IKN #286Premium

The IKN Weekly
Week 286, November 2nd 2014
Contents
This Week: Trades for next week, Tis but a scratch, A cancellation, BLS jobs week.
Fundamental Analysis: Dalradian Resources (DNA.to): 3q14 financials and a new PEA
Stocks to Follow: Overview, Kinross Gold (K.to) (KGC), Timmins Gold (TMM.to) (TGD), Coro
Mining (COP.to), Focus Ventures (FCV.v), Reservoir (RMC.v), NovaCopper (NCQ.to), Minera IRL
(MIRL.L) (IRL.to), B2Gold (BTG) (BTO.to), Rio Alto (RIO.to) (RIOM).
Copper Basket: Overview, NGEx Resources (NGQ.to), Copper Fox (CUU.v), Nevada Copper
(NCU.to).
Low Cost Producer Basket: Overview, Barrick Gold (ABX).
Regional Politics: The busy 2014 LatAm election season is nearly over so on to 2015,
Indigenous report Peru’s government to the International Court of Human Rights, Ecuador:
New draft mining law expected this month, Peru: Copper production disappointing in 2014
Market Watching: Timmins Gold (TGD) (TMM.to) 3q14 results, Burkina Faso and a rant about
political risk.
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
Trades for next week
Here at the top so everyone sees, one confirmation and three planned trades:
1) As noted in the Flash update of Tuesday (see appendix 1) the extra trade on B2Gold
wasn’t going to last the week and it didn’t. I took a loss on that one.
2) I’m selling the very small Kinross Gold (KGC) trade next week. When it kicked off a
couple of weeks ago, I said that if it went against me it would be dumped and it’s gone
against me very quickly. As such it gets closed next week.
3) I’m selling my shares of Timmins Gold (TGD) next week. This one is pure portfolio
management and the desire to raise some cash. TGD started well, faded badly and the
original thesis for buying it, that of a takeover (most likely AR.to) has seen its chances
hit hard by the market sell-off and current atmosphere. I’ll take my loss and then hold
the cash.
4) I’m adding to my position in Coro Mining (COP.to): Although not the great macro
backdrop for buying, this stock is showing a very specific opportunity right now and the
price has dropped so low that it’s easy to average down on the position without too
much capital outlay.
See below for more on all of these planned and completed trades.
Tis but a scratch
1

Movie:Monty Python and the Holy Grail
Scene: King Arthur has just cut off the arm of
The Black Knight in a sword fight
Arthur: Now stand aside, worthy adversary.
Black Knight: 'Tis but a scratch.
Arthur: A scratch? Your arm's off!
Black Knight: No, it isn't.
Arthur: Well, what's that then?
Black Knight: I've had worse.
Arthur: You liar!
Black Knight: Come on you pansy!
The week just gone showed that my recent position towards the market was all wrong and
after a couple of days’ worth of sifting through the portfolio wreckage the thing I think I am
most guilty of is speculation on gold. Gold mining stocks are speculative vehicles, juniors are
miners on speed, so when they drop there’s no option but to take the losses like a man.
Meanwhile (and unlike that of Eric Sprott, it seems) the gold bullion I own isn’t for sale and
hasn’t been for years, it won’t be in the future either. It’s owned as because it’s an asset, it’s
owned for the same reason I own a house. But as I reflect on my mistakes in the last few
weeks, that of trying a trade here (and getting my arm chopped off), then sticking my head
over the parapet and getting an ear shot off, then trying again and watching another
appendage get blown away, I’m pointed towards my inner trader being too willing to find
reasons for gold to be near-term bullish, too much bias confirmation and not nearly enough
level-headedness when it comes to the baseline price driver of this sector.
The other thing that occurs to me is that the atmosphere now really is one of near or total
capitulation and one of the things that’s been missing in the throw-it-all-away sentiment is now
showing up; We’re now getting smart, intelligent market professionals making solid cases for
gold going lower and never rebounding again (or staying low indefinitely, at the least). It’s one
of those things that shows up at the bottom and i now have the mails to prove it from the right
type of person. As such, I’m increasingly of the mind that I need to stop farting around and
trying to be cute with this near-term market by trying and failing with small trades. We’re now
in the period when asset collection, buying and holding on to beaten-to-death companies with
solid, well run operations or best-in-breed deposits at deep discounts (e.g. look below at
Dalradian and its 3.5m oz of 9 g/t gold selling at $11.40/oz in-situ EV) is the way to the big
bucks and if that means we have to suffer another 20% to the downside before things reverse
and the 100%, 200% and 500% profit numbers start rolling, then so be it.
Even if it is cheap now, even if it gets cheaper soon, gold won’t stay cheap. It never does.
A cancellation
Here’s an excerpt from a mail received this week from a long-time subscriber ‘Mat’ who has
decided not to renew his subscription.
I've followed your blog since 2008, originally for the political analysis and later for the
mining calls. I've enjoyed the Malcolm Tucker like swearing but the main attraction has
always been the balance in your analysis. It's refreshing to read someone who
understands the motives of both Joe Cholito and Wall Street Whitey.
Having read the weekly for over a year, it was your 'mark my words, this is a definite
bull market' call earlier in the year (corroborated by Larry Edelson) that convinced me
to throw some more cash into the junior mining scene. Its nothing I can’t afford to lose
and I entered with my eyes open to the risks. Nevertheless, I won’t be sticking any
more in any time soon and I plan to sit on the stocks I have and see where I am in a
year’s time. As such, I don’t require The IKN Weekly, as much as I enjoy reading it.
2

There are mails and there are mails, this mail has given me great pause for the last five days
because it hit on a weak spot in my psyche, so I knew I’d have to address it in this week’s
edition rather than make a simple reply to Mat.
This is the difficult thing, as one a day-to-day, week-to-week basis the way in which I write up
the letter and cover the markets is on a constant commentary basis. Yes I’m more bullish one
week and less bullish on another, that shows in the writings and it’s part of the process. The
way in which I write The IKN Weekly is also precisely because it’s a weekly publication, there’s
less time to reflect on the bigger sea-changes and longer trends when there’s the need to write
about what’s happened in just one sliver of seven (in fact five, or sometimes less) days of
capital markets.
And then...and then. On the other hand, I know as well as anyone the lasting effect that words
or phrases written days, weeks, months, years or even centuries ago can have on another
person. This is the tough one, because I know that I’ve been too bullish at times and I know
I’ve been too bearish at other times. How do I know? Because there’s a clear track record of
my own words, the trail of footprints to my door, the fingerprints all over the crockery. Mat’s
mail was about an earlier episode, I can give you another, far more topical one by pointing you
to the blog as recently as last Tuesday October 28th I was staring at the gold/copper ratio and
how the line was squiggling to order, then extrapolating a bullish scenario for gold from the
data (1). Uh oh, wrong. But this is where part of the whole concept of newsletter writing falls
down, because I can spout and give you ideas but in the end I’m only telling you what I’m
doing with my money. That’s because I know where I’m coming from with my stance towards
the market, I know how it changes and I see where I’ve gone wrong, therefore correcting the
numerous errors is both simple and guilt-free (hey, I lose my own cash and I don’t worry about
it much). But when the words are out there they can hurt people, because I am not you, you
are not me, we see things in different ways. And that’s not a pleasant feeling at all at this end
of the pipe when things go wrong that stem from my opinions.
All this sounds like I’m whining and making excuses, which isn’t the case. I feel bad about Mat
and his losses because I was at fault and I am at fault. I offer no excuses Mat, I apologize.
However, I had to look up Malcolm Tucker as I’d never heard of him before (the last time I saw
Capaldi in action was in Dangerous Liaisons). After 10 minutes of Googling I think it was a
compliment, but it also reminds me why I made a pact with myself to swear less often on the
blog a few months ago. Sometimes it works.
BLS jobs week
The US Employment Report for October is due out Friday morning and according to Bill McBride
(2) consensus at this point is for +240k non-farm payroll and 5.9% headline unemployment.
Those may be refined as the week wears on, of course.
On reflection, I’d say the chances of getting gold-positive news from this BLS report are
minimal. We’re in a market where sentiment is so charged that anything construed positive will
see the broad market stocks (risk on) rise, but if the BLS report is considered negative it will be
brushed off with that old saw “it’s a noisy dataset” excuse. Heads you win, tails I lose.
Fundamental Analysis of Mining Stocks
Dalradian Resources (DNA.to): 3q14 financials and a new PEA
A busy week for the DNA.to fundies, as on Thursday the company announced (3) an updated
PEA on its flagship Curraghinalt gold project in Northern Ireland and then on Friday evening it
filed its 3q14 financials and MD&A (no NR though, presumably they’ll tell the world tomorrow
Monday). We take a look at both of these developments and make the case for continued
ownership of this junior exploreco.
3

The 3q14 financials and the main points of what to expect in 2015
DNA posted its 3q14 financial on SEDAR on Friday without fanfare or news release cover. We
can do these pretty quickly because DNA as an exploreco isn’t the most difficult of reads on its
financials, so here’s how the new numbers fit in with the old numbers and a little of what we
can expect in the year or so to come.
We start with the assets and liabilities charts. Liabilities is the easy one, as DNA carried basically
no debt these days and isn’t expected to do so for the foreseeable future.
DNA: Liabilities position
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
As for assets, the difference here is the proceeds of the equity raising that happened during
3q14 and added about $25m to treasury.
We’re now into the period when DNA plans
to spend that money on exploration and
development (4q14 onwards) and it may
elect to capitalize expenditures from now on.
If so my blue bar assumption above for 4q14
will be a little out, but we’ll see about that
when the times comes.
Here’s the working capital chart and on this
one I’ve extended the forecasts to the end of
2015 in order to show how we can expect
DNA to spend its cash.
The 3q14 MD&A has given us useful guidance on this point and here’s a cut’n’paste from the
document that shows the general story:
4
01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
$m DNA: Assets Breakdown per qtr
100
90
80
LT debt
70
current debt 60
50
40
30
20
10
0
source: company filings
01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
source: company filings, IKN ests
srallod
fo
snoillim
fixed
other current
cash
50 DNA: Working Capital per qtr
45
40
35
30
25
20
15
10
5
0
01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4 tse51q1 tse51q2 tse51q3 tse51q4
source company filings, IKN ests
srallod
fo
snoillim

From this information, other burn assumptions and sticking a finger in the air the forecast is
that unless DNA goes back to market in 2015 and raises more capital (perfectly possible) it’ll
finish 2015 with around $3m in the treasury, and that’s not very much. The basic takeaway
need-to-know here is that
1) DNA has plenty of cash at bank today
2) It has a work program set out for the next five quarters to get Curraghinalt to PFS level
3) It’s going to spend nearly all its money in 2015.
So unlike many other juniors who have shut up shop and are battening down hatches, DNA has
a busy year ahead and isn’t afraid to fund it.
DNA: Share count
160
Here’s the share count at DNA, one which isn’t
140
likely to move by any great amount for the next
120
two or three quarters minimum. We’re now (as
100
at October 31st 2014, i.e. right now) looking at
80
140,035,483 shares out, 28.26m warrants,
60
7.74m options and 995,000 restricted share units
40
(RSUs) at DNA, which gives a fully diluted total 20
of 177.026m shares. So now you know. 0
Moving to the P+L, here’s how net losses came
in and the bar was a low one for 3q14 as DNA
awaited its permits and green lights for the next
stage of development and exploration, that’s now kicking off in 4q14. We can expect burn to
move higher in the quarters to come, represented by this second chart that splits expenses
between “corporate” and “field”. The two most expensive quarters are scheduled to be 1q15
and 2q15.
Overall, the 3q14 financials and MD&A from DNA came is very much as expected. This quarter
gone was the calm one and now that things are moving at Curraghinalt, we can expect the
money recently raised to be used. This should give us plenty of solid news in the year ahead,
though it’s worth pointing out before moving on that even though DNA has a very good looking
$37m treasury, it’d be a mistake to value the company on an EV basis and back that out. The
aggressive development in the year to come means that money is going to be put in the ground
and therefore, the only reasonable way of putting a value on this company is to look hard at its
one and only project.
The PEA and how the Curraghinalt project economics now shape up
Thursday morning saw DNA release updated PEA (aka scoping study) criteria for Curraghinalt,
with figures that will form the basis of (this and) next year’s work program that includes
20,000m of drilling that aims to get the project to pre-feasibility study level. We need to
remember that a PEA isn’t a PFS or a FS (nor is it a fully funded mine). This is the first stage of
5
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
source: company filings, IKN ests
srallod
fo
snoillim
DNA: Net loss, per qtr
2
1.5
1
0.5
0
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 **31q3 31q4 41q1 41q2 41q3 tse41q4
DNA.to: "corporate vs field" expenses
U$m
12
10
8
6
4
2
0
source: DNA filings **= w/o $16.349m write down
21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 tse41q3 tse41q4 tse51q1 tse51q2 tse41q3 tse51q4
$m
corporate field
source: company filings

43-101 compliant economic studies and is best considered a framework, so the level of
uncertainty needs to be taken into consideration as we play with numbers, but all the same it is
fair to say that there are PEAs and there are PEAs; some are meant is genuine documents with
best intentions, other are specifically designed to BS the market and at this stage I’m confident
that DNA.to is going about things the right way and is at the better end of the PEA scale.
On Thursday on the blog I called it a litmus test (4) and the action between then and now was
at least interesting, though hardly full bullish. This chart shows the reaction and what I can see
in the squiggly lines are three things:
1) The PEA announcement was used as a liquidity event by people wanting out of DNA
(and probably the whole sector) and the stock dumped down as low at 46c on
Thursday’s open. There are a lot of them about right now, so although I don’t agree
with their running away I do at least see where that selling may have come from.
2) DNA recovered and traded reasonably well once the sellers had done.
3) It did well on Friday, period. It didn’t break any records or soar back into the 60s and
70s to make us embedded longs feel good about life, but it found buyers willing to pay
up on a day when most anything gold or PM miner related was being taken to the
woodshed. This chart (DNA vs GLD vs GDXJ) shows the story well enough:
So to answer the “litmus test” question, I’d say that given the circumstances and the context,
DNA passed. Thursday and Friday weren’t just your average bearish days, they were full on
suicidal bearish and for DNA to have lost just a penny between Wednesday’s (pre-PEA) close
and Friday was a relative success for the stock.
Less blahblah, more numbers. The new PEA is based on the updated resource numbers first
announced by DNA earlier this year and dated as at January 20th 2014. We can expect these to
change in the next 12 months as more drilling firms up the assumptions and we’d expect to see
more of the inferred move into M+I, perhaps new inferred added to the resource as out-step
holes hit in prospective zones, even some of the resource turn into reserve. That’s to be seen,
for the moment we have this as our gold-in-rock:
From that comes the PEA criteria and I’d encourage you to read the whole of last week’s NR (5)
to get as much as possible on your side, but this table taken from the new MD&A does a good
6

job of showing the main numbers:
Of the changes to the previous PEA, here’s my list of stand-outs:
• The 9.3% diluted grade, which is higher than my previous model assumption and
indicates the company is getting a handle on how the main resource can be mined
efficiently (caveat, we’re still at PEA stage of course, see above).
• The conservative nature of production assumptions. Following on from that, consider
the average LoM 162k oz per year gold production assumption. I’m not entirely sure
how DNA gets to this number using its operating assumptions (9.3 g/t diluted head
grade, 92% recovery, 1,700tpd) because if you run those at 365 days a year you get
170k oz produced (or 168.4k oz at 360 years per year). Perhaps they’re throwing in
more downtime assumptions, perhaps it’s connected with the read run rate per year
that had Curraghinalt producing at 194,000 oz of gold per year for the first five years
and an average of 149,000 oz of gold per year over the remainder of the 18 year mine
life. I’m Ok about accepting the DNA assumption, but the point I want to make is that if
DNA had wanted to throw sequins in our eyes, it could have chosen the sharper end of
the math and predicted higher production on its own parameters. I like conservative
and this non-promo pushing style far more than the alternative.
• Another notable was the $249m capex assumption, that means it’s jumped from the
last company best-guess but it now bakes in a large blanket of $48m in contingency
which also shows the conservative approach being taken by DNA (the company uses
reasonable forex assumptions as well).
• The final thing to like is the costs per tonne assumptions, which have dropped slightly
and now come in at $109.75/tonne. This reflects the presumed drop in costs in the
industry as a whole, but more importantly for me it’s a whole bunch lower than my
previous model’s costs assumptions. In real terms it’s a costs assumption that’s $17.4m
cheaper per year than my model and although I was giving myself plenty of leeway
before, that type of gap allows me to cut my own cost guesstimates and still leave
plenty of margin.
So with those in place, we update our model and valuation criteria.
7

Valuing Dalradian Resources
It wasn’t so very long ago that we did an update and target adjustment on Dalradian, in
IKN283 dated October 12th to be precise. But his new PEA has changed things enough to run
the numbers again so while we’re keeping to most of the criteria of that NOBS update report,
here are the main adjustments:
• We use 1,700tpd throughput on 360 years per year, rather than 365 days. Again,
caution.
• Costs are lowered. In the case of operating costs we use $110/tonne (where DNA
assumes around $101/tonne). Previously on this line item i used $125/t. Meanwhile on
G&A we assume $6m annual, which is down from the previous (and very conservative)
$8m annual but is higher than the DNA PEA assumption of around $5.3m. In other
words, on costs we trim our forecasts but still keep them higher than DNA’s own
numbers, just in case.
• We use the 9.3 g/t gold head grade, as offered by DNA in its PEA. That’s a significant
move up from the 8 g/t assumption of IKN283 and makes for strong changes.
• We run the calculations on Life of Mine average production rather than taking the
better economics of the first five years.
• We use gold at U$1,100 for our base case price and target generation, down from
$1,200/oz. This to reflect the change in the market
• We assume on our theoretical production day one that DNA has 280m shares out,
rather than the 250m assumption used previously. This is me being cautious and
baking in the need for more capex, though it wouldn’t surprise me to see the dilution
kept a lot lower in the event that DNA doesn’t sell out for a year (or pretends to take
the project to production as it represents towards an eventual deal).
• We move the tax and royalty deductions to 20% corporate tax and 6% NSR, as per the
PEA.
All other assumptions remain unchanged from IKN283.
So, here’s how the new model looks under four different gold prices, starting at $1,000/oz and
up to $1,300/oz (with $1,100/oz base case shaded in). Here’s production and gross revs:
DNT: Production and mine revenue forecasts
$1000/oz Au $1,100/oz Au $1,200/oz Au $1,300/oz Au
process tonnage 612000 612000 612000 612000
Au prod (oz) 168369 168369 168369 168369
Au gross revs ($m) 168.4 185.2 202.0 218.9
COGS+deprec($m) 75.3 75.3 75.3 75.3
Gross profit ($m) 93.0 109.9 126.7 143.6
source: IKN ests
As you can see, I’ve gone with the “calculated” 168.3k oz Au per year number that comes from
the mathwork over a LoM average. I suspect there’s more potential left in the annual
production numbers and we may get to see that in the PFS, for the time being this will model
well enough.
Here’s the condensed income items:
8

DNA at Curraghinalt: Income items for model year
At 1,700tpd thruput $1000/oz Au $1,100/oz Au $1,200/oz Au $1,300/oz Au
Sales (U$m) 160.0 175.9 191.9 207.9
Cash COGS 67.3 67.3 67.3 67.3
Depreciation 8.0 8.0 8.0 8.0
SGA 6.0 6.0 6.0 6.0
Op income 69.0 84.1 99.1 114.1
Interest 15.0 15.0 15.0 15.0
Workers Part. 2.1 2.5 3.0 3.4
Tax 10.4 13.3 16.2 19.1
Net income 41.6 53.2 64.9 76.6
Shares out (m) 280 280 280 280
EPS 0.15 0.19 0.23 0.27
Sust. Capex -5 -5 -5 -5
FCF/sh 0.16 0.20 0.24 0.28
Source: DNA data, IKN ests
At our new baseline gold price of $1,100/oz, Curraghinalt still turns into a strong moneymaking
machine and returns average annual net profits of $53.2m. That’s the type of forgiveness you
get from high grading rock. Now for the new price target:
DNA: Sales and earnings Target price & valuation data at various gold prices
Gold Price $1000 $1100 $1200 $1300 using four different gold prices
Sales ($m) 160 176 192 208 12-month target $1.25 (on 6x annual EPS using
Upside to target 128% gold at U$1100/oz)
EPS 0.15 0.19 0.23 0.27 Mkt cap ($m) $77 Enterprise value $42
Cash flow 0.18 0.22 0.26 0.30 P/sales ($1000) 0.44 EV/sales ($1000) 0.24
P/E ($1000) 3.7 EV/EBITDA ($1000) 0.5
P/E ($1100) 2.9 EV/EBITDA ($1100) 0.5
P/E ($1200) 2.4 EV/EBITDA ($1200) 0.4
cash flow defined simply as EPS + depreciation
I debated bringing down the PE multiple ot 5X to reflect the current funk in the sector (which
for the record makes the target a still very decent $1.05) but decided against it, because a) 6X
is low enough already for a project with these strong economics and b) if you and I are that
negative about gold juniors we should simply avoid all contact with the sector, rather than get
cute and trim forecasts by a multiple or two. Therefore the reasonable 6X stays and therefore,
even when dropping the gold price to
$1,1100/oz for $1,200/oz, the target price goes
up to $1.25 (was $1.09 in IKN283) representing
a juicy 128% potential return to investment on
Friday’s close. The drop in gold price is more
than compensated by the strong economics
thanks to lowered costs and higher average
grade.
Discussion and conclusion
At the end of the IKN283 NOBS report I
repeated my liking for this stock and announced
I was adding to my holding. That I did, but as
things turned out DNA was destined to drop
even further as this most bearish of markets for juniors plays out. However the good news here
is that last week’s PEA hasn’t just reaffirmed the economics, it’s improved them substantially.
This is a project that’s set to move forward in 2015 and reach PFS level by the end of next year,
it’s also one that can take a lower gold price in its stride and thanks to the economics and the
9

grade, remain very profitable. And that’s what larger mining companies are looking for today.
Dalradian Resources (DNA.to) at 55c this weekend is all the evidence you need to declare this
market über-bearish, because under any other circumstances (e.g. merely bearish would do) its
share price would be a lot higher. Having recently added and made this position pretty large I’m
not adding any more, but I’m pleased about the data the company handed over last week and
good about holding this one, thick or thin. Those of you looking to buy a beaten down
exploreco with a quality project in a politically safe region should look no further, but this one.
Stocks to Follow
We put on a brave face and salute our one and only weekly winner, as thanks to the penny put
on by Reservoir Minerals (RMC.v) we avoided a whitewash result in the ‘Stocks to Follow’ list.
But that’s as far as the bravado goes, because this was the most difficult week faced by PM
juniors for a long, long time and the results speak for themselves.
Fourteen of the fifteen stocks posted losses with double figure percentage drops by the
handful. In order of fail come Coro Mining (COP.to down 25.0%), Minera IRL (IRL.to down
25.0%), First Majestic (AG down 24.1%), GoldQuest Mining (GQC.v down 24.1%), Kinross (KGC
down 20.7%), Timmins (TGD down 20.6%), B2Gold (BTO.to down 18.3%), Focus Ventures
(FCV.v down 13.0%) and Rio Alto Mining (RIO.to down “only” 11.8%). The others were just
fleshwounds.
There are currently 15 open positions on our ‘Stocks to Follow’ list, which will be down to 13 by
this time next week. Only Rio Alto has managed to stay in the green, the rest are negative and
far to many of them are very negative indeed.
Reco Current
company Ticker this week Avg Price date PPS Gain/Loss% Notes
Top Picks
Rio Alto Mining RIO.to buy C$2.30 07-apr-11 C$2.39 3.9% Top pick, $3.30 tgt June 15
Recommended long positions (in current order of preference)
Timmins Gold TGD sell U$1.38 09-apr-14 U$1.00 -27.5% failed trade, sell, raise cash
Minera IRL IRL.to hold C$0.27 22-jul-12 C$0.09 -66.7% Waiting for financing
B2Gold BTO.to buy C$2.32 12-sep-14 C$1.88 -19.0% Top value entry point now
Focus Ventures FCV.v spec buy C$0.23 01-jul-12 C$0.20 -13.0% tgt 50c, added, avged up
Reservoir Min. RMC.v buy C$6.05 18-jun-14 C$3.89 -35.7% Time to add, Cu play
First Majestic AG hold U$10.51 10-aug-14 U$5.13 -51.2% Sole Ag, hit hard by dump
Dalradian Res DNA.to buy C$0.64 27-oct-13 C$0.55 -14.1% New tgt $1.25, Nov’14
Amerigo Res ARG.to hold C$0.405 20-jul-14 C$0.355 -12.3% Small Cu play, adding here
NovaCopper NCQ.to hold C$1.05 09-apr-14 C$0.80 -23.8% small Cu play started well
Goldquest Min. GQC.v hold C$0.26 27-oct-13 C$0.11 -57.7% looking for a reasonable out
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.495 -57.0% solid biz model, LT hold
Recommended short positions
None at moment
Smaller/Riskier
Kinross Gold KGC sell U$2.90 20-oct-14 U$2.15 -25.9% V small trade, didn't work, chau
Coro Mining COP.to spec buy C$0.125 26-jan-14 C$0.03 -76.0% Cu spec play, adding
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.16 -42.9% small spec, new China JV
10

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.
Kinross Gold (K.to) (KGC): Selling. When starting this I said it was small and I’d jettison it
if the theory didn’t pan out. Well folks, the theory hasn’t panned out and it’s getting sold next
week.
Timmins Gold (TGD) (TMM.to): Selling. This was a more difficult decision than that of
Kinross above, so we dedicate more space to it in ‘Market Watching’ below. The basic story
here is that I’m not that keen on selling the stock, but something has to go and this is the one
that offers the easiest and best way to raise some cash while opening up a space on the table
for later.
Coro Mining (COP.to): Adding and averaging down. I’m going to take part of the cash
raised by the above two sales and buy some very cheap COP.to shares next week. With that
announcement it may first seem as though there’s no end to my masochistic tendencies, but
bear with me on this one and hear me out because these aren’t normal circumstances, even
compared to the whackaloon that has become our sector normality.
It’s all about insider selling and the way in which big holder Sheldon Inwentash/Pinetree Capital
(PNP.to) has dumped COP his/their holding
in COP for reasons that look in-house rather
than COP-related. Sheldon has so far only
declared around 2.5m of its sales of COP.to
shares (6), it’s almost certain that the very
large sales blocks we saw hit COP.to late
last week were from PNP and that the
company’s sales were by no means
confined to liquidating its holdings in COP;
as noted on the blog (7) there a long list of
stocks held by PNP that were hit hard by
large selling into near-absent bids (we ID’d
eight in that post without doing much in the
way of deep investigation, there may be
more and for an idea of what PNP has done
to the others, check out the damage done to UWE.to (8) and AGG.v (9) on these links) the
result we see in COP’s price change repeated in several of the others. Why PNP should feel the
need to sell isn’t, in the end, our business. What we do know is this:
• As at last filing date of October 29th, Sheldon Inwentash and Pinetree Capital between
them held ~29m shares of COP.
• Between October 29th and October 31st 30m shares of COP.to were dumped onto the
11

market at prices as low as 2c, with 2.5c generally available all day (Friday’s close 3c).
Adding those two facts to the pattern of selling of the last few days and noting that there aren’t
that many large holders of COP.to who’d follow the same selling pattern, it’s more than
reasonable to assume that Sheldon and Pinetree are now fully out of COP and that the selling
pressure of last week isn’t about to repeat in the days top come.
This makes COP.to a good buying opportunity in the week ahead. Got the stomach for a tinycap
trade after going through the mangler last week, people? Personally it’s taken me until Sunday
morning to get used to the new total asset level of my portfolio (that’s putting it nicely, isn’t it?)
but now that it’s sunk in I’m ready and willing to add some COP at these levels, as it looks for
all the world like the big seller is now out. As COP isn’t a dead junior by any means, it’s one of
the few nano-cappers that has plans and is active, this looks like a gilt-edged opportunity to
add some very, but VERY cheap copper shares to my overall holdings. I’m going to do just that
and should be able to buy at 3c in the days to come. A very nice price.
Focus Ventures (FCV.v): For reasons only known to The Market Gods, FCV got caught up in
the precious metals selling and dropped under 20c for a while on Friday before getting its two
handle back at the close, just.
Meanwhile, we note that just as some insider sales are more significant than others (last week),
some buyers are more interesting too. FCV continues to receive significant support from the
two central figures in the Gold Group stable (to which it belongs), namely Simon Ridgway and
Mario Szotlender, who show further purchases last week to add to their steady accumulation
since September (10). Those insider buys are given a full listing in Appendix 2, below.
Reservoir Minerals (RMC.v): The big positive kick enjoyed by RMC came last week on
Tuesday morning and it came from Freeport (FCX) rather than our focus company itself. On the
FCX ConfCall after reporting its (reasonably good) 3q14 numbers, FCX’s President and CEO
Richard Adkerson had this to say (11):
“Now Serbia. There's nothing in the natural resource business like Greenfield
exploration. I mean nothing. The idea of making some investments in
exploration defining a new asset in creating huge value. That is the happiest
day you can have in a company like ours. And you know in the oil and gas
business it happens a lot more frequently than it does in the mining business
and that is again the support of about prices you go back to you think what are
the big success stories you know during my long career in the mining
business Greenfield exploration. They are few and far between. Few and far
between. We have an active program Jim Bob worked with and we find Junior
mining companies around the world on exploration concepts that have the
potential to be big. The to look at anything unless it has the potential to be big.
So that is why you haven't heard from us about this program. This does.
You've been there. There have been some really exciting core holes that are
controlled. A lot of work needs to be done. It's in an area that's traditional
mining area for the government of Serbia is very anxious to see us come in
and invest. The current status is we are not actively drilling out. We are
working on partnership arrangements with our partner there. I saw them
briefly in London when I was there last week. And we are excited about it. But
it's longer-term a lot of work to be done but it is a greenfield project that if it is
successful could add a lot of value to the company."
That bullish enough for you? The result was buyers stepping up for RMC and pushing it back
over $4, where it battled valiantly against the tide thanks to a follow-up NR, this time from
RMC, post-bell Wednesday (12) that announced the deal for the Timok exploration program
had finally been agreed upon by FCX and RMC and that the five drill rigs were now turning on
site. The good performance lasted until buying volume ran out on Friday (and even I have to
say that’s understandable under the wider sector circumstances).
12

NovaCopper (NCQ.to): NCQ sold off end-week, but before it was sucked down with the rest
of them it showed a low-volume rebound and some signals that the selling was now done.
Copper stocks did better on the whole than PM stocks last week, this one was part of that
trend.
Minera IRL (IRL.to) (MIRL.L): So much for the pop on high volume we noted last week, as
it now has all the look of a fat finger trade that didn’t see much follow-through at any point last
week. IRL quickly returned to its 9c-or-thereabouts trading number and stayed there (though
under the circumstances even that could have been a lot worse).
My thoughts of adding to my IRL position, as voiced last week, have been nipped in the bud by
the wholesale market selling dump. I’ll buy a few COP.to and have done this week, with a view
to seeing how the 3q14 numbers and the update on financing negotiations for Ollachea come in
on November 14th.
B2Gold (BTG) (BTO.to): Now I was the first to say (13) in the early hours of Tuesday 28th
that BTO’s 3q14 production and preliminary revenue numbers weren’t great (14) (NB, the
financials come Nov 13th or 14th)
but they were way better than
this chart makes them out.
Perhaps BTO is guilty of bad luck
and releasing a soft report at the
wrong time, but what I do know
is that my little fliptrade foray as
announced in the Flash update
of Tuesday (see Appendix 1)
was handed back to me with
(negative) interest very quickly
and as such, I closed that side-
trade (which was unconnected
to the larger long-term position
we have in the stock) at a loss.
BTO got treated harshly in the
sell-off, as market leader stocks tend to do. What was interesting was to see the brokerage
reports that tried their best to support BTO and point to 3q14 being the last of the bad quarters
being ignored by a market determined to sell and sell again. If I had bigger balls I’d buy more,
as it is I’m going to wait and see how things develop over weeks to Christmas.
We’ll take a close look at BTO when its 3q14 results are published. Until then, the side trade
has failed and is gone but the longer-term position will be held tightly. This looks cheap.
13

Rio Alto Mining (RIO.to) (RIOM):
Our Top Pick stock did not do well. It
did do less worse than the others which
may be connected to the glowing
reports from the anal ysts RIO.to took
on its site visit to La Arena and
Shahuindo the week before last. The
reports generally turned up last Sunday
or Monday, to a man (sadly they’re all
men) the anal ysts were impressed and
target prices were duly raised (the
consensus seems to be around the
CAD$3.50 level, which sounds fair
enough to me).
The Copper Basket
After forty-four weeks of 2014 The Copper Basket is showing a 16.43% loss to level stakes.
company ticker price 1/1/14 Shares out Market Cap current pps gain/loss%
1 Augusta Res AZC.to 1.51 144.41 541.54 3.75 148.3%
2 Lumina Copper LCC.v 6.29 44.07 440.70 10.00 59.0%
3 NGEx Resources NGQ.to 1.43 186.52 253.67 1.36 -4.9%
4 Reservoir Min. RMC.v 4.97 47.55 184.97 3.89 -21.7%
5 Nevada Copper NCU.to 1.35 80.5 144.90 1.80 33.3%
6 Hot Chili Ltd HCH.ax 0.425 333.11 71.62 0.215 -49.4%
7 Copper Fox CUU.v 0.375 402.96 66.49 0.165 -56.0%
8 Panoro Minerals PML.v 0.35 220.25 59.47 0.27 -22.9%
9 Western Copper WRN.to 0.76 93.68 56.21 0.60 -21.1%
10 NovaCopper NCQ.to 1.60 60.15 48.12 0.80 -50.0%
11 Curis Resources CUV.to 0.57 74.79 47.87 0.64 12.3%
12 AQM Copper AQM.v 0.11 139.24 9.05 0.065 -40.9%
13 Cordoba Min. CDB.v 0.90 58.81 7.06 0.12 -86.7%
14 Coro Mining* COP.to 0.10 159.37 4.78 0.03 -70.0%
15 Oracle Mining OMN.to 0.27 49.03 3.19 0.065 -75.9%
NB: HCH.ax priced in AUD$, rest CAD$ //CDB 2x1 split May'14 Portfolio avg -16.43%
The basket average dropped just over 2% but unlike the precious metals juniors, damage
wasn’t sectorwide. There were even three
that made upmoves (RMC.v, NCU.to, The Copper basket 2014, weekly evolution
25%
HCH.ax) along with three others that
20%
remained unchanged (LCC.v, AZC.to,
15%
WRN.to), though admittedly two of those
10%
are taken-over stocks and will remain unch
5%
for the rest of time. Of those, the best
0%
performance percentage-wise was the
-5%
13.2% rise in Nevada Copper (NCU.to) on
-10%
the week, which scores one point for
-15%
Bonifacio I suppose.
-20%
Which leaves nine downers and of those big
losses in percentage terms were taken by
Coro Mining (COP.to down 25.0%), Oracle
Mining (OMN.to down 23.5%), Cordoba Mining (CDB.v down 14.3%), NGEx Resources (NGQ.to
14
ht5naj ht91 dn2bef ht61 n2ram ht61 ht03 ht31 ht72 ht11 ht52 ht8 dn22 ht6luj ht02 dr3gua ht71 13guA ht41 ht82 ht21 ht62
source: IKN calcs

down 10.5%) and Copper Fox (CUU.v down 10.8%). Out of that lot, the only “live” stock is
NGQ.to and there’s a little more on that one below.
On to market prices for copper, which saw a far
better performance than anything precious. Not
that it was particularly good, just that it was less
worse and the tight-range trading reflected more
on the strength of the dollar than any copper-
related supply or demand issue.
The big talking point of the week was the reports
of Red Kite apparently taking a majority position
in LME copper stocks, though officially we only
know that one unnamed financial entity has
taken control of between 50% and 80% of the
LME inventory. The move was construed to be a
bullish one for copper and although I’m not sure
(see the blog post last week for more on that
(15)) the rounds of whispering have almost
certainly helped shore up the copper price this
week.
Now for the inventories section and as it’s the end of the month again, here are our overview
tracking charts for LME, Shanghai and Comex copper stocks.
Copper inventories, per month 2012-2014
1000000
900000
800000
700000
600000
500000
400000
300000
200000
100000
0
And now here are the standard weekly bullet points:
• Overall world stock levels moved up slightly for a second week, rose a little, going up a
slim 0.5% or 1,977 metric tonnes (mt) (+0.7%) to finish the week at 286,180mt.
• Shanghai Futures Exchange stocks stayed at 95,101mt, unchanged on the week.
• The LME copper warehouse inventories went up by a small amount for the third week
running. This week’s edition gave us an increase of 3,125mt (+0.2%) to finish at
162,675mt.
• Comex warehouse dropped again, down 1,148mt (-3.9%) to 28,404mt. There seems to
be a distinct change in direction here, potentially related to that Red Kite cornering.
Speculation on a smaller scale, perchance.
Now for some short commentary on three of our basket stocks:
NGEx Resources (NGQ.to): First a bit of clerical work and we had a note from the company
post-bell Friday that gave us the updated share count for NGQ, 186.515m (the table above’s
been adjusted accordingly, too).
15
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 tco
Mt Cu Copper inventories: percentage held per exchange
80
LME Shanghai Comex
70
60
50
40
30
20
10
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 tco
LME Shanghai Comex
source: Cochilco

Second, after my rant of last week on NGQ I received some interesting mail, specifically one
from a subscriber who knows the project area very well (I cannot ID the person any more
closely) who agreed with the argument put forward though being more of a gentleman than I,
did politely suggest that I should alter the tone next time in order not to alienate other readers.
Last weekend I signed off that rant with...
I will be most surprised if NGEx doesn’t see trading under $1 during 2015, it’s
going nowhere by burning its cash on expensive projects in the wrong part of
the world.
...and from the way in which this one traded last week, worst by quite some way of the “bigger
juniors” on our list and only beaten in the drops by the tinycaps and their illiquid “get my out at
any price” dynamic, we might not have to wait until 2015 to see those prices.
Copper Fox (CUU.v): The pump on rumours two weeks ago is now completely reversed.
Nothing doing in this dead stock.
Nevada Copper (NCU.to): One of the things that bullshit companies do is run bullshit tape
painting exercises on their stock prices.
This is BS, from a company that’s going nowhere. Avoid.
The Low Cost Producer Basket
After 44 weeks, the Low Cost Producer Basket is showing a 18.53% loss to level stakes
company ticker price 1/1/14 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Freeport FCX 37.74 1040 29.64 28.50 -24.5%
2 Goldcorp GG 21.67 812 15.25 18.78 -13.3%
3 Barrick ABX 17.63 1000 11.87 11.87 -32.7%
4 Newmont NEM 23.03 497.87 9.34 18.76 -18.5%
5 Franco Nevada FNV 40.74 155.39 7.26 46.75 14.8%
6 Silver Wheaton SLW 20.19 357.39 6.21 17.37 -14.0%
7 Agnico Eagle AEM 26.38 173.43 4.08 23.50 -10.9%
8 B2Gold BTG 2.02 948.9 1.58 1.67 -17.3%
9 Pan American PAAS 11.70 151.41 1.40 9.23 -21.1%
10 First Majestic AG 9.80 117.02 0.60 5.13 -47.7%
all prices in U$, using NYSE ticker prices Portfolio avg -18.53%
16

They all dropped, and here’s a little picture so that I don’t have to speak a thousands words:
Week-over-Week % change in basket components
0%
-5%
-7.5%
-10%
-15% -12.7% -12.4% -12.2% -12.0%
-15.6%
-15.7%
-20% -18.5%
-19.5%
source: NYSE
-25% -24.1%
AG AEM BTG NEM GG FNV PAAS ABX SLW FCX
A crushing amount of market
capitalization was wiped from the The Low Cost Producer Basket: Weekly performance and
precious metals majors last week and comparative to GDX control
40%
it with those having the bad timing of
30%
posting poor quarterly numbers that
were hardest hit hit hardest. Agnico 20%
Eagle (AEM) was whacked to the tune 10%
of nearly 20% thanks to the earnings 0%
miss Wednesday (the net loss is one -10%
thing, but the post-adjusted 2c -20%
earnings was still a nautical mile away -30%
from the 15c consensus).
Meanwhile, over at the performance
guide the basket has, under the worst
circumstances possible, taken over and is now
performing better than its GDX benchmark.
Admittedly only by 0.02% and with both at
minus 18% after last week’s debacle it’s
nothing to be proud about, but it is the first
time this year that it’s happened. FCX “only”
dropping 7.5% plus GDX carrying some of the
nastiest droppers of them all such as KGC and
AUY are part of the story as well.
We could take a look at several companies, as
there were plenty of quarterlies posted last
week, but instead of spreading things too thinly
I’d like to keep a (strained) smile on my face by featuring just one of the better sets of
numbers, given to us by Barrick (ABX) last week. Still, the main message of our low cost tracker
should be clear by now; the whole of the world of mining, large and small, went through hell
last week, not just our preferred junior sector.
Barrick Gold (ABX): It was a case of no good deed going unpunished for ABX last week, as
the company announced a good 3q14 financial result on Wednesday and was greeted by
sectorwide selling that knocked 10% off of its market cap as a result. As this comparative chart
of ABX (shaded) versus its two closest peers (GG, NEM) as well as the main miners ETF (GDX)
and the gold bullion ETF (GLD), Barrick didn’t see quite as much selling as others, but really two
or three percentage points when everything drops the way it dropped is akin to pissing in the
wind.
17
ts13ceD ht21 ht62 ht9 dr32 ht9 dr32 ht6rpa ht02 ht4yam ht81 ts1nuj ht51 ht92 ht31 ht72 ht01 ht42 ht7peS ts12 ht5tco ht91 dn2von
basket
gdx control
source: Yahoo! Finance, IKN calcs
Low Cost Basket: Percentage difference between
basket and GDX control, 2014
8%
6%
4%
2%
0%
-2%
ts13ceD ht21 ht62 ht9 dr32 ht9 dr32 ht6rpa ht02 ht4yam ht81 ts1nuj ht51 ht92 ht31 ht72 ht01 ht42 ht7peS ts12 ht5tco ht91 dn2von
source: ikn calcs, NYSE/Nasdaq data

Market reception aside, ABX did put in a strong quarter of operations and the headline
paragraph offered by the company Wednesday evening (16)...
TORONTO, ONTARIO--(Marketwired - Oct 29, 2014) - Barrick Gold
Corporation ( ABX )( ABX.TO ) (Barrick or the company) today reported third
quarter net earnings of $125 million ($0.11 per share). Adjusted net earnings
were $222 million ($0.19 per share). Operating cash flow was $852 million.
The company reported strong quarterly results with solid production and lower
than expected costs which drove the second reduction to annual all-in
sustaining cost guidance this year.
...had plenty of good content to it. Cash costs came in lower than guided, which fits in with our
industry-wide feelers of the last couple of months and how prices for most everything mining
related, from rebar to consultancy fees, have dropped away. The 11c/share bottom line EPS
was a 3c beat to market expectations (costs were key to that). Meanwhile at the balance sheet,
working cap stood at a tad under $4.3Bn and the management talked on the conference call
about its plans to reduce financial debt by around $3.5Bn (from the current ~$10.5Bn to a
guided $7Bn), with the strong inference that asset sales or buy-ins for joint ventures were in
the cards. This part fits in with the very well-sourced rumours from Chile picked up and
reported on these pages early in the year about Chinese money wanting in on a JV with ABX for
Pascua Lama, a story that’s gone cold as the year has worn on due (likely) to the gold price
travails and the permitting delays and court cases over environmental charges in Chile.
What ABX has shown in this quarter is that it’s got over the hump of the major write-downs and
as a result can turn its free cash flow into bottom-line profits, even in the lower gold
environment of today. It’s keen on improving its balance sheet position (balance-nerd that I
am, I was encouraged to hear and see the amount of emphasis ABX gave to this point in both
filings and the CC) though it was also at pains to point out that the debt repayment schedule
for the next three years is very light, with another three years of reasonably light to follow, so it
didn’t feel under any crushing financial pressure any longer. The key from here will be
operations and as ABX can now pass Rule One fairly easily with gold (and copper) where they
are, I came away from the week thinking, for the first time in a long time, that ABX had been
somewhat harshly treated by the market due to the sell-off. There are worse mining companies
out there.
Regional politics
The busy 2014 LatAm election season is nearly over, on to 2015
We have the regional second round run-offs in Peru to mop up (eg Puno, one we’ve followed
18

closely over the weeks) and those should be done by mid-December. Then we have the
Uruguay Presidential election second round run-off, which looks a near certain win for once-
and-future President Tabaré Vázquez. Once those are done a busy electoral season for LatAm
comes to a close in 2014.
Looking forward to 2015, the regional election scenario is considerably lighter. Aside from minor
regional matters there are four elections of import next year:
• Slated for July 2015, Mexico holds parliamentary (not Presidential) elections that
can change to power balance of its Congress and affect regional attitudes
towards/against mining.
• Slated for September 2015, Guatemala holds its general election that will decide
the successor to current and pro-mining President Otto Pérez Molina.
• Some time in 2015, Haiti is supposed to hold Presidential elections though no firm
date is known as yet. We’ll see when (if?) as the year progresses.
• Slated for October 2015, Argentina holds its Presidential election to decide the
successor to Cristina Fernández de Kirchner.
Of the three, by far the most important in regional political terms is the Argentina election
(something you may have gathered already as we’ve been following the early stages of the
campaign and candidates’ jockeying for position already, with still a year to go). The Argentina
2015 election will not be just about Argentina; it will affect the left/right balance of political
power and stability in the whole of South America (with effects potentially felt in Central
America and the Carib too) and is of far greater importance than the recently completed Brazil
vote on the international scale. Just don’t tell any Argentines that you might know, because
they’re too full of themselves already and don’t need to hear that the 2015 vote is of
international importance. However, for the time being only the bravest or most foolhardy
should consider an investment in the mining sector there. I’ll be in the queue for the very cheap
assets if things go in the right direction, but it’s way too early to call anything.
Indigenous report Peru’s government to the International Court of Human Rights
Last week (17) a collection of indigenous support groups in Peru, from all regions of the country
including jungle, Southern highlands, northern coastal, Cajamarca etc, took their grievances to
the International Court of Human rights (CIDH) and made formal compliant against the
government of Ollanta Humala, saying that the national government was criminalizing
legitimate social protests. Case studies were offered by the indigenous party including that of
Xstrata in Espinar, oil companies in the Loreto jungle, logging companies in the Amazonas
jungle, the Cañariaco copper project in Lambayeque, the Tia Maria copper project in Arequipa,
the Conga gold project in Cajamarca, among other examples.
Ecuador: New draft mining law expected this month
According to officials last week (18), the government of Rafael Correa expects to send a new
draft mining law for debate to the national parliament this month of November 2014. No word
on any of the details of the content, nor should we try and second guess whether passage
through congress is fast or slow (Ecuador being what Ecuador is). However, the idea to smooth
things for FDI has been on the table since August when Correa came out with his mea culpas
and told his country (via his standard Saturday TV/radio show) that the new law as stands has
hindered more than helped and something has to be done. It also comes on the heels of an
executive order dated October 27th (19) that has set Windfall Tax levels at a higher level the
“State burden adjustment” to the levels expected by Lundin Gold (20) in its recent marketing
pitch PDF (that slide reproduced here).
19

Peru: Copper production disappointing in 2014
September production figures for metals in Peru were published on Friday evening and the one
that the country worries most about (or should at least) is copper. Here’s the monthly
production evolution chart from the IKN files...
Peru: Copper production per month
140000
130000
120000
110000
100000
90000
80000
70000
60000
50000
20
90naj yam pes 01naj yam pes 11naj yam pes 21naj yam pes 31naj yam pes 41naj yam pes
source: MEM
sennot
cirtem
...which shows the way in which production dropped in September when it should have done.
This next chart below shows how Peru’s copper output for the first three quarters of 2014
compares against recent years. The trend is higher, but the meagre 1.41% difference between
the 2014 and 2013 periods compares against the predictions of 9.1% growth in the national
metals sector that came from the Ministry of Energy and Mining (and repeated without a
second thought by the compliant bizpress, it probably goes without saying) at the time, plus a
12% growth expected in the key copper subsector. That forecast was kept in place until April
this year (21) when it was revised downwards, and sharply, to 1.9% (with nearly all the
expected growth coming from copper). Therefore what we’re seeing here fits the adjusted
forecast.

Peru: Copper production in first three quarters, per year
1200000
1100000 1003529 1017676
1000000 915591 899308 945959
900000
800000
700000
600000
500000
400000
300000
200000
100000
0
to 3q10 to 3q11 to 3q12 to 3q13 to 3q14
source: MEM
21
uC
sennot
cirtem
Chinalco’s Toromocho was supposed to be the great new hope and driver of the mining
economy in 2014, that’s not turned out
Toromocho: 2014 monthly copper production
the way the government (or the
company) had expected so far. Ramping 10000
of the massive operation has been slow
8000
and if we recall a blog post from a
couple of months ago (22), in September
6000
2013 JP Morgan forecast Toromocho’s
2014 copper output at 167,000 tonnes, 4000
then in September 2014 dropped that
2000
forecast to 85,000 tonnes. Fact is that
it’s not going to get near even that 0
steeply dropped forecast Jan14 feb mar apr may jun jul aug sep
source: MEM
Added to that mine’s glitches, production
slumps at Antamina (33% down on the same month of 2013) and Cerro Verde (6% down on
the same month of 2013) were other trouble spots.
Market Watching
Timmins Gold (TGD) (TMM.to) 3q14 results
Timmins Gold (TMM.to) (TGD) reported its quarter on Tuesday evening (early for a junior) and
although the numbers really weren’t that bad at all (generally in-line with the IKN model
expectations, in fact a little better in
some places) the call this weekend is to
sell and lighten. As already noted in
today’s intro section, that’s all about
portfolio management and raising cash
on a personal basis, plus the way in
which its M&A target potential has
dropped in light of this most crappy of
markets. Let’s do the numbers:
Revenues at $34.235m were right on my
forecast (to within $15,000), which was
easy to get because TMM had already
announced production.
reppoC
sennoT
TMM.to/TGD: Revenues
50 45.889 47.05
45 41.748 40.596 41.516 42.383
40 35.688 38.16 35.123 38.065 34.235 36.25
35
30
25
20
15
10
5
0
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
U$m
source: company filings, IKN ests

Timmins Gold (TMM.to) (TGD): Quarterly gold sales
40000
35000
30000
25000
20000
15000
10000
5000
0
22
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
Oz Au
source: Company filings
COGS at $27.26m were $2.74m lower than my forecast, which is a good thing, though part of
the latest pattern in the cost-cutting world of mining. This charts shows that TMM’s overall
costs were the lowest since this time last year, though the lower production number helped
keep things under control in absolute terms. G&A came in basically as expected.
TMM.to/TGD: Costs breakdown
40
36
32
28
24
20
16
12
8
4
0
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
U$m
other
impairment
G&A
COGS
source: company data, IKN ests
This chart shows how the operating numbers translate into profits:
TMM.to/TGD: baseline mine financials, 2012-2014
U$m
50 revenues COGS Gross profit op profit Net Income
45
40
35
30
25
20
15
10
5
0
source: TMM data
-5
1q12 2q12 3q12 4q12 1q13 2q13 3q13 4q13 1q14 2q14 3q14
The 3q14 operating profit of $3.914m was $1.4m above the IKN model and the net of $1.567m
was a million over the house guess. Those are good enough, but there’s not much there to
cause a massive earnings boost and price catalyst, either. As for balance sheet items, I’ll stick
with just one and show the working capital chart because 3q14 saw it drop slightly on what
looks like extra sustaining capex spend. The best guess for 4q14 is a working cap that comes in
roughly equal to today’s number, which means it’s dropped away from our original estimates
made in 2q14 by about $10m, and that’s a lot of money.

100 TMM.to/TGD: Working Capital per qtr
90
80
70
60
50
40
30
20
10
0
23
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
source company filings, IKN ests
srallod
fo
snoillim
It seems it was easy for people last week to do what I’m doing this weekend, that’s to say look
for things that have more downside potential in a soft gold market, zoom in on TMM and dump
it. What we have today is a company that needs to cut costs further in order to make ends
meet in this lower-priced gold environment. TMM will offer strong upside leverage if gold
reverses, but that’s also true of many other of my holding today and right now, the desire to
raise cash trumps the reluctance to sell a not-bad-not-great gold miner that’s apparently lost its
chance at being a takeover target. I sell and take my loss.
Burkina Faso and a rant about political risk
It’s not in LatAm, it falls outside my geographical specialty, I really don’t know much about the
place. I’d appreciate it if you re-read these first two lines once you’ve finished the rest of this
short piece. With that, there are two things I want to get off my chest after watching the
Burkina Faso protests unfold last week as both carry a wider message.
Thing One: Kneejerk reaction fail.
I watched from nearly the sidelines as the political falling apart developed on Thursday (the
“nearly” due to some minor exposure to the country via B2Gold and its Kiaka project, which is
hardly a price driver at the moment). My watching included reading a couple of “sell now” calls
from a couple of very widely read newsletters (not naming them) who have deeper exposure to
the country via companies such as Roxgold, Orezone, Endeavour Mining and True Gold (that
last one I managed to miss of course, sold earlier this year and broke even, luck fell my way for
a change).
While the witnessing was going on I also exchanged with a couple of regular mailpals (both
market pros and highly respected in their fields) and my point to them was contrarian, with my
basic thought that the sudden calls to dump everything that touches Burkina Faso looking like
overreaction. As I wrote (sadly I only have two witnesses), “...What makes 1) govt protests an
automatic coup and then 2) any new govt automatically miner / FDI unfriendly here? If you can
answer those to your satisfaction, dump away. Until then I smell kneejerk...”. Implicit in that
message was the way in which some commentators who had been at the very forefront of
promoting the country and telling us all it was a great place to go and do mining were now
leading the calls to get the hell out of there. When there’s no nuance given by people who
“know”, when those calls are binary and done on the spur of moments, it doesn’t smell right.
As this five day chart of the two most exposed juniors out there, Roxgold and True Gold,
shows, above and beyond the awful week for the sector and above and beyond what did
happen in the country and what might happen next week (see below), anyone who joined in
the panic generated by the “sell now!” brigade and dumped into Friday’s open lost far more
than they should have lost on their trade.

And as it happens, the latest news from (23) from Burkina Faso is relatively positive. The
unloved President has fled (to Ivory Coast, they say), the army has taken charge, it has chosen
an interim leader to get the country to new elections in 90 days’ time, the streets are reportedly
calm, key player France seems happy with events. Here’s an excerpt from the linked report:
A western diplomat based in Ouagadougou said on Saturday: “It’s done. It’s over. It’s
extraordinary. I’ve been driving around this morning and there is sweeping up going on
all over town. The same adults and children who were going out demonstrating are
now out with dustpan and broom. I’ve never seen anything like it.”
He added: “In 24 hours it seems to have gone right back. Small businesses have
reopened everywhere. It’s nearly a normal Saturday except the supermarkets are
closed and there’s a certain euphoria in the air.”
Now like I say I’m no expert on Burkina Faso but this is not looking like a bloody coup scenario,
nor outright revolution against everything and anything that ex-President Compaoré
represented. Not yet anyway (that’s as far as my op-ed comfort zone takes me). I’d venture a
guess that those who dumped ROG.v, TGM.v and others are going to suffer sellers’ regret next
week, other market conditions ceteris paribus.
Thing Two: I don’t trust mining companies, investor realtions departments, smooth-
talking CEOs, brokerage mining analysts, mining newsletter writers, mining sector
commentators and neither should you.
In which I rant and attempt to have my cake and eat it, so feel free to get annoyed with me
and call me names under your breath.
Picking up on this Burkina Faso ball and running with it a little further there’s a more general
point to make: The reason I cover LatAm is that I’m not totally in the dark about the region,
only semi in the dark. For sure I’ve bought stocks in places outside of Latin America (right now
Dalradian are the best example to offer, but I’ve held stocks working Canada, Africa,
Philippines/Oceania, places on the European continent, etc etc) and even recently in Burkina
Faso itself for a while this year via True Gold (TGM.v). But my focus is and always will be LatAm
and though I’m not averse to a trade in other areas, LatAm will always be the lion’s share of
The IKN Weekly.
I know that today’s world of mining investment needs a sharp eye on the political surroundings
of any project and whether the trouble might stem from a local, regional or national
government, pressure group of simply a collection of citizens that don’t want mining in their
locality, it pays to know about what’s going on politically before you wade into a trade, rather
than afterwards. My feelings get made clear on this subject just about every time I’ve ventured
24

away from my preferred LatAm region (to the point of boring you all silly, I know). Sometimes
I’m more confident about local and/or government support (e.g. Northern Ireland and
Dalradian), sometimes the feeling is more leery but it works out (e.g. OceanaGold in
Philippines) while in the specific case of West Africa (not just Burkina Faso, but West Africa) the
nerves have always jangled more than in most places. I’ve spent a decent slug of my weekend
thinking as to just why that might be and I’ve got it down to two specific reasons:
a) West Africa is traditionally a politically unstable region.
b) Mining companies are forever telling me that it’s more stable than I think it is.
Pretty simple I know and the first one really is an “as is” statement. It’s the second one that
gets me, because (as I noted to my mailpals) I can feel the smoke being blown up my rectum
every time I read a corporate presentation that tells me about the stable African democracy in
which they're investing. Why so? It goes something like this:
1) Learn about a region or area of Latin America.
2) Find out about its strong points and weak points
3) Then read a corporate presentation of a mining company working in that
specific region of LatAm.
4) In their literature I read about the strong points only, any weak points or
doubtful areas of political, regional or community risk are conveniently left
out.
5)
Then read a corporate presentation about an area of the world that I know
little or nothing about, for topical example Burkina Faso in West Africa
6) Read about the strong points and recognize the same type of issue-
skipping that I see in LatAm corporate presentations.
7) The only difference is that I don’t know what’s being left out. But the style
is the same and the obvious omission of something is there. I know there’s
smoke, I know it’s being blown into...errr...my eyes, the difference is that I
don’t know what’s behind that smoke. When it comes to LatAm, I at least
have a chance of knowing or finding out.
That and the basic fact that I’ve learned to trust anybody who works in or around mining only
after they’ve given plenty of evidence to show that they’re trustworthy. For your own financial
health and sanity you must start every single person in the population of this scumball sector at
zero trust and then the best can start earning yours, the worst never get to leave the starting
gate. Nonetheless, I still see a lot of “if it’s printed it must be true” reflections from the anal ysis
community, plenty of near verbatim re-hashing of corporate presentations, a whole bunch of
“he said it in his report, I’ll say it in mine” laziness and that’s a part of my reticence on diving in
when everyone else is peddling the latest hot deal promo vehicle. And surprise surprise, when
the political atmosphere goes wrong those are the same people who tend to lead the charge
out of a region or stock on initial panic reactions.
And here, down at the bottom of this rambling rant, is the reason why I made the title line of
this piece as long as it is. No matter how bad the previous call, the audience still reacts to its
voice of authority and why that should be is a question for the psychologists out there, not a
pissy little letter writer such as I. That’s to say the person who a) said region X is safe gets b)
people invested into region X but if c) the call goes bad, the very same person d) makes
another alert or urgent call to get people out at which point e) it doesn’t occur to the readership
that it’s the same dubious opinionater voicing an opinion so they f) make a collective dive for
the door. Seriously, what the devil is that? I’ve have thought the last person you’d want to take
advice from at such moments is the person who previously gave out bad advice on the exact
same subject and has been proven 100% wrong, but it doesn’t seem to happen that way.
25

Conclusion
IKN286 is done, we end with bullet points:
• I sell, take losses, raise cash, lick my wounds and reflect on my trading errors. The
fliptrade in BTO has already been changed back into (less) cash, next week Timmins
and Kinross get sold. Portfolio management is not a reflection on companies, it’s a
reflection on me.
• Meanwhile, I’m going to add some to my holding of Coro Mining (COP.to) due to the
overselling of the last few days and the opportunity that’s arisen. This buy won’t take
much of the cash that’s being raised and it’s an exception to the new “raise cash” rule.
• From the sounds of friends, clients and colleagues, the Goldman Sachs $1,050/oz
forecast is being accepted as some sort of fait accompli. I’ve even had people telling
me it’s because GS is short bullion and when it dings their price they’ll flip around, go
long and ride the gold upwave. It all sounds rather too convenient for me, all I really
see and can identify is capitulation in the stocks sphere.
• We’re moving into tax loss selling season, which is one of the reasons I want to sit on
some more cash.
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://incakolanews.blogspot.com/2014/10/the-goldcopper-ratio-revisit.html
(2) http://www.calculatedriskblog.com/2014/11/schedule-for-week-of-november-2nd.html
(3) http://finance.yahoo.com/news/dalradian-announces-pea-36-2-121712059.html
(4) http://incakolanews.blogspot.com/2014/10/dalradian-dnato-provides-market-litmus.html
(5) http://finance.yahoo.com/news/dalradian-announces-pea-36-2-121712059.html
(6) https://www.canadianinsider.com/node/7?menu_tickersearch=COP+%7C+Coro+Mining
(7) http://incakolanews.blogspot.com/2014/10/pinetrees-liquidity-issue.html
(8) https://www.canadianinsider.com/node/7?ticker=UWE
(9) https://www.canadianinsider.com/node/7?ticker=AGG
(10) https://www.canadianinsider.com/node/7?menu_tickersearch=FCV+%7C+Focus+Ventures
(11) http://incakolanews.blogspot.com/2014/10/lets-see-what-freeport-fcx-has-to-say.html
(12) http://finance.yahoo.com/news/reservoir-minerals-reports-resumption-drilling-215541549.html
(13) http://incakolanews.blogspot.com/2014/10/b2bold-btg-btoto-3q14-production.html
(14) http://finance.yahoo.com/news/b2gold-reports-2014-third-quarter-073000693.html
(15) http://incakolanews.blogspot.com/2014/10/yes-red-kite-has-taken-majority.html
26

(16) http://finance.yahoo.com/news/barrick-reports-third-quarter-2014-212948906.html
(17) http://www.larepublica.pe/31-10-2014/indigenas-peruanos-denuncian-criminalizacion-de-la-protesta-social
(18) http://www.ecuadortimes.net/es/2014/10/31/camara-de-mineria-considera-que-ley-esta-incompleta/
(19) http://decretos.cege.gob.ec/decretos/
(20) http://incakolanews.blogspot.com/2014/10/the-most-interesting-slide-of-lundin.html
(21) http://www.bcrp.gob.pe/docs/Publicaciones/Reporte-Inflacion/2014/abril/reporte-de-inflacion-abril-2014.pdf
(22) http://incakolanews.blogspot.com/2014/09/expert-copper-supply-predictions.html
(23) http://www.theguardian.com/world/2014/nov/01/burkina-faso-military-leaders-isaac-zida-honore-traore-blaise-
compaore
Appendix 2: Focus Ventures (FCV.v) insider purchases, August to October 2014
27

Appendix 1: Flash update dated Tuesday October 28th
Good Tuesday morning, we're roughly 43 minutes after the opening bell, warm and sunny outside.
B2Gold (BTG) (BTO.to): A decent flip-trade opportunity today
As noted on the blog pre-open...
http://incakolanews.blogspot.com/2014/10/b2bold-btg-btoto-3q14-production.html
...the 3q14 production numbers from BTO were disappointing. However, the market seems to be overreacting over
news that's hardly a disaster either. Plus the run-up to the NR in the last few days had already baked enough negativity
into the stock price.
BTO looks good as a very-near-term trade buy here and I'm going to take some of the U$1.90 or U$1.92 offered right
now, with the view to selling them back before the end of the week. Two main notes to the trade:
1) I'm buying before the FOMC reports tomorrow, that's always a trappy thing for a gold stock.
2) This is considered separate from the longer-term position in BTG I currently hold, because I don't expect to hold this
new position come ned Friday.
Best, O
Stocks To Follow Closed Positions 2013
Closed in 2013 closed close price
USA Graphite USGT feb'13 U$0.93 08-ene-13 U$0.17 81.7% short tgt made/trade closed
Lachlan Star LSA.to feb'13 C$1.50 30-sep-12 C$0.95 -36.7% sold to reduce port risk
United Silver USC.to mar'13 C$0.21 28-oct-12 C$0.095 -54.8% small Ag sector trade, failed
Aurcana Corp AUN.v apr'13 C$1.07 11-nov-12 C$0.55 -48.6% closed on poor YE results
Gold Res Corp GORO apr'13 U$14.11 25-ene-13 U$9.38 33.5% short tgt made/trade closed
Marlin Gold MLN.v apr'13 C$0.075 10-feb-13 C$0.065 -13.3% closed trade
Bear Creek BCM.v may'13 C$2.58 01-abr-13 C$2.40 -7.0% near-term, time ran out
Lupaka Gold LPK.to may'13 C$1.12 23-oct-11 C$0.32 -71.4% towel thrown in
Tahoe Resources TAHO may'13 U$18.62 08-abr-13 U$14.70 21.1% took profit on ST short
OceanaGold OGC.to jun'13 C$3.03 16-sep-12 C$1.18 -61.1% sold on gold drop
IMPACT Silver IPT.v jun'13 C$1.14 13-ene-13 C$0.62 -45.6% sold on silver drop
Duran Ventures DRV.v jun'13 C$0.045 10-may-13 C$0.025 -44.4% ST trade never worked
Plata Latina PLA.v jun'13 C$0.79 10-abr-12 C$0.13 -83.5% closed
Bellhaven BHV.v jun'13 C$0.065 03-jun-13 C$0.12 84.6% closed ST trade
B2Gold BTO.to aug'13 C$3.07 28-nov-12 C$3.44 12.1% sold 1/2 to raise cash
Colossus Min. CSI.to aug'13 C$0.72 24-jul-13 C$0.79 9.7% closed thru nerves on future
Pretium Res PVG.to aug'13 C$8.20 11-jun-13 C$10.14 23.7% closed to raise cash
Bear Creek BCM.v sep'13 C$2.06 30-may-13 C$2.20 6.8% sold on pol risk decision
MAG Silver MVG oct'13 U$7.00 12-sep-13 U$5.62 19.6% near-term short
Gold Res Corp GORO oct'13 U$9.52 03-may-13 U$4.98 47.7% short tgt made, covered
AQM Copper AQM.v oct'13 C$0.31 16-oct-11 C$0.125 -59.7% closed failed trade
First Majestic AG nov'13 U$11.51 07-nov-13 U$10.50 8.8% v near term short, closed
Fortuna Silver FSM nov'13 U$4.00 07-nov-13 U$3.68 8.0% v near term short, closed
Primero PPP nov'13 U$5.70 07-nov-13 U$5.75 -0.9% v near term short, closed
Starcore Intl SAM.to nov'13 C$0.235 08-sep-13 C$0.17 -27.7% ST trade didn't work, sm loss
B2Gold BTO.to dec'13 C$2.22 28-nov-12 C$2.16 -2.7% closed ST trade to raise cash
28

Stocks To Follow Closed Positions, 2012
Closed in 2012 closed close PPS
Soltoro SOL.v jan'12 C$0.87 07-nov-11 C$0.94 8.0% cash moved to BCM.v
Gold-Ore Res GOZ.to feb'12 C$0.84 13-oct-10 C$0.98 16.7% trade closed on ELG.v offer
Minefinders MFN feb'12 U$11.68 17-nov-11 U$14.80 26.7% target made, trade closed
Iron Creek IRN.v mar'12 C$0.58 26-sep-10 C$0.31 -46.6% time up on small bad trade
U.S. Silver USA.to apr'12 C$2.18 15-mar-12 C$1.86 -14.7% ST trade no good, cut loss
Augusta Res. AZC.to may'12 C$3.10 29-jan-12 C$2.07 -33.2% bad mkt, bad trade cut loss
Bellhaven BHV.v may'12 C$0.50 22-sep-10 C$0.28 -44.0% new mgmt not impressive
Zincore Metals ZNC.to may'12 C$0.325 29-jul-11 C$0.17 -47.7% bad mkt, bad trade cut loss
Soltoro SOL.v may'12 C$0.70 18-mar-11 C$0.41 -41.4% bad mkt, bad trade cut loss
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% fail ST trade close pre split
Estrella Gold EST.v aug'12 C$0.91 27-mar-11 C$0.14 -84.6% Closed on port realignment
Fortuna Silver FVI.to sep'12 C$1.07 03-may-09 C$5.32 397.2% sell call $6.17/ Mar25
Strait Minerals SRD.v oct'12 C$0.125 09-dec-11 C$0.12 -4.0% closing coverage til FY13
Sunward Res SWD.to oct'12 C$1.47 13-mar-11 C$1.21 -17.7% sold, took loss
Gold Res Corp GORO oct'12 U$21.47 09-sep-12 U$17.40 19.0% Short trade closed
Yellowhead Min. YMI.to nov'12 C$1.00 01-apr-12 C$0.63 -37.0% sold, took loss
Primero Mining PPP nov'12 U$7.26 07-oct-12 U$6.73 7.3% Short trade closed
Bear Creek Min. BCM.v nov'12 C$3.38 07-nov-11 C$3.72 10.1% Took small profit
Vena Resources VEM.to dec'12 C$0.70 31-may-09 C$0.18 -74.3% Failed trade (caps F)
Galway Res GWY.v dec'12 C$2.19 24-nov-12 C$2.30 5.0% closed good ST arb trade
Stocks To Follow Closed Positions, 2011
Closed in 2011 closed close PPS
Sunward Res SWD.v jan'11 C$1.05 21-nov-10 C$1.63 55.2% target made, trade closed
Serengeti Res SIR.v mar'11 C$0.245 05-dec-10 C$0.285 16.3% sold pre-tgt, ST trade fail
Fronteer Gold FRG apr'11 U$2.37 03-may-09 U$15.24 543.0% buyout, trade closed
Minefinders MFN apr'11 U$9.09 07-nov-10 U$16.89 85.8% target made, trade closed
Metalline Min. MMG may'11 U$1.04 26-jan-11 U$0.89 -14.4% exit, resource disappointed
Peregrine Met PGM.to jul'11 C$0.87 06-mar-11 C$2.60 198.9% buyout offer, closed
Dynasty Metals DMM.to jul'11 C$4.20 03-may-09 C$2.85 -32.1% Sold. Fail. Move on.
Aura Silver AUU.v aug'11 C$0.22 13-oct-10 C$0.16 -36.4% Bad pick. Take loss
U.S. Silver USA.v aug'11 C$0.52 26-jan-11 C$0.71 36.5% closed to make room
B2Gold Corp BTO.to sep'11 C$2.80 12-may-11 C$4.27 52.5% target made, trade closed
Bear Creek Min. BCM.v sep'11 C$3.80 27-may-11 C$4.17 9.7% macro sell call victim
Minefinders MFN sep'11 U$14.70 10-aug-11 U$15.15 3.1% macro sell call victim
Great Panther GPR.to sep'11 C$3.03 22-aug-11 C$2.64 -12.9% macro sell call victim
Fortuna Silver FVI.to sep'11 C$1.07 03-may-09 C$5.36 400.9% sold 20%, macro sell call
Focus Ventures FCV.v nov'11 C$0.40 20-apr-10 C$0.20 -50.0% cut losses, bad trade
Regulus Res. REG.v dec'11 C$1.17 14-aug-11 C$0.52 -55.6% cut on news of poor 43-101
2009 and 2010 closed positions in appendices below
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Stocks To Follow Closed Positions, 2010
Closed in 2010 closed close PPS
B2Gold Corp BTO.to Jan'10 C$0.88 08-nov-09 C$1.49 68.2% target made, trade closed
Radius Gold RDU.v Jan'10 C$0.18 23-aug-09 C$0.40 122.2% target made, trade closed
MAG Silver MVG mar'10 U$5.60 23-nov-09 U$7.28 30.0% closed in pdac week
Riverside Res RRI.v mar'10 C$0.435 20-sep-09 C$0.60 37.9% closed in pdac week
Amarillo Gold AGC.v mar'10 C$0.81 31-may-09 C$0.70 -13.6% closed in pdac week
B2Gold Corp BTO.to apr'10 C$1.24 18-feb-10 C$1.50 21.0% target made, trade closed
Lumina Copper LCC.v apr'10 C$0.84 14-jun-09 C$1.55 51.2% total position now sold
Troy Resources TRY.to may'10 C$1.10 03-may-09 C$2.25 104.5% sold on negative results
AuEx Ventures XAU.to may'10 C$2.51 24-may-09 C$3.38 34.7% trade closed
Nevada Copper NCU.to jun'10 C$3.27 14-mar-10 C$2.03 -37.9% need to lower Cu exposure
Carpathian Gold CPN.to jun'10 C$0.39 14-mar-10 C$0.35 -10.3% too exposed to cap raising
Amerix PM Corp APM.v jun'10 C$0.065 08-nov-09 C$0.05 -23.1% victim of macro bear
Antares Minerals ANM.v jun'10 C$1.42 06-dec-09 C$2.10 47.9% sold half
Vena Resources VEM.to jun'10 C$0.37 31-may-09 C$0.23 -37.8% sold half
Minera Andes MAI.to sep'10 C$0.75 28-jul-10 C$0.95 26.7% ST trade closed
Gold-Ore Res GOZ.to sep'10 C$0.52 01-aug-10 C$0.75 44.2% target made, trade closed
B2Gold Corp BTO.to sep'10 C$1.45 25-may-10 C$2.01 34.5% target made, trade closed
Blue Sky Uran BSK.v oct'10 C$0.41 19-may-10 C$0.22 -46.3% v small v bad trade closed
Dia Bras Expl DIB.v oct'10 C$0.14 30-aug-09 C$0.35 150.0% target made, trade closed
S. Amer. Silver SAC.to nov'10 C$1.38 24-oct-10 C$1.60 -15.9% loss on short, small fail
Ventana Gold VEN.to nov'10 C$7.92 27-jun-10 C$13.51 70.6% trade closed on buyout
Lumina Copper LCC.v nov'10 C$1.42 11-aug-10 C$3.65 157.0% trade closed
Antares Minerals ANM.v dec'10 C$1.42 06-dec-09 C$8.40 491.5% trade closed
Rio Alto Mining RIO.v dec'10 C$0.69 23-mar-10 C$2.16 213.0% trade closed
Coro Mining COP.to dec'10 C$0.585 03-oct-10 C$1.24 112.0% target made, trade closed
Stocks To Follow Closed Positions, 2009
Closed positions closed closing PPS
Cardero Res CDY/CDU.to May'09 U$1.20 03-May-09 U$0.87 -27.5% sold on negative news
Eastmain Res. ER.to May'09 C$1.04 06-May-09 C$1.315 26.4% trade closed
Radius Gold RDU.v May'09 C$0.165 03-May-09 C$0.235 42.4% trade closed
Latin Amer Min. LAT.v May'09 C$0.12 03-May-09 C$0.158 29.2% trade closed
Aquiline Res. AQI.to July'09 C$2.03 16-Jun-09 C$1.68 -17.2% took loss, bad timing
Chariot Resources CHD.to Aug'09 C$0.20 12-Jul-09 C$0.415 107.5% trade closed
Castle Gold CSG.v Sep'09 C$0.64 02-Aug-09 C$0.60 -6.3% ST trade didn't work out
Guyana Goldfields GUY.to Sep'09 C$2.30 12-May-09 C$4.50 95.7% profit taken
Los Andes Copper LA.v Sep'09 C$0.09 21-Jun-09 C$0.09 0% trade closed
Pediment Gold PEZ.to Oct'09 C$0.80 09-Aug-09 C$1.00 25.0% trade closed
Minera Andes MAI.to Oct'09 C$0.68 03-May-09 C$0.71 4.4% too much bad news
Dynasty Metals DMM.to Nov'09 C$4.18 03-May-09 C$6.01 43.8% half sold
Rusoro Mining RML.v Nov'09 C$0.55 03-May-09 C$0.57 3.6% underperformed
Important Disclosure
The information and opinions contained within this report reflect the personal views of the author and therefore all
material within should not be construed as accurate or reliable or be utilized as advice for investment or business
purposes. Independent due diligence and discussions with ones own investment and business advisor is strongly
recommended. Accordingly, nothing in this report should be construed as offering a guarantee of the accuracy or
completeness of the information contained herein, as an offer or solicitation with respect to the purchase or sale of any
security or as an endorsement of any product or service. All opinions and estimates included in this report are subject to
change without notice. It is prohibited to copy or redistribute this report to any type of third party without the express
permission of the author.
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