Mine Visit Note: Perseus

EQUINOX PARTNERS - Precious Metals Miners
Site visit—Perseus Mining
February 2020

Dates February 6-11, 2020

Mines Visited Yaoure, Sissingue, and Edikan

Countries Visited Cote d’Ivoire and Ghana

Analyst Coille Van Alphen

OVERVIEW

Perseus (PRU Australia) is a gold miner with two operating mines and one mine in development in West Africa. The company is well capitalized and has top tier management, good governance and can execute in a tough jurisdiction. PRU is a 2% position in the SMAs.

metrics

Market Cap $900m USD
Enterprise Value $907m USD
EV/CF 5.1x 2020 estimate cash flow
P/NAV (5% discounts) 0.6x
Resources 6.5m ounces of gold
EV/Resource $141 per ounce of gold
Reserves 2.9m ounces of gold
EV/Reserves $309 per ounce of gold
All-in-sustaining cost $888 per ounce of gold

Thesis

Perseus Mining has two producing assets and is in the middle of constructing its third asset, Yaoure, in Cote d’Ivoire. Once Yaoure is commissioned, the company should produce ~500,000 oz. by 2021 and generate substantial FCF (~USD$125m per year at $1700 gold). Yaoure has the potential to provide PRU with a “cornerstone asset” from which they can start to upgrade the portfolio metrics. The company trades at 0.6x P/NAV and is not covered by any sell side analysts because of its 2014 operational failure at Edikan. Management replaced several key people in 2014, and the company has clearly demonstrated operational stability at Edikan. Generating FCF from low grade material in Ghana is challenging at the best of times, but PRU has achieved plant and mine stability over the last 12 months and I am optimistic they have finally found the right balance.

Trip summary

Overall, the trip was well run, informative, and I left having a better understanding of their operational strengths which weren’t evident prior to seeing the assets. The one thing that particularly stood out from the tour is the very conservative nature of the company: from security protocols to resource modeling, the company doesn’t want to lose the market credibility they have built up over the last 18 months which is stemming from more consistent operations. The company has learned a lot from building Sissingue, a small mine footprint, which they are applying to Yaoure and should enable them to meet capex and construction timelines of Q1 2021.

By the end of this quarter (Q1 2020) they will have paid back their initial capex of $106M at Sissingue, and they are trying their best to extend the mine life to generate as much FCF as possible. Edikan was working much better than it looks on paper, and I have more confidence in their current LOM plan, and am keen to see what the new exploration targets generate. Processing ~1 gpt rock in Ghana is marginal, but they seem to have reached an inflection point where they can consistently generate FCF. They have not historically had a lot of additional FCF to spend on exploration at any of the assets due to patchy operational success, but they are starting to spend money on this area now due to a growing cash balance. Their exploration approach seems quite sensible, and they are willing to allocate more capital based on results.

Management and governance

Jeff Quartermaine, CFO of PRU during all of Edikan’s previous woes and Managing Director (CEO) since 2014, personifies the company’s conservative culture. Andrew Grove has recently been brought on in an IR/Corp development role and does a good job of providing a more enthusiastic face to the market, while also being very qualified for corporate development given his time at Macquarie. In terms of compensation, it should be noted that their compensation packages are very modest when compared to their North American peers.

JURISDICTIONO

Cote d’Ivoire is a high-risk country: the upcoming election outcome is very uncertain, but with President Ouattara and Gbabgo both out of the race, the election outcome should not spark civil disorder. Ghana is a medium risk country: there is also a presidential election in 2020 and growing frustration with mining taxes not reaching the local communities. Within the Cote d’Ivoire, a 0.5% royalty goes to the community in the form of a fund called the CDLM. The fund is composed of two individuals from each impacted community, along with one person from PRU. At the moment, most of the money is going towards infrastructure, but as they get further up the development curve they would like it to transition to education.

Corporate Social Responsibility (CSR)

In Ghana, because the royalty that is supposed to be paid to the community is not reaching the community, PRU decided to allocate USD$300,000 per year towards a fund in order to win the trust of the community. From the surface, it doesn’t appear they are doing anything beyond basic infrastructure, basic health, and basic education. I would

like to see the CSR projects more advanced at Yaoure, given the community started with a higher level of development versus the other mine sites. This being said, the communities were all welcoming and happy to have us walk around and see the various infrastructure initiatives.

Security

The Security costs in Cote d’Ivoire have picked up. The company is monitoring the election in December because they worry that if Ouattara (the current president) doesn’t step down and give it to the second in line, then another civil war could break out. Flights started once per week in January 2020 from Sissingue in order to limit the use of roads. In Abidjan, we stayed in a hotel that had the most stringent bomb checking measures I have ever been through. While we were allowed to go out for one meal, the rest of the time we were not allowed to the leave the hotel ground.

In Ghana, the security tone was much more muted: they drove us 8 hours to the airport without a security convoy. The roads in Ghana were far worse than I remembered, and I could see why there is growing frustration with the level of infrastructure in the country.

Catalysts

Perseus will publish a new life-of-mine plan (LOM) shortly. It will use $1300 versus the current $1250/oz., which should have a positive impact by bringing in additional ounces (particularly Edikan). Because PRU’s LOMs are quite short, this should be meaningful to the valuation. Overall, I will add ~1 year of production at Sissingue and ~3 years at Edikan. Bringing in Yaoure on time and on budget will also help, but I think exploration success at the asset will be more meaningful to cement it as their cornerstone asset.

MINES

Edikan (90% interest)

Their COO has had a very large impact on the organization. Chris came from Barrick/Goldcorp, and is energized about turning around operations. I attribute his arrival to Edikan’s recent consistency. His impact at Edikan is obvious, as they have really started to make sustainable progress keeping the mill recoveries stable.

LOM gold production is currently expected to be 1.08 million ounces over the remaining 6 year mine life; however, there is potential to extend the current mine life through exploration and inclusion of the Esuajah South and the AG pit optimization into the LOM.

Esuajah South: the potential material could be removed by open pit and or underground mining at Esuajah South (ESS) but part of the reason they prefer the underground option is because it reduces the number of people impacted (and therefore relocated). The open pit option would require relocating essentially half the town, which would be a very significant cost. They had to relocate 200 homes, along with a church, police station etc. The topography was a little more difficult (on top of a hill) which increased the cost. The cost was $25 million. This relocation gives them plenty of flexibility though to expand the relocation area with more houses if necessary.

The nameplate capacity of the mill is 5.5Mtpa but they are currently doing 7.5Mtpa. The addition of the Mill Slicer (an initiative put in place by Chris) has been an upgrade that has also led to several additional improvements in the mill. They usually use grid power, but the transmission of grid power isn’t consistent so they have added generator sets. They are now working with GenSer who is providing another source of stable power and will lower their power costs. Keeping the mill going is particularly important there given the grade—every hour the mill is down costs them ~$500 oz.

Continuous improvement has been started and they are identifying 2nd order projects to work on. They believe they have executed on the obvious first pass projects. They added a carbon column to reprocess the tailings water which is now adding 500 oz per month. The cost of carbon column was paid back in three weeks.

Exploration at Edikan: The company has recently changed out its exploration team because they needed “new blood”. Targets that had been previously identified as unlikely are now proving to be much more interesting. They have also identified some new areas (don’t have the ground yet) that have many artisanal miners working on it. They are going to be spending ~$6.5 million in 2020. While it is difficult to quantify how many more ounces are there, I was the most optimistic about the mine’s upside vs. the rest of the portfolio. The Anikokoso prospect and the Agyakusu prospects are the targets we should be monitoring for progress.

Yaoure (90% interest)

The main takeaway is that the project is roughly on schedule and running slightly below budget. At the moment they are forecasting it to cost $258m vs. the $265m in the feasibility study; however, they are only 35% through construction. They are still targeting initial production for December 2020, but that is a stretch goal. At the moment, the FS outlines Yaouré’s life of mine gold production to be 1.4Moz at an AISC of USD$759/oz over 8.5 year. This study doesn’t include the initial underground inferred resource of 595 koz grading 6.2 g/t gold. I would expect ~50% of those ounces to con vert to reserves and make it into a mine plan which would further extend mine LOM by ~1.5 years. Currently within the Cote d’Ivoire there isn’t an underground mining convention, so they need to work through this before they can upgrade to a reserve and provide economics around those ounces.

All major contracts have been awarded, and so far EPC work is on schedule and there have been no major scope changes. They are clearly having some issues getting items released at the port, which is impacting various things but nothing on the critical path at the moment.

The project is much closer to infrastructure and people than Sissingue is, which will have positive and negative impacts on the project. The communities have much higher expectations. They have 5 impacted communities, along with a 6th that they include despite it technically not being in the catchment area. They include it because they feel it is close enough to be included and want to keep the expectations the same for all communities nearby. At the moment, they are employing 56% of the workforce from the local communities, and they would like to increase this figure to 60% once production starts. In addition to employing locals the government mandates that 0.5% of revenue must go back to communities and the communities decide how to allocate that money.

Exploration at Yaoure: They have some additional targets; Sayiko is the next key target. They need to remove the artisanal workers before they are able to mobilize a rig to test it, despite it being on their mining lease. They continue to believe it’s a large system, but so far they haven’t found anything meaningful. They have had a few “technical successes” but haven’t vectored in on the next CMA pit. It should be noted though that they haven’t spent a lot of money on exploration, so they are in the very early stages of exploration on the rest of the ground.

Sissingue (86% interest)

The mine started in 2018, exiting construction ahead of time and on budget. Currently the mine is producing 80,000 oz. per year from 3 pits. The flowsheet and mill are basic, but it has been running closer to 1.4 Mtpa due to blending (nameplate capacity of the mill is 1Mtpa). The recoveries have also been slightly better at ~94% vs. the 90% outlined in the FS. They believe, based on what they have milled so far, that as they transition to 100% fresh rock the recoveries should not drop to 86% as outlined in the FS. They think they can keep them around 90-94%, which would be an incremental positive. Maintenance (and therefore productivity) has been an issue, but the contractor has compensated for this by having extra equipment around.

Exploration at Sissingue: Zanikan is the most tangible exploration target that they have. They think it could at ~9 months of production. Sissingue doesn’t look like it has a lot of additional upside, so the likely outcome is that the mill is packed up and moved to a new deposit in country. Lykopodium has told them that relocating the mill would save them ~$30- $40m in capex.

*** END ***

*Figures and statements as of February visit. This is an internal research note written by an analyst employed by Mason Hill Advisors, LLC. It is not intended for distribution. This information was intended exclusively for the person to whom it was delivered and ought not to be distributed further. Opinions are expressed throughout this note as of the date of the note. Opinions can be wrong or can prove to be right. Investment decisions are made in part as a result of mine visits and company discussions, but not exclusively so.

Past performance is not a guarantee of future results. Any investment in a fund or managed account entails a risk of loss, including the entire amount invested. Performance is shown net of management fees, performance fee, and expenses, for each series in the consolidated managed account unless otherwise indicated. Account values are presented gross. Index returns adjusted for inception date of accounts. All performance is unaudited and based on valuations prepared by the adviser and is subject to revision. Net exposure includes short position exposure. See the End Notes on the following page for more important information regarding the performance information shown.

End Notes

THIS INFORMATION IS INTENDED EXCLUSIVELY FOR THE PERSON TO WHOM THIS WAS DELIVERED WHO IS DEEMED TO BE A PROFESSIONAL FAMILIAR WITH FINANCIAL INSTRUMENTS AND HEDGE FUND PRODUCTS IN PARTICULAR. ANY FURTHER USE BY AND/OR DELIVERY TO A THIRD PERSON IS STRICTLY PROHIBITED AND ALLOWED ONLY AFTER THE PRIOR EXPRESS WRITTEN CONSENT OF MASON HILL ADVISORS, LLC. THIS INFORMATION IS CREATED SOLELY FOR INFORMATIONAL PURPOSES WITH THE EXPRESS UNDERSTANDING THAT IT DOES NOT CONSTITUTE: (I) AN OFFER, SOLICITATION OR RECOMMENDATION TO INVEST IN A PARTICULAR INVESTMENT; (II) A MEANS BY WHICH ANY SUCH INVESTMENT MAY BE OFFERED OR SOLD; OR (III) ADVICE OR AN EXPRESSION OF OUR VIEW AS TO WHETHER A PARTICULAR INVESTMENT IS APPROPRIATE. NO SALE OF SHARES OR INTERESTS WILL BE MADE IN ANY JURISDICTION IN WHICH THE OFFER, SOLICITATION OR SALE IS NOT AUTHORIZED OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE THE OFFER, SOLICITATION OR SALE. ANY OFFERING OF SHARES OR INTERESTS BY AN INVESTMENT FUND WILL BE MADE SOLELY PURSUANT TO THE PRIVATE PLACEMENT MEMORANDUM PREPARED BY AND FOR SUCH INVESTMENT FUND AND WILL CONTAIN MATERIAL INFORMATION NOT CONTAINED IN THIS DOCUMENT. ANY DECISION TO INVEST IN ANY SHARE OR INTEREST OF ANY INVESTMENT FUND SHOULD BE MADE SOLELY IN RELIANCE UPON THE PRIVATE PLACEMENT MEMORANDUM AND ANY SUPPLEMENTAL DOCUMENTS. FURTHER, AS A CONDITION TO PROVIDING THIS INFORMATION, MASON HILL ADVISORS, LLC SHALL HAVE NO LIABILITY, DIRECT OR INDIRECT, TO ANY OTHER ENTITY ARISING FROM THE USE OF THIS INFORMATION.

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Precious Metals Fund - Q3 2025 Letter

By Kieran Brennan • October 31, 2025

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

Equinox Partners, L.P. - Q3 2025 Letter

By Kieran Brennan • October 30, 2025

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

Kuroto Fund Wins 2025 HFM US Global Equity Award

By Kieran Brennan • October 30, 2025

Kuroto Fund Wins HFM 2025 US Performance Award

Kuroto Fund, L.P. - Q3 2025 Letter

By Kieran Brennan • October 30, 2025

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

Precious Metals Fund - Q2 2025 Letter

By Kieran Brennan • August 1, 2025

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

Equinox Partners, L.P. - Q2 2025 Letter

By Kieran Brennan • July 24, 2025

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

Kuroto Fund, L.P. - Q2 2025 Letter

By Kieran Brennan • July 23, 2025

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

Precious Metals Fund - Q1 2025 Letter

By Dan Donohue • May 1, 2025

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

Kuroto Fund, L.P. - Q1 2025 Letter

By Kieran Brennan • April 30, 2025

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