Recording date: 8th October 2026 September exposed a widening gap between commodity prices and resource equities. Most commodities rose over the month, yet every major resource-linked equity index fell. In this Compass episode, Samuel Pelaez and Derek Macpherson of Olive Resource Capital (TSXV:OC) argue that this dislocation stems from macro forces rather than deteriorating fundamentals, and that it is creating entry points in high-quality, liquid producers. The macro pressures are significant. Fed Chair Kevin Warsh signalled a renewed focus on inflation at Jackson Hole, and the September rate hike was followed by markets pricing in a high probability of several more. Long-term bond yields are rising in both the US and Europe, with France prominent. Elections are approaching in the US, Spain and France. Energy prices remain high, which Macpherson attributes mainly to limited Western refining capacity. Equity market gains are concentrated in semiconductors and AI-related technology, while investors seeking commodity exposure increasingly use futures, leaving mining equities behind even as copper trades near record levels. Operational results have not been the problem. Pelaez noted strong Q3 production updates from several producers, with little share price response. K92 Mining reported another strong quarter on the day of recording, and Macpherson said the company has now passed one million gold-equivalent ounces produced. Olive is responding with patience. The fund holds about 10% cash and is adding gradually, mainly to names it knows well. It expects better prices before US Thanksgiving, possibly helped by selective tax-loss selling, and aims to be almost fully deployed for the January rally it has captured in most of its five years. The fund's current priority is its liquid book. In copper, it holds Ivanhoe Mines, which it views as owning one of the world's best copper mines and one of its best PGM mines, and Ero Copper, whose Furnas project Pelaez believes the market is not valuing. In PGMs, it holds Valterra Platinum, the largest primary PGM producer. It uses Albemarle for lithium exposure and K92 Mining for gold. A recently built energy sleeve includes Freehold Royalties, Woodside Energy and GeoPark, covering royalties, LNG and upstream growth respectively. The core argument is about how to express a commodity view. Macpherson contends that investors do not need to buy small, illiquid explorers to gain PGM, lithium or precious metals exposure. Large producers offer revenue protection, liquidity and the ability to change course quickly. Smaller names tend to gain more later in a cycle, once leadership broadens, and Olive holds some for company-specific catalysts. Macpherson and Pelaez see producers becoming more active earlier in the capital structure. Kinross Gold and Alpayana closed a C$47.1 million financing in Aquitaine Metals, an Olive holding, leaving the French gold explorer with about C$92 million in cash. Kinross has also backed Sun Valley Minerals in Uruguay. These serve as validation that helps juniors in jurisdictions less familiar with mining. For investors, the key watch-items are the path of Fed policy and long-term yields, any narrowing of the gap between commodity prices and equities, and whether seasonal weakness provides the entry points Olive expects before year end. Learn more: https://cruxinvestor.com Sign up for Crux Investor: https://cruxinvestor.com/subscribe
