July 2025 | [Live Tracking Sheet](https://docs.google.com/spreadsheets/d/1LjNmL3As0SlmZOXk1g6AHwIanMLN21qPc9vBzW44-1g/edit?usp=sharing) ## North Star I'm building a gold and copper-focused portfolio that delivers deep value and asymmetric upside. I want to own real assets that generate free cash flow and offer massive leverage to a sustained move in gold. At the same time, I want to protect downside risk by favoring low-cost producers, strong balance sheets, and credible jurisdictions. I believe most institutional investors are still pricing gold equities based on backward-looking price decks ($1,800–$2,200/oz), while gold has already re-rated to a new regime. The current spot price of $3,351.25 changes everything. This thesis is designed to reflect that. See: [[Gold Equity Valuation vs Spot Price Regime]] ## Portfolio Architecture I'm dividing the portfolio into 5 segments, each serving a distinct role: ### Segment Overview | Segment | Purpose | |--------------------------|---------------------------------------------------------------| | **Core Producers** | Stable, low-cost miners generating strong free cash flow | | **Mid-Cap Leverage** | Growing producers with operational leverage to gold price | | **Developers / Optionality** | Pre-production or long-dated projects with 2–4x NAV potential | | **Royalties / Streaming** | High-margin cash flow with limited operating risk | | **Copper / Diversified Hedge** | Exposure to copper as a parallel inflation/infrastructure play | --- ## Portfolio Allocation | Segment | Weight | Holdings & Allocation | | ------------------------ | ------ | ---------------------------------------------------------------------------------------- | | Core Producers | 25% | Newmont (NEM) 10%, Agnico Eagle (AEM) 10%, Kinross (KGC) 5% | | Mid-Cap Leverage | 27.5% | Equinox (EQX) 10%, B2Gold (BTG) 7.5%, Alamos (AGI) 7.5%, Osisko Gold Royalties (OR) 2.5% | | Developers / Optionality | 30% | Artemis Gold (ARTG) 10%, G Mining (GMINF) 5%, Seabridge (SA) 7.5%, NovaGold (NG) 7.5% | | Royalties / Streaming | 5% | Franco-Nevada (FNV) 3%, EMX Royalties (EMX) 2% | | Copper / Hedge | 10% | BHP 7.5%, Lundin Mining (LUNMF) 2.5% | | Silver Overlay | 2.5% | iShares Silver Trust (SLV) or equivalent | ## Position-Level Commentary ### Core Producers – 25% These are large, low-cost, cash-generating gold miners operating across multiple jurisdictions. They form the **foundation of portfolio stability**, providing steady free cash flow and balance sheet resilience in any gold environment. Their margins expand significantly in this regime, but they’re not dependent on it to survive. - **Newmont (NEM)** Now the world’s largest gold miner following its acquisition of Newcrest. Management is targeting $500 million in annual synergies and a clear deleveraging path post-integration. Exposure spans the Americas, Australia, and PNG, with deep reserve life. Historically held by Paulson & Co. and a bellwether for institutional gold allocations. - **Agnico Eagle Mines (AEM)** A top-tier operator with 100% OECD exposure and consistent execution. Assets in Canada (Detour, Meliadine, and Canadian Malartic JV) offer scale, longevity, and high-margin production. Sub-$1,050/oz [[AISC]] gives it cost-curve defensiveness. Institutional ownership includes VanEck, Tocqueville, and major Canadian pension funds. - **Kinross Gold (KGC)** One of the few mid-tier producers with both strong FCF and upside from undeveloped assets. Great Bear in Ontario could be a generational project, though current value is anchored in Tasiast (Mauritania) and La Coipa (Chile). Trades at a discount to NAV due to perceived jurisdictional risk. I hold a small weight to maintain exposure while capping geopolitical downside. ### Mid-Cap Leverage – 27.5% Mid-cap names typically rerate faster when gold prices rise. They have smaller production bases, so new mine builds and expansions can dramatically boost free cash flow and valuations. In this portfolio, they provide both **growth torque and operational upside**. - **Equinox (EQX)** Greenstone is nearing first gold. The company has historically had higher costs (~$1,600 AISC), but at $3,351 gold, the margin is enormous. John Paulson holds a sizable stake. Execution on Greenstone and Valentine will determine re-rating speed. - **B2Gold (BTG)** Known for its dividend and capital discipline. The Goose project in Nunavut starts production in mid-2025. Exposure to Mali introduces jurisdictional risk, but the combination of Canadian growth and current cash flow makes it compelling. - **Alamos Gold (AGI)** Debt-free and expanding production. AISC is trending below $900/oz, and the company is growing organically through La Yaqui Grande and Lynn Lake. Operates primarily in Canada and Mexico, offering jurisdictional stability. - **Osisko Gold Royalties (OR)** A royalty/streaming hybrid with a core focus on Canada and the USA. Offers embedded optionality via long-life royalties on projects like Canadian Malartic, Windfall, and Upper Beaver. Trades at a discount to peers like FNV and WPM, providing valuation upside. Adds defensiveness without sacrificing leverage to higher gold prices. ### Developers / Optionality – 30% This sleeve holds the **highest asymmetry** in the portfolio. These companies aren’t producing yet, but with gold at $3,351, their assets are already deeply in the money. Most trade at **0.3–0.5x NAV**, and a move to production or partnership could unlock **2–4x upside**. - **Artemis Gold (ARTG)** Blackwater Phase 1 is on track for first gold in Q4 2024. With projected AISC below $750/oz and scalable Phase 2 upside, it could become one of Canada’s most profitable new mines. Backed by institutions like Beutel Goodman and anchored in a top jurisdiction. - **G Mining Ventures (GMINF)** Tocantinzinho (TZ) is advancing on time and on budget in Pará, Brazil. This is a fully funded, high-margin project trading at less than 0.5x NAV. ESG-aligned community development adds social license strength. First gold expected in 2026. - **Seabridge Gold (SA)** KSM is one of the largest undeveloped gold-copper projects globally, now protected by “Substantially Started” designation in British Columbia. The scale is enormous, but the timeline is long. A strategic partner or acquisition could crystallize value. Held by Paulson & Co. - **NovaGold (NG)** Donlin is a high-grade, open-pit mega-deposit in Alaska with Barrick as JV partner. A feasibility update is expected in 2025. Still trading at a fraction of its potential NAV. Paulson & Co. owns over 10% — this is a pure long-dated call option on gold and project execution. ### Royalties / Streaming – 5% This segment provides **non-operational exposure to gold prices** with structural cash flow, limited cost inflation risk, and downside protection. - **Franco-Nevada (FNV)** The industry benchmark for royalty companies. Produces 80–85% cash margins with broad jurisdictional and asset diversification. While it won’t match producers in upside torque, it stabilizes the portfolio and ensures cash flow in all price environments. Held small for balance. - **EMX Royalties (EMX)** Provides diversified royalty exposure across copper, gold, and silver assets globally. Smaller than FNV but with more embedded optionality. Includes exposure to Eurasian deposits, giving it non-dollar and multi-metal leverage. Added to diversify royalty sleeve and incorporate base/silver optionality. ### Copper / Hedge – 10% This sleeve provides **hard-asset exposure beyond gold**, positioning for rising copper demand from electrification, infrastructure, and inflationary supply constraints. Also acts as a macro hedge in a commodity supercycle scenario. - **BHP** One of the world’s largest diversified miners, with world-class copper, iron ore, and met coal assets. High FCF and strong balance sheet make it a core inflation hedge. Adds real asset ballast to the portfolio. - **Lundin Mining (LUNMF)** A mid-tier copper miner with torque through operational leverage. Expansion at Caserones and Candelaria positions it for volume growth, and its production base provides beta to rising copper prices. ### Silver Overlay – 2.5% While not a pure gold play, silver is increasingly relevant in a rising metals environment—benefiting from both monetary debasement and industrial use cases. This sleeve provides a hedge against over-concentration in gold beta while maintaining hard asset exposure. - **iShares Silver Trust (SLV)** A simple, liquid way to get physical silver exposure. Low tracking error and ideal for passive silver allocation. --- ## Stress Test: 1-Year Forward Value from $1,000 Invested Today | Scenario | Gold Price (1 year from now) | Estimated Portfolio Value | Explanation | | ------------- | ---------------------------- | ------------------------- | --------------------------------------------------------------------------------------------------------------------------------------- | | **Bear Case** | $2,200 | **$650 – $750** | Developers and mid-caps compress sharply; producers remain profitable, but re-rate downward. Royalties and copper provide some cushion. | | **Base Case** | $2,600 | **$950 – $1,050** | Portfolio roughly holds value. Developers stabilize near 0.5–0.6x NAV, FCF from core expands. Mid-caps stay cash-flow positive. | | **Bull Case** | $4,000 | **$1,800 – $2,300** | Optionality re-rates dramatically. NG, SA, ARTG double or triple. Mid-caps expand to 1.5x NAV. Copper likely >$5/lb adds further beta. | ## Institutional Ownership Highlights I like checking whether specific funds / institutions own / bet against the equities in my portfolios. I do this through evaluating the 13F filings and DataRoma. | Company | Hedge Fund / Institutional Ownership Notes | | -------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------- | | NEM | Paulson & Co., Van Eck, Christopher Bloomstran - Semper Augustus, First Eagle Investment Management, Harry Burn - Sound Shore | | AEM | Tocqueville, Van Eck, First Eagle Investment Management | | EQX | Paulson & Co. | | SA | Paulson & Co. | | NG | Paulson & Co. (10%+ position) | | AGI | Lee Ainslie - Maverick Capital, First Eagle Investment Management | | FNV | Prem Watsa - Fairfax Financial Holdings, First Eagle Investment Management, Thomas Gayner - Markel Group | | KGC | Christopher Bloomstran - Semper Augustus, First Eagle Investment Management | | BTG | First Eagle Investment ManagementM Sarah Ketterer - Causeway Capital Management | | OR, ARTG, GMINF, SA/NG, BHP, LUNMF, SLV, EMX | - | ## Factor Exposure Snapshot | Factor | Portfolio Exposure | Comments | | ------------------------- | -------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------- | | **Gold Price Beta** | **High (~1.45)** | Developers and mid-caps now make up ~58% of the portfolio. These names rerate faster in a rising gold environment. Producers provide FCF stability. | | **Copper Price Beta** | **Moderate (~0.30)** | BHP and Lundin offer leverage to copper's long-term structural tailwinds. SA and KSM add secondary copper exposure through gold projects. | | **Inflation Sensitivity** | **Moderate-High** | Portfolio is built around hard assets. Royalties (FNV, OR) and low-AISC producers reduce exposure to cost creep. Developers benefit from real asset repricing. | | **Geopolitical Risk** | **Moderate** | ~62% OECD exposure. Risks concentrated in Mali (BTG), PNG (NEM), and Pará (GMIN). Balanced by strong Canadian weighting (AEM, AGI, ARTG). | | **Liquidity Risk** | **Low-Moderate** | All tickers are listed and tradable, but GMIN, ARTG, NG can be illiquid in size. Use limit orders and avoid single-day position changes. | | **Operational Leverage** | **High** | Most developers and mid-cap growth names (EQX, BTG, ARTG, NG) are positioned for volume expansion and NAV rerating. | | **Regulatory Risk** | **Low-Moderate** | Jurisdictional safety is strong in core producers and royalties. Isolated project-level risk remains in BC (SA), Brazil (GMIN), and PNG (NEM). | ### Portfolio-Weighted AISC Estimate - **Average [[AISC]]**: **~US$1,070/oz** This is calculated by weighting reported AISC from the producers and near-term developers: - Core producers (AEM, NEM): $1,050–1,150 - Mid-caps: ranges from $950 (AGI) to $1,600+ (EQX) - Developers (ARTG, GMIN): guided below $800 - Royalties (FNV): structurally low (sub-$600 equivalent) - > Implication: At a gold price of **$3,351.25**, the portfolio enjoys an average margin of **$2,280/oz**, enabling capital reinvestment, debt reduction, and shareholder distributions. ## What Success Looks Like I expect the portfolio to deliver: - High double-digit IRRs even if gold trades flat around $3,300 - Optionality re-ratings of 2–4x on NG, SA, ARTG - Free cash flow compounding from AEM, AGI, EQX - Structural hedge against fiat erosion and policy failure ## What Would Make Me Rethink - Gold drops below $2,400 and stays there for multiple quarters - Developers fail to re-rate to at least 0.7x NAV despite strong gold - Cost inflation outpaces revenue expansion materially (e.g. >$1,300 AISC across portfolio) See: [[Price Checkpoints & Stop-Losses – Gold & Copper Portfolio]] ## Conclusion This isn’t a passive bet on gold. It’s a targeted portfolio built to extract real value from a repriced gold environment. Every name earns its place. Every position has a job. I'm not interested in broad exposure. I want torque, cash flow, and asymmetric payoff if this regime continues — and protection if it doesn’t. --- ## Disclaimer This document is for informational and educational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any securities or financial instruments. The views expressed are based on personal research and opinion, and may not reflect the views of any financial institution or advisory firm. All investments involve risk, including the risk of loss of principal. Past performance is not indicative of future results. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions. The author holds personal positions in some of the securities discussed and may change those positions at any time without notice. All data is believed to be accurate at the time of writing but is not guaranteed to be complete or current. Market conditions, prices, and forecasts are subject to change.