6 The IKN Weekly, issue 804 — Oct 15, 2024
The IKN Weekly
Week 804, October 13th 2024
Contents
This Week: In today’s edition, Gratitude in Canada and sales in The USA, Political risk
management and hot buttons.
Fundamental Analysis: SilverCrest Metals (SILV) (SIL.to) Q3 production and thoughts on
Coeur Mining (CDE).
Stocks to Follow: Florida Canyon (FCGV.v), SilverCrest (SILV) (SIL.to), Eldorado Gold (EGO),
Rio2 Ltd (RIO.v), Red Pine Exploration (RPX.v), Orecap Inv (OCI.v), Newcore Gold (NCAU.v),
Minera Alamos (MAI.v), Bear Creek Mining (BCM.v), Provenance Gold (PAU.cse), Aldebaran
(ALDE.v), Fitzroy Minerals (FTZ.v).
The Copper Basket: Overview, Element 29 (ECU.v), C3 Metals (CCCM.v), QC Copper & Gold
(QCCU.v), Hercules Metals (BIG.v).
The Producer Basket: Overview, Dundee Precious Metals (DPM.to) (DPMLF), Lundin Gold
(LUG.to) (LUGDF), Barrick (GOLD) (ABX.to).
The TinyCaps Basket: Overview, Awalé Resources (ARIC.v), Palamina Corp (PA.v).
Regional Politics: Mexico: calmer heads prevail, Colombia courting problems with COP16,
Burkina Faso and the Common Knowledge Game.
Market Watching: Amerigo Resources (ARG.to) Q3 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
In today’s edition
I still owe you all a report and analysis of Ascot Resources (AOT.to) and that was going
to be today’s main fundies event, but as the week wore on the results posted by
SilverCrest (SILV) (SIL.to) took over my brain time and at this stage, are more pressing
than the potential for a rescue deal on a distressed mine. The AOT note will happen
(the number work is mostly done) but today we focus on the SILV deal with Coeur
Mining (CDE) and try to sketch out why SILV CEO Eric Fier likes it so much.
The other numbercrunch today is Amerigo Resources (ARG.to), which filed a strong set
of numbers and hints that its costs profile is going to impress when it files its financials.
See ‘Market Watching’ for that piece.
Regional Politics again focuses on Mexico, but this time we’re happy to report on
progress in its new Congress because things are going more smoothly for the mining
sector. We called it all a tempest in a teacup even when the drama was at its peak in
July and August and that call is being vindicated by events and news flow now that
Sheinbaum has taken over from AMLO.
Will I annoy some voters in today’s intro section? Yes, possibly, but be gentle because
my position is not about favouring one-or-other candidate, ticket or party, it’s straight
shot risk management.
There are other things in this week’s edition. There are always other things.
1
Gratitude in Canada and sales in The USA
A reminder that tomorrow Monday October 14th is Canada’s Thanksgiving Day observance
holiday and Canadian markets will be closed for business until Tuesday. However, US
Thanksgiving Day isn’t until late November and its markets are open as normal. It’s also turkey
and trimmings in The USA some three weeks after the Presidential election, which feels like an
eternity here in mid-October.
As for macro data, we should have one eye on US Retail Sales, due out on Thursday. It might
not be the #1 influence over gold and the precious metals sector, but the market is now
scraping for any clue as to what the Fed does next (we shifted from a consensus of “25bps cut
in November” to “no cut” to “Yeah, it’ll be 25bp” in the space of the last ten trading days) so
any big variance from the current consensus of +0.2% (1) has the potential to move the
market more than in other months.
Political risk management and hot buttons
As noted in previous intros, this is not a subject I want to tackle but at some point, it becomes
too much of an elephant in the room. However, before getting to the point I want to make my
position as clear as possible, what with this being a contentious subject that is bound to annoy
at least some of you (not my intention, I promise). I’m politically neutral on the US election and
that’s the truth, take it or leave it. It’s also after watching the developing race fairly closely as
an obviously outsider (a Brit living in South America is as close to “no dog in this fight” as it
comes). Push me for an opinion and I’d say both candidates are weak and The USA has to
make a “least worse” choice for its leader of the next four years more than anything else, but
either way I’m definitely not one of the “USA Is Doomed If [insert candidate’s name] Wins”
people. Perspective is easily lost at the sharp end of hard-fought elections, particularly when
they are dominated by negative campaigning from both sides. That’s very true here, but it
doesn’t negate the basic fact that The USA is not some South American Banana Republic and
never will be, its institutions remain in place and those famous “checks and balances” aren’t
those of a non-serious country. Take that from someone who has spent nearly three decades
up close and personal with non-serious countries. That said, please note that several months
ago I made the call that I thought Trump would win and since then, I’ve seen no real reason to
change position. It’s not a hard-held call and it wouldn’t shock me to the core or hurt my ego to
be wrong, however it will hurt my back pocket a little. At the time, a friend who read my call
back then and disagreed offered a wager on the result, which I accepted. Therefore, please be
advised that I have a modest sum of money riding on my opinion and if you consider that bias,
then so be it. I don’t think so.
Less about me, now something about you and the moment I risk alienating my own audience
(hot button issues…is this wise?): After 16 years of publishing The IKN Weekly I happen to
have a decent handle on the demographics of its readership and if you happen to be a male
North American citizen (USA or Canada) who votes Republican/Conservative (or is at least
happy to be labeled a fiscal conservative), you profile as a typical reader. Obviously that’s not
all of you and I do not presume, but when push comes to shove I’d expect 70% of those
reading these word to prefer Donald Trump over Kamala Harris words, be they eligible to vote
in next month’s US Presidential election or not. Meanwhile and separately, an even safer bet is
that nearly all readers of The IKN Weekly have a vested interest in seeing the price of gold go
higher, the nature of this publication and all that. That said, we get to the point of today’s intro:
Be careful what you wish for.
I’m old enough to remember what happened in 2016, when Donald Trump beat all forecasts
and Hillary Clinton (not least because it was a shock
to me). I also remember how gold rallied in the first
couple of hours after the surprise victory, only to
reverse course quickly as the real Trump trend took
hold (right). The financial world moved out of bonds
like there was no tomorrow and piled into US
equities. Gold lost 10% of its dollar value in the final
two months of 2016, with even greater damage
2
done to precious metals stocks (also crystal clear in the memory, sad to say).
So to this year, 2024: Take your pick and choose your poison, but it’s either a tight race that
still slightly favours Harris in what’s arguably a technical dead heat…
…or if you believe The Money, Trump has a slight advantage…
…(and to those who doubt Polymarket numbers, I say it’s unlikely $1.24Bn of bets would
remain unhedged and ignored no matter whether US citizens can access the market or not), but
either way, this is going to be a tight vote. Let us therefore say for simplicity’s sake that this
most important of world political events with ramifications that extend far beyond the boarder
of The USA is a 50/50 flip. From that, we can also assume that if Trump wins, the news will be
taken as a positive by the financial community (Wall St etc) and that nervousness and reticence
about buying the current market may quickly turn into the same Risk On scenario we saw in
late 2016. We could also delve into the geopolitical side of things and note that Trump is less
enthusiastic about the continued conflict in Ukraine, a Trump win may even tip the balance in
the current war scenario in and around Israel, but that’s probably me stepping a little too far
out of line and getting party political, something this intro is trying hard to avoid.
I’m keenly aware this is a Hot Button Issue and would rather ignore it until it goes away but
risk management is the theme, more than party political preferences, so we need to face the
possibility of gold getting sold down on a Trump victory. A propose, I now backtrack and
apologize for the rather crass “be careful what you wish for” above, which survived the edit
only because it focuses the attention. At any given moment, there are more important things in
this world than the price of gold and this intro isn’t trying to gaze deeply into any crystal balls
and predict where gold might be in three months, or six, or even a year from now. By then
other influences are likely to have taken hold and gold may be trading higher whoever is in the
Oval Office, but that doesn’t discount our risk management message for October 2024: A
3
Trump victory is a likely boost US equities, the same Risk On scenario as 2016 and a natural
headwind to the price of gold. Anyone long gold, particularly long its derivative plays such as
precious metals mining stocks, should at least consider what a down leg in the monetary metal
would do to their overall portfolio in the event of a Trump victory next month. I cannot
emphasize enough that this is not a prediction note on the US Election, it’s not a personal
forecast either. This is all about risk management and how it’s better to consider potential
scenarios before they happen. It pays to be prepared.
Fundamental Analysis of Mining Stocks
SilverCrest Metals (SILV) (SIL.to) Q3 production and thoughts on Coeur (CDE)
“Still, it is an error to argue in front of your data.
You can find yourself insensibly twisting
them round to suit your theories.”
Sherlock Holmes, “The Adventure of Wisteria
Lodge”, by Sir Arthur Conan Doyle
Overview
Now under offer from Coeur, the 3q24 production numbers as reported by SilverCrest Metals
(SILV) (SIL.to) on Thursday October 10th (2) probably didn’t move the market as much as they
would have done if SILV were still a standalone trade. As such, my original intention was to run
some minimum coverage on the numbers and then get back to the overdue thoughts on Ascot
Resources (AOT.to), but the more I thought about the SILV Q3 numbers, the more it occurred
to me that a live candidate to replace the stock in people’s portfolios may be CDE. In other
words, swallow the merger and hold the news shares. The result is a longer look at SILV’s Q3,
some thoughts on Coeur and what the eventually fused company may offer the investor.
SILV Q3: First up we do the numbers offered in last week’s NR, starting with the headliners:
SILV: Silver production & sales, per qtr
Silver production: 1.41m oz
Silver sales: 1.45m oz
Gold production: 14,928 oz
Gold sales: 15,204 oz
Those are good numbers, all slightly over our house
estimates (that have been slightly adjusted upward
for 4q24, as seen above) but they get even better
when we check out the data behind the headlines:
4
41.0 1
63.1 54.1 35.1 72.1 4.1 54.1 54.1 54.1
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 42q3 tse42q4
Moz Ag SILV: Gold production & sales, per qtr
prod
sales
source: company filings
00411 00241 00431 00541 00161 00051 00541 40251 00541
20000
18000
16000
14000
12000
10000 8000
6000
4000
2000
0
22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 42q3 tse42q4
Oz Au
prod
sales
source: company filings
SILV: Ore mined
00056 00636
00447 00838 00687 73758
910001
922421
mt
140000
120000
100000
80000
60000
40000
20000
0
4q22 1q23 2q23 3q23 4q23 1q24 2q24 3q24
source: company filings
SILV: Silver head grade (g/t)
283 914 944 314 014 974 814 663
SILV: Gold head grade (g/t)
550
500
450
400
350
300 250 200
150
100
50
0
4q22 1q23 2q23 3q23 4q23 1q24 2q24 3q24
source: company filings
76.3 60.4 48.4 53.4 82.4 79.4 63.4 78.3
5.5
5
4.5
4
3.5
3 2.5 2
1.5
1
0.5
0
4q22 1q23 2q23 3q23 4q23 1q24 2q24 3q24
source: company filings
Ore mined (and milled, not shown) shot up by over 24,000mt on the quarter, while head grades
of both silver and gold dropped significantly (all charts above). This is right in line with
expectations and the new mining plan. If we go back to July 31st and the updated Technical
Report published by SILV (that caved the stock price
at the time and was the trigger for The IKN
Weekly’s original coverage and interest in the
stock), the company announced that it would move
from mostly cut-and-fill mining to mostly long-hole
stoping in order to cut costs and simplify the mine
plan. In the words of the NR that day, “The use of
this bulk mining method, when combined with
narrower veins, has led to a reduction in LOM mined
grade of approximately 18%.” At the start of 2024 SILV began to implement the plan as they
brought in a new contractor team to do the mining (though interestingly, the old contractor has
now stayed on) and the change of methods began. This quarter Q3 was planned as the first
one that truly showed the way Las Chispas would operate and indeed, the plan delivered as per
with higher throughput tonnages and lower overall head grade offsetting each other. The real
advantage is set to show when SILV files its financials, as unit cost savings were always the
goal. We note that 3q24 grades were below the reserve estimate and will keep that in mind
moving forward, this may be extra mine dilution, may be part of the mine sequencing but also
suggest better production figures in future quarters.
With sales noted and the average received prices for silver and gold as reported by SILV for
3q24, U$29.48/oz and U$2,472/oz respectively, we also get the preliminary revenues for the
quarter of U$80.4m. Thanks to the slightly higher production and solidly higher prices than our
model, that's just over U$8m higher than our estimate for the quarter. A good thing. These
charts offer the breakdown of revenues from the two payable metals (please note the cut-down
Y-axis) which shows that apart from 4q23, silver sources a little more of the cash top line than
gold (but it's not by much).
SILV: Calculated revenues by metal, per qtr
All this points to record quarterly results when SILV reports at the end of the month.
5
66.1202
86.62
82.13
86.62
23.53
82
28.53
38.13
23.92
9.03
7.23
44.23
73.04
85.73
57.24
89.63
59.44
90
80
70
60
50
40
30 20
10
0
22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 42q3 tse42q4
U$m SILV: Percentage silver/gold revs mix, per qtr
(NB: cut down Y-axis)
Au calc revs
Ag calc revs
source: company filings, IKN calcs
0.84 0.25 0.45 0.64 0.75 0.34 1.65 9.34 0.84 0.25 4.15 6.84 4.55 6.44 2.35 8.64 9.45 1.54
70
65
60
55
50
45 40
35
30
22q4 32q1 32q2 32q3 32q4 42q1 42q2 42q3 tse42q4
%
% Ag
%Au
source: company filings
SILV: Quarterly Earnings overview
7.2 8.0 9.1 8.04 3.41 5.62
0.85
4.22 6.53
0.26
7.32 3.83
8.36
4.62 5.73
3.16
4.42 9.63
6.36
2.62 5.73
7.27
3.13 5.14
4.08
0.82
4.25
0.28
0.82
0.45
100
90
80
70
60
50
40
30
20 10
0
22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 tse42q3 tse42q4
U$m
revenues COGS Mine Op. Inc
source: company filings
SILV: EPS and Mine Op Inc per share, per qtr
The earnings overview chart generated from our
model forecasts a mine operating income of U$52.4m
(and slightly better for Q4, for which we assume
conservative metals prices rather than today’s spot
bonus). We expect lower costs as the one-time
expenses of Q2 disappear from the ledger
(materials/consumables were $2.6m higher in 2q24
than in 1q24, part of the re-tooling to long-hole
operations). That’s a per-share mine operating income
of 35c and an EPS of 28c, representing a forward EPS
of 9X, in no way expensive for a precious metals
miner (and outright cheap for a profitable silver name) and comes after Coeur’s friendly
takeover offer.
Over at the balance sheet, things are developing in the impressive way we expected.
SILV reports its cash position at U$120.9m as at end 3q24, also its bullion inventory is up to a
cool U$37.4m. To be honest, the accrual of bullion on the balance sheet is more of a marketing
angle than a hard financial benefit and I don’t see CDE continuing the policy once its CFO takes
charge, but it doesn’t do any harm either and with no debt to pay down or pipeline project to
fund, opportunity cost is minimal. We may see a slight increase in current liabilities when SILV
reports, but even so these are very low levels and SILV is a company with a near-optimum
balance sheet. This is a real testimony to the way Eric Fier runs his companies and another
aspect that Coeur would have found attractive during its DD period. All that means working
capital will continue to march higher, our model forecasts U$207m (U$1.39/share).
That’s enough for today, there may be value in checking the deeper details of the balance sheet
once SILV reports, particularly if my model misses the mark by too much, but the real takeaway
from the SILV numbers last week is on the operational side and w it’s about to report record
profits, with more in the tank for Q4. As for 2025, that’s now changed significantly because as
from the end of 1q25 SILV should be part of CDE, a line that serves as my link to the next
section.
6
71.0
10.0 21.0
81.0 81.0
42.0
61.0
62.0
12.0
62.0 42.0 52.0
32.0
52.0
40.0
82.0 82.0
53.0
92.0
63.0
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 tse42q3 tse42q4
U$/share
EPS
MOI
source: company filings, IKN calcs
SILV: Assets Breakdown, per qtr
600
550
500
450
400
350
300
250
200
150
100
50
0
02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 tse42q3 tse42q4
U$m SILV: Liabilities Breakdown per qtr
120
110
100
90
80
70
60
50
40
30
20
10
0
source: company filings
02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 tse42q3 tse42q4
U$m
LT liab
current liab
source: company filings
SILV: Working Capital per qtr
68.621 96.222 33.391 43.671 55.971 26.061 17.641 70.921 198.47 464.17 553.69 33.811 67.621 82.841 30.861 702 432
300
250
200
150 100
50
0
02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 tse42q3 tse42q4
source company filings
srallod
fo snoillim
SILV: Bullion and finished goods inventory
1.0 0.3 9.4
9.7
6.51.8
7.113.01 2.91
5.11
0.02
5.11
0.42
3.31
4.73
0.21
55
50
45
40
35
30 25 20
15 10 2.0
5
0
22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 tse42q3
U$m
bullion
finished goods
source: company filings
Thoughts on Coeur (CDE): My first reaction on hearing that SILV and Coeur Mining Inc
(CDE) had agreed to a friendly, all-scrip merger was that Coeur had got great deal. That was
also my second impression after running the numbers and while reasonably happy with the
print and implied win, couldn’t help but think SILV was leaving cash on the table and could
have demanded a higher price just by waiting a little longer into the current metals cycle. That
impression was underscored last week with the publication of the strong 3q24 production
numbers (above) and there was no doubt in my mind that the small pop higher on Thursday
morning would have been at least double the size and would have held better if SILV weren’t
weighed down by the impending deal.
It’s only natural, as a holder of a target company that gets taken out, to consider the deal from
the point of view of your shareholding. However, with the advent of the 3q24 numbers and the
strong results, thoughts turned to the other side of the deal:
SILV CEO Eric Fier knew the SILV Q3 was looking good
Eric Fier was happy to agree to an all-paper deal with CDE before those numbers
dropped
Not so long ago, Eric Fier sold a chunk of stock in order to feather his retirement nest
(i.e. buy a nice house in a nice location). Good for him and well-deserved, but part of
this deal is seeing Fier join the CDE board as one of its directors, implying his retirement
plans have changed somewhat (or maybe a lot). And
no, non-exec chair of Mako Mining is hardly the
same level of commitment.
All this on the back of a CDE share price that has
raced higher in 2024, as seen in this 12 month chart
of CDE versus silver bullion (SLV proxy), Silver
miners (SIL ETF proxy) and precious metals miners
in general (GDX proxy). That move made it all the
more understandable that CDE would use its new
found equity to buy something nice (chart right)
All this got me thinking, “What does Eric Fier see in
CDE?”, because if Coeur came looking at SILV you can
bet your bottom dollar that a whole bunch of other silver and/or precious metals miners in the
Tier 1-2 brackets did the same. Indeed, the reason First Majestic bought Gatos Silver, may be
because it was left in the wayside for this prize (though that is pure conjecture on my part, we
do know Neumeyer of AG liked SILV a lot). So perhaps the real question is “What does Eric Fier
see in CDE that he likes more than any other suitor company out there, enough to want to
become a member of its board instead of taking a fully deserved retirement?”
The answer is probably Rochester. Well. Palmarejo and Rochester because its main Mexican
operation has enough similarities to Las Chispas to show SILV that CDE knows how to go
mining underground in Mexico, but Rochester is the difference at CEE going forward. First, it’s
true CDE has had a good 2024 but that’s more about catching up to peers than launching far
ahead of them, as this five year chart using the same comparatives as above demonstrates:
7
CDE went through a rough patch before Covid, having wasted time and money on Silver Tip (a
bad purchase) and then and the need to spend big money in order to renovate Rochester (and
buy back the royalty it stupidly threw away by not renewing concessions on time) cut short its
post-Covid rally. It then went through a long period of under-performance and made me happy
that I’d never looked at it, but 2024 has seen the stock turn around. The main catalyst isn’t
bottom line earnings that’s for sure and the balance sheet is debt loaded after the Rochester
build-out (it will greatly appreciate SILV bringing in over U$200m in working capital when the
deal closes) but that’s now done to all intents and purposes and according to the latest
literature, Rochester’s new ops are working at full speed and the 88,000tpd nameplate capacity
for its open pit operation.
That means Rochester is about to get back to production at the cadence it used to be able to
run and the levels expected by the 2021 technical report and new mine plan. With CDE
reiterating guidance at all its mines in its 2q24 report, it means production is bound to increase
at Rochester and while the guidance range of 37,000 -50,000 oz gold and 4.8m to 6.6m oz
silver is wide, we can make a best guess on what to expect (and then presume that carries on
into 2025):
Those numbers would put Rochester at roughly its midpoint of 2024 guidance, clearly improving
on recent quarters barring that 4q23 anomaly.
This is where SilverCrest and Las Chispas comes in. If we consider the expected production mix
for gold and silver from CDE’s four operations for gold…
CDE: Gold sales and forecasts, per qtr
120000
110000
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
8
22q4 32q1 32q2 32q3 32q4 42q1 42q2 tse42q3 tse42q4 tse52q1 tse52q2
CDE: Rochester gold sales, per qtr
oz Au
Palmarejo Rochester Kensington Wharf Las Chispas
source: company filings, IKN ests
…and for silver….
64611
9438 3946 2344
57191
5816 0518
00041 00051 00051 00051
22000
20000
18000
16000
14000
12000
10000
8000
6000 4000
2000
0
22q4 32q1 32q2 32q3 32q4 42q1 42q2 tse42q3 tse42q4 tse52q1 tse52q2
Oz Au CDE: Rochester silver sales, per qtr
source: company filings, IKN ests
579.0 077.0 596.0 606.0
962.1
537.0 589.0
005.1
000.2 000.2 000.2
2.2
2.0
1.8
1.6
1.4
1.2
1.0
0.8
0.6 0.4
0.2
0.0
22q4 32q1 32q2 32q3 32q4 42q1 42q2 tse42q3 tse42q4 tse52q1 tse52q2
Moz Ag
source: company filings, IKN ests
CDE: Silver sales and forecasts, per qtr
6.0
5.5
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
9
22q4 32q1 32q2 32q3 32q4 42q1 42q2 tse42q3 tse42q4 tse52q1 tse52q2
Moz Ag
Palmarejo Rochester Wharf Las Chispas
source: company filings, IKN ests
…adding Las Chispas into its production and sales mix (here I use sales numbers only to keep it
as straightforward as possible) promise to turn this company into a very different beast than
the one we’ve tracked for the past couple of years. Gold production improves slightly, but silver
output is set to almost double and turn its revenues mix of roughly 70% gold 30% silver into an
overall 63% gold 37% silver mix, even if the gold/silver ratio remains the same. Then when we
add in the expected metals prices going forward and a CDE that is no longer hedged to any
production, there’s a triple whammy effect on revenues:
No more hedging
Significanly higher production, particularly of silver
Significantly higher metals prices
For example, in 2q24 CDE had an average received price of U$2,003/oz for gold and
U$26.20/oz for silver. Thanks to the end of the hedge and the market price improvements, we
assume a jump to U$2,410/oz gold and U$28/oz silver for 3q24, then future quarters at
U$2,500/oz gold and U$30/oz silver. Add in the
extra production expected from Rochester and
CDE: Consolidated metals sales (U$m), per qtr
then the 1.45m oz silver and 14,500/oz gold we
assume from SILV at Las Chispas as from 1q25
and you get this revenues chart (right). From a
total of U$222.03m in top line revenues in 2q24,
CDE moves to an IKN estimated U$400m once
SILV is incorporated. That’s also an improvement
on a per-share basis, as revenues per share in
2q24 was $0.556 (399.24m shares out) while our
model forecasts $0.627 for 1q25 and beyond
(637.21m pro forma shares out). And that’s using
U”5,00/oz gold and U$30/oz silver, metals prices
above that add to revenues accordingly (ballpark
that as $10m for every $100/oz on gold, $10m for every $2/oz on silver).
Bottom line: This sum-of-parts merger makes sense and on reflection, it’s no surprise Eric Fier
agreed to the all-share deal. Assuming CDE delivers on its improved production at Rochester
and its other mines come in as forecast, the first acid test of our theory comes on November 6th
when Coeur reports its Q3. There’s every reason to expect good numbers, as SILV and Fier
wouldn’t have wasted their own good Q3 on a poor deal. That’s the upshot of considering the
merger from the acquirer point of view, rather than my first reaction as a SILV shareholder.
What remains is the question for current SILV shareholders such as your author as to whether
to “replace” SILV by leaving the position untouched and allowing the shares to become a
longer-term holding in CDE. For one thing you’d be aligning yourself with the SILV CEO and as
laid out above, there’s probably good reason to do just that (aside from the good fortune Mr.
Fier has brought us already, of course). Personally speaking, I think I’m going to stick to my
original plan and cash in my shares of SILV, either a) just before or after the consummation of
25
851
06
721
65
121
55
041
47
881
16
251
86
451
68
002
801
312
151
052
151
052
450
400
350
300
250
200 150
100
50
0
22q4 32q1 32q2 32q3 32q4 42q1 42q2 tse42q3 tse42q4 tse52q1 tse52q2
U$m
Silver
Gold
source: company filings, IKN calcs and ests
the merger in 1q25 or b) after the SILV and CDE 3q24 financials are in and the market has
reacted. My two reasons are strictly personal, as 1) “New Coeur” at over U$4Bn market cap is
not the size of mining company I generally target and as it happens, I already have Eldorado
Gold (EGO) in that role, then 2) at 63% gold 37% silver revenues mix, it’s not enough silver
exposure for my taste and again, EGO covers this spot in my portfolio. However, I am not you
and you are not me so for those of you who like swimming in these larger pools, there’s real
and strong reason to like CDE going forward. This deal makes sense in both style and
substance, CDE is ready to harvest the fruits of its fallow earnings period as it turned one of its
main assets back to good working order and in SILV, it has a complementary new asset that
will boost top line revenues as well as lowering its cost base. The more I think about it, the
more I see Eric Fier’s point of view on this deal.
Stocks to Follow
A week of small movements and a portfolio that was largely unchanged over the week, which
isn’t a bad thing as it means the big gains of the week before were consolidated. The basic
headcount is nine winners (EGO, ARG.to, MARI.to, AE.v, BCM.v, OCI.v, ALDE.v, PAU.cse,
MENE.v), four unchanged stocks (NCAU.v, FCGV.v, MIRL.cse, PGDC.v) and seven losers (MAI.v,
RIO.v, SILV, RPX.v, PGZ.v, IPT.v, FTZ.v) and of all those, only one stock was a double figure
percentage mover so a cheer for the continued rocket move of Provenance Gold (PAU.cse up
15.8%), even though I’m just a watcher and not an owner. Most of the others were moves of a
penny or a percentage point, often less.
There are 20 open positions on our Stocks to Follow, that’s the max under normal
circumstances. Thirteen stocks are in the green, six are in the red, one is unchanged and that’s
a lot healthier than it was over the summer months. Onward.
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$0.37 76.2% $0.75 first tgt, #1 idea
RECOMMENDED STOCKS
Rio2 Ltd. RIO.v STR BUY C$0.80 22-Apr-18 C$0.65 -18.8% Momentum now building
SilverCrest Met SILV HOLD U$6.90 31-Mar-24 U$10.12 46.7% under offer, holding
Eldorado Gold EGO STR BUY U$16.55 11-Aug-24 U$17.51 5.8% new trade, finally long
Amerigo Res ARG.to BUY C$1.54 28-Jul-24 C$1.81 17.5% return, (re)starter position
Marimaca Copper MARI.to STR BUY C$3.05 14-Jan-24 C$4.20 37.7% Quality Cu developer
American Eagle AE.v SPEC BUY C$0.43 21-Jul-24 C$0.52 20.9% new Cu trade, near-term flip
Red Pine Expl RPX.v BUY C$0.105 8-Sep-24 C$0.145 38.1% New sm position, will build
Newcore Gold NCAU.v BUY C$0.205 23-Oct-22 C$0.34 65.9% Cheap Au in West Africa
Bear Creek Min BCM.v BUY C$0.35 10-Jun-24 C$0.46 31.4% Spec Ag(& Au) trade, 2 buys
Pan Global Res PGZ.v SPEC BUY C$0.19 19-Feb-24 C$0.12 -36.8% Cu jr, may add post financing
Orecap Inv OCI.v BUY C$0.06 4-May-24 C$0.06 0.0% Exposed to several good jrs
Florida Can. Gold FCGV.v hold/sell C$0.63 21-Jul-24 C$0.60 -4.8% under offer, may sell
SPECULATIVE TRADES
Aldebaran Res. ALDE.v SPEC BUY C$0.72 16-May-21 C$1.17 62.5% into FY24 news season now
IMPACT Silver IPT.v SPEC BUY C$0.30 14-Apr-24 C$0.235 -21.7% Silver spec, added IKN783
Minera IRL MIRL.cse avoid C$0.195 22-Jul-12 C$0.015 -92.3% leaving list soon (good)
A WATCHLIST OF POTENTIAL TRADES. NB: I DO NOT OWN
Fitzroy Min FTZ.v WATCH C$0.17 4-Aug-24 C$0.195 14.7% Rio Negro trade op, watching
Patagonia Gold PGDC.v WATCH C$0.02 4-Aug-24 C$0.03 50.0% Rio Negro trade op, watching
Provenance Gold PAU.cse WATCH C$0.085 8-Oct-23 C$0.22 158.8% Idaho gold drill play
10
LONG-TERM NON-MINING HOLD
Mene Inc. MENE.v adding C$0.48 6-Dec-20 C$0.12 -75.0% 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
Western Copper WRN.to July'24 C$1.57 26-Feb-24 C$1.53 -2.5% Sold on regional risk
Contango Ore CTGO Sep'24 U$18.70 30-Jul-23 U$20.23 8.2% Port rebalance sale
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:
Florida Canyon (FCGV.v): May sell. With around a month to go before the fusion with
Integra is complete and nothing company-specific about to happen between now and then, I’m
torn between selling early and deploying the capital elsewhere and letting it ride and selling
when my FCGV shares become ITR shares. Though a recent and small position, it’s been a
thorn in my side since its bad start and frankly, the emotional bias I have against the trade is
the only thing that has stopped me from closing it out since then, as it’s probably a mistake to
trade on feelings that started badly and has been a thorn in my side from the get-go.
SilverCrest (SILV) (SIL.to): STOCK UNDER OFFER, HOLDING. Plenty in today’s main
fundies section on SILV, here we note that even if we don’t hold through and become a CDE
shareholder, the likelihood that both SILV and its buyer impress with their 3q24 financials
means this is a clear hold for the time being. And we’ll take our chances with the US election
and fall-out.
Eldorado Gold (EGO): The biggest market cap goldie we currently own has spent the last
couple of weeks tracking the GDX benchmark, though if
I wanted to read a little too much into its price action I’d
point to Friday and the way EGO rallied while the rest of
the sector sold off slightly. That cheers me going into
this week, when we should get the Q3 production
numbers from EGO (and that may be as soon as
tomorrow morning, or Tuesday if it waits for the
Canadian market to be open). That’s one of two main
catalyst points for EGO this month, as the 3q24
financials are due to drop post-close on October 31st
(spooky), with the ConfCall the next day (3).
I’m still confident that the market is under-estimating
Eldorado at this point and a good quarter of production along with a “all goes well” from its
Skouries development project should be enough to trigger buyers looking for value in the PM
producer sector.
Rio2 Ltd (RIO.v): I cannot emphasize this enough, we’re in the final calm moment before the
storm and once the details of the financing package are known and Fenix gets its official green
light, it won’t just be the small world of junior exploreco enthusiasts looking at Rio2 Ltd. The
ten-day chart shows the small pop it got from the Chile operating licence award and that’s fair
enough, but the real event is closing of the financing deal.
That had to wait until the permit, the company has
penciled in November 1st as green light day, which means
the package is with us either this week or the next. Be
positioned to your personal satisfaction before it happens,
not after.
11
Red Pine Exploration (RPX.v): The company put a new corporate presentation up on site
Thursday (4) and while there’s no real new news included, it got me thinking how these
tinycaps grab the limelight for a while and then start to lose momentum as the next “new
thing” comes along to wow an audience that seems to have the same attention span it had
while watching MTV back in the 1980s. Surely the time to build a position in a stock like this is
when nobody is looking and the company is busy to bother with market rah-rah.
Orecap Inv (OCI.v): Another change to report in our ongoing tracking of OCI’s “liquid-ish”
assets valuation, via this table:
OCI.v: PRO FORMA Marketable Secs, Investments in Assocs, Cash
ticker shares owned(m) PPS valueC$m Cents/share
AE.v 11.68 0.520 6.08 2.5
AE.v warrant 0.10 0.220 0.02 0.0
ARIC.v 7.39 0.45 3.29 1.3
ARIC.v warrant 4.17 0.25 1.02 0.4
QCCU.v 39.10 0.13 5.08 2.1
MIS.cse 24.71 0.03 0.74 0.3
subtotal 16.23 6.6
Est.cash 1.50 0.6
Total 17.73 7.2
At 247.714 S/O
Last week OCI filed the sale of 943,500 shares of Awalé Resources (ARIC.v), bringing its total
shareholding to just under 7.39m (not including its warrants). Considering OCI is a “Critical and
Precious Metals focused Merchant Bank” (quote/unquote) and it bought its position in ARIC at
12c including the warrants, that’s a sensible move to raise cash and de-risk its position.
However, it may cast a shadow over ARIC, so I got in touch with OCI and learned that at this
time, it had no plans to sell any more shares than this. The company, via ARIC, had been
approached by a high net worth individual interested in taking a position in ARIC and as the
deal made sense for both parties, we got the block trade as seen last Thursday.
As well as the drop in ARIC shares on the table, we’ve topped the cash treasury position to
C$1.5m. Overall OCI still has liquid-ish asets worth 7.2c/share, which means it’s still running a
favourable arb of around 20%.
Newcore Gold (NCAU.v): This continues to trade in range despite good news from the
company last week (5), the first drill assay results from its new drilling campaign. The results
came from the Boin zone at Enchi, one of the main target areas that carries around a third of
the current 43-101 compliant resource of the whole project and the headline 1.96 g/t gold over
62m shows best in this diagram (right). As seen the best grades are from the lower sulphide
zone, which NCAU is calling “transition” presumably as
it hopes the grade will run on the standard heap leach
with the lower grading oxide material.
In total there were four holes reported last week and
all were in line with the expected numbers from this
target. That’s all good, however it’s more continuation
work and not market-moving in and of itself. There’s
always the potential for a game-changer hole that
shows wide lengths of higher grade, but the most
likely asset appreciation comes when the market starts
to appreciate the whole of Enchi as a serious gold
project that has every chance of becoming a mine. At
current prices, this is an easy one to hold.
Some more on NCAU in the MAI segment below, as
Luke Alexander is appearing in a 6ix webinar this
coming week.
12
Minera Alamos (MAI.v): You may be unhappy that
MAI didn’t shoot off into the stratosphere last week and
continue its breakout run, but that’s just you. I’m more
than happy about the way it traded last week, as it saw
early profit-takers and then started yet another of its
annoying re-traces, but this time buyers quickly stepped
up and were to get all the 35c they could find. The close
of 37c means it lost half a cent on the week, more
importantly it successfully back-tested the breakout and
should now be able to build a new floor.
In other news, we have a webinar featuring MAI and
NCAU coming up, this Wednesday October 16th at
midday ET. Here’s the link to register (it’s free) (6) and here’s the 6ix blurb to set the scene:
Join the CEOs of four development-stage gold companies advancing their respective projects from
development through permitting and towards construction; these projects sit in ‘the middle stage’ of the
Lassonde curve. Discover what the de-risking process looks like for a gold mine in various jurisdictions - the
process and timeline of taking a development project from first discovery to a construction decision, and what
risk and opportunities at the development-stage exist for investors.
If you can stand listening to Dan Wilton of First Mining (FF.to) and the company's Springpole
project (don't mention the lake or the protected species within) and Diane Garrett of Hycroft
Mining (HYMC) (don't mention the cinemas), the event features two of the companies owned
and covered here at The IKN Weekly, as both Doug Ramshaw of Minera Alamos (MAI.v) and
Luke Alexander of Newcore Mining (NCAU.v) are featured. These multi-company webinar hours
can turn out to be more heat than light, as they don't allow as much depth on a company story
and for those of us who follow these stories closely, maybe there won't be much in the way of
new news. However, there's always something to glean from an event, so we'll see how it goes.
Bear Creek Mining (BCM.v): We closed our quick and dirty overview of potential
replacements and/or next silver companies to sell by deciding there wasn’t enough speculative
value in the most obvious candidate, MAG Silver
(MAG) and throwing this at the end of the note: “And
if after reading all this you come to the conclusion
that’s today’s main Fundies section is a very long-
winded way of suggesting I’m likely to buy more Bear
Creek Mining (BCM.v), you’re probably right.” Just
for a moment on Thursday afternoon, I wondered if
those words would come back to haunt me as BCM
looked set to run hard without any of my extra cash
on board. As it happens, the soft-ish Friday brought it
back to a 46c close and a more modest 2c gain on the
week, but all the same there are obviously buyers
taking a second look at this deeply underwater story
and seeing asset value under that debt load.
Provenance Gold (PAU.cse): The recent hotpot exploreco remained hot last week, riding up
another three cents and putting a three figure winner on our list, which is nice even if I don’t
own any shares personally. We had real news from the stock as well, with the successful
closing of the “second tranche” of its private placement, which gives us the opportunity to
illustrate the fickle nature of this market.
May 2nd: PAU announces a placement for 15m units of stock at 8c per unit (share + full
warrant at 12c) and at the time, wrote that it “…anticipates the closing of the placement
within the next two weeks.”
June 28th: After eight weeks (not two), PAU announces the closing of the “first tranche” of
12,913,750 units and mentioned that “we anticipate closing a second tranche very shortly.” In
other words, it couldn’t wait any longer for hard cash funds to pay the drillers.
13
October 11th: Thanks to finally getting some traction
and momentum from the right NR at the right time
and after three and a half months, the placement
second tranche gets over-subscribed and they sell a
total of 18,331,250 units.
Such is the way with micro-caps, sentiment can turn on
a sixpence. Or a dime. We’ve had the “Visual Gold”
market primer NR from the company, we now await the
official assay results from its first hole of the program.
We leave you with the 2024 YTD comparative chart of PAU next to GDXJ, it’s what these stocks
do from time to time and ultimately, why we bother with them.
Aldebaran (ALDE.v): In Tuesday, ALDE picked up new sell side coverage when Cormark
opened on the stock, calling it an "Andean Elephant in the Making" and giving the stock a 'buy'
rating and a C$2.50 price target. I have no issue with any of that :-).
In its rationale, Cormark picks up on the potential catalysts of a resource update due this
quarter, following by a PEA in the "first half of next year". Agreed, though we should remind
readers that this group is notoriously poor when it comes to keep to a time schedule and delays
on either of those deliveries wouldn't be any sort of surprise.
Fitzroy Minerals (FTZ.v): Thursday saw the announcement of a well telegraphed and
anticipated placement from FTZ, with the company aiming to raise C$2m by selling 13.333m
units priced at 15c (unit = share + ½ warrant at 25 strike and a two year shelf life). The deal
comes with an announced overallotment and I’d expect that will fill, so we’re likely at 14.666m
units to raise C$2.2m (but be clear, they’re unlikely to turn away any chunky order so this
placement could become bigger). The deal announcement killed open market trading, so even
though it closed well above the placement ticket price that could easily go lower in the days to
come. With this cash, FTZ will probably be able to go drilling in either Chile or Argentina. It’s
certainly enough for the proof of concept. Watching.
The Copper Basket
After forty-one weeks of 2024, The Copper Basket shows a gain of 13.48% to level stakes:
company ticker price 1/1/24 Shares out Market Cap current pps gain/loss%
1 NGEx Minerals NGEX.to 7.16 186.824 2141.00 11.46 60.1%
2 Solaris Res SLS.to 4.13 161.833 522.72 3.23 -21.8%
3 Marimaca Cop MARI.to 3.43 93.11 391.06 4.20 22.4%
4 Los Andes LA.v 11.80 29.519 240.58 8.15 -30.9%
5 Aldebaran Res. ALDE.v 0.89 169.819 198.69 1.17 31.5%
6 Arizona Sonoran ASCU.to 1.75 133.265 197.23 1.48 -15.4%
7 Faraday Copper FDY.to 0.63 204.72 188.34 0.92 46.0%
8 Hercules Metals BIG.v 1.38 231 138.60 0.60 -56.5%
9 Oroco Res OCO.v 0.375 236.911 82.92 0.35 -6.7%
10 American Eagle AE.v 0.26 116.75 60.71 0.52 100.0%
11 Element 29 Res ECU.v 0.18 119.31 48.32 0.405 125.0%
12 Kodiak Copper KDK.v 0.58 63.93 30.69 0.48 -17.2%
13 C3 Metals CCCM.v 0.61 76.381 26.73 0.35 -42.6%
14 QC Copper QCCU.v 0.12 173.7 22.58 0.13 8.3%
15 Camino Min COR.v 0.07 206.66 10.33 0.05 -28.6%
NB: All stocks in CAD$ Portfolio avg 13.48%
14
A big improvement for our basket average this
The Copper Basket 2024, weekly evolution
week, up an impressive 8.21% to close at 25%
+13.48% and the best number since early June. 20%
There were four losers in the mix (SLS.to, 15%
ASCU.to, CCCM.v, COR.v) and two others were 10%
unchanged (LA.v, QCCU.v), but the nine winners 5%
(NGEX.to, MARI.to, BIG.v, ALDE.v, FDY.to, OCO.v,
0%
KDK.v, AE.v, ECU.v) set the tone for a positive
-5%
week and were led by the big jump in Element 29
-10%
(ECU.v up 62%), a jump that accounts for over
5% of the total improvement last week by itself.
The other big winner was Kodiak (KDK.v up
17.1%) though that was less impressive, as it’s still bouncing around inside its rather wide
trading range and volume still hasn’t come.
The positives week for our basket is all the more
impressive when we consider the dive copper
took. Unlike gold, which has managed to move up
with the US Dollar, copper's price moves were
more logical as the rising dollar made the metal
more expensive in Yuan terms (or Yen or Won,
but China is the market we care about the most)
and affected its trading price accordingly. We also
saw another round of will-they-won’t-they on
large-scale economic stimulus (Chinese market
authorities jawbone their market in much the
same way Federal Reserve members massage the
market in the USA, it’s just the playing field that’s different), with a big announcement set for
Tuesday that ended up a bit of a damp squib. Here’s Reuters on what that did to copper (7):
"Copper demand has weakened due to surging prices over the last few days. Prices are not
stable yet, and this price level is still higher than before the U.S. cut interest rates. Buyers
are adopting a wait-and-see approach,” said CRU analyst He Tianyu.
Metals prices were further weighed down this week after China's stimulus announcements
on Tuesday failed market expectations and lacked detail."
But it wasn't that bad and underlying demand, along with a Chinese market still getting back to
full speed after Golden Week (officially over but many entities getting a couple of extra days
tacked onto the official holiday period) helped support prices. News also filtered later in the
week of another round of China central government stimulus measures and the semi-believable
assurances of jam tomorrow helped copper get to the end of the week without so much
damage. And with that, we’ll move to our regular weekly world copper inventories segment,
data from Cochilco (and Richard, thank you sir):
Copper inventories in the three world futures markets systems saw a net gain of 18,570
metric tonnes (mt) on the week, closing at 522,922mt.
There was enough trading time between the end of Golden Week and Friday to see
inventory added to the SHFE warehouse system without any being booked to leave, the
result was a trend-bucking addition of 14,860mt to stocks and a total at 156,485mt this
weekend. I expect that to drop by this time next weekend as physical metal starts to
flow to end users again. On that subject, we’re now entering the phase of the year
when Chinese manufacturers build stock before the start of the next calendar year and
one of the typical effects is a draw down of copper inventory on the world stage.
The LME continued its sequence of small inventory draw downs, this time an overall
drop of 975mt. However, the geography is telling as its Asia warehouses were negative
5,750mt while its European depots saw a net add of 4,775mt (all to Rotterdam Holland,
for what it’s worth). The LME total copper inventory this weekend is 297,550mt.
15
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 ht82 ht4gua ht11 ht81 ht52 ts1pes ht8 ht51 dn22 ht92 ht6tco ht31
source: IKN calcs
Meanwhile the trend of big inventory builds at the Comex continues with another
4,658mt added to bring its stock to 68,957mt. Not a great signal for the state of the US
housing market.
Our dedicated SHFE chart shows the uptick from the addition of 14kmt or so last week. That’s
likely to be a one-off and if seasonality reigns, SHFE should see draw downs from now until
Christmas. Not so far away you know, ho ho ho.
SHFE copper inventory levels, 2019 to 2024
400000
350000
300000
250000
200000
150000
100000
50000
0
16
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 some notes on a selection of our basket stocks:
Element 29 (ECU.v): By far the most interesting copper price action of the week, so two
charts for your consideration. Below left is a six month chart to show some context, below right
the ten-day hourlies chart that zeroes in on last week’s action, as well as noting the sporadic
volume that fueled the move.
But what might be behind the +62% week-over-week price run? Two ideas:
It’s a thin market, the stock is majority held by tight-handed insiders, there aren’t many
sellers of ECU and if somebody wants in for more than a few thousand shares, they have
no choice but to pay up. Also, we’ve already seen jagged trading on low volumes in this
stock earlier in 2024.
Somebody has seen something they like at Elida and word has got out. That’s possible, as
we know drilling started on September 23rd (announced the next day) on the current
program, which means the rig had been turning for 17 days before that sharp move on
Wednesday. If we assume an average of 50m per day, that’s 850m and more than enough
for any of the long holes the company planned. We can therefore guesstimate that the first
hole is now boxed, sampled and off to the labs and word may have leaked at any point
along that chain.
So, am I annoyed that I’ve recently pointed out ECU as a possible trade on the back of the new
Elida program without even putting it on the Watch List group, let alone buying some shares for
myself? Yes, a little but on the other hand, The IKN Weekly is solidly on the record about its
liking of the stock thanks to the main fundies note in IKN800 dated September 15th “Element
29 Resources (ECU.v) back on the radar”. And you don’t need me to buy shares before you do.
C3 Metals (CCCM.v): Closed its financing (8). I’m somewhat surprised that this company
managed to raise $4.5m, but that’s just me and there are stranger things in this market than
that. It moves the share count up to an IKN estimated 76.381m this weekend, as seen in the
table above. Also notable is that we now have a new 10%+ holder of C3 shares. That is one
Robert L. Gipson of Ingalls and Snyder (9), A NYC investment advisor, who took 7m shares of
this placement and added those to the 5,999,999 he already owned. His new total of 13m
shares (minus one) gives him 17.02% of total shares out and the obligation to file his position.
Being a Veep at an investment house, he may of course be the front man to somebody else’s
money.
Arizona Sonoran (ASCU.to): Also closed its financing (8). We supposed that ASCU would
fully fill its placement and overallotment then close its financing on time, that’s exactly what
happened with gross proceeds of C$34.5m booked. However, the post-close open market for
ASCU shares was flaccid and the price is almost back
at the bought deal ticket price.
QC Copper & Gold (QCCU.v): After a fairly long
note last weekend on QCCU and its corporate re-jig,
with plans to add the Cuprum property to the mix and
a name change to XXIX, the company also went on
the marketing offensive last week with segments in
your social media influencer channels of choice about
its plans, as well as its own in-house explanation video
that you can see here (8). As for the marke, it
continues to yawn at QCCU (right).
Hercules Metals (BIG.v): We started last week’s
note on BIG.v with the phrase “Restless natives” to acknowledge the rise of the antsy sentiment
among holders, what with the company not giving us any drill results from its latest campaign
yet. Then we ended with “…this one is still a strict “watching brief only” until it delivers real
news.”
Lo and behold, we got some real news (10), with BIG giving up its first drill results of the new
program under the title line “Hercules Metals Intersects 480 Meters of 0.47% Cu, 82 ppm Mo,
including 55 Meters of 1.5% Cu”. Not a bad hole taken on its own and the company was
obviously pleased about the 55m of higher grade contained in the mineralization. Here’s how
the market reacted, arrows marking the spot (right).
Reasonably positive for sure, but frankly I was left
unimpressed by a drill result that’s less of a market
mover, more of a placeholder. This result brought the
BIG share price back from where it was a couple of
weeks ago and that’s fair enough, but there was nothing
really new from results that confirmed a large,
moderately grading zone sitting under 250m of
overburden.
If the Hercules project were this and this alone it would
be easy to discard. While the grade and thickness is
there, it sits deep and with the issues the company has
already discovered regarding faulting and the high water table, even at this early stage, it
would even appeal on the prospect of a block caving operation. However, the Hercules project
does offer more, in theory at least. We know it started as a silver exploration target (its name
changed from Hercules Silver for a reason) and there’s enough shallow lying silver
17
mineralization to consider the potential of enough overburden being mineable and payable, not
simply waste that needs moving. We also know it’s a big project with a large footprint (one of
the reasons Barrick is interested) and the geological theory still supposes that the mineralization
in other zones will be less deep and amenable as a place to begin economic open-pit mining.
Indeed, BIG in its NR made a point of telling us that its drilling (two diamond drill rigs and one
RC) “continues to vector toward the potassic core of the system”, in other words where they
think the real pay dirt might lay. So seeing BIG pop the way it did last week is as much about
market relief that news has finally started to flow as it is the results we received. Last week
wasn’t a bad start but there’s nothing in those results that says “this is a mine” and there’s
optimism baked into this weekend’s price and market cap (around U$100m, that’s a lot of
money).
The Producer Basket
After 41 weeks of 2024, the Producer Basket shows a gain of 40.37% to level stakes:
company ticker price 1/1/24 Shares out MktCap(U$Bn) current pps gain/loss%
1 Newmont NEM 41.39 1152.6 62.59 54.30 31.2%
2 Agnico Eagle AEM 54.85 497.971 39.57 79.46 44.9%
3 Barrick GOLD 18.09 1756 35.10 19.99 10.5%
4 Franco-Nevada FNV 110.81 192.119 23.74 123.57 11.5%
5 Pan American PAAS 16.33 364.439 8.11 22.26 36.3%
6 Lundin Gold LUGDF 12.64 238.883 5.67 23.72 87.7%
7 Hecla Mining HL 4.81 617.768 4.10 6.63 37.8%
8 Eldorado Gold EGO 12.97 202.472 3.55 17.51 35.0%
9 Dundee PM DPMLF 6.43 180.051 1.79 9.93 54.4%
10 Wesdome Gold WDOFF 5.83 148.95 1.34 9.00 54.4%
All prices and stock quotes in U$ Port. avg 40.37%
A modestly positive week for the Producer basket, up 1.44% on the back of the eight winners
(NEM, AEM, FNV, PAAS, LUGDF, HL, EGO, WDOFF) that were opposed by just two losers
(GOLD, DPMLF). All moves were small moves in either direction and for the record, the GDX
beat us by 0.17% on the week. We’re still over 11% ahead though, so no sweating the year
just yet.
The 2024 Producer Basket: Weekly performance and
50% comparative to GDX control
40%
30%
20%
10%
0%
-10%
-20%
Dundee Precious Metals (DPM.to) (DPMLF): We got the 3q24 production pre-
announcement from DPM on Monday post-close (11).
18
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 ht82 ht4gua ht11 ht81 ht52 ts1pes ht8 ht51 dn22 ht92 ht6tco ht31
The 2024 Producer Basket: Percentage diff. between
GDX benchmark & basket (negative= IKN ahead) 2%
ikn 0%
gdx control -2%
-4%
-6%
-8%
-10%
-12%
-14%
source: IKN calcs -16%
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 ht82 ht4gua ht11 ht81 ht52 ts1pes ht8 ht51 dn22 ht92 ht6tco ht31
source: IKN calcs, NYSE data
DPM: Gold production and sales, per qtr
The
preliminary
count of
60,100oz
gold
produced
and 53,200 oz gold sold is a post-Covid low quarter.
That adds to what’s become so-so year for DPM, as
the 190,471 oz gold produced in the first three
quarters of 2024 and 169,235 oz sold are also post-
Covid lows and around 27,000 oz lower (or 9,000 oz a quarter, or 3,000 oz a month, or 100 oz
a day…we could continue) than the first three quarters of last year. It’s not a disaster, as the
company’s low cash cost makes the structure a real cash cow at current gold prices and as
things stand, DPM is still inside its guidance range for 2024. that was set at 245k to 285k oz
gold produced and 210k to 245k gold sold for 2024, so as long as Q4 isn’t outright bad DPM will
come in at the low end of the range, but that’s good enough.
Lundin Gold (LUG.to) (LUGDF): Another week,
another positive result and another all-time high to
report (though this time LUG’s best close was
Thursday, not Friday) and as seen in the comparative
price chart (right), it’s been a humdinger of a fortnight
for the start stock.
We also got the LUG 3q24 production and preliminary
sales NR on Tuesday (12), with production coming in
at 122,154 oz gold and sales slightly higher, at
125,887oz. That’s another great quarter, as seen in
this tracking chart:
19
47196 86526 76586 03407 43266 02837 18375 90726 67765 13856 99436 56056 51676 46596 21255 32806 00235
100000
90000
80000
70000
60000
50000
40000 30000
20000
10000
0
02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 42q3
Oz Au
Gold prod
Gold sold
DPM: Gold production and sales in
first three quarters of years
source: company filings
132502 668671 971691 532961
Oz Au Gold in conc 250000 Gold sold
225000
200000
175000
150000
125000
100000
75000
50000
25000
0
3 qtrs of 2021 3 qtrs of 2022 3 qtrs of 2023 3 qtrs of 2024
source: company filings
LUG.to: Gold produced & sold, per qtr
20
06126
091601
50818
214521 506111 674801 282911
19269
046431 098911 196431 859821 117211
50089
619801 693921 788521
160000
140000
120000
100000
80000
60000
40000
20000
0
02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 42q3
Oz Au
gold prod
gold sold
source: company filings
Inside the headline numbers, gold grade came in slightly lower than in Q2 at 10.4 g/t Au and
recovery percentages dropped to 86.8% (from a typical 88% to 89%), those inputs offset by a
slight improvement in milled tonnes for the quarter.
LUG.to: FDN avg gold head grade, per qtr
However, any differences or discrepancies
compared to previous quarters are notes in the
margin of another strong performer. LUG is right
on track to meet guidance for the year and
probably closer to the top end. Our best guess
with a quarter to go is 490,000 oz gold, 10k
under the ceiling.
The sector start performer for the second half of
2024 continues to deliver and it now at the price
we forecast at the end of Q2. All the rage.
Barrick (GOLD) (ABX.to): Every reason to expect GOLD to drop its Q3 preliminary production
and sales numbers this coming week, so watch out for that one, as it matters to NEM as well as
GOLD. In other news, GOLD has a bit of egg on its face from its Mali ops. On September 30th
Bristow & Co assured said it had reached a heads-up agreement with the government of Mali
on State burdens pertaining to its Loulo-Gounkoto mine complex in this NR (13):
Bamako, Mali – Barrick Gold Corporation (NYSE:GOLD)(TSX:ABX) and the government of Mali
have agreed to find a global resolution to the existing claims and disputes between the government
and Barrick’s Loulo and Gounkoto gold mining companies. Details of the agreement, based in
essence on Barrick’s original proposals, will be made public once the terms of the settlement have
been finalized.
Barrick president and chief executive Mark Bristow said the company’s mutually beneficial
relationship with Malian governments had endured for 30 years and occasional differences with
successive regimes had always been amicably resolved.
“The current negotiations have proved challenging but we’re encouraged by the government’s
recognition of the importance of securing the long-term viability of the Loulo-Gounkoto complex as
4.01 1.01 4.11 1.11 3.01 9.9 2.11 3.01 0.11 0.01 3.21 0.11 7.9
2.8
5.9 0.11 3.01
14
12
10
8
6
4
2
0
02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 42q3
g/t Au LUG.to: Tonnes milled, per qtr
500000
450000
400000
350000
300000
250000 200000
150000
100000
50000
0
source: company filings
02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 42q3
mt/qtr
source: company filings
LUG.to: Annual gold production
002242
415824 923674 472184 000054
Oz Au
500000
450000
400000
350000
300000 250000
200000
150000
100000
50000
0
2020 2021 2022 2023 2024e
source: company filings
a substantial contributor to the Malian economy. We look forward to working with the government
to normalize our long-standing partnership,” Bristow said.
However, this week it transpired that Mali is looking to get a cool U$500m from the company,
here’s Reuters with the outline (14):
Oct 8 (Reuters) - Mali's military government is seeking at least 300 billion CFA ($512 million) in
outstanding taxes and dividends from Barrick Gold, three sources said, a move that is part of a
push by the country to collect more revenue from mining companies.
And…
Three sources with direct knowledge of the talks between the government and mining companies
said Barrick, which runs the Loulo-Gounkoto mines in western Mali with an 80% stake, had been
presented a bill for at least 300 billion CFA.
One of the sources, a consultant working with mining companies in Mali, said the bill was mainly
for retroactive tax adjustments and unpaid dividends.
Another source, who works with mining companies and the Malian government, confirmed the
figure, saying the bill would cover taxes owed from 2020, 2021 and 2022.
A third source, a senior official with another mining company in the country, said Mali believes
Barrick owes as much as 500 billion CFA and the claim is also linked to the non-repatriation of
funds.
All the sources spoke anonymously due to the sensitivity of
the issue in Mali.
Asked to comment, a spokesperson for Barrick said: "We are
still in the process of negotiation and will let you know once
the agreement is settled".
That doesn’t sound like an agreement “based in essence
on Barrick’s original proposals” to me. In trading, GOLD
was one of the few losers on the week and was weak
into Friday’s close. Roll on the Q3 numbers.
The TinyCaps List
After 41 weeks of 2024, the TinyCaps show a gain of 52.98% to level stakes:
company ticker price 1/1/24 Shares out Mkt Cap current pps gain/loss%
Aston Bay BAY.v 0.065 252.95 27.82 0.11 69.2%
Awalé Res ARIC.v 0.135 86.798 38.63 0.445 229.6%
District Metals DMX.v 0.170 106.98 40.12 0.375 120.6%
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 96.476 7.72 0.08 6.7%
Palamina Corp PA.v 0.130 71.285 16.75 0.235 80.8%
South Star STS.v 0.750 52.64 33.16 0.63 -16.0%
Surge Copper SURG.v 0.090 284.79 37.02 0.13 44.4%
Viva Gold VAU.v 0.120 118.384 23.68 0.20 66.7%
Prices in CAD$, data from TSXV basket avg 52.98%
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.
21
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.
The basket added 3.18% on the week, thanks to
TinyCaps, 2024 weekly tracker
five winners (ARIC.v, LMS.v, PA.v, STS.v, VAU.v) 100%
90%
beating out three losers (DMX.v, EDG.v, SURG.v),
80%
with the other two of our ten remaining unchanged 70%
60%
(BAY.v, KLDC.v). The only mover of note was
50%
Palamina (PA.v up 23.7%), which put in an 40%
30%
interesting spurt at the same time as its drills are
20%
turning. Good news tends to travel fast. 10%
0%
Awalé Resources (ARIC.v): As noted above in
the Stocks to Follow section on Orecap (OCI.v), we
had a chunky block trade in ARIC go through last
week and OCI was the selling party. According to Ore Group, the buyer was a High Net Worth
individual who wanted into the stock. Fair enough and I don’t think there’s too much to be read
into this sale by OCI, considering its rationale as seen above. Meanwhile, we wait for drill news
for ARIC…and wait a little more…
Palamina Corp (PA.v): By far the most interesting chart of these ten last week:
The 150k shares traded on Friday may only be around $30k worth in hard money, but the way
buyers were happy to grab any ask is interesting as it’s happening at the same time as the first
drills turning on PA’s prime target area in Usicayos, South Peru. Will I be kicking myself for
talking about owning this instead of owning this? Will definitely be watching the four days of
trading next week to find out.
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
Mexico: calmer heads prevail
It’s going largely as expected. The rarefied atmosphere of the last months of AMLO has
dissipated and President Sheinbaum is still bedding in her new government, no big policy moves
and both the new executive and Congress only now starting on the jobs of government. Also
and while we don’t have any solid statements that directly address the issues, these early
stages also bring indications things are becoming more positive for the mining industry.
First up last week saw the inauguration of Mexico’s Senate Mining Commission, the desk that
fields all issues mining and helps set policy and decide on which mining matters get to debate
and eventual passage. Obviously an important cog in the mining law machine and its new
President is Lorenia Iveth Valles Sampedro, a senator from the Sonora region (15). She gave
22
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 ht82 ht4gua ht11 ht81 ht52 ts1pes ht8 ht51 dn22 ht92 ht6tco ht31
source: IKN calcs, TSX data
her first address as Commission President and used it to set out her plans and what she and
her commission was looking to achieve and to condensing her message into five bullet points:
More efficient laws
To strengthen the sector
Attract investment from both internal and foreign sources
Protect the environment
Guarantee national sovereignty over mining resources
Nothing too controversial there, certainly nothing about “banning mining” or taking a militant
position against the industry. Here’s a translated extract from this (16) report on her
inauguration speech:
“Mexico is one of the biggest minerals producers in the world, but its current laws do not allow it to take full
advantage of its potential. Senator Valles Sampedro underscored the need to perfect these laws so that the
country could capitalize on its resources, all without neglecting the well being of mining communities or the
environment.
A clear and effective legal framework would attract foreign investment. However, this must be achieved
without compromising on national interests or sovereignty. Any new legislation must make sure that Mexico
maintains control of it mineral wealth.”
The presentations then continued from other members of the committee, such as Senator
Cecilia Guadalupe Guadiana Mandujano, also from the ruling Morena party, who said the State
should keep control of mineral assets and find a balance in order to work with foreign capitals
mining companies. She also stated that the new laws should include strict environmental
standards and clear rules to protect ecosystems. In other words, policies straight from the
Sheinbaum “100 points” manifesto and an example of how Sheinbaum’s position will be enacted
by Congress. The report also noted that those present included new members of regional
parliaments, such as that of Sonora who looked to the new government to make their region
“the heart of mining” and laid out the region’s concerns over the law bill that seeks to ban
open-pit mining. This is a good thing and shows that the political system is now being proactive
in its response to the militant extreme law bill that made it through the AMLO controlled
committee earlier this year (and set off all the false drama).
Switching gear to focus on mining people, rather than politicos talking about mining, this article
in Mexico’s influential business media channel El Financiero last week was an interesting read
(17). Entitled “Seven Gold and Silver Mines to Begin Activity”, it starts with these words:
“Mexico will have four new active gold mines in the next six months that will produce a total
aggregate of 306,400 oz per year, as well as three silver mines that will ´produced 10.6m oz of
silver per year.”
It then goes ahead and names the projects.
“The biggest gold mine project is Media Luna, located in Guerrero and owned by Torex Gold,
which expects to begin commercial operations in the first months of 2025 and with estimated
production of up to 170,000 oz of gold per year. The three other projects, owned by Minera
Alamos, Endeavour Silver and Luca Mining, cover 136,400 oz gold.”
The article goes on the quote big names in the sector, such as the president of the Association
of Mine Engineers, Metallurgists and Geologists of Mexico, who defend the industry and put
forward the pro-mining agenda. It continues by laying out the issues faced by mining, such as
the mining law bill to prohibit open pit mining and on that, offers some interesting perspective:
“Although the law reform to prohibit open pit mining is not one of the priorities of Congress and
as such its debate is not expected to happen this year (2024), it is expected that the subject is
treated in 2025 and the opening of seven new mines may make the issue more polemic. There
are also four new copper mines set to being operation in the next six months, with one of those
owned by Grupo Mexico, the mining arm of Gerrmán Larrea (Mexican industry magnate and
opposition to the MORENA party).”
That’s positive to read, coming from good sources with their fingers on the pulse, who are
telling us “no news is good news” in this new legislature. However we need to be clear, we’ve
highlighted that the law bill had not “disappeared” in the way that social media screamers have
been insisting, it’s still an active law bill and will eventually come up on Congressional order of
23
business. Exactly how much of the bill survives after being sent to the lower house, debated,
passed, sent to the upper house, considered in committee, then debated, then passed (or not)
is another question, but we on the outside must understand that one day the subject is going
to come up again and that might resurrect the scare stories. However, we’re obviously going to
have a long-ish grace period and in the meantime, things are going to be allowed to progress in
the Mexico mining scene. The inference from the “seven new projects will become mines” is
also that permits are going to start flowing again. That, above all, will greatly improve the
optics for FDI looking at Mexico
The article then closes by laying out the lobbying efforts being made by the mining industry to
counter the contents of the infamous law bill, including the stats we’ve considered previously
that show the economic devastation such a ban would bring to Mexico, particularly mining
regions such as Sonora. That’s nothing new, what is new is to know that the anti-open pit bill
isn’t high on the Morena agenda and that new mines are going to be allowed to move to
production in the months ahead.
Colombia courting problems with COP16
In IKN802 two weeks ago, we made mention of the upcoming United Nations Biodiversity
conference (Oct 21st to Nov 1st) in the note “Colombia: COP 16 on the horizon”. But we’re not
the only ones to have noticed, as this extended report (18) from El Colombiano testifies (that’s
well worth a full read if you want details and nuances, probably good in Google Translate)
The Bajo Cauca zone in Antioquia is home to many small-scale mining operations (call them
artisan, call them informal, call them illegal, that’s up to you) and the miners’ associations there
have chosen October 21st as the start date for a region-wide strike and protest action against
the regional and national government. The miners say that the government has reneged on
agreements with small-scale mining sector and by falsely accusing them of being illegal miners,
have been destroying and confiscating its mining equipment (for example, river dredger boats).
The issue centres on the formalization process for these mining groups that was agreed upon
by both sides, with the miners saying they signed up to the process and therefore should be
allowed to continue working, but the government accuses the miners of using it as a front to
keep mining using bad environmental practices and after signing on to the program, have
shown no intention of completing the formalization process and cleaning up its collective act.
The government has a point, as they state that around 2500 of the 3500 small-scale mining co-
operatives that signed up for formalization are in the Bajo Cauca region but of those, only
around 600 have kept up with the program. However, there’s also an impression of a
government that created a plan that was destined to fail from the start by setting unattainable
goals and demanding too much from informal miners that don’t want or need expensive and
time-consuming paperwork around their necks (let alone start paying taxes etc). That the issue
is coming to a head at the same time as COP16 is smart politicking by the small-scale miners,
as the last thing Colombia wants is a strike that lays bare its ineffective environmental control
policies for the world to see.
Burkina Faso and the Common Knowledge Game
Last weekend in IKN803 we ran the comments made on mining by Burkina Faso’s junta leader
(i.e. de facto President) Ibrahim Traore as per Reuters and many other news services. They
included:
"We know how to mine our gold and I don't understand why we're going to let
multinationals come and mine it.”
We also singled out Orezone (ORE.to) as a potential victim
of the comments and added a couple of extra thoughts
about the potential ORE.to might offer as a distressed asset
trade if things really fall apart in the country (ISCID/CIADI
tribunals, etc), though there are of course plenty of other
companies exposed to Burkina Faso political risk (e.g.
Fortuna Mining, one I left off my list last weekend), so to
24
keep this succinct we’ll just run with the ORE ten-day chart as our example right).
Monday did indeed see a sharp sell-off in ORE shares (and others), but then came the rebound
as the IR and PR desks moved into action and the companies exposed to Burkina Faso risk
(EDV, FSM, ORE, WAF.ax etc) all started singing from the same playbook. For example, here
are some excerpts from NRS last week out of EDV, ORE and FSM (19) (20) (21):
“Endeavour remains a trusted partner to the Government of Burkina Faso and can confirm that it is not
currently aware of any plans to revoke any of its mining permits. The Government remains supportive of
Endeavour’s position in country as evidenced by the recent successful settlement agreement that Endeavour
signed, involving the State of Burkina Faso, in respect of the divestment of the Boungou and Wahgnion
mines, for which Endeavour has now received the first $30m payment.”
“The Company has been in contact with the government and they have clearly stated that the comments with
respect to the potential withdrawal of mining permits was meant only with respect to those companies
operating in violation of the laws of Burkina Faso. Companies operating in compliance with the laws of
Burkina Faso, which includes Orezone and many other mining companies, will not have their mining permits
withdrawn or revoked.”
Fortuna has sought clarification from the country’s Ministry of Mines on this point and has received
confirmation that the government has no plans to withdraw existing mining permits which are in compliance
with Burkina Faso’s laws. The Yaramoko Mine is in compliance with all material laws and operations continue
to be conducted normally.
Because governments would never lie to you or change their minds later. Please note the above
price chart again, because although ORE found a new trading level last week it’s still down from
the prices of the week before and the cause is fairly obvious. The sequence of events reminded
this desk of the essay published by Ben Hunt on his website, Epsilon Theory, on July 1st “Joe
Biden and the Common Knowledge Game” (22). It came in the wake of the disastrous debate
appearance by President Biden with ex-President Trump (and before Biden was replaced on the
Dem ticket by VP Kamala Harris) and while it’s not the first time Ben Hunt has broached this
topic, it was a masterful treatment of the subject, beginning with the statement “Common
Knowledge is what everyone knows that everyone knows” and continuing with the way in which
public opinion changes at key moments. If you haven’t read it please do so (it’s long and
erudite, so enjoy with a coffee at hand) but here’s a relevant excerpt:
“Even if everyone in the world believes a certain piece of private information, no one will
alter their behavior. Behavior changes ONLY when we believe that everyone
else believes the information. THAT’S what changes behavior.”
That’s what happened in Burkina Faso last weekend. Despite the Traore-led coup and
government direction since then, the Islamic terrorism in the SAHEL region, rise of Russian
influence in Burkina Faso (Wagner Group and all), the diplomatic kicking out of France,
Burkina’s exit from the ECOWAS trade zone agreement and the recent withdrawal of two
concession licences for private mining concerns, the evidence of instability and issues for mining
companies in the region has been ignored. Indeed, B2Gold even managed to sell its Kiaka
project to Australia’s West African Resources (WAF.ax) early this year, showing it’s not just us
retail grunts affected by The Common Knowledge Game.
That changed last weekend. Traore’s words cannot be taken back and the attempts by IR desks
to cope and tell us that “he didn’t mean what he said” cannot roll back what everyone now
knows that everyone knows about Burkina Faso.
Market Watching
Amerigo Resources (ARG.to) Q3 production
Hindsight tells me that I shouldn’t have sold Amerigo Resources (ARG.to) early in the year, but
we’re back in the stock and, if last week’s news out of the company is anything to go by, not a
moment too soon. ARG delivered its 3q24 production report on Tuesday, October 8th (23) so
let’s start with the most important number, the amount of copper ARG sold in the quarter:
25
ARG.to: Copper sales
26
11.51 31.51
9.61 298.61 92.61
68.41
81.61 97.61 94.61
966.31
779.01 80.61 169.51
33.41
84.61 51.61
20
19
18
17
16
15
14
13
12
11
10
12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 42q3 tse42q4
source: company filings
rtq/uC
sblM
That’s 16.48m lbs and that’s a good number. ARG gave us a preliminary average received price
for that copper of U$4.22/lb, (below left), which implies gross copper revenues of around
U$69.5m.
With the average received price of copper
dropping compared to 2q24, ARG will adjust its
provisional price assumption downward using its standard accounting effect (the real received
price is determined on the month +3, so for example the final price received for copper shipped
in July will be the average LME price for October. The accounting adjustment is made compared
to the previous quarter and this time, we forecast a negative $2.5m on gross copper revenues.
Then come the charges to gross revenues, with the main one being the royalty owed to tailings
owner El Teniete (DET), with smelting/refining and transport also backed out. After that comes
the moly by-product credit and while this is often a difficult one to estimate depending on when
ARG books receipts, the average price and production reported last week points us toward a
similar number to that of 2q24. So, we guesstimate $6m.
Put all that together and our top-line revenue estimate for the P+L is U$48.1m:
ARG: Gross Cu value, Cu revs and Revs total, per qtr
797.37 904.97 567.35 766.36 818.55
485.33
457.65 879.74
858.03
241.16 729.56 548.94 897.66 2.07 846.25 908.25 882.94
630.23
855.14
2.14
3.03 5.95 591.16
4.24
582.16 787.26
129.44
379.26 448.96
206.15
5.96 76
1.84
90
80
70
60
50
40 30
20
10
0
22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 tse42q3
ARG: Cu gross value, per qtr
U$m
Cu gross value
Cu revs
Revs total
source: company filings
When it comes to costs, our forecast of $35.5m
may be a little too pessimistic as the cash cost
number came in well, at $1.93/lb. The low-end
1.85 6.66 0.27 6.27 8.37 7.36 8.65 1.16 8.66 8.25
6.14
5.95 3.16 0.36 5.96
80
70
60
50
40 30
20
10
0
12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 tse42q3
ARG: Average Cu price for MVC U$m
source: company filings, IKN ests
80.4 44.4 32.4 23.4 46.4 01.4 05.3 08.3 20.4 08.3 67.3 28.3 79.3 93.4 22.4
5
4
3
2
1
0
12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 tse42q3
U$/lb Cu
ARG: Charges to Cu revs
30
25
20
15
10
5
0
source: Company data/IKN ests 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 tse42q3
U$m Transport
smelting/refining
DET royalties
source: company filings, IKN ests
ARG.to: Quarterly Earnings overview
624.12
616.1 655.3-
738.8
874.31
503.3- 420.2-
200.6 508.7
394.61
6.21
60
55
50
45
40
35
30
25 20
15 10
5
0
-5
22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 tse42q3
U$m
revenues
COGS
Gross profit
source: company filings
result was helped by the fact the 70% of production came from fresh tailings directly from DET,
with 30% from the Cauquenes historic tailings. That’s the highest percentage of production
from fresh tailings ARG has ever reported and as those pounds are cheaper to produce, I’ll be
happy to have got our estimate wrong when the financials drop on October 30th.
ARG: Production breakdown by source, per qtr
27
74.8
30.7
16.7
73.7
73.7
26.8
46.7
62.9
68.6
16.9
97.5
31.9
73.7
36.8
52.6
63.01
83.6
41.01
48.4
97.8
19.2
12.8
86.7
96.8
54.7
55.8
5
89.8
88.4
93.11
20
18
16
14
12
10
8
6 4
2
0
12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 42q3
Mlb Cu
Cauquenes tailings
Fresh tailings
source: company filings
That $12.6m gross profit forecast becomes an operating profit of $10.9m but more importantly,
our “real world margin” that backs out DD&A (we assume tailings are virtually unlimited) comes
to U$16.7m, or just over 10c/share US.
ARG.to: Gross, operating and net profits, per qtr
As we know ARG had a cash position of U$25.1m as
at end 3q24 (because they told us) and that it paid
CAD0.07 in dividends in Q3 (standard 3c plus 4c
performance bonus), there’s every reason to expect
the company to return the same amount of money to shareholders this quarter.
Regarding that, the CEO comment from Aurora
Davidson in last week’s NR were telling and here
they are:
“MVC delivered a strong quarter with copper
production of 16.3 million pounds, outperforming
guidance. The Company’s quarterly cash cost of $1.93 per pound was again lower than
expected, and Amerigo’s quarterly copper price in the third quarter was $4.22 per pound. This
combination of excellent operational performance, controlled costs and high copper prices
translates into robust financial performance, permitting the Company to continue implementing its
Capital Return Strategy,” said Aurora Davidson, Amerigo’s President and CEO.
“Amerigo’s Capital Return Strategy was designed so shareholders can quickly benefit from a
quarter like this. We will continue to deploy all three mechanisms in the Strategy with maximum
flexibility, as we expect copper prices to continue strengthening due to fundamental supply and
demand issues. We are off to a great start in Q4, as copper prices are well above the quarterly
average prices we have received throughout 2024,” she added.
10.12
74.1- 41.5- 10.1-
44.31
72.3- 3.6- 9.3
84.6
07.51
09.01
25
20
15 10
5
0
-5
-10
22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 tse42q3
U$m ARG: The real world margin
Gross profit
op profit
Net Income
source: ARG data
61.0- 30.1 33.21
97.71 24.02 93.22 79.61 15.22 49.52
95.3 20.0-
57.51 4.81
8.1 80.1-
41.9
52.21
25.12 07.61
28
24
20
16 12
8
4
0
-4
02q1 02q2 02q3 02q4 12q1 12q2 12q3 12q4 22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 tse42q3
U$m
source: ARG data, IKN calcs and ests
ARG.to: Cash and ST
590.17
20.35
318.14
128.73
329.34
576.13
131.31 842.61 108.31
637.82
1.52
80
70
60
50
40 30
20
10
0
22q1 22q2 22q3 22q4 32q1 32q2 32q3 32q4 42q1 42q2 tse42q3
$m
source: company filings
Difficult to be more bullish. ARG only has just over one month left on its NCIS share buyback
period, though that’s almost certainly going to roll over for another 12 months. The company
hasn’t bought back any shares so far this year, but it wouldn’t be a shock to see them go to
market this month. Neither would it be a surprise to see the company repeat the same 4c
performance bonus and make this quarter another 7c payout. Either way, the CEO comments
make it crystal clear that ARG is going to act on its Capital Return Strategy and that
announcement is likely with the Q3 financial drop
at the end of October. For context, assuming
another 7c quarter would mean a total payout of
C$0.20 this financial year, implying a yield of just
over 11%...very juicy.
Bottom line: Another great quarter from ARG and
as the ten-day comparative chart to the main
copper producers’ ETF shows (right), the company
hit a bit of lucky timing in publishing these strong
numbers on copper’s weakest day last week.
Including dividends, it hasn’t taken long to get to
+20% on this new trade and even though ARG is
now pushing toward its recent multi-year high of
just over $2.00 (when copper rocketed to over U$5.00/lb on the North America/Trafi physical
squeeze), the dividend yield and now regular production with strong margins indicate there’s
more in the tank. Back when re-starting on ARG in 2023, the dividend yield table we offered at
the time pointed to a share price that could reasonably hold above C$2.00 as long as the
dividends started flowing. ARG doesn’t have to offer 7c per quarter (or equivalent in share
buybacks) but even if it only does that twice a year, as now seems likely, a C$2.25 share price
would still offer a very attractive yield for the type of fund that collects this type of stock in its
portfolio. We await the 3q24 financials at the end of the month and hope to be surprised by a
lower than expected COGS number, but even so the attraction of this stock is its long-term cash
generation potential, not just a million more or less in opex in any given quarter. I should never
have sold and it would need an oversold bonus price to get me thinking about it again. At
current levels, Amerigo Resources is far from being oversold. Own some.
Amerigo (ARG.to): Dividend Yield Percentage Spread Table
Share Dividend per year (Cad Dollar Cents)
price CAD$ 12 15 20 22 25
1.00 12.00 15.00 20.00 22.00 25.00
1.25 9.60 12.00 16.00 17.60 20.00
1.57 7.64 9.55 12.74 14.01 15.92
1.75 6.86 8.57 11.43 12.57 14.29
2.00 6.00 7.50 10.00 11.00 12.50
2.25 5.33 6.67 8.89 9.78 11.11
2.50 4.80 6.00 8.00 8.80 10.00
2.75 4.36 5.45 7.27 8.00 9.09
3.00 4.00 5.00 6.67 7.33 8.33
source: ARG data, IKN estimates
Conclusion
IKN804 is done, we end with bullet points:
I can’t remember the last time I thought that Coeur Mining (CDE) looked cheap, let
alone wrote it down for others to see. However, the more I look at its deal to buy
SilverCrest (SILV) the more I like it, a set up that has the makings of a real win-win.
Another solid quarter from Amerigo Resources (ARG.to), the stock that makes me
wonder why I bang my head against brick walls trying to find winners among the small
copper explorecos. Just own this and be done, Amerigo and chill.
28
Mexico is going to be just fine. But please, avoid Colombia.
But if you pit a gun to my head and made me pick just one of the stocks in The IKn
Weekly as a near-term winner, it would be Rio2 Ltd (RIO.v). Or maybe Eldorado Gold
(EGO). No, I’d stick with RIO.v, its financing package for Fenix could be the moment
that unlocks the value here, once and for all.
I thank you in advance for any feedback. Our Top Pick stock is Minera Alamos (MAI.v). Flash
updates will be sent if required by events.
I wish you good trading fortune, ladies and gentlemen. Best wishes, Mark.
Footnotes, appendices, references, disclaimer
(1) https://www.calculatedriskblog.com/2024/10/schedule-for-week-of-october-13-2024.html
(2) https://www.silvercrestmetals.com/news/2024/index.php?content_id=547
(3) https://event.choruscall.com/mediaframe/webcast.html?webcastid=EB9o82Zh.
(4) https://redpineexp.com/investor-deck
(5) https://newcoregold.com/news/newcore-gold-drilling-intersects-1.96-g-t-gold-over-62.0-metres-including-2.23-g-t-
gold-over-28.0-metres-at-the-enchi-gold/
(6) https://6ix.com/event/investing-in-developers-hacking-the-lassonde
(7) https://www.hellenicshippingnews.com/copper-set-for-weekly-fall-on-dull-physical-demand-rising-china-stockpiles/
(8) https://www.c3metals.com/news-media/news/c3-metals-announces-closing-of-45-million-private-placement
(9) https://arizonasonoran.com/news-releases/arizona-sonoran-announces-closing-of-c-34.5-million-upsized-bought-
deal-offering/
(10) https://www.herculesmetals.com/news-release/?qmodStoryID=8207305276841580
(11) https://dundeeprecious.com/news-media/news-releases/dundee-precious-metals-announces-preliminary-third-
9567/
(12) https://lundingold.com/news/lundin-gold-reports-production-of-122-154-ounces-o-122784/
(13) https://www.barrick.com/English/news/news-details/2024/barrick-and-mali-reach-agreement-to-settle-
disputes/default.aspx
(14) https://www.reuters.com/markets/commodities/mali-says-barrick-gold-owes-500-million-taxes-fines-sources-2024-
10-08/
(15) https://mineriaenlinea.com/2024/10/lorenia-valles-sampedro-resalta-la-urgencia-de-modernizar-las-leyes-mineras/
(16) https://notiosonora.mx/2024/10/09/propone-la-diputada-iris-sanchez-chiu-fortalecer-a-sonora-como-el-corazon-
minero-de-mexico/
(17) https://www.elfinanciero.com.mx/empresas/2024/10/11/iniciaran-actividad-7-minas-de-oro-y-plata/
(18) https://m.elcolombiano.com/antioquia/gobierno-busca-negociar-con-mineros-bajo-cauca-para-evitar-paro-y-afectar-
cop16-DB25600715
(19) https://www.endeavourmining.com/news-and-media/news/endeavour-comments-media-reports/
(20) https://orezone.com/en/news/press-releases/orezone-confirms-bombore-permit-to-remain-valid/
(21) https://fortunamining.com/news/fortuna-responds-to-recent-media-reports-concerning-burkina-faso/
(22) https://www.epsilontheory.com/joe-biden-and-the-common-knowledge-game/
(23) https://www.amerigoresources.com/_resources/news/nr-20241008.pdf
Stocks To Follow Closed Positions 2023
29
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
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
30
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
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
31
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
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
32
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.
33