World War Zero

6/10/21 15:19 World War Zero |
World War Zero

There are a lot of sectors making big moves right now and lots to update you on.
In this month’s action-packed double-length issue of the KRO, we will go in-depth on
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the Carbon and Uranium markets and feature:
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1. COP26 Introduction
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2. The Insurance Greenaissance
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3. Carbon Rangers: Guardians of the Environment en o
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4. The Future of the Carbon Market vi

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5. 3 Credit Benchmarks: Blue, Green, and White Carbon

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6. Ringside Seats at the Uranium Battle Royale

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7. Uranium Market Dynamics

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8. Following the Money

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9. Carbon Streaming Rollback Update

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10. KRO Watchlist and Portfolio Summary

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11. Company Updates

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So, let’s get right into it…
Monday, November 1, 2021, is an important date.
To many, it will fly by and be nothing more than a hangover from sugar-filled
Halloween candy from the night before. And I do love indulging in Reese peanut
butter cups from my kid’s trick or treat bags.
To the 1 in 1,000,000 investors, like the alligators reading this, it will be the start of
some of the most critical talks in the global markets.
Many investors and historians could very well point to this date as the catalyst that put
World War Zero into motion.
https://subscribers.katusaresearch.com/reports/world-war-zero/ 1/50
The 2021 United Nations Climate Change Conference, also known as COP26, is the
26th United Nations Climate Change Conference. It’s scheduled to be held in the city
of Glasgow, Scotland, and will feature dignitaries, heads of state, and financial elites.
It is at this conference, held every year, where climate targets are set, countries are
held to account, and companies are forced to comply.
Net Zero
Carbonomics
Transition
ESG
Greta
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COP26
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Carbon Credits
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Green Washing
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Combine the above with the published climate science statistics from the most
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recognized institutions and universities and the media will be in overdrive reporting
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on the COP26 in Glasgow hosted by the UK at the end of this month.

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Expect all media and the news cycle to highlight reports that the global oceans, on
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average, are 30% more acidic, and global temperature is 1 degree Celsius warmer than
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before the Industrial Revolution. Which has resulted in a 70% decline in the
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population of mammals, birds, fishes, reptiles, and amphibians.

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To add urgency, the media will highlight that the rate of change of ice loss in the Artic
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is 300% higher than last decade.

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It took mankind 250 years to produce and release 500 billion tonnes of CO2eq into the
atmosphere. At current rates of emissions, it will take less than 40 years.
Now I will share the statistic that got the wheels turning in my brain…
1 in 50-year climate events occurrence will increase 38.9 fold.
This one line in the IPCC report caught my attention in a big way. I had to re-read the
whole section many times to fully grasp the significance. I will link the report later in
this issue.
The Insurance Greenaissance
Before you jump to conclusions and opinions, you must know that statistic above is
very important.
Backed by enough evidence and math, the results will directly affect the way the
insurance sector does business.
The insurance sector (as a whole) is one of the largest pools of capital (non-govt) in
the world and the largest provider (non-govt) of capital for infrastructure projects
globally.
2017 was a banner year of losses for the insurance companies: $140 Billion in
climate-related infrastructure losses.
Dr. Stokes, testifying in front of Congress in September of 2021, stated that the cost on
the US alone in 2021 would be $500 billion due to climate and weather disasters.
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Another well-known insurance group, Lloyds of London (over 300 years old and
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operating in 200 countries—they are survivors!) published their calculations that they
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believe proves that the 20cm rise in sea level at the tip of Manhattan, compared to
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1950 water level, increased the insurance losses from Superstorm Sandy in 2012 by
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In addition, over $500 Billion of coastal US property could be below sea level by the
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year 2100. These stats are all a major risk to the insurance companies’ operations.
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Agree with the published data or not. It’s presented by the top firms in the world and
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the biggest insurance companies in the world have taken note.

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The UK government is the host of COP26 in Scotland.

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But it’s not just politicians that will have a say at COP26. Let me explain.
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The Bank of England (Central bank of the UK) is the force behind UK being a global
insurance powerhouse.
This newsletter isn’t about insurance nor actuarial science (that’s the math that can
calculate with incredible accuracy when we will each die when the insurance
premiums are written).
So please bear with me with on some minutia – that will really shock you
– and help you understand where the flow of capital will be going over the
next decade.
The UK is the single largest market for non-life insurance in the world (7% of global
insurance premiums). These premiums are written through the London Market with
almost 85% undertaken in the UK by insurers which are themselves part of groups
headquartered overseas (read: everyone is connected and not an island).
UK domiciled insurers rank 4th globally in written premiums and manage almost $2
Trillion in assets.
The insurance business is so big that it will depend on open international insurance
markets.
Hence, sector reform and legislated reform will become a key factor in
redirecting/investing/lending trillions of dollars of managed insurance assets towards
reducing the impact on the climate. Meaning to have access, one must abide by the
rules.
In addition, large infrastructure projects, real estate assets, and other assets, etc. will
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have to meet the criteria of the insurance companies OR risk the potential of not
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meeting the coverable criteria by the insurance company because of their carbon
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footprint and emissions.
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It would be the equivalent of an obese smoker who has had a heart attack that doesn’t
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qualify for life insurance. Too bad, so sad. en o
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Without a plan to reduce the corporations’ carbon footprint, their portfolio of assets
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may not qualify for insurance coverage.

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Would you invest in such a company, for example, a REIT if the portfolio of buildings
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did not have insurance coverage?

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Perhaps, but at a much lower valuation because of the risk of uninsured assets risk.
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The central banks and large insurance corporations are all getting behind
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a NET ZERO movement.

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It all comes down to the cost of capital.
Over $88 TRILLION dollars (WOW!) from just the financial world (insurance,
pension, and specific government plans, etc.) has already lined up to commit to
allocating that capital to projects/companies/assets that meet the criteria of
reducing the carbon footprint. I want everyone to think of the magnitude
of this amount of capital.
The total annual global energy spend is less than $2 Trillion. This is over 44 years of
global annual energy this decade.
In addition, the IEA recently came out and stated that the energy spend needs to at a
minimum double to meet the agreed-upon goals of Paris 2015 COP.
Over the past 6 years, decarbonization went from a cute idea to what will become the
most highly sought-after investment theme since the late 90s tech boom. Through a
concerted effort, corporations and governments around the world used the 2020
pandemic as an inflection point to move from an unsustainable emissions trajectory to
a sustainable pathway.
The prizes and penalties for decarbonization success and failure have never been
higher.
You’ll see below that since January 2020, the number of companies with net-zero
commitments has tripled.
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These commitments are not backed by some fluffy long-term guidance. Financial
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commitments to back net-zero targets have soared 18-fold to $88 trillion in the past
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18 months. The corporations have committed with their balance sheets.
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Some of you may still not believe in this whole “climate change and decarbonization
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world”, and that’s fine. Close friends of mine (like Doug Casey) have publicly stated as
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much.
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To the many subscribers who sent me the video of Doug smack-talking the Climate
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Change movement, there are a lot of things Doug says that are wrong. There is a
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reason I manage his money and Carbon Streaming (NETZ.NE) is one of his
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largest bets in the market, ever. I love Doug and he is a very close friend of mine,
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hence why I am allowed to say this publicly. I’m not here to change your beliefs. I am
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here to present a very strong investment proposition, backed by a strong narrative,

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that has the potential to make us a lot of money.

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I’m not here to change your views on climate.
I believe you subscribe because you want me to provide the best investment
opportunities. For me to do that, I must keep learning, keep evolving, and get exposed
to as many possible deals that I can assess and analyze. I can never give up on a
financing structure that I believe will work… and take on all forms of adversity that in
the end will present unique financial opportunities to you. Once all this effort and risk
is applied, I then present the best ones for your investment decision.
The largest and most powerful investment institutions in the world are heading in the
direction of decarbonization. I believe the UK government will make a big commit this
COP 26 and even go as far as to start legislation towards a decarbonization framework
(making it law). Doug Casey agrees with my framework 100%, and he also believes it
will be a big winner for his portfolio.
This movement will impact all your investments, not just Carbon
Streaming Corp.
This was a big talking point in the last chapter, The Forbidden Chapter, in my book,
The Rise of America. Corporations that are not willing to make changes simply won’t
attract new investor capital. Worse, many current investors will be forced to sell out.
Companies who don’t want to play by the new rules will face much higher costs of
capital which in turn will render them obsolete and uncompetitive. Aggressive
shareholder activism will continue for those companies who don’t want to play ball.
Again, the cost of capital goes up for those not willing to make changes. This is the
new normal.
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Carbon Rangers: Guardians of the Environment
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A year ago, while we were going thru the due diligence process of Carbon
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Streaming Corp (NETZ.NEO, OFSTF.OTC), I came up with an idea while I was
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Rather than the company paying any finder fees to anyone, a portion of the “what
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would be finder fees” would go towards the ‘Carbon Rangers Fund’. This capital would
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be applied to training and providing state-of-the-art technology and equipment to the

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indigenous people in the region where the company was investing money to produce
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carbon credits.
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Let me take a step back and give you some background…

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In the resource sector, the foreign companies (mostly Canadian, American, or

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Australian) do try to employ and train the local indigenous community. But the fact is,
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most of the jobs available are unskilled labor jobs (truck drivers). I’ve seen it across
the board on every continent.
Corporations do try to implement training programs, but to be a geologist or

metallurgist takes years of schooling and years of on job training.
Producing carbon credits is very different than producing gold or copper from the
ground.
For example:
Technologies available today can run as applications on any smartphone. The tech
that didn’t exist just a few years ago (such as the new high definition version of
LIDAR) can be used where the LIDAR sensors are able to image in incredible high
definition and as a result track in real-time many aspects of the temperate forests. Fo
example, rather than just reacting to forest fires or illegal logging or hunting, the
Carbon Rangers can use this technology, once trained after a few months, on-site to
help prevent forest fires, stop illegal logging (sensors track and alert for equipment
movement and people) and catch those engaging in illegal hunting—all in real-time.
The sensors would alarm the Carbon Rangers as the equipment is being moved into
the forest and the resolution is so precise you can see the type of chainsaw being used
Rather than the indigenous community being hired for short-term labor work (for
example, planting trees), the community gets 5G internet, technologies, equipment,
and training to empower themselves to be key players in the carbon credit production
and benefit financially by protecting the environment. These would be ongoing,
long-term high paying jobs. Many years into the future, Carbon Rangers will be
involved in every carbon credit project.
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I’ve been involved in many mine-builds in my career. At almost every project,
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resistance from the indigenous people was an issue to be dealt with. In Canada, every
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First Nation states they are guardians of the environment, and through this idea, the
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money, technology, equipment, and training are available to make the Carbon
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Rangers the guardians of the environment. And we (all stakeholders from
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shareholders to the local community) all make money together while the environment
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and biodiversity thrive. vi

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For example, look at this chart created by the smart crew at BNEF (Bloomberg New
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Energy Finance).
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This is a very alarming chart that I am surprised the media hasn’t picked up on—but
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they will soon enough.

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But currently, the world is “reacting” to forest fires after they are out of control. (On a
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personal note, I had to cut our one summer family vacation to the interior of British
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Columbia short because of extreme smoke and haze from the forest fires that were
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raging—literally ash was falling on us).
Carbon Rangers will be part of the solution.
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Companies such as Carbon Streaming Corp (NETZ: NEO), Osisko
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Development (ODV: TSX-V), and Dakota Gold (DTRC: US OTC) have all
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agreed to reduce their carbon footprint and use the “in lieu of finder fees” funds
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towards funding the ‘Carbon Rangers’ and “do it right”.

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Zero money will be wasted I can assure you. As I am the largest or one of the largest
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shareholders in each deal. I will also eventually get Equinox Gold (EQX.TSX and
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EQX: NYSE) and every deal I am involved with on this idea—will be a criteria. Why
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pay a banker when we can fund Carbon Rangers to make a real difference?
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Slowly, the market will reward these companies with a lower cost of capital. And as the
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share price benefits, the rest of the industry will catch on, or be bought out if their
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assets are high quality by companies benefiting from a lower cost of capital.
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By reducing their carbon footprint and improving the lives of the indigenous
communities and environment, the corporations will be reducing their cost of capital
which will make them more powerful compared to their peers and deliver higher
shareholder returns. Would you buy “green gold”? Of course, you would, especially
when the cost of production would be lower than “dirty gold”. That is where the sector
is going over the next 30 years.
And there is almost $90 Trillion committed to only investing in projects/companies

that meet such criteria as I mentioned above.
Some have stated that I have done a “green pivot” to get with the global “Illuminati”
etc. Everyone here knows my style by now.
I’m not doing any of this to get attention from the media or politicians, or to get my
picture with celebrities.
I’m doing this because I see an incredible financial opportunity while doing things
right, making it a win-win for everyone.
By the end of October, the media narrative will be full of talking points that will be
repeated nonstop by politicians, diplomats, central bankers, scientists, policymakers,
and corporation executives.
In 1998 during the Kyoto protocol (COP1), it was mainly unknown government
diplomats and scientists toiling away coming up with policy. Nothing happened as a
result. Nobody cared and there were no big names for the media to “interview,
highlight, repeat interview… that would capture their audience attention”.
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In 2015, the Paris Agreement (COP21) went Hollywood-and the media
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took notice.
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What I mean is the same diplomats and scientists were there, but the media was now
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buzzing with celebrities, big-name politicians, senior executives of the largest
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corporations, and billionaires all joined forces publicly to make a difference. Yet,
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nothing tangible resulted. Some blame Trump, but I have a different take.
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COP26 in Glasgow will have the same entourage of the 2015 COP21 in Paris. But the
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glitterati will now have major talking points, pointing to science and the money lined
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up to make a difference mostly summarised in this 3,949 page report

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(https://www.ipcc.ch/report/sixth-assessment-report-working-group-i/).
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By the end of this month, the COP26 conference will have begun. COP26 is THE
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Climate Change conference. It is the most important climate change conference in the
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At COP25 (Dec. 2019 in Chile), the goal was to finalize the Paris Climate Agreement
(COP21), which is the governing piece of the international legislature, and it aligns
global emission reduction with the carbon credit market.
Frustratingly for many, COP25 turned out to be a total bust. Most of the world’s major
emitters didn’t change their stance on climate pledges nor did anything regarding the
Paris Agreement get ratified. The UN secretary called it a “disappointment” and a “lost
opportunity”.
So, could COP26 be an improvement or is this setting up for another

failure?
Politicians are notorious for overpromising and underdelivering. So, I am not holding
my breath for the outcome. But I do believe there are several crucial principles that
will be discussed and maybe if we are fortunate, hammered out.
What has been agreed on?
1. There is no debate about what a carbon credit represents. Everyone agrees that
each carbon credit represents 1 metric tonne of carbon dioxide that has either
been avoided or removed from the atmosphere.
2. In addition, a credit can be “banked” meaning it can be saved and applied to the
owner’s emissions in the future. Finally, a carbon credit can only be used once,
and once used, it must be retired.
What’s left to finalize?
Here’s what’s coming…
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Article 6—Which Way Will the Carbon Credit Go?
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Within the framework for global emission reduction in the Paris Climate agreement is
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a specific principle that is snarling up the ratification process. Known as Article 6, it
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pertains to carbon credit ownership. Specifically, who gets to apply for the carbon
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Here’s an example:
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Let’s suppose Microsoft wants to offset its carbon footprint for a server farm in the
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United States.
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It goes out and buys 1 million carbon credits which were produced from a carbon
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offset project in Brazil. Since Microsoft bought the credits, it should get to reduce its
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emissions, right?
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But the offset is located in Brazil. So should Brazil get to reduce its emissions as well?
What about the United States which has now seen its emissions drop due to the
purchase of the offsets from Brazil?
Apply this scenario to hundreds of millions of credits across 190+ nations with
different tax regimes and carbon reduction plans and you can see how this starts to get
complicated very fast…
There are 2 schools of thought on how to approach this dilemma, and essentially what
Article 6 needs to finalize.
1. Both the private entity who bought the credits and the host country
where the carbon offset is located can both claim emissions reduction.
Verra, the world’s largest issuer of carbon credits by a wide margin, supports this
view.
2. Only a single entity can claim emissions reduction, making them a one-
time use. This means that only the host country or the buyer could offset
emissions. Gold Standard, the world’s second-largest issuer of carbon credits
(though well behind Verra) supports this view. Gold Standard’s model relies on
“donations” to fulfill corporate pledges and offset programs.
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I believe Verra is correct when it states that forbidding host countries from counting
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The core issue with #2 is that it disincentivizes corporates and host countries working
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A host country would forbid any project generator other than a domestic state-owned
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offset generator to design and build offsets. All the credits generated would have to be
sold domestically (meaning lower prices based on supply and demand) and go to
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nationally determined contributions. It would essentially prohibit any international

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investment into offset projects. The primary buyers for carbon credits, globally, have
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been international companies with global carbon footprints.

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Under the Gold Standard model (Option 2)…
Corporations from outside the host country would “donate” to the offset generator but
would not reap the emissions offset benefit. It’s hard to see how that framework works
in a global finance setting like we live in today. Forget the fact that government works
much slower than the private sector and leaving it up to the governments would likely
mean we’d fall even further behind our emission reduction goals.
If the Carbon market goes to Option 1, which suggests that both the buyer of the credit
and the producer of the credit can both count the emission reduction, I don’t see a
major change in how the market will unfold and we are positioned well. All of Carbon
Streaming Corps assets are, or will be, verified by Verra.
If there is a black swan event and Option 2 is selected it makes things more
challenging. Credits issued under Verra would likely have to be sold in the country
where the credits are certified which would result in lower prices for carbon credits
and more importantly, lower demand for carbon-reducing projects.
A 3rd option is that a revised international carbon market governed by the UN or IMF
is put into place.
Under this framework, it would allow the transfer of currently verified credits from a
recognized organization such as Verra or Gold Standard, and these credits could be
onboarded onto a UN or IMF international trading framework. A global minimum
price floor in the $50-$150 per tonne range could then be set by the governing body.
This would allow the politicians to feel like they have control while still allowing the
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private market the opportunity for price discovery and market development. This
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would build upon the Clean Development Mechanism which was the precursor to the
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Paris Agreement.
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The Future of the Carbon Market
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It is incredibly rare to be on the emerging frontier of market development.
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Mainly because most markets have already been around for decades.
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The past 12 months have represented a once-in-a-generation opportunity and I still

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believe we are very early to carbon. There are many highs and lows to come.
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But make no mistake, you as a KRO subscriber who is a shareholder

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of Carbon Streaming Corp have helped incubate, create and design

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the framework for the carbon market.

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Pre-internet revolution, access to information and deals meant a big potential

arbitrage opportunity. As the internet made information more readily available, that
arbitrage opportunity disappeared.
For example, when the collapse of the Soviet Union happened, there was incredible
potential for foreign companies to buy state-owned enterprises. The ones with access
to information were able to make the right valuations and made fortunes.
Most in the west avoided the Russian and FSU state auctions because of the
corruption, but when the wall in East Germany came down, the compliance and
governance of West Germany were applied to all state-owned enterprises. Very little
corruption happened as a result and East Germany was properly brought into the
modern world of finance and the region thrived.
The opportunity present today in the ‘War Against Carbon’ (or as John
Kerry calls it, World War Zero) is the single biggest financial opportunity
I have seen of my lifetime.
Even with so much technology and information readily available, so few people are
aware of the opportunity present. There is an incredible arbitrage opportunity for us
coming.
When an investor is this early to an investment theme it can be challenging sometimes

to think about the big picture outlook and not get caught in the minutia of daily
volatility.
I recently sent one of the KRO staff to a week-long East Coast conference to try to
uncover more opportunities. He did, however, none met our criteria. But that doesn’t
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mean we stop.
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In addition, I have given an offer to a company on terms for a financing, that I would
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personally backstop. The company thus far has not accepted my terms, but if they do,
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you may get access. If it does happen, it will happen by year-end and KRO Chairman
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Members will be the first to get notified. en o
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(NOTE: If you are interested in getting on the waitlist for a Chairman

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Membership, you can put your name down here).

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Carbon From 30,000 Feet

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Sometimes it is helpful to think about things at a 30,000-foot view, rather than under
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If you speak with almost any commodity producer on the planet, they’ll tell you it is
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very common to pre-sell current production using futures contracts. And it is equally
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as common for them to lock in hedges for things like currency exposures or electricity
prices.
Futures contracts provide deep liquidity and price transparency with

the ability to settle millions of dollars in a single transaction over
nearly any time frame.
Today, over 90% of the carbon market is settled in the spot market. This means very
few carbon offset developers or carbon credit buyers are using the futures market for
exactly what it is designed for.
Furthermore, as you’ll see in the chart below, the vast majority of trading is conducted
outside of an electronic trading platform.
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This year, only 30% of those spot market voluntary carbon market contracts were
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settled on an electronic exchange. Most carbon transactions today are brokered, and
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relationship-driven rather than companies logging into a platform to transact like

stocks. Price discovery is non-existent. This will change.
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The carbon market will evolve to a place where

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1. A company can build its capital budget for the year,

2. Predict with reasonable accuracy what its emissions will be (scope 1,2,3 see
description of emission scopes here), and then
3. Go out and buy an offsetting futures contract for those emissions in an electronic
marketplace.
At contract expiry, the buyer of the carbon credit futures will take possession of the
credits, known as “delivery”. Once the contract is delivered to the buyer, these carbon
credits can be applied against the company’s emissions. Any differences between
forecasted emissions and actual emissions can be reconciled in the spot market.
Below is a screenshot of the current voluntary carbon futures market. Both of these
contracts trade on the Chicago Mercantile Exchange and represent 1 carbon credit.
The orange line is the Global Emission Offset which is backed by the aviation
industry under its CORSIA framework.
The second contract (the green line) is the Nature Based Global Emissions
Offset, derived from Verra’s carbon credit methodology and represents the price
for “natural” carbon reduction or removal.
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As you can see, the price for a CORSIA carbon credit today is $7.10 per contract and
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the nature-based credit sells for $8.10 per contract. Recall each carbon credit
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represents 1 metric tonne of CO2 reduced or avoided. So, to offset your carbon
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footprint by 1 metric tonne it will cost you a little over $7 today.

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I do believe the difference or “spread” between CORSIA and Nature based carbon
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credits is a correct reflection of the quality difference. On average, the Nature based
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credits are a premium credit then found under the CORSIA scheme.
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I do find it strange and believe the market has mispriced the contracts for next year
and into 2023. A flat curve indicates that supply will meet demand. However, if one
considers the amount of capital flooding into the sector combined with corporations
and speculators just beginning to enter the marketplace, this is ripe for another leg
higher in 2022.
The demand for credits from corporations simply outweighs the immediate supply
provided by offset generators. And because the spot market is relatively illiquid it
won’t take much to send the market higher.
Less is More
Explaining pricing for Carbon Credits to sophisticated investors is like explaining wine
pricing in an auction to my dad. My dad is an incredibly hard-working and disciplined
immigrant who loves his wine – his homemade red wine, that is.
There are so many different types of grape varieties that make the various different
wines… in addition to the various different vintages, that he has no interest in other
than it’s red. Ditto for carbon credits.
There are over 68 different carbon pricings. And there are multiple different years
(vintages) those credits were issued. Not only do you need to know what type of
carbon credit it is, but you also need to figure out the vintage.
I am a pretty big wine collector—and when my dad comes over for dinner, I ask him:
“Dad, do you want red or white wine”.
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“Red,” he responds.
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He doesn’t want to know what vintage or grape. He knows I collect good stuff, and he
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likes red wine.
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Believe it or not, in the oil market there are many different oil prices dependent on
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region, API, viscosity, volatility and toxicity, and other features. But yet, almost
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everyone references oil to the two main oil pricing benchmarks; WTI and Brent Crude.
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There are literally thousands of carbon offset projects each of different quality and
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types. I do believe that eventually, this market will have 3 mainstream benchmarks.
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3 Carbon Credit Benchmarks: Blue Carbon, Green Carbon, and White

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I came up with these names because I hated the horrible nomenclature used by the
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industry. This idea hit me while going on a big mountain hike with my wife on our
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wedding anniversary.
Forest fires are a big risk and were very high risk during our hike, and the warning was
set at RED+ on the sign at the bottom of the hill.
Guess what?
REDD+ (an extra D) is actually nature based (tree) credits for forests. I was telling my
wife what a horrible name that was for the carbon credits which are essentially used by
the forest service fire workers to make fire risks also. When I think of REDD+ I think
of forest fires—not an image I want for carbon credits associated with forests. Green
carbon is a much better name.
She said, come up with something better.
And that’s what I did during our hike.
Ross Beaty (Chairman of Equinox Gold) is my sounding board for ideas. If anyone
will rip apart an idea or concept in my face without any regard to my ego, it’s Ross. We
went for coffee at our ritual coffee spot, and he was bouncing off his seat with ideas
after I shared my idea to him. That’s when I knew I was onto something.
I shared this with the group that provides the spot market exchange and platform
which the CME uses to price carbon credit futures—and they also loved it. More
carbon credits trade on their platform than the rest of the world combined. We will be
making a public announcement on the pricing of carbon credits based on the three
main types of carbon credits: water, land, and air-based credits.
So here you have it:
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1. Blue Carbon (Water): Tidal and coastal wetlands, mangrove forests, salt
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marshes.
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2. Green Carbon (Trees & Nature): Reforestation, Afforestation, and other
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“nature” based offsets
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The goal of these three carbon benchmarks is for the whole industry to be able to
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understand and communicate the value.

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The goal will be to be like the global benchmarks in the oil market which has West
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Texas Intermediate (WTI) and Brent crude as its 2 international benchmarks. From
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these 2 benchmarks, regional and specific pricings are derived.

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For example, West Texas Intermediate (WTI) is the North American crude
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oil benchmark.
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Mexican Maya Crude Oil is a lower quality crude oil and is sold at a $5-$10
discount to WTI.
Similarly in Europe Brent Crude Oil is the benchmark and crude oil produced
in Europe, the Middle East or Russia will sell at premiums or discounts to Brent.
I see the carbon market shaping up in a similar fashion. Three core contracts (Blue,
Green, White) and then specific projects and offsets will sell credits at premiums or
discounts based on determining factors like size, location, and co-benefits.
I want KRO subscribers to approach the concept of decarbonization and the

investment in Carbon Streaming Corp with a similar mindset as our initial investment
in Uranium Royalty Corp (UROY: NASDAQ and URC: TSX-V) when it was
still private in 2018. This means you should have a multi-year vision and time frame
for this investment. In due time, the carbon market will be a large, sophisticated,
liquid, and transparent market.
Today it is far from that.
This means those with a clear vision and long-term investment horizon have the
opportunity to do incredibly well.
Regardless of if you share my vision, you will all be able to take profits. If you are in
that camp, I’d wait until the company lists on the NASDAQ. Because it will attract a lot
of attention and volume, as it’s such a unique company that is cashed up.
Everyone in my office, family, and close to me know that I am uber bullish on carbon
Credits and will not be selling a single share and telling them to do the same. Do with
that info what you will.
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Not to mention…
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I still have a few tricks up my sleeve on this one that I am working on behind the
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scenes—not representing the company, but rather the shareholders—of which I am the
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largest. Those efforts may not materialize, but I am spending a lot of my time (and
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Ringside Seats at the Uranium Battle Royale

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Uranium on the spot market finally crossed the $50/lb hurdle, and then sold off hard
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on small spot volumes. For example, the spot price of uranium lost 10% on Friday,
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Sept 24th by one seller (I believe it was Cameco).

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I’ll explain in more detail later, but the investor/speculative side of the uranium
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demand market is going to be tapping the equity markets to prop up the uranium spot
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market. Not having any of it, Cameco has openly stated it doesn’t believe those will
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be successful and knocked the price of uranium down $4/lb in one day to prove a
point. It will be an interesting battle to watch on the sidelines and one we won’t be
actively participating in, as I’ll explain below why.
Pre-Covid that would have been a decent price for some of the permitted low-cost
producers to lock in long-term contract prices with the utilities.
But we are in a new world and to that end, I discussed ‘Crossflation’ in The Rise of
America…
Essentially, we will see inflation in certain sectors while we see deflation in others.
Mining will be an area we will see inflationary pressures, and I don’t see it being
“transitory” for a short while. We will see software continue to put deflationary
pressure on certain sectors, but labor and equipment is a serious bottleneck that will
continue to increase inflationary pressures in mining. Uranium included.
I don’t think you will see long-term contracts from the sub 1M/yr uranium producers
signed at $50 per pound or below.
My sources have shared with me that Cameco has recently signed a long-term offtake
with Duke Energy in the low $30/lb range in mid-September. This is pure
speculation, but this came from a seasoned trader of uranium that has been spot on in
the past. That’s bad timing for Cameco if true. Cameco doesn’t put much faith in the
spot market as they believe the long-term contract prices are the “real” market.
Naturally, we need to focus on what KazAtomprom, the global giant in uranium

production, is going to do. I believe KazAtomprom will not sell any more pounds into
the spot market for the rest of 2021.
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If you recall from the uranium webinar in early 2020, I highlighted some of the
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production issues they may face. Recently, management of KazAtomprom has hinted
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they will be either miss their production targets or be on the very low end.
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So where does that actually leave us at with regards to the supply side of the market?
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We will get to this critical question later in this section.
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Uranium Supply & Demand

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First, let’s look at where the actual demand for uranium is coming from.
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I mentioned in the September KRO and in the recent alert that the Sprott Physical
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Uranium Trust (SPUT) has become the best bid in the uranium spot market.
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What does that mean?

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SPUT is a publicly-traded investment trust which is a buyer and holder of physical

uranium. You can think of it like the ‘GLD’ ETF in the US which provides investors
exposure to physical gold without having to store gold itself. There are some nuances
between unit trusts and ETFs but at the end of the day, it represents the same thing,
passive pure exposure to a commodity.
The SPUT provides passive exposure to uranium. It provides a way for generalist fund
managers and investors to gain exposure to uranium price movements without having
to buy a miner and take on extra risk.
Through a technique called an “At The Market” (ATM) facility, the company conducts
unit issuances on demand. Meaning if a family office or large buyer wants to buy 1
million units of the SPUT, these units can be created and sold to the investor at net
asset value. There is no dilution to current owners of the trust. The family office gets
$1 million worth of SPUT units, and the cash goes to buy more uranium.
The ATM facility can be up to 1x the NAV of the trust. With the current NAV of the
trust around CAD$1 billion, it means that the trust can issue up to CAD$1 billion in
new trust units. Since the ATM program began in late August, the trust has taken in
over CAD$500 million and purchased over 10 million pounds of uranium from the
spot market during that time.
Below is a chart which is tracking the daily activities of the trust. It shows cumulative
dollars raised to date through the ATM (CAD$548 million), uranium in trust
inventory (29.2 million pounds), and total uranium purchased since the trust became
active on August 20th, 2021 (10 million pounds).
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To link uranium prices to the trust, below is a chart of the price impact created
through this buying activity.
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As you can see the SPUT sent the price of uranium up 65%, nearly $17/lb higher by
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clearing out a large amount of spot market inventory.

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Taking this one step further we can see the direct impact this is having on uranium
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“There are decades where nothing happens;
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And there are weeks where decades happen.”
-Vladimir Lenin
Uranium had a dark decade post-Fukushima in early 2011.
In 2018, the KRO started making noise by backing the first royalty and streaming
uranium company in the world. We followed up by publishing a “faux short report” for
Uranium showing that we would do the homework for the shorts. And if there was a
way to still make money in that scenario—what that company would be. It’s ironic how
many people didn’t actually read the report and only cut out and send along the “short
report part”. I got a lot of hate because it was seen as “Marin is anti-uranium”.
I’m not a cheerleader for any sector. You can’t buy me. I call it like I see it and draw a
lot of venom in the process.
But after publishing that report I went big into Uranium Royalty Corp and so did
many subscribers alongside me. Chairman subscribers got the first taste, and KRO
alligators responded in a big way in the IPO – with free, full, 5-year listed warrants.
There were almost 18 months where nothing happened with the share price. It was
years of preparation and patience.
Then within the span of a few weeks, everything changed.
Investors were piling into uranium.
Wall Street Bets and Reddit were on fire with Uranium short squeeze posts.
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Twitter and YouTube’s algorithm were full of uranium news and alerts, filling up
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everyone’s feed.
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The bullet train was on. Out of nowhere. Or was it? Not really if you were prepared.
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Remember, luck is being prepared when the opportunity presents itself.
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And we were prepared.

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[Side Note: Thank you to all of you that wrote in with kind words and comments on
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the (some extraordinary) gains made on Uranium Royalty Corp and the URC
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warrants. Those words are exactly what gets me fired up to find the next big idea and
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research until the late hours of the night.]

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You’ll see in the chart below, the sector market cap for uranium appreciated by $14
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billion, from $20B which is a 70% increase. Let me remind everyone that almost all
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the uranium exploreco’s have exactly the same shitty projects, run by the same shitty
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management teams that did nothing with uranium in the last cycle (2004-2007) when
the price of uranium per pound was 100% higher than it is today.
It’s important here to remember that it took less than $500M of spot buying to
increase the “market cap” of just the North American listed uranium companies to
$34B – which was almost a 30-fold impact on buying to total market cap increase.
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So what happens now?

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Let’s explain why.

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To answer this, a solid understanding of uranium market dynamics is required.

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There are 2 markets each with its own price for uranium.
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The Spot Market: This market is for “immediate” uranium delivery. These
barrels of yellowcake are swapped between traders who house a big chunk of the
barrels on mainland USA at Converdyn. Ironically today, the earliest delivery
from the spot market is late January 2022.
The Long-term market: This is the market where utility companies like Duke
Energy sign multi-year contracts for stable uranium supply with uranium
producers like Cameco or KazAtomprom. Contracts on average last between 2-5
years.
Since 2008 the long-term price has traded at a premium to the spot price as can be
seen in the chart below in red.
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Yet, as the spot price has moved up, the long-term contract price has not budged. And
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the spot market (black line) is at its largest premium since 2007.
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Cameco is going to continue to provide their offtake contracts with the utilities as they
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always have.
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I have had discussions with Grant Isaac, the CFO (and future CEO in my opinion) of
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Cameco, and my sense of the Cameco strategy is simple: The Cameco management
think they are smarter than the Kazakhs and the “uranium investment community”
and will align themselves as the “stable” provider of uranium for the nuclear utilities
in the US.
This strategy may work. But Cameco will come under significant pressure if the spot
price continues to trade at a significant premium. And KazAtomprom starts signing
much higher prices for Long Term contracts and the Spot market in early 2022. This is
a space to watch.
The Achilles heel to Cameco’s strategy is bringing back production at previous

production costs will not be as simple as the spreadsheets say, or what their previous
costs were because of the inflationary pressures seen in mining. This is not only due to
covid, but the supply of equipment and an experienced workforce in a remote area. I
could be wrong, but I think Cameco will have some tough decisions in the years ahead.
It’s not a stock I want to own, nor do I own it.
We have the benefit of having royalties on both Cigar Lake and McArthur River,
two of Cameco’s best mines without any operational risk in Uranium Royalty
Corp (UROY.NASDAQ, URC-TSXV).
With the spot price now hovering around the $40/lb range, the negotiation for long-
term contracting just got a lot more interesting. The Kazakhs are the ones to watch as
they make up 40% of the supply or primary uranium production globally.
I expect the Sprott Uranium Trust will keep a solid bid in the spot market until the
new year. Then it will come down to what the Kazakhs want to do:
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1. Either side with the utilities (who have taken advantage of the situation in
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conjunction with Cameco) over the last decade, or
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2. Put the screws to both Cameco and the utilities. But this will all come down to
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which way the Kazakhs go.
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The Potential Black Swan – Winter is Coming vi

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I think Europe could have a very cold winter—and with that reliance on Russian
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reliable and cheap natural gas will be at the forefront. Boris Johnson, the Prime
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Minister of the U.K. has “promised” the U.K. citizens he will keep the lights on this
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winter. We all know what happens when society must depend on a politician. Answer:
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nothing good.
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Putin will do what Putin does and optimize this need for natural gas with political
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leverage. But the nuclear utilities will take notice if this happens and will pay up to the
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Kazakh demands. If Europe is hit with a cold winter and very high electricity prices,
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this would be the ideal framework for the Kazakhs to ask for a high price for a long-
term supply of uranium.
Uranium Market Dynamics
It comes down to a few key points
Point 1 – The Utilities are not in a near-term shortage.
I know this isn’t what the Uranium universe wants to hear, but it is what it is.
Utility companies are well stocked for uranium for the rest of this year, 2022, and into
most of 2023. Global nuclear reactor demand including inventory replenishment for
the next few years is approximately 185-190 million pounds of uranium.
Below you can see a chart which shows total uranium demand in blue, along with the
amount of uranium that still needs to be contracted.
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As you can see for 2021 and 2022 there is very little uranium that needs to be fulfilled
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by a new contract. This means utilities do not need to buy large quantities of uranium
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in the spot market. Specifically, US utilities require 3.4 million pounds to meet all
their requirements in 2022 while 18.1 million pounds are needed globally to meet
2023 requirements. This coupled with the fact that utilities on average have between 2
and 3 years of supply on hand, means they are not in a major rush to sign new long-
term contracts at 35% higher prices than a month ago.
The recommendation to the boards of the utilities is “we are in no rush” and this is
just speculation. They will believe or “want to believe” that speculation is aimed at
making the utilities pay higher prices. Thus, the utilities will see the “spot” market
demand as the enemy in this situation. And they will contact all regulators and do
whatever they can, claiming “risk of electricity supply and safety”.
So don’t be shocked if you see some form of restrictions or regulations against those
deemed “speculators” by the utilities and regulators—including Sprott Uranium Trust.
I believe the utilities and their lobbyists will create the narrative that a bunch of
“Canadian Cowboys” are speculating with domestic US baseload energy security and
the utilities are victims of financial manipulation.
Point 2 – Finance Nerds vs Utility Suits:
The Sprott Uranium Trust (SPUT) is the best bid in the spot market currently, but for
how long?
This is purely a function of how much capital the trust can attract. I was impressed at
the speed and amount of capital that the trust has been able to tap so far. Could they
attract $1 billion? It’s possible and probably subject to no major market corrections
happening. Especially now that they have demonstrated how quickly prices can move
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In addition to SPUT, Yellowcake Plc. has also been an active buyer of uranium,
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purchasing over 7 million pounds this year. Yellowcake has a deal to buy its uranium
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Recall, Uranium Royalty Corp was a founding investor in Yellowcake in 2018 and
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owns about 5% of Yellowcake (and is the largest shareholder).

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Tip for SPUT: I would make a bid for Yellowcake—as you would have a much easier
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spot market. And as the largest shareholder of Uranium Royalty Corp (outside of UEC
and Amir), everything is for sale… at a price (hint, that price is a lot higher).
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Uranium Royalty Corp (UROY.NASDAQ, URC-TSXV) also has a deal to buy uranium
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from KazAtomprom at a discount to spot prices (same supply agreement as

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Yellowcake). Uranium Royalty Corp put $25M into the physical spot market at $19/lb
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at the time and currently sits on an unrealized gain of over $25/lb for a total
unrealized gain of over $35M. No other uranium company listed in North America has
such a gain because UROY was the first.
So yes, you’re reading that correctly, UROY has a WAY better deal to buy
uranium than Sprott, because UROY can always buy below the spot price. =)
This is where all KR subscribers who believed in our vision in 2018 and 2019 deserve
applause. Because of you, my dear KRO subscriber, Uranium Royalty Corp happened.
Yes, Amir and Scott were critical, but capital (and the cost of capital) was the single
biggest risk to the UROY business plan in the early days.
When I pitched Amir at my house on NYE in 2016 on the idea and walked him
through all the benefits of a royalty/stream corp for uranium over mining/exploration,
he got on the idea right away. That’s what I love about Amir, besides his incredible
work ethic and dedication to his companies, he has ZERO ego, and is capable of
understanding new financial models quickly and run with them. Not a single fund
would back us financially at that time because uranium was so out of favor. That made
us both even more bullish. Even uber-wealthy individuals, who believed in Amir and I,
thought we would fail because of the lack of capital and it was “too contrarian”.
The Rise of the KRO Alligators
I told Amir I would be a cornerstone backer—and I have been. I have not sold a single
share of UROY.
Without the KRO alligators who participated in the $1 financings in 2018 and the IPO
in 2019 ($1.50 unit with a full 5 year listed tradeable warrant at $2), Uranium Royalty
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Corp (UROY.NASDAQ, URC-TSXV) would not have had the capital to lock down the
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deals with KazAtomprom. Not to mention, purchase the best royalties in the free
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world (Cigar and McArthur—right under the noses of Cameco management team).
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That is the power of the KRO alligators.
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Once again, thank you for backing my vision and backing what I believe is the
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best management team in Uranium.

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Your profits are well deserved.

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Who can sell uranium in the spot market?

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Any company with inventory can sell into the spot market if they chose to. Which may
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sound like a lot of potential sellers, but as I’ll outline below, there really aren’t that
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Could utility companies sell their inventory?
Yes, but I struggle to see a utility company depleting their inventory in this current
spot price pop only to have to rebuy it at a later date. Not to mention the last time the
utilities tried to gang up and push the spot price lower, there were some serious cartel
allegations (Yellow Cartel). Furthermore, from a capital budgeting and risk
perspective, this type of activity would never fly for a large utility. Actions like that
would need board approval and that won’t happen in today’s world.
Groups like Cameco and KazAtomprom have been and are active in the spot market
and will be opportunistic buyers and sellers. Cameco will obviously go out of its way
too. However, as producers, they are biased and want to see higher prices. In the past,
Cameco and KazAtomprom have both closed down mines and bought uranium in the
spot market to relieve oversupply.
I speak regularly with both Canadian, American, Australian, and Kazak producers.
From my intel, I strongly believe they are not sellers in the spot market at this time
(other than Cameco), nor will they for the rest of the year.
So, who is left to sell then?
I estimate there are 63 million pounds of uranium in inventory, held by investment

funds and hedge funds aka “professionals”. There are an additional 7 million pounds
held by uranium-focused developers and producers with less than 5M lbs a year of
production, Uranium Energy Corp. being the largest of the group. In total, this equals
70 million pounds of spot market potential supply.
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I don’t see selling pressure from this group as many have just recently, over the last 6
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months purchased uranium.
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Within the “professional group” the 2 largest holders of physical uranium are the
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SPUT and Yellowcake (Uranium Royalty Corp owns about 5% of Yellowcake), then
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there are a handful of hedge funds and investment vehicles looking for pureplay
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uranium exposure that has purchased uranium from the spot market over the last 5
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years. SPUT holds 29.2 million pounds and Yellowcake holds 13.8 million pounds of
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uranium.
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I don’t believe Sprott or Yellowcake are going to sell at these price levels either. This
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removes 45 million pounds from potential spot market supply.

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This leaves 18 million pounds of potential selling pressure.

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Using a uranium price of $50 per pound represents roughly $900 million worth of
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potential selling pressure. It is safe to assume that those funds that have been sitting
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on inventory for several years and are now seeing 50-200% gains may start to take
some money off the table. Time will tell.
Below is a table that breaks it all down for you.
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By this math, if Sprott wanted to buy up all the potential “overhang” it will take at
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least $700 to $1 billion to do it. In reality, not all 18 million pounds will come to the
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market at the same time. I suspect many of the funds who own it are looking for prices
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above $75/lb uranium before they start selling. The point being, there isn’t very much
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yellowcake floating around in the system any longer.
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Pick Right and Sit Tight
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In a bull market, all stocks go up. Uranium today is no different. But the game has
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changed because of the flow of capital from the last uranium cycle.
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I’ve explained this many times, yet I am met with extreme resistance.
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The big flow of capital is in and from the United States.

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The average Canadian and American Boomer who fueled the big uranium speculative
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market last cycle (2004-2007) is no longer in the game. The next generation of
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resource speculators that play on the TSXV or junior Australian exchanges cannot
make up the difference when available capital is compared. Not to mention, the crypto
space has soaked up a lot of the “risk” capital from Gen-X and Millennials who view
mining as the stuff their parent’s lost money in years ago. It’s a cold hard truth that
the crypto space has soaked up a big portion of the capital that the junior explorers on
the TSX-V would have normally benefitted from.
The flow capital has changed drastically. Being in Canada, I can assure you that less
than 5% of the Canadian market agrees with my position.
The uranium market is going to be volatile, and I see a lot of profit-taking over the
next four months. I do think a potential cold and pricey winter for Europe could ”wake
up” the nuclear utilities. But again, no guarantees.
Liquidity and scale are major sticking points for large institutional investors.
How is a fund that manages $10 billion supposed to buy a stake in a company that
trades a few hundred thousand dollars a day in volume on a foreign exchange?
It simply doesn’t work.
Remember my whole thesis on “Big League” exchanges?
So many of the uranium exploration companies are “Old, Canadian geologists with
limited financial understanding” who don’t think they need to adapt to the financial
requirements of the modern “shareholder”.
You see, they still use the same:
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1. Mining lawyer (who only knows how to list on the Canadian or Australian
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exchange),
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2. Accountant (ditto Canada practice only),
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3. Brokerage firm (licensed in Canada)… en o
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…as they did 15 years ago, and they all happen to be Canadian. The service agents
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“Lawyers, accountants, stockbrokers and investment bankers” like the fees and broker
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warrants. Listing in the US means their gravy train is over.

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Why? A Canadian lawyer cannot do US legal work.

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Ditto for Canadian accountants. Ditto for brokers.

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And the biggest pushback from the executives is “My lawyer says a US listing is just a
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lawsuit waiting to happen”. OK, whatever.

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Here is my point.
Would the Beatles, Elvis, Michael Jackson, Madonna, Lady Gaga, or Elton John stick
to playing small dives after a hit album? HELL NO. They would play on the biggest
stages in the world.
So why is it different from investing and mining?
If you have a world-class asset, a world-class balance sheet, and a world-class

management team, why the hell would you not want to be on the biggest stage in
investing in the world: the US Stock Market (NYSE and NASDAQ)?
The Canadian management teams (and Australians) need to pick up their game if they
want to attract US flow of funds.
It’s why I demand that core holdings like Equinox, Gold Royalty Corp, Uranium
Royalty Corp, and soon Dakota Gold, Osisko, and Carbon Streaming be listed in the
US on Big League exchanges.
A US listing provides access to enormous amounts of liquidity that would otherwise

not be available.
So many “talking heads” in the mining space disagree with my comments about the
Big League claiming that only “lazy and dumb investors can’t find a way to buy
Canadian listed stocks”. That is such a false statement.
Please never forget that there is a whole “financial ecosystem” that exists charging
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high service fees to companies that are forced to use them to list on the Canadian
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stock markets.
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Only in the stock market can one take moose pasture and have the lawyers and
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accountants and stock exchange all get paid very well to absolve the company from
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any liability. Not to mention, only allow the “rich” (accredited) to play on the
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financings and let the retail investor take all risks.
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It’s madness. But I digress. I started literally with nothing financially, and it’s my
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personal mission to change this game—and together with the KRO Alligators, we are.
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Now, let me prove my point with real-time DATA.

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Again, there is this misconception you need to buy high risk to get the biggest upside
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in the mining game. Complete Nonsense.

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Below is a chart which shows the returns of the entire Canadian and US listed
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uranium stocks, plus those listed in London. Ironically, the #1, #2, and #3 performing
equities of the entire uranium space are…
1. Listed on a Big-League Exchange (NASDAQ)

2. Also, it is the lowest risk way to play commodities—a royalty and streaming
company
You guessed it—Uranium Royalty Corp. (UROY.NASDAQ, URC-TSXV).
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Absolutely a big part of the reason it’s the best performer is because of the royalty
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business model, its assets base, balance sheet, and management. And the fact that we
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cut these deals in 2018 and 2019 at the lows in the uranium market.
Not to take anything away from the Sprott crew, but before Sprott organized
themselves to take over Uranium Participation (which is now SPUT), Uranium
Royalty Corp was already up 50% on its physical purchases and the royalties were all
purchased and locked down at sub $30/lb uranium prices.
But I truly believe because Uranium Royalty Corp is listed on the NASDAQ in the US,
UROY is a liquid stock that opens up enormous new avenues for potential buyers of
stock. I also believe that SPUT will have considerable “behind the scenes” pushback
from the utilities and lobbyists that do not want to see SPUT listed on the big-league
exchange, the NYSE, and or NASDAQ. Meaning it will take more time and money to
do so. Initially, SPUT stated by year-end, I doubt it will be by the end of Q1 2022.
Uranium Royalty Corp is a highly scalable vehicle with lower mining and exploration
risk while providing leveraged pureplay exposure to the commodity. It’s a great
investment theme and can also be bought and sold by most funds all over the world.
Access to the US market is one of the most underestimated factors for resource
companies when they are decided where they want to list their shares.
Follow the Money
Since 2005, US Federal Reserve Banks have expanded their total assets by a
staggering 10x, while the US money supply has increased by over 3-fold.
What am I getting at here?
Back in 2006-2007 uranium stocks were the absolute rage and a speculator’s paradise.
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Companies with moose pasture could raise $10 or $20 million and pretend to be the
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next Cameco. It was not uncommon to see stocks appreciate hundreds of percent on
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pure speculation. There is a big difference between the 2006/2007 bull market and
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today’s market.
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The 2006-2007 was driven by the expectation of massive nuclear reactor growth
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which in turn would drive enormous amounts of uranium demand. vi
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Then Fukushima happened, which was the pinprick that popped the uranium bubble
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dream.
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In 2021 we have a market that has been beaten down for a decade combined with
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several powerhouse uranium “physical banks” which can drive up spot prices. Don’t
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let anyone fool you into thinking the uranium price move that is happening today is a
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“demand growth” story yet.

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Relative to earlier this year uranium stocks have seen an enormous amount of capital
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flow into the sector. This can be measured by “dollar volume”.
Dollar Volume=Total Shares Traded x Share Price
At the start of the year, the uranium market traded roughly $500 million dollars per
week or $100 million per day. This past week the uranium sector traded over $2
billion worth of shares or $400 million per day. This implies a 4x rise in the velocity of
trading activity.
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A then to now comparison…

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Most uranium companies that were around for the 2006-2007 bull market are now
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bankrupt or recapitalized into something entirely different.

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A small handful survived. Literally, when I met my mentors in 2003 back then there
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were less than 12 uranium explorers and producers. By mid-2007, there were over
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500 (as happens in every boom – coming to a carbon market near you).
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Greenhorn vs Green Movement
I’ll be very open and honest about the fact that I was a “greenhorn” in the 2003-2007
uranium cycle. Greenhorn, meaning I had no idea how hard advancing real assets was
in the mining game. But a big takeaway was understanding the “cost of capital” that I
keep as a core thought in every project I look at.
I will share a story that at the time hurt my ego a lot…
It was early 2006, and a well-known “guru” at the time was on an investment TV show
at the time and everyone in my office was watching the show. The interviewer asked
the guru where we are in this cycle, and I’ll never forget the words that came out of the
mouth of the guru:
“I’ll tell you where I am not. My dearest and oldest friend in the world, Doug Casey
hired a young mathematician who walks around town in cowboy boots shooting
down every deal and he is unblemished with success”
Everyone looked at me and my right-hand man at the time said, “I think he is talking
about you”.
Yes, he was. And he was right.
I was unblemished with success.
I was young, cocky, brash, and aggressive.
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Fast forward to today, and I’ve changed a lot, I’m now older, cranky, cocky, brash,
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and aggressive.
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For those that didn’t catch that, I’m basically crankier than I was back then.
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I had no idea the complexity of getting a project through to production. Never mind
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how difficult discovering and drilling out an economic deposit actually is. The Cost of
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Capital. And most importantly, how stupid so many uranium management teams were
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during the cycle with decisions regarding the cost of capital.

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But after almost 20 years in the game, you learn the little tricks of the trade and what
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to avoid. Like “private roads” in mining regions where even if a company makes a
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discovery, they have to build their own roads which makes the economics negative—
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none of the analysts bring that up in their reports. There are hundreds of these little
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axioms I have picked up over the years.

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The details matter, such as specific TC/RCs, recovery rates, cap ex, grade,
metallurgy, electricity prices, rock hardness for crushing costs, etc. Mining is a very
difficult business. Literally, every mine I’m involved in I learn of a new problem that I
have never read about before nor has management. Also, beware of the dependence on
consultants—I try to avoid consultants like the plague.
I’ll share another example of how hard mining is…
After 12 months of negotiation, I wrote the largest cheque with some other well-
known experienced geologists and mining engineers on a past-producing high-
grade gold mine. This was over a decade ago. Long story short, we believed we
could make a lot of money at $1150 gold. And on paper we were right.
The ore was so high grade, I calculated how I could direct ship to a smelter
alongside another producer. All made sense, except the Fluorine level was too
high for the smelter which was a copper smelter that also refined gold. Fluorine
was not mentioned in one of the historical exploration, development, or
production data. My plan was solid, except fluorine ruined my flow sheet. None
of the “old-timers” ever bothered assaying for fluorine and everyone was caught
off guard. It worked out well in the end, only because I was able to sell the mine,
but I can assure, fluorine is also assayed now in all deals I’m associated with!
And it was that experience of actually being involved in many mine start-ups that led
to the creation of Uranium Royalty Corp (UROY.NASDAQ, URC-TSXV), my largest
holding in the uranium sector.
I share all these stories so you don’t make the many, many mistakes I made 10-18
years ago.
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For example, there is a public uranium company that raised $25M on assets that will
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literally never go into production. I was invited into the financings – and I politely
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passed. The bankers who have not been in this game did the financing at literally the
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high of this recent market and got paid 8% cash and 8% warrants and stuffed their
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clients for 16% commission. WTF?????
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I know the largest shareholder and it happened to be his birthday a few days later I
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know him well on a personal note and when he was in a financial jam, I bailed him out
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with a financial loan (at my rates). I sent him a note congratulating him on the
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success of his raise, his birthday and ended my good wishes for him with, “P.S. Don’t
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spend any of that $ on that project, it’s a piece of shit”.

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He replied with a “Thanks. LOL, don’t worry, we won’t”.

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My point being lots of crap is being recycled. I believe in recycling. Like, recycling cans
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and plastic and paper. But not garbage exploration and resource projects. Garbage is
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garbage and needs to go to the dump.

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The bankers know it’s crap. They didn’t invest their mom, or dad, or brothers into the
deal. But they had no issues clipping 16% fees all in. Nor did the lawyers and
accountants etc.
That is the difference.
My wife, mom, dad, father-in-law, brothers, friends, and colleagues all own what I
own at the same price as me, which is the same price as you, the KRO subscriber.
ZERO fees are paid to anyone.
People will argue that buying out of the money uranium assets will show the biggest
upside—I have proven that is not true in the new paradigm in the above share price
performance chart. Maybe 15 years ago, maybe. But not anymore. I leave financing
shitty out of the money uranium projects in negative (-SWAP) Line nations to
bankers and wankers who put zero money of their own into the deal but collect crazy
finder fees.
If you are looking for the next piece of exploration moose pasture that is getting
financed, I’m not your guy for this. There are and will be even more uranium “gurus”
who have never built anything real in their resource career that will flip you a new
piece of crap every month. Not me.
The game has changed (as I showed above) and you can find lots of crap for free on
Twitter. It’s not the game I want to be associated with in any way.
I have learned the ropes the hard way, by living the markets every day and I survived
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the financial gauntlet of resource speculation and investment. I’ve learned that getting
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into permitting battles isn’t worth it, move on.
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There are many uranium companies whose stocks are up on assets that I know have
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been rejected by the government on their permit applications, and yet spin to the
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market that the management team has a new “plan”. en o
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Yikes.
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I’ve also seen where the management team isn’t at fault at all, but a new government
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moved the goalposts. Thus, creating a new reality that the management team refused
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to accept and communicate with their shareholders. Mining is a tough business.

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For a then vs now comparison I’ve selected the higher-quality names which were
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around back then and are around today. Below is a chart which compares the dollar
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volume traded today in Cameco, Denison, Energy Fuels and Uranium Energy Corp
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compared against the averages and peak volumes of 2006-2007.

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Blue lines are for 2007 and red lines are for 2006, black is the current dollar volume.
In grey is estimated dollar volume adjusted for money supply and capital markets
growth.
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Recall our earlier discussion that the growth in the money supply plays a large role in
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the market capitalization of speculative sectors. We are just reaching the peak dollar
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volume of 2007, but now there is 3 times more capital in the monetary system. So, if
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you take that into consideration, dollar volume could go higher by a factor of 3 and
still be considered “normal”.
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The takeaway? There is likely more speculative capital that can find its way into the
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uranium sector, but it will be choppy.

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– That’s great Marin, but how high can UROY go and when should I sell?
In the May 2021 KRO, I recommended taking a Katusa Free Ride above CAD$4.20 per
share.
This meant selling enough stock to recoup your initial investment. What you do now is
up to you. There is no perfect price, everyone has their own risk tolerance and capital
gain desires.
My guidance to you whenever you do decide to sell, is to sell in tranches, use limit
orders and be patient. I will not be providing a sell above price at this point,
subscribers have had ample time to take their Free Ride and now you get the fun part
of deciding how much you want to make.
To date, I have not sold a single share of UROY.
Personally, I believe that the Sprott Uranium Trust will keep chugging along and can
buy uranium in the spot market on days its share price is trading above NAV,
otherwise it would be dilutive to do so. It will continue to drive the spot price higher,
as long as SPUT can attract capital. Prices are around $40 per pound today and there
could be a spike higher to $60, 70, or maybe even $100 down the road.
Is $100 sustainable over the long run? Probably not, but these spikes higher provide
us all with ample liquidity to sell to new speculators who are entering the uranium
sector.
If you do want exposure to the moose pasture because you can’t help yourself—just
make sure you don’t put enough into any one stock that you become a resident in
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‘Hotel California’. This means you can always check in any time you like, but you can’t
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check out. Liquidity will be the trap to all these micro-craps, not microcaps.
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I think the overall sector will ultimately go higher—but the KRO is positioned in a
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perfect spot—unlimited upside exposure at no risk to the downside. The guru in 2006
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who bitch slapped me verbally on national TV would be proud, as not even he is better
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positioned than our KRO subscribers.
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I want to make something very clear also, I am not against investing/speculating in

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junior deals. I re-iterate I will continue to do so if the company has quality

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management, quality asset(s), and the catalysts that can make the deal a ‘Big League”
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listing on one of the big US exchanges. And we’re always on the hunt (and if I haven’t
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seen your deal, contact us).

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Carbon Streaming Corp Update

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I have received numerous emails about Carbon Streaming Corp and the proposed
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share consolidation. I will start by saying that I am 100% in favor of the consolidation.
It was actually my idea, thus obviously I like it!
There is no change to the company’s core business plan or strategy.
I will outline my thoughts below.
A share consolidation does not impact the value of your holdings. The number of
shares you own will be reduced, but at the same time, the share price will appreciate
so the 2 changes are offset.
Here is an example.
As you can see, the only changes are share price and total shares outstanding. The
changes offset each other so there is no impact on the market capitalization of the
company or your investment.
Question: Why is Carbon Streaming Corp doing a share consolidation when there is
no impact on company valuation?
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Answer: The company is completing a share consolidation in order to comply with
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US exchange listing requirements. It is a rule that the share price must be above $3/
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share. But more importantly, if the stock is above USD$5 per share, it qualifies in all
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brokerages (big and small) across the US.
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Thus, more capital will be allowed to buy the stock. Remember, play to the rules of
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the market in the big leagues. vi
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Many of you will rightfully state that most companies that consolidate their shares
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eventually see the share price dwindle lower. What you need to ask yourself is why the
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company consolidated its shares in the first place. What actions caused that to
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happen?
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Most of the time companies consolidate shares because they are poor performers,
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have lousy assets and bloated share structures, and are in dire need of capital.
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So, a new financier will come in and roll the back stock first to wipe out the value and
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then finance the lower-priced stock. That is the case of a rollback that needs financing.
Carbon Streaming Corp does not need financing as the company has over USD$115M
in cash and NO debt.
Not my first time doing this.
A good case study of what can happen after a successful share consolidation and US
listing is Equinox. I argued for this for 12 months, and then one day I mentioned it to
Ross over coffee stated he agreed. And Ross makes things happen.
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You can see the significant increase in outperformance of Equinox shares relative to
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its peer group ETFs once it completed its rollback.

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Furthermore, the rollback and US listing brought enormous amounts of the new
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volume.
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Don’t get me wrong, Ross, Christian, and Greg have done an exceptional job running
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the business, without them the company wouldn’t be where it is today. But without
question, and you can ask them if you like, obtaining the US listing set the stage for
greater volumes, company exposure, and ultimately more stock buyers.
I strongly believe that Carbon Streaming Corp can follow a similar successful
blueprint.
I, and you, should want a US listing as quickly as possible. Here are a few key reasons:
Reason #1: Global investor accessibility to buy and sell shares
It is incredibly difficult for investors to buy shares through the current Canadian
listing on the NEO stock exchange.
To put it in perspective, it took me and my team more than a day to get real-time
quotes and a level 2 working with my trading platform. Carbon Streaming was the
largest financing ever on the NEO exchange, and the CEO of the exchange was quick
to reply to my emails requesting live stream quotes. This is just not acceptable, and
not something one would experience in the “Big Leagues”.
Professional investors and fund managers in the US will have limited ability if any
ability at all to buy stocks on the NEO exchange. The same can be said for the “junior”
OTC exchange.
I suspect many of you with US retail brokerages at Schwab, E-Trade, or Robinhood

can’t even access the NEO exchange. This indicates yet an enormous group of
potential investors which can’t buy the stock.
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The faster it gets to the big leagues, the faster the company can attract new investors.
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Reason #2: Premium Valuation Potential & Green Bond Issuances
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Through a US listing, it is possible to significantly reduce shareholder dilution. There
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First, I suspect that by accessing the US markets, Carbon Streaming Corp should re-
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rate once compared to other ESG growing publicly listed companies. Carbon
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Streaming Corp is the first company in the world to be public with regards to
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streaming and royalties of carbon credits. It has a first-mover advantage and I do

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believe investors (both retail and institutional) will want a big piece of this. This
means that if the company needs to do another financing down the road, it would
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likely be at a higher share price than it would be if the company was stuck on the NEO
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Secondly, I do believe Justin and his team will utilize the green bond market in a big
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way. I believe they can raise far in excess of the IPO equity raise in the green bond
market. Green Bonds are just what they sound like. Debt instruments which must be
used for sustainability-focused investments. Using green bonds to finance and develop
carbon offset projects fits this mandate to a T. Green bond project debt comes with
very low-interest rates. Using debt to finance new carbon offset projects means no
more equity dilution for us as equity holders, this is a good thing.
I hope you now have a better understanding of why I support the share consolidation
and the potential positive impacts it can have for all of us down the road.
I have not sold a single share of Carbon Streaming Corp and don’t plan on selling any
time soon.
Investors who have been patiently waiting for a dip may get an opportunity when
shares from the IPO financing become unrestricted on November 21st.
Now on to the watch list and updates for companies in the KRO portfolio.
Watchlist Updates
No changes to watch list companies this month.
Here is the current watchlist table.
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Portfolio Summary
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The table below shows the current KRO portfolio and tranches purchased to date.
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Company Updates
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Carbon Streaming Corp (NEO: NETZ, OTC: OFSTF)
I estimate that Carbon Streaming Corp has $115 million in cash today with no debt.
This is a war chest that I believe it can deploy over the coming 12-36 months. A green
bond issuance in late 2022 or 2023 paves the way for minimal future equity dilution.
From my discussions with management, the potential deal pipeline is robust as ever,
and don’t see any reason to alter my financial projections for the company.
Investment Recommendation: Subscribers who have not yet built a position in the

company can look to buy 2 investment-sized tranches below CAD$1.26 (USD$1.00)
per share when the shares of the USD$1 financing become free trading in November.
Accounting for the rollback the revised price would be CAD$6.30 ($5.00) per share.
Equinox Gold (NYSE: EQX, EQX.TO)
Equinox released the results of a Pre-Feasibility Study on its underground and open-
pit expansion plans at Aurizon in Brazil. Results are excellent and continue to
demonstrate the district-sized opportunity at Aurizona. This expansion would increase
mine life to 11 years while increasing gold production via the satellite open pits and the
underground mining beneath the main pit. This adds an incremental $314 million to
the valuation of Equinox using a $1,500/oz gold price. Using a gold price of
$1,800/oz, the incremental addition is $830 million.
Investment Recommendation: For newer subscribers with no position, you can look

to buy your first two tranches of shares of Equinox under USD$6.75 per share on
NYSE (under CAD$8.50 on TSX). We published a deep dive on Equinox in the July
2021 KRO.
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Gold Royalty Corp (NYSE: GROY)
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The portfolio is long 4 tranches of stock. I believe that Gold Royalty Corp has set itself
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up for long-term success with the acquisition of Abitibi Royalties and its Odyssey
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royalty. Please see my interview with company CEO David Garofalo here if you haven’t
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watched it yet.
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Investment Recommendation: Buy up to 4 tranches of GROY at or below $5.25 per

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share. HOLD if you own.

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JR Resources / Dakota Gold (OTC: DTRC)

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No project-related updates this month.

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For those emailing KR customer service asking about their shares, here’s a response
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from the company:

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The subscribers who have received DRS for their shares have received them in
respect of the recent financing into Dakota Territory in July-August 2021.
DRS or certificates for the JR financing last year have not been issued. In terms of
process and timing for receiving the JR securities, please note that JR holds its
securities in electronic book entry form, so you will not be receiving any certificates
or DRS from JR, however, as I describe below you will ultimately receive free
trading electronic securities of the company that results from JR’s merger with
DTRC.
The merger will be completed following the SEC’s review and approval of the
Registration Statement on Form S-4 that JR and DTRC are preparing in connectio
with the merger.
On the closing of the merger, you will receive electronic confirmations from the
merged company’s transfer agent, Odyssey Trust, and Odyssey will facilitate share
transfers and warrant transfers.
For any issues relating to your certificates for JR Resources/Dakota Gold, please
contact Daniel Cherniak DCherniak@gold-sd.com or phone 604-365-1097.
Investment Recommendation: New subscribers can look to buy their first tranche

under USD$4.50 per share under the US symbol DTRC.
The company management is finalizing the sale from the $1 JR

financings. Also, Bob Quartermain and I will have an interview for the
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Nov KRO—as this issue was already too long.
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Osisko Development (ODV.V)
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No Company updates this month.
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Important: For shareholders that need to reach out regarding Osisko Development
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shares, DRS or other items, please do not contact Katusa Research. You can reach out
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to:
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Jean-Francois Lemonde (VP, Investor Relations) at jflemonde@osiskodev.com –

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Tel: 1-514-940-0685
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Investment Recommendation: New subscribers can look to buy two investment-sized

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tranches near current price levels (under CAD$5.50). The portfolio is long 2 tranches
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from CAD$7.50 per share. Subscribers who already own 2 tranches can hold their
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current position.
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Liberty Gold (TSX: LGD.TO, OTC: LGDTF)
No Company Updates this month.
Investment Recommendation: Current position in the portfolio is a Katusa Free

Ride. New subscribers do not need to build a position at this time.
Fury Gold (TSX: FURY.TO)
Fury is completing a $5 million financing. Proceeds from the offering will go to

exploration work at its flagship Eau Claire asset.
Investment Recommendation: Current position in the portfolio is a Katusa Free

Ride. Hold positions in Fury Gold and Sombrero / Tier One spinout shares if you
received them. New subscribers do not need to build a position at this time.
Brookfield Renewable Partners (TSX: BEP.UN, NYSE: BEP)
As I outlined earlier, the world is committing in a big way to decarbonization.

Brookfield possesses the scale, expertise, and balance sheet to play a major role in the
transition. I continue to wait for a major pullback to rebuild the position.
Investment Recommendation: The current position in the portfolio is a Katusa Free

Ride. Look to buy your first investment-sized tranche below USD$30 (CAD$41.60).
mCloud Technologies (TSXV: MCLD.DB)—the debenture
No company updates this month.
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Investment Recommendation: The current debenture position in the portfolio is
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a Katusa Free Ride. New subscribers do not need to build a position at this time.
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Uranium Company Updates
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As I mentioned above, the uranium markets are being driven by the Sprott Physical
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Uranium Trust. We are in the driver’s seat with 2 risk-free positions.

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Both positions are Katusa Free Rides, at this point everyone’s initial capital should
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have been taken off the table. Each subscriber’s risk tolerance and wealth goals are
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different, so there is no additional sell guidance. Be tactful with any additional money
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you want to take off the table. Be an alligator and sell on days of major strength, rather
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than weakness.
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Uranium Energy Corp (NYSE: UEC)

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Investment Recommendation: The position is now a Katusa Free Ride. New

subscribers do not need to build a position at this time.
Uranium Royalty Corp (NASDAQ: UROY, TSXV: URC)
Investment Recommendation: The position has been a Katusa Free Ride. Hold the

remaining position for years to come. New subscribers do not need to build a position
at this time.
KRO Portfolio Summary Table
Regards,
Marin
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P.S. For new subscribers, please follow our email whitelist instructions and mark
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emails from Katusa Research as safe to ensure our emails reach your inbox.
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Details and Disclosures
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Marin Katusa, Katusa Research Inc. (“Katusa Research”), New Era Publishing Inc. (“New Era”) and/or the other principals, partners,
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directors, and officers of Katusa Research or New Era (the “Katusa Research Team”) own securities positions in, and are long on, the
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following companies mentioned above: UEC, EQX, LGD, MCLD, FURY, URC, BEP, BEPC, BTO, ARTG, DTRC, LUM, NETZ, WCP, GROY,
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ODV
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Additionally, members of the Katusa Research Team currently intend to acquire securities in the following companies mentioned above: MP,
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BEP, WCP, NEP

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No members of the Katusa Research Team have received any commission or other compensation to feature any company mentioned in this
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newsletter nor are they party to any financial arrangement regarding the securities of such companies or any person who has any interest in
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such securities. The information contained in this publication is not intended and does not constitute individual investment advice and is
not designed to meet your personal financial or investment situation or needs.
Neither Marin Katusa nor Katusa Research is registered broker-dealers or financial advisors. Never make an investment based solely on
what you read in an online newsletter, including this newsletter, especially if the investment involves a small, thinly-traded company that is
not well known. Past performance is not indicative of future results. You should independently investigate and fully understand all risks
before investing. When investing in speculative stocks, it is possible to lose your entire investment. Information contained in such
publications is obtained from public sources believed to be reliable, but its accuracy cannot be guaranteed.
Further, the views expressed herein are of Katusa Research as of the date hereof, are subject to change and the Katusa Research Team does
not undertake any obligation to update such information or views. None of the members of the Katusa Research Team shall be liable for any
damages, losses, or costs of any kind or type arising out of or in any way connected with the use of this newsletter. The information in this
publication reflects the current opinion of the publisher, is subject to change, and may become outdated. The publisher undertakes no
obligation to update any such information.
Unauthorized Disclosure Prohibited. The information provided in this publication is private, privileged, and confidential information,
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of the publication or any release of specific investment recommendations, is strictly prohibited.
Click the link to review the full terms and conditions.
Copyright © 2021 Katusa Research. All rights reserved.
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6/10/21 15:19 World War Zero |

World War Zero

In this month’s action-packed double-length issue of the KRO, we will go in-depth on

4. The Future of the Carbon Market vi

5. 3 Credit Benchmarks: Blue, Green, and White Carbon

6. Ringside Seats at the Uranium Battle Royale

7. Uranium Market Dynamics

8. Following the Money

9. Carbon Streaming Rollback Update

10. KRO Watchlist and Portfolio Summary

11. Company Updates

So, let’s get right into it…

Monday, November 1, 2021, is an important date.

on the COP26 in Glasgow hosted by the UK at the end of this month.

population of mammals, birds, fishes, reptiles, and amphibians.

is 300% higher than last decade.

1 in 50-year climate events occurrence will increase 38.9 fold.

The Insurance Greenaissance

the biggest insurance companies in the world have taken note.

The UK government is the host of COP26 in Scotland.

may not qualify for insurance coverage.

did not have insurance coverage?

a NET ZERO movement.

It all comes down to the cost of capital.

18 months. The corporations have committed with their balance sheets.

here to present a very strong investment proposition, backed by a strong narrative,

that has the potential to make us a lot of money.

I’m not here to change your views on climate.

be applied to training and providing state-of-the-art technology and equipment to the

Let me take a step back and give you some background…

In the resource sector, the foreign companies (mostly Canadian, American, or

Corporations do try to implement training programs, but to be a geologist or

and biodiversity thrive. vi

they will soon enough.

raging—literally ash was falling on us).

Carbon Rangers will be part of the solution.

towards funding the ‘Carbon Rangers’ and “do it right”.

And there is almost $90 Trillion committed to only investing in projects/companies

up to make a difference mostly summarised in this 3,949 page report

So, could COP26 be an improvement or is this setting up for another

What has been agreed on?

What’s left to finalize?

Here’s what’s coming…

credit against their emission level. vi

nationally determined contributions. It would essentially prohibit any international

been international companies with global carbon footprints.

Under the Gold Standard model (Option 2)…

The past 12 months have represented a once-in-a-generation opportunity and I still

But make no mistake, you as a KRO subscriber who is a shareholder

of Carbon Streaming Corp have helped incubate, create and design

the framework for the carbon market.

Pre-internet revolution, access to information and deals meant a big potential

I have seen of my lifetime.

When an investor is this early to an investment theme it can be challenging sometimes

(NOTE: If you are interested in getting on the waitlist for a Chairman

Membership, you can put your name down here).

Carbon From 30,000 Feet

Futures contracts provide deep liquidity and price transparency with

relationship-driven rather than companies logging into a platform to transact like

The carbon market will evolve to a place where

1. A company can build its capital budget for the year,

footprint by 1 metric tonne it will cost you a little over $7 today.

“Dad, do you want red or white wine”.

3 Carbon Credit Benchmarks: Blue Carbon, Green Carbon, and White