IKN #236Premium

The IKN Weekly
Week 236, November 10th 2013
Contents
This Week: Risk management, Gold on Friday.
Fundamental Analysis: NOBS report on Fortuna Silver (FVI.to) (FSM).
Stocks to Follow: Overview, First Majestic (AG) (FR.to), Fortuna (FVI.to) (FSM), Primero
(P.to) (PPP), Starcore International (SAM.to), Tahoe Resources (TAHO) (THO.to), Dalradian
Resources (DNA.to), Rio Alto Mining (RIO.to) (RIOM), Eco-Oro Minerals (EOM.to), B2Gold
(BTO.to) (BTG), Network Exploration (NET.v).
Copper Basket: Overview, NGEx Resources (NGQ.to), Curis (CUV.to), Panoro (PML.v), Nevada
Copper (NCU.to).
The Lottery Ticket Basket: Overview, Inca One (IO.v).
Regional Politics: Mexico: Mining companies start spinning the royalty law, Guatemala: Marlin
Mine, Nicaragua: Gold to be country’s top export in 2013 with more to come, Chile: Bachelet
already making soothing sounds to the mining industry, Your next potential political risk short in
Mexico: Torex Resources (TXG.to).
Market Watching: Tahoe Resources (TAHO) (THO.to): The pushback begins, Lowell Copper
(JDL.v) update, Colossus Minerals (CSI.to) update, Gold Resource Corp (GORO) 3q13 numbers.
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
Risk management
I received a mail received from ‘Will’, which was good to read because even in these dark
market days he found positive things to say. He ended by writing, “You are NOT only in the
business of making your clientele/readers money, but in SAVING us money.” Hopefully that’s
true, Will. And thanks for the mail as it was one of those that picked me up just at the right
time, very appreciated.
The second exchange was a conversation I struck up with a friend, D, who lives here. He’s not
a market investor of any sort (except for his dollar savings account at a local bank) and when
we meet we normally talk about other things unrelated to his work or mine, but for some
reason at week we got on to what I do. One of his observations included “But how can you
advise people you don’t know?”, or words to that effect and my answer was, “I can’t”.
So as I sit here on a Saturday evening and, as usual, reflect on the week passed these two
exchange tie together. In my reverie and Utopia what I’d like to do is:
• Tell you which stocks to go long with and get the calls right, all the time.
• Tell you which stocks to avoid as investments and get the calls right, all the time.
• Tell you which stocks offer strong shorting potential and get the calls right, all the time.
And hey, guess what people? I fail at that. Miserably. Because what I do is roughly the
following:
1

• Tell you what I’m doing with my junior mining investment account and with luck, get
more right than wrong over time.
• Hope that you’ll read it and be able to adapt the information into something that suits
your personal circumstances
• When it comes to the picks made here, hope you follow me into the “more rights” and
manage to dodge my “than wrongs”, or in other words you’re smart enough to get
value out of the publication, but always on your own terms.
And that’s it. As I said to my friend D over coffee, when you can sit down with someone who
wants their money managed by other hands, get to know them, their likes, dislikes, risk
parameters, net worth, percentage of net worth they’d put in play, family background, daily life,
cost of living, preferences of all types (car, authors, politics, food etc etc ad infinitum) you’re
then in a position where you can tailor their investments to their situation. I can’t do that with
any of the people who read these words (and wouldn’t want to either, but that’s another story).
But stockpicking is only part of the story, the other is risk management and at times like these,
it’s way more important than nailing a stock win or two. Again, I’d like to have a spotless record
and is far from that (as anyone who’s heeded my “don’t sell RIO.to, it’s cheap here!” all the
way down to where we are today will testify), but the general “raise cash” calls haven’t been far
out this year and as I firmly believe the “avoid” calls on this-or-that stock to be every bit as
important as the buy calls on others (recent ones include PML.v, NCU.to, CSI.to, even the
choice to remain on the sidelines on GORO since covering the short), it was pleasant to receive
Will’s mail and note that others have picked up on that part, too.
To wrap up, aside from my reverie on what The IKN Weekly can offer you in a perfect and
impossible world, my real ambition is to offer up useful raw material that your brains can take
on, process and adapt (or discard) according to your own circumstances. And without nailing a
100% success rate, get more stock calls right than wrong (because it’s the acid test and if not,
the last 236 weekends of my life haven’t been worth Jack). So please keep it clear that I don’t
manage your money, never have done and never will. In fact our relationship is a tenuous one,
most of you don’t know me in person and your whole connection is based on a couple of
vacation photos, a ranty, badmouthed blog, the occasion mail you might exchange with me and
a missive that plops into your inbox every Sunday evening. Beats me why you listen to anything
I have to say, frankly.
Gold on Friday
It was Berra’s deja vu all over again, as gold got hit down to U$1,280/oz by a macro event on
the second Friday of November and bringing
immediate reminders of how gold was hit down
to the same U$1,280/oz line on the second
Friday in October. The other thing that resonated
was the reaction to the hit, which was to see
buyers step up and nibble at the price all day,
much the same as October and again no follow-
through or second leg waterfall drop.
I’ve spent (wasted?) a part of my weekend
reading any report I can find about gold market
pessimism and there are a lot of technical
analysts and chart readers calling good lower
now. The $1,251/oz, $1,150/oz and the
inevitable sub-$1k callers abound, the range of
conditional calls (if this then that), the usual
hubbub. In other words, the same old shit from
the random walkers who have been proven
wrong time and time again. Why anybody
believes anything this collective decides upon is
2

difficult for me to work out.
As far as I see it, gold spent the week nervous about the jobs report and when it came, sold off
on command along with the US index futures, its thin volume and market size (compared to
dollar/euro forex, bonds, Dow stocks etc) again allowing it to be twisted easily in the wind.
However, when the market had moved beyond the headline +204k and 7.3% numbers to see
that this month’s report was very noisy, the major equities markets went back from whence
they came and rightly so. Not true for gold, the easy vehicle to push around on straight
monetary trades, but there’s nothing in that report to justify a change in the gold price in
exactly the same way as there was little to affect stock prices. The Dow bounced back, gold
didn’t but I expect it to do so in its own time, such as next week.
Bottom line: I remain cautiously optimistic about the near-term future of gold, our price driver
for the junior sector par excellence, and haven’t given up on seeing my $1,400/oz target
reached this month. Ask me in a couple of weeks and I might not be so hopeful, but today is
today.
Fundamental Analysis of Mining Stocks
This week we catch up with Fortuna Silver (FVI.to).
NOBS fundamental report dated November 10th 2013
Fortuna Silver Mines Inc. (FVI.to) (FSM)
Company Overview
Fortuna Silver Mines Inc. (Canada: FVI.to, USA: FSM, Frankfurt F4S.f) is a producing junior
silver mining company operating in Peru and Mexico. Its flagship properties are the San José
silver/gold mine in Oaxaca State, Mexico and the Caylloma silver/metals mine in Arequipa
region, Peru. Current share structure is as follows:
Shares out: 125.974m
Options: 6.459m
Warrants: zero
Fully diluted shares: 132.433m
Current share price: $3.75
Market Cap: $472.4m
Approx cash per S/O: $0.25
All prices are in Canadian dollars unless stated. Forex U$1=CAD$1
3

Today’s report
We know Fortuna (FVI) of old round here, so this isn’t going to be a long, drawn out report. No
rambling on the quality of management (as good as ever) and no discussions of the assets (we
can expect the reserve/resource numbers to come down a notch or three when re-calculated
against a lower silver price in January, but these guys are going to be mining at Caylloma and
San José for many years to come, no matter how the rocks are booked by the beancounters)
and no medium-term price target either (in much the same way as our recently closed short on
FVI we’re looking for a nearer-term trade, rather than a longer term investment).
The focus is specific, it’s on the following
1) The 3q13 numbers
2) How they relate to the current share price
3) What we can expect from FVI in its current quarter
4) The potential for a trade on the back of that
So lets get on with it. Today we start with a price chart, a few notes scribbled thereon:
The point I’m trying to make (in as few words as possible) is that FVI is turning into a pretty
interesting precious metals trading vehicle these days. It has volume through both its main
tickers (they both have a three month average of around 250k/day and 1m+ aggregate volume
such as November 1st days aren’t out of the question either) which allows sharp trading and
significantly, it’s been displaying a high beta to its underlying metal, silver, recently. This may be
because FVI is now widely held and covered by the big brokerages, or it may be because at
~$22/oz silver we’re right on (or close to) the inflection price point for the stock that decides
whether the company is a profitmaker or a breakeven/lossmaking entity, but for whatever
reason FVI today is a stock that reacts first and fast to silver moves (up or down) and its
leveraged moves make for an interesting place to play changes in the silver (gold) price.
Recent results
Here’s the revenues vs costs comparative chart, with 3q13 now completed and our best
guesses for 4q13 now pencilled in.
4

The 3q13 numbers filed last week (1) are fairly described as “in line” and in fact, overall they
were very much in line with the forecasts we made in IKN224 back on August 18th (bizarrely
close in fact). The main takeaway is that with $30.2m in revenues, $22.06m in COGS and an
operating income (after expenses, G&A etc) of $2.346m, that kind of revenue generation isn’t
enough to cover the financial side of FVI so the company booked a small loss for the quarter as
expected.
To go into the results a little further, the concise way is to consider the production profile at the
company, then make a few guesses as to what happens next, then come back to the financials.
This chart follows the silver production at FVI (gold, the main second metal, follows but doesn’t
lead and as mentioned previously just taking a direct line through silver production simplifies
things but still gives us a very good idea as to what’s going on at this company).
Fortuna Silver (FVI.to) (FSM): Ag production by qtr
1400000
1200000
1000000
700000
800000 377377468865486296 502835 491181 492773580570 536191
100790
600000
400000
200000
559959 536426484226509897524906 519549 499445493438568722580000
0
5
11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
source: company filings
rtq/gA
secnuo
FVI.to: Revenues vs Costs
50
40
30
20
10
0
San José Silver prod (oz)
Caylloma Silver prod (oz)
6
Production went very well at Caylloma, with a record 568,722 oz Ag from the quarter. However
01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
U$m 24 FVI.to: Net Earnings per qtr
20
revenues
16
COGS
12
8
4
0
-4
-8
-12
source: company filings
01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
source: FVI filings
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FVI: London Fix Ag versus FVI realized Ag price London Fix Ag avg for each quarter, minus FVI Net
U$/oz Ag versus Net realized price, per quarter realized price for silver
35
Net realized $ 5 4.63
30 realized $ 4.18 4.34
25 London fix 4 3.79 3.55 3.85 3.18 3.33
20 3 2.65
15
2
10
5 1
0
0
1q12 2q12 3q12 4q12 1q13 2q13 3q13
source: Kitco, FVI data
11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3
source: FVI data, Kitco

San José came in lower than expected at 536,191 oz Ag due to lower head grades than in 2q13
(sidebar; gold production came in lower than expected at San José due to a lower grading than
expected area mined, now apparently resolved). Next, realized prices for its wares and in 3q13,
FVI booked an average selling price of U$21.30/oz for silver, which was (as usual) very similar
to the London Fix average for the quarter, U$21.37. Once middlemen charges were backed out
FVI reported a net realized price for its silver of U$18.72/oz, which is a $2.65/oz difference and
the lowest that gap has been since San José was opened for business in 2011. That’s a good
thing and augurs well for future quarters.
So overall FVI’s production performance was reasonably good, with the better than expected
numbers form Caylloma cancelling out the slightly lower than expected San José results. As for
selling, under the circumstances of the big drop in silver (and other metals) FVI held up fine and
managed to get a better deal from its customers.
We move now to costs, starting with these two updated charts (we’ve used them before, as with
most of the visuals on display today) showing the individual mine and consolidated results
FVI: Cash costs per metric tonne
100
90
80
70
60
50
40
30
20
10
0
First up, cash costs are now clearly dropping, in both average and absolute terms. On the left
the preferred per-tonne-processed method we use (gets round the moving target that is cash
costs per ounce silver, which is doubly bad for a polymetallic producer) shows the drop clearly
at both mines. On the right, this chart shows the absolute costs in millions of dollars for the
company as well as our “calculated” cash cost (that we do by putting all the relevant numbers
for both mines into the mix) that shows the consistent relationship between the raw data of
tonnage cost and the final amount of COGS put on the P+L sheet. All that simply means that
when FVI processes its tonnes at a lower average cost it shows up directly on its results page
and in a regular, predictable manner, which is exactly what we’d expect from a well-run
transparent company like FVI.
Now for a closer look at the costs compared to revenues and resulting margin of both mines.
Here we get a better idea of how San José comparatively weak quarter affected things:
• On the left we have Caylloma and in 3q13 that mine improved its net smelter revenues
per tonne processed (to $154.18/t) and dropped its cash costs per tonne (to $87.07/t),
6
01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3
source: company filings
tm/$U
FVI: calc. tonnage costs vs reported COGS, per qtr
$m
caylloma 30 tot tonnage calc cost
san jose tot reported COGS
25
20
15
10
5
0
1q12 2q12 3q12 4q12 1q13 2q13 3q13
source: FVI filings, IKN COGS est for 2q13
U$/mt FVI at Caylloma only: Comparing NSR to cash costs U$/mt FVI at San José only: Comparing NSR to cash costs
300 cash costs nsr difference 250 cash costs nsr difference
250
200
200
150
150
100
100
50 50
0 0
3q11 4q11 1q12 2q12 3q12 4q12 1q13 2q13 3q13 3q11 4q11 1q12 2q12 3q12 4q12 1q13 2q13 3q13
source: FVI filings, IKN calcs source: FVI filings, IKN calcs

resulting in a gross profit per tonne processed of $67.11, or if you prefer a gross margin
of 43.53%.
• On the right we have San José and in 3q13 that mine saw lower net smelter revenues
per tonne processed (to $135.75/t) and higher cash costs per tonne (to $72.09/t),
resulting in a gross profit per tonne processed of $63.66, or if you prefer a gross margin
of 46.90%.
Now you’ll notice that the percentage margin of San José is still (just) higher than Caylloma, but
as that one is always billed as FVI’s best/most profitable/most efficient operation is was a
comparatively weak performance. We’d expect San José to re-claim a 50%+ margin in the
quarters to come and that’s because of the production growth in San José going on now. FVI in
its quarterlies made mention that the production growth plans were going as planned and that
the move to the expected average run rate of 1,800tpd would be done by the end of this month.
This means that San José will get a double bounce from a return to average mine grades in
4q13 (and beyond, we assume) and a significantly higher number of tonnes processed and
ounces produced. This optimization of the mine will add to absolute costs but relative costs (per
ounce, per tonne, whatever you prefer) is set to tumble and make the mine a far more efficient
and profitable machine...and at just the right time.
FVI: San José average daily throughput
2000
1800
1600
1400
1200
1000
800
600
400
200
0
7
21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4 tse41q1 tse41q2
tpd
source: FVI filings, IKN ests based on FVI guidance
This goes a long way to explaining why we’re expecting a better earnings and revenues quarter
from FVI in 4q13, as seen above (and repeated here in the same chart, but with Mine Operating
Income (MOI) added for easy viewing of gross
FVI.to: Quarterly Earnings overview
profits). We expect COGS to climb slightly,
50
with the extra cost of running the larger
45
throughput San José somewhat offset by 40
continuing costs saving in other areas. 35
However revenues, even at $22/oz selling 30
25 average (we assume a $19/oz net realized
20
price for silver and slightly boosted gold
15
revenues to help too) will come in much
10
stronger and produce a decent MOI that we 5
estimate at $14.5m. Net (chart above) is 0
slated at $5m at this time which although isn’t
that much of an EPS, (~4c) would show FVI
going in the right direction and gaining kudos
as a profitmaker in a lower silver price regime,
the thing that’s missing from the mix right now.
Before wrapping up, a quick look at balance sheet items. Assets aren’t expected to change
much in the quarter to come while short-term liabilities clicked down nearly $2m in 3q13 to
$15.2m and we expect them to stay that way. This puts working capital on a healthy looking
$65m at ends 3q13 and that’s estimated to rise slightly by the end of the year to around $68m.
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
source: company filings, IKN ests
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revenues
COGS
Mine Op. Income

FVI.to: Debt Breakdown per qtr
60
55 50
45
40
35
30
25
20
15
10
5
0
While on this point, we again mention that FVI has stated in the past that it would like to grow
via M&A and a couple of weeks ago we floated the
idea that Santacruz Silver (SCZ.v) may be a good fit
for the company (or better said, companies in the
plural). FVI does have some cash to throw at that
kind of deal (and has an untapped $40m credit line
waiting in the wings if so desired), but its treasury is
clearly not enough to go out and buy something
outright for cash, so any eventual deal it made
would almost certainly be share-based, with the
potential for a small cash component.
As for those shares out, we’re a touch under 126m
as at 3q13. This count is only likely to change of FVI
goes shopping and buys something.
Below right is the meta-data we track on FVI, the
lines showing the relationship between book value
per share and the resulting ratio with the share
price (snapshot taken at quarter end and this
weekend on the far right). What this shows is a
company that’s steadily adding asset value to its
corporate structure but the share price isn’t
following the trend, probably due to the drop in
metals prices depressing market attitudes towards
miners and the lack of bottom line profits out of FVI
in the last two quarters. The contention is,
therefore, that FVI is due a bounce when the 4q13
results roll around because the missing piece in
the FVI revaluation puzzle looks to me as if it’s
the bottom line profit show. The rebound
process will most likely start with strong
production results reported in January 2014, as
financials for that quarter won’t be known until
the year-end results come along in March and
the type of move I’d look for from the company
is one that takes the blue line back above the
red line (all this is silver price notwithstanding of
course; we assume flat prices in the period of
$22/oz). To get that, FVI would have to see its
share price at $4.57, some 21.9% higher than
Friday’s close, and I think that’s a reasonable
target right now.
8
90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
source: company filings
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FVI.to: Assets Breakdown per qtr
350
LT debt
300 current debt
250
200
150
100
50
0
90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
source: company filings
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fixed
other current cash&ST
FVI.to: Working Capital per qtr
110
100
90
80
70
60
50
40
30
20
10
0
90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
source company filings
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FVI.to: Shares Out
140
120
100
80
60
40
20
0
90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
source: company filings
serahs
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FVI.to: Equity, BV, PPS, ratios
3.40
3.20
3.00
2.80
2.60
2.40
2.20
2.00
1.80
1.60
1.40
1.20
1.00
90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 WON
BV/share
BV/PPS ratio
source: company filings, TSX, IKN calcs

Conclusion
The 3q13 put in by FVI was in line and didn’t wow the market, neither did it cause any sort of
droop. Operationally it’s doing ok in a tough period for miners, but it’s not making any money
for itself or its backers either, it’s not fulfilling Rule One* of any corporation in our capitalist
society. That, however, looks set to change and we won’t need silver to rebound for the bottom
line to improve, either.
I’m not looking at FVI as an investment position any longer, that was a time and market ago.
Today’s FVI offers the potential for a trading vehicle was decently strong positive correlation to
the price of silver and is backed up by fundamentals that have been through a consolidation
phase but are now starting to show lowered costs and promise a significant bounce in
production and cash flow in the near future, all of that covered by a strong balance sheet and
an industry-beating management team.
The near 22% upside calculated as a reasonable target isn’t bad of course, but neither is it the
type of potential gain that would get me to invest money in a junior silver miner right now. The
reward is there, the risks are however high and market weakness for metals would see the
current $3.75 price go straight down the toilet. And that’s the potential trade here, because in a
nutshell FVI and it’s twitchy, high volatility against silver gives us a company that we should be
able to pick off on cheap, downside days if there’s a sudden downshift in silver, the sector and
the stock. You’ll need to believe (dogma, the only way to invest, right?) that the medium term
future for the precious metals does not involve the type of $1,000/oz gold downside targets
that our learned friends the technical analysts are trying to scare the market with at the
moment, because if and when those down days come, it’ll take a certain amount of stomach to
buy an equity when the screaming from the bears about gold’s immediate and permanent
demise is all you hear. There will be other ways of playing such a downside too, not just this
stock, but my contention is that the strong
background of FVI puts it above nearly all other
junior silver producers today and at the same
time, offers the leverage and price fluctuations
that a trader is looking for.
The question of whether to buy FVI today get
the answer “no”. It looks solid, but I’d want to
see the tpye of spike down weakness we’ve seen
on several occasions already for my buying
opportunity, because this is all about snagging a
quick trade win rather than filling my portfolio
with another “good junior” and waiting a few
years. On perusal of the price chart, something
between $3.30 and $3.50 would fit my bill I
think, prices that would probably show up if silver has an off day or three.
That would look good compared to my pencilled-in target of $4.57 (which by the way, looks
attainable as a rough resistance point of recent upmoves) and the gain would be somewhere
between and 30.6% and 38.5%.
The bottom line is that I’m a potential buyer of FVI on price weakness in the weeks to come. If
the price doesn’t show up and the trade doesn’t happen it’s not one that I’m going to lose sleep
about, but if there’s a chance to buy into the sector at lows, FVI offers an interesting option
thanks to its track record and near-term company catalysts.
*make a profit
End Of Report
9

Stocks to Follow
With the very-near-term shorts closed only one of the companies left open at the end of last
week registered a gain, Rio Alto (RIO.to) up a measly two cents. Three others remained
unchanged (SAM.to, DAR.v, NET.v) which leaves seven that lost ground (IRL.to, BTO.to, LRA.v,
EOM.to, DNA.to, TAHO short, FCV.v) and four of those positions locked in double figure
percentage losses, those being Focus Ventures (FCV.v down 13.3%), Eco Oro Minerals (EOM.to
down 12.5%), Dalradian (DNA.to down 11.7%) and Lara Exploration (LRA.v down 10.0%).
Now that those very-near-term shorts are covered we now have 12 open positions on our
‘Stocks to Follow’ list, three less than our self-imposed. Oh look, they’re all red. That sucks.
Company Ticker this week Avg Price Reco date Current PPS Gain/Loss% Notes
Top Picks
Rio Alto Mining RIO.to str buy C$2.30 07-apr-11 C$1.66 -27.8% best LT value
Minera IRL IRL.to str buy C$0.35 22-jul-12 C$0.215 -38.6% top pick called at 24c
Longs
B2Gold BTO.to hold C$3.07 28-nov-12 C$2.44 -20.5% sold 1/2, rest rides. Quality
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.72 -37.4% solid biz model, LT hold
Rio Alto Mining RIO.to str buy C$2.34 07-jun-13 C$1.66 -29.1% added Oct'13 avg down
Starcore Intl SAM.to selling C$0.235 08-sep-13 C$0.20 -17.5% selling, will take small loss
Eco Oro Min. EOM.to hold C$0.55 22-sep-13 C$0.42 -12.7% new trade, st pol risk play
Dalradian Res EOM.to buy C$0.72 27-oct-13 C$0.68 -5.6% new, to add & avg down2
Shorts
Tahoe Resources TAHO short U$13.10 08-apr-13 U$18.76 -43.2% port hedge, easy2b short
Smaller/Riskier
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$0.08 -20.0% drilling again soon
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
First Majestic AG nov'13 U$11.51 07-nov-13 U$10.50 8.8% v near term short, closed
Fortuna Silver FSM nov'13 U$4.00 07-nov-13 U$3.68 8.0% v near term short, closed
Primero PPP nov'13 U$5.70 07-nov-13 U$5.75 -0.9% v near term short, closed
2009, 2010, 2011 and 2012 closed positions in appendices below
10

Now for some notes on a selection of the above stocks.
First Majestic (AG), Fortuna (FSM), Primero (PPP): Short positions covered. On Friday
FSM finished at U$3.60, AG at U$10.63 and PPP at U$5.76, so unless I’d got really cute and
sold at juuust the right spot early Friday morning, it turns out there wasn’t that much of a
difference between when I sold and now no matter what gold and silver bullion prices might
have done. And the reason to close the trades? I took a few “why now?” mails, but it was made
clear all the way that the set-up was very-short–term and even though I don’t really like being
so quick and flippy with positions, I was always going to respect that.
The result is a person walking away with two small wins and one very small loss (see Appendix
1). Not one of life’s great trades booked and once commissions have been covered, the profit
isn’t anything to write home about either. What it did was to offer a little downside protection
during a rough week and that’s that. Primero was the worst of the short positions, as its
performance was boost by good quarterly results for 3q13 published last week (one of the few
quarterlies that have been genuinely good and made a positive difference to a junior producer
stock price so far this season), but I suppose that’s why I bought a basket of things, rather
than just one stock. The AG and FVI positions did OK, and although they came up slightly short
to the ~10% profit target that I’d mentally guesstimated, no complaints are due. Right, case
closed, time to move on to slightly more important things.
Starcore International (SAM.to): Still selling. We still haven’t seen my kind of selling
price, it’s still on the open list. SAM went
Oz Au SAM.to: Gold produced vs sold
through the same wringer as the rest of
7000
them and traded as low as 18.5c in the
6000 gold prod
week before staging a recovery. That
gold sold
rebound Friday was mostly due to the 5000
news out Thursday evening (2) which 4000
announced just the type of production 3000
increases we’d expected from the
2000
company. This chart shows that in context
1000
with the last few quarters (and assumes
0
sales = production) by estimating gold
july.12 oct.12 jan.13 apr.13 july.13 oct.13est
production only (SAM gives tonnage,
source: company filings
grade and recovery data, so we should be
pretty close
The 6,291oz gold produced (AuEq is 6,921oz, once the minor silver revenues are added) is a six
year record for the mine, which might be what
$m SAM.to: Quarterly Earnings overview
the company shouted at us in the NR headline
10
revenues COGS mine op earnings
but it’s still a good thing. If we then make 9
some assumptions about the selling prices for 8
7
gold and silver (using the London Fix averages
6
for the period, $1.337/oz gold and $22/oz 5
silver) then costs that come back to $5m from 4
3
the unexpected blowout we saw last quarter
2
(and assume that extra load was a one-off 1
due to reasons previously discussed) we get 0
this sort of financial performance from SAM.to. oct.12 jan.13 apr.13 july.13 oct.13est
source: company filings
In other words that should leave the mine
profitable to the tune of $4.3m for the quarter just passed, which would mean in turn that a
bottom line EPS of 2c would be a perfectly reasonable assumption to make (143m S/O, $2.9m
bottom line once corporates and tax has been paid).
Tahoe Resources (TAHO): The highwire act continues, with other market watchers now
noticing the way in which TAHO has managed to defy the gravity effect of all other large silver
11

plays out there and looks overcooked pricewise to all the peers you’d care the mention. As
there are three new things to consider in the TAHO story, please see ‘Market Watching’ below
for the more extensive bit on the company, as it saves space here.
Dalradian Resources (DNA.to): I was happy to see this one slide significantly on Thursday,
tried to get a bit of low 60s addition Friday morning (nothing doing) but managed to drop the
cost average a couple of ticks by adding a few
later in the day. Still nothing big, though.
I want to underscore that this one is different,
ladies and gentlemen. On this one I am
indeed going to use the Casey Research line in
investment blather that says when things go
up it’s great but when things go down it’s also
great, for the opportunity and all that.
However, unlike that house of male bovine
excrement purveyance, I’m not going to hide
behind all my price weak trades with the line,
but use it selectively. This is the selection. I’m
in the portfolio fund position which lets me
add small slices at opportune moments in
DNA, so for the time being and with the market as nervy and downright horrid as it is, it makes
sense to fish for the discounted numbers.
On the fundies side, what we’re now looking for from DNA is news of the permits granted to
develop and explore underground. They should be with us very soon and may go some way to
allay worries about the Northern Ireland risk that I’ve picked up form a few quarters. I think
those fears are way overstated, personally.
Rio Alto Mining (RIO.to) (RIOM): It was nothing massive, and the late week sector slump
affected RIO.to just like all others, but the action we saw in the stock last week was certainly
better to the non-stop bid hitting in
October and there’s at least a straw to
grasp upon now and what looks like a
bottom forming. Once all dust had
settled RIO finished the week up 2c,
better than most other juniors though
we should add that last week’s gain is as
much about the previous week’s
weakness than anything else. Still, up’s
better than down and its minor gain
beats the weekly 2% drop seen in both
GDXJ (the juniors ETF) and GLD (the
gold bullion ETF).
In fundies news, RIO.to is scheduled to
report this Wednesday coming, November 13th, though we hear that the numbers may possibly
get filed the day before on Tuesday. Whatever happens, be clear that we’re going to run a full
NOBS update on our single biggest position and Top Pick in IKN237 next week, plus if there’s
anything of urgent note that we haven’t anticipated as yet (to the upside or downside) you’ll
get a Flash update to the effect on the day.
Eco Oro Minerals (EOM.to): Ugh. EOM is now suffering from the lack of news about the
Páramo border decision, though we need to point out that 1) volumes aren’t that big and 2) a
decision that’s positive for the company will send the stock just as high as it might have done
before, it’s just that we’ll see a bigger percentage change. The question now is whether to risk
some more cash, add a few and average down. It’s getting into a tempting price zone and it
12

wouldn’t be a bad strategy for those so inclined to the risk/reward balance, but personally I
think I’ll wait a few more days, either for the decision to beat my greed glands or for an even
cheaper price.
B2Gold (BTO.to) (BTG): We will focus on our publication’s subject matter and steer clear of
the infinitely more important story of human suffering (3) caused by last week’s events in The
Philippines that you’re bound to hear about from a hundred other outlets. Here’s a map (From
Friday evening) that shows the path of Typhoon Haiyan (Yolanda) as it crossed the Philippines,
a good one because it also shows the areas where the highest winds and rainfall were
recorded. I’ve drawn in a blod to note the location of B2Gold’s (BTO.to) (BTG) Masbate mine
(as noted on the blog Thursday (4)).
It’s safe to assume there will be damage to the mine, the most probable effect being a flooded
pit (which would take a little time to put
straight, but wouldn’t be a serious matter bar
a few lost days of production) however still
we need to watch for BTO NRs on this event
because something more serious may have
happened. At the moment I’m best-guessing
from the information supplied by weather
people that Masbate missed the worst of the
winds but suffered a serious rainfall
dumping.
In trading news the stock did this, which
kind of sucked but wasn’t any different from
the rest of the sector, really. The late-Friday
rebound seems to coincide with the time
early reports would have come in of a “no lasting damage” message from Masbate.
Network Exploration (NET.v): We haven’t said much about this tiny position for a while,
because really there hasn’t been much to say. To give you an idea, this is the “subsequent
events” section of its latest MD&A (reporting to end Aug’13) which was published October 30th:
1.15 Subsequent Events
During the period from September 1 to October 30, 2013, the Company:
a) Received an unsecured loan from a director for $200.
Yep, that says two hundred dollars. They must have been short of paperclips or coffee or
13

something. Or perhaps this section:
1.6 Capital Resources
At August 31, 2013 the capital of the Company consists of cash in the bank and HST recoverable
totaling $1,694. The Company will have to generate additional cash from equity raised through
the Canadian public markets to meet its commitments.
Ok, you have the idea by now, so it’s time to explain why we’re sticking with this open position,
at least until the end of the year, and allowing for some patience.
1) Monetarily, it’s a very small amount of money that makes no odds either way to me.
The percentage loss on the board of 50% is kind of shouty, but it’s no big deal really as
a mere 0.5c move will stick it back to UNCH
2) Traded volumes are very low, so it’d be difficult to get out smoothly and it therefore
makes plain common sense to wait until there’s a bit more interest in the stock. On the
other hand, if it’s eventually frozen by a NES listing it makes no odds because volumes
traded won’t change (and also, see 1 above).
3) We hear off record that serious and credible moves (rather than blow-smoke-up-bodily-
passages moves) are happening that will bring enough cash into the company structure
to allow the drills to turn on its Picha JV target. I doubt the cash injection will be a
market mover for the share price, but it will allow the explorer to explore and in the
end, that’s why we’re here betting on a crapsroll drillplay at a tiny market cap. Time will
tell whether the deal will close successfully but if it does, I’m told that Christmas/early
New Year should be the time it’s done.
There continues to be very little to lose on this trade and it’s ok to have a high risk diceroll
position in your junior port. So it stays.
The Copper Basket
After forty-five weeks of 2013 The Copper Basket is showing a 28.20% loss to level stakes.
company ticker price 1/1/13 Shares out Market Cap current pps gain/loss%
1 NGEx Resources NGQ.to 3.40 168.66 308.65 1.83 -46.2%
2 Augusta Res AZC.to 2.43 144.35 277.15 1.92 -21.0%
3 Lumina Copper LCC.v 9.43 43.61 235.93 5.41 -42.6%
4 Copper Fox CUU.v 0.83 402.96 193.42 0.48 -42.2%
5 Reservoir Min. RMC.v 2.41 41.68 178.39 4.28 77.6%
6 Hot Chili Ltd HCH.ax 0.72 297.46 148.73 0.50 -30.6%
7 Nevada Copper NCU.to 3.50 80.5 135.24 1.68 -52.0%
8 NovaCopper NCQ.to 1.80 53.02 104.45 1.97 9.4%
9 Panoro Minerals PML.v 0.62 204.71 77.79 0.38 -38.7%
10 Western Copper WRN.to 1.39 93.68 65.58 0.70 -49.6%
11 Curis Resources CUV.to 0.70 63.13 35.98 0.57 -18.6%
12 Candente Copper DNT.to 0.375 122.05 28.68 0.235 37.3%
13 Oracle Mining OMN.to 0.80 49.03 12.26 0.25 -68.8%
14 Yellowhead Min. YMI.to 0.59 63.45 10.79 0.17 -71.2%
15 Strait Minerals SRD.v 0.08 57.26 2.86 0.05 -37.5%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg -28.20%
Another 2.67% lost from The Copper Basket average last week as it drags back towards the
nasty -30% line. Six of our basket stocks (NGQ.to, LCC.v, HCH.ax, NCQ.to, DNT.to, YMI.to)
registered gains while the other nine lost ground (AZC.to, CUU.v, NCU.to, WRN.to, PML.v,
RMC.v, OMN.to, CUV.to, SRD.v). All the big moves were to the downside, including the drops in
14

Oracle (OMN.to down 16.7%), Strait (SRD.v down 16.7%), and Nevada Copper (NCU.to down
9.7%).
Copper Basket 2013 average, weekly
12%
8%
4%
0%
-4%
-8%
-12%
-16%
-20%
-24%
-28%
-32%
15
ht6naj ht02 r3bef ht71 r3ram ht71 ts13 ht41 ht82 ht21 ht62 ht9 dr32 ht7luj ts12 ht4gua ht81 ts1pes ht51 ht92 ht31 ht72 ht01
source: IKN calcs, TSX data
31/1/1
morf
egnahc
%
Meanwhile, the world continues to pay the same prices
for copper the metal, the trading range as you were for
the last months. All very strange.
World stocks dropped again last week, with inventories
down an aggregate 6,826mt to stand at 666,087mt. Of
that, the LME dropped by 2.2% to stand at 465,650mt,
Comex was down a whopping 8.9% to 22,534mt and
the difference was made up by the rise in stocks at the
Shanghai Futures Exchange warehouses, up 3.3% to
177,903mt. Of all movements, the most notable was
the 12,600 tonnes that left the Malaysia LME
warehouses. As for cancelled warrants, they stayed at
near record levels, covering 285,175mt or 61.2% of
LME stocks.
Cancelled Warrants at LME, IKN157 to date
70%
60%
50%
40%
30%
20%
10%
0%
751NKI 061NKI 361NKI 661NKI 961NKI 271NKI 571NKI 871NKI 181NKI 481NKI 781NKI 091NKI 391NKI 691NKI 991NKI 202NKI 502NKI 802NKI 112NKI 412NKI 712NKI 022NKI 322NKI 622NKI 922NKI 232NKI 532NKI
source: Cochilco, LME
rof
yrotnevni
EML
%
latot
yreviled
resu-dne
Now for updates on a few of our basket stocks.
NGEx Resources (NGQ.to): NGQ reported on Friday evening (5) and there was nothing out
of the ordinary in its numbers (no news = good news at times like these). One thing that was
made plain by the NR was the 2013 cash burn rate at the company, because it was nice and
clear that the working cap as at September 30th was $18.2m, which compared to $9.7m at the
end of least year and included the $33.3m raised in the round of financing in 1q13. In other

words, NGQ has spent $24.8m on its operations (exploration, G&A etc) in the first nine months
of this year, which includes the fallow Andean winter quarter just behind us. This is not a cheap
structure and simple math suggests that NGQ will have to go back to market either in this
quarter of the first quarter of 2014 in order to raise more for its needs. It’s part of the Lundin
group of companies and as such is likely to find its sponsors, but the dilutive element of the
next round of placements is set to be greater than in 2013.
One extra: There was a lot of print about NGQ in Argentinian press last week (example here
(6), dozens of others to choose from( as Pan Pacific Copper handed in an official communique
to the government about its plans to drill the Filo de Sol project (next to Los Helados and part
of the Vicuñas project territory, but just on the Argentine side of the border) as 40% partner in
the JV with NGQ (60%). It seems that this snippet was seized upon by officialist media as proof
of the government’s commitment and willing for an active mining industry (coming on the heels
of the Pascua Lama freeze) so the story got a lot of column inches.
Curis Resources (CUV.to): CUV also reported Friday, but in this case the interest is in the
MD&A because we’re keen on seeing any progress with the local community and its opposition
to the Florence Copper project. This quarter saw no change in the rhetoric or argument used by
CUV, which is indicative of a company stymied and getting nowhere. Cash burn was low and is
likely to stay that was until some sort of deal (or definitive kick out ) happens.
High pol risk on mining projects is not something confined to Latin America.
Panoro Minerals (PML.v): The thing to take away from this ten day chart is the traded
volumes at the bottom, rather than the in-line-with-others price action of last week. Panoro has
received close to zero traction for its Cotabambas resource update published on the evening of
Tuesday October 29th (7), the subject of our review in IKN235 last weekend, and without
beating about the bush that doesn’t surprise me very much due to the mediocre nature of the
resource as stands. Without market interest PML is going lower and what we saw last week was
precisely that; the market isn’t interested.
Nevada Copper (NCU.to): Another suffering due to a weak 43-101, but the process is now
further down the line than that of PML. On October 3rd when NCU published its open pit
feasibility study (8) the stock stood at $2.22. As stated at the time (IKN231) the feas was both
1) disappointing for its economics and 2) looking to try and BS the market by sleight of hand.
Deceptions detected at the time included mining equipment moved off capex and into
sustaining capex in order to (apparently at least) improve front end payback parameters, or
using $3.33/lb average copper for the first seven years while trying to make out your base case
was with $2.75), others as well. We’re now at $1.68, 24.3% down and prices not seen since the
16

2009 post-crisis recovery period. This drop hasn’t come as much of a surprise either, but the
speed of it has raised my eyebrows (potentially a result of the generally weak market
conditions) and NCU is now starting to have the look of a broken equity. Not good at all in a
world just itching for excuses to dump stocks and go to cash.
The Lottery Ticket Basket
After 45 weeks of 2013 The Lottery Ticket Basket is showing a 30.34% loss to level stakes.
company ticker price 1/1/13 Shares out Market Cap current pps gain/loss%
1 Marlin Gold MLN.v 0.10 680 61.20 0.090 -10.0%
2 Eagle Star Min. EGE.v 0.125 79.13 14.64 0.185 48.0%
3 Fancamp Expl. FNC.v 0.125 177 11.51 0.065 -48.0%
4 AQM Copper AQM.v 0.08 105.57 10.03 0.095 18.8%
5 Bellhaven BHV.v 0.14 136.81 6.84 0.050 -64.3%
6 Tango Gold TGV.v 0.13 76.24 4.57 0.060 -53.8%
7 Inca One Res. IO.v 0.12 34.0 4.08 0.120 0.0%
8 Netco Silver NEI.v 0.125 9.4 3.29 0.350 180.0%
9 Copper North COL.v 0.10 58.7 2.94 0.050 -50.0%
10 Darwin Resources DAR.v 0.20 26.16 2.09 0.080 -60.0%
11 Gryphon Gold GGN.to 0.085 194.64 1.95 0.010 -93.5%
12 Agave Silver AGV.v.v 0.30 21.55 1.72 0.080 -73.3%
13 Glass Earth GEL.v 0.155 105.67 1.59 0.015 -90.3%
14 Rio Cristal RCZ.v 0.025 17.259 0.60 0.035 -86.0%
15 Firestone Ventures FV.v 0.045 36.82 0.37 0.010 -77.8%
Portfolio avg -30.34%
Last week The Lottery Ticket basket saw
just one winning stock, Inca One (IO.v)
25% Lottery Ticket Basket 2013 average, weekly
which moved up a decent 20.0% on 20%
news (see below). There were seven 15%
10%
that remained unchanged on the week 5%
(MLN.v, GGN.to, GEL.v, EGE.v, TGV.v, 0%
-5%
DAR.v, FV) which leaves seven others -10%
-15%
that dropped (BHV.v, FNC.v, AQM.v,
-20%
COL.v, AGV.v, RCZ.v, NEI.v). Worst loser -25%
-30%
was Copper North (COL.v down 23.1%).
-35%
With all that the basket average went -40%
-45%
under the -30% barrier again, as this
chart shows.
Inca One (IO.v): After successfully closing a recent placement for gross proceeds of $695,000
(9) (10) IO.v got more cash for its coffers last week when UK fund GRIT agreed to add $1.2m
to the structure via a share swap deal (11) that will close once the fund goes public on the UK
stock exchange (due to be soon). GRIT is the new main fund of the London RDP Fund
Management LLP (12) and here’s an excerpt from this report (13) that gives a little more on
what they want to do:
The Global Resources Investment Trust (Grit) will invest in a concentrated portfolio of
around 30 stocks with a market cap of under £1 billion and managers David Hutchins
and Kjeld Thygesen, formerly of NM Rothschild, will aim to ‘act as a catalyst for
change’ at companies where they feel it is needed.
In other words, it’s a new-on-the-block source of financing for juniors that’s looking to cash in
17
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 ht72 r3von ht01
source: IKN Weekly data, TSX
2102/1/1
morf
egnahc
%

on what they believe to be the low end current distressed prices for sector equities. I hope
they’re right and it’s notable that RDP/GRIT have had this idea in incubation since the beginning
of the year but only now are they moving into action (the IO.v deal is one of several they’ve
done in the last few weeks, for example it’s similar to this deal with European Uranium (14).
In IO.v, GRIT seems to be betting on the company being able to do the same as Dynacor
(DNG.to) and getting its Chala project up and running to be a margin-efficient, low risk toll
milling operation in the South of Peru, around the same Nazca region as DNG. This makes
sense businesswise, but as mentioned before on these pages I have big moral problems with
any model that uses concentrates from the Madre De Dios region of the Peru Amazon basin so
I’ll be avoiding this play too. Those with less worries on that score may want to look closer.
Regional politics
Mexico: Mining companies start spinning the royalty law
I laughed my sardonic laugh when reading this report in BN Americas (Spanish language) (15),
because before the 7.5% +0.5% royalty law was passed, the mining industry was of one voice
in telling the world of the impending disaster it would entail. But now (translated) “Mining Tax
In Mexico Will Help Gain Community Backing For Projects”. The title come from GORO’s Jason
Reid who said as much during his company’s 3q13 conference call last week. How it works now
is that as 50% of the royalties levied go to local government, this will help new projects get
rooted in as locals know that they’ll benefit economically...or something like that.
I wonder how long Reid has actually spent in the country where his mine is located, or whether
he speaks Spanish.
Guatemala: Marlin Mine
Goldcorp’s (GG) (G.to) Marlin mine has always been a controversial subject in Guatemala, with
locals strongly against the company’s presence and always ignored, while the company remains
with firm backing from the national government
This weekend your author received a mail that talked of locals complaints that cracks and
fissures have recently appeared in agricultural land in the immediate area around Marlin and
hundreds of villagers are now protesting. However, apart from one local reporter tweeting the
news (16) (with a photo of one of the 13 alleged damaged buildings here (17)) so far the news
has been basically impossible to come by in media channels. And this is what this small piece is
about, as rather than a problem that’s likely to close the Marlin operations (it’s not), I just want
to use the example in order to comment on a larger matter, the way in which Guatemala seems
to successfully lock down its media and avoid all public comment on things which don’t suit its
foreign relations or economic policy.
Nicaragua: Gold to be country’s top export in 2013, with more to come
An interesting report in Nicaragua’s national paper El Nuevo Diario last week (18), in which the
VP of the Nicaragua Chamber of Mining (Caminic) confirmed the assumptions made at the
beginning of this year, that gold would be the country’s number one export for the first time
ever. With two months’ worth of data left to collect, estimates are firming up and the country is
now fairly confident of seeing U$430m in exports from around 300,000 ounces gold (most of
that from B2Gold mines Libertad and Limon, along with Hemco’s Bonanza mine)). This beats
the $422m and 257.5k oz recorded in 2012 and also puts the export above Nicaragua’s
traditional big export products of coffee and beef for the first time.
The other interesting aspect, probably more interesting in fact, is that the Daniel Ortega
government is obviously keen on promoting more formal mining because the government
target is to produce as a country 1.18m oz gold per year in five years’ time (19). Now,
18

quadrupling production in just five years may turn out to be ambitious and unattainable, but it’s
a clear marker as to intention and that’s what we, the junior speculator, should care about
here. Nicaragua has proven itself to be a miner-friendly jurisdiction in recent years and clearly
wants to stay that way.
Chile: Bachelet already making soothing sounds to the mining industry
The pragmatic end of the Chilean business world have already discounted that Michelle
Bachelet will return as President once the election cycle is done (she may win in the first round
in November, we might have to wait for the run-off, but a lock is a lock) and the lobbying for
good position with the de facto President-elect has already begun.
Her response to her polls surge has been to back off quietly from some of the policy promises
in the upcoming government, after hearing from several sides that at least a few of her pledges
are unworkable and as a whole probably unaffordable. When it comes to mining, the noises she
made a few weeks ago about changes to State burdens have not seen any follow-through and
policy remains vague, which is being welcomed as a pragmatic “she’s not going to do that much
after all and can’t say so yet” by the industry (20). In the words of one high ranking mining
executive quoted in this report, “There’s no fear of big changes in the mining industry”, under a
new Bachelet government.
We’re still in the campaign season and rhetoric is running high, with the right wing trying to
paint Bachelet as some sort of raging lefty. That strategy has been unsuccessful because 1) she
isn’t 2) “left wing” in Chile is a very different and milder thing to left wing in most other South
American countries and 3) people know her as President and it’s tough to whip up fear when
the clear track record is that of a business-friendly moderate.
The bottom line here is that the mining industry should have little to fear from the Bachelet
presidency it will almost certainly receive in Chile.
Your next potential political risk short in Mexico: Torex Resources (TXG.to)
As mentioned on many occasions, one of the regions I avoid for political risk reasons is
Guerrero State in Mexico, as even though it’s located in one of the “friendly countries” it has a
lot of issues and problems of its own
that don’t make it happy hunting
ground for juniors.
Torex Resources (TXG.to) is a junior
I’ve followed with at least one eye
since its inception (when it was called
Gleichen) and even made a few
pennies on a trade with it once. As
this price chart shows, it’s seen a bit
of a stock hit in recent weeks and
Friday’s close of $1.00 exact is a long
way down from the 2-handle at the
beginning of the year or even the
recent $1.20/$1.60 trading range, but
it still means that TXG has a market
cap in excess of $600m and that’s a lot for an explorer these days.
So to the issue and to coincide with TXG’s announcement that they’re starting to build on their
flagship Morelos property (21) (to produce a little under 500k oz Au per year over 15 years, first
pour slated 2015) local opposition to the project has got itself organized and is now calling on
Mexico’s Congress to halt development (22). The reason behind the protest is because
according to the 26 page report handed into parliamentarians, the environmental effects of the
project have not been looked into correctly and are unknown at this stage, as is the effect on
social/community relations in the area of the mine.
19

Market Watching
Tahoe Resources (TAHO) (THO.to): The pushback begins
A most interesting analysis report came from a Canadian brokerage last week (and I don’t even
think that very often, let alone say it) when analyst Geordie Mark of Haywood initiated coverage
on TAHO with a sell rating and a CAD$15.25 price target. You don’t see initiation from a Canada
house with sell very often so this is a note I recommend which you can read on this link (23)
(with thanks due to reader ‘BS’ for the forward, appreciated sir). Mr Mark makes mention of the
elevated political risk that TAHO runs in having just a single asset in a controversial location
inside a country like Guatemala, but the main thesis of his short call is numbercrunch based, in
that he believes there’s too much forward now baked into the share price. His argument makes
a lot of sense and although I’ve tried to find a suitable soundbite from his report to paste here,
overall it’s unfair to his well-written and argued thesis to highlight just a few words. Go read the
report and take in the first five or six pages, that should do it.
To add to the above and to answer a couple of subscriber mails on just why I consider the
political risk profile of TAHO so high, I’d like to underscore just one of the reasons why TAHO
may be prone to the type of news that wouldn’t make a gradual change to its stock price, but
send it plummeting in the space of minutes (which would hardly be the first time).
At the moment there is a legal case going through the Guatemala courts re. TAHO and the way
in which its Environmental Impact Permit (EIA) was granted by the government. Those against
the mine state that their formal and correctly submitted objections to the mine (over 300 of
them) had to have been processed and taken into consideration by the government before the
EIA was granted, but in the end the Pérez Molina administration ignored all submissions and
handed over the permit, which the detractors say is illegal. When the case was judged by the
courts it upheld the anti-mine position, a judgement that TAHO immediately appealed. That’s
where we are today, with the appeal now being processed by the Guatemala Supreme Court,
the highest courtroom in the land. Now, we don’t know which way the Supreme Court judges
will lean in their ruling, nor do we know when the ruling will be handed down (these things can
come in hours, months or even over years) but if the ruling comes and if it goes against TAHO
(a double IF, but a scenario that’s still perfectly logical and possible) the most likely effect
would be the immediate suspension of activities at Escobal. And take a wild guess as to how
that might affect the share price of a near-$3Bn market cap silver miner with a single asset in
Guatemala.
Finally, today Sunday November 10th sees a referendum (8) taking place among the population
in Jalapa on whether they approve or disapprove of mining activity in the region. The
referendum is a big one, which has 137 voting stations distributed around 46 voting centres (8
urban, 38 rural) that will be staffed by 548 sworn-in locals, with all people on the electoral
20

register in the region eligible to vote. It’s also been officially recognized by the State, with space
given to notification in the official national gazette, El Diario de Centroamérica (24) for the
official sanction declaration and support for the vote (materials manpower etc) given by the
nation’s Supreme Electoral Tribunal. As Tahoe at Escobal is just about the only mining game in
town in the Jalapa region, this referendum is basically a vote on the presence of this mine.
The vote looks as though it’s being held in about as fair and balanced way possible, certainly
better than the way most of these things are run , with real intent on finding out local public
opinion and a non-skewed question which simply requires the voter to deposit a “Yes” or “No”
paper into the ballot box. The referendum is non-binding and the government can ignore its
results if it so chooses, but if the vote shows a strong rejection for the mining operation it will
at least be fuel to the fire. On the other hand, a roughly split vote or even a decision that
favours TAHO’s presence at Escobal would be a fillip for the operation. That shouldn’t be out of
the question, as the company has always maintained that it has a sizeable section of the local
community on its side. We shall see.
I’ve been over the thoughts behind this short position enough times already, today adds just a
couple more angles and enough has been said. I still find this a very easy place to hedge the
wider market and if it goes much higher, I may take another slice and start moving it up to a
full scale big position.
Lowell Copper (JDL.v) update
We’ve heard little from Lowell Copper (JDL.v) since its IPO and promoter fanfare earlier in the
year (at the time we covered the story closely in IKN219 and IKN220, dated July 2013) and the
stock has done very little in the meantime (it got up to a Loonie, it’s back to 85c, but it’s trading
on very very thin volumes). But Friday saw a NR from the company (25) in which along with
handing back a minor exploration option JDL.v announced it had filed a 43-101 compliant
technical report on its main Ricardo project in Chile. You can go pick your copy up on SEDAR
(8) but here’s a nice image taken from the PDF, the front photo that shows how the Ricardo
property sits in relation to other copper assets in the region, not least Codelco’s massive
Chuquicamata mine. It also draws in lines to show where the main local fault systems run,
which if you recall is one of the prime reasons for geologists to suppose that the “missing”
piece of Chuqui is to be found somewhere on the Ricardo property.
Satellite image of the Ricardo Project area and surrounding deposits of the Chuquicamata Copper
Porphyry District (oblique view looking north)
21

The 43-101 is early-stage and technical in nature (well, it’s a technical report after all) and its
conclusion is that a 6,000m 10 hole drill program costing $1.84m is warranted at this stage,
with 5 holes aimed at the main suspects (on the fault offset location) and five others spread
over different parts of Ricardo. Read the report for more on the exact spots, if you so desire.
Colossus (CSI.to) update
Back in IKN233 we ran a main update on the news that was coming out of the Colossus
Minerals (CSI.to) Serra Pelada mine, which was mainly about the mess being caused by the
criminal investigation into fraud by the ex-leaders of Coomigasp, CSI’s JV partner. Here’s how
that note finished, by way of a quick reminder:
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 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.
At the time CSI.to was at 55c. It’s now 37c (and spent most of Friday at 24c), another 32.7%
down from the time in which we last spoke of it and back then, the subject came up because it
was already 90% year-to-date. We’ve kept an eye on the story since IKN233 (eg last week’s
Regional Politics update) and that, long with the price dumpage, has prompted another round
of mails of the “is there a trade here?” variety. As this is a stock/story I’m also very interested
in following, because I think at some point there may be a trade and a win to be had so I’m
watching it carefully, here’s more.
The local newspaper Folha Do Para ran an article last week (26) which did a fair job in
summing up the events of the investigations in the last couple of weeks. The current
directorship of Coomigasp has been suspended and the body taken over by public prosecutors
in order to look into the fraud claims. Accusations now centre around approximately R$54m
(U$23.3m at current forex) in payments to Coomigasp from Colossus which should have
benefitted all members, but were apparently siphoned off to accounts owned either by the
Coomigasp chiefs or people fronting for them. The main part of these payments is understood
to have come at the time Colossus’s stake in Serra Pelada moved from 51% to 75% and
Coomigasp’s proportionally from 49% to 25%, so the people leading the investigation are now
(understandably) looking into accusations of collusion between the two sides in the deal. Here’s
a translation of one part of the Folha Do Para report that talks of national member of congress
Arnaldo Jordy, one of the Brazil politicos local to the case and most involved in trying to find out
the extent of the corruption.
According to Jordy, Coomigasp is also suspected of manipulation of contracts for the
production of gold in favour of the mining company Colossus in the location. This
agreement may have caused multi-million dollar losses to the members of the small
miners’ association. “These are serious allegations which may be the tip of the iceberg
of this close relationship between the cooperative and Colossus,” said Arnaldo Jordy.
On notification, the Minister of Mines and Energy has 30 days in which to send its
findings to congress.
That notification happened on October 23rd, so it’s fair to say that we’ll probably know more
about what the public investigators have found in about two weeks from now. Meanwhile, CSI
officials have reiterated the company position that payments were made to Coomigasp correctly
by the company and that the deal they struck was and is fair to both sides, legal and binding.
As for the next news, that may come in the quarterlies from CSI next week. Although initially
22

scheduled for last week, CSI is now set to release its quarterly filings tomorrow, Monday
November 11th. All eyes on the details and any commentary about problems in the MD&A.
So the big question: Is there a trade here?
The answer to that is “maybe”, now that the price has dropped this low, but it’s still a very high
risk proposition and for there to be a trade, I want to see two specific things in the upcoming
quarterly report (there is no accompanying conference call programmed to my knowledge, but
if they ran one it would be great):
1) Specifically, news on underground development at Serra Pelada, whether the de-
watering work has been carried out successfully, whether tunnel development speed
has improved (for timeline purposes and to gauge whether CSI will be able to mine at
the kind of tonnage rate it wants to process once under operation) and whether it
believes it is on track for a 1q14 commissioning as previously reported.
2) An update on the political community risk situation at Serra Pelada. This can come with
the company’s spin and a dose of rose tinted specs if they prefer, but what CSI needs
to do to my satisfaction is move away from the type of mushroom politic attitude it has
towards its English speaking investor base and towards full and frank disclosure of
issues. The stock hasn’t dropped 90%+ just on a whim and a fancy this year, so it’s
time to put cards on the table, say “XYZ is good, ABC is not so good” and allow the
whole of the market to be able to make an informed decision, not just those parts of
the market who can understand Portuguese and have close ties to what’s going on in
the internal political and social circles.
So in general, what I want from CSI is a new-found dose of transparency because it can’t go on
living in denial while its share price gets crushed the way it’s getting crushed. More mushroom
tactics and I’m not a buyer, more open honest talk (again, to my subjective satisfaction) and
enough good things that can be rescued from a difficult position and there still might be a
successful trade here.
Gold Resource Corp (GORO) 3q13 numbers
On the blog on Friday (27) I noted that I’d found something odd in the GORO 3q13 filings (full
filing found here (28)) and so here we go with that.
What happens with GORO is that every quarter it will tell you how many ounces or pounds of
its metal it sold and at what price. You can then do a calculation and work out what the
revenues should have been and what they end up as being. As the green bar chart on the left
23

shows, there’s always a difference between the “calculated revenues” and the “real revenues”,
with the assumption to now always being that GORO hasn’t deducted its middlemen charges
smelter etc) before disclosing its realized price. That seems to have changed, because in 3q13
the percentage difference between the two figures dropped from the normal large percentage
to negative 0.36%, which is basically zero.
GORO: reported revenues vs "calculated revenues" % Percentage difference between calculated revenues
U$m
revenues 20 and reported revenues
50 total calc revs 18 16.98
45
40 16 14.23 14.11
35 14 12.92
30 12 10.51
25 10
7.94
20 8
15 6
10
4
5
2
0 -0.36
0
1q12 2q12 3q12 4q12 1q13 2q13 3q13
-2 1q12 2q12 3q12 4q12 1q13 2q13 3q13
source: GORO filings source: GORO filings, IKN calcs
On Friday morning when first noticing the change I thought this was something weird and said
as much on the blog, because weird normally means not good in this world of numbers.
However, on further consideration I don’t think it’s something that’s necessarily bad because
GORO has clearly booked average quarterly selling prices for silver ($19/oz) and gold
($1240/oz) that are lower than the average market prices for the month, so it’s more of a
change in company methodology than something nefarious in the report.
The overall situation in GORO hasn’t changed much and I’m still looking at it as in no-man’s
land and a potential re-short if it goes higher. I don’t want to take up too much space here
today so what I’ll do is present the data in chart form without commenting, except for the final
chart which is noteworthy.
GORO: Assets Breakdown per qtr
150
125
100
75
50
25
0
24
01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3
source: company filings
srallod
fo
snoillim
80 GORO: Working Capital per qtr
Bullion
70
fixed
other current 60
cash&ST
50
40
30
20
10
0
01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
source company filings, IKN ests
srallod
fo
snoillim
GORO: Quarterly Earnings overview
45
40
35
30
25
20
15
10
5
0
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
source: company filings, IKN ests
srallod
fo
snoillim
GORO: Costs breakdown
36
revenues
COGS 32
Gross profit 28
24
20
16
12
8
4
0
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3
U$m
cons+dev
exploration
G&A + stock comp
COGS
source: company data, IKN ests

GORO: Revenues vs "true costs"
45 42.31
40.62
40 37.78 35.44 36.49
3 3 0 5 30.01 27.94 29.96 26.6 2 6 7.4329.4 3 1 1.29
25 20.66 20.51 22.52 22.93 21.53
20
13.94 15.91 15.27
15 11.28
9.13
10
5
0
25
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3
U$m revenues
"true costs"
true costs = prod costs + deprec&amort+ accretion + G&A + stock
based compensation + expl expenses + construction & development
GORO: Revs/tonne vs True Cost/tonne
700
600
500
400
300
200
100
0
-100
In just a couple of lines, the GORO problem is that it can’t cover its outgoings under the current
price regime for silver and gold, which shows up in the “true costs” chart and, of course, the
bottom line. It doesn’t matter if your gross
profit number is positive and you’ve moved
the exploration, construction, development etc
expenses to somewhere else on the report,
because you still have to pay for them. Of
you’d like any explanations or comments on
the above charts (all of which have been seen
before on these pages when talking about
GORO, they’re simply updated), feel free to
mail in your question. But this last chart right
deserves its own section:
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3
U$/tonne
GORO: Evolution of profits
revs per tonne
14
true cost per tonne
difference 12
10
8
6
4
2
0
-2
-4
2q12 3q12 4q12 1q13 2q13 3q13
source: company data, IKN calcs source: company filings, IKN ests
srallod
fo
snoillim
op profit
pre-tax profit Net Income
U$m GORO: Gold and silver gross revenues, per quarter GORO: Tonnage mined per month
30 Au revs 90000
Ag revs 80000
25 Credit revs (Cu/Zn/Pb) 70000
60000
20 50000
15 40000
30000
10 20000
10000
5
0
0
1q12 2q12 3q12 4q12 1q13 2q13 3q13
source: company filings, IKN ests for 3q13
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3
tonnes per qtr
source: GORO data
GORO: Cash and ST
60
50
40
30
20
10
0
01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
source: company filings, IKN ests for 1q13

The cash treasury position at GORO dropped bigtime, from $30.4m to $17.6m in the space of
one quarter. That’s an ominous signal for the company and in your author’s opinion must
hasten the decision to cut the overhyped and over-expensive GORO dividend further.
Conclusion
IKN236 is done, we end with bullet points:
• The local referendum on mining in Jalapa, Guatemala today will show us its results
probably tomorrow morning and it’s worth watching this issue. Although the vote is
non-binding, an anti-Tahoe result would raise the pressure on the company again.
• Fortuna Silver is starting to shape up as a potential buy. It took until the very week San
José opened for business and the company announcement back in 2011 for the market
to react favourably, so with San José’s expansion to 1,800tpd now on track and
expected to show its first results in the 4q13 numbers, the production boost along with
more efficient costs regime may take the market by surprise. FVI has had a lacklustre
2013 but seems to be getting its costs under control now, so the trick here will be to
take advantage of any dip in prices. No need to jump in yet, but we like the beta to
silver it shows and these days its liquidity in both Canada and the USA makes it easy to
trade.
• As for Gold Resource Corp (GORO), it’s still in the process of getting its just desserts.
The drop in its cash treasury reported this month is a red flag that even its most ardent
supporters can’t ignore (well they can, but it would speak volumes of their bias and
ignorance if they did) and we’re simply counting down the days before this company
cuts its dividend payment further. It still needs to be higher for me to get me to go
short again, but after reading this quarterly I’d be happy about a short at $6 (if gold
pops and this one runs accordingly), rather than the previously floated $6.50 level.
• I’m still selling Starcore (SAM.to) and as long as gold shows well, I expct to get my
modest-loss selling point of 22c sooner or later. Meanwhile, I’ll be biting at Dalradian
(DNA.to) if given lower prices. These are the kind of choices one gets to make when
there’s a decent cash segment to your trading portfolio, as it brings you flexibility to
play up or down the market.
• I’ll be taking a good hard look at the CSI.to 3q13 report once it arrives, now that the
stock has been crushed down further. Honesty will be its best policy.
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
26

Footnotes, appendices, references, disclaimer
(1) http://finance.yahoo.com/news/fortuna-reports-consolidated-financial-results-000900023.html
(2) http://finance.yahoo.com/news/starcore-posts-six-record-production-210500252.html
(3) http://incakolanews.blogspot.com/2013/11/estimates-are-now-at-least-ten-thousand.html
(4) http://www.incakolanews.blogspot.com/2013/11/your-b2gold-btoto-btg-weather-forecast.html
(5) http://www.kitco.com/pr/1267/article_11082013171619.pdf
(6) http://www.diariolaprovinciasj.com/economia/2013/11/9/minera-canadiense-ngex-financiara-exploraciones-juan-
5863.html
(7) http://finance.yahoo.com/news/panoro-increases-copper-gold-resources-210600947.html
(8) http://finance.yahoo.com/news/nevada-copper-announces-positive-open-200000372.html
(9) http://finance.yahoo.com/news/inca-one-completes-first-tranche-123000955.html
(10) http://finance.yahoo.com/news/inca-one-completes-convertible-debenture-230906122.html
(11) http://finance.yahoo.com/news/inca-one-announces-private-placement-171537416.html
(12) http://www.rdpfm.co.uk/
(13) http://citywire.co.uk/wealth-manager/energy-boutique-launches-natural-resource-trust-with-activist-twist/a653089
(14) http://www.pehub.com/2013/10/11/global-resources-investment-limited-buys-minority-stake-euu/
(15) http://www.bnamericas.com/news/mineria/impuesto-a-la-mineria-en-mexico-ayudaria-a-ganar-respaldo-de-la-
comunidad-para-proyectos
(16) https://twitter.com/erickreportero/status/399214877983535104
(17) https://twitter.com/erickreportero/status/399607099132346369
(18) http://www.elnuevodiario.com.ni/nacionales/301000-oro-generara-us430-millones-divisas
(19) http://www.elnuevodiario.com.ni/economia/294397
(20) http://noticias.terra.com.pe/internacional/latinoamerica/mineria-chilena-fuera-de-la-mira-de-reformas-de-
bachelet,f5eb0b74c2232410VgnCLD2000000ec6eb0aRCRD.html
(21) http://finance.yahoo.com/news/torex-starts-construction-el-limon-100000699.html
(22) http://www.lajornadaguerrero.com.mx/2013/11/08/index.php?section=sociedad&article=006n1soc
(23) http://clientcentre.haywood.com/uploadfiles/secured_reports/THONov52013.pdf
(24) http://www.infile.com/leyes/visualizador_demo/index.php?id=68842
(25) http://finance.yahoo.com/news/lowell-copper-announces-termination-ice-030000211.html
(26) http://www.folhadopara.com/2013/11/ministerio-publico-afirma-corrupcao-em.html
(27) http://www.incakolanews.blogspot.com/2013/11/gold-resource-corp-goro-reports-its-3q13.html
(28) http://www.sec.gov/Archives/edgar/data/1160791/000156276213000360/goro-20130930x10q.htm
Appendix 1: Flash update of Thursday November 7th
Hi all, Thursday 2:45pm local time, an hour and bits before the close.
Just the quickest of notes to say that I plan to cover my near-term trading short positions in First Majestic (AG), Fortuna
Silver (FSM) and Primero (PPP) by the end of today.
Hope this note finds you in good health.
27

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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