The 10 company 2024 KRO Favorites Collection ended a miserable year with a whimper, closing down 25.7%, close to its low of down 27.2% in mid December. The best it mustered was up 25.5% in early March. This is worse than the 2023 Favorites Collection whose 17 members finished the year down 20.8%, though not as bad as the 2022 Favorites Collection whose 8 members were down 57.5% at the end of 2022 though the TSXV Index was not far behind at being down 41.1%. This year the TSXV Index was up 8.1% compared to being down 3.1% in 2023. The TSXV Index, however, is a very poor indicator of the health of the TSXV which has about 1,103 listings involved in the resource sector. TSXV Index at the end of 2024 had 133 constituents of which 97 or 73% were resource listings. The resource listing makeup keeps changing as S&P replaces losers with new higher market cap listings while including several non-resource listings that don't belong on the TSXV. When you look at the financial shape the picture is much uglier. 43% of TSXV resource listings have negative working capital totaling CAD $2.4 billion, another 15% are limping along with $0-$500,000 working capital, and 42% have more than $500,000, with positive working capital totaling $3.6 billion.

The consistently poor performance of the Favorites stands in stark contrast to gold which finished up 25.5% in 2024, up 14.7% in 2023 and up 14.2% in 2022 for a total gain of 54.4% over three years. 2024 stood out because gold achieved a record high, but the KRO Gold Producer Index of companies producing at least 100,000 ounces gold annually which I began at the start of 2020 gained only 18.7% this year. From the start of 2000 gold has gained 71.4% while the KRO Gold Producer Index has gained only 44.8%. I do not think we have ever seen physical gold outperform intermediate and major gold producers as a group, especially with gold making record highs in 2024; the whole point of owning a gold producer is that a rising gold price has a leveraged impact on the price of a gold producer, especially in a year when inflation was only about 2.7%. If you inflation adjust gold at $400 in 1980 it should be at $1,554, which means the $2,611 price at the end of 2024 represents a real price gain of 68%. After being stuck for decades in the $350-$400 range the subsequent real price gain should be igniting market interest in gold stocks. Other metal prices tracked sideways or down in 2024 as the global economy struggled with the burden of high real interest rates, so no surprise that non-gold juniors got no help from metal price trends during 2024. The disconnect between the gold price trend and gold focused producers and juniors is a serious problem that keeps resource juniors in the market dumpster.

Three consecutive bad years at the end of a resource junior bear market that began in 2011 with a few short-lived rallies in 2016 and 2020 seems to be a good reason to quit rather than to keep doing what I have been doing, hoping that after the longest bear market in Canadian resource junior history the resource juniors will finally experience a bull market again. And yet, the reasons a bull market should happen are the same ones I have been talking about over the past few years. One is that the metal supply needed to achieve energy transition goals can only be achieved by finding and developing new deposits in metals such as lithium and copper needed for the EV sector. But the anti energy transition mentality of the incoming Trump administration makes that look like a lost cause. There is hope that the United States may simply be become irrelevant as far as energy transition trends are concerned. In 2025 China's car production will be more than 50% EV and growing, achieving China's own target a decade early. China has done everything it can to secure its supply chains and as a member of the Global East it can sell EVs to the Global South if Global West nations block Chinese EV imports to protect their domestic car makers. Although China gets much of its electricity from coal, this shift to electric vehicles will sweep the globe, and the Global West carmakers based in China will see their Chinese market for ICE cars evaporate, including those made in China.

I mentioned security of supply chains. The Global West vulnerability to raw material supply from Global East nations is staggering. If Trump pursues isolationist policies that throw Global West allies under the bus, this theoretical vulnerability becomes an existential crisis. If Trump pushes too hard, China will scuttle its trade relationship with the United States and secure its backyard which starts with annexing Taiwan. At the same time China and Russia could give the nod to Kim Jong Un to annex South Korea. If America's response is to unleash nuclear Armageddon, then it doesn't matter what I am doing differently because the world is screwed. More likely Trump will do nothing, but there will be two consequences. One is the flow of raw materials from Global East to West will diminish, and the other is that the rest of the world will start viewing the United States as irrelevant. For the resource juniors this has two important implications.

One is that the real price of gold soars further as non-Americans unload their US stocks and bonds and seek a safe haven for which each other's currency denominated bonds to do not really qualify. That safe haven is physical gold, stored energy, not cryptocurrency which is a US dollar denominated energy liability that you can only sell for dollars. The market has ignored gold's rise into the $2,600-$2,700 range this year because it thinks when MAGA is ascendant it will collapse below $2,000. In early 2011 the gold producers developed downtrends even while gold continued to charge towards $2,000, stalling only in late 2011 before crashing back to $1,100 in 2013. It is this which the market seems to remember and view as a guide to the future. I do not know what gold price and background story is needed to trigger a bull market for gold explorers and producers, but in my view MAGA policies will fail because by definition they do not scale to the global level. The secret behind America's success after WWII was that its story of freedom, democracy and capitalism scaled globally. The MAGA story scales negatively to exclude all non-American citizens.

The horror show of rounding up millions of undocumented residents, stuffing them onto cattle cars for transport to giant concentration camps where they await shipment back to countries from where they came who don't want them back will have poor optics. Not only will that disgust much of the rest of the world, but it will also disgust half of Americans and ultimately most Americans when they get back to seeing what truly matters. One thing people seem to forget is that America was founded on the concept of freedom where people fled established oppression. China and Russia have never been anything other than class structured slave nations. Germany itself was not much different when Adolf Hitler and his Nazi Party came along in the 1930s. Turning America into some sort of monolithic autocracy perhaps with a theocratic bent in the context of its vast geography and diverse population may prove very hard to accomplish.

But the pursuit of self-inflicted problems will achieve existential crisis status where slave nations like China and Russia put the screws to America and other Global West nations by curtailing raw material supply. This bogus polarization, to some degree engineered by Global East agents and manipulated by nihilists, will dissolve and we will see a new found resolve to fight back. And conquering these Global East slave nations will not be a feasible option because they are armed with nuclear weapons and the outcome would be mutually assured destruction. The best response will be to pursue raw material self-sufficiency which can be done in two ways.

One way is for America's innovation capacity to invent new materials and processes that involve abundantly available metals and minerals, which would not be a good outcome for the future of resource juniors. The other way is to explore for new metal and mineral deposits in secure jurisdictions in order to achieve self-sufficiency for the Global West. That way we can ignore the Global East nations while we wait for AI driven innovation to put materials science innovation on steroids. Trying to deal with Global South nations as a source of raw materials will be too little too late, for they will have thrown their lot in with the Global East. America's startup culture ramped up by the AI revolution can deliver many material science innovations. But finding new deposits requires creativity, data gathering also known as exploration, and flexibility, something the majors have a hard time doing at scale. A single resource junior, of course, cannot do much at large scale, but the collective action of numerous juniors acting at their chosen scales will deliver the discovery outcomes the majors can acquire and develop.

I believe that the Canadian resource junior will be elevated by circumstances to the role of the Global West's salvation warrior. The capital starvation they are suffering now, along with the hostility of exploration and mine permitting agencies, will completely reverse. The glass will go from 90% empty to 90% full like it used to do during discovery based area plays and how it sort of did during the China super cycle.

While there may currently be about 1,500 Canadian listed resource juniors, less than 25% have the technical talent to develop a story and execute its pursuit. Through the KRO Search Engine I can identify these and focus my attention on what I call the 2025 Bottom-Fish Collection. When the crisis inflection happens and a wall of capital washes into the resource junior sector, that capital will be sophisticated enough to avoid the lifestyle companies whose only talent is to beat drums and make money disappear. I see these conditions emerging in 2025 which is why I have chosen to stick it out for another year.

Last year I set the stage for exiting this sector if it continues to behave as though it is truly on an extinction path by making the KRO Individual Membership at $450 good for only to the end of 2024. Around now I was to decide whether to kill the business or switch to a new membership model that costs $200 per month while grandfathering existing members to renew at the old rate. In not answering your first question I did explain why the conditions are finally ripe for resource juniors to become extremely popular even though 2024 finished with a capitulation sigh. But there is another sobering reality I have had to contend with that I've talked about in recent Kaiser Watch episodes.

That sobering reality is the fact that the Canadian resource junior sector is not delivering sufficient wins to keep its diehard audiences from throwing in the towel. As this year ground to a whimpering end, we saw worse capitulation selling than last year when some subscribers told me I am worse than useless and to take a hike. At the same time there is no evidence that younger audiences are becoming interested in this sector. This year when I announced my intention to continue for another year, the response was a rush by some members to submit discontinue notices for their auto-renewal memberships. So literally I am watching the collapse of my subscriber base as we head into 2025. Doing the same thing over and over again expecting a different outcome may not qualify one as insane, but it can certainly render one penniless.

So here is the plan. I am allowing former, existing and new members to subscribe for the $450 membership which will be valid through the end of 2025 until March 31, 2025, after which if you want a membership only the $200 per month auto-renewal or $2,000 per 12 months will be available. Future members doing the much more expensive KRO PRO Membership will thus be ones who are interested in my DIY research platform, such as hedge funds and family offices, or resource juniors doing peer research so that they can better design and market their stories. If we do end up in a raging bull market, then there will be lots of momentum chasing retail investors happy to shell out $200 per month during that phase of a bull market when I am a self-fulfilling prophet.

While it could happen in 2025, I think that phase is unlikely until 2026 when Trump has had sufficient time to engineer a new world order that sends gold soaring and spawns a panicked scramble to secure new domestic metal supply. 2025 is a year when Canada should light a fire under its resource sector, but it is crippled by a leadership whose priority is to turn First Nations into an aristocracy in charge of Canada's natural resource potential and import dirty nickel from Indonesia so that mine development in Canada can be avoided. I think it is foolish for Canadians to think Trump is joking when he talks about turning Canada into the fifty-first state because if Trump's policies end up starving America of raw materials it will not take much to send the tanks across the border to secure America's needs.

For now I am recruiting diehard investors who smell that a turnaround is finally a realistic possibility to join what after March 31 will be an exclusive club of $450 grandfathered KRO Individual Members who also participate in our KRO Slack forum which is a type of bottom-fish workshop or incubator. Visit the KRO Membership page to take advantage of this limited time offer.

The shift to a more expensive membership model while grandfathering as an exclusive club individuals who are still in love with the resource junior sector was the plan a year ago and it is now happening. The new thing that I am doing differently is that starting in 2025 only the audio version of Kaiser Watch posted on YouTube will be free. The written KRO Comment and graphics hosted on KRO will end up behind the KRO paywall available only to KRO Individual and PRO members. The last fully free Kaiser Watch Episode will be produced January 3, 2025 to introduce the 20 resource juniors I have selected for the 2025 Favorites Collection. This is a group of Bottom-Fish, Fair and Good Speculative Value resource juniors that cover a wide range of big picture and project specific themes.

The 2025 Bottom-Fish Collection now totals 100 juniors, some of which will also be 2025 Favorites. When I launched the Kaiser Bottom-Fishing Report in 1994 as an independent newsletter the annual collection had 100 members until 2000 when I reduced it to 20 companies because the resource junior sector was in such bad shape it was impossible to find 100 juniors with bottom-crawling charts capable of delivering a sizable comeback rather than a rollback. It is stunning and sad that the 2025 Bottom-Fish Collection has 100 bottom-crawling juniors with tremendous upside potential. The world map graphic shows where the flagship projects of the 2025 Bottom-Fish Collection companies are located. You will observe a distinct bias towards juniors focused on North America. I am avoiding Asia, most of Africa and Europe, and to some degree South America. Australia is a great place for resource juniors, but this Bottom-Fish collection consists mainly of Canadian listed juniors.

None of this tackles the real problem; if the Canadian junior resource sector does not develop younger audiences who understand the slow motion, milestone driven nature of resource junior stories it will die out by the end of this decade. During the past three decades I have developed tools such as the rational speculation model, outcome visualization and story paths to put the upside potential of juniors into meaningful perspective. To target these younger generations I am creating a Kaiser Watch Substack service whose free component called Kaiser Watch General will offer comments about trends and security of supply issues, while the pay to see Kaiser Watch Specific component will consist of company specific comments dealing with the 2025 Favorites and sometimes members of the 2025 Bottom-Fish Collection. This will cost $10 per month on an auto-renewal basis. In addition to the audio KW episodes I will try to create short video episodes posted to YouTube first on an unlisted basis for my KRO member audience to discuss, and, when cleaned up, reposted as public to YouTube.

The challenge is to attract younger audiences by exposing them to an education of how this sector works, and encourage reluctant older generation audiences who have given up to come back. Kaiser Watch Substack will be a free and cheap gateway for them to test the water when things start to turn around.