Kopernik International Fund — Quarterly Commentary

This Quarter Underperformed the Benchmark by Over 21 Percentage Points

Performance Comparison: In the second quarter of 2026, the Kopernik International Fund Class I posted a net decline of 6.56%, while the MSCI ACWI ex-USA Index rose 14.49%, resulting in an underperformance of approximately 21 percentage points. Year-to-date, the fund returned 0.99% versus the index's 13.68%. The author attributes this to extreme market frenzy—semiconductor stocks surged (the DRAM ETF rose 157% from its April launch to the end of June), momentum factors posted their best performance in decades, and Kopernik has historically lagged in such sentiment-driven markets. The author notes that the ACWI index is increasingly driven by U.S. tech stocks (as of 6/30/2026, the U.S. accounted for 63% of MSCI ACWI, and information technology for 32%), while many areas outside U.S. technology have underperformed.

S&P 500 Put Options and the Materials Sector Were the Largest Drags

Performance Comparison: The fund's largest drag was S&P 500 put options, which detracted 1.1%. These options were re-established in April when implied volatility again fell to attractive levels; the fund currently holds options expiring in late July and August. The materials sector as a whole detracted 3.2%. Precious metals companies fell sharply: gold prices dropped 16%, silver 21%, and platinum and palladium fell 21% and 19%, respectively. The energy sector detracted 1.2%. Other drags were spread across multiple industries and regions.

Added to Multiple Positions on Dips, Capitalized on Volatility

Itemized Breakdown:

• Sibanye Stillwater Ltd (Increased): A South African platinum group metals producer, total return -29.1%, detracting 0.3%. The author added to the position at low prices.
• Valterra Platinum Ltd (Trimmed on Strength/Added on Weakness): A South African platinum group metals producer, total return -18.2%, detracting 0.7% (second largest drag). The author opportunistically trimmed and added to the position using price volatility.
• Impala Platinum Holdings Ltd (Trimmed on Strength/Added on Weakness): A South African platinum group metals producer, total return -24.5%, detracting 0.5%. Similarly managed using volatility.
• Glencore PLC (Reduced): A diversified natural resources company, total return -8.0%, detracting 0.2%. The author reduced the position when prices surged.
• K+S AG (Increased): Europe's largest potash producer, total return -19.5%, detracting 0.6%. The author added to the position.
• Nutrien Ltd (Trimmed on Strength/Added on Weakness): The world's largest integrated potash producer, total return -15.1%, detracting 0.2%. Managed using volatility.
• Paladin Energy Ltd (Increased): An Australian uranium producer, total return -15.0%, detracting 0.2%. Added at low prices.
• Petroleo Brasileiro SA (Petrobras) (Increased): A leading Brazilian oil and gas producer, total return -19.8%, detracting 0.2%. Added at low prices.
• Inpex Corp (Increased): A Japanese company with a stake in the Ichthys LNG project in Australia, total return -29.8%, detracting 0.3%. Added at low prices.
• Golden Agri-Resources Ltd (Not Specified): An Indonesian palm oil producer, total return -9.6%, detracting 0.1%.
• LG Uplus Corp (Not Specified): A South Korean telecom company, total return -11.0%, detracting 0.3%.
• KT Corp (Not Specified): A South Korean telecom company, total return -15.6%, detracting 0.3%.
• Novagold Resources Inc (Not Specified): A gold developer with a 60% interest in the Donlin project in Alaska, total return -33.5%, detracting 0.4%.

The Correction in Hard Assets May Be a Godsend for Investors

Market/Macro View: The author's stance is [Bullish]. In the author's own words: "this painful correction in hard assets may be a godsend to investors needing protection from the consequences of current fundamental imbalances in the system." The author references their recent commentary, Bayou Jubilee, as background.

Added to Gold, Agriculture, and KT; Initiated 8 Discounted Positions Including DiDi

Performance Comparison: The fund's total return for the quarter was -1.3%, but the author does not directly compare it to the benchmark, instead focusing on positioning actions and individual stock contributions. Positive contributors included: LG Corp (total return 20.9%, contributing 0.5%), CK Hutchison Holdings Ltd (total return 13.7%, contributing 0.2%), BHP Group Ltd (total return 18.5%, contributing 0.2%), and DL E&C Co Ltd (despite a total return of -1.3%, active position sizing contributed 0.1%).

Position Actions (Itemized):

• Golden Agri (Increased): Added to the position using price volatility.
• KT Corp (Increased): Also added to using price volatility.
• LG Uplus (Trimmed/Added): Opportunistically trimmed and added using price volatility.
• LG Corp (Added/Trimmed): Opportunistically added and trimmed using price volatility.
• BHP (Reduced): Reduced the position.
• DiDi Global Inc. (New Position): Described as "China's Uber," commanding a 70% share of China's ride-hailing market.
• Ayala Corp (New Position): A Philippine conglomerate with interests in real estate, banking, telecom, renewable energy, healthcare, logistics, and mobility.
• EPAM Systems Inc. (New Position): A specialized software engineering company.
• Mosaic Co. (New Position): The largest U.S. phosphate producer and a global potash producer.
• Grupo Financiero Inbursa SAB de CV (New Position): A Mexican financial holding company.
• Champion Iron Ltd (New Position): A Canadian iron ore producer.
• Indah Kiat Pulp and Paper Tbk PT (New Position): An Indonesian integrated producer of pulp, cultural paper, packaging materials, and tissue.
• Orbia Advance Corp SAV de CV (New Position): A Mexican conglomerate with businesses in fluorochemicals, polymer production, precision agriculture, and building infrastructure.
• S&P 500 Index Put Option (Re-established): Re-purchased S&P 500 index put options.
• Japan Petroleum Exploration Co Ltd (Re-established): A Japanese oil and gas exploration and production company, added as prices fell to attractive levels.
• Suzuken Co Ltd (Re-established): A Japanese pharmaceutical distributor, also added due to price declines.
• Sinopharm Group Co Ltd (Re-established): A leading Chinese pharmaceutical and medical device distributor, added due to price declines.
• Empresas COPEC SA (Completed Position): A Chilean diversified natural resources and retail company with interests in forestry, fuel distribution/retail, and mining.
• Seabridge Gold Inc (Held for Observation/Spin-off Event): Its Courageous Lake gold project was spun off into Valor Gold. The author believes the asset has upside even considering all risks (including permitting and financing), and Seabridge retains a royalty on the project.
• Amundi SA (Liquidated): Sold due to price appreciation.
• Air Lease Corp (Liquidated): Exited as the company was acquired and taken private, with the transaction price above Kopernik's risk-adjusted intrinsic value estimate.

Russian Holdings Remain Untradeable; Hard Asset Rebound is Attractive

Market/Macro View: The author's stance is [Cautiously Optimistic]. The author notes it is "reassuring to see so many hard asset companies fall back to attractive prices" and believes "value can often rebound strongly from periods of extreme underperformance." Risk Note: Russian securities remain untradeable due to decisions by the U.S. and Russian governments, representing approximately 4.3% of the portfolio this quarter and detracting 0.3% from returns. The author emphasizes mitigating risk through diversification across industries and countries, reiterating their fundamental, long-term disciplined investment process.

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Position Moves

Ticker	Direction	Author's One-Sentence View	Key Data
Sibanye Stillwater Ltd	Add	Added to South African platinum group metals producer at low prices	Total return -29.1%, drag 0.3%
Valterra Platinum Ltd	Add/Reduce	Opportunistically reduced and added positions amid price volatility	Total return -18.2%, drag 0.7%
Impala Platinum Holdings Ltd	Add/Reduce	Traded around volatility	Total return -24.5%, drag 0.5%
Glencore PLC	Reduce	Reduced diversified natural resources company as prices surged	Total return -8.0%, drag 0.2%
K+S AG	Add	Added to Europe's largest potash producer	Total return -19.5%, drag 0.6%
Nutrien Ltd	Add/Reduce	Traded around volatility in the world's largest integrated potash producer	Total return -15.1%, drag 0.2%
Paladin Energy Ltd	Add	Added to Australian uranium producer at low prices	Total return -15.0%, drag 0.2%
Petroleo Brasileiro SA (Petrobras)	Add	Added to leading Brazilian oil and gas producer at low prices	Total return -19.8%, drag 0.2%
Inpex Corp	Add	Added to Japanese LNG project company at low prices	Total return -29.8%, drag 0.3%
Golden Agri-Resources Ltd	Add	Increased stake in Indonesian palm oil producer amid price volatility	Total return -9.6%, drag 0.1%
KT Corp	Add	Increased stake in South Korean telecom company amid price volatility	Total return -15.6%, drag 0.3%
LG Uplus Corp	Add/Reduce	Opportunistically reduced and added positions amid price volatility	Total return -11.0%, drag 0.3%
LG Corp	Add/Reduce	Opportunistically added and reduced positions amid price volatility	Total return 20.9%, contribution 0.5%
BHP Group Ltd	Reduce	Executed a reduction	Total return 18.5%, contribution 0.2%
DiDi Global Inc.	New Position	Initiated position in company with 70% share of China's ride-hailing market	Specific return not disclosed
Ayala Corp	New Position	Initiated position in Philippine conglomerate	Specific return not disclosed
EPAM Systems Inc.	New Position	Initiated position in professional software engineering company	Specific return not disclosed
Mosaic Co.	New Position	Initiated position in the largest US phosphate fertilizer and global potash producer	Specific return not disclosed
Grupo Financiero Inbursa SAB de CV	New Position	Initiated position in Mexican financial holding company	Specific return not disclosed
Champion Iron Ltd	New Position	Initiated position in Canadian iron ore producer	Specific return not disclosed
Indah Kiat Pulp and Paper Tbk PT	New Position	Initiated position in Indonesian integrated pulp producer	Specific return not disclosed
Orbia Advance Corp SAV de CV	New Position	Initiated position in Mexican conglomerate	Specific return not disclosed
S&P 500 Index Put Option	Re-established	Re-purchased put options for hedging	Drag 1.1%
Japan Petroleum Exploration Co Ltd	Re-established	Bought when price fell to attractive levels	Specific return not disclosed
Suzuken Co Ltd	Re-established	Bought Japanese pharmaceutical distributor on price decline	Specific return not disclosed
Sinopharm Group Co Ltd	Re-established	Bought Chinese pharmaceutical distributor on price decline	Specific return not disclosed
Empresas COPEC SA	Completed Position	Completed position in Chilean diversified natural resources company	Specific return not disclosed
Seabridge Gold Inc	Hold & Monitor	Spun off Valor Gold; believes assets have upside	Specific return not disclosed
Amundi SA	Liquidated	Sold due to price appreciation	Specific return not disclosed
Air Lease Corp	Liquidated	Exited as company was acquired and taken private	Transaction price above valuation