IKN #209Premium

The IKN Weekly
Week 209, May 5th 2013
Contents
This Week: Shortened edition, Technology and resource nationalism, On the road.
Fundamental Analysis: OGC deferred.
Stocks to Follow: Overview, Bear Creek Mining (BCM.v), Plata Latina (PLA.v), Gold Resource
Corp (GORO), Lupaka Gold (LPK.to), Tahoe Resources (THO.to) (TAHO), Rio Alto (RIO.to),
IMPACT Silver (IPT.v), Minera IRL (IRL.to) (MIRL.L), Focus Ventures (FCV.v).
Copper Basket: Overview, Reservoir Minerals (RMC.v), Candente Copper (DNT.to), Curis
Resources (CUV.to).
The Lottery Ticket Basket: Overview, Fancamp (FNC.v), Marlin Gold (MLN.v), Darwin
Resources (DAR.v).
Regional Politics: Latin America is beginning to move to the right, Layoffs at Pascua Lama,
LatAm States versus multinational corporations, Uruguay’s “three or four” projects.
Market Watching: Jaguar Mining (JAG) (JAG.to) opens a shareholders’ rights plan (a trade
potential here), Capstone’s (CS.to) deal with BHP Billiton (BHP) augurs badly for copper juniors,
More Colorado Resources (CXO.v): Finding the fatal flaw, Western Graphite (WSGP) (WSGP.pk):
The pump is on, Shorting Gold Resource Corp (GORO) once again.
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
Shortened edition
Today’s IKN Weekly isn’t as long or complete as planned, due to time constraints at this end.
This time I’m going to keep the specific reason private but can assure that it’s non-work related
and that normal service will (almost certainly, never say never) be resumed as from next week.
In the meantime, please accept my apologies for what I consider to be a sub-standard edition.
Technology and resource nationalism
One trend in mining, LatAm or otherwise, that shows no sign of stopping is that of resource
nationalism, which can be broadly defined as host countries taking more of the revenue from
mining. The headline-making banner policy for resource nationalism is that of expropriation,
where a country decides to take back (by fair means or foul) a resource asset that was until
that moment in private company hands. Examples of this have shown up in places such as
Bolivia, Venezuela and Argentina in recent times and indeed, the acceleration of resource
nationalism is arguably quickest in those countries considered under left wing government rule
by those who look from outside. However, it’s by no means confined to those countries that use
outright nationalization (Venezuela, Bolivia), obligatory JVs with the State (Bolivia) or newly
heavy tax burdens that guarantee more than 50% of gross revenues staying in the country
(Ecuador). For example Mexico is known as a “miner friendly” nation, but it is in the process of
adding a 5% royalty on mining revenues and that isn’t some sort of pioneering move either, it’s
more a case of Mexico playing catch-up to the rest of the world (in fact, it will leave China as
the only major mining nation not to levy a royalty on production). The raising of royalty and/or
1

tax burdens is, after all, another form of resource nationalism and is a common factor in Chile,
Peru, Canada, Australia, The USA and every other major mining jurisdiction in the world. Just a
little more gentle than stripping the asset out of a company’s balance sheet.
But what is there to stop countries from taking more and more of the pie? Taken to the
extreme of the argument (i.e. where the Venezuelas of this world are located) if Country X has
the means to dig the deposit all by itself and keep 100% of the riches then why should it offer,
say, 50% to somebody else? One answer is in what the private company can bring to the table
and on this score the future really doesn’t look that bright for the private, corporate, financially-
focussed mining sector (or for its shareholders). History shows that private individuals (be they
human persons or corporate persons) make themselves rich by bringing an edge, a new
technique, a smarter or more efficient way of dong things to the table. When it comes to
mining, we’ve seen a lot of technological advances over longer-time but not so much in the way
of game-changing technology recently. What’s more, geological academia has brought the kind
of the theoretical advances that have made the discovery of (theoretically at least) large and
economically attractive deposits easier to do (Mr Lowell and his paper on porphyry deposits,
Exhibit A). Once upon not such a long time ago, national governments needed private brains in
order to advance their mining industry but these days, just about everything that needs to be
known in order to be at the cutting edge of mineral prospecting, exploration, development and
extraction is out there for anyone to read, learn and utilize. The mining industry isn’t developing
the type of new and more efficient technology that gives it a negotiating advantage with the
owners of the properties which it wants to mine, which means that nowadays it’s negotiating
from a position of weakness. Meanwhile, countries all around the world (not just in LatAm) are
thinking “Hey, we can do all this for ourselves just as well, we don’t need to bring in the outside
help any longer, no need to lose X% of the revenues to the foreign company”. The call is
therefore for the mining industry to improve its lot and make itself more attractive to those
countries that are now after more of the pie. Along with world-class attitudes towards the
environment and workplace practices, newer, better and more efficient mining methods will
make them partners of active choice, rather than the current trend of increased grudging
resentment.
On the road
A gentle reminder that next week I’m visiting the Rio Alto (RIO.to) La Arena mine in La
Libertad, Peru. As well as that visit, I’ll be catching up with a couple of companies during my
stopover in Lima with a particular interest for the meeting scheduled with Lupaka Gold (LPK.to)
on Wednesday morning.
Fundamental Analysis of Mining Stocks
OceanaGold (OGC.to) 1q13 results
This was going to be the main Fundies feature, but time and circumstances of my weekend
2

have beaten me. I will say that the OGC 1q13 numbers as announced last Monday April 29th (1)
were in my view perfectly acceptable and I’m relaxed and good about holding through on the
stock. There will be more on this subject next weekend.
Stocks to Follow
There are 13 ‘Stocks to Follow’ open. Of those, four registered gains on the week (OGC.to,
LPK.to, IPT.v, GORO short) two were unchanged (LRA.v, FCV.v) and seven went down (RIO.to,
BTO.to, IRL.to, PLA.v, BCM.v, TAHO short, AQM.v). The biggest upmove came from Lupaka
Gold (LPK.to up 20.0%) while the biggest downer by quite a way was Plata Latina (PLA.v down
43.3%), followed by AQM Copper (AQM.v down 10.0%) which shifted down on a half cent
move.
Overall I’m carefree about the picture last week, as despite the small losses here and there the
general scenario fits right in with our theory of a market that’s bottoming out. No worries about
1% or 3% moves in either direction so even the paper losses in BTO and RIO are not that big a
deal. The moves of two to three weeks ago are one thing, sweating small stuff is quite another.
With the addition of the GORO short there are 13 stocks on our open list, two less than our
self-imposed maximum. Three of those positions are green out there, ten red.
Company Ticker this week Avg Price Reco date Current PPS Gain/Loss% Notes
Top Picks
Rio Alto Mining RIO.to buy C$2.30 07-apr-11 C$3.69 60.4% $6.29 tgt, added Apr13
B2Gold BTO.to buy C$3.07 28-nov-12 C$2.41 -21.5% $5.70 tgt added Apr '13
Recommends
Minera IRL IRL.to buy C$0.73 22-jul-12 C$0.41 -43.8% $1.56 tg, added, new avg
OceanaGold OGC.to hold C$3.03 16-sep-12 C$2.15 -29.0% $5.34 tgt growth prod
Lara Expl. LRA.v buy C$1.15 08-apr-12 C$1.08 -6.1% solid biz model, LT hold
Plata Latina PLA.v selling C$0.79 10-apr-12 C$0.17 -78.5% try to sell
Lupaka Gold LPK.to spec buy C$1.12 23-oct-11 C$0.33 -70.5% holding, tgt 61c
IMPACT Silver IPT.v buy C$1.14 13-jan-13 C$0.69 -39.5% new position, $1.85 tgt
Bear Creek BCM.v selling C$2.58 01-apr-13 C$2.41 -6.6% near-term, time run out
Tahoe Resources TAHO short U$18.62 08-apr-13 U$16.85 9.5% new near-term trade
Gold Res Corp GORO short U$10.00 03-may-13 U$9.92 0.8% new return to short
Smaller/Riskier
AQM Copper AQM.v hold C$0.31 16-oct-11 C$0.045 -85.5% holding thru for my sins
Focus Ventures FCV.v spec buy C$0.175 01-jul-12 C$0.11 -37.1% revised tgt 25c
Closed in 2013 closed close price
USA Graphite USGT feb'13 U$0.93 08-jan-13 U$0.17 81.7% short 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
Aurcana Corp AUN.v apr'13 C$1.07 11-nov-12 C$0.55 -48.6% closed on poor YE results
Gold Res Corp GORO apr'13 U$14.11 25-jan-13 U$9.38 33.5% short tgt made/trade closed
Marlin Gold MLN.v apr'13 C$0.075 10-feb-13 C$0.065 -13.3% closing this week (def)
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): Selling. I still like the general set-up here, but time has run
out on this near-term trade idea. Too often I’ve been guilty of hanging on to an idea for more
than its allotted time so on this occasion (and going forward too) I’m getting strict with myself.
3

Yes, BCM has a world-class project at Corani, but we’re still only half way through the 2013 EIA
permitting track and the bounce that I was looking for on the news of local approval simply
hasn’t appeared. Therefore I’m going to sell, take the small loss (due mostly to a badly timed
first purchase, as the second buy was right around the current price) and move on with a little
more cash in the account. That’s not a bad thing in the current market.
The plan while we bounce around the bottom is to dip in and out with near-term trades, rather
than try to set up true investments for the longer haul. To do that, selling is as important as
buying (and we don’t have the luxury of calling buy on half the market without ever selling
shares, unlike the merchants of utter bullshit that “advise” its public out there).
Plata Latina (PLA.v): Selling (if possible) After a long quiet period (part of the problem
when your junior exploreco is after a deep target) and the news wasn’t that great, either. The
headline of 1,114 g/t Ag over 1.7m wasn’t bad, but it’s not up there with the previous eye-
opening holes and along with the headline number came several other assays that were
mediocre at best. Late Friday PLA saw 814 shares sold at 17c, which caved the stock 9c (even
though the bid at the close was 25c) so we’re likely to get a paper improvement from this
weekend’s close whatever happens, but frankly the reasons to hold this loser have run out and
if there’s enough volume next week, your author will sell.
However, the chances of volume aren’t so great (and I’m travelling, which is particularly bad
when trying to move around a lightly traded stock) so the sale here is with a clear caveat, “if
possible”. No need to suddenly sprint out at the first offer (fire sale) price after so long. I’ll take
25c I suppose, 30c definitely. But not 17c.
Gold Resource Corp (GOTO): Short re-opened. See below in ‘Market Watching’ for more
about the reasons behind the new trade. Here we note that the Flash update of Friday morning
(see appendix 2) just about marked the top price of the day and due to the marked change in
direction (I blame myself) your author didn’t wait those couple of hours before uncovering and
took the 10-handle before it turned back into a 9-handle. Also, the full short position wasn’t
taken on Friday, because the chances of GORO drifting back over $10 again are pretty high and
I’m waiting for some value for the rest.
Lupaka Gold (LPK.to): Three fronts to cover here. First up, we had news from LPK (2)
announcing the start of its 2013 field season, now that the rains have abated in the Crucero
region of Puno, Peru. The 2013 campaign there seems to be based around baseline geology
work that won’t cost as much as a full drill campaign, as “mapping and sampling” are the
highlight words picked up, as well as the company’s desire to “identify high-priority drill targets”
rather than drill targets already ID’d. Meanwhile, LPK also plans to continue baseline geological
work at its Invicta project (the one inherited by the overly expensive merger with AAG) with an
emphasis on exploration outside the current resource area.
Second, we note the trading action in LPK. The 20% price rise was a sight for sore eyes (long
may it continue) and even though volumes weren’t fantastic, the 115k Friday and 81k Thursday
were reasonable at least.
Lastly, next week I have a meeting scheduled in Lima with Julio Castañeda, President of the
wholly owned Pacacorral subsidiary company that runs ops in Peru for LPK. At that meeting
(that has taken a while to set up, but we now have it) I’ll get to find out whether my
assumption above about the (lack of) drilling planned at Crucero in 2013 is correct or wrong,
the general state of play in the company and how LPK sees the months ahead developing.
Therefore, with more detail in place, next weekend we can make a more proactive decision
about what to do with this losing position.
Tahoe Resources (TAHO): by the looks of my mailbox, there’s a certain section of the
market that’s getting pissed off with your author’s coverage of Tahoe Resources (THO.to)
(TAHO) recently. We’re not going to dwell on the new headline-making occurrences in the San
4

Rafael las Flores region, nor the State of Emergency called by the Otto Pérez government, nor
the violence, nor the ensuing fallout and that’s because there’s suddenly a dozen places at
which you can read all about THO at Escobal, rather than just here (which include the
Guatemalan Government’s State news agency, reporting today on the visit to the zone of
President Otto Pérez Molina (3)). Rather, I want to make just one point:
I have not always been right about THO, particularly when refusing to take on the company at
the very beginning (and people, I was even offered a slice of the IPO back in mid-2010, to
which I said thanks but no thanks). However, the reason behind my refusal to cover, buy, hold
or generally say the nice things that the instos and rock-centric analysts have always said about
the company has never changed, not once in nearly three years: POLITICAL RISK AT ESCOBAL
IS VERY HIGH, FAR TOO HIGH TO INVEST IN A COMPANY WITH THIS TYPE OF HIGH MARKET
CAPITALIZATION. That’s the only message I’ve ever had about THO at Escobal Guatemala: The
rocks are great, the management team steeped in mining ability, but the political risk was, is
and will continue to be way too high.
So with the market the way it is and the escalation of the troubles (that has grown over
months, rather than suddenly popped out of the nowhere that the new, high-level coverage
might want you to believe) your author went short the stock recently and now, things are
starting to slide out of control*. This is a very easy short position to continue holding and
there’s no need to push any sort of agenda either, as wider media has now been awoken to the
story and I expect that the NGOs hanging around this story (like it or not, they exist and they’re
there, whatever the true reason for their existences might be) will do their darndest to keep the
issue in the news. For example, watch out next week as the local anti-mine protesters take
their protest out of the emergency zone and to the streets of the capital city (8) on May 7th.
This is a good hedge for the long parts in your author’s portfolio and will remain that way
until/unless a waterfall drop comes along for a quick and sharp gain.
*Being clear, last week’s events and the large-scale police/army presence in the regions around
Escobal are the start and not the end of real trouble. It’s now a question of when, not if, things
get worse for THO.
IMPACT Silver (IPT.v): It was good to see IPT rally for the outsized low we’ve be obliged to
report recently, with bits of volume traded too (though nothing really big). With bullet duly
bitten and the decision to jettison the near-term trading position Bear Creek (BCM.v) made, IPT
5

now carries just about all the flag for silver in the ‘Stocks to Follow’ portfolio (barring the early
stage targets at FCV etc) so there’s more personal interest to hold on to this position, for a
while at least, and to see what silver does in relation to gold. Therefore the tentative decision
after the mulling of the last two weeks is to hold through on IPT for the time being.
Rio Alto Mining (RIO.to): Expect photos, and a full report on RIO next week as your author
visits La Arena. Meanwhile, if we take
the January and February production
RIO.to: Monthly gold production figures
numbers as reported to Peru’s Mining (March '13 estimated)
Ministry (Feb’s numbers published last 25000 24401
22500
week) then subtract them from the 20144 19560
20000
q
g
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a
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o
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u
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b
I
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r
, w
fo
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r
17500 16692 17639 1542615091 15998 17039
15000 12887 1379313670
the company as well, which shows the 12500 11871 10712 11973
type of production sag in February 10000
and then rebound in March that fits 7500
with the throughput upgrade to 5000
2500
36,000tpd and guidance for the rest
0
of 2013.
Minera IRL (IRL.to): The only thing noteworthy about IRL’s week was its lack of traded
volume in Canada (less than 50k all week), though things were a little better for its London
ticker (175k all week). We await news on whether the company has nailed down a financing
deal for Don Nicolas and if so, the terms of said deal. As a small space in my travel agenda has
appeared next week while in Lima, I’ve been invited over to IRL HQ and will be able to find out
face-to-face on any progress to report. It’ll be worth it if only for the coffee there (which is a
very good cup).
Focus Ventures (FCV.v): We had news from FCV last week (5) which was a bit of a mixed
bag. To the downside, FCV informed that it has dropped the Santa Cruz property option, which
was the main and large area of Santa Cruz/Reventon property it was optioning in Mexico. On
asking for more detail, FCV President Cass told your author that that option was expensive and
maintenance would be running at an average of $30,000 per month (over a reasonable period
of time with which the company could work), which was becoming difficult to justify considering
the current state of the market and the company’s decision to concentrate the first part of its
drilling program on the Reventón end of the Santa Cruz/Reventon project. FCV had tried to
renegotiate the deal with the owners of Santa Cruz, but they wouldn’t budge, so the decision
was made to drop the option. I wasn’t pleased to see Santa Cruz dropped, but it is an
understandable decision for a company as small as FCV. Yes sure, it’s nice to hold decent and
prospective concessions but if you don’t have the treasury with which they can be advanced,
such holdings are more of a liability than an asset, particularly in today’s market.
However, the good news from the NR is that drilling has begun on Reventón, the property FCV
is optioning from International Northair (INM.v). The plan is for up to eight holes that cover
2000m of drilling, with three specific targets chosen. By way of a little background (and to
explain why Reventon has been chosen over Santa Cruz as a drill target, President Cass told
your author that via previous drilling and current geological mapping/exploration, Reventon is
understood as the target which will give up the highest grades in any drill assay result. Santa
Cruz is/was interesting, but the initial plan there (now dropped) was to drill out a large, bulk
resource of perhaps 2oz/t silver via long intercepts. As the market has shown recently (via
SOL.v, LVN.to, SVBL, any number of others), the big lower grading bulk silver operations or
projects have gone way out of fashion and FCV considered the best shot it had of waking up
the market to its potential was to go for the lesser widths but likely higher grades that
Reventon had to offer. I agree with this strategy (esp for a sub-$5m market cap exploreco) so if
FCV hits the type of rock that is potentially there (5m or 7m of 8oz or 10z silver per tonne
6
21naJ bef ram rpa yam nuj luj gua pes tco von ced 31naJ bef ram
Ozt Au
source: MEM

material would be fine), FCV may well have some life in it yet. As these holes are short ones,
we can expect news to start flowing from the assay results within five or six weeks. Until then,
your author holds his FCV stock for sure.
The Copper Basket
After eighteen weeks of 2013 The Copper Basket is showing a 19.25% loss to level stakes.
company ticker price 1/1/13 Shares out Market Cap current pps gain/loss%
1 NGEx Resources NGQ.to 3.40 158.5 370.89 2.34 -31.2%
2 Augusta Res AZC.to 2.43 144.1 366.01 2.54 4.5%
3 Lumina Copper LCC.v 9.43 43.46 349.85 8.05 -14.6%
4 Copper Fox CUU.v 0.83 399.61 239.77 0.60 -27.7%
5 Nevada Copper NCU.to 3.50 80.5 197.23 2.45 -30.0%
6 Hot Chili Ltd HCH.ax 0.72 286.78 163.46 0.57 -20.8%
7 Reservoir Min. RMC.v 2.41 41.46 114.43 2.76 14.5%
8 NovaCopper NCQ.to 1.80 51.89 98.59 1.90 5.6%
9 Western Copper WRN.to 1.39 93.78 71.27 0.76 -45.8%
10 Panoro Minerals PML.v 0.62 176.25 50.23 0.285 -54.0%
11 Curis Resources CUV.to 0.70 56.31 45.05 0.80 14.3%
12 Candente Copper DNT.to 0.375 121.93 40.24 0.33 -12.0%
13 Yellowhead Min. YMI.to 0.59 60.97 23.17 0.38 -35.6%
14 Oracle Mining OMN.to 0.80 49.03 22.06 0.45 -43.8%
15 Strait Minerals SRD.v 0.08 56.86 2.56 0.045 -43.8%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg -19.25%
There were six names that improved on the week (LCC.v, AZC.to, RMC.v, DNT.to, YMI.to,
CUV.to) and nine that dropped
(NGQ.to, CUU.v, NCU.to, HCH.ax, Copper Basket 2013 average, weekly
WRN.to, PML.v, NCQ.to, OMN.to, 16%
SRD.v) and overall we saw slight 12%
improvement for the overall basket 8%
number last week, thanks to some 4%
rebound pops from the smaller players 0%
-4%
on the list. However, it’s fair to say that
-8%
none of the moves in the “serious”
-12%
players was that big in either direction.
-16%
Top winners were Candente Copper -20%
(DNT.to up 22.2%) and Yellowhead
Mining (YMI.to up 15.2%) while worst
losers were the tiny Strait Minerals
(SRD.v down 18.2%) and Oracle Mining
(OMN.to down 16.7%), which has really been beaten up badly during the recent market
weakness.
Moving to the price action in copper last week, and it was in football parlance a game of two
halfs (Brian). The chart here shows how copper sunk under $3.10/lb midweek, only to stage a
mother of a rebound late Thursday and Friday (the term “short covering” was heard a lot
Friday) that was started by Asia traders and boosted by the stronger than expected U.S jobs
numbers. Fair enough. If economic expansion is the order of the day then you’d expect the
industrial metals to beat out the precious metals, but that was a big 5% rush-up on Friday and
although the jobs numbers were positive (with people oohing and aaahing over the previous
monthly adjustments in particular) there’s debate on just how much you can read into one set
of figures now on (see Calculated Risk, with McBride’s measured approach more my taste) so
7
ht6naj ht31 ht02 ht72 r3bef ht01 ht71 ht42 dr3ram ht01 ht71 ht42 ts13 ht7rpa ht41 ts12 ht82 ht5yam
source: IKN calcs, TSX data
31/1/1
morf
egnahc
%

let’s see how copper gets on next week (esp compared to gold) before making any big calls.
As for market chatter, the best thing I read last week on copper, and by a long way, was Andy
home’s piece on the myth of how the copper warehouses, particularly those of the LME, are tne
“market of last resort”. Read this article (6) and you’re bound to learn at least something (or in
my case many things) about how the LME system works for (or is rigged against) end users.
We get to inventories, with last week seeing an overall drop in world copper stocks to 900,318
metric tonnes (mt). The LME
Cancelled Warrants at LME, IKN157 to date
inventories dropped 1.8% to
35%
608,700mt, with the biggest
30%
drops reported in the LME
25%
warehouses of South Korea and
Singapore. Shanghai Futures 20%
warehouse stocks dropped 15%
1.6% to 213,782mt, but the 10%
trend was bucked by the
5%
Comex warehouse stocks, that
0%
moved up 2.9% to stand at
77,836mt. We again remind
readers of the “new aggressive
Comex” that was announced a
few weeks ago; since then its
stocks are up by over 10%. Finally, LME cancelled warrants stood at 26.1% of inventory on
Friday, barely unchanged from the last three weeks. The jury still out there.
Now for updates on some of the basket stocks:
Reservoir Minerals (RMC.v): It’s the way of these things, the one that you want to drop for
a purchase point is the one that shows the best action. It’s ok, I can wait.
Candente Copper (DNT.to): DNT reacted positively on the week to the news that Peru’s
government is walking back its Indigenous Prior Consultancy Law plans and will now insist that
the prior consultancy law doesn’t apply to Quechua-speaking communities (with the concept of
“indigenous” now largely confined to those peoples in the Amazon jungle basin areas). The
story was broken by Mitra Taj and Teresa Cespedes of Reuters Lima on Wednesday (7) and by
8
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 702NKI 902NKI
source: Cochilco, LME
rof
yrotnevni
EML
%
latot
yreviled
resu-dne

Friday had been confirmed by the one of the country’s Vice-Ministers resigning from his post in
(8) protest at the decision. The news is seen as a win of sorts for Mining and Energy Minister
Jorge Merino, who has been pushing to limit the scope of the Prior Consultancy Law and has
apparently succeeded. It remains to be seen how effective the policy change might be and your
author’s best guess is that it either does more harm than good on a practical level, or has no
effect at all in isolated spots such as Cañaris. And that’s even if Cañariaco is one of the 14
projects that the Humala government has decided as not needing to go through prior
consultancy (apparently the list has been made, but the government has so far refused to make
it public).
Then this weekend we had another round of the Working Round Table negotiations (9)
between locals, government and company representatives that got nowhere fast, due mainly to
the stance from locals that their indigenous background must be respected and their right to
prior consultancy maintained. The feuding local groups then heard the government say that the
decision as to whether Cañaris locals would be considered indigenous would be announced in
approximately two weeks, at which point they left the meeting early in protest at the
government stance.
Curis Resources (CUV.to): The town versus company saga goes on. This report dated May
1st entitled “Town Remains Opposed to Florence Copper Project” (10) gives the latest, but also
gives the impression that, legally speaking at least, the argument is moving CUV’s way, albeit
slowly. Meanwhile at market CUV shares rose 5c on the week, but traded volumes were
particularly thin (just over 50k traded all week) and the stock received very little interest.
Everyone watching the same newswire flow with the same attitude, it seems.
The Lottery Ticket Basket
After 18 weeks of 2013 The Lottery Ticket Basket is showing a 23.13% 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 18.76 0.270 116.0%
2 Marlin Gold MLN.v 0.10 192.39 11.54 0.060 -40.0%
3 Fancamp Expl. FNC.v 0.125 118.41 9.47 0.080 -36.0%
4 Bellhaven BHV.v 0.14 121.16 8.48 0.070 -50.0%
5 Glass Earth GEL.v 0.155 104.79 7.86 0.075 -51.6%
6 Gryphon Gold GGN.to 0.085 194.64 7.79 0.040 -52.9%
7 FDG Mining FDG.v 0.13 45.59 5.93 0.130 0.0%
8 AQM Copper AQM.v 0.08 105.57 4.75 0.045 -43.8%
9 Copper North COL.v 0.10 58.62 3.81 0.065 -35.0%
10 Rio Cristal RCZ.v 0.025 149.26 3.73 0.025 0.0%
11 Inca One Res. IO.v 0.12 34.0 3.06 0.090 -25.0%
12 Darwin Resources DAR.v 0.20 26.16 2.75 0.105 -47.5%
13 Cream Minerals CMA.v 0.03 155.34 2.33 0.015 -50.0%
14 Firestone Ventures FV.v 0.045 36.32 1.45 0.040 -11.1%
15 Netco Silver NEI.v 0.025 47.01 0.94 0.020 -20.0%
Portfolio avg -23.13%
Up just over 1% on the week, which means the overall basket has trodden water for the last
three weeks, more or less. As for the players, five went down (MLN.v, BHV.v, FNC.v, AQM.v,
DAR.v), four went up (GGN.to, EGE.v, IO.v, FV.v) and six were unchanged (GEL.v, FDG.v,
COL.v, CMA.v, RCZ.v, NEI.v) and of all that lot, only the 22.2% drop in Darwin Resources was
big enough for individual note, so the general microcap ennui continues unabated.
9

25% Lottery Ticket Basket 2013 average, weekly
20%
15%
10%
5%
0%
-5%
-10%
-15%
-20%
-25%
10
ht6naj ht31 ht02 ht72 dr3bef ht01 ht71 ht42 dr3ram ht01 ht71 ht42 ts13 ht7rpa ht41 ts12 ht82 ht5yam
source: IKN Weekly data, TSX
2102/1/1
morf
egnahc
%
Fancamp (FNC.v): Last week gave a good indication as to just how far out of fashion iron ore
projects are currently. FNC announced Thursday (11) that its Lac Lamêlée South Iron Project
has a 43-101 compliant inferred resource of
520 million tonnes grading 39.5% Fe2O3, as
well as being a project that sits in close
proximity to other decently sized Fe
deposits and under reasonable ballpark
economic assumptions (for this stage of the
exploration process) including $120/mt iron
ore. On this news, here’s what the stock
price did:
In other words, nothing. In other words, all
that rock is worth practically zero in the
eyes of the market that fully values FNC on
its shareholdings in other companies (see
previous Weeklies for the rundown on its Champion and Argex holdings, if reminders needed).
Marlin Gold (MLN.v): Just a quick reminder to readers that MLN is hosting an analyst site
visit at its Trinidad project this week (Monday May 6th the main day, if memory serves), which
may in turn generate more radar exposure and talk about this company, especially as Trinidad
is now under construction and expected to start production early next year.
Darwin Resources (DAR.v): In IKN199 dated February 24th your author reported on the site
visit to the DAR Suriloma project. At that time the company share price stood at 15c and one of
the things your author wrote as part of the report conclusion was:
“...the way things are in the larger macro scene, I see less reason to add yet
another illiquid position that might drop to 10c before making its move on any
true newsflow. therefore the official call here is “wait and see”.”
Today, DAR finds its share price at 10.5c after some very minor selling (10k shares Wednesday)
decided it wanted out at any price available. It’s taken a while to get here but at this price, DAR
is a stock that the risk-taking penny players amongst this audience may want to consider today,
what with the Suriloma drill program due to start up this month of May.
Regional politics
Latin America is beginning to move to the right
It’s one of those things that’s barely perceived for months on end, then a sudden larger shift
makes you aware of the ground that’s already moved. That bigger shift has been in the last
couple of weeks. It’s also something more subjective than anything that can be objectively

nailed down, but over the last few months a trend of regional politics moving back again
towards the right of the political spectrum has started to make itself apparent. Despite the top
sentence there are some clear results to this observation already which include:
• The decline in popularity of Juan Manuel Santos in Colombia, who has become too
centrist for many of the right wing voters who brought him to power
• The continuing rightwards move of the Ollanta Humala government in Peru, particularly
on key macro policy matters
• The stronger than expected showing of Henrique Capriles in the recent Venezuela
presidential election
• The return to power of the Colorado party in Paraguay
• A resurging “Traditional Peronist” wing in Argentina that’s now making overtures to
classic right wing politicians and is in open conflict with the more left-wing “Kirchnerist
Peronism” of CFK (although left/right splits in Argentina are not so easy to define under
the Peronist banner).
Aside from those objective points of evidence, there are other matters such as the way in which
the Concertacion in Chile or the PRI party in Mexico, although nominally left-leaning “people’s”
movements now represent mainstream establishment views and policies and have little to do
with classic left wing policies or governments. With EPN’s victory in Mexico via a re-vamped PRI
that has emerged from the scandal and corrupt remains of 10 or 15 years ago, plus the near-
certain return to power of Bachelet in Chile, there’s very little to concern big business about the
future of either country. As for the region’s biggest player, Brazil’s PT “Worker’s Party” has
turned into a shadow of its combative 1990’s self under the auspices of first Lula and then
Dilma, which is the pragmatic price it has paid in order to take and retain power. Think New
Labour under Tony Blair.
The move to the right in the region also coincides with the new wealth created during the
resource boom of the last ten years, which may have started in places such as Chile and Brazil,
but the recent shift has been to the emerging economies of Peru, Colombia, Panama and yes,
even Nicaragua, Venezuela, Ecuador and Bolivia (because despite what you might hear, there
are no shortages of satellite TV connections and Smart Phones in any of those places. The new
middle class has arrived and although it may have been kick-started by leftist programs of
better health services, food for all, better quality free education it’s now looking to consolidate
its new found wealth in numbers, which is the type of message that the right-of-centre
politicians thrive upon.
I have more to say on this subject and it’s going to be a key factor in the well-being of the
region’s mining industry in the years to come too, because when talking about “the left” in
LatAm, we’re not considering a pretend fakey bugbear left in the style that the right wing of the
USA tries to paint its current President. No people, the left down this way is the real thing and
any waning of its influence will be positive for mining company bottom lines.
Layoffs at Pascua Lama
Chilean media reported this week (12) the laying off of 400 of the 442 workers subcontracted
via the company Redpath to construct the underground tunnel that is due to connect the
Argentine and Chile sides of the Barrick (ABX) Pascua Lama project. The reasons behind the
layoffs were due to a “restructuring phase for the project in light of recent events”, referring of
course to the halt imposed on the Chile end of the project by Chilean courtrooms due to
environmental rulebreaking.
Although the 400 subcontracted layoffs represent a small number compared to the
approximately 13,000 people currently employed at Pascua Lama (which are broken down into
approx 4,000 on the Chile side and 9,000 on the Argentina side), the Chilean workforce under
union contracts (i.e. not subcontracted) are concerned with the development and have
demanded talks with the company, as according to their spokespeople the agreement with ABX
only guarantees salaries to May 31st this year, i.e. the end of this month. The implication is that
11

last week’s redundancies are the thin end of a wedge thatmay just grow, and quickly.
LatAm States versus multinational corporations
A rarity in my line is the English language article on a LatAm political/economic event that’s
head and shoulders above anything written in Spanish, but here’s one to report. I saw the
conference in question reported in Spanish on Monday, but only when reading this article (13)
did the potential gravity strike home. The occasion was the “Ministerial Conference of Latin
American States Affected by Transnational Interests”, held in Ecuador and attended by
ministerial level delegates from 12 countries with the objective to consider a pan-regional
stance against the number of law suits being brought against LatAm countries by companies
using free trade agreements and bodies such as the World Bank’s ICSID/CIADI tribunal system.
It’s not an article that’s easily excerpted and due to that, you’re encouraged to read it all at the
original site. However, the thrust is that countries are now taking exception to suits brought
against them which, for example, may rule that a country must break its own constitution in
order to compensate a company. As junior mining companies are amongst those that take
countries to court when things don’t go their way in the host of choice (examples include Pacific
Rim in El Salvador, Crystallex in Venezuela, South American Silver in Bolivia), what we may be
seeing here is a breakaway of countries that are now organizing themselves into a bloc that will
refuse to recognize any ruling that goes against them and demands compensation be paid to
the unfortunate, hard-done-by junior.
Uruguay’s “three or four” projects
Another lukewarm attempt to promote mining activity in Uruguay came last week via its
Minister for Industry and Mining, Roberto Kreimerman, who said that currently “between three
and four companies are currently in exploration activities” in the country” during an interview in
the country’s newspaper, La Republica (14). He went on to defend mining against the
accusations made by environmental groups by saying (translated), “I believe that a
fundamental component is the lask of information on what are the effects possibilities and
capacities (of mining), as much in terms of environmental damage as the what mining brings to
the country (financially).” He then detailed that reforms to the current mining law currently
being studied in the country’s Senate involve the setting up of a sovereign fund in the same
lines as that of Norway and its fund for hydrocarbons production, and that taxes levied on
mining activity would imply a State burden of at least 50% and as much as 60%.
Market Watching
Jaguar Mining (JAG) (JAG.to) opens a shareholders’ rights plan (trade potential)
A late Friday NR from a junior usually catches my eye, because cynical me can’t help but think
that companies are trying to slip mandatory reportable news past the majority of market eyes.
This one (15) from Jaguar Mining (JAG) (JAG.to) dated May 3rd is no exception, as it
announces a shareholders’ right plan that covers as from May 2nd...so why did they wait until
the evening of the day after to announce it?
The other pressing matter around Jaguar Mining today is this (16), the early December 2012
NR that announces this minor matter:
The NYSE requires that the average closing price of a listed company's common stock be above
$1.00 per share over a consecutive 30 trading-day period. As of November 30, 2012, the date of
the NYSE notice, the 30 trading-day average closing price of Jaguar's common stock was $0.94
per share.
Under the NYSE's rules, Jaguar has a period of six months to bring its share price and 30 trading-
day average share price back above $1.00. During this period, Jaguar's common stock will
continue to be traded on the NYSE, subject to compliance with all other NYSE continued listing
requirements. As required by the NYSE in order to maintain its listing, Jaguar will notify the NYSE
by December 14, 2012 that it intends to cure the price deficiency.
12

I’m sorry, I shouldn’t be ironic in the middle of business-type script as it might be misconstrued:
It is in fact a serious matter and a potentially big negative for JAG. Therefore, what with the
timing of the shareholders’ rights plan, one can’t help but wonder whether management at JAG
are throwing a Hail Mary in order to try and get some BS M&A talk started around the company
and get JAG above that magic $1 level, if only for a day, in order that it might at least be in a
position to negotiate its listing with the suits at the NYSE and keep its listing. Strictly speaking
JAG has until May 29th to get its average up to $1 which looks way too tough for a stock price
that has done this in the last six months...
...and it should also be noted that JAG could always decide to do a reverse split and magically
get its share price above the required minimum, but what we do have here along with the
weekend news is a stock that has been subject to pumpy moves before that’s looking at the
right sort of rumour-fuelled set-up today.
However, we should be clear and say that the fundies remain crappy in JAG. The 4q12 results
(17) didn’t impress, and the way in which it is fracturing cash supposes that on a straight line
basis and even assuming it takes full advantage of the $25m credit line it has in place, the cash
treasury will run out at some point around mid-2014 and Chapter 11 beckons.
However, JAG does have some fixed asset value, starting with its Gurupi project that it hasn’t
managed to develop into production through lack of cash, which also comes withe the potential
advantage of the project not having been ruined by the mediocrity of the JAG management
team. Selling Gurupi alone may be enough to get JAG out of hock, or in other words it may be
enough of an asset catch for a third party to make a hostile offer for JAG as a whole and then
strip the company into bits, keeping what it likes.
At a market cap of just under $37m and a book value of around $150m (which doesn’t take into
account any asset write-downs on its working (badly) properties of course), the new low share
price of JAG does leave room for a bid on what’s left. Needless to say it’s high risk stuff in the
current market atmosphere, but the company share price does have a record of responding
positively to market rumourmilling so it’s a stock your author will have back on his radar screen
in the days to come. There is a possible near-term fliptrade here, but before moving in I’ll want
to see if any traction is gained by this weekend’s NR.
13

Capstone’s (CS.to) deal with BHP Billiton (BHP) augurs badly for copper juniors
The news late last Sunday (18) that Capstone Mining (CS.to) is buying the BHP’s Pinto Valley
mine in Arizona for $650m cash may have been considered a positive for M&A activity in the
copper sector by some, but your author believes it sends a doubly negative message to the
copper exploration sector.
Firstly, we note that BHP Billiton is a seller of mining assets, rather than a buyer. We
understand that BHP had Pinto on its books at a carrying value of something under $300m, so
the deal means that BHP’s balance sheet gets a boost. This will help shareholder acceptance of
the proposed deal, but the fact that the biggest major of them all is getting rid of what is (for
BHP at least) a smaller scale operation and has made it clear that other held assets are up for
sale too does not bode well for any company looking to sell its non-producing base metals
project to the market. Your potential buyer is not even that, it’s direct competition looking for
its own buyers.
Meanwhile the deal struck by Capstone (CS.to) for Pinto Valley looks cheap compared to the
type of junior copper project that the rest of the world might sell to them. For $650m cash (on
friendly financing terms) it gets a 50,000tpd throughput mine with a definite 12 year life and
the potential for a lot longer (I’ve seen up to 50 years mentioned in analyses this last week)
which has just been through a $200m asset upgrade paid for by BHP. But what’s more, it’s
already operating and a cash-flow positive mine! Compare that small fact to any of the
companies we feature in The Copper Basket and they all come up short, especially when you’re
considering a downpayment to buy the junior, then upwards of $500m to build your mine (and
a LONG way upwards for the bigger projects) and then the time value of money as you wait for
years before the new mine comes online. CS at Pinto Valley gets an operating mine that’s good
for 130m to 150m lbs copper at a post-credit cash cost of around $1.80/lb. That’s the type of
cash flow that pays for itself quickly and in fact, Cs will probably break even on its investment
before Yellowhead’s, Copper Fox’s, NGEx’s, Lumina’s, Western Copper’s flagship project see a
single pound of copper produced, even if they sold to the highest bidder tomorrow morning.
The bottom line to the BHP/CS deal last Sunday is that 1) the majors are not buying your
copper project, they’re selling their own and 2) there’s a whole new bunch of assets that are on
the market and in direct competition with the exploreco assets and they’re making some of the
new, undeveloped mines of the future look decidedly expensive right now.
More Colorado Resources (CXO.v): Finding the fatal flaw
Last week we made mention of Colorado Resources (CXO.v) and its big price move via drill
discovery and at that time, the stock stood at 65c. Here’s the ten day chart for CXO which takes
in the last two trading weeks:
As you can see, last week CXO didn’t miss a beat and powered higher to close at $1.05, thanks
14

to plenty of market chatter and endorsements of the stock from people with decent reputations,
such as John Kaiser.
CXO gets a repeat mention here today for three reasons, tow of which are minor ones. Firstly, I
want to recognize its continued strong market action and reiterate the main point of next week,
that the good news here is that a decent story still has the power to move a market even in
these times of mediocrity. Secondly, I’d like to reiterate that I will not be joining in on the CXO
bandwagon and playing the sotck (nor any of its suddenly announced neighbour plays that
include SIR.v). That’s mainly due to the third reason we outline below, the main point of today’s
piece.
On monitoring the CXO story, one of the classic splits seen between “the pros” and “the
chasers” has been evident to your author from the beginning. While those who want to believe
will see, hear and concentrate on only the good news, positive vibes and optimistic ends of
forecasts and/or conjecture for a new play, it’s always telling to see how the serious market
players will discount all the good news and immediately try to seek the fatal flaw in the story.
For example, after last week’s note in IKN208, your author received several pieces of feedback
but two in particular caught the eye. Although separate and totally unrelated, they both happen
to be smart and trustworthy brains that are kind enough to converse with your author on
matters and both are highly respected figures in the junior industry (and I can’t say any more,
barring that these people are not particularly well known to the general investment public). The
first mailer knows the area well and made immediate reference to potential community relations
problems that CXO might have at its project, due to specific factors known to him. The second
mailer homed in on previous work done at North Rok and tried to pick holes in what the recent
assay result may suggest. I’m going no further that that in the description of the two mails,
because the message here isn’t about what might or might not be bad over at CXO, it’s more
about trying to kill a project rather than build it up.
The interesting fact about CXO today is that after a week (or so) of smart geological and mining
sector brains picking over the story and trying to find the reason why it should go down, it’s
done the exact opposite and just continued to rise. That (aside from time) suggests that the
factors ID’d as potential killer weaknesses aren’t that and there’s still reason to believe CXO can
make a real go of North Rok, not just see it flash in the pan and die (as most of these stories
eventually do). But the wider issue is that the smarter traders, the ones that get first and
fastest to what any particular drill hole might mean, seem happy enough to hold onto their CXO
shares so far and are ready to ride them higher. Meanwhile, you can be certain they’re looking
for good reasons to dump their stock and take their profit, an attitude that’s 180º different to
the way in which the retail momo rider approaches the junior exploreco market.
Western Graphite (WSGP) (WSGP.pk): The pump is on
Oh dear! I’m losing money.
15

For the moment, anyway. As reported last week, any short-term pop in the price of WSGP is
very easy to handle, as only those inside of a pump and dump know how high it will travel
before the inevitable collapse sets in. As things are, I’m happy that WSGP has moved up from
my approx 90c shorting price to the approx $1.25 prices of end Friday, because I may be able
to short some more next week due to the action.
Shorting Gold Resource Corp (GORO) once again
As suggested by the Flash update of Monday (see appendix 1) and confirmed by that of Friday
(see appendix 2) your author is now short Gold Resource Corp (GORO) once again. By way of a
re-cap and also to note a recent development, here are the reasons:
The drop in silver and gold price will crimp profits at GORO, particularly the drop in silver prices
that we calculate will take ~$4m from average quarterly revenues.
The dividend is now cut to 3c/month. GORO says that this decision is “for now”, but as the
company has stated to the SEC that it makes dividend decisions on a 12 month forward
planning basis, there’s every reason to suppose it will stay this way for the next calendar year.
And as the table featured in IKN208 last week shows (repeated here)...
GORO: Dividend Yield Percentage Spread
Share price (U$) at 6c/month at 5c/month at 4c/month at 3c/month
20 3.60 3.00 2.40 1.80
19 3.79 3.16 2.53 1.89
18 4.00 3.33 2.67 2.00
17 4.24 3.53 2.82 2.12
16 4.50 3.75 3.00 2.25
15 4.80 4.00 3.20 2.40
14 5.14 4.29 3.43 2.57
13 5.54 4.62 3.69 2.77
12.72 5.66 4.72 3.77 2.83
12 6.00 5.00 4.00 3.00
11 6.55 5.45 4.36 3.27
10 7.20 6.00 4.80 3.60
9.60 7.50 6.25 5.00 3.75
9 8.00 6.67 5.33 4.00
8 9.00 7.50 6.00 4.50
7 10.29 8.57 6.86 5.14
6 12.00 10.00 8.00 6.00
source: IKN calcs
...a like-for-like dividend yield for 3c/month targets a share price of between $7 and $8 if we
consider how GORO was trading pre-cut.
Staying with the dividend, it’s worth noting that those funds, individuals etc who are after
dividend paying gold mining stocks are now spoiled for choice, thanks to the drop in share price
of tier 1 majors. The approximate 3.6% dividend yield at GORO (assuming a year of 3c/month
at $10 share price) may be an interesting number to some, but it’s no longer the standout value
that it was against Barrick (ABX 4.0% yield as at Friday close) or Newmont (NEM 4.2% yield as
at Friday close) due to the sharp drop in those majors’ prices. And let’s face it, a small junior
with just one working mine and a history of over-promising and under-delivering isn’t much
competition stacked up against the big boys with the type of stability they can bring to the
table. I see no reason at all to pay $9 or $10 for a clearly inferior company on the yield issue
alone.
It’s more than interesting that Hochschild’s (HOC.L) representative on the GORO board has
decided not to stand for re-election (19), which is exactly the type of move you’d expect from a
the company if it were looking to sell its share position. It makes a lot of sense for HOC to want
16

to reel in its third party exposures and concentrate on its core business during a rough period
for the sector. It goes without saying that any decision by HOC to reduce (or even fully close)
its 14.63m share position in GORO would be a strongly negative influence on the GORO share
price. Once the AGM is done and Isac Burstein replaced on the GORO BoD, such a move would
become more likely.
The GORO bottom line is that we’ve done the math several different ways over the eight
months or so that we’ve played GORO short and each time, it comes up wanting. The
company’s decision to cut its dividend to 3c/share was at the low end of our expectations and
opens the door once again to GORO as a live and potentially lucrative shorting opportunity, with
the worst case of it being a hedge that loses as our larger long positions in precious metals
juniors earn us profits. Your author sets a downside target of $7.50 on GORO, representing a
24.4% potential profit to Friday’s close, which may come in a rush and be even better if, as we
suspect, Hochschild decides to throw in the towel on the 25+% of GORO that it owns.
Conclusion
IKN209 is done, we close with bullet points:
• The main move this week is to sell Bear Creek Mining (BCM.v), the near-term trade that
hasn’t attracted the type of traction that your author expected from the approval of its
project by locals. We’re sticking to the timeline here and will sell by the end of the
week, most probably at a small loss...but you never know.
• The other sale is the clearing out of Plata Latina (PLA.v), an out and out disaster trade
that hasn’t delivered the hoped-for results and has been caught in the silver downdraft.
This one will only happen with a suitable out.
• Jaguar Mining (JAG) (JAG.to) will be on my radar screen as I move around the North of
Peru this week, as the set-up reminds me strongly of when this one has popped on
(BS) rumours previously. I’m all for a quick fliptrade these days.
• As for the return of the GORO short, as well as the specific company reasons I’m happy
to have more short weighting to the portfolio now, backing up the easy-to-hold position
in Tahoe Resources (TAHO) (THO.to). There’s also your author’s short position in WSGP
to consider as well, as even though it’s being kept separate to the official ‘Stocks to
Follow’ list (reasons: it’s too easy to claim a win, not enough of you can follow me in if
desired) it’s one I’m looking to expand next week if possible.
• The news from Capstone (CS.to) last week has really put me off the junior exploreco
copper sector. The only one that’s different, as far as I can see at least, is Reservoir
Minerals (RMC.v) and it’s high grading, long length assays that are being dug at no cost
by a bigboy JV partner. Again, RMC is one I’ll buy at the right price.
• Next week a site visit report from Rio Alto’s (RIO.to) La Arena mine.
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
17

Footnotes, appendices, references, disclaimer
(1) http://finance.yahoo.com/news/oceanagold-announces-first-quarter-2013-063000623.html
(2) http://www.marketwire.com/press-release/lupaka-gold-initiates-2013-field-work-program-at-crucero-and-invicta-tsx-
lpk-1785745.htm
(3) http://guatemala.gob.gt/index.php/2011-08-04-18-06-26/item/3682-presidente-y-ministros-supervisan-municipios-en-
estado-de-sitio
(4)
https://www.facebook.com/photo.php?fbid=173813079445046&set=a.100147093478312.143.100004490640067&type=
1&theater
(5) http://finance.yahoo.com/news/focus-starts-drilling-reventon-123000129.html
(6)
http://www.lse.co.uk/FinanceNews.asp?code=oszdi4qd&headline=COLUMNThe_LME_and_the_market_of_last_resort_
myth_Andy_Home
(7) http://www.incakolanews.blogspot.com/2013/05/peru-mining-reuters-nails-scoop.html
(8) http://elcomercio.pe/actualidad/1571905/noticia-viceministro-interculturalidad-formalizo-su-renuncia-al-cargo
(9) http://www.rpp.com.pe/2013-05-04-proxima-mesa-de-trabajo-de-canaris-se-realizara-el-1-de-junio-
noticia_591695.html
(10) http://www.santanvalley.com/news/news-stories/county/item/9134-town-remains-opposed-to-florence-copper-
project#.UYWUmqK_Vcc
(11) http://finance.yahoo.com/news/fancamps-lac-lamelee-south-iron-145224465.html
(12) http://www.aminera.com/mas-noticias-nacionales/47933-sombrio-panorama-laboral-afecta-a-trabajadores-de-
minera-barrick.html
(13) http://citizen.typepad.com/eyesontrade/2013/05/last-week-13-latin-american-governments-gathered-in-guayaquil-
ecuador-to-hatch-a-common-response-to-an-increasingly-common-m.html
(14) http://www.mineriaaldia.com/cuatro-empresas-mineras-analizan-instalarse-en-
uruguay/?utm_source=twitterfeed&utm_medium=twitter
(15) http://www.newswire.ca/en/story/1158531/jaguar-mining-inc-announces-adoption-of-a-shareholder-protection-
rights-plan
(16) http://phx.corporate-ir.net/phoenix.zhtml?c=71999&p=irol-newsArticle&ID=1763970&highlight=
(17) http://www.newswire.ca/en/story/1134023/jaguar-mining-announces-fourth-quarter-and-full-year-2012-financial-
results-and-adoption-of-advance-notice-by-law?relation=org
(18) http://finance.yahoo.com/news/capstone-mining-purchase-pinto-valley-234300818.html
(19) http://www.incakolanews.blogspot.com/2013/04/hochschilds-hocl-man-in-gold-resource.html
Appendix 1: Flash update of Monday April 29th
Good morning, 07:20am local time, an hour and bits before the open (weather report: dry, crisp, sunny autumn
morning).
In a perfect world, Gold Resource Corp (GORO) would have waited a day and ridden up gold's move this morning
before announcing its dividend, thus allowing your author more space for a new short position. As it happens, the
company's NR a few minutes ago...
http://finance.yahoo.com/news/gold-corporation-declares-april-monthly-113000213.html
...that announces a cut in the monthly dividend from 6c to 3c shows that it's not a perfect world. This
announcement does, however, fit right into your author's ideas on the potential re-shorting of GORO as noted in IKN208
yesterday.
A lot will depend on the share price action today. If we see $10+ prices (riding up any gold bounce) I'm likely to go short
again. However, if GORO sinks from Friday's closing price with no rebound, it will have to sink without me. The most
important part of this will be getting a good entry point in order to justify the trade that can outline a potential minimum
20% win (I'll be aiming at $7.50 for a downside target, so $10 ex-comms really is about the minimum I'd accept).
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Expect a further Flash update if I re-open the short position.
Appendix 2: Flash update of Friday May 3rd
Good Friday morning, the market has been open for just over an hour.
A short note to say that as per the thoughts of Monday's Flash update I'm re-opening my short on Gold Resource
Corp (GORO) later today. It's moving up above $10 right now and I'll wait for at least an hour or two longer to see how
far it goes, but I'll uncover at least part of the short by the end of today, perhaps all of it (depending on price offered).
I want more short interest in my portfolio for hedging purposes and this is the easiest way. Plus, individual
circumstances of GORO (which we'll re-cap and discuss in this weekend's edition) may give a specific win.
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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