IKN #232Premium

The IKN Weekly
Week 232, October 13th 2013
Contents
This Week: Canada Thanksgiving Day, Still Bullish.
Fundamental Analysis: Idea: Fortuna Silver (FVI.to) (FSM) buys Santacruz Silver (SCZ.v).
Stocks to Follow: Overview, MAG Silver (MVG) (MAG.to), Gold Resource Corp (GORO), Rio
Alto Mining (RIO.to) (RIOM), AQM Copper (AQM.v), Eco Oro (EOM.to), B2Gold (BTO.to) (BTG),
Starcore Intl (SAM.to), Lara Exploration (LRA.v), Tahoe Resources (THO.to) (TAHO).
Copper Basket: Overview, Lumina (LCC.v), Nevada (NCU.to), NovaCopper (NCQ.to).
The Lottery Ticket Basket: Overview, Bellhaven (BHV.v), Netco (NEI.v), Fancamp (FNC.v).
Regional Politics: Brazil: Coomigasp leadership to be investigated for fraud, El Salvador: The
OceanaGold (OGC.to) move to buy Pacific Rim (PMU.to) and the new law bill to make the
country’s anti-mining position official, Guatemala: Environment Minister under fire for
potentially corrupt practices, Argentina: The health of José Luis Gioja governor of San Juan
province and how it relates to mining in the region, Mexico Canada tax politics, Argentina:
Mendoza’s restrictive mining law challenged by miners.
Market Watching: Rio Alto Mining (RIO.to) (RIOM): No good deed goes unpunished, Pretium
Resources (PVG) (PVG.to): Bullet dodged, Santa Barbara Resources (SBL.v) primes the market,
Minera IRL (MIRL.L) (IRL.to): LionGold folds quickly.
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
Canada Thanksgiving Day
Enjoy your work-free, exchange-closed Monday
up there.
Still Bullish
Here follows the disjointed rant of the week. The
most interesting price move of the week, as far
as I’m concerned at least, came early on Friday
morning when somebody pushed some button
somewhere and dumped 2m oz of gold (well, not
literally, it was an electronic trade) onto the
market and this 5min chart (right) shows what
that did to the price of the metal. The move got
the goldbug faithful spitting their usual bunch of
feathers and looking around for somebody to
blame, for anybody to blame, which is par for the
course but it got me thinking in slightly different
terms to the fist-shakers.
Firstly yes it was a big trade for the size of the
market in question (let’s round it to U$2.5Bn in the space of a minute or so) but despite its
1

relative market glamour and headline-making appeal, the gold desk isn’t that big compared to
the REALLY big markets, such as US bonds or EUR/USD forex. It’s all comparative of course,
because the money that runs through gold dwarfs the market which this publication dabbles in,
that of junior mining companies, but if we’re considering gold as a monetary asset or currency
and dollar trades through the metal as a type of forex pair, it doesn’t really belong in the bigger
leagues.
Secondly, the look of that chart isn’t that bad, post-dumpage at least. Gold sold off at the open
but it kept its shape the rest of the day and even made ground back while those around it
faded and wilted (I know that because I have the stocks to prove it). It’s the moves of a metal
that isn’t expecting another big dump to happen in the days to come, it’s the moves of an issue
that has its buyers ready to step up and buy.
Later came a third thought on reading of the technical damage on gold reported by chartists.
I’ve read from several sources in the last three days that the current price level is critical and if
it doesn’t hold, we’re going to new lows for the year. Well, isn’t that just what we’re required to
worry about right now? And while on the subject by way of a slight aside, let’s also note that if
gold recovers from its current “critical level” price, the TA enthusiasts will tell us that they were
right about calling the current price as key, whereas if gold sinks further they’ll tell us they
were...errr...right about...errrr...calling the current price as...errrrrr...key. Class that under “nice
work if you can get it”.
OK, enough flippancy, let’s get to the point. Last week I said that I saw October and November
as bullish for gold, set myself a reasonably reachable $1,400/oz price target for the period and
announced adjustments to the Stocks to Follow portfolio that would move it net longer. Last
week started ok but faded badly and the result of seeing gold under $1,300/oz this weekend
does not jive with my call at all, but that doesn’t mean I’m changing a thing just a week later.
Mine is still a near-term call and it’s still about being reasonably optimistic in the weeks to
come, faced with a strange backdrop of political and economic happenings (the US political
scene first in line there). Gold is just as smart a thing to hold as it was last week and if the fear
trade begins to take off, as I believe it will still (no matter if the US lawmakers conveniently find
a solution just before a week’s break from duties shows up on the calendar or not), it’s going to
take a lot more than a single 2m oz sell order to keep gold from moving up.
It is indeed a strange market atmosphere for gold out there at the moment, one where Alice’s
Through The Looking Glass (and therefore Biiwii) come to mind. Market influences are
reversed, fear causes gold to be sold, dollar weakness gets no upside reaction from the metal,
what’s normally good for bullion’s day-to-day market price is bad. My best guess is that normal
logic has been suspended due to sentiment drivers trumping the normal rules, which suggests
traders pushing buttons on GLD have the whip hand compared to those who are buying,
shipping and holding bullion. Meanwhile, we see people who are scared of a US default buying
the dollar as safe haven and driving down prices of other issues (gold included) as a
counterparty result. It’s the concept of ever decreasing circles writ large and I can only imagine
the reaction if a big bank in Argentina issued an alert along the lines of “Argentina About To
Default! We Recommend You Buy The Argentine Peso Immediately!” and how long the author
of such an analysis would be able to keep their job, or keep out of a mental health ward.
So yes, there is a great deal of difference between near-term sentiment drivers and longer term
value drivers and although I’m no conspiracy theory spouting goldbug, but there comes a point
when the stupid has to be called out. Last week was weird and I think it was full of signals that
are getting far more attention than they deserve. Therefore I’ll stick to the plan of looking for
higher gold prices and a trading set-up that reflects that call.
2

Fundamental Analysis of Mining Stocks
Idea: Fortuna Silver (FVI.to) (FSM) buys Santacruz Silver (SCZ.v)
I wasn’t planning on writing anything in this week’s edition of ‘Fundamentals...’ but as
circumstances are beginning to turn the right way and as there’s time, space and will to lay out
my thoughts in a non-numerical way and set the scene for a potential future time, I’m going to
take advantage.
I’ve had this idea floating around my head since August 31st this year. The day before on
August 30th I wrote a post on the blog (1) criticizing Santacruz Silver (SCZ.v) for the contents of
its 2q13 earnings NR and the way in which it had previously called its Rosario mine in
commercial production, only to withdraw the idea when it was time to report its earnings. That
post got quite a bit of feedback (some agreed, some didn’t) and because of that and
particularly a couple of specific comments I decided to take a better look and revisit its
numbers, the first time that year.
I’m not going deeply into the company today as this is more a scene-setting think-piece than
seriously deep number-crunching, but a brief SCZ overview is required at this point. The original
business plan for SCZ was to put its first mine, Rosario, into production quickly and cheaply and
then from the cash flow thrown off move to develop its second mine called San Felipe
(production slated for 4q14) and then eventually its third asset, Gavilanes further down the line
(2016). All mines are located in Mexico. The plan was all well and good until first Rosario ran
into ramping problems that set back the timeline and then the prices of silver and other metals
dropped to where this small mine project which relies heavily on base metals credits would be
economically marginal at best (a pleasant way of saying it would be loss-making until fully
ramped, and then we’ll see how luck at market treats the company). The glitches suffered by
SCZ at Rosario has thrown the company plans into the trash can, because without the decent
metals prices to support its expansion plans San Felipe and then Gavilanes won’t have the type
of financial backing needed to put them into production and indeed, we’re already seeing SCZ’s
“revised strategy” including “concentration on Rosario” and then “development of the San
Felipe project towards a construction decision in late 2014” which means a one year delay is
already in and there’ll be more of that to come if things don’t pick up price-wise.
When it comes down to it, none of the three assets are particularly sparkling but together as a
package, especially if the whole thing could be self-funded by cash flow form high metals
prices, the business plan at least worked in theory (though I was never enamoured of it the
way Canaccord was, with its incessant
pumping of the story in 2012 providing
plenty of proof). The other thing about the
three mines is their dependence on credit
metals, particularly zinc (along with lead
and gold) to make up the project
economics. As a global average about half
the revenues would come from silver and
the other half from the credit metals, which
is the type of metals mix that immediately
puts off potential buyers of the company
such as First Majestic (proud as they are of
their high percentage of revenues from
pure silver). But not necessarily a company
like Fortuna Silver, which has always done
well from non-silver production. Caylloma’s
zinc and lead production, and San José’s gold production are a vital part of the company’s
financial well-being and they know how to go about mining the type of polymetallics SCZ has at
its assets. Also, we’ve known for a long time that FVI is keen on finding a target for growth via
M&A and the location of SCZ, in a country where it does business and is comfortable, would suit
it nicely.
3

The problem with SCZ has always been its price, because with 91.3m shares out it was valued
at over $200m at the beginning of the year, even before it had started production, and much
higher than that in 2012 when the brokerage pump was in full swing. But because of its
operational and cash flow troubles, that price is now down and we now have SCZ at around
$100m market cap.
That’s becoming a more accessible price for a deal, I think. Not yet a true bargain and a
company like FVI will see that in today’s market, unless SCZ starts turning a profit it won’t be
able to move forward on its growth plans, stagnate and see its share price continue to drift
lower. But as this next chart shows, the ratio of the share price of FVI and SCZ has moved from
the 2X range to the 3X or 3.3X range in the last four months or so, which indicates that FVI
could put together an all share deal at a less dilutive ratio, then could put its own money to
work on developing the SCZ assets (FVI has around $48m in cash and an untapped line of
credit for $40m, more than enough to get the first two of the projects up, running and FCF+)
Share price ratio of Fortuna Silver (FVI.to) to
Santacruz Silver (SCZ.v), 2013
4
3.5
3
2.5
2
1.5
1
0.5
0
4
2
naJ
8
naJ
41
naJ
81
naJ
42
naJ
03
naJ
50-bef 11-bef 51-bef 22-bef 82-bef 60-ram 21-ram 81-ram 22-ram 82-ram 4
rpA
01
rpA
61
rpA
22
rpA
62
rpA
10-yam 70-yam 31-yam 71-yam 42-yam 03-yam 50-nuj 11-nuj 71-nuj 12-nuj 72-nuj 40-luj 01-luj 61-luj 22-luj 62-luj 1
guA
8
guA
41
guA
02
guA
62
guA
03
guA
60-pes 21-pes 81-pes 42-pes 03-pes 40-tco 01-tco
FVI/SCZ
source: TSX, IKN calcs
Share proces of Fortuna Silver (FVI.to) and
Santacruz Silver (SCZ.v), 2013
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2
naJ
41
naJ
42
naJ
50-bef 51-bef 82-bef 21-ram 22-ram 4
rpA
61
rpA
62
rpA
70-yam 71-yam 03-yam 11-nuj 12-nuj 40-luj 61-luj 62-luj 8
guA
02
guA
03
guA
21-pes 42-pes 40-tco
CAD$
FVI
SCZ
source: TSX
So to get to the point here’s the argument in bullet form:
• SCZ has the assets, not the cash. FVI has the cash, not the assets. That makes for a
good pairing in theory, whatever else fits or doesn’t fit with a potential deal.
• SCZ’s management team has shown itself, via problems in the Rosario ramp-up stage

and then declaration-then-retraction of commercial production status, to be lacking.
FVI’s management team is top class and would be in a better position to lick the mines
into shape.
• SCZ stock is getting cheaper compared to FVI stock. At some point it FVI could look to
an all-share deal that would bring SCZ into the company and give it the type of growth
projects it’s been looking for.
• SCZ’s assets have a large percentage of zinc, and lead base metals credits in their
metals and revenues mix. That might put off a lot of potential buyers, but it fits FVI
better than most and is less of a put off for FVI.
• FVI is on record as being on the lookout for an M&A deal to grow its size and
production levels. With SCZ now getting cheaper and with the type of near-term
production capacity, it fits the FVI corporate plans.
• FVI will like the political risk profile of working in Mexico, a place where it now operates
successfully.
As for potential objections to any deal:
• Negative one is that FVI has a conservative corporate mentality and isn’t prone to
excessive risk-taking. It may feel that committing its cash treasury to new projects in
the current market is too risky.
• Negative two is that silver prices may not sustain the economics at the SCZ assets
sufficiently. For what it’s worth, in my own opinion and after playing with the models
for the mines for a while, the Rosario mine may be economically marginal (though in
turn may benefit from the type of better management that FVI would bring to it), but
San Felipe looks straightforward and economically robust even at current metals prices.
• Negative three may be that FVI simply doesn’t want to expand via deals any longer.
There has been a change in its message recently and although it still says it wants to
do M&A, future growth plans are now set at 5.4m oz Ag instead of the higher targets of
7m oz Ag and above the company used to entertain.
• Negative four is that the SCZ share price may not drop to a level where it’s considered
cheap enough. I’ve held off from mentioning SCZ in the last few weeks because at
$1.30 and above it’s been clearly expensive for what it is, but the recent extended drop
has seen it approach $1 and if it goes lower than that psychological level while showing
no signs of being able to turn a profit and stick to its original plan, then a deal might be
in the offing.
The conclusion to this piece is simple enough. This idea has been floating round my head for a
while and as far as my financial modelling of the SCZ assets goes (not featured today, may
happen if I get more serious about the prospects) the economics of the SCZ assets would work
and the mines would fit the way in which FVI goes about its business too. The continued
relative weakness of SCZ shares to FVI share also points to a deal that would be much less
dilutive than it would have been just a few months ago and if that trend continues, FVI may
eventually see SCZ as a bargain to be picked up. However, today’s note is not a trade
recommendation today and I won’t be buying SCZ any time soon. It’s more of a writer thinking
out loud during a lull in the market cycle and offering a headsup now that SCZ is starting to
come down to a price level that could move from today’s reasonable to tomorrow’s bargain in
silver prices don’t pick up and save the corporate strategy.
Stocks to Follow
5

A difficult week with a disappointing ending, which might have been made lighter by the short
positions but I’m telling you straight people, this one hurt. Of the 14 trades open this time last
week four made gains (GORO short, TAHO short, MVG short, AQM.v) and another three
remained unchanged (EOM.to, FCV.v, NET.v). That leaves seven losers on the week (RIO.to,
IRL.to, BTO.to, LRA.v, RIO.to trading position, DAR.v) which on straight headcount doesn’t
sound too bad, but the losses registered by the Top Pick stocks hurt more than the shorts could
repair. Best wins came from MAG Silver (MVG short up 10.5%), AQM Copper (AQM.v up
10.0%) and Gold Resource Corp (GORO short up 10.0%) with the worst losers registered by
Mineral IRL (IRL.to down 23.0%) and Darwin Resources (DAR.v down 22.2%).
With the covering of the shorts in MAG Silver (MVG) and Gold Resource Corp (GORO) we now
have 12 open positions on our ‘Stocks to Follow’ list, three less than our self-imposed
maximum. They’re all in the red, which sucks.
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$1.72 -25.2% best LT value
Minera IRL IRL.to str buy C$0.35 22-jul-12 C$0.235 -32.9% top pick called at 24c
Longs
B2Gold BTO.to buy C$3.07 28-nov-12 C$2.29 -25.4% sold 1/2, rest rides. Quality
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.84 -30.4% solid biz model, LT hold
Rio Alto Mining RIO.to buy C$2.34 07-jun-13 C$1.72 -26.5% added Oct'13 avg down
Starcore Intl SAM.to buy C$0.235 08-sep-13 C$0.20 -14.9% 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
Tahoe Resources TAHO short U$13.10 08-apr-13 U$17.00 -29.8% port hedge, easy2b short
Smaller/Riskier
AQM Copper AQM.v selling C$0.31 16-oct-11 C$0.11 -64.5% 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$0.07 -30.0% 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
MAG Silver MVG oct'13 U$7.00 12-sep-13 U$5.62 19.6% near-term short
Gold Res Corp GORO oct'13 U$9.52 03-may-13 U$4.98 47.7% short tgt made, covered
2009, 2010, 2011 and 2012 closed positions in appendices below
Now for some notes on a selection of the above stocks.
6

MAG Silver (MVG) (MAG.to): Short covered. And it was covered too early, grrrr. I took the
U$5.62 offer during the week, only to see MAG drop to exactly the type of price level I was
looking for when opening the short a couple of days later which allows me a legitimate chance
to beat myself up, if only a little bit. However, a near 20% pre-commish win in just under one
calendar month is a pretty good return considering the timescale, so even though I missed the
final flourish.
Gold Resource Corp (GORO): Short covered. As planned and noted last week, the GORO
short position was covered as soon at U$5.00, which happened on Friday as a reaction to the
bad general state of the market and the news (2) that the company’s CFO had resigned “for
personal reasons” (always a favourite).
It’s been a horrible market year and that’s reflected, fully and squarely, in the results that The
IKN Weekly has to this point. I don’t want to dilute that overriding statement or shrink away
from it or my responsibility in the slightest, but I also feel the need to state for the record that
the short trades made in Gold Resource Corp this year, which are marked on two separate line
items in the closed positions above but also involve additions that made the positions, especially
the one just closed, bigger and then much bigger, have helped to cut down the overall annual
losses greatly. There are a lot of bad trades to point at on that above list, but the best trade of
the year is easy to spot; it’s this one, and in monetary terms stands head and shoulders above
even the luckily timed half sale of the big BTO trade. Ok, that’s out the way and there are two
more things left to say:
1) The position has been covered, not closed. That means it will be easy to uncover and
ride GORO short again if circumstances warrant.
2) The plan to take profits has been executed, but I’m fully aware that GORO could go
lower from here and in fact, on considering the state of its price chart there’s plenty of
reason to suppose that it continues its drag down. If it goes lower it goes lower and
somebody else can enjoy the difference in price, this time the urge to be extra greedy
and let the short ride further than the target price isn’t going to be heeded.
Rio Alto Mining (RIO.to) (RIOM): Trade position added. The idea was to add a
significant block and get the cost average down to $2.30, so the $2.34 as noted above is close
enough. We do the rest, including the 3q13 production numbers, below in ‘Market Watching’.
AQM Copper (AQM.v): Still selling. This one is still open as although I would have taken the
11c price of last week and thrown in the towel, there just wan’t enough liquidity in the stock.
I’m looking to close it out in the week to come, at some point this loss needs cauterizing.
7

Eco Oro Minerals (EOM.to): We’re now moving into the two to three week period in which
the decision on the Páramo’s future is expected (see IKN228 and the IKN229 analysis that set
out our trading buy call for more). Meanwhile, your author received a very interesting mail from
A.Person who follows the public trading companies of the California Vetas area very closely. In
that person’s words, “If you take a peek at the tape on a given day (say Thursday for one of
many examples), you will see that someone has an algorithm set on that to downtick the stock
as soon as are a market buy is placed.....to therefore continue to make it look like a market sell
when indeed it was a market buy. This same algorithm was placed on Galway Resources”. For
my own part I can vouch that taking the position I wanted took time and care (as much was
mentioned in passing in IKN230) and I thought that EOM.to was trading in what looked like a
controlled manner, so that comment hit home. The writer of that mail is also expecting a
favourable outcome for EOM.to once the Páramo boundary decision is made.
I like the way in which this near-term trade is shaping (especially as I’m now long at a
reasonable average entry price), the type of strong odds of success on a news-driven South
American political event that we like around these parts. As long as the price is right I may even
add some more, thinking about it.
B2Gold (BTO.to) (BTG): Sector leader or not, BTO got taken to the woodshed along with the
rest of them and it’s sobering to reflect that it’s now 33% down from the point where I sold half
of the position, which was less than two months ago. In fact, it’s got to the point where I’m
now kicking myself for only having sold half of it and thought myself smart to have left limited
exposure to the stock.
As for news, we probably have another week to wait before we get the 3q13 production totals
(BTO tends to come later than its peers on this count) but we do have two subject to report on
from Nicaragua. Firstly, the ongoing spat between BTO and local artisanal-type miners in the
area around the Santo Domingo mine is now at the point where the local Catholic bishop has
agreed to act as intermediary (3) and try to resolve the impasse. We understand that the road
to and from Santo Domingo is sometimes blocked, sometimes free for traffic and apart from
minor issues production continues as normal there. Secondly and more positively, the company
is now moving forward with the Pavon project in the North of the Nicaragua (bought from
Radius Gold a couple of years ago and has achieved community agreement (4) with locals
around the project, who have gone as far as to write a petition to country President Daniel
Ortega to get the project advancing. It’s not all perfect there (it never is) and there have been
reports of some opposition to the mine plan (5) but overall the 18 communities that matter
seem to be strongly supportive of the project and this is looking like the next string to BTO’s
production bow in Nicaragua.
Starcore International (SAM.to): News last Wednesday (7) from SAM was pretty good as a
market primer for the financial results to come soon, as once again it has managed to up its
P+P reserve count to over two years worth of mining, as expected. In the words of Pres/CEO
Eadie, “We continue to maintain two years of reserves while mining 300,000 tonnes per year.
We are very pleased with the deposit and the team exploring it." Fair enough and at 706kt of
~2.5 g/t gold and ~23 g/t silver there’s two and a third years there, to be slightly more
accurate. We’re also given a few economic baseline parameters for that rock, as SAM.to in its
reserves report used the following:
• total operating costs of $US70 per metric tonne,
• a gold price of US$ 1300 per ounce, and silver price of US$22 per ounce,
• metal recoveries of 87% for gold and 50% for silver,
• resultant cutoff grade of 2.0 grams per tonne gold equivalent,
• mining dilution of between 10 and 30% depending on the structure, and
• Specific Gravity of 2.6.
8

Let’s run a quick line of math on that because it gives us an idea of the typical margin SAM.to is
running at its Queretaro mine. If we assume the average grade at 2.4 g/t Au and 23 g/t then,
assume a median 20% mining dilution, then recoveries and metals prices as seen above, we
come up with this for the metal value in a tonne of SAM.to rock:
Au: ((2.4 / 20%) X 0.87 X 1300) / 31.1 = $69.82
Ag: ((23 / 20%) X 0.5 X 22) /31.1 = $6.51
And if total operating costs are $70/t as stated by the company in the NR, those baseline
metals prices leave us with just $6.33 in profit and in my books that’s not much by way of
margin. We’re expecting SAM to show good quarterly numbers when the revenues report
appears, probably the week after this (though it might surprise by showing up this week
coming). However, be clear that this one is a near-term trade and not something we’re going to
hang onto through thick and thin.
Lara Exploration (LRA.v): Monday saw news from LRA (8), the first official bulletin from the
company since July. It was about the prospective looking Liberdade copper project in Brazil,
currently under JV with Chile’s massive Codelco, and main news was the set of 13 drill holes
reported by Codelco. The overall takeaway is that of “geologically interesting” without scoring
the type of eye-catching hole that moves a stock and the summary from LRA Chair/CEI Miles
Thompson catches the essence well enough:
“While progress at Liberdade is slower than we'd like due to the current regulatory
challenges in Brazil, these new drill results have significantly extended the known
mineralization at Fortuna and we remain very optimistic about the potential of this
project.”
Further down the NR we read that although there’s no guarantee, LRA has received enough
hints from Codelco to suggest that the big company plans to move to the second phase of its
earn-in agreement which means they must like what they’ve seen so far to a certain extent.
The plan is to be able to define a big enough deposit to interest the world’s single biggest
copper producing company,
Tahoe Resources (TAHO) (THO.to): As you know I’m short on this trade it’s not about
trying to preach to any choirs or trying to overstate the case. But I think it fair to point out that
the last official words we had from the company regarding start-up were that concentrates
would begin to be produced in late 3q13. For example, here’s what CEO McArthur said at the
2q13 confcall (9):
“As you know, we are very well financed, the project's fully permitted, early commissioning at the
mill has now started. We expect to be producing initial concentrates in late 3Q as wet
commissioning begins and expect to be in full production at the 3,500-tonne-per-day rate in early
2014, just like we laid out in the plan all the way back in 2010.”
It’s now mid-October and although we do have a Youtube video of what’s billed as initial conc
production October 2013 (10) (I’d guess about 100kg gets piled up before our eyes) we still
have no official word on ramping-stage production at Escobal. Maybe that will happen this week
coming.
The Copper Basket
After forty-one weeks of 2013 The Copper Basket is showing a 24.41% loss to level stakes.
9

company ticker price 1/1/13 Shares out Market Cap current pps gain/loss%
1 NGEx Resources NGQ.to 3.40 168.66 295.16 1.75 -48.5%
2 Augusta Res AZC.to 2.43 144.35 281.48 1.95 -19.8%
3 Lumina Copper LCC.v 9.43 43.61 234.19 5.37 -43.1%
4 Copper Fox CUU.v 0.83 402.96 209.54 0.52 -37.3%
5 Reservoir Min. RMC.v 2.41 41.68 188.39 4.52 87.6%
6 Nevada Copper NCU.to 3.50 80.5 165.03 2.05 -41.4%
7 Hot Chili Ltd HCH.ax 0.72 297.46 127.91 0.43 -40.3%
8 NovaCopper NCQ.to 1.80 53.02 92.25 1.74 -3.3%
9 Panoro Minerals PML.v 0.62 204.71 75.74 0.37 -40.3%
10 Western Copper WRN.to 1.39 93.68 65.58 0.700 -49.6%
11 Curis Resources CUV.to 0.70 63.13 37.88 0.60 -14.3%
12 Candente Copper DNT.to 0.375 122.05 29.29 0.24 36.0%
13 Oracle Mining OMN.to 0.80 49.03 18.63 0.380 -52.5%
14 Yellowhead Min. YMI.to 0.59 63.45 11.42 0.18 -69.5%
15 Strait Minerals SRD.v 0.08 57.26 4.29 0.075 -6.3%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg -24.41%
The Copper Basket had five stocks up
Copper Basket 2013 average, weekly
(NGQ.to, HCH.ax, PML.v, OMN.to, CUV.to)
12%
and ten stocks down (LCC.v, AZC.to, 8%
CUU.v, NCU.to, WRN.to, NCQ.to, RMC.v, 4%
0%
DNT.to, YMI.to, SRD.v) on the week. The
-4%
bigger percentage-terms moves were all -8%
to the downside, led by Yellowhead Mining -12%
-16%
(YMI.to down 20.0%) and followed by
-20%
Lumina Copper (LCC.v down 14.6%) and -24%
NovaCopper (NCQ.to down 11.7%). -28%
-32%
Overall, the basket lost 3.69% to click
back to the worst average number since
mid-August. Also, we note that there is
now just one blob of green left on the
above list, that of the sector-winning Reservoir
(RMC.v) (a.k.a. my biggest mistake of 2013).
The juniors fared worse than their underlying metal,
too. The five day chart for our preferred tracker,
the earliest dated futures contract (currently
December 2013) shows that Cu had its up and its
down but settled the week basically unchanged. Or
in other words it did a darned sight better than
gold, too.
As for those tricky inventories, the week just gone
saw the overall world stocks number drop by 1.0%
to 697,893mt, but there was a change in the split of
stocks. LME warehouses dropped by 3.2% to
509,325mt and the small numbers held by Comex
also dropped, by 2.6% to 28,983mt. However
Shanghai Futures Exchange warehouses saw a big
jump in inventories, up 7.0% to stand at
161,585mt. That’s a change to the trend of the summer and if confirmed by next week’s action
may indicate a shift in the copper price dynamic. As it’s also coming at a time when the LME is
wrestling with its now well-documented warehouse gaming (mainly by the big financial
institutions and conc players such as Glencore, Goldman, Trafigura, JP Morgan) and trying to
10
ht6naj ht02 r3bef ht71 dr3ram ht71 ts13 ht41 ht82 ht21 ht62 ht9 dr32 ht7luj ts12 ht4gua ht81 ts1pes ht51 ht92 ht31
source: IKN calcs, TSX data
31/1/1
morf
egnahc
%

come up with new rules that will calm the anger of end users (who say they’re paying too much
for their metal) the shift in stock numbers may be worth following, after all.
As for our ongoing coverage of cancelled warrant numbers, they stood at 51.5% of LME
inventories, or 262,400mt, and are notching up again.
Cancelled Warrants at LME, IKN157 to date
60%
50%
40%
30%
20%
10%
0%
11
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
Now for updates on some of our covered stocks
Lumina Copper (LCC.v): Last week up, this week down, but the same “avoid this story” reco
as we’ve had for the last couple of years. If you like gambling with your money then that’s fine
by me, but the other reco that goes with betting on strange movements is that it’s best to go to
a casino, because they serve you free drinks and food while you play. Avoid LCC.
Nevada Copper (NCU.to): The 1-handle mooted last week after the poor looking feas study
for its U/G project at Pumpkin hollow didn’t show up last week (lowest mark was $2.03) but the
subdued nature of the trading tells me we won’t have to wait that long, unless of course the
company gets lucky and copper spot price zooms forward in the very near future.
NovaCopper (NCQ.to). Two pieces of news from NCQ last week. First up Monday (11) we
had drill results from its “Bornite” target, part of the larger UKMP (aka Ambler) project way up
there where it’s cold. The main thing that jumps out about the drill numbers are that the grades
are fine but that rock is a long way downhole, so the Bornite structure is never going to be the
deposit that makes or breaks a construction decision so for the moment I’m neutral on what
we’ve seen from this part of UKMP/Ambler.
Then on Wednesday we got the company’s 3q13 financials (12), which held no big surprises.
The most important number of the lot, particularly in this market, was the cash treasury
number of $9.4m as at August 31st which means that NCQ has enough to see it through to the
end of this year but not much further, so the market is beginning to look for the next round of
financing from the company (which could explain the small sell-off of last week). NCQ, being
the NovaGold spin-off that it is, has decent and moneyed NY backers (Electrum, Paulson etc) so
the actual raising of new funds shouldn’t be as big as issue for NovaCopper as it is for many
other cash-starved juniors out there at the moment. At what price the financing is done is a
more interesting question.
As for trading last week, we’ve already noted the sell-off which has put NCQ in negative
territory for 2013. However, we should also recognize that volumes were just as light as they’ve
always been and as such, the stock could ping back easily enough if somebody suddenly
decides that they like the company’s chances.

The Lottery Ticket Basket
After 41 weeks of 2013 The Lottery Ticket Basket is showing a 36.52% 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 47.60 0.070 -30.0%
2 Eagle Star Min. EGE.v 0.125 79.13 15.03 0.190 52.0%
3 Bellhaven BHV.v 0.14 136.81 8.21 0.060 -57.1%
4 AQM Copper AQM.v 0.08 105.57 11.61 0.110 37.5%
5 Fancamp Expl. FNC.v 0.125 177 11.51 0.065 -48.0%
6 Tango Gold TGV.v 0.13 76.24 5.34 0.070 -46.2%
7 Copper North COL.v 0.10 58.7 2.94 0.050 -50.0%
8 Inca One Res. IO.v 0.12 34.0 2.89 0.085 -29.2%
9 Agave Silver AGV.v.v 0.30 21.55 2.05 0.095 -68.3%
10 Netco Silver NEI.v 0.075 9.4 2.35 0.250 100.0%
11 Gryphon Gold GGN.to 0.085 194.64 1.95 0.010 -88.2%
12 Darwin Resources DAR.v 0.20 26.16 1.83 0.070 -65.0%
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 0.37 0.010 -77.8%
Portfolio avg -36.52%
Last week the minnows registered four
25% Lottery Ticket Basket 2013 average, weekly
winners (FNC.v, AQM.v, TGV.v, NEI.v), four 20%
unchanged names (GGN.to, GEL.v, IO.v, 15%
10%
RCZ.v) and seven losers (MLN.v, BHV.v, 5%
0%
EGE.v, COL.v, DAR.v, CMA.v, FV.v). The
-5%
biggest moves to the upside came from Netco -10%
-15%
Silver (NEI.v up 25.0%) and Fancamp (FNC.v
-20%
up 18.2%), while biggest percentage losers -25%
-30%
were Firestone (FV.v down 33.3%), Bellhaven -35%
(BHV.v down 25.0%), Darwin (DAR.v down -40%
-45%
22.2%) and Marlin (MLN.v down 22.2%). And
another week down on our failed experiment.
Bellhaven (BHV.v): You know that I like this stock more than most at the nanocap end of the
market, so it’s worth mentioning here how BHV was hit hard in percentage and market cap
terms by selling on Friday and the thing is now back to 6c, which was at-or-about the price we
bought at earlier in the year before its good
drilling results came along.
So here we are again, but this time those good
drill numbers still exist and BHV has been sold
off on macro market negativity more than
anything company-specific, so if the market
decides to get positive again (and I’m still
expecting just that) I wouldn’t bat an eyelid to
see BHV back and trading at 9c to 11c. Which
in turn is a long-winded and roundabout way of
pointing to BHV as a potential smallfry vehicle
on which you could ride gold to the upside and
make an easy 50% for your troubles if all went
well with the metal price. There are worse trade potentials out there, of that you can be sure.
12
ht6naj ht31 ht02 ht72 dr3bef ht01 ht71 ht42 r3ram 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 ht31
source: IKN Weekly data, TSX
2102/1/1
morf
egnahc
%

Netco Silver (NEI.v): The buying instigated by Steve Vestergaard (and mentioned last week)
continued this week and was joined by a couple of other insiders, too (13). It’s still rather
mysterious and unless there’s a story waiting in the wings (that oil patch deal NEI wanted to
do?) doesn’t make much sense at these prices. Your author is mildly interested, no way would
he join in on the buying though.
Fancamp Exploration (FNC.v): Some interesting insider activity in FNC recently. Whether it
means anything is unknown, because it’s just as likely to be directors wanting to average down
on their own losing positions (and at 6c a pop, your $15,000 in cash buys 250k shares and goes
a long way). But still, the purchases have been chunky and it’s interesting enough to mention
here.
I again remind readers that FNC still owns 6m shares of Argex Titanium (RGX.to), which came
out with a feas study on its Titanium Dioxide Industrial Project last week. The capex bill of
~$250m looks steep in today’s market, but the economics of the project look ok and the
returns robust. But back to FNC and those 6m shares of RGX are worth $5.58m at today’s
market prices and under its agreement, they come out of escrow (i.e. can be sold) on
November 6th. As those shares make up almost exactly 50% of today’s market cap in FNC,
that’s a date to remember for the company. Or put another way, unlike many microcaps (on
this list or not) FNC has real asset backbone to cover much of its valuation, not just stories and
hopes.
Regional politics
Brazil: Coomigasp leadership to be investigated for fraud
A judgment handed down by Judge Danilo Alves Fernandes on Friday October 11th isn’t exactly
an outright win for Colossus Minerals (CSI.to) but is clearly one that goes against the current
directorate of its JV partner Coomigasp (the worker’s cooperative of Serra Pelada) and as such
can be taken as a step forward for the majority owner company. The essence of the judgment
as reported by national newspaper Globo (14) is that Coomigasp has been deemed corrupt by
the judge and requires further criminal investigation into financial and administrative fraud. It’s
understood that the battle between factions inside Coomigasp (pro and contra the current
leadership and ostensibly at leat unconnected to CSI.to) to control Coomigasp has been
ongoing and the disputes at times very bitter so a lot of the problems point to inner politics, but
we can also deduce that from the judgment Friday the current heads of Coomigasp’s claims
against Colussus are now in legal doubt (i.e. wanting to split the project 50/50 instead of the
current 75/25). However, we should also recognize that the situation is delicate and as the
Friday judgement concedes, the way the Coomigasp cooperative is currently being run has
caused “chaos, resulting in several episodes of unrest, violence, slander, fire, invasion of
buildings, a situation that undermines economic and social peace in the region.” One simple
legal ruling against Coomigasp is no guarantee that the unrest won’t continue or even intensify.
13

We note that Coomigasp is appealing the Friday judgment, which is a natural reaction because
the current heads are unlikely to want to be investigated for corrupt practices. The president of
Coomigasp, Victor Alvarado, called the ruling “and aggression against the gold mining
community” and because all proceeds of the Coomigasp cooperatives are “locked away”, there
was no need to do an external audit.
It’s always been a tremendously complex local political situation at Serra Pelada, which has not
helped the cause of CSI.to over the long term. This Friday saw a ruling that’s against the
current leaders of Coomigasp and as they are people who want to re-negotiate the contract for
Serra Pelada (from the current 75/25 to a potential 50/50), at face value it’s a decision that’s
positive for CSI.to. However it may make Serra Pelada that much more of a tinderbox
community, so developments should be watched carefully. Also if the current heads of
Coomigasp are replaced, there’s no guarantee that new heads are friendlier towards the status
quo. We also need to recognize that local unrest isn’t exactly conducive towards maintaining
on-time/on-budget development of the mine at what is a critical period for the project.
We’re currently in a neutral-but-watching mode on CSI.to, the recent trade closed and money
on the sidelines. That still seems (by far) the smartest position to take on this company but
with that said, it’s one that we’ll watch carefully for news and on-ground developments because
the potential for a trade is there.
El Salvador: The OceanaGold (OGC.to) move to buy Pacific Rim (PMU.to) and the
new law bill to make the country’s anti-mining position official
Over the years, The IKN Weekly has made it plain that the position of El Salvador towards
metals mining projects has become very anti-mining, with opposition towards miners etc clear
in all strata of society, top down.
This position may soon become official as well, because as of last week a bill (15) was
introduced into parliament that would prohibit metals mining in the country and if passed,
would be (I believe) the first country in LatAm at least to have placed a blanket ban on the
activity at a national statute level (even Costa Rica doesn’t have a formal anti-mining law).
Which makes the move earlier this week (16) by OceanaGold (OGC.to) (OGC.ax) to buy out the
80% of Pacific Rim Mining Corp (PMU.to) that it didn’t already own (one year ago on September
25th 2012 it paid $4.2m for 42m shares (10c/share) which gave it fractions under 20% of the
company) via an all paper deal slated at a ticket price of $10.2m). Maybe it’s a case of the
company needing to double down or lose its first investment, or maybe it’s connected to the
expectations of a ruling from CIADI/ICSID about the rejection of the PMU project in El Salvador
(OGC mentioned in its NR last week that it was open to a negotiated settlement) and maybe
just maybe OGC is mad enough to think that El Salvador will allow them to build a mine there. I
don’t honestly know, but I do know that even though the deal’s small size means it’s not going
to make a material difference to OGC the company or its fate, it calls into serious question the
mentality of the people running the company and I consider it to be a clear net negative to
OGC as a potential investment (or in my case, return investment) in the future. As I look
around LatAm I can find dozens, nay hundreds of place OGC could put $10m or so of asset
value to real use, in junior mining companies with decent projects in countries that are happy to
host mining operations. Why they insist on a place like El Salvador is a total mystery, especially
in a company that has the worst of reputations amongst the locals (no matter what the
company might tell you otherwise and justified or not) and was the basic catalyst to all the ill-
will towards the mining industry in the country we see now. I’m aware that OGC took a delicate
community risk situation at Didipio and turned it around well, but this isn’t just a mine versus a
town, it’s against a whole country and a bunch of politicos from all sides who know that being
pro-mining will lose them their next elections, whatever party they are from.
As alluded to above, the only out I see for OGC in this wild bet they’re making is that they get a
favourable ruling from the CIADI/ICSID world tribunal and then El Salvador decides to honour
their loss (as the most likely nation reaction would be a flat refusal to abide by an adverse
ruling, pay compensation or allow the project to move forward, i.e. the country flicking the bird
14

to the courtroom). Apart from that scenario (and the ruling could easily go against PMU.to too)
this seems like a no-win and signal to the world that OGC still doesn’t understand what it got
itself into when it decided to make a move into C.Am last year.
Guatemala: Environment Minister under fire for potentially corrupt practices
I’ve chosen the words in that title carefully, because although there’s nothing proven yet last
week we saw an interesting investigation into Guatemala’s Minister of the Environment, Roxana
Sobenes, by the national newspaper El Periódico (17) that showed the preferential treatment
being given to Environmental Impact Studies submitted to the MARN environment ministry
(MARN) by the enviro consultancy SIGA (18), which by sheer coincidence is owned by the
Minister of the Environment herself! It also showed that since Ms Sobenes was named
Environment Minister by President Otto Pérez Molina in January 2012, her company has
doubled its business of EIA submissions to MARN and of the 24 submitted, all were approved
and on a faster track than other submissions from other Enviro Permit studios (e.g. according to
the report 11 of the 24 submissions from Ms. Sobenes’ studio were approved within 67 days,
compared to periods of up to 12 months for similar applications from other studios). Roxana
Sobenes refused to be interviewed by El Periódico or offer a statement for the report. Now
there’s a surprise.
This is the type of sordid thing that goes on in the governments of institutionally weak countries
such as Guatemala and although I want to make it absolutely clear there is no direct connection
between Sobenes’ studio and the permitting received by our current short on mining in
Guatemala, Tahoe Resources (TAHO) (THO.to), her appointment was part of the changes that
President OPM brought in to speed up the permitting process for large-scale projects in the
country. The case is now causing a mini-scandal in Guatemala and those looking for the pro-biz
stance of the current administration to continue should watch out for this, because the knock-
on effects of these ministerial corruption cases can take their tolls. For just one example, it’s by
no means beyond the realms of the possible for a suspension of all permits granted by the
government under Roxana Sobenes’ watch to be ordered by a courtroom, pending further
investigation. It’s also obvious fodder for those opposed to the large-scale projects in the
country at the moment, such as the very contentious hydro-electric power project in
Huehuetenango region that’s causing serious social unrest (as mentioned in IKN230) or the
mining project at El Tambor or Escobal, to name but two.
Argentina: The health of José Luis Gioja, governor of San Juan province, and how it
relates to mining in the region
The news has had far less coverage than the relatively straightforward surgery that President
Cristina Fernández de Kirchner underwent on Tuesday (she’s being discharged from hospital
today Sunday and will rest a couple of weeks) but it’s a bigger deal, both in event and
potentially for the sector covered by The IKN Weekly. In a nutshell (19) the staunch Cristina-
15

ally and governor of the western San Juan province, José Luis Gioja, was visiting a locality in his
province by helicopter but the landing area chosen by locals was basically a dry field and not
watered. When the helicopter arrived it threw up a large quantity of dust when the copter tried
to land, the pilot lost all visibility and moments later hit a nearby electricity cable. Gioja
reportedly jumped from the aircraft from around 14m, just before it crashed. Among other
passengers was a national congresswoman, Margarita Ferrá de Bartol, who died in the crash. At
this time regional governor Gioja has been operated on twice and is said to be in a serious
condition in intensive care, using a respirator to breather and with no forward prognosis
available. His brother says that he’s “in God’s hands” and due to the severity of his injuries, at
best he faces a long recovery to even be able to walk again.
Suffice to say, a very bad weekend for the governor but it’s also an unfortunate event that’s
being watched very closely by mining companies in the region. San Juan is one of the most
mining friendly provinces in the country and by general consensus, that’s because of the
support given to mining by governor Gioja in his time as head of the province. Those looking on
Argentina from the North also often need reminding that provinces enjoy a great deal of
autonomy from the national government in Argentina and as such, the role of provincial
governor carries a great deal of actual political power and influence, rather than being some
sort of unimportant figurehead as regional politicos can sometime be in other countries. In the
case of Gioja, his popularity and strong backing for mining in the region has been a key factor
in seeing mining develop quickly in San Juan and without him, those that would oppose mining
(at a provincial and national level) would see their biggest ideological enemy removed from the
scene (NB, please note the word ideological there, because although others may oppose his
pro-mining policies, even among the anti-miners and opposition political parties Gioja is not
hated as a person and commands considerable respect). As this report (20) in local newspaper
Tiempo de San Juan (reproduced from the Argentine mining publication “Mining Press”) makes
clear, Gioja is held in high regard by the mining industry and quotes from many of the heads of
companies working there (including words of concern and recognition of the man’s importance
to mining from Yamana Gold, Troy Resources, AngloGold Ashanti, Miner’s Union AOMA, national
pro-mining provincial council OFEMI, Pacifico Mining, Cerro Cazador, Goldrock Mining, Peregrine
Argentina, The National and local Chambers of Mining etc etc) are included. The report ends in
this way (translated):
The news spread like wildfire in San Juan, in the Peronist party ranks and and
Argentina politics. And markedly in mining too, which in the last few years has had
José Luis Goija as its main proponent in the country. A few days ago, the San Juan
mandatory celebrated his 10th anniversary in power and called to account, as is typical
at these moment, the results of his administration that started at the beginning of a
difficult time for Argentina and has reached a notable prosperity based on the impulse
that “Giojaism” baptized as “The New Mining”.
The worries of the protagonists of mining development in the country are justified. No-
one has defended the questioned industry like Gioja, to the point where he has
become the automatically preferred target of Greenpeace and anti-mining
organizations. The “Glacier Law” and other issues have often put the San Juan
regional government in tight spots, to the point where (the Argentine mining
publication) Mining Press has called the regional president “José Luis, The Lone
Ranger of Mining”.
The article then continues with local political aspects, but ends by noting that without his
support, the mines now operating at Veladero, Gualcamayo and Casposo along with dozens of
projects moving forward would not have been possible without his support.
The IKN Weekly wishes José Luis Gioja a speedy and full recovery.
UPDATE Sunday: The latest (21) from Gioja’s official facebook page is that he’s stable and
that’s taken as a good sign, as the last operation was 36 hours ago and he’s not shown any
deterioration since then.
16

Mexico, Canada, tax, politics
Mexico’s legislative proposal to add a 7.5% royalty on mining profits continues to ruffle feathers
in the mining industry, but at least one Canadian lobbyist has done the industry no favours
recently. The story starts on October 1st when one Rosalind Wilson, president of the mining
commission for the Canadian Chamber of Commerce in Mexico and a long-standing member of
the Canada-Mexico business community, address Mexico’s congress and said to its members
(22) regarding the proposed tax (translated) “Don’t make a fiscal mistake in the way way as
Canada did, that six months later had to be repealed. The message is that we investors are
strongly (sic) leaving Mexico”. The inference was clear, “pass the tax and Canadian mining
companies will leave Mexico” and it caused a whole batch of scream-type headlines about
Canada going home, Mexico’s mining industry left in the lurch, upcoming massed
unemployment etc etc.
Suffice to say that Ms Wilson had to quickly eat her words, which happened last week when she
said that although the proposed 7.5% royalty would be a negative signal, no Canadian capital
was about to leave the country if it were passed (23). But even then she couldn’t help but make
shit up when saying that Peru was becoming a more attractive option for FDI from Canada
because “it was planning to lower its taxes on copper”, which is news to me, you, the
government of Peru and anyone else remotely interested in the subject. Canada, with friends
like Ms Wilson you don’t need enemies.
Argentina: Mendoza’s mining law challenged
Meanwhile, in the anti-mining province of Mendoza, home to the troubled San Jorge copper
project owned by Coro Mining (COP.to) amongst other projects, local mining companies and
pro-mine organizations have brought to the region’s Supreme Court (rather than complaining
again to the deaf ears of its regional parliament) a motion (24) to declare unconstitutional the
province’s law, passed in 2007, that prohibits the use of specific chemicals and goods in the
mining process (such as sodium cyanide, sulphuric acid, mercury etc). According the the
Mendoza Chamber of Mining, the overturning of this law could mean U$1.215Bn in investment,
bringing revenues to the province and jobs to locals.
This case is worth following because even if the whole thing gets bogged down politically at a
later date, the case seems to have merit and if the Supreme Court rules in favour of the pro-
mine argument, shares of companies exposed to Mendoza such as COP.to would enjoy a very
decent bounce.
17

Market Watching
Rio Alto Mining (RIO.to) (RIOM): No good deed goes unpunished
What irks about the sell-off in RIO last week isn’t the way it tracked the rest of the juniors, it’s
that it did so after sticking in another strong quarter of production.
The Monday morning announcement (25) of 3q13 production and sales reaching 59,157 oz Au
was greeted with initial cheer by the market
and a move up to $1.96 (fwiw, I added all I RIO.to: Gold production and forecast for 4q13
68000
wanted to add as per IKN231 at the 70000
opening bell and was happy with my mid- 60000 55973 58081 56511 59157
80s prices...at first) but come Tuesday the 50000 48467
selling had set in once again. Friday was 40000 36355
30548
bad for all stocks and RIO was no exception 30000
to that, with a particularly poor end to the
20000
week.
10000
0
The result came in better than even I
expected last week with my 55k oz, but we
should still note that it was less than the
original 63k oz Au guided for 3q13 by RIO
at the beginning of the year and for the reasons laid out last week. However, there’s every
reason to expect 4q to come in as well as we’re currently guiding and with last week’s 59k oz in
the bag, there’s good reason to expect the 2013
annual production number to either come in at
the top end of the company’s guidance for the
year (210k oz Au) or maybe even beat it by a
little. With the latest numbers factored in, your
author is looking for a final total of 211koz Au.
As for the financial model, we’re staying with the
U$1,330/oz best guess estimate gold average for
3q13 therefore the extra 4.157 oz of gold to our
original 55k oz forecast adds around $5.5m to
the quarter revenues. Amongst other numbers,
this now puts mine operating earnings (gross
profit) at $35.2m, or 20c/share. That’s pretty
good for any mine and extremely good for a gold stock share that’s now trading at a little over
2X forward margins.
18
21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
Oz Au
source: company filings, IKN ests
$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

I really don’t know how else to say “RIO is cheap” and it’s getting a little boring to have to
repeat it week after week on lower share prices, too. For that I apologize, for the clear and
obvious conclusion about the value on offer here there are no excuses.
We should note that there was a negative in Monday’s NR however, with the company
announcing that the feasibility study for the stage 2 copper project is now shifted back a
quarter and will be published in 2q14.
In other news, I’ve finally managed to track globetrotting company Pres/CEO down to a place
and date (he was in Europe marketing last week, for example) so on October 22nd I’ll meet with
him in Lima and get more lowdown from the veritable horse’s mouth. With the meeting
scheduled for a couple of weeks’ time there’s plenty of chance to prepare, so I’ll be happy to
take any questions you might have for him, relay them, get answers and publish findings here
in the weekly. Therefore please mail me with anything you’d like to quiz Black on to the usual
address.
Pretium Resources (PVG) (PVG.to): Bullet dodged
And thus the stock I sold for a modest but welcome profit CAD$10.14 in late August closes mid-
October at CAD$4.93. I have but two things to add to the mountain of market commentary
already made about last week’s biggest junior story.
1) A lot has been said this week about the analysis of Pretium Resources (PVG) (PVG.to)
published by Brent Cook in his subscription letter ‘Exploration Insights’ on June 16th. You can
now read that in the public domain on this link (26). To cut a long story short, I read his
analysis at the time back in June and from that point Brent and I exchanged on the subject of
PVG over the course of several weeks. His hard-nosed geological expertise made for good
counterpoint to my own position at the time and was one of the influences which got me to
close my position, for which I want to publically thank him. The extended exchange at the time
was more nuanced than a simple line or three today can manage to convey and there were also
other people in the conversation (who I’d also thank in public for their different inputs if they’d
allow me) who were adding their own thoughts, but along the way what transpired was that
while still long and reasonably comfortable, I made myself a short list of potential red flags that
would signal good reason to bail on PVG if they started showing up. Those included delays to
the bulk sample and drilling programs at VOK, small apparent to the programs that did indeed
show as from August (particularly around the Cleopatra discovery) and the general shift away
from the straightforward plans the company had to dig, process and report by end 3q13 to a
world that moved towards reliance on the growing importance of specific geology matters that
are not my sphere of knowledge. To cut a long story short, yup those red flags showed up in
August and when added to the firm desire at the time to reduce portfolio length , PVG was
dumped. That’s all she wrote.
2) As for my own thoughts on the decision of Strathcona to resign from the project, I covered it
in general terms in this post (27) last week on the blog. As well as the main point of conjecture
put forward in the post, that the emphasis of the sampling of the area around the Cleopatra
vein is the likely point of contention, I’d like to add here that Strathcona is (was) the only true
third party independent on the project and that makes their involvement vitally important,
because the exit strategy for PVG has always been the most obvious of them all; sell it to a
major. Without the type of peer approval that Strathcona brings (Snowden is still on-board but
as they compiled the resource report they’re obviously conflicted) majors are not going to bite
at PVG, that besides the type of “reliable rumour” they’re bound to pick up about the exact
circumstances of the dispute between the parties.
However, the bottom line to this affair is simple enough and goes beyond the technical aspects
of the mineralization or the guessing and deductions being made about why Strathcona
resigned. The bulk sample project for VOK was originally proposed and put forward in order to
allay doubts that the market had about the potential to bulk mine VOK. That’s why it came into
being and when PVG hired Strathcona to oversee the project, it gained kudos for picking a best-
19

in-biz company to do the watching. However, with the main watch-person now gone, the
project isn’t going to allay anyone’s doubts (in fact, the doubts have now risen in number and
voice). This is the reason why PVG dumped so hard last week; the program it put together to
bring market confidence to the economic potential of its plans has done the exact opposite and
even if the eventual results of the sampling (under Snowden and PVG eyes only) come out
wonderfully, nobody holding the big chequebooks is going to believe them. And that’s the
whole bailowick right there, folks. No trust = no deal.
Santa Barbara Resources (SBL.v) primes the market
We’ve mentioned this tiny drill play twice on these pages, so another word is necessary on the
Friday news (28) from the company. We got an update on how the drilling is going and the
noises made were positive enough, with “ahead of schedule” and “below budget” among the
user-friendly phraseology. We also read about the resignation of the CFO, but in this case that’s
a minor matter (in a larger working mining company where the beancounter has a key job I
care much more about a CFO departure, especially if sudden (see GORO above) but in a tinycap
junior these things aren’t to lose sleep over). No, the reason we mention Friday’s SBL NR today
is because of this part of the NR:
“Visual inspection of the drill chips has revealed the presence of long intersections of
hydrothermal breccias, vuggy silica, massive silica and granular silica rock and
alteration types characteristic of high sulphidation epithermal gold systems.”
That’s fighting talk, ladies and gentlemen. The type of mineralization that SBL is fishing for at
Sancos isn’t the type where you get a lot of visual gold on display, it’s a type where you want to
see the right kind of rock that’s conducive to gold mineralization, then you send it off to the lab
and see what comes back. With SBL making a list of good things it’s seen from the fresh, un-
assayed core it’s now primed the market into looking out for the results that will come back
from the lab. If things go well and there’s gold in that there vuggy, SBL has the right partner to
move Sancos forward and you can bet on a fast rising share price as reward. But if the visual
priming we got last Friday doesn’t give us a resonable result from the lab, SBL isn’t going to see
its share price stay where it is today,
it’s going to drop away sharply.
Either the SBL team is confident
about what they saw from the
returned core or they’re representing
confidence. At a market cap of just
$2.4m there’s still plenty of leverage
if good numbers are forthcoming,
despite the stocks move back up to
the ~10c level. The other things
worth saying here is that the vibes
frm SBL at Sancos are that much
better than those around the
Suriloma project of Darwin
Resources (DAR.v) in the days
before the ok-nothing-great drill
numbers came from there (and which I betted upon).
I know market participants who are already long this stock and I know of plenty of others who
are watching the wires for results news without owning yet, too. I’m part of the second
category and will stay that way (though in effect I have some exposure to Sancos via my large
holding in RIO.to) but it’s a possible but on the right news, that’s becoming clear.
Minera IRL (MIRL.L) (IRL.to): LionGold folds quickly
In last week’s piece on the announced talks between IRL and LionGold, one of the issues
discussed was the valuation of LionGold and that included this line:
20

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.
That turned out not to be just true but far truer than I’d realized, as the blog commentary last
week on the sinkage in LionGold’s share price bore witness. As soon as Monday the writing was
basically on the wall for LionGold’s share price and the mini-collapse of the wk before
accelerated into what we now see on this price chart:
LionGold ended last week at SG$0.154, which means its market cap is now down to around
U$114m and even before the deal was officially called off by IRL in its NR to the London market
(6) it was plain to see which way the wind was blowing.
As for the reaction in the IRL stock price, that was worse than even I expected. This IRL.to
price chart dials back ten days to when the stock was bobbling about on low volumes around
the 24.5c level, then we see the big ramp on the news two Fridays ago and then the reaction
when it became clear to all and sundry that LionGold wasn’t in any sort of a position to buy out
a decent quality junior.
And sure enough, not only is the stock back to where it was, but its 22c (that recovered late
Friday on a couple of small trades) is worse than it was before all the LionGold shenanigans
began. I sigh deeply about that, but the feeling is probably much worse inside IRL. They’ve
been put through a process that’s no fault of their own, first being introduced to LionGold by a
Canadian brokerage with open coverage on the stock that was certainly taken in good faith and
then watching as first LionGold talked business with them in an apparently serious manner only
to then be pointed at as a target for M&A by the very same company in “secret” talks with them
(see the write-up in IKN231 last week and my headscratching on just why LionGold pointed the
21

finger so blatantly at IRL for more). The sense of “ oh crap” must have been strong in IRL HQ.
So where does this leave us today? Well first thing is that with the decision to hold and not sell
or buy into last week’s news, nothing has fundamentally changed with the IKN Weekly position
as long as things as compared to two weekends ago, rather than one. Secondly, the company’s
fundies haven’t changed a jot either. But perhaps the silver lining here is that IRL has been
identified by at least one larger company (that has turned out to be wildly overinflated, but
before being rumbled has managed to do nine deals with world mining companies in the last 18
months and was being taken seriously enough to see 6.1% of its shares out held by the GDXJ
ETF) and that suggests it’s worthy of radar from the world of mining at its current price, even
with gold at $1.3k-or-abouts. I’ll freely admit it’s a bit of a downer to see one of your top two
recos get involved as target of a live M&A story only to see the whole scenario cave before your
very eyes in a matter of hours, but being here and long in IRL is less about the lucky timing
mentioned last week and more about knowing what true bargain value prices and decent
mining assets are about, investing in them and letting time bring the real value to fruition.
Conclusion
IKN232 is done, we end with bullet points:
• Of the two near-term longs recently opened, the vibes coming from Eco-Oro Minerals
(EOM.to) feel better and stronger than the ones from Starcore International (SAM.to).
We’re in the right timeframe for both of the stocks now, as the next two weeks or so
should see their catalyst news come along. Depending on how gold does next week, I
may add a few more to EOM.
• Top Picks Minera IRL and Rio Alto both had difficult weeks, IRL’s was tougher on a
news level and RIO’s tougher to understand given its good results. Nobody said it was
going to be easy.
• Overall it was a week to forget, but the near-term bullish call on gold isn’t going to
change for the time being and yup, it is fair to say “early days” without irony. Well, not
much irony anyway.
• The US political madness rolls on and the chances of a technical default on debt is now
real (much to my own surprise but it won’t be the last time political stupidity catches
me unawares). The way things are going, we still might get that bullish pop on gold
that I’m looking for from straight events but if it doesn’t come to pass, remember
Chopper (29). I will say however that now the GORO short is closed, if next week sees
that rebound the timing would be perfect for me.
• Between October 22nd and 24th I’ll be in Lima, checking in with several mining
companies to see how things are getting on, taking the pulse of the financial people
and getting the latest political gossip. RIO.to is on the agenda, as are others.
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
22

Footnotes, appendices, references, disclaimer
(1) http://incakolanews.blogspot.com/2013/08/mining-prs-and-ottotrans-part-75.html
(2) http://finance.yahoo.com/news/gold-corporation-announces-resignation-cfo-201500865.html
(3) http://www.laprensa.com.ni/2013/10/11/departamentales/165737
(4) http://www.laprensa.com.ni/2013/10/10/departamentales/165561-b2gold-logra-ok-mina
(5) http://www.confidencial.com.ni/articulo/14257/protestan-contra-b2gold-en-matagalpa
(6) http://finance.yahoo.com/news/minera-irl-liongold-cease-talks-181500458.html
(7) http://finance.yahoo.com/news/reserves-705-998-tonnes-san-170800431.html
(8) http://finance.yahoo.com/news/lara-exploration-ltd-codelco-expands-201446344.html
(9) http://seekingalpha.com/article/1624472-tahoe-resources-management-discusses-q2-2013-results-earnings-call-
transcript?part=single
(10) www.youtube.com/watch?v=ofqC2YgmR5s
(11) http://finance.yahoo.com/news/novacopper-reports-high-grade-results-131200802.html
(12) http://finance.yahoo.com/news/novacopper-announces-third-quarter-financial-123000005.html
(13) http://www.canadianinsider.com/node/7?menu_tickersearch=NEI+%7C+Netco+Silver
(14) http://g1.globo.com/pa/para/noticia/2013/10/justica-determina-intervencao-em-cooperativa-de-garimpeiros-no-
para.html
(15) http://www.diariocolatino.com/es/20131010/nacionales/120979/Organizaciones-piden-prohibici%C3%B3n-de-la-
miner%C3%ADa-met%C3%A1lica-en-el-pa%C3%ADs.htm
(16) http://finance.yahoo.com/news/oceanagold-agrees-acquire-pacific-rim-113000950.html
(17) http://www.elperiodico.com.gt/es/20131007/investigacion/235708
(18) http://sigagt.com/asesoria.html
(19) http://www.lanacion.com.ar/1628524-jose-luis-gioja-fue-operado-por-segunda-vez-y-se-encuentra-estable
(20) http://www.tiempodesanjuan.com/notas/2013/10/12/salud-gioja-hablan-principales-actores-mineria-argentina-
41312.asp
(21) https://www.facebook.com/joseluisgioja/posts/419291941505406
(22) http://diario.mx/Economia/2013-10-02_40c4e687/mineras-canadienses-amagan-con-salir-del-pais-por-impuesto/
(23) http://www.elfinanciero.com.mx/secciones/negocios/35890.html
(24) http://www.aminera.com/index.php/mineria-internacional/item/196-mendoza-piden-declarar-inconstitucional-una-
ley-que-limita-a-las-empresas-mineras
(25) http://finance.yahoo.com/news/rio-alto-produces-record-59-120000462.html
(26) http://ceo.ca/brent-cook-pvg-june-16-2013/#more-16308
(27) http://incakolanews.blogspot.com/2013/10/trying-to-piece-together-pretium-pvg.html
(28) http://www.usetdas.com/TDAS/NewsArticle2.aspx?NewsID=22350
(29) www.youtube.com/watch?v=1EY7lYRneHc
23

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
24

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.
25