OCM September Market Update
In this edition of OCM’s Market Perspective we are beginning an ongoing series of features on companies that have performed well despite being located in what many deem are challenging jurisdictions. We hope our brief write up can exemplify that identifying high quality projects with bona fide mine builders and operators can be highly rewarding to shareholders, even if the projects are not going to be featured in HBO’s ‘The White Lotus’ anytime soon.
We also note a few charts and news pieces that caught our eye since last month’s piece.
Thanks for reading.
Portfolio Spotlight – Emerald Resources
Source: Emerald Resources
Prior to 2017, no North American or Australian listed company had built a successful commercial mine of scale in Cambodia. Though the geology was present for economic deposits, many cited government relations as a major hurdle and a risk far too great to invest the significant capital required. Morgan Hart, a renowned Australian mine builder, saw other’s fear as his opportunity.
Hart had previously helped build mines across the world from Côte d’Ivoire to Western Australia (WA). Hart’s superior mine building abilities helped establish Regis Resources’ cornerstone assets with their three mines at Duketown in WA. Regis has used the foundation laid by Hart to grow to a market cap of over $6B AUD. Thus the challenge of building the first commercial mine in a country may have felt like a walk in the park for Hart.
Hart with the Minister of Mines and Energy of Cambodia. Source: Khmer Times
In just four short years, Hart and his dedicated team went from the purchase of the project, now named Okvau, for $13M AUD to the first gold pour in the middle of 2021. Prior to the acquisition, Okavau only had a limited estimated resource and a newly recently published their pre-feasibility study (PFS). Hart consistently cites his keen ability to source long lead items at industry low prices and experienced mine building team as why Emerald is able to develop their projects faster than most in the sector. Hart’s eye for costs savings are exemplified in the all-in-sustaining-cost (AISC) at Okvau, which has produced over 500,000 ounces at an AISC $884/oz. For reference, the average AISC of the major producers in Q2 2026 was over $1,800/oz.
Since Okvau’s first gold pour in 2021, Hart and his team have successfully identified another Cambodian gold project, named Memot, which they are rapidly advancing. Hart and team have been able to use the cash flow from Cambodia to also develop their Western Australian project named Dingo Range, which is fully licensed for development and operations.
Emerald has proven that they provide significant value to both the market and the Cambodian government. For example, the Cambodian Ministry of Mines and Energy estimates that the Okvau phase alone will contribute around $1 billion in state revenue. Employment across both operations currently stands at 697 workers, including 645 Cambodian nationals. Quite impressive that Emerald will have gone from one undeveloped project in an undeveloped country to 3 operating projects at industry leading costs, all in roughly 10 years. Of course, we appreciate Hart who has significant skin in the game as he holds 6% of Emerald.
Emerald represents 2.79% of the Fund as of 8/31/26.
Implied Allocation to Gold Still Low
Many market pundits called for gold and gold assets to have topped this past January when gold reached $5,500 an ounce and again earlier this summer when gold declined to $3,900.
However, the chart above by Callum Thomas of Topdown Charts implies that we are nowhere near the peak hysteria for allocations to gold in portfolios.
Red or Blue – The Debt Goes Up
Source: Charlie Bilello
The United States’ federal debt outstanding reached over $40,000,000,000,000 this month. As mentioned many times before, gold has over a 90% correlation to federal debt outstanding. Evidenced by the charts above, federal debt outstanding doesn’t care what party is in the Oval Office. The debt will continue to rise, as does the price of an ounce of gold.
Dutch Shift Gold Away From US
Per Bloomberg, “The Dutch Central Bank has shifted gold reserves worth about $12 billion from New York and Ottawa to London, citing concerns about increasing global geopolitical unrest.”
While the Dutch Central Bank isn’t the largest central bank, in terms of gold holdings, their move their gold closer to home is a trend that continues among countries across the globe as the French did the same earlier this year. Combined reshoring with additional record purchasing by China shows gold is in high demand by Central Banks and to be stored outside of the lower 48.
Important Disclosures
Investors should carefully consider the investment objectives, risks, charges, and expenses of the OCM Gold Fund. This and other important information about a Fund are contained in a Fund’s Prospectus, which can be obtained by calling 1-800-779-4681. The Prospectus should be read carefully before investing.
The Fund invests in gold and other precious metals, which involves additional risks, such as the possibility for substantial price fluctuations over a short period of time and may be affected by unpredictable international monetary and political developments such as currency devaluations or revaluations, economic and social conditions within a country, trade imbalances, or trade or currency restrictions between countries. The prices of gold and other precious metals may decline versus the dollar, which would adversely affect the market prices of the securities of gold and precious metals producers. The Fund may also invest in foreign securities which involve greater volatility and political, economic, and currency risks and differences in accounting methods. The Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Therefore, the Fund is more exposed to individual stock volatility than a diversified fund. Prospective investors who are uncomfortable with an investment that will fluctuate in value should not invest in the Fund.
Past performance is no guarantee of future results
There is no guarantee that the Fund will achieve its objective. Diversification does not ensure a profit or guarantee against loss. The prices of securities of gold and precious metals producers have been subject to substantial price fluctuations over short periods of time and may be affected by unpredictable international monetary and political developments, such as currency devaluations or revaluations, economic and social conditions within a country, trade imbalances, or trade or currency restrictions between countries. The prices of gold and other precious metals may decline versus the dollar, which would adversely affect the market prices of the securities of gold and precious metals producers. Because the Fund concentrates its investments in the gold mining industry, a development adversely affecting that industry (for example, changes in the mining laws which increase production costs) would have a greater adverse effect on the Fund than it would if the Fund invested in a number of different industries. Funds are distributed by Northern Lights, LLC, FINRA/SIPC. Orrell Capital Management, Inc. and Northern Lights Distributors, LLC are not affiliated.
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