IKN #313Premium

The IKN Weekly
Week 313, May 10th 2015
Contents
This Week: Macro damp squibs and forex.
Fundamental Analysis: McEwen Mining (MUX) (MUX.to) NOBS update report
Stocks to Follow: Overview, Teranga Gold (TGZ.to) (TGZ.ax), Atacama Pacific (ATM.v),
Dalradian Resources (DNA.to), McEwen Mining (MUX) (MUX.to), Lake Shore Gold (LSG.to)
(LSG), B2Gold (BTG) (BTO.to), Phoscan (FOS.to), Focus Ventures (FCV.v), Regulus (REG.v).
Copper Basket: Overview, Amerigo (ARG.to), Capstone Mining (CS.to).
Low Cost Producer Basket: Overview, Barrick (ABX).
Regional Politics: Nicaragua: Hemco has problems, Peru Cajamarca: Regional government
formalizes support for "responsible mining", Argentina: Sergio Massa's Presidential election
campaign is falling apart, Guatemala: VP Baldetti resigns, Your Tia Maria update, Chile
Maricunga enviro, Mexico: Goldcorp at Peñasquito has an ongoing community problem.
Market Watching: Mexican silver producers and 1q15 results, Gold Resource Corp (GORO)
1q15 results, The Coastal Gold (COD.v) fight: Additional thoughts, Timmins Gold (TGD)
(TMM.to) 1q15 results.
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
Macro damp squibs and forex
At the top of last week's edition, we noted three macro events that were potenital market
moverss (China data, US BLS jobs, UK election) and as it turned out, none of them ruffled many
feathers and that nice Mr. Market took them all in his long-gaited stride. Which is how these
thigns turn out sometimes, action isn't guarantee action after a headsup.
In other repeated news, I'm keeping an eye on the Loonie/Greenback forex pair, with a view to
changing the house assumption for analyses. Here's the five day chart of the pair...
...and as things stand, even though we're slightly above the line I'm going to stick with
USD$0.80=CAD$1.
1

Fundamental Analysis of Mining Stocks
This week we update on McEwen Mining (MUX) (MUX.to).
NOBS fundamental update report dated May 10th 2015
McEwen Mining Inc. (MUX.to) (MUX)
Company Overview
McEwen Mining Inc. (Canada: MUX.to, USA: MUX, Stuttgart MCF.sg) is a junior producing gold
and silver mining company operating in Mexico and Argentina. Its flagship asset is the El Gallo I
mine in Sinaloa, Mexico, with its other major asset is its 49% ownership of Minera Santa Cruz
S.A, owners of the San José mine in Argentina. McEwen Mining also has exploration stage
assets in Mexico and The USA. Current share structure is as follows:
Shares out: 300.1m
Options: 5.1m
Fully diluted shares: 305.2m
Current share price: $0.99
Market Cap: $297.1m
Approx cash per S/O: $0.05
All prices are in United States Dollars unless stated. Forex U$0.80=CAD$1
NB: As in the original IKN298 report, we again uses the US Dollar and the NYSE ticker MUX as default.
Today’s update
As is the way of these things, we're not going to repeat on much of the baseline info we've
previously covered around McEwen Mining (MUX) in today's note. This one is about its 1q15
results filed on Friday evening, so if you want to know more about the company and its
operations check out the original (and way too long) analysis on MUX in IKN298 dated January
25th 2015 (or if you've deleted it or you're new round here, feel free to mail me and I'll send you
over back copy no probs).
Catching up
Back in IKN298 we called buy on this stock, stuck a U$2 price target on it and to remind of the
bottom line thesis of behind owning MUX, here's how the conclusion section began:
Conclusion and recommendation
McEwen Mining (MUX) is an unrecognized (as yet) turnaround story, that’s
the long and the short of it. After being beaten to death by the market in 2014,
particularly in late 2014 when it was sold down in very large pieces by
institutions who needed (rather than wanted) to get out at any price, MUX in
January 2015 is still feeling the hangover effects of the exceptionally brutal
and heavy selling period. Yes it’s bounced from the lows, but it’s a long way
off even the lowest end of its previous trading range.
After that I went on and on about MUX the turnaround story, my stars I'm long-winded. No more
grand expansion plans for expansion's sake, the company has rationalized itself to suit the
austere market conditions and what we expect now is bottom line profits to flow and cash to get
collected in treasury. The IKN298 report also came just after another round of selling in MUX
when the stock moved down from its post-January bounce highs (the week that gold clearly
2

moved away from U$1,300/oz) as well as from much higher highs in 2014, so this chart saves a
lot of script blah-blah on that score:
In short, I could have timed the entry a little better but it wasn't that bad and the average down
at the right price a little later helped. we stand today with a solidly sized position in a stock that
has been moving sideways, waiting for a reason to moved further down or back up. Also, since
IKN298 we had MUX report its 4q14 numbers which we covered in a special Flash update
report on March 9th (just after IKN304). There were the normal charts and things over that six-
pager, to give a flavour here are the six overview bullet points from the piece:
1) Big write downs/impairments, which made for a heavy net loss on the bottom line
2) Backing out the impairments MUX made an operating loss on the quarter, therefore my
prediction of its first operating profit quarter was incorrect. However it was still an OK
quarter once you dig on the numbers.
3) San José in Argentina (49% MUX) underperformed. Again. That’s the main reason it missed.
4) El Gallo in Mexico (100% MUX) posted good numbers. This is the main positive to take into
2015.
5) Guidance for 2015 that’s in-line with previous expectations. Costs good.
6) A reasonably healthy looking balance sheet position, with the good things outweighing the
weak points.
IKN313 back and the one thing I got really wrong was the call to see MUX rally, because then it
was a U$1.01 stock, today it's U$0.99. Then again, gold has flatlined and the whole sector has
followed suit so it's not a case of MUX doing badly, more that it hasn't shown any alpha yet.
Which brings us up to date and we now concentrate on the 1q15 financials released by MUX on
Friday evening, because they might just provide the spark this stock needs. We'll do it in the
following way:
1) A look at production, sales, costs and dividend received from San José, the Argentina JV
with (51% Hochschild operator, 49% MUX).
2) A look at production, sales and costs at the 100% owned El Gallo 1 mine in Mexico. We also
check the latest on that April 2015 robbery suffered by the mine.
3) Consolidated financials, loose ends.
4) A discussion and conclusion.
So let's get on with it.
1) San Jose (49% MUX)
MUX/HOC pre-released the 1q15 production figures for San José (aka Minera Santa Cruz or
'MSC') but by way of the quickest reminder, these three charts show that production tonnages
3

are typically lower in the summer vacation and scheduled servicing downtime Q1, with 2015
being no exception.
San José (100%): Tonnage mined, per qtr
175
150
125
100
75
50
25
0
We weren't expecting sales miracles from San
José in 1q15 and as mentioned on the couple
of occasions in the run-up to Friday's MUX
filing, I expected MUX to take a small loss on
its 49% holding though seeing a breakeven
return wouldn't have surprised either, as the
financials are controlled by HOC and they tend
to adjust the final bottom line flow to suit
themselves and their consolidated company
results. There are two main reasons for the
small profit it eventually reported from MSC
Fiday, one is meh, the other is a clear positive:
a) The meh was on a tax recovery from San José due to the devaluation of the Argentine
Peso against the US Dollar. The company had deferred local income tax assumptions already
baked into its books, so the weaker Peso means that the tax bill got cheaper in US Dollar terms.
This is the type of welcome break that makes the bottom lines look slightly better than they
would normally, but the old saying about death and taxes will remind us that this will only ever
be a temporary factor
b) The good was the drop in cash costs. Now I don't care so much for average received
prices per ounce or cash costs per ounce at San José, what we need to know are the absolute
figures for revs, COGS etc. So here's how cash costs came out and what matters most here is
the All-In number, which at U$43.39m
is the lowest for the last three years
(since the 1q12 period not shown on
this chart, to be exact). It's also
substantially lower (U$3.41m to be
exact) than the equivalent quarter of
2014, which gives a fairly decent
straight line on the costs compared to
throughput and production. In short, it
may be surprising to some people out
there but even in high-inflation
Argentina it's getting cheaper to run a
mine, and that's good news for the
rest of 2015.
As for sales, your answer is...
4
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2 tse51q3 tse51q4
source: HOC/MUX filings (MUX 49% attributable)
sennot
cirtem
s000
San José (100%): Gold Prod. and 2015 ests
30
25
20
15
10
5
0
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2 tse51q3 tse51q4
Koz Au
source: MUX/HOC filings (MUX 49% attributable)
San José (100%): Silver Prod and 2015 ests
2000
1600
1200
800
400
0
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2 tse51q3 tse51q4
Koz Ag
source: HOC/MUX filings (MUX 49% attributable)
San José (100%): Total cash cost & all-in cash cost, qtr
U$m
70 tot cash cost
65 All-In cash cost
60
55
50
45
40
35
30
25
20
15
10
5
0
1q13 2q13 3q13 4q13 1q14 2q14 3q14 4q14 1q15
source: HOC/MUX filings. IKN ests (MUX 49% attributable)

U$m San José (100%): Reported sales, per quarter
75 68.50 69.70
70 64.63
65
60 58.69 56.90
53.20
55
45.89
50 43.80
45
38.30
40
35
30
25
20
15
10
5
0
1q13 2q13 3q13 4q13 1q14 2q14 3q14 4q14 1q15
source: HOC/MUX filings, IKN ests (MUX 49% attributable)
...U$45.89m, which was slightly better than I'd forecast because of some silver sales from
inventory plus a very decent average sales price on the quarter of U$17.02 (San José
benefitted from prices on deals struck during 4q14 when silver prices were a little higher that
were delivered in 1q15). And as exploration capex is current minimal and that tax clawback
works in San José's favour, the U$2.5m difference between sales and All-In costs is close to
being all she wrote about San José in 1q15. To underscore that, here's a chart with a mouthful
of a title...
The MUX 49% of San José: Reported sales minus all-in costs
U$m versus reported quarterly income on investment
9 Reported sales minus all-in costs
Divi from MSC
7
5
3
1
-1
-3
-5
1q13 2q13 3q13 4q13 1q14 2q14 3q14 4q14 1q15
source: MUX filings, IKN calcs
...but it's really quite simple:
• It's calculated on the 49% of San José attributable to MUX
• The red bar shows sales minus All-In costs
• The green bar shows the dividend booked by MUX on its participation in the quarter
As you can see (e.g. 3q13, 4q14) there are sometimes extra things going on between these two
sets of numbers that skew them off, but normally they're pretty close to each other and that's the
casein 1q15 as well.
The bottom line to San José in 1q15 is that it came in at the upper, optimistic end of The IKN
Weekly forecast, the one I tend to mention as a reasonable best case without ever trying to
expect it because I'm that conservative guy who likes baking in room for error. The tax break
helped put a cosmetic sheen on the numbers and add $300k to the MUX consolidated numbers,
all good. But the thing to really like here is the costs number, which came in very nicely and
proves that the act of mining for metals is getting cheaper even in basket case Argentina.
1) El Gallo 1 (100% MUX)
This is the mine that was robbed in April and caused headlines due to the event and the Rob
McEwen PR disaster that followed. So before we go on to check the numbers, let's catch up on
what we now know about the El Gallo 1 robbery. Three points to make:
5

a) The original estimate for the theft was for 900kg concentrate containing 7,000 oz gold. That's
now been adjusted to 600kg concentrate containing 6,350 oz gold. I don't find the gold ounce
adjustment weird, but I do find the conc kilo adjustment weird. After all, it's tough to know
exactly what's contained in any given shovelful or bag of conc, but hell's bells I know the
difference between 600kg of something and 900kg.
b) The company and the insurance company are still in discussion about the amount
recoverable. In another part of the 1q15 report, MUX states the stolen good have (quote) "a cost
of approximately $2.8 million and estimated fair value of $7.7 million as of April 7, 2015". Put
those two statements together and it's clear that the insurance company loss adjuster is hard at
work on this case. If you want my guess (and it's only that), MUX will get between $4m and $5m
back from the Shylocks. If so, that wouldn't be such a bad result.
c) This is something that cannot happen again and if G&A goes up in 2q15 due to MUX buying
more things and hiring more people, so be it. Another similar heist and I'm out of MUX
immediately, because it will be an enormous tell on way-less-than-best practices at the
company. But if it turns out to be an isolated incident (and let us note that in Mexico we seen
several similar events but no repeat thefts at the
same mines...yet) it's not going to be a big hit in MUX: El Gallo 1, gold production per quarter
the great scheme of things.
18
16
Production: With that out the way, onto the real 14
job at hand for El Gallo 1. First up production, 12
which was pre-announced so here right is a 10
reminder of that, plus some adjusted guesstimates 8
6
for the next three quarters (we'll get to that later):
4
2
On the subject of production, here's something 0
buried in the 1q15 filings which caught my eye:
"Production would have been higher
during the first quarter of 2015 had the
Company not upgraded its furnace in March, which delayed scheduled gold
pours. Subsequently, a portion of this concentrate was stolen as described in
Note 14 to the Consolidated Financial Statements."
That has the look of a big tell on MUX's (i.e. Rob McEwen's) strategy and plans for MUX in
2015. If we consider the original guidance given by MUX for El Gallo 1 in 2015...
...and then note the following about the 1q15 numbers...
• Ore production at 319,811 tonnes was a mile ahead of the 850k annual run rate
(which per quarter average would be 212,500 tonnes).
• Average grade in 1q15 at 3.17 g/t was also a mile ahead of the 2.60 g/t
guidance.
...the inference from projecting out 1q15 is that MUX is aiming to beat its 2015 guidance not just
by a bit, but by a mile. By way of an example (and discounting all robberies of concentrate past
and present), if we take an average mined tonnage rate of 1.2m tonnes on the year (300k t/qtr)
and an average grade of 3 g/t, then assume a 65% recovery rate which is slightly lower than the
implied 70% rate MUX has guided with this year, you get this:
6
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2 tse51q3 tse51q4
Koz Au
source: company filings, MUX ests

(1.2mmt X 3.0 g/t X 65% recovery) / 31.1 (grams to troy ounces) = 75,241 oz gold
That's 50% higher than the 2015 guidance and not only that, but it seems to fit in with what
MUX is telling us about the end of 1q15, the furnace and how its very decent 15,243 oz gold in
Q1 would have been that much better if they had all the moving parts working. As it is, for the
rest of 2015 I'm not pitching as high as 75k oz Au, but I am now forecasting a stong 63,200 oz
gold from the mine this year. For what it's worth, this would fit into the pattern established in
previous years of under-promise/over-delivery (UPOD):
El Gallo: annual guidance vs results
Year Guidance Au Result Au
2013 27,500 31,000
2014 37,000 38,168
2015 50,000 EST 63,200
source: MUX MD&As
And to reiterate, as long as grade remains high and MUX continues to shift the amount of dirt it
did in Q1, this IKN forecast that's plenty higher than official guidance is very reachable. In fact,
in a Goldilocks scenario (yes, I've noticed the word back in fashion too) there's a case for over
80k oz gold, but keep that one firmly under your breath.
El Gallo 1 Sales: And now for the single reason MUX returned a healthy net profit in 1q15,
here's the chart to do that (right):
The MUX production of 15.2k oz gold (and
remember that silver production is very minor at El
Gallo 1, the whole game is gold here) was a new
quarterly record, coming on the back of the higher
than guidance mined tonnages and much higher
gold grades. But the sales were even higher at
18.6k oz, due to the lag in sales frm the 4q14
period. That's a normal catch-up, nothing
nefarious going on, but it means revenues came in
strongly as seen here below:
MUX: El Gallo 1 revenue breakdown
24
19
14
9
4
-1
7
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2 tse51q3 tse51q4
MUX: El Gallo 1, gold production vs sales
Koz Au
20
18
16 Au prod
14 Au sold
12
10
8
6
4
2
0
1q13 2q13 3q13 4q13 1q14 2q14 3q14 4q14 1q15
source: company filings
U$m
Ag calc revs ($m)
Au calc revs ($m)
source: company filings, IKN calcs
In this chart I'm adjusting for the robbery in 2q15, plus using a U$1,200/oz gold price
assumption for the rest of 2015 (we were using $1,250/oz and $1.3k in the previous model).
Then when you stick the revenues results and forecast against cash costs (total costs are there
for reference, the important one again is the orange All-In cash cost number), here's what
comes out:

MUX: El Gallo 1 Sales versus cash costs
(total and all-in cash costs included)
25
20
15
10
5
0
8
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2 tse51q3 tse51q4
U$m
reported sales
tot cash cost
All-In cash cost
source: company filings, IKN calcs
I like this, because it fits in with the plan for buying MUX in the first place. We'd assumed that El
Gallo 1 starts to become strongly profitable in 2015 for the first time and that's exactly what
1q15 showed us and the rest of 2015 predicts on the model, even at the now-tempered
U$1,200/oz gold price forecast. The robbery is a bump in the road yes, but assuming it a one-
time event we're now looking at a mine that has its costs nicely under control and will be a cash
machine this year, even without a rise in the gold price. With costs now brought to heel, MUX is
a profitable miner and that's what we were buying into at the end of January.
Financials overview
With operations considered, it's time to put it all together and we'll do that via the consolidated
financials. Today (attempting to be concise just for once) we'll mix up commentary on the 1q15
numebrs reported and the projections for the rest of the year, all via the usual suspect charts:
Operations: First up, revenues. In the model it may be reasonable to assume some small
positive diviend from San José for the quarters
to come, because the positive signals on MUX: Sales
25
lowered costs suggest that even under the
current prices for silver and gold, the mine will 20
produce free cash flow. Previously I'd pencilled
15
in U$1,250/oz gold and U$17/oz silver for the
breakeven there, that might turn out to be a little 10
too pessimistic now. However, for modelling
5
purposes (and gold/silver may still show
weakness in the next couple of quarters, you 0
never know) I'm going to assume that MUX's
49% in San José is a net neutral for the rest of
2015, with neither gains or losses to come.
Therefore, revenues are driven wholly by El
Gallo 1 and here's the chart, the only difference
to the El Gallo1 revs chart above is an
estimated $4m gain from the insurance
payment on the robbery, which is added to the
2q15 period and I repeat clearly, is my guess
and not some sort of definitive figure (or timing).
Costs (right) are looking regular and reliable at
El Gallo 1 these days.
Put them together and this is what comes out:
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2 tse51q3 tse51q4
$m
source: company filings
MUX: Total operating costs
30
25
20
15
10
5
0
41q1 41q2 41q3 41q4 51q1 tse51q2 tse51q3 tse51q4
$m other
G&A
Exp costs
COGS
source: company filings, IKN ests

MUX: Total operating income (incl San José) versus
Total operating and exploration costs (minus impairments)
35 31.6
30
25.0 24.7
25 23.2 21.2 20.8 20.8
20 16.4 18.218.7 18.2 19.2 19.1 18.0 18.0 18.0 18.0
15 13.3 13.8 14.0
8.9 9.7 9.2
10
4.4
5
0
9
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2 tse51q3 tse51q4
$m
tot op income
Tot op costs & exp
source: company filings, IKN ests and calcs
And in per share terms on operating revenues only (remember that MUX typically enjoys tax
breaks too). That 1q15 result is a sight for sore eyes, a MUX that returns a good and proper
profit on a quarter's worth of financials. Exactly the bet here at The IKN Weekly.
MUX: operating earnings per share
0.03 (impairments backed out)
0.02
0.01
0.00
-0.01
-0.02
-0.03
-0.04
-0.05
-0.06
-0.07
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2 tse51q3 tse51q4
cents
source: company financials/IKN ests
At the metals price deck of $1,200/oz gold and $16/oz silver, MUX should be able to operating
and post net profits for all quarters going forward. 1q15 at 2c/share OEPS got the benefit of
those extra gold ounces sold, so the quarters to come should be a little lower, but still profitable.
And that, ladies and gentleman readers, is the turnaround we wanted to see. For sure it's not a
done deal for the rest of 2015 yet, only for 1q15, but that's a reasonable looking guide and if
production beats guidance the way it might, these numbers are clearly conservative even at
$1.2k/oz Au. The metals start moving and MUX goes much higher, period.
Balance sheet: The operations are improving, cash costs under control and if HOC.L reporting
at San José doesn't throw a spanner in the works,
its better cost profile is looking less of a drag on 1400 MUX: Assets overview
the MUX consolidated numbers than was
1200 presumed a few weeks ago. All this is good, it's
1000
the balance sheet where we'll see the net effects
800
of the turnaround. Assets look like this (right):
600
400
There were no further impairments or write-downs
in 1q15 because as we've assumed (not a difficult 200
call) MUX has done all the writing down of asset 0
values and taken all the necessary hard knocks
already. 2014 was the "kitchen sink" year, 2015
sees a different corporate animal. But we can't
really see much change in the global overview
chart, because fixed assets drown out the place we're going to get the advances. Therefore,
current assets chart only:
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2 tse51q3 tse51q4
$m
current
total fixed
source: company filings, IKN ests

MUX: Current Assets
80
70
60
50
40
30
20
10
0
10
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2 tse51q3 tse51q4
$m other current
inventories
IVA tax receivable
cash
source: company filings
Above all, see how the cash treasury position has just moved up in 1q15. With more free cash
flow predicted from operations, the rest of 2015
should see similar cash collection (exploration
budgets have been pared right back, with MUX
stating it's good with the rock it has delineated at El
Gallo 1 until end 2016). It gets better when
considering working cap (right) which is the real
acid test, because we're already higher than in
3q14 on this metric and set to return to early 2014
levels, the period before MUX bit the bullet and the
heavy lifting on the financials was done. The other
thing here; that's the type of cash MUX needs to
grow organically and get Gold Bar up and running
with little or no further share dilution.
Liabilities are like this. By way of a reminder (no new insight), one of the things MUX had to turn
around in 2014 was is leverage to debt as it moved from the growth monster idea to the more
rational and leaner company it is today. There's no reason to expect this new debt profile to
change in the quarters to come, this is now a tight and solid balance sheet.
MUX: Liabiltiies Breakdown per qtr
300
250
200
150
100
50
0
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2 tse51q3 tse51q4
source: company filings
srallod
fo
snoillim
60 MUX: Working Capital per qtr
55
50
45
40
35
30
25
20
15
10
5
0
A/Cs payable
LT debt
other current debt
Discussion and conclusion
MUX stuck in a good 1q15 report on Friday evening, which fulfilled the main objective of Rule
One, it made a net profit. It also showed that El Gallo 1 has turned into a decent little gold mine
(security detail notwithstanding) and the costs profile news out of 49% owned San José was
good too. All I ask of that one is its effects are negative in 2015 and if 1q15 is our judge, that's
going to be the case.
The upside for MUX we've forecast is now more likely. My call on the 4q14 numbers being good
enough turned out to be incorrect so feel free to take my unerring optimism here with a pinch of
salt but these 1q15 numbers are better from top to bottom, they show without further doubt that
MUX can deliver on what it's been promising. What's more, there's more than a hint (and the
ciggypack maths backs this up) that MUX is seriously underpromising on its 2015 guidance of
50k oz Au at El Gallo 1 and as a result, I'm upping the target for the mine to 63,200oz gold.
We'll see how stupid that was in January 2016.
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2 tse51q3 tse51q4
source company filings/IKN ests
srallod
fo
snoillim

As for a price target, I'm sticking firmly with my $2 target in the medium-term but for a first stage,
I'd point you to the very conservative looking book value now at MUX (after all those
writedowns) plus the way the P/BV ratio has levelled out. With the assets held, there's no
reason why this company shouldn't be able to get
back to a 1.0X P/BV ratio now that it has its MUX: Price/Book Value ratio, per quarter end share
operations running profitably and cash is being 1.50 price and filings
added to treasury, rather than being taken away. 1.25
That would imply a U$1.50 intermediate price
1.00
target and that's 50% higher than today's.
0.75
0.50
Finally, I'm not going to promote MUX to Top
0.25
Pick just yet. For that I'd want all ducks in line
0.00
and I'd be happier when I see a second set of
quarterlies come out in 2q15 that say the same
storng things we saw in 1q15. The position is a
decent enough size right now and although
during the trading week I have a really itchy trigger finger on the cash held on the sidelines right
now (still plenty of dry powder left here, happy to say), I can afford another quarter of watching
from the inside before making a call on whether to double down on this trade. This, by the way,
is why I prefer making trading calls ovder the weekend. Bottom line: A good first quarter 2015
from MUX. Own it, it's going higher.
End of Report
Stocks to Follow
Of our 16 open positions, nine made ground last week (MUX, BTO.to, TGZ.to, LSG.to, TGD,
LGN.v, LRA.v, REG.v, IRL.to), one was unchanged (DNA.to) and six lost ground since last
weekend (AG, SAM.to, FOS.to, ATM.v, NCQ.to, FCV.v). All moves were small except for the
strange and false looking 32.4% gain in Regulus Resources (REG.v). The only other change
outside the penny-here-there norm was Lake Shore Gold (LSG.to up 5.8%) which continues to
trade like a champ, even if this long does say so.
We currently have 16 open positions in our Stocks to Follow list, one more than our our self-
imposed maximum in a temporary situation that will change soon enough. Of those 16, seven
are in the green and nine are in the red.
11
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 won
P/BV
source: NYSE, Company, IKN calcs

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$0.99 -9.2% Added Mar'15, top value
B2Gold BTO.to buy C$2.32 12-sep-14 C$1.91 -17.7% Dependent on Au price moves
Teranga Gold TGZ.to buy C$0.55 15-feb-15 C$0.70 27.3% New position, 83c tgt
Lake Shore Gold LSG.to buy C$1.04 07-apr-15 C$1.27 22.1% New FCF+ prod. Poss M&A tgt
First Majestic AG hold U$10.51 10-aug-14 U$4.96 52.8% Holding, only silver exp left
Timmins Gold TGD spec buy U$0.60 19-apr-15 U$0.624 4.2% New, ST spec rebound play
Starcore Intl SAM.to hold C$0.12 10-jan-15 C$0.145 20.0% 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$0.27 -3.6% New trade, 36c/share of cash
Atacama Pacific ATM.v spec buy C$0.19 26-apr-15 C$0.22 13.6% New Spec buy, cheap adv proj
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$0.67 -36.2% small Cu play low vols, hold
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.30 -73.9% 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$0.90 40.6% Nov'14 tgt $1.25, top Au expl
Regulus Res REG.v spec buy C$0.30 06-apr-15 C$0.49 63.3% New bet on 2016 drill prog.
Focus Ventures FCV.v hold C$0.23 01-jul-12 C$0.20 -13.0% 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'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$3.57 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. Just small ones this week, not that much to
report on a flattish week.
Teranga Gold (TGZ.to) (TGZ.ax): TGZ is doing well and on good volumes, too. No sign that
it's about to break higher and run towards my 83c target (at which I'll sell) and that's fair
enough, but there's clear accumulation going on at current levels. Gold price will dictate of
course, but I'm stating to entertain the idea that TGZ is going to leave its 60s days behind it as
long as gold behaves. This is one of those trades into which once you've bought well, it allows
plenty of room for comfort. It's the same with holding Dalradian (DNA.to) through its current
fallow period.
Atacama Pacific (ATM.v): Volume dropped off which is understandable, what with the sector
being very out of fashion (if Lundin Gold (LUG.to) (1) gets the big pump by a established house
and gets virtually zero reply from retail, we have to be modest in our near-term expectations
for the real backwater stocks). But the price held up ok and that's good. At under 20c I may
pick at a few more shares, but there's no rush here.
Dalradian Resources (DNA.to): DNA reported its 1q15 on Tuesday, with a set of numbers
that caused zero surprise to anyone and a confirmation of its work schedule and budget for the
rest of the year. I noted the way in which the 2015 drill program was set both for infill
development (the pre-feas) but would also test for outstep mineralization along strike in order
to potentially add ounces. With working cap of $41m as at March 31st it's in great financial
shape to complete its work. Easy hold.
12

McEwen Mining (MUX): See above for fundies talk, here we note that trading was in a
reasonably tight range until Friday morning, when some-or-other seller knocked the US MUX
symbol down to 95c before buyers showed up. As long as gold bullion prices behave tomorrow
Monday morning, I think that seller will have a dose of regret if my interpretation of the solid
MUX quarter (above) is the right one. Time for a rally.
Lake Shore Gold (LSG.to) (LSG): While reporting on its quarter on April 29th, I noted on the
blog (2) that "...the optimism from the company about 144 is palpable". On Monday May 4th
we had more news from LSG about the 144 Gap Zone that confirmed the impression (3) and
here's an excerpt that give the gist as good as any other:
"The new underground drilling at the 144 Gap Zone will increase the 2015 underground drilling
program from 30,000 metres to 40,000 metres. The additional drilling is a result of the success of
recent surface drilling in identifying a zone of gold mineralization that is larger than envisioned in
the original underground program. The 10,000 additional metres is also intended to increase the
proportion of measured and indicated resources to be included in the first resource estimate for
the 144 Gap Zone, to be released as part of the Company's next reserve and resource update
early in 2016."
Go read the whole thing but if it's not clear that LSG
has a tiger by the tail here, then I don't know what
you need. LSG now has $7m committed to
exploration of this fast growing deposit that looks
easily accessible from current operations and ready
to add resource, then reserve, then mine life to the
LSG assets. Goldcorp must be watching even more
closely now. In trading, LSG continues to impress in
absolute terms and against peers. A good old-
fashiones all-time high breakout awaits the stock at
C$1.36 or above and call me a biased long if you like,
but I think it's going to do just that.
B2Gold (BTO.to) (BTG): A bit of buying in BTO and volumes were reasonable, but there's still
no clear resolution on the stock and it looks a little out of fashion (compared to its market-
leader role of 2014, at least). BTO is due to report its quarter pre-open Friday (May 15th) with
a conference call too. I'll be busy that morning, reading and listening. IKN314 for more.
Phoscan Chemicals (FOS.to): A word to reiterate
one of the points I made in the original piece on
FOS.to a few weeks ago, when deciding to make the
purchase. The value is obvious in this stock
(substantially more net cash per share than its share
price, they don't come easier than that) but those
who follow(ed) me in could become frustrated with a
lack of action. The company's patience on finding its
deal is well-documented as its been the way it is for
years, not just a few quarters, so we don't know
when it's going to make a move. In the meantime,
those bought in can get bored with any cash tied up
in the trade and may want to find another place to
deploy it. Therefore they sell and leave, keeping the price depressed.
Well folks, that's part of the territory here, there's a clear opportunity cost of holding this one
and unless you're willing to take that on, it's not for you. In my case it's going to be easy
because it's cash I don't (and won't) need for other matters, it's also a small position. All I ask
is that you think clearly about your own portfolio, your financial needs and your trading strategy
before buying into something that may seem to you after a while to be dead money. You know
yourself better than I know you, after all.
13

Focus Ventures (FCV.v): Friday saw FCV announce (4) make formal and put numbers on the
snippet picked up and noted in IKN312 last weekend, that the current placement was
oversubbed. The raise is now expected to close at $4m gross proceeds instead of the original
$3m and that's what I call a good signal in these tough times.
Regulus Resources (REG.v): Just one trade of
3,380 shares on Friday changed the 40c price to a
54c price. It wasn't even at the end of the session
either but the trade stuck, only one small trade
came in to knock doiwn a bit and this weekend we
have REG.v at 49c, 32.4% higher than this time
last week. Hey, weird things happen to juniors.
Please also see "Peru Cajamarca: Regional
government formalizes support for "responsible
mining"" in the 'Regional Politics' today below.
The Copper Basket
After nineteen weeks of 2015 The Copper Basket is showing a 5.00% loss to level stakes.
company ticker price 1/1/15 Shares out Market Cap current pps gain/loss%
1 Capstone Min. CS.to 2.03 381.95 565.29 1.48 -27.1%
2 Reservoir Min. RMC.v 3.96 47.55 212.07 4.46 12.6%
3 NGEx Resources NGQ.to 1.17 187.71 176.45 0.94 -19.7%
4 Nevada Copper NCU.to 1.65 80.5 149.73 1.86 12.7%
5 Amerigo Res ARG.to 0.27 173.65 74.67 0.43 59.3%
6 Copper Fox CUU.v 0.135 402.96 72.53 0.18 33.3%
7 Western Copper WRN.to 0.68 93.68 54.33 0.58 -14.7%
8 NovaCopper NCQ.to 0.58 60.15 40.30 0.67 15.5%
9 Hot Chili Ltd HCH.ax 0.16 333.11 39.97 0.12 -25.0%
10 Panoro Minerals PML.v 0.295 220.25 34.14 0.155 -47.5%
11 Regulus Res REG.v 0.35 56.39 27.63 0.49 40.0%
12 AQM Copper AQM.v 0.06 141 8.46 0.06 0.0%
13 Metminco MNC.ax 0.008 1822.6 7.29 0.004 -50.0%
14 Catalyst Copper CCY.v 0.305 31.41 6.60 0.21 -31.1%
15 Coro Mining COP.to 0.045 159.37 4.78 0.03 -33.3%
NB: HCH.ax & MNC.ax priced in AUD$, rest CAD$ Portfolio avg -5.00%
An improvement on the week, thanks mainly to 4% The Copper Basket 2015, weekly evolution
a weird and big move on tiny volume in 2%
Regulus (REG.v up 32.4%). The overall basket 0%
improved by 1.72%, with six winners (RMC.v,
-2%
PML.v, CUU.v, HCH.ax, REG.v, CCY.v), three
-4%
unchanged stocks (NGQ.to, AQM.v, COP.to) and
-6%
six losers (CS.to, NCU.to, WRN.to, ARG.to,
-8%
NCQ.to, MNC.ax). REG.v was the only big
-10%
winner, the biggest percentage losers were
Metminco (MNC.ax down 11.1%) and Capstone
Mining (CS.to down 9.2%).
14
ht4naj ht11 ht81 ht52 ts1bef ht8 ht51 dn22 ts1ram ht8 ht51 dr32 ht92 ht5rpa ht21 ht91 ht62 dr3yam ht01
source: IKN calcs

I've chosen the 90 minute chart here rather than the
60 minute because this way you get the back end of
the previous week's big move, which adds some
needed perspective. What we saw this week, in
comparison, was flat as a pancake price action and
the word is that China's State level buyers didn't
want to pay the new levels and backed off. So much
for auto-bull and a point for your author and his "let's
wait for $3 before getting bullish" position.
In other news, Cochilco's latest survey of their panel
of 12 experts on the copper price came out on
Thursday (5) and pegged the 2015 expected average
price at U$2.77/lb, which is down from the U$3.08/lb
estimates for 2015 made before the beginning of the
year. That's probably more of a commentary on the
experts than the copper market, but it does give an
idea of what the industry is expecting in the next six
months or so.
For what it's worth, they're pitching for U$2.89/lb in 2016 and then U$2.98/lb beyond that.
Cochilco doing its thing here (6).
We move to inventories and here's the weekly action and their bullet points:
• Overall, a quiet week for copper traders (about time too) which took the edge off the
sector's bullish run. Total stocks dropped, but only very slightly by 1,499 metric tonnes
(mt) (-0.3%) to close out the week at 548,433mt.
• Shanghai Futures Exchange stocks were at 188,165mt, which put the brakes on the big
drawdown as did reports that Chinese State stockists had stopped hitting their buy
buttons and weren't buyers at the new $2.90-and-abouts price.
• LME warehouses stocks moved up just 950mt (+0.3%) to finish at 339,075mt.
• Comex warehouse stocks dropped 833mt (-3.8%) to finish at 21,193mt.
The Shanghai-only weekly chart shows the stocks made a sideways move of a very similar style
after their big drops in 2014, but that was at the approx 140k level. Last week's could be deja
vu all over again, but 40k or so higher.
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 dr3yam
Mt Cu
source: Cochilco
Now for some notes on a few of our basket components.

Amerigo Resources (ARG.to): We again note significantly sized insider selling in ARG last
week, again from Steven Dean (7):
That 1.1m shares dropped in the space of a month and again, it's up for debate how significant
that might be to its future price action (clearly the price of copper is a bigger influence right
now and show moves that may easily push ARG.to further up or back down) but it's of enough
size to report here and allow readers to put it in their own mix.
Capstone Mining (CS.to): Hedging is is poison to your share price, call it prudent or a wise
protection measure or whatever
other euphemism you prefer,
hedging will do for your PPS.
Wednesday pre-bell CS.to
announced (8) that it had put
hedges on approx 60% of its copper
production forecast, or 36kt Cu, until
September 30th via a costless (word
used loosely) collar of a reasonably
wide-ranging $2.60 to $3.10 per
pound, but the psychological effect
was stronger than the likely financial.
The news had already started doing
the rounds the previous day and
what you see on this chart (10 days
of CS.to vs COPX copper producer
ETF) is all about that. The result
wiped out all the gains CS.to had enjoyed the previous week on the back of the copper pop. As
for the reasons for the drop, choose either/or/both from:
1) The market never likes to see its earnings blue sky potential crimped.
2) The talk about the hedge program necessary to guarantee the terms of the debt covenant
returned the spotlight to CS.to rather pressured looking balance sheet.
The Low Cost Producer Basket
After 19 weeks, the 2015 Low Cost Producer Basket is showing a 9.56% gain to level stakes.
16

company ticker price 1/1/15 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Goldcorp GG 18.52 830 15.55 18.74 1.2%
2 Barrick ABX 10.75 1164.67 14.85 12.75 18.6%
3 Newmont NEM 18.90 499.08 13.00 26.04 37.8%
4 Franco Nevada FNV 49.19 156.5 8.34 53.30 8.4%
5 Silver Wheaton SLW 20.33 403.75 8.02 19.86 -2.3%
6 Agnico Eagle AEM 24.89 214.12 6.79 31.69 27.3%
7 Kinross KGC 2.82 1146.2 2.82 2.46 -12.8%
8 Buenaventura BVN 9.56 254.19 2.81 11.04 15.5%
9 B2Gold BTG 1.62 921.27 1.47 1.60 -1.2%
10 Pan American PAAS 9.20 151.64 1.44 9.49 3.2%
all prices in U$, using NYSE ticker prices Portfolio avg 9.56%
A negative week for this basket, with some consolidation going on and what looks like rotation
out of the larger cap stocks into the smaller caps. That's reasonably healthy if I'm interpreting
this right. Just two winners (KGC, BTG) and the other eight lost ground, but nearly all the
moves were small or very small and the only outliers were B2Gold (BTG up 3.2%) to the upside
and Barrick (ABX down 3.7%) to the downside. Most weekly moves were under 1% either way.
Our basket opened up a small gap on our benchmark GDX, there's 0.91% between them now.
The Low Cost Producer Basket: Weekly performance
and comparative to GDX control
25%
20%
15%
10%
5%
0%
-5%
17
ts13ceD ht4naj ht11 ht81 ht52 ts1bef ht8 ht51 dr42 ts1ram ht8 ht51 dr32 ht92 ht5rpa ht21 ht91 ht62 dr3yam ht01
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 dr3yam
|
source: ikn calcs, NYSE/Nasdaq data
Barrick (ABX): I made a...pithy (is that the word ?) remark on the blog last week (9) about
the style-over-substance boost ABX got from its bullish sounding 1q15 earnings report, with the
optimistic "we shall conquer" type message coming straight from new-ish CEO John Thornton
that was lapped up at the time. And how the effect has quickly worn off. Here's the updated
version of the chart used in that post during the week:

I have to wonder who Thornton thinks is his audience for this "Back to the Future" spiel,
because I'd fancy he could wow and romance the non-specialist fund and hedge fund managers
looking for a way in to the mining sector, but he's not going to cut much ice with those who are
purely results and numbers driven.
Regional politics
Nicaragua: Hemco has problems
Last week saw the Bonanza mine in Nicaragua, the country's second largest formal operaiton
(after BTO's Libertad) shut down temporarily due to a dispute with local informal/artisan/illegal
(choose your preferred moniker) miners. The mine is owned by locally registered company
Hemco, which in turn is 90% owned by the Colombian private gold mining company Mineros
S.A. (head honcho the doyenne of Colombia's mining community Beatriz Uribe, no relation to
Álvaro). The informals mine around the main Bonanza mine area and typically sell their ore to
Hemco and they wanted more for their ore than the current terms. The informals set up a
roadblock and quickly choked off mine production, but by Friday the Hemco mine was back in
business and the company said they'd be back up to full speed by early next week. Hemco gave
no reason for the decision to re-start production, but the assumption is that they reached a deal
for better prices for informally mined ore (10).
We should in passing note that during the height of the roadblock on Wednesday, one local
miner was killed and 33 injured in a confrontation with the national police force who tried to
clear the main roadblock. This wasn't some sort of symbolic protest, it was real and heavy.
Peru Cajamarca: Regional government formalizes support for "responsible mining"
An interesting development out of Cajamarca when the Regional government, ostensibly led by
the jailed (on remand) Gregorio Santos therefore run day-to-day by his deputy Porfirio Medina
Vásquez, announced as part of the (typical in Peru governments) "first 100 days" speech of his
mandate that (11) Cajamarca would include responsible mining as part of the formal regional
growth and employment program. Some points to make:
1) This is not a new policy, but it's the first time the left wing MAS party of Cajamarca (led by
Santos) has made the growth of formal, responsible mining projects a part of their written
agenda.
2) Its strategy is to separate what it sees as good projects (e.g. Shahuindo) from bad projects
(the classic example being Conga). In fact most of the move is to keep Conga separated from
other mining operations and project of which they approve.
3) In theory at least, it gives us another reason to like (or perhaps hate less) exploration level
18

projects in Cajamarca, which draws my thoughts back to my current and small exposure to the
region via Regulus (REG.v).
Argentina: Sergio Massa's Presidential election campaign is falling apart
This weekend saw a big hit taken by the one-time frontrunner for the President's job, Sergio
Massa, when one of his chief allies quit his Frente Renovador party and made a lot of noise as
he slammed the door behind him. Dario Giustozzo was earmarked for the candidacy for the
Buenos Aires province governor's job until recently, but (12) when rich businessman and
established politico Francisco De Narváez turned up, made an informal pact with Massa to
assume the Buenos Aires Province candidacy and thoroughly annoyed Giustozzi. The way in
which he quit included accusing Massa of naivete and that his party had been taken over by
old-style politics that have little resemblance to the original idea, is very damaging to the
already faltering Massa campaign.
It's been signalled now for a few weeks, but let this be crystal clear from today: This is now a
two horse race, Scioli vs Macri. Massa is toast, take that to the bank.
Guatemala: VP Baldetti resigns
As political news goes, the resignation of your country's Vice-President due to her judicial
immunity being removed and the high chances she'll soon face multi-million dollar corruption
charges...yep, that rates as big news (13).
The fall of Roxana Baldetti has come mighty quickly and the chances that she's guilty of at least
a handful of corruption and bribery charges as close to 1.0 on the probability scale as you'd
care to imagine. The news Friday is obviously her taking the fall to try and stem the growing
accusations being levelled at the President himself, Otto Pérez Molina (giving Ottos around the
world a bad name), and it remains to be seen how Teflon he can be about the scandal. The
next likely date of interest is next Saturday May 16th, when a mass protest march is planned in
the country that was aimed at kicking out the Pres and the Veep, but will now probably aim all
guns at the top. As reported last weekend, Guatemala is going through a full-scale institutional
crisis that nobody should ignore and with Presidential elections in September, the entrenched
and self-serving elite establishment is rocking and fearful of some kind of people's movement
coming to the fore.
Your Tia Maria update
Among the main issues (14), a policeman died from injuries sustained a few days earlier from
clashes with locals, negotiations between government minister and the protesting locals broke
down again on Tuesday, then one of the local leaders was recorded in April asking for money in
order to stop the protests on a soundbite released last week that has the air of being selected
carefully and taken out of context, then on Saturday acting under newly passed emergency
powers, the government sent in 2,000 military personnel into the Tambo Valley who will be
there for the next 30 days. That final one is likely to calm things down for the time being and
that's a good thing. The other promising turn of events is that the governor of the Arequipa
region, Yamila Osorio, has asked (15) that the current EIA be examined and tested by an
international neutral third party body and if it comes up to scratch it should be ratified, but if it
doesn't Southern Copper should get busy on a new application. That's the single most sensible
thing I've heard from either side in weeks.
Feelings are running high on both sides (directly due to the idiots running Grupo Mexico) and
more than anything, a period to cool off and calm the waters would be most welcome.
Chile: Kinross has a Maricunga environmental issue
Kinross (K.to) (KGC) has had a long-running (I've seen pieces of paper since 2012 on this one)
environmental dispute over water apparently drained by the company's activities from a local
marshland/wetland nearby to its Maricunga mine. The issue suddenly accelerated last week
when KGC (16) was told on Tuesday by the nation's SMA environmental agency
(Superintendencia de Medioambiente) that the company had 10 days to file its plans to mitigate
19

and repair damage done to the swampland else faced closure of the mine within 10 days and a
fine of up to U$8.5m. Needless to say, KGC at Maricunga will suddenly care deeply about the
state of that piece of natural wilderness. The chances of Maricunga being closed on the 15th
are slim, but the event again shows how Chile is tightening up on the environmental faux pas
made by actors in its mining industry. No more free passes allowed there.
Mexico: Goldcorp at Peñasquito has an ongoing community problem
This situation (17) is that around 40 community land owners (ejidatarios) living around the
Goldcorp (GG) Peñasquito mine have control of water wells that GG needs in order to do its
mining and processing. The owners want to renegotiate the current deals and want some
U$10m for the continuing use of the water. GG has countered the owners committees and
leaders with accusations of extortion etc and says that the owners have no right to a new deal,
let alone to stop them from using the water.
Because it's now what Mexico considers to be a reasonably high-profile case against a foreign
mining company and gaining media attention, analysts there fear a snowball effect and other
land committees wanting new or better deals for their vital goods and services from mines they
host. A story that we wouldn't want to jump from minor coverage in The IKN Weekly to major
industry news on several fronts.
Market Watching
Mexican silver producers and 1q15 results
It so happens that four junior miners that are all primary silver producers and all have their
main operations in Mexico (in fact, apart from FVI's lesser Caylloma operation in Peru it's all
Mexico) reported their 1q15 financials last week and rather than depress myself by separating
my own long position stock First Majestic (AG) (FR.to) and examining just how mediocre its
quarter was, I thought I'd lump them together and run a more simple comparative analysis.
In this post on the blog (18) I've already opined that Endeavour Silver (EDR.to) did better than
most and after that was published Fortuna (FVI became the fourth to report. So here's a chart:
1q15 results of four (mainly) Mexican silver miners
$m
60 Revenue
55 Gross Profit
50 Operating Earnings
45
40
35
30
25
20
15
10
5
0
-5
EDR.to FR.to FVI.to GPR.to
source: company filings
Of the four, the most basic of eyescans will tell you that Fortuna Silver (FVI.to) is the most
efficient at converting its revenues into profits. EDR put in a reasonable effort but it's still not
much more than tickover type earnings, FR.to and Great Panther (GPR.to) fared worse.
But if we then consider relative market caps of our four...
20

Market Caps of featured companies in CAD$
CAD$m
800 703.2
700
581.1
600
500
400
249.8
300
200
90.7
100
0
EDR.to FR.to FVI.to GPR.to
source: TSX, company filings
...EDR.to stands out as the best potential bet.
• Those of you wanting leverage might want to risk GPR.to as a vehicle, but as I've seen
that one perma-underperform over years and doubt it's about to turn around.
• As noted previously on the pages on a boring amount of occasions, FVI is a well-run
mining company but looks expensive, or at best valued to perfection today.
• First Majestic is difficult to compare directly, because it has more in the way of fixed asset
value and when (if?) those mines start performing to scratch its profitability will improve
quickly. However it's now obviously lagging peers on the cost efficiency stakes, the big
miner of the foour isn't making the difference in cost reductions that others are, that's
clear.
• So overall EDR.to looks like the best turnaround story right now, at least on what we've
seen in 1q15. I've never been a fan of the company, but that won't stop me buying into it
if silver starts showing more strongly.
As for my current holding in FR.to, yes it's trying my patience somewhat now but I'm going to
give it one more quarter, to 2q15, before coming to a decision. And of course we need to keep
clearly in mind that we can do all the comparing in the world, but if silver goes up they all go
up and suddenly we're all genuises.
Gold Resource Corp (GORO) 1q15 results
On Friday afternoon Gold Resource Corp (GORO) announced its 1q15 financial results (19) and
the NR headline of a net profit of $5.1m (EPS 9c). Here's the SEC filing (20) with all the
numbers and today I'd like to revisit GORO, because unlike the days of yore this company is
more correctly priced these days and it's operations look much tidier, too.
Sales of gold were up, and rarely for Oz Au GORO: Gold production vs sales Au prod
GORO sales were higher than 11000 Au sales
10000
production (there's an average of
9000
1,500/oz qtr between produced and
8000
payable ounces). The 1q15 sales of 7000
8,678 oz means the lag has caught 6000
up some, but if you ask me there 5000
4000
are still around a thousand ounces
3000
"missing" from production over the
2000
last three quarters. If you consider 1000
GORO's gold-only production in 0
3q14, 4q14 and 1q15 is 23,736 oz 1q13 2q13 3q13 4q13 1q14 2q14 3q14 4q14 1q15
Au, and in the same period it's sold source: company filings
17,636 oz Au, the 6,100 oz
21

difference between the two numbers looks pretty steep.
But I'm not going to criticize GORO too much today because unlike just about every other time
the company has been mentioned on these pages, it's getting featured because it's put in a
solid quarter. The main reason is here:
U$m GORO: Revenues vs "true costs"
45 42.31
revenues
40 "true costs"
35 33.67
30 29.96 26.6627.43 29.41 31.29 27.4126.77 31.15 29.53 28.73
25 23.39
21.0521.47
20 19.27 19.69 18.79
15
10
5
0
1q13 2q13 3q13 4q13 1q14 2q14 3q14 4q14 1q15
true costs = prod costs + deprec&amort+ accretion + G&A + stock based
compensation + expl expenses + construction & development
It's the second quarter running where GORO has put in revenues number of around U$29m,
but this time the costs (here the "true
costs" at GORO, not just plain COGS) have
dropped sharply and smack of a company
that really has got its operations under
control at last. I've head they have a new
COO there and he's turned around the ops
side of the company well, so when I see a
average mined and throughput chart that
has tonnages dropping after all that showy
BS about getting nameplate capacity higher
(theoretically it's around 50% higher than
the current run rate), it looks to me as if
GORO has finally hired a guy that
understands not just about production, but
about economically smart production too.
Over at the financials, the numbers look modest but sustainable...
GORO: baseline mine financials
50
40
30
20
10
0
22
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1
GORO: Tonnage mined per quarter
120000
100000
80000
60000
40000
20000
0
U$m
revenues
COGS
Gross profit
source: GORO data
...as does the way in which operating profits move through the books to the bottom line.
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1
tonnes per qtr
source: GORO data

GORO: Evolution of profits
14
12
10
8
6
4
2
0
-2
-4
-6
23
21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1
source: company filings, IKN ests
srallod
fo
snoillim
op profit
pre-tax profit
Net Income
The final chart in this whistle-stop review of the GORO 1q15 is working cap, which is a weak
point as it's still dropping, despite those booked profits. Between the dividend payment
(1c/month) and the capex development done by GORO in the quarter, it's still not a cash
collector.
80 GORO: Working Capital per qtr
70
60
50
40
30
20
10
0
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1
source company filings, IKN ests
srallod
fo
snoillim
The bottom line: These days GORO shares are a lot cheaper than the high prices at which I
used to laugh, pour scorn upon and short the stock. At it's current around $3.50 (give/take)
share price and slightly below U$200m market cap, it looks reasonable value on a straight
numbers level. Personally it's never going to be one I'd invest in, because it's still run at a board
level by the same BS-merchants that ran snakeoil
sales techniques to get the unsuspecting on board.
That and its G&A per ounce (at $141/oz) is still way
too high and shows us a company board riding too
high on what's only really a small hog.
But this was a good quarter from GORO, no ifs or
buts, and I'd expect it to rally next week and those
into trading these momo specials may want to take a
closer look. At its current U$3.34 it's now at a
reasonable price point for this type of company.
Don't expect it to ever get back to the dizzier heights
of previous years because that's never going to
happen (without $2k/oz gold) but there are worse things out there. Yes, that was me saying
something positive about GORO.
The Coastal Gold (COD.v) fight: Additional thoughts
Further to last weekend's short headsup note and taking into consideration the several
developments in the fight for control of COD.v between First Mining Finance (FF.v) and Sulliden
(SMC.to), a few bullet points:

• If you're in at 3.5c or below (and there was reasonable amounts of 3.5 available last
week) that looks pretty good on a risk-reward level now.
• The big EGM on whether to accept the SMC offer has been delayed a couple of times, but
is now set for Wednesday 13th (21). If it goes ahead, nothing changes between then and
now and the SMC deal is accepted, I'd expect COD.v shares to drop back to 3c. There's
the risk for holders.
• But I don't think that's the most likely situation from here. For me, the most likely is that
SMC comes back and improves its offer a little between now and Wednesday, which won't
be as good as the FF.v offer on paper but the Bharti cronies running COD.v will say it is
and will recommend acceptance of the deal.
• If that happens, come Wednesday I'd expect it to be a too-close-to-call vote but with an
improved deal, the worst case for current holders would be a 3.5c share price.
• But if the SMC deal is voted down, it would imply the FF.v will be accepted and COD.v
shares will move up. There's the potential reward.
• The other scenario is that SMC doesn't sweeten its bid and the parties go to the vote as
stands. If so, it's again likely to be tight but I'd give the FF.v team a 70% chance of a win.
The bottom line: If you feel like a gamble and can get some at 3.5c or below, COD.v offers
more chances of a win than a loss from here. But be clear, entry price is everything on a deal
like this, don't pay up to play. For what it's worth, I'm not particularly tempted at 3.5c
personally, but if 3c is available I'd be more tempted to buy. However, chances are there will be
a whole bunch of bids at 3c so unless I'm reading this wrongly, it's one I'm likely going to treat
as a spectator sport on a personal level.
Timmins Gold (TGD) (TMM.to) 1q15 results
We got the 1q15 numbers from TMM on schedule Monday evening (22) and I was pleased with
what I saw, because the results fitted in with the house buy thesis. Reaction from the earnings
report has so far been non-negative, which is a nice way of saying that we haven't seen the
type of relief rally I've been looking for in the stock, not yet anyway.
This isn't going to be a big analysis, because the numbers really were very much in line with the
expected. This chart shows how revenues just about beat out COGS and gave TMM its modest
$2.694m gross profit.
24

TMM.to/TGD: baseline mine financials, 2012-2015
U$m revenues COGS Gross profit op profit Net Income
50
45
40
35
30
25
20
15
10
5
0
-5 source: TMM data
1q12 2q12 3q12 4q12 1q13 2q13 3q13 4q13 1q14 2q14 3q14 4q14 1q15
Costs were the key input to the quarter, because the pre-announced production and received
prices for metals gave us a close estimate on revenues (left). But to the right is costs...
...and they was just fine, a slightly cheaper COGS in Q1. Not spectacularly cheaper, but good
enough and we can expect that to improve on a per-ounce basis as TMM gets back to a better
produciton rhythm (or they say they will at least). This chart gives a close-up of profits:
TMM.to/TGD: Evolution of profits
15
13
10
8
5
3
0
-3
-5
2q13 3q13 4q13 1q14 2q14 3q14 4q14 1q15
source: company filings, IKN ests
25
srallod
fo
snoillim
TMM.to/TGD: Revenues
50 45.889 47.05 41.748 40.596 41.516 42.383
40 35.688 38.16 35.123 38.065 34.235
30.4 29.492 30
20
10
0
op profit
pre-tax profit
Net Income
We were after a pancake-flat earnings quarter from TMM (because that would be better than
many expected after its wholly crappy production number that sank the stock price) and that's
what we got. In the end net earnings came in at $-0.71m, which is an easy enough hit to take.
That's because over at the balance sheet...
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1
U$m TMM.to/TGD: Costs breakdown
40 36
32 28
24
20
16
12
8
4
0
source: company filings, IKN ests
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1
U$m
other impairment
G&A COGS
source: company data, IKN ests

80 TMM.to/TGD: Working Capital per qtr
70
60
50
40
30
20
10
0
26
31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1
source company filings, IKN ests
srallod
fo
snoillim
...TMM still has plenty of liquidity. With that, the downer Q1 quarter is done and now TMM has
incorporated the stupid purchase of Newstrike into its structure. And let's recall just how stupid
it was:
I'm not expecting all that near-40% breach to be covered but as TMM is one of the more widely
covered issues out there and is trading at a historical discount now, pulling back half that
distance won't be a tough one. TMM shouldn't stay out of fashion like this for a long time, so if
and when it gets the pump we'll be ready to sell into it and take some trading profits. When
buying I set myself a "max two months" time limit on this near-term trade, which gives me until
mid-June approx. That should be enough. An exit of 80c would be just fine if it comes.
Conclusion
IKN313 is done, we end with bullet points:
• McEwen Mining (MUX) (MUX.to) on Friday evening delivered its first clear and clean
bottom line net profit as a corporation. That's what I wanted to see from this company
and it's why I'm long. Now we get to see whether Rob McEwen's marketing and
promotional skills are still intact.
• Lake Shore Gold (LSG.to) (LSG) has all the look of one about to go higher. For sure we
always need a fair run on the gold price but it's one of the real go-to juniors right now.
• However, B2Gold (BTO.to) (BTG) isn't. Out of fashion out of style, but with its 1q15
coming up at the end of the week (and a bit of nibbling at the price noted last week),
I'll be watching this one closer than the rest. Expect numbers and charts and things on

BTO in IKN314.
• With 2,000 troops now in the Tia Maria Tambo Valley, either things will be calm for a
month or the violence will go off-scale. I fully expect the former and quietly fear for the
latter. Either way, there's no chance of soldiers camping out and providing a shield
while any mine is built and once tempers have cooled, the project will be as unworkable
as it was last week, last month or in 2011.
• Timmins Gold (TGD) (TMM.to) has delivered its breakeven quarter, time for it to
rebound. My patience on this stock will be limited to the mid-June time limit, as obvious
lagging value is one thing but value traps also exist. If TMM shows signs of becoming
one, I'll leave it to fend for itself.
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://incakolanews.blogspot.com/2015/05/scotia-on-lundin-gold-lugto-today-is.html
(2) http://incakolanews.blogspot.com/2015/04/teranga-tgzto-tgzax-and-lake-shore.html
(3) http://finance.yahoo.com/news/exploration-success-drives-expansion-144-130730406.html
(4) http://www.digitaljournal.com/pr/2548231
(5)
http://www.cochilco.cl/Archivos/destacados/20150507101150_Comunicado%20Encuesta%20Encuesta%20Precio%20d
el%20Cobre%20I%20semestre%202015.pdf
(6) http://www.cochilco.cl/Archivos/destacados/20150508105118_MERC%202015%2005%2008.pdf
(7) https://www.canadianinsider.com/company?ticker=ARG
(8) http://finance.yahoo.com/news/capstone-mining-protects-2015-capital-103000323.html
(9) http://incakolanews.blogspot.com/2015/05/a-thought-on-barrick-abx.html
(10) http://equipo-minero.com/noticias/1732-minera-colombiana-reanudara-operaciones-en-nicaragua.html
(11) http://www.entornointeligente.com/articulo/5877074/PERU-Piden-a-gobernador-de-Cajamarca-probar-su-apoyo-a-
inversion-minera
(12) http://www.clarin.com/politica/elecciones_2015-massa-giustozzi_0_1354664588.html
(13) http://centralamericanpolitics.blogspot.com/2015/05/vice-president-resigns-under-dark.html
(14) http://gestion.pe/politica/pepe-julio-gutierrez-fue-llamado-delincuente-jose-perez-guadalupe-2131345
(15) http://gestion.pe/economia/tia-maria-gobernadora-arequipa-propone-contratar-organismo-internacional-determinar-
viabilidad-proyecto-2131325
(16) http://www.portalminero.com/pages/viewpage.action?pageId=96757176
(17) http://proveedoresdemineria.com/?p=nota&id=7151
(18) http://www.incakolanews.blogspot.com/2015/05/a-quick-one-on-1q15-of-three-silver.html
27

(19) http://finance.yahoo.com/news/gold-corporation-reports-first-quarter-203000208.html
(20) http://www.sec.gov/Archives/edgar/data/1160791/000155837015000845/goro-20150331x10q.htm#Toc
(21)
http://finance.yahoo.com/news/regarding-special-meeting-coastal-gold-130905564.html
(22) http://finance.yahoo.com/news/timmins-gold-reports-2015-first-034223570.html
Stocks To Follow Closed Positions 2014
Closed in 2014 closed close price
Fortuna Silver FVI.to jan'14 C$2.80 23-dic-13 C$3.19 13.9% small ST trade closed
Rio Alto Mining RIO.to jan'14 C$2.06 07-jun-13 C$2.30 11.7% trading position finally closed
Network Expl. NET.v feb'14 C$0.01 22-jul-12 C$0.005 -50.0% position closed, did nothing
Tahoe Resources TAHO feb'14 U$13.10 08-abr-13 U$21.72 -65.8% short closed due to reality
Darwin Res DAR.v mar'14 C$0.10 14-jul-12 C$0.045 -55.0% tiny risk play dropped
B2Gold BTO.to mar'14 C$3.07 28-nov-12 C$3.35 9.1% closed to free up capital
Pretium Res PVG mar'14 U$5.38 22-nov-13 U$6.50 -20.8% short closed as port longer
Gold Res Corp GORO may'14 U$5.07 26-ene-14 U$4.12 16.7% took profit
Bear Creek Min BCM.v may'14 C$1.63 23-mar-14 C$2.05 25.8% Took profit, sm near-term win
Eco Oro Min. EOM.to aug'14 C$0.48 22-sep-13 C$0.26 -45.8% sold small loser to make room
True Gold TGM.v sep'14 C$0.395 02-feb-14 C$0.41 3.8% M&A won't happen, sold
Santacruz Silver SCZ.v sep'14 C$1.04 26-ene-14 C$0.86 -17.3% silver/M&A spec, rel. small
Timmins Gold TGD nov'14 U$1.38 09-abr-14 U$0.99 -28.3% failed trade, sell, raise cash
Kinross Gold KGC nov'14 U$2.90 20-oct-14 U$2.15 -25.9% V small trade, didn't work, chau
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.145 -48.2% lost China sponsor
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
28

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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