IKN #306Premium

The IKN Weekly
Week 306, March 23rd 2015
Contents
This Week: Today we pretend it's Sunday.
Fundamental Analysis: Focus Ventures (FCV.v) site visit.
Stocks to Follow: Overview, First Majestic (AG) (FR.to), Fortuna Silver (FVI.to) (FSM), B2Gold
(BTG) (BTO.to), Rio Alto Mining (RIOM) (RIO.to), Dalradian Resources (DNA.to), McEwen
Mining (MUX) (MUX.to), Teranga Gold (TGZ.to) (TGZ.ax), Starcore Intl (SAM.to).
Copper Basket: Overview, Amerigo Resources (ARG.to), Copper Fox (CUU.v).
Low Cost Producer Basket: Overview.
Regional Politics: Next week regional risk
Market Watching: A word on Red Eagle Mining (RD.v Argonaut Gold (AR.to): No trade for
me, Starcore Intl (SAM.to) reports its 2q15, Lake Shore Gold (LSG.to) runs away from me
again
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
Today we pretend it's Sunday
As things turned out travel conditions in Peru over the weekend were bad, plenty of flights got
delayed and your author didn't make it back home until very late (yesterday) Sunday evening.
Therefore this delayed edition is also a short one, covering the bare bones plus running a photo
review of last week's site visit. It's gone 11pm and I need to get a decent night's sleep at some
point; that point is tonight, my bones are demanding it.
We're also going to pretend it's Sunday today (I'm writing these words Monday evening)
because it makes more sense to run the weekly stocks tables as at their regular weekend dates
and prices rather than skew them for a week by taking the Monday close figures. This means of
course that the good gains we saw in many of our stocks today (e.g. the 8.9% upmove in First
Majestic (AG), or the 5.5% added in B2Gold (BTO.to) today are ignored and will form part of
next weekend's calculations.
Fundamental Analysis of Mining Stocks
Focus Ventures (FCV.v) site visit
From Thursday to yesterday Sunday, your author's life was all about a site visit to the Focus
Ventures (FCV.v) Bayovar12 phosphate project in the North of Peru. This was my second visit
to the project, the first one happening in March 2014 and reported at the time in IKN253 (if
you'd like a copy of that edition, you know my mail address).
At that time the drills were turning on site and FCV was in resource definition mode. This time
around we already know more about Bayovar12 but the corporate focus (no pun intended) is
1

the technical angles that are leading up to the publication of the PEA later this year, scheduled
for 3q15. To that end, this trip for me at least was less about grades and widths, more about
the plans for a real mine. That's about things such as metallurgy (although non-metallic, the
word still gets used) and plant design so along with company President and tour leader David
Cass; it was good to spend time and the trip with Tim Oliver, who's at FCV for the engineering
side and is hard at work pulling together the plan for the
operation. We three also allowed a young, up and coming
whippersnapper newsletter writer called Brent Cook to come along
with us. He seems fairly smart and enthusiastic about things,
hopefully he'll make a name for himself at some time in the future.
Brent and I arrived in the city of Piura Friday on the very early
flight from Lima. Our host, FCV president Cass, was waiting for us
with a smile and good coffee at FCV headquarters (the company
rents a house in the city as its base, a smart move that cuts costs
dramatically).
After breakfast it was time to hit the road for the approx 100km
drive down to the project site and as we left the city it was raining (which you can probably see
from that shot above), part of the very weird weather we're getting
in the country at the moment (some talk of the tail end of el Niño
combined with the fallout from Hurricane Pam). As we chatted, Tim
Oliver and I quickly agreed that engineers and financial guys are way
smarter than geologists, while Brent Cook preferred to add to the
conversation with actions rather than words.
Out of the city and the weather cleared up quickly on the long,
straight road to the project. The Sechura district where the project is
located is full-on desert and one of the driest spots in all Peru. Once
the sun comes out and clouds disperse it gets hot quickly.
We arrive on site.
2

This is the land of the big horizon and when it comes to community issues, there's no easier
project in the world as nobody in their right mind would live here.
It's also a shifting landscape. Here's a photo taken when we
turned into a side road and found that since David Cass's last
visit (which was pretty recently) a dune had covered the tarmac
completely, leaving the road sign sticking out in the middle of a
very, very large beach.
I was already fed up with how ugly my travelling companions
were, so this photo deliberately cuts off the gargoylesque heads
to concentrate on the drill pad location we'd come to check.
We then visited the small scale direct application phospate mine that's a next door neighbour of
FCV. It's a privately run mining company named Fosyeiki that lies
roughly between Bayovar 12 and the massive Miski Mayo
operation owned by Brazil's Vale (VALE). As this shot shows, we
timed our visit nicely because Fosyeiki was in the process of
finishing off a consignment order of bagged phosphate that was
due to be sent to the buyer in Colombia.
That white sea between the mahcinery and the 4x4 is a sea of
50kg white bags, all full.
Here below you have a close-up of one of the bags, plus what you find in it
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According to the bag the direct application project, which had been through a basic separation
and drying process in the plant you see in the photos, was 21.1% P2O5. Of that 6.1% was
phosphate that would be quickly absorbed once applied to your
field of crops, while 15% was slow assimilation and would make
provide nutrients two or three years down the line. The upshot is
a product that improves crops over several seasons and harvests.
This direct application is less concentrated than the full-
production treatment product than runs typically at 29% or 30%
P2O5, but still commands a good price. Its market tends to be
fractured and it's not really a fungible commodity, but the direct
application phosphates that come from the Sechura/Bayovar
region are known around the world for their high quality and
purity with very low levels of deleterious elements. I was
surprised to find out that New Zealand was a long-established
market for Sechura phosphates, for example. Plenty more goes
to Ecuador and in this case, the buyer was from Colombia.
We were told the product sells at maybe U$150/tonne wholesale (though the price will fluctuate
according to deal terms and several other factors, so don't start quoting that number) and that
the 50kg bags retail at U$10 each. After doing a quickcount I estimated I was looking at
U$100,000 worth of bagged-up product and that site production costs for that would not have
gone above U$45,000 for the whole consignment (staff salaries and fuel and everything). That's
not bad money for a really old and delapidated looking processing facility that uses basic things
such as a big coal fire for the drying process. If this sort of direct application processing were
formalized and scaled up (even on a module basis) there would be strong free cash flow thrown
off. FCV is considering it as a potential stage in the growth program and I think they're
absolutely right to do so after seeing what I saw last week.
Here right is the strapping figure of Tim Oliver standing in front
of the exposed phosphate beds at the small mine, for scale.
Below is a close-up shot of the rather rudimentary machinery and
equipment. Again and to underscore, if this small mine can
produce its direct application product at strong margins using this
type of machinery, there's obviously money to be made. One of
the ways forward for a company such as FCV could be to start
such an operation with just one machine of comparable size,
then scale up using free cash flow. Both the product and the
growth would be organic.
4

We then moved on, drove past the Vale Miski Mayo operation in the
far distance (no photo of that this time and they don't let anybody
visit, let alone potential competition) and to the port facility nearby
where both Vale and JDQ (vendors of Bayovar12 to FCV and
operators of the current gypsum mine there) have their seaports.
Here's the view from outside the bigger of the two, Vale's port facility
that equipped to load 60,000 tonnes of P2O5 in under a day.
While we were there the cargo ship at dock was already fully loaded
and ready to sail, so the next was being tugged in to take its place.
We had our tailgate sandwich lunch watching the slow-mo action.
Rather than a photo of the fishing harbour just across the other side
from the mineral ports, here below is a shot of one of the local
residents who follows those fishing boats around closely. Bobbing
around the harbour bay were plenty of large sea turtles, too.
As Tim Oliver and I had to suffer the company of geologists, it was then time to visit the core
shack. This was back in the city of Piura and four holes had been readied for inspection by the
FCV team. I spent my usual ten minutes or so looking at the core (we
went into more detail on rock content in the IKN253 piece, if you'd
care to check back) and then amused myself by taking too many
photos of other people staring at cases full of rocks.
A geologist such as David Cass impresses me; he's the one who
logged this core as QA/QC and must have studied it up close literally
thousands of times, but he was clearly still fascinated by the visuals
and opportunity to peer at the tiny grains though his geologists'
magnifying glass. So I watched as he skipped around picking up
pieces of core going "Wow, look at this one! And that one!". The
love-affair between geols and rocks is a neverending story. Here
below you see Brent Cook, David Cass and members of the FCV team staring hard while
5

engineer Tim Oliver (behind) and your author the financial
crunch-merchant (behind the camera), roll eyes and wonder
what all the fuss is about.
Here's an example of the answer to that; the rock may look dull
and boring without much contrast or apparent bits of interest,
but when the phosphate beds are intersected they grade well
for economic material.
Once the core shack visit was done, they kindly tapped me gently on the shoulder to wake me
up and we went back to FCV for food and a night's sleep. From the next day back to Lima and
from there the delayed return to the bosom of the family. The end.
Discussion of company as stands today
In broadstroke terms are two separate aspects to the FCV story at the moment:
• The resource and mine plan development
• The corporate financing development
Of those two, the first looks in fine shape and the second gives some concern at this point.
The resource development
This part is the strongest point at FCV today. Since September last year (1) we've had an initial
43-101 compliant resource on the property, with the basic table presented here by way of a
reminder:
This resource looks solid thanks to the very high level of predictability of the geology, any
simpler than these horizontal beds and consistent grades and thicknesses is virtually impossible
to imagine. It also looks wide open for resource expansion as the whole Sechura plain is
basically the same thing, and as Vale a few Km away is mining the same thing plus other
operations have found the same on their patches it's not difficult to imagine Bayovar12
extending its resource virtually every time it sticks a step-out drill hole into the ground. The
grade is good but (as was pointed out to me no end), the easy recovery and processing of this
rock means it's also easy and cheap to get the saleable product up to the right grade
concentration; As one example, FCV tests indicate that one of the beds grading around 8% will
be among the cheapest and most profitable to get to a 29% concentrate level, the typical world
standard for the fully processed end product.
As part of the process towards the upcoming PEA (aka scoping study), recently FCV has been
6

working on metallurgy for Bayovar12 and the company explained where they were in general
terms last week. Results have been very good so far and the company has advanced on
question such as recoveries and economics thereof by treating each of the 13 layers of
phosphate underground separately. They then work out a best way of mining and recovery for
each one. Aside from the possibility of setting up a small-scale direct application phosphate
production line similar to its small mining neighbour, the company has identified two main
techniques to get the rock to the necessary concentration as cheaply as possible, depending on
the bed in question. What they've also found is that there are ways of mining the resource that
are highly likely to be cheaper than even the big and profitable Vale mine next door use. And to
answer one specific query from subscriber M last week, yes the rock can be treated successfully
with seawater which means simple and cheap processing. Sometimes it performs better with an
extra stage of processing, sometimes it's not necessary, but overall what FCV is finding is that
the product should be relatively straightforward to produce, as well as cheap.
We're going to know a lot more about this in 3q15 when FCV announces its PEA and as they
still have work to do between now and PEA day, it's still too early to start pinning down exact
numbers. What they do have is a plan for different run rates that will require a lower or a
higher capex spend to build the eventual mine, with both using the infrastructure advantages
that both the region (roads, power, staff) and the selling company JDQ (not least of which their
own port already built and working) that will keep capex low. When building Miski Mayo, Vale
sank around U$600m into the project but initial ballpark numbers have the expensive, large
scale Bayovar12 mine not even approaching $200m, with the smaller scale project a fraction of
that. And then of course there's the modular direct application possibility (as seen in the photos
above for the 21% production) that could be set underway for South of $10m and then grow all
by itself. We're less likely to hear about that in the upcoming PEA, as the company still has its
sights set on a medium or large-scale facility that produces the industry standard 29% P2O5
product, but there are obviously options to explore that could unlock project value.
More thoughts on the financing deal
I made mention last week that the deal FCV has struck with Sprott to fund the purchase of JDQ
was a good one and that the share price hike enjoyed by FCV.v last week was fully deserved. I
still adhere to the thoughts and the way FCV.v has been rewarded by the higher share price
thanks to the deal and what it means, especially that FCV becomes the 70% owner of Bayovar
12 instead of the optioner making its stage. However and on further consideration of the deal I
want to voice my concerns about an aspect of the financing deal.
And really, there's only one. Others may have a complaint about the size of warrant kicker
demanded by Sprott Lending (I'm okay about that), others on the early repayment terms that
don't give much benefit to a pre-term payback. For me they are details because the main
concern is that FCV.v has signed onto a senior secured debt deal with just 18 months before
the deal matures.
That's a short period for any company, it's even shorter when you don't have any income as a
company and you have a capital repayment to make that's secured by the company's property.
On this deal the devil isn't in the details, he's found in the big top-line fact that FCV has a year
and a half to raise the money to pay off what's tantamount to a bridging loan, but unlike most
bridging loans puts its main asset on the table and at risk of foreclosure. Now the risk of that
may be small and I also heard from FCV last week on their confidence of being able to do a
more amenable debt deal further down the line which is fair enough, they have to show
confidence. But we're also in a market that could remain difficult for small capital raisings for
explorecos and if so, FCV's choices might become difficult in 2016.
What everything points to right now is the 3q15 PEA publication. If we assume that comes on
time in good fashion, FCV is going to have a powerful marketing weapon right around the Labor
Day "back to serious matters" period in the annual cycle, which means it has its window of
oportunity to find a better financing deal with which it can pay off the ticking clock of this short-
length secured debt with Sprott before the ticks become too loud for comfort and the date gets
7

too close. With a re-finance deal done with A.N. Other by the end of 2015 everybody gets
happy and FCV.v will be on firmer ground. At this point, I'm also strongly reminded of the
content in the recent FCV shareholder letter which noted how "Asian" companies didn't
understand the buy-in model that FCV and JDQ were using and didn't feel comfortable about
funding FCV while it was still in the optioning-in phase. They wanted FCV to fully own its piece
before considering a deal. Now with FCV true and real 70% owners and soon with an economic
study as well, the chances of getting a financial deal with some "Asian" is getting better.
With all that in place, this is where I am today regarding FCV.v:
1) I'm a relaxed holder of FCV today, because although the secured debt deal
isn't a long-term one, end 3q16 is still long enough in the distance not to
cause big sweating or worry.
2) FCV is aiming for its next big hurdle in 3q15, the PEA (scoping study). It's
now funded beyond that and it's now also the 70% owner of the gig, thanks
to the revised deal done.
3) At that point, I'd expect FCV to go out marketing and would like to see a
deal done.
4) However, I'm also clear that if the financing process drags on too long, at
some point it's going to look strategically weakened and this market won't
take prisoners on that score. If it starts to look as though FCV's choices will be
between 1) a straight equity financing and 2) lose the property, this share
price will suffer. And badly.
5) Therefore, if we get to the end of 2015 and there's no new debt deal done
that pays off this current Sprott bridge-type loan, I will sell and move on.
The more I see of Bayovar12 the more I like the project. If FCV can keep its corporate and
share structure healthy, it's going to greatly benefit from being the owners. But the latest deal
to raise cash does come with some risk of heavy penalty if things don't go the way of the
company in 2016. At some point in the future, which I currently gauge as the period after the
PEA publication and before Christmas 2015, the risk of holding FCV may begin to outweigh its
potential for reward. If that day comes I sell, simple as that.
Stocks to Follow
As noted in today's intro, today we're going to pretend that it's the weekend instead of after the
Monday session. Therefore the decent gains registered by many of our stocks on Monday March
23rd are ignored for the purposes of this week's edition and will be part of the count for
IKN307, next Sunday.
Gold popped and so did our portfolio. Of our 14 current open positions, five were losers last
week (RIO.to, FCV.v, NCQ.to, FSM; short, GQC.v) and one remained unchanged (LGN.v). That
leaves the other eight as winners (MUX, DNA.to, BTO.to, TGZ.to, SAM.to, AG, IRL.to, LRA.v)
with the best move put in by Teranga Gold (TGZ.to up 14.0%). It was a fairly classic looking
rebound week, with only RIO.to not making it back to zero (after going very low on ETF
readjustment sales) being a true downer. Percentage-wise, NovaCopper (NCQ.to down 11.1%)
was the biggest loser, but that hardly counts as it's been trading strangely on weak volumes
recently anyway.
We currently have 14 open positions in our Stocks to Follow list, one less than our self-imposed
maximum. Six are in the green, eight are in the red.
8

Current
company Ticker this week Avg Price Reco date PPS Gain/Loss% Notes
Top Picks
Rio Alto Mining RIO.to selling soon C$2.30 07-apr-11 C$3.34 45.3% Top Pick, Best PM Jr, M&A tgt
Recommended long positions (in current order of preference)
McEwen Mining MUX STR buy U$1.09 25-jan-15 U$1.06 -2.8% Added Mar'15, top value
Dalradian Res DNA.to buy C$0.64 27-oct-13 C$0.98 53.1% Nov'14 tgt $1.25, top Au expl
B2Gold BTO.to buy C$2.32 12-sep-14 C$2.02 -12.9% Dependent on Au price moves
Teranga Gold TGZ.to buy C$0.55 15-feb-15 C$0.65 18.2% New position, 83c tgt
Starcore Intl SAM.to buy C$0.12 10-jan-15 C$0.15 25.0% Small Pos., added, tgt 19c
Focus Ventures FCV.v hold C$0.23 01-jul-12 C$0.25 8.7% tgt 50c, good finance news
First Majestic AG hold U$10.51 10-aug-14 U$5.63 -46.4% Now in pair trade with FSM
Minera IRL IRL.to hold C$0.27 22-jul-12 C$0.07 -74.1% Waiting for financing news
NovaCopper NCQ.to hold C$1.05 09-apr-14 C$0.80 -23.8% small Cu play low vols, hold
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.445 -61.3% solid biz model, LT hold
Recommended short positions
Fortuna Silver FSM SHORT U$4.12 10-nov-14 U$3.76 8.7% In pair trade with AG
Smaller/Riskier
GoldQuest Min. GQC.v hold C$0.26 27-oct-13 C$0.095 -63.5% may sell soon
Legend Gold LGN.v spec buy C$0.085 01-mar-15 C$0.07 -17.6% new spec buy, v small trade
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.
Fortuna Silver (FSM) (FVI.to) and First Majestic (FR.to) (AG) Pair Trade: As usual, first
the tracker chart starting from the November 16th pair trade kick-off date:
Last week AG gained 8.1%% and FSM gained
1.3%, which was a clear positive period for
our pair trade. With AG +10% and FSM -18%
since it began, there's now a 28% gap that's
grown between the two, the biggest in our
favour since it began.
It may be time to cover the FVI (well, FSM
really) short and for two main reasons:
a) We've seen the FVI 4q14 financials come
and go, the company didn't take the type of
write down I expected and the stock, though
somewhat weaker than a few weeks ago,
looks as though it has decent larger scale (insto etc) support on a longer-term basis. I see no
reason to fight against that and at a price that shows all signs of being a strong floor level.
b) I've been considering new stocks on which I can go long, but covering a short does the same
job of extending the length of the overall portfolio.
9

As at this weekend I'm still undecided on what do with my badly bought and badly held First
Majestic (AG) long. However, while still not totally decided, it looks as though my FVI short is
coming to an end. It didn't start well and I lost financial ground at the beginning of the trade by
shorting it from a low start point, but since the pair trade decision and set-up was made it's
served its purpose well and allowed me to forget about the stress of holding silver positions.
Even if it ends up as an overall UNCH, I've had value from this one.
Expect a final decision next week or if earlier, in a Flash update.
B2Gold (BTO.to) BTG): Suddenly B2Gold is looking a whole lot healthier in the market and
the way it traded (which I kept an eye in even while travelling last week). I'm going to bore you
by repeating the final paragraph of last week's piece on B2 here...
This company is a solid part of the portfolio and deserves its place. We've
wound down the to-da-moon target assumptions form a couple of years ago
by necessity but we need to keep the eyes on the real prize here. Yes that's a
12 month target of CAD$2.23, but the reason to own BTO is more about what
this company will be and how much it will be worth three or five years down
the line. A very easy company to hold, with a decent entry point available for
sector bargain hunters who take the longview.
...because what we saw in the
marketplace last week fits that sentiment
nicely (which means that yeah, unlike
others I do think I've called this one well
so far this year).
One more thing: While hanging around a
whole cross-section of mining people and
market pros last week, the one name that
came up in either fromal or more chatty
conversation more than any other as
"cheap" and "buy and hold for the long
term" was this one, B2Gold. Which is
good, because I'm long.
Rio Alto Mining (RIOM) (RIO.to): Here's the one month chart of RIOM versus TAHO (both
the US tickers) and the relationship need no
big explanantion at this point. The lockstep
still signals that the merger is going to happen
smoothly and without third party interloper.
Monday saw "RioTahoe" take a sizeable dump
due to the news it was being pre-emptively
dropped from the GDX index. I was tempted
to send out a Flash update to state that it
looked a great buy price on the day but in the
end didn't do so, because for one I wouldn't
have bought myself and for another I would
have felt somewhat hypocritical about pointing
at a stock for a potential near-term purchase just around the time I'm about to sell my own
position. Under normal circumstances, the IKN Weekly strategy of "tell you what I'm doing with
my money" is about the best way there is of going about the crazy newsletter game, but there
are occasions when its weaknesses show through. This was one of them.
Dalradian Resources (DNA.to): DNA rebounded the way it should, which is good. There's
real resilience in this one at the 90c Ross Beaty buy price
10

McEwen Mining (MUX) (MUX.to): Also rebounding nicely. This and B2Gold are the ones
that look cheap compared to peers, I won (my idea of) enough of both of them at this point,
though.
Teranga Gold (TGZ.to) (TGZ.ax): A nice rebound in this, TGZ winning back its heavy loss
form the previous week quickly. I'm also seeing its name getting more meniton in the mining
chatterpress from the commentary crew (up to and including no less a figure than Pierre
Lassonde today Monday (2), but then again Franco Nevada does have that big stream). It's
pleasant to be in early on a growing fashion.
Starcore International (SAM.to): Volume was poor, a concern for a stock like this which
needs as much market interest as it can muster else face the slow drift down again. We have a
look at its quarterly financials that were filed last week below, in Market Watching.
The Copper Basket
After twelve weeks of 2015 The Copper Basket is showing a 1.24% loss to level stakes.
11

company ticker price 1/1/15 Shares out Market Cap current pps gain/loss%
1 Capstone Min. CS.to 2.03 381.95 504.17 1.32 -35.0%
2 Reservoir Min. RMC.v 3.96 47.55 210.17 4.42 11.6%
3 NGEx Resources NGQ.to 1.17 187.71 187.71 1.00 -14.5%
4 Nevada Copper NCU.to 1.65 80.5 139.27 1.73 4.8%
5 Copper Fox CUU.v 0.135 402.96 112.83 0.280 107.4%
6 Western Copper WRN.to 0.68 93.68 62.77 0.67 -1.5%
7 Amerigo Res ARG.to 0.27 173.65 61.65 0.355 31.5%
8 NovaCopper NCQ.to 0.58 60.15 48.12 0.80 37.9%
9 Hot Chili Ltd HCH.ax 0.16 333.11 39.97 0.12 -21.9%
10 Panoro Minerals PML.v 0.295 220.25 39.65 0.18 -39.0%
11 Regulus Res REG.v 0.35 56.39 16.92 0.30 -14.3%
12 Metminco MNC.ax 0.008 1822.6 9.11 0.005 -37.5%
13 AQM Copper AQM.v 0.06 139.24 8.35 0.06 0.0%
14 Catalyst Copper CCY.v 0.305 31.39 7.38 0.235 -23.0%
15 Coro Mining COP.to 0.045 159.37 5.58 0.035 -22.2%
NB: HCH.ax & MNC.ax priced in AUD$, rest CAD$ Portfolio avg -1.24%
The overall basket average improved again thanks to the pop in copper the metal, with nearly
4% shaved from the overall loss during the
week. It wasn't all partyparty and there 4% The Copper Basket 2015, weekly evolution
were three weekly losers (NGQ.to, NCQ.to, 2%
CCY.v) as well as four unchanged stocks
0%
(WRN.to, HCH.ax, REG.v, MNC.ax), but the
-2%
other eight all made gains and with
-4%
particularly big wins from Copper Fox
-6%
(CUU.v up 43.6%), Coro Mining (CIOP.ro
-8%
up 40.0%) and Capstone (CS.to up 15.8%)
-10%
too. Biggest downer was Catalyst Copper
(CCY.v down 17.5%).
This daily chart shows the surge in the copper price
well, with $2.80/lb now dinged and we're nearly
(not quite, but nearly) back to unchanged on the
year, which also means the whole of that waterfall
drop from the China short attack in early January
has now been neutralized.
Inventories time, here are the regular bullet points:
• The rise in total world copper stocks broke
another barrier last week and finished
Friday at 603,950 metric tonnes (mt),
busting through the 600k level.
• Though for bulls the good news is that the
Shanghai Futures Exchange may have
topped out. After breaking the 240k line the
previous week, by the end of lst week
stocks had dropped by 2,267mt (-0.9%) to
239,349mt. It's a small drop but it's also a change in direction right at the time you'd
want to see one. Couple this with the big move made by copper, things look brighter.
• LME warehouses stocks moved up again, adding 8,175mt (+2.5%) to finish the week at
341,750mt.
• Comex warehouses were also up, adding 881mt (+4.0%) finish the week at 22,851mt.
12
ht4naj ht11 ht81 ht52 ts1bef ht8 ht51 dn22 ts1ram ht8 ht51 dr32
source: IKN calcs

Here's the regular Shanghai warehouse tracker chart, showing that potential topping out move.
Shanghai Futures Exchange Warehouse Stocks, 2014/2015
260000
240000
220000
200000
180000
160000
140000
120000
100000
80000
60000
13
31'13ceD ht21 ht62 ht9 dr32 ht9 dr32 ht6rpa ht02 ht4yam ht81 ts1enuj ht51 ht92 ht31 ht72 ht01 ht42 ht7 ts12 ht5tco ht91 dn2von ht61 ht03 ht41 ht82 ht11 ht52 ht8 dn22 ht8 dn22
Mt Cu
source: Cochilco
Now for some notes on two of our basket components.
Amerigo Resources (ARG.to): One of the main reasons that I bought my position in ARG.to
in July 2014 was the promise it showed from its proposed expansion plans, which were set to
virtually double the production at its
It's one of those 'better late than never' situations because on Thursday March 19th ARG.to
announced (3) that it had done its deal on the financing for the expansion projhect at last. With
a loan package from banks that comes to nearly $75m, in the words of company chair and cEO
Klaus Zeitler... "...[t]he Company anticipates formal closing of the Bank Facility and initial
drawdown of funds will take place before the end of March, 2015. Phase 1 is projected to
require $71 million in capital expenditures, $20 million of which has been incurred to date, and
is expected to result in an increase in MVC's copper production to an average annual rate of 70
million pounds starting in Q4 this year." By way of comparison, in 2014 ARG.to produced 41m
lbs Cu (plus its minor moly kicker) at an operating cash cost of $2.15/lb. With the upgrade in
place, ARG.to expects that to move to an annual run rate of 70m lbs Cu at a cash cost of
between $1.60/lb and $1.75/lb. Even is we assume the higher number, on a free cash flow
basis that's a pro-rata $28m saving, the type of number that really moves the dial in this type
of small company.
ARG.to has recently rallied back from the 20s to the mid-30s share prices, which has the look of
the market buying the rumour on this now done deal for the financing. I'm going to need to
take a closer look at the terms of the deal (which I haven't got round to yet, a combo of travel
and laziness) but in principle this announcement put ARG.to back on the list of possibles.
Copper Fox (CUU.v): Though without owning or enjoying the ride, I'm glad I made mention
of the nascent pump in CUU.v in last week's
edition, ending as I did with, "I don't think
it's worth anywhere near its current market
cap, but my opinion wouldn't stop it from
going higher if traction and paid pumpers
get on the scene", because the pump went
through the gears last week and did exactly
what its sponsors wanted it to do. Here's
the chart:
And that's a serious move, your actual two
week double and very well managed by
somebody or other on the way up. CUU has
a previous history of being a pump vehicle

and because of that alone I'm not surprised to see it do what it's done. If you enjoy the coinflip
end of the junior market or playing psycholoigical chicken with a manipulating market maker
then be my guest, I'm not going to stop you, but to repeat and be crystal clear this one's not
for me. Far too sketchy, untrustworthy management, a core of "True Believer" shareholder fans
and a situation where only a very few people in the centre of it all know when the P of Pump is
swapped for a D. The assets are either poor or overpriced and fundamentally I wouldn't give
you 10c for your shares, let alone 30c (or even the prices it may go to if the market artists can
attract in a second wave of suckers).
The Low Cost Producer Basket
After 12 weeks, the 2015 Low Cost Producer Basket is showing a 5.48% 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 15.57 19.17 3.5%
2 Barrick ABX 10.75 1164.67 12.93 11.10 3.3%
3 Newmont NEM 18.90 499 11.45 22.95 21.4%
4 Franco Nevada FNV 49.19 156.08 8.00 51.27 4.2%
5 Silver Wheaton SLW 20.33 357.39 7.22 20.19 -0.7%
6 Agnico Eagle AEM 24.89 173.43 5.15 29.72 19.4%
7 Buenaventura BVN 9.56 254.19 2.77 10.90 14.0%
8 Kinross KGC 2.82 1114.5 2.70 2.42 -14.2%
9 B2Gold BTG 1.62 948.9 1.55 1.63 0.6%
10 Pan American PAAS 9.20 151.41 1.44 9.50 3.3%
all prices in U$, using NYSE ticker prices Portfolio avg 5.48%
A rebound, with all ten of our basket stocks putting in gains last week. The best by quite some
way was the 11.6% gain seen in B2Gold (BTG did better than its Canadian ticker by quite a
distance; that's true for a few other dual listed shares such as FVI.to/FSM, FR.to/AG, I wasn't
watching the Friday close and don't know why). I don't think it's going to matter much in the
long-term. The other thing that happened was that all but two of those nasty red blobs got
erased from the chart last week, with just Silver Wheaton and Kinross shwoing negative for the
year. My pick as the comeback kid, Goldcorp, remains lethargic.
The Low Cost Producer Basket: Weekly performance
and comparative to GDX control
25%
20%
15%
10%
5%
0%
-5%
14
ts13ceD ht4naj ht11 ht81 ht52 ts1bef ht8 ht51 dr42 ts1ram ht8 ht51 dr32
basket
gdx control
source: Google Finance, IKN calcs

Low Cost Basket: Percentage difference between
basket and GDX control, 2014
1.00%
0.50%
0.00%
-0.50%
-1.00%
-1.50%
-2.00%
-2.50%
-3.00%
15
ts13ceD ht4naj ht11 ht81 ht52 ts1bef ht8 ht51 dr42 ts1ram ht8 ht51 dr32
source: ikn calcs, NYSE/Nasdaq data
Regional Politics
Next week regional risk
The end of another financial quarter is upon us, which means that next week's edition comes
with the Regional Risk update. As this is a shortened edition, I'm going to save myself for next
weekend on the risk stories.
Market Watching
A word on Red Eagle Mining (RD.v)
I've been asked for a comment by several of you on Red Eagle Mining (RD.v), so here goes:
1) I've learned from experience that when I suddenly get a flurry of mails about a single stock
that's rarely been mentioned to me before, it means there's a promo pump job going on. It's
safe to say that somebody somewhere who doesn't work in RD.v has a sudden, pressing and
vested interest in making us aware of this company. And you already know what I think about
organized promo pumping of juniors to the retail sector.
2) Yes I've watched as its head guy Ian Slater has knocked down several barriers face by his
company over the last couple of years. The best two are the last two, with an economically
robust feasibility study delivered on RD.v San Ramon project in Colombia last year and the main
enivornmental and construction permits in place as of this month. The company has done very
well to get to where it is in a relatively short period of time and its executive should be
applauded.
3) It's in Colombia. Sorry people, even if it has permits in place (it has), even if its in one of the
safe regions (it is) and even if it's located at a past producing mine (it is), it's still a tough sell
because it's in Colombia, period. Maybe not Argentina tough, but it's still tough.
4) It's a small project. They can market it along the "when in operation it will be Colombia's
biggest gold mine" for all they want; it's a sub-50k per year mine with an eight year mine life
plan. It's small and when you have to raise cash in this market, small flies under too many
radars.
5) By my slide rule, RD.v needs $80m to make it into production from here. It has the
necessary working capital (just raised) to get by, but the serious capex needs to be funded.
And I have no idea how it's going to be able to raise that cash or under what terms and
conditions. And it's small. And it's in Colombia.

Bottom line: I've been watching RD.v and I'll keep watching it. But in early 2015, considering
where we are on the cycle and
considering both the strengths and the
weakensses of the story the company
has to sell in order to raise its cash, then
factoring in the way it's suddenly being
pushed as The. Greatest. Thing. by
people who cannot be trusted to care for
anyone's back pocket bar their own, it's
extremely easy for this retail player to
stay on the sidelines and wait to see if it
can put the cash together and even if it
does, at what terms. If the capex arrives
and it's equity-friendly, it may become a
trade, but not before that.
Starcore Intl (SAM.to) reports its 2q15 financials
On Monday evening our little gold producer long Starcore (SAM.to) reported its 2q15 quarter
(ends Jan 31st) and the numbers came in just fine. They also fit pretty closely with the call
made in IKN302 dated Feb 22nd when we considered the recently released production data for
the quarter and made guesstimates on
the numbers SAM would file. Here are
SAM.to: Assets Breakdown per qtr
the tracking charts used on SAM, each
80
with a short comment and sometimes
70
showing any particular difference
60
between the forecast and the reality
50
showed up, but overall I have to say
40
that our model got this one very close, 30
the reco isn't changing today, this is a 20
good little cheap-end stock that I 10
think's going higher with or without 0
better gold prices.
Balance sheet items came in right. My
April 2015 quarter is making a guess
(that's all I have to offer you) on what value
SAM.to will decide to carry the Creston Moly
assets.
Here's the detail from that assets table, just
the cash & ST:
With an IKN estimated $6m in liquidity even
after paying for the Creston Moly assets, this
is a small miner with no cash crunch problems
to worry about.
The debt position remains optimum.
16
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj tse51.rpa
$m
cash st inv other current fixed
source: company filings, IKN ests
SAM: Cash & short-term investments
12
10
8
6
4
2
0
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj tse51.rpa
$m
source: SAM filings, IKN ests

SAM.to: Liabilities Breakdown per qtr
45
40
35
30
25
20
15
10
5
0
17
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj tse51.rpa
source: company filings/IKN ests
srallod
fo
snoillim
LT debt
current debt
And so to working capital, which stood at $12m as at quarter's end. The dip expected this
quarter is for the Creston purchase, after that the expectation is for a company that starts
adding back to its enviable liquidity position again.
14 SAM.to: Working Capital per qtr
12
10
8
6
4
2
0
-2
-4
-6
-8
-10
-12
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj tse51.rpa tse51.yluj
source company filings/IKN ests
srallod
fo
snoillim
We're now at 151.947m shares outstanding.
SAM.to: Shares Out
160
140
120
100
80
60
40
20
0
01.tco 11.naj 11.rpa 11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj
source: company filings/IKN ests
serahs
fo
snoillim
The main reason for those new shares is the paper purchase of sister (or cousin) comapny
American Consolidated last year. We're not expecting any big adds to that number any longer.
With the balance sheet stufff out the way, here are a few charts on the quarter's operations.
This first chart is the main one and it shows both revenues and costs slightly higher than the
IKN model, with the net result of one largely cancelling out the other. We were expecting flat
earnings at the mine (op earnings) then pre and post-tax and that's what we got.

SAM.to: Operations overview
11
10
9
8
7
6
5
4
3
2
1
0
18
21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj
$m revenues
COGS
mine op earnings
source: SAM filings, IKN ests
This chart cuts and slices the numbers in a slightly different way to show the same sort of
result; that the margin is being reduced by the crimp of lower realized price for gold and the
cash cost rise at the mine. We are expecting costs to drop as from the next quarter but being a
small mine that gets swayed easily, that's only a tentative call.
SAM.to: Cash cost AuEq vs Au realized price
2000
1800
1600
1400
1200
1000
800
600
400
200
0
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj
U$/oz
Au realized price
cash cost AuEq
source: company data, IKN ests
Here's operating earnings per share, we're down to noting it in tenths of a penny:
SAM.to: Op.Earnings per share, per qtr
0.07
0.06
0.05
0.04
0.03
0.02
0.01
0.00
01.tco 11.naj 11.rpa 11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj
source: company filings, IKN ests
As for bottom line stuff, our model pointed to breakeven and that's what it basically was, give
or take a little.

SAM.to: Earnings
8
7
6
5
4
3
2
1
0
-1
-2
-3
19
11.rpa 11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj
$m
pre-tax earnings
net earnings
source: SAM filings, IKN ests
Here's a chart on book value, with SAM.to down to 40c. As that's still over double the share
price, there's certainly room for impairments if necessary. They're probably not, though.
SAM.to: Price/Book Ratio
1.00
0.80
0.60
0.40
0.20
0.00
31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj
source: company data, TSX, IKN calcs
More meta, with share price versus book value per share on offer. The gap is widening and has
done so ever since SAM.to paid off its financial debt.
SAM.to: share price vs book value/share
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj
pps at qtr end
bv/share
source: company filings, TSX, IKN calcs
Overall, it was a solid quarter from SAM.to that brought the expected breakeven-or-abouts
result. With anmy gold price improvement, SAM.to could shoot higher quickly and it's my idea
of a very decent low-risk/high-reward option for your portfolio. It's too small to bet the farm on,
though. Eyes wide open when you move in on 15c stocks, please.
Argonaut Gold (AR.to): No trade for me
March 16th Monday morning pre-open brought the AR.to numbers (4) I'd been waiting for, as
there was the potential for a trade on this stock if the quarter shwoed promise. As noted in the
coverage since December I really wasn't expecting much from this set of financials and with the

stock having been beaten down to $1.40 the weekend before, any glimmer of something
decent would have been enough to consider a new long position. But it was not to be (for me
at least, others obviously see reason to bid up the stock) as AR.to returned dismal financials
that got me laughing at them on the open blog (5) by the time I'd digested it all. I've picked a
few charts from the spreadsheet here below to illustrate this-and-that, but the worst of them all
must be this one:
AR.to: Op. Earnings
20
17.2
18
16
12.8 14
12
8.8
10
8
6 5.1 4.6 4.5
4
2 0.8 -1.1
0
-2
20
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4
source: company filings/IKN ests
srallod
fo
snoillim
After a near-record production quarter, the one that saw AR.to shoot through $3 in January, it
was one thing not to return a net profit after taking several financial-end hits (including a $6m
forex loss) but quite another not to be able to return an operating profit. Even in the poor
prodcution quarter of 3q14 it managed that. If we compare 3q14 to 4q14...
• Gold Eq Oz production went up 30.5%
• Revenues went up 31.2%
• Costs went up 39.8%
...and there's something wrong with any production model, no matter whether a miner or a
widget maker, be it temporary or permanent if your costs rise faster than your revenues when
you expand production.
AR.to: Operations overview
60
50
40
30
20
10
0
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4
U$m
revenues prod costs amorts etc gross profit
Source: AR.to filings, IKN ests
On the blog last Monday I wondered just what had caused to cost jump. On its conference call
later that day AR.to management put the blame on two things. Firstly extra reagent use (as
jokeingly suspected at the time and second a reduction in capitalized stripping. That second one
was interesting, because it comes for the first time with a set of end-year audited financials.
There's more than a suspicion that the auditors wouldn't sign off on the type of non-expensed
stripping that AR.to had been doing previously, which would also suggest that the new costs
level isn't suddenly going to go away again.

AR.to: production costs per qtr
$m
35 33.065
30
25 21.255 22.378 22.644 24.278 23.644
20 16.928 18.603
15
10
5
0
1q13 2q13 3q13 4q13 1q14 2q14 3q14 4q14
source: company filings
Over at the balance sheet AR.to didn't take any big impairment on its marginal projects, which
is their prerogative I suppise but it's getting a bit silly to claim that just Magino is worth more
than the whole company's market cap.
AR.to: Assets
1000
900
800
700
600
500
400
300
200
100
0
21
31q4 41q1 41q2 41q3 41q4
fixed
$m other current
cash
source: AR.to filings
Notably, we saw debt creep back up after seeing it drop through 2014. That's one to keep an
eye on for the 1q15 set of numbers.
AR.to: Debt Breakdown per qtr
140
120
100
80
60
40
20
0
31q4 41q1 41q2 41q3 41q4
source: company filings
srallod
fo
snoillim
LT debt
current debt
And the final chart of this rapid overview is another balance sheet deriv, a breakdown of its
working capital position to "cash" and "other working cap". It's notable that cash moved up
slightly since 3q14, but overall working cap dropped (the company took on more near term
liability). This didn't stop some brokerage pumping of the stock by highlighting the extra cash
but "forgetting" to mention the bigger picture. This isn't a big surprise though, as AR.to is one
of those supported stocks that the market wants higher.

AR.to: Working cap breakdown
$m
160 other working cap
cash
140
120
100
80
60
40
20
0
4q13 1q14 2q14 3q14 4q14
source: company filings
And as this last chart shows, a ten day price chart of AR.to the stock, higher is exactly what we
got. AR.to bounced well on the gold price pop and gathered momentum from then, becoming
one of the best vehicles to play the gold rebound with in the last three or four days. That's fair
enough but it's still not enough to
tempt me in and despite not
benefitting frmo the move it's not one
I regret missing. The original trade on
AR.to was because the stock "ticked
all the boxes". Now its fundies are a
mess (no operating profit!) and costs
are set to stay higher as well. AR
surely did get a boost from the gold
price turnarond but then again so did
just about everything else I own, I'm
not sweating on missing one that's
less of a fundies-based logical trade
and more a coinflip on the metals
market now.
I will remain firmly on the sidelines for AR.to, my idea of a easy pass.
Lake Shore Gold (LSG.to) runs away from me again
A follow-on from last week's "on the shopping list" short piece. This time I could blame it on the
travelling but I'd be lying if I did. As this five day chart that sets Lake Shore Gold (LSG.to)
against GLD and the GDXJ juniors ETF shows, there were two and a half days in which I could
have bought my slug of LSG.to at a 95c or thereabouts price.
I'm not a buyer at the new level, so will wait it out to see what happens.
22

Conclusion
IKN306 is done, we end with bullet points:
• The Focus Ventures (FCV.v) Bayovar12 project is progressing well. Come the PEA in
3q15 and its reception it will be time to make a hold or sell decision. But I'm not a
buyer of any more until the latent problem of that debt payback date in 2016 is solved.
• Starcore (SAM.to) put in a quarter that was very much in line with my expectations.
This is a good cheap play on gold producers and it'll only taking one good quarter's
worth of production to catch more people's attention. Meanwhile, its asset collection
plan gives it longer-term backbone and unlike many other tinycaps, it can actually
afford to go out shopping the way it's done. I may be tempting fate by voicing it, but I
really don't see much downside for the stock from here barring the total gold collapse
scenario. If that happens you won't want to read The IKN Weekly for many other
reasons, too.
• My Fortuna Silver (FSM) (FVI.to) short is likely in its last days.
I thank you in advance for any feedback. Flash updates will be sent promptly from the edge of
the world if required by events.
I wish you good trading fortune, ladies and gentlemen.
Otto
Footnotes, appendices, references, disclaimer
(1) http://finance.yahoo.com/news/focus-delivers-initial-estimate-bayovar-181840423.html
(2) http://www.theaureport.com/pub/na/16583
(3) http://finance.yahoo.com/news/amerigo-secures-cauquenes-bank-financing-113000668.html
(4) http://finance.yahoo.com/news/argonaut-gold-announces-2014-revenue-120000417.html
(5) http://incakolanews.blogspot.com/2015/03/more-argonaut-arto-unintentional-comedy.html
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
23

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
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
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Stocks To Follow Closed Positions, 2011
Closed in 2011 closed close PPS
Sunward Res SWD.v jan'11 C$1.05 21-nov-10 C$1.63 55.2% target made, trade closed
Serengeti Res SIR.v mar'11 C$0.245 05-dec-10 C$0.285 16.3% sold pre-tgt, ST trade fail
Fronteer Gold FRG apr'11 U$2.37 03-may-09 U$15.24 543.0% buyout, trade closed
Minefinders MFN apr'11 U$9.09 07-nov-10 U$16.89 85.8% target made, trade closed
Metalline Min. MMG may'11 U$1.04 26-jan-11 U$0.89 -14.4% exit, resource disappointed
Peregrine Met PGM.to jul'11 C$0.87 06-mar-11 C$2.60 198.9% buyout offer, closed
Dynasty Metals DMM.to jul'11 C$4.20 03-may-09 C$2.85 -32.1% Sold. Fail. Move on.
Aura Silver AUU.v aug'11 C$0.22 13-oct-10 C$0.16 -36.4% Bad pick. Take loss
U.S. Silver USA.v aug'11 C$0.52 26-jan-11 C$0.71 36.5% closed to make room
B2Gold Corp BTO.to sep'11 C$2.80 12-may-11 C$4.27 52.5% target made, trade closed
Bear Creek Min. BCM.v sep'11 C$3.80 27-may-11 C$4.17 9.7% macro sell call victim
Minefinders MFN sep'11 U$14.70 10-aug-11 U$15.15 3.1% macro sell call victim
Great Panther GPR.to sep'11 C$3.03 22-aug-11 C$2.64 -12.9% macro sell call victim
Fortuna Silver FVI.to sep'11 C$1.07 03-may-09 C$5.36 400.9% sold 20%, macro sell call
Focus Ventures FCV.v nov'11 C$0.40 20-apr-10 C$0.20 -50.0% cut losses, bad trade
Regulus Res. REG.v dec'11 C$1.17 14-aug-11 C$0.52 -55.6% cut on news of poor 43-101
2009 and 2010 closed positions in appendices below
Stocks To Follow Closed Positions, 2010
Closed in 2010 closed close PPS
B2Gold Corp BTO.to Jan'10 C$0.88 08-nov-09 C$1.49 68.2% target made, trade closed
Radius Gold RDU.v Jan'10 C$0.18 23-aug-09 C$0.40 122.2% target made, trade closed
MAG Silver MVG mar'10 U$5.60 23-nov-09 U$7.28 30.0% closed in pdac week
Riverside Res RRI.v mar'10 C$0.435 20-sep-09 C$0.60 37.9% closed in pdac week
Amarillo Gold AGC.v mar'10 C$0.81 31-may-09 C$0.70 -13.6% closed in pdac week
B2Gold Corp BTO.to apr'10 C$1.24 18-feb-10 C$1.50 21.0% target made, trade closed
Lumina Copper LCC.v apr'10 C$0.84 14-jun-09 C$1.55 51.2% total position now sold
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
25

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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