IKN #188Premium

The IKN Weekly
Week 188, December 9th 2012
Contents
This Week: Mailbag, Fed watch.
Fundamental Analysis: Part two of coverage on B2Gold (BTO.to)
Stocks to Follow: Overview, Galway (GWY.v), Minera IRL (IRL.to) (MIRL.L), B2Gold (BTO.to),
Lachlan Star (LSA.to) (LSA.ax), Rio Alto (RIO.to), AQM Copper (AQM.v), Vena Resources
(VEM.to), Plata Latina (PLA.v), Aurcana Corp (AUN.v), OceanaGold (OGC.to) (OGC.ax).
Copper Basket: Overview, Western Copper & Gold (WRN.to), Lumina Copper (LCC.v),
Yellowhead Mining (YMI.to).
Regional Politics: Overview, Uruguay makes mining-friendly noises, Peru: Candente Copper
(DNT.to) at Cañariaco under pressure, Chile: Power station approval, Colombia is aware that its
mining development is lagging, Guatemala: Canada’s governor visits, Peru: Mister Santos goes
to Lima.
Market Watching: Is Venezuela a junior mining buy on the Chávez cancer news?, Goldgroup
Mining (GGA.to): A reminder for those who like risky propositions, Lottery ticket ideas: Further
thoughts and reader suggestions.
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
Mailbag
Here’s the main course of a mail received from reader BT:
What I was wondering is 1) Do the producers ALWAYS lead the explorers out of a
nasty correction? 2) Is anything different this go around that would lead a person to
possibly go OVERWEIGHT the explorers? and 3) Is there ever a time when the
explorers get beat down so much that they become such a compelling value (assuming
of course that they have enough funds on hand to survive) that they outperform the
producers?
My answers are 1) no 2) maybe and 3) yes, but that’s no use at all. The real reason that I
featured this segment of mail is that I think the context is wrong, because rather than split
things down the lines of explorers versus producers, it’s got me thinking that a better cleavage
term is quality versus non-quality (memories of Pirsig). My move away from explorers and
towards more producers in the last quarter has been driven by the desire to have more profit-
making companies on display, but in the end it’s really more about having better companies
featured in the Weekly, rather than then tinysmall explorers that I found myself messing around
with far too much. There is still a place for those kinds of company (example Focus Ventures
(FCV.v)) as long as they go about business well and look after things like cash treasury and
share count. However, the move to include names like BTO, OGC is more about being exposed
to better companies and choosing to ride with better teams and proven assets.
Come the revolution, rebound and breakout, there are now a whole bunch of extremely beaten
down names that will benefit from a new interest in the exploration end of the market,
1

especially when those miners that have got through this period with cash treasuries intact start
snapping them up for a song (in fact, that’s already began in a limited way). It won’t need
these utter dogs to move back to previous levels in order to offer the speculative, high risk
players strong percentage wins either, as the featured “lottery tickets” of last week and this
week demonstrate. Take for example Cream Minerals (CMA.v), that at 3c today so if you bought
it, you’d be happy to see it at 10c and have no need to urge it back to 25c in order to make
your wedge.
To better answer the question, BT, I’d say that quality names lead non-quality names out of a
nasty correction. I’d say that I prefer to be overweight quality and under weight dogs until such
time as any recovery truly sets in. I’d say there does come a time when the dogs become
compelling value and i’m seeing some of that already, but it’s virtually impossible to gauge the
exact bottom and once your long these dogs, it can be very frustrating to hold them through
extended quiet periods while other names around yours start springing up. So maybe you’re
warming to the idea of those lottery ticket stocks the same way as I, but eyes wide open at the
same time please.
Fed watch
Next week we have the FOMC meeting, the Wednesday lunchtime announcement and then this
time around it’s the 2:15pm Ben Bernanke press briefing once the headlines have hit. Main
point of this Fed week will be what the Fed does faced with the imminent end of Operation
Twist. The most likely result will be “additional policy accommodation” (I do enjoy lapsing into
Fedspeak on occasion, sounds all important doesn’t it?) and if so, gold should get a minor
boost. Whether that parlays into the PM stocks and miners in general isn’t so clear, but the way
things are going the mining stocks are more likely to react positively to good economy news
rather than good news for gold.
As usual, your author strongly recommends use of Bill McBride’s Calculated Risk blog (1) to
keep up with US macro events.
Fundamental Analysis of Mining Stocks
This week we look at B2Gold (BTO.to)
NOBS report dated December 9th 2012
B2Gold Corp (BTO.to)
NB: Today’s report assumes that the current merger being transacted with CGA Mining is
closed in good order. All asset ownership and company structure has been assumed as
per the post-merger “New BTO”.
2

Company Overview
B2Gold Corp (Canada: BTO.to, US pinksheets BGLPF, Frankfurt 5BG.f) is a producing mining
company operating in Nicaragua, Colombia, Uruguay, Namibia, Costa Rica and The
Philippines. Its flagship assets include the Libertad and Limon mines in Nicaragua, the Masbate
mine in The Philippines as well as several exploration and development stage projects dotted
around the world. Share structure assuming merger is as follows:
Shares out: 645.2m
Options & Warrants: 23.1m
Fully diluted shares: 668.3m
Current share price: $3.48
Market Cap: $2.26Bn
Approx cash per S/O: $0.29
All prices are in Canadian dollars unless stated. Forex U$1=CAD$1
Today’s report
This report follows on from the overview and reasoning behind the recent buy call made on
B2Gold (BTO) and published in IKN187 last week (dated December 2nd 2012). Today we look at
the development of BTO up to the present via its financials, check the details of its proposed
merger with CGA Mining (CGA.to, current owners of the Masbate property) and then run a short
overview on each of its main properties. We also put a price target on the company via a sum-
of-parts valuation.
Financial overview
Via the usual suspects, we catch up on results and development at BTO up to the present, with
a few simple projections for the current 4q12 period included. We note that as from FY13 and
the incorporation of CGA Mining into the structure, ‘New BTO’ will be a different and larger
animal.
BTO.to: Assets Breakdown per qtr
By examining the assets breakdown chart since its 800 (exCGA Mining for 4q12)
incorporation in 2007, the main moments of change 700
at BTO are fairly easy to define. First came the 600
buyout of Central Sun in early 2009 that brought 500
the Nicaragua mine assets (Libertad and Limon) 400
into the mix. Then through 2009 to 2011 those 300
assets were developed, in the case of Libertad
200
investment and its resulting production growth and
100
in the case of Limon normalizing worker relations
0
and getting the mine operating at a steady and
profitable rhythm. The next big growth in assets
came in late 2011 when BTO bought out Auryx
Gold for $117m in paper, with the prize being the
Otjikoto project in Namibia.
What’s also noticeable is the way in which BTO
has kept its cash position and general liquidity in a
good state all through its development process up
to now, and once we factor in the liabilities position
(that saw longer-term liabilities jump a bit when
Auryx was brought on board, but nothing really
bad)...
3
70q3 70q4 80q1 80q2 80q3 80q4 90q1 90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4
source: company filings
srallod
fo
snoillim
fixed
other current
cash&ST
BTO.to: Debt Breakdown per qtr
100 (exCGA Mining for 4q12)
90
80
70
60
50
40
30
20
10
0
70q3 70q4 80q1 80q2 80q3 80q4 90q1 90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4
U$m
LT debt
current debt
source: company filings

...the working capital development at BTO looks like this:
BTO.to: Working Capital per qtr
160
(exCGA Mining for 4q12)
140
120
100
80
60
40
20
0
4
70q3 70q4 80q1 80q2 80q3 80q4 90q1 90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4
source company filings
srallod
fo
snoillim
A balance has been struck by management between the capital investment plans at its
development projects. First Limon and particularly Libertad, then investment programs to
discover and develop the Jabali vein, then programs that developed and explored other projects
such as Cebollati in Uruguay and more rapid development of Gramalote in Colombia. But BTO
is also clearly interested in keeping a cash pile together and since seeing Libertad (in particular)
move to full production and strong profitability has
not lived beyond its means. Yes, it’s been
BTO.to: Shares Out
developing, aggressively exploring and adding asset 450 (exCGA Mining Merger for 4q12)
value, but it’s made sure that the cash used for 400
development comes from operations rather than big 350
chunks from treasury. 300
250
The downside to this rapid expansion plan at BTO is 200
its tendency to print paper in order to fund its deals. 150
100
Back at the end of 2008 BTO had 162.7m shares
50
out and now, four years later, the company has over
0
393m shares out with that total about to skyrocket to
645m with the closure of the CGA deal.
This is the double-edged sword of the rapidly
expanding junior that’s out in the market doing deals. As long as its paper is considered “good”
it will look to print it, use it as cash in order to expand its asset base. The present and potential
shareholder must be aware of the clear corporate strategy and expect further dilution, but as
this price chart fro late 2008 to present indicates, as long as the paper deals done are
considered overall positives, the share price will continue its upwards trajectory.
Moving to those quarterly financial results that have funded the asset growth and given BTO its
reputation as “good paper”, it’s all on show here. We see the Limon Mine revenue in 2009, the
70q3 70q4 80q1 80q2 80q3 80q4 90q1 90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4
source: company filings
serahs
fo
snoillim

gradual coming online of Libertad in 2010 and with the development mature, gold price
fluctuations in the revenues columns but tight control over costs and resulting steady and
predictable operating revenues. We’re expecting them to increase in 4q12 as the capital
development work at both Libertad and Limon improve production and margins (eg BTO has
invested in pre-stripping which will now pay its dividends) while Jabali development costs will
now give way to revenue and more profits.
BTO.to: Quarterly Earnings overview
80
70
60
50
40
30
20
10
0
-10
5
90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 tse21q4
source: company filings
srallod
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snoillim
revenues
COGS
Op. Rev
As for net earnings, apart from the one-time gain BTO
BTO.to: Expenses vs Net Earnings per qtr
got for selling its share of the Russian Kupol asset to
35
Kinross, it’s been steady as she goes for quarters on
30
end.
25
20
Here below is how gold production has developed, 15
alongside the cash costs profile which has been 10
remarkably constant during the recent years when all 5
around companies have faced acceleration of cash 0
costs. BTO’s trick has been to increase ounce -5
production and combat the extra amount of COGS in -10
absolute terms by producing more gold and spreading
that cost over more and more ounces. In 2013 we’ll
likely see some raising in overall cash costs as
Masbate is a more expensive mine to run on a per
ounce basis, but this will be mitigated by the new higher grade run through Libertad from the
Jabali vein (see below).
80q1 80q2 80q3 80q4 90q1 90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4
source: BTO filings (3q10 incl onetime $24.062m gain for Kupol)
srallod
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BTO.to: Quarterly Gold Production (oz)
50000
45000
40000
35000
30000
25000
20000
15000
10000
5000
0
90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 tse21q4
BTO.to: Cash cost per quarter
gold produced (oz) gold sold (oz)
700
600
500
400
300
200
100
0
source: company filings
01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 tse21q4
cash op cost (U$/oz) U$/oz total cash cost (U$/oz)
source: company filings

BTO: Operating Margin per Share 0.14
0.12
0.10
0.08
0.06
0.04
0.02
0.00
-0.02
Perhaps the best charts with which to
consider BTO’s development over the last two or three years are derivative charts such as
these above, which show operating margin per share and equity per share. I like the operating
margin per share chart because with just a couple of exceptions (3q11 and 2q12) the company
has managed to maintain its profitability on a per share basis even as it rapidly expands the
share base. In other words, its profit making ability on a per share basis has kept up with the
speed with which it has added to its asset book by paper printing, this isn’t a company that’s
diluting away cash flow just because it wants to grow rapidly.
The equity per share chart (right) shows this well too, as the rise in share count hasn’t stopped
BTO from adding overall value. Liabilities have been kept under control, its operations have
been nicely profitable (see above) but the growth of its asset book alongside the steady per
share profitability means that the equity/share ratio value has increased strongly and doubling
since mid 2010.
The conclusion from checking out BTO’s financials up to today is that it’s no wonder the
company is held in high regard. Constant production and productivity improvements, plus deals
bringing in assets in exchange for freshly printed shares, have seen the company grow rapidly
without losing shareholder favour by diluting their value away. This virtuous circle means that
BTO is now in the position to do its biggest and most valuable deal, bringing on a 200k oz
producing gold miner with a cash treasury that will allow BTO to build its next mine in Namibia
without needing to further dilute, all at a cost of 0.74 shares for every share bought, which is
again accretive to the overall structure. There are those who frown upon a ballooning share
count, which is often the correct reaction to a company that’s more interested in growth and
director salaries than adding value to all stakeholders. That’s not the situation at BTO.
Assets overview
We now take a closer look at the main assets at BTO, this time assuming the CGA deal goes
through as planned.
La Libertad, Nicaragua (100% ownership): This mine, brought into the BTO fold in 2009 at
the same time as Limón when the company
bought out Central Sun, is currently BTO’s
biggest operation. BTO inherited an inefficient
heap leach operation, invested in milling
equipment and has turned Libertad into a
very profitable mine. The chart here shows
the production increases since 1q10
Libertad’s operations are set to increase
significantly with the advent of mining at the
Jabali vein (see below) that lies just a few Km
from the Libertad mine and mill. The Jabali
mineral will join that already being processed
at Libertad, take up the small amount of slack
6
90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 tse21q4
source: company filings, IKN calcs
erahs
rep
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BTO: Equity/share
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
70q4 80q1 80q2 80q3 80q4 90q1 90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 tse21q4
source: company filings
Libertad gold production per qtr, 2010-2012
35000
30000
25000
20000
15000
10000
5000
0
01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 tse21q4
AuOz
source: company filings, IKN ests for 4q12

left in production capacity, raise average mill head grades and is expected to increase
production by around 1/3rd once Jabali is in full flow.
Jabali, Nicaragua (100% ownership): By some well-placed but off-record accounts, the main
reason BTO outbid rivals and bought Central Sun in the first place was for the exploration
potential around the Libertad mine. But whether true or not, the discovery and development of
the Jabali vein, sitting just a couple of Km from the current Libertad operation, has paid off
handsomely. Jabali is still open to resource growth but already has a 43-101 compliant inferred
resource of of 522,000oz Au at an average grade of 4.58 g/t Au, but the most interesting part is
the main Antenna zone of Jabali which contains 342,000 of those ounces at an average grade
of 6.52 g/t. This is a lot higher than the current Libertad mill head grade of around 1.7 g/t,
therefore we expect significant head grade improvements in 2013 and beyond as the Jabali
material comes online. This, plus a little extra tweaking that should improve throughput
tonnages going forward, explain the production growth upside expected from the Libertad mill in
FY1 and beyond. Our model currently uses a 2.3 g/t head grade for Libertad in 2013, in line with
company guidance.
Limón, Nicaragua (95% ownership): In the same style as above, here’s how the Limon
production schedule has developed over the last three years:
Under its previous ownership Limon was Limón gold production per qtr, 2010-2012
(in)famous for industrial actions, strikes and
14000
poor productivity but since BTO took the helm,
12000
relations between management and workforce
10000
has been generally very smooth, with just one
8000
short stoppage at the beginning of this year
6000
blotting an otherwise exemplary copybook. As
4000
for 2013, we’re expecting a slight increase in
2000
production from Limón, but nothing company-
moving to write home about. Jabalí today is a 0
small and profitable operation that complements
the main production line at Libertad well.
Putting the two current producing mines
together gives us this chart, which shows that
2012 has been a slight improvement on 2011 but
nothing really spectacular compared to the
growth of previous years, however adding the
Jabali production to the mix as of FY13 will see
the Nicaragua end of New-BTO grow once more
next year.
Your author is looking for 198,000 oz gold
production from these two assets combined in
2013, up from the estimated 156,000 oz of 2012
(with just one quarter to go, that guess will be
close enough) and the recorded 144,500 oz Au
of 2011. Note that our estimates for 2013 are slightly higher than the 185,000 oz for 2013
currently guided by the company. This is due to BTO’s clear preference to under-promise and
over-deliver (UPOD), a habit that your author always appreciates from companies under
scrutiny. In this case, a simple running of the figures provided by BTO (grades, recoveries,
throughputs etc) through the spreadsheet shows that the company is cutting itself plenty of
slack on final production totals at the moment.
Masbate, The Philippines, (100% ownership):
Masbate, on the eponymous island in The Philippines, is currently operated by the target of the
BTO takeover currently in process, CGA Mining (CGA.to). As our analysis and valuation
process today assumes the takeover happens on time and in good order (the big decision
meeting is schedules for the end of this month and the final closed deal is most likely for
7
01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 tse21q4
AuOz
source: company filings, IKN ests for 4q12
BTO: Gold prod, Libertad & Limon combined
Koz Au
225
200 Limón
Libertad
175
150
125
100
75
50
25
0
2010 2011 2012est 2013est
source: Company filings, IKN ests for 4q12 and FY13

January 2013), we now simply assume Masbate is part of New BTO. BTO is buying out CGA
using paper, so there’s no hard cash total for the
Masbate was an operating mine for 14 years between 1980 and 1994, was then closed due to
low gold prices and re-opened in 2009 by CGA,
with first gold pour in May 2009. This chart Masbate: Gold production per qtr
Oz Au
gives the significant quarters of production from
55000
Masbate (we start with the July/Sept 2009 50000
period, before then was ramp-up stuff) 45000
40000
35000
BTO expects Masbate to be able to run at an 30000
annualized production of 200,000 oz Au per 25000
20000
year and due to its large size (3m oz reserves
15000
and a further 4.7m oz Au resource on top of 10000
that) the mine life is more than long enough for 5000
0
anyone’s taste.
sep.11 dec.11 mar.12 jun.12 sep.12
source: company filings
As you’d expect from a new and still growing
operation, profits have only just started to flow CGA Masbate: Quarterly financial breakdown
U$m
this year. The cash operating cost of Masbate
70 Sales ($m)
has revolved around $800/oz in the last 60 FCF ($m)
quarters and is therefore relatively higher (and 50 net profit ($m)
higher than the sub-$600/oz costs that BTO 40
runs in its Nicaragua operations), so 30
profitability is currently affected quite sharply 20
10
by gold market prices.
0
-10
But as this next chart shows (bottom right) -20
there’s potential profit being left on the table at
sep.11 dec.11 mar.12 jun.12 sep.12
Masbate, primarily due to its hedging book. source: company filings
Here we see the last five quarters and prices
for the average London PM Fix for each Comparison of realized gold prices
period. These match the received prices for U$/oz Au
gold that BTO has been getting for its own 2000 London Fix BTO realized price CGA revs/production
production, but the Masbate prices 1750
(calculation: divide revenues by production 1500
ounces per quarter) are a long way down from 1250
1000
those other two. Masbate has a hedge position
750
of around 12,500 oz per quarter in 2013 with a
500
delivery price of $912/oz, which could be offset
250
by a collar, may be bought out by the new BTO
0
or may be left in place (it takes around $300/oz
sep.11 dec.11 mar.12 jun.12 sep.12
from average annual revenues, so it’s quite a
source: BTO, CGA, London Fix data
hefty burden to shoulder). BTO may move to
make the operation a lot more by buying out current hedges and not renewing deals, but the
important point here is that production is the key metric at Masbate today, rather than its still
early stage free cash flow. This is a valuable asset that will produce for decades and there’s
plenty BTO can still do to optimize both production and costs.
Otjikoto, Namibia, (92% ownership): This project was the reason BTO paid around U$100m
net to buy Auryx Gold in late 2011. The good news here is that just last week (and after we
called buy on BTO the week before the final major permits needed to take Otjikoto through to
commercial production, slated in 2015. Capex is currently estimated at around $130m (for what
it’s worth, your author’s model uses $150m, no biggie).
Once running, this mine should run for at least 10 years at an average production of 110,000 oz
gold per year, with cash costs estimated at $750/oz over LoM (above company estimates). This
makes these ounces look valuable with just two years before they start to come out the ground,
but one aspect that’s particularly interesting is that thanks to the combined treasury of BTO and
CGA as from the merger, that comes in at an IKN estimated $190m net working capital, the
8

construction costs of Otjikoto are now fully covered by the company with no need for extra
share count dilution. This adds more value to these ounces and more cash per share to the
bottom line come production day one.
Politically, Namibia is a bit of a worry for me personally, because Africa political/social risk isn’t
my forte and I have to rely upon the general market consensus and word of others, but from
what I’ve gathered, particularly from a couple of trusted souls who know the country and the
region up close and personal, it’s apparently one of the best places to do mining business on
the continent (though relative comparisons aren’t necessarily great when the bar is set low). It’s
understood to be a stable and generally biz-friendly environment and one of the things that
clams me most is knowing that a serious operation such as BTO wouldn’t have gone into the
country and bought Auryx without doing its homework carefully first. In the end, any investment
in a junior is a vote of confidence about its management and as the BTO team has proved itself
time and again, I’m willing to go with their call on Namibia without too much worry.
Gramalote, Colombia (49% ownership): This JV with 51% owner and operator AngloGold
Ashanti represent long-term potential growth at BTO. Gramalote has been under development
for some years (in fact it was one of the original assets on the BTO books when the company
was set up in 2008) and is envisaged as a relatively large, open pit, low cost bulk mining
operation. Its current resource is a M+I total of 2.525m oz Au grading 0.81 g/t gold, plus another
1.357m oz inferred grading 0.44 g/t Au, all at a 0.25 g/t cut off. If we concentrate on just the M+I
part of that resource, the grade is strong and the set-up has always looked as though capex and
opex will be low, so on paper the economics are very robust. The AngloGold Ashanti/BTO JV
has never been shy about budgeting resources towards development at Gramalote and
although AngloGold Ashanti’s main Colombia project is the massive La Colosa, the social and
community issues around that project along with political issues arising may mean that
AngloGold Ashanti turns to Gramalote first, prefers to develop this smaller project as a sort of
country pathfinder, then move to develop La Colosa later.
Other projects: BTO has a whole host of other pipeline projects aside from the main five
featured above (or sic if Libertad and Jabali are separate). Here’s a list
• Trebol and Pavon in Nicaragua: These two properties are considered together, both
being in Nicaragua, both gold targets and both recently bought from Radius Gold
(RDU.v). In essence (and with a few details here and there unrelated) BTO earned into
60% ownership of the properties via exploration work, the paid RDU around $20m (in
shares) for the remaining 40%. This gives us reason to value the package at a current
$50m
• Cebollati in Uruguay: BTO has spent $7.5m on development at Cebollati so far,
including a $3.4m budget during 2012. It’s obviously keen on what’s been found there
so far, but it’s a bit too soon to know exactly what the plans are to bring it into
development and make a mine. We’re going to value this on its embedded expenses
only for the time being
• Mocoa in Colombia: Once upon a time BTO spent a lot of its time and money exploring
Mocoa, a Cu/Mo property in Colombia. It’s since been shuffled to the back of its pack,
but about a year ago there was a plan (before the market went sour on base metal
exploreco plays) to spin out Mocoa into a new vehicle B2Metals. That hasn’t come to
pass but there may come a time when BTO can add value to the company via this
property which has a non-43101 compliant historic resource of around 2.5Bn lbs copper
and 400m lbs moly.
• Calibre JV in Nicaragua: The Calibre JV is based around the Primavera project in
Nicaragua, owned by Calibre Mining CXB.v) and being optioned into by BTO. So far
BTO has spent over $5.3m on its development (including $4m this year) and has also
funded its junior partner by buying 10.6% of its shares for a cost of $5m. It’s safe to
assume BTO likes what it sees so far at Primavera, else it would keep scaling into the
project and funding further work, but it’s also fair to say that it hasn’t made a final
decision on whether it wants the thing all for itself and it’s looking to develop further
9

before making a definitive call. We’re assigning an asset value of $10m to BTO’s share
of the project today, admitting that it’s not much more than a best guess.
• Bellavista in Costa Rica: Due to the current moratorium on mining activity in Costa Rica
and the strongly anti-mining country stance that has developed in the last few years, we
see little reason to expect much from this gold project and assign no value to it
• Pajo and Colorado: These are two concessions in The Philippines that come as part of
the CGA buyout package.
Overall, “other projects” held by BTO are packed with potential value, but it’s not so easy to put
a present day dollar value on these things. After mixing, matching and trying to best-guess, I’m
putting a blanket $80m value on the package for valuation purposes while being clear that any
one of them may turn out to be worth multiples of that figure, or indeed they turn out to be worth
nothing at all.
Preliminary valuation of BTO
I think I’m going to indulge myself once again and let this analysis stray into another week,
because once again it’s getting to long. So what we’ll do here is overview the valuation process
and next week I’ll walk through the main component parts of the valuation, with the three big
bits being the Libertad/Limon combo, the Masbate mine and the Otjikoto project, as well as the
other assets and the value brought by company cash.
In the case of BTO, a company with plenty of moving parts to consider, we’re taking a sum-of-
parts approach to valuation and working it up fro a NAV/share basis.The producing and working
assets are valued on their forward cash flow potentials and the development projects get an
basic in-situ valuation assigned. We again assume the CGA merger goes as planned and use
the projected shares out count of 647m for “New BTO” as our baseline.
Here are the basic outlines being used
• Libertad/Jabali + Limón: 8X forward 2013 FCF of $160m = $1.28Bn. The combination
of the two Nicaragua working assets is still considered the major asset at BTO even
after the arrival of Masbate, thanks to the improved production expected in 2013 and
beyond as Jabali comes on line and the overall lower cash cost profile. At both
Libertad/Limon and Masbate, a relatively high 8X free cash flow multiple is applied to
reflect the perceived ‘premium quality’ of BTO the company. Gold is set at $1,700/oz
• Masbate: 8X forward 2013 FCF of $130m = $1.04Bn. Masbate looks as though it may
beat my FCF forecasts, but for the moment and as this young and growing asset beds
in, we’ll aim to the low side on our revenues projections
• Otjikoto: 1.4m oz gold (all categories) at $200/oz in-situ = $280m. This project gets a
high in-situ valuation as it’s next on track for development, its costs profile (both capex
and opex) are competitive, permitting looks good and importantly the treasury at New
BTO already covers development, making this as sure a thing as you can get to
become a real live mine
• Gramalote: 1.9m oz gold (M+I+I total) at $100/oz in-situ = 190m. This is BTO’s future
growth, with the in-situ value above peers due to its strong partner and better than
average grade that will keep overall per ounce cash costs low come the day it’s
developed.
• Other projects: $80m as explained above
• Net cash at end 2012 (BTO and CGA combined, incl debt): $190m.
This little lot brings the total company NAV to $3.06Bn, or $4.73 per share. There’s no discount
applied to that, instead the conservative element of the calculation is offered by using a simple
1.0X NAV multiple to target. More detail on the parts, particularly the main Nicaragua and
1

Masbate elements, next week. As things stand we have the company parts listed, its
background checked and our target more explained.
Stocks to Follow
Of our 14 open positions, five made week-over-week gains (VEM.to, PLA.v, USC.to, BTO.to,
AQM.v), two were unchanged (RIO.to, LPK.to) and seven lost ground (LRA.v, IRL.to, OGC.to,
LSA.to, AUN.v, GWY.v, FCV.v). The worst of the losses was seen in OceanaGold (OGC.to down
9.0%) while the best win came from AQM Copper (AQM.v up 53.8%).
There are currently 14 open positions, one less than our self-imposed maximum. Six of those
stocks are green, eight are in the red.
Company Ticker this week Avg Price Reco date Current PPS Gain/Loss% Notes
Top Picks
Rio Alto Mining RIO.to buy C$2.04 07-apr-11 C$5.06 148.0% $6.29 tgt
Recommends
Vena Resources VEM.to hold C$0.70 31-may-09 C$0.22 -68.6% target lowered to 42c
Lupaka Gold LPK.to hold C$1.12 23-oct-11 C$0.395 -64.7% holding
Lara Expl. LRA.v buy C$1.15 08-apr-12 C$1.27 10.4% solid biz model, LT hold
Plata Latina PLA.v hold C$0.79 10-apr-12 C$0.45 -43.0% considering sale
Minera IRL IRL.to hold C$0.73 22-jul-12 C$0.83 13.7% $1.56 tg, added, new avg
OceanaGold OGC.to buy C$3.03 16-sep-12 C$2.99 -1.3% $5.34 tgt growth prod
Lachlan Star LSA.to Spec buy C$1.50 30-sep-12 C$1.36 -9.3% $2.23 1st tgt
United Silver USC.to hold C$0.245 28-oct-12 C$0.235 -4.1% new position 60c tgt
Aurcana Corp AUN.v buy C$1.07 11-nov-12 C$1.01 -5.6% $1.50 tgt near term play
Galway Res GWY.v buy C$2.19 24-nov-12 C$2.20 0.5% new arb play, near term
B2Gold BTO.to buy C$3.45 28-nov-12 C$3.48 0.9% new position $6.00 tgt
Smaller/Riskier
AQM Copper AQM.v hold C$0.31 16-oct-11 C$0.10 -67.7% considering sale
Focus Ventures FCV.v hold C$0.175 01-jul-12 C$0.18 2.9% 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% fail 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
Strait Minerals SRD.v oct'12 C$0.125 09-dec-11 C$0.12 -4.0% closing coverage til FY13
Sunward Res SWD.to oct'12 C$1.47 13-mar-11 C$1.21 -17.7% sold, took loss
Gold Res Corp GORO oct'12 U$21.47 09-sep-12 U$17.40 19.0% Short trade closed
Yellowhead Min. YMI.to nov'12 C$1.00 01-apr-12 C$0.63 -37.0% sold, took loss
Primero Mining PPP nov'12 U$7.26 07-oct-12 U$6.73 7.3% Short trade closed
Bear Creek Min. BCM.v nov'12 C$3.38 07-nov-11 C$3.72 10.1% Took small profit
2009, 2010 and 2011 closed positions in appendices below
Now for some notes on a selection of the above stocks.
1

Galway Resources (GWY.v) A small bucket of cold water was poured over GWY late Friday
by way of this NR (2) which announced that after a BCSC inquiry, GWY has had to restate in
certain documents and remove a 2008
report from its website. To be honest
there’s nothing that’s of really great
importance on the list of things GWY
has had to clean up, especially in the
light of the soon to be deal with Eike
Batista plus the spin-outs, but there is
a negative connotation of a company
that’s done things in a bit of a sloppy
way and had its wrist slapped by the
authorities.Then again, and with the
clear understanding that the
authorities have a duty to act where
they see rules being broken, it’s also
frustrating to see the BCSC spend
time on really quite minor and petty
infractions such as the list here.
In the end this isn’t much of a big deal and overall I think the market’s reaction on Friday got it
about right, with a small dip that was quickly considered a buying opportunity by others. Not a
biggie, and we’re still calm and holding here for the deal, the cash and the arbitrage that the
spincos offer.
Minera IRL (IRL.to): On Monday IRL announced (3) that the underground drilling program,
made possible by the development of the 1.2km tunnel now 2/3rds complete, was now
underway. The programmed drilling is set to test extension of the main Ollachea mineralized
body and if all goes well, it will increase the 43-101 resource and the mine life. Meanwhile, this
news unsurprisingly didn’t boat the boat of our ongoing depressed market and IRL was off a
few cents on the week on light trading volumes.
B2Gold (BTO.to): Our Thursday Flash update that noted I’d be a buyer if BTO sunk under
$3.15 managed to just about bottom-tick the stock (be that good or bad, I’m really not sure)
and BTO performed better than most through the Friday afternoon mini-rally to finish up, by
just three cents, on the week. It sure reminded me of a comment from regular reader ‘B’ on
Friday morning who wrote, “The only stocks I really like are not going down….”.
Rio Alto (RIO.to): Here’s ten days of RIO price action, which shows the tight range RIO has
found itself trading all of a sudden.
Apart from that, no news of great import as we wait for the next probable fundy catalyst, the
4q12 production report.
1

Lachlan Star (LSA.to): We had news from LSA on Friday morning (4) and it was pretty solid
too, with the company announcing that further tests on the Run Of Mine (ROM) material that’s
being stockpiled so far confirm that this low grading stuff can be processed economically and
add to the current production profile at CMD. The plan from here is to start stacking the ROM
material in early 2013 and LSA should benefit from higher production from this supplementary
line by the second half of 2013. I need to run some calculations and adjust the model on LSA,
but in general terms this news points to our longer-term forecast of a CDM getting to 100k
oz/annum run rate.
AQM Copper (AQM.v): AQM put in a strong percentage-wise performance last week, but the
really interesting thing was the
substance behind the style. The big
move came late Friday when a single
buyer (house 143, Pershing) hit the ask
and kept hitting it, buying over 400,000
shares in the last few minutes of play.
In other words, there’s at least one
person out there in the world who
considers this beaten to death name as
a value opportunity, but it might also be
a tell on that overdue scoping study
(PEA). It’s certainly about time.
Vena Resources (VEM.to): VEM bounced between 20c and 22c all week, ending in a tape
paint tick at the higher end of the range. The jury is still well and truly out on whether 20c is a
new support level, however.
Plata Latina (PLA.v): Another late Friday chunk after a long period of quiet, with BMO
stepping up to buy 116,500 shares at 45c. In this way PLA trading wakes from a very long
slumber.
Aurcana Corp. (AUN.v): Down just a penny, but could have been worse and AUN is a typical
example of the action in juniors last week, with soft trading and a late Friday recovery that got
back most of the losses.
OceanaGold (OGC.to): As written on the blog Monday evening when the news was
announced (5) it was pretty obvious that OGC was going to take a hit from its decision to raise
capital via a $93m bought deal financing, selling 30m shares at C$3.11 a shot. The subsequent
hit to the share price has been a bit more
drastic than expected (I thought it would OGC.to: Working Capital per qtr
level out at the $3.11 asking price, we’re
280
12 blow that) but nothing too untoward 240
and it was encouraging to see that the 200
very next day (6) the book was reported 160
built. We have to note there’s some extra 120
downwards pressure still, as the 80
brokerages running the offering have a 40
0
15% over-allotment facility, which means
-40
another 4.5m shares can be added to the
-80
deal which will bring gross proceeds to
-120
slightly under $107m (and probably net
the company $100m all told. However, as
also noted in that Monday evening post I
cannot blame OGC for doing what it did
1
60q4 70q1 70q2 70q3 70q4 80q1 80q2 80q3 80q4 90q1 90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 tse21q4
source company filings
srallod
fo
snoillim

and running this offering, as aside from the immediate term share price hit I’m taking the deal
is a good one for the company. If we check out working capital to date and assume the deal is
closed on December 31st 2012, here’s how it will affect things.
From the negative $55m working cap position of 3q12 (that included under $25m in cash), once
we add the new equity raise and the new $220m loan facility available to OGC, working cap, i.e.
liquidity, shoots up to over $260m. What will probably happen is that OGC uses some of that
cash to pay down current liabilities and doesn’t tap its loan facility at all, while keeping it on tap
in case the Didipio ramping towards commercial production hits a glitch. However, the point
here is that all that cash is on hand and changes a tight treasury situation into a comfortable
one immediately. I like this deal, notwithstanding the pressure it puts on the share price in the
near term. Once the positive effects are felt, OGC will move higher
The Copper Basket
After forty-nine weeks of 2012 The Copper Basket is showing a 50.31% loss to level stakes.
company ticker price 1/1/12 Shares out Market Cap current pps gain/loss%
1 Copper Fox CUU.v 1.15 398.97 406.95 1.02 -11.3%
2 Lumina Copper LCC.v 13.19 43.2 342.14 7.92 -40.0%
3 Augusta Res AZC.to 3.17 144.1 328.55 2.28 -28.1%
4 Nevada Copper NCU.to 5.18 72.8 246.06 3.38 -34.7%
5 Western Copper WRN.to 1.58 93.28 74.62 0.80 -49.4%
6 Baja Mining BAJ.to 0.80 338.5 40.62 0.120 -85.0%
7 Yellowhead Min. YMI.to 0.80 52.82 34.33 0.65 -18.8%
8 Candente Copper DNT.to 0.97 121.67 34.07 0.280 -71.1%
9 Regulus Res REG.v 1.24 99.88 28.97 0.29 -76.6%
10 Duran Ventures DRV.v 0.18 184.72 18.47 0.10 -44.4%
11 Catalyst Copper CCY.v 0.08 274.48 13.72 0.05 -37.5%
12 Excelsior Min MIN.v 0.63 56.12 13.47 0.24 -61.9%
13 AQM Copper AQM.v 0.39 105.6 10.56 0.100 -44.4%
14 Strait Minerals SRD.v 0.150 56.86 5.12 0.09 -40.0%
15 Crazy Horse CZH.v 0.35 64.48 4.19 0.065 -81.4%
Portfolio avg -50.31%
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 just one of the stocks on the list, AQM Copper. 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.
Since last week five of our basket stocks went up (WRN.to, YMI.to, AQM.v, MIN.v, CZH.v) and
one remained unchanged (DRV.v), which leaves the other nine names as weekly losers (LCC.v,
CUU.v, AZC.to, NCU.to, BAJ.to, DNT.to, REG.v, CCY.v, SRD.v). The biggest percentage win
came from AQM Copper (AQM.v up 53.8%), followed by Crazy Horse (CZH.v up 18.2%) and
Western Copper & Gold (WRN.to up 17.6%), meanwhile the biggest losers were Catalyst
Copper (CCY.v down 16.7%), Lumina Copper (LCC.v down 10.9%) and Strait Minerals (SRD.v
down 10.0%).
Overall, our basket registered another new 52 week low and crossed the magic (term used
loosely) 50% loss barrier, hardly something to be proud about.
1

20% Copper Basket 2012 average, weekly
15%
10%
5%
0%
-5%
-10%
-15%
-20%
-25%
-30%
-35%
-40%
-45%
-50%
-55%
1
ht8naj dn22 ht5bef ht91 ht4ram ht81 ts1rpa ht51 ht92 ht31 ht72 ht01 ht42 ht8 dn22 ht5gua ht91 n2pes ht61 ht03 ht41 ht82 ht11 ht52 ht9
source: IKN Weekly calcs, TSX
2102/1/1
morf
egnahc
%
Moving to the macro indicators for copper, the best of the bunch is the one that really matters
as market prices for copper have rebounded recently, mostly on talk of China rebounding,
recovering, re-stocking, anything you like
that begins with re. This two year chart of
copper (simple daily close price) has the
bit that interests me the most with a red
circle around it, as away from the
historical action I’m positive about the fact
that copper has turned away from
threatening the low $3s/lb level and is now
rising. However, I am supplying you with
the bigger picture because I’m quite sure
the TA proponent in the audience will be
happy about the higher lows now put in
for over a year and you can draw in
triangle shapes with your mind’s eye as
well.
As for inventories the world total moved
up very slightly, adding 9.092mt (+1.8%)
to sit at 512,257mt this weekend. Inside
the big number, LME stocks rose 2.8%,
Comex rose 2.0% and Shanghai rose
0.5% so all fairly homogenous. The
dataset to most concern copper bulls comes from the LME cancelled warrants as the drop off
continues. Cancelled warrants now make up just 11.74% of LME stocks and that hasn’t been
this low since the period IKN160 to IKN163 six months ago.
Cancelled Warrants at LME, IKN157 to date
35%
30%
25%
20%
15%
10%
5%
0%
751NKI 851NKI 951NKI 061NKI 161NKI 261NKI 361NKI 461NKI 561NKI 661NKI 761NKI 861NKI 961NKI 071NKI 171NKI 271NKI 371NKI 471NKI 571NKI 671NKI 771NKI 871NKI 971NKI 081NKI 181NKI 281NKI 381NKI 481NKI 581NKI 681NKI 781NKI 881NKI
source: Cochilco, LME
rof
yrotnevni
EML
%
latot
yreviled
resu-dne

Three quick comments on three basket stocks
Western Copper & Gold (WRN.to): Bucking the general trend, WRN rallied on no news and
although volume wasn’t exactly heavy, there was persistence about the way in which the stock
rose that was positive for the stock. I still don’t like it, but at least it’s not wildly overpriced the
way CUU is.
Lumina Copper (LCC.v): We need to mention the drop in LCC, which looks for all the world
like another case of tax loss selling. Down 10.9% last week and unloved.
Yellowhead Mining (YMI.to): Post bell Friday isn’t normally a good time for news from your
company, but in this case it was ok. YMI said (7) that it was kicking off an 11,000m drilling
campaign that is due to run to March 2013 and that we could expect ongoing results in that
time. In other news, the stock did better than most, still treading water around the 65c position
Regional politics
Uruguay makes mining-friendly noises
Keeping an eye on the macro political scene in Uruguay, as there are strong signals that the
country under the current Mujica administration is moving to a clear pro-mining stance. In a
speech Wednesday December 5th, Uruguay Minister of Finance Fernando Lorenzo (7a)
highlighted the changes that were in process for the country’s economy, highlighting in
particular the production of iron ore and saying that mining would become Uruguay’s principle
export and was set to become double any other export sector. He said, “Faced with this reality,
the government is looking very closely at the sector and separating it from other industrial
activities. This allows us to watch the structural change that will impact our productive
structure.” Which is a fancy way of saying that we’re paying special attention to the mining
sector from now on.
Then on Friday 7th the Uruguay government met (8) with Zamin Ferrous, the privately owned
Brazilian mining company that’s moving forward on Uruguay’s biggest mining project, the
$3.5Bn Aratirí iron mine in the centre of the country. During the meeting both sides agreed to
accelerate construction of the project and the necessary deep-water port, with a view to
beginning production and export now in place for 2016.
Peru: Candente Copper (DNT.to) at Cañariaco under pressure
We know via news coverage (blog and other places) that DNT at Cañaris has a lot more
opposition than the company would like us to believe, with the 500 protesters that took three
third party geologists hostage along with their seven man support term (of sorts, as they were
held in a local convent and released 24 hours later when their captors got too hungry, which is
hardly a well planned kidnap attempt) and then march or so locals who hit the streets Thursday
in order to make their voices heard. Depending on which report you read there were 200
people or 2,000 people marching and again, it either went off peacefully or it became violent,
with one report of a police bullet in the leg of a woman marcher (9). The result of that last day
of action was an agreement between locals, police, company officials and the government to
calm things down, stop the roadblocks and protests and get together all parties on December
17th for round table discussions (10) locals are saying that if DNT doesn’t agree to leave the
area they ‘ll go back to marching and protesting, so the atmosphere is still rather hot. We’d look
for things to have calmed a little come the week after next and the neogitation time, but it
really doesn’t look very good for DNT at Cañaris.
Chile: Power station approval
A piece of qualified good news (11) for the Atacama region of Chile Monday, when ministers
approved the plans for a new coal fired power station for the region called Punta Alcalde. There
are some reservations being set to the original plan and full green lights aren’t being given yet,
but on review and after listening to the right experts there seems to be no big problems to
1

resolve on a political level at least. However, the political decision is not a courtroom decision,
so we wait to see whether the judicial situation as mapped out last week is a problem to the
plan as the local community of Huasco, close to the planned power station, has already said
that it will go to the country’s Supreme Court in order to stop development. To combat this
Endesa (the company behind Punta Alcalde) is using the prod of nationalism, as the best
proven way of getting Chile off its collective rear-ends and bypassing the hand-wringing social
aspects of industrial development is to tell the country it’s losing ground against its neighbours.
That’s what happened last week when (12) Jorge Roseblut, the president of Endesa, said in
various interviews that the new power station, “...is a competitive advantage for the country,
energy that will allow us to make up lost ground, because Peru and Colombia are taking
advantage of our energy slowdown.”
Colombia is aware that its mining development is lagging
During a presentation made last week (13), Claudia Jiménez, executive director of the
Association of Large Scale Sector Mining (Asociación del Sector de Minería a Gran Escala, or
SMGE, which represents 12 of the largest mining companies either producing or exploring in the
country) admitted to those present that the growth in formal mining in Colombia had not met
previous expectations. The key stat to illustrate her point was that in the year 2000, mining
activity represented 1.8% of country GDP, while in 2011 that had moved to 2.3%. However,
2012 was now forecast to come in at 2.4% for mining which is (quote translated) “a panorama
for the end of this year and the beginning of the next that is far less encouraging than it might
have been over the last two years.”
According to Jiménez, the reasons for the slower than expected growth include institutional
bottlenecks, illegal mining activity, uncertainty around national mining policies, uncertainties
around land claims from victims of forced migrations, insecurity, administration inconsistencies
(whatever that might mean). However, according to Jiménez, even though the mining boom
hasn’t started, “...what we have is a great expectation for growth in mining production.” The
country has a target for mining to contribute 3.6% of country GDP by the year 2020.
Guatemala: Canada’s governor visits
This was mentioned on the blog Friday (14) via a translation of an op-ed in Guatemala’s
respectable daily, Siglo21, that did a good job of summing up in-country feeling about the visit
of Governor General of Canada David Johnston to Guatemala last week. The key paragraph was
the last one, reprinted here:
“...the support of Canada for the different problems in the life of the country
is perfectly valid and welcomed, as long as it is not accompanied by
conditions that favour and facilitate investment in the mining sector.”
The interesting part of that editorial was the overall tone and it was because of that I 1)
translated the whole thing and 2) actually paid a bit of attention to the way I was translating it
(for a change), aiming to get the tone right. What was on display was a far more guarded
attitude than I’d expect from a national daily in Guatemala, no matter whether Siglo21 doesn’t
always toe the official government line. It was more evidence than the anti-mining camp has
made more progress in pushing its agenda and influencing public opinion. It really is high time
that Canada, its mining companies, its local representatives and the apparently supportive Pérez
Molina government went on a charm offensive and started its own PR effort to promote the
industry in the right way, before it’s too late.
Peru: Mister Santos goes to Lima
As noted a couple of issues ago, Cajamarca regional president and focal point of the anti-Conga
campaign Gregorio Santos made his appearance at the National Congressional committee
looking into accusations of corruption in the Cajamarca government. Another non-surprise was
Santos immediately claiming (15) that all investigations against him were nothing more than
political persecution. This committee will take its time, has more people to call and may well call
Santos again to testify. However, it does seem as though a net is slowly closing around the
man.
1

Market Watching
Is Venezuela a junior mining buy?
No, but there might be a near-term trade.
Welcome once again to one of those pieces that could sit in “Regional Politics” or in “Market
Watching”. The decision is to locate it here because although a lot of what follows is pure
political analysis, we home in on the potential for trades and in the end decide there’s one
specific trade that’s a live possibility.
The news last night that President Hugo Chávez has to go back to Cuba for a third round of
surgery to combat recurring malignant cancer is easily the biggest political news of the week in
LatAm. Professional opinion (16) from leading oncologists who have no political axe to grind is
as clear as can be that if the cancer suffered by Chávez isn’t terminal already, it’s dangerously
close to being so. Dr. Elmer Huerta, President of the American Cancer Society, wrapped up his
report on developments in this way (translated):
“Summing up and if everything that Mr. Chávez has said is correct, it’s possible that
this second return of the cancer, at only 18 months from the illness being diagnosed, is
the start of the terminal stage of his cancer. If so, in the next few weeks and month
President Chávez will show a progressive decline in his mental, intellectual and
physical faculties.”
Add to this the way in which Chávez chose his freshly minted Vice President, Nicolás Maduro, as
his dauphin who will take over the day-to-day running of the government as from the moment
Chávez leaves for Cuba and was named as the man who should run for election if Chávez
cannot assume his recently won Presidency and a new election is called (NB: The presidential
term won by Hugo Chávez in October is due to commence on January 10th and if Chávez is
deemed, or more likely deems himself, unfit to take office a new election must be called
according to the constitution). This is the first time that Chávez has directly referred to anyone
as his potential successor, is the biggest political news of the whole package presented last
night.
We consider potential political scenarios: The first, and from what Chávez said last night
perhaps the most likely while this breaking story still develops, is that Maduro operates as
interim President for the next few weeks and then new elections are called, either before
February or at the date, in which Maduro then runs against the recently defeated opposition
leader Henrique Capriles (note: Capriles is currently running for the post of regional governor of
Miranda state, a race in which he’s leading comfortably in the polls for the December 16th vote).
Also, it’s worth saying that it’s much less likely Maduro insisting on taking the presidency
without a new election, as that would be a constitutionally very dubious move and bound to
open up the current government to debilitating attacks. Another possible is that Chávez
assumes the presidency in February, governs normally for a period and then the cancer gets
the better of him. If so the transfer of power becomes more of a grey area, with Maduro not
needing to hold new elections in order to gain mandate, but would likely feel the moral
imperative to do so (personally and/or from outside influence). Finally, it’s still possible of
course that Chávez makes a sufficient recovery and leads for the six year term to which he’s
been elected.
From this point the scope of the analysis is limited to financial trades and gains that might be
made from investments. I wish Chávez the best of fortune in his difficult personal battle, aside
from any political differences or coincidences. On a list of ways in which you wouldn’t want to
go, an aggressive malignant cancer ranks up near the very top. So to the possibilities for
financial trades. We must assume that the financial market, rightly or wrongly, will see the
removal of Hugo Chávez from the scene as a big positive for the country’s economy and
therefore a positive for anyone going long its financial devices. All previous evidence points to
that as the way the market will react.
1

• The first event will be a near-certain rally in the country’s sovereign bonds starting at
the bell tomorrow morning. Whether or not that rally continues for an extended period
is up for debate, but a very-short term rally in the bonds is a given, a lock.
• We can expect a rally in the country’s currency, the Bolivar Fuerte, but that will only
see real practical effect on the country’s internal grey/black market for the currency.
• We may see speculative short-term gains in equities exposed to Venezuela. There
aren’t many that have all eggs in Venezuela these days, but limited rallies in the large
oil companies with Venezuela exposure (Chevron CVX etc) may occur.
• Another near-term beneficiary from speculation may be Colombia-based oil companies
run by Venezuelan nationals, such as Pacific Rubiales (PRE.to) that has strong
connections via its directors such as Venezuelan Serafino Iacono (this aside from the
very low opinion your author has of this unsavoury individual and his cohorts, as facts
are facts).
• As for junior mining companies, the only one that can be said to be “operating” in
Venezuela today is Rusoro (RML.v), but as that company has recently opened
arbitration proceeding against the government of Venezuela the term has to be applied
very loosely. Other companies that may be seen as potential beneficiaries are Infinito
Gold (IG.v), Gold Reserve (GRZ.to) (GRZ) and the somewhat infamous Crystallex
(KRY.to), all of which are fighting for their share of the Las Cristinas project in
Venezuela via arbitration proceedings against the government. Finally, there are one or
two juniors that still hold concessions on Venezuela properties which haven’t seen much
in the way of activity, with Valgold (VAL.v) one that comes to mind.
• Of all the juniors mentioned I’d expect Rusoro (RML.v) to be the vehicle most likely to
get a short-term boost from the news of Chávez’s relapse. It has plenty of shares out,
gets some volume on Venezuela political occurrences, is very cheap and has the last
truly active “Venezuela profile” left in the juniors.
• I have no idea how much RML.v (and others) may rally in the short-term, as it’s going
to be much more about sentiment and the market’s penchant for risking on a tinyprice
pennystock than any great play on fundamentals. This two year price chart of RML may
provide a clue or two though, as we see the three most recent stages of RML’s life as a
company, first when everything seemed to be going badly (up to September 2011) and
then when things were confirmed as being very bad (Sept’11 to March’12) and then
when RML confirmed that no deal had been reached with the government, its assets
were to be nationalized and international arbitration with ICSID was started (March’12
to date).
Today we find an RML with a 5c share price and a ~$26m market cap (there are over 500m
shares out folks, so watch out). Just on the chart and potential upside of the squiggly line,
1

which is really all I have to go on here and I’m keenly aware that’s not much, we could get a
rally to 10c or 12c, maybe 15c at the outside if the speculations really catches hold
However, I think that any rally in any Venezuela-related issue, RML or bonds or other (and be
clear that the big boys game of bonds moves much much cash than any Venezuela-exposed
company equity) will be short-lived and the bigger decisions will happen around the potential
second election which would likely be contested between Maduro and Capriles. If asked five
years ago I would have said that a Chávez government suddenly bereft of its charismatic leader
would fall apart quickly, perhaps even catastrophically, but these days the Chávez party, the
PSUV, is a well-established and well-oiled (take that quite literally) political machine that will
continue to operate smoothly without him. The question is how well it will manage without its
clear leader and although it’s likely to take a hit of some sort, there’s no reason to immediately
suppose that the PSUV will lose a second, quickly called Presidential election under a Maduro
candidacy, simply because the candidate is Not-Hugo. Even if unable to rule or run, Chávez’s
presence will be a strong one in any new campaign and election that will rally the undoubtedly
strong PSUV party and supporters around the new candidate, whether he lacks the charisma of
Venezuela’s current President or not. I’d agree a new election, let’s suppose between Capriles
and Maduro, might be a closer run thing, I’d agree that Capriles has a better chance, I wouldn’t
say that he’s a sudden favourite though.
Therefore and until we know more about the diagnosis and prognosis of Hugo Chávez, the call
is that there may be a speculative, short-term trading and investing window opening up in
Venezuela-exposed issues, but I really wouldn’t like to hang around for a long time in any trade
and would call on those with the risk tolerance to trade this political event not to be too brave
and take any profit that comes their way. For a practical call on the subject matter of The IKN
Weekly, junior mining companies, the risk-tolerant can consider Rusoro (RML.v) a
potential trading vehicle as long as you can get in at a reasonable level. Please note
that that every word in that line underlined and in bold type is important. That’s to say:
If you are risk tolerant, which means you’re willing to gamble with your money and don’t
consider the cash entered as an investment in its tue sense
If a reasonable entry price is offered tomorrow morning, which I’d call 6c or depending on the
way things trade perhaps 7c absolute max if momentum builds...but 7c is absolute max all
circumstances and I’d much prefer something at or under 6c
Then you may consider a near-term trade in RML.v as long as you don’t hang around the open
position too long and are quick about taking profits or quick about closing a losing position if it
starts to go against you.
Now for the personal call and what I’m going to do with my cash. As you probably know by
now, I’m not the biggest risk-taker out there in junior trading world, but I will admit that this
time and with limits, a punt on Rusoro (RML.v) in particular is tempting. It will be strictly
governed by the entry price, by which I mean that I want to be in for 6c or less and would only
consider a 7c entry point in-extremis...above that I’m not a player. It will also be governed by
the small, very manageable amount of cash I deploy. I’m not risking much here in absolute
terms and if it wins enough to cover the Christmas festivities, pay for a toy or two for the girls,
perhaps upgrade the quality of wine on the table come the 25th, then I’ll be content. If any
trade (given the right entry price) turns out to be a loser there won’t be any tears shed, either.
But the bottom line is that yes, given the right set of circumstances and price I’m a
buyer of RML.v tomorrow morning. It’s not one that will make it to the ‘Stocks to Follow’
list (unless it subsequently grows again in the way Galway (GWY.v) did, but that’s very
unlikely). Consider this one a side bet.
Goldgroup Mining (GGA.to): A reminder for those who like risky propositions
We know a couple of things about Goldgroup Mining (GGA.to) this year. For starters, we know
that its share price performance has been nothing short of a disaster.
2

We also know that it hit very significant local pushback and protests around its Caballo Blanco
project in Veracruz, Mexico. The approval from Mexico’s Semarnat environmental office was
first refused and refiled in March, then deferred and just a few days before something akin to a
final verdict was about to be given in late September, the company suddenly decided to
withdraw its EIA evaluation (17) because it had almost certainly heard that Semarnat was about
to refuse it permission once again. The reason behind the September withdrawal was political
strategy, as GGA believes it would have a better chance of getting a favourable decision once
the new government of Enrique Peña Nieto of the traditional PRI party were installed. That had
now happened of course, with the EPN government taking over on December 1st and now we
have the normal turbulent timeframe when government offices get new admin bosses in line
with the new government and its political line. Therefore it wouldn’t come as any surprise, now
that EPN is in and there’s a changing of the guard at Semarnat, to hear that GGA reactivates its
EIA permitting track and looks to get a positive decision from the new government.
Quick notes on corporate structure: As at September 30th (end 3q12) GGA.to had $12.5m in
cash, working capital of ~$19m and ~131m shares outstanding. That means GGA.to doesn’t
cover a great deal of its share price covered by cash treasury (today’s 35.5c share price is just
2.5c off the 52 week low and gives a market cap of $46.5m) but it does have enough of a cash
arsenal to go about its business and do its thing if it decides to push again for project
permitting. However, the biggest booked asset by far is the $62.5m is has written on Caballo
Blanco and rightly so, as it’s the project that makes or breaks the company (please note we
discount is small and loss-making production at its other mine inherited from Sierra Minerals).
We also need to note that there have been some significant changes in GGA management, the
main one being the removal of Keith Piggott as CEO and head man (probably due to the
strategic mistakes he made while running the show, but that’s just guessing on my part). I’d
personally say at this time that GGA faces a real uphill struggle with this permitting track and
for three reasons.
1) The local Veracruz governor is also a PRI man and he’s been making official statements
against the project all through 2012. Just because there’s a change at the top on a
national level, it doesn’t mean that Mexico will suddenly look favourably upon Caballo
Blanco
2) The decision to grant or deny the EIA permit is done nationally and not locally by
Semarnat, but again there’s no guarantee at all that the new regime inside Semarnat
will be more favourable to the Caballo Blanco project than the outgoing team.
3) Even if Semarnat rules in favour of GGA at Caballo Blanco, it will be a politically hot
potato and will almost certainly be the focal point of a large-scale popular protest from
those who don’t want the mine set up. And again, the EIA permit isn’t the last piece of
2

paper GGA needs to build its mine, as just for one example it will need a change of land
use permit from the Veracruz regional government that’s against the project.
However, this crazy game is more about share price movements than whether Caballo Blanco is
ever built or goes into operation and a trading theory can be set up around GGA re-applying for
its EIA permit and maybe even getting it. It goes something like this:
• Cheap shares bought now
• In the near-rish future GGA announces it is re-applying for its EIA,
• GGA in its announcement perhaps talks of modifications to the previous EIA permit
application to make the plan more palatable to the national authorities, perhaps hints to
willing ears on or off record that the company expects an easier passage now that Peña
Nieto’s PRI party is in national power, etc
• Shares rise on new optimism around EIA permitting track
• If things go well, a few months down the line Semarnat approves the new Caballo
Blanco plan
• GGA shares rise sharply on this news
• Profits taken there and then, without ever needing to know whether the mine gets built
or protesters lose or win, etc
As usual, this type of thing is a mere roadmap and there can be dozens of variations as the
thing moves forward. This is a high risk proposition and I for one am not going to partake in it
(not least for the way in which GGA lacked in transparency and rode roughshod over
community relations under the previous managerial rule), but the set-up may appeal to those of
you who like them beaten down and with a fair chance of resulting in a big percentage win. The
basic bottom line is that GGA is not going to give up on Caballo Blanco as a project and has
stated that it was going to wait for the new government to take power to make its next move.
Now that EPN is Mexico’s new President, the time window is now open for the company.
Lottery ticket ideas: Further thoughts and reader suggestions
Last week’s section that put forward the idea of running a “lottery ticket” type investment on
extremely beaten-down exploration names didn’t go into much detail about the companies
suggested but clearly resonated with plenty of readers (far more than I expected in fact)
judging by the feedback received. Along with the suggestions also came the idea that we could
perhaps run a basket of these tinycap “lottery tickets” during 2013, which on consideration isn’t
a bad idea, reputation where one’s mouth is and all that.
Meanwhile, even though the sample was small and it’s only one week, it’s worth noting that
even in the continued bad atmosphere for juniors of the eight we highlighted last week, five
went up (RDU.v, BHV.v, YEL.v, AQM.v, RCZ.v), two remained unchanged (FV.v, NEI.v) and just
one dropped (FCV.v, and then only by half a cent).
So to the suggestions received and there were more than just these seven, but I’m going to
exercise some editorial control and filter out a few that I really didn’t like the look of, leaving
what you see below. Once again, please be clear that what follows is not a list of
recommendations to buy the featured stocks, rather it’s a list of names that could be
considered as a kick-off point for further DD. All of the stocks considered in the “lottery tickets”
notes, neither last week or this, are highly risky propositions and all of them have the potential
to drop a lot further if things don’t go well. However, I do think the names from last week and
this are better than a lot of their peers and along with high risk comes possible high reward if
things move positively for the company or their sector.
1) High Desert Gold (HDG.v): 58.5m shares out, share price of 13.5c. This $7.9m market
cap company is a pure drill play with its main target the Gold Springs property, on the
Utah/Nevada border, USA. It’s had some decent hits recently and got itself moving in the
market, but it’s recently fallen back and there’s not so much working capital left here, either.
2

2) Glass Earth (GEL.v): Currently with 81.94m shares out, but that’s about to rise to 100.7m
as GEL is currently running a 18.75m unit (1 share + full warrant) offering to raise $3m in
funds. It’s share price of 14.5c today implies a soon-to-be market cap of $14.6m. The flagship
here is the JV in New Zealand it has with Newmont (NEM) or all people, so a big partner with a
target close to a NEM asset that might make a decent addition to NEM’s regional resource. The
obvious exit strategy for GEL is therefore to be bought our by NEM while another thing positive
is that Brent Cook likes it, who isn’t a bad person to have as a supporter.
3) Aguila American (AGL.v): 39.26m shares out, share price of 15c, market cap $5.9m. AGL
is low on cash (working cap $1.5m as at July 31st) and now with a drill program to pay for, so
we can expect further dilution soon. But what it does have is a decent gold project target called
Angostura in the Apurimac region of Peru and has recently strengthened its board with some
decent industry names. I’m not enamoured of this company personally and I have a sneaking
suspicion that they’re currently drilling without having first secured the necessary social
agreement (i.e. drill now pay a fine later), but if the promising rocks of Angostura give a strong
assay result in the next few weeks, this one could pop quite easily. It’s a project that I’ve
chewed cud over with several geols and Peru industry people of the years and the people that
care about rocks all say it’s a promising target.
4) Marlin Gold Mining (MLN.v): This is the only company on today’s updated list that comes
from my own bat. MLN is company a tiny 9.5c share price and a market cap of around $18.3m,
but it also has $6m in cash and a main backer called Wexford Capital that owns 53% of stock.
It’s a new entity, formed after Wexford completed what amounts to a hostile takeover of the
old Oro Mining (ex-OGR.v). Its flagship asset is the La Trinidad deposit in Sinaloa Mexico with
around 300,000 oz gold under 43-101 resource compliance.
The reason it’s on today’s list is that I was pitched about this stock by the Wexford people last
week and, although I have my reservations, thet seem to have their heads screwed on here
and a good plan to bring the deposit into near term production (famous last words, but this
time they might even turn out to be true). What the company needs is to raise about $32m to
$35m in order to build its machine, which on paper looks a lot for a tinycap share price but I’m
told that Wexford as backers have a plan to put the financing in place soon. I don’t know the
details of that plan and won’t get even close to reco’ing the stock until the package is unveiled
and examined, but the people behind this stock seem confident they can get everything
together in the near term. Another advantage here is the new stronger management team with
Wexford having brought in successful names to move things along.
The disadvantage is that the deposit is small, so even if it grows and adds to its slated 5 year
mine life, it’s nt the type of public vehicle that gets mega-multiple valuations on its share price,
plus the financing must be paid for one way or another and that’s bound to weigh things down.
However, with a 9.5c stock you’re never going to get a perfect set-up and this is definitely one
that could do well in 2013, given a fair set of circumstances and favourable wind. On the radar.
5) Darwin Resources (DAR.v): The structure here is 26.2m S/O, 18c share price, ~$4.7m
market cap and $2m at bank, which is enough until mid-2013 at a guess. This stock was
mentioned on these pages back in IKN185 and I was reminded of that fact in a “Hey, what
about DAR.v?” mail first thing Monday morning (thank you, you know who you are). Not only
that, but last week we had more solid news from DAR about its Suriloma property (18) and the
company plans to start drilling in 1q13 on the back of its trenching results now in. There’s a lot
to like about this company’s address (friendly Peru next to operating mines and big deposits),
its serious manner and the way in which Suriloma is delivering results. I’m interested enough in
this stock to have pencilled in a site visit for the new year with company CEO Graham Carman.
6) Calibre Mining (CXB.v): With ~188m shares out (and the F/D is a chunkily higher
223.5m) and a 19c share price this is a $35.7m market cap company and bigger than the
average lottery ticket but it does have ~$5m in working capital and an interesting JV partner in
B2Gold (BTO.to), which is moving the company’s main Primavera project in Nicaragua along at
no cost to CXB as it options into 51% of the property. The other thing about this relationship is
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they way BTO recently bought in to the tune of 10.6% of the company by selling its bigger
partner $5m worth of shares priced at 25c. The obvious lottery plan here is that BTO likes what
it sees at Primavera so much that it buys out the smaller company and those buying CXB at 19c
today walk away with a big M&A sell-out win.
7) Cream Minerals (CMA.v): CMA has 155.34m shares out and is now a 3c stock, giving it a
market cap of $4.66m. There’s not much cash in the structure either, with around 4500k in
working cap as per its last filing, 3q12 ended Sep’12. The other problem CMA has is that a
review of its recent 43-101 technical report by the BCSC found the document to be lacking and
had to be withdrawn. It’s now being re-done by another third party company and therein lies
the lottery ticket potential, as the revised technical report is due delivered end 1q13 and may
see the stock recover.
Another reason to consider CMA in your lottery is that it wasn’t so long ago Endeavour Silver
(EDR.to) was willing to pay 12c a shares for CMA, a hostile bid that was batted off by
management as the stock rose to 20c and above.
That wraps up this supplementary piece on the “lottery tickets” idea and we’re now playing
around with a full 15 names (8 stocks last week, 7 stocks today), quite a little bunch all of a
sudden. The idea has turned out to be more popular than I expected considering feedback
received so if you have any further idea or have an opinion on whether we should run “lottery
basket” in 2013, something along the lines of the established Copper Basket segment, feel free
to mail in and opine.
Conclusion
IKN188 is done, we close with bullet points:
• As long as the price is right tomorrow morning, I’m prepared to take a speculative piece
of Rusoro Mining (RML.v), which won’t be a ‘Stocks to Follow’ position and has to be at
the right price (6c please) and will be a strict, short-term play that tries to get me a
free turkey for the Christmas oven. A pure and simple play on the Chávez cancer news
that’s rocked LatAm this weekend.
• The ‘lottery ticket’ idea went down well, so more for your consideration this week and if
I do set up some sort of lottery basket for 2013, I’ll go as far as dedicating a few
hundred dollars to the experiment and owning the things too.
2

• BTO is cheap. Own some.
• Goldgroup Mining (GGA.to) is also cheap, but the stock will only rise if it makes
headway with its permitting track for Caballo Blanco. My best guess is that it’s going to
re-start that now we have the new Mexico President installed. If so it might get a minor
boost on the announcement that the the permit procedure is starting again, but the big
payoff will be if it gets a green light from Semarnat, and on that score it’s anyone’s call.
• As for the make-up of The IKN Weekly’s ‘Stocks to Follow’ list, I’m nearly happy with
the balance now (and considering that explorer GWY.v is only with us for a very limited
period). Perhaps one more explorer to drop and one more producer to pick up before
my December 31st time limit runs out.
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
Appendix 1: Flash update published Thursday December 6th
Good Thursday morning, the market opened a few minutes ago.
A general word about the state of the markets. I've received mails this week asking about the poor showing of several
companies and whether I think they're buys right now. Apart from the bought deal placement and resulting sell-off in
Australia of OceanaGold (OGC.to) (OGC.ax) that had a knock-on effect in Canada trading yesterday, the price drops
haven't been on any company-specific news and the only good reason out there is the continuation of tax loss selling. I
point specifically to Bear Creek (BCM.v), Focus (FCV.v), Radius (RDU.v) and B2Gold (BTO.to) because each of those
have been mentioned in more than one mail, but there are plenty of other examples out there.
As for whether I'm a buyer right now, the answer is no...for the moment. To name but one again (because it's been in
more mails than any other), I was lucky to have sold out BCM.v at the right time recently but I'm not in any hurry to buy it
back. Personally, the one that most tempts is an addition to the recently opened BTO.to position, but I'm looking for a
sharp spike down to tempt me in (remember that price chart from IKN187 last week) rather than the slow drip selling so
far. If I see sub-$3.15 suddenly appear I'd average down now, if not I prefer to wait and see how December shapes up
before deploying more cash. But this is just my small and insigificant opinion, folks.
Best, O
2

(1) http://www.calculatedriskblog.com/
(2)http://www.newswire.ca/en/story/1086007/clarification-and-retraction-of-technical-disclosure
(3) http://finance.yahoo.com/news/minera-irl-ltd-initiates-underground-060000048.html
(4) http://www.lachlanstar.com.au/images/121207_LSACMDROMTrialFinalResults2.pdf
(5) http://incakolanews.blogspot.com/2012/12/oceanagold-ogcto-ogcax-runs-big-bought.html
(6) http://finance.yahoo.com/news/oceanagold-completes-bookbuild-equity-raising-235500122.html
(7) http://www.newswire.ca/en/story/1085959/yellowhead-announces-commencement-of-11-000-m-drill-program
(7a)
http://www.presidencia.gub.uy/wps/wcm/connect/Presidencia/PortalPresidencia/Comunicacion/comunicacionNoticias/Lo
renzo-acde-hierro#.UMCXU5VRoew.facebook
(8)
http://www.presidencia.gub.uy/wps/wcm/connect/presidencia/portalpresidencia/comunicacion/comunicacionnoticias/gobi
erno-empresa-zamin-ferrous-aratiri-acordaron-acelerar-proyecto-minero
(9) http://www.radiomaranon.org.pe/archivo.noticias.html?x=8471
(10) http://elcomercio.pe/actualidad/1506607/noticia-canaris-comuneros-suspendieron-huelga-contra-proyecto-minero
(11) http://www.emol.com/noticias/economia/2012/12/03/572770/comite-de-ministros-da-luz-verde-al-mproyecto-
termoelectrico-de-punta-alcalde.html
(12) http://www.aminera.com/mas-noticias-nacionales/45193-rosenblut-requerimos-una-energia-que-permita-
recuperarnos-porque-peru-y-colombia-estan-aprovechando-nuestra-ralentizacion-energetica.html
(13) http://www.mch.cl/noticias/index_neo.php?id=43157
(14) http://incakolanews.blogspot.com/2012/12/guatemalas-siglo21-newspaper-editorial.html
(15) http://peru21.pe/politica/gregorio-santos-no-aclara-denuncias-y-se-victimiza-congreso-2106912
(16) http://blogs.elcomercio.pe/cuidatusalud/2012/12/segunda-recaida-del-presidente.html
(17) http://finance.yahoo.com/news/goldgroup-defers-evaluation-environmental-impact-120000022.html
(18) http://finance.yahoo.com/news/darwin-channel-samples-26-metres-133000427.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
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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
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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