IKN #246Premium

The IKN Weekly
Week 246, January 26th 2014
Contents
This Week: Trades next week, We consolidated, In other news.
Fundamental Analysis: Trades next week, Shorting Gold Resource Corp (GORO).
Stocks to Follow: Overview, Rio Alto (RIO.to) (RIOM), Pretium Resources (PVG.to) (PVG),
Dalradian Resources (DNA.to), Minera IRL (IRL.to) (MIRL.L), Darwin Resources (DAR.v), Lara
Exploration (LRA.v), B2Gold (BTO.to) (BTG), Eco Oro (EOM.to), Focus Ventures (FCV.v).
Copper Basket: Overview, AQM Copper (AQM.v), Curis Resources (CUV.to), Reservoir
Minerals (RMC.v), Augusta (AZC.to) (AZC).
Low Cost Producer Basket: Overview.
Regional Politics: Peru/Chile/ The Hague and the big maritime border dispute decision
tomorrow, Argentina’s currency devaluation: A positive for producers in the country, Chile’s new
mining minister, Peru: Conga protests re-starting.
Market Watching: This rebounding market is still unforgiving with stocks that miss, Fortuna
Silver (FVI.to) (FSM).
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
Trades next week
It’s time to move a few pieces around the board and alter the portfolio to fit new
circumstances. I’m going to make three trades and potentially a fourth depending on its price:
1) I’m shorting Gold Resource Corp (GORO). It’s above U$5 and as that was my
target price to re-open this short, I’m not going to ignore it. The position will start by
simply uncovering the previous short position which will give me around 70% of the
total position desired, the rest can come as and when. Much more on this return to the
GORO short trade below.
2) I’m buying Coro Mining (COP.to). This has been in the cards for a few weeks
(editions passim) but during the week gone I received a snippet of information from
Chile and also decided on a personal level that there’s little point waiting until I’m back
in the office to take a starter position. Therefore a starter position it will be at the
market price offered, but I’ll wait until 12c or below before adding a larger chunk to the
position.
3) I’m buying Santacruz Silver (SCZ.v). It’s looking comparatively cheap and the
theory behind the assets held by this company, floated previously, is that in the event
of an upturn in the market it would make an interesting M&A target, perhaps for
Fortuna Silver (FVI.to) (FSM). However and to make it loud and clear (a message that
gets repeated below) this will be a small starter position and treated as highly
1

speculative until further notice. For one thing it’s a new slice of silver exposure and
therefore automatically more risky than buying into a gold company. Secondly it still
has to prove itself operationally and financially and on that score, the current
management team hasn’t excelled to date. Thirdly, second-guessing M&A is a very
difficult game and although not THE central point of the buy thesis (that’s price), it’s
certainly one of them. This trade can and may build in size as the weeks go on, but for
the planned purchase next week, small and foothold are key words. However, I do
recognize that it’s time to take a further step out on the risk bellcurve and a small silver
spec play fits. Some money leaving the storehouse and going to work here.
Those three trades are discussed further in “Fundamentals...” below. As for the fourth potential
trade:
4) I may sell the Rio Alto Mining (RIO.to) (RIOM) trading position next week. Or
I may not, but either way won’t pull any trigger until back home (tomorrow evening).
This idea gets a little expansion in “Stocks to Follow” below.
So ends the traditional top-of-the-shop headsup on trades planned. The biggest is the GORO
short, the others happen next week as well.
We consolidated
In the unscheduled update letter last weekend (it can’t be called an edition of the Weekly, so it
won’t) which gave thoughts on the spring seen in juniors, one of the general strategy points
made was that the type of big up seen in the juniors was unlikely to follow-through without its
underlying metal, gold (plus its friends), making significant progress and underscoring
immediate gains. As it happens gold did pretty well on the week, touching U$1,270/oz before
getting some late Friday liquidation due to the suddenly very nervous broad markets seeking
cash before anything, but as my line in the sand for gold keeping the juniors positive was
U$1,280/oz we didn’t quite get there. I’d agree that without the marketwide selling Friday
U$1,270/oz may have been enough to shore up gains and add a few points here and there
(e.g. RIO.to was playing at $2.45 Friday morning before the storm hit), but at no point in the
week were the gains ever threatening to be as spectacular as the week before.
In other words, our sub-sector of focus consolidated last week in the manner considered. Not a
bad thing and it was also good to see some (not all) of the crappier pumped stories falling away
more readily than the most (not all) of the quality end peers.
From what I’ve read on the market this week (and I’ve read bits and pieces all week, as we’ve
been playing in and around the capital Lima since Monday, rather than Darkest Peru) there’s a
new line of argument coming from the mining sector chatterers about how the week before last
was the definitive bottom for juniors and how the next stage will be some sort of de-coupling of
the good companies (that should make progress) from the crappy end of the market which are
still on my schedule to fade and die, or at best squeeze the life out of their current equity
holders via dilutive placements, rollbacks and suchlike.
Another thing mentioned in last week’s brief missive was this:
“...we’re now in a very volatile new phase and we could see these juniors rise
or fall heavily in the next week and yet again, I won’t be paying much
attention to the daily market activity...”
The second part of that served me well, as the move seen by many of you Wednesday January
22nd (chart below) was completely ignored by these eyes. That turned out to be a case of
blissful ignorance, but the main point of reiterating those words from last week is the bit about
volatility because “choppy” is the very least we can say about the action as seen (and don’t
worry people, this all might sound a little too self-congratulatory and “oh aren’t I clever for
2

predicting things?”, but the more usual IKN author self-hate that points out personal
dumbassery gets featured further down this
letter).
The Friday dumpage was rather different,
driven by Emerging Market selling from all
parts and sectors and joined with great gusto
by the broad market indices (S&P, Dow etc
down approx 2% on the day, which isn’t
shabby at all). So yes, these are volatile
times and the twin influences on juniors
today are the potential for gold rising on
safe-haven purchases (though it will surely
need to play second fiddle to treasury
buying, default port of refuge for larger
cash) and the potential down direction in
equities. And it probably goes without saying, but those can both play in reverse.
In other news
Here’s a photo from Parque Kennedy, in the Miraflores district of Lima (an area of Lima well
known to the Peru junior mining ex-pats) late last week. In it you see a “Sikuris” (pan pipes)
group from the city of Puno who were shipped in to perform for the crowd in a Ministry of
Culture event that promoted the big Festival in Puno “Virgen de la Candelaria”. I’m also happy
to say that the little girl in the centre of the shot is my youngest daughter, who’s a regular
dancer with the group at the festival (but that’s another story). The other girl is my niece.
Much fun has been had, both in the Tarapoto leg and on this Lima citybreak leg of the vacation,
and for that I thank you all sincerely for your patience with the abridged service that’s let me
loose and allowed us to relax. As from tomorrow Monday evening I’m back in the office,
batteries re-charged, so full service will resume. And the separate photo-travelog will be sent
next Sunday as promised (that will probably concentrate on the North of Peru area travels).
Fundamental Analysis of Mining Stocks
3

Three buys outlined
As noted above, the plan involves shorting Gold Resource Corp (GORO), buying Coro Mining
(COP.to) and buying Santacruz Silver (SCZ.v) next week. Here’s how I plan to cover these
purchases in Fundies coverage.
1) This week, the theory behind the GORO short. This is the main part of today’s section
(below).
2) Next week, a full NOBS fundamentals report on Coro Mining (COP.to). Today the buy is
called and a starter position gets taken (or perhaps more if 12c or below is available). I
expect there will be time to build the position at the right price and as I’m still on the
road and without the full database, it’s a report that can (and has to) wait a few days.
Therefore the buy call today, the details behind the decision next weekend in IKN247.
3) In two weeks’ time, a NOBS fundies report on Santacruz Silver (SCZ.v). This potential
trade has been outlined previously in the thinkpiece “Idea: Fortuna Silver (FVI.to)
(FSM) buys Santacruz Silver (SCZ.v)” featured in IKN232 dated October 13th and then
in a short update in IKN239 dated December 1st. Therefore the situation is roughly the
same as the “buy now, explain later” of COP.to but as we’ve already talked over the
general idea, I feel the COP.to report is more pressing. Also, be clear that this one will
be a small and speculative position for the ‘Stocks to Follow’ list and as such, be placed
in the ‘Smaller Riskier’ sub-section of the list at the start of its listing.
With that spelled out, it’s time for a few details and today we update our coverage on the
biggest of the three trades and the short play, GORO.
Gold Resource Corp (GORO): Time to short again
We get to today’s main feature. The strategy adopted by these pages of shorting Gold Resource
Corp (GORO) has been a fine servant to the portfolio and the ‘Stocks to Follow’ list so far and
with the latest developments, I firmly believe that there’s another good opportunity to short this
over-rated and overpriced company’s stock once again. Here’s why.
Last week GORO published its preliminary production figures for 4q13 (1) which included a
4q13 production total of 20,687 oz of gold equivalent (AuEq), the faintly ridiculous metric used
by this company to add its minority gold and majority silver production totals together* (zinc,
lead and copper by-products are booked separately, which is a small concession to common
sense). We’re not given any further breakdown of the gold and silver production numbers, but
if we go by previous quarters and factor in the rising gold/silver ratio (now edging 63:1) these
charts show your author’s best guess:
GORO: Gold sold, per quarter
10000
8953
8000 7119 7287 7297 7683 7500
6668
5774
6000
4000
2000
0
4
21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
Oz Au GORO: Silver sold, per quarter
1000000
900000 828376 863152
800000 755746 741757 760000
700000 603426 599501
600000
500000 417932
400000
300000
200000
100000
0
source: company filings, IKN ests for 4q13
21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
Oz Ag
source: company filings, IKN ests for 4q13

That’s 7,500 oz gold and 760,000 oz silver in 4q13. In last week’s rather fact-shy NR we were
also given the total 2013 average daily tonnage throughput, of 866 tonnes per day (tpd). With
the other quarters’ numbers in hand and a bit of reverse engineering of numbers that gives us
an estimated 4q13 throughput number of 83,352 tonnes, or 906tpd.
That’s on the back of the much-vaunted “mill GORO: Tonnage mined per quarter
production capacity” increase at the Aguila 90000
mill to 1,500tpd during 3q13 and 4q13, 80000
which was supposed to be fully completed 70000
60000
early 4q13. This is the first clear evidence of
50000
something we’ve always posited about
40000
GORO’s operations; it’s one thing to build out 30000
the mill, quite another to be able to supply 20000
the mill with enough feed to run at that 10000
0
higher rate, particularly as the mine is
getting deeper all the time. As it happens,
4q13’s average throughput was lower than
even 3q13 and although we could see a
move up to 1,000tpd soon enough, I contend that 1,500tpd is a long way off indeed and would
need some pretty significant capex thrown at the operation. As we’ll see in a few lines further
down, cash is something GORO has in dwindling amounts these days and new plant and
infrastructure is unlikely to happen in 2014. In short, GORO has been bullshitting us (nothing
new) with its 1,500tpd capacity talk and we’re not going to see this mine running that much
anytime soon.
Anyway, back to the grim reality of the GORO numbers in 4q13 and this is how the revenues
breakdown by metal works. GORO still relies on silver for 50% of its revenues, gold is less than
30%. Some gold company, this one.
One thing that changed in the GORO reporting in 3q13 was that it apparently started using the
received price for its metals to calculate gross
revenues, instead of the price that didn’t
include the various middleman charges
(smelter etc). For 4q13 I’ve assumed that will
continue and house forecasts have been
adjusted accordingly.
When it comes to these revenues forecasts,
I’ve used a system of 1) London Fix averages
for gold and silver (plus base metals credits)
2) 100% gold and silver production = 100%
sales and 3) be generous about the price
GORO received. That’s because this is a short
5
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
tonnes per qtr
source: GORO data
GORO: Percentage breakdown of revenues by metal
100
90
80
70
60
50
40
30
20
10
0
21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
GORO: Gold and silver gross revenues, per quarter
%Ag %Au %credits U$m
30 Au revs
Ag revs
25 Credit revs (Cu/Zn/Pb)
20
15
10
5
0
1q12 2q12 3q12 4q12 1q13 2q13 3q13 4q13est
source: GORO filings, IKN ests for 3q13 source: company filings, IKN ests for 4q13
% Percentage difference between calculated revenues
20 and reported revenues
18 16.98
16 14.23 14.11
14 12.92
12 10.51
10
7.94
8
6
4
2
-0.36
0
-2 1q12 2q12 3q12 4q12 1q13 2q13 3q13 4q13est
source: GORO filings, IKN calcs

thesis and I want to build in as much reasonable leeway as possible, so it makes sense to
assume the company received a little more than
the strict average price for the metals or had to
pay the worst sort of percentage discounts to its
buyers. In fact, it wouldn’t surprise me if gross
revenues came in lower than my guesstimate,
but as this chart indicates I’m going with U$29m
in sales for the quarter just gone.
With revenues in place, time for costs. As
documented on many occasions on these pages,
GORO uses a system of costs counting that’s
basically designed to obfuscate, leaving to one
side essential charges such as construction,
development and others in its “mine site costs”
calculation. We therefore ignore its massaged figures and add the line items up in a way that
makes more sense, as seen in this next chart:
GORO: Costs breakdown
36
32
28
24
20
16
12
8
4
0
6
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
GORO: Revenues
45 42.311
40 37.781 35.43836.665 36.49
3 3 0 5 30.7 27.939 26.66 29.405 29
25 20.664
20
15 11.28
10
5
0
U$m
cons+dev
exploration
G&A + stock comp
COGS
source: company data, IKN ests
And again, I’ve tried to be conservative in this estimate. GORO’s mining operations are getting
deeper underground and even though the 1,500tpd mill capacity is unlikely to be threatened
soon, the company is moving more rock to the sruface and that costs more money, so I
wouldn’t be surprised to see our estiamted $30.5m in costs fall short, but conservative models
are the way we go.
I expect that come the day GORO
announces its financials, it’ll offer a “gross
profit” or “mine site operating profit” of X
millions, in much the same way as in
previous quarters. This chart right sums up
the way they prefer to chop and slice
things. But yup you guess it, that’s bullshit
from these bullshitters once again. They
might put “$10m mine profit” in front of
your eyes come the time, but the way to
judge GORO is to put our two previously
calculated numbers, those of revenues and
of “true costs” together and see what happens. In other words we get to this:
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
U$m
source: company filings, IKN ests
GORO: Quarterly Earnings overview
45
40
35
30
25
20
15
10
5
0
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
source: company filings, IKN ests
srallod
fo
snoillim
revenues
COGS
Gross profit

GORO: Revenues vs "true costs"
45 42.31
40.62
40 37.78 35.44 36.49
3 3 0 5 30.01 27.94 29.96 26.6 2 6 7.4329.4 3 1 1.29 29. 3 0 0 0 .50
25 20.66 20.51 22.52 22.93 21.53
20 13.94 15.91 15.27
15 11.28
9.13
10
5
0
7
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
U$m revenues
"true costs"
true costs = prod costs + deprec&amort+ accretion + G&A + stock
based compensation + expl expenses + construction & development
The problem at GORO is evident. Once again, even
GORO: Evolution of profits
before discounting its dividends from treasury and
14
even before the question of tax (or the newly imposed 12
royalty on mining in Mexico) become issues, when 10
costs are added together in something approaching a 8
6
normal and logical method it shows a company
4
making a loss on operations at current metals prices. 2
The last financials chart here shows how we see pre- 0
tax and net losses at the company for this quarter and -2
-4
they’re remarkably similar to the visuals from 2q13
-6
and 3q13.
2q12 3q12 4q12 1q13 2q13 3q13 4q13est
source: company filings, IKN ests
Which brings us to the balance sheet and where the
rubber really hits the road re. GORO. We could consider the effect of another operating and net
loss to the company’s financials by comparing the assets breakdown, then assume liabilities
remain roughly equal to the 3q13 numbers...
...and from those get the current working
capital of the company, which is slated at $32m by
our model.
But the current assets file for GORO is bolstered by a
rather nebulous “other current” line item along with
some bullion held via its divis-for-gold scheme
(another slug of heterodox silliness) and what counts
in this company, so keen on its dividend payments, is
the amount of cash in the treasury box. That looks
like this next chart below (and for my money it’s the
most important chart of the lot today):
srallod
fo
snoillim
op profit
pre-tax profit Net Income
GORO: Assets Breakdown per qtr
150
125
100
75
50
25
0
01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
source: company filings
srallod
fo
snoillim
GORO: Liabilities Breakdown per qtr
40
Bullion
fixed 35 other current 30
cash&ST
25
20
15
10
5
0
01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
source: company filings, IKN ests
srallod
fo
snoillim
LT debt current debt
80 GORO: Working Capital per qtr
70
60
50
40
30
20
10
0
01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4
source company filings, IKN ests
srallod
fo
snoillim

GORO: Cash and ST
60
50
40
30
20
10
0
8
01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 tse31q4 tse41q1 tse41q2 tse41q3
source: company filings, IKN ests for 4q13
At end 4q13, we estimate cash and equivalents at GORO to be $14m. And with current metals
prices GORO is a lossmaking mining company, period. Add on to that the approximate $1.6m in
quarterly dividends it’s scheduled to pay in 2014 (at 1c/month). The inference is as clear as it
can possibly be; Ceteris paribus GORO is running out of cash and it’s only a matter of time
before the market notices this glaring hole in its argument, because all the dividends previously
paid and “mine operating profits” in the world won’t help a jot when it’s time to write a new
bunch of cheques and there’s nothing left to back them up. On this score I have two questions:
1) Will silver and gold rise to a price level that can save GORO?
2) If not, at what moment will the market notice the cash crunch at GORO? 2q14? 3q14?
It’s not going to let treasury drop to zero dollars and zero cents before discounting
these $5 shares pretty severely, that’s one thing you can be aboslutely sure about.
Conclusion
Over at the blog in the quickest of posts on Friday, I called Gold Resource Corp (GORO) “...the
world’s most obvious mining short.” Yes for sure that might be an exaggeration because there
are some totally cruddy, full-scam companies out there that still command inflated share prices
but are only shorts in theory, as getting size and liquidity short in them is near-impossible. But
in GORO we have a stock that’s not only overpriced, but relatively easy to short thanks to its US
listing and, somewhat to my surprise (not totally, as the BS pumps around this stock lost their
shock and laughability factor many moons ago) managed to rally last week on a set of
production numbers that were pretty crappy once the surface got scratched. This five day chart
shows how GORO moved up on Thusday morning post-NR and the action as only crimped by
the marketwide selloff which gained momentum on Friday.
The next table below has seen several airings on these pages, that of the dividend yield to

share price targets. Now that the divi has been cut to a penny per month, the previous levels of
the yield point to a stock that drops to $2.50/share which would be a 50+% win from today’s
levels. But even if we suppose things get better, silver and gold prices rise and it’s able to
reinstate a 2c dividend, the share price target only moves to where we are today, around $5.
Or more simply, GORO today is my idea of a no-lose shorting opprotunity, where it treads water
over time if gold improves or sinks if the current price levels for the metals remains in place. I
like no-lose opportunities, particularly when I can use them to hedge the wider portfolio.
GORO: Dividend Yield Percentage Spread
Share price (U$) 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
2.5 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
As of this week, The IKN Weekly goes short on Gold Resource Corp (GORO) once
again, with a downside target price of U$2.50 representing a 50.7% upside to this
weekend’s close. As for the trade strategy, my first move will be to uncover the previously held
short position. As this is now happening at a lower price deck that the last short, the absolute
amount of cash in play is somewhat lower
than before and I will look to top the
position up eventually. If that happens at
a higher price then fine and dandy, but I
won’t rush into the second stage of the
short in hours or days.
Also for what it’s worth (for one thing, far
more than any thought I have on TA), last
week I asked Gary Tanashian of Biiwii
what he thought of the GORO chart from
here and his reply was something along
the lines of “if it gets to $7, short the
expletive out of it” but I’m not going to
wait that long, not for this first slug of
shorting at least, because unless gold pops hard I don’t think it has a hope in Hades of getting
to $7. And of course, even if gold does pop I’ll be enjoying the ride up with the rest of you,
plenty of net long in my port.
*McEwen Mining (MUX) (MUX.to) does the same silly AuEq trick and in the same style as GORO produces far more
silver than gold in revenues terms but insists on marketing itself as a gold company. If you want a different perspective,
consider that Fortuna Silver (FVI.to) (FSM) gets about 25% of its revenues from gold and under the same line of
thinking, could market itself as a “gold miner”...just that corporate name to change. But back to MUX, as it’s another
one of those “true believer” stocks (as GORO once was before the longs were burned to death by reality), Robbie Mac
and all that jazz. MUX is one to think about, because I know I’ve been thinking about it and its recent price pop.
9

Stocks to Follow
After last week’s pop, the semi-expected consolidation week did indeed show through. Of our
twelve current open positions, four moved up (LRA.v, DNA.to, TAHO short, DAR.v), three were
unchanged on the week (IRL.to, FCV.v, NET.v) and five moved down (RIO.to, BTO.to, RIO.to
trading position, EOM.to, PVG short). Most of the weekly aggregate moves weren’t very large in
either direction, with the one main exception the 41.7% upmove seen in Darwin Resources
though that started from a rather low level and it’s still very much a pennycrapper, so let’s not
read too much into that chunky percentage move...not yet at least.
We currently have 12 open positions on our ‘Stocks to Follow’ list, two less than our self-
imposed maximum. Eight are in the red, four are in the green and 2014 has started better than
2013 ended.
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$2.33 1.3% best LT value
Minera IRL IRL.to hold C$0.35 22-jul-12 C$0.20 -42.9% top pick called at 24c
Longs
B2Gold BTO.to hold C$3.07 28-nov-12 C$2.67 -13.0% sold 1/2, rest rides. Quality
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.93 -19.1% solid biz model, LT hold
Rio Alto Mining RIO.to May sell C$2.06 07-jun-13 C$2.33 13.1% May be time to cash out
Eco Oro Min. EOM.to hold C$0.50 22-sep-13 C$0.40 -20.0% st pol risk play, added
Dalradian Res DNA.to hold C$0.65 27-oct-13 C$0.82 26.2% Now moving, add or hold?
Shorts
Tahoe Resources TAHO short U$13.10 08-apr-13 U$17.36 -32.5% port hedge, easy2b short
Pretium Res PVG short U$5.38 22-nov-13 U$6.39 -18.8% $4 downside target
Smaller/Riskier
Focus Ventures FCV.v spec buy C$0.175 01-jul-12 C$0.25 42.9% At revised tgt 25c
Darwin Res DAR.v spec buy C$0.10 14-jul-12 C$0.085 -15.0% drilling results any day
Network Expl. NET.v hold C$0.01 22-jul-12 C$0.005 -50.0% V. small spec, foothold
Closed in 2014 closed close price
Fortuna Silver FVI.to jan'14 C$2.80 23-dec-13 C$3.19 13.9% small ST trade closed
2009, 2010, 2011, 2012 and 2013 closed positions in appendices below
Now for some notes on a selection of the above stocks.
Rio Alto Mining (RIO.to) (RIOM): May sell the trading position. I’m still undecided and
the view hasn’t changed from the quick note last week, so it gets reiterated here in much the
same style. I’m happy to hold the true and larger) investment position for the duration, but the
trading position was born from what I thought at the time to be a particularly good short-term
trade potential and has always been separate (at least in my mind). As things turned out my
idea of value was duly trampled upon by the market and it’s taken three extra purchases as the
stock sunk lower to average the position down to the point where it’s showing a modest profit
today (the last buy looks good by itself, but that’s only part of the whole and far sorrier story).
The bottom line here is that I’m keen on raising cash (not least to fund the small starter buys in
SCZ.v and COP.to planned for next week), so now we have a position that’s not being priced as
rank stupidly as before, it’s one of the most obvious places to do just that. But to repeat (ad
nauseam if necessary) my personal portfolio fiddlings are no reflection on the real opinion of
Rio Alto, which is that it’s still Top Pick and still your author’s biggest holding, no matter what I
eventually do with the smaller, nearer-term trading position.
Right, that’s done, so less about my petty financial neuroses and more about Rio Alto Mining.
To real news, which admittedly only gets scant coverage this week, and on Tuesday RIO.to
10

gave us its 4q13 production results (2), as well as 2014 production guidance. First looking back
and the 70,551 oz gold produced/sold in 4q fit right in with the word received by your author at
the end of 2013 (hey hey, IKN Weekly readers heard before anyone else that 4q was a big beat
and knew when the stock was trading at $1.80).
Production guidance has been set at 190k oz to 210k oz gold for 2014, which is the same range
as in 2013, with throughput expected to average 32,000tpd. This implies that RIO.to is stepping
back from the 36,000tpd rhythm set in the latter end of the year just gone which fits right in
with its previously mentioned plans to downsize its on-site plant from four teams of
scoop+trucks to three teams. All-in costs (after everything but everything) aren’t expected to
break U$1,094/oz, which gives us a very simple line in the sand. Let’s recall that this is the third
year out of three that RIO.to has delivered on its production and in profitable style, worth
remembering if the bullshit rumours out of Lima start doing the rounds again.
In other news, I need to chase up on unofficial jungledrums picked up in the last couple of days
and will do so, but there’s a suddenly positive tone coming from La Arena about the chances of
resource life extension for the oxide gold operation there. I’ll have more on the RIO.to 4q13
numbers and that potential big positive to the RIO.to story in next week’s edition.
Pretium Resources (PVG) (PVG.to): I’ve been mulling over the short theses for PVG, TAHO
and GORO in my mind for the last few days (honestly, it’s some people’s idea of vacation
relaxation time to think about portfolio strategy in earshot of waves on a beach...takes all sorts
no?) and of the three, the one that now causes the itchy feeling of “I may be wrong” is PVG. I
don’t think the whole short thesis here is misplaced and we can be sure there’s a placement on
the way (bought deal looks most likely now) which may provided a bit of downside and a place
to cover this at a loss. But if we’re truly in the first phases of a rally in juniors and/or gold, PVG
is exactly the type of stock that will be bought by the larger funds without too much thought to
its iffy geology issues and with more heed given to Quartermain and company. That could
result in a price move that has me shaking my virtual fist at the world and calling them wrong
in all languages, but it wouldn’t help the losses taken by the short. Also, and here’s the crunch
point, I prefer moving downside hedging exposure from PVG short to GORO short, as it’s more
likely to remain under the control of its weak production fundies and less likely to catch hot
money sponsorship.
The above is a well deserved self-critique of the previous confidence exuded about the PVG
short, a slice of humble pie in the face of a company stock that’s now broken above the $6
mini-resistance and shows a 20% loss. On the one hand it’s a hedge and that’s what they’re
supposed to so as the market rises (suits me, very much net long still), but on the other there’s
no real need to hold something that threatens to run away from my exposure point. I’ll make a
proactive call on this once PVG announces its financing round, which shouldn’t be long now.
Darwin Resources (DAR.v): Although the
percentage pop is rather too flattering there was
bits and pieces of buying at the ask last week,
which wasn’t massive in absolute dollar terms but
was enough to catch the eye. That’s because
according to the company’s last guidance, first drill
results from the latest program at Suriloma are
due this week coming (or the next).
Dalradian Resources (DNA.to): Another good
week for DNA, which came with news (3) that the
next exploration phase of its Curraghinalt project
is now fully permitted. The timeline offered for the
program says that it’s going to take two months to get things up and running, which is
somewhat tardier than originally expected but with the apparently rock solid gaurantee that the
11

work will take place, it’s not a difficult pill to swallow. Volumes remain strong enough to trade
around, that pleasant change continuing, too.
Minera IRL (MIRL.L) (IRL.to): Continues very quiet at 20c, volumes low. The IRL position of
thin treasury and the need to secure a financing deal is overriding its asset value potential,
which isn’t a good thing. The main problem seems to be the financial debt held (betcha the
company regrets taking that chunk onto the balance sheet, 20/20 hindsight and all that). I’m
going to devote plenty of my office days next week
to the IRL situation and report back findings next
weekend.
Lara Exploration (LRA.v): Another that saw some
nibbling at its ask, which moved the price to 99c for
a couple of hours before Friday took the edge off
gains (LRA and a whole bunch of juniors). However,
volumes need to improve before any new price base
is established.
B2Gold (BTO.to) (BTG): Two bits of news from
this quality name last week. On Tuesday BTO
reported its 4q13 production numbers (4), which were basically in line with expectations in
global terms. I don’t have my BTO database with me here (for some reason I didn’t load it onto
the USB stick, should have done) and want to check with that before saying too much, but
Masbate looked lighter than I expected while the smaller Limon mine in Nicaragua put in an
excellent quarter. As for 2014 production guidance, BTO has set the bar at 395k to 420k oz Au
at an operating cash cost of between $667/oz and $695/oz, which sounds about right. Capex at
its three operating mines is budgeted at $93m, which is a fair whack and against the current
trend of cutting capex seen in many other mines (who suddenly care about all in costs and
bottom lines from their higher cash cost operations).
The other news came Wednesday, when BTO announced (5) an initial resource from the newly
discovered Wolfshag zone of its Otjikoto mine in Namibia that boils down to this phrase from
the NR, “...6.8 million tonnes at 3.2 grams per tonne ("g/t") gold containing 703,000 ounces
gold...”. As expected, the grade is
higher than the average at Otjikoto
(1.34m oz at 1.42 g/t) which means it’s
adding size and potentially positive
economics to the project already.
There’s likely more to come from
Wolfshag, too.
As for trading last week in BTO, this
five day chart suggests that the market
largely ignored those two pretty chunky
and significant pieces of fundies news
from the company and the stock just
consolidated/trended slightly lower,
along with the rest of them, bumps and
drops along the way. A signal of our
cult of instant gratification and “what’s gold doing?”, perhaps. However, as long as BTO keeps
executing well, no need to worry about this long term long and I’m a happy holder.
Eco Oro Minerals (EOM.to): My Santurban Páramo charge had a quiet week on low volumes,
barring a Friday seller who decided to liquidate around 200k shares into the general market
weakness that day. Meanwhile, neighbour and recent focus of IKN’s speculative thoughts
Galway Gold (GLW.v) had another good week, touched 11.5c and finished up 25% for the
period at 10c. This means it’s gone from 6.5c to 10c in the space of ten trading days and also
12

gives me that sinking feeling that I’ve backed the wrong horse again (wouldn’t be the first
time...sigh).
Focus Ventures (FCV.v): According to a broker friend who shot me a mail (thanks, you know
who you are) FCV was marketing in the offices of the Canadian houses last week. Over at the
ticker, trading was light and FCV benefitted from a slice of late Friday tape painting to finish
UNCH on the week.
The Copper Basket
After four weeks of 2014 The Copper Basket is showing a 6.68% gain to level stakes.
company ticker price 1/1/14 Shares out Market Cap current pps gain/loss%
1 NGEx Resources NGQ.to 1.43 168.71 258.13 1.53 7.0%
2 Lumina Copper LCC.v 6.29 43.81 255.41 5.83 -7.3%
3 Augusta Res AZC.to 1.51 144.41 252.72 1.75 15.9%
4 Reservoir Min. RMC.v 4.97 41.76 237.20 5.68 14.3%
5 Hot Chili Ltd HCH.ax 0.425 333.11 143.24 0.43 1.2%
6 Copper Fox CUU.v 0.375 402.96 134.99 0.335 -10.7%
7 Nevada Copper NCU.to 1.35 80.5 103.04 1.28 -5.2%
8 NovaCopper NCQ.to 1.60 53.4 85.44 1.60 0.0%
9 Western Copper WRN.to 0.76 93.68 74.94 0.80 5.3%
10 Panoro Minerals PML.v 0.35 204.71 62.44 0.305 -12.9%
11 Curis Resources CUV.to 0.57 74.79 52.35 0.70 22.8%
12 Coro Mining COP.to 0.10 160.8 20.90 0.130 30.0%
13 AQM Copper AQM.v 0.11 139.05 18.77 0.135 22.7%
14 Cordoba Min. CDB.v 0.45 31.88 17.85 0.56 24.4%
15 Oracle Mining OMN.to 0.27 49.03 12.26 0.25 -7.4%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg 6.68%
The basket saw nearly 5% taken off its overall average, which is a hefty loss for one week. Just
three of its components make gains last week (NGQ.to, AZC.to, COP.to) and the other twelve
registered losses (not listing them all), with bigger
losses from Nevada Copper (NCU.to down 15.2%),
Curis Resources (CUV.to down 14.6%), Hot Chili
(HCH.ax down 10.4%), AQM Copper (AQM.v down
10.0%) and Copper Fox (CUU.v down 9.5%).
However, average losses were buffered by the bigger
sized percentage gains in Augusta Resources (AZC.to
up 12.9%) and NGEx Resources (NGQ.to up 11.7%).
Copper price notes: As this chart shows (taking in a
few more days than simply last week this time) it
suddenly got very fashionable to talk bearish about
copper last week, the blame fixed on “China Worries”
or somesuch (now where have I heard that before?).
The result is that we’re firmly back inside that long-
term $3.20/lb to $3.35/lb trading range once again,
which at this point I consider fair. What with the
Chinese New Year and its hangover effect, there’s
little reason to expect market-moving fundies news for the next couple of weeks minimum and
I expect the price to stay in this tight range as a result (PS: the Chile port strike is now
apparently over, which means flow will resume).
13

Inventory numbers now, after a break of two weeks. World stocks rose 10,118mt on the week
to stand at 491,485mt, with LME stocks unchanged at 335,775mt and the small Comex
warehouse system holding 14,797mt, which up a few hundred tonnes. But the big change was
the 9,350mt added to Shanghai Futures Exchange warehouse stocks, a 7.1% rise. This comes
on the back of a similar rise the week before last, one we didn’t register in last week’s quick
letter but we can track what’s been happening recently to the Shanghai numbers in this little
chart.
Shanghai Futures Exchange copper warehouse stocks:
percentage weekly changes
10%
8% 7.7% 7.1%
6%
4%
2% 1.0%
0.0%
0%
-2%
-4% -2.1% -8.4% -2.8%
-6% -4.7% -4.1%
-8%
-10%
Dec 1stDec 8th Dec Dec Dec Jan 5th Jan Jan Jan
source: Cochilco 15th 22nd 29th 12th 19th 26th
We saw the stocks drop considerably in 2013 and to that end, December 2013 weekly
percentage changes are used as a reference point. Then for the first couple of weeks in 2014
the trend basically continued, but the last fortnight has seen a big re-stock and we’re up nearly
19,000mt since the low point. We are of course in the umbral of the Chinese New Year, a week
in which business basically stops in China, which is likely to be an influence to the past two
weeks’ action. By mid-February we should know whether the last two weeks is a blip, or
whether (as many are now speculating) we’re going to hit a China re-stocking cycle.
Now for very quick thoughts on a few of our component stocks:
AQM Copper (AQM.v): Retracing, but AQM certainly has perked up in the first month of 2014
and does reasonable volumes on most days. Perhaps due to the dearth of copper projects of
worth in the hands of true junior explorecos.
Curis Resources (CUV.to): This one rose big the week before last and gave back a fair part
of those gains, so nothing truly negative to read into the loss over five days. We can expect
speculative moves, but the real showtime still seems to be the court date on March 18th
between the opposing sides of the Florence Copper project. Until then, guesses welcome.
Reservoir Minerals (RMC.v): RMC ran into some selling pressure last week, which took some
edge from its stellar performance so far. There was a difference to the pattern, disguised
somewhat by a small late Friday rally, though as volumes remain relatively small I don’t want to
read too much into the action. Watching brief.
Augusta Resources (AZC) (AZC.to): A big move which seems to be from a promo op-ed out
of the USA on the benefits of Rosemont that caught a new audience. My best local set of eyes
and ears on this story tells me he’s not buying into AZC on news that isn’t really new. Me
neither.
The Low Cost Producer Basket
After 4 weeks of 2013, the Low Cost Producer Basket is showing a 9.66% gain to level stakes.
14

company ticker price 1/1/14 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Freeport FCX 37.74 1040 34.08 32.77 -13.2%
2 Goldcorp GG 21.67 812 19.53 24.05 11.0%
3 Barrick ABX 17.63 1000 19.03 19.03 7.9%
4 Newmont NEM 23.03 497.87 12.39 24.88 8.0%
5 Silver Wheaton SLW 20.19 357.39 7.88 22.04 9.2%
6 Franco Nevada FNV 40.74 147.01 6.92 47.05 15.5%
7 Agnico Eagle AEM 26.38 173.43 5.36 30.92 17.2%
8 Pan American PAAS 11.70 151.41 1.95 12.87 10.0%
9 B2Gold BTG 2.02 651.4 1.59 2.44 20.8%
10 First Majestic AG 9.80 117.02 1.26 10.80 10.2%
all prices in U$, using NYSE ticker prices Portfolio avg 9.66%
Our basket of ten was split down the middle (quite interestingly) into five weekly winners (ABX,
GG, NEM, FNV, AEM) and five losers (FCX, SLW, PAAS, BTG, AG). Alongside the big hit taken by
FreePort on the Indonesian tax news, we note that three of the five losers last week were silver
names (unlikely to be a coincidence). Meanwhile the goldies, barring the relatively smaller
B2Gold, had a decent week of it despite the Friday marketwide selling semi-panic.
We’re now four weeks in and starting to get a working numbers base from which this tracking
basket can provide the comparative it’s been designed for. I’ll start a little more detailed
commentary on things here in February, but for today it’s short’n’sweet again. Though fair is
fair and a quick shout out today is deserved by Agnico Eagle (AEM), as +17% for a U$5Bn
market cap stock in less than a month is a very decent performance.
Regional politics
Peru, Chile, The Hague, the big maritime border dispute decision tomorrow
Tomorrow at 11am Lima time, 1pm Santiago time, the judges at The Hague are set to deliver
their verdict on the maritime border dispute between Chile and Peru. For more details pick the
news service of your choice (oodles in Spanish, but there will be plenty in English as well, I’d
start with Reuters (e.g. here (6)) if I were you).
Meanwhile, the message from The IKN Weekly is much shorter than the volumes bound to be
published on this big political deal for South America and it’s also on-topic. When it comes to
mining, this issue is very unlikely to affect any sort of deal or business in either Chile or Peru
and all signs point to the two countries acting responsibly and in a mature manner to the
eventual verdict, no matter whether this final decision (unappealable) goes for or against their
specific aspirations. We’re bound to hear some sort of rejection polemic from one extreme or
the other, with potential noise from Chile’s hard right wing citizenry if the call goes against
them, or Peru’s pieces of excrement known as Sendero Luminoso (shining path remnant group)
or the reactionary military element or either country trying to rouse the rabble via populist
polemics. It’ll greatly depend on what type of reporting your chosen media in English prefers to
run (is yours ratings-driven or responsibility-reality driven?) but once the initial noise has died
down, there’s no reason to expect large politico-economic cracks to suddenly appear and as
mining isn’t a directly affected sector in this one, the chances of anyone’s share price seeing a
boost/drop on this subject are slim indeed.
Bottom line: For students of LatAm politics, this maritime border decision event will be most
interesting and there’s going to be much ink spilled. For those readers who look to LatAm first
and foremost as an investment vehicle, there are better things to worry about than this one.
15

Argentina’s currency devaluation: A positive for producers in the country
The move by Argentina’s official currency rate last week, from slightly under ArgP$7 to
ArgP$8.01 at the close Friday, was the big economic news out of the region last week. Please
note the word ‘official’ is underlined there, because the “street rate” (known as the “dollar blue”
by those who ply the trade in Buenos Aires) is hovering around ArgP$12 to the dollar and it’s
going to be very interesting to see whether that gap between official and black market rates
maintains, widens or reduces. For the record, I expect the breach to reduce in the medium-
term but it’s anyone’s guess what it will do in the next five days.
This chart takes a longer view of theUSD/ARS forex and shows the way in which the Argentine
Peso has gone from around 5 to 7 for the year, then suddenly accelerated. Therefore, we have
seen devaluation of the Peso over time but it’s the big move in the last few days that’s captured
the headlines, with good reason too.
That’s because the move was caused by the Argentine Central Bank (BCRA) relaxing certain
currency controls and allowing more flow of dollars. The effect was that of a logjam that
suddenly frees and a rush to turn Pesos into Dollars (natch). And although the move was
ostensibly one made by the BCRA and that entity is separate from the Cristina Fernandez de
Kirchner govenment by statute, anyone who thinks that this move “caught Kicillof (the new
FinMin) by surprise” and gave him a week of nasty surprises (very typical in the kneejerk CFK
opposition press op-eds and as usual, the line used verbatim by the mediocrity known as
English language journalists in Argentina) is living in cloud cuckoo land. This is clearly a new
strategic decision by Kicillof and his team that looks to clean up the country’s macro-financial
situation; it may not be the last one and it also invites a near-term of rough going for the
country (markets not liking uncertainties and all that), but we should wholly welcome this
positive move. It’s a clear sign that CFK & Co recognize that its current model is unsustainable.
It’s also a move that frees at least some currency controls and in theory at least, any
government that takes rules away instead of adding to them is going in the right direction. It’s
also a move that “makes Argentina cheaper” in borad terms for any foreign capital that might
want in, which is perhaps the most interesting aspect for us the mining investor.
We’ve already had some remarks from Chuck Jeannes of Goldcorp (GG) saying that the events
of last week are welcome and should help his company cut capital costs as it builds out Cerro
Negro. That will equally apply to other projects (e.g. the IRL JV Don Nicolas project is suddenly
cheaper to build at the official rate), though we should note that the deval move could cause an
extra spike of near-term inflation in the country (and it’s already high at an unofficial 25% to
30%) which may end up changing salary deals etc. These and more repercussions are to come,
but the economic theory is simple enough; Argentina just got cheaper and if it starts to attract
more entry dollars, the exchange rate will find its equilibrium point and the never-ending drip-
drip deval becomes a thing of the past.
Argentina is still a very risky place at which to aim your exploration/production junior dollars, be
in no doubt about that. The week to come (and maybe a month after) needs to unfold as well
16

before we can be more confident, but what we did see is a move in the right direction by a
government that has made a significant strategic U-turn under the auspices of its new Minister
of Finance. It just got a little less risky and as there are really deep bargain prices among the
juniors exposed to the country, this has to be interesting to us speculative players.
Chile’s new mining minister
Last Friday incoming President Michelle Bachelet unveiled her new ministerial cabinet names
and the one that most interests us is the new Minister of Mining. Her name is Aurora Williams,
she’s an experienced mining executive from the beancounter side of the profession and had a
government position in the last Bachelet government before moving to the private sector during
the Piñera mandate. She’s also a native of that most mining of Chilean cities, Antofagasta.
Overall, this is a positive piece of news for the mining industry in Chile. Bachelet has picked a
person who understands mining deeply and is one of the industry’s own, which is sure to go
down well with mining company executives.
Peru: Conga protests re-starting
We had a small march (approx 3,000 people) in Cajamarca last week in protest agains the
government’s new and aggressive posture against opposition groups to mining projects in the
region (one minister, rather stupidly, accused them of being narcotraffickers as part of a
ratcheting up of rhetoric). This pushback against the government line shouldn’t come as any
sort of surprise to IKN Weekly readers and what’s more, last week’s march is unlikely to be the
last. The abject stupidity of the people in charge of policy in Peru’s governmental mining policy
is a continued source of wonderment to your author.
Market Watching
Not a big Market Watching section this week, as the edition has already gone way over the
“bare bones” brief due to the new trade ideas above, particularly that of GORO. Just a couple of
very quick comments here and we’re done.
This rebounding market is still unforgiving with stocks that miss
Among others, last week saw disappointing numbers from Argonaut Gold (AR.to), IAMGOLD
(IMG.to) (IAG) and Alamos Gold (AGI.to) numbers and guidance for 2014, as well as what’s
best described as “mixed reviews” from a site visit tour of the AGI properties in Mexico. How
any analyst can be “quite confident” that the highly polemic Esperanza project in Morelos State
to get its permits is totally beyond
my ken, but that’s what the
Haywood guy on the tour said
would happen. To his credit, the
smarter Scotia representative on
the visit was far more realistic
about its chance to happen but
still didn’t give it its real
probability score, that of zero zip
squat zilch nada.
I digress. Here right is what
happened to IMG, AR and AGI
share prices last week, compared
with GLD as a benchmark.
In other words sectorwide relief or
not getting the picks right in 2014
is still going to matter and matter a lot. As it happens IMG is still showing a 9% profit year to
date despite its bad week, but AR is now down 10% YTD and AGI is down a full 25%, which is
17

a lot of damage when your long-suffering sector is finally giving a rebound. On the subject, we
congratulate John McCluskey, CEO of Alamos (AGI.to) on insider sales of 203,000 of his shares
(derived from an options exercise of 200k shares priced at $9.80) during 4q13, at an average
price of around $14 (leaving him with very few held shares, for the record). There’s nothing like
ending a bad year in style.
Fortuna Silver (FVI.to) (FSM): Yes, I sold too soon
Yes, it was set up as a near-term trade. Yes, I took my profit on it and yes, any time you sell
higher than you buy things can’t ever be that bad. As Bernard Baruch famously said, “I made
my money by selling too soon”.
But still, buying at the right $2.80 price, getting the pop and then selling for a modest profit
just before this stock took off and adding a futher buck (and more) in mere days is the sign of
somebody (that be me) who left a large slug of money on the table for somebody else and has
to be classed as a mistake. Even worse, it happened mainly on the back of the type of decent
production results and inferences made by the market that I’d outlined in Decmeber, which
sticks in the craw. So a modest profit, not a good profit, from the FVI trade that could have
been so much better (up to 50%) if I’d displayed just a little more patience. More fool me.
Conclusion
IKN246 is done, we end with bullet points:
• Three trades happening next week, the biggest of which is the subject of our main
section today. Gold Resource Corp (GORO) delivered mediocre 4q13 numbers along
with its now usual allotment of prosaic sophistry in the production NR and is going to
post yet another net loss for the quarter just gone. This situation will almost certainly
continue in 2014 as long as silver (and gold) remain around the current market prices,
so unless the company doesn’t something very drastic with its costs control (chances;
extremely unlikely) this company’s cash position looks set to come under renewed
scrutiny in the year ahead. If it’s not THE most obvious short and hedge vehicle out
there it’s surely ONE of the most obvious.
• Along with that GORO short, next week sees the start of new long positions in
Santacruz Silver (SCZ.v) and Coro Mining (COP.to). Those get the full fundies treatment
in the next two weeks.
• So much for a ‘bare bones’ edition ☺, but apart form getting a few hard stares from the
wife of the “you said three or four hours tops” variety, no harm done (we’ve got to over
10,000 words, for what it’s worth). In fact it’s been fun to get back to writing on the
market, which is a good personal sign in itself. Until next week, when an overdue
18

update on IRL.to will accompany the COP.to NOBS report.
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://finance.yahoo.com/news/gold-corporation-achieves-2013-production-121500663.html
(2) http://finance.yahoo.com/news/correction-rio-alto-produces-record-141237761.html
(3) http://finance.yahoo.com/news/dalradian-receives-full-approval-including-141549603.html
(4) http://finance.yahoo.com/news/b2gold-achieves-record-4th-quarter-110000464.html
(5) http://finance.yahoo.com/news/b2gold-corp-announces-initial-wolfshag-083000486.html
(6) http://www.reuters.com/article/2014/01/23/us-chile-peru-border-idUSBREA0M1QV20140123
Stocks To Follow Closed Positions, 2013
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
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Stocks To Follow Closed Positions, 2012
Closed in 2012 closed close PPS
Soltoro SOL.v jan'12 C$0.87 07-nov-11 C$0.94 8.0% cash moved to BCM.v
Gold-Ore Res GOZ.to feb'12 C$0.84 13-oct-10 C$0.98 16.7% trade closed on ELG.v offer
Minefinders MFN feb'12 U$11.68 17-nov-11 U$14.80 26.7% target made, trade closed
Iron Creek IRN.v mar'12 C$0.58 26-sep-10 C$0.31 -46.6% time up on small bad trade
U.S. Silver USA.to apr'12 C$2.18 15-mar-12 C$1.86 -14.7% ST trade no good, cut loss
Augusta Res. AZC.to may'12 C$3.10 29-ene-12 C$2.07 -33.2% bad mkt, bad trade cut loss
Bellhaven BHV.v may'12 C$0.50 22-sep-10 C$0.28 -44.0% new mgmt not impressive
Zincore Metals ZNC.to may'12 C$0.325 29-jul-11 C$0.17 -47.7% bad mkt, bad trade cut loss
Soltoro SOL.v may'12 C$0.70 18-mar-11 C$0.41 -41.4% bad mkt, bad trade cut loss
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% fail ST trade close pre split
Estrella Gold EST.v aug'12 C$0.91 27-mar-11 C$0.14 -84.6% Closed on port realignment
Fortuna Silver FVI.to sep'12 C$1.07 03-may-09 C$5.32 397.2% sell call $6.17/ Mar25
Strait Minerals SRD.v oct'12 C$0.125 09-dic-11 C$0.12 -4.0% closing coverage til FY13
Sunward Res SWD.to oct'12 C$1.47 13-mar-11 C$1.21 -17.7% sold, took loss
Gold Res Corp GORO oct'12 U$21.47 09-sep-12 U$17.40 19.0% Short trade closed
Yellowhead Min. YMI.to nov'12 C$1.00 01-abr-12 C$0.63 -37.0% sold, took loss
Primero Mining PPP nov'12 U$7.26 07-oct-12 U$6.73 7.3% Short trade closed
Bear Creek Min. BCM.v nov'12 C$3.38 07-nov-11 C$3.72 10.1% Took small profit
Vena Resources VEM.to dec'12 C$0.70 31-may-09 C$0.18 -74.3% Failed trade (caps F)
Galway Res GWY.v dec'12 C$2.19 24-nov-12 C$2.30 5.0% closed good ST arb trade
Stocks To Follow Closed Positions, 2011
Closed in 2011 closed close PPS
Sunward Res SWD.v jan'11 C$1.05 21-nov-10 C$1.63 55.2% target made, trade closed
Serengeti Res SIR.v mar'11 C$0.245 05-dec-10 C$0.285 16.3% sold pre-tgt, ST trade fail
Fronteer Gold FRG apr'11 U$2.37 03-may-09 U$15.24 543.0% buyout, trade closed
Minefinders MFN apr'11 U$9.09 07-nov-10 U$16.89 85.8% target made, trade closed
Metalline Min. MMG may'11 U$1.04 26-jan-11 U$0.89 -14.4% exit, resource disappointed
Peregrine Met PGM.to jul'11 C$0.87 06-mar-11 C$2.60 198.9% buyout offer, closed
Dynasty Metals DMM.to jul'11 C$4.20 03-may-09 C$2.85 -32.1% Sold. Fail. Move on.
Aura Silver AUU.v aug'11 C$0.22 13-oct-10 C$0.16 -36.4% Bad pick. Take loss
U.S. Silver USA.v aug'11 C$0.52 26-jan-11 C$0.71 36.5% closed to make room
B2Gold Corp BTO.to sep'11 C$2.80 12-may-11 C$4.27 52.5% target made, trade closed
Bear Creek Min. BCM.v sep'11 C$3.80 27-may-11 C$4.17 9.7% macro sell call victim
Minefinders MFN sep'11 U$14.70 10-aug-11 U$15.15 3.1% macro sell call victim
Great Panther GPR.to sep'11 C$3.03 22-aug-11 C$2.64 -12.9% macro sell call victim
Fortuna Silver FVI.to sep'11 C$1.07 03-may-09 C$5.36 400.9% sold 20%, macro sell call
Focus Ventures FCV.v nov'11 C$0.40 20-apr-10 C$0.20 -50.0% cut losses, bad trade
Regulus Res. REG.v dec'11 C$1.17 14-aug-11 C$0.52 -55.6% cut on news of poor 43-101
2009 and 2010 closed positions in appendices below
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Stocks To Follow Closed Positions, 2010
Closed in 2010 closed close PPS
B2Gold Corp BTO.to Jan'10 C$0.88 08-nov-09 C$1.49 68.2% target made, trade closed
Radius Gold RDU.v Jan'10 C$0.18 23-aug-09 C$0.40 122.2% target made, trade closed
MAG Silver MVG mar'10 U$5.60 23-nov-09 U$7.28 30.0% closed in pdac week
Riverside Res RRI.v mar'10 C$0.435 20-sep-09 C$0.60 37.9% closed in pdac week
Amarillo Gold AGC.v mar'10 C$0.81 31-may-09 C$0.70 -13.6% closed in pdac week
B2Gold Corp BTO.to apr'10 C$1.24 18-feb-10 C$1.50 21.0% target made, trade closed
Lumina Copper LCC.v apr'10 C$0.84 14-jun-09 C$1.55 51.2% total position now sold
Troy Resources TRY.to may'10 C$1.10 03-may-09 C$2.25 104.5% sold on negative results
AuEx Ventures XAU.to may'10 C$2.51 24-may-09 C$3.38 34.7% trade closed
Nevada Copper NCU.to jun'10 C$3.27 14-mar-10 C$2.03 -37.9% need to lower Cu exposure
Carpathian Gold CPN.to jun'10 C$0.39 14-mar-10 C$0.35 -10.3% too exposed to cap raising
Amerix PM Corp APM.v jun'10 C$0.065 08-nov-09 C$0.05 -23.1% victim of macro bear
Antares Minerals ANM.v jun'10 C$1.42 06-dec-09 C$2.10 47.9% sold half
Vena Resources VEM.to jun'10 C$0.37 31-may-09 C$0.23 -37.8% sold half
Minera Andes MAI.to sep'10 C$0.75 28-jul-10 C$0.95 26.7% ST trade closed
Gold-Ore Res GOZ.to sep'10 C$0.52 01-aug-10 C$0.75 44.2% target made, trade closed
B2Gold Corp BTO.to sep'10 C$1.45 25-may-10 C$2.01 34.5% target made, trade closed
Blue Sky Uran BSK.v oct'10 C$0.41 19-may-10 C$0.22 -46.3% v small v bad trade closed
Dia Bras Expl DIB.v oct'10 C$0.14 30-aug-09 C$0.35 150.0% target made, trade closed
S. Amer. Silver SAC.to nov'10 C$1.38 24-oct-10 C$1.60 -15.9% loss on short, small fail
Ventana Gold VEN.to nov'10 C$7.92 27-jun-10 C$13.51 70.6% trade closed on buyout
Lumina Copper LCC.v nov'10 C$1.42 11-aug-10 C$3.65 157.0% trade closed
Antares Minerals ANM.v dec'10 C$1.42 06-dec-09 C$8.40 491.5% trade closed
Rio Alto Mining RIO.v dec'10 C$0.69 23-mar-10 C$2.16 213.0% trade closed
Coro Mining COP.to dec'10 C$0.585 03-oct-10 C$1.24 112.0% target made, trade closed
Stocks To Follow Closed Positions, 2009
Closed positions closed closing PPS
Cardero Res CDY/CDU.to May'09 U$1.20 03-May-09 U$0.87 -27.5% sold on negative news
Eastmain Res. ER.to May'09 C$1.04 06-May-09 C$1.315 26.4% trade closed
Radius Gold RDU.v May'09 C$0.165 03-May-09 C$0.235 42.4% trade closed
Latin Amer Min. LAT.v May'09 C$0.12 03-May-09 C$0.158 29.2% trade closed
Aquiline Res. AQI.to July'09 C$2.03 16-Jun-09 C$1.68 -17.2% took loss, bad timing
Chariot Resources CHD.to Aug'09 C$0.20 12-Jul-09 C$0.415 107.5% trade closed
Castle Gold CSG.v Sep'09 C$0.64 02-Aug-09 C$0.60 -6.3% ST trade didn't work out
Guyana Goldfields GUY.to Sep'09 C$2.30 12-May-09 C$4.50 95.7% profit taken
Los Andes Copper LA.v Sep'09 C$0.09 21-Jun-09 C$0.09 0% trade closed
Pediment Gold PEZ.to Oct'09 C$0.80 09-Aug-09 C$1.00 25.0% trade closed
Minera Andes MAI.to Oct'09 C$0.68 03-May-09 C$0.71 4.4% too much bad news
Dynasty Metals DMM.to Nov'09 C$4.18 03-May-09 C$6.01 43.8% half sold
Rusoro Mining RML.v Nov'09 C$0.55 03-May-09 C$0.57 3.6% underperformed
Important Disclosure
The information and opinions contained within this report reflect the personal views of the author and therefore all
material within should not be construed as accurate or reliable or be utilized as advice for investment or business
purposes. Independent due diligence and discussions with ones own investment and business advisor is strongly
recommended. Accordingly, nothing in this report should be construed as offering a guarantee of the accuracy or
completeness of the information contained herein, as an offer or solicitation with respect to the purchase or sale of any
security or as an endorsement of any product or service. All opinions and estimates included in this report are subject to
change without notice. It is prohibited to copy or redistribute this report to any type of third party without the express
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