IKN #197Premium

The IKN Weekly
Week 197, February 10th 2013
Contents
This Week: Power flash-floods and ensuing thoughts, You are told to buy at all times (not just
now).
Fundamental Analysis: AQM Copper (AQM.v), Buying Marlin Gold (MLN.v) for a near-term
trade as long as conditions are right.
Stocks to Follow: Overview, USA Graphite (USGT), Minera IRL (IRL.to)(MIRL.L), Gold
Resource Corp (GORO), B2Gold (BTO.to), Lara Exploration (LRA.v), Lachlan Star
(LSA.to)(LSA.ax), United Silver Corp (USC.to), OceanaGold (OGC.to)(OGC.ax).
Copper Basket: Overview, Candente Copper (DNT.to), Copper Fox (CUU.v).
The Lottery Ticket Basket: Overview, Gryphon Gold (GGN.to), Eagle Star (EGE.v), Firestone
Ventures (FV.v).
Regional Politics: Mexico: The Peña Nieto government’s mine tax plans begin to take shape,
Colombia: Drummond exports halted by government for environmental infraction, Peru:
Arequipa declared under state of emergency for rain, Peru: A report on Yanacocha’s pit
expansion plans, Dominican Republic: The four month permit country, Guatemala: A growing
problem with El Salvador over a mine project and a good overview of the country’s political
situation.
Market Watching: A few words on Belo Sun (BSX.to), More on Sunward Resources (SWD.to),
OceanaGold (OGC.to) (OGC.ax): Differing reports on Didipio.
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
Power, flash-floods and ensuing thoughts
A pleasant Sunday afternoon blackout is the reason this edition is arriving late to your mailbox
today (yes I know,getting to be a bad habit, next week it’ll be “please sir the cat ate my
homework”), though for more on the infrastructure fun and games happening here we offer
“Peru: Arequipa declared under state of emergency for rain” in ‘Regional Politics’ below. Three
months worth of rain fell on Friday, according to the latest from the national weather people at
least and early estimates (1) are of 48,000 people affected with the clean-up operation is
scheduled to cost 270 million Nuevos Soles (about U$110m) (2). Knowing this regional
government, it won’t be finished by the time the next rainy season is with us in 2014, but that’s
me just griping. By the way, as is often the case it’s the lower socio-economic strata that get hit
the hardest, as much of the damage was caused when dry river beds that have been dry for
literally decades suddenly filled up with flash-flood rainwater dumped on the local mountains
above your author’s house. Therefore, many humble dwellings built right next to (or foolishly,
even inside) the dry bed valleys (known locally as ‘torrenteras’, which would translate
accurately as ‘torrent channels’ and should have given anyone setting up house next to one
food for thought...but hey, 20/20 hindsight and all that) saw their houses and life possessions
washed away and deposited into the Pacific Ocean about 200km downstream.
1

Arequipa Friday afternoon
I know I’m a lucky man compared to the people around me, with a nice place to live in a safe
(though nothing fancy) neighbourhood that suits us well and more money (which means better
choice and time options plus better education for my children more than drooling, Scrooge
McDuck-like, at bank balances) than the average citizen. What often strikes me when reading
English language reports of the ‘Peru Economic Miracle’ and how the country is bounding
forward in terms of development and wealth is to wonder just how many of the writers make it
out of the swanky and very comfortable barrios in upscale Lima and try to reconcile their
theories with neighbourhoods like the ones swept away that are...perhaps were is more
accurate...about 3km from this very office. I’m not saying that Peru isn’t making good progress
as a country, but I am saying that the truth is far more nuanced than you’ll ever get from a
news report or a set of statistics. Isn’t that always the case, though?
You are told to buy at all times, not just now
Before the lights went out I spent a part of my Sunday morning carefully reading Gary
Tanashian’s latest edition of Notes From The Rabbit Hole #225. As you probably know I hold
Gary’s work in very high esteem (for what it’s worth I think you should subscribe to his service
ahead of The IKN Weekly, especially if you’re after smart big-picture guidance on our wild and
whacky market world) and you may also know, because I’ve mentioned it here a couple of
times, I normally wait until the Weekly is out the door before reading his missive but
occasionally read his first. Anyway this week I decided to kick back for half an hour and read
somebody else instead of writing and it was yet another very good edition and thoroughly
enjoyable, brain-stimulating read, but I want to quote just one small block of his prose because
it set me thinking (and writing paper and pencil notes this afternoon in true old-school style).
By the way, no permission has been sought to re-print this because it’s small and it’s now also
very late at night. Bite me, Gary.
“Newsletter writers are bulling the stock rally and appearing very right for now. There is
evidently a pressure to appear right in this industry. It has something to do with
subscriptions, they tell me.”
That’s true, but for my money it’s incomplete and here follows the rant. Newsletter writers are
just one aspect of the sell-side industry, but before we go on just because these words happen
to be written in a Weekly newsletter it doesn’t mean (!!) that I’m suddenly sticking up for all
and sundry in the sector. This is, after all, the publication that continues to actively shake its
own tree and encourage you to carefully think about whether you want or need this service and
if you don’t, tells you to unsubscribe (and has done so on several occasions). Also, I think that
most newsletter or newsletter-type services, particularly those that cover the mining sector
(because those are the ones I tend to come across...I know bugger all about biotech for
example) are a waste of time and space for all concerned. I’d much rather talk about the
exceptions to that statement than the general rule, so would immediately highlight as good the
paid-for subscriber services provided by Gary T (above), Jordan Roy-Byrne, Brent Cook and
2

Claude Cormier as a cut above most others. One thing all those have in common is that little list
is willing to call sell on stocks, not just non-stop buys which get forgotten in the mists of time
by the scammier end of the newsletter rip-off brigade.
Meanwhile, the brokerages want you to buy stocks just as much as any newsletter writer might
do. There are so many examples and manifestations of this basic fact that it’s difficult to know
where to start, but I will bore you again by mentioning my personal topical favourite right now,
that of Inmet Mining (IMN.to). As soon as the hostile-ish $72 ticket price bid came in from First
Quantum (FM.to), the brokerages cried in unison about the lowball nature of the offer and how
either a) a counterbid/white knight would swoop in or b) the only way FM can win its prize is by
sweetening, all this despite obvious downside risks to this bid (so obvious that even I could spot
them, see IKN189 for more). The battlecries did their job and in came the retail orders for
IMN.to stock at $72, which ensured several offices-full of monthly salaries in Bay St and Howe
St were duly covered. And once again I’m not ruling out the chances of a sweetener (or even
that white knight riding in, glistening armour burly steed and all) but it’s been eight weeks
and....
Meanwhile the pro-brokerage’s ultimate game isn’t just about collecting kudos and more about
collecting money, so the name of the game here is commissions. What happens when that
hyped-up buyer who took his broker’s advice and got in on a sure fire arbitrage win gets cold
feet about the lack of results and everso slow but sure price deterioration of IMN? Why he
decides to play it safe and sell, generating another round of sales commish for his ever-friendly
broker! And let’s be clear, we’re not talking about the type of high-pressure boilerhouse
operations that foisted scam stocks like Liberty Silver (LBSV) (LSL.to) onto naive and trusting
client lists recently (evidenced via this blog post last week (3)) but supposedly upstanding,
pillar-of-society houses whose broker and compliance desks are backstopped by professional,
lettered anal ysts writing carefully calculated reports in another part of the same building. On
that score, why not check at the bottom of the next brokerage report that comes your way and
see how many of the stocks they cover get a “buy” reco, compared to the number of “neutral”
or “sell” calls. Food for more thought there.
The parasites of the market, those that sit between your back pocket and the company in which
you invest (and yes, I very much include myself in that definition) are better suited, much
better suited, by active clients. Buy and hold does nothing for their annual bonuses, “sitting on
the sidelines” and “keeping powder dry” even worse. We the parasites need your blood to flow
in order to siphon off their small part of the greater stream and thus be rewarded. Therefore
what we saw in January, the bottled-up “hey folks, let’s get this horrid horrid tax loss selling out
the way and then all hands to the pump” move. Therefore a widely read newsletter published a
buy reco on a tiny exploreco and Oh Coincidence! Just a few days later the company decides to
run an equity financing (with finder’s fee potential, of course). Therefore “gotta keep dancing
until the music stops” because it doesn’t matter whether your or your analyst team sees
troubles in the near future, just get those sales booked and get that commish rolling in.
Therefore the brokered placement. Therefore the newsletter that will trumpet the seven
winners it had (from a book of 87 positions). Allow me to quote from one of them and a very
recent offering for his clientele (who will remain nameless, suffice to say that I hold the person
in contemptuously low regard): “With the right picks we could win big, because of the simple
fact that you can only lose 100% of the money you put into a stock, but there is no upside limit
to how much you can make on a winner. That’s not a fact that’s of much value to the faint of
heart, but for disciplined speculators, it’s what drives our extraordinary gains.”
When passed the quote I had to read it three times; the second to make sure that I’d read it
correctly and the third for entertainment value. So those and a hundred other examples of the
world cajoling the cash out of your back pocket. The sellside wants you to buy stocks, not just
now but All. The. Time. and being what it is it will hog the airwaves to get its message to you,
loud and often.
3

Fundamental Analysis of Mining Stocks
AQM Copper (AQM.v)
You may notice that there’s no big write-up and examination of AQM Copper (AQM.v) gracing
these pages this week; instead you have a short paragraph that hopes to explain why this note
is being held back. In fact the reason is pretty straightforward (it’s also why I decided not to
write it up and send it through last week...along with a bout of laziness of course). The 43-101
PEA is one thing and to be quite honest it’s a well done, complete document that’s one of the
better of its kind, but the real story here is whether Teck and AQM will move forward in 2013
on the Zafranal project, because if Zafranal moves forward then it means Teck is interested in
what it has to offer and AQM, with its 50% ownership is surely worth a tilt at these current low
prices. However, if 2013 gets no budget assigned this is a company that will drift for at least 12
months and not do much bar slowly frittering away its treasury on baseline cash burn.
The latest I hear is that a budget has not yet been assigned to Zafranal for 2013 but the two
parties are in discussions, therefore until this is resolved the jury is out. As soon as more is
known we’ll run our AQM coverage update and make a call on what to do with the stock, but
for the time being there’s no rush to make any decision (and there’s little downside risk left at
these prices) so the call is to wait.
Buying Marlin Gold (MLN.v) for a near-term trade as long as conditions are right
The plan to run a backstopped rights offering in order to fund the development of the Marlin
Gold La Trinidad gold mine project in Sinaloa, Mexico was first announced on December 11th (4)
and last week the company filed the necessary prospectus, which confirmed that all registered
shareholders would receive one right to participate for every share held. It also priced the deal
by noting that for every 1.026 rights
held, the holder could subscribe to one
common share for 8c (e.g. if you have
10,260 shares, you get to buy 10,000
new shares in the offering and pay
$800 for the privilege). The raising is
set to bring $14.8m (gross proceeds to
the company and as it noted in
December, along with the ~$6m MLN
holds at bank it will be enough to fund
most of the development work needed
to bring La Trinidad to production. That
build-out and commissioning is on a
fairly tight timeline and MLN expects to
be producing its first gold by the end of
this year, 2013.
Before continuing, let’s just check on recent price action as it seems to be connected to last
week’s announcement. This three month chart looks for all the world like a price that’s been
walked down in the last few days. That’s understandable I suppose, as it makes entry for all
concerned (not just Wexford) to the rights offering that much easier and if the whisper number
for the deal was 8c, the chance to sell at 10 and then get back in 20% cheaper makes for a
logical chance to average down.
Now to the meat: Let’s consider the rights offering deal for a moment and the key to all this is
Wexford Capital, the company that took a controlling interest in MLN last year (see the
overview we published in IKN191) and is the obvious driver of the whole ball game. Let’s first
recall that this is a backstopped rights offering and the backstopper is Wexford itself. As this
part of the December NR points out:
4

“Pursuant to the Standby Agreement, the Wexford Funds will purchase any common
shares offered that are not otherwise purchased under the Rights Offering. The
Wexford Funds will not collect a fee for backstopping this Rights Offering”
In other words this rights offering will be fully taken up, as if others don’t go for it Wexford will
make up the difference, with the backstopping set to happen by March 15th which can be
considered de facto closing date of this offering. As for the lie of the land once the deal is done,
it’s tough to know exactly but the IKN estimate (guided by discreet inquiries but I’m taking all
the blame myself if it’s wrong) is that Wexford will hold somewhere between 56% and 60% of
shares out once everything is closed. It also means that the current number of shares
outstanding, 192.39m, is set to move to around 379.9m (with a little over half the company’s
market cap covered by cash).
Therefore, what we’ll have is a company with one single dominant shareholder in Wexford and
enough cash to get moving on its construction plans for La Trinidad. For more on the project
itself, we ran a brief outline in IKN191 but as a quick reminder, capex is set at $28m and for
that you get a five year mine life that produces less than 200k oz au, so it’s small but at
$1,500/oz gold the NPV (8% discounted) is $79m and the IRR is 53%, so even without the
potential of extending production and mine life through exploration (which seems to be high),
there’s very robust economics that cover any cost creep and a small but more than interesting
profit to be made.
However, we note that the cash raised in this rights offering won’t be enough to cover all the
capex and in fact (again after discreet inquiries) the company plans include more exploration
and mean that MLN is looking to raise a further $17m (or perhaps a little more) at some point
later this year once the build-out is underway. Again, the role of Wexford in the second tranche
of financing is likely to be key and the cash may come from some other device that’s not an
equity raising. However, if it all goes to plan (and what could possibly go wrong?) come 2014
MLN will be the proud owner of a working gold mine that might not be the biggest thing out
there, but looks economically very robust and a potential investment.
Which brings us to the call here. With the rights offering now in the works, the MLN plan is
moving ahead roughly on schedule. We can fully expect the offering to close correctly and at
that point, MLN can get on with the job of minebuilding. This brings up the first trading
opportunity because what with the way in which MLN has apparently been walked down into
previous to the official offering price (whether it was cart-before-horse or horse-before-cart) the
chances are that once positive news starts flowing the stock will get back up to the previous
generally offered 10c price. That means as per Friday’s close of 7.5c there’s a potential 33.3%
near-term trading win potential here and one that looks fairly gettable. However, it’s probably
only of interest to the smaller investment bottom feeder because although we’ve seen
accelerated volume in the last few days, the typical trading day before that saw perhaps 50k
shares changing hands, which isn’t that much for a 10c stock in absolute cash terms.
The second option here is to ride MLN longer term and be in the stock as the mine gets built
and then put into operation. That’s a valid theory but I’m not willing to commit on any cal until
I’ve seen how the second round of financing is put together, how the cash gets raised, what
terms etc. With a dominant shareholder calling the shots, I’m concerned about the amount of
love that the little retailer hanging onto coattails may get. I’m not saying that Wexford is a bad
house (in fact from the limited conversations I’ve had with them about MLN and other
companies over time they seem pretty open and willing to talk turkey as well as correct about
limiting their disclosures and never going into confidential information, all that’s a good sign in
my book) but in the end it’s a financial investment house and their job is to maximize their own
profits, not run a charity. The devil is likely to be in that second round of financing details, so
until that’s known I’m not ready to move on MLN as a true, longer term investment play.
Therefore the bottom line is twofold:
5

1) Recent share price action has opened up a potential near-term trading opportunity. If you
can buy some now at 7.5c or 8c you do not need to commit extra cash to the rights offering if
you don’t want to (remember it’s backstopped and Wexford takes up anything others refuse)
and the chances are MLN shares with return to the recent 10c-or-so levels once news begins to
flow about successful financing and construction at La Trinidad. The near-term potential for a
quick trade is appealing.
2) So join me in a quickflip today but don’t hesitate to sell to book a profit if successful,
because that’s exactly what I’ll be doing. Until the full terms and conditions for the second,
necessary round of financing comes later this year I’m not a buyer of MLN for investment
purposes. We the smallfry retailer have to be careful when a controlling shareholder looking to
maximize its own profits is calling the shots. Wexford seems honourable enough, but one look
at what Waterton recent did to Gryphon Gold (GGN.to) is enough warning on what might go
wrong for retail holders if the big payer decides to play hardball down the line.
Therefore The IKN Weekly calls buy on MLN.v but the call is constrained by three specific
criteria:
• An entry price of no greater than 8c, non-negotiable. For what it’s worth I
personally will not buy before midday on Monday (and if I have to wait until later in the
week so be it), but be clear that if 8c isn’t available this trade will not open.
• A price target of ten cents, again non-negotiable. This is a near-term trade with
a specific and reasonably modest price target. We’re not setting the world on fire and it
won’t make us enough money to retire.
• An exit of end April latest. That gives time for the rights issue to fully close and for
MLN to get moving on the ground at La Trinidad (and to tell everyone about it at PDAC
or anywhere else that the market may be listening) but it’s also almost certainly a date
before the next round of financing. If this trade opens I will be out by then, which will
allow the opportunity to reconsider from the sidelines when the new set of facts
appear. This is a strict, near-term trade set-up.
Assuming the trade opens correctly, MLN will be added to the ‘Stocks to Follow’ list under the
“smaller/riskier” sub-section. That’s because a) the position will be small and b) the risks of
near-term trading are fully understood by your author. But if the right price isn’t available this
one will stay in the realms of theory only for your author.
6

Stocks to Follow
Of the 15 positions open this time last week, six made gains (IRL.to, LRA.v, PLA.v, LPK.to,
GORO, USGT) one was unchanged (AQM.v) and eight delivered a loss on the week (RIO.to,
BTO.to, AUN.v, OGC.to, LSA.to, IPT.v, FCV.v, USC.to). No stock moved in double figure
percentage terms either up or down, so it’s fair to say it was a relatively quiet week for the list,
though it was an overall negative for your author’s pocket mainly due to the 7.6% weekly loss
registered by B2Gold (BTO.to).
With the covering of our USGT short we now have 14 open positions, one less than our self-
imposed maximum. Of those five are in the green and nine 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$5.24 156.9% $6.29 tgt
B2Gold BTO.to buy C$3.66 28-nov-12 C$3.55 -3.0% new $5.70 tgt new avg
Recommends
Minera IRL IRL.to buy C$0.73 22-jul-12 C$0.77 5.5% $1.56 tg, added, new avg
Aurcana Corp AUN.v buy C$1.07 11-nov-12 C$0.83 -22.4% $1.50 tgt near term play
OceanaGold OGC.to buy C$3.03 16-sep-12 C$2.75 -9.2% $5.34 tgt growth prod
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$1.19 3.5% solid biz model, LT hold
Lachlan Star LSA.to hold C$1.50 30-sep-12 C$1.07 -28.7% lowered $1.77 tgt
Plata Latina PLA.v hold C$0.79 10-apr-12 C$0.45 -43.0% considering sale
Lupaka Gold LPK.to spec buy C$1.12 23-oct-11 C$0.42 -62.5% holding
IMPACT Silver IPT.v buy C$1.14 13-jan-13 C$1.13 -0.9% new position, $1.85 tgt
Gold Res Corp GORO short U$14.11 25-jan-13 U$13.51 4.3% short, $9.60 tgt
Smaller/Riskier
AQM Copper AQM.v hold C$0.31 16-oct-11 C$0.09 -71.0% holding thru for my sins
Focus Ventures FCV.v hold C$0.175 01-jul-12 C$0.19 8.6% revised tgt 25c
United Silver USC.to buy C$0.21 28-oct-12 C$0.14 -33.3% 60c tgt, avg down Dec'12
Closed in 2013
USA Graphite USGT feb'13 U$0.93 08-jan-13 U$0.17 81.7% tgt made, trade closed
2009, 2010, 2011 and 2012 closed positions in appendices below
Now for some notes on a selection of the above stocks.
USA Graphite (USGT): Position closed. As per the blog post Thursday (5) the short in
USGT was covered and the trade closed for a quick and easy profit. On Friday the stock moved
up a bit but it’s really not that interesting for a repeat short unless it really springs higher more
quickly. We’re drawing a line under this trade which looks look on paper but admittedly was
only of practical use to a few of you out there. Anyway, this one is done and dusted.
Minera IRL (IRL.to): Good things happening at IRL, here’s a list
Last week the financing run by IRL quickly closed (6) , raising $15.46m in gross proceeds
(approx $14.2m net) by selling a total of 21.775m shares at CAD$0.71 (there may be a few
more sold as the overallotment facility wasn’t fully filled and the brokers have 30 days in which
to take up their option on that). With this in place IRL is now cashed up to do what it needs to
do in order to move forward Ollachea in particular and on the Peru front, it’s worth noting that
plenty of the placement went to individual investors in Peru via the Lima market, which is likely
to eventually add liquidity to trading there and offers the potential for better liquidity n Canada
via arbitrage trading. Reaction to the closure of the deal was positive and the share price rose
accordingly, though volumes remain light on the main markets for IRL shares (barring Tuesday
in Canada, where 100k shares changed hands).
7

Secondly, via the Peru Mining Ministry published figures we now have the total 4q12 gold
production at IRL’s Corihuarmi mine. Production came to 6,524 oz for the quarter and as we
expect a few ounces held over from 3q12
to be added to sales in the last quarter, IRL.to: Quarterly Gold Production (oz)
the IKN sales estimate is for 6,650 oz. 12000
That’s lower than 3q12 but on a level with 10000
the other two quarters of 2012 as this
8000
chart shows, so what with gold averaging
6000
around $1,700/oz for the quarter we can
expect decent free cash flow to help pay 4000
for IRL’s more expensive activities when it
2000
reports its quarter and year in a few
0
weeks’ time.
Next a very interesting piece of gossip. On
hooking up to contacts in Buenos Aires,
your author hears that a deal to finance the IRL Don Nicolas project using Argentine money,
the deal we’ve mentioned as a distinct possibility in previous issues, is now close to being
finalized. I also heard something about the potential terms, but won’t go any further on that
because they are potentially sensitive as well as being unconfirmed...no need to rock anyone’s
boat. However, I can say at this stage that a deal using Argentine money to bring Don Nicolas
into production makes a lot of sense and will certainly help de-risk the project in the eyes of the
international community.
Finally, in other news IRL yet again got good coverage in Peru’s national media regarding its
community relations at Ollachea in this report from mainstream national daily La Republica
today (7). This report adds to the growing list of reports that use IRL at Ollachea as a role
model for how to do community relations the right way.
Gold Resource Corp (GORO): Really not much to report here, barring small changes in insto
holdings as in the last couple of weeks. Templeton reported (8) that it had sold around 90,000
of its GORO holding in the period to January 31st (they still own 4.2m shares and are the
second largest single holder of GORO stock outside of Hochschild (HOC.L)). Then late last
week, 3rd biggest insto holder Blackrock is reported (9) to have upped its holding in GORO by
around 600,000 shares to 3.56m (6.75% of total shares out) in the three month period to
December 31st. If we consider the recent share price action, I think it fair to say that Templeton
beat Blackrock in this round of the larger fight.
B2Gold (BTO.to): There’s an amount of talk going round the marketplace on how BTO may
be about to be booted from the GDXJ ‘junior miner’ ETF, due to the merger with CGA Mining
that now makes it potentially too large a
company to be a component of that list. If
BTO were to be removed, it would mean up
to 45m shares hitting the market which
would then have to be soaked up and the
inference from the market chatter is that the
company share price may take a temporary
hit from this punctual event. Well yes maybe,
and in fact that hit may have happened
already if we look at this chart that compares
BTO to GLD and RIO.to (yes I know it’s not
extreme objective science, but it gives a
snapshot) and we see a drop in the last two
days of last week on accelerating volume
(the 5.5m shares traded Friday was the
highest number since that big 14m volume day back on January 18th).
8
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4
gold produced (oz)
gold sold (oz)
source: IRL filings. IKN est for 4q12 sales

Am I worried about the potential for 45m shares floundering BTO? No, not at all. Firstly, it
makes not one jot of difference to the company fundamentals and that’s how we’re valuing BTO
and making the long case here. Secondly, BTO is the type of stock that instos will be glad to be
able to take larger piece thereof. Thirdly, if the company continues on its trajectory of the last
three years it won’t be long before it’s taken up by the bigger-boy ETF GDX. Finally and most
importantly, if the stock price goes down enough I’ll be happy to add some more and average
down (after buying a little too expensively on tranche two).
Meanwhile reports of a problem at the company’s Libertad mine yesterday Saturday. A four
month protest by local small-scale “artisanal” type miners has been rumbling on at Libertad (we
reported on it before when it started, I forget which issue but it was before we went long BTO),
with the local miners demanding compensation from the company for lands which they say are
common ground which they should be allowed to work, while BTO says its part of the Libertad
concession to which other have no right. The situation is apparently made more complex
because the same small-scale miners sell small amounts to production to the mine (a normal-
enough practice) and in the meantime BTO has been in talks with the protesting small-scale
miners and have offered unspecified deals, but the protesters have been firm in their demand
for U$15m in compensation (apparently to be divided amongst 200 people, so an average of
$75,000 each which is an awful lot of money in Nica). Cut to last week (10) and the miners who
have staged a mine-gate protest for the last three months last week decided to step up the
protest and blocked the road. The next day the Nicaragua national anti-riot police turn up and
in the ensuing melee the road was quickly unblocked, 47 people arrested (18 of those detained)
and according to the police spokesperson (11) 30 people received light injuries (including 6
police officers) with no serious injuries reported (though another report has two children in
hospital due to tear gas inhalation). The situation is very unlikely to cause production halts to
Libertad and the police presence, which has reportedly been bolstered since the face-off,
indicates that BTO has institutional support. It was also telling to read in the above Prensa
report (10) that the protesting small-scale miners injured on Saturday did not want to go down
to the local village for treatment because they feared reprisals from locals (rather than police or
authorities), which indicates that BTO has the support of those resident in the area.
Lara Exploration (LRA.v): Up until last week LRA had been pretty quiet about company
developments in 2013 and we’d had just one NR from them in January, which is unusual for a
prospector-generator company with so many irons in the fire. Well that changed with a
vengeance with not one but four different pieces of news.
On Monday (12) LRA told us that partner Malbex (MBG.v) was handing back on its option to
earn in to the Grace gold property in Peru. Fair enough and the decision by partner MBG was
probably a combination of permitting delays in the Ayacucho region of Peru along with that
company’s Jan 25th documented decision to move on a project opportunity in The Dominican
Republic.
On Wednesday (13) LRA told us that partner Network Resources (NET.v) had secured the
necessary permits to drill its (as yet never before drilled) Picha copper/silver target in
Moquegua region, South Peru. With the community agreements already done and dusted this
means that NET.v will be providing newsflow for both companies this year. And by the way,
with a $1.6m market cap NET.v might be one for you tiny-end bottom feeders; your author
considered including it in this year’s ‘Lottery Ticket Basket’ but in the end it was left on one side
because there was enough Peru exposure already.
On Thursday (14) LRA told us that its partner for the Curionópolis iron ore project in Brazil,
Vertical Mineração, had filed its final exploration report with the Brazilian Department of Mines.
As LRA explained in the NR, this is the first formal step a mining company takes in order to
apply for a full mining licence. Vertical already has a pilot mining licence for Curionópolis and
there was talk last year that LRA would begin to benefit in the short-term from revenue streams
from the project due to this, but it seems that Vertical is taking a less aggressive approach
these days, no pilot mining has happened until now and no revenue for LRA (the terms being
9

US$1.50/ton going to LRA on sales of granular iron ore and US$0.75/ton on sales of fine-
grained iron ore, with most early stage revenue likely from the granular iron ore). Nonetheless,
the news that Vertical is making progress on the permitting side towards obtaining a full
production licence for the mine is a positive for our trade.
On Friday (15) LRA told us the best news of the week. It had struck a deal with its partner
Avanco Resources at its Conceição nickel project to sell 100% of the project in return for total
cash payments of $3m plus a 2% NSR. The new payment schedule breaks down like this:
This is a good deal for LRA and again shows the advantage of the company’s prospect
generator model. Even if Avanco doesn’t take the Conceição to Bankable Feas stage LRA
benefits from $1m in cold hard cash (with half of that coming this year) and if the mine gets to
production, LRA will still get its share via that 2% NSR. This is the way LRA keeps share dilution
to a minimum and with so many other things on the go it still offers plenty of places from
where the big win might appear.
As for trading, apart form Tuesday when it did 140k volume LRA remains the same quiet
backwater that it’s been since it traded in the $1.40+ range (Oct/Nov 1012). But in this case
(unlike many other) quiet is good and it’s a very easy company to hold at these levels. LRA is a
very well managed entity that offers plenty of exposure to exploreco juniors of many metals
and styles at low risk, as such it’s fully deserving of its place in our portfolio.
Lachlan Star (LSA.to): Unofficial word reaches these shores that company management is
happy with the way 1q13 is shaping costs-wise and the planned upgrade in production from
1q13 to 2q13 is on track to happen as well. No numbers came with that snippet. If all that’s
true then our thesis for holding this stock is on track.
United Silver Corp (USC.to): USC pootled along in its low-volume manner until Thursday,
when all of a sudden somebody wanted out of the stock and was prepared to take any price
offered. It was a bit stomach-churning to see it suddenly down by 20% (and more) but once
the seller had done, USC rebounded some of
the way back. Still, a near-10% loss on the
week is nothing funny at all (no matter if the
position is a small one) especially after having
voiced my personal misgivings last week. For
what it’s worth, I contacted somebody close to
the stock (not a director, but certainly
connected) who assured that there was nothing
wrong operations –wise to cause the selling and
the company also suspected it was a single
seller. As reader ‘GC’ pointed out on mailing in
about the drop, the new COO Michael Gross is
about to take up the reins at the company in
the next few days and as your author expects
the strong financial backing given to USC by Hale Capital not to suddenly disappear at this
point, let’s see how the next couple of weeks pan out before making any final hold/sell decision
on this small but unhappy position.
10

OceanaGold (OGC.to): There’s more about OGC and talk that’s happening around the new
Didipio mine in ‘Market Watching’ below. Here we quickly cover the share price action and it
continues to be rough. The stock only lost 2c on the week overall, but it again troughed down
into the $2.60s on lower than average volumes and only made a fight of it come Friday.
The Copper Basket
After six weeks of 2013 The Copper Basket is showing a 11.40% profit to level stakes.
company ticker price 1/1/13 Shares out Market Cap current pps gain/loss%
1 NGEx Resources NGQ.to 3.40 158.5 527.81 3.33 -2.1%
2 Augusta Res AZC.to 2.43 144.1 413.57 2.87 18.1%
3 Lumina Copper LCC.v 9.43 43.46 410.26 9.44 0.1%
4 Copper Fox CUU.v 0.83 397.65 314.14 0.79 -4.8%
5 Nevada Copper NCU.to 3.50 80.5 303.49 3.77 7.7%
6 Hot Chili Ltd HCH.ax 0.72 286.78 212.22 0.74 2.8%
7 Western Copper WRN.to 1.39 93.78 125.67 1.34 -3.6%
8 Panoro Minerals PML.v 0.62 176.25 109.28 0.62 0.0%
9 Reservoir Min. RMC.v 2.41 41.46 104.89 2.53 5.0%
10 NovaCopper NCQ.to 1.80 51.89 101.19 1.95 8.3%
11 Candente Copper DNT.to 0.375 121.93 69.50 0.57 52.0%
12 Curis Resources CUV.to 0.70 56.31 66.45 1.18 68.6%
13 Oracle Mining OMN.to 0.80 49.03 48.54 0.99 23.8%
14 Yellowhead Min. YMI.to 0.59 60.97 40.24 0.66 11.9%
15 Strait Minerals SRD.v 0.08 56.86 3.70 0.065 -18.8%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg 11.40%
Another slightly positive mixed bag week for our list, with eight names moving up (NGQ.to,
LCC.v, ZAC.to, HCH.ax, WRN.to, RMC.v, YMI.to, CUV.to) six moving down (CUU.v, NCU.to,
PML.v, NCQ.to, DNT.to, OMN.to) and one staying unchanged (SRD.v). Top mover by quite a
distance was Curis Resources (CUV.to up
15.7%) which managed to continue its recent Copper Basket 2013 average, weekly
14%
excellent run (so much for my call on this
12% stock, wrong again) while nothing else
covered moved up or down by more than 10%
10%. 8%
6%
Here’s our first look this year at the weekly 4%
basket tracker chart, as six weeks is just about 2%
enough of a sample. It’s been undeniably 0%
good so far this year and the basket has jan6th 13th 20th 27th feb3r 10th
stayed in the green all the way. However, we source: IKN calcs, TSX data
remind readers that the same thing happened
pre-PDAC in 2012 and that year didn’t turn out well at all for copper explorecos.
Overall and looking back up at the 15 name table, it’s notable that the big moves so far, barring
perhaps Augusta Resources (AZC.to) (AZC) which marches to its own politically motivated
drum, have come from the smaller cap names we have at the bottom end of the list. Names
such as Curis (CUV.to) Candente (DNT.to) and Oracle (OMN.to) are still sub-$100m stocks
despite price improvements that can be classed as anything between good and very good.
Meanwhile, our $100m-$300m price range companies have collectively made a gain but it’s
pretty lukewarm stuff while the $300m to $500m market cap ranged stocks (sans AZC) have
done little or nothing as a bunch. The tentative conclusion I draw is that the market has come
11
31/1/1
morf
egnahc
%

in for the beaten down issues that were hit hardest by 4q12 selling (nerves, tax-loss selling etc)
and have brought them back up to roughly where they were in relation to the bigger market
cap stocks. But that’s only a working theory, not some kind of almighty edict, so if you have a
better idea I’m all ears.
The main news in copper fundies circles is that we’re now into the Chinese New Year main
closedown week period, so nothing much is expected of the market until China goes back to
work. However, that significant inventory increase tendency in LME European warehouses
continued as another 8,425mt (+7.3%) was added to just that sub-sector of the inventory
carried by the LME. Overall, world inventories rose by 23,844mt (+3.7%), with the LME
worldwide up 6.3%, Comex up 0.6% and Shanghai Futures Exchange warehouses down 0.2%.
And once again we saw LME cancelled warrants down as a percentage of total holding, now at
8.05%. All eyes will now be on the trading once China gets back to work (basically the week
after next) so until then the jury seems to be out.
Cancelled Warrants at LME, IKN157 to date
35%
30%
25%
20%
15%
10%
5%
0%
12
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 091NKI 191NKI 291NKI 391NKI 491NKI 591NKI 691NKI 791NKI
source: Cochilco, LME
rof
yrotnevni
EML
%
latot
yreviled
resu-dne
Now for updates on just a couple of of our covered companies, what with it being a quiet week:
Candente Copper (DNT.to): A lot was made in government circles of the ruling by the
national Defensor del Pueblo (Defender of the People) ombudsman that said the Cajamarca
regional government had no right to call a referendum on whether mining activity and/or the
Conga project should take place. The ruling stated in part that as Cajamarca was not a region
with a defined indigenous population, the law of prior consultation (consulta previa) which gives
the right to a popular vote did not apply, as well as there being no precedent in common law
for a Peruvian region voting up or down against a stated national policy or clause in the country
constitution.
The ruling quickly made the State news agency Andina (16) and was praised by several
ministers, including the Environment minister here (17). However, this noise from State and
cabinet regarding the ombudsman ruling contrasts sharply to the roaring silence from the
government when the very same ombudsman ruled that the Cañaris locals next to the
Cañariaco project of DNT did have the right to a previous consultation before any development
could take place and also had the right to vote in a local referendum on whether they want the
project or not, because the locals are officially recognized as an indigenous population by the
State (the recognition dating back to the 1950’s).
In other news, the newly set-up sub-committee of the official “working table” group that met
this weekend in the local area (and includes representatives of the local community) resolved
(18) to examine and decide by March 2nd whether either of the two votes on the presence of
DNT taken last year (i.e. the 8th July vote that gave DNT a green light to move forward with
exploration and the 30th September vote that rejected the company’s presence) are acceptable.
Both votes are hotly contested by the losing parties in both cases. In the event that the July 8th
vote is considered irregular, the committee resolved to force the company to suspend

exploration activities.
Copper Fox (CUU.v): As expected CUU filed its 43-101 compliant feasibility study last Monday
(19). I took a look at the study, and though admittedly I didn’t read through it deeply there
weren’t any real surprises in its content. Market reaction was lukewarm as the price chart
shows, which didn’t surprise me either.
The Lottery Ticket Basket
After six weeks of 2013 The Lottery Ticket Basket is showing an 20.99% gain to level stakes.
company ticker price 1/1/13 Shares out Market Cap current pps gain/loss%
1 Eagle Star Min. EGE.v 0.125 60.73 18.22 0.300 140.0%
2 Glass Earth GEL.v 0.155 104.79 15.72 0.150 -3.2%
3 Bellhaven BHV.v 0.14 121.16 14.54 0.120 -14.3%
4 Marlin Gold MLN.v 0.10 192.39 14.43 0.075 -25.0%
5 Fancamp Expl. FNC.v 0.125 109.8 12.63 0.115 -8.0%
6 AQM Copper AQM.v 0.08 105.57 9.50 0.090 12.5%
7 Rio Cristal RCZ.v 0.025 149.26 8.21 0.055 120.0%
8 Gryphon Gold GGN.to 0.085 194.64 7.79 0.040 -52.9%
9 Copper North COL.v 0.10 58.62 6.74 0.115 15.0%
10 Cream Minerals CMA.v 0.03 155.34 4.66 0.030 0.0%
11 FDG Mining FDG.v 0.13 45.59 4.56 0.100 -23.1%
12 Darwin Resources DAR.v 0.20 26.16 4.19 0.160 -20.0%
13 Inca One Res. IO.v 0.12 34.0 3.74 0.110 -8.3%
14 Firestone Ventures FV.v 0.045 36.32 3.63 0.100 122.2%
15 Netco Silver NEI.v 0.025 47.01 1.88 0.040 60.0%
Portfolio avg 20.99%
Five of the basket moved up (GEL.v, EGE.v, DAR.v, RCZ.v, FV.v), three were unchanged
(BHV.v, AQM.v, NEI.v) and seven lost ground (MLN.v, GGN.to, FNC.v, FDG.v, COL.v. CMA.v,
IO.v), but despite that even-looking display our basket average shot up by an impressive
11.84%. That’s because those winners included some stonking percentage improvements via
Firestone Ventures (FV.v up 100.0%), Rio Cristal (RCZ.v up 57.1%) and Eagle Star (EGE.v up
36.4%). On the downside, the worst display came from Gryphon Gold (GGN.to down 33.3%)
13

In same order as The Copper Basket above, with six weeks gone we’ve just about got enough
of a sample to show how things are developing in 2013, via this chart.
30% Lottery Ticket Basket 2013 average, weekly
25%
20%
15%
10%
5%
0%
14
ht6naj ht31 ht02 ht72 dr3bef ht01
source: IKN Weekly data, TSX
2102/1/1
morf
egnahc
%
That’s not bad, but it should be tempered by the fact that just six of our 15 are making a profit.
This isn’t across-the-board, all-boats-rising stuff, but is more about specific stocks making
moves for their own sweet reasons.
Marlin Gold (MLN.v): We cover this one in ‘Fundamentals...’ above.
Gryphon Gold (GGN.to): The reaction to the news of the previous week that GGN had
handed over a large swathe of its assets and the potential to make a profit for the medium-
term was follow-through negative last week, as well as being fairly predictable (after all, if we
could flag it in IKN196, it couldn’t have been that difficult). This is one that’s unlikely to be
featured in such focus for the rest of the year than it has been in the first six weeks of 2013,
Eagle Star (EGE.v): We flagged this move last week too. EGE has continued to enjoy serious
momentum and is now number one on our list above, sorted as it is via market caps (when we
started on January 1st it was in 7th spot) I for one am impressed. EGE had two pieces of news
out last week that helped keep the momo going, the first Monday (20) in which we were told
that the recent 20c placement had closed, but due to popularity had grown by 2.75m units to
8.75m units (one unit = 1 share + ½ warrant priced at 30c). This means gross proceeds from
the raising went from $1.2m to $1.75m.
The second NR came Tuesday when the company announced (21) it had hired a third party to
compile a 43-101 resource report for its main Bomfim project, which was slated to be ready in
three months from now.
Firestone Ventures (FV.v): A few words must be reserved for Firestone Ventures (FV.v) this
week, as a 100% weekly gain isn’t such a
common thing. The gains accelerated into the
end of the week as this chart shows, while
those all-important volumes were much higher
than the average (we saw 135k Wednesday,
280k Thursday and 221k Friday) but in
absolute cash terms we’re still talking very
minor-scale money. I really don’t have much
of an idea why it moved so much (perhaps a
“guru” tip, perhaps a dedicated buyer,
perhaps any number of other things) but there
was this media coverage (22) of the
company’s CEO, Pamela Strand, in the
Edmonton Journal last the week previously
and that bit of radar may have started the ball rolling. It’s a pretty good Q&A on the company

too, which brings the lay reader up to speed on what FV is doing in Guatemala and its
promising semi-official partnership on the main Torlon project with Minero Mining. The specific
snippet of information that caught my eye from the interview was that FV and Minero expected
to have a PEA out by the time PDAC arrives, less than a month from now.
Regional politics
Mexico: The Peña Nieto government’s mine tax plans begin to take shape
It’s still all rather behind closed doors stuff, but details of the plans the Peña Nieto government
has to increase State burdens on the country’s miners (23) are starting to leak out though
unofficial channels. Perhaps the most important factor is that the new laws are now slated for
debate and passage at the end of this year as part of the 2014 national budget deliberations
and will likely come into force at the beginning of 2014.
As for the details, main negotiations between government and mining companies are about the
royalties that will start being charged to the miners. The mining company position is that
they’re going to happen so that’s been conceded already, but the companies are keen to get
royalties levied on net profits, rather than metal production or or gross revenues from metals.
That’s going to be a tough one to carry, as the norm these days (eg serious mining countries
such as Peru, Chile) is for royalties levied on revenues, rather than profit (though some royalty
payments are tax-deductible). The amount to be charged is up for debate too and although less
is known on percentages right now (it will depend on which P+L line item the royalties are
charged to) the talk is currently about a 3% or 5% range, depending on size of operation,
metal, etc. Recall that Mexico currently charges no royalties to miners, one of the few large-
scale mining countries not to do so.
We also understand that changes in the staking and concessions system are likely, with higher
charges to come and the money generated likely to be diverted away from central government
and to those local communities affected by the mining developments.
Colombia: Drummond exports halted by government for environmental infraction
The most interesting mining story out of Colombia last week concerned the big coal mining
company Drummond. The company’s export operations (that move around 70,000mt of coal
per day out of Colombia, according to last week’s reports) were shut down by the government
(24) after it was discovered that recently (at or around January 12th) one of the barges carrying
coal out of the dedicated port had began to take on water and list, but rather than report the
incident the boat captain (apparently on orders from the company) dumped the water that was
by then heavily contaminated by the coal it was carrying into the bay in which it was located.
The government ordered suspension of operations then came on Wednesday and was
accompanied by remarks from the President, Juan Manuel Santos, who said (25) that the move
set a precedent and showed that no company, be it national or foreign, could violate
environmental laws. He also made it clear that local or foreign companies were welcome in
Colombia “as long as they comply with social and environmental responsibility.”
There’s a clear message being sent here by the Santos government and comes in the run-up to
the delayed debate and passage of the country’s mining laws, set for mid-2013 (even though
we have learned not to hold our breath on this one). Mining environmental issues are now part
of the debate in Colombia and the administration wants to be seen as being tough on
companies that make a mess in the country, thereby gaining support for its wider cause. It’s
easy to find supplemental reports about coal having fallen into the bay in question most every
day for the past 19 years (26) so the timing of the government crackdown and decision to
enforce environmental laws is more interesting than the events alone.
15

Peru: Arequipa declared under state of emergency for rain
This one is as personal as it is mining related, because it’s been one hell of a good week to stay
indoors round here. I looked out of the window Friday afternoon and it was difficult to believe
the amount of water rushing down the street in front of me (according to this report, the
magnitude of rain also surprised the Peru national weather office (27)), but I’m glad to report
my personal problems are minor compared to those truly affected by the torrential downpours
that have affected the Arequipa region. The regional government has formally declared a state
of emergency (28) which allows special funds to be used to repair and clean up damage, both
in the city of Arequipa and in provincial zones most affected. There have also been umpteen
reports of washed-out roads and lengthy power cuts, as well as six deaths as people were
washed away from flooded valleys that are usually bone dry.
That anecdotal lead-in brings us to the real reason to feature the Arequipa rains, as this time of
year often sees production interruptions in the South Peru region due to the rainy season.
Companies such as Fortuna Silver (FVI.to) come to mind, for example.
Peru: A report on Yanacocha’s pit expansion plans
This English language report (29) (a house translation of the same report in Spanish, but it’s a
good one) from Peru’s IDL bureau is a good summary of what’s currently happening as regards
the plans that Yanacocha S.A. (the NEM/BVN jv) has to expand its operations at the Yanacocha
mine (as opposed to the Conga mine project, a separate matter).
The issue is that the extension of section of the Yanacocha open pit mine potentially threatens
the course of two nearby rivers that currently supply around 75% of water to the city of
Cajamarca. Peru’s national water authority, the ANA, has raised its formal objections to the
Yanacocha plans, but the mining company is apparently making use of a legal loophole (those
potentially inflammatory words are IDL’s, rather than mine) that will allow it to gain the
necessary permits without having to take the ANA case into consideration. All told, it’s another
potential flashpoint in the ongoing spat between the Cajamarca regional government and the
Yanacocha mine which may eventually add fuel to the anti-mine sentiment already strong in the
area.
Dominican Republic: The four month permit country
After the negative of potential government reviews of the burdens deal at Pueblo Viejo reported
last week, a more positive report from Dom Rep this week as the government had launched an
initiative to attract more mining exploration by pledging to process all exploration permit
applications received in 2013 in a maximum four months (30). This pledge would make
Dominican Republic one of the fastest places in the world in which to get permitted for
exploration work and is clearly designed as a marketing measure to attract potential exploration
work to the country. The mining ministry stated at the time of the announcement last week
(during a speeech to the Americas Chamber of Commerce) that Dominican Republic is currently
processing 290 permit applications for exploration of concessions, of which 163 are for metals
mining covering 827,227 hectares (the other 127 for non-metals mining exploration).
Guatemala: A growing problem with El Salvador over a mine project and a good
overview of the country’s political situation in English language
The story is a simple one in essence: Goldcorp has a project in Guatemala called Cerro Blanco
and wants to make it into a gold/silver mine. The project lies close to a local river, but a few
miles downstream from the project lies the border with El Salvador and the river runs into a
45km2 lake (the map below taken from this report (31) does the visuals simply and well). The
dispute between Guatemala and its government keen to move mining activity forward (though
as we know still stymied by the lack of movement in any new mining law as well as locals’
protests) and the anti-mining government of El Salvador has been rumbling and brewing for a
few weeks (I’ve debated on making mention of it here before) but things now seem to be
coming to a head due to a report issued by El Salvador’s Human Rights Directorate last week
that said the top problem with the Cerro Blanco mine project was a long-term threat to the El
Salvador environment due to the potential of tailings waste being swept down the river (via
16

flooding or catastrophic weather event). Official noises from El Salvador’s President Mauricio
Funes followed and showed the issue has moved
up the political agenda. Funes said “If the mine
pollutes, it will be due to a project that the
government of Guatemala has built and in which
sense is sovereign. We would have to negotiate
there”, which is neutral-sounding diplomatic
enough and the expected tone from the head of
state, as Guatemala and El Salvador traditionally
have a good and warm relationship as neighbours.
Goldcorp’s public image in Guatemala at
controversial at best, with its Marlin mine
appreciated by the government due to its revenue
and exports generation but with a bad reputation
amongst the locals that host the mine (as well as
patchy labour relations). Then there’s the Tahoe
Resource (THO.to) Escobal project that is a spin-
out of GG and still has the bigger company as
minor shareholder. El Salvador’s view of the Cerro Blanco gold/silver mine is clear, both via
public opinion and now a newly forming government position. It will therefore be interesting to
watch how the wannabe miner-friendly Guatemalan government of Otto Pérez Molina tackles
this issue
In other Guatemala news, make time to read this article over at Central American Politics (32)
which mentions in passing the issue of mining in Guatemala, but is more about the general
mess in the country’s political institutions and gives a decent, broadstroke idea of the difficulties
facing governance there. It’s a good one-stop quickread to get the feel of the way in which
weak institutions and traditional power blocks interact.
Market Watching
A few words on Belo Sun (BSX.to)
I’ve received all sorts of feedback from people after the coverage of Belo sun (BSX.to) on the
blog last week main post here (33) and would therefore like to add a few comments to that
published material. Firstly by way of straw poll, feedback from those posts last week split into
pro and contra BSX (and most of it was fair and friendly, bar one troll-mail). On the one side
people who said that everything would be OK at Volta Grande permitting-wise because that’s
what they’d heard from sources, the type of intel that you take with varying degrees of
confidence depending on the person who tells you, but which is always ultimately anecdotal. On
the other people who’d already got out of the stock (usually taking profits, it seems) who were
voicing the same sort of doubts that came up in those Brazilian news reports. Of the lot, one
from a long-standing market pro-market mailpal “R” (no covers blown today) who made me
laugh with this line: “...blew it out last week around $1.53 when I read the CIBC report that
while the estimated size of the ore body & grade increased upon further drilling, the strike line
was going under a major river. It would seem to me a potential open pit mine and a large river
are 2 things you would want to keep apart.” However, it’s important to underscore that the
anti-camp only had their own subjective reasons, equal to the pro-BSX mailers.
I’d like to say just two more things, ok three more things, about BSX today and then draw a
line under the issue.
1) I’m not a buyer of the stock, neither am I a shorter. I just stick “avoid” on the company
and refuse to formally enter the ring.
17

2) I’d like to point out that the October 10th equity placement of BSX shares is about to go
free-trading. That was a fairly chunky 35.7m shares priced at $1.40 and may cause
further selling pressure in the very short term (though in the same manner as earlier
comments on BTO today, in the medium/long term it matters not one jot to the
underlying company fundamentals).
3) Whatever happens, I cannot bring myself to invest in any company that’s headed up or
run by Stan Bharti. I am not denying that he’s promoted and headed up some excellent
winning deals for junior mining companies, with first and foremost Desert Sun that
made him and his fellow shareholders a lot of money. He has an excellent nose for both
business and exploration and has built himself a mini-empire due to that, so all fair play
and kudos to him. My problem is that his company set-ups these days are of the
“Heads-I-Win-Tails-You-Lose” variety and the Forbes & Manhattan (F&M) structure,
replete with hefty consultation salaries and bonus payments that flow from the satellite
junior into the head office (i.e. Bharti & Co’s back pockets) mean that the man
nowadays risks losing nothing on any deal he’s involved with. I don’t want that from
the head of any junior that I’m involved with; I want the person to have stuck our her
or his neck and be taking the risks along with me, the retail equity guy. So not only do
I distrust any carefully constructed Bharti company structure that takes away all risk
from the executive officers and places all risk firmly with those stakeholders who enjoy
the least transparency of any involved (you know them as shareholders), I also think it
sets a dangerous precedent for the industry because it doesn’t take a Master’s in
business affairs to know that a successful business model is quickly copied by peers.
So no thanks on Belo Sun (BSX.to), no thanks on Sulliden (SUE.to) and no thanks to Aberdeen,
Crocodile, QMX, Alderon, Mason Graphite or any number of other companies (too many to list
here, go check the F&M website if you want more) because I prefer to miss a winner than hold
something and wonder if I’m about to get ripped off by its overseeing management at any
given moment. Over time I’ve had more than one off-record conversation with people closer to
Bharti/F&M who have told me this, told me that, all generally positive, sometimes a caveat here
and there. It appears that it’s not so difficult to read his intentions in any given company,
project or story once you’ve done the necessary homework and got to know how he and his
merchant bank work, but I’m never going that far into he story personally because I’ll never
care enough about him or the way he does business to have the necessary interest. I officially
abstain, the end.
More on Sunward Resources (SWD.to)
We featured Sunward Resources (SWD.to) in a small headsup paragraph last week, noting that
its share price deterioration had seemingly reversed in the last couple of weeks. A little light
was subsequently shone on the reversal last week when SWD announced two changes at
managerial level. Firstly and probably most importantly, Colin Andrew “was resigned” from the
post of CEO and replaced by former company top dog, Philip O’Neill (34). Secondly a new COO
in the shape of Gil Leathley, a highly experienced engineer and mine builder, has been brought
in (35) to supervise development of the project as it moves to the expected PEA stage in 2013.
I had chance to catch up with Philip O’Neill last week and was told that the moves were to
revitalize the project, get them jigged up and had the backing of the major shareholders behind
the scenes at SWD. We can now expect SWD to move forward and get the project to its
scoping study level. Finally, Friday saw SWD announce its quarter and the key metric is that the
company still had a healthy looking $32.66m in cash at bank as at December 31st, which is
more than enough to see it through 2013 and well into 2014 on current development budgets
and plans. To my mind the announced managerial shake-up justifies the mini-turnaround in
price and that’s a good thing, but SWD still has plenty to prove to a market that’s fallen out of
love with low grade gold projects in a big way. It’s still my idea of best of the bunch, but it’s a
bunch that nobody seems to care about any longer.
18

OceanaGold (OGC.to) (OGC.ax): Differing reports on Didipio
This section started as a quick note in ‘Stocks to Follow’ above but as it expanded, due to the
need to explain things in a little more detail, it was transferred down here. We look into reports
that are pro and anti OGC regarding its Didipio mine in and try to make a balanced call on
whether there might be anything to change our current position of value buy on OGC.
A report has been doing the rounds (36) OceanaGold being “meanies” (as one of the mailers
who sent over the link) to locals around the Didipio gold mine in The Philippines. Here’s the
whole thing printed out:
Aussie miner forcibly evicting Nueva Viscaya residents - report
February 8, 2013 3:15am
A video report from Australia's Yahoo7 News which is making the rounds in social
media says Australian gold mining firm OceanaGold Corporation is using “heavy-
handed tactics” in its operations in Dipidio, Nueva Vizcaya.
According to the report, OceanaGold owns the mining rights to the area and is
allegedly forcibly evicting residents from their homes. Furthermore, the evictions are
carried out even before there is an agreement on compensation.
Confrontations between protesting Didipio residents and OceanaGold have become
violent. Mining company employees dressed in company colors of green and gold are
shown having an altercation with villagers. What seems to be police officers with riot
shields and fire houses are also involved in the riot.
And things may have taken a turn for the sinister given the case of local Rosanna
Lawagan. Her house was set afire in the middle of the night by unspecified arsonists.
“This is a good home,” Lawagan lamented tearfully, “We started our family here.”
OceanaGold supposedly want the residents out of the area so they can get to gold and
copper deposits.
“The company has paid no respect to their rights,” said Chief Executive of Andrew
Hewett of anti-poverty organization Oxfam Australia. “They've demolished houses.
They've employed armed security personnel.”
But according to OceanaGold's head of business development, a vast majority of
Dipidio residents support the company's operations and they are working closely with
homeowners to acquire the land.
Nevertheless, Gerald Arances of the anti-mining group Legal Rights and Natural
Resource Center called the Australian company “uncivilized.” — DVM, GMA News
OK, fair enough, trouble with locals at Didipio at face vaue and we can potentially extrapolate
this as wider problems for the company that could threaten its operations. I’m also reminded of
just why I didn’t buy into OGC on a previous occasion just a few years back, because at that
time the relationship with locals wasn’t good at all, with violent clashes (including deaths),
protests from human rights groups, the whole nine yards.
The Rosanna Lawagan mentioned in the above report worked at Didipio between 2004 and
2008 as a camp logistics supervisor (37). We then hear nothing from her until her house is
burnt down five years later, with the implication that her ex-employer is the guilty party.
Workers at Didipio have just voted to form their own union (38), the catalyst for this decision
apparently a third–party contractor used by the mine (for haulage) that was employing 100%
of its staff from the capital Manila (39). This goes against the company policy that at least 80%
of employees must be employed from the local Nueva Vizcaya region. That deal has been
upheld by OceanaGold itself but up to now it apparently doesn’t cover third party contractors.
The spokesperson for the newly formed union also said that they would use the new
organization for collective bargaining purposes. As for company reaction, OGC welcomed the
move by workers to form their union, noted that they had good relationships with workers’
19

unions at their New Zealand mines and respected rights of organization.
Then there’s this report in the Manila Daily Standard (40) which has the community and
indigenous leaders at Didipio quoted as strongly supporting the mining company and its
activities. For example this quote:
“We have waited long enough to see the operation of OceanaGold which we believe
will be very beneficial not only to the Didipio people but also to those living around our
community,” said Evelyn Liboro, a tribal leader and the National Commission on
Indigenous Peoples provincial chairman of the Ayangan tribe.
That’s positive and from a community leader, rather than a report that smells of one-sided hit
piece to me.
The bottom line here is that I’m not giving OGC a free ticket but I don’t think this one is too
much to worry about, inflammatory video or not. The named victim of the trouble likely has
some sort of history with OGC. The moves by employees to form their own union aren’t those
of a workforce that’s unstable or worried about their employment (and OGC seems relaxed
enough about the development). There’s enough evidence to back up the company’s insistence
of strong local support. However, on the flipside I’m the first to admit that the political risk
aspect of a mining operation in a country that I don’t know or much understand is most
definitely a weak point and it was the thing that kept me hesitant about OGC as an investment
vehicle for a long time. Those nerves haven’t totally gone away and reading of trouble (of any
sort) doesn’t do them any good at all.
But there’s one thing here above all that is on a straight practical level: I’m always more
worried about an exploration-stage mining company, one that’s developing or building its
machine and needs to go through the
permitting track. Once a mine is up an
operational, as Didipio is (or seems to
be, due to the apparent glitch in the
tailings system reported a couple of
weeks ago that’s seeing a temporary halt
to operations) and it has all the permits
it needs to go mining, it’s a much safer
proposition and far less likely to run into
governance problems. Therefore, with
evidence suggesting the report is a bit of
a hit-piece, more evidence that OGC
does have the type of support it needs
and a workforce that’s confident enough
about its position and rights to form a
trade union, plus the fact that Didipio is
now a fully permitted and operating mine, the bottom line is that it all adds up to a “not
worried” call on this OGC development. We continue to hold through and expect better things
as 2013 unfolds.
Conclusion
IKN197 is done, we close with bullet points:
• The buy call in Marlin Gold (MLN.v) has a specific price criterium of eight cents
maximum and if that price isn’t available to me the trade will not happen the position
on the ‘Stocks to Follow’ list will be left unopened, period. If it opens it will be sold
when if the 10c price target is hit, no ifs buts or excuses It’s also a strict time limit near
20

term trade that will have less than two months to show its worth, that’s also a clear
parameter. If it comes together, it’ll offer up a small trading win.
• We have our first closed position booked for 2013 and it’s turned out to be a win. USA
Graphite was an embarrassingly easy way to make money though of limited help to
many of you, for which I apologize.
• The debate beginning to rise around royalties in Mexico reminds me a lot of the
negotiations between government and miners in the first days of the current Humala
administration. Everyone knows that royalties will be levied by the Peña Nieto
government, it’s now a case of mining companies wanting to limit the damage and get
the most comfortable deal possible.
• My enthusiasm is rising for Minera IRL (IRL.to) to the point where I’m wondering
whether it’s ok for me to have three ‘Top Picks’ here at the Weekly. All eyes on the deal
for Don Nicolas financing.
• I haven’t given up hope on AQM Copper (AQM.v), even at this lowly and beaten up
price. If Teck shows enough willing to move Zafranal forward it could yet turn into a
turnaround play.
The top long-term picks are Rio Alto Mining (RIO.to) and B2Gold (BTO.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
21

Footnotes, Appendices, references, disclaimer
(1) http://gestion.pe/economia/danos-lluvias-torrenciales-arequipa-equivalen-s-100-millones-2058691
(2) http://elcomercio.pe/actualidad/1535230/noticia-alcalde-arequipa-estima-270-mlls-danos-intensas-lluvias
(3) http://www.incakolanews.blogspot.com/2013/02/an-interesting-liberty-silver-lslto.html
(4) http://finance.yahoo.com/news/marlin-gold-announces-15-million-192400257.html
(5) http://incakolanews.blogspot.com/2013/02/usa-graphite-usgt-closing-short-position.html
(6) http://finance.yahoo.com/news/minera-irl-announces-closing-approximately-144200803.html
(7) http://www.larepublica.pe/10-02-2013/nuevo-trato-de-mineras-con-comunidades-logro-buenos-acuerdos-en-el-sur-
del-pais
(8) http://www.nasdaq.com/symbol/goro/institutional-holdings#.URfGfx3au88
(9) http://www.sec.gov/Archives/edgar/data/1160791/000108636413002751/gold.resource.corp..txt
(10) http://www.laprensa.com.ni/2013/02/10/ambito/134100-desalojo-violento-oro
(11) http://www.sinembargo.mx/09-02-2013/522499
(12) http://finance.yahoo.com/news/lara-exploration-ltd-malbex-relinquishes-123000037.html
(13) http://finance.yahoo.com/news/lara-exploration-ltd-drill-permit-210500309.html
(14) http://finance.yahoo.com/news/lara-exploration-ltd-vertical-files-123000107.html
(15) http://finance.yahoo.com/news/lara-exploration-ltd-conceicao-nickel-210500868.html
(16) http://www.andina.com.pe/Espanol/noticia-defensoria-region-cajamarca-no-puede-hacer-referendum-sobre-
proyecto-conga-446546.aspx
(17) http://peru21.pe/politica/referendum-sobre-conga-no-va-2116550
(18) http://gestion.pe/politica/se-evaluara-validez-asamblea-que-rechazo-actividades-candente-copper-2058697
(19) http://finance.yahoo.com/news/copper-fox-files-positive-feasibility-130000100.html
(20) http://finance.yahoo.com/news/eagle-star-minerals-closes-highly-143000352.html
(21) http://finance.yahoo.com/news/eagle-star-minerals-contracts-geological-143000400.html
(22)http://www.edmontonjournal.com/business/Lamphier+Resilient+Pamela+Strand+passes+test+mettle/7917324/story.
html
(23) http://www.todotexcoco.com/noticias.php?NT=20530
(24) http://www.bloomberg.com/news/2013-02-06/colombia-suspends-drummond-ship-loading-license-agency-
says.html
(25) http://www.el-nacional.com/mundo/Santos-suspension-minera-Drummond-precedente_0_133189434.html
(26) http://m.semana.com/nacion/articulo/todos-dias-cae-carbon/332879-3
(27) http://elcomercio.pe/actualidad/1534702/noticia-senamhi-se-esperaban-lluvias-arequipa-no-esa-magnitud
(28) http://www.andina.com.pe/Espanol/noticia-declaran-emergencia-provincia-arequipa-tras-danos-lluvias-446768.aspx
(29) http://idl-reporteros.pe/2013/02/08/the-open-pit-by-the-river/
(30) http://www.bnamericas.com/news/mineria/gobierno-dominicano-espera-aprobar-permisos-de-exploracion-en-
cuatro-meses
(31) http://www.prensalibre.com/noticias/politica/Mina-genera-disputa-Guatemala-Salvador_0_862114129.html
(32) http://centralamericanpolitics.blogspot.com/2013/02/guatemalas-murky-politics.html
22

(33) http://incakolanews.blogspot.com/2013/02/why-oh-why-is-stan-bhartis-belo-sun.html
(34)http://finance.yahoo.com/news/colin-andrew-steps-down-ceo-140000420.html
(35) http://finance.yahoo.com/news/gil-leathley-appointed-chief-operating-140000896.html
(36)http://money-summit.com/aussie-miner-forcibly-evicting-nueva-viscaya-residents-report/
(37) http://ph.linkedin.com/pub/rosanna-lawagan/4b/1a9/a01?trk=pub-pbmap
(38) http://newsinfo.inquirer.net/353845/mining-workers-in-nueva-vizcaya-town-cast-vote-to-form-union
(39) http://manilastandardtoday.com/2013/02/09/oceanagold-union-formed/
(40) http://manilastandardtoday.com/2013/01/29/oceanagold-operation-to-support-native-tribes/
Stocks To Follow Closed Positions, 2012
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-ene-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-dic-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-abr-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
Vena Resources VEM.to dec'12 C$0.70 31-may-09 C$0.18 -74.3% Failed trade (caps F)
Galway Res GWY.v dec'12 C$2.19 24-nov-12 C$2.30 5.0% closed good ST arb trade
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
23

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.
24

25