IKN #309Premium

The IKN Weekly
Week 309, April 12th 2015
Contents
This Week: The almighty dollar, The improving state of the portfolio.
Fundamental Analysis: NOBS update report on Lake Shore Gold (LSG.to).
Stocks to Follow: Overview, Rio Alto Mining (RIOM) (RIO.to), Regulus Resources (REG.v),
Lake Shore Gold (LSG.to), First Majestic (AG) (FR.to), Teranga Gold (TGZ.to) (TGZ.ax), Focus
Ventures (FCV.v), Legend Gold (LGN.v), Dalradian (DNA.to), Minera IRL (MIRL.L) (IRL.to).
Copper Basket: Overview, Panoro (PML.v), Western Copper & Gold (WRN.to), AQM Copper
(AQM.v), Amerigo Resources (ARG.to).
Low Cost Producer Basket: Overview, Buenaventura (BVN).
Regional Politics: Mexico: Guerrero political risk is coming to Canada, Peru: Miners' strike
May 18th, Guatemala: Anti-mining activist killed near Tahoe Resources (THO.to) (TAHO) mine,
A report on mining in Burkina Faso, The Chile weather report.
Market Watching: McEwen Mining (MUX) (MUX.to) shoots itself in the foot, Soltoro (SOL.v):
More evidence the majors are grabbing land, Why I'm no longer interested in First Mining
Finance Corp (FF.v).
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
The almighty dollar
To paraphrase Twain*, 'The report of its death was an
exaggeration’. One measley jobs number miss wasn't
going to stop the all-powerful dollar for very long, oh
no madam oh no sir. Frankly, I was one of those who
expected the dollar to drop last week and move back
towards the 95 level. The renewed strength of the
world's reserve currency put paid to my smart Alec
ideas quickly and also to the rally in gold. I make no
attempt on predicting the currency this week,
tentative or not. I have enough problems trying to
guess the direction of a bunch of juniors.
*And to paraphrase him correctly (1).
The improving state of the portfolio
With the changes seen in recent weeks I'm now generally happy about the position of the
'Stocks to Follow' portfolio to the market. We have plenty of quality free cash flow producing
precious metals names. We have quality exploration exposure from Dalradian, Regulus and
Focus, there's now a group of names that put the "land grab" theory into action in SAM.to,
1

FOS.to, LGN.v, NCQ.to and LRA.v. There are always subjectively stronger and weaker parts to
any portfolio and (as always) it's the weaker ones that concern me the most on a daily level.
Today as far as I can see from the current price deck and trading action, the weak points are
First Majestic (AG) (FR.to) and Minera IRL (IRL.to). But overall it's now a portfolio that's easy to
own and I think better represents my ideas to turn a coin in 2015. There's also cash on the
sidelines and a space to bring the count up to 15 if required, so flexibility is still there. In this
way I bow to the gods of hubris and tempt my fate in the month of April.
Fundamental Analysis of Mining Stocks
This week we update on our new purchase, Lake Shore Gold (LSG.to) (LSG).
NOBS update report dated April 12th, 2015
Lake Shore Gold Corp. (LSG.to) (LSG)
Company Overview
Lake Shore Gold Corp. (Canada: LSG.to, USA: LSG, Frankfurt L3D.f) is a junior gold mining
company operating in Canada. It has two operating mines, namely Timmins West and Bell
Creek, both in Ontario Canada, that feed a wholly-owned central mill. It also owns development
stage properties in the same area. Current share structure is as follows:
Shares out: 435.538m
Options: 21.916m
Warrants: Zero
Fully diluted shares: 457.454m
Current share price: $1.05
Market Cap: $457.31m
Approx working cap per S/O: 14c
All prices are in Canadian dollars unless stated. Forex U$0.80=CAD$1
NB: LSG reports its financials in Canadian dollars and operates in Canada. Therefore
unless otherwise stated all prices in this report are in Canadian dollars, including gold.
Overview of today’s note
This is an update report, which springs from the decision made on Tuesday morning (see
Appendix 1) to open a position in LSG. This report leans heavily on the original IKN coverage
report of IKN296 dated January 11th 2015 so we're not repeating a lot of the background
information found in that note. If you want more about the nuts and bolts of LSG the company
go look over there or ask me for a copy of 296, I'll send it over forthwith.
What's changed since IKN296
Here's a list of things:
1)The share price. Back then it was 90c and though it's bounced up and down a bit (LSG
definitely enjoyed the January period when gold popped over $1.3k) the trend has been up and
today's $1.05 price means I left a 16.7% (pre-commish) gain on the table by not pulling the
2

trigger in early January. More fool me.
2) The 144 Gap zone exploration. The encouraging results seen from the 144 Gap Zone
exploration program moved the stock for a while but seem to have been forgotten. That's good
for me, the new buyer. The two dedicated news releases from the company on 144 Gap came
late January (2) and late February (3) which combine to show how the deep drilling program at
144 has extended the known
mineralization. Also, this map (4)
shows the current understanding of
the 144 Gap resource; It's a
interpretation you look at for a while
and think, "Hey this thing really is
going to be a mine". There's still work
to do and an updated resource for 144
isn't expected until 1q16, but LSG now
has a live organic growth pipeline.
Perhaps the best place to consider the
implications at this stage is via its
4q14 corporate presentation (5)
because you get decent overview
maps such as this one (right) which
gives a good idea of how 144 Gap is
going to fit into the resource and
eventual production growth. Also, via
the presentation you also get a feeling
of the importance currently being place on 144 Gap by LSG because of the ten pages of
content in the 4q14 results show, which you'd normally expect a producer to focus on the
numbers and financial math, four are dedicated to various maps and schematics for 144 Gap.
3) The forex and the gold price. As this chart shows, just after running the LSG.to NOBS
report on January 11th the CAD/USD forex took another leg down and this weekend you can
buy a Loonie with just eighty US pennies.
3

And then there's the impressive rise in the gold price. Not in US Dollars of course, as at
U$1,200/oz or so that's all but flat on the year. But in Loonies gold's up from CAD$1,400/oz and
touched over CAD$1,600/oz for a while, but is still over CAD$1,500/oz and as LSG operates in
Canadian and reports in Canadian Dollars, that's a positive bonus to its earning ability.
4) The 1q15 numbers. Last but definitely not least, the thing that broke my whussiness and got
me to buy this stock at long last (aside from the "mere coincidence" of coming into a whole
bunch of new cash thanks to the sale of RIO.to) was the production numbers out of LSG for its
1q15 period ended March 31st. They were
sparkling and they're in this NR (6) dated
April 7th. Here are the main production
numbers stuck into the charts for easy
visuals, plus a few guesstimates for 2q15
while we're here.
Tonnages milled in 1q15 (right) were a
touch under 300k, somewhat lower than in
recent quarters. The recovery of 96.7%
was the same rock solid average as
always, so no change there.
What made the difference is this, average gold grades:
Lake Shore Gold (LSG.to): Au grade (g/t)
6 5.2 5.1 5.4 5.7 5
5 4.7 4.6
4.2 4.3 4.2
3.8
4
3
2
1
0
4
21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2
Lake Shore Gold (LSG.to): Tonnage milled
350000
300000
250000
200000
150000
100000
50000
0
g/t
source: company data
At 5.7 g/t gold, it was way above the last couple of quarters, way above the reserve/resource
average and the highest quarterly average ever recorded. The result of that you can see here,
in the real paydirt chart below:
21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2
tonnes/qtr
source: company data

Lake Shore Gold: Gold production vs sales, per qtr
60000
55000
50000
45000
40000
35000
30000
25000
20000
5
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2
oz Au
Au prod
Au sold
source: company filings
Gold production was a new record 53,000 oz and sales were 52,600 oz. As we also know the
average realized selling price for LSG in the quarter of CAD$1,504 we can make a safe
estimate of sales at $79.1m.
So yes, that's a great quarter from LSG but we need to recognize that the high average grade
isn't sustainable. However, what seems to be happening is the company's getting a better
handle on its grade control/mine dilution, which added to a presumed sweet spot of grades gave
1q15 a big boost. Back in 2014 I worried in print that LSG might be high-grading its property and
sacrificing longer-term economics for a nearer term gain. It now seems my fears on that were
misplaced, as we're going to see fluctuations along the way but the company isn't pushing
grades higher artifically, either. You'll note for 2q15 I'm best-guessing 5.0 g/t Au, which could be
a long way out or might hit it just right, we'll see on that.
Operating results
Following on from production, we can consider operating numbers and the key point will be
about costs. There are several ways to cut
and slice the figures and the estimates for
1q15, starting with the classic operating cash
costs per ounce as seen here right:
In short, due to the higher production of gold
from the same amount of rock, we're
expecting op-cash costs to trend down nicely
this quarter. To put more flesh on that (and
work in absolute dollar numbers rather than
'per ounce', something I prefer), here below
is the evolution of production costs. I'm
expecting 1q15 to come in around $30m,
with the same guess made for 2q15.
LSG.to: Production costs (COGS)
35
30
25
20
15
10
5
0
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2
LSG.to: Op Cash costs, per qtr
1100
1000
900
800
700
600
500
400
300
200
100
0
$m
Source: LSG filings, IKN ests
21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1
C$/oz
source: company filings

But production costs are by no means the whole shebang, at LSG or at any other mining
company. So in order to underscore why I like the numbers at LSG here's a slightly artificial but
still valid composite costs chart (left) that adds up the expenses above and below the gross
profits line (without tax). If you want a nice easy read on that, it means that in the next couple of
quarters at least, if revenues come in above CAD$55m the company is profitable. And as the
chart of revenues on the right shows, that's most difnitely the case:
This is one of the main reasons I'm buying into LSG today; the market now knows that 1q15
produciton was strong but I don't think it's totally sunk in as to how much better the financials
are going to be when they're released on April 29th. This is exactly the type of profits
improvement that fund managers looking for the "serious gold mining company" will want to see
on their radar screens. Here's how gross profits are evolving, with 1q15 at $31.6m according to
our estimates. That's a mile above anything in the previous years.
LSG.to: Quarterly Earnings Overview
90
80
70
60
50
40
30
20
10
0
6
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2
LSG.to: Global costs breakdown
70
60
50
40
30
20
10
0
$m
revenues Prod Costs
deplet/deprec gross profit
source: company filings/IKN ests
Operating earnings are estimated at $24m, which works out at around 5.5c/share. In my Flash
update of last Tuesday (see Appendix 1) the original estimate was 6c, I've brought that down a
little because I'm now factoring in a slightly heavier exploration budget.
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2
LSG.to: Revenues
$m 90
Prod Costs deplet/deprec G&A Exploration other 80
70
60
50
40
30
20
10
0
source: company filings, IKN ests
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2
$m
source: LSG filings, IKN ests
LSG.to: Op. Earnings
26 (with 4q12 and 4q13 imparirments backed out)
22
18
14
10
6
2
-2
-6
-10
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2
source: company filings/IKN ests
srallod
fo
snoillim
LSG.to: operating earnings per share
(with 4q12 and 4q13 impairments backed out)
0.06
0.05
0.04
0.03
0.02
0.01
º 0.00
-0.01
-0.02
-0.03
21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2
cents
source: company financials/IKN ests

Moving on to the balance sheet items, this story gets even better. Assets look like this. LSG has
cleaned up its assets valuations and its current exploration program will probably add a modest
amount of fixed asset value to the pile this year, but what we're really going to care about is
improvement in the treasury position.
LSG.to: Assets
900
800
700
600
500
400
300
200
100
0
7
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2
$m
fixed
other current
cash & eq
source: LSG filings
Let's zoom in on the cash position (below) which is indeed starting to improve. We got some
preliminary treasury numbers from LSG in its NR last week (they tend to lump cash and bullion
together, that's ok) which has me best-guessing cash at $67m at end 1q15. The company has
done the heavy lifting on liabilities and is now in the position to collect cash, which we expect it
to do this year.
LSG.to: Cash treasury per qtr
100
90
80
70
60
50
40
30
20
10
0
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2
source: company filings/IKN ests
srallod
fo
snoillim
As for liabilties, they look like this:
LSG.to: Debt Breakdown per qtr
200
180
160
140
120
100
80
60
40
20
0
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2
source: company filings
srallod
fo
snoillim
LT debt
current debt
The main story here is a a positive one, with near-term liabilties now estimated to be under
$40m. This along with the improving cash position makes the working capital chart below
particularly impressive:

80 LSG.to: Working Capital per qtr
70
60
50
40
30
20
10
0
8
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2
source company filings/IKN ests
srallod
fo
snoillim
I like this a lot. Again, I get the distinct impression that the market isn't expecting such a strong
improvement from the company's financials this quarter because if it did, it would have moved
higher than the $1.05 Friday close. LSG is operating well and has a live exploration project on
its hands, but the real improvement here is in the financials, this company is getting strong
quickly.
Share count looks like this:
LSG.to: Shares Out
500
450
400
350
300
250
200
150
100
50
0
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2
source: company filings/IKN ests
serahs
fo
snoillim
The latest count is 435.538m shares out (as per the management information circular of last
week) so we're bang up to date on this number.
The meta-indicators below show that due to the cleaning of the fixed asset values
(impairments/write-downs), reduced carried liabilities and the improvement in operations, we're
now close to the point where market cap overtakes book value. Be clear that there's no reason
whatsoever why the price/book ratio shouldn't go over 1.0X. In fact, with the profits now being
generated at LSG and an organically funded growth pipeline, I'd be surprised if it didn't.
LSG.to: Market cap versus book value
1200
1000
800
600
400
200
0
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 WON
C$m
mkt cap at qtr end
book value
source: company filings, TSX data

This little chart maps out what I'm expecting of the ratio:
LSG.to: Price/Book ratio
1.4
1.2
1
0.8
0.6
0.4
0.2
0
9
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 won tse51q2 tse51q3
source: company data, TSX, IKN calcs
Come the end of 3q15 (assuming Goldcorp hasn't bought out LSG by then) a 1.23X ratio is by
no means out of the question and that would imply a CAD$1.50 share price.
Discussion and conclusion
You already know I've bought my piece of LSG.to and I'm long, so there aren't going to be any
call surprises today. What I would like to do is look back at a small section of the conclusion to
the original report on LSG.to from IKN296 that explained why I wasn't a buyer of the stock at
that time:
Overall and today I’m not a buyer of Lake Shore Gold (LSG.to). The two reasons are:
1) Rio Alto is a better company and a better investment today. I see no reason to buy a new position
in LSG at current prices, instead of an addition to RIO.to.
2) It looks as though the current quarter will be a softer one. My opinion on that may change once
we get next week’s costs NR for Q4 (and I reserve the right to be totally hypocritical at all times)
but my best guess today is that LSG could provide a better entry point a little further into 2015, if I
still want to buy more gold exposure at that time.
IKN309 back. That weekend RIO.to was a $3.06 stock and I eventually sold my chunk for $3.60,
some 17.6% higher. If we consider that LSG is up 16.7% in the same period I can juuuust about
claim that call as correct, especially if I want to be cute and annoying. Also on balance I was
right about 4q14's financials coming in on the soft side, because although LSG did an nice job
of strengthening its balance sheet (which has continued in 1q15 by all accounts), the bottom
line net was a $1.5M loss.
However, as far as I'm concerned the excuses for not owning LSG have now run out. Gold's
holding nicely. The company's soft-ish 4q14 is now a quarter behind us and what we can expect
from the 1q15 numbers is quite the contrary, they're going to show a gold mining company
that's now strongly profitable. Yes production in 1q15 is probably an outlier due to the
exceptionally high average grade in the period, but as long as costs stay under control any
reasonable quarter production wise will show LSG as remaining significantly profitable.
Lake Shore Gold (LSG.to) (LSG) has done nothing but knock down my objections to its
ownership in the last year. The great advantage it offers today, apart from being a "fully Loonie"
financials company that automatically demonstrates the improvement in economics that a
strong US Dollar is bringing to the sector, is that it isn't a turnaround story any longer. LSG is a
turned around story, the heavy lifting is done, corporate financial improvement happened in
2014 and now in 2015 it's set to reap the rewards. The market has cottoned onto it as an
improving company, but from what I see it's yet to work out just how much things have changed.
That's going to happen when LSG reports its 1q15 on April 29th so in effect, you have until the
end of the month to get yours.
Given a fair run on the gold price this one is going higher. Own it, target $1.50.

Stocks to Follow
We've swapped and changed things in the last few weeks and there are now 14 open positions
on the list. Of those, eight scored weekly gains last week (BTO.to, LSG.to, LGN.v, NCQ.to,
DNA.to, REG.v, FCV.v, ITL.to), two were unchanged (TGZ.to, SAM.to) and four shows a loss
(MUX, AG, FOS.to, LRA.v). What with all that and getting my desired out price on Rio Alto
(RIO.to) at $3.60, it was a decent week overall personally speaking.
With the disposal of RIO.to and the additions of REG.v and LSG.to we now have 14 open
positions in our Stocks to Follow list, one less than our self-imposed maximum. Six of those are
in the green, eight are in the red.
company Ticker this week Avg Price Reco date Current PPS Gain/Loss% Notes
Metals Producers (in current order of preference)
McEwen Mining MUX buy U$1.09 25-jan-15 U$0.97 -11.0% Added Mar'15, top value
B2Gold BTO.to buy C$2.32 12-sep-14 C$1.94 -17.7% Dependent on Au price moves
Teranga Gold TGZ.to buy C$0.55 15-feb-15 C$0.64 16.4% New position, 83c tgt
Lake Shore Gold LSG.to buy C$1.04 07-apr-15 C$1.05 1.0% New FCF+ prod. Poss M&A tgt
First Majestic AG hold U$10.51 10-aug-14 U$5.14 -51.1% Holding, only silver exp left
Starcore Intl SAM.to hold C$0.12 10-jan-15 C$0.14 16.7% Also "land grab", tgt 19c
Land Grab Stocks (in current order of preference)
Phoscan Chem FOS.to buy C$0.28 29-mar-15 C$0.265 -5.4% New trade, 36c/share of cash
Legend Gold LGN.v spec buy C$0.085 01-mar-15 C$0.075 -11.8% Spec buy, v small trade
NovaCopper NCQ.to hold C$1.05 09-apr-14 C$0.77 -26.7% small Cu play low vols, hold
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.325 -71.7% solid biz model, LT hold
Other Recommended Stocks (in current order of preference)
Dalradian Res DNA.to buy C$0.64 27-oct-13 C$0.94 46.9% Nov'14 tgt $1.25, top Au expl
Regulus Res REG.v spec buy C$0.30 06-apr-15 C$0.395 31.7% New bet on 2016 drill prog.
Focus Ventures FCV.v hold C$0.23 01-jul-12 C$0.24 4.3% tgt 50c, now raising cash
Minera IRL IRL.to hold C$0.27 22-jul-12 C$0.085 -68.5% Waiting for financing news
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'15 C$0.405 20-jul-14 C$0.285 -29.6% Given up on weak Cu prices
Reservoir Min. RMC.v jan'15 C$6.05 18-jun-14 C$4.12 -31.9% sold on Cu downturn
Coro Mining COP.to jan'15 C$0.075 26-jan-14 C$0.035 -53.3% sm, sold on Cu downturn
Fortuna Silver FSM mar'15 U$4.12 10-nov-14 U$3.75 9.0% Short used as hedge
GoldQuest Min. GQC.v mar'15 C$0.26 27-oct-13 C$0.085 -67.3% given up ghost
Rio Alto Mining RIO.to apr'15 C$2.30 07-apr-11 C$3.57 55.2% Top pick, bot out, big win
2009, 2010, 2011, 2012, 2013 and 2014 closed positions in appendices below
Now for some notes on current basket stocks.
Rio Alto Mining (RIOM) (RIO.to): Position closed. And so farewell, Rio Alto Mining. In the
end the $3.60 price came on the Monday morning bounce (thank you gold) and I got out there,
so once the previous small sale was factored in, it's a $3.57 exit and an official (pre-commish)
55.2% booked win. But it's also a big win in real cash terms and despite the wild ride, there's
little choice than to be happy about the overall result. Now it's time to move on.
I wish Rio Alto's team the best of fortune in its new form as part of Tahoe Resources and I'm
sure to be a close watcher of its progress, but it's going to be from the outside.
Regulus Resources (REG.v): Position opened. I said I'd get my price and I did, which is
now marked at a solid and cheap-looking 30c open. As for the large percentage gain at the end
10

of last week don't read too much into it. REG.v only did 72k shares' worth of volume all week,
with 50k of that Monday and Tuesday. So
the move up from 29c to 39.5c on just 10k
shares over the last two days needs to be
understood for what it is: totally
unimportant.
And don't think for a minute that you've
missed the boat here, there will be time to
get 30c shares again. For one thing there's
the low volume pop which isn't anything
more than trading range stuff. For another,
the plan here is to pick and choose entry
points all through 2015, there is zero rush
to get on to this stock, REG.v won't start
giving us the market-shifting news releases
until the drills start turning and that's 2016 minimum.
Lake Shore Gold (LSG.to): Position opened. An official line here to add to the more
detailed fundies look you see above. For what it's worth, I consider my $1.04 entry price a very
fair place to start and as the week progressed and gold dropped back to (and under) U$1.2k
again, the relative strength of LSG was notable compared to peer stocks. No guarantee for the
future of course, but I'll take from that a small positive for this new position.
First Majestic (FR.to) (AG): The single most frustrating and annoying piece of news out of
the juniors last week came from FR.to. Not the formal announcement of its holding in First
Mining Finance (FF.v) on Monday (7) as that stock starting trading (see below in 'Market
Watching' for more on that one) and not the announcement the same morning (8) that one
Martin Palacios has been promoted to 'Chief Transformation Officer' (a position totally
unconnected with Optimus Prime or Ultra Magnus). No, the annoyance came on the evening of
that same Monday when FR.to announced (9) a bought deal placement for 4.62m shares at
CAD$6.50 to raise CAD$30m. As explained in the NR...
The Company intends to use the net proceeds of the offering for general working
capital and ramp development at the La Guitarra Silver Mine from the Coloso mine to
the Nazareno area with the aim of bringing Nazareno online by year end and advance
the permitting and planning process to develop Mina de Agua and El Rincon areas at
La Guitarra. In addition, the Company intends to begin the planning process at the
Plomosas Silver Project in Sinaloa for the preparation for a future Preliminary
Economic Assessment (PEA).
Ok fine. And as noted on the blog last week (10) that message compares to this one broadcast
to the world during its 4q14 financial report, out February 23rd:
The Company is currently in open discussions with various financial partners to reduce
or extend payments on certain current liabilities in order to strengthen the working
capital position. Based on the Company's current operating plan, the Company
believes it has sufficient financial resources, combined with cash flows from
operations, to meet its ongoing requirements.
At the time, once the YE numbers were and they showed FR.to was running a negative working
capital at 2014 year-end, I made the point of asking the company whether they'd run a
placement in order to raise some compfort-type liquidity. I thought there was a good chance of
it happening and even told them that, speaking personally, it wouldn't be an unwelcome move.
They answered saying they'd work on relieving the working cap position by lightening current
liabilities load. Fair enough I thought, and left it at that. Less than two months later they run an
equity placement and what's more at a dilutive price that nips in the bud the nascent rally.
11

I was so annoyed by this company bullshit move that I nearly sold my AG shares on Tuesday
morning in what would have been a fit of
capricious pique and as things turned out (see
this 10 day Ag versus SLV comparative) that
wouldn't have been such a bad idea.
It's one thing to run a surprise placement. It's
another to run one just weeks after stating in
your YE financials that you're covered for the
year ahead financially. It's altogether another
one to waste any strategic advantage of
throwing in a surprise one by pitching the price
so freakin' low it takes the wind out of the relief
rally. If they come now with the "oh we couldn't
have told anyone because it would have hurt
the price" it'd be pure hot air, as they hurt their own share price all by themselves by being
two-faced about the company's true financial position. To repeat for the umpteenth time, a
junior mining company sells a story. It's the story and its ability to execute on it that ultimately
decides its valuation. If you can't trust the story, they have no equity.
My biggest investment mistake of 2014 is now haunting me into 2015. It didn't feel so bad
while the Fortuna (FSM) short was in place and offsetting it, but now I find myself fully exposed
once again to the vagaries of a silver salesman. Ugh.
Teranga Gold (TGZ.to) (TGZ.ax): Not that much to say about TGZ this week aside from
"trading ok". The YTD chart shows how it's settled into a narrow trading range.
Some of you may see a cup-and-handle chart pattern in this, all I personally see is a stock
that's consolidating quite nicely at 65c or thereabouts. That's all.
McEwen Mining (MUX) (MUX.to): A longer piece covering two aspects of MUX in 'Market
Watching' below. Price-wise last week saw MUX trading weakly compared to others.
Focus Ventures (FCV.v): On Thursday FCV announced (11) it was running a best-efforts
placement to raise CAD$3m by selling 15m share units at 20c a pop (1 unit = 1 share + 0.5
warrant at a 26.5c strike). I think it's worth quoting the main body of Thursday's NR, so here
we go:
April 9, 2015; Vancouver, Canada: Focus Ventures Ltd. (FCV.V) announces that it
proposes to complete a non-brokered private placement financing of up to 15.0 million
units at CAD$0.20 per unit, for proceeds of up to CAD$3.0 million. Each unit will
consist of one common share and one full warrant, each full warrant entitling the holder
12

to purchase one additional common share of the Company at CAD$0.265 for two years
from closing. If the closing price of the Company's shares exceeds CAD$0.40 for a
period of 10 consecutive trading days, the Company may accelerate the expiry of the
warrants by giving notice in writing to the holders, and in such case, the warrants will
expire on the 30th day after the date on which such notice is given.
A 7% cash finder's fee may be paid on a portion of the placement.
The proceeds of the placement will be used to make a US$1.5 million prepayment on
its loan from Sprott Resource Lending Partnership (see Focus news release of March
30, 2015), for exploration of the Bayovar 12 phosphate project in Peru, and for general
working capital purposes.
Once this placement is done and dusted and assuming it fills completely (and it will) it means
FCV will have 93m shares outstanding and enough money to see it through to 2016 (though
not enough for all its obligations in 2016, such as pre-feas reports, further drilling, fully paying
off the Sprott loan etc). For what it's worth, I decided to shake the tree a little by criticizing the
placement deal and terms with FCV management and others by breaking their chops a bit, just
to see what I could learn by taking an anti-ish position. Here's a list:
1) FCV plans to pay off the Sprott loan before the term is up. The $1.5m
earmarked from this raising to part-pay the $5m loan (which will be perhaps
$5.5m once the interest and fees are factored in, though that depends on
how quickly it's paid off). They see it as a priority, this is very good.
2) Sprott is going to be a large taker in this placement and in fact they as a
financing house prefer holding equity to debt in FCV and this Bayovar12 story.
That's also a good sign.
3) The FCV plan to buy 70% of the property in March, instead of moving
forward on the option to eventually own 70%, means that according to them
at least it will be easier to market and get third parties involved in the the
funding. We should see this develop in the rest of 2015.
4) On this one there's no guarantee, but it wouldn't surprise me in the least to
see the Gold Group "mothership" company Radius (RDU.v) take a bigger
equity stake in FCV.v once it's fully moved its status from miner to investment
issuer. RDU has cash and easy liquidity from its stake in B2Gold, it's also the
way in which Ridgway (and friends) can most easily leverage their stake in
Bayovar12.
5) The way FCV stuck at 24c on Friday rather than move down to to 20c
placement price was telling. In fact I expect it will soften somewhat while this
placement moves forward, but there was no rush for the door seen. Good.
6) There are things that a retail outsider such as I cannot easily find out, but
one thing already clear is that FCV and those who sail in her have a carefully
thought-out money plan to move the company forward and develop
Bayovar12. From the way in which equity is playing a big part now (and let's
note that Ridgway has also been buying shares on the open market for his
own personal position) signs are that there's going to be plenty of upside left
for us the little minnow once the bigger boys and their funding chequebooks
have positioned themselves to their own satisfaction.
Overall, last week's placement announcement was a positive signal. The next one will be when
FCV announces the fully pledged placement is closing. Also, for those of you who've asked me
whether participating in this is a good idea, I'd say that if you have the right credentials
(accredited etc) then this is likely to be the last time you can get on under these cheap terms.
13

Final note: While the placement book is open I've put the near-term sentiment for FCV back to
'hold' because small juniors typically go through fallow periods while raising cash. If things go
to plan, that will get moved back up when the placement is done
Legend Gold (LGN.v): The stock price seems to have found something close to a trading
range, though due to its thinly traded nature
and low price it's a wide-percentage jaggedy
one that sees bids at 7c and asks at 8.5c. If you
want to buy a whole bunch it's there for you at
my personal entry price, knock yourself out and
get all you want (though I'd strongly suggest
you bid at 7c and wait patiently for that better
price to fill).
In other news, LGN reported its annuals last
week and there were no surprises in the
numbers, which basically means its financial
situation is as bad as expected. In cases such
as the running-on-fumes LGN it's a reasonable
acheivement to see its audited annuals filed in
a correct manner because we can at leats say they had enough cash on hand to pay the
auditors.
Dalradian Resources (DNA.to): Two pieces of minor-level good news. Firstly, on Friday
evening the company announced that Ari
Sussman was stepping down as a director
of the company. To put it bluntly, the less
he's involved with your junior mining
company, the better.
Second, this 10 day chart suggests that
90c is now becoming a firm resistance
level for DNA.to. Volumes haven't been
great recently and that's also true for
most explorecos. This is a problem, but at
least in the case of DNA there seems to be
money willing to step up and buy any
thing under that 90c price (the same price
at which Ross Beaty bought his large
piece, or course). Being in at 64c average, that's my idea of a very happy place for a floor price.
Minera IRL (IRL.to): A pulse. Tuesday saw some reasonable voilume in IRL in both London
and Toronto trading, then as the week went on there was somebody somewhere who was
bidding up on the stock. Volume dried up Thursday and Friday, but this time maybe only
because that persistent bidder wasn't put off. After watching the tape quite closely last week,
there was a marked difference in the IRL action and anything that's different in this one must
be good (because it can't be any worse). Then another small thing; the name got mentioned in
conversation, somewhat out of the blue, by someone I can only call "a well-placed professional"
who said he quite liked the stock. I didn't press him, but if he's been looking others would have
been too. I don't want to raise my hopes up too high (even worse doing it to you people out
there again re. this stock) but I can't help but sniff some change in IRL. We'll see.
The Copper Basket
After fifteen weeks of 2015 The Copper Basket is showing a 7.69% loss to level stakes.
14

company ticker price 1/1/15 Shares out Market Cap current pps gain/loss%
1 Capstone Min. CS.to 2.03 381.95 519.45 1.36 -33.0%
2 Reservoir Min. RMC.v 3.96 47.55 188.77 3.97 0.3%
3 NGEx Resources NGQ.to 1.17 187.71 178.32 0.95 -18.8%
4 Nevada Copper NCU.to 1.65 80.5 148.12 1.84 11.5%
5 Copper Fox CUU.v 0.135 402.96 86.64 0.215 59.3%
6 Amerigo Res ARG.to 0.27 173.65 64.25 0.37 37.0%
7 Western Copper WRN.to 0.68 93.68 51.52 0.55 -19.1%
8 NovaCopper NCQ.to 0.58 60.15 46.32 0.77 32.8%
9 Panoro Minerals PML.v 0.295 220.25 39.65 0.18 -39.0%
10 Hot Chili Ltd HCH.ax 0.16 333.11 38.31 0.115 -28.1%
11 Regulus Res REG.v 0.35 56.39 22.27 0.395 12.9%
12 Metminco MNC.ax 0.008 1822.6 8.20 0.0045 -43.8%
13 AQM Copper AQM.v 0.06 139.24 7.66 0.055 -8.3%
14 Catalyst Copper CCY.v 0.305 31.39 6.28 0.20 -34.4%
15 Coro Mining COP.to 0.045 159.37 3.98 0.025 -44.4%
NB: HCH.ax & MNC.ax priced in AUD$, rest CAD$ Portfolio avg -7.69%
The basket average dropped by nearly 2%, the negativity coming from eight downers (NGQ.to,
RMC.v, PML.v, WRN.to, CUU.v, MNC.ax, AQM.v,
4% The Copper Basket 2015, weekly evolution
COP.to) versus five uppers (CS.to, NCU.to,
2%
NCQ.to, REG.v, CCY.v), plus the two unchanged
stocks on the week (ARG.to, HCH.ax). There 0%
were some big percentage movers in both -2%
directions too, with best wins coming from -4%
Regulus (REG.v up 17.9%), Catalyst (CCY.v up -6%
11.1%), Capstone (CS.to up 10.6%) and -8%
Nevada Copper (NCU.to up 8.2%). Biggest -10%
downmoves came from Panoro (PML.v down
21.7%), Copper Fox (CUU.v down 10.4%),
Metminco (MNC.ax down 10.0%) and AQM
Copper (AQM.v down 8.3%).
Copper prices now and nobody seems to know
which way to jump on copper. What we do know
is that price action last week was very flat and
the new normal of $2.75/lb is in and sticking.
The impression is that the wave of bullish hope a
few weeks ago has petered out and while you
have the demand guys complaining about a lack
of end-user buyers, the supply guys are talking
up the delays to the growth pipeline.
Inventories time, here are the regular bullet
points that dovetail nicely with the price action:
• Total world copper stocks put in another
small and ultimately insignificant drop,
but the 600k barrier was cracked to the
downside which is something, I suppose.
The total was down 7,347 metric tonnes
(mt) (-1.2%) to this weekend's 594,063mt
• Shanghai Futures Exchange dropped by 2,817 mt, or 1.1%, to finish at 240,775mt.
• LME warehouses stocks dropped by a 3,500mt (-1.1%) to finish the week at
333,550mt. Almost exactly the same drop as last week, fiddling stuff really.
15
ht4naj ht11 ht81 ht52 ts1bef ht8 ht51 dn22 ts1ram ht8 ht51 dr32 ht92 ht5rpa ht21
source: IKN calcs

• Comex warehouses let go some of its recent gains, down 1,039mt (-4.3%) to finish at
23,239mt.
In short, another week without inventories definition. However, there are some rumblings of
concern from those who'd like copper higher about the non-arrival of Chinese buyers to the
market, as they should have started taking up the slack by now. Here's the weekly Shanghai-
only chart that shows stocks beginning to plateau at a new level.
Shanghai Futures Exchange Warehouse Stocks, 2014/2015
260000
240000
220000
200000
180000
160000
140000
120000
100000
80000
60000
16
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 ht5rpa
Mt Cu
source: Cochilco
Now for some notes on a couple of our basket components during what was a quiet week.
Western Copper & Gold (WRN.to): You could have got some WRN for 54c on Thursday, all
the same it's this weekend's 55c that's the theoretical floor number from which it is supposed to
bounce.
Depending on how risk-tolerant I find my mood tomorrow Monday I may buy some. But if I do,
it'll be a small trade that won't make it to the 'Stocks to Follow' list and a chunk of equity that
I'd sell back the moment WRN's share price started with a 7 again. Not much in the way of
winning fundies insight either (barring the already mentioned "not great but not the worst
thing" type of verdict). No folks, this is one I'm buying for the chart set-up no more no less.
Panoro Minerals (PML.v): With the sparks of life seen in the price and volume last week, I
wondered if the long overdue PEA was near and sure enough out came the NR on Thursday
(12). However and as mentioned on the blog that evening, we can now remove any doubt
about the mediocrity of the Cotabambas project, it's now officially a total dud. The NR
shamelessly markets the thing at a 14.4% post-tax IRR (as well as trying to get us looking at
the pre-tax number, because according to PML apparently you don't have to pay tax on profits
in Peru), but by using a $3.25/lb copper price, my idea of impressive brass neck. We're not
given estimates for project economics at $2.75/lb copper and that's almost certainly because
they'd be scary. Once we have access to the 43-101 there's probably more information to be

gleaned, but at $2.75/lb copper (i.e. respecting the current price deck instead of picking what
ever number suits the company) the IKN estimate is an NPV of $204m and an approx 11% IRR,
so even if we take a big leap of faith and discount all risk by using current spot prices (no
leeway) for a copper mining project in Peru (country risk around 180BP this weekend), the IRR
is already way too close to the cost of capital for comfort on a copper mine. And that's not even
starting on other weak looking points such as a suspicously low $1.4Bn capex number (e.g. the
more straightforward Constancia nearby has cost HudBay over $1.8Bn to build). Horrid.
Bottom line: Anyone who makes a positive build decision on this project by using $3.25/lb
copper as their "base case" and writes a cheque to PML for $1.4Bn is certifiably insane and
although I'd agree there are people with that much money who should be locked up in a loony
bin, you'd be....hell, I'm cutting it off now, just forget this company.
AQM Copper (AQM.v): Another one I could buy is this, but the volume's been so poor that it's
tough to get more than a few hundred dollars' worth of shares at a time. If the market's stupid
enough to believe Panoro is worth five times as much as AQM it's more a sad commentary on
modern capitalism rather than anything based in reality.
Amerigo Resources (ARG.to): This one (which I bought in 2014 for 40.5c and sold at 28.5c
when copper started its big dump in January this year, so I'm no great gauge of the company
by straight definition) has done well these last few weeks since announcing and closing its
previously delayed financing deal to expand operations. ARG is up nicely in 2015, rare indeed
among producer stocks, which deserves a lump of praise in its direction. Though we also need
to point out this weekend a significant insider sale that was filed last week:
Company director and close ally of ARG main man Zeitler, Steven Dean, sold 615,000 of his
ARG shares at 36c. He still owns 2.56m shares (13) so context is necessary, but that's the type
of chunk disposal we need at least to record on these pages.
The Low Cost Producer Basket
After 15 weeks, the 2015 Low Cost Producer Basket is showing a 4.91% gain to level stakes.
company ticker price 1/1/15 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Goldcorp GG 18.52 812 15.67 19.30 4.2%
2 Barrick ABX 10.75 1164.67 14.77 12.68 18.0%
3 Newmont NEM 18.90 499 11.14 22.33 18.1%
4 Franco Nevada FNV 49.19 156.08 7.75 49.63 0.9%
5 Silver Wheaton SLW 20.33 357.39 7.00 19.59 -3.6%
6 Agnico Eagle AEM 24.89 173.43 5.15 29.70 19.3%
7 Buenaventura BVN 9.56 254.19 2.75 10.82 13.2%
8 Kinross KGC 2.82 1114.5 2.57 2.31 -18.1%
9 B2Gold BTG 1.62 948.9 1.46 1.54 -4.9%
10 Pan American PAAS 9.20 151.41 1.42 9.39 2.1%
all prices in U$, using NYSE ticker prices Portfolio avg 4.91%
17

The basket average improved again last week, up by a decent 2.08% thanks to seven winners
(GG, ABX, FNV, SLW, BVN, PAAS, BTG)
and three very small losers (NEM, AEM,
KGC). In fact most of the moves were
smallish, with the only outlier being the
6.7% upmove made by Barrick (ABX)
that continues on its rebound. Mr.
Thornton will be pleased.
The gap GDX and our basket is now
0.91% to the advantage of the
benchmark ETF, that's because it has
more weighting to ABX than our flat
index. Probably.
Low Cost Basket: Percentage difference between
basket and GDX control, 2014
1.5%
1.0%
0.5%
0.0%
-0.5%
-1.0%
-1.5%
-2.0%
-2.5%
-3.0%
18
ts13ceD ht11 ht52 ht8 dr42 ht8 dr32 ht5rpa
The Low Cost Producer Basket: Weekly performance
and comparative to GDX control
25%
20%
15%
10%
5%
0%
-5%
|
source: ikn calcs, NYSE/Nasdaq data
Buenaventura (BVN): The 1q15 production numbers out of BVN last Friday morning (14)
showed lower than expected production from its El Brocal mine and then most of the other
wholly-owned divisions coming in as expected. But the line item that grabbed the headlines was
the strong 248,055 oz produced at Yanacocha, which puts South America's single largest gold
mining operation on a pro-rata rate of nearly a million ounces for 2015 when the upper end of
guidance is 940k. Of those ounces producedd in 1q15, 108,276 belong to BVN.
ts13ceD ht4naj ht11 ht81 ht52 ts1bef ht8 ht51 dr42 ts1ram ht8 ht51 dr32 ht92 ht5rpa ht21
basket
gdx control
source: Google Finance, IKN calcs

The overall effect of the Yanacocha number more than outweighed the disappointing El Brocal
quarter and BVN beat out the sector by around 2% in Friday trading.
At its current sub-U$11 price BVN looks cheap for those of you who can take the patient and
longer-term view. My issue with the company is that it's likely to be one of the last to rally due
to the lack of any sort of M&A premium potential (the Benavides family have the company on
ownership lockdown thanks to its Class A share holdings) plus it's still going through an
investment cycle (Cerro Verde, San Gabriel) that means dividends aren't top priority. Yes it has
fundies value, but it doesn't have any momentum yet. In my bones I feel it's a potentially better
option in 2016. Still there are a lot worse out there, I wouldn't put you off owning it.
Regional politics
Mexico: Guerrero political risk is coming to Canada
A delegation of parents and family members of some of the 43 students who were infamously
disappeared (presumed dead) in Guerrero last year are in Canada between today April 12th and
May 2nd in order to attend diverse meetings and events (15). According to their communique,
the delegation is scheduled to meet with politicians in BC, Quebec and Ontario to highlight the
human rights crisis currently in Guerrero State. On April 28th the delegation is due to testify to
the Human Rights sub-committee of the Canadian parliament in Ottawa.
Peru: Miners' strike May 18th
A strike has been called by Peru's main mining union, due to start on May 18th (16) and carry
on indefinitely. The strike is over pay and conditions with the union representatives saying that
they're fed up with the broken promises of employers, bad salaries and precarious job security,
particularly for those brought in under third party contractor deals. Normal stuff.
Under standard circumstances a miners' strike in Peru is more noise than effect, because of the
fractured nature of union membership in the country and the laws that give employers plenty of
opportunity to sack strikers if they stay out for too long and allowing them to bring in non-
unionized replacements. But this strike may be different, due to the current weak position of
the Humala government and the potential that it's used or even encouraged by government
opposition parties. Bottom line; this may turn into "a thing" and it's going to be worth keeping
an eye on the development of this story in the next five weeks leading up to the strike date.
Guatemala: Anti-mining activist killed near Tahoe Resources (THO.to) (TAHO) mine
We know three things for certain:
• Telésforo Odilio Pivaral González, was a 33 year old farmer, married with six
children and lived near the Tahoe Resources (TAHO) (THO.to) Escobal mine in
19

Guatemala.
• Sr. Pivaral opposed the presence of TAHO at Escobal and was a member of the
local anti-mining activists association.
• On Sunday April 5th Sr Pivaral was shot five times and killed instantly while
waiting for a bus at the side of the local road by what seems to be a drive-by
shooting method by hired assassins.
The incident has been given plenty of local media coverage in Guatemala, with the Guatemala
anti-mine pressure group CALAS weighing in with its opinions and the local branch of Oxfam
(which has traditionally opposed mining developments in Central America) also vociferous.
Although these and other professional-level organizations have been careful to stop short of
accusing TAHO of any wrongdoing, the implications and invitations by them to join the dots all
by ourselves has been crystal clear. The unfortunate incident has also already made it to the
more reactionary end of the English language blogosphere (17) where the accusations are far
less guarded, as you might imagine. However, the incident is real news now because of the
action of Unions and civil rights bodies. Here for example (18) is an official communique from
one of Guatemala's biggets union bodies, pretty typical of the genre. Here's how it starts
(translated):
Syndicated Union of Workers of Historic Guatemala (UNSITRAGUA) (Union
Sindical de Trabajadores de Guatemala (UNSITRAGUA) Histórica)
Statement of concern regarding the assassination of Señor Telésforo Pivaral
González
City of Guatemala, 8 April 2015
The undersigned members of "The Campaign To Defend Life is a Right: We Are
Defenders", supported by the United Nations High Commission for Human Rights
(OACNUDH) in Guatemala, manifest our deep concern regarding the assassination of
Señor Telésforo Odilio Pivaral González, a 33 year old farmer and active member of
the Committee in Defence of Life and Peace of San Rafael Las Flores, Santa Rosa.
Sr. Telésforo Pivaral was assassinated last Sunday April 5th, on a rural road near the
village of Las Nueces, municipality of San Rafael Las Flores, Santa Rosa, leaving
orphaned six children between the ages of 1 and 11.
The communique then continues, listing his activities as part of the anti-mining organization
and then requesting a full inquiry and the apprehension of his killers, all in fairly standard style.
However, this is the type of national level news release from a serious and formal union body
that gets traction in Guatemala and then internationally, so this death isn't going to go away
without a full investigation and hopefully arrests and eventual convictions.
The job here was to get both sides of the story and who better than the brand new CEO of
Tahoe Resources, Mr Alex Black, erstwhile CEO of Rio Alto? I shot CEO Black a mail on Saturday
morning and he replied with this (and this is the whole mail, minus the signature line). I then
asked him if I could quote his mail and he said yes, so here it is:
Something I am coming to grips with is the high crime and murder rate in Guatemala from a
global comparative perspective. The prevalence of people carrying firearms in the streets is a
worry, that’s for sure.
Its unfortunate that an event like this took place in a village near to the mine and I anticipate and
hope that the local authorities and police investigate the matter and can determine who was
responsible for the murder.
Tahoe has planned to conduct exploration on its leases around the town of San Rafael and
working with locals in gaining surface access to the exploration areas. It has already started
exploration activities on those leases it has been able to gain surface access to.
Tahoe’s community relations program and dialogue with local land owners is not unlike our
activities at La Arena and Shahuindo and carried out to the highest CSR standards. Once access
to surface lands is negotiated, work can begin. Its a process which we are familiar with and
something that takes time and patience as you well know. Given the fact that the Escobal Mine
20

has a current 20 year mine life, Tahoe certainly has the time and patience to negotiate with local
landowners to gain access to surface lands to carry out its exploration programs around the mine.
And that's fair enough.
Discussion: This is the type of situation that I now avoid by my decision to depart from Rio Alto
(aka RioTahoe aka Tahoe). The chances of Tahoe Resources being responsible for the death of
Sr. Pivaral, be it directly or indirectly, are somewhere between slim and none. Very slim and none. But
that's not going to stop those against the mine and those that benefit from being against the mine from
doing their preferred calculation...
Anti mine activist + death of anti mine activist = The mine killed him
...no matter that his murder could have been for any number of other motives. That's because
the other motives have no cui bono attached, no other assumption helps their cause, no other
is in the slightest bit controversial.
Let's be clear, I'm not in the process of sticking up for Tahoe Resources here, I'm neutral the
stock, period. I'm also on record dozens of times as saying that Guatemala is not and never will
be an easy place to do mining business. It's almost certain that the accusations being thrown
the way of TAHO over this episode aren't "fair", but when has that ever mattered? If you're
long this stock (and I know many of you are, if only for the fact that you've decided to run with
the merged company) you're invested in a company headed up by a top class CEO and person
in Alex Black so you can reasonably wager on truth winning out in the end. But this isn't the
first time and it won't be the last time that TAHO gets political and community protests against
its presence in Guatemala, so if you're staying long get used to that idea. Plus of course,
remember that 2015 is a Presidential election year in Guatemala (yeah, guilty, I've mentioned
that one a dozen times too), so expect a turbulent time between now and September 13th.
A report on mining in Burkina Faso
I've kept an eye on the developments in Burkina Faso, mostly because of True Gold (TGM.v)
and the potential that it gets back on track and re-starts its Karma project, which could provide
a decent win if we're on before others. There was an interesting Bloomberg report last week
(19) on the country, which talked of how mining was corrupt and under government crony
control in the Blaise Campaore presidential period, but now he's been thrown out the sector is
facing opposition from people who wouldn't have dared to stand up to the miners previously.
The Bloomie report isn't easy to excerpt because it's long and makes several interesting point
(yes, it's a good article) but the main takeaway for me is that miners are going to have to clean
up their act and leave more of their revenue inside the country, either that or pack up and go
home now. Worth a read, on that link.
The Chile weather report
The worst of the very unusual weather in the North of Chile has now subsided, glad to say.
What we're now getting are more complete damage reports and the bets I've seen is this very
extensive catalogue of events (20) that came out last week, basing most of its data on official
Sernageomin (National Geology and Mining Service, or Servicio Nacional de Geología y Minería),
the government National Emergency Office (Onemi) and official government "Legal Medical
Service" bulletins. Here's a bulllet point list of the most relevant points (so that you don't have
to read a 3,000 word Spanish article too):
• 26 people dead
• 29,741 people affected by flooding
• 2,527 homeless people currently in allocated accomodation
• 2,071 homes destroyed
• 6,254 homes with severe damage
When it comes to the many mining operations in the North Chile region, the three main
concerns have been 1) tailings dam damage and possible failures 2) production stoppages 3)
21

road infrastructure damage cutting off mines from the outside world.
• As regards tailings facilities, the good news is that no critical damage has been reported at
any working mine and that so far at least, historic tailings facilities at now closed mines
have shown no failures.
• As regards production interruptions, there have been many. The report goes on to
catalogue just about every large scale working mine and its situation and I'm not going to
bore you with that, but the upshot is that there are plenty of operations that have suffered
temporary stoppages but none are reported to be in bad shape in the long term. Chile fully
expects its production levels to return to normal this month.
• As regards infrastructure damage there have been plenty of washed away roads,
particularly in the Atacama sub-region where a lot of the connecting roads are of the
firmed dirt or dirt track variety. Those will stop things flowing for a while, but they're not
difficult to get back into working order.
The bottom line to the rains in North Chile is that assuming we don't get another bout of bad
weather (and the way this Niño year is shaping up, that's not impossible) Chile's production will
bounce back quickly enough. Anyone basing an investment decision on copper using the Chile
supply crimp as their argument is probably making a mistake.
Market Watching
McEwen Mining (MUX) (MUX.to) shoots itself in the foot
An eventful week for MUX, by no means all bad but style overtook substance and as a result,
the share price took a hit. The three items for your consideration, in chronological order:
A) The central event, the armed robbery of around 7,000 oz of gold in
concentrate from the El Gallo I mine in Mexico.
B) Subsequently, the MUX disclosure of its 1q15 production from El Gallo I
and its projection for 2q15
C) Finally, the appearance of Rob McEwen on Canada's BNN biz TV show
which made things worse rather than better.
I'm going to take parts A) and C) separately, as they're the negatives. Then we'll consider the
positives from part B) afterwards.
The issue faced by MUX last week was a robbery at its El Gallo I mine in Mexico. As disclosed
by the company some 7,000 oz of gold in concentrate was stolen by an armed gang who raided
the mine, with the theft having plenty of hallmarks of insider help in some way or form. The
disclosure at MUX was exemplary at first, the company taking the lead and telling the world
about its internal problem before it started leaking from other sources. That's the right way and
as noted on the blog (21), a better path than that taken by Pan American Silver (PAA.to)
(PAAS) or SilverCrest (SVL.to) (SVLC) in similar incidents at their respective operations in
Mexico.
But then it all got more complicated due to the loose lips of the MUX head man, Rob McEwen.
The problem isn't that Rob McEwen is a bad miner, the problem is that he put his foot firmly in
his mouth during an interview (22) with Andrew Bell of Canada's business TV channel BNN, the
comments being quickly picked up by Mexican Spanish language media (examples here (23),
here (24) and here (25), plenty of other to choose from, trust me on that). Plus AP EngLang
quickly picked up on the story (26):
CULIACAN, Mexico (AP) -- The director of the mining company robbed of $8.5 million in gold in
Mexico made the rare revelation in a television interview that his company has a "good
relationship" with area drug traffickers.
22

Here's the segment that's caused all the ruffles in Spanish language media (your author's
transcript):
Andrew Bell: "Is it a dangerous part of Mexico where you are?"
Rob McEwen: "It hasn't been, I mean the cartels are active down there.
Generally we've had a good relationship with them! If you want to go towards
somewhere you ask them and they tell you, "No", but then they'll say, "come
back in a couple of weeks when we've finished what we're doing..."
AB: "What are they doing, transporting drugs or something?"
RM: "Oh they might be harvesting them!"
So let's make something clear: It's a matter of practical survival in rural areas where exploration
mining happens, places which are long distances from the larger towns and cities and in the
course of growing Mexico's more expensive cash crops, that you need to tip your to the people
who travel around with AK-47s on the passenger seats of their 4x4s. You keep on the right side
of the narcos, you do NOT annoy these people, period. So yes, for sure this isn't the first time
I've heard similar anecdotes from mining companies working in Mexico, particularly the small
exploreco companies.
But you may as well tattoo "I Want Trouble For My Gold Mining Operation" on your forehead in
large black letters if you go on national TV (which these days is automatically international and
quickly translated into several languages) and talk about your "good relationship" with the
gangs of narcos in Mexico. I really don't know what was going through McEwen's head there
and whether he's that naive all the time, but WTF WAS THAT?
The result is that while the GDXJ rallied by around 2.5% on Friday MUX dropped by around 2%
and frankly, I think they were lucky to get away with as little as that.
The silver lining: El Gallo 1 production going well
Thanks (if that's the word) to the robbery, we were given a production update from MUX on
Wednesday (27) as part of its charm offensive and the 1q15 numbers form the unfortunate El
Gallo 1 and no bones about it, they were good. As guidance was for 50k oz Au (plus the minor
silver kicker) in 2015, hearing that they'd produced 15,243oz in 1q15 and were expecting 14k in
2q15, that aside from the stolen ounces, means the mine is running well above schedule. In our
original estimates we used a flast 12,500oz per quarter guidance and expected some
improvement on that, but MUX is doing even better than I's quietly hoped for.
Tonnages mined were back lower in 1q15, which points to lower costs.
23

MUX: El Gallo 1 tonnage mined
600
500
400
300
200
100
0
24
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2 tse51q3 tse51q4
000s mt
source: company filings, IKN ests for 2015
We'd estimated an average head grade of 2.6 g/t Au, which was on the conservative side. The
reported 2.71 g/t Au grade was right on the company guidance for the year.
MUX: Average gold head grade, per quarter
3
2.5
2
1.5
1
0.5
0
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2
g/t Au
source: company filings and guidance for 2015
The resulting gold production looks like this, a new record quarter and there's the MUX-guided
14k for 2q15 next to it too.
MUX: El Gallo 1, gold production per quarter
18
16
14
12
10
8
6
4
2
0
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2
Koz Au
source: company filings, MUX ests
If we then assume a reasonable U$1,200/oz average gold price for 1q15, we can expect U$15m
in revenues from the part of MUX.

MUX: El Gallo 1 revenue breakdown
20
18
16
14
12
10
8
6
4
2
0
25
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1
U$m
Ag calc revs ($m)
Au calc revs ($m)
source: company filings, IKN calcs
As for costs, here's our reasonable/conservative estimates on what we can expect. Even if that
U$9.4m all-in costs estimate is out, the improvement in revenues means there's a lot of room
for this mine to remain firmly profitable
MUX: Sales versus cash costs
(total and all-in cash costs included)
16
14
12
10
8
6
4
2
0
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1
U$m
reported sales
tot cash cost
All-In cash cost
source: company filings, IKN calcs
It will of course depend on the production and financial results from the 49% owned San José
gold/silver mine in Argentina as to whether MUX manages to post a profit this quarter and
that's going to be in the hands of JV partner and operator Hochschild (HOC.L) and the way it
books its financials. We should also be clear on the way the Q1 periods tend to be the weakest
for the San José mine, what with Argentina taking its summer vacation break that period and
production tending to be lower than the annual average. But we can at least say that MUX via
its own wholly owned ops is doing its best to become a profitable company this year and the
turnaround story we've been betting on since taking a position in MUX is happening the way it
was expected.
Bottom line: Robberies from precious metals mining company operations happen, an
unpleasant fact of life. They happen in Mexico, in Brazil (Troy Resource in Andorinhas in 2012
comes to mind), elsewhere and will continue to happen. If your mine security doesn't have best
practices it makes you more vulnerable and that seems to be the case at MUX El Gallo I, but
you then beef up security and make sure it doesn't happen again. You also make sure you're
fully covered by your insurance policy and you pay the extra premiums. But you do not profess
"good relationships" with narcotraffickers, my stars! This also reminds me why I don't rush into
calling 'Top Pick' on companies. They can look great on paper but it takes time to get fully
comfortable with a junior mining company. The Rio Altos of this world are exceptions, not rules.
I'm okay about holding MUX for the moment and the indications form its ops and financials is

that the company's on track with its revised plans. That's good. But confidence has been
knocked by last weeks events, not least the way in which the company's CEO went about the
PR exercise, and if the Gallo I mine were to suffer the same sort of robbery a second time, I'd
be out of the position immediately.
Soltoro (SOL.v): More evidence the majors are grabbing land
The deal announced Friday that has Agnico Eagle (AEM) buying out Soltoro (SOL.v) at a ticket
price of 32.5c/share (AEM shares plus a
penny in cash plus a sinco worth 2c/share
according to the two sides) is all about land
position.
Here's the NR (28) and here's the part of the
NR which explains just why AEM wants the
deal
. As a result of the transaction, Agnico
Eagle will acquire the El Rayo, El
Tecolote, La Tortuga, San Pedro and
Quila exploration projects held by Soltoro
in the state of Jalisco,
So AEM makes a move on a exploreco that I
don't own, fair enough and good luck to others. but the signal is right for the general strategy
we're now running at The IKN Weekly and fits into what we (and others) expect from 2015.
Why I'm no longer interested in First Mining Finance Corp (FF.v)
As noted in IKN308 we expected First Mining Finance (FF.v) to make its market debut on the
TSXV last week and indeed it did, opening for business first thing Monday morning. It traded
from higher to lower during the week (29) as
this chart shows (that doesn't have its Monday
action included) and closed at 43c, which was
fairly healthy considering the insiders and
seed share holders all got in at 40c.
It also got some heavy pumping from the
promo team that runs a website and stock
pick service called "Future Money Trends" run
by one Daniel Ameduri (30) which caters for
the hardcore goldbug community (and that's
putting it very nicely). You can see the mailer
that went out on Monday morning here (31)
(I'm pretty sure that link will work), which
includes such breathless prose such as:
After speaking with Keith Neumeyer about the company, I could barely
get any sleep, because I knew I had to get this information to my
members as soon as possible.
...and...
What I am about to tell you is completely unknown to the investment
community, i.e. brokers, analysts, bloggers and other newsletters.
You're getting this alert before even their own investor relations
representative has had a chance to market the company.
...which of course isn't totally true. But hey, nitpicking. As you'll see if you check out that link, it
uses all the typical tried-and-tested promo marketing language, visual gimmicks and techniques
to get the juices in punters' greed glands flowing. But check out the smallprint and it becomes
clear as to why Mr Ameduri is so keen on FF.v:
26

"We have been compensated by First Mining Finance thirty thousand dollars,
one hundred thousand options, and eleven payments of seven thousand each
over the next year for our promotional pieces, online ads, and other digital
marketing."
Which is also rather typical for this type of heavy sell promo. And as a highly experienced
professional in the mining sector (who will remain nameless) pointed out on reading the Future
Money Trends promo article on Monday, promotion is the key for this type of company because
its expansion and its ability to add more properties to the stable will depend completely upon
the attractiveness of its stock. FF.v will need to expand using all-paper deals and the right type
of virtuous circle is only formed when that equity becomes increasingly attractive to people who
would be willing to swap their land asset for those shares. However, if a vicious circle begins
and the stock starts on a course of chronic loss of value, well...it doesn't need me to point to
the obvious risk of owning shares in the vehicle. So with all that in place, I have three things to
say about this company :
1) If this is the way FF.v spends all its money, not just its discretionary G&A, I want no
part of it. They may want to represent themselves as a serious alternative but they
come across as just one more pump and dump story.
2) If Keith Neumeyer thinks paid promos to rah-rah goldbug websites is the way to
conduct a marketing campaign, he's stuck in the 1990's.
3) This leaves me more inclined to avoid FF.v and sell my First Majestic (FR.to), rather
than exposure myself further to this dumb way with money.
Not the kind of start to its corporate life I was expecting from FF.v. It's for somebody else.
Conclusion
IKN309 is done, we end with bullet points:
• Lake Shore Gold (LSG.to) has knocked down just about every objection I'd raised to
owning it over the last three quarters and I'm now a happy long in the stock. It's done
nothing but improve in 2014 and 2015, my excuses have run out. If gold does what I
expect it to do in the medium-term, LSG is positioned to benefit greatly from the
improvement in the sector. Add in that it's an obvious buyout candidate (GG must be
looking) and it's the new long at last week's entry point which may not have been the
knockdown bargain for which I was fishing, but it's still a good place to start.
• The position in Regulus (REG.v) is now up and running, though I stress once again that
there's no reason at all to chase this stock and bid it up during 2015. This year we're
looking for community agreement and/or land purchase/access deals, the type of thing
that gets attention from the industry but tends not to move markets. If the drills turn in
2016 and cut good rock, then the game begins.
• I may buy some Western Copper & Gold (WRN.to) at this 55c level, but be clear it's a
chart set-up trade only. It'll also be small and it's not one I'll put on the 'Stocks to
Follow' list as an open position, either. While we're at it (and in very much the same
vein), every two or three months I'll go to the casino and play blackjack, perhaps a little
roulette. But I take the equivalent of U$150 in with me and if it goes, I walk.
I thank you in advance for any feedback. Flash updates will be sent if required by events.
I wish you good trading fortune, ladies and gentlemen.
Otto
27

Footnotes, appendices, references, disclaimer
(1) http://oupacademic.tumblr.com/post/48310773463/misquotation-reports-of-my-death-have-been
(2) http://finance.yahoo.com/news/lake-shore-gold-triples-minimum-183416845.html
(3) http://finance.yahoo.com/news/lake-shore-gold-identifies-thick-191109544.html
(4) http://media3.marketwire.com/docs/Figure%203.%203D%20Visual%20144%20Gap%20Zone.pdf
(5) http://www.lsgold.com/files/doc_presentations/LSG2014Q4conferenceCall.pdf
(6) http://finance.yahoo.com/news/lake-shore-gold-reports-record-100000515.html
(7) http://finance.yahoo.com/news/first-majestic-announces-acquisition-shares-110000072.html
(8) http://finance.yahoo.com/news/first-majestic-announces-promotion-martin-170000714.html
(9) http://www.firstmajestic.com/s/NewsReleases.asp?ReportID=702741&_Type=News-Releases&_Title=First-Majestic-
Silver-Corp.-Announces-C30-Million-Bought-Deal-Financing
(10) http://incakolanews.blogspot.com/2015/04/first-majestic-frto-ag-runs-bought-deal.html
(11) http://www.focusventuresltd.com/s/NewsReleases.asp?ReportID=703290&_Type=News-Releases&_Title=Focus-
Proposes-CAD3.0-Million-Private-Placement
(12) http://finance.yahoo.com/news/panoro-reports-positive-preliminary-economic-143254645.html
(13) https://www.canadianinsider.com/node/7?menu_tickersearch=ARG+%7C+Amerigo+Resources
28

(14) http://www.sec.gov/Archives/edgar/data/1013131/000114420415022160/v407060_ex99-1.htm
(15) http://diario.mx/Nacional/2015-04-11_6a5b52d8/recorreran-canada-padres-de-normalistas&ref=1/
(16) http://www.eleconomistaamerica.pe/economia-eAm-peru/noticias/6621771/04/15/Peru-El-mayor-gremio-minero-de-
Peru-aprueba-una-huelga-indefinida-desde-el-18-de-mayo.html#.Kku8tTwy7bPCSMf
(17) http://www.frontlinedefenders.org/node/28466
(18) http://www.rebanadasderealidad.com.ar/unsitragua-h-15-03.htm
(19) http://www.bloomberg.com/news/articles/2015-04-08/revolt-rocks-burkina-faso-s-mines-after-president-compaore-
flees
(20) http://www.aminera.com/index.php/mineria-nacional/item/10734-las-mineras-soportaron-el-
chaparr%C3%B3n.html?utm_source=base+aminera+1&utm_campaign=fbb52ecbe3-
NEWS_YA_APARECIO_AM98_10_ABRIL_20154_10_2015&utm_medium=email&utm_term=0_5c47015713-
fbb52ecbe3-158154473
(21) http://incakolanews.blogspot.com/2015/04/mexico-mine-bullion-robberies.html
(22) http://incakolanews.blogspot.com/2015/04/rob-mcewen-laughs-it-off.html
(23) http://www.am.com.mx/leon/mexico/solicitan-mineras-permiso-a-mafiosos-193871.html
(24) http://www.cnnexpansion.com/negocios/2015/04/10/minera-canadiense-pide-permiso-a-carteles-para-explorar
(25) http://mexico.servidornoticias.com/23_mexico/3044862_minera-canadiense-robada-en-mexico-reconoce-buena-
relacion-con-carteles.html
(26) http://finance.yahoo.com/news/mining-co-mexico-good-relationship-174741059.html
(27) http://finance.yahoo.com/news/robbery-mcewen-mining-maintains-production-224206765.html
(28) http://soltoro.mwnewsroom.com/Files/30/309591ad-e5d7-4f64-b4b6-4ffa22234fc5.pdf
(29) http://finance.yahoo.com/echarts?s=FF.V+Interactive#
(30) http://www.futuremoneytrends.com/
(31) http://us3.campaign-archive2.com/?u=a761d26d77d6eef6d0000f00c&id=af9217b5db&e=b636b26454
Appendix 1: Flash update dated Tuesay April 7th 2015
Good Tuesday morning, not yet 7am local time, almost two hours before the open.
Buying Lake Shore Gold (LSG.to)
Its $1.01 close yesterday had me tempted over overnight, but the 1q15 production numbers out this morning...
http://finance.yahoo.com/news/lake-shore-gold-reports-record-100000515.html
...have decided the issue once and for all. This stock is now an obvious buy and I'm opening my position today.
Production of 53k oz in 1q15 was a new company record quarter and according to my spreadsheet, sales are set for
$79.1m. With tonnage throughput slightly lower than 4q14, we can expect costs to remain under control. Our estimates
are for operating earnings around 6c/share and net earnings a reasonable guess of 4c/share. LSG also reports
collecting cash on the balance sheet, a very good sign.
The only issue is with average head grade, which at 5.7 g/t in 1q15 is too high to sustain. But at this point it's a detail, I
will pay up and buy today, LSG.to is headed for $1.50 share price in the near future.
As is often the case, it's taken some hard fundies evidence to get me out of whuss mode and take action. LSG is a
quality gold producing junior and it's getting better all the time.
Other news
A quick confirmation that as of yesterday Monday I'm no longer a shareholder of Rio Alto (RIO.to), having taken the
$3.60 offered.
Enjoy your Tuesday.
29

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
30

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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