Belo Sun Mining

No change in view here relative to last month.

Well, well, well. BSX put out an update a week ago on a Saturday saying that its permits to construct the Volta Grande gold mine were upheld after all. The stock had a huge move when the markets opened on Tuesday after the holiday and momentum continued all week with tens of millions of shares trading and the stock rising to the $1.10 range. This is why sometimes you just get to a comfortable position size and sit on your hands. I actually added back to my position on the open after the news because I view this as one of the most attractive development gold projects out there – with a combination of both large scale and high grade – which makes for high returns at pretty much any gold price. BSX's project can still be the subject of appeals, but with such an experienced team and high-quality backers, I think this gets done in time. A move like the one BSX had on the back of that court decision is why we had a "golden slice" on BSX and with that event now behind us, we've taken the golden slice away, but I remain long. Anyone who was long before that news is now sitting on a substantial profit, so I wouldn't blame anyone for selling enough stock to get their cost base to zero and then riding the balance as a "free" position here. Could there be more twists and turns to the story? You bet. Is BSX a take-out target? You bet. How it all plays out is beyond the scope of my crystal ball, but the NPV of this project at $3000-4000 gold (i.e., $1000-2000/ounce lower than current prices) will still be in the low-multi-billions, so call me an interested speculator. With so much money at stake there's plenty to go around for shareholders and local communities alike.

This has quietly marched higher to the 50c range and it's still very cheap relative to what today's NAV would be, even at gold prices $2000/oz lower than here. With so much money on the table, I think that the permitting roadblocks get solved here.

Any company that buys this asset will likely do very well with it. The backing of mining-powerhouse La Mancha, who owns nearly 20% of the stock, is not insignificant in my view in terms of the clout that it brings into BSX's corner.

No change in view here. This is a multi-bagger if permitting roadblocks are cleared.

Belo Sun is a good follow-on to GRO in that it is another fallen angel in Brazil. Once upon a time, BSX was well-followed and well-owned until apathy towards gold stocks combined with some permitting friction/uncertainty took it off of the radars of all but the most stalwart mining investors. With 3.8 million ounces of gold in the proven and probable reserve categories at its Volta Grande project, out of a global resource of some 7 million ounces, BSX has great scale. It also has great economics. At $1200/oz gold, the Volta Grande project was highly economic as detailed in a March 2015 feasibility study… at $2500 gold I suspect that the project NPV would approach $2B or more. Gold is currently over $4000/oz, so think about that for a minute. The market cap of BSX today is $160 million — and while it has moved up from its "dead to the world" (i.e., could-be-had-for-a-nickel) levels of late 2024, this could still go way, way higher if its permitting headwinds are resolved. To that end, a highly experienced group of board members joined the company in June 2025, bringing deep Brazilian legal and permitting experience, along with industry connections to Franco Nevada and the La Mancha group. La Mancha is a very well regarded mining group and became a 17% shareholder in BSX earlier this year. Hmmmm. Things are percolating here and if the permitting roadblocks are cleared, BSX could have a massive re-rate. I typically don't like betting on permitting, but with the recent high-quality board additions and the valuation discount relative to the potential project NPV — at gold prices much lower than current levels — this is a name where I want to have exposure, just in case. I manage my risk through position size.