IKN #233Premium

The IKN Weekly
Week 233, October 20th 2013
Contents
This Week: Travels, US jobs report, Finding the fatal flaw, Gold better (not good, just better)
Fundamental Analysis: next week
Stocks to Follow: Overview, AQM Copper (AQM.v), Rio Alto Mining (RIO.to) (RIOM), Starcore
Intl (SAM.to), Eco Oro (EOM.to), B2Gold (BTO.to) (BTG), Darwin Resources (DAR.v), Lara
Exploration (LRA.v), Tahoe Resources (THO.to) (TAHO) Focus Ventures (FCV.v).
Copper Basket: Overview, Curis (CUV.to), Lumina (LCC.v), Nevada (NCU.to), Strait (SRD.v).
The Lottery Ticket Basket: Overview, Bellhaven (BHV.v), Netco (NEI.v), Inca One (IO.v).
Regional Politics: Chile: The November election scene is becoming clearer, Chile: The
Atacama region courts China, Argentina: José Luis Gioja responding to treatment, Argentina:
The next elections start to show up on the radar, Mexico: The 7.5% royalty bill passes the
deputies.
Market Watching: Gold Resource Corp (GORO) redux, Seabridge (SA) (SEA.to) KSM news,
Colossus Minerals (CSI.to): It’s still an avoid and here’s why.
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
Travels this week
Tuesday afternoon through Thursday afternoon I’ll be in Lima and have meetings scheduled
with Rio Alto (RIO.to), Minera IRL (IRL.to), Darwin Resources (DAR.v) and Lara Exploration
(LRA.v), as well as one company in personal DD stage and a couple of other meets with pals
who know their Peru political scene deeply. Expect reports on anything worthy of mention from
any of those in next week’s edition and don’t be surprised if posting on the blog is light on
those days.
MacroWatch: The jobs report
A quick reminder that Tuesday AM (pre-bell) will give us the BLS jobs report delayed from two
Fridays ago by that US Congress and debt and budget nonsense. And our usual
recommendation is wheeled out at this point, as Calculated Risk (1) is the place to go for smart
pre/post numbers on anything US macro, so use it wisely.
Finding the fatal flaw
This week I found myself reflecting on the nature of the way in which junior prospects are
slowly but surely weeded out from “potential buy” to “avoid” in my informal, backroom lists.
The crystallization of these thoughts was around the 15 names contained in The Copper Basket
below, as one by one the names that I’ve considered as possible longs have fallen by the
wayside. Between the past and today I’ve given serious consideration to several stocks on that
list, including Oracle, NGEx, Nevada, only to see them change to “no thanks” as what I consider
to be fatal flaws show up. That’s also true for Augusta and Yellowhead, stocks I owned for a
while and then sold when the writing was large enough on the wall for myopic me to see.
1

Today I’m left kicking myself about not owning RMC.v, somewhat interested in HCH.ax even
though it looks a bit pricy, then rounding off with a “Well, maybe” about the tiny SRD and the
high risk profile that comes from its drill play potential now. Sadly that’s really all that grabs me
at this point among those 15 names, the others look somewhere between ‘neutral’ and ‘oh my
stars never’ to me.
It’s a frustrating and somewhat depressing scenario, but it’s also the way the junior world
works. We focus upon and dabble with companies which run projects that are by their very
nature unlikely to make it to production and industrial success. We start with a thousand ideas
and although we can whittle those down to maybe 50 to 100 decent ideas and discard the rest,
the odds are still against us and the paring down process will continue. The name of this game
is less that of buying the company with the single winning project, it’s more about buying a
stock and then spotting the fatal flaw and getting out (hopefully at a profit) before the rest of
the market spots the problem and sends the price down.
Add that to the state of the market that abjectly refuses to buy into any decent new story
(though admittedly the occasional exceptional story will move dials) and we’re in a place where
exploration and discovery plays are so out of fashion they could be wearing flares. Copper is
just the sector of example, the thoughts above apply to silver, gold, copper and all the other
things that get dug out the ground that you might care to mention.
I’m therefore reduced, as observed on more than many occasion on these pages, to picking up
pennies in front of a steamroller and trading in and out of names and ideas for the type of small
gain that shouldn’t be of interest to a guy like me. I’ve been plain lucky on more than one trade
this year too, having picked up small wins in BHV, PVG and lately CSI (to name but three)
which then saw their share prices squashed by the big roller. Until gold and the underlying
metals prices improve things aren’t likely to get better.
Gold: Better (not good, just better)
Last week the opening rantspace was about 2m oz of gold sold into the market and musings
thereof and this week we have a few
words on...oh, the coincidence...a 2m oz
buy order that popped the metal on
Thursday, right after all the US Congress
budget/debt/furlough/default/etc
shenanigans had been solved, the type
of agreement that was supposed to sink
gold the metal in dollar terms iif them
there experts were to be believed (and
look how gold outstripped silver, too).
Last week’s random mumblings didn’t
achieve that much, but they did call the
signals at the time as over-examined and
probably overrated, which looks about
right after looking back on the week just past. Gold is almost back to the levels of two weeks
ago, when my original “let’s play bullish trader” call was set up, so I think it’s fair to say we’re
back at square one.
Fundamental Analysis of Mining Stocks
Nothing this issue. I’ve taken a week’s break from the serious number crunching because
there’s not much doing at the moment and as of next week there’s going to be plenty on my
plate. Breathe deeply and continue.
2

Stocks to Follow
Last week saw five names up, five down and two unchanged (IRL.to, NET.v) from those open
this time last week and as the uppers (RIO.to, BTO.to, RIO.to trading position, SAM.to, AQM.v)
were generally larger than the downers (LRA.v, EOM.to, TAHO short, FCV.v, DAR.v) the overall
effect is mildly positive on the week (though nothing to write home about). The only double
figure percentage move registered was in AQM Copper (AQM.v up 13.6%) which was the price
your author sold into (see below).
So with loss of AQM Copper from the list we now have 11 open ‘Stocks to Follow’, four less than
our self-imposed maximum. They’re all in the red, which still sucks, but at least with four
spaces now available and a decent wedge of cash sitting on the sidelines, there’s room to play.
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$1.79 -22.2% 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 hold C$3.07 28-nov-12 C$2.43 -20.8% sold 1/2, rest rides. Quality
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.82 -28.7% solid biz model, LT hold
Rio Alto Mining RIO.to buy C$2.34 07-jun-13 C$1.79 -23.5% added Oct'13 avg down
Starcore Intl SAM.to buy 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$0.49 -10.9% new trade, st pol risk play
Shorts
Tahoe Resources TAHO short U$13.10 08-apr-13 U$18.06 -37.9% port hedge, easy2b short
Smaller/Riskier
Focus Ventures FCV.v spec buy C$0.175 01-jul-12 C$0.125 -28.6% revised tgt 25c
Darwin Res DAR.v hold C$0.10 14-jul-12 C$0.065 -35.0% 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
AQM Copper AQM.v oct'13 C$0.31 16-oct-11 C$0.125 -59.7% closed failed trade
2009, 2010, 2011 and 2012 closed positions in appendices below
Now for some notes on a selection of the above stocks.
3

AQM Copper (AQM.v): Position sold. On Tuesday AQM did one block trade at 12.5c. Then
Wednesday morning I got a mail from A.N. Other asking whether I’d like to sell mine for that
price too. After thinking it over I agreed and sure enough, another block went through that day
(only a small fraction of which were mine, I hasten to add). In this style the boil is lanced and
the hefty loss finally realized, which had to be done but does add some extra liquidity to the
port and at a right time to hold cash.
Rio Alto Mining (RIO.to) (RIOM): It wasn’t a stellar week for RIO.to and by the looks of my
mailbag Thursday, it wasn’t just me who’d picked up on the apparent programmed selling
pattern that day which squashed the promising rally that morning.
But in the end it was a nominally winning week for The IKN Weekly Top Pick and my own
biggest position and as up is better than down (when you’re long) I’m not going to moan and
wail too much about what looks for all the world like share price capping to me. The other side
to this coin is that somebody somewhere has a good reason for keeping a lid on this share
price, so I’m happy enough to wait it out and see where it all takes us. One of the reasons
mooted is that RIO may be de-listed from the GDXJ by the end of the year if it doesn’t meet the
minimum market cap barrier, but even if true there’s nothing Van Eck can do to change the
company fundamentals. Or more simply, RIO.to will stand or fall as a mining company on its
operations, not on who owns the shares.
Meanwhile, the production figures for the past three months are well worth a closer look. On
October 7th (2) RIO announced its 3q13 production of 59,157 oz gold from La Arena, but as we
now have the monthly production numbers for July and August thanks to the Peru Mining
Ministry website (those August figures out this weekend (3)) by doing the necessary math we
can see how production has suddenly accelerated at the mine. Here’s the chart:
4

RIO.to: Monthly gold production figures
27500 25616
25000 24401
22500
20144 19560 20184
1 2 7 0 5 0 0 0 0 0 16692 17639 1542615091 15998 17039 15635 15431 18109
15000 12887 1379313670 12897
11871
12500 1071210114
10000
7500
5000
2500
0
5
21naJ bef ram rpa yam nuj luj gua pes tco von ced 31naJ bef ram rpa yam nuj luj gua pes
Ozt Au
source: MEM/IKN calcs for sep'13
This is set to continue, as it’s understood RIO has kept the current rhythm going (e.g. it placed
30k oz gold on the pads during September, which will see October’s numbers come in nicely)
and there’s every reason to expect things to stay at the current rates for the foreseeable future.
This mine has definitively turned the corner in production terms and your author’s production
estimate of 68k oz Au for 4q13 might even turn out to be lowball.
So anyway, I’ll get to sit down with RIO.to people next week and find out as much as possible.
Thanks for your mailed-in questions, which will also get floated at the management team. Full
and detailed report coming your way next week.
Starcore International (SAM.to): Another NR from SAM last week, (4) which announced
that the company was starting a 5,000m surface drilling program (not connected to its ongoing
U/G drilling that’s for reserve/resource purposes) to explore surrounding targets to the currently
known deposit. There was also a nice quote from CEO Eadie which suggested that earnings
were good enough to pay for all this, the proof of which is expected in he next few days as
SAM.to is due to file its earnings. That’s really the only reason I’m long here.
Eco Oro Minerals (EOM.to): A flurry of news stories around the Páramo issue last week, with
one in particular from Colombia’s La Republica that looked at first sight as if bad news was on
the way for the mining companies there (and tried to make out it was an exclusive of some
sorts) but on closer inspection wasn’t anything more than a re-hash of the information we first
ran in IKN228 dated September. The vibes are the same, the market action is the same strange
and stilted thin trading, the only thing that’s changed is the price of the stock, now 4c cheaper.
This is my best idea for a near-term risk-reward play and if the new enviro minister keeps her
word, we should have definition on the all-important Páramo reserve boundaries either next
week or the week after.
A reminder: EOM.to and SAM.to aren’t going to be open for much longer, the shelf lives on
these trades are limited.
B2Gold (BTO.to) (BTG): BTO had a better week and bounced with the first line of stocks as
gold moved up, just as a sector leader should. Next week should provide us with BTO’s 3q13
production numbers (they normally report them a little later than the pack) so wtach the wires
and the brokerage analyst calls on that, because this widely held and covered stock will get
plenty of attention. What to expect? Well, considering the reliable nature of the beast, a
production miss would be a large surprise so put me down for “beats guidance handily”.
Darwin Resources (DAR.v): I’m meeting company head honcho Graham Carman on
Wednesday, all being well with his flight (he gets in intercontinental Tuesday evening), so more
next week on the NR about the latest round of exploration at Suriloma that was announced
Wednesday (5). Meanwhile, the stock labours.

Lara Exploration (LRA.v): After news blackout from July onwards, we now have two NRs in
two weeks. Last Tuesday saw the latest news from LRA (6) with the company announcing that
it had done a deal on its Curionopolis copper project in Brazil, with a private company
connected to the team at Colossus Minerals (CSI.to) and Serra Pelada.
The deal is one that would eventually see LRA selling 100% of Curionopolis for a total of $2m if
all goes swimmingly (with $250k of that already banked, aka useful working capital) and
holding on to a royalty on the property of between 2% and 5% depending on conditions. The
property is an interesting one, as back in December 2011 it returned some really strong copper
intercepts (7) that we previously commented upon on these pages and was then optioned out
to Codelco. The big Chile miner drilled the property and found nothing of the necessary world-
class size/scale to interest it, so handed it back, but that doesn’t mean the property is dead;
what Curionopolis has is very decent high grade, rather than absolute size, so a smaller
operation could very well make a fist of things where a big world scale miner has little to gain.
After all, 53.8m of 9.59% Cu and 3.3g/t gold is good mineralization by anyone’s standards.
LRA is good at doing deals and the one last week is typical; it will get cash to move forward on
its own plans and retains an interest in the property via the royalty and while these lesser deals
get done, LRA still has the big ones on board (eg Liberdade or Sami) that could provide the
holder with a big win. I like this stock for its conservative business plan that also offers
discovery potential and it remains the single position that causes me the least worry of any of
the IKN ‘Stocks to Follow’ list.
Tahoe Resources (TAHO) (THO.to): Right on schedule (8) came the first shipment NR from
TAHO (as anticipated last week) but it was
interesting to see how the stock sold off on
the news, rather than zoom off into the
stratosphere. The zooming came later in the
week when TAHO reacted to the PM pop as
well as anything else out there, which is after
all what it’s supposed to do.
It’s still very easy to be short this stock,
coming back as I often do to the bottom line
of this story. It’s a company with a single
asset in Guatemala and it’s priced at over
$2.5Bn. The market is crazy.
Focus Ventures (FCV.v): Although a notch down on the week, it was a positive period for
FCV because unlike so many other juniors we could mention, not only is the company raising
capital successfully but it’s even managed to expand its placement from $1.2m to $1.5m gross
proceeds (9). This is a good sign. In other news, I have a meeting slated with FCV pres David
Cass for the week after next so give me a couple of weeks and we’ll run a detailed update on
“new FCV”, the agro junior. Until then, easy enough to hold but no reason to add.
The Copper Basket
After forty-two weeks of 2013 The Copper Basket is showing a 22.67% loss to level stakes.
6

company ticker price 1/1/13 Shares out Market Cap current pps gain/loss%
1 NGEx Resources NGQ.to 3.40 168.66 306.96 1.82 -46.5%
2 Augusta Res AZC.to 2.43 144.35 287.26 1.99 -18.1%
3 Lumina Copper LCC.v 9.43 43.61 261.22 5.99 -36.5%
4 Copper Fox CUU.v 0.83 402.96 217.60 0.54 -34.9%
5 Reservoir Min. RMC.v 2.41 41.68 188.81 4.53 88.0%
6 Nevada Copper NCU.to 3.50 80.5 161.00 2.00 -42.9%
7 Hot Chili Ltd HCH.ax 0.72 297.46 135.34 0.455 -36.8%
8 NovaCopper NCQ.to 1.80 53.02 96.50 1.82 1.1%
9 Panoro Minerals PML.v 0.62 204.71 77.79 0.38 -38.7%
10 Western Copper WRN.to 1.39 93.68 66.51 0.71 -48.9%
11 Curis Resources CUV.to 0.70 63.13 42.93 0.68 -2.9%
12 Candente Copper DNT.to 0.375 122.05 28.07 0.23 38.7%
13 Oracle Mining OMN.to 0.80 49.03 17.65 0.36 -55.0%
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 -22.67%
The Copper Basket gained a point and a half on its overall average thanks to the positive
balance of ten gainers (not listing them all),
Copper Basket 2013 average, weekly
three losers (NCU.to, DNT.to, OMN.to) and
12%
two unchanged stocks (YMI.to, SRD.v). 8%
Most of the moves were small in 4%
0%
percentage terms, but there were two
-4%
bigger gainers worth mentioning, those of -8%
Curis (CUV.to up 13.3%) and Lumina -12%
-16%
(LCC.v up 11.5%).
-20%
-24%
The week in copper trading was marked by -28%
-32%
the UNCH nature of price that fluctuated
just a couple of pennies from a $3.29/lb
average for December futures contracts.
The boost felt in the PMs didn’t reach the
copper pit, but then again the sink of the week
previous was ignored, too.
To the inventories and the whole issue of
metals warehousing has been a hot topic at
LME Week in London, with the main message
being “we don’t believe you anymore”. There’s
a growing realization that the way in which the
LME system has been co-opted by major
financial and trading instos (Goldman, Morgan,
Trafi, Glencore etc) may finish by destroying
the system from within, because if the industry
starts ignoring the LME market prices because
they’re based on false or misleading data, the
role of price discovery for the metals (all
industrials, not just copper) will be taken from
the LME and given to somebody or something
else. As an alternative scenario, just look at the
way in which iron ore pricing is settled for a
season in the proverbial smoke-filled rooms
when BHP/Rio Tinto/Vale meet with their Asian buyers.
7
ht6naj ht02 r3bef ht71 r3ram 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
%

The basic, bottom line problem is that end users feel they’re paying too much for their metal by
a rigged system, one that the warehouses and the producers enjoy. If that’s the case, at some
point we’re going to have private contracts being drawn up and some big, powerful buyer will
say “No LME/market prices paid by us” and getting a better deal from the producer. And that
will be the beginning of the end for the way in which base metals are priced around the world
today. Either that or some big market player is going to spot the false pricing of a big market
and short the merry hell out of copper and its friends in order to transfer wealth from the
coffers of Goldman Sachs to its own. So yup I’m bearish copper prices but the problem with the
bear call on copper is that it can easily go against for a long time until some large crack
appears, and then it’ll all tumble down quickly. Theory of lower copper is one thing, getting the
timing right is quite another and is equally as critical.
Anyway, to the week’s numbers and world copper stocks dropped by 0.3% (2,111mt) to
695,782mt last week. LME warehouses saw a 2.3% drop to 497,500mt, Comes dropped 3.0%
to 26,173mt and once again, Shanghai Futures Exchange warehouse stocks jumped
significantly, up 6.5% to 172,109mt. With dissenting opinions available, the general feeling in
the metals world is that Shanghai stocks are a bigger tell on the real state of the market than
LME at the moment and the build-up on Chinese shores should be of concern to those who’d
like copper higher.
As for LME cancelled warrants, they stood at 50.2% of warehouse stocks and continue to signal
the type of gaming that the end-users are complaining about.
Cancelled Warrants at LME, IKN157 to date
60%
50%
40%
30%
20%
10%
0%
8
751NKI 951NKI 161NKI 361NKI 561NKI 761NKI 961NKI 171NKI 371NKI 571NKI 771NKI 971NKI 181NKI 381NKI 581NKI 781NKI 981NKI 191NKI 391NKI 591NKI 791NKI 991NKI 102NKI 302NKI 502NKI 702NKI 902NKI 112NKI 312NKI 512NKI 712NKI 912NKI 122NKI 322NKI 522NKI 722NKI 922NKI 132NKI 332NKI
source: Cochilco, LME
rof
yrotnevni
EML
%
latot
yreviled
resu-dne
Data as always via Chile’s top beancounter station, Cochilco (10). Now for updates on some of
our covered stocks
Curis Resources (CUV.to): Rather than make long commentary, I’ll just print up the
newspaper report (11) and let it speak for itself:
On October 14, 2013, the Town of Florence filed Complaint No. CV2013-02511 in the Pinal
County Superior Court against Florence Copper, Inc., which was formerly known as Curis
Resources (Arizona) Inc. The Town’s complaint also joined as a defendant RK Mine Finance
Trust 1, an Australian trust which holds a security interest in the property of Florence Copper, Inc.
In Count I, the complaint seeks a declaratory judgment from the court which would hold that the
right to legally mine the property was extinguished when the Town of Florence re-zoned the
property as a Planned Unit Development (“PUD”) at the request of real estate developer W.
Harrison Merrill.
The property was re-zoned a second time in 2007, again at the request of Merrill, to amend the
PUD to designate the Florence Copper property as exclusively residential. The Town seeks the
court’s declaration that in re-zoning the property, Merrill abandoned any right to mine the property
or maintain any nonconforming uses and structures related to mining, which is therefore an illegal
use.
Since that time, Florence Copper has been unsuccessful in its attempts to change the zoning in a
way which would allow mining activity again.
In Count II, the complaint requests that the court enter an order directing Florence Copper to
“show cause” why the Town should not be permitted to condemn the property and take
possession pursuant to its power of eminent domain, if in fact the court determines that Florence
Copper does have the right to mine the property as a legal, nonconforming use of the property.

The Arizona legislature has given municipalities such as Florence the right to condemn property
to eliminate legal, nonconforming uses.
In such case, the Town would have to pay Florence Copper “just compensation”, as determined
by the court or a jury, in order to legally obtain title.
What I don’t know is who’ll eventually win out in this legal battle. What I do know is that CUV
has been full of fecal matter by telling the world that the town of Florence doesn’t have a leg to
stand on and the whole affair will be wrapped up in a matter of weeks...for months (even
years) on end. I also know that community political risk is as important in LatAm as it is in The
USA and as a result I’ve learned to stay clear of any project with strong, numerous and
determined local opposition.
Lumina Copper (LCC.v): In IKN232 last weekend we started the LCC notelet with “Last week
up, this week down”. So let’s add “this week up” to the end of that but as for the rest, all as
you were. Avoid LCC because even if you fancy a spec roll of the dice on Argentina and its
beaten up juniors, the place you don’t want to bet is on high capex megaprojects.
Nevada Copper (NCU.to): That 1-handle showed up Thursday ($1.98 the week low) and
although NCU got back to exactly $2.00 by Friday’s close, its action was the epitome of weak
during a rally period for others. NCU is a high radar junior with plenty of brokerage coverage
and promotion, so there are going to be proponents of the stock out there who’ll find their own
way to reverse engineer a decent logical reason to buy or hold this stock. Don’t believe them,
this company isn’t going anywhere because there’s good reason why it’s been on the market for
a potential buyer for at least three years without getting its day at the altar; we retail grunts
found out why with that feas study two weeks ago. Sadly, it’s an avoid from now on.
Strait Minerals (SRD.v): After literally years of waiting, we finally have the drills turning at
the Alicia project JV with Teck. The news last on October 15th (12) had plenty of detail on the
deal and the progress to date and expected,
but was another “no good deed goes
unpunished” moment for a junior stock as this
chart shows
So to be fair SRD did recover to its 7.5c level
of last weekend, but in a parallel universe
where junior miners got at least some respect
for their efforts, SRD would have shown some
gains.
Alicia is an interesting project and Teck has
persevered in its JV as well, which is
testimony to he big partner’s attitude towards
its potential. We’re now on the cusp of finding out whether the old adage of “worst thing you
can do to a prospective target is drill it” will be the case, or whether there’s a big system here
after all. Those of you who like to dabble in risky drill play speculation now have an active
vehicle in SRD and to be honest, I might have a dig at these prices too. I won’t be anything big
if I do, but the potential for reward is here.
The Lottery Ticket Basket
After 42 weeks of 2013 The Lottery Ticket Basket is showing a 29.27% loss to level stakes.
9

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 15.03 0.190 52.0%
3 AQM Copper AQM.v 0.08 105.57 13.20 0.125 56.3%
4 Fancamp Expl. FNC.v 0.125 177 11.51 0.065 -48.0%
5 Bellhaven BHV.v 0.14 136.81 9.58 0.070 -50.0%
6 Tango Gold TGV.v 0.13 76.24 4.57 0.060 -53.8%
7 Copper North COL.v 0.10 58.7 3.52 0.060 -50.0%
8 Netco Silver NEI.v 0.075 9.4 3.24 0.345 176.0%
9 Inca One Res. IO.v 0.12 34.0 2.89 0.085 -29.2%
10 Gryphon Gold GGN.to 0.085 194.64 1.95 0.010 -88.2%
11 Agave Silver AGV.v.v 0.30 21.55 1.72 0.080 -73.3%
12 Darwin Resources DAR.v 0.20 26.16 1.70 0.065 -67.5%
13 Glass Earth GEL.v 0.155 105.67 1.59 0.015 -90.3%
14 Rio Cristal RCZ.v 0.025 17.259 0.69 0.040 -84.0%
15 Firestone Ventures FV.v 0.045 36.82 0.18 0.005 -88.9%
Portfolio avg -29.27%
Just when you thought the nanocaps were dead in the water...
Last week The Lottery Ticket basket saw six winners (MLN.v, BHV.v, GEL.v, AQM.v, COL.v,
NET.v), five unchanged stocks (GGN.to,
FNC.v, EGE.v, IO.v, RCZ.v) and four losers 25% Lottery Ticket Basket 2013 average, weekly
(TGV.v, DAR.v, AGV.v, FV.v) and thanks to 20%
15%
the big percentage wins seen in Glass Earth 10%
(GEL.v up 50.0%), Netco Silver (NET.v up 5%
0%
38.0%), Marlin Gold (MLN.v up 28.6%) and -5%
-10%
Copper North (COL.v up 20.0%) the basket
-15%
gave us a 7.25% average gain, though -20%
-25%
admittedly nearly 5% of that was due to the
-30%
weirdly springing Netco Silver due to it being -35%
-40%
in the sweet spot of additions to the basket -45%
average at these prices. Those big wins were
leavened somewhat by the losses in
Firestone Ventures (FV.v down 50.0%) and
Agave Silver (AGV.v down 15.8%).
Bellhaven (BHV.v): At what point is this a buy? Well, that could be now because if gold gets
a boost as we’re calling, seeing BHV back at 10c or 11c wouldn’t surprise anyone, that’s 40% or
50% up from here.
Netco Silver (NEI.v): Curiouser and curiouser, said Alice. NEI is now 176% up on the year
and it’s now to the point where I may just cash in the very small amount of shares I bought at
the beginning of the year (along with slices of all others) in order to offset some of the hefty
percentage losses. There’s still no news since the October 3rd announcement of the $400k
financing either, it just looks like it’s getting bought because other people are buying it.
Inca One (IO.v): Here’s a company with a head office in Lima that I won’t be visiting next
week. The little post on Thursday (13) on the blog that highlighted this company’s plans to
raise working capital via debt, all without so much as a word to the market via a public NR, is
exactly the type of backroom deal that needs to become a thing of the past in tinycap
exploration companies.
10
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 ht02
source: IKN Weekly data, TSX
2102/1/1
morf
egnahc
%

Regional politics
Chile: The November election scene is becoming clearer
Our main ‘Regional Politics’ feature today is Argentina and an outline on the 2015 Presidential
election, because although some way off it’s beginning to get talk and may start to affect stocks
in that country. That’s in the note below and it’s a tough one to call however, while a far easier
election to predict is in Chile this November where ex-President Michelle Bachelet has moved
from red-hot to incandescent brilliant stellar white hot favourite to return to her post. We’ll
probably go to a second round run-off however, and the main talking point is now who will
make it to the December ballotage with Bachelet. This because the independent candidate
Franco Parisi has become a surprise package and put himself int eh race to make the second
spot against the other main candidates, Evelyn Matthei (current government candidate) and
Marco Enriquez-Ominami (aka MEO), the centre-party candidate.
Current polls put Bachelet at 37% of votes, with the others at least 20 points behind. To avoid
a second round, Bachelet would need to get 50% +1 vote, i.e. an absolute majority.
Chile: The Atacama region courts China
The Northern, mining intensive Atacama region of Chile (83% of its exports copper) announced
last week a special trade fair (14) designed to attract Chinese capital to the region. It’s to be
held November 11-15 in the regional city of Copiapó and will involve over 300 exhibitors from
many different economic sectors but with a special emphasis on mining operations.
Argentina: José Luis Gioja responding to treatment
Further to last week’s news, San Juan governor José Luis Gioja’s condition is thankfully
improving, though still serious. He’s reportedly (15) opened his eyes, recognized family
members and is off the artificial respiration machine, and although his condition is reported as
stable it’s also serious and on Saturday his body temperature registered strong peaks indicative
of a fever, likely caused by an infection.
Argentina: The next elections start to show up on the radar
I’ve been asked by three separate readers of this missive this week about the 2015 presidential
elections in Argentina and how they might change things in the country, which I found strange
until I started reading some of the op-eds that have suddenly appeared in English news about
the subject. I stuck “argentina elections 2015” in Google (16) and out popped stories from the
FT, WSJ, Reuters, World Politics Review, The Daily Telepgraph, NYT and a host of others in the
last week, all with the same general thrust of how things are set to change with the “End of
Kirchnerism” and a “return to normality” on the horizon. So a few thoughts needed on the
subject.
If a week is a long time in politics, two years in Argentina is an absolute eternity. Anyone
making confident predictions about the state of that nation in 2015 and the way in which it’s
leaning based on the current state of affairs is either stupid, naive, ignorant of history or trying
to hoodwink the reader. Very likely a combo of any or all of those. However, there are a few
things that we either know or can be confident about so here’s a little list:
First and foremost, Cristina Fernández de Kirchner (CFK) is almost certainly not going to try and
change the constitution in order to run again for re-election. It’s one of those things she has
stated clearly and firmly on several occasions, but her political opposition take any opportunity
to drag the subject back up on the slightest hint of a nuance from any of her supporters.
As for who will run for President from her party ranks, the mostly likely answer to that is Daniel
Scioli, currently governor of Buenos Aires Province as well as being the president of the PJ
(Peronist) party. He’s a faithful Kirchnerist, has a decent reputation in the country and in BsAs
province has both a power base and a track record of governance to show the nation.
However, the PJ (Peronist) party is a strange and fractured beast. Scioli is the current leader
11

because of his adherence to the CFK brand of Peronism (the Frente para la Victoria (FpV) party-
within-a-party, known as the Kirchner peronists or “los K”) but there are other parties and
political opinions inside the large and diverse umbrella that is the Peronist (PJ) party. Therefore
it’s very possible we’ll see a serious opponent to Scioli run against him for the 2015 presidency
from inside the PJ umbrella. They’ll include what’s known as “traditional Peronism” candidates
or others that use the Peron badge but are clearly more right wing than CFK and this current
government (which is a lefty brand of Peronism by anyone’s standards). An early front-runner is
the rightist PJ member Sergio Massa, but there are other players that could come on the scene
very quickly and easily, with a traditional source of candidates being provincial governors form
all parts of Argentina.
The traditional left-leaning non-PJ politics are covered by the UCR Radical/Frepaso alliance,
which won’t have much of a candidate or a chance this time around.
Meanwhile, the non-PJ right wing already has its candidate set. Mauricio Macri is mayor of
Buenos Aires Capital (i.e. the central city or around 3m people, rather than the wider
conurbation of 13m or the even larger province) and has clearly stated his intention to run for
President via his right wing PRO party, which promises pretty classic neoliberal right wing
policies if given power.
There are other important players in the country, not least of which the unions which in the last
few years have split into pro-Cristina and anti-Cristina factions, but as it’s way too early to make
firm calls about the 2015 scenario we’ll break off at this point and sum up by saying we can
expect at least three major players for the big job:
• The CFK government candidate, most likely to be Daniel Scioli.
• A major “non-CFK Peronist” candidate, the name of which is very difficult to call at this
point (NB, many op-eds are pencilling in Massa at this point, I think he’s more akin to a
trial balloon/stalking horse and won’t be up for the big show)
• Mauricio Macri, who’ll represent the type of classic right/centre-right policies typical
around the world these days.
However, please note that the above says at least three major players, because it’s just as likely
that a fourth or even fifth serious candidacy appears along the way. Also, I again repeat that a
if week is a long time in politics two years in Argentina is an absolute eternity, which means
that anything (I mean anything, seriously, the place is whacko squared) could happen between
now and then to set the proverbial cat amongst the pigeons. Set nothing in stone, but those
three above are probables all the same. Which brings us to the crunch question and in effect,
the only one that matters:
Who will win the election?
The answer is that I don’t know. Nobody knows, but what I will say is that today Macri is the
least likely of those three groups to make it. I’m not saying he’s without a chance, but he has
handicaps in his style (non-charismatic in a country that values that part of a politico’s make-up
highly), his party reach (which is good in Buenos Aires, but thin in the key provinces) and his
politics (which would be a major breakaway from anything given executive power in Argentina
previously). Then we get to the non-CFK Peronist candidate and the government/CFK Peronist
candidate and I think it’s going to be between those two groups, not least because the lack of a
serious leftist (it’s more centre-left in fact) candidate leaves that political space up for grabs.
What that means in turn is that even if the CFK candidate (probably Scioli) loses, the country
isn’t about to make a massive directional change in its internal and external affairs.
The bottom line here isn’t anything proactive, because it’s impossible to predict the utterly
unpredictable. But when probables are weighed against each other, the way in which Argentina
12

2015-beyond is currently moving is that we’ll likely get a less hard left style of government but
not of the type that will gain approval from the world’s business community, either. If Scioli
wins, CFK will stil be the power behind the throne and he’ll maintain the general party line
(though may well drag things from the left and towards the centre). If “non-CFK peronist”
candidate wins, the move to the centre would be quicker but it’s unlikely to move to the right in
classical terms. Either way, the current round of English language predictions of a “move to
normality” in Argentine politics and economics are unlikely and that there’s a helluva lot of
wishful thinking going on in the political commentary scene about Argentina right now. Or if you
prefer, consider that, in Northern political/economic terms at least, the country was crazy
before CFK, is crazy with CFK and will be crazy long after she’s gone. Whereas me, I like the
place. Never dull.
Mexico: The 7.5% royalty bill passes the deputies
There was little surprise when the law bill that would raise royalties on mining activity in Mexico
to 7.5% (+ 0.5% for PM mining) passed the lower house of deputies in Mexico last week (17),
because the real power and lobbying is all about the upper Senate. The reaction from the
industry has been to wail loudly, warn of massive investment loss and job losses (natch) but
also to offer an alternative plan of a 2.5% royalty (18), which points directly at the mid-point
number of 5% where your author and many other observers expect this somewhat
melodramatic negotiation to settle.
Market Watching
Gold Resource Corp (GORO) redux
A quick line on the short we covered late the week before last. GORO continued its dive last
week and if I’d been supersmart I could have made another 50c/share on the deal, but the way
in which the stock bounced back on gold’s pop suggests that on a straight line basis and ceteris
paribus, we’re close to the bottom for this equity.
However, notable by its absence, so far at least, is any block selling by big holder and very
likely seller Hochschild (HOC.L). Also, if as expected GORO cuts its dividend down by another
penny per month, that might adversely affect the price.
For the moment I’m leaving this one covered, but if GORO moves up on continued positive for
the silver and gold prices, there may come a point where I’d go short again. For the time being,
neutral and no value here.
Seabridge (SA) (SEA.to) KSM news
This was one of the stocks first featured as a potential short in IKN224 dated August 18th when
it stood at U$14.32. Last Friday it closed exactly four dollars at U$9.32 which means your
13

author spotted and didn’t act on yet another opportunity (a +27.9% short). But less me and
more news, so last week saw news of local opposition rising against the Seabridge KSM project
in Alaska. It was first reported in the local paper Juneau Empire (19) on Friday, then picked up
by AP (20) and consists of locals, particularly the fishing and some First Nations
representatives, worried about the environmental effects of any eventual large scale mine in the
region, with emphasis placed on water quality in rivers etc. Anyone exposed to the stock would
do well to read up on the developments, because they come at a key moment in the company’s
environmental permitting track for KSM.
Colossus Minerals (CSI.to): It’s still an avoid and here’s why
Here’s a chart of Colossus versus GLD and it’s an impressive one. There are more than a
handful of 90% losers around the junior mining market these days, but rarer birds are those
that have lost 90% in 2013 alone.
It gets me to reflect in passing that the near-term trade we ran in this that actually turned a
profit was far more luck than judgement, but that’s not what we’re here for today. The news in
CSI has been coming thick and fast Brazil recently, not that you’d have realized by the total lack
of information available from either company or analyst coverage; it’s almost as if the
brokerages exposed to CSI don’t want people to...nah, surely not! Anyway, to business and
here are our issues:
1) As noted last week in IKN232, the association of garimpeiros (small scale miners) at Serra
Pelada, Coomigasp is now under official investigation for fraud and financial misconduct (read
the judicial decree here (21), several pages of Portuguese legalese to help those autumnal
evenings fly by). What’s emerged since then is that the amount of apparently missing cash
comes to an impressive 50m Reales (around U$23m at today’s rate) or even 100m Reales (22)
according to latest reports (U$46m) and that the main suspects for the losses are the
Coomigasp committee that ran the show before the current directorate. However, the current
directors (who are vehemently opposed to the previous directors) are also under suspicion for
the irregular manner in which they were elected, according to the judge. What seems to be true
in the Coomigasp-only situation is that nobody is innocent, the politics and wrangling go deep
and it’s not a case of there being good guys versus bad guys, more like different shades of bad.
Up to this point the Coomigasp problems may affect operations at Serra Pelada but have no
direct link to CSI. However that might be changing and not for the better for CSI, either. The
latest comes from the national parliamentary commission that is now taking place on the Serra
Pelada problem (23), and accusations there are that the previous board (the one under most
suspicion) received some sort of payment (be it above board, a kickback or a plain bribe) from
CSI at the time when the contract between the two sides was changed to that CSI’s share of
Serra Pelada went from 51% to 75% (and Coomigasp’s down from 49% to 35% accordingly).
14

It’s unknown whether bribery can or will ever be proven, but anything that sticks to CSI from
corruption talk of this nature cannot be good for the company at all. The commission (24)
heard from congressman César Halum (one of two members of congress who called for the
parliamentary inquiry and something of a champion of the garimpeiros’ cause) who told them
how the local garimpeiros feel hard done by with the current 75/25 deal, feel ripped off by the
deal done between CSI and Coomigasp and say anti-company feeling is starting to run high. Or
in the words (25) of the judge that ordered the fraud investigation, “With the extraction
operation scheduled to begin in five months’ time, we are aware that violent conflict in the
locality may increase. This is something we want to avoid”.
Meanwhile, last week we saw the resignation of CSI’s Chief Financial Officer, Alden Greenhouse,
(26) and replacement with one David Massola. Needless to say, whatever the reason might be
behind the loss of a CFO, at this stage
of the game the optics of a main
executive leaving the company are
awful and it’s almost certainly the
reason behind the acceleration of
selling we saw on Thursday and Friday.
The company has said very little about
the change of CFO so nothing certain
can be said, but it may be connected
with news that hit on Friday (27) that
Brazil’s Commission of Finances and
Taxation rejected an application from
CSI to allow a tax deduction for training
and educational expenses for its
employees and families. Either that or there’s a connection to the “financial accusations” (let’s
say, to be diplomatic) heard in Brazil’s national parliament last week. Or perhaps CSI is about to
announce that it still has a financial shortfall to contend with before it gets to production. Or
perhaps Mr. Greenhouse is just fed up with the whole show and has better things to do.
As for further delays, the situation between Coomigasp, its workforce and Colossus along with
the now official fraud inquiry make the chances of further setbacks to the timeline very likely,
and that’s not even taking into account the already poor track record at CSI for execution and
delivery on its plans. The last raising brought gross proceeds of nearly $38m (approx net of
$35.5m), which was to cover an increased budget of ~$31m to get Serra Pelada up and
running by end 4q13 and to 1,000tpd by 1q14. That looks tight for cash if we’re about to hit
timeline delays, which may also account for the heavy percentage losses of last week. So to
sum up, there are several fronts of news about Colossus Minerals (CSI.to) at Serra Pelada and
none of them are good:
• Its partner and source of workforce, Coomigasp, is now under formal investigation for
fraudulent activities at director level, with U$23m a mooted figure for the corruption.
• The project is under public inquiry at Brazil’s national congress, which has heard reports
of bad blood between company and Coomigasp, company and workers, as well as as-
yet unfounded accusations of bribes between CSI and Coomigasp at the time CSI’s
stake in the project went from 51% to 75%.
• The loss of its CFO at a critical moment.
• Potential financial shortfall and further delays to construction.
And all this has been given very limited coverage in the English speaking world, at the same
time as the company share price tanks on above average volumes. You want bad optics? That’s
what I call bad optics, folks.
15

The bottom line to today’s update on CSI is that it’s not a stock to buy today. The situation is
complicated for the company and there’s no reason to stand in front of this particular
steamroller in order to pick up a few pennies, because this particular roller is moving quickly
and the pennies are really close to that big front wheel. If CSI can get through the
congressional inquiry, if it can smooth things with Coomigasp and its workforce and if it can
reach that all important first production target either late this year or early next, there’ll be
plenty of time to buy this beaten down issue again at a higher and much safer price, then make
a decent gain on any trade. But until then this is a story that’s way too risky for consideration,
because if anything else goes slightly wrong (timeline delay and more funding), there’s still
share price downside to come. And if something big goes against the company zero dollars,
zero cents is a logically possible future share price. Avoid until further notice.
Conclusion
IKN233 is done, we end with bullet points:
• If I were still the young, arrogant and fearless soldier from the Seven Ages of Man
speech who sought the bubble reputation even in the cannon’s mouth (As You Like It)
I’d go all in on Rio Alto Mining (RIO.to) right now. Its share price has been beaten low
and is now showing every sign of being held back by market machinations, while its
3q13 results are set to show strong financials and its 4q13 production schedule looks
ready to beat all expectations. But being the somewhat softened family man who has a
whole different set of priorities to 20 years ago that’s not going to happen, my bet is
laid and it’s big enough for me needs already. But the intellectual challenge level of this
silly investment game we all play is another story, that’s the part that says “RIO is such
an obvious buy it hurts”. We’ll do a big feature on the company next week
• At some point in the future we may get to the point where the risk/reward balance
makes a case for strong value in Argentina exposed stocks. We’re not there yet, today
we’re at the moment in the cycle when the people who talk about certainties and
probables in that country’s political scene are people who don’t speak Spanish. A little
later we might get more predictions from people who speak Spanish and have never
been to the place. Then some time after that, the serious stuff might begin. Beware of
confirmation bias.
• Today’s Colossus Minerals (CSI.to) is the living, breathing archetype of the business
clusterfuck, when several (at first sight) apparently unrelated negatives gang up on
your focus company at the same time. This comapny has a whole heap of rough waters
to navigate before it can be reasonably viewed as a potential long trade, which may
happen (and that’d be a good thing) but there’s no point trying to second-guess the
way in which this story might unfold at the moment. Avoid, avoid, avoid.
• Gold did better and it would be nice if the improvement continues in the week to come.
With a couple of near-term longs nearing their moment of truth (EOM.to, SAM.to), the
timing would suit.
• Today’s is one of the few editions that has come in at under 10,000 words (9,878 to be
exact) and as I’m on the road next week the blog will be light, too. The life of a slacker.
The top long-term picks are Rio Alto Mining (RIO.to) and Minera IRL (IRL.to). I thank
you in advance for any feedback. Flash updates will be sent promptly if required by events.
I wish you good trading fortune, ladies and gentlemen.
Otto
16

Footnotes, appendices, references, disclaimer
(1) http://www.calculatedriskblog.com/
(2) http://finance.yahoo.com/news/rio-alto-produces-record-59-120000462.html
(3) http://www.minem.gob.pe/_detalle.php?idSector=1&idTitular=5756
(4) http://finance.yahoo.com/news/starcore-international-mines-ltd-surface-140000783.html
(5) http://finance.yahoo.com/news/darwin-commences-ground-geophysical-survey-123000432.html
(6) http://finance.yahoo.com/news/lara-exploration-ltd-agreement-signed-200500170.html
(7) http://www.laraexploration.com/news/news-details/2011/Positive-Drill-Results-from-the-Curionpolis-Copper-Gold-
Project/default.aspx
(8) http://finance.yahoo.com/news/tahoe-announces-first-concentrate-shipment-120000027.html
(9) http://finance.yahoo.com/news/focus-increases-private-placement-1-123000583.html
(10) http://www.cochilco.cl/Archivos/destacados/20131018115550_MERC2013%2010%2018.pdf
(11) http://www.santanvalley.com/news/news-stories/county/item/10716-town-of-florence-files-complaint-against-
florence-copper#.UmMDX3C_Ua8
(12) http://finance.yahoo.com/news/strait-commences-drilling-alicia-copper-130500757.html
(13) http://incakolanews.blogspot.com/2013/10/lend-microcap-fcf-negative-junior-miner.html
(14) http://spanish.china.org.cn/economic/txt/2013-10/20/content_30346623.htm
(15)
https://news.google.com/news?ncl=dLvQC60TmZ5sP4MODSkdsA33dyBKM&q=Jos%C3%A9+Luis+Gioja&lr=Spanish&
hl=es
(16)
https://www.google.com/search?hl=en&gl=us&tbm=nws&authuser=0&q=florence+copper&oq=florence+copper&gs_l=n
ews-
cc.1.0.43j43i53.220751.223032.0.224220.15.6.0.9.9.1.244.877.3j1j2.6.0...0.0...1ac.1.vmSC0wIbpuc#authuser=0&gl=us
&hl=en&q=argentina+elections+2015&safe=off&tbm=nws
(17) http://www.elmanana.com.mx/noticia/9582/Pega-nuevo-impuesto-a-empleo-mineroIP.html
(18) http://noticias.terra.com.ar/empresarios-mineros-protestan-por-suba-de-impuestos-en-el-
sector,634cccd86adc1410VgnCLD2000000ec6eb0aRCRD.html
(19) http://juneauempire.com/outdoors/2013-10-18/groups-bcs-proposed-ksm-mine-looming-train-wreck-
southeast#.UmQpaHC_Ua8
(20) http://hosted2.ap.org/FLJAJ/eee902782ea04602823f92b22b67c045/Article_2013-10-19-Fishermen-
Gold%20Mine/id-4c1b6808083445a3b167e72e76f3b213
(21) http://coomigasptocantins1.blogspot.com/2013/10/normal-0-21-false-false-false-pt-br-x.html
(22) http://www.em.com.br/app/noticia/nacional/2013/10/20/interna_nacional,461728/laranjas-sao-investigados-no-
garimpo-da-mina-de-serra-pelada.shtml
(23) http://www2.camara.leg.br/camaranoticias/noticias/ECONOMIA/454488-COMISSOES-DISCUTEM-ACORDO-
ENTRE-GARIMPEIROS-E-EMPRESA-DE-SERRA-PELADA.html
(24) http://www.ambito-juridico.com.br/site/index.php?n_link=visualiza_noticia&id_caderno=&id_noticia=104547
(25) http://www.boainformacao.com.br/2013/10/fraudes-e-movimentacoes-suspeitas-marcam-o-periodo-do-atual-
garimpo-no-para/
(26) http://finance.yahoo.com/news/colossus-minerals-names-david-massola-205300123.html
(27) http://www.cbnfoz.com.br/noticias-de-politica/editorial/politica/18102013-43147-camara-rejeita-incentivo-fiscal-para-
empresa-custear-educacao
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Stocks To Follow Closed Positions, 2012
Closed in 2012 closed close PPS
Soltoro SOL.v jan'12 C$0.87 07-nov-11 C$0.94 8.0% cash moved to BCM.v
Gold-Ore Res GOZ.to feb'12 C$0.84 13-oct-10 C$0.98 16.7% trade closed on ELG.v offer
Minefinders MFN feb'12 U$11.68 17-nov-11 U$14.80 26.7% target made, trade closed
Iron Creek IRN.v mar'12 C$0.58 26-sep-10 C$0.31 -46.6% time up on small bad trade
U.S. Silver USA.to apr'12 C$2.18 15-mar-12 C$1.86 -14.7% ST trade no good, cut loss
Augusta Res. AZC.to may'12 C$3.10 29-ene-12 C$2.07 -33.2% bad mkt, bad trade cut loss
Bellhaven BHV.v may'12 C$0.50 22-sep-10 C$0.28 -44.0% new mgmt not impressive
Zincore Metals ZNC.to may'12 C$0.325 29-jul-11 C$0.17 -47.7% bad mkt, bad trade cut loss
Soltoro SOL.v may'12 C$0.70 18-mar-11 C$0.41 -41.4% bad mkt, bad trade cut loss
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% fail ST trade close pre split
Estrella Gold EST.v aug'12 C$0.91 27-mar-11 C$0.14 -84.6% Closed on port realignment
Fortuna Silver FVI.to sep'12 C$1.07 03-may-09 C$5.32 397.2% sell call $6.17/ Mar25
Strait Minerals SRD.v oct'12 C$0.125 09-dic-11 C$0.12 -4.0% closing coverage til FY13
Sunward Res SWD.to oct'12 C$1.47 13-mar-11 C$1.21 -17.7% sold, took loss
Gold Res Corp GORO oct'12 U$21.47 09-sep-12 U$17.40 19.0% Short trade closed
Yellowhead Min. YMI.to nov'12 C$1.00 01-abr-12 C$0.63 -37.0% sold, took loss
Primero Mining PPP nov'12 U$7.26 07-oct-12 U$6.73 7.3% Short trade closed
Bear Creek Min. BCM.v nov'12 C$3.38 07-nov-11 C$3.72 10.1% Took small profit
Vena Resources VEM.to dec'12 C$0.70 31-may-09 C$0.18 -74.3% Failed trade (caps F)
Galway Res GWY.v dec'12 C$2.19 24-nov-12 C$2.30 5.0% closed good ST arb trade
Stocks To Follow Closed Positions, 2011
Closed in 2011 closed close PPS
Sunward Res SWD.v jan'11 C$1.05 21-nov-10 C$1.63 55.2% target made, trade closed
Serengeti Res SIR.v mar'11 C$0.245 05-dec-10 C$0.285 16.3% sold pre-tgt, ST trade fail
Fronteer Gold FRG apr'11 U$2.37 03-may-09 U$15.24 543.0% buyout, trade closed
Minefinders MFN apr'11 U$9.09 07-nov-10 U$16.89 85.8% target made, trade closed
Metalline Min. MMG may'11 U$1.04 26-jan-11 U$0.89 -14.4% exit, resource disappointed
Peregrine Met PGM.to jul'11 C$0.87 06-mar-11 C$2.60 198.9% buyout offer, closed
Dynasty Metals DMM.to jul'11 C$4.20 03-may-09 C$2.85 -32.1% Sold. Fail. Move on.
Aura Silver AUU.v aug'11 C$0.22 13-oct-10 C$0.16 -36.4% Bad pick. Take loss
U.S. Silver USA.v aug'11 C$0.52 26-jan-11 C$0.71 36.5% closed to make room
B2Gold Corp BTO.to sep'11 C$2.80 12-may-11 C$4.27 52.5% target made, trade closed
Bear Creek Min. BCM.v sep'11 C$3.80 27-may-11 C$4.17 9.7% macro sell call victim
Minefinders MFN sep'11 U$14.70 10-aug-11 U$15.15 3.1% macro sell call victim
Great Panther GPR.to sep'11 C$3.03 22-aug-11 C$2.64 -12.9% macro sell call victim
Fortuna Silver FVI.to sep'11 C$1.07 03-may-09 C$5.36 400.9% sold 20%, macro sell call
Focus Ventures FCV.v nov'11 C$0.40 20-apr-10 C$0.20 -50.0% cut losses, bad trade
Regulus Res. REG.v dec'11 C$1.17 14-aug-11 C$0.52 -55.6% cut on news of poor 43-101
2009 and 2010 closed positions in appendices below
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Stocks To Follow Closed Positions, 2010
Closed in 2010 closed close PPS
B2Gold Corp BTO.to Jan'10 C$0.88 08-nov-09 C$1.49 68.2% target made, trade closed
Radius Gold RDU.v Jan'10 C$0.18 23-aug-09 C$0.40 122.2% target made, trade closed
MAG Silver MVG mar'10 U$5.60 23-nov-09 U$7.28 30.0% closed in pdac week
Riverside Res RRI.v mar'10 C$0.435 20-sep-09 C$0.60 37.9% closed in pdac week
Amarillo Gold AGC.v mar'10 C$0.81 31-may-09 C$0.70 -13.6% closed in pdac week
B2Gold Corp BTO.to apr'10 C$1.24 18-feb-10 C$1.50 21.0% target made, trade closed
Lumina Copper LCC.v apr'10 C$0.84 14-jun-09 C$1.55 51.2% total position now sold
Troy Resources TRY.to may'10 C$1.10 03-may-09 C$2.25 104.5% sold on negative results
AuEx Ventures XAU.to may'10 C$2.51 24-may-09 C$3.38 34.7% trade closed
Nevada Copper NCU.to jun'10 C$3.27 14-mar-10 C$2.03 -37.9% need to lower Cu exposure
Carpathian Gold CPN.to jun'10 C$0.39 14-mar-10 C$0.35 -10.3% too exposed to cap raising
Amerix PM Corp APM.v jun'10 C$0.065 08-nov-09 C$0.05 -23.1% victim of macro bear
Antares Minerals ANM.v jun'10 C$1.42 06-dec-09 C$2.10 47.9% sold half
Vena Resources VEM.to jun'10 C$0.37 31-may-09 C$0.23 -37.8% sold half
Minera Andes MAI.to sep'10 C$0.75 28-jul-10 C$0.95 26.7% ST trade closed
Gold-Ore Res GOZ.to sep'10 C$0.52 01-aug-10 C$0.75 44.2% target made, trade closed
B2Gold Corp BTO.to sep'10 C$1.45 25-may-10 C$2.01 34.5% target made, trade closed
Blue Sky Uran BSK.v oct'10 C$0.41 19-may-10 C$0.22 -46.3% v small v bad trade closed
Dia Bras Expl DIB.v oct'10 C$0.14 30-aug-09 C$0.35 150.0% target made, trade closed
S. Amer. Silver SAC.to nov'10 C$1.38 24-oct-10 C$1.60 -15.9% loss on short, small fail
Ventana Gold VEN.to nov'10 C$7.92 27-jun-10 C$13.51 70.6% trade closed on buyout
Lumina Copper LCC.v nov'10 C$1.42 11-aug-10 C$3.65 157.0% trade closed
Antares Minerals ANM.v dec'10 C$1.42 06-dec-09 C$8.40 491.5% trade closed
Rio Alto Mining RIO.v dec'10 C$0.69 23-mar-10 C$2.16 213.0% trade closed
Coro Mining COP.to dec'10 C$0.585 03-oct-10 C$1.24 112.0% target made, trade closed
Stocks To Follow Closed Positions, 2009
Closed positions closed closing PPS
Cardero Res CDY/CDU.to May'09 U$1.20 03-May-09 U$0.87 -27.5% sold on negative news
Eastmain Res. ER.to May'09 C$1.04 06-May-09 C$1.315 26.4% trade closed
Radius Gold RDU.v May'09 C$0.165 03-May-09 C$0.235 42.4% trade closed
Latin Amer Min. LAT.v May'09 C$0.12 03-May-09 C$0.158 29.2% trade closed
Aquiline Res. AQI.to July'09 C$2.03 16-Jun-09 C$1.68 -17.2% took loss, bad timing
Chariot Resources CHD.to Aug'09 C$0.20 12-Jul-09 C$0.415 107.5% trade closed
Castle Gold CSG.v Sep'09 C$0.64 02-Aug-09 C$0.60 -6.3% ST trade didn't work out
Guyana Goldfields GUY.to Sep'09 C$2.30 12-May-09 C$4.50 95.7% profit taken
Los Andes Copper LA.v Sep'09 C$0.09 21-Jun-09 C$0.09 0% trade closed
Pediment Gold PEZ.to Oct'09 C$0.80 09-Aug-09 C$1.00 25.0% trade closed
Minera Andes MAI.to Oct'09 C$0.68 03-May-09 C$0.71 4.4% too much bad news
Dynasty Metals DMM.to Nov'09 C$4.18 03-May-09 C$6.01 43.8% half sold
Rusoro Mining RML.v Nov'09 C$0.55 03-May-09 C$0.57 3.6% underperformed
Important Disclosure
The information and opinions contained within this report reflect the personal views of the author and therefore all
material within should not be construed as accurate or reliable or be utilized as advice for investment or business
purposes. Independent due diligence and discussions with ones own investment and business advisor is strongly
recommended. Accordingly, nothing in this report should be construed as offering a guarantee of the accuracy or
completeness of the information contained herein, as an offer or solicitation with respect to the purchase or sale of any
security or as an endorsement of any product or service. All opinions and estimates included in this report are subject to
change without notice. It is prohibited to copy or redistribute this report to any type of third party without the express
permission of the author.
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