IKN #243Premium

The IKN Weekly
Week 243, December 29th 2013
Contents
This Week: We follow miners not gold, The Kitco experts redux.
Fundamental Analysis: Revising Gold Resource Corp (GORO) and its short potential.
Stocks to Follow: Overview, Fortuna Silver (FVI.to) (FSM), Rio Alto (RIO.to) (RIOM), Pretium
Resources (PVG.to) (PVG), Dalradian Resources (DNA.to), Minera IRL (IRL.to) (MIRL.L), Focus
Ventures (FCV.v), Tahoe Resources (TAHO) (THO.to), Lara Exploration (LRA.v).
Copper Basket: Overview, year end numbers.
The Lottery Ticket Basket: Overview. The end.
Regional Politics: Regional risk review update revised edition third update.
Market Watching: Gran Colombia Gold (GCM.to): publicity is publicity, Pretium (PVG) redux:
Mailbag, Continuing with the Radius Gold (RDU.v) B2Gold (BTO.to) arb idea, Phoslock (PHK.ax):
A headsup on a potential trade.
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
We follow miners, not gold
I need to remind myself about this on occasion, too. Here’s a short follow-on from last week’s
‘Signs of a little sanity’ piece. Gold’s performance tends to set the rhythm for our focus sector,
but that doesn’t mean lockstep either and at the moment this looks like a good thing, as this
ten day chart sets out to demonstrate. The key moment of the last two weeks was the Fed’s
decision to begin the tapering
process (no need to go into
details, the concepts should be
on board now as should the
apparent speed the Fed has
decided to move) which caused
the type of sell-off in gold and
gold related issues the world had
always expected; Occam’s Razor
in action.
However, developments since
the decision point has been
better than many, indeed most,
were expecting. We’ve had a
modest recovery in gold (it went
under U$1,190/oz and
threatened on of those long-term supports that TA people’s speak of, but is now $25/oz
higher), but a better one in the miners and juniors, which is sketched out on the chart above.
And even then GDX/GDXJ are indices that contain their own laggard stocks, so check out some
of the better rebounders among the juniors and things are even better. For example, Rio Alto
1

peaked at $1.65 on the day of the Fed taper announcement before dropping with the rest of
them, but we now see it at precisely that figure this weekend. In other words, the taper’s
effects have been fully digested by a company that makes bullion, even though bullion is still
trying to work its way out.
It’s good to see the miners reacting positively and catching a draught from the broad markets
for once. There’s been enough talk from the non-dedicated sector commentators about how
miners could be a good contrary play for 2014 and I’d agree immediately, but I’d also suggest
that the people who are latching onto the mining sector as a potential basket play won’t be at
all interested in the companies which cannot make a profit from current levels of silver, gold
and others. The type of analyst picking over the charred remains of the mining sector is the
type that will look at the bottom line of the P+L first, then the balance sheet second (and will
want to see a good treasury to financial debt ratio), then make a quick call and move on to the
next sector company; not the person to try and convince about open pit potentials and relative
metallurgical advantages of project X over project Y.
The Kitco experts redux
For the snark was a boojum, you see.
The Hunting of the Snark, Lewis Carroll, 1876
Just to finish up last week’s table, the missing numbers at the bottom of the table are now in
and despite the experts predicting a bearish week for gold, the metal (using the GLD proxy,
which climbed by $1.18) rose by 1.02%. Which means the experts have a 4 from 16, or 25%,
success rate. Also, your author feels the need to convey the news that the very same Kitco
survey and its merry band of ‘experts’ is predicting higher gold prices for the week to come (1)
(58.8% say higher), so due caution advised.
I think I’ll stick with the monkey and his dartboard.
Fundamental Analysis of Mining Stocks
Gold Resource Corp (GORO) cuts its dividend: Short opportunity reappears
Just one short note in our main section today.
Thursday brought the news (2) from Gold Resource Corp (GORO), focus of one of your author’s
few decent calls and trades over the past 12 months, that the company was dropping its
monthly dividend payment from 3c to 1c per month. The official reasons given in the NR include
this paragraph:
“The Company has experienced reduced net revenues in 2013 with the decrease in
metal prices, while also investing a significant amount from cash flow into expanding
the El Aguila mill's processing capacity to 1,500 tonnes per day. Additionally, in
October the Mexican government approved a new 8% royalty on precious metal
producers which is set to take effect January 1, 2014. Although the Company does not
yet know the exact impact of this new royalty, it is expected to increase the Company's
effective tax burden moving forward. The Board of Directors has determined it to be in
the Company's best interest to improve its cash position to provide financial flexibility
for operations or future potential opportunities in this distressed mining space.”
Fair enough. I’ve been following the GORO story closely since the last covering of the short (at
U$4.98 avg) and as mentioned briefly on a couple of occasions, was unsurprised that it had
traded around the $5 price point for the last ten weeks or so. It’s what I referred to at one
point as a ‘No-Man’s Land’ of a price that didn’t have me interested in returning to the short or
even looking for a long trade on serious overselling
2

The main reason that $5 didn’t appeal was the dividend yield percentage spread table that has
stood me in fairly good stead as a guide to where GORO’s stock price would go under different
dividend payment scenarios. I’m the first to admit that the model was set up to be ballpark and
the choice of the 4.8% to 5.0% dividend yield was more subjective (though educated)
guesswork than hard scientific crunching, but the way in which GORO has met the targets in
question and then stalled its drop at the right time means this model has stood the test of time
and become a reasonably good lead indicator for the share price.
But to my assumption of $5 being a pivot price, and a glance at the table below should show
you why. I thought the market was pricing in that the dividend would eventually have to drop
and its 3c/month rhythm was unsustainable, but I (and the market, I humbly submit) was
expecting a drop to 2c/month, rather than the 1c we now have.
GORO: Dividend Yield Percentage Spread
Share price (U$) at 6c/month at 5c/month at 4c/month at 3c/month at 2c/month at 1c/month
12.72 5.66 4.72 3.77 2.83 1.89 0.94
12 6.00 5.00 4.00 3.00 2.00 1.00
11 6.55 5.45 4.36 3.27 2.18 1.09
10 7.20 6.00 4.80 3.60 2.40 1.20
9.60 7.50 6.25 5.00 3.75 2.50 1.25
9 8.00 6.67 5.33 4.00 2.67 1.33
8 9.00 7.50 6.00 4.50 3.00 1.50
7.29 9.88 8.23 6.58 4.94 3.29 1.65
7 10.29 8.57 6.86 5.14 3.43 1.71
6 12.00 10.00 8.00 6.00 4.00 2.00
5 14.40 12.00 9.60 7.20 4.80 2.40
4 18.00 15.00 12.00 9.00 6.00 3.00
3 24.00 20.00 16.00 12.00 8.00 4.00
2.50 28.80 24.00 19.20 14.40 9.60 4.80
2 36.00 30.00 24.00 18.00 12.00 6.00
source: IKN ests
Frankly, I was surprised GORO went straight to 1c and it doesn’t speak well, as in not at all, for
the underlying company financials and (un)profitability of the company. They’re probably in a
worse shape than even I was assuming, as every penny’s worth of dividend costs something
like $1.6m in quarterly payments to treasury and if $1.6m per quarter is significant cash for
GORO today, it suggests treasury has been dropping even faster than expected due to a wholly
unprofitable mine at current silver and gold prices; we may be at the stage when the pretense
3

of a cash flow positive mining operation will finally get dropped and if so, this stock is going
lower.
As indicated in the above chart, my best guess that GORO would float around the $5 price point
was based on a 2c/month dividend in the indefinite future and a 4.8% yield. With the divi now
at a penny per month, the yield drops to 2.55% at its current PPS and that’s been shown as too
little for valuation purposes along the history of the company, even when it was spinning away
nicely at high silver prices and 6c/month divis. Our model points to GORO going lower again,
much lower in fact, with the theoretical downside target now at U$2.50 (final column right).
This kind of price certainly isn’t out of the question. I’d submit that assuming bad news travels
slowly and good news quickly, we won’t get to find out the full extent of the financials damage
GORO is currently taking until the publication of the 4q13 (i.e. year end) numbers, which are
due in early March 2014. We can also expect the company to be true to form and pump any
improvement in production from the new higher expected run rate (its installed capacity is now
apparently 1,500tpd, it remains to be seen whether the ever-deepening mine will be able to
deliver that much mineral for processing to the surface) and perhaps give a new production
guidance figure for 2014. Those are the type of things the permanently misguided bulls in this
stock can latch onto and knowing as we do that this stock has its fan club (it’s known to
‘sponsor’ publications and their writers) and pump may happen in early 2014.
If so, it might give an excellent opportunity to uncover GORO and go short again. In fact,
calling a $2.50 target downside on a $4.75 stock (potential win of 47.4%) isn’t bad in itself, but
the way in which GORO has traded so far strongly suggests that the market hasn’t fully grasped
the extent of the negativity behind this strongly cut dividend.
A final factor is the issue mentioned last week, which is that Hochschild (HOC.L) has begun to
dump its large position once again. We can expect further lumps to fall from that holding
sooner or later, which will mean more downside pressure. What’s more, a severely cut dividend
means that HOC has one less reason to hold onto what it has left (which at last count was
~9.5m shares...not insignificant)
Bottom line: Here’s stands the potential to short the gold mining market, add a hedge (or more
hedge) to the overall portfolio. If GORO moves above $5 again (could be better silver/gold
prices, could be production and rah-rah guidance for FY14 in early January, could be a combo)
a nice window of opportunity could be ours, with the general plan at this stage to position
before the 4q13 results and then the 1q14 results come along to show just how sticky things
have become for GORO financially.
Stocks to Follow
The only downers were the shorts (and they weren’t too heavy) so it’s good to report another
positive week for the list. Of our 13 open positions listed, nine made gains (RIO.to, IRL.to,
BTO.to, LRA.v, RIO.to trading position, EOM.to, DNA.to, FVI.to, FCV.v), two of the smallest fry
were unchanged (DAR.v, NET.v) and two lost ground (TAHO short down 4.2%, PVG short down
just 2c). The best of the winners were Lara Exploration (LRA.v) which continued its sharp
rebound action, along with Rio Alto Mining (RIO.to up 10.7%) which brought good cheer to the
portfolio overall.
With the addition of a long in Fortuna Silver (FVI.to) (FSM) we now have 13 open positions on
our ‘Stocks to Follow’ list, two less than our self-imposed maximum. Ten are in the red, three
are in the green.
4

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$1.65 -28.3% best LT value
Minera IRL IRL.to hold C$0.35 22-jul-12 C$0.19 -45.7% top pick called at 24c
Longs
B2Gold BTO.to hold C$3.07 28-nov-12 C$2.29 -25.4% sold 1/2, rest rides. Quality
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.94 -18.3% solid biz model, LT hold
Rio Alto Mining RIO.to str buy C$2.06 07-jun-13 C$1.65 -19.9% re-add Dec'13 avg downx2
Eco Oro Min. EOM.to hold C$0.50 22-sep-13 C$0.365 -27.0% st pol risk play, added
Dalradian Res DNA.to hold C$0.65 27-oct-13 C$0.61 -6.2% Avg down again
Fortuna Silver FVI.to buy C$2.80 23-dec-13 C$3.02 7.9% new near-term trade
Shorts
Tahoe Resources TAHO short U$13.10 08-apr-13 U$16.38 -25.0% port hedge, easy2b short
Pretium Res PVG short U$5.38 22-nov-13 U$5.11 5.0% new short, news driven
Smaller/Riskier
Focus Ventures FCV.v spec buy C$0.175 01-jul-12 C$0.215 22.9% revised tgt 25c
Darwin Res DAR.v hold C$0.10 14-jul-12 C$0.045 -55.0% drilling again
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
Starcore Intl SAM.to nov'13 C$0.235 08-sep-13 C$0.17 -27.7% ST trade didn't work sm loss
B2Gold BTO.to dec'13 C$2.22 28-nov-12 C$2.16 -2.7% closed ST trade to raise cash
2009, 2010, 2011 and 2012 closed positions in appendices below
Now for some notes on a selection of the above stocks.
Fortuna Silver (FVI.to) (FSM): Trading position opened. I waited to see if FVI would re-
trace to the low 70s early Monday and when it didn’t, bought all I wanted to buy at $2.80. So
far so good and Friday’s action in particular was a signal of better things to come. This won’t be
a longer-term long and we’re watching in particular for strong numbers and guidance around
week two or three of January, so a case of watching for a potential place to take profits.
5

I’m keeping my eye on two things for the trader; first the price of silver (natch) and second the
FVI Book Value to share ratio tracker,
which is the preferred frontline method of FVI.to: Equity, BV, PPS, ratios
3.40
seeing if there’s any near-term upside left 3.20
3.00
in the tank. Last weekend we were at 2.80
2.60
1.27X, today that’s 1.41X and for me, that
2.40
says there’s more upside potential before 2.20
2.00
the stock returns to peer-parity. As a 1.80
1.60
rough guide I have $3.30 in my head as a
1.40
target (i.e. +17.9% from my buy price), 1.20
1.00
but a lot will depend on if it gets there,
how it gets there, what silver does in the
meantime etc. Near-term trades have
moving parts and therefore the target is a
mere chalk mark on a dark surface. All the same, a bright start.
Rio Alto Mining (RIO.to) (RIOM): RIO did well and really underscored its rebound potential
over the shortened and less populated Christmas week, with really decent volumes despite the
general and normal volume dearth for the festive season. There’s still a long way to go for our
Top Pick stock and your author’s largest (by some way) position. A lot of damage still needs to
be repaired, but the action was strongly in the right direction and that’s all we can reasonably
expect for the time being.
The month coming should provide newsflow catalysts that I believe will add fundy strength to
the technical bounce seen in the last couple of weeks. Production in 4q13 is going to be
stronger than nearly everybody expects (barring readers of these pages) and cash costs are
doing something unusual for the junior sector in that they’re dropping fast, not just treading
water or making slight improvements.
I know what ‘Boy Who Cried Wolf’ means and as such, calling the bottom (or near bottom) as
seen in IKN240 dated December 8th was good, though not anywhere near as effective as it
might have been if my “Fundies are good! Buy/Add/Hold! No worries here!” declarations that
came before that edition hadn’t been as off-track as they proved to be. With that said, this
stock did go through several stops from cheap, to very cheap, to damned cheap all the way
down to ridiculous bargain time at the bottom of the slump and errors aside, at least that
moment was identified as such on these pages. It’s now high time for RIO.to to recover
seriously, not just partially, from its woeful 2013 and as the panic subsides I expect the
company to do just that.
Pretium Resources (PVG) (PVG.to): See ‘Market Watching’ below for a short addendum on
last week’s note in the form of some useful and constructive criticism from a fund manager
friend. In trading PVG didn’t do much more than revolve around last week’s closing price.
Volumes were perky enough, especially in the US ticker.
Dalradian Resources (DNA.to): It sunk late day on Monday to 55c and didn’t trade at that
price on Tuesday Christmas Eve, and as I was slightly asleep at the switch on both days I didn’t
add any cheap slivers (more awake and I probably would have tried, at the very least). Volume
of 272k on Monday was impressively large for this type of sleepy week, the other days low.
There was plenty of 61c on offer Friday.
Minera IRL (MIRL.L) (IRL.to): More cleaning and repair of a nasty break in the stock price,
but again volumes were modest. However, we did have news on the option payment that IRL
has due to Rio Tinto, as on December 24th (morning) the company announced (3) that it had
come to an agreement with Rio Tinto (RIO.L) on the upcoming option payment for Ollachea.
The new deal is to pay 100% in shares, instead of shares-plus-cash, and here’s a chunk of the
NR for your consideration:
6
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

The first instalment is 34% of the total amount due to Rio Tinto in respect of the final
Ollachea payment, or $7.3 million. The shares will be issued between January 7 and
11, 2014.
The price per share, for purposes of calculating the number of shares to be issued, on
both the first and final instalments, will be the lower of C$0.179, representing the 5-day
volume-weighted-average price ("VWAP") on the Toronto Stock Exchange ("TSX") on
date of signing the most recently revised agreement, or the TSX's 5-day VWAP on the
day on which an instalment is paid. The 5-day VWAP on the signing of the previous
amendment was C$0.242. Other terms on the payment of the first instalment remain
unchanged. The exchange rate between the United States and Canadian dollars is
based on the average prevailing exchange rate during the 5-day VWAP period as
posted by the Bank of Canada. Assuming a 5-day VWAP of C$0.179 and the
prevailing exchange rate, approximately 44.1 million ordinary shares of Minera
IRL would be issued to Rio Tinto, which would result in Rio Tinto owning
approximately 19.4% of Minera IRL on a non-diluted basis.
What we’ll have at the end of this is a company that has a touch over 223m shares out, and
that’s a lot already. That’s a negative of course and if the assumption that at least some of the
cash needed to build Ollachea will come from a Rights Issue, we’re looking at a company that
could easily see its share count balloon to 450m S/O and beyond in 2014. This needs to be
considered, as does the option of us current longs not taking up any participation in the rights
issue (personally I’ll wait until the time and the terms are unveiled), but the presence of Rio
Tinto in large here means that sponsorship will be as close to guaranteed as can be expected in
this market.
Minera IRL’s dilution is a problem and it has me seriously considering whether to drop the stock
form its ‘Top Pick’ position on the list. In mitigation, that Top Pick was called with the stock at
24c, co in absolute money terms we’re really not that far from breakeven on the call, despite all
its trials and tribulations. However I will say clearly that I prefer the near-term opportunities
presented by Rio Alto (RIO.to) (RIOM) more than this stock at the moment.
Focus Ventures (FCV.v): If FCV starts moving higher than this Friday’s 21.5c finish, my pet
theory about how it will stick around 20c due to those warrants may need to be thrown out.
The next magic number for FCV to target is 25c, because if (repeat if) it can reach, overcome
and then trade above that price for 20 consecutive days, FCV can force the exercise of a whole
bunch of those warrants and will be in a relatively strong cash treasury position (for the first
time in a long time). I’m still expecting it to stay under 25 for the moment, but just want to
mark your cards on the potential.
Tahoe Resources (THO.to) (TAHO): It’s a short counterweight to the longs held and again
we did well on the pairing, as the TAHO short dropped less (-4.2%) than most of the main
longs’ gains (e.g. and ignoring RIO’s good bounce, BTO up 8.0%, DNA up 7.0%). That makes it
a welcome loss.
Lara Exploration (LRA.v): The significant rally on admittedly modest volumes continued last
week. Still no news however, so I’m guessing that newsflow in the days to come will go a long
way in deciding whether there’s any real meat on this bone. Certainly not complaining about
the rally, but my cost average is still higher than where we are.
The Copper Basket
After fifty-two weeks of 2013 The Copper Basket is showing a 32.26% loss to level stakes.
7

company ticker price 1/1/13 Shares out Market Cap current pps gain/loss%
1 Lumina Copper LCC.v 9.43 43.61 267.77 6.14 -34.9%
2 NGEx Resources NGQ.to 3.40 168.66 247.93 1.47 -56.8%
3 Reservoir Min. RMC.v 2.41 41.68 220.90 5.30 119.9%
4 Augusta Res AZC.to 2.43 144.35 217.97 1.51 -37.9%
5 Copper Fox CUU.v 0.83 402.96 149.10 0.37 -55.4%
6 Hot Chili Ltd HCH.ax 0.72 297.46 127.91 0.43 -40.3%
7 Nevada Copper NCU.to 3.50 80.5 107.87 1.34 -61.7%
8 NovaCopper NCQ.to 1.80 53.02 89.60 1.69 -6.1%
9 Panoro Minerals PML.v 0.62 204.71 75.74 0.37 -40.3%
10 Western Copper WRN.to 1.39 93.68 66.51 0.71 -48.9%
11 Curis Resources CUV.to 0.70 63.13 37.25 0.59 -15.7%
12 Candente Copper DNT.to 0.375 122.05 32.95 0.27 28.0%
13 Oracle Mining OMN.to 0.80 49.03 13.24 0.27 -66.3%
14 Yellowhead Min. YMI.to 0.59 63.45 12.06 0.19 -67.8%
15 Strait Minerals SRD.v 0.08 57.26 2.58 0.045 -43.8%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg -32.26%
The end and in 2013, our Copper Basket of junior, exploration stage copper mining companies
lost just under a third of their value overall
(and thank the stars we included Reservoir Copper Basket 2013 average, weekly
Minerals in the mix). A sorry show in 2013, 12%
8%
which is now put to bed. As of next week
4%
we’ll have he re-set 2014 list with its three 0%
-4%
new entries and baseline prices as per the
-8%
December 31st close. -12%
-16%
-20%
To this week’s changes, which saw ten W- -24%
o-W winners (NGQ.to, LCC.v, AZC.to, -28%
-32%
HCH.ax, WRN.to, PML.v, NCQ.to, DNT.to, -36%
YMI.to, CUV.to) and five losers (CUU.v,
NCU.to, RMC.v, OMN.to, SRD.v). Best
moves came from Candente Copper
(DNT.to up 28.6%), Western Copper &
Gold (WRN.to up 18.3%), NGEx Resources (NGQ.to up 16.7%), NovaCopper (NCQ.to 11.9%)
and Lumina Copper (LCC.v up 11.8%), with most of those rebounding from previous weeks’
lows. The worst loser is Strait Minerals (SRD.v down 10.0%).
Here’s how our component stocks have ended the year (the other end-quarter results in grey
behind the red final score). This
chart excludes Reservoir Minerals
and its sector whupping +120%
annual performance, only because it
skews out the other number so
greatly. In fact all other stocks have
returned a loss on the year, form the
minor negative of NovaCopper all the
way through to the 60%+ losses in
Nevada (NCU.to), Oracle OMN.to)
and Yellowhead (YMI.to). Particularly
soft in 4q13 were AZC.to, SRD.v,
CUU.v and NCU.to, while Lumina
(LCC.v) made the bets recovery
outside of Reservoir’s continued
success, of course.
8
ht6naj ht02 r3bef ht71 r3ram ht71 ts13 ht41 ht82 ht21 ht62 ht9 dr32 ht7luj ts12 ht4gua ht81 ts1pes ht51 ht92 ht31 ht72 ht01 ht42 ht8 dn22
source: IKN calcs, TSX data
31/1/1
morf
egnahc
%
The Copper Basket: Component performance after 52
20%
weeks (without RMC.v)
10%
0%
-10%
-20%
-30%
-40%
-50%
-60%
-70%
-80%
ot.QCN ot.VUC ot.TND v.CCL ot.CZA v.LMP xa.HCH v.DRS ot.NRW v.UUC ot.QGN ot.UCN ot.NMO ot.IMY
source: IKN data

We move to copper market prices. The good weekly performance in the basket was
undoubtedly a knock-on effect of the rise in the
price of copper, which can be seen in this five
day chart. The spike came on December 24th
amidst plenty of market chatter about big instos
going long copper and one trading desk trying
(and mostly succeeding) to take a large chunk of
the LME copper action for itself.
The way last week’s price chart looks compared
to the last four or five months gives us greater
context, because that looks like a breakout to me
(or anyone else for that matter). However, we
should add in the caveats that 1) we thought
copper broke to the downside in early November,
only to recover its channel and 2) despite the
futures pits action in copper last week, real
physical trading action was low level due the it
being Christmas week. There are tow doubts that
the present rally will have to shake off before I
get really interested and abandon my own
medium term bearishness on the metal.
As for a longer-term chart, here below is one with some more lines scribbled in for your
consideration. Assuming this rally holds, $3.50/lb looks a line in the sand while above that,
there’s a case for blue-sky all the way through to $3.80/lb. If we start seeing those market
prices turn up for copper, 2014 will surely be better for the juniors.
9

Time for inventories and the year-end wrap-up (we’re close enough). Here are the monthly
tracking charts that again show a drop in world warehouse stores of copper as the storage arb
trade unwinds.
Copper inventories, per month 2012/2013
1000000
800000
600000
400000
200000
0
Notably, the proportion of stocks held in LME and Shanghai has remained roughly equal in the
last quarter, but let’s not forget that LME is the daddy of the group. As for the weekly inventory
changes, total world stocks dropped by 11,678t (2.2%) to 517,008t. Of that total, LME
warehouse inventories dropped by 11,600t (3.0%) to finish the week at 370,950t, Comex
stocks were down just 0.5% to 14,930mt, while Shanghai Future Exchange warehouse numbers
were unchanged at 131,128mt.
A final reminder: This time next week DNT.to, OMN.to and YMI.to will be gone from our basket,
replaced by COP.to, AQM.v and CDB.v.
This week no coverage on our basket stocks, as real news was thin on the ground and all we
really saw was a sector bounce on copper’s move, combined with sharp rebounds from those
recently oversold names (eg NGQ.to) and end-of-year tape painting in others not worth our
time (e.g. DNT.to). Next week we’ll start taking a closer look at the components again, starting
with the new arrivals most probably.
The Lottery Ticket Basket
After 52 weeks of 2013 The Lottery Ticket Basket is showing a 38.93% loss to level stakes.
10
21.naJ bef ram rpa yam nuj luj gua pes tco von ced 31.naJ bef ram rpa yam nuj luj gua pes tco von ced
Mt Cu Copper inventories: percentage held per exchange
80
LME Shanghai Comex 70
60
50
40
30
20
10
0
source: Cochilco
21.naJ bef ram rpa yam nuj luj gua pes tco von ced 31.naJ bef ram rpa yam nuj luj gua pes tco von ced
LME Shanghai Comex
source: Cochilco

company ticker price 1/1/13 Shares out Market Cap current pps gain/loss%
1 Marlin Gold MLN.v 0.10 680 47.60 0.070 -30.0%
2 Eagle Star Min. EGE.v 0.125 79.13 15.83 0.200 60.0%
3 AQM Copper AQM.v 0.08 105.57 12.14 0.115 43.8%
4 Fancamp Expl. FNC.v 0.125 177 7.97 0.045 -64.0%
5 Bellhaven BHV.v 0.14 136.81 4.10 0.030 -78.6%
6 Inca One Res. IO.v 0.12 34.0 3.23 0.095 -20.8%
7 Netco Silver NEI.v 0.125 9.4 2.91 0.310 148.0%
8 Copper North COL.v 0.10 58.7 2.35 0.040 -60.0%
9 Tango Gold TGV.v 0.13 76.24 2.29 0.030 -76.9%
10 Gryphon Gold GGN.to 0.085 194.64 1.95 0.010 -93.5%
11 Agave Silver AGV.v.v 0.30 21.55 1.40 0.065 -78.3%
12 Darwin Resources DAR.v 0.20 26.16 1.18 0.045 -77.5%
13 Glass Earth GEL.v 0.155 105.67 1.06 0.010 -93.5%
14 Rio Cristal RCZ.v 0.025 17.259 0.43 0.025 -90.0%
15 Firestone Ventures FV.v 0.045 36.82 0.37 0.010 -77.8%
Portfolio avg -38.93%
The last week of our failed experiment. This time next week this space will be taken up by our
new larger-cap tracker that will
hopefully be more useful to readers 25% Lottery Ticket Basket 2013 average, weekly
20%
that this 2013 sector coverage. As 15%
the final weekly average table 10%
5%
indicates, the writing was on the 0%
wall for the (lack of) use in this -5%
-10%
sector by mid-May and it’s been a -15%
broken sector ever since, -20%
-25%
judgement duly passed on the -30%
-35% micro-caps as a group. Yes there
-40%
have been a couple of success -45%
stories in and amongst the majority
of failures, but as a group there’s
been little to hold the attention.
Anyway, to wrap this up we had four stocks that made gains last week (MLN.v, AQM.v, EGE.v,
IO.v) and four that showed losses (FNC.v, TGV.v, AGV.v, NEI.v), with the other seven
unchanged and indicating the apathy for micro-names better than a thousand of my words.
We’re going to keep AQM Copper (AQM.v) and Darwin Resources (DAR.v) in 2014 as they’re
part of our other lists, and as noted last week some soft radar coverage is merited by Bellhaven
(BHV.v) and Marlin (MLN.v), because the former could become a trade vehicle on a
sector/Colombia rebound while the latter has been one of the veyr very few companies to have
truly impressed with its attitude and aggressiveness in the face of a poor market. Thus ends our
Lottery Ticket Basket.
Regional politics
Regional risk review update, revised edition, third update
It’s time for our regular end-of-quarter overview of the region’s political risk scene for junior
mining. This is the third time for the new, revised format with the first one seen in IKN218 and
the second in IKN230. The old style ran every quarter until IKN204.
11
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 ht42 ts1ced ht8 ht51 dn22 ht92
source: IKN Weekly data, TSX
2102/1/1
morf
egnahc
%

A quick reminder of the new-ish scoring categories and system, which is dealt with in detail in
IKN218. The six categories are:
a) National Government Miner Friendly: The country on its national stance towards
mining activity.
b) Community/Social Miner Friendly: The overall attitude of locals towards mining,
either in specific zones or in country regions.
c) Foreign Direct Investment (FDI) Friendly: The openness towards FDI and the
safeguards it gives to foreign capital looking for a home.
d) Mining Culture: Countries or regions with generational traditions in mining are easier
places in which to operate than those which have little previous exposure to formal
mining operations.
e) Geopolitical Optics: The way in which the outside world sees this country, an
important factor, no matter if the perception be right or wrong.
f) Internal/National Political Stability: A gauge of how stable the country in question
is politically.
Second, these days we concentrate on nine countries with the potential to host companies,
rather than try to offer a comprehensive LatAm-wide view that takes in countries with little or
no appeal for investment or speculation in juniors. Therefore we focus on Chile, Peru, Mexico,
Brazil, Colombia, Nicaragua, Dominican Republic, Argentina and Guatemala. We also tip a hat
towards three other potential jurisdictions in Panama, Uruguay and Guyana, but that’s about as
far as we go. The other countries listed are best considered as being watched, not much else.
So without further ado, here’s the updated table. Below come the country notes.
September'13 Latin American Country Risk For Foreign Mining Companies
Nat. Govt Community/Social Geopolitical Internal Nat.
Country FDI Friendly Mining Culture Total
Miner Friendly Miner Friendly Optics Political Stability
LatAm countries under active consideration for junior mining project location
Chile 9 7 7 10 9 9 51
Peru 9 7 8 9 7 7 47
Mexico 7 7 7 9 8 7 45
Brazil 7 5 7 8 8 7 42
Nicaragua 8 6 7 6 6 6 39
Colombia 6 4 8 6 7 5 36
Dom Rep 7 5 6 5 6 7 36
Argentina 8 6 3 6 3 5 31
Guatemala 7 2 5 3 4 5 26
Potentially relevant LatAm countries for junior mining
Panama 7 5 9 4 9 6 40
Uruguay 9 4 7 3 8 9 40
Guyana 8 5 6 5 4 3 31
Countries of little or no interest for junior mining exposure
Bolivia 3 5 2 9 3 8 30
Paraguay 5 5 6 3 3 6 28
Honduras 7 4 4 5 3 4 27
Ecuador 5 2 3 4 4 7 25
Costa Rica 1 1 5 1 6 7 21
Haiti 6 3 4 1 3 3 20
El Salvador 1 1 4 1 6 7 20
Venezuela 1 5 1 3 1 5 16
source: The IKN Weekly house estimates
12

Active consideration countries
Chile: Unchanged
It’s strange, but every time I sit down to write this quarterly review I feel stumped for things to
say about the best region in Latin America to go mining, i.e. Chile. Perhaps it’s because no
news is good news, perhaps it’s just an unusually stable country, but even with the upsets
created by the Pascua Lama problem and a Presidential election in the quarter just gone, things
remain remarkably quiet an on an even keel.
Peru: Community/Social Miner Friendly up 1 point
The way in which the Southern Copper (SCCO) Tia Maria project managed to gain its necessary
‘social licence’ after its series of community meetings may have been by force of police numbers
quelling protests, more than true debate and agreement between company and community, but
in the end it’s the results that count and are remembered so the process was net positive for
the image of a country that has had trouble in moving the more polemic projects on its books
into action. Added to the community positives of the quarter was the true and genuine
agreement between locals around the Constancia copper project and owner HudBay, as well as
the green light for expansion of the massive Cerro Verde copper mine in Arequipa (about 20km
from here), the smooth start of the Antapaccay mine that’s seen little in the way of pushback
and the official opening of the Toromocho copper mine (with President Humala cutting ribbons
and making lame-ish speeches).
It’s not a countrywide panacea and it never will be, for example expect noise from the local
referendum against the Buenaventura-owned (BVN) Tambogrande project in Piura, set to
happen today and results out on the wires tomorrow Monday. Conga is still well and truly stuck
(no matter what Mining Minister Jorge Merino or Dialogue High Commissioner Vladimir Huaroc
would like you to believe in reports this weekend) and will be the big political factor in the
Cajamarca regional elections of next year. Cañariaco will never happen. Shahuindo has more
local problems than just being in Cajamarca. Coimolache (also in Cajamarca) is potentially the
next to have headline making problems according to latest reports. It will always pay to be
picky and choosy about the geographical location of your investment vehicle in Peru mining, but
we can say that the early-year government pledge to get the sector moving hasn’t been just
empty words and the will has been good. Companies these days pay much more attention to
their vital community relations and as long as there hasn’t been a serious snafu between
villagers and mining companies in the past, results are generally to the positive as a result.
Bottom line: Some improvement in Peru this quarter. It’s still one of the best places to go
mining in the region as long as your specific location is in good shape.
Mexico: National Government Miner Friendly down 1 point, Community/Social Miner
Friendly up 1 point, Geopolitical optics up 1 point
The national government score for mining is cut by one point, while geopolitical optics gets
raised by the same amount. This might seem contradictory at first, but the message we’re
trying to get across is that the parliament’s decision to raise royalties to 7.5% (+0.5% for
precious metals) shines a harsh light on the country’s fiscal attitude towards mining, but at the
same time we saw a history-making decision to open Mexico’s hydrocarbon sector (Pemex etc)
to foreign investment for the first time, which has scored very large bonus points with the
outside world (e.g. the ratings agencies such at S&P improved Mexico’s rating in the
aftermath). So on the one hand you have a country that wants more cash from its mining
operations to go to government (local and national, often to fund community projects) while on
the other, Mexico as a macro region has put a very large and welcoming “open for business”
plaque on its front door. In the long run, the second one is probably more important.
Meanwhile the Community/Social Miner Friendly score has been raised by a point this quarter,
too. This is a nuanced call, because there is still significant ecology-based opposition in the
country hotspots (Baja California Sur, Chiapas, Morelos, Veracruz, parts of Oaxaca) that’s now
getting its local opposition groups organized into a national umbrella group. Plus of course
13

there’s the ever-present narco-factor that raises local risk sky high and halts progress in other
states (e.g. Guerrero, Chihuahua etc). However, there has been enough improvement in the
overall national scene to warrant the addition of a point to the score, as Mexico’s traditional
pro-mining areas are aware of the slump in metals prices and want to attract (or often just
keep) companies to their areas.
Brazil: Geopolitical optics down 1 point, Internal National Political Stability down 1
point
The national stability number gets notched down a point more as a precautionary measure than
anything else, as 1) 2014 is the big election year in Brazil so we need to watch how the pre-
campaign jostling for position affects the government and its capacity to govern and also 2)
hosting the football World Cup Finals is no small matter, so things will need to go off smoothly
and without the type of large-scale street protests we saw in the middle of this year.
Nicaragua: Geopolitical optics up 1 point
This one was kind of difficult to judge because on the one hand you have the continued open
door policy to mining companies in Nica and the solid macro evidence that it’s working,
including the way that gold was the country’s number one export by dollar value in 2013 for the
first time ever. Reports of a government and bureaucracy that’s easy to work with continue to
hit your author’s desk (though nothing projects-wise turns me on the same way as BTO) and
it’s now firmly established as the best jurisdiction to go mining in Central America.
The potential downside is the political structure, because Daniel Ortega is mad keen on
entrenching himself in power and to that end has now pushed through a constitutional change
that will allow him to run again for President (and it’s odds on he’ll win again, too). What’s
remarkable is the distinct lack of noise from the rest of the world about these strong-arm tactics
and it’s left to the reader to imagine the type of shock and horror howling you’d get if a
regional “unfriendly” government leader (let’s take Correa in Ecuador or Fernandez de Kirchner
in Argentina as examples) tried to change their rules in the same way. What strikes me here is
that as long as Nica plays ball with the monied power in the world, we’re not going to get much
i the way of pushback to Ortega’s power grab but if internal policies change, watch out.
That aside, Nica remains a happy hunting ground and is now higher placed than Colombia
Colombia: National Government Miner Friendly down 1 point, FDI Friendly down 1
point, Geopolitical optics down 1 point, Internal National Political Stability down 1
point
We reported overall improvement in the Colombia cause last quarter, but the country seems to
have taken it upon itself to be as obstructive as possible to the hard rock mining industry over
the last three months and a lot of the progress has now been unwound. What that means in
numerical terms is a drop of four points from its overall score.
Let’s take the issues one by one:
• National Government Miner Friendly down 1 point: My only debate on this point was
“we dock them one point or two?” because the government’s lip-service of wanting a
dynamic motor of growth through mining is not matched by its deeds. The latest way in
which Colombia has decided to slow everything down is via the appointment of a new
Environment Minister (see recent IKN Weekly coverage of EOM.to), who has decided
that innovative ideas and consensual talks are the way to move forward on the key and
polemic Páramo de Santurbán nature reserve vs mining and development issue.
But wait! There’s more! The latest from the environment ministry is that they want
companies to apply for and receive environmental permits in order to do exploration
work. Talk about adding layers of bureaucracy (4) this is going to slow even the
exploration level work down to a crawl and fill the already inefficient government
permitting offices with more paper.
14

• FDI Friendly down 1 point: A knock-on effect of the legislative stupidity in Colombia is
the lack of new money entering the sector. As reported last week, Colombia now
expects mining investment to drop by around 5% to 7% in 2014, the first year-over-
year decrease since the sector hot decade began.
• Geopolitical optics down 1 point: The problem from the outside looking in is how
Colombia’s descent into sector inertia is triggering all the classic red flags associated
with working and dealing with a South American country. Ineffectual government,
never-ending red tape and militant local populations are just three of the topical
subjects, to which we can add the way in which skirmishes and terrorist violence is still
making the news despite the peace talks (which does confuse things). In the junior
mining sector, all companies need to do is look at the way in which exploration stage
projects have been allowed to get so far, but then hit a brick wall when it’s time to
move from exploration to development, mine construction and eventual operation.
• Internal National Political Stability down 1 point: We’re now inside the election year and
although current President Juan Manuel Santos is favourite (if concrete progress is
made with the FARC-EP peace talks in the next three months he’ll become red-hot
favourite, as it’s the single biggest political issue on the table in Colombia) it’s no given
thing here and there’s a real live campaign to get through (not just a we-know-who-
will-win campaign of the type seen in Chile and Ecuador) and that brings its own
stability concerns.
Colombia has all the look of a country taking one step forward and then two steps back on
mining. The rocks are there, the government wants the sector to take off, other business
sectors have taken root and grown, but mining is as stymied as it was two years ago. Part of
the problem is a government that wants to please all the people all the time. Another is that the
country just doesn’t have a tradition of formal, large-scale mining, the “mining culture” that
places such as Mexico, Chile and Peru enjoy that’s worth its weight in gold (almost literally,
too). Artisanal-type operations, big project are quite another and Colombia is simply making no
progress with its plans.
Dominican Republic: National Government Miner Friendly up 1 point
Things have settled nicely in Dom Rep since the episode with Barrick Pueblo Viejo which saw
the government extract a better fiscal deal from the gold mining company, which means
another point is added to the first column of our chart, the same result as last quarter.
President Danilo Medina has gone out of his way during the late-year addresses and assorted
speech opportunities to say nice things about Pueblo Viejo, about the deal (he mentions the
exact amount received from the mine at every opportunity and tells his fellow citizens what his
government will do with the cash next year) and about the way his country welcomes new
investment and interest from world mining companies. As for the The good news
Argentina: Community/Social Miner Friendly up 1 point
It’s always difficult to judge Argentina as a whole (perhaps we should just concentrate on the
regions where mining is welcomed, because others are closed books), but on the whole there’s
been a slight thawing in relations between locals and miners, mainly because specific regions
are now looking to mining for employment opportunities, which is good enough to add a point
to the score.
As usual, there are plenty of issues pending here, too. First up is the knock-on effect from the
changes at the top in the National government, because so far we’ve seen measured sympathy
towards the miners’ cause from new cabinet chief Jorge Capitanich, who’s keen on hearing all
sides of the arguments but is also there to get Argentina working and its GDP rolling so his
default position is something like “how can we get the sector moving more quickly?”.
To the negative is inflation-related matters (a good example of the effects is Troy Resources’
15

(TRY.ax) (TRY.to) share price development and also its costs numbers for its Casposo mine in
San Juan) and the fall-out from the Barrick pull-out of Pascua Lama, which is a bit of a black
eye for the CFK government (though they’ve been quick to blame Chile for the mess and that’s
deflected a lot of the criticism). Again, a change in national policy towards forex, the dollar and
new moves in the fight against inflation in 2014 (new FinMin Axel Kicillof has plans, apparently)
would do the mining sector a world of good, but nothing is a given in Argentina and any new
policy may turn out to be a negative for the industry, rather than a positive. We shall see.
In 2014, Argentina wants to make four mining projects its flagships and rah-rah their
development in order to create good feeling. Those include the Minera IRL Don Nicolas JV and
Goldcorp’s Cerro Negro, so if both those build-outs go smoothly in 2014 we’d be adding a
positive factor to the mix.
Guatemala: Internal National Political Stability up 1 point
Not my favourite jurisdiction, but it must be said that President Otto Pérez Molina’s hardline
policy against anti-mining and anti-hydroelectric project developments has managed to keep a
lid on the potentially explosive situation in the country, so credit and an extra point on the total
is deserved. There are still manifold issues faced by mining companies in the country and in this
type of institutionally weak country, changes to the outlook can be quick and dramatic. Perhaps
the single issue to watch out for in the quarter to come are the legal challenges to the Tahoe
Resources Escobal mine that opposition groups are pressing through the Guatemala
courtrooms. Any judgement handed down is unlikely to be definitive in nature and any adverse
ruling for the company immediately appealed (that will almost certainly let it continue
operating), but the Achilles’ Heel is there and any increase in perceived risk will hurt both it and
other projects.
Potentially relevant countries
Panama: National Government Miner Friendly up 1 point, FDI Friendly up 1 point,
Internal National Political Stability down 1 point
Two moves up and one move down in the quarter for Panama, as the country underscored its
FDI-friendly credentials via continued strong GDP growth (the region’s best if you discount the
Paraguay pure rebound number) and the government started to get its legislative act together
and make mining permits easier to get out of its stodgy bureaucratic system (in this respect,
Panama has been taking advice from Peru recently, not a bad idea). The downside is the
pushback from the anti-mining rural groups which is making waves. We should also factor in
the slowdown in investment at the First Quantum/Inmet Cobre Panama project, the flagship
mining development in the country which has upset locals who invested in infrastructure for the
surrounding area, only to see FM.to cut back on manpower and leave plenty of new auxiliary
investments (hotels, restaurants, plant contractors, etc) in the lurch.
Uruguay: National Government Miner Friendly up 2 points
The official support voiced by the government of Uruguay to mining, and specifically to the now
test case of the Aratiri iron ore project (see last week) was confirmed in the last few days when
the government spokesperson announced that the development would be confirmed in January
via an investment contract between State and company (5). The anti-mine groups in Uruguay
aren’t going to roll over and die on this news and you can be sure there’s a period of heated
debate to come in the next couple of months, but the signs are so far good that Uruguay will
accept formal, large-scale mining within its borders. What we the junior speculators need is a
company or a project of interest there on which we can ride a potential upswing in country
interest, as so far there hasn’t been an outstanding vehicle for the sub-sector.
Other countries
Bolivia: Geopolitical optics up 1 point, Internal National Political Stability up 1 point
Bolivia’s getting some recognition for its economic performance and relative political stability
these days, and as mentioned on the blog recently Evo Morales must be considered red hot
16

favourite to get a new term as President when the vote happens in October 2014. Bolivia’s
going through a purple patch economically but that doesn’t make it a good place to go and play
at junior mining, because the State hold on development is not going to let up any time soon
and the pattern of more restrictions on FDI in mining is set to continue. Avoid all exposure.
Paraguay: Mining Culture up 1 point, Internal National Political Stability up 1 point
The only real benchmark for Paraguay mining these days is Latin American Mining (LAT.v) at its
small Paso Yobai gold mine operations. The most recent news is that the company has reached
some accord with local artisan-type miners and is producing, so that’s a good enough thing. But
organized exploration and development in this archetype Banana Republic will always be very
precarious and as such, not a region for us.
Honduras: : Geopolitical optics up 1 point, Internal National Political Stability up 2
points
It has to be said that the Honduras elections went off calmly enough and with the right wing
holding on to power, things are likely to remain the way they are. Which isn’t good if you
happen to be an opposition journalist or anyone who cares about human rights in the country,
but it will probably keep a lid on the worst of possible routes. Therefore the points scores get a
raise, but the call to avoid remains as true as ever.
Ecuador: National Govt Miner Friendly up 1 point, Community/Social Miner Friendly
up 1 point
The Correa government keep on making its pro-mining noises and by the looks of the action in
stocks such as Dynasty (DMM.to), a few people are falling for the Siren Song. The advice here
is “don’t do it”.
Venezuela: Internal National Political Stability down 1 point
And you thought Venezuela couldn’t get any worse? The latest form the country that the
Central Bank is going JV with State oil company PDVSA in order to develop gold projects
(probably Las Cristinas, Las Brisas and the Rusoro Choco properties) as a national company just
underscores the stay away signals.
Conclusion
This quarter, the loser is Colombia and the winner is Nicaragua, along with all the regional
countries that have a tradition of welcoming mining. The one to watch in the quarter to come
may be Uruguay, because if the government gets its way it will become part of the miner-
friendly geography in South America.
Market Watching
Gran Colombia Gold (GCM.to): publicity is publicity
"I don't care what they say about me, just
make sure they spell my name right"
Attributed to P.T. Barnum
The IKN Weekly isn’t normally the sort of publication in which you’d expect to read about the
Sundance Film Festival, but as life is full of surprises here we are.
The next edition of Robert Redford’s famous film festival happens in the second half of January
2014 and one of the films to be shown is ‘Marmato’. You can read about it here (6) but in the
briefest of terms it’s a documentary, six years in the making, of the town of Marmato in
Colombia where the locals are opposed to the arrival of Gran Colombia Gold (GCM.to) and its
plans to take over the area, move the town wholesale and then build an open pit mine on the
17

gold deposit where it sits. The documentary will focus on the locals’ struggle against the
company and is bound to favour them, in classic David vs Goliath style.
Now, as most here are fully aware your author is no fan of GCM.to or its head honcho, Serafino
Iacono (the story of how he tried and failed
to sue me for defamation can wait for
another day, so let’s just say that I’m not
expecting any Christmas or birthday cards
from the man). I’ve also had more than a
little shadenwhatnot in documenting the
debt-burdened slump of this way
overhyped mining company in the last
couple of years (and that price chart is
nasty, even by junior mining standards) but
I think the publicity that’s bound to arise
from the Marmato film is likely to help the
GCM cause, rather than hinder it, and
considering the deep discount at which we
find the stock these days it may even be a
trade-type rebound buy to consider in the next couple of months.
This ‘Marmato’ documentary is going to take a very critical stance against the company and
although I think that view is deserved, that’s just my own opinion and therefore insignificant.
Thing is, I’m also aware of the flipside to this story and it’s not as if the locals of Marmato are
some group of totally innocent victims when it comes to environmental issues, mining health
and safety or wider issues such as undeclared production that never gets taxed. Also, GCM for
all its faults and extremely arrogant attitude has a plan that would increase production, declare
every ounce correctly, would be cleaner (on a day-to-day basis at least, though open pits have
automatic issues) and would provide formal employment for locals. Of course it’s there as a
capitalist entity and not as some sort of local NGO charity so wants to make its own money, but
it’s not all negative in this story. Therefore, if this ‘Marmato’ documentary unleashes the issue
to a wider audience, they’re bound to hear at first just the one side of the argument. This could
well give an opportunity of true debate and rebuttal to GCM and if so, they’ve been given a
chance to reach a new and wider audience with their project and plans (one that’s formally
backed by the Santos administration as well). Now for sure Serafino Iacono isn’t going to win so
many converts from the Sundance audience directly, but if a wider debate is forthcoming it’s
plans could still be received favourably by those with a political persuasion that’s more right of
centre (let’s say, all diplomatically and such). Or in sum, once any initial negative publicity wave
is dealt with, GCM has the chance to reach a new and potentially sympathetic segment of
society, both in North and South America.
There are drawbacks to the current GCM as an investment vehicle, or even a near-term trading
vehicle, that need to be highlighted at this point. The main problem is the balance sheet (not
uncommon in junior world) which is woefully short of real cash treasury and up to its gills in
real financial debt obligations. The second problem is the high cash cost of its other, non-
Marmato mining operations in Colombia that mean the company is making a loss at current
gold prices. These two combine into a cash crunch and it’s why GCM launched a round of equity
placement on November 19th (7) to raise between $7m and $15m (that’s a big spread, no?) in
order to alleviate the problem.
We’ve heard little or nothing on that placement since then and it’s the type of thing that would
normally be wrapped up before the end of the year, so perhaps news is due in the next two
days. At this point, let’s note that Iacono has plenty of rich friends so if he can’t get them on
board (i.e. they don’t want to throw their good money after bad) it would be a very negative
signal for the near-term future of GCM, no matter what debate arises from the Sundance
Festival.
18

To wrap up this brief headsup piece, it may be worth putting GCM on the active radar but it’s
going to need a couple of large pieces to fall into place before it becomes interesting:
• I’d want to see GCM close on its equity raising and get enough treasury on board to be
able to limp through the next couple of quarters at least.
• I’d want GCM to take any opportunity of rebutting negativity from the upcoming
documentary and raise awareness of its plans.
If those two happen, GCM may be a trade. Headsup complete, let’s see how the next month or
so goes.
Pretium (PVG) redux: Mailbag (including some slapdown, some agreement, some
extra food for thought)
After last week’s piece on Pretium Resources (PVG) I received a most interesting piece of
correspondence from a market professional who will remain anonymous, but suffice to say it’s a
person whose views on mining companies I’ve held in the highest regard for many years. I’ve
been given permission to share the mail here with a larger audience, as long as a couple of
redactions happen that protect the innocent and guilty alike. It’s one to share for three reasons:
1) I am taken to task for getting a part of last week’s note factually wrong, regarding my
comments in IKN242 on the way the previous reserve is now being classified as a
resource. Please see paragraph two for that and the slapdown is welcomed, because
facts beat blather every time.
2) The main part (or what I believe to be the main part) of my shortside argument is
given support. Please see paragraphs 3, 4 and 5.
3) A final point, which makes very interesting reading on the contributions of grade
populations at VOK. It’s something I hadn’t considered, but it goes with the general line
of how PVG/Snowden seem to be pushing on the easiest method to vend VOK, rather
than the best.
Anyway, enough of me, I’ll leave you with some much smarter comment on PVG.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
“...as it turns out, I had to go back through the stack of 43-101s issued by PVG to find
then reconstruct the VOK resource from November 2011 ... they never did publish the
Nov’11 resource below, rather I tallied the numbers from three tables in their January
2012 43-101 on the then resource to separate a VOK estimate. So now we have the
four VOK resources to compare (see table below).
The point to the email is to clarify that a resource is no a reserve, so your criticisms
that they’ve taken a step back and made a material adjustment to the indicated grade
are both erroneous. PVG updated the resource estimate and has not yet developed a
mine plan (ie stopes, drifts and sequencing) ergo they are not yet in a position to
publish an updated reserve. The likely reason that the current reserve (15.1Mt @ 13.6
g/t for 6.6Moz) is lower grade than the resource is due the inclusion of dilution and
certain mining losses.
If we compare the resources, the grades and contained ounces compare reasonably
well. This doesn’t surprise me at all as there is considerable incentive for Snowden to
defend their work (reputation and lawsuits). Further, I agree it is interesting that
somehow they’ve managed to match the new indicated grade with the bulk sample
results (a skeptic might suggest this is a further attempt by Snowden/PVG to provide
evidence that their bulk sample was representative) despite the fact that it is highly
unlikely that such a small sample could compare so favourably with the overall
resource.
I was originally suspicious of the November 2011 indicated resource estimate after
reading their then 43-101. [The 43-101 compilers were] replaced by Snowden who
prepared the April 2012 estimate with NO NEW DRILL DATA. I was equally troubled
by the fact that two indicated resources could differ so dramatically and be presented
19

to comply with that classification. I find it surprising that they could subsequently go on
to double the tonnage and maintain that grade, but that is what they’d have us believe.
Anyhow, the point to my message is to (hopefully) clarify the error in your argument
regarding the apparent back-tracking and reduction in grade. I, too, do not believe a
word of the published feasibility study, although even if they only have a third of the
indicated resource they could develop a high quality underground, say 1000tpd, mine.
At a diluted grade of 12 to 14 g/t they’d be able to produce 100 to 150 K oz/a and make
a decent buck. This is not unlike Hoyle Pond (part of Goldcorp’s Porcupine Complex in
Timmins) that is the main profit centre to that operation. Given the 50 to 60 feet of
snow per year, they’ll never develop a pit at Brucejack (previously known as Snowfield)
and I agree it is difficult to imagine a reasonable bulk mining UG scenario.
One final matter that I found rather interesting is that in reviewing and compiling the
resources, I found a table in the April’12 and Nov’12 resources that showed the
contribution of grade populations that comprise the indicated resource at their 5.0 g/t
cut-off. I’ve presented the Nov’12 table below. I am curious about the justification of
incorporating 14.8Mt of 0.67 g/t into the >5.0 g/t resource. This makes no sense to me.
Couldn’t they have eliminated some of those tonnes, after all 14.8Mt represents quite a
volume? The fact that 96% of the indicated resource ounces are only in 8% of the
indicated tonnes would tend to support my suspicion that the VOK is better suited as a
small tonnage, high grade mine.
Continuing with the Radius Gold (RDU.v) B2Gold (BTO.to) arb idea
With B2Gold’s (BTO.to) decent move up to $2.29 on Friday, RDU saw a bit of buying and a
10.5c finish, after spending most of the shortened week at 9.5c. I was fishing at 9c and got
none (a couple of people got a few though) and will stay there for the days ahead, or may
move up to 9.5c if the juniors rally has legs. But that’s as far as I’ll go and I’d much rather keep
cash in the pile than chase this one.
As the table suggests, it’s keeping to roughly “under 30%” as the arbitrage which is at least
consistent with previous weeks, but on the other hand there’s no reason why it should do that.
With BTO at $2.30, a 9.5c buy would be a decent enough 36% difference so for the time being,
if there’s some 35% to 40% arb moment I’ll snap up the bargain.
Radius Gold (RDU.v): Arbitrage to B2Gold share price movements
BTO pps ($) other assets equal ($m) RDU pps "fair value" % arb to 10c % arb to 9.5c % arb to 9c
2.00 2.29 0.116 15.95 22.05 28.83
2.10 2.29 0.120 20.43 26.76 33.81
2.20 2.29 0.125 24.90 31.48 38.78
2.30 2.29 0.129 29.38 36.19 43.75
2.40 2.29 0.134 33.85 40.90 48.73
2.50 2.29 0.138 38.33 45.61 53.70
2.60 2.29 0.143 42.81 50.32 58.68
2.70 2.29 0.147 47.28 55.04 63.65
2.80 2.29 0.152 51.76 59.75 68.62
2.90 2.29 0.156 56.24 64.46 73.60
3.00 2.29 0.161 60.71 69.17 78.57
source: RDU data, IKN calcs
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Phoslock (PHK.ax): A headsup on a potential trade
Here’s a different idea for you, which is more of a headsup on a potential trade and isn’t one
that’s going to make it to the ‘Stocks to Follow’ list at any point. We’re also in high risk territory
trade-wise, so I’m going to consider you all big and mature and capable of making your own
mind up on whether this overview is of any interest, as well as not throwing your mortgage
cash at the equity.
Phoslock is a small Australian company...
• ASX listed “PHK”
• Share price at Friday’s close 5.9 Aussie cents
• Shares out ~239.6m
• Market cap ~$14.1m AUS
...which specializes in cleaning bodies of water (website here (8), with plenty of overview
literature to allow you to get the hang of the story quickly). Here’s the quick corporate blurb for
those who can’t be bothered to go that extra click just yet:
Phoslock Water Solutions Limited produces environmentally-friendly product
used in algae management. It manufactures and distributes Phoslock, a
natural product that works by locking away the phosphate present in the water
body, permanently preventing its re-release for use by algae. The Phoslock is
used in large lakes, drinking water reservoirs, prawn aquaculture ponds,
irrigation channels, golf course ponds, ornamental lakes, koi ponds, and
garden ponds in Australia, New Zealand, the United States, Canada,
Indonesia, Malaysia, Singapore, Taiwan, China, Korea, Germany, the
Netherlands, Belgium, Poland, Hungary, and the United Kingdom.
As you can see, this isn’t a junior mining company we’re highlighting today. Not so much in the
way of LatAm connection either, not at first glance of those destinations at least, but in fact the
reason why there’s a potential trade is indeed South American, it’s very topical and it’s also
likely to be lucrative for the company. In fact, it’s the 2014 Football World Cup Finals in Brazil.
The story is as follows: Belo Horizonte is one of the host cities of the 2014 World Cup Finals
(WCF), thanks to its famous and very large Governor Magalhães Pinto Stadium, known to the
world as the “Mineirão”. This stadium is
the stage for several of the big matches
in June and July of 2014, but it has a
problem nearby that Brazil wants to
solve before the visitors and assorted
dignitaries turn up. That problem is the
“Pampulha”, a very large man-made lake
right next door to the stadium that’s one
of the focal points of the city. The
Pampulha has become clogged up with
algae and other polluting matter and
Brazil doesn’t want people to get the
wrong (right?) impression of city life in
the country, so the race is on to clean
the lake and now (here for your
information is a photo of the Mineirão
taken from Wikipedia; in the background
the Pampulha is clearly visible and gives you a good idea of its proximity and size).
This is where PHK comes in, because it’s an industry expert in this field and has entered the
bidding for the lucrative contract to fix the lake up. One month ago the stock peaked at its 52
week high of 8c on unofficial reports that the contract was about to be awarded. That didn’t
21

happen and the process is ongoing, but word from Brazil is that the decision is now close at
hand. The same unofficial but well-placed word goes on to note that PHK is ahead of other
companies vying for the clean-up contract on all criteria and if the decision is made in a free
and fair manner, Phoslock looks....well, a lock for the job to make the water look good but do it
all in an environmentally safe and healthy way.
What can go wrong here? Simple, the company doesn’t get the job. Though with a 52 week low
of 4c there doesn’t look like there’s that much in the way of downside and a little patience
would probably see you out without losing anything if you take a punt.
What can go right here? PHK wins the contract, which I believe to be likely though not certain
(we must always leave room for decisions materially affected by “plain brown envelopes” in
Brazil, unfortunately). If this comes to pass, the chances of a significant bounce in the share
price are high. I’m not in the business of analysing this type of company normally and won’t
pretend to be crunching numbers back of house, but after discreet inquiries to people who
know a lot more a reasonable upside target on good news would be 50% and if things really
catch fire, a double wouldn’t raise too many eyebrows.
So there you have it: A little Christmas stocking filler form IKN, non-mining and a stock that’s
only quoted on the Australian bourse, but one with a time-sensitive story to tell in South
America that could bring it, and its shareholders, a decent win. There is risk involved (it’s a
penny stock, you should know the pack drill by now) but the reward potential is there and
interesting enough, plus the odds of PHK getting the job in Belo Horizonte are more than
favourable (put a gun to my head and I’d say an 80% chance, to give you a picture of how I
see things).
Personally, I’m going to try for some shares in this but 1) it won’t be a big position and 2) it’s
been a long time since I traded anything on the Australian exchange (I can get there via my IB
account) so maybe the tubes will be too rusty or maybe the act of transferring cash into Aussie
dollars will skim away too much percentage. These things I need to check however, whatever
comes to pass it’s not a trade that will be recorded as one of the ‘Stocks to Follow’, as I’m
treating it strictly as a side bet.
.
Conclusion
IKN243 is done, we end with bullet points:
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• Phoslock (PHK.ax) looks interesting enough to run a small punt trade and I plan to do
just that, as long as my account conditions allow (see above). If it gets the news that
people are expecting from Brazil, share price upside looks nailed on. Buy low, sell high,
that’s what they tell me.
• Away from the blog snark (9) Gold Resource Corp (GORO) surprised me by dropping its
dividend to just a penny per month last week. This suggests that it’s in worse financial
shape than even I assumed which opens the door for a new drop in the equity price.
I’m keen on letting this company and band of storytellers at board level have its chance
to tell tales in January about its production and 2014 plans, because the caca is only
likely to hit the ventilador when the real financials are published, first in March (4q13)
and then in early May (1q14). The window of opportunity to pick a spot and a price to
go short is large enough, patience is an ally.
• A fair start to the Fortuna (FVI.to) (FSM) trade, Rio Alto (RIO.to) (RIOM) bouncing
nicely, on the lookout to add a slice of Dalradian (DNA.to) and I still haven’t given up
on getting some cheap end Radius Gold (RDU.v) in order to pay that BTO arb. That’s
where my trading nose is taking me at the moment, but keeping cash cushion is also as
important as ever. I don’t want to commit too much and will liquidate the smaller,
nearer-term trades if necessary, because it’s still far from a bullish atmosphere out
there in he whacky world of juniors.
• However, I am modestly encouraged by the way in which the mining companies have
performed in December. The time is ripe for the “good’uns” to decouple from the
“bad’uns” and profitable miners/explorecos with quality projects re-rated. If only it were
that easy...
• Happy New Year to one and all! May 2014 bring you good health and happiness. If it
also brings financial prosperity then consider it an added bonus, because getting the
truly important things on your side matters more than cash in the bank.
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
Footnotes, appendices, references, disclaimer
(1) http://www.kitco.com/news/2013-12-27/Survey-Participants-Look-For-Higher-Gold-Prices-Next-Week.html
(2) http://finance.yahoo.com/news/gold-corporation-modifies-declares-instituted-140000261.html
(3) http://finance.yahoo.com/news/minera-irl-rio-tinto-agree-070000585.html
23

(4) http://www.rcnradio.com/noticias/mineras-tendran-que-tramitar-licencias-ambientales-para-exploracion-108670
(5) http://www.estrategiaynegocios.net/blog/2013/12/27/uruguay-firmara-en-enero-contrato-para-cuestionada-
explotacion-minera/
(6) http://filmguide.sundance.org/film/13934/marmato
(7) http://finance.yahoo.com/news/gran-colombia-files-preliminary-prospectus-215700624.html
(8) http://www.phoslock.com.au/IRM/content/default.aspx
(9) http://incakolanews.blogspot.com/2013/12/gold-resource-corp-goro-drops-its.html
Stocks To Follow Closed Positions, 2012
Closed in 2012 closed close PPS
Soltoro SOL.v jan'12 C$0.87 07-nov-11 C$0.94 8.0% cash moved to BCM.v
Gold-Ore Res GOZ.to feb'12 C$0.84 13-oct-10 C$0.98 16.7% trade closed on ELG.v offer
Minefinders MFN feb'12 U$11.68 17-nov-11 U$14.80 26.7% target made, trade closed
Iron Creek IRN.v mar'12 C$0.58 26-sep-10 C$0.31 -46.6% time up on small bad trade
U.S. Silver USA.to apr'12 C$2.18 15-mar-12 C$1.86 -14.7% ST trade no good, cut loss
Augusta Res. AZC.to may'12 C$3.10 29-ene-12 C$2.07 -33.2% bad mkt, bad trade cut loss
Bellhaven BHV.v may'12 C$0.50 22-sep-10 C$0.28 -44.0% new mgmt not impressive
Zincore Metals ZNC.to may'12 C$0.325 29-jul-11 C$0.17 -47.7% bad mkt, bad trade cut loss
Soltoro SOL.v may'12 C$0.70 18-mar-11 C$0.41 -41.4% bad mkt, bad trade cut loss
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% fail ST trade close pre split
Estrella Gold EST.v aug'12 C$0.91 27-mar-11 C$0.14 -84.6% Closed on port realignment
Fortuna Silver FVI.to sep'12 C$1.07 03-may-09 C$5.32 397.2% sell call $6.17/ Mar25
Strait Minerals SRD.v oct'12 C$0.125 09-dic-11 C$0.12 -4.0% closing coverage til FY13
Sunward Res SWD.to oct'12 C$1.47 13-mar-11 C$1.21 -17.7% sold, took loss
Gold Res Corp GORO oct'12 U$21.47 09-sep-12 U$17.40 19.0% Short trade closed
Yellowhead Min. YMI.to nov'12 C$1.00 01-abr-12 C$0.63 -37.0% sold, took loss
Primero Mining PPP nov'12 U$7.26 07-oct-12 U$6.73 7.3% Short trade closed
Bear Creek Min. BCM.v nov'12 C$3.38 07-nov-11 C$3.72 10.1% Took small profit
Vena Resources VEM.to dec'12 C$0.70 31-may-09 C$0.18 -74.3% Failed trade (caps F)
Galway Res GWY.v dec'12 C$2.19 24-nov-12 C$2.30 5.0% closed good ST arb trade
Stocks To Follow Closed Positions, 2011
Closed in 2011 closed close PPS
Sunward Res SWD.v jan'11 C$1.05 21-nov-10 C$1.63 55.2% target made, trade closed
Serengeti Res SIR.v mar'11 C$0.245 05-dec-10 C$0.285 16.3% sold pre-tgt, ST trade fail
Fronteer Gold FRG apr'11 U$2.37 03-may-09 U$15.24 543.0% buyout, trade closed
Minefinders MFN apr'11 U$9.09 07-nov-10 U$16.89 85.8% target made, trade closed
Metalline Min. MMG may'11 U$1.04 26-jan-11 U$0.89 -14.4% exit, resource disappointed
Peregrine Met PGM.to jul'11 C$0.87 06-mar-11 C$2.60 198.9% buyout offer, closed
Dynasty Metals DMM.to jul'11 C$4.20 03-may-09 C$2.85 -32.1% Sold. Fail. Move on.
Aura Silver AUU.v aug'11 C$0.22 13-oct-10 C$0.16 -36.4% Bad pick. Take loss
U.S. Silver USA.v aug'11 C$0.52 26-jan-11 C$0.71 36.5% closed to make room
B2Gold Corp BTO.to sep'11 C$2.80 12-may-11 C$4.27 52.5% target made, trade closed
Bear Creek Min. BCM.v sep'11 C$3.80 27-may-11 C$4.17 9.7% macro sell call victim
Minefinders MFN sep'11 U$14.70 10-aug-11 U$15.15 3.1% macro sell call victim
Great Panther GPR.to sep'11 C$3.03 22-aug-11 C$2.64 -12.9% macro sell call victim
Fortuna Silver FVI.to sep'11 C$1.07 03-may-09 C$5.36 400.9% sold 20%, macro sell call
Focus Ventures FCV.v nov'11 C$0.40 20-apr-10 C$0.20 -50.0% cut losses, bad trade
Regulus Res. REG.v dec'11 C$1.17 14-aug-11 C$0.52 -55.6% cut on news of poor 43-101
2009 and 2010 closed positions in appendices below
24

Stocks To Follow Closed Positions, 2010
Closed in 2010 closed close PPS
B2Gold Corp BTO.to Jan'10 C$0.88 08-nov-09 C$1.49 68.2% target made, trade closed
Radius Gold RDU.v Jan'10 C$0.18 23-aug-09 C$0.40 122.2% target made, trade closed
MAG Silver MVG mar'10 U$5.60 23-nov-09 U$7.28 30.0% closed in pdac week
Riverside Res RRI.v mar'10 C$0.435 20-sep-09 C$0.60 37.9% closed in pdac week
Amarillo Gold AGC.v mar'10 C$0.81 31-may-09 C$0.70 -13.6% closed in pdac week
B2Gold Corp BTO.to apr'10 C$1.24 18-feb-10 C$1.50 21.0% target made, trade closed
Lumina Copper LCC.v apr'10 C$0.84 14-jun-09 C$1.55 51.2% total position now sold
Troy Resources TRY.to may'10 C$1.10 03-may-09 C$2.25 104.5% sold on negative results
AuEx Ventures XAU.to may'10 C$2.51 24-may-09 C$3.38 34.7% trade closed
Nevada Copper NCU.to jun'10 C$3.27 14-mar-10 C$2.03 -37.9% need to lower Cu exposure
Carpathian Gold CPN.to jun'10 C$0.39 14-mar-10 C$0.35 -10.3% too exposed to cap raising
Amerix PM Corp APM.v jun'10 C$0.065 08-nov-09 C$0.05 -23.1% victim of macro bear
Antares Minerals ANM.v jun'10 C$1.42 06-dec-09 C$2.10 47.9% sold half
Vena Resources VEM.to jun'10 C$0.37 31-may-09 C$0.23 -37.8% sold half
Minera Andes MAI.to sep'10 C$0.75 28-jul-10 C$0.95 26.7% ST trade closed
Gold-Ore Res GOZ.to sep'10 C$0.52 01-aug-10 C$0.75 44.2% target made, trade closed
B2Gold Corp BTO.to sep'10 C$1.45 25-may-10 C$2.01 34.5% target made, trade closed
Blue Sky Uran BSK.v oct'10 C$0.41 19-may-10 C$0.22 -46.3% v small v bad trade closed
Dia Bras Expl DIB.v oct'10 C$0.14 30-aug-09 C$0.35 150.0% target made, trade closed
S. Amer. Silver SAC.to nov'10 C$1.38 24-oct-10 C$1.60 -15.9% loss on short, small fail
Ventana Gold VEN.to nov'10 C$7.92 27-jun-10 C$13.51 70.6% trade closed on buyout
Lumina Copper LCC.v nov'10 C$1.42 11-aug-10 C$3.65 157.0% trade closed
Antares Minerals ANM.v dec'10 C$1.42 06-dec-09 C$8.40 491.5% trade closed
Rio Alto Mining RIO.v dec'10 C$0.69 23-mar-10 C$2.16 213.0% trade closed
Coro Mining COP.to dec'10 C$0.585 03-oct-10 C$1.24 112.0% target made, trade closed
Stocks To Follow Closed Positions, 2009
Closed positions closed closing PPS
Cardero Res CDY/CDU.to May'09 U$1.20 03-May-09 U$0.87 -27.5% sold on negative news
Eastmain Res. ER.to May'09 C$1.04 06-May-09 C$1.315 26.4% trade closed
Radius Gold RDU.v May'09 C$0.165 03-May-09 C$0.235 42.4% trade closed
Latin Amer Min. LAT.v May'09 C$0.12 03-May-09 C$0.158 29.2% trade closed
Aquiline Res. AQI.to July'09 C$2.03 16-Jun-09 C$1.68 -17.2% took loss, bad timing
Chariot Resources CHD.to Aug'09 C$0.20 12-Jul-09 C$0.415 107.5% trade closed
Castle Gold CSG.v Sep'09 C$0.64 02-Aug-09 C$0.60 -6.3% ST trade didn't work out
Guyana Goldfields GUY.to Sep'09 C$2.30 12-May-09 C$4.50 95.7% profit taken
Los Andes Copper LA.v Sep'09 C$0.09 21-Jun-09 C$0.09 0% trade closed
Pediment Gold PEZ.to Oct'09 C$0.80 09-Aug-09 C$1.00 25.0% trade closed
Minera Andes MAI.to Oct'09 C$0.68 03-May-09 C$0.71 4.4% too much bad news
Dynasty Metals DMM.to Nov'09 C$4.18 03-May-09 C$6.01 43.8% half sold
Rusoro Mining RML.v Nov'09 C$0.55 03-May-09 C$0.57 3.6% underperformed
Important Disclosure
The information and opinions contained within this report reflect the personal views of the author and therefore all
material within should not be construed as accurate or reliable or be utilized as advice for investment or business
purposes. Independent due diligence and discussions with ones own investment and business advisor is strongly
recommended. Accordingly, nothing in this report should be construed as offering a guarantee of the accuracy or
completeness of the information contained herein, as an offer or solicitation with respect to the purchase or sale of any
security or as an endorsement of any product or service. All opinions and estimates included in this report are subject to
change without notice. It is prohibited to copy or redistribute this report to any type of third party without the express
permission of the author.
25