Equinox Partners, L.P. - Q1 2001 Letter

Dear Partners and Friends,

Performance

In the past two quarters, Equinox’s outsized short position in technology stocks was quite profitable, as were our shorts in troubled and fraudulent businesses. Other short positions, in many cases serving as refuge for frightened growth stock investors, have only recently become profitable.

On the long side of Equinox’s portfolio, one of our contrarian stock themes has performed well. From their lows last spring, our domestic tobacco stocks have almost tripled. Though the cigarette litigation environment is perceived to have improved (despite industry’s actual loss of the largest product liability suit in history in a local Florida court), the main source of strength for these stocks, beyond their record low valuations, has been their defensive nature. By serving as a refuge for nervous equity investors, even the tobacco businesses’ valuations are still a function of the “New Economic Paradigm”—only this time in reverse.

Our other “contrarian” longs, comprising the bulk of our portfolio, have not made money for Equinox in recent quarters. For example, our energy shares have yet to meaningfully respond to the startling increase in the price of scarce North American natural gas. And despite the U.S. stock market and economic setbacks the dollar has retained its phenomenal luster, causing our forsaken precious metals investments to retain most of that distinction. In addition to our deeply undervalued Asian companies, other potential beneficiaries of a dollar decline are our small but growing long positions in undervalued European businesses. As European markets follow the U.S. lower, we are just beginning to find Equinox-like bargains on that continent.

The initial revalution of worldwide equities, both up and down, has proceeded with a surprisingly measured pace. The global bear market in technology and telecom stocks, while severe, has been orderly so far. While this has proved frustrating to our efforts to leverage our short portfolio with puts, it does provide us with multiple opportunities to change the mix of our shorts and to revisit those sectors which “bounce.” The continuing infatuation with technology companies is also providing us with multiple opportunities to own deeply discounted long positions that have been out of favor during the earlier manic phase.

“All the Kings Horses and All the Kings Men…” The Mania at the First Anniversary of Its Peak

The graph below provides a long-term snapshot of the trajectory of the incredible stock market mania that dominated world markets during the 1990’s. This is because the level of margin borrowing is both a cause and effect of stock market speculation.

Customer Margin Debt as of February 2001

Because of our unassailable confidence in our bottom-up value investment strategy, Equinox’s investment fate was to be the mirror image of this mania. Well aware of the asymmetry of short selling, but thinking that the parabolic rise of equity valuations could not continue, (Greenspan’s “irrational exuberance” speech was in December, 1996) we consciously bet against this trend. But the mania intensified still further, peaking only one year ago.

Although American stocks remain volatile (e.g. in January of this year Cisco Systems’ stock market capitalization swung $65 billion in one day-- three times the company’s annual sales!), it seems apparent that the extraordinary surge pictured above has finally passed its crest. We believe the demise of the 1990’s Humpty Dumpty stock market is not only irreversible but has much further to go.

Our assertion that the reversal of the 1990’s manic valuation anomalies is far from over rests on two fundamental premises:

1. Valuation The valuation extremes of the preceding bull market require a considerable further decline to reestablish even normal, let alone bargain, valuations. Consider the P/E for the American NASDAQ index. Despite its significant decline, the most recent estimate we have seen suggests the Over-the-Counter market is still selling for 150 times declining net income. This astronomically high multiple is only a “bargain” in comparison to its peak multiple a year ago—400 times! Broader U.S. indices still sell for richer valuations than those in the summer of 1929. To state the obvious, the reason that stocks are still significantly overpriced at these lower levels is that they were so incredibly overpriced at the peak.

This is not to say that global stock markets can not rally. Indeed, bear market rallies are notoriously sharp. The restructuring of Equinox’s short portfolio, as described below, has substantially reduce the risk from our short side.

2. Economic Our second reason for believing the domestic stock market correction has further to run, involves future economic performance. We are referring to the vulnerability of the global economy as a result of the previous extremes of the boom times (e.g. double-digit nominal GDP growth in the U.S.). Those extremes developed as a function of the self-reinforcing nature of economic behavior that George Soros calls “reflexivity.” The unprecedented 1990’s boom was especially reflexive. From momentum investing to the underinvestment in energy that resulted from the massive overinvestment in technology, examples of this phenomenon abound. And as the “New Economic Paradigm” fed on itself on the way up, it probably will do likewise on the way down, thereby exaggerating the ultimate economic decline.

U.S. Savings Rate as Percentage of Disposable Income Thru February 2001

Consider the dramatic decline in the proportion of their income that Americans save as pictured above. To our knowledge, there has never been a similar example of an increase in the propensity to borrow and spend. During the 1990’s credit card debt per household almost tripled. And Americans’ practice of borrowing and spending the equity in their homes has lowered the homeowners’ “equity cushion” to the lowest ever, despite monthly mortgage repayment and rising house prices. Our local Citibank branch has just started advertising, “There’s got to be at least $25,000 hidden in your house. We can help you find it.” As Fortune magazine (April 2, 2001) notes in a recent article on US consumer confidence:

“Right now, the refinancings and the cash-outs are buoying the economy because they give consumers more cash to burn. As Zandi(an economist) notes, ‘the refinancing wave could very well turn out to be instrumental in forestalling a more severe economic downturn.’ But he and other economists also see a darker side. By increasing their mortgage debt, writes Zandi, ‘cash-out re-fiers are weakening their balance sheets, making them more vulnerable to future financial problems.”

We do not think the dramatic drop in the savings rate is simply coincidental with the greatest stock market expansion of all time. If indeed the equity wealth effect caused the spending boom in the U.S., what does the decline in stock prices imply for future consumer spending? If reflexivity functions in reverse, consumer spending could drop precipitously (though consumer confidence has declined, the savings rate was still declining as recently as February of this year). In the future increasing unemployment, caused by companies trying to reestablish their past profitability, might cause heavily leveraged American consumers to spend less and fail to meet some of their debt service payments. Many stocks that should be adversely affected by these trends have yet to decline from their recent high valuations. Equinox has added such companies to our short exposure.

The “Seesaw Stock Market”: Equinox Broadens its Short Portfolio

Dow Jones down, NASDAQ up. NASDAQ down, Dow Jones up. In 1999 and early 2000, the old-fashioned Dow Jones Industrial Index declined while tech stocks soared. However, from the peak in tech stock speculation a year ago, America’s “seesaw stock market” (sector rotational investing) gave its tech-stock passengers a very unpleasant ride. It also provided Equinox with three successive quarters of escalating profits derived from our very outsized shorts in these companies. But the locus of the U.S. bear market was, until March 2001, essentially confined to the heretofore-sacrosanct tech/telecom sector. Few realize that the S&P 500 index, ex-technology stocks, hit an all time high at the end of last year.

The “seesaw” U.S. stock market has been a function of investors’ unshakeable confidence that the stock market provides superior returns in the long run. Never mind that this shibboleth is not necessarily accurate (It took the Dow Jones Industrials a quarter century to regain its levels of the late 1920’s, and in the last decade, Japanese stocks have lost two-thirds of their value). As “buying the dips” of “New Economy” shares has become a formula for compounding losses, Americans switched to buying “Old Economy” shares last year. Even during a week in mid-March of this year New York Stock Exchange New Highs prevailed over New Lows by an impressive ratio of 6:1.

Most investors are not aware of the speculative valuations of many non-technology shares. Though not as egregious as the tech mania, many popular large companies are, and have been for some time, selling for multiples of sensible valuations in the boom years of the U.S. economy, let alone in the recessionary environs of today. Recall what the massive dollar inflow into index funds during most of the late 1990’s did to the valuations of S & P 500 companies. For years, U.S. investors enjoyed extraordinary returns by purchasing mutual funds that were indexed to the S & P 500 index. This practice waned as the dot-com “investment” performance superceded even the self-reinforcing rich returns of index fund speculation. Nonetheless, trillions of mutual fund dollars remain lodged in this “passive” investment strategy and those that mimic it. We think that the recent initial net redemptions of index mutual funds represents an important straw-in-the-wind in the development of the domestic bear market.

Monthly Net New Cash Flowing into S&P 500 Index Funds

(in billions)

Equinox has made a lot of money shorting technology shares. However, because of expensive non-tech stocks and a declining global economy, Equinox has altered our short portfolio by significantly broadening our exposure to overvalued domestic stocks. Although we are not of the opinion that technology shares are reasonably valued at these much lower prices, we have covered most of these shorts to make room for a broader array of shorts. We have identified other overpriced shares in businesses (financial and retail) and locals (California) that will be impacted by the stock market decline and the slowing of the U.S. economy. The recent appreciation of these shares provides Equinox with a “second bite of the short apple.”

America’s Emerging Energy Shortage

The sexier part of America’s emerging energy shortfall story, electricity, has become highly visible. Bankruptcies and blackouts in California this past winter are front-page news. But the real trouble for the world’s sixth largest economy is likely to strike this summer, traditionally the season of peak electrical demand. In addition, the East Coast may suffer a long, hot summer this year because of a similar shortage (we only avoided blackouts last year because the summer was one of the coolest on record). It is unlikely that the sharp contraction of the investment banking business will remain the only economic problem the Big Apple faces this summer.

While the business of constructing new electrical generating capacity has spawned “New Economy” stock valuations, the companies that will provide the fuel for these new plants, natural gas, remain at the lowest valuations in the industry’s history. Since our last letter, the evolution of investor sentiment towards the energy sector is reflected in Morgan Stanely’s late February “Strategy and Economics” memo:

“As gas and oil prices have remained elevated, the (investor) consensus has taken an aggressively skeptical stance regarding energy stocks—much more so than any other S & P 500 sector. … Expectations for massively reduced second-half energy earnings are all the more notable as the sector is one of only two (with utilities) that is still experiencing more upward than downward (earnings) revisions. … In a market that has fought the concept of reversion to the mean at every turn, the energy sector stands out for how aggressively investors now expect things to revert to the perceived norms (e.g. lower oil and gas prices).”

The low energy prices implied by the record low energy stock valuations seem to incorporate the view that higher prices lead to an economic contraction, which leads back to low energy prices. The circularity of the pessimistic rationale neglects the supply side of the price equation. We believe OPEC’s new found supply resolve recognizes the fact that world oil production is near capacity. But North American natural gas has a unique supply constraint, gas well decline rates in excess of 20% each year. The “accelerating treadmill” metaphor for gas production is apparent in the difficulty most gas producers we follow have in even maintaining output. (This is why we believe that Equinox’s gas producers, who are actually increasing production, are so valuable.) With significant new sources of supply like liquefied natural gas (LNG) years away, we assert that gas prices will remain strong.

The positive economics of energy are visible in the California morass. With reliability of supply such a high priority, Governor Davis is contracting for long-term electricity supply from independent power producers. One of the most aggressive of the new power plant builders, Calpine, plans to increase its generating capacity over the next five years (65,000 Megawatts) so as to require incremental annual gas consumption of 3 trillion cubic feet/year. This equals Canada’s entire current natural gas export to the U.S.! In anticipation of its substantial new power-plant development projects, Calpine must secure long-term natural gas reserves to “lock-in” its profit margin on its long-term electricity supply contracts with the likes of California. The following table illustrates Calpine’s recent purchase of Canadian producer Encal.

Calpine Contracts to Calpine Acquires Encal for its

Sell Electricity to CA (US$) Future Nat Gas Production (US$)

Contracted Price ($/MwH) $66

Operating Cost / MwH - $10

Implied Price of Fuel / MwH =$56

McFs of Nat Gas / MwH 7

Implied Price of Natural Gas =$8 ($56/7) $4 (Implied Cost of Nat Gas)

The deal represents the purchase of future gas production at a cost to Calpine of US$4/mcf. This compares very favorably with Calpine’s electricity sale price that effectively sells the gas, after profitably converting it to electricity, at US$8/mcf. The extraordinary profit that Calpine locks in with this transaction means we have not heard the last of Calpine’s aggressive pursuit of Canadian gas reserves!

This interest in purchasing gas reserves on the stock market by electricity power generators coincides with other energy conglomerates’ need to own reserves as part of a “total energy solution” marketing strategy. In addition, other oil and gas producers recognize that gas can be “found” more cheaply on the stock exchange than in the ground. The “real world” competition for gas reserves that has ensued is in sharp contrast with the pessimism of energy stock investors. Characteristically, Equinox’s position is consistent with the “real world.”

Profit Potential From the Current “What Me Worry” Financial Attitude

Such indicators as Americans’ still positive sentiment towards technology investments, their unwillingness to reduce consumption and the skeptical investor attitude towards our energy problem, imply that our countrymen have been suffering from a sort of denial about the now apparent ephemeral nature of the “New Economic Paradigm.” It is as if investors are sure that Cisco Systems will soon return to $80/share. After years of economic euphoria, stoked by an unending bull market and the conviction that technology will solve any economic problem, the return to reality will be a bitter pill. Mad magazine’s Alfred E. Neuman captured the mood with his, “What, me worry?” However, whether it is the end of the growth stock mania or the shortfall of cheap energy, the logic of supply and demand must finally reassert itself. Our portfolio’s incipient profitability is beginning to reflect the fundamental developments we have discussed for years.

Some believe that because the NASDAQ has lost two-thirds of its value, the short-selling opportunity is over. As discussed above, we fundamentally disagree. That said however, Equinox has chosen to pursue a lower risk shorting strategy that we believe to be equally prospectively profitable. However, Equinox’s continuing contrarian prospects are not limited to shorting overpriced stocks. More specifically, the undervaluation of our long positions, created by the distortions of the late mania, suggest even greater returns than shorting. The stock market reappraisal of most of our contrarian longs is just beginning.

Moreover, from our energy producers to our Asian and European businesses to our precious metals companies, our longs share something more than their astounding cheapness—namely, in each case we believe we have identified “best of breed” managements within their industries. These managers are true “executive marathoners” (one is literally an “ultra” marathon runner) whose focus is unrivaled and whose dedication allows them to not only survive, but thrive in the context of the current strenuous environments of their respective economies and industries. As with these managers, at Equinox we are optimistic about the long term prospects of continuously exercising a focused discipline of sensible investment. We look forward to sharing with you the ongoing rewards of our “micro” discipline of studied valuation/business/management stock picking as the head wind we have faced for so long finally subsides. These rewards should be substantial as the wind shifts to our backs. We believe this time has come.

Sincerely,

William W. Strong

Anthony R. Campbell

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Precious Metals Fund - Q3 2025 Letter

By Kieran Brennan • October 31, 2025

Dear Partners and Friends, PERFORMANCE Equinox Partners Precious Metals Fund, L.P. rose +36.2% in the third quarter of 2025 and is up +90.2% for the year-to-date 2025. By comparison, the Junior Gold Mining Index GDXJ rose +46.6% in the quarter and is up +132.7% for the year-to-date. Exploration stage companies were the best performing segment of the portfolio, appreciating +55.0% in the quarter. The spot gold price rose +18% in the quarter and is up +47% for the year-to-date. The letter that follows provides our thoughts on the outlook for the gold price and implications for the portfolio holdings. gold The gold bull market, initially driven by central bank buying, has evolved into an investor-driven dollar debasement trade. This second phase of the gold bull market is more explosive than the first because it draws on the approximately $470 trillion of the world’s wealth as opposed to the roughly $35 trillion of central bank balance sheets. If President Trump fans the dollar debasement fire by forcing a politicized Fed to cut rates, gold could rapidly displace the dollar as the world’s reserve currency. However, if President Trump takes a more nuanced approach to the Fed, gold should still displace the dollar as the world’s reserve currency over time with the competition between gold and the dollar taking longer to play out. Gold investors warning about fiat currency debasement is nothing new. That, after all, is why gold investors own gold in the first place. There’s also nothing new about most American investors ignoring these warnings. The dollar’s relative stability has long made concerns about dollar debasement appear quixotic. Since the early 1980’s, American inflation has been largely tolerable, the dollar has outperformed almost all other fiat currencies, and U.S. government bonds have been the safest asset to own in an economic downturn. The dollar has sloughed off so much criticism for so long that Janet Yellen likely did not imagine the chain of events that freezing Russia’s foreign exchange reserves would set into motion. With confidence in the dollar’s inertia and a bit of hubris, in our opinion, Secretary Yellen engineered the freezing of $300 billion of Russia’s foreign exchange reserves and put the world’s central banks on notice that their use of dollar reserves depends upon the tacit approval of the U.S. Treasury. Foreign governments, shocked by this policy change, sought to reduce their dependence on the U.S. Treasury and doubled their gold purchases to roughly $60-80 billion per year (potentially $100 billion in 2025). This increase in central bank gold demand drove the gold price up over +50% from March 2022 to March 2025. This bull market, in turn, gave gold the additional scale necessary to function as a more viable alternative to the dollar and damaged the dollar’s air of invulnerability. This two-fold outcome is problematic because inertia and a lack of alternatives were fundamental to the dollar’s stability. On the back of gold’s appreciation, long-ignored arguments of gold investors began sounding more plausible. Financial professionals accustomed to deriding gold investors and referring to them as insects began to worry that gold’s price action is telling them something important. Jamie Dimon aptly summed up the change of heart: “This is one of those times where it is semi-rational to own gold.” His comment captures both his continued distaste for gold and his willingness to own it. Despite the broadening acceptance of gold as an investment, markets remain skeptical of the underlying dollar-devaluation narrative. Inflation, a broad measure of the dollar’s strength, is just 2.8%. The 10-year U.S. Treasury yields 4.0%, indicating the bond market’s indifference to the dollar debasement narrative. Furthermore, the decline in the trade weighted dollar has partially reversed since early July. At this moment, the dollar debasement trade appears to be waiting for additional macroeconomic and geopolitical events to play out. Of these, none looms larger than President Trump’s effort to bend the Federal Reserve to his will. In January, the Supreme Court will likely allow President Trump to remove Federal Reserve Board Governor Lisa Cook, making the selection of the next Fed Chair even more important. If Trump nominates a loyalist like Kevin Hassett who appears more committed to pleasing the President than price stability, we could see broadening concern about the dollar’s store of value and a growing asset allocation into gold. In this hyper-politicized Fed scenario, gold could quickly become a $100 trillion dollar asset and displace the dollar as the world’s reserve currency. However, if Trump nominates an institutionalist like Chris Waller, the dollar debasement trade will likely remain in limbo for a while as markets suss out how much control Trump really has over the Fed. Either way, the U.S. bond market will not be allowed to freely adjudicate the outcome at the Fed. We expect both Treasury and Fed to proactively manage the yield curve during the particularly politically sensitive period when the Fed is cutting rates while inflation is above their stated 2% target. Treasury will keep longer-dated bond issuance to a minimum while coercing banks to keep the Treasury market well bid. JP Morgan increased its holdings of Treasuries by $80 billion in the first half of this year, and we expect other banks to follow suit. The Fed, for its part, has announced an end to quantitative tightening and its intention to shift its balance sheet from mortgage-backed securities to Treasuries. Given the likely extent of the coordinated intervention of the Treasury and Fed, the bond market will not be a good indicator of the market’s confidence in Trump’s economic policies. Gold will be. To the extent that investors sense that the bond market is not providing a reliable price signal, they will begin paying more attention to gold. And, should the gold price becomes the accepted indicator of U.S. financial health, the Trump administration will take action to influence it. At the very least, this will entail the Trump administration encouraging other central banks to stop buying gold or even sell gold. But the anti-gold policy options are limitless. Needless to say, the U.S. government pushback on gold will not solve the dollar’s long-term structural problems. Nor will it mark the end of gold’s challenge to the dollar. It will simply mark the next phase of financial repression. Our Gold Mines The second phase of the bull market in gold has been broadly positive for our portfolio, as a portion of the investor money flowing into gold has bid up gold mining equities as well. Where central banks buy the physical gold bullion, private wealth investors allocating to gold will also buy gold mining stocks. The GDXJ Junior Mining Index is up +132.7% for the year-to-date through September 30. Even with this year’s rapid rise in the gold mining portfolio, valuations remain cheap at spot gold prices. Our in-production portfolio trades at a 24.0% IRR as compared to a 23.4% IRR on March 31. The most dramatic mis-valuation among our gold miners continues to be in the pre-production companies. While these equities have appreciated more rapidly than our producing companies for the year-to-date 2025, they began from such a low valuation that even at twice or three times their January price, they are still undervalued. Troilus Gold, a junior gold mining company with an 11.2 million ounces gold-equivalent resource in Quebec, Canada, is a case in point. Troilus Gold shares have more than tripled in 2025, rising from C$0.31 to C$1.35 per share. The company still trades at an IRR of 30%, 0.2x price-to-NAV (using a 10% discount rate), and a price per ounce of recoverable gold of $63. When Troilus goes into commercial production in 2029, we expect it will generate annual net income roughly equal to its current market cap. Troilus historically traded at an extremely low valuation because the market did not believe that the company could finance the project's upfront capital expenditure of $1.3 billion. Throughout 2025, Troilus began addressing these financing concerns by signing an offtake agreement with a European smelter and a related letter of intent for $700 million of debt financing on attractive terms. If Troilus Gold raises the necessary equity and signs a streaming arrangement to fully fund the mine’s construction, we believe the stock will trade much closer to its NAV (using a 10% discount rate and the spot gold price) of $2.5 billion.

Equinox Partners, L.P. - Q3 2025 Letter

By Kieran Brennan • October 30, 2025

Dear Partners and Friends, PERFORMANCE Equinox Partners, L.P. rose +24.5% net of fees in the third quarter and is up +54.4% for the year-to-date 2025. By comparison, the S&P 500 index rose +8.1% in the third quarter and is now up +14.8% for the year-to-date 2025. Our quarterly performance has been almost exclusively driven by our gold and silver miners. In the third quarter, the spot gold price rose +18%, and the fund’s mining portfolio returned +40%. As of this writing, 78% of Equinox Partners’ capital is invested in the gold and silver sector. The letter that follows provides our thoughts on the gold price and our gold mining holdings. Gold The gold bull market, which was initiated by central bank buying, has evolved into an investor-driven dollar debasement trade. This second phase of the gold bull market is more explosive than the first because it draws on the approximately $470 trillion of the world’s wealth as opposed to the roughly $35 trillion of central bank balance sheets. If President Trump fans the dollar debasement fire by forcing a politicized Fed to cut rates, gold could rapidly displace the dollar as the world’s reserve currency. However, if President Trump takes a more nuanced approach to the Fed, gold should still displace the dollar as the world’s reserve currency over time with the competition between gold and the dollar taking longer to play out. Gold investors warning about fiat currency debasement is nothing new. That, after all, is why gold investors own gold in the first place. There’s also nothing new about most American investors ignoring these warnings. The dollar’s relative stability has long made concerns about dollar debasement appear quixotic. Since the early 1980’s, American inflation has been largely tolerable, the dollar has outperformed almost all other fiat currencies, and U.S. government bonds have been the safest asset to own in an economic downturn. The dollar has sloughed off so much criticism for so long that Janet Yellen likely did not imagine the chain of events that freezing Russia’s foreign exchange reserves would set into motion. With confidence in the dollar’s inertia and a bit of hubris in our opinion, Secretary Yellen engineered the freezing of $300 billion of Russia’s foreign exchange reserves and put the world’s central banks on notice that their use of dollar reserves depends upon the tacit approval of the U.S. Treasury. Foreign governments shocked by this policy change sought to reduce their dependence on the U.S. Treasury and doubled their gold purchases to roughly $60-80 billion per year (potentially $100 billion in 2025). This increase in central bank gold demand drove the gold price up over +50% from March 2022 to March 2025. This bull market in turn gave gold the additional scale necessary to function as a more viable alternative to the dollar and damaged the dollar’s air of invulnerability. This two-fold outcome is problematic because inertia and a lack of alternatives were fundamental to the dollar’s stability. On the back of gold’s appreciation, long-ignored arguments of gold investors began sounding more plausible. Financial professionals accustomed to deriding gold investors and referring to them as insects began to worry that gold’s price action is telling them something important. Jamie Dimon aptly summed up the change of heart: “This is one of those times where it is semi-rational to own gold.” His comment captures both his continued distaste for gold and his willingness to own it. Despite the broadening acceptance of gold as an investment, markets remain skeptical of the underlying dollar-devaluation narrative. Inflation, a broad measure of the dollar’s strength, is just 2.8%. The 10-year U.S. Treasury yields 4.0%, indicating the bond market’s indifference to the dollar debasement narrative. Furthermore, the decline in the trade weighted dollar has partially reversed since early July. At this moment, the dollar debasement trade appears to be waiting for additional macroeconomic and geopolitical events to play out. Of these, none looms larger than President Trump’s effort to bend the Federal Reserve to his will. In January, the Supreme Court will likely allow President Trump to remove Federal Reserve Board Governor Lisa Cook, making the selection of the next Fed Chair even more important. If Trump nominates a loyalist like Kevin Hassett who appears more committed to pleasing the President than price stability, we could see broadening concern about the dollar’s store of value and a growing asset allocation into gold. In this hyper-politicized Fed scenario, gold could quickly become a $100 trillion dollar asset and displace the dollar as the world’s reserve currency. However, if Trump nominates an institutionalist like Chris Waller, the dollar debasement trade will likely remain in limbo for a while as markets suss out how much control Trump really has over the Fed. Either way, the U.S. bond market will not be allowed to freely adjudicate the outcome at the Fed. We expect both Treasury and Fed to proactively manage the yield curve during the particularly politically sensitive period when the Fed is cutting rates while inflation is above their stated 2% target. Treasury will keep longer-dated bond issuance to a minimum while coercing banks to keep the Treasury market well bid. JP Morgan increased its holdings of Treasuries by $80 billion in the first half of this year, and we expect other banks to follow suit. The Fed, for its part, has announced an end to quantitative tightening and its intention to shift its balance sheet from mortgage-backed securities to Treasuries. Given the likely extent of the coordinated intervention of the Treasury and Fed, the bond market will not be a good indicator of the market’s confidence in Trump’s economic policies. Gold will be. To the extent that investors sense that the bond market is not providing a reliable price signal, they will begin paying more attention to gold. And, should the gold price becomes the accepted indicator of U.S. financial health, the Trump administration will take action to influence it. At the very least, this will entail the Trump administration encouraging other central banks to stop buying gold or even sell gold. But the anti-gold policy options are limitless. Needless to say, the U.S. government pushback on gold will not solve the dollar’s long-term structural problems. Nor will it mark the end of gold’s challenge to the dollar. It will simply mark the next phase of financial repression. Our Gold Mines The second phase of the bull market in gold has been broadly positive for our portfolio, as a portion of the investor money flowing into gold has bid up gold mining equities as well. Where central banks buy the physical gold bullion, private wealth investors allocating to gold will also buy gold mining stocks. The GDXJ Junior Mining Index is up +131% for the year-to-date through September 30. Even with this year’s rapid rise in the gold mining portfolio, valuations remain cheap at spot gold prices. Our in-production portfolio trades at a 24% IRR as compared to a 25% IRR on March 31. The most dramatic mis-valuation among our gold miners continues to be in the pre-production companies. While these equities have appreciated more rapidly than our producing companies for the year-to-date 2025, they began from such a low valuation that even at twice or three times their January price, they are still undervalued. Troilus Gold, a junior gold mining company with an 11.2 million ounces gold-equivalent resource in Quebec, Canada, is a case in point. Troilus Gold shares have more than tripled in 2025, rising from C$0.31 to C$1.35 per share. The company still trades at an IRR of 30%, 0.2X its NAV (using a 10% discount rate), and a price per ounce of recoverable gold of $63. When Troilus goes into commercial production in 2029, we expect it will generate annual net income roughly equal to its current market cap. Troilus historically traded at an extremely low valuation because the market did not believe that the company could finance the project's upfront capital expenditure of $1.3 billion. Throughout 2025, Troilus began addressing these financing concerns by signing an offtake agreement with a European smelter and a related letter of intent for $700 million of debt financing on attractive terms. If Troilus Gold raises the necessary equity and signs a streaming arrangement to fully fund the mine’s construction, we believe the stock will trade much closer to its NAV (using a 10% discount rate and the spot gold price) of $2.5 billion. New Board Seat at Gran Tierra Energy On September 30, portfolio company Gran Tierra Energy announced that Brad Virbitsky has joined the board on behalf of Equinox Partners. While it is a relatively modest-sized position in the fund, we believe there is significant value to unlock, and we can help realize that value through our participation in the boardroom.

Kuroto Fund Wins 2025 HFM US Global Equity Award

By Kieran Brennan • October 30, 2025

Kuroto Fund Wins HFM 2025 US Performance Award

Kuroto Fund, L.P. - Q3 2025 Letter

By Kieran Brennan • October 30, 2025

Dear Partners and Friends, PERFORMANCE Kuroto Fund, L.P. appreciated +16.6% in the third quarter and is up +51.6% year-to-date 2025. By comparison, the broad MSCI Emerging Markets Index rose +11.0% in the third quarter and is up +28.2% for the year-to-date. Performance in the quarter was driven primarily by our investments in Nigeria, with additional strong contribution from our largest position, MTN Ghana. A breakdown of Kuroto Fund exposures can be found here . Portfolio Changes During the third quarter, we initiated a position in Solidcore Resources, a company described in our February webinar . Solidcore is similar to the oil companies we profiled in our Q2 2025 letter in that it is a competitively advantaged commodity producer. The company’s main asset is a long-lived and low-cost mine, the management team is among the best in the region, and the infrastructure they are building will make them a natural consolidator of regional assets. Given the subsequent increase in commodity prices, we ended up purchasing the bulk of our position at a 40%+ free cash flow yield. Solidcore is now a top 5 position in the fund. We funded our purchase of Solidcore by reducing our Georgia Capital position weighting from 17% to 11% and by selling our stake in a Greek consumer-focused business. In the case of Georgia Capital, while the discount to the sum of the parts value decreased from 50% to a more reasonable 30%, we still see it as a compelling investment opportunity. Georgia Capital’s portfolio of oligopolistic businesses is growing earnings double digits, buying back stock, and trading at a single digit, look-through price-to-earnings multiple. The sale of our Greek investment was driven by stock appreciation combined with a management change that led us to re-underwrite our investment. GHANAIAN AND NIGERIAN MACRO Over the past decade, Nigeria and Ghana have endured a seemingly unending series of self-inflicted macro problems. Inflation increased to over 30% in both countries, and the currencies depreciated 64% and 79%, respectively. Ghana defaulted on its domestic and foreign debt in 2023, and Nigeria imposed onerous capital controls for multiple years. However, 2025 has been a turning point for both countries. For the first time in over a decade, investors in these markets are experiencing macroeconomic tailwinds. In Ghana, since the beginning of the year, the currency has appreciated 43% vs. the U.S. dollar, GDP growth averaged over 6%, the budget has been in primary surplus, inflation declined from 24% to 9%, and debt to GDP declined from 62% to 43%. Ghana’s macro environment has improved due to three factors: One, Ghana’s debt restructuring is mostly finished, and the country now has a much smaller interest expense burden, which should decline further as the central bank lowers rates to be more in line with the decline in inflation. Two, the new government which assumed power in January has cut spending 14% in real terms. Three, the country has been helped by the large increase in the gold price, which is both the country’s largest export and a significant component of Ghanaian central bank reserves. Ghana now has 4.8 months of import cover, half of which is held in gold bullion. Whether Ghana can maintain this strong start to the year is an open question, but the fundamentals are certainly in a better place than they have been in the past decade. In Nigeria, President Tinubu’s bold reforms upon taking office are finally starting to have some effect. In 2023, Tinubu eliminated the local fuel subsidy which consumed about 40% of the government’s annual revenues, floated the currency which resulted in a 68% depreciation, forced a recapitalization of the banking sector, and removed the board of the notoriously corrupt national oil company and replaced them with technocrats who formerly worked at companies like Exxon and Shell. While not perfect, the scale of the reforms is impressive by any standard. A year later, inflation has fallen from over 30% to the high teens and is expected to fall to single digits next year. Economic growth has increased from less than 3% to over 4%. Oil production is up more than 10% and oil theft is down 90%. Importantly, the exchange rate has been stable for a year and anecdotally, we are hearing that conditions on the ground are night and day different, businesses are looking to invest, and banks are willing to lend. We initially invested in Ghana and Nigeria in 2018 with the expectation that both countries would eventually adopt a sane set of macroeconomic policies. While it took longer than we expected, sane policy is gaining traction in both countries, and our superior companies are getting re-rated to more sensible, albeit still very cheap, valuations. In Ghana, our main investment has been in MTN Ghana, which has compounded at approximately 25% in U.S. dollar terms since 2018 despite all the on-the-ground challenges. The stock’s historical return understates our investment performance because we increased our weighting at opportune times. The total contribution to our P&L has been +$17.7 million over that time frame, resulting in a +24.9% cumulative contribution to fund returns. Our Nigerian investment results have also been strong. While our initial entry was poorly timed, we added counter-cyclically, and as a result have generated +$9 million of P&L, contributing a cumulative +15.0% to the fund’s return. Our experience in both markets underscores the importance of our investment strategy of looking at out-of-favor markets to find competitively advantaged, well-run businesses at unusually cheap valuations. NEW BOARD SEAT AT GRAN TIERRA ENERGY On September 30th, portfolio company Gran Tierra Energy announced that Brad Virbitsky has joined its board on our behalf. While it’s a relatively modest position size in the fund, we believe there is significant value to unlock and we can contribute to that process through our participation in the boardroom. Sincerely, Sean Fieler & Brad Virbitsky

Precious Metals Fund - Q2 2025 Letter

By Kieran Brennan • August 1, 2025

Dear Partners and Friends, PERFORMANCE Equinox Partners Precious Metals Fund, L.P. rose +13.2% in the second quarter of 2025 and is up +39.7% for the first half of 2025. By comparison, the Junior Gold Mining Index GDXJ rose +18.7% in the quarter and is up +58.7% for the first half of the year. Our meaningful year-to-date underperformance relative to the GDXJ reflects the continued discount at which our companies trade compared to peers. Specifically, our portfolio of producing companies trades at an average internal rate of return (IRR) of 24%, roughly double the 11.5% IRR of the broad universe of gold miners that BMO covers. the gold mining bull market is young The skepticism that characterizes the gold mining sector stands in sharp contrast to the enthusiasm in the broader stock market. The animal spirits that have propelled popular stocks like Wingstop and Robinhood to an average of nearly 80 times 2025 earnings remain totally absent among gold mining investors. One indication of the sober mood that dominates the gold mining sector is the use of gold price assumptions below spot in net asset value (NAV) calculations. Looking at four important sell-side houses for the sector, their models include an average long-term price assumption of $2,400 per ounce, representing a 28% discount to the quarter-end spot price.

Equinox Partners, L.P. - Q2 2025 Letter

By Kieran Brennan • July 24, 2025

Dear Partners and Friends, PERFORMANCE Equinox Partners, L.P. rose Equinox Partners, L.P. rose +11.6% net of fees in the second quarter and is up +24.1% for the year-to-date 2025. By comparison, the S&P 500 index rebounded +10.9% in the second quarter and is now up +6.2% for the year-to-date 2025. Our portfolio has performed well across the board this year, with our gold miners, oil and gas producers, and emerging market businesses all appreciating. We were particularly gratified by the long-overdue outperformance of several of our earlier stage gold companies in the first half of this year. With markets and complacency on the rise, we think it prudent to address the non-negligible risk of an economic downturn. Beware the Next Recession

Kuroto Fund, L.P. - Q2 2025 Letter

By Kieran Brennan • July 23, 2025

Dear Partners and Friends, PERFORMANCE Kuroto Fund, L.P. appreciated +21.3% in the second quarter and is up +30.1% for the first half of 2025. By comparison, the broad MSCI Emerging Markets Index rose +12% in the second quarter and is up +15.3% for the first half of 2025. Key performance drivers for the fund have been our large position in MTN Ghana, as well as the strong returns from our holdings in Nigeria and the Republic of Georgia. A breakdown of Kuroto Fund exposures can be found here . Despite Kuroto Fund’s outperformance in the first half of the year, our portfolio remains very attractively valued. Given the diversity of business models we own, it is difficult to find metrics that provide an accurate picture of the value and quality of our portfolio in the aggregate. In the absence of an alternative, our portfolio’s weighted average price-to-earnings multiple of 7.3x 2025 earnings, dividend yield of 5.2% and ROE of 24.7% will have to do.

Precious Metals Fund - Q1 2025 Letter

By Dan Donohue • May 1, 2025

Dear Partners and Friends, PERFORMANCE Equinox Partners Precious Metals Fund, L.P. rose +23.4% in the first quarter of 2025. Over the same period the price of gold rose +18.9%. The fund’s performance was driven by strong returns from both the producing and exploration stage companies as gold crossed $3,000 per ounce. Trump's New Economic Policy Trump’s New Economic Policy has roiled markets and bolstered investor gold buying globally. While the violent market gyrations remain a focus for our team, we have also been thinking through the long-term effects of Trump’s policies. In this latter endeavor, Nixon’s 1971 New Economic Policy has proven an invaluable guide. The policy similarities between Nixon’s first term and Trump’s second are striking. Both presidents declared emergencies, raised tariffs, cut spending, reduced foreign aid, blamed foreigners, devalued the dollar , proposed tax cuts, attacked the Federal Reserve chair, and directly managed consumer prices. There are, of course, also meaningful differences. Most notably, Trump has raised tariffs more, devalued the dollar less, and has not imposed formal wage and price controls. Nevertheless, the policy resonance is striking.

Kuroto Fund, L.P. - Q1 2025 Letter

By Kieran Brennan • April 30, 2025

Dear Partners and Friends, PERFORMANCE Kuroto Fund, L.P. appreciated +7.3% in the first quarter of 2025, while the broad MSCI Emerging Markets index rose +3.0%. Kuroto performance for the quarter was driven primarily by the strong performance of our operating companies in Georgia and Ghana. A breakdown of Kuroto Fund exposures can be found here . Returning to Brazil Though the Kuroto Fund didn’t invest outside of Asia until 2014, as a firm we began investing in Brazil in the late 1990s and made our first sizable investment there in 2004. We have followed the market ever since. Given our love for the country of Brazil and admiration for many of the companies there, it has been challenging for us to remain mostly absent from Brazilian capital markets for the past decade. We stayed away for a variety of reasons, but primarily because we didn’t like the valuations on offer. So it is with more than a bit of enthusiasm that we were able to make two substantial investments in Brazil this January, taking our portfolio weighting in the country from 0% to 10%. Brazil remains a macroeconomic and political adventure, but today’s valuations are incredibly attractive. The Brazilian stock market is down over 40% in US dollars over the past 14 years.