Beginnings

Tenaz Energy
(TNZ.TO, last at $25.51)

Many of you will already own Tenaz as well and will know the thesis like the back of your hand. For those who are not familiar, TNZ is a small-cap international energy company that is growing through a combination of asset acquisition and subsequent exploitation/optimization. The company has A+ management and staff who have a laser-sharp focus of building per-share value for its shareholders. This is not a hokey mission statement for the company, it is a firm-wide resolve. The company has current run-rate production of approximately 16,200 boepd, the vast majority of which is composed of gas production offshore of the Netherlands and, recently, Germany. TNZ has been a core holding of mine for years and the company’s execution to date has been superb. This quarter, the company will start drilling wells in the North Sea for the first time, with a focus on known accumulations and low-risk step out/near-field exploration targets. Production next year is expected to grow to something in the region of 22,000-23,000 boepd and the company is expected to generate significant free cash flow going forward. Asset acquisition is expected to continue as the company grows towards its goal of becoming a 50,000+ boepd producer. TNZ trades at a low-to-average cash flow multiple relative to its peers and at a significant discount to its 2P (proven-plus probable) net asset value of nearly $50 per share. Not all 2P values are created equal in this sector, but TNZ’s 2P value is of high quality. Because of TNZ’s pure-play status when it comes to exposure to European gas markets, I am particularly intrigued by the approach of winter this year. Europe has skated through the last couple of winters without huge price spikes, but with inventories modest at best – and with volatile LNG as its marginal supplier – a cold winter could focus attention on TNZ in a hurry. TNZ has only about 28 million shares outstanding, which is what provides the kind of per-share torque that investors have enjoyed thus far. Additional value capture through the drill bit and/or M&A activity should continue to benefit shareholders due to this tight capital structure.

Talon Metals
(TLO.TO, last at $0.465)

Talon is a very unique story in that they are operating in a large magmatic system that is prone to the concentration of economic grades of nickel, copper, and platinum group elements — a rarity in the United States. The company’s assets are split between Michigan and Minnesota, but for the purposes of this note I will focus on Minnesota. The project of interest is called Tamarack, and while the geological system at Tamarack has been known for some time, a recent discovery down-dip (deeper than) the existing resource has put a long-tail upside scenario in play. The copper-nickel-PGE grades encountered thus far in the new (aptly-named) Vault Zone are the highest grades I’ve personally ever seen, and while it’s still early days in the discovery, the potential value could ultimately be measured in the billions — or at least that’s the dream. Owing to its location, Talon is also prime for the kind of strategic U.S.-government investment/support that has sent several mineral companies rocketing higher in recent weeks, so here’s hoping. As it stands today, TLO has all of its drills focused on further defining the Vault Zone at its Tamarack project and it’s highly unlikely that they drilled all of it with their first two drill holes, so stay tuned. This is an evolving story, but the nature of the recently encountered mineralization is highly encouraging, so this is a project that should be on the radar of any serious metals investor. Fortunately, you don’t just have to take my word for it… the legendary Robert Friedland was named as a participant in the company’s recent (and heavily oversubscribed) $41 million financing. Many investors, including myself, have historically shunned TLO because it has over 1.1 billion shares outstanding, but now the potential rewards make that bloated share count less relevant given the potential size of the prize.

Midnight Sun Mining
(MMA.V, last at $1.33)

This is a copper story in Zambia, which is in one of the world’s premier copper provinces. There are three legs to the story. The first one is MMA’s near-surface copper oxide deposit (Kazhiba) that is a short haul away (~7 km) from First Quantum’s copper mining operation at Kansanshi. First Quantum has been mining at Kansanshi for years and has largely depleted the oxide layer on top of that deposit. This is important because First Quantum generates sulphuric acid as a byproduct of its sulphide mining and processing operations at Kansanshi. Historically, the sulphuric acid was sprayed on oxide-copper ore on Kansanshi’s heap-leach pads, which neutralized the acid and recovered copper at the same time. An exercise in efficient operations. Now, First Quantum is hungry for more oxide copper ore, and Midnight Sun is drilling out a copper oxide resource on First Quantum’s doorstep which, if run through the existing infrastructure at Kansanshi, would dovetail with the existing operation. An oxide resource estimate is expected for MMA’s Kazhiba oxide-copper this quarter and a contained resource of even 100 million pounds of copper would represent around half of a billion dollars of near-term revenue, with very little associated capital cost.

The second leg of the MMA story is named Dumbwa, which is one of the most attractive exploration targets in the “Domes Region” of the Zambian Copper Belt. With a surface copper anomaly traced over some 20 kilometres of strike length, Dumbwa is a world-class exploration target and MMA is in the process of methodically testing Dumbwa’s potential with multiple drill rigs in real time. Early results have been very encouraging, returning copper grades and widths that are comparable to those found to the west at Barrick’s giant Lumwana project. The Dumbwa drill program is being overseen by Dr. Kevin Bonnell, who was responsible for drilling out the expansion of Barrick’s Lumwana deposit. Dr. Bonnell is ideally suited for the task, and his endorsement of the Dumbwa project should carry weight with investors given his expertise in the region. Results from this program will roll in on a continuous basis through the end of the year and into 2026. This project represents what people in the industry refer to as a “company maker” and, on success, it represents long-tail upside potential that could take the stock to multiples of current levels. MMA is fully cashed up for the task at hand, with nearly $40 million in its treasury, so stay tuned for updates in the near term as the program progresses.

The third leg of the MMA story is composed of exploration and delineation targets on MMA’s lands that are at variable stages of delineation/definition. One of those is called Mitu, where significant mineralization has already been discovered and others are being advanced in parallel. While the story is complete with just the first two legs of the story, this third leg could provide further upside in due course. For a small cap company that most people have never heard of, MMA is very well positioned to make the transition from obscurity to the mainstream, so it’s a quality speculation in my books.

Condor Energies
(CDR.TO, last at $1.63)

I have followed Condor and its team for nearly twenty years and I like it as much now as I ever have. The story is off the beaten track, with assets in Kazakhstan and Uzbekistan, but the opportunities in both jurisdictions have me more than intrigued.

In Uzbekistan, Condor is operating a natural gas concession that averages about 60 million cubic feet per day (~10,000 boepd) of production from Soviet-era fields that have never seen modern exploration and production techniques. There is a lot of low-hanging fruit (natural gas) here and Condor management is well-suited to the task of finding and developing it. With a drilling program underway, investors can expect regular drilling results for the foreseeable future, including the results from the first horizontal wells ever drilled into key reservoirs — which could produce at prolific rates (CDR internally models initial production potential of 13-20 million cubic feet per day per well). Organic production growth aside, CDR’s initial success at arresting pre-existing field declines and growing production could set the company up for the award of additional concessions within the country, so stay tuned.

In Kazakhstan, diesel is in short supply and expensive while natural gas is abundant and cheap. This sets up a natural arbitrage for industrial users like train and truck fleets who are big diesel consumers. By converting diesel engines into engines that run off of natural gas, fleet operators stand to materially lower their operating costs. This is the arbitrage that CDR is seeking to capitalize on and the company is well-advanced in its plans, with its first onshore LNG (liquified natural gas) plant expected to start up in the first half of 2026. CDR has “feedgas allocations” (contracts from the Kazakh government ensuring gas supply from the national grid) for three projects so far, with plans to have 6-7 such projects in due course. CDR’s first customer will be the Kazakh national railway company which is converting some of its locomotive fleet over to natural gas fuelled engines through a partnership with a U.S.-based company called Wabtech. The economics of CDR’s LNG plants are highly attractive and once they are up and running, they are expected to generate significant free cash flow.

CDR’s market cap is hovering around CDN$100 million, which I believe is a very attractive valuation relative to the future potential cash flow that the Uzbek and Kazakh projects could generate. CDR flies way under the radar of most investors, but it has management with deep experience in its operating jurisdictions and a shareholder base that is both supportive and patient. Canaccord and Research Capital cover the stock, with price targets of $4.00 and $5.35 respectively. I think that the lack of market awareness on the name, combined with the incoming news from drilling and LNG start-up in the near term, sets up an attractive speculation here.

Nexgen Energy
(NXE.TO, last at $11.74)

My thesis on Nexgen is very simple. Nexgen’s Rook project is the largest and highest grade development-stage uranium project in Canada and probably one of the best undeveloped mineral deposits in the world, of any commodity. Note that the Rook project is located in the Athabasca Basin, Saskatchewan, which is often referred to as the “Saudi Arabia of uranium”. With a ~$7B market cap, NXE isn’t exactly cheap or under the radar, but its main asset is an absolute King Maker in the uranium industry, so I believe it will eventually be acquired by a larger player. NXE is awaiting its final government approvals in or around February of next year (2026) at which point it will be one of the hottest permitted assets in the hands of an independent mining company in the market. The Rook project has been singled out by the Canadian government as a project of national interest and the project has strong support from the First Nations involved. This asset is truly unique and I see little reason to do anything other than patiently hold it in the current market environment. This is a stock that I would add to if it had a meaningful pullback into the $9.50-10.00 range, but I am content to hold my existing position at current levels.

Brazil Potash
(GRO.US, last at US$2.26)

This is a U.S. listed potash (a.k.a, potassium chloride, a key fertilizer) story that could be called a “fallen angel” in that it has fallen substantially from where it was when it started trading about a year ago (it was US$13.50 last November). The stock has been “basing” (trading more or less sideways in a relatively narrow trading range after a big fall) for about seven months and, from a fundamental perspective, nothing has really changed in terms of the story. As it stands today, the company has drilled out over 20 years of potash resources at its contemplated mining rate. The scale of the resource is absolutely massive — there are likely decades upon decades of additional resource potential beyond the currently defined resource. Located with excellent proximity and access to the agricultural heartland of Brazil, this asset makes a lot of sense economically and fundamentally.

As recently as 2021, Brazil imported some 95% of its potash needs from abroad. Why would you import potash from umpteen thousands of miles away if you had a huge potential domestic source? It makes so much fundamental sense for the country, its banks, and its industry to back the construction of a project of this world-class scale, right? So why the big fall from its IPO levels last November? Nothing fundamental. It had some weak shareholders, selling for non-fundamental reasons, who basically abandoned the story on the side of the road. Well, sometimes one man’s trash is another’s treasure, and I’m running with that theory here. I perked up earlier this year when GRO signed a $200 million Memorandum of Understanding for power line construction to the project, followed by an off-take agreement for 900,000 tonnes per year of potash, taking its total committed volumes to 1.45 million tonnes out of a total contemplated project production level of 2.4 million tonnes per year. Off-take agreements are key in that they provide revenue assurances to the banks or industry players who could/would eventually finance a project like this.

In rough numbers, the project is expected to cost something around $2B to build and would generate something like $1B annually in EBITDA — this is massive for a company of this size. With GRO’s market cap hovering around US$100 million his is a huge project within a tiny company — and while there a lot of unknowns here, the company could be one or two off-take agreements away from having all of its contemplated future production spoken for, at which point banks and/or industry players could start lining up to finance the project. Having just completed a US$28 million financing, GRO is financed well into 2026 and I’m willing to have a bet on this one given the strategic nature of the asset and the associated outsized upside potential for this little minnow. If a few things fall into place, GRO could multi-bag from current levels, and it isn’t far off its all-time lows, so here’s hoping.

Belo Sun Mining
(BSX.TO, last at $0.35)

Belo Sun is a good follow-on to GRO in that it is another fallen angel in Brazil. Once upon a time, BSX was well-followed and well-owned until apathy towards gold stocks combined with some permitting friction/uncertainty took it off of the radars of all but the most stalwart mining investors. With 3.8 million ounces of gold in the proven and probable reserve categories at its Volta Grande project, out of a global resource of some 7 million ounces, BSX has great scale. It also has great economics. At $1200/oz gold, the Volta Grande project was highly economic as detailed in a March 2015 feasibility study… at $2500 gold I suspect that the project NPV would approach $2B or more. Gold is currently over $4000/oz, so think about that for a minute. The market cap of BSX today is $160 million — and while it has moved up from its “dead to the world” (i.e., could-be-had-for-a-nickel) levels of late 2024, this could still go way, way higher if its permitting headwinds are resolved. To that end, a highly experienced group of board members joined the company in June 2025, bringing deep Brazilian legal and permitting experience, along with industry connections to Franco Nevada and the La Mancha group. La Mancha is a very well regarded mining group and became a 17% shareholder in BSX earlier this year. Hmmmm. Things are percolating here and if the permitting roadblocks are cleared, BSX could have a massive re-rate. I typically don’t like betting on permitting, but with the recent high-quality board additions and the valuation discount relative to the potential project NPV — at gold prices much lower than current levels — this is a name where I want to have exposure, just in case. I manage my risk through position size.

Equinox Gold
(EQX.TO, last at $17.26)

I’m including Equinox Gold here because I know that a lot of people/money managers are behind on the gold trade and it’s hard to know what is still attractive after some pretty strong moves to the upside. EQX is a $13 billion market cap company that exhibits a combination of growing production, increasing cash flow, and falling per-ounce production costs – with two-thirds of its production coming from Canada and the United States. Legacy issues meant that EQX was in the doghouse for a long time and its shares have only recently started to perform as operations at its newly commissioned Greenstone Gold Mine turned the corner (from a disappointing start up to an encouraging ramp-up) and it began commercial production at its Valentine Gold Mine (both mines are in Canada) under new leadership. Despite its recent move upwards, EQX still screens as being cheap relative to its peers and the corporate characteristics that I listed a few sentences ago – combined with organic deleveraging (paying down debt) – makes for a compelling “re-rate” story in the eyes of money managers looking to play catch-up on the gold trade. I mention EQX here because if I was running money at a fund that needed to get some gold exposure to an attractively-priced gold company without taking on excessive country risk, it would fit the bill. As a result, I think EQX could draw more “fresh interest” than some of the other larger producers. With annual production set to cross into the >1 million ounce-per-year club in 2026 and beyond, EQX is large, it’s liquid, and it’s a good way to toe-in to the gold trade without taking on the risks associated with some other companies (e.g., single-asset risk, geopolitical risk, extended valuation). I’ve added stock near current levels (high 16’s) and – assuming that the overall market environment was still healthy – this is one that I’d consider adding to if it dipped to the $13-14 range on a sector/market pullback. EQX’s chart suggests it should have very strong support in the $10-11 range, though I’m not sure it would get there without the gold price dropping substantially.

Juggernaut Exploration
(JUGR.V, last at $1.15)

Juggernaut is brought to you by many of the same people that put together Goliath Resources (GOT.V) in the Golden Triangle, British Columbia. It’s an early-stage gold exploration opportunity that won’t see any drilling until summer 2026, but with a market cap of just $40 million and around $10 million in cash, JUGR looks attractive in the current market environment when it comes to gold. The company has identified numerous high grade vein and shear zone samples at surface over a strike length of 15 kilometres within 4 broadly-defined zones. In total, some 500 veins and shears were discovered at surface. There’s little more to say other than the fact that this is an exploration project with good scale, good geology, and good potential for a re-rate if drilling proves that the high-grade zones at surface persist at depth. This is a very early stage situation (read: high risk), but the tight capital structure (only 31 million shares outstanding) provides excellent leverage to exploration success. I don’t know where gold will be next summer, but I would be attracted to this gold exploration project in just about any market tape, so I own a little here and have added to my holding at prices as high as $1.10-1.15 not that long ago. I’m not sure I’d chase it here given the lack of drilling until next year, but this is a project to keep an eye on.

Arizona Sonoran
(ASCU.TO, last at $3.46)

ASCU is one of the most advanced, and largely under the radar, copper development assets in the United States — specifically Arizona. This is what is called a “brownfields” project… a project located in an area of previous mining operations. ASCU’s Cactus project has a total resource of some 11 billion pounds of contained copper, which makes it big enough to be of interest to even the largest mining companies globally… and not only does it have scale, but it also has access to water, power, roads/railways, a local workforce, and local community support; all of which are critical to actually building and operating a mine. A pre-feasibility study (PFS) detailing the project development details and economics is due before the end of the year (i.e., soon) and a construction decision is expected by the end of 2026. ASCU is kind of boring, which is partly why it trades at the lower end of the valuation range relative to its peers, but therein lies the opportunity in my mind. The story isn’t as well followed as other development projects out there, but that’s also part of the thesis here… things are cheaper when they aren’t widely followed. With undeniable scale, strong indicative economics, quality logistics, and a strategic location in the U.S., I think that ASCU is a must-own for anyone wanting long-term exposure to copper. This is the kind of asset that large mining companies love and eventually I think that’s where this will end up — in the hands of a larger company that can buy ASCU and bring the Cactus project into production before the end of the decade. Sometimes boring is good and in ASCU’s case I think that rings true. I’ve added stock as high as $3.30, so I obviously still like this one at current levels.

Update: I wish that we’d launched one day earlier, because this morning ASCU released the results of its pre-feasibility study on the Cactus project and it did not disappoint. With a capex spend of US$977 million, the project returns an after-tax NPV8 of US$2.3 billion. More importantly, the company highlighted that the project would return US$7.1 billion (after-tax) of free cash flow over the 22 year life of the project. Those numbers are based on US$4.25/lb copper (current prices are ~US$5/lb), and remember that they are in U.S. dollars. Those are some great numbers for a project of this scale… and they get even better at US$5/lb spot copper prices which you can read for yourselves in the news release. To put the free cash flow in context… imagine you are 30 years old and have $10 million. If I told you that if you gave me the $10 million, and that by the time you were 40, I’d have paid you $39 million (rising to $72.5 million by the time you were 52), would you take that trade? It implies a 14.5% CAGR (compound annual growth rate) for the first 10 years on your money, and a 9.4% CAGR over the whole 22-year project life – and that’s at a long-term price that is pretty conservative in light of long-term fundamentals (large mines are depleting and new mines are lower grade and harder and harder (and more expensive) to permit and build). So, with ASCU up 11% to $3.46 as I type this, would I still add to my position? The market cap is ~CDN$600 million. A project like this would typically trade at around 0.6-0.7x NPV in the market, ignoring any “made in the USA” premium… it currently trades at about a third of that, so yeah, I’d add to it if my size wasn’t already appropriate.

Foran Mining
(FOM.TO, last at $3.59)

Foran is a good follow-on to ASCU because it is also a copper development project, albeit even more advanced. FOM’s McIlvenna Bay project (located in Saskatchewan, Canada) is permitted, under construction, fully financed, and is expected to begin commercial operations in mid-2026, which makes it truly unique in the mining sector. Because of its size, this is the kind of multi-decadal asset that larger mining companies would love to own. It has an impressive shareholder base, quality management, and has also been flagged as a project of national importance by the federal government. FOM doesn’t screen as being particularly cheap relative to its peers on a NAV (net asset value) basis, but its long projected mine life means that its NAV tends to undervalue its long-term value. A second mineralized zone, named Tesla, is showing significant tonnage potential that could extend the mine life even further. The combination of asset quality, near-term producer status, location, scale, and high-quality shareholder base makes this a must-own for folks who want long-term exposure to copper. I’ve added to my holdings in the low-$3 range and, all else being equal, I would add to my position if it pulled back 10-20% before reaching commercial production. The story is relatively well-covered by sell-side analysts, so this isn’t going to multi-bag, but its volatility should be buffered by its near-term-producer status.

Fireweed Metals
(FWZ.V, last at $3.20)

FWZ has a large-scale lead-zinc-silver deposit at the MacPass project located in the Yukon, Canada. This is a pre-production asset run by a high quality team linked to the renowned Lundin organization — a global name in mining. MacPass boats large scale and some very high grades at its Tom/Tom South zone. Again, this asset is of the scale that is capable of attracting the interest of much larger mining companies and its association with the Lundin group means that those larger companies will be aware of it and will take it seriously. A sidecar bonus to this story is the massive Mactung tungsten deposit, which is absolutely massive on a global basis. The grade and scale of Mactung make it an anomaly in the mining world and the strategic nature of tungsten as a metal means that it could attract attention from a variety of parties. I added to this recently in the low $3 range and would add more if the stock dropped to chart support levels at the $2.70 range. My dream is to see FWZ split in two, with the MacPass project in one company and the Mactung project in another. This one is a long way from production, so it could be volatile, but in the long-term, this is a company that I truly believe will be acquired by a larger player. The company has great access to capital and has additional assays pending from its high-grade Tom South zone from a recently completed drill program.

Sigma Lithium
(SGML.V, last at $9.36)

I’m of the view that the long-term lithium demand story is a good one. There are batteries in everything these days and low-cost producers will ride out the kinds of lithium price lows that hamper production and eventually lead to higher prices. I have no specific insight to offer when it comes to SGML, but this is a large-scale, low-cost, low-capital-intensity, scaleable, high quality asset in Brazil that is one of the larger projects in the hands of an independent producer. Since bottoming in June, the stock has been making higher highs and higher lows with indications of accumulation underway from technical chart indicators like on-balance-volume. After a long fall from its 2022 highs, industry bellwether Albemarle (ALB.US) has nearly doubled since April and when you’re looking for sector sentiment-may-be-turning indicators, keeping an eye on the bellwethers is a good idea. It’s a bit of a loose buy for me, but I’ve added stock around current levels and, all else being equal, I would add more at the lows around $6 if the stock pulled back that far on a broader market dip.