IKN #174Premium

The IKN Weekly
Week 174, September 2nd 2012
Contents
This Week: Gold good juniors good market good, Next Friday’s jobs number, A bonus meeting
Fundamental Analysis: Site visit to the Minera IRL (MIRL.L) (IRL.to) Ollachea project.
Stocks to Follow: Overview, Vena (VEM.to), Rio Alto (RIO.to), AQM (AQM.v), Sunward
(SWD.to), Bear Creek (BCM.v), Strait (SRD.v), Lupaka (LPK.to).
Copper Basket: Overview, Baja Mining (BAJ.to), Yellowhead Mining (YMI.to).
Regional Politics: Colombia’s government in talks with FARC, Ecuador’s left wing selects
Alberto Acosta as their Presidential candidate, Mexico: Enrique Peña Nieto confirmed, Peru
Conga: Government lifts State of Emergency, Peru: Environmental permits via Ministry of the
Environment, Argentina: Neuquén Supreme Court ratifies referendum against copper project.
Market Watching: Vena (VEM.to) is a short-term buy at 15c but it’s a sell at 21c, Rio Alto
(RIO.to) update, OceanaGold (OGC.to) (OGC.ax) update..
I remind subscribers that no part of this newsletter can be copied, reproduced or given to any
third party without the express permission of the author.
This Week
Gold good, juniors good, market good
Moving into the Labor Day/post-Labor Day period we’ve suddenly been hit by Bernanke-led
optimism, an acceleration of bullish sentiment and nothing but positives from our most studied
sectors. We’ve seen false dawns on our rough trip through 2012, but this one sure does give
me the tingles and the “this time it’s different” feeling (uh-oh) and as a result, I’m looking to
add some junior exposure next week. As you’ll read below, I’m going to add a few to my IRL.to
position and will open a position in OGC.to if the right price comes up. If the idea is to move to
producing junior miners, then move to them I shall.
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Next Friday’s jobs number
The most interesting number to be published next week will come from the BLS and its monthly
jobs report, Friday morning(1) with the current market consensus set at an unchanged headline
number of 8.3% (we again recommend the top quality blog Calculated Risk, make it a part of
your professional reading life). In a nutshell, what we saw and heard last Friday was a
Bernanke-led Fed that was leaving the door open for another round of QE (which is why gold as
well as the connected metals and stocks all rallied of course), but it’s still up in the air as to
whether Ben & Co will use the option. In a Q&A on Saturday in the WSJ, the Fed’s notably
dovish Dennis Lockhart said (2) that the application of a QE-type remedy would depend on
whether there was enough oomph in the economy to improve the unemployment situation,
specifically saying that The USA was running at..., “...a 2% growth track with fluctuating job
growth. But overall, not a strong enough pace to bring down unemployment to anything close
to a notion of full employment in a reasonable time.”
The dual mandate writ large, so with one of the strongest proponents for extra Fed-led stimulus
recognizing that the unemployment figure is the single key dataset, let’s not be in any doubt
about this one; a strong jobs number next Friday will almost certainly see gold sell off from its
current rally $1,690/oz level. Finally, let’s note that on Thursday evening in Charlotte, President
Obama is due to make his official acceptance speech as candidate for the election and as this
report (3) indicates, the President gets to read the Friday jobs numbers before anyone else, on
Thursday evening. The Hawaiian will have an attentive audience for the parts where he talks
about recovery, growth and jobs, that’s a certainty.
A bonus meeting
As well as meeting and finding out the state of play in three of our covered stocks during my
trip last week (RIO.to, VEM.to, IRL.to see below for details) and catching up with some old
friends in Lima, I’m happy to say that I made a new one. David Skarica, proprietor of the
blog/subscription service Addicted To Profits (4) happened to be in town (he was off to see a
junior and its exploration property) and we managed to hook up for a couple of hours and a
glass (hey, maybe it was two?) of wine in the evening. I came away impressed, not only
because the guy really knows his stuff about the market and has better grasp of the big picture
issues than I, but more importantly he’s a really nice guy and good company. Skarica is market
voice I’ll be paying much more attention to in the future.
Fundamental Analysis of Mining Stocks
2

Minera IRL (MIRL.L) (IRL.to) site visit to Ollachea
Today’s report is more of a travelogue than a fundamentals report on Minera IRL (IRL.to)
(MIRL.L) and that’s for two main reasons;
1) We’ve covered the company properties and exploration/development plans for Ollachea
and its other assets (Corihuarmi Peru, Don Nicolas Argentina) in the recent NOBS report
on IRL found in IKN168 (part one) and IKN169 (part two). As the numbers part of the
project didn’t come under much scrutiny and the visit wholly confirmed what’s already
understood by the economic and development model for Ollachea, there’s no need to
re-hash the figures (at least I think so).
2) I want to concentrate on the narrative of this visit and explain the main points of things
seen and heard in the way I saw them. So we’re going to use plenty of photos (30 and
one map, to be exact) and talk about what’s in view around them.
With that out the way, let’s get busy and start with a map of the area (hope you can see this
ok, it’s a shrunken and cropped version of the Ministry of Transport roadmap for Puno). Your
author’s journey started on Wednesday early morning with a flight out of Lima, arriving midday
in Juliaca, Puno region’s biggest city that sits close to Lake Titicaca. I flew with host/guide
Donald McIver, the VP Exploration for IRL. As a quick aside, I’d like to publicly thank Donald for
his time, efforts, explanations, constant
good humour and patience on the trip. Not
only is he well versed in the ways of South
America and IRL (he’s been around these
parts for a couple of decades, in Peru for
most of the time and with IRL for the past
eight years) but he has that knack of being
able to explain geologically complex and
nuanced matters in terms that even your
author can understand, the mark of a very
switched-on geol. It was a pleasure
travelling with you sir, chapeau.
I digress. We left Juliaca in the waiting 4x4
and took the road North to Ollachea. It’s
basically a straight run and it’s also fully
covered, point to point, by the brand new
Transoceanica highway that now connects
Peru to Brazil. The main thing about this
road is that it’s excellent quality and a really
pleasant change to the normal type of site
visit in Peru that sees your last 30km or
50km on weathered dirt track roads that
need a couple of hours to traverse. No, the
Transoceanica is unbeatable tarmac in Peru
and it delivers us right to the door of the
town and the project.
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The second thing about the road is that it passes some pretty wonderful scenery. Here above is
a shot from the truck that shows the Andean mountains from he Macusani plateau, just before
arriving at the town of Macusani (~50km from Ollachea). At this point we’re about 4,700metres
(15,400 feet) above sea level (masl) and cresting the western side of the range. As Ollachea
lies at around 2,700masl (8,856 feet) from roughly here onwards we were dropping down the
other side of the range towards the Amazon basin and jungle. Below is a photo of the start of
the main drop into the valley that holds Ollachea town and project and to give an idea of scale,
you may be able to just make out a 20 tonne truck about to take one of the hairpin bends on
the road below. This is big country. Stopping at Ollachea means that we don’t quite reach the
tropical zones, but it’s not far from the town to full-on jungle and the road makes access very
easy.
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What with and good vehicle and driver and the good roads, we made good time to Ollachea
and arrived at the IRL base camp with time to spare in the late afternoon and evening. Here’s a
shot of the HQ taken the next morning and as you can see, it’s a big and spacious building,
with plenty of room for offices and a canteen on the ground floor and then bedrooms on the
second floor (with private bathrooms
and comfortable beds). In this photo
you can also note little details that
count, such as rows of recycling waste
bins (there’s more than one set at the
camp too) all segmented into different
waste types.
The company is renting the premises
from the town who’d built it as a hotel a
few years ago but the idea never took
off or attracted many guests. Anyway,
because we made good travel time VP
Expl McIver made the call to visit the
underground tunnel workings that
evening, thus freeing up more time for
overground visits the next morning. I
was first given an overview presentation
by an IRL team member, then we drove
to the tunnel and site of the eventual mill, which is close to the town about 1.5km further down
the Transoceanica (again, incredibly easy access to all the project by anyone’s standards). The
photo below shows the entrance to the tunnel that’s being dug by third party contractors JJC
(long-established, peer-rated Peruvian civil engineering company) that was at a depth of 290m
when we were there, which compares to the “beyond 200m” quoted by IRL in its last corporate
presentation dated August 2012 and shows the progress being made.
Once it was ventilated to everyone’s satisfaction (a blast happened not long before we arrived)
we walked down the 5m x5m tunnel to the working face and here’s a shot of that. As you’d
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expect, plenty of rubble to be cleared out by the scoop and not much else to see. We watched
a couple of team members make the ceiling rock safe by working loose some hanging rocks and
then left them to it.
Overall VP Expl McIver (shown in the photo below with his default facial expression; a smile) iis
pleased with the rhythm of tunneling so far and the company fully expects the tunnel’s full
1.2km to be completed on time in 1q13. However, McIver is particularly keen to get to the
600m stage, as an underground drill pad is planned for that spot which will allow him and his
team to drill and access more areas of expected mineralization that should (no guarantees, but
the deposit has performed predictably so far so ‘should’ is the word) add more ounces to the
resource when the count is eventually updated, probably in 2013 and after the upcoming
Feasibility Study due early 4q12.
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With that it was back to base, a dinner and then an evening catching up with mails and chatting
with the team. And so to bed.
Next morning (Thursday August 30th) started early, with breakfast at 06:30am and on the road
to the project site overground. On the way through the town of Ollachea (the camp is just a
few hundred metres from town centre) the influence of Minera IRL is very clear to see and in
many ways, all positive. Firstly, there’s a whole wave of construction going on with people
building new houses or adding second or third floors to their already established property. Then
there are buildings such as the new community hall built using money directly from IRL. There’s
also the general air of busy and a good atmosphere in the town, which VP Expl McIver said has
changed greatly since IRL arrived in 2008. This might be partly due to the arrival of the new
Transoceanico through the town that has increased freight traffic on the route (though it
existed beforehand) but the sensation gathered is that the new mining activity is the driver of
wealth in Ollachea.
There are several things like the photo shown below, too.
This is a big advertising banner located in the centre of town that dates from 2010 and shows
what Minera Kuri Kullu (the wholly owned local subsidiary of Minera IRL) had done for locals in
that time. The initiatives include the forming of a new band, computer training, health services,
the drop in undernourished locals (particularly children) and integrated services for old aged
pensioners in the town and surrounding area. What’s also notable here is something that’s not
present; I noted immediately that unlike so many other places in Peru, this banner (that’s been
up for two years) had no scrawls, graffiti or handwritten derogatory comments on it which
suggests a local respect for IRL. Sometimes, what you don’t see is as important as what you
do see.
We then left the town and went up (literally, it’s a fairly steep climb and we’re now on 4x4 only
type roads) the couple of Kms to the project site. This photo gives an overview of the town on
an early morning in late August.
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Here are two more IRL banners (facing and side of building) that show what the mining
company does and will continue to do in the town. Again, no scrawls or graffiti and again the
type of signal that comes from a community relations team going about its job in an optimum
way (IRL Pres. Diego Benavides, take a bow)
It’s only a couple of Kms to the deposit location and when we get there, the first thing that hits
you is the quantity of informal, artisan-type miners who have set up shop in the valley. This
first photo (next page top right) is from our first stop, with the main Minapampa deposit in front
of us (to the right side of the valley but you can’t see anything of the rocks, as they’re all well
below surface...after all, they’re digging a 1.2km tunnel for a very good reason). This photo
also shows that we really were early to work, as one of those shadows below is mine.
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Further up the valley (again, we drive up the side without the deposit underneath and look over
at the part which contains the mineralization,
the hill on the other side) more informal mining
operations come into view (below). By a rough
headcount there must be around 200 people
working these small tunnels cut into the hill and
drifting down the thin, high grade veins. VP Expl
McIver told me that the tunnels only usually go
about 20m maximum into the side of the hill
and then down perhaps 7m to 10m max before
they’re abandoned (as being too dangerous to
continue) and another adit started.
Below on the next page is a zoom photo from
the same vantage point, in which the number of
adits cut into the side of the hill are clearly seen,
along with the shacks made of corrugated iron
and blue plastic tarpaulin. In this photo there
are a couple of 4x4s as well, which I’m told are
owned by one of the perhaps seven or eight
informal miners who are actually making decent
money here. Most of the others work for low
wages and occasionally hit something of value,
though one noticeable thing was the amount of
new motorcycles zipping up and down the valley
between the site and the town. Chinese built,
they’d cost around U$1,000 to U$1,500 each
(bought from distributors in Juliaca) and suggest
the workers are making more than just scrape-
by money here (though my stars, it’s a hard way
to earn a living even if the money is good on
occasion).
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The reasons for the arrival and continuance of the informal/artisan-type miners (we’ll call them
“the informals” from here on, for simplicity’s sake) at Ollachea need a bit of explanation. Firstly,
there has been mining in the zone since the 18th century so it’s known as a gold prospecting
area, but until IRL arrived in 2008 there was very little going on. However, once IRL announced
its discovery to the market, the informals started coming in larger groupd and setting up, often
from the fairly nearby La Rinconada area where life (at around 5000m above sea level) is much
harder. The land on which the informals are located is land owned by Ollachea town locals, so
the locals are getting rent from these people to mine of their land and therefore put up with the
situation (it’s a back pocket thing, after all). Meanwhile, IRL isn’t against their presence either,
because put briefly 1) they’ve had them registered with the government as “official artisan
miners” (or words to that effect) which means they have to abide by certain regulations and
have a limited supply of explosives which is controlled by IRL itself 2) there really isn’t any use
in trying to chase them off because it would upset the locals who have the land surface rights
and claim rent 3) and it’s no use in trying to chase them off because another lot will come along
in theri place soon enough (i.e. realpolitik) 4) the amount of gold their extracting is “negligible”
compared to the IRL target deposit and as it’s near surface, thin, high-grade offshoots it’s not
part of the targeted mineralization anyway 5) and finally, once IRL gets its mine working in
2015 it will have a ready the tap source of registered mining labour with plenty of underground
mining experience.
In other words, as in all of these relationships between formal and informal, it’s a complex
situation. It’s not a perfect world, but within the boundaries (both physical and political) it has,
IRL is handling the situation well enough and there’s nothing here to overly concern. The one
single thing IRL is hot about however is the potential for pollution from this informal mining
community and while we were there, we spotted what looks like a new operation that was
dumping toxic waste straight into the river. This worries IRL because it would only take one
NGO-type troublemaker to come along and take photos of rust-stained river rocks to start an
anti-IRL PR campaign against the project. While we were on site, VP Expl McIver took plenty of
photo-evidence of the apparent source of the pollution and once back at camp, showed his
community relations officer the shots. He’ll then go to the local landowners and the leaders of
the informals to get this potential problem clamped down.
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We climbed higher up the valley (in 4x4 I hasten to add; this was the lazyman tour) and this
next photo below shows the informals
camps from the higher vantage point.
Here were are looking down on the
main Minapampa deposit zone and from
the area where the second deposit,
Concurayoc, was discovered. By this
time the sun had started beating down
and it was turning into a very nice day.
We stopped at the Concurayoc zone,
got out the maps and looked them over
while having the panorama in view. On
this map below (to help a bit) we see
the lilac and salmon shaded areas as
roughly the hillside on the other side of
the valley, the Concurayoc zone (with
finger), the Minapampa zone (off to
right) and the promising zone between
the two, currently called “Minapampa
West”. That last mentioned hasn’t seen
much drilling yet mainly because it’s steep in strategic places for drill pads and it’s covered by a
thick scree layer which makes drilling tougher, so IRL has up to now concentrated its efforts on
the easier to drill locations without topographical issues. However, VP Expl McIver is keen to
run a campaign because all geological signs point to the two areas connecting, so further down
the line when the mine is up and running, there’s plenty of opportunity to see resource ounces
added at the 400m gap between Minapampa (900m length) and Concurayoc (700m length),
without even going into the fact that the whole system is still open and undrilled at both flanks
and at depth. Without going into detail, it’s fair to say that the IRL team is supremely confident
that this orogenic deposit will get bigger with time and drilling and that the current nine year
mine life based on the present resource and mining plans will almost certainly turn out to be a
lot longer.
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This next shot (right) tries to capture the map of the Concurayoc zone and the zone itself as it
goes on up the valley in front of the
camera lens.
Then the photo below (next page) of The
Master Of All He Doth Survey (McIver)
and the view from our vantage point
down the valley. It was just after taking
this photo that my best personal five
minutes of last week’s trip to Lima and
then Ollachea occurred. It wasn’t a
magical ‘Road to Damascus’ event, but
more like a quiet dawning about the
absolute size of the Ollachea deposit, its
worth as a mine (high), the chances of
the thing going into production (barring a
crash in gold, as certain as it gets in this
industry) and the upside potential of the
project in ounces and in years (very
strong). Ollachea is already a decent sized
project, but these types of orogenic
deposit are often very big, wide and deep
so when you see the setting and where
the currently explored resource zones are,
then start looking around you at the
prospects. Added to that mix of thoughts
then came the thought that the
exploration tunnel (that will eventually be
the access tunnel to the mining of the
mineral) isn’t just a plan but is currently
being cut, plus the presence of informals
(on site because there’s gold here, not for
their own health or hobby) and also the
top quality infrastructure (all the power,
water, land, roads and labour you need)
and last but certainly not least in this 21st
century world, community relations that couldn’t hardly be better and evidenced by the recent
30 year (thirty!) access agreement between landholders and company. It was one of those site
trip moments that makes the travelling worthwhile ten times over and once the thoughts had
crystallized I sat down on a rock and wrote the following in my scratch pad (reproduced exact
words):
Don talked about getting the size and scale of Ollachea while on presentation
last night. He was right because from vantage point Conc[urayoc] looking down
on valley ~3200masl it becomes apparent. This is not a $110m mkt cap
company, it’s a ½bn mine and screw Corihuarmi and screw Don Nicolas.
I know it’s a mere personal impression, subjective and it doesn’t stand up to scientific rigour. I
also know that I’m not going to “screw” the other assets held by IRL, because one is cash flow
positive and will remain so, while the other is close to getting its permits and financing deal
together in order to move into production. I’m only “screwing” them because the value of
Ollachea as a stand-alone far outweighs the current market cap of IRL. But i also know a drop
dead bargain junior mining company when I see one. More on that in the conclusion.
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We moved on, went back down the valley and crossed the river through the informal mining
community in order to reach the IRL on-project campsite. The photo below has two arrows
marked that show 1) our destination, the IRL camp up on the hill that sits above the
Minapampa mineralized zone underground and 2) an example of the dangerous work that the
informals do, as the marker points to the entrance to an adit at river level being worked as we
drove past by three miners, two a few metres underground and one receiving the mineral. If
you want to show the world a tunnel that is bound to collapse (just a question of when), show
them an unsupported tunnel sitting right next to a flowing river.
We arrive at the camp, which was the first IRL pied-a-terre in 2008 (we saw traces of some of
the first trenches dug there during that year) but these days is mainly a waste deposit. One
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things you immediately note is the way that environmental concerns go from zero among the
informal miners below) to world-standard at the camp, all in the space of half a kilometre.
This photo below shows the waste dump for the mud from the 81km of diamond drilling that’s
happened so far at Ollachea. The company collects its waste water from the drills, brings it here
and separates out the fine mud from the water. Once the mud has dried solid it’s bagged and
then trucked away for safe disposal.
This photo is taken from the far side of the same camp and I’ve labelled it up because it gives a
good bird’s eye view of the layout of mine, town, mill and where those informals are working.
The spot where the photo was taken marks the Eastern edge of the Minapampa mineralized
zone (so far, it’s still open at flanks of course). Below us to the right is the start of the informals
township. In front of us and down the valley is the town of Ollachea. Then to the left of
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Ollachea town, following the Transoceanica highway down about 1.5km (one mile) is the
current tunnel workings and the eventual site for the mill and production facility, on the other
side of the hill where I stood.
Just for fun, here’s another shot taken at the time without those notes. By this time the sun
was beating down on us and as I’m not a great photographer, the shots were sometimes
coming out with too much light (eg the noted above photo).
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We mentioned the newly noticed pollution at the informals’ camp and this zoom shot, taken
from the IRL camp site above, shows the problem. That’s some pretty contaminated water
running down through the dwelling zones and straight in the river. We expect IRL to move to
stop this quickly in order to prevent problems further down the line and thanks to its strong
community relations (above all with the community leaders in Ollachea who own the land and
have most to gains from the IRL mine start-up) it will be able to do that without much bother,
we’d imagine.
It was also interesting to turn exactly 180º on the spot where I took that photo of what was
happening next to the river and take this next photo seen below:
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The difference in attitude between the formal mining company that looks to implement the
highest standards of environmentally friendly behaviour and the informal mining sector that
does whatever it wants to do could hardly be
clearer.
It was time to move on and time to check out the
location of the eventual tailings facility at
Ollachea. This is located about 2km further down
the road from the tunnel/mill site (which is itself
about 1.5km downroad from the town) and here’s
a photo (right) that doesn’t show as much as I’d
like, but is witness all the same. Looking from the
Transoceanica we see the hill (cut into) behind
which the tailings are to be stored. The location
has been carefully checked for stability etc by the
AMEC guys currently producing the Ollachea
Feasibility Study (FS) and has been deemed
eminently suitable.
This next photo was taken with my back to the tailings facility site and looking up at the tunnel
workings, about 1.5km in front of me. The plan for tailings movement has considered several
options, but VP Expl McIver now says that it’s a near certain call to be simple trucking from one
point to another.
From there it was back to the tunnel/mill site, but this (photo next page) is as close as we got
to the tunnel itself because it was being charged for the next blast at the time.
Instead we looked down (photo bottom next page) on the site of what will be the mill and
processing facility at Ollachea. The plan makes good use of gravity, with crushers close to the
tunnel head, then a technologically standard three stage mill/concentrator further down and
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then plenty of space between the plant and the road for truck parks, weighscales and all
necessary periphery items. When the FS is
published (we hear most likely October
2012, i.e. one month from now) we’ll
know,more about the plan and if there have
been any costs hikes since the $156m capex
and $400/oz cash cost slated in the previous
43-101 (we remind readers that our IKN
model for Ollachea currently assumes a
$170m capex and $500/oz cash costs).
We can also see that an area of the
eventual mill site is currently being
excavated by the company, using local
workers and all under the guidance of Peru’s
INC (the archeology people). Investigations
have uncovered an old village site at this
location, so the job is to log, map and
recover any valuable items that will
eventually be displayed in a town museum
built for the purpose. A burial site a little further down the road has also been discovered and is
now a protected area (presumably the same people who lived in this small village).
UIT that final stop, our time in Ollachea was just about up. We went back to the HQ camp,
grabbed our bags and a packed lunch and headed back to Juliaca where there was one more
stop to make before leaving the Altiplano. IRL has its coreshack in Juliaca city and we visited it
to see what was what. VP Expl McIver (now in his element and surrounded by core) explained
that the company was currently re-logging its early core samples, because in light of
information received and discoveries made later on in the drilling program (and recall it’s a fairly
big one at 208 holes and over 81,000 m drill to date), the company believes it can get a lot
more out of the early holes by re-examining them and adding to the data already gleaned. This
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photo shows the two geols there that day doing just that and I eavesdropped on conversations
between them and VP Expl McIver that immediately went into geology-speak (therefore difficult
for a grunt such as I to follow) but it was clear that the results so far were justifying the re-
logging process.
Here’s a shot from inside the main warehouse, typical of the view of the place from all sides
and angles, all very orderly and well set-out.
This next photo shows a separate storage area, one of four refrigeration units running at -5ºC
and holding samples that IRL wants to keep fresh (e.g. un-oxidized) in case they or any third
party decides to takes a new set of assays from the cores. This is just one example of what is a
high quality QA/QC operation and VP Expl McIver went into great detail about the QA/QC
standards and chain used by the company that includes in-house check assays and resulting
1

audits of the lab numbers, as well as all the normal QA/QC moves you’d want from a serious
junior mining company.
And with that the trip was done and time to go home, loving wife and children awaiting.
Conclusion
What I saw on the trip is confirmation of what we understood already; Minera IRL is a serious
mining company. At Ollachea it runs a tight ship and has all points covered, but the thing I took
away from the visit more than anything else is the obvious and tremendous upside potential of
the project.
I wrote in my notes while perching above the resource area that IRL was a half billion dollar
mining company on Ollachea alone. I firmly believe that, but the key to unlocking the
shareholder value (and not just the market cap value) will be to note and see how and under
what terms IRL raises the capex cash it requires for first Don Nicolas and then later down the
line this flagship, the impressive Ollachea. The market has improved in the last couple of
weeks, but it’s still tough for junior mining companies looking to raise real financing cash and
count IRL in with that group. It’s not an impossible situation by any means, but it continues to
be s a difficult and tight financial market. That IRL is a company with a great future? Yes. That
its market cap will rise substantially in the next 12 to 24 months as long as its plans come
together? Yes, little doubt on that one (barring that wholesale gold crash). That it will be able
to raise cash on terms that suit its shareholders? Well folks, that’s the clear stated aim of the
company and there’s no problem about their sincerity, but when bankers want their cut they’ll
go for as much as they can, which means less for the equity holders (you and I). If IRL can
keep the dilution down to a reasonable level (in the IKN Weekly NOBS model we use 200m
shares out as our benchmark) then this implies the company will run under a $2.50 share, but i
that share count starts blowing out too far, the implied upside drops.
At the moment we have a $1.56 target price (IKN169) pencilled in for IRL.to, representing an
upside of 143.8% to Friday’s close of 64c. That’s a hefty percentage, which also means that if
dilution does go over our expectations (or delays to the development plans happen) there’s
plenty of leeway that still gives us a decent win. But as mentioned in the IKN168/IKN169 NOBS
report two-parter, there’s a key de-risking moment coming up for the company and if we
consider it in reverse timeline, it becomes clearer:
• Until Don Nicolas is up and running, we won’t know the terms of the Ollachea financing
deal. If Don Nicolas commissions smoothly, the knock-on effects to Ollachea
(confidence etc) will be strongly positive to the company. The flipside is also true, so a
2

poor execution of current plans for Don Nicolas will adversely affect IRL and its share
price.
• Until Don Nicolas receives the necessary financing, it won’t get built. Natch.
• Until the permits for Don Nicolas are received, the financing package won’t get finalized
and closed. We understand that there are plenty of late-stage negotiations between
company and bankers going on, but until permits come, it’s very unlikely that money
will start flowing from the banks for a small project located in Argentina. Once the
permits and political/social guarantees make them feel better, then the money will in all
likelihood arrive.
• Until the permits are awarded, they don’t get received. Also natch, but here’s the rub
right now. We see an IRL that has its development plans in the hands of one of the
most unpredictable groups of people in the world, let alone in the continent, namely
Argentine politicians. Once they’ve given their word, printed out the agreed documents,
signed at the bottom and proclaimed their approval in the subsequent press
conferences and interviews I’ll be a happy guy and there won’t be a problem on this
score within reasonable boundaries, as a deal is a deal in Argentina as much as it is
anywhere else. But getting them to sign, agree, permit and voice their official support is
the problem. Once we have an announcement all fine, but until that point we’re
hanging on their “good intentions” and verbal assurances that (speaking frankly) don’t
mean shit. I lived there five years folks, believe me on this one.
From the company, IRL has stated on-record and in off-record conversations (can’t go into
details) that they’re very happy about the way things are going on the permitting of Don
Nicolas and everything’s on schedule for permit delivery in 4q12. Well that’s fine and they’re
statements coming from honourable upstanding people too, so there’s no BS from their side of
the deal. But I insist, there’s the potential at least for a whole mountain of well-fermented and
highly decomposed male bovine waste from the Argentine politicians both at national and
regional level. It’s the weak spot in the chain of events as laid out by IRL so when it’s overcome
and we have those permits and official assurances, things will change for the company in the
eyes of the market, I believe.
And so to a call. There is embedded risk in IRL at this stage, but the current price sub-70c
screams value and after seeing Ollachea last week, I want more at this price. Therefore next
week I’m looking to add some IRL.to to my current, relatively small position. The
emphasis is on ‘some’, as I’m going to take it easy and not stick my neck out too far before the
Don Nicolas permit/financing package is sealed, but current prices and just Ollachea is enough
to get me in a little further on this stock.
End of report
Stocks to Follow
During last week, four of our ‘Stocks to Follow’ made gains (RIO.to, BCM.v, PLA.v, SRD.v), one
remained unchanged (FCV.v) and seven lost ground (VEM.to, SWD.to, LPK.to, YMI.to, LRA.v,
IRL.to, AQM.v). Of the winners, by far the best percentage move was logged by Strait Gold
(SRD.v up 30.0%) while the losers were headed by Yellowhead Mining (YMI.to down 11.3%)
and Lupaka Gold (LPK.to).
2

The action last week, for me at least, shows that although the decision to move away from the
tinycap explorers and towards the relatively larger producing juniors might have been tardy in
coming it’s the right thing to do. The junior producers generally (with exceptions) look peppy
and eager to rebound first and fast, while the illiquid tinycaps generally (with exceptions)
continue to stick-in-the-muds. Our process is ongoing here at The IKN Weekly but if you’re
itching to find a sweeter spot, I would stop nobody from taking a basket-type position in
suitable junior producer names today. For example, it’s not my cup of tea but the somewhat
overpriced though well-run and well-promoted McEwen Mining (MUX) is up 30% from lows on
good volume and even the utter underperforming dog end of the junior producer market like
AuRico (AUQ) and Great Panther (GPR.to) (GPL) have put in their volume-driven bounces.
We currently have 12 open positions on our open list, three less than our self-imposed
maximum. Three in the green, nine in the red.
Company Ticker this week Init Price Reco date Current PPS Gain/Loss% Notes
Top Picks
Rio Alto Mining RIO.to buy C$2.04 07-apr-11 C$5.01 145.6% $6.29 tgt
Recommends
Vena Resources VEM.to hold C$0.35 31-may-09 C$0.155 -55.7% Price tgt dropped to 21c
Sunward Res SWD.to hold C$1.47 13-mar-11 C$1.30 -11.6% considering sale
Lupaka Gold LPK.to hold C$1.12 23-oct-11 C$0.54 -51.8% considering sale
Bear Creek Min. BCM.v buy C$3.29 07-nov-11 C$3.01 -8.5% holding, now rebounding
Yellowhead Min. YMI.to buy C$1.00 01-apr-12 C$0.71 -29.0% good value under $1
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$1.04 -9.6% solid biz model, LT hold
Plata Latina PLA.v hold C$0.79 10-apr-12 C$0.38 -51.9% considering sale
Minera IRL IRL.to buy C$0.66 22-jul-12 C$0.64 -3.1% $1.56 tgt new reco
Smaller/Riskier
AQM Copper AQM.v hold C$0.31 16-oct-11 C$0.165 -46.8% considering sale
Strait Minerals SRD.v hold C$0.125 09-dec-11 C$0.13 4.0% tgt 25c drill play
Focus Ventures FCV.v buy C$0.175 01-jul-12 C$0.20 14.3% revised tgt 25c
Closed in 2012 closed close PPS
Soltoro SOL.v jan'12 C$0.87 07-nov-11 C$0.94 8.0% cash moved to BCM.v
Gold-Ore Res GOZ.to feb'12 C$0.84 13-oct-10 C$0.98 16.7% trade closed on ELG.v offer
Minefinders MFN feb'12 U$11.68 17-nov-11 U$14.80 26.7% target made, trade closed
Iron Creek IRN.v mar'12 C$0.58 26-sep-10 C$0.31 -46.6% time up on small bad trade
U.S. Silver USA.to apr'12 C$2.18 15-mar-12 C$1.86 -14.7% ST trade no good, cut loss
Augusta Res. AZC.to may'12 C$3.10 29-jan-12 C$2.07 -33.2% bad mkt, bad trade cut loss
Bellhaven BHV.v may'12 C$0.50 22-sep-10 C$0.28 -44.0% new mgmt not impressive
Zincore Metals ZNC.to may'12 C$0.325 29-jul-11 C$0.17 -47.7% bad mkt, bad trade cut loss
Soltoro SOL.v may'12 C$0.70 18-mar-11 C$0.41 -41.4% bad mkt, bad trade cut loss
failed ST trade close pre
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% split
Estrella Gold EST.v aug'12 C$0.91 27-mar-11 C$0.14 -84.6% Closed on port realignment
Fortuna Silver FVI.to may'12 C$1.07 03-may-09 C$4.65* 334.6% sell call $6.17/ Mar25
*will adjust while closing position
2009, 2010 and 2011 closed positions in appendices below
Now for some notes on a selection of the above stocks.
Fortuna Silver (FVI.to) reminder. As per IKN152, FVI has been moved to the closed section of the list to reflect the
call made in IKN151 (dated March 25th when FVI stood at $6.17) even though your author is still closing his sizeable
position. The “close PPS and percentage gain will fluctuate until such time as the personal position is closed. There is no
need to close out this position at the current way oversold levels. This reminder will be featured in all coming editions.
2

Vena Resources (VEM.to): Reducing price target to 21c. See below for more on Vena
Resources (VEM.to) that takes into consideration the nasty surprise 2q12 and the discussions
about VEM’s immediate and medium-term future as a company at the VEM HQ last week.
Rio Alto (RIO.to): A report on your author’s meeting with RIO management is found in
‘Market Watching’ below. Here we take time to salute and even celebrate (but not too loudly,
don’t want to attract too much attention) the new 52 week and all-time high registered on
Friday and the first close above $5 for the stock (we trust the first of many). However, we have
a $6.29 target on this stock and there’s still a way to go on that, so no big whoops and hollers
please. Secondly, let’s quickly note that RIO has re-vamped its website (5), which is good
because although the old one had all the necessary information it was pretty clunky. The RIO
site 2.0 is a marked improvement, so go check it out.
AQM Copper (AQM.v): No PEA arrived in August, so we can only assume that the thing will
show up in the month coming. We wait until that document is forthcoming before making any
sort of decision here.
Sunward Resources (SWD.to): The real problem here is market apathy more than anything
nefarious. Note for example that SWD ended the week with a bid of $1.30 and an ask of $1.38,
that’s a wide gap for a near $200m market cap company with the connections it has. With the
traditional summer’s end/back to work signal that is Labor Day in New York, plus the fact that
all the serious money players in SWD are NYC-based, let’s look for more news out of SWD
soon.
Bear Creek (BCM.v): Last weekend I was reminded of something I wrote about BCM back in
IKN158, dated May 13th 2012. The subject was Santa Ana, the project in the Aymara Puno area
of Peru that saw its concession cancelled in 2011 (by the supposedly “mining friendly” Alan
García government and not the supposedly “anti-mining” Ollanta Humala government as you
guys up North were spoon-fed at the time by your media, we hasten to remind you). The
specific issue was the potential for BCM to get back its concession or to receive compensation
for its troubles. We wrote that a reversal of the decision to cancel Santa Ana was unlikely and
we’d already voiced the opinion that even if BCM got Santa Ana back, it was an unworkable
project for them in real terms thanks to the political scene in the Aymara region of Puno. On
the other hand this is what was written in IKN158 about the chances of financial compensation:
“...there’s a case for aggravated damages there, too. Finally, we can also quote from
the company’s latest literature (8) where it says, “Management is optimistic regarding
a negotiated settlement.” With 92m shares out and a share price that’s been
hammered down to under $3, any sort of meaningful positive return from Santa Ana
(which I’d personally start at $150m) makes a difference to the share price potential of
BCM, no matter what happens to the bigger and more promising (it was always that
way) Corani project.”
The first thing I’d say is that I’m happy to stick with that call. The second is that there’s no
guarantee that BCM gets a financial recompense for its Santa Ana concession cancelling and the
third, probably most important piece is that there’s no guarantee on that timeline at all. We
noted last week on checking out the 2q12 filings that BCM has spent approximately $300,000 in
legal fees on the Santa Ana part of its assets book during the first six months of 2012, which is
a pretty penny but it’s not the kind of heavy spend I’d look for from a legal bureau in Peru
that’s about to crack its desired nut.
In other news and although the same can be said for many silver juniors, BCM had a good
week last week pricewise. It was pleasing to see the stock run with the best of the crowd and
on volume instead of languishing unloved and it even managed to finish on Friday with a 3-
handle. Let it continue and here’s a chart with a few TA thingies stuck on the bottom, just for
kicks. By my untrained eye I’d say that if BCM kicks on here and breaks $3.10 or so, then we’d
rush up to $3.50. Gotta love TA.
2

Strait Minerals (SRD.v): So it went up 30%, which is fine but from 10c to 13c these things
happen. What was more likeable is that SRD is catching bids and volume, with three days out
of five seeing 100k+ trading. Yes, I’m
first to admit that when it’s 100k of 13c
shares we’re not exactly talking a
king’s ransom, but it’s about market
interest more than anything else at this
point so SRD had a good week without
any complaints.
I’ve thought about adding this next bit,
debated with myself and in the end
decided to go with it. That’s trying to
say that I’m happy enough about
passing the following on (source,
trustworthiness etc) but still think it
should be taken with a pinch of salt
and its not enough to make a proactive
trading decision on its own. On Wednesday early morning I met with an acquaintance in the
Lima capital markets (no names no packdrill) who I hadn’t seen for a while and during our chat
he quizzed me about SRD virtually out of the blue, because apparently the jungle drums in Lima
are that the Alicia drilling has been going well and pleasing the people who look at core (on a
visual level at least, no assays back from labs yet). He knew I’d been following the stock but
didn’t know til then that I was a holder. That’s all I know and it gets tossed your way for simple
consideration.
Lupaka Gold (LPK.to): There are pros and cons of being the way I am as an investor,
disinclined to make snap decisions. The pros include allowing bumps in the road to iron
themselves out, the cons include having one of those consciences that makes cowards of us all
(and thus the native hue of resolution is sicklied over with the pale cast of thought) and enterprises (of great pitch
and moment with this regard their currents) turn awry and lose the name of action. So it seems to be
with LPK and I’m still kicking myself for voicing loudly the bad deal that the company entered
into with AAG without doing something about it and bailing while the damage still wasn’t too
great (at 70c just after the late June announcement it was simply bad, not today’s horrid).
2

So we wait for results from a drill core or three, stick to the now failed plan and if things go our
way we can get out at a better level than Friday’s close of 54c. Ugh, I hate it when I’m stupid.
The Copper Basket
After thirty-five weeks of 2012 The Copper Basket is showing a 38.77% loss to level stakes.
company ticker price 1/1/12 Shares out Market Cap current pps gain/loss%
1 Copper Fox CUU.v 1.15 387.97 484.96 1.25 8.7%
2 Augusta Res AZC.to 3.17 144.1 386.19 2.68 -15.5%
3 Lumina Copper LCC.v 13.19 40.7 384.62 9.45 -28.4%
4 Nevada Copper NCU.to 5.18 72.8 197.29 2.71 -47.7%
5 Western Copper WRN.to 1.58 93.28 86.75 0.93 -41.1%
6 Candente Copper DNT.to 0.97 121.67 70.57 0.58 -40.2%
7 Regulus Res REG.v 1.24 99.88 48.94 0.49 -60.5%
8 Baja Mining BAJ.to 0.80 338.5 44.01 0.13 -83.8%
9 Yellowhead Min. YMI.to 0.80 52.82 37.50 0.71 -11.3%
10 Excelsior Min MIN.v 0.63 56.12 17.96 0.32 -49.2%
11 AQM Copper AQM.v 0.39 105.6 17.42 0.165 -57.7%
12 Duran Ventures DRV.v 0.18 184.72 15.70 0.085 -52.8%
13 Catalyst Copper CCY.v 0.08 274.48 13.72 0.05 -37.5%
14 Crazy Horse CZH.v 0.35 62 10.54 0.17 -51.4%
15 Strait Minerals SRD.v 0.150 56.86 7.39 0.13 -13.3%
Portfolio avg -38.77%
Repeat Note: I DO NOT OWN ALL THE STOCKS IN THE COPPER BASKET. I DO NOT RECOMMEND THEM AS BUYS.
THEY ARE CHOSEN AS A REPRESENTATIVE BUNCH OF THE COPPER JUNIOR EXPLORATION SECTOR, NO MORE NOR
LESS. In fact I currently own three of the stocks on the list, namely Yellowhead Mining, AQM Copper and Strait Gold.
From the outset, back in 2010 when the first version of The Copper Basket made its debut, the idea has been to select
a range of names in the junior copper exploration sector that offer a fair representation of what’s out there, the big,
medium and tiny, the well-run, acceptable and nasty, the world class deposit potentials and the small, scratchy assets,
ones that might get taken out by majors, others that might get moved to production by the same company. The Copper
Basket is nothing less than an index, a measuring the pulse of the sector if you like.
Our Copper basket kept its winning streak intact and its basket average has now improved for
five weeks running, but it was a very tight thing with an improvement of just 0.02%. We had
just four weekly winners (CUU.v, NCU.to, BAJ.to, SRD.v) two stayed unchanged (MIN.v, CCY.v)
and a full nine of our names lost ground on the week (LCC.v, AZC.to, WRN.to, DNT.to, REG.v,
YMI.to, AQM.v, DRV.v, CZH.v), but the average got propped up by the big upmoves in Baja
2

Mining (BAJ.to up 116.7%, Strait Minerals (SRD.v up 30.0% and Nevada Copper to a lesser
extent (NCU.to up 8.4%). To the
downside, the softest names were Regulus 20% Copper Basket 2012 average, weekly
15%
Resources (REG.v down 18.3%) and 10%
Yellowhead Mining (YMI.to down 11.3%) 5%
0%
which can’t seem to catch a bid to save its -5%
life at the moment. Humph. -10%
-15%
-20%
-25%
Turning our attention to the regular check
-30%
of copper supply and demand issues, -35%
-40%
copper prices kept in a fairly tight $3.40s
-45%
range last week. Meanwhile, world -50%
inventory totals came to 434,277mt, down
a smallish 1.3% on this time last week
though noticeably Shanghai stocks
dropped a chunkier 5.7%, which indicates
fresh buying in the world’s most important copper end-user country. On the other hand, LME
cancelled warrants dropped over 2% to stand at 16.06% of total LME warehouse supplies, with
the slackness noted in the European warehouses more than anywhere else.
In other copper macro news, we catch up with an costs indicator that we’ve previously featured
on a couple of occasions, the ICCU index of copper costs of production in Chile (we remind
readers that it’s the world’s biggest producer and covers around 30% of all copper produced, so
the sample is a good one), compiled by the studio Mining Benchmark and offered up in this
month’s edition of Area Minera magazine (pdf here (6)). Here’s the tracking chart ripped from
the report which indicates
(note the ICCU is an index
measured against a
benchmark of January 2009
prices, it’s not a cent-per-
pound cost indicator) another
hike in costs for producing
copper in Chile of 2.4% from
June to July 2012, which puts
overall costs pressure at
6.03% for the year to date.
Meanwhile, copper market
price remains flat, which all
points in one direction of
course, that of a margin
squeeze. As for the reasons
reported for the costs
increases in July, the report states are (translated excerpt), “...driven by the recovery in
commodity prices and for changes in forex rate that mainly affect non-transferable services...”.
And for a little more detail on the cost pressures from commodities, the report goes on to say,
“This situation is explained by the strong increases in international market fuel prices, affecting
both direct use and the cost of energy generation.”
Be clear that copper mining is still a highly profitable occupation, as noted by Codelco this week
that reported an over cash cost of just over U$1.47/lb for the first half of 2012, but relatively
speaking things are getting tighter for the industry and if this continues, we’ll likely see the
smaller, higher-cost end of the sector starting to feel the pinch.
Now for updates on some basket companies:
Baja Mining (BAJ.to): Up over 100% last week on casino speculation, if you ever wanted an
example of just how stupid market participants can be with their money, look no further.
2
ht8naj ht51 dn22 ht92 ht5bef ht21 ht91 ht62 ht4ram ht11 ht81 ht52 ts1rpa ht8 ht51 dn22 ht92 ht6yam ht31 ht02 ht72 dr3nuj ht01 ht71 ht42 ts1luj ht8 ht51 dn22 ht92 ht5gua ht21 ht91 ht62 dn2pes
source: IKN Weekly calcs, TSX
2102/1/1
morf
egnahc
%

Yellowhead Mining (YMI.to): I talked up the potential of YMI last week. However it still
hasn’t done anything price or volume-wise and even dropped on choppy small volume, so it’s
worth considering the weak points of this story in order to have the balanced picture. This
doesn’t mean to say I’ve suddenly turned against this stock and what it has to offer, but the
way in which it’s failing to attract attention at the moment means that we should consider
reasons as to why the market classes YMI as ignorable...for the moment at least. For this
author at least, there are four ostensible weak points in YMI today.
1) Grade. We’ve considered this weakness before and fully recognize it. Our economic
model says that it’s not a problem, but it will always put off those who flatly refuse to
look any further than a company’s headline number sets.
2) The ‘Copper Mountain’ connection. There’s been a long-standing theory in the market
that Copper Mountain (CUM.to) is a potential buyer of YMI the company. As CUM.to is
having its own operation problems at the Copper Mountain mine (can’t get to
nameplate throughput rates, costs higher than expected) it has seen its share price cut
severely, which in turn means that it’s much less likely to go out on its own M&A trail
for the time being
3) The future of the copper price. There are still plenty of bears out there who think that
the current $3.40/$3.50lb-or-so price for copper is unsustainable. Until copper blows off
this market theory and shoots higher, a large section of timid bulls in the larger copper
producers (those potential buyers of YMI) aren’t going to have the confidence to buy
new assets, else finish in the mess that Stillwater made for itself when buying Peregrine
last year.
4) Potential financing in the works. Taking the company’s 2q12 financials as our baseline,
in which YMI reported a working capital of $6.2m (down from $18m end October 2011)
and an underlying burn rate of a a little under $1m per month (now that YMI isn’t
drilling at Harper Creek or producing that FS), we guesstimate working cap at the
company to be around $4.5m today and so it’s getting to the point where YMI will have
to go back to market and add treasury. This seems the single most likely reason as to
why YMI shares aren’t rallying with others; they’re being sat upon by brokerages
looking for a cheap financing entry point.
Overall, there’s no reason to abandon YMI just because it hasn’t rallied to order or with others
in its peer group. The good things still outweigh the bad things here and by quite some way,
but perhaps that point 4) in particular means that an extra dose of patience may be required.
Regional politics
Colombia’s government in talks with the FARC-EP terrorists
By far the most important political development of the week in LatAm was the news that the
government of President Juan Manuel Santos is in peace negotiations with the left wing terrorist
(they say freedom fighters or insurgents; they’re not, they’re murdering assholes) group, FARC-
EP. The announcement of high level talks has been received with all the expected types of
reaction from the Colombian (and world) political spectrum, but if some sort of truce or
negotiated settlement can be agreed upon in the weeks ahead it would mark the end of the
final major hostility flashpoint in the region (there are still some minor skirmish areas, such as
the VRAEM region of Peru run by narco-terrorists who call themselves Shining Path) and a
major step forward for Colombia in particular, for its mining industry and all other points too.
Things are still in the rough and in early stages on this story, so we’ll see how things lie at the
end of this month when our regular quarterly country regional risk update comes due, however
we shouldn’t get our hopes up too high right now because as this (6a) interesting report notes,
we’ve seen no fewer than 16 attempts at negotiation or agreements between the government
of Colombia and the FARC-EP since 1984 and none have ever come to much.
2

Ecuador’s left wing parties hold their primary and vote Alberto Acosta as their single
Presidential candidate for the 2013 election
Sitting President Rafael Correa is still hot favourite for re-election in the Presidential vote
scheduled for 2013, but he does have cannons to the left of him (the Guayaquil right-wing
establishment block) and now cannons to the left of him, as last week the left-wing parties of
Ecuador held their (loosely termed) primary and decided that Alberto Acosta would be their
single unified candidate (7). Acosta, the once right-hand man of Correa before they fell out over
law changes in the mining industry way back in 2009/2010 (we covered the issue at the time)
won 55.7% of votes and beat out the other five candidates.
Once the race gets going we’ll find out how much traction his pro-ecology (and obviously anti-
mining) policies get, though it will be interesting to see how much of Acosta’s platform gets a
thorough airing and debate during the election period, as changes in public opinion may move
Correa and his election pledges too. A story to watch, though definitely from the sidelines as
we’re still talking Ecuador here, not anywhere safe for junior mining exposure.
Mexico: Enrique Peña Nieto confirmed as election winner
In a decision that surprised nobody (neither friend or foe), the PRI candidate Enrique Peña
Nieto was confirmed winner of the 2012 Presidential elections in Mexico by the country’s
supreme court last week The decision was met by calls from second placed AMLO for “civil
disobedience and the #yosoy132 student’s movement has already taken to the streets for
protest marches (8). However, the impact of pushback from the supreme court’s decision is
almost certain to be minimal and the now President-Elect Peña Nieto will make it official on
December 1st. We remind readers that in our specific realm, the Peña Nieto win can be
considered a positive for the mining business with “business as usual” the best way to label
things simply.
Peru Conga: Government lifts State of Emergency in the Cajamarca protest regions
As mentioned on the blog yesterday (9) on Saturday September 1st the Peru government
decided to lift its State of Emergency decree that has been in force in the districts of
Cajamarca, Bambamarca, Celedin, in other words the three provinces inside the wider
Cajamarca region that are ground zero for the anti-Conga protests. The move is being spun by
the government (via the always pro-gov’t State news agency Andina (10)) as one that will
“open the doors to dialogue”, but the reception from the anti-mining political powers in
Cajamarca was an immediate “lifting the State of Emergency doesn’t go far enough, the
government must cancel the project”, so that’s your real chances of dialogue made clear
enough, I think. As for what this really means, it’s probably more about the way in which the
new Cabinet Chief Jiménez wants to draw a line under Conga and make it of secondary
importance in public affairs than any move that will re-start a meaningful negotiation between
two sides still wide apart. We again underscore that the best thing for Peru now is a Conga
that’s on ice, but not cancelled, through 2014 at which time Santos will be voted out as regional
Governor. At that point, Yanacocha S.A will be able to make a better decision on a timescale to
move forward. Yes, this implies a two year delay to the original plan, but two years is hardly a
big pill to swallow in the large scale gold mining industry (care to read about Barrick’s
confirmation of construction of Pascua Lama in 2001 and its scheduled commissioning and first
pour in 2003? No problem, link right here (11)).
Peru: Environmental permits to be handled by the Ministry of the Environment
On Wednesday Peru presented a law project that aims to put the decisions regarding
environmental impact studies and permitting into the hands of the ministry of the Environment.
Up to this point mining EIAs are handled by the Ministry of Energy and Mining. The Minister of
the Environment, Manuel Pulgar Vidal, was quick to try and allay the worst fears of the industry
by saying that his ministry wouldn’t suddenly take on all the EIA and permit applications the
day after the law was passed, but rather the move to the Environment Ministry for permits
would be gradual (12). However, the fears of mining companies about an extra delay to any
plans due to the need to rely on the relatively new and definitely understaffed Environment
Ministry and the brand new department inside it that would be created, called ‘SENACE’
2

(Servicio Nacional de Certificacíon Ambiental para las Inversiones) aren’t going to go away just
because the minister added some soothing words. This may become yet another bottleneck
point in the permitting procedure in Peru and slow things down even more.
Argentina: Neuquén Supreme Court ratifies referendum against copper project
In Neuquén province Argentina last week, anti-mining locals in the area around the ‘Campana
Mahuida’ copper project won a significant victory when Argentina’s Supreme Court rejected an
appeal lodged by the provincial government and ratified (13) the validity of a local referendum
vote that went against the mining project owned by the Chinese capital company
‘Emprendimientos Mineros S.A’. The Supreme Court ruled that the locals’ decision to reject the
project was legal and binding, which is likely to kill the project which was based around a 15
year open pit copper mine and mill facility (14). This is not a binding decision for the whole of
Argentina or even the whole of the Neuquén province (note: Neuquén has little in the way of
mining projects up to now but is a major hydrocarbon producing region in Argentina) but it
does set a strong precedent for the results of local referenda that are correctly organized by
regional authorities (Yamana (YRI.to) (AUY) at its Suyai project the Chubut will not have
enjoyed the Neuquén news, as that has already seen a rejection vote from a referendum
amongst locals), and might also make the case for the calling of up/down votes regarding
mining project in other regions, though we’ll see about that down the line at some point.
Market Watching
Vena Resources (VEM.to) is a short-term buy at 15c but it’s a sell at 21c
Last week I met up with Pres/CEO Juan Vegarra of Vena Resources (VEM.to), along with key
members of his team. The main subject of conversation was the reasons for and fallout from
the 2q12 financials (we commented on those in IKN172 two editions ago) that saw the
company post a negative $16.8m working capital position.
The reasons were as expected, namely that JV partner (term nowadays used very loosely)
demanded its debt be repaid as soon as Azulcocha S.A. had received its operating permits. This
change in attitude from Trafigura (to be very, but very diplomatic) basically boils down to the
company playing hardball with a minor partner, because anyone with access to the VEM books
(i.e. anybody who cares to look for them on SEDAR) can see that VEM did not have the cash to
reimburse Trafigura at that point. The whole JV exercise was supposed to be one that saw VEM
and Trafigura move forward with the Azulcocha operation and VEM repaying its long-term debt
via the cashflow. What we don’t know is exactly why Trafigura changed its mind, as it might
have been its strategy all along or it might have been a bureaucratic decision somewhere in a
head office in Switzerland that was a
surprise to the Peru end of the the
same company, but in the end it’s a
moot point.
So we know that VEM is in hock to
the tune of $16.8m which under
normal circumstances would cause a
tinycap junior’s share price to cave
into nothing. However, we’ve seen a
pretty strong showing from VEM in
the last two week all things
considered (chart right) so the
question has to be why. Let’s put a
few items of evidence forward:
• We read the 2q12 MD&A, which is loaded with hints and read-between-lines messages
2

• I listened to what CEO Vegarra and his team could say to me without getting into
trouble. In particular, I got him on record as saying that VEM, “...is actively marketing
its assets” and “...is working to rejuvenate its balance sheet”. In other words, it needs
no rocket scientist to work out that VEM is going to sell an asset (or perhaps two) in
order to cover its working cap negative position and in the short-term as well.
• We note how the company share price has held up instead of dropping like a stone and
we particularly notice some very, but very interesting block trades that went through in
the last couple of weeks in August. They all traded through the Lima BVL exchange but
the size and persistent nature of the buying at 15c to 17c suggests that someone
somewhere really knows what they’re buying (and note that the chart includes
weekends and public holiday dates when the market was closed , eg Saturday August
18th, Sunday August 19th etc).
VEM Lima listing: Daily traded volume, July & August 2012
1000
900
800
700
600
500
400
300
200
100
0
3
7-2 7-4 7-6 7-8 7-01 7-21 7-41 7-61 7-81 7-02 7-22 7-42 7-62 7-82 7-03 8-1 8-3 8-5 8-7 8-9 8-11 8-31 8-51 8-71 8-91 8-12 8-32 8-52 8-72 8-92 8-13
source: bvl website
dedart
serahs
fo
sdnasuot
• We read that although Trafigura is calling in its loan, it’s also giving VEM time to come
up with a deal. That’s a combo which seems to suggest there’s a deal that Trafigura
wants VEM to do and it’s giving the company some sort of grace period before getting
nasty legal on the company and filing for debt recovery (which would immediately send
VEM into Chapter 11 or equivalent as is simply doesn’t have the current assets to pay
back Trafigura in one shot).
The bottom line is that all arrows are pointing in the same direction: VEM is about to dispose of
an asset in order to cover its debt. Also, as VEM owns 70% of Azulcochamining S.A. but has to
carry 100% of the company’s debt position on its books as majority owner at the moment, the
most logical move is either to sell it’s 70% of Azulcochamining (most likely) or sell at least 21%
to Trafigura, which would then make that larger company the majority holder of
Azulcochamining and lift the JV company debt from the VEM books (less likely). Another
possibility is that VEM sold its other large asset, its share of the Minenergia JV that holds the
Macusani uranium asset, but as the market doesn’t seem to care two hoots for U right now
that’s less likely, unless VEM accepts a real fire sale offer price.
Those are the options and although I must stress that I have no special secret inside info on
this (and VEM management were very careful about what they were saying so as not to
compromise themselves) by examining the evidence at hand the most logical conclusion by
quite some way is that VEM is about to sell its share of Azulcochamining S.A, either to Trafigura
or to some other third party, in order to lift the debt and threat of bankruptcy from its books.
This would also explain why some unknown person(s?) has been a steady buyer of VEM shares
at market in Lima, because that sort of buying is the sort that’s confident the company behind it
isn’t about to go to the financial wall.

We now move to your author’s call on the stock and the first thing to note is that if some bigger
hand is keen on buying VEM at 15c to 17c, then there’s absolutely no reason whatsoever for us
to sell at the same levels. If our unknown person likes the stock so much, then he or she
expects it to move up. Therefore, we’d go so far as to call VEM a near-term trading buy
at 15c and expect it to rally to a higher level in the near term if/when news of an asset sale
that cleans up its books hits the market. If VEM cleans up its books, pays its debts and even
manages to add a bit of working capital to the top line, it still has plenty of assets and things it
can do in order to add value. If we assume the path of least resistance here and say that
Azulcocha is sold, what will be left is:
• Esquilache (silver and gold and very big)
• Pucará (gold and silver and small, but with the potential for fast-track development
• Azulcocha West (the 100% VEM owned concessions next to the Azulcocha mine and
not part of the JV, with plenty of silver potential)
• Azulcocha East (again, 100% VEM owned concessions next to the Azulcocha mine and
not part of the JV)
• Macusani JV (28m lbs of uranium may come back into fashion one of these fine days)
• Granja Nueva (apparently under a CA or two at the moment, so a deal is potentially
there for this big copper target)
• Various land assets in the North of Peru (VEM informs your author of a packet of six)
• Other non-core assets.
By studying that list and the comments made by VEM while I asked about the assets and what
they planned to do, it looks pretty clear to me that VEM is turning into a precious metals
focussed company with a short-term cash flow objective form those PM assets. So VEM might
be in financial problems right now, but assuming they get sorted (again, if they’re not about to
be sorted out those big block share purchases on the BVL would make no sense at all) it’s a
company with plenty of land assets at its disposal at its current market cap of around $20m
would look cheap enough. There’s plenty of value there at that price
However, at this time there is likely to be a limit to which the stock can rally and I’m best-
guessing a figure of around 21c to 23c, basing that on the asset value left in the stock if
Azulcocha goes. And now we come up against the new IKN policy of moving away from
exploration junior stocks and towards producing miners because if Azulcocha leaves the VEM
stable, it doesn’t matter how good their intentions as a company are of getting an another one
of their assets up, running and cash flow positive in the near term, because VEM without
Azulcocha will not be a producing miner company, period. If (repeat if) Azulcocha is sold in
order to clean up the books, VEM is making absolutely the right decision for the company and
its well-being and should be applauded, but at the same time it’s stepping away from the type
of portfolio I want to be holding for our desired market rebound to come (the one that’s
hopefully only just started). Therefore although I am a near-term trading-style buyer of VEM
stock if we see 15c in the week to come, that’s strictly a strategy that looks for a quick win. The
baseline decision here is not to sell my position in VEM at any price, but if a price of 21c (or
perhaps slightly above) is shown, then I am a seller of Vena Resources.
Rio Alto (RIO.to) update
I met with company COO Victor Gobitz and VP Corporate Affairs Jaime Soldi at the Rio Alto
(RIO.to) HQ last Monday. Here’s the upshot of the meeting in bullets:
1) The mine is running well. The end of the best high-grading parts of the rock is
confirmed, but we knew that already.
2) The mine is currently running at-or-about its current design maximum of 24,000tpd.
When pushed I was told that modelling on an average of 24ktpd was fair.
3

3) The move to increase production to 36,000 tpd is now on track. The timeline for that
will begin on the second week of September (i.e. this month), the throughput rates will
increase steadily through the rest of September and October, so that by November RIO
expects the mine to be running at 36ktpd, glitches and teethings permitting of course.
4) The feasibility study for the larger phase two sulphides project remains on course and is
expected to be delivered around the end of the first half of 2013, which means on time.
Management was keen to stress that they’re lookig to finance 100% of this stage two
from internal cashflow, so the clear target is still zero (or minor) share count dilution
from here. I like that a lot.
5) On the oxides exploration front, RIO has been getting some fairly good results from a
target on the South end of the property called La Colorada. It warrants further drilling
and exploration so that’s just what the team is going to do, but we shouldn’t expect any
ongoing drip-drip type news from the program at La Colorada, as the company is likely
to adopt a stance of waiting until his has a material 43-101 resource before saying
anything out loud, and that will be next year at the earliest.
6) Now the question of what to expect from the current quarter of production. I broached
this subject in IKN173 last week and ended that short piece by writing “...[o]ur current
model has RIO producing 50,289 oz Au in 3q12 and just by looking at that June 2012
month’s production, we may be shooting a little too high with that figure”. So to what
gleaned and the guys obviously couldn’t tell me anything specific, quite right too. I kind
of prodded them for a response or three from several angles (I quizzed on grades,
recovery levels etc) and then threw out a few hypotheses of my own to see how they’d
respond. In general terms our ongoing hypothesis we’ve used all year, that due to
decreases in gold grades on leach pad material 3q12 is to be the lowest production
quarter of 2012, is spot on (the throughput increases in 4q12 will see to that). So we’re
going to see less than the 56k and 58k from the first two quarters. How much lower
isn’t so easy to say, but from the word signals,
reactions to my crazy ideas, body language etc La Arena 2012 forecast gold prod, per qtr
Oz Au
picked up etc I don’t think it’s going to be a
70000
whole lot lower than our currently assumed 60000 55973 58801 55712
50,289 oz Au used in the model right now, so 50289
50000
overall (and perhaps giving myself a couple of
40000
thousand oz leeway) I’m going to stick with the
30000
current forecast model and look for RIO to
20000
produce 50k in 3q12. We’ll find out early in
10000
October whether that’s the right call, but the
0
most important thig to remember about the
1q12 2q12 3q12est 4q12est
3q12 number, whatever it turns out to be, is that source: IKN ests
it’s as low as RIO is going to go in 2012 and
2013...and 2014 probably, for that matter because once the throughput upgrade kicks
in the mine’s production outlook changes forever.
So overall, a positive meeting at the RIO HQ and good news to report. Our Top Pick stock looks
in good shape and we’re very happy holders of our only real winning position of 2012...and the
Good Lord knows both myself and my back pocket thank their lucky stars that our only real
winner also happens to be the biggest weighed position on the list. A small mercy that has
basically saved my financial year.
OceanaGold (OGC.to) (OGC.ax): Hedge liability doubts and market-watch update
First a question that’s been raised by a couple of you. Last week I ran a few numbers on the
gold put mechanism OGC plans to commit to once its financing deal is signed and closed. In the
note last week, I assumed that the company will likely mark the hedge to market and take a
financial adjustment (gain or loss) depending on the liability remaining in the position per
quarter, but a couple of you have pointed out to me that using puts in this way is unlikely to
3

need a P+L line item. The most likely way OGC will move forward on this is to simply mark the
put hedge as a liability in the balance sheet until the time is up on the position. On
consideration, that’s probably true and so I apologize in advance for any bad info passed on. I
did put in a mail to OGC to try and confirm the way in which this hedge will be booked but I
haven’t had a reply mail from the company yet and as I was travelling all last week I didn’t
chase up on the query either. If and when I get confirmation of the accounting method for this
put I’ll mention it on these pages, but it needs to be stressed that whatever method is chosen,
the basic fact that the hedge is a fairly lightweight liability, part of a good deal package for OGC
and unlikely to be of any great concern to the company’s plans is all still 100% true. This
mechanism, whatever form it might take, shouldn’t put anyone off taking an investment
position in OGC.
So to the second item re OGC today and without beating round the bush let’s make it clear; if
I’d been in the office on Thursday I would have pulled the trigger and bought some
OGC.to at the prices offered that day. As it happens I was visiting Ollachea and travelling
so that didn’t happen, but in any case
the prices offered suddenly became
very attractive and if we see them
again, I’m a buyer, period.
Now I’d like to quickly explain why
that’s so. Here’s the chart of the last
two weeks in the stock and it’s the
closest we’ve seen to the $2.41 share
price that featured in the top box of
the NOBS report on OGC in IKN172.
At that time the official call
(paraphrased) was “very likeable but
let’s wait and see if a cheaper price
shows up”. Since then it’s traded up
rather than down in the $2.50s and $2.60s, so the Thursday drop was the first time a bit of
decent value had showed through. As for the mains reason why I’m willing to take low $2.40s
now instead of sitting on the sidelines as per two weeks ago, this pictures contains the
proverbial thousand words:
With gold now at $1,692/oz instead of the $1,615/oz we had on August 19th when publishing
on OGC, the valuation metrics we can use on OGC become that much better. We used
$1,600/oz gold to arrive at our $3.85 price target in the NOBS report, but to give an idea of
price sensitivity, a simple U$50/oz hike in the gold price adds 34.5c to our target, which means
$4.20 at $1,650/oz gold and $4.54 at $1,700/oz gold, representing an upside of 75% to Friday’s
3

$2.60 close and 88% above Thursday’s low price. Back in IKN172, the upside to target was
60% ($2.41 to $3.85) and although interesting, not quite enough in the still-nervy atmosphere
of junior golds just two weeks ago to get me to pull the trigger.
However, the new gold price level now makes any weakness look attractive in OGC, therefore
as long as gold holds above $1,650/oz, I am now a buyer of OGC on any weakness. Even
something around $2.50 would work, so consider your card marked, dear reader.
Conclusion
IKN174 is done, we close with bullet points:
• I’m a buyer of OGC.to on weakness, looking to enter at value compared to its run-up
price of Friday and regarding gold. If the metal stays where it is, I’d consider $2.50 and
not think twice about $2.40.
• I’m a buyer of IRL.to and looking to add to my position in a modest manner next week.
Ollachea really impressed me and is the real deal, folks.
• If VEM offers a quick trade 15c price then I’ll take it, but the main story here is that I’m
a seller at a higher price assuming that it sells Azulcocha (plenty of circumstantial
evidence points that way). If VEM isn’t a producer and I want to hold producers, the
decision is fairly straightforward. Target 21c as from today.
• Rio Alto, steady as she goes. If gold drops hard then of course it will likely sell off with
the rest, but there’s a lot of growth for little or no share dilution built into this company
model and I’m holding on tight for higher numbers, starting with our current $6.29
price target. That said, we raise one cheer at least for the new ATH and 5-handle price.
• Next week promises to be a fun one on the market, with Labor Day tomorrow, Mr.
Obama’s keynote speech Thursday and the BLS job report Friday morning. Place your
bets, ladies and gentlemen...
The top long-term pick is Rio Alto Mining (RIO.to). I thank you in advance for any feedback
sent in. Flash updates will be sent promptly if required by events.
I wish you good trading fortune, ladies and gentlemen.
Otto
3

Footnotes, Appendices, references, disclaimer
(1) http://www.calculatedriskblog.com/2012/09/schedule-for-week-of-sept-2nd.html
(2)http://www.calculatedriskblog.com/2012/09/wsj-interview-with-feds-lockhart-next.html
(3) http://go.bloomberg.com/political-capital/2012-08-02/fist-bump-or-moment-of-silence-how-the-jobs-news-is-
delivered/
(4) http://addictedtoprofits.net/about-dave-skarica/
(5) http://www.rioaltomining.com/
(6) http://www.aminera.com/pdfrevistas/am069.pdf
(6a) http://www.elpais.com.co/elpais/multimedia/graficos/cronologia-conozca-intentos-paz-gobierno-medio-siglo-
guerra?utm_source=twitter&utm_medium=twitter-pais&utm_campaign=ampliar-noticia
(7) http://www.eluniverso.com/2012/09/01/1/1355/alberto-acosta-candidato-unico-izquierdas-presidencia-ecuador.html
(8) http://www.americaeconomia.com/politica-sociedad/politica/miles-de-mexicanos-protestan-contra-la-asuncion-de-
pena-nieto-la-presiden
(9) http://incakolanews.blogspot.com/2012/09/peru-govt-lifts-state-of-emergency-in.html
(10) http://www.andina.com.pe/Espanol/noticia-fin-del-estado-emergencia-abre-puertas-al-dialogo-cajamarca-
426694.aspx
(11) http://www1.hcdn.gov.ar/dependencias/cmineria/pascua_lama.htm
(12) http://gestion.pe/economia/pulgar-vidal-transferencia-eia-al-senace-sectores-y-manera-progresiva-2011232
(13) http://www.rionegro.com.ar/diario/rechazan-una-apelacion-por-campana-mahuida-952499-9862-nota.aspx
(14) http://neuqueninforma.com/2009/06/18/informes-de-impacto-ambiental-subsecretaria-de-medio-ambiente/
Stocks To Follow Closed Positions, 2011
Closed in 2011 closed close PPS
Sunward Res SWD.v jan'11 C$1.05 21-nov-10 C$1.63 55.2% target made, trade closed
Serengeti Res SIR.v mar'11 C$0.245 05-dec-10 C$0.285 16.3% sold pre-tgt, ST trade fail
Fronteer Gold FRG apr'11 U$2.37 03-may-09 U$15.24 543.0% buyout, trade closed
Minefinders MFN apr'11 U$9.09 07-nov-10 U$16.89 85.8% target made, trade closed
Metalline Min. MMG may'11 U$1.04 26-jan-11 U$0.89 -14.4% exit, resource disappointed
Peregrine Met PGM.to jul'11 C$0.87 06-mar-11 C$2.60 198.9% buyout offer, closed
Dynasty Metals DMM.to jul'11 C$4.20 03-may-09 C$2.85 -32.1% Sold. Fail. Move on.
Aura Silver AUU.v aug'11 C$0.22 13-oct-10 C$0.16 -36.4% Bad pick. Take loss
U.S. Silver USA.v aug'11 C$0.52 26-jan-11 C$0.71 36.5% closed to make room
B2Gold Corp BTO.to sep'11 C$2.80 12-may-11 C$4.27 52.5% target made, trade closed
Bear Creek Min. BCM.v sep'11 C$3.80 27-may-11 C$4.17 9.7% macro sell call victim
Minefinders MFN sep'11 U$14.70 10-aug-11 U$15.15 3.1% macro sell call victim
Great Panther GPR.to sep'11 C$3.03 22-aug-11 C$2.64 -12.9% macro sell call victim
Fortuna Silver FVI.to sep'11 C$1.07 03-may-09 C$5.36 400.9% sold 20%, macro sell call
Focus Ventures FCV.v nov'11 C$0.40 20-apr-10 C$0.20 -50.0% cut losses, bad trade
Regulus Res. REG.v dec'1 C$1.17 14-aug-11 C$0.52 -55.6% cut on news of poor 43-101
2009 and 2010 closed positions in appendices below
3

Stocks To Follow Closed Positions, 2010
Closed in 2010 closed close PPS
B2Gold Corp BTO.to Jan'10 C$0.88 08-nov-09 C$1.49 68.2% target made, trade closed
Radius Gold RDU.v Jan'10 C$0.18 23-aug-09 C$0.40 122.2% target made, trade closed
MAG Silver MVG mar'10 U$5.60 23-nov-09 U$7.28 30.0% closed in pdac week
Riverside Res RRI.v mar'10 C$0.435 20-sep-09 C$0.60 37.9% closed in pdac week
Amarillo Gold AGC.v mar'10 C$0.81 31-may-09 C$0.70 -13.6% closed in pdac week
B2Gold Corp BTO.to apr'10 C$1.24 18-feb-10 C$1.50 21.0% target made, trade closed
Lumina Copper LCC.v apr'10 C$0.84 14-jun-09 C$1.55 51.2% total position now sold
Troy Resources TRY.to may'10 C$1.10 03-may-09 C$2.25 104.5% sold on negative results
AuEx Ventures XAU.to may'10 C$2.51 24-may-09 C$3.38 34.7% trade closed
Nevada Copper NCU.to jun'10 C$3.27 14-mar-10 C$2.03 -37.9% need to lower Cu exposure
Carpathian Gold CPN.to jun'10 C$0.39 14-mar-10 C$0.35 -10.3% too exposed to cap raising
Amerix PM Corp APM.v jun'10 C$0.065 08-nov-09 C$0.05 -23.1% victim of macro bear
Antares Minerals ANM.v jun'10 C$1.42 06-dec-09 C$2.10 47.9% sold half
Vena Resources VEM.to jun'10 C$0.37 31-may-09 C$0.23 -37.8% sold half
Minera Andes MAI.to sep'10 C$0.75 28-jul-10 C$0.95 26.7% ST trade closed
Gold-Ore Res GOZ.to sep'10 C$0.52 01-aug-10 C$0.75 44.2% target made, trade closed
B2Gold Corp BTO.to sep'10 C$1.45 25-may-10 C$2.01 34.5% target made, trade closed
Blue Sky Uran BSK.v oct'10 C$0.41 19-may-10 C$0.22 -46.3% v small v bad trade closed
Dia Bras Expl DIB.v oct'10 C$0.14 30-aug-09 C$0.35 150.0% target made, trade closed
S. Amer. Silver SAC.to nov'10 C$1.38 24-oct-10 C$1.60 -15.9% loss on short, small fail
Ventana Gold VEN.to nov'10 C$7.92 27-jun-10 C$13.51 70.6% trade closed on buyout
Lumina Copper LCC.v nov'10 C$1.42 11-aug-10 C$3.65 157.0% trade closed
Antares Minerals ANM.v dec'10 C$1.42 06-dec-09 C$8.40 491.5% trade closed
Rio Alto Mining RIO.v dec'10 C$0.69 23-mar-10 C$2.16 213.0% trade closed
Coro Mining COP.to dec'10 C$0.585 03-oct-10 C$1.24 112.0% target made, trade closed
Stocks To Follow Closed Positions, 2009
Closed positions closed closing PPS
Cardero Res CDY/CDU.to May'09 U$1.20 03-May-09 U$0.87 -27.5% sold on negative news
Eastmain Res. ER.to May'09 C$1.04 06-May-09 C$1.315 26.4% trade closed
Radius Gold RDU.v May'09 C$0.165 03-May-09 C$0.235 42.4% trade closed
Latin Amer Min. LAT.v May'09 C$0.12 03-May-09 C$0.158 29.2% trade closed
Aquiline Res. AQI.to July'09 C$2.03 16-Jun-09 C$1.68 -17.2% took loss, bad timing
Chariot Resources CHD.to Aug'09 C$0.20 12-Jul-09 C$0.415 107.5% trade closed
Castle Gold CSG.v Sep'09 C$0.64 02-Aug-09 C$0.60 -6.3% ST trade didn't work out
Guyana Goldfields GUY.to Sep'09 C$2.30 12-May-09 C$4.50 95.7% profit taken
Los Andes Copper LA.v Sep'09 C$0.09 21-Jun-09 C$0.09 0% trade closed
Pediment Gold PEZ.to Oct'09 C$0.80 09-Aug-09 C$1.00 25.0% trade closed
Minera Andes MAI.to Oct'09 C$0.68 03-May-09 C$0.71 4.4% too much bad news
Dynasty Metals DMM.to Nov'09 C$4.18 03-May-09 C$6.01 43.8% half sold
Rusoro Mining RML.v Nov'09 C$0.55 03-May-09 C$0.57 3.6% underperformed
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The information and opinions contained within this report reflect the personal views of the author and therefore all
material within should not be construed as accurate or reliable or be utilized as advice for investment or business
purposes. Independent due diligence and discussions with ones own investment and business advisor is strongly
recommended. Accordingly, nothing in this report should be construed as offering a guarantee of the accuracy or
completeness of the information contained herein, as an offer or solicitation with respect to the purchase or sale of any
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permission of the author.
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