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Wednesday, October 7, 2026

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Fajasy on X

Alpayana, a private Peruvian mining group, asked for 19.9% of Magna Mining $MGMNF (TSX: $NICU) when management was “thinking something probably below 9.9,” per CEO Jason Jessup. On August 28, 2026, Alpayana, chaired by Alejandro Gubbins, bought 62,356,682 shares at CAD$2.25/share for US$99M. The US$99M more than quadrupled Magna’s cash at the time. Alpayana runs six underground mines in Peru and Mexico, most of them bought from other miners, including the Los Quenuales mines from Glencore $GLNCY in December 2022 and Sierra Metals, a copper-zinc miner, for ~US$176M in 2025. While it holds at least 10%, Alpayana can join future equity raises and top up after dilution, and it gets one board nominee or an observer. Jessup says Magna’s pre-deal plan already funded Levack, its flagship restart project, from cash and the cash flow of McCreedy West, its producing mine. So the US$99M mainly spares Magna from “delaying the startup construction at Crean Hill,” its permitted nickel mine, “by 1 or 2 years,” and gives it “a bit of a war chest” for acquisitions in Sudbury, Ontario, where its mines are. He also says Magna “could have five mines in production in 5 years and not have to ever do another financing again.” Neither restart study is out yet (both are due in the first half of October), so the claim rests on capital budgets investors haven’t seen. After the deal, Alpayana holds 19.9%, institutions 47.4%, retail investors 26.9%, and management and directors 5.8%. The institutional stake includes the 16.0% held by Dundee Corporation $DDEJF, a Toronto investment company.
@convequity

Convequity on X

OpenAI’s TPU lesson makes me more cautious on $CBRS. Richard Ho, OpenAI’s hardware chief and a former TPU designer, says one lesson from Google was that “you have to make it programmable.” Models change too quickly to overfit the chip to one architecture. That caught my attention because TPU is already programmable. Groq statically schedules execution in its compiler, while Cerebras makes a different bet on wafer-scale compute and distributed local memory. The question is how much of the performance advantage survives when models change, including MoE routing and memory demands. Ho also wants hardware that can move across inference workloads without locking the fleet into fixed ratios of specialized machines. That matters when buyers are committing years of capex and power. If OpenAI and other large buyers increasingly favor that flexibility, I expect CBRS to remain a specialist over the next few years. The absolute market can still be large enough for Cerebras to build a very good business, but I’m more skeptical that its architecture becomes the mainstream choice. "As long as you’re willing to live with those limitations, they’re good. But if you’re able to make it programmable, then you have a lot of flexibility for adapting to change. And we had to adapt to change. TPU also adapted to different changes in the algorithm, even at that time with CNNs. Clearly now, in the world of LLMs and agents, the mix is changing pretty rapidly. So that was the pitfall we really wanted to avoid: to overdesign and overfit to one particular model. We looked at it in that context." ---[54] The Man Who Built OpenAI's First Chip TechTechPotato
@convequity

Convequity on X

Despite investor doubts, $IREN is worth a small position. The shares have fallen about 17% from their 22 Sep close. The equipment IREN had ordered at 30 June is covered by the cash, committed GPU financing and prepayments it reported on 27 Aug. In the June 2026 quarter customers funded most of its capex. On signed contracts the shares are priced about where $CRWV is. The main risk is that IREN runs GPU clouds worse than its peers. 1. IREN guided FY27 capex (Jul 2026–Jun 2027) at $25–30B on its 27 Aug results call. Its enterprise value is $14.6B at the 5 Oct close. IREN's FY26 results show revenue of $0.7B, of which $0.58B was bitcoin mining. IREN expects to have shut mining down by the end of December 2026. 2. At 30 Jun 2026 IREN had $13.8B of commitments for GPUs and site work, almost all payable by 30 Jun 2027, per its annual report. Orders placed after 30 June are not in that figure. On 27 Aug IREN put its existing cash, committed GPU financing and customer prepayments at about $14B. That covers the 30 June commitments. 3. The other $11–16B of the capex guide is not yet funded. Management targets about $8B more in GPU financing and prepayments for new GPU capacity, and that funding comes with new customer contracts. IREN says it is in late-stage talks for a large share of 2027 capacity. It has not announced any signed contract for that new 2027 capacity. The rest would come from data-center debt, operating cash flow and corporate funding, which includes selling shares. By 14 Aug 2026 IREN had sold about $2.5B of shares under its $6B ATM programme, leaving about $3.5B at that date, per its annual report. It has not reported any sale since. 4. On signed contracts, IREN is priced close to CRWV. On our ABBX dashboard, enterprise value is 0.88x contract value for IREN, 0.74x for CRWV and 1.60x for $NBIS. The contract values are company-reported, and each company measures them differently. IREN reports about $16.6B, of which about $5.1B is cloud service contracts and about $11.4B is GPU lease contracts. CRWV reports a $104.2B revenue backlog. NBIS reports $37.5B of remaining performance obligations. On 27 Aug IREN said its 2026 capacity was largely sold out. It had $4B of contracted annualised revenue run-rate (ARR) for 2026 capacity, which it earns once that capacity is delivered and accepted. $1B of ARR was already operating. EV is about 3.7x the contracted $4B. 5. In the June 2026 quarter, IREN's customers funded most of its capex. On our ABBX dashboard, customer prepayments and deferred revenue covered 87% of IREN's cash capex in that quarter ($1.72B of $1.98B). The same measure was 21% at NBIS and 12% at CRWV. Working-capital inflows covered 90% of IREN's capex and 36% of NBIS's. CRWV's working capital was an outflow equal to 8% of its capex. More than half of IREN's customer prepayments came under the $MSFT contract. At 30 Jun 2026, $1.01B of IREN's $1.84B of deferred revenue sat in the subsidiary that holds the GPUs for the MSFT contract, per its annual report. IREN said on 27 Aug that $3.6B of GPU financing plus customer prepayments fund about 96% of the GPU capex for the MSFT contract. IREN also said its recent contracts carry prepayments of 45–55% of GPU capex. So in that quarter customer cash, not new debt or shares, paid for most of IREN's capex. At NBIS and CRWV it paid for a small share. 6. Operations are the weak point. Some people are questioning the quality of the GPU cloud service IREN delivers to end customers. We share the concern, and it is not new to us. We recorded it in our 1Q26 rebalancing meeting and again in 2Q26 and 3Q26. One of our biggest concerns on IREN is that the CEO treats software as easy, low-value work next to power, land and data centres. That includes the orchestration software that schedules customers' jobs and manages the GPUs. We expected this to slow IREN's growth, not to threaten the business, for three reasons. (A) In our view the bottleneck in AI infrastructure today is powered capacity, not the know-how to run GPU fleets. IREN said on 27 Aug that its recent 3-year contracts price above $20M of revenue per MW of computing capacity. It estimates about a 2-year payback on the GPUs and related equipment. It also said its 2026 capacity is largely sold out. (B) Hyperscalers and other bulk buyers of IREN's capacity can manage and optimise GPUs better than IREN can. What they need from IREN is powered GPU data centres delivered on time. MSFT's $9.7B contract is for GB300 GPUs in four 50MW buildings. MSFT accepted the first, Horizon 1, in August 2026. IREN targets Horizons 2–4 in the December quarter. (C) $NVDA is partnering with IREN and is trying to make running large GPU fleets more standard and simpler. In our view NVDA wants standard fleet-management software so that more companies can run its GPUs well, which makes its chips easier to buy and use. On 7 May 2026 NVDA signed a five-year, $3.4B managed GPU cloud contract with IREN that uses Mirantis orchestration software. The same day it announced a partnership to deploy up to 5GW on NVDA's DSX reference designs. DSX is NVDA's standard set of designs and software for building and running AI data centres. In its 31 May 2026 DSX release, NVDA says the DSX OS software handles tasks such as keeping GPUs healthy, scheduling jobs and running several customers on one cluster. The same release names IREN, CRWV and NBIS among the cloud partners deploying core parts of DSX. The risk in (C) is that IREN's CEO may be too optimistic about how capable NVDA will be at this and how soon. 7. IREN is buying software and hiring managers to run its cloud better. It bought Mirantis, a cloud software company with more than 1,500 enterprise customers, on 4 Aug 2026. IREN said at completion that it paid about 12.6M shares plus about $40M. In July 2026 it hired a product chief from $ORCL (its cloud unit), a data-center development chief from $GOOGL and CyrusOne, and a security chief from $NTNX. We found no hire of a head of cloud operations. We would change our view in three cases. First, if a Horizon delivery for MSFT is missed or rejected. Second, if the Q1 FY27 report arrives with no new contract for 2027 capacity announced. Third, if IREN's weak end-user experience turns out to come from its infrastructure, meaning power, cooling, networking, storage or the GPU hardware itself, and not just from its orchestration software. The third matters because bulk buyers can replace IREN's software with their own, but they depend on IREN for the site and the hardware.

Investor Letters

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Research Roundup Vol. LV

OpenAI’s enterprise privacy push and Synopsys’s Factory 2 royalty model anchor a technology roundup, alongside oil above $100 and Bitcoin’s…

SNPS $97B
Monte Independent Investment Research

New Position (ONON): Game is On

On Holding (ONON) is gaining sportswear share, expanding store space and launching soccer with Kylian Mbappé as investors debate U.S.

ONON $11B
Aurelion Research 3 clicks

Deep Dive: Intuit ($INTU)

Intuit’s $21.4 billion software franchise faces AI-driven pricing pressure in tax and accounting, even as QuickBooks and TurboTax retain…

INTU $79B
Rebound Capital 4 clicks
VEEV · long

Veeva Systems INC

Veeva Systems is a vertical software company valued as if its best growth years are behind it.

VEEV $46B
Value Investors Club

Canterra Minerals: Research Note

Canterra Minerals increased Lundberg indicated tonnage 55% to 26.1Mt, with 226.2Kt of contained copper equivalent, supporting a Buchans…

EQX $13B
Atrium Research - Equity Research

Kenorland Minerals: Research Flash

Franco-Nevada bought 10.0 million Kenorland shares, a 12.4% stake, for C$22.2 million in a secondary transaction that issued no new shares.

FNV $46B
Atrium Research - Equity Research 1 click

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