• Silver production of 4.7 million ounces (27% higher quarter-over-quarter)

• Gold production of 108,487 ounces (up 25% quarter-over-quarter)

• Record $146 million in Free Cash Flow

• Repurchased 216,500 shares at an average price of $9.24 per share and repaid $110M in debt

Coeur also reaffirmed its annual guidance of 380,000-440,000 ounces of gold and 16.7-20.3 million ounces of silver.

These numbers are solid and better than expected. However, the realized prices of gold and silver could have been better:

The average gold price during Q2 was around ~$3,280 per ounce. Further, the average silver price was approximately $35.47 per ounce. According to their reports from last year, there should be no more hedges in place, so it is unclear what caused these misses of ~8% each. Nonetheless, we are happy with the FCF run rate and ounces produced.

Now, for Pan American Silver, we are equally happy. Highlights include:

• Silver production of 5.1 million ounces

• Gold production of 178.7 thousand ounces

• Record free cash flow of $233.0 million

• $1,1B in cash

Their Gold AISC during the quarter was $1,611, which isn’t low, but within the usual range for the company. Silver AISC was at $19.69 per silver ounce, which is solid. Coeur doesn’t report AISC, but we estimate that Pan American’s numbers are slightly better. Their strong financial health allows them to pay a dividend of $0.12 per share later in August (20% increase). Further, the Company repurchased 459,058 shares at an average price of $24.22.

We are looking forward to the contribution of Juanicipio to their production profile. The acquisition went smoothly and should have a continued positive impact on free cash flow, which was driven by high realized prices in Q2:

We note that, like Coeur, realized silver prices weren’t perfect, but they certainly delivered in the gold sector.

Both companies continue to be among our favorite silver stocks, with Pan American being operationally stronger, and Coeur benefiting from its North American-focused production profile and a cult-like status in the sector.

Thank you for reading. We will be on the companies’ earnings call later and publish additional notes if necessary. If you enjoy our content, please consider subscribing. It’s FREE:

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Anti-Thesis

From the moment we enter the school system, we're trained to value precision above all else. When asked to multiply 21 by 19, the only acceptable answer is 399. Say “about 400,” and you're marked wrong. There's no credit for being close.

Coincidentally, many machine learning models are also trained this way. Take cross-entropy loss, for example: the model gets rewarded only when it predicts the exact target, not when it gets close. Close doesn’t count.

And yet, in many real-world contexts, particularly in business and investing, this obsession with precision is often more of a hindrance. That’s why I’m here to make a case for approximation. It takes me about a second to estimate that 3,400 times 1,800,000 is roughly 6.1 billion. Sure, some dork might chime in that the exact result is 6,120,000,000. Great, but they took five times as long to get there. By the time they finish calculating, I've already moved on to the next problem. In domains like investing, that kind of speed and directional thinking can be invaluable. You don’t need to know that something is worth exactly $6,120,000,000. You need to know whether it’s closer to $6 billion than $3 billion. That difference is what determines whether you act or move on.

In the investment world, especially on X, we see a lot of analysis paralysis, where people run elaborate models to prove a stock has 15% upside. But that’s not what great investors like Warren Buffett or Charlie Munger are looking for. They’re not trying to eke out a 10% gain based on some spreadsheet voodoo. They’re looking for sheer, outrageous value, as Michael Burry calls it.

If a stock is trading at 0.2x its intrinsic value, you buy it. Whether it’s actually 0.17x or 0.21x doesn’t matter.

Approximations allow you to quickly screen for opportunities worth investigating. For example, when evaluating mining stocks, a quick back-of-the-envelope P/NAV or P/NPV calculation can help you discard most of the candidates immediately. After you identify a compelling value proposition, you then dig deeper. Identify the reasons why it might be cheap. Estimate the political risk discount. Background check on the management. Etc. But there is no need to do this work for a 10% gain.

To further support our case, here is an excerpt from Ray Dalio’s Principles:

Understand the concept of “by-and-large” and use approximations. Because our educational system is hung up on precision, the art of being good at approximations is insufficiently valued. […] “By-and-large” is the level at which you need to understand most things in order to make effective decisions. Whenever a big-picture “by-and-large” statement is made and someone replies “Not always,” my instinctual reaction is that we are probably about to dive into the weeds—i.e., into a discussion of the exceptions rather than the rule, and in the process we will lose sight of the rule. To help people at Bridgewater avoid this time waster, one of our just-out-of-college associates coined a saying I often repeat: “When you ask someone whether something is true and they tell you that it’s not totally true, it’s probably by-and-large true.”

He describes how getting bogged down in edge cases often distracts from the big picture. At his firm, Bridgewater, they encourage focusing on what’s “by-and-large” true. According to him, that’s where the real leverage in decision-making comes from.

Of course, approximation has its limits. When you’re designing a bridge or calculating doses for chemotherapy, do not approximate. This should go without saying. But in the early stages of business analysis or investment screening, getting directionally correct answers fast is far more useful than slowly arriving at perfection. Hence, we hope that our point has become clear: not everything needs to be calculated to the cent. Doing so might actually slow you down. In fields like investing, efficiency often matters more than decimal-point precision.

So next time you find yourself tempted to fine-tune every input to the last decimal, ask yourself whether the potential upside justifies this effort.

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Anti-Thesis

The demographics of gold investors tend to skew on one side. “Old, fat, bald, white rich guys,” as Rick Rule likes to say.

When we went to the Deutsche Goldmesse in Frankfurt two months ago, we were one of the few attendees in their 20s. Don’t get us wrong, this isn’t an ageist critique. We admire the wisdom that often comes with age. In fact, it’s likely that very wisdom that led many older investors to seek out gold in the first place.

But as much as we are bullish on the commodity, the gold industry is aging. Many of its practices and narratives are becoming a bit outdated.

Why does it matter? Wouldn’t high prices naturally attract a new generation of investors?

Gold has entered a bull market (up 76% since July 2023), but the generational shift is not really in sight. Gold’s returns have been attractive, but the competition for investors is fierce, against stocks, cryptocurrencies, and others. These investment vehicles often intersect with digitalization and technology, hence drawing younger crowds. As such, the average age of the gold investor is almost twice that of the bitcoin investor:

This should not prevent gold from doing well. There is enough liquidity in circulation to take it to new highs, especially if equities underperform. Plus, central banks buying, industrial use, and jewellery shall continue to become a strong source of demand. Frankly, investors need gold more than gold needs investors.

The issue at stake is more about an entire generation ignoring one of the few assets that has consistently defended wealth against inflation, volatility, and systemic failures.

It’s a generation largely unaware that one of its best chances to fight rampant inflation lies in an asset long cherished by older investors. As the U.S. government continues to devalue the dollar, younger people deserve to know that hedging solutions exist outside of volatile stocks and speculative cryptocurrencies.

This isn’t about crowning gold as the ultimate portfolio holding or positioning it as bitcoin’s rival. We believe both assets have a role to play in a long-term portfolio designed to preserve value and hedge inflation. It is about reframing gold as a contemporary asset to preserve and grow wealth.

Digital gold, despite its rough start, is a first step in the right direction. But the industry must go further:

• Build a stronger narrative and culture around gold (that’s what we try to do at Anti—thesis)

• Offer low-fee, user-friendly digital products and promote existing ETFs and ETCs better;

• Modernize marketing practices. The new generations now get their investment advice from TikTok and Instagram, where gold is absent from the conversation.

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If you are young and have enough cash saved for a down payment, you are probably thinking about getting into real estate. You don’t want to miss another train, right?

Whether for investment purposes or to live in a property that belongs to you, it’s common advice nowadays to take out a loan and buy as soon as you’ve saved enough for a down payment. Decades of rising housing prices have framed purchasing real estate as one of the most sound financial decisions. Curiously, this is rarely disputed.

We can’t accurately predict the prices of housing 10 or 20 years from now; everyone who has tried to has failed. But based on past and current data, we can argue that first, real estate returns aren’t as impressive as many believe; and second, market conditions are poised to change drastically in the coming years. And this might give you second thoughts about purchasing a property.

Note: this article isn’t about doing the maths of owning vs renting. There are already numerous resources about that, and it is geographically specific. Its purpose is instead to assess real estate as a financial instrument. Though you will see that our argument inevitably makes a case for renting.

The truth about real estate’s returns

The premise of this article is that real estate (RE) is overhyped from a financial point of view. Historically, RE is greatly appreciated for the leverage it allows, the returns it has provided, and the fact that it is a physical investment. For many, it’s easier to understand than an abstract list of tickers.

In more recent times, housing prices experienced tremendous growth, which has skewed the perception of investors. Many people have in mind the 20%/30% (or more) jumps we saw during Covid. Or the longstanding growth of the 2000s. Looking at the chart of median sale prices of homes for the US since 1900, one can immediately notice the curve going parabolic from the late 90s:

However, this chart omits various factors. The elephant in the room is the loss of purchasing power that the Dollar has experienced during this period, i.e., inflation. If we use the Fed’s preferred measure of inflation, the CPI, and adjust the housing price index against it, we get the following chart:

The returns already look less impressive here. It gets worse when we consider how real estate prices have evolved when measured in gold:

Flat.

Or to stocks:

On top of that, homeowners have to bear with additional ongoing expenses, which are far too often omitted from the real estate’s returns conversation:

• property taxes (typically 1% to 2% of value annually)

• Maintenance (1% of property value yearly)

• insurance

• property management fees (usually 8% to 12% of rental income).

By comparison, many stock index funds only charge annual fees of 0.03% to 0.15%. There are plenty of vault services that charge less than 1% annually for gold storage, too.

Turbulences ahead

We identify several factors that suggest a slowdown in the hike of real estate prices in the future. And with rampant inflation, this would further make real estate less competitive compared to other financial investments. Here’s our case:

💨 Strong demographic headwinds

Fertility rates well below replacement level and rapidly aging populations are the most obvious threats to the housing market. We discussed this problem in our recent post about gold for retirement, and its impact on housing could be as big as on retirement pensions. Japan is somewhat front-running the demographic issues that we’ll soon experience in the West. The country is experiencing a rapidly aging and shrinking population. It was reported to have lost 898,000 people in 2024.

It is interesting to compare charts of population age distribution changes and housing prices side by side. While housing prices are influenced by many factors, one cannot help but notice that these charts follow similar trends:

The logic behind this is not difficult to understand: fewer people free up housing stock, which drives demand and prices down.

However, more recent data shows that Japan has reversed this trend, with housing prices rising and nearing levels seen in the 1990s (unadjusted for inflation). This suggests that demographic effects can be suppressed by larger forces. In Japan’s case, growth has been driven by the largest cities, where land prices are considerably higher. Younger Japanese flocking to the country’s largest cities and increased foreign buyers have kept the housing markets of Tokyo, Osaka and Nagoya competitive:

The price appreciation in these largest cities has, however, come at the expense of secondary cities and rural areas, where no significant price recovery has occurred. Thus, the “revival” of the housing market paints a flawed picture, as growth in the most expensive housing stock masks the poor performance in much of the rest of the country.

💨 Higher interest rates are to come and to stay

The era of low rates has likely ended for the foreseeable future. Since real estate is typically bought with a loan, prices are highly sensitive to interest rates. When money is cheaper (lower rates), housing prices go up. When money gets more expensive (higher rates), prices have to adjust down, as people can’t easily take on very large loans. This is visualized in the following chart.

It is our belief that what seems like a “forever up” loop in housing prices is largely caused by artificially low interest rates that have gone down continuously since the 80s. Contrary to retail (and Trump’s) sentiment pushing for lower rates, our view is that there is currently no reason to cut. Markets are at all-time highs, with the largest US firms earning more money than ever. Pre-revenue AI startups are raising billions very easily. SPAC season is starting again. Gold, which pays no interest, is at an all-time high. Sure, there are data points suggesting cracks in the labor market, tech firms are doing layoffs, and oil prices are soft. We are likely in a stagflation. However, the FED has no tools against stagflation, and it has also lost control of the bond market. With the US credit rating decreasing due to its gigantic pile of debt, yields will go up, rather than down. Debtors want more money in return for buying US debt, and the US will face more competition in the debt market. More on this here:

Anti—thesis

Zoomers, read this if you want to retire one day.

Shrinking youth, shrinking dollar…

Read more

a year ago · 5 likes · Clement Bret and Konrad Brüggemann

💨 Inheritance money won’t be enough to sustain current prices

Recently, The Guardian and other major newspapers claimed that the millennial generation is “on course to become the richest generation in history.” Yet, most millennials remain completely priced out of the housing market. This strong disparity reveals that inheritance money is not a straightforward net transfer of wealth between generations.

Inflation is eating away at the purchasing power; the nominal amount inherited buys less over time. As much of the wealth held by baby boomers is tied up in low-return or depreciating assets like real estate, cars, and savings accounts, it is particularly vulnerable to currency devaluation.

Inheritance is also subject to taxation in most jurisdictions. In the US, the real estate tax rate for 2025 is 40% for a taxable estate value above $1,000,000. The implication is that a good share of baby boomers’ wealth is captured by the government and then inefficiently redistributed back to society.

As younger generations lack sufficient wealth to buy into the housing market, the value of inheritance becomes critical to sustaining housing prices. If inheritance money falls short of bridging the gap between what buyers can afford and sellers’ asking prices, we foresee a scenario where homeowners could be forced to lower their prices significantly.

Adding to this pressure, governments across the West are facing worrying levels of national debt, making property owners an easy target for new taxes. Municipal taxes and property levies are already increasing; for example, Toronto homeowners face a 6.9% property tax hike in 2025. Even those fortunate enough to inherit high-value properties may lack the liquidity to cover rising municipal taxes and strata fees, forcing them to sell and further depressing the market.

💨 Baby boomers will be forced to sell

As a final point and personal theory, we believe that technological advances and increasing life expectancy will reshape the housing market through rising senior care costs. As medical science progresses, people are living longer, which means many will spend more years in retirement homes or assisted living facilities. Those are becoming extremely costly, on average $9,733 for a private room in a nursing home in the US!1. The senior healthcare sector has been one of the most impacted by inflation because of industry dynamics such as labor shortages and rising insurance rates. At the same time, the industry cannot cope with rapidly growing demand, and providers are forced to ration care through pricing, making it even less affordable:

How does this relate to housing? We predict that many seniors will be forced to sell their homes (or mortgage them) to cover these escalating healthcare and retirement costs rather than passing their estates intact to heirs. Again, if new generations are priced out of the market, baby boomers will have to drop their asking prices.

Not all estates are equal

As an end word, we are not advising against buying real estate. Property remains a unique financial decision and its advantages and disadvantages depend heavily on the individual circumstances of each buyer. However, it is important for buyers to recognize that the real returns on housing are often overestimated and have historically underperformed compared to stocks.

We anticipate turbulence ahead for the housing market, driven by generational wealth transfers and stagflation, which may ultimately lead to some much-needed price corrections. That said, we also believe certain segments of the real estate market will continue to perform well or at least keep up with inflation. Properties in highly competitive urban areas are likely to remain in strong demand and the urbanization of society may shield them from demographic shock waves.

And you, what are your thoughts on the trajectory of the housing market?

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Saturday night, Operation Midnight Hammer commenced. Seven US B-2 bombers flew for 18 hours to strike Iranian nuclear facilities at Fordow and Natanz, which means the US is now officially involved in this war. According to Chairman of the Joint Chiefs of Staff Dan Caine, the strikes inflicted “extremely severe damage and destruction.”

Some sources claim the sites had been evacuated in anticipation of the attack. Still, US Secretary of State Marco Rubio stated he doubted Iranian authorities managed to move nuclear material in time. He also emphasized that Washington was not planning any follow-up strikes. This aligns with JD Vance’s comments that the US is not at war with Iran, but rather “at war with Iran’s nuclear programme.” Trump, however, cited “Death to America” chants and said the US will take out more targets until Iran capitulates.

Meanwhile, Israel is not pausing. On Sunday afternoon, they launched new attacks on military targets in Bushehr. Predictably, Russia and China condemned the strikes.

In our view, Tuomas Malinen likely assessed the situation correctly in saying that “the desperate bombing of the Fordow and Natanz nuclear sites, which are so deep and so well fortified that no (conventional) bunker busters can reach them,” may have been conducted to buy time. “The Israelis may have threatened to nuke these sites,” he said on X. It is true that were Israel to deploy tactical nuclear weapons, this would likely cause a nuclear armageddon, as it would open the gates to new forms of attacks, with both sides having access to such weapons (through allies).

On the economic side, let’s revisit the Strait of Hormuz. In this week’s post on oil, we noted that the X rumours about it being closed were, to our knowledge, false. Those rumours have picked up again, with some accounts now claiming that a closure has been “approved by the parliament.”

We still believe that’s unlikely. Shutting the Strait would be economic suicide for Iran, and 75% of Asia’s oil passes through the Strait, so closing the Strait would essentially ensure that China (and Qatar) are not on their side either. And it's unclear whether parliament even has the legal power to enforce a closure. For now, traffic continues to move through the Strait.

That said, we’re seeing elevated GPS jamming activity in the area; not a great sign.

Shipping companies may start to assess the risk differently. Some may pull out for now, unwilling to pay spiking insurance costs. For example, Greece’s shipping ministry has advised shipowners to “reassess passage” through the strait until the situation stabilises, but 175 Greek-owned vessels are currently still in the Gulf area. Others might simply gamble on the route staying open. As of now, it’s still operational.

Meanwhile, market reactions have been telling. PAX Gold ($PAXG), a cryptocurrency backed by gold that has previously served as a weekend proxy for gold’s moves in the following week, is up significantly, closing in on $3500, reinforcing gold once again as a safe haven.

Bitcoin, on the other hand, is acting like what it increasingly is: a high-beta, risk-on asset. It’s getting crushed on the news.

In other, more sector-specific news, the week wasn’t too exciting, but a few things happened:

• Artemis Gold likely fired its CEO (or he may have resigned very abruptly), announcing that Mr. Dale Andres had been appointed Chief Executive Officer and Director of the Company, effective Monday. This development was rather unexpected considering Artemis’ stellar performance over the last few years. It has been a 4-bagger since the start of the bull run in February 2024.

• Also, a few financings took place, including Cygnus Metals, Denarius Metals, Cassiar Gold, Solitario Resources, Golden Cross Resources, Cupani Metals, Trident Resources, and Goldstorm Metals. Talk about the sector being “underfinanced.”

• Lavras Gold had a pretty good hit, intersecting 1.0 g/t Gold over 371 Metres at the Butiá Gold Deposit of their LDS Project in Southern Brazil

• Global Atomic disappointed investors once again when they announced yet another C$30M private placement. They continue to reassure investors that DFC financing is “imminent,” and a JV is nearing final approval. Why might they need C$30M, then? Our stance on the company continues to be that it is a must-sell.

Also, Switzerland lowered its interest rates to 0%, following negative inflation in May. This, too, is bullish for gold and also makes the Swiss carry trade even more attractive.

Our view is however this war develops, the only two things we can be certain of are that it will cause volatility, and that gold (and possibly oil) will likely continue to do well. They might, however, encounter setbacks at any positive news inflow. We continue to stay almost fully invested and looking to add on dips. For now, most equities are near ATHs, so any cash we add to our brokerage accounts stays in 0-1 year treasuries or other kinds of short-term liquidity.

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Monday: Senior officials from the US and China convened in London for trade discussions. Key topics included the US's prohibitions on high-tech product sales to China and China's control over rare earth mineral exports. The meeting was agreed upon during a phone conversation between Presidents Trump and Xi Jinping on Thursday. Trump said they made a “DEAL,” but Xi has been quiet.

Tuesday: Magna Mining released exceptional drill results from McCreedy West mine, including 3.0% Cu, 0.4% Ni, 9.1 g/t Pt + Pd + Au over 10.8 metres and 5.1% Cu, 1.0% Ni, 1.8 g/t Pt + Pd + Au over 6.6 meters. The Sudbury-based projects have been identified as shovel-ready, strategic critical mineral projects by the Government of Ontario.

Wednesday: Silver Mines Limited announced binding agreements to acquire two California projects - the Calico North Project (silver) and Kramer Hills Project (gold-silver) in San Bernardino County for US$1.1 million upfront plus 62.5 million shares. The Calico North Project is located within the Calico Silver District, one of the largest silver camps in the US, with approximately 20 million ounces of historical production.

Friday: The natural gas market initially rallied due to Israel's attack on Iran, but gave back some gains amid seasonal bearish trends. Oil closed the day up 7%. A report from the Environmental Integrity Project highlighted a surge in permit applications for natural gas power plants in Texas, driven by demand from AI-related data centers. More on the Israel-Iran conflict and its impact on oil prices:

Weekend: Sprott Physical Uranium Trust ($U.UN) raised $100M in a bought deal financing with Canaccord. Uranium stocks on the ASX are rallying following the news. This is great news for the sector. We will continue to follow this development and post updates.

Thank you for reading. This week’s recap is rather short, as not many important things happened besides the escalations that everyone has been talking about. If you enjoy our posts, please consider subscribing. It’s FREE.

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On Friday, Israel launched a coordinated attack against Iran, targeting ~100 sites, including nuclear sites, military bases, weapons facilities, and residential compounds:

Iran’s foreign ministry quickly blamed the Trump administration for coordinating with Israel, declaring that Sunday’s scheduled nuclear talks with the U.S. were now “meaningless.” Officials claimed the peace process had been derailed, and warned of retaliation.

A few hours later, Iran reportedly struck a target in Central Israel. Two people were killed and 19 injured. This image circulated on X:

Brigadier General Ahmad Vahidi stated the strikes hit 150 targets, promising the operation would "continue as long as necessary" and that “this is just the beginning.”

Oil markets initially surged, with WTI crude jumping as much as 13% intraday, before closing Friday up 7%:

Traders on X, particularly those on the technical or chartist side, seem to believe that this move ignited a larger incoming increase, and many have already begun calling for prices as high as $130 to even $300 per barrel.

Over the weekend, rumors began to circulate that Iran had closed the Strait of Hormuz, a key chokepoint through which 20% of global oil shipments pass. Our research suggests these claims are false. While Iran has historically threatened to close the strait during periods of tension, it remains open. The waters belong to Oman, anyway. And geopolitically, a full closure would hurt Iran as much as it would hurt the West:

In 2024, about 1.35 million barrels per day of Iranian crude and condensate were shipped to China via the Strait of Hormuz, which is by far the largest buyer of Iranian oil, absorbing more than 95% of Iran’s oil exports. A closure would block this route, forcing Iran to rely on the Goreh-Jask pipeline to the Sea of Oman. However, this pipeline’s capacity is limited to 300,000–1 million barrels per day, creating a significant shortfall. Given Iran’s growing military expenditures and financial pressures, maintaining uninterrupted exports, in our view, is essential:

Either way, a short-term spike in oil prices is, of course, a possibility. But such a move would be backed entirely by geopolitics, and almost no one ever made money speculating on geopolitics with oil futures. Over the longer term, oil prices are highly sensitive to the economy and serve as a real-time indicator of economic health.

The Bigger Picture

With soft oil prices in combination with less drilling activity (US oil rig count), oil tells us that we are (already) in a period of economic slowdown:

Nothing about this chart is healthy or bullish for the near term as it shows the opposite of what we would like to see in a bullish economic environment. Rather, we believe that it reinforces our belief that we are in a stagflationary period: slowing growth, sticky inflation, and weak commodity demand. Under these conditions, it is unlikely that oil prices can sustain a meaningful bull run.

In the near term, while there could be temporary spikes due to further escalations, we project the oil prices to remain soft. Over the medium to long term, low prices cure low prices. It may take 3–5 years, but the supply-demand imbalance will correct. In the meantime, quality matters: high quality producers like Exxon Mobil and Canadian Natural remain profitable at current prices. Our favorite royalty play, Freehold Royalties, also promises strong free cash flow, even at $45 oil.

Therefore, despite our neutral/bearish outlook for the very near term, we continue to own and accumulate and $FRU.TO and are looking to possibly enter a long position in Exxon once the situation in the middle east cools down. Note that we are going to hold these positions for multiple years and we cannot guarantee positive returns this year.

Final Thoughts

The headlines are loud, and the charts are getting passed around like candy on X. But make no mistake, this kind of spike has happened before, and it usually fades just as fast. Oil is currently reacting to fear, not fundamentals. And while fear can move prices, it doesn't build sustainable trends. If anything, oil is telling us a very different story; one of slowdown and capital discipline.

For a real bull market to take hold, we’d need to see economic strength, rising demand, and an uptick in drilling. Right now, we’re not seeing any of that.

So for now, we’re not chasing spikes. We’re holding quality names that can weather the storm. Markets reward patience.

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— Antithesis

On Monday, the Trump administration began a process to open Alaska’s wilderness to oil drillers. To enable this, they relaxed restrictions from the Biden era. Baby steps towards Trump’s “Drill, Baby, Drill” rhetoric... Also, the USD slid to a new 3-year low.

Then, we got the new job reports on Tuesday. This month’s report was weak (139,000 new jobs), and last month’s beat was revised down from 177,000 to 147,000. ADP private payrolls came in below expectations with only 37,000 jobs added.

On Wednesday, China General Nuclear Power Group (CGN) signed a three-year uranium supply contract with China Nuclear Fuel to deliver ~3.12 million pounds of U3O8 annually from January 2026 to December 2028. The contract features a pricing structure with 30% at a base-escalated price of US$94.22/lb and 70% tied to spot market prices. While the market cheered the headline, we believe that this development is not going to reflect lots of other contracting parties, and it is rather a Chinese (partial) subsidy to CGN.

Also, the GDX announced major changes coming to the ETF as it will start tracking a different index than before. This affects a lot of key holdings, and notably kicks $GMIN out of the index. We covered this in more detail on X: https://x.com/ByAntithesis/status/1931064076928762178

Silver is still climbing. After hitting $35 on Thursday, silver broke $36 on Friday (the highest level in over a decade) and closed the week at $35.98. Our favorite silver stocks had a decent week:

• AbraSilver: +11%

• Coeur: +17%

• Pan American: +18%

Some folks on X argue it’s now time to take profits. But, in our view, the party hasn’t even begun.

Other noteworthy items include:

South America: The Colombian opposition senator and presidential candidate Miguel Uribe Turbay was shot in Bogotá on Saturday evening. Thankfully, he survived. Still, the country just can’t catch a break. We missed the Collective Mining run-up due to political risk, and events like this reaffirm why we remain on the sidelines in Colombia.

Canada: Following his recent positive remarks with regards to the oil & gas sector, Prime Minister Mark Carney has announced that he is prepared to sit over the summer to pass a new bill to fast-track major projects. Carney and the premiers agreed on the criteria for what constitutes a project to be in the national interest.

Thank you for reading. We write this to help you with your investments while filtering out irrelevant noise. If you found it useful, feel free to forward to a friend or share on X.

— Antithesis

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Shrinking youth, shrinking dollar

The uncomfortable truth is that many people from my generation (and those who follow) won’t be able to retire, or at least not enjoy retirement in its current form.

Simply put, our current retirement systems were not designed to support countries with an aging population. They were implemented during times when the working population was significantly larger than the retired population and life expectancy was lower. Western countries’ demographics look vastly different now, take, for example, Germany:

Less than half of the population is of working age, and a good chunk of them is not even working. This change in demographics is already putting immense pressure on pension systems worldwide, and the trend is set to accelerate in the years to come.

The consequence of all that is that the money that was supposed to pay for your parents’ retirement is already gone. The money that was supposed to pay for your retirement is also gone. But, what might they use for money?

Now, social security services won’t just default and tell you or your parents, “Too bad, so sad, no payout for you.” It’s likely that first, governments will attempt to increase taxes furthermore or create new absurd taxes (like Australia’s brand new tax on unrealized capital gains) to fund the pensions.

When there won’t be anything left to tax, you might still receive your respective amount, but the purchasing power of that number will be so drastically reduced that it will be impossible to live off of.

The reason for that is that Western countries have a severe debt problem, with the United States leading the pack. Bear with us, because this math is relatively disgusting:

1. At the federal level, the U.S. owes $36,000,000,000,000 in on-balance-sheet liabilities (the government's visible debt), and that number grows by $2,500,000,000,000 a year.

2. Additionally, the net present value of off-balance-sheet liabilities (future obligations of the government, such as those of Medicare, Medicaid, etc.) exceeds $100,000,000,000,000 according to the Congressional Budget Office.

So the current total debt is $136,000,000,000,000. But, don’t be alarmed, it gets worse: the IRS has suggested that the aggregate net worth of American taxpayers is $141,000,000,000,000. So, there is a mere $6T difference, while the debt increases (in total) by $5T a year.

There are only two solutions to this. Either the US defaults, or it inflates away the net present value of this debt. Scott Bessent, United States Secretary of the Treasury, has made it clear that the preferred solution is, of course, the latter.

For non-American readers, this unfortunately also applies to the rest of the developed world and their respective currencies, with the G7 public debt averaging 128%. Decades of financial mismanagement and quantitative easing have left Western states with no option but to sacrifice the purchasing power and real value of the pensions of their own citizens in order to avoid default.

This piece can come off as alarmist. Unfortunately, the debt is real, the devaluation of your currency is real, it is happening right now, and it affects you. The government has lost control of its finances. We find that Lyn Alden’s metaphor of an unstoppable train accurately describes the situation: “Basically, what that means is they don’t have brakes anymore. Nothing stops this train because there’s no brakes attached to it anymore.” It’s time for zoomers to take control of their own destiny.

Gold to the rescue

Now that the bear case for fiat currencies has been established, let us establish why this same math represents the bull case for Gold. Historically, people tend to buy Gold when they are scared that their currency’s purchasing power is declining. That is because Gold has done an excellent job of maintaining purchasing power for thousands of years. It can’t be inflated away. Further, it has shown resilience across economic cycles and geopolitical changes, enjoys high liquidity, carries no credit risk, and is scarce. Benefiting from multiple demand sources (investment, jewelry, technology), it does not rely on specific industrial applications as opposed to other metals.

Why choose gold over stocks if stocks can yield higher returns? It’s not a matter of choosing one over the other. Gold should complement stocks within a diversified portfolio.

In the perspective of retirement, owning an asset class decoupled from the stock market is critical. Imagine someone ready to retire but whose portfolio consists solely of stocks or mutual funds during a bear market. They may be forced to delay retirement because they cannot sell at a favourable price and might have to wait several years for the market to recover. On the other hand, gold acts as a hedge during bear markets, allowing for withdrawals or liquidity to buy stocks when they are cheap.

A testimony of its faculty to retain/gain value in harsh economic times is the 1970s, when the Dollar lost 75% of its purchasing power. Between 1971 to 1980, Gold went from 35 Dollars to 700 Dollars.

Why are we convinced that this will happen again? First, gold is denominated in U.S. dollars. Second, we argue that gold is more than a simple hedge. Over the past 25 years, gold has delivered average annual returns near 9%, matching equities and better than bonds. There is still plenty of room for growth on top of that. While it is already popular in Eastern cultures (China, India) to save in Gold, the West has not yet fully adopted this trend. In fact, the market share of Gold as an asset class in the West is historically low.

Investing in Gold 101:

These are the three main ways to invest in Gold:

• Physical gold (coins, bars)

• Gold ETCs (Exchange Traded Commodities)

• Gold mining stocks

Physical gold is the best, but it requires secure storage. Also, you pay a small premium to your dealer, so physical Gold shouldn’t be traded; it should be kept for years to decades. Gold ETCs, in contrast, are super liquid, easy to trade, and convenient. You don’t need to take care of storage either, just buy the ETC in your brokerage account. For American investors, we recommend (Sprott Physical Gold Trust), whereas for Europeans, good options include iShares physical gold, Xetra-Gold, and Euwax Gold. The option with the most leverage (to the upside AND downside) is gold mining stocks. These come with lots of additional risk, but in a gold bull market, these stocks truly scream. For beginners, we recommend the biggest and the best: and .

However, please always keep in mind that gold holdings should still be diversified with other assets to balance risk and return. Also, understand that gold does not generate income like dividends or interest, i.e., it has no yield. There are some interesting methods to generate income with gold, like Monetary Metals, but we haven’t tried them yet.

For beginners just getting into it, we would recommend starting with a small allocation to gold within a diversified portfolio. Use reputable dealers in your area or platforms for physical gold or ETCs.

Platforms where you can purchase gold ETCs easily include:

• Trade Republic (Europe)

• Trading 212 (Europe)

• Wealthsimple (Canada)

• Robinhood (US)

• IBKR (worldwide)

If you already have a brokerage account somewhere, you can likely buy a Gold ETC with it. As long as you have access to the NYSE and TSX, you can also buy the majority of gold mining stocks (some are also on the LSE, ASX, or TSX-V).

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1. Guinea’s military government cancelled 129 mineral exploration permits on Monday, including four gold exploration permits from Endeavour Mining. Officials argued that those were mostly underutilized licenses, but this move is especially concerning as Niger, Mali and Burkina Faso have been similarly revoking permits or nationalizing assets recently. We stay away from West Africa for now.

2. On Tuesday, Harmony Gold (NYSE: HMY), a large South African gold producer, agreed to pay $1.03 billion to purchase MAC Copper (ASX: MAC) in Australia. This is another significant M&A deal, and those are currently really speeding up. We see Liberty Gold and G2 Goldfields as upcoming prime targets.

3. A US court ruled Wednesday that Trump’s reciprocal tariff scheme is illegal, challenging his use of the International Emergency Economic Powers Act. US and Asian markets went up on the news. We believe that this optimism is unwarranted, and Trump will likely find a way to push through with tariffs.

4. Elon Musk is being formally offboarded from his role at D.O.G.E., which turned out to be a non-starter. Readers of David Stockman’s book, “The Triumph of Politics,” anticipated this. Needless to say, the pressing deficit will likely cause dollar devaluation, supporting an extended bull run for precious metals.

5. Argentina raised $1B selling peso-denominated sovereign bonds to foreign investors in US Dollars. This is a vote of confidence in Argentina and Milei, and bullish for projects in Argentina, such as AbraSilver, which will benefit from the RIGI initiative the most if Milei gets reelected in 2027.

The weekend was rather quiet (after filtering out all the noise), but on Sunday, US Treasury Secretary Scott Bessent did say that “The United States of America is never going to default, that is never going to happen.” Further, he claimed, “We are on the warning track and we will never hit the wall.” Of course, he would say that. However, there really only is one alternative solution, which is inflating away the net present value of the debt. The US government did this in the 1970s, and our suspicion is that:

Anyways, retail investors are currently very proud of buying the dip in April, as stocks have rebounded sharply. Suits sold and urged caution. Unfortunately, it is currently our outlook that the worst is yet to come, possibly yielding bad surprises for retail. We shall see.

Anyways, all of this is pretty much bullish for gold and, as such, miners. That is why we plan to use the weakness in a few select stocks next week to accumulate more. Stocks we’re looking at include and $GTWO.TO. For gold investors, we believe the best is yet to come.

That’s it for this week. As we said, no spam, and straight to the point.

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ExxonMobil’s discovery of nearly 11 billion barrels of oil in the deep waters of Guyana has changed the country forever, from being largely under the radar to being the fastest-growing economy in the world. This staggering growth is hard to ignore. But are there opportunities for retail investors like us?

Guyana has largely embraced oil development, signing deals with Exxon, CNOOC, and Hess Corporation. With oil accounting for 88% of its exports, the country has joined the very inclusive club of petrostates. While abundant natural resources can lead to the so-called “resource curse” (nations with great natural resource wealth experiencing lower economic growth than countries without), Guyana seems to manage well with 43% GDP growth in 2024.

The history of petrostates is not as modern as it used to be. This allows Guyana to learn from the past failures, from the countries that won the lottery but went back to being broke some years later. The list of those is long: Algeria, Nigeria, Libya, Iraq, and, of course, Guyana’s neighbour, Venezuela. Sure, some of these countries had unfortunate circumstances and/or received a forceful dose of democracy from Uncle Sam. In this regard, Guyana’s prospects appear more promising. The government isn’t trying to trip the US up. In fact, Exxon, a flagship American corporation, is making ridiculous money from its operations in the country. Additionally, Guyana is a relatively stable English-speaking democracy.

For investors, participating in the early boom of an entire nation can be very exciting. Yet, in the case of Guyana, direct investment opportunities for retail investors are limited, with only 12 stocks actively trading on the country’s national stock exchange. Their foreign and early-stage nature also makes them inherently riskier plays. We strongly recommend that anyone considering this path take the time to understand the economic and political forces at play in Guyana.

An oil success story

Guyana’s economy was relatively unremarkable before the massive offshore oil discoveries in its territorial waters in 2015. Since then, its economy has more than tripled.

According to the International Monetary Fund (IMF), between 2022 and 2024, Guyana’s real GDP grew at an average annual rate of about 47%, making it the fastest-growing economy in the world. Its GDP per capita also saw a significant gap-up, from US$6,477 in 2019 to US$30,962.25 in 2023. That makes the country the richest in South America by GDP per capita.

Oil is the main driver behind the economic miracle. The production rapidly increased since the discovery of 2019, and Guyana has benefited from growing oil prices post-covid. Production reached an average of about 645,000 barrels per day (bpd) in late 2024. To put it in context, that makes Guyana the 28th largest oil producer in the world, far behind the OPEC giants. So why is Guyana doing so well when it produces less oil than countries like Colombia or Egypt?

One key factor is Guyana’s small population of just 826,353 (2023 census), which is less than the urban population of Tucson, Arizona. This smaller population simply means the oil wealth has fewer mouths to feed and can be leveraged more effectively. Other successful small petrostates like Kuwait, Qatar, and Norway have previously shown how smaller populations can maximize resource wealth.

However, population size is not the only factor. Guyana has also done an excellent job allowing ExxonMobil to focus on what it does best. The government has established a transparent and efficient policy framework without excessive red tape. Unlike many oil-producing countries that nationalize assets or create state-owned enterprises (SOEs) with complex joint venture rules, Guyana has allowed ExxonMobil and its partners (Hess Corporation and China National Offshore Oil Corporation) to retain full ownership and operational control of their oil projects. Many countries in Africa and Latin America have nationalized oil assets or imposed government participation that often slows project development and introduces inefficiencies such as corruption and bureaucracy. The struggles of Pemex (Mexico), PetroSA (South Africa), and Sonangol (Angola) have provided a strong case for privatization in the oil sector.

While ExxonMobil and its partners have full ownership stakes in the oil projects, the Guyana government has kept ownership of the oil reserves. It also maintains some control by approving and overseeing projects. For example, it approved ExxonMobil’s Whiptail Project in 2024 with strict conditions, intending to balance foreign investment and safeguard national interests. This balance has, however, been subject to criticism from external actors. The 2% royalty rate for the Exxon-led consortium was among the lowest in Latin America, and Guyana has been urged to get a better deal. Which they did when the government hiked the royalty rate to 10% in 2022 and then introduced a 10% corporate tax in 2025. However, these changes do not apply retroactively to the original Stabroek Block contract with ExxonMobil, which still benefits from the lower rates.

Resource curse?

Guyana’s story has drawn significant attention from newspapers and social network commentators, many of them fearing that the country would be another victim of the resource curse.

We briefly defined the resource curse in the introduction, but to go more into detail, it is a paradox in which countries rich in natural resources (particularly oil, gas, and minerals) often encounter unique socioeconomic challenges such as slowed economic growth and violent conflicts. Subsequently, these countries become worse off than countries without abundant natural resources.

It’s interesting that many journalists were quick to raise such concerns for Guyana, given that the resource curse remains a theory whose validity is still very in question. The relationship between natural resources and GDP growth has been studied extensively by many scholars and economists, with conflicting conclusions1. Moreover, the world has seen countries like Qatar, Malaysia and Botswana successfully leverage their resource dependence to build wealthy and stable nations.

One possibility is that the “curse” is actually a reflection of poor economic performance and political framework that preceded resource dependence. The weak institutions and bad policies in place would cause mismanagement of the resources, rather than resources causing those problems. If this is true, Guyana would be in a better position than countries often cited by the curse advocates, such as Angola and Venezuela, both of which were under military rule during their oil discoveries. Scoring 6.05 in 2010 and 6.12 in 2020 on the Economist Democracy Index (where 9 is the highest score), Guyana is classified as a flawed democracy. While it faces challenges, the country and its politics are functional overall.

It is arduous to predict the fate of Guyana with so many factors at play. Nonetheless, the current developments are promising. In 2025, Guyana’s flagship upstream development, the offshore Stabroek block, is due to increase production by 40% to 870,000b/d. Meanwhile, the government is using the oil wealth to fund broad infrastructure projects and social programs. With the medium/long-term goal of economic diversification, the government is actively promoting investments in other industries such as agriculture and mining. The non-oil economy recorded 12.6% growth in the first half of 2024, up from 11.7% the previous year2, signalling more of a positive spillover effect from the oil sector rather than evidence of a resource curse so far.

Upcoming election and Venezuelan threat

Guyana will hold general elections in September 2025, and it is expected that President Irfaan Ali will be reelected for a new five-year term after a contentious vote in 2020. Ali’s People’s Progressive Party/Civic (PPP/C) may gain a more decisive majority in parliament from the current 33 out of 65 seats. It’s important to understand that the main contenders, the PPP/C and the APNU/AFC coalition, represent more than just political parties. They embody the two largest ethnic groups in Guyana competing for political power: the Indo-Guyanese largely support the PPP/C, while the Afro-Guyanese predominantly back the APNU/AFC.

The existing polarization within Guyanese society is intensified by the high stakes involved: the eadership of a petrostate in the making and the opportunity to shape the country’s transformation. As such, the upcoming elections will serve as a crucial test of Guyana’s political stability. Investors may prefer to await the outcome of the election to mitigate the risk of potential turbulence.

Internal risks are also accompanied by external ones as tensions with the neighboring country Venezuela have been intensifying since the oil discovery. Venezuela has long claimed the Essequibo territory, which covers about two-thirds of Guyana’s land but only 15% of its population. While Venezuela’s territorial claims were less aggressive during Hugo Chávez’s rule, the successful oil drilling in the Stabroek Block, located offshore the Essequibo region, has surprisingly reignited Venezuelan territorial ambitions.

Recently, the following diplomatic incidents occurred:

• In March 2024, Venezuela passed a law that designated Essequibo as a new state of Venezuela,

• In March 2025, a Venezuelan naval patrol vessel entered Guyanese waters near an offshore oil block of ExxonMobil,

• In May 2025, Venezuela decided to elect officials to administer the territory of Essequibo.

It’s clear the situation isn’t improving.

The good news is that international law is on Guyana’s side and perhaps more importantly, Guyana enjoys more sympathy from the international community than the hostile state of Venezuela. The United Kingdom and the United States have voiced their backing for Guyana in its geopolitical quarrel. It is also a massive advantage of having a US company operating on the territory at risk. The White House would likely be upset to see the interests of ExxonMobil compromised, especially amid the current global energy security challenges.

Despite the international support for Guyana, the threat of an escalation of the conflict is very real and we urge investors to factor it as part of their investment thesis.

Conclusion: bullish outlook, risk-adverse investors stay out

Guyana was dealt a good hand with ExxonMobil’s discovery of massive oil reserves in its territorial waters. However, this would amount to nothing without the right strategic decisions on how to leverage these resources. So far, these decisions have proven to be successful and Guyana is on its path to build a wealthy petro-state in the South American jungle, provided internal and external tensions do not esclate further.

Large amounts of money can be made during such exciting times for adventurous investors. Infrastructure, industries and services can all benefits from the spillover effect of oil revenues. With limited offer on the local stock exchange and few foreign companies operating in the country, one challenge for investors will be to find ways to get exposure to opportunities.

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Operational & Financial Results

• operated closely to plan at TZ, despite challenging weather, produced 35k oz at $960 aisc, generating $36m FCF (lower than q4)

• continue to guide 175-200k oz, weighted towards H2

• 0 lost time injuries

• TZ remains in the lowest cost quartile globally

• $98m revenue at average realized gold price of $2766 (8% higher than 24q4)

• $149m cash balance (6% higher)

• $0.16 fcf/share

Oko West

• Robust FS in April

• 350koz/yr average prod.

• $3B NPV at $3k gold, nearly $4B at $3400 gold

• Comparable quality to Eskay Creek (Skeena)

• Start main construction in 26q1 and production early 2028 (FP in late 2027)

• Early construction works commenced in March

• Formal construction decision expected in 25H2

Catalysts

• TZ nameplate in Q2

• Oko west financing & construction decision in H2

Q&A

• Q: are there any surprises/concerns regarding TZ ramp up?

  • A: No issues since the mill liner replacement in april, throughputs inline w/ expectations

• Q: any adjustments needed to make bc of weather?

  • A: rain was abnormally high but we managed well, shouldn't affect capacity

• Q: is there exploration upside potential at oko west compared to the FS?

  • A: actively exploring w/ $8m budget, resource models will be updated, expected to increase

• Q: Most of the upside is at depth - could exploration change the mix of underground vs. open pit?

  • A: Current exploration is near surface, will impact the open pit portion, not drilling at depth at this point

• Q: key steps for Gurupi's timeline in 2025/2026?

  • A: engaging w/ stakeholders in the region, permits, surface soil sampling & trenching, possibly increasing exploration budget in H2 and coming yrs

• Q: updated resource before PEA (Gurupi)?

  • A: already sufficient resource to support PEA, w/ cont. exploration probably one more update leading into PEA in 2026

• Q: how many days were lost in Q1 and how much of that extends into Q2?

  • A: lost 5 days in April due to scheduled shutdown for mill liner replacement.

• Q: re oko west, what should the total manpower be towards EOY?

  • A: 350 beds by end of may, 750-1000 beds by EOY.

• Q: are u looking at commercial loans for financing or any other options?

  • A: lots of options, leaning towards equipment financing and corporate revolver w/ canadian banks, likely limited balance (tied to gold price and FCF generation at TZ)

• Q: are you getting near nameplate capacity?

  • A: May-to-date 108% of nameplate.

• Q: going forward no more mill liner replacements?

  • A: another replacement in 6 months

• Q: oko west spending according to guidance?

  • A: likely a little push to H2 (timing)

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Canadian Natural Resources (CNQ) continues to fire on all cylinders, cementing its position as the heavyweight champion of Canada’s energy sector. With 1.58 million barrels of oil equivalent per day produced in Q1 2025, $4.53B in adjusted funds flow, and $2.46B in net earnings, the company outpaces domestic peers in scale and profitability. But beyond earnings, CNQ's future hinges on access to international LNG markets. We investigate how Mark Carney will make or break this opportunity.

Here are the highlights of the last quarter:

• 1.58M boe/d production, up 19% YoY

• Adjusted net earnings were C$2.436 billion, up from C$1.474 billion a year earlier

• Higher sales volumes (+35%) and higher realized prices, with Q1 realized oil at ~$79.85/barrel and gas at C$3.13/Mcf

• Realized synthetic crude oil operating cost was about C$21.88/bbl, which is $7–10/bbl below its peers

• $1.8B returned via dividends (the 25th straight year of raises) and share repurchases

In short, cash flow and margins are at multi-year highs and the company is delivering strong shareholder returns despite a weaker price environment, as the breakeven WTI remains in the low–mid $40s/barrel.

Notably, a major concern is Canada’s dependence on U.S. markets. The U.S. has maintained a 10% tariff on Canadian oil and gas since March 2025. This raises costs for exporters. CNQ noted that widened oil differentials have already narrowed thanks to Trans Mountain, but any new U.S. trade barriers (or pipeline outages) could again disrupt flows. Management explicitly cited geopolitical trade uncertainty as a key issue in their outlook.

CNQ’s Positioning in the Energy Sector

We compare CNQ with domestic and international peers in terms of output and profitability. We chose Suncor, Cenovus, and Tourmaline as comparable majors from Canada, and included the smaller ARC Resources and IPCO for illustrative purposes. Additionally, to compare the Canadian sector to its US peers, we added Exxon, Chevron, and Occidental to the comparison.

Canadian Natural is the largest oil and gas producer in Canada, and slightly bigger than Occidental. It gets dwarfed by the US giants Exxon and Chevron, however:

The chart looks pretty similar when comparing net earnings:

The most notable difference is that Exxon earned almost 5x as much as Canadian Natural (all numbers are in $CAD), despite only producing ~2.5x as many barrels. Similarly, Chevron earned four times more while producing twice as much oil. This is because US producers currently have stronger margins. Occidental Petroleum, which is Warren Buffett’s preferred oil stock, continues to look comparable to CNQ, with slightly weaker margins than its US peers.

In terms of domestic peers, Suncor’s Q1 results showed weaker refining margins, as its upstream cash flow was strong but R&M earnings fell on lower crack spreads. Cenovus saw refining gains but upstream realized lower oil prices, driving net income down. CNQ is more upstream-focused, which mitigates refining volatility but leaves it fully exposed to WTI and WCS price swings.

The Valuation Perspective

When stacked up against ExxonMobil, Chevron, and Occidental, CNQ looks modest in market cap but quite lean on valuation:

When annualizing Q1 earnings, CNQ shows a higher earnings yield than the two US giants and some domestic competitors. However, it falls short of Suncor, Cenovus, ARC, IPCO, and Occidental. This is probably why Buffett is in Occidental but not in Chevron or Exxon.

Taking into consideration that proven majors tend to trade at premiums compared to smaller competitors, this figure is quite surprising, and potentially an opportunity.

The annualized funds flow yields paint a similar picture, with the key difference being how much IPCO stands out in this comparison:

Is IPCO worth a second look, or is it cheap because it operates in high-risk jurisdictions like France?

Either way, Canadian Natural is, of course, not the cheapest stock in this list. Among its Canadian peers, it is pretty much in the middle on a valuation basis. However, it is trading somewhat cheaper than Exxon and Chevron, which it compares well to in terms of quality.

The Mark Carney equation

Mark Carney was probably not the favorite candidate of Canadian O&G equities during the April 30th election. And we can’t blame them — former Liberal PM Justin Trudeau made consistent efforts to undermine the Canadian oil and gas sector, to say the least.

Attempting to estimate the impact Carney will have on O&G is tricky. Pundits have portrayed him as a pragmatic man and a seasoned economist. His pedigree is indeed superior to that of his predecessor. However, in the fun game of politics, competence does not always rhyme with excellence.

Some of the statements made by the new man in power and his first actions can allow for an educated guess. Notably, one of his first actions was to scrap the consumer carbon tax, a levy implemented by his own party in 2019. Though the tax did not directly impact O&G equities, its removal is a positive signal for the sector and a relief for the broader Canadian economy.

During his campaign, Carney expressed a desire to make Canada more independent from the U.S. and to support the national oil and gas industry. In a speech in Calgary last April, he even vowed to make Canada “the world’s leading energy superpower.”1 But what kind of energy? From his campaign rhetoric, Carney appears more pragmatic than Trudeau, giving a prominent role to oil and gas in Canada’s short- and medium-term energy future.

That said, his words must be taken with a grain of salt. Carney was, after all, a politician on the campaign trail — trying to appeal to energy workers, conservatives, and his Liberal base all at once.

To better understand his position, we looked back at Carney’s earlier comments on the sector. In a 2023 interview, he stated: “The world is raising investments in clean energy, but oil and gas will still be necessary and will need investment to keep up with demand.” Yet, in other contexts, he’s made less O&G-friendly remarks. His convictions appear closely tied to the circumstances in which he operates, whether as head of impact investing at Brookfield or Special Envoy on Climate Action at the UN.

Only time will tell how the new PM will truly approach the sector. But while geopolitics certainly matters for O&G investors, we believe Canadian O&G equities will continue to thrive, even if Carney shows little support for conventional energy producers. The current strength of the sector is a testament to its resilience. Despite enduring strong headwinds during Trudeau’s decade-long mandate, these companies have managed to record solid earnings and reward shareholders. And we expect that to continue.

Conclusion

Canadian Natural had a strong quarter and is doing well even in the face of trade barriers. While the real headwind for the Canadian O&G sector has in recent years been its own government, as former PM Trudeau historically did not see a business case for it, we think that this situation could slightly improve under Carney. CNQ remains attractive in terms of profitability, scale, and valuation. It might be considered a “one size fits all” stock for investors looking to get exposure to Canadian oil and gas.

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Coeur Mining ($CDE) posted its first 2025 Quarterly today. Here are the key takeaways:

• Coeur produced 86k ounces of gold at $1650 AISC with an average realized gold price of $2,635

• and 3.7M ounces of silver at $21 ASIC at a realized price of $32.05

• resulting in $33M net income

• they now have $78M in cash and $468M in debt

• and they expect the next quarters to be stronger than Q1

Coeur had a good quarter. Debt paydowns suppressed free cash flow, which is okay. They need to fix their balance sheet. The balance sheet is (still) ugly, but it’s now better than Hecla’s, which is one of their main competitors for go-to silver stocks. Hecla dropped 20% this week after releasing pretty bad earnings.

Back to Coeur, compared to previous quarters, revenue is up nicely:

With gold at all-time highs and silver at multi-year highs, this is expected, but still good to see. Their AISC margins on gold are now around $1000. This will get even better when hedges expire and gold remains elevated. AISC margins on silver are $10, which is also good. These numbers are at the higher end of the industry, but with most of their operations in the US, that is reasonable.

At $40 silver, the AISC margin doubles, and at $50 silver, it triples. This makes them very leveraged to higher silver prices, which we expect, both in the near and medium term.

We would also like to point out that their G&A expenses seem to be well managed:

For a company of this size and status, this number is okay. Many companies start to raise G&A as soon as they earn a little bit more money. In the case of Coeur, G&A is actually down YoY ($14.4M in 24Q1 vs. $13.9M this quarter). Considering the weakening dollar over this period, this is especially nice to see.

Las Chispas

This is the first quarter that includes production and revenue from Las Chispas (Mexico), which they now operate as they acquired SilverCrest last year. FCF from Las Chispas totaled $92 million, which includes the sale of held bullion and finished goods (totaling $72 million). This is after operating the mine for only roughly 1.5 months. They expect Las Chispas to produce 42,500 - 52,500 ounces of gold and 4.25 - 5.25 million ounces of silver this year. Those numbers are decent and realistic. They also announced some high-grade discoveries at the project, which could hint at higher output in the future.

Wharf

Their South Dakota mine, Wharf, is another core asset. Gold production in the first quarter decreased 7% QoQ to 20,491 ounces. According to the company, this is largely due to the timing of ounces placed on the leach pad in the prior quarter. Full-year 2025 production is expected to be 90,000 - 100,000 gold ounces and 50,000 - 200,000 ounces of silver. Production at Wharf should be monitored, and we want to see at least 25koz AU next quarter. Further, we see synergy with Dakota Gold’s Richmond Hill project and would like Coeur to explore potential opportunities.

This is the total production guidance for each project:

This is looking pretty good. As a 400koz gold producer and the largest US silver producer, the stock is pretty cheap at a $3.5B market cap. With their current margins, they’ll be making around $500-600M in FCF this year, putting them at a 6-7x multiple. Once silver breaks above $35, this stock is off to the races.

Conclusion

The earnings call is later today, and we’ll make updates to this post if necessary. However, this was a good quarter for Coeur, and we continue to be bullish on the company. We expect the production profile to improve as Coeur gains more experience operating Las Chispas and Wharf’s output picks back up.

This is a top pick for silver stocks with multi-bagger upside at increasing silver prices.

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Human capital

• Proven people, successful in bad markets (either run by tier one promoters or top tier two promoters, promoters who are young enough that they aren't yet tier one, but have already had two or three successes behind their belt)

• Management should not have a history of jumping between unrelated commodities or jurisdiction (ambulance chasing)

• The past successes of the company were achieved by the current management

• Management is transparent and communicates regularly
  
  

Financial management

• Bonus structure linked to share price (SP) and not M&A (incentive for management to favor M&A activity only if truly accretive to the company)

• No hefty change of control payments if the company gets taken over (golden parachutes)

• No personal loan from company to key members

• No outsized/discretionary bonus for normal events (management is rewarded despite no catalysts)

• No ill-timed paid promotions/no promotions when no catalysts

• First-class travel

• No excessive G&A (to be analyzed in the context of the operations)
  
  

Financing/shareholding structure

• Management should have a stake in the company, however not too significant (you want skin in the game, but an overdominant stake is dangerous for minority shareholder rights)

• Options should have a vesting period (no vesting promotes short-term thinking)

• No insider-only financing (unfair to shareholders and governance risks)

• No option grants post-financing

• No bonus structure linked to market cap

• No change of control payments

• Management shows effort to limit shareholder dilution

• No related party transactions

• Cheap shares in spin-off
  
  

Conflict of interest

• No key member personally owning royalty on the company's projects (check NI 43-101 on SEDAR)

• No key member has high role at unrelated company

• Management members do not personally own royalty on the company’s flagship project

• No property deals/financings between companies under the same management

• No nepotism (hiring friends, family or other close personal connections)

• No cronyism (favoring friends or allies for contracts, promotions or deals)

• No cozy consultancy relationship (using one firm for consultancy on fieldwork, technical reports, QP sign-offs)

• Reputable auditors, consultant, lawyers, IR firms
  

Distractions/commitment

• Management does not have too many side-gigs

• Insiders are buying

• CEO is not relocating far from the flagship project

• CEO is not going through divorce or the lost a child/spouse (emotional distraction)

  
  

For your convenience, this list is also available as a checklist with checkboxes, ready to be downloaded and printed. If you feel any important element has been missed from the list, let us know in the comments and we will make the amendments.

Google Docs file

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The Canadian uranium mining sector operates under strict regulatory oversight, with the Canadian Nuclear Safety Commission (“CNSC”) playing an important role in the approval process.

Denison Mines ($DNN) has recently received confirmation of their CNSC public hearing schedule for the Wheeler River Uranium Project, specifically for the Phoenix In-Situ Recovery (ISR) operation. This follows the CNSC’s approval of Denison’s Environmental Impact Statement (“EIS”), which was granted in December 2024. The CNSC is now preparing the Environmental Assessment (EA) Report, which will be made available for review by Indigenous Nations and communities and the public before the hearing.

The CNSC has scheduled the public hearings in two parts:

• Part 1: October 8, 2025

• Part 2: December 8-12, 2025

Interestingly, NexGen Energy, which received Provincial EA approval already in November 2023, will have its public hearings later than Denison (November 19, 2025, and February 9-13, 2026). One wonders what NexGen did in the meantime.

Nonetheless, these hearings represent the final step in the federal approval process for both the Environmental Impact Assessment and the License to Prepare and Construct a Uranium Mine and Mill. Denison expects to commence site preparation and construction activities 1-3 months later, in early 2026, and to commence commercial production in H1 2028.

It is worth noting, however, that previous timelines provided by Denison had the commercial production target date set to H2 2027. Without much commentary, it has been delayed by half a year. Many Supply/Demand models have included Phoenix’s output for 2028 onwards. This means that only 2 to 2,5 years are expected to pass between the CNSC Hearings and the start of commercial production, and Denison’s projections are widely accepted. Let’s use the McArthur River mine for reference to find out whether these projections are realistic.

The McArthur River Timeline

The McArthur River project (Cameco) followed a similar process in the late 1990s. A joint federal–provincial panel reviewed the development and released its report in early 1997. After that EA, provincial and federal governments approved the project in 1997, and the AECB (CNSC’s predecessor) issued a licence to construct the underground mine that year.​ Construction of shafts and the haul road took place in 1997–99, and the mine achieved full production once an AECB operating licence was granted in January 1999. The mine then reached full capacity by late 2000.

For Cameco, a well-established producer, it took around 3,5 years to go from public hearing to full production. And the McArthur River mine is a classic Raiseboring operation, unlike Phoenix, where Denison will be the first company to utilize in-situ recovery (ISR) for uranium mining on a commercial scale. This should urge some caution regarding their timelines.

Conclusion

Taking Cameco’s McArthur River timeline for reference suggests it will take 3,5 years (as opposed to 2,5 years) for Denison to bring Phoenix to full production. That would mean that full production might occur in H2 2029.

If we add another 6 months for difficulties related to ISR mining, it’s already 2030. That would be the worst-case scenario, however. I think Fall 2029 is realistic. Notably, I do not think NexGen’s Rook I will be in production at that time. ;-)

Despite the suboptimal outlook regarding the commencement of production at Phoenix, I still believe Denison is currently trading at a discount relative to the value of Phoenix and its other assets. It is a core holding of Anti—thesis.

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Oil and gas companies are historically cheap. They are pricing in a near-term recession and a reduction in global demand for fossile fuels. Ironically, demand for fossile fuels is at all time highs, and companies are recording record cash flows.

While producers need some of that cash to fund their growth pipelines, royalty companies can technically return all of it to investors. As royalty owners receive a fixed share of the revenue of a producing asset from the asset owner and aren’t responsible for operating costs, this means that, practically speaking, their gross is their net. Because of this superior business model, royalty stocks are traditionally expensive. But in some cases, true bargains occur. And I believe that this is currently the case with Freehold Royalties ($FRU.TSE).

Company Overview

Freehold Royalties stands as one of North America's premier energy royalty companies, managing one of the largest non-government portfolios of oil and natural gas royalties in Canada and a substantial presence in the United States. The company's business model is built around collecting royalty income from gross production revenue without bearing any of the capital costs typically associated with oil and gas development. Recently, Freehold expanded its footprint through strategic acquisitions in Texas, which are expected to contribute significantly to its 2025 production and revenue.

The company's portfolio includes royalty interests in more than 20,000 producing wells and almost 400 units spanning five provinces in Canada and eight states in the U.S., with royalty income generated from over 360 industry operators throughout North America.

Land Base and Production Profile

Freehold's land base encompasses around 6.1 million gross acres in Canada and 1.2 million gross drilling acres in the United States.

In 2024, Freehold’s production mix consisted of:

• 9% heavy oil

• 43% light and medium oil

• 12% natural gas liquids

• 36% natural gas

This oil-weighted profile of approximately 52% provides a favorable balance between liquids and natural gas exposure, and its large land ownership positions Freehold as a unique player in the North American royalty space, giving it significant scale and diversification advantages.

Growing U.S. Production

A significant development for Freehold Royalties is its recent Texas asset acquisition, which represents a substantial expansion of its U.S. footprint. The acquisition carries an approximate price tag of $216 million (net of adjustments) and is expected to contribute 1,500-1,600 boe/d to Freehold's 2025 production. This represents a substantial addition to the company's existing production base.

At an assumed WTI price of US$70 per barrel, these assets are projected to generate approximately $37 million in net royalty revenue in 2025. The acquisition also adds approximately 244,000 gross drilling acres to Freehold's portfolio, representing a 35% increase in its U.S. footprint. I expect Freehold to further increase its U.S. portfolio in the future:

This is especially positive because the U.S. presence helps to reduce the potential risks presented by tariffs.

The Freehold advantage

Freehold has lower output than some of its peers, but through superior financial management and the quality of its royalties, its annual revenue is competitive:

Freehold and Kimbell stand out in this comparison, and Kimbell is probably worth a second look, too. However, Freehold’s immense acreage allows for more growth and exploration potential. In my view, it therefore presents a better value proposition at present.

Note too that despite a challenging price environment in recent years, Freehold delivered a strong netback:

With Freehold trading cheaper than most peers while returning more money to shareholders, it is certainly a top candidate in the oil & gas royalty sector.

The royalty model is set to last

Not all resource companies are eager to engage with royalty companies. And it makes sense. Signing a royalty deal often means giving up a large portion of your future revenues before you've mined a single ton. Management will often seek alternative methods of financing, such as debt or shareholder dilution, before considering royalty contracts. As a result, new deals can be tough to secure for royalty companies.

So why has royalty financing grown from $2.1 billion in 2010 to more than $15 billion in 2019 (McKinsey1)? The reality is that natural resource companies are finding it increasingly challenging to get “traditionally funded.” To raise capital, they now have to compete with more players than ever in the debt market. In a world where trendy tech start-ups get all of the love from lenders and VCs, funding is drying up for more traditional and capital-heavy businesses, with natural resources topping that list. Simultaneously, the poor performance of natural resources equities during the 2010s has driven investors away from the sector, resulting in reduced equity funding and tighter debt financing.

As we speak, natural resources equities show signs of revival, with gold leading the way. Nonetheless, the sector will remain under-funded as we predict capital will become even more scarce in the next couple of years. It will take more than a bull run to restore retail and institutional investors’ confidence in the sector. On the macro front, the current instability and the looming threat of inflation/stagflation are causing lenders to be very cautious with their capital. Venture capital, while rumoured to be making “a comeback to mining,” is effectively pausing its deals.

In this environment, royalties will remain as one of the most sustainable and recession-resilient sources of funding for resource companies.

Dividend Policy

Freehold is additionally attractive because of its consistent dividend policy, which currently stands at C$0.09/share monthly. At today’s prices, this represents nearly a 10% annual yield. Investors who bought at the bottom earlier this month are getting even more. Personally, I prefer a monthly payout compared to the usual quarterly dividends. It allows you to use the money to pay rent, or to reinvest it quicker to make use of dips.

Financially, Freehold maintains a net debt-to-funds from operations ratio below 1.5x. This helps ensure the company can maintain its dividend through commodity price cycles while still pursuing strategic acquisitions to enhance its royalty portfolio.

However, it's worth noting that the payout ratio reached 109% in late 2024 and early 2025, which exceeds the company's target of approximately 60%. This elevated payout ratio deserves monitoring as it may impact the dividend level if earnings do not rebound.

The bottom line is that I expect oil and gas prices to do well over the next couple of years and that this will be reflected in Freehold’s earnings, reducing the payout ratio while potentially increasing the dividend and share price.

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Here are the most important takeaways:

• Paladin produced 745,484lb U3O8 at Langer Heinrich Mine (which they own 75% of), a 17% increase from the previous quarter

• They sold 872,435lb at an average sales price of $69.9 per pound and a production cost of $40.6

• Its offtake contract book now includes 12 contracts with “tier-one global customers,” with 22.3 Mlb U3O8 contracted to 2030.

• Operational cash flows for the quarter were negative at -$17.7M, but they recorded $24M in net cash flows from investments (mainly “proceeds from the disposal of investments related to the maturation of short-term investments” aka T-bills that matured)

The $69.9/lb sales price is higher than spot, but lower than Cameco’s recorded LT price, which consolidated around $80 YTD.

They made $19M selling uranium: 872klb * ($69.9 - $40.6) * 75%; however, they still lost money:

Assumably, this loss is due to payments related to the one-in-fifty-year rainfall event?

If they keep up these production levels without incurring further losses from dramatic events, they will make $80m/yr at LHM. After today’s stock surge, the market cap is now at $1.29 B. That would put them at a 16 FCF multiple.

However, Paladin wholly owns the Patterson Lake South Project (PLS), which has an After-Tax NPV@8 of $1.204 B at $65/lb. At the current realised sales prices, we can assume that the PLS project makes up the entire market cap of Paladin. Notably, the market cap is currently lower than Fission’s market cap before the acquisition. Therefore, its stake in LHM, as well as its Michelin project in Canada and its exploration properties in Australia, are entirely free.

The Michelin project is a tier-1 asset in the making, and Paladin sees opportunities to share resources between its PLS and Michelin projects. PLS helps fill the gap in the timeline between LHM and Michelin.

Given this combination of producing assets and high-tier development projects, the stock looks pretty undervalued. Being the second most shorted stock on the ASX hasn’t helped its performance recently. Over the next months, I expect this to change, as trust in the sector is restored and the market assigns fair value to LHM and Michelin. That should put the stock at $3.5 to $4 B.

Along with Cameco, Paladin currently presents one of the best opportunities in the space, in my opinion.

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John von Neumann Predicted the Outcome of WWII — And Warned Us About What Comes Next

John von Neumann, one of the founding fathers of game theory, mathematically modeled global conflict and applied his theory of games to World War II. From the very beginning, he was confident in an Allied victory.

But von Neumann didn’t stop there. Convinced that Soviet intelligence had already obtained many details of the atomic bomb design, he foresaw the inevitable rise of the USSR as a nuclear power. In his view, this development would make a future war with the United States unavoidable. Von Neumann recommended a preemptive nuclear strike on Moscow, aiming to eliminate the threat and secure U.S. global dominance before mutual destruction became possible. By 1953, however, the Soviet Union possessed an estimated 300–400 warheads, rendering such a strike futile—any attack would now trigger catastrophic retaliation.

Fast forward to today:

In January, Donald Trump expressed rare Republican support for renewed nuclear talks with China and Russia. “Tremendous amounts of money are being spent on nuclear,” he said. “We want to see if we can denuclearize, and I think that’s very possible.” The Kremlin responded positively, signaling interest in resuming dialogue.

Yet, I’m here to tell you: it won’t happen.

The Prisoner’s Dilemma

The Prisoner’s Dilemma is a classic game theory scenario involving two rational agents who must choose between cooperation and betrayal. Rational self-interest leads both to betrayal, leaving both worse off than if they had cooperated.

This model maps perfectly onto nuclear disarmament. Here’s how:

Why It’s a Classic Dilemma

Rational self-interest leads to suboptimal outcomes. In the context of nuclear disarmament, each country has a strong incentive to defect, regardless of what the other side does. After all, the potential strategic advantage of being the only nuclear power is too tempting to ignore.

But this logic creates a dangerous trust deficit. Neither side can be certain the other will honor a disarmament agreement, especially when the risks of being the only one to disarm are so high.

Is There a Way Out?

Robert Axelrod’s game theory tournaments in the 1980s found that the Tit for Tat strategy consistently performed best. Using this strategy, you start by cooperating and then always mirror your opponent’s last move. You may forgive your opponent for cheating and start cooperating again. It works because it promotes cooperation without being naive and discourages exploitation. Further, it rewards mutual trust and punishes betrayal.

The Ironic Truth

However, this strategy is designed for cases where both parties have no previous experience with each other. This is not the case here. Hence, despite what game theory tells us about the benefits of cooperation, the dominant strategy still prevails in nuclear politics: Defection. The stakes are simply too high to start by cooperating. Especially when considering that the US just briefly started a trade war with everybody, including its allies. At the same time, Russia is involved in a physical war with its brother nation, Ukraine. So, how could one call either party trustworthy? Surely, both of them are aware of this and would either not sign a disarmament agreement or simply cheat.

Von Neumann saw this coming. The very logic of self-preservation may lead to mutual destruction. Therefore, while the possibility of Denuclearization may put some pressure on uranium equities in the near term, it is not a serious threat long term because it simply won’t happen.

In natural resource investing, gains are often made going to countries that other people couldn’t spell. The strategy isn't about investing in nations with lengthy, complicated names—although Kazakhstan fits this description—but rather about acquiring stocks from companies based in lesser-known or riskier jurisdictions. Ask your average Western investor if they would be willing to buy companies from the emerging markets, and it is probably a big no. In fact, many of them freak out at the mere mention of a country ending in “-stan”. I would argue that geopolitical risks are most of the time misunderstood or exaggerated by investors. As a result, some good companies are on a permanent sale.

Landlocked between Russia and China, Kazakhstan is de facto a geopolitical hotspot. The two giants it shares a border with aren’t the most friendly countries to Western investors. Nonetheless, for quite a while, Kazakhstan was considered the most stable regime in the post-Soviet space and attracted a lot of investments from the West. In addition to boasting the highest income per capita of the Central Asian republics, the country had experienced little civil unrest and political crisis compared to its neighbours. In 2023, I decided to see Kazakhstan with my own eyes and took a trip to Almaty, the largest city of the country. I was impressed by the cleanliness and modernity of the city. The standards of living seemed mostly on par with Eastern Europe.

However, the country experienced in 2022 its first major popular unrest. Rising gas prices and general discontent with the current regime pushed the Kazakhs to gather in the streets. What started as a peaceful protest in the oil-producing city of Zhanaozen quickly escalated into violent riots in major cities like Almaty, resulting in hundreds of casualties. The riots lasted less than two weeks, and things went back to normal after some concessions from the government. Albeit it left a profound mark on the Kazakh society. To us western investors, it also showed that the most stable country of Central Asia was perhaps not that stable.

The growing instability has also been fuelled by the war between Russia and Ukraine and growing geopolitical tensions. Kazakhstan’s commitment to remain neutral in the conflict complicated its relations with Moscow. The war also revealed the extreme dependance of its economy to Russian imports and exports, many of which are under international sanctions.

For investors, this new geopolitical context prompts for reconsidering investment strategies in the uranium sector. Fully understanding the risks associated is crucial not only for people invested in Kazakhstan’s assets but also for anyone invested in uranium in general.

First steps towards nationalisation

With its uranium reserves being some of the largests in the world, Kazakhstan has attracted many adventurous investors seeking opportunities in a critical commodity. As most know, uranium is essential for nuclear energy, which is increasingly recognized as a vital source of energy. Kazatomprom (KAP.IL), the national atomic company, has been a focal point for these investors. Additionally, the second-largest uranium producer in the world, Cameco (CCJ.TO), has a significant producing joint venture in Kazakhstan through the Inkai project. There are other foreign players with an interest in uranium mines across Kazakhstan, namely Orano (France), Rosatom (Russia), SNURDC (China), CGN (China), and CNUC (China). Although these state-owned companies are not publicly traded, their operations can indirectly affect the global uranium market due to supply dynamics. For instance, any disruptions to their operations could impact the availability of uranium worldwide, influencing the stock performance of Kazatomprom but also of Canadian and Australian equities.

Investors should not be surprised to learn that Kazakhstan has a history of government intervention in its energy sector. As in many authoritarian states, the Kazakh government has used legislation to increase its control over energy assets. As such, it has forced multinationals operating in the country to form partnerships with the state-owned entity KazMunaiGas. In the uranium sector, the government’s intervention has been so far less pervasive but the government’s 85% indirect stake in Kazatomprom stresses the state’s strong desire to run key energy assets.

One form of interventionism was the enactment of a law requiring foreign companies to form joint-venture agreements with Kazatomprom should they want to mine uranium in the country. This is basically the Kazakh equivalent of the Chinese law requiring Western automotive manufacturers to form JVs with Chinese companies if they wish to produce in China. It is typical of how things work in the mining space, as local governments like to secure stakes in a project run by a foreign company for various strategic interests. Usually, this stake amounts to 10% or slightly more. But in Kazakhstan, the government has effectively closed the door on giving foreign actors majority ownership as reflected by Kazatomprom joint-venture ownership structures (KATCO and SMCC being two exceptions):

The indirect majority stake of the Kazakh government in the JVs implies for foreign miners a higher vulnerability to local political risks. Decisions on production quotas, profit-sharing, and even asset ownership often flow from the highest levels of governance. Operations are tied to strict terms tied to technology transfers or compliance with state priorities, which are both taken very seriously:

If a foreign partner fails to fulfill these expectations, resource access may be withdrawn, as then president Nursultan Nazarbayev reminded the head of Kazatomprom explicitly during a meeting in 2016. Two years later, when Kazatomprom’s Japanese partners failed to deliver on their promises of technology transfer, their shares in Kazakhstani joint mining ventures were dramatically reduced, and Kazatomprom took back control of the associated mining operations.1

And things could get more difficult for the foreign partners.

As reported by several local media in March 2025, the government is considering making amendments to the legislation to push for Kazatomprom to hold a 90% stake in JVs. The threat of a near-full nationalisation of the country’s uranium assets seems very real. Even though such amendments would only go into effect upon contract renewals, the rumours are worrying news for the foreign equities. They would be forced out of the country, losing high-quality deposits (Inkai accounts for about 18% of Cameco’s total production) to a competitor. Moreover, there is no guarantee of fair compensation for these assets. In theory, international law (UN Resolution 1803) allows for the nationalization of assets if fair compensation is given to the owners. In practice, the determination of what constitutes “fair compensation” can be subject to interpretation and may be decided by local authorities.

Based on the table below, Inkai block 1 is scheduled for renewal in 2045. But perhaps more concerning for Cameco shareholders, contracts block 2 and 3 are both expiring in 2028.

It’s hard for outsiders to predict what is going to happen next. But this new bylaw does seem like a first step in the nationalization of uranium assets. And as we covered in one of our recent articles, Kazatomprom has gone through extensive management turnover the last couple years, with many of the new appointed personnel coming from the public sector.

Supply chain issues and the Ukraine war

Kazakhstan’s geography is at the same time a curse and a blessing. The country is ideally positioned to export its resources, but is also stuck between two superpowers fighting for hegemony. For this reason, it is also of strategic importance for the West. The core of Kazakhstan’s foreign doctrine is a balancing act, managing the interests of its neighbours and the West. This is why investing in Kazakhstan is a complex exercise. One must understand the local politics and, on top of that, bear the strong geopolitical currents that influence the country.

One of them is the war between Russia and Ukraine. Despite not being involved in the conflict, Kazakhstan has been heavily affected by the international community’s answer to Vladimir Putin. Russia is Kazakhstan’s second-largest trade partner, and international sanctions on Russian entities have had a substantial impact on Kazakh operations.

Meirzhan Yussupov, CEO of Kazatomprom, has pointed out that sanctions caused by the war have created obstacles to supplying Western utilities. The cheap route via St Petersburg became impossible to use for Kazatomprom. Instead, an alternative route was established to ship the material through the Caspian Sea, Azerbaijan, Georgia and the Black Sea. Not only is this route lengthier and involved several modes of transportation but it is also highly vulnerable to geopolitical disruptions. Particularly from Russia.

In 2024, Kazatomprom was also impacted by a shortage of sulphuric acid, a critical material of its uranium mining operations. Kazatomprom didn’t communicate the full reasons for the shortage but we believe that the procurement of the reagent was complicated by international sanctions on Russia.

The discrepancy between the production guidance of CGN's (China) JVs and Cameco’s (Canada) Inkai JV is quite telling. While Inkai’s production fell at 80% of its guidance for 2024 at 80%, JVs with CGNs were all able to meet their targets at 3 out of 4 mines:

One theory is that CGN’s JVs were able to use Russian sulphuric acid while Cameco was not able to because of international sanctions compliance. China and Kazakhstan’s compliance efforts might not have matched those of the Canadian producer. This is what Cameco might have hinted at in one of their reports in 2024:

Regardless of future developments in the war, uranium producers in Kazakhstan will always be prone to the turbulence rising from Russia and its ideological rivals. And for every diplomatic trip Kazakh ministers make to Washington to discuss sanctions, they also engage in parallel efforts to reaffirm their alignment with Russia and Putin.

China: the (mandated) new bestie

China is now surpassing Russia as Kazakhstan’s primary trade partner, as it accounts for 19.2% of all Kazakhstani trade. Notably, Kazakhstan was the destination of Chinese President Xi Jinping's first foreign trip after the COVID-19 outbreak. Also, Kazakhstan's head Tokayev and Xi signed several agreements in May 2023 to strengthen their bilateral cooperation in many areas, including commerce, agriculture, and, importantly for us as uranium investors, energy. The two nations reached a trade pact to boost bilateral commerce from $41 billion to $80 billion by July 2023.

Additionally, Beijing is now working to improve Kazakhstanis' opinion of China, which has historically been rather weak, with a 2022 Central Asian Barometer survey showing that 70.5 percent of respondents had an unfavorable opinion of China. Now, the Kazakh government aims to improve Beijing's standing with the population. Tokayev even urged Kazakhstanis to put aside their worries of China in an interview in January.

Politically, China still considers itself a Third World country that sides with the developing world and does not align itself with any major power. It officially bases its foreign policies on the Five Principles of Peaceful Coexistence, but as part of its Belt Road Initiative (BRI), it has, in many cases, practiced what we call Debt-Trap Diplomacy. In short, China gives out excessive loans to highly indebted, low-income nations that are unable to pay them back. To reduce their debt load, these borrowing countries are then forced to give up strategic assets to China in a debt-for-equity exchange. As a result, China now owns important infrastructure, including ports and mines, as several countries, like Sri Lanka and several African nations, are not able to pay back their loans.

However, in terms of Central Asia, different nations are affected differently by China's debt-trap diplomacy. Notably, among Central Asian countries, Kazakhstan's debt to China is thought to be the most manageable. According to central bank data, as of January 1, 2024, Astana owed US$ 9.2 billion, primarily to the China Export-Import Bank (Exim Bank). However, this debt constitutes only about 3.5 percent of Kazakhstan’s gross domestic product (GDP). Turkmenistan, which depends on gas supplies to China, and Uzbekistan, which benefits from economic expansion, do not face significant challenges either. On the other hand, the Central Asian countries most vulnerable to China's Debt-Trap Diplomacy are Kyrgyzstan and Tajikistan.

Dept-Trap Diplomacy is not the only tactic that China uses to collect strategic assets abroad. While Kazakhstan has avoided Sri Lanka-style debt crises, its $31.5 billion trade reliance on China does create bargaining power asymmetry. For example, renegotiations over oil refinery projects such as Shymkent often favor Chinese equity stakes. Meaning, China also acquires resources through State-Owned Enterprises.

This took place in the uranium sector in December 2024, when China acquired a 49.99% stake in the Zarechnoye uranium deposit from Kazatomprom’s joint venture with the Russian mining giant Rosatom. Rosatom also partially withdrew from Khorasan-U. Further, Kazatomprom’s 2023/2024 contracts with China National Uranium Corporation (CNUC) and CNNC Overseas lock in China as the destination for ≥50% of its uranium concentrate exports. As a consequence, while freeing itself from Russian equity, Kazatomprom now relies on Chinese capital for 49% of its Ulba fuel fabrication plant and exploration licenses for four new deposits. On the other hand, the $2.5 billion+ from these recent deals helps fund Kazatomprom’s 2025 production expansion, ending its 7-year output curtailment policy.

For Kazatomprom itself, in view of its high national ownership stake, China’s growing influence in the country and its focus on key resources like uranium could be considered a net positive. The company is guaranteed to have a buyer for ~60% of its output, and China appears to help with the necessary infrastructure, too.

Despite the nationalization pressures we outlined earlier in this article, it looks like China will continue to acquire ownership stakes in Kazatomprom’s joint ventures, which could make it harder to model future financials, as the impact of these ownership changes is unknown.

These changing dynamics in Kazakhstan have implications for uranium investors. Decreased Russian influence in the country could be a good thing in light of the instability Russia causes. However, Western investors tend to discount stocks that are related to China, which could put pressure on Kazatomprom’s share price.

Geopolitical risks can be mitigated

All things considered, the geopolitical risk factor is closely tied to the company’s management ability to mitigate it. While some macro-risks may be beyond the control of management, mining companies have the power to influence decision-makers. The taxes, royalties, and social dues they pay make them highly valuable assets to the local governments. If management can effectively demonstrate this value (and to the right persons), then local governments might be more inclined to make their lives less difficult.

Evidence of that is copper producer Ivanhoe (IVN.TO). Ivanhoe can attribute much of its success to the incredible work of its founder, Robert Friedman, and its team in derisking its project in the DRC Congo, one of the most chaotic places on earth. If you follow the Kazakhstan route, ensure that the company’s management can handle the worst circumstances.