IKN #298Premium

The IKN Weekly
Week 298, January 25th 2015
Contents
This Week: Buying McEwen Mining (MUX) (MUX.to), FOMC Week headsup, Goldman Sachs
2015 metals prices projections.
Fundamental Analysis: NOBS report on McEwen Mining (MUX) (MUX.to).
Stocks to Follow: Overview, Starcore Intl (SAM.to), First Majestic (AG) (FR.to), Fortuna Silver
(FVI.to) (FSM), Focus Ventures (FCV.v), Rio Alto Mining (RIOM) (RIO.to), Dalradian Resources
(DNA.to), B2Gold (BTO.to) (BTG), Minera IRL (IRL.to) (MIRL.L).
Copper Basket: Overview, Reservoir Minerals (RMC.v), NGEx Resources (NGQ.to), Capstone
Mining (CS.to).
Low Cost Producer Basket: Overview, Buenaventura (BVN).
Regional Politics and Market Watching: Lake Shore Gold (LSG.to) redux, B2Gold (BTO.to)
(BTG) 4q14 production numbers and 2015 guidance, Guatemala looking quick to put taxes up
on fuel, True Gold’s (TGM.v) Bad Karma.
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
Buying McEwen Mining (MUX) (MUX.to)
I will buy a full-sized position in McEwen Mining (MUX) (MUX.to). The plan is to buy as from
tomorrow Monday, with all buying done and dusted by this time next weekend. Exact timing of
the purchases will depend on the action in the gold price (yes, I’ll be micromanaging my entry
point). The stock is analyzed in ‘Fundamentals...’ below.
FOMC Week headsup
The first FOMC get-together of 2015 happens this coming Tuesday 27th and Wednesday 28th
January, with the Fed communique as usual lunch time Wednesday (no Yellen presser on this
one, though). You should know the drill by now, keep eyes peeled for informed commentary
from reliable places and you should also know in my considered opinion you can do no better
than Calculated Risk (1) on these occasions. Check his site at least Tuesday evening and then
post-announcement Wednesday. In other news, US Q4 GDP first show is announced Friday and
I strongly suspect Janet & Friends will know that number before their Wednesday show.
Goldman Sachs 2015 metals prices projections
On Friday Reuters reported (2) that via a note to clients, Goldman Sachs (i.e. Jeff “1050” Currie
and his team) had changed its 2015 forecasts for metals prices, with the general story being
base metals (BMs) predictions down, precious metals (PMs) up (and no guess for silver). To
quote GS and the Reuters report...
"The primary reason for the changes to our forecasts is cost deflation - driven
by a combination of actual and anticipated U.S. dollar strength, cheaper
energy and other input costs, and our expectation of an improvement in
mining productivity,"
1

...said the GS team. This weekend I cared enough to put the GS calls (old and new) into a small
table so here you are:
GS: Metals price forecasts FY15, Jan 23rd
in US Dollars Old New
Gold (ozt) $1,200 $1,262
Platinum (ozt) $1,381 $1,250
Copper (mt) $6,400 $5,542
Zinc (mt) $2,425 $2,138
Lead (mt) $2,350 $1,838
Aluminium (mt) $2,075 $1,788
Nickel (mt) $17,500 $16,550
source: GS, Reuters
And for those of you who prefer to work in old money (count me in) here’s the same table with
the BMs in Lbs rather than the metric tonnes of the GS report:
GS: Metals price forecasts FY15, Jan 23rd
in US Dollars Old New
Gold (ozt) $1,200 $1,262
Platinum (ozt) $1,381 $1,250
Copper (lb) $2.90 $2.51
Zinc (lb) $1.10 $0.97
Lead (lb) $1.07 $0.83
Aluminium (lb) $0.94 $0.81
Nickel (lb) $7.94 $7.51
source: GS, Reuters
From these numbers we note three things and one main conclusion:
1) The commentary and inferences I’ve read on the new GS price deck, e.g. the very
same Reuters report, suggest GS is bullish on PMs and bearish on BMs. In fact there’s a
case to be made for the exact opposite, as GS’s new numbers are lower than current
spot for gold and platinum, higher (or equal) for the BMs.
2) More about the correlation to current spot: The new set of Goldman guesses
(there is no more accurate word) sit either close to the current spot prices of all metals.
As of Friday’s close, the difference between GS and spot for Au was U$33, Pt U$14, Cu
and Zn a tiny 2c, Pb and Al matched prices exactly, to the darned penny. Only nickel
shows anything like a gap, with a buck between the GS guess and current reality.
3) These changes have come about in the space of a week, as the GS 2015 Annual
Outlook report it was still making very bearish sounds about gold (presumably trying to
justify its failed $1,050/oz call for gold in 2014). That was published on January 15th,
the updates came eight days later.
Conclusion: After weighing it up I’m forced to conclude that GS doesn’t have a clue about
what metals are going to do this year. I’m guessing they’ve taken stick from their client base
from the bearish gold call and that’s the main strategic change we saw last week. The base
metals forecast changes are more a function of reality and the argument stands to reason, but
the way in which they’ve largely plumped for prices that nearly or exactly reflect current spot
for the BMs shows a distinct lack of forecast insight, oir plain uncertainty on what happens next.
The above is, for me, an honest position taken by GS on base metals (not often you’ll hear
“Goldman Sachs” and “Honest” used in the same sentence round these parts) and a back-
tracking one on precious metals that opens channels for a more bullish posture down the line
without losing face (or losing too much face), the deepest fear of the BS anal yst.
2

To round off at the bottom of all this, a question: Do I really care about Goldman’s predictions
for gold and suchlike? The answer is ‘No I don’t’ but 1) other people do care and it’s obvious
this house’s calls have at least near-term influence on metal trading, and 2) GS gets a lot of
negative attention when it calls gold lower, so there’s just cause to highlight their forecasts
when they start calling gold higher.
Fundamental Analysis of Mining Stocks
This week we look at McEwen Mining (MUX) (MUX.to).
NOBS fundamental update report dated January 25th 2015
McEwen Mining Inc. (MUX.to) (MUX)
Company Overview
McEwen Mining Inc. (Canada: MUX.to, USA: MUX, Stuttgart MCF.sg) is a junior producing gold
and silver mining company operating in Mexico and Argentina. Its flagship asset is the El Gallo I
mine in Sinaloa, Mexico, with its other major asset is its 49% ownership of Minera Santa Cruz
S.A, owners of the San José mine in Argentina. McEwen Mining also has exploration stage
assets in Mexico and The USA. Current share structure is as follows:
Shares out: 300.1m
Options: 5.1m
Fully diluted shares: 305.2m
Current share price: $1.22
Market Cap: $366.12m
Approx cash per S/O: $0.05
All prices are in United States Dollars unless stated. Forex U$0.80=CAD$1
NB: Today’s report uses the US Dollar and the NYSE ticker MUX as default.
Today’s report is a long one. Apologies.
I cannot tell you how many times I’ve looked at the numbers underlying McEwen Mining (or its
previous corporate names), or read one of Rob McEwen’s “Fear Not We Shall Conquer” news
releases, or read through the latest corporate presentation with its “Fiat Money Will Kill Western
Civilization” message and sighed, or shaken my head, or just plain cringed. Most of the time it’s
been the easiest thing in the world to slap “avoid” or “pass” on the stock and move on, on the
occasions when I’ve taken a deeper look at the state of the company and its numbers (by
memory alone, perhaps five or six times at moments it’s comes out with quarterlies) and even
though I’m OK about the quality of its assets and mine operations, come away with the feeling
that it’s priced right at the very upper end of a valuation range that makes it no value at all as a
prospective investment.
Thing is, dear and esteemed readers, that has now changed. A combination of factors that
include...
• The 2014 sector carnage that stripped every penny of overvaluation out of this
3

company.
• A new, more cautious corporate philosophy at MUX.
• A big change to its operations in the year ahead.
• An improving macro background for gold prices.
• A share price that’s still down in the dumps and unloved.
...today offers an excellent opportunity to do the only thing that really matters when it comes to
retail share investment, buy low and sell high. Today’s note examines (what I believe to be) the
important moving parts to MUX today and include Rob McEwen and how he’s now running the
company differently than in previous years, the numbers behind 100% owned El Gallo 1 mine,
the 49% owned San José mine and the 2015 company guidance for both, the deep value entry
point for the share price today largely due to the big sell-off of 2014 and the main corporate
financials to show how the changes happening will affect the company in the future.
As with any trade in this wild and volatile sector, it’s not a riskless one. What I see here is a
playing field tilted to our great advantage with potential reward greatly outweighing the risk, but
risk is still there and that means you need to go in with your eyes wide open. That’s the warning,
but darnit I really like the look of this set-up here, all ducks in line today.
With Argonaut Gold (AR.to) in December I had to shake off a lot of my own prejudices to get to
the stage where I could write a positive report and buy the stock myself. That worked well, so
even though I’ve had more of a problem with MUX than with AR.to over the years this one was
an easier mental block to overcome, plus since its 4q14 production numbers and 2015 guidance
were announced to the world on January 15th, the potential has become obvious. Even to me.
Management and holdings
This is the most straightforward and simple part of the whole note today. We could go into the
CVs of all the management and directors but in the end there’s only one person that matters in
this company.
Rob McEwen, a person who should need no introduction or CV-examination to this audience (if
you’re new to the sector, Google his name at your leisure) is Executive Chair of MUX,
(in)famously owns 25% of the company in shares and doesn’t draw a salary and makes all the
important decisions, but it’s more than that. MUX is the corporate manifestation of McEwen’s
brain; what he thinks about the market is what MUX does,
his opinions are directly reflected by its corporate culture.
Away from Rob McEwen, the biggest holder of MUX
shares at this time is Van Eck, the ETF people (GDX,
GDXJ etc) owning around 15.3m shares of the company.
The graphic from the latest corporate presentation (3)
dated January 19th 2015. And before we continue, a word
or three about the latest corporate slideshow: It’s 57 pages
long so skip the first few that have the usual hard money
blather, then along the way have a giggle at the “Mexican”
(ahem) dancers chosen to introduce the Mexico ops or the
couples dancing tango that are there to remind you that
we’ve just skipped countries (not forgetting Las Vegas chosen as the epitome of the US of A, oh
yes). But once you’re past those sidebar matters, it’s a pretty decent presentation with plenty of
info laid out in an easy access way. The layer of cheesiness aside, I wish that more mining
company corporate documents were as informative.
It’s worth noting that in February 2014 in the MUX Management Information Circular filing, Van
Eck was registered as owners of 37.47m shares of the company, 12.6% of shares out at the
time. The big change happened in December 2014, when Van Eck pulled the plug on MUX
participation in its ETFs. The 22.2m shares dumped on the market by one single, large and
quasi-obligatory seller, along with other instos and people selling because of the selling, does
this to your share price:
4

Here below left is the Canadian ticker, just to show the difference in speed at that point...
And to the right (above) the three month chart of the NYSE ticker, to show that selling pressure
in a little better detail. I could show more (kind of planned a comparative chart with GLD and
GDXJ, to show how MUX has underperformed on the December/January rebound so far) but
that’s enough price-charting, you should get the picture by now. We’ll come back to the 2014
sell-off and what it means for the current share price of MUX later on.
MUX properties
We care a lot about the operating mines in today’s report, while its exploration stage or
development properties are of less interest. With that said, here’s a quick rundown of the
mineral asset book at MUX today because that’s the kind of thing you have to do in these
reports, else leave yourself open to accusations. Hey ho, let’s go:
El Gallo 1: This is its main producing mine, located in Sinaloa Mexico. A gold mine with a small
silver kicker, it saw first pour in September 2012 and declared commercial production on
January 1st 2013. It’s not a big operation but it looks as though it’s ready to return decent
positive cash flow now, even with gold lower and where it is.
San José: MUX owns 49% of this silver/gold mine (co-product, both play an important role in
the revenues mix) located in Santa Cruz, Argentina. Hochschild (HOC.L) owns 51% and is
official owner/operator. Being located in Argentina makes people nervous about its status and
over the years there have been a couple of episodes of strike actions by workers, but on the
whole it’s been a decently performing mine and although at the upper end of the cash cost
spectrum, it’s managed to keep overall costs under reasonable control despite the host
country’s inflationary background.
Before moving on to the non-operation assets held by MUX, let’s check on the reserve and
resource position of the two working mines mentioned above. This chart is from the latest
5

corporate presentation.
There’s plenty of info in that table and you can peruse it at your own leisure (then if you care
enough, do as your author and go check out the detailed tables in the 43-101). The reason it’s
placed before you at this point today is to note in arm-waving terms that both mines have a
decent resource back-up and have no issues when it comes to mine life. Indeed, and going
further the deposit type at San José is one that expands with exploration when necessary and is
the type of “very prospective land package” (so they say) that makes for a very high likelihood of
further resource discovery down the line. For our purposes today, we’re not worried about mine
life at either of the working ops.
We now move to the exploration stage properties.
El Gallo 2: As you might expect from the name, it’s located close to El Gallo 1 in Sinaloa
Mexico. This is a silver deposit with a gold kicker and it’s main vital stat is its 63.99m oz silver
Measured and Indicated resource grading at 58 g/t silver (plus 200k oz gold at 0.18 g/t). One
major plus here is that El Gallo 2 has all its main permits already granted, so in theory at least it
could be turned into a mine quickly. Capex is estimated at $150m.
The official MUX line at the moment about El Gallo 2 is that it’s there, ready and waiting to
become a mine, all we need is stronger prices for silver and the project. That’s fair enough I
suppose, but I’m good about it lying fallow for a while longer and if (repeat if) silver does make a
hefty move the company can point to it as something actively valuable and worthy of share price
consideration. For the time being it’s not in my valuation mix at all.
Gold Bar: This is MUX’s most advanced project in The USA, an open pit oxide mine gold
project located in the Nevada. Although smaller at 19.5 million tonnes grading 0.95 g/t gold with
a M+I resource of 590k oz gold (with another 210k in the inferred category), this is my idea of
the best of its pipeline. Its main problem is permitting, as MUX doesn’t expect the main permits
to come until the second half of 2016 (which, being in the USA, may mean they don’t show until
much later). But if and when they do, this could turn into a very neat little mine. The current
capex estimate is a modest $55m and for that you’d get a 50,000 oz per year gold mine with all-
in costs estimated at $850/oz and a ten year mine life plan (which could extend thanks to the
inferred). Small yes, but cheap to build, cheap to run and would provide a meaningful boost to
the current production profile as from the (company’s possibly over-optimistic) 2017 start date.
If and when the permits come and the capex is secured, I’d be quick to factor Gold Bar into the
target price of MUX. As it is today, we’re all about its current operations, not about NAV.
Los Azules: This is the big copper porphyry project that’s now 100% owned by MUX (a portion
of it was in dispute with junior exploreco TNX for years, the parties have now done a deal and
it’s all closed) and located in Argentina. This is a big porphyry, it has a PEA to its name to show
economic parameters and under 43-101 compliance it boasts an all-category (M+I+I) 19.7Bn lb
copper resource at an average grade of 0.5% Cu. So it’s big, but it’s also remote in the upland
6

Andes and it’s in Argentina where I’m loathe to sponsor any type of large capex ticket project. It
was also subject of a $120.4m write down last year and even with that, the current $311m
carrying value on the project looks pretty steep to me, especially in light of the recent dump in
the price of copper. As an asset held on the books, it does no harm and maybe one fine day
when the copper market has turned around it may find a buyer. But until such time, it’s not a
factor in today’s valuation, I’m pricing it at zero.
Other: MUX also has other projects on its books such as Tonkin and Limo. If you care enough
(I did this week) go check out the technical reports and read them up, but they are highly
unlikely to be any sort of price influence in the weeks and months ahead.
And that wraps up the intro section of today’s note, it’s time to get down to the real business of
explaining why this thing is a buy today, January 2015.
Rob McEwen and MUX: From King Canute to Humble Pie
The problem with having a company run under the direct influence of Rob McEwen is that when
McEwen reads the market badly, the company has no recourse to more conservative and
sensible policies. McEwen’s success as a mining entrepreneur is undeniable and his vision to
put together and build Goldcorp was brilliant and wildly successful. However the man is not a
perfect judge of the market either and his bad calls in the last few years show this clearly. There
were signs in 2012 that things weren’t great (I know, I read them badly myself) but when the big
waterfall drop in gold happened in early 2013 most of the market’s main players, some sooner
and some later, read the writing on the wall and realized it was time to batten down the hatches.
But not McEwen, who continued to voice his strident and unwavering convictions of a
$2,000+/oz gold price by the end of 2013, or early last U$1,500+/oz gold price by the end of
2014, all backed up by hardline hard money, rigid Austrian-type economic monetary philosophy
that confidently predicted the death of the fiat currencies, hyperinflation, the whole nine yards.
He was wrong, let’s not mince words. King Canute can order back the tide if he wants, but at
some point his feet begin to get wet and he eventually drowns. Now for sure other people have
been wrong about it as well, but few of those happen to have their hands on the control levers
of a multi-million dollar precious metals mining company without a board of directors or a large
enough section of dissenting shareholders to keep their bad opinions in check, or provide a
counterargument.
However, underneath a lot of the McEwen bluff, bluster and unshakeable beliefs about gold, as
from about a year and a half ago we saw a change of direction in MUX. Up to that point it was
an aggressive, hard-spending company that of course had income via the 49% of San José and
the newly commercial El Gallo 1, but was still fracturing money due to its delusions of grandeur.
McEwen’s stated intention was to get MUX to the S&P 500 list and by 2015 (or 2016, i forget)
and to do that it needed to be full-on aggression, but the big drop in gold put paid to that. What
came next can be seen in these two charts, of G&A per quarter and exploration costs per
quarter at MUX.
$m MUX: Exploration costs, per quarter
MUX: G&A, per quarter
$m 20
5
18
4 16
14
3 12
10
2 8
6
1
4
2
0
0
1q12 2q12 3q12 4q12 1q13 2q13 3q13 4q13 1q14 2q14 3q14
1q12 2q12 3q12 4q12 1q13 2q13 3q13 4q13 1q14 2q14 3q14
source: company filings source: company filings
That’s the sight of reality and ambitions toned down, even while McEwen still boldly predicted
his $1,500/oz and $2,000/oz gold prices for the near future (talk is cheap). McEwen might have
kept talking the talk in public, but where business is concerned he ate his slice of humble pie.
7

The second part of the rationalization program at MUX can be seen in the balance sheet. This
chart (right) shows the impairments taken by MUX on its mineral property assets in the last two
years. The first was imposed upon the
company, but the $95.878m share of the write MUX: Writedowns/impairments on fixed assets,
down of San José decided by operator U$m 2013-2014
Hochschild (HOC.L) was still the correct 140 Los Azules
decision, whoever made it. At the same time 120 MUX PM mining assets
MUX took an impairment on its wholly owned 100 San José
assets (red) and followed that with two more 80
impairments in 3q13 and 4q13. Finally, the near
60
$121m that was sliced off the asset value of Los
40
Azules, the big copper deposit in Argentina.
20
0
That little lot adds up to $279.379m, which is a
2q13 3q13 4q13 1q14 2q14 3q14 4q14est
pretty penny for any company, let alone one
source: company filings
that currently boasts a market cap of $366m.
And most recently we’ve had a clear and third stage to the change in corporate policy at MUX,
which is perhaps the clearest of them all. We go into fine detail about the change in the
production sections below, but the headline is how MUX has decided to cut costs, aim for
positive cash flow, make a profit on its operations and put some much-needed cash into its
dwindling treasury chest. This began in 4q14 (just gone) and is obviously the plan for 2015. As
in obviously. It’s also very welcome and the correct move for a company that’s now about
making the best of what it has, rather than trying to conquer the world in one fell swoop.
You won’t hear Rob McEwen tell you that he made a strategic mistake in the way he ran MUX
previously. McEwen’s not like that. What’s more, I’ll give him credit for pulling back and
recognizing the reality of the sector for what it was at the right (or perhaps “not too late”) time
and then changing the corporate direction and strategy at MUX (for an example of when a
mining boss remains obstinate and refuses reality, look at the five year chart of Tanzanian
Royalty Exchange (TRX), the Jim Sinclair disaster area). What you will hear, when he’s good
and ready to crank up the promotional engines (and you can be 100% sure about that being
part of the 2015 plan here as well), is how MUX is now profitable, growing and much cheaper
than at any point in the past few years, just at the moment when it starts generating cash for
itself. I expect to be on board this stock and already making a decent percentage gain even
before that starts, and riding the stock up when the promo gets into gear.
The two producing mines at MUX
We now move to operations. When it comes to analysis and putting the MUX pieces together,
one thing about its two operating mines is ownership status. As El Gallo 1 is wholly owned, it
arrives on the company P+L as a normally reported operation, with revenues and costs and all
the normal other things in line item. But as San José is 49% minority owned and not operated
by MUX, its operational stats are treated separately and its results arrive as an income/loss on
investment line item, or a dividend from participation. That’s not a particular problem maths-wise
as all the numbers are there, but it does mean that to explain MUX operations it’s good to
examine the pieces first. Therefore and before we get to the corporate numbers, here come:
1) a section about El Gallo 1
2) a section about San José
3) a section that consolidates the MUX production into one lump, slightly artificially, that
shows what its overall production size and mix looks like.
Production at San José
This mainstay of MUX’s production profile over the last few years has been its 49% investment
in Minera Santa Cruz S.A (MSC), the Argentine mining company owned in JV with 51%
owner/operator, the Peruvian mining company Hochschild (quoted on the London Stock
Exchange, ticker HOC.L). As this tonnage throughput chart below shows, there have been
some fluctuations over the years (and the first quarter of each year tends to be lower, Southern
Hemisphere vacation period and all that) but on the wider scale it chugs along and mines at a
8

regular rate.
NB: In the majority of cases, this segment and the charts therein consider San José on a
100% basis. Remember that MUX owns 49% of this mine and benefits accordingly.
San José (100%): Tonnage mined, per qtr
200
180
160
140
120
100
80
60
40
20
0
9
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4
source: HOC/MUX filings (MUX 49% attributable)
sennot
cirtem
s000
By the way, also note that the 4q14 production number above, along with production and sales
numbers for gold and silver, are filed and confirmed rather than estimates. That’s because the
operator HOC.L 4q14 production numbers NR (4) includes all that data for San José for the
period. Which brings us to our next charts, those of production and sales at San José and here
comes the first slice of good news today about MUX. Firstly, production of both gold (27,230 oz)
and silver (1.959m oz) in the period were either a new quarterly mine record or very close to the
record, according to the metal.
San José (100%): Gold Production and Sales
35
30
25
20
15
10
5
0
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4
Koz Au
Au prod
Au sold
source: MUX/HOC filings (MUX 49% attributable)
San José (100%): Silver Production and Sales
2500
2000
1500
1000
500
0
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4
Koz Ag
Ag prod
Ag sold
source: HOC/MUX filings (MUX 49% attributable)

Those are strong numbers and it gets even better for 4q14 when we consider that 3q14 saw a
lag of sales. The official reason given for this is that the seaport San José uses for exports was
unavailable for a time, due to preference given by the government for other goods traffic. That
may be the case, or it may have been that (yet again) the government of Argentina slowed
down exports for a while in order to alleviate its dollar position at the Central Bank, but whatever
the real reason was the bottleneck has now passed. Thanks to HOC.L we know San José sold
30,130 oz gold and 2.163m oz silver
in the period (just shy of quarterly
records in both cases).
All that means we’re going to get a
bumper financial result from San José
in 4q14. Here right is our revenues
chart for the mine that includes our
estimate of $68.28m in sales in Q4 on
this one I’m being pretty conservative
with that guesstimate. That’s because
we use average prices of $1,166/oz
for gold and $16.95/oz for silver that
HOC (not MUX) announced for its
own company-wide averages (i.e.
including all its other mines in Peru
etc) in the period. Either of those
numbers may turn out to be low for
San José, we’ll find out in the
financials, but in the meantime it still
shows a big improvement on previous
quarters and with a little luck and a
nudge, may end up as the best
quarter for revenues since 2012.
As for costs, this chart (right) shows
the total cash cost and all-in
sustaining cash cost (AISC) figures for
each quarter including my best
guesses for 4q14 (i.e. $37m for total
cash costs and $50m for 4q14 AISC).
Therefore, it’s possible to take the
figures from the revenues chart and subtract the cash costs figures, which gives you this chart
as your result:
San José (100%): Difference between reported sales
and cash costs (total & all-in)
70
60
50
40
30
20
10
0
-10
-20
10
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
San José (100%): Reported sales, per quarter
120 116.30
110
100
90
77.95 80
68.50 69.70 68.38
70
60 59.76 56.38 58.69 56.90 53.20
50 43.80
38.30
40
30
20
10
0
U$m
Diff rep.sales and tot costs
Diff rep.sales and all-in costs
soure: HOC/MUX filings, IKN calcs (MUX 49% attributable)
What we’re predicting for San José in 4q14 is a decent quarter of free cash flow, the key figure
for me being the $18.38m margin between estimated revenues and estimated AISC. That
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
U$m
source: HOC/MUX filings, IKN ests (MUX 49% attributable)
San José (100%): Total cash cost and all-in cash cost, qtr
90
80
70
60
50
40
30
20
10
0
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
U$m
tot cash cost
All-In cash cost
source: HOC/MUX filings. IKN ests (MUX 49% attributable)

because, as this next chart below shows, there’s a reasonably tight correlation between (deep
breath, say it in one go) the difference between revenues-minus-AISC and the amount of cash
MUX declares as income on investment/dividend in its quarterly corporate filings (exhale).
NB: In this case we’ve done the calculation, figures are for the MUX 49% of San José.
The MUX 49% of San José: Reported sales minus all-in costs
versus reported quarterly income on investment
20
15
10
5
0
-5
11
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
U$m
Reported sales minus all-in costs
Divi from MSC
source: MUX filings, IKN calcs
It’s not always a tight correlation, particularly in previous years (here we see 2012 clearly) when
the San José mine still needed larger chunks of cash for its own capex purposes and took
profits from its two parent companies. But arguably aside from 3q13, the two numbers have
been close enough to warrant consideration and therefore your author is best-guesstimating
that in 4q14, MUX gets $8m in profits from San José to add to its profit and loss. That’s decent
money.
To wrap up this segment on San José we consider the company guidance for 2015, which
according to both HOC.L and MUX is one of continuation, rather than any massive growth.
Throughput tonnages for the year ahead are set at basically the same level as 2014, we would
expect to see slightly lower production in Q1, growing to the best quarter in Q4
San José (100%): Gold Prod. and 2015 ests
30
25
20
15
10
5
0
And the AISC level is guided by both companies at $1,225/oz AuEq, with the gold/silver ratio on
that figure marked at 1:75. That means San José can be expected to return a modest profit to
its parent companies in 2015 with the gold and silver prices where they are. Any further
upmoves in the metals will bring strong leverage and a fast upmove in profits in percentage
terms, of course.
Production at El Gallo 1
The second part to the MUX production mix is its El Gallo 1 mine in Sinaloa, Mexico. This is an
open pit crush/heap leach operation that uses standard technology and runs at a normal
maximum of 4,500 tonnes per day (though 4q14 was pretty exceptional to that and 2015 is set
up to be a different production profile, too). Here’s a repeat of its latest 43-101 compliant
resource information (from mid-2013) which shows official tonnages, grades and gold content.
Note that silver production is very minor at El Gallo 1, this one isn’t like San José and is for all
intents and purposes exclusively gold in nature.
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2 tse51q3 tse51q4
Koz Au San José (100%): Silver Prod and 2015 ests
2000
1600
1200
800
400
0
source: MUX/HOC filings (MUX 49% attributable)
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2 tse51q3 tse51q4
Koz Ag
source: HOC/MUX filings (MUX 49% attributable)

It’s a new mine that saw first pour in September 2012 and commercial production declared on
January 1st 2013. This table shows how El Gallo 1 has performed to date compared to
guidances set at the beginning of each year by MUX:
El Gallo: annual guidance vs results
Year Guidance Oz Au Result Oz Au
2013 27,500 31,000
2014 37,000 38,168
2015 50,000 ???
source: MUX 2012 and 2013 MD&A
In other words, so far it’s outperformed guidance and that’s not a bad thing. For 2015, the bar is
set at 50,000 oz Au.
Here’s the quarterly tonnage throughput chart for your consideration and the first thing that
jumps out is that Q4 number. MUX hit the accelerator pedal last quarter and ran 522,337 metric
tonnes, far higher than anything that’s come before. This may well be related to the mine plan
for this current year, as (can be seen in the chart) MUX plans to cut back significantly on the
amount of rock it processes (using the truck fleet hard before sending them back?). The chart
estimate is based on MUX annual guidances and split into the four quarters equally (as in other
charts below)
MUX: El Gallo 1 tonnage mined
600
500
400
300
200
100
0
12
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2 tse51q3 tse51q4
000s mt
source: company filings, IKN ests for 2015
Here’s the next bit of the MUX puzzle for the Q4 just gone and the 2015 to come. The company
plans to up head grades to 2.6 g/t, from the 1.73 g/t it mined in Q4 and plenty up from the
previous averages it processed that fluctuated at a little over 1g/t.

MUX: Average gold head grade, per quarter
3
2.5
2
1.5
1
0.5
0
13
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2 tse51q3 tse51q4
g/t Au
source: company filings and guidance for 2015
This grade hike thing needs a few extra words, as we again consider the 2013 resource table
above which announced El Gallo 1 had a M+I of 691k oz Au M+I. That particular resource
calculation used a 0.3 g/t Au cut off and ran on a 1.54 g/t grade, so if the plan in 2015 is to run
the El Gallo 1 mill at a head grade of a much higher 2.6 g/t it immediately sticks up a potential
red flag in our faces, that of the company high-grading its mine. The issue in a nutshell is
whether MUX plans to completely screw up its resource for the sake of a year’s worth of higher
grading and more lucrative production.
This was my main concern last week when the MUX numbers came out, because aside form
this potential problem everything in the NR looked very good. However, on closer examination
of the 2013 reserve and resource report (5) we can see that at a cut-off of 0.9 g/t Au and an
average grade of 2.85 g/t (which once mine dilution is factored in, sounds about the right level
to pitch for the 2015 plan) total M+I resource doesn’t drop so very much, going down to 545.414
oz Au. Yes it’s 150k oz off and if MUX mined at that rate for nine or ten years it would mean
leaving 150k oz in the walls and waste heaps, but it sounds a reasonable trade-off for a single
year’s worth of higher-grading and profitable mining. There’s plenty of grade integrity in this
deposit, which allows the company to high-grade without tears. In sum, yes MUX is going to
change its plan at El Gallo 1 in 2015 and mine some of the better parts of its resource. It’s doing
so to run profitably (even very profitably) in the year ahead and that’s fair enough, but the plan
isn’t going to screw over the future of the mine either. It will affect some resource, but if you
consider on balance that we’re probably talking about an eighth or a tenth of 150,000 oz, it
doesn’t look like a heavy price to pay. Quite reasonable considering the potential return in the
near term, in fact.
Moving on, here’s the production and sales chart (striped bars for IKN estimates, everything
else company-filed). Q4 was a record
14,068 oz Au and for our conservative MUX: El Gallo 1, gold production and sales, per quarter
modelling purposes below, we
16
assume MUX sells 13.5k oz of those
in the period (fwiw, something up to 14
13.8k oz wouldn’t surprise me much, 12
but you never know either way and it 10
all depends on the date of sales
8
invoices, we’ll only find out for sure in
6
March when the financials are filed).
4
We also see the (neatly divided into 2
four) estimates for 2015, with each 0
quarter currently assumed to see
production and sales of 12,500 oz Au.
While we’re on production and sales,
here’s the similar silver chart. Q4 was
an anomaly, but with production typically in the 4k oz to 6k oz range for Ag, it underscores its
minority part of the El Gallo 1 revenue mix.
31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4 tse51q1 tse51q2 tse51q3 tse51q4
Koz Au
Au prod
Au sold
source: company filings, IKN ests

MUX: El Gallo 1, silver production and sales, per quarter
16
14
12
10
8
6
4
2
0
14
31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4 tse51q1 tse51q2 tse51q3 tse51q4
KozAg
Ag prod
Ag sold
source: company filings, IKN ests
On which subject, below is our revenues chart for El Gallo 1 (you can just see the thin part at
the top of each column where the silver gets counted in). By assuming an average sales price
of U$1,200/oz for gold and $17/oz for silver, we forecast a bonanza revenues number from
MUX in Q4 of $16.43m. That best guess may fluctuate either due to sales ounces being
different, or the average sales price higher or lower, but as things are today that’s my guess and
I’m sticking with it.
MUX: El Gallo 1 revenue breakdown
20
18
16
14
12
10
8
6
4
2
0
31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4 tse51q1 tse51q2 tse51q3 tse51q4
U$m
Ag calc revs ($m)
Au calc revs ($m)
source: company filings, IKN calcs
Also, we see 2015 looking good thanks to a higher average price assumption for gold (1q15
$1,250/oz, thereafter I’m assuming a
MUX: Sales versus cash costs
flat $1,300/oz and the flat average of
(total and all-in cash costs included)
12,500 oz production per quarter,
18
derived by cutting the 50,000
16
company guidance into four equal
14
quarters. A more simple model,
12
impossible. It means that El Gallo is
forecast to spit out average quarters 10
of ~$16m throughout 2015, a 8
significant improvement 6
4
I’ve guessed at the total cash cost 2
number for 4q14 at $9.5m and the all-
0
in sustaining cash cost (AISC) at
$12m, but I’m telling you now, that
particular one is a best guess and
could be out on either side. Because
of the much bigger tonnage throughput we saw in Q4 (522kt) that could shoot costs up higher,
31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4 tse51q1 tse51q2 tse51q3 tse51q4
U$m
reported sales
tot cash cost
All-In cash cost
source: company filings, IKN calcs

of all the inputs in today’s analysis this is the one that’s the biggest mystery and we’ll only really
know when MUX says something or when it files its Year End numbers. If I’m wrong it may
affect the final 4q14 profit figure for the company, but really the main thing about MUX now is its
2015 prospects, don’t shoot me on this one if I’m out.
However in 2015 the estimates are clearer, because MUX plans to cut tonnage moved, up the
average grade and has given us clear guidance on costs. That means we expect all-in costs to
global average $9.4m over the four quarters and that implies El Gallo 1 is going to be a very
profitable operation in the year ahead, as long as gold doesn’t drop away on us again.
Notes on consolidated production numbers
This section is more for reference purposes than anything else, it gives a global, overall idea of
the MUX production via the above two operations. So here we combine the 100% of El Gallo 1
with the 49% of San José to get a feel for the company-wide production and revenues mix.
These first two charts show consolidated gold and silver production attributable to MUX per
annum, including the 2015 company guidance.
MUX: Consolidated gold production, 2012-14 plus 2015 est MUX: Consolidated silver prod, 2012-14 & 2015 guidance
Ozt Au (El Gallo commercial production, plus 49% of San José) M Oz Ag (El Gallo commercial production, plus 49% of San José)
110000 96500 3.5 3.135 3.196 3.1
100000 2.921
90000 79274 84351 3
80000 2.5
70000
2
60000 49003
50000 1.5
40000
30000 1
20000 0.5
10000
0 0
2012 2013 2014 2015e 2012 2013 2014 2015e
source: company filings source: company filings
On a gold equivalent basis and with silver counted at 75 to 1 (MUX used 60:1 for its calc, which
was fine at the start of the year but looks a bit out of date now), 2014 saw MUX at slightly above
125,000 oz AuEq production. It also points 2015 guidance at 135,000 oz AuEq, also at a 75:1
silver gold ratio).
Therefore, to answer a question that’s invariably in the back of the mind, that’s the size you’re
getting for your $366m market cap today. If those AuEq ounces weren’t profitable to mine I’d be
leery about buying into MUX today, but with Q4 and all of 2015 now set up as free cash flow
positive, plus plenty of growth pipeline here, plus the crowd-pleasing attentions of Rob McEwen
waiting in the wings with his ‘Phoenix Rises From Ashes! Never Been A Better Time! We Shall
Conquer! Gold’s Going To [porno-gold number]
MUX: Revenue split in 2013 and 2014
Per Ounce!”, MUX today and frankly for the first
time ever, looks decidedly cheap. And for what source: company filings, IKN calcs
it’s worth, this metric was always one of the
trade-off stats that put me off owning MUX at
any point in the past, I always found it difficult gold
(impossible) to justify ownership of a company 37.1%
silver
often valued at comfortably over a $1Bn by the
market (e.g. as recently as PDAC 2014).
Suddenly, it smacks of a true bargain.
As for the revenues mix, this chart (right) shows
62.9%
the breakdown of where MUX has got its cash
from metals-wise in the last two years (2013
and 2014 lumped together)
15

The emphasis is clearly on gold, even though silver remains important for the company. And if
we assume $1,300/oz gold and $18/oz silver for 2015, here’s how the year ahead looks:
MUX: Est revenue mix for 2015
source: IKN calcs usinf $1,300/oz gold, $18/oz silver
30.8%
gold
silver
69.2%
MUX is therefore becoming even more goldie at current metals prices, so yes there’s silver in
the mix here and that makes this company more volatile, but be clear that first and foremost
MUX is a gold mining company.
As for cost guidance (AISC only) in 2015, with guidance at U$1,225/oz AISC for San José and
U$750/oz AISC at El Gallo 1, you do the math and consolidated 2015 AISC for MUX in the year
ahead is set for U$1,125/oz, again using a conservative-looking 75:1 silver/gold ratio. (For the
record, with the ratio now at 71:1 we could assume AISC at U$1,100/oz already, but lt’s play it
to the safe side). Therefore, if you care to run the most basic of calculations and assume gold
averages U$1,300/oz this year (by no means out of the question, as we’ve seen by the price
action in January), that works out at...
135,000 oz AuEq X U$200/oz margin = $27m in pre-tax profits for MUX in 2015
...or 9c per share. Profit on a per share basis isn’t bad, but what it really means for this structure
is an important injection of treasury cash. With cash&eq standing at $16m on January 16th (so
says the latest presentation) treasury stands to move up to $40m by the end of this year
Company financials
This is a long note and it’s presenting a whole bunch of charts as well; you’re probably bored to
death by now. So let’s cut to the chase and show you the most important chart of them all
MUX: Total operating income (incl San José) versus
Total operating and exploration costs (minus impairments)
35 31.6
30
25.0 24.4
25
20 16.4 18.2 18.7 18.2 19.2 20.0
15 13.3 13.8 14.0
8.9 9.7 9.2
10
4.4
5
0
16
31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
$m
tot op income
Tot op costs & exp
source: company filings, IKN ests and calcs
This chart backs out the impairment charges taken in 2q13, 3q13, 4q14 and 2q14 and then puts
all the MUX costs up against all the MUX revenues. The only thing missing from this chart is
“other financials” (which tend to be smallstuff here) and tax (MUX benefits from decent tax

break recoveries). What you see above is the real bottom line to this company and shows
whether it can pass Rule One (make a profit) on its operations.
We see how throughout 2013 and 2014 MUX has failed to shows a positive return on this
comparison, either through high exploration costs, or higher G&A, or disappointing sales
revenues, or poor returns from its San José investment (which has been negative in four of the
seven returned quarters shown above, thereby costing MUX money).
Or if you prefer, here’s the difference between the two, the operating profit (with impairments
backed out)
MUX: op. Profit minus impairments
10
5
0
-5
-10
-15
-20
17
31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
$m
source: company filings, IKN ests
Or a third chart with the same info, the operating profit per share (with impairments backed out)
MUX: operating earnings per share
(impairments backed out)
0.03
0.01
-0.01
-0.03
-0.05
-0.07
-0.09
-0.11
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
cents
source: company financials/IKN ests
The visual is simple but also eloquent; MUX is on course for its first ever quarter of true profits.
As you can see here, the costs profile at MUX has settled down and if the industry trend is our
friend here, we can expect lower costs of operation etc in 2015 than in previous years (a
particular winner would be open pit mining of course, fuel costs being a large portion of the ops,
and that’s El Gallo).
MUX: Total operating costs
35
30
25
20
15
10
5
0
31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
$m
other
G&A
Exp costs
COGS
source: company filings, IKN ests
We expect COGS to rise in 4q14 because of the significant extra tonnage shifted by MUX...

MUX: COGS
14
12
10
8
6
4
2
0
18
31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4 tse51q1 tse51q2 tse51q3
U$m
Source: MUX filings, IKN ests
,,,but 2015 will see lower tonnages at higher grades. Meanwhile, as we have seen, the new
MUX/Rob McEwen belt-tightening attitude towards G&A and exploration means the other items
making up the total operating costs mix will remain under control.
Over at the balance sheet, one question left to answer is whether we’ll see any more
impairments taken by MUX. If so and after examining the current book, I’d best-guess that the
most likely place will be the San José JV and the hit is largely out of MUX’s control, as HOC.L is
the 51% owner/operator there. The potential comes from San José’s silver resources being
priced for asset purposes at $20/oz and as we know, 2014 closed with silver prices plenty under
that figure. However, even if there is an impairment it’s 1) likely to be the last one and 2) not too
big that 3) can be offset by tax credits still held on the balance sheet. It may muck up my perfect
scenario of bottom line bottom line profits in 4q14, but that’s my problem with numerical
esthetics rather than an issue for MUX, what really matter here is the ability of the comapany to
show free cash flow and an expanding cash
treasury (the above charts).
Anyway, enough ranting, here right is the
overview assets chart in which we can see the
drops caused by previous write downs and the
size of its mineral asset book that’s way larger
than the current assets.
Taking a closer look at fixed assets only (below),
this chart below shows the main block of wholly
owned MUX things (El Gallo 1 and 2, Gold Bar,
Los Azules, etc) and the carry of its 49%
investment in San José. If there’s another small
hit to be taken on San José this quarter it’s not going to matter too much, but I’m assuming zero
write-downs in my model for the time being.
MUX: Fixed Assets
1200
1000
800
600
400
200
0
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
MUX: Assets overview
1400
1200
1000
800
600
400
200
0
$m other fixed
inv. in MSC
mine prop int
source: company filings, IKN ests
Now a detailed look at the current asset development. The main story is the drop in cash
treasury, currently put at $16m by the company in its latest filings. But there’s another
interesting one here, the decent slug of IVA (sales tax) receivable credit on its books, the type of
asset that can be turned into cash quickly once a company is free cash flow positive (no need to
wait for any government office to cut a cheque).
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
$m
current
total fixed
source: company filings, IKN ests

MUX: Current Assets
100
80
60
40
20
0
19
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
$m other current
inventories
IVA tax receivable
cash
source: company filings
As for the liabilities situation, that’s here and it’s pretty straightforward, with long term debt being
paid down via tax credits for losses incurred until now and a current liabilities situation that’s
nearly all accounts payable and basically as good as it gets.
MUX: Debt Breakdown per qtr
350
300
250
200
150
100
50
0
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
source: company filings
srallod
fo
snoillim
A/Cs payable
LT debt
other current debt
Which brings us to working capital. Here we see how MUX has seen liquidity leave the
company structure on a regular basis for a couple of years, but how it’s also set to turn around
in the quarter just gone. In this case working cap is a little less important than the cash treasury
position, so rather than extrapolate this one...
80 MUX: Working Capital per qtr
70
60
50
40
30
20
10
0
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
source company filings/IKN ests
srallod
fo
snoillim
...I’m going to turn to that one. Here below is our chart and if the all-revenues-minis-all-costs
chart above is the most important one of this note, then this is the second most important. This
is the dataset that everyone will point to in 2015 when they talk about the turnaround story in
MUX this year, it’s the acid test and where its new, slimmed down corporate approach will bear
its fruits. We expect MUX to leave 2015 with $40m in cash and equivalents, put all talk of its
impending cash crunch and distressed level equity financing behind it and collect the funds it
needs to grow and put Gold Bar into operation organically.

MUX: Cash treasury position
80 (plus 2015 ests at $1,300/oz gold)
70
60
50
40
30
20
10
0
20
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4 tse51q1 tse51q2 tse51q3 tse51q4
$m
source: company filings, IKN ests
Meanwhile, the share count has stuck at-or-around 300m for quite some time, currently
standing at 300.1m. MUX has made it known that it would use equity placements to finance its
pipeline projects if necessary (particularly El Gallo 2), but as that’s current on hold as a project
until metals prices improve I doubt we’ll see any significant change to the count in the year
ahead.
MUX: Shares Out
350
300
250
200
150
100
50
0
11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4 tse51q1
source: company filings/IKN ests
serahs
fo
snoillim
Finally, and even though I think this stock is a buy on its profit-making potential in 2015 rather
than its underlying net asset value, check out the Price/Book Value ratio chart that tracks each
quarter end share price to the filings (plus IKN estimates for this weekend).
MUX: Price/Book Value ratio, per quarter end share
price and filings
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4 WON
P/BV
source: NYSE, Company, IKN calcs
At a current IKN estimated 0.59X book, MUX shows plenty of room to grow here. Admittedly
Los Azules is carried at $311m of the asset value (was $431m before the $120.4m impairment
charged in 2q14) and if you subtract that the P/BV ratio shoots up to 1.1X, but even so we’re
talking about a profitable gold mining company now, not a cash-fracturing overpriced dog. It’s
not difficult at all to envisage that ratio back at a basic 1.0X , implying a near 70% upside to
market cap. Assuming no extra shares are added, the NAV at 1.0X targets $2.07 per share.
Conclusion and recommendation
McEwen Mining (MUX) is an unrecognized (as yet) turnaround story, that’s the long and the
short of it. After being beaten to death by the market in 2014, particularly in late 2014 when it
was sold down in very large pieces by institutions who needed (rather than wanted) to get out at

any price, MUX in January 2015 is still feeling the hangover effects of the exceptionally brutal
and heavy selling period. Yes it’s bounced from the lows, but it’s a long way off even the lowest
end of its previous trading range.
And that’s great news for us. This share price slump coincides with a point in its corporate cycle
when things have changed for the better. The cash injection from a strong 4q14, plus the new
rationalized mining plan in 2015 for El Gallo 1 sets the company on course to being a profit-
making junior mining company for the first time in its existence. That’s no small factor in the
turnaround story either, as it comes at the exact time the market is looking at bottom line results
from miners with far more scrutiny, it cares about Rule One all of a sudden and MUX, the
perennial underperforming, over-priced Rob McEwen fanboys-only vehicle is about to surprise a
lot of people when it first returns a profit, then returns another, and then another. Cash treasury
will grow in 2015 and suddenly its growth and expansion plans (I’ll bet my money on Gold Bar
being the next project that goes into commercial production and I’ll bet on 2017) are fully funded
by operations. All this even if gold doesn’t put in any more gains and stays at-or-around
$1,300/oz for the rest of the year and this is the last piece in the jigsaw for me at this time, it’s
what points to the current period as the main window if opportunity in MUX. We’ve seen plenty
of gold mining companies put in strong gains thanks to the so-called “January bounce” but a lot
of them are now showing price fatigue, the first movers bumping on an invisible ceiling price
above which the market doesn’t want to pay...for the moment at least. It’s at these moments
when cash starts to rotate out of the market first-movers and into the second tier, the companies
considered of lesser quality than the
current crop of market darlings. MUX fits
the bill and it’s why I was rather surprised
to see it remain basically unchanged over
the last ten days, even with that excellent
production and guidance report in the
centre of the period. I thought it looked
great at $1.35 on Tuesday and
Wednesday of last week, it looks even
better now.
With the (northern) spring conference
season now getting into swing and real,
solid positive newsflow set to come from
MUX in the next quarters, the main risk
(apart from gold’s drop) is that MUX fails
to perform to its own guidance in 2015, which seems like a low risk to me, considering the
decent execution to date and the pretty specific plan MUX has put together for El Gallo 1 this
year (it wouldn’t have made such tonnage reduction and grade rising plans just on the back of a
ciggypack). The other main risk is that of exposing one’s cash to the basket case that is
Argentina in an election year and I’m aware of that one, as even though I think San José will be
just fine due to its good location (Santa Cruz province) and established nature of operations (far
far easier to run a mine than to get one running there), you simply never know what that country
might throw at you. But overall, the compelling nature of a turnaround story in a once-loved and
currently largely ignored stock (investor fatigue?) that’s been missed by the majority of the
market so far easily outweighs the identifiable risks.
The IKN Weekly recommends McEwen Mining (MUX) (MUX.to) as a strong buy and sets a
nominal $2 price target on the US ticker stock, representing a 63.9% upside to Friday’s
close. This is however a tentative target for the time being, as the nature of windows of
opportunity such as this one are for near-term stock moves, they’re largely sentiment and
momentum-based, rather than driven by fundamentals. I could play cute and derive a
spreadsheet-based price target for you, but that’s not why I’m buying MUX next week. I’m
buying it because it’s cheap, it’s out of fashion, it’s currently misunderstood and once its results
start flowing for the 4q14 and 1q15 period, Rob McEwen will be making a lot of noise and the
market will have another darling.
I’m buying a full position in MUX as of next week, it will be what I consider as a large one, too.
MUX will be a solid member of the Stocks to Follow list as of next weekend, IKN299, in the
21

“recommended long positions” sub-category.
End of Report
Stocks to Follow
Of our eleven open positions, three lost ground last week (RIO.to, AG, NCQ.to), one stayed
unchanged on the week (BTO.to) and the other seven moved up (DNA.to, FCV.v, SAM.to,
IRL.to, GQC.v, LRA.v, FSM short). The biggest percentage winner by quite some distance was
seen ni Minera IRL (IRL.to up 30.0%), while there were also pleasing moves registered by
FCV.v (up 7.5%) and DNA.to (up 6.9%). Downside moves were generally modest and a
function of the weakness we saw in stocks on Friday.
We currently have 11 open positions on our our ‘Stocks to Follow’ list, four less than our self-
imposed maximum though that’s set to change by this time next week with the addition of
McEwen Mining (MUX) to the list. Four of our open positions are in the green, seven are in the
red and there’s still a long way to go to clean up this portfolio.
Current
company Ticker this week Avg Price Reco date PPS Gain/Loss% Notes
Top Picks
Rio Alto Mining RIO.to buy C$2.30 07-apr-11 C$3.23 40.4% Top Pick, $3.30 tgt, Best PM Jr
Recommended long positions (in current order of preference)
B2Gold BTO.to buy C$2.32 12-sep-14 C$2.52 8.6% V good entry point now
Dalradian Res DNA.to buy C$0.64 27-oct-13 C$0.93 45.3% Nov'14 tgt $1.25, top Au expl
Focus Ventures FCV.v spec buy C$0.23 01-jul-12 C$0.215 -6.5% tgt 50c, avged up, 1q15 news
Starcore Intl SAM.to buy C$0.12 10-jan-15 C$0.13 8.3% added to position, tgt 19c
First Majestic AG spec buy U$10.51 10-aug-14 U$5.94 -43.5% Now in pair trade with FSM
NovaCopper NCQ.to hold C$1.05 09-apr-14 C$0.68 -35.2% small Cu play low vols, hold
Minera IRL IRL.to hold C$0.27 22-jul-12 C$0.065 -75.9% Waiting for financing news
GoldQuest Min. GQC.v hold C$0.26 27-oct-13 C$0.13 -50.0% no point selling so cheaply
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.415 -63.9% solid biz model, LT hold
Recommended short positions
Fortuna Silver FSM SHORT U$4.12 10-nov-14 U$4.55 -10.4% In pair trade with AG
Smaller/Riskier
none at moment
Closed in 2015 closed close price
Argonaut Gold AR.to jan'14 C$1.47 14-dec-14 C$2.53 72.1% Big gain small time, profit taken
Amerigo Res ARG.to jan'14 C$0.405 20-jul-14 C$0.285 -29.6% Given up on weak Cu prices
Reservoir Min. RMC.v jan'14 C$6.05 18-jun-14 C$4.12 -31.9% sold on Cu downturn
Coro Mining COP.to jan'14 C$0.075 26-jan-14 C$0.035 -53.3% sm, sold on Cu downturn
2009, 2010, 2011, 2012, 2013 and 2014 closed positions in appendices below
Now for some notes on current basket stocks.
Starcore International (SAM.to): Position added. Now officially classed as “not so small”
and I got what I wanted at 12c. Then Friday came along and SAM threw out some rather
unexpected news (6). For the princely sum of $2m, SAM.to is acquiring the assets of Creston
22

Moly Corp, a junior that was previously bought out by Mercator Mines in 2011. When Mercator
went under in 2011, the Creston Moly companies were a wholly owned subsidiary and therefore
the receiver running the bankruptcy proceedings is in a position to sell off assets, which is
where SAM.to comes in but before any more, we need to note a few things:
• I said above “is acquiring” and not “has acquired”, because this deal isn’t done yet. For
one thing the receiver may get a better offer for the properties (I have no idea if
there’s any break fee involved in this one, but it sounds like there’s no final closed
contract yet). For another, in the NR we’re told, “The Transaction is subject to Creston
being discharged from bankruptcy, clearing the way for Starcore to complete the
Transaction and to continue with the development and further exploration of Creston's
properties, free and clear from Creston's liabilities as at the date of bankruptcy”. That’s
all about a disputed $2.7m finder’s fee that Mercator hasn’t paid to a third party, with
the case having gone through litigation already. It would seem that if the finder’s fee is
still payable, the price will go up to $4.7m and SAM.to will be liable. That’s all about the
terms of the bankruptcy and let’s see how it goes, but it’s a potential deal-breaker.
• The main asset of the Creston Moly Corp is the Creston property in Mexico. It’s a
moly/copper project (or moly with a copper kicker), it has a 43-101 and a PEA complete
and...it’s a complete dog of a deposit. I know that because I’ve looked at it before,
even when moly was $25/lb and $30/lb. It’s been around for decades (known since the
1960’s and has changed hands on many occasions without ever moving forward into
production. So yes, Mercator paid $194m for this package but then again Mercator are
dumb stupid (you can tell, they went bust) and way overpaid.
• However, as value is also function of price, not merely quality (my new fave phrase)
Creston is probably worth something and if the price tag turns out to be $2m closed,
SAM.to probably has itself a great bargain, something they can tuck away, forget about
and maybe find a suck...an interested buyer further down the line when moly and
copper get price love at market again (it’ll happen eventually). We understand that
holding cost on this property is estimated by SAM.to to be around $80,000 per year,
which is reasonable to the point of looking over-cheap. But even something double that
would be a small cost in exchange for the asset on the books.
• I don’t like Creston at all. As in AT ALL. But in the end WTFDIK and if moly shoots to
$25/lb again somebody’s going to want it in order to run a promo (maybe even SAM
itself). On a risk/reward basis, if SAM.to can close this deal at this price it’s a no-brainer
positive for a $20m market cap company with the means to support itself indefinitely
from its admittedly small but cash flow positive operation, San Martin.
• And the final advantage I put before you on this deal, closed or not, is perhaps the best
and most tangible of the lot; Optics. After the SAM.to mail this morning i suddenly
found myself fielding a whole bunch of mails from people along the lines of “Hey Mark,
you just covered SAM.to didn’t you? Which
edition was it in?” (from subscribers) or “Hey
Otto, I hear you just ran an analysis on
SAM.to, can I take a look?” (from non-
subbers; depending on the person I sent out a
“report only” rip out of IKN290 to a couple of
them..quid pro quo and they’ll do me a favour
back one of these days). The point here is,
suddenly people are looking at tiny little
SAM.to due to this deal (if it happens or not)
and I’ll vouch that when they do they’ll see
the same kind of beaten down value, the
whole “profitable, decently run, neat and tidy gold miner for $20m mkt cap” thing that I
like about it. Which showed a little in the action Friday, as 13c may not be the kind of
23

big percentage move I think this one is capable of putting in soon, but it’s a decent
enough start.
So overall and even taking into account my low opinion of the lousy Creston, Friday’s news was
a clear positive. At $2m for a defined 43-101 resource with a PEA it couldn’t be any cheaper,
holding costs are reasonable, holding a for a couple of years and flip it when the metals get
popular, the risk is way low at such a purchase price. But most of all, people are looking at
today’s SAM.to and for a tinycap/microcap, that’s half the battle in this market. I’m happy to
have bought at the price I did (twice) this month, let’s see where this small but potentially
profitable trade goes in our new rising gold environment.
Fortuna Silver (FSM) (FVI.to) and First Majestic (FR.to) (AG) Pair Trade: Just the
updated chart of the pair from its November 16th start date this week. FSM is now 1% down in
the period, AG is up 16%, therefore the pair is 17% to the good and that means the gap has
closed by about 1.5% since this time last week. Report over.
Wait, there is one more thing: In the four day trading week in the USA, AG was down 4.8% and
FSM was down 4.2%. Meanwhile the silver bullion ETF (SLV) was up 3%. Go figure.
Focus Ventures (FCV.v): I’m late to this Energy Report Q&A with David Cass and Ralph
Rushton of FCV, dated January 15th (7) basically because nobody told me it existed. It does a
decent job of covering bases and telling the world what Bayovar 12 is and the latest
developments, including...
TMR: When will investors see the Bayovar 12 PEA?
RR: Probably sometime during Q3/15.
TMR: What is your current cash position and when do you expect to return to
the market?
DC: We have about $600K. We have an option payment of $3M to make at
the end of February 2015, so we're going to be raising cash within Q1/15.
(note: TMR = interviewer, RR = Ralph Rushton, DC = David Cass)
...which are the two main events in the company’s timeline in 2015. With this option payment
done, things should be smoother sailing for the share price so the that effect, it’s good to see
the PPS move up from the teens and back into the low 20s (the type of price an equity deal can
be done without too much dilution). It also smacks of a company that’s going to see return
business from previous placement buyers, not a bad signal.
Rio Alto Mining (RIOM) (RIO.to): It would have been nice to have seen RIO.to hold the
$3.29/$3.30 line on Friday instead of succumbing to late pressure into thin Friday bids, but I’m
24

not sweating on its chart, either.
Though I will say this; as suspected and mentioned in passing so far (though I haven’t been
particularly explicit yet), Rio Alto looks pretty much priced to the full compared to its peers at
the moment and is probably lacking the type of alpha potential that some of you might want
from your junior. If so, you may consider swapping out and rotating into something a little
more second-tier junior that might offer a bit more immediate upside, if that’s what you’re
looking for at least.
Me no, I’m staying right here and not moving an inch, the idea is to have you’re biggest wedge
in the highest quality companies and that’s the situation for me.
Dalradian Resources (DNA.to): I’m not particularly enamoured of end-week tape painting,
even when it ostensibly suits one of my own positions, so we first note the pop DNA put in at
the end of last week that moved it
from a generally traded 90c that day
to its 93 close (the last penny coming
in last minute trades that added up to
the mediocre total of 6,500 shares).
Suffice to say that if you’re looking to
add some of these next week, unless
gold goes haywire there’s no need to
pay more than 90c Monday.
On the other hand, let’s not drag it
down too much because DNA.to had a
fine week last week, attracting buying
interest and solidly above 90c for the
first time since early July. This is good
and as Iwnattos pointed out over at
his place (8) last week a share price above 90c isn’t just a theoretical good thing for the
company, there’s the matter of this (extract from the DNA 3q14 financials):
February 19th 2015 (i.e. 12 months from the close date) is the last day to exercise and make
whole 11.12m warrants of DNA, with most of them priced at a 90c floor (the rest are broker
warrants at 70c and are as close to a sure fire win as you get round these junior mining parts
25

now). Even though DNA may see a decent slug of those 90c warrants exercised even if the PPS
slips slightly under 90c (larger instos can take a bigger position more easily that way, a few
pennies could be a small price to pay) it stands to reason that if DNA.to fully paid-up shares are
trading above 90c (and the further up the better) it’ll make that exercise choice a no-brainer.
$8.9279. If they’re all exercised it would put nearly $10m into the coffers of DNA ($9.76m) and
that would be most welcome cash for this exploreco, even if its 2015 work program budget is
fully covered. So there’s something else for you to sweat on, a 90c close through February for
this stock ☺. The IKN Weekly, feeding your neuroses since 2008.
B2Gold (BTG) (BTO.to): We do the BTO 4q14 production numbers and 2015 guidance down
in ‘Market Watching’ below. Here let’s note a couple of things about the share price
movements, starting with the massive
volumes (big even for this thing) we
saw in BTO on Tuesday. It got a
mention on the blog that morning
when it was early doors and 8.1m
shares traded, which ended at 17.2m
shares for Tuesday and followed up
with nearly 11m Wednesday, that’s
not even counting the ~5m each of
those days in the US ticker.
It was also the highest point and right
around the production numbers,
which perhaps isn’t such a good signal
for near-term strength in BTO. We’ll
see about that. As you can make out,
rather than BTO on its own this chart compares its performance with the GDXJ juniors ETF and
over the last ten days, even with that sell-off BTO has performed above the average.
Minera IRL (IRL.to) (MIRL.L): The percentage gain of 30% looks more spectacular than the
real money gin of a penny and a half, but you have to start somewhere I suppose. We
witnessed a little rotation into this risk-heavy stock last week as a few people placed some
cheap bets on a gold revival story, something that’s not difficult to imagine. It was a week of
good signs for the company and the nicest thing was the pop in volumes, with decent 6-figure
vols all week in Toronto (854k on Thursday) and even better volumes in its baseline London
ticker (2.2m shares traded Tuesday, 1.2m Wednesday).
My trading reco has not changed since last week, nor will it until a deal is done on Ollachea.
Hold.
The Copper Basket
After four weeks of 2015 The Copper Basket is showing a 7.39% loss to level stakes.
26

company ticker price 1/1/15 Shares out Market Cap current pps gain/loss%
1 Capstone Min. CS.to 2.03 381.95 469.80 1.23 -39.4%
2 Reservoir Min. RMC.v 3.96 47.55 235.37 4.95 25.0%
3 NGEx Resources NGQ.to 1.17 187.71 197.10 1.05 -10.3%
4 Nevada Copper NCU.to 1.65 80.5 102.24 1.27 -23.0%
5 Copper Fox CUU.v 0.135 402.96 62.46 0.155 14.8%
6 Western Copper WRN.to 0.68 93.68 56.21 0.60 -11.8%
7 Hot Chili Ltd HCH.ax 0.16 333.11 54.96 0.165 3.1%
8 Panoro Minerals PML.v 0.295 220.25 44.05 0.20 -32.2%
9 Amerigo Res ARG.to 0.27 173.65 43.41 0.25 -7.4%
10 NovaCopper NCQ.to 0.58 60.15 40.90 0.68 17.2%
11 Regulus Res REG.v 0.35 56.39 21.43 0.38 8.6%
12 Metminco MNC.ax 0.008 1822.6 12.76 0.007 -12.5%
13 AQM Copper AQM.v 0.06 139.24 9.05 0.065 8.3%
14 Catalyst Copper CCY.v 0.305 31.39 7.85 0.25 -18.0%
15 Coro Mining* COP.to 0.045 159.37 4.78 0.03 -33.3%
NB: HCH.ax & MNC.ax priced in AUD$, rest CAD$ Portfolio avg -7.39%
After the carnage of week three, week four brought some relief to The Copper Basket and its
average popped back by 1.6%. We saw six stocks move
up (NGQ.to, RMC.v, CUU.v, HCH.ax, REG.v, AQM.v), The Copper Basket 2015, weekly evolution
4%
one remain unchanged (MNC.ax) and seven move down
2%
(CS.to, NCU.to, PML.v, WRN.to, ARG.to, NCQ.to,
0%
COP.to), but the winners tended to be bigger
-2%
percentage gains so the overall basket benefitted,
-4%
despite the slight numerical disadvantage. Double-
-6%
figure percentage upmoves came from Hot Chili
-8%
(HCH.ax up 22.2%), Copper Fox (CUU.v up 19.2%),
-10%
Regulus Resources (REG.v up 15.2%), Reservoir
Minerals (RMC.v up 13.0%) and NGEx Resources
(NGQ.to up 10.5%), while to the downside we saw
heavy drops in Coro Mining (COP.to down 25.0%) and
Catalyst Copper (CCY.v down 10.7%). Here also (by
demand...not popular demand, but demand all the
same) is the first showing of our tracking chart this
year, even though it’s an ugly visual so far (needs more
weekly data).
Here’s the week’s worth of copper price action, chart
form.
The week before last was the big waterfall drop, 2.80 to
just over $2.40/lb, which then saw a end week rebound
In IKN297 last weekend the comment on that was,
“...the Weds-Fri period has to be taken as a dead cat
bounce until otherwise disproven” and that’s been
largely confirmed by what we saw last week; copper
tried and failed to hold the $2.60/lb line, Friday saw the
return under $2.50/lb and I might not like any of that
but it fits right in with my newly bearish viewpoint on
the future of copper. Honestly folks, I think we’re going lower still and to back that up, this
Reuters report dated January 22nd (9) shows the negativity out there right now. I’ve underlined
and bold-typed the key segments:
Copper fell on Thursday as climbing inventories highlighted oversupply in the market
and consumers waited for weaker prices.
27
ht4naj ht11 ht81 ht52
source: IKN calcs

Three-month copper on the London Metal Exchange (LME) closed 1.8 percent lower at
$5,665 a tonne, reversing gains from the previous session when it broke above $5,800
for the first time since Jan. 13
Industrial consumers were largely standing back, waiting for prices to fall
further, Robin Bhar, head of metals research at Societe Generale, said.
"We haven't really seen huge physical buying and there's been no call on
inventory in terms of copper deliveries. There's still been arrivals in
warehouses," he said.
LME copper inventories MCUSTX-TOTAL rose 5,925 tonnes on Thursday to 225,375
tonnes, bringing the increase this month to 27 percent.
Although prices have rebounded from the 5-1/2-year low of $5,353.25 hit last week,
they are still down by around 10 percent in the year to date.
"Some players are talking of maybe $4,500 as a bottom or $5,000, but certainly a
move below $5,000 is when you might see speculators, investors and
consumers looking to buy," Bhar said.
Also weighing on the market was profit-taking on long positions built up ahead of
Thursday's European Central Bank (ECB) quantitative easing (QE) programme.
The euro fell to an 11-year low against the dollar following the ECB announcement. A
strong dollar makes commodities priced in the currency more expensive for holders of
other currencies.
Copper was also under pressure from news that investment this year by the
Chinese State Grid will rise 9 percent, not the 24 percent previously expected,
after last year's investment figure was released on Thursday and was higher than
originally reported.
Goldman Sachs said in a note on Wednesday that the impact of grid investment was
overblown. Instead, copper's fortunes are far more closely tied to the country's
ailing property sector, the investment bank said.
We move to our regular inventories tracking and on this point, I’d like to point you towards a
new tool at the excellent Cochilco site (in English or Spanish) for copper stats, including of
course the inventory stats of Shanghai, Comex and LME. It’s right here (10) and it’s vastly
good. Anyone into copper fundies should go and play.
• Overall world stock levels put in another big jump this time up 32,098 metric tonnes
(mt) (+9.0%) to finish at 357,784mt. The trend we’ve watched grow is now well and
truly set fair, the bear rules this house.
• This time, the Shanghai Futures Exchange saw little change and was in fact down a
touch in tonnages warehoused, down 2,679mt (-2.0%) to finish at 134.137mt.
• The LME copper warehouse inventories saw the big move, up 36,425mt, or a massive
+18.3% move in just one week, to close Friday at 198,725mt. 25.5kt of that new stock
landed at its Asia warehouses, with most of the rest finding a new home in European
warehouses.
• Comex inventories dropped again and remain contrary to the other systems, though
relatively small in absolute tonnage of course. Comex dropped by 1,648mt (-7.4%) to
finish the week at 20,595mt.
Shanghai Futures Exchange Warehouse Stocks, 2014/2015
220000
200000
180000
160000
140000
120000
100000
80000
60000
28
ts13ceD ht5naj ht21 ht91 ht62 dn2bef ht9 ht61 dr32 dn2ram ht9 ht61 dr32 ht03 ht6rpa ht31 ht02 ht72 ht4yam ht11 ht81 ht52 ts1enuj ht8 ht51 dn22 ht92 ht6yluj ht31 ht02 ht72 dr3gua ht01 ht71 ht42 ts13 ht7 ht41 ts12 ht82 ht5tco ht21 ht91 ht62 dn2von ht9 ht61 dr32 ht03 ht7ced ht41 ts12 ht82 ht4naj ht11 ht81 ht52
Mt Cu
source: Cochilco
Now for notes on a couple of basket stocks:

Reservoir Minerals (RMC.v): Yes of course and in retrospect it couldn’t have been any other
way. I buy, own for for six months, I wait patiently for RMC to kick back over the $4.50 ceiling
level on volume and only on big dump in copper and my throwing in the towel does RMC finally
move up. Harrumph and snort.
My failure and Jonah-like performance on this stock aside, it’s a long-overdue and
understandable development in RMC. It is, after all, being carried on a quarter of just about the
most exciting mineral discovery out there at the moment.
NGEx Resources (NGQ.to): After writing this about NGQ last week, “The stock is back under
$1 and has nowhere to go but South”, the stock price did the only thing it possibly could under
the circumstances and rallied by 10%. Good for the Lundins, deserved egg on face for your
author. However the rest of what I wrote last week stand firm, this one’s going nowhere.
Capstone Mining (CS.to): On Tuesday CS.to released its 2015 guidance numbers (11) for
operations and capex and for a while the stock rallied (here seen with the copper futures
contract line). But it was not to be and CS.to slumped with the metal weakness, closing the
week at another 5 year low (not since the worst of the Lehman/subprime crisis have we seen
these prices). As for the guidance for 2015...
• The 90,000 tonne copper number was in line with every expectation I read, including
that of CS itself in its 2014 corporate literature. Zero surprise.
• It cash cost forecast of $2 to $2.10/lb means at $2.50/lb copper it’s a loss-making
operation, period. Even if it cuts into its capex budget hard, I can’t see breakeven at
below $2.85/lb here. Not good.
• As for that capex guidance, CS.to plans to spend $149m with $36m of that as possible
to defer. For me I would assume it cuts that $36m today (if not they’re a worse
management team than I thought). However, some of the input assumptions, such as
forex in Mexico and Chile, fuel prices, look on the very conservative side in our new
2015 world order, so there may be savings already baked in.
The combo of flat production guidance, the drop in copper market prices that flag operating
losses, plus plans to spend cash on capital
projects in 2015 mean that there’s not a
single reason I can think of to hold or own
CS.to at the moment. Everyone (well, it’s
rah-rah brigade) is talking up the production
expansion expected in 2016 (permits
permitting, as they say) but why should I
buy and wait on a copper stock for a year in
this crappy market environment? The only
people who could like this stock are paid
commission to sell shares to you. It’s one to
revisit in 4q15 once we know more about the
2016 price deck, the chances of it keeping to
the production growth timeline, things of
that sort.
The Low Cost Producer Basket
After 4 weeks, the new Low Cost Producer Basket is showing a 20.88% gain to level stakes
29

company ticker price 1/1/15 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Goldcorp GG 18.52 812 19.44 23.94 29.3%
2 Barrick ABX 10.75 1164.67 14.48 12.43 15.6%
3 Newmont NEM 18.90 499 12.05 24.15 27.8%
4 Franco Nevada FNV 49.19 156.08 8.52 54.61 11.0%
5 Silver Wheaton SLW 20.33 357.39 8.24 23.05 13.4%
6 Agnico Eagle AEM 24.89 173.43 5.65 32.56 30.8%
7 Kinross KGC 2.82 1114.5 3.76 3.37 19.5%
8 Buenaventura BVN 9.56 254.19 2.78 10.95 14.5%
9 B2Gold BTG 1.62 948.9 1.93 2.03 25.3%
10 Pan American PAAS 9.20 151.41 1.69 11.18 21.5%
all prices in U$, using NYSE ticker prices Portfolio avg 20.88%
Despite the weakness shown Friday, our basket managed to eke out a small 0.27% gain on the
average from last weekend. There were just four winners (GG, ABX, NEM, PAAS) and six losers
(FNV, SLW, AEM, KGC, BVN, BTG) but the sizeable gains shown in Newmont (NEM up 8.34%)
and Barrick (ABX up 5.79%) offset the
generally smaller size of the losers that
The Low Cost Producer Basket: Weekly performance
were led by the drop in Kinross (KGC
and comparative to GDX control
down 5.6%). 25%
20%
More than interesting how the top three
market cap names all registered weekly 15%
gains. That, ladies and gentlemen, is basket
10% gdx control
new insto money wanting into the sector
and picking the biggest and most liquid 5%
names first. Time to see whether that
0%
there trickledown economic theory has
Dec31st jan4th 11th 18th 25th
any truth in it.
source: Google Finance, IKN calcs
Thanks to the equal weighting of larger names such as NEM and ABX in our basket list, we’ve
opened a small but positive 2.54% gap on our control, the precious metals producer ETF
(GDX). Here’s the debut of the 2015 tracking chart and you see how closely the pink and blue
lines have been until now.
Buenaventura (BVN): Not much this week, but I wanted to bring you up to date with my
thinking on BVN. I still like the stock and its chances in 2015, but (once again) I can’t get round
the fact that it’s likely to be one of the last to launch in the big-cap mining bracket. Its growth
prospects are good, it’s going to benefit nicely from the drop in operating costs in Peru, but
there are two stumbling blocks that stop me from liking it enough to buy at the moment, Firstly
a current issue, the way it needs to fund its 19.58% pro-rata share of the big Cerro Verde
copper mine enlargement, currently around half way through. Those cash calls are going to
take profits away from the bottom line and BVN treasury this year. Secondly is the longer-term
issue at BVN, that of control. It’s not an M&A target in the slightest, because BVN is run by the
Benavides and executive control is tied up tightly around the class A voting shares held by
Roque and family. Because of that, it’s never going to offer the same type of blue-sky bonus
you get from other stocks when they’re named as potential (or even real life) targets.
The plan here is to put my ambitions to own BVN on the back boiler (once again), but it’s not
going to be forgotten either. To be revisited.
30

Regional Politics and Market Watching
Lake Shore Gold (LSG.to) redux
Thus conscience does make cowards of us all,
And thus the native hue of resolution
Is sicklied o'er with the pale cast of thought,
And enterprises of great pith and moment
With this regard their currents turn awry,
And lose the name of action.
Hamlet, Act 3, Sc 1, LL 84-89
LSG.to and The IKN Weekly is now officially another episode of “Mark fannies around, likes a
stock at a low-ish price, decides to wait and see, watches it spring by 20% in three weeks”. Yes
it shot up without me and the new money in the stock saw it hang on to its price gains better
than most during the soft end week, too. I shall wait again, having identified MUX as a better
target and a better price, but if LSG shows weakness I may still grab some.
With 20/20 hindsight, the analysis and call on the stock in IKN296 was pretty good. That feeling
when you snatch defeat from the jaws of victory.
B2Gold (BTO.to) (BTG) 4q14 numbers and 2015 guidance
We got the last of our merry troops’ Q4 production numbers on time and in good shape last
week when B2Gold (BTG) (BTO.to) announced its numbers pre-open Wednesday (12). As
promised here comes a breakdown of the main points, but I’m going to keep it concise this
time, not wade in too far.
This overall gold production chart for BTO
shows just how strong Q4 was at the
company. It was helped along by the first
ounces poured at Otjikoto (right on time,
well done that company) but the main story
is Masbate.
This breakdown chart, which adds in our
forecast production per quarter for 2015
(using BTO’s guidance figures as our...well,
our guide) shows the outsized production
from BTO’s Philippines operation last quarter in context. There’s likely some bottleneck factor
involved here too, as 3q14 didn’t go well.
BTO: gold production by mine
150000
140000
130000
120000
110000
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
31
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2 tse51q3 tse51q4
BTO: Gold produced, per qtr
120000
100000
80000
60000
40000
20000
0
oz Au
Otjikoto prod
Masbate prod
Limon prod
Libertad prod
source: company filings
As for revenues, the announced $122.4m (from 102,674 oz sold, significantly less than the
01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4
OzAu
source: company data

118,963 oz produced) look like this compared to previous quarters:
BTO: Quarterly revenues
180
160
140
120
100
80
60
40
20
0
32
01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
U$m
source: company data
That also gives us an average realized price of U$1.193/oz on BTO’s gold sales in Q4. As for
financial results, we’re likely to get a modest but reasonable “ticking over nicely” type of profit
from BTO this quarter. Here’s how our model looks for operating profits...
BTO: operating revenues and costs
180
160
140
120
100
80
60
40
20
0
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
$m
revenues COGS Op. Rev
source: company filings, IKN ests for 4q13
...and this is what that looks like on a per-share basis:
BTO: Operating Revenue per share, per qtr
0.10
0.09
0.08
0.07
0.06
0.05
0.04
0.03
0.02
0.01
0.00
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
$/share
source: company filings, IKN ests
In other words a little better than the drab 3q14, nothing anywhere near a crowd-pleasing
blowout of a quarter though. People will be happy enough, I suppose, certainly no reason to
sell this stock on its upcoming 4q14 financials.
Back to production things and with the mine plans in place, guidance set out for 2015 and a
better idea of what BTO is set to do in the future (Gramalote’s going nowhere, Fekola looks
next, Kiaka is a maybe at best etc) it’s a good opportunity to take the longer view and consider
the production growth pipeline for a few years out, not just a few quarters. After all, the most
likely exit strategy for BTO is that some major buys them out (in a paper deal) and adds its gold
production ounces to their pile, so the more ounces BTO can represent the better. Here’s a

chart
BTO: production and IKN forecast production, per annum
1000 910
900
800 710
700 610
600 520
500
373.4 391.2
400
300
200 108.7 144.5 158
100
0
33
0102 1102 2102 3102 4102 tse5102 tse6102 tse7102 tse8102
OzAu
source: BTO data, IKN ests
The latest long-term production outlook from BTO came in its presentation to the Denver Gold
Show in October 2014. There are some differences between what they said at the time and
what we say, and they are
• We say 520k oz Au for 2015 (BTO said 540k) due to lower guidance for Libertad and
perhaps Masbate, though I’m being a little conservative here.
• We say 610k oz Au for 2016 (BTO said 580k) due to better expectations for Otjikoto
and Masbate.
• We say 710k oz Au for 2016, assuming 100k of start-up production from Fekola (BTO
said 900k, assuming 320k from the project that year). I think it prudent not to get too
ambitious on the permitting and construction of any mine, let alone one in a TPLAC.
• We get to 910k by 2018, not 2017. That’s Fekola again
Here’s how that breaks down into component parts:
BTO: annual production and estimates
1000
900
800
700
600
500
400
300
200
100
0
0102 1102 2102 3102 4102 tse5102 tse6102 tse7102 tse8102
OzAu
Fekola
Otjikoto
Masbate
Limón
Libertad
source: BTO filings, IKN ests
As regarding Otjikoto, the other piece of news from BTO last week came Tuesday (13) and was
results from the Wolfshag high grading zone discovered next to the main project deposit by
BTO. The plan here is to use this high-grading material as feed to boost the grade of the main
Otjikoto deposit, much the same style as Libertad will bring Jabali into the picture at that mine
in Nicaragua. This makes sense and is the reasoning behind our upgraded estimates for
Otjikoto 2016 and onwards.
The bottom line: BTO is in fair shape, I’m not dying or desperate to add any more at its newly
recovered share price, but it looks good to be a sector leader in the weeks to come and I’m a
happy holder at current levels. However if for some reason it does spike up hard ($3+) I’d be a
seller into the strength and wouldn’t think twice about taking profits.

Guatemala looking quick to put taxes up on fuel
It’s the last year of President Otto Pérez Molina’s government and it shows. After hiking taxes in
his 2015 budget (including that 10% royalty on mining we considered at the time which for a
time knocked the stuffing out of Tahoe Resources (TAHO) (THO.to)), the drop in oil prices now
has the attention of his government because they see an opportunity to raise taxes on
hydrocarbons. According to the country’s tax chief on being interviewed by Guatemala’s Prensa
Libre newspaper last week (14), because the price of oil has dropped sharply, the percentage
tax flow has reduced, which is a pleasant way of telling people that it’s not just the people who
should enjoy the lower prices for oil and the government wants it bit. Therefore at least some
of the drop in fuel is about to the filled in by an extra layer of tax burden in the country. It
wouldn’t come as any surprise to see other countries adopt this measure soon.
True Gold’s (TGM.v) bad Karma
This is the stock I owned briefly in 2014, but dumped the position at basically breakeven when
they took away most of the potential upside for shareholders by raising capital via a $100m
streaming deal with Franco Nevada (75%) and Sandstorm (25%). Today I’ll also repeat the
nerves I had (and discussed at the time) about holding a position in an exploreco in Africa, as
the political/community risk was pretty much a closed book to me and I’ve learned the hard
way not to fly blind on these matters (it’s why I largely stick to LatAm, after all).
And that’s because of the events of the last 11 days at its Karma project. We first noted them
on the blog on the day of the violent protests (15) and then early Tuesday morning Jan 20th
(16) just before TGM published its latest NR (17) to tell of the work stoppage, the unknown
resumption date, the $4m to $8m damage to plant and buildings and the sacking of
President/CEO Melrose at the hands of the main TGM player Mark O’Dea, who wished his ex-
CEO “well in his future endeavours”. That was nice of him.
In my Tuesday post I linked to several news stories on events and it seems there are several
problems faced by TGM with locals, but the main one, the stand-out issue (and obviously the
one that ex-head Melrose dropped the ball on) is the small matter of Islam’s most sacred
mosque that lies just next to the open pit mine plan. Last week things went into damage
control mode in the newly installed Burkina government, with the Minister of Mines and Energy,
one Emmanuel Nonyarma, trying to calm locals by telling them (18) “...(we) assure all Muslims
and particularly those of the
Tidjania (directly attached to
this mosque) that nothing
will happen or can happen to
the mosque, which is in a
sacred and divine location”.
Unfortunately, locals are that
easy to convince and for one
I can’t blame them. As if you
check on the Karma
feasibility study project area
map (page 39 of the Karma
feasibility study dated
January 2014), you see the
outline of the pit (red) and t
the right, those grey blotch
areas. The larger of the two
blotches is the town of
Ramatoulaye, with a
population of around 7,000
people and home to the aforementioned sacred mosque.
34

Further on in the Karma feasibility study, on page 195, we get more information on the local
religious mix and the mosque itself:
And then further on, we get to read how TGM at Karma recognizes the potential for community
problems, as during the two years when the closest pit to the town is developed the mining will
be at less than a kilometre from the town and the mosque. Explosive charges, shovels and
trucks, dust and noise, all the things we know and love about open pit mining operations.
Right next to Burkina’s most sacred spot for its four million followers of Islam.
According to TGM NRs in December (19) (20) the problems started on December 9th.(at which
time we were told “the Company is working to address the concerns voiced by certain
individuals in the community and expects to reach a resolution shortly.” In January the religious
heads of Islam had their 93th conference at the mosque in Ramatoulaye. We’ve also been told
that the major earthworks were scheduled to begin in January and that first pour was planned
for end 2015. As situations go, it looks sticky from the outside and there’s obviously been some
serious community relations negligence on the part of TGM for things to have gone sour the
way they have (the probable cause for Melrose’s sacking). Whether or not the situation is
repairable at this point is beyond my ken, but i
will say that when there’s this type of
confrontation in Latin America and the main
sticking point is religious and/or about sacred
sites, it’s a whole lot more complicated than
just trying to throw money at a problem until it
disappears. Majaz/Tambogrande in North Peru,
Esperanza in Morelos South Mexico, the
Wirikuta zone in North Mexico, there are three
off the top of my head. In a best case situation,
I’d venture to say this project just got more
expensive and its timeline stretched (obviously
in a worst case it’s not going to happen) and
according to its streaming deal, True Gold has
20,000 oz of gold to deliver to FNV/SAND in
2016, even if it has to buy the metal on the open market (in fact the wording of the deal makes
that clear).
Yes you guessed it, this one is an almighty “avoid” until further notice, dirt cheap shares or not.
Conclusion
IKN298 is done, we end with bullet points:
• I’m buying a chunky piece of McEwen Mining (MUX) (MUX.to) this week, it has all the
signs of the right stock in the right place at the right time. Right price, too. The
Argonaut Gold (AR.to) trade went very well and you don’t expect one that looks its
equal to show up so soon afterwards as this one has, so I’m a little surprised to see this
excellent window of opportunity. But I’m not sweating it either, I’m just buying it. 2015
35

will be the first wholly good year for Rob McEwen’s new vehicle, so be a part of it
before the crowds arrive. And they will.
• Starcore (SAM.to) threw out a surprise last week, an overall pleasant one at that. It’s
still looking a bit stuck at the 13c-or-below range, this move to buy up cheap and
known land in Mexico may provide the impetus it needs. Happy to have added, though
still smallstuff.
• I’ve been kicking myself about missing the move in Lake Shore Gold (LSG.to) all week.
The downside of being a whuss. Better said, one of the downsides.
• B2Gold (BTO.to) (BTG) stuck in a reasonable, in-line 4q14 and 2015 guidance NR last
week. Easy to hold and if gold goes higher, this one will too.
• My current vacation plans are now on hold for February, there may be too much going
on in the market (i.e. money to be made) to move from the office. At this point my best
guess is that the wife and kids get the extra pleasure of beach time without me
hanging round their neck and annoying them. No fixed plans as yet, though.
The current Top 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.calculatedriskblog.com/
(2) http://www.reuters.com/article/2015/01/23/metals-goldman-forecasts-idUSL1N0V21PS20150123
(3) http://www.mcewenmining.com/files/doc_presentations/20150119_mux_presentation_website.pdf
(4) http://phx.corporate-ir.net/phoenix.zhtml?c=204920&p=irol-newsArticle_Print&ID=2009078
(5) http://www.sec.gov/Archives/edgar/data/314203/000110465913054931/a13-16771_1ex99d1.htm
(6) http://finance.yahoo.com/news/starcore-acquires-creston-moly-bankruptcy-130000381.html
(7) http://www.theenergyreport.com/pub/na/16431
(8) http://myownmarketnarrative.blogspot.com/2015/01/dalradian-to-da-moon-alice.html
(9) http://af.reuters.com/article/metalsNews/idAFL4N0V134A20150122
(10) http://bd-elec.cochilco.cl:8080/boletin-web/pages/tabla4/buscar.jsf
(11) http://finance.yahoo.com/news/capstone-mining-2015-operating-capital-113000413.html
(12) http://finance.yahoo.com/news/b2gold-corp-achieves-record-2014-083000816.html
(13) http://finance.yahoo.com/news/b2gold-announces-updated-higher-grade-083000952.html
(14)
http://www.centralamericadata.com/es/article/main/Guatemala_Ms_impuestos_a_gasolinas?u=cceac143115e9505d8ab
a5c37bdacb65&s=n&e=2&mid=[MESSAGEID]
(15) http://incakolanews.blogspot.com/2015/01/karma-police-arrest-that-man-and-that.html
(16) http://incakolanews.blogspot.com/2015/01/true-gold-tgmv-may-have-serious-problem.html
36

(17) http://www.truegoldmining.com/news/true-gold-provides-corporate-and-operational-update
(18) http://burkina24.com/2015/01/20/manifestations-a-true-goldnamissiguima-environ-2-a-4-milliards-f-cfa-de-pertes/
(19) http://www.truegoldmining.com/news/true-gold-reports-temporary-work-slowdown
(20) http://www.truegoldmining.com/news/true-gold-draws-down-additional-us207m-project-financing-franco-nevada-
and-sandstorm
Stocks To Follow Closed Positions 2014
Closed in 2014 closed close price
Fortuna Silver FVI.to jan'14 C$2.80 23-dic-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-abr-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-ene-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-ene-14 C$0.86 -17.3% silver/M&A spec, rel. small
Timmins Gold TGD nov'14 U$1.38 09-abr-14 U$0.99 -28.3% failed trade, sell, raise cash
Kinross Gold KGC nov'14 U$2.90 20-oct-14 U$2.15 -25.9% V small trade, didn't work, chau
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.145 -48.2% lost China sponsor
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
37

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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