Equinox Partners, L.P. - Q4 2023 Letter

Dear Partners and Friends,


PERFORMANCE

Equinox Partners, L.P. declined -8.87% in the fourth quarter and –11.4% for the full year. 

 

Equinox Partners’ 2023 decline follows four strong years of performance. Over the five-year period from January 2019 through the end of December 2023, our fund delivered a 174% cumulative net return and a 22.3% compounded annual growth rate. Oil and gold, our largest commodity exposures, were both up, with WTI Crude rising 57.5% and the spot gold price rising 61%.  The equities linked to these commodities enjoyed positive performance as the Canadian Energy index appreciated nearly 100% and the Junior Gold Mining index rose 30% cumulatively.  Within the Equinox portfolio, we outperformed both the Canadian Energy and Junior Gold Mining indices since the end of 2018. 

 

Going forward, we anticipate higher gold and oil prices and believe that our producers of these commodities are deeply undervalued. We also believe that the severe volatility that continues to characterize the commodity complex offers us an exceptional opportunity to add value through our concentrated stock picking. In today’s commodity price environment, our portfolio of undervalued companies should generate reasonable rates of return. In a better commodity price environment, we expect our portfolio to compound rapidly.


Visit our performance page to view the Equinox Partners, L.P. fund summary in more detail.


Bloomberg Commodity Index Chart 2019 - 2023

Down 27.7% since June 2022 peak

Source: FactSet

The Politics of Oil & Gold

The price and supply of oil and gold were central to American foreign and economic policy for much of the twentieth century. FDR’s meeting with Abdul Aziz ibn Saud on the deck of the USS Quincy in 1945 secured a long-term oil supply from Saudi Arabia. And, the Bretton Wood’s conference in the summer of 1944 tied the world’s currencies to the dollar and the dollar to gold. 

 

By 2000, the political relevance of oil and gold had ebbed.  At the turn of the millennium, oil traded at $25 USD per barrel and gold traded at $288 per ounce. There appeared to be more oil and gold than the market needed, and it was not obvious what America had to gain from actively managing the price or supply of either. So, while American policymakers remained engaged in the oil and gold markets, they understood that the price movements of these two commodities didn’t threaten the world’s security or macro economy. 

 

As market forces asserted themselves and the world's economy boomed, the price of oil increased to $140 per barrel and gold rose to $970 per ounce by the summer of 2008. Rising oil prices were inflationary but not problematic as their effect was more than offset by the deflationary tailwind created by China’s 2000 accession to the WTO. Similarly, gold was gaining appeal as an investment but did not threaten the dollar’s role as the world’s reserve currency. That was then, this is now.   


With the return of inflation and the obvious use of the US dollar as a tool of American foreign policy, the supply and price of oil and gold are again clearly political.  The $3-trillion-dollar oil market is the largest commodity market in the world, and the price of oil is highly correlated with inflation. Accordingly, in an inflationary environment, the US government is incentivized to actively manage the oil price. Similarly, the world’s $16-trillion dollars of above-ground gold is the only asset class large enough and deep enough to seriously threaten the dollar’s role as the world’s reserve currency.  Accordingly, the federal government has an interest in preventing gold price action that makes US Treasury look insolvent or the Fed look impotent. 

 

It is broadly understood that the Biden administration has attached enormous significance to the oil market and is willing to use the power of the American government to suppress the oil price.  This suppression helped the Federal Reserve get inflation down and denied Russia a foreign exchange windfall.  It is also worth noting that low oil prices should help Biden’s reelection efforts if they can be sustained through November.  To achieve the oil price suppression, the Biden administration cut the US strategic petroleum reserve in half and facilitated increased oil production in Iran and Venezuela. 

 

While not explicitly, the federal government also cares about the gold price. In a break with precedent, the New York Fed is refusing to answer basic questions about its participation in the gold market . Importantly, this refusal comes as foreign central banks are buying more than 1,000 tonnes per year in an effort to diversify away from the US dollar. In the case of Russia and China, these purchases clearly reflect a political desire to challenge the dollar. But, in the case of the central banks of the Netherlands and Poland, the gold purchases are driven by growing discomfort with the US fiscal position rather than geopolitics. 

 

Investing in markets that the US government is intent on keeping quiescent has been frustrating over the past eighteen months. Since a spike in the summer of 2022, the oil price has fallen 45% and the gold price is up just 2%.  While the past eighteen months have been painful, there is good reason to believe that we are nearing the limits of the US government's ability to suppress these markets. 


In the case of oil, the US strategic petroleum reserve has already disgorged 280 million barrels . These barrels can’t be released again. And, support for Iran and Venezuela’s oil production is becoming more of a political liability. The Biden administration pulled out all the stops to suppress the oil price when the Fed's credibility was on the line and there was a possibility that Russia would lose the war in Ukraine. Those moments have both passed. 


With respect to gold, not only are the Chinese and Russians done accumulating dollars, but a broad swath of central banks are now committed to acquiring gold. According to a recent World Gold Council survey, 24% of central banks intend to acquire gold over the next twelve months. And, while the US government can easily participate in the market for paper gold, foreign central banks are accumulating physical metal, a much more difficult market to manage. There are also signs that U.S. retail investors are developing a taste for physical gold which they can actually hold. The popularity of one ounce gold bars at Walmart and Costco merits close attention. In the fourth quarter, these two retailers each sold several tonnes of gold. These figures pale in comparison to the 1,000 tonnes foreign central banks bought last year but raise the possibility of growing Western retail demand that would be very hard to manage.   

 

The politics of commodity price suppression are central to the investment opportunity we see in both oil and gold. The American government’s effort to manage the price of oil and gold, while painful at times, is part of a process that produces the opportunity to invest in oil producers and gold mines at prices that don’t reflect the underlying market fundamentals.  When the fundaments of the market eventually assert themselves, as we believe they will, we expect the upward revaluation of the companies we own will be substantial. 


investment Thesis Review for the TOP 5 EQUITY LONG POSITIONS BY PORTFOLIO WEIGHT

Crew Energy Inc. 

Crew Energy, an oil and gas company based in British Columbia with over 2,700 identified potential drilling locations in the Montney, is a likely takeover target as LNG Canada ramps up and expands. 


The LNG Canada export facility should begin receiving gas later this year and reach full capacity in 2025.  At full capacity, LNG Canada will takeaway 2bcf/d of British Columbia’s 6bcf/d of gas production. Should LNG Canada expand its capacity by twinning its existing pipeline, LNG’s offtake capacity will grow to 4bcf/d. Crew controls perfectly located natural gas assets that can help meet the incremental gas demand from LNG Canada. 


To maximize Crew’s value in a transaction, management would like to buildout the company’s infrastructure and grow production as quickly as possible. That said, management and the board will not over-lever the company to finance this expansion.  Accordingly, in 2023, as gas prices and cash flow fell, the company simply maintained its production and advanced some of the less capital-intensive parts of the expansion plan, i.e. permitting and plant design. If gas prices rise, Crew will expand more aggressively. 


In today’s low gas price environment, Crew is working to prove up as much of its acreage as it can. This is a relatively low-cost way to add value in a transaction. To put Crew’s resources potential value in context, at the end of 2022, Crew held $1.4bn CAD of proved and probable reserves. This figure, which is twice the company’s $700bn CAD enterprise value, only includes 198 drilling locations. 


Paramount Resources Ltd.

Paramount Resources is an oil and gas company based in Alberta which produces ~100k barrels of oil-equivalent per day.  At $70 oil (WTI) and $3 natural gas (AECO), the company will generate 10%+ production growth and a 5% dividend yield. At $80 WTI, the total return (growth + free cash flow) will comfortably exceed 20%. 

 

Paramount budgeted for 15% production growth in 2023 but delivered 9%. The 2023 production shortfall is a result of a third-party processing facility and is unlikely to reoccur.  In 2024, we expect Paramount to grow production 16% while spending well within cash flow. We also expect the company to pay out $220mn CAD in dividends, a 5.8% yield on the current share price. 

 

Paramount’s principal growth driver over the next five years is in the Willesden Green area of the Duverney Shale Basin.  Paramount is positioned to grow production in this area to 50k barrels of oil equivalent per day by 2028. The Willesden Green project will generate significant additional free cash for the company and should provide attractive full-cycle returns given the company’s relatively low cost of entry to the play. 

 

Finally, it is important to note that Paramount is likely in the process of bidding on Chevron’s Duverney assets.  The Riddell family, which controls Paramount, has an outstanding track record of counter-cyclical value creation. Given that Chevron is a motivated seller and there are few qualified buyers, we expect Paramount to submit a very disciplined bid.  The rumored price of the deal is $900MM USD. At that price, the deal should be highly accretive to Paramount.


International Petroleum Corporation

International Petroleum Corporation (“IPCO”) is an upstream oil and gas company with assets in Canada, Asia and Europe. The business went from strength to strength in 2023 as they beat production guidance, made a final investment decision on its 1.3 billion barrel of oil equivalent Blackrod field , elevated a member of the company’s controlling shareholder to CEO, and bought back 7% of the shares outstanding. 


IPCO’s ability to make so much strategic progress in a weak oil market is a testament to the company’s strong cash generation. At $75 WTI, the company’s existing portfolio of assets generates a 14% FCF yield. This predictable cash generation enabled the company to both commit to the development of the Blackrod project in Alberta while returning over $100 million USD to shareholders through share buy backs in 2023.  IPCO’s combination of rapidly growing production and a shrinking share count is unique in our portfolio of oil and gas companies. 


With over 1.3 billion barrels of oil recoverable and an initial production of 30,000 boepd, the Blackrod project will almost double IPCO’s production. Blackrod already accounts for a majority of the company’s 2P reserves and is far and away IPCO’s most valuable asset. Importantly, with 65% of the construction costs locked in, IPCO will be able to internally finance the project even in a weak oil price environment. 


The company’s ability to both move forward with Blackrod, while at the same time buying back stock, testifies to the Lundin Group’s smart capital allocation decisions. We expect the first oil at Blackrod in late 2026, and when the project completes the ramp-up, Blackrod will boost IPCO’s production and free cash flow generation significantly.


Kosmos Energy Ltd.

Kosmos Energy is an offshore oil and gas company with assets in the Gulf of Mexico and off the west coast of Africa. The company is in the final stages of a multi-year growth plan that will take production from ~60k to ~90k boepd by mid-2024. At $70 Brent and ~90k boepd, Kosmos will generate ~$500 million USD per year in free cash, a 16% free cash flow yield. At an $80 Brent oil price, the free cash likely grows to $750mn, or a 24% free cash flow yield. 


The centerpiece of the company’s growth plan is the Tortue field located off the coast of Mauritania and Senegal. This multi-billion-dollar development is a 50/50 partnership with the supermajor BP. The Tortue field, which is estimated to hold more than 15 trillion cubic feet of gas, will begin producing ~2.5 million tons of natural gas this year with an estimated 30 years of reserve life. Importantly, the Tortue field is just one part of the significant acreage Kosmos holds in Mauritania and Senegal where their total estimated inventory ranges from 50-100 tcf of gas. Kosmos plans to bring additional LNG projects online from these fields every couple of years over the next decade. 


The development of such a massive LNG project requires a world-class team.  BP is the operator, but Kosmos discovered the assets and is working closely on all aspects of the project. Kosmos’ close partnership with BP is a testament to the quality of the team that Kosmos’ CEO, Andy Inglis, has built. Andy, the former head of BP’s global exploration and production business, has been able to attract top tier talent as the supermajors de-emphasized deep water exploration. 


Andy also understands the importance of generating a rapid payback on Kosmos’ investments.  Accordingly, he has organized the Kosmos portfolio around existing infrastructure, allowing for quick and cheap tiebacks in the case of exploration success. Once Kosmos’ first LNG project is online next year, we expect Kosmos to re-rate significantly.  Longer term, we expect Kosmos to continue to grow by bringing their already discovered resources online with internally generated capital. 


Galiano Gold Inc.

Galiano Gold Inc. is a single asset gold producer that operates and manages the Asanko Gold Mine in Ghana. The Asanko Gold Mine went into production in January 2016 and had historically been a 45%/45% joint venture between Galiano and Gold Fields, with the Government of Ghana owning the remaining 10% equity interest. 


On the 21st of December 2023, Galiano announced a binding agreement to purchase Gold Field’s 45% interest in the Asanko Gold Mine for US$20 million in shares, a 1% royalty on up to 447,000 ounces, and future cash considerations of up to US$85 million. This transaction is immediately accretive to Galiano on a cash flow basis and puts a 2.1 million ounces of proven and probable reserves on Ghana’s highly prospective Asankrangwa gold belt entirely under the control of Galiano Gold. Pro-forma, the company has no debt, ~$130 million in cash and a market capitalization of ~$230 million – a valuation which still doesn’t remotely capture the value of the asset. 

 

While this transaction has been discussed for years, it appears that the internal politics at Gold Fields dictated the final timing of the deal. It is noteworthy that this agreement was struck just prior to Michael Fraser’s accession to Gold Field’s CEO role on January 1st, 2024. With this deal now inked, Michael will be free from time consuming JV decision-making process that the historic ownership structure produced. 

 

The transaction is structured to ensure Galiano’s successful expansion, with the timing of future cash payments coming after the cash flow of the asset increases. We expect Galiano’s technically strong management team will waste no time increasing the company’s production to ~240,000 oz per year. 


Organizational Update

In December, we parted ways with Daniel Schreck and Stephen Saroki. 


Daniel joined Equinox Partners in 2009. Over the past 14 years he worked closely with our clients, cultivated new prospects, and oversaw a significant upgrade in our client communications. Daniel’s client responsibilities have been assumed by Kieran Brennan, who joined us in January 2021 and has been working with Daniel for the past 3 years. 


Following a summer internship in 2016, Stephen Saroki joined our team as a full time research analyst in 2018. While a generalist by training, Stephen spent most of his time analyzing gold and silver miners. His company coverage has been picked up by Coille, Alfredo, and Sean. 


We wish both Daniel and Stephen well in their next endeavors. Our team of 11 professionals now consists of six investment professionals and five in operations. 


Sincerely,


Equinox Partners Investment Management

end notes

[1] Please note that estimated performance has yet to be audited and is subject to revision. Performance figures constitute confidential information and must not be disclosed to third parties. An investor’s performance may differ based on timing of contributions, withdrawals and participation in new issues.


Unless otherwise noted, all company-specific data derived from internal analysis, company presentations, Bloomberg, FactSet or independent sources. Values as of 12.31.23, unless otherwise noted.

 

This document is not an offer to sell or the solicitation of an offer to buy interests in any product and is being provided for informational purposes only and should not be relied upon as legal, tax or investment advice. An offering of interests will be made only by means of a confidential private offering memorandum and only to qualified investors in jurisdictions where permitted by law.

 

An investment is speculative and involves a high degree of risk. There is no secondary market for the investor’s interests and none is expected to develop and there may be restrictions on transferring interests. The Investment Advisor has total trading authority. Performance results are net of fees and expenses and reflect the reinvestment of dividends, interest and other earnings.

 

Prior performance is not necessarily indicative of future results. Any investment in a fund involves the risk of loss. Performance can be volatile and an investor could lose all or a substantial portion of his or her investment.

 

The information presented herein is current only as of the particular dates specified for such information, and is subject to change in future periods without notice.

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. 
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