IKN #220Premium

The IKN Weekly
Week 220, July 21st 2013
Contents
This Week: Still fishing for bargains, The roadmap chart and another reminder to be long
quality, Travels during the midwinter school break.
Fundamental Analysis: NOBS update report on Colossus Minerals (CSI.to)
Stocks to Follow: Overview, Darwin Resources (DAR.v), Gold Resource Corp (GORO), AQM
Copper (AQM.v), Minera IRL (IRL.to) (MIRL.L), Tahoe Resources (TAHO) (THO.to), B2Gold
(BTO.to) (BTG), Bear Creek Mining (BCM.v), Pretium Resources (PVG) (PVG.to), Focus Ventures
(FCV.v), Rio Alto Mining (RIO.to) (RIOM).
Copper Basket: Overview, Copper Fox (CUU.v), Panoro (PML.v), Candente Copper (DNT.to).
The Lottery Ticket Basket: Overview, Fancamp Explorations (FNC.v), Tango Gold (TGV.v).
Regional Politics: Pascua Lama knock-on now affecting Argentina, Colombia: The strike gets
plenty of headlines, Mexico: Violence claims two lives at Goldcorp’s (GG) Los Filos mine in
Guerrero, Locals oppose a drilling campaign in La Libertad Peru.
Market Watching: Buying a few Network Exploration (NET.v), More on the non-stoppage at
OceanaGold (OGC.to) (OGC.ax), Lowell Copper (JDL.v) feedback briefs.
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
Still fishing for bargains
To make sure it’s clear (and even after having bought a tiny slice of DAR.v last week) I’m still
looking to buy Minera IRL (IRL.to) on financing news, AQM Copper (AQM.v) on a 6c entry price,
and Darwin Resources (DAR.v) for the reasons mentioned in IKN219 last week.
This week we add another tinycap spec play to the is (and this one’s really tiny) in Network
Exploration Ltd (NET.v) as long as there’s the tinyprice we want.
The roadmap chart and another reminder to be long quality
Thanks for your mails arising from last week’s edition. It was more than the usual handful this
time, which was nice and there were several topics broached too. I take some cheer from that
and tentatively throw it onto the “signals that the market is finally turing around pile, which also
includes the way in which unsubscriptions have dried up to the merest trickle these last few
weeks and there are even a few new subbers on board in June/July (a special welcome to those
masochists). One thing I’d say after reading all and replying to most (apologies if I didn’t to
you) is that yes, this roadmap chart really isn’t looking that bad all of a sudden. I’m also the
first to agree, or admit if you prefer, that the price deck for junior mining equities, particularly
the higher quality end of the market (the RIO.to/BTo.to etc type) went much lower than I
expected and the trough carried on longer than anticipated as well. But last week noted that
we’re starting to see the type of separation between the blue, red and green lines that we’ve
been looking for and from then until now the market has done little else but confirm that
tentative theory.
1

The bottom line: Play the “around the edges” spec plays if you like (and personally I like, as
you’ll see again below with another nano-cap trade idea floated this week) but make sure the
main money, the real money you’ve placed in the sector is in quality companies. If you prefer
AR.to, FR.to or even the larger sized metals vehicles (GG, NEM, SCCO, FCX etc) for your ride
then you won’t hear many squabbles from this corner. Mine’s in RIO.to and BTO.to, all right?
Travels during the midwinter school break
Peru’s winter school vacation break happens in the last week of July and first week and a half
of August. Let it be known that your author (and family) will be taking the the week of August
5th and travelling about 300 miles across the high plains to stay with the in-laws, deep in the
Aymara region of South Puno, Peru. On the agenda are relaxing, disconnecting from electronic
machines of all types, cooking food, feeding chickens, other bucolic activities, etc.
The IKN Weekly will continue as per normal in the period but IKN223 (due out August 11th)
may be a little light on content, as it will come the weekend after paying zero attention to the
market.
Fundamental Analysis of Mining Stocks
This week we catch up with Colossus Minerals (CSI.to)
NOBS update report dated July 21st 2013
2

Colossus Minerals Inc. (CSI.to)
Company Overview
Colossus Minerals Inc (Canada: CSI.to, US pinksheets COLUF, Frankfurt 0C1.f) is an
exploration stage mining company operating in Brazil. Its flagship asset is a 75% owned Serra
Pelada advanced stage gold mining project. Share structure is as follows:
Shares out: 124.95m
Options & Warrants: 14.23m
Fully diluted shares: 139.18m
Current share price: $0.80
Market Cap: $99.96m
Approx cash per S/O: $0.24
All prices are in Canadian dollars unless stated. Forex U$1=CAD$1
NB: This report is a an update which should be read in conjunction with the NOBS report
on Colossus (CSI) from IKN210, dated March 10th 2013.
Today’s update
This one will be shorter in length than the normal NOBS report and we concentrate on what’s
changed since the first coverage in IKN201, what we got right in that note, what we got wrong
and how the new situation looks. Back in the IKN201 note there were three main topics covered
which were (and it’s in italics when quoting from the text that day):
1) Company financials, to see if the CSI plan to build Serra Pelada and get to positive free
cash flow is still viable
2) Cash flow based valuation potential, which even at this fairly late stage in development
is still at a rough estimate level due to the lack of resource information (this should
change soon however, and our model can be refined)
3) The rumours, hearsay and corporate level events that have dragged this stock a lot
lower in recent weeks and months. Some of these issues have substance but there
seems to be a lot of smoke being blown around this stock as well. Therein lies the
potential advantage of taking a long position in CSI.
We then went on to list the four elements that we thought CSI needed to “click into place” in
order to become a viable long position, which were (and again quoting from IKN201):
• Confirmation that the construction at Serra Pelada is advancing and that initial
production is near.
• The new directorate at JV partner COOMIGASP, due to be elected on March 24th, is
one with which CSI can work with harmoniously.
• The end of downwards pressure on the stock price from the S&P/TSX listing deletion
alongside forced redemptions from holding funds.
• The new 43-101 resource showing the type of grades we expect from the Serra Pelada
main orebody.
Then we did the numbers, looked at this’n’that, generated a price target, considered what might
go wrong and to cut a long story short (go read IKN201 if you want the short story long again)
came to this conclusion:
“..your author prefers to wait a while longer on the sidelines and potentially buy in at a later
date as long as some of the risks apparent today in CSI have washed through some more,
namely
• The Coomigasp vote goes ahead and the new directorate is one which which CSI
can work
• The redemption-led fund selling quietens down and any sag from the deletion from
the big board index subsides
3

• The company doesn’t come to us in the next few days or weeks with negative news
on delays or further resignations of directors (on this score, I’ll be happy with a “no
news is good news” type result over the space of a few weeks).
• The 43-101 resource is published and the market generally approves of what it
sees.
So that was then and this is now, what did we get right and what did we get wrong in that note?
There were
The right stuff
We decided not to buy CSI and wait a while longer to see if its problems were fixed. The
call to “wait and see” on the issues facing CSI before buying the stock was the principal
conclusion of the note and by far the best thing about the whole report. Here’s why:
Ugh. Waiting on the sidelines has paid off once again (people forget there are three positions to
take on a stock, not just two), but in the case of CSI at least half the bigtime downturn from then
until now isn’t due simply to the crappy market in which we find ourselves. CSI has made its
own bad fortune with delays and now the emergence of a Coomigasp high command that’s
looking to renegotiate the percentage holdings at Serra Pelada. On that score I posted on the
blog last week (1) and it’s clearly a delicate and politically tricky situation that CSI faces.
However, it’s by no mean insurmountable either and there’s even a case for giving in to
Coomigasp demands and offering a larger slice of the JV in return for concessions from the
partner. There are plenty of hypothetical situations that wouldn’t be stock price killers according
to the playful modelling I’ve done, but for the moment we’re going to assume CSI keeps its 75%
as stands and leave any other scenarios for another day if necessary.
That’s because CSI still holds a lot of strong negotiating cards (start here (2) for and interesting
Portuguese language site on the political goings on at Serra Pelada and try this specific report
(3) for a detailed overview of the current situation), but along with the specifics of the JV and its
power balance, we also need to remember that we’re in Brazil here, not one of the institutionally
weak countries with governments that will fold like paper as soon as the nationals-first card is
played to them in a locals-versus-foreign-miner situation. Yes there may be some rearranged
deal between the two sides and I’m also going to give the current heightened tension time to
sort itself out before buying CSI (there you go, I’ve given away the conclusion to this note too)
but I’m not expected CSI to quickly and totally cede to all Coomigasp’s demands and pressure
on this.
We generated a target on 500tpd production in 2014. That’s looking smart now, because a)
CSI has pushed back its development schedule and 1q14 is now due to run at 500tpd (and I
wouldn’t be at all surprised to see that “initial production” number extend into 2q14) and also b)
I’ve taken a lot of mail from market professionals regarding the plan and the construction
4

problems that Serra Pelada has seen, and many of them suggest (or even confidently predict)
that the access problems to the orebody are going to make it difficult for the mine to ever supply
the amount of rock a 1,000tpd throughput mill needs. Therefore, pitching our model and target
at 500tpd made sense then and makes even more sense today.
Those were the two main things done right last time, now for the two main wrong assumptions
of the IKN201 report:
The wrong stuff
We assumed CSI wouldn’t need to raise any more cash. Wrong. That’s already been proven
wrong by the C$28.75m it raised at $1.60 in the bought deal of May/June (4), but now that gold
has sunk and the timeline to first production has been pushed further out, it looks for all the
world like CSI will need to go back to market another time in order to raise more cash to get it
through the ramping phase and to FCF+ day 1. This was the biggest mistake in our model and
the sheets have been adjusted accordingly.
We pitched our gold price assumption too high. Back in IKN201 we assumed U$1,500/oz
gold. Today’s model uses U$1,300/oz Au (along with $1,400/oz platinum and $700/oz
palladium). I always try to plug in conservative parameters into a model but in this case (and
with a nasty dose of that 20/20 hindsight stuff) I should have pitched lower to make the
argument and taken in at least once bad-case scenario for product prices.
OK, look back and overview done, now forward and we first cover the financials, then run the
revised numbers to generate a new target price. Then discussion, conclusion and we’re out of
here.
Financials overview update
Here we catch up on the main underlying financials charts, with two quarters now added to the
mix (4q12 and 1q13) plus guesstimates as to the state of play today, with 2q13 just behind us.
The important things here are the balance
sheet items and the burn rate, which is best CSI.to: Shares Out
160
covered by the rate of change in mineral
140
exploration expenses at CSI.
120
100
Today let’s start with the share count chart,
80
which looks like this (right) The 2q13 estimate
60
of 124.95m is going to be very close, as we
40
know that CSI currently has that number of
20
shares outstanding after the closure of the
0
bought deal round in June. For 3q13 we’re
sticking necks out a bit and estimating that the
count goes to 150m by assuming that CSI
runs another round of financing at 80c to raise
$20m. Of course, said financing may happen in 4q13 or it may be larger or smaller than $20m,
but as things stand (see the working cap chart
below) it’s looking very likely that CSI needs
some more funds to see it through and the
most likely method is a share raising (though
more convertible debt or forward sales aren’t
out of the question, either)
Liabilities have continued in roughly the vein
we expected. Currents are under control and
the two main longer-term items, the
convertible debt (due 2016) and the assumed
liability to Sandstorm of the forward sales, are
going to change soon.
5
01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 tse31q2 tse31q3
source: company filings, IKN ests
serahs
fo
snoillim
CSI: Liabilities position
180
160
140
120
100
80
60
40
20
0
01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 tse31q2
$m
LT debt
current debt
source: company filings

CSI.to: Assets Breakdown per qtr
350
300
250
200
150
100
50
0
6
01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 tse31q2
source: company filings, IKN ests
srallod
fo
snoillim
fixed
other current
cash
Assets (above) look just so, with construction being capitalized (normal) and cash treasury
burning and then topped up by the June bought deal funds. More interesting is a closer look at
working capital, which shows an IKN-
estimated $40m at this present time and CSI.to: Working Capital per qtr
120
that’s after the $28.75m in funded has been 110
added. We’re also assuming that burn rate 100
90 continues and the $20m we guesstimate as
80
needed by CSI is adding to the treasury pile
70
during 3q13. Come 4q13 with the heavy 60
lifting done, this would put working capital at 50
40
around $10m (and cash treasury somewhat
30
higher, so assuming CSI can boot forward
20
near-term creditors for a quarter or so it 10
shouldn’t run out of cash before hitting FCF+ 0
in 2014) which should see it through. In this
respect, studying CSI’s books today is a little
like seeing how RIO moved financially
through the 3q11 to 2q12 period of start-up, but that’s another story.
With mining expenses in 3q13 due to run at roughly the same rate as we’ve seen in the last
couple of quarters as the critical main construction
period nears its end, CSI is due to run out of cash
by the end of this year. And that means that as
we’re not expecting free cash flow from the mine
until 1q14 at the earliest now, there’s a financial
bridge that needs to be built between the present
and the promised land of profitable gold mining
(and that’s what the price destruction of the last
few days is really all about, ladies and gentlemen).
The last nuts’n’bolts chart for your consideration
today is the mining activity expenditures tracker,
which is the best proxy to the amount of cash
being burned in this construction period at Serra
Pelada. We expect CSI to go through another $43m in the next two quarters, but 4q13 should
be much lighter and the heavy lifting done by then.
Valuing Colossus Minerals
Today’s numbercrunching is down to the bare minimum blahblah, with readers directed to
IKN201 to check out the main assumptions used in the model. Here we’ll just stick with the
generated tables from the model and note the main changes to the previous assumptions which
are:
• Gold price now assumed at $1,300/oz, with Pt at $1,400/oz and Pd at $700/oz
• No move up to 750tpd or 1,000tpd throughput expected for valuation purposes. The
01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 tse31q2 tse31q3 tse31q4
source company filings, IKN ests
srallod
fo
snoillim
40 CSI.to: Mining activity Expenditures
35
30
25
20
15
10
5
0
01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 tse31q2 tse31q3
source: company filings/IKN ests
srallod
fo
snoillim

tables are unchanged on that, but we’re going to value strictly on 500tpd and generate
a target price from the low end.
• Mining costs are now upped to $450/tonne, from the previous $400/t number. Before we
were being pretty conservative with the costs parameter, now we’re being very
conservative. But that suits me just fine, especially after hearing from several sources
about their worries about mining the sufficient amount of feed for the mill. We must also
remember that the slippage in the Brazilian Real (BRL) against the US Dollar (USD) in
the last three months means that costs in dollar terms are now handily lower for CSI.
This is good.
• The share count for 2014 is now assumed at 150m, up from the 106m previously
assumed with the explanation of your author’s bad assumption above.
Here’s how we see revenues for CSI’s 75% of Serra Pelada now:
CSI.to: Projected revenues by metal type (U$m)
500tpd 750tpd 1,000tpd (1) 1,000tpd (2)
Pt oz 6954 10431 13908 13908
65% CSI ($m) 6.33 9.49 12.66 12.66
total Pt revs ($m) 6.81 10.22 13.63 13.63
Pd Moz 12499 18749 24998 24998
65% CSI ($m) 5.69 8.53 11.37 11.37
Total Pd revs ($m) 6.12 9.19 12.25 12.25
gold ounces 83621 125432 167243 209053
98.5% CSI ($m) 107.08 160.62 214.15 267.69
Total Au revs ($m) 107.58 161.37 215.16 268.95
Total sales ($m) 120.5 180.8 241.0 294.8
Sources: CSI data, IKN ests
Here’s how the abridged income statement now works:
CSI.to: Income items for FY14, four scenarios
case scenario 500tpd 750tpd 1,000tpd (1) 1,000tpd (2)
Sales 120.5 180.8 241.0 294.8
Cash COGS 61.6 92.4 123.2 123.2
Depreciation 15 15 15 15
SGA 10 10 10 10
Op income 29.2 56.3 83.4 135.1
4% nat royalty 4.7 7.1 9.4 11.5
Coomigasp royalty 3.0 4.5 6.0 7.4
Tax at 34% 9.9 19.2 28.4 45.9
Net income 19.3 37.2 55.1 89.2
Shares out 150 150 150 150
EPS 0.13 0.25 0.37 0.59
Sust Capex -20 -20 -20 -20
FCF/sh 0.10 0.21 0.33 0.56
Sources: CSI/IKN data, IKN ests
In other words, even at the new low gold price, at $1.3k/oz Au, at a significantly higher share
count to dilute the recipe, taking into consideration the delays now announced to first production
and at a maximum (rather than minimum) 500tpd throughput for 2014, CSI still generates 13c
EPS in its first year of operations. Or put simply, if CSI can get this thing going on its new
schedule, and under the new crappy market conditions, it’s cheap at 80c.
7

Here’s the target price
CSI: FY14 potential Sales and earnings Target price & valuation data
case study 500tpd 750tpd 1,000tpd (1) 1,000tpd (2) using four different scenarios for FY14 production
Sales ($m) 121 181 241 295 12-month target $1.37 (6X cash flow using 500tpd
Upside to target 71% base case)
EPS 0.13 0.25 0.37 0.59 Mkt cap (C$m) $100 Enterprise value $216
Cash flow 0.23 0.35 0.47 0.69 P/sales (500tpd) 0.55 EV/sales (500tpd) 1.19
P/E (500tpd) 6.2 EV/EBITDA (500tpd) 4.9
P/E (750tpd) 3.2 EV/EBITDA (750tpd) 3.0
P/E (1,000tpd (1)) 2.2 EV/EBITDA (1,000tpd (1)) 2.2
We keep the old and low 6X multiple to cash flow (rather than EPS for a growth company in
early stages, a strategy that makes more sense) but this time discount any cash at bank at end
2014 for more conservatism. We’re also sticking with the 500tpd option, as anything else is
gravy that way. The combo of lower gold price, higher share count, higher assumed costs etc
makes a big difference to the target compared to IKN201’s $3.59, but as the stock is now
languishing at 80c and people are assuming worst-cases for its future rather than best cases,
there’s still a juicy looking 71% gain staring out from the model if we bought and things went to
plan. And what could possibly go wrong?
Discussion
The only subject I want to broach here is that of current market expectations. As soon as the
company published its development update on Monday (5) the market assumed, quite rightly in
my opinion, that CSI would need more cash to get to
operating status at Serra Pelada. The result can be
seen in this 10 day chart, the ~50% waterfall drop on
high volumes. There are plenty of diluted big holders
of CSI now (let’s start with the 10.5% held by the
Alberto Arias ARC Fund) who may have cash to
inject, but they’ll want to get some cheap shares at
the current price. That adds up to one thing: This
stock is unlikely to put in a significant rebound move
until those players have their pound of flesh. Which in
turn means we have a clear catalyst signal on our
hands: Placement announced = a good opportunity
to but on the open market.
Conclusion
This part follows on from the last part. We acknowledge that CSI is having both
operational/construction and political problems at Serra Pelada. Those are enough to keep your
author from making a big plunge and investment in the company now but the underlying
numbers, even with the now very conservative inputs all over the place, are still solid enough to
provide a decent looking percentage upside if CSI can get to 500tpd by 1q14.
However, the really clear buying opportunity now will be on the back of the next financing, which
when it comes (and I’m assuming it does) will provide the baseline for a trade that could easily
move the stock 20% or 30% in days. Once the big money is positioned, you can bet large
amounts that the Canada promo machine will crank up again and get people looking at the
stock. The window on this trade will be at the moment any new financing is announced, not
days after and not before either.
The IKN Weekly still calls “Wait & See” on Colossus Minerals (CSI.to), but there’s a clear map
emerging for a decent and potentially attractive trade here. I’m going to keep some of my
powder dry with the intention of moving it in come the right moment and in the meantime, will be
watching for CSI news on the wires.
End of Report
8

Stocks to Follow
We added Darwin (DAR.v) so now there are 12, and of those five positions went up (RIO.to,
BTO.to, LRA.v, RIO.to trading position, PVG.to), one was unchanged (AQM.v) and six finished
down on the week (IRL.to, GORO short, BCM.v, TAHO short, FCV.v, DAR.v). However, even
though to count was slightly against us the real result, money, was a strong positive for the list
last week thanks mainly to the decent showings in Rio Alto (RIO.to up 9.5%), Pretium (PVG.to
up 8.0%) and B2Gold (BTO.to up 6.2%). Apart from the 10% lost in Darwin due to a teeny end
of week the worst losers were the short hedge positions in GORO and TAHO and that’s a
situation which is very easy to stomach.
With the addition of the very small position (so far) in Darwin Resources (DAR.v) there are now
12 open positions on our ‘Stocks to Follow’ list, three less than our self-imposed maximum. One
is one green, one is unchanged, ten are red but significant healing is now taking place under
the surface.
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$2.30 0.0% $6.29 tgt, added Apr13
B2Gold BTO.to buy C$3.07 28-nov-12 C$2.76 -10.1% $5.70 tgt added Apr '13
Recommends
Minera IRL IRL.to spec buy C$0.73 22-jul-12 C$0.22 -69.9% $1.56 tg, added, new avg
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.86 -25.2% solid biz model, LT hold
Gold Res Corp GORO short U$9.70 03-may-13 U$7.84 19.2% to tgt, will wait
Bear Creek BCM.v hold C$2.06 30-may-13 C$1.71 -17.0% Cheap at $20 Ag, will wait
Rio Alto Mining RIO.to buy C$2.68 07-jun-13 C$2.30 -14.2% ST trade position, separate
Pretium Res PVG.to hold C$8.20 11-jun-13 C$8.12 -1.0% New position, M&A play
Tahoe Resources TAHO short U$12.42 08-apr-13 U$14.57 -17.3% newly re-short, port hedge
Smaller/Riskier
AQM Copper AQM.v hold/add C$0.31 16-oct-11 C$0.07 -77.4% want to add at 6c
Focus Ventures FCV.v spec buy C$0.175 01-jul-12 C$0.085 -51.4% revised tgt 25c
Darwin Res DAR.v spec buy C$0.10 14-jul-12 C$0.09 -10.0% 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% closed trade
Bear Creek BCM.v may'13 C$2.58 01-apr-13 C$2.40 -7.0% near-term, time ran out
Lupaka Gold LPK.to may'13 C$1.12 23-oct-11 C$0.32 -71.4% towel thrown in
Tahoe Resources TAHO may'13 U$18.62 08-apr-13 U$14.70 21.1% took profit on ST short
OceanaGold OGC.to jun'13 C$3.03 16-sep-12 C$1.18 -61.1% sold on gold drop
IMPACT Silver IPT.v jun'13 C$1.14 13-jan-13 C$0.62 -45.6% sold on silver drop
Duran Ventures DRV.v jun'13 C$0.045 10-may-13 C$0.025 -44.4% ST trade never worked
Plata Latina PLA.v jun'13 C$0.79 10-apr-12 C$0.13 -83.5% still trying to sell
Bellhaven BHV.v jun'13 C$0.065 03-jun-13 C$0.12 84.6% closed ST trade
2009, 2010, 2011 and 2012 closed positions in appendices below
Now for some notes on a selection of the above stocks.
Darwin Resources (DAR.v): Position opened. People we need to talk, but first the rote
stuff and although I only got a tiny sliver of shares (which cost me too much commish in
percentage terms, by the way) the position is now open. Also I’ll be buying more DAR at 10c or
9

less if given the opportunity.
Second, we should get news through from DAR in the next few days on the first holes from
Suriloma and I’m presuming that to be this week coming (though I have no exact data on this).
During the week just gone it’s been made clear to your author that there are several sets of
interested (and interesting) eyes that are keen on finding out just what DAR has drilled there,
so if good results are forthcoming I’d expect a decent reaction from the stock. By good, what
we’re looking for here is an economic grade for an open pit oxide gold operation in Peru and as
we have a very decent example in Rio Alto (RIO.to) at La Arena a little further up the road from
Suriloma, we can place that at around 0.5 g/t gold minimum. It’s possible to get higher and the
nearer to a 0.75 g/t or 1 g/t grade we get the better things are, but what we’re most interested
in is the thickness of mineralization at Suriloma and whether the reality of the zone matches the
geological theory that’s been applied so far.
Now for that word. In the last few weeks we’ve noticed at least one seller of DAR who was ok
about letting shares go for as little as 6c or 7c, but with most of the trades in the 9c and 10’c
area. In short there were shares available at 10c if you wanted them and had the patience, but
last Monday that was thrown out the window and basically by one trade. The ~10,000 shares
that sold for 13c on Monday showed whoever-was-selling that there was suddenly buying
interest in the stock coming from somewhere and, small money or not, people wanted to get on
board. The result was immediate and apart from a silly sub-1k trade Friday at 9c, stopped all
trades in the stock at 10c or below stone dead.
People, it’s not easy getting positioned into a stock like DAR and it’s definitely not the type of
stock reco that I like making, precisely because of that. I thought this time last week that it
might be a little difficult to get in at 10c, but exercising patience would do the trick. As it turned
out, that one 13c purchase ruined any
chance of anyone getting in at a
reasonable price (and I should know,
because I sat like a dummy for four
days on the bid at 10c, ironically
leaving the office to go pick up my
youngest from school Friday and
coming back post-close to see DAR
finish the week at 9). I don’t know
who decided to spend $1,300 on 10k
shares of DAR last Monday but I do
know that person did nobody any
favours, not to them or to the rest of
us. There’s absolutely no need to buy
the first price that’s dangled in front of
you in these tinycappers and if you’re
not willing to exercise such patience,
then I’d suggest that you don’t even try.
Anyway, I’ll get the amount of 10c stock that I want eventually (hopefully next week) and
meanwhile, all eyes on the wires for the first drill numbers from any project in Peru in quite a
while...freakin’ ministries.
Gold Resource Corp (GORO): GORO bounced back from the worst of its waterfall loss of the
previous week once HOC had filed that it had already sold all the stock it was allowed to sell in
the current 90 day period (6). This doesn’t mean that the HOC selling is over, but it does mean
that we shouldn’t expect any more big lumps before the beginning of 4q13 which gives GORO
some respite.
Therefore, to to cover or not to cover, that is the question. The position has done its job very
nicely and we’re now at the type of 5% dividend yield (via its current monthly dividend, share
10

count and market cap) that we aimed for when setting a $7.50 target. However, I’m going to
hold onto this short because 1) I like he hedge to the overall portfolio it brings and 2) the price
of silver (in particular) has dived so much since setting our target that we may find financials
are even worse than expected. So, until the 2q13 numbers come out at least (that’s August),
I’m staying short here. Once those financials are known (with a particular eye towards costs
and an ear to tune out the forward-looking bullshit this company loves to feed its faithful) a
decision will be made.
AQM Copper (AQM.v): Again, no addition. The market did do some business the 7c or 8c
asks last week (Exhibit A, the 475k shares moved on Thursday) but we should keep that in
context, because we’re also talking about about $37k’s worth of stock, hardly a king’s ransom in
copper.
Minera IRL (IRL.to): There was more of the recently elevated trading volume in IRL last
week and if we take a step back, look at the 12 month charts for the Canadian listed IRL.to and
the main London listing of MIRL.L we see the same pattern on both sides of the Atlantic, as well
as the big droop in the share price over the last six months, as well.
The buying has been pretty persistent at this low-20c level and on a little further inquiry I heard
that it was due to one single buyer via House 7 (TD Sec ) last week (I sniffed around on some
promoting on Thursday).
I’m very tempted to join in, despite having said that I’d wait off until the financing deal for Don
Nicolas is announced (or otherwise). Price determines value, after all.
Tahoe Resources (TAHO): As you know, I’m not a fan of the mushroom politic strategies
that TAHO uses to keep the world as uninformed as possible about the serious issues it faces in
Guatemala. And as you know I’m short the
stock.
But fair is fair and it seems as though TAHO
has fallen foul to exactly the type of
pettifogging review that was highlighted on
the blog last week in this post (7) (by way of
just one example). The news on Thursday
was that the BCSC had decided they didn’t
like some of the disclosures made by THO in
its PEA and had moved to put the company
on the “issuers in default” list under rule 2d
(i.e. non-compliance with 43-101 rules) and
we can expect an update from the company
next week that should put things straight.
11

At least we can say that the news was taken in its stride by the company and its stock price.
The problem the BCSC has with TAHO is apparently with its PEA (scoping study) for Escobal
that has been out in the world since May 2012. As one correspondent of your author put it,
“Now, it’s possible the BCSC has unearthed some serious problem with the PEA that has to-date
not caught anyone’s eye, but it’s tempting to bet it’s more petty wanker bullshit.” Agreed. As for
me when I read the NR I mentally placed it on the ‘undecided’ pile at first but on further
reflection think that if the BCSC has found something serious, after over a year’s worth of
waiting in which far sharper brains than theirs have read the “offending” document, it would be
a big change from that body’s recent track record.
On a slightly different tack, that same mailer quoted above (who is well versed in the ways of
Central America’s mining industry) finished with, “As if THO don’t have enough real problems to
worry about without having to address delusional ones”. That made me laugh, because if you
only read the company’s literature on the subject you’d come away thinking that Escobal was as
perfect as perfect could be and isn’t weighed down by a single problem. My sympathy towards
TAHO only stretches so far, you see.
B2Gold (BTO.to): We had news from the Ojtikoto drilling program from BTO last week that
mainly featured the addition of good assays to the high grading and new Wolfshag zone (8).
BTO again made the effort to point out that Wolfshag isn’t part of the current 43-101 resource
at the project and is likely to improve resource
ounces and project economics (due to grade) once
incorporated into the mix officially by end year
(though there’s little doubt that they already have
a good idea of what it means to the mine
already). Fully funded and under construction
(and confirmed on schedule/on budget last week),
Ojtikoto is the next organic growth leg-up for BTO
and is looking good to add value.
The BTO stock performance last week looked like
the map of a mountain stage in the Tour de
France, with a peak Wednesday morning, sharp
selling and then a welcome (and deserved) rally
Friday afternoon all the way into the close. Of, as I do, you look upon BTO as a lead indicator
for the PM junior sector then you too will get some cheer for the week ahead from that Friday
trading.
Bear Creek Mining (BCM.v): You need a reminder of the fragility of low volume rebounds in
junior explorecos? Sure, here you go:
The nibbling small buyers of BCM got it above $1.90 on Tuesday and Wednesday for the first
time since the big sector selling draft of mid-July, but Thursday saw (what looked like) one
12

small-ish seller deciding to liquidate. The result was 50k shares moving a $150m market cap
company down by 13.7% and a feeling of “back to square one” in the air. So on the week BCM
lost 6c (and Friday was no help, a very thin 8k traded).
What’s needed here is news catalysts to re-price BCM, as market action in a world where few
are brave enough to hunt for bargains amongst explorers (count me out, I’m as whussy as the
next guy right now) is limited. We know what those news catalysts are likely to be, too. The
EIA approval (that will happen) and the updated feas study (which will need to show robust
economics at $20/oz silver).
Pretium Resources (PVG.to) (PVG): On the back of my “Pretium did well” comment of last
weekend we can report that Pretium did well this week just gone, too. Up 60c (8%) on good
enough volumes in both USA and Canada, there’s enough people to support this cause.
We await the bulk sampling results later this quarter. Place your bets (mine’s already placed,
grade is king and though very smart geologists see problems, when a deposit is rich humans
find solutions to problems).
Focus Ventures (FCV.v): Word from FCV is that there’s some sort of technical delay in
releasing drill numbers. The story is that the Vancouver inspectorate is changing its reporting
system and there’s a backlog of papers that need to be signed off that haven’t been signed.
When asked for a timeline to first results, the answer included a comment on how August is a
dead month anyway so the inference is that we’re not going to get any numbers from FCV at
Reventón until Labor Day. The stock continues to trade poorly and thinly.
Rio Alto (RIO.to) (RIOM): RIO had a good week that smacked more of catch-up to peers
than or specific company alpha, but it was good to see the surge as it’s probably put a few
nervy holders’ mind at rest. Volume on the big surge Wednesday was notable (1.3m traded in
Canada) and the price bump held well on Thursday while many other peer group stocks had a
weak day. No news from the company, with the next significant scheduled event now the 2q13
financials that should be with us mid-August.
The Copper Basket
After twenty-nine weeks of 2013 The Copper Basket is showing a 26.39% loss to level stakes.
company ticker price 1/1/13 Shares out Market Cap current pps gain/loss%
1 NGEx Resources NGQ.to 3.40 168.63 352.44 2.09 -38.5%
2 Augusta Res AZC.to 2.43 144.1 329.99 2.29 -5.8%
3 Copper Fox CUU.v 0.83 399.61 247.76 0.62 -25.3%
4 Lumina Copper LCC.v 9.43 43.46 212.95 4.90 -48.0%
5 Nevada Copper NCU.to 3.50 80.5 170.66 2.12 -39.4%
6 Reservoir Min. RMC.v 2.41 41.46 137.23 3.31 37.3%
7 Hot Chili Ltd HCH.ax 0.72 286.78 114.71 0.40 -44.4%
8 NovaCopper NCQ.to 1.80 51.89 104.82 2.02 12.2%
204.7
9 Panoro Minerals PML.v 0.62 69.60 0.34 -45.2%
10 Western Copper WRN.to 1.39 93.78 49.70 0.53 -61.9%
11 Curis Resources CUV.to 0.70 56.31 39.42 0.70 0.0%
12 Oracle Mining OMN.to 0.80 49.03 20.84 0.425 -46.9%
13 Candente Copper DNT.to 0.375 121.93 18.90 0.155 -58.7%
14 Yellowhead Min. YMI.to 0.59 60.97 13.11 0.215 -63.6%
15 Strait Minerals SRD.v 0.08 56.86 4.26 0.075 -6.3%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg -26.39%
13

On the week there were eight gainers (NGQ.to, LCC.v, AZC.to, CUU.v, NCU.to, PML.v, NCQ.to,
RMC.v)) two unchanged (WRN.to, SRD.v) and five losers (HCH.ax, DNT.to, OMN.to, YMI.to,
CUV.to). The overall basket average gained a little over 1% and so the gentle recovery
continues, but in fact nearly all that improvement was down to just one stock and the 41.7%
gain seen by Panoro Minerals (PML.v), with the other double figure winner Copper Fox (CUU.v
up 10.7%). Worst of the losers was Candente Copper (DNT.to down 11.4%).
Copper Basket 2013 average, weekly
Copper market prices were range-bound
12%
(as they say) and traders reported slack
8%
demand from end-suppliers, more to do 4%
with the time of year (Northern summer) 0%
-4%
than any new batch of systemic
-8%
weaknesses showing through. Copper -12%
basically spent the week bouncing a few -16%
-20%
pennies either side of $3.15/lb.
-24%
-28%
The IKN Weekly has done its share of -32%
hand-wringing about the creaking,
increasingly dysfunctional warehousing
system for copper on these pages in 2013
so it’s good to see the issue getting more
and more light shone upon it by people at the centre
of the base metals world, to the point where it’s now a
subject being covered in the New York Times (9) (my
thanks extended to those of you who have forwarded
that link to me this weekend and yes, I agree that it’s
a significant moment when mainstream mass media
picks up on something of this sort in the obscure
world of metals warehousing). I want to make it clear
that I’m no sort of commentary leader on this (or any
other) issue, but it is good to see it being taken
seriously now by people who really matter and have
voices rather than this tiny corner of the
chattersphere. To this end, the piece written by Andy
Home of Reuters last week and available on link (10)
below is required reading on the subject (you should
know by now the high regard in which Mr. Home is
held by whole of the metals world, your author
included). It starts by considering the original “load-out queue”, that for Alu in Detroit and
continues:
Five years on, though, the queues have spread to other LME good-delivery locations
and to other metals such as copper, where surplus is still a highly marginal
phenomenon. The LME has tweaked its load-out rules, to no obvious effect. Now the
entire global user-base is mulling over the exchange's latest proposed fix.
But the simple fact is that this mestastasising problem, to coin a phrase used by my
colleague John Kemp is as much about the changing landscape of the LME
warehousing business as anything else.
This is a still unfolding story of the rise of the merchant-warehouser, a new breed of
operator that has evolved the Motown queue metric to a new level.
The players in the merchant warehousing game are those names you’re used to hearing:
Goldman Sachs, Glencore-Xstrata, Trafigura, JP Morgan, etc. The story behind the players’
gaming of the system set up by the LME for their own ends (and profits) to the detriment of
others (i.e. you) isn’t anything that will shock the cynical amongst us, either. The Home article
is extensive and the small snippet above does it little justice, so rather than contenting yourself
with the NYT overview report go read an expert’s words on the subject.
14
ht6naj ht31 ht02 ht72 r3bef ht01 ht71 ht42 dr3ram ht01 ht71 ht42 ts13 ht7rpa ht41 ts12 ht82 t5yam ht21 ht91 ht62 dn2nuj ht9 ht61 dr32 ht03 ht7luj ht41 ts12
source: IKN calcs, TSX data
31/1/1
morf
egnahc
%

On to the inventory numbers and the story last week was of little change, as the summer
doldrums period is now very much with us in the metals world, it seems. World stocks dipped
by just 0.6% total to 866,941mt, with LME warehouses at 638,325mt (-0.4% on the week),
Comex down 2.4% to 61,187mt and Shanghai down 0.6% to 167,187mt.
LME cancelled warrants were again virtually unchanged, down just 0.2% at 52.4% of total
inventories.
Cancelled Warrants at LME, IKN157 to date
60%
50%
40%
30%
20%
10%
0%
15
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 112NKI 312NKI 512NKI 712NKI 912NKI
source: Cochilco, LME
rof
yrotnevni
EML
%
latot
yreviled
resu-dne
Now for updates on some of the basket stocks:
Copper Fox (CUU.v): Last week CUU announced that it had finally reached a deal with Teck,
its JV partner at Schaft Creek. Go read it here (11) but here’s a round-up bullet list:
• The deal has been modified greatly from the option agreement that CUU has promo’d
to the world for years. In other words, Teck negotiated from the position of strength
and refused to dance to the CUU drum. The weaker partner had to give concessions to
keep the JV going.
• Teck now gets what amounts to a long-term option on Schaft Creek and will have an
extnded timescale in to decide whether to move it forward or not. CUU management
won’t mind that, they get paid monthly (unlike their shareholders).
• Teck will fund CUU’s end of the project to the tune of $60m in the pre-production stage
(as well as three cash payments to help keep the CUU fatcats’ salary cheques rolling,
but don’t amount to that much per share due to the company having 400m S/O these
days) in order to earn 75% of the project, but the 25% CUU owns stops being a free
ride when the big money is needed to built any eventual machine
• There are distinct reminders of the way in which Teck has gone about other JVs in this
deal. There’s an element of carry-then-dilute-the-minor-partner about all this, which
suits CUU in the near and perhaps medium term, but casts doubt on how much value
CUU will hang on to over the long-term. It also begs questions about how much Teck
cares about this project, because committing $60m is chump change for a company
that size, with the project potentially turning into a training ground for newly recruited
geols.
When the news hit Tuesday morning (on a trading halt) my first reaction on reading the terms
of the deal was “that’s all baked into the lowered share price, makes sense” and so was
surprised to see CUU rally hard that day. Then I remembered about the faintly ridiculous fanboy
club that’s hung around CUU for what seems like forever and rued the opportunity to fade them
(it was already climbing through the 70s and into the 80c price range by then). But reality
returned a day later, the fanboy buyers on this “good news” had their fingers duly burned and
all is right again in the world.

From here, CUU is basically a dead stock, dead money. It’s likely to operate as a leveraged bet
on copper (the low grade means that Schaft Creek has vastly better chances of happening with
copper selling at $4+lb long-term than its current level), while in a ceteris paribus market, my
best guess is a gentle drifting down of its share price as treasury is slowly depleted by the
people inside CUU who know when they’re onto a good thing.
Panoro Minerals (PML.v): The week’s big winner saw drill result news out on its main
Cotabambas project Monday morning (12) that acted as a catalyst on its previously fading
share price. The 41.7% bounce came on some renewed trading volume early week too, with
134k traded Monday, 158k Tuesday, 284k
Wednesday. The caveat we need to add here
is that Thursday’s thin 44k and Friday’s very
thin 5k volumes indicated that this rally, like
so many others at the tinycap end of the
current junior exploreco market, may have
petered out already. Also, a 12 month chart
(right) gives a better idea of the jump in
context; generously, this is a relief rally, not
much more.
Leaving aside the potentially interesting but
small Antillas project, also in Peru, and
focussing on its main gig, Cotabambas really
isn’t that bad as a property with a 43-101 compliant inferred resource of 404.1mt at 0.42% Cu
(at a 0.2% cut-off) for 3.75Bn lbs Cu (plus reasonable Au and Ag by-product credits) and the
whisper from the camp is that it’s always been assumed that the resource will get bigger
through further exploration (I’ve heard off-record whispers about “double the tonnage for
Cotabambas” more times than I care to remember).
But (and there’s always a but, no?) the indications are that as the deposit and tonnage
expands, average grade is dropping. For sure Monday’s headline hole of 128.9m of 1.29% Cu,
0.96 g/t Au, 9.4 g/t Ag makes for eye-catching reading, but along with that one there were a
lot of grades reported in the whole drill series that are marginal at best. This isn’t the first
porphyry to show this problem (your author knows all too well how the AQM Copper (AQM.v)
Zafranal has a good-enough main central portion tonnage grade, but weaker grading rocks
around it) and it’s not an insurmountable problem either as Norsemont sold a similar type of
situation to HudBay at Constancia and that’s now being built (sidebar: HudBay have already
showed their interest in PML.v by buying into a minority position of around 6% of the
company).
However, the bottom line is that these type projects, low-grade bulk mining with low-looking
cut-off levels that trim margin to the bone and explorations programs that pointing to further
dilution of grade in order to add more tonnage, are wholly out of favour with the market. That
16

to you might mean opportunity, to me it means “stay away”, because I have enough dead
money in my portfolio already thanks. At a $70m market cap, $15m in the bank and 18 months
to two years away from a pre-feas, there’s a lot of equity that can be crushed down to lower
valuations before the economics of the main Cotabambas project are shown to be good or not-
so-good).
Candente Copper (DNT.to): I’m getting bored with commenting on this failure of a
company, but a word is needed about its news of last Tuesday when DNT announced (13) it
was buying back the company is had spun off in 2011/2012, Cobriza Metals (CZA.v). Those of
you with memories and a penchant for junior happenings may well recall the Joey Freeze plan
two years ago was to package up the exploration properties held by DNT at the time, float the
new vehicle and leave DNT with Cañariaco as its sole project (along with one other land
package close to Cañariaco) in order to “add value” and make it easier to sell DNT come the
day that the big mining world entered into a bidding
war for the project. So, it’s fair to say that it hasn’t
quite worked out the way it was planned, yeah?
Cut to last week and DNT now wants CZA and its
properties back in the fold (slight aside; no word yet
about where the $6m DNT gave to its spin-out has
disappeared in the meantime). The signal here is
negative in that DNT clearly doesn’t have much else left
to do at Cañariaco and the expected queue of willing
buyers hasn’t materialized (we’ve been over the
project’s problems enough times already, but suffice to
say that the social/community relations snafu, at least
partly of DNT’s own creation, is more than enough to kill the project stone dead without any of
the met problems on top). The result of the news was a stock that was dumped on even further
(note the volume Thursday morning in this five day chart right) and saw new 52 week lows.
Frankly, they’re deserved.
The Lottery Ticket Basket
After 29 weeks of 2013 The Lottery Ticket Basket is showing a 38.17% 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 17.72 0.255 104.0%
2 Marlin Gold MLN.v 0.10 379.9 17.10 0.045 -55.0%
3 Bellhaven BHV.v 0.14 137 13.70 0.100 -28.6%
4 AQM Copper AQM.v 0.08 105.57 7.39 0.070 -12.5%
5 Fancamp Expl. FNC.v 0.125 118.41 5.33 0.045 -64.0%
6 Tango Gold TGV.v 0.13 45.59 4.79 0.105 -19.2%
7 Glass Earth GEL.v 0.155 104.79 3.67 0.035 -77.4%
8 Inca One Res. IO.v 0.12 34.0 3.40 0.100 -16.7%
9 Darwin Resources DAR.v 0.20 26.16 2.35 0.090 -55.0%
10 Copper North COL.v 0.10 58.62 2.34 0.040 -60.0%
11 Gryphon Gold GGN.to 0.085 194.64 1.95 0.010 -88.2%
12 Rio Cristal RCZ.v 0.025 149.26 1.49 0.010 -60.0%
13 Cream Minerals CMA.v 0.03 155.34 1.55 0.010 -66.7%
14 Firestone Ventures FV.v 0.045 36.32 1.09 0.030 -33.3%
15 Netco Silver NEI.v 0.025 47.01 0.71 0.015 -40.0%
17

Portfolio avg -38.17%
The Lottery Ticket Basket saw four go up (BHV.v, EGE.v, DAR.v, CMA.v), seven remain
unchanged (MLN.v, GGN.to, AQM.v, IO.v, RCZ.v, FV.v, NEI.v) and four drop GEL.v, FNC.v,
TGV.v, COL.v) with the biggest upmove seen in Cream Minerals (CMA.v up 100%), which
doubled because somebody added half a cent to the price and made it into a 1c stock. The
move in Eagle Star (EGE.v up 27.5%) was more interesting, as it concerns a company that
might have a future. Meanwhile to the downside Tango Gold (TGV.v down 25.0%) did the
worst.
25% Lottery Ticket Basket 2013 average, weekly
20%
15%
10%
5%
0%
-5%
-10%
-15%
-20%
-25%
-30%
-35%
-40%
-45%
18
ht6naj ht31 ht02 ht72 dr3bef ht01 ht71 ht42 dr3ram ht01 ht71 ht42 ts13 ht7rpa ht41 ts12 ht82 t5yam ht21 ht91 ht62 dn2nuj ht9 ht61 dr32 ht03 ht7luj ht41 s12
source: IKN Weekly data, TSX
2102/1/1
morf
egnahc
%
Fancamp Exploration (FNC.v): On Thursday morning FNC announced (14) it was “delivering
on (its) business plan) by selling 3m of the shares it holds in Argex Titanium (RGX.v) for
CAD$2.1m. If you do the math that’s 70c per share gross proceeds and on top of that it paid a
5% finder’s fee, so in fact FNC got $1.995m for its
shares. Pre-legal fees. That’s kind of strange when you
look at the RGX.v share price action for the past three
months, because it looks like this and even stranger
when you consider that RGX is currently running and
about to close a $10m placement to raise funds at
$1.025/share (no warrant).
On that news FNC dumped to 4.5c, but may be a buy at
this level because it still has plenty of underlying assets
on its books that are valued higher than today’s market
cap. And at least the company is capable of raising
working capital in these tough times, so perhaps we shouldn’t be too harsh here. All the same,
I can’t help but wonder why FNC only managed to get 2/3rds of the market value for the shares
it sold.
Tango Gold Mines (TGV.v): Your author has heard quite a lot about the new Chairman/CEO
of Tango Gold Mines (now re-named ex-
FDG Mining), with both positive and
negative things in the mix. One of the
positives is that he’s said to be an excellent
salesman. Or maybe that’s one of the
negatives, as I tend to get these things
confused somewhat
Anyway, I can’t help but wonder how those
people who were enthused by Ponte’s
May/June roadshow in several European
destinations and bought stock in the 13c to
20c range are feeling about his obviously

polished sales technique these days.
Regional politics
Pascua Lama knock-on now affecting Argentina
Collateral effects of the suspension of the Chilean part of Barrick’s (ABX) Pascua Lama project
are now being felt in Argentina. ABX’s new and lagged development schedule means that
workers are being laid off on both sides of the bi-national project (roughly speaking, 80% of the
mineral deposit lies in Chile and 20% in Argentina, but a lot of the civil engineering works and
construction is on the Argentine side of the border). The tentative agreements so far are that
workers resident in the San Juan province (where Pascua Lama’s Argentina ops are located) get
preferential treatment when it comes to layoffs, but we’re already hearing of official complaints
to workers’ unions in Argentina that too many people are losing their jobs too quickly and there
may be trouble ahead (sidebar: frankly I think ABX would secretly welcome a strike at the
project right now, but that’s a whole other story).
The other is that at least one other project, that of Coro Mining’s (COP.to) San Jorge project in
Mendoza, is getting the dust blown off its files and looked at again by local politicos. This report
(15) mentions the bi-provincial ops plan of COP.to, which is to mine the deposit where it lies in
Mendoza but because to that province’s ban on cyanide use, transport the mineral via conveyor
belt to a production facility that would be built in nearby San Juan in order to produce copper
cathode (SX-EW style). As the politicos are now suddenly worried about jobs due to Pascua
Lama’s folding (and Vale at the Rio Colorado potash project in Mendoza) and they have the
application for the updated EIS for San
Jorge on their desks already, there’s a
rumour floating around that this project
might just come back to life. As yet it’s only
a whisper, nothing solid and I for one won’t
be buying into this until something official
and positive is heard from serious level
authorities in the notoriously anti-mining
Argentine province of Mendoza. But San
Jorge has always been a solid looking
project on the economics level (e.g. post
tax IRR of 29% using $2.80/lb Cu) so if you
like buying them distressed, if you like your
copper juniors beaten to within an inch of
mortality before buying them, COP.to may be one to revisit and look at a little more carefully.
Newsflow will decide on that.
Colombia: The strike gets plenty of headlines
We flagged the strike last week, it’s had plenty of news space in Colombia this weekend. We’re
now on day four, there’s plenty of adherence amongst the affected section of mining workers
and there’s been no shortage of violent incidents, either.
The basic story is that the government is keen on formalizing the small, artisanal-type mining
operations (all types, from coal to gold and all stops in between) that are very much the norm
in Colombia, as well as clamping down on those they deem “illegal miners” (which immediately
brings up a grey area in the debate, because technically all informal mining operations are also
illegal). Those who work in such operations are concerned about losing their jobs and those
who run these mines are worried about losing out financially if they have to do things that the
formal mining world does, such as care about the environment, pay taxes for the first time in
their lives etc. The result is a lot of pushback, with large numbers of people up for the protest
actions, interest groups to fund the protests and political support from government figures (who
are typical local/provincial political figures and likely to have been on the take from the illegal
mining ops for a long time). The result is serious social disorder, with no end of blocked roads
reported in key areas and incidents such as looting (16) and the taking of an airport to stop
19

military personnel from travelling in or out of one of the strike areas (even stopping a plane
carrying a seriously ill soldier from taking off (17). The same type of wild-west zone we see in
the Madre De Dios region of the Peru jungle is seen in many parts of rural Colombia, with
policing somewhere between very difficult and impossible, laws made by and for the local
population and powerful individuals running many of the shows. This is not going to be an easy
one for President Santos to win and at some point he’s going to have to call some sort of truce
on this move to formalize small mining, else stoke too much social disorder. My best guess is
that we’ll see the same sort of situation arise as that of Peru, where the government sets a new
deadline for compliance which is ignored by informal miners, os the government sets a new
deadline further into the future which is again ignored, thus one side doesn’t lose face and the
other gets to benefit from the status quo. We shall see, but the current violence has to die
down before any decision can be made. That might be a few days, or might be a couple of
weeks.
Mexico: Violence claims two lives at Goldcorp’s (GG) Los Filos mine in Guerrero
Another episode in the side of Mexico that mining companies do their very best to insist never
affects them. Last week (18) two employees at Goldcorp’s (GG) ‘Los Filos’ gold mine in
Guerrero State, Mexico, were on their way to work when they were stopped by a group of men
who proceeded to put dozens of bullets into them. Some reports (19) place the two murdered
men as sub-contractors at Los Filos who work for ‘Mantenimiento Industrial Toluca’, which is as
the name suggests an industrial maintenance company. The motive for the two killings is still
being investigated (by what sounds like some pretty ineffective police officers, from the reports
I’ve read on the incident) but is “likely connected to narcotrafficking groups operating in the
area”. No shit Sherlock.
Via this report, we again underscore that some places are better than others in Mexico when it
comes to political risk of the narco-violence variety and that the two places that one should
avoid this specific problem are Chihuahua and Guerrero States. Perhaps that’s a little too
blanket a statement, but if those addresses come up in your junior DD you must at least be
able to ask plenty of questions in order to find out whether your target company is in any of the
hot zones of these hot states. For example (and to repeat on this one) I’ve looked at and
rejected companies such as Sierra Metals (SMT.to) Newstrike Capital (NES.v) and Torex Gold
(TXG.to) for this specific reason.
Locals oppose a drilling campaign in La Libertad, Peru
This is another one that I’ve been keeping an eye on for a couple of weeks. The La Libertad
region of Peru plays host to many mining operations (Lagunas Norte, San Simon, La Arena,
Quiruvilca, plenty of etc on those) and there’s plenty of exploration work going on too (e.g. we
have Darwin Resources (DAR.v) at Suriloma very close to the conflict zone around Otuzco
mentioned here today).
The contentious program is at a project called Caupar (after a hill by that name) near Otuzco
and is in the hands of Trinity Mining SAC, an outfit that floated in the UK a couple of years and
is now sponsored for drilling work by Goldcorp (GG). In 2011 Trinity (on its own) tried to drill at
Caupar but the company was run off by locals who don’t want them there, saying that mining
activity would starve the local district of water, cause irreparable damage to the environment
and all et ceteras. This time around in 2013 they’ve tried to drill the zone (20) and the same
type of clashes have happened, Trinity has stopped work and now the local mayor is due to
visit Lima and the relevant authorities to try and stop the exploration drilling before a serious
incident happens (and to add to the tension we hear that Trinity has hired local police officers
as a security detail for the drill work, which probably didn’t go down well at all with local
ronderos and community groups and also suggests any further conflict may end up with serious
violence).
On first hearing of the recurrence of problems at Caupar, the first thing was to contact DAR.v to
hear whether they’d had problems at their site. The answer to that one was a clear “no
problems here” and in fact its the complete flipside, as locals have been very supportive of the
20

drilling program by all reports and everyone is working harmoniously; we note in passing the
smart move by DAR.v of hiring the rondero groups as security detail for the project, which is
another example of the company’s intelligent approach to local politics. On further sniffing
around I’ve heard of no other community problems of any great magnitude in the La Libertad
area currently (it’s a far cry from the situation in Cajamarca, the next region in from La Libertad
further up the road and a disaster zone for foreign direct investment in mining).
We’ll have to wait and see how the Caupar story plays out, but it’s another example of the
micro-regional risk that Peru can hold for mining and mineral exploration companies. You can
have one village all for mining and just down the road, for its own sweet reasons, another
village that will run you off its territory with the barrel of a shotgun pointing into the small of
your back while you’re leaving. In the Andean highlands, know your local politics.
Market Watching
Buying some Network Exploration (NET.v) for a high-risk small trade
I’ve sometimes mentioned the way in which my DD on sector companies is done, conceptually
at least, on a baseball bases system. Most don’t get to first base, some more fall by the wayside
after closer inspection and don’t get to second, etc etc. Well folks, much to my own surprise as
anyone else’s I’m beginning to warm to the idea of Network Exploration (NET.v) as a possible
spec trade play and due to its current share price which, at 0.5c makes “extremely distressed”
look like an understatement, I’m going to try and buy myself a small position here.
As said, the main reason to like NET.v now is the price as it’s selling for half a cent per share
which gives it a market cap of under $250,000 today.
Now for sure, there are plenty of other seemingly dead-in-the-water überdogs out there in the
exploreco world, all withering on the vine and ticking off the days before they’re six feet under
(or transferred to the NEX, whichever comes first). I’m not saying NET.v isn’t in danger of
suffering that fate either (hey, it’s a half cent stock price, danger comes with the territory) but
unlike so many of its completely battered 1c peers, this one still has a few things going for it
and given a small slice of better fortune, might have a lot going for it. What you get for your
half-cent-per-share money is this:
• A company with virtually no cash at bank, but very low liabilities as well. In other
words, the cash drawer may be empty but at least the books are clean.
• However, it does have an option on the Picha property in Peru owned by Lara
Exploration (LRA.v). The deal gives NET.v the right to earn in to up to 75% and the
terms of the deal (which are fairly standard-type) have just been extended by LRA (21)
in order to give NET.v the time to raise the cash it needs for the drill program.
21

• On the money score, that same NR announced that NET.v is trying to raise $500,000 by
selling 33.333m units at 1.5c each (1 unit = 1 share plus a whole warrant with a 5c
strike). If that placement happens in full it will bump up the share count at NET.v from
its current 52.62m to 85.95m S/O (and the F/D to 132.5m), so its current $238k
market cap is probably false...assuming of course the placement gets done.
• If it can close the placement (and signals are that it can, though I get the feeling NET.v
might have to bump down the unit price to 1c and sell 50m shares...we’ll see on that)
then things get more interesting as it already has all the necessary permits and
agreements in place to drill its property, including the key community agreement and
the drill green light from the Ministry. That alone would place it above and beyond
many other juniors currently exploring in South America and we’d be getting newsflow
from the company quickly.
• As for Picha itself, you can find out more about it on the NET.v or LRA.v websites but
the bottom line is that it’s highly thought of by those that have done geologicals on it,
the location is good (next to the Chucapaca project of GFI/BVN that holds 7.5m oz
AuEq) and the company has already confirmed its best targets for the drillbit.
I could go on here and get nittygritty, but the bottom line is that I’m going to risk a few shekels
(and I mean a few) on a high risk play, because if it 1) gets the placement cash closed and
then 2) drills something interesting at Picha, the current share price could multiply by ten in a
heartbeat. However, the risk of failure here is also high and without any joke at all, NET.v could
go to zro and you, dear and kind equity investor, could lose everything you put into its stock.
Be clear. Finally, I want to underscore the tiny size of my proposed trade here by breaking with
convention and instead of taking in big or little or percentage terms, tell you exactly how much i
intend to sink into NET.v, which is $500. No more and like I say, even if I get my full quota
here it’s going to be a small small monetary bet. However, what five hundred dollars does do is
give you 50,000 shares at a penny (sidebar: I’d like to get in at 1/2c but fear that may be too
optimistic, so a 1c target entry price will suit me just fine) which is quite a chunky number if it
starts moving, even a little. I’m not expecting this trade to change my life, nor will my losing all
the cash change much. This is a bottom fishing exercise that, if it goes well, could pay for
Christmas. If the trade opens it will be booked in the “Smaller/Riskier sub-section of the ‘Stocks
to Follow’ list as of next week.
More on the non-stoppage at OceanaGold (OGC.to) (OGC.ax)
On the blog last week I reported on the media coverage of an apparent closure of the
OceanaGold (OGC.to) (OGC.ax) (OGC.nz) Didipio mine due to a problem with the government
there. We put a big question mark against the report at the time and then an update which
confirmed the suspicion that the news report was BS.
A little later I got some extra information on the situation from OGC HQ and here’s an excerpt
from one of the mails in the chain (I’ve asked for and received permission to share this here):
Didipio continues to produce gold and copper as planned and is not shut down. On
Friday 12 July, a temporary suspension notice was issued by the Mayor of the
municipality of Kasibu in the province of Nueva Vizcaya relating to a matter of
obtaining a Mayor’s permit which is required to operate a business in the province and
is renewed annually. A requirement to obtain this permit is a clearance from the local
Barangay(village) council (in this case Didipio) which had been requested but not
issued pending further discussions between the Company and the council. These
discussions took place late last week and on Monday the necessary administrative
clearances and permits were obtained resulting in Business as Usual. There was
minimal impact on the overall operation and effectively no impact at the process plant.
As often is the case in the Philippines, there are groups (usually out Manila) with their
own agendas that look to create noise to drum up support for their positions and we
expect that the article that showed up on an online website a number of days after the
fact was exactly that. The quotes later in the piece make it pretty clear. As I think you
know, we have rigorous disclosure requirements and thus anything that has a material
impact or potential material impact on the Company is always disclosed and we
arguably could be faulted in the past for perhaps being a bit conservative erring on the
22

side of caution with some of these bumps that come up from time to time in the
Philippines (ie. Concentrate trucks in February). To respond to every blog site or online
news report out of the Philippines quite frankly would probably result in four releases a
week and thus not the appropriate way to manage the business or our communications
with our stakeholders but granted, it is something we monitor very closely and are fully
aware that markets can over react to things such as these (ie. Discussion around fiscal
regime in the Philippines in May).
So now you know more. I’ve liked the way OGC has gone about its business ever since it
tackled the problematic community relations at Didipio a few years ago and turned them into
very good relations. If gold rallies further than $1,300/oz it’s a company I’d quickly consider as
a potential re-addition, due to its strong leverage at current price and because it says what it’s
going to do and then does it, no messing.
Lowell Copper (JDL.v) feedback briefs
Here’s a short redux with few issues arising from last week’s note. First a little house-cleaning is
in order as couple of numerical typos cropped up, but neither makes a drastic difference to the
argument. The shares outstanding number quoted last week was 10,000 shares light and the
correct total is 69,571,494 shares outstanding. Then cash per share was said to be 8c but I
didn’t spot that my calcs had been slightly erased (by fat fingers and pilot error, doubtless). The
correct amount of cash per share at JDL.v is 3.8c.
There was plenty of feedback, for which I thank you. Here’s only the quickest of words on the
subject to note that several people who I consider smart sector players wrote in to say that
they’d been offered portions of the JDL seeding round and had politely declined at the time,
citing at least some of the general arguments laid out last week as their problem(s) with the
vehicle. On this subject, I’d point out that I’m lucky to have several reliable contacts who’ll tell
me straight whether they think my views on any given subject are (in their opinion) right,
wrong, reasonable, doubtful etc., with track records of not mincing their words either. In this
case there was very little dissent on the ‘avoid’ call made last week. However, to a person there
was agreement that if anyone can hit the “lost 30%” that may be floating around in the nether
regions of the Ricardo property, it’s David Lowell.
After pleading ignorance, it turns out that I simply wasn’t looking in the right place for the
shareholding breakdown details and a couple of kind readers (you know who you are, thank
you) provided. Here’s a little rundown of major holders and their aggregate holding totals
(either held directly, indirectly in holdings or trusts etc, or a combo):
Lukas Lundin: 17,109,887 shares
David Lowell: 11,416,029 shares
Catherine McLeod-Seltzer: 5,940,194 shares
David De Witt: 4,061,214 shares
Geoff Loudon: 3,148,149 shares
Marcel De Groot: 1,363,999 shares
There are other minor holders as well, but those major insider positions make up 43,039,472
shares of the total S/O number of 69,571,494, around 62% of them all. Chunky.
One thing that came up in correspondence was something I thought about underscoring in last
week’s note but decided that it wasn’t necessary as part of the narrative. However, after
receiving opinions and thinking it over again it gets a mention here. The question was just how
the Ricardo property ended up in the JDL structure and after initial DD that was down to two
options. They go something along the lines of this:
a) Even though Lowell was originally pitching the IPO on the geologically interesting but
unloved Ecuador asset, his real objective was always the Ricardo property which he
was looking to explore because he thinks he’s worked out the secret there. So the
Ecuador asset was used as a front, JDL.v was slow-playing its hand and the real target
23

kept under wraps (in order, for just one thing, to get a cheaper price from HDI for
Ricardo).
b) After pitching on the Waritza property alone, it occurred to the JDL team that they
weren’t getting anywhere and needed something else on which to hang their funding
argument. Therefore one quick search later and Ricardo is bought from HDI for $250k.
In other words JDL has an emergency meeting some time around March 2013, goes,
“Oh crap, we’re dying a death due to Ecuador political risk here, we need something
else and quicktime”, find Ricardo and do the deal.
That was the initial DD, from which point I started asking around and although there was no
need to ask directly, it soon became clear that the situation that JDL faced was b) and not a)
(unless Lowell is a better poker player than anyone thinks, at least). In short, Ricardo was
brought in as a stop-gap measure because the negative reaction to the Ecuador project
surprised those running the start-up.
On final snippet to pass on is that we hear a budget of $3m has been assigned to exploratory
drilling at Ricardo and the results bear fruit, it may be expanded. Which also implies that if
they’re looking at pure dusters (or at least nothing new or different from result of previous drill
results) then the property will be moved to the back burner. This ties in neatly with the air of,
how shall we say...?, of improvisation around Ricardo. I wish JDL.v good luck on the drilling and
will be watching closely for results. From the sidelines.
Conclusion
IKN220 is done, here are some bullet points:
• Taking a punt at Network Exploration (NET.v) is a high risk activity, but as long as
there are a few 1c shares available (or even the 0.5c of last week) it’s one of the
bottom fishing opportunities out there. It needs to raise its capital and I’m not going to
get involved there, much preferring the flexibility of the open market, but if it manages
to get its $0.5m together and isn’t blowing hot air about the investor interest for the
placement it will have a free run at drilling a decent little prospect in Picha. The tiny
market cap leverage is what I like most of all here; even a stock that goes back to 2c is
a theoretical 100% winner (as long as the market volumes pick up).
• I’m still looking to buy some DAR.v at 10c or below after last week’s market lock-out
and with one eye on the newswires for the first results from Suriloma, too. It’s still a
high-risk spec drill play story here and the assays will go a long way to decide whether
there’s a future here. If there is, we can always buy mor at a higher price deck but if
things don’t show well, the few we have can be bailed at a loss without too much
damage done by a starter position. Meanwhile, IRL.to and AQM.v continue on the
potential buys radar. The upside of having liquidated a few positions recently is that
there is a bit of cash available for these small, higher risk punts (as long as conditions
are right).
• Colossus Minerals (CSI.to) and its new low price has been through the wars this last
quarter and is a timely reminder that “wait and see” on interesting potential stocks has
usually been the right strategy recently (a pity I haven’t done it all the time instead of
just most of the time since March, with the long positions at least). Is there a profitable
gold mining operation here in the making for 2014 and beyond? I’m not sure, but
there’s a better potential for a winning trade coming up, so it’s still one I’m watching
carefully. The best guess at this point is that the larger stakeholders will want their
pound of flesh in the form of a placement at the new price range before CSI can get
new traction, so that’s the catalyst I’ll want to see, along with (of course) better news
from the JV partner and the construction development.
24

• I keep meaning to look more carefully at Eagle Star (EGE.v), the only member of our
Lottery Ticket Basket with any sort of 2013 performance worthy of mention, but so far I
haven’t got round to it. It’s on the pending list.
• As I check through the Weekly before sending tonight, I also see gold handily above
$1,300/oz in Asia trading (1315 printed just now, which is nice). Let that continue.
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://incakolanews.blogspot.com/2013/07/more-bad-news-for-colossus-minerals.html
(2) http://adepag.com.br
(3) http://adepag.com.br/index.php/667-encontro-entre-coomigasp-e-a-colossus-abre-negociacoes-firmes-para-
recuperar-os-direitos-dos-garimpeiros
(4) http://finance.yahoo.com/news/colossus-minerals-inc-completes-c-124800738.html
(5) http://finance.yahoo.com/news/colossus-minerals-provides-development-100100885.html
(6) http://incakolanews.blogspot.com/2013/07/hoc-dumped-its-3375m-shares-of-goro.html
(7) http://www.tahoeresourcesinc.com/tahoe-to-clarify-pea-disclosure/
(8) http://finance.yahoo.com/news/b2gold-corp-announces-further-positive-100000367.html
(9) http://www.nytimes.com/2013/07/21/business/a-shuffle-of-aluminum-but-to-banks-pure-gold.html?_r=0
(10) https://customers.reuters.com/community/newsletters/metals/IM_Jul_19_2013.pdf
(11) http://finance.yahoo.com/news/copper-fox-metals-teck-resources-131000169.html
(12) http://finance.yahoo.com/news/panoro-minerals-intersects-128-9-132000482.html
(13) http://finance.yahoo.com/news/candente-copper-corp-acquire-cobriza-132300038.html
(14) http://finance.yahoo.com/news/fancamp-delivering-business-plan-company-131500685.html
25

(15) http://www.tiempodesanjuan.com/notas/2013/7/20/ahora-mendocinos-sensibilizan-pascua-lama-36334.asp
(16) http://www.noticiasrcn.com/videos/saqueos-y-desordenes-caucasia-paro-minero
(17) http://www.noticiasrcn.com/nacional-regiones-pacifico/manifestantes-se-tomaron-el-aeropuerto-quibdo
(18) http://noticias.terra.com.mx/mexico/seguridad/dos-trabajadores-son-ejecutados-en-mina-de-
guerrero,4ee23bd1f94ff310VgnVCM5000009ccceb0aRCRD.html
(19) http://www.proceso.com.mx/?p=347717
(20) http://noticiasmineras.mining.com/2013/07/19/otuzco-autoridades-buscan-detener-labor-de-empresa-minera-en-
chota/?
(21) http://finance.yahoo.com/news/network-extends-picha-option-agreement-130000398.html
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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