IKN #189Premium

The IKN Weekly
Week 189, December 16th 2012
Contents
This Week: Mailbag.
Fundamental Analysis: Two M&A stories: 1) Inmet and First Quantum 2) Primero, Cerro and
Esperanza.
Stocks to Follow: Overview, Galway (GWY.v), OceanaGold (OGC.to)(OGC.ax), Minera IRL
(IRL.to)(MIRL.L), B2Gold (BTO.to), Lachlan Star (LSA.to)(LSA.ax), AQM Copper (AQM.v), Plata
Latina (PLA.v), Aurcana (AUN.v), Lupaka Gold (LPK.to).
Copper Basket: Overview.
Regional Politics: Overview, Peru: A paper on Shougang Iron provides country FDI insight,
Chile: Chuquicamata pay deal agreement, Chile: Cochilco’s copper forecasts for 2013, Peru:
BCR’s Julio Velarde talks straight, Venezuela: Follow-up notes from last week’s piece.
Market Watching: The “Lottery Ticket Basket” is born, The current climate of selling (ITH.to),
Fortuna Silver (FVI.to) (FSM) at San José, Macusani Yellowcake (YEL.v): A proxy slate being
brewed?, B2Gold (BTO.to): Clues that hint at a blowout 4q12. STOP PRESS: FR.to buys OK.v
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 a mail received Saturday afternoon from reader ‘FL’, along with a link to the chart you
see below. It was written in response to the Chart of the Day post on Friday (1) that discussed
the poor performance of the big tonnage, low grade gold plays up and down The Americas,
namely XRC.to, SWD.to, NG.to and ITH.to
Hi Mark,
Here's another chart:
Your LPK rec (and plenty of others) was even worse - but it must be the
market's that are wrong since the others ones were pumper by bullshitters, not
saints, like you. I like your writing style, but this nonsense is waaaaay
hypocritical.
1

Fair enough. So perhaps I should have made myself a little clearer.
1) The post on Friday and the comments held therein wasn’t about the relative merits of one
stockpicker or another. They were much more about the whole industry machine that revolves
around junior mining in Canada. The promotion of stocks such as International Tower Hill
(ITH.to) began years ago, not just this this month of this year and palmed off massive amounts
of paper to people who were fed optimistic-case only analysis reports from the largest and
supposedly most reputable brokerages in Canada, the USA and other countries besides. I
wasn’t talking about some newsletter writer being bunged twenty grand to write utter bullshit
about Liberty Silver or the the latest in a long line of hopeful scams, but more about things like
this (2), the November 2010 financing run by Canaccord for ITH that grossed over $105m for
the company and paid $3.7m cash commission to the broker. Coincidentally, that placement
came around a plethora of positive reports from the very same brokerage which made a far
more sophisticated case than a classic boiler room pump, simply because the stakes and the
rewards are that much higher.
In mitigation, we note that Canaccord eventually saw the error of its ways and downgraded (3)
ITH from buy to hold. In May 2012.
2) The post on Friday was based firmly and squarely on one subject, that of the multimillion
ounce, low grade bulk gold deposits in The Americas. Now, you may wish to add LPK into that
category (and I think Eric Edwards for one would be happy to see his company added to such a
list) and compared on the same chart, but it didn’t really occur to me in the same thought
wavelength, what with the current 43-101 for LPK at Crucero being a touch under 2m oz gold,
the IKN estimate currently allowing for 2m oz and the most recent remarks from LPK
suggesting a target of 2.5m oz gold or thereabouts for the A-1 zone at Crucero (assuming the
Chaska zones and other zones result in pure dusters). The stocks mentioned on that post are of
a different order of magnitude resource wise, with 43-101 resources of 12m oz and above (in
the case of NG and XRC a long way above), with multi-billion dollar capex bills slated in, too.
They’re also stocks that have attracted a different level of coverage from the sellside instos that
the small and almost totally ignored LPK (I believe LPK has made two soft-coverage watchlists
among all brokerages without ever receiving formal coverage at any point).
3) You may have a different opinion about this (and if so I’ll be glad to get your mails and hear
your point of view), but my opinion is that I don’t try and hide the failings of The IKN Weekly
service from its audience. To begin every trade ever booked is featured in every edition, from
2008 onwards, all the winners and all the losers. Secondly, even when not featured in formal
updates there’s a running commentary on our open positions in ‘Stocks to Follow’ that tries to
keep things up to date, tries not to hide away from the negatives, attempts to keep the
readership informed on my personal current thoughts and opinions of the price action in all
stocks followed, not just SWD, LPK or any other you might wish to mention. Also, calls to sell a
stock and close a position, be they profitable or lossmaking, aren’t so easy to find out there
2

either. This is why I prefer to read people who aren’t afraid to do the same, people such as
Jordan Roy-Byrne, Gary Tanashian, Brent Cook and others. This service tries its hardest to be
real-world, not some Utopian fantasy service that never picks ‘em bad and if it does, just
ignores them and their consequences afterwards. I don’t like picking losers but I won’t shy
away from them either, even if they come in multiple clumps like this year.
4) Anyone who calls me a saint doesn’t know me, period. Professionally, something I do is to
try and make people aware of how the wider game is rigged heavily against the retail
participant. I call them as I see them, won’t catch them all either, but there is a track record in
place and in its own subjective way I think it a consistent one. If this means that, at the same
time as shining light on certain individuals, companies and typical market practices, I am open
to the charge of hypocrite by calling buy on a stock and then seeing the trade fail, then I am
guilty as charged. But please, no straw man claims of sainthood because when push comes to
shove I’m a regular guy trying to make his way, with some good character traits and some bad
ones.
5) Finally, the most important point. I am not the judge on whether The IKN Weekly is a
positive or a negative influence on your own investments, simply because I am not in charge of
your investment portfolios. I’m in charge of mine, know how that’s got on in 2012 and for what
it’s worth, thanks to the heaviest weighted stock RIO performing well, a good sell call in
previously highest weighted stock FVI, a correct decision to wait for the right out price on FVI,
and a better-late-than-never decision to move to more producers and larger market cap
companies on a personal level 2012 will go down as “could have been a lot worse”
notwithstanding the liberal dosage of heavy percentage losing trades booked. I apologize for
getting the bigger calls right but to get back to the real point (the bit that gets underlined
because it’s the real takeaway from all this, you and only you can decide whether The IKN
Weekly brings you value for money and if it does that’s good for both of us. However, if it
doesn’t then I strongly recommend that you unsubscribe immediately and we are able to part
amicably. How you measure that value is up to you, but I sincerely hope the publication is
judged on whether it aids your investment decisions instead of offering entertainment on mere
writing style (I’d recommend you read Steinbeck, García-Márquez or your own favoured author
instead). Or if you stick around because “well, he’s lost me money but at least he seems
honest”, I’d say you’re here for the wrong reasons. If you want to mail in and criticize you can
do that as well, I welcome all correspondence and read it all (even if I fail to reply at times),
but the bottom line is the bottom line: It is up to you to know whether The IKN Weekly is worth
your hard-earned cash and if it isn’t, the solution could hardly be easier.
Fundamental Analysis of Mining Stocks
Overview: I’m deferring the final part of the B2Gold (BTO.to) analysis until next week, firstly
because we’re already in and bought, secondly because the outline of the analysis was
mentioned last week and there’s nothing time-sensitive about the behind-scenes numbercrunch
that’s left to present, but mostly because of events in the market last week that highlight
potential M&A trades and possibilities. Unfortunately events have accelerated faster than
desired on one of them (First Quantum and Inmet) but we still cast our eyes over the deal as
announced today Sunday and consider trade potentials. But the second investment thesis is
very much intact (that of how the Primero/Cerro deal might reflect well on Esperanza Resources
(EPZ.v)) so perhaps more attention on that one than the first.
Full disclosure on the note to come is done here to get it out the way in one fell swoop: No
current position in Inmet, Primero, Cerro or Esperanza, however I still hold the First Quantum
(FM.to) shares received from the buyout of Antares Minerals (ex-ANM.v) back in late December
2010. Those shares were put into the long-term hold portfolio and basically forgotten about.
3

The only direct benefit accrued from FM.to is the approximate 35c/share dividends aggregate
since that time, cash that was not left in the long-term portfolio. Finally, I am considering a new
position in Esperanza (EPZ.v), with no decision made as yet.
First Quantum (FM.to) bids for Inmet Mining (IMN.to)
Today I had every intention of providing a headsup to the strong possibility that First Quantum
(FM.to) would make an offer to buy Inmet Mining (IMN.to). As it happens, events have beaten
me to the gun and a chunky piece of script has been deleted from this week’s edition due to
the release of this NR (4) today Sunday afternoon that announces FM.to is making a $72
nominally cash (but in reality a 50/50 cash/share) bid for its quarry. As this five day chart
shows, the news seems to have been telegraphed already.
Now for more thoughts on today’s developments, starting with a comparative chart of the last
three months of FM.to and IMN.to, along with Southern Copper (SCCO) and the copper ETF
(COPX) as comparatives to show what’s been happening to IMN.to stock since the cautious
courtship between FM and IMN began:
This second chart is the one that FM seems to be basing its bid thesis upon, as at $72
cash/paper there’s nothing much by way of premium left for the opportunists at the ticket price
and unless the market sees the potential for a counterbid IMN’s price isn’t like to move much
come tomorrow. IMN may want to get at least a sweetener offered, but the risk it runs is to
give back all the gains enjoyed since late November, not just the two dollar upmove of last
4

Friday, if FM digs in its heels and says “no more money”. As for the chances of IMN moving up,
the two avenues to explore are 1) a counterbid or 2) a sweetened bid from FM that brings
success.
Regarding the counterbid, so far there hasn’t been much interest from other players and the
recent move by Freeport (FCX) to buy into exploration and O&G looks to have removed one of
the main rivals. Ultra-large companies such as Vale (~$100Bn mkt cap) Rio Tinto (~$100Bn
mkt cap) or BHP (~$200Bn mkt cap) are unlikely to be interested in such a deal. Southern
Copper/Grupo Mexico has its own pipeline and plans. There may be a case for a company such
as Antofagasta (ANTO.L) which has designs on expanding out of its Chile base (as seen by its
exploration programs) or the nebulous concept “Chinese Money”, plus the Cobre Panama
project may be of particular interest to Korean capitals (Kores et al) who have made their
interest in developing in Panama specifically clear over the years, but overall I’d say that at this
point FM.to is the best fit, there’s no other clear rival and this bid is likely to succeed or fail on
its own.
Now for the second consideration and as for a sweetened bid, any speculation on this will likely
be based around this part of the CEO blurb in today’s NR:
“We invite the Board and management of Inmet to work with us in developing our
plans for the future and in assisting in an assessment of whether additional benefits
can be identified to the advantage of all shareholder.”
It’s one of those very carefully worded, poker hand statements that may be construed as a
overture to considerations of a sweetener or may not, but it does at least open to door to
cordial discussions. To the downside it’s debatable as to how much more FM, a ~$10Bn market
cap company would be prepared or able to put into a $5.1Bn offer and also, IMN must be
aware of the risk it might run if (as we suspect) no white knight is on the horizon and FM
decides to dig in and offer no more; the potential downside is perhaps $20 per share.
Overall (and after doing some necessary deletion of written script then walking away from the
computer for half and hour out of frustration for being beaten to the news by the official offer
this afternoon, finally returning with a calmer brain installed) I don’t think today’s news from
FM.to offers much of an arbitrage opportunity to the smaller player, there are downside risks in
both stocks, an obvious counterbidder isn’t clear (though admittedly it’s always possible to get
one from some quarter or another) and even if a sweetener comes, chances are that it’s not
gong to be the size that makes smaller arbitrage plays worthwhile. I’m going to stick with
Galway (GWY.v) as my preferred arbitrage play as the potential gain is still strong (even after
last week’s decent performance from GWY.v stock) while and lack of potential downside takes
away the chances of pain, something that this deal can’t guarantee for the moment.
Primero Mining’s (P.to) friendly merger with Cerro Resources makes Esperanza
Resources (EPZ.v) look attractive.
Setting the scene: Before getting to the meat of this note we need to consider briefly the
catalyst event. The other big M&A news of last week in the LatAm mining space was the deal
announced Thursday morning (5) by Primero Mining (P.to) (PPP), in which it will buy the the
69% ownership of the Cerro de Gallo gold/silver project from Cerro Resources (CJO.ax) (the
minority owner is Goldcorp (GG)) and be a minority partner in the spinco entities that will then
move Cerro’s other assets into new companies and presumably move them forward. The whole
deal comes with a nominal price ticket of $119m, PPP is using its paper and will emit around
18m in news shares, bringing the S/O total of ‘New Primero’ to around 114.7m.
5

Leaving aside the 19.99% interest in the spincos, the real reason for the PPP bid is the Cerro de
Gallo project. What PPP gets for its money (well, it’s paper rather) is 69% of a project that has
a published feasibility study (6) that shows robust economics and a (100% ownership) 1.66m
oz gold and 35.3m oz silver resource (that’s 2.37 moz AuEq at a gold silver ratio of 1:50)
grading 0.67 g/t Au and 14.2 g/t Ag that offers a 14 year mine life and a projected output of
95,000 oz AuEq production (roughly 70% gold, the rest silver and copper) in the first seven
years. In other words, a smallish but reasonably interesting project that will add a meaningful
amount of production to PPP, a company (as we wrote on the blog last week (7)) that’s been
keen to expanding using M&A, has made its intentions clear and is right to move using paper
that is valued up to the hilt right now (in your author’s considered opinion, one that others do
not share).
The reason for today’s article: With the background of the Primero/Cerro deal in place, we
move to the main course and the thrust of today’s note. In the last two years there has been
something of a dearth of M&A action in the junior space (you may have noticed), but there has
been one specific area that’s seen more than interesting action. Here’s a quick list of
acquisitions to make the point:
• Argonaut (AR.to) bought Pediment, owners of a heap leach gold project in Mexico
• Agnico-Eagle bought Grayd, owners of a heap leach gold project in Mexico
• Goldcorp bought Canplats, owners of a heap leach gold project in Mexico
• Now Primero is buying Cerro Resources, owners of a heap leach gold project in Mexico
I trust you’re beginning to see the connection and that’s without mentioning the $1.5Bn
cash/stock that Pan American Silver (PAA.to) (PAAS) paid for Minefinders (ex-MFN) end
2011/early 2012, the producing silver/gold miner at Dolores that ran, yes that’s right, a heap
leach gold operation in Mexico (as well as having a smaller heap leach gold project at La Bolsa
in Mexico).
On news of the Primero/Cerro deal friend, fellow independent anal yst and someone whose
opinion I highly respect, Michael Churchill of Churchill Research (8) and I exchanged thoughts
and opinions on the fallout and consequences, with the above point one of the first on the
table. Now for sure no project or company is ever the same and if you look deeply enough
you’ll always start to compare apples to oranges, but the fact that four of these low grade,
open pit style heap leach gold deposits in Mexico have moved to larger ownership through M&A
while all around us in the junior world deals have not been done and explorecos have been left
to wither and die is hardly a coincidence. Therefore the logical question to ask is “who’s next?”,
where else can we find a company that fits our basic criteria, one that fits into the type of
project being bought, rather than simply looked at and deferred over, by the big (or wannabe
big) mining concerns. There are several potentials, but one that Churchill quickly identified (as
he owns) was Esperanza Resources (EPZ.v), a story and stock I’ve looked at previously but not
for a while. After revisiting in the light of last week’s events, I think Churchill has a very good
argument on his hands and agree that EPZ is a good potential for the next takeover, or at least
upwards revaluation story. Here’s the basic share structure topbox for Esperanza Resources:
Shares out: 78.77m
Options & Warrants: 20.05m
Fully diluted shares: 98.82m
Current share price: $1.34
Market Cap: $105.55m
Approx cash per S/O: $0.58
All prices are in Canadian dollars unless stated. Forex U$1=CAD$1
Now for the story and to begin with, it has the main ingredients that hit all the magic words in
“heap leach gold project in Mexico”, but aside from that there are other reasons to like EPZ:
6

1) Esperanza’s flagship project, Cerro Jumil, is the right size when compared to the recent deals
done. This chart comes from the latest resource update from EPZ (9), dated September 2012:
Notes: regarding the resource:
• The resource totals of 1.64m oz Au (all categories) and 2.02m oz AuEq (all categories
using gold/silver ratio of 1:50)
• The cut-off of 0.3 g/t AuEq and metals prices of $1,200/oz Au and $22.50/oz Ag are
conservative and more than reasonable, this resource is being valued seriously
• We like the stronger than average gold grade, averaging 0.91 g/t M+I with most of
that in the more reliable measured category.
• We also like the fact that most of the resource is gold, rather than gold equivalent. The
style of mineralization is more akin to that of Grayd at La India than Cerro at Cerro de
Gallo, for example.
2) The management roster at EPZ is notable, especially the way in which it has hired personnel
from Minefinders, the heap leach gold play in Mexico (here we go again) bought out by PAAS.
Count amongst managers and officers who have come from Minefinders CEO Greg Smith, COO
Laurence Morris, CFO Kylie Dickson and VP Ops Johannes Miller.
3) Though Cerro de Gallo has the advantage on EPZ at Cerro Jumil in that its project has a
published feasibility study under its belt, the project economics have already been discussed in
a PEA for Cerro Jumil. The current PEA, which considers a mine that will cost $129m to built
(capex plus working cap requirements) and then produce an average of 103k oz Au per annum
at a cash cost of $499/oz, may be a little out of date and we’d prefer to factor in some more
conservative numbers today. But no matter, because a capex of $150m and a cash cost of
$700/oz still makes Cerro Jumil very profitable at $1500/oz gold, let alone $1700/oz. Here’s a
cash flow model at various gold prices:
EPZ.v: Income items for model year
At 103Koz Au/year $1,500/oz Au $1,600/oz Au $1,700/oz Au $2000/oz Au
Sales (U$m) 146.8 156.6 166.3 195.7
Cash COGS 72.1 72.1 72.1 72.1
Depreciation 7.0 7.0 7.0 7.0
SGA 10.0 10.0 10.0 10.0
Op income 50.3 59.6 68.9 96.8
Interest 0.0 0.0 0.0 0.0
Workers Part. 4.0 4.8 5.5 7.7
Tax 13.9 16.5 19.0 26.7
Net income 32.4 38.4 44.4 62.3
Shares out (m) 150 150 150 150
EPS 0.22 0.26 0.30 0.42
Sust capex -2 -2 -2 -2
FCF/sh 0.25 0.29 0.33 0.45
Source: IKN ests
7

If we assume the following...
• Construction fully funded by equity raising to bring total S/O to 150m
• Production of 103,000 oz Au per year
• Cash costs $700/oz
• Reasonable amorts/deprec/G&A/worker participation/tax/etc assumptions
• A gold price of U$1,700/oz
...we arrive at a mine that runs a 30c annual EPZ and using an 8X PE to that we get $2.40 as a
ballpark target.
Alternative valuation: Another way of valuing EPZ would be by comparing it to the done
deals already mentioned and it’s at moments like this that an in-situ valuation can be used
reasonably, as it provides as good a straight line through similar-but-not-similar projects as any
other method. Here are the lines used for our four M&A companies so far.
• Pediment: 2.5m oz gold (with 1.3m oz at the main asset, San Antonio) for $137m
($55/oz in situ)
• Grayd: 3.5m oz gold for $275m ($78/oz in situ)
• Canplats: 4m oz gold eq (3.2m oz gold) for $238m ($60/oz in situ)
• Cerro: 2.37m oz AuEq (1.66m oz gold) for ~$100m estimate after backing out spinco
deals ($42/oz in situ)
If you care for broadstroke averages, the average ounce from those four projects sold for a few
pennies under $60/oz.
We now compare that to EPZ and the top line calculation is 2m oz AuEq for $105.5m current
market price ($52/oz in situ), at the low end of what we see above. However, as usual we
cannot consider apples-to-apples and that’s when things get better for this trade. We estimate
EPZ to currently hold around $35m in working capital (Sept 30 reported working cap $38.5m),
plus 26% of Global Minerals (CTG.v), a stake currently valued at around $11m, if we assume
those as liquid assets it gives EPZ on an share out/EV basis a $29.75/oz in situ for AuEq.*
*Sidebar: We can also run the same numbers but using the fully diluted market cap (98.82m at $1.34 = F/D mkt cap
$132.4m) then subtract the cash, which must also consider the cash that would flow to treasury if all warrants and
options were exercised. That would add $37.4m to treasury so total cash would be $46m +$37.4m = $83.4m. We can
now do the same calc for F/D EV ($132.4m - $83.4m / 2m oz AuEq = $24.5/oz AuEq in situ, even lower than the S/O
price.
The bottom line is that the EPZ ounces are significantly cheaper than even the low grade
ounces held by Cerro de Gallo and less than half those of the Grayd La India deposit which has
similar grade and ballpark operating economics. The deposit size of Cerro Jumil is somewhat
smaller than the others on our list at 2m oz AuEq so some accomodation is made for that, but
seeing EPZ sell for the global average $60/oz in situ would surprise neither myself or anyone
else looking at this company or deposit, which today earmarks a takeover price of $2.70 per
share.
Conclusion
The events of last week, both First Quantum’s move on Inmet and Primero’s decision to make a
friendly bid for Cerro Resources at Cerro de Gallo, shows that there is activity in the M&A space
for companies willing to stick their necks out during these uncertain times. However, the way in
which Mexico located heap leach gold project are being snapped up is particularly interesting
and makes the job of filtering and screening for the next round of likely buyout winners easier.
In Esperanza Resources (EPZ.v) we seem to have a peer play that’s competitively priced in both
cash flow and in-situ valuation terms and that matches all the main criteria for our target
sector. Not only that, but its management team has been bolstered in recent times by people
well versed in both this type of deposit and successful in what a company needs to do in order
to become an attractive target for M&A.
8

However, I’m not a buyer of EPZ immediately. I like the set-up, the comparatives and the value
but when it comes to my personal cash I’m going to wait before making a final decision. The
reasons are:
• The most prosaic is that I like to consider a new investment (as opposed to a potential
near-term trade such as GWY or the very minor cash moved into RML.v last week)
more than 48 or 72 hours before buying. Cooling off periods work for me.
• EPZ is an exploration play and as such, not part of the new preferred direction for The
IKN Weekly. I’m not totally closed to the idea of buying and covering a new exploration
story, but as expressed in September when making the change in emphasis in the
weekly’s covered stocks, any new exploration story mustn’t simply be good be
compelling. EPZ has a lot going for it, but I’m still not sure if it makes it into the
compelling category. Again, cooling off periods work for me.
• I fully expected EPZ to move up last week on the Primero/Cerro buyout news and was
surprised to see its PPS tread water (5
day price chart here). I want to think on
why the stock didn’t move when I
thought it was likely to do so. It might
be connected to the particularly strong
tax selling season this year, in which
case it makes sense to wait at least a
week or two before diving in, there may
be cheaper prices in the near future
Therefore I’ll wait for at least a week, even though the trade appeals on more than one level.
The price looks right and the people look serious, so with another gold heap leach project
bought out, it might be time for EPZ to revalue.
Stocks to Follow
Since last week, seven of our open positions have made price gains (RIO.to, LPK.to, IRL.to,
OGC.to, AUN.v, GWY.v, BTO.to), one has stayed unchanged (PLA.v) and six have lost ground
(VEM.to, LRA.v, LSA.to, USC.to, AQM.v, FCV.v). There were two moves that broke double figure
percentage swings, one up (LPK.to up 11.4%) and one down (USC.to down 14.9%) with most
of the other move smallish.
There are currently 14 open positions, one less than our self-imposed maximum. Five of those
stocks are green, nine are in the red.
9

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$5.13 151.5% $6.29 tgt
Recommends
Vena Resources VEM.to hold C$0.70 31-may-09 C$0.21 -70.0% reason to hold?
Lupaka Gold LPK.to hold C$1.12 23-oct-11 C$0.45 -59.8% holding
Lara Expl. LRA.v buy C$1.15 08-apr-12 C$1.19 3.5% 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$0.85 16.4% $1.56 tg, added, new avg
OceanaGold OGC.to buy C$3.03 16-sep-12 C$3.00 -1.0% $4.56 tgt growth prod
Lachlan Star LSA.to buy C$1.50 30-sep-12 C$1.26 -16.0% $2.23 1st tgt
United Silver USC.to hold C$0.245 28-oct-12 C$0.20 -18.4% new position 60c tgt
Aurcana Corp AUN.v buy C$1.07 11-nov-12 C$1.04 -2.8% $1.50 tgt near term play
Galway Res GWY.v hold C$2.19 24-nov-12 C$2.30 5.0% rb play, v near term
B2Gold BTO.to buy C$3.45 28-nov-12 C$3.62 4.9% $6.00 tgt
Smaller/Riskier
AQM Copper AQM.v hold C$0.31 16-oct-11 C$0.095 -69.4% holding thru for my sins
Focus Ventures FCV.v buy C$0.175 01-jul-12 C$0.16 -8.6% 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.
Galway Resources (GWY.v) This one’s working quite well. The “cash position” arbitrage has
now moved up to the point where it gets changed from a buy to a hold on the sentiment
column and with the December 17th vote now close at hand and a virtual certainty to see the
approval of the deal rubberstamped, GWY is moving through the de-risking gears well. We also
saw the market shrug off that news late on the previous Friday on the BCSC-led disclosure
changes and discussed in IKN188 last week, as it was correctly seen as minor stuff and just
some enhanced, though technically correct, fusspottery from regulatory people (who can’t be
bothered to chase after real scumbags). Therefore the position is 5% up, we’re expecting more
and it’s shaping up as a play we’ll hold into the closure of the buyout and spinco company
listings, as that’s probably the best way to maximize gains.
OceanaGold (OGC.to) (OGC.ax): Target price lowered. Here’s the ten day chart of OGC
which documents better than my words can do its recent weak moment. OGC in its Canadian
1

listing traded as low as $2.81, which was no fun at all to witness at a time when I thought OGC
would be bouncing thanks to the news of the Didipio start-up.
As this ongoing weakness was troubling
(especially on Monday and seeing low $2.80s
printed) I went back to my model to pick fault
with the price target and as a result, I’ve
dropped the target to $4.56 from its previous
$5.34. The main change is to use a lower gold
price of $1.650/oz in assumptions instead of the
previous $1,750/oz as it wasn’t giving any sort
of conservative leeway, but our assumed 300k
oz Au for FY13 is more than conservative
enough and we’re sticking to that. Also, I am still
loathe to change the 10X PE multiple for OGC
and that’s stayed the same, as the thesis is
based on the strong political/social/location risk profile that OGC offers by working in New
Zealand and having cultivated excellent relationships at Didipio (after nearly losing the plot
there a couple of years ago).
Thus we drop our target price somewhat, but it still offers a 52% upside to Friday’s close of
$3.00 (after a decent Friday rally) and is still an attractive investment for those such as I who
see gold maintaining its price deck. The next true catalyst fro OGC will come in January when
we hear about its 4q12 production results from New Zealand and on how the initial stages of
commercial production at Didipio have gone. The actual quarter results will be interesting, but
key will be 2013 guidance at that point and we’ll be looking for a strong one.
Minera IRL (IRL.to): The news last week from IRL was about Bethania (10), one of its
secondary pipeline projects at this time that’s located close to its producing Corihuarma project.
Bethania is a gold/copper porphyry that’s had some work, including drilling, done on it in
previous years without the results showing great, market moving sparkle as yet (the NR has a
drill results table) The NR announced a renegotiated agreement on the property, pooling of
concession areas, a work program that starts in 2013 and three years down the line (if IRL
decides that it’s worth it) a first $1m cash payment to partner Monterrico Metals that would
mark the beginning of IRL getting serious and paying real cash to its partner on further stages
if desired. On asking IRL for a quote re Bethania, here’s what came back from head guy
Courtney Chamberlain:
"This is a large, sulphide exploration play. It is a big system and we are looking for a large
discovery. Initial work is encouraging. It will be different from Corihuarmi but we have the
infrastructure there to facilitate the exploration program. Long term stategy."
In other words, this project should be considered as separate from Corihuarmi and not one that
could eventually add mine life to that oxide heapleacher, however the proximity of Bethania to
Corihuarmi will make logistics easier for IRL, what with no need for a separate camp and et
ceteras to support the exploration program. As for the stock price, it did ok in a difficult week
for the sector and showed signs of bargain hunters moving in at low-80s prices (the better
volume seen in London though).
B2Gold (BTO.to): There’s more BTO below in ‘Market Watching’ because there are a couple of
updated production forecasts with charts that need to be shown and I didn’t want to clutter up
this notes section too much. Here we comment on the latest NR and the market action and with
last Tuesday’s NR (11), BTO underscored that its Otjikoto project in Namibia is its principal
pipeline project. The main takeaway from the NR was news of the the Wolfshag zone, a high
grade shoot not part of the current 43-101 resource that has returned some excellent grades
and widths. Top of the pile was the 19.81m of 15 g/t gold as well as plenty of other wide (10m
to 30m) hits in the 3g/t to 5g/t gold range. As Otjikoto is currently envisaged as an open pit
operation with nearly 1.4m oz gold grading an average of 1.74 g/t Au, this offshoot looks
1

almost certain to be able to add both ounces and improved head grade to the eventual mining
operation.
As for trading, BTO had another
good week and by considering a
ten day chart, we can see the
rebound put in from the previous
week’s lows (our Flash update of
the week before just about
bottom-ticked the recent action) as
well as the pop that the Otjikoto
news afforded. BTO dropped with
the rest on the post-Fed hangover,
but still put in a decent week on
nicely liquid volumes. Happy holder
and now firmly on the right side of
this new trade.
Lachlan Star (LSA.to)(LSA.ax): A soft week, despite LSA delivering positive news on
development at CMD, Chile with the announcement Wednesday (12) that the delivery of its
upgrades in plant equipment had begun. The schedule expects the new trucks, dozers etc (that
link has the full list and even pictures of
the machines) to move into use in the
mmt LSA: Total mined material at CMD, per quarter
first quarter of 2013, but in the meantime 6.5
LSA took the opportunity in the same NR 6
5.5
to inform that LSA had mined two million 5
4.5
tonnes of total material (ore + strip) for
4
each of the past three months using the 3.5
3
current plant, the best results at the mine 2.5
since 2006. 2
1.5
1
0.5
That compares to the last two quarters in
0
the manner seen in this chart (right) and
jun.12 sep.12 dec.12est
although we have no data or guidance on
source: LSA filings and guidance
the current quarter’s waste/ore ratio (the
end June quarter was 3.5/1 and the end
September quarter was 4/1), we’d expect that ratio to favour LSA as the Tres Perlas pre-strip
ratio dropped significantly during the September quarter as the preparations for that orebody’s
production were finalized. This datapoint, along with the NR’s mention of reduced quantities of
explosives used per tonne of rock removed and the upcoming fleet improvements that are now
confirmed as rolling out, all point to LSA
moving well to tackle the big issue at the
mine, that of cash costs.
But as mentioned in line one, LSA did put in
another weak share price performance last
week which racks up about a month of soft
performances (three month chart here)
As there’s nothing particularly wrong at the
company as far as we can make out, the
reason is best-guessed as a combo of the
nerves around the price of gold that show
up in this higher cash cost, higher
leveraged vehicle along with the weak end year performance of the whole mining sector, driven
by tax loss selling (he says, trotting out the best excuse clichés).
1

AQM Copper (AQM.v): We finally received new of the Zafranal PEA from AQM and as
mentioned on the blog when it came out (13) it was better than worst fears. The capex tag of
around $1.5Bn isn’t prohibitive (but the +/- leeway of 35% means that an upper limit of $2Bn is
being set), the IRR at $3/lb copper is attractive (and at the $2.70 base case still acceptable)
and there seems to be plenty of conservative parameters and therefore potential for
optimization baked into the pie. Once I get my grubby little hands on the PEA document itself,
rather than the NR announcing its existence, we’ll take a better look at the project but for the
time being there’s no reason to sell into these severely beaten down prices.
There is however another key issue to consider, and that’s whether or not the 50/50 JV partner
Teck decides to allot 2013 budget to Zafranal in FY13. If it does so that will be a strong positive
signal, but this is a double-edged sword and we wouldn’t want to see Zafranal lie fallow for a
year. We’ll know soon enough but until we do, your author will continue to suffer and hold this
large negative bag.
Plata Latina (PLA.v): Unchanged on the week but there was something to cheer about at
PLA for a change even weakly. The stock has done trading business over five of the last six
days and while hardly massive stuff, the mere fact that it’s trading a little is better than the
near complete radio silence of recent weeks. In fact, the 239,500 shares traded in the last six
days are just 2,100 shares short of the total traded volume of October and November
combined! No, it’s not big stuff and even now the trading is paperthin. But it’s a start.
Aurcana Corp. (AUN.v): Friday brought positive news when AUN announced (14) that
commercial production had been reached at Shafter and the shares popped quite pleasantly on
the news without setting any houses on fire, either.
The company was somewhat selective about the information offered, noting that the plant is
now running at 600tpd (current installed
capacity 1,500tpd) and was no longer
running the low grade test material but
now 100% higher grade U/G ore, but we
weren’t told whether grades were at the
~8oz/t average as per the 43-101 reports
nor did we have any news on the
recoveries, which are projected LoM at
84%. However, the company does have a
right to keep information to itself in these
early stages and my smallish complaints
aside, the news that AUN has arrived at
commercial production on schedule, i.e.
December 2012, is wholly good. We don’t
need to know exactly how and when
Shafter will reach full capacity at the moment because the key point to take away from last
week’s announcement is that AUN now has a true asset on its hands that is producing positive
free cash flow, it is no longer a drain on treasury and a potential problem for liquidity.
Addendum: I’ve previously mentioned the excellent coverage on AUN.v available at the blog
Investment Revaluation Catalyst and this Sunday evening, the blog has added another post on
AUN (happily, the blog author ‘CW’ wrote to tell me about it before IKN189 went to press). You
can find it on this link here (15) and although I’ve only really had chance to read the script and
argument without considering his tables and calculations too deeply, I agree with the thrust of
the post and agree that there seems to be a new strategy unveiling at AUN of not promising too
much (my words in reply to ‘CW’ were “I too was struck by the low key nature of the announcement.
And i like that.”). If the company can now over-deliver, or at least keep up the good work of
delivering on time as it did last week, then this may even turn into a longer-term position.
Lupaka Gold (LPK.to): The +11.4% weekly price move was pleasant to witness, but much
more interesting and positive was the return of traded volume at the same time in LPK, with
1

1.1m shares changing hands on the week and new interest in the stock. If this kind of move
now gets backed up by good exploration news of some type then there’s still hope for this
severely underwater play.
The Copper Basket
After fifty weeks of 2012 The Copper Basket is showing a 50.95%% loss to level stakes.
company ticker price 1/1/12 Shares out Market Cap current pps gain/loss%
1 Copper Fox CUU.v 1.15 398.97 402.96 1.01 -12.2%
2 Augusta Res AZC.to 3.17 144.1 366.01 2.54 -19.9%
3 Lumina Copper LCC.v 13.19 43.2 345.60 8.00 -39.3%
4 Nevada Copper NCU.to 5.18 72.8 240.24 3.30 -36.3%
5 Western Copper WRN.to 1.58 93.28 74.62 0.80 -49.4%
6 Baja Mining BAJ.to 0.80 338.5 37.24 0.11 -86.3%
7 Candente Copper DNT.to 0.97 121.67 35.28 0.29 -70.1%
8 Yellowhead Min. YMI.to 0.80 52.82 33.28 0.63 -21.3%
9 Regulus Res REG.v 1.24 99.88 27.47 0.275 -77.8%
10 Duran Ventures DRV.v 0.18 184.72 17.55 0.095 -47.2%
11 Excelsior Min MIN.v 0.63 56.12 14.03 0.25 -60.3%
12 Catalyst Copper CCY.v 0.08 274.48 10.98 0.04 -50.0%
13 AQM Copper AQM.v 0.39 105.6 10.03 0.095 -75.6%
14 Strait Minerals SRD.v 0.150 56.86 5.12 0.09 -40.0%
15 Crazy Horse CZH.v 0.35 64.48 4.84 0.075 -78.6%
Portfolio avg -50.95%
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.
1

Just five basket stocks made week-over-week gains (LCC.v, AZC.to, DNT.to, MIN.v, CZH.v),
while two others were unchanged (WRN.to, SRD.v). That leaves eight stocks that dropped
(CUU.v, NCU.to, BAJ.to, REG.v, YMI.to, AQM.v, DRV.v, CCY.v) with the worst percentage
performance from Catalyst Copper (CCY.v down 20.0%) and the best from Crazy Horse (CZH.v
up 15.4%) and Augusta (AZC.to up 11.4%). And another new 52 week low.
Over at the macro, copper prices
traded in a fairly tight range in the high
$3.60s per lb, with the US economic
data affecting company share prices
more than the metal’s fluctuations. As
for inventories, the world number went
up a chunk 5.1% (26,313mt) to stand
at 538,570mt this weekend. The LME
saw the biggest uptick in stocks
(+6.9%), with Shanghai up 3.7% and
Comex up 2.2%. As for cancelled
warrants, that indicator improved a
little at 13.99% of copper under LME
inventory. Still pretty low, however.
Cancelled Warrants at LME, IKN157 to date
35%
30%
25%
20%
15%
10%
5%
0%
1
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 981NKI
source: Cochilco, LME
rof
yrotnevni
EML
%
latot
yreviled
resu-dne
20% Copper Basket 2012 average, weekly
15%
10%
5%
0%
-5%
-10%
-15%
-20%
-25%
-30%
-35%
-40%
-45%
-50%
-55%
The last item today is a last call for suggestions as components for The Copper Basket 2013.
I’m just about there and happy with the exits and entrances for the new basket next year,
some of the above names will stay, some (especially down at the tinysmall and “broken stock”
end of the list) will leave, some new names make their debuts, but I’m still open to
improvement and potential names so if you know any particular copper junior exploration
company you think worthy of inclusion (note, main metal copper and no production cashflow
please) feel free to mail it in. The new list gets unveiled in the holiday-shortened edition due
out Sunday December 30th.
No comments on basket stocks this week, as this year winds down, the new basket takes shape
and a lack of anything particularly newsworthy happens amongst our names..
Regional politics
Next week we’re running our quarterly Regional Risk update. This week just a couple of
updates on specific events.
Peru: A paper on Shougang Iron provides country FDI insight
Your author offers this link (16) (or this one to reach abstract-plus-link page (17)) to a 27 page
paper entitled “Chinese Investment in Peru: A Comparative Analysis” dated December 2012 and
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
%

written by Amos Irwin and Kevin P. Gallagher and published by The Working Group on
Development and Environment in the Americas (thanks to reader ‘CS’ for the forward).
The main part of the investigation centres on examining whether Shougang deserves its poor
reputation with its workers, local community and general public opinion in Peru and the
empiricals are tested by comparing Shougang to three other large mining concerns in the
country, namely Antamina, Yanacocha and Doe Run. With the investigation work done
conclusions are reached and then the argument is expanded to consider other aspects of the
mining industry in Peru. Below is one segment that probably most directly relates to The IKN
Weekly audience, but you are strongly recommended to download and read the whole paper if
the subject of political risk, community or worker relations in Peru mining is of interest to you as
it’s a very good and informative report. Here’s the chosen extract.
Shougang’s Lessons for Peruvian Mining FDI
There may not be any clear lessons from Shougang that apply only to Chinese
companies, but there are certainly lessons that apply to Peru’s mining FDI in general.
First, the improving regulatory framework has helped to keep companies honest.
Kotschwar et al. conclude that the progress of the national regulatory framework has
forced companies to improve their social and environmental impact. (Kotschwar, Moran
et al. 2011) Many commented on the regulatory system’s positive impact on Shougang.
An NGO leader maintained that today, “new legislation and better regulation have
forced the company to make adjustments to survive.” (NGO Official 2011)
Second, while the Peruvian regulatory framework has improved greatly since the
1990s, two salient labor issues are subcontractors and government resolution of union
negotiations. Since MINEM and MTPE have not agreed on the appropriate use of
subcontractors, their conflict leaves unions, mining communities and NGOs outraged at
the widespread outsourcing of what used to be decently-paid company jobs. Second,
MTPE, which is supposed to be the ultimate mediator in union-company disputes, is
not an effective mediator because locals see it as being in league with the companies.
In Shougang’s case, the unions point out that regional office of MTPE ignores the
union’s list of demands and simply forces the company to give a slightly higher raise
and onetime bonus. (Shougang Union Delegation 2011)
Finally, the underlying problem facing all mining companies in Peru is the population’s
lack of confidence in the government ministries that regulate these companies. Unlike
workers, nearby communities often have no stake in the mining operations. When they
feel that a company is damaging the environment, they attempt to shut down its
operations. These communities do not trust the environmental impact evaluations, third
party audits, or other inspections that private consulting firms prepare for MINEM. At
the same time, local government and community officials have no means of
challenging problematic mining operations. The government must give these
communities a potent legal channel through which they can air their grievances. While
community accountability will result in the end of some mining concessions, it is
necessary to provide this avenue inside the system rather than forcing citizens to take
matters into their own hands.
Chile: Chuquicamata pay deal agreement
Reuters reports this weekend (18) that workers at the Codelco copper mine Chuquicamata have
overwhelmingly agreed to accept the 2013 pay rise offer of 3.7%, with 88% agreement coming
after semi-formal “pre-talk” stage. This is a good thing all round, will apparently put the
average annual salary for workers at the mine at U$42,000 per year and before you ask, yes
that’s a very comfortable middle class salary even in the most expensive country in South
America.
Chile: Cochilco’s copper forecasts for 2013
This note, directly translated from Chile’s bizmedia publication Estrategia (19), brings you the
potted version of the forecasts from Chile’s metals overseeing body, Cochilco.
Copper industry market prices and costs of production will remain high in 2013
1

The executive vice –president of Cochilco, Andés MacLean, said that for 2013 copper was forecast at an
average price of U$3.57/lb and that costs of production would continue to be high, mainly due to the
energy price component.
MacLean called 2012 a positive year for the copper industry and said that, “finishing with an average price
of $3.60/lb is very good, independent of the fact that it was over $4/lb last year. With $3.60/lb we stay
above the long-term average price.”
The main reason to account for the continued high values for copper is the growing importance of demand
in China and the stability of its GDP growth rate. “Currently it has moderated to around 8% annual GDP
growth, but it is still a very good growth rate. We forecast that in 2013 it may be a little lower, but we’re still
talking about a rate around 7.5%. Therefore China as a customer for copper will continue to be very
important in 2013”, he said.
Finally, MacLean said that one factor that needs to be taken into consideration are warehouse inventories
of copper. Regarding this he said, “This year we are projecting there will be a supply deficit to the market
of 200,000 tonnes. For 2013 we project a very small deficit of 30,000 tonnes, that’s to say that supply will
almost be the same as demand.”
Peru: BCR’s Julio Velarde talks straight
I like Julio Velarde, president of Peru’s Central Bank (BCRP), and have never hidden that fact.
On Friday (20) he gave another example of why he’s a cut above the the average in South
American circles. After the BCRP quarterly Inflation Report presentation Velarde took questions
from the assembled audience and on the subject of mining, he noted he the Central Bank
project for mining investments for the period 2013 to 2014 is now $15.025Bn, down $2.844Bn
from the previous quarter’s forecast. Said Velarde (translated)
“A number of projects are delayed, in some cases due to a lack of community
agreement, in other cases for delays in environmental permitting, and in other due to
the uncertainty as which projects are affected by the mandatory consuntacny for
indigenous peoples.”
“They are delays, fortunatley it’s not that they are being postponed indefinitely in the
majority of cases. These are projects that will move forward, except that instead of
starting in 2013, they will start in 2014 or 2015.”
And with delays to mining projects firmly in mind, Velarde then changed gears and talked about
macro growth dynamics, which is where the message becomes interesting.
“We are growing at (an annual GDP growth rate of) 6.3% this year, we hope, which is
an impressive figure. It’s by far the highest (growth rate) in South America, we’re
followed by Chile at 5.5% and we see several impotant countries growing at a lower
rate than us. We’re going to grow faster than India (this year).”
The middle class is growing strongly and not only in the cities, but also in towns of
2,500 people where we’re beginning to see veyr good dynamism, the agro sector even
in the Andean upland regions has been growing strongly. We see an emerging middle
class that has been the principal factor in growth for countries all over the world.”
Therefore take heed, ladies and gentlemen of mining. Even though mining projects are being
delayed in Peru, sometimes due to conflict, more often due to slow bureaucracy and permit
expedition, the country is growing well even in the areas where mining projects can most
positively and directly affect the economic wellbeing of Peru, out in the sticks where poverty
used to reign unchecked.
Venezuela: Follow-up notes from last week’s piece
Yet again this subject sits astride “Regional Politics” and “Market Watching”, though today we’re
filing it as more political than financial. Following on from our note of last week that outlined
the Chávez cancer situation and make the case for Rusoro (RML.v) as a trading play, here are
notes on developments, both on the political side and on the Rusoro trade.
1) First the financial consequences and bonds rallied hard on Monday as expected last weekend
and as noted on the blog (21). Here’s an extract:
1

“...yield on the government’s dollar bonds due 2027 plunged 70 basis points, or 0.70 percentage
point, to 8.66 percent at 8:40 a.m. in New York, the lowest since November 2007, as traders
anticipated a new administration taking office and courting the investment Chavez drove away.
The bond’s price soared 5.77 cents to 104.87 cents on the dollar...”
Yes indeed verbs such as “plunge” and “soar” sum up sentiment well.
2) I bought some RML.v shares as stated and got them at 5c. As this is a very small trade and
also a “side bet” that will not be part of the formal ‘Stocks to Follow’ list , don’t expect running
commentary on this company or position.
3) It was noted by one mailer, reader JB that RML has a negative working cap position. JB
wrote (slightly edited):
May I suggest you to look at the last quarterly financial statements of Rusoro which
shows a negative working capital of 150M$? Perhaps it is a speculative buy but
take into consideration that after a potential capital restructuration there will be
Zillions of shares. Then you are right the stock may go up from 0.05¢ to “x” cents
but I am not sure that is a good idea to suggest to your subscriber to invest in a
junior company with so much debts without mentioning this facts?
To which I replied to JB:
It's a pure spec momo trade, I think I made that clear and also said that the
company is all about its arb hearing.
On consideration I might not have been as explicit as possible about the precarious nature of
the books at RML, but even so this is mos definitely not a play that’s based on fundamentals.
This is all about the potential reaction to the bowing out of Chávez, which in theory at least
would bring speculators in looking to buy up cheap shares in any manner of Venezuela
exposure. As the old saying goes, equities are the small glimmer of hope that lies between
assets and liabilities on a balance sheet, so even if the numbers on a balance suggest that the
equity is financially negative the hope factor can give them monetary value when hard-nosed
present evidence suggests they be worth straight zero.
Moving on to medical matters and Chávez had his surgery as expected early this week. Major,
six hour general anesthetic procedures that are extremely taxing for anyone let alone a 58 year
old man that has just suffered a relapse of a malignant cancer, so his “stable” and then
“improving” status check post-op are just about the best that anyone could expect under the
circumstances. However, the seriousness of the procedure rammed home to many observers
that the chances of him making enough headway in order to take his re-election oath on
January 10th 2013 are not great and the talk is now much more about whether a snap election
with Nicolás Maduro as officialist candidate is now very much the centre of analysis.
I believe that if a snap election were called, Maduro would win it. Even so, I’m game about
making my small and highly speculative play in RML because the whole situation from now until
January at the very least (and probably beyond Jan 10th) will likely be very dynamic, with plenty
of mood swings in the pro and anti Chávez camps. Also the likely win that Capriles is about to
register in the Miranda State governor’s race today (preliminary results should be available later
tonight) will strengthen the hand of the Chávez opposition.
Market Watching
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The “Lottery Ticket Basket” is born
It started as a short-ish piece and in IKN187, just two weeks ago, that examined the idea of
investors putting together a “lottery ticket” portfolio, the theory being that there are a mass of
nastily beaten up tinycap plays now selling for pennies and if 2013 sees a turnaround in
fortunes, there are names amongst the lowest rung of juniors that could offer big percentage
wins. The strong response from readers about that note surprised me and from that, IKN188
last week floated the idea that the Weekly could run a “Lottery Ticket Basket” in 2013, with
names specifically chosen from amongst the beaten up companies and tracked during the year.
Once again support came for the idea so after consideration, I think we’re going to do this as
an experiment as see how it gets on. Here are some rules cooked up to date:
• The basket will run along the lines of our regular feature, ‘The Copper
Basket’, with fifteen names that are set to their price as at December 31st 2012 and
tracked throughout 2013.
• Any chosen stock will have a maximum share price of 20c and a maximum
market cap of $20m. This, for example, excludes names already considered such as
Radius Gold (RDU.v) on Friday’s 23c close or Calibre Mining (CXB.v) through its $37.6m
market cap. Although others may consider these more than small enough, I really want
to concentrate on the überdog end of the market and so those somewhat arbitrary
limits are imposed.
• Each stock should be considered as a very high risk gamble and any investment
made should be clearly understood as having the potential of going to zero. All these
‘lottery tickets’ will need their own slices of good fortune in order to make progress, not
just a general sector rebound and improved scenario.
• The names chosen are not repeat not, underscore not recommended buys
unless mentioned in the separate and formal ‘Stocks to Follow’ list of The IKN Weekly,
but chosen as representative. However and on consideration (and as per the thought in
IKN188) I will personally buy a very small amount of each stock if only to help the
vetting process and the decision of which stocks to include. With a bit of skin in each
game I’ll need to exercise at least a modicum of good sense and weed out suggestions
for stocks that aren’t just high risk but truly broken into pieces. It’s worth noting that
there are a couple of names that I already own too, that’s my own problem.
• At this time, and without adding any further names to the ones mentioned in IKN187
and IKN188, we have thirteen names on the list of potentials. They are Bellhaven
(BHV.v), Macusani Yellowcake (YEL.v), AQM Copper (AQM.v), Firestone Ventures
(FV.v), Netco Silver (NEI.v), Rio Cristal (RCZ.v), High Desert Gold (HDG.v), Glass Earth
(GEL.v), Aguila American (AGL.v), Marlin Gold Mining (MLN.v), Darwin Resources
(DAR.v), Cream Minerals (CMA.v).
• I am interested in further suggestions to that list, so fire away. There have been
a few more put in during the week, for example Aura Silver (AUU.v) was mentioned as
a possible and along with the idea, reader GG wrote this (extracted): “....is this stock a
lottery ticket or a complete pig with no hope?” . Well GG it might be both, but that’s
really the idea behind this list. We’re down amongst names that are located the end of
the market where Saint Jude Thaddeus, patron saint of lost causes, resides. When
you’re rummaging through the 5c and 10c stocks you’re not allowed to get too picky. A
little picky perhaps, but not too bad.
And that’s just about the way things stand right now, ladies and gentlemen, as our somewhat
secondary musing of just a couple of weeks ago has snowballed into an idea that will be carried
through 2013 on these pages. It’s obviously an idea that still need to be fully solidified and
there’s room for tweaks and changes, so if you have suggestions on names or even criteria that
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the basket can use, I’ll be happy to take your mails. We’ll start the ball rolling on the finished
list in IKN190, December 30th.
The current climate of selling (ITH.to)
I haven’t liked the company or its project for years, but that’s not the point being made today
as it matters not what I think of International Tower Hill (THM) (ITH.to) and its Livengood
project on an overall basis, what last week showed was that the market will take any chance to
sell and take money off the table. The news (22) concerned the rather delayed results of
metallurgy test work for the Livengood project and, quite frankly, it was good. It didn’t have
data on reagent use, but the main message, summed up in this sentence...
“Metallurgical studies have determined that the gold recovery for the four key rock
types that comprise the majority of the Livengood Gold resource will range between 77
and 88 percent.”
...should have allayed fears and given proponents plenty to cheer about, as those as in the
upper range of initial expectations. And indeed the stock rallied well on Tuesday on the pre-bell
news as seen in the price chart. However we also see the pop as short-lived as the market took
the opportunity to either sell out of
losing positions or take quick trading
profits and come Friday, the big 10%+
gains on the met news were all but
wiped out.
This is the state of our market today, as
solid good news isn’t much more than a
selling opportunity even for stocks that
have been heavily battered throughout
the year and now sit deeply discounted
(see the ITH longer term price chart in
today’s intro for more). Your author can
only hope, with the verb hope carefully
chosen, that the end of the tax-loss
selling season in just a couple of weeks will mark the end of the sell-at-all-cost attitude.
Fortuna Silver (FVI.to) (FSM) at San José, Mexico
There has been an uptick of protests around the San José Mexico mine of FVI in the last week,
mostly due to the arrest last week of one of the anti-mining group connected to the death of
local government officials in 2010 (a good and detailed report in Spanish here (23), about the
best single note on the subject I’ve read and without editorial bias on either side and it also
points out the arrest is not about the other recent murder of anti-mining protester, Bernardo
Vásquez Sánchez, in Mach 2012). It’s a situation I’ll continue to monitor closely but at the
moment it’s fair to say that the protests are a minor nuisance at worst to FVI at San José,
there’s no reason to expect stoppages or delays to the mine and it would take an escalation of
protests to make a difference to the operation. That’s not to say things are great in the
environs of the mine, because there’s a significant faction of locals still strongly opposed to the
mine, but for the time being (and like I say, the key will be to keep an active monitor) there’s
no real reason to stay away from FVI as an investment option due to any political or community
risk at San José, if you currently hold it or are considering it as a potential purchase.
Disclosure: No position in FVI at present
Macusani Yellowcake (YEL.v): A proxy slate being brewed?
It’s this thing I have about the late Friday evening news releases. Last Friday saw this intruiging
NR hit the wires (24) at 7:42pm, the body of which is shown here:
TORONTO, ONTARIO--(Marketwire - Dec. 14, 2012) - Macusani Yellowcake Inc. (TSX
VENTURE:YEL)(FRANKFURT:QG1) ("Macusani" or the "Company") announced today
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that it has adopted an amendment to its by-laws, similar to by-law amendments and
policies recently adopted by a number of other Canadian public companies, requiring
advance notice to the Company for nominations of directors by shareholders other than
through a requisitioned meeting or by way of a shareholder proposal pursuant to
applicable corporate laws.
The by-law amendment is not intended to discourage director nominations but rather to
facilitate orderly and efficient meetings at which directors are to be elected and to
permit shareholders to register an informed vote by allowing them to receive sufficient
information with respect to all director nominees and reasonable time for appropriate
deliberation.
In essence, what that means is that the current management and board of YEL.v are a bit
worried that some sort of proxy slated is being cooked up by dissidents or potential suitors, so
the new by-law is a “put up or shut up” call to those who might want to take over the show.
The thing here is that we’ll know soon if there’s any substance behind it, as the YEL AGM is
scheduled fro January 28th and any items for the agenda need to be submitted by December
17th, i.e. tomorrow Monday.
YEL is the tinycap uranium story at the Macusani plateau of Peru, with around 7c/share in cash
covering its 11c current share price. It’s recently seen its prevous cEO leave (and by way of full
disclosure, it’s also a stock that I played as a personal “sidebet” type spec buy earlier in the
year, but to no avail and I sold the small position later at a loss). More importantly for the
terms of today’s piece, it has had in its time bigger fish frying its shares, including John Tognetti
of Haywood and Sheldon Inwentash of Pinetree, names that have the gumption and enough
share skin in the game to potentially want a change at the top. We mentioned it in the last
couple of weeks as a potential name to include in the “lottery ticket” basket that’s looking more
and more likely to happen, so any news in the next 48 hours will be of more than simple
academic interest. One to watch out of one eye for the next two days, though come next week
and no news of agenda additions this might become a zero story.
B2Gold (BTO.to): Clues to suggest a blowout 4q12
The pieces of evaluation of the main BTO assets has been deferred due to the M&A analysis
featured this week, but there is something that’s little more pressing to discuss as regards
B2Gold (BTO.to) because it’s about the potential for stronger than expected 4q12 production
results, stronger than even your author is currently assuming. We might have as much as
46,500 oz gold sold by BTO in the current quarter, which is a lot higher than the 39,668 oz sold
in 3q12. The main reasons are:
1) BTO seems to have held back nearly 3,000 oz of Libertad production in 3q12 and as the
company did the same kind of holdback to boost 4q11 revenues this time last year,
may be about to surprise the market again.
2) During a meeting last week with the Unión Nicaragüense de Responsabilidad Social
Empresarial, Omar Vega, the general
manager of BTO at Libertad, told his
Gold production at Libertad, per qtr
audience (25) that the mine would 32000
produce 110,000 oz of gold in 2013. 30000
28000
If we take that number at face value
26000
and assume BTO produces exactly 24000
that number, it means that BTO has 22000
20000
to produce 31,178 in 4q12. This chart 18000
shows how 31,000 oz of gold 16000
14000
production at Libertad (we round
down slightly) would stack up against
previous quarters
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01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 tse21q4
OzAu
source: BTO data, IKN ests for 4q12

But then if we add the apparently held back 3q12 gold ounces and assume they get sold during
4q12, here’s how 4q12 sales compare to previous numbers and to the type of increment we’re
expecting from BTO as the Jabali vein production kicks in during 2013
BTO: Gold sales at Libertad/Limon, per qtr
55000
50000
45000
40000
35000
30000
25000
20000
15000
10000
5000
0
2
01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 tse21q4 tse31q1 tse31q2 tse31q3 tse31q4
OzAu
Limon Libertad
source: BTO data, IKN ests for 4q12 and FY13
In round numbers, we may see BTO post production of as much as 46,500 oz in 4q12 if (repeat
if) the statement of Omar Vega turns out to be accurate and if BTO sells all its wares, including
the 3q12 lag. This would add at least $3m in extra earnings to the company, pleasantly surprise
the anal ysts that cover the stock and generate plenty of positive commentary. We should know
in mid-January whether this is the case, but for the time being I’m not going to alter my official
guidance upwards, preferring to get a pleasant ‘surprise’ myself come the day.
STOP PRESS: Another M&A deal announced this evening, as First Majestic has reached a
friendly deal with Orko Silver (OK.v) in an all paper deal with a ticket price of $379m (26). If
taken at face value (FR.to share price is likely to drop slightly tomorrow on this news, but a
$380m deal compared to its $2.2Bn market cap should make too much of a dent) and then the
222m all categories silver resource at the OK.v La Preciosa project is also assumed the accurate
number (leaving aside minor gold credits), that values the in-situ resource at $1.70/oz. What is
left to discover is how the capex that would be needed to build a large, open pit (OK.v calls its
plan a ‘superpit’) silver mine will weigh on FR.to’s balance sheet.
I cna’t say I like the deal and my first reaction on seeing it was “Oh look, another reason why I
shouldn’t buy FR.to stock” (aside from its overvalued share price at the moment, that is) but in
the end I’m just a guy with a spreadsheet and an opinion, one that’s known to be wrong on
(more than one) occasion ☺. What this deal does do is reinforce the trend of deals now starting
to be done. That all by itself, is a strong bottom indicator.
Conclusion
IKN189 is done, we close with bullet points:
• Esperanza Resources (EPZ.v) fits as the type of project that’s popular among the larger
precious metals mining companies, or at least in the case of Primero (PPP) the
companies that want to be larger. EPZ has the chops to make it on its own and become
a producer too, thanks to the strong team it has assembled, but either way the stock
get revalued upwards on a ceteris paribus basis.
• Does the ‘stop press’ news tonight about FR.to buying OK.v make a difference to the
potential of EPZ.v as a takeover play? Does it bring these explorecos even more into

play? Well yes, could be, but I’ll still give myself some cooling off time before coming to
a decision on whether to buy a brand new exploreco for the list.
• Next week we run our quarterly regional risk update, but this week all the political
headlines in South America continue to be made by Venezuela and at this juncture, it
looks like a very tight timeline for Chávez if he wants to be in conditions to re-assume
the presidency on January 10th. Put me down as one expecting a new election.
Meanwhile, the very latest from Venezuela (stop the stop press?) is that Capriles has
won Miranda with 50.35% of the vote, while the Chávez government party, the PSUV,
has won at least 19 of the 23 regional state races, with one still undecided. In other
words, results much as expected and now all eyes on any decision made regarding Jan
10th.
• Our new BTO position has begun well and if the assumptions behind the 4q12
production turn out to be true, the next few weeks may be the last time we get to buy
the stock at under $4, gold price shenanigans permitting of course. That pumpy and
bullish enough for you?
• If you have suggestions for the now planned “Lottery Ticket Basket” that will run in
2013, or any last minute ideas for changes to The Copper Basket, feel free to write in
to the usual address. Criticisms of the service also welcome, too.
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://www.incakolanews.blogspot.com/2012/12/chart-of-day-is_14.html
(2)http://www.ithmines.com/news/2010/index.php?&content_id=220
(3) http://www.benzinga.com/analyst-ratings/downgrades/12/05/2590309/canaccord-downgrades-international-tower-
hill-mines-from-bu
(4) http://news.yahoo.com/first-quantum-minerals-announces-intention-180212600.html
(5) http://finance.yahoo.com/news/primero-acquire-cerro-del-gallo-130217525.html
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(6) http://www.cerroresources.com.au/index.cfm/linkservid/6E5CE845-0D8E-3B1A-72F6A867E1BD2BF9/showMeta/0/
(7) http://incakolanews.blogspot.com/2012/12/primero-pto-ppp-shares-will-drop-on.html
(8) http://www.churchillresearch.com/
(9) http://www.epzresources.com/pdf/Resource%20update%20working%20FINAL%20sept%2010.pdf
(10) http://finance.yahoo.com/news/minera-irl-announces-renegotiated-agreement-070000763.html
(11) http://finance.yahoo.com/news/b2gold-corp-announces-positive-exploration-124500225.html
(12) http://www.lachlanstar.com.au/images/121212_LSA_CMDTruckFleetDelivery_FINAL.pdf
(13) http://finance.yahoo.com/news/aqm-copper-releases-positive-preliminary-120000953.html
(14) http://finance.yahoo.com/news/aurcana-announces-commercial-production-shafter-130000263.html
(15) http://www.investmentrevaluationcatalyst.com/2012/12/aurcana-commercial-production-at.html
(16) http://ase.tufts.edu/gdae/Pubs/rp/DP34IrwinGallagherDec12.pdf
(17) http://ase.tufts.edu/gdae/WorkingGroup_FDI_China_Peru.htm
(18) http://noticias.terra.com.mx/mundo/america-latina/trabajadores-mina-codelco-chile-aprueban-contrato-anticipado-
sindicato,c9e1279cbc99b310VgnCLD2000000ec6eb0aRCRD.html
(19) http://www.aminera.com/mas-noticias-nacionales/45331-2013-continuara-con-precios-y-costos-de-produccion-
altos-en-la-industria-del-cobre.html
(20) http://elcomercio.pe/economia/1509724/noticia-bcr-us2844-millones-inversion-minera-no-entraran-2013-2014
(21) http://incakolanews.blogspot.com/2012/12/the-respected-world-of-finance-takes.html
(22) http://finance.yahoo.com/news/international-tower-hill-announces-positive-130000334.html
(23) http://www.noticiasnet.mx/portal/oaxaca/roja/accidentes/128842-cae-homicida-del-edil-san-jose-del-progreso
(24) http://finance.yahoo.com/news/macusani-yellowcake-adopts-amendment-laws-004223724.html
(25) http://www.elnuevodiario.com.ni/economia/272079-aumenta-extraccion-de-oro
(26) http://finance.yahoo.com/news/first-majestic-announces-friendly-acquisition-235547435.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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