IKN #179Premium

The IKN Weekly
Week 179, October 7th 2012
Contents
This Week: Happy Monday, Travel plans, On going from 15 to 20 stocks, Water is worth more
than gold.
Fundamental Analysis: Shorting Primero Mining (PPP) (P.to).
Stocks to Follow: Overview, Bear Creek (BCM.v), Gold Resource Corp (GORO), Rio Alto
(RIO.to), OceanaGold (OGC.to), Vena (VEM.to), Minera IRL (IRL.to), Lupaka Gold (LPK.to),
Sunward (SWD.to), AQM Copper (AQM.v), Strait Minerals (SRD.v), Focus Ventures (FCV.v), Lara
Exploration (LRA.v).
Copper Basket: Overview, Candente (DNT.to), Nevada Copper (NCU.to), Western Copper
(WRN.to), Augusta (AZC.to), Lumina (LCC.v).
Regional Politics: Venezuela elections, Bolivia: Looking to set an incredibly bad precedent for
junior mining companies, Chile: Water from the South to the North, Mexico: Chiapas and
Caballo Blanco.
Market Watching: RBC on gold stocks, Liberty Silver (LSL.to) (LBSV) (LBSV.ob).
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
Happy Columbus/Thanksgiving Day
Tomorrow Monday 8th markets are closed in Canada for Thanksgiving, so enjoy the day off up
there. Meanwhile, it’s Columbus Day in The USA but it doesn’t affect the stock markets, which
are all open for business as usual. Enjoy the day on.
Travel plans
I’ll be making a tour of mining people offices early next week, with meets scheduled at covered
companies Strait Minerals (SRD.v), Minera IRL (IRL.to) (MIRL.L), Rio Alto (RIO.to) and two
other companies not currently covered that I’m currently investigating as possibles....and no,
Sulliden (SUE.to) is not on my visiting list ☺. I’ll be back in the office Wednesday evening which
means posting on the blog is likely to be light for the first part of next week.
On potentially raising the number of covered stocks from 15 to 20 maximum
Thanks for all the feedback on the question I posed last week about possibly raising the
maximum number of stocks covered from 15 to 20. There were a range of replies, from “sure
go ahead” to “no, don’t do it or you’ll end up those letters with no end of recos”. Somewhere
between those bookends were more nuanced thoughts, that appreciated the dangers of diluting
the number of recos but also noted that 15, the current limit, is an arbitrary number.
On consideration, I think what I’m going to do is lift my strict ban on staying at 15 stocks
maximum, but will still try to stay at 15 unless an opportunity arises at which point, given the
choice of being stickly about 15 and letting a chance pass or being flexible with myself and
letting a couple of weeks pass with 16 or 17 stocks, I can choose the latter option. I agree that
I don’t want the list to expand too much and see the dangers of blowing out the number of
companies covered; it’s good to be focussed, it brings its own discipline. So instead of breaking
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the rule that’s been in place up to now I’m going to let myself bend it, if needed, just for a
while, every now and again. Thanks again for the feedback, all views were greatly appreciated.
El agua vale más que el oro
My little Chart of the Day on soybeans being a proxy to water stuck on the blog Thursday (1)
elicited some of the most thoughtful and interesting mail feedback I’ve had for quite some time
and it was very good to see that the sources for some of those exchanges were people in
executive positions at mining companies (no names, no packdrill). I asked one of them for
permission to share the mail he wrote and permission has been granted.
Your comment on soybeans and water I found particularly interesting. Growing up as a
farmkid in western Canada - agriculture, food and water were aspects of life that I paid more
attention to than many of my urban dwelling peers. While water is abundant for the most
part in Canada, we all know the same can’t be said for many parts of the world. Both
quantity and quality of water is a problem and I personally can’t see a dramatic reversal of
this declining trend.
We are not yet at a stage where capturing fresh water before it enters the sea, in areas
where it is plentiful, and then transporting it is a viable business. Infrastructure and
technology would seem to be where there are opportunities at the moment but digging up
water pipes strewn across major cities is disruptive and costly and governments usually
aren’t leaders when it comes to forward thinking! I recently learned that something around
1/7th of the water that enters Hong Kong’s system for example actually makes it to the end
user. The rest is lost because of cracking pipes and faulty valves etc – this I suspect is a
problem anywhere where infrastructure is in need of repair.
I’d be interested in your thoughts on this topic and if this is something you follow at all or
invest in (and if so, how?).
And my answer to his last question was, “I invest in mining companies that do the right thing”.
He then replied, telling me a little more about the things his company had been doing around
their project (I’d already heard and knew that the company in question had been doing a great
remedial and proactive job on its community relations, by the way), as for example the local
well water had been nastily contaminated by small-scale informals and one of their initiatives
has been to sink new wells that provide fresh water to a much happier community. He also told
me about the positives that have come from associations with local water groups and NGOs
(the good type of NGO that wants the best for people, not just for themselves). In short, this
company is doing the right thing.
I asked for and received permission to share his mail above because it reminded me of the way
in which my attitude to water has changed over the course of my life. My circumstances were
different, because I was one of those city dwelling children and young adults that never
thought much about water, took for granted its presence and supply, considered it for all
intents and purposes “free”. And looking back, even after I’d started trotting around the globe
that same attitude prevailed because I tended to visit, stay and live in places where water
supply was, quite literally, on tap.
That attitude has changed forever thanks to my arrival and residence in Peru. Without going
into deep detail, for my first period in Peru I lived in a place where the only local water supply
was from a well. Not only do you get first hand experience of how much a couple of jerrycans
of water weigh when you carry them up a hill at 13,000 feet above sea level, but more
important thoughts come when you’re at the end of the dry season, the well is running dry and
there’s a queue of locals at the only well that still has some water (and the haul is 10m or 15m
longer per bucket than when the water table is replenished by the annual rains), you really
start considering what would happen to your life if the water ran out.
When mining-versus-water issues are in play in Latin America, the slogan that’s sprung up and
now gets generalized use, from Tijuana to Tierra del Fuego, is “El Agua Vale Más Que El Oro”,
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which translates as “Water is worth more than gold”. It’s become the catchphrase slogan of the
anti-mining movement on the continent and it’s used even when gold isn’t the main metal
targeted by a new mine, as seen in the reports of the vote that went against Candente Copper
(DNT.to) at its Cañariaco project in Lambayeque Peru last weekend.
It seems to me that the basic problem is doubt amongst local communities, large (Cajamarca
Conga, with a whole region now whipped up into a majority anti-mine position) and small (the
4,000 people who live in Cañaris) that’s then turned to fear either by the arrogance or non-
assurances of a mining company and its project, or by fear-mongering NGOs that play on
people’s doubts for their own ends, or a combination of both. But whatever strategy is used or
basic community relations mistake made, the combo or doubts turning to fears is the basic
cause behind community opposition to mining projects. In other words, the solution to the
problem of good relations between mining companies and communities lies with the mining
company itself, who has to get it right from the start to open, and keep open, a frank and open
dialogue with communities, especially about the key subject of water. The current problems
faced by DNT are a classic example, because it now transpires that the company wants to
divert the course of the two rivers that flow down the Cañaris valley and supply all the local
agricultural lands below. Now, note that I didn’t say “cut off” or “use for itself” but “divert”,
which means that the rivers need to get out of the way of the open pit mine plan more than
disappear off the face of the earth, by the looks of things at least. But when locals first heard of
the river diversion plans in July of this year, the reaction was immediate and is (or seems to be)
the prime cause of the chain of events that led to last Sunday’s 95% anti-mine vote.
I therefore ask: Where was DNT when the diversion plans were unveiled? Did they talk through
the plan with locals? Could they assure them, without leaving room for the doubt which then
turns to fear and ultimately rejection, that the river diversion and eventual arrival of the mine in
their locality wouldn’t affect their water supply or agricultural activities at all? Because if they
did that instead of arrogantly hiding behind a July public consultancy meeting (that locals now
call fraudulent) and the ensuing to-the-letter-of-the-law agreement that says it has access to
the project, maybe they wouldn’t have the problems and the fast-sinking share price they have
this week. And there’s one other thing to say; if DNT can’t assure locals their correct water
supply in the event of and eventual mine at Cañariaco they should get out now, because it’s
true that snappy anti-mining slogan that gets stuck in our faces is true. Water is indeed worth
more than gold and if you don’t believe me, allow me to stick you in the middle of a desert,
leave you alone there for 48 hours with just a one ounce gold coin as company, then come
back with a bucket of water for sale.
It’s up to the mining companies to do the right thing, and doing the right thing comes from
having a responsible, empathetic attitude towards people whose lives the mining companies
affect. One of the worst, boorish, moronic attitudes amongst gringos that I get to read is that
“Oh, don’t these third world people understand that we’re trying to help them? They have to
have growth in order to prosper and get rich, and that’s what we’re offering them...they should
be grateful, not complaining!”. Because it’s not just attempting to foist a project on them, but
also their own values. It’s ignorance squared. Mining companies also fall into this trap, pushing
the advantages of their plans and trying to minimize the negatives that they think might be a
fair trade-off compared to the wonderful economic advantages coming the way of their chosen
backwater, but mean much more to a people with other values and lists of what is or is not
important. Water is a key issue and I’ve felt what staring down a dry well does to the pit of my
own stomach, which is why I was so keen on showing you that mail sent in to me. And I know
I’m kind of pushing my anonymity agreement with the person, but I’m also glad to say that it
came, unsolicited, from an executive in one of the mining companies we cover and recommend
as a buy here at The IKN Weekly.
3

Fundamental Analysis of Mining Stocks
Still trying to make a decision on the next potential purchase
That new buy reco of a producing miner I’ve been on about for the last two weeks is still on my
mind, but I’m still waiting to receive some key information that will decide whether I pull the
trigger on this company or not so for the time being it’s staying under wraps. I’m not trying to
get cute with you all, just telling it as it is.
I considered pre-covering the company this weekend (it would have been an easy write-up, as
it’s 80% done) but on Friday something else happened that has, I believe, offered up an
interesting near-term trading opportunity, so that’s what’s being presented in ‘Fundamentals...’
today. Read on.
Primero’s (P.to) (PPP): A one-time, near term shorting opportunity
NB: This analysis draws on the NOBS fundamental report featured in IKN173 and makes
reference to that report on a couple of occasions, but is best understood in full context of that
report. If you’d like me to send or re-send you IKN173, please mail me and I’ll do just that.
On Friday Primero Mining (P.to) (PPP) announced (2) that the Mexican tax authority had ruled
in its favour and that the company would be able to pay tax on the silver it produced at
received prices, rather than spot prices. This is important because most of the silver produced
by P.to during the year is sent to Silver Wheaton under its streaming agreement and is sold to
the stream company at $4.08/oz. And come 2014 that will be the price fetched by all the silver
production if it stays at current levels (see the NOBS report in IKN173 for the nitty gritty
details).
Now that’s pretty good news for the company, but the reaction from the market was wild.
Here’s the five day price chart in PPP that shows....
...the 36.5% gain on the day in the US listing on very heavy volume for the stock, with the
Canadian listing shows the same type of performance. People, this is a big overreaction and it’s
not that big a deal, which is why Primero Mining can be considered a potential short next week.
Here’s why.
There seems to be a misconception amongst market watchers as to how much this affects PPP.
Here for example is a Bloomberg report on the news (3) that came out Friday morning, just
after the news had hit:
“The ruling was unexpected,” Craig West, a Toronto-based analyst at GMP Securities Ltd., said in an
interview. “This is a lot more fair. They were being taxed on revenue they were not getting.”
4

West said the company was effectively being taxed at a rate of 70 percent to 80 percent, whereas now the
rate will drop to 30 percent. He raised his rating on the shares to buy from hold.
That, ladies and gentlemen, is not true for two very fundamental reasons. Firstly the ruling only
affect the silver revenue at PPP, not the gold. As this chart (from IKN173 NOBS report) shows,
the vast majority of PPP revenues comes from gold and not silver.
P.to: Gold and silver quarterly revenues breakdown
60
50
40
30
20
10
0
2q11 3q11 4q11 1q12 2q12 3q12est 4q12est
source: IKN calcs from P.to data, IKN ests for 2h12
5
m$U
silver revs
gold revs
...that has always been taxed at the normal corporate rate in Mexico (which is officially 30%,
but I’m told that most profit-making companies make use of a couple of simple loopholes and
get it down to 28%). To say that PPP was being taxed at an effective rate of 70% to 80% is
simply ridiculous (and basing an upgraded but call on the stock on that reasoning is worse)
The other reason that Craig West of GMP is wrong is that since October 2011 PPP has been
filing its taxes assuming that it would win its appeal, and therefore assuming its liabilities on
$4/oz silver, not spot price silver. Exhibit A, this taken from the 2011 year end financials:
In other words, PPP has been paying taxes in 2012 assuming that it would win the fight, which
makes sense when you check out the recent filings. For example, in 2q12 PPP registered pre-
tax earnings of $22.356m and net earnings (i.e. after tax) of $15.005m, a difference of 32.9%
which was slightly higher than the normal tax rate due to tax adjustment line items of great
mirth and fun such as “impact of foreign exchange” ($1.647m), “Witholding taxes on
intercompany interest” ($1.13m), “Benefit of tax losses not recognized” ($0.832m) and other
such yummy line items that those tax accounts just adore playing with (and I don’t want to
understand, let alone don’t understand). For your own viewing pleasure, check out note 6 of
the 2q12 financials yourself because it’s sending me to sleep, here.
In brief, the taxes PPP has been paying recently aren’t 70% to 80%, nor are they 30% on gold
and 70% to 80% on the silver; they’re normal. Craig West of GMP will probably complain that
he was misquoted soon.
In the NOBS report of IKN173, we wrote this in the valuation section of our report:
“If PPP gets the tax judgement to go its way, we calculate it as being worth
around 2% of MOI and will improve the numbers used today. If PPP doesn’t
get the judgement it wants, our model loses nothing.”

That still sounds about right to me, though we should add that PPP can now also hold back on
its taxes receivable” line item that stands at $9.514m in the 2q12 numbers. That could have
been used to help pay back taxes that PPP would have owed the State of Mexico if the ruling
had gone against the company, but can now used to offset other taxes it will owe on its normal
corporate burden. So basically, I reckon that the ruling gives PPP $9.5m in tax credits to use
and adds about 2% of oomph to the model we used in IKN174 for future quarters. Yup, that’s
all. About 10c per share and about $3m, call is a rough 3c/share per annum onto mine
operating income. That is not, not repeat NOT enough to shoot a stock up 36% in one day.
Now, you can argue about the effect on revenues if you like as I’m basing my call on my model,
not on the past reality of the quarters gone. If you want to push me to 5c/share and say it’s
worth about 50c + 10c onto my target price, well I’d just about go for that. Then as things
stand and gold has upped strongly since IKN173, if you want to model PPP on $1,800/oz gold
instead of the $1,600/oz gold I used that day and make the nominal target $5.35, I’d just about
accept it inside the bounds of optimistic reasonable. Then if you wanted to add the new 60c
added by the silver tax ruling and take my target to $5.95...well ok, it’s suddunely a bullish
market, let’s cut the bulls some slack. But suddenly paying over $7 for a company that’s not,
repeat NOT going to get masses of tax benefit from its silver production? Sorry guys, no can
do.
For me, PPP is a short at today’s price and I’m going to short it first thing tomorrow morning on
a short-term play and ride it back down to $6, where I’ll jump off and take the approximate
20% profit that the market gives me. I firmly believe that the people reading the news on
Friday read far too much into it, PPP is not going to benefit a great deal from the news and
when the market realizes this, the stock will retreat to a more reasonable level. This will be
strictly short-term, short trading position that is not reflection at all on what I consider a well-
run gold mining company. Rather, this is a reflection of an overreactive capital market.
6

Stocks to Follow
Over the week our list of 15 open positions saw eight move up (RIO.to, BCM.v, YMI.to, LRA.v,
OGC.to, LSA.to, GORO, SRD.v). six move down (VEM.to, SWD.to, LPK.to, PLA.v, IRL.to, FCV.v)
and one remain unchanged (AQM.v). Of the larger moves, best ups were in Lachlan Star
(LSA.to up 11.1%) and Rio Alto Mining (RIO.to up 10.0%) while worst downs were in Minera
IRL (IRL.to down 12.55) and Vena Resources (VEM.to down 12.1%).
It was another week that seemed to underscore your author’s preferred positioning in producer
plays, which has been in place for a couple of months now so it’s debatable whether I can still
call this preference a new one, with best action coming in what the market deems as quality
juniors while the small, illiquid or previously troubled names remain largely ignored.
With the addition of Lachlan Star (LSA.to) last week there are now 15 open positions on our list,
our self-imposed maximum. Eight of the positions are in the green and seven in the red.
Company Ticker this week Init Price Reco date Current PPS Gain/Loss% Notes
Top Picks
Rio Alto Mining RIO.to hold C$2.04 07-apr-11 C$5.74 181.4% $6.29 tgt
Recommends
Vena Resources VEM.to hold C$0.35 31-may-09 C$0.145 -58.6% target lowered to 21c
Sunward Res SWD.to buy C$1.47 13-mar-11 C$1.22 -17.0% considering sale, st buy
Lupaka Gold LPK.to hold C$1.12 23-oct-11 C$0.68 -39.3% considering sale
Bear Creek Min. BCM.v hold C$3.38 07-nov-11 C$3.74 10.7% 3rd add Fri 21st
Yellowhead Min. YMI.to buy C$1.00 01-apr-12 C$0.70 -30.0% value under $1
Lara Expl. LRA.v buy C$1.15 08-apr-12 C$1.29 12.2% solid biz model, LT hold
Plata Latina PLA.v hold C$0.79 10-apr-12 C$0.50 -36.7% considering sale
Minera IRL IRL.to buy C$0.65 22-jul-12 C$0.77 18.5% $1.56 tgt added more
OceanaGold OGC.to buy C$3.03 16-sep-12 C$3.30 8.9% new position $5.34 tgt
Lachlan Star LSA.to buy C$1.50 30-sep-12 C$1.60 6.7% new position $2.23 1st tgt
Gold Res Corp GORO short U$21.47 09-sep-12 U$20.52 4.4% SHORT Position tgt $14
Smaller/Riskier
AQM Copper AQM.v hold C$0.31 16-oct-11 C$0.14 -54.8% considering sale
Strait Minerals SRD.v buy C$0.125 09-dec-11 C$0.12 -4.0% tgt 25c drill play
Focus Ventures FCV.v hold 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
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% failed ST trade close pre 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 sep'12 C$1.07 03-may-09 C$5.32 397.2% sell call $6.17/ Mar25
2009, 2010 and 2011 closed positions in appendices below
Now for some notes on a selection of the above stocks.
Bear Creek (BCM.v): As planned I let a few of my trading shares go, some of the ones that
had been built recently around the core holding. In theory I have the right (ha ha, whatever
that means) to drop my cost average price back down from the current $3.38, but as it was
7

only a small tranche of the whole (and I don’t really care either) it’s staying where it is, for
transparency’s sake more than anything.
Apart from that, not much to report in this position. What is good is that sustained market
interest was seen in the week, with four of the five trading days all seeing BCM trade over 100k
shares (bar Friday) in the Venture listing.
Gold Resource Corp (GORO): Our eyes move to the production numbers expected out of
GORO next week. The stock traded in an asthenic manner without ever showing gaping
weakness, and the sub-$21 finish on FRiday just about sums up its week. We now find
ourselves on the right side of this short position but it’s still small beer compared to the type of
drop we’re expecting from GORO between now and mid-November, the trade’s expect time
period. As long as GORO sticks to the expected release date for production numbers, more next
week for sure.
Rio Alto Mining (RIO.to): For the record, when RIO marked up $5.75 on Friday it went
through the $1Bn market cap barrier for the first time ever (by a couple of thousand dollars).
The $5.74 finish after a very positive Friday was still excellent, a new 52 week high close (of
course) and puts us within 10% (from Friday’s close) of our own $6.29 target price. I was
asked Friday by one of you (reader ‘DC’, for what it’s worth) whether it was time to review that
price target and the answer, for the moment, is that for me at least there’s still some room and
therefore time to consider things. I’m also due to hook up with the management team at RIO
HQ on Tuesday morning where it’ll be coffee, chat and an attempt to gauge a little further
where we are right now, especially on things such as the ramp up to 36ktpd on the oxide and
the last quarter’s production numbers.
OceanaGold (OGC.to): OGC did a treading water type of thing, with the only perky moment
coming when the company put out a NR Thursday morning (4) that basically confirmed what
we’d hear the week before; that Didipio was around 85% complete and on its timeline target.
However, I did like reading that ore was now being stockpiled and processing was due to start
in November, so as long as we can trust this late-stage word (no reason not to) that’s bang on
schedule. The phenom of upwards re-rating after a successful mine start for small miners has
been a constant in recent times and OGC right now finds itself in that sweet-spot of near
producer at Didipio. We’ve run over the numbers and the mine looks set to significantly boost
corporate production and well as lower its overall cash cost profile. Barring a wholesale
dumpage in the gold price, this one looks good for more share price appreciation in the near to
medium term. At least I think so, but I’m long and biased.
Vena Resources (VEM.to): Not only was I unpleasantly surprised in the direction of trading
in VEM, but the Friday after hours NR made my heart sink. I’ve follow this stock for a long time
(too long, yes I know) and honestly thought this week the market would see the value of the
new stripped down, balance-cleaned VEM and bid the stock up on its portfolio. But no, nothing
doing and we saw as low as 13c before it made a bit of a recovery Friday.
Then came the Friday evening NR (5), which announced VEM would is running a 2x1 share
rollback, which will come into effect on traded share October 12th which made my heart sink.
There are pro and con arguments on rollbacks of this sort, but in the end 1) they’re purely
mathematical, as a company with 120m shares prices at 15c is the same thing as a company
with 60m shares priced at 30c, but the thing is that 2) a rollback of this sort is a white flag of
surrender, of failure, of a company that has given up the ghost of trying to get its share price
back to a reasonable level using business means and wants it there for its own purposes.
Potentially setting up for a placement.
I’m bored with having to go through the rack with this company. Holding for now and the
reasonable, modest price target of 21 is still in place. If that changes you’ll hear from me before
I take any personal action, not afterwards.
8

Minera IRL (IRL.to): It was down 12.5%, but it’s fair to say we expected that after last
week’s tape-painting. We said as much last week in IKN178 too, with...
“... somebody decided they wanted it painted for the end of 3q, so we got to
book it at 88c this weekend. No biggie, but if you want to buy or add IRL to
your port next week, find yourself a lower price than that because for what
it’s worth, the 50p close in London is a forex adjusted 80c in Canadians.”
...sending our IRL comments on their way. As for next week, I’m meeting up with the IRL team
on Tuesday so plenty more in IKN180 for sure, but if there’s anything time-sensitive that comes
up you’ll get it in a Flash update. One thing picked up already is that IRL is looking to secure
what I consider the key to its immediate future, the permit for the Don Nicolas project in
Argentina, in this month of October and if that happens we can expect the share price to move
higher.
How key do I consider this? Reader KC asked basically the same question during the week as
he wanted me to make a little clearer the script and thoughts on IRL as contained in last week’s
edition (and it’s true, they could have been mis-read so it’s my fault and not KC’s). Here’s what
I wrote back to him, name redacted, top and bottom pleasantries removed and grammar
brushed up a bit but apart from that, word for word:
1) Yes Don Nicolas permits are key to the chain of events that IRL has set up for
itself. I have no doubt that with permits in hand it can raise the cash and build the
mine and make the project into a successful reality.
2) It's key because it's the big catalyst point for all company plans (see above) and also
for the next set of events to finance and build Ollachea. And it's key because it's the
only big piece of the puzzle that's not in their hands, rather it's in the hands of
Argentine politicos, a bunch of assholes i know all too well.
3) However, any plan must have its alternatives and there's nothing to stop IRL from
jumping over Don Nicolas and moving to build and commission Ollachea first. The
two aren't connected by an umbilical cord, they're on a timeline plan. It would be a
pain if IRL had to defer Don Nicolas, but it's not impossible either and there's no
reason to say that Ollachea cannot happen without Don Nicolas happening first.
Ollachea can indeed happen first if the need arises.
4) So if all goes well with the Argentine permitting, this conversation is totally
redundant and Don Nicolas happens first. If not and Argentina dicks IRL around too
much, then the project can be shuffled back and Ollachea becomes the next mine. And
really KC, this is why I'm holding back too! I have a position because i like the
risk/reward from here and a THINK that IRL will get its permits in Arg, but i'm not
sure enough to really commit the way i'm prepared to commit on this company until
it's a done deal. I have it clear in my own mind that Don Nicolas permitting done and
dusted, plus financing secured for its construction, will turn IRL into a Top Pick play
at the Weekly and also get me much longer than i am already. If it doesn't happen the
way it's been planned out, then i'll be long to the extent i'm long today (which is a
moderate position and in the green, so it can take a small hit if necessary) and then i
can decide on whether to add/hold/sell once the new circumstances are known.
IKN179 back and be in no doubt, this one is my idea of a real strong investment if it can secure
those permits and the cash to make Don Nicolas a reality. Anyway, more next week
Lupaka Gold (LPK.to): We had the official, all-done-and-dusted news Monday that, as
expected, AAG was now swallowed by LPK (6). We also had LPK’s CEO, Eric Edwards,
appearing on the Al Korelin show which for me is a big meh as I refuse to even listen to Korelin,
one of the dumb double-dealing voices out here. Luckily, the dirty work was done by Iwnattos
over at Market Narrative who reported back this (7) as the main points:
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Edwards seems to admit now that the only reason they bought AAG was cos they were
shut out of capital markets with everyone else, and unless they bought AAG they'd be
out of cash by December. Like I said. Now they're "cashed up for 2 and a half years".
Anyway, they've started drilling A2 thru A4 last month. He says it's a "key news driver
within the next month to six weeks." He says "we have every expectation, on a
geologic and scientific basis, to believe that [...] we've got another similar-sized
deposit on the Crucero property" in the A2-A4 zones.
So LPK wanted AAG for the money...yup we knew that. But I somehow doubt that $13.5m in
cash (an IKN estimated $12m working cap) is enough to see LPK through the next 30 months
as it implies a burn rate of $400k per month on average that would have to account for all
drilling, too. Hey, I could be wrong but a raising this time next year looks far more likely,
especially if the company actually finds what it’s looking for at Chaska and gets aggressive on
the program in FY13. As for that A2-A4 zone, now known as Chaska, should give results back in
the next four to six weeks and the tone of Edwards’ rhetoric was pretty bullish on this, the main
upside driver to LPK. So yes, I may not have enjoyed the corporate shenanigans at LPK which
have watered my shares down by far too much but I’m hanging in there, Iwnattos.
Sunward Resources (SWD.to): We saw some chunky sized block trades going through on
SWD last Wednesday and Friday and from what I could gather (without being able to nail down
names...don’t want to push sources too far) the action was from “weak hands” and into “the
same big buyer” that’s been interested in picking up SWD shares for the last few months and is
considered a strong hand by those in the know. Over the week SWD didn’t trade that well and
gave up its early week gains come Friday, but apart form that and the block trades there’s a
calm about the place, potentially due to the lack of a big catalyst announcement for the next
quarter or so (bar new drill results or something else).
Finally, we note that SWD is exhibiting at the Medellin International Mining Show 2012, that
runs in that city October 17th thru 19th and will have all SWD top management present, we
understand. Good for Colombia relations and if you’re in the area, you may want to meet and
greet them as well.
AQM Copper (AQM.v): Waiting for Godot.
Strait Minerals (SRD.v): Still quiet here, with a price stuck in neutral and tiny volumes, but
I’ll try and get the latest lowdown on how things are going at the Alicia JV with Teck when I
drop by the SRD offices on Wednesday to talk with the crew there. More next week, for sure
Focus Ventures (FCV.v): A little birdie tells me that David Cass, President of FCV, was in
Colombia reviewing properties last week. Maybe nothing comes of the visit and maybe
something does (I honestly don’t know and he wouldn’t tell me either, he’s a straight-play type
of guy) but it shows FCV is run by someone actively looking for the next opportunity and not
just resting on the current Santa Cruz property for upside kicks.
Lara Exploration (LRA.v): As part of my jaunt to Lima next week I had planned a hook up
with André Gauthier, company president and main man of its Peru ops. However we’ve missed
each other this time because he told me that he’s doing plenty of globetrotting at the moment,
including a just-complete trip to Colombia and upcoming stays in both Brazil and Chile. The
Colombian angle sounds interesting, as there was more than a hint of something connected to
LRA during our exchange (though canny guy he is, he didn’t give much away). What we do
know about LRA is that it’s a dynamic company and always looking to do the next deal, either
with incoming grassroots projects to explore or JV deals to fit the project generator model.
The Copper Basket
After forty weeks of 2012 The Copper Basket is showing a 39.42% loss to level stakes.
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company ticker price 1/1/12 Shares out Market Cap current pps gain/loss%
1 Copper Fox CUU.v 1.15 398.97 482.75 1.21 5.2%
2 Lumina Copper LCC.v 13.19 40.7 389.50 9.57 -27.4%
3 Augusta Res AZC.to 3.17 144.1 387.63 2.69 -15.1%
4 Nevada Copper NCU.to 5.18 72.8 254.80 3.50 -32.4%
5 Western Copper WRN.to 1.58 93.28 66.23 0.71 -55.1%
6 Regulus Res REG.v 1.24 99.88 49.94 0.50 -59.7%
7 Candente Copper DNT.to 0.97 121.67 48.67 0.40 -58.8%
8 Yellowhead Min. YMI.to 0.80 52.82 36.97 0.70 -12.5%
9 Baja Mining BAJ.to 0.80 338.5 28.77 0.085 -89.4%
10 Duran Ventures DRV.v 0.18 184.72 27.71 0.15 -16.7%
11 Catalyst Copper CCY.v 0.08 274.48 19.21 0.07 -12.5%
12 Excelsior Min MIN.v 0.63 56.12 15.15 0.27 -57.1%
13 AQM Copper AQM.v 0.39 105.6 14.78 0.14 -64.1%
14 Strait Gold SRD.v 0.150 56.86 6.82 0.12 -20.0%
15 Crazy Horse CZH.v 0.35 64.48 5.48 0.085 -75.7%
Portfolio avg -39.42%
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.
Another losing week for our basket average, down 0.95% overall from IKN178. As for the
individuals, we saw seven losers (LCC.v, CUU.v,
AZC.to, BAJ.to, DNT.to, REG.v, MIN.v), two
unchanged (AQM.v, CCY.v) and six weekly
winners (NCU.to, WRN.to, YMI.to, DRV.v, CZH.v,
SRD.v). There were no outsized moves to the
upside, but to the downside Candente Copper
(DNT.to down 20.0%), Excelsior Mining (MIN.v
down 12.9%), Regulus Resources (REG.v down
10.7%) and Baja Mining (BAJ.to down 10.5%) all
stand out.
All in all, another crappy week for the copper
exploration sector and it’s starting to look like all
the love from the QE3 announcement has worn
thin very quickly for the industrial metals end of
the small juniors. The general lack of love or
pzazz didn’t come from weakness in the
underlying metal trading either, as copper was
very range-bound in the $3.75/lb to $3.80/lb
bracket all week.
And as this chart below shows (the one we stick on the blog every Saturday to show how gold,
silver, PM miners, PM juniors and copper miners got on in comparison during the week), the
industrial metals producers (red line) were in fact slight winners compared to the others over
the last five days (though admittedly it was a bit of a bunched finish).
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As for the regular look at the underlying inventory fundamentals (for the record I get them from
here (8) every weekend so no need to wait til Sunday evening if you’re anxious to know the
copper fundies numbers...all you need to do is know a bit of Spanish ☺) there was a significant
move to report from last week, the first for quite a while in fact. Overall worldwide copper
inventories moved up just 2,705mt (0.6%) to 430,438mt, nearly all accounted for by a 1.5%
move in LME stocks. China’s Shanghai future exchange was closed all week for a national
holiday. So stocks numbers aren’t very eyecatching but LME cancelled warrants are, moving up
to 54,750mt or 24.6% of total inventories. This is a significant move and one that suggests
end-user demand is picking up and although one swallow doesn’t make a summer, if we see
this type of number this time next week it will be much harder to wave it away as a one-off. As
we’ve noted before, the rises and falls of the LME cancelled warrants number have closely
reflected rises and falls in spot copper prices.
Now for updates on some basket companies this week:
Candente Copper (DNT.to): The political risk story of the week last week was the vote that
happened in the locality around DNT’s Cañariaco copper project in Northern Peru, in which
locals voted an overwhelming 95% against the project, as announced on the blog (9) that day.
Also that day came the first DNT NR (10) which quite frankly did more harm than good to the
company. The tone of “we don’t care about this illegal poll, so get out of our way” is just asking
for trouble so unsurprisingly the market didn’t give DNT the rebound it thought, nay thinks, it
deserves. Then on Tuesday DNT tried again (11), this time adding more details and sticking to
its guns, but at least finding time to at least pretend it’s going to listen to the local grievances.
A little better, but there are still things to point to such as DNT saying that only 650 people
voted, while all reports of the police supervised vote saying that nearly 2,000 votes were cast.
The other, more potentially troublesome aspect is that even though the local community
leaders said beforehand that the vote (that was originally planned for early September and then
delayed until last weekend) was originally agreed upon with the approval of Peru’s mining
ministry (MEM) , when it came to the crunch MEM withdrew its support for any outcome
(probably because it became clear to them that the vote was going to go against the project
long before last weekend). This left locals feeling somewhat defrauded so they went ahead with
the vote anyway, even though it was easy to say “unofficial, doesn’t count” afterwards and they
probably knew that. The local community leaders in the video we stuck on the blog last week
(12) didn’t come across as particularly aggressive or unreasonable; they made their case (a full
month ago) in a calm and reasonable manner, but did say clearly that if the vote weren’t
recognized and the (they say fraudulent) previous vote that still carries official approval is the
only one recognized then the mining ministry and the government were basically asking for
trouble and social conflict to happen. When this attitude is set against that of DNT which in its
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second NR on Tuesday repeated its intention to drill as soon as permits had been expedited
from the ministry...
“The Company plans to mobilize for drilling as soon as the remaining formal documentation is received
from the Ministry.”
...there’s enough to suggest a cauldron of problems brewing here. And by the way, that video
and other reports round it make it clear that the main opposition to the Cañariaco project is
around water, because the mine will apparently sit on the head of the water supply for the
whole Cañaris (or Kañaris, as it’s sometimes spelled) valley which makes locals feel rather
nervous about supply (quality and quantity) to their agricultural and arable lands if the mine
gets built. It’s also worth noting that the previous consulting meeting happened in early July
and its findings were notarized (i.e. agreement signed in presence of a lawyer) on July 23rd, but
on the same day DNT revealed its plans to divert the two rivers that flow down the valley in the
event of the mine being built, which must have really annoyed the locals. We refer readers back
to the introduction section of today.
What we have is a conflict between the law and justice, where locals feel as though the law of
the land is being imposed and pressured upon them and they’re now unafraid to fight back for
what they consider to be justice. Having the law on its side may have been enough a few years
ago, but DNT is now in a tricky situation in Peru version 2012. DNT is being aloof, arrogant and
thinks that with the law on its side it can do whatever it wants to the Cañaris locals, which is a
recipe for disaster in these remote and difficult to police areas and has no place in the
community relations sphere of any mining company in the 21st century, let alone one in an
ecologically sensitive area of Peru. Without the public on its side it’s going nowhere at this
project and until it changes its tune, nowhere is the final destination of the current drilling
campaign and any aspirations DNT might have about selling its project to the highest bidder.
Nevada Copper (NCU.to): Large shareholder in NCU and other base metals companies, Pala
Investments Holdings Limited (PIHL), the Zug Switzerland based investment vehicle of Russian
billionaire Vladimir Iorich that specializes in base metals plays, made another move in its slightly
mysterious chess game last week. NCU announced (13) that it was buying 46m shares of
Mercator Minerals (ML.to) from its large inside holder, PIHL. Once the deal is done, PIHL will
own 34.7m shares of NCU.to, representing 43.1% of shares outstanding. In turn, NCU will own
17.8% of ML.to. So who gets what on this?
• NCU gets to emit paper and grab a large chunk of another company for investment
purposes without laying out a cent of money.
• Vladimir Iorich gets to up his stake in NCU and dump nearly all the ML.to he owns
(according to SEDAR, he has 48.662m ML.to shares) onto his now 43.1% owned
company without spending any cash.
• ML.to gets to watch. However, we need to note that ML announced it was running a
48.5m share bought deal on October 1st (14) and this move may well be connected
with the deal, as PIHL may be buying a healthy chunk of that bought deal and laying
off the exposure by handing down a large quantity of ML shares to NCU. This depends
on how many shares PIHL takes up of this bought deal offering of course, which is
unlikely to be all of them because if not, ML wouldn’t have gone through the expense of
running a brokered deal and would have dealt with PIHL directly, saving the commish
As Jan Castro, CEO of Pala, is a director on NCU it’s almost certain that Iorich is calling the
shots on this deal rather than NCU coming to him and making him an offer. This means he
wanted out of his non-performing position in ML and more into NCU that’s recovered much
more sharply in the recent rebound (see chart). So overall I’d say that this news is positive for
NCU but knowing the cards-close-to-chest manner in which Iorich has moved his piece via Pala
since the investment vehicle was set up in 2006, I really couldn’t say how positive or if there
were some ulterior motive to it all. The stock didn’t do much on the news, shifting in position on
Friday closing at $3.50, which means it put in a better week than most copper explorers but
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hardly whizzbang, either. That’s about the way I see it too, mildly positive without getting me
suddenly decided about going back into NCU.
The bottom line is that if you like NCU for Pumpkin Hollow, you still like it for the same reasons
after this deal is done. If not, also status quo. But as ML.to is a stock that’s had seven bells
kicked out of it recently due to production that hasn’t matched guidance and low moly prices
too (now 50c or so, its 52 week high was $2.13, in January 2011 it was a four dollar stock and
pre-Lehman it was a $14 flyer) NCU might just be picking up a real bargain at a time when
paper deals of this type could turn out to be a smart move for the buyer. For more on this
you’re going to have to ask Mr Iorich and try to get his thoughts, though quite frankly I don’t
think he’ll be as forthcoming with opinions as your author.
Western Copper & Gold (WRN.to): To cover this potential rebound play a third week, I’m
surprised that news (15) of the successful closure of a small, insider friends’n’family type flow
through private placement on WRN that raised $400,000 was enough to see the share price
pop back up over 70c for the first time in a while, but that’s what happened on Friday as WRN
popped nearly 10% from the 65c available earlier last week, albeit on low volumes.
In fact, it’s the low volume trading that’s returned to WRN which catches my eye the most here,
as we’d been waiting a fortnight for the liquidating seller (who was taking any old price in order
to bail, it seems) to finish their exit. Now with calmer trading waters, this is one for a potential
shorter-term trade and if I can get a few sub-70c next week I will probably partake myself too,
though it’s not a trade that will make the official ‘Stocks to Follow’ coverage.
Augusta Resources (AZC.to): On Friday AZC announced (16) that it had closed its new
expanded its loan agreement with metals traders Red Kite (RK). What was a $40m loan facility
from RK is now an $83m facility, with interest payable at LIBOR +4.5% and maturity of July
21st 2014, which provides AZC with the liquidity it needs to move forward on Rosemont and do
what it needs to do while the authorities hum and hah over whether to award the company its
permits. That decision has been much delayed over the years due to anti-mining protests in the
area but (according to the company) is now due at the end of this year.
Meanwhile, RK keeps picking up bonus warrants of AZC every time it extends the original loan
put in place back in 2009 (this is the third extension, if memory serves). Those who look to
Golden Predator’s (GPD.to) recent loan deal with RK in wholly positive terms may want to
reflect that there may be a bit of stealth dilution in the cards further down the line.
Lumina Copper (LCC.v): During the last week I was reminded by the fine folks at Scotia that
according to LCC’s corporate plan and presentation dated August 2012, the plan is to sell Taca
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Taca to a major by the end of this year. If you ask me, that’s not going to happen. So if you’re
long this stock, don’t ask me.
Regional politics
Venezuela elections
By the time you read this, we’ll probably have the first set of exit polls or even the normally
accurate quick count result from the presidential election in Venezuela. If there’s a surprise
result and Capriles gets the nod (and let’s repeat one more time for the record, it would be
considered a surprise but not a massive, jaw-dropping surprise) you can expect a Flash update
before the bell Monday morning with trading suggestions. If Chávez wins the day, Venezuela
will certainly remain a no-go zone for junior mining and mining investments.
Bolivia: Looking to set an incredibly bad precedent for junior mining companies
Friday’s news out of Bolivia was more bad news for junior explorers still working there, if they
needed any more that is. According to reports (17) Bolivia’s Mining Minister, Mario Virreira,
announced that the State would look to prosecute South American Silver (SAC.to), the once
owners of the Mallku Khota project (see IKNs passim) for the supposed crimes of “economic
damage to the State” and “criminal enrichment” (in Spanish enriquecimiento ilícito, a typical
accusation that best translates along the lines of ‘ill gotten gains’). So far so soapbox, but then
the reasons behind these accusations, as put forward by the Mining Minister of the country no
less, make it practically impossible for any publicly listed junior to be an exploreco in Bolivia.
Virreira said that South American Silver (SAC.to), rather than its local subsidiary called
Compañia Minera Mallku Khota, had never filed papers to operate the Mallku Khota mine and
had illegally used the value of the deposit to increase the price of its shares in international
stock markets. In other words, it recognized the local subsidiary that was wholly owned by
SAC.to, but it said that using its second-hand connection to the deposit in order to promote
itself and make its shares more expensive in Canada was illegal, according to the host country.
Or put simply, woe betide you if you start creating value on a foreign exchange via a project
based in Bolivia, because Bolivia will quickly take all that value away from you. This crazy state
of affairs means that any junior exploration company choosing Bolivia as location for activities
should be considered as run by idiots, because anything you invest from abroad will have zero
return to abroad, with that over and above the high financial risk of doing exploration work in
the first place.
I’ve said the same thing for years and I’m saying it again here: Avoid all Bolivia exposure to
your portfolio. No matter how good the rocks, no matter how convincing the management, no
matter what they say to you. A great country to visit and its internal economy is in fairly good
shape these days too but it’s just not for you, dear and kind junior mining investor.
Chile: Water from the South to the North
Along with its apparent energy bottleneck that’s getting plenty of news airtime recently, the key
problem Chile has to solve regarding its North area mining projects is that of water, because
the high regions of northern Chile are very dry place and as the most basic of mining equations
rightly says, no water = no mine. To this end engineers in Chile have had their thinking caps on
for quite a while, with solutions to solve the lack of water supply including de-salination plants
(expensive, but possible) importing water from neighbouring countries (happening already but
may become politically charged and unreliable, as witnessed this week (18) when Chile made
an official governmental inquiry into an apparently partially blocked river in Bolivia that then
runs into Chile and supplies the local region) deeper wells or techniques using seawater in
processing where possible (eg Capstone at Santo Domingo).
Another mooted solution to the water supply problem in Chile is to build a water supply system
from the South of the country where water is normally abundant to the North where it’s needed
to create mining and/or agricultural wealth. This will be the subject matter at a presentation
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given by associations Vía Marina and Fundación Chile tomorrow evening, Monday October 8th,
when they will present the preliminary finding of the Aquatacama project, that seeks to do just
that. What’s interesting is that the Minister of Public Works (and most popular minister in the
current Piñera administration) Laruence Golborne is due to attend the presentation (one of
those evening dinner presentation to a crowd of invited suits&frocks and soundbite gathering
bashes) so it’s unlikely to reveal some sort of preliminary failure and could catch a few
headlines in Chile as next week progresses.
Mexico, Chiapas and Caballo Blanco
Last week saw the visit of Mexican environmental and National Nature Reserve authorities to
the Southern (and largely anti–mining) State of Chiapas and two things came of the event.
Firstly, authorities assured locals that the concessions granted to mining companies either in or
close to the Sierra Madre region, a ecologically sensitive area of biodiversity that’s also the
source to many rivers used for drinking water in Chiapas towns and cities. Particular emphasis
was placed on companies that had secured concessions in or close the ‘El Triunfo’ nature
reserve and action is apparently going to be taken to cancel outright those concessions (though
nobody seems to know to whom they really belong).
The other interesting occurrence may turn out as anecdotal in the end, but it happened and it’s
worth passing it on. According to reports (19) the head of Mexico’s environmental body
Semarnat (the people that allow or deny the environmental permits in Mexico), one Juan Rafael
Elvira Quesada, was comparing the situation in Chiapas to the recent permitting events at the
Caballo Blanco property of Goldgroup Mining (GGA.to), the project we’ve covered extensively in
previous months and the same that decided to withdraw its permitting application in mid-
September and wait for the new government of Enrique Peña Nieto before trying again. Juan
Rafael Elvira Quesada said while in Chiapas that “...the Caballo Blanco project had been
cancelled due to lack of viability (feasibility)...” and that (and we quote “...if the same
circumstances (as Caballo Blanco) had occurred in Chiapas, the project would also have been
cancelled.” As mentioned, this may turn out to be merely anecdotal, but it does strongly
suggest that Semarnat had already decided to turn down the Caballo Blanco EIA application
when it was due to return a decision on September 17th, but GGA made the legalese move of
withdrawing its application on September 14th before that ruling could be made public, probably
because the company got wind of what was about to happen to its permit application.
Mexico: Energy prices hurting mining sector
According to the Mexican Chamber of Mining (Camimex) last week (20), the high electricity
price tariffs being paid by mining companies is cutting into the country’s mining competitivity
and Mexico risks losing investment to other countries. In its 2012 annual report just published,
it said:
“Mining is an energy-intensive activity, to the point that it is responsible for up to 30% of its
costs of production.” “Companies affiliated to Camimex spent 11.336 billion pesos (U$) on
energy in 2010, with electrical energy representing 53% of the total.”
The report goes on to cite that the lack of competition in Mexico’s energy sector has forced the
large mining groups into developing their own energy generation sources, with Peñoles, Grupo
México and Minera Autlán given as examples. According to Camimex, the energy sector
urgently needs new national policies that favour sector growth, else the country will see FDI
moving to competitor countries that can offer lower energy costs.
Market Watching
RBC calling buy on gold equities
A good report to share with you from RBC, that updates its gold mining company coverage and
is generally bullish on the sector. There are plenty of target price upgrades too, with most of
them due to RBC improving its price deck for the underlying metals of gold and silver. Find the
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report at link (21) below. The report tends to cover the larger cap gold mining companies, but
does have one in common with The IKN Weekly, namely Minera IRL (IRL.to) (MIRL.L) and that
target price is raised from $1.25 to $1.50 in the report. For those of you who don’t want to
wade through the PDF, here’s the quick overview section on IRL, as per RBC:
As part of our commodity price update, we are rolling forward our estimates to
2013E NAV from 2012E NAV. Our target price of C$1.50 reflects the fair value
generated using a 0.7x 2013E NAV multiple for Corihuarmi, Ollachea, and
Don Nicolas. A per/oz valuation is used for Concurayoc, Escondido, and
Chispas. These multiples are in line with Emerging Producer peers given the
low levels of current production.
Liberty Silver (LBSV.ob) (LSL.to): A scam and a screaming short (if it ever trades
over a buck again)
A number of weeks ago (to be quite honest, I can’t remember exactly when) I did a quick pass
check of a TSX listed company called Liberty Silver (LSL.to) (LBSV) (LBSV.ob) on the suggestion
of an IKN reader, but at that time had made it an easy pass because of the low-grade marginal
property it was optioning into. I didn’t look much at the people or structure behind LSL at the
time as it was one of those companies I tend to filter out quickly as “not reaching first base”,
place in the mental discard pile, simply avoid from that point and move on to other potentials.
It’s a pity I didn’t look more closely at LSL at the time because if I’d done so I would have seen
a screaming short candidate.
Cut to last week, and on Wednesday I was pointed in the direction of LSL by a contact,
someone who knows both the property and had checked behind the company curtain, and told
me in no uncertain terms that the company was a scam. I saw the recent share price run-up
(here’s the chart I downloaded from Wednesday)...
...downloaded the SEDAR files, checked through them and suddenly LSL was past first base and
onto second, but this time as a potential short. And when I saw the name of the person who
was running the show from backstage, a certain infamous Bobby Genovese, it went straight to
home run. With the price running above $1.50 on Thursday on strong volume and no real news
and listing in the USA on the OTCBB (that does most of the volume) and on the TSX as LSL.to
(note, not a Venture exchange listing) this had the makings of a great shortable story to put
before you today and one that many of you (I admit not all, because shorting Canadian stocks
isn’t child’s play and much easier if you’re an accredited investor or inside an insto) would be
able to play to the downside.
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Then on Friday morning, my big idea was shattered by this (22), an SEC news release halting
trading in the stock. This halt was well reported in the press, for example this (23) the link to a
Stockwatch report on LSL last Friday evening written by the always good Mike Caswell, which
also adds background to this scam and is well worth reading. So anyway, pre-bell Friday the
SEC put a ten day trading halt on the otcbb listing which was emulated very quickly by IIROC in
Canada (not before 138k shares had traded through at a big drop price of 97c, but to be honest
IIROC did pretty well under the circumstances to block trading in LSL.to as quickly as it did and
should be commended). We can see the effect the halt had on the stock via the few trades that
got through before the Canadian listing was halted, in this five day chart:
As the LSL NR later that day (24) (after the bell in fact) confirmed the halt and added some
flavour to the reasons behind it
According to the Order, the SEC states that, "It appears to the SEC that there is a lack of current and
accurate information concerning the securities of Liberty Silver because of questions concerning publicly
available information about Liberty Silver, the control of its stock, its market price, and trading in the
stock"
We can translate that for you. It means that the SEC believes there is at least one large holder
of LSL stock (and probably more than one) that has not done the right thing and filed their total
holding in the stock to the authorities. These are known as “undisclosed free trading shares”
and the problem is that the person who owns them can suddenly decide to dump some of all of
that large holding on the market without anyone knowing who the seller might be. And if, as is
almost certainly the case in this story, the large holder is an insider at the company, the sales
can easily be made at the most advantageous moment for the seller. Or put in simple terms,
the cloak of anonymity makes the “dump” part of “pump and dump” a whole lot easier and
probably much more profitable. It’s also illegal, which is why the SEC has halted the stock to
give time for investigations.
About the people behind Liberty Silver
Before we jump in to this section, I’d like to make clear that some of the information that
follows comes from an as-yet unpublished report that was sent out by persons who wish to
remain anonymous (for obvious reasons) to myself and to a mailing list that includes industry
professionals and journalists who have shown interest in this scam, in LSL the company, in the
history and track record of Bobby Genovese and in market scams in general. They are
concerned investment professionals who want real reform and better regulatory oversight of
micro and small cap issuers and have assured me that they are not short (or long for that
matter, no position at all) Liberty Silver. I also know the ID of at least one of the people who
authored the report (again, will remain anonymous) and will personally vouch for that person’s
trustworthiness, absolute integrity and track record of hunting down market scumbags. The
report is excellent and goes deeply into the background of the unwholesome people behind this
1

scam, highlighting the many other examples of otcbb pump and dump scams they’ve been
associated with over the years, going into detail as to how LSL has been set up and also
marking your cards on two other companies currently being set up as pump and dumps scams
by Genovese and his crew.
What follows is a quick rundown of datapoints on the corporate structure and people behind
LSL, unearthed by your author in the period Wednesday to Friday as well as a few of the many
datapoints revealed by the report. It’s not as long as it was going to be if the SEC hadn’t halted
the stock and scuppered the potential short play, but it should give you more than enough idea.
The company has around 81m shares outstanding. Around 65m of those shares were issued at
a fraction of a penny and are now held in offshore accounts (that’s reliable off-record).
Most of those 65m very cheap shares are held by Robert Donald Bruce Genovese, known to
friends and foes alike as Bobby Genovese or sometimes simply “Bobby G”. We’ll call him
‘Genovese’ from here on because I have no desire ever to be on first name terms with this
scumbag. Genovese also bought a fair whack of LSL shares over the OTC market in the period
December 2011 to January 2012 at prices at or around one dollar (25) at the same time as a
placement that raised $4.6m (the qualifying placement for the company’s TSX listing) was
running on the stock, units priced at 50c. From these transactions, we know that he controls at
least 10% of the company but that’s almost certainly the tip of the iceberg and he holds a lot
more of these shares. Based on information from reliable sources, Genovese holds at least 48m
shares of LSL that come from the original transactions and forward splits that set up the
company structure we see today. However, it’s necessary to state that this 48m holding is not
officially known and in fact the lack of disclosure on Genovese’s part is likely one of the main
reasons the SEC halted the stock pre-bell Friday morning, so in the course of the next few days
I’d expect clarification on this
matter.
Genovese is a penny stock pump
and dump scam runner and has
made millions of dollars for his own
back pocket by unscrupulously
ripping off the general public over
the years. That’s not an opinion
that’s a fact, as anyone who
watched the action and events
around “Clearly Canadian”, a
mineral water company that shot
higher and dived lower in the
period 2005 to 2008 will testify.
According to SEDI insider
transaction records Genovese had
access to millions upon millions of
very cheap shares and proceeded
to dump those millions of shares
on the general public while in
charge of the company at the time.
His aggressive selling continued up
to the point when the share price,
that tended to fluctuate between
$2 and $4.50 (the average
between $2.50 and $3), collapsed
back into the pennies region. He
used highly aggressive pumping
techniques, including paying
pumpers to do his dirty work and
sucker in as many retail
1

shareholders as possible, then when the stock was high enough he cashed in relentlessly.
‘Clearly Canadian’ is not his only pump and dump scam either, not by a long chalk. The last 20
years is littered with the remains of companies he has promoted, pumped, dumped and cashed
in with, all to the retail shareholders’ chagrin. The table above is from the mentioned report (I
asked for and was denied permission from the authors to pass on the whole PDF, but was
granted permission to sample from it, including the sampling of this table). For further reading I
also point you towards to this report (26) by Carol Remond of Dow Jones Newswires dated
November 2009 that goes into the world of Genovese and some of the scams that he has
successfully led. Genovese is now by all accounts a very wealthy man, but he’s made his money
the parasite’s way.
Moving back to LSL, in August and September 2012 Genovese cajoled or hired for cash a bevy
of newsletter writers into promo’ing his stock. Top of the list comes James West of The Midas
Letter, one of the most two-faced and unscrupulous of all mining newsletter writers (and my
stars, there’s competition for that mantle) to pump the company to his subscribers. Along with
the others brought on board for the same purposes West was paid handsomely to write up LSL
in glowing terms and got a lot of people on board, pushing the share price higher on no
apparent news. Interestingly, since the SEC halted LSL James West has decided that he doesn’t
want to be associated with the name any more and as all good cockroaches do, has crawled
under a rock and pulled his glowing (and extremely stupid) note on LSL from his website.
However it can still be found at this address (27) and we also recommend that you check out
Iwnattos’s review of the James West piece here (28) as that blogger does an entertaining job of
pulling James West’s infantile promotion arguments into little pieces. And before we leave this
paragraph, it’s worth noting that the two-faced West may get his own comeuppance on this
play because the only disclosure he makes on payment from LSL is “I am a shareholder”. This is
a direct violation of SEC rule 10b5, because he needs to state exactly, precisely how many
shares and how he came to own them. If, as is almost certainly the case, he was given the
shares in exchange for his sordid pumping of the stock and also received a cash payment, the
man could be in trouble with the U.S authorities. Maybe that’s why he was so keen on pulling
his note from his own website, but as noted above other copies already exist.
The property
A pump and dump has to be centred on something of value (or at least something that can be
claimed as having value) and in this case, LSL’s fortunes have been tied to the Trinity Silver
property in Nevada, USA. Here’s another brief rundown of the basic points of Trinity.
• The Trinity property has been optioned from Renaissance Gold (REN.to). The deal cost
LSL $25,000 up front, has a few cash payments along the way and the company now
has four years in which to spend $5m on its development in order to earn 70% rights.
• The heart of the Trinity property isn’t much more than a mined out deposit. It was
mined by the Borax Company of USA in the period 1987 to 1989, when that operation
mined out the best rock in the centre of the deposit grading around 6oz/t silver (around
185 g/t) in oxide host. When the best was mined, Borax decided that the silver price at
the time for what was left was too low and they closed down the operation.
• That’s still true today. Borax and others put in a lot of drill holes in and around the
Trinity property, trying to find more of the good grading stuff, but nothing doing.
What’s left there today is a non-43101 compliant historical resource that’s understood
by the 2011 technical report to grade at an average of 0.7 ounces Ag per tonne.
There’s plenty of rock there that grades to that average, but the whole resource is
based on the halo of lower grading material that was left behind when Borax had
finished the good material.
• According to optioners REN.to (a serious exploration company), the interest that Trinity
may hold is at depth, with the potential to drill under the low grading oxide halo and
2

into the underlying sulphide to potentially discover a copper style porphyry system that
wasn’t on the agenda of Borax in the 80s or others later. However, Genovese and LSL
have stated that the company can put together a PEA based on the drilling done to
date alone and that it’s not necessary to drill any more. This clearly implies that the
very limited drilling program done by LSL earlier this year, which included just two
twinning holes to check previous assay results from the historical drilling program
instead of the 12 holes that third party technical report compilers Mine Development
Associates (MDA) recommended, is all that LSL thinks it needs to get a PEA and then
move to “fast track production” when added to the historical drilling that shows a lot of
meterage but was done for another purpose, namely to find better, higher grade oxide
with which it could extend mine life.
• Now for an idea of project economics on this low grading oxide halo material. At the
moment, both LSL and the third party technical report compilers MDA are using a
conceptual recovery level of 75% for the silver held at Trinity. This means that
processing a tonne of rock will earn you perhaps $18, at best in payable metal (based
on 22g Ag grade, 16g recovered, $35/oz Ag price). From this you pay mining,
processing, smelting, G&A, tax and interest on any loan. Look, on paper it might be
possible to process that rock and make a marginal profit, but off the top of my head I
can think of a dozen, nay two dozen other development stage silver projects that offer
far, far better ballpark economics than that and none of them have a market cap
anywhere near $70m, let alone $126m.
• As for the valuation consider one thing, simply for perspective: According to the price at
which LSL closed Thursday ($1.58), it’s $1.4m in cash and 70% of Trinity (assuming it
makes the optioning-in commitment) is worth $126.4m by company market cap.
Meanwhile, its 30% partner REN.to has a market cap of around $30m, but it also has
another 30 exploration targets on its books (26 of those in Nevada/Utah), working
capital of $6.3m (IKN estimated, with June 30 filings showing working cap of $7.36m
and a company with modest underlying burn rate) and top class geols running its show
(it was spun out of AuEx Ventures and is headed by Ron Parratt, known in the trade as
world class especially on Nevada).
People, this is nuts and it’s what put me off the company in the first place, back when I quickly
filtered it, decided it didn’t get to first base and then discarded it without looking “behind the
curtain”. Even if it weren’t being controlled by a proven pump and dump scam artist in Bobby
Genovese, the most cursory glance at its only asset (barring an IKN estimated $1.4m in working
capital that may have already depleted further) makes the company very, but very easy to
discard.
The Sennen Affair
Another moment along the way in LSL version 2012 was its unsuccessful offer to buy out
Sennen Resources (SN.v), a tiny exploreco that’s been quiet for a long time but does have one
significant thing in its favour; a cash treasury or $13.5m that it’s been protecting through this
rough period for juniors (Sidebar: SN.v currently has a market cap of $8.25m, so on paper at
least there’s value in this stock’s share price at the moment). The offer was an all-paper deal in
which LSL offered 0.28 of its shares for every share of SN.v. According to LSL this placed a
47.3% premium on SN.v’s share price and was equivalent to them running a private placement
at 71c.
It goes without saying that SN and its board and management strongly disagreed. The merger
was clearly a move to get its hands on the SN.v treasury by paying with dubious paper and
after running its own DD, Sennen management were scornful of that paper and the assets that
backed it up. In a series of some of the most entertaining defence NRs to a hostile takeover
I’ve seen in years, SN released NR such as (29) on August 20th that included a mountain of
pearls like this one...
2

Sennen's management and directors are totally focused on the resource
sector, unlike the CEO of Liberty, who is a managing partner of a fund
management company and sits on nine company boards, some of which are in
the media and entertainment sector and responsible for such resource and
energy related blockbusters as "Bingo Night in Canada", "Hooking up with
Mariko" and "Ladies Night Out".
...along with plenty of technical and financial reasons to laugh the offer out the room and then
concluded its argument in these terms.
Stated Ian Rozier, President and CEO of Sennen, "Liberty's Offer is an insult to the
intelligence of Sennen Shareholders who understand that this is a clear case of the
management and promoters of an OTC shell company with very little money and
questionable assets trying to back their ludicrously overvalued paper into an
established company with tangible assets-in this case Sennen and its treasury.
Wonderful stuff. In early September the hostile bid collapsed, with apparently very few or even
none of the shareholders having decided to accept the LSL bid.
Conclusion
We could continue on this case for pages upon pages, but it’s time to draw a line under things.
Liberty Silver (US OTC: LBSV) (TSX:LSL) is a scam stock run by a long-time scam runner who
has made multi-millions of dollars over the years by taking the money of the innocent retail
investor and putting it straight into his own back pocket. The plan today was to have pointed
your way to an easy shorting opportunity on the TSX (and to be quite honest, even after
dedicating plenty of time to this case this week and looking into the qualifying transaction back
in late December, I’m still not sure how Liberty Silver managed to get a ticker straight on the
TSX without having to go through the Venture exchange first; that’s one that raises serious
questions about the Canadian regulators, I’m afraid), but the SEC slammed the gate shut on
Friday morning and now things look very grim indeed for the company and anyone left holding
a bag after having bought on the promo pump led by the scoundrel James West and aided and
abetted by others who made buy calls on this stock.
In the end, I’m glad, very glad, that the SEC has acted quickly because a quick cauterizing of
this cancerous company will do more good than an easy buck on a short trade. We applaud the
SEC for its prompt action and therefore offer up LSL to you and a prime example of what
happens when you do not do your own DD and rely on the word of others when investing in
the junior mining world.
Conclusion
IKN179 is done, we close with bullet points:
• It turned out to be a different, short-themed edition this week. Primero (PPP) (P.to)
looks overbought on its Friday news and as it’s a fairly easy one to get a lend on, what
with its chunky price and US listing as well as TSX, it looks set up for a near-term ride
back down to a place more becoming of its true fundamentals.
• Meanwhile, a lot of the body of work this week has turned out to be sadly inactionable
for the moment, unless by some wild misjudgement Canada decides to lift the halt on
Liberty Silver (LSL.to) (LBSV.ob) stock while the US otcbb halt is in place. That will run
until October 18th, but even after that there will be much tighter controls on its trading.
People be clear; this one is going down and just make sure you’re not a victim first, but
if the opportunity does arise to lay a short, do so with all the confidence in the world.
This stock is near worthless.
2

• Western Copper (WRN.to) continues to interest as a potential flippy-type trade play on
a rebound. It’s not my favourite copper play out there by any means, but neither is it
worthless and that big seller seems to have done its load now. This type of rebound
shuffle has its risk and the way to go is very-near-term or near-term. Be nimble.
• Candente Copper has done and continues to do a bad job with its community relations
and I repeat, one more time, this is not an optional extra subject in today’s junior
mining world. It isn’t something that’s subordinate to a great property, top geology or
an all-star cast at management level. Being on good terms with the locals at your
project is every bit as important as the other ingredients needed for a successful
exploration company and on this score (at least) DNT.to has failed. With law on its side
or not, DNT is a clear and easy avoid until improvement happens.
• Next week come office reports and I’m particularly interested in what IRL might have to
say for itself. Meanwhile, all eyes on Venezuela tonight.
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
Footnotes, Appendices, references, disclaimer
(1) http://incakolanews.blogspot.com/2012/10/chart-of-day-is_4.html
(2) http://finance.yahoo.com/news/primero-announces-positive-advance-tax-110000496.html
(3) http://www.bloomberg.com/news/2012-10-05/primero-mining-jumps-28-after-reporting-positive-tax-
ruling.html?cmpid=yhoo
(4) http://finance.yahoo.com/news/oceanagold-provides-didipio-project-071800270.html
(5) http://finance.yahoo.com/news/vena-resources-consolidates-shares-210000634.html
(6) http://finance.yahoo.com/news/lupaka-gold-acquires-andean-american-120000066.html
(7) http://www.kereport.com/2012/10/02/eric-edwards-president-ceo-lupaka-gold-elaborates-yesterdays-press-release-
regard-purchase-andean-american/
(8) http://www.aminera.com/
(9) http://incakolanews.blogspot.com/2012/10/if-youre-wondering-why-candente-dntto.html
(10) http://finance.yahoo.com/news/candente-copper-provides-recent-community-185833900.html
(11) http://finance.yahoo.com/news/candente-copper-provides-clarifications-recent-140903677.html
(12) http://incakolanews.blogspot.com/2012/10/candente-dntto-interesting-news-report.html
2

(13) http://www.marketwire.com/press-release/nevada-copper-to-purchase-178-of-mercator-minerals-tsx-ncu-
1709659.htm
(14) http://www.mercatorminerals.com/s/NewsReleases.asp?ReportID=550589&_Type=News-
Releases&_Title=Mercator-Minerals-Announces-Mineral-Park-Credit-Facility-Restructuring-with...
(15) http://finance.yahoo.com/news/western-copper-gold-closes-private-132500410.html
(16) http://www.newswire.ca/en/story/1048529/augusta-closes-increased-red-kite-loan-facility
(17) http://www.latercera.com/noticia/negocios/2012/10/655-486853-9-gobierno-boliviano-denunciara-a-minera-
canadiense-por-supuesto-dano-economico.shtml
(18) http://diario.latercera.com/2012/10/06/01/contenido/pais/31-119914-9-chile-pide-informacion-a-bolivia-por-anuncio-
de-corte-parcial-de-rio-en-disputa.shtml
(19) http://www.oem.com.mx/elsoldemexico/notas/n2719500.htm
(20) http://www.portalminero.com/display/NOT/2012/10/03/Altas+tarifas+de+electricidad+frenan+al+sector+minero
(21) https://rbcnew.bluematrix.com/sellside/EmailDocViewer?encrypt=cc38e061-476d-439c-9a6b-
3f0c37d1027c&mime=pdf&co=rbcnew&id=trish.kent@irl.com.pe&source=mail
(22) http://sec.gov/litigation/suspensions/2012/34-67989.pdf
(23) http://www.stockwatch.com/News/Item.aspx?bid=Z-U:*SEC-2002164&symbol=*SEC&news_region=U
(24) http://finance.yahoo.com/news/liberty-silver-reviews-sec-order-233357940.html
(25) http://www.investorpoint.com/stock/LBSV-
Liberty%20Silver%20Corp/insider/Genovese,%20Robert%20Donald%20Bruce/All%20Types/_9
(26) http://investorshub.advfn.com/boards/read_msg.aspx?message_id=43405316
(27) http://beforeitsnews.com/gold-and-precious-metals/2012/09/liberty-silver-corp-high-beta-to-silver-and-fast-track-to-
production-2451486.html
(28) http://myownmarketnarrative.blogspot.com/2012/10/how-many-disabling-head-injuries-can.html
(29) http://finance.yahoo.com/news/sennen-restates-reasons-rejection-libertys-170100344.html
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
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
2

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
Important Disclosure
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
security or as an endorsement of any product or service. All opinions and estimates included in this report are subject to
change without notice. It is prohibited to copy or redistribute this report to any type of third party without the express
permission of the author.
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