IKN #310Premium

The IKN Weekly
Week 310, April 19th 2015
Contents
This Week: Buying Timmins Gold (TMM.to) (TGD), The law of diminishing returns, LatAm
junior mining newsletters edition.
Fundamental Analysis: Timmins Gold (TGD) (TMM.to): Cheap enough to buy.
Stocks to Follow: Overview, B2Gold (BTG) (BTO.to), Focus Ventures (FCV.v), Lara
Exploration (LRA.v), Legend Gold (LGN.v), Regulus Resources (REG.v), Starcore Intl (SAM.to),
Lake Shore Gold (LSG.to).
Copper Basket: Overview, Western Copper & Gold (WRN.to), Metminco (MNC.ax), Amerigo
Resources (ARG.to).
Low Cost Producer Basket: Overview.
Regional Politics: Argentina: Daniel Scioli now favourite for next President, Mexico:
Michoacán captures mining extortionists, Peru: The Tia Maria conflict now getting bogged down
in classic style, Argentina: Pan American Silver (PAAS) (PAA.to) to promote mining in Chubut.
Colombia: The Government/FARC-EP peace talks may be unravelling.
Market Watching: The full McEwen Mining (MUX.to) (MUX) 1q15 production numbers, Nickel
prices, Belo Sun (BSX.to): Local issues again, Better things to say about 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
Buying Timmins Gold (TMM.to) (TGD)
As explained in 'Fundamentals...' today, I'm going to buy Timmins Gold (TMM.to) (TGD) as a
near-term trade. This isn't a massive seal of approval for the stock, it's a case of timing and
relative value in a beaten down name that I believe is about to put in a decent rebound. In a
perfect world I'll be in and out of this trade in two months or less. Full explanation below.
The law of diminishing returns, LatAm junior mining newsletters edition
Back in 2009 (to take a year by random), IKN (both blog and Weekly) enjoyed a large and easy
advantage in Latin American newsflow; back in those heady days it sufficed to read the regional
business press in Spanish (and Portuguese), translate then use or publish items discovered
items of information and hold an advantage of hours, even days sometimes, in the sector's
discovery process. It was a classic example of low-hanging fruit and all you needed to do was
to be interested in mining and speak a couple of languages. In fact for a long time I found it
bizarre to see how ahead I was of the Northern mining newsflow sometimes and it wasn't a
case of doing anything special either. Cut to 2015 and that advantage has whittled down to
near-zero and as far as I can make out, here's what's changed:
More mining sector professionals speak Spanish (and/or Portuguese). For
sure it's always been true that mining people who work LatAm have had the lingo, but
these days there are more and more brokerage people with the necessary language
skills.
1

Business wires are smarter about what's market-moving news. Services such
as AP, Reuters, Bloomberg etc have always had polyglot reporters covering the regional
financials, but they previosuly ignored or let slip stories that might not seem to them to
be important, but for somebody more attuned to the world of mining were obviously
big news events for company XYZ. The archetypical would be a community protest
against a project that looked small potatoes next to the type of large manifestations
against governments that are typical here but would ultimately have more effect.
Brokerages digging deeper. The vacuum has also been filled by good old fashioned
capitalist innovation, as brokerage houses in Canada seek to gain advantage over rivals
and look to improve their service to clients. Five years ago I read morning mailers to
clients from one or two houses, these days they all have their version of a pre-open
mailer and most have a section on LatAm mining events. Politics is watched carefully
these days, as well as community-related news and developments. Brokers are savvier
about search engines, companies look to employ bilingual people, it all adds up.
Better judges of events. This final category is perhaps the most important. Forgive
the use of crass pigeonholing, but there are cultural difference between Anglosaxon
North and Latino South that confuse and obfuscate; one of those is seeing when
something is relatively important to one set of people when it might be considered
trivial by another's mindset. I've watched over the years as judgement on events in
LatAm has become better tuned towards the people down this end, with smarter use of
empathy by thoose "up there" watching things going on "down here".
To cut a long story short, I've seen my big edge whittled away over the years and it's now to
the point where I read and watch the English language publications for news on LatAm mining,
because they'll regularly put an event or happening in front of my eyes before the Spanish (or
Portuguese) news media does. On a myopic level I could take this as a bad thing, but it's really
not. I like the fact I'm losing the low-hanging fruit advantage because that's what's supposed to
happen in a healthy marketplace, it's the type of thing that capitalism does best. The people
who most benefit are you out there, those who pay good money for information in order to
make good and informed money decisions.
Fundamental Analysis of Mining Stocks
Timmins Gold (TGD) (TMM.to): Cheap enough to buy
Let's start with the annoying smart-ass bragging part: The sell-off in Timmins Gold (TMM.to)
(TGD) was fully expected by your
author. The February 17th decision by
the company to spend a ticket price of
$140m via an all-share deal for
Newstrike (NES.v) and its Ana Paula
property in (whisper it quietly) Guerrero
State in (say it loudly) the mining-
friendly country of Mexico first sank
TMM.to's share price down to the level
of the underperforming NES.v, and
then saw both stocks sink as one. This
2015 year-to-date chart has the visual
on that:
Since the deal NES.v is down from
$1.00 to $0.65 (-35%) despite the company being given a "value" (oh that word again) of
$1.15 by TMM during the announcement of the friendly take-over (1), not the sort of reaction
2

that shareholders of the target company would normally expect. As for TMM.to it's down from
$1.28 to 73c, a drop of 42.6% since the merger announcement. In the same period of time
gold is down 2.0% and the junior mining ETF GDXJ (seen on the chart above), a benchmark
that TMM.to previously tracked fairly closely, has dropped by 8.8%. Any way you look at this,
it's been an awfully bad executive decision by TMM.to to buy this property.
Along with the recent mediocre 1q15 production numbers from Timmins Gold, the stock is now
a mile off from where it stood at the beginning of the year and even further down from the
near $2 levels we saw in 2014. At this point and although never made official or even
acknowledged by either company, I'd like to reiterate how dumb, entrenched and shareholder-
unfriendly this TMM is by reminding you that Argonaut Gold (AR.to) was close to a deal to buy
out TMM last year at a price that would have happened (mostly all-share, so nominal ticket
value) at over $2.
However, what this very sharp sell-off may offer is a decent buying opportunity in a TMM.to
which is by no means the best thing out there, but now finally shows the symptoms of being
oversold and ready for a rebound. Value is, after all, merely a function of price. I'd like to start
with an overview of relative valuations in the sector and to do this, I'm going to compare the
current market caps and book values (book value defined as total assets minus total liabilities)
of ten precious metals junior mining producers. I've chosen them fairly carefully to give a
representative bunch of what there is in the sector as well as being useful and near-like-for-like
comparatives to TMM.to as well.
But first a little about TMM.to today (what follows is in Canadian dollars) as its in-merger status
means the company's financial are in a state of flux. The first job is to consider "New Timmins"
as our entity so assuming the NES deal goes through (and chances are that it will, there's little
in the way of dissention on the horizon and the April 29th AGM/EGM at Timmins is now looming
large), the pro-forma of "New Timmins" assumes a count of 289m S/O. It's also fair to say that
the market is now baking in the new share structure to the price of TMM's shares, so here's
how that pro-forma looks as a new overall share structure, using our normal top box:
Shares out: 289m
Options: 12.9m
Warrants: Zero
Fully diluted shares: 302m
Current share price: CAD$0.73
Market Cap: CAD$211m
Approx working cap per S/O: 15c
All prices are in Canadian dollars unless stated. Forex U$0.80=CAD$1
Before we continue and look at comparative asset valuations of peer companies, it's worth
noting that on the eve of the deal TMM.to ran a $230.2m market cap and proposed paying a
nominal $140m for NES.v. Today, with the pro-forma market cap at $211m the whole of the
supposed value of the Ana Paula property has somehow mysteriously disappeared, and more
besides. Even for a proparty and a project I don't like, that's more than a little weird and
smacks hard of a sell-off that's gone too far.
So now to a peer valuations study, in which I've chosen the stocks you see in the table below.
First you get the calculation, then below the table a chart that sets out the Price to Book Value
(P/BV) ratios of our ten players. After that, we discuss each case individually because there's
always more than meets the eye to this type of raw data; these studies should be a starting
point for DD, not a lockdown conclusion.
NB: Please note that all table calculations are done in US Dollars, expect for RIC.to and
LSG.to. As those two companies report in Canadian Dollars, all calculations are left in that
currency for those two. In the case of all others, as they report in US Dollars either the US
3

ticker is chosen or the Loonie share price is converted into USD (at 0.8/1) before numbers are
crunched. In this way, we get a reasonable currency benchmark for our ten companies.
Price/Book ratio calculation on a selection of junior PM producers
Company shares out (m) pps market cap total assets total liabilities book value Price/Book ratio
GORO (US) 54.1 3.44 186.10 111.7 21.6 90.1 2.07
RIC (CAD) 57.9 3.69 213.65 148.77 40.81 107.96 1.98
FSM (US) 128.5 3.41 438.19 350.31 77.6 272.71 1.61
LSG (CAD) 435.6 1.12 487.87 633 141.2 491.8 0.99
BTG (US) 917.65 1.56 1431.53 2118.5 593.26 1525.24 0.94
MUX (US) 300.1 0.984 295.30 524 80 444 0.67
Pro-forma Timmins (US) 289 0.6 173.40 447 101 346 0.50
EDV (US) 412.49 0.5 206.25 963.9 520.5 443.4 0.47
TGZ (US) 353 0.51 180.03 730 199 531 0.34
AR (US) 154.45 1.64 253.30 906.6 120.3 786.3 0.32
source: company filings, IKN ests, IKN calcs
And here's the easier on the eye chart visual of the above numbercrunch:
Price/Book ratio of a selection of junior PM producers
P/BV
2.50
2.07
1.98
2.00
1.61
1.50
0.99 0.94
1.00
0.67
0.50 0.47
0.50 0.34 0.32
0.00
GORO RIC FSM LSG BTG MUX Pro- EDV TGZ AR (US)
(US) (CAD) (US) (CAD) (US) (US) forma (US) (US)
Timmins
source: company filings, IKN ests, IKN calcs (US)
When it comes to the valuation for TMM pro-forma, I could have gone different ways but in the
end decided to value the TMM.to part of the company as stands then add the transaction value
of NES.v ($140m), as that's what TMM.to is willing to pay for the company and presumably at
least, it's how it will go down in the books of the eventual post-merger company. You can argue
this method with me if you like and I'm open to criticism (as always); for example I could have
taken the straight book value of NEX.v as stands today, which is lower and would have finished
with a calc of around 0.67X P/BV in the above table and chart. But after chewing it over and
also considering this is less about what I think all these companeis are worth and more about
what they say they are worth (AR.to a good case in point; see below) I went the way I did.
As is always the case, it's never an apples-to-apples comparison with these things so here are
the crib-notes on the chosen examples, starting with the most richly valued in P/BV terms and
working down, then a longer piece on TMM.to.
Gold Resource Corp (GORO): GORO has a low fixed asset value placed on its mining
properties, a knock-on effect from the way GORO grew up without a lot of exploraiton drilling
before production and how US SEC rules that demand a reserve from mining companies in
order to capitalize in-situ metal, rather than just a resource. It's seen its share price come down
from the ridiculous previous levels to somethiing that's now largely sustainable, thanks to its
operational profitability. I still think there's zero upside value in this stock (except of course if
gold flies hard and saves us all) and on a corporate level it's run by BS-merchants, but the P/BV
though no bargain is nowadays sustainable and reasonable.
4

Richmont Mines (RIC.to): The latest hotpot order of the day fashion stock in the Canadian
market, mainly because it's now hitting and processing much better gold grades and is
expected to become far more profitable in the quarters to come. Which is fair enough, but it's
now looking pretty expensive on an assets valuation. It's one of those that I should have
considered more carefully in 2014 when a more than a couple of you out there were pointing at
it and saying it was cheap. You won, I missed out, but it looks too late to join.
Fortuna Silver (FSM): I've added one (mainly) silver miner to this heavily golden list, the
example is Fortuna (FVI.to) (FSM) due to its market leader type aura these days. FSM in 2015
is all about consolidation while its main San José mine gets throughput upgrade work that
comes online in mid-2016, it's unlikely to make much money at current silver prices this year.
The stock price has come down (as you know I shorted it for a while) but even so, there's still a
lot of "jam tomorrow" in that valuation for my taste. Valued to the hilt, not for me.
Lake Shore Gold (LSG.to): At a virtual 1:1 P/BV, LSG has improved considerably over the
last 12 months though it is off its January highs. As you know I now own this one and like it
because of its profitmaking potential, which is the classic catalyst that drives P/BV ratios higher
(quite simply, profitable and performing assets are worth more equity, no matter what value
they might be held at on the books). The mining assets are reasonably valued by the company,
too. Not much fat on this company and I really like its potential.
B2Gold (BTO.to) (BTG): Another that I own personally, BTO has been in a holding pattern
for quite a while, with doubts expressed on the prices it's paid for its latest acquisitions (esp the
Papillon deal for Fekola) weighing its books down. Plenty of financial debt on its liabilities side
too, that cannot be ignored. To the plus side the new Otjikoto mine has seemingly started well.
It's current valuation represents this holding pattern well, but BTO is bound to improve with
better gold prices and even though it almost certainly overpaid for its last round of acquisitions
(hence the balance sheet weight) it has the advantage of a strong track record in operations
and development execution. In short, if it delivers the way it says it will, there's upside even in
a flat gold price scenario.
McEwen Mining (MUX) (MUX.to): I'll admit it's easier to use stocks I cover closely in this
comparative because the data is to hand and I have a better handle on the company's story.
True again for MUX, which has seen its P/BV ratio improve due to impairments taken that were
necessary to keep the books honest. Then again, its recent share price drag on kind of
lacklustre 4q14 financial and now all this robbery shenanigans (see Market Watching) has taken
the edge off the improvement recently. That said, MUX looks cheap at this level. Having
rationalized and got El Gallo I working well, plus stripping most of the debt away from the
balance sheet (from $261m liabilities in 4q12 to $82m in 4q14), MUX is leaner and from here
the move into modest profits we expect as 2015 moves on will bring on the revaluation.
Endeavour Mining (EDV.to): Here's one that looks plain cheap on an assets valuation level
and (as I think I've mentioned on these pages previously) it's one I've looked at recently. My
main problem is the political risk factor as it has multiple mines in West Africa in different
countries, any one of which may be the next problem, though I'm also aware that's less of a
problem for some of you readers out there (as you've told me you own and like). That's a
reasonable call, I have no problem and on a direct valuation level EDV has done well to improve
its balance sheet position and make its operating mines mostly profitable these days. It's a
leverage story that's bound to see better share prices from better gold prices, as long as
something nasty doesn't happen on the political side. The management roster isn't one I feel
totally at ease with. Oveall I pass, but high risk fanciers may like it more.
Teranga Gold (TGZ.to): The final reason why I don't own EDV.to is that I own Teranga and
the raw data from that chart shows you one of the reasons; it's still mightily cheap compared to
peers and on a standalone basis. Now operating profitably, its next task is to take the
explorations it owns on the large concession and prove their worth what the books say they're
5

worth, rather than what the market is factoring into its current share price (very little in fact,
TGZ is wholly valued on its continued operations and even then looks cheap on multiples). It
might never get to a 1.0X P/BV without a big jump in the gold price but I'm not going to sweat
on that; just a re-rating back to an easily achieveable 0.7X gives me more than a double for my
investment. Politically safer than just about anything in the West Africa region, I still consider
TGZ to be tremendous value. Which is why I own it, really. Like it a lot from here.
Argonaut Gold (AR.to): Then at the bottom of the pile comes one that shows taking P/BV in
its raw state can be misleading. just by checking that chart you'd think AR.to was very cheap,
but when we consider that $375m of its asset value is locked up in the woeful-looking San
Antonio and Magino properties which AR.to again refused to take any impairments on in the
2014 end year financials (plain dishonest), those two assets alone count for 0.35X of true P/BV
which if written down to where they really should be carried, i.e zero, would make the AR.to
P/BV 0.67X and more reasonable. That and the rising op costs at AR, not good. Operationally,
AR.to is now an unprofitable mining company (as see in its 4q14 numbers) though it's not
fracturing large amounts of cash either. It's $50m in treasury will see it through and puts time
on its side. It doesn't look like value here, though.
Which brings us to Timmins Gold
As you see in the chart above, Timmins Gold (TMM.to) TGD) is highlighted with the red bar in
order to catch your eye. Its P/BV at 0.5X marks the company out as currently cheap (though
not the cheapest on this straight metric), so in order to consider the potential here come a few
more charts:
We start with the most basic. gold production and sales (virtually indentical figures at TMM.to
normally). This chart shows how the latest 1q15 production numbers out last week (2) can in
lower than expected and indeed, the 24,155oz is the lowest since 2011. TMM blamed lower
grades for the miss, but went on to
Timmins Gold (TMM.to) (TGD): Quarterly gold sales
say that grades are expected to
improve as the year moves on and 40000
also the company made no change to 35000
its 2015 guidance (3). As that stands 30000
at 115,000 oz to 125,000 oz gold, it 25000
implies that the next three quarters
20000
must average at 30,000 oz each in
15000
order to make the low end of
10000
guidance. That's what you see in
5000
those estimates bars for 2q15 3q15
0
and 4q15.
Some companies are easier to take at
their word than others. Timmins Gold
falls firmly in the "than others" category, as they've disappointed and guided badly too often for
anyone's comfort. However, if we suspend disbelief for a moment and assume TMM made its
guidance in 2015, it would mean that financials are set to improve in the next three quarters.
Talking of which, here's the financials overview for the operational numbers at TMM, including
our estimates for the 1q15 results which should come out between April 29th and May 1st.
TMM isn't an easy company to model at this stage, but assuming a reasonable reduction in
operating costs for the 1q15 quarter and no impairments, operations are expected to come in
at breakeven and the company post a small net loss.
6
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2 tse51q3 tse51q4
Oz Au
source: Company filings

TMM.to/TGD: baseline mine financials, 2012-2015
U$m
50 revenues COGS Gross profit op profit Net Income
45
40
35
30
25
20
15
10
5
0
-s5ource: TMM data, IKN ests
1q12 2q12 3q12 4q12 1q13 2q13 3q13 4q13 1q14 2q14 3q14 4q141q15est
This will probably go down quite well, as the
lower production just announced hit the stock
quite hard, as seen. However the Approx
$29.5m in expected revenues for 1q15, though
low, is still likely to allow an operational profit.
The key will be costs and in my current model,
this is how I have them breaking down for
1q15.
As things stand today it seems to be pure bad
news baked into TMM , so something that's less
than bad such as a near-breakeven quarter
when many were expecting a big loss, could
see the start of a rebound.
Once the pre-AGM/EGM quiet period is done and
TMM announces its AGM resaults (expect the
merger to be approved, the fools) and signs off on
the 1q15 numbers, we can expect the company to
play up harder on its asset value and project
pipeline and in fact, we can already see that
strategy by flicking through its April 2015
corporate presentation (4). So on that subject,
here's how we see balance sheet items developing
starting with assets. Here we assume the merger
with NES.v goes through as per during this current
2q15 quarter and if my assumption of TMM booking NEW at its ticket purchase price turns out
to be the right one (we'll see on that) assets will top out at $450m or so come end June.
TMM.to/TGD: Assets Breakdown per qtr
500
450
400
350
300
250
200
150
100
50
0
7
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2
source: company filings
srallod
fo
snoillim
TMM.to/TGD: Costs breakdown
40
36
32
28
24
20
16
12
8
4
0
Trade/Rec
Inventory fixed
other current
cash&ST
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1
U$m
other
impairment
G&A
COGS
source: company data, IKN ests

Liabilities are in a healthy place at TMM, one of the things I've never had to beef about with
this underperforming company. Over half the
whole caboodle is a $52m deferred tax liability 120 TMM.to/TGD: Liabilities Breakdown per qtr
that's book-keeping rather than an active part 110
100 of TMM's ops, while the current liabilities are
90
mostly normal trade payables plus a modest 80
and easily serviced $11m loan facility. 70
60
50
With the addition of NES to the mix we expect 40
30
a very minor $3m to be added to liabilities, as
20
TMM isn't inheriting any financial issues with 10
0
its expected purchase (the problems with Ana
Paula are on the ground, not in the books).
Here's working capital (left) and treasury
(right), both of which are healthy enough on an ongoing basis.
Note that if TMM has one or two or more breakeven or even small loss quarters in 2015, it's not
going to cause any sort of liquidity crunch at the company. As a going concern this one is just
fine and that's not a minor point here.
Here's the expected evolution of shares
out, again assuming the NES deal closes
during 2q15.
Overall, the financials at Timmins Gold
point to a company that's not going
anywhere. The balance sheet's in good
shape and will stay that way with the
addition of NES, because it's an all-paper
deal that only matters in relative dilutive
terms, not absolute financial terms. As for
operations at the current San Francisco
mine, they've been lacklustre in recent
quarters but they don't have to be anything more than that in order to tread water. If grade
returns as the TMM says its will (seeing is believing) the resulting production boost without
breaking any records will return TMM into the profitable column. Also, if gold behaves and
starts moving up in the way I expect, TMM will definitely benefit and probably more than most
in the sector.
So for sure the recent numbers have been crappy and its executive decision to buy Newstrike
was patently awful but this company isn't going anywhere, is still financially solid (despitethe
best efforts of the mediocres running it) and at its IKN-estimated 0.5X P/BV ratio looks
particularly oversold right now. I see no reason why it cant pop back to something in the
8
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2
source: company filings, IKN ests
srallod
fo
snoillim
LT debt
current debt
TMM.to/TGD: Cash and ST
60
50
40
30
20
10
0
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2
100 TMM.to/TGD: Working Capital per qtr
90
80
70
60
50
40
30
20
10
0
source: company filings, IKN ests for FY15
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2
source company filings, IKN ests
srallod
fo
snoillim
TMM.to/TGD: Shares Out
300
275
250
225
200
175
150
125
100
75
50
25
0
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1 tse51q2 tse5q1q3
source: company filings, IKN ests
serahs
fo
snoillim

median range of 0.7X and if so, that would signify a 40% price gain from current levels.
Discussion and conclusion
I think Timmins Gold (TMM.to) (TGD) is a trading buy at its newly discounted price. Reasons:
• Until the AGM/EGM is done on April 29th we're not going to hear much out of the
company. Once that's out of the way, the 1q15 financials are filed and the expected
franking of the NES.v merger is done, we can expect the company to talk itself up
aggressively. TMM has a street presence and it gets plenty of brokerage support, too. If
only for that, the houses will want to get out from underwater and have somebody else
hold their bags.
• Probably the most important point: Timmins gold is not in a financially weak position. This
is not one of the gold companies straining under a welter burden of balance sheet debt.
Companies such as Luna Gold, Gran Colombia Gold and Allied Nevada have either gone or
are going goodbye (at least in their present forms). Other such as Endeavour Mining
(EDV.to) are improving their balance sheets but the jury's still out. Anything being crushed
by balance sheet debt is bad news, whereas Timmins, though not perfect, is in good
financial shape and can continue to ride all the downturn you could ever throw at it.
• The 1q15 ops weren't great but they're hardly going to be a disaster quarter either.
Assuming we see some modest cuts in costs (now typical across the board) TMM will give
us a near-breakeven result. 2q15 and beyond should turn into a modest profit even
without a pop in gold, as long as they deliver on production after three poor quarters.
• We're going to hear a lot about the project pipeline at TMM and how it's buying up cheap
assets for the future good years (their version of the 'land grab' i'm into these days).
That's fair enough and though subjectively I believe the things they have bought are
crocks (Caballo Blanco, Ana Paula) that's not going to be everyone's view. As these assets
seem to be priced down to near nothing after the heavy selling in TMM, they add to the
company's rebound potential.
• If gold goes up they're all going to go up, we know that. But with TMM loading itself with
assets plus at the rough tipping point for profits at $1.2k/oz gold, any upmove will bring
strong leverage to this ticker. Gold at $1,300/oz would soon see our fickle market
commentary artists praising TMM for its genius vision are foresight instead of the current
sin bin situation.
• As we saw recently with Argonaut (AR.to), the tide-in-tide-out way of this whole sector
sees the outliers come back and trade to the mean eventually. AR.to was in the doghouse
but got bought back up because it looked cheap to peers all of a sudden. TMM could do
the same and few would bat an eyelid.
• Timmins is going to be an assets and development story in May, not an operations story.
I'm not going to hang around as a shareholder and hold to see whether Ana Paula
becomes a mine, but i'm sure there are going to be enough people attracted by the cheap
price and (on paper) strong growth pipeline when the promo push starts. Along with
current operations that are at worst breakeven this makes TMM and interesting trade on
the rebound and I think the timing is right for a trade today.
• Its current valuation makes it look oversold. Now for sure I'm clear that it could stay
oversold for an indefinite period or even go down further (I've refrained from using that
phrase about catching falling knives until now, but I've thought about it all weekend and
it's a caveat you need to consider, too), but the latest drop on production numbers that
were mediocre but hardly a disaster looked like a bridge too far. The IKN calculated 0.5X
P/BV looks cheap and what's more it's a company that has financial health to back it up,
it's not one of these fragile debt-laden creatures that could go belly-up at any given
9

moment.
• There is a chance that the NES merger is voted down. I'd call it unlikely considering the
management set ups at both TMM and NES (both entrenched) but if it happens, TMM
would be considered 'off the hook' by the market and the rebound would be fast and
strong.
The IKN Weekly recommends Timmins Gold as a speculative trading buy at its current
level and sets a near-term target of CAD$1.02 for the Canadian ticker (TMM.to) and U$0.84 for
the US ticker (TGD), both representing a 40% upside to current levels. It's not a great mining
company, but it's really not as bad as the current price would have you believe and therein lies
the real value. Balance sheet's good. The worst case for operations is slightly under breakeven.
With the company unfettered after the AGM and the merger, they'll have plenty to market
aggressively. If we throw in the tentative assumption of better operations in 2q15 and beyond.
This company can command a 0.7X P/BV easily enough and because of that, I'm a buyer
tomorrow.
But be clear, I'm not into this trade because I'm all warm and fuzzy about its longer-term
potential. This one is bigger fool theory writ large, as its corporate strategy of buying into
politically damaged dog projects such as Caballo Blanco and Ana Paula is the stuff of dullards,
not sharp and intelligent management. This is a stock I will buy at price X and when price X+1
shows up, I'll sell it and take my profit. If it takes a couple of months then so be it, but if it
happened in a fortnight that'd be just fine too. Buy low sell high, that's all.
Stocks to Follow
Honours even, holding pattern, wait and see, patience required, insert your preferred cliché. Of
our 14 open stocks, five went up last week (MUX, TGZ.to, LSG.to, SAM.to, FOS.to) five went
down (BTO.to, AG, REG.v, FCV.v, IRL.to) and a full four remained unchanged (LGN.v, NCQ.to,
LRA.v, DNA.to). All that while gold dropped by 0.32%, which set the tone for the overall flat
week. Nearly all the price chages were of the penny-here-penny-there variety too. The only one
to buck the trend being the decent 8c rise in Lake Shore Gold (LSG.to up 7.6%) and as that's a
new position, it's also one I personally enjoyed watching. Hey, a nerd has to do something with
his week, right?
We currently have 14 open positions in our Stocks to Follow list, one less than our self-imposed
maximum. That should be up to the maximum this time next week. Five of those are in the
green, one is unchanged, eight are in the red.
10

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$0.984 -9.7% Added Mar'15, top value
B2Gold BTO.to buy C$2.32 12-sep-14 C$1.90 -18.1% 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
Lake Shore Gold LSG.to buy C$1.04 07-apr-15 C$1.13 8.7% New FCF+ prod. Poss M&A tgt
First Majestic AG hold U$10.51 10-aug-14 U$5.09 -51.6% Holding, only silver exp left
Starcore Intl SAM.to hold C$0.12 10-jan-15 C$0.15 25.0% 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$0.28 0.0% 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$0.38 26.7% New bet on 2016 drill prog.
Focus Ventures FCV.v hold C$0.23 01-jul-12 C$0.22 -4.3% tgt 50c, now raising cash
Minera IRL IRL.to hold C$0.27 22-jul-12 C$0.075 -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'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
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$3.60 56.5% 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, though not so much as it was a pretty quiet
week all told.
B2Gold (BTG) (BTO.to): We got the 1q15 production numbers from BTO on Wednesday
evening (5) and this is the same chart I stuck on the blog.
BTO: gold production by mine
150000
140000
130000
120000
110000
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
11
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1
oz Au
Otjikoto prod
Masbate prod
Limon prod
Libertad prod
source: company filings, IKN ests
The obvious point of concern is the production numbers from Libertad in Nicaragua, so if we
isolate those and look at every quarter of production there under BTO since its commissioning
in early 2010..

BTO: Libertad gold production, per qtr
45000
40000
35000
30000
25000
20000
15000
10000
5000
0
12
01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1
Oz Au
source: company filings
...we see that the quarter dropped back to the type of figure we used to get in 2011 and early
2012. BTO informed us that Libertad should get back on track later in the year when the high
grading Jabali satellite deposit comes online and starts improving mill head grades, so the
implication is for a soft Q2 from Libertad as well. The good news is that Otjikoto has hit the
ground running and along with a modest imporvement at Masbate, the overall production
number was a new official record (the red slice I added to 4q14 from Otjikoto was from pre-
commercial production so apparently doesn't count...whatever).
To be honest, I've been more concerned about the potential for a trade in Timmins (TMM.to)
this week and that's taken most of my time (in the end I think it's a good buying opportunity),
so haven't thought so very much about BTO since the production numbers came out. This
company deserves closer and detailed treatment, which it will get on the filing of its 1q15
financials in May.
Focus Ventures (FCV.v): We had two bits of news from FCV last week, the first one on
Tuesday (6) that said the drills are now turning on the next stage of its development program
at Bayovar12 that will look to turn as much inferredd into M+I resource as possible, thereby
preparing the field for a pre-feas down the line. We shouldn't expect anything revelatory or
market-moving from this drill program, this is the lug-work that goes with putting together a
study that will convince financiers and their risk-management departments. The second NR on
Thursday (7) confirmed that the deal with RDU to help finance the 70% purchase of Bayovar12
was now closed. All good.
Lara Exploration (LRA.v): Lara filed its 2014 year end financials on Friday evening. It
registered a $2.56m loss on the year, some $1.8m less than in 2013 which shows its managed
to keep its burn rate under control. However the
cash position is down from $2.79m to $0.955m as
at December 31st 2014, so parsimonious or not this
is a project generator that will need to raise cash
soon. Today there are 30.97m shares out and that's
still a low number that's avoided the type of dilution
so typical of the sector but it's going to need to
raise cash soon and the most probable way is an
equity raise.
The good news on this score is that LRA has solid,
longer-term financial partners that will be willing to
fund. The bad news is that the market has already
worked out that LRA needs to sell shares in order to raise working cap and has done this to the
share price as a result:

The backers will buy the shares, but the backers want a bargain. I'm a continued holder of LRA
because it's the right type of model to see through the exploration rough waters, plus its team
is headed up by A1 excellent people who don't rip off shareholders and are the right type of
people you want to back in this crazy business. Yup, I'm deep underwater on the position, I'll
live. Happy holder.
Legend Gold (LGN.v): Some news last week, when on Wednesday LGN announced (8) the
sale of its Tabakorole property to a private company headed by one Scott Waldie, a former
President of the company. It might be better deemed a disposal rather than a sale as the terms
of the deal are virtually zero cash up front and and then four payments of $100k each if and
when operations at Tabakorole hit production targets, along with a 1% NSR. Also, any working
mine at Tabakorole has to be up and running in a maximum of 20 months else the deal is
annulled and LGN gets its property back
As Tabakorole is a small overall resource one of the less important projects on LGN's books it
makes sense to farm it out, as it's not something the larger players circling LGN would care
much about anyway. The takeaway from this is prima facie; LGN is willing to do deals with its
land assets. The rose-tinted speculative spec view could be that of a company cleaning itself up
and making ready for a bigger sale (the buyer is an ex-insider, after all) but that's probably
pushing it too far. Either way it is and will remain a smallfry holding.
Regulus Resources (REG.v): Repeat until understood: No need to buy at 40c, buy at 30c.
If there's somebody out there protecting the stock and getting it to close on a Fiday spike then
so be it, let Vancouver play its silly little games. If you like the idea of this one and want a few,
the absolute maximum you need to pay, even for size, is 35c, the practical level to shoot for is
30c. While volumes remain light (and I expect that for the rest of 2015) do not pay up and
waste your ammo.
Starcore Intl (SAM.to): I noticed it trading
up on downday, which is a nice sign even
with its light volumes, so I got into contact
with A. Person who has their finger on the
SAM pulse and asked if there was any reason
for the contra-tide swimming. Apparently
average grades at SAM have improved this
quarter. The light volumes put me off buying
into the story completely (or buying more,
though I am happy with the number I have
on this one) and we'll find out one way or
the other in mid-May when SAM is due to
post its quarterly production numbers. but I
13

thought the whisper good enough to pass on so here you go. Normal caveats apply.
Lake Shore Gold (LSG.to): This trade has started well enough, but let's not be under any
illusions either. This weekend's $1.13 is very much
inside the recent trading range.
In real news, the day after the IKN look at LSG in
IKN309, the company came out Monday with the
cost estimates for 1q15 to add to its previous
production numbers for the quarter (9). At an
operating cash cost of U$509/oz and all-in
sustaining cost (AISC) of U$748/oz, the figures
were better than even my lower cost estimates for
the quarter and we're now setting up for an
excellent set of financials when they arrive.
The Copper Basket
After sixteen weeks of 2015 The Copper Basket is showing a 7.83% loss to level stakes.
company ticker price 1/1/15 Shares out Market Cap current pps gain/loss%
1 Capstone Min. CS.to 2.03 381.95 504.17 1.32 -35.0%
2 Reservoir Min. RMC.v 3.96 47.55 185.45 3.90 -1.5%
3 NGEx Resources NGQ.to 1.17 187.71 182.08 0.97 -17.1%
4 Nevada Copper NCU.to 1.65 80.5 149.73 1.86 12.7%
5 Copper Fox CUU.v 0.135 402.96 78.58 0.195 44.4%
6 Amerigo Res ARG.to 0.27 173.65 69.46 0.40 48.1%
7 Western Copper WRN.to 0.68 93.68 47.78 0.51 -25.0%
8 NovaCopper NCQ.to 0.58 60.15 46.32 0.77 32.8%
9 Hot Chili Ltd HCH.ax 0.16 333.11 36.64 0.11 -31.3%
10 Panoro Minerals PML.v 0.295 220.25 35.24 0.16 -45.8%
11 Regulus Res REG.v 0.35 56.39 21.43 0.38 8.6%
12 Metminco MNC.ax 0.008 1822.6 9.11 0.005 -37.5%
13 AQM Copper AQM.v 0.06 139.24 8.35 0.06 0.0%
14 Catalyst Copper CCY.v 0.305 31.39 5.96 0.19 -37.7%
15 Coro Mining COP.to 0.045 159.37 4.78 0.03 -37.7%
NB: HCH.ax & MNC.ax priced in AUD$, rest CAD$ Portfolio avg -7.83%
A slight overall loss for the basket average over the week, but the underlying story is very much
the same as that of our 'Stocks to Follow'; it
was an overall wash. Six stocks made upmoves
4% The Copper Basket 2015, weekly evolution
(NGQ.to, NCU.to, ARG.to, MNC.ax, AQM.v,
2%
COP.to), eight made downmoves (CS.to, RMC.v,
PML.v, WRN.to, CUU.v, HCH.ax, REG.v, CCY.v) 0%
and just one remained unchanged (NCQ.to). -2%
The biggest percentage gains came from Coro -4%
Mining (COP.tp up 20.0%) and Metminco -6%
(MNC.ax up 11.1%), while the biggest -8%
percentage losses came from Panoro Minerals -10%
(PML.v down 11.1%) and Copper Fox (CUU.v
down 9.3%).
Copper prices remained under $2.80/lb and as
this dailies chart shows, it's still making heavy weather of a bullish recovery. There was some
optimistic sounds made last week on lacklustre Chinese macro numbers that elicited talk of a
14
ht4naj ht11 ht81 ht52 ts1bef ht8 ht51 dn22 ts1ram ht8 ht51 dr32 ht92 ht5rpa ht21 ht91
source: IKN calcs

government stimulus for its economy, but there
wasn't really any follow through into a game-
changing price recovery. One thing that catches my
eye on comparing the copper price chart to the
basket average tracking chart above is how the
copper metal price has recovered from the January
lows, while the junior explorecos have tended to
languish as a group.
Inventories time, here are the regular bullet points
that dovetail nicely with the price action:
• Total world copper stocks put in another
small drop, with the total down 1,271 metric
tonnes (mt) (-0.2%) to stand at 592,792mt.
But inside the global number there was an
interesting shift.
• Shanghai Futures Exchange dropped by
9,940mt (-4.1%) to finish at 240,775mt. That's the first real drop for over a month and
though overdue, it's a signal that buyers in China are finaly showing. A good one for
the bulls, right there.
• LME warehouses stocks rose by 3,675mt (+1.1%) to finish the week at 337,225mt..
• Comex warehouses added some, up 1,493mt (+6.4%) to finish at 24,732mt.
The Shanghai-only weekly tracker has the main story in visual form; th SHFE warehouse
number is off its highs at last and if it drops again next week, we're more likely to get a repeat
of the 2014 move (that started earlier in March, but all the same the shape fits).
Shanghai Futures Exchange Warehouse Stocks, 2014/2015
260000
240000
220000
200000
180000
160000
140000
120000
100000
80000
60000
15
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 ht91
Mt Cu
source: Cochilco
Now for some notes on a few of our basket components.
Western Copper & Gold (WRN.to): So yes, for the record I did buy a few WRN.to last week,
I didn't get close to the lowest price and it's not
a big position. As you can see, some smart
trader managed to snag 100k of WRN at 46c last
week which is better than I did.
As a bonus prize, the nice people at WRN got
into contact with me and we exchanged a little
about the company. I voiced my main concerns
about WRN as a more serious and longer term
investment (aside from the copper metal price
weakness and lack of market mojo for all juniors)
those being 1) grade low 2) capex high 3)
distance great. To the company's credit, they

came back with this you see below (re-printing because I like their frankness and I'm sure they
won't mind):
1) grade low – True, when looked at Cu or Au on its own. 0.5 CuEq is reasonable (life
of mine) for big porphyries, however the 0.7 CuEq (over the first 4 years) is good and
when combined with a 0:49 strip ratio, you can see why the economics (IRR/Payback
etc..) work even at today’s price deck.
2) capex high – True, however are on the low-med side of capital intensity (click here
and see - slide 11) when compared to other projects of size. I would argue that the risk
of potential major “runaway” costs is low as we are located in semi-arid environment
(400mm annual precip.), with gentle sloping hills (we don’t have to burrow tunnels or
pipe) and we have a good source of water from the Yukon river (no need to pipe de-
salinized water up thousands of km’s). Additionally, there are ways of cutting back our
Capex (lease the fleet instead of buy, have others (Gov’t) share the cost of the road),
however it is easier to put all costs into the study while going through permitting.
3) distance great – Relative, I guess, as Whitehorse is only a two hour flight from
Vancouver and we would be shipping out of a year round port in Skagway, USA (same
as Minto), which is ideal for the Asian smelters.
And as first pass counterpoints to my most basic worries, I think those are wholly valid. To be
quite honest I didn't take it much further on my own account because it turned out to be one of
the days I had a dental appointment running (I'm catching up on four years of neglect, feel free
to tut-tut me in a mail if you so wish) plus I've been noodling over TMM for the last couple of
days and as it's not a top priority for me right now, I kind of let it drop. But what I liked a lot
about the concise exchange was the company's willingness to talk more and how they were
ready to go into greater detail via confcall, etc. That puts them in the category of open willing
and (inversely) nothing to hide, which is always a good sign.
Metminco Resources (MNC.ax): I've deliberately not made much mention of one of this
year's new basket components MNC.ax to this point because i've been waiting for it to make a
single week's gain. This finally happened like week when it traded up from 0.0045 Aussie
dollars to 0.005. At those prices, even with its typical 4m share trading days it's only doing
$20,000 worth of market business.
This position is an experiment this year that's included to track one of these ultra-diluted
Australian junior stocks to see whether it can ever break the vicious cycle and put in a share
price recovery. Because if it can, it really doesn't take too much of a rebound to turn a spec
position into a multi-bagger win. Last week MNC gave us a pulse for the first time on a weekly
basis.
Amerigo Resources (ARG.to): Last week I alluded to my ignorance of how this stock moves,
this week I can officially state that I don't have a clue about ARG.to. The company announced
(10)...
16

ARG.to: Copper sales
16
14
12
10
8
6
4
2
0
17
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1
source: company filings
htnom/uC
sblM
...sale of 8.829m lbs copper which is the worst
level in years (this chart goes back to 1q11, more
than enough for our purposes). The minor moly
credits were at record lows, too:
As ARG provides average realized prices for both
its copper and moly, we can put together a
"calculated revenues" chart such as this one...
ARG.to: Calculated gross revenues (NB not same as filed
revenues) for Cu & Mo, per qtr
60
50
40
30
20
10
0
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1
$m
calc on Mo $m
calc on Cu $m
source: company filings, IKN calcs
...and from that, make a reasonable estimate as to real reported:
ARG.to: Gross revs calc versus filed revenues, per qtr
50
45
40
35
30
25
20
15
10
5
0
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1
ARG.to: Molybdenum (Mo) sales, per qtr
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
$m
Total gross Cu/Mo rev $m
Real revenues filed
source: company filings, IKN calcs, IKN ests for 1q15
That has me best-guessing Q1 of $21.5m. As COGS are unlikely to come in at under $26...
11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1
source: company filings
htnom/oM
sbl
M

ARG.to: Quarterly Earnings overview
60
50
40
30
20
10
0
-10
18
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1
source: company filings, IKN ests
srallod
fo
snoillim
revenues
COGS
Gross profit
...ARG is set to file a hefty loss in 1q15. The reaction of the stock? It went up a penny and
broke 40c for the first time in a long time. Weird
ARG has had momentum from its financing news and
expansion, due online at the end of this year, but I
honestly thought the thing would tank on the
production news because we're looking at something
in the region of an $7m quarterly loss here, due to the
low production and low prices for its wares. In short, I
bought it last year because I thought it would go up
and sold it at a loss. Then when the worst production
quarter in years comes along and I consider it a
certain dump, it continues its recovery. I give in, ask
someone else, I don't understand a stock of this small
size that seems to be able to brush off such a large relative quarterly loss. And that's really the
bottom line because when I don't understand something, I make no trade in it.
The Low Cost Producer Basket
After 16 weeks, the 2015 Low Cost Producer Basket is showing a 5.54% gain to level stakes.
company ticker price 1/1/15 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Goldcorp GG 18.52 812 16.09 19.81 7.0%
2 Barrick ABX 10.75 1164.67 14.86 12.76 18.7%
3 Newmont NEM 18.90 499 11.76 23.57 24.7%
4 Franco Nevada FNV 49.19 156.08 7.67 49.17 0.0%
5 Silver Wheaton SLW 20.33 357.39 6.95 19.46 -4.3%
6 Agnico Eagle AEM 24.89 173.43 5.25 30.27 21.6%
7 Buenaventura BVN 9.56 254.19 2.68 10.54 10.3%
8 Kinross KGC 2.82 1114.5 2.54 2.28 -19.1%
9 B2Gold BTG 1.62 948.9 1.47 1.55 -4.3%
10 Pan American PAAS 9.20 151.41 1.41 9.29 1.0%
all prices in U$, using NYSE ticker prices Portfolio avg 5.54%
The basket average improved a little, but not as much as the GDX control which has for the

first time opened up a sizeable gap on our average. As for our components, honours were even
again (it's a theme this week) with five winners (GG, ABX, NEM, AEM, BTG) and five losers
(FNV, SLW, KGC, BVN, PAAS). Notable how the "big gold" names tended to do well, while the
smaller market caps, the royalty plays and the silvers lagged. Best performance came from
Newmont (NEM up 5.6%).
The Low Cost Producer Basket: Weekly performance
and comparative to GDX control
25%
20%
15%
10%
5%
0%
-5%
19
ts13ceD ht4naj ht11 ht81 ht52 ts1bef ht8 ht51 dr42 ts1ram ht8 ht51 dr32 ht92 ht5rpa ht21 ht91
basket
gdx control
source: Google Finance, IKN calcs
Low Cost Basket: Percentage difference between
basket and GDX control, 2014
2.0%
1.5%
1.0%
0.5%
0.0%
-0.5%
-1.0%
-1.5%
-2.0%
-2.5%
-3.0%
ts13ceD ht11 ht52 ht8 dr42 ht8 dr32 ht5rpa ht91
|
source: ikn calcs, NYSE/Nasdaq data
Regional politics
Argentina: Daniel Scioli is now favourite for next President
To this point, IKN and your author has had Daniel Scioli as its tentative choice as the 2015
winner in Argentina politics, first in the PASO (version of primaries) vote in August and then in
the big vote in October to decide who becomes the next President of Argentina. Today that
changes, he's now clear favourite.
At the beginning of the year I wrote (11):
"It's a difficult call this early in the process, but I'm contractually obliged to
make a call on the Argentina presidential election so the forecast is for Daniel
Scioli to be the next President of Argentina."
Then a couple of weeks ago in the Regional Risk update of IKN308 it was:
"...it's still too early to call anything with great confidence but things stand so
far, my tentative selection of Daniel Scioli for the win has firmed up and looks
a little more likely."
But a week is a long time in politics and since then we've had two developments; Firstly, the
start of the akin to primaries process (it's very complicated) has begun in some of the provinces
of Argentina (last week Salta, today Mendoza and Santa Fe) and initial results have shown

decent support in both relative and absolute terms for the FpV candidates. That's the "Frente
Para La Victoria" party of both current President Cristina Fernández de Kirchner and candidate
Daniel Scioli, often known as the Kirchnerist party or simply the "K" party.
So early results in PASO votes have been encouraging for Scioli. Then this morning we have the
result of the latest survey conducted by poll people Poliarquia for La Nacion (12) and here's the
numbers from that. with notes below:
Argentina, Poliarquia Survey, April 2015
"For which of the following candidates for President will you vote?"
50%
45%
40%
33.4%
35%
30% 27.3%
25%
20.1%
20%
15%
10.5%
10% 6.4%
5% 2.3%
0%
Daniel Mauricio Sergio Margarita Jorge Other
Scioli Macri Massa Stolbitzer Altamira
Phone survey of 1,000 people in 40 zones, for La Nacion, April 3-10, MoE +/-3.2%, confidence level 95%
20
noitnetni
etoV
1) It was a phone survey of 1,000 people, conducted between April 3rd and April 10th. It
covered 40 different representative zones of Argentina and is given a margin of error of +/-
3.2%. For what it's worth, Poliarquia is one of the more reliable pollsters in the country and you
can tell because they're regularly accused of being pro-govt by anti-govt people and anti-govt
by pro-govt people, depending on the poll results on varying subjects they come out with over
the course of time.
2) In Poliarquia's previous survey a little less than a month ago (13) Poliarquia scored Scioli at
31%, Macri 25% and Massa 21%.
3) In March, the news was the fading of the frontrunner in 2013 and 2014, Sergio Massa
(Frente Renovador party). The latest survey continues to indicate his wilting.
4) Mauricio Macri's (PRO party) share is up from 25% and it's clear he's now the main
opposition to an eventual Scioli win and the continuation of the current government in
Argentina.
5) Daniel Scioli (FpV party, aka Kirchnerist) is now the clear leader and consolidating. He and
Macri and now pulling away from Massa and while here, let's note that although I've added the
numbers for two of the other players at htis point there are only three logical possibles for
President, the rest is just noise.
6) In the deeper interior party details of the FpV there's more good news for Daniel Scioli. His
nearest rival in the FpV ranks for the PASO "primary" vote in August is Florencio Randazzo, and
for that August vote Scioli is on 24.5% with Randazzo back on 12.5%. That's a big gap and
virtually guarantees his official nomination now (sidebar: Randazzo may now manoeuver for a
leading role within a Scioli admin, or perhaps take the Vice President candidacy on the Scioli
ticket; for deeper political watchers it's going to be very interesting to watch Radazzo's moves
in the next few weeks).
7) Also good for Scioli, in the politically key Greater Buenos Aires region (not to be confused
with the separate and relatively small city centre Buenos Aires zone) Scioli is clear frontrunner
on 36%, with Massa 22% and Macri 21%. There's an old adage in Argentina politics that you

cannot win the presidency without winning Gran BsAs.
8) Finally, it's long been assumed (and confirmed by polls) that if the Presidential vote gives no
clear winner on October 25th, a run-off between Daniel Scioli and Sergio Massa would be tough
to call but a run-off between Daniel Scioli and Mauricio Macri clearly favours Scioli. As that latter
is now the most likely scenario, even the run-off is beginning to suit Scioli.
Bottom line: I'm calling the frontrunner and the most likely challenger, I'm also calling the
favourite but please be clear that I'm not calling the winner. It's still not over yet, not by a long
haul, but we can now say out loud that Daniel Scioli is favourite to win in October
(with a run-off likely in November) and become the next President of Argentina. It's
also worth noting that to this point the election campaign has been rather non-controversial
and little scandal noise has come so far, which is particularly weird for Argentine politics. It
remains to be seen whether the relatively clean campaign continues though it's probably fair to
say that the longer things remain "civilized" the more it favours the two frontrunners. As for an
eventual Scioli win, ostensibly this would mean a continuation of the current Cristina
government and policies as they're from the same but it's also likely that Scioli would be more
moderate than CFK, in the mid to long term at least. We can take a closer look at the dynamics
of that if the scenario continues to indicate Scioli as dauphin in the months to come.
Mauricio Macri is now the obvious challenger, which is a change from the beginning of the year
when I wrote (11), "Main opponent is Massa, in with a squeak is Macri, outsider Randazzo, the
rest are just noise" at the end of December. Son of a very rich and successful businessman as
well as being current Mayor of Buenos Aires city and president of Boca Juniors football club,
Macri comes from as classic a right wing neoliberal political standpoint as you could imagine. If
he became President, it would mark a big shift in Argentine politics to the type of "normal"
economic policies we see in most industrialized and emerging market growth countries. It
would also be a move away from the shadow of Juan Peron (although Macri is bound to swear
blind his allegiance to Peron in the months to come). You can expect his candidacy to gain
strong support from political and media figures outside of Argentina looking in.
It's going to be fun.
Mexico: Michoacán captures mining extortionists
To prove that it's not just Guerrero, last week two high-level members of Los Caballeros
Templarios (The Knights Templars) narco cartel were captured by authorities in Michoacán
State, Mexico (14) accused of being the heads of large scale extortion racket among local
businesses, particularly mining companies. According to the rap sheet, their role was to contact
"mining companies in the region and demand large sums of money in exchange for allowing
them to continue working. In other words, a classic protection racket.
Peru: The Tia Maria conflict now getting bogged down in classic style
The conflict over Tia Maria between those pro (company, government, media) and contra
(locals in the majority) the project has now reached an all-too typical stage of impasse, the type
we've seen in previous protests in Peru (and other countries for that matter).
Here's a map of the conflict zone, including the approximate locations of the Tia Maria deposit,
the proposed processing plant, the "La Tapada" zone that's reportedly higher grading for gold
and the now-infamous Tambo valley, aka the "Islay" region, where those who object to the
project taking place live in three main population centres (El Fiscal, Valle de Tambo and the
largest village/small town of the three, Cocachacra). For the record, where I live is Arequipa city
which is perhaps 150km inland, away from the coast and this area shown. Region and city are
not the same thing-
21

The latest episodes to the conflict include the arrest, imprisonment and eventual release (some
four days later by judge's order yesterday Saturday) of one of the leaders of the protest in the
El Fiscal zone, the continued blocking of the region by protesters (e.g. local schools have now
been closed for safety reasons) and the arrival of a government high commission to the zone in
order to try and broker some peace on Friday, that tribunal largely rejected by locals as they
don't want to sit down with a company who called them "mining terrorists" just a few days ago
or a government that only wants to find a way to develop a project they don't want developed.
As for the company's position, last week your author intercepted (cough cough) a mail written
by one Carlos Aranda, Technical Services Manager at Southern Copper (SCCO), which explained
explained the situation at Tia Maria in the eyes of SCCO to a mailing group of assembled
academics, journalists and mining people. Original text in Spanish below, author's translation
above:
"I repeat, the opposition is not what it seems. There isn't a majority of
opposers (to the project). Here's an example; In the most recent protest march
against the project it's said there were 1,500 people. Let's say there were
3,000. In the whole of the Islay region (according to the Peru Statistics Office
Census of 2013) there were a little over 52,000 people living there. If we
assume that all the anti-mine protesters are from the zone, the "opposition" is
a little less than 6% of the province's population. But the other 94% don't say
anything. For sure I'm not assuming that the silent group are all in favour but
knowing the survey statistics, let's say there are 15% who don't care a jot
about the situation, that still leave 79% who aren't associated with the
opposition. As of today that 6% have blocked the entrance to the locality to
stop ministers from bringing dialogue and information to the area so that the
other 94% could listen or voice their concerns. The dictatorship of the
minority, they say."
Reitero, la oposición no es lo que parece. No hay una mayoría de opositores. Veamos un
ejemplo. En la mayor marcha reciente en contra se dice que llegó a 1,500 personas. Digamos
que fueron 3,000. Todo Islay (INEI 2013) tiene poco más de 52,000 personas. Asumiendo de
que todos los antimineros son de la zona, la “oposición” es de poco menos del 6% de la
población de la provincia. Pero el otro 94% no dice nada. Por cierto, no asumo que este grupo
silencioso esté todo a favor. Pero, conociendo las estadísticas de encuestas, digamos que hay
un 15% al que no le importa un pepino la situación, todavía queda un 79% que no comulga con
los opositores. Hoy día ese 6% bloqueó los ingresos a la zona para evitar que los Ministros
pudieran llevar el diálogo e información a la zona para que el 94% restante pudiera escuchar o
emitir sus preocupaciones. La dictadura de las minorías, que le dicen.
22

There was more to the correspondence from Señor Aranda, but that part is a representative
section of the company's policy and position. My heart sank to see the hackneyed "the
protesters are not the majority" argument being wheeled out by the company, backed by those
wonderful things called statistics. No matter that in late 2014 in the regional elections locals
voted for anti-mine representatives in four of the six local provincial seats, including all of the
key areas. Apparently that doesn't count. No matter that if it were a tiny unsupported minority
of locals doing all the blocking (6%! ridiculous) that those locals who didn't agree would have
reasoned with them already (as is the way in local communities). Neither does it matter that
SCCO has been trying to explain its position to the locals for at least six years, but all it will
apparently take is for them to sit down and listen one more time in order to convince them that
the mine is a good idea. It's disheartening to see the line taken by SCCO, because it's the exact
same one that's caused the breakdown in negotiations in several other projects.
And to make it clear, check back at that map again and ask yourself how many troops would
have to be stationed on what's little more than a dirt track road (I've been up it) running next
to a river at the bottom of a wide-ish agro valley in order to quell the type of protests and
roadblocks that would stop supply trucks moving up to Tia Maria and eventually Cu concentrate
moving down. The idea that this project could happen without the supprt (or at very least the
grudging acceptance) of locals is crazy. Imposition of Tia Maria is logistically impossible, a fact
that seems to fly over the heads of those currently calling the locals every name under the sun.
Not that the State would be very willing to post a thousand soldiers or police in this place on a
permanent basis either, as one of the misconceptions about social conflicts in Peru is that of the
role of the State, which in fact is fairly limited. It will move in order to quell any actual or
potential breach of the peace and in cases where it suits the government, they're not slow to
crack a few heads open with truncheons, either. But the responsibility for an ultimate
agreement on a mine project lies firmaly and squarely in the hands of the mining company. The
government can award all the permits it likes, without a deal between company and locals,
these things will go nowhere fast. Sadly, the arrogance of the SCCO posture has come back to
bite them hard, once again. Until they learn a little humility there will be no deal and no mine at
Tia Maria, take that to the bank.
Argentina: Pan American Silver (PAAS) (PAA.to) to promote mining in Chubut
In a deal signed last week (15), the San Juan National University has been sponsored by Pan
American Silver (PAAS) (PAA.to) to give three technical courses on the mining industry in the
Chubut region and specifically in the Paso de Indios municipality, starting in August. This is of
course location of PAA's massive Navidad silver/lead/zinc project in the middle "Meseta" zone of
Chubut region. The three courses will cover "Explosives and Explosions", "Exploratin Sampling"
and "Benefits of Minerals" and form part of PAA's "Jóvenes de Vuelta a la Meseta" (Young
People Back to the Meseta) program. According to the company spokesperson, "The idea is to
train young people in the region and prepare them for the mining activity that will arrive in the
Meseta de Chubut sooner or later and when it does, will help develop the zone".
This new initiative drive from PAAS comes at the same time as the hotly contested Presidential
and Regional elections in Argentina and it won't escape people's notice that the Cristina/current
government backed candidate for Chubut is pvery pro-development of the Navidad project.
We're also getting "coincidental" studies coming from economists (16) stating how much
benefit could come from the eventual development of Navidad. On the other hand, the anti-
mining groups in Chubut (such as the main Radical (UCR) party opponents of mining in the
region) have already stepped up their policy statements by saying that only though a
regionwide referendum (rather than individual local ones) can the rules be changed to allow
mining development in Chubut. Mining will be one of the hotter debate subjects in Chubut from
now to October and the voting day, so it's interesting to see PAA stepping up on its own PR
campaign at the same time.
Colombia: The Government/FARC-EP peace talks may be unravelling
Potentially bad news for Colombia's potential as a mining destination, as on Wednesday the
FARC terrorists in Colombia unleashed a particularly cowardly and unprovoked assault on an
23

army column that left eleven soldiers dead (they were unarmed, according to some reports).
Oresident Juan Manuel Santos immediately retaliated by calling off his unilateral air bombing
cease fire on FARC targets and then on Friday in a televised address to the nation said (17)
"Do not be deaf to Colombians who are shouting for an end to the war, who
are losing patience...We must put deadlines on this process and if (the FARC)
want peace they must demonstrate with deeds and not with words."
The main problem with the FARC is that they're lying piece of shit, from there filters down the
manifold issues they cause. There's little doubt that Santos is serious about calling for a
deadline to peace talks and if things fall apart, we're going back to the open guerrilla warfare
seen in Colombia to a greater or lesser degrees for decades. It also means that mining
exploration will be limited to those areas considered "safe" (in speech marks because that's only
ever relative) and under government control. The economists' projections of a Colombia that
could add 1% to its GDP just by mining and exploration in conflict zones in the event of a
lasting peace agreement seem even further away than before.
Market Watching
The full McEwen Mining (MUX.to) (MUX) 1q15 production numbers
OK, we've had our fun, time to get back to the numbers. For sure Rob McEwen has made a
pig's ear of this whole robbery thing and the sum total of the original publicity plus the ensuing
"narco's friend" reports have done for the stock price a bit (up to you to decide whether 9% is a
lot or a little, for me it's too big to ignore but too small to care about in the longer term) but
these things tend to wash over in time, I fully expect that gap between MUX and GDXJ to close
again (hopefully by MUX moving up, rather than GDXJ moving down).
Now for the fundies news, as MUX announced its complete 1q15 production numbers last week
(18) and we can now add the figures from San José
San José (100%): Tonnage mined, per qtr
to last week's from El Gallo I. 200
As expected in this quarter at San José, prodcution 150
and throughput tonnage was lower than in the other
quarters due to the standard downtime (vacations, 100
essential maintenance) that the mine goes through
50
during the Southern Hemisphere summer period.
This tonnage mined chart shows how 1q15 matches 0
closely to other Q1 periods.
24
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1
source: HOC/MUX filings (MUX 49% attributable)
sennot
cirtem
s000

As a result, production was down. In fact both silver (1,314,807 oz) and gold (19,291 oz) were
lower than I expected
What happens then is that we can take metals sales and average prices, then work out a likely
sales revenue total for the mine as a whole (remember MUX owns 49% of all this)...
San José (100%): Reported sales, per quarter
120 116.30
110
100
90
77.95
80
68.50 69.70
70 64.63
59.76 56.38 58.69 56.90
60 53.20
50 43.80 43.50
38.30
40
30
20
10
0
25
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1
U$m
source: HOC/MUX filings, IKN ests (MUX 49% attributable)
...and then make a reasonable stab at total cash costs for the quarter...
San José (100%): Total cash cost & all-in cash cost, qtr
90
80
70
60
50
40
30
20
10
0
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1
San José (100%): Gold Prod. and 2015 ests
30
25
20
15
10
5
0
U$m
tot cash cost
All-In cash cost
source: HOC/MUX filings. IKN ests (MUX 49% attributable)
...and the result is that on an operations basis, we expect the JV to lose around $7m this
quarter. That's not a great result of course, but under the circumstances of low prices and the
expected lower production due to sceduled downtime, it's one I'm willing to suck up.
And when you put those numbers in with last week's from El Gallo I, what it all means is this: If
we consider the estimated revenues from El Gallo 1, then the full costs at MUX (El Gallo I
COGsd, exploration, G&A, etc) then subtract the likely paper loss from the San José Q1, we're
left with an estimate of this:
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2 tse51q3 tse51q4
Koz Au San José (100%): Silver Prod and 2015 ests
2000
1600
1200
800
400
0
source: MUX/HOC filings (MUX 49% attributable)
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2 tse51q3 tse51q4
Koz Ag
source: HOC/MUX filings (MUX 49% attributable)

MUX: Total operating income (incl San José) versus
Total operating and exploration costs (minus impairments)
35 31.6
30
25.0 24.7
25
20 16.4 18.218.7 18.2 19.2 19.1 17.5
15 13.3 13.8 14.0 12.4
8.9 9.7 9.2
10
4.4
5
0
26
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 tse51q1
$m
tot op income
Tot op costs & exp
source: company filings, IKN ests and calcs
Total incomes of $12.5m, outgoings of $17.5m, a $5.1m pre-tax loss. But before you become
too dismayed, here are a few mitigating factors
1) The true San José number depends on how HOC treats its financials and weird
things happen there on a quarterly basis (though it tends to even out over the year). As
4q14 came in wrose than expected, there may be a delayed bonus in the pipeline.
2) This is the weakest of the four operating San José quarters, an operating loss was
expected.
3) The robbery aside, MUX at El Gallo I is now going well.
4) The above numbers are pre-tax, and as MUX enjoys tax credits for previous
investment they might even surpise us all by returning a net net bottom line profit.
The bottom line is that MUX is taking longer to turn around than I thought, but it's surely
heading in the right direction. There's no problem with liquidity, ops are improving and we can
fully expect a true net profit from operations once San José is back at full tilt. I still see strong
value in buying MUX at these current levels and consider the stock misunderstood by people
who are still looking at it in the way they did in 2013 and 2014. This is a changing beast.
Nickel prices
The continued drop in the price of nickel is now to the point where even State run companies
are feeling the pinch and considering
mothballing operations. In Bolivia,
nickel is a major payable metal for the
nationalizaed Comobol mine at Huanuni
and last week officials admitted that
nickel was now under the "equilibrium
price point" (19) at the mine, a
mouthful phrase that's saying it can't
cover its fixed costs.
I consider this a decent contrarian
signal, cure for low prices being low
prices, supply/demand, etc.
Belo Sun (BSX.to): Local issues again
Belo Sun (BSx.to) is having more garimpeiro (aka illegal miners) problems at its Volta Grande

project in Brazil. BSX has reported the presence of illegals on its property to the DEMA
Environmental Agency, who have moved to close down the illegal operations on site.
Meanwhile, the lawyer for the garimpeiros says (20) that BSX is trying to evict his clients and
thier families (reportedly around 2,000 people in total) without offering them any sort of
reparation for lost earnings and that BSX has no right to be in a zone where garimpeiros have
operated for over six decades. Or as the lawyer for the illegals put it, "We're talking about a
mining company with a mere application for apermit of operations and an ungranted
environmental licence, all on public land".
Better things to say about First Mining Finance Corp (FF.v)
As opposed to last week, there are positives to report about FF.v. First up on Monday (the day
after IKN309 and the promo payment analysis) FF.v decided to go fully public about its
relationship with Future Money Trends (FMT) via a news release which disclosed details of its
relationship with the website catering for hardcore goldbugs:
In exchange for providing these services, FMT will receive an initial fee of US$30,000
and a monthly fee of US$7,000. The agreement with FMT is for a one year term and
the Company has the right to cancel the agreement at any time. The Company has
also agreed to issue FMT 100,000 incentive stock options in the fourth month of the
term of the agreement.
I was suitably (?) catty about the news on the blog (21) but even though suspiciously late
(you're suppsoed to disclose these thigns at the time, not when the market starts noticing or
pointing fingers) at least FF.v had the gumption to disclose, so some credit is due. It will also
be interesting to see whether FF.v decides whether FMT is worth its incentive options by
continuing the agreement into the fourth month. I'll note in passing that compared to similar IR
agreements at this time in the market cycle FMT is getting a lot from FF.v and they'll need to
justify it by results. I'll also add my personal opinion that FMT isn't an established third-party IR
company, it's a paid promo pumphouse website. You have the rigth to disagree and let's leave
the subject at that
Secondly, I personally may not be a buyer of FF.v today, but company head honcho Keith
Neumeyer certainly is. He's added to his overall holding in the company since it starting trading
by buying on the open market and has added nearly 300k shares to his pile:
The open market purchases now put him at 2,999,554 shares held (22) and may have been
about rounding his ownership to 3m. Or he may have designs on further purchases, but
whatever, it's reasonable support from the person you'd most want to see buying. A legitimate
positive and a vote of confident from the people inside.
Conclusion
IKN310 is done, we end with bullet points:
• A trading buy in Timmins Gold (TMM.to) due mainly to the now oversold share price
27

but also because the company will have plenty of ammo to fight back and put in an
aggressive promo campaign next month (which is mere days away). That and the
operating results, while being nothing special for Q1, weren't a disaster either.
• The Argentina Presidential election is now hotting up and it's beginning to look like a
two horse race between Scioli and Macri, with the FpV government-backed candidate
currently holding a useful though not insurmountable lead. The surprise is the way
Sergio Massa is now fading, which for me is mostly due to the good political sense of
Argentines; the guy's a fake.
• I bought a little WRN.to but it's staying off-table (as it were). Meanwhile, Amerigo
(ARG.to) has me totally confused, going up when it's Q1 numbers show a large
financial hole in the making. Hey, unlikely to be the last time a junior miner confuses
my limited brain.
• The Lake Shore Gold (LSG.to) position has started nicely and we're now just 10
calendar days away from a 1q15 financials filing that I expect to be a barnstormer for
the company. It would be pleasant to see LSG maintain over $1.10 for the week ahead
and set itself a new floor level before moving higher.
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
Footnotes, appendices, references, disclaimer
(1) http://finance.yahoo.com/news/timmins-gold-combine-newstrike-capital-120000935.html
(2) http://incakolanews.blogspot.com/2015/04/timmins-gold-tmmto-tgd-1q15-production.html
(3) http://finance.yahoo.com/news/timmins-gold-reports-production-24-114135734.html
(4) http://www.timminsgold.com/_resources/presentations/NES_presentation_20150310.pdf?v=2
(5) http://finance.yahoo.com/news/b2gold-corp-reports-record-quarterly-220324252.html
(6) http://finance.yahoo.com/news/focus-initiates-phase-2-drilling-123000878.html
(7) http://finance.yahoo.com/news/focus-completes-sale-royalty-bayovar-123000793.html
(8) http://finance.yahoo.com/news/legend-announces-sale-tabakorole-private-200500466.html
(9) http://finance.yahoo.com/news/lake-shore-gold-reports-strong-060000077.html
(10) http://finance.yahoo.com/news/amerigo-announces-q1-2015-production-113000504.html
(11) http://incakolanews.blogspot.com/2014/12/ten-ikn-random-predictions-for-2015.html
(12) http://www.lanacion.com.ar/1785787-scioli-supera-a-macri-por-casi-6-puntos-y-massa-se-retrasa
(13) http://incakolanews.blogspot.com/2015/03/latest-poll-from-argentina-for.html
(14) http://www.telemundoatlanta.com/189_mexico/3055280_detienen-a-dos-colaboradores-de-la-tuta-por-extorsionar-
a-mineros-en-mexico.html
(15) http://www.elpatagonico.net/nota/277386/
(16) http://www.elpatagonico.net/nota/277257/
(17) http://www.reuters.com/article/2015/04/17/us-colombia-rebels-idUSKBN0N82JG20150417
(18) http://finance.yahoo.com/news/mcewen-mining-announces-q1-2015-211919824.html
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(19) http://eju.tv/2015/04/estao-cae-a-us-714-por-debajo-del-punto-de-equilibrio-de-estatal-boliviana-huanuni/
(20) http://economia.estadao.com.br/noticias/mercados,garimpeiros-e-mineradora-canadense-travam-disputa-por-ouro-
de-belo-monte,1663636
(21) http://incakolanews.blogspot.com/2015/04/1-allow-horse-to-bolt-2-close-stable.html
(22) https://www.canadianinsider.com/node/7?ticker=FF
Stocks To Follow Closed Positions 2014
Closed in 2014 closed close price
Fortuna Silver FVI.to jan'14 C$2.80 23-dic-13 C$3.19 13.9% small ST trade closed
Rio Alto Mining RIO.to jan'14 C$2.06 07-jun-13 C$2.30 11.7% trading position finally closed
Network Expl. NET.v feb'14 C$0.01 22-jul-12 C$0.005 -50.0% position closed, did nothing
Tahoe Resources TAHO feb'14 U$13.10 08-abr-13 U$21.72 -65.8% short closed due to reality
Darwin Res DAR.v mar'14 C$0.10 14-jul-12 C$0.045 -55.0% tiny risk play dropped
B2Gold BTO.to mar'14 C$3.07 28-nov-12 C$3.35 9.1% closed to free up capital
Pretium Res PVG mar'14 U$5.38 22-nov-13 U$6.50 -20.8% short closed as port longer
Gold Res Corp GORO may'14 U$5.07 26-ene-14 U$4.12 16.7% took profit
Bear Creek Min BCM.v may'14 C$1.63 23-mar-14 C$2.05 25.8% Took profit, sm near-term win
Eco Oro Min. EOM.to aug'14 C$0.48 22-sep-13 C$0.26 -45.8% sold small loser to make room
True Gold TGM.v sep'14 C$0.395 02-feb-14 C$0.41 3.8% M&A won't happen, sold
Santacruz Silver SCZ.v sep'14 C$1.04 26-ene-14 C$0.86 -17.3% silver/M&A spec, rel. small
Timmins Gold TGD nov'14 U$1.38 09-abr-14 U$0.99 -28.3% failed trade, sell, raise cash
Kinross Gold KGC nov'14 U$2.90 20-oct-14 U$2.15 -25.9% V small trade, didn't work, chau
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.145 -48.2% lost China sponsor
Stocks To Follow Closed Positions 2013
Closed in 2013 closed close price
USA Graphite USGT feb'13 U$0.93 08-ene-13 U$0.17 81.7% short tgt made/trade closed
Lachlan Star LSA.to feb'13 C$1.50 30-sep-12 C$0.95 -36.7% sold to reduce port risk
United Silver USC.to mar'13 C$0.21 28-oct-12 C$0.095 -54.8% small Ag sector trade, failed
Aurcana Corp AUN.v apr'13 C$1.07 11-nov-12 C$0.55 -48.6% closed on poor YE results
Gold Res Corp GORO apr'13 U$14.11 25-ene-13 U$9.38 33.5% short tgt made/trade closed
Marlin Gold MLN.v apr'13 C$0.075 10-feb-13 C$0.065 -13.3% closed trade
Bear Creek BCM.v may'13 C$2.58 01-abr-13 C$2.40 -7.0% near-term, time ran out
Lupaka Gold LPK.to may'13 C$1.12 23-oct-11 C$0.32 -71.4% towel thrown in
Tahoe Resources TAHO may'13 U$18.62 08-abr-13 U$14.70 21.1% took profit on ST short
OceanaGold OGC.to jun'13 C$3.03 16-sep-12 C$1.18 -61.1% sold on gold drop
IMPACT Silver IPT.v jun'13 C$1.14 13-ene-13 C$0.62 -45.6% sold on silver drop
Duran Ventures DRV.v jun'13 C$0.045 10-may-13 C$0.025 -44.4% ST trade never worked
Plata Latina PLA.v jun'13 C$0.79 10-abr-12 C$0.13 -83.5% closed
Bellhaven BHV.v jun'13 C$0.065 03-jun-13 C$0.12 84.6% closed ST trade
B2Gold BTO.to aug'13 C$3.07 28-nov-12 C$3.44 12.1% sold 1/2 to raise cash
Colossus Min. CSI.to aug'13 C$0.72 24-jul-13 C$0.79 9.7% closed thru nerves on future
Pretium Res PVG.to aug'13 C$8.20 11-jun-13 C$10.14 23.7% closed to raise cash
Bear Creek BCM.v sep'13 C$2.06 30-may-13 C$2.20 6.8% sold on pol risk decision
MAG Silver MVG oct'13 U$7.00 12-sep-13 U$5.62 19.6% near-term short
Gold Res Corp GORO oct'13 U$9.52 03-may-13 U$4.98 47.7% short tgt made, covered
AQM Copper AQM.v oct'13 C$0.31 16-oct-11 C$0.125 -59.7% closed failed trade
First Majestic AG nov'13 U$11.51 07-nov-13 U$10.50 8.8% v near term short, closed
Fortuna Silver FSM nov'13 U$4.00 07-nov-13 U$3.68 8.0% v near term short, closed
Primero PPP nov'13 U$5.70 07-nov-13 U$5.75 -0.9% v near term short, closed
Starcore Intl SAM.to nov'13 C$0.235 08-sep-13 C$0.17 -27.7% ST trade didn't work, sm loss
B2Gold BTO.to dec'13 C$2.22 28-nov-12 C$2.16 -2.7% closed ST trade to raise cash
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Stocks To Follow Closed Positions, 2012
Closed in 2012 closed close PPS
Soltoro SOL.v jan'12 C$0.87 07-nov-11 C$0.94 8.0% cash moved to BCM.v
Gold-Ore Res GOZ.to feb'12 C$0.84 13-oct-10 C$0.98 16.7% trade closed on ELG.v offer
Minefinders MFN feb'12 U$11.68 17-nov-11 U$14.80 26.7% target made, trade closed
Iron Creek IRN.v mar'12 C$0.58 26-sep-10 C$0.31 -46.6% time up on small bad trade
U.S. Silver USA.to apr'12 C$2.18 15-mar-12 C$1.86 -14.7% ST trade no good, cut loss
Augusta Res. AZC.to may'12 C$3.10 29-jan-12 C$2.07 -33.2% bad mkt, bad trade cut loss
Bellhaven BHV.v may'12 C$0.50 22-sep-10 C$0.28 -44.0% new mgmt not impressive
Zincore Metals ZNC.to may'12 C$0.325 29-jul-11 C$0.17 -47.7% bad mkt, bad trade cut loss
Soltoro SOL.v may'12 C$0.70 18-mar-11 C$0.41 -41.4% bad mkt, bad trade cut loss
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% fail ST trade close pre split
Estrella Gold EST.v aug'12 C$0.91 27-mar-11 C$0.14 -84.6% Closed on port realignment
Fortuna Silver FVI.to sep'12 C$1.07 03-may-09 C$5.32 397.2% sell call $6.17/ Mar25
Strait Minerals SRD.v oct'12 C$0.125 09-dec-11 C$0.12 -4.0% closing coverage til FY13
Sunward Res SWD.to oct'12 C$1.47 13-mar-11 C$1.21 -17.7% sold, took loss
Gold Res Corp GORO oct'12 U$21.47 09-sep-12 U$17.40 19.0% Short trade closed
Yellowhead Min. YMI.to nov'12 C$1.00 01-apr-12 C$0.63 -37.0% sold, took loss
Primero Mining PPP nov'12 U$7.26 07-oct-12 U$6.73 7.3% Short trade closed
Bear Creek Min. BCM.v nov'12 C$3.38 07-nov-11 C$3.72 10.1% Took small profit
Vena Resources VEM.to dec'12 C$0.70 31-may-09 C$0.18 -74.3% Failed trade (caps F)
Galway Res GWY.v dec'12 C$2.19 24-nov-12 C$2.30 5.0% closed good ST arb trade
Stocks To Follow Closed Positions, 2011
Closed in 2011 closed close PPS
Sunward Res SWD.v jan'11 C$1.05 21-nov-10 C$1.63 55.2% target made, trade closed
Serengeti Res SIR.v mar'11 C$0.245 05-dec-10 C$0.285 16.3% sold pre-tgt, ST trade fail
Fronteer Gold FRG apr'11 U$2.37 03-may-09 U$15.24 543.0% buyout, trade closed
Minefinders MFN apr'11 U$9.09 07-nov-10 U$16.89 85.8% target made, trade closed
Metalline Min. MMG may'11 U$1.04 26-jan-11 U$0.89 -14.4% exit, resource disappointed
Peregrine Met PGM.to jul'11 C$0.87 06-mar-11 C$2.60 198.9% buyout offer, closed
Dynasty Metals DMM.to jul'11 C$4.20 03-may-09 C$2.85 -32.1% Sold. Fail. Move on.
Aura Silver AUU.v aug'11 C$0.22 13-oct-10 C$0.16 -36.4% Bad pick. Take loss
U.S. Silver USA.v aug'11 C$0.52 26-jan-11 C$0.71 36.5% closed to make room
B2Gold Corp BTO.to sep'11 C$2.80 12-may-11 C$4.27 52.5% target made, trade closed
Bear Creek Min. BCM.v sep'11 C$3.80 27-may-11 C$4.17 9.7% macro sell call victim
Minefinders MFN sep'11 U$14.70 10-aug-11 U$15.15 3.1% macro sell call victim
Great Panther GPR.to sep'11 C$3.03 22-aug-11 C$2.64 -12.9% macro sell call victim
Fortuna Silver FVI.to sep'11 C$1.07 03-may-09 C$5.36 400.9% sold 20%, macro sell call
Focus Ventures FCV.v nov'11 C$0.40 20-apr-10 C$0.20 -50.0% cut losses, bad trade
Regulus Res. REG.v dec'11 C$1.17 14-aug-11 C$0.52 -55.6% cut on news of poor 43-101
2009 and 2010 closed positions in appendices below
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Stocks To Follow Closed Positions, 2010
Closed in 2010 closed close PPS
B2Gold Corp BTO.to Jan'10 C$0.88 08-nov-09 C$1.49 68.2% target made, trade closed
Radius Gold RDU.v Jan'10 C$0.18 23-aug-09 C$0.40 122.2% target made, trade closed
MAG Silver MVG mar'10 U$5.60 23-nov-09 U$7.28 30.0% closed in pdac week
Riverside Res RRI.v mar'10 C$0.435 20-sep-09 C$0.60 37.9% closed in pdac week
Amarillo Gold AGC.v mar'10 C$0.81 31-may-09 C$0.70 -13.6% closed in pdac week
B2Gold Corp BTO.to apr'10 C$1.24 18-feb-10 C$1.50 21.0% target made, trade closed
Lumina Copper LCC.v apr'10 C$0.84 14-jun-09 C$1.55 51.2% total position now sold
Troy Resources TRY.to may'10 C$1.10 03-may-09 C$2.25 104.5% sold on negative results
AuEx Ventures XAU.to may'10 C$2.51 24-may-09 C$3.38 34.7% trade closed
Nevada Copper NCU.to jun'10 C$3.27 14-mar-10 C$2.03 -37.9% need to lower Cu exposure
Carpathian Gold CPN.to jun'10 C$0.39 14-mar-10 C$0.35 -10.3% too exposed to cap raising
Amerix PM Corp APM.v jun'10 C$0.065 08-nov-09 C$0.05 -23.1% victim of macro bear
Antares Minerals ANM.v jun'10 C$1.42 06-dec-09 C$2.10 47.9% sold half
Vena Resources VEM.to jun'10 C$0.37 31-may-09 C$0.23 -37.8% sold half
Minera Andes MAI.to sep'10 C$0.75 28-jul-10 C$0.95 26.7% ST trade closed
Gold-Ore Res GOZ.to sep'10 C$0.52 01-aug-10 C$0.75 44.2% target made, trade closed
B2Gold Corp BTO.to sep'10 C$1.45 25-may-10 C$2.01 34.5% target made, trade closed
Blue Sky Uran BSK.v oct'10 C$0.41 19-may-10 C$0.22 -46.3% v small v bad trade closed
Dia Bras Expl DIB.v oct'10 C$0.14 30-aug-09 C$0.35 150.0% target made, trade closed
S. Amer. Silver SAC.to nov'10 C$1.38 24-oct-10 C$1.60 -15.9% loss on short, small fail
Ventana Gold VEN.to nov'10 C$7.92 27-jun-10 C$13.51 70.6% trade closed on buyout
Lumina Copper LCC.v nov'10 C$1.42 11-aug-10 C$3.65 157.0% trade closed
Antares Minerals ANM.v dec'10 C$1.42 06-dec-09 C$8.40 491.5% trade closed
Rio Alto Mining RIO.v dec'10 C$0.69 23-mar-10 C$2.16 213.0% trade closed
Coro Mining COP.to dec'10 C$0.585 03-oct-10 C$1.24 112.0% target made, trade closed
Stocks To Follow Closed Positions, 2009
Closed positions closed closing PPS
Cardero Res CDY/CDU.to May'09 U$1.20 03-May-09 U$0.87 -27.5% sold on negative news
Eastmain Res. ER.to May'09 C$1.04 06-May-09 C$1.315 26.4% trade closed
Radius Gold RDU.v May'09 C$0.165 03-May-09 C$0.235 42.4% trade closed
Latin Amer Min. LAT.v May'09 C$0.12 03-May-09 C$0.158 29.2% trade closed
Aquiline Res. AQI.to July'09 C$2.03 16-Jun-09 C$1.68 -17.2% took loss, bad timing
Chariot Resources CHD.to Aug'09 C$0.20 12-Jul-09 C$0.415 107.5% trade closed
Castle Gold CSG.v Sep'09 C$0.64 02-Aug-09 C$0.60 -6.3% ST trade didn't work out
Guyana Goldfields GUY.to Sep'09 C$2.30 12-May-09 C$4.50 95.7% profit taken
Los Andes Copper LA.v Sep'09 C$0.09 21-Jun-09 C$0.09 0% trade closed
Pediment Gold PEZ.to Oct'09 C$0.80 09-Aug-09 C$1.00 25.0% trade closed
Minera Andes MAI.to Oct'09 C$0.68 03-May-09 C$0.71 4.4% too much bad news
Dynasty Metals DMM.to Nov'09 C$4.18 03-May-09 C$6.01 43.8% half sold
Rusoro Mining RML.v Nov'09 C$0.55 03-May-09 C$0.57 3.6% underperformed
Important Disclosure
The information and opinions contained within this report reflect the personal views of the author and therefore all
material within should not be construed as accurate or reliable or be utilized as advice for investment or business
purposes. Independent due diligence and discussions with ones own investment and business advisor is strongly
recommended. Accordingly, nothing in this report should be construed as offering a guarantee of the accuracy or
completeness of the information contained herein, as an offer or solicitation with respect to the purchase or sale of any
security or as an endorsement of any product or service. All opinions and estimates included in this report are subject to
change without notice. It is prohibited to copy or redistribute this report to any type of third party without the express
permission of the author.
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