IKN #262Premium

The IKN Weekly
Week 262, May 18th 2014
Contents
This Week: Everything is bullish for gold. Everything. Now sign here.
Fundamental Analysis: NOBS report on GoldQuest Mining Corp (GQC.v).
Stocks to Follow: Overview, GoldQuest Mining Corp (GQC.v), Gold Resource Corp (GORO),
Bear Creek (BCM.v), Rio Alto (RIO.to) (RIOM).
Copper Basket: Overview, Reservoir (RMC.v) NovaCopper (NCQ.to), Panoro (PML.v), Augusta
(AZC.to)
Low Cost Producer Basket: Overview.
Regional Politics: Peru: Local reaction to the Bear Creek (BCM.v) Santa Ana news. Colombia’s
Presidential election in the final stretch.
Market Watching: Machine trouble. GORO short covering analysis.
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
Everything is bullish for gold. Everything. Now sign here.
“In order to be successful, one must project an image of success at all times.”
Buddy Kane, American Beauty (1999)
The latest reason to wring one’s hands is apparently the US bonds rally, which saw the 10 year
yield touch 2.5% last week. This was quickly jumped upon by the gold promo brigade as the
next obvious reason to expect a gold rally and hey, we should all know how this theory goes ny
now: Bonds rally (cid:1) Flight to safety (cid:1) Markets nervous (cid:1) Plus yields dropping so less reason to
hold interest-bearing “safe” paper (cid:1) Buy gold (cid:1) To da moon Alice.
1

Look, it’s fair enough and if you scour the charts you’ll find instances where a dropping bonds
yield has happened at the same time as a rally in gold. But (yup here it comes) since we saw
the last big jag movement and recovery of bonds, the Ten Year has seen its yield fluctuate
between 2.5% and 3% and its effect on gold has been at best marginal, more likely random as
these two charts sitting side-by-side show us.
• In September 2013, the T10 yield rose to nearly 3%, gold spiked too.
• In late October 2013 the T10 yield dropped to close to 2.5% and gold...spiked up.
• December 2013, the T10 yield rose to touch 3% and gold...dropped.
• In March 2014 the T10 yield ran steady and gold...spiked.
• In May 2014 (today) the T10 yield dropped to 2.5% again and gold...remained steady.
So sorry guys, can’t see this one, not until something truly market-altering happens anyway.
Now, that’s not to say I’m bearish gold myself and I have no problems about saying to the
world I see the price of gold going up this year, with U$1,350/ and $1,400/oz slated into my
thoughts. I’ve been asked about this call too, mails saying “yeah ok, but how do you justify that
call, Mark?”. These questions get me thinking about how I justify any future prediction, not just
gold, and the ultimate answer in any situation comes down to “because I say so”. Oh for sure I
can whip out a chart or a table or do spreadsheets of fun and laughter in order to present
evidence to back up the call, all anal ysts do that.
No matter, because the world of finance and business has shown for generations, not just these
last few years, that it doesn’t need accurate information to sell its wares. What it requires is a
message that conforms to its audience’s preconceptions, one that feeds its insatiable desire for
confirmation bias. So in our focus sector, people will sell bullish gold stories on the back of the
latest market trends and fashionable issues long after I’ve shuffled off this mortal coil. Other
people will buy them, too.
Fundamental Analysis of Mining Stocks
This week we look more closely at our new recommended stock, GoldQuest (GQC.v).
NOBS update report dated May 18th 2014
GoldQuest Mining Corp. (GQC.v)
Company Overview
GoldQuest Mining Corp. (Canada: GQC.v, USA OTC: GDQMF, Frankfurt: M1W.f) is an
exploration stage junior mining company operating in the Dominican Republic. Its main asset is
the Romero gold project in aforementioned country, which is currently exploring and developing.
It also has several other land packages as early stage concessions in the country. Current
share structure is as follows:
2

Shares out: 145.755m
Options: 11.055m
Warrants: 3.29m
Fully diluted shares: 160.1m
Current share price: $0.305
Market Cap: $44.46m
Approx cash per S/O: $0.06
All prices are in Canadian dollars unless stated. Forex U$0.90=CAD$1
The new position
It was mentioned in last week’s IKN261 as a potential purchase and on Friday via the Flash
update (see appendix) the trigger was pulled. There are several reasons for my slightly quicker
than normal decision to move from the merely possible of last week to the already-bought new
holding of this week:
1) Cash was freed up by last week’s sale of Bear Creek (BCM.v) and covering of the
Gold Resource Corp (GORO) short position. Not only that, but by way of a very
pleasant change both were cashed in at a profit. This allowed me more flexibility than I
was expecting at this point.
2) I got antsy to own another gold position. Yes, as simple as that, I freely admit that
the new cash was burning a hole in my pocket. However, I noted the potential
psychological negative before making a final decision and mulled it over first. The main
reason I caved into temptation was that the current share price bracket for GQC at 29c
and 30c is very attractive and alongside that we can expect real news newsflow from
the company in the near future, including some serious catalyst potential to the stock
price if things go well.
3) I wanted to add a little more risk/reward to the gold holdings. To be frank, when
considering just about any gold play these days I stack its potential up against that of
Rio Alto (RIO.to) (RIOM) and its numbers and find them all wanting (accuse me of
fanboy, I don’t care) but as a large percentage of the portfolio is already in RIO.to it’s
difficult to justify another addition to myself (eggs and baskets and all that). But GQC fits
at this time and point because it brings a different set of metrics to the table. It’s an
exploration play, has a resource already, it’s cheap by just about any standard (if the
project turns out to be economic anyway), it has things happening in the near future that
could move the stock, it’s in a place that is still under-rated as a mining destination.
However this is not a riskless play and to that end, a bit further down I’ve made a little
list of things that could go wrong. As in things, in the plural.
For those of you wanting best value in your junior gold position, pick RIO.to. Those of you
wanting a solid company favoured by fawning brokerages, go for Timmins (TGD) or other
companies from the usual suspects list not featured here. GoldQuest isn’t for everyone and I’m
going in clear about the fact it could drop further. But the potential rewards are good and if
newsflow in the next few weeks goes our way, those rewards can arrive sooner rather than
later.
Company and shareholders
GQC is run by Executive Chair Bill Fisher and CEO Julio Espaillat, who are regarded as a
double-headed double-act and share ultimate responsibility for company strategy (and eventual
success or failure). They worked together in previous company Globestar and they both know
Dominican Republic (henceforth Dom Rep or DR) very well; local knowledge and how to move
and shake in any given country is always a strong positive for an exploreco in LatAm. As per the
latest filings Fisher owns 1.34m shares, Espaillat owns zero, other directors own an aggregate
of 1.1m. for sure they have options with which to benefit from eventual success, but so far at
least the people running the show haven’t been willing to expose themselves to potential
financial pain in order to gain. Something to put in the negative column, though to be fair we
should point out that the company officers take modest salaries compared with many peer
companies and there aren’t that many hands to feed, either
3

As for big shareholders, the main one is precious metals finance house Rousseau Asset
Management which has 20.35m shares or around 14% of shares out. Rousseau has backed
Fisher and Espaillat on previous occasions and are obviously in this one for the long haul.
Financials overview
Here come the usual suspect charts, to give us a snapshot idea of the corporate structure and
how GQC manages its cash.
160 GQC.v: Shares Out
Today we’ll start with the chart of number of
140
shares out and end quarter, which looks like this 120
right. This because I want to show how GQC
100
hasn’t had to go to market and raise equity since
80
2012. Back then, GQC did just that on the back
60
of the discovery drill results at its Romero target
40
that shot the stock from pennies to a peak of
20
over $2 in the space of weeks. During the
0
clamour the company took the opportunity to
raise around $20m at very good terms (the old
junior mining adage of “if they offer you money,
accept it” was in play) and since then the
company has lived off this raise. After a few
options were exercised recently at a 15c strike
we’re now up a little at and at just under 146m
S/O.
So to assets and we can see the big difference
that cash influx made to the company. The
company raised $5m in May 2012 and then
closed a $15m bought deal in August 2012 (that
second larger deal was priced at $1.25 and
began at $10m, but due to overwhelming
demand was raised to $15m), which made the
difference.
You should also be able to appreciate that $20m goes a long way in this company, as here we
are over seven quarters later and GQC has burned through only half of that cash. The recent
small options exercise helped maintain levels
during 1q14, but as GQC is now doing a few
more expensive things to its properties (IP
surveys, drilling, a PEA to complete and
publish) we expect cash to drop to under $9m
by the end of the current quarter. All this means
that GHQC can probably get out of 2014
without having to raise again and that’s not bad,
but it won’t be able to get through 2015. Finally
on this one, as GQC expenses its exploration
costs rather than capitalize them, the fixed
asset pile is relatively small.
Here is the liabilities development, which we
won’t dwell upon because no news is good news. There’s zero long term debt and minimal
current liabilities, run-of-company type. This is an optimum situation for our exploreco junior.
Which makes working capital look like this. Again, the story is a company that’s parsimonious
but gradually wearing down that cash pile.
4
11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 tse41q1 tse41q2
source: company filings, IKN ests
serahs
fo
snoillim
GQC.v: Assets Breakdown per qtr 30
27
24
21
18
15
12
9
6
3
0
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 tse41q1 tse41q2
source: company filings, IKN ests
srallod
fo
snoillim
fixed
other current
cash
GQC.v: Liabilities position
2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 tse41q1 tse41q2
$m
LT debt
current debt
source: company filings

GQC.v: Working Capital per qtr
22
20
18
16
14
12
10
8
6
4
2
0
5
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 tse41q1 tse41q2
source company filings, IKN ests
srallod
fo
snoillim
So to the P+L and just a couple of charts to show
GQC.v: Net loss, per qtr
3
the basic story. Here’s net losses and as
exploration and evaluation costs are expensed 2.5
they’re part of the story. I’ve included some 2
rough guesses for the three quarters to come
1.5
and as GQC has recently paid for an airborne IP
1
survey and is now drilling, the expectation is for
higher costs . 0.5
0
And as this breakdown of expenses to end 2q13
shows. GQC burns more when it’s drilling but
when it’s not, things are quiet and cheap. You
can’t fault this company for any lack of bang-per-
buck on exploration. You can also see how it
played things very quietly until that big discovery
hole(s) came along and was then in a position to
expand its operations.
Overall, the books are clean and simple at GQC.
They also showed how this small exploreco was
able to expand its operations after the discoveries
of 2012. but it hasn’t gone crazy with its cash and
has preserved it well.
Properties
The company works Dom Rep and has owns a
total of 26 concessions, most of which are in three specific locations. The main zone of interest
these days is the so-called Tireo Project, a group of concessions that run for 50km and include
the main Romero discovery. A good place to get the quick and efficient rundown on the
company properties, exploration work and generated targets is on its current corporate
presentation which you can download via this (1) link and from that document, here’s a map that
shows the relationship between Romero and Tireo. Romero has been the centre of attention at
GQC for a couple of years, but with the new IP survey and the targets it has generated, GQC is
now spreading its wings a little and will drill this year in areas around the main discovery. For
our purposes, we consider Romero/Tireo as one target and the current drill program as one that
may expand the known deposit, as well as find other outlying mineralization.
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 tse41q1 tse41q2 tse41q3
U$m
source company filings
GQC.v: "corporate vs field" expenses
3
2.5
2
1.5
1
0.5
0
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4
$m
other expenses
Eval/Expl costs
source: company filings

As well as the Romero/Tireo district, GQC has already drilled and built a small copper/gold
resource in its separate Jarabacoa district which includes the Las Animas resource. Aside
those, it has other regional exploration targets that are either the subject of early stage
grassroots-bootleather geology work or are as yet undeveloped.
Romero/Tireo
From this point we’ll concentrate our efforts on Romero/Tireo, as they provide the main catalyst
potential in the near and medium term. Due to their combined location we consider them as
one, but as Romero is the place where GQC has turned in its 43-101 compliant resource when
it comes to running numbers to consider what might be in the upcoming PEA, that will be
examined separately at that point.
The 2012 share price rise and subsequent drop: A little necessary background.
This three year chart is a nice visual reminder of what happened to GQC in 2012. It’s way more
complicated than the few lines that follow so if you want more please go searching, but in potted
terms:
Chapter one of GQC 2012 is the exciting stuff. In late 2011 / early 2012 GQC announced it was
going to drill some exploratory holes in targets generated in the then-entitled Escandalosa zone,
of which Romero was one target, and raised a little cash in order to fund the drilling. In late May
the results of this first drilling came back and included an eyecatching 231m of 2.42 g/t gold and
0.44% copper in the drill that went into Romero. GQC then focused its efforts on Romero and in
6

two NRs in July announced two excellent holes of 159m of 4.5 g/t gold and 1% copper, then
258m of 4.5 g/t gold and 1.3% copper. Those are the ones athat shot the stock up to $2 and
had the world licking its lips over the next Pueblo Viejo sized deposit.
Then came the flipside: That summer GQC accelerated its program at Romero, bringing new
rigs on site. But from late September onwards the results that came, though good, indicated to
the savvier watchers (and for the record I stayed out of this fight totally because it was clear
from early on that it was a geologists’ speculation, with correct interpretation of results vital, and
I’m not a geol) that the deposit wasn’t going to make the type of whopping enormous size that
had been speculated upon. The next three significant sets of results in September, October and
November all pointed the same way and as that chart shows, the jags down came with each
one. Since then the PPS has faded from the 50c or so level down to our current 30c level.
The Romero resource
Despite the precipitous drop from the potential star junior level, GQC has kept on keeping on
and in 2013 announced a maiden 43-101 compliant resource for Romero. Here’s how simplified
resource table looks:
Notes on that table:
• Despite falling out of favour with the market, GQC has a decent resource with good
grades and size on its hands. A little later on we’ll note just how cheap these ounces
are at the moment.
• GQC nearly always puts that 2.381m oz AuEq number in front of (potential) investor
eyes first, but there are good numbers everywhere on that table. Two thirds of the metal
value here comes from straight gold, with copper the obvious main kicker metal. Grade
is strong at 2.63g/t au indicated and if we throw in the inferred resource numbers there’s
already 2.175m oz Au under 43-101 compliance here (and 3.171m AuEq).
• Re the baseline cut-offs, assumed metals prices include gold at U$1,400/oz, copper at
U$3.18/lb, silver at U$22.50/oz and zinc at U$0.95/lb. Grades were capped at very
reasonable levels for both the main Romero and the Romero South zone, which points
to sensible conservatism being baked in by the GQC team...I like that. As it’s the ratio of
prices from the main metals copper and gold that interests us more than the assumed
prices at this point (it’s 440:1, for the record), those work ok for the time being.
• As for recoveries, at this early stage GQC has been working with a global AuEq
recovery level of 76.7% with the gold apparently reporting to two concentrates, one
copper and the other pyrite. That’s quite low and raises a question or two about the
economic viability of the project so those of us that plan to hold this thing through to the
inauguration of the mining operation should pay close heed to any and all metallurgical
news developments in the next...ooh, let’s say five years or so. It also fits in with the
problems I’ve been encountering while doing my quiet DD and asking my quiet
questions about other projects and exploration companies in Dom Rep. Companies
such as Unigold, Everton and the newer (and it must be said potentially interesting)
Precipitate have projects, mineralization and decent quantity of gold ounces, but they’ve
7

thrown up big red flag on their met work to date. The situation at GQC is probably better
than the others (it’s early) and with enough science thrown at this already decently
sized and grading Romero it could get better quite easily. However be clear; the met at
Romero is an issue that needs to be watched carefully as somewhere down the line it
could be a project killer.
• As for costs, GQC supplied some basic costs per tonne metrics in relation to NSR of
$30/tonne mining for Romero, $24/tonne for Romero South, $12.50/tonne processing,
$2.50/tonne G&A. Those seem ok to me for the moment, the PEA is sure to refine them
further.
While we’re on the subject, in its latest corporate presentation dated May 2014 from which that
resource table was purloined GQC makes a continued fuss about the speed of discovery of
Romero. We have mentions of first mapping in 2006, how IP and bootleather geology zeroed in
the on the target, discovery hole to 43-101 resource in just 17 months and now the latest boast,
from discovery to PEA (well, nearly) in two years. These are the kind of things that impress
geologists more than financial parasites such as I (it’s also the type of thing that geologists love
to boast about), but the latent message in this is that the speed of movement through the stages
of this brand new discovery, as well as the clear prospective nature of the Romero zone, means
that there’s more to come from the rocks there.
Summing up, we’ll see what GQC comes out with for the PEA by way of prices, grades,
recoveries etc when that’s published soon. For our purposes today, we’re going to stick with the
GQC recovery estimate of 76.4% AuEq (which will assume 78% gold, less for copper and silver,
no payable zinc at all).
Why buy GQC today: the two catalysts
The Flash update on Friday (see appendices) called buy, it’s time to lay out the reasons why I’m
now long GQC and it’s mostly about upcoming news
• What to expect from GQC part one, the PEA: The first thing we should get, as it’s
due anytime now or maybe in June, is the PEA that’s been built around those above
resource numbers. If my assumptions are correct we’re going to get some good
numbers from this on a conceptual level at least, so in the valuation section I’ve put
together what I feel is a reasonable ballpark on what to expect.
• What to expect from GQC part two, the drill program: But in spite of the 3m+ oz
AuEq that’s about to have a baseline economic study published about it, the main
reason I’m long the stock is for the current drilling. GQC has gone back to its previous
results (before the main Romero zone was the thing, done IP airborne and zoned in on
some new targets as well as holes that might be able to expand the current resource.
Although drilling is a risky sport, from what I’ve gathered and can see for myself the
company has a great chance of hitting some new rock and adding to the current
resource numbers. We probably won’t see a run to $2 again (especially in this crappy
market atmosphere, but a return to 60c is by no means impossible if just one assay
comes out nicely and that would be a double from here.
In other words, I’ve taken the plunge on GQC, less because it has a multimillion ounce resource
and more because it has two decent catalyst opportunities coming up.
What could possibly go wrong?
And now for the promised list of things that could go wrong at Romero/Tireo. Some are obvious
but need stating, others come from a bit of rootling around, picking at threads and generally
trying to worry myself enough out of not buying a stock:
• The latest drill program may turn up nothing. The main reason I want a piece of
GQC now isn’t for the already-established resource, but for the potential to add to the
mineralization via the current drilling at and around Romero (in the now-named Tireo
zone). The indications from the recent IP survey, as well as a couple of the holes from
previous drill campaigns that missed but gave some interesting data, are the type that
8

you can bet on but I’m aware that The Truth Machine and what’s truly under the ground
will have the last say and betting on drills is always going to carry risk. By way of
mitigation, the combo of low share price and market cap along with the already stacked
43-101 resource suggests that GQC doesn’t have much optimism or blue sky about the
current program baked in as yet. The bottom line here is that I’m looking for some good
returns from the current drill program but by the same token think there’s little downside
left. That’s not a bad situation for a speculative bet.
• The PEA may turn out to be unimpressive. The document was due April/May and in
the latest corporate literature we’re told May/June, so there’s a slight slippage in the
timeline (but nothing too heavy). Still, a PEA is a PEA and as this team doesn’t have a
promo BS reputation (glad to say) we’re unlikely to get one of those ‘very optimized’
documents that try to wow the market with unrealistic or top-end assumptions in order
to lipstick a pig. To be honest I’m less worried about this one than most, because gentle
questioning has led me to believe that the contents may be better than the market
expects.
• Dominican Republic may turn out to be less of a happy hunting ground for juniors
than I expect. For the record (and I’ve alluded to this enough times) I think Dom Rep is
an underrated mining and exploration address that will get very good press in the years
ahead. However, things can go wrong on that call and there are three variables on this
as far as I see it right now, being local community, environmental groups and national
government. Locals are happy with GQC’s presence at this time, but things need to be
kept that way. The national government under President Danilo Medina is talking good
pro-mining talk and public opinion has moved in its direction thanks to the good
negotiation result with (and now the money flowing from) Barrick Pueblo Viejo. Also, the
government has moved in the last few months to make the exploration permitting track
easier and quicker, with first results now showing through (such as the drill permits
received by GQC itself, other companies have seen permits pop out in a timely manner
recently too). Meanwhile, environmentalist groups are active in the country (for
example, they’ve been kicking up a fuss about the new Falcondo Loma Miranda nickel
mine extension plans and along with the local Church leaders who also oppose that
project, have made the permitting track very sticky so far.
• The infrastructure and location situation isn’t perfect. Three issues concern me
here. First up, the Romero deposit is close to the local town, particularly the Romero
South zone which sits at the end of a small side valley. It’s one thing to have a pleasant
little exploration camp next door with friendly workers and geols in and out who provide
decent cash labour opportunities on a casual basis and don’t upset the traditional
rhythm of a locality, quite another to build a 5,000tpd processing facility next door plus
all the infrastructure that goes with it. I’m not saying this is a massive red light because
to this point locals have been treated with respect, have welcomed GQC and things are
fine. I am saying it’s a potential issue. Second problem is that of physical space to put
the eventual machine, as topography looks a bit tight to my eye and there’s no big
swathe of wide open space available for mill tailing facilities, waste dumps and all the
rigmarole. In fact, although it’s just my personal opinion and not backed up by any hard
evidence I wouldn’t be at all surprised if at Pre Feas stage the plan includes having to
re-locate the current village, which is never an easy one. The last potential problem is
also connected to the potential for environmental headwinds mentioned above. Romero
is on concession land but it sits right next to the National Park region where no
development is allowed, so it’s the type of situation where anti-miners could kick up a
fuss about having a big nasty polluting mine right next to pristine forest zones. Also,
there will need to be a decent road paved to the site in the event of a mine and when it’s
built, trucks will be up and down it every day. That could ruffle feathers, too, as could
the simple fact that if brought into production it would be Dom Rep’s first ever formal
underground mining operation.
• There are a lot of bagholders in this stock, which may cause selling pressure as
people try to get out on any improvement, but more importantly brings the boy Who
Cried Wolf negativity to the stock. Some background on this as when GQC hit its
9

discovery hole at Romero the thing moved higher fast, but then went into an even
higher gear when the speculative pump artists started talking it up as the “Next Ten
Bagger” when it had already moved above $1 and $1.50 a share. Then as the next set
of drill results came out and the most optimistic “this is the next Pueblo Viejo” shouts
based on little more than a single (admittedly excellent) drill hole were tempered, the
smarter cash jumped off while those voices late to the show tried to pretend things were
still wonderful. As a slight aside and just by way of two examples (there are more on
both sides), one of them rather catty even if it’s true, I watched as Brent Cook jumped
on the move early and then sold well on the less-than-excellent second round of results,
while Louis James jumped on at the top, promising his people that it could be a ten-
bagger, then called buy three more times as it sunk without trace. The whole move was
documented in these posts (2) (2) over at the blog at the time and here’s the fun chart
that accompanied the first of those. To my knowledge his readers haven’t had the
instruction to sell handed down as yet. That’s one of the many reasons that more than
justifies the extra cost of Cook’s newsletter, by the way.
The point is that we could get selling pressure in the event of real live good news,
especially in a market as sullen as the one we have right now. The other thing about
any good news is that it’s going to be more difficult to package and promote as The
Next Big Thing because we now know more about Romero/Tireo than we did before
and it’s not shaping up as the next Pueblo Viejo in size. You never know, a different
area of mineralization may turn out to be that monster or there may be several 2m oz
gold pockets up and down the concession area that add together as greatness, but
once bitten twice shy is another little saying that comes to mind here. Romero is a good
size at 3m+ oz AuEq and there’s asset value to be tapped, but expectations for GQC
will be more modest this time around.
Valuing GoldQuest Mining Corp
What now follows is a run at what we can expect from the upcoming PEA. I’m probably pitching
more conservatively in many of my aspects of the company and I’m also going with cash flow
modelling (they probably pitch it on NAV) and I’m pretty sure what follows is pessimistic
compared to potential. You’ll also get a target price generated but this time it’s more for show,
the real exercise here is to demonstrate whether Romero as stands today is a potentially
economic mine.
• We do it by considering a model year for the company and use these as main
parameters
• A 5,000 tonnes per day (tpd) processing facility that gives the indicated-only resource
as stands a mine life of 10.6 years. That’s a pretty big machine for a u/g operation and
the problem of fitting it all into a tight space again surfaces, but as that’s the type of
throughput this deposit can sustain, that’s where we pitch for the moment at PEA-type
10

stage.
• A capex of U$300m to build the machine, paid for by taking out a financing package
that needs U$20m in annual debt servicing and then selling 100m shares. These are
guesses and I’m quite sure that if Romero in its present state or even future larger state
is ever mined, it won’t be by GQC that’s now 250m big. The exit strategy here is
obviously to sell to a larger mining company. The assumptions here are for modelling
purposes only.
• Head grades of 2.63 g/t gold, 3.1 g/t silver and 0.62% copper, all straight off the
resource. Recovery grades assumed are 78% for gold, 70% for silver and a low 60% for
copper. We assume Zinc is not payable, if only for the sake of adding more
conservatism into the equation.
• Mining and processing costs of U$60/tonne, which is higher than company
assumptions. G&A at U$2.50/tonne, the company’s own best guess at this stage.
• Average annual depreciation/amortization of U$15m
• A 5% country royalty and corporate tax as stands.
• U$0.90 =CAD$1.00.
• Other minor line items.
We then run those against four pricing models for the metals, that are headed up by gold at
different prices
• A lowball stress test case of Au U$1,000/oz, Ag U$18/oz, U$2.80/lb Cu
• A low-ish case of Au U$1,200/oz, Ag U$19/oz, U$3.00/lb Cu
• Our preferred case (blue, bold type) Au U$1,300/oz, Ag U$20/oz, U$3.10/lb Cu
• A reasonable blue-sky case of Au U$1,400/oz, Ag U$22/oz, U$3.30/lb Cu
Here’s what comes out, starting with revenue generation:
GQC at Romero: Annual model revs by metal type (U$m)
$1000/oz $1,200/oz
model Au Au $1,300/oz Au $1,400/oz Au
Cu Mlbs 15.2 15.2 15.2 15.2
$/lb 2.8 3.0 3.1 3.3
Cu revs 42.6 45.6 47.1 50.2
Ag Koz 127.3 127.3 127.3 127.3
$/oz 18.0 19.0 20.0 22.0
Ag revs 2.3 2.4 2.5 2.8
Au Oz 120,380 120,380 120,380 120,380
$/oz 1000 1200 1300 1400
Au revs 120.4 144.5 156.5 168.5
Gross sales U$ 165.3 192.5 206.2 221.5
Dom Rep royalty -8.3 -9.6 -10.3 -11.1
Net sales 157.0 182.9 195.9 210.4
Source: GQC data, IKN ests
The model shows that GQC running the 5ktod machine could see 120,000 oz per year from
Romero, which would cover around 70% of revenues. Once costs and other niceties are added
11

into the mix, this next table shows what happens to the financials:
CGQ at Romero: Income items for model year
At 5,000 tpd thruput $1000/oz Au $1,200/oz Au $1,300/oz Au $1,400/oz Au
Sales (U$m) 157.0 182.9 195.9 210.4
Cash COGS 109.5 109.5 109.5 109.5
Depreciation 15.0 15.0 15.0 15.0
SGA 4.6 4.6 4.6 4.6
Op income 20.1 44.7 57.0 70.9
Interest 20.0 20.0 20.0 20.0
Workers Part. 0.6 1.3 1.7 2.1
Tax (0.2) 7.0 10.6 14.6
Net income (0.4) 16.3 24.7 34.1
Shares out (m) 250 250 250 250
EPS -0.00 0.07 0.10 0.14
Capex -5 -5 -5 -5
FCF/sh 0.04 0.11 0.14 0.18
Source: CQC data, IKN ests
Notably, the U$1k/oz level won’t be enough to turn a profit using my very cautious modelling
approach. However, gold at U$1.3k works just fine and kicks out plenty of cashflow. Whereby
we can put a target price together:
GQC: Sales and earnings Target price & valuation data at various gold prices
Gold Price $1000 $1200 $1300 $1400 using four different gold (& Eq) prices
Sales ($m) 157 183 196 210 12-month target $0.65 (on 6x fwd EPS using
Upside to target 114% gold at U$1300/oz)
EPS 0.00 0.07 0.10 0.14 Mkt cap ($m) $45 Enterprise value $35
Cash flow 0.06 0.13 0.16 0.20 P/sales ($1000) 0.24 EV/sales ($1000) 0.19
P/E ($1000) n/a EV/EBITDA ($1000) 1.0
P/E ($1200) 4.7 EV/EBITDA ($1200) 0.6
P/E ($1300) 3.1 EV/EBITDA ($1300) 0.5
cash flow defined simply as EPS + depreciation
As mentioned somewhere above, this generated target isn’t my idea of a hard-and-fast share
price target on this stock because what I’m looking for form GQC is success from its exploration
side, though I do tip my hat to its potential to impress the market with its other near-term
catalyst, the PEA coming soon. So the idea of running the cash flow numbers wasn’t to get a
target, it was more to demonstrate the potential economics that Romero can offer in its present
state and size (even before any extra ounces are added by the drillbit) and from what we see,
U$1,000/oz gold along with other lowball metals prices aren’t enough for this project to work.
However current U$1,300/oz levels make perfect sense and point to a 114% rise using a
reasonable 6X forward PE ratio.
In-situ valuation
As well as the above based on an eventual profitable machine, let’s take that promised look at
how GQC is being valued today as an underground gold asset.
We use the indicated resource only (no inferred) and also the gold equivalent resource of 2.38m
oz (if you want to study just the gold, add maybe 1/3rd to all the valuations) and at current levels
of 30c (or so) and 146m shares out (or so), GQC’s ounces are being valued in-situ at $16.73.
But notably, even if we raise the share count level significantly (assuming a development
financing) or raise the share price, we’re never moving in the the realm of the truly expensive
contained ounces. What this table says to me is that there’s plenty of room for this stock price to
run if the asset ounces are deemed suitably economic.
12

Here’s the chart
GQC.v Romero in-situ gold valuation
at 2.38Moz AuEq shares outstanding
PPS 146m 170m 200m 250m
0.15 8.37 9.74 11.46 14.32
0.20 11.15 12.99 15.28 19.10
0.25 13.94 16.23 19.10 23.87
0.30 16.73 19.48 22.92 28.65
0.35 19.52 22.73 26.74 33.42
0.40 22.31 25.97 30.56 38.20
0.45 25.10 29.22 34.38 42.97
0.50 27.88 32.47 38.20 47.75
0.55 30.67 35.71 42.02 52.52
0.60 33.46 38.96 45.84 57.30
source: IKN calcs, U$0.90=CAD$1
Discussion and conclusion
First and foremost I’ve bought GQC as a risk/reward play on its exploration and drilling potential
in the coming weeks. Reasons include
• I want extra gold exposure, and a speculative play gives me that without putting too
much hard cash into the market. With cash recently reaped from a couple of trades I
can do just that and have already put a small amount of that to work
• GQC is one of the very few serious junior companies with real exploreco catalysts in the
pipeline right now. The upcoming PEA may do nice things, the drilling to expand or
discover a new place for gold bearing rock in the Tireo zone could bring serious blue-
sky
• I’ve been wanting to get some Dom Rep exposure in the portfolio and this offer a
window of opportunity.
• The 43-101 resource gives GQC a decent asset backbone. Things can go wrong on
several fronts, but its downside for the moment at least looks limited. The basic ballpark
numbers of the resource as stands today make sense at current metals prices.
So it’s all well and good positing a longer-term potential target price, but for me GQC is a near-
term trade set-up. If things work out and positive news moves the stock, I’ll take my profit gladly.
If not, then that limited looking downside will come to my rescue (i hope). On a previous fairly
famous occasion in 2012 GQC shot up and managed to transfer wealth from one set of pockets
to another before its story was done, the team behind the company is peer-respected and with a
successful background, the country looks good and the rocks that GQC is now drilling are
particularly promising. It all adds up to a trade and that’s why I’m now long. As for a target price,
I’m not setting anything firm on this one because much will depend on what it offers the market
and how those news offerings are accepted. I have “let’s go for a double” scratched at the back
of my mind somewhere but that’s nothing more than the roughest of guides. On this trade, I’m
going to let any market momentum that’s created sweep me along.
End of Report
13

Stocks to Follow
We now have 12 open positions and we closed two others during the week, so let’s make 14
the count here today. Of those, just four showed gains (BCM.v, TGM.v, SRL.v, GQC.v) and one
stayed unchanged from this time last week (SCZ.v). That means nine others had a negative
time of it (RIO.to, FCV.v, TGD, IRL.to, DNA.to, LRA.v, EOM.to, COP.to, GORO short), but in
mitigation, most of those moves were either small (penny or so) or on low volumes, so it’s a
negative week but it’s not one that has me gnawing at fingernails. The biggest percentage
upmoves came from Bear Creek Mining (BCM.v up 36.7% to our close price), and Salazar
Resources (SRL.v up 27.8%), while the biggest downmoves were registered in Gold Resource
Corp (GORO short down 15.4% to our close price), Eco Oro (EOM.to down 12.5%) and Minera
IRL (IRL.to down 12.5%).
With the removal of GORO and BCM.v then the addition of GQC.v, we now have 12 open
positions on our ‘Stocks to Follow’ list, three less than our self-imposed maximum. Three 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$2.14 -7.0% best LT value
Recommended long positions (in current order of preference)
Focus Ventures FCV.v str buy C$0.23 01-jul-12 C$0.285 23.9% tgt 50c, added, avged up
Timmins Gold TGD buy U$1.39 09-apr-14 U$1.38 -0.7% added, $2 tgt
Minera IRL IRL.to hold C$0.30 22-jul-12 C$0.14 -53.3% top pick called 24c, demoted
Dalradian Res DNA.to hold C$0.65 27-oct-13 C$0.91 40.0% Going well, tgt up to $1.70
Goldquest Min. GQC.v buy C$0.295 27-oct-13 C$0.305 3.4% new position, drillplay spec
True Gold TGM.v hold C$0.395 02-feb-14 C$0.37 -6.3% LT hold, takeover play
Santacruz Silver SCZ.v hold C$1.04 26-jan-14 C$0.77 -26.0% silver/M&A spec, rel. small
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.80 -30.4% solid biz model, LT hold
Eco Oro Min. EOM.to hold C$0.48 22-sep-13 C$0.265 -44.8% paramo resolution missing
Recommended short positions
None at moment
Smaller/Riskier
Coro Mining COP.to spec buy C$0.125 26-jan-14 C$0.075 -40.0% Cu spec play, can add
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.23 -17.9% 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
Gold Res Corp GORO may'14 U$5.07 26-jan-14 U$4.12 16.7% Re-short now full position
Bear Creek Min BCM.v may'14 C$1.63 23-mar-14 C$2.05 25.8% Ag/pol risk trade, avged down
2009, 2010, 2011, 2012 and 2013 closed positions in appendices below
Now for some notes on a selection of the above stocks.
Goldquest Mining Corp (GQC.v): Position opened. Today’s NOBS report above has all the
14

details, here we mark the official position opening in time-honoured style. I was happy to get
most (not all) of my starter position at a very reasonable 29.5c on Friday morning and that’s
where I’m marking price on this one (exact cost avg is 29.68c, bite me). I stress that things are
small for now, let’s see how it and the wider juniors market develops.
Gold Resource Corp (GORO): Position closed. This time last week it was “Thinking about
covering and taking profits”, Monday evening the decision was made to cover this short and
take profits via the Flash update (see appendix 1) and, as I was awake to the way the market
was shaping up Tuesday, managed to start the dump at $4 before it whizzed to $4.50 or so.
So the position is covered the profit taken, the overall portfolio that much longer. What’s more,
this time I think I’m going to liquidate the short interest and close the whole trade out rather
than just leave the short covered, because I can’t see myself going back to GORO as a long or
a short in 2014. As I pointed out to a market person who’s also recently been short the stock in
a mail exchange the basic reasons are:
1) Even if 1q14 was a bit of a flash in the pan (it’s been noted in several places how the
company’s tax bill for Q1 was zero, then the COGS reduction while raising tonnage
throughput suggests they might have cut a corner or three to make for a pretty
quarter) they’re now either at or close to a break-even point financially and can support
that 1c/month dividend.
2) People will look to GORO as a speculative vehicle to give precious metals leverage.
Those that think silver can and will re-take $25/oz soon will be interested in the thing
and even if the metal prices don’t oblige, we’ve seen how GORO manages to string
along its band of True Believers with jam tomorrow talk.
3) I simply don’t see that much potential downside left in GORO in 2014, assuming gold
remains equal. When the reserve report hits in 2015 it may be worth taking a short
position beforehand, but if I'm going to be short something I want active reasons to
expect downside in the mkt. Remember that I'm basically bullish gold for the rest of
2014 and I do firmly believe $1,400/oz is a reasonable target. In such circumstances, I
want to position myself longer as the second half of 14 kicks in so unless there’s a
company-specific issue to play, shorts are less attractive to me for the moment,
4) I’m out of the stock, so it’s all a little moot now. For sure I’ll cover and watch its
progress, but as I’m now officially neutral the stock (no matter what i think of its
mediocre corporate nature) I have better things to worry about.
I will point out two bearish side things before leaving the subject, however. Firstly is the
company reserves report, that as mentioned last week uses a high market price for gold and
silver (to quote the company NR (4) “SEC guided 3 year trailing average price assumptions per
troy ounce; $1,549.70 gold $30.03 silver”). This allows it to report more ounces in reserve,
because more ounces are economically recoverable at those higher market prices. As 2014
turns to 2015 and then 2016, those three year average trailing prices are going to drop, which
means reserve ounces for silver and gold will drop too. Therefore come early 2015 it’ll be worth
15

a look at how Arista’s reserves are reported because that might be a short catalyst (we saw
how the reserve number whacked the company share price hard this year, even under its
“numerically optimized” circumstances). The second thing is more immediate, which is to note
that aside from the 2.25m shares dumped by Hochschild last week (5) HOC has also filed the
papers that would allow it to sell up to 4.1m shares in an off-market block trade. Once those
are signed and done, there’s every reason to expect further dumping from the main holder
company.
PS: Please see ‘Market Watching’ for a repeat of the short analysis that accompanied Monday’s
sell call.
Bear Creek Mining (BCM.v): Position closed. See appendices 2 and 3 below to see how it
panned out, but sell we did. I was surprised I sold so early and was surprised again when BCM
faded Thursday and Friday into mediocre volumes and a share price that dropped under $2
once more. However, the plan was always to play Santa Ana political risk news and when it
came, along with a very decent price pop on volume, the call to sell and take the profit took me
about a nanosecond’s worth of time to make. Please check “Regional Politics” below for reaction
out of the Aymara Puno area on the news.
Rio Alto Mining (RIO.to) (RIOM): The NR out Thursday morning contained very bullish
news and as predicted over at the blog at the time (6), the drill results that show a potential for
two more years’ worth of production at La Arena gold oxide were met with a shoulder-shrug
from a market that’s more concerned with a $10/oz move here-or-there in gold than anything
fundamentally positive about a company.
The other frustrating thing was to see these great exploration results hit, then watch as people
moaned that the stage two feas study would have to be put back by another quarter due to
these results. I mean, first people want stage two to come online as quickly as possible because
they’re worried about the limited mine life of the oxide resource and want a guaranteed
pipeline, then when you offer them more oxide mine life they complain about a delay in the
stage two plan! Not to mention the fact that the more cash generated by RIO from ops, the less
balance sheet pressure that comes when it’s time to build the new machine and purchase the
sulphide rock mill. Seriously there’s no pleasing some people, but maybe they’ll finally get the
message when the rest of 2014 shows RIO making handsome profits even at $1,300/oz gold.
The Copper Basket
After twenty weeks of 2014 The Copper Basket is showing a 6.66% gain to level stakes.
company ticker price 1/1/14 Shares out Market Cap current pps gain/loss%
1 Augusta Res AZC.to 1.51 144.41 434.67 3.01 99.3%
2 NGEx Resources NGQ.to 1.43 168.71 320.55 1.90 32.9%
3 Reservoir Min. RMC.v 4.97 47.5 299.25 6.30 26.8%
4 Lumina Copper LCC.v 6.29 44.07 260.01 5.90 -16.2%
5 Nevada Copper NCU.to 1.35 80.5 169.05 2.10 55.6%
6 Copper Fox CUU.v 0.375 402.96 90.67 0.225 -40.0%
7 Western Copper WRN.to 0.76 93.68 89.00 0.95 28.9%
8 Panoro Minerals PML.v 0.35 204.71 78.81 0.385 10.0%
9 Hot Chili Ltd HCH.ax 0.425 333.11 73.28 0.22 -48.2%
10 NovaCopper NCQ.to 1.60 53.4 65.15 1.22 -23.8%
11 Curis Resources CUV.to 0.57 74.79 58.34 0.78 36.8%
12 AQM Copper AQM.v 0.11 139.05 15.30 0.11 0.0%
13 Cordoba Min. CDB.v 0.45 31.88 13.71 0.43 -24.4%
14 Coro Mining COP.to 0.10 159.37 11.95 0.075 -25.0%
15 Oracle Mining OMN.to 0.27 49.03 8.09 0.165 -38.9%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg 6.66%
16

The overall basket average sits slightly higher than last week at a devilishly positive 6.66%.
Seven of the components made gains on
the week (AZC.to, NCU.to, PML.v,
The Copper basket 2014, weekly evolution
WRN.to, CUV.to, CDB.v, OMN.to), two 25%
were unchanged (LCC.v, AQM.v) and six
20%
went down (NGQ.to, RMC.v, CUU.v,
HCH.ax, NCQ.to, COP.to). Best moves 15%
came from Panoro Minerals (PML.v up
10%
28.3%) and Western Copper & gold
5%
(WRN.to up 9.5%), while the worst of the
bunch were Hot Chili (HCH.ax down 0%
20.0%) and NGEx Resources (NGQ.to
down 9.5%).
Copper market prices had another positive
week, rallying to the $3.13/lb to $3.15/lb level early and
staying there. Things are close to back to where we were
in early 2014, the drop under $3/lb now apparently a
time to refer to in the simple past tense.
Another down-spike in world copper inventories to report
and by the looks of the way copper prices reacted again
during the week, the world is cottoning on to this
dynamic. Last week’s bullet point presentation of the line
items was easier to read so we’ll stick with it,. Therefore:
• Total stocks dropped by 11,094 metric tonnes
(mt), that’s 3.5% to stand at 303,850mt. As we’ll
note the individual scorecard below, this time the
downmove was based in changes at the LME.
• Shanghai Futures Exchange copper warehouse inventories rose by 6,432 metric tonnes
(mt), rebounding 7.1% from the recent big drops to finish the week at 97,012mt.
• LME copper warehouse inventories saw the biggest drop last week, moving down
dropped by 17,250mt, or 8.3%, to finish at 191,075mt.
• The Comex warehouses copper inventories dropped by a small 326mt, or 2.0%, to
finish the week at 15,763mt.
The bottom line is that the inventories signal, the same as just about every week since the
Chinese New Year, is bullish. After hearing “China’s going to crash!” or “China’s going to
crash...and this time I mean it!” for year after year and then looking back and seeing how
China’s GDP growth rate might have edged down from 9% and bits to 7% and bits, but just
continues to grow and grow, it becomes very difficult to believe these wolf-callers in the
market. In fact, they seem to be at their shrillest just at the moments that best serve the
country, which is unlikely to be a coincidence. I’d agree that it’s a tough country to call or
predict and that I personally find it nearly impossible to decipher at any given moment even
after reading people who know about the place. However, there’s one simple and time-
honoured rule that can be applied which is “keep dancing until the music stops”. The band is
still playing in China and it’s playing loudly
Now for updates on a few of our featured basket stocks:
Reservoir Minerals (RMC.v): The ongoing reason why I’m still not long here is that RMC isn’t
defining any direction on decent volumes. I’m looking for that mythical cheap entry spot and
will wait patiently on it. Shopping listed.
17
ht5naj ht21 ht91 ht62 dn2bef ht9 ht61 dr32 dn2ram ht9 ht61 dr32 ht03 ht6rpa ht31 ht02 ht72 ht4yam ht11 ht81
source: IKN calcs

NovaCopper (NCQ.to): Meanwhile, the other copper exploreco that interests me, NCQ,
should be very close to announcing its 2014 round of financing. The price is still drifting at new
low levels, a sign in itself that a deal is near because it’s very much a buyer’s market. Until the
financing is announced it’s easy to stay on the sidelines, once it’s announced I’ll be taking a
close look and making a more pro-active decision. Shopping listed.
Panoro Minerals (PML.v): That’s an interesting five day chart, as even though there was no
news from the company and light volume PML stuck in a rally and is now in the green for the
year. The annual chart stuck to the right shows the context, as PML hasn’t been this high since
November last year.
The last thing we had from PML was its annuals in late April which noted a reasonable $10m
treasury position and $9m working cap, enough to see it through this year (limping) if
necessary. PML may have caught a bid on the improved state of the copper market, but it’s not
one to chase. Or own long-term, for that matter.
Augusta Resource Corp (AZC.to) (AZC): On Friday, Hudbay extended its offer to buy our
AZC to May 27th, another step towards the mid-June showdown date when the shareholder’s
rights protection runs out and we’ll get to see who wins this fight.
As for its week, AZC was going well until Friday when it dropped off a small cliff on volume, as
seen in the chart. The reason seems to be the same thing alluded to by HBM in its post-close
NR Friday evening (7) so let’s just quote from that:
Hudbay continues to monitor developments with respect to Augusta's applications for
permits required for the Rosemont project. Hudbay is assessing, among other things,
the potential implications of a letter dated May 13, 2014 that the U.S. Army Corps of
Engineers (the "USACE") is reported to have sent to Augusta. The USACE letter
advises Augusta that, in the context of its Clean
Water Act section 404 permit application,
Augusta's proposed compensatory mitigation is
inadequate and USACE staff is changing its focus
from compensatory mitigation to preparing a
final permit decision.
By the time that was sent, the word was already
round town that AZC is still having permitting
problems. This is supposed (probably rightly) to
affect any potential third party White Knight and
saw the share price drop back to a place without
sweetener bonus the the HBM offer.
18

The Low Cost Producer Basket
After 20 weeks, the Low Cost Producer Basket is showing a 8.83% 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 36.39 34.99 -7.3%
2 Goldcorp GG 21.67 812 19.97 24.59 13.5%
3 Barrick ABX 17.63 1000 16.62 16.62 -5.7%
4 Newmont NEM 23.03 497.87 11.94 23.99 4.2%
5 Silver Wheaton SLW 20.19 357.39 7.64 21.37 5.8%
6 Franco Nevada FNV 40.74 147.01 7.08 48.18 18.3%
7 Agnico Eagle AEM 26.38 173.43 5.62 32.39 22.8%
8 Pan American PAAS 11.70 151.41 2.01 13.30 13.7%
9 B2Gold BTG 2.02 651.4 1.71 2.63 30.2%
10 First Majestic AG 9.80 117.02 1.07 9.11 -7.0%
all prices in U$, using NYSE ticker prices Portfolio avg 8.83%
The second week running that saw eight of our components show losses (ABX, GG, NEM, SLW,
FNV, AEM, BTG, AG) and just two
gainers (FCX, PAAS), though this The Low Cost Producer Basket: Weekly performance and
week the median loss was smaller comparative to GDX control
35%
and things such as a 3c drop in
30%
Newmont (NEM) or 12c in Agnico
25%
Eagle (AEM) shouldn’t have many
20%
people losing sleep. The worst drop
15%
was from B2Gold (BTG), down 4.7%
on the week and now 20% or so 10%
down from its best point this year, 5%
which is interesting. B2 reported its 0%
quarter but as the main financial
metrics were already telegraphed to
the market by its earlier production
report it didn’t have such a great effect either
way. Perhaps then the market was slightly
disappointed with the lack of new news from
the company, but I feel it’s more likely we’re
seeing B2 dragged down due to its smaller
size compared to other gold producers on the
list. It’s recently been picked up by a new set
of analysts (including a Goldman Sachs report,
which sticks it now firmly in the mid-tier
league) but we’re still under $2Bn market cap
on this name; from being a big fish in a small
pool, B2 is now small fish large pool. Maybe
it’s showing.
Regional politics
Peru: The Aymara Puno region reacts to the Bear Creek (BCM.v) Santa Ana news
On Saturday, leaders of the communities in the region of South Puno where Bear Creek
Mining’s (BCM.v) Santa Ana project is located met to decide on their official position as regards
the news last week that BCM has apparently, with a few official papers left to be processed, got
19
ts13ceD ht21 ht62 ht9 dr32 ht9 dr32 ht6rpa ht02 ht4yam ht81
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 ht4yam ht11 ht81
source: ikn calcs, NYSE/Nasdaq data

back its project concession. I’ll translate a little from this local news report (8) as it gives a good
idea of how the news has been received:
If President Ollanta Humala does not respect the Supreme Decree 032 from
2011 and the judiciary insists on the handing back of the Santa Ana mining
concession to Bear Creek, the Aymara peoples of Kelluyo, Zepita, Huacullani
and Pisacama will march to the main square in Lima”, said Kelluyo
townsperson Olegaria Choque de Laura.
The Kelluyo communities live from agriculture and livestock farming and the
people from the local town drink water from the local supplies: these sources
of water will disappear if Santa Ana goes into operation”, he said speaking in
Aymara on the radio program “The Peoples Speak” on Pachamama Radio,
broadcast from the area bordering Bolivia.
It continues in the same vein. There are other examples of reaction such as this one (9) where
Walter Aduviri, organizer of the 2011 protests that culminated with the Alan García government
anulling the BCM contract, ended up in a bad tempered argument with the local radio station
because they let the local spokesperson for BCM have his say on the air before they got to him.
Or this one (10), where he stated the local position is to disregard completely the ruling handed
down by the court in Lima. Plenty more besides.
Santa Ana will not happen and I’ll repeat it 1,000 times if necessary until you get the message.
To think of some kind of rough equivalent, it would be like passing a law that forced all Amish
people in the USA to use motor vehicles and forbids any other form of transport, then trying to
apply the law in an area where there are only two main roads in and out where thousands of
people would show up to oppose you if you tried to enforce the law using police or troops. And
these people are nowhere near as passive as Amish. You’d then get all the “these people are
backward” and “their leaders insist on dragging them back into poverty” and “why don’t they
embrace development”, while all the time the Amish/Aymara would just stand there, look you in
the eye and say “no”. Not going to happen, ever, and the sooner people from the elsewhere
start to realize that can no longer force projects such as this one onto a region, area or people
if they don’t want it, the better it will be for everybody. The Aymara don’t want your mine, your
money, your development. Get used to the idea.
Colombia: One week to go in the President election campaign
It’s been one of the dirtiest and most negative campaigns in recent memory, and that’s saying
something when it comes to Latin America, and we’re now in the last seven days before the
Presidential election in Colombia. Up to maybe a month ago it looked as though sitting
President Juan Manuel Santos was cruising, but in the last weeks the right wing candidacy of
Oscar Iván Zuluaga (backed by ex-President Álvaro Uribe and widely seen as a stand-in for the
two-time president of Colombia) has been up significant ground due to a combination of
challenging the present government’s policy of negotiating with the FARC-EP and ELN terrorists
and finding some significant negative dirt on members of the Santos government and campaign
(the details don’t really matter unless you care for the inner workings of Colombian politics, if
you’re Castilian-challenged and like to know more check out the English language website
Colombia Reports (11) which does a good job of covering the country). However, the Santos
team hasn’t been backwards about using negativity against its main rival and this weekend sees
Zuluaga wrapped up in a pretty serious and image-affecting scandal (12) about hacking secret
information on the state of talks in La Habana Cuba between the two sides which makes
Zuluaga look pretty bad (and directly contradicts an earlier denial of his).
However, the main piece of news as this campaign wrap up is that the terrorists and the
government have, with convenient timing, managed a breakthrough in the talks as regards
drug cultivation and narcotrafficking. It comes at exactly (and to the minute) the right time to
give Santos and his “Give peace a chance” message and cuts to the bone of the whole election
campaign. It may be due to the government “timing” (aka rigging) the talks progress to suit its
electoral purposes, or it may be the FARC realizing that Santos might not win if they don’t show
20

real progress and then they’d be back to a Uribe-backed government’s anti-negotiation policy
and guerrilla warfare, so they need ot show the world real progress. But however it came
about, the news is a significant breakthrough for the pro-peace people. Here’s how AP started
its reporting on the event (13):
HAVANA (AP) - Colombia's government and main rebel group on Friday
announced an agreement to jointly combat illicit drugs in the South American
country, which was long the world's leading cocaine producer.
Under the accord, the Revolutionary Armed Forces of Colombia, known as the
FARC, agreed to divorce itself completely from the drug trade.
With the end of campaign rallies and then a quiet period before the weekend vote, we’re now
at the climax of the process and the question, as succinctly put to me by a Colombian
acquaintance this weekend, is “Which fear will win the election: The fear of war, or the fear of
peace?” It’s nicely phrased, because if Colombia decides that there’s real hope for a lasting end
to the FARC terrorism (or civil war as they prefer, but this people are just terrorist shits
basically and lost their ideological pedestal many years ago) via the negotiation table, Santos
will likely win out (in a second round run-off). If Colombia decides that the FARC can only be
neutralized by force, then Santos is in trouble.
It’s going to be an interesting round one next Sunday, because of the late negativity from both
sides, the rise in the polls of Zuluaga and the apparent talks breakthrough that came this
weekend and isn’t reflected in the latest polling figures. For what it’s worth, I still firmly believe
Santos is in the driving seat in this election and will win his round two run-off and if you have
exposure to Colombia, that’s the result you’ll probably want to see too. The Uribe-esque
hardline against terrorism may sit well with outside political ideology, but a Zuluaga win will see
us return to a hot war and political risk is bound to rise.
Market Watching
Aargh. Here was where everything went wrong this evening, but instead of leaving it blank I’m
going to repeat the analysis on Gold Resource Corp (GORO) that went out Monday evening, for
reference purposes.
Gold Resource Corp (GORO): Flash update briefing
May 12th 2014
This abridged document goes into a little more detail on the call in the cover mail tonight. The
three main parts to the equation are:
• Revenues, which were around $2m higher than our model. Slightly more than
expected, but not that big a difference.
• Costs, which were much lower than expected. GORO has either put in an anomaly of a
quarter or it’s managed to make a big difference to its running cost profile in a short
period. As a shorter, it pays to give the benefit of the doubt to the company,
congratulate it on a big improvement in financial terms and assume it will continue.
• Treasury, which has risen. The rise seems slightly artificial, because working capital
didn’t move up, but even that metric was better than the continued fracturing of
liquidity we’ve seen in previous quarters and shows that as long as the company can
repeat its 1q14 performance, GORO has found a level at which it is self-sustaining for
the intermediate term at least.
21

The combo of these three mean that GORO will likely rebound in the days to come. I had a
feeling we’d see a better quarter from GORO in Q1 and said as much in yesterday’s weekly, but
I didn’t expect it to be this positive. I’m therefore going to cover my short early
tomorrow morning and walk away with my profit. This will also add liquidity to my
portfolio and allow me to do other things with my cash. Here come details.
First up revenues, which look like this below. Note that the main focus is on the 1q14 numbers,
with preliminary model adjustments for the rest of 2104 already in, but they may need some
fine tuning in the days and weeks to come:
GORO: Revenues
45 42.311
40 36.665 36.49 38
35 30.7 31.152 31.4 32.64
29.405
30 27.939 26.66 27.408
25
20
15
10
5
0
22
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 tse41q2 tse41q3 tse41q4
U$m
source: company filings, IKN ests
Over $31m in revenues was a good
performance from the company, largely
due to it booking its silver sales at
$20/oz for the quarter (our model
assumed $19/oz, after charges).
Here’s the costs breakdown chart below
and again, the focus of attention is on
the 1q14 numbers.
We expected (see last two editions of
Weekly) to see GORO drop the
construction and development charge
from its P+L due to the now published GORO: Tonnage mined per quarter
reserves report dated December 31st. That 140000
took around $5m from the company costs 120000
profile, but of more interest is how baseline 100000
COGS (in red) came in lower than previous 80000
quarters at $14.966m, this despite mined 60000
tonnages rising substantially to 104,349mt 40000
(over 20k tonnes higher than the previous
20000
quarters).
0
Put those two (revs and costs) together
along with those tonnages and this is what
comes out:
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 tse41q2 tse41q3 tse41q4
GORO: Costs breakdown
36
32
28
24
20
16
12
8
4
0
tonnes per qtr
source: GORO data
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 tse41q2 tse41q3 tse41q4
U$m
cons+dev
exploration
G&A + stock comp
COGS
source: company data, IKN ests

GORO: Revs/tonne vs True Cost/tonne
400
360
320
280
240
200
160
120
80
40
0
23
31q2 31q3 31q4 41q1 tse41q2 tse41q3 tse41q4
U$/tonne
revs per tonne
true cost per tonne
source: company data, IKN calcs
The 1q14 result here is a big improvement on previous quarters. Revenues per tonne mined are
down slightly (mostly due to lower average grades) but “true costs” have dropped sharply. Most
of that is because construction and development is now capitalized, but some is the impressive
trimming of COGS noted above. The combo means GORO is a profitable mine for once. Here’s
the same data put in absolute quarterly dollar terms:
GORO: Revenues vs "true costs"
45 42.31
40.62
40 37.78 35.44 36.49 37 3 . 6 9 . 3 00
3 3 0 5 30.01 27.94 29.96 26.6 2 6 7.4329. 3 4 1 1 .29 27 2 .4 6 1 .77 31.15 31.4 2 0 9.50 32.6 3 4 1.00
25 20.66 20.51 22.52 22.93 21.53 19.27
20
13.94 15.91 15.27
15
11.28
9.13
10
5
0
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 tse41q2 tse41q3 tse41q4
U$m revenues
"true costs"
true costs = prod costs + deprec&amort+ accretion + G&A + stock based
compensation + expl expenses + construction & development
For what it’s worth, despite the higher tonnage sales of gold and silver came in only very
slightly above previous forecasts, due to a lower head grade
GORO: Gold sold, per quarter
12000 11045
10000 8953 8586 8744 9205
8000 6668 7119 7287 7297 7683 7629
5774
6000
4000
2000
0
Here’s one of the charts that follows the revenues mix for metals and shows how silver is still
the predominate metal at GORO, covering nearly 45% of sales. Gold is responsible for a touch
over 32% of sales, the rest is from the base metals by-products.
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 tse41q2 tse41q3 tse41q4
Oz Au GORO: Silver sold, per quarter
1200000
1018650
1000000
800000
828376 863152
755746741757 686421
766535806438148875
603426599501
600000
417932
400000
200000
0
source: company filings, IKN ests for FY14
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 tse41q2 tse41q3 tse41q4
Oz Ag
source: company filings, IKN ests for FY14

GORO: Gold and silver gross revenues, per quarter
30
25
20
15
10
5
0
24
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 tse41q2 tse41q3 tse41q4
U$m
Au revs
Ag revs
Credit revs (Cu/Zn/Pb)
source: company filings, IKN ests for 4q13
Anyway, to cut a long story short, these next two charts are how revenues and profits pan out
compared to recent quarters. The first one outlines gross profits again:
U$m GORO: baseline mine financials
45 revenues
40 COGS
Gross profit
35
30
25
20
15
10
5
0
1q12 2q12 3q12 4q12 1q13 2q13 3q13 4q13 1q14
source: GORO data
This second one shows how cash flows through the books and to the bottom line
GORO: Evolution of profits
15
13
10
8
5
3
0
-3
-5
21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1
source: company filings
srallod
fo
snoillim
op profit
pre-tax profit
Net Income
That’s a 13c EPS for the quarter and that’s a lot better, any way to care to cut it. Even without
the cons+dev removal, GORO would have returned positive figures and with it, perhaps $5m
gets added to the bars.
Over at the balance sheet, this chart follows the treasury position which jumped ~$4.5m in the
quarter to stand at $19.457m.

GORO: Cash and ST
60
50
40
30
20
10
0
25
01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 tse41q2 tse41q3 tse41q4
source: company filings, IKN ests for 4q13
It’s slightly skewed, because GORO saw other things (lower “other current”, about $1.5m added
to current liabilities) that allowed cash to take a bigger chunk of working capital than usual.
Working cap in fact dropped a sliver as seen below, but as noted in the last two editions of the
Weekly, the acid test for this company was to see whether it could add cold hard cash to its
structure this quarter and it’s done just that. I could easily pick at the method but the result is
undeniable, GORO has put in a good quarter.
80 GORO: Working Capital per qtr
70
60
50
40
30
20
10
0
01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 tse41q2 tse41q3 tse41q4
source company filings, IKN ests
srallod
fo
snoillim
Conclusion
I’m still utterly unconvinced by this company and this strong 1q14 may turn out to be an
operational flash in the pan. Also, its reserves position has now shown the world that it’s a
company built on a thin base. However, I also know an greatly improved operating quarter
when I see one and I know that the desire to be short, at least for the near-term, has
disappeared after reading this 10-Q. Therefore I’ll cover tomorrow morning and walk away (for
the umpteenth time, a winner after shorting this stock). As for the price at which I’ll cover, I
note that post-bell GORO is currently up in A/H trading by 5.7% and that looks fairly reasonable
to me at this time. If I can cover and walk at U$3.70 or so I’ll consider that a fair result, but
even at $4 I wouldn’t bat an eyelid about profit-taking.
Conclusion
IKN262 is done, we end with bullet points:
• I’ve had all sorts of machine trouble today Sunday, which explains the big gap at the
end of today’s report.
• GoldQuest Mining Corp (GQC.v) is the new buy. It’s speculative and as such may not be
to the taste of everyone here, but I believe its upside potential is tempered by a

minimal downside risk from today’s levels, plus its newsflow will be good for the next
few weeks.
• Bear Creek (BCM.v) turned out surprisingly well last week and I’m glad to have made
my profit and left.
• Gold Resource Corp (GORO) is also closed now, with last week’s much better quarterly
tipping the balance. There plenty of reason to suspect that quarter was padded, but I’m
not going to get picky as the company firmly hit the reasons I needed to see in order to
cover and leave the short position. And no matter if a big chunk of the potential win
was shaved away, it’s still a decent win and maintains my 100% track record for
shorting that stock.
The top long-term pick is Rio Alto Mining (RIO.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.goldquestcorp.com/images/pdf/presentation/GQC_CORPORATEPRESENTATION-MAY2014.pdf
(2) http://incakolanews.blogspot.com/2012/10/those-early-on-goldquest-gqcv-story.html
(3) http://incakolanews.blogspot.com/2012/11/goldquest-mining-gqcv-wwld.html
(4) http://finance.yahoo.com/news/gold-corporation-releases-report-la-130000951.html
(5) http://incakolanews.blogspot.com/2014/05/hochschild-hocl-dumps-more-gold.html
(6) http://incakolanews.blogspot.com/2014/05/heres-expanation-of-how-weak-mining.html
(7) http://finance.yahoo.com/news/hudbay-extends-offer-augusta-204425197.html
(8) http://www.pachamamaradio.org/18-05-2014/aymaras-de-kelluyo-zepita-huacullani-y-pisacoma-marcharan-contra-
bear-creek.html
(9) http://www.pachamamaradio.org/15-05-2014/walter-aduviri-perdio-los-papeles-en-rechazo-al-proyecto-santa-
ana.html
(10) http://www.pachamamaradio.org/16-05-2014/aduviri-afirma-que-haran-prevalecer-decreto-que-cancelaba-el-
proyecto-santa-ana.html
(11) http://colombiareports.co/
(12) http://www.bluradio.com/64961/video-revelaria-estrecha-relacion-entre-hacker-andres-sepulveda-y-zuluaga
(13) http://m.apnews.com/ap/db_306488/contentdetail.htm?contentguid=skNHjXhV
Appendix 1: Flash update dated Tuesday May 13th
Goods Monday evening, 7pm local time.
GORO reported this evening and the company has put in a good quarter. Even though I'm still very skeptical about the
26

company's future, the right move at the moment is to cover the current short position and take profits. I intend to do just
that tomorrow morning.
Please see the attached report for more detail on this call and analysis of the main events of the company's 1q14 filing,
if required.
Best, O
Appendix 2: Flash update dated Wednesday May 14th
Good Wednesday morning, a few minutes before the open.
I debated with myself last night whether or not to send out a Flash update on Bear Creek (BCM.v) and its news...
http://finance.yahoo.com/news/bear-creek-announces-favorable-judicial-002500570.html
...and this morning several mails received on the subject have decided the issue, so here we are. In a nutshell, BCM
has received a Peru court ruling that gives the Santa Ana concession back to the company. The government could
appeal the ruling, but that's unlikely to happen in my opinion (briefly, it was taken away by the President Alan García
government, there are obvious political points to be gained by Ollanta Humala if he sides with Bear Creek). It's still not a
totally closed deal and will need a government executive decree to see the nation comply with the court decision, but
overall we can fairly safely say that BCM has got its project back at some pojnt
What's left to decide is:
1) Will the government pay any compensation to Bear Creek? Answer: unlikely but you never know, BCM may get its
legal fees paid or something.
2) When will BCM formally get back Santa Ana? Answer: Best guess a few weeks time and the press will make a
positive fuss in both Peru and in N.Am.
3) Will Santa Ana be moved ahead, get developed and become a mine? Answer: if you've read my thoughts on BCM,
that project and the people around it, you'll know exactly what I think on the subject. BCM will face very very stiff local
opposition to this project, be in no doubt.
We'll hear more and get the company opinion on things in the Conf Call this morning...
http://finance.yahoo.com/news/bear-creek-mining-announces-conference-010000714.html
...and i'm in no doubt that Mr Swarthout will have a different opinion to mine on point 3) above. He's been wrong for
years on the subject so that's not likely to change today. We also have trade resumption today, which is good and
brings me to the real subject of today's mail. I'm long BCM as a trade on this Santa Ana pol risk event and therefore, if
offered a reasonable difference in the days ahead (i'm cost avg $1.63) i'll take the offered proifit, sell the stock and move
on. That might happen on the back of last night's news, it might happen once the Peru govt gives its formal agreement
to the ruling. I don't know how the timing will pan out, but I do know this is a trade and I'll take profit at $2 or above
(preliminary target) if offered it.
Though like you, i'm watching to see how this whole subject unfolds. If BCM doesn't move much in the horus and days
ahead I'll be content enough to sit on the trade until a better price appears.
Appendix 3: Flash update dated Wednesday May 14th
Further to the mail sent pre-open: I don't think this mail is necessary but I'm sending it anyway, for full disclosure
purposes after the previous mail's trade call.
For what it's worth, I stuck my BCM on a couple of asks and they were sold almost immediately, which surprised me
and left me with that "Oops, may have sold way too early" feeling that most of us have come across at some point.
So there we go, that's now two trades closed along with the GORO short covering yesterday. Next job is to decide what
to do with the new influx of funds (not a bad situation, must be said)
Enjoy your Wednesday.
Appendix 4: Flash update dated Thursday May 15th
Good Thursday evening... well in fact it's Friday morning here, just gone midnight.
After an evening of rechecking things, I've decided to open a position in Goldquest Mining Corp (GQC.v) (GDQMF) and
this short mail is to let you know.
The position will start small.
I'll be happy enough about taking 29c or 30c, 31c at a pinch but no more than that (and I repeat, I'm starting this small).
The position can build at 29c and 30c in the weeks to come.
GQC will be the subject of the main fundies report in IKN262, this Sunday.
And that's more than enough numbercrunching for one evening, I'm off to bed.
27

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
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
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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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