IKN #322Premium

The IKN Weekly
Week 322, July 12th 2015
Contents
This Week: A sale, China and US macro for the week, Packt Like Sardines in a Crushd Tin Box.
Fundamental Analysis: An analysis of the First Majestic 2q15 production numbers.
Stocks to Follow: Overview, First Majestic (AG) (FR.to), McEwen Mining (MUX) (MUX.to),
NovaCopper (NCQ.to), Regulus (REG.v), Teranga Gold (TGZ.to) (TGZ.ax), Lake Shore Gold
(LSG.to), B2Gold (BTG) (BTO.to), Focus Ventures (FCV.v).
Copper Basket: Overview, Reservoir Minerals (RMC.v).
Low Cost Producer Basket: Overview, Goldcorp (GG), Silver Wheaton (SLW).
Regional Politics: Burkina Faso: One month in prison and other matters, Peru: The Minera
IRL model may be used by Keiko Fujimori, Argentina: The best voter intention survey there is.
Market Watching: Lake Shore Gold 2q15 production numbers, Minera IRL (IRL.to): Notes
from an office and a city, More on HudBay's (HBM) (HBM.to) successful ramp-up at Constancia,
Tinka Resources (TK.v): Meeting about a trip, New Gold (NGD): Price update and thoughts, A
simple thought on silver and the miners, Standard Tolling (TON.v): A meeting about a mill.
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
A sale
The normal top-of-shop headsup on a portfolio move. After digesting its mediocre 2q15
production numbers, I'm giving up on my pathetically bad First Majestic (AG) (FR.to) trade
thereby inviting fate to laugh at the way I sell things at the absolute bottom. Details are in the
'Fundamentals..." section today.
China and US macro for the week
Greece is the poltiical fun, but China's now the Big Crisis Centre And Worry thing so extra
attention is bound to be given to that country's macro numbers next week because we get
leading indicators such as GDP, industrial production and trade balance and retail sales from
China next week.
Meanwhile, over in the USA we get retail and business price info from PPI (Weds) and CPI (Fri),
but probably the main event next week is Janet Yellen's regular six month appearance in front
of the great and good of her congress on Wednesday and Thursday. Expect close dissection of
every word and the usual cheerleading when Mr Paul (pere or fils, it tends not the change
much) has his pop at how terrible fiat money is. To the usual zero effect.
Packt Like Sardines in a Crushd Tin Box
After years of waiting nothing came
And you realize you're looking in
Looking in the wrong place
I'm a reasonable man
Get off my case
Packt Like Sardines in a Crushd Tin Box, Radiohead, 2001
1

An OT intro. The three days in Lima last week were useful and some of the impressions from
several useful meetings are found scattered in the words sections below. Another advantage of
spending time in Lima is to visit quality eateries, so there were also meals with pals both inside
and outside my line of country. So no mistake, I've lived in big cities before and know how the
advantages work, I can also make the most of the anonymity-factor of big city life. That's me,
over there in the corner of the coffee shop, curled around my book with 'Do Not Disturb'
stencilled on my forehead, happy with my own company thanks very much. But the
ceaselessness, the tonnage of humans, the concentration of tourists in middle-class zones and
my stars the traffic and the grime and the turgid weather, it all adds up. But what tips the
balance are small things which you see locals grasp at for relief. Laying out a blanket on a strip
of grass three metres away from a constantly moving six lane highway. Smoking as they walk.
The inexorable rise of the Fitness Center. The superiority complex of the urban cyclist more in
touch with nature than you. It's not the constant onslaught of food that depresses and
disheartens, it's the pictures of food. It's not the noise, it's the ambient music designed to
deaden the cacophony and make it a more pleasant environment. For eight million zoo animals.
Humans have social hardwiring, which makes us as a species an easy draw for 'Better Together'
campaigns or 'Don't Walk Away' pleas from Eurozone chiefs. It's made Facebook, Twitter and
other "hey here I am" communication channels the massive successes they are. We
congregate, socialize and were forming hierarchies long before Aristotle put names to the
processes or drew schematics. It may be a function of my added years, or the lack of standard
ambition, the failure to be attracted to the classic reward baubles. But I'm not the same person
as 20 years ago for sure so these days the moment that I go tilt and "get me out of this jungle"
comes much earlier. Three days in any metropolis is just about my limit, as proven this week.
Fundamental Analysis of Mining Stocks
An analysis of the First Majestic 2q15 production numbers
For those who prefer to hack their way through The IKN Weekly, the TL:DR to this section is
"These are the reasons why I'm giving up the ghost on this badly conceived and over-held
trade and selling First Majestic (FR.to) (AG) next week". So yes, on consideration of the 2q15
production results offered to us by FR.to last week and what they imply I'm selling out, taking
my loss and moving on. So read on if you prefer to know why or perhaps jump to the Standard
Tolling (TON.v) write up at the very end if not. This time last week I rounded off the short
section on FR.to by stating this about what we wanted from its 2q15 numbers:
"...we're looking for a better performance from FR.to in 2q15 than we saw
last quarter. In fact, I'd class it as essential for further holding. If the result's
under 4m oz AgEq, I'm out of here."
And to my slight surprise, we did get the results from the company last week (and while I was
playing around doing other things, too). On Thursday before the open FR.to announced (1) its
2q15 numbers with the headline "First Majestic Produces 3.8 Million Silver Eqv. Ounces in
Q2'15" which is a bad start straight off the bat, compared to my minimum as stated last week.
2

As for details here come some tables, charts and words starting with the centrepiece of last
week's NR, the production results table above. Before checking out the mine-by-mine numbers,
some thoughts on the consolidated results that headline 2.717m oz Ag and 3.803m oz AgEq.
We begin by considering 1q15 rather than 2q15 and this passage from the FR.to 1q15
production NR back in April:
"Unusually high mill maintenance was required at three of our operations which
negatively impacted the quarter. In addition, reduced underground development has
restricted the operations. With the irregular maintenance now behind us, we are
expecting to see an improvement in production in the second quarter."
Let's see how that's got on:
FR.to: Consolidated production,
4500000
4000000
3500000
3000000
2500000
2000000
1500000
1000000
500000
0
3
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2
Ag/AgEq
other AgEq prod
total silver prod
source: company filings
• In 1q15, FR.to produced 2,776,855 oz silver and 3,905,270 oz silver equivalent.
• In 2q15, FR.to produced 2,716,504 oz silver and 3,802,559 oz silver equivalent.
Far from getting the improvement in production that Keith Neumeyer expected in the Q-o-Q
period, production dropped by 60k oz Ag and over 100k oz AgEq. Here's how those
consolidated stats add up via the five component mines: La Encantada, La Parrilla, San Martin,
Del Toro and La Guitarra. This first chart is silver only:
FR.to: pure silver production, per qtr
3500000
3000000
2500000
2000000
1500000
1000000
500000
0
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2
Oz Ag
La Guitarra Ag
Del Toro Ag
San Martin Ag
La Parrilla Ag
La Encantada Ag
source: company data
And here's the silver equivalent chart:

FR.to: Silver Equivalent production, per qtr
4500000
4000000
3500000
3000000
2500000
2000000
1500000
1000000
500000
0
4
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2
Oz AgEq
La Guitarra AgEq
Del Toro AgEq
San Martin AgEq
La Parrilla AgEq
La Encantada AgEq
source: company filings
As you can probably make out from those, the amount of pure silver in FR.to's production mix
has been dropping steadily over the quarters. For the last three quarters it's been between 71%
and 72% of total AgEq production...
FR.to: Percentage of pure silver in total silver
equivalent production, per quarter
100 97 97 95
95 93 91 91 90 90 89
90 85
85 80 80 80 80
80 76
75 72 71 71
70
65
60
55
50
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2
% Ag
source: company filings
NB: Please note the cut down Y-axis in this chart
...which reminds me of something else I wanted to mention. Back when FR.to announced its
2015 guidance figures in the 2014 Year-End MD&A, here's how it presented its forecasts:
"...Annual silver production is expected to increase to a new record range of
11.8 million to 13.2 million ounces (or 15.3 million to 17.1 million silver
equivalent ounces)..."
In other words big and flashy on the pure silver number, then brackets and a little extra on the
silver equivalent amounts that get bolstered by gold and base metals credits. But my word how
time changes our complex world, as in the 2q15 production NR last week it was this...
"Keith Neumeyer, President & CEO of First Majestic, states, "During the first
half of 2015, we produced 7.7 million silver equivalent ounces, which puts us
on track of achieving our annual goal of producing between 15.3 to 17.1
million silver equivalent ounces."
...which continues in the same vein. And as company CEO Neumeyer continues to spin things to
FR.to's very but very best advantage it becomes apparent that nowadays we're only getting told
about silver equivalent, with all the pure silver talk quietly dropped. Why so? Because if you
take a straight line through the numbers FR.to is still (just about) on course to make the AgEq
guidance for the year, but at under 5.5m oz Ag for the first half of 2015 it's lagging nastily
behind on the pure silver count. The way things stand, even with the boost expected from the
now delayed expansion at La Encantada (see below) FR.to isn't going to make its 2015

guidance for silver. So what does CEO Neumeyer do? Like any other BS mining company CEO,
he ignores inconvenient facts, glosses over, hopes the herded masses (that's you and me) don't
notice and that it all goes go away.
We now take a closer look at the performances of each mining unit at FR.to, with comments
where necessary. I'll try to keep these shorter, but the first one does need a few extra words.
La Encantada
Here's the chart covering silver production at FR.to's mainstay mine (unlike the other four, in
this mine's case we only give Ag number as
there's very little credit metal production). La Encantada silver production, per qtr
1200000
1000000
About a year ago production at La Encantada
fell off a cliff and that's when FR.to decided 800000
to invest in the mine to up its throughput by 600000
50% to 3,000tpd. That upgrade is nearing
400000
completion, but even here FR.to can't resist
the temptation to BS its audience. Here's 200000
some script from the 1q15 production report 0
(2) dated April 13th which gave clear
indication of the timeline in question:
• "...have additional production areas ready for the ramp up to 3,000 tpd in July.
• The foundations for the new 12' x 24' ball mill and fine ore bin were completed early in
the quarter. In addition, the installation and integration of the new tertiary crusher area
began in January. The total plant expansion to 3,000 tpd is now 60% complete and the
expected ramp up to 3,000 tpd remains on track for July.
Those lines from the 1q15 confirmed the timeline expected at the start of the year (and by the
way, this expansion project is the same one that was supposed to be doen in 2014). Anyway,
here's what we got last week from FR.to in the 2q15 report
"The ramp up to 3,000 tpd remains on schedule and is expected to be
achieved before the end of August."
Now either it's going to be achieved in August, or it's going to be achieved "on schedule" but as
the "schedule" was supposed to be July, it can hardly be both. For sure you may think "Well
hey...a month....it's going to happen anyway" and you're in your rights to give leeway to a
bunch of sophists if you want, but I'd remind you that all the equity value held by any mining
company ultimately boils down to just one thing, its story. And if it can't get its own story
straight, there's nothing there for us that cannot be provided in a far better way by a whole
stack of other non-BS companies.
La Parrilla
The overall total of under 1m oz AgEq
was the worst quarter at La Parrilla for
the last two years. We're not really told
much about why that should be, but the
NR commentary does mention an
increase in Pb credit production and a
drop in Zn credit production, presumably
due to mine sequencing. As zinc
commands a higher market price than
lead, less Zn in the mix would mean less
AgEq.
5
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2
Oz Ag
source: company filings
FR.to: Production at La Parrilla mine
1400000
1200000
1000000
800000
600000
400000
200000
0
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2
Parrilla other AgEq prod
La Parrilla Ag
source: company filings

Del Toro
Another mine that underperformed in the Q2 period, and we should recall that Del Toro is
FR.to's newest and up until recently billed as
its Great White Hope For The Future. We're
given a terse explanation for the lowball
quarter in the NR via this sentence, "The
decrease in total production was primarily
due to a 16% decrease in silver grades and
an 8% decrease in silver recoveries,
however, offset by a 3% increase in
throughput", though not much else.
However we shouldn't be too hard on Del
Toro, as even with the 664,969 oz Ag coming
in much lower than the 841,026 oz Ag of
1q15, the half year total of over 1.5m oz is
better than the top end of guidance for the year, that FR.to put at between 2.6m oz Ag and
2.9m oz Ag (3.7m oz to 4.2m oz AgEq) for 2015.
San Martin
The San Martin mine is FR.to's highest average grade operation and nearly all about silver, with
a little gold byproduct production to top off the mix (no base metals from this one). It's also
been performing well and above guidance since its recent expansion to a 1,300tpd maximum
throughput capacity in the second half of 2014. San Martin stuck in another good quarter and
at a touch under 1.4m oz AgEq is now handily above its upper end 2015 guidance schedule of
2.3m oz Ag Eq.
FR.to: San Martin production
800000
700000
600000
500000
400000
300000
200000
100000
0
6
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2
FR.to: Del Toro production, per qtr
1400000
1200000
1000000
800000
600000
400000
200000
0
Ag/AgEq
San Martin other AgEq prod
San Martin Ag
source: company filings
La Guitarra
This is FR.to's smallest mine which ran at an average of 467tpd in 2q15. It got a big boost from
its gold credit this quarter thanks to higher grades, while silver production at 230k oz was also
at a slightly higher run rate than 2015 guidance mostly thanks to grades some 10% better than
guidance.
FR.to: La Guitarra quarterly production
700000
La Guitarra AgEq
600000 La Guitarra Ag
500000
400000
300000
200000
100000
0
1q13 2q13 3q13 4q13 1q14 2q14 3q14 4q14 1q15 2q15
source: company filings
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2
Ag/AgEq
Del Toro other AgEq prod
Del Toro Ag
source: company data

Summing up, the to-guidance performances of most mines are again let down by the sub-
standard numbers from La Encantada. With that mine's upgrade now delayed until August, we'll
have just four months of its new production rhythm to offset its poor first half to 2015 (1.15m
oz Ag in two quarters is a mile behind the guidance of over 4m oz in four quarters). This is of
course why FR.to is now ignoring its guidance on silver production and talking up silver
equivalent, as it knows full well that it's going to fail on pure silver forecasts this year whatever
La Encantada does to catch up in Q3 and Q4. But where the shortfall cannot hide is in its
financials.
The state of 2q15 financials
This part checks out our model and estimates for FR.to, with eyes firmly fixed on what we
consider to be the scene for the 2q15 earnings report to come. Because it's here where the
rubber hits the road. This first chart is the most useful of the lot and shows our estimate for
revenues in 2q15 (U$52m) compared to total expenses (U$55m). Check out the notes below,
though.
FR.to: Quarterly Revs vs Total Expenses
90 (4q14 impairment backed out)
80
70
60
50
40
30
20
10
0
7
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2
source: company filings
srallod
fo
snoillim
revenues
Total Expenses
There's always an element of doubt in basing revenues on production figures because sales can
and often are a different level, plus of course the timing of sales in a volatile metals market will
affect received prices, so the U$52m in revenues comes with wriggle room either side by
necessity.
As for the expenses, be clear that as always we're NOT quoting simply the Cost of Sales, as
that would look like this...
FR.to: Quarterly Revs vs Cost of Sales
90
80
70
60
50
40
30
20
10
0
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2
source: company filings
srallod
fo
snoillim
revenues
Cost of Sales
...and be far more flattering to the company. No, "Total Expenses" at FR.to also includes
depreciation, depletion, amortization, G&A, forex, and other adjustments to give a clearer
picture of what it costs to produce metal at the company.
With Total Expenses at U$55m, i.e. higher than the estimated revenues, we're already into loss-
making territory at FR.to without even considering the BTL financial weights or tax. As this
operating earnings chart demonstrates, we're a long way from the type of cash made by FR.to
back when silver was $25/oz, $30/oz and above.

FR.to: Operating Income per qtr
45
40
35
30
25
20
15
10
5
0
-5
-10
-15
8
90q1 90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2
source: company filings, IKN ests for 2q15
srallod
fo
snoillim
This chart (right) shows "total expenses per silver equivalent ounce", which can be summed up
as a more accurate way of displaying this
company's operating cash cost per ounce (not FR.to: total expenses per AgEq oz
AISC or All-In, just operating). The 4q14 number 20
18
came in hotter because FR.to took extra
16
deprecation/depletion charges that quarter 14
(semi-hidden behind that big and headline- 12
10
making U$101.95m Q4 impairment that's not
8
included in these figures) but apart from that 6
one, since FR.to decided to get lean and mean 4
it's been knocking out the AgEq ounces at 2
0
aorund U$14 apiece. Which is fine if silver stays
at company assumptions (sidebar: for asset
valuation purposes FR.to decided to use
U$19.51/oz Ag as its benchmark this year, which
suggests that there are more impairments to come)
but with silver bouncing around just a dollar or two
higher than its operating cost number, there's no
chance of seeing meaningful profits from this
company until metals prices improve.
The recent financing that added some $30m to FR.to
treasury by selling 4.62m shares at CAD$6.50 each
(hey BMO, must have sounded like a great deal at the
time, amirite?) has added a little bump to the 2q15
share count, now at 122.215m shares outstanding.
More urgently, according to our best guesses it's put FR.to back in the black on working capital,
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2
$/oz AgEq
source: company filings, IKN calcs
140 FR.to: Shares Out
120
100
80
60
40
20
0
80q4 90q1 90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2
source: company filings
serahs
fo
snoillim

important because the company has some debt to service soon.
FR.to: Working Capital per qtr
140
120
100
80
60
40
20
0
-20
9
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2
source company filings
srallod
fo
snoillim
FR.to: Debt Breakdown per qtr
350
300
250
200
150
100
50
0
21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2
source: company filings
srallod
fo
snoillim
LT debt
current debt
Here's the assets chart (right), which isn't
a vital part of today's analysis but here
because 1) the debt chart needs to be
seen and the two are Yin/Yang and 2) we
get a reminder that the vast majority of
FR.to's asset value (whatever that weird
word might mean) is tied up in fixed
assets. Proportionally, it's not a very liquid
machine this one.
Here below is a longer-term evolution of
cash treasury at FR.to to underscore that
point. With Silver hitting lows again, its
$40m in post-raising cash isn't a great
deal to play with when there's over $70m in current liabilities to contend with.
FR.to: Cash treasury
120
100
80
60
40
20
0
80q4 90q1 90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2
FR.to: Assets Breakdown per qtr
1000
900
800
700
600
500
400
300
200
100
0
$m
source: company filings
21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2
source: company filings
srallod
fo
snoillim
fixed other current
cash

And the final chart, because this analysis is going on way too long, is a look at how the equity
per share (aka book value per share) has evolved. By raising cash at CAD$6.50 FR.to has done
itself a net favour on this metric in 2q15 and cancelled out any modest net losses it's forecast to
incur. But at U$4.43/share we're also right on where the share is valued today, so without an
improvement in silver there's not much reason to expect a rally.
FR.to: Equity per share
6.00
5.00
4.00
3.00
2.00
1.00
0.00
10
80q4 90q1 90q2 90q3 90q4 01q1 01q2 01q3 01q4 11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2
source: company filings
erahs/$U
Conclusion and discussion
I've run out of excuses not to sell this stock and take the loss that I should have taken months
ago. The main reasons I'm selling next week are:
• The 2q15 production numbers were lacklustre and didn't even beat the "interrupted" 1q15
results. Although FR.to will likely make the bottom end of its guidance range for silver
equivalent in 2015, it's going to miss its pure silver guidance numbers even if La
Encantada gets its upgrade on time in August.
• FR.to fails on Rule One* They're not making a profit this quarter and if silver doesn't
improve quickly, that will be true for the rest of this year. No reason to hold a lossmaking
silver miner.
• Its balance sheet position still looks tight thanks to its debt levels, thinnish treasury and
lack of real profitmaking potential from operations this year. We may see another equity
raising soon.
• The company is BSsing and fudging issues, as noted above. I've had enough of this
sophism from mining companies for one lifetime, thanks very much, somebody else can be
this company's stooge from now on. The day these jokers work out that trying to be clever
with words is a negative and not a positive is the day they may learn something of worth
to their lives.
• I may end up selling this thing at the bottom, I'm clear on that. But I can always open
expsoure in another, better and healthier looking silver miner if the Jekyll/Hyde metal
decides to rally. I know for a fact that even the previously crummy and unloved Endeavour
Silver (EDR.to) (EXK) is more attractive on its financials than FR.to today. There's always
another trade.
And with that, I sell. It won't be first thing tomorrow morning, for one thing all this Greece
malarkey this evening plus any further rebound rocket in Shanghai may allow a relief window in
a day or two. You never know, but rest assured that by this time next weekend I won't be an
owner of First Majestic Silver (AG) (FR.to). Enough is enough.
*make a profit

Stocks to Follow
I can't take my eyes off this thing for a minute, can I? Even though there were two weekly
winners (BTO.to, LRA.v) and four other unchanged names (SAM.to, ATM.v, LGN.v, FCV.v), the
nine losers (not listing them all) made the predominant direction down as the sound of liquidity
being sucked out of the market, with Shanghai as the main plug-hole, dominated the latter part
of the week. As I didn't even look at a computer screen between Tuesday evening and Friday
morning the big losers taken in McEwen Mining (MUX down 19.2%), NovaCopper (NCQ.to down
16.1%), Regulus Resources (REG.v down 15.6%), Teranga Gold (TGZ.to down 10.0%) Minera
IRL (IRL.to down 9.1%) and while we're making a list, let's throw in First Majestic (AG down
6.1%) because while that drop was smaller it's a stock that's been trading woefully for weeks,
not just days. For more, I've done a little extra on each of those "big drop" performances
below.
We currently have 15 open positions in our 'Stocks to Follow' list, our self-imposed maximum
number. Of the 15, five are in positive territory overall, ten are in the red. That's the same as
last weekend.
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$1.92 -11.5% Top Pick, 1st tgt $2.70
Metals Producers (in current order of preference)
Lake Shore Gold LSG.to buy C$1.04 07-apr-15 C$1.19 14.4% Will be bot out, bullish
Teranga Gold TGZ.to hold C$0.55 15-feb-15 C$0.63 14.5% Good prod. 83c tgt
McEwen Mining MUX str buy U$1.09 25-jan-15 U$0.783 -28.2% Suddenly v. cheap: avg down
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$4.43 57.8% may sell into any rally
Land Grab Stocks (in current order of preference)
Phoscan Chem FOS.to hold C$0.28 29-mar-15 C$0.29 3.6% 36c/share of cash, can add
Atacama Pacific ATM.v spec buy C$0.19 26-apr-15 C$0.18 -5.3% Spec buy, cheap adv proj
Legend Gold LGN.v hold C$0.085 01-mar-15 C$0.05 -41.2% Spec buy but v small trade
NovaCopper NCQ.to hold C$1.05 09-apr-14 C$0.52 -50.5% looking to sell, out of Cu exp.
Lara Expl. LRA.v spec buy C$1.15 08-apr-12 C$0.265 -77.0% 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$0.91 42.2% Nov'14 tgt $1.25, top Au expl
Minera IRL IRL.to adding C$0.23 22-jul-12 C$0.10 -56.5% New tgt jun'15 23c, adding
Focus Ventures FCV.v spec buy C$0.23 01-jul-12 C$0.22 -4.3% tgt 50c, 3q15 PEA
Regulus Res REG.v spec buy C$0.30 06-apr-15 C$0.325 8.3% Bet on 2016 drill prog.
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
Timmins Gold TGD jun'15 U$0.60 19-apr-15 U$0.62 3.3% near-term trade, out of time
2009, 2010, 2011, 2012, 2013 and 2014 closed positions in appendices below
Now for some notes on current basket stocks, with emphasis on the big losers on the week.
11

First Majestic (AG) (FR.to): Selling. Aside from the longer note above today, here's a quick
note on the painfully bad action in this stock recently. There I was a couple of weeks ago
musing that I'd be happy to be out at U$6, here we are today at U$4.43. The silver market
action hasn't helped of course, but what with the mediocrity of its 2q15 production numbers it's
time to take the cash hit and cauterize. I'm out of here.
McEwen Mining (MUX) (MUX.to): On discovering the drop in MUX last week when checking
market prices early Friday morning, my first reaction was of the glass half full variety and
"Wow, I'm glad I sold my Timmins (TGD)
when I did!", because that suffered just as
badly. But then the depression came, as my
MUX position is more sizeable than the one
cashed in TGD and this loss was both heavy
and unexpected.
Bad timing seems to be in play here. First
because everything dropped, second
because of that regulatory filing about MUX's
NYSE minimum $1 required listing price the
week before that may have caused a mini-
rush for the exits by
the....errr...diplomatically put "the less
sophisticated US traders", plus the shelf filing
of its plans to raise up to U$200m a couple of weeks ago that spells potential dilution (which
can bring on its own vicious circle) and then the news out of Argentina (3) last week that
workers at the San José/Huevos Verdes mine (i.e. the MUX HOC.L JV) went on another strike
after the company filed an emergency plan of action with the Argentine government that seeks
permission for the company to further cut costs (in plainspeak, redundancies). As San José isn't
a moneyspinner at today's levels, I don't think the real financial hit to any stoppage is of much
concern today and the real value in MUX is El Gallo in Mexico. Still, the optics aren't good and
couldn't have helped the stock at what is obviously a weak psychological moment
I have no new advice of great note on this stock, as I still think it's worth a lot more than its
present share price. I've left the sentiment on the table above at "strong buy" but that has to
be considered highly speculative, too. MUX is the type of stock that could rebound quickly, so
those of you who flip and trade should keep an eye on the opportunity. I'm just a holder today.
NovaCopper (NCQ.to): Down 16.1% though much smaller exposure and somewhat
understandable. We had some news from NCQ last week (4) when the company announced its
quarter financials to May 31st (a loss of $1.8m, in line) and the start of pre-feas work at its
main Arctic deposit that's planned to take the next two to three years. In other words, three
years. That's how Rick van Alphabet is going to use the $20m treasury from the Sunward
acquisition and justify his own steep salary.
Regulus Resources (REG.v): This is the easiest of the big losers to explain (and to handle
psychologically) as although the overall 15.6% loss on the week was as chunky as any other,
all it really means is that the 6c light volume pop of the previous week was taken away again.
What's more, REG is still very much inside its recent trading range at any price between 30c
and 40c, nothing much is happening and we're still on the wait for real news about community
relations agreements or improvements, all while the company goes through the necessary
Peruvian regulatory hoops to set up its planned big drill program in 2016.
Teranga Gold (TGZ.to) (TGZ.ax): TGZ took another biggish percentage hit and finds itself
far away from that 83c target of mine when just three weeks ago there was only a penny in it.
Heavy sigh. Nothing wrong with this stock, it's just trading on the generally cruddy tide of the
sector, that's all.
12

Lake Shore Gold (LSG.to): We do LSG's 2q15 production numbers below in 'Market
Watching', but they're good. As for the stock, it held up better than most to the negative
market week but still registered its overall loss of 5c.
B2Gold (BTG) (BTO.to): A quick word about one of the few weekly winners out there. These
charts of BTO have that "I don't have any lower to go" look about them so if gold doesn't
confound the bugs and go lower again, we're long past the moment for a real rebound here
instead of mere treading water. As explained when I recently added, I really like this stock for
the second half of the year and that's what July is.
Focus Ventures (FCV.v): I dropped in at the FCV head office while in Lima last week but
none of the main cast of characters were there; they were all up at the project (which is good,
they're working) and showing round a bunch of Argentinians (which is also good).
That second snippet is good because the only people from one of the world biggest agro
baskets (which has just set a new all-time record harvest for its main soybean crop this year)
that could be interested in Bayovar 12 are big-hitter agro people. And if so, it's a near-certainty
they're interested in Bayovar 12 for its cheap-entry Direct Application Phosphate (DAPR)
opportunity, rather than doing a Vale and spending a few hundred million on a classic product
facility like Miski Mayo next door. And that in turn would mean FCV gets the green light on its
most promising line of attack.
For more on the DAPR potential, I direct your attention to the same article I pointed out on the
blog last week (5) the report done by Tom Wallace of The Agletter (and agro investment
newsletter) about FCV at Bayovar 12 and published last week. For the record, I sent the link
over to the FCV guys the day it came out and in their reply they said they were impressed with
the write-up and particularly with the explanation of DAPR, which they called "one of the best
so far". So yes for sure the Agletter write-up was positive towards FCV and by definition the
FCv people will like that, but their particular appreciation for the DAPR explainer is interesting.
13

The Copper Basket
After twenty-eight weeks of 2015 The Copper Basket is showing a 17.28% loss to level stakes.
company ticker price 1/1/15 Shares out Market Cap current pps gain/loss%
1 Capstone Min. CS.to 2.03 381.95 439.24 1.15 -43.3%
2 Reservoir Min. RMC.v 3.96 47.55 211.60 4.45 12.4%
3 NGEx Resources NGQ.to 1.17 187.71 146.41 0.78 -33.3%
4 Nevada Copper NCU.to 1.65 80.5 112.70 1.40 -15.2%
5 Copper Fox CUU.v 0.135 402.96 78.58 0.195 44.4%
6 Amerigo Res ARG.to 0.27 173.65 72.93 0.42 55.6%
7 Western Copper WRN.to 0.68 93.68 47.78 0.51 -25.0%
8 Hot Chili Ltd HCH.ax 0.16 333.11 34.98 0.105 -34.4%
9 Panoro Minerals PML.v 0.295 220.64 31.99 0.145 -50.8%
10 NovaCopper NCQ.to 0.58 60.15 31.28 0.52 -10.3%
11 Regulus Res REG.v 0.35 56.39 18.33 0.325 -7.1%
12 Metminco MNC.ax 0.008 2410.5 9.64 0.004 -50.0%
13 AQM Copper AQM.v 0.06 141 7.05 0.05 -16.7%
14 Catalyst Copper CCY.v 0.305 31.41 5.65 0.18 -41.0%
15 Coro Mining COP.to 0.045 159.37 3.98 0.025 -44.4%
NB: HCH.ax & MNC.ax priced in AUD$, rest CAD$ Portfolio avg -17.28%
The overall basket average plumbs new 2015 lows at 17.28% in the red and now just three
stocks are left showing green ink (and even
then one of them is the ridiculous greenhorn- 5% The Copper Basket 2015, weekly evolution
special pumpjob Copper Fox). Of our 15 3%
0%
names, just three had a weekly win to report
-3%
(PML.v, CUU.v, HCH.ax) and two others were -5%
unchanged (MNC.ax, COP.to). That means -8%
ten weekly losers and they're not all getting -10%
-13%
listed, just the biggest droppers of
-15%
NovaCopper (NCQ.to down 16.1%), Regulus
-18%
Resources (REG.v down 15.6%), Catalyst -20%
Copper (CCY.v down 10.0%) and AQM
Copper (AQM.v down 9.1%).
As for price action in copper the metal, we could
simply report that it was virtually unchanged on the
week at U$2.55/lb for the futures contract and be
done. But as the hourly chart shows, Tuesday and
Wednesday saw some big downspikes on the metal
and all on high traded volumes, as the market's
resolve on the current price deck was severely tested.
Which may turn out to be a good thing, of course. Me
myself I have done my own share of hand-wringing
and doom-mongering about the prospects for copper
in the last couple of months and though the action
down below U$2.40/lb last week bore out the bearish
scenario, the rebound from those lows also manage to
confound bears (such as I) who were giving it the
"2.50 breaks and we're all going to hell in a
handbasket". So it's quite nice to be wrong about that,
for the moment anyway.
14
ht4naj ht11 ht81 ht52 ts1bef ht8 ht51 dn22 ts1ram ht8 ht51 dr32 ht92 ht5rpa ht21 ht91 ht62 r3yam ht01 ht71 ht42 ts13 ht7nuj ht41 ts12 ht82 ht5luj ht21
source: IKN calcs

While playing with price charts, here's one of the last ten days in the copper producer ETF
COPX, which might not trade with massive volumes for an ETF but does mark average sector
price handily. What we see is a drop of nearly 10% over the last two weeks, but what catches
my eye is how over half that drop was already in before the Tuesday copper price rollercoaster
began. And the other thing is how the copper space hasn't performed any worse than the GDX
(precious metals) or GDXJ (juniors) over the period. There hasn't been an almighty exit from
copper. Not yet anyhow.
For specialist commentary on copper market action last week it was "un-named trader", this
week it's very named commentator as the Andy Home column in Reuters as it does a great job
of current market scene-setting. It's entitled " Chinese storm rocks London copper (again)", it's
on this link (6) and here's part of the intro:
"In many ways the latest copper collapse resembles that of January, when the LME
three-month delivery price slumped to $5,339.50.
Then the London market was rocked by Chinese funds and this week has been a
repeat performance, albeit an amplified one, with the Shanghai Futures Exchange
(SHFE) playing the lead and the LME reduced to a supporting role.
History never quite repeats itself even if it does rhyme and there are important
differences between now and then.
However, this year will go down in the metal market history books as the one in which
China changed from fundamental driver to true market driver of prices."
If that sounds similar to the opinion we've had here at the IKN Weekly for the last few months,
and the reason why we follow Shanghai stocks most closely, then it may just be a coincidence.
Or not. As for the rest of Home's piece it's all worth reading but these lines close the end get a
paste here:
"But right now, it's all about the Shanghai Composite Stocks Index. It holds the clue to
what happens next to copper prices."
Because that's exactly right. Now for the regular inventory bullet points:
• Total world copper stocks stocks rose for the second week running and if the new trend
is confirmed in the week to come, the re-stock will be called as reality by all and
sundry. The overall rise was 9,279 metric tonnes (mt) (+2.1%) to finish the week at
461,073mt.
• The Shanghai Futures Exchange warehouses remained unchanged on the week as
China's wider financial markets did a very good impression of a rabbit stuck in
headlights of a large and fast-approaching motor vehicle. They stayed at 101,517mt.
• But LME warehouses went up by 7,750mt (+2.4%) to finish at 329,725mt, the second
rise in as many weeks.
15

• And Comex warehouse stocks also rose again, though this time by a more moderate
1,529mt (+5.4%) to finish the week at 29,831mt.
Here's the Shanghai-only chart, which flatlined on the week for the first time since early May.
I'm not jumping to any conclusions on a single week's worth of data from this exchange, but it
is notable that the change in direction has happened at the same levels of the flattening out of
last year. Most commentators' expectations have been that come the quiet July and August
period then Chinese stocks would recover some of the lost ground. As long as the number stays
above 100k, that theory's bound to grow in strength.
Shanghai Futures Exchange Warehouse Stocks, 2014/2015
260000
240000
220000
200000
180000
160000
140000
120000
100000
80000
60000
16
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 ht41 ht82 ht21
Mt Cu
source: Cochilco
Now for notes on just one basket stock.
Reservoir Minerals (RMC.v): I wasn't going to mention any specific Copper Basket stocks
this weekend because I wasn't there watching when the big volatility moment happened, but a
word about RMC is due because it's been remarkably resilient during all this rough period.
That's the type of share price performance other explorecos would die for.
The Low Cost Producer Basket
After 28 weeks, the 2015 Low Cost Producer Basket is showing a 6.66% loss to level stakes.

company ticker price 1/1/15 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Goldcorp GG 18.52 830 13.65 16.44 -11.2%
2 Newmont NEM 18.90 528.08 11.90 22.54 19.3%
3 Barrick ABX 10.75 1164.67 11.77 10.11 -6.0%
4 Franco Nevada FNV 49.19 156.5 7.15 45.71 -7.1%
5 Silver Wheaton SLW 20.33 403.75 6.10 15.12 -25.6%
6 Agnico Eagle AEM 24.89 214.12 5.99 27.96 12.3%
7 Kinross KGC 2.82 1146.2 2.42 2.11 -25.2%
8 Buenaventura BVN 9.56 254.19 2.33 9.16 -4.2%
9 B2Gold BTG 1.62 921.27 1.42 1.54 -4.9%
10 Pan American PAAS 9.20 151.64 1.20 7.91 -14.0%
all prices in U$, using NYSE ticker prices Portfolio avg -6.66%
The number of the beast. Our basket average dropped hard last week and closed at -6.66% on
the year, even though two components
The Low Cost Producer Basket: Weekly performance
managed to buck the heavy negative
trend for the sector (GG and BTG). The 30% and comparative to GDX control
25%
other eight fell, led by the taxing losses
20%
suffered by Silver Wheaton (SLW down 15%
12.8%) and followed by other big drops in 10%
5%
Buenaventura (BVN down 9.3%), Kinross
0%
(KGC down 7.1%) and Pan American
-5%
Silver once again (PAAS down 6.8%). -10%
-15%
It's at times like these when I remind
myself the way in which visuals, charts,
tables and what-have-you help my
understanding of trends and sector
happenings, which is why I like tracking them using visuals. The hack here comes from looking
at the Basket tracker chart (along with the GDX benchmarker performance) and seeing how
mid-May saw the change in trend. Since then
it's been downhill all the way. There are times
when a market or sector rout makes headlines
in non-specialist corners of the business or
even wider world. At the moment the
favourite is the Shanghai stock exchange, but
you'll know as well as I how the mainstream
tends to pick up on the tail end or climax of a
move, rather than document its development,
rise or fall. Inside the current longer-term
bear market for mining stocks, we've seen
months of constant selling in the mining
stocks.
Meanwhile, our basket maintained its rough 2% advantage over the GDX control.
Goldcorp (GG): My "I don't think this one goes any lower" stock had a second decent week
while most around lost theirs. I was told by someone somewhere that Credit Suisse re-opened
its coverage on GG last week, called it at outperform and set a U$24 target. I can't disagree too
much with that call and again, it demonstrates why we shouldn't care so much about the tiniest
of the tinycaps. If there are potential 50% gains to be had in the bigboys, why run the extra
risk?
Silver Wheaton (SLW): Its well documented Canadian taxman problems did for SLW last
week and when I saw the stock open at "just" -5% on the Tuesday morning I nearly shorted
17
ts13ceD ht4naj ht11 ht81 ht52 ts1bef ht8 ht51 dr42 ts1ram ht8 ht51 dr32 ht92 ht5rpa ht21 ht91 ht62 dr3yam ht01 ht71 ht42 ts13 ht7nuj ht41 ts12 ht82 ht5luj ht21
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 ht41 ts12 ht82 ht5luj ht21
|
source: ikn calcs, NYSE/Nasdaq data

the thing. Should have done. On that morning and after I'd stuck my post up I received a mail
from A. Reader (not even initials this time) who's very smart at this sector and wrote this:
With respect to Silver Wheaton, I had always heard that what they were essentially
doing was:
• Silver streaming deal done – stock/cash issued to producing mining company –
probably to offshore subsidiary of producing mining company.
• Offshore sub buys silver from producer at $4.50/oz or whatever the contract
says.
• Offshore sub sells silver at market, collects difference.
• Cash stays offshore, no taxes paid.
Who is cheated? Well, the tax authorities in the country in which the silver is produced,
for one. Apparently Canada Revenue doesn’t like it much either. This would seem to
be a classic case of tax avoidance by transfer pricing.
Agreed wholeheartedly. So rather than re-phrase it into my own words and pretend to be
smarter than I am on the subject, you read his instead. I've also read level-headed analyses on
this event that puts SLW onto the hook for around C$600m all told. Good. Hope it's more.
Regional politics
Burkina Faso: One month in prison and other matters
The 14 people who were arrested during the late-May protests against the True Gold (TGM.v)
Karma project in Burkina Faso had their day in court last Wednesday. The prosecutor was
looking for sentences of 24 months in jail for each one, but after hearing the cases and the
pleas for mitigation (there was a lot of use of ignorance of the law by the defence, apparently)
the verdicts handed down were one month in prison (7), which meant all the defendant walked
free that day as they'd already spent 41 days in remand.
The verdict could be construed as lenient and hey, it probably is just that. Though it could also
be considered a shot across the bows of the protest groups looking to disrupt Karma, as there
will be no chance of pleading ignorance of the law the next time around. We've also seen things
as pretty calm and quiet in the zone for the last month though that's probably as much to do
with the Ramadan period as anything else. We've also had a wait before the newly formed
community oversight and steering committee has its first meeting, which is set for July 15th.
There hasn't been any major works going in at the mine project before that committee first sits,
which makes sense from a diplomatic standpoint but now means the project which was
supposed to have started the heavy earth moving activities in May still hasn't made much
progress son critical path activities. With Ramadan coming to a close this week (unlikely to be
coincidental timing) it's probably worth keeping an eye on news out the Ramatoulaye area in
18

the next couple of weeks to see whether protests kick off again.
Peru: The Minera IRL model may be taken up by Keiko Fujimori
The economist, media figure and all-round inflated ego Hernando de Soto is one of Peru's more
famous and influential figures in academia, which is fair enough I suppose. He's also one of the
intellectual drivers of the Fujimorista party and its growing campaign to make Alberto's
daughter Keiko Fujimori the next President of Peru. He's suddenly become more of a voice in
recent weeks, for one thing because he's finished with his lucrative lobbying campaign
connected with Egypt's 'Arab Spring' (now unravelling) and also because we're just a year or so
from the Presidential election in Peru to decide who will succeed Ollanta Humala, and Keiko's
one of the three front-runners. There's (more lucrative) work to be done.
So to this week and Hernando de Soto captured headlines with his call in Peru on Friday to give
5% of the shares in any mining project to the local community around it (8). That of course
happens to be exactly the thing Minera IRL did with the town of Ollachea and now we have that
private sector move attracting the attention of Peru party politics as the eelction campaign
begins to get into gear.
I find this most interesting, not least because if it sets a tone and Keiko decides to adopt the
measure in the party's manifesto, it will bring the community wealth distribution model into the
public debate arena and force each candidate to have a clear policy towards mining and project
development come the day of the vote.
Argentina: The best voter intention survey there is
We've now seen a whole host of regional and governor's elections in Argentina during this key
election year and this table shows just how well the ruling FPV party (of President Cristina
Fernandez de Kirchner) has done so far.
To date, 41.85% of voters in Argentina have voted in regionals etc and of those, 31.79% have
voted for the FPV party candidate in their region or area. This is about as good a voter intention
survey as one can imagine for the upcoming Presidentials, as the size of the sample will
dampen down any pro or contra local noise or party politics. It matches closely the type of
numbers that Daniel Scioli's been reaping against his rival(s) for the job Mauricio Macri (and
Sergio Massa if you still insist). It's also notable that the above sample does not include the FPV
19

powerhouse region of Buenos Aires province, the biggest single vote block in the country that's
been run up to now by FPV Presidential candidate Daniel Scioli and which it will almost certainly
win very easily and by big margins (FPV is projected at 45% there).
The last couple of weeks have seen a rise in the number of serious and level-headed
commentary people in Argentina who either predict a Scioli win in round one or if not, that he's
getting close to that level. I don't think Scioli will quite have enough and again, a lot will
depend on how the deserters from the Sergio Massa campaign decide to cast for Scioli or Macri.
But his grasp on the top job is looking firmer by the week and few in Argentina or looking on
the campaigns doubt that Scioli is now red hot favourite.
Market Watching
Lake Shore Gold 2q15 production numbers
I was away from the office and didn't even see a computer screen (aside from the one on my
trusty and much-loved Kindle, does that count?) on Wednesday when LSG announced its 2q15
production numbers (9) so when I finally got round to checking them out the rest of you and
your market friends had already digested them. But no matter about that, no matter that the
down week saw no love given to the stock price and no matter LSG surprised nobody at all by
upping its 2015 production guidance in the same NR, the Q2 numbers were solid enough and
probably saved LSG's share price from the type of fate suffered by many juniors.
Let's start with the main table from the NR, reproduced here with a few scribbles on top
The throughput tonnage number was very good, the second highest quarterly figure ever at the
company (4q14 beat it out by 4kt). Grade came in lower than expected and is back at the
baseline level we saw a couple of times in 2014 (and we note that LSG is guiding for similar
figures for the rest of 2015). With recoveries hitting their number, production came in at 42,600
oz gold and sales 45,900 thanks to a lag from 1q15 that we'd already taken into account.
Lake Shore Gold (LSG.to): Tonnage milled
350000
300000
250000
200000
150000
100000
50000
0
20
21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2
Lake Shore Gold: Gold production vs sales, per qtr
tonnes/qtr 60000
55000
50000
45000
40000
35000
30000
25000
20000
source: company data
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 tse51q3 tse51q4
oz Au
Au prod
Au sold
source: company filings

As for received prices, the U$1,197/oz average was just a touch under the U$1.2k we're looking
for from all mining companies in 2q15, not just LSG, so that's acceptable. As for the price that
really matters for the financials (recall that LSG is one of the few that reports in Loonies rather
than US Greenbacks) that was CAD$1,470/oz, slightly less than our original house forecast of
CAD$1,500/oz and that probably because the Loonie rallied a little off its lows.
To recap, this table shows the IKN model 2q15 forecasts (i.e. guesses) plus the results posted
by LSG:
LSG 2q15: Theory and practice
item IKN model LSG Result difference
Tonnes milled 300,000 327,100 27,100
Au grade g/t 5.0 4.2 0.8
avg recoveries 96.7% 96.8% 0.1%
Au production 46,700 42600 4,100
Au sold 46,700 45900 800
avg price U$ U$1,200 U$1,197 U$3
avg price CAD$ C$1,500 C$1,470 C$30
op costs C$/oz C$670 ??? ???
calc revs CAD C$70.05m C$67.47m C$2.58m
source: LSG filings, IKN ests
As for operating cash costs, I'm going to stick with the original C$670/oz house guesstimate for
the time being, but the guidance given by CEO Makuch in last week's NR gave me the
impression that it might come in higher in Loonie terms. Overall we weren't that far out and I'm
happy enough to be easily inside a tolerance range, but also overall I guessed a little too
optimistically in many areas and have had to adjust down more than adjust up.
How that translates to the main financials we can expect from LSG once the quarter is reported
comes under these next couple of charts. This main P+L tracker now has 2q15 with revenues at
(all numbers Loonies, not USD) $67.5m, costs moved up slightly from our original model to
$32m (due to the extra tonnage processed) then deprec/deplet at a best-guess $20m. That
leaves gross profit at $15.5m, which compares reasonably to the last few quarters:
LSG.to: Quarterly Earnings Overview
90
80
70
60
50
40
30
20
10
0
21
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2
$m
revenues Prod Costs
deplet/deprec gross profit
source: company filings/IKN ests
Operating earnings give the best straight-line performance data for LSG and these two charts
below show that in absolute cash terms and also per-share terms. Our best guess for 2q15 is a
$6.5m quarter, which is below the blow-out 1q15 number but we weren't expecting that one to
be repeated. An op-EPS of around 1.5c looks about right and would be a perfectly acceptable
quarterly result, too.

LSG.to: Op. Earnings
26 (with 4q12 and 4q13 impairments backed out)
22
18
14
10
6
2
-2
-6
-10
22
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2
source: company filings/IKN ests
srallod
fo
snoillim
º
LSG.to: operating earnings per share
(with 4q12 and 4q13 impairments backed out)
0.06
0.05
0.04
0.03
0.02
0.01
0.00
-0.01
-0.02
-0.03
21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 tse51q2
cents
source: company financials/IKN ests
Those kind of figures also jive well with the LSG statement in last week's NR that, "... we have
been able to grow our cash and bullion by approximately $20 million in the first six months of
2015 with the increase coming entirely from internally generated cash flow", the type of
balance sheet figure that fits closely with our current estimates.
Overall we don't have LSG returning a massive 2q15 profit, we do have the company returning
a profit in a non-easy period and that's worth its own weight in gold. As LSG is almost as much
a growth/discovery/expansion play these days as it is an operating story (thanks to the 144
zone), we can currently predict a couple more quarters at-or-around that of 2q15 for the rest of
this year, consider the stock as a CAD 7.5c annual earner and even at that level fully justify its
current share price with gold where it is.
Mind you, I'm the same person who stated that McEwen Mining (MUX) fully justifies its U$1
share price level at current operating levels :-).
Bottom line: LSG put in a correct quarter
and its announcement to move up 2015
production guidance to "at least 180,000
oz" from the previous 170k to 180k oz
range is mere common sense (my best
guess for the year is now 183k oz Au).
I'm a holder of LSG and that won't
change unless gold drops stupidly and
I'm a further buyer of the stock if gold
pops higher because it has all the
hallmarks of the type of quality
small/medium producer that I believe to
be the sweet spot of today's miner's
sector. If a buyout offer (from Goldcorp)
doesn't arrive, the stock isn't about to

sell off because there's plenty of meat on this bone and there's a lot of upside if (repeat if,
underscore and highlight IF) gold decides to run higher. I envisage LSG making a decent
consolidation base at its current $1.20 share price and it will run higher if given the right
impetus. and yes, I still think this is a great fit for Goldcorp and the right thing to buy in the
current macro circumstances.
Minera IRL (IRL.to): Notes from an office and a city
Along with meeting Minera IRL's (IRL.to) (MIRL.L) Interim CEO Diego Benavides and picking his
brains, it was also good to cast around for other opinions on the company from those in the
Lima mining community while out and about last week, as well as noting reports in the
company and how it's getting more publicity inside Peru's mining and business community.
Here are some notes from the swanky square mile of Peru with its glass-fronted offices and
expensive eating establishments.
First a word on a presentation given by Diego Benavides to a locally important conference for
the building and construction called Expo Arcon 2015 in Lima (10) full of Lima bigwigs and
assorted self-loving people. During that presentation (that he gave after I'd met up with him)
he was reported as saying (11) that Ollachea's "probable reserves will exceeed five million
ounces of gold" (yes I know, I've checked, that's how it's being reported in several places (12)).
It's likely to have been a reporter not versed in mining picking up and using the wrong
vocabularly, but the "five million ounces" was definitely there. It seems CEO Benavides was
talking about the eventual potential of the whole Ollachea concession, rather the just the
current approx/above 1m ounce reserves on top of which the mine will be built. Not only that
but in "those type of off-record" exchanges with people who know Ollachea it's been made
pretty clear to me that the potential to find a lot of extra ounces there is very strong and a
number like five million is not out of the question. But it's one thing to get off-record Utopia
thoughts and optimistic arm-waving, quite another at such a public event and in that context it
was a real eye-catching statement to see in print.
Third, it seems from where I'm viewing that a period of potentially sticky internal politics at IRL
is now blowing over, things are getting smoother and any potential trouble has been averted. I
also expect Diego Benavides to be ratified as CEO (rather than his current official label of
Interim) in the near future, which will be a good thing. In fact, I'd go as far as to say that
without Benavides running the shop IRL would be an altogether riskier proposition this year. If
there's one thing you need when raising money in Peru, it's connections to the right people in
the right places. It's a country of many things, but a straight meritocracy it most definitely is
not and who you know (plus where you're from and what you last name is) counts for an awful
lot. CEO Benavides isn't just the right man for this job, he's the only man (unless some third
party turns up and offers to buy out IRL). I'd go as far as to say that the success of the COFIDE
financing rests squarely on his shoulders and that without him at the helm it could be in
jeopardy. All reasons why he should soon have the word "interim" lifted from his job title and
be the confirmed CEO.
Thirdly a small point, I can confirm a snippet picked up on a few weeks ago, that the minor
Corihuarmi operation will see its mine life extended to at least 2017 and even without any new
discoveries it could see its life extended as far as 2020.
Fourth up, timing of the senior secured loan. The negotiations are apparently going well,
though it should be stressed that IRL isn't directing or leading those talks any longer. That job
now falls to COFIDE as leader to get the banking and financial people together in order to fill
the financing book. As things stand and going on the positive feedback from the debt financing
organizers, IRL expects the deal to be tied up and done "within six months" (I couldn't get
anything more specific than that), which basically means the end of this year as I'd doubt the
talks would bleed into January 2016 what with that being then month those with comoftable
salaried lifestyles take their summer vacations and leave the city. On this point I state clearly
that I am very confident (can't say 100% for the same reasons as "never say never", but can
say very) that the deal will happen inside the timeline and on shareholder-friendly terms.
23

Next, construction timeline and due to the slight delays seen in the COFIDE deal which
happened in 1q15, IRL is now slating 3q17 for first pour at Ollachea. That's fair enough, it
seems to take into account the secured debt deal happening right at the end of 2015 and
provides some wriggle room too, so assuming the cash is raised in correct order (and it will) I'd
say 3q17 is easily doable.
Final main point, Ollachea capex estimates. At the moment IRL is sticking firmly to its
assumption of U$170m to get Ollachea up, running and a free cash flow positive commercial
operation. I tried to budge and nudge Interim CEO Benavides lower, pointing to this-and-that in
the way of cost savings potential, but he wasn't having it and they're going to stay at that
figure. That stated, around 45% of capex costs are directly exposed to the Peruvian Nuevo Sol
(PEN) currency and the budget they are using which sticks at U$170m for the non-embedded
capex is done using a forex of U$1 = PEN 2.75. As the Peruvian Sol is now trading at 3.18 (and
keeps on weakening), we're looking at a 15.6% difference in the forex which is to IRL's
advantage in US Dollar terms. Therefore and aside from the drops in cost for other inputs such
as labour, steel (rebar etc) cement and other, we can potentially shave around 7% from the
U$170m ticket price thanks to the strength in the US Dollar. That's U$12m in real terms and
puts us at U$158m and in other words, although IRL is going to remain with its capex budget at
U$170m I think it likely they'll be able to build the machine for under that figure. We'll see.
Overall it was a good and fruitful meeting at IRL last week and the one thing I took away from
it, now that the COFIDE bridge loan is in place and wheels are obviously turning on the main
debt deal is the confidence in-house about its future. They're now talking about the end of
2015 instead of end 3q15 or beginning 4q15 to get the debt deal fully done and that's a slight
pain, but on being briefed about how it's going down and who needs to do what with COFIDE
(rather than directly with the company) it makes sense and the little extra patience should be
amply rewarded. Make no mistake, this deal will happen. I've given myself room to add more
IRL (sidebar; Opportunistic potential trades aside it's about the only thing I'm truly green light
about buying right now) and although I wasn't a buyer last week, I miight have been tempted
by the newly discounted 10c price if I'd been around the right buttons at the right time. If size
at 10c appears again in the days to come, I'm probably going to finish my additions buying.
More on HudBay's (HBM) (HBM.to) successful ramp-up at Constancia
An extra snippet to add to the news imparted on the blog last week gathered from the Peru
Ministry of Energy and Mining (MEM) website stats (13) that reported production at HudBay's
new Constancia copper mine at 8,965 metric tonnes of copper (i.e. pure copper total, not
concentrates). If we annualize that May figure it would put Constancia on track to produce
107,580 mt Cu in one calendar year
At the same Expo Arcon 2015 in Lima at which IRL's Interim CEO Benavides presented (see
above), the director of projects at HudBay Peru, one Edwin Ruiz, reported (14) that the plant is
currently running at 100,000 tonnes per day through, above its target of 80,000tpd for this
stage of the ramp-up process. This also compares with the daily average for April 2015 which
24

the company reported at 78,635 tpd at the time (15). Mr. Ruiz also told those present that
between the start of commercial production in April and today, the company had shipped eight
dispatches of copper concentrates and had between 30 and 40 trucks working on site daily.
Tinka Resources (TK.v): Meeting about a trip
I met with TK people last week and now in the cards is a site visit to its Ayawilca project that
should happen around August 6th (a Thursday for what that's worth) and coincide with the
drills turning at the project. And that's good, as being a near-totally blind target there's not
going to be much geology to point at other than the approx 20,000 metres of core already
stored and what comes up while we're there. It's also good because I'll be able to get a better
feel for size, layout, topography and that key ingredient in any project in Peru, its community
standing and relationship with locals.
New Gold (NGD): Price update and thoughts
A short note on the back of last week's close look at New Gold (NGD) (NGD.to) and its
subsequent price action over the last week
Last weekend via the longer analysis note I
expressed my interest in NGD as a potential
trade. That interest still stands, but please
be clear that I'm still not a buyer of this
stock yet, lower price this weekend or not.
For one thing, the type of jagged moves
you see there, even stronger than the GDX
or GDXJ ETFS, make for flip-trade heaven
and not investor buying (what I'd like to do.
Second, I have enough exposure for the
time being in the gold producer sector
(start with MUX...ugh) and until things calm
down I see no reason to wade in and grab
more at the first available price.
With NGD, objective should be longer term and if gold decides to become bullish again, it's the
type of stock that appeals less as a $3.50 to $4 vehicle over a few weeks and more as a $4 to
$10 vehicle over a year or two. NGD isn't going away, it has its growrth pipeline and unless the
gold sector truly dies a death it has enough financial strength to see it through years, not just
quarters. It checks the boxes for when any new bull market but until it begins, I'm watching.
A simple thought on silver and the miners
This occurred to me on the
flight home Friday, so I
sketched it out that night and
though nothing earth-
shattering in its importance or
insight, on the final edit this
Sunday evening I decided to
leave it in.
Here's a 2015 year-to-date
chart which includes silver
bullion via the SLV ETF proxy,
then a bunch of representatives
from the silver mining sector.
I've chosen exclusively
producers and only those with
NYSE tickers for our sample, so
though it's by no means an
25

exhaustive list it gives a fair cross section idea of what's out there in the silver producer space
and how the stocks are faring this year.
The main thing to note is how much better the metal is doing compared to the companies
mining it. I think that's very interesting, because it comes right behind a well-covered and
reported drop in the price of silver to under U$15/oz, which was followed at the end of last
week by a relief rally (dead cat bounce?), about which only time will tell whether it has legs. As
for the producer stocks chosen to represent the sector, First Majestic (AG) is the "best" of my
semi-random bunch because it's "only" down 15% year to date. Then come Pan American
(PAAS), Tahoe (TAHO) and Endeavour Silver (EXK) revolving around the 20% loss point so far.
Both Fortuna Silver (FSM) and Gold Resource Corp (GORO...and don't forget that one is a
mainly silver miner in virtually the same percentage terms as Fortuna Silver is) are down
around 28% so far this year. As a sidebar, have you also noticed how Fortuna Silver seems to
get a free pass from analysis and brokerage criticism while other silver stocks are the sector
whipping boys? Then coming up the rear of our sample of silver producer stocks is Great
Panther (GPL) which is as bad as it's ever been as a company but is now getting the attention it
so richly deserves.
Standard Tolling (TON.v): A meeting about a mill
The best meeting all week was with the people at Standard Tolling (TON.v), the toll mill start-
up I've mentioned on two or three occasions recently that's caught my eye as being potentially
better than its field.
So let's be clear, it is better than its field.
What follows are semi-related note paragraphs that cover the main points we discussed during
our meet-up in Lima.
The main part of my meeting was with company president/CEO/chair Len Clough, who was
accompanied by Chief Operational Advisor Carlos Mirabal. Carlos Mirabal is the right person to
have on your team for a project like this. We talked a lot about his background, which includes
nearly 40 years in the mining business that was topped out by being the president/CEO of
Orvana Minerals in Bolivia until 2010, when he supposedly retired. But when you meet him you
quickly get the feel for how much he's into the mining game, so it's no surprise to see him now
in "semi-retirement" (or whatever they call 60 hour per week jobs like this) and doing what he
obviously enjoys the most. Quite right too, he's a dyed in the wool miner who loves his job.
Aside from his stint at the head of Orvana, the part of his extensive background we talked
26

about the most was his time spent at Comsur, a Bolivian mining company that started quite
small and along the course of the decades 60s, through 00s, built up its own large-scale toll-
milling operations in that country. Cutting a long story short, what TON.v has in Señor Mirabal
is a man who's seen every nook and cranny and problem and solution and scam and fix
possible in the game of producing somebody else's mined ore. His influence on an advisory
level at TON.v became most apparent when we went over the layout and plan of the now-
nearly complete processing mill that's located just 2km outside the town of Huamachuco in the
La Libertad region of Peru (maybe 35km from Rio Alto's La Arena mine, if that helps). Instead
of spending the normal 90 seconds on the flowchart, we ended up having a 20 minute in-and-
out exchange about how such a plant needs to be set up, what pitfalls were waiting for those
that are badly designed, the way in which people selling ore to a toll miller can (and will) rip
them off given half a chance, the way to run a plant such as this in the right way from the
getgo...the whole nine yards. And that Mirabal man knows it all. I was most impressed.
Attention turned to what TON.v head honcho Len Clough had to say. I got to see very recent
photos of the processing plant which is now all-but complete and we talked about the financial
aspect, the plans for growth from its initial 100 tonnes per day capacity towards its proposed
maximum 350 tpd down the line, how TON.v was looking to get from point A to point B and
then what its plans might be once the plant had all grown up.
The first job is to get the plant working and get it to 100tpd. That involves finishing the last
part of the build-out, then sourcing the right gold oxide inventory ore, then manning and
operating once inventory is there. TON.v plans to start by running lower grade material through
its plant, which is easier to source and takes the edge of any teething trouble risk they may
encounter; normal procedure. Then once the plant is at its first stage 100 tonnes per day (tpd)
capacity it's looking to up the average head grade and improve production that way, until a
natural ceiling is reached. At that point the second stage of growth to 350tpd can begin. The
plant's been overbuilt already at most points, so to get to 350tpd the only two main additions
needed (aside from the necessary tubes and a few more people as employees) would be an
extra ball mill and more tailings capacity (which has already been permitted). The plant won't
go over 350tpd because that's where the official limit for "small miner" is according to Peruvian
law and to make it any bigger would mean a whole new round of permitting and capex.
However, TON.v has already thought beyond this point and has ideas its playing with for further
corporate expansion. The main one is the most obvious, which would be to take the
Huamachuco mill model and build a similar one in another part of the country. It was made
pretty clear to me that a second mill would be in the North of Peru, rather than in the South
where most toll milling operations are currently located. TON sounded most enthusiastic about
the Piura region, which makes sense too.
But all that's getting beyond the current story, which is getting the Huamachuco plant up and
running. On this score another positive to report is that TON.v is already accepting and buying
in inventory from local miners and their reps. They've already closed on a dozen deals, with a
sizeable portion of those being repeat deals that can cover a lot of the ore they need to run per
month in one repeated delivery. The ore is already at the plant on those closed deals.
As for production, the company now plans first pour at some point in late September, which
would put it inside the current "before end 3q15" time window. That would presumably mean
the operation goes cash flow positive at some point in 4q15. As treasury stands, thanks to its
last round of cash raising (via gold warrants) it now has approx U$1m to get the ball rolling,
this cash aside from the capex funds still on hand to finish the plant construction and periphery
corporate affairs. Bottom line, treasury's fine.
As for the cash flow from operations itself, that's all about baking in your margin at the moment
you buy the ore from suppliers. Once TON.v knows how much gold is being delivered in the
tonnage of rock that arrives at its gates (it has its own well-equipped assay lab on site and
turnaround, from rock arrival to payment, is expected to be less than 24 hours in most cases) it
makes its offer on the ore and thereby virtually guarantees its margin. The attraction of TON.v
27

from a retail investor's point of view (i.e. me) isn't in the usual places you look for one in a
company's financials; it's not a balance sheet things and it's not a P+L thing, these toll milling
models are all about the Statement of Cash Flows, about getting the 'veolocity of money' up
and creaming off your slice of a stream of money and the faster that stream runs, the more
dollars move to the business's bottom line. I've done some preliminary work on the financials
that TON.v might show (which aren't for today) and though there are plenty of variables in the
model, the basic plan holds up and is very economically robust. To be honest, it's almost too
good to be true at the moment which is one of the reasons why I'm not presenting them today
(adage: if it's too good to be true in mining, it isn't).
Operationally, the company is all Andean people aside from CEO Clough, with the vast majority
of employees being Peruvian plus a handful of Bolivians in the mix (who've all worked together
previously). As in the case of Minera IRL (above today), I cannot overstress the importance of
local knowledge when in the mining sector in Peru. Communications lines, 'trusted faces',
friends in the right government office and the general air of providing jobs for Peru nationals
instead of hanger-on gringos such as myself. When this team such as that at TON.v turns up at
a meeting in Huamachuco centre and speaks not just the same language, but the same accent
and the same slang, it counts for a lot.
The permitting track is always a potential sticking point in Peru operations, so I got to hear
about the way in which it had got the necessary pieces of paper out of the government and all
that end seems in order.
On the buyers' side, TON.v cannot and will not do business with illegal mining people or
operations, which means it's going to be mostly doing business with those small operations that
are either already legalized by the government or in the process of legalization. Here lies one of
my worries about the model, because the number of small miners that are now officially "in
process" of legalization, or "on the formalization track" has shot up recently, because for the
small illegal miner, getting on the legalization track costs little and in one shot gets the
government and its threats of arrest and property confiscation off your informal back. So it's no
surprise to see a lot of small informal miners with the right type of preliminary paperwork in
their hands but this isn't going to last forever and at the moment, the full formalization track
that they need to go through is very expensive (to the point of prohibitive). Therefore, for the
time being we're probably okay but come the fine day when the next government of Peru starts
to insist that all those now in legalization process finish the paperwork else get declared illegal
again (and unable to supply the formal toll millers such as TON.v at Huamachuco) could be with
us. This is a latent concern of mine, it won't come into play for a while (perhaps a couple of
years) or might not be a worry at all, what with the Peru government's propensiity for kicking
trouble into the future (of the next government), but it's still a potential flaw in this whole toll
milling model universe.
I've been pencilled in as an invitee to the company's big rah-rah first pour in September, which
will be nice to see for the pretty photo but even better to see the mill and operation running
(and hopefully by then, smoothly). It also gives a chance to chat to locals and the key suppliers
of ore to the plant, all of which could turn out to bring vital information.
The bottom line to this company is that my interest is now ratcheted up even higher. The team
behind the project are real deal mining people, the type that you look in the eye and know
there's no BS going on. For sure yes, they'll PR their news and there's a veneer of marketing
when CEO Clough speaks, but what I like is the obvious sincerity when you ask him a question
and he's upfront and transparent with the answers. There are no dirty secrets in this company
that will come back and bite any investments and believe me, I've looked. I also like that they
have plenty of their own skin in this game, the clear drive and enthusiasm, plus of course the
robust look of the numbers once you do a few economic models. I like the location, it has first
mover status in this neck of the Peruvian woods and it's built the type of contacts you need.
And I like to see Andeans running the shop, because they're better than gringos at this stuff.
28

As things stand today, I'm not buying anything new which includes TON.v. It's as simple as
that, I'm good about adding a few Minera IRL because the price advantage that company offers
today isn't going to last forever, but until gold rebounds that's about all and I'll keep dry
powder dry. But TON.v isn't just a candidate any longer, it's high on the list. What I need to do
from here is:
• Check out the mill myself on an eventual visit
• Work the numbers (and I'm going to ask the company for more guidance on a few inputs
that I'm still not sure about).
• Consider further the limitations that its lack of size can bring to a company such as this.
After all, even at 350tpd and fully functioning, it's never going to be the biggest thing in
the world and the pool of potential investors is never going to be large.
• Watch the wires for development news.
Of all the toll mill development plays out there, this is the best I've seen and after meeting with
the team I'm doubly convinced of that. This is a stock to watch.
Conclusion
IKN322 is done, we end with bullet points:
• What I like about Standard Tolling (TON.v) is the business model, but what most
impresses is the team of people executing that model. Its small size may be the only
thing I have left to complain about and use as an excuse to not buy shares come
September and its media push once in operation.
• First Majestic (FR.to) (AG) has been my outright disaster trade of the last 12 months,
but thanks (if that's the word) to the final push provided by its latest set of mediocre
production numbers, by this time next week it will be but a bad memory. Some losers
don't worry me even if they're big percentage losses because the absolute amount of
cash lost is small. This isn't one of those, it's a 50%+ bath with plenty of dollars down
the drain as well. I'll try to learn from the experience.
• On the contrary, Lake Shore Gold (LSG.to) came out with solid Q2 numbers that were
right in line. We'll have to wait for costs info, but the growth here is both operational
and financial. I can still pick 'em on occasion after all.
• Minera IRL is the only thing I'm buying right now. After meeting with the CEO and then
hearing about it from around the big grimy town, it's clear that the company is in good
hands under CEO Benavides and his friends at COFIDE. Adding.
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
29

Footnotes, appendices, references, disclaimer
(1) http://finance.yahoo.com/news/first-majestic-produces-3-8-110000225.html
(2) http://finance.yahoo.com/news/first-majestic-produces-3-9-110000324.html
(3) http://www.tiemposur.com.ar/nota/91763-trabajadores-de-dos-yacimientos-mineros-atraviesan-una-delicada-
situaci%C3%B3n-
(4) http://finance.yahoo.com/news/novacopper-commences-arctic-deposit-pre-205300445.html
(5) http://incakolanews.blogspot.com/2015/07/focus-ventures-fcvv-write-up.html
(6) http://www.reuters.com/article/2015/07/10/us-china-copper-ahome-idUSKCN0PJ2DV20150710
(7) http://www.lefaso.net/spip.php?article65751
(8) http://gestion.pe/politica/hernando-soto-propone-hacer-comunidades-accionistas-mineras-2136954
(9) http://finance.yahoo.com/news/lake-shore-gold-produces-95-115825100.html
(10) http://www.expoarcon.com/
(11) http://www.gatoencerrado.net/store/noticias/92/92403/detalle.htm
(12) http://aminera.com/index.php/mineria-internacional/item/12216-estiman-en-5-millones-de-onzas-de-oro-proyecto-
minero-ollachea-en-per%C3%BA.html
(13) http://incakolanews.blogspot.com/2015/07/hudbay-hbm-hbmto-at-constancia-hows.html
(14) http://www.gatoencerrado.net/store/noticias/92/92404/detalle.htm
(15) http://finance.yahoo.com/news/hudbay-releases-first-quarter-2015-213828007.html
Stocks To Follow Closed Positions 2014
Closed in 2014 closed close price
Fortuna Silver FVI.to jan'14 C$2.80 23-dic-13 C$3.19 13.9% small ST trade closed
Rio Alto Mining RIO.to jan'14 C$2.06 07-jun-13 C$2.30 11.7% trading position finally closed
Network Expl. NET.v feb'14 C$0.01 22-jul-12 C$0.005 -50.0% position closed, did nothing
Tahoe Resources TAHO feb'14 U$13.10 08-abr-13 U$21.72 -65.8% short closed due to reality
Darwin Res DAR.v mar'14 C$0.10 14-jul-12 C$0.045 -55.0% tiny risk play dropped
B2Gold BTO.to mar'14 C$3.07 28-nov-12 C$3.35 9.1% closed to free up capital
Pretium Res PVG mar'14 U$5.38 22-nov-13 U$6.50 -20.8% short closed as port longer
Gold Res Corp GORO may'14 U$5.07 26-ene-14 U$4.12 16.7% took profit
Bear Creek Min BCM.v may'14 C$1.63 23-mar-14 C$2.05 25.8% Took profit, sm near-term win
Eco Oro Min. EOM.to aug'14 C$0.48 22-sep-13 C$0.26 -45.8% sold small loser to make room
True Gold TGM.v sep'14 C$0.395 02-feb-14 C$0.41 3.8% M&A won't happen, sold
Santacruz Silver SCZ.v sep'14 C$1.04 26-ene-14 C$0.86 -17.3% silver/M&A spec, rel. small
Timmins Gold TGD nov'14 U$1.38 09-abr-14 U$0.99 -28.3% failed trade, sell, raise cash
Kinross Gold KGC nov'14 U$2.90 20-oct-14 U$2.15 -25.9% V small trade, didn't work, chau
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.145 -48.2% lost China sponsor
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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
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
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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
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
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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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