IKN #259Premium

The IKN Weekly
Week 259, April 27th 2014
Contents
This Week: A change in the Stocks to Follow table, Medical marijuana and M&A, Fedwatch.
Fundamental Analysis: Nothing
Stocks to Follow: Overview, Bear Creek (BCM.v), Timmins Gold (TGD) (TMM.to), Focus
Ventures (FCV.v), Gold Resource Corp (GORO), Rio Alto (RIO.to) (RIOM), Minera IRL (IRL.to)
(MIRL.L).
Copper Basket: Overview, Reservoir Minerals (RMC.v), Nevada Copper (NCU.to), NovaCopper
(NCQ.to).
Low Cost Producer Basket: Overview, Newmont (NEM), Barrick (ABX), B2Gold (BTG).
Regional Politics: Goldcorp (GG): More trouble at Los Filos, Factoring Suyai as a positive in
Yamana (YRI.to) (AUY) valuations is a mistake, Colombia: The presidential election will go to a
run-off, Santos still favourite for re-election, Chile: Expomin notes, Nicaragua: Protests against
B2Gold new El Pavon project, Al Gore on the Colombia Páramo
Market Watching: What Allied Nevada at Hycroft and Kinross at Tasiast have in common,
Alamos Gold (AGI.to): Your next community risk target in Mexico, Continental Gold (CNL.to):
Something rotten in the state of Antioquia, Short redux on last week’s GLD gold bullion holdings
article.
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
A change in the Stocks to Follow table
Please note there have been changes to the ‘Stocks to Follow’ table. Here are the bullet points:
• The table’s main “recommends” section (i.e. below the Top Picks, above the “smaller
riskier” trades) now has its components in rough order of attraction, instead of the
previous chronological order of purchase. Therefore at the top you have the ones I’m
most keen on at the moment (note bold type and highlight line) in FCV and DNA,
while at the bottom are the quieter stocks (e.g. LRA.v). I still like them all, be clear on
that, but the new ordering makes clear the current preferences. Finally, the order can
and will change as the weeks go on, in league table style, as newsflow changes
company dynamics.
• I’ve bowed to the wholly legitimate criticisms from you the readership about keeping
Minera IRL as a Top Pick but also a “hold and let’s wait and see until the Ollachea
financing deal is done”. That stock has been dropped down into the main section. But
be clear that I’ll reinstate it as a Top Pick if the financing deal, once announced, marks
IRL down as the screaming value buy that I suspect it will be. Ollachea is a class act
deposit and will not stay unmined.
• Also, Coro Mining (COP.to) is moved to the smaller/riskier section (Salazar was feeling
lonely) because at the moment it’s exactly that. The personal position is tiny and as it’s
1

not trading at much volume, I’ve decided to wait before adding the planned extra
chunk.
See below for more.
Medical marijuana and M&A
I’ve been hearing a lot of merger and buyout rumours this week. A lot, different companies,
different sized deals and different metals, majors, Tier 2s and juniors you name it, a deal is
hanging in the air. I’m not repeating any of them here because they’re all unsourced and all fit
the pattern of the classic whisper, with ingredients including logic, business sense, wishful
thinking and greed. But the reason to add this short paragraph is that the names of the
supposed buyers and sellers are less important than the clear trend developing of big money
looking for a home in miners.
Meanwhile at the other end of the scale we have the no-hopers withering on the vine and some
have started to drop off, as noted a couple of editions ago when talking about the sudden
upsurge of management cease trade orders in place because these vendors of moose pasture
can’t even afford to pay for the audit and get their annuals published. We also have a good
dozen of the bullshit companies run by bullshit people looking for bullshit sponsors making the
decision to move out of mining and into medical marijuana, the fad of the day. As it happens
I’m totally agnostic about marijuana these days (I smoked it for around ten years, haven’t
touched it for another ten since then) and hold no opinion about the chances for this nascent
sector (but the overpopulation trend is a classic, as anyone who remembers the uranium, or
lithium, or rare earth crazes can spot). But I know a good thing for the mining sector when I
see one and the more scamsters that leave and go play somewhere else, the better.
Gold price is the key, if we see a big drop then all bets are off, but it wouldn’t take $1,500/oz
for the market to come fully alive again. Not even $1,400/oz, in fact. This is the start of a bull
market for the miners because if it weren’t, deals wouldn’t be happening (OSK), trying but
failing to happen (ABX/NEM) or potentially happening. Gold can do what it wants in the next
week or month, it won’t change the “on the starting blocks” atmosphere that’s out there.
Fedwatch
We have the FOMC meeting this week, including the release Wednesday lunch time. We also
have the BLS jobs number out pre-bell Friday morning. Both these events can drive the gold
(and other metals) prices so keep them on your active radar if trading is your game.
Fundamental Analysis of Mining Stocks
Nothing this week. It won’t always be like this.
Stocks to Follow
Of our 13 open positions, last week six posted gains (RIO.to, IRL.to, DNA.to, SCZ.v, FCV.v,
TGD), one was unchanged (TGM.v) and six posted losses (LRA.v, EOM.to, COP.to, BCM.v,
GORO short, SRL.v). However, it was a clearlt positive week despite that even look count,
because the “right” ones went up, including good showings from Focus Ventures (FCV.v up
11.9%), Timmins Gold (TGD up 10.9%) and Rio Alto (RIO.to up 8.7%). Of the losers, only
Salazar Resources (SRL.v down 14.0%) showed a hefty percentage loss, but the tiny size of the
risk trade makes that more than palatable.
As noted in the intro today, there’s a change in the presentation of the table this week, as well
as a shift in a couple of the stocks. As from today, the stocks in the longs section are arranged
in order of personal preference, rather than the chronological timing of their first purchase. In
2

essence, what I’m saying is that I like FCV.v more than any of the other straight recommended
stocks at the moment, with DNA.to up these and TGM too. Meanwhile, stocks such as LRA.v
and EOM.to are currently somewhat out of favour with the market, so although I consider them
worthy and good as holds, I’m not expecting much from their near-term performance. Also
please note that Rio Alto (RIO.to) (RIOM) is now our sole Top Pick, as Minera IRL has been
sent down to live with the rest of the stocks, at least for a while.
We currently have 13 open positions on our ‘Stocks to Follow’ list, two less than our self-
imposed maximum. Four are green, nine are red.
this Reco Current
Company Ticker week Avg Price date PPS Gain/Loss% Notes
Top Picks
Rio Alto Mining RIO.to str buy C$2.30 07-apr-11 C$2.24 -2.6% best LT value
Recommended long positions (in current order of preference)
Focus Ventures FCV.v str buy C$0.23 01-jul-12 C$0.33 43.5% tgt 50c, added, avged up
Dalradian Res DNA.to hold/buy C$0.65 27-oct-13 C$0.89 36.9% Going well, tgt up to $1.70
Timmins Gold TGD buy U$1.40 09-apr-14 U$1.42 1.4% new trade improving fundies
Minera IRL IRL.to hold C$0.30 22-jul-12 C$0.15 -50.0% top pick called 24c, demoted
True Gold TGM.v hold C$0.395 02-feb-14 C$0.385 -2.5% LT hold, takeover play
Santacruz Silver SCZ.v hold C$1.04 26-jan-14 C$0.86 -17.3% added, now full position
Bear Creek Min BCM.v add/hold C$1.63 23-mar-14 C$1.45 -11.0% Ag/pol risk trade, avged down
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.83 -27.8% solid biz model, LT hold
Eco Oro Min. EOM.to hold C$0.48 22-sep-13 C$0.30 -37.5% waiting on paramo res.
Recommended short positions
Gold Res Corp GORO short U$5.07 26-jan-14 U$4.72 6.9% Re-short now full position
Smaller/Riskier
Coro Mining COP.to spec buy C$0.125 26-jan-14 C$0.08 -36.0% Cu spec play, can add
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.215 -23.2% 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
Now for some notes on a selection of the above stocks.
Bear Creek Mining (BCM.v): Added. This one dropped and I was happy to see it do that,
because I took several bites at the stock during the week and got my cost average down to
$1.63 (bought nearly all the extra shares at $1.40, for what that’s worth). I may add a few
more (there’s room in my wallet) but in no rush, as we’re less than half way towards the
negotiation limit date between company and Peru government over Santa Ana and as such,
there’s no great rush.
Timmins Gold (TMM.to) (TGD): after the rotten trading of the previous week, it was
heartening to see TGD bounce straight back from whence it came. I also saw TMM/TGC get
positive write-ups in a few brokerage notes which probably helped, but this is the one that best
reacted to the gold rebound in our portfolio (quite right too, after the overselling of the week
before last).
3

Focus Ventures (FCV.v): While we wait for the drill assays to start hitting the public sphere,
a couple of chunks of gossip. Firstly, we hear FCV was pretty active in marketing meetings in
Toronto last week (the team is Vancouver-
based, recall), with analysts and instos the
main targets for presentations. Secondly, as
regards the timing to call in on the warrant
exercise (which they could do tomorrow if
they wanted), a fusion of intel from more
than one source makes it clear that there’s a
type of gentle and friendly negotiation going
on between the company and the main
holders of those warrants, with the holders
preferring to wait until the drill assays are in
and known (or at least enough of them to
make a clear decision) before being asked
for their cash. This makes sense because it’s
in FCV’s best interest to keep these people
onside for both this financing and any future dealings (they’ll need to raise in 1q15 to cover the
main option payment, whatever might happen) and as the share price is now handily above the
25c magic number, there’s no great rush to force exercise at the first opportunity any longer.
On that subject. This five day chart shows how FCV traded last week and although it’s not
showing volume every day, the message is clear enough; you want in, you pay up. Rare indeed
is the junior exploreco giving out that message these days.
First results from the Bayovar 12 drilling are expected at any time and it all depends on how
FCV wants to present itself; with a few drill holes at first to set the tone, or a whole bunch at
the same time to show the bigger story all at once.
Gold Resource Corp (GORO): We two two pieces of news from GORO and let’s take them
back to front. Tuesday April 22nd saw GORO report some drilling results that are normal for the
deposit (1) but the NR only gave us drilling
highlights, which omit the duster holes (no GORO: AuEq sales
surprise from this company and its dubious 30000
marketing techniques). Overall, the NR was a 25000
wash and makes no difference to the company or
20000
its future valuation.
15000
Before that on Monday, GORO announced (2) its
10000
1q14 production numbers, with a preliminary
count of 23,700 AuEq, using a 1:64 gold/silver 5000
ratio. As our model assumptions for 1q14 were 0
for just over 20k oz AuEq in 1q14 (the chart here
is unadjusted for the GORO NR numbers last
week, to let you show my margin of error) that’s
about 3.5k oz AuEq more than the assumption,
which assumes perhaps $4.5m more in revenues for the quarter than previously modelled. This
in turn suggests that costs willing (we’ll find that out later) GORO can return an operating profit
of between $3m and $4m, which is enough to justify its 1c/month dividend.
No decisions as yet on this one, because the scant information given in iots NR is one thing and
the real showtime of the financial filings is quite another. But when they show up, I’ll be taking
a good look at the numbers and poking holes into my short thesis if necessary. Where the
rubber really hits the road on this stock is treasury position/working capital and if that starts to
recover, covering the short and freeing up a large chunk of my capital for use in other places
will be an option.
4
31q1 31q2 31q3 31q4 tse41q1 tse41q2 tse41q3 tse41q4
AuEq
gold eq from silver
gold
source: GORO filings, IKN ests for 1q14

Rio Alto Mining (RIO.to) (RIOM): RIO popped hard late Tuesday on rumours about
dealings and although I mentioned something in passing on the blog (3) I decided not to add
fuel to a rather dubious sounding fire (as a
sidebar, you may be interested to learn that
my cryptic little post got an awful lot of hits so
there are plenty of people hunting for news on
this one, I’d safely vouch). But now, a few
days later, in the relative calm of the weekly
and unlikely to cause a kerfuffle any longer,
the rumour that was doing the rounds in Bay
St was that Franco Nevada is looking to fund
Rio Alto’s stage two sulphide project, in return
for either an off-take deal or a streaming deal
on the gold produced there (depending on
your strand of the rumour).
It’s one of those pieces of gossip that makes
sense, because it’s known that FNV people have been in Peru recently looking at several
potential deals and if they were spotted walking into or out of the Rio Alto offices, it would give
speculation an extra nudge. However, I have reason to think that even though there’s a kernel
of fact to the whispers, RIO.to isn’t about to do a deal of that sort with FNV. For one thing it’s
not really necessary because as CEO Black pointed out this week on a tour of offices in Toronto
RIO.to now has a B-investment rated balance sheet and can raise debt from that, which is
cheaper and ultimately keeps more project upside inside the company. Secondly, there’s now
(better sourced) talk coming from RIO that the oxide gold production still in place. Slated to run
until around 2019 at current run rates and resource, is understated by at least a couple of years
and there’s simply no need to press hard on the next stage of development for the moment.
The credit market is still weak, so it makes sense for the company to delay the stage two until
there’s a better sector atmosphere and if the most recent off record reports of good drill
numbers from outlying areas are correct, RIO is getting more and more time on its side.
Minera IRL (IRL.to) (MIRL.L): I asked IRL about this part of its AGM and although contact’s
been difficult with the globetrotting Courtney Chamberlain, we finally got to exchange in over
the agenda items. Here they are:
7. To authorise the directors in accordance with Article 5.1 of the Articles of Association of the
Company to allot up to a maximum of 114,434,302 ordinary shares, being 50% of the ordinary
shares issued by the Company as at the date of this Notice. This authority will expire on the date
of the next annual general meeting of the Company
As special business:
8. To authorise the directors in accordance with Article 6.4 of the Articles of Association of the
Company to allot up to a maximum of 114,434,302 ordinary shares for cash, being 50% of the
ordinary shares issued by the Company as at the date of this Notice of Meeting,otherwise than in
accordance with Section 6.1 of the Articles of Association of the Company. This authority will
expire on the date of the next annual general meeting of the Company.
What that says in essence is that as long as the vote goes the board’s way, IRL will be able to
emit up to 114.4m shares in the year ahead if deemed necessary. That’s a lot of shares and a
bit eyepopping so questions were asked, but it turns out that the move is a pre-emptive one
that will help in the event of the financing deal for Ollachea, because at least part of the raising
is planned to be done via equity. By adding these items to the agenda of May 8th, IRL will not
ne3ed to go to the time and expense of running a separate EGM at the moment of the
financing deal closure. As we expect that to be this month, the move makes sense. Also, I was
assured by CEO Chamberlain that the approval to emit shares doesn’t make it an automatic
occurence and any equity raising will still have to be approved by the board and have specific
motives. In other words, this isn’t some sort of slush fund for cheap shares for officers.
5

The Copper Basket
After seventeen weeks of 2014 The Copper Basket is showing a 8.40% gain to level stakes.
company ticker price 1/1/14 Shares out Market Cap current pps gain/loss%
1 Augusta Res AZC.to 1.51 144.41 486.66 3.37 123.2%
2 NGEx Resources NGQ.to 1.43 168.71 327.30 1.94 35.7%
3 Reservoir Min. RMC.v 4.97 47.5 314.93 6.63 33.4%
4 Lumina Copper LCC.v 6.29 44.07 217.71 4.94 -21.5%
5 Nevada Copper NCU.to 1.35 80.5 169.05 2.10 55.6%
6 Hot Chili Ltd HCH.ax 0.425 333.11 98.27 0.295 -30.6%
7 Copper Fox CUU.v 0.375 402.96 92.68 0.23 -38.7%
8 Western Copper WRN.to 0.76 93.68 90.87 0.97 27.6%
9 NovaCopper NCQ.to 1.60 53.4 69.95 1.31 -18.1%
10 Panoro Minerals PML.v 0.35 204.71 61.41 0.30 -14.3%
11 Curis Resources CUV.to 0.57 74.79 57.59 0.77 35.1%
12 AQM Copper AQM.v 0.11 139.05 15.99 0.115 4.5%
13 Cordoba Min. CDB.v 0.45 31.88 13.07 0.41 -8.9%
14 Coro Mining COP.to 0.10 159.37 12.75 0.08 -20.0%
15 Oracle Mining OMN.to 0.27 49.03 8.34 0.17 -37.0%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg 8.40%
The basket saw a modest overall recovery last week, up 1.6% overall. The rebound came at the
right time, as the copper space looked in
danger of collapsing into yet another year The Copper basket 2014, weekly evolution
25%
of post-PDAC losses. The upmove was
small but very welcome. As for 20%
components, eight of them put in gains
15%
(NGQ.to, AZC.to, RMC.v, NCU.to, NCQ.to,
CUV.to, CDB.v, OMN.to), one was 10%
unchanged (CUU.v) and six lost ground
5%
(LCC.v, HCH.ax, PML.v, WRN.to, COP.to,
AQM.v). Best percentage changes were 0%
seen in Nevada Copper (NCU.to up 16.7%)
and Oracle Mining (OMN.to up 13.3%),
while the worst of the downers were AQM
Copper (AQM.v down 11.5%). The other trend form
last week was (and with exceptions of course) the
way the big got bigger and the small got smaller.
As a rule of thumb, the better known and larger cap
companies enjoyed the best of the gains, the
tinycap copper explorecos did rather less to catch
the eye.
Copper market prices had a great time last week,
breaking away strongly from the $3 and sub-$3
levels and as this chart shows, finishing the week
with its main futures contract at U$3.12/lb. In
theory at least copper needs to climb back into its
longer-term $3.15/lb to $3.35/lb trading range, but
for me what we saw was more than enough to
make a confident trade prediction, copper’s back.
Inventories also gave us a strongly bullish signal.
Shanghai made another big leg down with its
6
ht5naj ht21 ht91 ht62 dn2bef ht9 ht61 dr32 dn2ram ht9 ht61 dr32 ht03 ht6rpa ht31 ht02 ht72
source: IKN calcs

copper inventories last week, another very significant and overtly bullish move. The weeks of
March and April have been more than enough
to add a confident bullish signal to the copper Shanghai Futures Exchange Warehouse Stocks, 2014
market with last week’s move the cherry on 220000
the cake. Shanghai Futures Exchange copper
200000
warehouse inventories dropped a massive
180000
37,515mt, or 26.3%, to finish at 105,156mt.
Meanwhile, LME stocks saw a small drop, 160000
down 2,650mt (1.1%) to 242,300mt. Finally, a 140000
slight rise in Comex copper stocks, up 157my
120000
(0.9%) to 17,133mt.
100000
All that gives us an overall world stocks figure
of 364,589mt, down nearly 40,000 metric
tonnes from this time last week and that’s
nearly all China and Shanghai.
Now for updates on a few of our featured basket stocks:
Reservoir Minerals (RMC.v): Another window for self-hate. RMC trod water early last week
as I wondered whether it was see any acceleration into a drop, but volumes and the price
remained steady, I stayed away. Then of course it did this:
My RMC money is still earmarked on the sidelines, though. Let’s see how it trades this week
and don’t be surprised if a Flash update arrives in your inbox that says I’m taking a small
foothold position...at last.
Nevada Copper (NCU.to): NCU rose strongly again this week, up 16.7% and as this year-to-
date chart shows, it’s up nigh on 50% in
the last four weeks, a rip-roaring rally.
But even if guilty of sour grapes for
missing a run, I still say this thing isn’t
much of a buy since the latest Pumpkin
Hollow 43-101 showed its economics to be
marginal at best at these copper prices.
The one thing potentially playing in its
favour is the lack of decent and advanced
copper project alternatives out there, but
even so buying a mediocre project isn’t
some kind of mini-good thing, it’s a
7
ts13ceD ht5naj ht21 ht91 ht62 dn2bef ht9 ht61 dr32 dn2ram ht9 ht61 dr32 ht03 ht6rpa ht31rpa ht02rpa ht72rpa
Mt Cu
source: Cochilco

mediocre thing in its own right.
NovaCopper (NCQ.to): I’ve been taking a closer look at NCQ recently and somewhat to my
own surprise, there are more than a few things to like here. In fact it got to the point where I
started putting together a deeper NOBS fundies report on the stock this week, but after due
consideration this weekend I’ve decided to throttle back and keep things simple.
There are three reasons to like NCQ today:
1) I’m more bullish on the copper sector and signs are the worst of the price drop is done,
or at the least the bad news is now baked in.
2) NCQ has seen its share price drop to an interesting level
3) Recently, NCQ published a decent 43-101 resource on its Bornite Project deposit, part
of its large land package called UKMP. The results were good.
Regarding point one, that’s a function of the macro tracking work we do here, week in and out.
With China showing distinct signs of a demand pick-up and world bodies now having factored in
lower assumptions for copper in 2014, there’s less downside left in the system and plenty of
potential for a “surprise” upside.
Regarding point two, here’s the 12 month NCQ.to share price chart.
Regarding point three, the 43-101 technical report on the Bornite deposit, dated March 2014,
was posted about three weeks ago onto SEDAR. I took a look at the time and a better look this
week as I revisited potentials in a better copper environment and came away impressed
enough to be writing this today. It needs your full attention to get the real picture, so go
download your own copy, but we can feature the overview resource table here at least:
That’s 5.7 billion (with a B) pounds of copper at a high cut-off and decent grade. The high cut
8

off is necessary because for one thing it’s a remote project in Alaska and costs are going to be
higher than the average. For another, any eventual mine would run a high strip rate and thirdly,
as a quick squint of the table will tell you, most of the mineralization would be best suited to an
underground operation.
However, 5.7Bn pounds of copper is $5.7Bn pounds of copper and once it’s added to the other
developed deposit owned by NCQ in the area, the Arctic Project just 15 miles away which
already has a PEA to its name, the metals count gets even more interesting. Here’s the
overview of Arctic at the moment:
This time, the near 2Bn lbs copper is complemented by a range of other metals in this
polymetallic deposits, all at good grades as well.
The bottom line to the positives here is that NCQ has a lot of in-situ metal on its hands already
(and there’s a lot of exploration upside left on its property, as a look at the company literature
will make clear) at a low current price. To ballpark it, the $70m market cap and 7.65Bn lbs
copper already under 43-101 compliance works out to less than a 1c/lb in-situ, all at interesting
grades and not even including the other metals that come along for the ride at Arctic.
Which means we need to consider the downsides to this company immediately. First up, its
properties are a long way from anywhere at the moment. It’s Alaska which means damned cold
in the winter, the nearest town of note is 275km distant, your neighbour is more likely to be a
Grizzly than a human and there are no roads to the locality of note as yet, which means
helicopter is the preferred means of transport (which adds to exploration costs). The remote
location is of course an advantage in some respects, and as the region has more than one
project under development its economic potential is attracting the attention of government
authorities. There’s now a plan to run a paved road through the area and once that’s in
(perhaps five years from now, the economic
NCQ: Working capital
potential really opens up. However that
40
means a long timeline to a real mine and
35
even then there are all the other things that
30
can kill any mining project between us and 25
then. 20
15
The second issue with NCQ today is more 10
pressing and this working cap table (right) 5
shows it better than a thousand of my 0
words. In short, the company is out of
cash. It’s done pretty well to get through to
1q14 on the treasury it got when it was
spun out from its mothership NovaGold
back in April 2012 (the sub-sub-subzero temperatures during the winter help crimp the burn
rate for those months), but to move forward this year NCQ needs to cash itself up. As it
happens, with the same backers as NovaGold behind NovaCopper it probably won’t be a
problem to source financing, the question is at what price.
It’s because of that second item that I’m going to hold back on doing anything more proactive
about NCQ right now, but once the financing is announced this could be a nice place for a real
investment in a copper junior. The deposit size, grade grade and the politically strong address
all help its cause, as does the governmental promises to run a road through and open up the
region for real development. I think we’re entering a stage in which strong metals deposits will
9
21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 tse41q2 tse41q3 tse41q4
U$m
source: NCQ filings, IKN ests

regain a lot of the lost ground on asset valuations and that suits NCQ’s cause to a tee. There’s a
lot to like here and it’s now on my shortlist, the copper trade I’ve been looking for this year may
have found a match.
The Low Cost Producer Basket
After 17 weeks, the Low Cost Producer Basket is showing a 11.55% 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 35.37 34.01 -9.9%
2 Goldcorp GG 21.67 812 20.19 24.86 14.7%
3 Barrick ABX 17.63 1000 17.89 17.89 1.5%
4 Newmont NEM 23.03 497.87 13.17 26.45 14.9%
5 Silver Wheaton SLW 20.19 357.39 8.03 22.47 11.3%
6 Franco Nevada FNV 40.74 147.01 7.01 47.68 17.0%
7 Agnico Eagle AEM 26.38 173.43 5.04 29.05 10.1%
8 Pan American PAAS 11.70 151.41 1.97 13.04 11.5%
9 B2Gold BTG 2.02 651.4 1.93 2.96 46.5%
10 First Majestic AG 9.80 117.02 1.12 9.59 -2.1%
all prices in U$, using NYSE ticker prices Portfolio avg 11.55%
A better week, with just one stock losing ground (ABX) and all others making gains on the back
of the gold hike and sector M&A
activity, because as the ABX/NEM The Low Cost Producer Basket: Weekly performance and
mini-saga showed, even failed comparative to GDX control
35%
M&A talks move companies these
30%
days. Some decent gainers too,
25%
with Newmont (NEM up 12.4%)
20%
leading the pack and B2Gold (BTG
15%
up 9.2%) putting in a strong
10%
week, too.
5%
0%
As for the M&A action ABX and
NEM was one story but what looks
like the end of the battle for
Osisko (OSK.to) happened too
with Goldcorp (GG) stepping back
from the fray and letting its hostile bid drop,
which means the combined Yamana (YRI.to)
(AUY) and Agnico Eagle (AEM) White Knight
deal has won the day. That surprises me
somewhat (my call of GG to up the bid again
last week was plain wrong) but it did
Goldcorp’s stock price some good, up 5.3%
on the week. Here’s a look at how the share
prices protagonists of the OSK saga have
done over the last two weeks:
10
ts13ceD ht5naj ht21 ht91 ht62 dn2bef ht9 ht61 dr32 dn2ram ht9 ht61 dr32 ht03 ht6rpa ht31 ht02 ht72
basket
gdx control
source: Yahoo! Finance, IKN calcs
Low Cost Basket: Percentage difference between
basket and GDX control, 2014
8%
7%
6%
5%
4%
3%
2%
1%
0%
ts13ceD ht5naj ht21 ht91 ht62 dn2bef ht9 ht61 dr32 dn2ram ht9 ht61 dr32 ht03 ht6rpa ht31 ht02 ht72
source: ikn calcs, NYSE/Nasdaq data

The basic story is told with those four lines:
• OSK wins, though it dropped when the war was declared over on Monday morning and
only recovered because of the better performance in gold.
• GG wins, because the market feared it would try to outbid and pay too much (in its
opinion anyway) for OSK.
• AUY and AEM lose share price (particularly AUY, and there are a whole bunch of people
now wondering whether it’s bitten off more than it can chew here) but win their asset.
From here, if the price of gold regains U$1,500/oz they’ll look smart, if it drops to the
Goldman Sachs U$1,050/oz less so. Meanwhile, GG has earmarked U$600m this year to
complete development of Cerro Negro in Argentina (for what it’s worth the GG high
command has an audience with President Cristina Fernández de Kirchner in the
presidential palace Buenos Aires last week and the appropriately positive noises about
mining and investment were made by both sides) so that covers just about all the
$625m treasury it boasted as at end 2013. OSK was the one that fit best for GG at this
time and just because they failed in the bid, we shouldn’t suppose they’re going to go
out and buy second best. They’re not in that great a shape financially, has to be noted,
which may have been the decider about not chasing up on its coveted prize.
Newmont (NEM) and Barrick (ABX): We reported on the failed talks last weekend but the
surprising thing was how NEM took off and ABX sunk, even showing a small loss in a week
where most everything else in the larger producer sphere rebounded. Earlier in the year we
mused on the lagging performance of NEM and the call was that it looked ripe to play catch-up.
That’s now the case and if you look above, NEM’s +14.9% on the year fits right in with the
pack. Which leads us to ABX, because although it’s still the company with everything up for sale
(at the right price), there’s no need for it to have sold off so badly compared to its peers and I’d
expect it’s ripe for a rally now. After all, the ABX/NEM failed merger talks are the first time
these two have tried and failed, it’s hardly new news and what’s more, it’s a difficult fit. Once
the scoop factor had died down it should have been considered a wash, but the market decided
to buy NEM and sell ABX. These companies are virtually unchanged from 10 days ago, the ABX
drop isn’t fundamentally justified and the emotion will wear off; ABX is a trading buy here.
B2Gold (BTG) (BTO.to): BTO did very well last week, with its peer-beating 9.2% for the
week and near 50% YTD performance. The stock was undoubtedly boosted by getting a new
coverage and buy rating from Goldman Sachs (say what you want at this point, we should all
know the pros and cons of GS by now). It’s one of those situations where a company grows
and grows until it gets to a new minimum size at which point, a new set of analysts, finance
11

houses and instos that play in a bigger paddling pool take notice for the first time.
What people tend to forget is that BTO might have some sort of sector star image, but its share
price development over the last three years hasn’t made many millionaires out of its holder
(except for the constant insider sellers at director level who have exercised and dumped
millions of options onto the market and done very well for themselves, thank you). This chart
shows just that, but what it doesn’t show is the way in which Clive Johnson & Co have used
their “good paper” to make a whole bunch of acquisitions that haven’t placed burden on
treasury (profits are used to develop the new mines) Back at the end of 2q11 (June 30th) BTO
had 341.51m shares out and could be bought on several occasions at $3 a share, giving it a
market cap of just over a billion ($1.024Bn in both Canadian and US, what with the forex parity
at that time). Now it’s nearly double that market cap, but not because us retailers are sitting on
a near double. No folks, that’s because BTO has 675m shares out. Its larger market cap is why
BTO gets coverage from Goldman Sachs, nothing more or less.
Yes, BTO is a well run company and its obvious exit is to do what the same team did with Bema
a few years back, i.e. wrap it all up in a bow and sell its 500+k oz per annum gold production
profile to the highest bidder. But in the meantime, we have at least three years of evidence to
suggest that adding value to company shares and looking after its shareholders isn’t one of the
high priorities of this board of directors. If market sentiment allows, the probability of BTO
running another all share buyout and adding to its structure, raising its market cap to the
detriment of those holding its equity, are very high indeed.
Regional politics
Goldcorp (GG): More trouble at Los Filos
More problems to report (4) for GG at Los Filos in Guerrero State, Mexico. The road blocks
continue at the mine, set up by local landowners (ejidarios) who want a better deal on the
amount GG pays them for use of the land. We’ve reported on that previously and the blockages
are still in place, but the new development is that workers at Los Filos are moving to go on
strike because they say GG hasn’t paid them anything for the month of the road blocks and
mine stoppage, which goes against the contracts they have with the company that apparently
guarantee the first month’s salary in case of mine stoppage.
So add industrial action to the road blocks at Los Filos, fine community relations work going on
at GG. For the record, Los Filos carries around 13m of GG’s total of 81.8m reserve and resource
ounces, plus contributes around 90,000 oz Au to quarterly production figures. This is not an
inconsequential operation for the company, not by a long way.
Factoring Suyai as a positive in Yamana (YRI.to) (AUY) valuations is a mistake
I’ve noticed a renewed assumptions that Yamana Gold’s (YRI.to) (AUY) Suyai project in
Argentina’s western Chubut province will begin to gather new positive momentum. The
12

assumptions being published by Canadian brokerages are along the lines of 1) environmental
permit application later 2014 then 2) permits awarded in 2015 then 3) development of the
project. Here are a couple of examples, starting with Canada’s National Bank (NBF) in one of its
sector notes last week, when YRI was the focus:
In project pipeline, feasibility studies underway at Cerro Morro and Suyai.
At Suyai, also in Argentina, YRI will apply for permits in 2014 for a full U/G mine.
Exposure to depreciating currencies (BRL, CLP, ARS) tempered by hedging program
and a return to very high in-country inflation rates in Argentina
And here’s another, Scotia on March 24th and the way it gave Suyai top billing in its list of
catalysts for YRI:
Suyai – YRI plans to apply for environmental permits in 2014 and expects permits in
place by mid-2015. (1% of NAV)
Now I’d agree that assigning Suyai (which was once called Esquel after the nearby town but
saw its name change, which is a clue in itself) 1% of NAV target to YRI valuations is a
conservative move and therefore down the list of things that could affect its share price. All this
comes up because of the renewed (moderate) optimism being voiced about Suyai/Esquel up
North and also because of another name change that should demonstrate just how wrong
those assumptions are. According to the local Esquel press this weekend (5), on May 15th the
new town school (that’s been open just over a year will be re-named “23 de marzo” (23rd of
March) in a ceremony that will have Chubut governor Martin Buzzi as its guest of honour. That
name has been chosen because it commemorates the day on which the locals voted in a
binding referendum to refuse permission for the Esquel mine to be developed, on March 23rd
2003. In other words, the locals have named their brand new school after a referendum, which
shows the depth of feeling about the project has not died down in the slightest.
AUY is a $5.7Bn company and Suyai is one of its minor assets today. But at 1% of NAV
valuations it’s being given a $50m+ asset valuation and that’s at least $50m too much; its real
value is negative, because it will go nowhere and eat every last dollar of exploration cash
Yamana assigns to it in the years to come.
Colombia: The presidential election will go to a run-off, Santos still favourite for re-
election
English language news site Colombia Reports does a good job of summing up the latest round
of voter intention polls for the upcoming Colombia presidential elections on May 25th and from
the main report (6) here’s one of the graphics that show the state of play well enough:
In a nutshell, incumbent President Juan Manuel Santos leads with 23% of voter intention, with
a scrap for second between Óscar Iván Zuluaga on 15% and Enrique Peñalosa on 11%. Also,
even though the None of the Above (known as “voto en blanco”, or “white vote” in Spanish)
has dropped, it’s still accounting for 14% of the popular opinion. Meanwhile undecideds at 22%
could still change things significantly.
What all this means is that we’re now extremely likely to get a second round run-off between
the top two (Santos plus one of the others), with the run-off scheduled for June 15th. Regarding
13

that, Santos is favourite to beat either of his opponents in round two, with polls (7) showing
these breakdowns:
Second round run-off: Juan Manuel Santos 34% versus Enrique Peñalosa 24%
Second round run-off: Juan Manuel Santos 34% versus Óscar Iván Zuluaga 23%
The bottom line is that Santos was, is and will remain red hot favourite to win again, despite
plenty of criticisms surfacing about his first mandate. This is probably a good result for country
stability because the key FARC negotiations will continue as stands (they continue to make slow
but steady progress), but Colombia as a destination for mining investment hasn’t shone under
Santos so far and that will need to change under Santos 2.
Chile: Expomin notes
Last week saw Expomin in Chile, one of the bigger bashes of the mining year in South America
with 80,000 attendees over its four days. There were plenty of industry bigwigs on show and
here are a smattering of the things said during the higher audience presentations (or at least
the ones that caught my attention as somewhat interesting:
A lot of talk about the new law bill sent to Congress by Michelle Bachelet that will annul the DL-
600 law for miners. This law has other aspects (such as enviro obligations), but its main article
is the part gives gives mining companies a fixed and competitive tax rate for foreign companies
who invested in the country. Therefore a lot of worry from companies about the potential for
higher taxes to be levied upon them and the resulting negatives that would create. Overall, the
vibe was that the new President was killing the goose that lays the golden egg (8), as Chile is
already one of the most expensive places to go mining (certainly the most expensive in LatAm)
and the copper projects offered by neighbouring Peru came with a much lower cost burden.
The President of Cochilco (The Chilean Copper Commission)Sergio Hernández, gave his
audience a case of the warm and fuzzies when proclaiming (9) that while copper production
rose by 6.3% in 2013, energy use in the copper sector rose by just 4.6%, thereby claiming
Chile is getting more energy efficient. That may be so, but as we already know (10) the
average grade mined in Chile went up by 9.3% (0.86% Cu to 0.94% Cu) during the year, I’m
not as impressed as the Expomin audience was last week.
Nicaragua: Protests against B2Gold new El Pavon project
On Friday, the North of Nicaragua saw a protest march (11) against the development of the El
Pavon project, owned by B2Gold (BTG) (BTO.to) (bought from Radius Gold a couple of years
ago and the reason why RDU holds its chunk of BTO shares). The protesters say they are
concerned about the effect a mine might have on the large local river, the Rio Yaoska, as Pavon
is located near it source. To quote (12) organizers of the protest, “The pseudo-development
promised by this mining project threatens a large number of people. This project does not offer
a balance between the profits to be made by a few and the damage suffered by the many”.
There was also much talk about the way in which it had taken the wealth of the Santo Domingo
(its largest mine in Nica) mineral area further South for itself and left little or nothing for locals
As for company reaction, B2Gold in Nicaragua (you’ll hear nothing in English from them, as
their silence on the deaths at El Limón show) published a short communique which said
(translated):
“At the moment, the company is building bonds with the community, promoting
education about modern mining and running social projects. Regarding plans of
operation, the objective in Rancho Granda (aka Pavon) is to mine the mineral which
would then be processed at the El Limón mine.
“Regarding the question of the activities of various groups, both yesterday and today,
in Rancho Grande, the company shares the environmental concerns of the population
because it is also a priority for B2Gold, a company that complies with national and
14

international rules and standards regarding the environmental and health and safety,
always operating in alliance with the (local) communities.”
The whole organization, including the involvement of church leaders, agro workers and
community leaders as well as the rhetoric being used against the project, show all the signs of
the type of well-structured and funded NGO anti-mine organizations that are widespread in
Latin America. The fact they have put together a 5,000 strong march (organizer’s number,
police estimated it at between 3k and 4k, the Catholic Church called it at between 5k and 6k) in
a country that so far at least had developed a strongly positive, pro-mining national policy is
interesting and may signal a new chapter in Nicaragua’s mining sector, one where miners don’t
have it all their own way.
Al Gore on the Colombia Páramo
You’ll be glad to know that inventor of the internet ex-Vice President of the United States of
America and erstwhile Presidential candidate, Al Gore, has added his opinion to the debate over
the Colombian Páramo de Santurbán high country region and what should be done with it. This
is of course the same locality that hosts our political risk play Eco Oro (EOM.to) that’s not
working out very well so far, along with other Canadian juniors run by Galway (GLW.v) and CB
Gold (CBJ.v), among others.
On a vist to Colombia (13), he said that Colombians “could choose between profits from mining
gold that would go to some, or good, fresh clean drinking water for [the nearby city of]
Bucaramanga”. He went on to say that, “A decision between the short term and the long term
is a decision that always faces us in our lives”. Whicih was nice of him.
Market Watching
What Allied Nevada at Hycroft and Kinross at Tasiast have in common
Apart from the obvious that they’re gold mines, anyway. In the last month, we’ve had
announcements from these two companies about the corresponding projects named above.
Both are considering somewhat troubled assets by the market due to costs (and it was the
purchase cost of Tasiast that did for Tye Burt at Kinross, but that’s another story), both are
currently producing and both have plans to throw a heap of cash at them in order to expand
production.
But as well as all those similarities, there’s a little trick used by both companies in their NRs that
needs a finger pointing at it, connected with the proposed IRR.
• In the case of Kinross (KGC) (K.to). the NR published post bell Monday March 1st (14)
tells of a $1.6Bn capex for Tasiast that will give the mine a post tax IRR of 17%.
• In the case of Allied Nevada (ANV) (ANV.to), the NR published post bell Tuesday April
22nd (15) tells of a $1.322Bn capex for Hycroft that will ramp up the mine to full tilt in
2018 and give a post-tax IRR of 26.5%.
However, and here’s the rub, both of those IRRs include the current production from the mines
and assume sunk costs at zero, i.e. the company is shelling out billions but it isn’t getting those
IRRs from their capital spend, they’re getting those IRRs from the whole caboodle, the current
production (which is basically zero capex) and the future combined. That’s a little bit tricky, no?
And once the market had noticed that the front line numbers weren’t all they were cracked up
to be at Hycroft, the initial pop quickly turned to drop.
15

As for Kinross...
So, two more gold companies praying to the metals Gods for a pop in the gold price.
Alamos Gold (AGI.to): Your next community risk target in Mexico
There has been an upsurge in the number of community and environmental cases being
highlighted against mining companies in Mexico recently, with the main current spat that of the
showdown between Goldcorp (GG) and the landowners at or around its Los Filos mine. There
are other cases too of course, with the Esperanza mine in Morelos (which happens to be owned
by Alamos nowadays), the Baja California Sur issues, Veracruz versus Gold Group, First Majestic
and Frisco (Carlos Slim) around the Wirakuta sacred zone, basically all of Chiapas, Guerrero
State aside the Los Filos problems...the list goes on.
As for a new issue, fingers in Mexican press are now being pointed at Alamos Gold (AGI.to)
(AGI) and the alleged environmental damage it’s causing around its Mulatos mine in Sonora
state (responsible for 190k oz of its production last year at a very attractive cash cost). This
article (16) is the best I’ve come across so far, with locals claiming the same catalogue of
broken promises, contaminated water, airborne dust from the open pit operation making life
miserable as we’ve seen in other cases where NGOs get their teeth into an anti-mine story. I’m
not calling avoid or short on AGI for this reason (for the record, I think it’s expensive for what it
is and an avoid in general), but a ramp-up of anti-AGI press as 2014 gets older wouldn’t
surprise in the least.
Once again, the lesson from this is crystalline in its clarity: When it’s a miner in Latin America,
make sure its community relations are in as good a state as practically possible. And that
16

doesn’t mean taking the company’s word for anything or assuming things are fine just because
they have one of those photos of cute kids smiling back at you from their website. Do DD.
Continental Gold (CNL.to): Something rotten in the state of Antioquia
Some disconcerting stories coming out of the Buritica region of Antioquia State, Colombia, least
week. As most people who follow the company know, Continental Gold’s (CNL.to) Buritica
property has a major informal/illegal (they call themselves the former, authorities the latter)
miner problem with quite literally thousands of small scale mining operations on its concession
property. CNL is keen to get them off the property, the miners refuse and have caused social
problems in the area that have included violent clashes with forces of law during operations to
evict them from their places of residence and work.
However, things to a more sinister turn last week when two separate incidents caused the
deaths of at least five people, along with many injuries. The first (17) occurred on April 16th,
when one man died and an unknown number were treated for injuries (one report mentions “at
least four”, another “dozens”) after personnel from CNL detonated explosive in the entrance to
one of the illegal/informal mine shafts. The personnel were accompanied by police officers who
gave permission to set the charges, but it turns out there were several people inside the mine.
One was killed by either the blast or the toxic fumes from the blast, the others injured.
The second incident happened last Thursday April 24th and was very similar in nature. Again
explosives were set off inside the entrance to a mine (though the specifics of who set the
charges haven’t been disclosed as yet), again there were illegal/informal miners in the mine.
This time (18) four deaths and over injuries have been reported, most of those again from toxic
gas inhalation (I now also note while editing Saturday evening that this second incident has
managed to make the English language press, with Bloomberg here (19) among others).
Both incidents occurred on CNL concession territory and in areas where an eviction order is in
place (and has been for several weeks). The local miners and some of community members
have accused CNL of deliberate intimidation of the miners in setting off these charges while
knowing that there were people still inside the mines.
As a result of the second, larger accident the country’s National Mining Agency (ANM) has
suspended all mining activity in the area as well as the use of explosives. Meanwhile Colombia’s
Minister of Mining, Amylhar Acosta, told Colombian national media (20) that the Buritica area
has an open eviction order due to terrain instability and the lack of health and safety measures
implemented by the informal/illegal miners. He
also made clear the eviction order was in place
as the land in question belonged to a private
mining company, i.e. CNL.
Away from last weeks events and largely
unconnected to them, I’ll add anecdotally that
over the years I’ve been warned away from
CNL as a potential investment by more than a
few people. Even without the opinions of
people I have good reason to trust, the way in
which the Ari Sussman/Vic Wall group screwed
up the Serra Pelada Brazil project of Colossus
(ex-CSI) and the similarity in the situations of
the two projects (both large, high grade, both known for decades locally and mined artisanally,
both very delicate community issues, and now both with obvious conflicts between the
incoming mining company and the locals) is enough to get me hitting the avoid button. The
whole company strategy and marketing techniques used to sell them to the ‘sophisticated’
North have been remarkably similar, too. No folks, this one has been an avoid on my list for
many a moon and will stay that way. The potential for a waterfall drop on surprise news is high.
17

Stop press: This evening CNL published a news release on the second accident, probably
because it needs to rebut English language reports (notable how these companies stay quiet
when the bad news is only reported in Spanish). The NR (21) is carefully worded and I think
they’ve done themselves no favours by using a semi-transparent message and omitting details.
But then again, I don’t trust these guys and would say that.
Short redux on last week’s GLD gold bullion holdings article
It’s very easy to read too much into near-term movements, so make sure that affirmation is
front and centre as you read on. Last week’s note on the influence, potential or actual or
otherwise, of the drop in tonnages held by the main gold bullion ETF) on the forward price of
gold came to the tentative conclusion that the price drop was already baked into the pie and we
shouldn’t expect the selling in GLD holdings to add to downside pressure for the metal.
Here’s one of the two charts from last week’s piece updated, and the way in which the pink
price line has bounced off the thicker holdings line is indicative of just that. Like I say,this isn’t
some proof of theory and needs to be taken as a small sample result, but as gold tonnage
holdings at GLD dropped by 3 tonnes and the price moved up by 0.55% it’s the type of result
that adds weight to the idea that extra supply reaching the physical market isn’t the main driver
of gold’s current movements.
We ended last week with “Gold’s moves next week will be for reasons other than last week’s
selling of GLD bullion holdings”, that seems to have been the case.
Conclusion
IKN259 is done, we end with bullet points:
• It was a week in which little changed for juniors. Plenty of M&A talk thanks to the
decided and failed deals between larger scale companies, and of course the reversal
and rebound that helped prices along, but overall there was no big sea-change. Which
means we’re still in a juniors market ripe for share accumulation, get them while they’re
unpopular people, it won’t be that way forever.
• NovaCopper (NCQ.to) is a better proposition than I thought. I want to see how the
inevitable round of financing fits into the structure before making a real proactive
decision, but it’s one that I’m now seriously considering as the solution to my copper
exposure hole.
18

• Whereas B2Gold (BTG) (BTO.to) doesn’t impress me half as much these days and looks
expensive for what it is.
• The other one I may need to reconsider is Gold Resource Corp (GORO). I’m still looking
for an unpleasant surprise (for long anyway) from its costs profile for 1q14 and we
should keep in mind that its major revenue metal of silver has been particularly weak
recently. But if it starts showing signs of being able to weather the current storm and
pay its minor dividend without further treasury deterioration, it might be time to admit
error on this leg of the short and close up shop. Time and the financials will tell.
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.goldresourcecorp.com/releases/GRC-2014-04-22-1.pdf
(2) http://finance.yahoo.com/news/gold-corporation-reports-preliminary-2014-120000114.html
(3) http://incakolanews.blogspot.com/2014/04/on-rio-and-rumours.html
(4) http://www.aminera.com/index.php/mineria-internacional/item/3757-trabajadores-emplazar%C3%A1n-a-huelga-a-la-
minera-goldcorp.html
(5) http://noticiasdeesquel.wordpress.com/2014/04/26/escuela-de-esquel-llevara-como-nombre-23-de-marzo/
(6) http://colombiareports.co/zuluaga-penalosa-closing-popularity-gap-making-second-round-presidential-elections-
certain-polls/#
(7) http://www.caracol.com.co/noticias/actualidad/8203candidatos-acortan-distancia-a-santos-y-habra-segunda-vuelta-
encuestas/20140427/nota/2196402.aspx
(8) http://www.aminera.com/index.php/mineria-nacional/item/3753-grandes-mineras-mayor-carga-tributaria-resta-
atractivo-al-pa%C3%ADs.html
(9)
http://www.cochilco.cl/Archivos/destacados/20140425095317_COMUNICADO%20DE%20PRENSA%20CONSUMO%2
0DE%20ENERGIA.pdf
(10) http://incakolanews.blogspot.com/2013/12/average-copper-grade-in-chile-is-up-in.html
(11) http://m.laprensa.com.ni/ambito/139178
(12) http://estrelladenicaragua.net/?p=5136
(13) http://www.caracol.com.co/noticias/actualidad/8203en-santurban-colombia-debe-escoger-entre-el-oro-o-el-agua-al-
gore/20140425/nota/2194714.aspx
(14) http://finance.yahoo.com/news/kinross-releases-tasiast-expansion-feasibility-212006909.html
(15) http://finance.yahoo.com/news/allied-nevada-announces-hycroft-mill-210415351.html
19

(16) http://www.dossierpolitico.com/vernoticias.php?artid=142322&relacion=&tipo=Sonora&categoria=1
(17)
http://www.elcolombiano.com/BancoConocimiento/H/hallan_un_minero_muerto_en_buritica/hallan_un_minero_muerto_
en_buritica.asp
(18) http://www.prensalibre.com/internacional/accidente-Colombia-deja-cuatro_muertos-
81_heridos_0_1127287380.html
(19) http://www.bloomberg.com/news/2014-04-26/colombia-gold-mine-blast-kills-four-halts-output-at-buritica.html?
(20) http://cmi.com.co/?n=228201
(21) http://finance.yahoo.com/news/continental-gold-operations-unaffected-accident-005236670.html
Stocks To Follow Closed Positions, 2012
Closed in 2012 closed close PPS
Soltoro SOL.v jan'12 C$0.87 07-nov-11 C$0.94 8.0% cash moved to BCM.v
Gold-Ore Res GOZ.to feb'12 C$0.84 13-oct-10 C$0.98 16.7% trade closed on ELG.v offer
Minefinders MFN feb'12 U$11.68 17-nov-11 U$14.80 26.7% target made, trade closed
Iron Creek IRN.v mar'12 C$0.58 26-sep-10 C$0.31 -46.6% time up on small bad trade
U.S. Silver USA.to apr'12 C$2.18 15-mar-12 C$1.86 -14.7% ST trade no good, cut loss
Augusta Res. AZC.to may'12 C$3.10 29-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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