We have been in a secular bear market since 2011 for a dozen years, with only a few short-lived and concentrated rallies such as in 2016, the second half of 2020, and briefly in early 2022 before the Federal Reserve realized inflation was not transitory and embarked on a sustained series of interest rate hikes. The 2016 rally was based on what appeared to be a rebound in the price of gold that failed by the end of the year. The 2020 rally was driven by gold charging through $2,000 on the heels of massive fiscal stimulus in response to the covid pandemic but had failed by the end of the year when gold failed to turn $2,000 into a floor rather than a ceiling.

The 2022 rally was driven by geopolitical factors when China's Xi Jinping embraced Russia's Vladimir Putin after he invaded Ukraine. This created a new understanding of a looming conflict between the autocratic Global East and the democratic Global West with the Global South staying on the fence as each nation waited to see who buttered its bread best. People started to understand the skewed concentration of raw material supply with the Global East, in particular China and Russia, and the risk for debilitating geopolitically driven supply disruption. But this story became irrelevant after the interest rate hikes began and general equity markets suffered a horrific year in 2022.

A major bright light in 2022 was the rapid growth in electric vehicle sales, which got the market to think about the energy transition not just as a government policy thing, but a shift to electrification that was happening whether not fossil fuel pumpers were in charge. The poster child was the insane level to which the spot price for lithium carbonate soared and stayed all of 2022. This led me in early 2023 to double down on my dual argument that geopolitical supply disruption and the metal requirements for 2030 energy transition goals would create a secular bull market for resource juniors seeking to discover or demonstrate the feasibility of deposits within Global West jurisdictions which might find themselves cut off Global West commodity supply and which offered rule of law for exploration and development.

In particular I focused on a lithium boom, with an emphasis on Quebec's James Bay region though I saw the need to source a 600% supply expansion from pegmatite, claystone and oil brinefields in lots of other places. However, this mother of all bull markets fizzled in Q2 when interest rates surged higher and the post-covid rebound of China proved still-born. The boots on the ground lithium exploration boom would have carried the juniors, but it never happened thanks to unprecedented forest fires in Canada which closed large regions, in particular the James Bay region of Quebec during the summer. And even when these regions re-opened, it was late in the season and there were lots of logistical problems. By the second half of 2023 risk appetite among investors had been replaced by the joy of money market rates of 5% or better, the first time since the 2008 crash you could make a decent return without any loss risk. By the end of 2023 $5.2 trillion was parked in money market funds, the highest ever.

Funding of resource juniors dropped drastically during H2 and a capitulation sell-off began among the resource juniors. After a dozen bear market years investors were fed up. Out of sight and out of mind. On December 27, the last day for Canadian tax-loss selling, 104 million shares in TSXV resource juniors were dumped at an average price of $0.27. The year finished with a whimper, though maybe that was because for Americans Friday was the last day to crystallize tax losses.

As we head into 2024 the reasons for being bullish about the resource juniors remain the same as a year ago. In fact, it is even better for the lithium space because lithium supply-demand imbalance that allowed lithium carbonate prices to be in the $30-$35/lb range during 2022 has largely reversed, and while the lithium price can sag lower yet, it can only do so temporarily because below $5/lb we will not see a 600% supply expansion by 2030, even less so the 1,200% expansion required if Toyota's solid state battery breakthrough gets commercialized into mass market models like camrys and corollas. In 2024 EV purchasers will be able to get the $7,500 IRA rebate deducted at the car lot, rather than waiting for a refund when they file their tax returns in 2025. This should reverse the slowdown in demand. If interest rates start to subside that will also help with demand. And hopefully Canada does not have a repeat of the 2023 fire season closures so that those boots can properly pound the ground next summer.

My 2024 Favorites will start off as a much smaller list than this past year, and it will include three James Bay lithium juniors. Brunswick Exploration Inc, which finished the year up 73% and was the top performer, will be continued as a Favorite. The junior bobbled its news flow strategy during the last quarter, but Mirage is shaping up as a world class discovery. The other two James Bay lithium juniors will be ones which delivered resource estimates during H2 of 2023, one a Canadian listed junior with Australian backers, and the other an ASX listed junior, both of which have only just started to demonstrate the lithium endowment of their properties.

Gold has finished the year above $2,000, and we are hearing reports of massive physical gold sales through big box discounters such as Malwart and Costco. Americans are so worked up about what a Trump victory in 2025 will do for America's standing on the global stage that they have decided to load up on not just lead, but also gold. And, even as we speak, Putin, spurred on by his Poodle fans around the world, including the anti-mining lobby, has stepped up his assault on Ukraine. The geopolitically driven supply disruptions that I warned about at the start of 2023 have an even greater probability of becoming reality in 2024. Once people start to understand that their Walmart shelves will be either empty or stocked with very high priced Made in America goods, and realize that this is not because of money printing, but rather because key members of the Global East are taking their boots to a smug American rump, we will see a panic scramble to support the discovery and development of new mines in friendly jurisdictions.

That, however, is not what will reverse the looming extinction of the Canadian resource junior eco-system. It will most certainly breathe life into ASX listed resource juniors, which, while they are suffering the same secular bear market trends as Canadian resource juniors, are not crippled by structural problems. The Canadian juniors are handicapped by 4 structural problems that the Australians are not.

One is the Canadian government's embrace of First Nations as a Canadian aristocracy which Prime Justin Trudeau has empowered with a cudgel called "reconciliation" that allows any First Nations group to veto an exploration or mining permit.

The second is a NIMBY anti-mining lobby in Canada and the United States with a fundamentalist mission to make sure that mining of the materials that underpin their comfortable lifestyles is only done in jurisdictions run by autocrats who are able to dump costs on powerless downstream victims.

The third is a financial sector exclusively focused on padding its members' wallets and absolutely oblivious to systems that serve a common good, such as resource juniors exploring for metals whose supply would allow members of the Global West to escape the tyranny of the Global East and secure the inputs for the energy transition.

The fourth is a regulatory infrastructure that views investors as imbeciles and goes out of its way to keep them that way.

The First Nations and NIMBY problems hamper the ability of resource juniors to conduct exploration on a timely basis. The financial sector undermines the ability of resource sectors to fund their exploration activities and achieve price discovery for fundamental progress delivered by exploration results. The regulators are the worst because they pretend that keeping investors ignorant and stupid is in their best interest.

This is a rant about how the Canadian regulators turned Sedar into a time wasting useless piece of garbage. For a graphics based demonstration of how abysmal this "improvement" is, check out the KW August 2, 2023 Episode.

This segment explains why the uptick rule was eliminated in the name of competition that allowed multiple order execution platforms to proliferate, and how the Canadian brokerage industry has turned this situation into a risk capital harvesting machine that undermines price discovery for resource juniors.

First Nations and the PutinXi Poodle NIMBY crowd hurt a key KRO Favorite called FPX Nickel Corp and a bottom-fish called Wolfden Resources Corp. For the FPX saga see August 11, 2023 and September 29, 2023 episodes. For Wolfen see the December 15, 2023 episode.

Chuck Fipke's Metalex Ventures Ltd is the oddest member of the 2024 Bottom-Fish Collection because Chuck has had zero success discovering Ekati for Dia Met, an Metalex is a multi-decade disappointment with one rollback along the way. But the reason I made it a BF and bought it as such was news in November that the company has discovered that spodumene grains ended up in the otherwise uninteresting intermediate grain density fraction of the 10,000 plus till samples Metalex has collected in Quebec James Bay region, initially for diamond indicator minerals, but later also for other heavy elements such as gold. This is the same path followed by Dios Exploration Inc, another bottom-fish, except on a much bigger scale. The company has a couple claims called A1 and A2 located between Brunswick's Mirage and Winsome's Adina projects which were staked for gold, but have pegmatite outcrops that Chad Ualansky's team managed to sample after the fire closure lifted. They did not have an XRF or LIBS unit so whether they are LCT-type will hinge on assays. But Metalex is now looking at ways to efficiently check the samples in areas that are open. They have already done so with samples down ice from known LCT-type pegmatites, so they know the spodumene grains are a meaningful indicator. But most of the staking by juniors has focused on greenstone belts, which are only coincidental to pegmatite emplacement, So my gamble is that once Metalex has checked out its samples, it may discover prominent and short spodumene trains emanating from areas wide open to staking. The hedge is that the junior finally gets a mining lease granted on the Vijoenshof project in South Africa near Kimberley where a cluster of small kimberlites found by De Beers during the sixties but abandoned because "too small" has excellent chemistry for both ecologitic and harzburgitic diamond source rocks.