IKN #248Premium

The IKN Weekly
Week 248, February 9th 2014
Contents
This Week: U$1,280/oz gold still looks like a key level, Too many bulls, The US macro date for
your diary.
Fundamental Analysis: Minera IRL (IRL.to) (MIRL.L) update.
Stocks to Follow: Overview, Rio Alto (RIO.to) (RIOM), Santacruz Silver (SCZ.v), Coro Mining
(COP.to), Gold Resource Corp (GORO), Network Resources (NET.v), Pretium Resources
(PVG.to) (PVG), Focus Ventures (FCV.v), Darwin Resources (DAR.v), Lara Exploration (LRA.v),
Dalradian Resources (DNA.to), B2Gold (BTO.to) (BTG), Minera IRL (IRL.to) (MIRL.L).
Copper Basket: Overview, Augusta Resources (AZC.to) (AZC), Cordoba Minerals (CDB.v).
Low Cost Producer Basket: Overview, Newmont.
Regional Politics: Why China matters to LatAm, Argentina: The macro financials improve &
the world’s media fall silent, Peru: Bear Creek begins Santa Ana arbitration proceedings, Peru:
The government crackdown on illegal gold trade, Colombia: The Páramo decision is close.
Market Watching: Silver Standard (SSO.to) (SSRI) buys Marigold & market approves, Marlin
Gold (MLN.v) rolls out its Trinidad news (on time and interesting), Luna Gold (LGC.to) is the
next deeply discounted bought deal.
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
U$1,280/oz gold still looks like a key level
Over on the blog on January 6th this year (1), I posted this chart. Even though it may be a little
rudimentary and even though I’m hardly the type
of TA practitioner that has a track record of merit,
I still think the U$1,280/oz level that it spoke of is
an important level for gold to get over and there’s
little reason to entertain any thoughts of a true,
game-changing rally until it’s broken (and FWIW,
gold managed to get to U$1,279/oz recently
before falling back
The good news is that since mid-December we
have been in an upwards trending channel so
sooner or late (maybe end February) if this trend
continues we’re going to challenge my personally
preferred line in the sand seriously.
1

Too many bulls
One of the things that Gary Tanashian’s Notes From The Rabbit Hole weekly missive allows me
to keep an eye on is that of investor sentiment in gold (for those who don’t know, he covers the
data produced by Sentimentrader and shows us the charts that cover several different market
sectors, including gold). What’s evident over the months and years is how goldbug sentiment
doesn’t move like most other market subsector but tends to have just two settings; full bull and
full bear. On the scale of 100 used, it’s rare to see gold flitting about in the 40 (weak bear) to
60 (weakly bullish) range and it’s almost always between 0 and 20 (bear, end of the world, etc)
or up the scale at between 80 and 100 (bull, we all gonna be richrichrich, end of the Fiat money
scam in sight, hyperinflation round the corner etc).
In today’s NFTRH we can see that goldbug sentiment has zoomed back to 80, once again
zooming up and putting us in To Da Moon territory. What it is about goldbugs that makes them
so bipolar is not totally clear to me, aside from the large percentage of ‘true believers’ and
investors through political beliefs that are in their total, however what I do know is that their
anger/elation moves have often provided one of the best contrary signals out there. What I saw
today is yet another reason to play it cagey until a true price breakout for bullion comes along.
The US macro date for your diary
On Tuesday, we get the Fed’s semiannual Monetary Policy Report to Congress and while the
event itself is usually watched quite closely (normally for any sign of discrepancies between
FOMC minutes and the prepared text), this time it’s going to make full headlines as its the first
outing for Janet Yellen as the new Fed chair.
Fundamental Analysis of Mining Stocks
This week was going to be the Santacruz Silver (SCZ.v) NOBS report here, but due to 1) non-
work problem that sucked away my time 2) laziness 3) the way in which SCZ.v has jumped to
$1.20 and away from an immediate adding point and 4) the desire to fill you in with a more
pressing matter, that of Minera IRL (IRL.to) (MIRL.L) below, I’m going to defer the SCZ report
for a week. Particular apologies to reader PB who’s been champing at the bit for this one, you’ll
have it next weekend.
What’s been pending is a better understanding of the situation at Minera IRL (MIRL.L) (IRL.to),
because although some parts of the story are a little better, the ongoing wait for news about
the deal to finance Ollachea and its tight cash position are key to the corporate well-being and
2

therefore share price of the company. In the last few days we’ve also seen the deal to pay the
first tranche of the Rio Tinto optioning payment for Ollachea go through in an all share deal and
then another, smaller near-term liability paid off with shares. On the one hand, these mean that
the share count has jumped to 228.4m and diluted us longs that much further, but the other
signal is that of a company running on fumes and trying all it can to keep the wolves from the
door. I caught up with IRL people last week and as a result, here’s an overview of the main
moving parts of the company. It can be split into three sections
1) Don Nicolas: This is the most positive end of the company at the moment. Progress is being
made on the JV, the cash is flowing into the corporate system from the partner as expected and
preparations for the main part of the build-out are now just about done. The team is happy that
the project is on time and the recent devaluation of the Argentine Peso means a timely forex
saving that is in just the right window for the company and should help buffer costs. At this
point, the company is looking to commission and get first pour from Don Nicolas in 4q14, i.e.
late this year. Personally, I think 1q15 would be just fine. Finally, there’s been drill work done
on the project and more mineralized structures discovered, but this shouldn’t come as so much
of a surprise because it’s always been assumed that the current short mine life of the project
will be extended greatly once the production is off and running; there’s a lot left to discover at
Don Nicolas.
2) Ollachea: This is all about the financing and from word picked up, IRL are advanced in
negotiations to get the rump of the cash from a loan with their current loan holders, Macquarie.
However the devil is always in the details on these things and the terms and conditions of any
deal will be key and as we’re not privy to any of that, we’ll just have to wait and see. We’ve
seen Macquarie demand net smelter royalties and also hedging on enough production to
guarantee repayment of principle in other deals, so those are the kind of conditions we’ll be
looking for once it’s closed and public knowledge. However there is a new player (even players)
entering the scene, as at least one and potentially two third party financiers are apparently
interested in putting together either a forward gold sales deal or an off take agreement to
guarantee sales of the eventual produce going in their direction.
Finally on Ollachea, we hear there’s a lot of in-house work going on to alter construction plans
in order to lower the initial capex requirements. This wouldn’t be money that doesn’t need to be
spent, rather it would be a case of pushing out some expenditures not needed in the first years
to sustaining capex requirements.
3) Corihuarmi and corporate: The small Corihuarmi mine continues to work well and does its bit
for the cash flow requirements at corporate level. We understand that aside from the untapped
$5m in standby loan from the latest Macquarie loan extension, IRL also has around $5m in
treasury and the corporate burn of ~$3m/qtr is offset by $2m or so in Corihuarmi sales. This
means that although things are tight, the company isn’t running on fumes and has what it
needs to get through the next two quarters. By then we’d expect the financing deal to be done
and the pressure lifted from the working capital position. Also, discreet inquiries with Rio Tinto
indicate that the large partner at Ollachea to whom IRL makes its optioning-in payments is
happy about sticking around as a long-term partner and will not take the first opportunity to
dump its 19.28% share position (44,126,780). This is not and cannot possibly be official word,
but your author’s source is reliable.
Conclusion
IRL is our “asset rich cash poor” company that’s been beaten up by the market and now finds
itself under the welter burden of bank debt. It’s also my idea of a ‘Top Pick’ stock and has been
since is 24c price level of last year. Today we find it at 18c, which means that was a bad call
and the problems are all about its financial straits, rather than the quality of projects it holds.
The commentary received by this desk from financial people regarding IRL is how it’s in danger
of being squeezed away from the upside to its projects, particularly that of Ollachea. Buyer’s
market as it is, IRL may hold the titles to Ollachea but they’re useless unless the company can
3

raise the funds to pay for the deal. Adding to the problems is the debt on the books, which is
guaranteed by Ollachea (and Corihuarmi) so if the bank decides to play hardball, IRL would
potentially be forced into creditor protection and the shares are crushed to near zero (and don’t
think it can’t happen, just look at Baja Mining, Huldra Silver, Colossus Mining, Jaguar Mining
and the current path of Carpathian for five topical examples).
However, it’s not all bad at IRL and at least some of the financial squeeze fears I harboured
were allayed by the update from the company last week. It might be upbeat and company spin,
but there seems little doubt that Macquarie aren’t trying to squeeze too hard here and do want
to do a deal that’s win-win in nature. This may be because of good biz practice, but I suspect
that Macquarie too sees the atmosphere for deals, dealings and interest in financing the better
quality end of the junior world increasing and improving, in much the same way as we have in
the last few weeks. There always comes a time when the lone buyer who thinks he’s in total
control of purse strings finds he has unexpected competition. Also, this time there are also
financially solid third parties looking to do a deal (unlike those LionGold shysters last time) and
are willing to stump up cash in return for a direct gold supply deal (forward sales or eventual
off-take). It would only need one of these moving parts to fall into place for all other to do so
as well.
I was asked by one mailer last week whether it’s time to add some more IRL, as its cheap price
must be tempting me into adding and averaging down on this top pick. The reply is that I’m
waiting and I’m ok about holding through with what I have, but hold is the call until financing
news and deals to fund Ollachea are announced. Then with the deals in hand and the details
considered, a better long-term call can get made.
Stocks to Follow
There are currently 14 listed open positions, now that the failed tinyplay Network Exploration
has been removed and True Gold (TGM.v) added. Of the names on our open list, right made
gains last week (RIO.to, BTO.to, LRA.v, DNA.to, GORO short, FCV.v, DAR.v, SCZ.v), one was
unchanged (TGM.v), and five lost ground (IRL.to, EOM.to, COP.to, TAHO short, PVG short). The
biggest percentage winners were Darwin Resources (DAR.v up 42.9%), Lara Exploration (LRA.v
up 13.0%) and Rio Alto Mining (RIO.to up 12.4%). No surprises as to the one that most
pleased you author. Meanwhile, none of the losses got into double figure percentages with the
worst the 7.8% lost by the TAHO short.
With the removal of NET.v and the addition of TGM.v we now have 14 open positions on our
‘Stocks to Follow’ list, one less than our self-imposed maximum. Six are in the red, six are in the
green, two are unchanged.
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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$2.45 6.5% best LT value
Minera IRL IRL.to hold C$0.35 22-jul-12 C$0.18 -48.6% top pick called at 24c
Longs
B2Gold BTO.to buy C$3.07 28-nov-12 C$2.82 -8.1% sold 1/2, rest rides. Quality
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$1.04 -9.6% solid biz model, LT hold
Eco Oro Min. EOM.to ADD C$0.50 22-sep-13 C$0.39 -22.0% st pol risk play, added
Dalradian Res DNA.to hold/add C$0.65 27-oct-13 C$0.70 7.7% Window to re-add, may do
Coro Mining COP.to buy C$0.125 26-jan-14 C$0.135 8.0% the new spec Cu play
True Gold TGM.v buy C$0.39 02-feb-14 C$0.39 0.0% near term flip on bot deal
Shorts
Tahoe Resources TAHO short U$13.10 08-apr-13 U$19.19 -46.5% port hedge, easy2b short
Pretium Res PVG short U$5.38 22-nov-13 U$6.13 -13.9% $4 downside target
Gold Res Corp GORO short U$5.04 26-jan-14 U$4.62 8.3% New re-short
Smaller/Riskier
Focus Ventures FCV.v hold C$0.175 01-jul-12 C$0.235 34.3% revised tgt 25c
Darwin Res DAR.v spec buy C$0.10 14-jul-12 C$0.10 0.0% drill results due
Santacruz Silver SCZ.v hold C$1.02 26-jan-12 C$1.20 17.6% new small position, may grow
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
Rio Alto Mining RIO.to jan'14 C$2.06 07-jun-13 C$2.30 11.7% trading position finally closed
Network Expl. NET.v feb'14 C$0.01 22-jul-12 C$0.005 -50.0% position closed, did nothing
2009, 2010, 2011, 2012 and 2013 closed positions in appendices below
Now for some notes on a selection of the above stocks.
True Gold (TGM.v): Position opened. I picked up what i wanted easily enough at the 39c
price that was box standard all week. TGM does have an interesting project at Karma and its
management team has a strong track record for getting their projects bought by majors. Those
that look to TGM as a longer-term play won’t get much in the way of dissent from me, but all
the same be clear that this trade is for me a near-term flip on expectations of how it will trade
once the bought deal is successfully closed, its scope is limited to that and once the trade offers
me a reasonable win on the back of that, I’ll take it.
Network Exploration (NET.v): Position closed. Just to officially note that NET.v is off
coverage and a 50% loss booked on the tinysmall trade, which in this case looks much worse
than it is. Still, nothing wrong with putting a lump of red on the closed positions list and thereby
keeping the ego in check.
Eco Oro Minerals (EOM.to): Upgraded to Add. This stock continues to be ignored by a
market looking for its hot, first tier junior plays. The company has been keeping very quiet
about the political developments in the Páramo de Santurbán as well, which is almost certainly
a strategic decision because there’s now plenty of evidence building that it will be allowed to
move forward and develop its mine outside the to-be-set regional nature reserve frontier. I’d
guess that the company is waiting for final and official word before pressing its case to the
financial world, but the signs are now clear and those of you looking for a bargain could do a
whole lot worse than this at 40c and under. See ‘Regional Politics’ below for more.
Rio Alto Mining (RIO.to) (RIOM): A decent week and a very good Friday, RIO performed in
the front rank of gold mining plays last week (in this chart, set against GLD, GDX and GDXJ,
which shows how the big miners tracked gold, the small miners rallied well and RIO.to did even
better) and volumes accelerated over the five days too, which is all good.
5

Coro Mining (COP.to): Apart from a flurry on Wednesday, when somebody decided to pay up
to 15c in order to buy 100k shares, COP remained a thinly traded issue once again. It’s going to
take time and patience to build the type of position I’m looking for in this stock and there’s no
reason (or at least none that I can see) to buy at any price. This is the one for the year, not for
a couple of weeks and my mindset is investor, not trader. It’s nice to be back with one, at least.
Gold Resource Corp (GORO): GORO couldn’t join the junior rally party last week and lost
ground instead (though admittedly, only losing a penny) which works fine for our short position
here. The news (2) that top management has seen fir to raise their baseline salaries
(CEO+$100k!) despite the awful performance we’ve seen in the stock may well have
contributed to this laggardly performance.
The next real news from this company is due in early March, when it files its annual financials.
That means we have a month or so to wait and until then, I’m not expecting much in the way
of movement from the stock. On the other hand, anything above $5 will give me the chance to
add to my short at a nice price.
Pretium Resources (PVG) (PVG.to) and Tahoe Resources (TAHO): Some commentary
on our other short positions, starting with a PVG rallied that very strongly on Friday and was
one of the leaders of the junior sector rally. As this five day chart shows, the strong Friday
morning volume was particularly notable.
The overall loss on this short position last
week was 25c, or 4.3%, which is well within
the bounds of the acceptable. Meanwhile
TAHO did much better, rising $1.39 and
creating a 7.8% loss for the short. The only
news offered to the market during the week
by either company was the announcement
that PVG had filed its latest 43-101 on SEDAR
(3). I took a first pass look at that document,
the updated technical report for Brucejack,
and although I freely admit that I didn’t go
very granular on some of the technical aspects
(there comes a point when geologists have an
advantage) there was nothing that stuck as different or controversial compared to its previous
disclosures. That’s probably due to the amount of disclosure we’ve already had over this
headline-making subject but again, neither the 43-101 or the PVG/Snowden position take away
from the basic criticism that they say the deposit is understood and its resource is reliable,
6

while others draw very different conclusions.
Focus Ventures (FCV.v): It’s easy to read too much into these things, but it’s still interesting
to see how VP Corp Development at FCV and Gold Group stalwart Ralph Rushton keeps picking
at FCV shares and adding to his position. He took 100k of the November placement (priced at
12c and with a full warrant, a financing round that’s looking like a real bargain now) and since
then has added another 47k shares, with the latest 19.5k bought at 21c last week (4).
Rushton, who knows what’s going on in every corner of the Gold Group, prefers adding to FCV
instead of buying RDU, CDB or any other of the umbrella group’s companies (including FVI of
course). That’s a positive sign from inside the building, methinks.
Darwin Resources (DAR.v): Still no results, but we hear they’re now “very soon”.
Meanwhile, all sorts of fun and games in the stock price last week, as Sheldon
Inwentash/Pinetree Capital
continued to liquidate positions
in many tinycap companies held,
including DAR. As this
screenshot ripped from Canadian
Insider shows (5) Sheldon
dumped 545,000 shares last
week, with all but 11,000 of
those sold at 5c. It looked as
though DAR was heading for
another hefty percentage loss on
the week, when suddenly buyers
showed up last Thursday and
continued to buy happy on
Friday, turning a 5c stock price
into a 10c close and giving us
our biggest percentage win on
the week. Therefore, if we
consider three things...
1) Sheldon/Pinetree has been liquidating positions across the board, so the selling in DAR
in unlikely to reflect any special insider rumour.
2) A buyer was happy to hit the ask and snap up shares in a 100% trading price range on
Thursday and Friday.
3) We’re now very close to the drilling results at Suriloma part II.
...there’s reason to be quietly optimistic about the newsflow to come, as the market is flashing
us an upbeat signal here. One way or another, I bet we’ll know more this time next week.
7

However, we also need to recognize that even after his liquidation sales, Sheldon/Pinetree still
own 2.5m shares of DAR (2,500,033, to be exact) and that could be a factor that pushes down
the share price (or in a positive scenario takes the edge of any further price gains) in next
week’s trading action.
Dalradian Resources (DNA.to): The bought deal offering continues to weigh on DNA, and
the share price action remained flat around the 70c marker all week. Lump this action in with
that of the newly bought True Gold (see above), these are shares that are doing exactly what
you’d expect of them while a bought deal is underway.
Lara Exploration (LRA.v): On Wednesday (62k) and Friday (48k) we a little more volume
flowing through LRA. Not that much in absolute terms of course, but it looks like there’s
somebody picking at these shares and taking a position. This coincides with a bit of jungledrum
picked up about imminent results from the Liberdade Brazil JV with Chile’s Codelco (6) though
as we’re now less than a month away from PDAC, it wouldn’t surprise anyone to hear “oh,
results coming soon” rumours from any company in any place. LRA needs positive newsflow to
create a little buying interest in the stock, the cart must sit behind the horse.
B2Gold (BTO.to) (BTG): Last week, Canadian brokerage Haywood opened coverage on
B2Gold with a report written by their analyst Geordie Mark. It’s the third report I’ve read of his
in the last couple of months and for what
it’s worth*, in my personal opinion the
work’s been good in each one and he
seems a cut above the average
brokerage analyst. Geordie Mark started
BTO with a buy reco and a $3.50 price
target (based on 9X forward earnings)
which makes sense, and the report went
into a lot of detail about the company’s
activities, strengths and potential
weaknesses. If you’d like a copy, feel
free to mail me with “BTO Haywood
Report” in your title line, I’ll mail you the
PDF by return.
As this 10 day chart shows, the Haywood
report dated Feb 5th and published pre-open on Wednesday probably influenced last week’s
price action in the stock, too. BTO had a decent 7.2% rise and I’m happy about that, but other
stocks made more of the Friday rally.
8

The Copper Basket
After six weeks of 2014 The Copper Basket is showing a 9.86% gain to level stakes.
company ticker price 1/1/14 Shares out Market Cap current pps gain/loss%
1 Augusta Res AZC.to 1.51 144.41 362.47 2.51 66.2%
2 NGEx Resources NGQ.to 1.43 168.71 261.50 1.55 8.4%
3 Reservoir Min. RMC.v 4.97 41.76 252.23 6.04 21.5%
4 Lumina Copper LCC.v 6.29 44.07 249.44 5.66 -10.0%
5 Hot Chili Ltd HCH.ax 0.425 333.11 139.91 0.42 -1.2%
6 Copper Fox CUU.v 0.375 402.96 130.96 0.325 -13.3%
7 Nevada Copper NCU.to 1.35 80.5 111.09 1.38 2.2%
8 NovaCopper NCQ.to 1.60 53.4 80.10 1.50 -6.3%
9 Western Copper WRN.to 0.76 93.68 65.58 0.70 -7.9%
10 Panoro Minerals PML.v 0.35 204.71 64.48 0.315 -10.0%
11 Curis Resources CUV.to 0.57 74.79 50.86 0.68 19.3%
12 Coro Mining COP.to 0.10 159.37 21.51 0.135 35.0%
13 AQM Copper AQM.v 0.11 139.05 19.47 0.14 27.3%
14 Cordoba Min. CDB.v 0.45 31.88 17.53 0.55 22.2%
15 Oracle Mining OMN.to 0.27 49.03 12.50 0.255 -5.6%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg 9.86%
The basket rose by 1.69% from last week, but the gain was wholly due to the rise in Augusta
Resources and would otherwise have been
a weekly loss for the overall average. There
The Copper basket 2014, weekly evolution
were four weekly winners (AZC.to, HCH.ax,
14%
WRN.to, OMN.to), three unchanged stocks
12%
(NGQ.to, CUV.to, AQM.v) and eight losers
10%
on the week (LCC.v, RMC.v, CUU.v, NCU.to,
NCQ.to, PML.v, COP.to, CDB.v) and of all 8%
those the only double figure percentage 6%
move came from Augusta Resources 4%
(AZC.to up 25.5%). 2%
0%
As for copper market prices, they saw
jan5th 12th 19th 26th feb2nd 9th
improvement as the week wore on and the source: IKN calcs
new, better prices (to $3.25/lb on futures)
coincided with the end of the Chinese New Year
period, which is a fairly good sign. However, we’re
still very much in the now very long-standing
trading range so there’s not much to read into last
week’s move. In the wake of the Chinese back-to-
work, there have been a swathe of base metals
reports from the analysis community and I took
time to read several. They ranged from flat out
bearish to flat out bullish on China (and therefore
when it comes to copper, the world) and perhaps
the best one that cross my path came from JP
Morgan in its Metals Weekly report. They noted the
recent weak figures from consumer sentiment and
residential housing sales (upon which most bearish
arguments have been hung), but went on to note
that funding for new housing developments
remained strong, with pre-payments for new
developments hitting new highs. The implication is
that there’s plenty of money in the construction pipeline and we’re seeing a bit of a blip now,
9

that’s all. The report also noted the steady rise in new housing starts and that price increases
were in line with real income growth, suggesting that there’s been no price overheating to
crimp the sector.
The report went on to note a few other points, but the example given above shows that there
may always be ‘headline reaction’ on the main numbers out of China, but scratching the surface
shows that things are in fair shape. This isn’t the high-flying growth story of a few years ago,
but neither are they signs of an imminent hard-landing.
To inventories. World stocks rose by a small 1,963mt (0.42%) to finish the week at 474,882mt.
Inside that number, LME stocks dropped by 6,500mt (2.1%) to 308,025mt, Comex stocks also
dropped slighty, by 398mt (2.1%) to finish the week at 17.083mt. But the news was Shanghai,
which saw a sharp 6.3% stock rise to finish the week at 149,774mt, up 8,861mt on the pre-
New Year level and indicative of the type of upmove we were half expecting from a market
that’s reportedly suffering from slack demand pressure. The message here is be careful of the
overall global number, because the combo of LME inventories dropping and Shanghai rising
may be masking a demand problem in China.
Taken together, the price action, inventories signal and the better end of the analysis reports
on the key China market point me towards feeling slightly more bullish than I have in recent
weeks and months. We’re still going through this tight trading range period for copper and until
either side of the channel is broken, I don’t see any any reason to make any sort of snap
decision on copper and its dependent companies. However, a reasonable China would greatly
reduce the chances of the type of copper price sinkage I’ve been mulling about in 2014 so far.
A move down to $3.00/lb still wouldn’t surprise me much, but anything below that seems less
likely than before and the bottom line to this thought is that we’re currently seeing a bottom
being drawn into copper for the foreseeable future. This does not preclude price inertia
(underlined for a reason), so falling into binary-think and going “well, it’s not bearish so it must
be bullish! To Da moon Alice!” would be a mistake. Copper could spend all year noodling
between $3.15 and $3.35 and in fact, that’s what bodies such as Cochilco are expecting from it.
Now for thoughts on just two of our component stocks:
Augusta Resources (AZC) (AZC.to): The stock of the week and another strong one for AZC,
the stock price has jumped back into the range we
saw a year ago and the market seems to be
pricing in permitting success as some sort of fait
accompli now, with and eventual building and
operation at Rosemont also beginning to be
assumed.
It’s a move I’ve totally missed of course, and it’s
one I’ll keep on missing because I’m more leery
about the thing than the market, at least these
days.
STOP PRESS: At 6pm this Sunday evening, we
found out just why AZC had that big rush up as
Hudbay (HBM) (HBM.to) has moved to buy them out (well, buy out the 84% of shares it
doesn’t already own) in an all-share deal worth C$2.96 on paper (7). My first impression is “not
enough”, so if the market decides to discount AZC to that selling price (potentially by sinking
HBM’s share price and seeing the deal ticket value drop pro-rata), AZC may be a buy on this
due to an eventual sweetener of even a third party competing bid. This move by HBM is rather
bold though, what with its cost overruns on Constancia and recent rounds of cash financing.
What we can also say is that HBM must now feel very confident about the Rosemont permitting
track, which may be true for the round to come with Army Corps, but the EPA veto would still
loom in the background.
10

HBM, with a market cap of just under U$1.5Bn, would have to commit that amount again to 1)
buy AZC and then 2) build its mine. That’s a big commitment and you can be sure that (unlike
SSRI and its all cash deal last week) this deal is going to see the buyer take a sizeable share
price hit. My best trading thought is to watch how HBM (and therefore AZC) opens, but it’s
likely to be very volatile and with speculation of a third party joining in the fun that will likely be
false...at first anyway. To the downside, there may be a 45c gap between AZC.to’s Friday close
and the HBM offer, but it wouldn’t surprise me to see the stock trade down rather than up,
depending on how heavy the hit HBM takes. Bottom line, I’ll look for a lower risk value entry
point once the first wave is done and will sit out any trading action.
Cordoba Minerals (CDB.v): Positive news from the company on Friday afternoon (8), with
the announcement that its placement of 30m units of CDB at 50c (unit = 1 share + full warrant
at 75c) which has raised gross proceeds of $15m and is one of the main steps the company has
to take this year. We can now expect the move to merge the corporation into associate Sabre
Metals and consolidate the land area as planned (see previous coverage).
The success or failure of CDB, an early stage exploration company in a zone that’s slightly off
the beaten track for the junior exploreco community in Colombia, depends for me on the
government getting its act together and finally providing the type of legal framework and
promotional push that it’s promised and failed to deliver on too many occasions. The deposit is
particularly promising (go back to the “discovery” drill holes of 2013 (9) for more, but results
that included 101m of 1.0% Cu and 0.65 g/t Au were a lay-up as that spot was getting twin
drills from a previous historic campaign) but its eventual success will depend on the
government and good community acceptance. Until those are in place, I’m a watcher not a
buyer.
The Low Cost Producer Basket
After 6 weeks of 2013, the Low Cost Producer Basket is showing a 10.82% gain to level stakes.
company ticker price 1/1/14 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Freeport FCX 37.74 1040 33.64 32.35 -14.3%
2 Goldcorp GG 21.67 812 20.74 25.54 17.9%
3 Barrick ABX 17.63 1000 18.89 18.89 7.1%
4 Newmont NEM 23.03 497.87 10.71 21.52 -6.6%
5 Silver Wheaton SLW 20.19 357.39 8.08 22.62 12.0%
6 Franco Nevada FNV 40.74 147.01 7.27 49.48 21.5%
7 Agnico Eagle AEM 26.38 173.43 5.60 32.31 22.5%
8 Pan American PAAS 11.70 151.41 1.99 13.15 12.4%
9 B2Gold BTG 2.02 651.4 1.66 2.55 26.2%
10 First Majestic AG 9.80 117.02 1.25 10.72 9.4%
all prices in U$, using NYSE ticker prices Portfolio avg 10.82%
Just three losers in the table this week (FCX, ABX, NEM) and the other seven winners (GG,
SLW, FNV, AEM, PAAS, BTG, AG), so my best guess is that the bigger caps got caught in the
selling of broader markets while the relatively smaller market cap companies we have got a
boost from the safe haven qualities of the underlying metals. The best performer was B2Gold
as its US listing BTG moved up by 9.4% on the week.
Newmont (NEM), featured in last week’s write-up at this point and pointed to as potentially
oversold, didn’t manage to return a rebound gain and lost 8c on the week, though we should
note that the selling continued through Thursday and the stock finally managed to catch a
11

convincing bid only on Friday, along with the rest of the sector. It still looks oversold to me on
2014 guidance which was lower than the market
had expected, but still not that bad. Any
improvement in the gold price and that will be
soon forgotten.
Again, a breakdown of relative performance to
date indicated that generally speaking, gold names
are performing better than silver names. Along
with the weakness seen in Freeport (FCX) so far,
this just about covers an explanation for the gap
that’s developed between our list’s overall
performance and that of our control benchmark,
the gold miner’s ETF (GDX). Here today we debut
with the chart (the sample now big enough).
The Low Cost Producer Basket: Weekly performance and
comparative to GDX control
14%
12%
basket
10% gdx control
8%
6%
4%
2%
0%
Dec31st jan5th 12th 19th 26th feb2nd 9th
source: Yahoo! Finance, IKN calcs
Regional politics
Why China matters to LatAm
We cover the market mostly via The Copper Basket above, but China’s influence on South
America is the single greatest demand factor for the region as this interesting chart, compiled
from Bloomberg data and found on Twitter (10), shows.
That’s an impressive graphic. In fact, we could even say that China matters most to South
12

America, rather than Latin America. Mexico at the bottom of the pile here has its own export
dynamic thanks to the now 20 years of free trade agreements with its neighbour The USA.
Mexico’s export mix is more dependent on manufactured goods to the States (cars, big box
whitegoods, etc) and the absolute size of the economy means China will have to make big
dollar inroads before changing its position greatly.
At the other end of the scale we have Chile, Brazil and Peru. For Brazil it’s iron ore and
soybeans that go across the Pacific (sidebar; if we saw Argentina on this Bloomberg table we’d
see their soybean trade doing the same kind of things to their squiggly line). For Chile and Peru
it’s copper, with a few metals as minor additions to the exports, then agro and fishery. As for
Venezuela ther ein the middle of the pile, its increasing dependency on oil sales to China (and
not in The USA) explains the acceleration.
Argentina: The macro financials improve, the world’s media fall silent
This time last week, Argentina’s official forex rate was ArgP$8.03 to the dollar, the unofficial
‘dolar blue’ was trading at ArgP$12.55 and the BODEN 15 bond (the one recommended as an
interesting buy) was offering a 19% interest rate on paper set to mature next year.
Today Argentina’s official forex rate is ArgP$7.87 to the dollar (16c stronger), the unofficial
‘dolar blue’ is ArgP$12.25 (30c stronger) and the BODEN 15 bond (the one recommended as an
interesting buy) has rocketed back and now “only” offers a 13.5% interest rate (though that’s
still pretty attractive) as the bond price moved from its recent low of U$85.69 to close the week
at U$93.75 (11). The one closely followed number that’s gone against the country is the Central
Bank international reserves figure, which closed Friday at U$27.821Bn (was U$28.003Bn this
time last week), though even that saw improvement on Friday of U$19m (12) which was the
first time reserves had clicked up since January 20th, before all the fun began.
In short, things have calmed greatly and it’s now obvious that reports of the country’s imminent
financial death were greatly exaggerated by a bizmedia that’s suddenly and strangely fallen
silent of the country. As noted in both IKN246 and IKN247, none of this is much of a surprise to
your author.
Argentina: "Dolar Blue" (unofficial street dollar rate) in Pesos
13.5 2014 year to date
13.25
13
12.75
12.5
12.25
12
11.75
11.5
11.25
11
10.75
10.5
10.25
10
13
22
naj
32
naj
42
naj
52
naj
62
naj
72
naj
82
naj
92
naj
03
naj
13
naj
1
.bef
2
.bef
3
.bef
4
.bef
5
.bef
6
.bef
7
.bef
source: @dolarblue/La Nacion
$U
rep
$PgrA
Peru: Bear Creek begins Santa Ana arbitration proceedings
As noted on the blog last week (13) Bear Creek Mining (BCM.v) has now started the formal ball
rolling on eventual international arbitration over the revoking of Santa Ana concession by then-
President Alan García in 2008 (14). We now have a six month period in which the two sides can
negotiate and come to a formal agreement, else the case is sent o the CIADI tribunal for
decision. There are three things that can happen from here:
1) The government of Peru and Bear Creek amicably decide to restore the concession
rights.
2) The government of Peru and Bear Creek amicably decide on a financial compensation
figure.

3) The government of Peru and Bear Creek reach no agreement in the next six months
and the case goes to CIADI, where it drags on for a long time. Any eventual verdict
may go either way (CIADI has no automatic bias to corporation or country in its history,
siding with both sides in turn) and then the compensation offered may be monetary of
whatever amount or may be the return of the concession.
Notably, BCM again tied the success or failure of its larger Corani project to that of Santa Ana
when stating in the NR that “...the successful resolution of the Santa Ana dispute is a critical
component to the Company's ability to raise financing for, and ultimately the potential success
of, the Corani Project”. This is the same strategy used in November last year (that did the
company no favours) and is, in my opinion, highly risky. There is no real reason why Corani
cannot move ahead on its own and if the government of Peru decides it’s being used as some
sort of pressure tactic, it could dig its heels in and hard.
I’d expect what the Peru government of Ollanta Humala would like to do is un-revoke the
concession and give it back to Bear Creek in order that they build their mine, but if I were BCM
that’s the last thing I’d want because locals are still dead set against the mine being built (and
will stay that way). A white elephant indeed, so if I were BCM I’d be pushing for financial
compensation of some shape or form and the suit filed already has an implied figure of U$1.2Bn
in compensation. That’s likely to be a bargaining position, so if Peru does decide to roll over and
not take this to the world tribunal, they’d have to agree on a figure. To give an idea on that,
BCM has 92.29m shares outstanding, an IKN estimated $48m in cash and a working capital of
$46m, which can be rounded to 50c/share. So even a potentially modest $200m settlement
would mean BCM had over $2.50/share in cash once legals were paid, which compares
favourably to the current CAD$1.93 share price.
Though personally I’m not betting on it being that easy for BCM, who has been in conversation
with the government for years and is now trying to force a result. Not only are there potential
financial issues and local politics as well, but this deal could become a pawn in a larger national
political game. For example Alan García signed the executive order, and not only has he been a
thorn in the side of Peru’s current President Ollanta Humala recently, but he’s also obviously
started his campaign for the 2016 presidential election and his ambitions to become President
for a third time are more than obvious. This affair may become a political weapon to be used
against García and if so, Peru may prefer to bog it down in the world courts and the resulting
delay (we’re talking years, not months) wouldn’t suit BCM’s ambitions, particularly as they’ve
made this “If no Santa Ana then no Corani” gambit. Risky stuff.
I’m not a buyer of BCM.v on this news and think the company is stupid to have raised the
political risk on Corani by tying its fate so tightly to Santa Ana. In a best case they get a big fat
cheque and then get to build their big mine. In a worst case they lose everything. In my own
personal line-of-least-resistance case they’re going to have to take this to the world court and
wait for years for a resolution. Meanwhile, the world will move on without them.
Peru: The government crackdown on illegal gold trade
It’s time to admit an error and say I’m surprised, though pleasantly, about the way in which the
government of Peru is moving to crack down on the illegal gold mining trade that stems from
the environmental disaster zone of Madre de Dios (see reports passim). When the Humala
government announced around 12 months ago that it would put the squeeze on the illegal gold
trade, said to move something in the region of U$3Bn, pay no taxes and leave its mess and
ruined jungle zones behind, I was sceptical they could be in any way effective. However since
then we’ve seen smart strategies including prosecution and jail for illegal miners (15), large-
scale operations in the MDD zone that have destroyed dredgers on the river and machinery in
the near zones (16) and the latest initiative to crack down on the illegal and unlicenced
refineries that operate in the coastal Nazca/Chala region of South Peru and use MDD gold as a
main feed source. In the last week, six illegal refineries have been identified and two totally
destroyed (17). As a side-issue, it was this recent operation that forced Dynacor Gold (DNG.to)
to suspend its refinery operations in the very same Nazca/Chala area, pending investigation of
14

their operations. And now another front has been opened in the fight, as from February 21st
(18) dedicated police teams will be installed at the key airports in the South (Arequipa, Juliaca,
Cusco and Madre de Dios) and in Lima airport to detect and stop gold with dubious precedence
from making its way through. In the words of the people in charge, “With the implementation
of these teams we will deliver hit illegal mining hard, because their chain of transport will be
disrupted. The objective is to stop this mining from being profitable and raise their costs of
transport”.
This latest plan adds to the number of coordinated and generally well thought out policies Peru
is putting in place, and it’s the series of intelligent moves (rather than previous half-measures
seen in previous governments that allowed the illegal mining to grow unchecked) which has
been the main pleasant surprise. I’m quick to criticize government inefficiencies, so it’s only fair
to praise one when they do something well.
As for Dynacor (DNG.to), which is the main actionable way of playing the “artisan gold” trade in
Peru via the market (though we should add that Inca One (IO.v) now plans to increase the
capacity of its small refinery in Chala), here’s a prediction even though it’s a stock and a story
that I’m going to avoid totally and not take up any sort of position, long or short:
1) Some time in the next few weeks the company will announce it has been cleared after
an investigation and is free to re-start operations.
2) Its price goes back up on the news.
3) However, it will have to pay a lot more for its gold concentrate feed in the future and
its profit margins will never reach those of previous levels. This won’t be noticed in
1q14 because they can plead disruption, but as from 2q14 onwards the margin squeeze
will become clear.
Colombia: The Páramo de Santurbán decision is close
Here’s one of those pieces that could find its place in ‘Market Watching’ below, because it’s also
about a specific trade of ours and as the news is good there’s an opportunity to turn a profit on
the information. But as it’s mainly political, the call is to put it here.
A new flurry of news out from the ongoing discussions over the key Páramo de Santurbán
nature reserve decision have shown once again that the government is leaning towards
allowing the formal and concession-holding mining companies based around the Vetas area of
the Páramo to operate. This would include positive decisions for the two area play companies
most closely followed by The IKN Weekly at the moment, namely Galway Gold (GLW.v) and Eco
Oro Minerals (EOM.to). Of those two, your author owns EOM.to and has been seriously
considering a move into GLW.v as well.
15

So to developments, and on Monday and Tuesday (19) reports started flowing from Colombia
about how the government would allow those mining companies with exploitation (i.e.
operation) permits to work the region and how the previously granted licences would be
respected. This at first caused a little confusion, with some reports suggesting (20) that all but
two companies would have to leave, with the leavers including GLW and EOM. However, once
the statements from the Environment Minister were fully understood, it indicated that there
were 13 concessions that complied with the stipulations as mentioned by the minister. At this
point your author directly quotes the decent media source on matters Colombia (and one that’s
been covering this specific issue closely over the last few months) El Espectador (author’s
translation) (21):
“From this announcement, El Espectador asked the Autonomous Regional Corporation
for the Defence of the Bucaramanga Meseta (CDMB, in Spanish Corporación
Autónoma Regional para la Defensa de la Meseta de Bucaramanga) for information on
those mining titles that are currently in good standing in the areas in and around the
Páramo Santurbán and thereby identify those that will be allowed to develop.
“Although the most detailed map of the Páramo (made last year by the Alexander Von
Humboldt institute on a scale of 1 to 25,000) has not yet been published, the CDMB
outlined the current state of mining titles on the old map that has been in force since
2007 and will be updated.
“While the mining minister only referred to a couple of mining titles, a total of 13 titles
appears on the list with exploitation (operating) licences that coincide with terrains
defined as páramo. Five of those belong to Leyhat (i.e. GLW.v), two to Eco Oro
(EOM.to) and the rest are distributed between the La Providencia mining company (1),
the Sociedad Minera Trompetero mining company (1), La Elsy Ltd (1), AUX (1), the
San Antonio de Yolombó mining company(1) and the La Esmeralda mining company
(1).”
IKN back. What seems to be happening is that although we do not yet have an official
announcement on the two critical issues, namely 1) where the Páramo boundary is set and 2)
whether any mining company with licences in good standing will be allowed to develop inside
that boundary, we’re now getting close to the denouement (I wish I could be more specific than
“close”, but these people drag their heels like no others). The resolution now looks like being
favourable to at least the part of EOM.to that the company is looking to develop into a mine
(once upon a time its plans to build an open pit mine included knocking the top off a large
piece of the inner páramo, now its general plans are a smaller underground operation accessed
from what’s likely to be just outside the new limits). If we go by the 2007 map, some 52% of
the company concession is inside the likely limitation boundary and 48% outside, but the good
news is that all the concession EOM now wants to develop is part of the 48%.
By the way, the same good news also applies to GLW.v, again generally speaking at least.
The bottom line here is that the Colombian government has just flashed us a large buy signal
on EOM.to (and GLW.v if you prefer). The official ruling still isn’t with us but when it comes, it’s
now pretty obvious that the ruling will include allowing the Vetas-based companies to develop
and operate their underground mining developments. You can of course wait for the official
news before buying and my only real worry is seeing the whole thing drag on too long, as it’s
been prone to do. Otherwise, if you like the idea of playing the type of political risk call that’s
seen EOM.to make moves like these on previous occasions, it’s time to buy a few. Your author
is now very confident about getting the ruling in favour.
Market Watching
Silver Standard (SSO.to) (SSRI) buys Marigold, market approves
At the time of the Tuesday announcement of the deal (22), over at on the blog (23) I
considered the SSRI deal to buy the Marigold gold mine from ABX and GG for $275m in cash to
16

be a good one for the purchaser, but as it turned out the action in SSRI stock afterwards was
even more interesting. From a low of U$7.22 on the deal announcement (and all the U$7.40
you could have possibly wanted) SSRI rallied to U$9.11 at the end of Friday, an upmove of
26.2% (and 18.5% than Monday’s close). For sure SSRI benefitted from the junior rally on
Thursday and Friday as well (right stock, right momentum, right time) but the message both
clear and different from previous deals.
The market likes SSRI with $275m in an asset more than $275m in cash treasury.
There are other aspects to the deal to which the market approved, such as the relatively cheap
price paid for a mine with 16 years of life left in it and the lessening of overall political risk for
SSRI by adding a USA mine to its producing Argentine mine. But the thing that caught the
Tuesday morning discounters off-guard is that this market is now changing its attitude to deals.
Even a couple of months ago, the type of initial reaction seen in Silver Standard stock on
Tuesday would have stuck and you’d have all sorts of commentators sucking on about the risk
of buying a mine that’s breaking even at best.
In other words, my interest in the aftermath of this deal is less about SSRI and more about the
wider signal it sends. Along with Goldcorp’s (GG) bid for Osisko (OSK.to), which is going to
need a sweetener to go through and see GG pay up for the privilege, last week’s SSRI news
again marks a change of the tide in M&A.
Now that CEOs see the market rewarding a
purchaser rather than hammering it for
spending the rainy day cash, they’ll be that
much more willing to seal the next deal.
As for the rest of SSRI, after looking a little
more carefully at its current position
(instead of buying when I said it might be
worth a buy (24)) and watching the best
prices run away from me, overall this is one
that depends too much on a bullish
showing from silver to be of real interest to
me right now. Pirquitas in Argentina is still
the main price driver of this stock and until
silver moves back up, it’s not going to make SSRI much money. Those of you who like the idea
of leverage to silver today should consider this one more carefully of course, but I’m
somewhere else having just added some silver exposure via Santacruz (SCZ.v) which is enough
for the moment, thanks very much. What’s more I’m thinking about the shorting potential
offered by Fortuna (FVI.to) once again, not really conducive to a greater long Ag theory.
Marlin Gold (MLN.v) rolls out its Trinidad news (on time and interesting)
Last week we mentioned Marlin
Gold (MLN.v) in our trade ideas and
along the way wrote that the
company “...is close to providing a
public NR update on progress and
aside from a few minor glitches,
the project is advancing very well
and should be pouring gold soon”.
Sure enough the NR hit last
Thursday (25) and although it
didn’t cause much of a price
movement, there was enough to
like about the contents. The main
points being:
17

• First gold pour at La Trinidad now set for this month
• All major infrastructure works now in place
• Cash on hand will be enough to fund the company through to FCF+ status
The company plan involves ramping the operation in year one to reach a break-even point
costs-wise in the near term, then expansion and showing what La Trinidad can achieve from
year two onwards. Therefore immediate massive profits aren’t the objective, but cash
independence is and as Friday’s close was the best price seen for the stock since January 2013,
the market approved of what it’s seeing so far.
With 680m shares out (726.47m fully diluted) there’s a lot of paper emitted, which makes this
producer worth over $70m in market cap already. That’s mentioned in case your eyes get stuck
on the 10c price level and think it’s a nanocap of the DAR.v or FCV.v variety. However, main
backers Wexford own around 79.4% of the total shares out (and 79.92% of the fully diluted
count) and have made it plain (which was my error at the time) that they’re not looking to OPA
this and turn it private; they’re keen on having a minority partnership and public listing.
If we consider the NPV of the current project (based on $1,500/oz gold) and the price
sensitivities (featured in the latest corporate presentation (26) the current estimated NPV at
$1,250/oz and ceteris paribus criteria is around $41m. That would suggest that its current 10.5c
isn’t a marvellous bargain, but once operating and cash flow positive, the chances of increasing
the resource size and mine life (currently a small five years) are apparently strong, which would
turn Trinidad into a cheap looking asset at today’s prices.
The bottom line is that at 9c last week it looked quite interesting, but at 10.5c now I’m not a
buyer, even with the good news delivered and a gold pour on the way. What MLN offers for the
spec buyer is good leverage to gold (the NPV goes to $79m at $1.5k gold, basically a double)
and exploration upside. Those are good things, as is the apparently good execution of the
project which is basically on time and under budget. However it’s still a small mine and on
consideration (and I’ve given this one plenty of strategic thought) I’m going to keep new
money away from any small plays until there’s been a consolidation of the rebound and money
starts flowing into other tiers of the market. With COP.to recently opened (though admittedly
copper not gold) and with plans to add to that one as and when, I think that’s all the 10c-15c
stocks for me for the time being.
Luna Gold (LGC.to) is the next deeply discounted bought deal
Last week we highlighted the case of the similarities in the recently announced bought deals for
a raft of juniors, namely Timmins Gold (TMM.to),
Torex Gold (TXG.to), Lydian Intl (LYD.to),
Dalradian (DNA.to) and True Gold (TGM.v). The
thesis presented them as a new trend and that
there’s a buying opportunity being offered for a
near-term trade, as once these sweetheart-to-
insto, buyer’s market deals are closed the
chances of the stocks bouncing back to recent
higher levels are very strong. We rounded it off
by affirming the position in the already bought
Dalradian (DNA.to) and picking out True Gold
(TGM.v) for the new and near-term trade.
We didn’t have to wait long until more evidence
of this trend showed up. This time it was Luna
Gold (LGC.to) and the deal (27) is so obviously discounted to appease the monied gentry that
my theory of last week got a serious boost. The plan is to sell 6.95m shares at $1.18 apiece to
raise $20m in gross proceeds, which means it’s priced 25c below its $1.43 close of the trading
18

day before. And as noted on the blog at the time, the discount is so deep that it’s at a price last
traded by the stock on July 2013.
At least this time there was no warrant attached, and at least the market took the hint and
priced the share over the offering, closing out the week at $1.24. But what this means to the
current trend theory that got me buying True Gold (TGM.v) last week is that it’s all going in the
right direction.
Conclusion
IKN248 is done, we end with bullet points:
• I own Eco Oro (EOM.to) and I may add and average down (for a third time) even
though I’m getting close to my limit and don’t want to start eating too far into cash
reserve. The signal from Colombia last week was the most obvious yet that the páramo
decision is going its way.
• I’m more more comfortable with Minera IRL (IRL.to) (MIRL.L) now, especially on
hearing that it’s not just Macquaries who’s interesting in funding this further. It’s a hold
until we see the financing deal.
• Tonight’s Augusta/Hudbay deal is another sign that the market is waking up and
getting more confident about doing M&A, so add it to SSRI and Marigold. Good for
juniors, good for us. I’m a little less bearish about copper’s prospects after doing some
watching and reading last week, too. This week to come sees China back at full speed.
• I’m still not a buyer of Argentina but as the last week has shown, it’s not a country
that’s going straight down the tubes, either.
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.incakolanews.blogspot.com/2014/01/a-gold-chart.html
(2) http://www.incakolanews.blogspot.com/2014/02/gold-resource-corp-goro-news.html
(3) http://finance.yahoo.com/news/pretivm-files-ni-43-101-180634817.html
(4) http://www.canadianinsider.com/node/7?menu_tickersearch=fcv
(5) http://www.canadianinsider.com/node/7?menu_tickersearch=dar
(6) http://www.laraexploration.com/our-projects/brazil/liberdade-copper-project/default.aspx
(7) http://finance.yahoo.com/news/hudbay-offer-acquire-augusta-corporation-230259476.html
(8) http://finance.yahoo.com/news/cordoba-minerals-announces-closing-15-192600896.html
(9) http://finance.yahoo.com/news/cordoba-minerals-announces-discovery-high-133000622.html
(10) https://twitter.com/M_McDonough/status/432624108363579392
(11) http://www.puentenet.com/cotizaciones/bonosCotizaciones!getBonoById.action?id=BONO_RO15EXT
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(12) http://www.infobae.com/2014/02/07/1542316-el-bcra-sumo-us19-millones-las-reservas
(13) http://incakolanews.blogspot.com/2014/02/bear-creek-bcmv-news.html
(14) http://finance.yahoo.com/news/bear-creek-files-notice-intent-123000321.html
(15) http://peru21.pe/impresa/carcel-dos-mineros-que-depredaron-reserva-2151773
(16) http://www.larepublica.pe/30-08-2013/destruyen-embarcaciones-utilizadas-por-los-mineros-ilegales-en-madre-de-
dios
(17) http://www.elperuano.pe/Edicion/noticia-intervienen-seis-plantas-tratamiento-mineria-ilegal-15294.aspx
(18) http://gestion.pe/politica/ejecutivo-instalara-equipos-especiales-aeropuertos-contra-mineria-ilegal-
2088584?utm_source=dlvr.it&utm_medium=twitter
(19) http://www.elespectador.com/noticias/redes-sociales/santurban-solo-se-quedaran-mineras-ya-tengan-permiso-ex-
articulo-472870
(20) http://www.las2orillas.co/las-13-empresas-mineras-saldrian-del-paramo-de-santurban/
(21) http://www.elespectador.com/noticias/medio-ambiente/santurban-solo-se-quedaran-mineras-ya-tengan-permiso-ex-
articulo-472929
(22) http://finance.yahoo.com/news/silver-standard-purchase-marigold-mine-054600658.html
(23) http://incakolanews.blogspot.com/2014/02/silver-standard-ssri-ssoto-notes.html
(24) http://incakolanews.blogspot.com/2014/02/silver-standard-ssri-ssoto-notes.html
(25) http://finance.yahoo.com/news/marlin-gold-provides-operating-la-171723740.html
(26) http://www.marlingold.com/i/pdf/ppt/MarlinGold_Jan14.pdf
(27) http://finance.yahoo.com/news/luna-gold-corp-announces-c-125500062.html
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-jan-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-dec-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-apr-12 C$0.63 -37.0% sold, took loss
Primero Mining PPP nov'12 U$7.26 07-oct-12 U$6.73 7.3% Short trade closed
Bear Creek Min. BCM.v nov'12 C$3.38 07-nov-11 C$3.72 10.1% Took small profit
Vena Resources VEM.to dec'12 C$0.70 31-may-09 C$0.18 -74.3% Failed trade (caps F)
Galway Res GWY.v dec'12 C$2.19 24-nov-12 C$2.30 5.0% closed good ST arb trade
Stocks To Follow Closed Positions, 2011
Closed in 2011 closed close PPS
Sunward Res SWD.v jan'11 C$1.05 21-nov-10 C$1.63 55.2% target made, trade closed
Serengeti Res SIR.v mar'11 C$0.245 05-dec-10 C$0.285 16.3% sold pre-tgt, ST trade fail
Fronteer Gold FRG apr'11 U$2.37 03-may-09 U$15.24 543.0% buyout, trade closed
Minefinders MFN apr'11 U$9.09 07-nov-10 U$16.89 85.8% target made, trade closed
Metalline Min. MMG may'11 U$1.04 26-jan-11 U$0.89 -14.4% exit, resource disappointed
Peregrine Met PGM.to jul'11 C$0.87 06-mar-11 C$2.60 198.9% buyout offer, closed
Dynasty Metals DMM.to jul'11 C$4.20 03-may-09 C$2.85 -32.1% Sold. Fail. Move on.
Aura Silver AUU.v aug'11 C$0.22 13-oct-10 C$0.16 -36.4% Bad pick. Take loss
U.S. Silver USA.v aug'11 C$0.52 26-jan-11 C$0.71 36.5% closed to make room
B2Gold Corp BTO.to sep'11 C$2.80 12-may-11 C$4.27 52.5% target made, trade closed
Bear Creek Min. BCM.v sep'11 C$3.80 27-may-11 C$4.17 9.7% macro sell call victim
Minefinders MFN sep'11 U$14.70 10-aug-11 U$15.15 3.1% macro sell call victim
Great Panther GPR.to sep'11 C$3.03 22-aug-11 C$2.64 -12.9% macro sell call victim
Fortuna Silver FVI.to sep'11 C$1.07 03-may-09 C$5.36 400.9% sold 20%, macro sell call
Focus Ventures FCV.v nov'11 C$0.40 20-apr-10 C$0.20 -50.0% cut losses, bad trade
Regulus Res. REG.v dec'11 C$1.17 14-aug-11 C$0.52 -55.6% cut on news of poor 43-101
2009 and 2010 closed positions in appendices below
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Stocks To Follow Closed Positions, 2010
Closed in 2010 closed close PPS
B2Gold Corp BTO.to Jan'10 C$0.88 08-nov-09 C$1.49 68.2% target made, trade closed
Radius Gold RDU.v Jan'10 C$0.18 23-aug-09 C$0.40 122.2% target made, trade closed
MAG Silver MVG mar'10 U$5.60 23-nov-09 U$7.28 30.0% closed in pdac week
Riverside Res RRI.v mar'10 C$0.435 20-sep-09 C$0.60 37.9% closed in pdac week
Amarillo Gold AGC.v mar'10 C$0.81 31-may-09 C$0.70 -13.6% closed in pdac week
B2Gold Corp BTO.to apr'10 C$1.24 18-feb-10 C$1.50 21.0% target made, trade closed
Lumina Copper LCC.v apr'10 C$0.84 14-jun-09 C$1.55 51.2% total position now sold
Troy Resources TRY.to may'10 C$1.10 03-may-09 C$2.25 104.5% sold on negative results
AuEx Ventures XAU.to may'10 C$2.51 24-may-09 C$3.38 34.7% trade closed
Nevada Copper NCU.to jun'10 C$3.27 14-mar-10 C$2.03 -37.9% need to lower Cu exposure
Carpathian Gold CPN.to jun'10 C$0.39 14-mar-10 C$0.35 -10.3% too exposed to cap raising
Amerix PM Corp APM.v jun'10 C$0.065 08-nov-09 C$0.05 -23.1% victim of macro bear
Antares Minerals ANM.v jun'10 C$1.42 06-dec-09 C$2.10 47.9% sold half
Vena Resources VEM.to jun'10 C$0.37 31-may-09 C$0.23 -37.8% sold half
Minera Andes MAI.to sep'10 C$0.75 28-jul-10 C$0.95 26.7% ST trade closed
Gold-Ore Res GOZ.to sep'10 C$0.52 01-aug-10 C$0.75 44.2% target made, trade closed
B2Gold Corp BTO.to sep'10 C$1.45 25-may-10 C$2.01 34.5% target made, trade closed
Blue Sky Uran BSK.v oct'10 C$0.41 19-may-10 C$0.22 -46.3% v small v bad trade closed
Dia Bras Expl DIB.v oct'10 C$0.14 30-aug-09 C$0.35 150.0% target made, trade closed
S. Amer. Silver SAC.to nov'10 C$1.38 24-oct-10 C$1.60 -15.9% loss on short, small fail
Ventana Gold VEN.to nov'10 C$7.92 27-jun-10 C$13.51 70.6% trade closed on buyout
Lumina Copper LCC.v nov'10 C$1.42 11-aug-10 C$3.65 157.0% trade closed
Antares Minerals ANM.v dec'10 C$1.42 06-dec-09 C$8.40 491.5% trade closed
Rio Alto Mining RIO.v dec'10 C$0.69 23-mar-10 C$2.16 213.0% trade closed
Coro Mining COP.to dec'10 C$0.585 03-oct-10 C$1.24 112.0% target made, trade closed
Stocks To Follow Closed Positions, 2009
Closed positions closed closing PPS
Cardero Res CDY/CDU.to May'09 U$1.20 03-May-09 U$0.87 -27.5% sold on negative news
Eastmain Res. ER.to May'09 C$1.04 06-May-09 C$1.315 26.4% trade closed
Radius Gold RDU.v May'09 C$0.165 03-May-09 C$0.235 42.4% trade closed
Latin Amer Min. LAT.v May'09 C$0.12 03-May-09 C$0.158 29.2% trade closed
Aquiline Res. AQI.to July'09 C$2.03 16-Jun-09 C$1.68 -17.2% took loss, bad timing
Chariot Resources CHD.to Aug'09 C$0.20 12-Jul-09 C$0.415 107.5% trade closed
Castle Gold CSG.v Sep'09 C$0.64 02-Aug-09 C$0.60 -6.3% ST trade didn't work out
Guyana Goldfields GUY.to Sep'09 C$2.30 12-May-09 C$4.50 95.7% profit taken
Los Andes Copper LA.v Sep'09 C$0.09 21-Jun-09 C$0.09 0% trade closed
Pediment Gold PEZ.to Oct'09 C$0.80 09-Aug-09 C$1.00 25.0% trade closed
Minera Andes MAI.to Oct'09 C$0.68 03-May-09 C$0.71 4.4% too much bad news
Dynasty Metals DMM.to Nov'09 C$4.18 03-May-09 C$6.01 43.8% half sold
Rusoro Mining RML.v Nov'09 C$0.55 03-May-09 C$0.57 3.6% underperformed
Important Disclosure
The information and opinions contained within this report reflect the personal views of the author and therefore all
material within should not be construed as accurate or reliable or be utilized as advice for investment or business
purposes. Independent due diligence and discussions with ones own investment and business advisor is strongly
recommended. Accordingly, nothing in this report should be construed as offering a guarantee of the accuracy or
completeness of the information contained herein, as an offer or solicitation with respect to the purchase or sale of any
security or as an endorsement of any product or service. All opinions and estimates included in this report are subject to
change without notice. It is prohibited to copy or redistribute this report to any type of third party without the express
permission of the author.
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