6 The IKN Weekly, issue 792 — Jul 22, 2024
The IKN Weekly
Week 792, July 21st 2024
Contents
This Week: Trade heads up, In today’s edition, No intro.
Fundamental Analysis: Florida Canyon Gold Inc (FCGV.v): Buying before the sale.
Stocks to Follow: Bear Creek Mining (BCM.v), Western Copper & Gold (WRN.to) (WRN),
Amerigo Resources (ARG.to), Rio2 Ltd (RIO.v), SilverCrest Metals (SILV) (SIL.to), Contango
ORE (CTGO), Menē Inc (MENE.v), Orecap Inv (OCI.v), Newcore Gold (NCAU.v).
The Copper Basket: Overview, NGEx
The Producer Basket: Overview, Franco-Nevada (FNV).
The TinyCaps Basket: Overview, Latin Metals (LMS.v).
Regional Politics: Mine development times in The USA and around the world, Panama: The
Cobre Panamá legal battle begins, Peru, When a nation protests in silence, Venezuela: Next
week’s Presidential election, Chile: Codelco damns itself by faint praise.
Market Watching: Bear Creek Mining 2q24 production.
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
Two trades planned:
I’m a buyer of Florida Canyon Gold Inc (FCGV.v), the newco recently spun out of
Alamos Gold’s (AGI) purchase of Argonaut Gold (AR.to). I didn’t expect to be a buyer
of FCGV as early as this, but information received makes this an obvious trade.
I’m looking to add to my Bear Creek Mining (BCM.v) position, as its soft production
quarter at Mercedes has offered a great window for shares that are better evaluated
for their exposure to the Corani silver project in Peru.
So now you know.
In Today’s Edition
The main event of this edition is the buy call on Florida Canyon Gold Inc (FCGV.v), the
report in the main Fundies section.
Against my better judgement (as it has precious little to do with mining), we run a
primer on next weekend’s Presidential election in Venezuela. That’s a fair chunk of
today’s Regional Politics section though for me, the note on Chile is more interesting.
For sure Bear Creek (BCM.v) dropped last week but I can’t help but think it’s looking
screamingly cheap now and I’m looking to add a few in the days to come. Agreed
Mercedes is a mess, but the reason to own it in 2024 is Corani. Find that mainly in the
Market Watching section, but there’s an extra line in Stocks to Follow.
Also in Stocks to Follow, Amerigo (ARG.to) is back at a buyable price if copper does
what I think it’s going to do and bottom out, Western is a royal pain and Rio2 (RIO.v) is
starting to pick up bids at the right time.
1
As for copper, don’t fear the drop…too much. The reason to be long copper is the same
as it was last month and is the same as it will be post Labor Day.
No big intro section today, the summer Doldrums have taken over the sector and with metals
prices sagging on temporary weakness, there’s nothing much left to say that hasn’t been said in
recent weeks. Still bullish copper, silver and gold.
Fundamental Analysis of Mining Stocks
Florida Canyon Gold Inc (FCGV.v): Buying before the sale
Intro: This is a note I did not expect to write. It’s also a simple story in essence, so even
though we go into the details a little in this note, nearly all you need to know can be summed
up in three bullet points:
This desk recently learned that (FCGV.v) is up for sale, the process is ongoing and
we should expect an announcement in the near future.
As such, I am a buyer of FCGV.v shares this coming week, most likely tomorrow
Monday morning.
The trade set-up is as simple as they come: Buy, own for a brief period of time,
sell to the eventual buyer of FCGV. In other words, buy low sell high.
Why I am a buyer of FCGV.v
After sketching out this report and deciding there is a narrative to lay out about the company
and the main asset, I’ve also decided that the reason to buy this stock might get lost if it’s
presented in normal style. Therefore, you can
consider this as much the conclusion as anything
else. Once we get this out the way, we move to
comment on the company structure and its main
Florida Canyon gold mine asset.
To begin and importantly, up to midweek last week
I had no intention whatsoever in buying FCGV.v. I’d
considered the spinco as a possible trade or
investment during the merger and closure period for
the Alamos Gold (AGI) Argonaut Gold (AR.to) deal,
but it was clear from the numbers that the eventual
spinco would have to raise capital in order to move
forward on Florida Canyon. That meant a dilutive
placement so, as well as the inevitable dumping of shares by instos that were in the dela for
AGI and would rid themselves of the remnant as soon as FCGV IPO’d. Indeed, we saw that kind
of action last week (chart right) as once the share had found an initial level on Tuesday
afternoon, the sellers rushed in and we ended the week at 55c.8
What changed my mind? Very simply, I got word from a contact midweek who told me there
was an ongoing sales process on FCGV right now and that, in all likelihood, FCGV would be a
very short-lived company quickly swallowed by a buyer. You’re not going to learn who my
contact was or any details of the conversation, but I will say that the person in question is
extremely reliable and trustworthy. However, no matter how good a contact a single voice is
not enough for the purposes of a trade. So I got in contact with a person in one of the
companies connected to the sales process (again, no further details) and mentioned what I
heard. That person replied to me with little extra, but enough to confirm what I’d heard was
true. Two apparently unrelated sources is normally enough, but I managed to add a third. I
was not told at any point by contact #1 or contact #2 which companies were vying to buy
FCGV, but a little logical deduction reduces the field to just a few names. I sent a mail to one of
the people I know in one of those companies. I admit here that it was little more than a “fishing
expedition” message and I wrote more in hope than expectation, But to my delight, (let’s call
them) Person Number Three took the bait and confirmed that indeed, their company was doing
DD on FCGV.
2
With that done, my position regarding FCGV.v as a potential trade changed 180° in the space of
less than two days. This is, therefore, a special situations purchase of shares with a very
simple trade thesis: Buy shares before the buyout is announced and sell them
afterward for a profit. My decision to buy FCGV this coming week is in effect a “Rolodex
Trade” based squarely on information gleaned from contacts. I’m not claiming telepathic
powers or some sort of moral high ground on this trade, instead I prefer to lay it out the way it
is to the readership of The IKN Weekly, so feel free to judge me harshly. This really is the
whole of the buy thesis, but before moving on and talking about the company and why its main
Florida Canyon asset is interesting enough to find a new owner soon, there are three loose
ends to tie off.
Firstly, as a courtesy I contacted my original source “Person #1” on Friday morning and told
them I had confirmed the information with the second “Person #2”. I have no idea whether #1
acted on my confirmation, but I made sure they knew at the start of the trading day Friday. In
my opinion that person deserved the quid pro quo, but I did not tell that person about Person
#3 and the final confirmation received because that came through a couple of hours after.
Secondly regarding the bonafides of my three contacts, for what it’s worth and in my wholly
subjective view I class #1 as 100% reliable, #2 as highly reliable (though I hadn’t spoken to
them for a long time) and the third contact in the same bracket. Put together, for my money
(literally) it brings a very high level of confidence that the intel is solid and a sale is going to
happen. Third and lastly, I’m also aware that this edition is going to make the people at the
centre of this sales process, i.e. FCGV, its suitors and the middleman companies charged with
putting the deal together (brokerages, lawyers etc) rather uncomfortable but after due
consideration, I can state for the record that I don’t care a jot. This is the type of deal that gets
tipped off to “the lucky few” all too often, it just so happens that for once, we’re in the position
to offer the intel to a more general, retail public.
Company overview
With that done, time to present some basic information on FCGV. Here’s the newly minted
corporate website (1) and here below is our standard corporate structure topbox because in
this case, being recently incorporated, there’s no need for P+L or balance sheet charts and it’s
basically all we have:
Shares out: 137.98m
Options: 1.983m
Warrants: Zero
Fully diluted shares: 139.96m
Current share price: C$0.55
Market Cap: C$76.98m
Approx cash per S/O: C$0.19
All prices are in US Dollars unless stated, USD/CAD forex assumption 0.73x
NB: To complicate things slightly, USD as the default currency in this report even though the FCGV share
price is in Canadian Dollars. So to avoid confusion, we use “U$” and “C$” all through today’s note
Share structure and corporate background
The above topbox is all good but to be exact, the recently listed FCGV has 137,976,712 shares
out and 1,983,271 options priced at 10c, so the way forward for valuations is to consider the FD
total, as that’s what the buyer will have to buy. At the current Greenback/Loonie forex, the
C$76.98m market cap is U$56.2m and of that around U$18.8m is covered by treasury. On that
subject the buyer of Magino, Alamos Gold (AGI), added to its position in the spinco by funding
it via the purchase of 10.099m shares priced at U$0.99 for a total placement of U$10m. As well
as topping up treasury, that upped AGI’s holding of FCGV to 27.58m shares, or 19.99% of the
total, which make it the major shareholder. As for that treasury, the pro forma deal (as seen in
the Listing Application document dated July 12th and filed to SEDAR) puts treasury at U$18.8m
and working capital at around U$10m, with the company laying out an 18 month work program
in its listing advisory on how it intends to spend that money (though we now know that’s for
show and it’s not going to happen)
3
As you may recall, The IKN Weekly covered the travails of Argonaut Gold (AR.to) at Magino
closely over the years, once holding the stock and getting out before any major damage was
done when the cost and time overruns began. We also recently tried a quick in-and-out trade at
the end of its build-out process, but ultimately the project became the undoing of the company
and as we now know, owners of the near neighbour Island Gold mine Alamos Gold (AGI)
moved in and bought Magino for a song. All very interesting I’m sure, but what concerns us
today is the leftovers from the AGI/AR deal, i.e. the spinco that took the other AR assets. And
that’s Florida Canyon Gold Inc (FCGV.v), which was incorporated on July 8th this year and
began its short life by owning several assets. However, even in its very short life to date we’ve
already seen changes when early last week it announced this (2):
Toronto, Ontario--(Newsfile Corp. - July 17, 2024) - Florida Canyon Gold Inc. (TSXV: FCGV) ("FCGI", or the
"Corporation") announced today that it has entered into a binding agreement to sell its interests in the San
Agustin mine, El Castillo mine, La Colorada mine, Cerro del Gallo project and San Antonio project
(collectively the "Mexican Business Unit") to Heliostar Metals Ltd. ("Heliostar") (the "Transaction").
The deal to offload all the mining assets except the Florida Canyon mine to Heliostar (HSTR.v)
caught my eye, but only because it fits into the HSTR business plan of picking up the trash from
Mexican explorecos for a song (dumb as a rock in my opinion, but that’s another story for
another day). Each of the above mines and projects have their own fatal flaw and it doesn’t
matter how much AR (now FCGV) claimed as fixed asset value, seeing them change hands for
$10m (plus extras) is logical. We could go into this angle more deeply and talk numbers, but
I’m going to try hard to keep on-point today so for our purposes the news here means FCGV is
left with just one mine, the one that’s actually worth some money.
Overview of the Florida Canyon mine
Located in Nevada USA (two hours drive north of Reno, very close to the interstate highway).
The Florida Canyon mine is an established and operating open pit gold mine and the one truly
valuable asset at FCGV today. It’s one of those open pit mines put into production in the 1980s
that was closed down in the l1te 90s due to low gold prices, picked up again and eventually put
back into production in 2017 by a previous iteration of the same company, Rye Patch Gold.
Since then it has been in production without ever making a lot of money, that due mostly to a
lack of primary investment and a cash
cost level that didn’t compete easily with Florida Canyon: Annual gold production and mine guidance
the prevailing price of gold. There are also
two NSRs on the mine of 2.5% and 3.0%
respectively; the total 5.5% drag is a
significant factor on corporate profitability
and eventual asset valuation.
This chart (right) shows production of gold
for the last three years and in 2023,
Florida Canyon produced 71,116 GEO
(including minor silver sales) at an AISC of
U$1,654/oz. While there are several issues
to consider about the asset, that
performance is a reasonable baseline on which to base future production parameters and
therefore valuations. The chart shows how 2023 was a better year and with the necessary
investment, it’s expected to continue according to
the latest economic report and mine plan (recently
published and based on January 1st 2024 data). The
chart also shows that at present and due to limited
defined resources, Florida Canyon has a relatively
short mine life, currently estimated at seven years
including 2024, plus three years of residual gold
production from leach pads once operations are
wound down. We also need to consider capex, as
the mine is in dire need of both capital and
sustaining investment with immediate work required
4
80745
11005
61117 00137 00107 00947 00837 00186 00876 00586
00212 0036 0073
Oz Au
80000
70000
60000
50000
40000
30000
20000
10000
0
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
source: FCGV literature
Florida Canyon: Projected capital cost
(capex and sustaining cap)
5.65
2.52 9.91 02 2.6
3.0 1.0
U$m
60
55
50
45
40
35
30
25
20
15 10
5
0
2024 2025 2026 2027 2028 2029 2030
source: 43-101 report
to the tune of U$56.5m and a four year plan including capex and sustaining capex that comes
to over U$127m (chart above). That work is essential in order to keep to the projected
production schedule to 2030 and is another key element part of any purchaser’s calculations.
However and with that said, there’s also little doubt there’s a profitable mine here if things go
well. This chart shows the estimated top line revenues for gold per annum under three prices
scenarios of U$2,000/oz, U$2,200/oz and U$2,400/oz gold respectively, with the calculation
including the 5.5% NSR payments:
Florida Canyon: Top line revs at three gold prices, per annum
5
2.831 0.251 8.561 5.231 7.541 0.951 6.141 7.551 9.961 5.931 4.351 4.761 7.821 6.141 5.451 1.821 0.141 8.351 5.921 4.241 4.551
1.04 1.44 1.84
U$m top line revs at U$2000/oz gold top line revs at U$2200/oz gold top line revs at U$2400/oz gold
180
160
140
120
100 80
60
40
20
0
2024 2025 2026 2027 2028 2029 2030 2031
source: FCGV 43-101 report
Here’s how the costs stack up in the same 2024 to 2031 period:
Florida Canyon: Projected capital and
operating costs, per annum
5.65
3.011
2.52
1.411
9.91
2.621
02
5.101
2.6
001
3.0
9.09
1.0
7.87
9.4-
7.8
U$m
180
capital cost 160 Op cost
140
120
100
80 60
40
20
0
-20 2024 2025 2026 2027 2028 2029 2030 2031
source: FCGV 43-101 report
Put another way, these AISC per ounce average costs show the projections as roughly in-line
with last year’s results, once the sustaining capital expenditures are behind the mine. Then as
the mine life comes to an end, spending drops and margins should increase
Florida Canyon: Projected costs/Oz Au
2822
7891 1591
6461 9551 5431 0511
971
U$/oz Au
2500
2000
1500
1000
500
0
2024 2025 2026 2027 2028 2029 2030 2031
source: FCGV 43-101 report, IKN calcs
With the projected revenues and costs above, we get this as operating margins per annum in
the three average price cases:
Florida Canyon: Operating margin at three gold prices
6
0.1-
7.91 8.32
9.54 3.84
6.26
6.67
3.44
U$m
100
80 margin at U$2,000/oz gold
margin at U$2,200/oz gold
60
margin at U$2,400/oz gold
40
20
0
-20
source: FCGV 43-101 report, IKN calcs & ests
-40
2024 2025 2026 2027 2028 2029 2030 2031
I haven’t added the numbers for the U$2,000/oz and U$2,200/oz cases as the visual would be
too busy otherwise, but the scenario should be clear enough. Any buyer of Florida Canyon will
have to be prepared to invest for the future and even at U$2,400/oz, will make a loss this year.
But the mine becomes profitable once investment is in and by focusing on the main seven year
production period and the first year of residuals in 2031, we get overall operating profits of:
U$124.4m at a U$2,000/oz gold average
U$222.2m at a U$2,200/oz gold average
U$320.0m at a U$2,400/oz gold average
That’s good money and please note, that may be EBIT but it’s after paying the 5.5% NSR and
includes the capex outlay. Last but definitely not least, Florida Canyon can almost certain see
an extended mine life from drill and exploration targets located around the current mine
operation. The concession area is larger and targets abound, but to now the operating
companies have not had the spare cash to dedicate to resource expansion. Any new owner
would certainly have a different attitude and budget to fund exploration drilling and indeed, the
43-101 recommends an exploration campaign at specific targets with an initial budget of just
under U$1m. The buyer of Florida Canyon will want to value its purchase on what’s there, but
will surely be confident of adding mine life and production ounces to extend beyond 2030 (and
potentially way beyond).
Putting it all together
This trade is predicated on simple grounds, but there are other matters to consider than the
basic tip and foremost among those, is the kind of price we can expect on the deal to buy out
FCGV. There are things we know:
We know AGI was willing to pay U$0.99 per share to get its position up to 19.99%.
We know that this weekend’s FCGV has a market cap of U$56.2m and an EV of
around U$46m, or U$0.333 per share. That’s a big gap compared to the AGI buy-in
price.
We know instos we dumping last week as they did what we expected them to do, i.e.
cash in on the remnant and walk away. That’s made the share price cheaper than its
intrinsic value and a good entry point for this Special Situation trade.
We know any buyer will have to commit more than just the ticket price, as Year One
of ownership comes with an earmarked capex outlay of U$56.5m and by the end of
Year Two and reasonable free cash flow, a total of over $80m to invest in the mine.
We know Florida Canyon currently has a limited mine life, but even so the projected
cash flow makes the asset interesting to any buyer and even more so if it can drill
out new resource tonnages and extend mine life.
Which brings us to a target price valuation and while we could get spreadsheet-y about this
(and I have in the background), ultimately it comes down to a subjective take on what suitors
might decide to offer in a competitive sales process such as this. I don’t think 19.99% holder
AGI is going to insist on the buyer paying its U$0.99 price, but on the other hand the offer will
have to improve substantially on the current market cap of U$0.40 (or EV of U$0.33) in order to
get the FCGV board’s green light.
Next up, although it would be nice to assume U$2,400/oz gold for valuation purposes, that’s
unlikely to be the baseline used by the buyer. The 43-101 used a general U$2,150/oz, I think
we can run with U$2,200/oz these days which gives an operating profit over the current short-
ish mine life of U$222.2m, or just under U$175m using a 5% NPV discount. The buyer needs to
invest upfront capex, but that’s included in the overall calculation so the only issue would be
corporate liquidity (and if I’m right about the eventual winner, they’ll have the treasury to cope
easily enough…we’ll see about that). The other selling point Florida Canyon brings to the table
is its potential resource upside and extension of mine life and while the buyer will want that “for
free”, I think they will be willing to pay a premium to the reasonable ticket price for the
privilege. So after due consideration and sticking a finger in the air, I’m going to put an
estimated target price of U$0.80 on FCGV.v, or C$1.10, which values the company at
50% NPV on a zero discount basis and is for all intents and purposes a double from here.
Conclusion
I had no intention of buying this stock until midweek last week, when the word came in from
my contact. After a couple of discreet inquiries and putting two and two together, it does
indeed seem that FCGV is about to be sold to the highest bidder and with that (plus the
impending sale of its Mexico assets to HSTR.v), put and end to the long corporate saga that
began with Rye Patch and Alio, became Argonaut and failed miserably at Magino. However, the
tail end of this Canadian corporate saga has opened the door for us to make a rapid and
lucrative profit and as such. I am a buyer of FCGV.v shares this coming week, most likely
tomorrow morning. As for the price to pay, I’m leaving that as a flexible target because on the
one hand I’m realistic enough to understand that this report is likely to pimp the price, at least
at the open tomorrow, but on the other we know there are larger desks and instos that are
selling shares under directives. They pushed the price down last week to its C$0.55 close and
may well continue to apply selling pressure. Therefore, I meekly request that if you’re a
prospective buyer of FCGV shares tomorrow by all means go ahead, but wait a day or two
before telling other people and/or your preferred social media channel. The more people we
can get on at these deeply discounted prices before the sale is announced, the better.
This one is a gilt-edged opportunity, they don’t come along as easy as this very often. Hope you
buy some.
Stocks to Follow
After two second positive weeks, the hammer came down and mostly hit silver stocks, though
copper’s drop also hit certain portfolio stocks. It wasn’t all bad news and the four winners
(RIO.v, MARI.to, CTGO, NCAU.v) helped because they’re all part of the main recos list, plus the
UNCH result in Minera Alamos (MAI.v) could have been worse. That leaves 12 losers on the
week and while most of those weren’t too bad, we need to point out Orecap (OCI.v down
15.4%) and the three silver stocks Bear Creek (BCM.v down 11.6%) IMPACT (IPT.v down
9.3%) and SilverCrest (SILV down 7.0%), as well as the highly annoying hit taken by Western
Copper (WRN.to down 8.6%).
We have 17 open positions at the moment, three under our self-imposed maximum and that
will be 18 by this time next weekend. Just seven of the stocks are in the green, one is
unchanged, nine are in the red.
7
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$0.30 42.9% $0.75 first tgt, #1 idea
RECOMMENDED STOCKS
Rio2 Ltd. RIO.v BUY C$0.80 22-Apr-18 C$0.58 -27.5% Momentum now building
SilverCrest Met SILV STR BUY U$6.90 31-Mar-24 U$9.14 32.5% Quality Ag/Au, U$12.96 tgt
Pan Global Res PGZ.v SPEC BUY C$0.19 19-Feb-24 C$0.165 -13.2% 3 adds,big position,cheap Cu
Marimaca Copper MARI.to STR BUY C$3.05 14-Jan-24 C$3.98 30.5% Quality Cu developer
Bear Creek Min BCM.v ADDING C$0.365 10-Jun-24 C$0.305 -16.4% New risk spec on Ag & Au
Western Copper WRN.to BUY C$1.57 26-Feb-24 C$1.48 -5.7% M&A trade, gone off boil
Orecap Inv OCI.v BUY C$0.06 4-May-24 C$0.055 -8.3% Exposed to several good jrs
Contango Ore CTGO STR BUY U$18.70 30-Jul-23 U$22.80 21.9% Production re-rate in Q3
Newcore Gold NCAU.v BUY C$0.205 23-Oct-22 C$0.33 61.0% Cheap Au in West Africa
SPECULATIVE TRADES
Aldebaran Res. ALDE.v SPEC BUY C$0.72 16-May-21 C$0.94 30.6% into FY24 news season now
IMPACT Silver IPT.v SPEC BUY C$0.30 14-Apr-24 C$0.245 -18.3% Silver spec, added IKN783
Minera IRL MIRL.cse avoid C$0.195 22-Jul-12 C$0.02 -89.7% leaving list soon (good)
A WATCHLIST OF POTENTIAL TRADES. NB: I DO NOT OWN
Amerigo Res ARG.to WATCH C$1.57 12-Dec-21 C$1.59 1.3% may buy soon
Red Pine Expl RPX.v WATCH C$0.08 4-May-24 C$0.075 -6.3% Special situation, poss trade
Provenance Gold PAU.cse WATCH C$0.085 8-Oct-23 C$0.085 0.0% Idaho gold drill play
LONG-TERM NON-MINING HOLD
Mene Inc. MENE.v adding C$0.48 6-Dec-20 C$0.115 -76.0% 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
Equinox Gold EQX May'24 U$4.42 30-May-23 U$5.57 26.0% Took sm.profit, disappointing
Adventus Mining ADZN.v May'24 C$0.305 7-Jan-24 C$0.445 45.9% bot out, nice win
SolGold SOLG.to May'24 C$0.22 19-Feb-23 C$0.165 -25.0% ran out of patience
2015 to 2023 annual closed positions in appendices below, 2009 to 2014 closed positions in editions IKN553 or earlier
Now for notes on just a few of our covered companies this week:
Bear Creek Mining (BCM.v): ADDING. As well as the planned purchase of Florida Canyon
(FCGV.v next week, I’m looking to add some BCM while it’s so unpopular at market. My
preferred “leverage to silver” trade and #2 behind the SilverCrest (SILV), the class act in the
sector, the bad quarter at Mercedes allows a cheap entry for exposure to Corani.
Western Copper & Gold (WRN.to) (WRN): A highly annoying drop just days after having
added to the position, WRN dropped along with the sector on the weakness in copper. The
issue with WRN is how it’s managed to lose all momentum from its C-suite shake-up and the
impression from Sandeep Singh’s new board is of one that’s back to settling in for the long
haul. So yes, oversold in the near term but if it rallies I may find myself selling and finding
another place for my copper exposure.
Amerigo Resources (ARG.to): In mitigation, 4c of the 16c (9.1%) lost by ARG last week is
covered by the performance dividend, as the market is in its rights to discount that 4c from the
share price once it went ex-divi on Tuesday. Still, it was a heavy reversal for ARG last week
even when you take into account the drop in copper prices and the C$1.59 this weekend puts it
firmly back on the shopping list as a way of playing stronger copper prices as Q3 becomes Q4.
8
Rio2 Ltd (RIO.v): That was some volume on Friday:
RIO spent the week getting steadily bid higher and
trading at a solid 60c, then came Friday lunch when
chunks of stock changed hands around lunchtime
(Americas), an hour’s worth of intense trading which
came to around 3.6m shares. I pinged company Chair
Alex Black about the action, he didn’t have any special
insight but did say that the company had been running
an online/virtual marketing campaign with specific desks
in North America so that may have stimulated some
action.
However, that’s not much more than second guessing
and not the baseline cause for RIO’s recent popularity.
We’re now in the Q3 period in which we expect RIO.v to finalize its financing package for Fenix
and announce the official start of the build-out. On that, Chair Black indicated to me that plans
are on schedule, the required permitting for the build should pop out the other end of the
Chilean system on time (now they have the key EIA
in-hand, the dependent permits become routine
paperwork) and the serious job of construction
SilverCrest Metals (SILV) (SIL.to): Annoyingly,
SILV didn’t ping my near-term target of U$10.54
before reversing, its top coming at U$1.0.25 last
week. Close but no cigar and when silver dumped, it
wasn’t going to escape its portion of the sell-off.
Still in very good shape, mind you.
Contango ORE (CTGO): The first pour rally
continued and added another buck to the share price, which is good. Definitely not married to
this position and the bitter taste left in my mouth from that surprise placement is still there, so
the right price and I’ll take profits.
Menē Inc (MENE.v): The churn at 11c to 12c continues, that’s all to say. FWIW I’ve kept an
eye on the luxury goods market with a view to the background to MENE’s client base and while
there’s weakness reported by plenty of luxury goods marques, a look at the details show that
the major problem is with their Chinese and Japanese clients. With North America and Europe
hanging tougher and MENE’s rock solid balance sheet allowing it plenty of time to weather a
storm, this is a great price for this stock and I don’t think it will last for long.
Orecap Inv (OCI.v): As in most weeks, we update on the underlying value of its (reasonably)
liquid assets using the tracking chart:
OCI.v: Marketable Secs, Investments in Assocs, Cash
value
ticker shares owned(m) PPS C$m Cents/share
AE.v 11.68 0.68 7.95 3.2
AE.v warrant 0.10 0.38 0.04 0.0
ARIC.v 8.33 0.60 5.00 2.0
ARIC.v warrant 4.17 0.40 1.67 0.7
QCCU.v 5.06 0.12 0.61 0.2
MIS.cse 24.71 0.035 0.86 0.3
Curprum privco 29.50 0.12 3.54 1.4
subtotal 19.66 7.9
Est.cash 1.50 0.6
Total 21.16 8.5
At 247.714 S/O
9
The 5.5c close on the week was on tiny volume of less than 5,000 shares Friday and makes OCI
look even cheaper than it is. Bet large on it recovering at least to 6c and if good news comes
from any one of those holdings, it could spring a lot higher. That’s the bet here.
Newcore Gold (NCAU.v): In my opinion, NCAU
got some reflected glory from the news on
Tuesday morning (3) that China’s Zijin was
investing $170m in Montage Gold (MAU.v), a late
stage exploreco-cum-developer with its flagship
Koné gold project, also in Côte d’Ivoire. Though
the Zijin move may be because it was rebuffed by
Solaris recently and won’t put its money into
another Canadian copper project, its choice of
MAU in Côte d’Ivoire is a thumbs-up on country
risk and that suits NCAU’s scene.
The Copper Basket
After twenty-nine weeks of 2024, The Copper Basket shows a gain of 7.73% to level stakes:
company ticker price 1/1/24 Shares out Market Cap current pps gain/loss%
1 NGEx Minerals NGEX.to 7.16 186.824 1576.79 8.44 17.9%
2 Solaris Res SLS.to 4.13 161.833 551.85 3.41 -17.4%
3 Marimaca Cop MARI.to 3.43 93.11 370.58 3.98 16.0%
4 Los Andes LA.v 11.80 29.53 301.21 10.20 -13.6%
5 Faraday Copper FDY.to 0.63 204.72 159.68 0.78 23.8%
6 Aldebaran Res. ALDE.v 0.89 169.819 159.63 0.94 5.6%
7 Arizona Sonoran ASCU.to 1.75 109.17 158.30 1.45 -17.1%
8 Hercules Metals BIG.v 1.38 231 152.46 0.66 -52.2%
9 Oroco Res OCO.v 0.375 236.911 85.29 0.36 -4.0%
10 American Eagle AE.v 0.26 116.75 79.39 0.68 161.5%
11 Element 29 Res ECU.v 0.18 106.25 33.47 0.315 75.0%
12 Kodiak Copper KDK.v 0.58 63.93 29.73 0.465 -19.8%
13 QC Copper QCCU.v 0.12 173.7 20.84 0.120 0.0%
14 C3 Metals CCCM.v 0.61 61.885 15.16 0.245 -59.8%
15 Camino Min COR.v 0.07 206.66 12.40 0.06 -14.3%
NB: All stocks in CAD$ Portfolio avg 7.73%
10
Our basket average dropped 2.6% on the week, the first negative one in a while though it has
to be said, our size of copper juniors and explorecos did better than the larger copper
companies and producers, shellacked by hot money leaving the sector as copper prices broke
through resistance. Four of our 15 stocks managed to swim against the tide and register gains
last week, (LA.v, MARI.to, ASCU.to, FDY.to) with two others remaining unchanged (OCO.v,
COR.v), leaving nine losers (NGEX.to, SLS.to, BIG.v, ALDE.v, CCCM.v, KDK.v, AE.v, QCCU.v,
ECU.v). Three were double figure percentage losers so we name and shame Solaris (SLS.to
down 12.3%), QC Copper (QCCU.v down 11.1%) and Kodiak (KDK.v down 10.6%).
The Copper Basket 2024, weekly evolution
Overall, a negative week for the metal but on due 25%
consideration this weekend, I’m left with a feeling 20%
that it could have been worse for the juniors. The 15%
real The reason for the weakness is obvious, the 10%
drop in copper prices. The words written on the 5%
U$4.40/lb level last week, “As noted in recent 0%
editions, I wouldn’t be particularly comfortable to
-5%
see copper return to U$4.40/lb but it would be
-10%
reason to panic out of positions, either”, carried
an implied message that things wouldn’t be good
if U$4.40/lb were broken and without putting too
fine a point on it, perhaps I should have kept my mouth shut. Here’s the 2024 YTD chart of the
near-dated Comex contract:
Sure enough, copper sliced through support and proceeded to go South at all speed. Ugh and
double ugh, sometimes you just have to hold your hands up and admit surprise about events,
admit mistakes, admit you got the call wrong and that’s where I am this weekend. Though still
fully convinced that what we’re seeing is a near-term trough in the price of copper before the
larger and longer-term supply deficit dynamic kicks in, this much weakness wasn’t in my
playbook. So let’s see what others have to say about last week’s copper action (4):
“A key political meeting this week in top metals consumer China failed to provide any detail on
further stimulus measures despite weaker than expected economic growth data for the second
quarter."
That’s sentiment in a nutshell, with the
clash of lower than expected GDP for Q2
(chart right) and the failure of China’s
government to provide the direct stimulus
measures it was looking for to prop up its
manufacturing sector. Add that to recent
secondary data such as real estate prices,
mix in a thought about copper inventories
piling up in SHFE and LNE warehouses in
Asia (see below) and the bearish view
won the day last week.
11
ts1naJ ht7naJ ht41 ts12 ht82 ht4bef ht11 ht81 ht52 dr3raM ht01 ht71 ht42 ts13 ht7rpA ht41 ts12 ht82 ht5yam ht21 ht91 ht62 dn2nuj ht9 ht61 dr32 ht03 ht7luj ht41 ts12
source: IKN calcs
It’s not all bad news though, as this quote from the same report points out:
"There's more buying from China recently, since most of them delayed their buying when the
copper price was high." said Matt Huang, head of research at BANDS Financial.
That also fits. China GDP may have missed forecasts, but it’s still +4.7% and it’s still using more
copper every year, as a check on the world copper usage stats (ICSG) will remind this
audience:
World copper usage, per month
(NB: Cut-down y-axis)
12
3122 9422 1712 7802 3602
0871
3212 6512 9902 9212 8012 9302 1812 5312 0912 2022 6312
5381
4222 2512 3712 8522 8812 0812 5322 8212 3622 7912 4612
5091
6032 7622 1832 1812 6022 9922 8332 9732 1532 5522 2832 9891 5022 9722
2500
2400
2300
2200
2100
2000
1900 1800
1700
1600
1500
1400
pes tco von ced 1202naJ bef ram rpa yam nuj luJ gua pes tco von ced 2202naJ bef ram rpa yam nuj luJ gua pes tco von ced 3202naJ bef ram rpa yam nuj luJ gua pes tco von ced 4202naJ bef ram rpa
KMT
source: ICSG
It’s easy to lose sight of the forest for the trees in this subject and while the current lax demand
period is undeniable, we’ve posited more than once that it’s more about China trying to dictate
price and end-users relying on stock to put pressure on the macro market. With the price back
where it is, seeing buyers step up (to replace depleted stock?) is what you’d expect from a
country that uses 58% of all copper produced on this planet and is still, despite the image,
expanding its economy rapidly. The other misnomer is to assume the world needs a full and
unalloyed roll-out of the Energy Transition in exactly the timeline and scale suggested at the big
world conferences (G7, Davos, etc). That’s not so and if Internal Combustion Engines remain
more popular than our overlords expected, the supply deficit in copper is still going to happen
as from 2025 (or late this year).
Bottom line: A temporary lag in demand does not and will not change 1) the direction of long-
term demand for copper and 2) the lack of new supply coming on line. The supply deficit is on
the way and 100kmt of copper shipped from China to Taiwan is chickenfeed next to what’s in
the pipeline. Be long copper.
On that note, we move to our weekly look at world copper inventories, data from Cochilco:
Another net-net 19,616 metric tonnes (mt) of copper was added to the three official
warehouse systems, moving the grand total to 550,884 this weekend.
Another net drop at the SHFE, but once again the 6,926mt total wasn’t much compared
to normal drawdowns for this time of year and leaves 309,183mt in stock. That’s a lot
of copper that hasn’t found a home, see the chart below for the visual prompt.
This story has gone on since May and this weekend we may have finally reached its
denouement. Back then, several industry channels reported that China was in the
process of exporting around 100kmt of copper, an unusual move for the biggest user of
the metal in the world (by far). This weekend, the 25,200mt added to LME warehouses
with 20,700mt of that into LME Asia storage, brings the five week total increase to just
over 96,000mt and essentially covers that strongly rumoured (though never official)
export dump. This weekend, LMNE warehouses have 231,425mt of copper under roof.
Comex added 1,342mt to its total and now has 10,277mt. That’s very low, but it’s also
two weeks of gains from the historical bottom. Now give it another week and a new
trend would be in place.
The dedicated SHFE chart shows the sticky, 300kmt+ level still hasn’t gone away. Add this to
the growth in LME stocks and there’s perhaps 250kmt or 300kmt of copper that would normally
have found an end user buyer hanging around Asia located futures warehouses. Enough to put
a dent in the spot price, it seems.
SHFE copper inventory levels, 2019 to 2024
400000
350000
300000
250000
200000
150000
100000
50000
0
13
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
Now for notes on some of our basket stocks:
NGEx Resources (NGEX.to): Down 4.2% on the week, trading in NGEX fit our opinion in
IKN791 that “…it’s understandable that NGEX would get some love as a neighbour play to the
(apparently) in-play FIL and that momentum may continue into the week ahead, don’t expect it
to last” closely. Yes, it popped a little further on Monday morning, yes it then sold down. But
today is not an exercise in toldyaso, the idea is to do a reality check and for that, this chart:
This desk is fully aware that over ten days, NGEX has done a lot better than the copper sector
median (COPX proxy here), but we’ve added its “sister stock” (for want of a better word) Filo
Corp (FIL.to) (FIL) because it and NGEX have followed almost exactly the same trajectory.
There is no reason for that. None at all.
Be clear; the jungledrums on FIL/Lundin approaching BHP and the two (three?) companies
considering a JV is no empty rumour. For sure it went deathly quiet last week (presumably BHP
laying down the law) and as a result FIL shares popped and faded in the same way as NGEX,
but this is one that rings absolutely true so if/when the news of a deal hits, FIL is the stock that
will benefit. But not NGEX, it’s in the same locale and under the same family umbrella, but any
deal on FIL is only the start of a process that would (not will) see a mine built by BHP up there.
NGEX is a different timeline, it has to deal with different partners (Japanese) and aside
Lunahuasi, it’s literally in a different country. As such, those of you clever enough for such
things may want to consider a long FIL/ short NGEX pair trade going forward, it looks like a
straightforward set-up to me.
Kodiak Copper (KDK.v): The Christopher Hitchens quote, known these days as Hitchens's
Razor, comes to mind: “That which can be asserted without evidence, can be dismissed without
evidence". KDK rose 15.6% the week before last on no news and for no reason, it lost 10.6%
and gave up nearly every penny of that move last week, also for no real reason. Explorecos do
these things sometimes, our task is to observe rather than ask why.
Solaris Resources (SLS.to): The worst performance on our list of 15 last week and the
reason is the one we’ve highlighted and banged the table about for literally years. This isn’t
simple “Ecuador risk” (though that’s a part of it), this is specific company risk due to its bad
culture and history of deception. When a company tells one group of stakeholders pone thing
and another group the diametrically opposite, it’s only a matter of time before the groups
confer and compare notes and discover the lies told to one, or the other, or both. My hope is
that SLS becomes a case study in years to come for mining companies wanting to know how
not to conduct CSR.
Arizona Sonoran (ASCU.to): Up 7.4% on the week, ASCU is the one that released real deal
fundies news on us with its updated resource (5). After taking a first pass look at the updated
resource, I’m going to defer on any detailed comment or judgment until I’ve had a closer look,
which should happen this week. However, I will say at this early stage that I’m more impressed
with the update than I expected to be and the market move last week was justified in my view.
The problems arise when we start considering the timeline ASCU seems to be suggesting for
development to the point where a buyer steps in, there’s no real reason to own ASU right now.
Going to think some more, though.
The Producer Basket
After 29 weeks of 2024, the Producer Basket shows a gain of 28.18% 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 54.17 47.00 13.6%
2 Agnico Eagle AEM 54.85 497.971 36.93 74.17 35.2%
3 Barrick GOLD 18.09 1756 32.29 18.39 1.7%
4 Franco-Nevada FNV 110.81 192.119 23.93 124.57 12.4%
5 Pan American PAAS 16.33 364.439 8.21 22.52 37.9%
6 Lundin Gold LUGDF 12.64 238.22 4.09 17.15 35.7%
7 Hecla Mining HL 4.81 617.768 3.64 5.90 22.7%
8 Eldorado Gold EGO 12.97 202.472 3.33 16.44 26.8%
9 Dundee PM DPMLF 6.43 183.278 1.57 8.54 32.8%
10 Wesdome Gold WDOFF 5.83 148.95 1.42 9.51 63.1%
All prices and stock quotes in U$ Port. avg 28.18%
As is so often the case, ten out of ten winners one week turns into ten/ten losers the next, but
this time there’s a wrinkle in the story. Yes, all ten of our basket stocks lost ground on the week
but most of those losses were small, three of them just 0.1% down (LUGDF, HL, EGO) and the
only one of any notable size was the 4.5% drop in Franco-Nevada (FNV). All that conspired to
keep the correction to a minimum, and we’re still up by loads on the year and ahead of the GDX
benchmark by a large 7.6%.
The 2024 Producer Basket: Weekly performance and
40% comparative to GDX control
30%
20%
10%
0%
-10%
-20%
14
ts1naJ ht7naJ ht41 ts12 ht82 ht4bef ht11 ht81 ht52 dr3raM ht01 ht71 ht42 ts13 ht7rpA ht41 ts12 ht82 ht5yam ht21 ht91 ht62 dn2nuj ht9 ht61 dr32 ht03 ht7luj ht41 ts12
The 2024 Producer Basket: Percentage diff. between
GDX benchmark & basket (negative= IKN ahead)
ikn 2.0%
gdx control 1.0%
0.0%
-1.0%
-2.0%
-3.0%
-4.0%
-5.0%
-6.0%
source: IKN calcs -7.0%
-8.0%
-9.0%
ts1naJ ht7naJ ht41 ts12 ht82 ht4bef ht11 ht81 ht52 dr3raM ht01 ht71 ht42 ts13 ht7rpA ht41 ts12 ht82 ht5yam ht21 ht91 ht62 dn2nuj ht9 ht61 dr32 ht03 ht7luj ht41 ts12
source: IKN calcs, NYSE data
This isn’t a difficult one to decode, the market is clearly pricing in a strong Q2 earnings season
for precious metals producers so, with gold holding up and Wall St smelling treasury
improvements in the near-term for once we saw GDX and all who sail in her adopt a more
defensive position.
Franco-Nevada (FNV): The only exception on our
list last week was Franco-Nevada (though away
from our 2024 Producer Basket there were other
weak performances, such as the “leveraged to gold”
Equinox and that was all about its exposure to First
Quantum (FM.to) and the ongoing saga at Cobre
Panamá. See ‘Regional Politics’ below for more on
that, here we note price action and the way FM
reacted in this ten-day chart, dragged down by FM
compared to its precious peers.
The TinyCaps List
After 29 weeks of 2024, the TinyCaps show a gain of 57.57% to level stakes:
company ticker price 1/1/24 Shares out Mkt Cap current pps gain/loss%
Aston Bay BAY.v 0.065 248.82 27.37 0.11 69.2%
Awalé Res ARIC.v 0.135 85.319 51.19 0.60 344.4%
District Metals DMX.v 0.170 106.98 37.44 0.35 105.9%
Endurance Gold EDG.v 0.18 150.136 21.02 0.14 -22.2%
Kirkland LDC KLDC.v 0.100 88.625 4.43 0.05 -50.0%
Latin Metals LMS.v 0.075 71.476 7.15 0.10 33.3%
Palamina Corp PA.v 0.130 71.285 11.41 0.16 23.1%
South Star STS.v 0.750 48.8 26.35 0.54 -28.0%
Surge Copper SURG.v 0.090 284.79 42.72 0.15 66.7%
Viva Gold VAU.v 0.120 118.384 18.94 0.16 33.3%
Prices in CAD$, data from TSXV basket avg 57.57%
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.
A week of “Down One”. Just two of our TinyCap
TinyCaps, 2024 weekly tracker
Basket stock registered week-over-week gains 100%
90% (LMS.v, PA.v) and the other eight were losers, but
80%
there were no big losses and in fact, no fewer than 70%
six of those eight were down exactly one penny. The 60%
50%
overall basket average lost a modest 3.39% and 40%
30%
there are more interesting sectors than the tinycaps
20%
10%
15 0%
ts1naJ ht7naJ ht41 ts12 ht82 ht4bef ht11 ht81 ht52 dr3raM ht01 ht71 ht42 ts13 ht7rpA ht41 ts12 ht82 ht5yam ht21 ht91 ht62 dn2nuj ht9 ht61 dr32 ht03 ht7luj ht41 ts12
source: IKN calcs, TSX data
to consider this weekend. A quiet one for the small guys.
Latin Metals (LMS.v): Just one note on a TinyCap component this week, mostly to show the
irrelevance of some of these moves. Latin Metals was
the week’s big winner in percentage terms, up 17.7%
but what you don’t see on the daily chart is the near
total lack of volume as last week, the stock managed
just one trade of 15,000 shares all week.
What’s more, that’s the norm these days as total volume
for all of June and July combined comes to less than
200,000 shares. The cherry on the top being that nearly
half of that total was a single 91,000 share trade in early
July. So don’t put too much in the constructive shape of
this YTD chart (right), it would take just one seller of
modest size to dump it back to 7c.
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
Mine development times in The USA and around the world
This week saw S&P Global (SPGI) publish a report entitled “Mine Development Times: The U.S.
in Perspective” that sought to lay out the reality of the permitting and development process of
mines in The USA. It’s a 28 page PDF, you can get your copy on this link…
https://cdn.ihsmarkit.com/www/pdf/0724/SPGlobal_NMA_DevelopmentTimesUSinPerspective_June_2024.pdf
…and I hope you do, so instead of a footnoted link you have it looking at you here (just copy
and paste). As the title suggests, the report centres on the issues faced by mines and projects
in The USA but as it takes in data from 268 projects from around the world (including 13 USA,
29 Canada, 30 Australia) it also offers perspective on the bigger picture. Take for example this
chart showing development times for both operating and non-operating mines, with the
estimates for the latter coming from Capital IQ:
Plenty of data to chew on in the report, consider your appetite whetted.
Panama: The Cobre Panamá legal battle begins
In IKN790 two weekends ago and “Panama: Better news for Cobre Panamá and First Quantum”
we expressed surprise that new President José Raúl Mulino had opened the debate on the
suspended mine as quickly as he did. Last week came as a return to the more logical path,
when the President first announced (6) he would “start talks in the months ahead” with the
16
company, as well as opening the idea of “opening to close” the mine again to ensure an orderly
closedown. In response, FM announced its ICSID/CIADI international tribunal case was now
activated and they were looking for U$5Bn in compensation. On this news, Mulino took to the
airwaves again as seen here (7):
Panama will not be intimidated by the arbitration proceedings that various companies have against
the country for the suspension of operations at the First Quantum Minerals copper mine in Donoso,
Colón province, as indicated by the President of the Republic, José Raúl Mulino, on July 18, during
his first weekly meeting with the media.
"In order for me to sit down with government representatives with the companies that filed
arbitrations against our country, those processes must be suspended. Panama is not going to sit
down with a gun to its head to resolve the problem," he said. Mulino's comments come after it was
announced on July 17 that the Franco-Nevada company filed a $5 billion lawsuit against Panama
for the closure of the mine, which is added to the other $57 billion in arbitrations against Panama,
which are being carried out by other suppliers and investors.
This one is going to take time, with the first step being the completion of environmental studies
at the site by the government in order to get (what they say will be) a neutral third party
opinion on what can happen there. As ICSID/CIADI cases take literally years, expect this story
to go cold for a few months then, at some point, we’ll find out whether the two sides are willing
to talk to each other.
Peru: When a nation protests in silence
If you didn’t hear anything about the national strike held on Friday in Peru, don’t feel left out.
The national media is as complicit with the government of Dina Boluarte as its Congress these
days, so coverage of the national protest was minimal at best even in the country and in Lima,
you would have been hard pressed to find any news about the multitude of marches and
protests held.
Venezuela: Next week’s Presidential election
I’ve been asked by several people for a couple of words on the events coming up next weekend
in Venezuela, the Presidential Election of Sunday, July 28th, so even though this has absolutely
nothing to do with our brief on following mining-related politics in LatAm you get this brief
segment. First up, if you believe the polls then you’ll expect a landslide victory, the only
question is to decide who gets the landslide.
At least five government sponsored polling companies put support for current
President Nicolás Maduro of the PSUV Party at between 56% y el 71.6% with all of
them predicting easy victory. His main rival, Edmundo González Urrutia of the right
wing alliance is given between 20.5% and 24% support
Three apparently independent polling companies have almost the exact opposite,
with Edmundo González given a lead of 11%, 34% and 37% depending on your
company.
For those not aware, Señor González Urrutia is the stand-in candidate for María Corina
Machado, the main opposition candidate who was barred from running by the government for
vague reasons (conspiracy, being officially naughty, etc) but to his credit, Edmundo González
agreed to step forward as the figurehead of the opposition and basically run in her place as the
united opposition candidate.
If the election were free and fair there’s little doubt at this stage that Edmundo González would
win and in a perfect world, become the next President. He’s then dissolve Congress, resign
himself, call new elections and at that point, we’d see Maria Corina Machado step forward, win
the re-run and become a legitimately elected democratic President of Venezuela. Sadly, this is
not a perfect world and we should all be warned that if the Maduro government can fake
polling results the way it’s been doing, it can also fake the election result. How exactly Maduro
wins is up for debate, as he may “get the votes” by obligatory voting of Venezuela rank and file
(bosses give a “show me a photo of your vote for Maduro on Monday or lose your job”), simply
faking the election numbers or perhaps a combo of the two. The other way it may go down is
to allow the preliminary result, then find a way of annulling the result or perhaps even more
bare-facedly, refusing to hand over power and governing by open dictatorial force. But there’s
17
no way the current government hands over power quietly, as corruption runs very deeply and
thousands of people running the PSUV Party apparatus, as well as many high ranking military
officers and assorted public company functionaries, would fear long jail sentences once the
books were opened and the new government could see where all the money has gone.
The bottom line to this brief heads-up: Nicolás Maduro and the PSUV party will not be dislodged
easily and there’s no reason at all to expect them to adhere to the normal rules of democracy. I
dno’t know exactly how it’s going to go down but if I had to bet, I’d go for a fake result next
Sunday that claims Maduro won by a clear (though not massive) margin and after that, he says
he is willing to sit down with opposition candidates in order to work out a deal that allows some
sort of peaceful co-existence. In other words, what happens after Sunday is more important
than what happens on Sunday and that all depends on how the general public reacts to an
election result they will claim is false. On this and putting my own preferences aside, we can
expect plenty of official and public claims of election rigging as well as statements from
international bodies, but what matters is the street and for better or worse, I don’t see a
Venezuelan public with the type of will to organize the massive, massed long-term protest
rallies that would be required for a “vox populi” movement to topple the current government.
As such I don’t expect much to change in Venezuela and a year or even three months from now
you’ll be worried about other things.
Chile: Codelco damns itself by faint praise
Further to last week’s note on the recent improvement in Chile’s copper production, on
Thursday we had the Boric government’s Chair of Codelco tells reporters that the State-run
company would improve its numbers compared to last year and as copper supply and demand
is currently a hot topic, the words got English language coverage (8):
Codelco chairman Maximo Pacheco said on Thursday that the state-run copper giant
expects production this year to outdo 2023, with recovery expected in the second half of
the year.
“We have reaffirmed our commitment for 2024 production to surpass 2023,” he said.
After years of sliding production at the world’s top copper producer, Codelco is behind
target for production in 2024, and analysts say it faces an uphill battle to make up lost
ground with a second-half turnaround.
Pacheco said several elements were in Codelco’s favor for the rest of the year –
maintenance work was finished, new projects were going online, the company had a
solid budget and the kinds of weather-related impacts from earlier this year were not
anticipated.
“I’ve always thought that the second half of the year was the half when we would start to
see recovery, compared to the second half of last year,” he told reporters at an event.
That report continues on the link and if you click through you’ll note that at no point in his
comments were specific numbers mentioned. There’s a good reason for that. To date, Codelco
is slightly behind on its 2024 guidance and while the second half of the year may well improve
(in fact it would be a surprise if it doesn’t), even if Codelco doesn’t buy the 10% of Quebrada
Blanca it wants to buy from fellow State company Enami (for $500m in a controversial proposed
deal, more here (9) if you’d like back story) we should see an improvement and numbers that
beat 2023. The problem is…
NB: CUT DOWN Y-AXIS
Chile: Codelco copper production per year, 1990 to 2024(e)
18
226,1 276,1 237,1 807,1 437,1 876,1 885,1 816,1 816,1
644,1
523,1 193,1
2,000
1,900
1,800
1,700
1,600
1,500
1,400
1,300
1,200
1,100
1,000
3102 4102 5102 6102 7102 8102 9102 0202 1202 2202 3202 tse4202
MMT Cu
source: Cochilco
…2023 was so bad it would be outright shameful not to beat it and even 2022’s production
number was lack compared to what it used to churn out on a regular basis. To be fair,
Codelco’s production slump needs to bottom out before it improves and that’s not timed to
calendar years, but the depth of the slump means that even if 2024 is “better”, the real
description should be “less worse” and it’s going to take a lot more to get it back to a decent
run rate worthy of what was for many years the biggest copper producing entity in the world
(now #3 behind BHP and Freeport).
Market Watching
Bear Creek Mining 2q24 production
We weren’t expecting much from BCM this quarter, what with the company signaling 2024 as a
transition year in which it would need to do heavy lifting at Mercedes and how it had declined
to offer production guidance this year.
However, the 9,304 oz gold produced in BCM: Mercedes quarterly production
Q2, as revealed on Thursday (10), was
below our expectations and rough guess
of 12k oz or so. Here’s how that headline
production number compares to previous
quarters and as fixed costs haven’t
changed at its producing mine, it’s not
difficult
This time last weekend we noted the
company’s decision to tap its credit line
and assumed it would continue to do so in
the final two allowable tranches in July (now) and August, finishing the brief note with, “…we
look to the upcoming Q2 report to see if Mercedes is still fracturing cash. If not, this looks very
cheap this weekend.” With this result and the generalized weakness in silver last week, the
cheap got even cheaper.
BCM dipped under the 30c line on this news and while there were buyers who stepped up, the
30.5c close is still the lowest since the big move when
silver broke out and dragged the complex up. The NR
notes that the lower throughput didn’t surprise the
company and gave its explanation, based around works
enacted at the mine and a new lateral ramp, expected to
improve production in the future.
The decision to develop the new lateral ramp at
Marianas was made knowing that there would be a
reduction in the Au ounces produced in mid-2024.
However, along with the new ventilation raise, which will
19
1089 07111 36631 83021 2129 5519 87431 82221 4039
Oz Au
20000
18000
16000
14000
12000
10000
8000 6000
4000
2000
0
2q22 3q22 4q22 1q23 2q23 3q23 4q23 1q24 2q24
source: company filings
BCM Mercedes: Tonnes mined/milled
1.38 0.221 4.621 2.841 0.821 0.241 0.431 0.431 5.121 1.521 5.321 2.621 0.811 0.631 0.601 0.901 1.39 7.59
kmt
tonnes mined
160 tonnes milled
140
120
100
80 60
40
20
0
2q22 3q22 4q22 1q23 2q23 3q23 4q23 1q24 2q24
source: company filings
improve cycle times and accelerate mining rates at the San Martin deposit, the Company
anticipates production to improve in the latter half of the year.
Reading between the lines there isn’t difficult, as “mid-2024” means Q2 and Q3 while “the latter
half of the year” means that while production may improve in the latter part of the current
quarter, numbers won’t get better until Q4. In other words, BCM is setting us up for two soft
quarters and not just one, this fits with its decision to tap its credit line further, of course. We
therefore adjust our expected operating returns for the next two quarters to operating losses of
$67m and $3m respectively, however…
BCM: Operating and Net earnings, per qtr
4
2
0
-2
-4
-6
-8
-10
-12
-14
-16
-18
20
22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 tse42q2 tse42q3
U$m
Op earnings
Net earnings
source: company filings
…it’s not going to make that much difference to the balance sheet. The assets charts (one with
fixed assets, on current only) assume BCM will be able to retain sufficient treasury to keep
operations flowing:
BCM.v: Assets
300
250
200
150
100
50
0
The liabilities will take another small dent from the expected loss and working capital is now
forecast to drop further, but as we pointed out in our main analysis on the company in IKN786
dated June 9th, Buying Bear Creek Mining (BCM.v), “…this is one of the rare occasions when a
balance sheet in a junior miner looks worse than it actually is” because just over U$70m of that
ostensibly current liability is debt that doesn’t get triggered until 2028. I’m not saying that this
is a good thing, what I am saying is that BCM’s financial situation needs more than a cursory
glance at its basic numbers and those claiming that it’s now teetering on the edge of
bankruptcy simply do not know what they’re talking about.
12q4 22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 tse42q2 tse42q3
U$m fixed BCM.v: Current Assets
other current 30
inventory
cash 25
20
15
10
5
0
source: company filings
12q4 22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 tse42q2 tse42q3
U$m
other current
cash
source: company filings
BCM.v: Liabilities breakdown per qtr
200
180
160
140
120
100
80
60
40
20
0
12q4 22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 tse42q2 tse42q3
U$m
LT liab
total current BCM.v: Working Capital per qtr
source: company filings
5.22 9.71
7.43-
5.34- 2.15- 0.06- 5.75-
1.66-
7.98- 2.88- 0.19- 0.39-
40
20
0
-20
-40
-60
-80
-100
12q4 22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 tse42q2 tse42q3
U$m
source company filings
The bottom line: I’m going to buy some more BCM. This so far has been a small, speculative
way of adding leverage to silver and with the news last week that indicates movement at its
main Corani project, there’s a lot of latent value on offer here with silver now trading where it is
(and yes, even with its drop away from the 3-handle). We should expect permitting news from
Corani at any moment and that should come with a re-worked mine plan that includes the new
higher estimate for capex but with input prices for silver and other metals that improve overall
NPV by the reputed 160%.
This is a speculative trade and even with a sizeable addition, it won’t be anywhere near as big
as my main silver trade in SilverCrest (SILV). I certainly understand the selling in BCM last week
and there’s no doubt that even a generous opinion would be that 2024 is a “transition year” for
the troubled company, but the fact remains that the market has missed how much the new
price deck for silver changes project economics at Corani. This level is a great place at which to
add, I’m going to partake.
Conclusion
IKN792 is done, we end with bullet points:
Today’s trade call in Florida Canyon Gold (FCGV.v) is on little more than a tip-off from a
friend. Be clear about that. However, also be clear that this is a great opportunity to
make a quick profit as the intel is strong.
I’ve never had an issue about averaging down in a loser, mostly because the world of
junior mining is unlike the normal one where such activities are frowned upon. The
volatility of the juniors makes for great entry points when you don’t expect them and in
Bear Creek (BCM.v), the soft production quarter has left a cheap entry into a stock
that’s all about Corani these days.
And on the subject of oversold, the copper drop last week is a pain but this window
won’t last forever.
Wish they were all as concise as this issue.
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.floridacanyongold.com/English/home/default.aspx
(2) https://www.newsfilecorp.com/release/216812/Florida-Canyon-Gold-Announces-Binding-Agreement-to-Sell-
Mexican-Business-Unit
(3) https://www.montagegold.com/news/montage-gold-announces-strategic-investment-by-zijin-mining-c170m-equity-
raise-launched-to-advance-the-kon-project
(4) https://www.hellenicshippingnews.com/copper-extends-downturn-to-three-month-low-on-china-economic-gloom/
(5) https://arizonasonoran.com/news-releases/arizona-sonoran-updates-cactus-project-mineral-resource-estimate-to-
7.3-b-lbs-of-copper-in-m-i-and-3.8-b-lbs-of-copper-in/
(6) https://www.bloomberg.com/news/articles/2024-07-18/panama-promete-tener-conversaciones-con-first-quantum-
sobre-mina
(7) https://www.newsroompanama.com/news/mulino-says-panama-will-not-be-intimidated-by-copper-mine-arbitrations
21
(8) https://www.mining.com/web/copper-output-from-codelco-this-year-to-top-2023-chairman-says/
(9) https://www.biobiochile.cl/noticias/nacional/region-de-valparaiso/2024/07/19/mineros-de-petorca-y-san-felipe-
rechazan-venta-del-10-de-quebrada-blanca-a-codelco.shtml
(10) https://bearcreekmining.com/news/2024/bear-creek-mining-announces-q2-2024-mercedes-production-of-9-304-
ounces-of-gold-machine-learning-assisted-exploration-program/
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
22
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
23
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
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Stocks To Follow Closed Positions 2015
Closed in 2015 closed close price
Argonaut Gold AR.to jan'15 C$1.47 14-dec-14 C$2.53 72.1% Big gain small time, profit taken
Amerigo Res ARG.to jan'15 C$0.405 20-jul-14 C$0.285 -29.6% Given up on weak Cu prices
Reservoir Min. RMC.v jan'15 C$6.05 18-jun-14 C$4.12 -31.9% sold on Cu downturn
Coro Mining COP.to jan'15 C$0.075 26-jan-14 C$0.035 -53.3% sm, sold on Cu downturn
Fortuna Silver FSM mar'15 U$4.12 10-nov-14 U$3.75 9.0% Short used as hedge
GoldQuest Min. GQC.v mar'15 C$0.26 27-oct-13 C$0.085 -67.3% given up ghost
Rio Alto Mining RIO.to apr'15 C$2.30 07-apr-11 C$3.57 55.2% Top pick, bot out, big win
Timmins Gold TGD jun'15 U$0.60 19-apr-15 U$0.62 3.3% near-term trade, out of time
First Majestic AG jul'15 U$10.51 10-aug-14 U$4.55 56.7% horrible failed trade
NovaCopper NCQ.to jul'15 C$1.05 09-apr-14 C$0.50 -52.4% no more Cu exposure, sm sell
McEwen Mining MUX aug'15 U$0.695 21-jul-15 U$0.92 32.4% Closed nearterm flip for win
Midas Gold MAX.to sep'15 C$0.39 21-sep-15 C$0.35 -10.3% Sm. trade idea that didn't work
New Gold NGD oct'15 U$2.18 23-aug-15 U$3.05 39.9% trade closed, profit taken
Legend Gold LGN.v nov'15 C$0.085 01-mar-15 C$0.035 -58.8% tiny "land grab" idea, failed
Timmins Gold TGD nov'15 U$0.245 20-sep-15 U$0.15 -38.8% small near-term loser
Please note that due to space considerations closed positions 2009 to 2014 are now
available on request, or were published in any edition to IKN553 (end 2019).
Important Disclosure
The information and opinions contained within this report reflect the personal views of the author and therefore all
material within should not be construed as accurate or reliable or be utilized as advice for investment or business
purposes. Independent due diligence and discussions with ones own investment and business advisor is strongly
recommended. Accordingly, nothing in this report should be construed as offering a guarantee of the accuracy or
completeness of the information contained herein, as an offer or solicitation with respect to the purchase or sale of any
security or as an endorsement of any product or service. All opinions and estimates included in this report are subject to
change without notice. It is prohibited to copy or redistribute this report to any type of third party without the express
permission of the author.
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