason to own ECU and as that’s now being drilled (and the
price has dropped further), there’s always the potential for a revisit trade.
The Producer Basket
After 47 weeks of 2022, the Producer Basket shows a loss of 8.47% to level stakes:
company ticker price 1/1/22 Shares out MktCap(U$Bn) current pps gain/loss%
1 Newmont NEM 62.02 797.44 36.56 45.85 -26.1%
2 Barrick GOLD 19.00 1779 28.50 16.02 -15.7%
3 Franco-Nevada FNV 138.29 191.66 27.69 144.45 4.5%
4 Agnico Eagle AEM 53.14 454.904 22.69 49.87 -6.2%
5 Wheaton PM WPM 42.93 450.3 17.32 38.46 -10.4%
6 Gold Fields GFI 10.99 887.72 9.69 10.91 -0.7%
7 Kinross Gold KGC 5.81 1296.5 5.34 4.12 -29.1%
8 Alamos Gold AGI 7.69 392.503 3.77 9.61 25.0%
9 B2Gold BTG 3.93 1055.6 3.71 3.51 -10.7%
10 Sandstorm SAND 6.20 223.79 1.17 5.25 -15.3%
All prices and stock quotes in U$ Port. avg -8.47%
A good week for the larger producers, with all ten of our basket component stocks registering
gains, and most of them around in-line with the median set by the GDX benchmark (GDX up
3.9%) even though gold only rose a little (GLD proxy up 0.3%). The outliers to the downside
were Kinross (KGC up 0.5%) and Newmont (NEM up 1.6%) that lagged the field, while the best
of the week was Alamos Gold (AGI up 7.7%) that continues to out-perform its peers and last
week, managed to climb above B2Gold (BTG) on the market cap league table.
With just one month left in the 2022 race, our basket continues to hold a slight lead over the
GDX benchmark, but victory is far from guaranteed.
The 2022 Producer Basket: Weekly performance and
35% comparative to GDX control
30%
25%
20%
15%
10%
5%
0%
-5%
-10%
-15%
-20%
-25%
-30%
Barrick (GOLD): On Monday November 21st GOLD announced the results of its debt buyback
17
ts1naJ ht9naJ ht61 dr32 ht03 ht6bef ht31 ht02 ht72 ht6ram ht31 ht02 ht72 dr3rpa ht01 ht71 ht42 s1yam ht8 ht51 dn22 ht92 ht5nuj ht21 ht91 ht62 dr3luj ht01 ht71 ht42 ts13 ht7 ht41 ts12 ht82 ht4pes ht11 ht81 ht52 dn2tco ht9 ht61 dr32 ht03 ht6von ht31 ht02 ht72
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%
-3.0%
source: NYSE, IKN Calcs -4.0%
ts1naJ ht9naJ ht61 dr32 ht03 ht6bef ht31 ht02 ht72 ht6ram ht31 ht02 ht72 dr3rpa ht01 ht71 ht42 s1yam ht8 ht51 dn22 ht92 ht5nuj ht21 ht91 ht62 dr3luj ht01 ht71 ht42 ts13 ht7 ht41 ts12 ht82 ht4pes ht11 ht81 ht52 dn2tco ht9 ht61 dr32 ht03 ht6von ht31 ht02 ht72
source: IKN calcs, NYSE data
tender offer and just over U$322m of the U$694m in 2042 Notes were retired. That represents
a little over 46% of the total and is a reasonable response. We again applaud Barrick for
putting its treasury to use in a prudent manner and improving its balance sheet by swapping
“zero coupon credit” (i.e. Dollar Bills) for debt on which it pays 5.25%.
Alamos Gold (AGI) (AGI.to): Aside from the
dividend declaration on Tuesday (another 2.5c)
there were no extra news from AGI last week, but
that didn’t stop the stock from going on a tear and
hitting new 52 week highs (and as mentioned on
the blog, it’s close to a two-year highs). This ten-
day chart (right) shows how AGI fed off its own
momentum and when GDX rallied Tuesday, this one
was ready to roll. Now 25% up on the year, AGI
has shown other large producers that it’s possible
to provide solid returns to PM investors in a tough
year. The secret? Do what you said you’d do at the
start of the year, not exactly a secret recipe.
The TinyCaps List
After forty-seven weeks of 2022, the TinyCaps show a loss of 33.96% to level stakes:
company ticker price 1/1/22 Shares out Mkt Cap current pps gain/loss%
Aurelius Min AUL.v 0.24 45.836 3.21 0.07 -70.8%
Golden Pursuit GDP.v 0.13 34.638 6.23 0.18 38.5%
Infield Min INFD.v 0.06 48.445 1.70 0.035 -41.7%
Kingfisher Met KFR.v 0.30 103.007 10.82 0.105 -65.0%
Latin Metals LMS.v 0.12 57.686 7.50 0.13 8.3%
Manitou Gold MTU.v 0.06 344.57 10.34 0.03 -50.0%
Melkior Res MKR.v 0.295 24.011 6.00 0.25 -15.3%
Precipitate Gold PRG.v 0.105 129.322 10.35 0.08 -23.8%
Signature Res SGU.v 0.07 238.4 3.58 0.015 -78.6%
Winshear Gold WINS.v 0.08 61.585 3.08 0.05 -37.5%
Prices in CAD$, data from TSXV basket avg -33.96%
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.
The rally in the basket average continued last 15% TinyCaps, 2022 weekly tracker
10%
week thanks to five winners (KFR.v, LMS.v,
5%
MTU.v, MKR.v, PRG.v) and four unchanged 0%
-5%
stocks (AUL.v, INFD.v, SGU.v, WINS.v) from
-10%
the ten, with just one stock (GDP.v) down on -15%
-20%
the week. The biggest winners in percentage -25%
terms were Manitou (MTU.v up 20.0%, in -30%
-35%
18
-40%
-45%
-50%
dn2naJ naJ t61naJ dr32 ht03 ht6bef ht31 ht02 ht72 ht6ram ht31 ht02 ht72 dr3rpa ht01 ht71 ht42 s1yam ht8 ht51 dn22 ht92 ht5nuj ht21 ht91 ht62 dr3yluj ht01 ht71 ht42 ts13 ht7gua ht41 ts12 ht82 ht4pes ht11 ht81 ht52 dn2tco ht9 ht61 dr32 ht03 ht6von ht31 ht02 ht72
source: IKN calcs, TSX data
reality half a cent) and Melkior (MKR.v up 19.1%, see below) and those two went a big way
into the overall 2.5% improvement in the basket.
Melkior Resources (MKR.v): Under the title line (9) “Melkior Intersects 2.23 g/t Gold Eq over
24.5m in GEN-22-01”, MKR tried to drum up interest in its Genex project last Thursday. Here
are the bullet points from the NR…
First rushed results back from GEN-22-01 intercepted 2.23 g/t Au Eq over 24.5 metres,
including 3.69 g/t Au Eq over 7.78 metres
There are still 105 non-rush samples where assays are outstanding which have the
potential to extend this intercept
The Company has completed its 4,000-metre drill program and will report additional
results through the remainder of the year
…and the modifiers were out in the CEO comments from these rushed results, starting, “
“We are very excited about this strong first intercept”.
They are allowed to be, of course, but as this ten-day
chart shows (right) trading was either thin (Monday)
or very thin all last week (e.g. just 1,000 shares traded
Friday to mark the 25c price). Therefore the same
message as last week, Genex is far from an unknown
quantity and has been picked over for many years and
via several programs. It’s understood to be capable of
returning good assays, but the type of continuity
needed for an economic deposit has been more
difficult to pin down. The lack of deep interest via new
buyers is a clue to the wider market’s view.
Infield Minerals (INFD.v): We knew from its NR in September (10) that the drilling at INFD’s
Desperado gold-silver target in Nevada didn’t turn up much, on Friday via its 3q22 financials we
found out the program cost them $720k, including $589k direct costs for the drilling. That’s the
price you pay to explore and it’s all fair enough, but unlike its M1 property INFD hasn’t written
down the asset yet even though it seems there’s no further plans to work there.
Cash dropped around $700k in Q3 and they’re down to $787k treasury and around $750k in
working cap. With no drilling going on, the company will be able to stretch that cash out for a
few quarters and at this market cap ($1.9m) you’re getting a reasonable quasi-shell with a
willing and keen core team. What’s missing is a decent prospect to develop, so it’s one for the
notebooks in 2023 if (and only if) they announce a new acquisition.
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
Venezuela: Signs of a thaw
This weekend brings an interesting news story on a country that we’ve ignored almost totally
for almost a decade, here’s the take from the BBC (11):
Venezuela's government and the opposition have signed a preliminary agreement to
find a way out of the country's political crisis.
During talks in Mexico, the two issued a joint statement requesting that billions of
dollars frozen abroad be released to help fund social projects.
It comes after years of failed attempts to solve a political deadlock.
In response, the US said that it would allow the American oil company Chevron to
resume some activity in Venezuela.
Following President Nicolás Maduro's election in 2013, he has grown increasingly
authoritarian.
The note continues with some background on sanctions to date and how The USA has tried to
19
dislodge Maduro by backing opposition leader Juan Guaidó and recognizing him as President, a
policy that’s fallen flat on its faced in the three years since enacted. And while the victory of
Lefty Gustavo Petro in neighbouring Colombia may have helped the détente, there’s no
doubting the real reason for this development, it’s all about the oil and Hugo Chávez famously
said while on the campaign trail before becoming President for the first time, "Oil is a
geopolitical weapon and these imbeciles who govern us don't realize the power they have, as
an oil-producing country” (12) and couple of decades of Socialist rule that has gutted Venezuela
and robbed the country blind hasn’t changed that basic truth. It’s also testament of how a
dictatorship can retain power indefinitely, as the Nicolas Maduro and the PSV party has held
onto power despite all efforts against them. Last week’s talks and this initial agreement are a
major victory for Maduro and will strengthen his hold on power and ironically, last week would
not have happened without Venezuela’s ally Russia’s invading Ukraine and the knock-on effects
that move has had on the energy market. From here, it would be no surprise to see other
sanctions in place against Venezuela quietly lifted and all in time for the next big event on the
country’s political calendar, the 2024 election.
It will take longer for the Venezuelan mining world to open up to outside investment (and even
then, it’s not a jurisdiction one should trust) so no holding breath on the prospects for juniors to
go hunting there. But last week brought a first sign that Venezuela may start opening up to
foreign capital and investment again and considering the potential for growth and its economic
lag, that spells opportunity. Hugo Chávez was spot on.
Colombia: The government’s new mining law bill now set for 2023
Last week saw a mining story about the Petro government plans to create a State mining
company do the rounds, the idea being to group either small miners under a national co-
operative, or take larger copper projects on in JV with private capitals, or both. It’s one those
stories that are easily ignored because even if the plans to create a new State company come
to fruition, it invariably takes years to get from first proposals to a watered down reality.
However, along with the story came a buried lede when the newly appointed director of the
National Mining Agency (ANM), Luis Álvaro Pardo Becerra (normally known as Álvaro Pardo),
was interviewed on the new State mining entity proposal, but then gave the world information
on the state of play in the government’s moves to update its mining laws, something that
matters more to Colombia’s mining sector than any Nationalization pipe dream. Here’s a
translation of a segment from this report (13) in which new rules for closing old mines are the
lead-in to the real news:
The director of the National Mining Agency said that while there are several proposals
for mine closure rules in the country, they hope to cover them in the updated Mining
Code, the rulebook for mining resources in Colombia.
This is a proposal that comes from the government plan from the Pacto Historico party
(Petro’s alliance party), that looks to reach a new consensus on what Colombians want
regarding our mineral resources”, said Luis Álvaro Pardo Becerra.
According to the ANM director, the current Mining Code was created by a limited group
of people with self-interests. Due to this, they want to create this new document after
listening to the communities. “The standing committee of Congress is conducting
audiences in different parts of the country, listening to the communities and we are
participating to see what they are demanding, with the view to including these opinions
in the Mining Code.”
Pardo also said that the ANM was also working internally on a proposal to present to
Congress next year. “We’re looking to fill in the gaps that the Law 685 of 2001 (the
current mining law) has left.”
This information makes sense, as this desk has watched as the new government has run a
series of community level meetings on mining in a type of roadshow (most recently in Mocoa,
also recently in Bucaramanga). Therefore we now know that the original plan to bring a new
mining law project to Congress in the first 100 days of the Petro government has been delayed
somewhat and we now need to wait until the New Year.
20
Nicaragua: A resignation
Sergio Murillo was elected as president of Nicaragua’s Chamber of Mining, Caminic, in 2019 and
was re-elected for a second two year period in 2021. He was up for re-election in February
2023 but it turns out that last month October he quietly resigned his post, with the news kept
away from media until last week (14). There was no reason given for his sudden resignation,
but we do know his post is being filled until next February by one Oscar Vega, who is the
Caminic representative for Calibre Mining (CXB.to).
Peru: The political mess
I’ve been putting off mentioning the unholy mess that is Peruvian politics on these pages for
weeks, but the events of this week force at least a few words. The background to the events of
Thursday are deep Peru politics and unless you’re a junkie for the subject, unlikely to be of
much interest to an audience looking for news related to the mining sector (but if you want,
mail in and ask questions) so to cut a long story short, the ongoing street fight between
government and Congress saw Prime Minister Anibal Torres resign on Thursday and President
Pedro Castillo appoint his fifth Prime Minister in 15 months of government, giving the job to one
Betssy Chavez (who herself was sanctioned by Congress recently and kicked out of her
ministerial job). She has formed a new cabinet that includes a new Minister of Energy and
Mining, Oliverio Muñoz Cabrera, who at least this time is a qualified mining engineer who is
currently active in the sector (his company works on sustainability projects for large mining
companies).
All the above is what’s happening on the surface of Peruvian politics, behind the scenes
Congress continues in its all-out efforts to try and dislodge President Castillo from his job, by
fair means or foul. They’ve now tried and failed on several occasions to get enough votes to
cover the 2/3rds majority they’d need to impeach him (his party bloc holds firm) and in the
meantime, Castillo himself has transformed from a naïve politico into something more
streetwise and as much as Congress would like otherwise, he knows how to defend his own
corner these days (mainly by learning from the dirty tricks Congress has tried on him and using
the same tactics). The only way he’s going to fall now is if he voluntarily resigns and, as he’s
made his intention to see out his five year term clear to all, we’ve hit a political impasse with
enemies now firmly entrenched.
This means very little is likely to get done during his term of office, he’s the dead duck
President of them all, but that’s not a real worry for the average Peruvian that’s well used to
inept governments with shady hangers-on around the positions of power. The country will
continue to be the way it’s always been and while it’s up to you to decide whether that’s good
or bad for the long-term future of mining, for this desk it’s a case of better the devil one knows
and in real terms, Peru is still the pro-mining jurisdiction it’s always been…as long as you’re in
the right region and with a suitable address. The bottom line is that there are better things for
a mining company in Peru to worry about than this inept President, his awful government and
the even worse Congress trying to usurp them all. If your company has good local relations and
an interesting project, it will make progress and get approvals, no matter what.
Market Watching
Catching up with Rio2 Ltd (RIO.v)
An overdue update on the trials and tribulations of our previous Top Pick and current large
position with “Hold” set against the name in the Stocks to Follow table. Three things to say
about Rio2 Ltd (RIO.v) this weekend and I’m glad to report it’s mostly positive, though it’s
going to need more than “promising developments” to move the stock out of its current and
stubborn trading range, particularly when you consider the time of year and the potential for
the stock to hit Tax Loss selling in the next four weeks. Things to do:
1) The 3q22 financials
2) The news on the royalty sale last week
3) Political developments in Chile
21
The 3q22 financials (in US Dollars unless stated)
Two weeks ago (I’m late to these) Rio2 filed its 3q22 financials and the critical question thse
days is cash and liquidity. Rio needs to keep afloat financially as it moves through its appeals
process, during which no major work gets done on the site (though extra EIA monitoring on
those chinchilla is a certainly, it’s the permit appeal and the legal beagles that matter. The
balance sheet is where the rubber hits the road, here are the overview charts:
RIO.v: Assets overview
140
120
100
80
60
40
20
0
In assets, we see fixed expand to U$108.23m even though RIO.v surely would have preferred
to cancel some of the long lead time items that they’d ordered before the permit denial ruined
their plans. But it is what it is and once bought, those lead items don’t need to be bought again
once the permit is eventually approved (and it will be). Meanwhile, liabilities are dominated by
the $25m advanced by Wheaton (WPM) but that isn’t going anywhere and will stay as a long-
term item. More important to Rio2’s near-term future is the $4.826m in near-term liabilities,
nearly all trade payables. Sat next to the treasury position (below left) of $5.282m, that leaves
working capital as at September 30th at a thin $0.87m and means that while RIO.v still had $5m
in cash at the end of the last quarter, it needed to get more liquidity in the near-term.
As for spending in Q3, here are two tracking charts and expenses show the main item was
U$m RIO.v: Quarterly expenses breakdown
6
5.5 employ. costs prof fees
5 share comp Expl. Costs
4.5 G&A other
4
3.5
3
2.5
2
1.5
1
0.5
0
1q20 2q20 3q20 4q20 1q21 2q21 3q21 4q21 1q22 2q22 3q22
source: company filings
22
02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3
U$m RIO.v: Liabilities overview
50
fixed
45
other current
cash+ST 40
35
30
25
20
15
10
5
0
source: company filings
02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3
U$m
LT liab
current liab
source: company filings
RIO.v: Cash & ST, per qtr
297.41
47.9 579.9
434.3 535.3
554.1
560.32 543.12
966.33
416.31
282.5
40
35
30
25
20
15
10
5
0
02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3
RIO.v: Working capital
U$m
source: company filings
69.31
92.9 19.9
64.1
60.3
80.0-
68.22
54.91
63.52
11.11
78.0
30
25
20
15
10
5
0
-5
02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3
U$m
source: company filings
$2.121m in employment costs. That’s the last time it’s going to be that high and reflects most
of the redundancy payments made to staff in light of the permit reversal. That wasn’t a good
day for the company and with around three-
quarters of staff laid off and paid off, burn rate is U$m RIO.v: Investing activities
bound to drop substantially in the quarters to 16
come (though professional fees to pay those 14
Property/Equip
12
Chilean lawyers will likely grow somewhat).
Expl/Eval assets
10
8
As for the investment and development costs, Q3
6
is also the last time we’re likely to see $5m worth
4
of equipment land at the company. I understand
2
there are a few more long lead time bills to cover,
0
but the rump is now done. So with RIO.v needing
1q20 2q20 3q20 4q20 1q21 2q21 3q21 4q21 1q22 2q22 3q22
cash in the near-term in order to stay afloat over
source: company filings
the next 12 months, the news last week came at
the right time.
The royalty sale news. This NR (15) has been literally months in the works, it took more time
than expected for all the paperwork to get straight but last week RIO.v could finally make the
announcement:
VANCOUVER, BC: - Rio2 Limited (“Rio2” or “the Company”) (TSXV: RIO; OTCQX:
RIOFF; BVL: RIO) announces that it has entered into a binding agreement to sell a
package of Chilean royalty interests to Osisko Gold Royalties Ltd. (“Osisko”) for
aggregate consideration of US$5,000,000 (the “Royalty Sale”). The Royalty Sale
provides for the sale of Rio2’s 1.5% royalty on the Anocarire Project and its 1.25%
royalty on the Horizonte Project, both located in Chile.
Rio2 is currently in an administrative appeal process with the Chilean Government with
respect to the rejection of the Environmental Impact Assessment for the development
of its Fenix Gold Project, as previously outlined in a press release dated September 7,
2022.
Alex Black, President & CEO of Rio2 Limited, stated, “We are sincerely thankful to
Osisko Gold Royalties for their support during this time of challenging market
conditions. The monetization of these non-core royalty interests provides Rio2 with a
welcome boost to its balance sheet and working capital.”
The Royalty Sale is subject to customary conditions precedent and is expected to
close in the coming days.
That’s U$5m of cash injected into RIO.v at the right time and a weight off the minds of all
concerned (lawyers like getting paid). It’s a non-core royalty package that does not affect the
valuation or economics of Fenix in the slightest, and that’s good. It’s also a clear message to
the market that Rio2 can still attract A-listers with which to do business and after deals with
Wheaton and heads-up agreements for debt with BNPP, seeing the Osisko group move in is
another feather in the Rio2 cap, however distressed it might be in the near-term. As for how
long that cash on asking the company this weekend, I was told that it (along with a couple of
tax rebates due) should get them to the back end of 3q23 minimum, which may even be
enough to get through the appeals process. That’s a reasonable result and as such, I wouldn’t
want them to raise any more for the time being. No point in diluting the company for dilution’s
sake.
Political developments
There are positives to report in the political backdrop and while there’s nothing coming up that’s
directly related to Rio2 and Fenix, we’ve seen several indirect developments that all point in the
same direction, that of a Chile stepping back from the ideological knee-jerk we witnessed in the
first months of the Boric government and toward economic reality.
1) First, we know Chile’s mining industry has pushed back against the Boric government and
23
the way it has rejected or denied permits to a series of mining projects, including the big ticket
Anglo Amerian Los Bronces expansion project worth U$3Bn and of course, the permit denial for
Rio2’s Fenix project in July. Since then the SONAMI chamber of mining and several others have
made headlines with public criticisms of the SEA enviro people and the Ministry of the
Environment (and its Minister Maisa Rojas, a left wing academic and climate change activist).
To this end, this desk recently learned that at the start of this month a quasi-secret meeting
happened between the country’s Consejo Minero (Mining Council), a chamber with members
from every large private capitals mining company in the country, and the Ministry of the
Environment, the meeting headed by Minister Rojas and her Head of Environmental Evaluation,
one Sebastián Aylwin. At the meeting, the Mining Council reps made their complaints directly
and the Enviro people countered by say there was no “change in the rules” under the new
government, though the minister admitted that the change in directorate had brought some
changes that had tightened up the requisites for permitting.
Among other matters, the Mining Council’s biggest complaint was how projects that had been
granted approval at all stages of the permitting track were suddenly rejected at the end of the
process and while the Rio2 case was not mentioned directly, this was in direct allusion to what
had happened at Fenix and at Los Bronces. In reply, the Environment Minister said that social
and community matters were now more important, while the head of Environmental Evaluation
Aylwin said that his office was disposed to hear of any specific cases in which mining companies
thought they’d been hit with a sudden and last-minute U-turn on policy and had deviated from
standard procedures. The meeting closed cordially and further meetings between the two sides
were planned. All this is good for our cause as Rio2 at Fenix is one such case, in which the
company complied with all observations demanded of it by the local and regional environmental
departments and received green lights, right up to the moment its dossier landed in front of the
new head of national SEA recently appointed by Gabriel Boric, who decided Rio2 hadn’t done
enough to save the families of chinchillas. The meeting earlier this month has given the
company a direct line of communication with the relevant desk at the Environment
Ministry and I expect that, via the Mining Council, Rio2 will use it well.
2) Second, we’ve seen a new attitude toward important EIA permits in recent days.
The main event is the EIA permits awarded to the Arqueros project (16), which is
somewhat different to Fenix in that it’s an underground mine project in Coquimbo
province (as flagged on the map right) and not East of Copiapó in Atacama (e.g.
Fenix), but there are several points of reference:
It’s a private capitals project, in this case a Chilean national company
It’s a U$200m project, i.e. a similar size and is expected to generate 600 full-
time jobs
Arqueros also hit environmental permitting problems earlier in the year and
temporarily withdrew its application when the company was told it was lacking
in certain areas to get it DIA (EIA) permit. Since then the company worked
with the SEA enviro people to correct and upgrade data, to the point when last
week its application was approved unanimously.
As this “correct and improve” track is where Rio2 now finds itself, we now have a
concrete example of Chile willing to approve mining projects under the new
government after working on and improving original mining EIA submissions that it
decided were lacking.
4) Third, this very week has seen more evidence of a new attitude in Chile’0s
Ministry of the Environment. On Friday, the “Committee of Ministers” held its
sixth annual scheduled meeting. This is the committee that will hear the
appeals for permit rejection from Anglo American Los Bronces and then
afterward, Rio2 at Fenix and on this occasion, one of its agenda items was to
decide whether new complaints from the community around Los Bronces could be
allowed into the current appeals process (17).
24
In a nutshell, locals around Los Bronces are unhappy about the amount of road traffic
generated by the current mining operation (large trucks, etc) and wanted the current EIA,
dating from 2007, to be re-opened and re-considered. However, the Committee ruled against
the local community claims and for the mining company, stating there was no meaningful
difference between the original EIA stipulations and the way in which Anglo had gone about its
business in the last 15 years, i.e. they’d maintained their side of the bargain. While this isn’t the
main appeal on the permit denial for the Los Bronces expansion project, it is a clear indicator
that the Committee of Ministers will give a fair hearing to the mining companies and that’s a
good thing, what with the Anglo Bronces expansion permit appeal and then the Rio2 Fenix
permit appeal pending for their hearings in 2023.
Summing up these three political development and as stated at the top of the note, there’s
nothing directly related to Fenix but put together, the three developments point to a Chilean
government that’s feeling the weight of recession on its shoulders and understands it needs to
promote economic activity and investment. This is also a government that’s had its hard left
wings clipped by the referendum result and since then, has made a clear shift to the political
centre (it’s basically “Bachelet II” these days) and in a good signal for the rest of us, Gabriel
Boric is now getting all sorts of criticism from Chile’s left wing for “selling out”. While Boric and
his government is bound to bang the “must be environmentally responsible, else no permit”
drum hard, we know that Rio2 is eager to comply with requirements and with the Environment
Ministry now open to working with specific cases, the two-way communication will only help its
caused further as its appeals process moves forward.
The bottom line to Rio2 today: Our last extended note on the company ended with the
message “Don’t give up on Rio2” and that is underscored by developments since then. The
company has weathered the worst of the financial storm and has slimmed down to minimal
burn rate via lay-offs and suspension of development activities, now the recent U$5m cash
injection will be enough to see it through several quarters. Whether or not it will need more
cash before the permit resolution is unknown, though even it it does the amounts would be
modest compared to its balance sheet (and very small compared to the prize awaiting).
Meanwhile, not only has the macro-political tide turned in Chile and its new government has left
most of its hard Left ideology behind as reality hits, but Chile has improved its attitude toward
the mining sector.
Rio2’s share price remains firmly in the penalty box, however. I’m the first to admit we’re
unlikely see any big rebound and re-rate until the permit is granted for Fenix, but there has
been enough going on in the background to make a speculation in Rio2 at these levels
reasonably attractive. It’s not the first time I’ve floated the idea that even in its present state,
Rio2 is worth up to 25c for those willing to roll the dice on a result (that they’re increasingly
likely to get) and this weekend, I’m sticking with that number.
The potential to re-buy Goldshore Resources (GSHR.v) for another trade
To answer a mailer here, rather than in a direct reply. Would I play it way too cute and buy
back Goldshore Resources (GSHR.v) for a second trade? Yes, if the price goes low enough.
However, it’s not in the cards yet. I cannot help
but think GSHR has fallen between two stools
with its plan to put together its current 4m-and-
bits ounce gold resource as Moss Lake and
cannot see where it gets financing from for such
a project. The reason to like this was always its
potential to put together a big gold resource in a
great address that then sells to the highest
bidder, not to outline yet another medium-sized
deposit and pretend to move it forward without
attracting the attention of a major buyer that
25
needs more scale than this. GSGHR may have decided to change its project plans in light of the
adverse conditions for current juniors, but season change and can change again and if the
market moves and suddenly wants 10m oz of low grade in low risk jurisdiction, GSGHR at Moss
Lake will again find itself out of fashion.
Since my recent sale, GSHR has done nothing but drop and it’s hardly the first time we’ve seen
pop-then-drop from this highly promoted junior exploreco. So a revisit and a trade, yes but the
price would have to be a real bargain again, perhaps under 20c would get my attention.
New Gold (NGD) changes its CEO
Wednesday saw New Gold make changes at the top (18):
TORONTO, Nov. 23, 2022 /CNW/ - New Gold Inc. ("New Gold" or the "Company")
(TSX: NGD) (NYSE American: NGD) has appointed Patrick Godin as its new President
and Chief Executive Officer, effective immediately. Mr. Godin succeeds Renaud
Adams, who has served as CEO since September 2018.
Mr. Godin has been New Gold's Executive Vice President and Chief Operating Officer
since his appointment in May 2022. Mr. Godin has more than 30 years of technical and
operations experience in the mining industry, with a focus on mine development and
operations. Prior to his role with the Company, Mr. Godin worked in various executive
roles in the mining sector, including as President and Chief Executive Officer of
Stornoway Diamond Corporation. During his time at Stornoway, Mr. Godin was
responsible for the construction and operations of the Renard Diamond Mine,
Quebec's first diamond mine. Mr. Godin has also held roles as Vice President and
Chief Operating Officer of Pretium Resources Inc. and Vice President, Project
Development for G Mining Services, where he worked on the development of various
mining projects in the Americas and West Africa.
Mr. Godin has been appointed to the Board and Mr. Adams has stepped down as a
director of the Company, effective November 23, 2022.
"The Board of Directors is very pleased to promote Patrick into the Chief Executive
Officer role", stated Ian Pearce, Chair of the Board of New Gold. "The Board is
confident that Patrick's extensive technical experience, together with his leadership
skills and proven track record of delivering on production and costs, will best position
the Company for future success." Mr. Pearce also added "On behalf of our
shareholders and the Board, I want to thank Renaud Adams for his service and
contribution to the Company and for his ongoing assistance in ensuring a seamless
transition for Mr. Godin."
On some levels, it’s a surprise to see a person of Renaud Adams’ calibre “being resigned” like
this, but on the other hand he has been in charge through a period in which NGD has delivered
a string of disappointments. There was the ill-fated incursion into Harte Gold, the drop in
production at New Afton and last year, the production dip at Rainy River that wasn’t helped at
all by the messaging made a temporary problem sound serious at the time and caused the
share price to fall off a cliff. With a replacement that’s not at the same level as Adams now at
CEO (and with few KGC shares to his name) this can only mean the company is clearing the
decks for another bad production quarter in Q4 and a new broom moment for 2023. Not a
stock I’d hold into the New Year.
Conclusion
IKN706 is done, we end with bullet points:
Minera Alamos (MAI.v) is the reason we can still take this sector seriously. It’s a real
investment, not a flip and not a stock with which one person can earn some money
only by taking it from the pocket of another market participant. They may be thin on
the ground these days, but true wealth creation opportunities are still found in this
sector and this is a classic example, a stock that can make a lot of people a lot richer by
doing what it plans to do. With 3q22 demonstrating that even at this early stage and
with light production its Santana mine is a money-spinner, and a plan that will add
asset value and production ounces in a highly cost effective way, the sky is the limit for
this share price. Be on now and you too can find out what it feels like to own a true
success story in mining.
26
There’s no obvious green light for Rio2 yet, but things are looking better than they
were on the political side and with the company now carrying enough cash to go about
its appeals business, at some point the market will give this stock some credit than it
currently gets.
Looking to buy ORX at 4c this week. No need to pay up in Tax Loss Selling season.
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.calculatedriskblog.com/2022/11/schedule-for-week-of-november-27-2022.html
(2) https://goldprice.org/spot-gold.html
(3) https://www.reuters.com/markets/commodities/ghana-orders-mining-firms-sell-20-refined-gold-cbank-vice-president-
2022-11-25/
(4) https://www.newswire.ca/news-releases/western-copper-and-gold-announces-extension-of-rio-tinto-s-rights-
847157038.html
(5) https://sedar-filings-backup.thecse.com/00029807/2211220415182018.pdf
(6) https://www.redimin.cl/el-gigante-chileno-del-cobre-codelco-reducira-sus-ventas-a-china-el-proximo-ano/
(7) https://www.fastmarkets.com/insights/codelco-to-slash-copper-sales-to-china-by-50-amid-production-challenges-
sources-say
(8) https://www.reuters.com/markets/commodities/copper-output-chiles-codelco-fall-further-2023-newspaper-says-2022-
08-31/
(9) https://www.thenewswire.com/press-releases/1A0vFj84d-melkior-intersects-223-g-t-gold-eq-over-245m-in-gen-22-
01.html
(10) https://www.infieldminerals.com/news-articles/infield-minerals-announces-exploration-results-from-the-2022-
desperado-drilling-campaign
(11) https://www.bbc.com/news/world-latin-america-63771107
(12) https://venezuelanalysis.com/analysis/1027
(13) https://www.elespectador.com/ambiente/el-gobierno-de-petro-baraja-la-idea-de-crear-una-empresa-publica-de-
mineria-noticias-hoy/
(14) https://www.fuentesconfiables.com/post/renuncia-presidente-camara-minera-sergio-murillo
(15) https://www.rio2.com/post/rio2-sells-non-core-royalty-package-for-us-5-million
(16) https://www.reporteminero.cl/noticia/noticias/2022/11/coeva-aprobo-manera-unanime-proyecto-minero-arqueros
(17) https://www.elmostrador.cl/dia/2022/11/25/comite-de-ministros-rechaza-reclamaciones-contra-minera-los-bronces-
y-alto-maipo/
(18) https://www.newswire.ca/news-releases/new-gold-announces-the-appointment-of-patrick-godin-as-president-and-
ceo-825816089.html
27
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-Apr-21 C$0.19 -36.7% Failed spec trade, cut loss
Cartier Res ECR.v sep'21 C$0.32 21-Mar-21 C$0.235 -26.6% Failed spec trade, cut loss
Amarillo Gold AGC.v sep'21 C$0.31 30-May-21 C$0.30 -3.2% Capex story changed: Out
Excelsior Mining MIN.to oct'21 C$0.93 10-Mar-19 C$0.53 -43.0% May return in 2022
Royal Road Min. RYR.v nov'21 C$0.155 17-Mar-19 C$0.275 77.4% Closed on Nica pol risk
Aurelius Min. AUL.v dec'21 C$0.75 28-Jun-20 0.24 -68.0% cut end 2021, failed trade
Argonaut Gold AR.to dec'21 C$2.95 25-Jun-21 C$2.15 -27.1% cut on capex blowout
Stocks To Follow Closed Positions 2020
Closed in 2020 closed close price
TMAC Resources TMR.to Jan'20 C$3.41 20-Dec-19 C$3.61 5.9% TLS flip play, sold new year
Regulus Res REG.v Jan'20 C$1.10 20-Dec-19 C$1.30 18.2% TLS flip play, profit taken
Bonterra Res BTR.v Jan'20 C$1.90 9-Dec-19 C$1.66 -12.6% TLS flip play, loss taken
McEwen Mining MUX Jan'20 U$1.12 2-Dec-19 U$1.18 5.4% TLS flip play, profit taken
Core Gold CGLD.v Jan'20 C$0.255 7-Apr-19 C$0.305 19.6% arb trade, profit taken
HudBay Min HBM Jan'20 U$3.56 9-Dec-19 U$3.36 -5.6% TLS flip play, loss taken
Midas Gold MAX.to Feb'20 C$0.71 5-Jan-20 C$0.57 -19.7% sm & silly trade
Warrior Gold WAR.v Feb'20 C$0.08 3-Aug-18 C$0.05 -31.3% clean out non-perf sm stocks
Contact Gold C.v Feb'20 C$0.40 19-Aug-18 C$0.18 -55.0% clean out non-perf sm stocks
Sandstorm Gold SAND Feb'20 U$3.73 17-Apr-16 U$7.21 93.3% Sold during port rebalance
NexGen Energy NXE Feb'20 U$1.20 2-Dec-19 U$1.06 -11.7% TLS flip play, loss taken
MAG Silver MAG Apr'20 U$8.95 1-Mar-20 U$10.07 12.5% Sold to cut silver exposure
Alexco Res AXU Apr'20 U$1.69 7-Sep-17 U$1.69 0.0% sold to close Ag exp. in FY20
Bonterra Res BTR.v Jun'20 C$1.62 2-Feb-20 C$1.10 -32.1% under-performer cash moved
Regulus Res REG.v Jun'20 C$0.64 6-Apr-15 C$0.79 23.4% moved $ TMQ/MIN & Au stocks
Great Panther GPR.to Aug'20 C$0.60 21-Jun-20 C$1.10 83.3% Profit taken, good trade
Jaguar Mining JAG.v Aug'20 C$0.42 21-Jun-20 C$0.65 54.8% Profit taken, good trade
Sandstorm Gold SAND Aug'20 U$7.76 10-May-20 U$9.37 20.7% Profit taken, good trade
Integra Resources ITR.v Aug'20 C$2.23 13-Aug-18 C$5.40 142.2% Profit taken, good trade
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
28
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-Aug-18 C$0.05 -33.3% tiny trade, made room for new
B2Gold BTO.to feb'19 C$2.11 12-Sep-14 C$4.05 91.9% Took 1/2 profits, reduce size
Western Copper WRN.to mar'19 C$0.80 20-Jan-19 C$0.81 1.3% Spec trade that didn't work
B2Gold BTO.to mar'19 C$2.11 12-Sep-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-Jan-19 U$4.15 -8.1% Short that didn't work, sm loss
Zinc One Z.v jun'19 C$0.47 14-Sep-17 C$0.025 -94.7% clearing out dead trade
Amarillo Gold AGC.v jun'19 C$0.24 22-Aug-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-Apr-18 C$0.47 -67.8% Failed sm spec on Au. Moved on
Amerigo Res ARG.to nov'19 C$0.91 23-Sep-18 C$0.50 -45.1% worst trade of year, hefty loss
Guyana Goldfields GUY.to dec'19 C$0.94 14-Apr-19 C$0.56 -40.4% taking the loss, financials weak
Tethyan Res TETH.v dec'19 C$0.30 8-Sep-19 C$0.16 -46.7% tiny trade, word of probs in co
Stocks To Follow Closed Positions 2018
Closed in 2018 closed close price
Amarillo Gold AGC.v jan'18 C$0.38 24-Mar-17 C$0.31 -18.4% Cut away losing trade
Riverside Res RRI.v jan'18 C$0.39 27-Jun-16 C$0.31 -20.5% Cut away losing trade
Eros Res ERC.v jan'18 C$0.175 1-Mar-17 C$0.16 -8.6% CEO sudden exit, not good
Excellon Res EXN.to jan'18 C$1.54 9-Oct-16 C$1.66 7.8% 4q17 poor, one too many bad qtrs
Wesdome Gold WDO.to jan'18 C$1.68 15-Dec-17 C$2.06 22.6% Near-term trade block, took profit
Sabina G&S SBB.to apr'18 C$2.06 17-Dec-17 C$1.77 -14.1% Near-term trade, bad timing, small
B2Gold BTO.to May'18 C$2.11 12-Sep-14 C$3.67 73.9% sold 25% to reduce exposure
Lara Expl. LRA.v May'18 C$0.65 11-Feb-18 C$0.58 -13.8% Spec on Brazil didn't work
Solitario XPL June'18 U$0.72 19-Mar-17 U$0.41 -43.1% Failed trade, may return in 4q18
SolGold plc SOLG.to July'18 C$0.475 19-Nov-17 C$0.415 -12.6% cut, trade didn't perform
Pan American PAAS July'18 U$17.90 1-Jun-18 U$16.30 8.9% modest win on short position
NGEx Res NGQ.to Sep'18 C$1.01 22-Oct-17 C$1.00 -1.0% Closed to reduce Argentina exp
Sandstorm Gold SAND Oct'18 U$3.73 17-Apr-16 U$4.13 10.7% partial sale to raise cash for GTT
Aldebaran Res ALDE.v Nov'18 n/a n/a n/a n/a liquidate spin out of REG
Stocks To Follow Closed Positions 2017
Closed in 2017 closed close price
Continental Gold CNL.to Jan'17 C$2.68 22-May-16 C$4.17 55.6% trade closed, profit taken
Focus Ventures FCV.v Jan'17 C$0.23 1-Jul-12 C$0.05 -78.3% Give up, a disaster trade
Wesdome Gold WDO.to Feb'17 C$1.72 28-Aug-16 C$3.00 74.4% Target hit, sold, good trade
Belo Sun BSX.to Mar'17 C$0.90 30-Jan-17 C$0.90 0.0% failed near-term flip trade
Lara Expl. LRA.v Mar'17 C$1.15 8-Apr-12 C$1.05 -8.7% cut to make room for new trade
Rye Patch Gold RPM.v Apr'17 C$0.31 2-Sep-16 C$0.32 3.2% cut for doubts & new stock
Cordoba Min. CDB.v Jun'17 C$0.75 15-Sep-16 C$0.63 -16.0% closed
Constantine Metal CEM.v Aug'17 C$0.135 9-Apr-17 C$0.28 107.4% spec trade closed, good win
Red Eagle Min. R.to Sep'17 C$0.67 13-Dec-16 C$0.27 -59.7% IKN's biggest failure in years
Starcore Intl SAM.to Sep'17 C$0.61 10-Jan-15 C$0.31 -49.2% Patience ran out
B2Gold BTO.to Dec'17 C$2.11 12-Sep-14 C$3.39 60.7% sold small portion for liquidity
29
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-aug-15 C$0.25 38.9% okay trade, sold on pol risk
McEwen Mining MUX jan16 U$1.09 25-jan-15 U$1.20 10.1% sold due to lack of value
Lake Shore Gold LSG.to feb-16 C$1.10 07-apr-15 C$1.69 53.6% bot out, sold early in process
Atacama Pacific ATM.v feb-16 C$0.19 26-apr-15 C$0.40 110.5% sold for a double on big pop
New Gold NGD feb-16 U$2.06 24-jan-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-jan-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-apr-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-apr-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.
30