IKN #315Premium

The IKN Weekly
Week 315, May 24th 2015
Contents
This Week: More politics and chess, fewer numbers, On the road, US markets closed Monday.
Fundamental Analysis: Mailbag.
Stocks to Follow: Overview, B2Gold (BTG) (BTO.to), Teranga Gold (TGZ.to) (TGZ.ax),
Timmins Gold (TMM.to) (TGD), McEwen Mining (MUX) (MUX.to), Focus Ventures (FCV.v), Lake
Shore Gold (LSG.to) (LSG), Regulus Resources (REG.v), Minera IRL (IRL.to) (MIRL.L),
NovaCopper (NCQ.to).
Copper Basket: Overview, Panoro Minerals (PML.v).
Low Cost Producer Basket: Overview.
Regional Politics: Chile: Producer price index for mining point to costs at a low point,
Guatemala: President Otto Pérez Molina now in real danger of being ousted, Peru: The Tia
Maria soap opera continues, Chile: Flooding problems nearly overcome, Peru: Anti-mining
protests in Puno, Argentina: Scioli provides a big pro-mining clue, More Argentina: Election poll
update, Ecuador: Sumaq Causay and mining, More Ecuador: Updating the Quimsacocha mining
petition, Colombia: Dead miners.
Market Watching: True Gold (TGM.v) last week shows why I should stick to my knitting,
Bitgold (XAU.v): A few extra thoughts, First Mining Finance (FF.v): Keith Neumeyer insider
purchases, Almaden (AMM.to) (AAU) trades higher.
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
More politics and chess, fewer numbers this week
For me at least, IKN315 it's a different sort of edition, shorter than the 30+ page efforts of the
last few weeks and with less numbercrunching or company analysis. As it
turns out, there has been plenty of political news coming from the region that
directly or partly affects mining matters, so I've found myself writing and
curating more on those this time around which makes 'Regional Politics' fatter
than usual. Also and by way of a stop press to explain one of the reasons for
my utter laziness today, my eldest (11 years old) entered her first ever chess
competition for local schools today and won a trophy for coming second (plus
a diploma for the wall and a CD Rom with tips on how to win using the king
during endgames, all squeezed in that photo if you look hard enough).
Confirmation if needed that both her looks and brains come from her mother.
On the road
Blogging will be light (in fact, likely zero) from tomorrow Monday until Thursday morning. Your
author is taking a trip up to a project, plus spending a couple of days in Lima to meet with
companies owned, covered and others, too. Going to be busy, so expect a report on anything
1

interesting this time next week.
US markets closed Monday
A standard headsup on a Monday market close, this time it's the USA and it's Memorial Day. It's
probably too much to ask of the US political class to use the date in order to reflect on whether
they should send any more soldiers to their deaths in pointless wars.
Fundamental Analysis of Mining Stocks
Mailbag
I wasn't planning on having anything in this section this weekend barring a small "deferred"
sign, but as we haven't run one of the occasional mailbag segments for a while and there were
a couple of mails that really piqued my interest, here follows a wordy filler to take the place of
number and chartwork. Normal service will be (etc)
On BTO and risk/reward ratios: Judging strictly on feedback (and the fact that nobody's
cancelled in the last seven days...yet) the B2Gold note and call to make it Top Pick seems to
have gone down well enough. But instead of the "...wonderful...autograph...Nobel prize..." stuff
I'd rather highlight this excerpt a mail from 'EZ'*
"I appreciate your analysis, but these "big boys" with a potential 30% upside are
NOT why I invest in this high risk sector. Even those are NOT "safe bets", and if
Gold goes to $1400, I make 30% with EVERY major."
Points to make:
"Safe bet" is an oxymoron. What's more The IKN Weekly doesn't offer safe bets. And I'll go
further by saying that if you happen to be paying money to somebody who is offering you safe
bets, or "slam dunks" or "sure things" in any sort of equity investment, let alone junior mining
which is one of the riskiest sectors out there, I strongly suggest that you stop taking their
services and listening to anything they might have to say before your financial health is
damaged. We don't offer safe bets here, not on BTO and not on anything. The first job is to
consider risk management first, second and third. Once the risk is understood in any given
stock or issue, then the potential for reward can be measured against risk. Then and only then
can any call be made and what we're looking for, or more to the point what I'm looking for, is
an asymmetric reward/risk ratio that favours the buyer (whether long or short).
The statement "...if Gold goes to $1400, I make 30% with EVERY major" moves the goalposts.
As a matter of fact the newly set target on BTO of CAD$2.70 is modelled on gold at U$1,200/oz
in the first half of 2015, then on gold averaging U$1,250/oz in the second half of this year. You
want me to model BTO at a different price deck? Sure no problem, that's easy, there's your
double. Instead of letting the model dictate, would you like me to decide what price target I'd
like to put on a company and then reverse-engineer the math in order to get from the present
day to the juicy upside potential? That's easy too, in fact I see examples of the technique every
day when I open sellside brokerage reports. In short, it's easy to adjust "adjust" things in order
to get a crowd-pleasing eyecatching result at the bottom but in that BTO note last week, as
always, I prefer to set a reasonable target then when it gets there (because it will) it gives the
opportunity to look around, check on any changes in the playing field since then and make a
decision on what to do next.
One of the many advantages of considering BTO as a Top Pick instead of a smaller stock that
shows great promise (e.g. I really like SAM.to's chances but I'm not going to bet the farm on it)
is that the fundamentals remain solid but there are then a multitude of ways in which you can
play the underlying company. Am I too boring and fuddy-duddy for your taste? Well go buy
some out the money calls, there's a mature market out there for derivatives in B2Gold,
2

especially via the BTG listing in New York. Or buy on margin (free money! what could possibly
go wrong!?!), or write some puts. Et cetera.
And Yes indeed I know BTO Top Pick is too fuddy-duddy for some of you. Another cert is that
for another section of this readership I'm being way too risky with my money. So although it's
been done a dozen times already (and though I'd like to think it's taken as read these days)
let's point out that I am not you, you are not me, this publication is not full of orders and
unanswerable directives telling you to do with your cash what I'm doing with mine, etc etc ad
infinitum. Nobody could be more aware of the pros and cons of running a letter such as this on
the base of "this is what I'm doing with mine" and on the whole I'd vouch it to be just about
the straightest way to go about the job, but it's by no means perfect and one of the
weaknesses is framed in this paragraph. But I also require, nay I demand, a little effort on your
part, dear reader. Anything and everything written in The IKN Weekly must be taken as one
person's subjective view of the market, so presuming that you find something of use here every
so often (if not why are you still paying me, masochism perchance?) it will always need to be
filtered through your own personal circumstances and adapted for your own needs before it can
be of any use to you. Always.
If you're looking for a tipsheet, a pump shop for quick flip doubles, a "get on now can't lose!"
stock call to get your heart racing, a "paid sponsorship" (the nice way of saying "paid off")
recommendation, a promotion designed to raise interest in a junior about to run its private
placement with full warrant, or just plain simple the writer who has decided to treat you like a
moron and will write accordingly, you've come to the wrong place.
*And totally unconnected to Canaccord past or present
On land grab stocks and ideas: Reader 'H' sent in a mail that's aimed towards the whole
'Land Grab' theory we've been playing with. After stating that he agrees with the concept, H
continued in this way:
When do you take a former hyped project with big ounces that has rotted down to the
core vs buying a bunch of hectares with a few holes of promise? I guess what I am
getting at is when do you say okay, SBB.to, MAX.to and all the other big ounce, good
grades, lot of $ spent on the project become the project of choice vs the deals that
have gone down thus far?
Sub question: will junior producers get bought simultaneously, ahead of, or not at all in
the next M&A cycle? In other words, do SAS.to, LSG, KGI.to, KDX.to, RIC etc. last
through this year or do they go ?
There are some valid thoughts in that segment and they got me riffing about the issues raised.
Two points I'd like to make:
1) To the question(s) in the first paragraph, "I don't know". By necessity I take each stock and
each story on a case-by-case basis. Thanks to that and having managed to rip up a personal
prejudice or two on the way, I've even managed to make a decent buck or two this year by
trading companies I've hated and still hate (eg AR.to) thanks to reappraising them in light of
changed circumstances. But the point is that the "few holes of promise" cheapo might be better
or worse than the "former hotpot, now rotted" cheapo and until I look, I don't know. As it
happens, with LGN.v recently added as an example of the promising new land type and ATM.v
added as an example of a rotted type, I'm good about buying whatever and that's there for all
to see.
Expanding on that a little, most people use a combination of top-down and bottom-up analysis
but the mix is always up to the person in question and circumstances will often drive the
decisions, too. In my case and specifically about junior mining companies I'll tend to be top-
down for a limited period, until perhaps I've zoomed in on a sub-sector that I feel will
outperform. Three simple examples:
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• a metal I think is about to outperform
• a country that has an improving risk profile
• a company type that's seeing a better profit margin profile (e.g. lowering costs)
All those and more, and of course vice-versa for shorting purposes. But once that's done I'm
not a great one for charting and further top-down analysis, plus being a fundy-searching value
stockpicker at heart I'll immediately start the bottom-up filtering to try and home in on an
individual company that I fancy as an outperformer. But that's just me.
2) To the issue raised in the second paragraph, after thought and going off on a few personal
tangents, I have three semi-related things to say today. First up, the "Land Grab" concept for
2015 is looking sound and signals so far are that I'm on the right track, but I'm certain there
are dozens of stocks and companies that might fit the bill. What I'm doing with my money so
far is what you see, but I'm the first to tell you that my specific picks are less important than
the general idea of buying beaten down market caps that hold assets being priced at pennies
on their previous dollars (yeah, this time 'top-down' holds the edge). Again, if you use The IKN
Weekly as the start of your own personal DD and not some sort of end-point, if you extract
ideas that you agree with, discard the stuff that's daft in your view, then run with the stuff you
like and make something better, that's my idea of a great way to play. If you have better ideas
for specific Land Grab stocks that fit the pattern, good for you.
Second up, as you know I like the chances of Lake Shore Gold (LSG.to) (LSG) as a buyout play,
other people I respect think the same way about Richmont (RIC.to), others still have their own
M&A target preferences. Will LSG.to get bought before ATM.v? Maybe, maybe not, second-
guessing M&A is tough old subject as most of you will know. Therefore use the portfolio system
to my advantage, hold some of "this" and some of "that", we can then let the market Gods roll
their dice.
Third and last, I must say at this point that I've been feeling a little constrained by The IKN
Weekly's "15 open positions maximum" policy since this land grab idea began (and you've
noticed that I'm currently one stock over that self-imposed limit for only the second time ever).
What I see here is more of an opportunity to set up a separate basket, call it "land grab", throw
a dozen or so names into it and buy smallish chunks of each one, thereby spreading the risk a
little and perhaps catching a big winner than we can add to and make into a sizeable position
on its way up (if it doesn't turn out to be a straight buyout play anyway). The limit, self-
imposed or not, runs against that idea and right now I feel cornered by a policy that's done a
good job in keeping me focussed and disciplined over the years, but now doesn't suit the new
market circumstances. I'm still thinking about this and if I need to change the structure of
recommended plays in The IKN Weekly, then if I do how the changes should be framed to keep
things orderly and useful (the last thing I want is to have one of those sprawling messes of 75
stock recos that mean nothing and serve nobody, in which it's then oh so very easy to ignore a
whole bunch of losers and trumpet the few winners on the list to the suckers out there). But
there's no denying that right now I'm not diving in and buying small positions in about half a
dozen names I'm warming to as 'Land Grab' possibles and that's just because I don't have any
room left for them.
Stocks to Follow
With gold down on the week (e.g. GLD down 1.64%), losses were expected. In the end the
portfolio held up reasonably well, because although there were seven losers (MUX, LSG.to, AG,
TGD, ATM.v, LGN.v, REG.v) there were also five winners to lighten the load (BTO.to, TGZ.to,
FOS.to, NCQ.to, FCV.v) with the other four stocks remaining unchanged (SAM.to, LRA.v,
DNA.to, IRL.to). The best win in percentage terms was registered by NovaCopper (NCQ.to up
16.4%), the worst loser Legend Gold (LGN.v down 21.4%). A definite plus was the sector-
4

bucking upmove put in by the new Top Pick B2Gold (BTO.to up 5.9%).
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, eight
are in the green, one is unchanged and seven are in the red.
company Ticker this week Avg Price Reco date Current PPS Gain/Loss% Notes
TOP PICK
B2Gold BTO.to STR BUY C$2.20 12-sep-14 C$2.15 -2.3% Top Pick, 1st tgt $1.70
Metals Producers (in current order of preference)
McEwen Mining MUX str buy U$1.09 25-jan-15 U$1.02 -6.4% Added Mar'15, top value
Teranga Gold TGZ.to hold C$0.55 15-feb-15 C$0.78 41.8% New position, 83c tgt
Lake Shore Gold LSG.to buy C$1.04 07-apr-15 C$1.25 20.2% New FCF+ prod. Poss M&A tgt
First Majestic AG spec buy U$10.51 10-aug-14 U$5.23 50.2% Holding, only silver exp left
Timmins Gold TGD hold/sell? U$0.60 19-apr-15 U$0.617 2.8% last chance for bounce or sell
Starcore Intl SAM.to spec buy 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 hold C$0.28 29-mar-15 C$0.285 1.8% New trade, 36c/share of cash
Atacama Pacific ATM.v spec buy C$0.19 26-apr-15 C$0.195 2.6% New Spec buy, cheap adv proj
Legend Gold LGN.v spec buy C$0.085 01-mar-15 C$0.055 -35.3% Spec buy, v small trade
NovaCopper NCQ.to hold C$1.05 09-apr-14 C$0.78 -25.7% 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 hold C$0.30 06-apr-15 C$0.38 26.7% New bet on 2016 drill prog.
Focus Ventures FCV.v spec buy C$0.23 01-jul-12 C$0.225 -2.2% tgt 50c, now raising cash
Minera IRL IRL.to hold C$0.27 22-jul-12 C$0.095 -64.8% 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.
B2Gold (BTG) (BTO.to): Position added. I got a good price on BTO.to Canadian listed stock
on Tuesday as well. The overall average-down hasn't got me in the black yet, but I've left some
room for more and the way in which BTO swam against the negative tide last week was
particularly encouraging. The main factor that got the market applauding BTO was Wednesday
morning's announcement (1) that it had taken out a new U$350m revolving line of credit from a
bank syndicate led by HSBC. The rates on the loan are competitive, under specific
circumstances the revolver limit can be raised to U$450m, the facility replacing the current
U$200m revolver on BTO's books (only $125m drawn on that so far) and ups the line of credit,
it boots the due date out to 2019 and on an overall scale, gives the market a nice show of
relative financial muscle and BTO's decent standing amongst the moneymen, all at the right
time.
5

I've read a few brokerage reports on the new announcement and all came to the main practical
conclusion, that this facility now makes sure that the capex for the Fekola build-out is fully
covered and give BTO a decent cushion too even if gold prices drop again and free cash flow
dries up. This again points to a BTO that's left the all-paper acquisitions behind and is now in a
new phase of organically growing what it already has.
Teranga Gold (TGZ.to) (TGZ.ax): At
78c and 4c higher than this time last
week, TGZ finished at its highest close
since last September and that's a pretty
decent result. We're creeping ever closer
to my sell target of 83c, a push in the
back from a friendly gold price and we
might just get there this week. I'm
unlikely to be doing any trading until
Thursday, however.
That's a good looking chart.
Timmins Gold (TGD) (TMM.to): Holding one more week. I've hummed and hawed about
whether to hold or to sell TMM after another
lacklustre display last week, as I in IKN314 said
it was on borrowed time if it didn't perk up and
perk up it did not. In the end, what's tipped the
balance and got me to hold on for one more
week is my trip, more than anything else. I'm
going to leave it in the lap of the market Gods,
but if we see further price erosion, or even a
UNCH next weekend, I'm out.
That's not a good looking chart.
McEwen Mining (MUX): A poor week. Even when taking into account the drop in gold it was
a bit of a heart-sinker to see MUX handing back most of the gains of the week before. One
reader sent over some in-house non-publishable notes on MUX from a brokerage which made a
hash of the analysis, compared apples-to-oranges and continued to judge MUX on what it was
6

in 2013 and 2014 instead of catching on to the big structural changes it's been going through.
They're wrong to call pass on the stock via such muddled thinking, but it was interesting to see
because as long as the market keeps getting the stock wrong there's built-in upside when it
finally clicks that MUX is a different beast these days.
Focus Ventures (FCV.v): A couple of things that tie together interestingly. First up, word
reaching this desk is that FCV is getting warmer to the idea of developing the lower capex
"direct application" business from Bayovar12. I hope so, it's my idea of a real winner.
Second is a report from the Lima ProEXPLO geology and mining conference in Lima last week,
which placed FCv as starting production from Bayovar12 (not development or construction, but
commercial production) at the end of 2016 (2). I'm going to catch up with FCV people in Lima
next week, buy them a coffee and find out anything and everything I can.
Lake Shore Gold (LSG.to) (LSG): This one flatlined and either looks tired (bearish) or it's
consolidating at the new deck before
moving higher (my call). I was fiddling
around with the charts on Friday evening
looking for the last time it was at this
level and it's a little under a year ago,
but when I plugged in GDX, GDXJ and
GLD as comparatives this chart made for
more impressive viewing than even I
expected.
The living breathing example of an
outperforming gold producer stock. You
can even take it from its rundown and
unfashionable sector and stick it next to
most things with pride, even tech stocks.
Regulus Resources (REG.v): REG is now trading back where it roughly belongs, until it gets
real news at least.
Minera IRL (IRL.to) (MIRL.L): I'm going to see IRL in the days ahead. Expect a report and
thoughts on its current financial position in IKN316.
NovaCopper (NCQ.to): It's doing that strong rebound on low volume thing again, which
makes for good topline numbers (e.g. the 16.4%
weekly rise reported) but is far more style than
substance. Zero desire to add for the moment, I'd
expect it to drift up and down on copper's metal
price tide. However, as this chart shows it only take
a single large-ish seller to throw it all out again.
The Copper Basket
After twenty-one weeks of 2015 The Copper Basket is showing a 5.87% loss to level stakes.
7

company ticker price 1/1/15 Shares out Market Cap current pps gain/loss%
1 Capstone Min. CS.to 2.03 381.95 534.73 1.40 -31.0%
2 Reservoir Min. RMC.v 3.96 47.55 219.68 4.62 16.7%
3 NGEx Resources NGQ.to 1.17 187.71 187.71 1.00 -14.5%
4 Nevada Copper NCU.to 1.65 80.5 152.95 1.90 15.2%
5 Amerigo Res ARG.to 0.27 173.65 76.41 0.44 63.0%
6 Copper Fox CUU.v 0.135 402.96 62.46 0.155 14.8%
7 Western Copper WRN.to 0.68 93.68 54.33 0.58 -14.7%
8 NovaCopper NCQ.to 0.58 60.15 46.92 0.78 34.5%
9 Hot Chili Ltd HCH.ax 0.16 333.11 41.64 0.125 -21.9%
10 Panoro Minerals PML.v 0.295 220.64 36.41 0.165 -44.1%
11 Regulus Res REG.v 0.35 56.39 21.43 0.38 8.6%
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 -5.87%
The overall basket average dropped a little 4% The Copper Basket 2015, weekly evolution
(0.34% to be exact), which is a lot less than 2%
you'd expect after the beating that the
0%
copper price took last week. We saw seven
-2%
stocks drop (CS.to, RMC.v, NCU.to, WRN.to,
-4%
CUU.v, REG.v, MNC.ax), four remain
-6%
unchanged (PML.v, ARG.to, HCH.ax, COP.to)
-8%
and four rise (NGQ.to, NCQ.to, AQM.v,
CCY.v). The only double figure percentage -10%
loser was Metminco (MNC.ax down 20.0%),
the only double figure percentage winner
NovaCopper (NCQ.to up 16.4%).
Here's the copper futures contract chart for
the week, which shows how the metal first
broke under the $2.90/lb line it had held for a
couple of weeks, then smashed straight
through the $2.80/lb level on Friday to finish a
miserable week for copper bulls.
The given market reason behind the drop
won't surprise you in the slightest, it's those
three magic words "China", "Demand" and
"Worries". But as those permanently bullish
desk jocks point out (3)
"If Chinese consumers become
comfortable with the outlook in the second
half of the year, they'll move beyond
restocking activity to actually (boosting)
production of finished products, which
would be the real kicker for demand and
push prices higher," Daniel Hynes, analyst
at ANZ said.
Bless Mr Hynes for that. And if they don't it won't, of course. But let's stick firmly to the
narrative.
We move to inventories and here's the weekly action and their bullet points:
8
ht4naj ht11 ht81 ht52 ts1bef ht8 ht51 dn22 ts1ram ht8 ht51 dr32 ht92 ht5rpa ht21 ht91 ht62 r3yam ht01 ht71 ht42
source: IKN calcs

• Overall world copper stocks dropped by 18,234 metric tonnes (mt) (-3.4%) to finish the
week at 513,590mt.
• Shanghai Futures Exchange stocks keep falling, this time down 10,521mt (-6.1%) to
finish Friday at 162,636mt.
• LME warehouses stocks were also down, but by a more modest 7,175mt (-2.1%) to
finish at 330,825mt. A slightly bigger drawdown than anything of from the last month
or so, but still small compared to total stocks.
• Comex warehouse stocks dropped 538mt (-2.6%) to finish at 20,667mt, the same type
of minor move as the week before.
Shanghai is still the key to this puzzle and while stocks keep dropping there, bulls will have
something to grasp onto. But I get the strong impression that the re-stocking cycle is just about
done now and warehouse stocks in China don't have much further to drop.
Shanghai Futures Exchange Warehouse Stocks, 2014/2015
260000
240000
220000
200000
180000
160000
140000
120000
100000
80000
60000
9
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 ht71
Mt Cu
source: Cochilco
Now for some notes on just one of our basket components.
Panoro Minerals (PML.v): PML reported its 1q15 on Friday afternoon and as well as a couple
of short segments in the MD&A such as this one..
A new agreement for the Cotabambas property for 2015 has been entered
into, and additional agreements may be required.
...that suggest community issues aren't quite as qonderful as they'd like to make out (because
they're not) the financials showed cash treasury as at March 31st down to $5.166m and
working cap at $4.2m. Cash dropped a hefty $2.65m in the quarter, mostly due to PML paying
the third party compilers for the Cotambambas PEA (sidebar: $1.2m added to asset value on
the balance, apparently that crappy piece of paper showing Cotabambas to be uneconomic is
an asset. Go figure). With an underlying burn rate of $200k/month PML has more than enough
cash to limp through for a while, but the 220.64m shares out means it doesn't cover much in
the way of equity value.
The Low Cost Producer Basket
After 21 weeks, the 2015 Low Cost Producer Basket is showing a 10.81% gain to level stakes.

company ticker price 1/1/15 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Goldcorp GG 18.52 830 15.21 18.33 -1.0%
2 Barrick ABX 10.75 1164.67 14.31 12.29 14.3%
3 Newmont NEM 18.90 499.08 13.48 27.01 42.9%
4 Franco Nevada FNV 49.19 156.5 8.24 52.62 7.0%
5 Silver Wheaton SLW 20.33 403.75 7.82 19.36 -4.8%
6 Agnico Eagle AEM 24.89 214.12 6.97 32.55 30.8%
7 Buenaventura BVN 9.56 254.19 2.88 11.34 18.6%
8 Kinross KGC 2.82 1146.2 2.76 2.41 -14.5%
9 B2Gold BTG 1.62 921.27 1.62 1.76 4.9%
10 Pan American PAAS 9.20 151.64 1.48 9.77 6.2%
all prices in U$, using NYSE ticker prices Portfolio avg 10.81%
The Producer basket suffered its first real lapse after strong rebound run that has stretched
back to March, with stocks selling off across the sector on lower gold and what has all the look
of profit-taking from larger players. If it's just those two reasons then things should stay okay,
but the near-term future of gold against a reviving dollar needs to be watched the closest.
Of our ten stocks, a full nine were weekly losers with the worst numbers posted by
Bueanventura (BVN down 7.4%) and Barrick (ABX down 6.3%). The only winner was B2Gold
(BTG up 3.5%), which as mentioned above is my idea of a fine performance during a tough
week. Our basket is now nearly 3% better off than the GDX control. Having B2 as an equal
weight helped the cause last week.
The Low Cost Producer Basket: Weekly performance
and comparative to GDX control
25%
20%
15%
10%
5%
0%
-5%
10
ts13ceD ht4naj ht11 ht81 ht52 ts1bef ht8 ht51 dr42 ts1ram ht8 ht51 dr32 ht92 ht5rpa ht21 ht91 ht62 dr3yam ht01 ht71 ht42
basket
gdx control
source: Google Finance, IKN calcs
Low Cost Basket: Percentage difference between
3.0% basket and GDX control, 2014
2.0%
1.0%
0.0%
-1.0%
-2.0%
-3.0%
-4.0%
ts13ceD ht4naj ht11 ht81 ht52 ts1bef ht8 ht51 dr42 ts1ram ht8 ht51 dr32 ht92 ht5rpa ht21 ht91 ht62 dr3yam ht01 ht71 ht42
|
source: ikn calcs, NYSE/Nasdaq data
It's a quiet time for newsflow in the majors, due to the 1q15 financials having been posted and
several companies now in blackout periods before the AGMs are held. Goldcorp (GG) got
included in a Nasdaq-sponsored sustainability list and B2 came out with that revolver news,
apart from that it was pretty quiet out there. Maybe they're all plotting massive takeover moves
or a fusion between equals or something. Or not.

Regional politics
Chile: Producer price index for mining point to costs at a low point
On Friday Chile's INE stats office came out (4) with the latest producer price indices (PPI, or IPP
in Spanish) for the country, including the general level (+1.6%) and the one we care about
more, the mining industry PPI (+1.2%). This is an uptick, so if we plug in the April numbers to
the historical data and press a few buttons on Excel, this is what comes out as a chart:
Chile: Producer Price Index (IPP) for Mining, 2012 to date
12.5
10
7.5
5
2.5
0
-2.5
-5
-7.5
-10
-12.5
-15
11
2102naj bef ram rpa yam nuj luj gua pes tco von ced 3102naj bef ram rpa yam nuj luj gua pes tco von ced 4102naj bef ram rpa yam nuj luj gua pes tco von ced 5102naj bef ram rpa
source: INE
egnahc
%
Month-on Month
Accumulative
I've stuck the month-on-month and the accumulative lines on this chart, becausea lthough a
little messy the combination of snapshot-plus-tendency gives a better overall picture of what's
going on. Then if we dig a little further down we can also see the main metal mining activity in
Chile of copper and moly (they're the same mines) scored a PPI of +1.6% in April and the
overall figure was brought down by a drop in costs in the iron ore industry, as the uneconomic
mines in that sphere go into mothballs due to low world prices.
The dataset above and the underlying numbers still need some interpretation and some reading
between the lines, but that's what we're here for and in my opinion (plus after reading some
more background on the subject) the data point us to a costs scenario that's as good as it's
going to get for the Chile mining industry. Yes, we've seen costs drop significntly over the last
year in the mining sector but if Chile is a decent guide for the wider region (it and its detailed
data collection has been just that up to now) we've now reached a trough and we shouldn't
expect further deep cuts in capex or opex in mining operations.
Guatemala: President Otto Pérez Molina now in real danger of being ousted
Telesur is the Venezuela-based hard left wing news channel and not my favourite for balanced
coverage of Latam events (by a long chalk), but its English language coverage of the ongoing
events in Guatemala that has the country's government in serious trouble and its President now
close to the final tipping point of resignation is better than just about anywhere else. And that's
mainly because of the bizarre unimportance being placed on events by most continental or
world new services. Here's an example of the Telesur coverage (5) (photo of 60k people packed
into the country's main square and all) and for up to date matters, check out the #RenunciaYa
("resign now") hastag on Twitter (6) around which social media in Guatemala has congregated.
Also, a decent analysis from Insight Crime is found on this link (7) that examines just why the
unravelling of this massive corruption scandal could easily lead to the downfall of Pérez Molina.
The latest chapter (or at least the latest here and now Saturday evening while writing up this
section, anything could happen in the next 24 hours) is a legal move by an opposition politician
from an indigenous rights party to indict Pérez Molina for corruption and covering up the illicit
activities of others in his government (8) which even the President's spokesperson says is a

serious blow to the President "as he tries to restructure" his administration.
As for being hard-nosed and capitalist about it, from the outsiders view we're not at a point
where Guatemala becomes any sort of attractive trade yet. The old adage of "buy when there's
blood on the streets" is crass, crude, over-simplistic but it works and at the moment it's telling
us to stay well away from this country because there is no blood. Politically it's fascinating, but I
wouldn't want to have exposure of my capital there of any sort. Which is why I don't. However,
it needs to be watched carefully and on an almost daily basis, because things could turn for the
worse or better for current President Pérez Molina or indeed the whole country very quickly and
without much warning. As for set dates in this unpredictable developing story, there are few
and anything could happen at any time but the next organized protest gathering is set for this
Saturday, May 30th. Analysts seem to be fixated in the major gatherings' headcounts and
whether next weekend's march will beat the 60,000 people that gathered last weekend.
Chile: Flooding problems nearly overcome
Last Wednesday, Minister of Mining in Chile Aurora Williams reported that as well as all large
mines in the flood-affected North Atacama region, the vast majority of small mining operations
were now back at work (10). She said (translated):
"We have in operation 90% of the small mines and those supplying Enami (the State-
run small mining company) at 62%. Of the rest, 28% are mines that are resolving
social problems and of the 10% left there are 8%, that's to say around 40 small mines,
which still have access problems and 2%, or eight mines, with damage to their mine
infrastructure".
In sum, 90% of small mines are now back and working, 62% are sending their produce to
Enami as they've always done, 28% have non-operational issues that are stopping deliveries to
Enami and 10% aren't working. Or 442 or around 480 small mines in the region affected by the
heavy and unusual flooding earlier this year are back online. Not bad.
Argentina: Scioli provides a big pro-mining clue
Hugo Nielsen is a name that you'll only ever care about if you get deeply into Argentine politics,
so suffice to say here that he's one of the inner circle advisors for Daniel Scioli, current
frontrunner for the 2015 Presidential election who'll be running under the current FPV (eg
Cristina) government's ticket and general approval.
He was one of the main speakers at Malargüe Mining 2015, the first major national level mining
conference held in the province of Mendoza (at the eponymous city). Mendoza is famous for its
antipathy towards mining from a large sector of its society and the difficulty it poses in getting a
project permitted and operating there (as Coro Mining ex-San Jorge will quickly testify, amongst
many others). Therefore Nielsen's presence at the conference in this election year was a
significant pointer to his contender's position towards the industry and what he said during his
keynote speech was even more pro-mining than expected. As well as stating that Mendoza
should debate the issue of mining and that the State should take a leading role in promoting
the activity, he went on to say (translated):
"From our viewpoint, we are proposing a Federal mining agreement that
would put all provinces on the same wavelength as the National government
so that Argentina becomes an integrated (mining) nation, and not a
confederation of independent states".
How much of that is election politicking that doesn't have much chance of becoming active law
is debatable. But what it does show is that 1) Scioli and his team are pro-mining 2) they've
correctly identified the basic weakness in Argentina's mining sector, that there's too much
power of decision at a provincial level which has stopped the current national government from
putting its best wishes into practice and 3) they have a concrete proposal in which to improve
the national mining scene. That's not bad to see from the inner circle of the Scioli camp at this
stage in the election campaign and it also shows that being pro-mining is considered to be a net
12

vote winner on a naitonal scale (nothing is unscripted at this stage of an Argentina election
campaign by a professional team in it to win it, nothing is left to chance). Three examples of
news reports on "Nielsen at Malargüe" here (12) (13) (14), all Spanish language, to give you an
idea of how interesting and influential his attendance at the conference was considered to be at
a national political level. This even though you'll rarely hear about the guy in English language
reports and once the election is over even in Argentina he'll fade into the background again.
Bottom line: The mining industry shouldn't fear a Scioli win and a continuation of the current
government. Worst case he'll be neutral, he's likely to become better for the industry than the
current CFK government.
More Argentina: Election poll update
In IKN312 we made mention of two polls conducted by the opinion pollster company
Management & Fit. Although it's a bit of a mistake to stick with one pollster (take other
companies into consideration on a poll-of-polls level and Scioli holds an average lead of four or
five points this month) we did get a new poll from the very same Management & Fit people this
weekend and its results published in the highly anti-Kirchnerist/Anti-Scioli and pro-Macri Clarín
(15) point to Scioli and Macri in a statistical dead heat for first place:
Management & Fit Presidential voter intention surveys
Dec 2014 to May 2015
35% 33.3% 33.3%
30% 29.4% 32.2%
27.9%
24.7%
25%
23.6%
23.7% 20%
18.8%
17.2%
15% 14.6% 13.8%
10%
5%
0%
Dec. 2014 Feb. 2015 Apr. 2015 May. 2015
source: Mgmt & Fit
13
noitnetni
retov
dnuor
tsriF
Scioli
Macri
Massa
Again we note the position of the man who led all polls in 2013 and 2014, Sergio Massa, whose
support continues to crumble. As Management & Fit has been the most negative towards Scioli
of all major pollsters and all surveys also point to Scioli beating Macri in a second round run-off
if necessary, what we're seeing is generally good news for the government candidate, though
the failure of Massa and the leakage of his votes to the now clear "non-government" candidate
of Mauricio Macri may change that dynamic.
Bottom line: The "two horse race" call is getting stronger by the week.
Ecuador: Sumaq Causay and mining
According to a report published (16) on Thursday May 21st by the "Collective of Investigation
and Psychological Action" (CIAP) in Quito, social cohesion between family groups and
communities is being adversely affected by mining activity in rural areas of Ecuador. The study
was made on the communities in the Intag district, located next to the Intag copper project
(now re-named Llurimagua, never a good sign) that's been a target for development for many
years (e.g. the mess Ascendant Copper made there before being kicked out) and is now in the
hands of a JV between Chile's Codelco state mining company and Ecuador's Enami state mining
company.
The CIAP report notes divisions created within family and social groups, as those who welcome
the mining company and its employment opportunities clash with those under the same roof
who reject the arrival of large-scale formal mining. According to CIAP (translated):

"This dynamic has created a rupture between friends, neighbours and families. There
is a division in the community that is strategically promoted by the State in order to
sustain mining projects."
The report concludes that along with the polarization of opinions and the ensuing discord, the
habits of people in the community have changed, along with their perception of state bodies
such as police. Now, that kind of report can perhaps be dismissed as the work of anti-mining
touchy-feely eco-commie lefty bedwetters by you the reader or by those in countries other than
Ecuador. But in Ecuador there's a concept called 'Sumaq Causay' (alt sp. Sumak Kawsay) that's
a part of the country's active constitution. It's usually translated as "living well" or "full life", it's
more complicated than that, its main thrust is about the right to live in harmony with other
people and with mother nature (if you'd like to know a little more in English, read here (17) or
here (18)). The CIAP report last week cannot be easily dismissed in a country that has Sumaq
Causay in its constitution, because it raises strong arguments against mining projects that use
or merely take advantage of such 'divide and conquer' social strategies.
If you think this argument against exposing your investment cash to mining in Ecuador is a
joke, then think again because it's not. It's more an example of the pitfalls and dangers
awaiting those you invest in jurisdictions without a traditional of established formal mining. If
it's a joke you'd like, imagine how "funny" it would be if your Ecuador-based mining company
suddenly received a court ruling saying it can't develop any further because it's activity violates
the constitutional right of citizens to live in harmony with their surroundings and with nature.
That's what Sumaq Causay in Ecuador's constitution protects, it's there and it's active law
today.
More Ecuador: Updating the Quimsacocha mining petition
First the background and to do it quickly and easily, in IKN299 dated February 1st 2015 we ran
the following short piece (here the whole thing is re-printed word-for-word):
Ecuador: A petition
The process to hold an official referendum in the area around the
Quimsacocha/Loma Larga mine project in South Ecuador, currently owned by
INV Metals (INV.to) and previously by IAMGOLD (IMG.to) (IAG), has been
started by locals who oppose the project (17). According to the rules, as of
last week they have 180 days to collect the requisite amount of petition
signatures to take the referendum forward. If so, the petition becomes an
official referendum with a binding vote held either later this year or in 2016. It
must be stressed that this process is different from the type of locally called
and held polls that are subsequently considered unofficial and ignored by the
government (we’ve seen such results in Ecuador, Peru, Colombia and plenty
of other places). Using official channels the vote would decide the so-called
‘social licence’ for the project, without which the mine cannot happen. As it’s
understood that opposition in and around the Quimsacocha/Loma Larga is
strong and in the majority, this is a serious threat not only to INV’s aspirations
but also to the political and social risk optics of wider Ecuador, right at a time
when President Correa wants to push forward on the formalization and
growth of the mining industry there.
IKN315 back and according to this report (19) as of six weeks ago the organizations fighting
the installation of Loma Larga had already collected and registered with Ecuador's official voting
agency, the CNE, 1,400 of the 1,500 minimum names needed to enact the binding referendum.
As they have until July 29th to collect names on the petition, they're now aiming to get at least
double the number required by law, i.e. 3,000 names.
Bottom line: This referendum is going to happen and when it does, be it this year or next,
chances are high that locals around Loma Larga will vote down the project and stop it from
happening.
14

Colombia: Dead miners
As at this weekend (20) there are still five dead bodies still to be rescued after the latest
reported large mining accident in Colombia that killed 15 miners on May 13th. Perhaps a good
moment to catch up with the official mortality rates for the mining sector in Colombia (note: the
unofficial rate is certainly a lot higher, as many informal/illegal operations will simply leave
accidents unreported) via this report (21) that contains a lot of information for Colombia and
setting the annual deaths reported against those of Peru and Chile:
Deaths in Mining Industry, Colombia, Chile and Peru, 2000 to 2014
200
173
180
160
140 127
120
120 101 102
100 82 89
80 56 69 65 62 64 58 56 66 52 53
4 6 0 0 33 37 30 42 31 40 42 35 46 29 25 25 47 27 32
20 8
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
source: MEM Peru, DANE Colombia, Sernageomin Chile
15
srenim
daed
Colombia
Chile
Peru
In the last five years, Colombia has turned into the second most dangerous country in the world
to go and do mining (after China, which reports off-scale deaths annually). The reasons for the
ultra-high death rates in Colombia mines are hotly debated among experts from several social
and industrial sectors (my attention span for these people runs out when they get too academic
and hand-wringing, so I tend to read abstracts only these days) but the typical combination of
factors are:
• Lack of safety laws at a national level
• Lack of implementation of existing laws due to underfunded oversight bodies
• High number of old, underinvested, underground mines
• High number of coal mines (always have been more dangerous, always will be)
• Rapid expansion of the mining industry in the last ten years
But the result is another reason why Colombia as a country has such a negative opinion of
mining activity. Numbers like 120 official fatalities in one industry in one year are crazy high and
excuses for the ongoing death from government officials come across as lame at best.
Peru: The Tia Maria soap opera continues
On Friday a protester was killed during a confrontation between locals and police in the Tambo
valley. The local man, aged 54, was first said to have died by Peru's Minister of the Interior (no
less) due to being hit on the head by a thrown stone, but come the autopsy it turns out he was
killed by a bullet to the chest (9). Subtle difference.
Due to the violent episode the national government has now declared a 'Special State of
Emergency' in the Tambo Valley, which makes illegal all gathering of people, any political
utterance by local political heads, allows access by police and/or army personnel to people's
houses without a warrant, etc. This 62 day State of Emergency is designed to calm the unrest
but as all previous attempts to do just that have failed, it's unclear how giving the forces of
order even more powers of suppression is going to change things. We'll see, but the chances of
something very nasty happening to more than just one or two locals at a time has just
ratcheted up. I hope things get calmer for everyone's sake, but the ineptitude of the Ollanta
Humala administration and the stupidity of Southern Copper (SCCO, though truly it's Grupo

Mexico) are unmistakable.
This week coming we also have another two day regionwide strike in Arequipa on Wednesday
27th and Thursday 28th (due to this all schoolchildren get two days off again) in order to
protest against the Tia Maria project and the national government position. That will involve
marches of several types and the chances of clashes between protesters and police in Arequipa
city are high.
Peru: Anti-mining protests in Puno
Last week there was a two day road block at the town of Chacachaca, in the heartland of the
Aymara region of Puno, Peru and stategically located on the main border road to Bolivia (plenty
of cargo freight between the two countries on this road) (11). The protesters called for a
cancellation of all mining concessions and activities in the Aymara region of Puno, as well as the
end to all investigations and prosecution cases regarding protests against the Santa Ana project
owned by Bear Creek (BCM.v) in 2011.
Market Watching
True Gold (TGM.v) last week shows why I should stick to my knitting
I get them wrong, as this 10 day chart of True Gold shows the world very clearly:
In "Burkina Faso: No trade for my taste" last week in IKN314 I even managed to note the news
that TGM.v trumpeted up on Tuesday pre-open (22) about the agreement being reached
between parties to re-start development of the Karma mine. But thanks to the NR and the
promo that followed, TGM rallied to prices not seen since early January when the troubles at its
Karma project kicked off. It doesn't even matter that there's no development going on yet and
the sides have agreed to wait until next month minimum to re-start. It doesn't even matter that
locals are still dead set against the "Rambo" part of the Karma project from being developed.
The stock rose and I got this one dead wrong.
Bottom line: Even with the right news in hand, I don't know enough about Africa to make
decent political risk calls. It's why I (mostly) stick with LatAm.
Bitgold (XAU.v): A few extra thoughts
16

This Gold-As-Electronic-Currency start-up is suddenly the latest hotpot fashion trade on the
TSXV and that's fair enough, so the announcement on Friday morning (23) that it was acquiring
the GoldMoney business of James Turk et al in an all-stock deal...
"...BitGold will acquire the intellectual property and operating assets of GoldMoney in exchange
for the issuance of 11,169,794 common shares in BitGold, valuing the transaction at CAD 51.9
million based on BitGold’s CAD 4.65 closing price on May 21st."
...didn't add fuel to the fire, more like a few gallons of kerosene. That Friday morning NR came
with a IIROC trading halt on the stock that lasted all day, a good thing considering the
circumstances. We therefore need to highlight the late Friday evening NR from XAU.v which
brought "additional information" on the acquisition (24) including this table of with some of the
basic financials of GoldMoney over the last five years:
Those numbers give a much better idea of what XAU.v is getting for its money (well, it's over-
inflated shares in fact, but you get the drift) than the gushing about C$1.5Bn in AUM that came
in the Friday morning NR did. Please pay particular attention to the cash flow and profit lines,
as well as working capital. That price chart above also shows how volatile it's all been, and
mostly to the upside.
As written on the blog a few days ago (25) this one is not for me and it will stay that way. But I
know some of you out there are following closely and may want to trade this thing so to add to
the information:
17

• Be clear that aside from the 3.3c shares awarded in 2014 to founders, the latest rounds of
financing in January and April were set at 90c. That means the $4 and $6 prices we're
currently looking at are massively profitable for the seeders.
• Main player in this company Roy Sebag holds approximately 50% of the current 36.2m
shares out. That's about to be diluted by the paper printed for the GoldMoney acquisition,
but it's still a hefty portion.
• Eric Sprott is on board at 90c. Eric Sprott loves this company and is backing it with deeds
and words, not just money. That alone will provide some sort of downside protection to
the share price in the near-term (don't ask me about the medium-term though) and it also
means that at least one portion of those 90c seeder shares aren't going to be liquidated
into this higher share price when they come out of escrow. You can make what you wish
of Mr. Sprott's opinion of Bitgold, but he's into this one like rock music and was clearly the
broker of the deal between Sebag and the Turks.
• To the downside the current share price is too high, period. We can debate the
fundamental merits of XAU.v another day when the share price has come down to a more
realistic level. I'm not going to say "Hey Dont Trade This!" either, because the nature of
these fashion plays means they can ignore any sort of sane and logical fundies valuation
for a long time, so if you want to play go play (just be warned, that's all).
• Also, it's mightily strange to the point of downright suspicious that a company that IPO'd
less than two weeks ago makes an all-share deal for a semi (not totally) related company
like GoldMoney without any sort of previous disclosure.
All this is apart from the merits of the business model and plan at XAU.v, which can be chewed
over another day if necessary (it's the bottom line reason why I'm not going to get involved,
but that's just me and my own weaknesses talking).
First Mining Finance (FF.v): Keith Neumeyer insider purchases
We've noted the slip in share price of FF.v on the blog, we also need to note that company
head honcho Keith Neumeyer is putting his money firmly where his mouth is in this stock.
Here's a screenshot of this (26) which shows the latest insider trading in FF.v and it's one-way
traffic:
Neumeyer personally owns nearly 3.5m shares (just 446 shares off that round number), up
from the 2.7m he owned when the company IPO'd in early April.
Now for some structural data and there are currently 73,766,951 shares outstanding in FF.v,
but assuming the acquisition of Coastal Gold (COD.v) goes through (extremely likely) that S/O
count goes to 101.27m. That means Neumeyer now owns a pro-forma 3.5% of the company,
along with any control over the 14.3% of shares of FF.v owned by mothership company First
Majestic (FR.to) (AG). As for market cap, the new pro-forma value (i.e. post COD.v acquisition)
at this weekend's 33.5c close is CAD$33.9m.
It's laudable to see Neumeyer buying large chunks of his new company, it's a positive signal by
anyone's standards. But..but but but, it also points again at the Achilles heel of the FF.v
"mineral bank" concept; it needs popular support as a public traded company else it will find
18

itself in dilution problems. The model to compare this company against is not any of the other
public traded companies, but the private sphere limited holding companies that don't have
anyone outside of a small shareholder group (often just one person, sometimes a group of
likeminded people) to answer to and can keep cash burn rate tiny for years on end before they
decide to float properties at a better time for property asset values; in short the Ross Beaty
'Lumina' model in the 00's decade. Although piecemeal and small compared to the total float,
the act of Neumeyer buying more stock is akin to taking FF.v slowly private and that of a boss
man shoring up the share price against a public more willing to sell than buy...at the moment
anyway.
But don't get me wrong, I like the "mineral bank" idea and my own far smaller Land Grab
concept is based squarely on the belief that mining land asset prices are at a nadir and that
cheap property prices won't last. However, it makes logical sense to buy into the same
companies with the same beaten-down land asset prices that FF.v and its ilk are aiming to snap
up, rather than buy into FF.v (at this point) and pay a premium to own the assets. I'd guess
that at some point or other that balance will change and FF.v becomes an attractive proposition
that's filled with land at a discount, but the mere fact it is out there paying a premium for
COD.v compared to current May 2015 prices means that in May 2015 we too can and should do
the same thing and look for the deep bargains, not buy into the stock that's paying extra for
those bargains. All while it burns its (our) cash and dilutes its (our) on dubious third party PR
campaigns and contracts that pay for the "promotion" from treasury and options, too.
Want that in a shorter sentence? ATM.v is better value today than FF.v.
Almaden (AMM.to) (AAU) trades higher
Further to the note in IKN314 last weekend about the interesting looking Almaden/Almadex
spin-out, a comment about the watching brief on the stock during last week's trading. The
news was received very positively, as this ten day chart of AAU (the NYSE listing, it does
significantly more volume than the TSX version AMM and that didn't change last week) shows,
comparing AAU to the GDXJ juniors ETF:
Here's the 12 month chart, with the kick at the end from the news and market applause:
19

Another notable was the reappearance of the Almaden tout club of newsleter writers and
market commentators who have been rather quiet on the stock recently, but all latched onto
the news and blew their collective trumpets hard. That's not necessarily a good or bad thing,
but it was a thing.
I feel no need to rush into this trade at the moment, but AMM did do what I'd want it to do in
order to move to second base, and that was to rally on positive sentiment for the trade.
Conclusion
IKN315 is done, we end with bullet points:
• B2Gold (BTG) (BTO.to) started well as Top Pick. It's the ones that swim well against
the grain of the down weeks that should be calling out to you. BTO's been asleep for
many months, it's now waking up.
• Scratch the surface of Ecuador, remove yourself from the pitches and corporate
presentations of those mining companies embedded there, it shows itself to be a very
trappy place to go mining. Lundin or not, the call is still a clear and strong "avoid".
• I'll be on the road next week, so if you mail me before Thursday I might not get back
to you. Then again, I'm so darned ignorant that i might not get back to you after
Thursday too. Apologies in advance?
• I didn't mention it today, but Starcore (SAM.to) should be due to report its production
numbers soon. One to watch perhaps, because it won't take much more than a single
decent quarter for it to move higher.
• We salute Memorial Day in the USA.
I thank you in advance for any feedback. Our Top Pick stock is B2Gold (BTG) (BTO.to). Flash
updates will be sent if required by events.
I wish you good trading fortune, ladies and gentlemen.
Otto
20

Footnotes, appendices, references, disclaimer
(1) http://finance.yahoo.com/news/b2gold-secures-us-350-million-074816933.html
(2) http://gestion.pe/empresas/produccion-comercial-fosfatos-bayovar-12-empezaria-fines-2016-2132423
(3) http://af.reuters.com/article/metalsNews/idAFL3N0YD3FD20150522?sp=true
(4) http://aminera.com/index.php/mineria-nacional/item/11477-ipp-de-industrias-sube-16-impulsado-por-sector-
electricidad-gas-y-agua-y-miner%C3%ADa.html
(5) http://www.telesurtv.net/english/news/Guatemala-Anti-Corruption-Movement-Tells-President-Resign-Now-20150518-
0031.html
(6) https://twitter.com/search?q=%23RenunciaYa&src=typd
(7) http://www.insightcrime.org/news-analysis/latest-guatemala-corruption-scandal-may-lead-to-president-resignation
(8) http://www.holaciudad.com/la-demanda-contra-perez-molina-es-un-nuevo-golpe-al-ejecutivo-dice-la-presidencia-
n588704
(9) http://elcomercio.pe/peru/arequipa/tia-maria-confirman-que-muerte-ayer-fue-impacto-bala-noticia-1813361?flsm=1
(10) http://www.entornointeligente.com/articulo/5978843/CHILE-El-90-de-pequena-mineria-de-Atacama-esta-operativa-
luego-de-temporal-de-marzo
(11) http://www.rpp.com.pe/2015-05-20-punenos-de-pomata-bloquean-la-carretera-y-exigen-cancelacion-de-la-mineria-
noticia_799052.html
(12) http://www.lanacion.com.ar/1795243-jose-luis-gioja-anuncio-que-no-se-presentara-a-un-nuevo-mandato-en-san-
juan
(13) http://www.mdzol.com/nota/607197-malargue-redobla-su-apuesta-por-la-mineria/
(14) http://www.sitioandino.com/nota/158064/
(15) http://www.clarin.com/politica/elecciones_2015-encuesta_0_1362464147.html
(16) http://www.elcomercio.com/tendencias/desarrollosocial-intag-meneria-mediambiente-comunidad.html
(17) http://buenvivir.eumed.net/what-is-sumak-kawsay-or-well-being/
(18) http://en.wikipedia.org/wiki/Rights_of_Nature#Buen_Vivir
(19) http://www.eltiempo.com.ec/noticias-cuenca/162368-firmas-contra-minera-a-en-sector-quimsacocha/
(20) http://www.semana.com/nacion/articulo/recuperan-cinco-cuerpos-de-mina-colapsada-en-colombia-restan-otros-
cinco/428706-3
(21) http://www.lasrutasdeloro.com/colombia-accidentes-por-mineria-han-causado-casi-mil-muertes-en-diez-anos/
(22) http://finance.yahoo.com/news/true-gold-resumes-construction-karma-103000923.html
(23) http://finance.yahoo.com/news/bitgold-inc-announces-cad-51-115000631.html
(24) http://finance.yahoo.com/news/bitgold-inc-announces-additional-information-234100698.html
(25) https://www.canadianinsider.com/company?ticker=FF
(26) http://incakolanews.blogspot.com/2015/05/the-funniest-thing-about-bitgold-xauv.html
21

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
22

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
23

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.
24