IKN #231Premium

The IKN Weekly
Week 231, October 6th 2013
Contents
This Week: Bullish.
Fundamental Analysis: Strategy: Going longer.
Stocks to Follow: Overview, Minera IRL (IRL.to) (MIRL.L), MAG Silver (MVG) (MAG.to), Gold
Resource Corp (GORO), Rio Alto Mining (RIO.to) (RIOM), AQM Copper (AQM.v), Eco Oro
Minerals (EOM.to), Focus Ventures (FCV.v), B2Gold (BTO.to) (BTG), Starcore Intl (SAM.to), Lara
Exploration (LRA.v).
Copper Basket: Overview, Lumina Copper (LCC.v), Nevada Copper (NCU.to), Reservoir
Minerals (RMC.v), Hot Chili (HCH.ax).
The Lottery Ticket Basket: Overview, Agave Silver (AGV.v), Marlin Gold (MLN.v).
Regional Politics: Peru: Copper and gold production up, Peru: Chinese bids for Las Bambas,
Peru: Letters of credit in Yuan/Renminbi.
Market Watching: Those short ideas, Bear Creek Mining (BCM.v) redux, The Bellhaven
Copper & Gold (BHV.v) PEA, slight return, Top Pick Minera IRL (IRL.to) (MIRL.L) catches a bid.
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
Bullish
No big intro this week, only a quick note to say that I like the look of gold in the near term,
therefore the plan over the next two weeks (some straight away, some depending on how the
price goes) is to cover the shorts in GORO and MVG, sell AQM.v and buy more RIO.to. So now
you know
Oh yeah, and I’m not selling a single Minera IRL share, no way José. All details below.
Fundamental Analysis of Mining Stocks
This one's optimistic
This one went to market
This one just came out of the swamp
Optimistic, Radiohead, Kid A, 2000
Strategy: Going longer
As the recent line of near-term trades depend greatly on the near-term movements of gold etc
for success or failure, I’ve been thinking more about the psychological factors that move gold
etc in the near-term. Although I don’t consider myself particularly expert about the doings and
working of the gold market, calling gold right is the single most important factor in any near-
term trade on the juniors today; all boats continue to rise and fall on this tide. I’m normally
1

reticent about calling gold’s near-term future but today we see a set-up that looks decently
optimistic and from what I’ve seen over the last two
weeks gives enough evidence to call gold going higher
in the near term, by which I mean this month of
October and into November, roughly speaking. I’m not
calling some brand new to-da-moon-Alice trend shift
here, only considering that if gold can re-take
U$1,400/oz (a reasonable target for bullish sentiment
for a few weeks only, I’d opine) we’ll see enough
improvement in the prices for junior miners to warrant
a near-term long position. So to thoughts and last
week, gold did this (right). That was an interesting
move on Tuesday, which some blamed on 3q profit-
taking in gold, others on puts action in December
futures and most people pointed to a heavy dumpage
of real, live gold bullion into the Comex open either as
the means or the end.
But for me the interesting bit came afterwards,
because the waterfall drop was followed not by further
selling and price drop, as has been the case all year, but an immediate rebound. That surprised
me and I consider this such a bullish psychological signal that I’m prepared to swallow my pride
and map out the technical analysis signals on a price chart:
Now I’m saving some anti-TA pride but ignoring things like MACD and RSI, but the way in
which the market reacted to the big drop last week was different to every other significant
selling event in 2013 and that shows on this ‘gap map’ chart of GLD year-to-date. The reaction
was good, but what I like just as much are the macro circumstances in which we find ourselves
today. Much cyberink has already been spilled over the current US government shutdown and
as a lot of it pertains to partisan politics in The USA many of the issues (that include larger debt
2

ceiling problems and/or the so-called Obamacare initiative, about which I am blissfully ignorant
and happy to remain so) don’t fall within the brief of this publication. But things that might
affect the dollar and market sentiment that favours true safe havens? Count me in and this next
chart, brought to your author’s attention by the on-the-ball economist Justin Wolfers (1) over
the weekend, shows a marked effect on confidence of the shutdown:
And hey folks, you can blame it on whatever flavour of politics you prefer because I don’t give a
rat’s ass (the impolite way of saying that I’m happy to accept mails from readers on most any
subject, but you’re better off discussing the finer points of US politics with somebody else; See,
I can be polite and diplomatic when I try). No matter the cause that’s a clearly defined and new
trend that’s understandable too, not least because if you suddenly deprive around 800,000
households of the main or only source of income for an undefined period of time it stands the
test of basic logic that all of a sudden, there’s a whole bunch of people who aren’t feeling so
comfortable about spending money.
Add to that the words like “turbulence” and volatility” now being used to describe the near-past
and near-future of the broad markets and the rhetoric from both sides that’s far from trying to
find middle ground and a solution to the government shutdown, so far at least. Then last but
not least, the serious end of the econoblogosphere (promise it’s a real word...I think) such as
Calculated Risk are now taking as between likely and a given that due to the lack of data being
compiled for the Fed’s consumption, the (in)famous taper isn’t going to happen this month and
is now unlikely at the December meeting. And as cherry on that particular cake, there’s serious
commentary now appearing, such as this very interesting and sober take on matters from Dave
Altig (2), no less than senior VP and research director and the Altanta Fed, that’s saying the Fed
won’t taper at all, not this year and not the next (that particular link is a very good read, by the
way).
Now, I happen to agree that the fate of gold in the long-term is less tied to the machinations of
the USA at any given moment. However, this government shutdown has become a sentiment
driver of the market and it’s beginning to affect the things that really matter to gold, such as
the dollar index or bonds prices. True believers (goldbugs if you like) often own gold for a
whole different set of reasons, but the market trades in and out of gold on fear and what we
have here is a fear rising situation, the type that gets the knee-jerk jocks thinking about going
back into GLD, if only for a short while. Added to the resilience we saw in the gold price action
last week and my considered opinion is that for gold in October, up has much more chance of
happening than down and for a change, I’ve convinced myself (instead of sitting on the fence
as is my wishy-washy whussy norm) and I’m trading that opinion in the days to come in the
following way (with details below):
• Covering the MAG Silver (MVG) short in the next few days. This should provide
a small win and the act of covering will add to the overall long position of the portfolio
3

• Possibly covering the Gold Resource Corp (GORO) short this week, possibly
next week, but it’s going to be covered soon enough. I’ll add here that when
covered, this will be a decent sized win in both percentage and absolute terms and the
port will benefit from the profit.
• Adding to the Rio Alto Mining (RIO.to) (RIOM) trading position. This has been
open since June, went briefly into the green but for most of the time, particularly in the
last three weeks or so, has had the nasty smell of “bought badly”. However, the
upcoming newsflow from RIO should be more than enough to turn fortunes around and
if accompanied by the type of small but welcome rebound in gold that I’m expecting,
should dig this out trade of the red and into the green.
• Closing AQM Copper (AQM.v): It’s time to take the loss here.
These trades are aside form those in EOM.to and SAM.to which are designed to run and close in
this month (or perhaps to mid-November at a stretch). Here are more thoughts on each of
those, starting with the two smaller trades:
AQM Copper (AQM.v): It’s a failed trade and although I wanted out at around 15c, it’s time
to leave and make way for something else. I think the project per se has a future and I’ll be
watching development and the exploration/advancement program in 2014 closely, but I can’t
see any reason to hold this any longer. I’ll take the loss, end.
MAG Silver (MVG) (MAG.to): The short in MVG has made a modest gain in a short time
span, but this is one I’m going to cover next week for two reasons. First the one already made
clear, that I think gold’s going to have a positive
October/November and re-take $1,400/oz. In
such a scenario it’d be very unusual not to have
silver tagging along for the ride and therefore
things such as MVG, heavily dependent on Ag
market price for their price cues, would go up as
well. As this 12 month chart shows, MVG also
tends to play catch-up quickly when silver (here
SLV) puts in an upmove.
The second reason is that MVG has a sponsor
who is currently adding to its long positions.
Mason Hill Advisors is a ~$1Bn hedge fund based
in New York and via its Equinox Partners fund
has built a substantial position in MAG Silver. This screenshot from Canadian Insider (3):
Those recent purchases add up to 215,246 shares (NB: priced in Canadian dollars, so for
4

example the CAD$5.88 purchase of October 1st is the equivalent of U$5.71 for the MVG ticker)
and means the total position held by Masin Hill/Equinox is 6,315,770 shares as of this weekend,
or 10.5% of shares outstanding. It’s also worth mentioning that the last time Mason Hill
/Equinox added to its MAG holding was in the June/July 2013 period when the slump had put
MAG back at roughly the same price we see today.
Now, I’m a little shorter with a position that was taken as a value idea and a rough plan to ride
it down to the low $5s in a near-term trade that can get covered quickly. We’ve gone under $6
nicely so it’s a win and there’s nothing wrong with that, but now I’m looking at a big fund that’s
happy to vacuum up shares in the mid to high $5s price range, so combined with my positive
thoughts for gold in October, I don’t see why I should hang around here any longer.
With the smaller two out the way it’s time to consider the larger envisaged trades, which also
get more words.
Gold Resource Corp (GORO): I’m pretty sure (not 100% sure, but pretty sure) that GORO is
not an out-and-out fraudulent scam. I’ve always stated that it was extremely overvalued, but
I’ve never stated that it’s “worth zero” as other johnny-come-lately shorters are now
suggesting. What it is, and of this I have no doubt, is an overpromoted vehicle that’s benefitted
those in charge to a wildly profitable extent via share sales along with overbloated salaries and
contract conditions. It’s also a junior that was pumped to the masses by stock promoters who
were either totally unscrupulous or horribly naive, sometimes both.
However, it’s not worthless. It’s a producing silver and gold miner and although making a loss
at today’s metals prices, it does have a cash treasury which can see it through and if it decided
to cut its much-hyped dividend policy to a sustainable level, it would probably be able to ride
out the sector downturn. We should
also recognize that it’s managed to
keep its share count tight and dilution
down, no small feat in a world of
paper-producing juniors.
However, the near-term signs are not
good for the stock, with or without a
rise in the market price for silver and
gold. Breakeven for GORO is with silver
around $25 (or $24 without the still too
rich dividend policy) and the potential
to cut the divi aside, costs aren’t
unlikely to see much reduction before
its mill expansion to 1,500tpd is
completed in 2014 (and then it’s still a little murky as to how the economics really work). We
also have the pressure from the near-certain upcoming second tranche sale of stock from
Hochschild (HOC.L.), who can be expected to dump another 3.4m shares onto the market,
probably as from the week beginning October 14th (if I have my date maths correct, if not
Friday October 11th may be the day). On the other hand, I think the big 18.3% downmove last
week presaged this event so I’m not sure there’s that much downside pressure left in the
upcoming HOC sale. We’ll see on that one.
Therefore to the call, and it goes like this. I will either 1) cover my GORO short at $5.00, as per
the target conceived a few weeks ago or 2) I’ll cover my short when the next HOC block trade
goes through. This probably means the week after next, rather than this week coming, but I
want to state for the record (so that no Flash update is required) that if $5.00 shows up in the
next five days I’m taking it, pre HOC or not.
As long as GORO doesn’t go into massive rally mode in the next few days I’m due to book a
pretty decent win here, as this short position started reasonably chunkily and got larger along
5

the way. Here below is what I plan to do with a portion of that cash.
Rio Alto Mining (RIO.to) (RIOM): The basic situation; This is not about the larger, long-
term position I have and will keep in Rio Alto Mining. This is about the near-term trade potential
in the stock and to that end I’m going to add to my trading position next week, which will
enlarge the long and bring the cost average down to something around $2.30, all going to plan.
Now for why.
Firstly, if there’s one positive thing I’m taking away from 2013’s market, it’s that I’ve learned to
hold off from buying into a stock that’s gone lower and then much lower than I expected. I
can’t count the number of times I slapped my hand away from the buy button for Minera IRL as
it dropped through the 40s, 30s and 20 cents prices, all the time wanting to average down on a
badly bought entry. Prices go from value to cheap to “oh, now that’s really cheap!” and it’s
around then that I’d wade in and buy/add, only to see things get even worse before they get
better. I know that I’m still prone to the dangers of the value trap and it’s a continued weak
point in my investment armoury, but this year has seen me improve somewhat.
Such is the case with Rio Alto Mining (RIO.to). On several levels it hurts to see the stock
pummelled down to the current levels, as it speaks badly of my eye for a trade and calls into
doubt my conviction of the long-term prospects and value that RIO offers but the flipside of
that is the window of opportunity that the cheap share prices bring to someone with cash and a
newly-optimistic view of the near-term prospects for the market in general and this stock in
particular. It was tempting to add around the $2.20 range recently and it was really tempting
when RIO legged down further to $2.00 very recently, but I kept away from buying at those
times. I even took mails from fellow RIO sufferers who bought (more) at the $2-ish level and
my replies to them were that I thought their purchases were a good idea; that’s true, but I
have to stick to the way in which trades announced in The IKN Weekly are set out and that’s
strictly to do with what I do with my money. It’s a system that keeps things clean, but it’s not a
perfect situation either and reduces flexibility of thought and deed.
I digress. Back to the point here and after staying away from adding in the last three to four
weeks, the result is that RIO has moved down through the value, cheap and very cheap prices
and we now find ourselves back at “RIO is a raging bargain” status. We last saw these $1.80
prices for the stock at the end of
June/beginning of July when gold tumbled
through $1,200/oz (to be exact, the 52
week low was $1.75 and was printed on
June 27th) and I did not expect to see these
prices again, let’s be clear about that.
That’s especially true when considering that
gold is now above $1,300/oz, because
there might be a case to make for RIO
being unprofitable at sub-$1,200/oz prices
(really the line is $1,100/oz approx), but at
these prices RIO is a profitmaking gold
miner that’s being sold in the same way
(nay worse) than the real loss-making dog
junior producers out there, the ones that
don’t have a hope in hell of being
sustainable companies at $1,300 or even $1,400/$1,500 gold prices.
After due consideration, I believe this current window of opportunity is due to several factors.
1) Last week, Chilean brokerage Larrain Vial opened analyst coverage on RIO.to with a Spanish
language report that called the price target at U$2.00 and a sell recommendation on the stock.
At the time of publication on October 2nd, RIOM at U$1.87. I’ve read the report and it makes
its case using the numbers it prefers, some of which seems reasonable to me, others less so
6

(e.g. a valuation on a $1,250/oz gold price and $3/lb copper price for 2014 and beyond, plus
using a DCF valuation method with a blended ~13% discount factor, which seems very harsh
considering this is a producing miner) and there are a few assumptions that are, in my opinion,
plain wrong. Notably, there are obvious factual errors in the report, too (e.g. company
president is not Klaus Zeitler). All fair enough though, I’m not going to wax on about some
other analyst’s bad call, the reason the Larrain Vial report gets a mention here is that its sell call
seems to have been acted upon in the Peru market.
2) Further to that, the drop last week from ~$2 to ~$1.80 came first on lowish, bitty volumes
and then accelerated Friday (even RIOM in the USA did 115k shares, a lot for that ticker). What
with the Peru ticker leading trade volume in the Lima bourse midweek, the pattern to my eye
was one of small retail leaving the stock, followed by a mini-rush for the door Friday (slight
sidebar, a couple of trader desk type people mentioned to me on Friday that there was a whole
rush of selling in “junior names” on Friday, with what looked like a couple of instos puking into
the bids on many stocks, RIO included).
3) RIO is about to report its 3q13 production and although it’s going to be a good number (and
better than some are expecting after its low reported production for July 2013), the IKN
estimated 55k oz Au isn’t going to match the original 63,820 oz guidance for 3q13 that RIO
called on February 25th (4). We’ve mentioned the reason for this lower production in previous
editions, that of the maintenance that was needed on the pregnant solution collection pool that
in turn caused a bottleneck between the leach pads and the production room. However, that
doesn’t mean the production for 3q13 has been lost, it’s just been shifted a little to 4q13. Here’s
how production at RIO La Arena works for the rest of 2013, according to my confident
predictions:
RIO.to: 2013 quarterly sales, guidance vs result
68000
70000
guidance
60000 result 55000
48427
50000
40000 36355
30000
20000
10000
0
1q13 2q13 3q13 4q13
source: RIO data, IKN ests for results 3q13/4q13
We have a 3q13 that should provide around 55k oz Au, but then in 4q13 things are shaping up
very nicely. RIO guided for 58,808oz Au in
4q13 and that’s going to be beaten very Rio Alto (RIO.to): Gold ounces placed on pad monthly
handily, with the IKN forecast standing at 35000 Jan 2012 to date
68,000 oz Au. I’ll repeat, because it’s an
30000
important factor, that the lower 3q13
25000
production isn’t a problem of grade,
tonnage, recovery percentages or anything 20000
leach pad related (this chart shows 15000
unofficial figures for estimated gold 10000
placement in August 2013 of 30k oz Au, for
5000
example). It’s not a gold production or gold
0
room problem either, it’s all about a
temporary and now solved bottleneck at
the collection pool. RIO is now playing
catch-up to a lot of unprocessed ounces
and that will make 4q13 a bumper quarter. Overall, the key production figure will be the annual
one and our 2013 forecast puts RIO finishing with around 207,000 oz, which fits right in with
the original guidance of between 190Koz and 210koz (200k being the median to guidance).
7
21naj bef ram rpa yam nuj luj gua pes tco von ced 31naj bef ram rpa yam nuj luj gua pes
oz Au
source: MEM data/IKN ests

RIO.to: Gold production and forecast for 3q13-4q13
68000
70000
60000 55973 58081 56511 55000
48467
50000
40000 36355
30548
30000
20000
10000
0
8
21q1 21q2 21q3 21q4 31q1 31q2 tse31q3 tse31q4
Oz Au
source: company filings, IKN ests
As for revenues from those ounces, the best guess is $73m which comes from using an average
selling price of U$1,330/oz and 55k oz Au sold, but this revenues figure may be affected greatly
if RIO decided to pay down early some more of its forward gold loan obligations. We’ll see
about that one and along with the VAT rebate that was left hanging over from 2q13, the final
bottom line revenues number from RIO may be messy this quarter, but what really counts and
the way in which we can gauge the financial health is via the balance sheet and cash
treasury/working capital, which we expect to look like this over the next two quarters. Paying
down the gold loan makes sense in this lower cost gold price environment because working
capital is equally benefitted from adding cash or subtracting debt.
RIO.to: Cash treasury per qtr
100
90
80
70
60
50
40
30
20
10
0
If we can get above $60m for end year, that’d be a pretty decent achievement. It would also
mean that RIO has put in the type of profitable quarter that the market is doubting it can do
these days. That’s because the market doesn’t understand this stock very well (blunt enough
for you?).
Moving to costs, despite RIO having
announced a cost trimming program (like just
about any other miner out there) we should
expect them to be up from the $36.712m in
COGS reported in 2q13, and for two reasons.
Firstly, Rio has been moving more dirt now
that its 36,000tpd rhythm is consolidated.
Secondly the price of fuel was around 10%
higher in 3q than in 2q in Peru, which I’m
ballparking as an extra $2m onto the cost pile
for the quarter. Here’s our earnings overview
chart that shows the expected revenues and
costs together, along with amortization and
the resultant gross profit (before G&A etc). The forecast is for revenues of $73m and costs of
11q4 21q1 21q2 21q3 21q4 31q1 31q2 tse31q3 tse31q4
source: company filings/IKN ests
srallod
fo
snoillim
100 RIO.to: Working Capital per qtr
90
80
70
60
50
40
30
20
10
0
11q4 21q1 21q2 21q3 21q4 31q1 31q2 tse31q3 tse31q4
source company filings/IKN ests
srallod
fo
snoillim
$m RIO.to: Quarterly Earnings overview
100 revenues COGS amorts gross profit
90
80
70
60
50
40
30
20
10
0
1q12 2q12 3q12 4q12 1q13 2q13 3q13est4q13est
source: company filings/IKN ests

$38m in 3q13, something we’ll find out in mid-November when the company reports its
financials. However, that higher cost number hides the fact that we expect cash cost per ounce
to drop back in 3q13. There are myriad ways
of running cash cost numbers these days and
it gets a bit of a mess, but what we require
from any company is a straight line
comparative which shows how the operation is
doing and cuts out the ever-fluctuating
quarterly noise. In the case of RIO.to, the
noise can come from pre-paying the forward
gold loan or it can come from bottom line
mess from VAT cheques so the straight line
chosen is the simple one; we divide its COGS
figure by the number of ounces produced in
the quarter and here right is how that looks.
Thanks to the higher production of 55k oz
expected for 3q13, we’re looking at a cash cost by our simple measurement of $691/oz if our
$38m costs number comes in. Then for $q13 things should get a lot better, as the backlog of
production comes through and our calc gies us $618/oz costs, which should shut the new
chorus naysayers up... at least a little.
Please note that the above number is not (and does not pretend to be) the now fashionable all-
in cash cost figures. For what it’s worth, I’m expecting something around the $1,100/oz number
from RIO this quarter for all-in costs, but as the moving parts are trickier and the RIO 3q is
potentially messy financial-wise, that’s just a very rough ballpark figure at this point.
To the trade: There are four reasons to buy RIO.to today.
1) The share price has gone to true bargain basement levels
2) I expect gold to have a decent October/November and at some point re-take U$1,400/oz, so
gold stocks in general should benefit.
3) The 3q13 numbers should come in well enough, and probably better than most expect after
the July number of 15,431 oz Au was announced by MEM (the last publicly announced
production figure, see chart below).
4) The 4q13 numbers will be excellent.
RIO.to: Monthly gold production figures
25000 24401
22500
20144 19560 20184
20000
17500 16692 17639 1542615091 15998 17039 15635 15431
15000 1379313670
12887 12897
11871
12500 1071210114
10000
7500
5000
2500
0
9
21naJ bef ram rpa yam nuj luj gua pes tco von ced 31naJ bef ram rpa yam nuj luj
RIO.to: COGS per ounce sold
1000
869 900 803
800 757 691
700 640 618
600 532
500 452
400
300
200
100
0
Ozt Au
source: MEM
Or put another way, the reason to buy today is the market price for the shares, the reason to
wait for a higher selling point is the numbers RIO will offer the market at the end of 4q13. If
gold can average U$1,350/oz in 4q13 RIO is forecast to make an operating profit of around
$40m and will be able the shake off this silly “unprofitable” marker it’s recently picked up from
people who can’t see past the last set of numbers printed by the company. And of course if
21q1 21q2 21q3 21q4 31q1 31q2 tse31q3 tse31q4
U$/oz
source: RIO data, IKN ests for 3q13/4q13

gold goes higher, so will the profits.
RIO does have a gap in its finances that revolves around the Stage 2 copper project. We’ll find
out a lot more about that in 1q14 when the company gives us the feasibility study, but we
already know the ballpark capex number of $300m earmarked for the project, so if we run a
straight line through potential earnings from now until 2015 when the plan should start
becoming a reality, even in the best of circumstances U$1,350/oz gold won’t bring the RIO.to
treasury position past $200m. That means a likely round of equity financing at some point and
that means the current share count is going higher. But even with that in mind and assuming
the current stage one oxide production doesn’t find new mineralization to extend mine life
beyond 2016, the dip in the price of RIO has gone through the stops and is at plain silly. Along
with the upcoming positives fully expected from the company for 3q13 and 4q13, the window
to add and average down today is compelling. I buy.
Stocks to Follow
Just four of our positions made upmoves (IRL.to, GORO short, TAHO short, MVG short) and as
three of those four were the shorts it’s a fair indication of how grotty the week was. Two of the
tinycaps were unchanged (DAR.v, NET.v) which means eight positions were losers (RIO.to,
BTO.to, LRA.v, RIO.to trading, SAM.to, EOM.to, AQM.v, FCV.v). The best upmoves came from
Minera IRL (IRL.to p 22.0%) and Gold Resource Corp (GORO short up 18.3%) and frankly, I’m
glad of the buffer they provided. The biggest percentage loser was AQM Copper (AQM.v down
20.0%) but the biggest real loser was Rio Alto Mining (RIO.to down 13.4%) and that one hurt.
B2Gold (BTO.to down 9.5%) wasn’t far behind.
We have 14 open positions on our ‘Stocks to Follow’ list, one less than our self-imposed
maximum. Two of the positions are in the green, all others red.
10

Company Ticker this week Avg Price Reco date Current PPS Gain/Loss% Notes
Top Picks
Rio Alto Mining RIO.to Str buy C$2.30 07-apr-11 C$1.81 -21.3% best LT value
Minera IRL IRL.to buy C$0.35 22-jul-12 C$0.305 -12.9% top pick called at 24c
Longs
B2Gold BTO.to hold C$3.07 28-nov-12 C$2.38 -22.5% sold 1/2, rest rides. Quality
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.84 -27.0% solid biz model, LT hold
Rio Alto Mining RIO.to Str buy C$2.68 07-jun-13 C$1.81 -32.5% ST trade position, separate
Starcore Intl SAM.to hold C$0.235 08-sep-13 C$0.21 -10.6% new trade, runs to Nov max
Eco Oro Min. EOM.to buy C$0.55 22-sep-13 C$0.53 -3.6% new trade, st pol risk play
Shorts
Gold Res Corp GORO short U$9.52 03-may-13 U$5.50 42.2% tgt $5, best short, added
Tahoe Resources TAHO short U$13.10 08-apr-13 U$17.15 -30.9% port hedge, easy2b short
MAG Silver MVG short U$7.00 12-sep-13 U$5.82 16.9% near-term short
Smaller/Riskier
AQM Copper AQM.v hold C$0.31 16-oct-11 C$0.10 -67.7% 6c buy op gone, 15c tgt
Focus Ventures FCV.v spec buy C$0.175 01-jul-12 C$0.13 -25.7% revised tgt 25c
Darwin Res DAR.v hold C$0.10 14-jul-12 C$0.09 -10.0% drill res-Aug'13
Network Expl. NET.v hold C$0.01 22-jul-12 C$0.005 -50.0% V. small spec, foothold
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% closed
Bellhaven BHV.v jun'13 C$0.065 03-jun-13 C$0.12 84.6% closed ST trade
B2Gold BTO.to aug'13 C$3.07 28-nov-12 C$3.44 12.1% sold 1/2 to raise cash
Colossus Min. CSI.to aug'13 C$0.72 24-jul-13 C$0.79 9.7% closed thru nerves on future
Pretium Res PVG.to aug'13 C$8.20 11-jun-13 C$10.14 23.7% closed to raise cash
Bear Creek BCM.v sep'13 C$2.06 30-may-13 C$2.20 6.8% sold on pol risk decision
2009, 2010, 2011 and 2012 closed positions in appendices below
Now for some notes on a selection of the above stocks.
Minera IRL (MIRL.L) (IRL.to): Position added. And just in time, too. We’re now 27% up
since this was called Top Pick and most of that gain came in the week just gone and lucky old
me, it came after I added my own final chunk. The stock gained on the LionGold buyout talks
news and we go into that a little more below.
Please note that due to the addition to the position length, the cost average for the stock has
dropped to 35c (it’s a few tenths under that in fact, but we’re close enough).
MAG Silver (MVG) (MAG.to): Covering short next week. See above
Gold Resource Corp (GORO): Possible covering short next week. See above. This is an
official headsup on the plan and therefore will need no extra Flash update during the week (or
11

any week coming) as if you see $5.00 printed on this stock, assume I’m out.
Rio Alto Mining (RIO.to) (RIOM): Adding to trading position. See above.
AQM Copper (AQM.v): Possibly selling next week. On Friday afternoon somebody decided
that they just had to sell 80,000 shares of AQM and they had to sell them there and then,
which is fair enough. Therefore a dumpage drop from the general 12.5c of the week and a
humph sound from my lips on seeing the final numbers. Yep, I think it’s about time to sell these
and take my heavy loss. I’ll accept 12.5c or 12c the next time it appears, which may even be
next week. Again same system as GORO, no extra Flash update required if the suitable price
and volume come along, though as this is a patchily traded issue patience may be required to
exit successfully. Could be days, could be weeks, the market will decide.
Eco Oro Minerals (EOM.to): I added what I wanted to add to this near-term trading position
last week so although small, it’s now set fair. We now wait for the news on the Páramo
boundary decision, which should come this month. Be clear, this one isn’t for holding a long
time, we’ll sell into the news however it might fall.
Focus Ventures (FCV.v): And the financing is announced (5). FCV has gone for a $1.2m
round of raising at 12c per unit (unit = 1 share + ½ unit priced at 18c) and we understand that
insiders are going to take chunks of that offer as well (presumably Ridgway and Szotlender first
in line), so that’s a good sign. The other snippet to pass on is that FCV has apparently been
shopping the new phosphates plan to institutions and agro investment funds. Several instos are
very likely to take part in the placement (no names no packdrill on that) but although FCV got
positive feedback from the agro funds, the main complaint received was that the company was
too small for their purposes. That makes sense, as agro funds tend to be big pool concerns and
need size to move their needles. Well, at least it gives FCV something to aim for and unlike so
many other financings in junior land at the moment, we can be reasonably confident that this
one will close fully subscribed and in good order. As for the share price, it clicked down a notch
on the news but that was understandable and it’s no biggie. I wouldn’t be surprised to see FCV
trade at 12c before the process is over, but it’s after that, when the company puts the cash to
use, that we’ll see what “new FCV” is made of.
B2Gold (BTO.to) (BTG): Last week I wrote, “BTO seems to have found a floor level at
$2.60”. How’s that working out?
If you like the idea of an October bounce as set out above, but don’t like RIO.to as much as I
do and are looking for an alternative that has all the quality you’d want from sector leader, look
no further than BTO. We’ve seen it rebound nicely from these levels and if you’re feeling really
chartist traderjock, $2.25 might be a number to remember.
Though personally I wouldn’t sweat the small stuff too much; BTO is in a nice price zone right
12

here right now at $2.38.
Starcore Intl (SAM.to): Just a quick line to say that under the circumstances SAM stock did
OK last week. It’s the type of smallcap small priced stock that will take big percentage hits from
moves that are a penny or two down (or up) but volume wasn’t high and it’s more like a bit of
trading round the edges by people who need to sell (be that for financial or nerve reasons).
We’re long this near-term trade due to the conviction that the company is going to offer us
some very decent financials in the next couple of weeks.
Lara Exploration (LRA.v): LRA remains in quiet mode and the share price continues to slowly
notch down. At some point we’ll get new newsflow, until then it’s an easy hold but no plans to
add until we have some fundies updates, at the very least.
The Copper Basket
After forty weeks of 2013 The Copper Basket is showing a 20.72% loss to level stakes.
company ticker price 1/1/13 Shares out Market Cap current pps gain/loss%
1 Augusta Res AZC.to 2.43 144.35 294.47 2.04 -16.0%
2 NGEx Resources NGQ.to 3.40 168.66 281.66 1.67 -50.9%
3 Lumina Copper LCC.v 9.43 43.61 274.31 6.29 -33.3%
4 Copper Fox CUU.v 0.83 402.96 213.57 0.53 -36.1%
5 Reservoir Min. RMC.v 2.41 41.68 194.65 4.67 93.8%
6 Nevada Copper NCU.to 3.50 80.5 169.05 2.10 -40.0%
7 Hot Chili Ltd HCH.ax 0.72 297.46 126.42 0.425 -41.0%
8 NovaCopper NCQ.to 1.80 53.02 104.45 1.97 9.4%
9 Panoro Minerals PML.v 0.62 204.71 73.70 0.36 -41.9%
10 Western Copper WRN.to 1.39 93.68 68.85 0.735 -47.1%
11 Curis Resources CUV.to 0.70 63.13 36.62 0.58 -17.1%
12 Candente Copper DNT.to 0.375 122.05 31.73 0.26 -30.7%
13 Oracle Mining OMN.to 0.80 49.03 17.65 0.360 -55.0%
14 Yellowhead Min. YMI.to 0.59 63.45 14.28 0.225 -61.9%
15 Strait Minerals SRD.v 0.08 57.26 4.87 0.085 6.3%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg -20.72%
The Copper Basket had just four stocks registering gains since last week (LCC.v, HCH.ax,
YMI.to, SRD.v), then one other remaining unchanged (DNT.to). All others dropped (NGQ.to,
AZC.to, CUU.v, NCU.to, WRN.to, PML.v, NCQ.to, OMN.to, CUV.to and yes, even RMC.v). The
13

basket average at -20.72% on the year is just 0.28% lower than this time last week, which
means that the collective bacon was largely
saved by big moves in the winners, namely
Copper Basket 2013 average, weekly
Lumina Copper (LCC.v up 24.6%), Strait 12%
Minerals (SRD.v up 21.4%) and Yellowhead 8%
4% Mining (YMI.to up 9.8%). As for the worst
0%
losers, they were Nevada Copper (NCU.to -4%
down 13.6%) and Panoro Minerals (PML.v -8%
-12%
down 11.1%).
-16%
-20%
Despite the generally negative outlook in -24%
-28%
the juniors, copper the metal didn’t do that
-32%
badly. Ir chopped a bit between $3.27 and
$3.30/lb all week, but the range is fairly
tight and it’s still a lot better than the
$3.10/$3.20 range of July.
As for the best read on the copper market last week,
that was undoubtedly the Andy Home report dated
October 1st and featured on the blog (6). In it, Home
reported on the growing discontent among users for
the LME bottlenecking of prices which are prompting
rule changes, set to come into force next year. The
general thrust of the piece was about the way in
which copper prices are being kept artificially high by
the gaming of the warehousing system, of which
we’ve spoken on many occasions. It also throws light
on the documented change in cancelled warrant
percentages of stocks, something we’ve tracked all
year and have noted how the dataset now seems
irrelevant, thanks to the way in which copper stocks
are booked out by the banks that control the
warehouses. The overall feeling I get from the report
is of a system that’s not yet ready to break down but
is starting to creak, so if things start changing it’s probably not going to be good for the market
price for copper. End users will be
happy about that, miners less so,
which is probably why you don’t
hear many complaints and wails
about the archaic business methods
of the LME from the mining
companies. However it again points
at a subject we’ve covered
previously, that of price discovery,
and how the LME may be making
itself irrelevant on the most crucial
set of numbers it produces. If spot,
forward or futures contracts closed
outside of the LME system start to
vary considerably from the world
quoted market price, warehouse credibility will go downhill fast. As we’ve mentioned before,
artificially high bank-induced warehouse prices are a big and dangerous game.
As for the inventory numbers, world stocks dropped again last week, this time by 15,869mt (or
-2.2%) to 724,609mt. Of the total, LME stocks dropped by 2.8% to 525,925mt, Shanghai
remained unchanged once again (Chinese holiday period comes to an end today) at 150,994mt
and Comex dropped 2.4% to 27,690mt. LME cancelled warrants count for 261,600mt, or 49.7%
14
ht6naj ht02 r3bef ht71 dr3ram ht71 ts13 ht41 ht82 ht21 ht62 ht9 dr32 ht7luj ts12 ht4gua ht81 ts1pes ht51 ht92
source: IKN calcs, TSX data
31/1/1
morf
egnahc
%
Cancelled Warrants at LME, IKN157 to date
60%
50%
40%
30%
20%
10%
0%
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 122NKI 322NKI 522NKI 722NKI 922NKI 132NKI
source: Cochilco, LME
rof
yrotnevni
EML
%
latot
yreviled
resu-dne

of total stocks.
Now for updates on some of our covered stocks
Lumina Copper (LCC.v): Hey now, look at this chart.
Without any news to speak of we’ve had a very decent rebound in LCC in the last few weeks
that was topped off (for the time being at least) by Friday’s move on reasonably good volume
back over $6. Yes, this is indeed the same company stock that ended August under $4. This
move could be due to the upcoming provincial/legislative elections of October 27th that are
expected to be a negative (mild or strong, time will tell) for sitting President Cristina Fernández
de Kirchner’s party, but it smacks more of market pumping to me. But that’s ok, that’s what the
market is supposed to do. Avoid.
Nevada Copper (NCU.to): Post-bell Thursday NCU published the NR on its feasibility study
(7) for the open pit mining project at Pumpkin Hollow. As this five day chart that uses the
copper ETF (COPX) as benchmark shows, the reception for the numbers once trading was
running Friday was negative, with a chunky price drop (that seems to been anticipated on the
previous days, but that’s another story) and somewhat raised volume.
I think the market reaction to this one is correct and without beating around the bush, the feas
numbers sucked. NCU is a stock I’ve watched over the years with interest and even traded it a
couple of times (unsuccessfully, I might add) because it’s always had a decent looking potential
around it. Big, sponsored by cash, good pol risk location, plenty of market radar. Sadly that’s
now changed, because the numbers given up by the company in the feasibility for the key open
pit are 1) uninspiring and 2) smack of a company that’s more interested in bullshitting the
15

market than being open and transparent about its project.
Exhibit One is the project capex, slated at $926.6m for a 70,000tpd machine. That in itself looks
pricey, but if we check just a little further on in the NR we’re given “LOM sustaining capital
totals $758 million, of which $425 million is incurred beyond Year 5”. Woah! Yup that says
seven hundred and fifty eight million dollars of sustaining capital (i.e. capital costs that we’d
normally assume to come from the cash flow of the working mine) and that’s a lot, but also
$331m of that “sustaining” capex is due “in the first five years”. Then just a line or two further
down, we read that one of the sustaining capital line items is “mine equipment” that’s slated to
cost $331.3m.
This is not a coincidence, ladies and gentlemen. What NCU has done is shift $331m of true
capex over to fake sustaining capex in order to cut the apparent capex bill and close the circle
on its (now obviously BS) capital payback period and make its IRR look better than it is. Feas
studies are not the times that you want to come across obvious manipulative red flags in the
numbers, they’re supposed to be serious documents that we can rely upon.
And talking of IRRs, the feas NR tries to push forward the idea that NCU is using a $2.75/lb
copper price in its calcs, but when you start reading the dirty details, it turns out that the “base
case” on which its 17.9% IRR is based uses $3.33/lb copper and there’s no assumption of
$2.75/lb Cu prices until 2022, seven years after the mine is supposed to open! If that’s your
idea of a robust base case economic assumption, I strongly suggest that you leave the world of
junior mining investment and speculation immediately and put your cash into time deposits.
Then there’s the overall strip rate of 3.7:1. That can work with higher grade deposits but this is
0.45% CuEq at best (lower than expected) and the strip rate alone points to why NCU has
chosen such a high copper price for its base case.
The bottom line here is that Pumpkin Hollow’s key stage 2 open pit mine, the one on which its
fate truly hangs (rather than the smaller stage 1
underground mine plans now moving forward)
show a project with at best marginal economics.
When stacked alongside a capex that’s promoted
as $926m but is really $1.25Bn at least and then
add in the deceptive way in which all this
information has been presented, NCU.to has now
dropped off my radar of potential copper plays,
once and for all. Which is a pity, because I
always thought it promising, but when the
numbers don’t add up the numbers don’t add up,
period. I fully expect the future of NCU to involve
a stock price with a 1-handle.
Reservoir Minerals (RMC.v): The big winner of 2013 copper stocks last week announced
that it was starting an exploration program on some of the 100% owned property packages it
has around the Timok region. The implication here is that if things go well, RMC will add
another superduper deposit to the one it’s JVing with FCX.
The market took this as a signal to take some profits, perhaps. If I were a holder the small
correction we’ve seen over the last two weeks wouldn’t have me sweating on anything, though.
Hot Chili (HCH.ax): This is stock that’s overdue on my list of DD and now that its annual
report is published (8) (October 1st) it’s probably time, though its key catalyst in the next few
months is likely to be the resource upgrade at the most advanced Productora project. When
that’s in we’ll be able to gauge whether tonnage expansion dilutes the (so far at least) decent
grade of 0.6% Cu (0.7% CuEq) at a 0.3% Cu cut-off. The other thing in play with HCH is its
cash position, which at $11m as at June 30th and a high relative burn rate points to a company
16

that’s going to have to raise sooner than later. It already has nearly 300m shares out and the
Aussie junior tendency to dilute upside away from shareholders is raising its ugly head here.
Still, it’s an interesting company and has better than average assets on its hands in the best
mining country on the continent. I do need to look more closely, and will.
The Lottery Ticket Basket
After 40 weeks of 2013 The Lottery Ticket Basket is showing a 35.81% loss to level stakes.
company ticker price 1/1/13 Shares out Market Cap current pps gain/loss%
1 Marlin Gold MLN.v 0.10 680 61.20 0.090 -10.0%
2 Eagle Star Min. EGE.v 0.125 79.13 15.83 0.200 60.0%
3 Bellhaven BHV.v 0.14 136.81 10.94 0.080 -42.9%
4 AQM Copper AQM.v 0.08 105.57 10.56 0.100 25.0%
5 Fancamp Expl. FNC.v 0.125 177 9.74 0.055 -56.0%
6 Tango Gold TGV.v 0.13 76.24 4.96 0.065 -50.0%
7 Copper North COL.v 0.10 58.7 3.23 0.055 -45.0%
8 Inca One Res. IO.v 0.12 34.0 2.89 0.085 -29.2%
9 Agave Silver AGV.v 0.30 21.55 2.48 0.115 -61.7%
10 Darwin Resources DAR.v 0.20 26.16 2.35 0.090 -55.0%
11 Gryphon Gold GGN.to 0.085 194.64 1.95 0.010 -88.2%
12 Netco Silver NEI.v 0.075 9.4 1.88 0.200 60.0%
13 Glass Earth GEL.v 0.155 105.67 1.06 0.010 -93.5%
14 Rio Cristal RCZ.v 0.025 17.259 0.69 0.040 -84.0%
15 Firestone Ventures FV.v 0.045 36.82 0.55 0.015 -66.7%
Portfolio avg -35.81%
Only twelve weeks left to go. For a while, The Lottery Ticket Basket was a useful marker of the
poor state of the tinycap end of the sector
but now we’re out of the doubt zone and into 25% Lottery Ticket Basket 2013 average, weekly
a period when it’s clear to one and all that 20%
15%
the knell has knolled on the sub-sector, the
10%
last vestiges of active use of our list have 5%
0%
disappeared. It started 2013 as a bright idea, -5%
it will finish as another discarded section of -10%
-15%
The IKN Weekly and I’m just going to have -20%
to entertain you all in some other way. -25%
-30%
-35%
-40%
So to the count and last week three stocks
-45%
made gains (FNC.v, COL.v, CMA.v now
known as AGV.v), five were unchanged
(GGN.to, EGE.v, DAR.v, RCZ.v, FV.v) and
seven showed losses (MLN.v, BHV.v, GEL.v,
AQM.v, TGV.v, IO.v, NEI.v). Best percentage moves were in (Agave Silver AGV.v up 130.0%)
and Fancamp (FNC.v up 22.2%), worst were in Glass Earth (GEL.v down 33.3%) and AQM
Copper (AQM.v down 20.0%).
Cream Minerals is now Agave Silver (AGV.v): Another name-change and rollback is foisted
upon a hesitant world. What’s changed at Cream?
1) The name, now Agave Silver and with a ticker (AGV.v)
2) The number of shares out, as the namechange came with a 10:1 reversal
17
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 ht82 ht4gua ht11 ht81 ht52 ts1pes ht8 ht51 dn22 ht92 ht6tco
source: IKN Weekly data, TSX
2102/1/1
morf
egnahc
%

3) And along with a round of funding, which added 6m shares at 10c apiece, AGV.v now
has 21.55m S/O.
4) The funds came from the pocket of the company main man Robert Lang, who clearly
hasn’t given up hope on the company’s flagship (term used loosely this time) Nuevo
Milenio project. We salute the fact that Lang is sinking his own cash into AGV, which
sets him apart from so many other microcap junior controllers, and as such wish him
the best of luck. He’ll need it.
During the rollback/namechange/funding process, CMA went from 0.5c to 1c. That number got
changed to 10c on the rollback and then in post-arrangement trading, another 1.15 was added
to the price. That’s a roundabout way of pointing out that the 130% weekly percentage win
may look extremely pretty, but it’s really not that big a deal and once the new ticker has settled
down we’ll find out if there’s anything under the hood.
Marlin Gold (MLN.v): Like I’ve been saying these past few weeks; if you like this spec trade
idea and want in there’s no need to pay 9c and 10c, as a little patience will get you all the 7.5c
and 8c you want. This five day chart is offered as evidence.
Regional politics
Pure Peru this week
Peru: Copper and gold production up
We’ll get the official figures and company-by-company breakdowns in a few days’ time from the
Ministry of Energy and Mining (MEM), but late last week the Peru stats office INEI released
Peru: Copper production per month
140000
130000
120000
110000
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
18
11naj bef ram rpa yam nuj luj gua pes tco von ced 21naj bef ram rpa yam nuj luj gua pes tco von ced 31naj bef ram rpa yam enuj yluj gua
source: MEM
sennot
cirtem
Peru: Gold production per month
20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
11naj bef ram rpa yam nuj luj gua pes tco von ced 21naj bef ram rpa yam nuj luj gua pes tco von ced 31naj bef ram rpa yam enuj yluj gua
source: MEM
dlog
fo
smargolik

preliminary figures for August mining production by metal (9) and here are the monthly
production numbers for copper, gold and silver (though #3 metal silver is a minor part of the
exports mix; copper and gold are the real
main players for Peru). Peru: Silver production per month
350000
Gold and silver had reasonably good 300000
production months and add to the good
250000
news, but the real story here is copper.
The approx 134,000 tonnes produced in 200000
August is a country record by a long way 150000
(in fact, July was the previous record for
100000
modern times) and is another sign that
Peru is getting its mining act together 50000
again. Expect this news to be greeted
0
positively when the official figures make it
to the world via MEM.
Peru: Chinese bids for Las Bambas
The bidding process for the sale of Las Bambas by Glencore/Xstrata is beginning to get into
gear, with first round bids now coming in. Last week saw China’s Minmetals making its bid for
the deposit official (10), a company already exposed to Peru via its ownership of the El Galeno
project in Cajamarca region. This came on the heels of two other official firsts round bids from
Chinese companies Jiangxi Copper and MMG (Hong Kong listed). It made all the right noises
about being interested in the project but not wanting to pay too high a price, but the plain fact
is that the bid is in and the interest is clear.
There’s been a lot of gossip about Las Bambas recently, with for example the silly end of the
press catching hold of a piece of bad reporting by the FT that put Newmont (NEM) in the frame
for the purchase of Las Bambas and making far too many wild assumptions (all false) or the
way in which a new consortium run by Aaron Regent (ex-Barrick) is going to buy the project.
Please, don’t believe the bullshit on this, Las Bambas is certain to be bought by Chinese money.
Glencore/Xstrata knows which side of their bread is buttered and we must recall that the only
reason they’re selling the asset is that China insisted on it as a condition to greenlight the fusion
of Glencore and Xstrata last year. For sure there’s no term in that deal which says
Glencore/Xstrata must sell Las Bambas to a Chinese concern (such a stipulation would probably
be illegal), but come on folks! Isn’t this one too obvious for words? Or put another way, if Las
Bambas is eventually sold to non-China money, China will be mightily pissed with the vendor
and would you want to piss off the biggest single consumer of metals in the world? No, neither
does Zug.
I don’t know which Chinese nameplate will eventually be stuck on the front gates at Las
Bambas. It might be Minmetals, it could be Chinalco (Toromocho etc), it might be one of the
other two bidders of last week or even another as yet unnamed. But make no mistake, this is a
project that’s about securing resource supply to China.
Peru: Letters of credit in Yuan/Renminbi
Even more Peru and China, with this news last week a sign of the times in LatAm that was
almost completely ignored by the northern business press. Last week (11) Citibank in Peru
introduced a new service of letters of credit for Peru denominated in Chinese Yuan (aka
Renminbi), the first time any country in Latin America has been offered this service. According
to the director of overseas commercial sales at Citibank Latina America, one Othman Gamero
(translated), “China has become the number one commercial partner for Peru, now that 6% of
all LatAm commerce done by China is located in the country”.
Because of the lack of forex trading between the two currencies, the letter of credit uses the
forex of US Dollar to Sol and US Dollar to Yuan to calculate the amount guaranteed at any
19
11naj bef ram rpa yam nuj luj gua pes tco von ced 21naj bef ram rpa yam nuj luj gua pes tco von ced 31naj bef ram rpa yam enuj yluj gua
kilos
source: MEM

given time, but apart from that small detail this is a financial move that will facilitate South-
South business and it wouldn’t be a big surprise to see it adopted by other regional countries
soon.
Market Watching
Those short ideas
A quick catch-up with the stocks chosen as short potential ideas in IKN224 dated August 18th ,
what with your author’s call of a market that looks more positive as of today IKN231 October
6th. Here’s how the chosen stocks have got on between then and now and added into the mix
(in red ink) are the benchmarks of gold, silver, PM miners and juniors, all via their best known
ETFs vehicles.
• International Tower Hill (THM) U$0.76 to U$0.31 down 59.2%
• Gold Resource Corp (GORO) U$8.52 to U$5.50 down 35.4%
• Seabridge (SA) U$14.32 to U$9.57 down 33.2%
• Great Panther Silver (GPL) U$1.18 to U$0.82 down 30.5%
• NovaGold (NG) U$3.15 to U$2.23 down 29.2%
• Exeter Resources (XRA) U$1.02 to U$0.74 down 27.5%
• Juniors Index (GDXJ) U$48.85 to U$38.70 down 20.8%
• MAG Silver (MVG) U$7.30 to U$5.82 down 20.3%
• Gold Miners Index (GDX) U$29.79 to U$24.19 down 18.8%
• Fortuna Silver (FSM) U$4.34 to U$3.55 down 18.2%
• Silver Bullion ETF (SLV) U$22.34 to U$20.93 down 6.3%
• Gold Bullion ETF (GLD) U$132.58 to U$126.53 down 4.6%
• Tahoe Resources (TAHO) U$17.44 to U$17.15 down 1.7%
A few thoughts:
• I’m reasonably happy about how the picks are doing compared to the benchmarks. For
one thing, they’re all down compared to IKN224 and in the end, that’s what a short
potential should show.
• The biggest loser, International Tower Hill (THM), doesn’t really count (I think) because
on August 18th it was just about at the top of its silly dead cat bounce post feas study
and also it never got above $1, which is one of the stipulations I use for a reasonable
shorting opportunity.
• Tahoe Resources (TAHO) is the worst performing short and it’s also a personal thorn in
my side, because it’s also one of the three that I’m actively shorting today. You’ll also
notice that it’s the one I’m leaving open after the plans to close the GORO and MVG
shorts announced today and scheduled to happen in the next fortnight. Call me
stubborn if you like.
• Even the Fortuna Silver (FSM) call has worked well enough, because that was one
picked out to be more attuned to the silver price and was more a case of being
fundamentally a little overvalued at the time and called as the short side in a theoretical
long/short pair trade, instead of an outright short in its onw right.
• Even if I do say so myself, GORO has worked very well.
From here until the end of October, or even November, I’ll be happy to see all these* make
gains as it would signify the type of all-boats-rising market I’m looking to take advantage of in
the weeks to come.
*except perhaps TAHO, but I could still live with it
Bear Creek Mining (BCM.v) redux
The position is sold and the stock rises to $2.50, such is the way of the world. Last week BCM
made news when the Mining and Energy Minister, Jorge Merino, told an assembly of foreign
20

journalists during a press briefing that the government was keen to come to an agreement with
BCM on the Santa Ana project. He said (12) (translated): “We hope that the Santa Ana issue
can be resolved as soon as possible so that it can be mined for the silver reserves, under the
new concept of development and social inclusion that did not exist before” and continued with,
“we are looking for a friendly solution that lies within the law...and there’s the best will in the
government to help the unblocking of this project.”
Which is fair enough, but as we’ve pointed out on these pages far too many times to be
healthy, the fate of the Santa Ana project has never lain and will never lay in the hands of the
national government. Meanwhile, people who know the Santa Ana location, community and
situation far better than the (adjective redacted) Merino have voiced clear warnings of what’s
ahead if the government decides to press the on button here. Yonhy Lescano is a well-known
politician in Peru and for the last 12 years has been a member of the national congress. He was
born and raised in the Aymara region of Puno, has represented the region in congress and has
a reputation for honesty among the general population as well as a national presence these
days in the political sphere, often the party member who appears on TV interviews and Q&As
etc. To top it all, he was also one of the members of congress for the Aymara region that had
its anti-Santa Ana uprising back in 2008, so he knows all about the feeling in the area. Here’s
what Lescano had to say about last week’s development (13):
“The State should not be activating these issues. Without doubt the Aymara communities will
rise up in protest once again. I think that [the State] wants to see blood, wants to open old
wounds and that is irresponsible.”
This is correct. Or another way of looking at it was in this reply to subscriber LC, who asked me
a few very valid questions by way of follow-up to the note in IKN230 last Sunday. I replied:
I agree that BCM should fight for ownership of Santa Ana, I've made that clear too. The
major mistake they're making is deciding to use the newly ESIA approved Corani as
some sort of leverage or its future as a bargaining chip. This clear message of "if you
want Corani to go ahead, give us SA back" makes sense on first pass, but it means
they're raising risk for the de-risked project. This strategy could easily blow up in the
company's face and in several ways. It's not as if BCM has been inactive with its efforts
to get back SA either (there are the legal bills to show that, aside from the off-record
stuff I've heard from Peru's Mining Ministry (MEM) over the last 18 months or so). As of
last week they upped the ante on the Santa Ana recovery and have decided to raise
the risk profile at the wrong time.
The bottom point is that the strategic decision taken by Swarthout says to me (and in a
crystal clear manner) that he doesn't understand the Aymara position at all. That's
worrying, particularly when considering how long he's been working Puno region.
So what happens when 1) the State unfreezes BCM’s ownership rights at Santa Ana then 2)
BCM says (as it’s already said) that without Santa Ana developing first, Corani doesn’t happen
then 3) the Aymara people around Santa Ana do another full scale uprising to stop Santa Ana
from going ahead (because you can bet the farm on that one)? And now, if you’ll excuse me,
I’ll leave BCM to others because I’m way past sponsoring companies whose idea of community
relations strategies is the equivalent of poking large sticks into hornets’ nests.
The Bellhaven Copper & Gold (BHV.v) PEA, slight return
Ostensibly at least, BHV had its knuckles rapped by the BCSC last week when on Wednesday
(14) it was obliged to publish an NR that retracted some of the language used in the recent PEA
announcement. As the NR points out, according to 43-101 you can’t say things like, "The PEA
concludes the Project is financially robust", "one of the lowest cost gold development projects in
the Americas" and the results are "highly encouraging, demonstrating the economic robustness
of the existing resource", that’s what BHV did, naughty naughty and apart from a couple of very
minor details, that’s the story.
I think BHV put that language into its original NR deliberately, knew that it was sailing close to
21

the wind and with the consideration that the beaks might get them to retract it. That’s because
the BCSC might be getting stricter about getting companies to abide by disclosure rules. But as
we discussed a couple of weeks ago in IKN229 with BHV as our case in point, it’s also becoming
evident that there are cracks appearing in the whole 43-101 system so on the one side you
have the way in which 43-101 is being gamed by the scammy end of the sector, while on the
other we have companies that are getting no sort of traction whatsoever from the PEA stage of
the 43-101 system, in part because of a whole bunch of stupid rules that tie their collective
hands behind their backs. That and one other point; the BCSC rules (and the people who are
applying them) have lost the confidence of both companies (i.e. the decent ones) and the
market (i.e. you and me, the sector sponsors) so why not just ignore their stupid rulebook,
because even when they get you to retract nobody’s going to look on your company as any
worse, as long as it’s just the silly rules broken and not the stuff that really matters, like
numerical deceptions, audit issues or plain scammy or fraudulent activity (see LSL.to on Friday
evening (15) for a topical example).
So what would you do if you were running a small market cap junior exploreco, you’d put
together what you consider to be a very decent PEA that points to an economic mine further
down the line, you want to get the most market radar you can, but you’ve seen how instantly
forgettable PEAs have become to the market and you know you’re restricted as to what you can
rightfully say in your promo literature by a regulatory body that’s worried to death about
pettifogging details but refuses to address the big picture and how its own system is failing
everybody. Well you know what? If that were me I’d say fuck it, let’s tell people that this is a
decent PEA and promote it using “the wrong language” and if the BCSC tells us to retract later,
we’ll do just that and get double the
amount of radar on our decent PEA.
I agree that it’s the job of the regulatory
bodies in this world to make sure the
laws are upheld but in the course of
history has shown, in a crystal clear
manner, that when the law’s an ass
right-thinking people prefer justice over
statute. After watching dozens of bullshit
companies get away with murder, then
watching as the decent companies who
are trying to do the right thing by one
and all get hamstrung by a thousand
stupid rules which they must follow else
be castigated by people who’d do a much better job if they considered just why they’re being
held in contempt by the very companies that they should be helping to move forward, it gets to
the point when you root for the guys that are forced to retract for no reason at all and reject
the very existence of the rulebook they’re forced to follow.
Bottom line: More power to BHV for gaming a bad system in a good way. The rulebook is not
helping anybody and when that’s the case, it’s the rules that have to get better, not the
companies operating under them.
Top Pick Minera IRL (IRL.to) (MIRL.L) catches a bid
And it catches a serious bid, in more ways than one.
22

Let’s get the obvious out the way first: I’m glad to have made a hoo-hah about adding to
TopPick Minera IRL (MIRL.L) (IRL.to) for a final time in IKN230, glad I made the distinction
between just about every other trade recently and the long-term value, “serious” investment
proposition that is IRL.to in my opinion, glad I got in just before Friday’s events and I’m even
glad that I clearly stated that the cost average target was to get it down to 35c because now I
don’t have to justify the lowered average to anyone. But most of all, I’m glad to have been
dealt a large slice of luck. Luck is a part of this game after all, so when a slice of good luck
comes your way recognize it for what it is, incorporate it, then move on*.
Right, that’s out the way, so less about fathead me and more about LionGold and IRL. I’ve
been doing my first ever DD on the potential buyer of Minera IRL, LionGold Corp in the last 72
hours so I’m as new to this story as most of you. What we have is a Singapore listed stock
that’s risen out of nowhere in the last year and a half and has all the hallmarks of having been
put together by Asian financial backers to grow via pure business deals and merger and
acquisitions in the gold sector. It’s already done several deals with other gold producers and
exploration stage companies and now has interests in no less than nine gold stories in Australia,
Ghana, Bolivia and most recently (16) Nova Scotia Canada, via its just-closed purchase of the
small exploreco Arcadian Mining (ADA.v).
Next, structure: LionGold Corp has 921.9m shares outstanding but before we put a market cap
on the company I want to show you its 12 month price chart:
23

This alone gives pause for thought. While all around the world gold names we’re being taken to
the woodshed, LionGold remained like a rock at-or-around SG$1.1 (U$0.88 at today’s exchange
rate) until suddenly in August, it shot as high as SG$1.7 (U$1.36). Then last week, on the last
day it traded before being halted by the Singapore exchange it dropped like a stone to
SG$0.875 (U$0.70), at which point trading in the stock was halted and explanations were
demanded of the company by the exchange. We’ll come back to this part of the story in a
moment, but before going any further let’s set a market cap on our predatory company.
• If assumed at the recent near-high of SG$1.7(U$1.36), its market cap is U$1.25Bn
• If assumed at the 2013 steady state of SG$1.1 (U$0.88), its market cap is U$1.01Bn
• If assumed at the last trade price of SG$0.875 (U$0.70) after its massive 42% waterfall
drop and before the halt its market cap is U$645m.
After considering that LionGold has just been born out of nowhere and since then has been
trading very strangely, as well as the way in which it’s still losing money on its operations and in
capital expenditure/investment mode, I personally believe that U$645m is way more than
enough for this company’s market cap and it’s probably worth a whole lot less. However as at
June 30th it did have a working capital position of U$67.4m and that’s real asset worth, so I’m
the first to say that it’s a highly valued vehicle considering its current stage of development
(that’s putting it nicely) but it’s not some Ponzi scheme vehicle, either. Admittedly, perhaps only
$18m of that was in fully liquid treasury cash and after the ~$7m acquisition of ADA.v they’ll be
left with less, but this LionGold dos have those “big backer” hallmarks about it and I think it fair
to say that it is probably good for a cash bid here.
Which brings us to the saga of LionGold and Minera IRL last week, which has strange things in
itself. First up, we note the big drop in the share price of LionGold last week, at which point the
Singapore Stock Exchange halted trading and asked for explanations from the company. Those
were forthcoming, but the statement published by LionGold (17) was rather bizarre, to my eyes
at least. It stated that it was looking to purchase a gold mining company, it withheld the name
but then offered up breadcrumbs to help ID the target stock (which we now know is IRL):
• The target is listed on three stock exchanges
• The target is a gold mining company with one producing mine and other mines under
development
• It was introduced to LionGold by Jennings Capital of Canada
So as well as the Jennings connection (IRL is covered by that house and Jennings has
previously been part of two placements for IRL) the other facts fit IRL well. As does the size of
the company and other things as well, as mentioned in my blog post of Friday morning (18).
Now, I will admit that the post may have accelerated slightly the pointing of fingers towards
Minera IRL, but to be honest, anyone who read that LionGold NR or the Reuters report that
came from it and had more than a passing idea of the structure and background of IRL would
have worked that one out. Maybe, just maybe the blog helped spread the idea a little faster,
but that’s all. The market would have cottoned onto the ID of our “mystery” company via those
clues left by LionGold and that begs the question: Why? Why should the acquiring company,
the one that normally would most benefit from keeping things quiet and not seeing share prices
start to pop on M&A spec rumours, be so darned obvious with its information and do what it did
in the NR? I don’t understand it and when that’s the case, a red flag is raised. Perhaps the
company CEO who signed off on the NR (one Nicholas Ng Yick Hing) is a bit naive. Perhaps he
has bigger fish to fry with stemming the collapse of his overvalued share price and wanted to
show how smart he’d been by getting advanced with IRL? Either way, or any other way that’s
come to mind since then, it doesn’t add up well.
And also, we have to note that thanks to Minera IRL having its main listing on the London Stock
Exchange (via AIM) we the shareholder get a lot more protection from BS M&A rumours and
hearsay than anyone ever gets on the Canadian boards. The AIM/LSE rules are good to us,
24

because once there’s “unusual activity” in a stock, the exchange will ask the company what’s
going on, at which point we get disclosure. In this case AIM/LSE was on the ball and asked IRL
about the speculation growing around it and LionGold. IRL then confirmed it was in talks and
now we, the little guy, know what’s been going on (and we also get all the fun of a rising share
price, which again is to the detriment of the potential buyer trying to eke out a big bargain and
to the benefit of us). And one final thing we benefit form is the LSE so called “put-up-or-shut-
up” rules on acquisitions, because now its known that IRL is in play, LionGold has 5 calendar
weeks in which to make a formal offer for the company, else it is obliged to walk away.
By the way, LionGold’s reply the the Singapore Stock Exchange satisfied the regulators and as
of tonight it is back trading, but in a restricted manner (19) (eg no short selling allowed and all
deals cash traded at moment).
What else do we know? Well, from the LionGold NR we know that its plan is to make a cash bid
for IRL that would be paid in two tranches. And from the IRL NR (20), required by IIROC in
Canada in order to un-halt the stock, LionGold is also interested in making a $10m equity
purchase of IRL stock via a placement (which theoretically would satisfy the “first tranche”
idea). So if this deal isn’t hot air and is a real thing (and let’s face it, after nine quick deals in
succession LionGold clearly isn’t messing around with fakey chat just to get somebody to pay
their executive lunches) what we’ll probably see is first IRL running a non-brokered placement
to happily accept the LionGold $10m at an agreed price for the stock and then it will be up to
LionGold to make a formal cash offer for IRL in the time limit required by the LSE.
From the point of view of the retail shareholder, the main instruction is DO NOT SELL YOUR
STOCK. There are many ways in which this story could play out and I’d agree that one of them
is LionGold deciding not to make its formal bid, walking away and seeing IRL’s share price
decline. However:
• Chances are a bid will be forthcoming
• If an offer is made, IRL under no obligation to accept it if considered too low
• IRL is now in play and if the M&A situation becomes hostile, it will be even more in play
• The basic fact the LionGold has expressed an interest in IRL means that a bigger
company thinks that a smaller company is cheap. In this case I 100% agree with the
bigger company (and have a whole bunch of shares in my portfolio to prove it).
• It also means that IRL will attract attention. Radar is good for undervalued stocks.
That and more besides. Personally I’m full on my IRL position and will not buy any more.
However, I’d say that there’s very good reason to buy at-or-around this new current price if you
are still on the sidelines (or want more) because the risk/reward from here looks good indeed.
In fact, if LionGold walks away from the main offer, it’s now highly unlikely that IRL will drop
back down to the 25c level seen previously; the market, like nature, abhors a vacuum.
The bottom line is that there’s still a long way to go in this IRL/LionGold process and there’s
nothing set in stone. The ball is now in the court of the bigger company, thanks mainly to the
protection that the LSE/AIM market affords shareholders of companies listed there (food for
thought, Canadian mining retail players), and because there are certain strange things about
LionGold (not least its strange-acting share price and highly aggressive dealmaking since early
last year) it’s not as if Newmont were wading in here with a cash offer for IRL. But despite all
that, last week’s developments in IRL could hardly have been more positive and all holders of
the stock are strongly advised to hold. Meanwhile, those not yet long IRL shouldn’t think
they’ve missed the boat here, as your author’s fundies analysis makes a solid case for a 50c
share price under $1,300/oz gold for Minera IRL. Top Pick reiterated.
*If bad luck comes your way, do not whinge. For useful information and instructions on the
subject, you’d do well to heed the sound advice offered by Chopper Reid (21).
25

Conclusion
IKN231 is done, we end with some bullet points:
• Adding to Minera IRL (IRL.to) (MIRL.L) last week worked. I’ll take my luck where I find
it, thanks.
• Next week sees you author move the portfolio to a more bullish stance, one that’s
slated to run between now and November. MVG gets closed next week, RIO.to gets
added to next week (for the macro reasons and for its own circumstances, which are
compelling at this squashed down price) and GORO and AQM may go too, either this
week or next, depending on how things run. Gold to $1.4k is the objective.
• Nevada Copper (NCU.to) is going nowhere, with or without the missing permits from
the US Congress. Get used to the idea, even if you read the bullish tosh that came out
of Dundee Sec on NCU after the feas announcement last week.
The top long-term picks are Rio Alto Mining (RIO.to) and Minera IRL (IRL.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) https://twitter.com/justinwolfers/status/386175134312452096/photo/1
(2) http://macroblog.typepad.com/macroblog/2013/10/why-no-taper-one-mans-view.html
(3) http://www.canadianinsider.com/node/7?menu_tickersearch=MAG+%7C+MAG+Silver
(4) http://www.rioaltomining.com/news/2013/index.php?&content_id=174
(5) http://finance.yahoo.com/news/focus-arranges-1-2m-private-155525024.html
(6) http://incakolanews.blogspot.com/2013/10/home-on-copper.html
(7) http://finance.yahoo.com/news/nevada-copper-announces-positive-open-200000372.html
(8) http://www.hotchili.net.au/investors/announcements/
(9) http://www.rumbominero.com/produccion-de-oro-en-agosto-de-2013-crecio-127/
(10) http://noticias.terra.com.co/internacional/latinoamerica/china-minmetals-presenta-oferta-por-mina-las-bambas-en-
peru,0129653da8f71410VgnCLD2000000ec6eb0aRCRD.html
(11) http://gestion.pe/empresas/empresas-peruanas-ya-empiezan-utilizar-yuanes-transacciones-comercio-exterior-
2077845
(12) http://www.pachamamaradio.org/04-10-2013/gobierno-busca-acuerdo-en-proyecto-santa-ana-pese-a-oposicion-
aymara-en-puno.html
(13) http://noticiasser.pe/02/10/2013/puno/congresista-yonhy-lescano-critica-minera-bear-creek
(14) http://finance.yahoo.com/news/bellhaven-clarifies-disclosure-163656188.html
(15) http://www.incakolanews.blogspot.com/2013/10/round-seven-friday-night-bury-that-news.html
26

(16) http://www.newswire.ca/en/story/1236179/shareholders-of-acadian-mining-corporation-approve-plan-of-
arrangement-with-liongold-corp-ltd
(17)
http://liongoldcorp.listedcompany.com/newsroom/20131004_164942_A78_0D3203C038402B9048257BFA003021B9.1.
pdf
(18) http://incakolanews.blogspot.com/2013/10/best-guess-minera-irl-irlto-mirll.html
(19) http://www.miningbusiness.net/content/liongold-shares-back-restricted-trading
(20) http://finance.yahoo.com/news/minera-irl-ltd-statement-possible-153400735.html
(21) www.youtube.com/watch?v=1EY7lYRneHc
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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