Gold Exploration Stocks After the Tax-Loss Selling Deluge

A list of exploration/junior stocks that are candidates for a potential “post tax loss selling bounce”. Rallies in thissector in January-February following tax-loss selling induced lows at the end of the year can be quite sizable.Some of the charts show OTCBB US listings, some show Canadian listings (the latter are identified below thecharts). Note: target ranges refer exclusively to potential short term targets, if a recovery is indeed in the cards(they simply based on lateral resistance areas). At the end of the list there are a few “high quality” explorers andjuniors which we consider to have strong fundamentals and good long term prospects (the usual caveats apply).The main criterion for inclusion in the first part of the list was a sell-off in the tax loss season – in terms of qualitythese stocks are all over the map and some are obviously riskier than others. In order to provide a little bit ofguidance we have included ratings - a detailed explanation of the ratings can be found at the end of thedocument. Included are brief descriptions of the companies and their main assets as well as information onrecent insider purchases/sales where applicable. Our descriptions are bare-bone in most cases, but there arealso links to the most recent company presentations, which contain detailed information.

Almadex, DEX.V, AAMMFRating: medium grade speculative (no PEA-supported resource, but it owns six drills, has a huge database and a royalty portfolio, which raise it to medium grade)A spin-off from the AAU stable (see also below). It holds $6 million in cash, ~1600 ounces of gold (currently lentout at interest to AAU), 3.9 million Azucar shares, 18 different royalties and 19 exploration properties (in Mexico,Nevada and Canada). Note: because Almadex owns 6 drill rigs, it can drill very cheaply. Link to the most recentpresentation (PDF)

AAMMF – Canadian chart (DEX.V)

Almaden, AAU Rating: medium grade speculative (if not for permitting delays it would be rated conservative-)- Almaden is the “parent” from which Almadex and Azucar were spun out. It holds the high grade Ixtaca silver-gold deposit in Mexico, which is currently in permitting limbo, but is undoubtedly economically viable (supportedby feasibility study). In our opinion the deposit will eventually be developed. AAU is actually a potential takeovercandidate for one of the larger silver mining companies. Link to the most recent presentation (PDF).

AAU

Azucar – AXDDF, AMZ.VRating: medium grade speculativeAzucar is the other AAU spin-off. It has discovered what seems to be a quite sizable copper-gold porphyrysystem. Newcrest (the biggest Australian gold mining company) holds 20% of the shares and is fundingexploration on the property. This stock should be good for a pretty hefty bounce. See the latest presentation here(PDF).

AXDDF

Atac Resources, ATADF, ATC.VRating: conservative-Atac has a viable high grade deposit with a PEA (preliminary economic assessment) and a separate, open-pittable 1.6 million oz. high-grade resource in the Yukon, within a large property holding with numerousimpressive drill results all over the show. Barrick Gold holds 17% of the shares. There should be some news flowsoon, as the PEA will be updated to incorporate new drill results and other information obtained since its initialpublication. Details in the latest presentation (PDF).

ATADF – the rather wide target range is derived from its 2016 and 2017 trading ranges.

Barrian, BARRF, BARI.VRating: medium grade speculative (based solely on drill results)We include this stock because it is actually quite interesting from a value perspective (it has discovered near-surface oxide gold in Nevada with respectable grades over large widths and there has been quite a bit of insiderbuying all year long; based on its drill results its fan club may be poised to grow) – the problem is that the stockbarely trades, at least not in the US OTC market (possibly because it is still a fairly new company). One wouldhave to buy this one on a Canadian exchange, as trading volume is considerably larger there. Here is the link tothe presentation (PDF).

BARRF – there isn't even a chart of it available on stockcharts.com yet, so we have to confine ourselves to thispoor man's chart from Yahoo. Note: a 1 for 2 share consolidation is planned.

Orca Gold, CANWF, ORG.VRating: conservative based on deposit, highly speculative based on political risk factorsA viable multi-million ounce deposit with a complete bankable feasibility study, plus other projects in a JV – thestock used to trade at much higher levels years ago (it peaked at over $19!). The problem: the deposit is inSudan, so the stock has been politically discounted to death. However, the political situation in Sudan has

recently finally stabilized, with a new technocratic interim government installed and supported by the military. Sonow there is actually a realistic chance that development of the mine will resume. Tax loss selling in this stockwas quite pronounced, so there is potential for a significant bounce in any event. Presentations: 1. corporatepresentation, 2. feasibility study presentation.

CANWF

Columbus Gold, CGTFF, CGT.TORating: conservativeAnother stock that has been clobbered by tax-loss selling and trades at a multi-year low - despite having 45% ofa multi-million ounce gold deposit with a bankable feasibility study in a JV with Norgold (CGTFF is fully carriedup to the issuance of the mine permit), plus two more prospective/promising properties. We don't know why ithas traded so poorly, but then again, that is why it is an opportunity. There was quite a bit of insider buying in thepublic markets recently. See the latest presentation (PDF) for more details.

CGTFF – clearly a tax loss selling victim in 2019

Quebec Precious Metals, CJCFF, CJC.VRating: conservative-Has a sizable high grade deposit in Canada (Sakami), plus the surrounding highly prospective land package andnumerous non-core properties that are offered for sale and/or JV/earn-in agreements. This stock has tradedquite poorly as well, for no good reason. Newmont (NEM) owns 20% of the shares and has so far maintained itsstake at that level (i.e., it participates in capital raises to keep it at 20%). There is fairly regular insider buying inthis stock, both open market purchases and management participating in financings. Presentation (PDF).

CJCFF – Canadian chart (CJC.V) – as far as we know the big jump in mid-2018 happened in the course of athree-way merger that created the current incarnation of the company.

Defiance Silver, DNCVF, DEF.VRating: medium grade speculativeOne advanced gold-copper deposit with a PEA (4m oz. Au-eq.), one very large silver/zinc/lead/gold deposit inthe process of being drilled. MAG Silver hold a 4% stake. 1. corporate presentation, 2. technical presentations.

DNCVF

Golden Ridge, GORIF, GLDN.VRating: highly speculativeVery speculative, but we think the company may be sitting on something big. At the time of writing the marketcap is only $2.8 million. GORIF recently entered into an earn-in agreement that gives it control over a huge tractof land surrounding its flagship project where it already had a few spectacular drill results (gold-copper orebody).If they find what we think they could find, this could become quite exciting. There was a lot of insider buying inthe public markets throughout the year. Presentation (PDF) (note: the presentation is slightly dated by now - thegreen area on the map designated as belonging to Evrim Resources is now actually controlled by GORIF).

GORIF – Canadian chart (GLDN.V)

Outcrop Gold, MRDDF, OCG.VRating: highly speculativeAnother speculative micro-cap, this one with properties in Colombia. One of these is contiguous to the highgrade mine of Continental Gold and is explored in a JV with NEM (since Zijn Mining has recently acquiredContinental, the JV is presumably with Zijn now – the new arrangement has not been made public yet). Thisstock was obliterated in the tax-loss selling season. There is no presentation, but here is a link to an overview ofthe company's projects (note: they also hold a royalty on a promising Canadian property).

MRDDF, Canadian chart (OCG.V)

Mirasol, MRZLF, MRZ.VRating: medium grade speculativeA project generator, holds several JV projects with major producers in Chile and Argentina. The stock was undera great deal of tax-loss selling pressure last year. There was quite a bit of open market insider buying close tocurrent prices - we see this as an indication that downside risk is probably limited Presentation (PDF).

MRZLF

Great Panther Silver, GPLRating: medium grade speculativeThis one is actually a producer – it had problems with a pit wall at its newly acquired gold mine in Peru, whichtriggered the sell-off (it takes time to fix this, and while the repairs are underway, production will be much lowerthan planned). The CEO bought quite a big chunk of shares in the open market in early December. This is themain reason for its inclusion, apart from the tax loss selling-inspired decline. Presentation (PDF).

GPL

Nevada Sunrise, NVSGF, NEV.V rating: highly speculativeA tiny market cap of less than $2m at the time of writing – it has a few lithium properties, but what is actuallyinteresting is its 20.9% stake in Liberty Gold's Kinsley Mountain project, which so far has returned the highestgrades of all Liberty projects. Liberty has just sold its 79% stake to Barrian (BARRF, see above), which meansone can now place a market value on the stake of NVSGF (it is worth ~$2.5m at present; drilling continues, sothe value is likely to grow). NVSGF also has water rights in Nevada in a region in which water rights are quitescarce - these have just survived a court challenge from a competitor and we have it on good authority that theyare worth substantially more than the official appraisal indicates. In fact, the water rights alone may well be worthmore than the company's entire market cap. There is no presentation, but here is a link to a company profile thatlists their properties.

NVSGF

Nexus Gold, NXXGF, NXS.VRating: highly speculativeAnother micro-cap stock, which holds an astonishing number of properties in West Africa and Canada. Nexus isstarting to monetize its properties via typical project generator contracts – here is a recent example (whichincidentally illustrates that the current market cap is quite low). The Canadian properties inter alia include landholdings in the Red Lake district right next to Premier's high grade discovery. This particular property is about tobe drilled as a follow-up to reconnaissance work undertaken in 2019 (Nexus has recently raised the funding).Drilling is always a bit of a gamble, but the Red Lake district is richly endowed with sizable high grade depositsand is known for being an occasional company-maker. The most successful example is Goldcorp (recentlybought out by NEM for $10 billion), which started out with a single Red Lake mine. The market cap of Nexusseems low even in the event that the Red Lake property turns out to be moose pasture (and chances that adiscovery will be made are actually not bad, judging from grab samples and trenching results to date andPremier's drill holes next door). There was a little bit of open market insider buying in December (the dollaramounts were modest). Link to presentation (PDF)

NXXGF

Canarc Resources, CRCUF, CCM.TO Rating: highly speculative (despite PEA-supported resource)Canarc was long dormant, but he company's chairman and founder Bradford Cooke of Endeavor Silver hasrecently installed new management and revived it. The company has completely reinvented itself again: thesedays it has three advanced high grade projects, one in the mountains near Juneau (Polaris) with about 1.1m ozat a grade of more than 12g/ton with ore reportedly amenable to BIOX treatment and supported by a fairlyconservative PEA. The project looks extremely robust at $1,300 gold; at $1,500 it should be a cash cow if isdeveloped. The remoteness of the deposit and the lack of road access have hampered development so far – thetrick will be to make it viable without having to build a road, which is why the possibility of using BIOX treatmentis good newa. Canarc has two more properties hosting a resource (another 1.1m oz) in Nevada, one of them(Fondaway) with strong recent drill results (recently farmed out for $4m in cash and a 2% NSR), plus ten earlystage properties in Nevada, another two in Canada, and $3.5 million in cash. This is actually not too shabby for amicro-cap. Eric Sprott, Brad Cooke, the Ruffer Fund and various HNW investors hold 40% of the shares. Thehigh share count may prompt a reverse split at some point, but probably not yet. Keep in mind that the companyhas a long history of disappointing expectations, but perhaps that will finally change under its new management. Link to presentation (PDF)

CRCUF

Silver Bull Resources, SVBLRating: highly speculativeThe company's high grade Sierra Mojada Silver-zinc-lead-copper deposit has been waiting to be developed formany years. Sometimes a high quality, high grade resource never gets funded to the extent required to build amine, and this is such a case. SVBL has finally taken a step that may bring the project to fruition: it has enteredinto a JV with South32 (a $25 billion mining giant). South32 can earn a 70% stake by contributing a total of $100million in funding in two stages (a $10 million exploration stage followed by a $90 million payment if it decides togo forward – see the presentations below for details). This remains a highly speculative investment as long as itis not certain whether South32 will decide to develop the mine, but recent exploration results have been highlyencouraging, as additional high grade ore was discovered. Link to corporate presentation (PDF), Link to technical report (Sierra Mojada project, PDF)

SVBL

Pacton Gold, PACXF, PAC.VRating: highly speculativePacton is a Red Lake and Pilbara explorer. Its main Red Lake property is next to Pure Gold's Madsen mine (ahigh grade mine currently in development, see below), to the South of Premier's Red Lake property and to theNorth of the Great Bear property where the high grade Dixie discovery was made (Great Bear has performedextremely well on the back of this discovery). Pacton's investment in Pilbara alluvial gold properties in Australiamay occasionally create hype (Novo Resources is the biggest player in the region and is hyped incessantly), butwe are inclined to discount this part of the company (mainly because we have no idea how to evaluate alluvialdeposits, which is why we have no opinion on Novo either. Clearly a number of companies see potential in thePilbara region, otherwise they would not explore it. Just to be clear about this: we are not saying there is novalue there, we are only saying that we don't understand it). For us Red Lake is where it's at and Pacton has thefunding for a drill campaign already lined up. Since it has not found anything yet, it is a highly speculative play,but Red Lake drilling campaigns are often crowned with success – generally it is never a bad idea to drill in aplace that is surrounded by high grade discoveries. We think the stock price already reflects a slight Red Lakepremium, so there is some risk if its drilling campaign fails to yield results; at the same time the premium is sosmall that it is not going to hold the stock back in the event of success. Link to presentation

PACXF

Mountain Boy Minerals, MBYMF, MTB.VRating: highly speculativeAn explorer in the Stewart Camp in the Golden Triangle, with its properties located between the Brucejack mine(PVG) and the Red Mountain project (about to be developed by Ascot). Being surrounded by high grade mines isobviously not a bad thing in this case either. Even better is that MB's properties contain “past producing mines”.That is where often the best discoveries are made these days, via application of modern exploration methods.And since neighboring Ascot is a “consolidator” in the southern portion of the Golden triangle, MB may well havea target painted on its back (MB incidentally holds more than 4 million Ascot shares which it received as paymentfor its 20% stake in the Silver Coin property; in other words, the company has also begun to implement aprospect generator strategy). Unfortunately the stock only trades by appointment in the US OTC market. Insiderbuying in the open market has been quite brisk recently. Link to presentation

MBYMF, MTB.V – Canadian chart

Sarama Resources, SRMMF, SWA.VRating: highly speculative+ The company has two large deposits in Burkina Faso with good grades (one of them with an inferred resource of2.1 million oz.) and a number of additional discoveries on its other properties in the region (scout drilling seemsto yield results every time). To keep capital costs low, a staged development is proposed with initial production ofoxide gold in a 100K oz. p.a. heap leach operation with very strong margins; the cash flows of this first stagewould then be used to expand the mine. This strikes us as quite a sensible approach. The company notes in itspresentation: "Company’s EV unmoved despite a raft of positive developments represents a mispricedopportunity". We agree; Teranga, SEMAFO and Endeavor are next door neighbors in the region, and Saramahas a very large land position pregnant with opportunities (see the drill results in the presentation). It has a JVwith SEMAFO as well. Silverlake Resources (Australia) is a large shareholder (Silverlake and Sarama insiderstogether hold more than 25% of the outstanding shares). Link to presentation (PDF)

SRMMF, SWA.V – Canadian chart

US Gold Corp, USAU Rating: medium grade speculativeUSAU has a Cu-Au project in Wyoming supported by a PEA with fairly robust economics. Potentially moreimportant it its large and highly prospective exploration project in Nevada. Much will depend on the success of itsexploration efforts there. The share float is quite low, which could provide an extra boost to the stock in the eventof positive news flow. Link to presentation (PDF)

USAU

Spanish Mountain Gold, SPAZF, SPA.VRating: medium grade speculativeA 4.1m. oz. low grade open pit resource (4.7m. with inferred ounces and still growing) with a PEA, currentlysubject to "de-risking work". The deposit would be viable even at relatively low gold prices, as all-in productioncosts are extremely low based on the existing PEA ($549/oz LOM average). The main problem is of course thecapital cost of developing a large open pit mine, but this can be mitigated by a phased approach as well (startingwith a 10,000 tpd operation and gradually increasing capacity to 40,000 tpd). Insiders were last seen buying alittle in August near current prices. Link to presentation (PDF)

SPAZF – SPA.V – Canadian chart

Sirios Resources, SIREF, SOI.VRating: medium grade speculativeA James Bay exploration company – it has found the high grade Cheechoo deposit which is neighboring theNewmont-Goldcorp Eleonore mine. Golden Valley/ GLVMF (see below) owns a 2.5% to 4% sliding royalty on theCheechoo property plus a 3% stake in Sirios. NEM holds 18.4% of SIREF's shares. Open market insider buyinghas picked up noticeably in December/January. Link to presentation (PDF)

SIREF, SOI.V – Canadian chart

Ely Gold, ELYGF, ELY.V Rating: medium grade speculativeA junior royalty company and prospect generator, which inter alia owns royalties on Wallbridge's Fenelon mine. Ittrades properties for equity stakes, royalties and work commitments. Sprott is a large shareholder. Note: this onehas not seen any tax-loss selling, as it has been rising all year, similar to other royalty stocks. It is a potentiallyinteresting speculation one might want to consider on a pullback. Note that two insiders have sold a little inNovember/December, as their warrants have gone well into the money. Link to presentation (PDF)

ELYGF

Coral Gold, CLHRF, CLH.V Rating: medium grade speculativeThe Robertson property is a Nevada mine development that was in limbo for a long time, until Coral sold it to theBarrick/Newmont Nevada Gold JV in exchange for a royalty agreement (a 1% to 2.25% sliding scale royalty) –and now a feasibility study and permitting is underway. Coral wholly owns three other Nevada properties nearRobertson and has a strong cash position (C$ 14m). It wasn't a tax loss selling victim either this year, we haveadded it to this list simply because we think it is interesting. A re-rating seems both deserved and overdue. Linkto the presentation (PDF)

CLHRF

Amarillo Gold, AGCBF, AGC.VRating: conservative-Amarillo is developing a mine in Brazil supported by a BFS indicating very robust economics – the stock is quitecheap considering the NPV and outstanding IRR of the project. Royal Gold has bought a 1.75% NSR on themine, E. Sprott is also a significant investor (file under “strong endorsement”). The CEO was a regular buyer ofthe stock in the open market in November-December. Link to presentation (PDF)

AGCBF

High quality exploration/development/junior producer stocks (* means there was no tax-loss selling)

Liberty Gold*, LGTDF, LGD.TORating: medium grade speculative to conservatively exciting...The successor company of Fronteer Gold, which was bought out by NEM for $2 billion for its Long Canyonproject in Nevada. At the time of the Fronteer takeover, all of Fronteer's assets apart from Long Canyon werespun out to shareholders in a separate company, then named Pilot Gold and later renamed Liberty Gold. Theseassets included Fronteer's noteworthy discoveries in Turkey which it held in a JV with Teck Resources, as wellas several lesser properties in the US. This provided a strong enough foundation for management to continuewhere it had left off. Liberty's management was (and remains) the main attraction from our perspective. Aftermaking a few respectable, but ultimately minor discoveries here and there, the company finally struck gold (bothliterally and figuratively) in 2018-2019. At one point Liberty's 79% stake in Kinsley Mountain seemed to be itsmost promising asset, but that has in the meantime changed. Two other properties (one of which the companypurchased for a song on the advice of one of its geologists) are shaping up to be the kind of elephantine goldsystems likely to be snapped up by a major at some point. Liberty is implementing the same strategy it already employed in the Fronteer era, i.e., it is monetizing its non-core assets, which helps minimize future dilution, as drilling can be financed from internal sources (this year itsold its 40% stake in the Haligala JV in Turkey for $22m; its 79% stake in Kinsley to Barrian for $7.5m + 3mpost-consolidation Barrian shares + a 1% NSR; its net profit interest in Regent Hill to Ely Gold for $800K and 2mEly warrants; its Griffon property in Nevada to Fremont Gold for $325K + 2.5m Fremont shares + a 1% NSR + asmany additional Fremont shares as necessary to bring Liberty's total stake in Fremont's equity to 9.9%). The two properties Liberty is now focusing on were both past producing mines (as noted above, these are oftensurprisingly rich target-rich environments). There is already a PEA out for the Gold Strike property in Utah,referencing a 1.22m oz resource (indicated & inferred) of oxide gold with excellent gold recoveries – and most ofthe property is not even drilled yet. Meanwhile, the Black Pine property in Idaho (the aforementioned “bought fora song” project) is beginning to look like an exceptionally exciting prospect. 650,000 ounces were mined from itby Pegasus Gold from five small pits before Pegasus kicked the bucket, and as it turns out, the old-timers left alot of gold in the ground (they should have drilled a little deeper). Historical gold recoveries were very poor (65%LOM), but Liberty has already ascertained that it can improve on them significantly (up to 87.4%). So far the drill results indicate that Black Pine is a veritable fount of high grade oxide gold from near surface overnotable widths and an ever expanding strike length with excellent continuity. To this it should be noted that goldhosted in oxidized rocks is very easy to mine and cheap to treat by heap leaching. What constitutes high gradein this type of host rock is different from what constitutes high grade in sulfide at deeper levels. For example,Kinross mines ore grades ranging from 0.27 g/t to 0.45 g/t at its large open pit Paracatu mine in Brazil at aproduction cost of just $629/oz. Even a mine with such obviously uninspiring grades can be a formidable cashcow provided it is home to cheap-to-extract close-to-surface oxide gold. By and large the strong rise in the gold price last year has completely failed to inspire gold exploration stocks.But Liberty's stock has taken off in the wake of its favorable news flow. It is therefore no longer really cheap, butthere is a lot more news flow to come from its drilling programs and it may well turn out to be the second comingof Fronteer. There was noteworthy open market insider buying in August and September and again in lateNovember to early December, which is to say insiders resumed their purchases late last year despite the strongadvance in the stock price. We consider this a strong vote of confidence. Link to presentation (PDF)

LGDTF – in early December there was still insider buying in the public markets. Insiders hold 6.6% of the shares,NEM holds 6.7%, Teck Resources holds 3.8%. We haven't really thought about a target yet (there is no hurryand much will depend on information yet to come).

Pure Gold*, LRTNF, PGM.VRating: conservative+Pure Gold's Madsen mine in Red Lake Camp is now fully funded and in development – it is the highest gradegold mine currently being built in Canada. Anglogold, E. Sprott and Rob McEwen are large shareholders. Andwouldn't you know – it was a past producing mine (once again the old-timers didn't drill deep enough). Madsenhas expansion potential well beyond the operation that is currently developed. Link to presentation (PDF)

LRTNF – since this one is not a tax-loss selling victim, we decided to show a weekly chart – as noted in theannotation, the lengthy sideways consolidation combined with the current breakout attempt are quite interesting.A move out of such a large base could be sizable. As with Liberty, we have not thought about a target yet...

Metalla Royalties*, MTA, MTA.VRating: conservative+Metalla Royalties and Streaming is one of a handful of listed junior royalty companies. It has been one of thebest performing gold royalty stocks since its inception. CDE and AGI (whose royalty portfolios Metalla bought)are large shareholders (15.6% and 6.1%, respectively). It has sizable portfolio, with a decent mix of producing,development and exploration assets (split: 2/15/28; the development pipeline will provide a sizable boost toearnings in coming years). It has seen quite a bit of insider buying in 2019. Link to presentation (PDF)

MTAFD

Golden Valley Mines*, GLVMF, GZZ.VRating: conservative+Golden Valley is owns 45% of Abitibi Royalties, a dividend-paying company that holds several royalties on thegiant Canadian Malartic mine, a JV between AEM and AUY Gold. This stake is currently worth C$101.8 million.(note: Abitibi has a portfolio of 28 royalties, $44m in cash and is buying back shares to boot). Meanwhile, themarket cap of GLVMF is not even C$70 million – and it also owns 31% of Val d'Or Mining, an explorer to which ithas farmed out 61 properties while retaining NSRs, 16.5% of International Prospect Ventures (a large propertyholder/ explorer in the Pilbara region), 3% of Sirios and a sliding scale royalty on its high grade Cheechoodiscovery and JV/ farm-out agreements with Bonterra and Alexandria. Insiders hold almost 30% of GLVMF. Link to presentation (PDF) Abitibi Royalties presentation (PDF)

A performance comparison between parent GLVMF and subsidiary ATBYF – Golden Valley is a very cheap wayof investing in Abitibi Royalties - with extras. Abitibi has actually been the best-performing gold stock in the worldsince 2014.

GLVMF – Canadian chart (GZZ.V) – obviously not a tax-loss selling victim this year either, but the stock is stillcheap relative to the value of its equity holdings despite the recent rally.

Premier Gold, PIRGF, PG.TORating: conservative+ Premier Gold is a junior producer. It makes our list because it has not performed very well this year, but is in theprocess of growing its production significantly and is poised to deliver a raft of exploration and developmentnews in the coming year. Premier is inter alia exploring a Red Lake property where it has already defined anopen-pittable low-grade resource, next to which it drilled a few holes with very high grades over large widths. It isalso developing mines in JV with Barrick/Nevada Gold and Centerra Link to presentation (PDF)

PIRGF

Orezone, ORZCF, ORE.VRating: conservative-Orezone owns the large Bombore project in Burkina Faso, which is supported by a BFS that plans for stageddevelopment of the mine to keep capital costs low. Initially oxide gold will be mined which will be graduallyreplaced by higher grade sulfide ore after the stage 2 expansion. Similar to other mines in the region, all-in costswill be at the low end of the industry cost curve. Financing discussions are underway. We mainly include it herebecause insiders have been buying the stock in the open market all year long, even when it traded at its annualhigh. Link to presentation (PDF)

ORZCF

Osisko Metals, OMZNF, OM.V (zinc)Rating: conservative-Osisko Metals is exploring a high grade zinc deposit in Canada. We mainly include it because insiders havebeen heavy buyers of the stock all year long as well and it has clearly suffered from tax-loss selling late in theyear. Besides, we believe zinc is poised to rise (generally industrial metals will tend to follow gold prices with alag. As an aside to this, base metal inventories at the LME have dwindled to multi-year lows in 2019). Link to presentation (PDF)

OMZNF, Canadian chart (OM.V)

In closing, we want to stress that all stocks on this list are very risky and highly volatile – that is in the nature ofexploration and small cap junior mining stocks. The list should be seen as a collection of ideas that givesreaders a basis for doing their own due diligence and decide what to do based on their own risk tolerance andinvestment/trading goals. We believe as a rule it is best to broadly diversify in this sub-sector, as historicallymany exploration companies turn out to be duds, while only a handful become very big winners. And although itis possible to improve one's chances by means of research (keeping an eye on good management teams,reading technical reports and studies, looking closely at drill results, financial statements, etc., etc.), luck plays avery big role in exploration.

We could have made a much longer list, but we decided to confine it to stocks that we thought are bothinteresting and clearly suffered from tax loss selling this year, plus a few stocks that represent exceptionally goodquality in our opinion (whether they represent good value or whether they will actually succeed is a differentquestion – we hope they do, but cannot make any promises with respect to that).

Ratings: None of these stocks can be called conservative investments, but even though they are all quite risky,there are differences, which the “ratings” are supposed to reflect. Take them with a grain of salt (the same goesfor technical price targets). Anyway, to briefly explain the methodology, if one can call it that: The “conservative” rating requires at the very least a proven deposit in a mining-friendly jurisdiction with a PEAindicating strong economic viability. In some cases this is not enough, particularly when funding is highlyuncertain or other obstacles are evident. The +/- indication is used to make the ratings slightly more granular.E.g. a fully funded mine development, profitable production or regular royalty income earn a “+”. The “-” indicatesthat we believe a mine will eventually be built, but there remains considerable uncertainty. “Highly speculative”indicates there is little more than a hunch that a discovery may be made or that one that has been made willeventually prove to be economically viable, while “medium grade speculative” is obviously in between the twoextremes (i.e., there is more than just a hunch, but a lot of uncertainty remains).

Disclaimer:We are not investment advisors. The material in this PDF document is for information and discussion purposesonly. It does not constitute investment advice or an offer or recommendation to buy, sell, subscribe to or invest inany securities. The information contained herein has been prepared using sources we consider to be reliable,however, it is subject to change and we cannot guarantee that the information is indeed accurate. Readers areencouraged to do their own due diligence and consult with their professional financial advisors before acting onany of this information. Any action readers may take as a result of information presented herein is their ownresponsibility. We receive no compensation from any of the companies mentioned in this document, but we dotrade in stocks in the sector, including those on this list.