IKN #282Premium

The IKN Weekly
Week 282, October 5th 2014
Contents
This Week: Adding to a position, Gold bugs blame the dollar, Toughing it out.
Fundamental Analysis: Adding to Amerigo (ARG.to).
Stocks to Follow: Overview, Amerigo (ARG.to), Reservoir (RMC.v),Timmins (TGD), First
Majestic (FR.to) (AG), Rio Alto (RIOM) (RIO.to), Minera IRL (IRL.to), Focus Ventures (FCV.v),
Dalradian (DNA.to).
Copper Basket: Overview, Cordoba Minerals (CDB.v).
Low Cost Producer Basket: Overview,
Regional Politics: Quickly on the Brazil Presidential election, Quickly on Peru
regional/municipal elections, Quickly on Bolivia’s election next week, Copper producers in Chile:
In trouble under lower prices, Peru and Ecuador may work together on border mining projects,
Mexico: Guerrero State political risk.
Market Watching: Bear Creek Mining (BCM.v): I’m not buying, A word on Buenaventura
(BVN), Trevali (TV.to): No trade yet, Precipitate Gold (PRG.v) again shows the poor nature of
the exploreco market.
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
Adding to a position
The normal top-of-the-shop headsup for purchases. It’s not a big add in strict monetary terms
because I’m aware of the falling knife catch potential, but all the same it’s the right value laden
price, the right type metals exposure, the reason i didn’t buy a full position in this stock at the
getgo, I’m not going to let the opportunity pass by. The add is to Amerigo Resources (ARG.to)
and it’s happening this week, more on that call below.
Gold bugs blame the dollar
A new trend has seen me inwardly laughing hard is the amount of articles coming from the
hardcore gold rahrah brigade on the way the dollar is to blame for gold’s weakness. To pick one
at near random (1) “Strong Dollar Pressure Gold” by Mary Anne and Pamela Aden (though let’s
be clear that picking on the Aden sisters is slightly unfair as there are dozens of other suspects
from which to choose). After all, these are the very same people who’ve insisted on the
impending death of the dollar as the reason you need to hoard gold, but when the trade goes
the other way to their collective forecast it’s not their fault, some nefarious force is at work that
bends the true world of money out of shape, the dollar should be weaker but it’s being propped
up by...them...and it’s just not fair. OK, exaggerated, but one thing that can’t be overstated is
the complete innocence the ship of fools will have towards their bad calls and your lost money.
Toughing it out
“Time passes. Listen. Time passes.
Come closer now.”
Narrator 1, Under Milk Wood
1

By Dylan Thomas, 1954
Let’s start by being frank; I haven’t played this September downturn well. That I know because
the quickest glimpse at the development of the ‘Stocks to Follow’ list shows that I sold just two
positions in the month of September and during last month’s nastiness even managed to add a
long in the shape of B2Gold (BTG) (BTO.to), which is now 5% cheaper than the moment I
bought it. Somebody with a sharper brain for the movements of metals, the miners and the
juniors would have sold them all in August and be 100% in cash today, that’s as easy and as
obvious as analysis gets. Statement made, but as it’s more difficult to affect the past than the
future it’s time to look at the scene as stands today.
Last week wasn’t much fun for a net long in juniors such as I, but Friday was different. I’d
already made the decision to sit on my hands for as long as the market was in bearish mode,
so the watching briefs on copper plays and on Trevali (see IKN281) remained just that. But
come Friday we had the acceleration of selling and plenty of reports of that selling being of the
distressed variety due to widespread margin calls in the mining sector. The backdrop counted
too, with another strong US BLS jobs report used as reason (excuse) to sell gold down another
notch but the one that really caught my eye, got my greed glands flowing and had me slapping
my proverbial hand away from the trade button several was the speculative downing of copper.
This is where fundamentals meet market momentum, and I’m keenly aware that this has been
one of my weakest points as an investor/trader (not just a junior mining investor, but the whole
big world of capital markets). Yes, copper should move up under a healthier world economy,
but there’s no reason for it to move up, on demand and at the right moment for investment
satisfaction under my or anyone else’s orders just because a group of us, Spock-like, remark
that it’s illogical Captain.
I therefore stayed away from trading, despite the margin calls making the type of dump
situation that brings rebounds and despite the copper not acting in just the way I’d like it,
pretty me. I was tempted and slapped my proverbial hand away from the trade button several
times, but in the end didn’t do a thing and as it turns out results of my inertia were mixed:
• I saw Gold Resource Corp (GORO) trading at U$5.20 or so that morning and was
tempted so short it, but didn’t. It would have been a near 10% win in the space of just
a couple of hours.
• The dive in B2Gold after its official closure of the Papillon (ex-PIR.ax) deal had all the
look of the final washout liquidity from people wanting out of equity and into cash. The
chance to add at $2.10 came and went on a deep spike.
• I considered adding to both Reservoir Minerals (RMC.v) and Amerigo Resources
(ARG.to) on Friday to take advantage of the strange copper action and the general fear
that was sucking down the good with the bad. On that one the result looks moot,
because the same prices are available now.
Those were the main options considered (I’m staying well clear of extra silver exposure) and
the final decision was to wait, sleep on it, think them over. The result is that I’m going to feed
my desire to trade with just one smaller addition, that of ARG.to, but on the other hand the
whole of last week reinforced my wider decision to tough out a rocky period for mining
companies and aside the two abovementioned minor sales the purchase of BTO and today’s
add the ARG.to that’s what I’m doing. For sure that 20:20 hindsight shows that it’s been
rougher than I expected (again, would have sold RIO and others where they were) but that
what hindsight does. We live the present moment, a moment when the chartists are now all
pointing to the (quasi-legendary it seems) U$1,180/oz line in the sand as some sort of moment
of truth for gold, a crisis-pivot-key-floor-other-clichés-I-forget moment that will decide gold’s
fate for the next five generations. Or something.
2

No it won’t. I avoid them like the plague these days, but there are rare occasions when I’m still
comfortable about using an absolute for a future forecast; gold isn’t going to go out of fashion,
ever. What its price does in the next days and weeks is more of a mystery, but we’re not going
to get to the point of 18K Twerking Miley figurines just yet.
PS: After writing this intro, Sunday came around and this piece in today’s WaPo (2) written by
Barry Ritholtz came before my morning reading eyes. It’s particularly apt because it touches on
many of the themes that lie behind the “what I thought about this week” statements above.
Ritholtz is at his most eloquent when he gets on his pet theme of market psychology and this
one is right in that furrow, so I strongly recommend you read the whole thing, but the line right
at the end is good enough as both teaser and statement with which I can agree:
"The reality is, when it comes to risk/reward decisions, you are just not built for it."
Take a few minutes to read the whole thing, though.
Fundamental Analysis of Mining Stocks
Adding to Amerigo Resources (ARG.to)
This is going to be the shortest reasoning for a buy or addition ever on The IKN Weekly, the
reasons being:
• I don’t think many of you will care much, or follow me in.
• Just about all the reasoning and work hasn’t changed since the detailed report on
ARG.to in IKN271, July 2014
• The decision to add is firmly based upon your author’s bullish position towards copper,
that one’s been raked over plenty of times already.
• It’s also a straightforward decision based on lower share price, the easy and value-
laden entry point, and the opportunity to meaningfully average down. This part was
always the plan with the ARG.to position and I’d been wondering if an opportunity
would arise. But now it has and I’m going to take it.
And that’s nearly everything that needs to be said, apart from a couple of very slight
adjustments made to the estimates and tables as seen in IKN271. Back then I set the operating
cash cost per Lb copper at $2.30, but after several conversations with people close to the ops
I’ve come to believe that’s setting things too high for the quarters to come. I’m still keen to err
on the side of caution and therefore won’t drop things down to the levels that are possible for
ARG.to (there’s reasonable talk of $2/lb), but some reduction makes sense and so I’m moving it
down a dime to $2.20.
The rest stays as per, so here’s how the operational margin chart now looks:
ARG.to: Ballpark Calculation on Future Margin Leverage on Operations
Cu selling price $/lb cash cost 9% for "middlemen" DET royalty gross margin $ % gross margin
2.50 2.20 0.23 0.34 -0.26 -10.50%
2.75 2.20 0.25 0.37 -0.07 -2.50%
3.00 2.20 0.27 0.41 0.13 4.17%
3.10 2.20 0.28 0.42 0.20 6.53%
3.25 2.20 0.29 0.44 0.32 9.81%
3.50 2.20 0.32 0.47 0.51 14.64%
3.75 2.20 0.34 0.51 0.71 18.83%
4.00 2.20 0.36 0.54 0.90 22.50%
source: IKN calcs from ARG.to and other data
This means there’s some positive cash flow even at $3/lb from ARG now. As for the table used
3

to project leverage to copper price, that’s also been changed to put in lower copper
assumptions, what with the slide in prices. This is how that now looks:
ARG.to: Sample leverage from copper price upmoves on quarterly earnings
Copper Revs: 10Mlb Cu True cost avg pre-tax Qtr EPS (cents)
price $/lb & Mo credit ($m) per quarter ($m) margin ($m) at 172.65m S/O
2.50 24.14 28 -3.86 -2.2
2.75 26.42 28 -1.58 -0.9
3.00 28.70 28 0.70 0.4
3.25 30.97 28 2.97 1.7
3.50 33.25 28 5.25 3.0
source: IKN calcs from company data
Things are positive at $2.75/lb (but they’re probably survivable), however we’re still at the right
place on the price scale to offer decent share price leverage to copper price improvement.
The risk to this is also obvious of course: That I’m wrong about copper and it goes sharply
South instead of rallying back to the prices I’m looking for at the end of this year.
Stocks to Follow
Well, wasn’t that fun?
Doing the minor moves is easiest, so we note the lone weekly winner (GQC.v) and the other
stock that remained unchanged (COP.to). All other positions returned a week over week loss,
with the biggest losers among the largest held positions, starting with Reservoir Minerals
(RMC.v down 17.2%) and following on with Rio Alto Mining (RIO.to down 14.4%), Minera IRL
(IRL.to down 10.7%), First Majestic (AG down 9.9%) and Timmins Gold (TGD down 9.8%).
There are currently 14 open positions on our ‘Stocks to Follow’ list, one less than our self-
imposed maximum and there’s now a distinct lack of green ink on the table, too. Just two of
our open positions remain in the plus column, with one other unchanged since inception. The
other eleven are red.
4

Reco Current
company Ticker this week Avg Price date PPS Gain/Loss% Notes
Top Picks
Rio Alto Mining RIO.to hold/buy C$2.30 07-apr-11 C$2.38 3.5% Top pick, $3.30 tgt June 15
Recommended long positions (in current order of preference)
Timmins Gold TGD hold U$1.38 09-apr-14 U$1.19 -13.8% $2 tgt, holding thru
Minera IRL IRL.to spec buy C$0.27 22-jul-12 C$0.125 -53.7% Waiting for financing
B2Gold BTO.to buy C$2.32 12-sep-14 C$2.20 -5.2% Top value entry point now
Focus Ventures FCV.v spec buy C$0.23 01-jul-12 C$0.225 -2.2% tgt 50c, added, avged up
Reservoir Min. RMC.v hold/buy C$6.05 18-jun-14 C$4.18 -30.9% Big deposit, M&A, Cu play
First Majestic AG hold/buy U$10.51 10-aug-14 U$7.35 -30.1% Main Ag pos., hit hard by dump
Dalradian Res DNA.to hold C$0.65 27-oct-13 C$0.68 4.6% Poss add, tgt $1.70
Amerigo Res ARG.to ADDING C$0.445 20-jul-14 C$0.37 -16.9% Small Cu play, adding here
NovaCopper NCQ.to spec buy C$1.05 09-apr-14 C$1.05 0.0% small Cu play started well
Goldquest Min. GQC.v hold C$0.26 27-oct-13 C$0.165 -36.5% looking for a reasonable out
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.58 -49.6% solid biz model, LT hold
Recommended short positions
None at moment
Smaller/Riskier
Coro Mining COP.to spec buy C$0.125 26-jan-14 C$0.055 -56.0% Cu spec play, can add
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.19 -32.1% small spec, new China JV
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% took profit
Bear Creek Min BCM.v may'14 C$1.63 23-mar-14 C$2.05 25.8% Took profit, sm near-term win
Eco Oro Min. EOM.to aug'14 C$0.48 22-sep-13 C$0.26 -45.8% sold small loser to make room
True Gold TGM.v sep'14 C$0.395 02-feb-14 C$0.41 3.8% M&A won't happen, sold
Santacruz Silver SCZ.v sep'14 C$1.04 26-jan-14 C$0.86 -17.3% silver/M&A spec, rel. small
2009, 2010, 2011, 2012 and 2013 closed positions in appendices below
Now for some notes on a selection of the above stocks.
Amerigo Resources (ARG.to): Adding: See above for the reasons. Meanwhile in last week’s
action, ARG (aaargh!) hit a low of 35c on
comparative raised volume (not massive, but
heavier than usual for this lightly traded issue)
midweek before value hunters moved in and
bought a few.
There are obviously no guarantees that I’m
buying this at or near its bottom, what’s more
I’m pretty sure that chartists will point to the
33c lows of late 2013 and tell me i’m moving
in too soon. It’s ok, I can handle both those
thoughts easily enough.
5

Reservoir Minerals (RMC.v): I’ve ben thinking long and hard about an addition to this one,
too. Checking back on the deal with FCX and the and the initial Cukaru Peki resource (with the
emphasis on initial, because chances are that there’s still far more come come). By way of
reminder, here’s the 43-101 compliant resource table which has a whole bunch of numbers
(they always do) but selected from the data, the deal frame and the current valuation at RMC
come the following bullets:
• 1.7 million tonnes of copper and 3.1m ounce of gold, giving a copper equivalent total of
3.5 million tonnes.
• That’s 7.7Bn pounds CuEq, give or take the loose change. And that’s at very high
grade, in what looks like an eminently mineable resource, all using reasonable and
conservative level parameters to define the resource.
• If we assume (as we must, FCX isn’t going to pass this up) that it eventually options in
to its full 75%, RMC holds 25% of that resource. That’s 1.92Bn lbs CuEq attributable to
RMC.v once FCX delivers the Bankable Feasibility Study. To that point, RMC gets a
totally free ride on Cukaru Peki.
• Current market cap for RMC.v is CAD$198.8m, which given the current forex is
U$177.5m. As RMC has an IKN estimated U$34m in treasury (virtually working cap),
we could also add the enterprise value to the mix of U$143.5m. That gives us an in situ
resource value of 9.2c/lb CuEq (or 7.5c/lb CuEq per EV), which isn’t the cheapest out
there of course but is still more than justified by the profitmaking potential of this
deposit.
The question mark over RMC today is the foot dragging between it and FCX (which is almost
certainly due to FCX) about the definition of the next stage of the exploration plan. Strategically
it probably favours FCX to delay things a while, slow-play its hand of you like, because the end-
game of this world class discovery is still most likely to be FCX buying out its 25% minor
partner and building its next big mine alone. RMC, along for the free rise under the terms of the
agreement, isn’t shipping cash on this wait (at least on this project, its 100% owned projects
are moving forward with limited early results so far, and they cost money) and isn’t ostensibly
harmed by the bigger partner’s delays, but the share price feels the pain and that’s our end of
the deal. The selling looks overdone already but that’s just my gut call, which is why I’ve
decided to wait it out at least a while longer before adding more RMC. It’s my biggest copper
position in cash terms and therefore I care, but I’m trying to teach myself some necessary
patience in the face of a nasty macro market.
Timmins Gold (TGD) (TMM.to) and First Majestic Silver (AG) (FR.to): Here are the two
I watched in order to put my brain into full hunker-down mode. These are the ones that get me
muttering “they’re good stocks, cheap, they’ll come back, now’s not the time to dump” under
my breath and point to my obvious weakness in the juniors sphere. But I’ll hold, all right.
Rio Alto Mining (RIO.to) (RIOM): We should expect RIO.to to announce its 3q14
production numbers this week coming. On that score, put me down for 55.5k oz produced in
6

the period if you’re running a sweepstakes. If it turns out that way, here’s how such a quarter
would be booked next to the last three years’ worth:
RIO.to: Gold production per quarter
80000
70551
70000
60000 55973 58081 56511 59157 55500
48467 47932 50830
50000
40000 36355
30548
30000
20000
10000
0
7
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 tse41q3
Oz Au
source: company filings
In the end it may be a couple of thousand ounces either side of my best guess and fact is, it all
gets to the point where you’re sweating the small stuff. Or small-ish stuff. What I’ll be more
interested in is any news or just some rough public announced guidance on costs, because
from what I hear the mine has managed to trim op-ex this quarter and will be able to show a
costs number that as good as just about anything in the mid-sized mining world.
Minera IRL (IRL.to): Tuesday’s NR from IRL (3) that basically said “no financing deal for
Ollachea yet” was expected, because IRL has previously said it would have a deal in place by
the end of the third quarter and as we’re now in 4q14, it’s only fair that they say something to
the effect. On contacting the company CEO Chamberlain said that they were “working very hard
on it”, but also noted that counterparties don’t always comply with their schedule. It’s notable
that this time their new guidance on any eventual deal isn’t as strong, with IRL saying they’ll,
“...provide an update regarding the terms of the Ollachea financing package near the middle of
November when we report our third quarter 2014 results”. Fair enough.
On the one hand it’s understandable. Times are not easy, the market showed signals of the
financing window beginning to open again, then September came along and windows (doors,
shutters, storm protection barricades) have been slammed shut again.
On the other, what we now have is a junior mining company that’s run by honest people that
aren’t trying to sell moose/llama pasture and are doing their best, under tough circumstances,
to move forward and actually get their flagship mine built, which is now easily lumped into the
pot with all the other sketchy shows and salary-grazing boards of directors because they
they’ve thrown out one too many promise that hasn’t been kept (they might say ‘firm forecast’
or something else, but things like “We’ll get it financed by end 3q14” is pretty clear to me).
Focus Ventures (FCV..v): FCV is back with a blob of red in the chart, and that’s because it
too was victim to the sucking out of liquidity and rush from the junior sector despite its rather
different circumstances. I asked company president Cass for his take and he was pretty calm
about the dip, my favourite phrase of his being “the asset will win through”. On that subject, I
asked for and was given a rough but useful roadmap of the things we should see from FCV in
the next two or three quarters, which goes like this:
• Met testing in order to cover PEA level (scoping study)
• Phase two drilling, which aims to double the resource and get the tonnage to an
eventual 400m tonnes.
• Engineering, pit design, mine plan to PEA level
• Engage a strategic partner (they are currently talking to “several”, though obviously I
couldn’t pry too deeply into that one)
• Make main option payment of $3m in February 2015

• Publish PEA in 2q15
To do that little lot, FCV has $1.6m left in treasury and that’s enough to cover everything to
February, which is when that $3m payment is due. In a perfect world FCV would have a JV
partner in by then but as we know by now, this world isn’t perfect for juniors so FCv will need
to cover its end of the deal at least with a contingency plan by then. And I firmly believe that
there lies the reason for the current weakness; we know financing in the mining space is thin at
best, so the market seems to be baking into the FCV.v the chances that it won’t find its desired
JV partner and will be stuck making a $3m payment by other means, for example a equity
financing and extra dilution put on the share price. That’s the risk we holders take at this point
in the company’s development cycle and it’s not a new one, as for nearly all of 2014 I’ve had
the “get a JV partner in for Bayovar 12” as the key target or landmark that would send this
stock soaring higher.
Dalradian Resources (DNA.to): Even this one, as bright a prospect in the gold space as you
can imagine, it back from whence it came under this selling raft. The reasoning behind the
selling and the sellers is simple enough, along the lines of 1) it’s a M&A play and 2) there’s no
M&A going on so 3) so there’s no reason to hold this while it drifts so $) let’s sell, free up the
cash and go buy some AAPL or something. I’ll hold.
The Copper Basket
After forty weeks of 2014 The Copper Basket is showing a 5.58% loss to level stakes.
company ticker price 1/1/14 Shares out Market Cap current pps gain/loss%
1 Augusta Res AZC.to 1.51 144.41 541.54 3.75 148.3%
2 Lumina Copper LCC.v 6.29 44.07 440.70 10.00 59.0%
3 NGEx Resources NGQ.to 1.43 168.71 310.43 1.84 28.7%
4 Reservoir Min. RMC.v 4.97 47.55 198.76 4.18 -15.9%
5 Nevada Copper NCU.to 1.35 80.5 128.00 1.59 17.8%
6 Panoro Minerals PML.v 0.35 220.25 81.49 0.37 5.7%
7 Hot Chili Ltd HCH.ax 0.425 333.11 73.28 0.22 -48.2%
8 Copper Fox CUU.v 0.375 402.96 72.53 0.18 -52.0%
9 Curis Resources CUV.to 0.57 74.79 63.57 0.85 49.1%
10 NovaCopper NCQ.to 1.60 60.15 63.16 1.05 -34.4%
11 Western Copper WRN.to 0.76 93.68 59.96 0.64 -15.8%
12 Cordoba Min. CDB.v 0.90 58.81 11.76 0.20 -77.8%
13 AQM Copper AQM.v 0.11 139.24 11.14 0.08 -27.3%
14 Coro Mining* COP.to 0.10 159.37 8.77 0.055 -45.0%
15 Oracle Mining OMN.to 0.27 49.03 3.19 0.065 -75.9%
NB: HCH.ax priced in AUD$, rest CAD$ //CDB 2x1 split May'14 Portfolio avg -5.58%
Just one component stock registered a
The Copper basket 2014, weekly evolution
weekly gain, namely Hot Chile (HCH.ax)
25%
which clicked up a meagre half cent but in
20%
doing so added weight to your author’s
assumption that it’s finding a clear bottom 15%
now. Three others were unchanged (LCC.v, 10%
AZC.to, COP.to) and that means eleven
5%
lowers, which together did 5.5% worth of
0%
damage to the overall basket average and
put it firmly into the red zone. -5%
-10%
The worst weekly numbers came from
Cordoba Minerals (CBD.v down 28.6%),
8
ht5naj ht91 dn2bef ht61 dn2ram ht61 ht03 ht31 ht72 ht11 ht52 ht8 dn22 ht6luj ht02 dr3gua ht71 ts13guA ht41 ht82
source: IKN calcs

Oracle Mining (OMN.to down 18.8%), Reservoir Minerals (RMC.v down 17.2%), Panoro (PML.v
down 11.9% and AQM Copper (AQM.v down
11.1%). And with that, the Copper Basket is now
firmly showing red for the first time this year.
As for the copper metal market, that was bearish
but overall it hung onto what looks like a
psychologically important resistance level at $3/lb,
wavering aside. As it happens, chartwatchers
apparently care more about Cu holding $2.90/lb
than they do the three handle.
Now for the regular inventories section, here are
the bullet points:
• Overall world stock levels dropped very
slightly, down 3,058 metric tonnes (mt)
(1.1%) to 263,027mt.
• Shanghai Futures Exchange copper
warehouse stocks didn’t move, as the
country shut down for its National Week
celebrations (plus a few hundred thousand people protesting in Hong Kong made for
some fun TV shots). Anyway, the number is unchanged from last week at 81,554mt.
• The LME copper warehouse inventories moved down by nearly 4,000mt and made the
difference on the week, finishing at 150,550mt. We again point to the way in which
127,150mt of that total (nearly half all trade warehouse stocks in the world right now)
is sitting in the LME New Orleans depots. Unchanged on the year, it’s a big number
compared to the whole.
• Comex warehouses stocks moved up by nearly a 900mt, finishing the week at
30,923mt.
Yet another quiet week in the copper warehouse world, as metals traders took their cues from
the movements in the currencies more than the underlying fundies. As it’s the end of the
month, we now check in on our regular charts of the three systems which show...
Copper inventories: percentage held per exchange
80
70
60
50
40
30
20
10
0
...the LME and Shanghai warehouses still working in mirror image but also the slight return of
Comex to a position of note. It now accounts for over 10% of world stocks and that’s a long
way up from the sub-3% market share of a year ago.
Cordoba Minerals (CDB.v): The vicious selling of this stock continues unabated and it stands
out even in a sector that’s been hit hard. For sure there are plenty of stocks that aren’t
attracting bidders, the difference with CDB is the insistence of the market (one player?) to sell
at any cost.
9
21.naJ bef ram rpa yam nuj luj gua pes tco von ced 31.naJ bef ram rpa yam nuj luj gua pes tco von ced 41.naj bef ram rpa yam nuj luj gua pes
Copper inventories, per month 2012-2014
1000000
LME Shanghai Comex
900000
800000
700000
600000
500000
400000
300000
200000
100000
0
source: Cochilco
21.naJ bef ram rpa yam nuj luj gua pes tco von ced 31.naJ bef ram rpa yam nuj luj gua pes tco von ced 41.naj bef ram rpa yam nuj luj gua pes
Mt Cu
LME Shanghai Comex
source: Cochilco

I’ve never been on board this play, mainly due to it working Colombia (don’t want that country
for my juniors, thanks), but the difference in the pomp and circumstance of its launch and the
market’s attitude now is more than stark.
The Low Cost Producer Basket
After 40 weeks, the Low Cost Producer Basket is showing a 5.44% loss to level stakes
company ticker price 1/1/14 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Freeport FCX 37.74 1040 33.61 32.32 -14.4%
2 Goldcorp GG 21.67 812 18.37 22.62 4.4%
3 Barrick ABX 17.63 1000 14.16 14.16 -19.7%
4 Newmont NEM 23.03 497.87 11.30 22.70 -1.4%
5 Franco Nevada FNV 40.74 155.39 7.26 46.75 14.8%
6 Silver Wheaton SLW 20.19 357.39 6.86 19.19 -5.0%
7 Agnico Eagle AEM 26.38 173.43 4.86 28.05 6.3%
8 B2Gold BTG 2.02 948.9 1.87 1.97 -2.5%
9 Pan American PAAS 11.70 151.41 1.56 10.30 -12.0%
10 First Majestic AG 9.80 117.02 0.86 7.35 -25.0%
all prices in U$, using NYSE ticker prices Portfolio avg -5.44%
The overall basket lost just under 6% this week, which puts it firmly in the negative column for
the first time this year. The other thing to note is that the steep drop of those lines since
August hasn’t flattened out after all, there’s reason to believe there’s more to come.
Again, all component stocks showed weekly losses. All of them. The worst drops came mostly
10

from the silver exposed members of the team and the “top” three (bottom, really) were Pan
American Silver (PAAS down 11.4%), First Majestic (AG down 9.9%) and Barrick (ABX down
7.1%), which has its own set of problems to resolve.
The Low Cost Producer Basket: Weekly performance and
comparative to GDX control
35%
30%
25%
20%
15%
10%
5%
0%
-5%
-10%
11
ts13ceD ht21 ht62 ht9 dr32 ht9 dr32 ht6rpa ht02 ht4yam ht81 ts1nuj ht51 ht92 ht31 ht72 ht01 ht42 ht7peS ts12 ht5tco
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 ht21 ht62 ht9 dr32 ht9 dr32 ht6rpa ht02 ht4yam ht81 ts1nuj ht51 ht92 ht31 ht72 ht01 ht42 ht7peS ts12 ht5tco
source: ikn calcs, NYSE/Nasdaq data
Here’s an extra focus on just how miserable it’s been for these larger cap producer companies
since Labor Day. If we take as our starter point the prices booked in IKN277 on Sunday August
31st, just before the drop set in, here are the percentage losses of all component stock in
September plus these first three days of October:
Percentage change in market price of basket
% components, Aug 31st (IKN277) to Oct 5th (IKN282)
0
-5
-10
-15 -11.14
-20 -16.21 -16.96
-19.42
-25 -23.00 -23.30 -23.35
-30 -26.74
-28.22 -28.27
-35
source: NYSE, IKN calcs
-40
FCX NEM FNV GG ABX SLW BTG AEM AG PAAS
The best (least worst) is FreePort (FCX), which is “only” down by 11.14%. Then at the other
end, silver plays AG and PAAS have both lost 28% in the period, which is particularly galling for
me as I managed to wait until just about the worst moment possible before jumping on board
AG, making it my main silver play and adding speculation to the port with that metal’s
representation. Sigh.

Regional politics
Regional review next week
Strictly speaking it was due this week*, but as we have big and potentially mining-influential
elections happening today in two of the better countries to go mining in South America, Brazil
and Peru, I made the executive decision to hold off on the regular quarterly review for one
more week in order to incorporate more realistic numbers for those two places into the report.
*and between us, don’t tell the others, but it’s 50% written already
Quickly on the Brazil Presidential election
Not dwelling on this today, because by the time you read these words you’ll probably have
fresher and more relevant news at hand. The last week of campaigning in Brazil has been
dominated by the apparent collapse of voter intention for Marina Silva, to the point where some
last minute polls are calling second place for Aecio Neves (4). What seems to be true however
is that 1) Dilma wins this weekend 2) she won’t get enough to win in round one, but most
importantly 3) whoever she face in the run-off, Silva or Neves, polls show her beating them by
46-48 to 40-41 on October 26th.
UPDATE: Sunday evening. Exit polls and fast count show that the Marina Silva vote (21%
today) collapsed and Dilma (41% today) will indeed face Aecio Neves (34% today) in the
second round run-off. And Dilma will win that, be in no doubt.
Quickly on Peru regional/municipal elections
Although preliminary results for today’s nationwide regional and municipal elections to decide
governors and mayors in Peru will start flowing on Sunday evening, the votes won’t get counted
as quickly in these elections than they will in Brazil so we may not get “bankable pre-results”
until Monday or Tuesday in some of the key elections in mining-sensitive regions (i.e. Puno). If
I see a result that’s potentially market-moving, you’ll get news of it in a Flash update.
UPDATE: Initial results from the two regional elections we’ve covered closely indicated they’ve
turned out in the way expected
1) Fast count results (5) from Cajamarca, usually very accurate, show
Gregorio Santos the easy winner in the Cajamarca regional presidency race,
with 46.3% of votes and that’s higher than even we expected. Assuming the
official results confirm at some point tomorrow, he’s automatically re-elected.
2) Exit polls from Puno (6), somewhat less accurate, show Walter Aduviri in
second place of the Puno regional presidency race, with 22%. The wrinkle
here is the early exit polls show the winner, Juan Luque Mamani (see
IKN280), on 29.6% and if he can pass the 30% barrier, there will be no need
for a second round run-off.
However, please see ‘Market Watching’ below for a call on the trade potential of Bear
Creek Mining (BCM.v), because even with Aduviri’s result today the stock isn’t a buy in my
opinion.
Quickly on Bolivia’s election next week
We’ve hardly made mention or covered on these pages Bolivia’s upcoming Presidential election
due next Sunday, October 12th. The reasons are:
Bolivia is not a happy hunting ground for mining FDI or junior mining companies. It’s not a
relevant jurisdiction for The IKN Weekly these days and things are likely to remain that way in
the future.
12

That’s because this vote is a foregone conclusion: Evo wins. Here’s a poll from Bolivia’s national
daily La Razon dated September 30th (7) and compiled by reputable company Ipsos:
Even if your Spanish doesn’t get much beyond por favor, gracias, en fuego and cerveza you’ll
see that Evo has had 59% of voter intention in the past three months of polling, which is rock
solid support and virtually guarantees his re-election (or re-re-election). The only doubt is who
will get second spot, as Samuel Doria Medina has seen support fade while 3rd placed Jorge
Quiroga has put on a spurt in the last weeks of campaigning.
Copper producers in Chile: In trouble under lower prices
Via regular trade radio show ‘Frecuencia Minera’, I caught an interesting Q&A with one Omar
Cortés yesterday Saturday (8), a respected consulting geologist in Chile with 25 years of
experience in some of the top projects in the country (e.g. he’s just come off three years at
Teck’s Relincho project as Superintendent of Geology in overall charge of project rock
development, so yes his credentials check out just fine). He ran an analysis (9) of costs of
production of copper in his home country, basing the study on data available form Chile’s
smaller State-run company Enami (that carries its smaller producers, as well as a great deal of
State-owned concessions and exploration projects) and concluded that at $3/lb Cu, smaller-end
producers were making little or no profit in the country. That’s not a great situation for the
small end producer there (which is normally defined at less than 1,000tpd throughput) but the
quote of his that got me scribbling in my notebook was (translated), “If we project a copper
price of U$2.50/lb, the situation at Enami could be catastrophic”. He concluded his interview by
saying that all copper producers in Chile, be they large or small, State or privately owned, need
to formulate a development plan with copper at U$2.75/lb as contingency, with at that price the
assumption of break-even. Which sounds easy enough on paper, but according to Cortés it
would require a change in mentality in Chile from 40 years of simple profit assumptions.
Peru and Ecuador may work together on border mining projects
News last week came from the importantly entitled “Third Mining/Energy Integration
Encounter” between Peru and Ecuador (gov’t level conferences in South America are constantly
good at naming themselves), held in the border region of Tumbes Peru and featuring the
mining and energy ministers of both countries, plus the normal assembly of lackeys (10). It was
a meeting dominated more by energy matters than mining, with most of the (local regional)
headlines caught by agreements to improve hydrocarbons exploration or the potential that Peru
13

might soon export electricity to Ecuador. But there were agreements on mining too, with the
main one an accord to develop mining properties on both sides of the border between Ecuador
and Peru, particularly the ‘Cordillera del Condor’ region that’s seen several failed attempts at
development on the Peru side in recent years. Anglo American were there in the 90s and
abandoned, recently we’ve seen the badly run promo Dorato Resources, others too, but the two
main problems hit have been poor infrastructure on the Peru side (the lack of roads means
exploration teams have to be helicoptered in) and poor community relations. In theory at least,
if Ecuador and Peru could get to together, reach agreements with locals who live in both
countries but consider themselves indigenous first, then use the better roads on the Ecuador
side of the border (hardly three lane highways, but better than noting) the chances of making
progress would be higher
And Colombia, too. There was a head of states meeting between Colombia’s Santos and Peru’s
Humala in Iquitos last week, which was largely protocolar and “look how friendly our relations
are these days” but also included the signing of eleven bi-national agreements (11), including
one that’s designed to pool ideas and resource on mining matters. Colombia has been watching
Peru make limited but undeniable progress on combatting so-called illegal mining (it’s certainly
unregulated and very polluting) and would probably want to tap brains on that subject.
Mexico: Guerrero State political risk
Another example of the type of the high and (largely) hidden political risk that keeps me
permanently away from any mining company working or developing in Guerrero State, South
Mexico, has come to light this week. The issue isn’t directly related to mining activity, but it
gives a window into the fragility of the region and the type of events that can blow up at any
moment.
The central event happened two Fridays ago, when a group of students at the region’s main
school for teachers marched in protest against national government plans to increase university
fees and impose its controversial education reforms. Versions of what happened depend on
who you talk to or read, but we know that hings got out of hand and in the ensuing trouble six
students were shot dead by police officers, while another 43 were taken away and to date are
“disappeared”, i.e. no sign or sight of them in a country where “disappeared” is a very serious
state of affairs indeed [UPDATE: They may have been found dead in mass graves (12), though
official word is still lacking].
As it happens, the versions of events show another aspect of the Guerrero problem, because
locals state (and with mounting evidence on their side) that police opened fire without warning
on buses carrying unarmed protesters and the six dead were in three separate attacks.
Meanwhile, national media have been accused of scrubbing the story clean and talking of
violent clashes between two roughly equally equipped sides. In its coverage of events, Al
Jazeera went on to write (13):
“Guerrero, one of Mexico’s poorest states, has been plagued by social unrest in recent
years. The state, along with Michoacan, is home to Mexico’s controversial vigilante, or
self-defense, movement, in which armed citizen patrols protect communities from
cartel violence. Guerrero had Mexico’s highest homicide rate in 2013 — a murder rate
fueled by a turf war between splinter groups of formerly big cartels.”
I could continue and quote a whole bunch of other reports or op-eds. FDI in mining in
Guerrero, particularly gold mining, is an accident waiting to happen and an open invitation to
one of Taleb’s Black Swan events. Narco money, local vigilante groups taking over entirely from
police, widespread poverty that goes hand in hand with corruption, all the ingredients for an
unstable and insecure zone are there. I’ve spoken with more than one geologist who have
worked the area and won’t go back due to the risk, and that’s a group of people who are
normally pretty sanguine about being run off territories by irate villagers.
The final point: On this southern side of the Rio Grande, Guerrero State is infamous as one of
the most dangerous spots in Latin America but you’d never, but ever guess it just by reading
14

the English language mining press or the smooth corporate presentations of the companies
working there. Only now and again does the curtain slip, such as the blockage and protests
against Goldcorp's (GG) Los Filos mine that couldn’t avoid publicity because the locals brought
the mine to a halt and caused a material event. Only when GG sat down and re-negotiated a
fairer deal did things blow over. Any given region in LatAm is never as simple or simplistic as
made out in the wild world of mining corporate relations and that’s normal, but there’s a
particularly wide disconnect between show and reality when it comes to Guerrero. You’re
welcome to put some of your speculative cash to work in explorecos or juniors in that region, I
won’t be joining you.
Market Watching
Bear Creek Mining (BCM.v): I’m not buying
So yes it seems that I called the political risk situation well enough in Puno and even if Walter
Aduviri gets to a second round run-off (the third place candidate is on ~10%, so it’s either
Luque direct or Luque vs Aduviri in September) his isn’t a strong position and we can fully
expect Juan Luque Mamani to become the next regional president of Puno.
Back in the analysis found in IKN280 (which I also stuck on the blog tonight (14)) the call was
to oppose the position set by JP Morgan, who had placed anti-mining (and particularly anti-Bear
Creek) Walter Aduviri as favourite for the post. The decision was to wait, see if things looked
reasonable and then either just before (you, if feeling brave) or just after (I, on tomorrow
October 6th) the vote. And indeed, not only has the vote gone the way of ouor call but the entry
point for BCM looks interesting too, with Friday’s close of $1.67 and the stock down around
17% since IKN280.
However, the other part of any potential trade on BCM.v was always the price of silver and as
that above chart also shows, we’re not in good shape. At Corani, BCM has a high tonnage low
grading deposit and although its recent project update made it clear it was aiming for a small
operation that would concentrate on the better grading rock, there’s still only certain things it
can do. Silver at $20/oz would probably (not definitely) make it viable, but silver at today’s
$17/oz means Corani almost certainly doesn’t work.
There’s the rub and it’s why, despite the Pyrrhic victory of the “right” candidate winning (or
nearly so) in Puno, that I’m going to pass on this trade until at least silver improves its price
position. I’d fully agree that a bounce in the next couple of days may happen (i don’t know,
honestly, don’t ask, but if i really had to make a wild guess i’d say $2 is possible again) but 1)
it’s not a certainty 2) the best prices are likely to evaporate at the open 3) it’s not really
attractive as a risk/reward play any more, certainly much less than it was at the time of
15

IKN280. Therefore I’m passing on this potential trade, just like I’ve been doing with many
others.
A word on Buenaventura (BVN)
Gregorio Santos didn’t just win, he won by a mile with fast count results putting him at 46.3%.
This may reflect negatively in Buenaventura (BVN) in the next few days, but on looking at the
chart...
...I believe the worst is baked in already. Also, the cruel reality is that with or without Santos in
power in Cajamarca, Conga is inviable at current metals prices and isn’t going to go ahead any
time soon. It’s fair to say that BVN CEO Roque Benavides has probably been one of the players
behind the anti-Santos campaign and may as a result pay a personal-level price, but those
things tend to be inside Peru political circles rather than directly company or business related so
aren’t our focus. BVN is moving ahead with projects outside of Cajamarca so once the dust
settles, its U$11 share price may turn into a fair price for somebody. But not me, neither long
nor short at the moment.
Trevali (TV.to): No trade yet
Everything stands about the analysis made last week, but there’s one thing missing; a good
entry point. I did hum and hah about the $1.11 on offer at one point last week, but the way the
market was dumping kept me away from taking any new long position, even one designed to
be near-term and around news. As things turned out TV ignored the wholesale selling on Friday
and rallied to close at $1.17, which would have put me on the right side of the trade had I been
a little more courageous, but it’s hardly big stuff (so far) and the good night’s sleep principle is
more important to my life than a transitory 5% win. This was the end to last week’s piece...
However we can expect TV.to to hit the promo trial in week two of October with a
production report and if there’s a trade to be had at a good price, I’ll want to be
installed and long before then. Therefore I’m looking for 1) a respite in the bearish
market and 2) a window to buy TV.to for a near-term trade between October 1st and
Friday October 10th. That window gives the right potential and though it’s by no means
certain I’ll hit the trigger and buy, if I do I’ll be looking for something in the region of a
15% to 20% win between the buy price and any eventual sale
...and the item that didn’t fall into place was “good price”, though there is still time and I’ll be
watching both TV and the market for an opportunity to get long at a low price. If it doesn’t
happen, so be it (I’m in enough trouble as it is).
16

Precipitate Gold (PRG.v) again shows the poor nature of the exploreco market
Yes that drill hole from PRG.to ten days ago was an excellent return and yes we’re going to
follow its progress, but staying away from the stock was the right call (and preferring the
neighbour play in GoldQuest (GQC.v) for that matter, as this chart shows) because its
momentum has already faded and this weekend it’s back at the 16c-17c level pre-result.
Let’s be clear about this: PRG didn’t deserve to be sold last week the way it was sold. But let’s
also be clear and state that it didn’t come as much surprise, because seeking alpha in a sector
that’s being moved by an ebbing tide far more than any company-specific matters is not the
way to snap up bargains. I’m just about ok (and it’s ok just) with adding a small position to my
beaten down copper producer play, Amerigo. But an exploreco in the early stages of resource
development isn’t the place to put new money at the moment, we need a real turnaround and
money to rotate from any rise in sector-leader stocks before the PRGs of this world catch a true
bid. It’s not fair, it’s capitalism.
Conclusion
IKN282 is done, we end with bullet points:
• Again, not an easy week. I’m going to add a few Amerigo (ARG.to) to my pot, but
that’s about as far as I’m going to go.
17

• The rest of today’s thin edition is about what there isn’t to do, rather than what there
is. It’s not much more than a continuation of last week’s “watch and wait” call, with the
idea being to keep at least some money on the sidelines for the opportunities when
they arrive.
• The politics has come thick and fast this Sunday night and I’ve spent time trying to
wade through the early results, but as noted above there needs to be a little time
before the extent of the damage is known. Santos has won in Cajamrca and Dilma will
win in Brazil. The rest needs thought.
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.kitco.com/ind/Aden/2014-09-24-Strong-Dollar-Pressures-Gold.html
(2) http://www.washingtonpost.com/business/even-if-you-could-pick-huge-winners-could-you-hold-
them/2014/10/03/bd426e34-49ba-11e4-891d-713f052086a0_story.html
(3) http://finance.yahoo.com/news/minera-irl-provides-ollachea-financing-060000257.html
(4) http://uk.reuters.com/article/2014/10/04/uk-brazil-election-idUKKCN0HT0G820141004
(5) https://twitter.com/ipsosperu/status/518949358629560320
18

(6) http://elbuho.pe/2014/10/05/resultados-en-gobierno-regional-de-puno-segun-ipsos/
(7) http://www.la-razon.com/animal_electoral/Tercera-Ipsos-Doria-Medina-Quiroga_0_2135186542.html
(8) https://twitter.com/frecuenciaminer/status/518386815552987136
(9) http://www.core-miningstudies.com/2014/08/analisis-estrategico-de-la-pequena-y-mediana-mineria-en-chile/
(10) http://gestion.pe/economia/peru-y-ecuador-analizan-sinergias-aprovechar-recursos-mineros-y-energeticos-
2110201
(11) http://es.panampost.com/panam-staff/2014/10/03/peru-y-colombia-firman-11-acuerdos-para-fortalecer-
cooperacion-economica/
(12) http://www.sinembargo.mx/04-10-2014/1134182
(13) http://america.aljazeera.com/articles/2014/10/1/guerrero-mexico-students.html
(14) http://incakolanews.blogspot.com/2014/10/peru-politics.html
(15)
(16)
(17)
(18)
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
19

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
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
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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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