IKN #300Premium

The IKN Weekly
Week 300, February 8th 2015
Contents
This Week: CAD1=USD0.8 part deux, Greece and the EU, K.I.S.S.
Fundamental Analysis: Teranga deferred.
Stocks to Follow: Overview, McEwen Mining (MUX) (MUX.to), Starcore Intl (SAM.to), First
Majestic (AG) (FR.to), Fortuna Silver (FVI.to) (FSM), Minera IRL (IRL.to) (MIRL.L), Focus
Ventures (FCV.v), Rio Alto Mining (RIOM) (RIO.to), Dalradian Resources (DNA.to), B2Gold
(BTO.to) (BTG), NovaCopper (NCQ.to).
Copper Basket: Overview, Capstone Mining (CS.to), Amerigo Resources (ARG.to).
Low Cost Producer Basket: Overview, Pan American Silver (PAAS) (PAA.to).
Regional Politics and Market Watching: Aberdeen (AAB.to): No deal for us, Peru: Las
Bambas sees community unrest, Peru: Macro forecast updates, Mexico: Santacruz Silver (SCZ.v)
under risk of closure for poor safety record, Argentina: CFK in China, True Gold (TGM.v): O’Dea
keeps buying and comparative to Teranga, The Torex Gold (TXG.to) kidnapping news.
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
CAD1=USD0.8 part deux
After last week’s note to adjust the house forex to CAD1=USD0.8, reader ‘DS’ nudged me in the
direction of the long-term CAD/USD pair chart by noting that on the subject of bottoms and
turnarounds, it was showing something interesting. Thanks to DS I went and check and...
...yes indeed, I’m forced to agree that even I could buy into that narrative. I remember being
shown how closely Canada’s forex would track the price of copper, but that tight correlation
was a pre-Lehman thing and I’ll now take a leap of assumption and say there’s a metal-plus-oil
(sands) correlation showing these days, which would account for the sharp look of the latest
round of weakness. Yes I’m generalizing and it’s far more complicated than that so no need to
1

write in, but it’s also fair to say that the Loonie looks unlikely to bounce before Canada’s export
mix is ready to generate better revenues and that’s a commodities driven thing, even these
days. Therefore the critique of the “gotta bounce from here cos the chart says so” is that the oil
patch dynamics do look different all of a sudden and there’s reasonable logic behind oil staying
low, so a rebound isn’t some sort of given at the moment. We’ll see...but I fully admit that I do
like the chart, DS. Wouldn’t have featured it otherwise.
Greece and the EU
It’s there in the corner of my eye and as things may come to a head next week, a few words
today. We saw the European Central Bank (ECB) play hardball last week when refusing to allow
Greece to use bonds as further collateral against bank funding. That’s as quick and rough as
possible, for a better and more detailed analysis see Yves Smith’s Naked Capitalism blog (e.g.
this recent post (1)) as she and her team are doing a fine job of closely monitoring this one. We
now have Greece this weekend saying (2)) it will make its “integrated proposal” to the EU this
Wednesday that they frame as a bridge agreement that will keep things ticking over while a
more permanent solution is found. That seems sensible and if level-headed leadership prevails
we would get some respite, but as Yves Smith noted on Friday after noting once again that
Greece’s newly ruling Syriza Party isn’t the type that will fudge and do U-turns, it really is a
radical left wing political party of the type that the world has nearly forgotten about, not the
soft-centred parties, left wing in name only such as Hollande’s France, Blair’s UK, Bachelet’s
Chile etc;
The ECB’s actions so far have been remarkably bloody-minded, shocking quite a few
seasoned Eurozone mavens. I’m not sure anything can now be ruled out. With the
public showing strong support of the government, the odds of a Grexit, something that I
had discounted as possible but not terribly likely, now is higher odds.
Now as much as I like Greek people, the food, the beaches and their unbeatable cultural
heritage, all this only gets mention in the intro section of IKN300 due to its potential effect on
the gold price. There seems to be a blind spot in The Americas as to how big and nasty the
effect of no-holds-barred confrontation between The EU high table (start with Germany) and
Greece, to the point where if things flare up it could be construed as a Black Swan event by
those who’ve probably assumed to this point that those European girls and boys will probably
muddle through and find some way of booting the problem into the future. It ain’t necessarily
so, people. And while the most cringeworthy end of the goldbug world (step forward Frank
Holmes) will tell you that gold is good against inflation, good against deflation, it’s a love trade
and it’s a fear trader, those of us who are not delusional about the word or high on drugs 24/7
know that gold’s where people run to when the markets shake and creak; we can argue long-
term undercurrents another day, near-term upmoves in gold are fear-trade related,
period. The assumption that things will be just fine in the EU/Greece spat seems to be fully
baked into the gold price, which leaves little downside risk and plenty of upside potential if
Greece’s proposals on Wednesday are treated high-handedly by the EU high table. I’m not
calling gold higher on this next week, I am giving a headsup on something that’s being
discounted on false assumptions. I recommend a good read through the Yves Smith blog for far
more fabric than there is here in this short chunk of prose.
UPDATE Sunday evening: The above was written Saturday morning, today the new Greek PM
addressed his parliament for the first time and said (2a), in a speech those who know say will
be the same message carried to the EU later this week, that it ruled out a bailout extension (the
plan that the EU high table insists upon). Ostensibly at least, this puts Greece on a collision
course with its wider EU partners at the upcoming meeting, but PM Tsipras did lay down paths
of diplomacy as well by stating they didn’t need everything to happen at once, that broadstroke
agreements would be sufficient for the time being, that their full program could take up to four
years to put in place. Plenty of room to kick this particular can down the road if the EU high
table decides that a little compromise isn’t such a bad idea after all. At this point, with Syriza
sticking to the agenda with which it was elected, the ball looks firmly in Germany’s (and
friends’) court.
2

K.I.S.S.
The BLS BS? The gold hit? Complaints of a rigged market from some of the gold bulls and most
of the gold bugs? IKN directs you to the intro to IKN299 last week and...
“Yes, markets get manipulated from time to time by big money players and so
freakin’ what? Get over it.”
..., because you can count me among the gold bulls but not the ones that are moaning and
whingeing this weekend about the unfairness of it all. What we were offered in fact was a
useful buying opportunity and that’s the reason for the Flash update of Friday morning (see
appendix 1), my purchase of more MUX that day. If you’re bullish gold, the temptation can be
towards the more highly leveraged vehicles that sit on top of the metal. The logic train is easy
to follow, there are a multitude of variants, here’s just one:
“I think gold’s going up(cid:1) so I buy gold but wait(cid:1) I’d get better % gains from
a 20% move in gold if I buy a producer but wait (cid:1) what about that producer
over there that’s currently making a loss because(cid:1) if I buy that its share
price will rocket when gold’s $200/oz higher but wait(cid:1) even better a silver
producer but wait(cid:1) what about a loss-making silver producer but wait(cid:1) what
about that beaten down explorer with a good silver deposit but wait (cid:1) that
one’s even cheaper and when silver’s back at $25/oz they’ll be queuing at...”
You know the rest. Risk tolerance is a whole subject, but the target for The IKN Weekly for this
current period isn’t the risky end of this risk-laden sector. What we’re after is exposure in:
• Gold Producers
• That are profitable at current metals prices
• That have reasonable balance sheets
And on that score, K.I.S.S. means you don’t need my advice on which exact stock to buy
because you have a whole bunch, large or small, to choose from. Want to go bigger-scale and
buy Goldcorp (GG)? I will not stop you. Want to go smaller scale and buy Richmont Mines
(RIC.to) or Lake Shore Gold (LSG.to). The same. Round here the ones I currently hold that fit in
that category also, unsurprisingly, hold the lion’s share of my portfolio cash and include Rio
Alto, B2Gold, McEwen Mining and Starcore, but I’m looking to add some more to that, hence
the section that comes next. But there are differences in the names listed.
• RIO.to and BTO.to are largely exposed and understood stocks, seen as successful and
profitable by the market in general and have valuations that match those expectations
(within a price range of discussion).
• MUX and SAM.to are less understood at today’s price deck and moment in the
companies’ respective developments, which means they have greater potential for
sector outperformance/alpha.
It’s also why I’m looking at what I’m looking at right now (see below), though for personal
logistical reasons the job that I thought would be finished this weekend is still work in progress.
Fundamental Analysis of Mining Stocks
Teranga Deferred
The plan all week has been to bring a new name for coverage at The IKN Weekly to your
attention, Teranga Gold (TGZ.to) (TGZ.ax) (TGCDF). However I’m deferring it until next week
because it got to around today Sunday afternoon and, quite simply, I’ve run out of time. Here
3

come the weak and pathetic excuses:
• Wednesday evening and all day Thursday I was ill with what turned out to be low-
grade food poisoning. All over now and to cut a long story short I ate a cebiche which
was a mistake. But it took away a lot of my normal work/research time.
• The rainy season is now upon my home city of Arequipa and with it, this weekend has
seen intermittent power cuts including a long one yesterday Saturday evening. Again, a
hindrance.
• The news from Torex yesterday took me away from my work and got me even further
behind, due to first the newsflow and second because I got involved in some deeper
background research that I shouldn’t have done, timewise, 20/20 hindsight.
• Teranga isn’t a straightforward company to analyse financially. Now I could wing it and
put together an analysis that covers the main points, but when it comes right down to
it I’m not trying to convince you guys out there, I’m trying to convince myself about
this as an investment. I want to understand the financials more deeply and due to the
time constraints (plus the feeling that I’ve been trying to rush too hard and catch up
while writing today) I’m not in that position yet. I need to convince myself fully.
So there you have it, the best-laid schemes o' mice an' men gang aft agley and all that jazz.
However I want to underscore that I am really interested in this stock, on first and second pass
it looks cheap and its main identified downside risks of variable quarterly production, potential
for cost overrun, plus the political risk of operating in Senegal are also acceptable considering
the upside potential. Here’s a year-to-date chart with some notes that was part of today’s
planned piece...
...that shows a few thoughts on why it’s piqued my interest. Meanwhile, I actively encourage
you to do some research on this potential trade. A good place to start is its latest corporate
presentation which you can find on this link (3) and for some very interesting background on its
community relations and wider political risk profile, this new video (4) is highly recommended. A
full IKN Weekly NOBS fundamental report will happen on TGZ next week, along with any
trading call. Meanwhile, there is a small extra mention of TGZ below in the TGM.v section.
Stocks to Follow
Of our twelve open positions, only three gave us a week-over-week win (SAM.to, IRL.to, FSM
short). Which means nine were weekly losers (not listing them all) with double-figure
4

percentage losses taken by Focus Ventures (FCV.v down 13.6%), McEwen Mining (MUX down
10.4%), B2Gold (BTO.to down 10.0%) and just behind those came Rio Alto (RIO.to down
9.6%). Of the winners, best by far was Minera IRL (IRL.to up 41.7%) which may be coming off
life-support; at the very least it’s showing us a pulse now.
Just two small changes to the list this week; Firstly the cost average for MUX has dropped two
pennies to U$1.16 after having added a portion on Friday. Secondly I’ve moved the GoldQuest
(GQC.v) position to the smaller/riskier category, as it’s the one I have least ambition for at the
moment. Or perhaps that should read hope. Anyway, it’s small, it’s drifting becalmed, it’s not in
any hurry to do much, I may sell it soon, it’s been demoted.
With the addition of McEwen Mining (MUX) we now have 12 open positions on our our ‘Stocks
to Follow’ list, three less than our self-imposed maximum. Five of those are in the green, seven
are in the red.
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$3.28 42.6% Top Pick, Best PM Jr, M&A tgt
Recommended long positions (in current order of preference)
McEwen Mining MUX STR buy U$1.16 25-jan-15 U$1.12 -3.4% New position, excellent value
Dalradian Res DNA.to buy C$0.64 27-oct-13 C$0.99 54.7% Nov'14 tgt $1.25, top Au expl
B2Gold BTO.to hold C$2.32 12-sep-14 C$2.25 -3.0% Dependent on Au price moves
Starcore Intl SAM.to buy C$0.12 10-jan-15 C$0.14 16.7% Small Pos., added, tgt 19c
Focus Ventures FCV.v hold C$0.23 01-jul-12 C$0.19 -17.4% tgt 50c, due Feb'15 financing
First Majestic AG spec buy U$10.51 10-aug-14 U$6.06 -42.3% Now in pair trade with FSM
Minera IRL IRL.to hold C$0.27 22-jul-12 C$0.085 -68.5% Waiting for financing news
NovaCopper NCQ.to hold C$1.05 09-apr-14 C$0.64 -39.0% small Cu play low vols, hold
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.37 -67.8% solid biz model, LT hold
Recommended short positions
Fortuna Silver FSM SHORT U$4.12 10-nov-14 U$4.69 -13.8% In pair trade with AG
Smaller/Riskier
GoldQuest Min. GQC.v hold C$0.26 27-oct-13 C$0.125 -51.9% may sell soon
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.
McEwen Mining (MUX) (MUX.to): Position added. As per the Flash update of Friday (see
appendix 1) I took the opportunity of adding a portion to the current position at U$1.13,
bringing the total cost average down to U$1.16 (and a couple of tenths, but I’m rounding down
so bite me). Damned cheap and an excellent buying window here.
Starcore International (SAM.to): The market paid up to 15.5c to own SAM.to shares last
week and although this one got caught by the Friday selling as much as any other, it still
managed to squeak out a winning week, swim successfully against the grain and keep the
momentum going that’s been building all through 2015.
We should get the end-January quarter (Q2 of its financial year) production numbers from
5

SAM.to next week. This is part of the risk of playing a tiny producer, as a small swing in any of
the variables that go into mining and producing gold can affect a single quarter’s production
heavily on a percentage scale, to the good or the bad. As a ballpark, I’ll be looking for
something in the region of 6,000 oz AuEq, but that in turn depends on whether tonnage mines
were normal, higher or lower than average. When we know some numbers, we can make
better guesstimates on how they’ll affect the company’s PPS.
Fortuna Silver (FSM) (FVI.to) and First Majestic (FR.to) (AG) Pair Trade: First our pair
trade tracker chart, starting from the launch of the equal-weighted pair trade (AG long, FSM
short) as at November 16th 2014.
First Majestic (AG) is up 19%, Fortuna Silver
(FSM) is up 2%, our pair is 17% to the good
and marginally better than this time last
week. All as per, basically.
Re First Majestic (FR.to) (AG), we now know
that the company gives us its year-end and
Q4 financials on Monday February 23rd (5)
which means in effect that I have two weeks
to decide whether I want to be long into the
numbers or whether it’ll be time to play short-
side only on silver, sell the AG and leave the
FSM short open. Cogitations and perhaps
even a decision on that in IKN301 next weekend (if I can make up my darned my for once).
As for trading, it was thinnish in First Majestic (though the more popular AG ticker on the NYSE
held up ok) but particularly lacklustre in Fortuna, which is unusual.
Minera IRL (IRL.to): Yes, better price action and even a few people grabbing at the ask. This
doesn’t change a thing here, we hold until real news shows.
Focus Ventures (FCV.v): FCV went under 20c on Friday afternoon in very thin trading and
stayed there, basically because there was no interest at all in the stock. Not good. We should
see some financing resolution soon.
Rio Alto Mining (RIOM) (RIO.to): I’m absolutely certain that I’m not the only person round
here who’s noticed this:
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It’s one of those things which works right up to the moment when it doesn’t but the wide-
bouncing trading range we’ve seen in RIO.to over the last ten days catches the eye. There are
as many as six ~10% bounces on that chart in just two weeks of trading, which means last
Friday evening caught it at a near-term peak, this Friday saw it in the trough, we shouldn’t read
too much into either.
As for news, we had some from RIO.to via a meaty fundies NR on Thursday (6) which
announced the new reserve/resource count for the La Arena gold oxide operation, plus news on
the La Arena stage 2 copper/gold sulphide operation.
First the easy bit: As RIO.to has put a $3/lb copper base case price on the Stage 2 project and
with copper doing what it’s done recently the project has been put on ice. This came as a shock
to nobody and the way in which the price hardly budged on the news shows how baked in it
was. Stage 2 can (in theory at least) be part of a NAV-based valuation for the company but as
noted just a couple of editions ago, I’m good about moving forward with the cash flow model
and discounting its effect to zero.
So to the reserve and resource update for La Arena oxide and for the purposes of brevity here’s
the thing that really matters, the proven and probable reserve table from last week’s NR (as at
December 31st 2014) with some notes jotted on it as to the main changes:
Some notes on the notes:
• At ~1.28m oz P+P (we’re not so concerned about M+I resource or inferred) compared
to 1.08m 12 months ago, it means RIO.to managed to produce 222k oz Au and add
200k oz to the overall reserve at the time time, a net of around 422k oz. That’s good
drilling.
• The average grade has dropped by 0.04 g/t to 0.39 g/t Au. However the cut off grade
has been bumped up slightly, with sediments hosted gold now at the same 0.1 g/t Au
as the other rock types (was 0.07 g/t).
• The other big change is in the strip rate, which is back at 1.42X after being calculated
much lower at 0.76X in 2014.
• All these things point to one thing in the near-term: The drop in operating costs profile
at RIO, thanks to ongoing efficiencies, cheaper fuel and the new hook-up to the
Peruvian national grid for production facility power, means that RIO.to can now
consider ore some of the part so its deposit that were previously classified as waste.
• In the longer term, ostensibly at least RIO.to has added almost a year’s worth of mine
life to its reserve thanks to its exploration efforts in 2014, which is good. What that
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probably means come 2019 and beyond is more like a year and a half or two year’s
worth of tailing off production (assuming nothing else is found to add to the pile), as
the strip rate climbs and average mined grades (rather than in-situ reserve grades)
decrease, even though they’ll still be profitable ounces to mine. That’s for the longer-
term future, though.
But for the time being, keep it real and think 2015 because as this from last week’s NR
(7)states:
As stated in a previous press release dated January 12, 2015, the Company forecasts its La
Arena Gold Mine will produce between 210,000 and 220,000 ounces of gold in 2015 at adjusted
operating costs as defined by the World Gold Council ("WGC") to be in the range of $570 to $600
per ounce of gold sold. WGC All-in sustaining costs - including selling, general and administrative
costs, exploration, and sustaining capital - are forecast to fall within a range of $730 to $765 per
ounce and WGC all-in costs within a range of $740 to $775 per ounce for the year.
That compares to this from the equivalent NR of 2014 (8):
GUIDANCE FOR 2014 For 2014 the Company anticipates gold production of 190,000 to 210,000
ounces, roughly equivalent to production in 2013. Adjusted operating costs for 2014 are
forecasted to be in the range of $625 to $700 per ounce of gold sold. For 2014 all-in sustaining
costs – including selling, general and administrative costs, exploration, and sustaining capital –
are forecast to fall within a range of $825 to $900 per ounce and all-in costs within a range of
$1,000 to $1,100 per ounce for the year.
So extra 200k of gold in the ground or not, 0.04 g/t less or not, we’re still talking about a highly
profitable and efficient mining company in the year ahead that’s set to produce at the same
rate as we saw in FY14, but at a much better all-in cost per ounce average.
Dalradian Resources (DNA.to): The strong volumes continued on sell-off Friday and the
1.1m shares traded almost saw DNA remain UNCH on the week. With less than a minute left on
the clock it was trading at $1.03, but
1,600 shares traded into a soft bid
bumped this newly popular issue down
to its 99c close. Which is kind of
interesting, but the real interest for me
are the two items noted on this five day
chart:
First up, DNA traded rock steady at-or-
about $1 all week. Second up, when all
around faded and dropped into the BLS
jobs numbers open on Friday so did
DNA, but unlike most others it
immediately found support and
bounced right back. That was
particularly strong action in my view.
B2Gold (BTG) (BTO.to): Another poor week
from BTO and while it’s still holding its own
against peers, up roughly the same as both
the GDX and GDXJ benchmarks, it’s a long
way down from the peak it reached after just
three weeks of the year.
Also, and this is being quite serious without
any sort of tongue in cheek, I note that the
stock is 12.8% down since the night of the
punch-up between TD Sec’s Daniel Earle and
BTO’s Clive Johnson and lagging both of those
8

benchmarks during the period too (around 7%). I honestly didn’t think it would have mattered,
but did it?
NovaCopper (NCQ.to)
NCQ brought us its YE numbers on Friday (9) which were in-line with expectations. After all,
NCQ raised last year the cash it would need to get it through its year of development so its
$5.1m in cash ($4.8m working cap) was right on its budgeted schedule. The one part of its
filings which raised my interest was the report on the progress towards getting the key roadway
built to the Ambler project, the Ambler Mining District Industrial Access Road (AMDIAR). As the
NR covers the issue well enough, I’ll quote from that:
During 2014, we focused efforts on supporting AIDEA with their activities towards advancing the
Ambler Mining District Industrial Access Road ("AMDIAR”) which is anticipated to provide access
to UKMP Projects. AIDEA continued to collect community input at meetings held through the
winter of 2013/2014 in various local villages. In late April 2014, AIDEA’s board of directors
approved a resolution authorizing AIDEA to proceed with an application for the Ambler road to the
federal agencies that have jurisdiction over the AMDIAR project and to engage a firm to prepare
the environmental impact statement for the project under the direction of the federal agencies.
Environmental baseline studies were conducted by Dowl during the summer field season in
preparation for the submission of the environmental impact statement. The United States Army
Corps of Engineers (“USACE”) has selected HDR, Inc. as the third party environmental engineer
to manage the environmental impact statement process on behalf of the USACE. The permitting
document is substantially complete. In light of the recent drop in oil prices, the Government of
Alaska is reviewing all capital projects. We expect the permitting process will continue.
The “hmmm” moment comes right at the end, with the Alaskan government maybe cutting
budgets due to the oil price drop. As NCQ’s projects are all about long-term I’m not going to
sweat on that too hard at the moment, but it’s a new grey cloud on the horizon for this stock
and a potential negative I may need to consider. For the moment it’s an easy enough hold,
though.
The Copper Basket
After six weeks of 2015 The Copper Basket is showing an 8.78% loss to level stakes.
company ticker price 1/1/15 Shares out Market Cap current pps gain/loss%
1 Capstone Min. CS.to 2.03 381.95 527.09 1.38 -32.0%
2 Reservoir Min. RMC.v 3.96 47.55 210.17 4.42 11.6%
3 NGEx Resources NGQ.to 1.17 187.71 197.10 1.05 -10.3%
4 Nevada Copper NCU.to 1.65 80.5 113.51 1.41 -14.5%
5 Copper Fox CUU.v 0.135 402.96 58.43 0.145 7.4%
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 46.64 0.14 -12.5%
8 Amerigo Res ARG.to 0.27 173.65 45.15 0.26 -3.7%
9 Panoro Minerals PML.v 0.295 220.25 44.05 0.20 -32.2%
10 NovaCopper NCQ.to 0.58 60.15 38.50 0.64 10.3%
11 Regulus Res REG.v 0.35 56.39 19.74 0.35 0.0%
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 8.95 0.285 -6.6%
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 -8.78%
The big move up in copper failed to reflect in our basket, which ended 0.15% down on last
week due to the way in which the smaller cap stocks refused to budge from their lows. Just
four stocks registered gains (CS.to, NCU.to, WRN.to, ARG.to) which surprised me somewhat,
with the biggest of the lot from Capstone (CS.to up 19.0%) as it rebounded on bargain hunting
9

buys. Six stocks were unchanged on the week (NGQ.to, PML.v, REG.v, MNC.ax, AQM.v, COP.to)
and five were losers on the week (RMC.v,
CUU.v, HCH.ax, NCQ.to, CCY.v), with the The Copper Basket 2015, weekly evolution
4%
biggest percentage loss from Hot Chili
2%
(HCH.ax down 12.5%).
0%
-2%
-4%
-6%
To the copper market and the near term rally
-8%
that the previous week hinted at came to
-10%
fruition (NB: I didn’t call it, only said that
there was a chance and I certainly didn’t
trade it) as seen on this 60 minute chart left.
That’s a strong rally for one week’s worth of
action. However, context remains necessary, to to the right we have the dailies on the same
contract to do just that:
We’re not back to normal in copper, we’re not back to a level where profits flow for one and all.
We’re back to where we were in mid-January after the first day of the waterfall drop. Not only
that, but TA fans will see that lower high we just put in, which doesn’t bode well. For bulls, last
week was a better one but even the most rampant will admit there’s a long way to go to repair
the mess. As for me, aside from my small and easy to handle exposure to NovaCopper (NCQ.to)
I’m going to remain outside this particular field of battle. Strictly speaking I’m neutral on
copper, sentiment-wise I can’t help but see it going lower.
We move to our regular inventories tracking (10) and the bullet points:
• Overall world levels rose sharply. With 37,530 metric tonnes (mt) (+9.3%) added to
the overall world warehoused copper for a grand total of 442,161mt.
• The Shanghai Futures Exchange saw another small rise, up 2,254mt (+1.7%) to finish
at 139,396mt.
• The big move was again at LME warehouses. Copper inventories here jumped a
massive 36,325mt (+14.6%) to close Friday at 284,450mt. We’re now at the highest
overall levels seen in three years in this corner of the system and among its
subdivisions, the 22,225mt added to LME Europe warehouses to bring that total to
71,375 represented a 45.2% jump.
• Comex inventories dropped again, down by 1,149mt (-5.9%) to finish the week at
10
ht4naj ht11 ht81 ht52 ts1bef ht8
source: IKN calcs

18,315mt.
Our tracking chart of the key Shanghai warehouse shows three weeks at our new level. We’re
roughly two working weeks from the Chinese New Year period, this is starting to look like a new
consolidation level and may be around until March, when that country gets back to real work.
Shanghai Futures Exchange Warehouse Stocks, 2014/2015
220000
200000
180000
160000
140000
120000
100000
80000
60000
11
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 ts1bef ht8
Mt Cu
source: Cochilco
Now for notes on a couple of basket stocks:
Capstone Mining (CS.to): Of our group, CS was the only one that managed to capitalize fully
on the ~3.5% bounce in the copper price, probably because it had been sold down very hard
during January, that it’s a producer (note our other producer, ARG.to, also gained) and that any
financial immediate financial relief such as last week takes tangible pressure off a weak looking
balance sheet. But be clear, at $2.60/lb copper it’s a long way from being in a healthy position
as yet. This is a relief rally and should be cheered by its supporters, but that’s all.
Amerigo Resources (ARG.to): On Thursday ARG announced its Q4 and year-end production
and sale numbers (11) and here are our charts to show the quarterly comparatives.
These first two show copper and moly sales. Q4 copper sales of 11.216m lbs was the best of
2014, though about 0.5m lbs lower than my own forecast for the quarter (made when I bought
and held the stock in the analyses at the time), mostly due to lower than expected recoveries.
It seems ARG still hasn’t managed to work through all the lower grading material, even though
it said that by 4q14 it would have seen the back of it.
ARG.to: Copper sales
16
14
12
10
8
6
4
2
0
Moly sales at 159k lbs were 40k higher than my forecast, but the average selling price of
$9.21/lb was a slump. However, as copper supplies around 95% of total company revenues, it’s
a minor thing.
Therefore the calculated gross revenue for 4q14 comes to $35.22m. As true reported revenues
is always 11% or 12% lower than the calc (gotta pay the middlemen) here’s how our revenues
tracking chart looks
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4
source: company filings
htnom/uC
sblM
ARG.to: Molybdenum (Mo) sales, per qtr
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4
source: company filings
htnom/oM
sbl
M

ARG.to: Gross revs calc versus filed revenues, per qtr
60
55
50
45
40
35
30
25
20
15
10
5
0
12
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
$m
Total gross Cu/Mo rev $m
Real revenues filed
source: company filings, IKN calcs, IKN ests for 2q14
And from that, we can take into account the slightly higher than expected price paid for power
(U$0.098/KWh) in the period and move to a refined estimate of gross profits
ARG.to: Quarterly Earnings overview
60
50
40
30
20
10
0
-10
31q1 31q2 31q3 31q4 41q1 41q2 41q3 tse41q4
source: company filings, IKN ests
srallod
fo
snoillim
revenues
COGS
Gross profit
That blue bar for 4q14 is at $3m. After that comes G&A “other” (which can see financial
charges) and tax, so even though my best guess for the quarter is a one million dollar net
profit, we’re looking at a period that’s basically breakeven give or take around the zero number
and depending on those “other”.
That’s not so bad, but we need to
consider that the quarter just gone saw
ARG selling its copper at an average of
U$3.01/lb. That’s going down sharply in
2015.
Bottom line: We saw an in-line quarter
from ARG.to, and even though its NR tried
to put its best foot forward by noting the
partial development of its growth project,
until copper’s back above $3/lb it will
tread water at very best. To the downside,
with an IKN estimated current working
cap of $7m, a full year of copper under $2.70/lb would put the company’s treasury under
significant pressure.
The Low Cost Producer Basket
After 6 weeks, the new Low Cost Producer Basket is showing a 17.21% gain to level stakes

company ticker price 1/1/15 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Goldcorp GG 18.52 812 18.59 22.89 23.6%
2 Barrick ABX 10.75 1164.67 14.35 12.32 14.6%
3 Newmont NEM 18.90 499 12.00 24.05 27.2%
4 Franco Nevada FNV 49.19 156.08 8.44 54.09 10.0%
5 Silver Wheaton SLW 20.33 357.39 7.98 22.33 9.8%
6 Agnico Eagle AEM 24.89 173.43 5.48 31.58 26.9%
7 Kinross KGC 2.82 1114.5 3.61 3.24 14.9%
8 Buenaventura BVN 9.56 254.19 2.66 10.46 9.4%
9 Pan American PAAS 9.20 151.41 1.74 11.46 24.6%
10 B2Gold BTG 1.62 948.9 1.71 1.80 11.1%
all prices in U$, using NYSE ticker prices Portfolio avg 17.21%
The basket average dropped a hefty 6.25% as all ten of the component stocks put in a losing
week. The biggest percentage drops were registered by Buenaventura (BVN down 8.4%),
B2Gold (BTG down 8.2%), Agnico
Eagle (AEM down 6.4%) and Franco The Low Cost Producer Basket: Weekly performance
Nevada (FNV down 6.1%), while and comparative to GDX control
25%
least-worst (as it were) was Pan
American Silver (PAAS down 1.7%) 20%
and the difference between it and
15%
BTG means that PAAS is now a larger
basket
market cap company than BTG for the 10% gdx control
first time in a long time.
5%
The gap closed between our low cost 0%
producers and the GDX control, with Dec31st jan4th 11th 18th 25th feb1st 8th
1.16% between the two lines now. source: Google Finance, IKN calcs
Probably because we give equal
weighting to the smaller sized names such as AEM, BTG, BVN etc.
Pan American Silver (PAAS) (PAA.to): The relative strength in PAAS these last few weeks
is interesting. It may be due in part to the share buyback plan announced in December (12)
that’s for a maximum of 7.5m shares over the next 12 months, but for my money it’s more
about the guidance for lower costs in the year ahead (13) with All In Costs per silver ounce
scheduled for between U$15.50 and U$16.50 in 2015. That puts PAAS modestly profitable when
most silver players around it will struggle to break even (at very best, more likely loss makers).
I haven’t paid much heed to PAAS for quite a while, but that might be a mistake this year so
I’m going to pay close attention to its YE and Q4 numbers, due out on February 18th, a mere
week and a half from now.
Regional Politics and Market Watching
Aberdeen (AAB.to): No deal for us
As last week unfolded, the prospect as discussed in last week’s edition of a near-term fliptrade
in Aberdeen International (AAB.to) faded quickly. It was always a conditional trade and needed
the pieces to slot together, but the writing was on the wall as early as Monday in a joint NR
with AAB (14), Meson and Nightscape said they were withdrawing from the proxy set for the
next day. It did of course mean that our scenario of Meson et al losing was correct but the
manner in which it happened, prior agreement instead of meeting fight, meant that chances
were the two sides had come to a deal. That was also signalled by Meson’s Ryan Morris stating
13

in the NR that, “...the interests of Aberdeen's shareholders are best served if Meson Capital and
Nightscape Capital disengage from Aberdeen, and the board is free to execute on its plan”.
That’s because “disengage” means “sell
up and run away” and deals being
deals, that would also include an
elegant exit for the Meson shares
instead of a messy one that dumped
the stock price. Sure enough, that’s
how it turned out:
The block trade went through on Friday
at an (obviously mutually agreed) 16c,
with the buyers almost certainly being
directly or indirectly controlled by Bharti
& Co. On that we may or may not find
out in the future, but it’s not that big an
issue either.
AAB holds no further interest to your author or these pages and reverts to a very easy and clear
“avoid” call. There’s no reason at all to buy, hold or follow the progress of a company
specifically set up to benefit those inside and screw over third party holders.
Peru: Las Bambas sees community unrest
Trouble last week at Las Bambas (15), the mega-copper project now owned and being built by
China’s MMG in the Apurimac region of upland South Peru. The problems stem from a town
called Challhuahuacho near the mine, which has a history of rumbling discontent with the
project and on Friday a faction of its population took around 100 (or up to 200, depending on
which report you read) workers from Las Bambas hostage by raiding one of their 800 person
main camps and held them overnight and for half the next day as a measure of protest. They
say that previous agreements with the mine have not been honoured and now have a list of 30
demands which include more direct jobs for locals (possible) 10% of profits from the mine for
their town (not going to happen in a million years) and other items that range from the possible
to the silly in the same manner. The hostages were released on the morning of day two
(yesterday Saturday 7th) when a very large contingent of police showed up so no direct battle
happened, glad to say. All the people held said they’d been treated well by the protesting
locals. MMG says that the demands were not under their jurisdiction, that they’d come to
agreement with the town of Challhuahuacho and other population centres already, that they’d
honoured all agreements and the protest demands are for the government to rule upon, not the
company.
This isn’t the first time there have been problems at Las Bambas with locals, it’s unlikely to be
the last. This was a headline-grabbing event and potentially more serious than ones that have
come before, so I’m a little more leery about how it might pan out and a lot in the immediate
future will depend on whether the national government decides on dialogue or more strong-arm
tactics, with the company standing back
Peru: Macro forecast updates
At the end of last year Peru’s Finance Ministry (MEF) had an official growth forecast for the
country in 2015 of 5.5%. That was quietly dropped in the first couple of weeks of this year to
5.0% and last week took another cut to 4.8%. Meanwhile, private sector banks and analysis
houses are already downgrading their own forecasts to a consensus average of 4.0% (16)
though there is better news on the inflation front, with the national forecast set at between
2.5% and 2.7% (and as MEF uses an inflation targetting macro policy, that’s usually not far
out).
Meanwhile the smarter end of Peruvian economic analysis now predicts (17) that the Nuevo Sol
currency, currently trading around 3.06 to the US Dollar, will close our 2015 at between 3.13
14

and 3.15 to the dollar. For what it’s worth that sounds like a reasonable forecast to me. If we
take the midpoint between those numbers, that represents a further 2.6% of currency
devaluation in the year ahead.
In our focus sector, that means further direct cost savings for any company working to a great
extent inside Peru and reporting in US Dollars, such as Southern Copper (SCCO), Buenaventura
(BVN), Rio Alto (RIO.to) (RIOM), Fortuna Silver (FSM) (FVI.to) and others.
Mexico: Santacruz Silver (SCZ.v) under risk of closure for poor safety record
Here’s a little list
• May 2013: Accident and one worker dead (another seriously injured
• February 2014: Accident and five workers dead
• December 2014: Accident and one worker dead
• January 2015: Accident and one worker dead.
Add to that the recent tailings pipe breach that’s behind the current mine closure and that’s the
running score at the Rosario mine in San Luis Potosí, normally known in Mexico as the
“Charcas” mine that’s owned and operated by Santacruz Silver (SCZ.v) via its wholly owned
subsidiary "Impulsora Minera Santa Cruz". That’s a pretty impressive record ofr a single small
mine, but not impressive in a good way of course. And it would seem that even the authorities
Mexico have noticed the series of events there. Here are the main excerpts (translated) of this
report (18) in the San Luis Potsosí region (a news report which failed to catch all the deaths at
the mine):
Closure of unsafe mines suggested
Juan José Jover Navarro, vice president of the Work and Social Prevention
Commission, has demanded that the State Secretary of his department
verifies working conditions of mining companies in the state (San Luis Potosí)
and has also asked for more severe penalties for companies in the society
that register frequent accident and put the lives of its workers at risk.
On February 13th 2014 five workers died at the Minera Santa Cruz in Charcas,
this despite authorities reporting that in 2013 four inspections were made at
the mine. The events were repeated exactly ten months later, when a young
worker was killed by a rock crushing machine.
“We have to set exemplary punishments, the first time an accident is
understandable but we we have to measure work risks....when companies are
repeat offenders we should move to close the mine or cancel the concession
so that it doesn’t keep happening.”
Argentina: CFK in China
Argentine President Cristina Fernández de Kirchner’s State visit to China came and went last
week, all happening with a backdrop of the ongoing Alberto Nisman death scandal in her
country (suicide or not suicide is just one angle of a multi-faceted story). Along the way she
was also clumsy enough to make a “joke” on Twitter (she’s a heavy user) about the way
Chinese people make an L sound when it’s an R sound (rice in Spanish is “arroz”, so part of her
clumsy joke was to spell it “alloz”), which backfired enough to make it to the pages of the New
York Times. But China didn’t react as much as the Cristina-haters in The Americas (North and
South, there are plenty) and overall her visit was a successful one that managed to close
several deals between the two countries.
From that very general overview paragraph we now shift gears and focus specifically on the
results of the trip for hard rock mining only (as it’s election year in Argentina, I’m sure to bore
you about the bigger macro themes as we approach the October date in future editions) and in
fact there really weren’t many solid deals done in our area between China and Argentina last
week. There were five signed deals in total, but they were mostly of the “...continuing and
15

deepening co-operation between...” type that are more diplomatically significant than real world
progress. One worth mentioning (19) was an accord with the China Gold Association (which
groups together 85% of China’s gold sellers, according to the Argentina spiel) that’s about
better bilateral communication on gold projects, another (20) was a deal between the State-run
Argentina Geological Mining Service (Servicio Geológico Minero de Argentina) and its Chinese
State counterpart that will bring Chinese geologists to Argentina to do boots-on-ground
mapping programs in the country and improve geological knowledge (the type of thing that
may allow China to cherry-pick and stake new places of interest before others get wind). When
it was Mining Minister Jorge Mayoral’s turn to talk about the trip he played it up as much as
possible, but style beat out substance in his talks. However during one radio interview he said
that “There is [Chinese] interest for the Pascua Lama project”, which isn’t new news to anyone
paying attention but was interesting to hear from the mouth of Argentina’s Minister of Mining.
True Gold (TGM.v): O’Dea keeps buying and comparative to Teranga
Further to the small note of last week, a small note this week. Company chair/founder/big
cheese and current interim CEO Mark O’Dea continued his buying of TGM.v stock last week,
going to market every day to buy a 30k or 60k chunk:
This is a clear statement of intent. Again, we note that as O’Dea owned 9.638m shares at the
beginning of the year and now owns 9.998m, as well as the detail that O’Dea has become very
rich from previous deals (good for him) and can easily afford this type of statement buying,
mean that the symbolism is more important than the size of the purchases.
These O’Dea purchases again got me thinking about my personal issues with Africa political and
community risk, what with TGZ weighing on my mind. The contrast between TGM and TGZ is
apparent if we consider:
• True Gold (TGM.v): Exploration stage, talks the community talk but has obviously
dropped the ball on a corporate level, now needs to repair damage, locals angry. In
other words, has a long way to go before it sees light at the end of this tunnel and its
track record to date has not been good.
• Teranga Gold (TGZ.to): Production stage, talks the community talk but has obviously
been through the process and got/kept locals onside. There were clearly doubts among
locals about the project pre-production, but now it’s in production things are in good
shape and the communities around have benefitted. In other words, it’s been through
the tunnel and is now enjoying the benefits of a well-organized community relations
program.
That aside from one being in a country that recently deposed its President and the other being
in a country that saw a free and fair election two years ago, in which the loser admitted defeat,
stepped aside and ensured a smooth transition of power. There are differences.
The Torex Gold (TXG.to) kidnapping news
Further to the news put up on the blog yesterday Saturday (21) (which if wasn’t an English
language scoop must have been close, because even AP were behind the story...just sayin’),
16

even while we take into account the partially positive news from this afternoon (22) that 10 of
the 18 hostages have been freed or have escaped the clutches of the kidnappers, please take a
look at the four snippets from previous editions on the second post yesterday afternoon (23)
because they’re all from previous editions of The IKN Weekly. They don’t even include the script
from IKN287 dated November 9th 2014, which came on the news of the 43 disappeared
students in Guerrero State and finished like this:
“Another aspect to this is how the notoriously violent region has to this point
been able to keep its troubles away from the Mexican national and eventual
world spotlight, but that’s now almost certainly a thing of the past and people
are now looking and seeing things for the way they are. It’s unlikely that
mining companies working the region will be able to enjoy the free pass
they’ve been able to get up to now. The place has always been trouble with a
capital T, in the future it will be newsworthy trouble. Avoid any mining
company exposure to Guerrero like the veritable plague.”
I think our credentials are clear enough. As noted on the blog this morning (24) TXG’s
corporate problem is the higher scrutiny being given to all things Guerrero after the 43 students
episode. The whole subject of paying protection money to narco gangs in Mexico is something
that many mining companies, not just Torex and not just in Guerrero, would very much prefer
remained out of the limelight. It’s one of the reasons (not the reason, just one of them) I’ve
been vehement with my “avoid” call on juniors in this particular neck of the woods over the
years and now the world cares a little more about Guerrero’s deeply tangled problems it’ll only
take one decent reporter or team to cause problems to a whole lot of publicly traded capital.
But to finish I’d like to pick up on just one of the lines in the Saturday wire reports and re-print
it here, because as he explained that there was just one mine worker kidnapped in the incident
rather than the dozen or so of first reports, AP got TXG CEO Fred Stanford on record as saying,
“It has nothing to do with the mine". Personally, I think we’re going to see whether that’s true
or whether this incident has any effect on the mine and its parent company tomorrow Monday
morning, when the markets open for business.
Conclusion
IKN300 is done, we end with bullet points:
• Edition three hundred, a round numbers thing. Thanks for reading up to today, people.
• I added some McEwen Mining (MUX) on Friday, but still have cash to deploy on new
trades if the will takes me. Top of the potentials list today is Teranga and we’ll go
deeply into that one next week, but I haven’t forgotten about Lake Shore Gold (LSG.to)
17

and if that shows an attractive entry point, I’m still good about taking a piece. The
bottom line, as noted in today’s intro, is to build size in profitable precious metals
producers, preferably goldies. MUX, LSG, TXG, RIO, BTO all fit the bill.
• As for Black Swan potentials, from here it looks as though Greece holds more chances
of upsetting the financial world than the somewhat fakey looking Ukraine flare-up.
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.nakedcapitalism.com/2015/02/greece-still-defiant-ecb-mugging.html
(2) http://gestion.pe/economia/grecia-dice-que-no-tiene-problemas-liquidez-prepara-plan-sobre-deuda-proxima-semana-
2122808
(2a) http://www.reuters.com/article/2015/02/08/us-eurozone-greece-idUSKBN0LC0E920150208
(3) http://www.terangagold.com/files/doc_presentations/2015/02-03-15-Teranga-Gold-Q1-Investor-Deck-
Final_v001_j68s68.pdf
(4) http://www.itsafricastime.org/stories/season-2/teranga-gold
(5) http://finance.yahoo.com/news/fourth-quarter-end-financial-results-170000274.html
(6) http://finance.yahoo.com/news/rio-alto-mining-limited-la-172217080.html
(7) http://finance.yahoo.com/news/rio-alto-mining-limited-la-172217080.html
(8) http://www.rioaltomining.com/_resources/news/nr_2014_02_24.pdf
(9) http://www.newswire.ca/en/story/1483163/novacopper-provides-project-update-and-year-end-financial-results
(10) http://bd-elec.cochilco.cl:8080/boletin-web/pages/tabla4/buscar.jsf
(11) http://finance.yahoo.com/news/amerigo-announces-q4-2014-full-123000295.html
(12) http://finance.yahoo.com/news/pan-american-silver-announces-normal-010000650.html
18

(13) http://finance.yahoo.com/news/pan-american-silver-produced-record-033000599.html
(14) http://finance.yahoo.com/news/dissident-shareholders-agree-withdraw-request-234207070.html
(15) http://www.larepublica.pe/07-02-2015/proyecto-las-bambas-comuneros-tomaron-el-campamento-minero
(16) http://gestion.pe/economia/bcr-analistas-reducen-expectativas-crecimiento-economico-peru-45-4-
2122801?href=nota_rel
(17) http://gestion.pe/economia/entidades-financieras-proyectan-que-dolar-cerrara-2015-s-313-2122802
(18) http://pulsoslp.com.mx/2015/02/07/sugieren-clausura-a-minas-inseguras/
(19) http://www.elpatagonico.net/nota/270137-cristina-firmo-en-china-proyectos-para-chubut/
(20) http://www.elancasti.com.ar/politica-economia/2015/2/7/mayoral-anuncio-inversiones-mineria-249861.html
(21) http://incakolanews.blogspot.com/2015/02/breaking-mine-workers-kidnapped-from.html
(22) http://incakolanews.blogspot.com/2015/02/torex-gold-txgto-police-rescue-some-of.html
(23) http://incakolanews.blogspot.com/2015/02/torex-gold-txgto-in-guerrero-state-dont.html
(24) http://incakolanews.blogspot.com/2015/02/the-torex-txgto-can-of-worms.html
Appendix 1: Flash update dated Friday February 6th
Good Friday morning, just before the open.
This one is short and gets straight to the point. The BLS report has seen gold sell off sharply this morning, a move which
has looked in the cards for the last couple of days, i.e. a set-up. I don't think it's going to last.
I consider this a good buying opportunity for gold stocks. As the most likely place to see short-term weakness is
something along the lines of...
gold producer
US listed
good volumes
companies that DO NOT need gold at higher prices to make a profit
...i'm going to pay close attention to my recently bought McEwen Mining (MUX) (MUX.to) with a view to adding more
today. But that's just my main target, I encourage you to zero in on your own preferred favourites. I'm not 100% sure I'll
add, that will be as a function of the price action today. But it's likely.
Best, O
19

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
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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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