1/7 Scale & scalability. Beyond the usual project metrics (NPV, IRR, capex intensity, etc), Scale and particularly project SCALABILITY figure prominently into my investment decisions for gold developers. $MAI.v, $MKO.v, & $RIO.v.

2/7 Scale: early in a cycle (now) when Au prices are rising & industry congestion is benign, investors seek out assets/cos that offer resource scale (leverage to Au). In an industry short on multi-mln oz discoveries & lack of depth in dvp pipelines, this works… until it doesn’t.

3/7 Scalability: For most deposits (ex those w/ world-class IRR’s), Scale without Scalability usually leads to late-cycle dvp decisions as all stars need to align to get investors/boards on side = incr exposure to industry congestion = acute capex/timeline/execution risk.

4/7 Projects w/ scalability (or low capex intensity) can better navigate a congested construction environment. Last cycle it took ~8 yrs (by ~2010) for industry to get congested & for investors to pivot en masse to cos w/ executable growth projects (scalable/bite size).

5/7 This cycle, w/ inv better versed on risks w/ capex intensive projects, exec comp more tied to return metrics & generalist focus on per sh metrics & s/h returns, features that make a project executable (scalable/low capex intensity) to carry significant wt in M&A decisions.

6/7 Features to look for: heap leaching (lower capex intensity); start small(er) options for milling ops w/ higher margin starter zones (higher grade, lower strip, soft rock) ; or bootstrap an existing mill to get into prod’n w/ less exposure to industry congestion risks

7/7 For now, I maintain exposure to leverage plays (“story stocks”), but on industry congestion (a flurry of +ve dvp decisions) I am out & will stick w/ dvp cos that offer scalability/lower capex intensity = current approach of $MAI.v (own), $MKO.v (own), & $RIO.v (want)