The IKN Weekly

Week 712, January 8th 2023

Contents
This Week: Trade heads-up, In Today’s Edition, Wall St continues to ignore gold bullion, The
Fed before and after the Friday jobs report.
Fundamental Analysis: Arizona Sonoran (ASCU.v), Osisko Development (ODV.to) and how a
staged approached to mine development is supposed to work.

Stocks to Follow: Newcore Gold (NCAU.v), Minera Alamos (MAI.v), Rio2 Ltd (RIO.v), Minera
IRL (MIRL.cse), Amerigo Resources (ARG.to), Contango Ore (CTGO).

Copper Basket: Overview, Element 29 (ECU.v), Faraday Copper (FDY.to), Libero Copper
(LBC.v), Regulus Resources (REG.v).

Producer Basket: Overview, Wesdome Gold (WDO.to) (WDOFF), B2Gold (BTG).

TinyCaps Basket: Overview, Nine Mile Metals (NINE.cse), District Metals (DMX.v).

Regional Politics: Brazil: The country of the future*, Ecuador: Government vs CONAIE over
mining, Mexico: The Fortuna permit issue reappears, Chile’s royalty law passes committee.
Market Watching: A reminder on Orezone (ORE.to).

I remind subscribers that no part of this newsletter can be copied, reproduced or

given to any third party without the express permission of the author.

This Week
Trade heads-up
In the days to come, I am looking to add to my position in Newcore Gold (NCAU.v) and skate to
where the puck is going to be later this month. It’s still not a massive holding, but this planned
small near-term trade is getting bigger than I expected it would.

In Today’s Edition
 We started the year with a strong week at market for mining stocks, GDX up over 10%
and plenty of big winners as the happy combo of a weaker dollar, springing metals
prices due to overseas demand and the classic rebound in Canadian mining stocks after
the Tax Loss Selling season is over. I’ll be happy if it continues but let’s not count too
many chickens before hatched, too many first weeks show this type of action, only to
see prices retraced by the end of the month.
 We got a particularly strong move from copper on Friday, with Chinese macro news and
the continued tight supply beating out any and all thoughts of a recession scenario.
This desk has been calling stagflation as the most likely model for months on end, Dr.
Copper is pointing that way now.
 Our main fundies section is a departure from the norm, as we look at two recent
projects to consider when a staged approach to mine development is valid and
attractive to shareholders, and when it’s a mere marketing ploy to cover up weak
project economics. That’s ASCU vs ODV and the winner is clear.
Wall St continues to ignore gold bullion
Our regular GLD tracking charts are normally a sideshow event or follow-up thought in the intro
sections, but this week they get upped to the main event. I don’t mind admitting, the current

1
 levels of gold inventory at GLD, the world’s biggest bullion ETF (also one of the top 20 ETFs and
arguably the largest of all non-index tracker ETFs), has me scratching my head. Here’s the last
six months of the gold price and while gold took until November to decide on its new course
and become a positive alternative to the USD once the limits of the Fed’s rates rising became
apparent…

…since its low point on November 3rd of U$1,617/oz, gold has run and added just over 15% to
its dollar price in just over two months. That’s good, it makes sense under current economic
circumstances and is indicative of exactly the type of stagflation scenario this desk has
pronounced upon since for the last three quarters or so. Which is the cure for our regular GLD
tracking charts, with holding in metric tonnes on the left and our sentiment gauge, i.e. the
inventory/price ratio, on the right:
mt GLD gold holdings, last six months (metric tonnes) 6.50 GLD: Inventory/Price Ratio, last six months
1100 6.40
1080 6.30
1060 6.20
6.10
1040 6.00
1020 5.90
1000 5.80
980 5.70
5.60
960 5.50
940 5.40
920 5.30
5.20
900 5.10 Source: SPDR data, IKN calcs
880 source: SPDR GLD data 5.00
860
2022/6/1
2022/6/11
2022/6/21
2022/7/1
2022/7/11
2022/7/21
2022/7/31
2022/8/10
2022/8/20
2022/8/30
2022/9/9
2022/9/19
2022/9/29
2022/10/9
2022/10/19
2022/10/29
2022/11/8
2022/11/18
2022/11/28
2022/12/8
2022/12/18
2022/12/28
1/6/22
11/6/22
21/6/22
1/7/22
11/7/22
21/7/22
31/7/22
10/8/22
20/8/22
30/8/22
9/9/22
19/9/22
29/9/22
9/10/22
19/10/22
29/10/22
8/11/22
18/11/22
28/11/22
8/12/22
18/12/22
28/12/22

Considering the holdings chart first, we run the same six month period as seen above and note
mid-July 2022 as the last recent peak in GLD inventory holdings, at 1075.54 metric tonnes (mt).
Holdings then dropped through 3q22 and that’s not so surprising, considering the price action in
gold and the prevailing Plain Vanilla Recession narrative we had at the time. The GLD inventory
low point came just after the price low and a mid-November reading 904.62mt, but there has
been scant recovery in inventory levels since then, certainly when compared to the price
rebound. As at this weekend, GLD holdings are up to 916.77mt which is 1.3% up from their
lows. In other words:
 Gold price improvement, November low to date: 15.4%
 GLD inventory improvement, November
low to date: 1.3% 8.20 GLD: Inventory/Price Ratio, 2016 to date
8.00
7.80
That shows clearly on our Inventory/Price Ratio 7.60
7.40
chart which is plumbing new lows this weekend at 7.20
7.00
5.28X, the lowest it has been since this desk 6.80
6.60
started tracking the data in 2016. What’s more, 6.40
6.20
6.00
2 5.80
5.60 Source: SPDR data, IKN calcs
5.40
5.20
5.00
1/4/16
3/16/16
5/26/16
8/8/16
10/18/16
12/29/16
3/14/17
5/24/17
8/4/17
10/16/17
12/27/17
3/12/18
5/22/18
8/2/18
10/12/18
12/24/18
3/8/19
5/20/19
7/31/19
10/10/19
12/20/19
3/5/20
5/15/20
7/28/20
10/7/20
12/17/20
3/3/21
5/11/21
7/22/21
10/1/21
12/13/21
2/24/22
5/6/22
7/20/22
9/29/22
12/9/22
this latest plunge has taken the ratio well below what we’ve traditionally considered as the
sentiment “washout level” of 6X. Until 2021, a dip under the 6.0X level was rare and temporary,
then in 2021 as the wash of money from the Covid-19 took control, gold got out of fashion.
Sentiment remained very poor until around mid-2022 when we finally saw it crawl above the 6
line for a few months, but the last few weeks have seen a very sharp reversal.

Put simply, gold has rallied without the help of the people who normally pile into GLD when
gold goes back into fashion (and GLD is not an anomaly either, as this is also true for the
second largest bullion ETF, Blackrock’s IAU, which reports bullion holdings down 6.01% since
end 3q22). The normal large buyers of GLD are the big Wall St instos, who use its flexibility and
ease of trading compared to the traditional futures markets and eventual physical deliveries to
their advantage and the way GLD has become one of the 20 largest ETFs by asset value in the
world is testimony to its popularity.

Put simply, gold has rallied in the last two months without the aid of the biggest of the big
money players climbing on board. As a result, our normal Sentiment Tracker ratio hasn’t just
remained in the dumpster, it’s plumbed lows never seen before and in another market, you’d
wonder whether it was because the market was turning against the mining sector and/or
precious metals once and for all. However, that’s clearly not the case:

I don’t mind being accused of cherry-picking timescales in this case, we’re going with the same
November 3rd date on which gold made that intraday low of U$1,617/oz. Since then GLD is up
15% and has acted as the AntiDollar in fine style, all while the mining stocks have rallied by as
much as 40% as the worst threats of inflation toward the sector have blown over. Which brings
me to my only point of today’s intro, consider the above mere scene-setting:
Once Wall St starts buying back its gold, bullion will go a lot higher.
And that’s all I want to say. I don’t know exactly why the usual suspects of deep pocketed
instos haven’t returned to the metal as yet. Perhaps they are too busy deploying into the
mining companies, perhaps Risk On is still the trade and gold hasn’t been discussed much,
perhaps it’s simply bad timing and the Holiday period saw little in the way of strategy meetings.
We do know, however that the world’s Central Banks have been taking up the slack on bullion
purchases; as reported back in IKN704, to end 3q22 CBs had added almost 400mt of gold to
their vaults. We also got Mark Bristow telling us about “what he’d heard” about large scale
bullion purchases in China last week, something that’s bound to repeat when a whole bunch of
industry bigwigs, along with the usual flock of hangers-on, sit down at the 2nd “Future Minerals
Forum”, taking place next week in Riyadh, Saudi Arabia.

The Fed before and after the Friday jobs report

The Kabuki Theatre of Fed talking heads was on full display last week, trying to manage
expectations. FedHead Jay Powell kept out of the line of fire, leaving the job to lieutenants such
as James Bullard who, after making prepared comments to a conference on Thursday, made
more interesting “off the cuff” comments to the assembled press corps (1):
(Reuters) -St. Louis Federal Reserve leader James Bullard expressed optimism on
3
 Thursday that the new year could finally bring relief from inflation, adding the risk of a
U.S. recession has fallen in recent weeks.
"The probability of a soft landing has increased compared to where it was in the fall of
2022, where it was looking more questionable…and the reason I think that the
prospects for a soft landing have increased is that the labor market has not weakened
the way many had predicted and growth levels rebounded from weakness.”
"The labor market can remain fairly resilient during 2023….fight inflation now, get it
under control, get it back to 2% while you've got the resilient labor market.”

That was Thursday, the day before the US BLS dropped its December Jobs Report. On Friday
that came in with strong headline numbers and here’s how CNBC presented its bullet points (2):
 Nonfarm payrolls increased by 223,000 for the month, above the Dow Jones estimate
for 200,000.
 The unemployment rate fell to 3.5%, a decline of 0.2 percentage point and also better
than the estimate.
 Wage growth was below expectations, with average hourly earnings up 4.6% from a
year ago, below the 5% estimate.
 Leisure and hospitality led job gains, followed by health care, construction and social
assistance.

The market liked those numbers, all very

Goldilocks and enough to suggest exactly the
type of Soft Landing that Mr. Bullard proposed
the day before. The result was a rallying market
and a weaker USD as the market factored in a
peak in rates sooner, rather than later. It’s not
difficult to pot the moment in the chart (right)
when the BLS report dropped.

So after the Friday jobs report, sure enough the

Fed wheeled out another talking suit to try and
jawbone the market back down (3):
Atlanta Federal Reserve President Raphael Bostic said Friday that December’s jobs
report, with its slowdown in wage increases and better-than-expected employment
growth, doesn’t change his view on monetary policy.

If we’ve said it once we’ve said it a dozen times, the last thing Jay Powell needs in a supply
restricted economy is a populace that starts to feel wealthy. That means they’re going to use
the “We’re really really REALLY not joking, people” when it comes to rates rises in 2023, no
matter whether the eventual active policy sees them slow the rate rises to a crawl. Here are a
few soundbites from Mr. Bostic on Friday as he tried to scare the market into selling things:
“We’ve got to stay the course,” he said. “Inflation is too high. We need to reduce those
imbalances so it moves more rapidly to our 2% [inflation] target.”
Bostic emphasized the Fed can’t “claim victory prematurely” and needs not only to
keep pushing rates higher, but to keep them there.
Bostic said he does not expect a recession to follow the Fed’s actions, and if there is
one he sees it as “short and shallow.”

There was nothing new in Bostic’s words, nothing at all. Instead, the market took the
benevolent jobs numbers at face value, bid up anything that wasn’t a US Dollar and shifted its
focus to the week to come as arguably these days, the US CPI figure is more important than
the normal #1 data, that of employment. The CPI reading for December is set for release on
the morning of Thursday, January 12th and according to the ever-reliable Calculated Risk (4),
here’s the current consensus:
8:30 AM: The Consumer Price Index for December from the BLS. The consensus is for
0,1% increase in CPI, and a 0.3% increase in core CPI. The consensus is for CPI to
be up 6.5% year-over-year and core CPI to be up 5.7% YoY.

4
If that comes to pass it will add the column you see on the right to this table (and please note
the cut down Y axis). At the moment, the market seems to be pricing in just a quarter point
raise for the next Fed FOMC (statement due Feb 1st) so if CPI comes in higher than the current
6.5%, it would give the Fed hawks more grist for their mill. However and the reason why our
table goes back to November 2021, any reading under 7.0% on Thursday (highly likely) will
mean we have the first Year-Over-Year negative reading for inflation and with the sharp hike
months in the near future, the cycle will see annual cumulative inflation start to drop sharply.
10 US Consumer Price Inflation (CPI)
9.5
9
8.5
8
7.5

6.5
7

9.1
6.5

8.6
8.5

8.5
8.3

8.3

8.2
7.9
6

7.7
7.5

7.1
6.8

5.5
7

5
4.5
4
nov

nov
jan'22

feb

oct'22
mar

apr

dec (est)
jun

aug

sep
jul
dec

may
source: U.S. BLS, calculated risk forecast for Dec'22

For that alone, as long as there are no surprises next week it will be time to start openly
ridiculing the Bostic position and running with the market assumption that the Fed will stop
hiking sooner, rather than later. And that, ladies and gents, would be good for the price of gold.

Fundamental Analysis of Mining Stocks

Arizona Sonoran (ASCU.v), Osisko Development (ODV.to) and how a staged
approached to mine development is supposed to work
That long header was my working title for this note as from Thursday and as I couldn’t think of
anything snappier or better between then and tonight Sunday, it gets to stay as the title of the
finished note. It was generally quiet week for posts on the open IKN blog, what with trying to
ease my way into the new year and also enjoy the sector rally without disturbing it much, but
along the way I did publish one note with something reasonably valid to say about the financial
side of mining.

On Tuesday January 3rd Osisko Development Corp (ODV.to) announced the completion of the
Feasibility Study (FS) for its Cariboo project (5) and after a good read of the NR, I had my dos
centavos’ worth on the blog later that day (6). My issue isn’t with the overall plan, though an
IRR of 20.7% over a 12 year mine life using U$1,700/oz gold doesn’t exactly make Cariboo into
a top tier standout project, either. Instead, my issue was the way ODV has tried to mask the
true capex cost of the mine by creating a false-looking “Phase 1” for the mine and in doing so,
claiming it can get its operation up and running for a headline C$137.3m. In the words of
Chair/CEOI Sean Roosen (IKN bold types):
“This feasibility study demonstrates that the Cariboo Gold Project will be a large-scale,
long-life and profitable gold mine. It will also produce significant quantities of gold
in its initial years at a capital cost below $140 million. By phasing construction,
we have minimized our exposure to development risk at Cariboo, optimized the
sequencing of the assets in our portfolio and maximized our ability to scale Cariboo to
reach its full potential in the future.”

This statement is disingenuous at best, that’s as generous as anyone can be about this exercise
in capex sequin throwing (and quite frankly, I see no reason why we should give a seasoned
mining executive such as Roosen any benefit of the doubt). This table from the Tuesday NR,
also used on the blog post, highlights the basic reasons why:

5
It wouldn’t have been difficult to poke holes in other areas of the FS proposal either, what with
a thin-looking average grade of 3.72 g/t Au proposed for the main Phase 2 underground mining
operation that also relies on ore-sorting to improve mill process head grade. However, the point
to make was about the capex, as the C$137.3m used in the marketing spiel is only the tip of
the iceberg:
 As Phase 1 only lasts three years, there’s scant difference between “initial” and
“sustaining” capital. This alone adds C$134.2m to the bill to start Cariboo.
 Then there’s the detail highlighted under the table, as “pre-permit expenses” of a cool
C$64.8m need to be added to the bill.
 Finally, we note that the planned Phase 1 operation is set to produce a little over
205,000 oz at an AISC that almost matches the baseline gold price of ODV’s economic
model (U$1,700/oz). As such, there will be very little in the way of cash flow to fund
the next stage of the Cariboo build-out, pegged at C$451.1m by the FS.
All in all it’s fair to assume ODV will need to raise (137.3m + 134.2m + 64.8m + around
C$300m of the 451m for Phase 2) around C$636m to get this mine to full working rhythm and
that’s my main beef with its presentation last week. It’s not it will/will not have a long-lasting
operation that “goes on for decades” once further exploration adds extra reserves to the asset,
it’s that there’s no way the first C$137.3m raised will be enough capex to cover its build-out to
full production. Anyone who falls for the line being offered by ODV and thinks the company will
only need C$137m (via raising or current treasury) will be in for a ruse awakening when ODV
goes to market to fund Phase 1 capex, then inevitably Phase 1 sustaining capex, then most of
Phase 2 expansion capex. There’s no bootstrapping or reason to call that first period a “Phase
1” at all, it’s merely a staging post over a long, four year period when Cariboo is set to be a net
drain on treasury.
6
Arizona Sonoran (ASCU.v) is how a “Phase 1” is supposed to be
Which brings me to the point I really want to make in this week’s Funides section. To quote
myself, the “exercise in mathematical sequin throwing” offered by ODV on Tuesday hit this desk
with particular resonance, as I recently reviewed a different project that also proposes to stage
its development. However and unlike ODV, the new Copper Basket component Arizona Sonoran
(ASCU.v) has gone about its plan in the right way and is offering the prospective or actual
shareholder a genuine “low capex hurdle” for its plans at its flagship Cactus project, near
Tucson USA and while the plan is still to watch and observe the development at ASCU before
making any active trade decision in 2023, there’s no reason why we cannot shine light on one
of its obvious advantages today.

Today’s is not a full-scale anal ysis of ASCU at Cactus and by necessity, we gloss over some of
the basic parameters of the project, though I am sure many of you are already cognizant of its
plans and how the project is set-up to work. For our purposes today, we use the information
and mine plan as contained in the 43-101 compliant technical report and PEA as published by
ASCU in November 2022 (the document that piqued my interest in the company). That means
we’re not taking into the consideration the likely resource expansion at Cactus, the potential for
Rio Tinto’s Nuton technology on its primary sulphides and other potential forms of upside to the
current economic plan. Instead we go with what we have, which are fresh and reasonably
conservative parameters on the three stages of production planned for the mine re-start.
 (As many readers will know) Cactus is a past producing mine. The historic workings at
Cactus saw the old operator stockpile any mineralization that graded under 0.3% Cu
and after a decade of operation (by ASARCO) between 1974 and 1984, that has left a
significant low grade stockpile on site. This means ASCU today has a large quantity of
material at hand, with which it will be able to kick start its mine operations. ASCU
estimates the stockpile grade average at 0.14% Cu.
 The second source of mineral feed at Cactus is the old pit (with its own small lake at
the bottom), as once the mine is rehabbed it will offer at least a decade of production
under the current plan. ASCU estimates the open pit grade average at 0.26% Cu.
 Finally, the nearby Parks/Salyer deposit, part of the same mine complex at Cactus, is
planned as the supply of high grade underground mine feed once the operation is
mature. This underground deposit grade average is estimated at 1.27% Cu.
The plan is therefore the most logical one can imagine, to take advantage of the feed sources
available. This table highlights the way in which ASCU will start ops by concentrating efforts on
the stockpile material at hand. By year five of operations, the stockpile will be depleting and at
that point, the mine will rely on mineral feed from the open pit. That will continue through year
13 but in the meantime, as from year 5 (and reaching full production by year 7), ASCU expects
a significant portion of its production to come from the higher grading underground
mineralization, i.e. Parks/Salyer once tunnels and stopes are developed.
ASCU at Cactus: mineral production per year
mmt (in millons of metric tonnes)
24
22
20
18 UG
16 open pit
14 stockpile
12
10
8
6
4
2
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
source: ASCU 43-101 technical report, IKN calcs

The ASCU mine plan aims to provide a regular level of copper production that revolves around
50m lbs copper per year for the first seven years, then output increases by around 50% in the

7
years that open pit and underground mining overlap the most. Finally, as the mine matures and
the open pit feed is mined out, the final stage sees underground-only feed and a return to the
50m lbs level until the end of mine life.
ASCU at Cactus: projected copper production, per annum
(in Mlbs copper)
100
90
80
M lbs copper

70
60
50

80.09
78.77
73.25

72.66

71.63
71.09
40

17.33
57.80

58.25
53.91

53.61
52.12

51.10
49.32

49.20
48.57
48.32
30
28.77

20

1.70

0.00
10
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
source: ASCU 43-101 technical report, IKN calcs

In other words, there are three natural stages to this mine plan:
 Pre-production, in which ASCU spends capex to prepare and then run the
stockpile material
 Production years 1 to 5, in which capex is to prepare and run the open pit
material
 Production years 6 onward, in which capex is to prepare and run the
underground ops
U$m ASCU at Cactus: Three capex phases
Clearly there are no firm boundaries to these 220
phases and with open pit production starting on a 200 180
small scale as from year one, or UG mining in year 160
5, there will be plenty of overlap to our three 140
120

199.1
natural phases but, in loose terms, ASCU at Cactus 100

183.7
does have a Phase 1, 2 and 3 as its mine plan. 80
107.3

60
However and unlike ODV above, as we are about to 40
see this plan is indeed self-funding form an early 20
0
stage and should mean its low entry capex hurdle is
pre-prod years 1-5 year 6 onward
a genuine number. This simplified chart (right) source: ASCU 43-101 technical report, IKN calcs
shows the total capex expected for the three main
phases of production at Cactus, according to the November 2022 43-101.

To get out of pre-production, ASCU will need U$107.3m, then on its heels comes the spend
required for (mostly) the rehab of the main open pit, earmarked at U$199.1m, after which the
company shifts its focus and (mainly) spends the last U$183.7m tranche of development cash
on the underground project. This second chart (below) gives an annual breakdown of the same
capex estimates, starting at year -2 and finishing at residual production years 18 and 19.
However in this second chart, we also add the expected pre-tax income for each year,
according to the 43-101 and using the ASCU baseline copper price of U$3.35/lb (this desk
approves of that conservative price assumption):
U$m ASCU at Cactus: Capex vs Pre-tax income
160 capex
140 pre-tax income
120
100
80
60
40
20
0
-2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
source: company filings

8
The key element here, the one that separates ASCU’s staged mine development process from
that of ODV at Cariboo (just as one example) is the amount of cash generated out the gate by
the operation. There’s capital investment to be made in the pre-production years but at
U$3.35/lb copper, ASCU at Cactus is expected to be slightly better than breakeven as early as
year one and by year two, earnings will outstrip capital spend by an impressive margin.

We can cut and slice that same information in a different way, in the following charts that show
how long it takes to re-pay capex. Over the course of the 22 planned years (three pre-prod, 19
producing) ASCU at Cactus pays back in less than three years.
U$m ASCU at Cactus: pre-tax cash flow over LoM
1400
1300
1200
1100
1000
900
800
700
600
500
400
300
200
100
0
-100
-200
-2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
source: ASCU 43-101 technical report

This second chart uses the same data, but focuses on the early years to production year seven.
U$m ASCU at Cactus: pre-tax cash flow, first 10 years
250
225 220.6
200 190.4
175 164.7
150
125
100 105.1
75
50
25 25.7
0
-25 -15.7 -29.0 -22.4
-50
-75 -107.3
-100 -101.3
-125
-2 -1 0 1 2 3 4 5 6 7
source: ASCU 43-101 technical report

As you can see, the lowest point on this annual

chart is year zero at -107.3m and while ASCU will
probably need some more liquidity during year one
before getting the needle back to breakeven, the
our spreadsheet estimates tally closely to the “Key
Project Metrics” offered by ASCU in its latest
corporate presentation (on slide 9).

Returning to the ASCU revenues model, if we use

the company’s U$3.35/lb baseline price as per the
43-101, we see the strong relationship between
gross revenues and pre-tax income in this chart:

U$m ASCU at Cactus: Annual gross sales and pre-tax income at U$3.35/lb Cu
300
Gross sales at U$3.35/lb Cu
250 pre-tax income at $3.35/lb Cu

200
268.3

150
263.9
245.4

243.4

239.9

238.1
193.6

195.1
180.6

179.6
174.6

171.2

100
165.2

162.7

164.8
161.9

140.5
130.2
123.1
118.6

117.0
108.7

106.8
105.4

106.2

105.0

98.7
96.4

93.7
89.0

85.9

81.0

80.7

50
58.1
55.9

39.0

9
5.7
5.5

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
source: company filings, IKN ests and calcs
As for sensitivities to copper, this is another strong point in the ASCU model. This chart isn’t the
easiest to read, but by plugging in different copper prices from a low-end U$3.00/lb to as
bullish U$4.50/lb average, we see the change in average top line revenues:
U$m ASCU at Cactus: Gross metal income at various Cu prices, per annum

380 U$3.00
360
340 U$3.35
320 U$3.70
300 U$4.00
280 U$4.50
260
240
220
200
180
160
140
120
100
80
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
source: ASCU data, IKN calcs

For a more straightforward model, this chart shows the amounts added per annum if the
average copper price moves from the ASCU baseline U$3.35/lb to U$4.00/lb (which is starting
to look a likely price again in 2023).
ASCU at Cactus: Gross sales per annum at U$3.35/lb and
U$m U$4.00/lb copper
350 At U$4.00/lb copper
300 At U$3.35/lb copper
52
51
48
47
47
46

250
38
38
35

35
34

200

33
32

32
32
31

150
19

100

11
50

1
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
source: ASCU data, IKN calcs

At U$4.00/lb copper, all capex at Cactus would be recovered by year two and the capex
required from years one to five would be earned just by the extra market price for copper.

Conclusion
There are several obvious differences between ODV at Cariboo and ASCU at Cactus and we can
start with a couple of the most basic, that ODV has a feas study on a gold project while ASCU is
at PEA stage on a copper project. Ultimately there are no apples-to-apples comparatives on any
mine or mine project and at some point, they all need to be considered on a standalone basis
and the real reason for today’s note is the close coincidence of ODV’s Fake Phase One
proposition for Cariboo, compared to the true and economically valid plan being developed by
ASCU at Cactus. Put simply, an “initial capex” of under $140m means nothing at all if that cash
will need supplementing, and almost immediately, by at least two and perhaps three extra
rounds of capital raising before the total costs of the project are sunk into the assets.

Today’s analysis isn’t a recommendation for ASCU shares, either. For my money, its current
C$2.00-or-abouts share price may be slightly low and the stock has every chance of running
back to the C$2.40 levels, but there is a lid on the share price until either 1) the project gets
bigger via exploration success (or RTZ showing Nuton works well on its rocks), or 2) the project
advances closer to a construction decision and de-risks accordingly. It all depends on what
copper price input you use, of course, but at the U$3.35/lb ASCU baseline and our modelled
pre-tax earnings of around U$1.2Bn over approximately 20 years, a modest 5% discount price
gives a P/NPV of around 0.3X. It could run slightly higher but, given the early stage of project
development (post PEA), that’s not an unreasonable equity price today.

However, and the reason why ASCU has made it to the Copper Basket list this year, the PEA
and current mine plan along with the other advantages this company brings to the table
10
(address, permitting ease, good management team, etc) mean it has every chance of becoming
a real live mine option in the year ahead and with its genuinely low capex entry level (unlike
ODV), this project can appeal to mid-scale copper producer and not just to ambitious
neighbours with rockstar owners.

Stocks to Follow
It was a positive start to the new year for mining stocks, reflected in the decent results
returned by our Stock to Follow list. However. It must be said that the money coming in Top-
Down has gone first to the larger mining stock (via GDX, it seems) and the juniors, while good,
didn’t offer quote as much trading spectacle as their larger Tier 1 and Tier 2 producer brethren.
Our list of 16 open positions also returned six losers (ABRA.v, ALDE.v, MIRL.cse, CTGO, XYZ.v,
MENE.v) and while Minera IRL was the worst in percentage terms (MIRLK.cse down 12.5%)
there was no real damage done as all but AbraSilver (ABRA.v down a penny) were either small
trades or Watch List. There were also three UNCH stocks on the list (QCCU.v, ORX.v, APN.v)
which leaves seven winners (MAI.v, ARG.to, WRN.to, RIO.v, NCAU.v, CKG.v, ATC.v) and the big
percentage wins were led by Rio2 Ltd (RIO.v up 20.5%) a very welcome rally on some
reasonably positive news for our distressed large share holding position. The other moves of
note came form Chesapeake (CKG.v up 10.6%) and the top pick Minera Alamos (MAI.v up
9.1%). As it’s the start of the year, here’s a quick reminder of the colour code used to separate
featured stocks:

TOP PICKS
RECOMMENDED STOCKS
SPECULATIVE TRADES
WATCHLIST STOCKS
LONG-TERM NON-MINING HOLD

To be clear, I am very overweight MAI.v, then the second largest position is ARG.to. Following
those are the others in the “Recommended Stocks” section, then come the smaller sized
“Speculative Trades”, none of which keep me up at night. The “Watch List” is exactly that, an
incomplete list of companies I am actively considering as future trades. Finally, there’s the only
special situations investment of the list, my long-term holding in Mene Inc (MENE.v) to which
I’ll occasionally add small extra tranches, with zero plans to sell for the next couple of years.

Back to the present day and with the removal of Pure Gold and Palamina Corp from the table,
we’re down to 16 covered stocks (13 of which I own), that’s four under my self-imposed
maximum. Five of those are green, one is unchanged since inception and 10 are in the red and
I fully expect that balance to change in our favour as 2023 rolls out.

11
 company Ticker this week Avg Price Reco date Current PPS Gain/Loss% Notes
TOP PICKS
Minera Alamos MAI.v STR BUY C$0.21 13-Oct-19 C$0.48 128.6% $0.75 first tgt, #1 idea
RECOMMENDED STOCKS
Amerigo Res ARG.to STR BUY C$1.36 12-Dec-21 C$1.40 2.9% Main Cu trade, top fundies
Western Copper WRN.to BUY C$2.02 13-Nov-22 C$2.55 26.2% New trade, M&A potential
QC Copper&Gold QCCU.v BUY C$0.275 25-Apr-21 C$0.165 -40.0% MRE due 1q23. Easy hold
AbraSilver Res. ABRA.v BUY C$0.38 4-Dec-22 C$0.34 -10.5% New trade, started weak
Rio2 Ltd. RIO.v HOLD C$0.83 22-Apr-18 C$0.235 -71.7% Cheap on permit probs, appeal
SPECULATIVE TRADES
Newcore Gold NCAU.v ADDING C$0.20 23-Oct-22 C$0.245 22.5% Cheap now, MRE due Jan'23
Orefinders ORX.v.v SPEC BUY C$0.04 23-Oct-22 C$0.04 0.0% Plan to build position at 4c
Chesapeake Gold CKG.v SPEC BUY C$3.07 20-Feb-22 C$2.09 -31.9% Au leverage, small trade so far
Aldebaran Res. ALDE.v BUY C$0.72 16-May-21 C$0.77 6.9% Now in its drill results season
Altiplano Metals APN.v HOLD C$0.31 17-Sep-21 C$0.145 -53.2% Cheap entry, plan on track.
Minera IRL MIRL.cse avoid C$0.195 22-Jul-12 C$0.04 -79.5% run into ground by CEO
A WATCHLIST OF POTENTIAL TRADES. NB: I DO NOT OWN
ATAC Res ATC.v WATCH C$0.095 11-Sep-22 C$0.08 -15.8% Cheap Yukon neighbour play
Contango Ore CTGO WATCH U$23.25 2-Dec-22 U$22.03 -5.2% Dropping from watch list
Anacortes Mining XYZ.v WATCH C$0.49 22-Jul-22 C$0.41 -16.3% potential gold exploreco trade
LONG-TERM NON-MINING HOLD
Mene Inc. MENE.v adding C$0.66 6-Dec-20 C$0.455 -31.1% LT bet, adding slowly
CLOSED TRADES IN 2023 date closed close price
none as yet
2015 to 2022 annual closed positions in appendices below, 2009 to 2014 closed positions in editions IKN553 or earlier

Now for notes on just a couple of the covered companies:

Newcore Gold (NCAU.v): ADDING. I know the company tried hard to get its pending
Mineral Resource Estimate (MRE) done by the end of 2022 (because I asked them) but as
things turned out, there were too many small loose ends to tie off and the third party
consultant wanted a little more time. But the new version of corporate presentation on NCAU’s
website, out this weekend, confirms that we’ll see the pending MRE this month, as slide 27 has
four “Upcoming Catalysts”:
 5,000 Metre Drill Program, which should start delivering assays soon
 Metallurgical Testwork Ongoing, as they (quote) “continue to de-risk technical merits of
the project”
 The Mineral Resource Update in January 2023
 Drill Results
That’s basically two catalysts and not four; the 5km drill program is all about the assays they
deliver (two of the bullets), plus that’s the biggest mouthful I’ve ever seen on met that never
moves the market anyway (and “testwork” is two words, people). That leaves the MRE, which is
a different kettle of fish and worthy of consideration. We await the 2m+ oz number from that
and once it’s out there, NCAU should be in position to better promote its advantages to the
world.
In trading, NCAU did well enough and has tracked the median exploreco up, but so far at least
we haven’t seen the burst of volume it will require to breack back above 30c and beyond. This
is a good thing as far as I’m concerned and with the NRE imminent, now is the time to make a
final addition to a position that is getting big enough for me to care about. Therefore and
assuming I get the add I want at a reasonable price next week, I plan to move NCAU up to the
standard “Recommended Stocks” section of the above table. I’ve tracked NCAU since it was a

12
50c-ish stock in early 2022 and thought it reasonable value even then. That means I’m very
happy about my cost average on this stock, it also means
that we don’t need a return to the previous 50c levels to
be able to book a win, as even a return a very achievable
35c would imply a 40% gain from this weekend’s price.

Out of all the speculative trades I currently follow and

own, NCAU stands out as the Wayne Gretzky “stake to
where the puck is going to be” opportunity. With 2m oz of
economic gold about to be reported to market in a
politically safe zone of West Africa, plenty of exploration
upside left in the tank and a market cap of just U$26m or
so this weekend, you’re getting a lot of leverage on gold
for a small price. Even my modest near-term 35c target would only take the in-situ valuation
from U$13/oz Au to U$18.50/oz....there’s plenty of room for equity appreciation as long as
sustained volume returns to the stock.

I’m going to take advantage of the sub-30c numbers and buy some NCAU now, before the idea
gets popular with others. A lot to like here at today’s price deck, both in absolute and
comparative terms.

Minera Alamos (MAI.v): No commercial production declaration from MAI as yet but, after
conversing with company President Doug Ramshaw last week, I’m more than happy to give the
company a couple of weeks of grace before we get any formal news on any corporate matter.
While the MAI team is clear on what it wants to do in the next few weeks and has unofficial
plans decided, due to a mix of professional and personal reasons they haven’t managed to get
together and come to the type of formal, rubber-stamped decision that their lawyers require.
It’s a minor internal delay and nothing to sweat, plus if anyone doubts the confidence of the
MAI team going into this year they should just check on the amount of insider share buying
that’s been going on…these people continue to put their money firmly where their mouths are.

This desk has also noted that the talk of the Los Verdes copper spin-out, something we
reported on during 4q22 has been beginning to make the rounds on social media, presumably
that’s President Ramshaw doing his thing.

Rio2 Ltd (RIO.v): Let’s not fool ourselves, RIO.v is still very much in its penalty box.
However, this weekend’s 23.5c price is a 20%+ improvement in the first week of 2023 and
we’re now back at the type of price I thought were perfectly reasonable under present
permitting circumstances (I pencilled in 25c or so, you may recall).

We also got a reasonably positive NR, in which RIO.v announced (7) that management and
insiders would be taking part of their salary in shares during 2023. While not always a good
thing for a junior, in the case of RIO.v this is positive news for several reasons:
 Reduced cash drain. The recent deal to sell non-core royalties to OGR has put cash in
the treasury, RIO’s job now is to concentrate its efforts of the Comite de Ministros
appeals process and that requires legal funding, while other normal mining exploreco
activities will be minimal. The lower its corporate cash burn during 2023 the better.
 Alignment of interests. It’s a positive to see RIO.v people seeing value in shares at 20c
and 25c, instead of cash. This aligns insiders with shareholders and stakeholders and is
a indication of intent for the upcoming appeals process.
 These will be “dead shares”. While they will add to the overall count, any new shares
emitted to insiders won’t add to the float and that will also support the share price.
I asked company chair Alex Black about the estimated sizing of the shares-for-salaries plan and
while it’s impossible to give an exact figure due to eventual share price fluctuations, the
company expects the plan to be a maximum of $750,000 in cash value. This suggests a total

13
number of share of perhaps 3.5m to 3.8m. As for internal
takers, some directors will choose to take 100% of their fees in
shares, others may take around 50% and I was also interested
to learn that the plan is also for the Chilean-based management
at RIO.v, so it’s not just the C-suite members who are on board.
Also a good thing and indicative of the confidence inside RIO.v
about the permitting processes to come.

Minera IRL (MIRL.cse): We got the final month’s production

figures from MIRL’s Corihuarmi mine late last week, with
1,590oz shipped in December for a 4q22 total of 5,441oz. That shows in the quarterly table:
Oz Au IRL: Corihuarmi quarterly sales
8000
7000
6000
5000
4000

6831

6770
6415
6231

6259
6013
5987

5906

5875
5704
5612

5647

5441
5222

5195

5249
5206
3000

5067
4949

4920
2000
1000
0
1q18
2q18
3q18
4q18
1q19
2q19
3q19
4q19
1q20
2q20
3q20
4q20
1q21
2q21
3q21
4q21
1q22
2q22
3q22
4q22
source: IRL filings

We also learned that MIRL hasn’t managed to back any more of its eye-wateringly expensive
U$2m loan, taken last May. With just $200k of principal paid back so far and the loan due in
May 2023, the outstanding U$1.8m accrues interest payments of 3% per month. That’s
U$54,000 per month, or if you prefer around U$380,000 in 2022…just in interest. Absolutely
crazy and while any normal, transparent company would never countenance such an usury
deal, at MIRL we’re not even likely to find out the name of the counterparty. Abominable
business practice from a company with far too many question marks hanging over its head
already.

Amerigo Resources (ARG.to): It not the first time our main copper play has run from lower
to higher over a trading week, it’s been the trait since November or so, so seeing ARG close at
$1.40 for the first time since June (when it was dropping with copper and the other Cu stocks)
was a pleasant end to the week.
There are other copper stocks that will provide more near-term trading leverage for your buck
(even Copper Mountain (CMMC.to) managed to break out of its recent funk on Friday), but
there’s nothing as fundamentally solid as ARG out there in the junior world and at copper prices
of U$3.80/lb and above, it will be able to start running its share buyback program (and saved
for bonus dividends, too). ON that subject, this weekend ARG noted that it hadn’t bought back
any shares during the first month of its renewed NCIB, December 2022. That’s as expected, so
if ARG begins to move in the open market we could see this price rock higher quickly.

Contango Ore (CTGO): When we published our overview note on CTGO in IKN708, dated
December 11th, it was a U$23.64 stock. That’s now down to U$22.03, a drop of 6.8% in a
period when most other PM stocks have been improving. As
we laid out in the IKN708 report, the main incognito is still
the method CTGO uses to finance its end of the Manh Choh
development and the share price action suggests nailing
down that deal has been more complicated than originally
envisaged. However and come the day a deal is announced,
it will also be a clear de-risking moment and at the current
U$22, even an expensive-ish deal would leave 100% of the
market cap covered by the expected returns from Manh
Choh. That would leave all the upside to Lucky Shot and
14
 with that promising to deliver at least 500k oz of high grade ounces, that’s a good place for RvN
and his team to start adding equity value in 2023. Personally speaking I’m not in a hurry to own
CTGO shares and still keen to see the financing deal terms. The very low average daily volume
doesn’t help things, either.

The Copper Basket

After one week of 2023, The Copper Basket shows a gain of 2.76% to level stakes:
company ticker price 1/1/23 Shares out Market Cap current pps gain/loss%
1 Solaris Res SLS.to 6.44 114.56 762.97 6.66 3.4%
2 Western Copper WRN.to 2.41 151.597 386.57 2.55 5.8%
3 Marimaca Cop MARI.to 3.22 88.028 294.01 3.34 3.7%
4 Oroco Res OCO.v 0.91 207.034 182.19 0.88 -3.3%
5 Arizona Sonoran ASCU.to 1.92 88.713 172.99 1.95 1.6%
6 Aldebaran Res. ALDE.v 0.78 138.579 106.71 0.77 -1.3%
7 Hot Chili HCH.v 0.78 119.455 101.54 0.85 9.0%
8 Regulus Res. REG.v 1.10 101.85 100.83 0.99 -10.0%
9 Pan Global Res PGZ.v 0.46 212.145 91.22 0.43 -6.5%
10 Faraday Copper FDY.to 0.54 123.012 79.96 0.65 20.4%
11 Kodiak Copper KDK.v 1.12 55.6 68.39 1.23 9.8%
12 QC Copper QCCU.v 0.165 150.736 24.87 0.165 0.0%
13 Element 29 Res ECU.v 0.16 86.966 14.78 0.17 6.3%
14 Libero Copper LBC.v 0.155 90.669 11.79 0.13 -16.1%
15 Atacama Copper ACOP.v 0.16 34.373 6.53 0.19 18.8%
NB: All stocks in CAD$ Portfolio avg 2.76%

It’s nice to start the year with one in the win column. There were five losers (OCO.v, ALDE.v,
PGZ.v, REG.v, LBC.v) and one unchanged stock (QCCU.v) in our newly revised list of 15, so that
leaves nine winners (SLS.to, WRN.to, MARI.to, ASCU.to, HCH.v, FDY.to, KDK.v, ECU.v, ACOP.v).
As for the big swings, there were two double-figure percentage losers in the shape of Libero
(LBC.v down 16.1%) and Regulus (REG.v down 10.0%), neither of which came as a surprise.
Meanwhile the big winners were Faraday Copper (FDY.to up 20.4%), Atacama Copper (ACOP.v
up 18.8%) and Kodiak (KDK.v).

All in all a good week for the copper juniors, product of the combo of a reasonably classic Week
One bounce as the tax loss selling effects reverse, plus a useful move in copper on Friday. That
was as much to do with the macro news (see intro) as anything metal-specific but there was
some positive newsflow from which bulls could feed. See below for that, first we consider a six-
month price chart of the metal and while it’s certainly good to see copper’s main Comex
contract close above U$3.90/lb on the week, we need to keep in mind that we’ve been here on
several occasions since November without managing to break above the (psychologically
important?) 4-line:

15
Therefore a word of caution, as it’s hardly the first time we’ve seen a buoyant first week of a
new year, only to be followed by a correction and re-trace. Happy to be at these prices and not
10c/lb lower, of course, but NCAU.v aside I’m not in a big hurry to add to positions or buy
anything new. The pop was mostly driven by news out of China that its Government-backed
economic stimulus policy, one that we’ve been underscoring and reporting on for the last six
months or so, isn’t a joke. For some reason the market was surprised by news (8) out of the
country’s Guangzhou manufacturing hub region that, according to State TV channel CCTV,
some 1,722 manufacturing facility projects worth 6.5Tn Yuan (U$945Bn) are slated to move
into construction in 2023.

Meanwhile on the supply side of the equation, Thursday also underscored the poor year for
copper production in the world’s number one producer country, Chile. The latest monthly
figures from Cochilco underscored its bad 2022 as in November, the country produced 459.2
kmt copper. That fits on the right-hand side of this three-year chart, trend line added to help
the eye:
KMT Cu Chile: Monthly copper production, 2020 to date
520
500
480
460
440
420
500.4

498.3
494.7

492.3

488.8

487.2
484.1

486.5

485.1
482.1
479.8

477.3

474.5
470.5

470.5
400
466.5
465.1

462.8
460.1

461.2
457.8

457.7

477
459.2
454.7
465

447.4

434.6
448

380
426.5

425.7

423.2
419.5

415.5
394.6
360
340
320
300
nov

nov

nov
jan'20
feb

jan'21
feb

jan'22
feb
mar
apr

mar
apr

mar
apr
jun

aug
sep

jun

aug
sep

jun

aug
sep
jul

jul

jul
oct

oct

oct
may

dec

may

dec

may
source: Cochilco

Production is expected to rebound in 2023, thanks to new projects such as the Quebrada
Blanca Stage II (Anglo) coming on line and analyst house S&P Global pegs 2023 production at
5.97m tonnes. That looks like this compared to the last three years:
 2020: 5.73m tonnes
 2021: 5.63m tonnes
 2022: 5.32m tonnes (est)
 2023: 5.97m tonnes (S&P Global forecast)
Which is fair enough, but this time last year the world of beancounters also expected Chile’s
2022 to beat its 2021 by 4.7%. So go figure. Summing up, the first week of 2023 saw news of
crimped copper supply and increasing copper demand, which only comes as a shock if you
haven’t been paying attention. The IKN Weekly has been paying attention.

We now move to our regular weekly update on the world copper inventory scene, data from
Chile’s Cochilco:
 The overall inventory aggregate of the world’s three official systems rose by a modest
8,833 metric tonnes (mt) last week, to close Friday at 198,485mt.
 In Shanghai the SHFE saw the only rise of the week, up 11,130mt to close at 80,398mt.
 A small drop in overall copper inventory at the LME, down 2,150mt on the week to
close Friday at 86,400mt. Once again, let’s underscore the lack of tonnage in Asia as
76,875mt of the LME total is located in its German and Dutch warehouses, with an
ultra-thin 5,700mt in its Asia stocks.
 The samo samo at Comex copper, with inventories down a very small 147mt to close at
31,687mt. No biggie.
We’ll stick with the standard dedicated SHFE chart until there’s enough of 2023 to map on its
own. That bunch of dots on the far right-hand side shows the lack of direction over the last few
weeks, though we should see stocks spike higher soon, Kung Hei Fat Choy and all that.
16
 Mt Cu Shanghai Futures Exchange Warehouse Stocks, 2014 to date
400000
350000
300000
250000
200000
150000
100000 |
50000
0

nov5th
nov1st
Dec31'13

feb3rd 2019
23rd
20th
15th
10th
oct5th
30th
25th
22nd
12th
sep6th
dec27th201

12th
Aug7th
Oct2nd
Dec4th
29th
26th
16th
10th

25th
22nd
24th
19th
9th

26th
15th
10th
jan5th2020
mar1st2020
26th
16th
11th
dec6th2020
28th
23rd
18th
12th
7th
jan2nd2022
27th
24th
19th
14th
9th
dec4th
21st

21st

31st

31st
21st

21st

31st
17th

17th

14th
source: Cochilco

Now for a few notes on some basket component stocks:

Element 29 (ECU.v): The placement open into the New Year suddenly became popular and at
the final bell, ECU raised its sale by 1.475m units (9). That puts our new estimated shares out
total at just under 87m and with a penny added on the week, a market cap of C$14.78m.
That’s cheap enough if good enough.

Faraday Copper (FDY.to): The biggest climber of our list

in FY23 Week One, FDY shot higher and got more popular
as the week continued, with all the 60c gone on Thursday
and 65c and 66c the typical trade price on Friday, with
more than 300k shares traded that day, all on no news and
very little fanfare (aside from the dropped rumour about
Adam Lundin on a site visit last week). That’s a new all-time
high for the FDY ticker, in both TSXV and TSX form.

Libero Copper (LBC.v): The other exploreco currently

running a placement, LBC, closed its final tranche on Friday evening and sold 750k fewer shares
than the posited maximum of 13.333m, which means we’ve adjusted our estimated S/O total
for the company to 90.669mm as seen in the table above. In trading, LBC started 2023 in the
way it left 2022, with the stock price being hosed, though there was also a notable uptick in
volume as the stock caved to as low as 11.5c before a small reflex bounce Friday.

Regulus Resources (REG.v): Somebody sold somebody else 80k of shares at $1.10 at the
opening bell on Tuesday morning, which is the second part
of the basic rule to make money in the market, as seen in
IKN707, Buy Low/Sell High, back when REG was trading at
68c and 70c. With that sale done, the stock went back to its
dribs’n’drabs volume and closed down 10%, under the
Loonie line again.

The next expected newsflow from REG is the

17
 announcement that BVN has paid the company U$9m to claw back on its JV property, though
we may get some drill assays before then.

The Producer Basket

After 1 week of 2023, the Producer Basket shows a gain of 9.25% to level stakes:
company ticker price 1/1/23 Shares out MktCap(U$Bn) current pps gain/loss%
1 Newmont NEM 47.20 799 42.10 52.69 11.6%
2 Barrick GOLD 17.18 1761.54 33.54 19.04 10.8%
4 Agnico Eagle AEM 51.99 488.9 27.03 55.28 6.3%
5 Wheaton PM WPM 39.08 451.963 19.57 43.30 10.8%
7 Kinross Gold KGC 4.09 1256.1 5.74 4.57 11.7%
8 Alamos Gold AGI 10.11 393.1 4.27 10.86 7.4%
9 B2Gold BTG 3.57 1074.567 4.21 3.92 9.8%
6 Hecla Mining GFI 5.56 603.86 3.57 5.92 6.5%
3 Eldorado Gold EGO 8.36 185.73 1.65 8.90 6.5%
10 Wesdome Gold WDOFF 5.53 142.287 0.87 6.14 11.0%
All prices and stock quotes in U$ Port. avg 9.25%

It was a strong week for the larger producers and in the case of our ten for 2023, the minimum
win was 6.3% and the best was 11.7%. Notably and with exceptions to prove the rule, the
bigger market cappers did better than the Tier 2 stocks so a round of applause for Newmont
(NEM up 11.6%), Barrick (GOLD up 10.8%) and Wheaton (WPM up 10.8%). We won’t run the
tracking charts until we have a representative sample, maybe six weeks or so, but in Week One
our +9.25% move looks excellent, until the moment to see the GDX benchmark is up 10.1%
and we’re already 0.85% behind the pack.

Wesdome Gold (WDO.to) (WDOFF): The exception to prove the rule, Wesdome in USD
terms (WDOFF) improved by 11.0% and its main Loonie ticker managed to get back above the
C$8 line again. This three-year chart gives context on what a WDO with a seven-handle means,
the only other time we’ve seen such prices was in the midst of the Covid crisis in March 2020.

The recent weakness is flagging continued under-performance in 4q22 and we’ll find out about
that soon enough. In 2022 WDO filed its 4q22 production numbers on January 13th and in
2021, it was January 14th. So we get to find out whether the recent heavy drop was about
what’s going on (or not) and Kiena and Eagle River, or whether is was a magnification of
Canadian Tax Loss selling, either next week or early the week after.

B2Gold (BTG): The other Tier2 company Q4 numbers we’re looking forward to seeing are
those of BTG, which we expect to be a real blowout and at least 330,000 oz gold. We’ve been
over the reasons in late 2022 issues, most recently IKN709 dated December 18th, since then
and as this comparative chart to GDX shows, BTG hasn’t played much catch-up and volumes
have been lower, too.
18
I still think this stock is primed for a rally once the BTG 4q22 production and preliminary sales
numbers are announced, likely week three of this month (BTG has published this equivalent NR
on Jan 21st 2020 and Jan 20th 2021). We may even get rough cash cost numbers or preliminary
guidance for FY23 in this NR, as well.

The TinyCaps List

After one week of 2023, the TinyCaps show a gain of 4.46% to level stakes:
company ticker price 1/1/23 Shares out Mkt Cap current pps gain/loss%
Aurelius Min AUL.v 0.07 49.787 3.49 0.07 0.0%
Coast Copper COCO.v 0.045 64.001 2.88 0.045 0.0%
District Metals DMX.v 0.075 86.891 7.82 0.09 20.0%
Latin Metals LMS.v 0.13 69.962 10.84 0.155 19.2%
Manitou Gold MTU.v 0.02 344.568 8.61 0.025 25.0%
Nine Mile Metals NINE.cse 0.29 57.025 13.69 0.24 -17.2%
Palamina Corp PA.v 0.08 65.285 5.22 0.08 0.0%
Precipitate Gold PRG.v 0.075 130.367 10.43 0.08 6.7%
South Star STS.v 0.55 32.755 17.03 0.52 -5.5%
Viva Gold VAU.v 0.14 91.608 12.37 0.135 -3.6%
Prices in CAD$, data from TSXV basket avg 4.46%

This section attempts to track the tinycap mining sub-sector of the market, our ten companies
chosen under the following criteria to put together a list representing the state of play in the
sub-sector of tinycap exploration company stocks. At least, that’s the plan.
 Market capitalization of under $20m. They have to be tiny. In two cases I’ve stretched the window a
little and allowed sub-U$20m market capper in that are just over the C$20m level, but the spirit is unaltered.
 A “non broken” stock price and project story. There are literally hundreds of tinycap juniors of the right
size, but it was a particularly depressing exercise to trawl through the whole of the TSXV and find companies
that are small enough, but with life in them. The vast majority of sub-$20m stocks are broken stocks, either
traded to death on the exchange or with projects that are a bust or with entrenched management more
interested in their monthly paycheck than anything else.
 Likelihood of meaningful newsflow in 2023. This connects to the company’s “unbroken” status, as we
want news and potential catalysts from companies with projects that can work.
 Decent management if possible. When you are down among the little guys it doesn’t pay to be too
choosy, but still I preferred companies that have teams or people with good peer reputations.

A positive week one for our new list of representative group, chosen to track the fate of the
smallest end of the mining sector. The headcount of four winners (DMX.v, LMS.v, MTU.v,
PRG.v), three unchanged stocks (AUL.v, COCO.v, PA.v) and three losers (NINE.v, STS.v, VAU.v)
is slightly in our favour, but the reason why we’re over 4% up on the week are the size of some
of those winners, with Manitou (MTU.v up 25.0%), District (DMX.v up 20.0%) and Latin Metals
(LMS.v up 19.2%) boosting the aggregate and only Nine Mile (NINE.cse down 17.2%) creating
significant headwinds.
19
Nine Mile Metals (NINE.cse): January 3rd saw NINE deliver the assays from its next two
holes at its main California Lake VMS project, the reason why this stock made the list in 2023.
Here’s a screenshot of the NR (10):

So two holes near the original discovery hole that shot the stock higher in late 2022, both
returning good news and bad news. The good is how they both hit the VMS lens material in
decent widths and roughly the same depths as CL2206, the bad is how grades weren’t up to
scratch. The NR and the CEO comments but the requisite brave face on these numbers, but
perhaps the most telling comment from CEO Cruickshank came at the end of his section:
“We are concentrating now on a designed program to explore the entire 1.5km long
target feature to identify the source at depth.”

From drilling 20m from the discovery hole, NINE now wants its backers to consider more
intently the length of its 1.5km target. The stock dropped on the news but, it must be said, not
as much as I expected and while there was a volume spike on the morning of the NR, follow-
through was modest and NINE didn’t collapse (merely drifted lower).

Hope springs eternal.

District Metals (DMX.v): We got this news from DMX (11) on Thursday:
January 5, 2023 – District Metals Corp. (TSX-V: DMX) (FRA: DFPP); (“District” or the
“Company”) is pleased to report that Bergslagen Metals AB (a 100% owned Swedish
subsidiary of District) has applied for a 2,302 hectare mineral license (Figure 1) to
explore for vanadium, nickel, molybdenum, zinc, and other elements, covering
approximately 68% of the polymetallic Viken Deposit located in Jämtland County,
central Sweden. The Viken Deposit is the largest undeveloped Alum Shale vanadium-
uranium-molybdenum-nickel-copper-zinc deposit in Sweden, and amongst the largest
deposits by total historic mineral resources of vanadium and uranium in the world. The
Bergsstaten (Mining Inspectorate) is expected to reach a decision on the Company’s
Viken nr 101 mineral license application by the end of February 2023.

The market seems to have liked what it saw and bid the stock up at the end of the week, but
the modest volume suggests a lack of sellers as much as any new enthusiasm.
20
Finally, thanks for the feedback from you out there on this pick for the 2023 TinyCaps lists, it
got a small flurry of “aha! I own this one!” type mails and general approval on its inclusion,
which is good. I also learned that a few of the social media influencer types (paid pumpers by
any other name) have been promoting this stock, so that’s something to consider in the mix.
NB: Please be clear that The Tiny Dogs is NOT a list of recommended tinycap stocks. It is a list of companies with
market caps of under $20m offering a reasonable representation of the wider tinycaps market. It’s possible in the future
I may buy shares in one or several of these stocks, at the moment both my opinion and wallet are strictly neutral.

Regional politics
Brazil: The country of the future*
This mailbag from long-time subscriber and occasional mailpal “RS” arrived this afternoon (very
slightly edited):
Dear Sir,
A happy and prosperous new year to you and yours.
Before you hit the key board for another edition, please consider addressing the
political situation in Brazil. (I’m sure you will) I currently own 2 issues there, VALE and
ERO. Do you see any risk for either? Ero does most of their business internally with
domestic buyers while, as you know, Vale wants to off load its noncore assets. As
usual, thanks in advance for any insights on political risk in these or other Brazilian
issues.
Yours, RS
PS: Recent PM stock gains barely offset chicken (for the BBQ) price increases on a %
basis.

I liked the PS, RS.

As anyone who checked a world news headline page today Sunday will probably know, Brazil
had its own little “January 6th 2021” today, January 8th 2023, when a large contingent of die-
hard supporters of the hard right wing ex-President Jair Bolsonaro stormed several government
buildings in the capital, Brasilia, after gathering and protesting outside the buildings for the last
couple of days. Main targets included the buildings of Congress, the Supreme Court and the
Presidential Palace Today’s dramatic scenes came a week after the inauguration of new
President Lula da Silva and thanks to the amenable architecture of the landmark buildings
(many designed by Oscar Niemeyer), many
of the protesters gathered on the roofs and
the event made good photo material. This
shot (right) makes intentions plain as day
and I don’t think you need a deep knowledge
of Portuguese to know that the
insurrectionists were calling for the military
to move in and topple the recently elected
left wing Lula.

The scenes were strangely reminiscent of

January 6th 2020 in another way, as the
21
insurrection started early afternoon but by 6pm the forces of law and order were reporting that
all raided buildings had been secured and as these words are written, around 9pm Brazil Time,
some 150 protesters have been arrested by police. There are now a steady stream of reports
about offices and buildings having been ransacked by the protesters, with targets including the
offices of the First Lady and several members of Congress.

The political reaction against the mob invasion has been swift both nationally and
internationally, with supporters of the new Lula government (as well as many neutrals, I will
safely suppose) calling for immediate street marches in defence of democracy and to uphold
the legitimate government. Countries around the world, USA first among equals but all of
Brazil’s direct South American neighbours as well, have been quick to voice their support for the
Lula government and denounce the violent insurrection. The use of the word “fascist” has been
common on social media and there are also calls to get Brazil’s ex-President Jair Bolsonaro to
leave Florida USA (where he is apparently on vacation) and return to Brazil in order to explain
what role, if any he has had in today’s scenes.

That’s enough news reporting, now to tackle the question posed by RS, as it’s the reason for
this inserted note. Some bullet points:
 The immediate reaction to the coordinated invasion and disruption in Brasilia, that of
buildings cleared by the forces of order and multiple arrests, will calm immediate nerves
of foreign observers.
 We should also expect a big turnout for the “anti-coup” marches to support Lula,
currently being hurriedly organized in the main cities of the country (Sao Paulo, Rio,
etc). Tomorrow’s scenes are likely to show strong support for Lula and for the
democratic process in general and should also go a long way to calm the nerves inside
and outside Brazil.
 Ex-President Jair Bolsonaro does enjoy plenty of hard-line support, he has “his base”
(to use a Trumpian term) and when the country is as big and populous as Brazil, if only
15% are die-hards that means over 30m people to raise a noise. However, be clear
that these hardliners are a clear minority and while the recent election may have been
tight, with 50.9% Lula to 49.1% Jair in the run-off, most Jair voters were picking the
“least worst”, rather than someone fully aligned with their own political convictions.
Today’s scenes involved a large mob, but they are far from representative of the
country as a whole.
 While we agree Brazil’s military “leans to the right” and that many of the generals are
not obvious allies to the PT party, we are a long way from the 1980s when Brazil’s
weak political institutions saw the military wield active political power. The fact that
police moved to arrest hundreds of people must have come as a surprise to those
protesting, as political extremes these days tend to live in their own rarefied world and
come to believe their minority views are held by a larger cross section.
 However, once the dust has settled on today’s headline-making scenes, we’re going to
be left with a Brazil that has become less secure in the eyes of the outside world, no
matter how well attended tomorrow’s “Anti Coup” rallies might be. The depth of feeling
held by Brazil’s extreme right wing toward Lula and his government means we may see
more violent protests on the same ilk and if they are not nipped in the bud quickly,
Brazil’s image will duly suffer even if things don’t get out of hand.
 It’s not all bad news, though. In the case of the mining sector, the big mines and major
assets tend to be in rural and outlaying zones, well away from major population centres
and unlikely targets for any future protest. Brazil isn’t a country that gets stymied by
roadblocks, either, so I’d be very surprised if there is any direct affect on operations at
Vale, Ero Copper (to name RS’s holdings) or any other major or large mine in the
country.
The bottom line to today’s news: Jair Bolsonaro has always been a bit of a Trump Mini-Me,
22
today it showed more clearly than ever. His failure to concede the election formally (he stopped
short of doing so and has been heavily criticized for it) is one of the ingredients to the
disturbances today, as are the fanatical following of his hardcore support who hold a visceral
hatred of Lula and his left wing politics (even though they’re not as lefty as they’re made out to
be, the PT party is better classed as centre-left) and while corruption is rife in the left, right and
centre of Brazilian politics, the ideologically blinkered can only see heinous crimes of theft and
graft committed, by their enemies, never their own leaders.

We should see a big pushback in the form of “Marches For Democracy” in Brazil (and expect
the world’s media to lap them up, estimating X million in this march and Y million in that one)
and with arrests for today’s incursions now being counted in the hundred (400 is a number I
saw on the newswires recently), the active moves to stage a coup by force are highly unlikely
to repeat. All the same, today’s events certainly do cast a shadow over Brazil on a general
political risk level and the general nervousness won’t be contained by the currency or bonds
markets, so expect equities with Brazilian exposure of all types to take their whack tomorrow
morning, your mining stocks included. However, I’d venture to say that the effect on those
issues unrelated to the banking or financial systems will only see a temporary hit, so if you feel
like “buying the dip” in ERO, VALE or any other Brazilian exposed mining stock then you won’t
hear me making much of a case against the trade.

The bottom/bottom line: Today was a real scene and the fall-out is bound to continue to make
waves inside Brazil for weeks, but in general terms I’d say quite confidently that Brazil’s
democracy isn’t under threat and Lula’s presidency will continue. Tomorrow will give him plenty
of fuel to stop any further moves of insurrection from the far right wing.
*And always will be

Ecuador: Government vs CONAIE over mining

Battle lines are being drawn between government and CONAIE over the thorny issue of mine
development. In IKN710 dated December 25th and “Ecuador: A fight over mining is brewing”,
we reported on the Guillermo Lasso government’s new idea to send soldiers in to protect
specific mining projects or operations. Here’s an extract from IKN710:
This report from Ecuador daily Primicias (5) covers the main points and also includes
the table seen below, here’s how it starts (translated):
“The government is working to publish, in January 2023, a decree to
declare eleven mining projects as “Security Reserved Areas.” The
government is working on a security plan that allows the armed forces,
in an initial phase, to protect eleven legal mining projects. The plan
begins in January 2023.”
The eleven sites include the two large-scale working mines in the country, namely
Mirador Copper (Chinese capitals EXSA) and Fruta del Norte (Lundin Gold (LUG.to)),
but more interestingly also include manty of the development-stage projects owned by
Canadian capitals mining companies, often those tied up in long-term social protests.
We ended that note with some opinion:
We’ll see how this story develops as the New Year begins, but at first sight it has the
look of another President trying to find a way of stuffing mining development down
the throats of communities that have steadfastly (and successfully, it must be said)
opposed its arrival in their localities. Hilarity may ensue.
Sure enough CONAIE started to make noises on this last week. Here are three links (12) (13)
(14), one of which includes a video of the press conference if you want the words straight from
the horse’s mouth. Here’s a translated extract or two:
“The leader of CONAIE, Leonidas Iza, told the press conference on Thursday that the
(new government) measure shows disrespect by the Guillermo Lasso government to
the agreements reached in the working groups after the national strike of June 2022. In
those talks, the government and indigenous organizations agreed on a moratorium on
all mining projects and a decision not to start any new project until a new law of prior
23
 consultancy had been passed, but despite this mining activity continues.”
Also…
“The indigenous leader said that the National Anti-Mining Front has called a meeting
for January 12th in the province of Cotapaxi, to define its strategy to defence its
territories, the judicial measures it will take to denounce the government and the
possible date of a strike in regions where mining companies operate. Mr. Iza
emphasized that the indigenous movement opposes all types of mining, be it formal or
informal.”

Once the presser was done, Ecuador’s Chamber of Mining was ready for the press with its
position. Another translated extract or two:
María Eulalia Silva is president of Ecuador’s Chamber of Mining (CAME). According to
Ms. Silva, it has been demonstrated with numbers that with just two large-scale mining
operations , there are better living standards for Ecuadorians. “Responsible mining is
our present and our future.”
Silva said that of the 24 provinces of Ecuador, none had done what Zamora Chinchipe,
location of the two formal large-scale mining operations Fruta del Norte and Mirador,
had done.
“For example, poverty levels have dropped by 13 points. That’s to say, in the last two
years since the two mines began their operations, 13 of every 100 Zamorans have left
the level of poverty.”

With that, the battle lines are being set. The government will indeed try to backtrack on its
agreement with CONAIE last year and is pushing hard to advance several mining projects. It
seems the plan is to use the argument of economic improvement, better living standards, etc.
Meanwhile, CINAIE and its agenda that is based more on environmental concerns is going to
protest the government plan and has already started to organize its defence.

Mexico: The Fortuna Silver permit issue reappears

And that may be a bad thing for more than just FSM. There may be more than meets to eye to
the Fortuna Silver (FSM) (FVI.to) news last week that Mexico’s SEMARNAT environmental
authority has decided to review the permits for the company’s San José mine in Oaxaca. Most
readers should be able to remember the hoo-hah around this time last year when, after
ongoing local protests and legal actions, the permit extension for FSM’s mine was first denied,
then granted conditionally, then eventually granted and ratified by SEMARNAT. All this to the
howls of derision from locals around the mine, who have opposed its presence since operations
began and accuse it of a list of wrongdoings.

This week, FSM announced the permit granted back in December was now under a new review
in this NR (15), here’s how it starts:
Vancouver, January 5, 2023: Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) reports
that its Mexican subsidiary, Compania Minera Cuzcatlan (“Minera Cuzcatlan”), has
received written notice of a resolution (the “SEMARNAT Resolution”) issued by the
Secretaria de Medio Ambiente y Recursos Naturales (“SEMARNAT”) which provides that
SEMARNAT is re-assessing the 12-year extension (“EIA Extension”) to the
environmental impact authorization (“EIA”) for the San Jose Mine, located in Oaxaca,
Mexico that it granted to Minera Cuzcatlan in December 2021

FSM President and CEO Jorge Ganoza, called this development “incomprehensible” and
proceeded to threaten to wheel out all the
lawyers, meanwhile the stock price did this
(compared to GDXJ and the main silver miners’
ETF, SIL:

We have a mining company making tons of free

cash flow, but is hated by locals and has been
opposed at every turn by the communities
surrounding the mine for over a decade. Locals
seemed to have found a way to stop FSM from

24
operating, but when the moment came last year there was a sudden uprising of national
politicians who lobbied for the company and a SEMARNAT who turned a blind eye to an
officially gathered petition in which, locals demanded their right of prior consultancy (which has
been denied all these years). When the permit was eventually granted, locals decried the AMLO
government as traitors to their cause and said they wouldn’t give up the struggle. At this point,
we mention that the next Presidential and General Election in Mexico, a vote every six year, is
now just 18 months away and the shadow of electoral politics is beginning to cast itself over
government policy and decisions. A thought to consider as we move to the next point.

Left wing Sputnik Media is not a news source I usually rely upon (it has Russian State
connections and a clear plan to promote the Russian agenda), but it is connected to left wing
governments in ways other media channels are not and this report on the FSM affair last week
from Sputnik was interesting (16). Its argument is somewhat cobbled together and the
journalist chooses a bag of data to make FSM look as bad as possible, but the one thing they
do is to connect the latest news to two meetings recently held between SEMARNAT’s head and
Mexico’s powerful finance secretary (basically the national Minister of Finance). After the latest
meeting on Monday January 2nd, the head of SEMARNAT said her department “…will analyse
mining concessions that operate in Mexico, due to the environmental impact they generate. In
a previous meeting in December, the Secretary of the Economy also warned that many of the
(mining) companies operate with high levels of corruption.” So, putting these loose jigsaw piece
together, we have this:

 SEMARNAT has made noises about cracking down on corruption in mining companies
 The next big election in Mexico is now beginning to loom
 Fortuna Silver is massively unpopular in its location
 The AMLO government has been using mining as a political football for some time

If you are long FSM, there’s no reason to start panicking and running for the door on FSM on
last week’s developments and I’m also the first to admit that I may be reading too much into
this, but if AMLO ever wanted a full sized scapegoat on which to pin its pro-community, pro-
environment colours and accelerate its use of the mining sector as a political football in the run-
up to the next Presidential election, then FSM at an José has been served up on a plate for him.
I’m not sure how all this plays out, but I am sure that the IKN First Law of Mining News
Releases can be confidently applied to the NR out of FSM last week (17):
“The IKN First Law of Mining News Releases: Considering that anything
contained in a mining news release is presented in the best possible way for
the company in question, any piece of information contained in a NR that
comes across in any way negative means the real news and/or events behind
it must be very, very bad indeed.”
This is a story that will need careful observation, as if the AMLO government plays dirty with
FSM via SEMARNAT and/or its permit status, it will reflect badly on all mining companies in the
country. That list would include your author’s Top Pick, of course. No action required as yet
and, as it could all blow over without further consequences, it’s on watching brief only.
However, this has the potential to become anything if AMLO and his government decide to
make a political point.

Chile’s royalty law passes committee

In an otherwise slow week for mining and business news in Chile, a few headlines were made
by the successful passage of Gabriel Boric’s “Mining Royalty Law” project through Congressional
Committee. By four votes to zero with one abstention, the law project to add a 1% royalty to
copper producers that sell more than 50kmt copper per year. Then by 3 votes to zero with two
abstentions, the project to levy the same companies with an extra sliding scale tax, depending
on gross profit margin. Full details on the percentages and sliding scale charges on these links,
for those who care enough (18) (19) (20).

With committee stage now done, the law project will make its way to the main chamber for the
25
required debate and vote at some point in the next couple of months. Meanwhile, expect the
mining companies and their commerce groups to continue to lobby against this law project and
keep the noise levels against its passage high.

Market Watching
A reminder on Orezone (ORE.to)
The main fundies note in IKN709, dated December 18th, was “Three reasons why Orezone
(ORE.to) hasn’t re-rated yet”, in which I got a
few thoughts off my chest that had been brewing
about this company, now in official commercial
production. This 12 month chart of ORE stacked
against benchmark tickers GDX and GDXJ shows
that it had a moment mid-2022, but there’s no
need for another three month chart to
demonstrate its lag in the last three months,
which coincides with its move to production.

In IKN709 we identified three issues as the

potential cause of this under-performance at a
time which you’d normally expect a company to
re-rate higher as the cash starts to flow. They
were:
Issue One: Treasury is tight
Issue Two: There may not be enough earnings upside
Issue Three: Political risk has increased sharply
We then expanded on those issues and came to a few conclusions, so please check IKN709 for
the whole thing (quick hack, issue three is the biggest likely drag in my opinion), but we ended
the note with thoughts on how it might trade in the near-term. Here’s that final segment,
repeated verbatim:
However, the prospect of a long-term ceiling on the stock price does not
preclude the potential of a near-term win in the stock. If, as we suppose,
Orezone impresses the market when it announces its 4q22 production and
guides in good fashion for 2023, the market won’t be worrying too much
about the debt load or long-term political risk. With the convergence of
factors coming to the company in early 2023, it has the potential to spike
higher in the way we’ve seen in several other occasions. As such, the current
C$1.22 entry point looks like solid value for a near-term risk/reward trade for
those so inclined and as long as the trade is limited in time, you’d be
extremely unlucky to be caught in the type of catastrophic loss potential that
looks set to limit the long-term upside for the stock. A stock to own and trade
over short period of time, rather than own and invest in for a longer period.
That’s why this reminder exists today. Being a new producer, there’s no real way of knowing
exactly when ORE might announce production data on its first quarter (or month) of
commercial production, but if we assume “early January” the clock is now ticking. There was
some news out of ORE last week, as it expanded its management team with two new arrivals
(including the Canaccord metals anal yst who
used to cover ORE, so help us all) so with gold
doing what it did on Friday, I’d expect they
will want to deliver something positive to
market sooner rather than later. ORE does
occasionally run up on spikey trading patterns
and tried (and failed) on the first day last
week, it then was easy to buy at $1.20 or so
26
and if you’re interested in flipping in and out of this stock on its upcoming newsflow, that’s the
type of price I’d suggest but by the same token, as you should know by now I’m awful at
gauging near-term price sentiment so take that last thought with a pinch of salt.

Bottom line: At some point in the next week or two, I expect preliminary production news from
ORE. If it includes preliminary guidance for 2023 and something soothing about the political risk
in Burkina Faso (maybe “we see nothing round our way”), so much the better and more to fuel
a mini-rally in the stock.

Conclusion
IKN712 is done, we end with bullet points:
 Why am I not buying anything new in the week ahead, aside from a planned add to the
small spec Newcore (NCAU.v)? Easy, that’s because this desk was banging on the drum
in late 2022 about being positioned for the New Year at the lower prices available. Feel
free to add to your mining stock positions, however, as the current benevolent macro
backdrop is the right mix of lowering inflation perception and weakening USD.
 Copper’s move on Friday looked particularly interesting, but I’m going to hold back on
the shouting and arm-waving until we see the $4 handle again. Even then, I won’t be
shouting and arm-waving much.

 You now know why this numebrcruncher added ASCU to the Copper Basket list for
2023. You also know why I think ODV is pulling the wool over the eyes of the market
with its “low initial capex” claims for Cariboo.
I thank you in advance for any feedback. Our Top Pick stock is Minera Alamos (MAI.v). Flash
updates will be sent if required by events.
I wish you good trading fortune, ladies and gentlemen.
Best wishes, Mark

Footnotes, appendices, references, disclaimer

(1) https://finance.yahoo.com/news/feds-bullard-says-2023-may-182502714.html

(2) https://www.cnbc.com/2023/01/06/jobs-report-december-2022-nonfarm-payrolls-rose-223000-in-december-as-
strong-jobs-market-tops-expectations.html

(3) https://www.cnbc.com/2023/01/06/raphael-bostic-says-fed-needs-to-stay-the-course-despite-lower-wage-gains.html

(4) https://www.calculatedriskblog.com/2023/01/schedule-for-week-of-january-8-2023.html

(5) https://www.globenewswire.com/news-release/2023/01/03/2582571/0/en/Osisko-Development-Announces-Positive-
Feasibility-Study-Results-for-the-Cariboo-Gold-Project.html

(6) https://iknnews.com/cariboohoo/

(7) https://www.rio2.com/post/rio2-announces-certain-directors-employees-and-consultants-to-receive-shares-in-lieu-of-
salaries

(8) https://www.hellenicshippingnews.com/copper-bounces-as-china-investment-news-spurs-short-covering/

(9) https://www.newsfilecorp.com/release/150473/Element-29-Announces-Upsize-of-NonBrokered-Private-Placement

(10) https://webfiles.thecse.com/NINE_-_NR_-_2023.01.03_-
_California_Lake_Drill_Certified_Results_FINAL.pdf?GVsacHXFNrOaD57Xz5fj.uC0shhiYuQG

(11) https://districtmetals.com/news/district-applies-for-mineral-license-that-encompasses-the-majority-of-the-
polymetallic-viken-deposit-in-central-sweden-

27
 (12) https://radio.corape.org.ec/noticia/item/nacional-conaie-y-frente-antiminero-anunciaron-acciones-en-defensa-de-
los-territorios-del-pais-de-la-mineria

(13) https://www.americanoticias.org/2023/01/06/los-mineros-de-ecuador-rechazan-los-anuncios-de-movilizaciones-de-
la-conaie/

(14) https://diario-octubre.com/2023/01/06/indigenas-de-ecuador-buscan-frenar-la-mineria-en-sus-territorios/

(15) https://fortunasilver.com/investors/news/fortuna-challenges-decision-to-re-assess-extension-of-san-jose-mine-
environmental-impact-authorization/

(16) https://sputniknews.lat/20230106/una-minera-canadiense-aflige-a-una-comunidad-de-mexico-gracias-a-la-lucha-
no-nos-han-desplazado-1134386713.html

(17) https://iknnews.com/fortuna-silver-fsm-fvi-to-and-the-ijn-first-law-of-mining-nrs/

(18) https://www.diarioconstitucional.cl/2023/01/05/royalty-a-la-mineria-del-cobre-sera-analizado-por-hacienda-del-
senado/

(19) https://www.senado.cl/appsenado/templates/tramitacion/index.php?boletin_ini=12093-08

(20) https://www.diarioconstitucional.cl/wp-content/uploads/2022/01/ROYALTY-boletin.pdf

Stocks To Follow Closed Positions 2022

Closed in 2022 date closed close price
Great Bear Res GBR.v Jan'22 C$15.83 26-Aug-20 C$28.58 80.5% Bought out by Kinross, print
Copper Mountain CMMC.to Jan'22 C$3.40 18-Jun-21 C$3.78 15.9% Sold 1/2 position in rebalance
Copper Mountain CMMC.to Feb'22 C$3.40 18-Jun-21 C$3.70 8.8% Sold rest on FY22 guidance
Trilogy Metals TMQ Mar'22 U$1.84 15-Sep-19 U$1.04 -41.3% killed by US permit reversal
McEwen Mining MUX Apr'22 U$0.89 2-Jan-22 U$0.82 -7.9% No 2022 turnaround, cut loss
Abrasilver Res. ABRA.v May'22 C$0.42 24-Apr-22 C$0.33 -21.4% sold to reduce Ag exposure
Strategic Metals SMD.v May'22 C$0.42 31-Jan-21 C$0.30 -28.6% trade flatlined 1.5 years
Discovery Silver DSV.v Jun'22 C$1.77 24-Oct-21 C$1.39 -21.5% Cutting Ag exp.& raising cash
Element 29 ECU.v Jul'22 C$0.58 6-Mar-22 C$0.30 -48.3% sold to cut Cu exposure
Superior Gold SGI.v Oct'22 C$0.95 3-Apr-22 C$0.24 -74.7% Q3 prod fail was last straw
Goldshore Res GSHR.v Nov'22 C$0.18 23-Oct-22 C$0.34 88.9% Quick profit taken
Palamina Corp PA.v Dec'22 C$0.295 21-Nov-21 C$0.08 -72.9% Clear-out of underperformer
Pure Gold PGM.h Dec'22 C$0.14 26-Sep-22 C$0.015 -89.3% tiny trade on vh risk, went Ch11

Stocks To Follow Closed Positions 2021

Closed in 2021 closed close price
Fiore Gold F.v jan'21 C$0.98 21-May-20 C$1.17 19.4% closed as part of rebalance
Norsemont Min NOM.cse feb'21 C$1.55 6-Set-20 C$0.70 -54.8% Cut loser to reduce Au exp.
Element 29 Res ECU.v feb'21 C$0.49 7-Feb-21 C$0.54 10.2% Cut Peru exposure
Kuya Silver KUYA.cse feb'21 C$1.66 8-Nov-20 C$2.51 51.2% Cut Peru exposure
Pucara Gold TORO.v apr'21 C$0.65 4-Oct-20 C$0.26 -60.0% Cut loser, Peru risk call
Copper Mountain CMMC.to apr'21 C$1.40 22-Nov-20 C$4.18 198.6% tgt hit, profit taken
New Gold NGD may'21 U$0.76 9-Feb-20 U$2.14 181.6% Sold to buy AGC, nice win
Orezone Gold ORE.v jun'21 C$0.79 21-Jun-20 C$1.61 103.8% sold on pop, leaky boat
Wolfden Res. WLF.v sep'21 C$0.30 11-Apr-21 C$0.19 -36.7% Failed spec trade, cut loss
Cartier Res ECR.v sep'21 C$0.32 21-Mar-21 C$0.235 -26.6% Failed spec trade, cut loss
Amarillo Gold AGC.v sep'21 C$0.31 30-May-21 C$0.30 -3.2% Capex story changed: Out
Excelsior Mining MIN.to oct'21 C$0.93 10-Mar-19 C$0.53 -43.0% May return in 2022
Royal Road Min. RYR.v nov'21 C$0.155 17-Mar-19 C$0.275 77.4% Closed on Nica pol risk
Aurelius Min. AUL.v dec'21 C$0.75 28-Jun-20 0.24 -68.0% cut end 2021, failed trade
Argonaut Gold AR.to dec'21 C$2.95 25-Jun-21 C$2.15 -27.1% cut on capex blowout

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 Stocks To Follow Closed Positions 2020
Closed in 2020 closed close price
TMAC Resources TMR.to Jan'20 C$3.41 20-Dec-19 C$3.61 5.9% TLS flip play, sold new year
Regulus Res REG.v Jan'20 C$1.10 20-Dec-19 C$1.30 18.2% TLS flip play, profit taken
Bonterra Res BTR.v Jan'20 C$1.90 9-Dec-19 C$1.66 -12.6% TLS flip play, loss taken
McEwen Mining MUX Jan'20 U$1.12 2-Dec-19 U$1.18 5.4% TLS flip play, profit taken
Core Gold CGLD.v Jan'20 C$0.255 7-Apr-19 C$0.305 19.6% arb trade, profit taken
HudBay Min HBM Jan'20 U$3.56 9-Dec-19 U$3.36 -5.6% TLS flip play, loss taken
Midas Gold MAX.to Feb'20 C$0.71 5-Jan-20 C$0.57 -19.7% sm & silly trade
Warrior Gold WAR.v Feb'20 C$0.08 3-Aug-18 C$0.05 -31.3% clean out non-perf sm stocks
Contact Gold C.v Feb'20 C$0.40 19-Aug-18 C$0.18 -55.0% clean out non-perf sm stocks
Sandstorm Gold SAND Feb'20 U$3.73 17-Apr-16 U$7.21 93.3% Sold during port rebalance
NexGen Energy NXE Feb'20 U$1.20 2-Dec-19 U$1.06 -11.7% TLS flip play, loss taken
MAG Silver MAG Apr'20 U$8.95 1-Mar-20 U$10.07 12.5% Sold to cut silver exposure
Alexco Res AXU Apr'20 U$1.69 7-Sep-17 U$1.69 0.0% sold to close Ag exp. in FY20
Bonterra Res BTR.v Jun'20 C$1.62 2-Feb-20 C$1.10 -32.1% under-performer cash moved
Regulus Res REG.v Jun'20 C$0.64 6-Apr-15 C$0.79 23.4% moved $ TMQ/MIN & Au stocks
Great Panther GPR.to Aug'20 C$0.60 21-Jun-20 C$1.10 83.3% Profit taken, good trade
Jaguar Mining JAG.v Aug'20 C$0.42 21-Jun-20 C$0.65 54.8% Profit taken, good trade
Sandstorm Gold SAND Aug'20 U$7.76 10-May-20 U$9.37 20.7% Profit taken, good trade
Integra Resources ITR.v Aug'20 C$2.23 13-Aug-18 C$5.40 142.2% Profit taken, good trade
Wesdome Gold WDO.to Aug'20 C$2.37 14-Oct-17 C$14.82 525.3% last 1/2 of big win closed
INV Metals INV.to Sep'20 C$0.40 17-May-20 C$0.45 12.5% Cut all Ecuador exposure
Cartier Resources ECR.v Nov'20 C$0.155 3-Aug-18 C$0.25 67.7% Exact close price TBA
Tinka Res TK.v Dec'20 C$0.195 19-Apr-16 C$0.195 0.0% Closed on a round trip fail
2015 to 2019 annual closed positions in appendices below, 2009 to 2014 closed positions in editions IKN553 or earlier

Stocks To Follow Closed Positions 2019

Closed in 2019 closed close price
Atico Mining ATY.v jan'19 C$0.55 24-Jul-16 C$0.32 41.8% patience ran out, made room
Candente Copper DNT.to jan'19 C$0.075 3-Aug-18 C$0.05 -33.3% tiny trade, made room for new
B2Gold BTO.to feb'19 C$2.11 12-Sep-14 C$4.05 91.9% Took 1/2 profits, reduce size
Western Copper WRN.to mar'19 C$0.80 20-Jan-19 C$0.81 1.3% Spec trade that didn't work
B2Gold BTO.to mar'19 C$2.11 12-Sep-14 C$4.15 96.7% Took rest of profit.
GT Gold GTT.v mar'19 C$1.17 10-Oct-18 C$0.90 -23.1% Took loss. Story changed
NovaGold NG apr'19 U$3.84 13-Jan-19 U$4.15 -8.1% Short that didn't work, sm loss
Zinc One Z.v jun'19 C$0.47 14-Sep-17 C$0.025 -94.7% clearing out dead trade
Amarillo Gold AGC.v jun'19 C$0.24 22-Aug-18 C$0.20 -16.7% clearing out dead trade
New Gold NGD aug'19 U$1.44 31-Jul-19 U$1.23 14.6% ST short win thru Q2 earnings
IMPACT Silver IPT.v aug'19 C$0.39 21-Jul-19 C$0.46 18.0% took a quick profit
Fiore Gold F.v aug'19 C$0.34 26-May-19 C$0.56 64.7% Took profit, 2q19 avg
Chakana Copper PERU.v oct'19 C$0.84 22-Mar-18 C$0.16 -81.0% Exploreco trade fail. Want space
Wesdome Gold WDO.to oct'19 C$2.37 14-Oct-17 C$7.57 219.4% Sold half, profit taking
Superior Gold SGI.v oct'19 C$1.46 8-Apr-18 C$0.47 -67.8% Failed sm spec on Au. Moved on
Amerigo Res ARG.to nov'19 C$0.91 23-Sep-18 C$0.50 -45.1% worst trade of year, hefty loss
Guyana Goldfields GUY.to dec'19 C$0.94 14-Apr-19 C$0.56 -40.4% taking the loss, financials weak
Tethyan Res TETH.v dec'19 C$0.30 8-Sep-19 C$0.16 -46.7% tiny trade, word of probs in co

29
 Stocks To Follow Closed Positions 2018
Closed in 2018 closed close price
Amarillo Gold AGC.v jan'18 C$0.38 24-Mar-17 C$0.31 -18.4% Cut away losing trade
Riverside Res RRI.v jan'18 C$0.39 27-Jun-16 C$0.31 -20.5% Cut away losing trade
Eros Res ERC.v jan'18 C$0.175 1-Mar-17 C$0.16 -8.6% CEO sudden exit, not good
Excellon Res EXN.to jan'18 C$1.54 9-Oct-16 C$1.66 7.8% 4q17 poor, one too many bad qtrs
Wesdome Gold WDO.to jan'18 C$1.68 15-Dec-17 C$2.06 22.6% Near-term trade block, took profit
Sabina G&S SBB.to apr'18 C$2.06 17-Dec-17 C$1.77 -14.1% Near-term trade, bad timing, small
B2Gold BTO.to May'18 C$2.11 12-Sep-14 C$3.67 73.9% sold 25% to reduce exposure
Lara Expl. LRA.v May'18 C$0.65 11-Feb-18 C$0.58 -13.8% Spec on Brazil didn't work
Solitario XPL June'18 U$0.72 19-Mar-17 U$0.41 -43.1% Failed trade, may return in 4q18
SolGold plc SOLG.to July'18 C$0.475 19-Nov-17 C$0.415 -12.6% cut, trade didn't perform
Pan American PAAS July'18 U$17.90 1-Jun-18 U$16.30 8.9% modest win on short position
NGEx Res NGQ.to Sep'18 C$1.01 22-Oct-17 C$1.00 -1.0% Closed to reduce Argentina exp
Sandstorm Gold SAND Oct'18 U$3.73 17-Apr-16 U$4.13 10.7% partial sale to raise cash for GTT
Aldebaran Res ALDE.v Nov'18 n/a n/a n/a n/a liquidate spin out of REG

Stocks To Follow Closed Positions 2017

Closed in 2017 closed close price
Continental Gold CNL.to Jan'17 C$2.68 22-May-16 C$4.17 55.6% trade closed, profit taken
Focus Ventures FCV.v Jan'17 C$0.23 1-Jul-12 C$0.05 -78.3% Give up, a disaster trade
Wesdome Gold WDO.to Feb'17 C$1.72 28-Aug-16 C$3.00 74.4% Target hit, sold, good trade
Belo Sun BSX.to Mar'17 C$0.90 30-Jan-17 C$0.90 0.0% failed near-term flip trade
Lara Expl. LRA.v Mar'17 C$1.15 8-Apr-12 C$1.05 -8.7% cut to make room for new trade
Rye Patch Gold RPM.v Apr'17 C$0.31 2-Sep-16 C$0.32 3.2% cut for doubts & new stock
Cordoba Min. CDB.v Jun'17 C$0.75 15-Sep-16 C$0.63 -16.0% closed
Constantine Metal CEM.v Aug'17 C$0.135 9-Apr-17 C$0.28 107.4% spec trade closed, good win
Red Eagle Min. R.to Sep'17 C$0.67 13-Dec-16 C$0.27 -59.7% IKN's biggest failure in years
Starcore Intl SAM.to Sep'17 C$0.61 10-Jan-15 C$0.31 -49.2% Patience ran out
B2Gold BTO.to Dec'17 C$2.11 12-Sep-14 C$3.39 60.7% sold small portion for liquidity

Stocks To Follow Closed Positions 2016

Closed in 2016 closed close price
Phoscan Chem FOS.to jan16 C$0.28 29-mar-15 C$0.265 -5.4% Buyout trade, bot but poor deal
True Gold TGM.v jan16 C$0.18 23-aug-15 C$0.25 38.9% okay trade, sold on pol risk
McEwen Mining MUX jan16 U$1.09 25-jan-15 U$1.20 10.1% sold due to lack of value
Lake Shore Gold LSG.to feb-16 C$1.10 07-apr-15 C$1.69 53.6% bot out, sold early in process
Atacama Pacific ATM.v feb-16 C$0.19 26-apr-15 C$0.40 110.5% sold for a double on big pop
New Gold NGD feb-16 U$2.06 24-jan-16 U$2.96 43.7% closed good near-term trade
Sandspring Res SSP.v mar-16 C$0.195 18-oct-15 C$0.32 64.1% Hit tgt, took profit
Teranga Gold TGZ.to mar-16 C$0.54 15-feb-15 C$0.60 11.1% disappointing trade
B2Gold BTG mar-16 U$0.85 13-jan-16 U$1.30 52.9% Separate trade on B2, hit tgt
Dalradian Res DNA.to mar-16 C$0.67 27-oct-13 C$1.00 49.3% Hit target, sold, good win
HudBay Min. HBM may-16 U$4.10 03-apr-16 U$4.36 -6.3% Short trade, poor timing
Nevada Sunrise NEV.v may-16 C$0.185 28-feb-16 C$0.23 24.3% V. small, no big deal either way
Richmont RIC jun-16 U$7.60 01-may-16 U$9.30 22.4% near-term trade, profit taken
INV Metals INV.to jul-16 C$0.25 03-apr-16 C$0.95 280.0% Trade closed on time
HudBay Min. HBM aug16 U$4.98 09-jun-16 U$4.80 3.6% short trade covered, no big deal
Miranda Gold MAD.v oct-16 C$0.125 03-jul-16 C$0.10 -20.0% tiny spec trade, didn't work
Avino G & S ASM nov-16 U$2.00 21-oct-16 U$1.40 -30.0% Abandon trade on bad bot deal

30
 Stocks To Follow Closed Positions 2015
Closed in 2015 closed close price
Argonaut Gold AR.to jan'15 C$1.47 14-dec-14 C$2.53 72.1% Big gain small time, profit taken
Amerigo Res ARG.to jan'15 C$0.405 20-jul-14 C$0.285 -29.6% Given up on weak Cu prices
Reservoir Min. RMC.v jan'15 C$6.05 18-jun-14 C$4.12 -31.9% sold on Cu downturn
Coro Mining COP.to jan'15 C$0.075 26-jan-14 C$0.035 -53.3% sm, sold on Cu downturn
Fortuna Silver FSM mar'15 U$4.12 10-nov-14 U$3.75 9.0% Short used as hedge
GoldQuest Min. GQC.v mar'15 C$0.26 27-oct-13 C$0.085 -67.3% given up ghost
Rio Alto Mining RIO.to apr'15 C$2.30 07-apr-11 C$3.57 55.2% Top pick, bot out, big win
Timmins Gold TGD jun'15 U$0.60 19-apr-15 U$0.62 3.3% near-term trade, out of time
First Majestic AG jul'15 U$10.51 10-aug-14 U$4.55 56.7% horrible failed trade
NovaCopper NCQ.to jul'15 C$1.05 09-apr-14 C$0.50 -52.4% no more Cu exposure, sm sell
McEwen Mining MUX aug'15 U$0.695 21-jul-15 U$0.92 32.4% Closed nearterm flip for win
Midas Gold MAX.to sep'15 C$0.39 21-sep-15 C$0.35 -10.3% Sm. trade idea that didn't work
New Gold NGD oct'15 U$2.18 23-aug-15 U$3.05 39.9% trade closed, profit taken
Legend Gold LGN.v nov'15 C$0.085 01-mar-15 C$0.035 -58.8% tiny "land grab" idea, failed
Timmins Gold TGD nov'15 U$0.245 20-sep-15 U$0.15 -38.8% small near-term loser

Please note that due to space considerations closed positions 2009 to 2014 are now
available on request, or were published in any edition to IKN553 (end 2019).
Important Disclosure
The information and opinions contained within this report reflect the personal views of the author and therefore all
material within should not be construed as accurate or reliable or be utilized as advice for investment or business
purposes. Independent due diligence and discussions with ones own investment and business advisor is strongly
recommended. Accordingly, nothing in this report should be construed as offering a guarantee of the accuracy or
completeness of the information contained herein, as an offer or solicitation with respect to the purchase or sale of any
security or as an endorsement of any product or service. All opinions and estimates included in this report are subject to
change without notice. It is prohibited to copy or redistribute this report to any type of third party without the express
permission of the author.

31