IKN #316Premium

The IKN Weekly
Week 316, May 31st 2015
Contents
This Week: US BLS jobs headsup, Days away from the screen, Repeating the obvious.
Fundamental Analysis: Legend Gold (LGN.v) 1q15 financials give a case study of the risks of
the 'Land Grab', Re-assessing McEwen Mining (MUX) (MUX.to).
Stocks to Follow: Overview, Minera IRL (IRL.to) (MIRL.L), Atacama Pacific (ATM.v), Timmins
Gold (TMM.to) (TGD), B2Gold (BTG) (BTO.to), Dalradian Resources (DNA.to), Regulus
Resources (REG.v), Lara Exploration (LRA.v), Starcore Intl (SAM.to).
Copper Basket: Overview, Codelco's 1q15 is a window on the sector.
Low Cost Producer Basket: Overview.
Regional Politics: The US Dollar versus currencies of "Americas Mining" countries, Mexico:
Checking in on the long-term silver success story, Argentina: Taxman, Colombia: PIPE 2.0,
Ecuador: Sumaq Causay and mining redux, Peru: The Tia Maria Weekly, Peru: Puno appoints an
illegal miner as director of mining.
Market Watching: Want to buy an iron ore mine in Chile? Price one dollar (maybe), Bitgold
(XAU.v): A final word, Almaden (AMM.to) (AAU) watch part three, Tahoe Resources (THO.to)
(TAHO): A hour with Black, Focus Ventures (FCV.v): Brief update, Tinka Resources (TK.v):
Interesting, Minera IRL (IRL.to) (MIRL.L): Alive.
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
US BLS jobs headsup
Potential US market moving macro comes on Friday morning via the US jobs number. As at this
weekend consensus stands at +220k and 5.4% for the headline numbers. Expect refinements
to that as the week goes on, keep an eye on Calculated Risk for updates, you know the drill.
Days away from the screen
I made a conscious decision to stop worrying about every tick and move in the market around
midday Monday while in Lima, mainly because my laptop developed some kind of fault and
wouldn't connect to wi-fi. Circumstances and all that, but it was an enjoyable (though slightly
weird) experience not feeding the constant neurosis by checking prices, not even via somebody
else's screen once I'd made the decision. The situation was compounded when on Tuesday the
planned site visit was called off at the last moment (no fault of the mining company I hasten to
add, who will remain nameless for the time being, trip re-programming underway) due to a
protest on the road up to the site by sugarcane workers that made it between dangerous and
impossible for transit. The answer was to buy and re-read Slaughthouse Five by Kurt Vonnegut,
which filled the day nicely. I'd forgotten how damned readable it is. So it goes.
So Tuesday was a bit of a washout (thought with a decent impromtu lunch) but Monday and
Wednesday were meetings and work, with politics on the menu and mining matters gleaned
1

from Minera IRL (IRL.to) (MIRL.L), Tahoe Resources (TAHO) (THO.to), Focus Ventures (FCV.v)
and Tinka Resources (TK.v), all below in 'Market Watching'.
Repeating the obvious
The obvious is that if gold goes up, they all go up and we suddenly look like the geniuses that
we are not.
But as I stared hard at the two year chart showing GLD (proxy to gold) GDX (reasonable gauge
of the PM producers) and GDXJ (idem the juniors), another fairly obvious truth stared back. The
GDX and GDXJ tickers have been recovering since March (post-PDAC) but GDXJ has a long way
to come back in relative terms. I don't think it's ever going to close that gap, at least not with
its current make-up and that points to the number of Zombie companies sheltering and hiding
inside the junior and exploreco end of the mining world.
Ever since the two ideas at the start of the year (AR.to going up early, RIO.to getting bought
out) were completed way too quickly, here at The IKN Weekly your author has had to come up
with a couple of new strategies for 2015, else be
faced by abject market boredom in the months to
come. What we came up with is "Own profitable
producers" and "Land Grab" and so far the
profitable producers (BTO now Top Pick, MUX, TGZ,
LSG, TGD, plus AG and SAM held from before) have
been doing pretty well in 2015.
The only really bad thing in that lot is Timmins
(TGD) and I personally have plenty of mitigation on
that position as I only opened it in the second half
of April, once all the damage had been done. In
fact come to think of it, on a personal portfolio level
most of those are better counted from late January/early February rather than the very
beginning of the year, as the strategy didn't really get going until then. I'm rambling, let's see if
this makes the edit cut later (update: nah, didn't cut it in the end).
As for the 'Land Grab' idea, I'm going to be more generous to myself than in the
'Fundamentals...' section today (see below) and call them "Work in Progress", but a glance at
the 'Stocks to Follow' table today will show you they're all currently in red (barring the hybrid
producer/land grab that is Starcore). However and importantly, right now the larger sized cash
positions are all in the producer stocks (plus Dalradian), the 'Land Grab' stocks are inherently
more risky, they haven't shown much of a pulse and as such it's easier to carry the current
small financial losses incurred, even though some of the percentage losses are high.
The bottom line is twofold. As things stand in the sector I see two obvious things:
2

1) If gold goes up they all go up and we suddenly look like the geniuses that we are
not. If that happens it'll be extremely easy for me to ignore all the arch-annoying toldyaso gold
permabulls who will be loudhailing to the world how right they were all along. That's because
I'll be too busy counting my money.
2) The profit-making producer companies are a better place to invest today. The
bifurcation of this market is now underway, the cream will at least survive and in some cases
thrive (e.g. TGZ.to and LSG.to owned, KGI.to and RIC.to not owned, to name but four). The
Land Grab idea is going to work eventually, but that's got to be considered a leveraged play on
future optimism and better underlying prices for both precious and industrial metals.
Now is not the time to buy the sketchy, will-make-it-to-profitable-at-$X-for-its-metal companies.
This is not the time for IMPACT Silver, Atna Resources, Great Panther Silver, that awful Blasutti
thing Scorpio Mining now re-named Americas Silver, Capstone Mining, Trevali Mining or
anything weighed down by heavy financial debt that will eventually strip operating profits away
from the bottom lines of companies large and small. But even though I like the Land Grab idea
a lot and will continue to dabble in the really cheap ones, until optimism starts coursing through
the sector it's not the time to get too heavy on the idea. Me personally, I've positioned into a
few and I'm looking at several others but there's no farm betting going on, not even close.
As we move into the last month of Q2 with the second half of 2015 already close on the
horizon, now is the time to be a dedicated follower of fashion and today's fashion in the mining
sector is to applaud and cheer those companies that make a plain straight no-questions asked
bottom line net profit. Up in the world of bigcaps Newmont's (NEM) been enjoying kudos due to
this, down at our junior end the aforementioned producers have been doing well and now
B2Gold (BTO.to) (BTG) shows all signs of it getting in on the act in the second half of the year,
which is why I've added so many to my position of course...it's capitalism, baby. As long as you
think gold's going to maintain a bottom here at/around U$1,200/oz (if it goes higher, welcome)
you should be adding profitmaking producers to your portfolio, the ones that have done the
work, improved their corporate structures, cut costs and are now happily profitable at current
gold (and other metal) prices. Start with B2Gold.
Fundamental Analysis of Mining Stocks
Legend Gold (LGN.v) 1q15 financials give a case study of the risks of the 'Land Grab'
Up to now my open trade in Legend Gold (LGN.v), small though it might be, has proved to be a
loser. A failure. A bad place to put money. A waste of time. With that the context is clearly set,
so today a few words on this company position so far that come in light of its 1q15 results
posted on Friday.
In its 1q15 financials filed midday Friday, LGN made no bones about its situation:
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The Company will have to raise capital in 2015 in order to fund its overhead
and limited exploration programs and certain of its outstanding liabilities.
Depending on the monetization of Diba and the Company’s ability to raise
capital, additional cost cutting measures may also be required which would
lead to a further reduction in the Company’s exploration initiatives.
So here are the updated balance sheet charts to add context to the "we need money"
statement and yes...
$m LGN: Assets per qtr LGN: Working capital
16
6
14 cash&ST other current fixed 5
12 4
10 3
8 2
6 1
4 0
-1
2
-2
0
1q13 2q13 3q13 4q13 1q14 2q14 3q14 4q14 1q15
source: company filings
...there's no doubt at all about this. Adding to the mess are liabilities, which shot up to a touch
over $1.5m so we need to look more closely at this bit.
$m LGN: Liabilities per qtr
2
1.75
1.5 LT debt
current debt
1.25
1
0.75
0.5
0.25
0
1q13 2q13 3q13 4q13 1q14 2q14 3q14 4q14 1q15
source: company filings
On the bright side, those liabilities are nearly all fees owed to company officers (CEO, CFO, VP
Exploration) and the notes to the line item state that the company has reached a deal with
those people waiting for their cash, in
that they'll hold off frm claiming until
either the Diba property is sold or
December 31st 2016 comes around. In
return for their patience, a 50% bonues
was added to some of the non-
CEO/CFO consulting fees (to be paid
half cash half shares) to get them to
just over $700k. Here right is the note,
ripped directly from the PDF, consider
its contents yourself without my
subjective filter.
On the not-so bright side, this type of
deal takes away the type of upside to
the share price we'd wanted from any
asset sale (or eventual wholesale
takeover of LGN by an opportunistic
Randgold or other). Next, the share count was confirmed at 52.63m.
4
21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1
U$m
source: LGN filings

Legend Gold (LGN): Shares out
80
70
60
50
40
30
20
10
0
5
21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1
m
source: company filings
That puts B/V at 7.5c/share. Add that all up and the balance sheet alone explains why LGN's
share price has done what it's done recently. It's also, in a nutshell, is the near-term risk of
buying one of these "Land Grab" plays that I'm currently so enthusiastic about. Until something
happens, nothing will happen to these cash-needy explorecos who'll be faced with tough
choices of downsizing, curtailing activities or even worse racking up current liabilities that will
need to get paid back at some stage in the future.
So be clear, all this today is NOT the sound of your author going off the idea of either LGN.v in
particular or the Land Grab concept for 2015 in general. I am aware of the risks of these 'Land
Grab' plays, you should be too. Since starting this trade idea it's been a little disconcerting to
receive mail for readers that are all about the potential for big wins on these trades and don't
seem to take into account the downside risks. The idea here is to buy into something with
highly discounted land values and then hold for better times. Buy. Hold. That's the plan, they
dno't come any simpler. Part of the gamble is that before things pick up they get worse, before
the bigger names really start snapping up all the land they can (it's started, but the spigot is
nowhere near fully open yet) the tinycaps continue to suffer.
With LGN it's still a small position relative to my whole portfolio, but I have managed to buy the
stock twice and have a 8.5c cost average. Now have a good stare at its share price this
weekend, because it's 5c and I'm 41.6% down (with commish to come on top). And that's the
risk here; the concept can be fine, the entry price may look great but then the stock continues
to go South and further South again, meaning that you bought in too early. Or in fact, I bought
in too early. Now I'm good with the risk involved so far because positions have been taken that
are little more than toe in the water...perhaps a foot up to an ankle here and there. They and
the potential losses are manageable because for the moment at least, cash emphasis is on the
producer-profitmaker group.
All that's a long-winded way of saying that I'm obviously early to the trade on LGN.v, you can
tell because of the paper loss so far. I'm okay about that, there's plenty of time to run on Land
Grab, but are you of the same mindset? All I ask is that you're clear on the risks.
Re-assessing McEwen Mining (MUX) (MUX.to)
The presentation that came with the MUX AGM on May 28th is available on the company
website and gives some insight into how the company's plans are firming up for this year. Here
are a couple of slides from the 36 page PDF that most caught my attention, but the whole thing
(on this link (1)) is worth your time, both for insights and for the continued cheesy way in
which Rob McEwen insists on promoting.
The ones I cared most about were anything that combined A) numbers and B) future. This one
has my kind of mix.

• Primarily, note that MUX is basing its numbers on U$1,215/oz gold and U$16/oz silver.
• The initial analysis at those market prices indicates that MUX is planning to be at rough
breakeven once development costs are taken into account.
• Then if we consider the top line given, which is straight "earnings minus COGS" from the
P+L and gives gross margin at El Gallo 1, the numbers for the second column Q2 to Q4
indicate that MUX is still assuming its 12.5k oz per quarter guidance for those quarters.
However, all indications are that MUX is largely out-performing its own guidance (see IKN
Weeklies passim).
• The expectation of VAT collectable makes sense. For several years, one of the major
gripes of mining companies operating in Mexico has been the great difficulty in getting the
government to cough up on its VAT (sales tax) dues owed back to companies, but in the
last couple of quarters it's been notable how many companies, not just MUX, have been
able to reduce this item and get it converted into cold, hard cash.
This one provides insight too, particularly when compared to previous statements from MUX:
• Again note that MUX is sticking with its official 138k oz au Eq production guidance for
2015 (i.e. 96.5k oz gold and 3.1m oz silver at 75/1 ratio) even though El Gallo 1 is
obviously outperforming guidance.
• Gold Bar is now scheduled to production in 2018. That's later than the previous estimates
from MUX of "50,000 oz annual gold production starting 2017" that it talked of in its
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January 2015 presentation material, amongst other places. It would also imply a capex
build-out cost of around $50m for 2017, if we assume its original total $55m capex to be
accurate and subtract the budgets for this year and 2016 at the project.
• The way MUX is now collecting cash (ex development budget) the company has a fair shot
at covering the $50m approx it will need to ramp up Gold Bar come 2018, but it's not a
given, either. Our current model has treasury at $28m at end 2015, thanks to the
guidance-beating rhythm at El Gallo 1 this year.
• It would seem that on this chart (unless I'm very much mistaken) that as from 2018 MUX
plans to produce from El Gallo 1 and El Gallo 2. The end 2014 M+I resource at El Gallo 1
was 691,523 oz Au and even if we take into account a shortened projected mine life at El
Gallo 1 due to emphasis on extracting high grade ounces, its current rate of production
gets us to 200k oz Au produced by end 2017. That leaves plenty in the tank from Gallo 1.
• However, MUX's projection of 2018 onwards looks a bit of a risky forecast to me, as El
Gallo 2 and its largely silver mineralization doesn't look particularly economically robust at
current silver prices. At $20/oz it's probably an interesting project, or maybe even $19/oz
now that costs are dropping. But at today's price deck it's marginal at best.
Bottom line: I've chosen just two frames from the presentation, there are more to consider. But
what we have in MUX today is a company with three things going for it:
• Financially consolidated at the current metals prices
• Looking to grow, but at a slower rate than previously announced
• Very much a leverage play on metals prices
And that's not bad at all, but it's around now we discuss why the word 're-assessing' was used
in the title. I'm happy about my entry price in MUX and its surely a good way to play any sort of
leverage on better gold prices to come, but on considering these numbers and the recent
quarter, my enthusiasm for its present day set-up has waned slightly. Now be clear, that's
slightly and not "he gonna sell MUX", because I'm not going to sell my position. On the other
hand, I was actively considering it as a Top Pick candidate and a large chunky addition just a
few weeks ago and now I'm not.
That's because MUX has found stability and is doing it right at El Gallo 1, but its overall
corporate performance and size is attached just as much to San José, which isn't going to
perform as well at the current silver and gold prices. Breakeven at $1.2k and $17/oz is fine, I'm
good with that, it's okay. But it's not great and as things stand today, for my money (literally)
there looks to be better upside potential in
other places, starting at BTO (which is
why that's a Top Pick now of course).
Bottom line: MUX has stopped the rot of
2014 and on that it should be warmly
congratulated. It's now on an even keel,
but until we get higher metals prices it's
not going to outperform in the sector. I
own at a good entry price and I'm a
happy holder but until gold shows more
spark I won't add any more. MUX is now
looking more like a leverage play on gold,
whereas I want profitable players at the
current price deck for my additions. But to
repeat the line used in today's intro, it'll only take gold to move up $100/oz and we're all heroes
and world-beaters.
7

Stocks to Follow
On beginning to write up this weekend's section, I couldn't help but notice how even though
gold had dropped less than the previous week (down 1.3% instead of 1.6% the week before
last) the losses were wider spread across the portfolio. Then again, there weren't any big losers
and it was more of a case of pennies here and there.
Just three of our stocks registered weekly gains this time (NCQ.to, DNA.to, IRL.to) and there
was one unchanged on the week (FCV.v), which leaves a full 12 that lost ground (not listing
them all). Notably none had double figure percentage losses, but two stocks had strong gains,
namely Dalradian (DNA.to up 22.2%) and Minera IRL (IRL.to up 15.8%).
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, six are in
the green and ten 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$2.11 -4.1% Top Pick, 1st tgt $1.70
Metals Producers (in current order of preference)
McEwen Mining MUX Spec buy U$1.09 25-jan-15 U$1.00 -8.3% Added Mar'15, top value
Teranga Gold TGZ.to hold C$0.55 15-feb-15 C$0.75 36.4% New position, 83c tgt
Lake Shore Gold LSG.to buy C$1.04 07-apr-15 C$1.21 16.3% 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 hold U$0.60 19-apr-15 U$0.604 0.7% Holding for June
Starcore Intl SAM.to spec buy C$0.12 10-jan-15 C$0.135 12.5% 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$0.275 -1.8% New trade, 36c/share of cash
Atacama Pacific ATM.v spec buy C$0.19 26-apr-15 C$0.18 -5.3% New Spec buy, cheap adv proj
Legend Gold LGN.v hold C$0.085 01-mar-15 C$0.05 -41.2% Spec buy, v small trade
NovaCopper NCQ.to hold C$1.05 09-apr-14 C$0.80 -23.8% small Cu play low vols, hold
Lara Expl. LRA.v spec buy C$1.15 08-apr-12 C$0.29 -74.8% 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$1.10 71.9% Nov'14 tgt $1.25, top Au expl
Regulus Res REG.v hold C$0.30 06-apr-15 C$0.36 20.0% 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 spec buy C$0.27 22-jul-12 C$0.11 -59.3% 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.
Minera IRL (IRL.to) (MIRL.L): There's a longer piece in 'Market Watching' today with
thoughts gleaned from meeting management for the first time since Courtney Chamberlain's
untimely passing. Here we note the continued rally and price rebound in IRL.to that still hasn't
8

come on any sort of real volume, but its persistence is now more than a little eyecatching. What
I see is little in the way of buyer interest, just a few people picking and scratching at the stock,
but there's a total lack of sellers out there too. It's saying "You want in too? OK, pay up". And
no sellers is almost as good as lots of buyers.
It also fits with the mood I picked up on at the IRL offices last week. See below for that.
Atacama Pacific (ATM.v): Looking to add. This one dropped as I thought it might
(UPDATE: on reading that I thought "Oh you annoying piece of crud Mark" when I got here on
the edit) and its new 18c price is now the right one for my addition. I'm looking to gently add to
this next week, though again the stress is upon small, I'm only picking around the edges so far.
Timmins Gold (TGD) (TMM.to): Going to hold a few more weeks. After thinking about it
I'm going to hold my TGD a while longer. Reasons:
1) Although TGD was down on the week, it looks as though the final Friday afternoon drop was
a little false and TMM.to's modest winning week is a better straight line, however weak the
Loonie was against the Greenback (CAD$1.23 to CAD$1.245 on the week). This one month
chart shows how TGD, for my money at least, is trading falsely.
GDXJ and TMM.to are pretty tight, so what's with the US listing of Timmins Gold anyway? As a
holder of TGD (rather than TMM.to) I'll suck it up, no problems and over time these things will
always iron themselves out. But I don't have to ignore the obvious and sell just because, either.
2) With that said, Timmins (in either of its guises) also traded better than most last week,
which smacks of a stock that really is at a low point. Again, why sell a stock at (what looks like)
its lows?
9

3) It's no secret that if gold goes up, they'll all go up. If I sold my TGD position tomorrow
morning first thing I'd either want to hold the cash or buy something else. Answer one, I have
enough sidelined money right now. Answer two, I don't think I'm smart enough to find the
place that will offer me the beta on TGD (unless I got lucky).
Bottom line: It was hardly the rocket rebound of all time last week, but on sober reflection the
decent performance put in by Timmins Goldand the way in which it showed resistance at the
U$0.60 or CAD$0.76 level, means that I shouldn't be in a hurry to dump this "just because". It's
still a near-term trade because that's how it was set up, but I gave myself June in the original
decision and I'm going to stick with that timeframe.
B2Gold (BTG) (BTO.to): With this one here in the stock comments, along with all others on
the list, be clear that I wasn't following the market in any way, shape or form until Thursday
morning last week. That said, I can still fake it by staring at the squiggly lines on the five day
chart and saying things like...
..., "Oh well, in my expert opinion BTO did well to recover most of the drop Tuesday that came
on the back of the hit taken by the gold price". That facetious enough for you? Ok.
This next chart makes an altogether better point. The month of May has been good to BTO, as
volume increased into its 1q15 financial
publication on Friday May 15th (that weekend
IKN called Top Pick) while tracking the sector
closely. From that point (while kindly waiting a
day befoe launching to allow me to add) BTO
de-coupled frm GDXJ and the others and has
beaten the average handily.
It was good to see that volume re-appear in
BTO. It was even better to witness the way in
which it improved and held onto its advantage
once the 1q15 numbers were known. That's
the market's way of saying "We approve Clive,
more please". Top Pick and as I have some
room left in the position, if there's any sort of dip I'll ad a few more.
Dalradian (DNA.to): After canvassing opinion, there are two schools of thought around the
sudden spike put in by DNA late Friday:
1) Somebody at RBC fat-fingered the trade. This is my idea of the most likely and as evidence,
here's a chart from last week's action of DNA.to alongside a couple of other juniors, namely
AXR.to (Alexco, a company that's gone nowhere recently and has the Keno Hill property in now-
10

unfashionable Yukon, I'm agnostic on it) and MSV.to (Minco Silver, an awful thing with a project
or two in China run by a dubious character and with serious permitting problems)
They all spiked hard at the same time, all on
volume and all on buying from RBC (house
two). There were others such as the even
bigger spike in Excellon (EXN.to) at the same
time, also from heavy RBC buying action. I
didn't include EXN.to in the above chart
because the spike was so violent (+150%
approx) that it threw out the comparatives for
the others.
2) Somebody at RBC knows something. It's
notable that DNA purchases continued after
the bell in the semi-liquid and very limited
after-hours trading in Canadian listed
companies. In that Friday period RBC flipped
275,000 shares to itself (2) at $1.10, which
isn't the type of action you'd normally expect
after a fat finger trade that would (almost
certainly) be quickly spotted.
As for my call, I hope to be wrong but I'm
pretty sure it's a fat finger and that DNA isn't
about to come out with some massive market-
moving news such as a buyout on Monday
morning. The A/H in-house cross may be
somebody assuming responsibility for a FUBAR
trade, plus just a few minutes after the bell top management were totally in the dark about the
move or why it might be (maybe they're a bunch of excellent actors, though), plus the way in
which the asks were gobbled up smacks of one of those occasions when some jock trader puts
the decimal point in the wrong place. We'll see, and I'd also state for the record that I think
DNA.to is worth every penny of this weekend's $1.10 price and more, but I'm it to come off the
highs by this time next weekend.
Regulus Resources (REG.v): REG reported its quarter to end March 2015 on Friday evening
(its the company's Q2 period) and all seems reasonably in order. Cash is fine at $10.9m (we'd
estimated $10.5m at end period), expenditure in this current quiet period has been low, the
only apparent activity being baseline community relations. Here are a couple of charts to
confirm the previous analysis on the stock, it all looks pretty reasonable from where I am. The
news we want from REG.v is that of a formal agreement between company and locals that will
allow them to explore in 2016 the way they want to explore. Until then, low radar.
REG.v: Working Capital per qtr
15
14
13
12 11
10
9
8
7 6
5
4
3
2
1
0
11
31.peS 31.ceD 41.raM 41.nuJ 41.peS 41.ceD 51.raM tse51.nuj tse51.pes tse51.ced
source company filings
srallod
fo
snoillim
REG.v: Expenses and quarterly loss
1
0.9
0.8 0.7
0.6
0.5
0.4 0.3
0.2
0.1
0
21.ceD 31.raM 31.nuJ 31.peS 31.ceD 41.raM 41.nuJ 41.peS 41.ceD 51.raM
source: company filings, IKN ests
srallod
fo
snoillim
tot expenses
Net Loss

Lara Exploration (LRA.v): Both Brent Cook and I were impressed by the outlook section in
the 1q15 financials posted by LRA last week. And we're both re-publishing them this weekend
to draw more eyes to the short paragraph:
Outlook
The strategy of the company for 2015 is twofold, to: (1) remain sustainable by reducing
costs and selling assets; and (2) seek to acquire new properties and targets while the
market remains weak. The Company has received payments in cash and shares from
the sale of assets, which has meant that we have not had to issue new shares to
finance our activities. While this remains a challenge, we intend to continue to prefer to
squeeze our existing portfolio rather than undertake a dilutive equity financing. Our
team is now reduced to a core group focused on new business, primarily in Brazil and
Peru, though we remain opportunistic in Colombia and Chile. It is hard to stake new
ground in Brazil right now pending finalization of the proposed new mining laws,
though we continue to look at acquisition opportunities. In Peru, quite a lot of ground is
being dropped, as companies have had to reduce their exploration budgets and we
hope to be able to register new properties claims there in the coming months.
This in a nutshell is why I'm a faithful holder of LRA. For sure I'm also the mug that rode it
down to this level and more fool me, but this model is the essence of the Land Grab concept for
2015 and beyond and its corporate strategy of keeping properties on board and operations
tightly run will make it one of the sure survivors of the sector (unlike the riskier move of owning
LGN.v, for example).
Starcore Intl (SAM.to): There was no NR from SAM.to on the quarter ended April 30th last
week and as the equivalent production report for the 2014 period came on May 30th, it's a fair
guess that it will come very soon. So, this week. Here's a chart that shows the last couple of
years of quarterly AuEq production numbers.
oz AuEq SAM.to: Gold Equivalent produced
7500
6900 source: company filings
7000
6315
6500 6000
6000 5749
5338 5381
5500 5100 5130
5000 4800
4500
4000
3500
3000
2500
2000
1500
1000
500
0
jan.13 apr.13 july.13 oct.13 jan.14 apr.14 july.14 oct.14 jan.15
The 5,130 oz AuEq in the latest quarter to end January was short compared to other quarters,
but even so the company managed to have a breakeven quarter. I'd heard at the time on the
grapevine that SAM.to was getting a better run in April, with better grades mined. Not counting
any chickens before they're hatched though and it's notable that traded volume has dropped off
recently, normally a negative signal.
The Copper Basket
After twenty-two weeks of 2015 The Copper Basket is showing a 6.84% loss to level stakes.
12

company ticker price 1/1/15 Shares out Market Cap current pps gain/loss%
1 Capstone Min. CS.to 2.03 381.95 462.16 1.21 -40.4%
2 Reservoir Min. RMC.v 3.96 47.55 227.29 4.78 20.7%
3 NGEx Resources NGQ.to 1.17 187.71 176.45 0.94 -19.7%
4 Nevada Copper NCU.to 1.65 80.5 151.34 1.88 13.9%
5 Amerigo Res ARG.to 0.27 173.65 74.67 0.43 59.3%
6 Copper Fox CUU.v 0.135 402.96 62.46 0.155 14.8%
7 Western Copper WRN.to 0.68 93.68 52.46 0.56 -17.6%
8 NovaCopper NCQ.to 0.58 60.15 48.12 0.80 37.9%
9 Hot Chili Ltd HCH.ax 0.16 333.11 43.30 0.13 -18.8%
10 Panoro Minerals PML.v 0.295 220.64 34.20 0.155 -47.5%
11 Regulus Res REG.v 0.35 56.39 20.30 0.36 2.9%
12 AQM Copper AQM.v 0.06 141 8.46 0.06 0.0%
13 Metminco MNC.ax 0.008 1822.6 8.20 0.0045 -43.8%
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 -6.84%
The overall basket average dropped by 0.97% 4% The Copper Basket 2015, weekly evolution
and the bodycount was seven losers (CS.to, 2%
NGQ.to, NCU.to, PML.v, WRN.to, ARG.to,
0%
REG.v), four unchanged (CUU.v, AQM.v, COP.to,
-2%
CCY.v) and four winners (RMC.v, HCH.ax,
-4%
NCQ.to, MNC.ax). Best percentage move came
-6%
from Metminco (MNC.ax up 12.5%) as that one
-8%
has finally found a range inside which to
bounce. Worst of the losers was Capstone -10%
Mining (CS.to down 13.6%) which reflects the
harder time had by the larger sized copper
producer names than the smaller explorecos.
I'm going to pay close attention to what Gary
Tanashian has to say about copper in his NFTRH
this weekend (UPDATE: He says it's not dead but
must bounce, and $3/lb remains the tough place
to break). This five day chart is one thing and
shows the dump down to $2.73/lb last week, but
the weekly chart seems to show (for me) a
serious price breakdown in copper. I'm not an
expert in TA, never have been or will be, but I'm
aware that copper's run by China and China
really likes its charting, so attention must be
paid. As things stand today my direct exposure
to the metal is via NCQ.to and REG.v, which is
small and manageable. If need be (and if
allowed an out into its rather thin bid) I'd dump
NCQ.to if copper really goes South. I like its
longer-term chances, but as recently information
shows it's not going to go anywhere soon,
Sunward on board or not, there's not much tying
me to its name either.
13
ht4naj ht11 ht81 ht52 ts1bef ht8 ht51 dn22 ts1ram ht8 ht51 dr32 ht92 ht5rpa ht21 ht91 ht62 r3yam ht01 ht71 ht42 ts13
source: IKN calcs

We move to inventories, it's month-end, here are the regular longer term charts:
We see both Shanghai (the big move) and the LME (smaller) coming off their highs of March
2015, which is nominally bullish. But consensus commentary is also about slack end-user
demand and some pretty selective buying sprees of copper by the main Chinese State stockists.
This time two years ago world stocks were much higher, but that was a lot to do with the big
metals players (banks and traders) gaming the warehouse system to cream off storage
commissions. The system has changed for the better since then and if we compare May 2015 to
May 2014, things aren't nerly as optimistic there are 200,000mt of extra copper in the system
today. The current stalling prices may bring the buyers back, that remains to be seen, but
200kt Cu is a lot of metal. The overall smell in the air: Bearish.
Now for weekly inventory moves, here come the bullet points as usual:
• Overall world copper stocks dropped by 14,999 metric tonnes (mt) (-2.9%) to break
under the 500k barrier and finish the week at 498,591mt.
• Shanghai Futures Exchange stocks dropped once again, the trend continues with this
week down 6,583mt (-4.0%) to finish Friday at 156,053mt.
• LME warehouses stocks dropped by 8,675mt (-2.6%) to finish at 322,150mt and a bit
of a downtrend now kicking in.
• Comex warehouse stocks dropped 279mt (-1.3%) to finish at 20,388mt, another minor-
scale move.
Shanghai continued its downward drift last week, though again we note that this time last year
stocks were already under 100k. If the curve flattens out from where it is this weekend, bears
will growl hard.
Shanghai Futures Exchange Warehouse Stocks, 2014/2015
260000
240000
220000
200000
180000
160000
140000
120000
100000
80000
60000
14
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 ts13
Copper inventories, per month 2012-2014
1000000
900000
800000
700000
600000
500000
400000
300000
200000
100000
0
Mt Cu
source: Cochilco
21.naJ bef ram rpa yam nuj luj gua pes tco von ced 31.naJ bef ram rpa yam nuj luj gua pes tco von ced 41.naj bef ram rpa yam nuj luj gua pes tco von ced 51.naj bef ram rpa yam
Mt Cu Copper inventories: percentage held per exchange
LME Shanghai Comex 80
70
60
50
40
30
20
10
0
source: Cochilco
21.naJ bef ram rpa yam nuj luj gua pes tco von ced 31.naJ bef ram rpa yam nuj luj gua pes tco von ced 41.naj bef ram rpa yam nuj luj gua pes tco von ced 51.naj bef ram rpa yam
LME Shanghai Comex
source: Cochilco

Codelco's 1q15, a window on the sector
As for stock commentary this week, I want to do something very different from the norm in this
section. Instead of fiddling with our junior
explorecos, the way in which Capstone's (CS.to)
relapse in May has pushed back towards its 2015
lows shows the tough time that producers are
having. CS.to is a leveraged play with debt on board
and a high cash cost and as such isn't my idea of a
benchmarker for producers.
What fits better is a large, established and profitable
company that derives nearly all its revenues from
copper and there's none better than Codelco, Chile's
State-run giant. As luck (!) would have it, Codelco
reported its 1q15 numbers last week and they made
plenty of headlines too, mostly for the wrong reasons. This report (3) on the announcement in
Chile's La Tercera (arguably the country's newspaper of record) sums up the feeling well in its
first paragraph (translated):
"In the first three months of 2015 Codelco reported the third lowest quarterly excess
(aka net profit) since the Lehman Brothers crisis. Between January and March, the
State copper company added U$312m to the fiscal treasury, a figure only greater than
the U$104m of the fourth quarter of 2008 and the U$98m of the first quarter of 2009."
In other words, the educated but non-specialist press in Chile was not impressed.
This first chart gets to the heart of the problem at Codelco and it's why it's an interesting study
for our purposes. We look at copper sales versus costs of copper production (its other produced
metals, mainly moly, are considered a byproduct credit by the company and that makes sense;
this thing is copper period). Codelco may be a State-run behemoth and gets regular accusations
of being run inefficiently, but there's no doubt that it's a highly profitable operation and that's
because (to simplify greatly) it has had the pick of many of Chile's best copper projects and
deposits over the decades.
Codelco: Copper sales vs costs, per qtr
U$m
Copper Sales
3500
Costs
3000
2500
2000
1500
1000
500
0
1q13 2q13 3q13 4q13 1q14 2q14 3q14 4q14 1q15
source: Codelco
As the company NR last week pointed out (best numbers spun to the top) (4) the 4% rise in
copper production and the 14.7% drop in comparative cash costs (they produced copper at
U$1.361/lb in 1q15, very competitive) means that that costs number came in very well. The
problem isn't the operations, it's the one that screams from that above chart. Codelco's average
received price for copper in 1q15 was U$2.639/lb, some 17% lower than the comparative
quarter of 2014.
15

The 1q15 report from Codelco contains a lot more and I've been mulling over whether to show
deeper stuff such as the comparative performance of its higher and lower cost units, but in the
end I've gone the simple route because that above chart is the story. It's margins margins
margins, as even the biggest of the big copper players are finally seeing the squeeze.
Finally and in mitigation before moving to the second of two charts today, you can see even
from a scan of that dollar-demoninated chart that Codelco typically holds back some production
from sales in Q1 and adds them to Q2 (it's a China thing, new year and that). That partially
explains the drop in bottom line profits that La Tercera and others jumped on hard in their
headlines last week. Q2 won't be as bad.
Moving on. The second chart below shows the bottom line profits posted by Codelco, though
being a State owned company the terms need a little explanation because they're different from
the normal privately-owned entities. "Excedente" can be translated as "excess" and is what's
left over from Codelco after everything is paid. This is the money that's delivered to its owner,
the Chilean State (and its citizens) and it's the usual way in which Codelco's profits are
benchmarked in the country. Meanwhile, "Comparative profit" is an artificial calculation done by
the company that makes-believe it's a private company that pays normal corporate taxes to the
State before distributing a post-tax profit internally. It's the "If Codelco were a private
company, this is what its net profit would be" number that allows a fair comparative to the
other large copper producers of this world.
U$m Codelco: "Excedente" versus "Comparative Profit"
1400
"Excedente"
1200 comparative profit
1000
800
600
400
200
0
1q13 2q13 3q13 4q13 1q14 2q14 3q14 4q14 1q15
source: Codelco
Since 1q15 we have of course seen copper come off the
lows and there's little doubt that the average received
price will beat that of 1q15. The LME average for 1q15
of U$2.637/lb compares very closely to the Codelco
received price and in the first two months of the current
quarter the LME copper average has been U$2.796/lb,
some 6% higher (source Cochilco (5)).
The bottom line: I've held off from getting too deep in
the copper sector and from the way in which even the
largest players are seeing margins crimped now, that's
probably the right course. It's got me thinking as to
whether I should give up on NovaCopper (NCQ.to), as
the chances of serious sector recovery get more distant with every copper price penny drop
away from $3/lb. Preference is for precious metals, because most of the major players have
done the balance sheet cleansing already. Copper may have more pain to come.
16

The Low Cost Producer Basket
After 22 weeks, the 2015 Low Cost Producer Basket is showing a 8.61% 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 14.74 17.76 -4.1%
2 Barrick ABX 10.75 1164.67 13.81 11.86 10.3%
3 Newmont NEM 18.90 499.08 13.59 27.24 44.1%
4 Franco Nevada FNV 49.19 156.5 8.06 51.48 4.7%
5 Silver Wheaton SLW 20.33 403.75 7.70 19.07 -6.2%
6 Agnico Eagle AEM 24.89 214.12 6.89 32.17 29.2%
7 Buenaventura BVN 9.56 254.19 2.85 11.20 18.6%
8 Kinross KGC 2.82 1146.2 2.69 2.35 -16.7%
9 B2Gold BTG 1.62 921.27 1.57 1.70 4.9%
10 Pan American PAAS 9.20 151.64 1.43 9.44 6.2%
all prices in U$, using NYSE ticker prices Portfolio avg 8.61%
The Producer basket dropped 2.2% on average, but there were no real disaster moves
anywhere so if you're looking for a sector in capitulation, looks somewhere else. Nine losers
(not listing them) and just one winner in Newmont (NEM), with the worst downmove a
manageable 3.5%.
I note with some (not masses, but some) interest that just a few editions ago I was talking
about the potential of Barrick (ABX) overtaking Goldcorp (GG) for top place and biggest
precious metals mining cap. Just a few weeks later ABX is now in danger of losing its second
placed slot to Newmont (NEM) as that one continues its impressive rise in 2015 and ABX has
fallen back again. We're still 2% better off than in our GDX control. So it goes.
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 ht71 ht42 ts13
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 ts13
|
source: ikn calcs, NYSE/Nasdaq data

Regional politics
The US Dollar versus currencies of "Americas Mining" countries
We've heard a lot about the reduction in costs being enjoyed by mining companies recently,
thanks in part to the drop in local currencies versus the US Dollar (USD) which makes mining in
South America and other places more competitive. As nearly all metals mining companies sell
their wares in US Dollars (gold, copper, zinc, etc ad infin) and most these days report their
financials in U.S. Dollars (those in Canada that still report in Loonies tend to be companies like
Lake Shore Gold (LSG.to) that also operate inside Canada) the benefits of the stronger dollar to
the local currency is normally very significant.
But how much of a change have we seen? Here's a table that features what I believe to be the
main "Americas Mining Currencies" ex-USD and the change we've seen in their forex pair to the
USD in the last two years (it's to June 2015, you'll forgive me for robbing a single day):
Forex vs US Dollar, June 2013 to June 2015
Country Currency June 2013 June 2015 % change
Peru PEN 2.67 3.15 17.98
Mexico MXN 12.75 15.38 20.63
Canada CAD 102.8 124.5 21.11
Chile CLP 499 618 23.85
Colombia COP 1901 2534 33.30
Brazil BRL 2.12 3.17 49.53
source: Yahoo! Finance
Context is always necessary, so here are the headline consumer price index (CPI) inflation rates
for each country, which give a ballpark idea of how much cost and salary pressure there might
be internally (data from each regional central bank).
• Peru inflation 3.22%
• Mexico inflation 4.08%
• Canada inflation 1.91%
• Chile inflation 4.6%
• Colombia inflation 3.66%
• Brazil inflation 6.41%
And here's a chart that helps the visuals:
Percentage change of six 'Mining in The Americas'
currencies vs the US Dollar, June 2013 to June 2015
% change
60
49.53
50
40
33.30
30
23.85
20.63 21.11
20 17.98
10
0
Peru Mexico Canada Chile Colombia Brazil
source: Yahoo! Finance, IKN calcs
The biggest bargain would seem at first light to be the Brazilian Real (BRL), though that
probably came from a high starting point that made the Real uncompetitive at the time. Also,
the 2014 CPI inflation rate of 6.41% was the highest of our six featured countries. Colombia
has also seen its currency drop precipitously, a third in two years versus the dollar, but with a
less developed mining sector and its rep as a tough place to go mining the bargains are going
to be relative. On the other hand., headline CPI inflation at 3.66% in 2014 was okay. Then
18

come the other three, with Peru at an 18% the "least worst" but it still makes for bargains in
dollar terms.
With this purely financial analysis we are of course discounting the influence of downwards cost
pressure from the suddenly loose labour market (layoffs and more people looking for work
makes for lower salary bills) and cost of goods. EG. we've already noted that essential supplies
to mines such as reagents (NACN, H2SO4) or capital goods primaries (rebar, cement) have
dropped hard.
Mexico: Checking in on the long-term silver success story
Mexico is now firmly established as the world's number one silver producing country and with
this week bringing the latest figures (6) from the country's beancounters, the INEGI, I got
round to putting together a chart I've been meaning to run for months.
Mexico: Monthly silver production, 1980 to date
16
14
12
10
8
6
4
2
0
19
10/0891 10/1891 10/2891 10/3891 10/4891 10/5891 10/6891 10/7891 10/8891 10/9891 10/0991 10/1991 10/2991 10/3991 10/4991 10/5991 10/6991 10/7991 10/8991 10/9991 10/0002 10/1002 10/2002 10/3002 10/4002 10/5002 10/6002 10/7002 10/8002 10/9002 10/0102 10/1102 10/2102 10/3102 10/4102 10/5102
M oz Ag
source: INEGI
We see that from the rough 4m oz per month levels in 1980, the first phase of growth was in
the 90s and 00s to perhaps 2008, when the country averaged a monthly output of perhaps 7m
oz Ag. But since then the sector has taken off and the latest March 2015 figure of 13.39m oz Ag
is typical for the country. That's a big improvement and silver's serious biz in Mexico now.
Argentina: Taxman
Argentina's Chamber of Mining (CAEM) last week (7) asked for lower taxes on its activity from
any incoming President (i.e. Scioli or Macri) in order to relieve what it claims is a too heavy
State burden on the activity. The CAEM in its blurb stated that the fiscal burden on mining in
Argentina in 2013 was 38% of gross revenues, some 4.5% higher than in 2011 and higher than
neighbouring countries such as Chile (20.4%) or Peru (12%). I honestly don't know where they
get those cooked-up numbers from, as overall State burdens for all regional countries (once the
whole package is factored in, including worker participation, royalty, extra taxes) revolves
around the 40% mark, including the three countries named above (with perhaps the worst
being Ecuador at 51%). It's also very dependent on exactly which metal you mine, whether you
have tax credit advantages etc etc.
Colombia: PIPE 2.0
Last week the government of Juan Manuel Santos unveiled its re-booted growth and investment
plans for the country, called PIPE 2.0 (Plan de Impulso a la Productividad y el Empleo, or Plan
for the Impulse to Productivity and Employment and just for a change the acronym works in
English, too). With growth flagging under the weight of reduced exports (e.g. the chart on the
blog last week (8))

as well as the latent ill-effects of the over-protracted and currently unproductive negotiations
with the FARC terrorists, its government feels the need to do something and kickstart the
economy by re-booting its original growth plans. Or in the words of President Santos (translated
and with his spin guaranteed) (9):
"Growth perspectives have been coming down. Due exactly to that, and all the time
maintaining the banner of the best country growth in the region, we believe it
opportune to make an effort in order to boost the economy more."
There are several aspects to this growth plan, but as our brief is mining we'll stick to that single
sector and note that the government, chiefly via its Ministry of Energy and Mining, proposes a
long list of ideas to help get the sector back on its feet. The whole list (in Spanish) (10) is here
but we can lump the 20 separate bullet points into two main categories.
• Financial breaks. These include extensions to infrastructure and tax laws that will see
miners pay less tax on capex and zero tax on imported goods needed in capex, the freeing
up of cash held as guarantee by the government (environmental, mine closure etc), lower
royalties on some products (though this seems to apply more to oil & gas than hardrock
mining, from what I've read), etc
• Easier permitting. Less time to get permits for exploration etc, longer time limits on the
exploration phases per permit, lower costs for concessioning and surface access rights, etc
Overall there seems to have been a bit more thought put into this neo-Keynesian stimulus
package than is the norm in Colombia (not just the mining sector) and it looks likely to make a
difference. As for mining, it's bound to be welcomed by those already on the ground in the
country, but unlikely to attract more interest from abroad until the country can point to a
"winner" or two via a new mine start-up perhaps. RD.v comes to mind, CNL.to doesn't.
Ecuador: Sumaq Causay and mining redux
On the blog that evening I made a...pithy?...comment (11) about the 43-101 compliant PEA
filed by Ecuador Gold and Copper (EGX.v) for its Santa Babara gold/copper project in Ecuador.
It came with this table...
20

...on which I'd put a few red lines, in order to highlight the woefully poor economics of the
project. The problems in Ecuador don't finish with the lack of public (general) and community
(specific) acceptance for mining in the country, as a closer read of the PEA will point out. After
spending perhaps an hour on the document Friday evening I was struck with the way in which
Ecuador use of the US Dollar as official national currency was pushing costs higher, while all
around them are examples of countries benefitting from that very same strength which
translates into lower costs in local currency (see above). Then the tax burden in Ecuador, with
laws that require at least 51% of gross revenues go to the State (see that short piece on
Argentina today, also above).
It remains to be seen whether Lundin Gold (LUG.to) can make a go of Fruta del Norte, but as
that's the higher grading and margin operation practically imaginable in the country, if that one
can't be made to work there's precious little chances for any of the others. And President
Correa has already said that the laws won't be changed for miners any further.
Peru: The Tia Maria Weekly
Last week saw the second two day strike in the Arequipa region and in many other parts of the
South of Peru, in sympathy with the Tia Maria locals and their anti-mine position. Fortunately
(and for a change) the marches and protests went off relatively peacefully with only small and
isolated incidents reported.
In other news, Southern Copper (SCCO) this weekend announced (12) a 150m Soles (U$48m)
fund was to be set up which would be available for compensation for any agricultural worker or
land owner affected by environmental problems by Tia Maria once in operation. The company
also announced a 15m Soles (U$4.8m)fund for low cost lines of credit for local farmers who
wanted money to invest and expand their agricultural operations in the Tambo Valley. This is
apparently part of the hearts and minds operation the company is running during the current 60
day "pause". It also announced it was going to arrange trips for Tambo Valley locals to its
Toquepala operation in Moquegua region (not so very far from the Tia Maria project, perhaps 6
to 8 hours drive) in order to show them how they go about their day-to-day ops. Of course this
begs the question as to why they haven't done any of this before, but it is at least one small
step in the right direction for community concerns. However, SCCO also insists that its current
environmental impact permit, with social approval and all, is still valid and it won't need to
chance anything. The national government said as much, too. Meanwhile, those of you wanting
a reasoned and sound opinion from a Peruvian politician about Tia Maria should read the Q&A
with Yamila Osorio, governor of the Arequipa region, out today Sunday (13). It was a very
pleasant surprise to read that interview this morning as she comes across as that most rare of
beasts, the intelligent politician in Peru. As she's just 29 it gives me a little optimism for the
future of the country political scene as well.
Peru: Puno appoints an illegal miner as director of regional mining
Yup, you read that right.
The new governor of Puno region elected late last year, Juan Luque, has just appointed (14) a
21

new head of Puno's Regional Directorate of Energy and Mines (Dirección Regional de Energía y
Minas, normally known as DREM), which is the control body for mining in the region. His name
is Silverio Fischer Condori Chino, he was one of the financial supporters of Juan Luque in his
election campaign and he just so happens to be the owner of a large part of the Ananea region
mining concessions in Puno which have been mined illegally for many years. The parts owned
by Sr Condori were put "in process of formalization" very recently, but there's no guarantee at
all that they move from being mined informally/illegally to a formal status with the government.
By way fo example, many of the approxiamately 25,000 informal mine workers have now
started the "process of formalization" paperwork to get in with the national government and
avoid any closure, but to date only 631 of them have finished the paperwork and formalized.
Puno is a difficult place to go mining. Even more difficult to understand.
Market Watching
Want to buy an iron ore mine in Chile? Price one dollar (maybe)
A quick and condensed background into a mine never mentioned until today on the blog or
these pages, but is a reasonably infamous story in the region. The Santa Barbara iron ore mine
was re-named the Vallenar Iron Company mine (from the nearby town of Vallenar in Chile) in
2009 after a legal battle between then JV owners Admiralty Resources and (the very sketchy)
Chilean entrepreneur Leonardo Farkas. It then went into the local version of Chapter11 and was
declared fully bankrupt as a business in 2013.
It's recently been put up for sale by the bankruptcy administrators and in the first auction sale
held a few weeks ago and the U$12m reserve wasn't reached (so went the official line). Then
last week a second auction with no reserve was held, with the result of no bids received at all.
In its time, Santa Barbara/Vallenar was the second largest producing iron ore mine in Chile with
proven reserves of iron ore of 60 million tonnes (15). The mine was being auctioned last week
free of any lien or underlying debt, with any eventual owner only having to pay for the property
upkeep going forward, but it still managed to attract zero bidders at any cash price.
Perhaps an iron ore mine that couldn't even run economically before the underlying metal
dropped hard isn't the most attractive thing out there (I'm certainly no fan at all of small iron
mines and never will be), but the event last week is worth reporting because these are the
things that happen to assets at the bottom of a market.
Bitgold (XAU.v): A final word
Here comes an expansion on the post I stuck on the blog Friday (16) with the observation that
this company cannot be taken seriously any longer. And then after today that's it, end of the
line, I have better things to worry about.
In a previous post on XAU.v dated May 19th (17) entitled 'The funniest thing about Bitgold
(XAU.v)' I wrote this little section (highlights today):
"...the fun has been watching the rise in seething hatred for the stock in people who play the
Canadian junior mining companies, partly because they now feel stupid for caring about digging
holes in the ground and thinking that precious metals are the true source of all wealth, partly due
to the nostalgia and the "hey, remember when we could hoodwink em all like that too?" feelings it
brings on by watching from the sidelines. Or maybe it's the thought of what XAU.v directors
would do if they were offered a 100m share bought deal at $3 by some brokerage tomorrow
morning. Or even $2. Fark, they could raise a quarter billion, buy out ten shitty explorecos and
reinvent themselves as Sandstorm's next acquisition target. And face it, Nolan's bought into
worse stories."
Strange. Although the details and how the chips have fallen (so far) aren't exact, the general
thrust of the idea has been close to how XAU.v has unfolded.
Three days after that post, Bitgold announced (18) it was using 11.17m of those obviously
22

overpriced shares to buy GoldMoney (we shows the troubled financial snapshot of that one last
weekend). Then last Friday morning Bitgold announced (19) it was running a 5m share bought
deal at $3.65 per share to raise gross proceeds of $18.25m and perhaps up to 21m if the
overallotment is filled.
Two comments to make.
1) First the confession of sorts; I wrote what I wrote on May 19th because I'd decided to let my
mind wander free and suppose on what I'd do if I were heading up Bitgold and just in it for the
quick hit profit. Yes you'd probably gathered that, but it wasn't meant to be a serious
commentary, it was just a blog thing. As things turn out XAU.v hasn't emitted 100m shares, but
16.17m (plus another possible 0.75m) in the space of less than two weeks in exchange for hard
assets is well on the way. Cut to the chase, it's what a company does when it knows that its
shares are being wildly overpriced by the market and wants the easy cash-in quick hit.
2) The day after that May 19th post I had an exchange with the main central figure in XAU.v,
Roy Sebag, who mailed unsolicited and we had a cordial exchange of four mails, two apiece. In
the course of that exchange it was made perfectly clear that according to the company CEO
XAU.v didn't need capital. Therefore what I've witnessed from the sidelines is an attitude
adjustment of Road to Damascus level in such a short time.
Somewhere in the background I hear that classic old adage of the Canadian junior market, "If
they offer you money, take it", one that's far more common in better times for juniors than it is
now. XAU.v isn't a junior mining company but it is connected with gold and it's hit the
marketing sweet spot with enough people to get acclaim (and even weekend business feature
slots in The Guardian (20), for which they'll thank the Soros backers for sure). But I'm just
going to laugh at you if you tell me that "stock goes to $4 and we buy out GoldMoney and then
we raise $18m in a $3.65 placement" was part of an integrated plan. This company came up
with an idea that's captured the imagination of a bunch of rich hardmoney people and since
then has improvised its way to treasury. Bitgold ATMs? Give me a break, I've watched as a
hundred cryptocoins have floated that one at the market, let alone the big guy Bitcoin which
still cna't make a go of it.
That Guardian piece linked above ends with Bitgold's Josh Crumb saying this:
“If we’re right, we’ve built the next PayPal,” he says. “If we’re wrong,
we’ve just built another one of those bullion trading businesses.”
Well maybe. And maybe if they're right it is
the next PayPal. but if they're wrong it won't
just be "a bullion company" as a consequence,
because by the time the world has worked out
they're wrong they'd have also transferred
large wealth from the pockets of third party
investors into their own via the sales of
overpriced bubble shares. One thing I never
swallow from a businessman is when they
paint a no-lose scenario, because it's only ever
no-lose for a very small group in the centre.
And that wraps up Bitgold on these pages, it won't be mentioned again.
23

Almaden (AMM.to) (AAU) watch, part three
I'm still keeping an eye on how this one trades and it
did okay pricewise last week by bucking the
downtrend and ending unchanged at U$0.92 (the AAU
ticker does far more volume), though volumes
dropped notably after a couple of weeks of decent
trading on the back of its Almedex spin-out news, so
that's not such a good sign. Just one day out of the
last eight has seen 100k+ daily trading on AAU,
Still on watching brief.
Tahoe Resources (THO.to) (TAHO): A hour with Black
I think last Monday was the first time I'd met Alex Black without being a shareholder of the
company he heads. We had about an hour on Monday afternoon and main subject of discussion
was the political risk situation. The next day Tuesday CEO Black was off to Guatemala to meet
with business leaders etc in the capital city and spend a few days there, so he probably has a
fuller idea of at least one half of the story by now. But on Monday he was taking very much the
same approach he took when everyone was criticizing Peru and RIO.to was stuck in the middle
of the new Humala government. Under Black, new Tahoe will be looking after the thing it can
actively affect in community and political relations, which will start and finish with the good
standing of the company in the local san Rafael La Flores area. When it comes to the wider
national political scene and the travails of the current Otto Pérez Molina government, the
company will play the cards it is dealt, simple as that.
We talked on several subjects regarding local community relations and I came away with a
much more positive opinion of the company too. People who know Black will tell you he's frank
and open and he's been quick to recognize mistakes that have been made in the Guatemala
operations. What comes now is the adjust and to correct matters, which won't happen
overnight but you'd be silly to bet against the guy and his track record.
Meanwhile in Peru, La Arena is going great guns but there have been reports of roadblocks and
protests at the Shahuindo project so I asked him about that. The reply was that the trouble is
being caused by small groups of informal miners nearby the project who want and have not
been offered jobs there. As a result they've been blocking the roads on occasion and causing
mild disruption, but CEO Black was keen to point out that development is still very much on
track, there are no serious delays and first pour at Shahuindo is on schedule for 1q16. The
troubles with local artisanal miners (not ones who come from the zone, but others imported in)
look to be a low scale risk and I wouldn't worry a minute about this part of the TAHO mix if I
were a shareholder. And on that subject, I must say that I'm warmer to the company and the
possibility of going back in than i was this time last week. Guatemala is the big unknown and
I'm keen to see how the national political scene unfolds from now until the slated September
6th election date. From there we'll see.
Focus Ventures (FCV.v): Brief encounter
I met up with David Cass, president of Focus Ventures (FCV.v) for lunch on Monday (a very
decent ossobuco, thanks for asking), before he took a technical party up to Piura and the
company's Bayovar12 project for a couple of days. Three matters to report.
1) The current financing will close very soon, with the full $4m gross proceeds. FCV will use
some of that to pay back a portion of the Sprott loan, the rest will be working cap. All good.
2) The PEA is on development schedule and we can expect it "in Q3". Get me to guess and I'd
say that FCV will wait until the main Northern summer holiday season is done and Labor Day is
behind us, so I'm slating early September. I didn't get any details of its contents, but the team
24

is happy with the data inputs so far.
3) FCV is obviously getting keener on developing the Direct Application business at Bayovar12,
instead of concentrating on the larger and higher-capex classic phosphates project. The Direct
Application method could even be developed side by side with a larger mine, it would seem.
Bayovar12 is particularly suited to this (not much more than) bag the dirt and sell it method,
being naturally low in impurities and easily ground to the right size for bagging. I'm a big fan of
this option and have told FCV so on more than one occasion because the numbers makes sense
and it's also very scaleable. As low-capex option to get going quickly, it could even be run by
the current JPQ JV (70% owned by FCV, with plenty of expertise on tap from the partner).
What we're likely to see from Q3 onwards is an FCV that will promote on two fronts, aiming for
the big win via a deal with a major to finance the large-scale project laid out in the PEA, but
also looking for a deal to bring a smaller Direct Application operation to life. They'll need
perhaps $20m for that option to get going, not a large barrier.
Tinka Resources (TK.v): Interesting
On Wednesday I caught up with Tinka Resources (TK.v) over lunch, a company that's been
mentioned here on a few occasions with a main piece written in IKN289 (if you want a copy,
just ask). so far at least I haven't pulled the trigger on the stock, but as zinc plays go it's just
about the only one that has my attention there days. Here are some thoughts:
The latest corporate presentation dated March 2015 (21) is all about Ayawilca and rightly so. As
noted in the previous write-ups on TK.v it's head and shoulders the flagship property and for
our purposes we can forget all about its second string nearby, Colquipucro.
There's been a lot made in write-ups on TK.v about its tin content I've read over the last few
months, both from a geological perspective (though usual in the Bolivian Andes it's very
unusual in that neck of the woods, and there's 1,600km between Ayawilca and Peru's border
with Bolivia) and from a potential economic perspective (there are a lot of newsletter pumps
about this stock and it's been that way for years, the type that latch onto any detail and only
ever see the positives). From what I heard, we can discount the tin content in the near and
medium term as a reason to like TK.v. Though at depth it's often found with or a halo around
the Zn rock, but it's not going to be particularly high grading (0.3%?) and crucially, it would
need a separate mine mill circuit to make it payable in the evnt of a mine ever being built there.
So front and centre this project is all about the zinc, look no further, if the numbers don't work
on Zn alone, we walk away. Ayawilca would get some byproduct kicker benefit from the indium
and silver contained, but those are going to be minor as well. If we work on the current 5.9%
Zn and 7% ZnEq by adding those two kicker metals, that's fair enough at this stage.
25

• On pages 9 through 13 on that linked presentation above, there are a series of plates
about the geology of Ayawilca and the above is one of them. The reason to show this is to
give an idea of the main objectives of the drill program coming up in the next couple of
months. now TK is fully funded for 2015 (see below) and as the community onside it's all
green lights bar the last couple of straightforward permits for the program that's set to
look between Ayawilca West and East in order to attempt to connect the two main zones
of mineralization found so far. This will be an important period in the exploration of the
project, because if successful they'll not only add very significant poundage to the current
43-101 resource, but will also get much more attractive continuation and therefore
mineability (dat a word?), which will make it significantly more attractive to any buyer.
• I chose this diagram because it makes the concept visually easy. The red zones are the
money, so if TK can drill between them and find more zinc mineral, it joins the jots, adds
tonnage and makes it into one big lump of underground rock. The geology guys at TK now
have to get on and do their thing, decide where to sink the holes and look for success
from The Truth Machine. They sounded pretty confident last week during the meeting and
that's a good thing, but then again they would say that.
• However, that's the game here and to be honest, I've seen much worse. Ayawilca is a
totally blind mineral deposit (there's a good anecdote about the accidental way it was
discovered, but that's for another day) and there's a long way to go before it's adequately
understood. They've already found a lot, there could be a lot more and with better
continuation on the mineralized area it will be time to pull the trigger.
• Moving to corporate stuff, TK last week closed the placement (22) that raised gross
proceeds of $7.25m by issuing 33.737m units (unit = 1 share + 3/4 warrant) at $0.215
apiece. The new holder is the IFC, financing arm of the World Bank who've bought into
into many exploreco placements over the years, sometimes they do well (Antares)
sometimes they do spectacularly well (they still own a chunk of Yanacocha, begad) but
they're not to be associated with pure slamdunks either. Check how badly they've done in
Colombia over the years, for example. Anyway, IFC now own 14% of the company and
join the major holder Sentient, who added to their own position in this round and now own
21.46% of TK.v. Fair enough and that's decent insto support all told.
• By my reckoning, all that puts the shares out total at 149.75m and a market cap of
$42.69m. With (an IKN estimated) $8m in treasury that's ok, but it's not a knockdown
bargain share price either.
Bottom line: I'm still leery of the Canadian board side of this company, said it before and I'll say
it again, TK.v has a history of being pumped and that's not a good thing. But unlike many
Vancouver pump jobs, its flagship project is now showing as a real deal property so if they find
what they think they'll find, it doesn't matter who they pay in the future to promote it to the
naive, they'll all win thanks to geological reality. Meanwhile, the geological team in Lima is top
class (and for my nose they're separate from the investor relations goings on, which is a very
good thing) and that gives Ayawilca every chance of making it.
Minera IRL (IRL.to) (MIRL.L): Alive
The main meeting with IRL was on Monday with interim company CEO Diego Benavides, who's
also the company president of course, in charge since the untimely death of Courtney
Chamberlain. I'll say now that my visit IRL Lima office was the last one tacked onto my agenda
and a fair amount of the time was taken up by the personal level conversation that I'd mostly
gone for, but when we got round to the business I was surprised to find that this hour was
perhaps the most fruitful of all my time away from home.
Corihuarmi. By way of a starter course, some interesting news about life extension of this small
but profitable arm of IRL. As we'd noted way back before, the mineralization at Corihuarmi
26

continued onto a neighbouring concession that was held by a small company called Rae
Wallace. IRL had tried to do a deal with Rae Wallace on that land on more than one occasion,
but to no avail. However, in the big land concession drop of late last year Rae Wallace lapsed
on the concession and IRL quickly picked it up for the knockdown bargain price of U$300 (no
extra zeroes, that says three hundred United States dollars). As there's a resource of 20,000 oz
gold on the part of the land right next to where IRL is mining, there alone is nearly a year's
extra production tacked onto Corihuarmi. There are other targets on the newly acquired land
that could yield more ounces, too. Overall, we can now expect Corihuarmi to be producing into
2018 and there might be more to come. Not bad for a mine that in 2012 was expected to
produce to 2015 maximum. Interim CEO Benavides estimates operating cash costs at
Corihuarmi are running at between $750/oz and $800/oz, and all-in costs at under a thousand.
That means Corihuarmi's never going to make a big impact on the share price, but it's still neat
and profitable and just those minimum 20k ounces recently secured for $300/oz will make the
company $4m in profits at $1,200/oz. But however opportune, Corihuarmi is only ever going to
be a sideshow operation that helps cover G&A. The future of IRL's share price is directly
connected to a deal to finance Ollachea.
Ollachea. First and foremost, I'm not going to change my call on IRL.to, that of "hold
until Ollachea news, then we'll see". That's the most important thing to take away and
that's why it's in bold type. That call has been in place for months and it's not going to change
now. But I'm definitely not a seller of IRL today, either.
The company (not just interim CEO Benavides, I talked to other members last week) was being
very guarded. They're obviously not going to let the cat out the bag at what may be a late
stage. And I'm painfully aware (both from my own back pocket and those of you out there that
have followed me in) But from what I heard and saw, plus the interpretation of knowing the
people involved for quite a long time, adds up to a company getting close to a done deal that
will finance the flagship project of Ollachea and get both it and its share price moving again. I'd
venture very close. It would seem that since Courtney Chamberlain stepped down as he
became more ill, a new dynamic to get a deal done has moved through the company. There
have also been some signficant political barriers removed from doing deals with more than one
potential source of funds at a time, whiich means negotiations have apparently been speeded
up, with the inference (again, there was nothing explicit) that one of them has borne fruit.
Almost as important as the bold-typed words above are these: We will need to see the terms of
any deal. One of the constant phrases used on these pages about any eventual IRL deal to fund
Ollachea has been "devil in the details", so it's not just whether they ccan close funding, but
under what terms. Will they give away too much? Will it be shareholder unfriendly? Who are
the lenders, what reputation do they bring? Those and a thousand more.
As noted in 'Stocks to Follow' above, the current trading pattern in IRL stock is of small buyers
but even fewer sellers. That would fit into a scenario where the larger holders are waiting and
seeing on news, not ready to commit any further but not sellers either (and that might just be
my own bias confirmation, because it's been my policy all through this).
Conclusion
IKN316 is done, we end with bullet points:
• B2Gold (BTG) (BTO.to) traded like a real Top Pick stock last week and all May. It's the
right time to add to this, the second half of 2015 and the period in which BTO will start
strutting its stuff is a mere month away now.
• Even though the main part of last week's trip turned out to be a washout, it was a
fruitful visit to Peru's capital. I need to go more often.
27

• I'm really trying hard not to get too excited by the near-term future of Minera IRL
(IRL.to) (MIRL.L), because it's flattered to deceive on too many occasions already. The
boy who cried wolf syndrome is front and centre in my mind as I write this week's
conclusion, early Sunday evening. But it's got my full attention again and it will get
moved to the centre of my radar screen as from tomorrow Monday.
• Tinka Resources (TK.v) is the only zinc play I even care about these days. One of the
barriers to my entry is the metal itself, as it failed again to break out and it seems as
though the sellside market has been touting it to do just that for years on end, to no
avail. However, if Trevali/Glencore want to expand in Peru there's no other place they'll
be looking. Lets see how the drill campaign goes in the next couple of months, if they
can join the mineralizaed areas, it'll be a much more attractive proposition.
• Almaden is still on the shopping list, Timmins gets a reprieve. I'm thinking about other
Land Grab purchases and there's cash on the sidelines to fund them, too. I may need a
20 name list.
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
Footnotes, appendices, references, disclaimer
(1) http://www.mcewenmining.com/files/doc_presentations/20150528_agm_v11.pdf
(2) http://www.stockwatch.com/Quote/Detail.aspx?symbol=DNA&region=C
(3) http://www.latercera.com/noticia/negocios/2015/05/655-632075-9-nelson-pizarro-el-escenario-de-excedentes-en-
codelco-se-ve-complejo-y-esa.shtml
(4) https://www.codelco.com/codelco-reduce-sus-costos-14-7-y-eleva-su-produccion-en-3-
durante/prontus_codelco/2015-05-29/150117.html
(5) http://www.cochilco.cl/estadisticas/grafico.asp?tipo_metal=1
(6) http://www.inegi.org.mx/sistemas/bie/
(7) http://www.diariodecuyo.com.ar/home/new_noticia.php?noticia_id=670565
(8) http://incakolanews.blogspot.com/2015/05/colombias-exports-whacked-by-oil-price.html
(9) http://www.notimerica.com/economia/noticia-colombia-lanza-nueva-version-plan-estimular-economia-
20150529014147.html
(10) http://aminera.com/index.php/mineria-internacional/item/11587-colombia-minminas-anuncia-gabelas-para-elevar-
producci%C3%B3n-en-sector-minero-energ%C3%A9tico.html
(11) http://incakolanews.blogspot.com/2015/05/i-wonder-why-ecuador-gold-and-copper.html
(12) http://www.holaciudad.com/empresarios-preocupados-la-debilidad-del-estado-peruano-frente-las-protestas-
n590820
(13) http://incakolanews.blogspot.com/2015/05/yamila-osorio-on-tia-maria.html
(14) http://www.pachamamaradio.org/28-05-2015/el-colmo-minero-informal-seria-nuevo-director-de-mineria-en-
puno.html
(15) http://aminera.com/index.php/mineria-nacional/item/11577-declaran-desierto-por-segunda-vez-el-remate-de-la-ex-
minera-de-farkas.html
(16) http://incakolanews.blogspot.com/2015/05/bitgold-xauv-company-that-needs-no.html
(17) http://incakolanews.blogspot.com/2015/05/the-funniest-thing-about-bitgold-xauv.html
28

(18) http://finance.yahoo.com/news/bitgold-inc-announces-cad-51-115000631.html
(19) http://www.benzinga.com/pressreleases/15/05/m5551480/bitgold-announces-c-18-2-million-bought-deal-financing
(20) http://www.theguardian.com/money/us-money-blog/2015/may/31/bitgold-new-standard-digital-currency
(21) http://www.tinkaresources.com/assets/docs/ppt/corporate-presentation.pdf
(22) http://www.tinkaresources.com/news/tinka-announces-oversubscription-and-closing-of-private-placement-financing
Stocks To Follow Closed Positions 2014
Closed in 2014 closed close price
Fortuna Silver FVI.to jan'14 C$2.80 23-dic-13 C$3.19 13.9% small ST trade closed
Rio Alto Mining RIO.to jan'14 C$2.06 07-jun-13 C$2.30 11.7% trading position finally closed
Network Expl. NET.v feb'14 C$0.01 22-jul-12 C$0.005 -50.0% position closed, did nothing
Tahoe Resources TAHO feb'14 U$13.10 08-abr-13 U$21.72 -65.8% short closed due to reality
Darwin Res DAR.v mar'14 C$0.10 14-jul-12 C$0.045 -55.0% tiny risk play dropped
B2Gold BTO.to mar'14 C$3.07 28-nov-12 C$3.35 9.1% closed to free up capital
Pretium Res PVG mar'14 U$5.38 22-nov-13 U$6.50 -20.8% short closed as port longer
Gold Res Corp GORO may'14 U$5.07 26-ene-14 U$4.12 16.7% took profit
Bear Creek Min BCM.v may'14 C$1.63 23-mar-14 C$2.05 25.8% Took profit, sm near-term win
Eco Oro Min. EOM.to aug'14 C$0.48 22-sep-13 C$0.26 -45.8% sold small loser to make room
True Gold TGM.v sep'14 C$0.395 02-feb-14 C$0.41 3.8% M&A won't happen, sold
Santacruz Silver SCZ.v sep'14 C$1.04 26-ene-14 C$0.86 -17.3% silver/M&A spec, rel. small
Timmins Gold TGD nov'14 U$1.38 09-abr-14 U$0.99 -28.3% failed trade, sell, raise cash
Kinross Gold KGC nov'14 U$2.90 20-oct-14 U$2.15 -25.9% V small trade, didn't work, chau
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.145 -48.2% lost China sponsor
Stocks To Follow Closed Positions 2013
Closed in 2013 closed close price
USA Graphite USGT feb'13 U$0.93 08-ene-13 U$0.17 81.7% short tgt made/trade closed
Lachlan Star LSA.to feb'13 C$1.50 30-sep-12 C$0.95 -36.7% sold to reduce port risk
United Silver USC.to mar'13 C$0.21 28-oct-12 C$0.095 -54.8% small Ag sector trade, failed
Aurcana Corp AUN.v apr'13 C$1.07 11-nov-12 C$0.55 -48.6% closed on poor YE results
Gold Res Corp GORO apr'13 U$14.11 25-ene-13 U$9.38 33.5% short tgt made/trade closed
Marlin Gold MLN.v apr'13 C$0.075 10-feb-13 C$0.065 -13.3% closed trade
Bear Creek BCM.v may'13 C$2.58 01-abr-13 C$2.40 -7.0% near-term, time ran out
Lupaka Gold LPK.to may'13 C$1.12 23-oct-11 C$0.32 -71.4% towel thrown in
Tahoe Resources TAHO may'13 U$18.62 08-abr-13 U$14.70 21.1% took profit on ST short
OceanaGold OGC.to jun'13 C$3.03 16-sep-12 C$1.18 -61.1% sold on gold drop
IMPACT Silver IPT.v jun'13 C$1.14 13-ene-13 C$0.62 -45.6% sold on silver drop
Duran Ventures DRV.v jun'13 C$0.045 10-may-13 C$0.025 -44.4% ST trade never worked
Plata Latina PLA.v jun'13 C$0.79 10-abr-12 C$0.13 -83.5% closed
Bellhaven BHV.v jun'13 C$0.065 03-jun-13 C$0.12 84.6% closed ST trade
B2Gold BTO.to aug'13 C$3.07 28-nov-12 C$3.44 12.1% sold 1/2 to raise cash
Colossus Min. CSI.to aug'13 C$0.72 24-jul-13 C$0.79 9.7% closed thru nerves on future
Pretium Res PVG.to aug'13 C$8.20 11-jun-13 C$10.14 23.7% closed to raise cash
Bear Creek BCM.v sep'13 C$2.06 30-may-13 C$2.20 6.8% sold on pol risk decision
MAG Silver MVG oct'13 U$7.00 12-sep-13 U$5.62 19.6% near-term short
Gold Res Corp GORO oct'13 U$9.52 03-may-13 U$4.98 47.7% short tgt made, covered
AQM Copper AQM.v oct'13 C$0.31 16-oct-11 C$0.125 -59.7% closed failed trade
First Majestic AG nov'13 U$11.51 07-nov-13 U$10.50 8.8% v near term short, closed
Fortuna Silver FSM nov'13 U$4.00 07-nov-13 U$3.68 8.0% v near term short, closed
Primero PPP nov'13 U$5.70 07-nov-13 U$5.75 -0.9% v near term short, closed
Starcore Intl SAM.to nov'13 C$0.235 08-sep-13 C$0.17 -27.7% ST trade didn't work, sm loss
B2Gold BTO.to dec'13 C$2.22 28-nov-12 C$2.16 -2.7% closed ST trade to raise cash
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Stocks To Follow Closed Positions, 2012
Closed in 2012 closed close PPS
Soltoro SOL.v jan'12 C$0.87 07-nov-11 C$0.94 8.0% cash moved to BCM.v
Gold-Ore Res GOZ.to feb'12 C$0.84 13-oct-10 C$0.98 16.7% trade closed on ELG.v offer
Minefinders MFN feb'12 U$11.68 17-nov-11 U$14.80 26.7% target made, trade closed
Iron Creek IRN.v mar'12 C$0.58 26-sep-10 C$0.31 -46.6% time up on small bad trade
U.S. Silver USA.to apr'12 C$2.18 15-mar-12 C$1.86 -14.7% ST trade no good, cut loss
Augusta Res. AZC.to may'12 C$3.10 29-jan-12 C$2.07 -33.2% bad mkt, bad trade cut loss
Bellhaven BHV.v may'12 C$0.50 22-sep-10 C$0.28 -44.0% new mgmt not impressive
Zincore Metals ZNC.to may'12 C$0.325 29-jul-11 C$0.17 -47.7% bad mkt, bad trade cut loss
Soltoro SOL.v may'12 C$0.70 18-mar-11 C$0.41 -41.4% bad mkt, bad trade cut loss
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% fail ST trade close pre split
Estrella Gold EST.v aug'12 C$0.91 27-mar-11 C$0.14 -84.6% Closed on port realignment
Fortuna Silver FVI.to sep'12 C$1.07 03-may-09 C$5.32 397.2% sell call $6.17/ Mar25
Strait Minerals SRD.v oct'12 C$0.125 09-dec-11 C$0.12 -4.0% closing coverage til FY13
Sunward Res SWD.to oct'12 C$1.47 13-mar-11 C$1.21 -17.7% sold, took loss
Gold Res Corp GORO oct'12 U$21.47 09-sep-12 U$17.40 19.0% Short trade closed
Yellowhead Min. YMI.to nov'12 C$1.00 01-apr-12 C$0.63 -37.0% sold, took loss
Primero Mining PPP nov'12 U$7.26 07-oct-12 U$6.73 7.3% Short trade closed
Bear Creek Min. BCM.v nov'12 C$3.38 07-nov-11 C$3.72 10.1% Took small profit
Vena Resources VEM.to dec'12 C$0.70 31-may-09 C$0.18 -74.3% Failed trade (caps F)
Galway Res GWY.v dec'12 C$2.19 24-nov-12 C$2.30 5.0% closed good ST arb trade
Stocks To Follow Closed Positions, 2011
Closed in 2011 closed close PPS
Sunward Res SWD.v jan'11 C$1.05 21-nov-10 C$1.63 55.2% target made, trade closed
Serengeti Res SIR.v mar'11 C$0.245 05-dec-10 C$0.285 16.3% sold pre-tgt, ST trade fail
Fronteer Gold FRG apr'11 U$2.37 03-may-09 U$15.24 543.0% buyout, trade closed
Minefinders MFN apr'11 U$9.09 07-nov-10 U$16.89 85.8% target made, trade closed
Metalline Min. MMG may'11 U$1.04 26-jan-11 U$0.89 -14.4% exit, resource disappointed
Peregrine Met PGM.to jul'11 C$0.87 06-mar-11 C$2.60 198.9% buyout offer, closed
Dynasty Metals DMM.to jul'11 C$4.20 03-may-09 C$2.85 -32.1% Sold. Fail. Move on.
Aura Silver AUU.v aug'11 C$0.22 13-oct-10 C$0.16 -36.4% Bad pick. Take loss
U.S. Silver USA.v aug'11 C$0.52 26-jan-11 C$0.71 36.5% closed to make room
B2Gold Corp BTO.to sep'11 C$2.80 12-may-11 C$4.27 52.5% target made, trade closed
Bear Creek Min. BCM.v sep'11 C$3.80 27-may-11 C$4.17 9.7% macro sell call victim
Minefinders MFN sep'11 U$14.70 10-aug-11 U$15.15 3.1% macro sell call victim
Great Panther GPR.to sep'11 C$3.03 22-aug-11 C$2.64 -12.9% macro sell call victim
Fortuna Silver FVI.to sep'11 C$1.07 03-may-09 C$5.36 400.9% sold 20%, macro sell call
Focus Ventures FCV.v nov'11 C$0.40 20-apr-10 C$0.20 -50.0% cut losses, bad trade
Regulus Res. REG.v dec'11 C$1.17 14-aug-11 C$0.52 -55.6% cut on news of poor 43-101
2009 and 2010 closed positions in appendices below
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Stocks To Follow Closed Positions, 2010
Closed in 2010 closed close PPS
B2Gold Corp BTO.to Jan'10 C$0.88 08-nov-09 C$1.49 68.2% target made, trade closed
Radius Gold RDU.v Jan'10 C$0.18 23-aug-09 C$0.40 122.2% target made, trade closed
MAG Silver MVG mar'10 U$5.60 23-nov-09 U$7.28 30.0% closed in pdac week
Riverside Res RRI.v mar'10 C$0.435 20-sep-09 C$0.60 37.9% closed in pdac week
Amarillo Gold AGC.v mar'10 C$0.81 31-may-09 C$0.70 -13.6% closed in pdac week
B2Gold Corp BTO.to apr'10 C$1.24 18-feb-10 C$1.50 21.0% target made, trade closed
Lumina Copper LCC.v apr'10 C$0.84 14-jun-09 C$1.55 51.2% total position now sold
Troy Resources TRY.to may'10 C$1.10 03-may-09 C$2.25 104.5% sold on negative results
AuEx Ventures XAU.to may'10 C$2.51 24-may-09 C$3.38 34.7% trade closed
Nevada Copper NCU.to jun'10 C$3.27 14-mar-10 C$2.03 -37.9% need to lower Cu exposure
Carpathian Gold CPN.to jun'10 C$0.39 14-mar-10 C$0.35 -10.3% too exposed to cap raising
Amerix PM Corp APM.v jun'10 C$0.065 08-nov-09 C$0.05 -23.1% victim of macro bear
Antares Minerals ANM.v jun'10 C$1.42 06-dec-09 C$2.10 47.9% sold half
Vena Resources VEM.to jun'10 C$0.37 31-may-09 C$0.23 -37.8% sold half
Minera Andes MAI.to sep'10 C$0.75 28-jul-10 C$0.95 26.7% ST trade closed
Gold-Ore Res GOZ.to sep'10 C$0.52 01-aug-10 C$0.75 44.2% target made, trade closed
B2Gold Corp BTO.to sep'10 C$1.45 25-may-10 C$2.01 34.5% target made, trade closed
Blue Sky Uran BSK.v oct'10 C$0.41 19-may-10 C$0.22 -46.3% v small v bad trade closed
Dia Bras Expl DIB.v oct'10 C$0.14 30-aug-09 C$0.35 150.0% target made, trade closed
S. Amer. Silver SAC.to nov'10 C$1.38 24-oct-10 C$1.60 -15.9% loss on short, small fail
Ventana Gold VEN.to nov'10 C$7.92 27-jun-10 C$13.51 70.6% trade closed on buyout
Lumina Copper LCC.v nov'10 C$1.42 11-aug-10 C$3.65 157.0% trade closed
Antares Minerals ANM.v dec'10 C$1.42 06-dec-09 C$8.40 491.5% trade closed
Rio Alto Mining RIO.v dec'10 C$0.69 23-mar-10 C$2.16 213.0% trade closed
Coro Mining COP.to dec'10 C$0.585 03-oct-10 C$1.24 112.0% target made, trade closed
Stocks To Follow Closed Positions, 2009
Closed positions closed closing PPS
Cardero Res CDY/CDU.to May'09 U$1.20 03-May-09 U$0.87 -27.5% sold on negative news
Eastmain Res. ER.to May'09 C$1.04 06-May-09 C$1.315 26.4% trade closed
Radius Gold RDU.v May'09 C$0.165 03-May-09 C$0.235 42.4% trade closed
Latin Amer Min. LAT.v May'09 C$0.12 03-May-09 C$0.158 29.2% trade closed
Aquiline Res. AQI.to July'09 C$2.03 16-Jun-09 C$1.68 -17.2% took loss, bad timing
Chariot Resources CHD.to Aug'09 C$0.20 12-Jul-09 C$0.415 107.5% trade closed
Castle Gold CSG.v Sep'09 C$0.64 02-Aug-09 C$0.60 -6.3% ST trade didn't work out
Guyana Goldfields GUY.to Sep'09 C$2.30 12-May-09 C$4.50 95.7% profit taken
Los Andes Copper LA.v Sep'09 C$0.09 21-Jun-09 C$0.09 0% trade closed
Pediment Gold PEZ.to Oct'09 C$0.80 09-Aug-09 C$1.00 25.0% trade closed
Minera Andes MAI.to Oct'09 C$0.68 03-May-09 C$0.71 4.4% too much bad news
Dynasty Metals DMM.to Nov'09 C$4.18 03-May-09 C$6.01 43.8% half sold
Rusoro Mining RML.v Nov'09 C$0.55 03-May-09 C$0.57 3.6% underperformed
Important Disclosure
The information and opinions contained within this report reflect the personal views of the author and therefore all
material within should not be construed as accurate or reliable or be utilized as advice for investment or business
purposes. Independent due diligence and discussions with ones own investment and business advisor is strongly
recommended. Accordingly, nothing in this report should be construed as offering a guarantee of the accuracy or
completeness of the information contained herein, as an offer or solicitation with respect to the purchase or sale of any
security or as an endorsement of any product or service. All opinions and estimates included in this report are subject to
change without notice. It is prohibited to copy or redistribute this report to any type of third party without the express
permission of the author.
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