Hard Asset Digest June 2021

Nick Hodge: I’m not sure we’ll ever get that, Mike!

But it does feel good to be getting back to normal. It’s good to be getting back into the world and seeing actual faces, even though we’ll likely be dealing with the fallout in many respects for some time.

Nick Hodge: I can’t believe it’s been six months already! Time flies in a historic bull market coupled with a pandemic, apparently.

Back in January, the tie-up between Endeavour and Teranga had been announced. But even before that, shares of Teranga had risen to over C$16.00 amid record gold prices last year. That’s four to five times higher than where my readers and I were buying it as recently as two years ago.

The deal closed in February, making Endeavour a top ten senior gold producer — and the largest in West Africa — with producing assets in Senegal, Cote d’Ivoire, and Burkina Faso.

In January, you asked me if I had my eye on any other mid-tiers as a potential near-term takeover target. And I told you that one I’d been following for a long time as a takeout candidate was Roxgold.

Roxgold is also active in West Africa. It has one producing mine and is approaching a construction decision on another.

Sometimes this blind squirrel finds a nut I guess! Because Fortuna Silver offered to buy Roxgold in April 2021 for $1.1 billion.



The deal still needs shareholder approval. And I’m not sure Fortuna shareholders like the deal too much. But either way, Roxgold shares have done really well, so I hope some of your readers were able to benefit from that.

Nick Hodge: Generation has been on a tear, too, Mike. It’s developing the Marathon project in Ontario, which is the best undeveloped PGM deposit in North America.

Generation acquired a 51% interest in the project from NYSE-listed Sibanye Stillwater in 2019 and has since increased its ownership stake to 80%.

In March, a feasibility study showed the project had a net present value of C$1.07 billion and an internal rate of return of 29.7%. That’s after tax.

And that was done at lower metal prices. At current prices, the project has an NPV closer to C$2 billion.



For the past few months, it has been putting out some really impressive drill results. So we know the project is larger than that feasibility study shows, too. There are even two known deposits that weren’t included in the study.

A production decision is looming next month. And that’s also the date by which Sibanye can exercise its right to back into 51% of the project.

Whether it owns 80% or 49%, I think Generation is a good company to own if you want PGM and copper exposure because of the quality of the asset.

Nick Hodge: The uranium school is a small one and tends to swim together.

Skyharbour has been off to the races with the rest of the pack — up more than 100% already this year. It has partners exploring several projects while it undergoes drilling at its flagship Moore project. So lots of newsflow, which is good when the sector is hot.



Azarga has a bit of catching up to do, as it’s “only” up 33% this year. Its Dewey Burdock project in South Dakota is now fully permitted. It’s one of the best undeveloped in-situ uranium assets in the US. And that’s going to be important given that Biden sees uranium through a green lens. It’s also expanding its resources across the state border at its nearby Gas Hills project.



A lot to like with both of those companies, especially if the fundamentals keep playing out and the utilities come back in to contract as expected.

Nick Hodge: Well, metamorphosis is the perfect word, I think, for both its relation to geology and the transformation and growth we’re about to go through.

This letter is published by Digest Publishing, which I head up along with Gerardo Del Real. We are in the process of improving our products, how they serve you, and how you interact with them.

We will soon be launching a premium members-only site that will allow you to log in and see your model portfolios. It will also house all your past issues and reports in one place.

In conjunction with this new site, we’re also streamlining our products and launching new ones to make sure we serve you our best possible research and give you access to more opportunities than ever.

As part of that, we will no longer be publishing Hard Asset Digest or Precious Portfolio in their current forms.

As a member, don’t worry. You don’t have to do a thing. And Mike isn’t going anywhere. I’ll formally announce all the details soon.

You’ll be getting Gerardo’s Junior Resource Monthly on the same terms as your current Hard Asset Digest membership.

And we’re going to give you a free year of my Foundational Profits, which covers the full breadth of the market.

In market speak, we effectively forward split your benefits and memberships and renamed the parent company.

Nick Hodge: Sure. It’s a monthly service that covers the entire market, including a model portfolio and buy and sell alerts.

I give monthly macro analysis encompassing fundamentals, technicals, timing, and market psychology. And then I distill that analysis into actionable recommendations using highly liquid companies and sector-themed funds listed on major exchanges.

We’re in oil funds. Tobacco stocks. Even semiconductors.

But I also identify and exploit trends that are going on in the market. You mentioned two.

Clean energy is all the rage right now. But like anything else, it’s cyclical. It was also all the rage back in 2008 when I wrote a book about it. Today, with Biden in office, there is a renewed focus on renewable energy, electric vehicles, and all-things clean. And I have recommendations for that as well.

Same with cannabis. My readers have been profiting from the new trend of smaller US operators being the leaders of growth and focus of acquisitions. Two recommendations await new members once the switch takes place.

Nick Hodge: Well, Digest Publishing is growing rapidly.

We just soft-launched a new service called Junior Resource Insider for high-net-worth and institutional clients. It’s where they’ll get access to Gerardo’s pipeline of private deals in the junior mining space. Readers can check that out here.

Keep an eye out for a letter from me next month about the launch of our premium members-only website and the new products you’ll be able to access as part of it.

Nick Hodge: Well, I’m excited, too. And we didn’t even talk about what’s next for you. But like I said, you’re not going anywhere. We have yet another new product planned that everyone reading today will get access to for free once it’s ready to unveil.

It hasn’t even been a year since we formally launched Digest Publishing with me and Gerardo as front-facing figures. So I’m really excited about this next phase of growth for us and our members.