Contrarian Codex — Newsletter #122: Weakness Continues Across the Board

Cameco is the world's largest publicly-traded uranium miner, headquartered in Canada and dual-listed on the NYSE and TSX. Think of it as the anchor of the Codex uranium basket — it is the name utilities call first when they need to sign a long-term fuel supply contract. Cameco owns Cigar Lake (the world's highest-grade producing uranium mine) and a 40% stake in Inkai in Kazakhstan. At current spot prices it generates solid free cash flow; at the higher contract prices the new utility contracting cycle is moving toward, the earnings leverage is significant.

No news this issue — Mart holds CCJ as the quality anchor in a basket that is otherwise weighted toward higher-beta developers. The role here is not to provide the biggest return; it is to provide the most durable one and to ensure the basket has a large, liquid name that can absorb size when the time comes to add.

Denison is a pure-play uranium developer whose flagship asset is Wheeler River in Saskatchewan's Athabasca Basin — one of the highest-grade uranium deposits in the world. The differentiating wrinkle: Denison is pursuing in-situ recovery (ISR) at Wheeler River, which means dissolving the uranium underground with a chemical solution and pumping the uranium-bearing liquid to surface — instead of digging a conventional open-pit or underground mine. If ISR works at Athabasca grades (it has never been done before at this scale), the capital cost drops dramatically and the margin structure looks more like a chemical facility than a mine.

Mart has held Denison at a cost basis of $0.35 with 80% allocation — a high-conviction bet that ISR unlocks the economic case for one of the largest undeveloped uranium deposits on the planet. No news this issue; the Wheeler River permitting and engineering process continues in the background.

enCore is a US-based ISR uranium producer with assets in Texas (Alta Mesa East) and Wyoming (Dewey Burdock). ISR is the same in-situ dissolution technology Denison is trying at Wheeler River — except enCore is already doing it commercially, making it one of the very few domestic US uranium producers. That matters because Washington's push to rebuild a domestic uranium supply chain — and reduce dependence on Russian or Kazakh enrichment — gives US-soil producers a strategic positioning that foreign-hosted names cannot match.

Alta Mesa East and Dewey Burdock are both advancing; as they come online they add production pounds that simply do not exist elsewhere in the US today. Mart holds at a cost basis of C$2.81, 100% allocated, watching the production ramp as the primary near-term catalyst. Alta Mesa East + Dewey Burdock news this issue is constructive — both projects moving through development milestones on schedule.

AbraSilver is a silver-gold developer whose flagship is Diablillos in Argentina's Salta province. The Definitive Feasibility Study delivered in this issue carries numbers that are not junior-explorer territory: $3.0bn base-case NPV and $4.8bn bull-case NPV. What makes Diablillos unusual beyond the size is that it is fully permitted — Argentina's mining approval process can take years and the project has cleared it — and RIGI-compliant. RIGI is Argentina's large-investment incentive framework that locks in tax, royalty, and foreign-exchange terms for 30 years, eliminating one of the biggest political risk variables that has historically made Argentine resource projects uninvestable for international capital.

The market has not yet awarded ABRA a premium for being one of the few development-stage silver-gold projects in the Western Hemisphere with a DFS, full permits, and a 30-year fiscal lock-in simultaneously. The gap between the asset's stated NPV and ABRA's current market cap is where the thesis lives. Cost basis C$0.33, 50% allocated — Mart is building.

Andean PM holds a silver royalty over the Apogee project in Argentina, plus a direct ownership stake. The royalty generates actual cash flow right now — unusual for a junior silver name that most investors would expect to be pre-revenue. The result is a company trading at roughly 2× EBITDA with a free cash flow yield above 20%, which by any traditional value metric is extremely cheap.

The Silver Elephant / Apogee lawsuit is a legal complication Mart is monitoring, but his take is straightforward: the valuation is so compressed relative to cash flow that you are being paid to wait regardless of the legal outcome. At a >20% FCF yield the market is pricing in catastrophic risk; Mart thinks the discount is too steep and holds at C$0.64, 75% allocated. If the lawsuit resolves favorably, the re-rating could be sharp; if it doesn't, the cash flow still supports the current price.

Rio2 is a dual-asset gold company in Peru. The ticker is RIO.V on the TSX Venture Exchange — not to be confused with Rio Tinto (NYSE: RIO), which is a completely different, much larger mining conglomerate. The two assets: Condestable, a producing copper-gold mine with a $710m NPV expansion opportunity, and Fenix, a greenfield gold project with approximately $1.3bn NPV. The Condestable asset provides current cash flow that funds the Fenix development, making this a self-funding two-project story — unusual at this market cap level.

Peru's sovereign risk — taxation policy, community relations, permitting — is the persistent shadow over Rio2 and over every Peru-based miner. Mart holds at C$0.55 cost basis, 50% allocated, knowing that the sovereign overlay is the price you pay for this level of asset value at this price. The gap between the sum-of-the-parts NPV and the current market cap is the thesis; the Peru risk is why the gap exists.

Comstock is a cellulosic ethanol company — it converts woody biomass (wood waste, agricultural residues, forestry slash) into fuel-grade ethanol and chemical feedstocks using a proprietary enzymatic process. The Las Vegas-area facility is in commissioning right now, and each plant is designed to generate approximately $75m in annual revenue at steady state. The business model is to build, commission, license the technology, and collect revenue-share from third-party operators — making this a potential royalty-style compounder if the licensing pipeline fills.

The Mackay deal ($45m+ in anticipated revenue) and the Ohio hub in development demonstrate the model is being replicated beyond the flagship facility. Mart holds at $2.36 cost basis, 100% allocated — a high-conviction bet that the commissioning timeline delivers. The key risk is that cellulosic biofuel projects have a long history of commissioning delays and cost overruns; Mart sizes this knowing that risk and notes commissioning execution is the primary near-term signal to watch.

LibertyStream extracts lithium from oilfield brine — the salty water that comes up alongside oil and gas production, which the industry has historically treated as a waste disposal problem. The company's bipolar-electrodialysis process separates the lithium from the brine at a target cost of approximately $25,000 per tonne of lithium carbonate equivalent. That is competitive with hard-rock spodumene mining in a mid-price lithium environment and significantly cheaper than direct lithium extraction from standalone brine operations at scale.

LIB is listed on the TSX Venture Exchange (CVE) with a US OTC presence; a full US exchange uplisting is targeted, which would significantly broaden the investor base. Mart holds this at $0.45 cost basis, 100% allocated, as the sole lithium exposure in the Codex "Other" basket — deliberately one name, sized deliberately, because lithium is a high-variance commodity with a history of disappointing shareholders. The technology differentiation versus conventional lithium sources is the core bet.

ASP Isotopes enriches stable isotopes — not the radioactive kind used in nuclear reactors, but specialty isotopes used in medical imaging (Molybdenum-100 for PET/CT scans), research, and industrial applications. The enrichment technology uses aerodynamic separation (the "ASP" process) rather than centrifuges, giving it a different cost curve and a different geopolitical risk profile than conventional uranium enrichers.

Two developments this issue: first, a helium take-or-pay contract locked in at >$600/MCF — well above current spot — de-risks a meaningful revenue stream. Second, the Noble Africa spin via ENDRA reverse merger diversifies the asset base into African noble gas and specialty isotope supply, adding geographic and commodity breadth. The stock is -11% on dilution concerns from the ENDRA transaction; Mart still holds at $3.84 cost basis, 100% allocated, characterising the drawdown as a bump in a long runway rather than a thesis break. Neutral stance reflects the dilution uncertainty, not a change in long-term conviction.

Surge Copper is a personal holding of Mart's — it is not in the official Contrarian Codex portfolio, but he owns it personally and shares the Berg Prefeasibility Study result as relevant context for the copper section of the newsletter. Berg is a large copper-gold-molybdenum porphyry deposit in British Columbia: 2.0:1 strip ratio, 120,000 tonnes per day throughput, -US$0.17/lb by-product C1 cost after gold, silver, and molybdenum credits, C$9.4bn NPV at a 5% discount rate, 36% IRR, 1.8-year payback on C$4.7bn initial capital.

The -$0.17/lb C1 cost is the number that demands attention: it means Berg's copper is effectively free after by-product revenues, placing it in the lowest-cost decile of the global copper supply curve. The market cap of Surge is a fraction of the project NPV because building a C$4.7bn mine requires either a major mining company as a partner or acquirer, or transformative project financing — neither of which is available to a junior on its own. That gap between what the asset is worth and what the market is paying for the shares is what Mart is holding for. The Berg PFS transforms what was a promising exploration story into a fully-costed, economically-modelled tier-1 copper development project.