IKN #257Premium

The IKN Weekly
Week 257, April 13th 2014
Contents
This Week: Some natural selection, Ukraine redux, Gold went up again but stocks didn’t.
Fundamental Analysis: NOBS report on Timmins Gold (TGD) (TMM.to).
Stocks to Follow: Overview, Timmins Gold (TGD) (TMM.to), Focus Ventures (FCV.v), Eco Oro
(EOM.to), Coro Mining (COP.to), Rio Alto (RIO.to) (RIOM), Gold Resource Corp (GORO),
Santacruz Silver (SCZ.v), Bear Creek (BCM.v), Dalradian Resources (DNA.to), Minera IRL
(IRL.to) (MIRL.L), Salazar Resources (SRL.v).
Copper Basket: Overview, NGEx (NGQ.to), Reservoir (RMC.v), Curis (CUV.to).
Low Cost Producer Basket: Overview, Goldcorp (GG), First Majestic (AG) (FR.to).
Regional Politics: Argentina: The mining nationalization debate reappears, Chile: An opinion
poll favours extra taxes for mining companies (again), Peru: FinMin Castilla talks mining macro.
Market Watching: Sandstorm (SAND) (SSL.to): The Brazil law bill to strip Colossus of its
Serra Pelada concession passes its first committee, Van Eck buying silver miners.
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
Some natural selection
There haven’t been hundreds, but in the last couple of weeks there have been a handful NRs
appearing from the moribund end of the junior sector that tell of companies failing to file
annuals, expecting to have trouble filing annuals, without the money to file AIFs, coming up
short for the cash to run the necessary annual audit (quarterlies don’t have that burden) and as
a consequence, applying for management cease trade orders (MTCO) which buy them more
time (two months normally). The more of these the better, I say.
Ukraine redux: The East
Then a soldier,
Full of strange oaths and bearded like the pard,
Jealous in honor, sudden and quick in quarrel,
Seeking the bubble reputation
Even in the cannon’s mouth.
Jacques, As You like It, Act 2, Sc. 7, ll 152-157
Back in IKN251, as gold popped towards $1,400/oz (never got there) and the world gnashed its
teeth over the Crimean Peninsula, this letter ran a short note on my wife’s reaction to the
unfolding news at the time (reasons why my wife was quoted and sourced were given at the
time, by way of a recap here let’s just say she knows her Ukraine very well indeed). Here’s a
part of the script from the IKN251 intro:
Her first reaction last weekend was “Watch out for Crimea and the East, they’ll want to
be part of Russia, not part of Ukraine”. And as the Crimea events have unfolded over
the last few days, she’s been pointing at a region called Luhansk (aka Lugansk) on the
map (find it in the far eastern corner of your handy map of the Ukraine) and saying
1

“Crimea is a picnic compared to what can happen there”. In short, a pragmatic
Ukrainian (interim) President might let the Crimean peninsula go back to the Russian
rule it prefers but if the East of the country starts voicing its intent to break away hot
war could soon develop. This from another point mentioned by the wife, as she notes
how most Ukrainians recognize that the Crimean Peninsula is more Russian than
Ukraine, therefore it’s going to be slightly difficult to whip up the necessary
motherland defence feelings among both public and soldiery. On the other hand, they
start trying to take lumps out of the East of the country and there will be hell to pay.
IKN257 back. Here we are six short weeks later and the Crimean peninsula is indeed back (or
on the way back, if you want to be a stickler for precise political protocols) in the auspices of
Russia. What’s more, the East is now the big play as this weekend sees the situation in Luhansk
and neighbouring region Donestk deteriorating, the Ukraine government launching a “large-
scale anti-terrorist operation against pro-Russian forces in East” (1) and Ukraine apparently
holding back from paying some key accounts for natural gas supplied by Russia to the country.
The ostensible position that Moscow (Putin) takes in the next few days (the real one may or
may not coincide) is now the central factor. It seems that East Ukraine is up for grabs, the
question is whether Russia will grab at it. But with information such as this (from the same BBC
report) coming our way...
And the US ambassador to the UN said the attacks on police and other buildings in
eastern Ukraine had "telltale signs of Moscow's involvement".
"It's professional, co-ordinated. Nothing grass roots about it," ambassador Samantha
Power told ABC News.
"The forces are doing in each of the six or seven cities they have been active in exactly
the same thing."
...it’s obvious there’s a bigger game going on already. Which brings us full circle and back to
the simple advice offered up in IKN251, ‘own gold bullion’, though owning the stuff is a
different matter and mindset altogether from trading the stuff or any of its mining company
derivative plays, for that matter.
To finish, I now explain and beg slight forgiveness for starting this week with a (yet another)
chunk of Shakespeare. It was only at this point in the writing process that it occurred, as on re-
reading the “owning gold isn’t trading gold” thought above I saw myself in the mirror and the
image reflected back wasn’t that of a soldier, it was more that of my inner whuss market
participant (something I’ve never hidden from your view). Gone are my days of “seeking the
bubble reputation even in the cannon’s mouth” (translating Bill Quill, “risking it all for a bit of
temporary fame”) and I recognize that my circumstances and mindset these days are not for
taking wild risks. Back in my 20s, even my 30s, non-married and with plenty of time to re-build
if it all went wrong, I did indeed take reckless or wild risks with money (with other things too,
for that matter). Some of them worked, others didn’t, but it wasn’t an unusual story for
somebody of my age and attitude. Today is different and my personal circumstances as well as
a different worldview (not better, not worse, simply different) mean I approach all things
financial is greatly different way. You out there may still be The Soldier (or you may the the
lover, the justice, the pantaloon) and if so enjoy the act of the stage. I’m not, I’m the boring
guy who exhorts you to “be careful” and “ensure your future is covered” before running out and
placing wild bets on these cockamamie juniors we follow.
Anyway, own bullion.
Gold went up again, but stocks didn’t
April is the cruelest month, breeding lilacs out of the dead land,
mixing memory and desire, stirring dull roots with spring rain.
The Waste Land, TS Eliot
It is the way of larger market influences on juniors that moments in which all ducks are lined up
are few and far between. The near-term influences that push gold higher tend to be of the
2

fear-factor variety and they are the ones that will often drag all equities down, no matter in
which sub-sector or market category they live. In the case of the junior there’s a type of
‘escape velocity’ about its scenario, with juniors in the middle that can be pulled up by gold if
the metal rises fast enough, but pulled down if the market negativity is stronger. Last week saw
an example of the latter, as while gold did ok to finish at U$1.320-or-abouts the headlines
created by the sell-offs in the hottest US market sectors (biotech and silicon valley things, they
tell me) exerted a stronger gravitational pull.
So be it. However we also need to see the forest for the trees so those of us wise or stupid
enough to base investment/trading decisions on fundamental analysis of junior precious metals
companies should welcome the moves of last week, because gold went up. It’s as simple as
that, because $20/oz added to the market price of the-thing-it-sells is $20/oz more in earnings
come the end of Q2. As it happens, right now after freeing up some cash (sold a couple of
losers, sold a larger winner) I’m carefully picking away at new purchases so sector weakness
actually suits my personal circumstances (for a darned change) but both I and all those who
read these words know the other, more frustrating side to the same coin. To repeat (it’s the
only pep talk for 2014 because I have no other), we are at the start of a bull market for mining
stocks, particularly precious metals and specifically preference round here is for the juniors. But
it’s not a straight line up move and it’s impossible to call every bump or pop we’ll get in the
weeks to come, so positioning for greater gains down the line comes with its share of nerve-
jangling market moves. With a couple of exceptions, there are always exceptions, I’m now
looking to this time next year as timeline target now. Patience will be rewarded, that’s the
difference between today and the beginning of the year.
Post scriptum: The above was written Saturday morning and edited slightly before hitting the
sack Saturday night. Come Sunday morning Gary Tanashian’s NFTRH edition 286 arrives and he
has a lot to say about the apparent rollover of the broad markets, about gold, about the miners.
Even by his high standards it’s a great edition this weekend and the main wrap-up bullet point
under the title “Gold Stocks Technical Bottom Line is:
I am so bullish I can taste it, but the time may not yet be right. The big
market pivot will take its time unfolding
Agreed. The difference between Gary’s and my position today is that I’m not going to try and
be cute, flip in and out of too many things and run near-term trades on chart channels. I’m not
staying largely in cash, either. Mine is a different route, I’m buying this choppy looking bottom
and I’m going to make my money by being patient until the chop subsides. That’s basically
because I’m crap at trading, but at least I know myself.Discendo discimus.
PPS: I asked for and received permission from Gary to quote that above by sending in the
proofed text. He replied in the affirmative and said I could quote him with this, too:
It's the most important thing, dude. We each have to be who we are because
we really suck at being someone else! ;-)
Again, agreed. Now on with the show.
Fundamental Analysis of Mining Stocks
This week we run an analysis on Timmins Gold Corp (TMM.to) (TGD):
3

NOBS fundamental report dated April 13th 2014
Timmins Gold Corp. (TMM.to) (TGD)
Company Overview
Timmins Gold Corp. (Canada: TMM.to, USA: TGD, Frankfurt T66.f) is a producing junior gold
mining company operating in Mexico. Its main asset is the San Francisco open pit heap leach
mine in the Northern State of Sonora, Mexico. Current share structure is as follows:
Shares out: 163.379m
Options: 11.375m
Warrants: none
Fully diluted shares: 174.754m
Current share price: U$1.42
Market Cap: U$120.97m
Approx cash per S/O: U$0.14
All prices are in United States dollars unless stated. Forex U$0.90=CAD$1
NB: Please note we use the US listing of TGD as our default preference and all analysis is done
in U.S. Dollars.
Overview
Today’s NOBS report is to fill in the fundamental rationale behind the buy call made via the
Flash update of last week (see appendix 1). As stated in the Flash update on Wednesday
morning that opened this trade even though no mention has been made of TGD over time it is a
stock I’ve had my eye upon. The reason for that is pretty simple, it’s a producing junior gold
miner in Latin America, but to date its lack of coverage on these pages has been due to its
relative underperformance to peers, particularly that of our favoured gold producer Rio Alto
(RIO.to) (RIOM). Although it’s never apples-to-apples if you look closely enough, there are
enough similarities between TGD and RIOM to be able to compare them on a like-for-like basis.
• Both in LatAm
• Both open pit heap/dump leach gold mining operations
• Both simple technology, scoop-and-truck mining
• Both profitable, at least at mine operational level, even at current reduced gold prices
And a few other things, too. However, up to last week TGD hasn’t given me any reason to
prefer it to RIOM and so I kept quiet about the model and coverage right up to the moment it
announced its 1q14 production numbers on Tuesday evening (2). Those numbers changed
things, because once they were plugged in it became pretty obvious that although not quite up
to the standard required of a Top Pick (in my humble opinion), TGD has made significant
progress in its operations and looks good value at current prices. Thus the buy and thus
today’s analysis.
Management and holdings
As mentioned in passing in the Flash update, there are a few things I have as minor black
marks against TGD the company. One is its management roster, which has spent more time
and effort collecting lawyers on its board than it has mining people. There are mining brains on
board such as company president Arturo Bonilla (who has deep background in the North
Mexico mining scene too, with most of his work experience as a mining engineer coming from
4

the Cananea mine. But CEO Bragagnolo, Chair Barry Fraser and a bunch of other officers are
litigation people, not rock-digging people. The second query to throw up here is the lack of
direct skin in the game at TGD, with just 4% of shares held by insiders. There is a lot of paper in
(supposedly) strong hand institutions and we also know that TGD has always played the
Canadian brokerage game to the liking of the brokerages, which means retail has their portion,
the houses have made their profits on financing deals over the years and coverage of the
company tends to be generalized and friendly in nature. Still, the lack of fully paid up shares in
boardroom hands (though they do enjoy awarding themselves options and upper-end cash
salaries) has to be mentioned as a potential question mark.
Company assets
That title may as well have been written in the singular because just about the whole of TGD’s
valuation depends on its single producing asset, San Francisco in Sonora State, Mexico.
San Francisco is the producing part of TMM’s very large (200k hectare) 100% owned land
package in the Sonora region and is two main deposits, named San Fransisco and La
Chicharra. Infrastructure there is generally very good, with main paved roads running within
2km of the mine, ample power supply (via grid electricity) and plenty of qualified labour force on
hand in nearby towns. Water supply is described as ‘adequate’ by the company in its official
literature but it’s understood that a prolonged drought season could easily affect production, so
although the water supply item passes muster it’s not an optimum situation for a heap-leacher
wholly dependent on supply for normal production. Call that one a latent risk.
One strong point at San Francisco/Chicharra is the gold resource situation, as in late 2013 after
an extended drill program the company updated its 43-101 compliant resource data and here’s
how that stands today:
Timmins (TGD) (TMM.to): Resource at San Francisco/La Chicharra
tonnes (m) grade (g/t Au) Au Moz
measured resource 63.778 0.58 1.189
indicated resource 37.94 0.56 0.679
Total M+I 101.718 0.57 1.868
Inferred 122.177 0.45 1.782
using U$1,250/oz gold price
That’s all using a reasonable U$1,250/oz gold price. There is a weak point to the numbers,
which is that TGD uses a very low cut-off for its resource of 0.17 g/t gold for the San Francisco
pit and 0.15 g/t gold for La Chicharra. For sure they’ve done their sums on that but still, a tonne
of rock carrying 0.15 grams of gold and running an approximate 73% recovery rate (TGD
expects to recover 1.16m oz gold from the 1.589m oz in the P+P over LoM) is just U$4.40 of
“rock worth” at U$1,250/oz gold...and that’s cutting things mighty mighty fine.
Speaking of reserves rather than resources, within that total resource figure for the M+I we need
to point out that most of the it is under P+P reserve status and those totals look like this:
Timmins (TGD) (TMM.to): Reserve at San Francisco/La Chicharra
tonnes (m) grade (g/t Au) Au Moz
proven reserve 57.316 0.55 1.013
probable reserve 33.883 0.53 0.576
Total P+P 91.199 0.54 1.589
In other words, of the 1.868m oz under M+I at TGD, 1.589m oz is considered reliable enough to
be considered reserve and that’s a good thing. Overall, TGD has doubled its official mine life to
9.5 years thanks to its exploration program and with nearly 1.8m oz in inferred as well, we can
expect the mine life to extend further even before TGD starts poking around other parts of its
very large 200k hectare land package for more mineralization of worth.
Bottom line: There’s a question mark over the depth of the cut-off at the mine, but that’s more
than outweighed by the recently extended mine life and high probability of more to come at San
5

Francisco/La Chicharra.
Operations
One of the truisms of these large tonnage, low grade open pit heap/dump leachers is that they
can be tricky to get going and operating in their
Timmins Gold TMM.to/TGD: Waste and ore mined,
early stages, but once you have them running
per quarter
they tend to run on rails. That’s one of the 9
things I’ve been looking for from TGD and the 8
latest set of production results point to that now 7
6
happening at the company.
5
4
You see this when looking a little further than 3
the given data. Here right is how the mine’s 2
waste and strip tonnage looks in the last eight 1
0
quarters, and the blue line of the strip ratio chart
(below right) gives you the ratio of those two. It 2q12 3q12 4q12 1q13 2q13 3q13 4q13 1q14
source: company filings
edged up to nearly 3X this time last year, but
now TGD has it clicking at a much more
efficient 2.32X and that’s good for costs.
However, take a closer look at that pink
ratio line, because that one shows the
ratio that really matters for quarterly
production terms. Along with waste, part of
the supposed ore at TGD is low grade
(typically under 0.3 g/t) and is being
stockpiled for future production,
somewhere down the line in the deeper
future (or for aggregate mix). What that
means it that actual processed ore per
quarter is lower than the “mined ore”
number and the good news here is that
the amount of “stockpiled ore” (like me, you can call it waste or semi-waste if you want) has
been declining significantly in recent quarters.
In effect, this ratio gives you the “true strip” at
San Francisco/La Chicharra and today, at
2.6X, its far more efficient than the 3.5X
numbers of a year ago.
This means more ore making it to the pads
and higher quarterly production which you can
witness here (right). That gold sales chart
evolution (up and up) is as obviously good as
they come in this game. TGD is guiding for
between 115k and 125k gold in 2014 and if
the 1q14 rate keeps up, that guidance won’t
just be beaten but blown away (a direct 4X
multiple give you 145k oz Au). As you’ll see in
the projection below, we’re not calling TGD at that level of production in the year to come,
however the combo of a happily running leach mine and the apparently UPOD (under promise/
over deliver) strategy of management means that we are expecting TGD to beat its 2014
guidance fairly handily.
The bottom line to this operations section of the report (necessarily abridged and covering main
points only) is that the mine is running well and it’s that 1q14 production/sales number, along
with the underlying numbers which point to growing efficiency, that has got us long the stock.
For the other side of the coin and to examine just why I think the share price is currently cheap
as well, we need to consider how the financials fit in.
Financials overview and 2014 forecasts
6
kcor
sennot
M
waste mined
ore mined (MMT)
Timmins TGD/TMM.to: Waste/ore strip ratio versus
4.0 "true strip ratio"
3.5
3.0
2.5
2.0
strip ratio
1.5
"true strip ratio"
1.0
0.5
0.0
2q12 3q12 4q12 1q13 2q13 3q13 4q13 1q14
source: company filings
Timmins Gold TMM.to/TGD:Gold sales per quarter
Oz Au
40000
35000
30000
25000
20000
15000
10000
5000
0
1q12 2q12 3q12 4q12 1q13 2q13 3q13 4q13 1q14
source: company filings

This week these tow get melded together because I’m not going to pitch a formal valuation or
price target at you (see conclusion for why that is so) and it makes sense to see how the recent
turnaround in TGD’s financial and operating fortunes works in the same direction.
In 2013, TGD sunk fairly hard because with the drop in gold price at the same time as a period
of relative inefficiency at the mine, it was staring at a bit of a cash crunch. It had an $18m loan
from Sprott & Co which tided it over, but the principle on that was coming due and the pressure
that liability brought to the balance sheet wasn’t lost on the numbercrunchers of this world (your
author included). One of the main reasons TGD is now a buy is that it seems to have got its
balance sheet pressures off its back and has done so due to two factors:
1) A well-timed equity raise earlier this year that added good cash to treasury and allows
the company to pay off the Sprott debt (that had its timeline duly extended in order to
accommodate the strategy, at the expense of 3m shares handed to Sprott (sidebar:
Sprott’s doing very well on that whole deal, kind of get the feeling Rick Rule earned his
pay along the line)
2) The rebound in gold from the lowest lows to today’s price that coincides with better and
more profitable operating results.
So let’s first check balance sheet items via the normal charts (which include projections for
2014) which outline the improvement we’re seeing in the underlying numbers. Then it’ll be the
operating results and projections thereof, which will try to convince you that TGD is in good
shape once again, even if gold rises no further.
Balance sheet: Assets and projections of assets look like this. Today’s chart breaks assets
down a little further than normal, because
there’s a whole chunk of current assets TMM.to/TGD: Assets Breakdown per qtr
350
booked by TGD which goes down as 325
300
inventory. It’s pretty large compared to many 275
other mines of its ilk and smacks of a 250
225
company inflating its balance via too much use 200
of “gold in process”. It’s also a number that’s 175
150
been rising (up $10.8m during 2013) so the 125
100
padding out process may have been used to
75
cover up basic liquidity (it makes the working 50
25
cap number look better than it really is). This is 0
gold that’s going to be turned into sales and
cash so TGD does have the right to stick it on
its assets (I suppose), but it smacks of a bit
fakey, have to say.
Anyway, there are two things to note here, while
keeping an eye on the liabilities chart below as well.
Firstly, the cash injection from the financing that
closed Feb 11th has made a big difference to
treasury. We know that $18m of the $28.4m raised
(net proceeds $26.6m, after the paperpush
middlemen had their pound of flesh) is due to pay
off the Sprott loan and they have until September to
do so. We also know that as at Feb 28th TGD had
paid down $5m of that liability. The IKN guess is
that the rest will be paid by end 2q14 and that’s
reflected in the cash and current liabilities columns
development you see, but of course TGD may do it all with slightly different timing.
The second thing to note is how cash is expected to dip as the loan is paid, but rise again as the
year goes on. That’s simply because TGD is making money at current prices and with no big
capex budgeted for FY14 (company dixit) you’ll have that cash flowing to the bottom line. This
next chart separates the cash & ST line item from the main balance sheet above and shows
how it’s expected to work, with TGD leaving 2014 with around $57m in the bank. That’s just shy
7
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 tse41q1 tse41q2 tse41q3 tse41q4
source: company filings
srallod
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snoillim
Trade/Rec
Inventory
fixed
other current
cash&ST
TMM.to/TGD: Liabilities Breakdown per qtr
120
110
100 90
80
70
60
50
40
30
20
10
0
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 tse41q1 tse41q2 tse41q3 tse41q4
source: company filings, IKN ests
srallod
fo
snoillim
LT debt
current debt

of 35c/share and a healthy level of liquidity (we’ll get to the earnings projections that give us
those figures a little further down).
TMM.to/TGD: Cash and ST
60
50
40
30
20
10
0
8
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 tse41q1 tse41q2 tse41q3 tse41q4
source: company filings, IKN ests for 4q13
Here’s how the share count has been affected by the TMM.to/TGD: Shares Out
200
recent equity raised and the other thing that jumps
180
out at the viewer is how TGD has kept a tight lid on 160
the shares outstanding number over the three 140
120
previous years. Before the 1q14 sales it edged slowly
100
to a tad over 144m on derivative exercises, but that’s
80
all she wrote. Needless to say, we expect the share 60
count to remain the same for the foreseeable future. 40
20
0
We get to working capital, but this time I’ve thrown in
an extra chart to make a point. Here’s how official
working cap for the last two years stands, along with
the projections for 2014 and as you can see, the
cash added from the equity raise makes a heap of
difference in relative terms (along with the expected
profits to come) and this time it’s not so important
whether it’s added to assets or removed from
liabilities, the result is the same.
However, check out the next chart (below right) chart
which somewhat artificially removes the semi-
suspect inventories line item from current assets in
order to give a better idea of the state of true liquidity
at TGD. The “negative working cap” of 2013 in this
chart gives a better understanding of just why TGD
had to roll over their Sprott debt payment and run a
financing on top. However, our prediction for 2014
(and beyond) is of a much healthier cash and liquidity
situation for the company. Bottom line, that raise was
the right thing at the right time.
Summing up balance items, TGD isn’t just in better
shape than in 2013, it’s in much better shape. The
price paid is the extra dilution to the share count, but
from what we can see it’s a price that was well worth
paying under the circumstances. Along with the
catalyst for the purchase on Wednesday morning,
that of a blowout production quarter in 1q14, the
effect of the corporate decisions in the last quarter
have made for a stronger company and that shows via the numbers and the projections. Now
it’s time to lay out the argument for just why we expect TGD to return reasonable profits in 2014,
even at today’s gold price.
P+L considerations: We begin with an overview chart (you’ve seen variations of this one before
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 tse41q1 tse41q2 tse41q3 tse41q4
source: company filings, IKN ests
serahs
fo
snoillim
100 TMM.to/TGD: Working Capital per qtr
90
80
70
60
50
40
30
20
10
0
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 tse41q1 tse41q2 tse41q3 tse41q4
source company filings, IKN ests
srallod
fo
snoillim
50 TMM.to/TGD: Working Capital per qtr
WITHOUT INVENTORY 40
30
20
10
0
-10
-20
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 tse41q1 tse41q2 tse41q3 tse41q4
source company filings, IKN ests
srallod
fo
snoillim

on other companies) that stacks revenues, COGS (which in this case include amorts and
depreciation) and gross profit (aka Mine Operating Income or MOI). Looking backwards for a
moment, we can see how things were going well in 2011 and 2012 with revenue growth
outstripping cost creep and giving better MOI profits. But in 2013 and the gold price collapse
TGD fell off its cliff while COGS kept on rising, which isn’t a good combination.
TMM.to/TGD: Quarterly Earnings overview
50
45
40
35
30
25
20
15
10
5
0
9
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 tse41q1 tse41q2 tse41q3 tse41q4
source: company filings, IKN ests
srallod
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snoillim
revenues
COGS
Gross profit
Along with the above chart and to make viewing a little easier, here are two more charts that
show details from the above. There’s nothing essentially different here, just items separated for
a better view. The one on the left shows revenues isolated and to save a bit of space, here’s the
one on the right that shows costs, along with a breakdown of the whole.
TMM.to/TGD: Revenues
50 45.889 47.25 45 41.74840.596 41.516 41.6 43.2 43.2
40 35.688 38.16 35.123 38.065
35
30
25
20
15
10
5
0
On this costs chart we see two impairments. TGD took a $5.546m impairment on assets in 2q13
and then a smaller, $0.794m impairment on its 4q13 numbers. However and separately (one
that shows on the financials rather than COGS) TGD also decided to take an $8.6m impairment
on its 4q123 numbers due to the new Mexico royalty law that we reported on extensively last
year (the 7.5% royalty on EBIT plus 0.5% extra on precious metals) that came into force on
January 1st 2014. That shows more clearly on
the profits charts below (we’ll get there in a
page or so).
Here’s a final chart (right), that of operating
profits (which is gross profit minus G&A and
impairments). Again see how we’re expecting
a return to profitable form for TGD and a
column that compares to the numbers in 2011
and 2012, rather than the soft results of 2012.
That was then and this is now, so as for 2014
the first thing to note is how 1q14 is expected
to be a record revenue quarter (we find that
out early May). This chart explains just why I expect (nay, I fully expect) that to be the case:
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 tse41q1 tse41q2 tse41q3 tse41q4
U$m TMM.to/TGD: Costs breakdown
36 32
28
24
20
16
12
8
4
0
source: company filings, IKN ests
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 tse41q1 tse41q2 tse41q3 tse41q4
U$m
other impairment
G&A
COGS
source: company data, IKN ests
TMM.to/TGD: operating profit
25
19.166 19.253
20
15.793 16.384 15.750
14.345
15 13.043 11.200
9.63610.44910.334 9.2619.245 9.600 11.200
10
5 3.382
0
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 tse41q1 tse41q2 tse41q3 tse41q4
U$m
source: company filings, IKN ests

Timmins Gold (TMM.to): Revenues per qtr
50
40
30
20
10
0
10
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 tse41q2 tse41q3 tse41q4
U$m
calc on gold $m
Metal revenues $m
source: company filings, IKN ests for FY14
You see two columns; one being “metal revenues” which is exactly that, the revs reported by
TGD in any given quarter. But the second column is a calculation that come from sales X
realized gold price, which is a figure given in its production reports. TMM also produces a little
silver, but if you completely ignore that and just go with the sales of gold multiplied by the
realized price of gold it reports, the difference between the calculation and the eventual reported
revenue figure over the last eight quarters is minutely small. Therefore, by taking the gold sales
number for 1q14 (36,431oz and the realized price (U$1,297/oz) we’re looking at a TGD that will
report revenues of U$47.25m next month.
This next chart lays out how we see production and sales of gold in the quarters ahead, too. It’s
going to be difficult to estimate this
well, but with the increased efficiency
Timmins Gold (TMM.to): Gold sales per quarter
of the leach operation (look back at
40000
that strip ratio and “true strip” ratio
chart for more), then assuming that a) 35000
1q14 wasn’t just good but an outlier 30000
then b) the current official 125k upper 25000
limit guidance for 2014 is pitching 20000
rather too low compared to what
15000
we’ve just seen and what we could
10000
expect, the best guess is that TGD will
5000
average 32,000 oz in the three
quarters to come. That might turn out 0
to be low and the company keeps
belting out wonderful 36 k oz quarters,
or it might turn out too high and 125k
is the limit, but overall that’s where the guess is getting stuck. Along with that, we assume a
selling price of U$1,300/oz in 2q14 (current quarter) and then I allow my modest bullishness to
raise the selling price to U$1,350/oz for the
second half of the year.
Now let’s look at the evolution of profits and 2014
forecasts of the same, starting with this chart
(right). Again we see the decent 2012 returns
and the soft 2013, but this time the impairment
charge on those Mexico taxes/royalties taken in
4q13 sticks out clearly. The result was a $4.684m
net loss for the quarter. But again, consider the
contrast with what we expect from the company
in 1q14 and if our model is right on the button
(which I doubt, but you have to start somewhere)
TGD is capable of returning a 6c net EPS. And I
think we’re going to have a whole bunch of
people going “Hey, 6c in a quarter, that’s 24c in a year, that’s (gets out calculator) oh wow, a 6X
PE ratio!”. And an apparent 6X fwd PE on a mine that churns out regular profits, has a long
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 tse41q2 tse41q3 tse41q4
Oz Au
source: company filings
TMM.to/TGD: Evolution of profits
26
22
18
14
10
6
2
-2
-6
21q2 21q3 21q4 31q1 31q2 31q3 31q4 tse41q1 tse41q2 tse41q3 tse41q4
source: company filings, IKN ests
srallod
fo
snoillim
op profit
pre-tax profit
Net Income

mine life with likely more to come, has turned its balance sheet around nicely and gets decent
bounce form any upside in gold is exactly the type of ratio that gets bought.
Here’s a chart of that PE and further guesstimates, according to the model
TMM.to/TGD: Earning per share, per qtr
0.12
0.10
0.08
0.06
0.04
0.02
0.00
-0.02
-0.04
11
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 tse41q1 tse41q2 tse41q3 tse41q4
U$
source: company filings, IKN ests for FY14
As you can see, my reasonable expectations model (not expecting production to remain at 1q14
levels, not expecting gold to go To Da Moon Alice) indicates that profits down the line in 2014
won’t be as hot. But the reason to have bought last Wednesday, the catalyst if you like, was the
1q numbers. Time will tell how 2014 unfolds.
Conclusion and trade recommendation
One thing you already know is the entry point for the trade, as that was last Wednesday
morning and as it happens I got mine at U$1.40 (I went via the US exchange ticker in the end).
In the Flash update I indicated that the 1q14 numbers were looking strong and that TGD was a
buy because of them. That’s how it is today too and hopefully I’ve expanded enough on that
initial thought in today’s analysis to give you more confidence about the trade.
What I haven’t done in today’s report is to give a valuation section and a formal target price.
That’s because for the time being at least I want to see how TGD reacts and acts to the market
and then to its 1q14 financial results (plus any change in guidance the company cares to offer
us at its CC). There’s also the small matter of the gold bullion market and its fluctuating prices
and who knows where they’ll be come early/mid May and the TGD results.
Even with its longer resource and mine life I consider TGD to be financially inferior to RIO (size
and production/market cap considerations also taken ito account, of course) and that’s why
RIO’s a top pick while this one isn’t, but saying that TGD has obviously turned itself around and
is looking far more attractive in 2014 than it did in 2013. The good news there is that the share
price hasn’t reacted to the change in
circumstance as yet, so even on a stick-finger-
in-air, non-scientific basis there’s decent
reason to believe it can re-take $2 (by the
way, my original thoughts of a quick-ish run to
$2 in last Wednesday’s Flash update were in
Canadian Loonies, so this US Dollar price
chart makes the potential gains from Friday’s
U$1.42 close even more interesting). So,
inferior to RIOM yes, but a decent buy at
today’s levels is also a resounding yes and as
TGD enjoys friendlier coverage in Canada
than RIOM/RIO.to, I think there’s a short-term
gain to be had here.
Therefore, the plan is to hold TGD through to
its 1q14 earnings report and then once the dust settles decide whether to take things further. If
gold plays along with the plan and goes higher there could be a lot more left in this trade and a
longer-term hold would make plenty of sense. But to begin with here, I’m good about getting the
buy right. TGD shows on Tuesday evening that it’s turned a corner production-wise. The other

thing we see is that TGD is a better and fitter looking financial entity in 2014 compared to last
year. That’s a nice combo, this is a buy today.
End of Report
Stocks to Follow
Of our 13 open positions three made gains last week (FCV.v, TGD, GORO short) and one
remained unchanged (SRL.v), which means the other nine lost ground (not listing them all).
Generally speaking the losses weren’t that large, with the worst two seen in the illiquid Lara
Exploration (LRA.v down 12.0%) which does that kind of thing, and Minera IRL (IRL.to down
8.8%) which was coming off last weekend’s rather false painted tape finish anyway.
It wasn’t great, that’s for sure. But it wasn’t so bad either and we’ve seen the type of scene
where stocks take an initial leg down on broad market contraction (ignoring the gold pop)
before, only for the miners to play catch-up to the main underlying metals later on. Overall I’m
not complaining about last week, basically because i was a buyer rather than a seller.
With the addition of Timmins Gold (TGM) last week we now have 13 open positions on our
‘Stocks to Follow’ list, two less than our self-imposed maximum. Four positions are green, nine
are red.
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$2.13 -7.4% best LT value
Minera IRL IRL.to hold C$0.30 22-jul-12 C$0.155 -50.0% top pick called at 24c
Longs
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.88 -23.5% solid biz model, LT hold
Eco Oro Min. EOM.to hold C$0.48 22-sep-13 C$0.34 -29.2% waiting on paramo res.
Dalradian Res DNA.to hold C$0.65 27-oct-13 C$0.80 23.1% Holding on good run
Coro Mining COP.to buy C$0.125 26-jan-14 C$0.10 -20.0% Cu spec play, can add
True Gold TGM.v hold C$0.395 02-feb-14 C$0.38 -3.8% LT hold, takeover play
Santacruz Silver SCZ.v hold C$1.04 26-jan-14 C$0.87 -16.3% added, now full position
Focus Ventures FCV.v str buy C$0.23 01-jul-12 C$0.29 26.1% tgt 50c, added, avged up
Bear Creek Min BCM.v buy C$1.88 23-mar-14 C$1.81 -3.7% trade on silver and pol risk
Timmins Gold TGD buy U$1.40 09-apr-14 U$1.42 1.4% new trade improving fundies
Shorts
Gold Res Corp GORO short U$5.07 26-jan-14 U$4.81 5.1% Re-short now full position
Smaller/Riskier
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.25 -10.7% small risky spec, vg rocks
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
Tahoe Resources TAHO feb'14 U$13.10 08-apr-13 U$21.72 -65.8% short closed due to reality
Darwin Res DAR.v mar'14 C$0.10 14-jul-12 C$0.045 -55.0% tiny risk play dropped
B2Gold BTO.to mar'14 C$3.07 28-nov-12 C$3.35 9.1% closed to free up capital
Pretium Res PVG mar'14 U$5.38 22-nov-13 U$6.50 -20.8% short closed as port longer
2009, 2010, 2011, 2012 and 2013 closed positions in appendices below
12

Now for some notes on a selection of the above stocks.
Timmins Gold (TMM.to) (TGD): Position opened. Lots above on TMM today, here we’ll
just note that the buy happened as stated Wednesday morning and in the end I decided to buy
via the US markets (personally more convenient this time), so the position will be carried via
the TGD ticker and in United States dollars.
It traded well on the news and as expected, we got brokerage love on the numbers with
positive commentary and price upgrades on display. Fair enough.
Focus Ventures (FCV.v): Position added. Tuesday turned out to be a good buying day, so I
got what I wanted in FCV. As a result the cost average on the above table has popped to 23c.
More news from the company and it’s good news, too. With the Friday close of 29c now in, that
means FCV has indeed traded above the key 25c level for 10 consecutive days and that means
the company will be able to call in all warrants that stand at 25c. That’s about $3m in treasury
assuming they’re all exercised correctly (no reason why the vast majority won’t be) and that’s a
big boost for the company. With this cash it doesn’t need to raise cash via a placement again
this year. It will still need to raise for the $3m main payment on Bayovar 12 come 1q15 but
assuming the project’s in good shape by then, that’s unlikely to be a problem. As of Friday
afternoon there was no strategic decision made by FCV to make the announcement and force
exercise of the warrants so timing is unknown, but I’d personally be surprised if they hung
around and waited, as there’s a decent potential fillip for the company here. With this warrant
exercise, a big overhang has been taken from the stock and assuming the drill results and
eventual resource number come in as planned, there’s now less to stop it from floating higher.
Regarding drill results, two things to mention:
The tail end of the current drill campaign is now being logged by FCV geols, with the necessary
QA/QC compliant samples being sent off to the labs in stages. Once again, the eastern end of
the grid sees mineralization showing up at the expected shallower depths, it’s all been spookily
predictable. No assay results yet, but logging shows that its 100% hit rate has been
maintained.
Regarding assay results, first samples are now being processed in the labs and the first results
may be with the as soon as this week coming (though obviously there’s zero guarantee on that
as the assay process is third party). FCV may wait until it has a meaningful package of drill hole
results to present to the market before publishing (i.e. with continuity over distance), so from
what I’ve gathered plus sticking a finger in the air, best guess is that we’ll have market
published news before the end of this month. Exactly when, no idea.
Eco Oro Minerals (EOM.to): A Friday evening NR (3), but not an “uh oh” moment this time
as it announced the re-appointment of as CFO (he was there for a while in 2011 and 2012 too).
But in other areas EOM has me rather perplexed, because from what I can see (maps,
Colombia enviro declarations) there might not be enough to have an exact, to-the-square-metre
idea of the infamous páramo boundary location but there is more than enough to make a clear
statement on what EOM can and cannot do at Angostura. The parcel of concession left outside
the boundary coincidences with the plan and the general layout of an underground project,
while as expected the big open pit project isn’t going to happen. It’s therefore a mystery, to me
and my limited insight at least, as to why EOM hasn’t taken a more proactive stance to this
point. Maybe it’s politics and there’s a more subtle game going on. Maybe EOM is only
interested in the potential to litigate against Colombia and get a cash settlement on now
prohibited concession space. Maybe it’s all connected to a financing package for the Angostura
U/G project and the silence is necessary until the deals are closed. I don’t know, but the drift on
low volume suggests the question marks aren’t just mine and we’re not likely to see buyers step
up until (or just before, cynical me) EOM’s NYC-based suits make a move. I’ll hold through for
the time being but that’s all this stock can be until further notice, a hold.
13

Coro Mining (COP.to): Close to zero interest around COP.to last week and no news either,
but it gets a line or two this weekend because Benton Capital (BTC.v), the company that owns
around 41% of COP, called a trading halt pending news on Thursday morning pre-bell and
(along with IIROC) kept it there all through Thursday and Friday but without announcing the
promised news. So there’s a question mark floating over BTC and therefore at least part of the
corporate structure of COP this weekend. I’ll be keeping an eye on proceedings there, because
we’re bound to have some sort of resolution soon.
Rio Alto Mining (RIO.to): Last week’s piece called the 1q14 production guess at 53,000 oz,
so the news Monday (4) that RIO had
produced 53,463 oz in the period fits
right in with that. The only slight
surprise in the numbers came from
the extra amount of rock shifted in the
quarter and the slightly lower average
grade at 0.52 g/t gold, but we also
note that grade dropped in 1q13
compared to other times and that may
be another factor connected with the
higher strip rate. On that subject, as
fully expected the waste/ore strip rate
saw a pop (this is a one-quarter thing
and scheduled into the mine plan) to
1.69X, so as that drops to under 1.0X in the quarters ahead cash costs will drop. Even so, we’re
expecting a decent showing from RIO.to profit-
wise in 1q14 and we’ll get those results pre-open
on May 9th.
One thing to say about something that wasn’t
seen in last week’s NR, rather than something that
was. RIO has been in the habit of stating
production and sales in these NRs, but Monday’s
only talked of production. That might mean the
company has taken a slug of 1q14 gold to pay
down its forward gold obligation a little earlier, but
then again I may be reading too much into the
lack of two simple words in a NR. For what it’s worth, at our best guess of U$1,270/oz average
sales, 53,463oz would mean U$67.9m in revenues so any number much less than that would
mean extra slices were taken from the short-term liabilities. Probably mere details and we’ll
know more on May 9th.
RIO.to: Quarterly Revenues
100
90
80
70
60
50
40
30
20
10
0
14
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 tse41q1
RIO.to: Gold production and forecasts
80000
70551
70000
60000 55973 58081 56511 59157 53463 55000 55000 55000
48467
50000
40000 36355
30548
30000
20000
10000
0
$m
source: company filings IKN ests for FY14
Gold Resource Corp (GORO): Comparing GORO against the junior ETF (GDXJ) suggests that
our preferred short didn’t do all that worse compared to its peers (the tape-painting at the close
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 tse41q2 tse41q3 tse41q4
Oz Au
source: company filings, IKN ests
g/t Au RIO.to: Average gold grade on pad
2.0
1.5 1.37
1.09
1.0
0.59 0.63 0.51 0.65 0.58 0.59 0.52
0.5
0.0
1q12 2q12 3q12 4q12 1q13 2q13 3q13 4q13 1q14
soure: company filings

on Friday did help its cosmetic cause a little) so overall all we got from being short the company
was a bit of hedging to offset the drops on the long side.
Santacruz Silver (SCZ.v): The NR from SCZ last week didn’t do much to reverse the stock’s
recent weak form, but the message it delivered between the lines isn’t the interpretation
equivalent of rocket science. The announcement on Thursday (5) that Federico Villaseñor was
joining the company as a director first outlined his long service in Mexico mining and some of
his deep contacts in the country sector, then went on to state:
In his most recent role Mr. Villaseñor served as Business Development Director for
Goldcorp México. During this time, he was closely involved in several M&A
transactions including the acquisition of the Tayoltita mine by Primero Mining Corp.,
which is situated in close proximity to the Company's Gavilanes property in San Dimas,
Durango, Mexico.
In other words, SCZ wants to position itself as an M&A target, which comes as no surprise to
your author because that’s the bottom line reason why I own the thing today.
As for trading, it followed silver the metal and silver the subsector fairly faithfully. Not many
people stepping up and buying, volumes weak, a drift lower. A braver man than I would buy a
few of these and add to silver leverage, but I’m going to stick with my general preference to
gold exposure, time being at least. Happy enough to hold this relatively small position.
Bear Creek Mining (BCM.v): A lot of the above in the SCZ section applies here too, as BCM
slide slowly on low volumes along with the rest of the silvers. We did get news from BCM last
Tuesday morning (6) which gave an overview of progress (call it that) on the company’s minor
(call them that) projects in Peru (i.e. not Corani, not Santa Ana). Of the four company projects
mentioned, the Maria José project in Ancash (Northern end of Peru) is the most interesting,
even though its still at an early stage of development. Trenching has hit decent gold samples
and the plan is to permit an access tunnel and eventually stick a few drill holes into the rocks
there, at which time we’ll know more. The other three projects look unlikely to move the
company dial. Overall an OK news release, but not the type that moves share prices in this
market.
Dalradian Resources (DNA.to): DNA continues to trade well versus peers and as Friday’s
action showed, any weakness gets bought (though admittedly volumes aren’t that great).
Having “bought well” at a value price, this slice of the portfolio is becoming very easy to hold
which means I need to consider an addition...can’t have my life that easy.
15

Salazar Resources (SRL.v): Our riskiest position (and your author’s tiniest dollar exposure to
any of the above stocks) had significant corporate news last week that went basically ignored
by the market. On Wednesday evening (7) (and repeated Thursday morning to make sure we
saw it) SRL announced that its partner Urion (subsidiary of Trafigura) would not be taking up its
option to move forward further with SRL and that other negotiations between Urion, SRL and a
third party were rejected by SRL as being too dilutive.
This leaves SRL in flux as to where it can raise the capital to move El Domo forward
meaningfully (recall it’s currently running a small financing, but that’s enough to cover its
corporate obligations for a while and keep ticking over, not enough to build a mine) and it says
it’s in negotiations with other entities, but no guarantees of success can be made there (this is,
after all, Ecuador). The positive is that with Urion leaving it would be easier for another
interested party to move in and go JV, so I suppose it all depends now on Freddy Salazar’s
dealmaking prowess. This is a tiny position (as mentioned to a mailpal over this weekend, it’s
literally a few hundred dollars) and its’ never going to be one that breaks me out in a sweat.
That alone makes it easy enough to hold while it goes through a low volume period and
structural uncertainty, let’s see what happens at the other end.
Minera IRL (IRL.to): As we wait for solid news on the Ollachea financing package the share
price drifts, but the real drifting was last week and the 8..8% loss we see here is more about
IRL compared to a false finish of last
weekend. In fact IRL found buyers last week,
which isn’t a bad thing. I wait on real news
and until then, the chances of this thing
continuing to drift, penny here penny there,
are high.
Yes, I’d like to be more enthusiastic about a
nominal top Pick stock at the moment, but
until solid fundies are at hand I can’t do that.
The best call I have for you is “hold” and if
you want to trade into something cheap in the
near term, look elsewhere (perhaps DNA.to,
TMM.to, definitely RIO.to at these price levels,
others too). I see no reason to sell any of my large and underwater position in IRL today, while
there’s no need or will to buy and average down any further at this time, either.
16

The Copper Basket
After fifteen weeks of 2014 The Copper Basket is showing a 12.38% gain to level stakes.
company ticker price 1/1/14 Shares out Market Cap current pps gain/loss%
1 Augusta Res AZC.to 1.51 144.41 499.66 3.46 129.1%
2 NGEx Resources NGQ.to 1.43 168.71 322.24 1.91 33.6%
3 Reservoir Min. RMC.v 4.97 47.5 306.85 6.46 30.0%
4 Lumina Copper LCC.v 6.29 44.07 220.35 5.00 -20.5%
5 Nevada Copper NCU.to 1.35 80.5 149.73 1.86 37.8%
6 Hot Chili Ltd HCH.ax 0.425 333.11 103.26 0.31 -27.1%
7 Copper Fox CUU.v 0.375 402.96 96.71 0.24 -36.0%
8 Western Copper WRN.to 0.76 93.68 94.62 1.01 32.9%
9 NovaCopper NCQ.to 1.60 53.4 75.83 1.42 -11.3%
10 Curis Resources CUV.to 0.57 74.79 62.08 0.83 45.6%
11 Panoro Minerals PML.v 0.35 204.71 61.41 0.30 -14.3%
12 AQM Copper AQM.v 0.11 139.05 16.69 0.12 9.1%
13 Coro Mining COP.to 0.10 159.37 15.94 0.10 0.0%
14 Cordoba Min. CDB.v 0.45 31.88 14.98 0.47 4.4%
15 Oracle Mining OMN.to 0.27 49.03 9.56 0.195 -27.8%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg 12.38%
The overall basket went down 1.33% and the trend of gentle losses since PDAC continues. Of
our chosen 15, just three made gains (NGQ.to,
NCU.to, AQM.v) but as two of those three were The Copper basket 2014, weekly evolution
25%
pretty hefty in percentage terms (AQM.v up
14.3% and NGQ up 9.8%), they limited the 20%
damage from other losers. There were ten that
15%
dropped in total (LCC.v, RMC.v, CUU.v,
HCH.ax, NCQ.to, WRN.to, CUV.to, COP.to, 10%
CDB.v, OMN.to), with biggest losses taken by
5%
Cordoba (CDB.v down 11.3%), Hot Chili
(HCH.ax down 10.1%) and Copper Fox (CUU.v 0%
down 9.4%).
Over at the copper market, the story was of
prices that clicked up a couple of cents at the
start of the week and stayed there (with minor
fluctuations along the way). Not a week from
which to draw conclusions of near-term price
direction.
Meanwhile the bullish signal we picked up from
Shanghai inventories a couple of weeks ago and
then confirmed last week waved its flag so
clearly again last week that even the biz media
picked up on the story. This week world total
inventory levels dropped chunkily again, last
week by 31,610 metric tonnes (mt) (-7.0%) to
finish the week at 419,144 Comex inventories
dropped sharply in percentage terms (the real
influence is limited), down 1,861mt (10.2%) to
16,373mt. LME warehouses were unchanged on
the week at 260,100mt (and its molasses like
New Orleans warehouses account for 169,000mt
of that), which means the big tonnage loss was
17
ht5naj ht21 ht91 ht62 dn2bef ht9 ht61 dr32 dn2ram ht9 ht61 dr32 ht03 ht6rpa ht31
source: IKN calcs

again due to movements out of Shanghai. That exchange lost 29,699mt, (a massive -17.2%
move) to finish the week at 142,671mt. Here’s how that weekly chart of Shanghai copper
inventory numbers now looks, a impressive pop and drop in such a short time.
Shanghai Futures Exchange Warehouse Stocks, 2014
220000
200000
180000
160000
140000
120000
100000
18
ts13ceD ht5naj ht21 ht91 ht62 dn2bef ht9 ht61 dr32 dn2ram ht9 ht61 dr32 ht03 ht6rpa ht31rpa
Mt Cu
source: Cochilco
I’ve seen more and more commentary going round about the way in which warehouses outside
the three systems tallied above, sometimes bonded warehouses run by private concerns,
sometimes unbonded (basically unofficial) storage depots for large quantities of metal that
might (repeat might) skew out the market if it were to be dumped back in or offers to end
users that normally use official channels. To be honest, I’m not that concerned about non-
exchange warehouses, bonded or unbonded or otherwise. In the end, the copper (or and of the
other exchange metals that run through these systems) that gets placed into and out of these
Shanghai, LME and Comex warehouses are a very small part of the whole annual market for the
metal (which stands at slightly over 20 million tonnes used per year). We should expect the
majority, or even a sizable minority of that metal to pass through our system because it never
will; it’s bought and sold in a direct manner between miner and smelter, or smelter and factory
owner (or even miner directly to end user thanks to SX-EW these days). What we require from
the markets is not volume, it’s the act of price discovery and that can efficiently be produced
from a small sample, as long as the market places confidence in the trade exchanges and
recognizes the microcosm as a faithful reflection of the larger whole. That’s been the dilemma
at the LME in the last couple of years as the big financial and metal players (GS, JPM, Trafi,
Glencore, others) have skewed warehouse data as they seek to maximize their own profits.
For an extended period, there’s been a strong sense of false around warehouse data. The de-
stocking move we’re witnessing in Shanghai may be another chapter in that, but considering
that Shanghai’s exchange has eyes on taking over LME’s mantle as the place where true price
discovery happens, the chances are that the sudden demand for copper there is a better
reflection of what’s going on. All the above was another long-winded way of saying “bullish
signal in copper inventory continues” and that’s the only takeaway needed from all that.
As a small extra before moving on (doubt this will be a regular thing), here’s how the five
copper names mentioned as possible vehicles for a bullish run in copper got on last week:
• First Quantum (FM.to) up 2.4% and delivered its small (0.93c) cash dividend on
Thursday
• Hudbay (HBM): Up 2%
• Southern Copper (SCCO) down 0.3%
• Freeport (FCX): Down 1.3%
• Capstone (CS.to): Down 1.7%
So not bad on a down week for stocks, thanks to the mild positive price action in copper I’d
expect. However, the repeat message is that these are more likely to make meaningful moves
when copper moves back above $3.20/lb. I think that’s pretty likely in the weeks ahead (though
don’t ask me which exact day).

Now for updates on a few of our component stocks:
NGEx Resources (NGQ.to): After sleeping on it a few minutes, the market liked the NR that
hit Thursday at the opening bell (8) which
returned a headline 22m of 5.8% copper from its
Filo de Sol drilling (that’s one of the two main
targets of the extended Vicuña project that are on
the Argentine side of the border), as long as other
numbers that were wholly positive. Com Friday the
stock made and stayed at ther $1.90 level, with
decent-not-amazing volumes on both Thursday
and Friday which gave it a 10% win on the week.
Sadly, it’s in Argentina.
Reservoir Minerals (RMC.v): It’s a market that has even its darling stocks such as RMC
showing a bout of extended profit-taking. After peaking at $7.50 just after PDAC we’re now
down to $6.50 or so, which probably wasn’t helped by the first showing of insider selling in the
stock for quite some time.
During the month of April 2014 (9), insiders Miles Thompson (-150,000 shares), Michael Winn
(-50,000 shares) David Miles (-6,400 shares,
but exercised 20,000 shares so probably
selling the minor part to cover expenses only)
and Miljana Vidovic (-250,000 shares) have all
filed sales on SEDI, at-or-about the current
market price. Now I’m the first to admit that
pointing the finger here and screaming sellout
is way too harsh. I’m also clear that the sales
are minor compared to officer’s total holdings
and that it’s wise to liquidate a part and
provide a bit of financial security in one’s life.
On all that I have no problem, but it’s still a
fact that we’ve seen insider selling in RMC
these last few days and that the stock is off its
highs at the same time.
Curis Resources (CUV.to): Down just 2c on the week, CUV wasn’t much affected by the
announcement Monday (10) of the loss of its President/CEO, Michael McPhee. According to the
letter McPhie sent to members of the CUV team, he steps down on April 23rd and is going to
head up two new sub-divisions at privately held mining and mine services company, JDS Energy
& Mining (11). Once there, McPhie will be leading “...two new companies that are part of the
group – JDS Copper Ltd. and JDS Gold Ltd” and according to the information imparted by
McPhie, the objective in his new role will be “to acquire, develop and operate high value near
term copper and gold properties” which is interesting and one to keep an eye on in the future,
but not part of the brief here.
CUV continues do drift up and down on low volumes (last time it broke 100k shares in a day
was Feb 27th), reflecting the uncertainty around its permitting schedule. The supposed March
court case timing came and went without any sort of resolution. Those of you interested in this
as a potential trade (and I’m one of them, though with just half an eye) could either look to
pick up shares on any non-news related downspike, though I still think the best way is to wait
and then eventually buy if CUV gets its green lights from town and community. The price would
be immediately higher on such news, but if this thing is as prospective as the economic models
19

makes it out to be, there will be a lot of upside (and at considerably less risk) for those who
wait to buy. On the other hand, if you’re in now and get the wrong result from its ongoing
battle with the dignitaries of the town of Florence there’s a long drop in store.
The Low Cost Producer Basket
After 15 weeks, the Low Cost Producer Basket is showing a 9.56% 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 33.86 32.56 -13.7%
2 Goldcorp GG 21.67 812 19.56 24.09 11.2%
3 Barrick ABX 17.63 1000 18.62 18.62 5.6%
4 Newmont NEM 23.03 497.87 12.06 24.23 5.2%
5 Silver Wheaton SLW 20.19 357.39 7.96 22.27 10.3%
6 Franco Nevada FNV 40.74 147.01 6.81 46.34 13.7%
7 Agnico Eagle AEM 26.38 173.43 5.38 31.00 17.5%
8 Pan American PAAS 11.70 151.41 1.98 13.10 12.0%
9 B2Gold BTG 2.02 651.4 1.79 2.75 36.1%
10 First Majestic AG 9.80 117.02 1.12 9.57 -2.3%
all prices in U$, using NYSE ticker prices Portfolio avg 9.56%
They don’t always break in the same way, as last week three went up (ABX, NEM, AEM) and
seven went down (FCX, GG, SLW,
The Low Cost Producer Basket: Weekly performance and
FNV, PAAS, BTG, AG) though no
comparative to GDX control
move was big enough to merit 35%
special attention or stick out of 30%
the pack. 25%
20%
15%
Goldcorp (GG): As expected GG
10%
upped its bid (12) for Osisko
5%
(OSK.to) to a nominal CAD$7.65
0%
in cash and shares (0.17 shares of
GG, CAD$2.92 in cash) which
values OSK at CAD$3.6Bn and
although the PPS got hit on the
news, it’s wasn’t by so very much (-3.25% on
the week was the worst of our basket
components, but hardly a massive outlier) and
the company is still trading about $1.80 higher
than where it was on the day of the original bid.
With OSK.to now trading at CAD$7.54, the
market is saying “that’s all folks” so unless a
second White Knight charge (YMI?) can be
mustered, this is the bid that wins.
First Majestic (AG) (FR.to): The weakness continues and First Majestic (FR) is now one of
just two list names negative for the year. One of the few concrete conclusions from our 2014
experiment so far is that silver producers are getting handily outperformed by gold producers,
with the poster child right here. As an unfair example, there was a $170m difference in the
20
ts13ceD ht5naj ht21 ht91 ht62 dn2bef ht9 ht61 dr32 dn2ram ht9 ht61 dr32 ht03 ht6rpa ht31
basket
gdx control
source: Yahoo! Finance, IKN calcs

market caps of FR and B2Gold (BTG) at the start of the year, now that’s $670m.
As for company news, we had the 1q14 production figures from AG (13) and they were pretty
good, even though the market went “meh” and finished flat on that day. As the week wore on
FR popped and then dropped with the rest of the sector, so overall we can say FR came in as
people expected. One thing that caught my eye however was the way in which FR, once so
proud to proclaim its (relative) silver production purity, isn’t so averse about giving out its
headlines in “silver equivalent” these days, doubtless because of the increase in lead and zinc
credits at its La Parrilla and Del Toro mines. Here’s a quick chart that shows the change in the
FR metals mix over time, which shows that although there has been some minor growth in pure
silver production (e.g. 2q13 to 1q14 = +127,500 oz Ag), the bulk of revenues growth has come
from the larger contribution from by-product metals (mainly lead, some zinc, some gold).
First Majestic: Production metals mix, per quarter
4
3.5
3
2.5
2
1.5
1
0.5
0
21
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1
Moz Ag(Eq)
Other AgEq
Ag
source: comapny filings
This next small chart probably shows the change more clearly (NB: watch out for the cut-down
Y-axis, done to show the change more clearly. Back in
2011 silver provided around 95% of revenues, we’re First Majestic: Total % of metals
now down to around 80% (just under for 1q14). 100 revenues from silver
95
For sure this is part of the burden silver miners bear, 90
we see even less cash coming from silver in other 85
nominally silver mining companies (Fortuna Silver and 80
its big gold kicker form San José and Zn/PB kickers 75
from Caylloma is a classic example). But what it does 70
say to us is that FR isn’t so worried about keeping
things as pure as the proverbial driven snow any
longer. And yes, that means my thoughts are once
again drifting over to Santacruz Silver.
Regional politics
Argentina: The mining nationalization debate reappears
This link (14) goes to an interview done by the well-established and nationally influential
Argentine economics body IADE (Instituto Argentino para el Desarrollo Económico, or in English
the Argentine Institute for Economic Development). In it, one Nicolás Gutman, Political Scientist
at the University of Buenos Aires (UBA, arguably the country’s premier university) talks about
his position on the mining industry in Argentina having published an academic book on the
subject in December 2013. This is no ordinary interview and I seriously propose that all those of
you versed an Spanish and interested in the Argentina mining scene read it carefully. That’s
because it has all the hallmarks of academia on which this current government may act and if it
does, it would mean a leftwards shift in the sector and at least one clear step towards the
introduction of a State mining company and even partial nationalization (yes, it’s the really
nasty N word that nobody in mining ever wants to read, people) of the mining sector in the
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1
source: company filings

country. I’ll leave it to you to figure out what that would do to country risk for exposed
companies. It’s a long note and not getting a full translation here, but here’s the final question
and answer which gives a decent flavour of the whole argument:
IADE: What policies could be implemented in order to regulate the
sector, with a view to the future?
Nicolás Gutman: Argentina must take advantage of its natural resources.
It’s stupid, even more so considering that we have plenty of specialists, that
due to our laws such as article 9 of the Mining Code prohibits the State from
exploiting mineral resources we cannot take charge as take advantage of
these resources, which are also non-renewable, and we offer them up on a
platter to foreign companies. How is it possible that we can’t put together a
State run company that will run this activity? If someone has a mine and
100% of its profit goes to the owner, the fiscal charge is around 3%, to which
we must add that this percentage is based on the sworn testament of the
very same company in respect to what it extracts. Therefore, with the
creation of a State mining company social conflict is avoided (such as) the
problems with many communities who will have to live with abandoned
mines, each with their own embassy behind lobbying for them, all that is
avoided. What’s more the way is shown for development of a new industrial
sector. In a progressive country, I can’t understand why we don’t do this. If
we don’t have all the capacity or training for an activity, it can be done via
joint venture with Brazilians, Chileans or Mexicans. Today, Argentina has
many political allies in the region who know a great deal about mining.
IKN257 back and before you jump down my throat about that 3% figure mentioned, during the
extended Q&A Gútman puts forward his argument about the (lack of) corporate and income
taxes mining companies eventually pay, pointing to the other big tax breaks companies get
which offset corporate taxes (tax free imports of capital goods, tax breaks for capex, remittance
loopholes, other) and as the guy happens to be an economist, it’s a little more difficult to blow
him off in one breath on numerical matters than it is your actual Greenpeacer. So take it up
with him, not me (preferably after you read the whole article.
I get a bad feeling about all this, as it’s just the type of measure the “new CFK” team could go
for to the detriment of the old school mining people (Mining Minister Mayoral, for example).
Gútman has the right academic background and far from being Ivory Tower academia, it’s the
type of measure that could quickly be adopted if the higher echelons of the CFK admin see
political or economic advantage. Not only that, but it’s no secret that new(ish) Argentina FinMin
Axel Kicillof is an admirer of the way in which Bolivia has turned around its macroeconomic
situation and this measure would fit right into that playbook. These things never happen in one
fell swoop and won’t be from one day to the next, so it’s a question of watching out for signs.
The most obvious one would be a proposal or parliamentary commission set up in order to
“review” or “revise aspects of” the current Mining Code (Codigo Minero, enacted in 1994 and
now a little old in the tooth). But watch out folks, this one could flare up and if it does any
mining company with Argentina exposure will get hit and i’m not just talking about the small
junior-sized things that we usually care about; Yamana, Silver Standard, Goldcorp, Barrick, Pan
American and more, all those bigger names have significant asset value sunk into Argentina.
Chile: An opinion poll favours extra taxes for mining companies (again)
One opinion poll that got significant traction in trade and business media last week was the
results of an opinion poll run by respected pollster MORI in Chile which said (15) that 74% of
the population thinks the country’s mining sector should be taxed more. It may have got
traction because the big CESCO copper (mainly) conference was in town, but it probably got
more because of the very recent change in government administration from the rightist Piñera
to the centre-left Michelle Bachelet (though once again I add the caveat; Chile’s idea of left
wing isn’t the same as the rest of Latin America and for most independent watchers Bachelet is
a centrist, or even centre-right with a smattering of populism here and there to cover the reality
22

and keep her alliance party lefties in line).
In fact, if you dig a little deeper on the opinion poll question you find the same MORI people
asked it in 2010 and last year, with these as the responses:
MORI Opinion poll question:
"Should mining companies in Chile pay more or less taxes?"
(¿deben pagar más o menos impuestos las empreas mineras en Chile?)
100%
90%
80% 73% 74%
70% 60%
60%
50%
40%
30%
20%
10%
0%
2010 2013 2014
source: MORI, Chile media reports
So the “more taxes for miners” idea was every bit as popular last year as this, but the media
have latched onto it presumably because they think it more possible that Bachelet does just
that and makes some kind of extra (modest or otherwise) levy on the sector. The last time the
sector saw extra burden in chile was in 2011, when the Piñera government levied an extra
temporary tax on miners to help pay for the Bio Bio earthquake repairs. One thing’s for sure,
politicians in power rarely need a second invitation to raise a tax if it apparently goes down well
with voters.
Peru: FinMin Castilla talks mining macro
Yesterday Saturday morning saw Peru’s Minister of Finance (and these days most powerful
political figure in the country after the Presidential couple), Luis Castilla, in an extended
interview on the nation’s biggest news radio, RPP. It was required listening for a LatAm
newsjunkie such as I stuff (it drew me away from writing the weekly for a while) and as
regards mining, his comments were interesting enough to demand a separate written report
later on the RPP website (16). It’s of the macro general variety so don’t expect market-moving
comments but it shows how the administration now sees this most important of sectors for
Peru, so here’s a translation of the RPP report:
Minister of the Economy and Finances: Low Energy and Labour Costs
Make Peru Competitive
The low costs of energy and labour in Peru will allow us to continue being a
competitive country in the mining sector, which will mean that investment will
continue to arrive, according to the Minister of Economy and Finances, Luis
Miguel Castilla.
“The world of mining has changed, as costs has increased and [metals] prices
have fallen, which is why the multinational companies discard countries with
high costs before finally deciding where to invest”, he said during the
‘Saturday Focus in RPP News’ program.
He said that the effect of China [‘s economy] forces the changes in a series of
policies to make investments of all types easier, clearing bottlenecks and
making the country friendlier towards the arrival of foreign capital.
“The government has been making effort and progress in this. It’s a central
(policy) theme, more micro than macro subjects are now on the agenda”, he
added.
23

He also highlighted that the manufacturing sector is recovering, as even
though we are going through a period of global economic uncertainty we are
now coming out of the adverse cycle that has affected the industrial sector
and the country.
Market Watching
Not so much in ‘Market Watching’ this week, I found it difficult to find stories and themes of
interest, frankly. Sometimes it’s like that.
Sandstorm (SAND) (SSL.to): The Brazil law bill to strip Colossus of its Serra Pelada
concession passes its first committee
Aside from the fun we reported last week about Sandstorm’s (SAND) (SSL.to) chief Nolan
Watson taking over the negotiations between his the Coomigasp co-operative miners and
Colossus Minerals (ex-CSI) now that SAND is majority shareholder in Colossus (and by inference
up to its neck in this project), more news came from Brazil about Serra Pelada, but this one I
kept for the Weekly today.
From Brazil’s national congress came news (17) that the law bill that seeks to strip Colossus of
its concession rights at Serra Pelada has passed its first committee, the Mining and Energy
parliamentary group. It now goes to a second hearing, that of the Constitution and Justice
committee, and the parliament members sponsoring the law bill are confident it will move
through the necessary committee hearings and make it to debate in the full chamber. If so, and
if Brazil’s lawmakers vote the bill up, SAND may have all negotiations made a whole lot easier
because they’ll lose everything there. I highly doubt that the market has factored in the effect
of a total loss of Serra Pelada to SAND, because one thing is the taking away of the asset, but
another and potentially larger thing is the generalized egg-on-face and resulting doubts about
the company’s strategic plan that would result form it. I’m not a buyer of SAND.
Van Eck buying silver miners
Filings from Van Eck Associates Corp (i.e. not any direct ETF related buying, but rather held
funds (for the time being at least)) on Friday evening show the firm taking larger positions in
three US quoted silver mining companies in the first quarter of 2014.
• Re Silver Standard (SSRI) (SSO.to), on December 31st 2013 the firm held 5,536,841
shares representing 6.86% of shares outstanding. However on Friday, it revealed its
end 1q14 (March 31st) position as 12,328,157 shares, representing 15.27% of shares
out.
• Re Great Panther Silver (GPL) (GPR.to), ), on December 31st 2013 the firm held
10,026,870 shares representing 7.25% of shares outstanding. However on Friday, it
revealed its end 1q14 position as 13,936,588 shares, representing 10.06% of shares
out.
• Re Endeavour Silver (EXK) (EDR.to) on December 31st 2013 the firm held 7,771,218
shares representing 7.79% of shares outstanding. However on Friday, it revealed its
end 1q14 position as 10,113,482 shares, representing 10.14% of shares out (though
admittedly this one was a re-file, as the shares were disclosed in a February 14th filing
which must have been triggered by passing the 10% barrier).
So now you know.
Conclusion
24

IKN257 is done, we end with bullet points:
• The process of carefully and steadily going longer on equities and slowly draining the
cash position continued last week, with the addition of Timmins Gold (TGD) (TMM.to)
to the portfolio. I’m not in an absolute hurry to be as absolutely long as possible this
market, but I do recognize I’m longer than at any time since gold dropped off its cliff in
early 2013.
• As for TGD specifically, the real sensation here is that buying now is buying this equity
well. We’re in the lap of the gold price Gods as always, but that aside this one looks
great value at current levels and on its earnings potential.
• RIO’s numbers came in just fine and it saw selling as its reward. Ho hum, what can I
tell you that you haven’t heard before? The thing here is the financials and I’d expect it
to outperform again, but once people catch on that it’s becoming a cash collection
machine, these low prices will dissolve. There, that bullish enough?
• Focus Ventures (FCV.v) is giving me the warm and fuzzies now, really looking forward
to seeing its first assay number and they might be as soon as this week. Meanwhile, my
main portfolio concern is still Minera IRL and that’s likely to remain so until it closes the
Ollachea financing deal.
• Keep an eye on that Argentina nationalization thing, telling you now. It’s not for
tomorrow or next week, but any rumblings about ‘Mining Code reform’ as 2014 moves
on will be about one thing and one thing only.
• I will continue to muse in the week to come on whether I want more copper exposure
in the portfolio. I honestly can’t decide yet, but it’s on my mind that’s for sure.
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
25

Footnotes, appendices, references, disclaimer
(1) http://www.bbc.com/news/world-europe-27011605#TWEET1099626
(2) http://finance.yahoo.com/news/timmins-gold-reports-record-production-225340583.html
(3) http://finance.yahoo.com/news/eco-oro-minerals-announces-appointment-215000055.html
(4) http://finance.yahoo.com/news/rio-alto-produces-53-463-123000544.html
(5) http://finance.yahoo.com/news/santacruz-silver-announces-appointment-director-133314219.html
(6) http://finance.yahoo.com/news/bear-creek-provides-exploration-programs-123000425.html
(7) http://finance.yahoo.com/news/salazar-provides-el-domo-development-220024529.html
(8) http://finance.yahoo.com/news/ngex-drills-5-80-copper-123000065.html
(9) http://www.canadianinsider.com/node/7?menu_tickersearch=RMC+%7C+Reservoir+Minerals
(10) http://finance.yahoo.com/news/curis-announces-changes-management-team-201500758.html
(11) http://www.jdsmining.ca/en/home/
(12) http://finance.yahoo.com/news/goldcorp-increases-offer-osisko-c-110600199.html
(13) http://finance.yahoo.com/news/first-majestics-q1-production-reaches-110000426.html
(14) http://www.iade.org.ar/uploads/c87bbfe5-3129-f94a.pdf
(15) http://www.lanacion.cl/noticias/economia/mineria/74-de-chilenos-quiere-que-la-mineria-pague-mas-
impuestos/2014-04-08/141221.html
(16) http://www.rpp.com.pe/2014-04-12-mef-bajos-costos-energeticos-y-de-mano-de-obra-hacen-al-peru-competitivo-
noticia_684067.html
(17) http://domingosdutra.com.br/comissao-de-minas-e-energia-aprova-projeto-que-devolve-mina-de-serra-pelada-aos-
garimpeiros/
Appendix 1: Flash update dated Wednesday April 9th
Good Wednesday morning, an hour before the bell.
This is a quick mailer to say I'm buying some Timmins Gold (TMM.to) (TGD) this morning. It's a company I've tracked for
a while without buying, but last night's production numbers were very good and we can expect a strong 1q14 financial
result from them.
TMM has alwys come second fiddle to RIO.to on my modelling, which is the bottom line reason why I've never bought it
(there are more, which we'll go into on Sunday). However, these production numbers put it closer to my Top Pick and
TMM brings two other advantages to the table:
1) longer mine life, plus inferred already under 43101 compliance that can extend things further.
2) It's liked by the brokerages (RIO.to doesn't get so much love) which means the numbers last night will get plenty of
third party push.
The trade is to buy now with an initial near-term outlook. I can see $2 fairly easily, which is perhaps 30% from here (if a
reasonable entry point is given) and not bad. However, near term dynamics and the gold price (of course) will decide
how things go. I note this morning some slight weakness in bullion, which is good news for buyers.
Best,O
26

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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