Equinox Partners, L.P. - Q4 2013 Letter

Dear Partners and Friends,

PERFORMANCE & PORTFOLIO

Equinox Partners was down -1.2% in the fourth quarter of 2013 and -7.1% for the full year.[1]  To begin 2014, we estimate the fund was down -0.3% in January.

2013 Sector Contribution and Yearend Exposure[2]

In the first half of 2013, we were sellers of fully-valued operating companies in Southeast Asia and Brazil. Some of this capital was reallocated to other emerging market operating companies, thereby increasing our “rest of world” exposure to 28% as of yearend.[3] We also aggressively bought gold and silver miners and great Indian businesses in moments of panicked selling. We currently own 39 companies, twelve of which were added to the fund in 2013 across multiple geographies and sectors.  


While we were surprised by the sharp price declines in both gold and precious metals miners in 2013, we firmly believe that the developed world’s over indebtedness has significant consequences and that monetary manipulation cannot paper over reality indefinitely. This conviction explains our long-standing exposure to gold and silver mining and our willingness to incur the corresponding volatility. Given the 2013 performance of these companies, which overwhelmed the rest of our portfolio, we will devote ourselves to a discussion of this investment in our next letter.


Our non-resource companies, by contrast, performed well last year and grew as expected. Trading at 12x our 2014 estimated earnings and generating both high-teens earnings growth and ROE, we believe these companies remain attractive investments despite their recent good stock performance.


Top Five Holdings

This letter marks the first time we have disclosed our top five positions. Going forward, we will disclose our top five yearend long positions on an annual basis.  We began this process in our last letter with a discussion of Aramex, our single largest position. We discuss the other four of our top five in this letter. The valuation table found below serves as a quick summation of all five of these positions.

2013 Yearend Top Five Holdings [4]

Ferrycorp     -        4.3% of the fund


Ferreycorp, Caterpillar’s exclusive dealer in Peru since 1942, dominates the Peruvian market for mining and construction equipment and service. The company’s early entry into Peru and its adherence to the Caterpillar business model have allowed it to develop a strong service network. We believe this network represents a sustainable competitive advantage which will allow Ferreycorp to consistently profit from Peru’s high long-term growth potential. 


Parts and service availability is critical in the mining and construction industries. Ferreycorp’s customers want their machines constantly available. Maximizing “uptime” is critical to profitability since a single broken part could potentially shutter an entire operation. To this end, Ferreycorp has developed an unparalleled service network in Peru.


Ferrycorp’s competitive advantage is in large part due to its over seventy years of continuous operation in Peru. Its competitors, by comparison, have only been present in the country for a decade or two. Ferreycorp’s service locations and personnel—which dwarf its closest competitor—create a huge advantage for them in the more mountainous parts of the country. Additionally, the company’s strong service network makes customers more likely to buy new equipment from Ferreycorp.


The company’s emphasis on service and parts availability follows Caterpillar’s global strategy. Ferreycorp adheres to Caterpillar’s “Seed, Grow, Harvest” business model: plant seeds by selling new equipment; grow the business by developing strong customer relationships; and harvest the profits by replacing parts and performing repairs. The resulting emphasis on service not only creates customer loyalty but also drives much of the business’ profitability. Parts and service invariably have much higher profitability than a new machine sale. This high-margin service business provides insulation from the cyclicality typically associated with selling capital equipment and helps generate the high-teens returns on capital necessary to fund long-term growth.


Ferreycorp clearly benefits from Caterpillar’s partnership approach to its distributers. Caterpillar recognizes that it benefits from having successful dealers. This dynamic ensures that Ferrycorp can earn high enough returns on capital to further invest in its business and thereby generate more sales for both companies.


Despite the aforementioned advantages, Ferreycorp sells for just 6.6x 2014 estimated earnings.[5] Needless to say, we think the market is significantly undervaluing the company.

apr energy -   4.3 of the fund


Founded by John Campion and Laurence Anderson, APR delivers temporary electrical power via mobile turbines at short notice to anywhere in the world. The company handles everything from transporting the equipment to installing, operating, and maintaining it. Whether it’s an emergency, seasonal, or longer-term electricity need, APR offers an immediate solution for a premium fee, instead of the large capital investment of a power plant. The temporary nature of this business requires developing the scale, the relationships, and the capability needed to maintain high utilization rates. These high barriers to entry, combined with the company’s differentiated equipment offering, have allowed APR to generate a mid-teens return on capital which we hope will rise with increasing capacity utilization. 



APR has a solid long-term growth opportunity. The emerging markets, and even some developed ones, face serious shortfalls in their electric-generating power infrastructures for the foreseeable future. These deficits are the result of local governments’ inability to plan for or finance their countries long-term electricity needs. We estimate an electrical power deficit of over 100 gigawatts which should grow at a low-to-mid teens rate.[6] Temporary power fills just a small portion of that overall deficit today. 


Even if a competitor was willing to stomach the initial losses and able to overcome the natural barriers to entry, it’s unlikely they will be able to secure the equipment that is best suited for temporary power. APR uses mobile, aero-derivative turbines which are more reliable, fuel efficient, environmentally friendly, and compact than diesel generators or industrial turbines. Only GE and Pratt & Whitney can currently produce this kind of dual-fuel turbine. The latter doesn’t have much capacity dedicated to this business, and APR recently formed an exclusive supply agreement with GE. As a result of that strategic deal, GE now owns roughly 16.5% of APR.[7] The ability of GE to provide not only scarce equipment but also sales leads is a potentially transformational partnership for APR.


While APR is only 10 years old, the company’s CEO, John Campion, has been running temporary power businesses since the early 1990s. He began his career renting diesel generators for various entertainment events. John later headed Alstom Power Rentals which he subsequently purchased in order to form the foundation of what is now APR. John’s industry experience and relationships have allowed the company to obtain supply arrangements with the likes of Pratt & Whitney and GE as well as win large, important mandates. A hard-charging salesman with the technical knowledge of an engineer, John has created an entrepreneurial culture, industry reputation, and customer relationships that competitors have had a difficult time replicating.


APR sells for 12.6x our 2014 estimated earnings. Based on its growth opportunity, industry experience and high return on incremental capital, APR should have the ability to increase its intrinsic value at an attractive rate for a long period of time.

altius minerals -      4.3% of the fund

Altius is a mineral exploration and royalty company. Through the discovery and capitalization of mineral deposits, the company has created a series of royalties that generate free cash flow for Altius’ benefit.  The 25% compound annual growth of Altius’ stock since its listing in late 1997 reflects the strength of this business model and the persistent growth of the company’s intrinsic value.[8]


Prospect generation is at the heart of Altius’ model of value creation. Prospect generators focus on early- stage projects—staking claims and doing field work.  Prospecting is of course a risky proposition and very few projects ever pan out.  These long odds are a perfect match for this high-frequency, low-capital intensive business model. By eschewing the heavy spending needed to test the geological thesis and delineate a deposit, prospect generators are able to both manage the cost of many failures and maintain exposure to successes.


While successful prospect generation requires little financial capital, it requires serious amounts of intellectual capital. Recognizing their competitive advantage, management at Altius has worked hard to develop unparalleled knowledge of their home province of Newfoundland and Labrador. This superior understanding of local geology has allowed Altius to repeatedly stake and acquire the most desirable projects. 


In addition to skill in geology, Altius’ founder and CEO, Brian Dalton, has also developed good relationships with strategic investors. Brian’s reputation for honesty and thoroughness has enabled him to bring in outside capital to fund the exploration and development of these projects.  For instance, Brian brought together the property, capital, and management necessary to form Alderon Iron Ore Corp. In return for this effort, Altius was able to retain a 25% equity stake in Alderon as well as a royalty on production from the mine.

 

The capital generated by spin outs such as Alderon has been redeployed into royalties that provide the company with a strong base of cash flow. Notably, Altius recently announced the purchase of a large portfolio of coal and potash royalties in Alberta and Sasketchawan. This royalty portfolio alone will generate close to $30 million in revenues while requiring no ongoing capital investment or administrative cost.[9]


Despite substantial share price appreciation since late December, Altius still trades at a discount to the net asset value of its royalties and equity portfolio. The ability of Altius’ excellent management and the strength of their prospect generation business model should command a substantial premium to this valuation, in our opinion.

virginia mines –      3.9% of the fund


Virginia, a prospect generator in the massive northern region of Quebec known as James Bay, was founded by Andre Gaumond in 1994. Armed with seasoned geologists, a government-led infrastructure build out, and generous provincial tax credits, Andre’s team set out to map and explore northern Quebec for profit. Their dedication and savvy produced a 17.7% annualized return over the past 18 years.[10] Today, Virginia owns a highly-valuable royalty on Goldcorp’s Éléonore mine and a large portfolio of attractive exploration assets.


Virginia’s success stems from management’s perfection of a cost-effective approach to exploring their large land package in Northern Quebec. Andre developed relationships with the geology departments at local universities—pulling in their best students to assist the company’s summer programs—and in doing so, transformed the seasonal nature of field work into an advantage. During the winter, when field work is more expensive or even impossible, a smaller, permanent team painstakingly analyzes the data that is collected and tests drill targets. Over the past two decades, this seasonal, low-cost approach has produced the only accurate database of the geology in James Bay.


In late 2004, the company’s disciplined approach resulted in a major discovery of high-grade gold on Virginia’s Éléonore property. To optimize the value of this success, Andre initiated an auction process that resulted in the sale of the asset to Goldcorp and the retention of a royalty for Virginia. Given the size of the Éléonore asset and the dependability of Goldcorp as the operator, this royalty is widely recognized to be the best gold royalty not owned by a multi-billion dollar company.


The value of this economically robust royalty has been reflected in Virginia’s stock performance during the recent bear market in mining stocks.  Last year, while the GDXJ junior gold mining index was down 61% and the gold price was down 28%, Virginia actually appreciated 6% in USD.[11] Importantly, Virginia’s Éléonore royalty not only provides downside protection but it also offers exposure to future exploration success.

 

Andre incorporated an escalator into the Éléonore royalty by scaling the percentage owed to Virginia from 2.2% to 3.5% of revenues as cumulative production rises.[12] Having recently visited Éléonore, we believe that Goldcorp is building infrastructure for a mine that will ultimately extract significantly more than the 7.7 million ounces of current resources from this deposit.[13]


Beyond Éléonore, Virginia holds a vast portfolio of early-stage prospects. The company is actively working twelve projects in James Bay, with total exploration expenditures in 2013 of $15 million largely funded by its partners. The most notable of these projects is the Coulon deposit, a high-grade poly-metallic system. While this deposit will need to grow to support economic development, we are confident Virginia will manage the risk and rewards of further exploration appropriately.


At $1250 gold, we estimate the value of the Éléonore royalty plus the company’s cash on the balance sheet are worth more than the current share price of Virginia. A higher gold price, the long-term growth of Éléonore, or other discoveries on the company’s massive land package provide substantial upside. Given its size and quality, we suspect that the Éléonore royalty would even command a substantial premium in the current depressed environment. Should such a transaction materialize, we are confident that Andre will handle the sale of the Éléonore royalty with the same aplomb that he showed in the initial sale to Goldcorp. Meanwhile, we happily retain our exposure to this exceptional management team as they manage the monetization of Éléonore and third-party spending on their properties.







Sincerely,


Andrew Ewert

Sean Fieler                   

Daniel Gittes

William W. Strong

END NOTES

[1] Returns stated for Equinox Partners, L.P. Returns will differ for Equinox Fund International, Ltd.


[2] Sector and country returns are presented herein on a gross basis and use relevant period P&L and average capital in determining contribution. Cash and equivalents are excluded. P&L from equity shorts held during early 2013 are included in Rest of World and Asia sectors.


[3] “Rest of World” operating companies trade in the US, Saudi Arabia, UAE, UK, Peru, and Georgia.


[4] Compound IRR is calculated from position’s inception and accounts for incremental buys/sells. Information from Equinox Partners proprietary analyst models are subjective in nature and based on many assumptions. Although believed to be reliable, models have not been independently verified and accuracy or completeness cannot be guaranteed. ROE of Aramex and APR adjusted for goodwill. ROE of Altius only includes producing assets. Net Asset Value (NAV) is the present value of future discounted cash flows. Altius and Virginia use NAV valuation because we believe current earnings do not reflect the full value of these companies. NAV calculations involve assumptions about interest rates, discount rates, commodity prices, production levels and tax rates, among others, any of which may be incorrect.


[5] Valuations derived from internal models.


[6] Sources: Projected deficit for 2015 per Oxford Economics; Platt’s; Strategic Analysis. Growth figures per Aggreko 2013 Strategy Presentation.


[7] Source: Company filing TR-1 per Bloomberg dated 1/30/14.


[8] Stock appreciation per Bloomberg.


[9] Source: Internal proprietary model.


[10] Internal performance calculation assumes all proceeds from the sale of Virginia Gold were reinvested into Virginia Mines.


[11] Stock performance per Bloomberg.


[12] Rate of increase presumes gold price exceeds $500/ounce.


[13] Source: Goldcorp 2012 Revenue and Resource statement.

Value Investor Insight Interview October 2025 Issue with Sean and Brad

By Kieran Brennan • November 11, 2025
Value Investor Insight Profile with Sean Fieler and Brad Virbitsky

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.
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