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Market cap = US$60.9 million

EV = US$42.61 million (based on Q3 cash)

TTM net income = US$17.7 million

P/E= 3.44

EV/E= 2.41

https://zoomd.com/wp-content/uploads/2026/01/Zoomd-Investors-Deck-Q3.2025.pdf

Why did I sell in November?

• Bad Q3 compared to shareholder expectations, material revenue decline QOQ, and small decline YOY, still high net income, and decent valuation

• 2 clients are going through a transition

• Halted momentum on the stock. Presented an opportunity cost

Why did I buy it back?

• We now have more clarity on the reasons behind the Q3 decline and the path back to growth.

• Valuation got cheaper

• Time passed

• High probability path back to momentum in 2026 and for the stock to 2-3x before YE, with limited downside in case it doesn’t work out

Source: https://seekingalpha.com/symbol/ZOMD:CA/income-statement

“In Q3 2025, the company reported a 3% decrease in revenues compared to Q3 2024, primarily due to the fact that most revenue from the Euro Cup tournament was recognized in Q3 of 2024.”

Next question comes from Paulo. It says, “Last earnings, we felt that large clients may be pulling back for next quarter. Is this true or are we reading it wrong?” I think you touched on that a little bit maybe. So it says last earnings we felt that large clients might be pulling back for the next quarter. Is this true or are we reading it wrong? We announced in Q3 earnings that two clients of ours ask us to halt marketing for them due to technological problem within their system. Nothing to do with Zoomed. They still are our clients, loyal clients. They love us. They even sent our testimonial and references to us. But they had an issue. We needed to halt marketing. I can expand on that if if if you want. It’s a bit technical, but I can explain what happened. Every app has a piece of software in it that is called an MMP. Mobile management platform. Any app that respects itself. So if you have a Google app, a Facebook app, it will have an MMP. that tool inside the app. The the manufacturer of the app puts it inside it in order to do different measurement. Two clients announced that they are taking out their MMP. Nothing to do with us. It’s like changing the cloud. So they change their cloud infrastructure. They change their MMP infrastructure. The moment they do that, there is no way for us to calculate how much customers are driven to them via zoomed because we use the MMP as a tool as a calculator to empirically understand how much they need to pay us in the end of the month. That’s why they are said we listen we are doing an infrastructure change we are changing an MMP. This thing never happened by the way. It happened to me in an entire career of zoomed only twice. It’s very rare but two clients did that by the way. one of the viewers of of your forum wrote me directly and said how strange that it happened to two clients in the same times it is but 10 other clients that are using the same MMP didn’t do that and I must say that two of those clients do not know each other and they are there from two sides of the world so [clears throat] it’s nothing to do about their knowing us it’s nothing to do about that one knowing the other piece of software that they decided to change the moment they change it we we hing for them. It will have an effect in Q4, but then it gradually comes back as those clients are kicking running.

So a question on so your your two largest clients that have you know sort of halted work based on this technical change. any any any chance you’re going to give an update on how that’s going? you know have they completed this technical change? did they technical change went through Q4? Yeah. They changed an MMP. It’s like taking a piece of software out. they put a new piece of software and then you do pilots because you do customer acquisition and you want to make sure that this MMP thing calculates in the right way your cut what you get and that is why the growth will be will will come and it will be gradual. Yeah. So it’s already fixed and we are back to business. Gotcha. And do you have a sense when you know that it’s full speed again? Like is it is it months is it weeks is it when we can’t disclose that we can’t can’t disclose that and this is very important to tell to the shareholders. When I say we can’t disclose, it’s not that we don’t want we are under a very severe NDA with those client.

Q3 that in Q4 we got a bump in the wing from two clients of ours and I can say here proudly that this is part of the business the company didn’t lose those clients in fact they remain the biggest clients that we have some of the biggest client that we have and it gradually will come back. So the short-term expectation is that the company is riding like crazy still generating cash and showing good numbers and and I feel that it’s stable.

source: SmallCap Discoveries Interview 17.2

• 2 clients halted marketing for a period because they changed their mobile management platforms. They remain clients

• Already fixed in q4 and back to business with those clients. Can’t disclose when they get back to “full speed”

• This is rare. Never happened to them before. Coincidence that 2 clients did it at the same time. Other clients that were using the same MMP didn’t change

• This caused a hit in Q3 and Q4. Based on what he says, we don’t know whether Q3 or Q4 took a bigger hit from this. Although better seasonality in Q4 should soften the impact

• “Stable” word choice matters. Interview before Q3, similar language(not the same), but hesitant to talk about revenue growth. I wouldn’t expect significant revenue growth in the short term

I want to update that in line with the recent changes in the marketing space, 2 of our largest customers are making adaptation to the acquisition models and goals. We are working closely with them on adapting their KPIs and measurement models to align with their new objects. Such transitions are a part of our business and based on our experience, activity typically scales up within a few months. While these changes may temporarily impact near-term activity, they also established a foundation for stronger and long-term collaboration.

As we reported, over 70% of our revenues come from top 5 customers.

Our performance continues to deliver operational ROI for our customers, supporting strong client retention and driving new customer wins. Revenues from clients outside of the company’s top 10 customers doubled in Q3 ‘25 compared with Q3 ‘24, a showcase of the significant efforts undertaken to aviate our customer concentration. Over the past year, we added more than 10 new clients and based on the typical revenue ramp-up time. We expect to see the impact of these wins in 2026. With 2026 in also being a World Cup year, we started to strategize with some of our customers to secure budgets for the World Cup, which is the most viewed sporting event in the world.

E2 is now offering Zoomd’s user acquisition services, which provide us exposure to dozens of sportsbook operators and broader sports and betting clients worldwide. Initial integrations are underway and broader campaigns will roll out in the coming months. We expect meaningful contribution already in 2026, which is also a World Cup year, a factor that should further boost demand in this segment.

Source: Q3 earnings call

• Better positioned in sports now due to the E2 partnership(announced last October). Q1 2026 had the Winter Olympics and the Super Bowl. Q2-Q3 2026 has the FIFA World Cup(11.6-19.7), predicted to drive $10.5 billion in ad spending. source Most revenue to be recognised in Q3

• 10 new clients added last year, expected to see the impact in 2026

Bear Case:

• Q4 shows that the impact of the 2 large clients was larger than in Q3

• Return to previous spending levels is slow, or previous levels are not returned to

• General client concentration risk from “over 70% of our revenues come from the top 5 customers”

Iran war risks:

• Their revenue from the region is insignificant. Not the risk.

• Hormuz stays closed, which causes a global recession, which causes marketing spending to go down, etc. Biggest risk, but in this scenario, most other stocks would fall as well, and Zoomd has a better margin of safety than most stocks.

• Zoomd is headquartered in Tel-Aviv. What if they get hit by a missile? Very low probability - if it happens - cloud-based, 6 offices across the globe, remote work

In a bear case, some combination of these risks materialises and may result in revenue drops to, for example:

Revs US$12 million per quarter

43% GM =US$5,16 mil GP

operating expenses US$3.1 million

operating income US$2,06 million

An unknown amount of Tax loss carry forwards, no tax in recent quarters

Adding 300k interest income pa

Annualised net income US$8,54 million

Still P/E of 7.1 and EV/E of = 5 (based on Q3 cash)

But the stock would likely go down 40-60% percent from the current price

Bull case

back to Q2 25 growth trajectory in Q3 26 and onwards, Annualised net income US$25-30 million, market cap to US$250-300 million, stock price 4-5x

2025 peak US$190 million market cap

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Disclaimer: I’m not an investment advisor. Nothing I have written in this article should be taken as investment advice. Everything I have written here could be inaccurate. Trust nothing you just read. I’m part of the Seeking Alpha Affiliate program, which means I have a financial relationship with Seeking Alpha. This article is for entertainment purposes.

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There are now two pre-revenue plastic recycling plays in the AlmostMongolian Portfolio, Aduro and Plascred. This sector is a graveyard of failed projects, which makes me question my sanity a bit, but that is the situation I have found myself in.

This article provides a deep dive into PlasCred and compares PlasCred to Aduro for the purpose of ultimately and definitely determining the best investment case in the sector.

Maybe it also serves to indoctrinate PlasCred shareholders to Aduro and vice versa, and to inspire more research. I want there to be a competition between the two shareholder cults, with each finding flaws in the other's investment thesis. I sparked a small skirmish on ceo.ca after sharing my first tweet about PlasCred, but unfortunately, the fighting has since ceased. And both sides have returned to their echo chambers.

There will be a separate section “PlasCred vs Aduro” dedicated to this topic within the paywalled part of the article, but just to compare the investment cases shortly:

PlasCred is a nanocap plastic recycling company advancing toward commercialisation in 2027. Plascred entered the public markets through a reverse merger(similarly to LibertyStream) in 2023. How PlasCred's story differs from Aduro's is that Aduro is bringing to market a new, patented water-based hydrochemolytic technology(HCT) for plastic recycling, and the investment case is that this is going to be the holy grail of plastic recycling technology, which, once fully commercially validated, would be deployed globally through a licensing model. Hence, Aduro is engaging potential partners worldwide and working with large international companies, such as TotalEnergies and Georg Fischer.

Plascred has a different approach. PlasCred uses a patent-pending variant of the pyrolysis technology. Pyrolysis is the most common method for chemical plastic recycling, which uses heat to break down plastics. And instead of a licensing route, they are laser-focused on delivering on a plan in Alberta, building a commercial unit and scaling it up in stages, optimising logistics by partnering with CN Rail, taking advantage of carbon/plastic credits to increase profitability and utilising non-dilutive government grants and loans for the CAPEX.

Aduro’s market cap is 25 times larger than PlasCred’s. From a technology perspective, PlasCred doesn’t promise quite as much as Aduro, but taking into account the company’s much smaller valuation, it promises a lot.

Like Aduro, PlasCred is another story that seems almost too good to be true, the way the companies present it, because both are relatively small, early-stage companies claiming to offer profitable solutions to the massive plastic recycling problem. Which is something that larger companies have repeatedly failed to achieve.

While PlasCred doesn’t promise as much as Aduro does with its technology, what I think makes PlasCred an interesting investment case is a combination of a much lower valuation, shareholder-aligned management, and a clear plan to commercialise with limited dilution:

Some numbers

In Canadian Dollars

Source: PlasCred corporate presentation Q1 2026

Market cap: $20.5 million

Market Cap fully diluted: $27.2 million

Cash position as of September 30th: $220k

The company burns around $200-400k per quarter for normal operations. They have been financing themselves with warrants and small raises in recent months.

No debt as of now, but once they start building their commercial facility, which requires $25 million of CAPEX, they can tap into an $8.5 million debt facility and $7.35 million in grants. This leaves $9.15 million left to be raised.

Insider ownership 30% on a fully diluted basis, and the CEO owns 27,594,997 shares and 5 million performance warrants, which means he personally owns 27.5% on a fully diluted basis.

FYI, when I’m quoting the PlasCred CEO. The quotes are from this presentation from March 2024. It’s the latest in-depth interview/presentation I could find. This company has not been promotional. Sometimes they do short 3-9 minute interviews with Stockhouse or ceo.ca in connection with some new press release. But when it comes to in-depth presentations with Q&A, the 2024 interview was the best source I had to work with.

A quick detour: I came up with a new investment rule as I pondered whether to use “PlasCred’s CEO” or his first name, Troy, when referring to PlasCred’s CEO in this article. I came to the following conclusion:

Never call the CEO or any member of management by their real names, especially not by their first names. Always refer to them by their titles. When you use their real names, you are already subconsciously creating a parasocial connection to the person, which creates an emotional connection to your investment in that company, and this hurts your ability to make investment decisions as objectively as possible.

Technology

Source: PlasCred Corporate Presentation Q1 2026

Plascred has a proprietary patent-pending process to turn unsorted, mixed plastic waste into a hydrocarbon liquid or “low-sulphur refined condensate”. The condensate has the following commercial use cases:

Petrochemical Feedstock: Drop-in replacement for virgin naphtha in plastic production

Transporation Fuel Blend Stock: It can be converted into transportation fuels, helping to minimize the drilling of new oil wells.

Pipeline Diluent: Compatible with heavy crude oil transportation requirements.

Source: PlasCred’s website

On top of the condensate, which they can sell at $120 per barrel based on their offtake agreement, they generate additional revenue from carbon char and carbon/plastic credits. Of these 3 additional income streams, plastic credits have the potential to be huge for them, which I will cover more later in the article.

Ideally, you wouldn’t want the char at all and have a higher liquid yield, but PlasCred says it can sell it to asphalt companies.

the black carbon we’re selling that to asphalt companies and the ashal companies are using it for basically pigment in their color for ashphalt there’s also a lot of other companies that are bugging us it so we do have off-take agreements coming with those as well

Source: https://oceanmaterial.com/what-plastics-can-be-recycled/

One of PlasCred’s major advantages is its ability to recycle 1-7 plastic types, and also dirty plastics. Allowing the company to take plastic waste in bulk without needing to wash and sort it. Lowering feedstock costs and increasing availability.

Feedstock Flexibility: Diverse inputs from a variety of mixed unwashed plastics (types 1-7) optimally polyethylene and polypropylene (up to 5% PVCs)

Source: PlasCred Corporate Presentation Q1 2026

PlasCred uses its own pyrolysis variant. Pyrolysis is the most common method of chemical plastic recycling, but it has also proven to be problematic in many ways. This is one of PlasCred’s issues with its investment story. They are working with a technology with a poor/mixed track record with plastic recycling. Many investors will dismiss the company outright because of it. Here is an example of it, and I fact-checked these claims, and they’re basically true:

Source: OneOfSeven debating stoneybagpipes on ceo.ca

PlasCred has their own spin on Pyrolysis, which they claim is different, but they need to continuously prove they can produce better results than their peers; in contrast, Aduro’s HCT doesn’t carry the reputational weight of past failures, and they can brand themselves as the only ones who have the real solution, which enables more hype to build up among investors, which means easier time of raising money and most importantly stock price going up.

No article like “Chemical Recycling” Is a Toxic Trap” has been written about their tech:

Source: https://www.nrdc.org/resources/chemical-recycling

For more on past Pyrolysis failures and other players in the sector, you can take a look at these videos by Amateur Investing: Agilyx failure and 30 Plastics Recycling Companies Compared

One of the problems with pyrolysis is the heat required for the process, using 400-800 celcius temperatures to break down plastic, which presents many problems:

Source: https://cen.acs.org/environment/recycling/Amid-controversy-industry-goes-plastics-pyrolysis/100/i36

Aduro uses a lower temperature range of 250-350 °C with its water-based method to avoid these problems.

PlasCred also claims lower temperature as one of its advantages:

On our journey around the globe we went to Europe where they're using supercritical steam, high pressure, high temp. A lot of the rotary kilns, they're using 600 to 800 degrees C, which is the wrong tool because it cokes off. We were able to get it down to less than 350 degrees Celsius, so that means I can take all the mixed species of plastic regardless of if it's C1 to C7 and be able to two-phase it at a nice lower temperature. That means less energy—half the amount of caloric value—so we're really successful in that. Better yields and less energy, really correct, and now you generate less waxes and you've got a better finished product. So when you go to on the back end when you go to refine it, you've got a bigger yield upwards of 80%.

Pilot

A company listed on the CSE can be quite liberal with its projections and claims, but as investors, we need to find out what is backing the company’s statements. Many of PlasCred’s claims are backed by results from its pilot plant, Primus, which has a capacity(they’re not running it all the time) of 0.4 tonnes per day, resulting in around 2 bpd of condensate.

Source: https://plascred.com/wp-content/uploads/2024/09/2024-09-11-PlasCred-Neos-FEED-Update-Q2-2024-PR.pdf

PlasCred says their liquid yields are up to 80%. Which is a decent yield, especially for Mixed plastics. What’s backing these statements?

Pilot results using PP as the main feedstock

Source: https://www.newswire.ca/news-releases/plascred-circular-innovations-inc-announces-initial-catalytic-test-results-with-patent-pending-primus-pilot-plant-822170753.html

Comparison: Aduro got a 95% yield on PP feedstock

Source: https://www.globenewswire.com/news-release/2024/02/15/2829816/0/en/Aduro-Clean-Technologies-Shares-Sample-Test-Results-from-its-Continuous-Flow-Unit-Experimentation-and-Optimization-Program.html

But for PlasCred, it’s still good. Aduro has the best yield out of everyone for PP. And PlasCred has a higher-than-average pyrolysis yield for PP, which, according to these sources I found, ranges from 55-80%. Source 55-65%, Source 80%. When it comes to finding an average or benchmark, it’s difficult, as there are so many variables and differences between the sources and the ways they arrived at their results.

Pilot results using Mixed Plastic

Source: https://cdn-ceo-ca.s3.amazonaws.com/1kpgpuj-plascred%20patent.pdf

With different mixed plastic feedstocks, PlasCred got a range of 70-88%. The temperature here is higher (450 °C) than the temperature the CEO mentioned in the interview, where he said they can process mixed plastics at 350 °C.

When it comes to mixed plastics, what is even more important is whether they can handle problematic plastic types in the mix and truly take unsorted feedstock. The problematic plastic types for pyrolysis are PET and PVC:

Source: https://cen.acs.org/environment/recycling/Amid-controversy-industry-goes-plastics-pyrolysis/100/i36

PlasCred’s CEO is very confident they can handle PVC and PET, supposedly in unlimited quantities:

Limits to the amount of PVC and PET that you can handle?

As much as possible, no limits, no limit, yeah, no limits, yeah

Their presentation does say “up to 5% PVCs”, which would imply limits.

“What happens to the PVC hydrogen chloride in particular? Yeah, so you’re always going to get PVC. Those chlorides are very damaging to the finished product, so you don’t want to bring in those chlorides whatsoever. We have a unique process within our whole burn period and we’ve been able to do a workaround and be able to subtract that. What’s really cool is a lot of the chlorides that will be building up in the plant—they’ll actually come back; we’re going to bring all that back through our wash water to wash the plastic, so actually every molecule gets used.

We have a technology that, say we got a slug of PVC—say 5-10%—not only can we segregate that, but we can actually reuse that and take the chlorides off and basically reuse that as a process within our water. It’s pretty good because we don’t want it to end up in the finished product. That’s why, out of everybody else who is doing pyrolysis, you know, they’ll use that and that can create those chlorides and hydrochloric acids that are damaging. We’ve built a technology into our process that eliminates that and works with plastic.”

So that’s what they say, and the 70-88% yield result was with mixed plastics that “in some embodiments” may include PET and “in some embodiments, the feedstock comprises PVC”. That’s what we have to go off for now.

Similarly, Aduro lacks detailed results when dealing with contaminants, but based on what they have press-released, they imply results of over 80% liquid yield on mixed plastics with PET and PVC. This was from the PR, which highlighted their graduation from Shell’s GameChanger Program, which in itself gives these results more validation, as the tests were conducted with Shell’s oversight:

Following the agreed program, Aduro conducted a series of technical evaluations to assess the performance of its patented chemistry, including selectivity toward steam-crackable hydrocarbons in the C₅–C₂₃ range, suppression of olefin formation, and tolerance to common contaminants such as PET, polyamides[nylon], and PVC. Under the tested conditions, the process yielded over 80 percent liquid hydrocarbons with lower gas and char formation. These findings suggest potential advantages in feedstock flexibility, product selectivity, and process efficiency. In addition, Aduro advanced its understanding of reaction kinetics and process design parameters, which now inform the further development of its proprietary system architecture.

These results confirm that Hydrochemolytic™ Technology holds the potential to convert complex, contaminated waste plastics into high-quality liquid hydrocarbons under continuous operation, using readily available industrial equipment.

Source: https://investors.adurocleantech.com/press-releases/press-releases-details/2025/Aduro-Clean-Technologies-Graduates-from-Shell-GameChanger-Program/default.aspx

The fact that they can say over 80% rather than up to 80% like PlasCred is significant, as it implies that all the mixes they tried, including those with contaminants like PET, Nylon, and PVC, still achieved liquid yields of over 80%.

The End Product

PlasCred obviously talks favourably about their end-product, but one concern raised is that, if they do pyrolysis, their product is technically pyrolysis oil, which has a bad reputation. Here is a quick AI summary of the problems:

PlasCred claims to be able to make a better product than what usually results from pyrolysis, and they call other types of pyrolysis oil “monster juice”.

On our journey, we watched how a lot of people were doing pyrolysis. They create “monster juice” at the end — they don’t have a real goal of creating a finished product, and it’s not very good. Anybody can do pyrolysis, but you really have to be able to tear the molecule apart. Because of our process, we have a patented reactor[patent pending] and an ex-situ catalysis process that allows us to put the molecule back together the way we want and come up with a finished C5 Enbridge-spec condensate.

This currently trades for about $105 to $110 per barrel, so it’s very profitable.

What gives PlasCred’s statements weight is their Offtake agreement. This provides a fixed price of $120 per barrel for a 5-year period with a “Global Commodities Company”. The CEO has revealed that this company is Trafigura(source). A company with a revenue of $240.3 billion in 2025.

Source: https://plascred.com/wp-content/uploads/2025/06/2025-06-03-PlasCred-YE-2024-PR.pdf

Trafigura had tested the product produced by their pilot (I assume) and, based on that, said they could pay C$120 per barrel for it, which amounts to roughly C$1000 per tonne(US$730). And that underpins their financials and profitability assumptions.

PlasCred says that the product is used in the production of virgin plastics. Can it actually go straight into a steam cracker to produce new plastic? Whether it requires expensive post-treatment has remained unclear to me. After asking shareholders and the IR, shareholders weren’t sure, IR didn’t respond, I assume it can’t go straight into a steam cracker, because it would be a big selling point if it could, and that would also explain the pricing in the offtake, which should be higher for a product that could.

This is how they describe the product they got from recycling PP, which is good feedstock.

Source: https://www.newswire.ca/news-releases/plascred-circular-innovations-inc-announces-initial-catalytic-test-results-with-patent-pending-primus-pilot-plant-822170753.html

Given the fact that they don’t make it clear whether it can go in a steam cracker as it is when PlasCred sells it, and they have multiple use cases outlined, some of them seemingly lower value like pipeline diluents and the lower range pricing, I think the product is not of that quality, but if they can sell it at C$120 and have no problem with cost over runs and scaling the process, it doesn’t matter as much their process would be very profitable either way, which will be covered soon.

Also, given this green condensate that used PP as feedstock, it met industry specifications, but I didn’t find another official result stating that a product derived from a mixed feedstock with contaminants met industry specifications. In general, they claim they can do it, but I would like to see that result in an official PR. I want a clear answer to this, and for the steam cracker question, because I may change my PlasCred positioning based on those answers.

Why I made a big point about the product’s ability to go straight into a steam cracker is that if a company can do it, they can truly claim plastic circularity and secure premium pricing. Very high pricing with government incentives in certain countries. This video dives into how Aduro could easily get over 2k USD per tonne. Aduro’s goal is to produce an end product from mixed plastics that can go to a steam cracker as is or with minimal modification, and they have some promising initial results from testing their mixed plastic-derived product in a pilot-scale steam cracker:

The trials were carried out in October 2025 at an established pilot-scale cracking facility in Europe, using a hydrocarbon liquid product Aduro produced from a mixed waste plastic feedstock consisting of polyethylene, polypropylene, polystyrene, PET, and polyamide. The Hydrochemolytic™ oil was processed in the pilot-scale steam-cracking furnace as-produced, without dilution or further pre-treatment, under various operating conditions.

Cracking of the Aduro Hydrochemolytic™ oil was achieved under stable furnace operation with yields of ethylene and propylene, key building blocks of polyethylene and polypropylene, comparable to those from comparable fossil feedstock. Most significantly, the cracking trials showed that this particular Aduro product may be used as a cracker feedstock without additional hydrotreatment or dilution

“This testing was completed by a global organization with deep expertise in steam-cracking technologies and operations, and their evaluation points to strong potential for liquids produced through our Hydrochemolytic™ Technology to meet the strict performance needs of cracking operations,” said Ofer Vicus, CEO at Aduro.

Source: https://ceo.ca/@GlobeNewswire/aduro-clean-technologies-reports-successful-pilot-scale

To summarise this section, Aduro clearly shows more potential with their end product. PlasCred product, while lower value, seems to be good enough for various commercial uses validated by the offtake with Trafigura, which is a big deal as it implies they can avoid many of the problems of pyrolysis peers, and the offtake underpins their financial projections for their commercial plant and helps with their most immediate challenge, funding that plant:

This was around 40% of the article. 60% is behind a paywall and covers PlasCreds funding situation, commercialisation, long-term growth story, CN rail, Management, catalyst and risks, thoughts around my positioning, catalyst, risks, and most importantly, the final PlasCred vs Aduro clash.

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PlasCred’s path to commercialisation

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Timestamps:

02:10 Capital Raise Breakdown

07:10 Site 1 progress and Site 2 plans

11:30 Update on Economics and reaching profitability

20:00 Refining plans, Grants?

26:30 Solar Recycling Competition and sector Developments

34:00 Investments, estimated FMV changes, Mining(not much)

38:35 SSOF situation, Speculation

45:55 Bioleum(not much)

47:15 Summary on why I bought the Dip

Materials

Below: Everything shown in the video.

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2024 was a year of rabid development, and 2025 has been a year of exponential refining. And Clarity. At the beginning of 2025, due to the rapid development in 2024, I started to know what I was doing a little bit, but ultimately, I still didn’t know what I was doing. Throughout 2025, AlmostMongolian has been exponentially refined. And now, starting 2026, I exponentially know what I’m doing. From here it’s a different ball game; there will be no mistakes.

2025 Performance

In last year’s recap, I presented my estimates for 2025: “I’m mega bullish The AlmostMongolian Portfolio for 2025. It’s perfect.[It was not] My conservative estimate for 2025 is a 100-300% gain. My optimistic estimate is too outlandish to even say. You wouldn’t believe I can estimate a number that high. You have no idea how high I can estimate.”

My 2025 return was about +40%. It would have been so much more if not for… But I have to face the facts. Unfortunately, I missed my 2025 conservative estimates by a lot, but as I said, I didn’t even know what I was doing when I made those estimates, and now I do, which means that when I put out my 2026 estimates at the end of this article, it’s going to be a totally different outcome this time.

Current Portfolio, updates, and return of each position:

This section shows the current AlmostMongolian Portfolio positions, listed from largest to smallest, along with each position's cost basis and return from cost basis. Most stock price charts shown are trailing 12 months to showcase 2025 performance, while simultaneously showing the share price from January 2026. This is what we call: to hit 2 flies with one slap.

Hydreight/Victory Square Technologies combo

VST German listing Cost basis(CB)= 0,19€ Return from Cost basis +116%

Hydreight Technologies CB = C$1.71 return from CB +126%

Source: Seeking Alpha

By itself, VST would still be the biggest position, and Hydreight by itself would be fifth. I bought Hydreight first in early April, during the trade-war stock-market dip.

Then, in early July, I converted half of my Hydreight position to VST, which has since outperformed Hydreight.

Since establishing the initial positions, I have added to both many times, but mostly to VST. Raising my cost-basis as the company has executed, as the fundamental value of the company has increased more than the stock price in my view. I added most recently last Friday. The stock price dropped because they raised money, and the market hates it.

Many investors say the timing is bad and that it signals they will release poor guidance. Because if the guidance is good, why not do it after it at a higher price? Why was there a half-warrant? Why was there a discount? They are profitable with a strong balance sheet. Why did they need to do it?

The management argument: They don’t need to raise out of financial necessity; they have a strong balance sheet and are cash flow positive, but they have many near-term opportunities to accelerate growth and scale the business, and with the proceeds from the raise, they can pursue more of these opportunities at the same time, instead of sequentially. They are launching new products and increasing pharmacy capacity, both of which require upfront capital. Platform and operational scaling. Bringing multiple higher-margin initiatives live at the same time.

And the arguments for the discount with half a warrant and the timing before the guidance from Shafin:

“If demand was strong, why a discount and half warrant? Because this is market-standard structure for a financing of this size and stage when bringing in institutions that intend to be long-term holders.”

“Why raise before guidance? Because the opportunity in front of Hydreight is time-sensitive operationally, not narratively. Q4 execution validated the model in a very real way. Coming out of Q4, we had: • Confirmed demand • A deeper pipeline of higher-value product lines • The ability to launch multiple initiatives in parallel, not one by one Waiting until after guidance to raise would not have improved execution. It would have slowed it.”

So the investors say the stock is already cheap, why dilute when you don’t need to, and the management says it’s worth it to grow even faster.

My take is that, given their strong track record, I’m giving Hydreight the benefit of the doubt. They have earned some trusting the plan. They have something cooking. Let them cook. Will this, approx 5% dilution, approx 7.5% with warrants exercised, matter much 6-12 months from now if they can grow significantly faster, taking advantage of these opportunities? That depends on their execution.

How was their execution in 2025?

Source: https://hydreight.com/docs/Hydreight-Deck.pdf

They guided 1.3 million orders for 2025. A number that was seen as outlandish when they announced it in late 2024. They achieved that number in december 18th. Although with a significantly lower average order value than originally expected. Still, given where the company was before and what the market actually expected, I would call this a big win. Revenue increased by +94.4% from Q2 to Q3, when VSDHOne was first starting to ramp up.

Licensee growth significantly exceeded the company's guidance. Hydreight guided that it would have 1000 licensees by the end of 2025. On December 18th, they announced that they have approximately 2500 licensees. And in that same announcement, they mention that the order volume so far was driven primarily by the initial 400 licensees (Link to PR). Meaning there is a lot of growth from here baked in for 2026, just from ramping up with the newer licensees.

That Dec 18th PR, compared with a Dec 1st PR, provided us with a run rate for the month if order volume remained the same for the rest of the month.

To determine the full order count for December, based on recent PR's and assuming orders continue at the same pace:
The company reached 887,000 orders as of December 1st (end of day) and 1,300,000 as of December 18th (end of day).
This implies 1,300,000 - 887,000 = 413,000 orders added from December 2nd to December 18th.
That period covers 17 days (December 2nd through 18th inclusive: 18 - 2 + 1 = 17).
This implies a daily average rate of 413,000 ÷ 17 ≈ 24,294.12 orders per day.
Assuming this rate applies uniformly across all of December (including December 1st and 19th–31st), project over the full 31 days: 24,294.12 × 31 ≈ 753,118 orders.

Their projections had December at 400k.

They crushed expectations on licensees and orders. The average order value AOV has been the only thing where the result was worse than expected, or did not exceed the expectations. And it’s an important part. Earlier in 2025 Investors and analysts were projecting more than US$100 per order, but the company was always less confident in projecting this metric. The higher AOV expectation came mostly from assuming a higher percentage of GLP-1s, which were priced higher, but due to GLP-1 prices falling and the company diversifying into other lower-priced products and giving discounts to early adopters of VSDH, the AOV turned out to be significantly lower. In the 2nd half of 25, the management had made it clear it would be closer to $30-50 CAD.

The company has not provided a clear AOV number for a while. In the Q3 call, they said: “AOV climbing fast. As Shane mentioned, getting to about $40 on an AOV by the end of the year and then pushing that $50 - - north of $50 as we go into 2026.”

Here is a calculation by Rollercoaster using very conservative order numbers for 2026:

Source: Rollercoaster

1 million orders per month for 2026, given the December data, would be a major disappointment. The AOV would be lower than the management is targeting, and the margin would be around their target. The valuations of $188 million market cap for Hydreight and especially the $69 million for VST (still trading at a discount to its NURS holdings) both seem ridiculously cheap under these assumptions.

We have seen that Hydreight is willing to dilute to grow faster (PerfectsScripts acquisitions, convertible, raise), which shows again why VST really should trade at a premium, as their 10% profit share isn’t diluted by dilution on the Hydreight level. It only grows in value, assuming the dilutive growth measures lead to higher future profits.

And I’m not against dilution for growth if they deliver the growth. Many investors have the value investor notion that when a company becomes profitable, it is not supposed to raise money anymore. But Hydreight is a hypergrowth story. They are going for it. They are trying to take over the market. Profitability is a plus.

Source: https://hydreight.com/docs/Hydreight-Deck.pdf

They will be diluting in the future. And the shareholders always think the stock they are holding is undervalued, because they wouldn’t be holding it if they didn’t believe that, so when they inevitably dilute again, shareholders will be saying they shouldn’t have done it when the stock is undervalued. It’s always a bad time to raise, because the next re-rating catalyst is always around the corner. You can see the problem when it’s a growth-focused company.

In closing, the VST/Hydreight combo is by far my favourite investment currently. It’s difficult to imagine a scenario in which Hydreight would have failed 1 year from now, absent a black swan event.

The CEO's email said the 2026 guidance comes out this week.

Aduro Clean Technologies CB= US$1,97 return +648%

Source: Google

Despite the volatility, the stock performed well for the year, as it tends to do every year. My mindset with Aduro remains the same. As long as the long-term thesis stays intact, I’m holding. Because as long as it does, the stock is on a path to a multi-billion-dollar valuation. And the story is staying intact and progressing allthough slower than initially expected. My recent Aduro update contains my full thoughts on the current situation: Link.

Significant news for 2025 was the building of the Pilot plant, starting site selection and design for the Demo plant, 3rd party validation that their product works in a steam cracker, raising a lot of money for the pilot and demo plant and partnerships with Ecoce and Cleanfarms.

What is expected for 2026 is the results from the pilot plant, which the management has said they expect to improve from R2. That will be important for proving the scalability of their tech. And now that they recently raised $20 million, they have the money to build the demonstration-scale facility, which will eventually be scaled up to commercial. So 2026 will still go without material revenues, and seemingly the company is moving slowly, but the company is tackling such a big issue with such a high promise, that if they continue to execute, the stock will continue to outperform even if the progress to commercialisation is slow.

$CERT.V Cerrado Gold 2nd Round CB= C$0,65 Return +185%

Closed position on 3.2.2025 Cerrado 1st round +21%

Source: Google

I held this stock briefly at the beginning of the year and then sold it at 46 cents due to the Lagoa Salgada Acquisition. This was a mistake, although I still agree with my original assessment of the acquisition. The stock was already a slam dunk, but the acquisition caused a material amount of dilution while adding unnecessary risk and harming the company’s reputation among investors due to a conflict of interest. And the potential return from it was not enough to warrant all that, in my opinion. But I should have held the stock anyway. And I eventually came to my senses and returned.

Most of the return from Cerrado has come from rising gold and silver prices, which I did not predict. So I would say I have been lucky with the stock, because the company-specific catalysts have been delayed or only partially realised.

We haven’t gotten the LOM increase announcement, although they did expand the drilling program from 20k to 70k metres, which is a good sign. They revised their 2025 full-year production guidance down from 55-60k to 50-55k, due to a delay in underground production ramp-up. On a positive note, they successfully started underground production. The environmental permit for Lagoa Salgada was delayed. The Lagoa Salgada updated feasibility study is also late. Because of the lack of progress, my write-up from June has remained decently relevant: Link

The execution has been a mixed bag, but the Cerrado thesis never needed perfect execution. The valuation was so low that the stock should be a multibagger if they could execute half of what they are saying, and they are still on track to do at least that.

In december they said they have achieved 4000-4500 GEO per month for the Heap leach operation. Combined with the CIL operation, that should be at least 15,000 GEO per quarter.

Which would put them at a run rate of 60k for 2026 without the underground operation. We have no guidance on underground production, but it is higher-grade, and the company has facilities with a 100k capacity.

Today, the company announced that the hedges were completed. Allowing the company get the full benefits from the higher gold prices.

Source: https://ceo.ca/@GlobeNewswire/cerrado-gold-announces-conclusion-of-gold-hedging-program

Crude calculation for 2026 without UG production at the current gold price of $4600

60k*4600=$276 million in revenue

AISC 60k*1800=$108 million

Mine operating income=$168 million

Around $10 million G&A and then 35% tax(I’ve seen people use 25%, but i’ll use 35% now)

US$103 million post-tax profits, current market cap US$180 million

Based on how the underground operation performs, we could see materially higher production next year. Now they have 4-5 years of LOM on Argentina with plans to significantly increase it through their drilling program and underground development. In addition, they have US$147M in post-tax NPV for Lagoa Salgada and a post-tax NPV of $1.6 billion for Mont Sorcier. And both of those latter NPVs should get an upgrade, with updated studies scheduled for release in the first half of 26. Precious metals prices are the wild card in the equation.

I think Cerrado is still a great risk/reward and has plenty of upside left.

$LODE Comstock Inc. CB= US$3.08 Return +31%

Source: Google

The return is measured from the last market price, so if there is after-hours trading (jälkipörssi), the return is measured from that.

Since I released my Comstock write-up in mid-December, there have been some new developments:

And there has been a surge in silver prices, which helps Lode by increasing the value of their mining assets that they are trying to monetise, and by improving the economics of their solar panel recycling business, as solar panels contain silver.

Now, the Silver price is $93 and here is a calculation from Jay to highlight the impact of different silver prices for one site operating at full capacity.

While the silver price going up is nice, it’s not the crucial part of the story. Now that they are permitted, what will be important in the 1st half is successfully commissioning the facility in Q1 and then proving that the technology works as presented when scaled up. Not being able to procure enough panels or ramping up slower than expected are risks, but if they can prove that they have a technology which they can deploy to multiple locations, spending $12 million in Capex per facility, and when scaled up, each will make $55-82 million of profits annually. If they prove they can do that, it will eventually result in a multi-billion-dollar market cap.

A quick tip for my fellow influencers. On top of the great investment thesis, this stock is great for engagement. Even without putting in any effort. You can just regurgitate the news or keep posting that it’s a silver play.

$SEI.V Sintana Energy CB = CA$0,64 Return -27%

Source: Google

Sintana has been a big drag on my performance this year. I have kept it as a large position and added to it multiple times, while the stock has kept going down.

Was this a mistake? When I use the word “mistake” in this article, I mean whether I think I made the correct move based on information that was available at the time and the risk/reward that presented. And I don’t think holding and adding to Sintana was a mistake, other than maybe buying a bit too much. However, I also sold Sintana shares a couple of times to get liquidity to buy other stocks. But it remained a big position. The risk/reward has been strong throughout the year, and the odds have been in favour of the longs given the valuation and the assets, but many risks that were possible, but not likely, materialised, and many of the catalysts didn’t happen or didn’t live up to expectations.

The reasons behind the stock price fall is more like a death by a thousand cuts than due to one big negative news release: PEL 90 dry well, Oil price weakness, Shell write down, No FID on Venus, Namibian politicians not getting fiscal stability legislation done, insider selling, Operator walking away from PEL 87, hated Challenger energy, and PEL 83 farmout disappointing investors.

Here are the potential catalysts going forward:

The market cap is now US$172 million, and in my opinion, risk/reward remains strong at the current price.

LibertyStream Infrastructure partners CB=CA$0.27 return +404%

Source: Google

This is the price on Friday’s close. After closing, they announced a raise priced at $1.10, so I would expect a drop when the market opens today.

I didn’t expect such a fast surge for this stock. I only got a small initial position because it started running right when I started accumulating, which is why it’s not one of the biggest positions despite it being one of the biggest percentage gainers. If I had known how fast the stock would go up, I would have bought way more. Trust me.

I don’t have anything to complain about with Liberty in terms of execution. Everything is moving on schedule:

• Signed an MOU with Packet Digital, a battery manufacturer that sources critical minerals: Link to PR

• Advancing towards redomiciling to Texas and towards a future U.S listing: Link to PR

• Successfully commissioned the refining unit and 3rd-party validation of the product:

Source: https://www.dropbox.com/scl/fi/aa412hm7fxryqrzv4guqe/260106-LIB-Consistent-Carbonate-Production.pdf?rlkey=ui8ezr8684n1gf4d7z726tx2k&e=1&st=q3zmjxqh&dl=0

They recently completed a raise of C$10 million at 65 cents with added warrants with an exercise price of 1$, which, after all exercises, would result in about $15 million in extra proceeds. So if the stock price stays above 1$ for most of this year, they are pretty much set to fund themselves to commercial production without needing additional raises or government grants.

I wrote that before they raised another C$12.5 million, now at $1.1 shareprice with warrants with an exercise price of $1.5. I don’t really mind it; the market is throwing money at them, and they are still basically pre-revenue. They are taking advantage of it to move to the next stage.

Back to the topic of grants, Libertystream might receive a Department of Energy(DOE) grant in early 26, which is the potential moonshot scenario for the stock. The bull case works well without it, but this would accelerate everything. This is the biggest near-term catalyst.

DOE will award up to $275 million, and we should know whether LibertyStream got any of it in February

Source: https://www.energy.gov/hgeo/funding-notice-mines-metals-capacity-expansion-piloting-product-critical-minerals-and

Reading the full document from DOE of the Notice of Funding Opportunity(NOFO) sounds very promising, as they are basically describing what Libertystream is doing:

This NOFO invests in American industrial facilities that have the potential to produce valuable critical materials from existing industrial processes and legacy waste streams[Libertystream produces lithium from oil production wastewater]. Industries such as mining and mineral processing, power generation, coal, oil and gas, specialty metals, and basic materials have the potential to recover valuable materials that will address many of America’s most severe mineral vulnerabilities. The goal of this NOFO is to increase domestic critical material production.

LibertyStream produces lithium, which DOE considers a critical mineral, from oil production waste stream. And Lithium is a mineral vulnerability for America, as China is the dominant Lithium refiner in the world, and America’s capacity is insignificant.

“The goal of the planned NOFO is to facilitate the development of large pilot-scale facilities to recover domestic critical minerals and materials (CMM), including rare earth elements (REE), graphite, and other value-added products from operating industrial facilities. Example industries with byproduct production potential include: phosphate, fertilizer, oil and gas, smelting, mining, waste management. Goal-related resources will be eligible in this program.”

Source for these quotes: Link

LibertyStream is building large-scale pilot facilities to do exactly what they describe in the NOFO. So I would say they have a strong case to get a DOE grant. Of course, it’s not for certain, and I would expect the stock to go down if they don’t get it at least in the short term, as it’s going to be the market’s number 1 focus in the near term. Strengthening the case further, on January 14th, the White House released a proclamation treating critical minerals such as lithium as a national security issue:

Source: https://www.whitehouse.gov/presidential-actions/2026/01/adjusting-imports-of-processed-critical-minerals-and-their-derivative-products-into-the-united-states/

Another favourable development is the rebound in lithium prices, which is not particularly relevant for Liberty from a revenue perspective at the moment, as they are not producing on a material scale yet, but it’s good for sentiment and for any long-term contract negotiations as they get closer to commercial production.

Source: Trading Economics

Western Gold Resources CB = A$0.115 Return +109%

Source: Google

If you’re wondering why the stock was up 17% today without news, it was because this stock was extremely underfollowed, and a first big Fintwit account with 43k followers just posted about it.

I found Western Gold Resources at 11 cents, and I saw it as the ultimate laggard of the gold bull run that would catch up violently once it got to production. First small position, but then added to it and then the stock went up, so now it’s a decent-sized position. A low-risk, low-capex, fast-payoff gold project in Western Australia that, once in production, will print more than its market cap annually, ready to be put in production unhedged to take advantage of the high gold price.

They are doing it, but are delayed from their original schedule, of course.

• Oct 7th raised $6.75, which fully funds them to production

• Dec 24th Decision to mine, mobilisation starting Q1

• Dec 29th completed grade control drilling and updated mineral resource estimate from 214k to 277k using the same cut-off grade.

So we should see revenue in Q2 or Q3, depending on how fast they can move things along.

Market cap= A$68 million

Pre-tax Cash flow in the first 14 months (stage 1). Take 30% off to get post-tax. Current gold price is A$6887.

Source: https://wcsecure.weblink.com.au/pdf/WGR/02997936.pdf

Take 30% off to get post-tax. Here is the calculation using the current gold price based on the company’s scoping study.

Based on forward P/E or EV/FCF, I haven’t seen a cheaper gold miner, and it’s operating in a tier 1 jurisdiction. The LOM is the main concern. Phase 1 includes 42.8k ounces(LOM of 14 months); the estimated resource is 277k ounces, and they will be working on increasing that, once they are cashed up from stage 1:

Source: https://wcsecure.weblink.com.au/pdf/WGR/03041954.pdf

Assuming the company successfully brings this project to production and increases the LOM, it should significantly re-rate with gold trading anywhere above $3000. Given the upside, the development risk is quite low, a tier 1 jurisdiction, open pit, near surface, fully financed, permitted, binding milling agreement and selected mining contractor.

Heartbeam 2nd round CB= US$1.31 return +61%

Closed position on 21.11.2025 Heartbeam 1st round -60%

I first bought Heartbeam last March at 2.16$. Released a write-up about it. And waited for the FDA approval. Then they got a negative letter from the FDA, which could have resulted in significant delays or never getting the FDA approval, so I sold it immediately at 80 cents, which was -60% from my cost basis at the time. I don’t disagree with that sale. Based on the information that was available at the time, I think it was the right move. Then they unexpectedly had the issues with the FDA resolved quite quickly, and I jumped right back in at 1.31$ with a larger position than I sold because the stock was cheaper that day than it was pre-FDA approval, which was ridiculous.

Source: Google

The price action has been wild. First, the stock went up a lot with Massive volume. This sub-100 m market cap stock was the highest-volume stock on Nasdaq for 2-3 days, then it dipped seemingly due to profit-taking and heavy short selling, and now it’s hovering around $2-2.5. The company has not released any news since the FDA approval, and everyone knows they need to raise money.

Source: https://finviz.com/quote.ashx?t=BEAT&ty=si&p=d

What we are experiencing is a vicious and outright evil short-seller attack. Heartbeam’s product will save lives, and these short sellers are trying to drive the price down, which makes it harder and less attractive for Heartbeam to raise a lot of money, which slows down their commercialisation, hence slowing down the distribution of these life-saving devices. Following that logic, shorting this stock is kind of like being a serial killer and just as serial killing is illegal, shorting this particular stock should be illegal.

Now, Heartbeam is ready to commercialise the only 12-lead equivalent, FDA-approved, cable-free ECG device. Pressing matter is the funding. The company had a low cash level at the end of Q3. They have most likely used their ATM to raise money, but I expect a larger raise with MDB capital at some point.

Valeura Energy CB = CA$3,94 Return +117%

Source: Google

Valeura Energy was my biggest position going into 2025, and the stock is pretty much trading at the same price now. Now it’s down here as I have gradually sold shares to buy other stocks, most recently last Friday, to buy the Hydreight/VST dip. The stock’s performance has not been that bad, considering the falling oil prices and Thailand's ongoing conflict with its neighbour.

I don’t have much to complain about with Valeura’s execution. The production is ending the year strong. They got the tax restructuring done. Strong reserve and resource growth. The gas project in Turkey is finally progressing. Wassana redevelopment started. Entered into a JV with the Thai national oil company that seems to have very favourable terms for Valeura. I would have liked to see more deployment of cash to acquisitions and buybacks, but that’s all I can complain about. As the biggest negative factor for the stock, the weak oil price, is out of their control.

Valeura has a strong track record of acquisitions, and the company is now well positioned to pursue them, with net cash of US$304.7 million and no debt, compared to a market cap of US$643 million, and cash flow remaining strong even at current oil prices.

Valeura is cheap, and the company has a good track record for capital allocation and operational performance. The problem is that it’s just an E&P at the end of the day; it doesn’t have the same potential as the other picks like Hydreight, Heartbeam or Aduro. I guess another transformational deal is always possible, but it’s not going to provide the same upside as when the company had 90% lower valuation, and I don’t think deals as good as the Mubabdalalada Energy deal present themselves often, no matter how good the management is at finding them. I still like the stock, but it’s kind of a placeholder in my portfolio. That might be liquidated first when I find another Hydreight or Comstock, given the lack of multibaggernes at the current valuation.

Illumin CB = CA$1.64 Return -38%

Source: Google

I added recently, but it was mostly as a trade on a potential run-up caused by the end of tax loss selling and the resumption of buybacks, and both have happened, and the stock is not going up.

My Q3 earnings take: Link

Now the market cap is C$52.7 million, and I guess I still like the R/R from here.

The problem is. That is what I have been saying for a while, good r/r, great r/r. Margin of safety, etc. Well, it had a margin of safety, which was the net cash, and here we are around the margin of safety. I think the problem here is that I focused too much on valuation and the margin of safety, while having a weak bull case for the stock. This is the summary from my article Illumin Update: Amazing Set-Up:

It’s like AI written, and a summary can be like that to (be fair to the author), but the problem is: that was it. What you see in the summary was/is my investment thesis. There is no more to it. For example, I never had a clear idea or even pretended to have one of whether Illumin is actually superior to competitors. I don’t know if it is. The thesis was/is like a collection of features I like to see in an investment: Buybacks + low multiples + insider buying + margin of safety + new CEO with a track record = good investment. I think a thesis like this can work, but when it doesn’t, I’m left with a stock trading at near net cash, which I have trouble deciding what to do with. Also, all of those features I listed with Illumin are known to the market. It’s harder to get a crazy edge over the market with that type of thesis. More is needed.

I don’t think investing in Illumin was an unforgivable mistake. It’s a forgivable mistake. The reason I’m holding now is that the downside is quite low from this price. I don’t think it will trade below net cash, although that net cash has been steadily going down; the market cap being close to net cash offers resistance to broader market downturns, so I think Illumin is acting as a kind of cash alternative with upside. That is a nice cope I just made up to justify holding this, you have to admit. And due to the valuation and the sentiment, any good quarter could 2-3x the stock quickly, like after Q3 of 2024. And I don’t think the results have been that bad. They don’t need much improvement to turn the sentiment.

eXoZymes CB US$13.7 Return -16%

Source: Google

Am I supposed to update eXoZymes? I have barely mentioned the stock even though it has been in the portfolio since early 2025. 2 reasons for that: Nobody cares about Exozymes on Twitter. Tweeting about it is like talking to a brick wall. And the reason I haven’t written it up is that Slack capital is the guy who knows all about eXoZymes, so I have directed people to his quintessential write-up when they ask about it:

Slack Capital

eXoZymes Inc: A New Era of Biomanufacturing Chemicals

JOIN THE EXOZYMES INVESTOR DISCORD CHAT…

Read more

a year ago · 27 likes · 4 comments · James | Slack Capital

And this is the quintessential update:

Slack Capital

eXoZymes Q3 Investor Call: $EXOZ as a once-in-a-lifetime opportunity

eXoZymes’ recent Q3 investor call was, in my view, a genuine inflection point for the company. For the first time, management laid out a clear, commercially driven roadmap that connects near-term revenues, potential multi-billion-dollar exits and a disciplined capital and operating strategy designed to protect and compound shareholder value…

Read more

6 months ago · 16 likes · 11 comments · James | Slack Capital

Everything I say now assumes you know the thesis. Post-IPO, eXoZymes hasn’t had any negative news, but it underperformed investor expectations in 2025, which led to weak stock price performance. The company has talked about landing a significant partnership/JV that hasn’t materialised. They also rebranded from Invizyne to eXoZymes. I get the name change, but overall, I think the rebranding has been a failure. The new website sucks. Looks very cheap and amateurish. I think I could make that, and I’ve only made 1 website for a school project. And why is the new visual style so black? And the nighttime urban backgrounds. The company should evoke green and nature combined with labs and science. It should be green, blue and white. Which is what they had before. Someone needs to get fired. Look at these, and think whether you want to join the dark dystopic Biomanufacturing revolution

Source: file:///C:/Users/jobsd/Downloads/(v3.8)%20EXOZ-pitch%20Oct-2025.pdf

Oh, it’s horrible. The new videos are also mediocre. They should copy Aduro. Walk around and show off the facilities, have a scientist holding a jar of something, etc. And while the company uses AI, the way eXoZymes constantly mentions it like a buzzword, combined with the other problems with the style and the website, raises red flags for many new investors, especially when the company is a microcap. So, combined with the weak rebranding and no JV news, tax-loss selling, the expectation of a raise in the 1st half of 26, and the stock having a tight ownership structure and low volume, I understand why the stock price is where it is.

On the positive note, while the thesis is progressing more slowly than expected, it is progressing. They got a $300k grant from the National Institute of Health in April. $3 million grant from the U.S. National Science Foundation in June. Launched NCT-X subsidiary with a goal of commercialising a product with massive potential to market, only economically possible with their tech, and are in the process of successfully proving they can scale production, with a goal of commercialisation in 2027.

VanityFair Germany article about eXoZymes’s breakthrough with NCT: Link

I sold a third of the position around 13-16$ to buy other stocks in the autumn, but recently the stock went below 10$ so I added some, and the CEO also likes to buy at around $10-11.

Source: https://www.secform4.com/insider-trading/2010788.htm

Among the stocks in my portfolio, eXoZymes could have the most long-term potential. So I want to have some shares. But how long it takes them to get momentum is another question. The path to multibagging is less clear than for most of my other positions. So I don’t want to tie too much capital in here.

Voxtur Analytics CB= C$0.11 return -99-100%

Source: ceo.ca

Stock is halted, and the company is in restructuring. Last traded price on the over-the-counter market was $0.0001, according to Seeking Alpha.

My worst investment in 2025 and my worst investment ever.

I started the year out bullish on Voxtur. Imagine that. Now, looking back, it was always a very flawed, or at least very risky, investment thesis, but at least there was an investment thesis at the start of the year. However, I was clinically insane for not selling after the Q1 results and after the Bluewater and Anow lawsuits. Unforgivable mistake. The proceeds would have been small, but that’s better than nothing. I say clinically insane, because I kind of knew selling was objectively the right decision; the logical part of my brain was telling me to sell, but I still held. The sunk cost fallacy was exceptionally powerful after holding for many years, probably hundreds of hours of DD, making all those posts, a write-up and many interviews, etc. Getting too involved like that can be dangerous. Psychologically harder to sell the stock when it needs to be done.

The investment thesis at the start of the year was basically that they are going to monetise one or several of their assets to deal with the debt, dramatically cut costs and then grow with their new offerings they were hyping up such as Voxtur Verify and Voxtur Rate Advisor, but when 2 of their most valuable assets Bluewater and Anow got entangled with lawsuits and we could read the contents of the lawsuits, the chances of success for this turnaround plan became very slim.

Voxtur’s lender, Bank of Montreal, sold Voxtur Debt to Hale Capital. The company hasn’t released financials since Q1, and it’s in financial restructuring. The stock is halted. Some businesses appear to have been sold, as they no longer show up on the company’s website. The result of the restructuring I expect will be a complete wipeout of existing shareholders, or effectively a wipeout, where maybe the existing shareholders will own some small piece of the restructured Voxtur. I think a complete wipeout is more likely at this point. I don’t follow the situation that closely, as it’s not actionable anyway. The position is technically not closed, but effectively, I would put it as -99-100% loss.

I’ve thought about making a long video or article about the whole timeline and all the lessons I learned from this disaster. It’s not a relevant topic at the moment, given the company’s situation, but I might make that video or article someday. One good thing about going through the insane rollercoaster of investing in Voxtur is that I learned a lot and became a better investor :)

Closed Positions in 2025, date of closing and return of each

The percentage return, for simplicity, is the gain or loss from the cost basis when the position was closed, with dividends added if any were received.

The list is ordered by the amount of money made or lost(not %). With the Biggest gains or losses first and the smallest last:

Position closed on 19.2.2025 Mind Technologies +186%

This was a big position. Late 2024, Mind cleaned up its cap structure by converting the preferred shares to common, but the stock had no interest or momentum at the time, and then in December, they released a strong quarter with a bullish outlook on the earnings call. This fueled a sentiment shift, and the stock ran, and I decided to sell. I closed this position at 10.68$. The stock peaked at $14.29 and is now at $10.66.

I have been following the stock loosely, and based on what I see with their results and valuation, I have no interest in buying back in. I’m surprised how well the stock price is holding up. Even looking back at my old investment thesis, it wasn’t that great. Although the stock was set up for a run-up after the preferred conversion, it was pretty lucky for me that the strong quarter caused such a big run-up.

28.11.2025 Zoomd Technologies +104%

Source: Google

While Zoomd was a nice gain, it was a bit bittersweet because it was up more than 3x from my cost basis in October, but then they released a bad quarter in late November, and I ran for the door. Getting out with a double.

source

I don’t have much to add to this. Zoomd was a simple thesis; they started turning around in 2024, growing and increasing earnings every quarter, then Q3 broke that trend.

While I sold the stock based on the information available at the time, Zoomd was an insane R/R during the tariff battle. I regret not buying a larger position in May when I first found this stock; based on Q1 2025 results, it traded at around 2.5x PE and was growing 100% a year. This valuation was only possible during a time of uncertainty. But my bull case outside the numbers and the valuation wasn’t that in-depth; I didn’t have any insights that the broad investor base didn’t, and the stock was a known quantity. So when they posted results that no longer aligned with the thesis, I was out.

21.5.2025 Globex Mining Enterprises +77%

Source: Google

Globex has kept going up after I sold, but in the context of the surging gold price, Globex underperformed its peers. They have many minerals in their portfolio, but gold is their number 1 by a wide margin, and take almost any gold stock with a similar market cap and compare the performance in 2025. I bought the Cerrado Gold position at 63 cents with the Globex proceeds, which has also outperformed Globex.

Everyone involved in the stock knows the positives, which, combined, present a good story; I’ve covered it many times. The business model is nice, and there is a lot of hidden value, intrinsic value or whatever value investing term we like to use for coping, when the value keeps hiding for years and years. The problem with Globex is that there is no clear path to a significant return in the near or medium term. Maybe Ironwood, but it has been moving way slower than shareholders initially expected, and I wouldn’t bet on them fast-tracking it. Given the management’s style of taking pride in being very, very patient. The stock is up because of the gold price surge, and many other names offer more upside to capitalise on it. I think it’s kind of a value trap, one of my favourite value traps, but still a value trap.

4.2.2025 Metro Mining +52%

Source: Google

I don’t have much to say about Metro. I have no interest in re-entering right now. I’m surprised by how well the stock has held up, given that the bauxite price has fallen significantly since I sold, and they reached only their lower range of the guidance. But I guess, with a low valuation, not much is needed for the stock to go up.

Source: https://wcsecure.weblink.com.au/pdf/MMI/03008836.pdf

3.9.2025 Beacon Minerals +80%

Source: Google

Beacon has kept going up, but I’m not so sad about that as I used Beacon proceeds to buy Western Gold resources, which outperformed Beacon since then. Although Beacon is catching up lately, it is also less risky. I didn’t think change my mind about Beacon, I like the stock, but I found a new gold stock that I liked more, and to add that position, I needed to sell existing gold positions, or else my portfolio would have been too exposed to the unpredictable gold price, which, to my luck, has kept surging, but I didn’t know that was going to happen. How could I have known that?

20.11.2025 West Wits +41%

My West Wits timeline:

Source: Google

West Wits has continued to rise since I sold, which is infuriating. I’m very angry about it. I like it when after I sell everything crashes and burns, so I can imagine that I was the glue holding everything together, but it was not the case with West Wits, not yet atleast.

While I’m angry about West Wits's success, I think my decision to sell it and rotate to other positions, Comstock in this case, made sense. So I don’t consider selling it a mistake. But I’m not surprised by the performance. I think it’s a strong investment thesis.

20.5.2025 Smith Micro Software -54%

It hurts to even think about this stock. Not because it was a huge loss, it wasn’t because it was a small position, but just the sheer amount of mistakes, both unforgivable and forgivable, was unforgivable. This was a terrible investment thesis in 2022-2023. But I can kind of forgive myself for investing a small position, as I was such an amateur at the time. I was also trusting too much in someone else's DD while not really doing my research before 2024. I followed and still sometimes follow this guy, Mark Gomes, and he is a smart investor with a strong track record, but nobody has a 100% win rate, so that’s a case of authority bias. Very common with newer investors who don’t know anything, and I fell into that category heavily when I came across this stock.

And in late 2024, the stock had fallen a lot. I was left with a very small position, and I bought more at 68 cents and wrote this write-up explaining why in December 2024.

Then, in early 2025, the market gave me a massive gift. The stock started running up in anticipation of their new product rollout with Orange Spain. Investors were posting the ads Orange was running, etc. I looked at the app downloads, and they were low. Investors weren’t talking about that. The stock still ran to $1.75. I thought now I could get out of this disaster of an investment at almost break even during this hype that wasn’t being reflected in the downloads, but I started thinking it’s going to run to 2$ on momentum. “I want to sell it at a profit. If they ramp up with Orange fast, I’ll look stupid for selling. I just wrote a massive write-up about the company.” All these idiotic rationalisations for not selling when R/R was weak. FOMO combined with the sunk cost fallacy. Makes me furious just thinking about it. Then I waited for the stock to get back to $1.5 to sell it, even though the argument for why it would get back there was weak. Anchoring bias. Latching on to some arbitrary past price.

Eventually, I came to my senses and sold it at 87 cents, and the stock price has continued to decline since to 59 cents now.

The situation with the company currently is a total Deja vu from 2024. The company is forced to raise money in autumn, and the CEO participates with a large amount to bolster investor confidence. The company projects profitability next year, driven by new opportunities. Just like in 2024. Maybe they really do it in 2026, but I’m not interested in betting on it, given their track record and the availability of other opportunities with a way better bull case.

10.1.2025 Ensign Energy Services +30%

Source: Google

I have very little interest in Ensign anymore. The story is solid with the paying back debt, etc, but I have increasingly shifted my focus to higher impact opportunities. This was another relic from the past, still collecting dust in my portfolio that I got rid of at a very opportune time. The stock was rising in anticipation of the Trump administration's more favourable policy approach towards drilling, but ultimately, larger forces at play have caused drilling to continue declining.

Pancontinental 1st round closed 12.5.2025 return +100%

Pancontinental 2nd round closed 19.1.2026 return +50%

Earlier this year, I made a quick double on this stock from 0.007$ to 0.014$. Then I re-entered in October. This is a tiny position because I had one limit order at 0.008$, and it didn’t even fill fully, and didn’t go back to that price.

The stock is mostly moving on sentiment about the farmout. I like the asset; they have cash to last for a while, and I think the farmout is inevitable, but it could take a long time. When the stock gets to A$0,006-0,008, I see it as too asymmetric, and I tend to go long. I have PEL 87 exposure from the Sintana position, which is why I’m not too committed to this stock. I may sell it(trying to sell it now) at the current price. I sold it.

8.9.2025 Eco Atlantic Oil and Gas -27.5%

Selling Eco Atlantic in September was not a mistake. I should have done it sooner.

But not buying back in on 5.12.2025 was an unforgivable mistake. That was a day of unique risk/reward, similar to heartbeam just after the FDA permit. Eco Atlantic revealed a deal with Navitas Petroleum with all kinds of good stuff, and just like with the Heartbeam, immediately after a crucial catalyst happens, the market likely doesn’t price it in immediately, so the people who understand the impact have a special opportunity to take advantage of that moment when the broader market is still digesting news and figuring out the impact. So the stock went up by +20% right after they released the news, and that was the moment to get in. Eco at 19 cents post-Navitas deal was a special situation served to me on a silver platter. For one day, amazing risk/reward, but I was hesitating and doing other things that day, and I didn’t even properly analyse the deal, so I missed that opportunity, and the stock ran up to 52 cents now, which I don’t see as that attractive price anymore when comparing to Sintana at its current price, for example.

I can’t believe that such a recent iteration of AlmostMongolian is still committing unforgivable mistakes, but in 2026, that problem will be fixed. You will not see the term “unforgivable mistake” in the 2026 recap.

3.4.2025 $MER.TO Meren Energy(formerly Africa Oil) 2nd round +6%

This was the second round; the first round was closed in September of 2024 at -19% loss. So Africa Oil in total has been a loss, but mostly an opportunity cost, as I had held it for years with a prominent place in my portfolio.

Holding Africa Oil at such a high esteem as an investment opportunity for so long was an unforgivable misjudgement/mistake. Possibly forgivable after enough time has passed. Although I think holding the stock in 2025 is a forgivable mistake, given that I did have the sense to sell it to buy Hydreight stock, and the stock was cheap, etc.

It’s another value trappish stock. Many assets(unfocused), low multiples, past failed ventures, although it pays a big dividend, which makes the wait for the ever-elusive rerating more bearable. If I were running a dividend-focused portfolio, this would be included, but I’m increasingly getting more interested in these “multi-baggers”.

2025 unforgivable mistake counter: 4

I have a write-up on every stock covered in this article, except eXoZymes. Some are fully free, and some are partly free. Can be found in the archive: Link

Lessons from 2025

• When the time comes, don’t hesitate to sell everything or to load up. This lesson is mostly about trusting my own judgment more and not being attached to individual stocks. Being attached to individual stocks makes it hard to sell when it needs to be done to avoid further loss, and to sell just because you need the money to load up on some new opportunity. Knowing when the time comes is just about developing one's own judgment through experience, due diligence, etc, but trusting that judgment more to make decisive moves was my lesson from 2025. You can develop good judgment, but if you don’t act on it, it doesn’t matter. Many times this year, I had the right read on the situation, but didn’t act on it at all or didn’t act with enough impact (didn’t buy enough, didn’t sell everything); examples are scattered throughout this article.

• Stop focusing on the “margin of safety(MOS)”, as much. MOS is a popular value investing concept, and it makes sense; it’s a real thing, and in theory, one should focus on it. Investing is a game of probabilities, and it’s inevitable, no matter how good someone is at investing, that some of the picks won’t work out. But if one focuses on MOS and correctly judges the MOS of his investments, in theory, that reduces the downside for the picks that fail, while keeping the upside for the ones that do. Famous quote from Mohnish Pabrai about this: “Heads I win; Tails I don’t lose much” and he has been underperforming in recent years. I was a big MOS believer in early 2025 because it made sense. But in 2025, I started becoming a MOS doubter. Not that MOS isn’t real, of course it is. If a company has a 100m net cash and 150m market cap, no debt and is profitable, it is undeniable that it has a strong margin of safety. What has turned me against MOS: I started noticing that the people with the best performance just focus on having a solid upside thesis, and that among my investments, those were the best performing stocks, while stocks that had a margin of safety underperformed. What do I think are the reasons behind this? It’s not that MOS is inherently bad to have it’s that the companies where you can make a MOS arguments usually have problems and the existence of the MOS argument can distract from those problems: they are unfocused, the valuation is low and never without some reason, the MOS in question could be the theoretical liquiditation value of a collection of businesses(argument for Voxtur’s MOS), or maybe a portfolio of various liquid securities(Globex), and often MOS is used as a cope argument to justify an investment in a stock with a lacking upside thesis, which I have done many times.

There were more lessons from 2025 than these. Those will show up in my “work” in the future.

2026 Return Estimates

In 2026, I think all my positions are going to be winners, but accounting for unpredictable events happening and maybe even flaws in my research. There is likely going to be one or even two stocks that are currently in my portfolio that are imposters. They present themselves as winners, yet they are the opposite. And there will be at least one loiterer, meaning the stock that goes nowhere, like Valeura, was in 2025, and there will be one stock that is a mere double; it’s a bit disappointing, but I’ll take a double, and the rest will be multibaggers.

Using this information, I can create a mathematically accurate formula to estimate the 2026 returns of The AlmostMongolian Portfolio accurately.

I call it: The Mongolian Investing Returns Predictor Formula, TMIRPF for short

So I’m starting the year with 11 positions: I’m not counting Voxtur, cos it’s over, and I’m counting VST/NURS as one position.

1. The Loiterer 0%

2. Imposter #1 -50%

3. Imposter #2 -80%

4. A mere double +100%

5. Multibagger #1 +200%

6. Multibagger #2 +300%

7. Multibagger #3 +400%

8. Multibagger #4 +200%

9. Multibagger #5 +1000%

10. Multibagger #6 +300%

11. Multibagger #7 +700%

Now I just feed the TMIRPF into the Grok AI model to know my 2026 return:

The final result +279.1%. That will be my 2026 return.

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Comstock Inc. is a sort of small-cap conglomerate, a precious metals mining company that, in recent years, has pivoted to solar panel recycling, biofuels and battery recycling, while still owning a mining asset and a bunch of real estate. And while that description raises alarm bells for many investors, after doing my due diligence, it has become one of my favourite investment opportunities. It offers two main businesses, both of which have the potential to 10-100x the stock price in the coming years, and multiple non-core assets that the company is looking to monetise, with the monetisation value potentially exceeding the current market cap.

This is my longest write-up yet, and I did a lot of DD on it. As I kept researching Comstock, I kept trying to find out whether there was something seriously wrong with it that I was missing. I found some things that can be interpreted as red flags. There are many potential risks. But I found nothing to invalidate the core thesis. The valuation is cheap, if I may be so bold. It is a great risk/reward, if you don’t mind me saying so.

Basic Info

Source: Google

Market Cap = $167 million USD

Shares outstanding: 51,264,247

Warrants outstanding: 1,293,334

I started a position just about a month ago (My Announcement tweet). My current cost basis is $3.08, and it’s a top-5 position in The AlmostMongolian Portfolio. Shout out to Miguel Investing for telling me about this stock.

Source: Seeking Alpha Premium

In August, Comstock raised $31.8 million at $2.25 per share, with no warrants, to clean up its balance sheet and carry it to profitability. The raise also brought on over 30 new institutional investors.

Insider ownership is quite low at 2.35%, though partly due to dilution from the aforementioned raise. It’s worth noting that the CEO bought $500k worth of shares last year at a 4$ share price, and there has been no reported insider selling for years.

Source. Seeking Alpha Premium

Balance sheet:

Source: https://seekingalpha.com/filing/14789564

Source: Seeking Alpha

As you can see, they have been losing a lot of money in the past years, but that should change next year, and the balance sheet and cap structure are clean.

This write-up breaks the business down into 2 sections:

1. Comstock Metals is the core of the thesis and its path to near-term profitability, and will be covered first.

2. Comstock Investments comprises various assets, of which Bioleum is the most significant investment, arguably holding more potential than Metals and the rest being candidates for monetisation:

Source: https://comstock.inc/wp-content/uploads/2025/10/Comstock-Corporate-Overview_2025-10.pdf

Solar Panel Recycling Business: Comstock Metals

Solar panels typically have a lifespan of 25-30 years, and once they have expired, they are generally disposed of in landfills because they are extremely difficult to recycle using current prevailing methods. In the US, 90% of panels are landfilled, and 10% are recycled, with similar figures globally. Landfilling creates many environmental hazards, as toxic heavy metals contained in the panels dissolve and contaminate soil and groundwater. If you have been following debates over which energy source is best or worst in terms of efficiency and environmental impact, the difficulty of solar panel recycling and its consequences are among the biggest arguments against solar energy.

A huge number of solar panels are nearing the end of their lifespans in the coming years and decades, increasing the need for economically viable non-landfill recycling solutions.

Source: Rystad Energy

Solar panels have an average lifespan of 25-30 years, which means the panels being landfilled and recycled now are from the late 90s and early 20s, when solar energy was still relatively niche. After that, solar energy has experienced massive growth, and the world will face a tidal wave of expired solar panels that need to be disposed of in the coming decades.

Source: https://ember-energy.org/app/uploads/2024/11/Global-Electricity-Review-2023.pdf

The Rystad graph only shows the value from the recyclable materials, of which silver and aluminium are the biggest contributors, but the bigger share of the recycler’s revenue comes from the “tipping fee”, which is what the recycler gets just from taking the waste.

Source: https://comstock.inc/wp-content/uploads/2025/11/3Q25-Earnings-Call-Slides.pdf

The economics Comstock presents for its solar business, if realised, are insane.

Based on Comstock’s pro forma calculations, a 100,000-ton-per-year facility requires only 12 million USD of CAPEX and would generate 55 million USD in annual profit.

100 000*500=50 000 000 tipping fee revenue

100 000*200=20 000 000 metals revenue (higher than this at current silver prices)

100 000*150=15 000 000 all in costs

=55 000 000 USD annual profit

And initially, the profits are going to be tax-free for Comstock due to the NOLs it has accumulated over the years.

And with profits from 1 year at full capacity, Comstock could fund CAPEX for multiple new 100k plants per year.

Comstock is commissioning its first 100k plant in Q1 of 2026, with ramp-up in Q2. From their recent raise, Comstock has cash to finance the first facility and to last until Q2, when they expect to reach profitability. If all goes to plan, of course.

Their goal is to have a 2nd 100k plant commissioned in Q1 of 2027. By 2028, they expect to have at least 3 plants up (annual profits of $165 million), and by 2030, potentially 7 (annual profits of $385 million). If they can execute on this, given it’s a high-growth business with a strong future outlook, the market cap would be in the billions.

So it really sounds amazing; they are in this hyper-growth niche with a massively profitable business model. And the current market cap is only $167 million with a clean cap structure and balance sheet. So obviously, the market is not pricing in that Comstock can actually execute this. And of course, it shouldn’t be priced fully, as a company can always project all kinds of futures without being accountable for delivering on them. We all know the disclaimer:

“…Forward-looking statements are not guarantees, representations or warranties and are subject to risks and uncertainties, many of which are unforeseeable and beyond our control and could cause actual results, developments and business decisions to differ materially from those contemplated by such forward-looking statements…”

But in this case, the market is not giving them much credit at all, especially when you consider all the other assets Comstock also has(covered later).

So let’s see what’s going on with their technology, construction progress, partnerships, permitting, proof, certifications… maybe we can find a reason for this pessimism in the market.

Comstock has a solar panel recycling technology that gets rid of 100% of the solar panel, recycling the valuable materials and incinerating the other stuff. The end products are aluminium flakes, glass pearls, and metal tailings.

Source: https://comstock.inc/wp-content/uploads/2025/11/3Q25-Earnings-Call-Slides.pdf

The slide above shows their 135k-panel-per-year demonstration-scale facility, which has already proved that the technology works as intended at that scale. And to not get panels and tonnes mixed up. Their large plant commissioning in Q1 is 100k tonnes per year, which is equivalent to 3 million panels per year.

From the metal tailing, silver is the highest revenue generator. “What was really a surprise is the grades of silver that were concentrating in the metal tailings. We would have been probably pleased with 15–20 ounces of silver per ton. We’re consistently depending on how fine we screen getting 30, 40, sometimes 50 ounces per ton of these residual materials.” With those recoveries of silver, Comstock's new plant would be among the largest silver “mines” in NA.

Comstock doesn’t refine the silver, so it doesn’t get the full value from it( they get 50-60% of silver value), although they have said they are planning to do this in the future, as they are a former pure mining company that still owns mining assets and has expertise in the sector.

The recent silver price surge has raised estimates for their mineral & metal recoveries per tonne from 200$ to over 250$, “…pushing $40 an ounce. That increase in price just over the last year contributed our estimates from going from $200 a ton recovery to almost $250 a ton recovery to now slightly over $250 a ton.” Now the silver price is already at 61$, so the already insane economics at 200$ a ton, which was used for the earlier calculations based on their pro-forma, are going to be even better if the silver price remains high.

Source: https://comstock.inc/wp-content/uploads/2025/11/3Q25-Earnings-Call-Slides.pdf

In their presentations, Comstock outlines 4 major advantages of their technology as the CEO puts it: “There’s four very, very key things that we believe are novel that our technology does that nobody else can do.” These quotes are from the CEO during the Q2 nd Q3 earnings calls presentations explaining these four “key things”:

1. “We thermally destroy at the molecular level. We’re breaking carbon bonds and we’re thermally destroying these polymers, these laminants, these plastics such that they are broken down and ultimately reassembling with very very safe emissions. CO2 going up the stack. So we have air quality controls, we have scrubbers, but we do not have any harmful emissions and we eliminate all the contaminants.”

2. “We don’t harm the metals. We don’t carbonise, we don’t destroy, we don’t burn the metals in our process. And into that point, if laminants and plastics are sticking to the silver or sticking to the glass or sticking to the aluminium, they’re not salable. In fact, if you do that, you’re just generating new hazardous materials. And the permitting regime that we work under wouldn’t even allow that. So we have a zero landfill solution because those aluminums, those glass and those silver tailings come out clean, free of those contaminants.”

3. “It also has the lowest variable and operating cost in the industry. We don’t see anyone that’s even close to our variable cost profile” -“It’s ridiculously efficient. Our variable cost are less than 7% of our revenue. Less than 7%. Most of that is natural gas and the rest is electricity. But in reasonably and relatively small quantities for what we’re doing”

4. “And then the fourth, which I think is the most powerful is, it’s fast. Do a panel every 7 seconds. What does that mean? Of course it means we have incredibly high throughput, low variable cost, high speed process, but it’s more than that because that speed is what enables us to scale. One production line can do millions and millions and millions of panels per year. 3.3 million panels per year from one production line. We don’t know anybody that can do that.”

In summary, it’s the fastest, has the lowest variable cost, produces clean end products, and doesn’t produce harmful emissions. Comstock's technology addresses the main problems with recycling solar panels: high cost, difficulty producing a clean end product due to contaminants sticking to it, and dealing with toxic elements.

So far, we have 2 important points of validation that this technology works as intended: the demonstration facility and the 3rd-party validation.

Source: https://comstock.inc/press-release/comstock-metals-awarded-the-first-r2v3-rios-certifications-for-zero-waste-solar-panel-recycling-in-north-america/

Why is this significant? R2(R2V3=the newest version) is a leading international standard for the recycling of electronic waste(e-waste), especially in the United States. It not only validates the technology but also increases their business partners’ ESG scores, reduces their legal and financial risk, and, most importantly, helps them get regulators on their side to secure permits. The screenshot below is from the official website of the EPA (United States Environmental Protection Agency). Showing that the US government is encouraging companies to get R2 certification:

Source: https://www.epa.gov/electronics-batteries-management/certified-electronics-recyclers

Pathway and progress to commissioning the largest US solar panel recycling facility in Q1

Source: https://comstock.inc/wp-content/uploads/2025/11/3Q25-Earnings-Call-Slides.pdf

Comstock has operated this demo facility for almost 2 years and has been generating small amounts of revenue from it. The new facility commissioning in Q1 is around 22x the capacity(from 135k to 3m) and will be in the same location

Source: https://ndep.nv.gov/uploads/documents/PUBLIC_Comstock_Metals_Written_Determination_Application_V3.0.pdf

Comstock is building a large inventory of panels to be ready for commissioning:

Source: https://comstock.inc/wp-content/uploads/2025/11/3Q25-Earnings-Call-Slides.pdf

Other progress includes:

Source: https://comstock.inc/press-release/comstock-announces-third-quarter-2025-results-and-corporate-updates/

They have also started “advanced activities for the next three site selections for U.S. facilities and storage capacities”.

The permitting situation:

This is what they said in the last update “We just received affirmation on the imminent issuances of our remaining permits, on schedule”, This is the schedule:

Source: https://comstock.inc/wp-content/uploads/2025/11/3Q25-Earnings-Call-Slides.pdf

So far, they have received:

June 5th, Expanded county storage permit for recycling ramp-up.

November 5th, received notification of eligibility for a Written Determination Permit for solar panel processing.

November 24th, received notification of eligibility for an Air Quality Permit.

The permits are moving forward pretty much on schedule. The last two permits are subject to public notice periods that have started, during which, if problems arise or someone objects, the final issuance could be in danger.

Permitting risk is never zero, but I would say it’s very low at this point due to the R2V3 certified status, no issues or delays so far, the company having already operated the Demo in Nevada at the same location and Nevada being a great business jurisdiction. And to top it, they just press released this:

Source: https://comstock.inc/press-release/comstock-metals-receives-recognition-for-its-business-development-from-economic-development-authority-of-western-nevada-edawn-and-nevadas-publicly-elected-officials/

“Comstock Metals was also honored to receive official recognition from U.S. Senator Catherine Cortez Masto, U.S. Senator Jacky Rosen, and Nevada Governor Joe Lombardo.”

To secure a supply of solar panels and customers for the end product, Comstock is engaging with potential customers and signing MSAs (master service agreements) with significant players like RWE Clean Energy:

Source: https://comstock.inc/press-release/comstock-metals-and-rwe-clean-energy-enter-strategic-solar-recycling-partnership/

They also signed three other MSAs with unnamed big companies in Q3. Utility, E-recycler and a manufacturer:

“We signed three meaningful new MSAs just in the last quarter. I know we signed more than that, but I’d like to say three because remarkably we signed a major utility which is our bread and butter and we’re targeting and what we have the most of. We signed an e-recycler which is prominent and big volume potential. And we even signed an OEM like an original manufacturer. Not a lot of solar panel manufacturing in the United States, right? Most of it’s in Asia. Those businesses it’s a little counterintuitive. They’re not end of life. They’re beginning or unfortunately panels that never are born because something went wrong, you know, but it’s steady Eddie businesses, you know. So we signed three of those. We’re very excited about that. And that’s our strategy, right? To build the biggest market share in the industry through these master service agreements.” Q3 call

Source: https://comstock.inc/wp-content/uploads/2025/11/3Q25-Earnings-Call-Slides.pdf

Permitting, construction, customer engagements, funding, and inventory buildout. Everything seems to be going according to plan so far.

Risks for the solar business

• Permitting risk is low, as I went over.

• The financing risk is low if the facility performs and starts turning a profit in Q2; they should have more than enough cash to cover Q4 and Q1 burn and the capex.

• While the technology works, the scale of the new facility is way larger. Many potential technical issues could arise during scale-up that I couldn’t even name, as I’m not an expert with machines or recycling.

• Slow ramp-up, which could delay profitability.

• Once the facility is in production, if the economics are not as good as the company has presented, it’s a risk. However, the market is not presently pricing in those economics.

• There was an agreement to give 20% of the metals business to the President of the division, Dr Fortunato Villamagna, who joined Comstock in 2023 also developed their recycling tech “Dr. Villamagna developed the proprietary process for recycling of end-of-life electrification products, which Comstock Metals is commercializing first in solar”

Source: https://www.sec.gov/Archives/edgar/data/1120970/000143774925032230/lode20250930_10q.htm#notes

The agreement was cancelled, and now Comstock owns 100% of the metals. It’s generally presented to investors that way, but shareholders should not be surprised if, in the future, Fortunato gets a big cut of the business or some other major form of compensation. He likely didn’t give up his 20% for nothing. And just based on how the management explained this situation in the Q1 call, it sounds like they are just executing something of similar scope differently for tax purposes:

Source: Seeking Alpha Q1 transcript

Also, the CEO said in an interview published on 25.5 after the 20% was officially cancelled:

“20% of the equity going to the founders, which by the way is exactly what we did with Comtock metals, Fortunado, and the team. 20%.”

So it sounds like there is an unofficial agreement, even if the financials show 100% ownership and no agreement. So, I would conservatively assume 80% ownership of metals in the long term.

• Slow ramp-up could be caused by technical trouble or a lack of panels, which would delay profitability.

“So we’re commissioning in Q1. I would love it if during Q1, we had 15,000, 20,000 tons of material sitting there. So that’s certainly possible. We already have almost 5,000 as you saw the pictures of. And then we’ll ramp up starting in Q2 with the production plan. We don’t have total clarity at 20,000, 25,000 tons, we’re making money. So that’s our first milestone, then it will ramp up from there.

I wouldn’t imagine that, that facility would be running full probably until the end or the latter part of 2027. The data points that we’re getting suggest the quickening, right? But it’s just still too early. When you talk about, well, oh, we got 80,000 panel order last -- the beginning of this year, we’re super excited. Now you’re talking about orders that are like 3x and 4x that size.

It gets very exciting. So the preliminary data points tell us it’s coming sooner. But we just don’t -- we don’t have certainty to that, but it’s coming. We’d like to get Site 2 up at the beginning of ‘27. We’d like to get the Site 3 up at the beginning of ‘28 or earlier, right?” source: Q3 call

• Not getting enough panels, competition and tipping fee erosion. These risks are bundled as if there is greater competition for end-of-life panels, and fees for removing them from the utility's hands would decrease as they become more sought after. Also, if Comstock expands in the US faster than the market can catch up, there would be a similar effect. Lower tipping fees and reduced supply, which would prevent them from running machines at full capacity, would result in worse economics. Of course, these risks would be later problems when Comstock has already succeeded and de-risked in many other ways, and the stock would be way higher than it is now.

They have reduced supply risk through the MSAs, but as the company scales to multiple plants, they might struggle to secure enough supply to run the machines at full capacity in the next few years if there is competition.

Source: https://comstock.inc/wp-content/uploads/2025/11/3Q25-Earnings-Call-Slides.pdf

The market is growing rapidly as the wave of old panels is coming to the end of their lives, but the new facility is 100,000 (3 million panels) tonnes per year, and, based on this, the market in 2025 is 100,000 tonnes. If competitors enter the market, the supply could get tight.

Their main rival in the US is Solarcycle, which recently expanded its facility to produce 1 million panels per year. Many sources say they are on track to recycle a million panels this year.

Solarcycle had/has a plan to build a facility in Georgia(US state, not the country in central asia) with an initial capacity of 2 millon panels per year and to be scaled to 10 million panels per annum, and bad news for Georgia, but good news for Comstock, the construction of this project has been halted due to end of subsidies under the new US admin.

Source: https://www.mrt.com/business/article/solarcycle-odessa-layoffs-20809558.php

And while this is great news for Comstock, because this facility would have been their biggest competitor. This article raises another important point about Comstock's advantage. Solarcycle’s technology has such high capex that they needed government subsidies—$500 million for a 10-million-panel-per-year plant. Comstock, according to them, needs only $12.5 million for a 3-million-panel-per-year plant. Comparison Capex/panels per year, Solarcycle 50m and Comstock 4.16m. Solarcycle has 12x the capex when equating the recycling capacity.

There are other companies with plans for scale-up over the coming years, but these are small and private (OnePlanet, We Recycle Solar), and the information on their economics, progress, and ability to secure funding is sparse, so it’s hard to take their statements seriously.

If Comstock can execute, it is well-positioned to take the US market. And if the company has only 30% market share after a couple of years, the CEO considers it a failure:

“As I said earlier, if we do one a year for three years and we have a 30% market share I’ll personally feel like we dropped the ball. If we have a look, I want 100% market share, but we’ll see what happens, right? We get 50%, 60%, 70%, it’ll be because we went for it all, not because, you know, we were satisfied with less. So when you when you have $55 million(annual profit) a facility, you start thinking about five, six, seven facilities and remember everybody we’re only talking about the United States. We haven’t talked about anything else. So it’s big.”

We can talk about 4-7 facilities by 2030 and $220-385 million of cash flow, and put some multiple on that, but it is not the most relevant right now. What is most important right now for this business is to prove the Metals business model with the first facility. Can they actually build something, for $12 million, that generates $50-60 million in annual profit? Proving this will be the biggest catalyst; it will be a bigger catalyst than the initial cash flow itself, because it will get the market’s imagination going. Investors will start making models about how many facilities they will have in the US, and after that, internationally, and what multiple they could put on those earnings, etc. Now, the market is still hesitant to believe it until they see it. It sounds too good to be true. But putting it all together, while there are risks, I don’t see any huge red flags for the solar recycling business.

The solar recycling business was my main reason for investing in this company. It alone presents a very strong risk/reward case, but they have another business, Bioleum, which is in an earlier stage, less de-risked, but has higher future potential and has the highest valuation of Comstock's businesses, based on multiple transactions. On top of that, Comstock has multiple non-core assets with material monetisation value, which will all be discussed next.

This was around 40% of the article. The other 60% is behind a paywall and covers Bioleum(the biggest section), the mining assets, green Li-ion, real estate assets, the bear case, the catalysts and the closing thoughts.

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02:50 What is Sintana paying?

05:20 Will the acquisition close?

07:00 Assets of Challenger

22:37 Benefits of combining the companies. How do these assets fit Sintana’s LT plans?

27:00 Timing of the acquisition

32:08 Shadiness

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55:55 Other recent Sintana news

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This article is a collaboration between me and Premski, who wrote most of it and also presented this investment idea to me.

Thesis

Microcap in a perfect storm to benefit from the critical minerals craze in the US

LibertyStream $Lib.v is a US company pioneering direct lithium extraction from oilfield brine, which is a waste by-product of classic horizontal oil production. The company operates in partnership with a large water mover in the Permian Basin and has completed small commercial-scale field runs processing 250,000 barrels of brine together with that Partner.

With a market cap of ~78mln US$, Liberty is a pre-revenue play on domestic lithium independence. The thesis relies on:

• Tailwinds emerging from a perfect storm described below that will allow the company to:

  • Receive a loan from the Department of Energy

  • Secure offtake agreements,

  • Leverage state and federal grant programs

• Scale production rapidly through their Partner’s existing water infrastructure.

Market Cap ($US) ~78 mln

Enterprise Value : ~78.64 mln

Net Debt $ ~0,64 mln (Oct 2nd)

Shares outstanding: 173 mln

Warrants: 10M warrants at .44CAD expiration Nov19 2026

3.4mln warrants at .35 expiry May 2026 (held by the Partner)

Insider ownership: 9%(of which CEO 6.7%)

Biggest shareholder: PathFinder Asset Management 8.23%

Opportunity - Projected future revenues:

• Production of 6 units - 108m US$

• 50% of just Permian water processed - 1.4bln US$

• Water of both Permian and North Dakota - ~3bln US$

Background - The Perfect Storm

Re-shoring of the Lithium Supply Chain

Lithium has been neglected in the US for years. Globally, it was very cheap most of the time (apart from a spike caused by the EV craze), and it is always easy to buy, as the entire supply of refined lithium comes from China (battery-grade lithium):

Source: Statista; “Global lithium mine production top countries 2019“

Source: Government of Canada. Natural Resources Canada. https://natural-resources.canada.ca/minerals-mining/mining-data-statistics-analysis/minerals-metals-facts/lithium-facts

Reliance on products coming entirely from China is a big problem nowadays. Therefore, there is a huge funding opportunity announced by the Department of Energy here: Link

500 mln is dedicated to lithium (among other metals):

Source: https://www.energy.gov/articles/energy-department-announces-actions-secure-american-critical-minerals-and-materials-supply

If you are wondering why refining happens mostly in China, it is because this has a negative impact on the environment, and Western countries obviously do not like that, so as time went by, China took over the entire market. Another thing is that China is intentionally flooding the market with cheap materials to exhaust the competition.

As we are seeing global fragmentation (especially in the supply chain), Ken Griffin even confirms it here (timestamp 18:06).

The bet here is that lithium MUST BE produced and sourced from within the US, and LibertyStream will be the frontrunner coming online with production sooner than anyone else.

Upcoming Chinese export controls on Lithium

Beginning November 8th, lithium-ion batteries will fall under new export controls. Although refined lithium itself hasn’t been added to the list yet, the tightening regulations around the broader lithium sector are making U.S. players increasingly uneasy. Key areas to monitor include lithium carbonate exports and refining equipment used to convert lithium chloride into lithium carbonate. All the developments and atmosphere around the China-US trade war will help Liberty in all their efforts (offtake agreements with premium pricing on lithium, getting financing from the State and DOE). Domestic US manufacturers who are relying on Chinese battery-grade lithium are getting nervous. Here is what comes under export controls now:

Source: https://www.hsfkramer.com/insights/2025-10/china-export-controls-lithium-batteries-and-artificial-graphite-anode-materials

Basically, anything that is being exported from China can be held and delayed just because some authorities are asking questions or are delaying export license issuance. Don’t get me wrong, you still get your lithium, but it may come delayed, and you will not know by how many days. I am a former sourcing and procurement consultant(Premski). Securing a source of supply by having geographical diversity is extremely important in the current geopolitical environment. That is why a domestic lithium producer of battery-grade lithium will come at a premium.

As part of a push to decouple from China, the G7 countries (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States). Announced a Critical Minerals Production Alliance, which includes lithium and various beneficial measures for LibertyStream if implemented.

Source: https://economymiddleeast.com/news/g7-nations-unite-to-launch-critical-minerals-production-alliance-to-reduce-western-reliance-on-china-for-technology/

Current political backing and future DOE opportunity

While Liberty’s main focus is in Permian, senators and governors of North Dakota are supporting company efforts to stand up the business, even if it means financing equipment for operations in Texas. North Dakota will have an enclosed defense industry with an entire supply chain that is independent from China, and Lithium is part of it. Lithium will be used to manufacture small custom batteries for night vision goggles, some models of drones, etc. That Lithium will be taken from the oil brine in North Dakota. Here is one specific evidence on why there is political support behind the scenes:

Liberty receives a grant from the state of North Dakota to purchase a refining unit that will be used in Texas

Source: https://www.dropbox.com/scl/fi/4si94389ybyt2jvho41aj/250811-PR-LibertyStream-ND-Grant-and-Refining-Unit-Final.pdf?rlkey=6q7ol77yzsyotlq2ec6wktufk&e=2&st=qrj6oer9&dl=0

It is not easy to get a grant from the state. You need to have a strong case. But to get funding from North Dakota to do refining in Texas ?!?? How common is that?

Liberty Stream has received five direct grants from the State of North Dakota, reflecting consistent state-level support for its lithium extraction technology. The funding began with an initial US $500 000 grant in late 2024 to conduct pilot testing in partnership with Wellspring Hydro, followed by a US $2 million follow-on to expand those field operations. Soon after, Liberty secured a larger state-approved facility under the Clean Sustainable Energy Authority and Renewable Energy Program, from which it drew US $700 000 to purchase its first lithium refining unit. In October 2025, the company received a further US$500,000 Renewable Energy Program grant to validate production of battery-grade lithium carbonate. These cumulative awards—each specifically granted to Liberty’s projects underscore North Dakota’s confidence in the company’s DLE process and its potential to establish a viable in-state lithium supply chain. In total, that is US $3.7 million in grants so far.

Libertystream has a strong case for receiving potential funding from the Department of Energy, as people who are granted funding from North Dakota are involved in DOE funding, too.

The company has submitted multiple applications for Department of Energy (DOE) funding. The most likely outcome is a $30 million forgivable loan, which, if approved, would be a game-changer for a microcap company like Liberty.

Important people who can play a role in support of Liberty are:

1. Doug Burgum, the current U.S. Secretary of the Interior and former Governor of North Dakota, previously chaired the North Dakota Industrial Commission, overseeing the state’s energy and grant programs. During his tenure as governor, he was among the officials who approved the state-backed grant facility through which LibertyStream’s North Dakota funding was authorized.

2. The current Secretary of Energy is from the oil & gas industry and understands the opportunity that comes from extracting minerals from oil field brine. His short bio:

• Chris Wright is an engineer-entrepreneur who founded several oil & gas and energy technology companies (including hydraulic fracturing and geothermal ventures) and was confirmed as the 17th Secretary of the U.S. Department of Energy in February 2025.

• His agenda emphasizes “American energy dominance,” spanning oil, natural gas, nuclear, and geothermal sources, with an expressed goal of cutting regulatory barriers and accelerating energy innovation.

  

Source: Seeking Alpha Premium

Here are the share prices of some critical minerals companies that have recently received grants from the DOE, or the US government has taken a stake in the companies. 2 of these are lithium companies Standard Lithium(SLI) and Lithium Americas(LAC). And consider that a lithium bear market has been underway during this period. SLI, a Canadian company with a US project like Libertystream, received a $225m grant from the DOE. LAC got a very favorable loan from DOE, and the government took 5% stake. These examples show what is possible for Libertystream, and considering the previously mentioned lithium companies have market caps 10-30x larger than Libertystream’s. You can imagine the market’s reaction if Liberty Stream were granted benefits similar to those granted to SLI and LAC.

Water Infrastructure Tailwinds

This is related to Liberty’s Partner, which will grow in importance and will get even more water as time goes on. Water movement in the Permian, from which the lithium is extracted, is getting more restricted.

The industry is running out of space to safely inject it back into the ground. Historically, produced water was injected deep underground into disposal wells, but this led to seismic events (earthquakes), forcing a shift to shallower injection methods. Now, the remaining pore space, especially in shallow zones, is being over-pressurized, which can interfere with oil-bearing rock and cause underground disturbances from old, abandoned wells. Additionally, nearly half of the Permian production is in New Mexico. That state has enacted far more stringent environmental regulations, including banning shallow disposal, creating a need for systems to move water across the state border into Texas for disposal. These restrictions are forcing a dynamic approach to water management and disposal, which creates a competitive advantage for companies that own existing disposal infrastructure and can provide long-term solutions.

The other piece of the puzzle is that upcoming desalination and produced-water reuse directives in the states around the Permian Basin are expected to enable lithium concentration to approximately double - allowing Liberty to effectively double output at the same cost base.

Source to see more: Link

Their current Partner in Permian will be growing in size and in water quantities because water movers in existing infrastructure will rise in importance and will be able to gain more leverage over Oil producers who are paying them for oil brine disposal. See more here to get the entire background.

Structural tailwinds for offtake incentives

Liberty is providing samples to prospective customers right now. They are targeting manufacturers who need 1000 - 2500 tonnes per year.

Ignore completely Batteries from Electric Vehicles (Tesla, etc). There are a lot of devices that run on lithium batteries that are manufactured in the US and would source lithium domestically if available. Think of pacemakers, hearing aids, and night vision goggles. All these devices require a custom-made small battery, and if China blocks refining lithium shipments (export controls), these manufacturers are stuck.

Right now, out of 66 projects in the US, hardly anything is in production!

Source: https://www.dallasfed.org/research/economics/2025/1014-plante-lithium :

“Two smaller projects in East Texas and Pennsylvania aim to start production in 2026. Their combined initial production will be less than 10,000 tons.”

Liberty is sending out samples to prospective customers right now, and they are the only ones doing it. Liberty has no competition at the moment when it comes to selling domestically produced lithium carbonate. They will be able to capture their share of the market that requires a domestic source of lithium at a different price than the global spot price, heavily governed by China.

Industry Primer:

How is lithium produced today?

Here are the sources and methods of production :

Source: Lithium Harvest presentation

So we have:

1) Hard Rock Mining:

That is what happens in Australia, for example, and is being planned in the US. To start a mine, you need a huge CAPEX investment and go through all environmental permits, not an easy task, and it takes years, as there is a lot of exploration needed to map out the asset-rich in lithium to come up with a proper mine plan.

Project timelines to get to production are around 8-10 years.

2) Brine evaporation:

Mainly done in Chile and Argentina in the deserts. Takes up a lot of space and is problematic from an environmental perspective as it is water-intensive. This segment will be shrinking over time as even LATAM countries are no longer keen to continue the extraction method. See more here at 4:14, as it is a very impressive method.

Project timelines to get to production are around 10 years+, but I would not expect any new projects of this type to appear anywhere in the US.

3) Direct Lithium Extraction (DLE) from saltwater reservoir

Multiple companies are advancing their projects in Canada and the US. Standard Lithium (recently received a grant), or E3 Lithium. They take lithium from reservoirs known for being rich in lithium. They need to pump it out from the underground and require a high level of CAPEX to set up drilling, get permits to ensure there is no seismic risk, or that the environmental impact is not significant.

Project timelines to get to production are around 5-7 years.

4) Direct Lithium Extraction from oilfield brine.

Similar to 3, but all lifting costs of taking the brine from the ground are handled by oil producers. This significantly reduces OPEX. There is no new drilling, no need for permitting either, because you plug into an existing water system at the disposal well. Such an operation produces much less lithium because your water is just simply a by-product of oil production and not really a selected water rich in lithium; this is offset by much smaller capital requirements and the ability to start operations rather quickly. Production can start running in 6 months; in fact, the first demonstration facility was set up in 5 weeks’ time.

LibertyStreams’ method compares very favorably to other extraction methods:

Source: LibertyStream corporate presentation

LibertyStream Operations:

Business Model - How Liberty Works?

To put it simply, for every oil barrel that gets extracted, there are 3-4 barrels of water coming out of the ground as well:

Full video explanation

Exxon, Chevron, Occidental Petroleum, etc., produce oil and also bring up large volumes of this “produced water.” They need to dispose of it, which has created an entire industry focused on water handling and transportation run by companies known as midstreamers. These midstreamers are paid to collect, transport, and, in some cases, treat produced water before reinjecting it into designated underground formations called saltwater disposal wells (SWDs).

The water doesn’t come for free—you actually get paid to handle it!

This is where LibertyStream comes in, as water goes through their extraction process for about 60-90 minutes:
How clean is the water after going through Liberty Stream’s plant? Could there be a long-term business opportunity to sell that water for agriculture or industrial processes? If re-injection becomes increasingly difficult to permit, re-purposing the water instead could be a viable alternative. Of course, someone like the midstreamer would have to build water pipelines to deliver water to large customers (e.g., mines, coal-fired power plants).

Does the technology work?

Before Liberty Stream, lithium extraction from oil-field brine had never been successfully demonstrated on a commercial scale.

While laboratory tests showed promising results, the economics quickly broke down once operations scaled to processing large volumes of water.

Source: LibertyStream corporate presentation

Libertystream has now operated continuously for over 100 days in the Permian, with both its own and its Partner’s technicians running and independently sampling each extraction tank every ten minutes. Results were double-checked in separate on-site labs, confirming consistent recoveries and validating that the system performs reliably at scale.

The process itself runs in three main stages:

1) Pre-Treatment:

Produced water from oil operations is first screened through filtration units to remove hydrocarbons, iron, and suspended solids that could foul the extraction media. Early field runs without filtration showed the titanium-dioxide resin darkening over time; after figuring out that the brine needs pre-treatment, reagent consumption fell sharply. What is worth knowing here is that many midstreamers already pre-treat (remove iron, organics, oil residue) from their own water for reuse or desalination, which will further reduce Liberty’s operating costs over time

2. Direct Extraction

The company’s proprietary media is a titanium-dioxide nanoparticle formed into a lattice “cage.” Only atoms small enough to fit, which are hydrogen and lithium ions, enter this cage, while larger ions like calcium and magnesium remain on the surface without blocking lithium uptake. This selectivity allows efficient extraction even from ultra-low-grade brines (~30–50 mg/L). The brine spends roughly an hour in contact with the media, yielding a lithium-chloride solution while returning water to the partner’s disposal well. The media can be chemically cleaned and reused for many cycles without performance loss.

3. Refining:

The lithium-chloride solution then passes through a three-stage refining train: softening out calcium and magnesium, dehydrating the solution, and converting it into lithium carbonate. The last step is a well-established industrial process used for decades, and it will be something that Liberty is working on now after installing a small refining unit at its pilot facilities. The company’s first dedicated refining unit—partly funded by a North Dakota grant - operates on feedstock concentrations as low as 1 % LiCl and achieves recoveries approaching 99 %.

In short, the answer to the question of “Does the technology work?” is yes, with the caveat that the refining unit is not yet commissioned.

The Moat

Source: LibertyStream corporate presentation

Liberty Stream’s extraction setup is inherently sticky by design, both physically and economically. Once installed, the company’s DLE units are plumbed directly into the midstreamer’s water-disposal network, sharing the same pipeline and pressure system used to move produced water to injection wells. Although every flow line includes a standard valve or kill switch allowing operators to isolate Liberty’s system if needed without causing downtime, the reality is that Liberty’s infrastructure becomes part of the midstreamer’s permanent steel-in-the-ground assets. Replacing them would still require re-engineering flow routes, digging up buried pipework, and disrupting an already optimized system. This physical integration creates long-term operational inertia, while the steady lithium revenue stream generated from water that was previously a cost center adds a financial incentive for partners to keep Liberty in place. In short, Liberty’s moat comes from being literally built into the flow and from helping its partners turn waste into profit. Liberty’s first mover advantage plays into this advantage perfectly, as if LibertyStream can position itself with multiple units over the coming years, even if a competitor with a better technology comes around, the cost of switching is likely not worth it for the midstreamer.

Another competitive advantage of Liberty is that its tech has been specialized for the type of low-lithium-content Brine of the Permian and Bakken.

Source: Pathfinder Planet MicroCap Showcase 2025

Here is an explanation from the Pathfinder presentation. It’s a long quote, but it’s a very good explanation:

“So basically all these people kind of working on North American brine initially in-house were technology and resource companies and they picked ion exchange because they knew it was the best chance but they don’t want to be technology companies they want to be resource companies so they’ve moved and kind of given third parties reign over the DLE and have moved to absorption which is just better understood. but it’s not going to work as well for North American brines. So, the only bespoke sorbent designed for low ppm brines, low lithium ppm brines, um that I know of is Liberty Streams. And that is important because if you take a look at these brine compositions, they’re completely different from each other. it’s tough to argue that something developed for brine ponds, like most of those Gen One absorption are, are going to work really anywhere else.

If you take a look at some of these metrics on the bottom here, they’re what qualify what a good brine might be when it comes to extraction and you can see North America across the board, which is the five rate basins of North America. The far left one is just a generic South American brine pond. They’re all terrible(NA brines). Smackover is about the only one that’s redeemable with its 400 ppm. So, we need probably new technology to do this efficiently.

If you use an inefficient technology, just look at the barrels you need to flow. You know, some of these projects in North America want to do 20,000 tons. Like we’re talking Keystone XL volumes and if your sorbent’s inefficient, scaling becomes basically uneconomical.

So, Liberty Sorbent, that’s bespoke, developed at the National Institute of Nanotechnology for them, specifically for low lithium ppm brine has allowed them to kind of leapfrog the competition in addition to them partnering with midstreamers.

So, almost everyone again that I know of in North America that has a demo facility at site running goes about to that dotted line there. And what that is is post polishing and concentration. When these companies say, “We’ve produced a battery grade carbonate,” what they’re doing is they’re taking a few liters from their site, sending it to a lab to produce a few ounces of a carbonate. And that’s fine. That validates the entire upstream process. Liberty by November will be running the whole process at site connected to the third party midstreamer who’s operating it, producing battery grade lithium carbonate at roughly a thousand barrels a day. That’s my napkin calcs. They are light years ahead of anyone else. And really what’s driving this is their partners. So these midstreamers, this is all they do. They take vast quantities of brine, they move it, they dispose of it, they do some form of pre-treatment. This is their life. And so Liberty is just leveraging that. So they can deploy technologies faster and test new technologies and scale much quicker than their competitors.

The combination of specialization, high switching costs, and first mover advantage is enabling Liberty to potentially create a monopoly in the lithium extraction from oil brines in the Permian and Bakken.

Management & Governance

CEO Field involvement

Both the CEO and the CFO live and work from a trailer for months in the middle of the desert next to their lithium extraction operations. You can go through YouTube recordings of Liberty (search for Volt Lithium Alex), and you will notice the change that the CEO is going through, no haircut, no suit anymore, but an anti-flammable shirt instead. The CEO mentions it in this interview

58:51 Quote:

“If I was sitting in Calgary right now and I’m a shareholder of Volt soon to be LibertyStream I’d be saying ‘Well why are you in Calgary? Why are you not at your operations in the field?’ Well I’m here And that’s critical because we can accelerate faster by being in the field. Is it a sacrifice? Potentially. My family would say so. (...)and I’m driven to lead from the front and will continue to be driven to lead from the front.”

Liberty is on the final stride to get to the revenue. I want to bet on a guy who spent 6 months in a trailer to get the most difficult part of the job done.

I could not find anything fishy about the management. The CEO hasn’t had tremendous successes in the past, but has seen no failures either. He had various companies, and I checked each of them from his LinkedIn profile and didn’t see any issues, failures, or signs of fraud. The CEO claims he had 8 companies, but his LinkedIn shows fewer; an extensive search does not return anything worrisome.

CEO’s ownership is at ~6.7% total, with another stake recently added of over 100k US$ while getting financing from an existing institutional investment group, Pathfinder. The CEO has an oil and gas industry background (and not the mining one), which I find very helpful here, as he understands the businesses and players and their needs well in the sector. Understanding the needs of your partners who supply you with water is essential; sharing the lingo is very valuable. Most of the lithium management you will browse through will have a mining background (all these hard rock miners) or some chemistry/scientific backgrounds (salt water extractors, I covered in the section on DLE from the underground reservoirs). That is also the reason why the company is on the path of taking Lithium from oil field brine; the management could embrace the opportunity, as they know how much water is moved daily in the US alone.

Team Expertise

Other significant figures in the management are:

Tim Frost - His addition will help out with offtake discussions and open doors to established lithium industry relationships. The structure of an offtake agreement is actually a bit complicated, with pricing ranges and formulas used that somehow make the pricing relatable to the current spot price. Depending on how much lithium is provided, different pricing applies too. Frost’s background at Albemarle, one of the world’s largest lithium producers, gives Liberty Stream access to deep operational and commercial expertise, especially in negotiating long-term supply and offtake contracts with tier-one buyers.

Huayuan Jiang

Huayuan Jiang was playing a key role in the development of Li-ion exchange resins used by Liberty, a go-to guy when it comes to customizing their extraction process to adapt to different oil brines - something that the competitors may not possess. Huayuan Jiang worked closely with John McEwen, who recently resigned and moved on to another project. John has 30 years of technical and research experience, having previously served as Senior Director of Technical Services at Solvay Chemicals. McEwen was instrumental in developing Liberty Stream’s proprietary extraction chemistry, the titanium dioxide–based system that enables efficient lithium recovery from ultra-low-grade brines.

Brief history

Source: Seeking Alpha Premium

You might wonder what this company was doing all these years. If you look at LibertyStream’s long-term share price. What is important to understand is that Libertystream was a dime-a-dozen junior explorer focused on copper called Allied Copper before December of 2022, when it executed a complete pivot and bought the early-stage DLE business Volt Lithium from the current CEO, Alex Wylie.

Source: Seeking Alpha Premium

Volt Lithium was renamed Libertystream Infrastructure Partners in June 2025 to adopt a more patriotic-sounding name to attract US government money and to better reflect the company’s focus on partnering with O&G infrastructure. Since late 22, during the DLE period, the stock has multibagged

What explains the lackluster share price after the 2023 peak is a combination of the company being in the slower phase of testing and validating, combined with a lithium bear market and a weak oil market. The latest share price run reflects the nearing of commercialization.

Source: TradingEconomics

The DLE acquisition from Allied Copper came at the peak of the lithium market. In most similar situations, the stock would have collapsed after a company made an acquisition at the top. But this acquisition ultimately defined the company, and the copper assets were disposed of.

Competitors

Watching Shark Tank taught me one thing: If there is no competition, it means that something with the business fundamentals or industry is wrong, and you just don’t know it yet. Specifically, in lithium extraction directly from oil field brine in the US, I was able to find two other companies. Both of them seem to be a bit behind Liberty:

1. Element3

Seems to be at a similar stage of the journey as Liberty - about to start a commercialization with battery-grade lithium products. A few differences here where Liberty has its advantages:

• They are private vs Liberty being public

• Their recovery rates seem to be lower (85% vs 95%+)

• Their Partner is in the upstream segment of the oil industry and has rather smaller water quantities

• Elements3 tech is not proprietary; it is licensed. Liberty has its own tech developed by a group of PhDs who are either in the company or are collaborating

• Present only in the Permian Basin, versus Liberty being in North Dakota and the Permian Basin

• No grants vs Liberty’s grants from North Dakota

In summary:

• The partner is much worse, not exposed to large quantities of water

• Tech is licensed (so they are not in control to make the tech better if needed; customizations/adaptability may be an issue).

2. Lithium Harvest

Not as advanced as Liberty. They have gone a little bit quiet and are not responding to my emails sent to IR. It seems they have a smaller Partner in the North Dakota basin (which moves 10x less water than Permian and requires slightly higher OPEX due to different weather conditions). Their tech is patented, and it is worth observing what they are up to.

They have not been seen in terms of sending out samples to any customers. We suspect that the company was created to benefit from financing promises created during Biden’s administration related to green/sustainable projects around EVs and battery metals. Since then, they lost the momentum as they did not get any significant funding. Based on their presentation, this company would be the closest comparable to Lib.

Strategic Partnerships & Pipeline

The Partner (Permian)

The partner landed by Liberty is a “major operator in the Delaware Basin”(Part of the Permian Basin). The partner’s name has not been revealed. When it’s revealed likely next year, it will prompt investors to start digging deeper.

There are a lot of institutional investors who are invested in midstreamers, betting on tailwinds that will come to the sector. These guys will notice Liberty and quickly understand how undervalued the company is. Pre-revenue or not.

As for the Partner, they are lending some of the equipment to Liberty, and they own some shares of the company. They help out in efforts to land the first prospective customers.

Having that Partner by your side when negotiating offtake agreement(s) reinforces the strength of the proposal to US manufacturers, because it is not just a small, unknown company offering lithium, but a much larger, much more established company putting its name behind it. The agreement with Partner regarding future profits is currently unknown; I will assume a JV with a 50/50 split of operating costs and profits from common operations in my financial modelling. The Partner’s name is intentionally not disclosed, as this is a wish from the Partner that the CEO would like to honor. I suspect that the Partner wants to acquire more companies that move water in the Permian and does not want to reveal all the cards during negotiations on how to value the water that is being disposed of on a daily basis.

We are assuming a 50/50 split because Pathfinder, the largest shareholder of Liberty, said this in their recent presentation:

“It’s still not exactly dialed in. In general, it seems like this first partner is going to be a 50/50 split um in terms of revenue. That’s also a 50/50 split on OPEX costs.”

Other Partners and Brine Sources

4 major water movers are in discussion with Liberty and are under NDA. Samples of water have been provided to Liberty to run lab tests for lithium content. This is significant as it outlines the opportunity that comes with the fact of being the first mover in DLE from oil brines. Liberty can become a monopoly in the Permian; one of the projections shows how much revenue $LIB can generate for 50% of daily water being processed - the number is at 1.2 billion US$.

Commercialization Path

Refining unit commissioning Q4

Source:https://ceo.ca/@businesswire/libertystream-enters-final-installation-and-commissioning

They have stockpiled a lot of lithium chloride from their 250,000 barrels of testing. The refining unit that is being commissioned is basically a demonstration unit of only 10 tonnes per annum. 15k lithium that would be 150k per year if revenue, which is not material. The point of this unit is to produce bulk samples and send them to prospective customers. After that, based on the demand and the deal they can land, they will be scaling up the operation. Most of the CAPEX is going to the larger refining unit. Refining is the bottleneck for higher production, as they are confident in their ability to scale their extraction process:

Source: https://www.mrt.com/business/article/reeves-county-lithium-libertystream-21095148.php

Offtake Agreement – Progress So Far

Liberty Stream plans to use its first offtake agreements as the foundation for financing the CAPEX required to scale up its initial production facilities. There are 7 prospective customers, and the company expects auction-like price dynamics to get the best deal possible. Liberty cannot sign all customers as demand already exceeds what Liberty can supply in its first year, meaning that buyers most desperate for secure domestic lithium may effectively bid prices higher during contract negotiations. Rather than limiting itself to a single initial customer, Liberty intends to sign as many offtakes as its production capacity can support, expanding in parallel with available funding. To date, some of the prospective customers have requested bulk samples ranging from 100 kg to 1.5 tons to validate lithium purity and performance. These include:

1. a medical equipment manufacturer (for applications such as air/oxygen purification systems),

2. a ceramics producer,

3. a glass manufacturer that uses lithium to lower melting points and improve thermal stability.

Financials & Valuation:

The company’s market cap is 78mln US$. Once the company starts posting revenue numbers and releasing estimates, the wider investment community should wake up to the opportunity.

Here are three long-term scenarios:

Below more detailed analysis:

Here is Pathfinder’s estimate of the EBITDA potential from ramping up with different major midstreamers:

Source: Pathfinder Planet MicroCap Showcase 2025

Our calculations also used the same price as Pathfinder, 15k per tonne. NA lithium trades at a premium to Chinese and lithium in an offtake agreement trades at a premium to spot. And considering the future political factors highlighted before, such as export restrictions, price floors, etc. These are likely to increase the premium of NA-produced battery-grade lithium even more.

Each facility that could produce 900 tonnes annually would cost about 20mln in CAPEX.

Once financing is secured, Liberty Stream can move from funding to full operations in as little as six months. The company has already demonstrated how quickly its systems can be deployed, as its first extraction setup was stood up in about five weeks earlier this year, with the refining unit entering commissioning only a few weeks later. The DLE modules and refining units can also be built in parallel, further compressing startup time. While future refining units will require some lead time for shipment to arrive, the field installation itself remains rapid and modular. In practical terms, this means Liberty could have a facility capable of processing roughly 100,000 barrels per day and producing about 900 tonnes of lithium carbonate per year within half a year of funding. The timeline aligns well with customer expectations, as industrial buyers typically maintain several quarters of buffer supply from existing contracts—giving Liberty sufficient room to ramp up smoothly into commercial production.

Full return of invested capex comes in ~3 years.

Financing CAPEX

If LibertyStream doesn’t receive enough support from the states or the DOE, how will it finance the 20 million CAPEX required to build the commercial plant? Assuming they have a 50/50 deal with a partner, they would need 10 million. And for a company with a market cap of Xm USD, what kind of dilution risk does this present?

At the end of Q2, LibertyStream had only 136k in cash. Their quarterly expenses, excluding CAPEX, are about 1-1.4 million. On August 8th, they closed US$ 3.53 million promissory note financing. This note has a 12% interest rate and matures one year from closing. The bonus shares included caused only 1.8% dilution. The 2nd-largest shareholder, with a 6.7% stake, the CEO contributed 130k to this financing, and the rest came from Pathfinder Asset Management, the largest shareholder of LibertyStream, which owns 8.2% of the company. This shows strong conviction from the largest shareholders.

The CEO has been vocal about minimizing dilution. Quotes from an interview:

“Well, what we have to do is scaling up takes money. And again, I’m the largest shareholder. I don’t want to dilute it. The fear for any company our size is completely diluting the shareholder base and destroying all value. I’m not prepared to do that. So, what we have to do is be real smart about how we access capital and what type of non-dilutive capital that we’re working from.”

“Can we scale it? I’m highly confident we can, but I’m not going to scale us at the risk of completely diluting all our shareholders.”

Given the pre-revenue nature of their business, they have been successful in keeping dilution to a minimum. Last Private Placement closed in November 2024 and raised only 483k. After this, they have been able to finance their scale-up with Grants US$ 3.7m and a Promissory note US$ 3.53m.

This shows that the CEO is serious about keeping dilution to a minimum and that massive dilution to finance growth seems unlikely given the track record and statements. Still, some dilution is likely, or at least we should not be surprised by it, due to the financial demands of the scale-up.

And the recent surge in valuation gives them the option to raise money with significantly less dilution than before. In pre-revenue companies, a higher valuation is very beneficial in this regard.

Risks and near-term catalysts summarized

Risks:

• The Partner decides to either acquire the company or process things on their own

• Not meeting the specifications of a high-tech battery company. There is still plenty of demand from easily meetable specifications

• Small company, still some hiccups on the last steps of refining may occur, although this is a rather easier step and has been done in the industry for 30-40 years

• Dilution risk is reduced by CEO incentives and a track record of raising non-dilutive capital, but it’s still a risk in any small-market-cap, pre-revenue growth company.

• Delays. Kills momentum.

• Sourcing the refining unit and parts for it may be subject to export controls. It makes Liberty rely on third parties that, if delayed, may impact the execution of the offtake agreement

• OPEX is higher than what we see in all the other Libertystream write-ups. It is about 8k US$ per tonne. Long-term OPEX is 4-5k after the scale-up. In case of lower pricing agreed in the off-take agreement, this will put a strain on the margin.

• Oil/Brent price going down to 40$ or lower - making Permian operations slowly shut down and having less and less water to get Lithium from.

Near- and Mid-term expected catalysts:

• Refining unit commissioning Q4

• Offtake agreement Q4-Q1

• Partner reveal. 2026

• DOE grant, loan, or more grants from North Dakota State. Any day.

• Expansion of the first unit to 900 tpa. 2026

You may notice from the risks and the catalyst that the bull and bear cases are quite uncorrelated with the general economic situation. In this way, LibertyStream can have a diversifying effect on one’s portfolio.

AlmostMongolian’s positioning and price action thoughts

I bought a small position at 0,255 and 0,29 cents. I was planning to get more, but then the stock took off. Due to the share price surge, it’s now it’s a mid-sized position. The recent stock price action has been wild. There have been many +20-30% daily moves with no news and massive volume. The stock is up +169,76% in the last month. The news flow has been positive(new 500k grants, refining unit commissioning updates), but not significant enough to alone explain such a large move, on top of that we have seen some institutional buying and a lot of media exposure in a short period, write-ups, articles, and the Pathfinder presentation. I would say it’s a combination of these things that has ignited the up move.

I’m neutral on the stock price in the short term, but I would not be surprised by a significant dip. If it gets back under 40 cents, I’ll likely add again. Now that I understand the thesis better, my adding zone is higher, and I remain bullish mid- and long-term.

Summary

What makes LibertyStream’s investment thesis appealing is a combination of the following factors: perfect political environment(grants, favorable policies), many near-term catalysts, competitive advantages(first mover, specialised tech, sticky business model), committed CEO aligned with shareholders, and low market valuation compared to future potential.

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This is a very straightforward investment thesis. $WGR.AX Western Gold Resources owns a dime a dozen gold project in Western Australia called the Duke Gold Project. Duke doesn’t have a huge resource, and it doesn’t stand out in terms of costs or grade. However, Duke is perfectly positioned to benefit from the current gold price surge, given its very low capital expenditure and rapid development time. Considering the valuation of Western Gold Resources, this creates an asymmetric situation in my view.

Source: https://wcsecure.weblink.com.au/pdf/WGR/03006654.pdf

Western Gold Resources has a fully diluted market cap of 46.4m AUD. The stock is now at 0.16$. I started the position at 0.105$ and added a bit at 0.155$.

Cash: $6.75 million AUD from a recent raise, which is enough to fund Duke to production.

Debt: $3 million AUD non-converting loan facility secured, but I haven’t found info on how much has been drawn down, if any, as of yet.

After their recent raise, they are now fully funded to start gold production for phase 1 of the Duke Gold project. The first revenues start in early 2026. Phase 1 has a mine life of 14 months. And this is how much pre-tax cash flow it will make in 14 months based on gold prices going from 4200 AUD(2726 USD) to 5800 AUD(3765 USD). Note that the current gold price is 6655 AUD=4321 USD.

Source: Recently updated scoping study https://wcsecure.weblink.com.au/pdf/WGR/02997936.pdf

This is from their scoping study that was updated in September. Tax rate is 30%. Around 5600 AUD(3635 USD) gold price and upwards, they start making +100m pre-tax, which means +70m post-tax. For a company with a market capitalization of 46.4m, fully funded and near production, with net cash.

Here is the estimate using the current gold price of 6655 AUD based on the information from the scoping study.

This is what the company would make if the gold price holds at the current level in the 14-month production period of phase 1 of the Duke Gold project.

This was around 20% of this article. The 80% behind the paywall goes over the path to production, mineral resources, expansion opportunities for phases 2 and 3, main risks, comparisons to my other gold picks, and more on my positioning and closing thoughts

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This is another investment idea that Darp Research shared with me. His links: X, Seeking Alpha, ceo.ca.

$WWI.AX West Wits Mining is currently putting into production the first new underground gold mine in South Africa in 15 years. The mine is in Witwatersrand Basin, and according to various estimates, this area has produced 25-50% of all the gold ever mined, making it the most prolific gold field in history. The South African currency “rand” was named after it.

The mine is fully permitted, and West Wits is fully financed to achieve steady-state production of 70k ounces per year, with a future potential of 200k per year. Mining of the ore has already commenced, and the first gold pour is anticipated in Q1 2026. The first gold pour refers to the moment when the processing plant has produced refined gold from the mined material.

source: https://westwitsmining.com/wp-content/uploads/2025/09/WWI_Corporate_Presentation_September2025-.pdf

West Wits owns 74% of the Witwatersrand Basin Project(WBP) in South Africa. This project has a Mineral Resource Estimate of 5 million ounces (Moz) of gold at a grade of 4.66 g/t, as defined under the 2012 JORC Code, which is currently in use. Under the old JORC code, this area had a historical Mineral resource estimate of 12.8 moz at a grade of 4.6 g/t.

source: https://westwitsmining.com/wp-content/uploads/2025/09/WWI_Corporate_Presentation_September2025-.pdf

The current stock price is 0,047$ AUD, and the current market capitalization is 184m AUD, equivalent to 120m USD. My cost-basis is 0,037$ AUD. They have credit facilities of 62,5m USD available to them with 22.5m USD of potential additional capacity, and they are cashed up from recent raises.

The WBP project comprises 5 stages.

source: https://westwitsmining.com/wp-content/uploads/2025/09/WWI_Corporate_Presentation_September2025-.pdf

Stage 1= Qala Shallows 17-year life of mine, Gold

Stage 1-4=Increases the life of mine to 27 years, Gold

Stage 5=Potential standalone gold and uranium Project.

Qala Shallows

Currently, West Wits is putting Stage 1 of the WBP project into production, known as Qala Shallows, with the first gold pour expected in Q1 2026. Qala Shallows is what is really relevant for us at the moment, as it is a massive project in itself and is worth significantly more than the valuation of West Wits.

source: https://westwitsmining.com/wp-content/uploads/2025/09/WWI_Corporate_Presentation_September2025-.pdf

Long LOM, High IRR, and low cost. And this DFS is relevant, and the cost estimates are not outdated, as the DFS was updated in July 2025. AISC at 1,289$ over the LOM and 1,181$ steady state is materially lower than the AISC of top gold companies.

Source: https://discoveryalert.com.au/news/gold-mining-sector-historic-quarter-2025/

Due to the stock having a low valuation and the mine being low-cost and long LOM, this project is also successful at significantly lower gold prices. West Wits is not hedging at the moment, but being low cost offers some margin of safety if the gold price falls, if the company delivers operationally.

Source: https://wcsecure.weblink.com.au/pdf/WWI/02969995.pdf

A day will come when I look up what NPV means, but it is not this day! At the current gold price of 3847$, the post-tax NPV is around $805 million USD. West Wits owns 74% so it is 0,74*805=595,7m USD for them. This is just for Qala Shallows. The stage 1. This compares to a market cap of $ 120m USD, which is quite remarkable considering that this project is fully permitted, fully financed, and is on track to extract ore next month and to achieve the first gold pour in Q1 2026. You can find many junior mining companies trading at large discounts to their NPVs, but these situations are almost always paired with a lack of permits, a lack of financing, a long time until production, etc. A situation with a discount this large and production about to start, with all the roadblocks cleared, is rare.

Today, West Wits confirmed that it’s fully financed to pour gold in Q1 2026, in a press release announcing that it has executed an agreement for a previously announced loan facility.

Source: https://hotcopper.com.au/threads/ann-wwi-signs-agreements-for-usd-12-5m-loan-facility.8793763/#post-80906113

They said these things before, but the market likes to see it said officially in a press release, so the stock was up 14,63% today.

Comparisons with peers

This is from Canacord’s The Emerging Precious Metals Book, Vol. II (Vol. 1 was published in 2024 and doesn’t include WWI), published on 12.5.2025, where they compare and highlight 26 precious metals companies exploring or planning to move into/increase production in the coming years.

Source: https://bartongold.com.au/wp-content/uploads/CanaccorGenuityReport12May25.pdf

The size of the blue ball represents the EV, and West Wits has the largest JORC resource and the best grade of the group, although it has a lower EV than most. The EV of West Wits has increased since then, but so has the EV of almost every other company here due to rabidly rising gold prices. Therefore, the valuation difference has not changed significantly based on examining the stock prices of these companies. The jurisdictions of these companies were a mix of 1st, 2nd, and 3rd world countries, although weighted towards Western Australia.

Within this group, there is one producer, Kaiser Reef ($KAU.AX), and the rest are not in production. Among those that are not in production, West Wits is the closest.

Source: https://bartongold.com.au/wp-content/uploads/CanaccorGenuityReport12May25.pdf

Not only is West Wits beating its peers in grade and resource size, but also in closeness to production, and it is still valued cheaper than them.

Source: Posted on hotcopper.com

This was posted on the Hotcopper WWI discussion. I am unsure of the source or the date of publication. Seems to be even older than the previous comparison, as West Wits EV is lower than in that one, but I assume WWI would still have the cheapest EV/OZ of this group, due to my assumption that gold price rise has also multibagged the share prices of all the other stocks here(possibly with 1-2 exceptions).

From what I have found, only the jurisdiction risk of SA seems to explain the valuation difference, but looking at all the factors, West Wits is also cheaper and superior to its 2nd and 3rd world peers. SA is like a mix of 1st and 3rd world, but more on that in the jurisdiction section.

This was around 1/4 of the Article. 3/4 are behind the paywall, covering production projections, Project 200, earning projections, more on resources and reserves, financing, jurisdiction risks, and a summary.

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$NURS.V Hydreight Technologies is a health and wellness technology company. VST (Victory Square Technologies, ticker $VST.CN) is a publicly listed venture capital and private equity firm that previously owned Hydreight fully and now holds approximately 57% of Hydreight's shares. Investing in both is essentially investing in Hydreight in 2 ways. Currently, my Hydreight investment is split around 40% Hydreight and 60% VST, and these two stocks combined would be the largest position in The AlmostMongolian Portfolio. In other words, Hydreight is my largest position and the one I’m most excited about.

I started this position in early April. Premski, who was my co-writer on the Beacon Write-up, presented this investment idea to me, and many of the slides in this article are from his presentation. This is my first time writing about Hydreight or VST on Substack, but I have been tweeting about these stocks quite frequently.

Source: https://x.com/AlmostMongolian/status/1911401383317614680

The stock increased tenfold from October 2024 to January 2025. This was because the company unveiled a new product called VSDHone and projected massive growth for this product in 2025 onwards. Then the stock experienced a correction due to the trade war-induced market crash, capital raise, and doubts about Hydreight’s ability to deliver started to mount. Market perception has since shifted:

Source: Google

I sold Africa oil for this. Imagine if I had kept Africa Oil and hadn’t bought Hydreight. Just the thought sends shivers down my spine.

In early July, I switched 50% of my Hydreight position to VST and have recently increased my VST position even after the big run-up. The VST situation will be explained in the 2nd half of this write-up.

Source: Google

Recently, Hydreight reached a new all-time high, with VST following a similar pattern. This was because Hydreight presented data indicating that it can deliver its ambitious growth projections and even exceed them. Before covering that, some basic info.

Capital Structure and Balance Sheet

Source: Seeking Alpha

That 56.91% PE/VC owner is VST.

In addition to the 45.57m shares outstanding(or something around there). There are 3.7m warrants and 2.25m new shares committed for an Acquisition.

Market cap=160m CAD, 116m USD

Balance Sheet CAD:

Source: https://ceo.ca/content/sedar/NURS-2025-08-25-interim-financial-statementsreport-english-6bf8.pdf

A 10m CAD convertible offering was subsequently announced, which will be covered in detail later.

What does Hydreight do?

Hydreight has 3 verticals: Nurses, Stores, and the new vertical VSDHone. First, I will briefly explain the first two older and less important verticals.

Nurses

Hydreight, “Uber for nurses,” is a platform that enables nurses to monetize their skills outside of the traditional setting. They pay Hydreight 3k per year for the platform. They are required to order supplies through Hydreight’s channels, and Hydreight receives a 10% commission from transactions on the platform.

Source: Premski

The only thing outdated about this slide is that Nurses are growing, “Approximately 77% growth in new Nurse signups compared to Q2, 2024” Q2 2025 earnings release.

Video explanation of the Nurse business:

Stores

This business is called “Franchise solution Whitelabel”, I call it stores.

Source: Hydreight, Premski

Stores.

Hydreight has achieved strong growth with just nurses and stores in the past years.

Source: Seeking Alpha Premium

Hydreight has predicted 30% growth for these 2 verticals for 2025. And based on recent results, they are doing around that much. Q2 was 33% YoY growth, 5,38M GAAP revenue, 7.35M Topline revenue, and GAAP net income of 48k. These numbers were achieved without a meaningful contribution from their 3rd vertical, which will start impacting Q3 materially.

“The Company defines Top Line or Adjusted Revenue as gross cash income before adjustment for the deferred portion of business partner contract revenue and gross receipts from Hydreight App service sales.” Basically, topline is all the cash that came in during that quarter.

When I bought my first shares, the market cap was around 55m CAD, and they had already proven they could grow without VSDHone. Therefore, these businesses provided some margin of safety if VSDHone had not panned out. However, the market cap is now 160m CAD, which is based entirely on VSDHone expectations, meaning nurses and Stores do not matter as much anymore. This is why I’m spending more time with VSDHone in this article.

VSHDHone

VSDHone is a Direct-To-Consumer healthcare platform that provides the infrastructure for health and Wellness companies to start offering medical services online nationwide in all 50 states of the USA. Hydreight provides everything other brands need (telemedicine, pharmacy, compliance, payments, logistics) to sell essential, life-saving medicines like TRT and Ozempic alternatives in all 50 states, and Hydreight is the only one offering this type of service at the moment.

Companies like Hims and Hers are not direct competitors to Hydreight. They sell products under their own brand. Hims and Hers is like Amazon, while Hydreight is like Shopify. Hydreight allows other companies to launch their own version of Hims and Hers.

The biggest moat for Hydreight is its ability to navigate the complex regulatory landscape of the US healthcare system on behalf of its clients. For years, they have built their medical infrastructure, and VSDHone is the culmination of that work.

Source: Premski. For all of these slides in this section

How does VSDHone make money?

VSDHone generates revenue through licenses and orders. Selling licenses leads to orders, and most of the revenue will come from orders. Here is what VSDHone makes from licenses:

Source: Premski

This is recurring revenue, as the customer must renew the license annually. They project 1,000 licensees by year-end, and based on the chart, they should have around 700 licensees at the moment.

Revenue from selling these licenses is not significant, at best 2-4 million CAD for 2025, and they likely waived initial fees for some large clients and first adopters.

What is much more important is the number of orders they receive from these licensees.

Source: Hydreight Corporate presentation

Orders are projected to explode by the end of the year. With the assumption of continued strong growth going into next year. The projection for 2025 is 1.3 million total orders, with a December exit rate of 400,000 per month. These projections do not assume new licensees. The management states that the ramp-up expectations are primarily based on current licensees onboarding their businesses to VSDHone.

These were seen as wild projections when they were announced. In the past, Hydreight has hit its projected numbers, but this was such an ambitious projection, unlike anything they projected in the past, that it’s going to take execution for the market to believe it. Now the company is starting to show execution as they released order numbers for the first time on August 12th:

Source: https://ceo.ca/@GlobeNewswire/hydreight-posts-record-vsdhone-growth-ahead-of-2025

“July’s high of 2,000 daily orders are already being surpassed as we enter august,”. Over 2,000 daily orders would mean a run rate of more than 60,000 orders per month, and this run rate was already achieved as they entered August. Based on the growth rates we are seeing, I would expect them to surpass their Internal forecasts of 55k again in August, just as they did in July.

VSDHone future earnings analysis

The first question is “How many orders?” and, naturally, the second question is “How much money does Hydreight make per order?” We don’t have official data for this yet, but we can use a combination of management statements, analyst statements, and online information about the prices of the products they sell to make some speculative projections if Hydreight reaches its order goals for 2025.

AOV(average order value)

We don’t have data for this yet, but we can try to estimate it based on what they sell. CEO answering questions about product split:

“The other third vertical, which is self-administered, has over 45 treatments. TRT is obviously one of the big ones, GLP one, of course, and obviously, the peptides, sexual health, things like that. So the IVs wouldn’t fall into that category whatsoever. But I would say pretty evenly spread between TRT and GLP, one at the moment. TRT is huge.”

TRT and GLP are the big ones, and they are “pretty evenly spread”, and then there are 45 other treatments. So let’s say 1/3 GLP, 1/3 TRT, and 1/3 other. In the future, GLP-1s are expected to capture a larger share, driven by projected massive growth.

Source:https://www.grandviewresearch.com/horizon/outlook/glp-1-receptor-agonist-market/united-states

Pricing for this product split: When I searched the internet, I found a lot of variance in monthly GLP pricing, based on product, etc., with a range of $200-$1,500. I’m using $300 for GLP, as that was the Number the chairman used as an example for the GLP order on Discord.

Self-administered TRT injections in the US are 30-150$. Let’s say 90$ for TRT.

Here is an AI estimate of what some of the other products could cost:

Peptides (e.g., sermorelin, BPC-157): $100–$500/month.

Hair Loss Treatments (e.g., minoxidil, finasteride): $30–$150/month.

Skincare Treatments (e.g., tretinoin, serums): $20–$200/month.

Sexual Health (e.g., sildenafil, PT-141): $20–$200/month.

NAD+ Therapy (injections, sprays, patches): $100–$500/month.

Genetic Testing: $100–$300 per test, $50–$200/month for plans.

Supplements: $10–$100/month.

Other Personalized Treatments: $50–$500/month.

The midpoint for these would be $171, but I’m using $50 because the cheaper ones would most likely receive way more orders.

If orders are split as 1/3 $300 GLP, 1/3 $90 TRT, and 1/3 $50, the average order would be $146.67. Let’s round that up to $150. Based on management statements, the Licensee would take 1/3 of that, meaning Hydreight would make $100 in revenue per order. USD.

↓Why I used 300$ for GLP and took 1/3 of the price to get Hydreigh’s revenue per order↓

Source: VST Discord

This is a message from the Chairman of Hydreight and Chairman and CEO of VST, who communicates with shareholders through a VST Discord channel with the username The Alchemist. Only in Canadian Micro-caps.

other estimates

“Based on Hydreight’s previous disclosure of expecting to generate ~$80–$120 per order, combined with the company’s goal of hitting 1.3M in orders, this would imply ~$100M in revenues to Hydreight from VSDHOne alone in CY25,” Beacon Securities analyst Gabriel Leung.

“Beacon Securities” This is a sign

“Assuming average order price of C$60 represents additional revenue of C$78M.” Maxim Group. That would be 44$ USD.

Both Beacon and Maxim are assuming that those prices are Hydreight’s cut, not the price for the customer, and we know that from their revenue projections.

The chairman gave some comments about this AOV:

On the AOV: while it’s true that individual products like TRT, GLP1s, and genetic testing are priced well above $100 USD, there are also many lower-priced SKUs. With 50+ products in the mix, the blended AOV will likely settle closer to what Maxim used (~C$60). That’s why Vahid noted on the Q2 webinar that mgmt wants to wait until September’s numbers to have three months of data before providing investors with an official figure. So bottom line — mgmt is holding firm on the 400K Dec run-rate, and the AOV figure will be disclosed with more precision after Q3, but the ~$60 baseline is a fair placeholder for now.

You’ve got it exactly right — the ~$60 AOV assumption Maxim used is on Hydreight’s side (what we book as revenue), before any markup by VSDHOne clients.

AOV will move around as new products roll out and the mix evolves, so $60 is really just a conservative modeling assumption. We should have a much better sample size and clearer read by the end of September

He says the AOV will likely settle closer to Maxim’s assumption of $60 CAD ($44 USD) than $100 USD, but also that $60 CAD is a conservative modeling assumption. So the eventual number will likely end up being something in between.

Gross Margin per order

The original expectation was 20-30% margins. Since then, the company has initiated a strategic partnership with a pharmacy, which they expect to push margins above 30% once the integration is complete.

Source: VST Discord

Calculations of future earnings at different monthly order amounts that the company expects to achieve during this year. Calculation at 100$ per order and 44$ per order. USD for both. Using 30% gross margin as they expect to get there and higher OPEX based on ramp-up in marketing, hiring, etc. 100$ USD per order:

Source: Premski. Conveniently, I was able to calculate the AOV in such a way that made this old calculation by Premski work for this article, so I didn’t have to make one myself.

Same calculation but for 44$ USD(Maxim estimate) per order:

Hydreight has a market cap of 116M USD. Assuming the company reaches its goal run-rate of 400k orders per month in December, the P/E at that run-rate just from VSDHone would be 3.7 at 44$ per order and 1.36 at 100$ per order. Assuming continued fast growth going forward, I would expect PE to be at least 20. In the range of 20-100.

These calculations are more illustrative of the potential if they reach their order goals. Exact AOV, operating costs, and the margin are still uncertain going forward.

The larger point is: They had 35,642 orders in June, and they already achieved 2000 orders per day(60,000 monthly run-rate) in early August. They are growing rapidly, and if they reach their goal of 400,000 orders by December, they will generate a significant net income, and the stock will not be valued at its current level. Even if they massively underperform their goal and reach their 400k goal a year later, this investment should still be a multibagger in that scenario.

However, fixating on a certain order goal in a certain time frame, given the future potential, is missing the forest for the trees. The trend is what is most important. Whether they are on track to reach 1, 3, 5, or 10 million monthly orders in the coming years. Here are some Bluesky scenarios, with the only change being that OPEX increased from $14.5m to $50m.

Q3 revenue estimates based on 100$ and 44$ AOV USD

Q3 revenue estimate based on 30% y-o-y growth from the old verticals and for VSDHone using the order numbers and stated goals: orders July=35,642, August=60,000(2k daily reached early August), September=100,000(rough goal)=195,642 orders for Q3.

3.3*1,3=4.29m USD revenue without VSDHone 1.5m Gross profit

195 642*100$=19,56m+4.29m=23,85m

195 642*44$=8.6m+4.29m=12.29m USD = 16.9m CAD. Maxim's estimate was 15.2m CAD using 44$, meaning they must have assumed fewer orders or less growth from the other verticals

Whether we consider the high AOV (456.18% revenue Y-O-Y) or the conservative AOV (186.48% revenue growth Y-O-Y), it’s impressive revenue growth as VSDHone is just ramping up.

Sector tailwinds

Telehealth is one of the fastest-growing industries in the US and in the world. Although in Hydreight’s case, what matters is the US because their MOAT is dealing with the US regulatory environment.

The CAGR (compound annual growth rate) estimates generally fall within the range of 20-30% from today to 2030. According to some estimates, it exceeds the CAGR of the most hyped industry in the world, AI, although AI CAGR estimates are generally higher, with a typical range of 25-40%.

Source: https://www.grandviewresearch.com/industry-analysis/telehealth-market-report

The North American Telehealth market is generally estimated to be in the range of 60-80 billion USD market size now. There is considerable room for growth in telehealth, as the US total healthcare market is valued at around $ 5 trillion, and telehealth is poised to be the future of medicine. Especially self-administered telehealth, which is what VSDHone does.

This was around 45% of this article. The rest covers the recent convertible, Perfect Scripts deal, Capital allocation, licensees, VST investment case, VST’s portfolio, VST advantages and disadvantages over Hydreight, and why I prefer it at the moment to Hydreight.

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Convertible and Capital Allocation

Despite being profitable and having a strong balance sheet, on August 18th, Hydreight announced a convertible offering…

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Beacon Minerals is a gold mining company operating in Western Australia. This is another stock pick that was brought to my attention by @geodan on ceo.ca, who goes by @DarpResearch on X and Seeking Alpha. He was the one who told me about Valeura at 3$, and he was pounding the table on Beacon, so I had to take notice. Then I introduced Beacon to @Premski_SGP on X, who did his own DD on it, and collaborated with me on this write-up, so you may notice the writing style is constantly shifting within this article as there are 2 writers.

TL;DR: The Company is going through improvements in all aspects, but the stock price has not caught up yet:

4.9$ is a price target from Argonaut.

Source: It was posted on this thread on HotCopper discussion board.

This part was just to get your attention. The following deep dive will answer questions such as: How does Beacon achieve these numbers? Why is the market undervaluing Beacon?

Introduction

At first glance, Beacon Minerals is showing negative gross margins and high costs (AISC); it scans as a terrible company. We want that. We need an undiscovered gem, covered by the dust of previous mediocre quarters. But there are quite a few hidden gems under all that dust, which we are going to uncover today. We believe that the stock has a very good upside and much lower risk than other junior mining producers.

Short info about the company, they are located in the Tier 1 Mining jurisdiction of Western Australia state - Kalgoorlie area, which is famous for Gold:

Tier 1 Jurisdiction

Western Australia has ranked in the top 3 mining jurisdictions in most of the previous years. My Canadian friends can complain all they want about Australia, but I invest in South America, Africa, and Central Asia, and Australia still stands out:

• With world-class infrastructure and a skilled workforce (protocols are set, and facilities to assess drilling or do the metallurgy testing are a drive away, you don't have to wait months for continental shipments of samples or lab testing to happen)

• Rich mineral and exploration support, especially in Western Australia State, where Beacon is located

• Political and Legal Stability (no coup risk, no helicopters venturing to take your produced gold like in Mali)

• You know how much you need to pay in taxes and royalties to the state, the changes are not announced from one day to another, nobody stops your mine because of ‘supposedly’ not paying taxes

• As per Fraser Institute in 2021,2022, it is a top place for mining, in 2023 they ranked top 3, and in 2024 they are still in the top 20:

Source: Fraser Institute

Note which country is number 1

Balance sheet and Enterprise value

Beacon has a market cap of $168m. All the numbers are in Australian dollars.

Debt=$7.8m

“The Company has a $13.27 million finance facility. As at 30 June 2025 the Company had drawn down $7.8m of the finance facility.”

Cash of $14.38m at the end of Q2

“2,744 ounces held at Perth Mint as at 30 June 2025. Gold in transit of 1,778 ounces at 30 June 2025”

At the current gold price of 5150$ AUD, this gold is worth $23.3m.

“Beacon’s holds 40,972,640 ordinary shares in Astral Resources (AAR).”

At yesterday's closing price, these shares are worth $7m. And because the market cap of Astral is 242m, this is a liquid asset.

Liquid assets=14.38+23.3+7=44,68m

Beacon has an enterprise value of = 168+7.8-44,68=$131,12m

Gold Production

Beacon owns one processing plant called Jaurdi

and they have been mining low-grade open pits in the surroundings, 20- 60 km away from the plant to the south on the map:

Source: Beacon corporate presentation (annual one)

That low-grade problem is important to keep in mind, as we will get to that soon.

Their production in recent years was not impressive, the output was in decline, and so were the reserves.

The company was processing more ore, but because of having lower gold grades, they could not produce more gold despite the incrementally increased capacity of the plant.

Plant capacity expanding

The Company has been steadily expanding throughput by adding parts to the plant in an incremental manner without extensive capex.

They are now at 1 million tonnes per year throughput, which is last quarter (Q2’25). Beacon will be expanding into 1.2mln soon, this is from their operational update:

That expansion will cost a bit (11.5m AUD$), but assuming the higher grade that is coming, it will be worth it.

Further plant capacity expansion beyond 1.2mln may happen, but the management stated that this is solely based on their ability to mine enough ore for the plant and what the future gold price will look like, and how confident they will feel about it. Remember the Tier 1 jurisdiction argument? The good thing is that the experts who designed the plant and are expanding the plant are available a drive away, which means timelines get much shorter if you need to increase capacity in Western Australia.

The currently mined ore from pits is not enough to cover the whole capacity of the mill (250k quarterly today), Beacon is able to get 80-120k tons per quarter by mining (with still subpar 1.2-1.4 g/t grade), the rest needs to be taken from lower grade stockpiles of (0.6-0.8g).

Production Forecast

Here is the prediction of upcoming production for the next 4 quarters:

The forecast is downplayed on purpose. I am still assuming Q3 and Q4 to continue gold grades at 1.15 - 1.2 despite management being optimistic about the upcoming improvement in gold concentration in their last operational update:

https://app.sharelinktechnologies.com/announcement/asx/2271964c1d99328850395ecb2a88e3d8

Q1 and Q2 next year are assuming the same grade but with laterite oxide resources mixed in, which usually gets recovered at a rate of 95% so the average recovery rate is increased for these two quarters and should continue throughout the year.

The amount of processed ore will also be increased as plant expansion will take place, which alone will make the production go to 44k ounces; any improvement in very conservative grade is an extra upside. Here is the yearly forecast with assumed grades:

Breakdown of potential revenue with a gold price staying at 5100 AUD$

The slight improvement in grade is assuming resources from Lady Ida and Mount Dimer that are of a higher grade. It is a very conservative scenario.

Assets:

Newly acquired asset - Lady Ida (the game changer)

This is Beacon’s pre-feasibility study. This does not account for the laterite resource, and new data is constantly coming out, but it will give you a basic idea of the project. Look at the average grade of proved reserves, 1.60, which is huge for a company of Beacon's size that is mining now at 1.1 - 1.2 g/t.

What you need to know is that the data will only get better, both resources and reserves. Their recent drilling had them put a halt on trading because these were that good (see here: Stage 2 Grade Control Program Completed at Lady Ida)

Source:https://app.sharelinktechnologies.com/announcement/asx/a28208e58ee4017cb4d5a438db59b020

This mine is planned to start production in Q1 2026. Very low Capex of 8.8m. And based on assuming only the 132.2k ounces and processing life of 53 months and AU$5,000 gold(Current gold price AU$5,200), Lady Ida would produce 29,910 ounces annually and have $76.2 million per year of cash flow. Because of a J/V that we will cover later, Beacon earns 50% from this project before producing 73,500 ounces, so based on the PFS and AU$5000 gold, Lady Ida would add $33.1 million of cash flow for Beacon in 2026.

Showing what the company is projecting is important, but note that these are not assumptions we are making for the rest of this article in regards to production and cash flow. The charts and calculations are based on analysis from Premski, taking into account the newest data.

Source: Google

This is the newest data. The stock is going up. That’s all the data you need, but seriously. Let’s be serious now. The stock was halted before the big move on Monday because of pending drilling results, and we waited for these results to come out before releasing the article to avoid releasing an article that’s immediately outdated.

Why did these drilling results cause a +23,55% move on Monday?

Source: https://app.sharelinktechnologies.com/announcement/asx/3070d43cbd0e1393bb16b51bfd7797bb

These grades are unseen for a miner of that caliber; they immediately put Beacon on the trajectory where they can double their production.

Source: https://app.sharelinktechnologies.com/announcement/asx/3070d43cbd0e1393bb16b51bfd7797bb

This is how much their increased plant can produce with higher grades :

Remember, the costs are pretty much fixed. Beacon has a really good chance to become a cash machine.

(We are assuming 86% recovery and 1.2mln TPA plant output).

Here is the statement just sent today by the CEO to shareholders:

Ok.. from bonanza grades making stock price go up, let's get back to reality now, with what else do we have available:

Lady Ida itself is not that far away from the plant (43 kms via a haul road), and it has two types of gold mineralisation: Super easy to mine laterite mineralisation:

Source:https://app.sharelinktechnologies.com/announcement/asx/8855921d8563cccdeafa8e303311a54b

The company drilled 232 and 215 air core drill holes (~5km total) to check how much gold is there.

Historically, the grade was very high, at about 3g/t, which their current results suggest much lower than that:

but still very economical to mine because you do not need any explosives, you just go with an excavator and mine from the surface. Reading the announcement on how the estimate was created and what sort of drilling was done, I am assuming the estimate is the lowest possible, and we may be pleasantly surprised while mining the laterite resource.

Take a look at the picture - You can go with a shovel there tomorrow and start digging, and after two meters of digging through the cover, you are going to start finding particles of gold.

What is worth mentioning is that recoveries of gold in such ore are at 94-96% versus 86% of what the company achieves now. Also, the laterite mineralisation of gold was not defined in the original resource reserve provided with the acquisition of Lady Ida, which you see in the table below:

Grades like 1.49 or 1.18 are much better than their stockpiles at 0.6g/t.

On top of that, the asset has more gold that is not yet included in the above table. You can see the first diamond drilling here, indicating more gold:

Results of the Iguana Diamond Drill Program

As mentioned before, Lady Ida has two types of gold mineralization; the second one, which is a bit more difficult to get to, is “in situ,” that is, deeper in the ground in a type of rock, and that will be feeding the expanded plant for years to come.

Around 60-70% of these resources should be converted into reserves, which will be a big boost to how the company is perceived by the market.d

The asset was acquired through a JV agreement instead of a cash transaction. So instead of paying upfront for it, there will be a 50-50 split of net profit from ounces sold until 72k ounces is reached

Lady Ida J/V details:

Beacon has a farm-in agreement for its Lady Ida Project. Beacon gains more interest in the project as they reach milestones. Here are the details:

source: https://app.sharelinktechnologies.com/announcement/asx/ca324e64bd54cb5634b2275544747edc (page 7)

First Milestone: The First Milestone is achieved when Beacon sole funds the project until the first gold is recovered from M16/262 and processed through the Jaurdi Mill.

Reaching this milestone, Beacon earns a 25% beneficial interest in the Lady Ida Project. It’s important to note that the revenue and costs are 50/50 upon reaching the first milestone, even if their beneficial interest is 25% at this point.

Second Milestone: Once 36,250 ounces of gold have been produced from the Lady Ida Project through the Jaurdi Mill, Beacon earns an additional 25% beneficial interest.

This brings Beacon’s total beneficial interest to 50%.

Final Milestone (100% Ownership): Once 72,500 ounces of gold are recovered from the project, GL transfers 100% legal and beneficial ownership of the Lady Ida Project to Beacon. In return, Beacon grants GL a 4.00% net smelter royalty on all gold and silver produced. Now Beacon gets all the revenue minus the royalty and is responsible for all the costs.

It is worth checking out the history of the asset. It is nicely described here: Link (page 11).

Note: The Initial deal was blocked by ASX as one that is not favourable to BCN and its shareholders. In reality, the initial deal would be much better than the one we got with the second attempt. First deal was just a pure cash transaction of 10mln AUD$, the 50-50 JV agreement will be worth way more than 10mln AUD$

Other Assets

Wealth of Nations

It is located a short 11 km haul from Beacon’s Jaurdi processing plant, making it an obvious satellite feed candidate. Historic underground crews extracted about 28 koz at spectacular 19 g/t between 1894 and the 1960s, but that's long gone… recently, a 2022 test pit by Corinthian Mining produced 1.7 koz from near-surface oxide ore grading ~2.3 g/t. Corinthian deemed the asset as non-core and had to haul/track the ore 60 km away, so they dropped the mining there. In November 2024, Corinthian was close to restarting operations in a JV agreement, and they were supposed to process a 40 kt parcel of ore. It is unknown why it didn’t happen, and soon thereafter, Beacon acquired the asset. Beacon will explore the asset, and if they decide to proceed, they will pay 1.4mln in settlement and standard royalties (4%). 1.4mln AUD is about 280 ounces of gold at current prices. Not bad ;).

Beacon has begun a seven-hole RC drilling program to convert the legacy data into a JORC resource and probe the deeper high-grade shoots hinted at by the old workings. If results confirm even moderate grades, the deposit can slip seamlessly into the existing mill schedule, bolstering Jaurdi’s throughput with minimal incremental capital.

Source: Beacon corporate presentation with edits

Mount Dimer sits ~113 km NW of the Jaurdi mill on already-granted haul-road licences, making it another satellite feed for Beacon. Historic mining in 1994-97 yielded more than 125 koz from about 600 kt at an impressive 6.4 g/t Au. Beacon’s 2024 work delivered a maiden resource and reserve:

• Lightning Mineral Resource estimate - 128,000 tonnes at 4.8 g/t Au for 20,000 ounces at 0.5 g/t lower cut-off

• Golden Slipper Resource estimate - 312,000 tonnes at 3.20 g/t Au for 32,000 ounces at 0.5 g/t lower cut-off

What you can see is a very high grade that helps to offset tracking costs. Below location of Mt Dimer and the proposed route suitable for off-highway trailers (distance of 135kms).

Source: Beacon corporate presentation

The next exploration phase is temporarily paused: the air-core program was deferred for environmental reasons, and management has flagged that a focused RC-resource-definition drill campaign is now “proposed and under review,” scheduled to kick off in the second half of 2025 (targeting Q4). Given the distance and the fact that Lady Iga is closer and shaping out as an asset to mine for years to come, I would expect Mt Dimer to not be on the top of the list despite the potential for higher grades there. The current definition of the reserves stands at 21,000 ounces with a grade of 4.5g/t. Resources at the current stage point to 52k ounces at 3.65 grade.

Timor Leste

Beacon is also involved in Timor Leste(also known as “Timo”), which, as you all know, is an island north of Australia known for its organic coffee production, unique cultural heritage, and stunning natural landscapes.

Source: https://www.britannica.com/place/East-Timor

What’s interesting about Timor-Leste is that the country has massive mineral potential, but it is completely underexplored. They gained independence in 2002 after a history of conflicts and are still an impoverished and underdeveloped country. There are no producing mines in the country. Their mining code was established in 2021, and their state-owned mining company was established in 2023.

In March 2023, they launched their first licensing round for mineral exploration, 49 concessions comprising an area of more than 2,000 square kilometers.

Nine companies passed the screening, and four companies were awarded 13 concessions: 3 for Estrella Resources, 1 for Peak Everest Mining, 3 for Iron Fortune, and 6 for Beacon Minerals. Later in March 2025, Tivan Limited got 7 concessions.

Iron Fortune is Australian Private, and Peak Everest is Timorese. Tivan and Estrella are the only public companies with Beacon involved in this country. This adds to the optionality of Beacon, as if there is a gold rush in the country, there aren’t many options available for investors.

Estrella Resources has an AU$80 million market cap. They are a pure exploration company, and their Timor Leste assets are their flagship properties, comprising most of their valuation. The stock has also 4x since they got the concessions.

Estrella is already drilling and promoting. In contrast, Beacon is barely talking about these properties. Their current corporate presentation doesn’t even mention Timor. I found this slide from an earlier presentation.

Source: Beacon Minerals Ltd - RIU Explorers Conference 2025

Gossanous Fe-Au-Cu mineralisation observed. I always say if it's “gossanous,” it's a good sign. I always say this.

This presentation was posted on 21.2.2025, and this is all the CEO said while the above slide was up:

“Timor Leste is an early stage grassroot Prospect we've done quite a bit of work up there we have a team of four there at the moment lot of rain which is impeding progress but they are doing stream sediment sample little samples in the northern blocks and we'll see how the results go some have already been done and submitted we got another 50 to go”

They are collecting sediment samples, such as sand or gravel, from rivers and streams. These samples are analyzed, and based on the results, they can somehow locate potential areas of mineralisation, which they can further investigate to locate good spots to drill.

Source: Beacon Minerals Website

These are Beacon’s concessions, which combined are approximately 300 square kilometers. Top right, you can see that this is a decent chunk of the country. These are the details they give on the website about the two groups of concessions, Ossu and Baucau.

“At Ossu, a historical occurrence of chalcopyrite‐rich boulders associated with serpentinites has returned rock chip sample grades averaging 4.87% Cu, 0.28% Co and 1.48 g/t Au with peak values of up to 12% Cu, 0.88% Co and 2.08 g/t Au”

“At Baucau, a recent reconnaissance program has discovered multiple occurrences of polymetallic copper mineralisation at surface at the ‘Quarry’ and ‘Vermasse’ prospects with assay results pending”

At Ossu, those rock chip samples with 4.87-12% copper grades, in addition to 1.48-2 g/t gold, are very promising for surface early-stage results. Typical open pit copper grades are 0,4-1% and gold grades 1-4 g/t.

At Baucau, polymetallic copper mineralisation at the surface points to a similar copper/gold deposit.

I found a massive report on the resource potential of Timor, and here is an interesting part from that report relating to the Ossu and Baucau areas.

Source: https://www.laohamutuk.org/OilWeb/RDTLdocs/ESCAP/Bakker.pdf

Source: https://app.sharelinktechnologies.com/announcement/asx/2271964c1d99328850395ecb2a88e3d8

After I wrote all that, they released their quarterly update, where they basically said they are pausing on Timor Leste. Maybe this means they want to put all the focus on Australia, where they have huge near-term opportunities, or maybe the results of the exploration work on Timor weren’t that promising.

Management and Capital Allocation:

Insider ownership is at 32% which is quite high for mining companies of their size.

There has also been insider buying during 2025; the managing director(Beacon’s CEO equivalent) bought AUD $439,552.81 worth of shares during March and May.

I recommend that you watch two presentations of the company after finishing this article to get a vibe around the managing director:

Most recent from 2025

One from 2023

My impression is that this is a straight shooter, keen to do what is right and wants to return value to shareholders. Returning value to shareholders is important, and it is a problem with junior gold miners that I face constantly.

Recently, Beacon initiated a share buyback, although the company is allowed to buy back shares, we do not see any filing about that happening (in Australia, the company needs to report in 2-3 days about buyback activity). We are assuming now that the capital may be allocated to extra exploration rather than buybacks, it is the best way of allocating the capital in our opinion, nevertheless company is still allowed to buy shares for the next fiscal year (these in Australia start in July):

Source:https://app.sharelinktechnologies.com/announcement/asx/a16f73a291cf98b65a3dd3218286493f

While currently not paying a dividend. They are capable of paying out a regular and special dividend (once in the past). Dividends are fully franked, and for most countries, there is no withholding tax.

Source:https://app.sharelinktechnologies.com/announcement/asx/a28208e58ee4017cb4d5a438db59b020

In here, the CEO explains his approach to dividends:

“I'm a bit of a believer in the old school the business a has to be profitable then B should pay some dividends to shareholders now whether that's the right approach or not I'm not sure I do have some doubts at times but fully Franked dividends appeal to me and I try to put myself in the shoes of my other shareholders and say well if we can pay even a modest fully Franked dividend and return a fair bit of money for growth that's a fair result”

Trust me, I have a lot of junior miners(Premski), and some of them have much more cash in the bank but are not willing to pay out anything to their shareholders.

Beacon seems fairly aggressive when it comes to working capital and spending on Capex and exploration. Which is likely why the dividend is not being paid at the moment.

Source: https://app.sharelinktechnologies.com/announcement/asx/a28208e58ee4017cb4d5a438db59b020

Q3 FY2026=Q1 calendar year 2026.

The last capital allocation point is Beacon’s strategy to hold some of its gold at Perth Mint as an alternative to cash. Which seems to be a new strategy starting last quarter, with 7365 ounces produced and 3900 ounces sold.

“The Board has reviewed its strategy of spot gold sales. Gold is a high-quality liquid asset that retains its purchasing power, in contrast to cash that is losing its purchasing power. The gold price could go down, however Beacon continues to hold sufficient cash to cover such a contingency.”

This strategy has tax advantages. They don’t have to pay tax on the gold before selling it. As it is not recognized as revenue before it’s sold. Although this causes Beacon to screen poorly, because the topline revenue seems much lower due to Beacon’s gold storing. I think this is one of the reasons for their lower valuation.

This strategy also makes Beacon much more leveraged to the gold price in comparison to peers who hold mostly cash, and adding to their leverage to the gold price, Beacon is not hedging its production.

Does the management deliver on what they say?

“There is a way for us next year to look at growth in the share price is to do a consolidation of the shares and do a buyback, and we have mentioned that, and that will be looked at at the appropriate time.” CEO quote from the presentation in November 2023

In November 2023, the managing director mentioned the issue with the low stock price and said that they will address this issue in 2024 with a buyback and share consolidation. Mid-2025, the buybacks are starting, and share consolidation has been completed.

They had instances of lower production in 2024 due to clay ore issues and rainfalls, so their forecasted production does not always check out, but most of the time it does, and many times it exceeds the forecast.

Source:https://app.sharelinktechnologies.com/announcement/asx/a28208e58ee4017cb4d5a438db59b020

Other notable achievements:

Built the processing plant in-house and on budget, took their deposit called Lost Dog from discovery to production in just 2.9 years, and production was in line with the PFS.

Lady Ida's acquisition took two attempts to make it happen, which proves a go-getter type of attitude when there is a good asset in play. More on that acquisition in the due diligence section below.

Charts and Projections

You can talk all you want, but does the data justify improving the situation of the company?

It does already, and we are thinking that 2026 will be much better.

You will not see this stuff on the scanner when looking at the company at first glance.

Here is the cash position trend (up is good)

Here are their yearly estimates for closure of 2025 and 2026:

NPV with a 10% discount rate is 347mln AUD at a 10-year mine life.

Discounted cash flow (10%):

Their leverage to gold is at a whopping 6.66X, one of the highest in the industry. The higher the gold price - this miner makes more and more profit.

Important to note about these calculations is that they are speculative in nature. Lady Ida starts Q1 2026. They are still drilling. They just released amazing results as we covered earlier. We don’t really know how it will perform, the grade it will achieve when in production, but even with what we think are conservative estimates the stock is very cheap.

Due Diligence, Miscellaneous items

This section goes through various items that have not been covered yet, but are of some importance.

Source:https://app.sharelinktechnologies.com/announcement/asx/2271964c1d99328850395ecb2a88e3d8

Overall, the capital structure is quite clean. There is some dilution above $1.2 from options; we are above that right now, but the buyback will somewhat counteract this effect.

“We have 3,000 shareholders, but I would say 2,600 of them are West Australian shareholders.” CEO quote from 2023 presentation

This is an interesting “factoid” if you will. Most of their shareholders are from one area of Australia. And I think Beacon’s story would be very attractive to the gold bull crowd because of their bullion holding strategy and unhedged production. If the story gets exposed more to that crowd, I see some re-rating potential just from that.

Beacon’s largest shareholder has been loading up

Source:https://app.sharelinktechnologies.com/announcement/asx/e20b9a1a275c0d9cfc71b9b3a65b3b04

Source:https://www.listcorp.com/asx/bcn/beacon-minerals-limited/news/change-in-substantial-holding-3113753.html

Based on the most recent data, Colin Petroulas owns 20% of Beacon based on data from 30 May 2025. He started buying in 202,3 and we see him with 5% at the time. Next year in June, we see his stake at 7.67% and over the duration when the Lady Ida deal was in the works, he increased his stake to 16% Sep-Dec of 2024.

From what we know, Colin Petroulas is just a high-net-worth investor. Lives in Western Australia, but the registered address is in Sydney.

He owns other gold miners (Westgold Resources 2% and Regis Resources 1.24%).

He is often seen to be trading alongside Graham’s moves, too. Although owning 20% I would assume he knows more than most shareholders.

Reach out Colin, if you are reading this! Keen to talk about BCN for sure!

There is only one public connection, which is that Beacon and Colin Both owned Maximus Resources shares. And Astral Resources acquired Maximus shares through a share swap. This is how Beacon ended up owning Astral shares worth AU$7m.

Astral is developing a large gold project. They have no production. +200m AUD market cap.

Source: https://investorhub.astralresources.com.au/announcements/7090683

Astral stock has roughly doubled from last year. The position is still pretty immaterial for Beacon unless it multibags from here, so this is enough of Astral coverage for this article.

Confidence in resources and pit design - Snowden and MineCor.

Snowden was the company doing the PFS on Lady Ida resources. They have done a few full studies before and quite a few resource updates to existing resources for various companies around the world. There isn’t anything fishy about the company. You always want to check who did the reserves estimate and if they know what they are doing.

Minecomp did a lot of work around pit design and optimisation for Lady Ida and Iguana deposit, and other Beacon’s assets as well. It is a local company located in Kalgoorlie (not far from Beacon’s office). Do not see a high risk here, but if there are issues around surprising cut-backs to the pit design that were not planned before, we would know the reason.

Some concerns were raised to us over the pit design for the Iguana pit and currently mined Macpherson, but nothing to classify as a red flag.

Gold price risk/opportunity(AlmostMongolian perspective)

Beacon doesn’t have a lot of operational, jurisdictional, or management risk. The most significant risk to the investment thesis is a decline in the gold price as Beacon mines low-grade pits, and their fixed costs are on the higher side.

Source: https://goldprice.org/gold-price-australia.html

If gold holds above $3,300, this stock will be a multibagger given its 6.6x leverage to the gold price (among the highest among peers). It’s just a fact of life given their earnings at that gold price. But this gold price is a new phenomenon. If it falls back to last year’s gold prices, the stock will go down.

I don’t generally like the idea of buying a commodity producer after the commodity the company produces has surged in price. Because with most commodities, higher prices lead to demand destruction, substitution with other commodities, and incentivize new supply. This means the commodity prices are naturally mean-reverting and range-bound over time. Unlikely to stay at the very high price due to demand destruction and supply incentivization, and unlikely to stay at the very low price due to demand incentivization and supply destruction.

But gold is an exception. And I don’t say that because I’m bullish on gold, I’m not, I’m indifferent. Gold is an exception because it does not have the same supply and demand dynamics as other commodities.

Source: https://howmuch.net/articles/global-gold-demand-2019

Source: https://auronum.co.uk/where-the-worlds-gold-lives-a-breakdown-of-above-ground-reserves/

Source: https://www.gold.org/goldhub/research/gold-demand-trends/gold-demand-trends-full-year-2024

We can draw several conclusions from the four images above.

There are 212,582 tonnes of above-ground stocks. This means that investors are mostly trading these above-ground stocks, rather than new supply from mines. Mining adds about 3,600 tonnes per year, and recycling adds about 1,300 tonnes. Demand was approximately 5,000 tonnes. Around half of the demand is comprised of jewelry and technology, which are stable demand sources. The other half of this demand is driven by investment demand, including purchases of bars, gold ETFs, and central bank purchases, but this demand will fluctuate heavily based on market sentiment, which makes it the deciding factor of the gold price.

Because investor demand is the deciding factor in the gold price, and the above-ground stocks are so high, mining and recycling rates are almost irrelevant due to their low amounts in comparison.

If mining were to increase by 50% next year due to high gold prices, which would be basically impossible, it would barely make a dent in the above-ground stocks. Instead of the normal 1,7% increase in global gold stocks, it would be 2,5% increase.

Compared to a normal commodity like oil. We see the stark difference. Oil production per year is around 35 billion barrels, and global oil stocks are about 4,5 billion barrels. The yearly oil production is more than 7x the global oil stocks. In comparison, the global gold stocks are more than 60x the yearly gold mine production. This means that for oil, small changes in demand and supply make a significant difference in inventories and oil price, while with gold, they don’t impact inventories, and the gold price is determined by investors trading gold, of which only a small part is new supply from gold mines, most it having being mined a long time ago and derivatives backed by that gold.

In summary:

-The changes in mine production don’t matter for price, due to the large above-ground stocks. The mining creates an annual inflation rate for gold of around 1.5%.

-Recycling doesn’t matter, less than mining, and it’s mostly just gold changing form from jewelry to bars, not even affecting the global stocks

-Jewelry demand is relatively stable and small compared to global above-ground gold stocks, hence it doesn’t matter

-Technology demand is relatively stable and much less than jewelry demand, so it doesn’t matter

-Institutional and retail investors trading the existing gold stocks and gold derivatives determine the gold price. This factor will always outweigh the factors above, which only matter if investment demand remains unchanged, which it never does, as market sentiment for gold is constantly changing.

Due to these factors, the price of gold is more comparable to the price of Bitcoin (an investor-driven price and an annual inflation rate of approximately 1.5%) than to the prices of other commodities.

It’s not self-correcting in the same way as other commodities. The high prices do not have to lead to low prices or vice versa, in the long run. If investors really want gold, it can reach $10,000 and stay there. If they don’t want it, it can stay at 500$.

And this is why I’m comfortable chasing gold stocks like Cerrado and Beacon at $3,400 gold more than I would be chasing oil stocks above $100 oil. At $100 oil, supply is ramping up(OPEC+ space capacity, Shale, Oil sands), and gasoline demand is falling. These are huge factors and predictable, while I don’t believe you can accurately time exactly when the oil self-corrects after all oil producers become highly profitable, it will eventually self-correct due to supply/demand. Gold went to 3400$ because of investor demand. There is no self-correcting mechanism to take it down. The gold price itself is not indicative of future prices. If investors start selling, it will fall; if they continue to buy more, it will rise.

Predicting whether investors will buy or sell gold and gold derivatives in the future is a futile endeavor. Analysts dedicate their lives to it, yet still can’t get it consistently right. They talk about positive and negative correlations with gold price and real rates, dollar index, fed policy, inflation, etc, which are strong to moderate correlations at best, with real rates being the highest correlation. However, one would have to predict real rates or the US dollar index, which is another impossible task to accomplish consistently, only to achieve a non-perfect correlation with gold.

I take an approach to gold stocks that I simply assume roughly the current gold price and require an insanely good risk/reward at that price. The gold price becomes a random factor that will either benefit or harm the investment. I’m choosing to deal with this random factor due to the risk/reward of the stocks.

This is how I approach my gold investments in Beacon Minerals and Cerrado Gold.

That being said, here is a collection of gold price predictions from various large financial institutions and famous analysts. Compiled by @GoldForecast on X.

Source: https://x.com/GoldForecast

Grey lines are 2026 predictions, and only 2 grey lines are under 3000$. Most of it is in the range 3000-3500$ and more for the years to come. By and large, the analysts of prestigious banks think that the gold is going to continue going up or hold above 3000$.

Short comparison between Cerrado and Beacon:

I recently wrote about another gold miner that I think also has a great risk/reward: Cerrado gold write-up. How does Beacon compare to Cerrado?

Beacon’s upside and downside are more reliant on the gold price because it has modest operational risk, low jurisdictional risk, and low management risk. Best jurisdiction, good management, who doesn’t make reckless self-serving moves, returns capital to shareholders. Operational risk is not anything different from the norm; the problems they sometimes have, such as those caused by rain, are not out of the ordinary for mining companies. Beacon also holds a significant amount of bullion and employs a bullion holding strategy. Beacon is also not hedging. When the gold price rises or falls, they feel it fully in their earnings and the value of their bullion. Making this is the dream stock for the gold bulls.

Cerrado is hedging a decent amount of its gold production, and I obviously like that, even though its old hedges ended up hurting its earnings. I wish they had hedged even more at the current prices, considering their need to secure cash flows for different projects. Cerrado is a polymetallic company, while their current production is mainly gold(some silver). Cerrado upside case is more about production ramp-up, which is not priced in, Mine Life increase, which is not priced in, Portugal permitting, Mont Sorcier, etc. They also have more management risk(Questionable Portugal acquisition, some old blunders) and jurisdictional risk with Argentina, which is also a jurisdictional catalyst, as the horrible jurisdiction is becoming a decent one. In contrast, Beacon’s great jurisdiction remains roughly the same, which provides no further upside itself, but does underpin re-rating potential as their jurisdictional peers are trading at a higher valuation. Cerrado has more upside and also more risks, but the risks are less about the gold price and more about other factors, while the gold price still remains important.

There are also commonalities between these stocks: laggers, cheap, screen badly at the moment, increasing production with low capex, and doing high-impact exploration, which is increasing mine life.

A few words on my Beacon positioning(AlmostMongolian)

This is a mid-sized position. My cost basis is AU$1.28. I’m in holding mode. The biggest reason why I’m not making this a large position is that I don’t want too much gold price risk in the portfolio, considering I already have Cerrado Gold in there.

Summary

Beacon represents an attractive risk/reward due to the high probability of a rerating if the gold price holds around the current prices. It’s trading at a discount to peers. The largest shareholder and the managing director have been buying.

For Beacon to re-rate the catalysts would be: Gold price holding, Buyback starting, Production increasing due to Lady Ida and plant capacity expansion, Mine Life increasing, more amazing drilling results, and the stock getting more exposure.

The production growth is achieved with relatively low capex. The financial situation is solid, and so is the management and the jurisdiction.

Let’s finish with words of the CEO’s last email: “Enjoy the ride.”

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Zoomd is a Canadian-listed international adtech business that operates a user acquisition platform. They are also a performance-based marketing company. Simply put, Zoomd delivers paying customers to its clients through whatever means necessary within the bounds of legality and the digital world that confines them. Most adtech businesses are compensated based on clicks or impressions; Zoomd is compensated based on delivering paying customers. Multibillion-dollar brands, such as Kentucky Fried Chicken, are using Zoomd for this purpose.

Source: Zoomd Q1 investor deck

“I say once more our only duty is to get paying clients for those logos that you see here. We don't do for them branding, we don't do for them awareness. Some of those brands are just huge, but in the end of the day each one of the names here needs for their earnings, quarterly earnings to say how many new clients they got in how many new clients left.” ‘

Quote by Chairman and Founder of Zoomd, Amit Bohensky.

Source: Zoomd Technologies Company Webcast Lytham Partners Spring 2025 Investor Conference

From their growth, we can deduce that they excel at their only duty. High insider ownership of 35%. Their revenue growth translates to higher and higher net income due to their high operating leverage. Operating costs do not increase in proportion to increased revenue.

This is when I got involved with Zoomd.

Source: AlmostMongolian

This was on May 9th. It did put Illumin to shame at the time. The stock I was just pounding the table on. 55m USD market cap 44.5m EV Q1 revenue up 100% y-o-y, net income 4,5m annualized 18m, record revenue during the weakest seasonal quarter in Adtech. These preliminary results got me to take a position.

I didn’t expect it to move so fast for almost no reason. Meaning no additional good news. Of course the stock was cheap which can be a reason in itself.

Source: Google

Now the situation is basically the same, but the market cap is 105m USD and the EV is 94.5m USD.

The only catalyst for the 84,62% move that I can see is that the Q1 official results were slightly better than the Q1 preliminary results. In the official results, net income was 300k higher, Revenue was 200k higher, adjusted EBITDA was 200k higher, and cash from operations was 300k lower. Not a huge difference. It showed that the preliminary results were never fully priced in, despite causing a 53% move before the official results were released, which highlights the difficulty of determining what is priced in and what is not.

The earnings call also didn’t have anything substantial that they hadn’t said in earlier interviews.

Now that the stock has gone up. I’m hearing people saying they missed it. And I get worried because if they missed it and they are right, it means I should sell. But if they are wrong and haven’t missed it, but are actively missing it, I should either hold or buy more. I need to figure out what all of this means. I have to put the pieces together.

Now we looked at the data. We looked at the data, and what we found surprised us.

If this company continues to grow at its current rate, the stock price is unlikely to remain at this level. Even after rising significantly, it still has a low valuation based on recent financials. So, the market clearly has doubts about the sustainability of their growth rate or even their ability to remain at Q1 level of earnings. This is because it’s still a turnaround story. Starting its turnaround in 2024.

Source: Seeking Alpha Premium

This company has high operating leverage. Q3 2023 was the low point of revenue of 7.1m. And the Operating costs were 2.9m. Q1 2025 had 18.2m of revenue and operating costs of 3.1m. 13,8% increase in operating costs while revenue went up 155% and gross profit went up 186%. Due to this operating leverage, nearly all revenue growth goes straight to the bottom line.

From Q3 2023 to Q1 2024, the gross margin improved from 39,4% to 43.9%. GM is not expected to change much from now on.

Source: Seeking Alpha Premium

Now the cash is piling up q-o-q. They went from unprofitable, declining revenue, and low on cash business to highly profitable, growing revenue, and high on cash business. When they had their weak period in 2023, the stock fell to a very low level, and after they turned the business around, the stock has gone up by 23x from the lows.

Source: Google

With stocks that have moved up a lot recently, investors may think they have missed the boat, but you should not be focusing on the price. It’s a common psychological trap investors fall into. In this situation, it would be called “anchoring effect”. Fixating on some historical price of the stock as a reference point. It’s irrelevant.

The stock will rise more than you think, and it will fall more than you think. Investors should focus on the current valuation and try to predict the company's situation in the future. If Zoomd continues growing the stock will go higher.

This was around 40% of the article. The remaining 60% is behind a paywall.

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Turnaround

The turnaround happened. How did it happen? And how does the way the turnaround happened set up Zoomd for continuous growth going forward? …

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My last article, where I was pounding the table on a stock, was this Sintana Energy update, where I wrote, “I think the risk/reward is better now than it has been at any other time I have known about this stock, and I have bought the dip.” Sintana has gone up since then and has left my adding zone, but I would characterize Illumin right now at 1.82 CAD exactly how I characterized Sintana in that quote. Illumin is my favorite stock to add to at this moment.

This is not a situation where I’m averaging down like I was averaging down on Sintana at 50 cents CAD. My cost-basis for Illumin is 1.83$, and the stock is right around there now. The stock hovered around 1,4-1,5$ for a while in 2024, and I was saying at the time that I liked the stock. Why do I like it even more now at 1.82$?

It comes down to how the thesis is advancing. Illumin's thesis in 2024 at 1,45333$ was that the stock has low downside due to the net cash being 55m and the market cap being 75m, no debt, and roughly cash flow neutral. If the company remains in that position, the downside of more than -26.67% is highly improbable, as the market cap would be the same as net cash. The stock also had a lot of upside potential if they get back to revenue growth, as revenue was flat at the time, or they improve their profit margins, or ideally, both.

All the numbers are in CAD

Source: Seeking Alpha Premium

In the last 3 quarters, Illumin returned to y-o-y growth.

Q3 +23%

Q4 +35%

Q1 +17% Growth weakened here due to one of their big clients restructuring

Illumin growth should be measured against as y-o-y, not q-o-q, because the business is seasonal. Q4 is always the best quarter, and Q1 is always the weakest quarter. The cash flow hasn’t improved much due to increased costs for R&D and marketing. These are not huge growth numbers, but because the expectations were so low and the market was apathetic about the stock, it had pushed the valuation to a point where even a modest improvement could drive the stock price up a lot, and it did.

Source: Google

I was patting myself on the back as the stock was going past 3$. It’s a turnaround, I was right. For some reason, the gains feel better when it’s an unpopular stock like Illumin. For example, Aduro has gone up a lot, but seeing all these other people also enjoying their Aduro gains takes away from my enjoyment of my Aduro gains.

It’s still a turnaround, and I’m still right; the stock is just taking a little detour at the moment.

Now we have seen where the stock is headed when the market starts believing that the company is getting to growth. It’s heading past 3$. Easily. Right now it’s 94m market cap, 40m EV, 144,5m TTM revenue, roughly cash flow neutral adtech business. It’s not going to stay at this valuation if it’s growing consistently or starts improving its profitability, or both.

Why did it fall back to 1,82$?

To figure out whether the turnaround thesis is still intact, we have to look at the reasons why the market took the stock down and whether they are fatal to the thesis.

-Tariffs/Trade war fears

I won't conduct a comprehensive economic analysis of the impact of tariffs on the global economy. You can get that meal at a number of different locations.

Adtech got hit heavily when Trump’s trade war started because when there are economic problems, advertising budgets are one of the first places to cut costs.

Source: https://ceo.ca/content/sedar/ILLM-2025-05-09-interim-financial-statementsreport-english-ff90.pdf

Illumin is heavily US-focused.

Source: Seeking Alpha Premium

Here is the YTD performance of some businesses that get the majority of their revenue from advertising. Strongest being ZOOMD, which is my other adtech play, and weakest being Trade Desk, which is a huge Adtech company that has been growing for a while and had/has a very high valuation.

Tariffs started in February and intensified with the Liberation Day on April 2nd. Looking at the Q1 results of these companies, they are not showing much impact; Q2 should start showing the impact, whatever it ends up being.

Trade Desk is projecting 17% growth y-o-y in Q2. Illumin said in the Q1 call on May 9th that “We are now seeing a higher level of activity that continued from the second half of Q1”, but also indicated some impact from the tariffs. Zoomd grew 100% y-o-y in Q1 and said on the May 29th earnings call that the momentum continues. Meta guided 8.8-16.5% y-o-y growth in Q2, and Alphabet didn’t guide anything. For some of these businesses, high organic growth may be masking the economic impacts, like Zoomd, but in general, based on numbers, company statements, and projections, we are not seeing a significant slowdown in the adtech space from the tariffs. And from the above chart, we can see that some of these stocks have already fully recovered from the trade war lows, and the rest have started to recover, except Illumin.

Overall industry projections for the Adtech industry have been 12-22% of annual growth into the 2030s. The big trend is that this space is growing while the trade war creates uncertainty I don’t see it as a big enough risk to not invest in Adtech. It’s an unpredictable variable, and in general, with the macro situations, usually they are best ignored and focus on the companies, and only focus on a macro situation if it has a very large impact on the company. Remember the varus? Remember the regional bank crisis? Remember the trade war? I don’t.

-Weak Q1 results

The results weren’t that bad. It was better than Q1 2024. They grew 17% y-o-y, but the stock started going up after 23% Q3 and 35% Q4. Then the trade war started, and growth slowed down in Q1(not caused by the trade war), and the stock price gains from late 2024 to early 2025 were almost completely wiped out.

Also, the company said in the Q4 call, “In terms of Q1, I will say that the Q1 did start slower than we wanted. That was primarily due to the market coming back just on the calendar adjustment, a week plus later. And then, some of the macro uncertainty related specifically to the macroeconomic condition right now” “So we did see marketing budgets in January get approved later than normal. I have seen deal velocity pick up in the second half of Q1 2025. I have seen improved ARPU, average revenue per customer related to the self-service product in particular. I have seen improved overall channel adoption and stickiness. And so we are currently tracking ahead of Q1 fiscal year ‘24.” So I thought with these comments, something like 10-20% growth for Q1 was priced, but I guess it wasn’t because the stock tanked right after Q1 results were released. I have learned that it’s impossible to know for sure if an event is priced in. I can have an educated guess, but how informed the broad market is about a specific stock is hard to tell.

Apart from the marketing budgets being approved later and macroeconomic conditions, this also hurt Q1 revenue:

“a large client that reduced spending by $2 million during the quarter due to their own specific circumstances, including undergoing a business restructuring."

If a large client hadn’t gone into restructuring, Q1 growth would have been 24,4% y-o-y.

Pointed out on X that this client is WeightWatchers.

Source: https://www.adexchanger.com/platforms/dsp-acuityads-valued-at-600-million-after-us-ipo/

Illumin’s old name was Acuityads, and here they confirmed WeightWatchers as a client, and WeightWatchers is going through a restructuring at the moment.

Source: https://corporate.ww.com/news/news-details/2025/WeightWatchers-Takes-Strategic-Action-to-Eliminate-1-15-Billion-of-Debt-Strengthening-Financial-Position-for-Long-Term-Growth-and-Profitability/default.aspx

WeightWatchers continues to operate, but I assume it will do so with a significantly reduced advertising budget until the reorganization is complete. After it’s done and emerges as a public company, it’s likely Illumin will experience some revenue growth, as they would likely want to demonstrate growth following the debt repayment and public listing, assuming they remain Illumin's client and we have not been led to believe otherwise for now.

This was masking some organic growth in Q1. Overall, it was an interesting quarter in terms of the revenue mix.

They said managed fell because of Geopolitical and macroeconomic uncertainty, but in the call, they said, "We are encouraged to see that the increased momentum in managed service in the latter half of Q1 continue into Q2,”

But at the same time, their “recently reinvigorated Exhance Services line” Revenue grew 149% y-o-y. I’m certainly glad they reinvigorated that business. It would have been a very bad quarter with that business unreinvigorated.

Self-service was basically flat due to WeightWatchers masking the growth from 18 new clients and a +30% average spend per client increase y-o-y.

"our self-service revenue increased 1% year-over-year, but we are pleased to have added 18 new customer relationships in the quarter while we continue to see increased average revenue per client. This self-service growth was offset by a large client that reduced spending by $2 million during the quarter due to their own specific circumstances, including undergoing a business restructuring. We expect that the new clients we added during the quarter will mainly offset this impact going forward as these customers ramp up their spend. Excluding this particular large client spend, our average spend per client increased 30% year-over-year."

-Change in Strategy

The increase in spend per client was communicated by the old management as one reason for the weak revenue, when they were really pushing their clients to switch from managed to self-serve. I quoted this from my original write-up in 2024.

“As far as Q4 is concerned, in general, we're still seeing challenges on the managed side of the business. So, again, Q4 is not going to be the results that we would like to see. And again, I think it's due to the financial situation out there and due to the fact that more and more customers are moving into self-serve. Some of those customers are moving to our self-serve, and it takes them a little longer to start spending to the same levels as it's something new for them. And I do believe we see the results in the future as well.” Q3 2023 call

It seems that this headwind is largely behind us, as spending is ramping up and management is not pushing clients to switch to self-serve as heavily if they are happy with managed services.

We should expect more variance going forward in terms of which business line is growing, due to the new growth strategy introduced by the new CEO.

The growth plan under the old CEO was just to grow self-service, which wasn’t really working. The results came in usually as self-service growing, managed declining, and exchange flat. The old CEO was trying to force Self-Service. Making statements like “It's not an easy transformation to change the DNA of the company, from the managed side of business to Self-Serve” and “The growth numbers are masked by the decline in our managed business. And we always communicated that we feel that the managed business is going to decline. But the value of illumin is illumin Self-Serve”

While the new CEO is saying: “With this customer centric approach, we're finding that more customers are seeing the value in utilizing both our managed service and illumin self-service products. That is what you are now starting to see in our revenue. These results also prove a point I made on prior calls where I discussed my view on managed services as an area where we could return to growth, moving our story from a single growth track to potentially multiple tracks of growth. The initiatives we have been implementing to refine our sales approach and reorganize our sales and marketing activities include a recommitment to managed services” and “At the core of our strategy is a commitment to supporting our customers in a flexible way as opposed to forcing them into one product”

Based on results, the new CEO's strategy is proving more effective, as the company has started growing instantly since he took over. In Q3 and Q4, all business lines grew while Q1 was more mixed, but still showed overall growth.

IlluminX=Exhance Services Reinvigoration

Source: https://illumin.com/company-overview/

On January 22nd, when Q4 and Q1 had not been released yet, the new CEO stated that the Exhance Services business had been neglected prior to his reign, at 13:10 in the video.

“third thing is is we had that third bucket if you remember from my first slide exchange services where we we work with the Publishers this is really a nancent side of the business and I asked a bunch of questions well hang on a sec it's still 20 some percent of our sales why is it so neglected so just being honest and so so we didn't put a lot of effort into exchange services yet this third piece but we got a lot of inbound demand over the last quarter or so and so we have seen a nice sort of steady opportunistic rise in exchange services”

They have been investing in this business in recent months, and the results are starting to show.

"Specifically, our exchange service business grew 148% over year to $12 million, reflecting the addition of new customers, expanding our partnership with new suppliers and investing in key technology enhancements to the platform as well as growing our customer support team. Experiencing measurable success in this area since the second half of last year has sharpened our focus and helped us concentrate more on this part of the business, leading to growth in this segment."

“we had a strong first quarter in terms of revenue growth. This was mainly led by outstanding growth in our Exchange Services business, which benefited from our targeting investments in this area.”

New Products and CTV

Source: https://ceo.ca/@GlobeNewswire/illumin-forecasting-smarter-campaign-planning-with

This was one of their investments that led to higher costs in Q1, and it’s now complete. The CEO thinks it’s going to bring in more customers(quotes from Q1 call):

“So when I think about AI forecaster and new customers, I think that it is a strong driver to bring in new customers.”

“And one of those absolutely critical features is an AI forecaster. This is a tool that is typically reserved. It is available elsewhere, but it is typically reserved for large upfront contracts and big commitments.”

“when we talk to these brands, these challenger brands are like, hey, if you had forecaster, we might flip you some of our business or we might switch all of our business, especially if we don't have to be beholden in tight times to a $5 million, $6 million, $4 million upfront commitment.”

“AI forecaster does put us in that game, first and foremost, but puts us in that game in a way that's much more customer-centric. It doesn't commit them to that big spend. So we think that's going to bring us new customers.”

This forecaster also helps their CTV offering, which they have highlighted as a source of growth. “We are also preparing to launch our new forecasting tool in Q2, which will add tremendous value to several channels, including CTV.”

Source: January 22, Illumin presentation

Outlook

"We are encouraged to see that the increased momentum in managed service in the latter half of Q1 continue into Q2,”

"We are now seeing a higher level of activity that continued from the second half of Q1, and we are working to build on this momentum and overcome the slower start to the year."

All the statements point to a better Q2 than Q1. And a better 2nd half of 2025 compared to the first half. They are expecting profitability to improve in the 2nd half, partly due to higher expenses in the first half, due to spending on investments like the forecasting tool that was released last month.

“This is consistent with what we said on our last earnings call that we expected to record higher expenses in the first half of the year, mainly from continued investment to enhance our product platform, strengthen brand identity as well as certain initiatives to increase our sales capacity, efficiency and focus by our enhanced account management team. This team will be focused on increasing client satisfaction, retention and incremental spend.

Along those lines, we also said we would expect more profitable third and fourth quarters once those investments were largely completed, and this view has not changed, assuming that the short-term headwinds we are experiencing related to tariffs and persistent macroeconomic uncertainty ease. We continue to believe in our long-term prospects and intend to remain focused on cost management and generating strong, sustainable revenue growth.”

“we are really just getting warmed up” ← This is huge.

They prefaced their bullish comments with warnings about the macroeconomic environment. We’ll see if they use macro as an excuse in case they don’t deliver, but they also said they won’t be using that as an excuse.

“From our point of view, we're a small company, and we have the opportunity to really drive our own performance. I think it is a tougher environment out there, but we're not using that as any sort of shield or excuse.”

One thing that raises my confidence is the large amount of insider buying in May by three different insiders. These are all board members.

.Source: https://ceo.ca/insiders-dashboard?symbol=illm&transaction=buy-sell

Illumin has also started buybacks again after a long pause. Further supporting the share price at current levels.

Source: https://ceo.ca/insiders-dashboard?symbol=illm&insider=illumin+Holdings+Inc.

Summary

I really like the current situation with Illumin stock at the moment. Macro fears and WeightWatchers restructuring took the stock down. The valuation is very cheap. The downside is limited due to high net cash and insider buying, and buybacks are providing support for the current share price. Q2 is expected to be better than Q1. The 2nd half is expected to be better than the 1st half. New features are being released, and previously neglected business lines are being reinvigorated. The new CEO is overhauling the marketing and sales strategy. I think this is a strong set-up for consistent growth and revaluation of the stock.

My favorite position to add to right now.

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This article is long. Press “view entire message” when the article gets cut off in Gmail.

If you read my article “follow your ex-investments” you would know that I follow my ex-investments, and if you follow me on Twitter, you may know that I was in this stock briefly starting a small position at 34 cents in last december, averaged up, and then I sold it for a small profit in February at 46 cents, and during last month I returned and built a medium sized position in Cerrado at 63-65 cents.

Why this change of mind? Why re-enter at 37% higher price than I sold at? This write-up will answer these questions and more.

Cerrado Gold has a Gold mine in Argentina, a polymetallic(many metals) development stage project in Portugal, and an Iron Ore development stage Project in Quebec, Canada.

Source:https://www.cerradogold.com/images/pdf/Presentations/2025/Consolidated_Cerrado_Gold_Corporate_Presentation_-_June_2025_-_Print_Version_compressed.pdf

Argentina gold mine NPV and FCF at different gold prices.

Source:https://www.cerradogold.com/images/pdf/Presentations/2025/Consolidated_Cerrado_Gold_Corporate_Presentation_-_June_2025_-_Print_Version_compressed.pdf

Based on these images, the combined NPV of the company is 2.02 billion USD, and they make 61.1m USD of FCF per year at 3300$ gold(current price 3436$). The current market cap is 71.77m USD. The EV is 102.77m USD.

Now I have your attention.

Let’s go over some general info before diving into Cerrado’s financials, assets, and capital allocation plan.

Source: Google

This was/is a turnaround play, having already gone up +300% from the lows. The share price increase so far has been a combination of the gold price going up and the company’s deleveraging, with asset sales, which removed the bankruptcy fears.

Source:https://www.cerradogold.com/images/pdf/Presentations/2025/Consolidated_Cerrado_Gold_Corporate_Presentation_-_June_2025_-_Print_Version_compressed.pdf

Clean Capital structure with a decent insider ownership of 25%, low institutional ownership, and low analyst coverage. Which is one of the multiple reasons for the current low valuation.

Balance Sheet

There are two balance sheets that are relevant because Cerrado recently acquired Ascendant Resources, which is not reflected in the Q1 Cerrado Balance sheet. This acquisition has closed, and the dilution from the acquisition is included in the current market cap.

Source: CERT-2025-05-29-interim-financial-statementsreport-english-3fdd.pdf

Source: https://ceo.ca/content/sedar/ASND-2025-05-14-interim-financial-statementsreport-english-4a6c.pdf

There are a bunch of different liabilities, and not all of them should be counted as debt, so I will break down some of these items.

Cerrado side: the 19m of provisions are for eventual mine closure, the 25m stream is accounted for in the costs

Ascendant side: Stream of 3,746m is a stream, 4m of related party debt for Ascendant is owed to Cerrado so that has been cancelled as aqcuisition has closed, 6,158m put liability is a potential sum ascendant may have to pay to acquire 20% of their main project if the company called MF&I decides to make Ascendant pay that, Ascendant owns 80% now, and 6,158m sum is 5% of the post-tax NPV using 10,5% discount rate.

To calculate the EV, I’m including cash and liabilities that are debt.

Now I’m rounding the cash number to 20m and rounding the debt numbers to 6.5m for LT debt, 4m for ST debt,10m for promissory note and 12.5m for prepayment facility, and 18m for Ascendant note.

Our EV is 71,77(Market Cap)+51(debt)-20(Cash)=102,77m USD EV

While this EV leaves out some real liabilities, it also doesn’t include 15m USD Cerrado will be receiving from an asset sale and a potential 10m USD from an option agreement in 2025-2028.

Source:https://www.cerradogold.com/images/pdf/Presentations/2025/Consolidated_Cerrado_Gold_Corporate_Presentation_-_June_2025_-_Print_Version_compressed.pdf

15m is from the sale of their Brazilian gold assets last year. 45m have already been received, and the buyer is a big company that is solid financially.

10m USD from the option agreement is for a potential sale of some of Cerrado’s exploration properties that the company considers non-core assets in Argentina and can be received at any time before December 30, 2027. Cerrado has already received 4m USD from this option.

Source: Minera Don Nicolas Enters Option Agreement with AngloGold Ashanti Argentinian Subsidiary, Cerro Vanguardia SA, for the Sale of its Michelle Exploration Properties | Panorama Minero

Empire Building Management

May 2023: Cerrado completes the acquisition of Voyager Metals using stock. 1.6 B$ NPV Mont Sorcier.

May 2025: Cerrado completes the acquisition of Ascendant Resources using stock. 147m NPV Lagoa Salgada.

Source:https://www.cerradogold.com/images/pdf/Presentations/2025/Consolidated_Cerrado_Gold_Corporate_Presentation_-_June_2025_-_Print_Version_compressed.pdf

As a full ethnic Mongolian, I’m obviously fond of empire building. It’s genetic. But in the case of Cerrado’s empire-building, I have some premonitions about it. While Cerrado did some asset sales last year to deleverage and re-focus the company, based on the official plans the company is putting out, it seems that an empire is being built, and the question is whether Mark Brennan, the CEO, is more like Genghis or Kublai, and what is the quality of his horde?

Source:https://www.cerradogold.com/images/pdf/Presentations/2025/Consolidated_Cerrado_Gold_Corporate_Presentation_-_June_2025_-_Print_Version_compressed.pdf

This management has taken it upon themselves to build a mine in Portugal, so it’s good to see a strong track record and experience in building a mine. The CEO, director, and COO all used to be at Largo Resources, and the CEO built a mine at Largo. However, I can’t let them get away with that Lassondo Curve BS(bottom left corner), that sort of visually tricks people into imagining the stock price would also look like that.

Source: Google

I didn’t take the exact days when Mark became and resigned as CEO, but those are the correct months, and while the stock is down a bit during his reign, it’s not too bad in the context of the commodity market. The stock went through the commodity supercycle bubble, the 2008 financial crisis, recovered, and then in 2014 commodity prices started dropping again, which caused the stock to drop right after Mark left, and the mine Largo had been building started production.

The CEO has built a mine at Largo, had success at Sierra and Desert Sun, and owns 5,756,422 shares, which is about 4.3% of the company’s shares.

As I said earlier, I sold this stock and then bought back in, and the reason why I sold was the acquisition of Ascendant and the plan to build a mine in Portugal. The reasoning was that it added risks and changed the thesis from “deleveraging with asset sales, focusing on core assets, buybacks, dividends, easy re-rating” to “building more mines with existing cash flow”. The first thesis was easy money at the current valuation. The second thesis has more upside potential, but the money is not as easy. And with cash flowing commodity stocks, I’m always looking for easy money. I’m not looking for a potential 10- 100x like with something like Aduro or Heartbeam. With stocks like Cerrado, my goal is a +50- 200% return and to take profits in 6-18 months and rotate to something else.

Source: AlmostMongolian

For those interested. I sold Africa Oil 2nd round couple of months ago. It’s cheap, but it doesn’t stack up with other opportunities. They have no motion. Total is dragging its feet with Africa Oil’s Orange Basin assets. Stall cityyyyy!

I still hate the Portugal acquisition. Even if it ends up being a great success, I will not say later that I should have supported it. Based on the information I had at the time and have now. It clearly raises the difficulty level of the money. We were on level 1 difficulty of money, and then they raised it to level 2 with some extra rewards for shareholders if they beat level 2, but I want them to play on level 1, because this is mining, and level 1 is difficult enough.

And the market agreed with me on this acquisition. I got out at 46 cents when it was announced, and right after the stock fell back to 35 cents. The gold price and developments with the Argentine gold mine have caused the subsequent recovery. The stock has gone to 74 cents now despite the acquisition, not because of it.

And I can’t ignore the fact that they acquired a related party and its implications. Was it the best acquisition they could have made that just happened to be a related party that was founded and chaired by the CEO of Cerrado?

The optimistic argument would be that the CEO knows the asset inside and out, and knew it was undervalued, and it was only a modest premium, and it was a shrewd play because the dirt on the project has metykogplfinic rock, which means with more drilling it will quadrupple the research. You must do your research.

The pessimistic argument would be that the CEO bailed out his failing Portugal project by using his cash-flowing company Cerrado, and is now using Cerrado’s cash flows that could be going to, for example, massive buybacks for his risky pipe dream, possibly for emotional and selfish reasons based on his long involvement with the Portugal Project and his own shareholding in it prior to the acquistion.

Source: https://ceo.ca/asnd

This is the stock performance of Ascendant before Cerrado acquired it. Later in the asset deep dive section, I will talk about this asset more. Even some positive things.

Their Capital allocation plan also includes stock buybacks. They have a normal course issuer bid in place, but they have not been utilizing it.

Source: https://ceo.ca/@accesswire/cerrado-files-notice-to-implement-normal-course-issuer

In February, they said they would start the buybacks once the acquisition closed. It closed, and they haven’t bought back anything. June 2nd, according to some guy in ceo.ca, they are supposedly starting it after the underground development goes according to plan, and I will not verify this information.

Source: tsxventurewatch, ceo.ca

This is starting to sound negative, so it’s time to move on to why I like this stock and why I bought back in, which is due to their other assets and some recent developments with those assets. If they never acquired Portugal, and this company would be just Argentina and Quebec, this would be a top 3 position of mine; now that they did, it’s 7th among the 11 positions in The AlmostMongolian portfolio, which is still a major achievement for any company. Only around 0,00099% of the world’s companies ever get there.

Argentina

The Argentina gold mine, Minera Don Nicolas, which I will refer to as MDN for the rest of the article, is the core of this investment thesis. If the gold price hovers around 2500-3500$(current price 3452$) and Cerrado doesn’t fumble operationally, the stock is very cheap based on just MDN.

Source: https://www.cerradogold.com/images/pdf/Presentations/2025/Consolidated_Cerrado_Gold_Corporate_Presentation_-_June_2025_-_Print_Version_compressed.pdf

At 3300$ gold and producing 55,263k GEO(gold equivalent ounces) per year, they make 61.1m USD of FCF. Their guidance for 2025 is 55-60k GEO. The company uses GEO because the mine also produces some silver, but the majority of revenue comes from gold.

With this lower than the current gold price and the low end of production guidance number, the P/FCF=1.17 and EV/FCF=1.68 (using my EV calculation)

MDN 111m USD NPV at 2100$ gold and 273m USD NPV at 3300$ gold. NPV is not that high because, at the moment, the official LOM(life of mine) is only 5 years. Cerrado is working on extending that significantly. To be honest, I don’t care about NPV, because I’m not a nerd with science books and a calculator going “Erm, what is the NPV on this?”, “I need to calculate the NPV before investing in anything”. I don’t even know what NPV means.

Whatever NPV is, Cerrado has 2,02 billion USD of it: Argentina 273 m+Portugal 147 m+Canada 1,6B. Huge discount to market cap and EV. Usually you see discounts like this with companies that have a development project, but no cash flow, because the market is taking into account the fact that a company will have to do a lot of dilution or give up a large % of the project to a larger company to be able to develop it, but Cerrado has significant cash flow and lender support for project development.

There is a lot more potential in MDN than 55k ounces per year and 5 years of LOM, as it’s shown as the base case on the slides. A collection of factors caused the past 12 months’ financials not to be as good as one would think based on the gold price, and I will go over why that is and why Cerrado is projecting much higher cash flows going forward, starting with Q2. Some of these factors are definitely going to improve their numbers, and some are up to Cerrado to execute.

Rough estimate, this was around 28.74% of this article. The 71,26% are behind a paywall. The rest of the article goes in-depth on Argentina operations, production growth plans, Life of mine increase plans, costs, hedging, Argentina government policy change benefits, and after that, I’m covering Lagoa Salgada and Mont Sorcier and summarizing my outlook on why I think the stock is such a great risk/reward.

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Sintana

I released my Sintana Deep dive on February 17th when the stock was at 72 cents CAD and had experienced a drop to that price from 1-1.2$ due to a bad drilling result in one of their blocks. Now the stock is at 51 cents CAD, while based on what’s been going on, it should be higher. I, of course, have loaded up.

Source: Google

There has been news. Developments. It hasn’t been only positive news, but on net, the news has been positive.

The market cap is now only 138 million USD. What a great gift! O brave new world, that has suck stocks in it!

Now, let’s examine the positive and negative or perceived negative developments that have occurred since my last post and draw a conclusion on whether the risk/reward has gotten better or worse. This includes the Galp earnings call that took place yesterday.

Positives

3X

At the time of the write-up, investors were waiting for 3X drilling results on PEL 83.

Source: https://sintanaenergy.com/wp-content/uploads/2025/03/sei_corp_presentation_mar25.pdf

Source: https://ceo.ca/@GlobeNewswire/pel-83-second-campaign-update-5-additional-discoveries

Multiple oil discoveries were made.

AVO-10=”Preliminary data has confirmed significant columns of light oil and gas-condensate in high-quality sandstones across AVO-1”

AVO-13= “the presence of light oil columns was confirmed in AVO-13, again in high-quality sandstones”

Deeper Sands=”the presence of light oil columns was confirmed, again in high-quality sandstones”

Some of them were described as significant. Also, more discoveries in “deeper sands” which is a positive and unexpected result, as this drill was originally just targeting AVO-10 and AVO-13.

And the discoveries, like all the Mopane discoveries, possess favorable geologic characteristics for commercial oil extraction: good porosities, high pressures, high permeability, low viscosity, minimal CO2 and H2S, and no water contact.

This was, of course, amazing news, stock shot up next day, even hitting 98 cents at the peak.

The CEO, Robert Bose, said this about 3X in an interview.

“This fifth well was focused on a completely different part of the Mopane complex, located in the south and eastern portion of the complex, targeting two entirely different AVO anomalies called 10 and 13. And, you know, the punch line is this well, was probably one of the best wells that was drilled in, in, in the complex of, of all of them. The results were better than expected across almost every parameter. Better porosity, permeability, better reservoir quality. The pressures were excellent. There was intersect with multiple reservoir US returning high quality columns of both light oil and condensate, you know, high quality sand. So this is had the potential of opening up an entirely new potential development hub in the complex, which is just a fantastic development. So that was, you know, some really, you know, fantastic news.”

These are some statements from Galp’s Q1 earnings call regarding 3X.

“In Namibia, well number five was safely drilled. This is another successful well unlocking now the Southeast region of the Molpane Complex, an exciting area for us.We are now focused on integrating all the data collected and working towards evolving the ongoing feasibility and development concept studies.”

“It’s good characteristics what we’ve found and what we’re still discovering so far. And again, I keep going back to the fact that this well was ended halfway through the quarter, so there’s still a lot of information coming. Having said this, all the information we’re getting is still confirming what we saw and shared initially. So high permeabilities, good porosities, we had higher than expected pressures, which we see as a good sign, very low CO2, no H2S concentration.”

This is good. All the new information confirms that the discovery is as they originally presented it.

We’re still integrating and analyzing all the income data. I think it’s fair to say that if you look at the Southeast Region where Mopane 3X took place vis a vis the Northwest, what we see in the Southeast is in line with our expectations, and it’s certainly oilier than the Northwest Region. So, oilier with good permeability, higher than expected but manageable pressures.

Northwest is 1X, 1A, 2X, and 2A wells, and the 10 billion BOE in place estimate was based on those wells, and now they are telling us the Southeast, which is 3X, is a “certainly oilier” region. Huge statement.

“There is great potential in mopane, a large number of AVOs, but right now, again, we’re very focused on making sure that we get the right development concept for what we already know about the Northwest Region and for the Southeast Region. We are not at this stage moving forward towards the third hub so far. We believe that making sure that we catch up with all the information we got from the first initial exploration and appraisal campaign is critical and that’s what stands in our decision tree at this moment as being the more value accretive approach for the asset.”

When Galp made their discoveries in the northwest, the estimates for production were around 150k barrels per day. Now they are focused on getting the “right development concept” also for the Southeast. 300k barrels per day new estimate?

It seems like we are going to have to wait a bit before the next drilling. Bose is saying Galp is focusing on finding a partner, which means a supermajor taking an operating stake and starting to pour money into this block.

Rhino Finds

There have also been 2 additional discoveries in the neighboring block of PEL 83.

Source: https://sintanaenergy.com/wp-content/uploads/2025/04/SEI-25-04-2025.pdf

Sagittarius-1X, which is closer to 3X than other discoveries of PEL 83 and Capricornus-1X, is shown below Sagittarius. Both of these found oil.

“if you look at the results that Rhino recently obtained, those are consistent with a notion that the basin is oilier closer to shore.” Galp Q1 earnings call. Promising statement for Sintana regarding their close-to-shore block PEL 79.

Source: https://www.upstreamonline.com/exploration/enis-upstream-boss-reveals-juicy-detail-on-namibia-discovery/2-1-1786209?zephr_sso_ott=x7B0eL

Source: https://www.reuters.com/business/energy/african-energy-explorer-rhino-resources-finds-light-oil-off-namibia-2025-04-24/

I like to see this due to the proximity to Mopane and also PEL 79 Sintana’s other block, which they are trying to farm out.

The discoveries are also close to Block 1, located below PEL 79, which Eco Atlantic owns 75% of—another AlmostMongolian portfolio stock, which is a much smaller position than Sintana.

The last positive development is that Chevron is considering drilling PEL 82 in 2026 or 2027.

Source: https://www.reuters.com/business/energy/chevron-mulls-drilling-new-exploration-well-offshore-namibia-2025-04-24/

Sintana has 4.9% of PEL 82, and it’s carried for Sintana, meaning Chevron will pay the costs of drilling. This is good news as it’s pure upside for Sintana, but because of the uncertain timing and the fact that it’s not this year makes it less important for now.

This also bodes well for Eco Atlantic, which is seeking to farm out 4 Walvis Basin blocks, of which three neighbor PEL 82.

Another positive development is the prospective resource estimate completed for PEL 87, which is covered in my paywalled Pancontinental article released today.

Negative developments

Despite all of these positive developments. Mainly 3X. The stock is down.

What has caused the stock to fall to 51 cents?

-CEO selling

-Oil price and the market went down

-Galp releasing contingent resource misunderstood by the market

-Woodside leaving PEL 87, meaning PEL 87 drilling is pushed back.

-No new drilling in the short term

Now I’m going to break apart every single one of these so-called negatives and tell you how they don’t really matter or that they are actually positives.

-CEO selling

Source: https://ceo.ca/insiders-dashboard?symbol=sei

This happened right after they announced 3X results. He sold 2.45% of his position. He still has a position worth 12 million CAD in a pure exploration company. I think that shows strong conviction. Why did he sell? Maybe he wants to buy a fancy car or a boat. Maybe he was intending to sell for a while, but had to wait until the drilling results were released. I saw some people on the internet saying he must know something negative, so he is selling because of that. He would be taking a risk doing that as it’s illegal. And if Bose was the type to do that, why didn’t he dump his shares before the Kapana dry well result? Or buy a lot before the 3X result and then dump into the initial rally? Why didn’t he sell more than 2.45% of his position? I don’t think this is likely. We don’t even know how much these majors doing the drilling are telling Sintana. In conclusion, not a big deal. But it didn’t help the sentiment around the stock.

- Oil price and the market went down

The oil price going down is mainly bad for oil producers, and usually, day to day, I don’t see a strong correlation with pure exploration companies, and if you look at the historical stock price of Sintana, it doesn’t trade with the oil price. But yes, it’s net negative that the oil price is down because majors have less money to spend on exploration. Combined with the overall market weakness that spilled over to most stocks, I can see why Sintana stock took a hit because of this.

I think this is noise and should be TOTALLY IGNORED and only given acknowledgment for dip buying purposes.

-Galp releasing contingent resource estimate

Galp released a contingent resource estimate based on three wells from PEL 83, and the Sintana stock declined after this news.

Source: https://www.lawinsider.com/dictionary/contingent-resources

I think the negative stock price reaction makes sense, considering that around 70% of the shareholders are retail, but fundamentally, it doesn’t.

I saw people online basically going “875 million barrels!? They told us more than 10 billion barrels!” I like seeing comments like this. Observing the competition.

During yesterday’s earnings call, Galp cleared up the confusion about the contingent resource number and reaffirmed the original 10 billion BOE in place estimate.

“On your question on the contingent and the numbers that we’ve reported, the 10,000,000,000 barrels still stands. They refer to the total of Mopane, and you have to take into consideration that the DMACC information that was public referred to November.

So actually it was kind of halfway through the campaign that we had ongoing at the time. So they’re consistent as we see it. There are of course, know, mean risks in our estimates, and they have the methodology of VMAC, which is different from our models and our internal analytics, but we see them as consistent. We’ve shared with a focus on three Cs precisely because all the work that we have, that we’re doing in terms of development will bring further substance to any 2C figures that we don’t see yet as the most relevant ones to explain the full complex. I think it’s positive to give a few additional notes.

So, if you look at DMACC, those were stated for our share. If you look at the 100% basis, it’s actually 900,000,000 barrels. So I think it’s actually positive that this is an extrapolation for analog discovery. So fundamentally what this tells us is that, you know, there’s reassurance in knowing that there is this type of contingency in our findings with the little information that was known back in November. So, all in all, our 10,000,000,000 barrels still stands, but a lot to learn about the complex.” Galp Q1 earnings call

On the recovery factors and the gas to oil ratio on the 3Cs, So again, very different methodologies, DMACC and our models, and again very different scope, and I think that is critical to always keep in mind. This is the information that DMACC has, which refers back to November, so again that is very partial. Mopane is a rather large system.

What we’re finding is that AVOs have different characteristics, so we don’t have a discomfort or find an inconsistency in the numbers that DMAC presented, but they do not stand for the whole of the complex, the whole of mopane. And again, they’re compatible with our models, but they’re very, very partial and they’re early days in terms of estimates. So I would leave it at that. Thank you.

The 10 billion barrels or higher estimate that Galp provided early on was hydrocarbons in place for the whole Mopane complex, and they, as we saw they just confirmed this estimate again.

“In the Mopane complex alone, and before drilling additional exploration and appraisal wells, hydrocarbon in-place estimates are 10 billion barrels of oil equivalent, or higher.”

Barrels in place refers to the total amount of hydrocarbons they estimate are present in the reservoir, whether recoverable or not.

This new estimate is for contingent resources, which means recoverable, but the company is not yet willing to put them in reserves, which means they are commercially recoverable.

Mopane has five hydrocarbon discoveries, and this estimate only considers 2 of them fully and one partly. And only considers information provided up to 30.11.2024. It excludes data from 2A and 3X, which may be the biggest of them all.

“Namibia assessment considers data from the first three wells, Mopane 1X, 2X and 1A (partial data), with the independent assessment by DeGolyer and MacNaughton only considering information provided up to 30 November 2024.” Galp 2024 annual report

It also won't take into account the new 3D seismic recently concluded

“Additionally in 2025, in March, Galp concluded a proprietary 3D high-resolution seismic shooting over the southern part of PEL 83.” Galp 2024 annual report

And it won’t take into account prospective resources that would be within the 10 billion or higher boe-in-place estimate.

“So again, very different methodologies, DMACC and our models, and again very different scope,”

“numbers that DMAC presented, but they do not stand for the whole of the complex, the whole of mopane”

The contingent resource estimate doesn’t apply to the whole complex and was done with a different methodology than the barrels in place estimate.

“This is the information that DMACC has, which refers back to November, so again that is very partial.”

“they’re compatible with our models, but they’re very, very partial and they’re early days in terms of estimates.”

And they say twice that the 10 billion barrels still stands.

In conclusion, the contingent resource number is a very incomplete number that created confusion among retail shareholders. The contingent resource number will go up the more they drill and include more data in it. We don’t know how much recoverable oil is there. We didn’t know before, we don’t know now. There is a lot of drilling to be done without incurring costs for Sintana.

BOE in place estimate was +10 billion or higher before 3X discovery that they say it’s in an oilier region of the block, and they are doing a development concept for it, I would guess the BOE-in-place estimate is much higher now unofficially, even though they haven’t changed it yet as they haven’t even gone through all the data from 3X. As they said earlier regarding 3X, “there’s still a lot of information coming”.

Additionally, considering that 3X is closer to the Rhino resources discovery than it is to the other Mopane discoveries also suggests that the entire Southeast area of PEL 83 is packed with hydrocarbons.

-Woodside leaving PEL 87

I released a Pancontinental Energy write-up(paywalled) today that covers this situation extensively. Shortly, Woodside decided not to exercise their option to acquire 56% of PEL 87 and go forward with drilling a well that would have happened in 2025, even after spending 35m USD for a seismic study, which was part of the agreement. They gave it up.

Now we don’t know when it will be drilled. Pancontinental and the joint venture are pursuing a farm-out with a major because they don’t have the financial means to drill by themselves. I think the farm out is inevitable.

I think Woodside's leaving left Pancontinental Energy the operator of the block with 75% working interest in a great position, but Pancontinental stock still went down a lot as a reaction to it. I didn’t like Pancontinental before, but now I think Pancontinental is in an asymmetric situation, and I added it to the AlmostMongolian Portfolio.

-No new drilling in the short term

“we have in our plan for 2025 concerning further CapEx in Namibia. We have around 100 to 155 that concern both the well and the seismic, so no further major CapEx spend expected there.” Galp Q1 earnings call

I’m thinking what comment in the Galp earnings call the market didn’t like, because Sintana was down on the day of the earnings call despite overall very positive comments. Maybe it was this. 3D seismic is done, and the one well is done. No more CAPEX from here. This should have been priced in already based on previous statements, but maybe it needed to be said clearly before it sank in.

Galp is currently focusing on finding a major oil company as a partner. They expect this to be done later this year. When the partner has been found, the CAPEX should ramp up massively.

“The natural step in Namibia is, of course, to advance on the partnership. We are already engaging with several parties that have been signalling interest, all highly credible top tier operators.

At this time, GALP is initiating data sharing. We’re mindful of the fact that the alignment necessary for a value accretive partnership will likely take time, as we’ve always expected, and with no delays to our game plan. And to be clear, no procrastination but also no rush. All in all, our base expectation is a firm decision only later in the year, even though we’re not committing to a strict timeline”

“Again, a set of potential partners that tick the boxes, if I may say so, in terms of their experience, their potential role as an operator, their manifested interests and their availability towards exploring the assets at the right pace. So data is now being shared. We expect to be sharing data until mid summer. Priority is ensuring the alignment of interests. So that’s what we are going for.” quotes from Galp Q1 earnings call

There is no drilling scheduled at the moment on Sintana’s blocks. There will be drilling inevitably, but atm there is a pause. We don’t know when the next well will be drilled on PEL 90, PEL 83 or PEL 87.

This means there are fewer short-term catalysts. There are other catalysts, such as multiple assets that could have farm-out news(PEL 87, PEL 79, PEL 83) and announcements of new drilling plans. PEL 83 farmout is the biggest catalyst and also the most likely to happen catalyst within this year.

One good thing about less drilling activity is that it means fewer short-term risks. What could cause Sintana to have a new leg down to 30-40 cents? Not many things.

And the positive catalysts from here are less risky. Announcing new drilling will cause the stock price to increase. Not announcing new drilling means neutral/slow decline in stock price, same thing with farmout announcements. Announcement of a farmout will make the stock go up, and not getting a farmout is a neutral/slow decline in stock price, as opposed to drilling, which results in either the stock shooting up or crashing down.

These developments will lead to drilling, but the key point is that if asymmetric catalysts, such as drilling announcements and farmouts, occur, they will cause the stock price to be higher when we reach the riskier catalyst, that is, drilling.

And these asymmetric catalysts, like the farmouts for PEL 83 and PEL 87, are, in my opinion, 99% likely to happen at some point. And let’s say 80% likely to happen within 12 months. And should alone without drilling risks provide 50-150% upside from the current price. Doesn’t throwing percentages around make everything clear?

This is why I like the current situation for building my position in Sintana.

In Summary, since my article, the stock is down 29%, and these are the developments that have happened since.

Positives

3X result=Amazing

Calp Q1 earnings call=promising

Rhino results next to PEL 83=Good

Chevron PEL 82=Net good, but not a big deal atm

PEL 87 Prospective resource estimate=good, more later

negatives

-CEO selling 2,45% of his position = Most likely meaningless

-Oil price and the market went down = Short-term negative for the stock price, unpredictable

-Galp releasing contingent resource estimate = incomplete estimate, meaningless, 10 billion stands

-Woodside leaving PEL 87, meaning PEL 87 drilling is pushed back = Bad for Sintana, at least for the short term, Good for Pancontinental for the long term

-No new scheduled drilling in the short term = Bad, but also kind of good

Overall, I think the developments have been positive, mainly due to 3X. The market doesn’t agree, but the market is wrong; I’m right. In my opinion, I’m right. I think the risk/reward is better now than it has been at any other time I have known about this stock, and I have bought the dip.

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This is a paywalled write-up. I also released a FREE Sintana Energy update today. These were originally the same article, because these companies are connected through PEL 87, but it was too long, so I ripped them apart.

I didn’t like Pancontinental before, I didn’t see a reason to buy even a small position instead of adding to Sintana, but now, after Pancontinental stock crashed due to Woodside leaving PEL 87, and also Woodside leaving PEL 87 left Pancontinental in an asymmetric situation, I think it’s worth a shot at the current price and the current situation. Pancontinental has been added to The AlmostMongolian Portfolio. I think it’s a great risk/reward now when it wasn’t before.

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Pancontinental Energy $PCL.AX Investment Thesis

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Heartbeam Basic info:

Source: Google

IPO late 2021 into a strong market for tech innovation stocks. The stock price has performed poorly since then due to delays for commercialization, delays for FDA permits, and the overall worse market for small-cap innovation stocks.

Market cap=66m USD

No debt

No revenue at the moment. Target for revenue 2nd half of 2025.

Recently raised $11.5 million USD (at $1.70, no warrants, oversubscribed). This raise should sustain them for about a year.

The total addressable market exceeds $ 100 billion USD.

Heartbeam, the newest addition to The AlmostMongolian Portfolio, is my first healthcare stock and also my first heart attack-focused stock. Heartbeam has developed an innovative heart-monitoring device. The device is what this company and the investment thesis are all about, which means with this write-up, I will try to answer the following questions based on available information:

How does the device work?

What proof does Heartbeam have that the device works?

Is the device superior to the existing devices?

Is it permitted?

What is the plan for commercialization?

Who are the people owning and running Heartbeam?

In answering these questions, I have written the most comprehensive Heartbeam write-up on the internet.

To give you the basic idea of the thesis.

This is HeartBeam’s competition

Source: https://d1io3yog0oux5.cloudfront.net/_00cc34ec2f18b412abff79848819c77b/heartbeam/db/2293/21696/pdf/HeartBeam+investor+pres+03142025.pdf

The easy-to-use heart monitoring devices used at home and on the move are not accurate enough. Nobody who fears that their heart will brutally attack and murder them is solely going to rely on the Apple Watch. They will go to the hospital to obtain the best reading with a 12-lead ECG.

However, the current 12-lead ECGs are not practical for use at home or on the move due to the cables, size, and training required to use them properly. Just look at the standard 12-lead ECG on the right side of the picture. Imagine lying on a public beach or a park bench with that set-up, looking like you’re about to die any minute.

There is a demand in the market for a device that has hardware similar to the devices on the left side of the picture (easy to use, small) but with the capabilities of the device on the right side of the picture (accuracy).

This is what HeartBeam has developed: the first-ever cable-free 12-lead ECG system, approximately the size of a credit card.

Source for 2 slides above: https://d1io3yog0oux5.cloudfront.net/_00cc34ec2f18b412abff79848819c77b/heartbeam/db/2293/21696/pdf/HeartBeam+investor+pres+03142025.pdf

This shows the competitive situation perfectly. Of course, the top-right is where you want to be, and it’s only Heartbeam in there. I didn’t just take their word for it; I tried to look for competitors online, but I didn’t find any other devices in the market or in development that could be placed on the top right.

Source: https://d1io3yog0oux5.cloudfront.net/_00cc34ec2f18b412abff79848819c77b/heartbeam/db/2293/21696/pdf/HeartBeam+investor+pres+03142025.pdf

Quick detour. Here, it says 17 patents. Their March 2024 PR states that they hold 14 patents in the US and 4 internationally. Using my calculator, I calculated that this translates to a total of 18 patents. I don’t know what happened to that 1 patent.

But we don’t need to obsess over that 1 patent. Overall, they have a vast patent collection.

They are also looking to expand it. That same press release also states that they have 20 pending patent applications worldwide. The whole world.

Here is the demo for the HeartBeams device. It’s very easy to use and fast to use.

Source: https://ir.heartbeam.com/

They have an app, which means recurring revenue. The average user will be old, so it’s crucial that the app is easy to use, and as you can see from the video, it is. You just put the device where your heart is (if you don’t know, the app will tell you) and press start recording. It takes 30 seconds to get the results. The results are sent to the patient's cardiologist, and within 24 hours, the patient should receive a response from the cardiologist.

The app also provides an option to speak with a cardiologist immediately for $65.

Source: https://ir.heartbeam.com/

The competition, which is the cabled 12-lead ECGs performed mostly in hospitals, takes 10-15 minutes, not accounting, of course, for the time it takes to go to the hospital.

Quick demand outlook:

We all know that our heart becomes our greatest enemy as we age. According to the World Health Organisation around 30% of global deaths are due to cardiovascular diseases. And it’s the leading cause of death globally. The population is getting old in rich countries(Heartbeam’s first target market). The demand for this kind of product is strong and will get stronger.

FDA approvals and submissions

Before commercialization, Heartbeam needs FDA clearance for its products.

They need two crucial FDA approvals. 1 for the hardware and 1 for the software.

FDA approval for the hardware was granted in December 2024, and the FDA submission for the software was submitted in January 2025.

Source: https://ir.heartbeam.com/news-events/press-releases/detail/83/heartbeam-announces-fda-clearance-for-at-home

This is already very important because it serves as a crucial piece of validation for the technology. FDA 510(k) clearance means that the product is deemed safe and effective for its intended purpose.

The purpose, as stated in the PR, is a “comprehensive arrhythmia assessment.”

arrhythmia=abnormal heart rhythm

This FDA clearance also means the product can be sold. The question then arises as to why they are not selling it yet.

“Our first webcast question asks, congratulations on receiving their first FDA clearance, what went into your decision to not immediately commercialize upon clearance.

Rob Eno

Yes, I'll take that one. So just to recap, our initial clearance is for the system with the three-lead output and the second submission is the 12-lead Synthesis Software. And we just think it's important that we initially commercialize with the 12-lead software, which is really where we think the differentiation is from a physician and a patient perspective. So we're using this time after the initial clearance while waiting for that second clearance to fully prepare for commercialization with the Early Access Program. Hope that helps.” Q4 earnings call transcript

Source:https://d1io3yog0oux5.cloudfront.net/_00cc34ec2f18b412abff79848819c77b/heartbeam/db/2293/21696/pdf/HeartBeam+investor+pres+03142025.pdf

In summary, There are two pieces that both need FDA approvals for optimal commercialization.

1. FDA approved is the device that “collects signals in 3 directions, capturing the totality of heart’s electricity signals”

2. FDA submitted “Signals from 3 directions train HeartBeam’s AI algorithms and are synthesized into 12L ECGs using a personalized transformation matrix”

Source: https://ir.heartbeam.com/news-events/press-releases/detail/85/heartbeam-achieves-major-milestone-with-fda-submission-for

In terms of near- and mid-term catalysts, this second FDA clearance is the biggest one. It would be a big de-risking event, and If they obtain it, the company will be ready to proceed with full commercialization. Based on existing studies, the first FDA approval, and blind trust, I believe it’s highly likely that the software will receive FDA clearance; however, it’s always a possibility that it won’t, which is one of the risks associated with this stock.

When?

“Next question asked, when is the expected clearance time from FDA for the second clearance?

Rob Eno

Yes, it's always challenging and even in today's environment, particularly so in predicting the timing of FDA reviews and clearances. We're estimating that we'll receive the clearance before the end of the year, but right now, it's a little early for us to give any more specific guidance with that.

I'll just add that we have excellent relationships with FDA. We feel good about our submission. We held two pre-submission meetings with FDA to specifically talk about the design of the VALID-ECG study. And then as we've mentioned, we're encouraged by the results of the VALID-ECG study, which will be the main focus of the application and also those results will be presented publicly at the end of April.” Q4 call

They mention the VALID-ECG study and that they are encouraged by the results that will be presented at the end of April. This is likely our most near-term catalyst, as it is a more important study than usual because this study is a component of this FDA submission, which means if the results are positive, as they are indicating with ” encouraged,” the FDA clearance is highly likely. My confidence is further increased by the fact that they conducted a smaller study using the same protocol, which yielded good results.

I delve into this study further in the studies section of the article.

This was about 1/3 of the article. 2/3 are behind the paywall. The topics covered behind the paywall are commercialization strategy, scientific evidence, an interesting institution backing them, a summary, and some other things.

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As I was writing the Eco Atlantic write-up I was also looking at other companies in the Orange Basin. One of those companies was Sintana and I concluded that Sintana has even better Risk/reward than Eco Atlantic.

Sintana’s business model is to acquire O&G exploration assets, farm them out to bigger companies, keep a small working interest, and let the big companies pay for the exploration while Sintana benefits if the exploration is successful.

Sintana has no debt and they have enough cash(14.6m USD) to pay for the company's basic running costs for years. This means Sintana does not need to do dilutive raises to keep the company running or to pay for drilling themselves which is common among commodity exploration companies.

Every exploration company in the Almostmongolian portfolio (Globex, Eco, Sintana) does not need to dilute shareholders and makes deals where other companies must pay the exploration costs. These companies avoid many of the usual issues with exploration companies which is the reason they cross my investment threshold. They are less risky, and based on my due diligence each company has a lot of upside potential.

Sintana has these assets+one asset in Colombia

Source: https://sintanaenergy.com/wp-content/uploads/2025/02/sei_corp_presentation_jan25.pdf

PEL - 83 4.9% WI(Working interest) carried to production

PEL - 87 7.3% WI carried to development

PEL - 90 4.9% WI not carried anymore. 1 well drilled. Bad well.

PEL 82 4.9% WI Carried. Details of the carry have not been fully disclosed.

PEL 79 16.7% WI, option to increase to 22,83%

PEL 103 15% WI Carried, but no details of the carry

WMM-37 Colombian asset, Legal situation, 100%?

The Stock

Their market cap is 190m USD.

As mentioned before they don’t have debt and they have cash for many years(14.6m USD) based on Q3 financials.

Their cash expenses per quarter are usually 0,5-1m USD per quarter. When it shows more than that in financials it either includes acquisitions in operating costs or there was more stock-based compensation which is of course a non-cash expense.

They have no revenue.

Source: https://sintanaenergy.com/wp-content/uploads/2025/02/sei_corp_presentation_jan25.pdf

Decently high insider ownership. Low institutional ownership and high retail ownership. This makes the stock volatile.

Source: Google

Recently the stock has fallen because of 2 reasons.

The main reason is PEL-90 bad drill results

The secondary reason is a negative spillover effect from Shell’s 400m USD write-down of certain Orange Basin discoveries. Sintana is not involved with these discoveries, but they are close to Sintana’s blocks.

Both of these events will be covered later in this article and why I think the stock has overreacted and why I think this is a buying opportunity. I have added on this dip and think it’s a great risk/reward at this price.

But first. Let’s look at the history of Sintana.

History

In the past Sintana’s only asset was WMM-37 in Colombia. That asset is in a legal situation currently, but then they made an amazing 4 million dollar investment that was announced in 2021 and closed in 2022.

Source: https://sintanaenergy.com/news-release/sintana-announces-execution-of-definitive-agreement-to-acquire-strategic-portfolio-of-petroleum-exploration-license-interests-in-namibia/

They bought a 49% stake containing these carried interests for 4 million USD in 2021. In 2022 Shell and Total had massive oil discoveries in Namibia’s Orange Basin. These discoveries were close to the assets Sintana acquired. This raised the interest and the speculative value of all of Sintana’s Orange Basin Blocks and started an exploration Boom in the area. Then in 2024, there was a massive oil discovery in Sintana’s carried-to-production PEL 83 block which was the biggest catalyst that led to the stock going up.

This 4 million USD investment changed everything. Briefly after this PP was announced Robert Bose joined in as the CEO.

Source: https://sintanaenergy.com/news-release/sintana-announces-appointment-of-robert-bose-as-president/

He saw the potential of this private placement and the timing of his entry into this position shows good instincts. Or he was lucky. Or both. Even accounting for the recent pullback the stock has gone up 414% during his term.

In June 2024 Sintana acquired an indirect interest of 16.7% of PEL 79 for 2 million USD and they have an option to increase it to 22,83% for an additional one million USD. More on this later, but I like this acquisition. We don’t yet know whether it will be successful, but the amount of money spent compared to the potential makes it a very favorable risk/reward investment for Sintana. Very likely not as good as the company maker's 4 million USD investment, but that was one in a lifetime. The Orange Basin blocks are not as cheap anymore after the massive discoveries made in 2022-2024.

Source: https://sintanaenergy.com/wp-content/uploads/2025/02/sei_corp_presentation_jan25.pdf

That’s how Sintana ended up with its current portfolio. Now let’s talk about their most important asset that’s arguably worth more than their market cap.

PEL-83 4.9% WI carried to production, Namibia, Orange Basin

Source: https://sintanaenergy.com/wp-content/uploads/2025/02/sei_corp_presentation_jan25.pdf

The Mopane discovery in PEL-83 was estimated to have approximately 10 billion boe(mostly light oil and condensate) or higher based on 2 exploration wells you can see in the picture above 1X and 2X. Since then Sintana has drilled 2 appraisal wells 1A and 2A and is drilling 1 exploration well 3x(no results yet). The 10 billion estimate has not been updated by the operator to include the results from 2A, 1A, and 3X yet.

The 10 billion BOE-in-place would make it one of the biggest offshore hydrocarbon discoveries in history. Sintana has 4.9% of it and they don’t have to pay any costs associated with it until it starts production. It’s fully carried.

The significance of the carry to production cannot be understated when Sintana has a 190m USD market cap, no cash flow, and the development costs are in the BILLIONS for this kind of project from exploration to production.

This 10 billion BOE-in-place figure comes from Galp Energia the operator of PEL 83. Galp is a Portuguese 11 billion market cap energy company.

From Galp Q1 2024 conference call on April 30th:

“Alessandro Pozzi

And there, on Namibia, as you might have expected. The first one is on the estimates that you've given of 10 billion barrels in place. I was wondering if you can give us a bit more color on how conservative this estimate is and whether they are -- the amount of volumes is allocated to the different targets that you've announced, AVO-1 to 3 and through the EBITDA target.

And also, this is a very large discovery, 10 billion just with 2 wells. Are you concerned about heterogeneities across the field as well? And second question is on the CapEx for the next phase and the timing of the next appraisal wells, please.

Filipe Silva

Your second question, CapEx is we want to -- we're launching the campaign now. So this is going to be a late '24, early 2025 exercise for us. On the oil in place, 10 billion or higher is our BOE any place. It's our best assessment based on the information that we have so far. So we have data collected from the two wells and the DST. And all this has reinforced our pre-drill geological model that we had, which itself was based on our very extensive analysis of the area over the last decades. So this is not a new asset for Galp.

So the data covers only some of the structure that we had initially identified in the seismic. Some of this has been derisked plus some additional hydrocarbons that we found in the deeper targets. So we have calibrated or we are calibrating the model based on what we have proven so far. And this is the estimate that we get now. Could we -- is there risk associated with the estimate? Yes, up and down. So that's why we need to do more exploration and appraisal activities to better assess the full area of the Mopane complex.

So lots of information that we're still analyzing. A lot of the cores, the fluids has been sent into the labs. So all this is going to be -- we think, is going to demonstrate what we saw in the seismic. So a lot of reservoir updating has to be done. But you know Galp by now. We are a measured, conservative company when it comes to estimates and external communications.”

We have been with this estimate for a while now. As they say there is a risk to the estimate it could turn out to be higher or lower and they also say they are a conservative company when it comes to estimates.

About the quality and the product mix of the discovery. Same call:

“Ronald Doesburg

Matt, on Namibia, Ronald Doesburg, as we can -- this is light oil with gas condensate. So, these are fluids with associated gas. And we’re not guiding on GOR at this stage. And also, as we said before, the fluids are not the same everywhere where we have drills.

What is important, when you have light oil, low viscosity, we’re not expecting associated gas to be an issue for the development of the project. So, reinjection is most likely going to be prioritized during at least the initial few years.

And again, this is a very -- we haven’t seen trace of contaminants nor high level of CO2, nor any unexpected conditions that would lead to technical concerns. Again, early days, but looking good so far. Thank you.”

People tend to see red when they hear gas in an oil discovery. Gas condensate is better than gas. It’s a higher-value product. They are not providing a GOR(gas to oil) ratio yet. They have been saying the gas is not a problem also because they can reinject it to improve oil recovery.

Overall, Mopane discoveries have been characterized by good quality sands, good porosities, low viscosity, good permeability, no hydrogen, minimal CO2, no water contacts, good quality reservoirs, no contaminants, high pressures

Basically all that is good. I copied and pasted that into GROK to save me some time.

The Mopane discoveries in Namibia, as you've described, present an exceptionally favorable scenario for oil and gas development based on:

Good Quality Sands: Indicates well-sorted, clean sands which are ideal for forming good reservoirs.

Good Porosities: High porosity is crucial for storing large volumes of hydrocarbons.

Low Viscosity: The oil's low viscosity means it can flow more easily, which simplifies extraction and could reduce energy costs for production.

Good Permeability: This allows for efficient movement of fluids through the reservoir, which is vital for achieving high production rates.

No Hydrogen: Eliminates concerns related to hydrogen embrittlement or other hydrogen-related issues in production facilities.

Minimal CO2: Reduces potential corrosion issues and simplifies processing, as CO2 can be problematic in high concentrations.

No Water Contacts: This implies there's no water layer directly beneath the oil, which can complicate extraction by requiring water management.

Good Quality Reservoirs: A summary of the above points, confirming that the geological formation is conducive for hydrocarbon accumulation and extraction.

No Contaminants: This simplifies the refining process and potentially increases the value of the oil.

High Pressures: High reservoir pressures can naturally drive oil to the surface, which might reduce the need for artificial lift methods early in the field's life.

These characteristics collectively suggest that the Mopane field could be developed with:

Reduced Operational Challenges: With fewer contaminants, lower viscosity, and no water contacts, the operational side of extraction should be less complex.

High Recovery Potential: Good porosity and permeability with high pressures mean that a significant portion of the oil in place might be recoverable with less intensive secondary or tertiary recovery methods.

Lower Environmental Impact: Minimal CO2 and no hydrogen mean fewer concerns about greenhouse gas emissions or special handling procedures.

Economic Advantages: The ease of extraction due to the nature of the reservoir could lead to lower capital and operational expenditures, potentially making the project more economically viable.

Mopane is also the shallowest oil discovery in the Orange Basin. Which is good. Shallower is better.

Source: https://sintanaenergy.com/wp-content/uploads/2025/02/sei_corp_presentation_jan25.pdf

Look at how stacked Mopane is.

This Picture doesn’t show Venus which is deeper than Jonker and Graff.

These are each well results from Mopane so far.

1x and 2x

”The Mopane-1X well discovered, in January, significant oil columns containing light oil in high-quality reservoir sands at two different levels: AVO-1 and AVO-2. The rig then moved to the Mopane-2X location, where in March significant light oil columns were discovered in high-quality reservoir sands across exploration and appraisal targets; AVO-3, AVO-1 and a deeper target. In particular, the Mopane-2X well found AVO-1 to be in the same pressure regime as in the Mopane-1X discovery well, around 8km to the east, confirming its lateral extension.

The reservoirs’ log measures contain good porosities, high pressures and high permeabilities in large hydrocarbon columns. Fluid samples present very low oil viscosity and contain minimum CO2 and no H2S concentrations. The flows achieved during the well test have reached the maximum allowed limits of approximately 14 thousand barrels oil equivalent per day, positioning Mopane potentially as an important commercial discovery. In the Mopane complex alone, and before drilling additional exploration and appraisal wells, hydrocarbon in-place estimates are 10 billion barrels of oil equivalent, or higher.”

Leads to a 10 billion BOE-in-place estimate

Appraisal Wells

1A= “Mopane well 1A encountered light oil and gas-condensate in high quality reservoir- bearing sands, once again indicating good porosities, high permeabilities, and high pressures, as well as low oil viscosity characteristics with minimum CO2 and no H2S concentrations.

Together with the Mopane-1X (Well #1) and Mopane-2X (Well #2) findings, this appraisal well confirms the extension and quality of AVO-1. Galp and its partners will continue to analyse and integrate all newly acquired data, while progressing with the upcoming activities, which include additional exploration and appraisal wells, and a high-resolution proprietary 3D seismic campaign set to start in December 2024.”

2a=”Mopane-2A successfully encountered hydrocarbons in two reservoirs – a column of gas-condensate in AVO-3 with a thin net pay in the reservoir sweet spot, and also a column of light oil in a smaller reservoir at AVO-4.

Both reservoirs showed good quality sands, with good porosities and permeabilities, high pressures and low fluid viscosity characteristics, with minimum CO2 and no H2S concentrations. Also, in line with all previous Mopane wells, no water contacts were found.”

The market has had a lukewarm reaction to these results despite them being called successes and confirming previous findings due to the lack of information given so far about them.

Source: https://www.galp.com/corp/Portals/0/Recursos/Inv_4Q24/Results_4Q24.pdf

This is from Galp’s presentation today(17.2.2025). They didn’t say much new about Mopane even though most of the questions in the earnings call were about it. 11 billion market cap company and Mopane is the biggest focus of the analysts. They say in the presentation “successfully re-risking the Mopane complex”. I think that means that the appraisal wells are confirming the 10 billion estimate and the commercialism of the project.

Source: https://sintanaenergy.com/wp-content/uploads/2025/02/sei_corp_presentation_jan25.pdf

There is 1 exploration well left that is 3X. 3X will explore a new area targeting 2 large stacked prospects and it has the potential to add to the resource. It has been Spud(initial drilling) already, but we don’t have the results yet. This is the next positive or negative news event. The results are expected this month.

3X well result will be more important than the PEL-90 Kapana well result that started the -30% decline in the stock. I think psychologically many people think Kapana was more important because it’s a whole new block, but even if PEL-90 was successful the carry was going to end after that 1 well. 3X is an exploration well, like Kapana, which is exploring a new area, but Sintana will enjoy the results of 3X Sintana without any costs until production which makes it a more impactful well if successful.

@Jamesiebabie1 on X and ceo.ca tracks the drilling boats in real time. This is for 3X.

Source: ceo.ca, Jamiebabie

People are saying that because these boats have been in the area for so long. They must have found something or they would have rowed out of there.

There is also a high-density and high-resolution 3D development seismic being done at the moment for the whole Mopane complex. It is almost ready.

Source: ceo.ca, Jamesiebabie

The blue lines indicate where the seismic boat has been paddling. You can also see Santorini drilling 3X for Sintana and Noble Venturer drilling another exploration well below it for another company. If successful these 2 wells should turn around the current negative investor sentiment around Orange Basin. Results from both should be released very soon.

Update a few hours after this write-up was released

The Sagittarius well just below 3X has hit oil. Boding well for 3X. Although we don’t know if the discovery is considered commercial. The details have not been released yet.

Source: https://sintanaenergy.com/wp-content/uploads/2025/02/sei_corp_presentation_jan25.pdf

You can see how close Sagittarius is to 3X. There is a high likelihood their discovery reaches into PEL-83 and connects to Mopane.