Strategic M&A by a Near-Term Gold Producer / A New Metric for Predicting Bitcoin Prices

FRC Top Picks

The following table shows last week&rsquo;s top five performers among our Top Picks, including four junior resource companies, and an Adtech company. The top performer, World Copper (TSXV: WCU) , was up 23% . WCU is advancing multiple copper projects in the Americas.

Top Five Weekly Performers WoW Returns World Copper Ltd. (WCU.V) 23.1% Southern Silver Exploration Corp. (SSV.V) 18.4% Kidoz Inc. (KIDZ.V) 17.0% Noram Lithium Corp. (NRM.V) 12.5% Fortune Minerals Limited (FT.TO) 10.0% * Past performance is not indicative of future performance (as of May 6, 2024) Source: FRC

Last week, companies on our Top Picks list were up 0.4% on average vs 0.1% for the benchmark (TSXV). Our top picks have outperformed the benchmark in all of the seven time periods listed below.

Performance by Sector

Total Return 1 Week 1 mo 3 mo 6 mo 1 yr 3 yr Since launch Mining -0.9% 4.3% 23.2% 18.4% -2.9% -47.1% 9.1% Cannabis N/A N/A N/A N/A N/A -43.4% -23.6% Tech 17.0% -10.0% 170.0% 50.0% 0.0% -31.4% -3.8% Special Situations (MIC) 1.7% -1.8% -2.5% 15.3% 23.7% -15.4% -11.1% Private Companies N/A N/A N/A N/A 6.7% 20.5% 30.5% Portfolio (Total) 0.4% 2.6% 21.4% 18.0% 2.3% -23.5% 6.0% Benchmark (Total) 0.1% 0.7% 7.5% 13.5% -5.0% -38.3% -33.5% Portfolio (Annualized) - - - - 2.3% -8.6% 0.6% Benchmark (Annualized) - - - - -5.0% -14.9% -3.9% 1. Since the earliest initiating date of companies in the list of Top Picks (as of May 6, 2024) 2. Green (blue) indicates FRC's picks outperformed (underperformed) the benchmark. 3. Past performance is not indicative of future performance. 4. Our complete list of top picks (updated weekly) can be viewed here: Top Picks List

Weekly Mining Commentary

Last week, global equity markets were up 0.5% on average (up 1.5% in the previous week). Despite the Fed confirming no imminent interest rate cuts, sluggish jobs data and rising unemployment spurred equity markets higher, and the US$ lower.

Source: FRC / Various

Last week, metal prices were down 1.1% on average (up 0.4% in the previous week).

Gold producer valuations were down 3.4% last week (up 0.9% in the prior week); base metal producers were up 0.1% last week (up 3.9% in the prior week). On average, gold producer valuations are 20% lower compared to the past three instances when gold surpassed US$2k/oz.

22-Apr-24 29-Apr-24 06-May-24 Gold Producers EV / R (forward) EV / EBITDA (forward) EV / R (forward) EV / EBITDA (forward) EV / R (forward) EV / EBITDA (forward) 1 Barrick 3.11 6.60 3.10 6.58 3.09 6.63 2 Newmont 3.09 7.29 3.35 7.80 3.17 7.37 3 Agnico Eagle 4.52 8.80 4.53 8.58 4.44 8.49 4 AngloGold 2.18 5.02 2.15 4.96 2.09 4.74 5 Kinross Gold 2.36 5.49 2.34 5.36 2.29 5.16 6 Gold Fields 3.01 5.52 3.09 5.60 2.84 5.19 7 Sibanye 0.76 3.75 0.74 3.68 0.71 3.53 8 Hecla Mining 4.68 17.18 4.43 16.55 4.16 15.53 9 B2Gold 1.89 3.74 1.84 3.66 1.75 3.50 10 Alamos 4.79 8.78 4.92 9.36 4.85 9.14 11 Harmony 1.70 4.88 1.74 5.10 1.67 4.88 12 Eldorado Gold 2.52 5.28 2.48 4.93 2.32 4.75 Average (excl outliers) 2.72 5.92 2.75 5.96 2.66 5.76 Min 0.76 3.74 0.74 3.66 0.71 3.50 Max 4.79 17.18 4.92 16.55 4.85 15.53 Industry (three year average) 110.70 116.70 110.70 116.70 110.70 116.70 Base Metal Producers EV / R (forward) EV / EBITDA (forward) EV / R (forward) EV / EBITDA (forward) EV / R (forward) EV / EBITDA (forward) 1 BHP Group 2.98 5.70 2.89 5.55 2.91 5.60 2 Rio Tinto 2.25 4.82 2.32 4.96 2.32 4.93 3 South32 1.43 6.70 1.52 7.12 1.57 7.40 4 Glencore 0.44 6.01 0.45 6.11 0.44 5.87 5 Anglo American 1.66 4.97 2.03 6.05 2.00 5.95 6 Teck Resources 2.65 5.98 3.05 7.06 3.00 6.93 7 First Quantum 4.19 14.04 3.93 13.30 3.97 13.44 Average (excl outliers) 2.23 6.89 2.31 7.16 2.32 7.16 Min 0.44 4.82 0.45 4.96 0.44 4.93 Max 4.19 14.04 3.93 13.30 3.97 13.44 Source: S&amp;P Capital IQ &amp; FRC

We are maintaining our metal price forecasts.

Weekly Crypto Commentary Prices of mainstream/popular cryptos were up 7% on average last week (down 1% in the previous week).

May 6, 2024 Cryptocurrencies 1-Week 1-Year Bitcoin 9% 119% Binance Coin 5% 83% Cardano 3% 22% Ethereum 4% 62% Polkadot 10% 27% XRP 6% 20% Polygon 3% -26% Solana 14% 592% AVERAGE 7% 112% MIN 3% -26% MAX 14% 592% Indices Canadian 1-Week 1-Year BTCC 4% 125% BTCX 3% 135% EBIT 3% 132% FBTC 4% 36% U.S. 1-Week 1-Year BITO -3% 63% BTF 3% 72% IBLC 0% 58% Source: FRC/Yahoo Finance

The global MCAP of cryptos is US$2.51T, down 7% MoM, but up 104%YoY.

Total Crypto Market Cap Chart

Source: CoinGecko

Last week, BTC was up 9%, while the S&amp;P 500 was up 1%.

Source: FRC/ Yahoo Finance

The global hash rate of BTC (defined as calculations performed per second/an indicator of network difficulty) is 600 exahashes per second (EH/s), down 6% WoW, but up 1% MoM. The decrease in hash rates is negative for miners as their efficiency rates (BTC production per EH/s) are inversely linked to global hash rates.

Total Hash Rate (BTC)

The following chart tracks BTC prices vs the Realized HODL ratio (RHODL) , which gauges the activity of short-term holders relative to long-term holders. A rising RHODL indicates increasing short-term buying. Historically, BTC prices have moved in tandem with this ratio. By tracking the RHODL, we believe we can identify potential turning points in BTC prices.

Source: FRC/ Various

Companies operating in the crypto space are trading at an average EV/R of 6.9x (previously 8.0x).

Source: S&amp;P Capital IQ/FRC

May 6, 2024 Crypto Companies Ticker TEV/Revenue Argo Blockchain LSE: ARB 2.7 BIGG Digital CSE: BIGG 7.8 Bitcoin Well TSXV: BTCW 0.7 Canaan Inc. NASDAQ: CAN 0.5 CleanSpark Inc. NasdaqCM:CLSK 16.8 Coinbase Global NASDAQ: COIN 13.9 Galaxy Digital Holdings TSX: GLXY N/A HIVE Digital TSXV:HIVE 2.8 Hut 8 Mining Corp. TSX: HUT 8.2 Marathon Digital Holdings NASDAQ: MARA 12.3 Riot Platforms NASDAQ: RIOT 8.2 SATO Technologies TSXV: SATO 2.0 AVERAGE 6.9 MEDIAN 7.8 MINIMUM 0.5 MAXIMUM 16.8 Source: S&amp;P Capital IQ/FRC

Strategic M&A by a Near-Term Gold Producer / A New Metric for Predicting Bitcoin Prices

Key Highlights

Index