IKN #237Premium

The IKN Weekly
Week 237, November 17th 2013
Contents
This Week: Vacation plans, To replace The Lottery Ticket Basket.
Fundamental Analysis: NOBS update report on Rio Alto Mining (RIO.to) (RIOM).
Stocks to Follow: Overview, Starcore International (SAM.to), Dalradian Resources (DNA.to),
Rio Alto Mining (RIO.to) (RIOM), Eco-Oro Minerals (EOM.to), Lara Exploration (LRA.v), Tahoe
Resources (TAHO) (THO.to).
Copper Basket: Overview, Copper Fox (CUU.v), Panoro (PML.v), Strait (SRD.v), Nevada
Copper (NCU.to), Oracle Mining (OMN.to).
The Lottery Ticket Basket: Overview, Netco Silver (NEI.v), AQM Copper.
Regional Politics: Colombia’s Páramo decision expected tomorrow, Peru and Honduras sign
mining co-operation agreement, Colombia’s formal precious metals industry remains small, El
Salvador: Why OceanaGold (OGC.to) (OGC.ax) has wasted its money, Guatemala: Another large
march against mining another news blackout.
Market Watching: Thoughts arising from the Sandspring (SSP.v) Silver Wheaton (SLW) deal,
Santa Barbara Resources (SBL.v) drill results, Colossus (CSI.to): Why we wait on sidelines,
Fortuna Silver (FVI.to) (FSM) redux, B2Gold (BTO.to) (BTG) 3q13 financials: In line but not
sparkling.
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
Vacation plans
It’s around this time of year that an early warning goes out, so here we go with the 2013/2014
version. SWMBO* has informed your author that the family will probably be taking two separate
trips during the Southern hemisphere summer vacation period. Four or five of the days are to
be spent in some lush, jungle spot in Northern Peru and later in the period some time spent
between a beach and some capital city-touring with kids into museums, theatres etc. So to the
part that matters for readers and during the non-jungle time you can expect a normal service
for The IKN Weekly, with at the very worst updated numbers and commentary on any
important developments, but the five days when we’re really away (early January) probably
means that there’ll be one Sunday which doesn’t see a Weekly published and sent.
So the bottom line is that The IKN Weekly will start 2014 with one missing edition in January,
plus one (or possibly two) slightly abridged editions later in the month (but nothing big will ever
be missed).
*She Who Must Be Obeyed. Know your Rumpole, People.
An idea to replace The Lottery Ticket Basket
As mentioned in the section on a number of occasions, it’s been clear that The Lottery Ticket
Basket section of The IKN Weekly has been a dismal failure of an idea, even its sector tracker
ability has now become redundant and come the end of this year, the section will be retired.
1

Reader ‘SB’ sent in a mail on Tuesday which touched on several issues, but also pointed
towards a market segment that I’ve been meaning to pay more attention to for some time.
Here’s an excerpt from SB’s mail:
“If we focus our attention away from the juniors or explorers at this time and
look at the producers that have all in costs under $1000 it appears there are
companies that have beaten down stock pricing just as the juniors have,
which one would consider "on sale". It makes sense that these are the
companies that would show signs of stock advancement prior to any junior or
intermediate producer (just my thought). There are 6 producers that come to
mind: New Gold, Yamana, Goldcorp, First Majestic, Silver Wheaton and
Alamos
“Am I off base with my thoughts?”
No SB, I don’t think you’re off-base. He goes on to mention that he doesn’t make much use of
The Copper Basket section of The IKN Weekly and he’d be good about losing that part in order
to cover larger-cap PM producers, in something of the same way. Well SB, I know that The
Copper Basket isn’t for everyone but I also know that a decent portion of readers use it and like
it, so that part is going to remain in the Weekly. However, The Lottery Ticket Basket was an
experiment for 2013 and it’s one that hasn’t worked out, so that is being cut next year.
Which brings up the idea that perhaps we can run a basket that at least raises awareness of the
larger-cap producers on these pages. What say you, people? A good idea as a replacement for
The Lottery Ticket Basket? We could put together a list of ten or 15 bigger caps, including the
ones mentioned by SB along with others (suggestions please) and although we might not give
them the type of full coverage you get on larger miners in other spaces, it would at the very
least allow us to track their performance and give reason to cover the more important sector
events and news.
This isn’t an idea fixed in stone yet and I’m very keen to get reader feedback on this
before making any decision. You know the mail address, so if you think this is a good idea, a
bad idea or an idea that could be improved by adding X, drop me a line. And thanks in advance.
Fundamental Analysis of Mining Stocks
This week we return to look at our Top Pick, Rio Alto (RIO.to) (RIOM).
NOBS fundamental report dated November 17th 2013
Rio Alto Mining Ltd. (RIO.to) (RIOM)
2

Company Overview
Rio Alto Mining Ltd. (Canada: RIO.to, USA: RIOM, Lima: RIO, Frankfurt MS2.f) is a producing
junior gold mining company operating in Peru. Its flagship property is the La Arena gold mine in
the Libertad region of Northern. Current share structure is as follows:
Shares out: 176.748m
Options: 7.022m
Warrants: zero
Fully diluted shares: 183.77m
Current share price: $1.78
Market Cap: $314.61m
Approx cash per S/O: $0.22
All prices are in Canadian dollars unless stated. Forex U$1=CAD$1
Today’s report
In today’s NOBS update on our Top Pick, perhaps most closely covered company and author’s
personal largest single junior mining holding, we take in the main points from the recent
production results and the financials reported last Wednesday morning (1), add it to what we
already know, consider the late-2013 panorama for the gold mining market and make
adjustments to our target price for the stock. So on with the show and before diving in to the
numbers, let’s state the case clearly:
• Rio Alto (RIO.to) (RIOM) delivered a very good quarterly result, period. I know it’s my
favourite junior gold, I’m long the stock and it’s my idea of screaming value at current
prices and so I’m open to accusations of talking book, but any way you look at the
numbers posted they’re good. I’d go as far as to say they’re the best set of results
handed in by any junior this reporting season.
• Costs dropped significantly, both in absolute dollars and in cash cost per ounce terms,
which are fruits of its labours of site preparation, pre-stripping/cutback, plant
improvements etc earlier this year.
• Production went from low to high and is set to continue at the same rates in the quarters
to come, as guidance was clear and positive.
• Free cash flow good, operating profits good and perhaps the key of all, profits now
flowing well to the bottom line. Just the 9c quarterly EPS gives a straight line forward
P/E ratio of 5X, but that’s likely to be blown away by even better profits in the quarters
ahead.
OK, that’s the case stated clearly, now for some details.
We start with production. This is a chart we’ve used before, it shows the the record production
quarter we’ve just seen (59,157oz) and it
also has, unchanged, our forecast for RIO.to: Gold production and forecast for 4q13
68000
4q13. From information gleaned (fwiw 70000
once again your author’s reliable source 60000 55973 58081 56511 59157
48467
located close to though not inside the La 50000
Arena mine) we hear that RIO sold 22.3k 40000 36355
30548
oz gold during the month of October and 30000
output, boosted by strong gold grades,
20000
has been running strongly this month as
10000
well. There’s every reason to expect a
0
full-scale blockbuster of a quarter in 4q13
and with guidance likely to track up for
2014, every quarter will be a winning one
next year.
This monthly breakdown chart that includes best guesstimates for the two months left this year,
does a good eyescan job of illustrating just how production has picked up from the 1h13 slow
period.
3
21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
Oz Au
source: company filings, IKN ests

RIO.to: Monthly gold production figures
27500 25616
25000 24401 24000
2230022000
22500
20144 19560 20184
1 2 7 0 5 0 0 0 0 0 16692 17639 154261509 1 1 599 1 8 7039 15635 15431 18109
15000 12887 1379133670 12897
11871
12500 1071210114
10000
7500
5000
2500
0
4
21naJ bef ram rpa yam nuj luj gua pes tco von ced 31naJ bef ram rpa yam nuj luj gua pes tco von ced
Ozt Au
source: MEM/IKN ests for 4q13 months
It’s set to stay that way and in 2014, we can expect months to average around 20k each. We
hear there will be a small spike in strip ratio during
1q14, as there’s a small area of waste to move out
RIO.to: COGS
in order to make life easy in the future, but apart
from that small and temporary costs spike, from 40 36.175 36.712 36
33.795
35
that point and through 2014, 2015 and into 2016 30.918
29.193
RIO at La Arena will be running the same type of 30 25.273 26.545
25
strip ratio and costs that we’re seeing in these
current quarters. 20
15
And on that subject, let’s move to costs. For his 10
3q13 guesses, your author had taken a look at 5
recent quarter cost results, factored in the 0
increased production, thought on the fuel price
hikes seen in Peru during the period, subtracted
some for the “we’re cutting costs” statement
made by CEO Black and team and come up with
a best guess of $38m in COGS for the quarter,
some $1.3m higher than in 2q13.
In fact, I was way out. COGS for 3q13 came in at
$33.795m, nearly $3m below the absolute total
for 2q13 which was a much better showing than I
(or most others, mentioned in mitigation)
expected from the company. However, the
improvement really starts showing up in the cash
cost per ounce chart, here below.
RIO cut its bills and improved its production, with
the result that the COGS per ounce total dropped
by $186/oz to $571/oz, the lowest costs profile since 2q12.
[sidebar: as made clear previously, this is not “all in” costs, but used to gauge
cost performance because it gives an easy and reliable comparative, with less
moving parts than the more nebulous “all-in” calculations which are easily
changed (e.g. by quickly cutting exploration budgets)]
But that’s not all. RIO’s gave us some pretty specific guidance on costs for the year in
Wednesday’s NR when stating “” and as we know three quarters to date, the math to work out
where RIO expects costs in 4q13 is straightforward and is shown above. We’re now expecting
costs of $529/oz for 4q13 and that’s a decent margin, even with gold down at the $1,300/oz or
so of today.
21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
$m
source: company filings, IKN ests for 4q13
RIO.to: COGS per ounce sold
1000
869
900 803
800 757
700 640
571 600 532 529
500 452
400
300
200
100
0
21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
U$/oz
source: RIO data, IKN ests for 3q13/4q13

We can put all this together as follows:
$m RIO.to: Quarterly Earnings overview
100 revenues COGS amorts gross profit
90
80
70
60
50
40
30
20
10
0
1q12 2q12 3q12 4q12 1q13 2q13 3q13 4q13est
source: company filings
To cover 3q13 first:
• Revenues were $77.65m, up $13.8m on 2q
• COGS were $33.795m, down $2.917m on 2q
• Amortizations were $8.263m, up $2.6m on 2q (and we’d expect that kind of number
going forward, as more quantity of gold leaves the ground)
• Gross profits were $35,593m, up over $14m on 2q, or 20c/share
That’s a strong quarterly improvement, no matter which way you cut it. However, among the
interesting reactions from the market, your author heard on more than one occasion that “they
need to repeat that in 4q13” in order to prove that it wasn’t a flash in the pan. So here’s how
4q13 is shaping up, using the expected production numbers, the clearly guided costs number
and an average of $1,300/oz gold (for the record, so far in 4q13 London Fix average for gold is
$1,310/oz)
• 4q13 revenues slated at $89m
• 4q13 COGS slated at $36m
• 4q13 amortizations slated at $7m
RIO.to: operating and pre-tax earnings per share
• 4q13 gross profits slated at $46m, or
26c/share 0.30
0.27
0.24
There’s leeway in that gross profit number too, 0.21
so even if the gold price drops further or RIO 0.18
0.15
doesn’t quite get to 68k oz gold sold, it’s difficult
0.12
to see more than 4c/share coming off the 0.09
margins figure. In other words, 4q13 won’t just 0.06
0.03
match 3q13 financials, it’s going to beat it.
0.00
Now for operating and pre-tax earnings, which
we’ll cover by this per-share chart seen in
previous analyses.
In 3q13, there was a big gap between the two
caused by the single black mark in the RIO
quarter, its write-off of the El Colorado project
(that lies to the South of the La Arena
concession), which caused an accounting hole
of $7.261m. This burned the company fingers
because not only have they decided Colorado
isn’t the place for the next mine, but they’d
previously gone ahead and bought the surface
rights from locals. That may get them a bit of
goodwill some time in the future, but the cash
spent on securing the surface ownership is now
5
21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
cents
pre tax eps
op eps
source: company financials/IKN ests
RIO.to: Op. Earnings
65
60
55
50
45
40
35
30
25
20
15
10
5
0
21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
source: company filings/
srallod
fo
snoillim

basically cash wasted.
Anyway, back to the numbers and with G&A now cut to the bone at $1.355m in 3q (low
compared to peers, look around and you’ll see things like Fortuna Silver ($4.95m) or Gold
Resource Corp ($5.5m) or Argonaut ($2.6m) as typical examples) and exploration cut to $2m in
the quarter, we’re not expecting the same kind of breach in 4q. That would set RIO up for a 17c
post-tax EPS for the quarter coming.
It’s round about then we’d expect the penny to drop on RIO and what’s in store for it in 2014.
For the best best of this year, the company has been subjected not only to the headwinds of a
negative gold price and very negative sector sentiment, but also to persistent rumours and a
gossip-mill, centred on the city of Lima, which has tried to convince the world that the company
is losing money at current gold prices. The 3q13 results show (and quite categorically) that it’s
not the case, but once a second quarter comes along with numbers that even improve on 3q13,
then the company states that the quarters in 2014 will deliver the same kind of results, the cash-
generating capacities of RIO.to will be recognized by the wider market and the lie given to those
who’ve been running their whisper campaigns.
In 3q13, treasury at RIO received the first of
many serious additions to come and assuming
the company doesn’t buy something with its
cash, the additions from here on will leave
anything seen in 2013 for dust. However, the
place we’re really going to see change is on the
working capital line item, because as RIO earns it
will also be paying down its debt, not least of
which the forward gold facility which is due
closed in late 2014. And before you study this
working capital chart too carefully, I want to say
that I’ve tried my hardest to keep the
spreadsheet model to the conservative side on
these numbers and have assumed some cost
creep, along with more exploration budget in
2014 than we saw this quarter and a strict $1,300/oz gold price. For example, if you want to be
a little more optimistic than me and play with a $1,400/oz gold price, just add $19m to the 4q13
total and you’ll be close enough.
200 RIO.to: Working Capital per qtr
180
160
140
120
100
80
60
40
20
0
6
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4 tse41q1 tse41q2 tse41q3 tse41q4
source company filings/IKN ests
srallod
fo
snoillim
RIO.to: Cash treasury per qtr
100
90
80
70
60
50
40
30
20
10
0
Indeed, even under a conservative parameter and a gold price that sticks to where it is all next
year, we’d expect RIO to leave 2014 with a working capital of +$166m. The potential to
disappoint on that target lies largely with the potential for gold to slump. However, the potential
upside gravy to that number is strong via better costs than I’ve assumed, better gold price (and
for what it’s worth, far more likely in my opinion). On the subject of balance sheet items, before
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4 tse41q1
source: company filings/IKN ests
srallod
fo
snoillim

RIO.to: Debt Breakdown per qtr
140
120
100
80
60
40
20
0
7
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4 tse41q1
source: company filings/IKN ests
srallod
fo
snoillim
LT debt
current debt
wrapping up the overview and moving to a target price estimate, here are assets and liabilities:
RIO.to: Shares Out
3q13 assets would have come in
200
stronger, but for that Colorada write- 180
down ($7.6m), but going forward (and 160
again assuming no M&A purchases 140
using cash) we’d expect the balance 120
100
sheet to go from strength to strength via
80
the simple collection of cash.
60
Meanwhile, we’re assuming current 40
liabilities will begin to get paid down 20
from the current quarter onwards. 0
Although it’s not easy to second-guess
the way in which a small company
handles its books precisely (working
capital is an easier one to forecast than
the component current assets vs current liabilities), the best guess right now is that total debt
will drop to around $65m come the end of 2014. Sat next to the IKN best guess of nearly $445
in total assets and assuming the share count stays at the current ~177m, that would give us a
Book Value per share of $2.15 (0.83X Friday’s close).
Valuing Rio Alto
Here’s the abridged and simplified September 2013 quarter, along with forecasts for the next
three quarters to come. As stated, we’re using a flat $1,300/oz gold price through 2014 and
assume the share count stays where it is:
Rio Alto: Sep13 and next three quarters
Sep.13 Dec.13 Mar.14 Jun.14
Total sales ($m) 77.7 85.9 69.0 75.5
Cash COGS 33.8 36.0 35.8 34.8
Depreciation 8.3 7.0 7.0 7.0
SGA 3.4 4.0 5.0 4.0
Op income 32.2 38.8 21.2 29.7
Interest 0.0 2.0 2.0 2.0
Workers Part. 2.6 2.9 1.5 2.2
Tax 10.1 8.8 4.6 6.6
Net income 15.9 25.1 13.1 18.8
Shares out 177 177 177 177
EPS $ 0.09 0.14 0.07 0.11
FCF/share 0.08 0.12 0.06 0.09
Sources: IKN estimates
And from that, here’s our box target price:
11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
source: company filings/IKN ests
serahs
fo
snoillim
RIO.to: Assets
500
450
400
350
300
250
200
150
100
50
0
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4 tse41q1 tse41q2 tse41q3 tse41q4
$m
fixed other current
cash
source: RIO filings, IKN ests

Sales and earnings RIO.v Target price & valuation data
Sep.13 Dec.13 Mar.14 Jun.14 At U$1300/oz gold
Sales (C$m) 78 86 69 75 6 month target $2.47 (based on 6x EPS
Sales growth 11% -20% 9% Upside to target 39% year to Jun'14)
EPS 0.09 0.14 0.07 0.11 Mkt cap (C$m) $315 Enterprise value $374
Cash flow 0.14 0.18 0.11 0.15 P/sales (Sep.13) 3.67 EV/sales (Sep.13) 4.36
P/E (Sep.13) 19.8 EV/EBITDA (Sep.13) 9.2
P/E (Dec.13) 12.6 EV/EBITDA (Dec.13) 8.2
P/E (Mar.14) 24.1 EV/EBITDA (Mar.14) 13.3
By using a low 6X P/E ratio (we’ll come back to that in a moment), the target generated is
$2.47, representing a 39% upside to Friday’s close. That’s a long way lower than our target up
to and including today (of course) and as we’ll go on to discuss, there are a whole bunch of
scenarios that generate a higher target price than this, but for the moment and considering the
way in which RIO has been whacked by the market recently, it’s time to set the bar lower and
aim for a number by way of a preliminary target that borders on the dumb, its so reachable.
The mine life issue
These days, whenever I hear RIO.to discussed in polite (or not so polite) company, the question
of its apparently short mine life is quickly raised as the counter-argument to anyone daring to be
bullish the stock. At face value it’s a valid worry for anyone going long and investing in today’s
RIO, because at the moment the oxide gold mineral is due to run out in 2017 and as things
stand today, there’s no obvious route for further production from the company. This is
something I’m aware of and it’s wholly due to this that I’ve decided to cut the P/E multiple to a
nigh-on stupid low of 6X in order to acknowledge current market sentiment. However, I also
think the argument against RIO on this score is almost certainly a crock and here are a few
reasons why:
1) The Stage two sulphide project is almost certainly economic, and likely to be strongly
economic. We’re in a bit of a flux on this at the moment, because RIO.to has decided to
delay the publication of the feasibility study (FS) until 2q14 in order to go through as
many cost-production options as possible. I know that the company is keen to cut the
currently slated ballpark capex of $300m as much as possible, and could do so strongly
if a plan that would limit expansion further down the line is chosen. There’s a trade-off
effect in play, so what I imagine is that eventually RIO will go for a plan that costs
around $250m to $270m to built and gives a decent (i.e. 20%+ IRR) return. The bottom
line here is that we’re going to have a question mark hanging over the stage 2 plans
until mid-2014, but when we get the plans we’ll either have a strongly positive project or
we’ll have one that can be put on the back burner (and the cash used somewhere else).
We’re not going to be subjected automatically to an economic mediocrity just because
the plan is the plan.
2) RIO is going to collect cash in the time being. The new lower cost mine plan for the
oxide gold is now showing its worth and 3q13 is just the first taste of many strongly
profitable quarters to come. As long as gold stays at $1,300/oz (anything else is bonus)
RIO is going to run through three years of strong financial results and at the end of that,
will have a balance sheet worthy of envy. Whether that balance is held in cash on in
assets, as sulphide stage 2 (or other) is built out using cash flow, remains to be seen.
But the new plans and improved costs schedule indicate a company that can indeed
cover whatever new capex bill it decides to take on.
3) La Colorada has turned out to be a bust (at today’s gold prices) but there’s still a whole
range of exploration targets at the wholly owned La Arena concession.
4) Not only that, but RIO has shown its willing to participate in JVs on early stage
exploration projects (Duran , Santa Barbara) to look for its next mine. Four years is
more than enough time for a company that took just two to build La Arena to bring its
next operation online.
5) RIO has stated that it will be active in the M&A sector in the next 12 months. That in its
simplest form is a company saying that it will buy another mining company, be it small,
medium or large, in order to keep mining.
8

6) You might have noticed that there are a lot of distressed exploration stage junior mining
companies out there, with assets to vend, share prices in the dumps and nobody
wanting to do deals. For a company looking to expand and add its next asset, there
couldn’t be a better form of buyers market right now and with RIO now making strong
profits, it’s going to have the wherewithal to go shopping.
7) Finally, the most general yet probably most important point. This whole subject of short
mine life has been wildly overblown. After all, we’re not talking about a bunch of mining
failures here, we’re talking about a teams that’s been extremely successful in building
and operating its mine, starting from scratch a few short years ago and putting together
a major success story. If you think that happened by pure luck then fine, personally I
think that success begets success and when you stumble upon a company that’s
trustworthy and hits all its forecasts and guidance along the way, it may well be in our
best interest to trust them to continue hitting their marks and ignore those who bet
against winners.
All the same, I am at present going to tip my hat to the apparent weakness in the RIO story, that
of mine life. No matter that the company is on course to collect roughly $2/share in cash asset
value by the time the oxide deposit runs out, let’s assume that there’s a risk nothing follows on
from the current ops and those seven points above all turn to dust. We do this by choosing the
aforementioned 6X P/E ratio, which is a very low one compared to any peer you care to mention
(we congratulate Argonaut (AR.to) on its 4c EPS in 3q13, and 17c EPS in the first three
quarters of 2013, which suggests a P/E ratio of 25X at present...nice work if you can get it) and
cutting the multiple of earnings to target to address those mine life fears. And even then and
even with a $1,300/oz gold price, we are offered a 39% upside to target.
But wait, there’s more.
Target sensitivity
There’s more because I firmly believe that once the market notices that the corner has been
well and truly turned by RIO, it will be ab le to command a more reasonable P/E ratio and as
such, its share price will grow rapidly. This chart shows where our $2.47 target sits compared to
other targets if gold price and P/E variables change.
Rio Alto: Target sensitivity at various gold price & P/Es
Avg Au Target at 10X Target at 8X Target at 6X
(U$/oz) PE PE PE
1200 3.69 2.95 2.21
1250 3.91 3.12 2.34
1300 4.12 3.29 2.47
1350 4.33 3.47 2.60
1400 4.55 3.64 2.73
1450 4.76 3.81 2.86
1500 4.97 3.98 2.98
source: IKN calcs
As you can probably see, RIO will benefit from a higher gold price in the intermediate future, but
the real benefit will come from a company re-rating and a higher given multiple to earnings. For
example, if RIO remains on a 6X PE and gold goes to $1,500/oz, its target is lower than if gold
stays at $1,300/oz and RIO gets enough market love to take it back to an 8X PE.
In the above table two boxes have been coloured in; one is today’s newly adjusted target, the
other combines a $1,400/oz gold price with a 8X P/E to give up a target of $3.64. That
represents an upside of 104.55 to Friday’s close and I wouldn’t bat an eyelid to see RIO.to there
again in the next six months if the market turns its way. All it would need is a modest rebound in
the price of gold and a renewed interest from the market in paying a more reasonable (though
still cheap) multiple for the company, which might come on the back of approval for new mine
plans, or maybe from the approval of the stage two sulphide project, or maybe simply because
RIO.to gets deserved recognition as a serious cash collector by mid-2014. Whatever way, I
9

want to underscore that today’s adjusted $2.47 price target is set as a mere stepping stone on
the way to better and more sensible valuations down the line; all RIO needs is a little market
fortune.
Conclusion
Rio Alto Mining (RIO.to) (RIOM) put in a sparkling 3q13 and will do the same in 4q13 as well.
We’re going to have to assume gold averages $1,300/oz and doesn’t fall any further, but with
that caveat aside once people realize that these quarters are the start of a new trend and not
just a passing fad, RIO.to will rebound strongly from its current sub-$2 price levels. It gets to the
point where I wonder to myself what different combination of words can be used to say “this
stock is very very cheap right now, please buy and own it”. Top Pick, screaming bargain, end of
story.
End Of Report
Stocks to Follow
Four of our twelve open positions made gains on the week (RIO.to, RIO.to trading, EOM.to,
FCV.v) and another was unchanged (NET.v), which leaves the other seven as weekly losers
(IRL.to, BTO.to, LRA.v, SAM.to, DNA.to, TAHO short, DAR.v). Of those, biggest percentage
moves were the losses in Starcore (SAM.to down 15.0%) and Darwin (DAR.v down 12.5%). In
other words, if it weren’t for the decent rebound in Rio Alto (RIO.to up 7.2%) it would have
been a negative week for the account, but as it turned out it was OK-ish.
We currently now have 12 open positions on our ‘Stocks to Follow’ list, three less than our self-
imposed. They’re still all red and that still sucks.
10

Company Ticker this week Avg Price Reco date Current PPS Gain/Loss% Notes
Top Picks
Rio Alto Mining RIO.to str buy C$2.30 07-apr-11 C$1.78 -22.6% best LT value, tgt $2.47
Minera IRL IRL.to str buy C$0.35 22-jul-12 C$0.21 -40.0% top pick called at 24c
Longs
B2Gold BTO.to hold C$3.07 28-nov-12 C$2.37 -22.8% sold 1/2, rest rides. Quality
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.66 -42.6% solid biz model, LT hold
Rio Alto Mining RIO.to str buy C$2.34 07-jun-13 C$1.78 -23.9% added Oct'13 avg down
Starcore Intl SAM.to selling C$0.235 08-sep-13 C$0.17 -27.7% selling, will take small loss
Eco Oro Min. EOM.to hold C$0.55 22-sep-13 C$0.43 -21.8% new trade, st pol risk play
Dalradian Res EOM.to buy C$0.72 27-oct-13 C$0.66 -8.3% new, to add & avg down2
Shorts
Tahoe Resources TAHO short U$13.10 08-apr-13 U$18.96 -44.7% port hedge, easy2b short
Smaller/Riskier
Focus Ventures FCV.v spec buy C$0.175 01-jul-12 C$0.135 -22.9% revised tgt 25c
Darwin Res DAR.v hold C$0.10 14-jul-12 C$0.07 -30.0% 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
Now for some notes on a selection of the above stocks.
Starcore International (SAM.to): Still selling. A depressing week for this position, nobody
interested in taking a piece of this cheap, cash flow positive producer and the only moves
downmoves caused by small sellers hitting the bid. The depressing thing personally is that it’s
going to be sold, hook or crook come the end of this month and I’m staring down the barrel of
a crappy exit price now. It’s not a big monetary trade and the % red blotch will hurt the more
than the eventual loss in cash terms will hurt the back pocket. I can afford to wait another
week without any forced sales at this sillycheap price and will do so.
11

Dalradian Resources (DNA.to): DNA reported its 3q13 on Wednesday and the only real
surprise in the mix was this:
That’s not much more than a bit of housekeeping and doesn’t affect the company’s operations
at the flagship Curraghinalt project in the slightest, however. It shows up here in the tracking
charts, for example...
DNA: Net loss, per qtr
20
15
10
5
0
12
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
U$m
source: company filings
...but when its effect is backed out, we
see that DNA had a relatively modest burn $m DNA.to: "corporate vs field" expenses
8
rate in 3q13 as it awaits permits to move corporate field
forward on its underground exploration at 7
Curraghinalt (the final permit is expected 6
soon, though it has to be pointed out that 5
we’re now mid-November and that’s
4
officially late for a permit that still
3
apparently being discussed at
governmental level). As per end 3q13 2
working cap stood at $9.4m, which was 1
slightly higher than our previous model 0
expected but still not enough to avoid a 2q12 3q12 4q12 1q13 2q13 3q13
placement in the near future, as far as source: company filings
IKN is concerned. We’d expect permits-
then-financing as the way DNA would want 50 DNA: Working Capital per qtr
45
to move.
40
35
As for the IKN position, although it traded 30
in a general 66c to 67c range during the 25
20
week and spiked down to 63c on Thursday,
15
I didn’t add any extra to the position. Still 10
looking for a bargain share price to add 5
another tranche and average down a bit 0
more, however.
Rio Alto Mining (RIO.to) (RIOM): Done above in Fundamentals today, here we note that
RIO.to stock finally managed to buck the trend and rebounded under its own steam while the
rest of the juniors sector lagged. I’d agree that the rebound has come after a prolonged
negative period for the stock which means it’s not doing much more than making up a little of
its lost ground, but all the same it was better than action seen in recent weeks and that in itself
is good.
01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
source company filings, IKN ests
srallod
fo
snoillim

The rebound came in the right way too, on the back of solid fundies after its 3q13 report and
on accelerated volume.
Eco Oro Minerals (EOM.to): Please see ‘Regional Politics’ below for the latest jungledrums on
the Colombia government Páramo decision, now expected any day. As explained below I fear
this one might turn out by going against EOM.to and its boundary desires and I might have to
take a near-term hit on the trade, but if it spikes down too much on bad news I’ll buy again and
average down, because you can bet that if the Páramo decision does indeed go against EOM.to
they’ll follow up with a legal action announcement and get people’s greed glands flowing for a
cash settlement.
Lara Exploration (LRA.v): I can honestly say that I’m very surprised to see LRA down this
low with its share price. Then again, I could say
that about a ot of stocks in the junior world. Last
week saw LRA bump around on low volume for
most of the week, but 32k shares sold Friday by
someone apparently willing to take any price saw
it break down into the 60s for the first time since
2009.
LRA isn’t my idea of a tradeable stock due to its
featherlight volumes, so I’0m not going to try
and add any here (unless it goes stupidcheap
and much lower). It’s a little depressing to see
such quality at such a price, however.
Tahoe Resources (THO.to) (TAHO): During Wednesday’s conference call to the 3q13 results
published Tuesday, TAHO CEO McArthur said (2):
We're continuing to witness amazing community support for the project and, as we
all know, it's not all about jobs and tax creation, which, of course, are very important
in this industry. We have training partnerships in the communities that we're
supporting; regional agricultural initiatives, infrastructure projects and sustainable
business investments, we are making. These CSR programs are bearing real fruit,
and I'd like to say that true social license is not purchased, but rather it is earned
through long-term dedication by our team and consistency in the communities and in
our stakeholder relationships.
If that’s true, then one half of your author’s short thesis is blown straight our of the water. I’d
also say that if it’s true without any sort of qualification or adulteration I’m from the planet Zog.
Up until now it’s been a case of their subjective opinion against others, but the amount of
denial in the above statement there is breathtaking. The thought of San Rafael Las Flores
offering “amazing community support” is laughable, these guys at TAHO are bullshitting you.
13

The Copper Basket
After forty-six weeks of 2013 The Copper Basket is showing a 27.58% loss to level stakes.
company ticker price 1/1/13 Shares out Market Cap current pps gain/loss%
1 NGEx Resources NGQ.to 3.40 168.66 296.84 1.76 -48.2%
2 Augusta Res AZC.to 2.43 144.35 262.72 1.82 -25.1%
3 Lumina Copper LCC.v 9.43 43.61 240.73 5.52 -41.5%
4 Reservoir Min. RMC.v 2.41 41.68 183.39 4.40 82.6%
5 Copper Fox CUU.v 0.83 402.96 179.32 0.445 -46.4%
6 Hot Chili Ltd HCH.ax 0.72 297.46 133.86 0.45 -37.5%
7 Nevada Copper NCU.to 3.50 80.5 131.22 1.63 -53.4%
8 NovaCopper NCQ.to 1.80 53.02 107.10 2.02 12.2%
9 Panoro Minerals PML.v 0.62 204.71 75.74 0.37 -40.3%
10 Western Copper WRN.to 1.39 93.68 62.77 0.67 -51.8%
11 Curis Resources CUV.to 0.70 63.13 35.98 0.57 -18.6%
12 Candente Copper DNT.to 0.375 122.05 29.29 0.24 36.0%
13 Oracle Mining OMN.to 0.80 49.03 13.24 0.27 -66.3%
14 Yellowhead Min. YMI.to 0.59 63.45 10.15 0.16 -72.9%
15 Strait Minerals SRD.v 0.08 57.26 3.72 0.065 -18.8%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg -27.58%
Copper Basket 2013 average, weekly
A slender 0.62% gain for The Copper Basket
12%
average last week, which came from six 8%
stocks moving up (LCC.v, NCQ.to, RMC.v, 4%
DNT.to, OMN.to, SRD.v), one staying 0%
-4%
unchanged (CUV.to) and eight losing ground -8%
(NGQ.to, AZC.to, CUU.v, NCU.to, HCH.ax, -12%
-16% WRN.to, PML.v, YMI.to). The biggest up was
-20%
recorded by Strait Minerals (SRD.v up
-24%
30.0%) and the worst loss came from Hot -28%
Chili (HCH.ax down 10.0%). -32%
All this in the week when world copper prices
finally broke away from the tight $3.20/lb to
$3.335/lb trading range that lasted for months, as copper
dropped below $3.20/lb on “China demand fears” (aka we
don’t have a clue, let’s blame it on China) when the big
Chinese policy meeting (Plenum 3) didn’t come up with any
hard and fast ruling on the economy as affects
infrastructure and therefore main copper demand.
As documented on these pages on several occasions, your
author firmly believes that the LME “warehouse wars” have
a role in artificially setting high world prices for copper (and
other metals) and the potential that the warehouse system
and therefore the LME loses its coveted position as price
discovery central has been growing. Therefore I’m less
prone to blame last week’s drop on “China demand fears”
and I’m more interested in the coincidence that the LME
unveils new rules for warehouses under its auspices and
then the copper price suddenly drops. Here’s Reuters with a
report (3) on the rule changes and here’s a short excerpt from the note, to give the flavour:
Less than a year later, on November 7, the LME unveiled a plan to slash wait time to a
maximum of 50 days, give itself powers to act swiftly to prevent abuses of the system
and is reviewing its agreement with warehouse companies. But the LME's new chief
14
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
%

executive, Garry Jones, acknowledged last week that the exchange still cannot stop
trading companies from owning warehouse firms.
In other words, the LME seems to have taken a few step in the right direction and as a result,
the bottlenecks that have been artificially induced by Trafigura/Glencore/Goldman Sachs/JP
Morgan/etc might not disappear completely, but they’re going to diminish.
Inventories now and there was another chunky drop in registered world stocks, down 23,548mt
(-3.5%) to stand at 642,538mt. Of that total, LME warehouse stocks dropped by 14,000mt, or
3.0%, to 451,650mt with 9,100mt of that from the Malaysia warehouses alone.
Comex inventories dropped 9.9% to 20,296mt and Shanghai dropped 4.1% to 170,592mt. As
for LME cancelled warrants, they stayed at record levels with 61.9% of stocks under
cancellation.
Cancelled Warrants at LME, IKN157 to date
70%
60%
50%
40%
30%
20%
10%
0%
15
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.
Copper Fox (CUU.v): CUU hit a 52 week low on
accelerated volumes last week, touching 41c before
bouncing (dead cat?) to the 45c close you see before
you today.
In fact, current lows are the worst prices since mid-
2010 when CUU went on its crazy charge higher. I
didn’t understand the attraction of the stock then and
I don’t understand to this day; a low grading waste of
time that has managed to sucker in a rich Mexican
sugar daddy and keep its run going longer than most,
but reality bites eventually. It always does.
Panoro Minerals (PML.v): PML’s 3q13 numbers, out Wednesday, show a company with
$11.76m in cash and $12.3m in working cap, along with a burn rate of around $4m per quarter,
as at September 30th. Put that together and you have a company that’s OK for the time being
but won’t get through 2014 without going to market and raising more capital in some way,
shape or form. With the marginal look of its main Cotabambas asset, this isn’t one I’ll be betting
on in the meantime and I think it’s going lower, unless copper market prices save them us all. I
see no reason to contemplate holding shares in PML at the moment, it’s really as simple as that.
Strait Minerals (SRD.v)
The 30.0% price rebound was strong, but it wasn’t that great in volume and in the end is only
5c to 6.5c, so we shouldn’t read too much into it. Also, it’s nobody’s idea of a tell about how the
Alicia drilling program is going.

Nevada Copper (NCU.to): As well as filing its 43-101 feasibility study for the key open pit
project at Pumpkin Hollow, the same report that’s been the cause of recent share price
weakness since its announcement in October and the contained mediocrity of the economics
therein, NCU also filed its 3q13 earnings report last week which showed a company with
treasury of $43m and working cap of $42.5m as at September 30th. Cash burn was a tad under
$8.8m for the quarter and although that included the final work done on the feas study, NCU is
also moving forward on early stage development of its underground workings at the project so
it’s still facing an expensive near-term future and that cash pile isn’t going to last it so long at
current rates.
Oracle Mining (OMN.to): The previously announce what-amounts-to-bridge-loan was closed
last week and the new CEO named. In fact it’s the return of the old, as ex-company head Kevin
Drover is back at the helm here and will be looking to turn around company fortunes quickly, if
possible.
At just a touch over $13m market cap, OMN is now firmly in the bargain basement price range.
A lot will depend on if the newly enthusiastic Asian backers will be good about funding the
Oracle Ridge project to production and that in turn will depend on the type of job down in the
next six months or so by Drover and his colleagues. The project needs to be permitted and it
will need to show to the financial backers’ content that the current mine plan, which includes a
potentially optimistic throughput rate that needs to be proven can work, is deliverable. Aside
from that, us smallfry in the background will need to see the terms of any eventual capex
raising , because it’s at those times that the equity holder can be diluted to kingdom come by
debt terms and conditions. However the share price we see today is deeply cut, the story gets
zero airtime and since the big volume waterfall drops earlier in the year the trades are scarce,
all clear signs of the forgotten and unloved company. There’s enough to like here with good pol
risk location, good grade and real miners working on the project, rather than make-believe
promo artists.
The Lottery Ticket Basket
After 46 weeks of 2013 The Lottery Ticket Basket is showing a 35.94% loss to level stakes.
16

company ticker price 1/1/13 Shares out Market Cap current pps gain/loss%
1 Marlin Gold MLN.v 0.10 680 57.80 0.085 -15.0%
2 Eagle Star Min. EGE.v 0.125 79.13 14.24 0.180 44.0%
3 AQM Copper AQM.v 0.08 139.05 12.51 0.090 12.5%
4 Fancamp Expl. FNC.v 0.125 177 10.62 0.060 -52.0%
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 3.57 0.105 -12.5%
8 Netco Silver NEI.v 0.125 9.4 2.96 0.315 152.0%
9 Copper North COL.v 0.10 58.7 2.64 0.045 -55.0%
10 Gryphon Gold GGN.to 0.085 194.64 1.95 0.010 -93.5%
11 Darwin Resources DAR.v 0.20 26.16 1.83 0.070 -65.0%
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 1.06 0.010 -93.5%
14 Rio Cristal RCZ.v 0.025 17.259 0.60 0.035 -86.0%
15 Firestone Ventures FV.v 0.045 36.82 0.18 0.005 -88.9%
Portfolio avg -35.94%
The Lottery Ticket Basket staggers towards
25% Lottery Ticket Basket 2013 average, weekly
the end of its stay with a 5.6% drop on the
20%
week, without a single winner to note, five 15%
10%
unchanged names (BHV.v, GGN.to, TGV.v,
5%
AGV.v, RCZ.v) and ten losers (not naming 0%
-5%
them all). The biggest percentage drops -10%
came from Firestone (FV.v down 50.0%) -15%
-20%
and Glass Earth (GEL.v down 33.3%), -25%
though the 10.0% drop in Netco (NEI.v) did -30%
-35%
most damage for the overall average. -40%
-45%
Netco Silver (NEI.v): Little did you know that we’d be covering the phone apps sector on
these pages. Netco Silver (NEI.v) last week finally unveiled its plans for corporate change (4)
which include those to launch a “smart-device business unit branded as Brisio Innovations Inc.”
and will seek to change its name (to Brisio) and corporate direction at a special meeting of
shareholders on December 11th.
We could go on, but its best to check out the linked NR above if you want to know more. What
we can say here is that we’ve come some sort of full circle, as those who remember how dot-
com bubble busts of ten or eleven years ago were turned into shell companies that were then
rebranded as junior explorecos and filled with seven types of moose/llama/wildebeest pasture
in order to cash in on the exploration sector bubble. The Netco model may turn out to be the
blueprint for the future of other explorecos, helping to thin out a field that’s so desperately in
need of thinning.
AQM Copper (AQM.v): Nine times out of ten, a late-Friday NR means trouble for a junior
mining company. However there are always exception to the rule and we had one last week
from AQM and this NR (5), which not only told us that its financing round of 33.478m shares
sold at 11c apiece in order to raise $3.683m had closed correctly, but also that directors had
bought 3.15m of the placement and notably, Teck Resources (JV partner at Zafranal) had
bought a very chunky 22.455m of the shares. Even more significantly, Teck’s owner ship of
AQM is now at 19.9% (just under the buyout threshold) and Teck also has the right to put a
director on the board of AQM Copper.
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 ht71
source: IKN Weekly data, TSX
2102/1/1
morf
egnahc
%

Let’s cut this long story short; We’ve known for many a moon that Teck, and especially local
Teck man Walter Tejada, likes Zafranal as a project (it certainly makes more sense than the
high capex dog thing Teck is running at Schaft Creek with Copper Fox). Before AQM got Asian
backers to shore up its finances earlier this year, there were strong rumours that Teck had put
in a lowball offer for the whole of AQM and its participation in the latest round of financing to
put it at 19.9% ownership of the minor JV partner on site is right in line with its previous
attitudes. I’d expect AQM to rally next week on the back of this late Friday announcement,
because it now seems more like a matter of time before Teck makes its move to buy out AQM
at a higher price.
As for me, although it didn’t fill completely (36.363m shares were slated to raise $4m total) this
financing gets me actively interested in trading AQM again. I’ll watch how things go next week,
but if we see this same kind of 9c entry point offered along with volume, I’m game for a trading
position in the expectation that Teck will eventually take them off my hands for a higher price.
Regional politics
Colombia’s Páramo decision expected tomorrow
As mentioned on the blog last week, we’re now expecting the big Páramo decision in Colombia
any day now, with tomorrow Monday 18th looking like the big day. And according to this report
(6) dated Friday 15th, it might not be the result I was looking for when opening my trade in Eco
Oro (EOM.to). The report quotes a local environmental leader who has been privy to talks with
the Colombia Environment Minister in the run-up to the official announcement saying “The
decision on the limits of the Páramo has been made and it does not coincide with the border of
the Regional Nature Reserve”.
Back in IKN228 dated September 15th we went into this issue and here’s one of the maps used
in the note that weekend:
What the unofficial statement therefore means is that the limits about to be set on the Páramo
are larger than that blue shaded area above, but until we get official word, we don’t know how
much bigger or whether they encroach on EOM’s properties. If they do, it would mean that the
project would be prohibited from moving forward.
18

So what else do we know? Well, from the report we also get other quotes, as follows
(translated):
“The limits of the Páramo are wider than that of the park. It’s a situation that
won’t leave everybody happy, according to the Environment Minister (Luz
Helena Sarmiento Villamizar).”
“Some large-scale mining projects will be inside the Páramo limits. We don’t
know which ones...”
As things stand, that puts the EOM.to Angostura project in the potential line of fire. I won’t be
selling pre-announcement and I’m also aware that EOM is likely to slap a civil suit on Colombia
if it’s denied the chance to develop, so if the decision goes against the company and the share
price drops, I may eventually add more and ride up the legal suit announcement later. But
whatever happens, it’s likely to happen in the next 24 hours. Expect a Flash update if
necessary.
Peru and Honduras sign mining co-operation agreement
During a visit to Peru last week, Honduras government officials signed various agreements with
Peru including (7) one between the Institute of Geology and Mines of the Republic of Honduras
(INHGEROMIN) and the Ministry of Energy and Mining of Peru (MEM), an “Inter-Institutional
Co-operation Agreement” that is designed to promote and boost the exchange of mining
knowledge between the two sides. As one side of the deal is a world authority on mining (Peru)
while the other knows very little about modern, formal mining (Honduras), we’d expect the
actual interchange of knowledge to be pretty lop-sided. Which implies that what Honduras is
bringing to the table is less knowledge and more opportunities for the Peruvian mining industry
and its players in said country.
Colombia’s formal precious metals industry remains small
This week, Colombia’s government announced (8) that royalties received from precious metals
(gold, platinum, silver) mining operations in the third quarter dropped by 21.4% to stand at
110.7 Billion pesos. Which sounds a lot until you do the math, because that works out at
U$57.75m and is testament to the lack of scale and development in the country’s formal PM
mining sector. This is because at 1.34m oz gold produced in 3q13, Colombia’s gold production
is now roughly equivalent to Peru’s 1.28m oz in the same period, but the royalties paid on
production are some 80% lower.
El Salvador: Why OceanaGold (OGC.to) (OGC.ax) has wasted its money
In an interview published Monday November 11th (9) Luis Parada, the lawyer working for the
government of El Salvador in its case as defendants against Pacific Rim laid out a few simple
facts that shows what Oceanagold (OGC.to) (OGC.ax) has bought by way of a “bargain” via its
recently announced purchase of said company. The sector knows that Pacific Rim is in litigation
against El Salvador at the World Bank tribunal (ICSID/CIADI) for refusing to let it develop its
contentious projects there, anti-mine protester deaths and all, but there’s more than meets the
eye to the situation as Mr. Parada pointed out.
It’s a long Q&A in Spanish and goes into several factors, but the thrust is that according to
Parada, OGC seems to think that it can take over Pacific Rim and will then have a bargaining
position with the government, firstly over the legal case and then over its ownership of the
concession. The reality is very different and these two translated sections are chosen to
underscore the weak case that the company has against the country. Says Mr. Parada...
“In March 2012, Pacific Rim presented its main legal demand against the the
government in which they argued, using a very particular interpretation, what their
rights were under the laws of El Salvador. For example, they based their arguments on
the old mining laws of 1888 and 1922 that were completely revoked by the new mining
19

law (that dates from the 1990’s) and said that the simple act of discovering a mineral
deposit, even though they know via the country’s constitution that underground is all
State property, gives them the right not only to the concession but to all the
resource.....they say that those underground deposits, from the moment they have an
exploration licence and have discovered something, no longer belong to the State but
to them. This is contrary to the laws of El Salvador.”
…
“Pacific Rim has taken an exaggerated position of what their rights are and El Salvador
will make it clear that the company has no right of property to the underground
deposits. The only thing they had was a right to exploration and if they found
something worth their time and then complied with the requirements, could request a
production concession. As it is, the only thing they have is an application for a
concession that was rejected by the Ministry of Finance due to non-compliance. They
lack an environmental study, a feasibility study, and fail to demonstrate that they are
owners of the surface rights that they need for the concession, as there are hundreds
of people, nearly a thousand, who own the surface and they do not want to sell. While
Pacific Rim doesn’t have those rights it cannot have a production concession.”
The problem I personally have with OGC’s foray into El Salvador, via the apparent “bargain”
price of Pacific Rim, isn’t the effect on the company’s financial position because the costs
involved here are relatively minor compared to the whole (market, cap, earning generation
ability etc) of OGC. However it shows an acute lack of judgement on the part of the OGC
executive, getting itself involved in a fight it has very little chance of winning, on the other side
of the world to which it normally operates. Why OGC decided to pick a dog in this fight is
unknown, but it’s on a hiding to nothing.
Guatemala: Another large march against mining, another news blackout
It’s difficult to get news of the march made by thousands of rural dwelling Guatemaltecos in the
streets of the country’s capital city on Wednesday, but it did happen (10) and once again the
citizens (15,000 in total, according to this report (11)) were protesting against the presence of
mining companies in the country, due largely to environmental complaints. The march,
organized by country dwellers’ representative committees such as CNOC and CODECA, was
attended by residents from 20 of Guatemala’s 22 departments (states) and were also called to
demand the nationalization of the country’s electricity supply service, which was said to be of
poor quality and very expensive under current private company hands.
Market Watching
Thoughts arising from the Sandspring (SSP.v) Silver Wheaton (SLW) deal
The deal struck between Sandspring (SSP.v) and Silver Wheaton (SLW) was mentioned in a
brief post on the blog on Tuesday (12) (along with another deal done between TomaGold and
IAMGOLD), a few more words on it here.
In its NR (13) Silver Wheaton’s CEO Randy Smallwood was quoted with the following (with
author’s emphasis on the last sentence):
"Silver Wheaton continues to push the streaming model forward," said Randy
Smallwood, Silver Wheaton's President and Chief Executive Officer. "The Early
Deposit Agreement model allows us to get our foot in the door on high-quality, earlier
stage projects such as Toroparu for relatively little upfront capital. From Sandspring's
perspective, these funds will allow them to complete the bankable feasibility study
without subjecting their shareholders to excessive dilution that today's challenging
equity markets would deliver. Yet again, Silver Wheaton has developed another
innovative, win-win business model. In todays market environment we expect this
model to be very attractive to junior exploration and development companies
20

looking for funding."
This and other comments made in several media reports by Smallwood (one example here (14),
many others to choose from) shows the direction SLW is taking on this deal; it’s looking to go
deeper into the exploration timeline and
pick up earlier stage projects at a lower
initial outlay, the “foot in the door”
principle mentioned above. This clearly
comes with more risk and as the SSP.v
share price action over the last two years
indicates the market isn’t really that
impressed with the SLW verdict of how
“exciting” the Toroparu project in Guyana
(that little flick upwards on the end of the
chart there on the right? Yup, that’s the
reaction to the SLW sponsorship news).
But more interestingly, SLW is marking a
new policy with this deal and making it
clear to all the cash-strapped junior exploration companies out there that SLW is willing and
able to provide capital to move projects forward in exchange for an eventual (and cheap)
streaming deal. It’s being framed as a win-win by promoters, which is fair enough I suppose,
but this move gets my personal attention because of the way other recent deals done by
streamers have been received by the market. Take for example SLW’s announcement (15) that
it had added to its Constancia stream by buying 50% of life-of-mine gold production from the
HudBay (HBM) copper project in Peru for $135m (+$400/oz on delivery of gold, normal stream
conditions), adding to its previous deal to purchase all silver production from Constancia. That
deal was announced on November 4th and I recall thinking “expensive for SLW” when reading
it, then recall the same type of reaction from the market chatter later in the day, all on the
heels of the Barrick (ABX) Pascua Lama debacle which unfolded the week before and, due to
the big stream it holds there, stuffed SLW stock by about 10%.
The conclusions you can draw from the SLW SSP deal are many and varied but I’m going to
stick to two things here. Firstly, SLW isn’t risking much at this stage ($13.5m, with the worst
case return a small NSR) and if Toroparu and its low grade remote open pit project in a
politically uncertain region surprises both myself and the market to eventually become a
working mine, SLW as eventual sponsor would deserve all the high-fives and plaudits it
receives. To me, this smacks as a no-loser for SLW at this point, the risk only appearing when
the (now fully sponsored) feasibility study arrives in 2014 and SLW decides whether to back
SSP with serious money. In short, the structure of this deal means SLW has bought itself time
and can now see how the precious metals market develops, while all the time holding what
amounts to a low cost call option on a potentially lucrative stream.
Secondly and of more consequence to the wider market, I think SLW has identified the same
kind of large disconnect that we who track the juniors know in our bones and have known for a
long time; that the early stage juniors have been whacked to a much greater extent than their
due and as a whole group, babies thrown out with bathwater etc. This means there are
impressive bargains to be picked up at the early-stage end of the mining sector and the risk of
running with exploreco projects, some of which by definition will not make it to production
stage (because that’s how mining works), is now heavily outweighed by the opportunity of
getting on board potential big winners at these deeply cut prices. SLW is moving further out on
the risk curve and as a result the initial investment is lower, but the corporate policy seems to
be to find better value than the rather expensive looking streaming deals now being done at
the near-term producer end of the market.
Santa Barbara Resources (SBL.v) drill results
We’ve kept an eye on SBL.v and its JV with Rio Alto (RIO.to) (RIOM) on the Sancos property in
21

Peru, so a word is due about the results from the first round of drilling announced early
Tuesday (16). Without getting technical and getting down to brass tacks, what we got from SBL
wasn’t good enough grade-wise and it’s not surprising that the company stock sold off the way
it did (though 4c at the end of the week looks a bit too harsh by my eyes...perhaps 5c is fair
here). The drills hit decent enough widths but the grade at ~0.4g/t Au isn’t going to be enough
to tempt bigboy partner RIO into buying the property and sticking a mine on top, not in its
present state at least.
However (and this is more important), be clear that this project is far from dead. What we can
expect is that geols from both companies will sit down and model on those results, with the
goal of putting together a second round of drill plans that would, theoretically at least, be able
to home in on better grading material and show up more strongly than round one. That would
be the geologists’ goal, which would then have to get past the in-house hard-nosed financial
people who’d decide whether a second round of drilling were financially viable. If so, we can
expect more to happen on this project and that would mean it’s not dead yet, not by a long
way. Therefore to get interested in SBL again, what we’d wan to see is an announcement of a
second round of drilling not just planned, but decided upon, funded and happening (or about to
happen). That would likely push the stock back up a bit and if the geols do their homework
right and get a bit of luck from mother nature too, there could still be a drill win and decent
upwards movement in the stock. After all, with a $1m market cap there’s a lot of potential
leverage to just one good hole here.
Bottom line: Not one to buy now, but may still have a trade in it if more drilling is announced.
Colossus (CSI.to): Why we wait on sidelines
Last week an update and a thought on its potential, this week the big black cross goes through
the company forever. Here’s how we finished last week’s piece on CSI:
“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.”
And my stars, we got transparency all right. Here’s what happened on Friday after CSI had
(finally) announced its quarter on Thursday evening:
That’s a 52% drop on 24m shares traded Friday and a company stock that’s now well and truly
broken. The reason for the fail was alluded to on the blog Thursday evening once the 3q13
numbers had been published by CSI, because the Serra Pelada project ws now facing further
delays, CSI made it clear there was a funding shortfall and to cap it all, three directors including
the CEO Mancuso decided to take the opportunity and announce their retirement from the
22

company. Along with those obvious issues, there were other problems pointed out by the
company, including the strong suggestion that the mine water issues aren’t just a surfeit of
groundwater but come from an aquifer which is now pouring into the mine. If so, current
dewatering plans are likely to be coming up well short of the necessary (and that’s putting it
mildly). In fact, if the company is to be believed (which in itself is now stretching the
imagination further than most dare to travel), water treatment capacity will need to be nearly
doubled in order to cope. Whatever happens, CSI needs more cash and time minimum.
CSI is now a 20c stock and its fall has been precipitous, even by the standards of the junior
mining sector of the last couple of years: let us recall that it was still trading at $7 and $8 just
two years ago and was a $5 and $6 stock one year ago, as well. However, there’s no reason at
all to buy into this new price and its drop is more than deserved and as we pointed out in the
wrap up to IKN233 dated October 20th...
“... if something big goes against the company zero dollars, zero cents is a
logically possible future share price.”
That, kind reader, isn’t a theoretical scenario any longer, it’s one that’s firmly in play. We’d had
our eye on this one for a few weeks as a source for a possible trade and the braver amongst
you might just want to continue following its progress or even buying a few, but as far as I’m
concerned this is now a closed book. There’s no reason to expect anything bar more problems
from CSI and unless things drastically change, it’s a company that will either never see
production from its project or if it does, will have a share structure that’s bloated out of all
proportion and is highly unlikely to be able to offer value to equity holders. For all intents and
purposes CSI is now a dead stock, we drop our soft coverage on it from today and strongly
recommend all but the highest risk-takers amongst this audience to stay well away.
Fortuna Silver (FVI.to) (FSM) redux
All that hard work crunching the numbers on Fortuna Silver (FVI.to) (FSM) last week to come to
the conclusion that there might be a long trade there if it drops any further, and...
...it beats the market and silver into a cocked hat last week.
Now, I’m only joking on the above and for two reasons:
1) I’m fine with FVI’s near-term market success, because for one thing it means I was on
the right track to have spotted value here and for another, I fell no compulsion
whatsoever in buying this thing at any price, so the worst that can happen until it falls
is that I watch and lose nothing.
2) It’s not as if the work done in IKN236 has been invalidated by a single week’s trading
on the stock market. There’s plenty of time and potential opportunity to run a trade
23

here and as the analysis is done and the criteria set, it remains to be seen whether FVI
can fill the space required and drop to a level that makes it a potentially interesting
trade vehicle. The point here; I have plenty of patience available on this one.
So, nothing yet, but the potential remains at 100%. Let’s see how things develop.
.
B2Gold (BTO.to) (BTG) 3q13 financials: In line, but not sparkling
We ran a lot of B2Gold (BTO.to) (BTG) in
IKN235 when the company published its third
quarter production report and as BTO gives
more information than most companies at that
point, including preliminary revenues, amount
of gold sold, cash cost per ounce etc. That
means our estimates in IKN235 were always
going to be very close (check them out, they’re
mostly $0.5m here or there, some spot on) but
for the record, here are a couple of updated
charts which note 3q13 revenues at BTO of
$128.73m, COGS of $87,492m and and
operating revenue of $41.238m. You’ll also see
from the charts we’re expecting a modest but BTO: operating revenues and costs
un-sparkling profit from BTO this quarter 180
coming, too. For example that last one for 160
operating revenue per share (6.3c for 3q13) is 140
120
set to drop (to 5.8c/share) for 4q13, according
100
to our model at least.
80
60
The only figure that was higher than expected 40
was overall non-mining expenses, defined as 20
the difference between operating revenues and 0
net revenues, including corporates (eg G&A)
and financial (e.g. interest, financing, derivative
expenses etc) and tax on earnings. That came
to a total of $33.289m, some $2.5m higher
than expected and gave us a final net profit for
the quarter of $7.949m, down on our $10m
guesstimate for the net.
As for balance sheet items, here we see the
effect of the money BTO has borrowed in order
to run its expansion and growth projects,
Otjikoto and others. The combo of adding to
assets mainly by cash treasury and to liabilities
by longer-term debt means that working capital
has shot up to $314.2m as at September 30th.
24
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
BTO: Quarterly revenues
180
160
140
120
100
80
60
40
20
0
$m
revenues COGS Op. Rev
source: company filings, IKN ests for 3q13
01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3
U$m
source: company data
BTO: Operating Revenue per share, per qtr
0.10
0.09
0.08
0.07
0.06
0.05
0.04
0.03
0.02
0.01
0.00
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
$/share
source: company filings, IKN ests
BTO: assets
2500
2000
1500
1000
500
0
01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
$m BTO: Liabilities
800
fixed 700
other current 600
cash&ST
500
400
300
200
100
0
source: company filings, IKN ests for 4q13
01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
$m
LT debt
current debt
source: company filings, IKN ests for 4q13

BTO: Working capital
350
300
250
200
150
100
50
0
25
01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
$m
source: company filings, IKN ests for4q13
That’s a temporary thing as BTO will spend the cash on building its mine and turn near-term
cash into longer-term fixed assets during
2014, and a better gauge of where things BTO: Equity per share, per qtr
stand is probably equity per share (lumping all 3.00
near-term and long-term assets and liabilities 2.50
together, then dividing by the 651.381m
2.00
shares out). Here’s that chart, which stood at
1.50
$2.46 as per end 3q13 and is set to move to
$2.48 by the end of this year. 1.00
0.50
Finally the market reaction: This ten day chart
0.00
below shows how BTO, compared to GLD, has
had a bit of a sorry time of it recently, but
then rallied on the results news Thursday.
This kind of surprised me at the time, because
for one the results were largely telegraphed nearly two weeks ago in the October 30th
production report and for another the over corporate expenses were slightly hotter than
expected, dampening bottom line numbers. So no surprise when the novelty wore off on Friday
and BTO sunk back to (nearly) where it came from Wednesday evening.
Overall, nothing wrong with the BTO quarter and everything we said in IKN235 stands. This is a
central pillar type position in the Stocks to Follow portfolio these days and will be judged and
valued more on its asset book and strong balance sheet than any given quarter’s bottom line
results. BTO is in a maturing phase, profits can come later, in the meantime expect it to retain
its value without being a shining star of a stock market mover if things rally. Also, 20/20
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
$
source: IKN calcs from BTO data

hindsight tells me I sold half well back in August, no matter what gold bullion has done since
then. One of the few good calls made in 2013.
However, for those of you looking for a near-term value trade with low downside and a
potential quick 10% or so, I think BTO might be a candidate on the equity/share ratio alone. At
its current $2.37 it’s being priced under 1.0X book and that’s normally the territory of the
dysfunctional company. BTO is far from that, it’s more of a star mining company than anything
else and should be one of the last juniors to get called dysfunctional in serious tones.
Fundamentally speaking, the current $2.37 share price looks oversold and ready for a rebound
and I’d certainly be very surprised if BTO went any lower without a wholesale dumping of gold
bullion by the market.
A final finally and before moving on, a paste-out of a section of the company’s 3q13 MD&A:
While the storms presence in the Philippines was brief, we are just now hearing of the
dramatic impact from Haiyan. Recognizing the Company’s responsibility in countries
where it operates, the Company joins other Canadians in support of recovery
operations in the Philippines. The need is great and it is urgent. The Company has
announced a donation of $1 million. One half of the donation will be made available for
immediate relief efforts, and one half of the funding will be directed to reconstruction
efforts later on. These funds are in addition to any personal donations from the
Company’s employees and shareholders.
People, that’s the kind of company I like to own and support.
Conclusion
IKN237 is done, we end with bullet points:
• I’m seriously considering a quick trade in B2Gold (BTO.to) (BTG) as its underlying
fundies, particularly its equity/share ratio, suggest that a pop up is far more likely than
a further slide down at these levels. It’d be envisaged as one of those 10% net
splash’n’dash trades (that I’m not overly keen upon, but needs must), rather than a
serious addition to the longer-term core position already held.
• Another one that catches the eye is AQM Copper (AQM.v) after its Friday evening news,
because Teck couldn’t have made it much clearer that AQM is the kind of bite-sized
morsel that it’s willing to snap up. Any trade here will depend on price (would want the
current 9c or so) and volume (don’t want to get stuck).
• But as far as I’m concerned, last week belonged to Rio Alto (RIO.to) (RIOM) and it’s
now a question of when it rallies, not if. All RIO needs is $1.3k gold and it’ll go higher,
that’s the type of bet you want in this market.
• I’m still selling Starcore (SAM.to) and a close eye on Eco Oro (EOM.to) newsflow from
the Colombia government tomorrow.
• Goodbye Colossus.
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/rio-alto-announces-net-income-130000640.html
(2) http://seekingalpha.com/article/1837082-tahoe-resources-management-discusses-q3-2013-results-earnings-call-
transcript?part=single
(3) http://www.reuters.com/article/2013/11/15/us-lme-warehousing-insight-idUSBRE9AE06U20131115
(4) http://finance.yahoo.com/news/netco-silver-launch-smart-device-210350204.html
(5) http://finance.yahoo.com/news/aqm-copper-inc-completes-non-230000285.html
(6) http://www.vanguardia.com/economia/local/233981-delimitacion-de-paramo-ya-esta-definida-y-no-es-la-misma-
linea-de-parque-cdmb
(7) http://noticias.lainformacion.com/estilo-de-vida-y-tiempo-libre/turismo/peru-y-honduras-acuerdan-suprimir-visas-de-
turismo_RijPUAgy62unXxgqWsMg71/
(8) http://www.eluniversal.com.co/economica/regalias-de-oro-y-plata-alcanzaron-110-mil-millones-de-pesos-142002
(9) http://www.portalminero.com/pages/viewpage.action?pageId=82553179
(10) http://cb24.tv/guatemaltecos-marchan-contra-mineria-y-piden-nacionalizar-energia-electrica/
(11) http://servindi.org/actualidad/96332
(12) http://www.incakolanews.blogspot.ca/2013/11/silver-wheaton-slw-and-sandspring-sspv.html
(13) http://www.silverwheaton.com/News1/PressReleases/PressReleaseDetails/2013/Silver-Wheaton-Completes-Early-
Deposit-Gold-Stream-Agreement-With-Sandspring-Resources/default.aspx
(14) http://www.forbes.com/sites/kitconews/2013/11/12/sandspring-toroparu-project-is-exciting-silver-wheaton-ceo/
(15) http://www.silverwheaton.com/News1/PressReleases/PressReleaseDetails/2013/Silver-Wheaton-expands-
precious-metal-stream-on-the-Constancia-Project-to-include-gold/default.aspx
(16) http://finance.yahoo.com/news/santa-barbara-drills-50-m-120000852.html
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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