IKN #205Premium

The IKN Weekly
Week 205, April 7th 2013
Contents
This Week: Trade headsup, The end of the line (for some).
Fundamental Analysis: Bear Creek Mining (BCM.v) overview, The IMPACT Silver (IPT.v) 4q12
numbers.
Stocks to Follow: Overview, Bear Creek (BCM.v), IMPACT Silver (IPT.v), Rio Alto (RIO.to),
OceanaGold (OGC.to) (OGC.ax), Lara Exploration (LRA.v), Gold Resource Corp (GORO),
Aurcana Corp (AUN.v), Marlin Gold (MLN.v), Focus Ventures (FCV.v).
Copper Basket: Overview, Hot Chili (HCH.ax), Curis Resources (CUV.to), Oracle Mining
(OMN.to), Candente Copper (DNT.to).
The Lottery Ticket Basket: Overview, Gryphon (GGN.to), Fancamp (FNC.v), Inca One (IO.v).
Regional Politics: Venezuela: One week to the election, Dominican Republic: The Barrick
Pueblo Viejo saga begins to drag, Ecuador: Fruta del Norte still on hold, Argentina: Still in
denial, Peru: The first march against Southern Copper’s (SCCO) Tia Maria happens this week.
Market Watching: Tahoe Resources (THO.to) (TAHO) gets operating permit (Shorting
opportunity), Goff Corp (GOFF) (GOFF.pk): An obvious pump and dump scam and a possible
short, Trevali (TV.to) trade headsup, Regarding the near-term trading ideas of last week.
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
Trade headsup
A quick note to make sure the decision to go short Tahoe Resources (THO.to) (TAHO) as from
next week is seen clearly by one and all. See ‘Market Watching’ below for the details.
The end of the line (for some)
We’ve already seen the start, but we’re about to see more. That’s to say, de-listings for tinycap
TSX Venture Exchange resource companies that don’t even have the cash to get themselves
and their year-end filings audited (most recent examples Cabia Goldhills (CGH.v) and GWR
Resources (GWQ,v) but trawl the delisting lists and there are more besides) and as the deadline
approaches for annuals of any Dot Vee that ends its year on December 31st (i.e. most of them)
is up next weekend, we’re about to get a few more I’d wager. All part of the thinning out
process and Darwin’s theories at work, though it does mean that if you have a smart idea for a
new company and are looking to float it in the future, there’ll be plenty of readily available shell
companies you can back yourself into down the line.
Fundamental Analysis of Mining Stocks
As per the Flash upate of Monday evening (see appendix 1) your author went long Bear Creek
Mining (BCM.v) and decided to hold but not to add to the previously opened position in IMPACT
1

Silver (IPT.v) after the publication of the 4q12 numbers frrm that company. Today’s
fundamentals section expands a little on both companies’ stories, starting with our new position
in BCM.v and then taking in IPT. And off we go.
Bear Creek Mining (BCM.v) trade overview
We explained the scenario for this trade both last week in IKN204 and in the Flash update.
Here’s a chunk of that prose by way of reminder:
“...I'm going to open a small, trading-style near-term outlook position in this silver exploration
play tomorrow. The basic scenario, that of the company benefitting from official approval of its
Corani project from locals this month, was outlined in IKN204 yesterday and that's the baseline
for the decision to buy into BCM now. I won't be risking much and the trade only has a projected
life of this month alone, so modest risk for equally modest potential reward”
Therefore the trade is three things:
1) Small. This is not the time or the place in which I’m looking to add to investment
positions, but a trade here and there (MLN.v, GORO short, BTO addition, today’s THO
short call) isn’t out of the question and a bit of nimble-type in-and-out can add a
reasonable profit if things go well, too. The new position in BCM fits that frame and I
don’t expect to be long this stock by the end of April.
2) News-driven. This is about BCM getting through the public audience phase of its
environmental permitting track and receiving market kudos for doing so. With the
company stock at a low ebb, we can make coin by moving in and out and enjoying the
benefit of some positive newsflow.
3) A long position. We’re betting that the stock goes up. Duh.
In today’s overview we remind on the numbers that back BCM up and add a couple of forecasts
for the quarters to come in order to give some context. This is done by way of reminder about
the company more than anything else, because our raison d’être here is a news-driven
fliptrade, not a play on fundamentals. However, there’s no harm in checking out the solid state
of a solid company either, so here comes the basics and first the holy trinity of balance sheet
items, assets, liabilities and working capital:
BCM.v: Assets Breakdown per qtr
250
225 200
175
150
125
100
75
50
25
0
BCM doesn’t capitalize its exploration expenses (well, none of them do any longer, but BCM has
been clear on this point for longer than most) so the changes come through cash burn. The
company did recently announce new fronts of exploration at projects that are not Corani or
Santa Ana (1) which may eventually turn out to be something and will keep the team busy, but
our focus is Corani only in this time-limited trade so we’re not that worried. As for liabilities, the
company basically has none at all.
2
80q4 90q1 90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 tse31q1 tse31q2
source: company filings
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BCM.v: Debt Breakdown per qtr
80
fixed 70 other current
cash 60
50
40
30
20
10
0
80q4 90q1 90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 tse31q1 tse31q2
source: company filings
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LT debt
current debt

So yes, it’s working cap that we most care about
and as we expect BCM to still be the proud owner BCM.v: Working Capital per qtr
140
of $53m in cash and $57m in working cap at the
end of June 2013, we can safely say that the 120
company has more than enough for its needs this 100
year, next year and the year after if all it wants to 80
do is spin the wheels. Building Corani is another
60
matter of course, with an IKN estimated $600m
40
needed in capex from today (so $550m or so to
20
raise) but as the practical and real exit strategy will
be to sell to a larger company (my best guess is still 0
Pan American Silver (PAA.to) (PAAS)) is somewhat
of a moot point...as long as the thing sells, of
course.
The share count remains both under control and
solid. As thanks to that aforementioned cash
treasury, there’s no reason to expect the current
share count to change much, barring the occasional
minor exercising of options or warrants. The current
92.22m shares out and Friday’s close of $2.60
means BCM boasts a market cap of a shade under
$240m.
What you get for that $240m, apart from the
current IKN estimated $60.5m in working capital,
the resource at Santa Ana which we value at zero until further notice and the other. Early stage
properties, is summed up by this chart:
Bear Creek (BCM.v) Corani Reserve & Resource Summary
tonnes (m) Ag (g/t) Pb % Zn % Ag (Moz) Pb (Mlbs) Zn (Mlbs) AgEq (Moz) AgEg (g/t)
Proven & Probable 139.623 57 0.94% 0.46% 258 2881 1422 475 106
Measured and Indicated 110.417 20 0.45% 0.40% 72 1091 964 174 49
Inferred 34.215 32 0.54% 0.34% 36 407 257 69 63
Totals (P+P+M+I+I) 284.255 366 4379 2643 718
source: company filings, IKN calcs for all category totals
This is the 43-101 reserve and resource count for Corani, which comes of course with its
feasibility study dated December 2011 which boasts an 5% discounted NPV of $463m with
post-tax IRR of 17.6% at a very modest $18.50/oz silver (along with 85c/lb for Zn and Pb),
which makes for a very solid feas all told. That document is currently being brought up to date
along with the moves to get the environmental permit (EIA) passed by the government of Peru.
Corani is a big silver mine project that would produce 8m oz Au per year average over its
projected 20 year mine life. Economics are good at a low silver price range and although costs
have definitely risen since that 2011 feas, the rise in the silver price deck will allow plenty of
room for maneuver at BCM when the updated feas is published and there’s not reason to
expect that the robust economics displayed so far are about to take a big hit. The only place
the theoretical numbers concern me is with capex, which is slated at $574m (+/-) in the feas
and currently IKN by your author. Although I’m good about stick to that $600m assumption for
the time being and won’t be too worried about a modest increase, I wouldn’t want to see a
serious capex blowout when the updated numbers are with us, as big front end investments are
just what the large-scale mining companies don’t want to read about right now.
3
80q4 90q1 90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 tse31q1 tse31q2
source company filings
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BCM.v: Shares Out
100
90
80
70
60
50
40
30
20
10
0
80q4 90q1 90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 tse31q1 tse31q2
source: company filings
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Anyway, and just to finish off our quick overview of numbers from BCM quarterlies, here’s
quarterly losses and the expenses breakdown per quarter, plus a couple of quarters’ worth of
forecasts, that show where the cash burn goes (mostly to exploration expenses). BCM isn’t a
BCM.v: Expenses Breakdown
12
10
8
6
4
2
0
cheap company structure to run, burning as it does between $2m and $3m per month on its
activities, but that strong treasury backstops this at the moment and as our focus is strictly near
term this time, it’s not an issue.
That’s the quick overview of BCM financial out the way, now for the reason why we’ve very
recently gone long the stock. The strategy revolves around the public meetings that are going
on right now in the Corani vicinity. So far this month BCM has done a type of informal roadshow
to several of the more remote outlying areas in the Corani mine area of influence, but we
understand that the big show, the main and official “audiencia publica” is set to happen this
Friday coming, April 12th, in the main town of Corani (though it’s still a small place and “main”
makes it sound much larger than it is). At this meeting, the job of BCM will be to present its
project formally to those present, invite questions and reply to any queries the local population
may have. We understand from third party sources that so far, at the outlying meetings, the
reception given to BCM has been cordial and goodnatured with only a few real complaints
voiced so far. The only one worthy of newsflow, even at a local level, is one landowner who
claims that he still owns a parcel of land that BCM says it has already bought. This might turn
into a bit of a spat (2) but is a fairly typical complaint in a that country that has only recently
run an official public land registry and is one of those things that will have to be worked out
between the parties. Overall, the public audience process is going as smoothly as one could
expect and as long as this doesn’t change through the main meeting on Friday April 12th, BCM
would have cleared this significant hurdle. One thing that needs to be highlighted is that in this
process, locals do not have any sort of vote on whether or not to approve the project, there’s
no veto at hand here at all and there’s not “indigenous rights” law being invoked (because for
one thing, locals around Corani are not classed as an indigenous race nor do they want to be
considered as such). What goes on is more akin to an extended presentation with Q&A
afterwards, though the officials from the Mining Ministry and other government bureaux will
grade BCM on the quality of the presentation and explanations offered, as a good and thorough
job goes towards an overall pass grade and EIA permit approval.
And that, in a nutshell, is why your author has taken a position in BCM: If things go well over
the next seven days, we can expect a positive sounding NR out of the company come Monday
April 15th and the market, presumably happy with what it reads, bids up BCM on the
expectation that it will receive its EIA in good order this year. We then sell and leave the room,
tipping our hat in thanks on the way out and wishing those who bought our shares the best of
fortune.
4
90q1 90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 tse31q1 tse31q2
source: company filings
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BCM.v: Loss pre-items and Net Loss, per qtr
other exp. 10
prof fees 9
wages & mgmt salaries
8
share based compensation
exploration costs 7
6
5
4
3
2
1
0
90q1 90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 tse31q1 tse31q2
source: company filings
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loss before other items
Net Loss

The IMPACT Silver (IPT.v) 4q12 numbers
As noted in the Flash update Monday, the results out of IMPACT Silver (IPT.v) (3) weren’t
enough to make the stock worthy of addition right now (instead cash was deployed in BCM.v)
but on the other hand, the numbers offered up weren’t bad and the stock is a worthy hold.
With that kind of conclusion and this kind of crappy market, it wasn’t that surprising to see the
stock sell off the day after, though it was rather gut-wrenching to watch it go as low as it did on
the dog days of Wednesday and Thursday before modest recovery set in. Yes Friday was good,
but to consider it a change in trend really is premature and we’re better off keeping our sights
set on how the market has treated stock these last few weeks, which is “good news neutral at
best and perhaps an opportunity to liquidate position, bad news directly to woodshed”.
I digress. IPT’s numbers came in and although not stunning they were very much in line with
the expected and with positive developments on two fronts having been delivered during the
1q13, we can expect things to get better from here. Here we go with the charts for our
overview and these come with our forecasts for the next two or three quarters (depending on
which side of the financials they’re generated by) to give an idea of how 2013 is looking.
However, it’s worth stating (and putting a line under the words so they get seen, too) that the
forecasts made today assume a conservative-end flat price of U$28/oz for silver in 2013 along
with 85c/lb Zn, 90c/lb Pb and a 1:1 ratio on the USD and the CAD exchange rate. The idea
behind using a reasonably low $28/oz price for silver sales is to program in a baseline for sales,
margins etc rather than get too optimistic about cash flows. In other words our normal default
attitude that leaves surprises as pleasant ones
(assuming of course than silver doesn’t totally IPT.v: Asset Breakdown
crash on us, which would in turn mean all bets
80
off). 70
60
So to the charts and we start with assets and 50
liabilities. The thing to notice here is that with the 40
30
new developments now in place and coming into
20
production (the separate Capire mine and the new
10
feed from the Cuchara/Oscar operation that will 0
improve head grade at its central RMZ mill) asset
values are set to climb. The growth has been on
the fixed side so far and that’s likely to continue
for one more quarter, but as the better cash flows
begin (at least according to our forecasts) treasury should start to turn around in the second
part of this year.
5
01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 tse31q1 tse31q2
source: company filings
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cash other current fixed assets

The liabilities situation at IPT is straightforward,
eminently under control and is set to stay that
way. As for working capital, we’ve seen that
drain somewhat in 2012 (its turnaround and
investment year) and it’s set to drop a little
further with the 1q13 results, but that should
be about the bottom and IPT still has plenty
more cash than it needs for its purposes, even
if Capire turns out to have been a more
expensive start-up than our final estimate.
Financially, this is a tight ship and a well run
small mining company; it always has been in
fact.
Before moving on to our production and
revenues forecast, a quick look at the share
count which we expect to stay steady during
2013; no need to raise via equity, not with this
healthy treasury position.
So to production and revenues, starting with
probably the most important chart of the lot
today (below), how silver production has been
and how it is forecast into the next quarters
(note: as credit production of Zn and Pb tends
to be in close correlation to RMZ mill production
of silver, it’s assumed the Ag production gives
us a good line on overall revenues). Firstly, I’m
being conservative with the sales forecasts per
quarter in 2013, pitching them slightly below
production even though this means IPT may be
building a modest inventory that it could
liquidate for useful cash at any given moment.
Second up, our forecast production growth per
quarter has been adjusted lower for 1q13 and
2q13, due to the guidance offered in the IPT
1012 year-end MD&A that states head grades
will begin at the lower end of guidance for the
year and improve as Cuchara/Oscar comes
more online.
IPT: Production and Sales, plus FY13 forecast
300000
250000
200000
150000
100000
50000
0
6
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 tse31q1 tse31q2 tse31q3
9 IPT.v: Debt Profile per Quarter
8
7
6
5
4
3
2
1
0
Oz Ag
Ag production
Ag Sales
source: IPT data, IKN estimates
01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 tse31q1 tse31q2
source: company filings
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current debt long term debt
IPT.v: Working Capital
40
35
30
25
20
15
10
5
0
01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 tse31q1 tse31q2
source: company filings
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80 IPT.v: Shares Outstanding
70
60
50
40
30
20
10
0
01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 tse31q1 tse31q2 tse31q3
source: company filings
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However, if things go reasonably well we can expect grades to move up to 170 g/t Au. The big
question mark is on how much production we can expect from Capire in this first test
production phase. We’re keeping to our previous model on this (see NOBS report in IKN193,
dated January 13th) but I admit there may be a lower than expected result from that part of IPT
in 2013 at least. Anyway, with a little bit of rose-tint to our spectacles on production our model
forecasts the potential to top 200,000 oz Au per quarter in 3q13, which means IPT would be
well on the way to its plan of becoming a 1m oz silver per year producer. Capire isn’t the big
thing here though, our main concern for better production is lifting silver head grade at RMZ
back towards the levels of yore (e.g 2q111’s
average of 208 g/t) which means
Cuchara/Oscar has to deliver, allowing the
lower grade mines to contribute less percentage
of overall feed. There’s no reason IPT can’t do
that (it’s why the company went through its
2012 transitional period, after all) but 2013 is
when it needs to deliver on its promises.
On to the money side and this chart (right)
shows one of the more positive aspects of IPT’s
2012; that the company has never failed to
make a quarterly mine operating income (i.e. a
mine ops profit) and as long as our $28/oz
silver price minimum holds true, that won’t
change this year either. Our model forecasts one more quarter of modest net loss (this one,
1q13), then break-even in 2q13 and a move to net profit 3q13 and beyond as more grade =
more production = more revenue...not brain surgery.
IPT: Revenues vs Mine Operating Income
9
8
7
6
5
4
3
2
1
0
7
01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 tse31q1 tse31q2 tse31q3
IPT.v: operating profit vs net profit per Qtr
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
-0.5
-1
U$m
revenues
MOI
source: company filings
The final chart to consider is the meta-chart we also featured in IKN193 which considers book
value (BV) compared to
share price (PPS). BV/Share
is projected to stand at 92c
by the end of 2q13, which
means that to significantly
bounce off that number we’d
have IPT back with a $1-
handle (and more likely with
its price showing us a
profit...at last). This of
course depends on the
market improving for junior
silvers, but if we assume
(gulp) that things are bad
01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 tse31q1 tse31q2 tse31q3
source: company filings
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MOI net profit
5.0 IPT price and asset ratios
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
70q1 70q2 70q3 70q4 80q1 80q2 80q3 80q4 90q1 90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 tse31q1 tse31q2
BV/share
PPS end qtr
PPS/BV Ratio
source: IPT filings, IKN calcs

today but not quite as bleak as they looked back in the Lehman days of 3q08, there is reason to
suppose that IPT’s share bounce is ready for that bounce we’re looking for.
The bottom line is that IMPACT Silver (IPT.v) returned the type of quarter expected of it in
4q12. Guidance for this year wasn’t very specific, but there’s enough given to adjust things
slightly lower for 1q13 and 2q13 before the grade and silver production improvements really
kick in from the new operations. But above all, that last book value and share price strongly
suggests that IPT is at a low ebb pricewise and as such, offers very decent value in the silver
space right now. The strong treasury position and positive knock-on of a lack of share dilution
now that the larger capex works are done with (that was 2012’s job) all play in favour, as do
the operations that have always remained cash flow positive, even in the low grade months at
the end of 2012. IPT is cheap for what it is, self-sustaining and now at the start of a new
production growth phase. At current prices it’s one to hold through the current mess without
fret or worry, though those looking for massive springing upside for a front row moving PM
stock should probably look elsewhere. IPT is, above all, good value.
Stocks to Follow
There are 14 open positions in our ‘Stocks to Follow’ list and of those, three made gains last
week (GORO Short, MLN.v, BCM.v), three were unchanged (LRA.v, AQM.v, PLA.v) and eight lost
ground (no need to list them all). The winners were all fairly modest, while there was one loser
of more than 10% on the week, OceanaGold (OGC.to down 15.2%).
It was, all told, a crappy week to hold a bunch of juniors but after the beating of Wednesday it
almost feels like a winning week thanks to the jobs report weakness that saw gold spot to jump
and the mining complex get dragged along with bullion. Once again make no mistake, metals
are leading the miners at the moment. It therefore stands to reason that if you think this is
more than just a one day move, juniors and their volatility could offer trading gains next week.
On the other hand, after the way the first quarter of 2013 panned out the risks of being too
optimistic should be clear by now.
With the addition of Bear Creek (BCM.v) as per the Flash update of Monday evening (see
appendix 1) that was a buy call precisely two days ahead of its time there are 14 stocks on our
open list, one less than our self-imposed maximum. Five are in positive territory and nine in the
negative.
8

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$4.47 119.1% $6.29 tgt
B2Gold BTO.to buy C$3.42 28-nov-12 C$2.96 -13.5% $5.70 tgt 4 buys
Recommends
Minera IRL IRL.to buy C$0.73 22-jul-12 C$0.60 -17.8% $1.56 tg, added, new avg
Aurcana Corp AUN.v buy C$1.07 11-nov-12 C$0.64 -40.2% $1.50 tgt near term play
OceanaGold OGC.to buy C$3.03 16-sep-12 C$2.45 -19.1% $5.34 tgt growth prod
Lara Expl. LRA.v buy C$1.15 08-apr-12 C$1.20 4.3% solid biz model, LT hold
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$0.295 -73.7% holding, tgt 61c
IMPACT Silver IPT.v buy C$1.14 13-jan-13 C$0.94 -17.5% new position, $1.85 tgt
Gold Res Corp GORO short U$14.11 25-jan-13 U$11.99 15.0% short, $9.60 tgt
Bear Creek BCM.v buy C$2.58 01-apr-13 C$2.60 0.8% new near-term trade
Smaller/Riskier
AQM Copper AQM.v hold C$0.31 16-oct-11 C$0.055 -82.3% holding thru for my sins
Focus Ventures FCV.v spec buy C$0.175 01-jul-12 C$0.14 -20.0% revised tgt 25c
Marlin Gold MLN.v spec buy C$0.075 10-feb-13 C$0.08 6.7% trade closes end April
Closed in 2013 closed close price
USA Graphite USGT feb'13 U$0.93 08-jan-13 U$0.17 81.7% tgt made, trade closed
Lachlan Star LSA.to feb'13 C$1.50 30-sep-12 C$0.95 -36.7% sold to reduce port risk
United Silver USC.to mar'13 C$0.21 28-oct-12 C$0.095 -54.8% small Ag sector trade, failed
2009, 2010, 2011 and 2012 closed positions in appendices below
Now for some notes on a selection of the above stocks.
Bear Creek Mining (BCM.v): Position opened. As per the Flash update of Monday evening
(see appendix 1) your author took a small position in BCM on Tuesday at $2.66. After cursing
awhile Wednesday on realizing I’d bought one day too early, I then added another chunk and
got the cost average down to the $2.58 you see
tabled above. Therefore I was surprised as
anyone else that my new BCM position
managed to finish the week in the green, as
Friday saw the stock rally hard into the close
and a persistent buyer showed up to scoop all
the asks. Not complaining either, but it’s
anyone’s guess as to how this thing opens the
week tomorrow morning (5% up or down, place
your bets). As noted above, the decision to go
long is all about the meeting on Friday, so in
theory at least you have all week to pick your
spot and go long if the ideas behind this trade
appeal. I see no reason at all to grab at the first price going.
IMPACT Silver (IPT.v): Pricetalk only here, what with the fundies overview in Fundamentals
above, and IPT had a very crappy week as this 10 day chart illustrates. When it dumped down
to 84c Wednesday and stayed there Thursday (both days 2x average volumes traded) my heart
sunk so the rally Friday was welcome (though of lower volumes). What remains to be seen is
whether that 94c close is pure tape painting or an indication of further rallying to come next
week. The first instinct is to call it tapepaint, but as Bear Creek (see chart above) saw the same
kind of moves as well as others in the sector, there may be a sneakier and altogether more
optimistic game being played out here. All that reminds me just why I don’t usually care about
intraday moves (the subject is not good for your soul or inner calm).
9

Anyway, check out the quarter results overview below, but the bottom line is that IPT now has
its worst quarter out of the way and we’re expecting operational improvements from it this
year.
Rio Alto Mining (RIO.to): It’s not the first time in the last two months that we’ve seen a
nasty spike down in RIO’s share price. It’s in fact the third time as this chart shows, which
doesn’t make the phenomenon any more comfortable when it happens, but does suggest a
developing pattern (and I’m told you TA people out there like patterns).
So we have a stock price that jags down, as well as one that’s been fiddling around in the $4.50
to $4.75 range once the jags have washed through.
The obvious reason for the downspike
is mainly the general crappy markets
and the way in which RIO is one of
the sentiment leaders out there in
junior mining world these days, rather
than a straggler or follower. RIO
rebounded quicker than most with a
decent rally Thursday (before that U.S
jobs number was known) but the RIO
rally didn’t really follow through on
the decent sector day of Friday,
probably due to the research report
published by Scotia on Thursday post-
close (the Scotia analyst’s name is
Mark Turner and once again I point
out that it’s a simple, though rather
bizarre, coincidence and I’ve never even met the guy). The short update-type report (can send
copy on request, usual mail address) didn’t change Scotia’s target on the stock (sector perform,
$5.40 12 month price target) but was strangely negative in tone. It started with “” in its title
and had a 3c EPS estimate (lower than the market average 5c) as well as a call for
“meaningfully higher” cash costs in 1q13 and a 2013 total production of 183k oz Au (lower than
the RIO low-end guidance of 190k to 210k oz Au).
People, I know a crock of shit analyst report when I see one and I saw one last week. Or as
one person who shall remain nameless but is close to the centre of the RIO story told me,
“Analysts are amazing creatures. He writes like he just had a revelation.” Suddenly calling RIO
1q13 results as lower production and higher costs when you and the rest of the market were
spoon-fed that exact information that included a quarterly breakdown of guided production rock
rock tonnage movements (with ore and waste numbers to boot) just four weeks previously (4)
is like trying to claim credit for saving a house by calling fire just as the brigade arrives.
10

The only thing that’s personally irking me about RIO today is the lack of news on the gold oxide
resource update. We were told end year, then for decent reasons (i.e. the necessary
incorporation of new data) the updated numbers would be with us by end 1q13. Well folks,
we’re now seven days into 2q13 and if I’m going to criticize delays in timelines from other
companies, RIO needs to be pointed at with the same finger on this, too. Yup this is mining and
yup shit happens and yup RIO has a better record than most other companies of its type for
delivering on its word, but late is late so I’d much rather the numbers get seen sooner than let
this one fester any longer that will see doubts being sown about the company’s resources at La
Arena.
OceanaGold (OGC.to): To be fair to OGC, it’s likely that it didn’t jump with most of the others
on Friday because by the time the weak US jobs report had added $25/oz to gold, the main
driver of this stock, the trading in the Australian listing, had already closed for the day. Yes sure
OGC can bounce on Canada trading but it just wasn’t there on Friday. Therefore if all things
remain equal we’d expect OGC to offer us a delayed reaction and positives tomorrow Monday.
Lara Exploration (LRA.v): LRA spent all week bouncing in the tight range of $1.20 to $1.23,
did some almost decent volume on Wednesday and basically ignored all the kerfuffle and angst
all around it in junior and mining world. In other words, all quiet.
Gold Resource Corp (GORO): I’m going to keep my GORO comments this week to just one
picture and two words:
Trend = Friend
Aurcana Corp (AUN.v): Here’s an audio interview with Lenic Rodriguez (5) that was
published on April 3rd and may be of interest to you, though it was never going to have much in
the way of new and exciting insight or corporate developments just a wek and a bit before the
company comes out with its year end numbers, MD&A and conference call. That’s what we’re
really interested in around AUN and that all goes down next Thursday and Friday, so by this
time next week we’ll probably have an answer on that buy/hold/sell question (though it’s
obviously been a mistake to hold this dog all the way down to its current price in 2013.
Marlin Gold (MLN.v): Oh look, a stock we own crossed from negative to positive territory, I
feel all light-headed. And although volumes were light, the worst we saw was a 7c price on the
bad midweek and it subsequently traded as high as 8.5c. There’s a certain amount of
momentum here now and I’ve even had a few discreet inquiries arrive in my mailbox from
people who like to dabble in bottom-fishing. All I know is what I say here, and that’s the way
my plan to leave this small and near-term spec position includes selling before the end of
April...and that’s just what I’m going to do. However, I also know that MLN has organized an
analyst tour of its Trinidad property which is going down on Monday May 6th, so the momentum
build may catch on just after I’ve left the stock. If so dem’s da breaks.
Focus Ventures (FCV.v): My trip to see the Aurora project in Cusco region is now confirmed
and will happen on April 17th and 18th. Expect a trip report in IKN207, April 21st.
11

The Copper Basket
After fourteen weeks of 2013 The Copper Basket is showing a 12.41% loss to level stakes.
company ticker price 1/1/13 Shares out Market Cap current pps gain/loss%
1 NGEx Resources NGQ.to 3.40 158.5 415.27 2.62 -22.9%
2 Augusta Res AZC.to 2.43 144.1 374.66 2.60 7.0%
3 Lumina Copper LCC.v 9.43 43.46 327.25 7.53 -20.1%
4 Copper Fox CUU.v 0.83 399.61 251.75 0.63 -24.1%
5 Nevada Copper NCU.to 3.50 80.5 221.38 2.75 -21.4%
6 Hot Chili Ltd HCH.ax 0.72 286.78 177.80 0.62 -13.9%
7 Reservoir Min. RMC.v 2.41 41.46 126.45 3.05 26.6%
8 NovaCopper NCQ.to 1.80 51.89 100.67 1.94 7.8%
9 Western Copper WRN.to 1.39 93.78 77.84 0.83 -40.3%
10 Panoro Minerals PML.v 0.62 176.25 77.55 0.44 -29.0%
11 Candente Copper DNT.to 0.375 121.93 43.89 0.36 -4.0%
12 Curis Resources CUV.to 0.70 56.31 43.36 0.77 10.0%
13 Oracle Mining OMN.to 0.80 49.03 26.48 0.54 -32.5%
14 Yellowhead Min. YMI.to 0.59 60.97 26.22 0.43 -27.1%
15 Strait Minerals SRD.v 0.08 56.86 3.41 0.06 -25.0%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg -12.41%
The overall average lost nearly 4% last
Copper Basket 2013 average, weekly
week due to the bigger losers (large and 16%
small) and is now a clear year low. Of the 12%
components, just three stocks registered 8%
gains last week (CUU.v, NCQ.to, RMC.v), 4%
three were unchanged (HCH.ax, CUV.to, 0%
SRD.v) and the nine of them dropped (the -4%
others). All the bigger moves were -8%
downmoves too, with Oracle Mining -12%
(OMN.to down 28.9%), Lumina Copper -16%
(LCC.v down 14.0%) and NGEx Resources
(NGQ.to down 13.2%) the worst of the
lot.
Copper prices trended downwards on the week, but
nothing particularly dramatic. The sinkage
Wednesday Thursday to a low of just over $3.30/lb
saw a recovery of most of the losses by the end of
play Friday and by the end of it all, we were roughly
back to where we started. Whether that’s good or
bad is another matter, and we seemed to have left
behind the $3.50/lb+ prices of 1q13 for a while at
least. Meanwhile, Chile’s copper watching
beancounters came out with the latest 2013 price
estimate average for the metal they care about the
most, $3.57/lb being the call.
On to inventories and another modest increase last
week, with world totals up 1.6% to stand now at
892,084 metric tonnes (t). LME stocks rose by 1.7%
to 579,600t, Comex went up by 2.1% to 70,541t
and Shanghai warehouses saw a drop, down 2.3%
to 241,943t. That last one fits in with last week’s
comments and is about the only macro data move that is of any interest this week.
12
ht6naj ht31 ht02 ht72 r3bef ht01 ht71 ht42 dr3ram ht01 ht71 ht42 ts13 ht7rpa
source: IKN calcs, TSX data
31/1/1
morf
egnahc
%

Cancelled warrants stood at 11.4% at the end of the week, despite an early-week pop that took
the daily figure above 20% at one point (Monday/Tuesday) that has more than a whiff of
market gamesmanship about it. In the end they fell back and stand at the same level as the
previous two weeks, which means higher than Feb/March but still pretty low.
Cancelled Warrants at LME, IKN157 to date
35%
30%
25%
20%
15%
10%
5%
0%
13
751NKI 951NKI 161NKI 361NKI 561NKI 761NKI 961NKI 171NKI 371NKI 571NKI 771NKI 971NKI 181NKI 381NKI 581NKI 781NKI 981NKI 191NKI 391NKI 591NKI 791NKI 991NKI 102NKI 302NKI 502NKI
source: Cochilco, LME
rof
yrotnevni
EML
%
latot
yreviled
resu-dne
As for market news, the most interesting report your author read was this one (6) about the
potential for Comex to expand its North America only warehousing system and look to grab
more of the world market share. It’s an idea that makes sense on an intuitive level and also
because Comex is looking to Chile as the location for its expansion plans. After all, if you’re
going to start somewhere, why not make it the world’s single biggest copper producing nation.
You read the report linked and there’s more than a hint of the IR people at Comex talking up
their own importance, as there’s a lot of “increasing importance” stuff when the data we look at
every week indicates that Comex isn’t doing much more than treading water these last few
years, but it stands to reason that if people really do want an alternative to the near-duopoly of
LME and Shanghai Futures, it’d be much easier to build up the number three player than start a
whole new entity. And what with the apparent shenanigans going on in the copper warehousing
sector right now, with big inventory builds that are profitmaking assets for companies such as
Trafigura and Glencore (see comments of last couple of weeks) more real competition in the
space is a potential aid to better transparency as well, something we should all welcome.
Now for updates on some of the basket stocks:
Hot Chili (HCH.ax): I’ve been meaning to feature this stock and haven’t got round to it much,
so a pipe-opener today and more during April for sure. The reason I want to mention it today is
for this five day chart, which shows how
HCH dumped on a bit of volume Thursday
but immediately found buyers to take it
back to the apparently solid 62c trading
level.
I’m not claiming that HCH is solid on the
year (it is in fact down 13.9% YTD) but
the action seen last week is the type of
support you want to see in a junior, with
someone somewhere quick to take
advantage of a punctual bargain and
support the stock price.

Curis Resources (CUV.to): The company-versus-town saga continues and although your
author’s bottom line call hasn’t changed (i.e. avoid until definition is reached) a quick overview
of last week’s events won’t hurt. The basic story is that on Monday the Florence town council
voted to rescind its order that banned the use of sulphuric acid inside the town boundaries, one
of the strategies it was using in order to block the development of the Florence copper project.
This news was relayed to the market by CUV pre-bell
Tuesday (7) and the stock price rallied on the news,
as we can see in this five day chart.
However, what we can also see in the five day chart is
a rally that failed and dropped back, almost as if the
market went, “Hey, great this is good news......oh,
wait a minute...” as the wider story was digested and
sure enough, as this Phoenix Business Journal report
points out (8) (a medium that’s doing a good and
mostly even-handed job in following developments at
Florence) the move by the Florence Town Council
seems to be more of a tactical withdrawal as part of
its larger fight against CUV and the Florence project, rather than any sort of admission of
defeat. It’s tied in with the chances of protracted and expensive legal action to justify its
opposition to the project and also the town’s plans to condemn the land owned by the company
as eminent domain, the resolution it passed last month and one that’s still in place. The
inference is that Florence has decided to fight CUV on this eminent domain front, rather than
the acid ban front.
This annotated year-to-date chart gives
some more context. Up to mid-February the
market bought into this story happily (and
copper prices in the $3.50 to $3.80 range
helped of course) but opposition to the
project in Florence has taken its toll on the
share price since then (again, slippage in
copper prices nudging the negative
sentiment along too). What we saw last
week was the beginnings of a rally, but it
wouldn’t have stopped the way it did unless
the opposition were seen as serious and still
committed to fighting its corner.
Oracle Mining (OMN.to): IN IKN203 we covered OMN and here’s part of the conclusion to
that report, by way of reminder:
“...I’m not a buyer today, because I’m still leery about the state of the copper
space, for the near-term at least. There’s also things such as the upcoming
feas to consider, as well as the permits that OMN needs to secure in order to
move forward, secure its debt financing and make that all-important
construction decision. All that’s just a long-winded way of saying “there’s no
need to rush into this stock right now” and that’s the true bottom line message
of today’s NOBS report.”
Last week we saw a big waterfall drop in OMN as somebody (and as always we are ignorant of
their sweet reasons) decided to bail on the stock at a negative point in this weak market. The
result can be seen in this price chart and in the hard reality of the 28.9% percentage drop on
the week reported in the first paragraph of this section.
Is that kind of drop undeserved? Almost certainly. Is it a surprise? Less so, because big drops of
decent juniors on apparently irrational selling is exactly what happens in these type of market
14

conditions. Though the silver lining is that we did find out at what level people were willing to
pick up OMN, because the uptick in volume (something OMN has been lacking in recent weeks)
has drawn a line under the stock price.
This is the same company as we had last week and the week before, when looking at its
situation and prospects quite carefully. In fact it’s a company with more information available,
because on April 1st it filed its 43-101 for all to see on SEDAR and amongst the nuggets from
that document we note that the $5.5m recommended spend for the next stage of development
confirms our assumption that OMN will need to raise more working cap before this year is out.
But that’s hardly a surprise.
Candente Copper (DNT.to): The fourth “Working Round Table for the Development of
Cañaris” (Spanish title being “Mesa de Trabajo para el Desarrollo de Cañaris”) was held
yesterday Saturday April 6th (9) and no incidents of violence or undue protest were reported,
which is good. However, there was no agreement reached between the parties regarding the
community demand that DNT stop its exploration activities, nor was there any agreement on
the main item on the agenda, that of ratifying or striking down the validity of the two votes last
year, namely the June 8th 2012 vote at which locals approved exploration activity (and locals
say was fraudulent) and the September 30 2012 vote in which the population overwhelmingly
voted against the presence of Candente and its project (and national government and mining
company say was not a recognizable vote). On this point the working group took the easy way
out and postponed any decision on that until the next meeting, scheduled for May 4th.
The main agreement reached was to identify potential community development projects that
total 140 million Nuevos Soles (~U$60m) for the three main districts of Cañaris (40m Soles for
Cañaris, 42m Soles for Salas, 58m Soles for Incahuasi) that would improve life quality in the
region and would be administered in connection with the national ministries of agriculture,
transport, communications, housing, education, and mining and energy. Of that 140m Soles
total, around 40% of the projects were deemed viable in the immediate future and the top
priorities are to connect all local houses to the electricity grid, to provide cookers to all local
houses and to incorporate more of the population aged 65 or over into the new national
pension program.
The Lottery Ticket Basket
After fourteen weeks of 2013 The Lottery Ticket Basket is showing a 7.79% loss 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 69.48 20.50 0.295 136.0%
2 Marlin Gold MLN.v 0.10 192.39 15.39 0.080 -20.0%
3 Bellhaven BHV.v 0.14 121.16 12.12 0.100 -28.6%
4 Fancamp Expl. FNC.v 0.125 118.41 11.84 0.100 -20.0%
5 Gryphon Gold GGN.to 0.085 194.64 10.71 0.055 -35.3%
6 Glass Earth GEL.v 0.155 104.79 10.48 0.100 -35.5%
7 FDG Mining FDG.v 0.13 45.59 6.38 0.140 7.7%
8 AQM Copper AQM.v 0.08 105.57 5.81 0.055 -31.3%
9 Copper North COL.v 0.10 58.62 4.69 0.080 -20.0%
10 Rio Cristal RCZ.v 0.025 149.26 4.48 0.030 20.0%
11 Darwin Resources DAR.v 0.20 26.16 3.40 0.130 -35.0%
12 Inca One Res. IO.v 0.12 34.0 3.06 0.090 -25.0%
13 Cream Minerals CMA.v 0.03 155.34 2.33 0.015 -50.0%
14 Firestone Ventures FV.v 0.045 36.32 1.63 0.045 0.0%
15 Netco Silver NEI.v 0.025 47.01 1.41 0.030 20.0%
Portfolio avg -7.79%
15

The Lottery Ticket Basket slipped and is now solidly down on the year. We had four uppers
(MLN.v, BHV.v, GGN.to, FDG.v), four unchanged (AQM.v, COL.v, RCZ.v, FV.v) and seven
downers (GEL.v, FNC.v, EGE.v, DAR.v, CMA.v, IO.v, NEI.v), with the biggest moves being the
losses in Cream Minerals (CMA.v down 25.0%), Fancamp (FNC.v down 20.0%) and Netco Silver
(NEI.v down 14.3%). Overall, ten of our
15 stocks and now showing negative and
25% Lottery Ticket Basket 2013 average, weekly
it’s only really thanks to having picked a
single hotpot winner to add to the basket 20%
that the overall average loss isn’t so heavy 15%
(e.g. if EGE.v were unchanged for the
10%
year the basket average would be
5%
negative 16.9%).
0%
Therefore and once again, your author’s -5%
doubts about the validity of this -10%
experiment are raised. If we’re entering a
situation where these tinycaps get traded
volumes, either to the upside or the
downside, then it’ll be fair enough to
continue monitoring this space via the basket. However, I’m beginning to suspect that this
nanocaps are just going to get ignored and this section may become an sideshow of marginal
usefulness to our cause. The jury is out on this, but for the time being we can at least home in
on the handful of stories that have something of interest to offer.
Gryphon Gold (GGN.to): The NR out of GGN last week (10) didn’t affect the price of the
stock that much, either because the news was already telegraphed to the world or that the few
unfortunates left long this horrid thing didn’t understand what it all means. Whatever the
reason GGN didn’t dump on the news, the information provided clearly showed just how bad
the situation is at GGN and how it’s quickly losing its mining asset to the shark-like financiers at
Waterton. It works like this:
• With the recent monthly dues paid to Waterton, GGN now owns 3,880,000 membership
units (MU) out of a total of 10m units that comprise the Borealis JV, with Waterton
owning the rest. In other words, as of this moment GGN owns 38.8% of the mine.
• In April and May it’s due to pay 80,000 MU per month to Waterton to maintain its
financing deal in good standing.
• In June, July, August and September it will have to pay 120,000 MU per month to
Waterton.
• After then, the company might have some cash distribution from the JV with which is
can pay its financier. But by then GGN will be down to a 32.2% ownership is due only
32.2% of the earnings from the mine. To be fair, the company says that it might get
distributions “as from” 3q13, which may mean at the start of the quarter rather than
the end, but anyone giving benefit of the doubt to the optimistic end of forecasts from
this company by now needs their noggin examined.
But wait! There’s more!
• The above is separate from the credit facility of $4.8m that GGN agreed with Waterton,
which now stands at a total of $4.92m and the whole of that amount is due by July 31st
2013. If it fails to make that payment (and unless the CEO wins Powerball, fail is what’s
going to happen) it loses another 25% of its interest in Borealis....and still owes that
near $5m as well, by the way.
• Then there’s another couple of debts that GGN owes to both Waterton and the Borealis
16
ht6naj ht31 ht02 ht72 dr3bef ht01 ht71 ht42 dr3ram ht01 ht71 ht42 ts13 ht7rpa
source: IKN Weekly data, TSX
2102/1/1
morf
egnahc
%

JV that add up to a little over $433k (but quite frankly, this last item is the least of the
worries here).
The bottom line is that via our coverage of GGN in The Lottery Ticket Basket we get to watch
up close as a microcap junior gets stripped of its assets and left with nothing by a hard-assed
and voracious financial entity in the process of chewing up its little partner and spitting it out
before breakfast. I’ll confidently predict that once GGN’s share of Borealis has been squeezed
down by the terms of the financing deal to as low as Waterton desires, it will call in its loan,
GGN goes into the equivalent of chapter 11 and the ensuing proceedings see Waterton take
control of 100% of the mining company at a very favourable price. Those left holding GGN
paper once the process has run its course will have a pleasant souvenir or perhaps something
with which they can decorate their outhouse.
In other words, you may recall that when The Lottery Ticket Basket was set up I bought a
token amount of shares in each participant so as to have a little skin in the game here. That’s
still true today, barring one exception; the announced and completed sale of the few GGN held
when the news of the failure of the mine operations came through. All the others, as desperate
as some of these stories truly are, have been held til today because 1) there’s not much cash in
play anyway and 2) there’s at least some hope of a turnaround in most of them. But not GGN,
no madam no sir; this company is now in its death spiral phase, which will at least provide us
all with some education and perhaps even a little entertainment.
Fancamp (FNC.v): This one was our asset value play back at the start of the year, with
holdings in other company shares that gave it a higher liquid (or equivalent) asset value per
share than its own share price. Or in strictly theoretical terms, we could have bought out FNC
for its going rate, sold the shares it held at market prices, gave away its own properties and
fixed assets for free and still come out winning a few million for our own back pockets.
So with the stock down 20% last week and therefore 20% on the year, how does that
calculation we did at the start of 2013 hold after the first quarter? Well, its two main holdings
are 9m shares of Argex Titanium (RGX.v) and 15m shares of Champion Iron Mines (CHM.to).
With the Friday closes of RGX.v (98c) and CHM.to (25c) as stands, that gives the FNC held
shares a current market value of $12.57m, which is plenty down on the near $20m they were
worth at the beginning of the year (the biggest drop has been in CHM, which has really dumped
out). However, today’s total is still slightly higher than FNC’s current $11.84m market cap and
means, again theoretically at least, that this stock represents value at today’s price.
The downer about FNC is that at least by projects held it’s largely an iron ore play (with a
titanium kicker thanks to the RGX exposure), so with that sector very much out of fashion we
may see further weakness in valuations going forward. All the same, when you can get the
company held projects for free there must be worse alternatives out there.
Inca One (IO.v): A post-bell-Friday news release (11) But this one went against the run of
play and turns out to be reasonably positive for the company. IO.v closed its placement round
and announced that it had raised gross proceeds of $953,000 out of a target placement of
$1m, which isn’t bad at all for a tiny junior in a rough market (though it needed over six weeks
to do it). No position and no plans to take one, but may look up IO.v HQ while in Lima this
month.
Regional politics
Venezuela: One week to the election
A brief reminder that next weekend, on April 14th, Venezuela holds its Presidential election to
select Chávez’s successor and Nicolás Maduro, government candidate and Chávez protegé, will
win. The only real question is whether he’ll get a bigger margin than Chávez did in the October
2012 vote versus the same opposition candidate, Henrique Capriles.
17

Both sides will find their ways of claiming victories, nothing will change in Venezuela and the
real issue of how Venezuela shapes up in the future are further down the line (perhaps one
year onwards?) when Maduro’s honeymoon period runs out. Chávez is a difficult act to follow
but Maduro’s is not the impossible task either (no matter what you might have read). Much
depends on whether he can grow the right type of presence in the meanwhile.
Dominican Republic: The Barrick Pueblo Viejo saga begins to drag
Two developments over in the Dominican Republic that concern mining. First up, on Monday
last week (12) President Danilo Medina was visited in his presidential office by Garry
Drummond, president of the U.S privately owned Drummond Company, one of the big Colombia
coal players, who told the President that his company was ready to start mining exploration
work on Dom Rep, that his company was interested in the country as a potential investment
location due to the favourable FDI climate and judicial security it offered and that (we quote),
“If the investment climate is good, why not invest in this country”. During his visit, Drummond
was accompanied by Alfy Fanjul, and a Cuban-born Miami resident who, along with his brother
and their company Gulf and Western, has made himself very rich indeed via the Caribbean
sugar trade with Dom Rep one of his favoured jurisdictions.
Personally, and after hearing the thinly coded “we’ll invest in Dom Rep if things are safe for
FDI” message, I’d put the chances of Drummond’s visit being unconnected to the current
dispute between Dom Rep and the Barrick Pueblo Viejo gold mine at exactly zero.
Meanwhile, the heads of the Dom Rep customs office now say that according to the constitution
they can stop all exports of gold from the country on an indefinite basis and hold all gold inside
the country, because the constitution states that anything extracted from ground in Dom Rep
remains the absolute property of the country (13). Now yes, I’m quite sure that taking the
“anything under the ground belongs to the country” and applying it to a large and heavy block
of silver/gold doré is really stretching a point, but it’s also a potential card that the country
might play in its efforts to force Barrick (and 40% owner of Pueblo Viejo Goldcorp) to the
negotiation table.
Ecuador: Fruta del Norte still on hold
To mark the festivities of the 6th Annual Ecuador Mining Conference, DJNW ran an update (14)
on the progress at the Kinross (K.to) (KGC) Fruta del Norte gold project. Or lack of progress,
because the note starts with “Canadian gold-mining company Kinross Gold Corp. is awaiting
government reforms in Ecuador to develop its Fruta del Norte project” and then what follows
are a bunch of paragraphs and quote to elaborate on the main point. K plans to invest $40m in
the project this year and that kind of cash, alongside the estimated capex that now stands at
$1Bn, shows you the lack of progress too.
The main sticking point in the “reforms” are negotiations on the windfall tax that Ecuador wants
to impose and K doesn’t want to pay. The compromise seems to be moving towards payment of
the tax once enough profits are returned on the original investment to cover capex (which
reminds us of the Dominican Republic situation somewhat, so Correa’s side will probably guard
against “accidental” capex blowout numbers. According to the K people, the ball is likely to re-
start rolling in May when Correa’s new term officially starts and the now Correa controlled
parliament begins session.
Argentina: Still in denial
On monitoring Argentina mining news last week, one news item was reported in so many
different reports that it began to feel like a bombardment. The basic line is that “don’t worry
about Vale leaving, mining jobs are going up by 23% this quarter!”. That figure was taken from
the Manpower 2q13 expectations report and gleefully passed around by Argentine news
agencies (15) as evidence that “we don’t need them there Brazilians anyway”. So, of course,
your author tracks down the actual document instead of the filtered news of the document and
once you look at it (16) you see that a) what it says is that 23% of the companies in the mining
sector have a view to adding more staff in 2q13, which is hardly the same thing. But far more
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interesting is the fact that this quarter is the first ever quarter that Manpower has surveyed
mining in Argentina and its database is clearly woefully thin compared to the other eight sectors
it covers. So taking this 23% number as some sort of statistical gospel is debatable at the very
least and quite laughable as an antidote to the 6,800 direct jobs and approximate 5,000
auxiliary jobs currently being chopped by Vale in Mendoza.
Peru: The first march against Southern Copper’s (SCCO) Tia Maria happens this
week
When it comes to protests against mining, nobody does them better in front of TV cameras
than pissed off locals in Peru. We’ve recently been following the build-up to the next likely
major cause, that of Southern Copper’s intention to re-start the permitting for its Tia Maria
copper project versus the anti-mining feeling in the Islay region of coastal Arequipa that’s held
strong for years. As this report (17) notes, protests, marches, road blocks etc are due to start
next week against Tia Maria (the environment permit application is due filed this month) and as
the head of the Arequipa Regional Office for Social Conflicts, one Berly Gonzales, is quoted as
saying (translated), “The announcement of Southern to begin the Tia Maria mining project this
year are not recommendable, as the tension in Islay province is latent”.
Market Watching
Tahoe Resources (THO.to) (TAHO) gets operating permit (Shorting opportunity)
We start with the ten day price chart of Tahoe Resources (THO.to) (TAHO), which clearly shows
the moment at which THO announced it
had received its operating permit from the
government of Guatemala (18) and also the
price ramp (that was a bit of sleeper
reaction, all told) to a high of ~$19.50 on
Friday. However, we also note the late
Friday selling in the stock, likely bits of
profit taking from the sharper buyers
Wednesday. We now move to the previous
comments made here in the Weekly
regarding Tahoe Resources, summed up by
this closing section from the last time we
seriously mentioned the company in
IKN201 dated March 10th. I’ve bold-typed
and highlighted on section of the paragraph
for reasons apparent:
If THO remains on a roll and keeps floating back up, there’s a point when the
value of shorting will override the risk of getting the call wrong. THO may (rise)
on consideration that the mine will be permitted “soon”, or it may see a
strong price spike on issuance of a permit that the market considers to
have settled the whole affair and extinguished once and for all the
opposition to the mine opening. In either case, taking the under and
expecting further political/community risk problems looks like a valid
option. On considering the THO chart, something above $20 would be
preferable but as this would be a news-driven trade, rather than fundies-
driven, circumstances will dictate timing more than the market price on any
given day.
In this context, last week’s decision by the Otto Perez Molina (OPM, which in this case won’t
stand for its more normal Other People’s Money) government fits into our scenario. And by the
way, before moving on I ask you not to confuse the snarky stuff written about tHO along the
19

way on the blog with the Weekly content over time. Round these parts we don’t care about
political hues or opinions of you, I, or anybody else; we’re looking for a money-making trade
opportunity with the right type of risk/reward profile, period.
So to the reaction from last week’s news, which according to my inbox has been split into two
camps, with the cleavage point being language. On the one hand I’ve received English
language mail from people who have either taken the “ha ha you were wrong on your blog
dumbass” line and assumed the granting of this permit is the end of the whole controversy
around the San Rafael (aka Escobal) mine, or at most have asked whether there’s any doubt
surrounding the apparent resolution (and by the way, I’ve made a point of forgetting to answer
mails from trade pros on this subject in the last few days, saving all fresh thoughts for this
edition of the weekly). Meanwhile, in both mails from Spanish language contacts and news
reports and communiques out of Guatemala, it’s crystal clear that the permit award isn’t going
to go uncontested by those groups and locals against the planned mine. The pushback looks
like coming in two ways; firstly and as you’d expect, local protest groups (who have shown their
militancy and fearlessness several times already, sometimes with sad and fatal results) are
planning the type of disruptive protests that are the norm, with marches, roadblocks etc. As
usual I hope they don’t turn nasty for both sides’ sake, but the chances of bloodshed are not
insignificant. Perhaps more importantly, especially for a country like Guatemala and its
infamously weak institutional make-up, legal actions (that are usually called “amparos” in
Spanish and amount to blocking orders of official decisions of all types) have already been
started against this governmental decision and the chances of at least one of them being at
least temporarily successful is high. The environmental pressure groups that are moving to get
an “amparo” in place include Guatemala’s CALAS and Cocodes (19) and one thing you shouldn’t
do is fall into the trap of thinking they’re a bunch of disorganized lefty ineffectual intellectuals.
No no, these are well-organized groups that know their way around the courtroom systems and
will have pre-prepared their cases for this eventuality. Let’s quote (translated) for example Yuri
Mellini, director of CALAS and a known player in the Guatemala political scene (20). Here are
his words after last week’s permit award on announcing his group’s legal action:“The
government has, in an irresponsible manner, authorized a permit that is plagued with legal
problems and is therefore null and void according to the law”. And frankly he has a point, as it
all harks to the same the doubts we’ve aired regularly here at IKN about the OPM government’s
position, namely that the President wants to award the permit but the legal grounds for
permitting and overriding his own congress’s ban on new permit awards until the mining law
reforms are settled and enacted are shaky to say the least.
In order to gain legal traction in this case, what CALAS or any other group needs to do is to
present its case and find a judge willing to give a favourable initial ruling, which would be to
grant the blocking order (amparo) which would temporarily invalidate the operating permit until
a full legal hearing is enacted and a more definitive judgement handed down. In Guatemala
therefore (as well as in many Latin American countries), a lot depends on finding an individual
judge with sympathy for your cause....it really does come down to personalities at times (and
as a possibly unrelated sidebar, this opens the door on insight as to why many LatAm judiciary
members are corrupt, but that’s for another day folks). This is where the call in today’s note
hangs and it’s where I’m open to risking my cash on a trade as well, but on balance and after
inquiry, I believe the chances that the anti-mine people in Guatemala receive their amparo and
at least temporarily halt the Escobal mine are high enough to say the scenario is probable...put
a gun to my head and I’d call a successful amparo a 75% chance (though percentages like that
are very difficult to truly quantify and can change from day to day...don’t nail that number too
hard into your head please). The way in which Latam works on this level means that the
potential of finding a sympathetic judicial ear is fairly high; there’s plenty of congressional level
opposition to mine development in Guatemala amongst government opposition parties, who
bring along their own legal and judicial support groups. Judges that come with political
affiliations are part of the package, so CALAS will be looking to put its legal actions in front of
one of those people. Yes, I’m trying to be as diplomatic as possible, but the bottom line is that
considering the way in which the permit news has been accepted by the English language
market community, an “amparo” will hit the stock like the proverbial bucket of cold water. And
20

as I consider that chances of that event are reasonably high, therein lies the trade potential.
Conclusion: Aside from the political risk factors around THO, your author has been keen on
adding a short position to the single one currently open at the weekly (GORO) in PM stocks for
a while for more macro reasons (protection against bearish silver outlook, juniors’ continued
unpopularity, the other reasons you should understand by now). However, getting a good
candidate isn’t so easy, not least because shorting a Canadian-only company is at best difficult
(and anything below a buck becomes nigh-on impossible for all but the best pro seats in the
house). This is another reason that THO fits the bill, as its US listing (TAHO) makes a lend
much easier, not to mention its high share price in absolute terms and its liquidity via its chunky
sized market cap (even though a lot of the shares out are tied up by Goldcorp and insto/insider
holdings and don’t form part of the float).
But this trade IS about the political risk; yes, the hedging opportunity when set against your
author’s wider portfolio attracts as well, but the idea behind this is to take advantage of the “Oh
look, the wire story says THO has its permit, fait accompli, smooth ride to production from
here” attitude now emerging in capital markets that I firmly believe is mistaken. THO at
Escobal/San Rafael will experience protests at a local level on a greater or lesser basis, that’s a
given and it’s a bit of a wild card as well, because political fall-out from the demonstrations may
be minor or may become national headline stuff; we simply don’t know yet (and it may or may
not work to our short position’s favour). However, the legal challenges to last week’s permit
award are likely to get the type of traction that at least delays the project and it’s on this aspect
that we’re hanging our hat. Now that THO has its permit, any blockage to the permit will be
material news and the company will be obliged to announce the development to market, in
English, in an NR. Now that complacency has set in, any such announcement, even leavened by
“only temporary in nature, nothing to worry about folks, minor glitch, shouldn’t affect timeline”
type platitudes will not go down well in a fragile governance jurisdiction such as Guatemala. Not
at all.
This is a potential short on a waterfall-type move; one of those where you hold and hold and
nothing happens (or even it moves against you for a while), then the news item you look for
comes along and the drop is fast and strong. This is the short trade envisaged here and as all
shorts, it’s one that can test nerves along the way and isn’t for everyone. If the set-up of this
trade appeals to you too, you have to go in with eyes wide open about the possible ride.
The exit strategy is as follows:
a) In case of success, taking profits promptly once a waterfall drop on bad news has
occurred. This might happen at any time so no true time period can be set here, this is
above all a news-driven trade opportunity. We don’t have to hang around THO and see
the newly built mill and processing facility turn to rust in order to claim victory. What
happens here in the longer-term is a separate question (which we can actively address
or ignore, depending how things develop), what we care about is trading a winning
trade to the short side, no more and no less. It’s capitalism, baby.
b) In case of failure, we close and cover the position in the event that THO at Escobal
declares commercial production. As pointed out the other day when talking FVI at San
José, it’s much easier for anti-mine activists to keep a new mine from opening in LatAm
than it is to close a mine that’s already opened. The fight that CALAS and other groups
have is all about stopping Escobal from starting up and if they fail to stop that, the
mine will continue producing whatever other stink might be kicked up. Therefore,
meaningful production from Escobal before our waterfall-type drop comes along and we
admit defeat on the trade.
As for entry price to this short trade, I’d prefer to see a $20-handle and will therefore hold back
some of the full position to see if that appears, but as long at $19 or above is seen again next
week I’ll open this short. Therefore as of this week The IKN Weekly goes short Tahoe
21

Resources. The trade will show up as one of our ‘Stocks to Follow’ in IKN206 next
Sunday. The target price is also difficult to nail down, what with our reliance on the fall-out
from a news event which could affect THO in different ways, but I do have a range of between
$12 and $14 mentally pencilled in for the short side, which would imply a target upside of as
much as 37% to a $19+ entry point.
Goff Corp (GOFF) (GOFF.pk): An obvious pump and dump scam, a possible short
Before we look at this company, a little context is required. Due to the nature of what I do
(mostly for the stuff on the blog, I’d expect) there’s a fairly regular supply of suggestions and
ideas from readers (both known to me previously and new arrivals) on companies that look
scammy, pumped and generally shortable ideas. I read them all (and thank you for them,
feedback and ideas always welcome) but when it comes to the US OTC or US pinksheet
companies, it takes an exceptionally scammy looking one to get me out of a mere “well that’s
one to avoid” attitude and to a level of “Hey, let’s see if we can short this one, it’s so obvious it
hurts”. For one thing, in my book just about anything that’s a mining stock and only listed on
the OTC is a default avoid situation and I have better things to worry about than to wade
through all the silly pissant listings and pie-in-sky promises on offer over there. But occasionally
a company will stand out from the pack as particularly nasty and we’ve had one alreayd this
year, namely US Graphite (USGT) that was pumped to nearly $1 before collapsing as it was
bound to do. Luckily it was also possible to get a borrow on a few shares and so we rode the
collapse down and made a profit.
That’s a little background and now down to business, as thanks to reader ‘JE’ another
screamingly obvious p&d scam has come up on the radar. The name of the company is Goff
Corp (GOFF) (GOFF.pk) and the scam is based around a wholly-owned subsidiary of GOFF,
Golden Glory Resources. Rather than claim credit or originality, I reprint here the mail that kind
reader JE sent in for my consideration:
“A junior miner called Goff Corp (GOFF.OB) and their wholly owned
subsidiary, Golden Glory Resources, have been mention in two recent
Seeking Alpha articles (21) and (22). Apparently, Golden Glory has a gold
prospect in Colombia. The 43-101 is here (23). Try not to laugh too hard. Of
course there is a steady stream of press releases (24). SEC filings also make
interesting reading (25). According to the last quarterly report, Goff has $5653
in assets and $25,564 in liabilities, signed by one Gary O’Flynn on 20
Feb.(Google name for some more intrigue). Mr Flynn was the President, CFO,
Secretary, Treasurer, and director of Goff at that time. Also chief cook and
bottle washer. Mr Flynn, evidently anticipating the need for cash for legal
fees, sold 108,750,000 shares of Goff to one Warwick Calasse on 26 Feb for
$25,000. Mr Calasse also assumed all of the above titles. And on 15 March,
the promo began and the price took off. Current market cap is $164 million
and rising. I haven’t dug any further, but it is obviously a scam.”
First thanks to JE, who is somebody who knows his way around the juniors scene well. Next,
his ‘obviously a scam’ is almost an understatement when you note for example how the
“intriguing Gary O’Flynn” has recently been charged with attempted murder (26). Next let’s
consider the new man in charge, Warwick Calasse, who is currently 30 years old and to quote
his resumé “From 2006 to 2010, Mr. Calasse held various training and management positions
with horse farms and stables in the United Kingdom and Zimbabwe”, or in other words this
company with a market cap of around $210m is in the hands of an ex-stable lad who bought
about 30% of the shares less than two months ago for $25k. The main property in Colombia
does at least have the backing of a 43-101, but on reading the thing it becomes clear just how
early stage and risky it is, besides the fact that this OTC doesn’t have the money or the permits
(or the manpower for that matter) to drill and develop in anything approaching a formal way
And to cut a long list of evidence short, on checking the web it quickly becomes clear (27) that
GOFF is being pumped by the type of bucket shop that’s inevitably behind these short-lived
shooters. Evidence of a pump and dump? We got it.
22

There are two questions that matter here:
1) How much higher will GOFF go before the plug is pulled and it goes to zero?
2) Can we get a lend and go short?
The first is the lesser of the two, because even if GOFF moves from (let’s say) 60c to (let’s say)
a buck or even higher, its return trip to zero is already a sure thing. No folks, it’s the second
one that counts as these OTC pumps aren’t easy to trade to the short side.
I’m going to try and get myself short next week but on initial scouting last Friday (when I didn’t
get any) I know that this one isn’t going to be easy; more difficult in fact than USGT, despite
the multi-million share daily volume (that’s its own red flag by the way, with nearly all the
trading happening between accounts run by the scamsters who are playing ‘find the lady’ with
the world). This short trade is a potential winner but it’s not going to be anywhere near as easy
to go live on the short, due to the poor nature of its market. However, I’m going to try and get
some and will report back next week on success/failure. The end.
Regarding the near-term trading ideas of last week
Here’s a rundown of the hear-term trade potentials we highlighted last week, with updated
thoughts where applicable. As per last week, we’ll do them in alphabetical order again.
1) Bear Creek Mining (BCM.v): We pulled the trigger on this one and it’s now an active
trade. Plenty more on BCM above.
2) Bellhaven Copper & Gold (BHV.v): We had the news Wednesday April 3rd (28) that
BCM’s (now ex) CEO Patrick Highsmith “had been” resigned, a chunk of rumour that had been
dong the rounds for a few days previously (and the reason why a couple of cryptic lines crept
into IKN204), though with no confirmation it wasn’t possible to say out loud. We also had news
the same day (29) that BHV was now conducting a thorough review of affairs and was planning
to focus its operations more on advancing La Mina and making the property and project more
attractive to potential buyers, with emphasis on met work and practical mine engineering
matters (e.g. pit-slope stability) as well as the move to drill the newly optioned La Garrucha
property, which BHv feels is a big positive catalyst. We shall see on that, but it does seem that
the plan is more about focusing on attracting mining pro attention (e.g. potential buyers) than
us little retail people and in principle at least, I’m all for that.
Trading-wise BHV had a better week, with more volume showing which is more important than
massive share price moves right now, I’d venture. Overall, last week’s developments showed
BHV to be worthy of our attention and I’ll keep watching this one carefully.
3) B2Gold (BTO.to) and Colossus Minerals (CSI.to): Here’s a joint update on these two
because I’ve had a thought experiment in my head for several days, so rather than let it go to
23

waste I’m sharing it here. The idea comes as a simple question:
“Do I want to own Colossus Minerals (CSI.to) or B2Gold (BTO.to) shares?”
The reasons start with the way in which the two stocks are currently priced very similarly,
fluctuating around $3 (and in fact, on two or three occasions last week they traded penny-for-
penny, which sharpened the thought experiment further) and that they’re both companies that
fall under the title “junior gold mining in Latin America”, but there are also big differences in the
two stocks as well:
• BTO is a producer, CSI is still in exploration-stage
• BTO makes a profit, CSI is spending cash hand over fist as it constructs its mine
• BTO has a market cap of around $2Bn, CSI’s market cap is more modest at around
$300m
What this adds up to is one stock far more volatile than another, and it showed last week as
CSI really moved around; last weekend it was $3.07, it dropped to as low as $2.61 midweek
and saw a high of $3.19 on Friday. Or if you like, a punter with perfect timing could have made
22.2% by buying shares Thursday morning and selling Friday lunchtime.
Meanwhile, BTO moved as well but at a different rhythm. It’s relatively larger size and safety of
investment due to its free cash flow and secured financing for major projects makes it attractive
as a first-stop company for anyone wanting to trade a junior goldie, but volatility is shaped as
much by heavy volume days than reaction to the underlying metal or the decisions of just one
or two traders to exit or enter.
So back to the question on offer. Do you want more risk or less? Want to roll the dice on CSI,
or have your exposure to junior golds in more measured terms. For me, personally, in the
current market the answer is a no-brainer and give me BTO every time. But that’s just me.
4) Gold Resource Corp Short (GORO): This is a position we have open already, with the
only question being whether to add to the short. As it happens, our GORO short did well last
week and added a handy 8%. Onwards.
5) Lachlan Star (LSA.to) (LSA.ax): LSA’s newsflow last week, here and here, was the type
of ‘jam tomorrow’ BS that’s too common amongst junior management teams and got me to
write an expletive laden post on the blog last week (which was, for your information and my
surprise, last week’s most popular post on IKN so it must have hit a nerve or three
somewhere). In short, LSA is now off our list of potential near-term trades and until it shows
solid results-driven improvement won’t be revisited on these pages.
24

6) Quality copper exploration names: These had a bit of a hard time last week and for the
moment at least, I’m putting the rebound thoughts for the sector on hold. The idea that copper
isn’t about to dump bigtime still stands, as does the way I expect it to reclaim $3.50/lb on the
way back to the $3.50/$3.80lb range we saw early year, but the lack of follow-through on from
copper data (inventories continue to climb, cancelled warrants % stalling, warehouses being
used to play bigger games by bigger players, etc) suggests that it might take longer than a
couple of weeks. There is value here, with the new low price of NGEx Resources (NGQ.to)
catching the eye in particular, but for the time being I’m good about sticking to the “prefer
PMs” calls that’s held in good shape in March and April.
To sum up, the preference for the Bear Creek (BCM.v) play is clear, because I’ve done it since
IKN204 was written and gone long. The GORO short and BTO long are also active and no plans
to change either of those for the moment. If I felt like sticking my neck out, CSI.to would most
appeal after watching the market last week, with BHV too small and unloved for my taste until
real news starts to flow or there’s a sustained rally in the gold sector that begins to filter
through to the little guys. Copper plays can wait and Lachlan Star is now scrubbed from the list
of potentials.
A Trevali (TV.to) trade headsup
The final piece this week and after all that shorting talk, here’s one for those of you who prefer
a simple long flip trade (and aren’t so worried about the quality or reputation of the people who
run the company) as a potential quick trading gain is on offer here in Trevali (TV.to) next week.
We hear that the delay we noted on a few occasions on the blog last week (example (30)) in
start-up of production at the Santander mine isn’t too serious and by this time next week, it’s
very likely that we’d have seen news from TV that the mine is now operating. As this is a fairly
easily traded stock (normally volumes in six figures daily) and it’s also pretty volatile, this
overdue news is likely to cause a pop in the share price, be that pop short-lived or otherwise.
Be clear: I will NOT be partaking in this trade as I have far better things to do than sully my
portfolio with any company connected to The Cardero Group of bullshitters and sophists.
However, the set-up looks pretty obvious at this point so it would be wrong of me not to
mention this potential trade to the IKN audience. Do with this what you will.
Conclusion
IKN205 is done, we close with bullet points:
• A new near-term trade opened last week in Bear Creek (BCM.v) and another opened
today in the short on Tahoe Resources (THO.to) (TAHO) makes for a more active than
usual period for my account. The BCM one should close in weeks rather than months,
as we’re looking for a quick win on the news. As for THO, that all depends on how the
story unfolds but we’re betting that it’s not nearly as smooth from here as the market is
now assuming. However, be clear that these nearer-term type trades aren’t much more
than dabbling; the potential profit may be enough to hold one’s interest but we’re not
fishing for the really big winners in this market, not yet anyway.
• On the subject of shorts, it would be nice to grab some short position in GOFF next
week and I’m going to try my best to do so. On consideration, I don’t think it’ll make
the ‘Stocks to Follow’ list even if I do because even if I get some it’s only a trade for a
small percentage of IKN Weekly readers (unlike a short in TAHO or GORO, a game
which most all of you should be able to play if desired).
• Although it’s a tiny trade and due closed in April as well, I’m quietly pleased that the
Marlin Gold long (MLN.v) is working out during such a tough market for the nanocaps.
All it needs now is a bit more volumes and a cent or twos extra interest and it’ll go
down in the win column (and how’s that for tempting fate?)-
25

• The copper sector two one step forward and two steps back and the bit of interest that
had flickered back to me about the metal has dimmed once more. Prices of some of the
good names do look tempting, however. Watching only now.
• Next week I’ll be looking for a bit more clarity on the thorny issue of the loser named
Aurcana (AUN.v). I’ve been too patient for my own good about this name in 2013, so
which wrong decision will i make this time? April 11th and 12th the days.
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
Footnotes, appendices, references, disclaimer
(1) http://finance.yahoo.com/news/bear-creek-announces-acquisition-two-170000162.html
(2) http://www.pachamamaradio.org/05-04-2013/minera-bear-creek-pretenderia-iniciar-labores-en-corani-pese-a-
problemas-con-terrenos.html
(3) http://finance.yahoo.com/news/impact-silver-corp-announces-financial-123000189.html
(4) http://finance.yahoo.com/news/rio-alto-produce-190-000-110000356.html
(5) http://classicvalueinvestors.com/i/2013/04/interview-with-lenic-rodriguez-ceo-of-aurcana-corporation/
(6) http://money.msn.com/business-news/article.aspx?feed=OBR&date=20130405&id=16319946
(7) http://finance.yahoo.com/news/curis-acknowledges-decision-town-florence-123000076.html
(8) http://www.bizjournals.com/phoenix/news/2013/04/03/fight-over-florence-copper-mine-shifts.html
(9) http://gestion.pe/politica/dialogo-frustrado-no-se-llego-acuerdo-canaris-sobre-actividades-candente-2063132
(10) http://finance.yahoo.com/news/gryphon-gold-provides-senior-credit-145103411.html
26

(11) http://www.kincommunications.com/clients/inca/pressreleases/2013.04.05/inca-one-resources-closes-953500-
private-placement/
(12) http://www.listindiario.com.do/la-republica/2013/4/1/271529/Presidente-de-minera-estadounidense-se-reune-con-
Danilo-Medina-y-pondera
(13) http://www.diariohorizonte.com/noticia/17952/0/0/experto-afirma-hay-precedentes-en-que-aduanas-ha-suspendido-
embarques
(14) http://www.foxbusiness.com/news/2013/04/05/ecuador-1-billion-investment-from-kinross-awaiting-legislative-
reforms/
(15) http://www.iprofesional.com/notas/157903-Pese-a-la-salida-de-Vale-suben-las-expectativas-de-toma-de-personal-
de-las-mineras
(16) http://www.manpower.com.ar/Upload/doc_630.pdf?r=4/6/2013%209:47:46%20PM
(17) http://www.mineriaaldia.com/tension-en-arequipa-por-proyecto-minero-tia-
maria/?utm_source=twitterfeed&utm_medium=twitter
(18)http://finance.yahoo.com/news/tahoes-escobal-project-receives-final-163707768.html
(19) http://www.calas.org.gt/
(20) http://www.noalamina.org/mineria-latinoamerica/mineria-guatemala/accionaran-legalmente-contra-licencia-minera
(21) http://seekingalpha.com/article/1317631-why-these-4-gold-stocks-deserve-a-place-in-your-
portfolio?source=email_macro_view&ifp=0
(22) http://seekingalpha.com/article/1321391-why-these-4-gold-companies-have-something-in-common?source=yahoo
(23) http://www.goffcorporation.com/reports.html
(24) http://www.goffcorporation.com/news.html
(25) http://www.goffcorporation.com/investors-sec-filings.html
(26) http://www.rte.ie/news/2013/0304/371923-conspiracy-charges/
(27) http://articles.thehotpennystocks.com/goff-corp-otcgoff-setting-up-for-a-new-week/
(28) http://finance.yahoo.com/news/bellhaven-announces-resignation-patrick-highsmith-113000152.html
(29) http://finance.yahoo.com/news/bellhaven-announces-significant-corporate-changes-161736380.html
(30)http://www.incakolanews.blogspot.com/2013/04/the-trevali-tvto-serial-bullshitters.html
Appendix 1: Flash update of Monday April 1st
Good evening, 8:30pm local time this Monday evening
IMPACT Silver (IPT.v)
After running the numbers on IMPACT Silver's (IPT.v) 4q12 and considering its somewhat vague guidance in the
MD&A, the decision is to hold the position as stands, with no selling or adding at this point. Balance sheet items came in
near exactly on our forecasts and although revenues were up, so were costs as the company probably added to the line
item with its ramping of the two new operations. Once again IPT made a mine operating profit but net loss, which was
basically what we expected.
Going forward, the most practically useful part of company guidance was to tell us that for the next couple of quarters
silver head grade would be at he lower end of estimates as the new, higher grading mine feed comes gradually on line.
Therefore we'd expect the average to stay around the 130-140 g/t Ag level in the first half of FY13, moving up towards
170g/t by year end. This implies a more gradual improvement in production than your author's current model, but it's not
a big negative either. As for costs, they came in well and guidance there is competitive. Overall, IPT looks in fairly
decent shape and it wouldn't take much of a rally in silver to see this leveraged equity rally nicely, therefore HOLD is the
call and I'm comfortable enough about this small producer remaining a long position in the Weekly, though not in a big
hurry to add.
Bear Creek (BCM.v)
The decision not to add to the IPT position has helped crystallize my thoughts on BCM and as a result, I'm going to
open a small, trading-style near-term outlook position in this silver exploration play tomorrow. The basic scenario, that of
the company benefitting from official approval of its Corani project from locals this month, was outlined in IKN204
yesterday and that's the baseline for the decision to buy into BCM now. I won't be risking much and the trade only has a
projected life of this month alone, so modest risk for equally modest potential reward (no hunting for multibag
percentage wins or anything akin). We'll also need fair winds in the silver sector for this trade to succeed this month, so
those with bearish opinions on the near-term in Ag should have ignored this trade idea already.
We'll have a closer look at BCM, in order to remind on the fundies and the Corani deposit, in IKN205 on Sunday.
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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'11 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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