IKN #709Premium

The IKN Weekly
Week 709, December 18th 2022
Contents
This Week: In Today’s Edition, Happy Holidays to you all, Jerome Powell, Sam Bankman-Fried
and The Bezzle, Plain vanilla recession is back in fashion.
Fundamental Analysis: Two reasons why Orezone Gold Corp (ORE.to) hasn’t re-rated.
Stocks to Follow: Contango Ore (CTGO), AbraSilver (ABRA.v), Orefinders (ORX.v).
Copper Basket: Overview, Kutcho Copper (KC.v), Oroco Resources (OCO.v), Meridian Mining
(MNO.to).
Producer Basket: Overview, Franco-Nevada (FNV), Gold Fields (GFI).
TinyCaps Basket: Overview.
Regional Politics: A week of politics in Peru, Panama: Cobre Panama’s fight with the
government should blow over soon.
Market Watching: The weird Friday price action is actionable, B2Gold (BTG) reiterates its
4q22 blowout to come, Altaley Resources (ATLY.v): Still watching, not buying.
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 note scratches an itch. The progress made by Orezone Gold Corp
(ORE.to) is laudable and with its recent declaration of commercial production at
Bomboré, one would have expected its share price to have re-rated by now. Instead it
has remained stuck at a low range, despite the good news now piling up behind the
story. We take a look at the company, consider its potential weaknesses and come to a
conclusion or two.
 So much for the main fundies section, for what it’s worth I think the best work this
week is in the Market Watching section on Altaley (ATLY.v). Also, we mark your cards
on B2Gold (BTG) (BTO.to) as it has that sleeper look about it now.
 Regional Politics bores you with Peru again, plus we consider the news that the
government of Panama wants to shut down First Quantum’s (FM.to) Cobre Panamá
mine and explain why that’s being overblown by the media, too.
Happy Holidays to you all
As the next edition isn’t set to appear until the late hours of December 25th (Americas Time), I’ll
take a line to wish all readers a very Merry Christmas and may the peace of the Lord be with
you and your families during this special time of celebration.
We also remind readers that next weekend, IKN710 is planned as a “bare bones only” edition
as your author is going to be too busy with pan de jamón, hallaca, panetón, pernil and other
such delights to do much writing.
Jerome Powell, Sam Bankman-Fried and The Bezzle
To ring the changes, this week’s intro slightly off-topic but the sheer amount of money (or
perhaps lack of it) is enough to merit some comment in this markets oriented publication. More
importantly, there may be more stories of the same ilk to come. Your author has watched on
with the rest of you as the FTX/Sam Bankman-Fried/Bahamas Bananas drama has unfolded,
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with celebs and highly-paid spokespeople for FTX (who should have known better, Mr. O’Leary)
have been stung by association and seen their business and brand reputations tarnished as the
fraudulent activities of the central characters have come to light. This brief comment isn’t
directly about FTX or Mr Bankman-Fried (and by now he must have fried a few bank men) so if
you want the details find one of the ten thousand blow-by-blow commentaries out there, here
we’ll note in passing that the UK Financial Times reported that just before FTX went Chapter
11, its $900m of liquid assets were having problems covering the $9Bn in liabilities on its books,
that thanks to the person put in charge of the liquidation process we now know the private firm
owned by Bankman-Fried used to siphon cash from FTX, Alameda Research, had a secret
exemption from the FTX liquidation protocol that was supposed to automatically cover any
variations in its crypto values and that exemption turned the money flow into a de facto one
way street, and that Bankman-Fried and cohorts used the street to cover large losses in
Alameda in May and June this year, a decision that started the unravelling process and
something the now bankrupt and arrested head of the defunct companies now describes as a
“poor judgment call.” There are eight point one billion reasons to call that an understatement.
We could go on, but what interests this desk is the reason why Alameda started to suffer losses
in the first place. We know that in the post-pandemic period and up to April this year, just after
the Russian invasion of Ukraine, the financial world was awash with money and the Fed’s low
interest rate policy was driving the market (and inflation be damned), stoked among other
things the red-hot crypto market and created the monster that was Sam BF. Therefore, it’s no
sort of coincidence that the U-turn in Fed policy came just before Alameda got into trouble and
FTX decided to upgrade, from uber over-leverage into the outright criminal embezzlement of
other people’s money. Step forward John J. Ray, now CEO of FTX and in charge of the Chapter
11 process, as he testified to Congress early last week (1):
John J. Ray, the company’s new CEO and the panel’s sole witness, told lawmakers the
company had “no record-keeping whatsoever,” using bookkeeping software
QuickBooks to track its multibillion dollar portfolio.
“This is really just old fashioned embezzlement. This is just taking money from
customers and using it for your own purpose. Not sophisticated at all,” Ray said in
blistering testimony that lasted more than four hours. “Sophisticated, perhaps in the
way they are hiding something, frankly, right in front of their eyes. This is just plain old
embezzlement. Old school, old school.”
Which made this desk immediately think of one of the best books ever written on finance and
economics, JK Galbraith’s “The Great Crash 1929” and the word he coined in one of its most
famous passages, “Bezzle.” According to Galbraith, embezzlement is “the most interesting of
crimes” due to the temporary and positive wealth effect is has on the world of money and
finance, here’s an extract (2):
Alone among the various forms of larceny [embezzlement] has a time parameter.
Weeks, months or years may elapse between the commission of the crime and its
discovery. (This is a period, incidentally, when the embezzler has his gain and the man
who has been embezzled, oddly enough, feels no loss. There is a net increase in
psychic wealth.) At any given time there exists an inventory of undiscovered
embezzlement in—or more precisely not in—the country’s business and banks.
Galbraith then observed that undetected and underhand behaviour is more common in good
time than bad and when times are really good, the effects can magnify the sense of wealth in
any given financial community:
This inventory—it should perhaps be called the bezzle—amounts at any moment to
many millions of dollars. It also varies in size with the business cycle. In good times,
people are relaxed, trusting, and money is plentiful. But even though money is plentiful,
there are always many people who need more. Under these circumstances, the rate of
embezzlement grows, the rate of discovery falls off, and the bezzle increases rapidly.
In depression, all this is reversed. Money is watched with a narrow, suspicious eye.
The man who handles it is assumed to be dishonest until he proves himself otherwise.
Audits are penetrating and meticulous. Commercial morality is enormously improved.
The bezzle shrinks.
In other words, Sam Bankman-Fried could get away with his crimes while the market was hot
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and people thought they were making money alongside him. When the music stopped and Jay
Powell snatched the punchbowl away in April, he was left standing naked as the tide went out.
The FTX blowup has been a big one, what’s left to discover is whether there are others out
there of the same or perhaps even greater magnitude, more bezzle ready to be discovered as
the world moves into its seemingly inevitable recession period.
Plain vanilla recession is back in fashion
The market cheered the +7.1% CPI reading on Tuesday, then on Wednesday Jay Powell found
a way to curb their enthusiasm by projecting a longer time of higher rates in 2023 than
previously forecast. The result was a strangely flat market response that only turned negative
for the mining sector when China’s abrupt 180°
change in policy toward Covid-19 got people
nervous abut the 2m or so people now
condemned to die in overstuffed Chinese
hospitals. Or something like that (see The Copper
Basket for a little more). Gold sold off moderately
and went under U$1,800/oz, the Yield Curve
continued to be deeply inverted (right), but due to
the new forecasts of higher rates for longer
periods in The USA, the US Dollar managed to put
in a mini-rally and end the week all-but UNCH,
despite that better than expected drop in US
consumer inflation.
This is now the Fed’s preferred narrative, trying to dampen down market spirits by pointing to
an extended period of potential pain and, along the way, being frank about the likelihood of the
unemployment rate rising under its set policy to tame inflation. There’s also an “oh gee shucks”
level of naïveté being spun by The Fed in its public utterances, the line of “well we don’t want
to cause a recession but…” and then returning to the narrative of all future decision being
“driven by data.” Which is fair enough and you cannot blame Mr. Powell for trying to do his job
(he doesn’t want you to feel rich, after all there’s a
supply deficit out there) but ultimately, last week’s
narrative was just another variant on the same “We
really, REALLY are not joking” used in the weeks
beforehand and sooner or later, the market will react
in the same way it has done all through the Q4 rally.
So the Santa Rally may have been postponed by last
week’s carefully chosen Fed pitch, but expect it to
come back in the days ahead. Jay Powell’s guest
appearance as The Grinch will have but a temporary
effect and as a result, this desk predicts a weakening
USD and a return to the equities rally as we enter the
last two trading weeks of 2022.
Fundamental Analysis of Mining Stocks
Three reasons why Orezone (ORE.to) hasn’t re-rated yet (in USD unless stated)
And thus the native hue of resolution
Is sicklied o’er with the pale cast of thought;
And enterprises of great pith and moment,
With this regard, their currents turn awry,
And lose the name of action.
Hamlet Act 3; Sc1
It’s time to lay my cards on the table as regards Orezone Gold Corp (ORE.to). We last featured
the stock on these pages around a year and a half ago when closing a trade for a useful win in
June 2021. The decision to sell that day turned out to be a good one so, considering the main
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reason behind the sale wasn’t about its upside potential, I consider myself lucky. To recall the
reasons, we go back to IKN629 dated June 13th and the good old fashioned rant I had about
insider trading. Go read the whole thing for full context but, to cut a long story short, we’d just
seen ORE launch higher for no reason and on no news on a Monday, which was then followed
by a stellar looking drill assay NR on Tuesday. Added to the whispers picked up on that day of
“certain people” buying into ORE, we had a rather blatant case of company insiders helping
themselves, and their friends, to a quick flip profit on undisclosed news. Here’s an excerpt from
IKN629:
By all rights (and in any normal business sector), Orezone (ORE.v) would launch an
internal inquiry into last week’s obvious insider information trading, which would lead
to the names of the leaker(s) who is (are) then dismissed with cause. It would be
straightforward to achieve, all it takes is a company-wide meeting where the CEO
informs staff the company will go to the time and expense of tracking trade IDs of the
buyers Monday morning, in order to see if there were any unusual patterns or
unexpected names showing…and if anyone would like a chat in the next 24 hours,
they know the number. However, we know what will happen is nothing. The company
knows what happened is illegal, it also knows the regulatory authorities are toothless,
ineffective and lacking in any preventative authority so if they say nothing and you say
nothing and we say nothing, it will all quietly go away. Leave that attitude to stew for
a decade, which is exactly what Canada has done, and your reward is a stock market
nobody trusts, populated by increasing numbers of companies that didn’t float on the
market to raise capital, but to distribute it (to themselves, and oftentimes
immediately).
And sure enough, nothing did happen. Here’s another excerpt from the rant that day:
On Monday, Orezone (ORE.v) shares flew higher on no news, due to a prima facie
case of buying on inside information. When I addressed the company on the issue, its
responses were defensive, indignant and difficult to believe, as if seasoned
Vancouverites had never even imagined there were bad actors in the mining sector.
On the other hand, I was informed how my questioning was insulting to them (how
could I even imagine such a thing). It was tooth fairy level, a large red flag to add to
the numerical evidence already staring us in the face on Tuesday via ORE’s price chart.
Therefore Tuesday lunchtime, I sent out the Flash update (see Appendix 1), liquidated
my position in Orezone and took profits. I will not return to ORE.
And that was that. So call me a virtue-signalling snowflake if you want, but this case was
particularly disappointing for this desk due to the way Orezone the company had pushed its
transparent and stakeholder-friendly credentials until then. However, it doesn’t mean that ORE
dropped off my personal radar and since then, several things have changed:
 When we owned the stock ORE was a Dot V stock, since then Orezone has moved up the TSX
main board.
 The dirty insider-trading leaks seemed to have stopped.
 The company has built its Bomboré gold mine in Burkina Faso and, as of this month, declared
commercial production.
 The stock has failed to re-rate, even though its build-out and move into production has been
relatively smooth.
Those points are offered in ascending order of importance. It also means by inference that I
wouldn’t be against eating my own stuffy “I will not return to ORE” if there was an obvious
opportunity for a winning trade in the stock at any point (hey folks, this is capitalism) and that,
in essence, is why today’s note exists. We consider the above points:
 The move up to Dot Tee Oh is a good moment for the company but for us on the outside,
it’s one of those natural progressions you’d expect from a developer of a certain size market
cap. As for the insider-trading, we known the company stayed deathly quiet and made no
public comment about the obvious corrupt activity going on, but if evidence is our guide
internal controls have tightened as the tape hasn’t offered a second egregious example of
illegal or dubious trading patterns since then. That’s a good thing.
 Meanwhile and more importantly, the Bomboré construction period and mine commissioning
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has gone reasonably well. We know from the corporate literature that the build was “on time
and under budget”, but we also know that ORE has had delays with the main LNG power
generation plant construction. With those delays threatening the timeline and to get to
commercial production status by end Q4. ORE has turned to back-up diesel power
generation for the time being (though in its Q3 conference call claimed that “they would
always have needed to start by using diesel”.
 Which set the scene for December 1st and the company’s declaration of commercial
production and according to the company, this isn’t one of those “in name only” moves that
happens before the mine is truly profitable. The company stated that it had already hit
nameplate capacity in the first month of operations and if so, it means we should get a solid
month of profitable mining this December and a Bomboré that begins to deliver at its
expected early rates for all of 2023.
 However, this price chart speaks of a stock price that’s gone nowhere:
Under normal circumstances, a developer that moves into commercial production in a relatively
smooth way gets to benefit from a price re-rate as the risk of failure decreases and the positive
free cash flow begins but with ORE, as seen above, even the overt declaration of commercial
production has failed to see that effect. This weekend’s C$1.22 share price is at or around the
stock’s default level for the last couple of years and while there have been some obvious price
spikes along the way, if any traders of this stock managed to get out at over $1.50 in 2022 I
sincerely applaud your market prowess.
With the four points in place, the next thing to do is to ask why ORE hasn’t re-rated and identify
the causes of the apparent lag in share price appreciation because, if worries over ORE are
overblown or their effects merely temporary, there’s an obvious entry point at current prices
that would pay well as 2023 begins, tax loss selling effects die away and the company begins to
report strong production and gold sales from its new and profitable mine. After due
consideration, there are three issues that may be behind ORE’s failure to re-rate (so far):
Issue One: Treasury is tight
Issue Two: There may not be enough earnings upside
Issue Three: Political risk has increased sharply
We now consider them in turn.
Issue One: Treasury is tight and a look at the evolution of the company balance sheet via
the basic overview charts is enough, the basics provide enough for us today:
ORE.to: Assets
260
240 220
200
180
160
140
120
100
80
60
40 5
20
0
81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3
$m ORE.to: Liabilities per qtr
200
fixed 180 other current 160
cash 140
120
100
source: company filings 80
60
40
20
0
81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3
source: company filings
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LT liabs
current liabs

ORE has built its fixed asset and fully drawn on its debt facility (including the senior debt facility
which is now beginning to come due, plus a large portion of convertible debt at $1.08 that pays
8.5% interest for the next four years and will likely stay on the books as such), leaving cash
and liquid assets on the low side. We agree that the cash treasury chart (below left) does not
include saleable gold inventory, but the working capital chart (below right) does.
ORE.to: Cash treasury per qtr
65
60
55
50
45
40
35
30 25
20
15
10
5
0
As long as the money starts to roll in from gold sales, this current thin treasury position and
negative working capital should revert quickly enough (they should run at around 12koz to
15koz gold per month during the first stages and their higher grade feed), which brings the
previously mentioned power supply delays into focus. A delay of a couple of months may not
seem like much when there’s a decade-plus mine life ahead of you, but when your up-front
cash has been tailored to near exactly the amounts needed to get the mine over the finishing
line and into positive free cash flow, the potential for a final financing may cause share price
headwinds at this critical stage (and for more, ask holders of Wesdome Gold (WDO.to) about its
recent price action).
A look at the “Cash and Available Liquidity” section of the latest MD&A gives more details on
the current situation. The company first references its delay in power supply procurement,
traded that off against the recent move to official commercial production and gave a snapshot
of its liquidity position:
The aforementioned delays in the installation of a reliable power supply and the
resulting shortfall in gold sales in October 2022 further reduced the Company’s short-
term liquidity at the date of this MD&A. With full power expected imminently, the
Company forecasts a rapid ramp-up in process plant throughput and commensurate
increases in gold production and sales for the remainder of the year. As a result, the
Company estimates its cash holdings plus nearby gold sales will be sufficient to
meet its obligations as they come due without the need for additional financings.
At September 30, 2022, the Company had cash and available liquidity of $7.4M and
4,923 ounces of gold bullion in finished goods inventory. The senior debt facility with
Coris Bank International SA (“Coris Bank”) was fully drawn in August 2022.
I’ve highlighted the most important sentence, as ORE still believes it won’t need any extra
financial help to get into full flight production. However, the cash+gold inventory position (let’s
call it $15m rounded) isn’t much when you’re fully scaled-up mine costs half a million dollars a
day to keep running, that type of cash can disappear quickly.
Another clue to the tight cash position comes in these bullet points from the ND&A:
In October 2022, Coris Bank agreed to defer monthly cash interest payments totalling
XOF 2.1 billion ($3.2M) to December 15, 2022 to help ensure adequate working capital
during this extended commissioning period for Bomboré.
A significant portion of the Company’s trade payable balance at September 30, 2022
falls due in 2023. Payables with contractual payment terms that extend into 2023
include accruals made for the power plant, construction retentions, employee bonuses,
and mining contractor works totalling $16.5M.
That Coris Bank have agreed to defer its first payment is a good thing (and may mean they are
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81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3
source: company filings/IKN ests
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ORE.to: Working Capital per qtr
80
60
40
20
0
-20
-40
-60
81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3
source company filings/IKN ests
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amenable to another deferral in order to get ORE over the hump), but ORE wouldn’t have re-
negotiated this just for fun and if it’s in need of $3.2m in liquidity at this point, it shows the
tightness of the cash position as we head into 2023. The other line item is better news and
presumably, the cash will be flowing by the time those payments become due.
The bottom line to Issue One: There’s no way round it, despite the company’s claims in the
#q22 MD&A, ORE.to’s treasury position is tight. This would not have gone unnoticed by the
market and as a result, the shares may be under pressure from those waiting for the “final-top-
up financing”. Set against that theory, we now have the December 1st declaration of
commercial production and the company’s insistence it is already running at normal production
rates. However, full flow rates take some time to work through the mine flowsheet and into full-
sized sales, plus there’s the likelihood that ORE is seeing higher than expected early costs due
to the reliance on diesel back-up power generation instead of its modelled LNG.
That said, this probably isn’t a big issue for ORE. Another agreed deferral from Coris (with or
without a deal sweetener), a small bridge loan or a small equity raise would be enough to put
paid to all speculation even in the case where it needs more money. Even better, with the first
Coris payment due last Thursday any announcement to market on that payment happening
would also assuage doubts. But ultimately and assuming Bomboré works as a mine, this is a
temporary issue and while a factor at the moment, shouldn’t be enough to put anyone off
buying this stock in the near future.
Issue Two: There may not be enough earnings upside: It’s one thing to move into
production and expect the market to re-rate your stock, but if success has been baked into the
share price already, that ain’t necessarily so. In order to gauge the upcoming price performance
of ORE, we need to consider the type of production and sales numbers it’s capable of returning
in the next year or so and for that, we pout together a simple model that takes into account
ORE projections, but tempers the optimum scenario with plenty of bias towards safety via
conservative parameters and assumptions:
We model our assumptions on the 2023 calendar year. That gives ORE the current 4q22 period
as grace (even though it claims to be fully up and running), then assesses its performance on
what we might expect from its own inputs in the early years of production.
 Grade of 1 g/t feed for the first years of production. This is above the overall resource
and reserves grades, but may come in slightly under the grades for the first couple of
years while ORE is in payback mode.
 Recovery of 92%, as per the FS
 Throughput to pad of 15,000 tonnes per day over 350 days average per year
 TC/RC of 15%, we err to the conservative
We then apply those criteria to four different gold prices, as seen here:
ORE at Bomboré: Model Year Revenues (U$m)
Price Deck U$1.5k/oz Au U$1.7k/oz Au U$1.8k/oz Au U$2.0k/oz Au
Prod. gold (Oz) 155,305 155,305 155,305 155,305
U$/oz $1,500 $1,700 $1,800 $2,000
gold revenues 233.0 264.0 279.5 310.6
TC/RC 34.9 39.6 41.9 46.6
Sales revenue 198.0 224.4 237.6 264.0
Sources: ORE data, IKN calcs and estimates
Eventually, Bomboré should start trending down to its overall life of mine production schedule
and average production of around 10,000 oz per month (though by then we will have more
news on its sulphides expansion plans), but in its first “starter pit” years the grade should run at
over a gram with amenable metallurgy and kinetics, so the above 150k/year rate is certainly
achievable. From there it’s a question of what price they get for their gold and the costs
involved:
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ORE.to at Bomboré: Condensed Income statement model (U$m)
item U$1.5k/oz Au U$1.7k/oz Au U$1.8k/oz Au U$2.0k/oz Au
Sales (U$m) 198.0 224.4 237.6 264.0
COGS 105.0 105.0 105.0 105.0
Depreciation 15.0 15.0 15.0 15.0
SGA+R&D 20.0 20.0 20.0 20.0
NSR 9.9 11.2 11.9 13.2
Op income 48.1 73.2 85.7 110.8
Interest 8.0 8.0 8.0 8.0
Workers Part. 3.2 5.2 6.2 8.2
Tax 10.3 16.8 20.0 26.5
Net income 26.6 43.2 51.5 68.1
Shares out 350 350 350 350
EPS 0.08 0.12 0.15 0.19
Sust. Capex 2 2 2 2
FCF 0.12 0.17 0.19 0.24
Sources: ORE data, IKN calcs & estimates
While ORE uses a $15.60/tonne operating costs estimate, our case assume a higher than
estimated U$20/tonne COGS for the mine in its
early years, taking into account the extra ORE.to: Shares Out
expense of the current power supply and
general cost and labour inflation, as well as
erring to the side of caution (of course). We
then make reasonable guesstimates for the
other line items as seen (feel free to take issue
with any of them, I’m trying to be cautious with
each one) and also assume the 10.5m warrants
due to expire early next year at 80c all become
fully paid up shares, then we round to 350m
S/O just in case.
With that done, the model then gives target prices for a range of gold prices and Price/Earnings
(PE) multiples in Canadian Dollars at the standard house forex (CAD$1 = U$0.80). This table
also includes upsides to each price target as per this weekend’s C$1.22:
ORE.to PE target spreads (using two gold prices)
Gold upside
price U$1,700/oz upside% U$1,800/oz %
PE 10x $1.50 23% C$1.79 47%
PE 12x $1.80 48% C$2.15 76%
PE14x $2.10 72% C$2.51 106%
PE 16x $2.40 97% C$2.87 135%
source: IKN calcs, ORE data
For the record, the FS model used by ORE calculates a Net Project Value of $733m at
U$1,750/oz gold, which at the 245m share dilution used above comes to a per-share target of
C$2.55. That would put the 14X and 16X P/E multiple range in-line with overall project
economics and indeed, 16X is what Tier 2 mining companies can demand from the market on
the whole these days. However and as you see below, your author prefers a lower PE multiple
in this case:
8
83.312 51.152 51.152 26.252 56.252
39.223 35.323 35.323 9.323 41.523 233 27.333
37.333
443
400
350
300
250
200
150
100
50
0
91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 tse22q4 tse32q1
source: company filings/IKN ests
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Sales and earnings Target price & valuation data for ORE.to based on
Year 1.5kAu 1.7kAu 1.8kAu 2.0kAu Bombore year 1-3 production and U$1,700/oz gold
Sales (U$m) 198 224 238 264 12-month target $1.80 based on 12x EPS
Sales growth 13% 6% 11% Upside to target 48%
EPS 0.08 0.12 0.15 0.19 Mkt cap (CAD$m) $427 Enterprise value $414
FCF 0.12 0.17 0.19 0.24 P/sales (1.5kAu) 1.90 EV/sales (1.5kAu) 1.84
P/E (1.5kAu) 16.1 EV/EBITDA (1.5kAu) 6.6
P/E (1.7kAu) 9.9 EV/EBITDA (1.7kAu) 4.7
P/E (1.8kAu) 8.3 EV/EBITDA (1.8kAu) 4.1
You are welcome to disagree with my choice of a more conservatively pitched U$1,700/oz gold,
of course. Indeed, the 74% upside offered by the same models and U$1,800/oz gold turns a
moderate potential return into a good one. Meanwhile, ORE has done a great job in delivering
its mine on time and under budget and according to its most recent declarations, production
numbers will hit the ground running. As a result and even as we err to the side of caution, our
model shows the company will soon throw off plenty of free cash flow, more than enough to
impress the market on a quarterly basis and ample amounts to cover its near-term and mid-
term liquidity and debt servicing obligations.
Even so and after due consideration, in the considered opinion of this desk today’s ORE won’t
be able to demand a multiple on par with its peers and the market average. While others trade
at 16X or even above, we should expect the market to award a lower multiple to earnings.
That’s not because of its current cash squeeze or its financial and earnings potential, instead it’s
due to the final issue faced by ORE.to in 2022.
Issue Three: Political risk has increased sharply
I am not a conflict analyst and I will never try to pass myself off as one. That said, the
investigations and eventual report on the current state of ORE.to as a potential investment
must include some background on the political and social unrest in the country, as well as the
ongoing armed conflict and what it all might mean for this company. The following is a brief
history of Burkina Faso in 2022, along with examples of the conflict moments and their
consequences, ending with my personal thoughts on the matter and why this issue puts me off
ORE.to as a long-term investment.
It has been politically interesting year there, as per the expression “may you live in interesting
times”, the fun starting in January with a military coup when President Roch Marc Christian
Kaboré, in power since 2015 was deposed in a military coup headed by Paul-Henri Damiba, who
then became the new (interim) President. The coup had popular support in Burkina Faso and
the streets of the capital, Ouagadougou, due to Kaboré inability to suppress the armed
insurgency of Islamic rebels in the Northern regions of the country, entering from Mali.
However, Damiba only held onto the job for less than nine months as on September 30th he in
turn was deposed in a new coup by another military figure, the 34-year old army captain
Ibrahim Traore, who was confirmed as (interim) President in October in a term of office set to
conclude in 2024. The second coup happened ostensibly for the same reasons as the first, with
Damiba unable to control the rise in attacks from Islamic insurgents from the North that had by
then spread to the East and West zones of the country (3).
Instead of improving under Damiba, the situation had slowly become worse and army morale
was being sapped by a series of losses. The trigger for the second coup came just days before
the event when an ambush on a Burkina military convoy left 27 soldiers and 10 civilians dead
and over 50 civilians wounded. Traore’s move received popular support in the capital and
Damiba was put under house arrest, eventually negotiating his ticket out of the country and
exile. New President Traore is now the world’s youngest Head of State and his job is to stop the
9

advance of Al-Qaeda and Islamic State rebels looking to take over the entire country. At his
investiture in October, he made no bones about the task at hand (4):
After taking the oath, Traore, dressed in military fatigues and a scarf with the country’s
national colours, said: “We are confronted with a security and humanitarian crisis
without precedent.
“Our aims are none other than the reconquest of territory occupied by these hordes of
terrorists,” he added. “Burkina’s existence is in danger”.
However, the arrival of Traore has not stopped the attacks and insurgency. For example and
just after his successful coup, an attack on a military base in the northern town of Djibo on
October 3rd saw 10 soldiers killed and 50 wounded, then on October 8th 13 soldiers were killed
in an ambush in the East of the country (5), two examples of the type of guerrilla engagement
that has continued to affect the Burkina Faso army under its new leader.
We cut to early November, when VOA reported on a speech by the new Defence Minister which
spelled out the same “do or die” situation to his countrymen and women (6):
Ouagadougou, Burkina Faso —
Burkina Faso's defense minister on Tuesday declared the country was fighting for
"survival" in its seven-year-old battle with jihadists as he urged the public to throw
themselves into the campaign.
"If, for a long time, the fight against terrorism has been seen as a combat pertaining
only to the defense and security forces, it is time to change that view and strengthen
the effectiveness of public support for the fighting forces," Defense Minister Kassoum
Coulibaly said.
"Every citizen should be aware that this is essentially a war in which our common
destiny is at stake, meaning the survival of our nation," Coulibaly said at ceremonies to
mark the armed forces' 62nd anniversary.
He called on citizens "to commit themselves" to fighting "armed terrorist groups."
His fears were also well-founded as in late November (i.e. three weeks ago) we saw more
ambushes and more killings of soldiers (7):
4 Burkina Troops, 3 Civilians Killed in Jihadist-hit North
The troops were killed on Friday when an improvised explosive device went off as an
army escort drove along the Bourzanga-Kongoussi road, the army said in a statement,
adding that one person was also wounded.
The troops were returning after having escorted an aid convoy into the town of Djibo, a
security source told Agence France-Presse.
The backdrop to this worsening security situation is one of food poverty and potential starvation
for a large group in the major conflict zone, which spans South-Western Mali, Niger and North
Burkina Faso. Here’s a bang up-to-date news report on the 25,000 people under threat, with
20,000 of those in Burkina Faso (8):
UN: Thousands in West, Central Africa Could Face Starvation
A United Nations official has warned that more than 25,000 people could face
starvation in conflict-plagued parts of West Africa next year
Doehnert said nearly 80% of people facing catastrophic hunger - some 20,000 - are in
Burkina Faso's Sahel region, where jihadis linked to al-Qaida and the Islamic State
group have besieged cities and cut off assistance. Residents of the city of Djibo have
been blockaded for months, unable to access their farms.
An example of the cruel tactics used by these insurgent groups. According to neutral observers,
the rebel groups now control up to 40% of the Burkina Faso landmass and while most of that is
the harsh desert areas of the North, there are enough people in the zones and local towns to
make a difference. With the starvation of the local civilian population now part of the insurgent
playbook, President Traore’s military does not have the luxury of raising a defence line and
simply holding on to the “safe areas” of the country, they are forced to go into the disputed
areas in order to get emergency supplies and humanitarian relief to the citizens. Those convoys
are then attacked by the scumbags who want to take over (all apparently in the name of a
loving God, if you ask them). However and to Traore’s credit, the country’s armed forces are
10

reportedly fighting back and have scored some recent successes against the enemy, as seen in
this report also from this week (9)
A single soldier and 39 suspected jihadists died in a 10-day security operation in
volatile northwestern Burkina Faso, the army said on Friday.
The sweep completed last Saturday was planned to restore security to Banwa province
near the Mali border, an area which has been wracked by violence.
“Offensive land operations combined with air strikes and artillery brought major tactical
results,” an army statement said.
“Terrorist bases” had been dismantled and their occupants “put out of action.”
The statement listed “at least 15 terrorists killed” on December 2 at Bolomakote in
Bondokuy department and a military ambush on December 7 in which 24 suspects
were killed near Ouarkoye.
“Unfortunately one soldier lost his life at the very start of the operation. We also
registered a dozen soldiers wounded,” the army said.
One of the world’s poorest countries, Burkina has been battling a jihadist insurgency
since 2015.
Thousands of civilians and members of the security forces have died and around two
million people have been displaced.
If that type of success continues, then new President Traore will strengthen his hold and more
importantly, the zones closer to (and including) the capital will not come under threat. That
includes the Orezone mine of course, just 90 minutes’ drive from Ouagadougou and currently
not in one of the hot conflict zones. However, and this must be said, the security situation in
Burkina Faso has certainly deteriorated through 2022 and after doing the necessary basic DD
required this week to catch up on the political risk situation I last monitored in early and mid-
2021 while researching this report, the contrast between then and now became stark. And most
recently there has been a final political wrinkle added, as a diplomatic row has broken out
between Burkina Faso and its Southern neighbour, Ghana, when the Ghanese accused Burkina
Faso’s President of hiring the Russian Wagner Group for military operations against the
Jihandist terrorists in the North and West of the country. There have been persistent rumours
of the Russian private army squadrons from the Wagner Group operating in the zone all year ,
but even though President Traore denied their presence, ground level reports point to plenty of
evidence (10), including a story that Burkina Faso is paying for the troops by giving them one of
their privately run gold mines. While one can argue that “my enemy’s enemy is my friend” and
as long as Wagner operatives are killing Al Qaeda
in Mali or Burkina Faso rather than Ukrainians in
Donesk it can’t be all bad, but the political
consequences of opening the door to Russian aid
(or any type) are not easy to assess these days.
Wrapping up this extended section on a subject
that I’ve had to bone up on in the last few days (I
claim no expertise), this link (11) goes to the
website where this map comes from, an excellent
source for information and independent analysis
on the West Africa zone and one I’ve bookmarked
for further use. The map shows where recent
skirmishes, attacks or ambushes have been
reported with either the Al-Qaeda or Islamic State
jihadists and offer a neat visual insight into what
parts of the country are currently safe and what
parts are riskier (or riskiest).
Discussion and conclusion
Of the issues faced by Orezone Gold (ORE.to) at present its geographical location is the
thorniest and the one that most deters me from going back into the stock with the mindset of a
long-term investment.
It’s the one subject that the company glosses over. ORE has a range of stock answers on the
subject that revolve around “Our region is safe” and “the conflict zones are far from our mine”
11

type answers, which are of course true but don’t ally the latent threat of the growing
insurgency in the country. It quite normal for a mining company not to want to talk about
political matters out of its control and Burkina Faso’s deteriorating political backdrop is not
going to be its favourite subject, but the way in which both the company and its supporters (it
has a veritable online army of fans these days, I have noted) either studiously ignore the
issues, brush it off as “somebody else’s problem” or even mock those who decide to broach the
subject.
Here’s the baseline fact: Even in the best of circumstances, that means “zero attacks and zero
problems to Bomboré in the years to come”, Orezone’s operations will remain under latent
threat from armed conflict for the foreseeable future. The company’s stock “there’s no trouble
around us” answer will only get them so far and even in our best-case situation, there will
always be the potential for catastrophic loss at any given moment if the government forces are
overrun and the Jihadists make good on their ultimate aim to take over the country and turn it
into a new Islamic State. Call that unlikely, possible or even probable, but the threat will remain
and it’s one that won’t come gradually, so the “no problems here” answers from company and
fans alike only go so far. It is this risk that must be factored into the overall price target for this
company, because it’s bound to give second thoughts larger money interested in longer-term
wealth generating positions in mining companies. If all goes well and the status quo remains
(or even gets brighter to the North of the mine), the latent threat will never materialize and
ORE can go about doing its job, mining gold and making plenty of money. But the way in which
jihadists have managed to cause enough problems for the country’s own military to topple its
President not once but twice in 2022 cannot go without recognition. With those people now
threatening to use siege strategies to starve out a significant region of the country, there’s no
guarantee that the current President and military-backed government will do any better than
those before (Wagner Group or no Wagner Group).
However, the prospect of a long-term ceiling on the stock price does not preclude the potential
of a near-term win in the stock. If, as we suppose, Orezone impresses the market when it
announces its 4q22 production and guides in good fashion for 2023, the market won’t be
worrying too much about the debt load or long-term political risk. With the convergence of
factors coming to the company in early 2023, it has the potential to spike higher in the way
we’ve seen in several other occasions. As such, the current C$1.22 entry point looks like solid
value for a near-term risk/reward trade for those so inclined and as long as the trade is limited
in time, you’d be extremely unlucky to be caught in the type of catastrophic loss potential that
looks set to limit the long-term upside for the stock. A stock to own and trade over short period
of time, rather than own and invest in for a longer period.
Stocks to Follow
The week was negative, the headcount was negative and the back pocket got hit hard, too.
There were eleven week-over-week losers (MAI.v, ARG.to, WRN.to, QCCU.v, ABREA.v, RIO.v,
CKG.v, PA.v, ATC.v, CTGO, XYZ.v) and those losers included all six of the substantial positions,
including a particularly nasty drop in the brand new position taken in AbraSilver (ABRA.v) that
caught me completely unawares. There was one other double figure percentage loser in
Palamina (PA.v down 11.8%, i.e. a penny) and while Amerigo (ARG.to down 8.6%) was also
down by a larger amount, that one has rallied well recently and profit-takers are allowed to take
profits. Meanwhile, there were only three winners (NCAU.v, ORX.v, ALDE.v) and of those, the
half cent added by Orefinders made its percentage gain looked good (ORX.v up 12.5%).
Rounding up the headcount, four remained unchanged on the week (APN.v, PGM.v, MIRL.cse,
MENE.v).
With the addition of AbraSilver (ABRA.v) there are a total of 18 stocks in all categories of our
12

list at present, with six of the lines in green and one unchanged since inception. That leaves
eleven in the red, something to fix in 2023.
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$0.41 95.2% $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$2.38 17.8% New trade, watched for months
QC Copper&Gold QCCU.v BUY C$0.275 25-Apr-21 C$0.135 -50.9% Now drilling. Easy hold
Abrasilver Res. ABRA.v BUY C$0.38 4-Dec-22 C$0.305 -19.7% New trade, started weak
Rio2 Ltd. RIO.v HOLD C$0.83 22-Apr-18 C$0.19 -77.1% Cheap on permit probs, appeal
SPECULATIVE TRADES
Newcore Gold NCAU.v BUY C$0.20 23-Oct-22 C$0.225 12.5% Near-term spec trade
Orefinders ORX.v.v SPEC BUY 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$1.97 -35.8% Au leverage, small trade so far
Aldebaran Res. ALDE.v BUY C$0.72 16-May-21 C$0.85 18.1% trying patience
Palamina Corp PA.v SPEC BUY C$0.295 21-Nov-21 C$0.075 -74.6% Au expl in S.Peru
Altiplano Metals APN.v HOLD C$0.31 17-Sep-21 C$0.145 -53.2% 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$0.06 -69.2% run into ground by CEO
A WATCHLIST OF POTENTIAL TRADES. NB: I DO NOT OWN
ATAC Res ATC.v WATCH C$0.095 11-Sep-22 C$0.08 -15.8% Cheap Yukon neighbour play
Contango Ore CTGO WATCH U$23.25 2-Dec-22 U$23.04 -0.9% Dropping from watch list
Anacortes Mining XYZ.v WATCH C$0.49 22-Jul-22 C$0.405 -17.3% potential gold exploreco trade
LONG-TERM NON-MINING HOLD
Mene Inc. MENE.v adding C$0.66 6-Dec-20 C$0.445 -32.6% 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
Now for notes on some of the covered companies but not many this weekend, it was a weird
week of trading and news was beaten by market forces.
Contango Ore (CTGO): A couple of corrections required to last week’s note on CTGO that
began our Watch list coverage of the stock. Neither are deal killers, both require comment:
 The AISC quoted last week is for the Kinross 70%, whereas the Peak Gold LLC AISC will
be slightly higher, currently estimated by the company to be U$1,100/oz. That’s the
downside, the upside is that Kinross is now paying for the entirety of the trucking fleet
and CTGO doesn’t need that upfront cash. As the estimated budget for that line item
was $30m that means CTGO has $9m less to raise for its end of the capex and may be
13

able to fund its part for as little as $50m, all told. In other words, for the benefit of
lower front-end capex hurdle CTGO will pay a slightly higher operating cost than first
envisaged.
 Rather than 50km from the Fort Knox mine, Manh Choh is in fact around 300km
distance. That’s part of the mine plan and project economics of course and not
something that will change the numbers per se, but it may make a difference to the
waste/ore decisions as the mine matures and the JV contemplates whether the truck
lower grading Manh Choh ore for processing.
AbraSilver Resource Corp. (ABRA.v): I did not expect this:
ABRA did 3m shares volume on Friday, including over 2m shares in the last half hour of trading
and as it turns out, the culprit was the negative re-balancing of ABRA in the SILJ ETF (see
Maerket Watching for more). That fund’s holding of ABRA dropped by 2.8m shares and while
that’s only a small part of the total amount of shares out, the pressure formed by that amount
in a brief time period explains why ABRA shares ignored yet another strong drill NR out of the
JAC /South West zone of Oculto (12).
The only reason for the dumpage selling and the final drop on Friday was the market for
shares, it has nothing to do with the impressive project or its improving economics. My only
regret is buying when I did at 38c, but even that price was a real bargain compared to the
potential on offer. If you’re looking for a bargain silver stock, look no further.
Orefinders (ORX.v): I topped up at 4c thanks to a seller (or sellers) that appeared on
Wednesday. ORX finished half a penny higher than that on Friday, probably egged on by the
NR out of large holding Mistango River (MIS.cse), which is now drilling its flagship project and
saw a good hole come from a neighbour on strike, too. I’m not sure how useful this table is and
it’s not something that will appear every weekend, but the move in MIS on Friday added nearly
$750k to the theoretical liquid asset value of ORX of $7.7m total last weekend is now $8.34m
ORX.v: Marketable Secs, Investments in Assocs, Cash
ticker shares owned(m) PPS value
AE.v 5.20 0.155 0.81
QCCU.v 5.06 0.135 0.68
subtotal 1.49
MIS.cse 24.71 0.075 1.85
subtotal 3.34
Est cash 5.00
Total C$8.34
14

The Copper Basket
After fifty weeks of 2022, The Copper Basket shows a loss of 46.03% to level stakes:
company ticker price 1/1/22 Shares out Market Cap current pps gain/loss%
1 Copper Mtn CMMC.to 3.42 210.166 380.40 1.81 -47.1%
2 Western Copper WRN.to 2.00 151.597 360.80 2.38 19.0%
3 Marimaca Cop MARI.to 3.77 88.118 275.81 3.13 -17.0%
4 Oroco Res OCO.v 2.04 207.033 188.40 0.91 -55.4%
5 Nevada Copper NCU.to 0.71 658.638 184.42 0.28 -60.6%
6 Aldebaran Res. ALDE.v 0.84 138.579 117.79 0.85 1.2%
7 Hot Chili HCH.v 1.53 109.223 87.38 0.80 -47.7%
8 Regulus Res. REG.v 1.06 101.85 76.39 0.75 -29.2%
9 Meridian Min MNO.to 1.18 153.735 53.04 0.345 -70.8%
10 C3 Metals CCCM.v 0.16 645.379 35.50 0.055 -65.6%
11 Doré Copper DCMC.v 0.79 84.1 31.96 0.38 -51.9%
12 Kutcho Copper KC.v 0.88 103.94 19.75 0.19 -78.4%
13 QC Copper QCCU.v 0.34 129.06 17.42 0.135 -60.3%
14 Element 29 Res ECU.v 0.58 79.24 14.26 0.18 -69.0%
15 Coast Copper COCO.v 0.13 41.335 2.27 0.055 -57.7%
NB: All stocks in CAD$ Portfolio avg -46.03%
Unlike the pounding taken by junior PM stocks, the Copper Basket lost just 0.17% on the week
thanks to a reasonable balance of six winners
The Copper Basket 2022, weekly evolution
(CMMC.to, OCO.v, MARI.to, REG.v, ALDE.v, 10%
COCO.v) against the eight losers (WRN.to, 0%
MNO.to, HCH.v, CCCM.v, KC.v, DCMC.v, ECU.v, -10%
QCCU.v), with just one unchanged stock on the -20%
week (NCU.to). There were three double figure -30%
losers in C3Metals (CCCM.v down 21.4%), -40%
Meridian (MNO.to down 13.8%) and Kutcho
-50%
(KC.v down 13.6%). So not a great week but
-60%
nobody’s idea of a disaster, either. Also, it’s not
much of a comfort for those of you that only
followed me into QC Copper & Gold (down 60%
on the year) but the only two blobs of green ink on the above table are companies which I
personally own and recommend as copper long trades. So there is that.
Moving to copper the metal, this
time last weekend I was hoping that
the March’23 contract could get
through the CPI and then the FOMC
with its U$3.80/lb line intact. In the
end, it almost got there and
managed to navigate both Tuesday
and Wednesday above that line, only
to be dinked under at the end of the
week for a different reason:
While Jay Powell’s Gang and
declarations made due headlines, it
took another round of ChinaFears! to
get the copper price to break our
new line in the sand (13):
Three-month copper on the London Metal Exchange slipped 0.3% to $8,272 a tonne
15
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 ht4ced ht11 ht81
source: IKN calcs

by 1130 GMT, after touching its highest in more than five months at $8,600 on
Monday.
It has declined 3.4% so far this week.
“China’s COVID problems are still a headwind for industrial metals prices,” said
Edward Gardner, commodities economist at Capital Economics.
“Although we’ve seen restrictions ease, our China economics team is making the point
that the near-term outlook for China’s activity is pretty bleak.”
So for those of you following at home:
 Economists were worried about China GDP growth due to the harsh Covid Zero policy
and related lockdowns
 Economists are now worried about China GDP growth due to the end of the harsh Covid
Zero policy and the prospect of no further lockdowns
Too simplistic? Yes of course, we are facing a 180° turn in Chinese policy so sudden that even
has psychologists concerned about the effect it may have on the wider population, no matter
whether they get Covid in the weeks to come or witness the death of an elderly relative. The
talk is of PTSD brought on by two and a half years of rolling lockdowns and stringent controls,
but without a national vaccination effort that would mitigate the current spike in cases now
threatening to overrun hospitals. This desk isn’t going too far down the “statistical models” path
(lies, damned lies and statistics, etc) but predictions of between 1m and 2m deaths from Covid
now, a full year after the worst of the pandemic in the rest of the world, is bound to have a
chilling effect on China’s economy. We mining investors saw the delayed effects of Covid on
Western Australia in early 2022 and how it affected logistics in manifold ways.
However and despite the dire warnings, copper found buyers on Friday and we’re still a long
way above the recent U$3.60/lb line, which was in turn considered a distinct improvement
when it managed to hold through November. So it’s back to the default battle, near-term
demand slackness over recession worries, versus the well-documented long-term supply deficit
forecast by all and sundry and now expected to kick in next year, instead of 2024 and beyond
(so says Goldman Sachs, at least). As for seasonality, end December normally brings the climax
to Chinese factory supply re-stocking and the market lull that follows, as the Chinese New Year
comes into view, normally brings lower price volatility with it.
We now move to our regular weekly update on the world copper inventory scene, data from
Chile’s Cochilco:
 The overall inventory aggregate of the world’s three official systems dropped by 14,770
metric tonnes (mt) last week, closing at 179,980mt. The further away we get from the
key 200kmt line, the more nervous bears will become.
 For the second week running, the big changes happened at the Shanghai SHFE, with
stocks dropping 14,505mt and giving up all their gains of the week before to close the
week ay 64,041mt. As the charts below show, that’s still historically tight but there
seems to be enough supply to satisfy near-term demand now.
 A tiny change to the overall number at the LME, inventories down 200mt to close at
84,100mt. However the regional breakdown of stocks shows that LME Asia is almost
out of stock entirely, with just
4,950mt available in South Korea,
LME: Cu tonnage under cancelled warrant
Malaysia, Singapore and Taiwan
combined. In fact, 67,200mt of the
84.1kmt total is currently sitting in
warehouses in Europe, far from the major world user of the metal. In other news, I’m not sure whether
I’m going to continue with the
close scrutiny of the cancelled
warrants data into 2023, but I will
16
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 52891 00862 52691
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 ht4ced ht11 ht81
mt Cu
source: Cochilco

finish up the year showing this regular chart and this week, the tonnage due to ship out
dropped to 19,625mt. continued to rise and finished the week at 26,800mt, which is a
bullish signal for prices.
 Comex copper inventories dropped by 65mt, closing at 31,839mt. No biggie.
The dedicated SHFE charts see stocks sliding to the end of the year at low levels, but at some
time before the end of January the natural demand cycle should see stocks in SHFE warehouses
finally replenish.
SHFE copper inventory levels, 2018 to 2022
400000
350000
300000
250000
200000
150000
100000
50000
0
17
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 ht4ced
Mt Cu
|
source: Cochilco
Now for a few notes on some basket component stocks:
Kutcho Copper (KC.v): KC published a new corporate presentation on Friday (14) and
reminded this desk why it’s never been an attractive investment option. Yes, the project
economics work on the spreadsheet and yes, the location is good, but the overall size doesn’t
merit the capex the real reason to like this project is for its potential resource expansion via
drilling. If they can grow the resource and make the overall target attractive to mid-sized
copper producers there may be something but as stands, it falls between the cracks due to its
modest size.
Oroco Resources (OCO.v): On the recommendation of A. Reader, I spent an hour or so
watching this OCO video presentation (15) in which Adam Smith, officially titled “Vice President
Business Development and Corporate Finance” and unofficially one of the mainstays of the
company who knows more about Santo Tomas than practically anyone (he’s been at the
company for 16 years) walked the presenter through its latest corporate presentation. I came
away with three main takeaways:
 The resource update (MRE) is due delivered by the end of 1q23
 The PEA (using Ausenco and SRK) is due end 2q23
 As noted in previous issues, they are doing “serious work” and I expect it to be one of
the more complete versions of a PEA (they can come with bad reputations, as you are
surely aware).

But no matter what the quality of the PEA might be and whether it’s delivered on-time (the
language used, “target completion date Q2 2023”, left the impression it could leak into 3q23),
there’s no getting round the fact that projects of this type rarely find buyers before the PFS
stage. That’s a legacy problem at OCO, as while other copper explorecos are open and clear
about this in their literature, OCO’s history includes
being pumped to less sophisticated market
participants over the last two or three years with
promises of it being bought out at any moment. That
being so, its shareholder community is likely to see
the upcoming PEA as the end of a process, rather
than the means to its eventual end.
At its current 91c I consider OCO to be slightly
undervalued, but there’s not enough of a difference
to interest me in a trade, even a near-term flip.
Meridian Mining (MNO.to): This is what Tax Loss
Selling looks like (right). We sit MNO next to the
Copper Producer ETF (COPX), note the moment its disappointing Maiden Resource Estimate
from Cabaçal was released (16). Our comments were in IKN698 and on considering these initial
numbers…
…using a 0.3 g/t gold cut-off, we already knew the writing was on the wall. This from IKN698:
“…this is a small overall resource and it’s also notable that for what was originally a
copper project with a gold kicker, it now gets the majority of theoretical payable
revenue from gold. Without the discovery and development of the discrete gold
veining that lays above the main VMS zone, this wouldn’t have worked and while this
desk is the first to agree with the company that this MRE is very early days at the
larger and target-rich Cabaçal project, they haven’t presented the market with any
reason to buy into this story on the back of this MRE. And that, in a market looking for
excuses to liquidate positions and go to cash, is going to dump your stock.”
The result as seen in the above price chart and when December Tax Loss season swung
around, this Dot Tee Oh listing that came in with a blaze of publicity from its UK backers and
got plenty of Canadian instos on board in its first year was a sitting duck for selling on volume.
The Producer Basket
After 50 weeks of 2022, the Producer Basket shows a loss of 9.69% to level stakes:
company ticker price 1/1/22 Shares out MktCap(U$Bn) current pps gain/loss%
1 Newmont NEM 62.02 797.44 36.79 46.14 -25.6%
2 Barrick GOLD 19.00 1779 30.07 16.90 -11.1%
3 Franco-Nevada FNV 138.29 191.66 25.39 132.50 -4.2%
4 Agnico Eagle AEM 53.14 454.904 23.23 51.06 -3.9%
5 Wheaton PM WPM 42.93 450.3 17.55 38.97 -9.2%
6 Gold Fields GFI 10.99 887.72 9.05 10.19 -7.3%
7 Kinross Gold KGC 5.81 1296.5 5.30 4.09 -29.6%
8 Alamos Gold AGI 7.69 392.503 3.78 9.64 25.4%
9 B2Gold BTG 3.93 1055.6 3.59 3.40 -13.5%
10 Sandstorm SAND 6.20 223.79 1.14 5.09 -17.9%
All prices and stock quotes in U$ Port. avg -9.69%
18

A mixed week that tends toward the negative, with just three winners (GOLD, AEM, BTG) and
seven losers (the others), including the 6.0% hit taken by Gold Fields (GFI) as its CEO “is
resigned”, and the negative 5.9% drop in Franco-Nevada (FNV) on the Panama Cobre (FM.to)
news Thursday. More on that one below, but we’ll save the positive stuff and thoughts on
B2Gold (BTG) for ‘Market Watching’, to give it the space it deserves.
As our list managed to catch both of the bigger losers among the Tier 1 and 2 PMs this week,
we also lagged the GDX benchmark by another quarter point and while that’s not much, it
means we’re over 1% behind with just two weeks to go in our annual race and it’s now looking
bad for us in 2022.
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%
Franco-Nevada (FNV): Here’s another reason why I expect the issues between the
government of Panama and First Quantum (FM.to) to resolve in due course (see below). The
stream from Panama Cobre accounts for an average of 18% of FNV’s quarterly top line at the
moment and that’s serious money for a company
that runs such a high PE gearing. It wasn’t a
good week for PMs, so the timing was
unfortunate for FNV as larger money doesn’t
need much of an excuse these days.
However, with Harquail likely “voicing his
opinion” to FM that they come to an equitable
solution with the government of Panama (we
should recall Pierre Lassonde has other exposure
to the country as well) I’d expect FM to come to
a deal soon and even if they don’t, there’s no
real reason why FNV should be hurt even if
Cobre Panama changes hands. After all, theirs is
a streaming deal on produce and while “care &
maintenance” means something in the long-term, for the time being this size of mine cannot
simply shut down from one day to the next. Bottom line: FNV is a buy on this dip.
Gold Fields (GFI): Chris Griffith took over as CEO from Tom Holland on April 1st 2021 after
the latter spent 13 years at the helm of GFI, but in turn lasted little more than a year and a
half. Here’s the December 13th NR (17) and the
reason for his departure is in big red letters:
“Gold Fields Chairperson Yunus Suleman said:
"We thank Chris for the commitment and
dedication he showed as CEO of Gold Fields,
especially during the Yamana Gold transaction.
We were all disappointed that the Yamana deal
did not go through…”
Separately, ex-CEO Griffith stated (18)
“The Yamana setback should not be allowed to
19
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 ht4ced ht11 ht81
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 ht4ced ht11 ht81
source: IKN calcs, NYSE data

impede the company’s strategy,” Griffith said in an emailed statement. “As a CEO I felt
that I should take responsibility and allow the company to move forward under new
leadership unencumbered by the Yamana transaction.”
Being Griffith’s first CEO position, he was reportedly keen to make his mark and bring in a big
deal from the beginning of his tenure and when the Yamana deal was announced in May, he
confided that there had already been a couple of near miss deals with other companies. The
failure to complete with AUY put paid to his corporate strategy and the share price reaction is
that of a market now wondering whether GFI has a corporate direction. Or not.
The TinyCaps List
After fifty weeks of 2022, the TinyCaps show a loss of 35.22% 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 3.67 0.08 -66.7%
Golden Pursuit GDP.v 0.13 34.638 6.75 0.195 50.0%
Infield Min INFD.v 0.06 48.445 1.21 0.025 -58.3%
Kingfisher Met KFR.v 0.30 103.06 11.85 0.115 -61.7%
Latin Metals LMS.v 0.12 57.686 8.65 0.15 25.0%
Manitou Gold MTU.v 0.06 344.57 8.61 0.025 -58.3%
Melkior Res MKR.v 0.295 24.011 4.56 0.19 -35.6%
Precipitate Gold PRG.v 0.105 129.322 10.35 0.08 -23.8%
Signature Res SGU.v 0.35 55.14 3.58 0.065 -81.4%
Winshear Gold WINS.v 0.08 72.44 3.62 0.05 -37.5%
Prices in CAD$, data from TSXV basket avg -35.22%
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 basket average lost a point as this list limps sullenly toward the end of the year and its
much-needed refresh of names. There were four
15% TinyCaps, 2022 weekly tracker
winners (AUL.v, GDP.v, LMS.v, MTU.v) and of
10%
those the 25% added by Manitou (MTU.v) is the 5%
0%
most impressive until you realize the move was
-5%
just half a penny. The three losers (KFR.v, -10%
-15%
MKR.v, SGU.v) included the biggest loss from
-20%
Signature Resources (SGU.v down 18.8%) after -25%
-30%
that company’s recent share rollback. There were -35%
three stocks left unchanged on the week -40%
-45%
(INFD.v, PRG.v, WINS.v). -50%
No stock notes in this section this week, I
couldn’t think of anything to say.
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.
20
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 ht4ced ht11 ht81
source: IKN calcs, TSX data

Regional politics
A week of politics in Peru
A reminder of how last week’s long-ish note on the turmoil in Peru ended:
It’s going to look unstable and somewhat hairy for observers on the outside
for a while, but with the vacation season almost upon us we’re likely to see
the current protests from the “throw em all out” wings calm down and let’s
face it, anytime a Presidency ends as abruptly as Castillo’s did last week
there’s going to be shockwaves for a while. However, Peru is now on the right
path again and with a modicum of good fortune between now and the New
Year, calmer heads should prevail.
That still holds true today, even though the protests and violence has have continued all week
and the death toll of protesters in all parts of the country had reached 20 at the time of
beginning this note on Friday afternoon (EDIT: Sunday evening the count is now 23). The main
developments in the week have been:
New President Dina Boluarte made it clear on Monday that she considers herself interim-only.
Her first announcements were to plan for new elections in March or April of 2024 but, when
protests increased early in the week, offered an alternative scenario of new elections in
December of 2023. She’s also used the phrase “transitory government” in relation to her tenure
at just about every opportunity in her public statements. This is good.
President Boluarte also did the smart thing and sent the law project for early elections directly
to Congress, which put the ball in the court of the 130 seat nest of vipers, who immediately set
about their preferred task of obfuscation, delay and putting their own well-being before that of
the country. The motion to bring forward elections to either late 2023 or eaerly 2024 would
require a change to the country’s Constitution, which therefore needs either a 2/3rds majority
(87 votes) and a second successful reading, or a simple majority (67 votes) followed by a
national referendum. Instead it got just 49 affirmative votes and failed, causing all the criticism
to rain down on Congress (instead of the new interim President). She in her turn asked
Congress to debate the motion again and told them “not to look for pretexts, this (the future of
the country and its stability) is in your hands.” Congress will debate and vote on the same
motion again starting this Tuesday, but potential votes are already being conditioned on the
demands of each politico’s preferred party line. Some will only vote Yes if Congress is excluded
from elections. Some will only vote yes if there’s also a referendum on changing the
constitution (in the style of Chile…my that’s worked out well), some will only vote Yes if the
opportunity for re-election is given to current members of Congress. Etc etc, so the chances of
this motion getting 87 votes is unknown. In declarations on Saturday, interim President
Boluarte said (19) she would “stand firm (i.e. not resign) until Congress had come to an
agreement, but that may not be the case and that bring sus to our next point, the three most
likely near-term future scenarios for Peru politics:
1) Congress votes to bring forward elections. If they only garner enough votes to put the
motion to the country in a national referendum, that will still be enough as most of the
country want them all out, Congress and executive. It may take until early 2024, but
that wouldn’t be such a bad thing and at least Dina Boluarte has shown a responsible
attitude in her first days as (interim) President.
2) Congress blocks the early elections, Dina Boluarte then resigns. This is a distinct
possibility as, if Boluarte resigns, the job of Head of State would then transfer to the
current head of Congress, a Señor José Williams. He would have no mandate at all and
would have little choice left but to dissolve Congress and call new Presidential and
Congressional elections.
3) Congress blocks early elections, Dina Boluarte stays. However, Boluarte may decide to
stick it out as President if Congress blocks the immediate passage to early elections.
This may be because she “likes her new job”, or because by then Peru’s social protests
have calmed down and she has a reasonable opportunity to govern via a consensus
21

cabinet. This would also put the ball back in the Congress’s court and force them to act.
Regarding that last point, what’s also clear is the new political power given to the armed forces
and police, as seen in the strength of the repression tactics used against protesters up and
down the country. The exit of Pedro Castillo, who was remanded to 18 months of prison
custody while the investigations against his attempted usurping of power continue, also see the
“no violent repression” directive disappear and army units in particular have no held back on
use of lethal force against protesting groups that get out of hand.
Which brings us to the bodycount so far, which is high. The 20 deaths to Friday include eight in
one incident in Ayacucho in which protesters tried invade and blockade the local airport. In fact,
airports up and down the country (Juliaca, Arequipa, Ayacucho, Cuzco) have been targeted by
protesters as high value targets, which also speaks of the cynicism behind those leading the
marches. Inside the hard Left wing, now fearful they’re about to lose their grip on the power
positions they gained while Castillo was in power, works like this:
1) Organize marches in provincial zones against “the oligarchy”
2) Incite the marchers into violence against the forces of law and order (both police and
army officers
3) Make deliberate moves on strategic areas that they know will be defended aggressively,
e.g. airports and public judiciary offices
4) Use their protest groups as cannon fodder, knowing full well that police and army have
a directive to “shoot first ask questions later” when defending airports, etc
5) When deaths occur, blame the government and demand resignations (they got two of
the new ministers to resign last week) and protest about police brutality.
This is a sordid game of bloody chess, played between cynical lefties and hardened righties and
the losses are kept to the pawns. But the level of aggression and violence also speaks of the
desperation in Left wing circles as they know (or knew) that 1) they only had one chance to
destabilize the Boluarte government via airport invasion (etc) tactics, as protesters wouldn’t
willingly put themselves in the line of fire a second time once the consequences were clear and
2) with Christmas and the New Year vacation period nearly upon us, tempers are bound to
calm. The good news is that the latter is now happening and next week will see the re-opening
ofmost of the airports besieged last week (except for Ayacucho, that particular hotbed has five
days of hard curfew ordered against it). Most of the country has now settled down and while
there will be protests and marches, don’t expect them to be as headline-grabbing as last week.
The game is now political and in Congress, as we await to see whether they can find consensus
on an early election package. Meanwhile and finally, most of Peru’s mining industry carries on
regardless and you have to search to find news of active disruption of mines. Buenaventura
(BVN) announced (20) it was temporarily suspending activities at two of its mines, Julcani and
Orcopampa, but only as a precautionary measure. Meanwhile the road out of Las Bambas is
blocked again but that’s nothing particularly new and the only issue is a report that MMG is
running out of space to store finished concentrate. That will sell next quarter, rather than this.
Overall, Peru is still in a nervous and volatile period, but it’s not as bad as tose on the outside
(and media producing their clickbait) World have you believe. There are incidents and violent
protests, but they are isolated and in specific locations, rather than on a nationwide scale and
most of the country (including a very calm and relaxed capital city of Lima) is getting on with
the job of preparing for the Christmas festivities, going to carol services in the parks or
watching the World Cup Final on TV. This week will see the next political chapter and at some
point, we’ll get a better idea on which scenario becomes reality. But whether 1) early elections
2) Boluarte resigns forcing early elections or 3) congress and Boluarte reach stalemate and
hang on to their cushy jobs, expect the tone and tempers to calm in the weeks ahead.
Panama: Cobre Panama’s fight with the government should blow over soon
Via mining sector friend and Panama resident “WC”, this desk has kept tabs on the ongoing
spat between First Quantum (FM.to) and the government of Panama over its massive Cobre
Panama copper mine in the country, essentially Panama’s only large-scale formal mining
operation and big enough to account for between 3% and 3.5% of country GDP, depending
22

how you measure such things. While the bickering over an increase in royalties to the State has
been a background noise since construction got underway (a $6.2Bn project ended up costing
over $10Bn) and first production in 2019 , it came to a head in September 2021 when the
current government of President Laurentino Cortizo demanded a renegotiation of the terms of
the contract with FM, this after Panama’s Supreme Court ruled the deal unconstitutional. Aside
the headline royalties deal, the contract states FM enjoys a tax holiday until its capex is
recuperated in cash flow and what with the ticket price moving up around U$4Bn, it means
Panama has to wait longer for corporation tax profits. Then came January 2022 and the main
period of negotiations, which started with Panama demanding a royalty of between 12% and
16% and ending with the two sides agreeing on a deal that guaranteed a minimum of U$375m
per year, a number Cobre Panama deemed “reasonable” (21). However, the country wanted to
lift the tax holiday as well, which would bring the annual bill to over U$400m and no final deal
was signed. The issue festered until November 14th when Panama gave FM a one month
ultimatum and, according to the government at least, the company decided to play hardball and
largely ignore the deadline (22). When the news Panama had ordered the mine to move to
Care & Maintenance and caused FM stock by 15% that morning (as well as hitting related
company stock such as Franco-Nevada (FNV) (see above), FM had changed its tune and “said
on Friday it is going through "all available legal means.”
The country’s move is a clear political gambit and in its statements, Panama has talked of
foreigners abusing their territory and trying to set up their own colony (an image that works
well in a country with its blurry political Canal Zone). It’s also a position that looks to the
political longer-term and will protect this government later the line when (possibly populist)
political accusations are levelled at Cortizo during the next election cycle. However, FM’s
hardball position is based on solid logic and both company and government know Cobre
Panama is “Too Big To Close”. It’s not just the output and contribution to GDP, but the baseline
logistics of a company that employs 40,000 people, most of them Panamanian. You can’t just
put locks on doors of this business and tell people to take the week off, both sides know that
and while “order to close” makes for good headlines, the reality is that the mine must continue
operating at close to normal levels in the days to come.
This gives a natural window for further negotiations and with its stock price (and that of FNV)
dented, it’s now in FM’s best interest to make good on its assertion that two sides are still
“close to an agreement.” The Panama government isn’t dumb either, they have taken the “we
acted in good faith and got little response from FM” position but would willingly return to the
negotiation table. This means it is up to the company to make new overtures (and possibly
swallow some pride after being intransigent), to close on the heads-up deal that both sides
apparently agreed upon in January this year. And all that is a long-winded way of explaining the
title line, this one should blow over. Disputes of this are more common between company and
workforce (e.g. the ongoing tennis match between BHP and unions at La Escondida) and seeing
a government on the other side makes this one more controversial, but it’s essentially the same
situation. With “$375m or thereabouts” verbally agreed almost a year ago and a mine that
cannot physically be closed, both sides don’t want this to go any more legal than this. As for a
trade on this spat, I’d eschew the obvious “buy the dip” on FM and prefer FNV, which also
dropped hard on this news but is highly unlikely to lose its normal revenue stream from a mine
that will take literally weeks to shutter, no matter what happens to the eventual ownership.
Market Watching
The weird Friday price action is actionable
From out of seemingly nowhere on Friday, the market witnessed a sharp and rapid price moves
in a range of junior mining stocks, with plenty of volume backing up the price changes. Most of
them were to the upside, a few of them were down (and unfortunately AbraSilver was in the
latter group). Here are a few examples of the moves on Friday alone:
 Bear Creek Mining (BCM.v): Up 38.8%
23

 Aris Mining (ARIS.to): Up 13.8%
 Minaurum Gold (MGG.v): Up 65.7%
 Mirasol Resources (MRZ.v): Up 22.7%
 Discovery Silver (DSV.v): Up 17.6%
 Excellon Resources (EXN.to): Up 77.5%
 Kootenay Silver (KTN.v): Up 29.4%
More besides those. Most of those were ramped in the last hour of trading on heavy volume
and yes, I’ve checked those percentage moves twice to make sure they’re real. The reason
seems to be a particularly vigorous quarterly re-balancing of one of the secondary mining
ETFs,, the silver junior basket SILJ. ETF rebalancing causes price discrepancies at the best of
times but in this case, the ETF seems to have made wholesale changes to point the vehicle in a
new direction, away from larger stocks that aren’t easy to justify in what is supposed to be a
silver junior basket (e.g. Capstone, First Majestic, Buenaventura, Hochschild, Hecla, Pan
American, etc) and toward smaller cap silver names. The big shift in philosophy also coincides
with the sale of a couple of its larger positions Yamana (AUY) (to Pan American) and Turquoise
Hill (TRQ) (to Rio Tinto). There was plenty of fund cash in those shares and were apparently
obliged to find new homes for the money in that particular issue. Here’s a full list of changes
(that should also include the newly added Summa Silver):
24

All this is fine in theory, but the outsized and anomalous market moves are going to happen
when a large fund takes a position in a thinly-traded company. For example, let’s consider
Excellon Resources (EXN) which has been a disaster in recent times but in this rebalancing, SILJ
has decided to up its exposure from 0.03% of the fund to 0.10%. That’s not much in the ETF’s
terms and it represents a purchase of 680,335 shares, which at its previous price of under 50c
isn’t much in cash terms for an ETF, either. The problem is that it’s not just slightly but WAY
more than the normal market volume for EXN can handle in a short period of time and as a
result, SILJ buyers with their time limit to rebalance were forced to run through all the asks
available. The result was a sharp +77% move on Friday.
For another example, let’s consider Sailfish Royalty (FISH.v), which saw buyers trying to pick up
shares in the days leading up to Friday as well:
This is, quite literally, dumb money buying and as I watched the tape last week I saw the
bid/ask in FISH widen to an eventual $1.04/$1.30 at the close Friday, but the purchases didn’t
stop. The buying pressure on a thinly traded ticker with a reasonable number of shares
outstanding but a tiny float (due to its insto investment positions) has practically doubled FISH
shares in the space of a week and this pattern was repeated in many other places.
The moves, both up and down, do beg an obvious question or two. For example, why is the
TSX/V so trigger happy on circuit-breaker actions when a particular stock suddenly moves up or
down violently on a sudden influx of money and volume, but when it’s the ETF money involved
(and most of the price changes are to the upside) these trades are allowed to stand quite
happily? Possible answer: we know from experience that the Canadian markets are tilted in
favour of the bigger players so it’s another moment when the best we retail grunts can do is
shrug shoulders and accept the new paradigm. Another observation is how days like this shine
light on the current paucity of outside interest in the junior mining sector, as Friday afternoon
was one of those rare occasions when “outside money” hits the sector.
There is a practical bottom line to this commentary, however: Those of you holding any of the
fast-moving winners on Friday (do any of you hold any Excellon? If you do you’re braver than I)
would do well to take the obvious advantage being offered in this window and sell into the new
price, if still available on Monday.
B2Gold (BTG) reiterates its 4q22 blowout to come
On Tuesday December 13th B2Gold (BTG) (BTO.to) published a NR with a very long title (23):
“B2Gold Announces Exploration Drilling Results from the Fekola Complex that
Continues to Expand Gold Mineralization in Several Zones; Record Gold
Production in October and November from the Fekola Complex; Re-affirms
2022 Total Gold Production Guidance of 990,000 to 1,050,000 Ounces”
A mouthful yes, but a good title line because it saves this desk work in explaining the contents.
When BTG last reiterated its annual guidance on October 17th, as part of its 3q22 filings, your
author expressed a modicum of cynicism via this post on the open blog (24) which noted that
25

“…in order to make the lower end of guidance BTG will need to produce a minimum of
330,000oz gold in 4q22, which would be a record quarter for the company. On the back of
three under-performing quarters on the trot.” We also published a version of this production
tracker chart:
BTO: Gold produced, per qtr
26
357042 486932 390042 040242 786132 958032 020642 002852 041542 236052 395142 318362 964072 446022 216112
162013 798403
563902 326322 610722
000033
400000
350000
300000
250000
200000
150000
100000
50000
0
71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 tse22q4
OzAu
source: company data
Indeed, that 330,000 oz gold number forecast for 4q22 could be as high as 390,000 oz if BTO
hits the top end of its guidance. Therefore it was most interesting to see the company re-
reiterate last week on December 13th, with less than three weeks before the end of the quarter
and year and with two record-breaking months of production from Fekola in the bag. Here’s
that segment of the NR:
2022 Total Gold Production Guidance Re-affirmed; Fekola Achieves Back-to-
Back Monthly Gold Production Records to Start the Fourth Quarter of 2022
Based on the year-to-date cost performance and strong gold production in the fourth
quarter of 2022 (as discussed below), the Company re-affirms full year 2022 total gold
production guidance. Total gold production is expected to be between 990,000 and
1,050,000 ounces (including 40,000 to 50,000 attributable ounces projected from
Calibre).
At the Fekola Mine in Mali, beginning in October 2022, ore has been mined from the
higher grade Fekola open-pit Phase 6. Mill feed grade in October and November 2022
has averaged in excess of 3.50 g/t gold. Mining from Fekola open-pit Phase 6 is
anticipated to continue through the balance of 2022 and into 2023. As a result, the
Fekola Mine produced 79,967 ounces of gold in October 2022, and 95,460 ounces of
gold in November 2022, consecutive monthly production records. Year-to-date gold
production at the Fekola Mine of 530,073 ounces through November 2022 positions
Fekola well to achieve the high end of full year 2022 guidance of between 570,000 to
600,000 ounces.
Along with the strong drill results reported in the same NR from Fekola, suggesting that its
current high production cadence isn’t just a one
quarter flash in the pan, the news saw BTG pop
higher on Tuesday (and they managed to pick a
positive open for gold, too). However and as
this ten-day chart shows, it only brought BTG
back to evens with the field over the last two
weeks (right). This desk gets the distinct feeling
BTG is now a sleeper and, when it reports its
4q22 production, sales and preliminary financial
data (as is its normal wont, they give dollar
sales numbers and even preliminary cash cost
data) the stock is in for a re-rate and move
upward.
Here’s why. Even if we only go with the minimum level as our benchmark and assume BTG
produces 330,000 oz in 4q22, rather than the top-end possible 390,000 oz, then assume its
sales are in line with production on a typical level (around 13% lower, due to minority
ownerships and royalty deliveries), that means 315,000 oz gold sold:

BTG: Gold Produced vs Gold Sold
27
964072 556652
446022 033202 216112 170002
162013 056682 798403 053292
563902 001591 326322 858502 610722 004922
000033 000513
350000
300000
250000
200000
150000
100000
50000
0
02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 tse22q4
gold produced (oz)
gold sold (oz)
source: company filings, IKN est for 4q22
BTG normally gets its received average very close to the London PM; Fix average for any given
quarter and in 4q22 to date, gold currently averages U$1,728/oz. Therefore is we round down
to U$1,720/oz for the sake of conservatism, that gives top line revenues of U$542m:
BTO: Quarterly revenues
35.974
3.263 99.263
68.015 11.625
85.563 85.183 55.293
245 600
550
500
450
400
350
300
250 200
150
100
50
0
02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 tse22q4
U$m
source: company data
That would be a new record, better even than the two strong 3q21 and 4q21 quarters that
converted those sales into these numbers:
3q21: Free Cash Flow $320.3m, Net Income U$134.9m, EPS 12c
4q21: Free Cash Flow $266.3m, Net Income U$153.1m, EPS 13c
Considering the way BTG has under-performed peers recently, the day it publishes its 4q22
production NR looks an easy mark as a turnaround
moment in the company’s fortunes. Whether or
hold the gains hold is another story, but at its
current U$3.40 it’s not going to take a math genius
to consider the implications to forward earnings
from what’s now telegraphed as a strong quarter
and move to buy the upside when BTG announces.
For the record, BTG announced its 4q21 production
numbers on January 19th 2022, its 4q20 production
numbers on January 20th 2021 and its 4q19
production numbers on January 15th 2020.
Altaley Resources (ATLY.v): Still watching, not buying
In IKN696 dated September 18th in the main Fundamentals note that weekend, “Why put
Altaley Resources (ALTY.v) on your radar” this desk picked out ATLY as a distressed stock and a
potential company to watch if it ever gets its act together. We ran the numbers, identified an
asset-rich company that’s having serious liquidity issues and facing a cash crunch and
concluded that it was worth watching without buying for the moment because, if it gets its act
together and its two mines running, there was a ton of value to unlock. Here’s how the note
ended:
While I’m the first to agree that its present balance sheet situation is a mess,

the numbers involved are comparatively small in absolute terms and that
mean earnings power of just Campo Morado would be enough to strengthen
its financial position quickly. Then once we factor in a Tahuehueto that’s close
to fully built already (capex embedded) and could easily run at an annual
45,000oz AuEq and a U$600/oz net margin (i.e. U$27m annual), its current
market cap of C$37.5m makes the share price value blatantly obvious. While
not a buyer immediately and preferring to wait on the sidelines until we have
clarity on its corporate financial position, this is a company and a story I will
be watching closely from now on and once it’s clearly out of the financial
penalty box, it’s exactly the type of share price that can make for a multi-
bagger leveraged win once the market for metals and mining stocks turns.
That was followed by a brief mention of ATLY in IKN697 dated September 25th, that followed
some feedback on the original note and we made clear the house position on the stock:
I like ATLY and its potential, but until I see how 3q22 comes before adding it
to the formal Stocks to Follow, even as a Watchlist component. The cash and
liquidity situation is the main concern and as I don’t see how the company
avoids having to raise some more money, even if it’s just a modest sum, that
process could sink the equity price even further or if that’s too dramatic, it
would place the current price in the freezer until the raising process is done.
That weekend, ATLY had closed at “a cheap looking 12c”, but signed off by making reference to
its upcoming 3q22 financials and wondering
whether it would look cheap afterward. That
brief note in IKN697 was the last mention of
the company until today, here’s a price chart of
ATLY since then (right).
Indeed, it’s a lot cheaper now and a new round
of selling in the last couple of weeks has
dragged its price down to 6c this weekend. This
desk noted the 3q22 financials when they
appeared late last month and decided not to
make mention of the stock in that edition of the
Weekly, this month have seen two NRs of more
interest show up. First on December 6th ATLY
announced (25) an 8-to-1 rollback and concurrent rights issue, then on December 9th we got a
corporate update type of NR (26) which also came across as one of those “things haven’t been
great, cards on the table” communications we occasionally get from juniors that are trying to
draw a line under a rough period and retain stakeholder equity. Thoughts on both coming up.
First the rights issue and share consolidation and with 278,944,422 shares outstanding, once
complete the rollback would leave 34,868,052 shares out. On top of that, the company
conducts a rights issue at a ratio of exactly 0.95598496 for every share held, which means a
maximum total of 33,333,333 units. Each unit is priced at 48c (6c x 8 = today’s market price)
and contains a full share and a ¼ warrant with a strike of $0.75 and a shelf life of 30 months.
The rights issue would bring a maximum of $16m to treasury and on that score, although it is
highly unlikely to see a full take-up we do know this (quoting the NR):
The Company has ascertained that four insiders who on a pre-Consolidation basis
collectively own or exercise control or direction over, a total of 72,878,462 Common
Shares, representing in the aggregate approximately 26.13% intend to exercise all or a
portion of their Rights and subscribe for Units in the Rights Offering. We can give no
assurance that any other insider of the Company will subscribe for any Units in the
Rights Offering.
That means ATLY will get at least a quarter of rights taken and quite possibly more and while
it’s not an easy guess from the outside, if we take a stab and say 50% of rights are eventually
taken up, that would add around 16.16m shares to the news consolidated count and leave
28

ATLY at around 51m shares out and if the 48c price holds, a nominal market cap of C$24.5m.
We now move to the NR of December 9th which was mostly an extended CEO comment from
Mike Struthers, who was appointed CEO on September 12th (and was one of the reasons we
became interested in this potential turnaround story. With his internal review completed, he
took the opportunity of a NR to report to shareholders, so we got mea culpa messaging from
ATLY such as this:
It became clear during the review that a greater level of discipline was required in
certain functions, including budgeting, planning, and forecasting; together with the
need to address certain organizational weaknesses; to transform Altaley into a
respected, professional and consistently performing mining company. A number of
improvements have already been put in place, others will follow in the coming weeks
and months.
We also got “we knew that” statements such as…
The Tahuehueto Gold Mine Construction Project is substantially behind schedule and
over budget.
…but getting official recognition from the company isn’t a bad thing and we now know the new
CEO’s plan to remedy:
One of my early decisions was to split the 500tpd and 1000tpd projects into two
stages. It is important to first deliver the 500tpd project successfully, and from that
foundation expand to 1000tpd. The 500tpd Project is expected to be completed in
early Q2, 2023, and the Company expects to then move directly to the 1000tpd
expansion. Many elements for the 1000tpd project are already in place with the first
stage, and we already have the second ball mill.
That came with some anecdotal evidence of improvement
Pre-production at Tahuehueto has been progressing well. We are currently milling an
average of 350tpd and the plant is performing to expectations, producing saleable zinc
and lead concentrates, the latter with on average 50 g/t gold.
He also noted what would happen with the money raised from the current Rights Offering:
The Rights Offering allows shareholders to participate in a funding round and will raise
additional funds to complete the construction of the 500tpd project at Tahuehueto.
These additional funds will be sufficient to complete this project.
That sounds good, but it doesn’t specify if only a half take-up of the rights would be enough,
because if they assume 100% as sufficient it’s likely to end in another financing in 2023. CEO
Struthers then turned to Campo Morado, which in his words had “had an excellent 2021, but a
poor 1H22.” After a brief outline of the metallurgical issues behind the problems, what they’ve
been doing to remedy things and ended with, “…we have a detailed path forwards to improve
performance. I’m now optimistic we’ll see steady improvements through 2023 and beyond.”
Overall, the impression given from the Campo Morado comments is cautiously optimistic but we
shouldn’t expect an immediate bounce back to the 2021 output levels. The 3q22 results backed
up this scenario. Filed on November 29th, they show a Campo Morado that is still running at
just above breakeven:
C$m ATLY: Mine op profit, per quarter
22
20
18 Gross Revs
16 total COGS
14 Mine Op Profit
12
10
8
6
4
2
0
-2
1q20 2q20 3q20 4q20 1q21 2q21 3q21 4q21 1q22 2q22 3q22
29 source: company filings

That wasn’t the plan, as ATLY in 2021 looked to fund Tahuehueto’s capex with cash flow from
its operations. That wouldn’t be so bad if it weren’t for the debt already on board …
ATLY: Overall Assets
…and the resulting liquidity squeeze as previously noted in IKN697. Therefore, the recent
Rights Issue announcement came as no surprise to this desk but even then and even if they
manage to raise the full $16m from a 100% take-up, the balance sheet is set to stay in
negative working cap territory.
So it’s one thing to fund the ramp-up of
Tahuehueto, another to assume this extremely
delayed project gets delivered on its newly
revised timescale by the new CEO and then
immediately makes a difference to equity.
The bottom line: For the time being Altaley
(ATLY.v) remains a “watch don’t buy”
proposition. It still has more to do before it can
be considered as a serious investment alternative
and while its mine asset value is undeniable, the
lack of liquidity, weak balance sheet and threat
of default make it too risky until it has shown it
has turned the corner. The recent decision to raise capital via a Rights Issue is logical and, if
the company can get serious about the Tahuehueto build-out at the same time as improving
production and profitability at Campo Morado, there’s a trade in the future, but with a share
rollback that will likely see the stock sell off further once complete, it’s more likely to see new
lows in the first part of 2023 before any real recovery
sets in. We will therefore watch for improvement at
Campo Morado operations and will also watch to see if
ATLY can keep to its new projected timeline and get its
high grade Tahuehueto gold project off and running at
500tpd by the end of 3q23 (or at least threatening to
do so before that) because as this chart shows, even
30
3.83 3.04 6.93 4.93 1.04
0.04 2.44
5.25
2.08 9.68 1.59
4.401
160
140
120
100
80
60
40
20
0
91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3
C$m ATLY: Liabilities
fixed
other current inventories
mkt sec
cash & eq
source: company assets
264.34
265.94
C$m total LT liabs
100 total current liabs
90
80
70
60
50
40
30
20
10
0
4q191q202q203q204q201q212q213q214q211q222q223q22
source: company filings
ATLY Working Capital per qtr
10
0
-10
-20
-30
-40
-50
-60
-70
-80
91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3
C$m ATLY: Cash treasury per qtr
12
11
10
9
8
7
6
5
4
3
2
1
0
source company filings
91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3
source: company filings
srallod
fo
snoillim
ATLY: Book Value
50
35.8 38.9
40 30.7 32.8
30
20
5.5 10
0
-10 -0.9
-20 -12.3
-30 -24.1-24.5-25.1-23.5
-26.7
-40
91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3
$m
source: company filings

with its current tight cash situation there’s 14c/share in net asset value. We can expect that to
be diluted by the rights offering (our best guess 50% take-up would mean an overall asset
value of around 11c/share), so if they both become performing assets this share price will begin
its recovery by doubling. However, we’re far from guaranteed a perfect 2023, as to date ATLY
managed to deliver serial disappointments at both assets. We wish new CEO Struthers the best
of fortune and if he manages to deliver, he’ll also offer us an interesting trade option, but until
ATLY shows true intent to stick to its promises, new CEO or not, there’s no point in putting
money into shares that could be crushed by a debt load at any given moment.
Conclusion
IKN709 is done, we end with bullet points:
 The dump in AbraSilver (ABRA.v) on Friday is a clear buy opportunity.
 I’ve managed to get through this whole edition without mentioning that Minera Alamos
(MAI.v) is still at an amazingly cheap price compared to its upcoming newsflow. |
 Congratulations to Argentina, the best team won.
 A final reminder, next week’s edition comes out on December 25th and will be a bare
bones edition.
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.cnbc.com/2022/12/13/live-updates-ftx-collapse-house-lawmakers-hold-hearing-following-arrest-of-
founder-sam-bankman-fried.html
(2) https://carnegieendowment.org/chinafinancialmarkets/85179
(3) https://www.aljazeera.com/news/2022/10/5/coup-in-burkina-faso-what-you-need-to-know
(4) https://www.aljazeera.com/news/2022/10/21/ibrahim-traore-sworn-in-as-interim-president-in-burkina-faso
(5) https://www.voanews.com/a/burkina-faso-ambush-kills-13-soldiers-security-sources/6812370.html
(6) https://www.voanews.com/a/burkina-faso-fighting-for-survival-against-jihadists-/6815597.html
(7) https://www.voanews.com/a/burkina-troops-3-civilians-killed-in-jihadist-hit-north-/6851484.html
(8) https://www.usnews.com/news/world/articles/2022-12-16/un-thousands-in-west-central-africa-could-face-starvation
(9) https://www.thedefensepost.com/2022/12/16/burkina-air-land-sweep-terrorists/
(10) https://www.reuters.com/world/africa/burkina-faso-aware-dangers-wagner-force-france-2022-12-15/
(11) https://julesduhamel.wordpress.com/category/burkina-faso/
(12) https://www.abrasilver.com/news-releases/abrasilver-reports-multiple-wide-silver-drill-intercepts-including-103-
metres-grading-139-gt-silver-near-surface-in-new-southwest-zone-at-diablillos
(13) https://www.hellenicshippingnews.com/copper-set-for-weekly-drop-on-china-recession-fears/
(14) https://kutcho.ca/investordeck
(15) https://www.youtube.com/watch?v=rAawJv_bWCU
(16) https://finance.yahoo.com/news/meridian-announces-maiden-mineral-estimate-101500063.html
(17) https://www.prnewswire.com/news-releases/gold-fields-ceo-chris-griffith-steps-down-martin-preece-appointed-
interim-ceo-301701264.html
31

(18) https://www.mining.com/gold-fields-ceo-griffith-leaves-after-failed-yamana-takeover/
(19) https://rpp.pe/politica/gobierno/dina-boluarte-invoca-al-congreso-aprobar-el-adelanto-de-elecciones-no-busquen-
pretextos-esta-en-sus-manos-noticia-1454273
(20) https://www.kitco.com/news/2022-12-16/Buenaventura-suspends-two-mining-operations-in-Peru-due-to-
protests.html
(21) https://news.metal.com/newscontent/101729573/first-quantum-agrees-to-increase-the-royalty-for-the-cobre-
panama-copper-mine-or-pay-panama-375-million-a-year
(22) https://iknnews.com/first-quantum-fm-to-plays-hardball-with-panama/
(23) https://www.b2gold.com/news/2022/b2gold-announces-exploration-drilling-results-from-the-fekola-complex-that-
continues-to-expand-gold-mineralization-in-several-zones-record-gold-production-in-october-and-november-from-the-
fekola-complex-re-affirms-2022-total-gold
(24) https://iknnews.com/b2gold-btg-bto-to-could-appen-guv/
(25) https://www.altaleymining.com/media/altaley-mining-corporation-share-consolidation-and-rights-offering
(26) https://www.altaleymining.com/media/altaley-mining-corporation-ceo-update
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
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Great Panther GPR.to Aug'20 C$0.60 21-Jun-20 C$1.10 83.3% Profit taken, good trade
Jaguar Mining JAG.v Aug'20 C$0.42 21-Jun-20 C$0.65 54.8% Profit taken, good trade
Sandstorm Gold SAND Aug'20 U$7.76 10-May-20 U$9.37 20.7% Profit taken, good trade
Integra Resources ITR.v Aug'20 C$2.23 13-Aug-18 C$5.40 142.2% Profit taken, good trade
Wesdome Gold WDO.to Aug'20 C$2.37 14-Oct-17 C$14.82 525.3% last 1/2 of big win closed
INV Metals INV.to Sep'20 C$0.40 17-May-20 C$0.45 12.5% Cut all Ecuador exposure
Cartier Resources ECR.v Nov'20 C$0.155 3-Aug-18 C$0.25 67.7% Exact close price TBA
Tinka Res TK.v Dec'20 C$0.195 19-Apr-16 C$0.195 0.0% Closed on a round trip fail
2015 to 2019 annual closed positions in appendices below, 2009 to 2014 closed positions in editions IKN553 or earlier
Stocks To Follow Closed Positions 2019
Closed in 2019 closed close price
Atico Mining ATY.v jan'19 C$0.55 24-Jul-16 C$0.32 41.8% patience ran out, made room
Candente Copper DNT.to jan'19 C$0.075 3-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
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Lara Expl. LRA.v Mar'17 C$1.15 8-Apr-12 C$1.05 -8.7% cut to make room for new trade
Rye Patch Gold RPM.v Apr'17 C$0.31 2-Sep-16 C$0.32 3.2% cut for doubts & new stock
Cordoba Min. CDB.v Jun'17 C$0.75 15-Sep-16 C$0.63 -16.0% closed
Constantine Metal CEM.v Aug'17 C$0.135 9-Apr-17 C$0.28 107.4% spec trade closed, good win
Red Eagle Min. R.to Sep'17 C$0.67 13-Dec-16 C$0.27 -59.7% IKN's biggest failure in years
Starcore Intl SAM.to Sep'17 C$0.61 10-Jan-15 C$0.31 -49.2% Patience ran out
B2Gold BTO.to Dec'17 C$2.11 12-Sep-14 C$3.39 60.7% sold small portion for liquidity
Stocks To Follow Closed Positions 2016
Closed in 2016 closed close price
Phoscan Chem FOS.to jan16 C$0.28 29-mar-15 C$0.265 -5.4% Buyout trade, bot but poor deal
True Gold TGM.v jan16 C$0.18 23-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.
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