The IKN Weekly, issue 317 — Jun 07, 2015
The IKN Weekly
Week 317, June 7th 2015
Contents
This Week: Those annoying types, The other side of obvious, It's not just Canada, And more
Australia.
Fundamental Analysis: Next week.
Stocks to Follow: Overview, B2Gold (BTG) (BTO.to), Minera IRL (IRL.to) (MIRL.L), Lake
Shore Gold (LSG.to), Atacama Pacific (ATM.v), Timmins Gold (TMM.to) (TGD), Dalradian
Resources (DNA.to), First Majestic (FR.to) (AG), Phoscan Chem (FOS.to), Regulus Resources
(REG.v), Lara Exploration (LRA.v), Starcore Intl (SAM.to), Focus Ventures (FCV.v), McEwen
Mining (MUX) (MUX.to).
Copper Basket: Overview, Metminco (MNC.ax).
Low Cost Producer Basket: Overview.
Regional Politics: Argentina: Silly foreign press coverage, Peru moves to facilitate permitting
laws for mining, Burkina Faso: True Gold (TGM.v) makes the front pages, Guatemala:
Somewhat calmer.
Market Watching: On insider sales B2Gold (BTO.to) (BTG) the blog the Weekly and my
limited trust of mining companies in general, Santacruz Silver (SCZ.v): Small inside purchases
may be significant, Molybdenum comment, Your speculative trade idea of the week: INV Metals
(INV.to).
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
Those annoying types. I mean typos.
I know how often typos slip through the net and get sent to you out there as part of The IKN
Weekly and they all annoy me (believe it or not...probably not). I tend to notice if/when I take
to any given edition at a later date with fresher eyes, but some are worse than others and need
correction as soon as possible.
The current house target on B2Gold (BTO.to) is CAD$2.70, not $1.70. Almost as bad is the typo
that gets the name of something or someone you greatly admire wrong. The name of the book
is of course Slaughterhouse-Five. Both from IKN316 last week. Apologies.
The other side of obvious
In last week's intro 'Repeating the obvious' I mentioned that "...if gold goes up, they all go up
and we suddenly look like the geniuses that we are not." And that's correct. What I forgot to
mention is that if gold goes down they all go down and it doesn't matter if you're the best
stockpicker in the world, you can stencil STUPID on your forehead and be done.
Here's your five day price chart of GLD, GDX and GDXJ: Gold, the miners, the juniors:
1
Which raises the question of what to do about focussing on a sector closely tied to the upward
or downward movement of gold. Here are three ideas by way of a modest suggestion:
Predict gold price movements accurately. Easy, huh? All that time and you only needed The IKN
Weekly to say five magic words and unlock the key to riches; the only thing you need to do is
get good at predicting gold price movements and you become a successful mining sector
investor. For what it's worth I made a point of straying into the world of gold market
commentary last week and read various opinions on the metal's future from those who would
want to be your guru. I can report that mainstream economics-influenced commentators think
gold's going down, while the goldbug commentary sector soothsayers think that gold's going
up. Another shock revelation, exclusively for IKN Weekly readers. So flippancy now set aside
the quantity of gold commentary on both sides of the argument far outweighs the quality and
I'm not going to bore you stupid with my takeaways from the exercise, but will say that the
main lesson learned is that it's a near-total waste of time reading these people. They're all
guessing, some with more education than others but ultimately they're guessers, not analysts.
The proverbial monkey with the dartboard is just as useful.
During my immersion last week I was still writing on the blog (of course) and the exercise of
reading the gold soothsayers started showing up in a few posts, subliminal or otherwise. For
example this one (1) with the line, "Which begs the question of who's right about gold, China or
USA?" and looking back this Sunday morning as I write up this intro, that's about the only
snippet of worth I got from the whole reading exercise. In the red corner (geddit?) we have the
challenger China, buying up the bullion and storing away value. In the blue corner the
champion, Capt America, laughing at the idea of not putting capital to work, seeking return and
alpha from every dollar at his manly and musclebound disposal. In the USA saving for a rainy
day has always been a tough sell, at times of GDP expansion it's that much tougher. But as for
an answer to the main China/USA question, sadly I don't have one. The frame is clear enough
and to this point 2015 has seen the price balance held between those two positions on gold.
Therefore the classically trained business world of Wall St can't understand why gold hasn't
dropped under $1k/oz. Therefore the bullion-watchers shake their heads in disbelief that the
voracious appetite for gold in China isn't showing up in its dollar demoninated price.
Who will win and will it even be something that can be counted as a victory? No idea, but for
the moment the wisest course for me, the junior mining fundamental analyst, is to consider
gold's at-or-around U$1,200/oz as a reasonable benchmark from which to base financial models
for sector companies.
Ignore the mining sector entirely. This really is not a bad idea and from what I see it's definitely
one that's growing in popularity. There's a strong case to be made for walking away and
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putting your money to work in other places. Choose real estate, biotechs, Silicon Valley
startups, retail sector, airlines, bonds or any number of other areas. seriously, do you need to
read me and my unedning guff about juniors every
weekend...and pay for the privilege?
Diversify. Frankly I'd expect most of you IKN Weekly to
be correctly (or at least reasonably) diversified already,
as over the years I've tried hard to discourage the get-
rich-quick attitude towards mining and shoo away those
who only want a to read a pumpo tip sheet on juniors.
From all evidence gathered, The IKN Weekly core
readership is one that knows its way around the
financial scene and therefore will not depend on junior
mining companies to generate the cash needed for next
month's mortgage payment or grocery bill.
I digress. You'd have to be somewhat insane to have
even bigcap mining as the major part of your overall
net wealth, let alone junior mining. It's a little difficult
personally to keep the correct perspective, what with
writing a weekly newsletter for over five years that
concentrates its efforts almost exclusively on junior mining, but the bottom line for coping
through today's junior world is to keep juniors as a minor part of your investment life while the
fallow period continues. At least some sanity can then prevail.
It's not just Canada
Reports received by this desk of the miserable attendance numbers and general atmosphere at
the Cambridge House Canvest 2015 conference in Vancouver last week made it to a snarky post
on the blog that included both spoof and real photo evidence (2) of the poor turnout. But it's
not just Canada. This report (3) sent over by A. Reader highlights the dearth of exploration
activity in Australia via an interview with Mark Creasy, one of the most successful mine
explorationists in the country. Here are a couple of excerpts from the note:
"This is the sixth collapse I have been in, in terms of when the market literally just goes
to water," Creasy says.
"I started prospecting in 1968. At that stage we had the post-war mining boom that
then proceeded to collapse totally in the 1970s. Then we had the gold boom that then
collapsed in 1981, then we had the 1987 boom ... "
The list goes on but for the opportunistic Creasy, every bust is the same. It is time to
get to work.
"It is always the time to do business. It is always the time to get moving. It is always the
time to go and get a driller to drill for you because he is going to be on his knees
begging for work."
And...
Australian Drilling Industry Association chief executive Nigel Carpenter says he
has spoken to experienced heads of drilling companies who labelled the current
downturn as the toughest they have ever endured. The sector is suffering more than
any other within the resources industry, he says.
"Some businesses will not make it through because they are agreeing to substantial
price reductions to generate cash flow," Carpenter says. "While we may be at the
bottom of exploration activity, I don't think the bottom is there yet in terms of the
number of businesses in the industry. There are some that will find their business
model can't sustain this."
Sound familiar? Thought so.
And more Australia
Maybe it's just the cyberplaces where I tend to hang out, or maybe I wasn't paying quite as
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much attention to the day-to-day market as I should have been doing last week*, but I didn't
see much in the way of reference in the press to what was the single most important
presentation in the mining world last week, that of BHP Billiton CEO Andrew Mackenzie's
address to the Minerals Council of Australia on Wednesday. You can read the transcript of the
whole speech here (4) and though it got reported upon in the normal trade places on the day,
it was quickly swept away by our modern world's passage of newsflow. It shouldn't have been.
"As China works to rebalance its economy from investment toward consumption,
growth and demand for commodities have slowed to more normal levels. In many
markets, recently installed low cost supply can now be stretched to meet growing
demand. So incremental supply, induced during periods of higher prices, will take
longer to absorb and this means over-supply may persist for some time."
That was the head of the world's biggest mining company telling you that 1) the market for
metals is changing in China and 2) we're going to have oversupply in all the major industrial
metals. That's not a small matter.
*Though I was all over it Friday and actually doing some real buying for a change
Fundamental Analysis of Mining Stocks
Next week
There's going to be lots in this section in the weeks to come, but nothing this week. To make
up for this obvious laziness, I've tried to add a comment on just about every company stock
currently covered in 'Stocks to Follow' this week
Stocks to Follow
The straight count isn't too pleasant, but for me last week wasn't as bad as all that and I was
happy to see the buying opportunity come on Friday. Of our current 16 just three put in a gain
on the week (TGD, FOS.to, IRL.to), with one other remaining unchanged (LGN.v). That means
a full 12 had a losing week with the worst percentage drops registered in Dalradian (DNA.to
down 18.2%), Starcore (SAM.to down 14.8%) and NovaCopper (NCQ.to down 12.5%). Best of
the uppers was Timmins Gold with its late Friday surge (TGD up 12.7%).
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.
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company Ticker this week Avg Price Reco date Current PPS Gain/Loss% Notes
TOP PICK
B2Gold BTO.to STR BUY C$2.17 12-sep-14 C$2.04 -6.0% Top Pick, 1st tgt $1.70
Metals Producers (in current order of preference)
Lake Shore Gold LSG.to buy C$1.04 07-apr-15 C$1.16 11.5% FCF+ prod. M&A tgt. Adding
Teranga Gold TGZ.to hold C$0.55 15-feb-15 C$0.70 27.3% Good prod. 83c tgt
McEwen Mining MUX str buy U$1.09 25-jan-15 U$0.974 -10.6% Leverage value, cheap now
Timmins Gold TGD hold U$0.60 19-apr-15 U$0.681 13.5% near-term, will sell June
Starcore Intl SAM.to spec buy C$0.12 10-jan-15 C$0.115 -4.2% Also "land grab", tgt 19c
First Majestic AG hold/sell U$10.51 10-aug-14 U$4.82 54.1% Thinking about selling
Land Grab Stocks (in current order of preference)
Phoscan Chem FOS.to hold C$0.28 29-mar-15 C$0.295 5.4% 36c/share of cash
Atacama Pacific ATM.v spec buy C$0.19 26-apr-15 C$0.175 -7.9% 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$0.70 -33.3% small Cu play low vols, hold
Lara Expl. LRA.v spec buy C$1.15 08-apr-12 C$0.285 -75.2% solid biz model, LT hold
Other Recommended Stocks (in current order of preference)
Dalradian Res DNA.to buy C$0.64 27-oct-13 C$0.90 40.6% Nov'14 tgt $1.25, top Au expl
Regulus Res REG.v spec buy C$0.30 06-apr-15 C$0.33 10.0% Bet on 2016 drill prog.
Focus Ventures FCV.v spec buy C$0.23 01-jul-12 C$0.22 -4.3% tgt 50c, 3q15 PEA
Minera IRL IRL.to spec buy C$0.27 22-jul-12 C$0.11 -57.4% 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): Added. As per the Flash update on Friday morning (see Appendix
1) I got all the CAD$2.03 I wanted in BTO, which wasn't a knockdown bargain price but was
okay. If some really cheap shares come up I could possibly add a few more, but overall and
taking the sensible stance I think my position is now filled to satisfaction. So, I now give BTO
permission to rally hard :-). The cost average has come down a couple of notches and at $2.17,
won't go much lower.
I'm not expecting any news from BTO until July and its 2q15 production announcement. This
trade is set on a 12 month target, but I'm really eyeing the end of this year as the place at
which it should show better prices, that's when I'd like to see the current $2.70 number become
reality. Please also see the extra piece on B2Gold in 'Market Watching' below.
Minera IRL (IRL.to) (MIRL.L): I didn't get any on Friday as per the Flash update (see
appendix 1) because there were no sellers at 10c and I wasn't not paying up. Somebody paid
12c for some shares so good for them.
I've been asked for a fundies update report by a couple of you and that's a good call, it's been
a long time since we took a careful look at this one's numbers. The model needs a good re-
vamp and will depend largely on the terms of any eventual deal to fund Ollachea, so as soon as
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we get news on that it will be time for a proper look at IRL again.
It may be a report I get to write very soon. As explained last week I'm loathe to be the boy
who cried wolf on this stock again, there have been too many times when what's been on the
jungledrums hasn't turned into solid news, it's too painful to be burned over and over. But I
have to say this weekend that there have been some very strong rumours coming from a
couple of corners of the legal world in Lima that say a deal has been done by IRL and financing
has been secured by the company. This alone would explain why there are no sellers of note,
but this one along with Timmins (see below) will get me watching the the news releases early
morning tomorrow. That and having to get up at 6am to get the kids to school, of course.
Lake Shore Gold (LSG.to): Still looking to add. I also mentioned this one as a possible
addition in the Flash update Friday morning but didn't get any in the end. The final tick price of
$1.16 would have an okay entry but I wasn't paying attention to the close and didn't have any
bids in. However, last Friday's Flash update didn't just stand for a single day's action and if
cheap prices are available in the days to come I'm still looking to add and average up.
Atacama Pacific (ATM.v): Still looking to add. It's one thing to want to add at a sub-19c
price, another to do so even when the trades go under that price. The action is this stock is so
thin at the moment, any bid of even modest size gets immediately headfaked by the quasi-
market makers. I'd still like to add some at these levels but it's going to be small stuff and I'm
patient. LSG.to has much more of my attention.
Timmins Gold (TGD) (TMM.to): Last week the call was to hold this near-term position a
while longer (I'm giving myself June max)
because for one reason, it looked like it was
trading falsely and for another the 60c US looks
like a pretty solid floor to the price. Nothing
happened in the stock all week, with dribs and
drabs volumes, right up to the last few minutes
of Friday afternoon when it blew through a
reasonably low-level roof. Morgan Stanley
(house 53) decided that it wanted to own a lot
of it in a hurry, which is fair enough but the
reasons are a mystery at this point. Let's see
how tomorrow Monday pans out, but even if
there's no news of worth and it continues to
pop I'm not against taking a quick profit. On
the other hand, some solid fundy news event would be most interesting.
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Dalradian (DNA.to): An unsurprising retrace. This time last weekend we mulled a little on the
previous Friday's pop in DNA.to and called it a
near-certain fat finger. The way in which it
traded last week confirmed that to anyone's
satisfaction. And so here we are back at 90c. I
noticed on my reading travels that the Sprott
fund people gave this (and LSG) a soft pump
over at a Q&A in The Gold Report on Thursday,
but it didn't do much good to the share price.
Here's what Maria Smirnova of Sprott (I don't
know her or have had any contact but I've heard
good things, for what that's worth) had to say
about the stock in the piece (5):
Dalradian has been advancing its project quite
nicely. We're expecting prefeasibility by the end of 2015, but before that, we're expecting an
update in its resource estimate in Q3/15. We are looking for conversion of Inferred resources to
Measured and Indicated resources. The company is doing an infill program, so we are looking for
a demonstration of continuity and a demonstration of thickness and grades of the veins that it is
exploring. Then in the prefeasibility study, we're looking for any changes in capital, operating
expenses and recoveries based on metallurgical testing. The company is considering changing
the processing method so that instead of shipping concentrate overseas, it will actually produce
doré on site. That would be quite interesting.
Nothing wildly new there, but a reflection of the type of "boring stuff" that a real live project
goes through at this stage in its development. There's plenty of work going on at DNA, but the
only thing that might grab the imagination as new and market moving is results from the out-
stepping drills expected later this year. The matters listed by Ms Smirnova above, they're the
ones that cost money and don't move stock prices.
In other news Reader AB sent this after that short and flossy "less is more" post about GLD on
the blog last week:
This stays on topic regarding your post on "less is more" in the gold sector, but looks at things
from a totally different angle. I read your headline and figured you were referring to the article
below.
http://finance.yahoo.com/news/risk-wary-gold-miners-small-050000794.html
One of those articles that gives insight into how the top tier gold producers are going to turn
themselves back into the heavyweights they once were. Now the tough part is to find the small
cap companies that fit this new model before everyone else does.
That's precisely why I'm long DNA.to.
First Majestic Silver (FR.to) (AG): This is still the one position that brings me down just by
thinking about it and more than ever, I find myself wondering just why I own it. The only
reason that I haven't dumped it already is that I don't need the cash in the port (thank you rio
alto), but the more I think about FR the more it occurs that even inside its sub-subsector there
are better places for silver exposure than FR.
And then there was all that For-Retail-Special-Event-Drama last week with CEO Neumeyer
sending an open letter to the CTFC about its custody of the silver market (5a) and the way it's
leaving things open for (gasp horror) market manipulation. Zerohedge readers, queue here. For
one thing, doesn't a CEO have anything better to do with his time? For another, if that isn't Ted
Butler in the shadows I'm a Dutchman. Near the top of the list of things I don't want from a
mining CEO is support for conspiracy theorists about metals markets, these people should be
far more focussed on production and costs at the place that pays their salaries. In fact it comes
just under the one about not wanting CEOs who rah-rah about $100/oz silver in the future.
Neumeyer fails on both counts, which brings into question his general level of intelligence about
issues other than mining.
7
Phoscan Chemical Corp (FOS.to): A decent week with a deserved price pop and good
volume and all due to the NR released by the company on Wednesday morning (6). In it, the
company announced the start of a strategic review in which it says it will consider several
potential avenues to add value to the company. La dee dah. OK, let's cut the crap and fill in a
bit on the investment theory in this one. The purchase of FOS was and is all about two things:
1) Its 36c of net cash compared to 28c of stock price (which could be 35c by now, but the point
remains).
2) That it's finally going to get around to doing something.
I've had several conversations about my position in FOS over the last few weeks, with a couple
of extra added to the pile last week. The general view (and some people have offered up some
pretty specific examples, thank you you know who you are) is that company President and CEO
Stephen Case hasn't been in a hurry to get active on projects in the last couple of years and
has been fairly content to let the fallow period for the company go on indefinitely, pick up easy
salary cheques and rest on the FOS laurels. That's me being diplomatic, Mr. Case. I know it's
been pretty frustrating for longer-term investors in the company to see its apparent value
ignored by the market and the slow attrition take place, but the lack of will to get active and
"Do Something" is exactly why I didn't take a position in the stock until recently (just over two
months ago, to be more precise). That changed when activist noises started chiming around
FOS.to that are being led by the people at Sprott. From what I gathered, the time of fallow was
drawing to a close and FOS would either voluntarily get more involved in the junior scene or it
would be forced to do so, proxy slates and all that. What we saw last week in the Strategic
Review NR is a first clear step, but I also think it likely to be a piece of Kabuki Theatre and that
a decision on what and how FOS is going to
start deploying its treasury has already been
made. It's also why I'm long.
The way I see FOS today, now that the new
strategy has started to unfold my 28c buy
price represents as close to a no-lose as they
come. If FOS doesn't come up with a project
or plan of great interest the price isn't going
to fall much lower than that and I can
eventually give up and step aside without
any personal asset damage done. But if we
assume there's maybe one more month (one
more round of FOS paycheques) before an
active plan starts to unfold, the general idea
of applying FOS and its treasury to a junior exploreco with great little project but no cash can
produce a sum greater than its parts and see the current FOS price move higher. At 29.5c this
weekend (in fact I'd draw my line at "30c or less") FOS is showing a good entry price for
anyone wishing to join in the fun or add some more.
Regulus Resources (REG.v): I've shifted REG back up to 'spec buy' on the table above as a
straight function of its share price; we're now at 33c and back at or around a reasonable price
for more shares in 2015. As I'm in at 30c (a happy price) on a personal level I'd like to add
without averaging up but I'm also aware that's more vanity on my part, less about the real
world. Thirty-three cents is a decent number.
I caught up with REG.v head man John Black last week, managing to get an e-mail exchange in
as he moved through Iquique in Northern Chile on the way to check out REG.v's (inherited from
Southern Legacy) Puchuldiza project in the hinterland of that area (it's at 4,200m above sea
level, there's very little infrastructure up that way and we're now moving to winter, I hope he
took his thermal underwear). For the record and before moving to Antakori news, Puchuldiza is
an interesting, underexplored project that already has an in-house estimated 827k oz gold at
0.63 g/t at a 0.3 g cut-off (or those were the numbers bandied about by Southern Legacy in
8
2012 before gold fell off its cliff), it's a thermal springs area (also being explored for its
geotherm electricity generation potential) and there are plenty of other potential targets to
expand that resource on the concession, but it's not one we should actively consider as a price
driver for REG.v at the moment, definitely second-string stuff but it was good to hear that
REG.v cares enough to go have a better look at it.
So to Antakori and before the message, the good thing about conversing with John Black is that
you know there's no BS being added to the mix, he's one of those rare ones in mining who
gives it to you straight. Word is that REG.v is making progress on the key community permitting
and agreements issues, but progress has been slower than they'd have liked. And that means:
• There is progress being made.
• It's slower than they'd have liked.
And that's all. He reports that pre-election jockeying for position (and political funding) has
already begun in the area, even though we're still a year away from any big vote day. Sadly it's
not difficult to believe (it's happening right here in my own district) so REG is coping with the
cards dealt by assembling what CEO Black describes as a good communities team, staying on
topic on agenda, transparent and not getting
dragged into any political games. That's the right
way of doing things and it's what I'd expect of this
team (I wouldn't own a single share otherwise)
but it's still going to need patience to get a
community agreement. All this suggests my trip
up to meet the locals pencilled in for either this
month or next will have to wait a while longer.
That was about the sum total of the exchange
with CEO Black and frenkly, there's nothing there
that surprises. As stated all the way through, 2015
is going to be a fallow year for news from REG
with the only big objective being an agreement on
access and community support for Antakori that will allow the company to do what it wants to
do drillwise in 2016. It has this year (and the first part of 2016 before the rains subside in
March) to get that agreement settled without disrupting its main plans and timeline so if it takes
longer than they'd like for a community agreement, so be it. It's also why we on the outside
should not (and have not) chased this stock price. It's now back at a decent entry point and
that's why "spec buy" is back next to its name, so while the company exercises patience and
discipline in its community efforts, those of you as interested as me in owning this speculative
play will find discipline in waiting for the right price just as beneficial. And all that was a big
mouthful to say "don't pay up for REG.v shares in 2015, but it's still a fair spec buy". End.
Lara Exploration (LRA.v): On Monday LRA came out with news (7) from one of its JV
partners in Brazil and the headline was this:
Lara Exploration Ltd.: Drilling Intersects 56 Metres
at 16.51% Copper at Curionopolis in Brazil
It doesn't matter if you were born and bred in Fungurume DRC, a 56m hit of 16% copper is
going to catrch your eye. However, that's a project which has shown that type of very high
percentage intersects previously and however good the number, there was no real new news
there. The stock didn't move much as a result, either (in a bull market that'd be guaranteed to
move the dial, this is not a bull market though...you may have noticed). Then Tuesday another
NR from LRA (8) announced the failure to reach an agreement between the company and
prospective JV company Goldplata. With the market the way it is, there wasn't much surprise
there.
9
As far as Mr. Market is converned LRA remains in the "ignored" column and as such, the type of
company tailor-made for the Land Grab concept. Sadly it's the one I own at much higher prices.
Starcore Intl (SAM.to): Still no production NR
from Starcore, which was a little disconcerting as
it's now officially later than normal. I tend not to
like late news from juniors. It could come at any
time of course (or maybe they're not going to
announce production at all, which wouldn't be
good) so eyes to wire. In trading news the stock
did okay on light volume up to Friday, when the
price dumped to the closing 11.5c on what looks
like a single seller. That puts my personal position
slightly into the red this weekend but that's not
going to lose me any sleep. This company will
show its worth sooner or later. Expect a pop this
week, with or without the production news.
Focus Ventures (FCV.v): A couple of items from FCV. First up the company announced on
Thursday (9) the successful closure of its $4m private placement, which was expected but is
positive all the same. FCV plans to pay back $1.5m of the Sprott loan with part of the proceeds
and the rest is working cap for Bayovar12, all that also as expected. For the record, the
updated share count at FCV is now:
• Shares outstanding: 97,888,554
• Warrants: 22,737,500 (all at 26.5c)
• Options: 5,280,000 (between 19c and 30c, most at 21c and 22c)
• Fully diluted: 125,906,054
That puts market cap this weekend at CAD$21.54m. It's still cheap compared to the potential
prize at the end of the Bayovar line and with cash to deploy there newsflow shold be solid for
the next year. The next big potential stumbling block is now September 2016 at which point the
Sprott loan must be fully paid off, but I'd expect Radius (now an investment company, not a
junior) and its sizeable asset of BTO shares can now be provider if all else fails.
Second up, on Friday evening FCV published the latest edition of its quarterly newsletter, which
is both and informative and fun read (if 'fun' is possible in the junior world). Anyone long this
stock will be interested in its contents, anyone thinking about going long too. Find the link to it
at number (10) down in the footnotes today.
McEwen Mining (MUX) (MUX.to): Reports from Argentina are negative about the current
situation at the San José (aka Minera Santa Cruz or MSC) mine, 49% owned by MUX and
operated by 51% owner Hochschild (HOC.L). This report dated Friday (11) tells of 20 workers
just fired and another 20 about to be given their pink slips due to "economic insufficiency" at
the mine, i.e. they're not making any money there. Also, a protracted pay negotiation between
management and workers has found no agreement, with workers' union AOMA demanding a
35% pay rise (in Pesos) while management refuse to go higher than 28%. To this point there's
been no strike action because apparently, only one of the 20 people fired is from the local
Santa Cruz region and that helps politically. But HOC has never been the most adept operator
of mines (that's putting it nicely) and things may deteriorate, if so they're out of the hands of its
minor partner there but MUX will still suffer. Overall, the news from San José confirms our
position of "breakeven at best" at current prices for silver and gold. Any MUX upside will have
to come from its own El Gallo operations. Plus the rumbling threat of more serious industrial
action at MSC is not good.
The other news from MUX last week was its filing (12) of a short-form prospectus to raise up to
U$200m via a variety of potential ways, including debt financing, equity sales etc. To this point
10
it's a paperwork thing only, the filing of such a prospectus is about making things quicker and
easier come the day the company decides to go about raising cash. It also means up to $200m,
and not $200m, so any eventual raising may be less than that headline number. But with all
that said, MUX has made its intention to finance expansion fairly clear with this policy move.
The Copper Basket
After twenty-three weeks of 2015 The Copper Basket is showing a 9.44% loss to level stakes.
company ticker price 1/1/15 Shares out Market Cap current pps gain/loss%
1 Capstone Min. CS.to 2.03 381.95 469.80 1.23 -39.4%
2 Reservoir Min. RMC.v 3.96 47.55 204.47 4.30 8.6%
3 NGEx Resources NGQ.to 1.17 187.71 178.32 0.95 -18.8%
4 Nevada Copper NCU.to 1.65 80.5 140.88 1.75 6.1%
5 Amerigo Res ARG.to 0.27 173.65 76.41 0.44 63.0%
6 Copper Fox CUU.v 0.135 402.96 62.46 0.155 14.8%
7 Western Copper WRN.to 0.68 93.68 52.46 0.56 -17.6%
8 NovaCopper NCQ.to 0.58 60.15 42.11 0.70 20.7%
9 Hot Chili Ltd HCH.ax 0.16 333.11 36.64 0.11 -31.3%
10 Panoro Minerals PML.v 0.295 220.64 33.10 0.15 -49.2%
11 Regulus Res REG.v 0.35 56.39 18.61 0.33 -5.7%
12 Metminco MNC.ax 0.008 2410.5 14.46 0.006 -25.0%
13 AQM Copper AQM.v 0.06 141 8.46 0.06 0.0%
14 Catalyst Copper CCY.v 0.305 31.41 6.28 0.20 -34.4%
15 Coro Mining COP.to 0.045 159.37 4.78 0.03 -33.3%
NB: HCH.ax & MNC.ax priced in AUD$, rest CAD$ Portfolio avg -9.44%
The overall basket average dropped by 2.4% and at a 9.44% overall deficit, it's the lowest of
the year to date. We managed to get four winners on the week despite that (CS.to, NGQ.to,
ARG.to, MNC.ax) along with four UNCHes (WRN.to, CUU.v, AQM.v, COP.to). But the other
seven fell, including large percentage losses
in Hot Chili (HCH.ax down 15.4%), 4% The Copper Basket 2015, weekly evolution
2%
NovaCopper (NCQ.to down 12.5%) and
0%
Reservoir Minerals (RMC.v down 10.0%).
-2%
The load was leavened a little by the
-4%
surprise springer, Metminco (MNC.ax up
-6%
33.3%).
-8%
-10%
As for copper prices, the bearish
-12%
atmosphere continued last week with our
futures contract closing at under $2.70/lb,
even after a modest relief rally Friday on
the back of that Goldilocks US jobs report.
Suddenly the USA will want all those Chinese knick-knacks again which means China needs to
build more factories which means copper will be in demand for wiring and pipes...or something
like that. That's what they told me on CNBC, anyway.
11
ht4naj ht11 ht81 ht52 ts1bef ht8 ht51 dn22 ts1ram ht8 ht51 dr32 ht92 ht5rpa ht21 ht91 ht62 r3yam ht01 ht71 ht42 ts13 ht7nuj
source: IKN calcs
Now for weekly inventory moves, here come the bullet points as usual:
• Overall world copper stocks dropped by 17,655 metric tonnes (mt) (-3.5%) to continue
trhe clear trend of 2q15. The world total now stands at 480,936mt.
• Shanghai Futures Exchange stocks took another leg down, dropping by 10,670mt (-
6.8%) to finish Friday at 156,053mt. Notable that copper metal prices aren't getting
any support from this continued warehouse drawndown.
• LME warehouses stocks dropped by 7,025mt (-2.2%) to finish at 322,150mt, whihc
confirmed the moderate reductions of the previous two weeks.
• Comex warehouse stocks went up by a small 40mt (+0.2%) to finish at 20,428mt. A
footnote.
Here's the Shanghai-only weekly tracker chart, with the de-stocking continuing and as
ostensible bullish as you'd want to see. One wonders how bad the copper price drop would
have been without this demand signal. According to the stuffed-suit experts (13) we can expect
the trend to continue through July, at which point we'll get to find out whether there's true end-
user demand to balance out the supply uptick expected in the second half of the year.
Shanghai Futures Exchange Warehouse Stocks, 2014/2015
260000
240000
220000
200000
180000
160000
140000
120000
100000
80000
60000
12
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
Mt Cu
source: Cochilco
Metminco (MNC.ax): A pulse. After a rights issue in April that was 60% taken and then it
saw 40m estra shares sold as announced last week at 0.5c each (14), Metminco now has
2.41Bn shares outstanding, a veritable Great Barrier Reef. However, it also means MNC has
managed to raise nearly A$1.5m in this rights issue and that's manna from heaven type cash
that will keep it afloat during 2015. It was also the object of some speculation last week as this
charts shows, with at one point the stock touching the magnificent number of 1c before falling
back to the 0.6c of Friday. MNC also had to issue one of those "we don't know why the stock's
being bought" NRs on Wednesday in order to satisfy the regulators.
This is the stock I included in this year's basket as 1) an extra Aussie representative as well as
2) an example of those highly diluted vehicles, in order to gauge whether there's any chance of
speculation on such a diluted equity. Last week shows that the stock at least offers a pulse and
according to websites that cover the UK tinycap scene more closely than I (15), there was no
shortage of speculation as to why the spike happened, from stock promo pumping to a deal on
its main Los Calatos property in southern Peru to a deal on its satellite project Mollacas in Chile.
Personally, it all smacks of speculative BS to me. Not that spec BS is a bad thing, of course...
At 1.42Bn tonnes of 0.47% copper and a 0.022% moly kicker the main Los Calatos project is at
the mediocre grade end of the spectrum, however part of that is 252m tonnes grading 0.78%
Cu that's rightly promoted as starter pit material, so there is at least something to legimitately
like about this project. The other aspect of Los Calatos is its location, way out in the desert
areas of South Peru which brings advantages (environmentally very few people to upset) and
disadvantages (let's start with water and power, then work from there). In a nutshell it's not a
bad project but it's not one that should be high on anyone's list either. There's going to be
nothing doing here until nearby-ish Quellaveco at least gets going, a bigger and better located
project that can't even get Anglo to greenlight it (or sell it to Southern Copper) yet.
If you like copper's future and want a way-out-there specualtion, MNC.ax could be one I
suppose. If copper pops to $3.50/lb it'd suddenly be economic and wanted and the current
A$14.5m market cap of the company on top would look small. However, I cna't help but
envisage this one as down the list of "mines to be built". For just one, the minority holding of
AQM Copper (AQM.v) in Zafranal looks more attractive at current prices. At last we know Teck
likes that one enough to get it to feasibility stage, more than we can say for most copper
projects today.
The Low Cost Producer Basket
After 23 weeks, the 2015 Low Cost Producer Basket is showing a 5.39% gain to level stakes.
13
company ticker price 1/1/15 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Goldcorp GG 18.52 830 14.31 17.24 -6.9%
2 Barrick ABX 10.75 1164.67 13.36 11.47 6.7%
3 Newmont NEM 18.90 499.08 12.93 25.91 37.1%
4 Franco Nevada FNV 49.19 156.5 7.82 49.97 1.6%
5 Silver Wheaton SLW 20.33 403.75 7.54 18.68 -8.1%
6 Agnico Eagle AEM 24.89 214.12 6.60 30.83 23.9%
7 Kinross KGC 2.82 1146.2 2.82 2.46 -12.8%
8 Buenaventura BVN 9.56 254.19 2.67 10.50 9.8%
9 B2Gold BTG 1.62 921.27 1.53 1.66 4.9%
10 Pan American PAAS 9.20 151.64 1.40 9.21 0.1%
all prices in U$, using NYSE ticker prices Portfolio avg 5.39%
The Producer basket dropped 3.15% and the selling continues, with just one of our ten names
returning a weekly profit (KGC, which rose 4.7% on a tough week which isn't bad at all). The
other nine dropped, with the biggest losses taken by Buenaventura (BVN down 6.3%),
Newmont (NEM down 4.9%) and Agnico Eagle (AEM down 4.2%).
Our basket is now nearly 3% ahead of the GDX benchmark. I'm not sure how.
The Low Cost Producer Basket: Weekly performance
and comparative to GDX control
25%
20%
15%
10%
5%
0%
-5%
14
ts13ceD ht4naj ht11 ht81 ht52 ts1bef ht8 ht51 dr42 ts1ram ht8 ht51 dr32 ht92 ht5rpa ht21 ht91 ht62 dr3yam ht01 ht71 ht42 ts13 ht7nuj
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 ht7nuj
|
source: ikn calcs, NYSE/Nasdaq data
Regional politics
Argentina: Silly foreign press coverage
Beware the foreign business press coverage of the Argentina presidential elections this year.
They've always been in the frame for telling you what suits their editorial line instead of what's
happening in Argentina, but the next few months promise to be exponentially worse.
To your example. On Tuesday June 2nd there was a ruling in The USA which will allow
Argentina to appeal the rulings made by Judge Griesa on the bonds holdout/vulture fund affair
(17). In essence, Argentina can now take one part of its case above Griesa and to the US Court
of Appeals, a decision that was viewed as a possible end to the impasse on the whole matter of
Argentina's default (or non-default, or technical default, I'm not going to drag the whole story
back from 2014 and do it again). Result: the Argentina stock market jumped sharply on the
news, as you'd expect for a piece of news that's positive for local country finances.
However, Camila Russo of Bloomberg News decided that the stock market had rallied for other
reasons. Here's a screenshot of the Bloomberg note from a terminal that afternoon.
She'd managed to find someone in the Buenos Aires square mile to opine that the market had
jumped because the two opposition candidates to the current government in the October
elections, Sergio Massa and Mauricio Macri, were going to join forces, with Massa presumably
stepping down and allowing Macri and free head-to-head fight against likely officialist candidate
Daniel Scioli. From there Bloomberg's Russo put together a "Opposition Stronger, Market Likes
News" type of message for foreign consumption. It's bullshit. For one thing because Macri has
said since then that he's not interested in a pact or deal with Sergio Massa, which may be
political rhetoric but has been repeated enough times by both him and his crew (e.g. just today
Sunday this one (18)) for it to be able to stand at face value. Macri seems to believe (and for
what it's worth I agree) that a deal with Massa would dilute his message, even if it brought in a
modest net positive on final votes. For another, because even though the realistic chances of
Macri and Massa pooling are still solid and may happen as early as this week, all polls point to
Scioli defeating Macri in a straight fight if Massa steps down from the race; in fact Scioli's set to
win in a first round if that's the October scenario.
The Western media have a vested interest in promoting the "government bad, opposition good"
message about Argentina this year. You may agree or disagree with that, but what you're not
going to get from them is unbiased straight news about this year's election. This example from
last week should be considered a mere hors d'oeuvre for the type of spin to come.
Peru moves to facilitate permitting laws for mining
Behind the scenes of the continuously rumbling Tia Maria a little-noticed development may
make Peru an easier place for mining permits and greenlights for companies, theoretically at
least. The executive last week sent a law petition to the country's Congress to ask for powers to
let the administration unliaterally modify the current mining law without the need for passage of
15
any modifications, in order to (translated) "...adjust (Peru) to the current reality and greenlight
mining projects" (16). Peru's mining minister Rosa María Ortiz said that there were two ideas
behind the petition to Congress (translated): "One, the granting of preference rights to areas
free to concessioning, and the other the modification of the General Mining Law". Regarding the
second part, she said that the idea was to be able to grant permits in a straightforward manner
and put an end to the protests against mining in all Peru. By way of example, projects such as
Tia Maria, Conga and Santa Ana could then be fast-tracked without need for any so-called
"social licence" awarded by locals.
To be clear, on a theoretical level this may sound fine from the outside, but if we see a
combination of 1) the amendments passing then 2) the Humala executive making changes that
by-pass the current laws and make permitting, particularly of the "social licence" type, easier
and then 3) this current government moves to impose these new laws quickly (i.e. before the
end of its mandate mid-next year) there will be big trouble brewing in Peru. That combination
would be the national equivalent of a government asking for a fightwith its own population and
a fight is exactly what they would get, blood deaths and all.
However, a better scenario for both Peru and its mining industry would be if the current
government Congress passes the laws and then Humala&Co sits back and does little or nothing
with them. The major social problem faced by this lame duck Humala presidency is its lack of
credibility on community matters in the provinces, as the people who were tempted to vote for
him on what was a left-wing agenda feel betrayed by his sharp move to the right. The classic
example is at Tia Maria, where while on campaign he told the population of the Tambo Valley
they would have the right to an up/down vote on the viability of the mining project, but he now
ignores their demands (for obvious reasons, you don't volunteer a vote you know you're going
to lose). But back to the point and with its lack of credibility and weak mandate, any attempt
made by Humala to force through an unpopular project (mining or otherwise) would be a red
rag to a bull. On the other hand, next year we have presidential elections in Peru and if the
eventual winner runs on a clear right/centre-right manifesto (whoever it may be, but bet on
either Alan García, Keiko Fujimori or Pedro Pablo Kuczynski) that makes it clear that it won't
stand for anti-mining meddling any longer, we'll be in a better place to move projects forward
and this current initiative would givce the new government a tool with which it could
legitimately promote faster development of potentially sensitive projects.
Burkina Faso: True Gold (TGM.v) makes the front pages
The disturbances we reported on the blog last week at True Gold's (TGM.v) Karma project
became Burkina Faso headline news on Friday after the government's mining ministry gave a
press conference in the country's capital to talk about the situation. According to the
government, the main thrust of the disturbances is from those opposed to the mine due to the
dangers it would pose to the nearby religious centre of Ramatoulaye and its important regional
mosque. And again, both government and True Gold went out of their way to tell people the
mine poses no threat to the mosque (a message that doesn't seem to be getting through so
far). To give an example of country coverage of the story, on Saturday... (19):
"...L’Observateur Paalga, the oldest of all the privately run national daily newspaper in Burkina
Faso, put on its front page the words of the Minister of Mining (at the press conference): "It's
Utopian to think that we can get rid of True Gold"."
Therefore the good news for TGM.v: The national government supports its presence. The
ministers present at the presser last week also made it clear they would not stand for any
further violence or illegal demonstrations at the site. They're also supportive of the apparent
dangers to that Mosque at Ramatoulaye and staying on-message.
But the bad news for TGM.v: The whole deal is being linked closely to the previous corrupted
Blaise Pascal government, the new interim government has to defend decisions made by that
old administration and the result looks bad for both. And although they stopped short of saying
so directly, the minsters blamed the local religious head of Ramatoulaye (the Chiek) for being
16
behind the new round of protests. Overall using the "no news is good news" yardstick last week
was obviously bad news for TGM.v (and project
backers FNV and SAND, we remind you). No
mining company wants to be a hot political topic
in an election year, even less if it's connected to
religious beliefs and preceived threats to sacred
sites. At this point, my guess is that TGM will have
to slow down its development schedule to let the
elections happen without them as a political
target.
This separate (20) report notes that although the
local head village chief in the area supports TGM
at Karma, the numerous villages around the
project that will be affected by it directly (sooner
or later) are strongly opposed and it only took the beginning of the reprise of work on the 28th
for them to congregate and hold an illegal demonstration that left 10 injured (only one detained
in hospital and reported serious however) and 15 arrested). There's another decent and sober
look at matters in this report (21). which included this line (translated), "It only took the
movement of a few Caterpillar machines on the site on May 28th 2015 to provoke again the
protest of local people who were witness to the return to work". Again, the area around Karma
has that tinderbox feel about it.
Bottom line: In IKN314 I talked about the heightened risk at TGM, in IKN315 I noted my
confusion as to how the stock could have rallied just on the word of the company and its NR
without taking (what seemed to me to be) the obvious risks into consideration. Here we are
today. I will continue to avoid this stock and all exposure to Burkina Faso while it goes through
its interim government and election process. I'll probably keep avoiding it after that as well, but
the current period is no time to own stock in a company with in-country levels of headline-
making political risk.
Guatemala: Somewhat calmer
There are absolutely no guarantees that President Otto Pérez Molina won't resign soon and by
the sounds of things at an official level, it would only take one more revelation from the CICIG
corruption investigation, the same one that's caused resignations all through the government,
for it to happen. However, we can report more happily that last week's demonstrations were
large but near all calm and non-violent, so at least there's a toning down of the atmosphere on
the streets. The President is taking the non-visual way out of things at the moment, trying hard
to lay as low as possible and limp his government through to September and the national
elections.
Meanwhile in our specific sector, there are now growing calls (22) for all government contracts
with mining companies to be revised. Newly appointed Minister in charge of mining José Miguel
De la Vega (sworn in Tuesday June 2nd, he won't be there long though) is likely to drag heels
as hard as possible on that, though. On the other hand, this short but sweet editorial (23) from
a news site that covers Central America made a more positive but altogether fair point.
"Some analysts are worried about the effects of the corruption charges being
brought at present in Guatemala, saying that they will raise the levels of
mistrust and instability in economic activity, something that could negatively
affect other countries in Central America due to the relatively large weight of
the Guatemala economy in the region.
We believe that on the contrary, this is now an opportunity for honest
businesspeople to take the bull by the horns and do profitable business in
Guatemala, as it's difficult to be the target of bribery from government officials,
as they will feel as though all focus of attention and scrutiny is now upon them
from a population fed up with their corruption.
17
To go and go honest business in Guatemala today is a way of supporting the
fight against corruption."
Bottom line: Today in Guatemala can be summed up as 'tense but calm'.
Market Watching
On insider sales, B2Gold (BTO.to) (BTG), the blog, the Weekly, and my limited trust
of mining companies in general
After noting on the blog (24) last week that there had been a whole bunch of insider share
sales by directors and officers of Tahoe Resources (TAHO) (THO.to), I received a mail from
reader and Weekly subscriber AH who asked why I was keen to point out the sales in a
company I didn't own, but apparently ignored the heavy insider selling seen recently in B2Gold
(BTO.to) (BTG), the current Top Pick here at The IKN Weekly. It's very fair criticism. When I
wrote back to AH I said as much, but also mentioned that the blog and the Weekly are, to my
mind at least, separate vehicles and what I do "over there" isn't the same thing as I do when
sitting down to write the Weekly every weekend.
I then moved on to the subject of BTO and its recent insider sales, so for our purposes and to
get context, here's a list of the selling we've seen from BTO insiders since in May and June
(mostly May):
B2Gold (BTO.to) (BTG): Insider Share Sales, May and June 2015
Name of Insider N° Shares Sold Avg Price (CAD$) Gross Proceeds (CAD$)
Clive Johnson 200,000 2.09 418,000
Mark Connelly 510,000 2.15 1,096,500
William Lytle 30,642 2.05 6,2816.10
John Rajala 5,137 2.05 10,530.85
Roger Richer 150,576 2.09 314,703.84
Dennis Stansbury 54,644 2.05 112,020.20
Dale Craig 121,235 2.13 258,230.55
Ian Maclean 24,198 2.05 49,605.90
Robert Cross 53,778 2.05 110,244.90
Thomas Garagan 140000 2.06 288,400
Eduard Bartz 26,,455 2.05 54,232.75
Michael Cinnamond 14,198 2.05 29,105.90
Huch Mackinnon 43,378 2.14 92,828.92
Brian Scott 25,000 2.13 53,250
Total Sales 1,399,241 $2,950,469.91
source: company filings, SEDI
Let's note that there are mitigating circumstances with many of the sales registered by those
people (not all of them, just some of them), such as the way some exercised larger quantities
of restricted shares or options and then sold but a portion of the newly minted fully paid-up
shares. This means they might not have benefitted in a direct cash-money way, but do get
"free shares" by covering the cost of exercising with a partial sale, for example. But whichever
way you cut it, that's a big list of sales in a short period of time from insider officers/directors
that are getting their bonuses from the company (and would much prefer that publications such
as this drew no light on the matter). Let's add that the above list only contains those sales to
date (i.e. this Sunday June 7th) and there may be more to come.
Also, as regular watchers of BTO know this is hardly the first time we've seen large scale insider
selling from those high up at the company. They seem to consider these sales, which come
typically in Q2 just before the next blocks of incentive options are awarded, as their right.
Which brings the main question: Why am I not that worried about BTO insider sales?
18
Fact is, I am slightly bothered by the sales that Clive & Co file, it's not my idea of perfect by any
means, but I'm not overly worried and I'm certainly not concerned about it enough to bring the
stock down from its recommendation level here at The IKN Weekly. Reasons:
1) It's normal M.O. at BTO. Having watched the stock and the way it goes about
business for years, it came as no surprise to see this swathe of sales come during Q2
because they always come.
2) They've exercised and sold stock at all sorts of price levels over the years, there
doesn't seem to be any special micro-timing that goes on.
3) Although 1.4m shares is a large number in absolute terms, it's small sat against the
total number of shares out at BTO (around 926.5m). This is a wholly selfish position, I
look at the amount of dilution being caused to my shares (i.e. my greed for BTO) by
somebody else's greed. As the never seem to affect the company's development or its
share price to any great extent, I can live with them.
In the end it's about trust. It's rare to have absolute trust in any mining company management,
because in the end this is capitalism and they're going to look after #1 just as you and I will.
It's always a subjective decision, there are no rules or regulations and there are some se s of
management in this sector that I personally run a mile from due to their lack of scruples. But
when it comes to BTO I can accept the negatives they bring (e.g. the annual raft of sales)
because there are enough elements brought to the table by the same set of people that I like.
With BTO today we're in a consolidation period, the purchases are done and it's time the
company made good on its delivery of new production. Those are precisely the things CEO
Johnson and his team are good at doing and it's why I see particular value from being a
shareholder today. Does it matter that I wouldn't pick any of these people as drinking partners
or godparents to my children? Not much, because within limits they're a team with the right
profile to do what I'm sponsoring them to do (that sponsorship being the purchase of a small
sliver of their company). I'm not into this job to make friends, I'm here for the same reason as
all those people on the list above. For me, BTO pass muster.
Santacruz Silver (SCZ.v): Small inside purchases may be significant
Following straight on from a note concerning large insider sales and as posited on these pages
previously, it's not always the size of an insider purchase or disposal that makes it worthy of
attention. This screenshot from Canadian Insider (25) (the place to go when you don't need
absolutely every single detail from the difficult SEDI site) shows the insider activity in Santacruz
Silver (SCZ.v) over the last six months and there are three things of note:
19
1) There hasn't been much activity, this isn't a stock that's traded much by its insiders. That's
generally a good thing, by the way.
2) Company CEO and main driver of SCZ Arturo Prestamo was a seller at 40c at the end of the
year. Although only a small part of his total holding (he has over 8.8m shares) that was astute
on his part.
3) Prestamo, along with SCZ CFO McMorran, is a now a buyer of the shares at 18c and 20c.
You may remember that I owned SCZ for a while, selling for a modest loss before it (and most
of the silvers) dropped heavily. You may also remember that afterwards I had it back on the
shopping list as a potential long position, but then everything went quiet and I never bought.
That's because SCZ has never managed to match its guidances and promises with results, it's
seen a slow and poorly executed ramp-up at its operating Rosario mine and has continued to
fracture cash all this time (another $2.5m net loss in 1q15 just reported).
However, at 104m shares out and 17.5c, its $18.4m market cap may be a bargain if it can
eventually find a level financial footing and stop the cash fracture. For sure better silver prices
would help (it would help them all) but just getting Rosario to free cash flow positive status
would be enough to see some modest recovery in this stock. I'm not a buyer of this stock
today, not any silver junior for that matter. But the insider purchases of the last couple of
weeks do catch the eye so I'll be paying attention to the 2q15 production numbers from SCZ
when they arrive in July. For those of you less coward than I about silver, SCZ or subtle
indications from management teams, you may want to pay attention now and not in July.
Molybdenum comment
This isn't a metal that gets much commentary on these pages, but today a few lines for a
couple of reasons. Firstly, this:
20
The market price for moly has dropped to multiple year lows in 2015 thanks mainly to the way
the bottom has dropped out of the steel market (most moly is used as an ingredient in quality
steels), also the fate of other minor metals prices such as vanadium. The chart above is in
U$/tonne and marks the weekend close at U$16,650/t, that's U$7.55/lb in old money.
The thing is, things are likely to get worse and not better if Chile's Codelco has its way. In a
market that's already oversupplied with moly, Chile's State copper company has decided to take
better advantage of the moly by-product potential of its mines and that end this year has
created a new project, "Moly Corporativo". Last week saw the first concrete move of this new
subdivision of Codelco (26) when is placed a firm order with the company Kaeser Compressors
for plant it needs to equip its new moly roaster processing plant to be located at the port town
of Mejillones in Antofagasta. This plant, when up and running next year, will be able to process
a large quantity of Codelco concentrates sent through this port and is expected to be able to
produce up to 26,000 metric tonnes of high quality moly oxides per year when fully operational.
Your speculative trade idea of the week: INV Metals (INV.to)
This is the company that owns and is developing the Loma Larga project in Ecuador, formerly
known as Quimsacocha and owned by
IAMGOLD before it hit bigtime community
relations problems and anti-mining pushback.
It's also the very same project at the centre of
the petition we've mentioned on these pages in
a couple of recent editions of the weekly, most
recently in IKN315 when we pointed out that
the petition would get the requisit number of
signatures and that means there will be a
binding referendum vote on the project either
this year or next that will decide its future in a
pretty definitive manner.
So why is INV.to, normally my idea of an untouchable company and project, being featured as
a possible trade this weekend?
The answer is that this weekend President Rafael Correa held his weekly national broadcast
from the locality that hosts the Loma Larga project (namely San Gerardo parish in the Girón
canton in Azuay province) and made a staunch defence of the project and its benefits while
there. Here's a report on the event (27) and here's a direct translation of what was said:
"We Are Going To Use Our Natural Resources in a Responsible
and Intelligent Way" says the President of Ecuador
Mining Project in Girón is one of the biggest and most important in the
country. It will be underground, which will diminish its environmental impact
During the Citizen's Link 427 program, President Rafael Correa said that the mining
projects in the country are important for economic and social development. Regarding
the claims made by some people against the project being developed in the Azuay
canton of Girón, he said that they represent a minority as the community of the San
Gerardo parish support the government's development decision.
"We (i.e. our political party) won the parish vote, and the election for mayor of Girón
canton but despite that, the "stone-throwers" (note: one of Correa's typical terms for
violent anti-development protesters) want to stop responsible mining exploitation. Then
afterwards they'll tell us all about democracy", said the President of Ecuador, who
rejected the small protest there was in this district during his last governmental visit.
Also, he reminded those present that "we won 10 to 1 in Azuay, we beat them in
Presidential elections, we removed five of their congress members from the national
21
parliament but these shameless people still want to impose their agenda."
President Correa said that the inhabitants of San Gerardo supported the mining
project, one of the biggest and most important in the country, because even though it
had not yet begun the mining of its resources they were benefitting from some
advanced royalty payments that fund community projects and will generate jobs and
bring services to the community.
"The income from these natural resources, oil and gas and mining, are worthwhile for
these areas. Go and see for yourself how their reality is changing, for example in the
Amazonian communities", he said.
Finally, he said that this project is an underground one and has much less
environmental impact than an open pit project. Even though he recognizes that he
himself doesn't like the mining sector, it's an important economic activity for the
country.
"I don't like mining, but it is necessary not only for our way of life (the microphone he is
holding, metals, cars, cement, etc) but also because it provides the funds that will lift us
out of poverty as quickly as possible", he said.
IKN317 back. I still don't think this project has much of a chance, but if I were INV Metals I'd
be all over the specific and strong backing given to its project this weekend by the country's
very popular President. If the company's IR department has its wheels in line, we'll see them
promote its flagging share price on the back of this weekend's event (and for what it's worth a
similar event in the same location in which Ecuador's Mining Minister also talked up Loma Larga
(28)) and get the stock up from its current 14c lows. This isn't a trade for me, but those of you
with a penchant for risk and tinycaps may want to put it on your radar in the days ahead.
Conclusion
IKN317 is done, we end with bullet points:
• A thin sort of offering this weekend. Consider it part of my effort to get you to save
money on subscriptions to mining publications, but we'll be back with more detailed
fundies analysis on specific companies as from next weekend, that's for sure.
• The news out of Phoscan (FOS.to) last week is exactly what I was looking for as a
relatively new holder of this company. Downside looks limited, anything 30c or less is
now my idea of a bargain and if the underpriced treasury at FOS gets matched with a
decent project, there's every chance of a win-win situation that can pop this one
higher. We're unlikely to break any records with percentage wins on the trade and a
reasonable percentage win in a medium-term timeframe has always been the ultimate
objective of this lower-risk trade, but in times like ours that's not to be sniffed at.
• Timmins Gold (TMM.to) (TGD) and that pop at the close on Friday has my attention. I'll
be watching the wires early tomorrow morning to see if it was due to a news leak. If
so, I'd consider myself lucky that I decided to hold my TGD instead of dumping them a
week ago, if not back to the drawing board. That and IRL.
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
22
Footnotes, appendices, references, disclaimer
(1) http://incakolanews.blogspot.com/2015/06/gld-less-is-more.html
(2) http://www.incakolanews.blogspot.com/2015/06/the-scene-this-morning-at-2015-canadian.html
(3) http://www.smh.com.au/business/mining-and-resources/businesses-to-fold-as-mineral-exploration-hits-rock-bottom-
20150605-ghgvtv.html
(4) http://www.bhpbilliton.com/home/investors/reports/Pages/Roll%20up%20Pages/Andrew-Mackenzie-Presents-at-
Minerals-Council-of-Australia.aspx
(5) http://www.theaureport.com/pub/na/16683
(5a) http://www.kitco.com/news/2015-06-04/First-Majestic-Silver-CEO-Dings-CFTC-On-Silver-Market-Manipulation.html
(6) http://finance.yahoo.com/news/phoscan-initiates-strategic-review-process-113000587.html
(7) http://finance.yahoo.com/news/lara-exploration-ltd-drilling-intersects-200500010.html
(8) http://finance.yahoo.com/news/lara-exploration-ltd-letter-intent-120000597.html
(9) http://www.focusventuresltd.com/s/NewsReleases.asp?ReportID=710962&_Type=News-Releases&_Title=Focus-
Completes-CAD4.0-Million-Private-Placement
(10) http://www.focusventuresltd.com/i/pdf/June-2015-final.pdf
(11) http://opisantacruz.com.ar/home/2015/06/05/20-despidos-en-minera-santa-cruz-y-20-mas-en-proximos-dias-
sepultan-de-realidad-las-palabras-del-diputado-leonardo-alvarez/28680
(12) http://incakolanews.blogspot.com/2015/06/mcewen-mining-mux-muxto-files-shelf.html
(13) http://af.reuters.com/article/metalsNews/idAFL5N0YR1G120150605?sp=true
(14) http://www.metminco.com.au/IRM/Company/ShowPage.aspx/PDFs/1964-
10000000/RightsIssueShortfallAppendix3B
(15) http://www.proactiveinvestors.co.uk/companies/market_reports/107669/ftse-100-higher-at-lunch-metminco-
unaware-for-reason-of-share-price-rocket-107669.html
(16) http://aminera.com/index.php/mineria-internacional/item/11647-per%C3%BA-gobierno-propone-modificar-ley-
general-de-miner%C3%ADa-para-dar-luz-verde-a-proyectos-mineros.html
(17) http://www.buenosairesherald.com/article/190689/us-court-clears-way-for-argentina-appeal-in-citibank-dispute
(18) http://www.lanacion.com.ar/1799701-vidal-vuelve-a-descartar-un-pacto-con-massa-el-cambio-no-puede-incluir-a-
quienes-formaron-parte-de-este-modelo
(19) http://fr.starafrica.com/actualites/la-crise-a-la-societe-miniere-true-gold-au-menu-des-quotidiens-burkinabe.html
(20) http://burkina24.com/2015/06/04/crise-a-namissiguima-le-gouvernement-determine-a-faire-respecter-lautorite-de-
letat/
(21) http://www.lefaso.net/spip.php?article65085
(22) http://www.elperiodico.com.gt/es/20150605/economia/13352/Piden-que-ministro-revise--contratos-en-el-MEM.htm
(23)
http://www.centralamericadata.com/es/article/main/Guatemala_Oportunidad_para_empresarios_honestos?u=cceac143
115e9505d8aba5c37bdacb65&s=n&e=2&mid=[MESSAGEID]
(24) http://incakolanews.blogspot.com/2015/06/but-truth-be-told-its-unfair-to-point.html
(25) https://www.canadianinsider.com/company?ticker=SCZ
(26) http://www.portalminero.com/pages/viewpage.action?pageId=96762075
(27) http://www.ecuadorinmediato.com/index.php?module=Noticias&func=news_user_view&id=2818782599
(28) http://www.geoinvestigacion.gob.ec/el-proyecto-minero-loma-larga-aporta-al-progreso-de-azuay/
Apprendix 1: Flash update dated Friday June 5th
Good Friday morning, just after 8am local time, a few minutes before the open on a crisp and sunny autumn morning
23
South of the line.
The US jobs number has come in strong, gold's showing temporary weakness this morning that adds to the modest
(pre-emptive?) selling in the last couple of days. As the chances of getting a dump in the mining sector is fairly high
today, i plan to take advantage and add to a couple of positions.
I will definitely add to my B2Gold (BTO.to) and average down.
I will look to add to my Lake Shore Gold (LSG.to) and average up. Though I stress I'm looking for bargains, so just a
couple of pennies lower than today won't tempt me in.
I will look to add to my Minera IRL (IRL.to) position if volume comes. This would also be an average-down, of course.
Also, be clear that I'll spend the first couple of hours watching the market before hitting any buy buttons.
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
24
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
25
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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