6 The IKN Weekly, issue 774 — Mar 17, 2024
The IKN Weekly
Week 774, March 17th 2024
Contents
This Week: In today’s edition, FOMC Week, GLD gets an inflow…at last.
Fundamental Analysis: Thoughts on the copper price.
Stocks to Follow: Western Copper & Gold (WRN.to) (WRN), SolGold (SOLG.to), Adventus
Mining (ADZN.v), SilverCrest Metals (SILV) (SIL.to), Pan Global Copper (PGZ.v), Equinox Gold
(EQX), Contango ORE (CTGO), Rio2 Ltd (RIO.v).
The Copper Basket: Overview.
The Producer Basket: Overview.
The TinyCaps Basket: Overview, Palamina Corp (PA.v).
Regional Politics: Peru: A longer rainy season than usual, Mexico: The first weeks of official
campaigning, Peru: Buenaventura and copper (BVN).
Market Watching: Wheaton Precious Metals (WPM): Slightly hard done-by, SSR Mining
(SSRM) and a trade heads-up.
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 edition has been cut back to bare bones. There was plenty more planned,
including long strategy notes on the situations in Ecuador and Colombia, but personal
life has got in the way this weekend so rather than fight a losing battle against the
clock or further complicating things by taking time tomorrow Monday, I’ve decided to
defer most of the edition until next week. Please accept my apologies.
We do get some work done all the same, mostly in the main Fundies section that goes
over the move in copper last week, considers the likelihood of a near-term ceiling on
this move and lays out a clear policy position for my own copper trades.
However, the Copper Basket and Producer Basket sections are “bare bones only” this
week, marking the closing prices on the week with a little commentary on the company
moves. Not much else.
There are a couple of segments in Regional Politics and Market Watching that I’d
prepared earlier in the week, but there were other things in mind for this weekend’s
edition. I can only apologize and ask your understanding.
FOMC Week
Before previewing the coming week’s market moving macro event, it’s worth considering how
last week’s main event, the US CPI, which
came in at +3.2% for February (chart right), a
US Consumer Price Inflation (CPI)
tenth higher than the median forecast. This
was taken as a negative at first by the metals
world before being quickly forgotten as other
factors came into play, particularly in the copper sector and plenty more on that in today’s edition. However and more generally,
1 4.1 7.1 6.2 2.4
0.5 4.5 4.5 3.5 4.5 2.6 8.6 0.7 5.7 9.7 5.8 3.8 6.8 1.9 5.8 3.8 2.8 7.7 1.7 5.6 4.6 0.6 0.5 9.4
0.4 0.3 2.3 7.3 7.3
2.3 1.3 4.3 1.3 2.3
10.0
9.0
8.0
7.0
6.0
5.0 4.0 3.0
2.0 1.0
0.0
12'naj bef ram rpa yam nuj luj gua pes tco von ced 22'naj bef ram rpa yam nuj luj gua pes tco von ced 32'naj bef ram rpa yam nuj luj gua pes tco von ced 32'naj bef
source: US BLS
it’s a reminder that US macro movements are not necessarily the be-all-and-end-all for market
signals in the mining sector and CPI, which temporarily claimed the mantle of “Most Important
Indicator” over US jobs in 2023, has likely returned to its supporting role.
Moving on, the coming week revolves around Wednesday 2pm ET and the Fed Announcement
after the March FOMC Meeting, with “Dot Plot” forecasts scheduled for the same time and then
Jay “Close the Effing Door” Powell’s press conference half an hour later. It’s once again one of
those FOMCs with a almost certain headline result of “no change”, so the world will be looking
at the small print and asking Mr. Powell leading questions in order to gauge when (not if) rate
cuts will begin, later this year. However, the way in which the market moved late week is
beginning to telegraph reality and unless the Fed throws a real surprise next week, the
Northern summer will see the start of the cutting season.
GLD gets an inflow…at last
It’s quite a thing to consider that it’s taken a move in gold of this size…
…to get a net inflow in physical gold to the GLD vaults. As the tacking chart (below left) shows,
was got 16.61 metric tonnes added last week (most of that landing Friday) and GLD closed at
831.84mt, the first serious uptick all year. Hopefully not the last and if the scenario we floated
last week turns out to be accurate, it may mark the moment when the ETF world stopped
supplying the market and started competing with the Central Banks and jewelers.
4.70 GLD: Inventory/Price Ratio, 2024 YTD
4.65
4.60
4.55
4.50
4.45
4.40
4.35
4.30
4.25
4.20
4.15
4.10
4.05
4.00
Fundamental Analysis of Mining Stocks
Thoughts on the copper price
This is the chart of the week:
2
32/21/92 42/1/2 42/1/6 42/1/01 42/1/41 42/1/81 42/1/22 42/1/62 42/1/03 42/2/3 42/2/7 42/2/11 42/2/51 42/2/91 42/2/32 42/2/72 42/3/2 42/3/6 42/3/01 42/3/41
GLD gold holdings, 2024 YTD (metric tonnes)
900
890
880
870
860
850
840
830
820
Source: SPDR data, IKN calcs 810
800
32/21/92 32/21/13 42/1/2 42/1/4 42/1/6 42/1/8 42/1/01 42/1/21 42/1/41 42/1/61 42/1/81 42/1/02 42/1/22 42/1/42 42/1/62 42/1/82 42/1/03 42/2/1 42/2/3 42/2/5 42/2/7 42/2/9 42/2/11 42/2/31 42/2/51 42/2/71 42/2/91 42/2/12 42/2/32 42/2/52 42/2/72 42/2/92 42/3/2 42/3/4 42/3/6 42/3/8 42/3/01 42/3/21 42/3/41
mt
source: SPDR GLD data
Under normal circumstances, we keep copper commentary down in its dedicated section below
but considering what happened in the market last week for Dr. Copper, it takes over the main
fundies section of IKN774 as we cover these semi-related subjects:
The recent past in the copper market
The near-term future for copper prices
How I am going to play the current situation personally
Trade ideas and junior mining vehicles for your speculative copper dollars
The recent past in the copper market
Without trying to toot the horn (too loud), we’ve called copper well in the last few months. As
4q23 wound down we largely faded the “buy copper now!” voices and soothsayers, with our
own brand of soothsaying calling for a more extended period of copper trading sideways as
demand among end-users. Particularly the key China market, was still in doubt. That turned out
to be the case and the decision to wait out and not grab the prices at the end of last year was
the right one. We watched the Chinese New Year come and go, then started to ramp up ouor
long positions in copper exposed juniors in the last few weeks, with buys called in IKN770 in
Pan Global and SolgGold (PGZ.v, SOLG.to) then Western Copper (WRN.to) (WRN) added with
lucky timing in IKN771 and the trade underscored and doubled down in IKN772, along with
comments on the increasingly bullish signals such as IKN771 and its “…overall, I’m happy
enough about getting more bullish on copper from this point and there’s more likelihood of a
breakout than a breakdown from the current trading range. The market is primed and ready for
new news, which will probably come from China now that it’s back to work.”
Which has also come to pass, so now copper has blown through the U$4.00/lb line and the
world is getting bullish and again exhorting us to “buy copper now!”, it’s time to take a close
look. For the TL:DR among you, The rest of today’s note walks through why I’m still not
convinced about this move, as there are still doubts over end-user demand. But I’m not getting
cute any longer, no more trying to micro-manage price moves so as far as I’m concerned, now
I’m long it time to stay long as the medium-term and long-term outlook is as bullish as ever.
The near-term future for copper prices
To better understand what’s going on, we need to consider the major moving parts and once
we do, there are similarities to the bull calls over the Christmas 2023 period that were based
firmly on supply issues but failed to take into account end-user demand.
We first consider recent events and newsflow around the Chinese smelter sector, as it was one
of the main triggers for last week’s run (if you believed the trade headlines, at least). China’s
copper smelting sector has been on a well-documented expansion in its capacvity in recent
years as the country effectively brings its refined copper output up to the same level as its end-
user demand. Already the holder of around 50% of the world’s smelter capacity (the second
largest player is Japan, with around 7%) and responsible for 47% of global refined copper
output last year in rough terms, China’s aim is to increase market share to the same levels as
its copper consumption, currently around 55% of all copper produced in the world (and likely to
3
rise to over 60%). Indeed, base metals veteran Simon Hunt (of the eponymous consultancy
firm) last year opined that China may soon turn into
a net exporter of finished copper, such is its desire
China: Copper smelting capacity, per annum
to corner the world market. By definition, this build-
out means we’re living a period of capacity
expansion and indeed, it has 12 new large smelter
projects coming on line in the period 2023 to 2026
that together are expected to raise China’s copper smelting capacity to around 14.6m tonnes per
annum. This chart (right) puts that into visual form,
using data collected from Wood Mackenzie, The
International Copper Study Group (ICSG) and
China’s official liars at the National Bureau of
Statistics, then blended to make best-efforts
estimates for the next three years.
Before moving on, it’s worth reflecting how China goes about its GDP growth programs and the
“build it and they will come” mentality that manifest sin many facets of its economy. We’ve all
heard about the way it builds any number of apartment blocks and is willing to leave them
empty for extended periods before the occupants arrive and swell its urban zones in numbers,
not just in Km2 of concrete. This seems to be occurring in the smelter world as well, with China
deliberately building in over-capacity for the current market as it eyes 2026 and beyond. Long
story short, this recent build and copper smelting over-capacity is unlikely to have been by pure
chance.
The next piece in this puzzle is the well-documented drought in copper concentrate on the
world market. It’s not confined to the large porphyry mines along the Andean Cordillera but
they have been under-performing compared to previous forecasts (e.g. El Teniente,
Chuquicamata, Anglo’s consolidated production for region). Then came the recent flashpoint
when First Quantum Cobre Panama mine’s shuttering setting off the crisis levels. The result has
been a dearth of conc available on the world market, at the same time as the new smelter
capacity build-out begins to hit the market. Another piece to this puzzle this the calendar and
the copper market’s typical seasonality, with China now coming out of its New Year’s break and
traditionally in “back to serious work” mode, that’s when smelters try to get in front of end-user
demand by working at full whack if possible. Finally, let’s also a secondary factor to this mix,
the new supply China has enjoyed from the Russian mainland, as the Ukraine war disrupted
normal supply lines (through Scandinavia into Europe). As a result, China suddenly got used to
receiving concentrate via the Asian route, which at this time of year (rather cold) is shut down.
Summing up, we have a current situation of extra added smelter capacity a the same time as
lower concentrate deliveries to the China mainland that has resulted in headlines and stories
like this (1):
“Copper Fees Plunge Close to Zero in Test For China’s Smelters”
(March 8th, Bloomie)
Or (2)…
“What lies behind the rapid decline in spot copper concentrates TC/RCs?”
(March 12th, Fastmarkets)
Plenty more headlines where they came from too, but here’s how Fastmarkets developed its
story:
Fastmarkets calculated the weekly copper concentrates TC index, cif Asia Pacific at
$12.70 per tonne per tonne on March 1, down from $19.80 per tonne on February 23
and marking its lowest level since Fastmarkets began tracking the market in June
2013.
This week’s index is massively down compared with the 2024 benchmark of $80 per
tonne, agreed between Chilean miner Antofagasta and China’s Jinchuan Group in
November 2023.
4
67.9 94.01 1.11 6.21 1.31 7.31 5.41
16
14
12
10
8 6
4
2
0
2020 2021 2022 2023 2024 2025 2026
source: Woodmac, ICSG, China NSB
uC
TM
Those treatment and refining (TC/RC) prices essentially mean a whole subsector of China’s
industrial base is currently running at a loss, something not even a quasi-Communist command
economy can stomach in the 21st century and sure enough, we got a response from the
smelter companies last week (3):
“China's top copper smelters agree on rare joint production cuts, sources say”
Fed up with losing money, the smelter people seem to have agreed to stop fighting amongst
each other for concentrate, which should see spot TC/RC prices start to rebound. This isn’t the
first time this year the smelter people in China have tried to form a loose cabal to set prices but
this time it seems to have got tractions, as reported by Northern Miner two days ago (4):
“Satellites spot China slowing copper smelters”
Global copper smelters were about a third more idle this year through February than they
normally are as leading producer China slowed output, according to a London-based company
that uses satellites to monitor emissions.
The result was seen in the spot market. Here Reuters on March 15th (5) and again, we could of
picked any one of a dozen headlines as copper blasted through resistance and put in its best
close since April last year.
“Copper Prices Jump as Top Chinese Smelters Agree to Cut Output”
And this desk is happy about that, be in no doubt. After being obstinantly long copper for an
extended period and having recently added plenty of extra exposure via new trades and
additions to open positions, copper at over U$4.00/lb this weekend is a sight for sore eyes and
the share price rises last week very welcome in indeed. However, contrarian is as contrarian
does and that means suspicion about any sort of price move that gets unanimous support and
applause from the metals peanut gallery and on that score, there are several reasons why this
move in copper isn’t to be fully trusted.
1) A smelter bottleneck is not a supply/demand imbalance. The above scenario has triggered
price upside in copper, but a lack of copper concentrate into an expanding number of smelters
is not necessarily an indication is a supply deficit in copper metal.
2) Inventory levels suggest a supplied market. This is one of the charts from today’s Copper
Basket sector so see below for more, but the way that copper is being stacked in SHFE
warehouses does not suggest that factories in China are running out of the metal. Yes for sure
this is the standard seasonal surge, but at the same time its also the highest stock level we’ve
seen since 2019 and if there were a need to supply a thirsty market, this tonnage wouldn’t have
made it to the storage bins, not even temporarily.
SHFE copper inventory levels, 2019 to 2024
400000
350000
300000
250000
200000
150000
100000
50000
0
5
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 2024
2023
2022
2021
2020
2019
source: Cochilco data
3) The Yangshan Copper Premium is not signaling a tight market. The last time this device got
a mention on these pages was November and December last year when the premium, i.e. the
price paid by China-based traders over LME benchmark to secure one physical tonne of copper,
spent plenty of time over U$100/tonne. This chart (right) from the Shanghai Metals Market
(SMM) website (6) shows a recent bounce in the Premium frm U$48/tonne to U$60/tonne, but
that’s already back at U$54/tonne and even if it
had held at U$60/tonne, we’re still a long way
from the peaks of late last year, when inventories
were dropping and end users were keen on
securing inventory.
4) The US Dollar rallied with copper last week.
While not a direct influence on supply or demand,
copper is traded in USD so when that currency
strengthens, copper gts more expensive in
counterparty currencies, for example the Chinese
Yuan. While of secondary importance in last
week’s copper rally, we know that a weak dollar is
conducive to higher copper prices over the long-
term and the chart (right) shows the opposite to
that.
Summing up so far, we enjoyed the copper run
last week and there’s plenty of evidence of the
metal having broken out from its long-term range,
but at the same time we still don’t have ducks
fully in-line. Supply of concentrate to Asia is
certainly restricted and the number of smelters
now competing for feed has caused a flurry of
headlines in the last two to three weeks, including
the decision from a group of said smelters to slow production and apparently restrict supply of
finished copper to end users. However, away from the smelter bottleneck there’s still little
evidence of a demand surge and with SHFE inventories beating last year’s levels and the
Yangshan premium failing to signal tightness, the rising dollar may now stop copper’s run.
How I plan to play the current situation personally
This is easier than all that above. The situation in a nutshell:
I’ve recently increased exposure to copper juniors
The copper price has moved and those purchases now look good
But as noted above, the market may have become a little too overenthusiastic
about the near-term potential for copper.
That means we may see a window in which selling a buying back later could
be the optimum trade.
With that set out, I’m now going to laugh at my own suggestion because although I felt obliged
to point out the cute trade, there’s no way I’m smart enough to sell right and buy right, that’s
two trades I have to get right instead of just one. Therefore and despite the evidence that we
may about to see copper stocks get overbought and correct inn the near-term as the metal
peaks, I much prefer to hold through on all positions and keep eyes on the real prize. That’s
later on in the year when we expect copper to move up and hold position as demand catches
up with speculators’ current expectations. That’s my theory anyway, but by deciding to hold
through and not sell in the days to come I won’t mind being wrong, either.
Trade ideas and junior mining vehicles for your speculative copper dollars
The final segment in today’s copper thinkpiece is a review of preferred copper trades. We leave
recommendations on larger producers to other places (e.g. good run put in by Southern Copper
(SCCO) last week, the 25% added by Capstone (CS.to) in the last month or the potential shown
by slight sector laggard Antofagasta (ANTO.L), among others) and focus on our own trades,
then add a couple more known entities of interest at the end. Nothing particularly new in this
list, but I have tried to frame the potential of each one with a little moniker that may help you
decide which suits your own circumstances:
6
The open positions: These are the copper stocks I currently own and will hold through on all
positions now that copper has made its timely move.
SolGold (SOLG.to) (SOLG.L): The big merger play. It’s been plug awful for a good
year, but there’s clearly some spark returning to SOLG and the Noboa government moves
in the last couple of weeks have brought renewed interest.
Pan Global Resources (PGZ.v): The tinycap with fundamentals. Still very cheap
compared to nearly all periods in its past despite the move last week, it’s risky to bet on
a small play that may get left behind due to lack of radar, but I really like the potential of
Escacena and importantly, PGZ is cashed up to do its thing in 2024.
Western Copper & Gold (WRN.to) (WRN): The Rainmaker trade. This trade has
started in near-perfect style and we’ve benefited from copper’s run and also the vibes
generated by the changes at C-suite. I’ve written a lot about this trade in IKN771 and
772, consider this a reminder.
Adventus (ADZN.v): The next mine build in Ecuador. Adventus has greatly
benefited from the presence of Nobis group on its share register and has picked up most
of the permits it needs to move forward. If the referendum vote goes well (see below) El
Domo/Curipamba should be funded and ground broken very soon, that’s when ADZN
could really run. The recent merger has added significant pipeline.
Aldebaran (ALDE.v): The ignored giant. A frustrating stock to own, but at some
point the open market should recognize the relative value it offers. Speculator tire-kickers
tend to sniff at the low overall grade of Altar and move on, but ALDE has attracted large
scale strategic sponsorship due to the scale it offers.
Marimaca Copper (MARI.to): The obvious value. This stock has everything going
for it, including an advanced story on a highly attractive oxide copper project in a safe
part of a safe jurisidiction that is surely going to become a mine. It’s big insto ownership
reduces the float and it often struggles to attract volume in open market trading, but
there’s no more obvious buyout target in Chile today and the upcoming Feas Study will
mark the moment when the bidding begins.
The “do as I do, not as I say” list. Supplementing the above, here are two stocks I’ve
recently owned that are likely to do well in the newly bullish market for copper stories, plus one
obvious addition that everyone needs to consider, if only to discard for their own reasons.
Ero Copper (ERO.to) (ERO): The high margin producer. Regular readers know how
I’ve tracked this stock, so those same readers will also know how ERO has made me look
stupid for not buying any and always finding some excuse to look somewhere else,
despite what we expect from the stock as its third mine comes online. The way ERO
reacted is also a timely reminder of how the market will ignore a couple of lackluster
production quarters as soon as the main catalyst for copper stocks takes control.
Amerigo Resources (ARG.to): The rock solid business model. I’ve made no secret
of my admiration for this company and how it goes about business. What’s been missing
in recent times is a copper price that will allow it to build treasury back to a level that
then allows ARG to start returning more capital to its investors, via share buybacks and
special dividends. Running the numbers shows that U$4.00/lb and above is one of those
key levels, so the rebound back into thr C$1.40s we saw last week was on brand. It
won’t be the most volatile or dynamic copper trade you could add to your portfolio, but
at these levels and the dividend it pays means you’ll get a solid investment and great
returns over the medium to long term as long as copper holds the U$4.00/lb line.
Filo Corp (FIL.to) (FIL): The star turn. Last but not least, we need to add the
developer that is most likely to attract market attention in 2024. Filo is already an
expensive stock but when copper heats up, it is in prime position to deliver the very best
NR headlines and grades/widths that make its audience swoon. This is the type of high-
profile exploreco story that attracts the generalist money.
7
The bottom line: Last week’s move in copper was timed nicely and looks powerful enough to
hold, at least above the U$4.00/lb line. I’ve laid out the reasons why we may see the sector
move into overbought territory and burn a few fingers, but with my trades now set fair and
without the desire to get too cute and trade in/out on momentum or chart reading, I’ll leave
those worries to other people (and will also reference this strategy note in a few weeks time
if/when my copper stocks take a step back in price). The copper market has been tipped by all
and sundry for months on end and now it seems to have worked through the quiet period at
the front end of 2024 that we forecast, The IKN Weekly is now on board with the soothsayer
convention. We did most of the hard work a couple of weeks aog by getting longer the copper
junior sector so no new trades today, which also means we don’t have to chase the market by
calling new trades this weekend. However and with the proviso that we may see some near-
term weakness in copper if demand doesn’t match the most bullish of expectations, this really is
time to hold your shares with tight hands, be fully positioned, sit back and watch the
fundamental effects of the long-term supply deficit start to play out. Be long copper.
Stocks to Follow
One of the 16 stocks on our table was a week-over-week loser (MENE.v) and three were
unchanged (MAI.v, RIO.v, PAU.cse). That means 12 winners and they include big percentage
moves in SilverCrest (SILV up 20.6%), Contango ORE (CTGO up 15.6%), Ero Copper (ERO.to
up 15.5%), Aldebaran Resources (ALDE.v up 11.4%), Equinox Gold (EQX up 10.9%), SolGold
(SOLG.to up 10.7%), Pan Global (PGZ.v up 9.7%), Adventus (ADZN.v up 8.9%), Newcore Gold
(NCAU.v up 8.6%) and Western Copper & Gold (WRN.to up 8.5%). In other words, twn of the
12 winners are big enough to get their own mention and that’s the kind of performance that
makes for a good week for the portfolio. Aside the continued frustration of holding more money
in the stubbornly unmoving Minera Alamos, of course.
We currently have 16 stock on our list, four under our self-imposed maximum. Nine of those
are in the green, six are in the red, one is unchanged.
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$0.295 40.5% $0.75 first tgt, #1 idea
RECOMMENDED STOCKS
Equinox Gold EQX STR BUY U$4.42 30-May-23 U$5.21 17.9% Leverage trade at U$2k/oz Au
Rio2 Ltd. RIO.v BUY C$0.83 22-Apr-18 C$0.37 -55.4% Permit approved, rebounding
SolGold SOLG.to BUY C$0.22 19-Feb-23 C$0.155 -29.5% Avged down Feb'24
Pan Global Res PGZ.v BUY C$0.17 19-Feb-24 C$0.17 0.0% Feb'24 new Cu trade, cheap
Marimaca Copper MARI.to BUY C$3.05 26-May-23 C$3.51 15.1% Quality Cu developer
Western Copper WRN.to BUY C$1.52 26-Feb-24 C$2.04 34.2% Special situation purchase
Adventus Mining ADZN.v SPEC BUY C$0.285 7-Jan-24 C$0.305 6.6% EIA permit received, now dev
Contango Ore CTGO BUY U$18.70 30-Jul-23 U$23.88 27.7% FY24 production, now moving
Newcore Gold NCAU.v SPEC BUY C$0.205 23-Oct-22 C$0.19 -7.3% Showing signs of life
SPECULATIVE TRADES
Aldebaran Res. ALDE.v SPEC BUY C$0.72 16-May-21 C$0.78 8.3% drilling again
Minera IRL MIRL.cse avoid C$0.195 22-Jul-12 C$0.025 -87.2% leaving list soon (good)
A WATCHLIST OF POTENTIAL TRADES. NB: I DO NOT OWN
Ero Copper ERO.to WATCH C$18.94 22-Oct-23 C$25.80 36.2% High quality Cu prod, cheap
SilverCrest Met SILV WATCH U$5.62 21-Jan-24 U$6.72 19.6% potential silver trade end Q1
Provenance Gold PAU.cse WATCH C$0.085 8-Oct-23 C$0.08 -5.9% Idaho gold drill play
LONG-TERM NON-MINING HOLD
8
Mene Inc. MENE.v adding C$0.63 6-Dec-20 C$0.24 -61.9% LT bet, adding slowly
CLOSED TRADES IN 2024 date closed close price
Amerigo Res ARG.to Jan'24 C$1.36 12-Dec-21 C$1.34 -1.5% reduced Cu exposure
Fortuna Silver FSM Jan'24 U$2.92 13-Aug-23 U$3.09 3.4% Time ran out on NT trade
Argonaut Gold AR.to Jan'24 C$0.42 17-Dec-23 C$0.395 -6.0% NT specflip closed on poor Q4
2015 to 2023 annual closed positions in appendices below, 2009 to 2014 closed positions in editions IKN553 or earlier
Now for notes on some of our covered companies:
Western Copper & Gold (WRN.to) (WRN): Wish they could all do this. When starting on
WRN in IKN dated Feb 25th (just three editions ago) one of the passing comments on the
potential for a sale to the highest bidder was, “Start the bidding at C$2.00.” Here we are
already and that’s good, because we’ve left the “too low to sell” price deck and as from now,
can entertain the type of offer that would get a board’s attention.
However, two Loonies isn’t enough and if Casino is about to change hands, the strategy call as
seen in IKN772 of C$3.00 and above is the locigal place to look. With growing momentum and
a macro backdrop that has suddenly moved in its favour, there’s no need to cash in yet.
SolGold (SOLG.to) and Adventus Mining (ADZN.v): Please see the update note in
Regional Politics on Ecuador’s referendum question that would see it recognize international
arbitration. We put the pieces of Noboa’s recent moves together and see where all this is
heading, which makes that referendum question morte important than even I believed at first.
Both ADZN and SOLG had good weeks.
SilverCrest Metals (SILV) (SIL.to): So much for
the financials filing delay and my fears voiced last
weekend. We do the numbers in Market Watching
below, but I’m left with the feeling of having once
again snatched defeat from the jaws of victory.
Pan Global Copper (PGZ.v): A decent week, but still
cheap now that copper has started to move. We
remind readers that PGZ has plenty of upcoming
newsflow, including insight on the potential of the tin
kicker at Escacena.
Minera Alamos (MAI.v): The thorn in my side
Equinox Gold (EQX): We have much the same message as last week on EQX: Happy that the
stock is moving up, still disappointed in the way it has developed in the last three quarters, not
in any hurry to close the trade as long as the rally continues. Of course it’s good to see this up
another 11% on the week and if the market decides that it wants “leverage to gold” after all
this time (part of my original buy thesis), then EQ X still offers a good alternative.
Contango ORE (CTGO): If you were lucky/prescient enough to have bought some CTGO two
Mondays ago, you’d now be 33% up on your money. Once again, note that the volume might
not look much but Friday saw around U$2.2m in volume traded through the stock. If that
volume traded in Minera Alamos (MAI.v) it would need between 9.5m and 10m shares, the type
of number that would see this desk receiving mails.
Rio2 Ltd (RIO.v): I spoke with RIO.v chair Black briefly last week to ask whether there had
been any advances in the financing package for Fenix and from the answers and by reading
between the lines, the process is still in early stages. In trading, RIO.v has started to catch a
bid and while it finished UNCH on the week, there’s clear interest in picking up a bargain before
the newsflow begins.
9
The Copper Basket
After eleven weeks of 2024, The Copper Basket shows a gain of 6.34% to level stakes:
company ticker price 1/1/24 Shares out Market Cap current pps gain/loss%
1 NGEx Minerals NGEX.v 7.16 186.824 1649.66 8.83 16.2%
2 Solaris Res SLS.to 4.13 179.221 783.20 4.37 0.0%
3 Los Andes LA.v 11.80 29.53 336.94 11.41 -3.4%
4 Marimaca Cop MARI.to 3.43 93.11 326.82 3.51 2.0%
5 Hercules Silver BIG.v 1.38 231 210.21 0.91 -34.1%
6 Arizona Sonoran ASCU.to 1.75 109.17 156.11 1.43 -18.3%
7 Aldebaran Res. ALDE.v 0.89 169.819 132.46 0.78 -12.4%
8 Faraday Copper FDY.to 0.63 175.97 110.86 0.63 0.0%
9 Oroco Res OCO.v 0.375 222.86 110.32 0.495 32.0%
10 American Eagle AE.v 0.26 108.87 69.68 0.64 146.2%
11 Kodiak Copper KDK.v 0.58 63.93 36.44 0.57 -1.7%
12 C3 Metals CCCM.v 0.61 61.885 25.06 0.405 -33.6%
13 QC Copper QCCU.v 0.12 173.7 22.58 0.13 8.3%
14 Element 29 Res ECU.v 0.18 106.25 15.41 0.145 -19.4%
15 Camino Min COR.v 0.07 206.66 13.43 0.065 -7.1%
NB: All stocks in CAD$ Portfolio avg 6.34%
Copper the metal had a breakout week and The Copper Basket 2024, weekly evolution
8%
while the big producers enjoyed generalist
6%
money inflows, our basket of explorecos
4%
reflected the new interest in the sector with
2%
some big gains among the basket components.
0%
There was just one loser on the week in C3
-2%
Metals (CCCM.v down 10.0%) and one -4%
unchanged stock in the tinycap rep Camino -6%
(COR.v), which leaves 13 winners so we’ll just -8%
list the big winners, starting with Oroco (OCO.v
up 37.5%) and followed by Faraday (FDY.to up
23.5%), Kodiak (KDK.v up 16.3%),
Arizona Sonoran (ASCU.to up 12.6%),
Hercules (BIG.v up 12.4%), Element 29
(ECU.v up 11.5%), Aldebaran (ALDE.v
11.4%). That’s quite a list and its
aggregate has put the basket back in
positive territory.
This long-term chart complements that in
this week’s main fundies section and
marks a couple of key moments in the
recent trade history of copper.
We now get to our look at weekly copper
inventory moves, data as usual from Cochilco:
The aggregate of the three official systems for world copper inventories rose strongly
last week, up by 41,106 metric tonnes (mt) and closing at 421,107mt.
The addition was all about Shanghai and the SHFE, which saw a hefty 47,150mt of
copper enter its warehouses. That’s a big move in what’s normally the tail end of the
re-stock season and indicates that demand still hasn’t picked up, even if the much-
reported slump in TC/RC premiums has removed profit margins from Chinese and wider
10
ts1naJ ht7naJ ht41 ts12 ht82 ht4bef ht11 ht81 ht52 dr3raM ht01 ht71
source: IKN calcs
Asian smelters (see above). An interesting position and something to keep in mind as
copper speculation starts to ramp, this weekend’s SHFE total is 286,305mt and to see
how that stacks up next to other years, the dedicated charts below do a good job.
The LME sends us the same moderately bullish signal as last week and another draw
down in stocks, the 5,500mt nowhere near to the SHFE addition but taken on its own,
an interesting move for the time of year. Friday’s total was 107,300mt and to add to
the bullish narrative, only 17,125 of those tonnes are located in LME Asia warehouses.
The Comex saw a small drop, down 454mt to close at 27,502mt. No biggie.
The dedicated SHFE charts show that inventories have climbed to a level last seen in 2019.
We’re likely close to the peak for the year, but the move is still significant and stands against
the talk of a tight copper market in China today.
SHFE copper inventory levels, 2019 to 2024
400000
350000
300000
250000
200000
150000
100000
50000
0
11
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 2024
2023
2022
2021
2020
2019
source: Cochilco data
Shanghai Futures Exchange Warehouse Stocks, 2014 to date
400000
350000
300000
250000
200000
150000
100000
50000
0
31'13ceD dr32 ht51 ht7 ht03 dn22 ht71 ht9 ts1von ht42 ht71 ht01 dn2tcO 7102ts1naJ ht62 ht81 ht01 dr3ced ht52 8102ht72rpa ht91 ht11 9102
dr3bef
9102ht82rpa ts12 ht31 0202ht5naj 0202ht92ram ts12 ht31 0202ht6ced ht82 dr32 ht51 ht7 2202ht03naj 22ht42rpA ht71 22ht9tco 3202
naJ
ht62 ht81 ht01peS dr3ceD ht52beF
Mt Cu
|
source: Cochilco
The Producer Basket
After 11 weeks of 2024, the Producer Basket shows a loss of 0.65% to level stakes:
company ticker price 1/1/24 Shares out MktCap(U$Bn) current pps gain/loss%
1 Newmont NEM 41.39 1152.6 39.05 33.88 -18.1%
2 Agnico Eagle AEM 54.85 497.971 27.86 55.94 2.0%
3 Barrick GOLD 18.09 1756 27.67 15.76 -12.9%
4 Franco-Nevada FNV 110.81 192.119 21.99 114.48 3.3%
5 Pan American PAAS 16.33 364.439 5.28 14.50 -11.2%
6 Lundin Gold LUGDF 12.64 237.68 3.05 12.83 1.5%
7 Hecla Mining HL 4.81 617.768 2.69 4.36 -9.4%
8 Eldorado Gold EGO 12.97 202.472 2.64 13.02 0.4%
9 Dundee PM DPMLF 6.43 183.278 1.35 7.39 14.9%
10 Wesdome Gold WDOFF 5.83 148.95 1.07 7.17 23.0%
All prices and stock quotes in U$ Port. avg -0.65%
Unlike the hot action in the Copper Basket, this week saw the precious metals producers take a
break as gold dropped by almost 1% (GLD proxy) from last weekend. The miners managed to
beat the metal and GDX rose by 0.8%, while GDXJ was up 2.3% as risk capital started its
rotation from the big caps. As for our list, we saw four winners (AEM, PAAS, HL, EGO) , one
unchanged (GOLD) and five losers (NEM, FNV, LUGDF, DPMLF, WDOFF) but thanks to the
improvement in silver, our exposure to the Jekyll & Hyde metal via Hecla (HL up 6.6%) and Pan
American (PAAS up 4.8%) plus the strong improvement in Eldorado Gold (EGO up 7.4%) we
did better than the benchmark and now have an near 3% lead
The 2024 Producer Basket: Weekly performance and The 2024 Producer Basket: Percentage diff. between
4% comparative to GDX control GDX benchmark & basket (negative= IKN ahead)
1.5%
2% 1.0%
0% 0.5%
-2% 0.0%
-4% ikn - - 1 0 . . 0 5 % %
-6% gdx control -1.5%
-8% -2.0%
-2.5%
-10%
-3.0%
-12% -3.5%
-14% -4.0%
source: IKN calcs -16%
Jan1sJtan7th14th 21st 28thfeb4th11th 18th 25thMar3rd10th 17th
The TinyCaps List
After 11 weeks of 2024, the TinyCaps show a gain of 14.82% to level stakes:
company ticker price 1/1/24 Shares out Mkt Cap current pps gain/loss%
Aston Bay BAY.v 0.065 221.5 31.01 0.14 115.4%
Awalé Res ARIC.v 0.135 67.27 12.11 0.18 33.3%
District Metals DMX.v 0.170 106.98 36.91 0.345 102.9%
Endurance Gold EDG.v 0.18 150.136 18.02 0.12 -33.3%
Kirkland LDC KLDC.v 0.100 88.625 6.65 0.075 -25.0%
Latin Metals LMS.v 0.075 71.476 5.72 0.08 6.7%
Palamina Corp PA.v 0.130 71.285 7.48 0.105 -19.2%
South Star STS.v 0.750 48.8 29.77 0.61 -18.7%
Surge Copper SURG.v 0.090 219.21 18.63 0.085 -5.6%
Viva Gold VAU.v 0.120 118.384 13.02 0.11 -8.3%
Prices in CAD$, data from TSXV basket avg 14.82%
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 (though this year I’m making one clear exception and one rule
stretcher). 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, our task is to trawl through the TSXV and find companies that are small but with life in them. The vast
majority of tinycap stocks are broken stories, 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 2024. 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.
While the mayhem was hitting the copper sector
and juniors of our normal focus size were getting a
12
ts1naJ ht7naJ ht41 ts12 ht82 ht4bef ht11 ht81 ht52 dr3raM ht01 ht71
source: IKN calcs, NYSE data
TinyCaps, 2024 weekly tracker
16%
14%
12%
10%
8%
6%
4%
2%
0%
ts1naJ ht7naJ ht41 ts12 ht82 ht4bef ht11 ht81 ht52 dr3raM ht01 ht71
source: IKN calcs, TSX data
lift, things were much quieter down here in the TinyCaps list. Three winners on the week
(LMS.v, SURG.v, VAU.v), three losers (ARIC.v, PA.v, STS.v) and four that remained unchanged
(BAY.v, DMX.v, EDG.v, KLDC.v), there were any out-sized winners or losers either. The action
was in other places but overall, the basket did manage to add a little to its overall average.
Palamina Corp (PA.v): Please see below in Regional Politics on the prolonged rainy season in
Peru, which may affect the re-start of drilling at the company’s Usicayos project in Peru.
Though on the Amazonian side of the Continental Divide, it’s close enough to the highest zones
to be affected by the continued rain shadow and the rains may also impede access to the zone.
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
Peru: A longer rainy season than usual
On Thursday evening the government of Peru declared a State of Emergency in 15 of the
country’s 23 regions due to heavy rains, with the 60 day edict allowing the faster deployment of
emergency funds if required by any given region. The rainy season is usually wrapping up
around this time of year but this heavy squall has arrived late, with most of the Andean and
high country regions affected. Don’t be surprised if your junior exploreco of choice starts its
2024 drill campaign later than expected.
Mexico: The first weeks of official campaigning
We’ve had two weeks of the official campaign period in Mexico and in the main event, the
Presidential election race, all recent polls still indicate a clear lead and stable advantage for the
Morena (AMLO party) government candidate, Claudia Sheinbaum (technically running as the
alliance candidate for Morena, the Workers’ Party and the Green Ecology party), over her only
serious rival, the right-ish wing alliance (the alliance is also somewhat “ish”, comprised of the
long-standing traditional parties in Mexico that normally hate each other) candidate, Xóchitl
Gálvez (7). The well-established polling company Investigaciones Sociales Aplicadas (ISA) was
hired by the national Grupo de Economistas y Asociados (GEA) in its results published this
week, put the candidates in this order:
Claudia Sheinbaum (Morena party): 52%
Xóchitl Gálvez (Fuerza y Corazón por México alliance): 33%
Jorge Álvarez (Movimiento Ciudadano party): 4%
Ealier this month another respected pollster, Poligrama came up with similar numbers:
Claudia Sheinbaum (Morena party): 51.6%
Xóchitl Gálvez (Fuerza y Corazón por México alliance): 31.9%
Jorge Álvarez (Movimiento Ciudadano party): 5.5%
The secondary numbers in the latest polls suggest that voter intention for Sheinbaum may not
be as firm in those headline numbers as for Gálvez, but there’s not much in it and at this stage
Sheinbaum is still red hot favourite to win on June 2nd. Experience has taught your author that
there’s no such thing as a dead cert in LatAm elections, but it would take a scandal and a fall
from grace of monumental proportions at this late stage for Sheinbaum to lose.
As for policies concerning mining, hot fave Sheinbaum has made very little mention of our
sector of focus so far, but in the last week her main ricval Gálvez decided to wheel out the
issues facing mining in Mexico to try and get some traction in the campaign and usefully, BN
Americas reported on her position in this English language report (8) that starts like this:
Mexican presidential candidate Xóchitl Gálvez, representing the opposition coalition in the June 2
elections, has railed against what she called the "demonization" of mining in Mexico.
13
Gálvez suggested that the industry has been viewed unfairly when she was asked about which
areas she sees as economic opportunities for Mexico during a forum at the Iteso university in
Guadalajara.
Mining contributes 2.4% of GDP and 8.64% of industrial GDP.
“The world of the future is tied to electromobility. I think we have a huge opportunity in these
regions of the country [and] obviously, we need a new port in Manzanillo for import and export of
products,” Gálvez said.
“The mining industry will always exist, of course, as long as there's respect for the environment.
The mining industry has been heavily demonized, but there couldn't be cellphones without
minerals. So, I think what we have to do is see how to make any kind of industry sustainable,” she
added.
The report goes on to note that the current AMLO government “has been characterized by its
hostility to the mining industry, demonstrated by not granting concessions to companies during
his tenure, which began late 2018, as well as delays in delivery of the permits required for
projects to be carried out, particularly environmental licenses.” It also notes the following about
his dauphine in the campaign:
Claudia Sheinbaum, the candidate representing the ruling Morena party and currently leading the
polls, has made few direct references to mining, but she is generally expected to follow the strategic
lines of AMLO.
Despite these expectations, the president of the association of mining engineers, metallurgists and
geologists (AIMMGM), Luis Humberto Vázquez, said in February that there is optimism in the
sector due to the arrival of a new administration, even if it is led by Morena, because he believes
that there are indications of greater understanding of the needs of the government and the industry.
"We're going to match those needs to create... an area of opportunity. I believe that with the [new
government], we'll have better prospects in mining, and that is for the benefit of Mexico," he said at
the time.
Overall, it’s good to see Gálvez open (or at least try to open) a debate on the mining industry in
this campaign and political watchers will monitor an y utterances Sheinbaum might have on the
subject to see if she’s about to take a softer, more friendly line on mining than AMLO. It is quite
possible but at a best guess, we probably won’t see any change to the current Morena policy
position until after the election (e.g. if/when Sheinbaum forms her cabinet).
Peru: Buenaventura and copper (BVN)
We know Peru’s big gold mining company Buenaventura (BVN) is interested in copper and has
plenty of exposure to the red metal. Its minority holding in Cerro Verde is one example, its
copper-centric projects are another and we also know the angle has been picked up by Chile’s
Antofagasta (ANTO.L), as it bought a 19% strategic position in BVN laste last year via the open
market and is about to get two seats on the board of directors as a result. We got more
confirmation and thoughts on BVN and copper last week
On its YouTube channel on Tuesdays, the Peruvian Institute of Mining Engineers has a regular
segment called “Miners Dialogues” (Diálogos Mineros) and while I don’t always watch it, it’s on
my YouTube subscriptions list because from time to time it throws up an interesting half hour
on Peru’s mining sector. Such was this week (9) when the show interviewed Raúl Benavides,
perhaps best known as one of the directors and mainstays at BVN)(his brother is the more
media-friendly Roque, but Raúl is known as the Benavides brother who makes the company tick
and any project of note has to go through him). On this specific occasion he was interviewed
regarding his role as the President of renowned Lima school of mining, CETEMIN (Centro
Tecnologico Minero) so a lot of the Q&A was on that and while interesting, not directly
connected with The IKN Weekly and its focus. However, right at the end he touched on how he
sees the future of his mining company and that’s why it gets a mention here, because after
making a couple of comments about the mainstay company metal gold and the build-out at the
San Gabriel project in Moquegua, he shifted gears and said (translated) that for BVN, “there’s a
lot of copper in (the company’s) future” and mentioned three projects in particular, namely its
Trapiche brownfields, the expansion project to the long-established El Brocal mine and also the
Coimolache Sulfuros project. That one is of particular interest to backers of Regulus Resources
(REG.v) at AntaKori, as the junior holds land immediately next door to the zone BVN plans to
turn from the current gold oxide mine into the copper sulphides mine from the mineralization
under the gold oxide zone. Señor Benavides told the interviewer that the mine’s oxides were
14
close to depleted and they would soon change to sulphide mining, though it must be noted that
the plans in with the government of Peru are for a relatively small sulphide operation located on
100% Coimolache owned concessions and mostly directly on top of the old Coimolache oxides
mine, with a projected capex of U$127m (that’s a far cry from the multi-billions they’d want for
a massive mine that included the AntaKori concession zone). He finished by reiterating that BVN
was betting on the future for copper and hoped that the government of Peru “would de-
bottleneck the absurd requirements that are holding back development in the country” and
make the permitting track easier and quicker for his company and others in the same situation.
Market Watching
Wheaton Precious Metals (WPM): Slightly hard done-by
Royalty/streamer companies are safer options that won’t run as fast as classic miners when the
metals prices move up. We removed it from the 2024 Producer Basket, I’ve never owned it
personally and, at a market cap of U$20.1Bn (with a B), it’s way too big for normal IKN Weekly
coverage. However, Wheaton Precious Metals (WPM) gets a mention this weekend because I
think it was slightly hard done-by on Friday in the reaction to its 4q23 financials on Thursday
evening (10).
At first sight the financials were largely as expected but what matters for these juggernaut-
sized company are the longer-term trends and there are two data sets that cauight my eye on
perusing the filings. First up the “production” (if the word applies to a streamer), which at
174,222 ooz AuEq (65% of that in straight gold) is a clear improvement over the last four
quarters, a return to the form was last saw in 2022 and the long-term production forecast aims
quarterly production at around 240,000 oz AuEq qtr, a level quite literally off this chart:
WPM: Metals production in Au and AuEq, per qtr
The second interesting data set comes from the corporate decision to move to a progressive
dividend policy, this quote from the cover NR:
The Company has revised its dividend policy, transitioning from distributing 30% of the average of
the previous four quarters' operating cash flows to shareholders, to adopting a progressive dividend
policy marked by an increase in our 2024 annual dividend.
This chart shows the history of quarterly dividends paid by WPM since 2018 and while the 15.5c
declared divi is already an improvement, the data suggests that the dividend should move to
17c by the end of the year (and again, let’s note the long-term production targets some 40%
above today’s levels). Despite that, the market decided to sell WPM lightly compared to the
market, which may be money looking for more returns and risk exposure in the rising gold (and
metals) market, but I can’t help but think WPM didn’t deserve that reception. One to conaider
as a potential rebound trade in the week to come (for those who move bigger money at least).
15
20999
99949
47085
38788
48609
00509
34679
93029
722811
92587
002001
27009
88379
42658
38089
12388
08229
78097
40249
56386
44368
80537
53287
52066
87417
91037
42926
08138
95794
720501
36806
953311
220000
200000
180000
160000 140000
120000
100000
80000
60000
40000
20000
0
02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4
Au/AuEq oz
other metals AuEq oz
gold oz
source: company filings
Wheaton (WPM): Quarterly dividend
16
90.0 90.0 90.0 90.0 90.0 90.0 90.0 1.0 1.0 1.0
21.0 31.0 41.0 51.0 51.0 51.0 51.0 51.0 51.0 51.0 51.0 51.0 51.0 551.0 61.0 61.0 71.0
0.2
0.18
0.16
0.14
0.12
0.1
0.08
0.06
0.04
0.02
0
81q2 81q3 81q4 91q1 91q2 91q3 91q4 02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 tse42q2 tse42q3 tse42q4
U$/share
source: WPM data, IKN calcs and ests
If we get to 17c it would imply a 1.5% yield at
today’s prices, so WPM isn’t the biggest paying
divi play out there in the metals world (see
Amerigo for a better yield, though admittedly a
smaller market cap play) but it’s a bedrock of
the insto holders and the implication of a rising
dividend this year after ten quarters of static
payments looks good compared to companies
such as Newmont, which has just cut its divi
even as gold reaches new record prices.
SSR Mining (SSRM) and a trade heads-up
In last week’s note “SSRM Mining (SSRM): A cosmetic con job” we pointed at a company trying
to weasel its way out of assuming the responsibility
for the Copler disaster and the almost certain loss
of nine lives among its workforce by making
cosmetic changes at the sub-altern level, instead of
doing the right thing at C-suite level. The market
agreed (right). At its best, capitalism is a
meritocratic device and a double-edged sword and
it’s supposed ot work this way. Simply put, SSRM is
a buy on the day it announces the wholesale
resignations of the people in ultimate charge at the
company, it’s a sell as long as those people try to
cling on to power and fat monthly salary cheques
by trying to shift the blame on to underlings. This
second chart shows how SSRM has underperformed
the market GDX proxy) by around 30% since the big drop on the bad news:
The same comparative YTD speaks for itself:
There’s a trade here, but not until the board grows a pair. However, you are advised to keep
the stock on your radar as that NR and a real change worth betting on may happen at any
time. Fliptrade profits available to the early birds.
Conclusion
IKN774 is done, we end with a bullet point:
A thin edition due to a difficult weekend, but we do at least lay out the way we see
copper developing. Watch out for a correction in the face of the current uber bullish
commentary, but in my view the best strategy from now is to buy and hold copper
exposure.
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.bloomberg.com/news/articles/2024-03-08/copper-fees-plunge-close-to-zero-in-test-for-china-s-smelters
(2) https://www.fastmarkets.com/insights/what-lies-behind-the-rapid-decline-in-spot-copper-concentrates-tc-rcs
(3) https://www.reuters.com/markets/commodities/chinas-top-copper-smelters-agree-production-cut-amid-raw-material-
tightness-2024-03-13/
(4) www.northernminer.com%2Fcommodities-markets%2Fsatellites-spot-china-slowing-copper-
smelters%2F1003864930%2F&usg=AOvVaw0bJ0sxRbGXy_7tGY1oYVyL&opi=89978449
(5) https://www.nasdaq.com/articles/copper-prices-jump-as-top-chinese-smelters-agree-to-cut-output
(6) https://www.metal.com/Copper/201211190003
(7) https://www.infobae.com/america/agencias/2024/03/14/claudia-sheinbaum-mantiene-la-ventaja-en-mexico-tras-el-
arranque-de-la-campana-electoral-por-la-presidencia/
(8) https://www.bnamericas.com/en/news/mexican-opposition-candidate-rails-against-demonization-of-mining
(9) https://www.youtube.com/watch?v=LNigelDhlGc
(10) https://www.wheatonpm.com/news/pressreleases/News-Releases-Details/2024/Wheaton-Precious-Metals-
Announces-Solid-2023-Annual-Results-and-Transition-to-Progressive-Dividend-Policy/default.aspx
17
Stocks To Follow Closed Positions 2023
CLOSED TRADES IN 2023 date closed close price
Altiplano Metals APN.v jan'23 C$0.31 17-Set-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-Dic-21 C$1.48 8.8% sold 20% to raise cash
Amerigo Res ARG.to oct'23 C$1.36 12-Dic-21 C$1.21 -11.0% sold 10% raise to cash
QC Copper&Gold QCCU.v oct'23 C$0.265 25-Abr-21 C$0.12 -54.7% sold raise to cash
Faraday Copper FDY.to oct'23 C$0.79 26-Mar-23 C$0.68 -11.4% sold raise to cash
AbraSilver Res. ABRA.v oct'23 C$0.36 4-Dic-22 C$0.28 -22.2% sold raise to cash
Orecap inv OCI.v oct'23 C$0.04 20-Nov-22 C$0.03 -25.0% sold raise to cash
Western Explor. WEX.v nov'23 C$1.87 9-Abr-23 C$0.60 -67.9% poor trade, cutting loss
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
18
Stocks To Follow Closed Positions 2020
Closed in 2020 closed close price
TMAC Resources TMR.to Jan'20 C$3.41 20-Dec-19 C$3.61 5.9% TLS flip play, sold new year
Regulus Res REG.v Jan'20 C$1.10 20-Dec-19 C$1.30 18.2% TLS flip play, profit taken
Bonterra Res BTR.v Jan'20 C$1.90 9-Dec-19 C$1.66 -12.6% TLS flip play, loss taken
McEwen Mining MUX Jan'20 U$1.12 2-Dec-19 U$1.18 5.4% TLS flip play, profit taken
Core Gold CGLD.v Jan'20 C$0.255 7-Apr-19 C$0.305 19.6% arb trade, profit taken
HudBay Min HBM Jan'20 U$3.56 9-Dec-19 U$3.36 -5.6% TLS flip play, loss taken
Midas Gold MAX.to Feb'20 C$0.71 5-Jan-20 C$0.57 -19.7% sm & silly trade
Warrior Gold WAR.v Feb'20 C$0.08 3-Aug-18 C$0.05 -31.3% clean out non-perf sm stocks
Contact Gold C.v Feb'20 C$0.40 19-Aug-18 C$0.18 -55.0% clean out non-perf sm stocks
Sandstorm Gold SAND Feb'20 U$3.73 17-Apr-16 U$7.21 93.3% Sold during port rebalance
NexGen Energy NXE Feb'20 U$1.20 2-Dec-19 U$1.06 -11.7% TLS flip play, loss taken
MAG Silver MAG Apr'20 U$8.95 1-Mar-20 U$10.07 12.5% Sold to cut silver exposure
Alexco Res AXU Apr'20 U$1.69 7-Sep-17 U$1.69 0.0% sold to close Ag exp. in FY20
Bonterra Res BTR.v Jun'20 C$1.62 2-Feb-20 C$1.10 -32.1% under-performer cash moved
Regulus Res REG.v Jun'20 C$0.64 6-Apr-15 C$0.79 23.4% moved $ TMQ/MIN & Au stocks
Great Panther GPR.to Aug'20 C$0.60 21-Jun-20 C$1.10 83.3% Profit taken, good trade
Jaguar Mining JAG.v Aug'20 C$0.42 21-Jun-20 C$0.65 54.8% Profit taken, good trade
Sandstorm Gold SAND Aug'20 U$7.76 10-May-20 U$9.37 20.7% Profit taken, good trade
Integra Resources ITR.v Aug'20 C$2.23 13-Aug-18 C$5.40 142.2% Profit taken, good trade
Wesdome Gold WDO.to Aug'20 C$2.37 14-Oct-17 C$14.82 525.3% last 1/2 of big win closed
INV Metals INV.to Sep'20 C$0.40 17-May-20 C$0.45 12.5% Cut all Ecuador exposure
Cartier Resources ECR.v Nov'20 C$0.155 3-Aug-18 C$0.25 67.7% Exact close price TBA
Tinka Res TK.v Dec'20 C$0.195 19-Apr-16 C$0.195 0.0% Closed on a round trip fail
2015 to 2019 annual closed positions in appendices below, 2009 to 2014 closed positions in editions IKN553 or earlier
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
19
Stocks To Follow Closed Positions 2018
Closed in 2018 closed close price
Amarillo Gold AGC.v jan'18 C$0.38 24-Mar-17 C$0.31 -18.4% Cut away losing trade
Riverside Res RRI.v jan'18 C$0.39 27-Jun-16 C$0.31 -20.5% Cut away losing trade
Eros Res ERC.v jan'18 C$0.175 1-Mar-17 C$0.16 -8.6% CEO sudden exit, not good
Excellon Res EXN.to jan'18 C$1.54 9-Oct-16 C$1.66 7.8% 4q17 poor, one too many bad qtrs
Wesdome Gold WDO.to jan'18 C$1.68 15-Dec-17 C$2.06 22.6% Near-term trade block, took profit
Sabina G&S SBB.to apr'18 C$2.06 17-Dec-17 C$1.77 -14.1% Near-term trade, bad timing, small
B2Gold BTO.to May'18 C$2.11 12-Sep-14 C$3.67 73.9% sold 25% to reduce exposure
Lara Expl. LRA.v May'18 C$0.65 11-Feb-18 C$0.58 -13.8% Spec on Brazil didn't work
Solitario XPL June'18 U$0.72 19-Mar-17 U$0.41 -43.1% Failed trade, may return in 4q18
SolGold plc SOLG.to July'18 C$0.475 19-Nov-17 C$0.415 -12.6% cut, trade didn't perform
Pan American PAAS July'18 U$17.90 1-Jun-18 U$16.30 8.9% modest win on short position
NGEx Res NGQ.to Sep'18 C$1.01 22-Oct-17 C$1.00 -1.0% Closed to reduce Argentina exp
Sandstorm Gold SAND Oct'18 U$3.73 17-Apr-16 U$4.13 10.7% partial sale to raise cash for GTT
Aldebaran Res ALDE.v Nov'18 n/a n/a n/a n/a liquidate spin out of REG
Stocks To Follow Closed Positions 2017
Closed in 2017 closed close price
Continental Gold CNL.to Jan'17 C$2.68 22-May-16 C$4.17 55.6% trade closed, profit taken
Focus Ventures FCV.v Jan'17 C$0.23 1-Jul-12 C$0.05 -78.3% Give up, a disaster trade
Wesdome Gold WDO.to Feb'17 C$1.72 28-Aug-16 C$3.00 74.4% Target hit, sold, good trade
Belo Sun BSX.to Mar'17 C$0.90 30-Jan-17 C$0.90 0.0% failed near-term flip trade
Lara Expl. LRA.v Mar'17 C$1.15 8-Apr-12 C$1.05 -8.7% cut to make room for new trade
Rye Patch Gold RPM.v Apr'17 C$0.31 2-Sep-16 C$0.32 3.2% cut for doubts & new stock
Cordoba Min. CDB.v Jun'17 C$0.75 15-Sep-16 C$0.63 -16.0% closed
Constantine Metal CEM.v Aug'17 C$0.135 9-Apr-17 C$0.28 107.4% spec trade closed, good win
Red Eagle Min. R.to Sep'17 C$0.67 13-Dec-16 C$0.27 -59.7% IKN's biggest failure in years
Starcore Intl SAM.to Sep'17 C$0.61 10-Jan-15 C$0.31 -49.2% Patience ran out
B2Gold BTO.to Dec'17 C$2.11 12-Sep-14 C$3.39 60.7% sold small portion for liquidity
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
20
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.
21