IKN #743Premium

The IKN Weekly
Week 743, August 13th 2023
Contents
This Week: Trade heads-up, In Today’s Edition SilverCrest or Fortuna Silver.
Fundamental Analysis: Fortuna Silver (FSM) (FVI.to): 2q23 financials offer a bargain entry
point.
Stocks to Follow: AbraSilver (ABRA.v), Minera IRL (MIRL.cse). Western (WEX.v).
Copper Basket: Overview.
Producer Basket: Overview, Wesdome Gold (WDOFF) (WDO.to).
TinyCaps Basket: Overview, Precipitate Gold (PRG.v), South Star Battery Metals (STS.v).
Regional Politics: Argentina: PASO preliminary results, Ecuador: The assassination of
Fernando Villavicencio.
Market Watching: Argonaut Gold (AR.to): Better but still high risk.
I remind subscribers that no part of this newsletter can be copied, reproduced or
given to any third party without the express permission of the author.
This Week
Trade heads-up
I’m a buyer of Fortuna Silver (FSM) (FVI.to) this week and it will become a component of the
Stocks to Follow list as of next weekend. I may well have to sell a few shares in other holdings
to do so, but this price looks too good to miss and I won’t hang around.
In Today’s Edition
 Today’s edition is all about Fortuna Silver (FSM) (FVI.to) as its 2q23 financials have
been largely misunderstood by the market and the sell-off in the stock last week has
offered an excellent opportunity to buy cheaply into a company that’s in the process of
transforming into a fully-fledged tier 2 gold miner. With a market cap now well under a
billion dollars for a company that will soon be producing around 400,000 oz gold
annually, it’s now or never at under U$3.00 per share. Buying.
 Though FSM is the main event, we do a few more things today such as a look at why
Wesdome Gold (WDOFF) (WDO.to) rallied and a thought or two about a previous
holding, Argonaut Gold (AR.to), as it approaches the start of production at Magino and
a critical period in its attempted turnaround.
 We also take in the preliminary results from the Argentina PASO election today, where
the headlines are being taken by independent Libertarian candidate, Javier Milei.
 And while it’s not the longest note, please check out today’s note on South Star (STS.v)
in the TinyCaps section, as it’s just offered up some potentially market moving
financing news.
SilverCrest or Fortuna Silver
As the 2q23 results from a host of interesting companies came in last week, including improved
results from ther troubled Argonaut Gold (AR.to) and a better outlook for Wesdome Gold
(WDO.to) (WDOFF) (see Producer Basket), one that caught the eye was the strong numbers
out of SilverCrest Metals (SILV), They saw the SILV share price rebound from its recent dive
caused by that technical report and the downgrading of its reserve and resource and, as SILV is
1

one of the companies currently under soft coverage, the results demanded a closer look. With
the stock recently beaten down, I started crunching the numbers last week and built up a
spreadsheet with the intention of publishing on the company this weekend.
Right up to the moment Fortuna Silver (FSM) (FVI.to) reported its quarter. This stock recently
covered as a potential bargain purchase, filed a 2q23 that failed to impress the market and the
stock duly sold off, which struck me as bizarre because that nice Mr. Market seems to think its
2q23 will be representative of quarters to come. We’d already outlined the way FSM is in the
process of changing substantively in the IKN738 analysis, what last week’s results showed was
nothing out of that narrative but with the market reacting to the headline numbers and not
looking any deeper, a cheap stock suddenly became a lot cheaper.
As such, I’ve cleared the decks in an otherwise uninspiring week of high (Northern) summer to
make the case for FSM ownership and why I’m going to buy a few shares myself. I know
SilverCrest (SILV) is of interest to several subscribers (I have the mails, thanks) and we may go
on to feature the stock in a subsequent issue, but the case for FSM is, in the opinion of this
desk, far stronger and deserving of your full attention in this edition.
Fundamental Analysis of Mining Stocks
Fortuna Silver (FSM) (FVI.to): 2q23 financials offer a bargain entry point
Five editions ago in IKN738 dated July 9th, the main fundies report was “Fortuna Silver (FSM)
(FVI.to) may at last be a buy” with the report that followed, all about explaining the reasons
behind that title line. We also made sure your author’s credentials on FSM and the people who
run it were laid out, because I’ve been a critic of the company and the way it goes about its
business for many years. Here’s a quick reminder:
“…quite frankly I don’t like how FSM goes about its business and I speak as someone who was up
close and personal with the company for many of its formative years. Be clear that I don’t like its
underhand methods of paying for misleading promotion, I don’t like its poor record of delivery, I
don’t like the self-serving Empire Builder attitude that comes from the people at the centre of the
company and I certainly do not like its H&S record, as FSM has a nasty habit of seeing workplace
fatalities happen either at its operations (Caylloma, Lindero) or around it and among people who
protest against its presence (San José).
However, the point of IKN738 was not to write a gratuitous hit piece on FSM, instead it was to
point to what seems to be brewing, an interesting buying opportunity in a stock that is in the
process of transforming its production and revenues mix. Here’s another quick reminder:
“FSM is now at an inflexion point in its development and, with the advent of its new Séguéla mine
in Côte d’Ivoire now coming online as well as expected improvements to its Yaramoko operations
and its key Lindero mine now producing at a steady state, FSM will now move out of its growth
phase and begin to harvest monetary profits and deliver better quarterly operational results.”
We argued that FSM is becoming a gold miner and once 2023 is behind us, will shape as a very
different company, something the market hadn’t fully grasped to that point. We also previewed
the 2q23 financial results and last week, those were published by the company. Here’s how the
market treated the results:
2

Back in IKN738, FSM was priced at U$3.14 and between then and last week, had rallied with
the market median before partially re-tracing, again in line with the benchmarks such as GDX/J.
Last week FSM was sold heavily on what the market considered a poor set of 2q23 results and
this weekend, the US issue is priced at exactly U$3.00.
The job today is to explain why this is now an excellent price for this stock and why I’m going
to buy some shares and add it to the Stocks to Follow list.
Charts update: Before we get to the reasons for this new purchase, I’d like to update and add
to some of the price charts as seen in IKN738. The first is the longview, as we ran this ten-year
price chart in the previous report to give the bird’s eye view of its performance over the years
and those two hard spikes higher, that coincided with the two major runs in gold and silver.
Today we add to the views with a couple of other price charts in order to add context and see
how we got to today’s U$3.00 share price. The first is
this three-year visual with a couple of incidents
scribbled in red (right The purchase of Roxgold
turned out to be poison for the stock price, something
underscored when its operating Yaramoko mine was
impaired to the tune of U$103.5m at the end of 2022.
More on that asset in a moment, first we also note
the other major slide suffered by FSM in late 2021,
when its San José mine in Mexico (Compañía Minera
Cuzcatlán) got into permitting problems after its local
community was partially successful in stopping the
mine’s operating permits from getting what is
normally a near-automatic time extension. FSMJ had
to go to the courts and “pull political strings” in Mexico
in order to stay open, but eventually won its battle
and the San José mine remains open and operating to
this day. The second is the 2023 year-to-date
(d)evolution and while not quite a 52-week low thanks
to the bottom of the slump in FSM in September 2022,
last week saw FSM hit new 2023 lows on the back of a
2q23 financials report that failed to impress its
audience.
This is where we are today: The market opened the
NR on August 9th (1), read the headlines…
Financial
 Adjusted net income of $2.9 million or $0.01 per share
 Net income of $3.5 million or $0.01 per share
 Adjusted EBITDA1 of $44.4 million
 Net cash provided by operating activities $44.2 million and free cash flow from ongoing
operations of $9.5 million
 Liquidity as of March 31, 2023 was $97.9 million
3

Return to Shareholders
 NCIB share repurchase program renewed for up to 5% of outstanding common shares
(refer to Fortuna news release dated April 28, 2023)
Operational
 Gold production of 64,348 ounces
 Silver production of 1,262,561 ounces
 Gold equivalent production of 93,454 ounces
 Consolidated cash costs1 per ounce of gold equivalent sold of $968
 Consolidated all-in sustaining costs (AISC)1 per ounce of gold equivalent sold of
$1,799
 Lost Time Injury Frequency Rate (LTIFR) of 0.43 and Total Recordable Injury
Frequency Rate (TRIFR) of 1.15. One fatal incident was recorded at the Caylloma
mine in June.
…hit the sell button and quite honestly, if I had to make a call on the “highlights” as published
by FSM in its array of bullet points, I’d be a seller as well. Production of gold and silver were
down on previous quarters, the gold equivalent AISC of U$1,799/oz stuck out like a sore thumb
and net income of 1c/share is never going to impress you into buying a U$3 stock, to name just
three line items on the above list (though frankly, for me the worst of the lot is the last one, as
FSM managed to kill yet another of its workforce). However, when we go beyond the backward
vision of the 2q23 financials and consider what is in its future pipeline, last week’s sell-off
makes FSM at its current price not just good value, but a compelling purchase opportunity. It
therefore came as no surprise to this desk to see the company CEO, Jorge Ganoza, buy shares
on the open market (28,000 shares at U$2.94) late last week (and David Laing joined him,
buying 10k shares on the TSX). In order to explain the investment opportunity now available,
today we move from smallest to biggest. We first consider the component parts of FSM, as the
individual performance of the company mines holds the key to why this company has
improvement baked in. We then check on the basic balance sheet items to show all is in order,
then get to the real reason we find the current share price so attractive, by putting the
operational numbers together and considering FSM’s operations as a money making entity as its
growth projects and capex works are completed and come to fruition. By then, I hope to have
convinced you of the compelling nature of this trade opportunity.
The five working mines: We now take in salient points from the results as seen at FSM’s five
operations, starting with the smallest and finishing with the most interesting. We go in this
order:
 Caylloma: The small mine in Peru had another good quarter
 Lindero: The open-pit gold operation in North Argentina under-performed compared to
previous quarters, but this was expected and the mine continues to work well enough
 San José: Hit by a workers’ strike during the quarter, production and sales were down
in Q2, but there’s every reason to expect improvement in the quarters to come
 Yaramoko: The most interesting set of results, as the market howled at the apparent
high cash cost but the devil is in the details and we should expect AISC to drop going
forward
 Séguéla: FSM’s brand new mine in Côte d’Ivoire gave its first limited production of gold
ounces in Q2 and should move into commercial production as its ramps into the end of
2023.
So here we go:
Caylloma: FSM’s original operation in Peru and now its smallest mine, Caylloma also happens
to be one of its most regular and
profitable these days after going through Caylloma: Revenues contribution by metal
a difficult patch a couple of years ago.
That’s mainly because this mine is in
reality a base metals operation, with at
least 70% and sometimes as much as
4
7.85
3.620.51
3.45
7.82
0.71
3.35
7.82
0.81
4.25
6.82
0.91
9.05
8.72
3.12
1.05
1.62
9.32
4.15
8.52
8.22
0.25
9.42
1.32
4.64
0.42
7.12
3.74
6.52
9.91
4.05
4.52
2.71
7.15
3.62
3.02
4.65
6.32
4.81
7.65
7.52
7.71
9.94
4.92
7.02
4.75
7.52
8.61
2.74
1.03
3.22
0.84
2.13
2.02
2.05
9.92
4.91
100%
90%
80% 70%
60%
50%
40% 30%
20%
10%
0%
91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 tse32q3 tse32q4
%
Ag Au Pb Zn
source: FSM data, IKN ests

80% of revenues coming from zinc and lead.
This quarter saw good production and gross metals
Caylloma: Gross calc revs vs realized revs, per qtr
revenues from U$36.4m, but as the chart right also
shows Caylloma pays plenty to the middlemen
concentrate buyers and after adjustments, realized
revenues came to U$25.7m. However, that was still
enough to return a net profit (i.e. after Peru taxes) of
U$5.111m and as the chart below suggests, the
regularity of the Caylloma mine revenues in recent years
is one of its strongest suits. That’s the zinc premium.
As for the rest of 2023, FSM expects Caylloma
to reach the upper end of its guidance
schedule. In the financial forecasts (below) we
don’t pay much heed to the steady and regular
Caylloma because it forms part of the revenue
base, rather than the coming upside from its
expanding gold production. However, we are
appreciative of this mine’s contribution to the
overall company and its steady, regular profit
margins.
Lindero: The FSM open-put gold mine in Argentina, Lindero produced (below left) 25,140 oz
gold in 2q23 and that didn’t impress a market that was looking at the last few quarters.
However, it came in as per expected by the company and in the words of the MD&A, production
was…
“…primarily attributed to a decrease in the head grade of mineralized material placed
on the leach pad, but is in line with the planned mining sequence. Mine production for
the quarter was 0.8 million tonnes of mineralized material, with a strip ratio of 2.69:1.
This stripping ratio is consistent with the operation's plan for the year, which anticipates
a ratio of 1.17:1.”
In other words, higher strip rate added to costs while lower head grade on pad affected
production. However, both of those were expected (for example, the slow cycle leach time of
Lindero rock means the mineral placed during one quarter will predicate production two
quarters down the line). As a result AISC rose to U$1,688/oz and crimped margins, but as the
chart (below right) shows we expect costs to drop and indeed, FSM reiterated its guidance on
the year though put costs at the upper end of the guidance, which implies and AISC of around
U$1,500/oz for the next two quarters.
Financially, Lindero added a reasonable net to the corporate of U$6.222m. The chart below left
5
7.63 0.82 1.33 4.42 5.43 1.52 6.43 2.52 1.23 1.62 8.92 3.42 9.43 8.62 4.63 7.52
U$m
50
calc revs
40 real revs
30
20
10
0
3q21 4q21 1q22 2q22 3q22 4q22 1q23 2q23
source: company filings, IKN calcs
U$m Caylloma: Segment post-tax income, per qtr
8
7
6
5
4
3
2
1
0
1q21 2q21 3q21 4q21 1q22 2q22 3q22 4q22 1q23 2q23
source: company filings
Lindero: Gold production & sales, per qtr
53901
79212 42981 95532 98363 91682 64503 46003 74872 21862 04152 00062 00062
40000
35000
30000
25000
20000 15000
10000
5000
0
02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 tse32q3 tse32q4
Oz Au FSM Lindero: AISC per qtr
source: FSM filings, IKN ests
5501 8611 0721 499 8301 1511 9511 1221 4241 8861 0051 0051
1800
1600
1400
1200
1000 800 600
400
200
0
12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 tse32q3 tse32q4
U$/oz
source: company filings, IKN ests

includes the big net loss taken by this subsidiary via the impairment of 4q22, so the same
numbers are presented below right without that column to provide an easier visual
U$m Lindero: Segment post-tax income, per qtr U$m Lindero: Segment post-tax income, per qtr
30 20 (without 4q22 impaired result)
20 18
10 16
0 14
-10
12
-20
10
-30
8
-40
-50 6
-60 4
-70 2
-80 0
1q21 2q21 3q21 4q21 1q22 2q22 3q22 4q22 1q23 2q23 1q21 2q21 3q21 4q21 1q22 2q22 3q22 4q22 1q23 2q23
source: company filings source: company filings
San José: FSM reported that the wildcat strike by workers affected production in Q2 at a bad
time and here we see the biggest miss of all its mines, with main product silver sales of
942,672oz and gold sales of 5,695oz (production shown here, they’re a close enough match).
Typically, silver provides two-thirds of revenues and gold one-third, this quarter was spot on
those percentages.
FSM San José: Gold production, per qtr
As a result of the lost production and a couple of one-time payments for redundancies, San
José returned a net loss on the quarter. However,
we have every reason to believe the company y will
get back to its normal production levels in the
quarters to come and return to profitability. San
José has a chequered history recently with strikes
and blockades by locals and there’s always some
sort of latent risk of further disruption. That
shouldn’t be minimized, but when it’s given and
clear quarter it’s a profitable entity.
FSM warned on guidance for San José and now
expects the mine to miss the lower end of its
production range. We have adjusted our model
accordingly and instead of going with FSM’s low end 5.3m oz silver and 34,000 oz gold, we now
assume a 2023 total production of 5.16m oz silver and 31,500 oz gold.
Yaramoko: Perhaps the most interesting of the mine case studies this quarter, not merely
because of its location in the newly risky Burkina Faso (though being located 200km South
West of the capital and not in the Northern or Eastern hot zones, there is less immediate worry
about the future of this mine compared to IAMGOLD’s Essakane, for example). As mentioned
6
10301 66201
0198
9299
9328 5928 1909 9948 1328
8775
0058 0009
12000
11000 10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 tse32q3 tse32q4
Oz Au FSM San José: Silver prod. & sales, per qtr
2000000
1800000
1600000
1400000
1200000
1000000
800000
600000
400000
200000
0
source: FSM filings, IKN ests
12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 tse32q3 tse32q4
Oz Ag
production
sales
source: FSM filings, IKN ests
U$m San José: Segment post-tax income, per qtr
18
16
14
12
10
8
6
4
2
0
-2
-4
1q21 2q21 3q21 4q21 1q22 2q22 3q22 4q22 1q23 2q23
source: company filings

above in the intro, higher than expected AISC in 2q23 had the market shouting dissent and
added to the asset’s problem past, at first sight it still looks like more of a burden than an asset.
However, a look at the underlying numbers shows we can expect better things from Yaramoko
in the quarters to come. Production came in at 29,002 oz gold while sales were substantially
lower at 25,946oz Au, so as a surprise to many AISC was high at U$1,626/oz, leaving a smaller
margin than expected to the received gold price.
FSM Yaramoko: gold prod & sales, per qtr
As for what’s to come, for 2023 FSM guided production to a range of between 92k and 102k oz
gold and now expects Yaramoko “to achieve the upper end” of that range. In fact, we now
expect the mine to beat and produce around 107k oz gold this year and at the low end of its
guided costs, too. That might sound odd at first after this high AISC, but the key is in its
sustaining capex spending budget. With U$30km already spent in the first half of the year of
its total U$40.7m budgeted capex works, FSM has already done the heavy lifting at Yaramoko
in 2023 and we should therefore see AISC drop. We should also be clear that this expensive
capex project was done to turn the asset around and get it back on track after several
lacklustre quarters which included that large impairment hit at the end of 2022 (we said from
the start FSM overpaid for Roxgold and so it turned out). These charts put that in visual form
and give an idea of the capex spend per quarter (below left) and on a per-ounce basis, (below
right), including our estimates for 3q23 and 4q23.
As you can see, the difference in the quarters to come (that we’ve split 70/30 Q3 to Q4 as a
best guess) means AISC is about to tumble and as a result, we can expect much better things
from the net income out of Yaramoko then in any of these recent quarters (same data each
chart).
7
49472 77092 03592 89542 55072 05262 03592 64952 00062 00062
35000
30000
25000
20000
15000 10000
5000
0
12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 tse32q3 tse32q4
Oz Au production Yaramoko: Realized price vs AISC, per qtr
sales
source: company filings, IKN ests
3871 8811 6971 6341 8781 7411 8681 5651 6171 0361 2471 9281 9981 9051 6791 6261 0591 0051 0591 0541
2200
2000
1800
1600
1400
1200 1000 800 600
400
200
0
12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 tse32q3 tse32q4
realized price
U$/oz Au AISC
source: FSM filings, IKN ests
FSM Yaramoko: Capex spend per qtr
24
22
20
18
16
14
12
10
8 6
4
2
0
12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 tse32q3 tse32q4
U$m FSM Yaramoko: Total capex spend per oz gold sold
brownfields
sustaining capex
source: company filings, IKN ests
982
764
662 963
174
238
994 195
052
111
1000
900
800
700
600
500
400
300
200
100
0
12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 tse32q3 tse32q4
U$/oz
source: company filings, IKN calcs and ests
U$m Yaramoko: Segment post-tax income, per qtr U$m Yaramoko: Segment post-tax income, per qtr
20 16 (without 4q22 impaired result)
14
0 12
10
-20 8
6
-40
4
-60 2
0
-80 -2
-4
-100 -6
1q21 2q21 3q21 4q21 1q22 2q22 3q22 4q22 1q23 2q23 1q21 2q21 3q21 4q21 1q22 2q22 3q22 4q22 1q23 2q23
source: company filings source: company filings

Yaramoko has been a problem child for FSM almost right from the moment it bought Roxgold
out and took over. The company has lost money on the mine and has had to invest heavily to
turn it around, but we’re now at the moment when the fruits of those labours (and the hard
lessons it learned when writing down the asset end last year) begin to show. It also comes at
the time its next mine, that also came in the Roxgold package but is now about to change the
FSM significantly.
Séguéla: The new mine on the block, Séguéla in Côte d’Ivoire saw early non-commercial
production of 4,023 oz gold in 2q23. That’s slightly lower than our original guess but the
important thing was FSM’s confirmation of guidance for the rest of the year:
Oz Au FSM Séguéla: Gold production per qtr
40000
34000
35000
30000
25000 22000
20000
15000
10000
4023
5000
0
1q23 2q23 3q23est 4q23est
source: FSM filings, IKN ests
With FSM reiterating guidance for Séguéla and making the right noises about how its
commissioning and ramping process is going, we’re reasonably confident about plugging the
minimum 60k oz into the 2023 model as seen above (and with plenty more to come in 2024
and beyond, of course).
Consolidated production and sales
With the individual assets considered, it’s time to put that all together and we start with
production and sales and even though Fortuna Silver has that metal’s name in its corporate title
and even though it also produces and sells zinc, lead and even a little copper, the most
important metal by far at the company these days is gold and that will be our focus. Not only
does gold now provide around 70% of revenues,, but that’s set to move up to around 77%
once Séguéla is fully functional next year.
First we check out the quarterly numbers and 2q23 of 64,348oz looks in line with previous
quarters. However, sales were lower at just over 56,000oz and there lies one of the main
reasons for the apparently soft quarter. As for the 3q23 and 4q23 forecasts, they are now
slightly lower compared to our estimates as seen in IKN738 and as seen below, that lowers our
forecast revenues as well.
FSM: Consolidated gold production
8
0369 4566 52411 03532 33623 35213
26356
58067
76866 24126 35266 09936 29006 84346
00628
00159
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 tse32q3 tse32q4
Oz Au
source: FSM data, IKN ests
Here’s how the quarters break down by mine. The difference between production and sales
comes from the Yaramoko mine selling less than it produced, plus the 4k oz from Séguéla that
raised revenues but didn’t feature on the sales data as the mine is still pre-commercial.
However, the important change happens by the end of the year when FSM should be producing
gold at a consolidated rate closing in on 100,000oz per quarter.

FSM: Consolidated gold production by qtr
110000
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
9
02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 tse32q3 tse32q4
Oz Au
Caylloma
Séguéla
Yaramoko
Lindero
San Jose
source: FSM data, IKN ests for 3q24/4q24
We’ll check on silver quarters before moving on and here we see the big dip caused by the low
production out of San José in Q2:
FSM Consolidated silver sales, by qtr
2200000
2000000
1800000
1600000
1400000
1200000
1000000
800000
600000
400000
200000
0
02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 tse32q3 tse32q4
Oz Ag Caylloma
San José
source: FSM data, IKN ests
On an annual basis, our guidance for 2024 and 2025 remains unchanged for silver, but we have
cut the 2023 estimates in line with the new company guidance for San José:
Oz Ag FSM: Consolidated silver sales + forecasts Caylloma
10
San José
9
8
7
6
5
4
3
2
1
0
2019 2020 2021 2022 2023 2024 2025
source: FSM data, IKN calcs and ests for FY23-25
Meanwhile, the big changes in the production mix for FSM are still expected to happen via gold,
with Séguéla first company on line that moving to full production, plus a Yaramoko that should
benefit from the capex works of the last four quarters and start producing at the rate originally
expected of it when FSM made the purchase in 2021.
Oz Au FSM: Consolidated gold production, annual + forecasts
450000
400000 Caylloma
350000 Séguéla
Yaramoko
300000
Lindero
250000 San Jose
200000
150000
100000
50000
0
2019 2020 2021 2022 2023e 2024e 2025e
source: FSM data, IKN calcs and ests for FY23-25

The financials: So much for the metals by ounce, we now consider how that turns into cash but
before we project on what to expect from future quarters as production expands, we check on
the main balance sheet items to show that FSM is in good financial shape and not showing any
signs of strain, even as it completes its Séguéla while reporting a soft quarter. We last featured
these charts in IKN738 but in that edition, we looked far back into the company’s history to
show how FSM had changed over the years and become the large entity we see in 2023. That’s
part of the overall buy thesis (put simply, at some point the Empire Building stops and the
company harvests the financial results) but for our purposes today, we focus on the most
recent years to provide a more straightforward check-up on the FSM financial health:
Assets and liabilities look like this, with the debt added to fund the recent build outs and buiold
repairs higher than before, but still well under control and a fraction of the asset value, even
after those recent write-downs at Lindero and Yaramoko.
FSM: Liabilities Breakdown per qtr
800
700
600
500
400
300
200
100
0
More importantly for our trade thesis, FSM enjoys a reasonable cash treasury (U$93m as at end
2q23 and plenty of positive working capital (below right), no problem with liquidity here. Finally
we check on shares out and with the pending purchase of Chesser expected to close next
month, we now expect FSM to have 307m shares out by the end of this quarter. As the stock
closed at U$3.00 on Friday, that makes the math easy and sees FSM with a market cap of
U$921m this weekend. With book value at U$1.305Bn as at end 2q23, there’s plenty of room
for equity to move up if its assets begin to show true profitability.
With the balance sheet items checked and passed, we move to the business end of the
financials and consider what we can expect from revenues, margins and profits in the quarters
to come (the whole reason we’re keen on this trade today). We begin with the tracking chart
for gross metals value, per quarter to end 2023:
10
02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2
FSM: Assets Breakdown per qtr U$m
2200
2000 LT liab
1800 current liab
1600
1400
1200
1000
800
600
400
200
0
source: company filings
02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2
U$m
fixed
other current
cash&ST
source: company filings
FSM: Working Capital per qtr
36.151
997.37 586.15
11.11-
13.411 9.551 35.061 1.121 36.711 16.521 53.631
200
180
160
140
120
100 80
60
40
20
0
-20
02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2
source company filings
srallod
fo
snoillim
FSM: Shares Out
2.481 1.581 3.581
5.192 5.192 9.192 4.192 2.092 2.092 4.092 4.192 0.703 0.703
350
300
250
200
150
100
50
0
02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 tse32q3 tse32q4
source: company filings
serahs
fo snoillim

FSM: Gross sales breakdown by metal, per qtr
300
250
200
150
100
50
0
11
81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 tse32q3 tse32q4
U$m
Zn sales
Pb sales
Au sales
Ag sales
source: FSM filings
This is the key period for our trade. We could go on to forecast revenues for quarters in 2024
and on an annual basis as well, but our trade thesis is that by the time 4q23 comes along, the
cat will be well and truly out the bag and the world will realize how much and how quickly FSM
has turned its bad quarters into good and how it has turned itself from a silver miner into a gold
miner. By 4q23, we forecast 77.3% of gross proceeds at the company to come from gold sales.
Those gross sales figures are then adjusted (for middlemen fees etc) and in the case of the
recent 2q23, we subtract the preliminary gold sales from Séguéla (as they don’t make top line
revenues yet, instead the non-commercial sales offset expenses). As a result, we expect sales
of around U$210m in 3q23 to greatly improve on the U$158.4m reported for 2q23 last week:
FSM: Quarterly Earnings overview
8.711
5.66
3.15 5.021
1.27
5.84 6.261 2.511 3.74 9.891 6.041 3.85 3.281 8.811 5.36 9.761 3.531 5.23 6.661 9.141 7.42 7.461 7.831 0.62 7.571 2.531 4.04 4.851 5.621 9.13 0.012 0.561 0.54
0.042
0.571 0.56
300
275
250
225
200
175
150
125 100 75
50
25
0
12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 tse32q3 tse32q4
U$m
revenues COGS Mine Op. Inc
source: company filings
For 3q23, mine operating income should improve slightly but as Séguéla will still be at fledgling
stage, we don’t get to see its full financial effect until it gets closer to full operational capacity
by 4q23. At that point, mine operating earnings are forecast at around U$65m (below left), a
clear improvement on recent quarters. On a per-share basis (below right) that’s around 21c and
a forward price/operating earning ratio of just over 3.5X this weekend.
FSM: Mine Operating Income/share, per qtr
If there’s one chart I’d point out in order to encapsulate the opportunity afforded by FSM this
weekend and at this current price, it’s the one above and to your right. That 21c/sahre of
82.0 62.0
61.0
02.0 22.0
11.0 90.0 90.0 41.0 11.0 51.0
12.0
0.30
0.25
0.20
0.15
0.10 0.05
0.00
12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 tse32q3 tse32q4
FSM: Mine Operating Income per qtr U$/share
80
70
60
50
40
30
20 10
0
source: company filings, IKN calcs
12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 tse32q3 tse32q4
U$m
source: FVI filings

operating earnings per quarter is for 4q23, but that should repeat and improve through 2024
and beyond and all this at the current metals prices of U$1,950/oz gold (along with U$23/oz
silver. As we forecast FSM to become a 400,000 oz gold producer by the time 2024 is
underway, or a 500,000 oz AuEq if you add in the silver and other metals, any rise in the gold
price becomes large levels of cash flow that run straight through its books and on to the bottom
line.
Discussion and conclusion: Over two analyses in IKN738 and today, we’ve tried to illustrate
the deep value currently offered by shares in Fortuna Silver (FVI.to) (FSM), stock that is being
priced on its current and recent past of interrupted performance and lower levels of production.
The market continues to ignore the big changes about to run through its production mix and
did so again last week, preferring to price down the company on an lacklustre quarter that
wasn’t too difficult to predict (our mine operating earnings forecast for 2q23 was U$29m, the
reality waas U$31m) but was still greeted with disdain by a market that didn’t seem to reads
any further the the NR bullet points. Instead and by valuing the company on what it’s about to
do in the future, rather than looking backward to its spotty 1q23 and 2q23 results, we’re
offered a gilt-edged opportunity to get on board a stock at a deeply discounted price, one that
won’t last long once the headline-readers see the improvement in numbers we expect from FSM
in Q3 and Q4, let alone 2024.
This is a great price, it’s the clear window of opportunity on a what’s about to be a 500k oz gold
eq stock selling at under a billion, one that’s been doing the heavy lifting to bring its assets up
to scratch and getting zero reward for its efforts so far. That’s about to change between now
and 2024 and I am going to make sure I own shares before the move and the re-rating
happens. Buying and adding to the Stocks to Follow list as from next weekend, my only issue is
working out how to afford the amount of shares I want to buy.
Stocks to Follow
Another quiet week on the junior market. Of the 20 stocks currently featured on our list, seven
were week-on-week winners (MAI.v, FDY.to, CTGO, ABRA.v, ALDE.v, MIRL.cse, RUG.v), three
were unchanged (QCCU.v, RIO.v, LBC.v) and ten were losers (ARG.to, SOLG.to, EQX, NCAU.v,
OCI.v, WEX.v, MARI.to, LMS.v, SURG.v, MENE.v). The biggest winner was Minera IRL (MIRL.cse
up 66.7%) again, but the cash amounts are still tiny and the trades are painted to within an
inch of their lives (see below). AbraSilver (ABRA.v up 10.7%) also did well. To the downside,
the biggest losers came from the Orecap (OCI.v down 14.3%), the still disappointing Western
Exploration (WEX.v down 13.3%) and Newcore (NCAU.v down 10.0%), which also sucked.
There are 20 stocks in our table, the self-imposed maximum number and I need to do
something about that to fir in the crazily cheap Fortuna Silver (FSM) by this time next weekend.
Six of the stocks are in the green and one is unchanged on its cost average, the rest suck.
12

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$0.315 50.0% $0.75 first tgt, #1 idea
RECOMMENDED STOCKS
Amerigo Res ARG.to STR BUY C$1.36 12-Dec-21 C$1.51 11.0% Main Cu trade, top fundies
SolGold SOLG.to STR BUY C$0.265 19-Feb-23 C$0.255 -3.8% Cu in Ecuador, M&A tgt
QC Copper&Gold QCCU.v BUY C$0.265 25-Apr-21 C$0.165 -39.6% delayed MRE now due end Q3
Equinox Gold EQX SPEC BUY U$4.46 30-May-23 U$4.94 10.8% Au leverage trade, trading well
Faraday Copper FDY.to BUY C$0.79 26-Mar-23 C$0.83 5.1% USA based Cu exploreco
Contango Ore CTGO BUY U$18.70 30-Jul-23 U$18.51 -1.0% new purchase IKN741
AbraSilver Res. ABRA.v BUY C$0.36 4-Dec-22 C$0.31 -13.9% added for last time Mar'23
Newcore Gold NCAU.v SPEC BUY C$0.205 23-Oct-22 C$0.135 -34.1% Financing closed, bottom in
Rio2 Ltd. RIO.v BUY C$0.83 22-Apr-18 C$0.25 -69.9% Cheap on permit probs, appeal
SPECULATIVE TRADES
Orecap inv OCI.v SPEC BUY C$0.04 20-Nov-22 C$0.03 -25.0% corp revamp, new strategy
Western Explor. WEX.v SPEC BUY C$1.87 9-Apr-23 C$1.04 -44.4% Au spec in USA, started badly
Aldebaran Res. ALDE.v SPEC BUY C$0.72 16-May-21 C$0.91 26.4% now in drill assay season
Minera IRL MIRL.cse avoid C$0.195 22-Jul-12 C$0.025 -87.2% run into ground byCEO, AVOID
A WATCHLIST OF POTENTIAL TRADES. NB: I DO NOT OWN
Marimaca Copper MARI.to WATCH C$3.65 26-May-23 C$4.15 13.7% Likely buy, want cheap entry
Latin Metals LMS.v WATCH C$0.15 11-Sep-22 C$0.11 -26.7% Peru&Arg prospect generator
Surge Copper SURG.v WATCH C$0.11 18-Jun-23 C$0.11 0.0% tinycap Cu in BC Canada
Libero Copper LBC.v WATCH C$0.065 2-Jul-23 C$0.045 -30.8% Watching for Arg drill permit
Rugby Resources RUG.v WATCH C$0.06 26-Mar-23 C$0.06 0.0% tinycap Cu in Colombia
LONG-TERM NON-MINING HOLD
Mene Inc. MENE.v adding C$0.63 6-Dec-20 C$0.39 -38.1% LT bet, adding slowly
CLOSED TRADES IN 2023 date closed close price
Altiplano Metals APN.v jan'23 C$0.31 17-Sep-21 C$0.17 -45.2% delayed and will dilute soon
Western Copper WRN.to mar'23 C$2.02 13-Nov-22 C$2.32 14.9% sold on reduced M&A prob.
Chesapeake Gold CKG.v may'23 C$3.07 20-Feb-22 C$1.75 -43.0% Closing on legal action news
Amerigo Res ARG.to may'23 C$1.36 12-Dec-21 C$1.48 8.8% sold 20% to raise cash
2015 to 2022 annual closed positions in appendices below, 2009 to 2014 closed positions in editions IKN553 or earlier
Now for very brief note one a coupe of the covered companies:
AbraSilver (ABRA.v): I’m taking a rain check on the ABRA drill results of last week, even
though they managed to do something that a list of assays before have failed to do and moved
the stock higher. Expect a better note next weekend on ABRA
Minera IRL (MIRL.cse): We got the July 2023 gold sales data from MIRL last week and they
shipped 1,934oz, a big improvement on the previous disaster months of 2023 to date.
MIRL: 2022/23 Corihuarmi gold shipments, per month
13
8981 3191 6521 6521
3782
0211 1691 5502 0911 8271 3212 0951 7971
439
1321 3461 9551
748
4391
4500
4000
3500
3000
2500
2000
1500
1000
500
0
22naj bef ram rpa yam nuj luj gua pes tco von ced 32naj bef ram rpa yam nuj luj
Oz Au
contained oz
shipments
source: MIRL filings

It would be nice to think that the continued rally from the recent 0.5c to this weekend’s 2.5c
price was due to the market reacting to the July
production improvement, but that’s highly unlikely.
Firstly because this company is already basically
bankrupt and there’s nothing Corihuarmi can do
about it, second you only have to take one look a
the way the share price was painted into the
weekend on nothingburger volumes (those 1,000
share trades are for 420 each) to know that the
market for MIRL today is as legit as a seven dollar
bill. As with everything else touched by this
management team, highly suspicious. Avoid.
Western Exploration (WEX.v): I thought the
selling and price slide had been staunched at
around the $1.20 to $1.30 level, but I was sadly
mistaken and WEX only made things worse last
week. As such, there’s no alternative now but to
demote the stock and put it into the “speculative”
section until such time as the news flow from the
drilling begins and we see whether it can react. This
trade may be only small, but it’s becoming a real
drag on the portfolio and slightly embarrassing to
own. I’ll stick with it until the company offers up
real news, then it will be time to make a call.
The Copper Basket
After thirty-two weeks of 2023, The Copper Basket shows a loss of 3.37% to level stakes:
company ticker price 1/1/23 Shares out Market Cap current pps gain/loss%
1 Solaris Res SLS.to 6.44 146.599 930.90 6.35 -1.4%
2 Marimaca Cop MARI.to 3.22 92.882 385.46 4.15 28.9%
3 Western Copper WRN.to 2.41 151.597 294.10 1.94 -19.5%
4 Arizona Sonoran ASCU.to 1.92 105.96 179.07 1.69 -12.0%
5 Aldebaran Res. ALDE.v 0.78 172.551 157.02 0.91 16.7%
6 Hot Chili HCH.v 0.78 119.455 155.29 1.30 66.7%
7 Oroco Res OCO.v 0.91 213.438 147.27 0.69 -24.2%
8 Faraday Copper FDY.to 0.54 175.2 145.42 0.83 53.7%
9 Regulus Res. REG.v 1.10 124.509 109.57 0.88 -20.0%
10 Pan Global Res PGZ.v 0.46 212.145 62.58 0.295 -35.9%
11 Kodiak Copper KDK.v 1.12 56.2 44.40 0.79 -29.5%
12 QC Copper QCCU.v 0.165 162.815 26.86 0.165 0.0%
13 Element 29 Res ECU.v 0.16 86.966 15.22 0.18 9.4%
14 Libero Copper LBC.v 0.155 93.869 4.22 0.045 -71.0%
15 Atacama Copper ACOP.v 0.16 35.94 5.03 0.14 -12.5%
NB: All stocks in CAD$ Portfolio avg -3.37%
Still no reason to get excited about a market in its summer hiatus, but to its credit our Copper
Basket managed to claw back just over one percent on its overall average despite the weakness
14

in copper metal prices. That’s not bad. We saw seven weekly winners (WRN.to, ALDE.v, REG.v,
FDY.to, KDK.v, ECU.v, ACOP.v), four unchanged
stocks (ASCU.to, PGZ.v, QCCU.v, LBC.v) and 12% The Copper Basket 2023, weekly evolution
10%
four losers (SLS.to, MARI.to, OCO.v, PGZ.v) and
8%
overall, most of the moves were small, with just 6%
4%
a penny or a percentage point (or two) in either
2%
direction. The only big outlier was a 9.4% 0%
-2%
added to Element 29 (ECU.v) but even then,
-4%
that stock was rebounding from the beating it -6%
-8%
took the week before on low-ish volumes. -10%
He list held up despite the drop in copper the
metal, down sharply and breaking the recent
sequence of higher lows that started in late May and had built into tthat constructive price
channel we’d commented on in a couple of recent editions.
The reason? Why, ChinaFears! of course. There’s no better way of taking the steam out of Dr.
Copper and the hard commodities that follow his lead that pointing to weak economic data from
the consumer of 55% of the world’s copper every year. This Reuters note gives us the
suited’n’booted quote (2):
Investors unloaded industrial metals on Tuesday after data showed China’s imports
and exports fell much faster than expected in July, threatening growth prospects in the
world’s second-largest economy.
“With the trade data worse than expected, risk aversion has returned, so metals are
surrendering the gains we had a bit earlier,” said Amelia Xiao Fu, head of commodity
market strategy at Bank of China International in London.
Ironically, the contraction of both imports and exports saw China’s balanced of payments
surplus improve by almost U$10Bn in July compared to June, but only because July is
traditionally a more active month. Chinese exports dropped by 14.5% (forecast 12.5%) and
imports dropped by a sharp 12.4% compared to the consensus estimate of 5%...which
probably means those estimating didn’t have much of a clue. That was Wednesday and the
start of the selling, which was pushed further when China’s CPI inflation reading came in at
negative 0.3%, suggesting economic contraction was now in-play.
But copper and other metals stopped their selling on Friday when the latest “China Gonna
Stimulus” talk did the rounds of trading desks, along with data to show rising output in Chinese
steelmakers, which bucked the trend of negatives in the metals world. And this is where we find
ourselves today, again in the battle between apparently weaken economic data in the rear view
mirror and the return of the economic stimulus that would wipe out losses in an instant if
confirmed or announced by the People’s Republic politburo. Indeed, it’s not a difficult logical
leap to assume that more weak data from China would increase the chances of Xi and his
friends getting Keynesian on China’s macro economy. As for my two cents on this, the fact that
we’re also in August and an obviously quietened market isn’t helping matters on this side of the
15
ts1naJ ht8naJ ht51 dn22 ht92 ht5bef ht21 ht91 ht62 ht5raM ht21 ht91 ht62 dn2rpA ht9 ht61 dr32 ht03 ht7yam ht41 ts12 ht82 ht4nuj ht11 ht81 ht52 dn2yluj ht9 ht61 dr32 ht03 ht6gua ht31
source: IKN calcs

trade and the feeling I’ve picked up from the tape and the market chatter is that of a market
that’s caring too much about weak signals. For example, the one we get from our next section,
our regular weekly review of copper inventories with data supplied by Chile’s Cochilco:
 To adapt the Green Day song slightly, wake me up when August ends. We had another
week of quiet action in the world of copper and that was reflected by the small moves
we see here. The aggregate copper in the world’s three official stocks systems rose by
6,487 metric tonnes (mt) last week to close Friday at 177,460mt, which means we’ve
seen two weeks of small additions but it’s no big deal.
 The Shanghai SHFE added 763mt for a total of 52,915mt. No biggie.
 The only move of any size was the 5,575mt added to LME copper stocks, with Friday’s
inventory close at 84,900mt. However 1) cancelled warrants stay minuscule at 350mt
denoting the general ennui and 2) a full 3,825mt of that 5,575mt total was stock added
to LME New Orleans and as we’ve pointed out previously, that’s a long way from the
copper action or where price is discovered. You could argue that 20k of copper added
in the last two weeks to LME stocks is a clear bearish signal, but at best this time of
year it’s weak signal and with the details of where the movements happened inside the
LME system, it’s even weaker.
 Comex added a very thin 149mt to close the week at 39,645mt. Again, no biggie.
The dedicated SHFE charts show no real change to the established patterns and, combined with
the quiet Northern summer market, underscores the weak signal.
Shanghai Futures Exchange Warehouse Stocks, 2014 to date
400000
350000
300000
250000
200000
150000
100000
50000
0
16
31'13ceD dr32 ht51 ht7 ht03 dn22 ht71 ht9 ts1von ht42 ht71 ht01 dn2tcO 7102ts1naJ ht62 ht81 ht01 dr3ced ht52 102ht72rpa ht91 ht11 9102
dr3bef
102ht82rpa ts12 ht31 0202ht5naj 202ht92ram ts12 ht31 0202ht6ced ht82 dr32 ht51 ht7 202ht03naj ht42 ht71 ht9 3202
naJ
ht62 ht81
Mt Cu
|
source: Cochilco
SHFE copper inventory levels, 2018 to 2023
400000
350000
300000
250000
200000
150000
100000
50000
0
1 2 3 4 5 6 7 8 9 01 11 21 31 41 51 61 71 81 91 02 12 22 32 42 52 62 72 82 92 03 13 23 33 43 53 63 73 83 93 04 14 24 34 44 54 64 74 84 94 05 15 25
MT Cu 2023
2022
2021
2020
2019
2018
source: Cochilco data
No notes on basket stocks this week, nothing much to report outside of the stocks in the main
list.
The Producer Basket
After 32 weeks of 2023, the Producer Basket shows a gain of 1.91% to level stakes:

company ticker price 1/1/23 Shares out MktCap(U$Bn) current pps gain/loss%
1 Newmont NEM 47.20 799 32.11 40.19 -14.9%
2 Barrick GOLD 17.18 1761.54 29.79 16.91 -1.6%
3 Agnico Eagle AEM 51.99 488.9 23.98 49.05 -5.7%
4 Wheaton PM WPM 39.08 451.963 20.45 45.25 15.8%
5 Kinross Gold KGC 4.09 1256.1 6.38 5.08 24.2%
6 Alamos Gold AGI 10.11 393.1 4.59 11.67 15.4%
7 B2Gold BTG 3.57 1074.567 3.36 3.13 -12.3%
8 Hecla Mining GFI 5.56 610.491 2.93 4.80 -13.7%
9 Eldorado Gold EGO 8.36 185.73 1.70 9.16 9.6%
10 Wesdome Gold WDOFF 5.53 147.526 0.83 5.65 2.2%
All prices and stock quotes in U$ Port. avg 1.91%
Our basket of ten stocks did better than the precious metals miners in general, over a week in
which GDX dropped 0.3% and GDXJ was down 0.4%. Our list improved by 0.68% thanks to
five winners (GOLD, AEM, WPM, KGC, WDOFF) beating out four losers (NEM, BTG, HL, EGO),
with one Alamos Gold (AGI) unchanged to the penny. It would have been even better if we
hadn’t had so much exposure to silver via Hecla (HL down 8.6%), though the very good week
enjoyed by Wesdome (WDOFF up 9.7%) made up for that.
The 2023 Producer Basket: Weekly performance and
comparative to GDX control
30%
25%
20%
15%
10%
5%
0%
-5%
-10%
We’re still lagging the GDX benchmark and have been since the very first week of the year, but
the gap got reduced considerably last week. Our equal weighted list is favoured by a rising gold
price and that wouldn’t be a bad thing to see for many reasons, this little race would be on of
the least important.
Wesdome Gold (WDO.to) (WDOFF): Here’s the ten-day chart of the main Canadian listing
for Wesdome (WDO.to) set against the GDX benchmark. Last week in IKN743 we’d noticed
what looked like stealth accumulation in the stock and some relative strength in the stock, that
shows in this chart and continued last week through to Friday, when the stock took off and
moved up by a cool 12.84% on the day on heavy volume. The reason was the 2q23 financials
reported the night before (3) that, along with the ConfCall the next day, told the market what it
wanted to hear about the stock going forward. The two main positives and catalysts for the
rebound were mentioned on several occasions in NR, CC and MD&A, but as they’re both
contained in the second part of the CEO comments from newly installed CEO Anthea Bath, let’s
use that and be done:
“Finally, after a careful and deliberate review of our preliminary operating and financial
plans, we have greater confidence in the near-term grade profile at Kiena and,
therefore, anticipate a production and free cash flow rebound next year. Combined with
an improved liquidity position, backstopped by the strength of our credit facility, we now
believe that equity issuance under the ATM facility is no longer required. As Wesdome
turns a corner late this year, we will remain committed to reducing borrowings under
our $150 million credit facility as well as advancing and optimizing our high-quality
portfolio.”
17
ts1naJ ht8naJ ht51 dn22 ht92 ht5bef ht21 ht91 ht62 ht5raM ht21 ht91 ht62 dn2rpA ht9 ht61 dr32 ht03 ht7yam ht41 ts12 ht82 ht4nuj ht11 ht81 ht52 dn2yluj ht9 ht61 dr32 ht03 ht6gua ht31
The 2023 Producer Basket: Percentage difference
between GDX benchmark & basket (negative = IKN ahead)
4.0%
ikn 3.5%
gdx control 3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
source: NYSE, IKN calcs ts1naJ ht8naJ ht51 dn22 ht92 ht5bef ht21 ht91 ht62 ht5raM ht21 ht91 ht62 dn2rpA ht9 ht61 dr32 ht03 ht7yam ht41 ts12 ht82 ht4nuj ht11 ht81 ht52 dn2yluj ht9 ht61 dr32 ht03 ht6gua ht31
source: IKN calcs, NYSE data

In other words:
 Kiena is on schedule and will be ready to deliver the high-grade material from the
deep zones as from the start of 2024.
 The company believes it has its financials back in shape to the extent that it no
longer needs the outstanding share shares available via its ATM facility.
And it’s a good job WDO could deliver good news about those major sticking points, because
the numbers from 2q23 really weren’t that inspiring. Sales were pre-disclosed, but P+L costs
were up and at a total of nearly C$91m, left an operating loss of C$6.417m:
WDO.to: Operations overview chart
18
845.76
636.93
219.72 505.58
82.75
522.82
496.66
111.15
385.51 139.16 253.06
975.1
328.16 283.56
955.3-
540.57
233.76
317.7
107.67 222.96
974.7
555.48 279.09
714.6-
C$m
100
revenues
90 total op expenses
80 Op earnings
70
60
50
40
30
20
10
0
-10 source: company filings, IKN calcs
3q21 4q21 1q22 2q22 3q22 4q22 1q23 2q23
However, a chunky C$28.215m of those costs were in non-cash DD&A, so that left WDO with
the cash margin it needs to go about the completion of Kiena, remain solvent and pay down
liabilities in good order:
WDO.to: Costs overview
100
90
80
70
60
50
40
30
20
10
0
91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2
CAD$m
mining processing costs depletion
G&A other expenses
Source: WDO.to filings, IKN calcs
Here are the assets and liabilities overview charts and in this case, we most care about the
negative side of the ledger. Of the $24m and bits cut from liabilities, over $20m came from
current liabilities and that counters the overall drop in current assets.
WDO.to: Assets
650
600
550
500 450
400
350
300
250
200
150
100
50
0
Cash remained reasonably constant and it’s probably this metric that CEO Bath, who comes
from the financial side of the business (recently CFO at Ero Copper), is probably looking at
91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2
$m 240 WDO.to: Liabilities Breakdown per qtr
220
fixed 200
other current 180 cash 160
140
120
100
80
60
40
20
0
source: WDO.to filings
91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2
source: company filings
srallod
fo
snoillim
long term
current

when she decided to announce the closedown of the ATM facility. The overall working cap of
C$-2.914m is in-line with our previous forecast of zero for this quarter, so we keep our 3q23
guesstimate of C$+10m in place as well.
Final chart today, the good news from the share count and just for fun, this chart goes further
back in time to show how WDO as an entity has always been keen on keeping its share count
tight. The recent share sales into the market have moved the count up slightly, but by nowhere
near as much as we’d forecast and the 148.95m as at end 2q23 compares to our original guess
of 160m at this point in time and up to 168m by the end of 2023.
WDO.to: Shares Out
19
75.231 68.331 98.331 98.331 12.431 13.431 57.431 20.531 3.631 97.631 22.731 99.731 54.831 54.831 80.931 13.931 76.931 30.041 88.041 36.141 24.241 94.241 94.241 80.441
35.741 59.841
941
200
180
160
140
120
100
80
60
40
20
0
71q1 71q2 71q3 71q4 81q1 81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 tse32q3
source: company filings/IKN ests
serahs
fo
snoillim
WDO.to: Cash treasury per qtr
This, above all, is the news that saw WDO rally on Friday morning as it removed the near-term
stop on price appreciation. WDO isn’t out of the woods yet and its 3q23 isn’t going to sparkle
on production, as Kiena continues to process lower grades and Eagle River takes in its
scheduled annual two week production suspension
for care and maintenance matters. It still needs to
deliver on Kiena as well, but assuming it does the
worst of the trough now seems behind the
company and its stock price.
Am I a buyer? Possibly. WDO lags peers over the
last year and to play full catch-up to GDX would
need to return to a C$10 share price, or around
U$7.40 for the US listed that we t}rack here.
That’s around 31% higher than our price range
today and if that’s enough for you, then you might
want to consider jumping in now. I’m leaning
more toward getting what’s likely to be a weak
3q23 of results out the way and that will be in November, which puts us in touching distance of
Christmas and a traditional soft period for Canadian listed mining stocks. Therefore, the window
I’m looking at is the weeks around or even after Christmas day if we also know the Kiena Deeps
project remains on its revised schedule.
893.94 337.66 315.37 84.36 488.36 997.76 374.96 467.65 274.25
615.32 147.42
581.33
60.52 760.22
80
70
60
50
40 30
20
10
0
02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2
source: company filings
DAC
fo snoillim
80 WDO.to: Working Capital per qtr
70
60
50
40
30
20 10 0
-10
-20
-30
-40
-50
02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 tse32q3
source company filings
srallod
fo snoillim

The TinyCaps List
After 32 weeks of 2023, the TinyCaps show a gain of 17.82% to level stakes:
company ticker price 1/1/23 Shares out Mkt Cap current pps gain/loss%
Aurelius Min AUL.v 0.07 49.787 1.00 0.02 -71.4%
Coast Copper COCO.v 0.045 64.001 2.88 0.05 0.0%
District Metals DMX.v 0.075 86.891 13.90 0.16 113.3%
Latin Metals LMS.v 0.13 69.962 7.70 0.11 -11.5%
Manitou Gold MTU.v 0.02 344.568 18.95 0.055 175.0%
Nine Mile Metals NINE.cse 0.29 57.025 8.27 0.145 -50.0%
Palamina Corp PA.v 0.08 65.285 8.49 0.13 81.3%
Precipitate Gold PRG.v 0.075 130.367 8.47 0.065 -13.3%
South Star STS.v 0.55 40.129 19.46 0.485 -9.1%
Viva Gold VAU.v 0.14 106.721 13.34 0.125 -10.7%
Prices in CAD$, data from TSXV basket avg 17.82%
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 2023. 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.
TinyCaps, 2023 weekly tracker
50%
The TinyCaps list basket average dropped just over 2% 45%
on the week, product of the five losers (LMS.v, PA.v, 40%
35%
PRG.v, STS.v, VAU.v) versus just two winners (DMX.v,
30%
NINE.cse), with three others unchanged (AUL.v, 25%
20%
COCO.v, MTU.v). The biggest move to the upside was
15%
from Nine Mile Metals (NINE.cse up 20.8%) as it tries to 10%
5%
show that a soufflé can indeed rise twice, the biggest
0%
downer was Precipitate (PRG.v down 13.3%), but
effectively that was only a penny.
Precipitate Gold (PRG.v): We got a late Friday NR from PRG with the title line, “Precipitate
Terminates Option to Acquire Motherlode Project, Newfoundland” and that sounds like typical
late Friday NR fare to me. In it, we hear that aside a small land holding on which PRG is not
going to do any further work, it has handed back on the project it picked up at the time
Newfoundland became the hot new place for explorecos, a couple of years ago. The NR has
more on the details and reasoning, this quote is enough for us here:
“Upon further evaluation of the data, management has determined the project no
longer meets the Company’s threshold for ongoing expenditures.”
This means PRG is left with its Dominican Republic projects of yore and doesn’t seem to be in a
hurry to do anything outside of the Barrick JV work.
South Star Battery Metals (STS.v): As seen above and PRG, the typical late Friday NR
carries negative news for a company. But there are exceptions to prove the rule and there’s
little doubt about the most interesting newsflow from companies on our list this week, in fact
I’d argue that the Friday post-close NR from STS was the week’s most interesting NR from any
tinycapper listed in Canada. Friday post-bell STS announced (4) the sale of 7,373,884 units
20
ts1naJ ht8naJ ht51 dn22 ht92 ht5bef ht21 ht91 ht62 ht5raM ht21 ht91 ht62 dn2rpA ht9 ht61 dr32 ht03 ht7yam ht41 ts12 ht82 ht4nuj ht11 ht81 ht52 dn2yluj ht9 ht61 dr32 ht03 ht6gua ht31
source: IKN calcs, TSX data

priced at C$0.53 (unit = share + full warrant priced at $1.25 with a five year shelf life) to one
buyer, namely Fitpart Fund Administration Services Ltd, to raise C$3.91m. This deal gives
Fitpart 17.63% of shares out and 29.97% of fully diluted shares.
That’s the news and now for the background, as the funding office is a Bahamas registered
arm of the well-established financing house Fitpart. Its founders/principals/investors are
Brazilians, with around 28 years of experience in financial
and capital markets, and though they didn’t start in the
natural resources sector, they’ve seen significant success
in seeding natural resources projects. For example, they
are 5% holders of Sigma Lithium (SGML), owners and
operators of the Grota do Cirilo lithium mine in Brazil and
as this price chart of SGML shows (right), Fitpart has done
very well out of the deal. Therefore, seeing Fitpart move in
and take this large chunk of STS, a company with its
flagship project in Brazil, at this price and with the
company on the cusp of first production, looks particularly
bullish to this desk.
NB: Please be clear that The Tiny Dogs is NOT a list of recommended tinycap stocks. It is a list of companies with
market caps of under $20m offering a reasonable representation of the wider tinycaps market. It’s possible in the future
I may buy shares in one or several of these stocks, at the moment both my opinion and wallet are strictly neutral.
Regional politics
Argentina: PASO preliminary results
As previewed last week in IKN742, the PASO “primaries style” election in Argentina today is a
major political event that will go a long way to revealing who is likely to be the next President
of the country when the Presidential vote happens in October (with virtually certain run-off in
November. For the deeper LatAm political watchers there are a mountain of repercussions to
consider from today’s PAS!O, but here we’re going to stick to the two main issues:
1) Who will go forward to the the Juntos Por El Cambio (JxC) (Together for Change)
candidate, the orthodox right wing party of ex-President Mauricio Macri.
2) The way the PASO vote is split between the three biggest party groups, that of
government (Sergio Massa candidate), Orthodox right wing (Macri’s party) and the
independent candidacy of Javier Milei, who is variously described as libertarian, hard-
right wing and populist. As PASO is obligatory for (nearly) all voters in Argentina, this
makes it the biggest and most accurate voter intention survey one could imagine for
the big vote later.
The full and final results will take a couple of days and for the Argentina political-watchers,
there are several other key races that will be influenced by today’s results (e.g. the important
race for the governor of Buenos Aires Province), but this evening we know these three things
about the main event:
1) Patricia Bullrich has beaten Horacio Larreta in the JxC internal race and will move
forward as the party alliance candidate for President. The early results numbers are likely to
change a little, but with 94% of the fast count done Bullrich has received 17% of the overall
votes with Larreta on around 11.3%. More importantly, Larreta quickly contacted Bullrich to
congratulate her on the victory and in the party meeting tonight, vowed to help her win the big
prize as part of the team. With 28.3% of votes, the orthodox right wing is likely to make the
second round run-off against…
2) Javier Milei is the popular vote winner. The Libertarian independent candidate has
received the most votes of any single candidate, with results indicating he’ll end with around
30.3% of votes cast. With turnout low at 69% and 16 or 24 provinces making him the winner of
the popular vote, tonight talk is of voters punishing the traditional parties by voting en masse
21

for the outsider who has vowed to bring big changes to the country’s political and economic
systems.
3) Sergio Massa is tonight’s big loser, along with the current government. The government
has polled around 27% of the popular vote, but that’s not enough and Massa will have an uphill
struggle to make the run-off. Argentina
Overall voting indicates that we’re going to get a any-two-from-three second round run off in
October, but the frontrunners are now Milei and Bullrich, with Massa needing to make up
ground if he’s going to pip either one of those for a place in the coveted run-off. Therefore and
if we assume Sergio Massa’s run comes to an end (this time) in October and it’s Patricia Bullrich
versus Javier Milei in the second round run-off in November, it’s going to be a close run thing.
On the one side, Patricia Bullrich will appeal to those who don’t want to throw caution to the
wind, while Milei’s advantage is that he isn’t classic right wing and the direct antithesis for
voters who prefer Massa and/or the current left-leaning government.
Bottom Line: It’s going to be between Milei and Bullrich to decide who is the next President of
Argentina and while Milei is getting all the attention this evening due to his overall win in the
PASO vote today, it’s likely to be a close fight come October and, more importantly, in the now
probable run-off in November.
Ecuador: The assassination of Fernando Villavicencio
Tonight Sunday sees the one and only live TV debate between all candidates for President, with
the election happening next Sunday August 20th, but instead of eight candidates, only seven
will be present [EDIT Sunday evening: A professional reporter from Quito, one Christian Zurita,
has been named as the new candidate for Villavicencio’s party. His Veep candidate, Andrea
González, was originally named as the replacement but the voting rules say she cannot change
hats on the ticket, even under these circumstances. Therefore Zurita has taken his place, we
understand he has been a close friend of the murdered candidate for 25 years]. You’re highly
likely to know already, but Ecuador’s presidential election campaign and vote have been
overshadowed by the terrible turn of events last week when Fernando Villavicencio, one of the
candidates vying for a run-off spot behind likely first round victor Luisa González, was shot dead
while leaving a campaign event at a location in the North of the capital, Quito.
We now know the attack has been connected to the narcotrafficking gang Los Lobos (The
Wolves), Ecuador’s most powerful gang with some 8,000 members and connections to
international drug smuggling gangs in countries such as Mexico, Colombia and Peru (Ecuador
has quickly become an main exit route for cocaine produced in Colombia and Peru). Fernando
Villavicencio was murdered in a coordinated attack by a group of seven Colombians and was hit
in the head by three bullets, including at least one bullet fired from longer range. One of the
attackers died in the attack and the other six have apparently been apprehended. The
preliminary investigations into their activities have also revealed phone calls the “three Ecuador
politicians”, though the public has not been given any further details of whom or from what
political group. On that subject, a lot has been made of the long-term bad blood between
Fernando Villavicencio and ex-President Rafael Correa, as Villavicencio was one of the main
faces behind the investigations into Correa’s activities while President and helped make the
accusations of corruption stick against Correa (for which he was found guilty in absentia and
sentenced, which is why Correa still lives in Belgium). Correa has always vehemently the
accusations made by Villavicencio against him and accused him of a political witch hunt,
however Villavicencio in turn says he was threatened by Correa’s people at the time and during
his presidency, had to flee the country. All this is true (at least as far as we know here on the
outside), but it’s not as if Villavicencio’s only enemy was Correa. In his time as investigator and
later member of Congress, was known as a crusading character against corruption of all types
and made enemies across the board, including with those directly involved with drug trafficking.
The shockwaves from the assassination are bound to affect these final critical days of the
election campaign and dominate tonight’s election (these words are being written early Sunday
22

morning, I plan a short addition to this note this evening) and with plenty of unknowns, political
accusations and denials being thrown left, right and centre and a debate in which the remaining
candidates will obviously try to present their best arguments on what is now the
overwhelmingly biggest policy point of this election, crime and security, it’s impossible to make
anything more than best guesses about the result of this first round election. However, if the
identities of the politicians who were apparently in contact with the criminal band who
perpetrated the assassination come to light, it might change the playing field completely, either
in the first round of voting or any eventual run-off. What I am not going to do is try to second-
guess the way in which the assassination might influence the vote. There’s an obvious line of
reasoning to say this terrible event may favour a hardline right wing populist candidate such as
Jan Topic (the “Bukele of Ecuador”, or so they say) and indeed, during the Los Lobos video
claiming responsibility Señor Topic was mentioned by the gang as being “next in line” if he
didn’t do what (they claim) he’d been paid to do by the Los Lobos gang bosses. I’ll limit myself
to saying the way Topic’s name was added was rather odd.
The bottom line: Political risk has gone off-scale in Ecuador and it was no surprise to see
anything company of investment vehicle connected to the country sell off last week. That
includes mining companies of course. Now all eyes will be on what’s left of this electoral
campaign, as well as next Sunday August 20th when the country goes to the polls. Any further
major incident would make the current poor optics plain awful. What Ecuador needs in the next
week/ten days is an election that goes off without further major incidents and we get to either
an outright winner (less likely) or the two names that go forward into the second-round run off.
Market Watching
Argonaut Gold (AR.to): Better but still high risk
This is a stock we owned in December 2021 when it revealed the extent of its capex blowout,
construction issues and time overruns on its big Magino mine build-out in Canada, Argonaut
Gold (AR.to) has been through the mill in the
year and a half or so since we threw in the towel
on our position and sold at a loss for $2.15 at the
time. On Friday pre-open AR announced its 2q23
financial results and reiterated guidance on the
Magino project, now with first gold poured and
expected to ramp into commercial production by
the end of this year. Here’s the ten-day
comparative chart of AR.to to the GDXJ and as
you can see, the market liked what it saw in the
AR numbers and bid up the stock.
However, that’s not any sort of real breakout as
the longer timeframe of the same pairing shows:
23

Also, let’s note that despite its 7.3% rally on Friday, AR.to closed at $0.59 and a long way from
the level at which we bailed.
AR has been mooted in many quarters as a potential turnaround play and it’s true that if
Magino gets up and running and works, the stock looks ready to rally. It’s a stock I’ve kept an
eye on because of that and it’s fair to say that on the surface at least, things do look as though
they are improving for AR.to this year after a fairly torrid time. This isn’t a deeper examination
of the numbers (the full suite of tracking charts can wait for another day) but we can give the
right gist with an abridged note and a few visuals, so here goes. First, here’s operating earnings
per share:
AR.to: operating earnings per share
24
590.0 370.0
611.0
870.0 920.0
050.0 540.0 100.0 630.0- 100.0
210.0
0.14
0.12
0.10
0.08
0.06
0.04
0.02
0.00
-0.02
-0.04
-0.06
02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2
$
source: AR filings, IKN calcs
AR took a large impairment at end 2022, that’s most of the red blob you see there. This
quarter’s 1.2c/share (USD) is better than previous quarters but…
1000 AR.to: Shares Out
900
800
700
600
500
400
300
200
100
0
81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2
source: company filings/IKN ests
serahs
fo
snoillim
…the share dilution AR has suffered in recent times means its earnings from its three operating
mines will never go as far on a per share basis than it did before. Which is why the Magino
build-out is so crucial for the company and that’s all about how the balance sheet has changed.
AR.to: Assets
1600
1400
1200
1000
800
600
400
200
0
Above we see how AR has stacked the capitalization and fix asset value of the company to build
the expensive Magino, but not only with cash raised from share placement. Its debt book has
91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2
fixed AR.to: Liabilities breakdown per qtr
U$m other current 600
cash 550
500
450
400
350
300
250
200
150
100
50
0
source: company filings
91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2
U$m
LT liab
current liab
source: company filings

ballooned and, as a result, cash and working capital (below left) are at low levels for a company
that needs to run three working mines and get its flagship project to free cash flow positive
levels in the next two to three quarters. The result of the debt and the diluted share count is
the Enterprise Value (EV) per share chart (below right), now standing at U$0.55 for end 2q23.
That’s not an exact match to the C$0.59 close Friday, but it’s shows where the equity valuation
is being derived from at the moment.
AR.to: Working Capital per qtr
300
275
250
225
200
175
150
125
100
75
50
25
0
And that brings us to the reason I think it’s best to wait on the sidelines a little longer, as there
are enough clues pointing to another equity raise from AR in the near future. For example this,
found at the bottom of last week’s MD&A:
The deal provides around $20m of cash in what amounts to a forward sale of gold production
and as at the date of the MD&A filing (August 10th) AR has drawn on half the facility, for gross
proceeds of U$9.7m on 5,000 oz of gold that it needs to re-pay in 45 days (though the deal
comes with a 12 month extension of some type, not many details on how that is triggered).
Such deals are not undertaken by companies in a comfortable financial position (after all “add
further liquidity to the balance sheet” simply means “we don’t have enough cash”) and that fits
with what we see in the tracking charts for the company financials. And it’s not only those three
working mines and large ramp-up in progress, as from December 31st this year AR has to start
repaying its debt on a quarterly basis (19 quarters to pay U$200m capital plus interest, plus the
$50m revolver due in 2025).
Therefore and to wrap this up quickly I see two reasons to wiat on any re-purchase of Argonuat
Gold (AR.to) at the moment:
1) Magino execution. The company has seemingly improved from its awful 2021/2022
period, but that may just be cosmetics and the proof of this particular pudding will be
delivering Magino on (revised) time and (revised) budget. That hasn’t happened yet,
even with first pour behind them and as the company has swung and missed too many
times already at Magino, I personally am in “Show Me” mode on this story.
2) Likelihood of more share dilution. There are enough clues to suggest AR will go back to
market and top up its treasury before Magino is fully functional. The news team has
shown no issue about diluting the share count, as we were under 33m shares at end
2q22 and today that’s a cool 864.464m. Another 100m on that to raise $50m or so
would make sense under the circumstances, allow AR to pay back those future gold
ounce sales (for all intents and purposes a bridge loan) and cover the payback
obligations while Magino becomes fully operational and the revenues begin to flow into
treasury.
25
91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2
U$m 7.00 Argonaut: EV/share, 2019 to date
6.00
5.00
4.00
3.00
2.00
1.00
0.00
source company filings
91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2
source: company filings
erahs/$

The Bottom Line: There is a risk/reward rebound turnaround trade potential in AR.to and those
with more stomach for risk could buy at these prices today. If it were just the risk of non—
delivery of Magino on its revised timeline, then it would be a reasonably attractive speculation
but, with the potential for at least one more equity raising in the pipeline, there’s good reason
to wait out a little longer, get in on a price that would flatline for a while and gather more
information on the Magino commissioning process before making a decision. I’ll wait and watch
a while longer, the risk is still to high for the reward.
Conclusion
IKN743 is done but instead of the normal bullet points, here’s a thought or two about the trade
decision behind the main subject of today’s edition, Fortuna Silver:
It’s always a slightly strange experience to write up on a stock that I’ve been working on
numerically that offers obvious and compelling value, no matter from what angle one looks. It’s
not something that gets done in a narrative on by writing an analysis, instead it’s all via the
number crunching, along with the generated and created visuals, tables and charts (in my case,
in Excel). In the case of a multi-asset company such as Fortuna Silver (FSM) (FVI.to) there’s a
lot to cover and I find myself wondering how to explain the crux of the purchase decision as
concisely and succinctly as possible. The issue is that I don’t need to convince myself, that’s
already done. The problem is to explain what’s already decided and to cover as many of the key
points as possible without it turning into a 50 page tome.
It’s taken two main fundies notes to get to this point, the first was mostly background and
thoughts on how FSM has grown to where it is today, setbacks and dysfunctions and all. The
second, today, is an attempt to capture the value proposition that’s screaming from every angle
of the spreadsheet. Fortuna Silver has alienated a lot of its potential shareholders by making a
series of poor decisions and then spending a lot of money trying to repair them, but we’re now
at the point where the company truly will change from what it once was, a silver miner with
base metals and gold credits, to a multi-mine gold mining company that sits squarely in the
pack of 500k to 1m oz producers. You are getting a lot of company and forward upside from
less than U$1Bn market cap this weekend, even if gold and silver flatline from here and I hope,
via the mix of charts and the explanations around them, to have got that point across.
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://fortunasilver.com/investors/news/fortuna-reports-results-for-the-2nd-quarter-of-2023/
(2) https://www.hellenicshippingnews.com/copper-skids-to-lowest-in-almost-a-month-on-chinese-trade-data/
(3) https://www.wesdome.com/English/investors/latest-news/news-details/2023/Wesdome-Announces-Second-Quarter-
2023-Financial-Results/default.aspx
(4) https://www.accesswire.com/773866/South-Star-Battery-Metals-Announces-Closing-of-Final-Subscription-from-its-
Previously-Announced-Oversubscribed-Non-Brokered-Private-Placement
26

Stocks To Follow Closed Positions 2022
Closed 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
Palamina Corp PA.v Dec'22 C$0.295 21-Nov-21 C$0.08 -72.9% Clear-out of underperformer
Pure Gold PGM.h Dec'22 C$0.14 26-Sep-22 C$0.015 -89.3% tiny trade on vh risk, went Ch11
Stocks To Follow Closed Positions 2021
Closed in 2021 closed close price
Fiore Gold F.v jan'21 C$0.98 21-May-20 C$1.17 19.4% closed as part of rebalance
Norsemont Min NOM.cse feb'21 C$1.55 6-Set-20 C$0.70 -54.8% Cut loser to reduce Au exp.
Element 29 Res ECU.v feb'21 C$0.49 7-Feb-21 C$0.54 10.2% Cut Peru exposure
Kuya Silver KUYA.cse feb'21 C$1.66 8-Nov-20 C$2.51 51.2% Cut Peru exposure
Pucara Gold TORO.v apr'21 C$0.65 4-Oct-20 C$0.26 -60.0% Cut loser, Peru risk call
Copper Mountain CMMC.to apr'21 C$1.40 22-Nov-20 C$4.18 198.6% tgt hit, profit taken
New Gold NGD may'21 U$0.76 9-Feb-20 U$2.14 181.6% Sold to buy AGC, nice win
Orezone Gold ORE.v jun'21 C$0.79 21-Jun-20 C$1.61 103.8% sold on pop, leaky boat
Wolfden Res. WLF.v sep'21 C$0.30 11-Apr-21 C$0.19 -36.7% Failed spec trade, cut loss
Cartier Res ECR.v sep'21 C$0.32 21-Mar-21 C$0.235 -26.6% Failed spec trade, cut loss
Amarillo Gold AGC.v sep'21 C$0.31 30-May-21 C$0.30 -3.2% Capex story changed: Out
Excelsior Mining MIN.to oct'21 C$0.93 10-Mar-19 C$0.53 -43.0% May return in 2022
Royal Road Min. RYR.v nov'21 C$0.155 17-Mar-19 C$0.275 77.4% Closed on Nica pol risk
Aurelius Min. AUL.v dec'21 C$0.75 28-Jun-20 0.24 -68.0% cut end 2021, failed trade
Argonaut Gold AR.to dec'21 C$2.95 25-Jun-21 C$2.15 -27.1% cut on capex blowout
Stocks To Follow Closed Positions 2020
Closed in 2020 closed close price
TMAC Resources TMR.to Jan'20 C$3.41 20-Dec-19 C$3.61 5.9% TLS flip play, sold new year
Regulus Res REG.v Jan'20 C$1.10 20-Dec-19 C$1.30 18.2% TLS flip play, profit taken
Bonterra Res BTR.v Jan'20 C$1.90 9-Dec-19 C$1.66 -12.6% TLS flip play, loss taken
McEwen Mining MUX Jan'20 U$1.12 2-Dec-19 U$1.18 5.4% TLS flip play, profit taken
Core Gold CGLD.v Jan'20 C$0.255 7-Apr-19 C$0.305 19.6% arb trade, profit taken
HudBay Min HBM Jan'20 U$3.56 9-Dec-19 U$3.36 -5.6% TLS flip play, loss taken
Midas Gold MAX.to Feb'20 C$0.71 5-Jan-20 C$0.57 -19.7% sm & silly trade
Warrior Gold WAR.v Feb'20 C$0.08 3-Aug-18 C$0.05 -31.3% clean out non-perf sm stocks
Contact Gold C.v Feb'20 C$0.40 19-Aug-18 C$0.18 -55.0% clean out non-perf sm stocks
Sandstorm Gold SAND Feb'20 U$3.73 17-Apr-16 U$7.21 93.3% Sold during port rebalance
NexGen Energy NXE Feb'20 U$1.20 2-Dec-19 U$1.06 -11.7% TLS flip play, loss taken
MAG Silver MAG Apr'20 U$8.95 1-Mar-20 U$10.07 12.5% Sold to cut silver exposure
Alexco Res AXU Apr'20 U$1.69 7-Sep-17 U$1.69 0.0% sold to close Ag exp. in FY20
Bonterra Res BTR.v Jun'20 C$1.62 2-Feb-20 C$1.10 -32.1% under-performer cash moved
Regulus Res REG.v Jun'20 C$0.64 6-Apr-15 C$0.79 23.4% moved $ TMQ/MIN & Au stocks
Great Panther GPR.to Aug'20 C$0.60 21-Jun-20 C$1.10 83.3% Profit taken, good trade
27

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
Lara Expl. LRA.v Mar'17 C$1.15 8-Apr-12 C$1.05 -8.7% cut to make room for new trade
28

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.
29