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Kaiser Media Watch Blog - June 1, 2024 to June 30, 2024


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The KRO Blog is where unrestricted content is posted such as Kaiser Watch, material produced by third parties such as the as Investing News Network, and Metal Investor Forum conference links.


Posted: Jun 26, 2024JK: Kaiser Watch June 26, 2024 with Jim Goddard and John Kaiser
Published: Jun 26, 2024KRO: Kaiser Watch June 26, 2024: What happened Friday at 11:32:21 ET?
Kaiser Watch is a weekly audio show produced by KaiserResearch.com with Jim Goddard and John Kaiser discussing the junior resource sector. The show has three parts: the first is a general topic, the second discusses developments involving the KRO Favorites which as of January 1, 2022 are no longer exclusive to KRO members, and the third is a peek inside the members only KRO Bottom-Fish Workshop. KRO is transitioning into a Do-It-Yourself research platform that covers all Canadian and Australian resource listings and which also features a Bottom-Fish Workshop where John Kaiser highlights juniors with solvable "missing pieces". Companies that graduate from the Workshop may become part of the Annual Favorites collection whose profiles and related commentary are unrestricted for non-members. Visit the KRO Favorites Dashboard for quick access to all the unrestricted Favorites related content. KRO is not sponsored or compensated directly or indirectly by public companies. The business model is based solely on membership fees which have changed for 2024 as a transition to a $200 per month auto renewal program in 2025. During 2024 individuals can register for a KRO membership at a non-refundable price of $450 for a term that expires December 31, 2024. All active KRO members will be grandfathered to renew annually at $450 on Dec 31, 2024. Sign up here for this limited $450 offer. Kaiser Watch is available at Kaiser Research YouTube and as a Podcast downloadable from KaiserResearch.com. Each episode will be made available through the publication of a Kaiser Media Watch blog report which will provide links to specific questions and include supplementary graphics. All episodes will be archived at Kaiser Watch.

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Kaiser Watch June 26, 2024: What happened Friday at 11:32:21 ET?
Jim (0:00:00): Why did TSXV volume on Friday nearly double to over 200 million shares?

On Friday June 21, 2024 at 11:32:21 ET somebody or something liquidated more than 160 positions in resource listings on the TSXV alone through Anonymous within a time window of about 10 seconds. Most people did not notice a surge in trading activity except those who happen to own or watch one of the companies involved in the selling. The TSXV usually posts a file by 4:30 pm PT that includes the day's volume, value traded, number of new highs and lows, and the number of traded stocks that closed up, down or unchanged. That file did not show up until Saturday morning and I was shocked to see that volume had jumped to 209 million on Friday compared to 124 million on Thursday and 83 million shares on Wednesday when US markets were closed for Juneteenth. I also noticed that new lows jumped to 61 companies, a level we have not seen since late September 2022. For the past decade new TSXV lows have ranged 10-20 daily while new highs are generally below 10 companies. Value traded which has been ranging $40-$60 million daily jumped to $77 million from $62 million the day before, an indication that much of the liquidation involved low priced stocks.

What really shocked me, however, was that the volume of TSXV resource listings jumped to 156 million shares from 85 million shares the day before which was 75% of total volume. LBMA gold had dropped $16 the night before but gold has been fluctuating a similar amount in both directions for some time so such a move cannot massively change market sentiment. I was curious if one or two cheap stocks went on a trading binge because I certainly did not notice in the KRO Slack channel postings a shift in positive or negative sentiment.

KRO is an information platform which features all resource companies listed on the TSX, TSXV, CSE and ASX. Every day I generate top 100 lists for each exchange for volume and value traded as well has percentage and absolute price gains or losses. When overall volume spikes these lists are useful to spot which companies are attracting high volume or traded value. Usually when we see a single day spike it is caused by a takeover bid, bankruptcy filing or exceptionally good news which attracts the algo trading machines. I was thus surprised to see that the biggest volume trader on the TSXV was Purepoint Uranium Corp which traded 2,352,000 shares to close unchanged at $0.03. Purepoint is a uranium junior whose last press release was issued on April 29 announcing that it was starting a drill program at its Turnor Lake project in the Athabasca Basin. My data feed only includes trading through the TSXV, not the alternative trading systems, so I checked Stockwatch and saw that 3,550,773 shares of Purepoint had traded when all the ATS are included. That means only 66% of the Purepoint volume went through the TSXV.

Stockwatch has a cool feature called Trade Workstation which allows you to retrieve all the individual trades for a day as well as a "house summary" for a single day or range of days that tabulates how much was bought and sold through each brokerage firm. "Anonymous" is a special feature the exchange allows which hides the identity of the buying or selling firm so that company executives cannot easily figure out which shareholder has given up on the company. I did a trade recall for Purepoint and was stunned to discover that Anonymous unleashed a flurry of trades at 11:32:21 ET that ended 9 seconds later at 11:32:40. I have assembled all the Purepoint trades as a graphic so everybody can see the trading pattern.

During this 10 second window Anonymous sold 2,317,000 shares of which 998,000 were sold through the CX2 and Omega ATS, mostly at the beginning, with 1,319,500 shares sold through the TSXV mainly towards the end. In most cases of all the stocks sold at 11:32:11 the initial selling took place through the alternative trading systems and only in the second half included trades through the TSXV itself. The ATS platforms were allowed decades ago to prevent the stock exchange, which had become a corporation, from enjoying a monopoly in trade execution for its listings. This was supposed to benefit investors but it does no such thing and anybody who claims otherwise is a blatant liar. The system is designed to force every buyer or seller to get the best available price for an order, but it violates the "first come first serve" principle. This is the common sense concept that when a trade takes place at a price, the orders that were placed first into the order book should be filled first. For example, if weeks ago you placed a bid for 100,000 shares of Purepoint at $0.025 when there were no other bids at that price, if somebody decides to sell 100,000 shares at $0.025, for example "hit the bid", you should be the first order filled. In the Purepoint Order Book graphic I have provided as an example you can see that there are 6,538,000 shares bid at $0.025 and 1,420,000 shares offered at $0.03. But note that in addition to the TSXV order book there are 8 ATS order books containing buy orders for 4,276,000 shares at $0.025. Your 100,000 shares in the TSXV order book may be first in line to get filled, but only if the seller's order is funneled through the TSXV.

The problem is that each of these order books have their own fee structure. Some pay the broker for the order, others such as the TSXV charge an extra fee for limit orders that hit the order book with a buy or sell price limit. When I trade a resource junior I always look at the market depth and design my buy or sell price limit to maximize getting most of my order filled in one shot. The TSXV penalizes such orders because it provides maximum satisfaction to investors and reduces the ability of traders to steal this satisfaction so as to line their own pockets. It much prefers investors to post open orders which the algo traders can study and exploit. When a brokerage firm submits your limit order for execution, its computer first does an analysis of the multi-platform order book and calculates which execution path minimizes the fees charged the brokerage firm. The best price principle has to be honored, but the execution of your order will weave a path through the ATS maze that has nothing to do with your interest because you will still be charged the same commission. The brokerage firm pockets the fee saving arising from the selling path. This system sacrifices the first come first principle because even though your 100,000 share order for Purepoint at $0.025 is sitting at the top of the 2,260,000 shares in the TSXV order book, your chance of getting a complete fill from the first 100,000 shares sold at $0.025 since you posted your bid competes with the 4,276,000 shares parked at $0.025 in the 8 other ATS platforms. Ordinary investors submitting passive orders to sell or buy (ie above or below the current bid-ask spread) through a discount brokerage firm cannot specify the order book. To park a bid in the Omega ATS requires a special relationship with the brokerage firm either as an employee or via a representative. This does not exist for retail investors. The entire system is designed to serve the interests of everybody but the retail investor.

There is another complication in order execution courtesy of something called an iceberg order which exists to make it difficult to assess the true depth of the market. An iceberg order is a large order entered into the book at a set price but its existence is invisible. For example, look at Friday's Purepoint trade history which is unusual in that multiple small 1,000 share trades took place simultaneously through Omega and CX2 with the buying done by either National Bank or Anonymous. What is curious is that National Bank ends up buying 1,000 shares at $.03 at the same instant Anonymous buys 1,000 shares at $0.025. All of Thursday's trading took place at $0.03 so I presume that was the Purepoint bid on Friday morning. This peculiar alternating price pattern is only possible if National Bank had an iceberg buy order at $0.03 which showed only a 1,000 share bid that kept being replenished the instant the visible part was filled. So we have the bizarre phenomenon of Purepoint simultaneously trading at $0.025 and $0.03 in small amounts because the seller through Anonymous has unleashed a sell order with a $0.025 limit. The only physical explanation for this is that algo machines were trading with each other. During the remaining 3.5 hours of the Friday trading session only 13 trades totaling 143,683 shares took place.

As an isolated event this is not very interesting because it looks like somebody dumped a position of 2,317,000 Purepoint shares to gross $60,970. And they chose to do it through Anonymous because the seller does not want management to know who gave up on the company. But this was not an isolated event.

I did a trade recall for the top 30 TSXV volume leaders on Friday and discovered that 15 of them underwent a similar selling binge by Anonymous all starting precisely at 11:32:21. I have provided a graphic which lists the top 30 TSXV volume leaders for Friday and tagged those companies which underwent selling by Anonymous at 11:32:21. One of my subscribers noticed that KRO Favorite Solitario Resources Corp which trades on the TSX had a similar but much smaller scale event take place at the same time. I learned that two KRO bottom-fish Endurance Gold Corp and FPX Nickel Corp which did not make the top 100 volume leader list underwent similar "Anonymous" sales that in the case of Endurance knocked the stock down to $0.10. On Saturday people were posting on social media that there had been a mini "flash crash" on the TSXV involving 60-80 companies attributed to a rogue algo program. This aroused my curiosity about how widespread this 11:32:21 liquidation event might be.

This week I used the KRO Search Engine to display all the TSXV resource listings which I walked through looking for a dangling price bar in the short term chart or a single day volume spike. That is how I discovered relatively illiquid juniors like Trailbreaker Resources Ltd which had closed at $0.46 on Thursday but dropped to $0.33 on Friday before bouncing back to close down $0.025 at $0.435. I have provided screen shots for the Endurance and Trailbreaker search result display to illustrate the chart anomaly.

By the time I had gone through the entire list of 1,157 TSXV resource listings I had confirmed 162 with trading that started in most cases at 11:32:21 ET though in some a little later but in most cases was finished within 10 seconds. This investigation involved using the Stockwatch Trade Workstation to do a Friday trade recall, which was a tedious process that took most of the day. However 95% of those stocks which met my visual cue exhibited Anonymous selling at 11:32:21 or thereabouts. In most cases the amounts sold were small compared to the ones that saw millions of shares sold below $0.10. I have heard that there was parallel activity in the OTC BB market for some of the stocks. I suspect that if one looked at the juniors listed on the TSX and the CSE the total number of companies involved exceeds 200 companies. I have provided a list of these companies and encourage company executives to examine the trading in their stock on Friday and start asking questions. If anybody discovers other juniors with the 11:32:21 Anonymous selling pattern, please send their names to me at [email protected].

I know the management of some companies such as Endurance which thinks it knows roughly who owns its stock has been fretting all year by Anonymous selling activity biased toward the downside. The identity of the seller remains a mystery. It is impossible for a human trader to have executed Friday's trades simultaneously. A lot of effort will have been spent to queue up an algo program plugged directly into the TSXV order execution system and unleashing the selling all at the same time. It was probably done on behalf of a "whale" whose overly diversified resource junior portfolio needed to be liquidated, a portfolio so large it doubled TSXV resource listing volume on Friday June 21, 2024. And it was unleashed all at once with the push of a start button, probably to prevent all the other algo traders lurking in the TSXV order books from realizing a massive liquidation event was underway and taking evasive action. In that regard it worked. Most industry people I talked to this week had no clue this took place on Friday. It is worrisome that somebody gave up on the resource juniors in such a big way but what truly frightens me is the evidence this liquidation event provides about what can be done with TSXV resource juniors using algo programs increasingly being adapted to AI generated strategies.

Purepoint Uranium Corp (PTU-V)






Unrated Spec Value
Turnor Lake Canada - Saskatchewan 2-Target Drilling U
Endurance Gold Corp (EDG-V)






Bottom-Fish Spec Value
Reliance Canada - British Columbia 3-Discovery Delineation Au
Trailbreaker Resources Ltd (TBK-V)






Unrated Spec Value
Liberty Canada - British Columbia 2-Target Drilling Cu Mo

Friday June 21, 2024 TSXV Volume Leaders

Trade History for Purepoint on June 21, 2024

Example of Purepoint Order Book showing ATS platforms

Examples of Friday's mini Flash Crashes - Endurance and Trailbreaker

List of 162 TSXV resource listings Anonymous dumped at 11:32:11 ET on June 21, 2024

Trade History for Endurance Gold on June 21, 2024
Jim (0:09:45): Do you think this was a fund liquidating a portfolio, such as a flow-through fund?

When I first recognized the 11:32:21 ET liquidation event pattern my first suspicion was that it was one of the flow-through funds liquidating its portfolio early. Most flow-through funds provide financing during the last quarter of the year. In one case involving Marquest there is a fund liquidation deadline, usually the end of October, where fund holders can elect to receive their pro-rata share of the fund as either cash or stock. Last year we saw a lot of fund holders elect to receive cash, which means the fund manager has to dump that pro-rata share of stock by the deadline. Last year was a miserable year for Canadian resource juniors because of the widespread forest fires that shut down exploration in many areas, especially the critical James Bay region of Quebec where a massive "boots on the ground" prospecting campaign was supposed to look for lithium pegmatites similar to the CV5 pegmatite Patriot Battery Metals had delineated on its Corvette property. By H2 of 2023 the resource sector had collapsed into a deep funk, so flow-through fund investors elected to redeem their stake as cash. The Friday 11:32:21 selling, however, involving at least 162 resource juniors, included a large number of juniors with flagship projects outside of Canada and which would not have been inside a flow-through fund.

It is possible that Anonymous was selling for an institutional fund focused on the resource sector which has decided to give up on the resource sector, and in particular in the resource juniors which have lost their retail audience, face a hostile regulatory regime and a predatory financial establishment, are being squeezed out by resource nationalism and corruption in Global South countries such as Mexico, and in Global West nations face a hostile permitting blockade through First Nations or NIMBY lobbies encouraged by federal governments which do not perceive the existential threat democracy faces. However, there is no rhyme or reason to the mix of companies that were sold at 11:32:21. Some are very obscure companies that even I do not know anything about and some are financially challenged juniors. Furthermore, it is unlikely that a professional fund manager would have bought millions of shares in stock trading below $0.10 because their story has largely failed to deliver. The TSXV resource listings that made the top 30 volume leaders were probably bought at cheap prices which a professional fund manager would not have done. Furthermore, only 15,300 shares of Solitario were sold via the TSX at 11:32:21. A resource fund would not own such a small amount of Solitario and so much stock in weak juniors. The makeup of the liquidated portfolio suggests the owner was a wealthy individual who bought resource juniors more for entertainment than making money. It would not surprise if the liquidation event was done on behalf of a deceased person's estate.

Jim (0:12:00): Could this liquidation event have something to do with the capital gains tax change in Canada?

On May 17, 2024 Canada's Prime Minister came up with the bright idea of making a capital gains tax grab targeting wealthier individuals. There was unusual trading activity on the TSX which appears to be related to the new capital gains tax regime in Canada which took effect on June 25. Friday June 21 was thus the last chance to make any adjustments. Prior to June 25 Canadian residents calculated their net capital gains from stock transactions and if the amount was positive, added 50% to their income where it would be taxed at the individual's marginal tax rate. This marginal tax rate is progressive, increasing with higher amounts of income. This is different from the United States where capital gains are taxed at specific rates based on whether it was long term or short term (held for less than a year). The higher a Canadian's income, the bigger a chunk of their capital gains he or she would lose to taxes. Under the new system the 50% number will remain the same for individuals on the first $250,000 capital gains, but any amount above that will require 67% to be taxed at the marginal rate. For your average retail investor this change is largely inconsequential, especially ones who speculate in resource juniors. It is interesting to note that shortly after the tax change announcement in May the uptrend Patriot Battery Metals had developed after a rough start for the year abruptly reversed and the stock last week briefly traded below $5. Part of that is due to the funk in the lithium and EV space, but it is also the case that PMET was a windfall score for many investors who bought below $1. Not all of them unloaded their entire position last year because it is a world class lithium discovery that will play an important role in future lithium supply. But, faced with the double whammy of a hostile EV sector drumbeat and capital gains beyond $250,000 suddenly shifting from 50% taxable as income to 67% taxable income, many of those original PMET investors have likely been selling their positions since mid May.

The change, however, is very important for corporations and trusts because after Friday all capital gains will be 67% taxable. In Canada there is something called the 21 year rule for trusts which requires that every 21 years after setting up a trust the assets of the trust are deemed to have undergone a disposition at market value, which generates a capital gain liability. In Canada the 21 year rule does not apply to alter ego and joint partner trusts. An alter ego trust can only be created for an individual aged 65 or older and is only for the benefit of that individual until that person's death, at which point a deemed disposition happens at market value, and the post tax proceeds are distributed to the named beneficiaries without going through probate. In a joint partner trust this only happens when the surviving spouse passes away. Since the announcement of the Canadian capital gains tax change trusts have been busy capturing capital gains so that only 50% gets taxed. This is important for trusts approaching the 21 year mark. Although senior equity markets remain near record highs, the potential for a crash after the US election in November is quite high given Trump's assertion that any election outcome not in his favor means the election was rigged.

It is possible that Friday's 11:32:21 selling activity involved a trust liquidating a resource portfolio that had a large overall implied capital gain, though with some of the stocks dumped on Friday that is hard to imagine. However, we may not be seeing everything that was liquidated which could include more senior equities that were in the money. Many of these resource junior stocks are dogs that probably represent losses for the owner. You would save those to offset future winners. However, if you are selling winners you still have to pay tax on 50% of the gains. So if you want to minimize your taxes due in April 2025 you would sell all your losers too. The fact that the selling started at 11:32:21 in so many stocks means that it was a single entity whose trustee chose to set up liquidation at the same time so that the market did not have a chance to get spooked. This was not an algo mistake, it was a planned liquidation most likely related to the capital gains change in Canada. A depressing alternative explanation is that some wealthy investor gave up on the future of the Canadian resource junior eco-system.

Patriot Battery Metals Corp (PMET-T)





Favorite
Fair Spec Value
Corvette Canada - Quebec 4-Infill & Metallurgy Li
Jim (0:16:03): Do you think this trading could have been caused by an out of control rogue algo program?

Social media speculated on Saturday morning that an algo program, possibly driven by some sort of AI generated strategy, spun out of control and caused these mini-flash crashes in 160 plus resource junior stocks. During the early years of electronic order execution there was a problem of "fat finger" trades where a human trader accidentally entered a market sell order that would clean out all the bids in the order book. The large scale of the 11:32:21 liquidation event would have take a lot of planning to set up, and the pushing the start button would not have been a human fat finger event.

Over the weekend some people speculated that if it was a rogue algo program that "unintentionally" sold a portfolio of stocks the account did not actually own, for example, a naked short sale into the market involving more than 160 resource juniors, many trading below a dime, and that there should be a short covering scramble on Monday. On Monday trading volumes were back to normal and have declined further as the week progressed. If this trade was indeed an accident that sold non-existent positions the TSXV would likely have canceled the trades. It is also unlikely that that an AI assisted algo program deliberately sold short these positions. None of these stocks is eligible for margin and a brokerage firm can only lend shares if they are in a margin account or in a cash account that is overdue. Trade settlement is now the next day and nobody gets to buy stock anymore with the promise to mail a check or wire money. The simplest explanation for Friday's mass liquidation event at 11:32:11 ET is that an individual with a very large portfolio of random resource juniors decided to dump it and got a brokerage firm to set it up before anybody had a chance to sniff out a whale with a need or desire to liquidate.

What I do find troublesome is how easy it was for this mass liquidation event to be pulled off. If this can be set up for a real portfolio of juniors, why not a theoretical portfolio? Suppose senior equity markets begin to crack. Canada's algo traders could be positioned to crush the markets of all the resource junior listings. Thanks to the ATS platforms the down-tick rule for short-selling has been eliminated and cannot be reinstated. The reason is that with orders flowing through multiple order execution platforms it is impossible to have an absolute time stamp that establishes whether the last executed trade was higher or lower than the last different trade. When trading accounts sell naked shorts on a down-tick they simply need to "intend" to borrow the stock for next day's settlement. But if they cover the short position by the end of the day that borrowing requirement evaporates. In the case of a market crash there will be no incoming capital to buy resource juniors at "bargain" prices so the algo traders will end up with naked short positions carrying over to the next day. But dealing with that will be the least of the financial establishment's problems and so this problem will be left to resolve itself in the weeks after the crash.

The lesson we should draw from the Friday mass liquidation event is how easy it is for computer based trading strategies to be executed in the resource junior market. The biggest threat to the resource junior eco-system is the asymmetry between retail investors and these professional computer-assisted traders. A retail investor has to think about a junior's potential outcome and what the latest results news release means. The algo traders simply need to notice that there is buying activity by retail investors. Usually it is the promoters, brokers and hidden insiders who fill the boots of retail investors but now they face formidable competition from algo traders backed by bank capital who can sell non-existent stock into the bids, and when the incoming retail buy orders dry up, lean into the order book just as Anonymous did on Friday, this time selling more paper the account does not own until the longs despair and unwind their positions by the end of the day, enabling the algo traders to cover their naked shorts without ever borrowing stock. This giant vampire squid backed by the Canadian financial establishment harvests incoming risk capital and prevents the market from functioning as a price discovery mechanism for resource junior projects. The Canadian resource junior eco-system is dead by the end of the decade unless this asymmetry on so money fronts is changed.

Disclosure: JK owns shares of Endurance Gold; Patriot Battery is a Fair Spec Value rated Favorite; Endurance is Bottom-Fish spec value rated

Posted: Jun 21, 2024JK: Kaiser Watch June 21, 2024 with Jim Goddard and John Kaiser
Published: Jun 21, 2024KRO: Kaiser Watch June 21, 2024: Investor Patience running on empty
Kaiser Watch is a weekly audio show produced by KaiserResearch.com with Jim Goddard and John Kaiser discussing the junior resource sector. The show has three parts: the first is a general topic, the second discusses developments involving the KRO Favorites which as of January 1, 2022 are no longer exclusive to KRO members, and the third is a peek inside the members only KRO Bottom-Fish Workshop. KRO is transitioning into a Do-It-Yourself research platform that covers all Canadian and Australian resource listings and which also features a Bottom-Fish Workshop where John Kaiser highlights juniors with solvable "missing pieces". Companies that graduate from the Workshop may become part of the Annual Favorites collection whose profiles and related commentary are unrestricted for non-members. Visit the KRO Favorites Dashboard for quick access to all the unrestricted Favorites related content. KRO is not sponsored or compensated directly or indirectly by public companies. The business model is based solely on membership fees which have changed for 2024 as a transition to a $200 per month auto renewal program in 2025. During 2024 individuals can register for a KRO membership at a non-refundable price of $450 for a term that expires December 31, 2024. All active KRO members will be grandfathered to renew annually at $450 on Dec 31, 2024. Sign up here for this limited $450 offer. Kaiser Watch is available at Kaiser Research YouTube and as a Podcast downloadable from KaiserResearch.com. Each episode will be made available through the publication of a Kaiser Media Watch blog report which will provide links to specific questions and include supplementary graphics. All episodes will be archived at Kaiser Watch.

Podcast Download

Kaiser Watch June 21, 2024: Investor patience running on empty
Jim (0:00:00): What do the latest financing activity statistics tell you about the resource juniors?

The monthly TSXV review which is usually released in the middle of the next month contains detailed information about financings done by its listings. Since 2002 I have been harvesting this information from the pdf file and converting it into a database format which allows me to match the financings with a company and tag them as "discovery exploration" or "feasibility demonstration" based on the stage of the flagship project. These financings are tabulated in the capital section of each KRO Company Profile and also show up in my custom stock charts as a $ sign scaled to a value range into which the financing's value falls. The first three charts contrast the split between capital raised by resource and non-resource TSXV listings in each month for the periods 2002-2024, 2009-2024 and 2019-2024. These charts also show the value traded monthly by these two groups starting in 2009 (I did not start separating daily traded value until 2009 so the earlier pink line is for all TSXV listings). The fourth graphic is an example of the information the TSXV publishes in its monthly. What these charts reveal is that there is a close correlation between monthly resource listing traded value and financing activity. The same cannot be said for non-resource listings which had three major traded value spikes since 2016 linked to crypto and cannabis which greatly exceeded the level of financing activity for non-resource listings. This can only happen when there is intense retail participation in the market. The glum conclusion is that the TSXV resource listings during the past decade have not attracted bubble like retail participation, even during the second half of 2020 when gold breached $2,000: financing activity mainly into 4 month restricted private placements managed to exceed monthly traded value of TSXV resource listings!

In May 2024 $224 million was raised through private placements compared to $261 million in May 2023, and $53 million through SOM compared to $97 million in May 2023. The TSXV resource listings have been stuck in a financing drought since Q2 of 2022.

The goal today is to look at the monthly charts spanning 2019-2024 to watch for early signs of a turnaround. May financing activity was better than in April but below the levels we saw in H1 of 2023 though still above the abyss suffered by resource juniors during H2 of 2023. However, H1 2024 levels are still better than what they were in 2019, and most importantly, TSXV resource listing traded value is persistently well above monthly non-resource listing traded value.

The next pair of charts show the split between hard dollar and flow-thru financing activity, the first showing the relative monthly value and the second the relative number of financings. Flow-thru value for May is unusually low and should be higher as juniors prepare for summer exploration activity in Canada. Last year spending FT dollars became problematic after so many areas were shut down by forest fires and emergency requisition of support equipment such as helicopters. Also crimping interest in flow-thru could be the higher capital gains tax regime which took effect on June 25. For Canadian individuals any capital gains below $250,000 will continue to be taxable on the basis of 50% taxed at the individual's marginal tax rate (this is different from the United States where capital gains are taxed at set rates based on long term (held for more than a year) or short term). So your typical retail investor who still cares about resource juniors has almost nothing to worry about with regard to the tax change.

The problem arises when the individual is a high net worth sophisticated investor who typically has moved investment assets into a trust such as an alter ego trust (for the benefit of the individual until death) or a joint partner trust (for the benefit of both spouses). These are not created to escape taxation but rather to avoid probate upon death so that the assets can pass quickly to the designated beneficiaries. The bad news is that all gains within a Canadian trust will be 67% taxable. Under flow-thru rules the cost base becomes zero so whatever the trust can get from selling flow-thru stock will be taxable. Flow-thru financing from wealthy investors may be harder to raise going forward, which may not be a bad thing for resource juniors because such investors are often just pursuing a tax deferral strategy and could not care less about fundamental outcomes because they liquidate as soon as possible.

Since the start of 2024 I have been generating a new type of financing chart which breaks down monthly financing activity into value and price ranges. The next 2 charts are based on financing value range which show the total value raised for each range and the # of financings in each value range. The second pair show the value and # for each price range. These charts are fairly noisy but what I can see is that value is going mainly into $1 million plus financings, and that about 60% of the value is being done in the $0.20-$1.00 range with very little at higher prices.

The # of financings below $0.10 has surged though not as badly as in January 2024. Financings below $0.05 are only allowed in conjunction with a rollback or with a pity waiver from the TSXV. The final chart in this batch shows the # per price range as percentages which allows us to see that we are still trending toward the high percentages for below $0.10 financings we saw in 2019. The totsl amount raised below $0.10 is not much but the growing number of such financings tells us that juniors are doing small financings to keep the lights on without doing anything to create new wealth. We are now in the second decade of a secular bear market for Canadian resource juniors that began in 2012 and this Canadian institution is on track for extinction by the end of the decade. My own bottom-fishing strategy is to identify the serious juniors focused on hitting it out of the park with a discovery before the lights go out for the sector.

The final chart is from 2002-2024 and breaks down the value raised and # done by companies with a flagship project that is either a discovery exploration play or a feasibility demonstration play (ie 43-101 resource exists). From 2002 the value raised each month for feasibility demonstration plays has generally exceeded that raised for discovery exploration, but in 2020 this relationship reversed and discovery plays have since dominated the TSXV in terms of value raised.

Why has this happened? Money for feasibility demonstration plays tends to come from institutional investors, a group that has withdrawn from the resource juniors. Although key metals such as copper and gold are near recent record highs, what attracts institutional money are substantial real metal price changes which drag marginal deposits into the money, and which are structural changes that make the higher levels sticky, such as the China super-cycle scaling up the global economy.

In my view the supply disruption looming from an escalating conflict between Global East and West is a reason to expect sharply higher real prices, but this will not happen until metal from Global East jurisdictions can no longer be delivered to the Global West and the market bifurcates into separate trading systems that cannot be arbitraged. But for that to happen global trade between China and the Global West needs to collapse, and that will not voluntarily happen because most stuff is still made in China with monster inflation implications should that supply be cut off.

The energy transition's extra metal requirements, and that of the AI boom, should also drive prices higher, but that prospect is insufficient to cause Canada to set aside UNDRIP obstruction and the United States its NIMBY lobby. I am afraid that the only thing that will bring the resource juniors back to life is a global war which injects extreme urgency and necessity into the goal of finding and mobilizing metal supply in secure jurisdictions.

It shocks me that very few people seem to be aware of the chart I have created that shows the relative supply of metal and energy commodities by Global West, East and South nations. This chart shows a frightening vulnerability for the richest nations in the world still clinging to democracy. The problem becomes even worse if Global West nations collapse into autocracies feuding with each other.

Because gold is not essential but "critical" metals, which will include all metals except gold when the Global West-East conflict becomes hot, will be given permitting priority, the best way to play gold will be either high reward discovery plays like Solitario's Golden Crest in South Dakota, or copper projects with a gold credit, which can be VMS or porphyry plays.

In the case of Solitario Resources Corp we are still waiting for confirmation that the USFS and other government agencies have signed off on the drill permit and has requested bond payments that will allow Solitario to mobilize a drill rig (addendum: on June 24 Solitario announced that this has happened and that drilling will begin in July). In the case of PJX Resources Inc we are also still waiting for a modification of an existing drill permit because so many different groups need to be consulted. On the plus side, a reason it is taking so long is that the modified permit application will allow PJX to drill key target areas for several years without further modifications if drilling at Dewdney Trail in southeast British Columbia delivers either a zinc-lead-silver SEDEX or copper-gold intrusion related discovery. As I discussed last week, Arizona Gold & Silver Inc did recently get a drill permit for two pads from the BLM for the Philadelphia project. But the junior also cannot start drilling until July because somebody at the BLM decided that they forgot to check the drill pad locations for the presence of a gopher tortoise, also known as a "burrowing tortoise". All three companies are KRO Favorites because they are potential high reward discovery exploration plays that will attract speculators once a discovery is made regardless what metal prices are doing. But the market's patience with these consulting and permitting requirements is running on empty.

Solitario Resources Corp (SLR-T)





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Fair Spec Value
Golden Crest United States - South Dakota 2-Target Drilling Au
PJX Resources Inc (PJX-V)






Fair Spec Value
Dewdney Trail Canada - British Columbia 2-Target Drilling Zn Pb Ag
Arizona Gold & Silver Inc (AZS-V)





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Fair Spec Value
Philadelphia United States - Arizona 3-Discovery Delineation Au Ag

Resource and Non-Resource monthly financing and traded value activity 2002-2024

Resource and Non-Resource monthly financing and traded value activity 2009-2024

Resource and Non-Resource monthly financing and traded value activity 2019-2024

Example of financial information published in the monthly TSXV Review

Monthly Value of TSXV financing activity hard dollar vs flow-thru

Monthly # of TSXV financings hard dollar vs flow-thru

2019-2024 Monthly Value of TSXV financings based on value ranges

2019-2024 Monthly # of TSXV financings based on value ranges

2019-2024 Monthly Value based on Financing Price Range

2019-2024 Monthly # of TSXV financings based on price ranges

Monthly # of financings based on price range presented as % of total #

2019-2024 relative value raised by financings with and without warrants

2019-2024 relative # of financings with and without warrants

2019-2024 monthly value of no warrant financings based on price range

2019-2024 monthly value of warrant financings based on price range

Global West Vilnerability to Raw Material Supply
Jim (0:14:41): Why did Hercules Silver slump after its recent update?

On June 20, 2024 Hercules Silver Inc. soon to be renamed Hercules Metals Corp, provided a drill progress update that did not include any assays but which did reveal that the first 3 holes drilled to the northwest of last year's holes are unlikely to deliver any joy. Based on the geological description these holes intersected the lithocap from the upper part of a porphyry system which seems to have been fault offset from the primary mineralization. The current understanding is that the high grade zinc-lead-silver vein mineralization is hosted by an "Upper Plate" that has been thrust faulted in a southeast direction over the "Lower Plate" which hosts a copper porphyry system whose high grade underground mineable potential was revealed by last summer's 23-5 discovery hole. It is believed that the silver veins formed peripherally to the porphyry system but were later pushed on top by a thrust fault, making the copper system blind except for copper "smoke" in an exposed "Lower Plate" window farther to the southeast. The goal is to test the Lower Plate host of the copper system beneath the thrust faulted Upper Plate that hosts the high grade zinc-lead-silver veins that were the historical focus of the Hercules project in Idaho.

Last year's drilling focused on both the historical vein system as well as a large IP chargeability high detected within the Lower Plate by a Dias 3D IP survey. The discovery hole attracted a $23 million financing from Barrick Gold at a premium to market while assays were still pending for additional deep Lower Plate holes which failed to repeat the high copper grades. The 3D IP survey was expanded and revealed the system is much larger than initially thought and the goal now is to find the high grade copper heart of the system. If I am not mistaken the company has not published an updated version of the IP anomaly. The Hercules copper discovery last year kicked off a staking binge by majors who realized that a large area with a thin veneer of younger flood basalts is prospective for major copper systems, essentially a blind virgin exploration frontier.

Drilling through the Upper Plate has been painfully slow, and, given that drilling started on May 6 with three rigs, it is disappointing that only 5 holes for 3,000 m have been completed (#1-4 and #7). Hercules published a map showing the 5 completed holes, the 2 in progress and three more proposed holes. The news release included a satellite plan map with the hole locations. I have added the hole locations and drill traces onto a similar scale map from their June presentation which shows the IP chargeability anomaly and copper-moly soil sample values. Hole #7 is a 1 km stepout along the IP trend to the south which never made it into the Lower Plate because of high water pressure from the aquiver which appears to be charged up more than last year year due to a very wet winter. This hole is beyond the geology map on which I have super-imposed the new and proposed hole locations.

Holes 5 and 6 are in progress, with #5 reaching the Lower Plate only last week. These holes are important because they are not in the vicinity of last year's holes. The third rig is being moved to pad #8 and seems designed to test for the offset primary mineralization missed in the first three holes. Holes #8-#10 will try to establish an inferred NE-SW structural control. The company has $24 million working capital provided mainly by Barrick Gold and hopes to complete the remaining 17,000 m of a 20,000 drill program by the end of the year. The stock slumped because the market hoped to hear early on that the company has figured out the geometry of the high grade core of this large system so that the rest of the season is one of delineating a major deposit. As it now stands Hercules, which will shortly be renamed Hercules Metals Corp, is still vectoring in on this target, which in a glass-half-full market shifts expectations to failure. The market's patience with regard to discovery confirmation is also running on empty.

(On Friday June 21, 2024 Hercules temporarily slumped even lower due to a large scale portfolio liquidation event that started at 11:32:21 ET and involved dozens of TSXV resource listings and even some TSX listed resource juniors which doubled TSXV resource listing traded volume and bumped new lows to 61 compared to the usual range of 10-20 new lows each day - new highs are typically below 10. I am still trying to figure out the nature of and reason for this liquidation event for the next KW episode.)

Hercules Silver Corp (BIG-V)





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Hercules United States - Idaho 3-Discovery Delineation Cu Mo Ag

Drill Plans for Hercules 2024 program

Plan View Maps of IP Chargeability and Soil Geochemistry
Disclosure: JK owns shares of PJX and Solitario; Arizona Gold, Hercules, PJX and Solitario are Fair Spec Value rated Favorites

Posted: Jun 14, 2024JK: Kaiser Watch June 14, 2024 with Jim Goddard and John Kaiser
Published: Jun 14, 2024KRO: Kaiser Watch June 14, 2024: BLM grants lomg-awaited permit
Kaiser Watch is a weekly audio show produced by KaiserResearch.com with Jim Goddard and John Kaiser discussing the junior resource sector. The show has three parts: the first is a general topic, the second discusses developments involving the KRO Favorites which as of January 1, 2022 are no longer exclusive to KRO members, and the third is a peek inside the members only KRO Bottom-Fish Workshop. KRO is transitioning into a Do-It-Yourself research platform that covers all Canadian and Australian resource listings and which also features a Bottom-Fish Workshop where John Kaiser highlights juniors with solvable "missing pieces". Companies that graduate from the Workshop may become part of the Annual Favorites collection whose profiles and related commentary are unrestricted for non-members. Visit the KRO Favorites Dashboard for quick access to all the unrestricted Favorites related content. KRO is not sponsored or compensated directly or indirectly by public companies. The business model is based solely on membership fees which have changed for 2024 as a transition to a $200 per month auto renewal program in 2025. During 2024 individuals can register for a KRO membership at a non-refundable price of $450 for a term that expires December 31, 2024. All active KRO members will be grandfathered to renew annually at $450 on Dec 31, 2024. Sign up here for this limited $450 offer. Kaiser Watch is available at Kaiser Research YouTube and as a Podcast downloadable from KaiserResearch.com. Each episode will be made available through the publication of a Kaiser Media Watch blog report which will provide links to specific questions and include supplementary graphics. All episodes will be archived at Kaiser Watch.

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Kaiser Watch June 14, 2024: BLM grants a long-awaited permit
Jim (0:00:00): Why is Patriot Battery Metals declining despite good results for the CV3 pegmatite?

Patriot Battery Metals Corp announced on June 10 a drilling update for its CV13 pegmatite where the Vega zone has emerged as a thick and rich target. The company predicts it will have an updated resource estimate in Q3 of 2024 for both CV5 and the new CV13 pegmatite. On May 30 PMET closed a $75 million financing of 5,159,959 flow-through shares at $14.54 per share. The charity nature of the financing meant that serious investors in Canada and the United States bought stock in the $7-$8 range. The scale of PMET's Corvette project is already world class and growing, and now that the project is funded through feasibility, why did the stock tank on Friday $0.57 to $6.08?

Lithium carbonate prices which were hovering in the $6.60-$6.70/lb range are breaking down and closed at $6.16 on Friday. Albemarle's stock price closed at $103.79, a level not seen since late 2020 when the lithium winter ended as Trump lost the election to Biden. The energy transition cycle that characterized the Biden term is being unwound. The United States has imposed 100% tariffs on Chinese EV imports and Europe has imposed a 38% tariff to product their domestic carmakers. Nearly half of China's new car sales are EVs and China has production overcapacity. Its cars may not have the range and charge time western consumers want, but they are much cheaper than comparable western offerings. The EV sector is being put on pause to allow Global West carmakers to catch up, which means a supply-demand imbalance will afflict lithium producers and developers with a lithium winter similar to 2018-2020 when Australian hardrock pegmatite supply mobilization overshot EV sector growth.

Compounding the situation is the growing sentiment that Trump will win in November and usher in the Heritage Foundations blueprint for an autocracy with theocratic overtones. For some reason that does not make a lot of sense right wing populism is in love with fossil fuels. Once Trump is in power Ukraine will be handed over to Putin's Russia. At the same time the ascendancy of European right-wingers will shift Europe into the orbit of Russian autocracy. Since Russia's power flows from natural gas and oil, the energy transition policies of Europe will be flushed down the toilet and EVs will be ostracized. Russia itself would like to break its umbilical link with China which eyes Russia's resources. In the United States the "drill-baby-drill" anthem will soar and the United States will be flooded with cheap oil and gas, making the case for expensive EVs difficult, especially if competing EV electricity demand will impede the AI machine's pursuit of the immortality cure desired by America's elites. Note that this is the complete opposite rationale for cheap oil predicted by the IEA, which thinks that EVs will displace ICE cars.

The supreme court will rule that climate change is an act of God and that if America stops separating state from church and establishes a Christian theocracy God will reverse the negative consequences of climate change. When God fails to intervene and Florida gets trashed by hurricanes and a rising sea level while Texas bakes so much airplanes can no longer land on the tarmac, the hunt to round up the sinners responsible for God's absence will escalate. With the help of hyper-surveillance such as already practiced in China Plato's "Republic" will finally become reality as a MagaLand where "freedom" is merely a cudgel to strip people of their freedom and subordinate them to the wisdom of the philosopher-kings. Given the "inevitability" that Trump will be the next president and Putin the Lord of Europe, what future is there for lithium other than what Chine needs for its domestic transportation sector? All this sounds really outlandish, but it is time for people who understand what freedom really means to wake up an beware the people in whose vocabulary "freedom" frequently crops up.

Patriot Battery Metals Corp (PMET-T)





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Corvette Canada - Quebec 4-Infill & Metallurgy Li

Charts for Lithium Carbionate and Albemarle

Drill Plan for CV13 Pegmatite

Section for Vega Zone within CV13 Pegmatite

Corvette Map showing CV13 and CV5 Pegmatites
Jim (0:04:37): Has Brunswick figured out yet what it plans for this summer?

Brunswick Exploration Inc published on June 13 an update about its summer 2024 plans that should have accompanied the prior week's Mirage final results news release. It is too little and too late; the market was unimpressed and the stock continued to sink. Some of it is due to the funk afflicting the lithium sector, but a large part is due to Brunswick's weakly thought out messaging. We did find out that 6 holes were drilled into the Elrond target with marginal visual results not expected to assay ore grade intervals. That probably means Brunswick will drop the critical mineral rights it optioned from Midland Exploration Ltd. Although Brunswick briefly mentions it will have a drill program at Mirage on the MR6 dyke and acknowledges that hole #60 to the northeast on the Osisko inlier claim is worth following up, the main message for 2024 is that Brunswick will have boots on the ground prospecting pegmatite targets on its vast holdings in Quebec. It is as if we are back in 2022 when the story was that lithium demand was going to explode during the next decade and historically ignored Canadian pegmatites could become a major solution to the looming supply problem.

At Mirage Brunswick has now sent the "missing" holes for geochemical assays in the hope this will reveal lithium alteration haloes of nearby enriched pegmatites. The Mirage section of the web site now has links to pdfs with all the 2024 collar descriptions and hole intervals, but the assay table still spells "length" as "lenght" like none of those people with their snouts in the $300,000 monthly overhead trough could be bothered to proof read anything. Similarly, nobody has noticed that when you click on a 2024 news release, the sidebar tagged "recent news" only lists news releases from 2023 as if Brunswick is living in the past. And, of course, there is still no new drill plan with all the holes labeled as if each shareholder is supposed to take those two pdf tables and construct their own drill plan. Furthermore, there is no updated presentation available on the web site and no maps showing the location of the new projects they have acquired in Quebec and Greenland, just pages for the projects in Ontario, Atlantic Canada and Saskatchewan killed last year.

The only reason I still own Brunswick is that 2024 will see a very focused prospecting program at Mirage which will include till sampling to sort out the origin of the 3 km spodumene enriched boulder train that is not explained by any pegmatite so far drilled or outcrop sampled. The are also going to do serious prospecting at Anatacau where last year they found an LCT-type outcropping pegmatite. The Osisko options were very expensive and they need to kill any lithium potential as they appear to have done with the Plex claim group. The only reason I can come up with for the strange messaging is that something is going on behind the scenes that will result in a new lithium company. At a minimum the bloated overhead has to be slashed because it alone will use up all remaining hard dollars.

Brunswick Exploration Inc (BRW-V)





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Fair Spec Value
Mirage Canada - Quebec 3-Discovery Delineation Li

Example of Brunswiick's lack of interest in its shareholders
Jim (0:07:53): Any new developments with Arizona Gold and its Philadelphia project in Arizona?

Arizona Gold & Silver Inc announced on June 5 that the BLM had issued a Record of Decision confirming its FONSI (finding of no significant impact) for the drill program the junior has proposed for its Philadelphia project in southern Arizona. The market reacted with modest enthusiasm because the Canadian junior resource eco-system has resumed its march to extinction by the end of the decade. The market does not care that gold is trading in the $2,300-$2,400 per oz range, it just responds with a new round of selling every time gold drops $20-$30. A secular gold bull market for resource juniors is still a fading dream. This means speculators who like the resource sector have to focus on exploration plays capable of making a major discovery that reprices the company substantially upwards. That means not just having a target supported by a good deposit model, but also permission to make or break this target. In Canada the obstacle to doing anything on a timely basis is the UNDRIP requirement to consult the many First Nations claiming territorial jurisdiction over an exploration target. In the United States it involves getting the BLM and USFS to set aside their enslavement to the NIMBY lobby which wants all metals to come from autocracies without considering that if the United States becomes an autocracy, NIMBY is history, and their Donate Now buttons will soon become part of the no-click Internet wasteland. Arizona Gold has approval for two drill pads from each of which it can fan 20 holes to test the Red Hill bulk tonnage hypothesis and the down dip potential of the Philadelphia vein.

Arizona Gold & Silver Inc (AZS-V)





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Philadelphia United States - Arizona 3-Discovery Delineation Au Ag

Piladelphia Drill Pad Locaitions and Planned Holes

Section of Red Hill Target Model at Philadellphia

CSMAT Section of Red Hill Target Area
Disclosure: JK owns shares of Brunswick; Arizona Gold, Brunswick, and Patriot Battery are Fair Spec Value brated Favorites

Posted: Jun 5, 2024JK: Kaiser Watch June 5, 2024 with Jim Goddard and John Kaiser
Published: Jun 5, 2024KRO: Kaiser Watch June 5, 2024: What is a world class mirage worth?
Kaiser Watch is a weekly audio show produced by KaiserResearch.com with Jim Goddard and John Kaiser discussing the junior resource sector. The show has three parts: the first is a general topic, the second discusses developments involving the KRO Favorites which as of January 1, 2022 are no longer exclusive to KRO members, and the third is a peek inside the members only KRO Bottom-Fish Workshop. KRO is transitioning into a Do-It-Yourself research platform that covers all Canadian and Australian resource listings and which also features a Bottom-Fish Workshop where John Kaiser highlights juniors with solvable "missing pieces". Companies that graduate from the Workshop may become part of the Annual Favorites collection whose profiles and related commentary are unrestricted for non-members. Visit the KRO Favorites Dashboard for quick access to all the unrestricted Favorites related content. KRO is not sponsored or compensated directly or indirectly by public companies. The business model is based solely on membership fees which have changed for 2024 as a transition to a $200 per month auto renewal program in 2025. During 2024 individuals can register for a KRO membership at a non-refundable price of $450 for a term that expires December 31, 2024. All active KRO members will be grandfathered to renew annually at $450 on Dec 31, 2024. Sign up here for this limited $450 offer. Kaiser Watch is available at Kaiser Research YouTube and as a Podcast downloadable from KaiserResearch.com. Each episode will be made available through the publication of a Kaiser Media Watch blog report which will provide links to specific questions and include supplementary graphics. All episodes will be archived at Kaiser Watch.

Podcast Download

Kaiser Watch June 5, 2024: What is a world class mirage worth?
Jim (0:00:00): What does Brunswick Exploration have planned for Mirage now that the final drill results are out?

On June 4, 2024 Brunswick Exploration Inc released the final results for the winter drill program at its Mirage lithium project in the James Bay region of Quebec. I was quite aback at Brunswick's disclosure approach for what is its most promising project that CEO Killian Charles loves to gush about as having "world class" potential. Since starting the drill program in January 2024 Brunswick has provided three assay updates starting with April 25. Each press release featured a drill plan with hole locations that had labels only for the holes for which assay intervals were reported in that news release. The holes were reported in a random order, with holes 37-42, presumably the first ones drilled after last year's 36 hole program, never reported at all.

What I do not understand is why, if Mirage is not a world class mirage, the company did not provide a complete table with results for all the drill holes and a drill plan that includes all the hole numbers so that shareholders and analysts can evaluate what was accomplished. In addition, the press release just provides a cursory description and says nothing about what will be done next. Goose hunting season is over and boots are headed for the ground by every junior that has money. Why is Brunswick providing such shabby disclosure compared to other juniors run by professional teams and leaving us in the dark about what it all means and what they plan to do next?

I went to their web site to look for an updated presentation but all I found was one hidden on a sub-page with no date, though the December 31, 2023 date for the share structure page and the absence of any information about the 2024 drill program tells us this is a stale presentation from January. Brunswick burned $900,000 in overhead during Q1 of 2024 so there is no excuse for why at the start of June there is no updated presentation. The company likely has about $5 million working capital left which means the street will be coaxing it lower for a cheap flow-through financing. A professional junior would at least have provided a technical presentation summarizing all the results and providing sections for what is now known about Mirage. Such a presentation would highlight what needs to be done next. Its absence suggests that Mirage is a mirage and that the CEO will have to spend the rest of the year blathering about the discovery potential of the 725,000 ha of lithium pasture it has amassed during the past two years. The problem with that is the market is currently sour about the lithium story and only interested in an emerging discovery with expansion running room. Brunswick is tanking because its body language is not signaling it believes it has such a discovery at Mirage.

I have assembled all the Mirage data and labeled the holes for which I found numbers. The first graphic has the results for all 36 holes of the 2023 drill program which Brunswick professionally provided in its Mirage project web page. The second graphic has the results for the 2024 drilling cut and pasted into one page which makes it clear that of the 35 holes reportedly drilled assays were reported for only 25 holes. The third graphic has all the drill hole numbers plotted I could find using the most recent drill pan as a base. I've circled the ones that have no mention anywhere that reveals their number. There are no assays for #70 and #71 nor are they labeled anywhere but I know from Killian that these were the last 2 drilled as scout holes to see the bedrock beneath the overburden and perhaps get a clue where the 3 km long micaceous boulder train came from. What is odd is that #37-42 are not labeled or reported anywhere, and if these are the un-numbered holes I have circled it makes me wonder why these were drilled first. An alternative explanation I do not dare to contemplate is that something is seriously messed up about hole numbers.

When you look at the results in a full context such as I have assembled it becomes clear that 1%-2% Li2O pegmatite has the biggest tonnage footprint in the MR6 dyke. But the sections indicate that it is horizontal and fades both to the west and to the east, making it look like a puddle with dimensions of 200 m by 200 m by 50 m thick. At 2.6 specific gravity the tonnage footprint of that puddle is only 5.2 million tonnes. The drilling to the northeast onto the Osisko optioned inlier claims is disappointing and while hole #60 had a good interval, on the plan view map it lacks the pink coloration Brunswick has added to drill hole traces elsewhere that intersected lithium enriched pegmatite. What I find strange is that they left undrilled a 200 m gap within the Central Zone between the MR3 and MR6 dykes. I cannot speak for the technical background of the CEO, but Bob Wares has a very strong technical background and it is very odd that Mirage has been presented to the market as this fragmented mess of dykes with no direction about what is next. Even if Mirage is a mirage, tell us like it is and move on. The only plausible explanation I can think of is that behind the scenes there are negotiations involving a consolidation of various entities into a single company. The James Bay lithium supply future remains strong and important in my view, so when the market is turning its head because lithium carbonate prices are temporarily stuck at $6-$7/lb and the media is wailing obituaries for the EV sector, this is the time to pull strategic parts together.

Brunswick Exploration Inc (BRW-V)





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Fair Spec Value
Mirage Canada - Quebec 3-Discovery Delineation Li

Complete table of 2023 Mirage drill results

Collection of 2024 Mirage drill result tables

Drill Plan of all Mirage drill holes with numbers added by JK
Jim (0:06:13): What do you make of the proposed merger between P2 Gold and Eskay Mining?

On June 4, 2024 P2 Gold Inc and Eskay Mining Corp, both former Favorites, were halted for an announcement that the two companies will merge on the basis of 0.2778 ESK for 1 PGLD share, roughly a 3.6:1 rollback for P2 Gold shareholders. Waterton has agreed to convert loans into stock and as the biggest shareholder must obviously approve of the plan. It certainly surprised me because in KW Episode May 24, 2024 I pointed out that at current spot prices for gold and copper the updated PEA for P2 Gold's Gabbs project clears development hurdles. And while I have long been a fan of the Eskay project's potential to deliver another VMS style world class Eskay Creek discovery, over $100 million of expenditures has delivered just a lot of smoke and occasional high grade pockets that do not hang together. Furthermore, Eskay Mining has a modest treasury of $2.5 million so this is not a cash bailout for P2 Gold whose Gabbs feasibility study will need a lot more than that.

The merger proposal is a capitulation event. After Ken McNaughton and Joe Osvenek published the updated PEA in May they contacted their entire financial network to seek additional funding. Most did not call them back and those they did contact were not interested. The Canadian financial sector is not interested in the resource sector. Meanwhile Crescat which owns 32.3 million Eskay Mining shares was stuck. CEO Mac Balkam and Gord McMehen own another 29 million shares. The merger solves Eskay Mining's problem of trying to fund a story that looks exhausted despite exploration VP John Dedecker's best efforts by bringing into the company an advanced copper-gold project that itself has expansion potential and currently has optionality value for stronger copper and gold prices. It also brings a new set of eyes to rethink the Eskay story. Ken has extensive experience with the nearby Brucejack Mine bought out by Newcrest and now owned by Newmont. Based on all the work done he thinks the VMS model must be set aside. The merger solves P2 Gold's funding problem by shifting that responsibility into the hands of Eskay Mining management. I think this will turn out to be a win-win merger for all parties.

Eskay Mining Corp (ESK-V)






Bottom-Fish Spec Value
Eskay Canada - British Columbia 2-Target Drilling Au Ag Cu Pb Zn
P2 Gold Inc (PGLD-V)






Bottom-Fish Spec Value
Gabbs United States - Nevada 4-Infill & Metallurgy Au Cu
Disclosure: JK owns shares of Brunswick; Brunswick is a Fair Spec Value rated Favorite; Eskay Mining and P2 Gold are Bottom-Fish rated

 
 

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