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Kaiser Media Watch Blog - March 1, 2023 to March 31, 2023

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The KRO Blog is where unrestricted content of a time sensitive nature is posted. It includes the Kaiser Media Watch Blog which features content involving John Kaiser produced by third parties such as the Discovery Watch series by HoweStreet.com, interviews by outfits such as Investing News Network, SDLRC related commentary, the KRO Monthly Summaries, and just about anything else John writes that is not intended exclusively for the fee based KRO Membership.

Posted: Mar 29, 2023JK: Kaiser Watch March 29, 2023 with Jim Goddard and John Kaiser
Published: Mar 29, 2023KRO: Kaiser Watch March 29, 2023: Albemarle helps put Liontown into play
Kaiser Watch is a weekly 15-30 minute 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 in the form of a USD $450 Annual Individual Membership that at some point will increase substantially to reflect KRO's shift to a research platform. However, when the change happens active members will be grandfathered to renew indefinitely at the current rate provided they maintain a continuous paid membership. 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 March 29, 2023: Albemarle helps put Liontown into play
Jim (0:00:00): What are the implications of Albemarle's conditional bid for Liontown and its Kathleen Valley lithium project in Australia?

Liontown Resources Ltd announced on March 28 that it had received a proposal from Albemarle to acquire the company at AUD $2.50 per share, which at 2.2 billion issued assigns a value of AUD $5.5 billion to the Kathleen Valley project in Western Australia. At current exchange rates that is about USD $3.7 billion or CAD $5 billion. However, the proposal, which offered a 64% premium above market, was only indicative, not binding. Albemarle wanted Liontown to agree to an exclusive due diligence period and a number of conditions such as regulatory approval before the offer would become binding.

Since December 2022 the price of lithium carbonate has been falling back to earth, and is currently between $17-$18/lb. The optics have had a negative affect on the price of lithium producers and advanced developers such as Liontown which was languishing between $1.40-$1.60 after peaking at $2.22 in November. I am assuming that lithium carbonate will bottom somewhere between $10-$15/lb, but until it does, the Lithium Mania 1.0 companies will be under pressure. The Albemarle proposal not only prevented Liontown from engaging in an auction of itself for other producers, but exposed itself to being tainted if Albermarle comes up with an excuse not to make the offer binding.

It turns out Liontown had received similar proposals form Albemarle at $2.20 on October 20, 2022 and at $2.35 on March 3, 2023 just before PDAC where Albemarle had a booth for the first time ever in the Investors Exchange. Unlike the earlier proposals which Liontown did not make public, this time Liontown went public and also stated that Albemarle has apparently accumulated a 2.2% equity stake in the open market. The stock traded 137 million shares on Tuesday, ten times its usual daily level, and closed up 69% at the day's high of $2.57. This development is a big deal because the producers are taking advantage of the lithium price slump to go after near production companies like Liontown. It is bad news for the investment banks who have been talking down the sector as over-priced because they hope to represent car and battery makers launching their own bids to secure their future lithium supply needs. And it its good news for the transition of Lithium Mania 1.0 to Lithium Mania 2.0.

Lithium Mania 1.0 represents the awakening of the lithium boom in 2015-2018 when Tesla sales took off and the world started taking electric vehicles seriously as a partial solution to the energy transition goals of limiting global warming to 1.5 degrees celsius by 2050. During Lithium Mania 1.0 juniors focused mainly on hardrock pegmatites in Australia and brine salars in the Lithium Triangle of South America. Although some Canadian juniors such as Patriot Battery Metals' predecessor acquired Canadian pegmatite plays, these did not get the attention the Australian juniors attracted. PMET never got around to drilling its Corvette pegmatites in James Bay and inflicted two rollbacks on its shareholders until it caught the start of Lithium Mania 2.0 in 2021.

Liontown was a typical Australian junior with gold projects in Australia and Tanzania when in late 2015 it decided to branch into lithium exploration in Western Australia. It acquired the Kathleen Valley project in 2016 from gold producer Ramelius Resources for 25 million shares. The property had multiple LCT type pegmatite showings within a greenstone setting on the Yilgarn Craton. Lithium carbonate prices were in the $10-$15/lb range at the time which made developing 1%+ Li2O pegmatites very lucrative, but in 2018 the price crashed as new supply from Australian pegmatites came on stream and overwhelmed EV demand. Despite the slump Australian companies like Liontown persisted at the cost of diluting their issued shares into the billions.

In the case of Liontown exploration of its various lithium prospects resulted in Kathleen Valley becoming the flagship, with a PFS for a 2,000,000 tpa (5,000 tpd) mine delivered in December 2019. Although the lithium carbonate price didn't bottom at about $3/lb until late 2020, Liontown persisted with a DFS which it delivered at 2.5 million tpa scale in November 2021. The 2017-2020 Trump administration was hostile toward the idea of climate change and Trump did his best to promote the fossil fuel sector at the expense of climate change mitigation goals. The rest of the world, however, stuck to its EV rollout policy goals, especially China, which had a strategic reason for shifting away from ICE vehicles to electric vehicles. Much of China's electricity is generated by domestic coal, but its ICE fleet depends on imported oil, and that could become a problem for China's imperial goals. After voters dumped Trump in November 2020 the Biden administration started to support energy transition goals.

The big surprise, however, was that the car makers, despite Trump knocking down fuel efficiency targets, had on their own made strategic decisions to embrace electric vehicles. It was no longer just Tesla the maverick, but all car companies designing and building EVs. While there are different configurations for the lithium ion battery, all of them require lithium. The over-supply situation began to reverse itself in the second half of 2020, and by the end of 2021 the lithium carbonate spot price had increased 10-fold. In fact the imbalance was so badly reversed that lithium carbonate spot prices spent all of 2022 in the $30-$35/lb range which is much higher than required to mobilize the six-fold supply expansion the IEA projects as needed to meet 2030 EV deployment goals. But it was a huge windfall for lithium producers, including Albemarle which has its Silver Peak brine operation in Nevada, Salar de Atacama in Chile, and joint venture stakes in the Greenbushes and Wodinga pegmatite mines in Australia.

Liontown is currently building a 3,000,000 tpa facility (about 8,000 tpd) with a projected CapEx of AUD $895 million, most of which is funded by equity and a credit facility. Construction is expected to be complete by mid 2024. It is based on a proven and probable reserve of 68.5 million tonnes at 1.34% Li2O, of which 65.4 million is slated for underground mining. At $17.15/lb lithium carbonate this reserve has an in situ value of USD $87.5 billion and a rock value of $1,280 per tonne. If we assume $10/lb as the long term reality, the rock value drops to $746/tonne, still an impressive number, while the in situ value drops to $51 billion (the recoverable value will be lower). The latter is equivalent to AUD $76 billion, which makes the Albemarle worth about 7% of the gross metal value. The reserve sits within a resource of 156 million tonnes of 1.4% Li2O, which gives the owner the capacity to double the production rate down the road. The price Albemarle is offering is thus reasonable. The big question now is whether other potential buyers of Liontown will come to the table and start a bidding war without conditions. The fact that Liontown's price is higher than the $2.50 Albermarle offer suggests that the market thinks so.

Liontown Resources Ltd (LTR-ASX)

Unrated Spec Value
Kathleen Valley Australia - Western Australia 8-Construction Li Ta
Albemarle Corp (ALB-N)

Unrated Spec Value
Greenbushes Australia - Western Australia 9-Production Li

Liontown's Kathleen Valley Resource and Reserves

Long Term lithium Carbonate Price Chart
Jim (0:13:47): What are the implications of the Liontown bid for Lithium Mania 2.0 juniors like Patrtiot Battery Metals and its much earlier stage Corvette project in the James Bay region of Canada?

If Liontown does become the focus of a bidding war that results in it being acquired by a much larger company it will accelerate the transition from Lithium Mania 1.0 to Lithium Mania 2.0. Lithium Mania 1.0 was characterized by a rush into Australian pegmatites and Lithium Triangle salars. In both settings the low hanging fruit is now owned and already in production or heading into production. Whatever is left to be found in Australia will require riskier exploration probing under cover. When you use Google Earth to fly over Western Australia, you can see that the northern two thirds has little vegetation, swamp or lakes, very unlike much of Canada. Much of the bedrock is covered by dirt, but then most of eastern Canada is covered by glacial till and overburden. The difference between Australia and Canada is that exploration of Canada's outcropping pegmatite potential is just getting underway. Those LCT pegmatites such as Galaxy/Cyr, Rose, Wabouchi and Moblan which were found decades ago were acquired and explored as part of Lithium Mania 1.0. These are now heading into production.

Lithium Mania 2.0 is based on a market realization that the supply potential identified by Lithium Mania 1.0 is insufficient to meet the lithium demand projected for 2030 and beyond. Liontown's most recent corporate presentation has a very useful slide with a graph that presents supply and demand projections based on work done by Wood Mackenzie and Albemarle which also shows future supply deficits. This chart shows a balance being achieved in 2026, beyond which the supply deficit widens dramatically, peaking at 51% in 2036. This is based on lithium in the current supply mobilization pipeline. Lithium Mania 2.0 is about identifying the pegmatite supply that will take care of the supply deficits that emerge in 2028 and beyond.

Patriot Battery Metals was bootstrapped in 2021 by Australian investors who understood what was happening to future lithium demand and the limits of Australian pegmatite and Lithium Triangle brine supply alone delivering that demand. The outcropping spodumene enriched pegmatite zone on the 55 km long Corvette trend represented low hanging fruit similar to what the Australian juniors harvested in Western Australia during 2015-2018. Lithium Mania 1.0. however, was haunted by uncertainty about whether consumers would actually embrace electric vehicles on a large scale. While the logic behind future lithium demand was sound, the timing of its arrival was uncertain, and that ripped the rug out from underneath Lithium Mania 1.0 when the Australians proved highly efficient at mobilizing new supply and tanked the price of lithium carbonate to a level where nobody has economic incentive to develop pegmatite based lithium supply. But today the car makers have gone beyond the point of no return and the future supply requirements are so well understood that car makers themselves are willing to violate the taboo about getting involved with upstream raw material supply. Furthermore, if the recent slowdown in demand from the Chinese EV sector does threaten to drop the price of lithium carbonate below $10/lb, the battery and car makers will soak up the surplus supply and stockpile it because they understand that if Lithium Mania 2.0 collapses, and the resource juniors who are the exploration engine behind identifying the new supply lose their funding audience, there simply won't be sufficient lithium to make planned EV sales for 2030 and beyond a reality. Albemarle making a tentative move on Liontown in the current environment of a plunging lithium carbonate price reflects this reality.

PMET has during the past 18 months drilled over 150 holes into the CV5 pegmatite and is now marching 6 drill rigs along strike to try to double the footprint by demonstrating that the CV4 outcrop on the north shore of the lake is part of the CV5 pegmatite system. Drilling will pause on April 20 for a month to accommodate the Indigenous goose hunting season. The potential to delineate a 50-100 million tonne body grading 1%-2% Li2O is already visible through the published drill results, which would make CV5 comparable in scale to Liontown's Kathleen Valley deposit. On Wednesday afternoon ahead of the Thursday ASX trading session PMET published the first batch of assays for the 2023 drilling. The results include significant intervals in the 3%-5% Li2O range.

PMET currently has an implied project value approaching CAD $2 billion which represents S-Curve territory ahead of a maiden resource estimate, but that milestone should be achieved by the end of Q2. It has been 7 years since Liontown acquired Kathleen Valley from Ramelius as a pegmatite prospect, with production scheduled by year 8. PMET acquired Corvette at the same time but is only in its second year delineating the CV5 discovery and one might think its valuation is very far ahead of the fundamentals. However, PMET has the Lithium Mania 2.0 advantage over Lithium Mania 1.0 in the form of very big stakeholders understanding the urgency behind identifying the lithium supply that will prevent supply deficits from emerging in 2028 and beyond as Wood Mackenzie projects. While Corvette may look like another Kathleen Valley, the project still needs a couple years of de-risking to attract a bid with a comparable valuation, but the times are such that a $2-$3 billion offer from a party that wants a district scale trend with a flagship deposit already outlined is not inconceivable. The Lithium Mania 1.0 operations were all developed with scales that reflected the uncertainty about the size and timing of the EV future. In the Lithium Mania 2.0 context a much more aggressive production scale can be justified as soon as Corvette passes the maiden resource estimate milestone.

Patriot Battery Metals Corp (PMET-V)

Unrated Spec Value
Corvette Canada - Quebec 3-Discovery Delineation Li

Liontown's Lithium Supply-Demand Chart

Initial 2023 Drill Results for PMET's CV5 Target
Jim (0:22:11): Is the Albemarle proposal for Liontown good news for Sigma Lithium and its Grota do Cirilo project in Brazil?

Sigma Lithium Corp has been the subject of rumors that Tesla is planning a buyout which have never panned out. With 102 million shares fully diluted its flagship Grota do Cirilo lithium project in Brazil's Minas Gerais state has an implied value of CAD $5.2 billion based on the TSXV $51 closing price on Wednesday. Sigma's primary market is NASDAQ where it closed at USD $37.62. The project is similar to Liontown's Kathleen Valley project except that it expects phase 1 to be in commercial production next month. The proven and probable resource at 54.8 million tonnes at 1.44% Li2O is similar to Kathleen Valley's 68.5 million tonnes at 1.35% though it does not have a total resource more than the double the reserve within it. Albemarle's CAD $5 billion conditional bid for Liontown is good news for Sigma Lithium that a buyout at the current valuation is plausible. It is not so good news for Grizzly Research and short sellers who think a proper valuation should be 50%-75% lower.

Last week an outfit called Grizzly Research which claims to be short Sigma published a 42 page report titled Bogus Feasibility Studies & Production Delays will leave Investors Praying for a Buyout. Over the next couple days the report knocked the stock down from USD $36.50 to as low as $31.57 on Friday. The Liontown news has helped the stock bounce back though in CAD terms it is still below the $54.23 peak achieved on October 31. The Grizzly Report makes two key arguments.

One is that Tesla is unlikely to buy Sigma Lithium because Elon Musk thinks the world is over-flowing with lithium and the real bottleneck is lithium refining capacity to make battery grade material. Tesla is building such a facility in Texas which would process spodumene concentrates into battery grade lithium hydroxide. He also supposedly thinks that Nevada's claystone deposits are the most likely lithium supply for his GigaFactory near Reno. The nature of claystone deposits is such that a mine would produce battery grade lithium, so separate refining capacity is not needed. The problem with the claystone deposits is that it remains to be demonstrated that proposed flow-sheets for projects like Lithium Americas' Thacker Pass and Ioneer's Rhyolite Ridge will operate as predicted. It will take several years to find out. Pegmatite mines that produce spodumene concentrates which get converted into battery grade material with established technology do not have that technical risk.

Grizzly also thinks that Musk would not want to rely on lithium supply from a country run by a left-winger like Lula rather than a wannabe autocrat like Bolsonaro. Given the ignorance Elon Musk has publicly demonstrated about the nature of the mining industry and its timelines, I tend to share Grizzly's skepticism that Tesla is a serious contender to buy out Sigma Lithium and turn Grota do Cirilo into an in house supply of pegmatite sourced lithium. A much likelier candidate would be one of the Chinese companies who would have no problem doing business with a right or left wing government. Grizzly warns that the Canadian government would not allow such a bid, just as it forced a Chinese shareholder to divest itself of an equity stake in Lithium Chile even though Lithium Chile has no properties in Canada. However, the American shareholders of NASDAQ listed Sigma such as Blackrock would tell Justin Trudeau to piss up a rope if he tried again to interfere with the sovereignity of other nations. With Albemarle willing to pay AUD $5.5 billion for Liontown in a country that is no longer happy with China and which would probably block a takeover by a Chinese company, Sigma Lithium may lot more appealing today.

Grizzly nitpicks about a number of issues that seem frivolous, but its second important argument for a lower takeout price in the CAD $10-$20 range is that it falls into the Goldman Sachs camp which predicts lithium surpluses as we approach 2030 that justify using lower long term prices. This is the opposite of what Albemarle and Wood Mackenzie predict in that Liontown supply-demand graph. In that regard the Albemarle bid is very inconvenient for Goldman Sachs, which seems to be in the business of talking down the price of lithium producers and developers on behalf of the car and battery makers who would prefer to pay as little as possible for their long term lithium supply which internally they know could very well be in deficit by 2030. Lithium Mania 2.0 is premised on the idea that it is better to know where the future supply can come from than to speculate about China's supposed domestic supply expansion capacity, Russia and China somehow getting the giant Bolivian salar into production as well as the DRC deposits, and direct lithium extraction becoming viable for oilfield brines. Lithium Mania 2.0, the search for LCT pegmatites in relatively unexplored jurisdictions like Canada, Scandinavia and Brazil, is insulated for the next few years from the outcome of this supply debate.

Sigma Lithium Corp (SGML-V)

Unrated Spec Value
Grota do Cirilo Brazil - Other 8-Construction Li

Reserves and Resources for Sigma Lithium's Grota do Cirilo Project
Disclosure: JK does not own any of the companies mentioned and they are not rated

Posted: Mar 24, 2023JK: Kaiser Watch March 24, 2023 with Jim Goddard and John Kaiser
Published: Mar 24, 2023KRO: Kaiser Watch March 24, 2023: Will Tower graduate to the 2023 Favorites Collection?
Kaiser Watch is a weekly 15-30 minute 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 in the form of a USD $450 Annual Individual Membership that at some point will increase substantially to reflect KRO's shift to a research platform. However, when the change happens active members will be grandfathered to renew indefinitely at the current rate provided they maintain a continuous paid membership. 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 March 24, 2023: Will Tower graduate to the 2023 Favorites Collection?
Jim (0:00:00): Has Brunswick Exploration started drilling yet on any of its lithium projects?

Brunswick Exploration is finally drilling after spending nearly a year assembling a portfolio of Canadian lithium prospects based largely on archival research followed by boots on the ground field inspections that have identified 650 pegmatite bodies the junior plans to test with make or break drilling programs. Drilling is underway on Anatacau West adjoining to the east of the Galaxy/Cyr lithium deposit Allkem is putting into production. In fact, Monday's news release benefits from drilling having started during the past week. An expanded drill program with substantial eastward stepout fences suggests to us that the initial fence of holes 50 m of the border has confirmed the Allkem pegmatites extend onto Brunswick's ground.

The sexy part of Monday's update is about the Plex project, which Virginia Gold called the "Poste Le Moyne Extension". A chopper visited Plex just ahead of PDAC and not only confirmed the location of the core shack, but also that the core boxes are intact and have not been vandalized (ie not dumped and kicked around so that samples cannot be linked to drill hole locations and position within the core). In testing the Orfee gold zone Virginia drilled through pegmatite that was only vaguely logged and not split for assaying. Brunswick does not yet know if these pegmatite intervals, 96 greater than 8 m occurring over a 1,300 m strike encountered while testing the Orfee gold zone, are LCT type, but within two weeks it will have a crew on site to test pegmatite intervals with an XRF gun, and designate those intervals whose pathfinders indicate LCT for sample preparation and assaying. These pegmatites adjoining the gold zones in a coincidental rather than genetic manner may prove to be barren, but, if instead they prove similar to those of another former Virginia claim block called Corvette which currently supports a $2 billion implied project value for Patriot Battery Metals, will launch Brunswick into S-curve territory. If Brunswick announces that it has shipped Plex core samples for assaying, it will then allow drill permitting to begin ahead of July. The realistic plan was to spend the summer putting boots on the ground and perhaps drilling in the fall. Although Hearst drilling in Ontario is expected to begin in April, the market will be focused on Plex if core gets shipped for lithium assays.

Brunswick Exploration Inc (BRW-V)

Fair Spec Value
Anatacau Canada - Quebec 2-Target Drilling Li

Regional Map of Anatacau West

Drill Plan for Allkem's Galaxy/Cyr project west of Brunswick claim

Regional Map of Brunswick's Plex Project

Orfee Zone Drill Plan and proximity to pegmatites
Jim (0:09:08): It has been a month since NioBay rejected assay results for the Crevier project and asked the lab to redo them. Should NioBay shareholders be worried?

NioBay was a risky bottom-fish graduation to the 2023 Favorites Collection because the flagship James Bay niobium story has been neutered by the Moose Cree First Nation which is caught in a community conflict between an anti-mining faction and a pragmatic faction which believes that the best path to preserve ethnic identity is to become locally engaged in commercial enterprise which stops the exodus of the brightest into the melting pot of Canada while ensuring that resources are responsibly exploited.

For those who are not indigenous this topic is a third rail, which I am herewith touching at cancellation risk, which doesn't trouble me because as a cosmopolitan stateless being I am already a zero. The anti-mining lobby has authentic roots in its opposition to practices that dump emissions onto powerless downstream victims while harvesting a one sided profit. But after accomplishing major reforms in places like Canada that resulted in strict standards for mines in jurisdictions that have accountability grounded in democracy, these forces have mutated into a cynical process no longer grounded in pragmatic goals.

Typically classified as "left-wing", the anti mining lobby has in fact become synonymous with a right wing End Timer mentality where the future is subordinated to absolute ideals without any regard to pragmatic goals like generation after generation building on the prior and still flourishing rather than spiraling down a slope of diminishing returns. The pursuit of purity is the ultimate dirtiness, and it really is time for pragmatists to stand up and cry bullshit on both ends of the political spectrum which itself is a fraud because left and right wing are synonymous with autocracy.

However, since this debate at the local level can only be decided by the Moose Cree First Nation, outsiders, and that includes the market, have defaulted to an outcome that can best be described as accepting the Moose Cree as the Left Behind Nation which in its "cling on" form would be obliterated with nobody caring when Tucker Carlson's vision of America annexing Canada becomes reality, which benefits neither MCFN nor NioBay stakeholders. There is substantial upside in the NioBay stock price should the MCFN pragmatists prevail, but the reigning view is that End Timers are in charge of the jurisdiction claimed by the Moose Cree First Nation. NioBay was graduated from the Bottom-Fish Collection to the 2023 Favorite Collection because of a project called Crevier in an entirely different First Nations jurisdiction, one that has embraced pragmatism as the key to its survival.

NioBay's stock price at the moment is entirely dictated by expectations about the future of the Crevier niobium project in southern Quebec. A drill program was done last fall which partly tested to see if there was more to the Main Zone than established by several decades of exploration since 1975 (apparently not). But it also included 4 holes drilled westwards from the shore of Lac Touladi which intersected a pyrochlore mineralized host rock very different from the late stage nepheline syenite dyke that defines the Main Zone whose niobium and tantalum grade just aren't high enough to be commercial, especially given the metallurgical characteristics of the Main Zone's mineralogy. These Lac Touladi holes, first described in mid December, alerted me that there was something new and different about Crevier, perhaps something much bigger than the James Bay deposit trapped in First Nations existential politics. But lately my enthusiasm has started to look foolish, leading some of my subscribers to speculate I have been played by the CEO.

Jean-Sebastian David (JS to reduce 5 syllables to 2), who became CEO in late 2021 when Claude Dufresne resigned to focus on a niobium story more related to technology than geology, started off with about 900,000 shares and during 2022 has bought 532,700 shares in the open market to bring his position to 1,432,152 shares. He stopped buying in late October 2022 when the stock was $0.11. On February 13 NioBay reported that the Crevier assays had been received but were unreliable because the sample assays did not match the interval logs and expectations. Some niobium values were very high where none were expected and very low when pyrochlore was visible in the interval. The lab was instructed to conduct another set of assays and a segment of the preserved half core was sent to another lab as a quality control test.

Since then JS David has bought 151,000 shares in the open market between $0.17-$0.22 with the last reported purchase on Thursday. Now cynics may point out that this is only $30,000-$40,000 worth of stock, and could be just a strategy to paint the tape. But that is to ignore the context of the buyer who is a salaried CEO with no train of successful stock plays in his resume. He is in fact a loner. Only one other insider bought stock in 2022 and that director stopped in late October. When I asked him this week if updated assays had been received he said no and indicated he would keep buying until he receives them at which point he will be blacked out. When was the last time the market saw insider buying and interpreted it as a "stay away" signal?

When I asked other insiders or people close to the company what they thought about the Lac Touladi intersections the best I got was that they were intrigued; none seemed to think that Crevier was turning into bigger and higher grade niobium discovery than the existing nepheline syenite hosted Main Zone which has about 41 million tonnes of 1900 ppm Nb and 241 ppm Ta. One party who should have known better thought the pending assays were about the mineralization related to the Main Zone! So what is going on here? It is making me start to think I am a fool!

NioBay's JSD got back to me this week with the message that he does not yet have assays and will continue to buy until he is in poesseion of material information, so anxiety that NioBay is staring at reliable but crappy assays is misplaced. He says regardless what the holes average, the system they intersected under Lac Touladi is very large and different from the nepheline syenite hosted Main Zone. He has negotiated an arrangement with the Pekuakamiulnuatsh Nation and is taking steps for a serious summer drill program because this new aspect of the Crevier alkaline complex needs to be explored in greater detail.

Based on the spacing of holes 6, 8, 9 and 10 and their depth NBY is looking at a footprint of 2,000 m by 300 m wide by 350 m deep which at 2.6 SG implies a tonnage of 546 million. There is room for a dozen or so 50 million tonne zones in this blob. NBY has posted a bunch of core photos on its Facebook page and I've assembled some in a graphic below. Some of the core photos have crayon grade markings which are probably based on an XRF gun so the readings will be very localized. The point is that decent clusters of pyrochlore are present in the core, and we should not read too much into the thin section analysis about what grade will be (see Crevier Thin Section Report). Note that the core photo with a 1.64% Nb grade has a 0.24% Ta grade marked; the thin section study found no evidence of tantalum bearing minerals, though of course those samples are just tiny slices of a half billion tonne blob.

I don't own enough stock to be over the moon crazy about the potential, but NioBay matters to me because my job as a bottom-fisher and story hunter is to find plays the market and even some insiders hate. NioBay is such a junior which is why I have dug deeper to understand the story. I've obtained a government mag map which clearly reveals the outline of the alkaline complex. In addition I have created a combo graphic which shows the drill plan side by side with an image which allows us to see how the magnetic low (the blue from the government mag image) around the southern end relates to Lac Touladi. The whole thing reminds me of a lobster arm with the claw at the northern end. The dark NW linear in the middle is the nepheline syenite Main Zone where all the historical drilling took place.

The Lac Touladi zone sits where the alkaline intrusive complex transitions into a magnetic low. At this stage the Crevier story should be viewed as an entirely new dimension of the Crevier intrusive complex with a wider range of mineralogy than what characterizes the late stage Main zone dyke. It is prudent to dial back expectations that the assays will include long intersections with blockbuster grades above 0.5% Nb2O5 that sends the stock soaring as the market wonders if another Niobec scale deposit is emerging. More likely detailed drilling to define the zonation within this Lac Touladi zone is needed to properly understand the economic implications.

I suspect the market weakness is coming from shareholders who interpret the assay delay as bad news and who are perhaps realizing that this is not going to be an overnight hole 109 sensation (ie Eskay Creek BZone discovery hole). But I think the assays will have enough juice in them to propel the observers on the sidelines beyond being intrigued. Depending how you look at it, the market is either 100% discounting a social license breakthrough at James Bay or discounting the notion that Crevier is becoming something new, different and better than the Main Zone, perhaps even better than the James Bay project caught up in MCFN politics. My inclination is to continue to accumulate the stock, though, because the results are unlikely to be blockbuster, there may be a better opportunity to buy, albeit at a somewhat higher price, after the assays are out and the uncertainty about a total bust is gone. It's not like JS David has a history of crying false wolf. This is the first time he is crying wolf and just about everybody with clout is ignoring him.

NioBay Metals Inc (NBY-V)

Fair Spec Value
Crevier Canada - Quebec 7-Permitting & Feasibility Ta Nb

CEO JS David's lone wolf insider insider trading activity

Regional Magnetic Survey showing Crevier alkaline intrusive complex

Crevier drill plan contrasted with map showing magnetic low of intrusive complex

Core photo shots of Lac Touladi Holes at Crevier

Main Zone outrcrop and core photos
Jim (0:15:45): Last year you talked often on Kaiser Watch about Bottom-Fish rated Tower Resources but it never made your 2023 Favorites Collection. The stock has nearly tripled during the past month. What is going on?

Tower Resources Ltd is currently Bottom-Fish Spec Value rated and is a candidate for graduation to the KRO 2023 Favorites Collection. I published Tracker March 22, 2023 as an update on what Tower was all about in 2022 and what has happened in early 2023 to triple the stock price from its year end bottom-fish level and explain why the stock could head a lot higher. Tower expects assays for the new Thunder Zone on the Rabbit North project by early April, and if these are good, Tower will be graduated to the 2023 KRO Favorites. Most of the Tracker is covered by the 8 minute segment of this Kaiser Watch episode, but I am not providing the details here in written form because discussion of the Bottom-Fish Collection is supposed to be restricted to KRO members paying USD $450 annually for access to the research platform and the Bottom-Fish Workshop.

Time is money, and personally I prefer to read rather than listen or watch because when I read my mind dictates how much time is consumed, whereas audio and video dictate how much time I must donate to consume the content. The trend these days is toward mediating content via video or audio rather than the written word. KRO members post links to such content in the KRO Slack Forum which is especially appreciated when the member includes a synopsis of the topic and an explanation why it is worthwhile. The written word, however, is superior because the time needed to digest its wisdom is unrelated to the time taken to craft it. I took a lot more time to craft the Tracker than to blurt out from memory without the visual cues of a powerpoint presentation the 8 minute KW segment about Tower. Yes the audio is free, but the written version is better and costs less time. This week's NioBay segment is an anomaly, but not really, for NioBay is already a Favorite and thus not subject to the KRO paywall. However, the gist of the KW segment on NioBay was presented earlier this week within the KRO Slack Forum which is an interactive privilege extended to paying KRO members provided they stick to basic decorum rules.

Tower Resources Ltd (TWR-V)

Bottom-Fish Spec Value
Rabbit North Canada - British Columbia 3-Discovery Delineation Au Cu

Regional Map of Tower's Rabbit North Project

2021 regional till sample map contasted with Central-Dominc Train maps

Cloesup of Lightning Zone and its Dominic Lake Train

How the Thunder Zone relates to the Lightning Zone

Closeup of how Thunder Drill Plan relates to Thunder's Central Train

Contrast between Thunder and Lightning Core
Disclosure: JK ows shares of Brunswick and NioBay; Brunswick and NioBay are Fair Spec Value rated Favorites, Tower is bottom-fish spec value rated.

Posted: Mar 17, 2023JK: Kaiser Watch March 17, 2023 with Jim Goddard and John Kaiser
Published: Mar 17, 2023KRO: Kaiser Watch March 17, 2023: Will bank run scare help resource juniors?
Kaiser Watch is a weekly 15-30 minute 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 in the form of a USD $450 Annual Individual Membership that at some point will increase substantially to reflect KRO's shift to a research platform. However, when the change happens active members will be grandfathered to renew indefinitely at the current rate provided they maintain a continuous paid membership. 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 March 17, 2023: Will the bank run scare help resource juniors?
Jim (0:00:00): How will the banking crisis affect resource juniors?

The failure of Silicon Valley Bank last Friday has shone a light on a problem created by the Federal Reserve's determination to subdue persistent inflation by rapidly reversing the ultra low interest rates of the past decade. When the covid pandemic hit in 2020 the Federal Reserve flooded the system with liquidity to prevent a serious recession arising from the disruption of business activity and consumption. The result was that savings deposits climbed, but because of the economic uncertainty the depositors' money was not lent out to support businesses and real estate purchases, but was instead parked in low yielding government bonds whose yield was slightly better than what the banks were paying the depositors. When interest rates rose sharply the value of the banks' bond assets dropped, but the value of customer deposits stayed the same, which meant that the difference had to be accounted for by the bank's capital which belongs to the equity shareholders of the bank. Normally this should not be a problem, but Silicon Valley Bank was unique in that it specialized as the preferred banker for the countless startups that the west coast venture capitalists had funded until the tech bubble ended in 2022.

Many of these startups remain private and some achieved "unicorn" status which means that based on the price of the most recent financing round, the private company had a market capitalization in excess of $1 billion. Most of these startups are simply spending machines as they develop whatever fin-tech or other concept that supposedly will eventually conquer the world. Even when they have revenues these are dwarfed by "market development" costs, which became acceptable with the original dot-com bubble that ended in 2000. The end of ultra low interest rates in 2022 put a lid on valuation increases because when government bond risk free rates are 4% that translates into a Price-Earnings ratio of 25 rather than 200 as was the case when yields were 0.5%. The prospect of even higher interest rates would further reduce the value of future success. Investor interest in funding these unicorns in danger of losing their horns dried up in 2022, which disrupted the assumption that the startup world could continually replenish its treasury with new funding.

Much of the money spent by tech sector startups goes toward human labor, with payrolls being met on a semi-monthly basis. Because the west coast venture capitalists encouraged the startups they were backing to bank their cash at the Silicon Valley Bank, that bank had an excessive concentration of deposits which in 2022 were being depleted by the ongoing payroll expenses that the venture capitalists were having a hard replenishing with new funding. This was a de facto run on the bank whose bond assets were suddenly worth less and represented losses if liquidated to generate the cash to meet withdrawals. It was different from a more typical bank run where ordinary depositors start withdrawing their money to chase better yields elsewhere and not caring that they forfeit the tiny interest that was being paid on their ultra low yielding term deposits.

The startups were not like ordinary depositors who at most leave $250,000 in bank deposits because that is the maximum amount insured by the FDIC (we have since learned that super-libertarian Peter Thiel left an enormous amount of his capital in SVB even as he urged his fund to sneak out the back door). But when you are a business you have to maintain a much larger cash balance to fund ongoing expenses. Venture capitalists like Peter Thiel became aware of SVB's vulnerability and started alerting the startups they were backing about the risk of a bank run that could wipe out their remaining cash which was becoming increasingly difficult to replenish with new funding, especially at prices higher than the last round. Making payroll is a sacrosanct rule, so the recognition of a payroll catastrophe risk would have unleashed panic within a startup's management. This created a classic prisoner's dilemma well known from game theory. The venture capitalists were watching this with horror from the sidelines, because if the startups they are backing blow up because their capital has vanished and the brain trust that underpins the development story disperses when payroll is no longer being met and their options and RSUs are worthless, the VC's investment is down the toilet. Unfortunately, many of these VCs are chest-thumping full of merit libertarians who celebrate the superiority of the individual rather than the collective, so it was natural that some chose to bolt before their competitors did the same. And once that was underway, the Silicon Valley Bank was dead in the water and had to be seized by the government.

The equity of the Silicon Valley Bank's shareholders has been wiped out and there is no way of getting that back, which is why bank stocks in general tumbled last week and continue to be under pressure. Instead of letting SVB depositors take a haircut on their deposits above $250,000, the government decided to guarantee the full amounts. This has been widely criticized as creating absolute moral hazard of the sort that created the savings and loan fiasco of the 1980s because it is assumed the government will now guarantee everybody's bank deposits. While plenty of individuals may have had deposits in excess of $250,000 at SVB, most of them likely have much of their wealth stashed directly in treasury notes, mutual funds or equities held by a brokerage firm where they are segregated from the firm. So bailing them out would not have been a priority for the government, but preventing the collapse of the entire west coast startup eco-system, putting tens of thousands workers on the street and effectively destroying whatever concept they were developing, would be a different matter. Seeing some of these fin-tech (aka crypto) startups vanish might not be a bad thing, but killing the rest would be.

Unfortunately the consequence of the Silicon Valley Bank failure is that it has awakened everybody to the structural risk created for the banking sector by the monetary fight against inflation unleashed by Jerome Powell in 2022 which is only a quarter so far of what Paul Volcker needed to do in 1981 to subdue inflation. The inflation back then was difficult to subdue because the rapid increase in oil prices had created a wage-cost push spiral (COLA clauses - cost of living adjustment) which was not unwound until the mid eighties. Today's inflation has two different drivers which are likely immune to monetary policy.

One is that demographic change is shifting pricing power into the hands of Millennials and Gen Z as the Boomer generation drifts into retirement and plans to live off its concentrated wealth until the sun sets on them around 2040-2050. The Boomers, the most selfish generation ever, have exhibited reluctance to sacrifice any of its wealth for the energy transition goal of preventing global warming from ruining the future of their children and grand-children. It is easy for a Boomer to be a climate change skeptic and argue that the planet may fix the problem all on its own because very few Boomers will be around to find out if they were right or wrong. Whereas past generations all bought into the idea of family formation and enduring mid-life sacrifice that guarantees success for their children, after which the parents can enjoy retirement, today's younger generations are to a fair degree embracing the same End Timer mentality as their elders by refusing to work on terms that guarantee their survival in what is shaping up to be a terrible future without miraculous intervention. The only way the economy can fight this attitude is by rushing to deploy automation and AI to substitute for a shortfall of workers, a path that Japan and China are now aggressively pursuing because they have a terrible demographic problem. But the automation-AI replacement will not happen overnight, so wage based inflation pressure will be difficult to eradicate without plunging the economy into a deep recession or depression, which will have the consequence of radicalizing the younger generations.

The other inflationary pressure is the reversal of the deflation created by the globalization of the past two decades which enabled China to become a great power rival to the United States. China's embrace of autocracy and decision to have state owned entities reach deeper into all aspects of the Chinese economy is creating geopolitical tensions and wiping out the multinational dream of selling goods and services to the Chinese population. Western businesses are now withdrawing from China, and while they initially looked at relocating production capacity to China's neighbors in southeast Asia, the clear signs that China sees this as its turf is forcing them to look at India with its complicated bureaucracy or reshoring to home bases like the United States where higher environmental and human costs prevail. Reshoring production capacity will involve higher CapEx and OpEx than businesses have enjoyed in a globalized economy. In addition, the geopolitical fracturing of the global economy threatens to disrupt raw material supply from environmental shit-holes like China and Russia who together dominate 40% or more of the supply of most metals. Sourcing new metal supply not subsidized by autocracy which leaves downstream victims powerless to protest will be a source of raw material input cost inflation.

Jamming interest rates through the roof will not make these structural inflationary pressures go away. But doing so will deflate the value of the assets in which banks have parked their customers' deposits. Almost everybody now understands this and containing the rising panic will be difficult to do while continuing to jack up interest rates. Bitcoin has rallied 20% since Monday when it became clear that the west coast crypto startups would not be allowed to die. People are buying Bitcoin because they see only price risk in its ownership, not evaporation risk as they now see with their bank deposits. But Bitcoin is a Ponzi scheme and could overnight suffer its own monster "bank" run.

The biggest beneficiary of the bank run scare will likely be gold, because gold is energy stored in a physical form, not in the sense that gold can be burned to make the wheels turn, but to extract it from the ground and concentrate it into a gold bar requires energy. Although the world adds about 100 million ounces annually to the gold stock, the incremental addition is a declining percentage of the total above ground gold stock. Without a higher real price this trend cannot be reversed. Unlike Bitcoin, you cannot make gold disappear by pulling the plug on it. Bitcoin is an ongoing energy liability whereas gold is stored energy. Inflation will not go away, keeping investors fearful of additional haircuts to the value of their bonds and equities if the Federal Reserve resumes raising interest rates. Gold's price theoretically will track inflation, which means owning gold should allow one's purchasing power to remain stable, except for the inconvenient fact that countries like the United States treat gold as a "collectible" whose nominal value gain is subject to an onerous capital gains tax. Owning gold as an inflation hedge is thus a stupid strategy. But gold's real role is to hedge against uncertainty, the risk of massive dislocations. The era characterized as the "end of history" has come to an end, and gold's role as a hedge against uncertainty is now ascendant. There is now a solid reason to shift some of one's wealth into gold, which, combined with growing demand from autocracy central banks eager to escape a weaponized US dollar, could allow gold to break through $2,000 and finally establish $2,000-$3,000 as its new trading range.

The resource juniors will benefit from the banking crisis because gold will once again be topical if $2,000 becomes the new base. One could worry that the banking crisis and high interest rates will negatively impact macro-economic demand for metals, which should result in lower prices and thus chill investor interest in juniors exploring for or developing non-gold metal deposits, making gold the only game in town. But that worry is offset by the fact that the need to replace metal supply that currently comes from increasingly unfriendly autocracies is only going to worsen, even if America becomes an autocracy which I guarantee you will not make America best buds with China and Russia, regardless what Tucker Carlson and Donald Trump think. And there is the fact that the car makers are now hopelessly committed to the energy transition as far as electric vehicles are concerned, and the IEA has made it clear how much additional supply of copper, nickel, lithium and rare earths beyond macroeconomic consumption are needed to make those EV deployment goals reality. Naturally investors in resource juniors cowered in fear this week as they watched the global banking sector, according to the Financial Times, see $450 billion in equity value vanish. But on Friday while the general equity market trembled further, the GLD ETF gained ounces and the traded value of TSXV resource listings jumped dramatically.

Daily Gold Holding Change for GLD ETF

TSXV Trade Value Split between Resource & Non-Resource Listings
Jim (0:14:23): What's next for Patriot Battery Metals?

Patriot Battery Metals was halted on Tuesday to allow completion of a $50 million charity flow-through financing and did not resume until Thursday. The financing was done in the form of 2,215,000 shares at $22.57 and gives PMET working capital in the $60-$70 million range depending on how much has been spent at Corvette since the start of the year. The entire financing was actually bought by Australian entities. After Peartree stripped the flow-through benefits from the stock all of the shares were sold through Australian brokerage firms or the subsidiaries of Canadian firms to Australian investors in the form of 22,150,000 shares so called Chess depositary interests (CDI) at AUD $1.20. Just as British and Australian listed companies trade on North American exchanges on a 10:1 rollback basis (ie Piedmont Lithium), stocks with a primary listing on North American exchanges trade on a 10:1 split basis on the ASX. So whenever you see the PMT price on the ASX, multiply by 10 and adjust by the AUD-CAD exchange rate to calculate what the TSXV equivalent price will be. The stock is down from its $14-$15 range during PDAC week in part due to overall market weakness as the banking crisis began to emerge, but also to reflect the discount needed to place the stock in Australia.

The big question is whether or not PMET will bounce back after loading its treasury with an extra $50 million. The timing of the halt during a week when conservative investors watched the banking sector lose nearly a half trillion dollars in equity value, stocks that are supposed to be safe and boring, has injected a new dynamic into the PMET market structure. The stock will likely come under pressure from the exercise of 4,038,409 warrants at $0.25 that expire June 30, 2023, and 26,850,727 warrants at $0.75 that expire mostly at the end of the year. Normally a warrant overhang is a problem for a junior when the exercise price is above the market price because the holders will short against the warrants every time the stock rallies through the exercise price. An then cover the stock in the market when the stock price sags, sucking up incoming new risk capital. PMET has a different problem in the $0.75 warrants represent a paper gain of $286 million at, say, $11.41 per share where it was trading mid day Friday. If the holders wanted to collect their profit by exercising and selling their stock, the market would need to eat about $300 million worth of stock. That is not chump change.

The warrant holders may until last week have been happy to wait for a potential buyout later this year, but during the two days while the stock was halted to complete the financing and the general market was shuddering from the bank run crisis, they probably experienced a considerable amount of fear that their paper profits might evaporate. The premise behind PMET's recent $2 billion valuation is the idea that the world is determined to go through with the energy transition in order to ensure an inhabitable future for the children and grandchildren of the Boomers. One plank in the energy transition strategy involves electric vehicle replacement of internal combustion engine vehicles. The IEA projects that the for the 2030 EV goals to be achieved the world will need to expand its lithium supply by 600%. But none of that will happen if the world descends into an apocalyptic End Times mentality. So what happens on the global stage matters to shareholders of PMET.

Then there is also the recent financing reality in the resource sector where major financings are done at major discounts to the market. Nobody knew what the term structure would be for a financing most knew was coming, so existing shareholders likely weren't happy to see in effect a bought deal at AUD $1.20 or $12 which, because $1.00 AUD is worth about $0.91 CAD, implied a $10.92 CAD price for PMET. During the past year we have seen a spate of bought deals at 20% or more discounts to the market price, which resulted in an instant haircut for existing shareholders that was not rewarded with a rebound after the financing was completed. So although PMET post-financing has $60-$70 million working capital to finish delineating the CV5 lithium deposit and proceed with an economic study, spooked warrant holders will likely start exercising the warrants and banking the profit.

The good news about the Australian purchase is that the stock went into strong hands which apparently included Mineral Resources and Pilbara Minerals, two $14-$16 billion market cap ASX listed lithium producers with apparent ambitions to dominate a future $100-$200 billion market while established majors like Rio Tinto, BHP, Vale and Anglo American pick their noses. Earlier this year there were unconfirmed rumors that Mineral Resources was accumulating PMET in the open market, which raised hopes that it might launch a hostile bid for PMET, perhaps ahead of a maiden resource estimate expected in late Q2. Since nobody has disclosed passing the 9.9% insider threshold, all this is largely rumor, though the paperwork for the Australian purchase would make clear who bought what in the current financing. If it is true that Mineral Resources and Pilbara bought toeholds, this bodes well for the stability of the PMET market as it digests stock from the warrant exericse.

Changing the subject, while updating the PMET financials for my KRO database I noticed a peculiar entry in the balance sheet of a kind I had noticed last year in the case of another junior whose CEO suggested I talk to the CFO for an explanation. The Dec 31, 2022 balance sheet shows current assets of $20,990,581 and current liabilities of $10,537,259. A standard measure of a junior's financial health is working capital, which is current assets minus current liabilities. On this metric PMET had only $10.6 million working capital at the end of 2022. But one of the current liabilities items is called "flow-through premium liability" and it is $8,553,172. This is an accounting fiction which new regulations now require companies to include in current liabilities. The amount represents what the company would be liable for to Canada Revenue Agency (ie the Canadian equivalent of the IRS) if an audit determines that the flow-thru funds were not spent properly. There have been cases in the past were flakey life-style juniors raised flow-through money and failed to spend it on qualifying exploration, which resulted in the flow-thru benefits of the placees being reversed by CRA. This resulted in a huge mess for the junior and the investors, especially for the investors if the junior has effectively blown all its capital and the pump and dumpers behind the junior have walked away.

While the intent is to alert investors that the company has an obligation to spend flow-thru money properly, it does cause the working capital number to understate the financial health of a company that has flow-thru funds in the bank. When it is confirmed that the money has been spent properly, this line item vanishes via "amortization" recorded as an inflow rather than outflow. Of course the cash by then has also vanished because it needs to be spent by the end of the year subsequent to the one in which it was raised. In the case of PMET's Dec 31 financials the FT premium liability is linked to the $20 million charity FT financing PMET did in September at $13.27 when the stock was trading at half the price. If you trust the junior as being run by competent management trying to create real value through exploration, this line item is not necessary, and potentially misleading. We will have to watch for this distortion of a junior's financial health, just as we have to do with an expense line item called stock option compensation which is also an accounting fiction that must be stripped out to reveal the true burn rate of a junior. It is unfortunate that the more regulators try to achieve transparency, the more they achieve obfuscation.

Patriot Battery Metals Corp (PMET-V)

Unrated Spec Value
Corvette Canada - Quebec 3-Discovery Delineation Li

PMET Balance Sheet, Expenses, and Warrant Table

PMET Financial Snapshot within KRO Profile

KRO Search Engine Working Capital Parameter
Jim (0:23:54): What is the status of Eagle Plains royalty spinout?

Eagle Plains created some confusion last week with an update that declared March 17 to be the day of record without making clear what that day of record referred to. This led some to conclude that March 17 was the day of record to get the 1:3 Eagle Plains royalty spin out. With 2 day settlement that meant March 15 was the last day to buy Eagle Plains to get the spinout. The date is important because the stock will likely drop somewhat to reflect the absence of the royalty portfolio. On Thursday morning Eagle Plains put out an emergency news release clarifying that March 17 is the record date for being eligible to vote at the April 26 special meeting to approve the spinout. That makes sense because how do you declare a record date for a dividend in specie spinout before you have shareholder approval? Eagle Plains management went to great effort to poll its shareholders about their views on the spinout before it formalized the spinout deal, but none of that guarantees slam dunk approval. Just consider that a week ago everybody though the banks were solid after the post 2008 reforms, and now everybody is freaking out.

I'm not sure how this slipped past the lawyers, but if March 17 were truly the record date for the spinout, but anybody buying Eagle Plains after March 17 wouldn't know if they still get the spinout or not. In any case, this confusion is now fixed. The record date will be declared after the April 26 meeting approves the spinout, and this usually comes in the form of an official TSXV notice. Eagle Plains continues to be a KRO Favorite which is now up 50% to reflect the $0.10 implied value of the spinout, but the stock has potential to go a lot higher in Q2 when drilling gets underway at the Vulcan project. In addition, on March 2 EPL announced that it had staked 2 lithium prospects in British Columbia and 4 in Saskatchewan. It has not disclosed claim locations or sizes because it is busy staking additional lithium pegmatite plays and does not want to tip its hands. Saskatchewan is now shaping up as a hot lithium province.

One of my year end bottom-fish stocking stuffers, Searchlight Resources, tripped up in late January when it optioned 100% of the Hanson and Jan Lake lithium prospects to Brunswick Exploration for $35,000 up front. Brunswick's Bob Wares couldn't believe his good fortune. While the LCT-type potential of the Jan Lake pegmatites is at this stage unknown because nobody ever checked, the Hanson Lake pegmatites to the south are confirmed LCT-type pegmatites. I was surprised during the recent Toronto MIF Backstage Interview when Bob mentioned that after drilling the Anatacau target in James Bay and Hearst target in Ontario Brunswick will be drilling the Hanson Lake pegmatites, possibly by June. Searchlight's Alf Stewart and Stephen Wallace, who were quite pleased to have quadrupled their $8,500 staking expense in less than 3 months, were taken aback by the shareholder blowback they received. Searchlight is supposed to be about the Kulyk Lake rare earth play, and secondarily the high grade Bootleg Lake gold play not so far from the Tartan Lake gold play of Satori which Rob McEwen thinks might be his next Red Lake. For god's sake, lithium is Plan C!

Wallace was not pleased by the blowback, mumbled a string of expletives, rolled up his sleeves, and burnt the midnight oil rummaging through Saskatchewan's archives. On February 27 Searchlight announced the acquisition of 7 new staked claim groups, one of which, Davin Lake, at 27,632 ha, is a substantial land package. Stephen, what can you tell me about it? Sorry, you will have to wait a bit. It seems that Saskatchewan may be an unsung lithium hero which smart groups like Eagle Plains and Searchlight are now intensely parsing, hence all the secrecy. That is why neither Eagle Plains nor Searchlight are publicly revealing the locations of their new lithium claims, though of course as experienced users of Saskatchewan's MARS system they know exactly where each other's claims are located unless obscure numbered companies are being used to do the staking.

The market has not rewarded Searchlight for its replacement lithium claim package, but that is due to an overhang of 19,040,000 warrants at $0.05 that expire May 26, 2023. Searchlight had $1.8 million working capital at the end of December 2022, so is not desperate to raise money. This situation is a special opportunity to bottom-fish for Searchlight (yeah, I want to prove this stocking was not stuffed with coal). Over the next two months lots of disgruntled stock can be accumulated by nailing a nickel bid to the wall. As the warrant expiry approaches and the supply at a nickel dries up, smart bottom-fishers can post a bid at $0.055 to coax warrant holders to capture a short term 10% gain by exercising their $0.05 warrants and selling the stock at $0.055. In a climate where ultra sophisticated investors are losing 10%-15% on their ultra conservative portfolios, who will sneeze at a fast 10% gain? But everything is a matter of context. KRO members know why Searchlight is a multi-pronged bottom-fish whose missing piece in the form of a structural problem will vanish in two months. If Brunswick, with its $16 million treasury, makes Hanson Lake rather than breaks it in early Q3 of 2023, Stephen Wallace and Alf Stewart may yet have the last laugh as the market has a "Saskatchewan WTF" reaction. And you can count on the Eagle Plains team to also be tethered to the Saskatchewan lithium rocket launch.

Eagle Plains Resources Ltd (EPL-V)

Fair Spec Value
Vulcan Canada - British Columbia 2-Target Drilling Zn Pb Ag
Searchlight Resources Inc (SCLT-V)

Bottom-Fish Spec Value
Kulyk Lake Canada - Saskatchewan 2-Target Drilling U REM
Disclosure: JK owns shares of Brunswick and Eagle Plains; Brunswick and Eagle Plains are Fair Spec Value rated Favorites; Searchlight is Bottom-Fish Spec Value rated

Posted: Mar 10, 2023JK: Kaiser Watch March 10, 2023 with Jim Goddard and John Kaiser
Published: Mar 10, 2023KRO: Kaiser Watch March 10, 2023: "Lithium, Litium, Copper" - PDAC Buzz
Kaiser Watch is a weekly 15-30 minute 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 in the form of a USD $450 Annual Individual Membership that at some point will increase substantially to reflect KRO's shift to a research platform. However, when the change happens active members will be grandfathered to renew indefinitely at the current rate provided they maintain a continuous paid membership. 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 March 10, 2023: "Lithium, Lithium, Copper" - PDAC Buzz
Jim (0:00:00): You just came back from a week in Toronto attending the Metals Investor Forum and the PDAC conference. What was the Metals Investor Forum like?

The Metals Investor Forum held in Toronto on March 3-4, 2023 was the best yet for the Toronto location, but it was a far cry from the standing room crowds at Vancouver MIF in late January. The lower turnout may be due to the blizzard predicted for Friday and Saturday that discouraged investors from traveling downtown. The blizzard also disrupted travel plans for delegates headed to Toronto for PDAC who saw numerous flights delayed or canceled. My MIF session was the last one at 4:30 and my group presented to a room about 75% full. The presentation and backstage interview links are now available in my KMW MIF Blog. Here is a link to the pdf for my MIF March 2023 Presentation: The Eye of the Hurricane.

Of the 40 or so MIF companies my group was still the only one with exposure to critical minerals (not counting copper of which there were several good juniors present) and specifically lithium. The rest of the companies were precious and base metals juniors. Last year during the June 2022 Toronto MIF I introduced the idea of Lithium Mania 2.0 featuring Brunswick Exploration Inc, at the time trading at $0.15. Brunswick has since soared above $1 and filled its treasury with $16 million to support its multi-pronged strategy of testing the 600 plus pegmatites management has identified and staked or optioned in Canada. A large number of its properties are located in the James Bay region of Quebec which is evolving into a Great Canadian Area Play, the first one since the 1990s and possibly the mother of all such plays thanks to the prospect of lithium becoming a $100-$200 billion market by 2030. While the corporate presentations provide the basic outline of each junior's story, for more nuanced insights about the underlying potential check out the Backstage Interviews.

One junior I would like to highlight from my group is VR Resources Ltd because of a very surprising development announced a couple weeks ago and which CEO Mike Dunning spent a fair bit of time describing. Last fall VR conducted a drill program on the Hecla-Kilmer rare earth prospect in the James Bay Lowlands of Ontario as well as a single hole on a large magnetic low to the north on a property called Northway. VR is focused on the northeastern third of the Kapuskasing Structural Zone which runs from James Bay 500 km to Wawa where the 20 million ounce Hemlo deposit was found in 1982. Rifting caused the KSZ to become thermally active between 2-1 billion years ago which spawned intrusive complexes such as Hecla-Kilmer and NioBay's James Bay carbonatite. A 400 million year old limestone platform covers the Archean aged basement in the northern third which means targets like Hecla Kilmer and Northway are geochemically blind. VR's strategy is to test geophysical anomalies to see if they might be an IOCG system or an alkaline intrusive complex that includes critical mineral enriched carbonatites. The region saw a wave of drilling during the 1960s and 1970s typically testing magnetic highs as potential carbonatites or kimberlites. No kimberlites were discovered, though this was not a big deal because Archean aged diamonds in the diamond stability field would have been turned to graphite during the mantle upwelling 2-1 billion years ago.

VR finished its drill program in mid November and spent the next few months consulting various diamond exploration experts about the unusual "diatreme breccia" intersected in the bottom 40 m of a 282 m hole. All of them have declared the rock to be kimberlite, though thin section petrology still needs to be done to deliver formal confirmation. The hole was a puzzle while being drilled because the basement rocks were supposed to have a limestone cover only 50 m thick in this area based on nearby past drilling. Instead the hole passed through limestone into a thick interval of mudstone with igneous rocks intersected at about 240 m depth; the geophysical data has now been remodeled to show what appears to be a 1,200 m wide kimberlite whose eruption, likely in a marine environment, excavated a giant crater that later filled with sediments that became the mudstone. If this is indeed a kimberlite, or a dense cluster of of kimberlite eruptions as is the case with the world-class Grib and Jwaneng kimberlites, this will be a very large tonnage kimberlite.

Based on the age of the mudstone Mike Gunning and Justin Daley believe the kimberlite was emplaced between 410-450 million years ago before the limestone covered the area. The magnetic low appears to have been caused by the earth's poles having been reversed during this period relative to when the basement rocks formed. VR has now staked a couple dozen similar but smaller magnetic lows on the premise that these might also be similar aged kimberlites which tend to erupt within a similar time period. It is a testament to market skepticism that nobody has bothered to map stake claims around these "postage stamps". The tantalizing idea is that VR may have discovered an entirely new field of kimberlites under fairly shallow limestone cover. This field would be completely blind and invisible to till sampling for indicator minerals because they were never exposed to glaciation. The Northway target itself was never drilled, likely because it was "too big" to be a kimberlite and nobody was sure what else it might be that was potentially of economic interest.

While it is a fascinating story Northway at this stage is still a long shot. The kimberlite will not have entrained any diamonds formed more than 1 billion years ago because the KSZ thermal event would have wiped them out. However, diamonds can form fairly quickly if the pressure-temperature regime that allows diamond formation returns. For example, the diamonds at Victor 300 km to the northwest have been age-dated at about 700 million years. The Victor pipe does not have the harzburgite or eclogite normally associated with diamondiferous pipes, but instead a form of lherzolite (G9s) is the main diamond bearing xenocryst present at Victor. Eclogite typically occurs deeper than harzburgite because it is formed from basaltic ocean slab that has been subducted at a continental margin and underplated the craton keel.

VR has decided the sample is too small to submit to caustic fusion for the recovery of micro diamonds. The hole was drilled on the margin of the anomaly in the hope that this is where critical mineral enrichment took place. The plan now is to drill a long angle hole from the existing drill pad across the anomaly to confirm its width and determine the extent of multiple vertically zoned pulses. Another hole will be drilled in the center once a drill permit has been received for the new location (Ontario, in what appears to be a make work program for bureaucrats who would otherwise be on welfare, requires specific permit applications for each drill location). The earliest one could thus hope for micro diamonds would be late in Q3 or early Q4 given slow turnaround.

The next milestone after confirming micro diamonds are present would be to conduct a mini bulk sample to confirm macro grade extrapolated from the micro diamond distribution curve if present. The earliest thus one could hope for macro diamond confirmation is a year from now, given the timelines for diamond exploration results turnaround. Meanwhile VR will have the option of testing the other magnetic low anomalies to see if they are also kimberlites, or possibly a different type of intrusive with critical mineral potential.The junior will continue delineating the higher grade rare earth zones within Hecla-Kilmer.

The James Bay Lowland area does have a bad First Nations reputation because of opposition to NioBay's James Bay niobium project. Most of the rivers in the James Bay Lowlands are muddy silt laden water bodies, but the North French River system has clear water and its watershed is effectively off limits for mine exploration and development. The James Bay carbonatite is near the NFR watershed but outside it, though that does not register when the emotional buttons of Moose Cree First Nation members are pushed by outsiders who make a living from opposing mining. The area being explored by VR is well to the west of the NFR watershed, and close to rail and power infrastructure. JK: better than past attendance, but hampered by a snowstorm that included thunder and lightning. Spoke to 3/4 full hall compared to 1/3 full last June when I introduced Brunswick Expl at $0.15 as one of my companies. I was still the only speaker at MIF with lithium as a topic and companies involved in lithium. The Eye of the Hurricane. The YouTube links to my talk and the corporate presentations and backstage interviews are now available.

VR Resources Ltd (VRR-V)

Bottom-Fish Spec Value
Northway Canada - Ontario 3-Discovery Delineation D

James Bay Lowland Map and Location of North French River Watershed

Will the Northway kimberlite prove part of a new diamondiferous kimberlite cluster?
Jim (0:04:51): What was the Prospectors and Developers Association conference like?

PDAC 2023 was the first full-fledged in-person conference since 2020 and recorded 23,819 delegates. Although this was lower than the 28,000-30,000 delegates PDAC used to attract, the aisles in the Investors Exchange and Trade Show were packed with people, forcing one to bob and weave past people marching with smartphones in their faces. What was not packed was the Sunday Newsletter Presentation Session which Peter Botjos organized for several decades before retiring last year. This all day session featuring newsletter writers with 25 minute speaking slots was hugely popular during the 2000's, but began to wane during the decade long resource junior bear market that was underway by 2013. In 2020 I was no longer welcome because I was also participating in the Metals Investor Forum which overlapped with the Sunday though this is no longer the case. Last year I participated in an hour long panel of newsletter writers at 11 AM (2022 PDAC was only Monday-Wednesday) which I thought went very well though I nearly missed it because Exhibit Only Day Pass holders were not allowed into the convention center until 1 PM on that Monday because of a bottleneck (I had to be smuggled in with somebody else's All Access Pass). Needless to say, any retail investors who bought a Day Pass for CAD $25 last year missed out on this shortened version of the newsletter session, which might explain why the room which seats several hundred people was only quarter full last year.

Peter Botjos used to get the newsletter writers an All Access pass for free, which allowed us to sit in on technical presentations and visit the Trade Show where government agencies have their booths and lots of useful information about the mineral potential of their countries. But PDAC decided that was too good a deal and offered the writers 50% off an All Access Pass which would have set anybody under age of 65 back $300 or more. PDAC does have a very good deal for delegates 65 and older who need pay only CAD $75 for access to absolutely everything all four days. The Investors Exchange (public companies) and the Trade Show (government agencies and mining service-equipment providers) are now available for a simple CAD $25 day pass charge, and since I might be interested in only a handful of technical talks, I didn't feel any need to fork over a 50% discounted $300 when CAD $100 gave me access to the IE and TS for 4 days.

For the 2021 Virtual PDAC I contributed a technical presentation to the Capital Markets session which was pre-recorded but screened along with the other ones on the designated virtual day. Afterwards we contributors were all supposed to log on as a panel to field questions from the online audience, but PDAC insisted that it could not let me into the room unless I purchased a full access pass at a 50% discount. Needless to say, my virtual chair was empty. I'm not sure how many delegates saw my presentation during the "live" event, and PDAC certainly does not make anything it records available on YouTube, though supposedly Full Access Pass holders can see them later through some forum. Many of the technical presentations at PDAC represent new ideas, and PDAC deserves to be commended for selecting and organizing these talks. Making sure the exploration and mining sector is kept abreast of the latest ideas would seem to be the mandate of an industry lobby group like PDAC. But how is this mandate served when the recordings are never made public? A delegate can take in only so many talks, and some may run concurrently. There is value in being physically present at a talk in a highly stimulating setting like the 4 day conference. But why constrain and hoard the knowledge transfer created by these technical talks? What is the rationale behind not making the talks available online for free some time after the conference is over so that the entire industry can benefit? I don't buy the argument that this might shrink the purchase of All Access passes; the delegates with an All Access pass generally have it paid for by their employers.

I am happy to report that my 2021 virtual presentation, Expanding the Funding Pool for Juniors, which complained that the "accredited investor" requirement for participation in a private placement (you need to be a millionaire not including your real estate net equity) pointlessly limited the pool of risk capital available to resource juniors, is irrelevant since November 2022 when the Canadian regulators adopted the LIFE exemption which allows ordinary investors to buy private placement stock that is immediately free trading. LIFE as an efficient non-brokered private placement mechanism is still a work in progress, but it is a watershed event which allows younger generations whose boomer parents refuse to die (and thus through inheritance qualify their children as "accredited") to participate directly in the resource junior eco-system.

In any case, I declined to participate in the PDAC 2023 newsletter session and I truly made the right choice. I dropped by around 3 pm Sunday during Peter Krauth's presentation and was horrified when all dozen people present spun around to see who else was bothering to join their tiny audience. Stunned, I promptly backed out without even entering the room (my apologies Peter). I heard from other newsletter writers that the attendance was similarly dismal. Brent Cook and Joe Mazumdar whose "exploration insights" are always worth listening to even when one disagrees provided a Q&A panel that had only a couple dozen people in attendance, none of whom felt the urge to ask questions. The PDAC 2023 newsletter session represents rock bottom for PDAC as far as a retail audience is concerned.

The Metals Investor Forum in contrast was a resounding success, and the presentations of the MIF newsletter writers and the companies are now available online at the MIF YouTube Channel. As of this writing my own talk has already logged 700 views and the 11 minute Brunswick presentation by Killian Charles has 500 views. Patriot Battery Metals did not have a booth at PDAC (80 juniors with negative working capital had prior dibs) but did a 10 minute presentation in a critical minerals session. It was well attended, but how many views beyond the hundred present has the PMET presentation since received?

All those newsletter writers put time and effort into their PDAC presentations for 1-2 dozen people, and for that they got the privilege of buying an All Access Pass at a 50% discount which they didn't need. Why would any of them return in 2024 unless they are pay to play stock pumpers who will grab any exposure that seems legitimate? The typical retail investor has a real life job which makes Sunday the only realistic day to visit PDAC. Why would PDAC not waive the $25 day pass fee for Sunday to pull in retail investors? The service providers who waste the time of exhibitors Monday through Wednesday flogging their services have no problem shelling out CAD $25 for the day pass so they can do their solicitation job. The answer is simple: PDAC has lost its way.

PDAC has become a bureaucracy obsessed with ESG. It used to provide delegates with a brochure that listed all the exhibitors as well as the times, locations, speakers and titles of all the technical talks and the newsletter writers, plus all the special country rooms. After picking it up on Sunday I would sit down somewhere with my yellow highlighter and figure out everything I needed to attend over the next 4 days. The program was my PDAC bible. This year you had to know to ask to get the brochure, but it is a stripped down version that is little more than an exhibitor directory. When I asked how I am supposed to figure out where is what, I was told to scan a QR code. Use my tiny smartphone screen to navigate the endless pages of programs on the PDAC web site. How am I supposed to keep track of anything?

PDAC is proud not to "waste" paper printing detailed programs that end up in the recycling bin a week later. It is proud to inflict a dysfunctional interface on delegates who want to make productive use of their PDAC stay. It is proud that savvy delegates who know there won't be a program but want to plan ahead print reams of wasteful pages from a web site that does not offer a printer friendly pdf version of what a proper program would look like. But maybe PDAC knows only a handful will try to print its html pages because who wants to waste paper and toner on inefficiently presented output? Who needs a one inch thick bundle of paper cranked out by some sluggish inkjet printer? But those who do value the content PDAC provides will do it. And that is where PDAC the ESG Pumper is in reality a fake like just about every anti-mining group out there.

PDAC is a cost dumper like everybody else who is more than happy to consume products made from raw materials produced in some environmental shithole run by autocrats who make sure the downstream victims cause no trouble. My printer is a shithole compared to a commercial printer. The output of both goes into the recycle bin at the end of the conference, but my home printed output has a bigger environmental footprint than a properly printed PDAC program and it has wasted my time to prepare ahead of PDAC. Plus it has cost me more than it would have cost PDAC to produce the same hardcopy. PDAC is dumping costs on its delegates while pumping ESG principles. It should be focused on tradeoffs that make sense, not aspire to some ideal of purity that ultimately translates into hypocrisy.

Is PDAC an organization of cynics that will laugh at my complaints, or is it so lost in myopia that it doesn't even know it has lost its soul? I stayed at the Delta Hotel where MIF was held which is very convenient to access the south entrance of the PDAC convention center. There is a winding path that leads from the intersection of Lower Simcoe and Bremner Blvd through "Olympic Park" which everybody uses. On Sunday nobody used it because it was still full of slushy snow after the weekend blizzard. I shrugged and walked the longer way along the taxi entrance. By Monday morning the slush had melted and the path was clear. But the end of the path was still blocked by snow that the plough for the taxi road had pushed aside. Everybody was using the path but gingerly stepping over the small snowbank. I looked around for a shovel because I figured it would take 5 minutes to remove this obstacle. There was none so I assumed somebody from PDAC would notice and sound the alarm to clear this blockage. A friend witnessed somebody in a wheelchair struggling to get past the snowbank. On Wednesday the snowbank was still there, albeit smaller. I took a photograph on Monday hoping it would soon be a delete event. It wasn't. The Monday and Wednesday photos symbolize what today's PDAC is really all about. This tiny snowbank was a treacherous inconvenience for many delegates, but nobody connected with PDAC saw any need to fix this simple problem.

PDAC so full of ESG it couldn't be bothered to shovel the sidewalk to make it safe
Jim (0:11:00): What was the buzz at PDAC?

Of the 400 plus mining and exploration companies exhibiting at PDAC about three dozen had lithium as a target metal for their flagship project. I suspect that by the end of March that percentage will be a lot higher than 10% of exhibitors. When I asked exhibitors what delegates were interested in the answer was usually a grumpy "lithium, lithium, lithium", though some mentioned copper was also a topic. What unites lithium and copper is that both are key inputs for the energy transition. The net zero emission goals for 2030 as described by the International Energy Agency will be met mainly by the expansion of wind and solar power and the adoption of electric vehicles. The IEA projects that if these goals are to be met, the world will need a supply expansion of 50% for copper, 600% for lithium, 100% for nickel and 100% for rare earths. Boosting copper output 50% from a $200 billion annual market to $300 billion is a big deal, but what has really caught everybody's imagination is the realization that a 600% expansion of lithium won't happen if lithium carbonate is not at least $10/lb, and if it is this market that was worth $200 million in 2005 will be worth $100-$200 billion in 2030 and onward. It is interesting that Albemarle and SQM both had booths in the Investors Exchange, a sign they understand their expansion future at least in part resides in hardrock lithium enriched pegmatite mining. After updating my database with the 2022 metal supply data published in late January by the USGS, I created lithium supply evolution charts for Australia, Chile and China which illustrate how rapidly Australia has mobilized new pegmatite based lithium supply compared to Chile which recovers lithium from salar brines. The buzz at PDAC was about Canada being a key source for the second half of the 600% supply expansion needed to make 2030 EV deployment goals a reality.

The supply volume and value expansion of a metal on this scale over a decade long time period has never before happened. Skeptics abound who declare that it will not happen because it cannot. Even the IEA in its January 2023 report warns that mine permitting timelines which run 10-15 years from discovery to production are the biggest obstacle to 2030 NZE goals. But where there is a will there is a way, and government policy goals constitute a will for which out of necessity they must create a way. The buzz at PDAC revolved around the energy transition and Canada's potential role in supplying the required raw materials. But even more important is that while PDAC obsesses about how mining companies can do a better ESG job, government agencies are thinking hard about how they can do a better job to make their net zero emission climate goals reality. In backroom meetings representatives from government agencies such as those of Ontario were consulting with juniors on how permitting timelines can be streamlined and First Nations can be better integrated into the exploration and development cycle so that they are productively engaged rather than an obstacle to energy transition goals.

The elephant in the room is the potential for metal supply disruption caused by the geopolitical fracturing of the global economy into opposing alliances of autocracies (Russia-China) and democracies (United States, Canada, Australia, Europe). Nobody quite yet wants to talk about what happens to metal supply that normally comes from China and Russia if the great power conflict becomes hot and globalized supply channels collapse. When I show my slide that depicts how much of each metal/energy commodity Russia and China supply cameras shoot up to take a picture of the screen. Most people have no idea how vulnerable the free world's economy is to raw material supply disruption due to geopolitics. I've since created a slide which shows the metal supply for Australia, Canada, the United States and India with the Russia-China chart as an insert to reveal the contrast.

India will reach a super cycle tipping point by 2030 similar to what China hit in 2003 when its economy achieved 3.5%-4.0% of global GDP. India is becoming the new destination for low cost manufacturing as multinationals like Apple shift away from China which is turning into a pressure cooker as Xi Jinping tightens his autocratic stranglehold, the real estate debt pyramid begins to implode, its demographic decline accelerates, and the risk of Taiwan's annexation rises. India is expected to become the most populous country in 2023 and it has a very young demographic that can be harnessed to support an accelerating growth trajectory. But India's self-sufficiency in metal and energy supply is dismal, in part because the country has forever been mired in bureaucracy and corruption. The United States, which still has world's biggest GDP, is also a dismal metal supplier and has an entrenched NIMBY system that keeps metal in the ground. This NIMBY system has been parasitic on metal supply from environmental shitholes elsewhere made possible by autocratic governments.

India, which will have a hard time geopolitically aligning itself with rival China, and the United States, have looming raw material supply program for which Australia and Canada, with giant land passes and tiny populations, represent major potential solutions. The India pavilion at PDAC was swarming with Indians who seemed to be in a panic. The person I tried to engage in a conversation with was hustled away to help with somebody more important. I heard from resource junior executives that India has been pitching them to come explore in India. Some juniors have tried that in the past but grounded out in the face of India's hopeless bureaucracy. Brazil also had a large pavilion and there I received a lot of attention from one of the representatives eager to show that Brazil has extraordinary untapped mineral potential. When I asked about Bolsonaro's push for autocracy I merely got a big eye roll. India and the United States need to look to Australia, Canada and Brazil to shore up their future raw material supply needs. The resource juniors are key to finding and developing new deposits, in particular those metals relevant to the energy transition, but also those whose dominant supply from autocracies face potential disruption. The PDAC buzz was not yet about the Back to Canada and Australia exploration theme, but the need for this is a key reason I believe the resource juniors are heading into a decade long bull market.

IEA Net Zero Emission Technology Goals for 2030 and 2050

IEA Projections for required new metal supply for 2030 and 2050 NZE goals

IEA projections of additional supply needed to meet 2030 EV goals

Lithium Supply Evolution by top 3 producers

The portion of each commodity's supply that comes from China and Russia

The portion of raw material suppy that comes from Australia, Canada, USA and India
Jim (0:17:56): Resource juniors started dropping while PDAC was still underway. Do you still think the PDAC Curse will be violated this year?

The PDAC Curse is the tendency for the New Year Effect after the December tax-loss drubbing to climax in early March at PDAC, following which the prices of resource juniors tank as investors pre-empt the adage "sell in May and go away". The 2020-2022 PDAC sessions do not count because they were disrupted by the covid pandemic, but 2023 is a full opportunity to manifest the PDAC Curse once again. But every 3-6 years the PDAC Curse gets violated where the resource junior uptrend continues right through Q2 into summer. Past major violations were 2003 when gold finally emerged from its slump and earlybirds like Robert Friedland began to talk about the emerging China super-cycle, 2006 when the majors finally accepted the super-cycle theory and stopped forward selling metal into a very backwarded futures curve that kept rising, and in 2009 when the responses to the 2008 financial crisis in the form of $600 billion infrastructure spending by China and massive quantitative easing by the United States respectively goosed prices for useful metals and gold. Since then there were only a couple short-lived attempt to violate the PDAC Curse in 2016 and 2017. What is needed to overcome the PDAC Curse is a big picture development that has positive implications for resource juniors.

The topic of my MIF presentation, "The Eye of the Hurricane", reflects my analysis that the resource juniors are transitioning from a decade long bear market to what will be a decade long bull cycle. Investors sense we are leaving a bear market behind but don't yet feel the coming bull market. I call this being in the eye of the hurricane, but for the moment investors are much more worried about a potential economic hurricane caused by the Federal Reserve's goal to bring inflation back to 2% by hiking interest rates. Resource juniors started wobbling during PDAC after Jerome Powell reiterated his monetary policy strategy and hinted that a 1981 style Paul Volcker shock therapy is not off the table. What we have seen so far, which triggered a big equity market sell-off in 2022, is nothing in comparison to what the economy underwent in 1981-82 when Volcker pushed rates to a high of 21% to subdue inflation which had hit 14%. I see a greater parallel with the 1920-1935 period for the 2010-2025 period than with 1980-1995.

On Friday March 10 the Silicon Valley Bank failed as it succumbed to a run by its depositors who are guaranteed only $250,000 by the federal deposit insurance system. The SVB specialized in west coast startup accounts which now have a big payroll problem. Many beneficiaries of the past decade's tech bubble also parked their capital in SVB. The problem seems to be that when the Federal Reserve flooded the system with money in 2020 only a portion of it went to loans; the vast majority was parked in low yielding debt instruments which have since gone down in value as inflation emerged in 2021, failed to prove transitory, and was attacked in 2022 with sharp interest rate hikes. Although these government bonds will yield full value if held until maturity, the problem for these banks is the value of their bond portfolios is sinking below the value owed to depositors. Powell's threat to raise interest rates to whatever level it takes to engineer a hard economic landing to put the younger generations of workers back in their place as serfs pleading for jobs threatens to make this situation worse. Most individuals do not have more than $250,000 sitting in a bank saving account; they tend to park it in money market funds, but businesses with large balances to make payroll are extremely vulnerable to a bank run away from smaller banks like SVB. If the Federal Reserve cannot contain this situation it could spiral out of control and tank the general equity markets. This threat for the moment almost guarantees that the PDAC Curse will reign in 2023.

Assuming the bank run contagion can be contained, and it should be possible because this time around the banking system is not loaded up with a global mountain of rotting securitized mortgage paper wrapped with false payout guarantees, a PDAC Curse violation remains possible for 2023. But what would be the trigger? Gold racing into new price territory has done the trick in the past, but in the current context the reason for gold to charge beyond $2,000 would be due to widespread wealth destruction and a hard landing recession which would not leave much risk capital available to be bet on resource juniors. A much likelier driver for a PDAC Curse violation would be a broadening appreciation of the energy transition requirements and the role Canadian juniors can play in finding and mobilizing new lithium supply. But that breakout is being hampered by the current breakdown of last year's unrealistic $30-$35/lb lithium carbonate spot price range. Nobody likes the optics of a metal price falling off a cliff, and the sooner lithium carbonate ends up back in the $10-$15/lb the sooner we can see Lithium Mania 2.0 gain traction among Northern American investors, not just Australian investors.

The resource juniors don't need a $30-$35/lb lithium carbonate price to deliver big scores for their shareholders. I have created a matrix that shows the rock value at different lithium oxide grades and lithium carbonate prices. For LCT-type pegmatites such as Patriot Battery Metal's CV5 pegmatite with a 1%-2% grade implication the $30-$35/lb price range is equivalent to having an open-pittable deposit grading 1-2 opt gold. A 50 million tonne open-pittable deposit at 1 opt gold does not exist in the real world but in 2022 it did in the world of lithium pegmatites. Common sense tells you that such pricing is not sustainable. In the $10-$15/lb range the gold equivalence for 1%-2% Li2O is roughly 10-25 g/t gold. That is still obscenely lucrative compared to gold exploration plays, but it is also necessary to mobilize the 600% required expansion of lithium supply to meet 2030 EV deployment goals. The lithium carbonate price retreat will kick off Lithium Mania 2.0 because it will help North American investors understand the underlying rock value math. That sets the stage for James Bay lifting off as a Great Canadian Area Play in Q2 of 2023, and soon replicated by smaller area plays in other Canadian pegmatite fields. But the PDAC Curse will not be violated if we suffer a major general equity market crash.

PDAC Curse history from 2009 onward

Will Jerome Powell repeat the scale of Paul Volcker's 1981 interest rate shock therapy?

Will the 2010-2025 market cycle avoid the fate of the 1920-35 cycle?

Comparison of Lithium Supply and Price Trends

Lithium Rock Value Matrix for Price and Grade
Disclosure: JK wons shares of Brunswick Expl; Brunswick is a Fair Spec Value rated Favortie; VR Resources is Bottom-Fish Spec Value rated

Posted: Mar 10, 2023JK: KMW Blog March 10, 2023: MIF Presentation Mar 4, 2023: The Eye of the Hurricane
Published: Mar 10, 2023MIF: KMW Blog March 10, 2023: MIF Presentation Mar 4, 2023: The Eye of the Hurricane

Direct YouTube link for John Kaiser MIF Talk

PDF Link for March 2023 MIF presentation: The Eye of the Hurricane
MIF Company Presentation and Backstage Interview Video Links
Brunswick Exploration Inc (BRW-V)

Endurance Gold Corp (EDG-V)

Harfang Exploration Inc (HAR-V)

Sirios Resources Inc (SOI-V)

VR Resources Ltd (VRR-V)


Posted: Mar 1, 2023JK: Kaiser Watch March 1, 2023 with Jim Goddard and John Kaiser
Published: Mar 1, 2023KRO: Kaiser Watch March 1, 2023: Will PDAC Curse be violated in 2023?
Kaiser Watch is a weekly 15-30 minute 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 in the form of a USD $450 Annual Individual Membership that at some point will increase substantially to reflect KRO's shift to a research platform. However, when the change happens active members will be grandfathered to renew indefinitely at the current rate provided they maintain a continuous paid membership. 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 March 1, 2023: Will PDAC Curse be violated in 2023?
Jim (0:00:00): How have the 2023 Favorites done after two months?

As a group the 16 companies in the 2023 KRO Favorites Collection are up 24.9% as of Feb 28, compared to 0.7% for gold and 10.6% for the TSXV Index. At present only 4 Favorites are down, ranging from 3.3% to 27.4% for Aurion Resources Ltd, Cornish Metals Inc, Endurance Gold Corp and Kenorland Minerals Ltd. Aurion and Endurance are gold explorers and gold had a poor month in February after peaking at $1,931 in late January. Cornish Metals is waiting for the dewatering of its tin project to finish, while Kenorland is flat-lining as prospect generator farmout juniors do while waiting for a major discovery.

The biggest gainer is Brunswick Exploration Inc, up 132% after raising $9.5 million in February for its grassroots lithium exploration portfolio. Century Lithium Corp, which is working on a FS for its Clayton Valley claystone project in Nevada is up 44%, which is understandable in light of the $700 million loan promise Ioneer has received from the Department of Energy for its Rhyolite Ridge project, and the $650 million GM has promised for the Thacker Pass project of Lithium Americas. Critical Elements Lithium Corp is up 38% based on permitting progress for its Rose lithium project in Quebec's James Bay region. All of this is against a background of lithium carbonate prices dropping sharply this year from the $30-$35/lb range last year to $26/lb.

Canalaska Uranium Ltdis still up 33% after retreating from an earlier high based on drilling speculation with regard to the deep discovery at West McArthur. Eagle Plains Resources Ltd is up 53% after formalizing its plan to spin out its royalty portfolio on a 1 royalty for 3 EPL shares basis. The special meeting will be held April 20, 2023 and the ex spinout date will be in mid March, something investors must keep an eye out for if they want to buy the stock to get the spinout.

Faraday Copper Corp is up 63% after raising $40 million at $0.80 in mid February for its Copper Creek project in Arizona. It has now used US $10 million to buy the Mercer Ranch to secure surface rights. The 50 million shares became free trading when the financing closed on February 14, so there is no risk of a time bomb four months from now. Amarc Resources Ltd has inched up 3.3% as investors warm to the idea that in 2023 Amarc will deliver discovery news on two farmed out fronts and one 100% owned project in British Columbia. FPX NIckel Corp is up 5.8% as the market continues to sulk over the fact that the identify of last year's 9.9% strategic investor remains a secret.

NioBay Metals Inc is up 19% after the company sent Crevier assays back to the lab to be redone. They have also branched into lithium claims to the northwest of Crevier based on recently released government lake bottom sediment survey results. There is also hope that a breakthrough can be achieved soon allowing work to resume on the James Bay niobium project, though at this stage the market will want to see a solid longer term arrangement with the Moose Cree First Nation than a nod for some more drilling.

Verde Agritech Ltd is up 32% as we approach the Brazilian potash selling season in Q2 and investors begin to speculate how much of the new 3 million tpa K Forte plant capacity it can sell and deliver in 2023.

Solitario Zinc Corp is up 21% as more investors begin to appreciate the scale potential of the Golden Crest project west of South Dakota's Black Hills 100 million ounce gold district. The company keeps reporting positive trenching results as further evidence of a major hydrothermal system similar to that which created the Wharf sediment hosted gold system and which may have harvested Homestake age gold in the basement rocks. Solitario is still optimistic that its plan of operations will be approved in Q2 so that drilling can start in the second half.

Colonial Coal International Corp is up 16% and rising as the market begins to appreciate that Glencore's Sukunka permit denial issued in December is not representative of the metallurgical coal permitting reality in northeastern British Columbia. Teck's plan to spin out its metallurgical coal division may also be pulling in investors. David Austin just did an hour long presentation with the help of its new IR firm in which he covers the permitting reality. Last year's market anomaly where thermal coal was twice the price of metallurgical coal has also reversed itself, with thermal coal dropping from $400 to below $200 while met coal has risen to about $300 per tonne.

So far there are no negative fundamental developments hurting the outlook for any of the 2023 Favorites and I remain confident this will be a tremendous year for the entire group, not just a couple as was the case with the 2020 Favorites Collection. Although January was a good month for resource juniors, February saw a general retreat in metal prices that cooled off the market. The blame goes to lingering evidence that inflation is not coming down as fast as had been hoped, which promises continuing interest rate hikes throughout the year. This is supposed to chill macro-economic demand and harm revenue growth and profit margins for general equities, resulting in a repeat of last year's stock price declines which by mid 2022 had snuffed out the resource uptrend. But I am of the view that the additional supply requirements for certain metals like copper, nickel, lithium and rare earths needed to achieve energy transition goals, combined with an autocracy-democracy showdown that potentially splits global trade will underpin a resource junior exploration and development bull market even though we may end up stuck in a general recession. We remain in the eye of the hurricane were we can see the misery of the decade long bear market and the potential for a roaring bull market over the next 5 years. It's a question of when we move out of the eye into a bull market hurricane.

Chart of 2023 KRO Favorites Index
Jim (0:11:20): You are heading to Toronto for the Metals Investor Forum on Friday and Saturday. What will be your topic and which companies are in your session?

The Toronto Metals Forum will take place at the Delta Hotel on March 3-4 across from the South Convention Center where the PDAC conference will be held on March 5-8. Admission is free but one is required to Register Online ahead of time. My session is the last one on Saturday afternoon between 4:30-6:00 pm. I'm not speaking at PDAC so if anybody wants to track me down the best chance will be on Saturday afternoon at MIF; I'll be in the vicinity of the 5 companies in my session: VRR Resources Inc, Endurance Gold Corp, Brunswick Exploration Inc, Harfang Exploration Inc and Sirios Resources Inc. The topic will be a scaled down repeat of the January MIF talk about the energy transition and autocracy-democracy showdown as key drivers of a major bull market for resource juniors, but with an emphasis on why James Bay Lithium is shaping up to become the Mother of all Great Canadian Area Plays.

VR Resources Ltd (VRR-V)

Bottom-Fish Spec Value
Hecla-Kilmer Canada - Ontario 3-Discovery Delineation REM Nb
Endurance Gold Corp (EDG-V)

Fair Spec Value
Reliance Canada - British Columbia 3-Discovery Delineation Au
Brunswick Exploration Inc (BRW-V)

Fair Spec Value
Anatacau Canada - Quebec 2-Target Drilling Li
Harfang Exploration Inc (HAR-V)

Bottom-Fish Spec Value
Lac Menarik Canada - Quebec 2-Target Drilling Au
Sirios Resources Inc (SOI-V)

Bottom-Fish Spec Value
Cheechoo Canada - Quebec 4-Infill & Metallurgy Au Li
Jim (0:20:23): You will be walking the floor of PDAC Sunday to Wednesday. What do you think will be the talk of the show and can we expect the PDAC curse to kick in afterwards?

I'm not sure what will be the talk of the show but I think it will become the metal requirements of the energy transition and government realization that their job is not to dump mining costs into shithole jurisdictions by making permitting slow, difficult and expensive in rule of law jurisdictions like Canada, but rather to streamline the permitting process and accept local tradeoffs for greater good such as their net zero emission goals. For Canadians the elephant in the room is lithium whose supply needs to expand six-fold by 2030, which to become reality will turn lithium into a $100-$200 billion annual supply market, on a par with copper and gold. And it will not be achieved by established mining companies like BHP, Anglo-America, Vale or Rio Tinto because half the required new lithium supply will need to come from historically ignored pegmatites in places like Canada, Brazil, Africa and Scandinavia. The majors don't know where these potential LCT-enriched pegmatites are located, but juniors like Patriot Battery Metals has already figured it out at its Corvette project in the James Bay region, and Brunswick has spent a year assembling multiple land packages based on archival research and boots on the ground while most of the other juniors were asleep at the switch last year. Now there is a huge scramble afoot to track down these settings, with James Bay emerging as a world class lithium district.

Ironically, neither Patriot nor Brunswick have a booth at PDAC, partly because there is a waiting list. To help myself and KRO members understand the PDAC Exhibitor spectrum, I have tagged all the Canadian and Australian listed companies at PDAC which is available as a special parameter in the KRO Search Engine. By combining the PDAC parameter with other parameters I have counted 27 or 7% of the 400 exhibitors in the Investors Exchange as having lithium as a target metal in their flagship project. That is a good sign that Lithium Mania 2.0 is nowhere near peaking. It turns out half my 2023 Favorites have a booth at PDAC, and 18 of my 2023 bottom-fish collection.

Why is there a waiting list for companies like PMET and BRW? The reason is that PDAC gives signup preference to prior exhibitors, which is understandable because the money they paid in 2021 for the Virtual PDAC was a total waste of money and time for company executives who had to sit by their computers during the 4 day session waiting for nobody to visit their virtual booths. However, my KRO Search Engine counts 80 PDAC exhibitors or 20% as having negative working capital. Hope blooms eternally in the resource junior sector, so most companies even though in dire straits scrape together the money needed to keep their PDAC dibs alive. KRO members can use my search engine to filter out the exhibitors based on various parameters, which includes avoiding these zombie companies. If you are going to spend CAD $25 per day to access this head spinning collection you don't want to walk around in a daze staring at 400 indistinguishable booths, one in five of which is a turd.

I've created a PDAC Lithium Exhibitor PDF as an example of what the display results look like. If you use an IPad and hook up to the PDAC WiFi you can pull the KRO Profile for each company to access lots of detailed information about the company which you can use as a lie detector test, or, more productively when you think it is a promising junior, ask highly contextualized questions that might elicit otherwise unavailable but very helpful information. The exhibit booth people loathe answering questions like "what do you do" but have a lot of time for investors who might be existing or potential shareholders who seem to know a lot about their company. Most of the company people are careful not to reveal inside information, but a sophisticated researcher is on a dot collection mission which enables dot connection on a scale that AI ChatGPT cannot yet accomplish and never will because the human interaction is key to dot generation.

Many company executives and investors go to PDAC to participate in off-site meetings, which makes sense when deal-making is the goal, but not if it is an independent researcher such as myself. For me a one hour zoom call during which I can take notes is infinitely more productive than interacting in person at a busy conference like PDAC. For me the objective is to connect with people, trade notes, and collect dots which slowly connect during and after the conference.

The PDAC Curse is the tendency for the New Year Effect to climax during PDAC, with resource juniors selling off afterwards in anticipation of the rule of thumb, "sell in May and go away". Exceptions when the uptrend continued uninterrupted into the summer occurred in 2003 when gold finally developed an uptrend and earlybirds like Robert Friedland started talking about the China super cycle. The next violation of the PDAC curse took place in 2006 when the majors accepted the China Super Cycle as reality and stopped forward selling their metal production. The next one came in 2009 when the market realized that China's $600 billion infrastructure spending response to the 2008 financial crisis would keep metal demand high and gold bugs became excited about the alternative QE strategy adopted by the United States. Unfortunately the Tea Party gained control of the House in November 2010 and launched a debt ceiling extortion campaign during the Obama administration which they forgot about in 2017 when Donald Trump became president. Putting a lid on fiscal stimuls aimed at rebuilding America's infrastructure helped create a 10-year bear market for the resource juniors and the majors.

The next exception occurred in 2016 when it looked like gold was developing an uptrend, and again briefly in 2017 as gold tried again to rally. Between 2020-2022 the waters became muddied by the covid pandemic. Although 2020 looked promising for a gold uptrend thanks to the destabilizing policies of Trump, everything tanked in 2020 right after PDAC when the world realized the pandemic emanating from China was serious. The resource juniors did rebound in the second half when the market saw the massive QE undertaken to prevent a global depression. But there was no physical PDAC in 2021, and in 2022 it was in June when stocks are slumping anyways thanks to the summer doldrums, and in 2022 were being helped downwards by rising interest rates responding to persistent inflation. So 2023 will be the first time the PDAC Curse has a chance to manifest itself properly.

Although lithium juniors are less than 10% of the exhibitors, I think Lithium Mania 2.0 will generate a lot of buzz, and I think what's happening in the James Bay region will ignite widespread recognition that we are in the early days of a Great Canadian Area Play, one that I believe will eclipse all other area plays, and see meaningful smaller scale replication in other parts of Canada. The growing angst about the autocracy-democracy showdown, exacerbated by a shift among many Latin American countries into leftist forms of autocracy, will also focus nations like Canada still in the democracy camp on the question of where will the world get raw materials from when their traditional sources like China and Russia are geopolitically no longer available, both to fuel macroeconomic growth and to fulfill the extra supply for some metals like copper, nickel, lithium and rare earths needed to achieve energy transition goals mandated by democracies. The big sea change I expect to emerge from PDAC 2023 is a shift from government agencies asking what the mining sector can do better, to asking themselves what government agencies can do to help exploration and mining companies deliver new supply more quickly without turning countries like Canada into shitholes whose excrement is dumped onto downstream victims courtesy of autocratic rule.

Note that the PDAC Curse chart I have historically maintained and goes back to 2000 was based on total traded value and volume by all TSXV listings. In 2009 KRO developed the ability to isolate trading value and volume for TSXV resource listings which allows a more accurate depiction of how the average daily share price changes. This became necessary because in the past decade TSXV traded value ended up being dominated by an explosion of non-resource listings that enjoyed bubbles in sectors like cannabis and crypto while the resource juniors remained stuck in a decade long bear market. I now have a new PDAC Curse Chart for 2009 onwards which will make it easier to track whether or not the PDAC Curse will be violated in 2023 and signal that we have moved from the eye of the hurricane into a raging resource junior bull market hurricane that likely will not climax until 2025 even while the overall economy flatlines or slides into recession as central banks work to subdue inflation through monetary policy.

Two Decade Chart of TSXV Traded Value and Price

Chart since 2009 of TSXV Resource Listing Traded Value and Price
Disclosure: JK owns shares of Brunswick and Endurance Gold;Brunswick and Endurance are Fair Spec Value rated 2023 Favorties; Harfang, Sirios and VR Resources are Bottom-Sih Spec Value rated,


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