IKN #336Premium

The IKN Weekly
Week 336, October 18th 2015
Contents
This Week: Buying some Sandspring (SSP.v) and may sell Timmins Gold (TGD), Friday selling
should now be bought, A fashionable metal.
Fundamental Analysis: NOBS report on Sandspring Resources (SSP.v).
Stocks to Follow: Overview, New Gold (NGD) (NGD.to), Timmins Gold (TGD) (TMM.to), Lake
Shore Gold (LSG.to) (LSG), Teranga Gold (TGZ.to) (TGZ.ax), Dalradian Resources (DNA.to),
B2Gold (BTO.to) (BTG), McEwen Mining (MUX) (MUX.to), True Gold (TGM.v), Focus Ventures
(FCV.v), Regulus Resources (REG.v).
Copper Basket: Overview, Hot Chili (HCH.ax).
Low Cost Producer Basket: Overview.
Regional Politics: Argentina: The last week.
Market Watching: Lake Shore Gold (LSG.to) (LSG) 3q15 production numbers, Minera IRL
(MIRL.L) (IRL.to): a brief update.
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
Buying some Sandspring (SSP.v) and may sell Timmins Gold (TGD)
The standard top-of-shop declaration when ther are portfolio moves going on. I plan to buy
some Sandspring Resources (SSP.v) next week and for more details, see the NOBS report
below. Also I’m still in two minds about it but may end up dumping my small holding in
Timmins Gold (TGD) (TMM.to) for no other reaoson than it’s trading like a dog again and the
optics aren’t great. More in ‘Stocks to Follow’ on that thought.
Friday selling should now be bought
It probably didn't escape your attention that we had a sharp drop in the share prices for mining
companies on Friday, which looked for all the world like profit-taking on a good week by those
who prefer to hold chash rather than shares over any given weekend. And it probably didn't
escape your attention that the very same thing happened the week before last too, with the
drop immediately bought back up on the first day of trading Monday (or Tuesday in Canada last
week).
I firmly believe hat the dynamic of the mining companies has changed (and have been banging
on the table since late August regarding that) but I'd also opine by the Friday selling action that
not everyone has latched onto that fact. Therefore you traders and sharp-fingered people might
want to look out for the same type of selling this Friday coming, because if the profit-take
pattern continues it's easy money to buy a few cheap shares of a frontline liquid stock on Friday
afternoon and sell them back to the market Monday morning. And hey, what oculd possibly go
1

wrong? ☺
This is, of course, one of those things that works right up to the moment that it doesn't. Worth
keeping in mind, all the same. Bottom line: Friday selling is no longer to be feared, the
changing tide of gold now flags it as an opportunity.
A fashionable metal
Gold's becoming trendy. Well, not quite true because it's always been that way and if you
disagree check which metal is most used in decent jewelry and the prices charged for the
workmanship involved. What we're seeing is Wall Street new found love for the shiny thing
which can come with all the condescending "Let's laugh at the people who stayed long all this
time" they want to add for all I care. That it's finally clicked that gold isn't going to follow the
directives of Goldman Sachs and drop under U$1,000/oz, or that they get a signal gold offers
trade profit potential on technicals as well as fundies is more than enough for me. These new
fat rich people do not need to buy into goldbug philosophy, let them scoff at the negative
interest rate argument or the inflation's good for gold argument or the fear trade being good
for gold or the love trade being good for gold. After all I've never gone in for that malarkey
either, hardcore goldbugs have no idea about how the world works.
Though what we're really seeing, the real change, is Wall Street's take on the mining
companies and that's something that's easier and more logical to understand. After frittering
away untold billions during the boom the smarter mining companies have got serious and now
truly care about making bottom line profits, instead of paying lip service to profitability while
throwing billions at questionable projects. The risk-taker CEOs are largely gone (Tye Burt, you
will not be missed) and in their places are beancounters from in-house or third party financial
departments who have turned around bloated companies and (oh wow!) answer to
shareholders...else be fired. The turnaround hasn't come in days or weeks, it's taken quarters
and years to turn this ships around but the precious metals mining sector now offers
mainstream financial analysts
companies with solid operations
and financials that will drive
profits to the bottom lines...real
cash profits...if gold does what
we think it's going to do and rise
on the new trend tide.
And strange though it may seem
to long-term mining analysts, the
generalist financial world cares
greatly about minor matters
such as net profits, solid balance
sheets, correct levels of debt and
leverage, financially prudent
operations, companies that cut
costs and look constantly for further efficiencies. Thus with the arrival of PM mining into the
21st century (at last) there's something to offer the world outside the mining community. And
GG, ABX, NEM, FNV, AEM have all benefitted from that.
The next stage is when those companies get around to replacing their reserves, because miners
mine out metal and it doesn't magically reappear in the ground once you do. Either that or they
finally admit that the ounces on their books are coming out the ground because they're not
economic. And that's why I'm starting to care once again about junior exploration stage stocks
that have been beaten into the ground, rather than concentrate most of my efforts on junior
producers with cash flow (MUX, LSG, BTO, TGZ etc). And that's why the next piece exists. Read
on, today’s main event is Sandpsring.
2

Fundamental Analysis of Mining Stocks
This week we take a look at Sandspring Resources (SSP.v).
NOBS report dated October 18th, 2015
Sandspring Resources Ltd (SSP.v)
Company Overview
Sandspring Resources (Canada: SSP.v, USA OTC SSPXF , Frankfurt SRX.f ) is an exploration
stage junior mining company operating in Guyana. Its flagship property is the Toroparu gold
project in the central zone of the country. Current share structure is as follows:
Shares out: 82.52m
Options: 3.86m (way out of money)
Warrants: 29.284m (at 27c and 30c)
Fully diluted shares: 115.663m
Current share price: C$0.20
Market Cap: U$16.5m
Approx working cap per S/O: C$0.05
All prices are in US Dollars unless stated. Forex U$0.80=CAD$1
Today's SSP analysis
As you’re probably aware, particularly if you read the ‘Regional Politics’ section in the Weekly
and the quarterly ‘Regional Risk Review’, your author has been warming to Guyana as a new
mining jurisdiction to consider seriously for junior and exploration stage exposure. Not only have
we seen Guyana Goldfields (GUY.to) successfully build its Aurora property with commissioning
to commercial production now underway, but the Troy Resources Karouani project (even
though it has its own internal company specific issues to work through) shows that Aurora is no
fluke, that getting community and government green lights to go mining in the country is a reality
these days. Guyana has been in the gold mining business for a long time on an informal level
but in recent years its large scale mining sector has come on in leaps and bounds. The country
has embraced the formal mining world, locals are keen for the employment opportunities it
brings and that’s good news for the type of company in which we junior speculators look to as
potential trades.
However, as my view on Nicaragua and the juniors who are working there demonstrates, you
still need a decent vehicle and project in order to take advantage of a favourable macro
environment for juniors, having a miner-friendly country is only useful when there’s a miner
worth consideration. Which brings us the Sandspring Resources (SSP.v), a company that’s
been on my semi-radar (as a LatAm juniors person) for many years. In most of that time it’s
been easy to dismiss SSP as a potential trade, to the point where I’ve made
several...errrr....ironic posts on the company over at the public blog. The remote location of its
flagship Toroparu project and its relatively low grade, despite its decent size, had made it what I
class an “easy pass”. What that usually means in real terms is that I slap a personal “avoid” call
on the stock and from that moment it’s one less thing to worry about, one less complication in
my life, one that gets me rolling my eyes and thinking “yeah, looked at that one, waste of time”
when it gets a mention from other people.
3

What has changed
It’s easy to keep on dismissing a junior once you, analyst and/or potential investor, have done
the DD and made a decision. Life’s too short, there are a lot of companies out there, most are
dogs, so once the dog is identified discard it and move to the next story. But in this case it’s
been worth my time to revisit SSP since getting two completely separate heads-ups on the
stock in the last few weeks (and both those people will be reading these words, so here’s a
quick line of official thanks, you know who you are). In a nutshell, the things that have changed
enough to make it worthwhile publishing on the stock are the following:
• Management changes: On this score there have been two events of note. The first is a
little long in the tooth now but it’s worth a mention, that in 2013 Silver Wheaton (SLW)
decided it liked the SSP story enough to invest some $14m directly and give a (non-
binding) pledge to fund up to U$140m in the eventual case that the mine gets built. The
$14m cash went to funding a full feasibility study (FS), which is ongoing. Then the
current topic, that during 3q15 SSP went through a corporate restructuring that brought
in some big name people at director level as well as a new injection of cash to treasury
that will allow the company to move forward with its plans for 2015 and 2016.
• Project economics changes: At the moment the market judges SSP and its Toroparu
project’s viability on the contents of the 2013 Pre-Feasibility Study (PFS) which uses a
rich looking U$1,400/oz gold price to get to a 23% IRR. These days SSP is also using
the same PFS project economics to note that at a more reasonable (but still higher than
spot) U$1,260/oz gold price, the IRR is framed at 17%. That’s one of those okay-but-
not-great numbers which I suppose leaves room for consideration but it’s still nothing
great, considering gold’s still well under that level. But on closer examination of the PFS
plus DD on what’s happening in Guyana today, it’s become clear to me that cost inputs
used by the 43-101 compliant PFS are out of date and there are plenty of costs that are
now pitched too high. For the time being, SSP is obliged to use the PFS data but when
the FS comes out to replace it we can expect improved project economics.
• Gold price changes: The obvious one and a statement that applies to all gold projects,
not just Toroparu, but the change in trend in gold prices we’ve witnessed since the
(approx) U$1,080/oz bottom during the Northern summer brings this type of stock into
play again.
• Country risk changes: Guyana’s reputation as a favourable jurisdiction for formal,
large-scale mining is now on the rise. Guyana Goldfields (GUY.to) and its Aurora
project has led the way in the eyes of foreign investment and that project has shown
that the government wants to work with mining companies and actively encourage
sector development.
• Share price change: In the end, this is the one that matters most. SSP has dropped to
a basement bargain price and from where it sits today offers a decent risk/reward
balance. Of course bad projects and bad companies go from low to lower to an eventual
zero, that’s not a risk to ignore, but the way in which SSP seems to have bottomed
recently and is showing signs of life for the first time in a long time, at the same time as
new management moving in and an upturn in the gold price, suggests that now is the
right time for a little speculation.
In short SSP is a company I passed on and ignored for years, but now there’s real reason to
reconsider its benefits. And to do that we now go into a few details on the company specific
items of that little list. This isn’t the place where I expound on the future of the gold price (you
should know by now that I’m reasonably bullish) or the benefits that Guyana is showing as a
mining destination (check out IKN334 for more). The rest of today’s note is about SSP and what
it brings to the table at a company specific level.
Management and shareholders
SSP is headed up (1) by one Richard Munson, who has been involved with the Toroparu project
ever since he was one of the team that acquired the land concession in 1999. But the most
4

interesting development happened in September 2015 (last month) when SSP folded PNO
Resources into its structure and in doing so brought in three new directors to the board. Those
people are Frank Giustra, Harry Pokrandt and David Laing and although some people may
recognize Pokrandt and Laing as names in the business as well, the one that catches the eye is
Frank Giustra. Be it good or bad, adding Giustra to your board of directors is bound to bring
press and sector attention. On a personal level, those of you who’ve followed IKN (weekly and
blog) over the long-term know that I
have...certain issues...with Giustra and he’s not SSP: Shares outstanding
100
my idea of an automatic reason to buy any (adjusted for 3:1 split Sept '15)
90
stock, but in this case I’d say his new
80
involvement is an overall positive. He’s
70
obviously interested in getting in at a ground 60
floor level on a large gold deposit that’s going 50
cheap and he’s putting a decent amount of 40
30
money on the line as well.
20
10
But back to the share structure and the changes
0
that came with the PNO merger. As part of the
September PNO merger and restructuring, SSP
shares were rolled back on a 3-for-1 basis,
which dropped brought the overall count down
from a pre-merger 144m. Then at the same time a new round of placement financing happened,
largely taken by Guistra, which brought the count up to today’s 82.52m shares out (plus a new
batch of warrants, as seen above). As part of the merger transaction Giustra spent $4.2m or so
and now owns 6.337m shares of the newly consolidated SSP as well as 5.615m special
warrants priced at 30c. That’s 7.68% of the issued and outstanding common shares of the
Company or 13.56% of the fuly diluted count, thanks to owning a large proportion of the
warrants. The other big holder of SSP today is the Crescent Global fund, which holds 5.56m
shares or around 6.8% of the count.
Financials overview
As usual in this section it’s a case of what to leave out, rather than what to include, because I’m
painfully aware I can bore you all to death with
financials. So the trick today is to zero in on
the key aspects of today’s corporate structure
and financial position at SSP.
Assets look like this (right). As the SSP
corporate deficit stands at over $118m as at
2q15 and total assets don’t even reach $35m,
it’s clear enough that SSP expenses its
exploration rather than capitalizes it. The
company has never taken a write down on
fixed assets, but with the carry at around
$25m to $27m (depending on forex more than
anything else) there’s no need to do so.
As for liabilities, the only big change all these
years came in 4q13 when SSP did its deal
with Silver Wheaton (SLW). That “Gold and
Silver Purchase Agreement” (GSPA) saw
SLW forward U$13.5m to SSP (another million
was added later to make it $14.5m) in order to
fund its ongoing work program, which in 2014
was essentially the work needed to move its
Pre-Feas study to Feas Study (FS) level. That
was called the “early deposit” on the larger
deal amount of U$140m, which SLW agreed
to give to SSP if the project worked out and
would be built.
5
21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 tse51q3 tse51q4
m S/O
source: company filings/IKN ests
SSP: assets
45
40
35
30
25
20
15
10
5
0
21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 tse51q3
$m
fixed other current
cash&ST
source: company filings
SSP: Liabilities
20
18
16
14
12
10
8
6
4
2
0
21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 tse51q3
$m
LT debt
current debt
source: company filings, IKN ests

Against that, SSP would provide SLW with a stream of 10% of the gold produced at U$400/oz
over the life of mine, plus 50% of any silver produced at U$3.90/oz (at this time silver is not part
of project economics). That’s a reasonable deal on the gold for SSP and in the event that the
mine gets built would provide perhaps 30% of the required capex. I have this one down as a
win-win streamer deal, which is good. The upshot to the SLW deal is that SSP now has a chunk
on its long-term liabilities. This isn’t something we should worry about for our
investment/speculative purposes, as it’s gong to stay on the LT for the indefinite future. What’s
more, if the mine gets to be built we’d expect SLW to add the rest of the cash pledged and SSP
would see its balance sheet expand rapidly.
From the balance sheet items, here’s the standard chart showing the evolution of the working
capital position. There are two events of worth in recent quarters, firstly the cash injection from
SLW in 4q13 which was quickly spent in 2014.
It wasn’t wasted though, as it went on the work SSP: Working capital
14
required for the FS that SSP has to deliver on
12
Toroparu by the end of 2016. Then the second
10
event we see is 2015, in which SSP has spent
8
the two quarters to date with negative working 6
capital but now, with the entry of Giustra & 4
Friends plus his cash, has an IKN estimated 2
working capital as at end 3q15 of $4.3m. This 0
-2
cash already has plans of use, with part of it
-4
earmarked for some of the work required to
finish and deliver the FS and another part on a
modest exploraiton program including some
drilling work that SSP announced (2) as started
just last week (by the way, I was hoping to get this report out before SSP started on any series
of NR announcements but it was not to be).
As for the work to get Toroparu to FS level, as already stated it’s part of the deal with SLW that
SSP delivers the feas by end 2016. As things stand, SSP has already done most of the work
but it deferred its budgeted plans this year due to a lack of cash. Now that there are more funds
in the treasury the company will begin to move them forward again and we can expect that FS
delivered at some time in 2016, but SSP will still likely need one more top-up financing to make
it through the whole of 2016 and publish the FS. That’s something anyone considering this
stock as a potential trade needs to put into the
debit column when making a final assessment.
As for day to day operations, the net loss chart
shows how money got spent more rapidly in
2014 and so far in 2015 SSP has (had to) rein
in the burn rate. Meanwhile below, this
expenditures breakdown chart shows where the
money’s gone. Aside from the obvious drop-off
in consultancy fees that were directly connected
to the advancement of the FS in 2014 SSP has
done what it can to reduce its background burn
rate and preserve capital (e.g. the salary
charges that ran between $1.1m and $1.3m are
now between $0.75m and $0.86m. That’s good
to see after many years of heavy spending from the company (all that time when this stock had
no interest at all for me...unlikely to be a coincidence).
6
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 tse51q3 tse51q4
$m
source: company filings, IKN ests
SSP: Net losses
6
5
4
3
2
1
0
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2
$m
source: company filings, IKN ests

SSP: Expenditures breakdown
6
5
4
3
2
1
0
7
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2
$m
operations
other
consulting
professional fees
salaries
source: company filings
The bottom line to the financials is that SSP is these days a changed animal. It’s passed the
first half of 2015 trying to do as little as possible in order to limp through on its reduced treasury
but now the new investment cash (Guistra et al) has arrived it can get back to doing real junior
exploration work. We’re unlikely to see it run bigtime expensive campaigns (in ground or in
newsletter pumps) because this age of austerity requires a new dynamic, but the resumption of
exploration, the newly announced modest drill campaign and the work to deliver the FS to the
market in 2016 mean that SSP will come out of hibernation and have things to tell the world.
The latest cash injection won’t be enough to get all the work done, I’d expect another round of
financing at some point (most likely in 2016 and most likely led again by Frank Giustra,
considering the way he operates). There’s the possibility that SSP’s share price runs higher and
the 27c and 30c warrants sitting in the fuly diluted share count get exercised, which would be
very good because they’d being perhaps $9.2m to treasury and provide all the cash required for
2016. If that happens, it would mean SSP had already run up and people buying in now would
be nicely in the green. Strategies, strategies...
The Toroparu deposit
We now move to an overview of the basic numbers of the Toroparu project. Unsurprisingly the
main source for the following section is the March 2013 pre-feas study and accompanying
resource/reserve calculation, which was delivered to SSP by third party consultants. You can
find the 43-101 on SEDAR and anyone considering SSP as a trade the way I’ve been doing is
strongly advised to download a copy and take a good look.
The place to start is with the resource table from the March 2013 pre-feas, it’s as good as any of
the others for an overview (there are pretty coloured ones in the corporate presentations if you
prefer):

The first thing to know about Toroparu is that at the base case gold price used in the 43-101 of
U$1,400/oz gold (or a 0.3 g/t gold cut-off) the deposit has 6.894m oz gold that grades 0.89 g/t. It
also has a small copper kicker, which will help to a certain extent with the project economics but
is an integral part of the mining plan because the gold is expected to be delivered in a (approx
21%) copper concentrate after milling and processing, so the actual cash the copper brings may
be small but the production of that metal at Toroparu will be a vital part of the whole mine
operation. Therefore on consideration of the main overview resource table we know that
Toroparu is:
• Big: 6.9m oz gold is plenty metal
• Low grade: It’s one of those deposits that (if it makes it al the way) turns into an open
pit operation and moves large amounts of rock.
• Calculated at U$1,400/oz gold, which was all pretty back in 2013 but here in our low
gold price environment is a potential project killer right here.
However, to get a better handle on Toroparu we need to scratch the surface a little and check
outcomes for underlying numbers it and its 43-101 PFS offer, starting with this table of reserves:
So when it comes to reserves, Toroparu boasts a decent 4.107m oz Au (plus its copper kicker)
at a slightly higher overall grade of 1.00 g/t Au. And for the record, the reserves are calculated
using a U$1,070/oz gold price so it’s fair to assume (as long as everyone’s done their jobs right)
that those 4.1m oz are still economic reserves today. Also it’s important to realize that the 4.1m
oz of the 6.9m oz gold in the resource at Toroparu is classified in the more confident Proven
and Probable reserve (P&P) categories and that’s because the project economics of the PFS
were based only on the P&P ounces, even though in theory SSP could have included the ful
M&I resource count (what you can’t do in a PFS is include inferred resources).
But the good stuff doesn’t stop there, because something else that sits behind the slightly off-
putting “6.9m oz gold at U$1,400/oz” headline resource calc is summarized by this chart, also
from the March 2013 PFS:
8

What we see here is a table showing how the resource size improves or deteriorates at different
gold prices and cut-off levels. The baseline used in the 43-101 was 0.3 g/t cut-off and
U$1,350/oz gold price and that gave the 6.89m oz of contained gold, but if we drop the baseline
gold price (or raise the gold cut-off, which is the same thing in project economics terms) we see
that there’s not much of a drop in the total contained resource.
For example, at U$1,070/oz gold (or a 0.38 g/t cut-off) we still get a pretty robust 6.546m oz
gold grading 0.98 g/t (plus its copper kicker). What this whispers is that Toroparu doesn’t
necesarily depend on that (in)famous U$1,400/oz gold price to be an economically viable
proposition. As a deposit it looks pretty competent and any eventual mine plan would be able to
pick around areas of relatively low grade if gold doesn’t move higher and still manage to run a
profitable operation and have bulk as well. Or
put another way, this chart (right) also from
the PFS shows that at lower gold prices, the
cut-off doesn’t shoot up very high and there’s
a workable mine still on offer:
To sum up so far, what we know about
Toroparu is that the 2013 PFS and resource
talks of a deposit that works (in theory at
least) at U$1,400/oz gold, but underneath
those numbers we have a deposit that uses
4.1m oz P&P instead of the wider 6.9m oz
M&I for its economic plan and can also
support a higher cut-off and still deliver the
lion’s share of those gold ounces profitably at
lower gold prices. Now that’s not a bad combination at all.
Project economics
We again use the 2013 PFS data as our baseline on Toroparu and ultimately SSP and to start,
here’s a simple but very useful table from the company’s latest corporate presentation (which,
by the way, is one of the better thought-through examples of presentations and is well worth a
look). In this we get the model base case in the central column (with that repeated U$1,400/oz
gold price) that offers up reasonable economics and a 23.1% IRR. Which is okay I suppose.
Then to the left, a reduced gold price case that uses U$1,260/oz and gives us a 17.6% IRR.
That’s probably not enough to get this sort of project built at face value (and by way of a
sidebar, I’m unconcerned about using a $2.93/lb copper price for the minor credit metal; yes’ it’s
higher than the current spot but Toroparu will have to fly on gold and gold alone, so a couple of
million dollars more or less than the blueprint due to higher or lower byproduct prices are neither
here nor there). Then to the right, the base case is again examined but this time with the SLW
gold stream changing the economics (the rest of the capex is assumed raised by equity). This is
interesting because it shows the non-dilutive input of the stream, this is a good deal for SSP on
9

the straight numbers. It gives us a slightly enhanced 28.7% IRR.
Those three cases put the basic arguments acrossand it would be fair to say that on the
evidence provided we again draw the conclusion that Toroparu apparently needs a higher gold
price to be a profitable and interesting project. However, we again need to point out things that
have chaned or things that can enhance the project economics.
1) Development capital will drop if more ounces are entered into the PFS/FS. Toroparu’s
economics in 2013 were based on the 4.1m oz P&P ounces, in theory the project could raise
those ounces at pre-feas stage to as much as 6.9m oz. That would bring the All-In cost per
ounce down significantly.
2) Capex may drop. We’ve seen wholesale price reductions for fixed asset inputs in the mining
industry since March 2013, the time the SSP PFS was delivered. Costs are lower across the
board, from plant to rebar to fuel labour and a dozen other things we could mention. At the
moment Toroparu’s capex (including contingency is slated at U$477m, that may turn out to be
very conservative in today’s market and when the FS is delivered) SSP can point at a lower
barier to entry.
3) Op-ex may drop. In fact I’m pretty sure op-ex will drop (not just ‘may’) because there are any
number of things that are cheaper these days. Labour once again is one we can mention, as
are things such as fuel prices, but I’d like to take a couple of specifics from the SSP PFS to
show direct tangible savings:
1) Sodium Cyanide is one of the main costs of production in the mine plan and the PFS
assumes a U$3,000/tonne price. That was a fair estimate back in early 2013, but now
NACN is half that price (or less) on the world market.
2) Power to the eventual mine was assumed to come from on-site generation. Now the
government of Guyana plan to build a hydroelectric power plant on the river just 30km
from the Toroparu project and SSP has been given first option on rights to power
supply. The company in its latest literature estimates that this alone could cut between
U$60/oz and U$80/oz from the operating cash costs for the mine. Here’s a paste from
SP literature to ram the point home:
Specifics aside, there is clearly room to shave costs form the original March 2013 PFS and to
get a global idea of that, this collection of three tables from the PFS give an idea of the
sensitivity to cost and price inputs for Toroparu.
10

For a few example from those table and numbers above, we can extrapolate:
• A modest 10% cut in capex improves the economics by 2.7%
• A perfectly achieveable (in my view) 20% cut in the final capex bill sees IRR economics
improve by a whopping 5.93%.
• Opex at 10% lower than the PFS would add 2.29% to the IRR.
• Or if you prefer, lop 20% off the capex and 10% from the op-ex and suddenly you’ve
counteracted every single percentage point of the project economics lost due to gold
not being at U$1,400/oz any longer.
Plenty of other hypotheses to draw from that little lot, too. There’s a point I’m trying to make
here, in the end a simple one, that SSP today in October 2015 is bound by the numbers in the
2013 PFS and has to use them in order to promote itself and show the world what it has to offer.
Those numbers at face value aren’t great, but on further examination it becomes clear that once
SSP has a new set of numbers to play with, ones that better reflect the nature of the project in
2015’s economic environment, there is going to be plenty of room for improvement. There is
your obvious line of marketing and promotional attack when the time comes; From the time the
Feasibility Study takes over from the 2013 PFS, SSP will be able to say to the world...
• We have a big deposit
• It’s in the right country that’s shown it’s miner friendly and wants to grwo its industry
• It’s going to be cheaper to build the mine than you previously thought
• It’s going to be cheaper to run the mine than you previously thought
• There’s more gold there than the plan takes into account
• We’re backed by Silver Wheaton, a big boy player in the world of metals
• People like Frank Giustra don’t plough in nearly $5m on a wing and a prayer
If gold moves further North, SSP is going to provide holders with an awful lot of upside leverage
in 2016. That’s what I think, at least.
What’s the share worth today?
We get to the $64,000 question and to be perfectly honest, this time I don’t have a definitive
answer for you. Yes I think it’s cheap and yes I think it has a lot going for it, especially when the
company gets round to replacing the old economic parameters of 2013 with numbers that better
reflect the reality of mining in 2015 in Guyana. But this isn’t going to be a finely tuned price
targeted stock her eat IKN, there are too many moving parts and a lot will depend on external
factors such as the gold price and potentially a return from the wilderness for the larger bulk
mining deposits out there...or at least the better ones in the bunch like this one that can boast a
(near) 1g grade. But what we can do set a few parameters, starting with this table that gives a
framework of what the contained gold ounces at Toroparu are being valued at in-situ:
Sandspring (SSP.v): In-situ calculation per ounce at various share prices
Share Proven & Probable Reserves M&I Resource at U$1,350/oz Au M&I Resource at U$1,130/oz Au
price (C$) (0.35 g/t cut off grade) (0.30 g/t cut off grade) (0.36 g/t Au cut off grade gold)
PPS 4.107m oz Au 6.894m oz Au 6.639m oz Au
0.15 $2.41 $1.44 $1.49
0.20 $3.21 $1.92 $1.99
0.25 $4.02 $2.39 $2.49
0.30 $4.82 $2.87 $2.98
0.35 $5.63 $3.35 $3.48
0.40 $6.43 $3.83 $3.98
0.45 $7.23 $4.31 $4.47
0.50 $8.04 $4.79 $4.97
source: SSP data, IKN calcs, forex CAD$1 = U$0.80
These are cheap ounces. Now for sure cheap ounces aren’t necessarily bargain ounces as a
deposit that’s never developed owns gold that’s worth precisely zero dollars and zero cents per
ounce. But as I believe SSP at Toroparu has a fighting chance of becoming a mine, even if we
11

assume a top dollar price target of 50c (150% higher than this weekend) and just the P&P
reserves of 4.1m oz (which, please recall, runs on a gold cut-off of U$1,070/oz) , the ounces are
being valued at U$8 apiece. Cheap, cheap, cheap.
In the case Toroparu becomes a mine, the most likely scenario is that a major or mid-tier buys
out SSP and funds the gig. If so, the eventual developer will have their eyes far more firmly
fixed on the development cost and capex of the deal (currently slated at U$125/oz) than the
buyout price of SSP.v (arguably 6.9m oz at 20c share price = U$1.94/oz. Buying the junior in
this case will be pocket change stuff and in essence, that’s the bet we junior exploreco
speculators can make on today’s price.
So it’s fair to say that if the gold market takes off and big deposits hat demand maybe half a
billion dollars of capex to become a mine get fashionable again there are outsized longer-term
gains to be made in this stock. But that’s very, nay extremely speculative in today’s market that
tends to serve up doses of deception at any given moment, so let’s consider something more
real-world via the SSP 2015 year-to-date chart (adjusted for the 3-for-1 split in September).
Staring at that chart (as I have been this week) and considering that a) the market isn’t reading
the potential at Toroparu very well and b) that SSP has been through a quiet period but now has
cash to do things, I see no reason why this stock can’t return to the 30c level of before (which
just happens to be Frank Giustra’s warrant overhang level, of course).
Discussion, conclusion, recommendation
This is a risky trade proposition, be in no doubt, basic logic dictates that 20c stocks are risky.
SSP at Toroparu has drawbacks as a project, which start with a near $500m price tag (at prsent
may drop a bit) to build a mine in the middle of nowhere, LatAm.
However, Guyana Goldfields have just done exactly that and built a mine in Guyana. And these
days Toroparu isn’t quite as isolated as it was before thanks to a hydro power project a few
clicks upriver. And the government of Guyana are
standout exceptions in the whacky world of Latin
America these days, a non-traditional mining
country that is not only talking the pro-mine talk,
but walking the walk too. As a cherry on the top of
the cake, locals actively want to get out of the dirty
and dngeorus artisanal-type mining business and
go work for a real company, as many connected
with GUY.to will rapidly testify.
When I passed the name of today’s focus stock on
to you the esteemed subscribers on Friday (see
appendix 1), volume that day was around eight
times average and SSP.v bucked the day’s trend
by finishing in the green. That’s all good, but it also traded rather too high at 22c and 22.5c for
12

much of the day and that’s probably too rich at the moment. Yes for sure things look a little
brighter in the sector but we’re not out of the woods yet, so I see no need to pay up for such a
speculative stock. Which is, of course, a nice way of trying to get you not to bid it up so I can get
a reasonable entry point ☺. For what it’s worth, I’m prepared to pay up to 21c at this stage.
The bottom line to SSP is that it’s my idea of a strong ‘Land Grab’ play and will join the other in
that sub-section of the ‘Stocks to Follow’ list this time next week. However, it’s a Land Grab play
with a difference because it also has a fully fledged Pre-Feas to its name and is on the way to
making that better via a full feasibility in 2016.
• I like the jurisdiction
• I like that Giustra and his pals have recently moved in.
• I like the upside potential from the anticipated cost reductions (both capex and opex).
• I like that bigboy SLW is waiting in the wings with a large slug of the capital.
So risky yes, but there’s reward to be had at this low price as well. If I can get in at 20c (which is
perfectly possible after any rush) then I’d likely take some profit off the table if I’m lucky enough
to see the stock at 30c later. That would buffer just about all the risk and from then the position
can ride out 2016. If gold does what we think it’s going to do and appreciate in the weeks and
months to come, I think this project will soon be viewed as seriously undervalued.
The IKN Weekly recommends Sandspring Resources (SSP.v) as a speculative buy. There’s no
formal price target because if the market runs, this could go up a lot. But I will take a portion of
cash off the table at 30c and cover any potential for reversal. SSP will be a ‘Land Grab’ sub-
section stock on the ‘Stocks to Follow’ list as of next weekend, assuming of course that I get my
entry at a price that suits.
End of Report
Stocks to Follow
Of the 15 open positions left open on the 'Stocks to Follow' list, eight stocks made weekly gains
(BTO.to, LSG.to, TGZ.to, MUX, LGN.v, DNA.to, TGM.v, REG.v), one stayed unchanged (IRL.to
suspended) six showed losses (TGD, SAM.to, FOS.to, ATM.v, LRA.v, FCV.v). Most of the moves
were small to either side, he best percentage gain came form Legend Gold (LGN.v up 14.3%)
but that hardly counts, it was a half cent addition on low volumes. The only real standout from
the pack was the 12.5% added by Dalradian Resources (DNA.to) which rallied just the way we
wanted it to rally after closing the placement the previous week. All in all, a reasonable week
for the portfolio, taking the trading consolidation and the Friday selling in its stride.
We currently have 15 open positions in our 'Stocks to Follow' list, our self-imposed maximum.
Five stocks are in the green, ten are red.
13

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$1.69 -22.1% Top Pick, 1st tgt $2.70
Metals Producers (in current order of preference)
Lake Shore Gold LSG.to buy C$1.07 07-apr-15 C$1.21 13.1% Added Aug, M&A tgt
Teranga Gold TGZ.to str buy C$0.57 15-feb-15 C$0.61 7.0% Added Aug, 83c tgt v cheap
McEwen Mining MUX hold U$1.09 25-jan-15 U$1.02 -6.4% Recovering from lows
Timmins Gold TGD hold (sell?) U$0.245 20-sep-15 U$0.257 4.9% New position, quick flip idea
Starcore Intl SAM.to spec buy C$0.12 10-jan-15 C$0.105 -12.5% Also "land grab", tgt 19c
Land Grab Stocks (in current order of preference)
Phoscan Chem FOS.to hold C$0.28 29-mar-15 C$0.275 -1.8% 36c/share of cash
Atacama Pacific ATM.v hold C$0.19 26-apr-15 C$0.14 -26.3% Spec buy, cheap adv proj
Legend Gold LGN.v hold C$0.085 01-mar-15 C$0.04 -52.9% Spec buy, v small, not working
Lara Expl. LRA.v spec buy C$1.15 08-apr-12 C$0.28 -75.7% 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$0.81 26.6% New tgt on financing Sep 20
Minera IRL IRL.to Susp. C$0.195 22-jul-12 C$0.075 -61.5% Trading suspended
True Gold TGM.v spec buy C$0.18 23-aug-15 C$0.185 2.8% Sm. pol risk hit sep'15
Focus Ventures FCV.v hold C$0.23 01-jul-12 C$0.145 -37.0% tgt 50c, phospate great value
Regulus Res REG.v hold C$0.30 06-apr-15 C$0.25 -16.7% Comm. Rels slow progress
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
First Majestic AG jul'15 U$10.51 10-aug-14 U$4.55 56.7% horrible failed trade
NovaCopper NCQ.to jul'15 C$1.05 09-apr-14 C$0.50 -52.4% no more Cu exposure, sm sell
McEwen Mining MUX aug'15 U$0.695 21-jul-15 U$0.92 32.4% Closed nearterm flip for win
Midas Gold MAX.to sep'15 C$0.39 21-sep-15 C$0.35 -10.3% Sm. trade idea that didn't work
New Gold NGD oct'15 U$2.18 23-aug-15 U$.3.05 39.9% trade closed, profit taken
2009, 2010, 2011, 2012, 2013 and 2014 closed positions in appendices below
Now for some notes on current basket stocks.
New Gold (NGD) (NGD.to): Position sold. I let Monday pass as the Canadian Thanksgiving
holiday (which I’d forgotten about this
time last week) may have made the
trading false, but took the U$3.05 on
Tuesday (which could have been timed
better) and closed the trade as planned.
A near-40% pre-commish gain in a short
period of time is a reasonable and
pleasant win. Even though my personal
trade wasn’t big in real money terms (they
go down and you bought too many, they
go up and you didn’t buy enough) it was a
satisfying one, because it was one of
14

those “right for the right reasons” trades that called the general scenario quite nicely.
As for the rest of the week, as anticipated NGD didn’t have much pop left and even dropped
under U$3 on Friday afternoon as those who sleep better over the weekends with 100% cash in
their accounts moved in and took their profits. Unless gold drops hard I strongly doubt NGD will
trade under U$3 for a long time in the week to come.
Timmins Gold (TMM.to) (TGD): May sell. There sometimes comes a point, especially on the
smaller and more speculative type of trades, when you can feel it going against you and things
aren’t working out quite the way you’d planned
and the wise course of events is to bail and let
bygones be bygones. I’m nearly there as
regardss TMM/TGD and the signals it flashed the
world last week, failing to rally with the rest of
the gang and then dropping when others
dropped, were pretty clear.
I’m probably going to give it another week, but
that’s not a certainty and it’s why I’ve stuck “may
sell” on the title line this weekend. My logical
side argues that we’re close to a production
number being announced for the 3q15 period
and the stock could rally on decent news.
However, the optics on that ar obviously not great right now so if needs be, I’ll bail without
warning (though I would send out a Flash update if so).
Lake Shore Gold (LSG.to) (LSG): We cover LSG’s 3q15 production NR in ‘Market Watching’
below, plenty of charts and things. Here we talk price action only and as this chart shows, even
though LSG couldn’t hold on the the best prices last week (traded at $1.23 and $1.24 on very
decent volumes) it’s the first time in three months that it’s closed above the C$1.20 level. And I
think that’s pretty good, especially for a week where the Q3 production NR came out and the
headline number didn’t quite make market expectations. The world wants profitable ounces, not
just ounces.
More on LSG in 'Market Watching' below.
Teranga Gold (TGZ.to) (TGZ.ax)
Kay Adams: Michael, you never told me you knew Johnny
Fontane!
Michael: Sure, you want to meet him?
Kay Adams: Well, yeah! Sure.
Michael: My father helped him with his career.
Kay Adams: How did he do that?
Michael: ...Let's listen to the song.
Kay Adams: [after listening to Johnny for a while] Tell me,
15

Michael. Please.
Michael: Well, when Johnny was first starting out, he was
signed to a personal services contract with this big-band leader.
And as his career got better and better, he wanted to get out of
it. But the band leader wouldn't let him. Now, Johnny is my
father's godson. So my father went to see this bandleader and
offered him $10,000 to let Johnny go, but the bandleader said
no. So the next day, my father went back, only this time with
Luca Brasi. Within an hour, he had a signed release for a
certified check of $1000.
Kay Adams: How did he do that?
Michael: My father made him an offer he couldn't refuse.
Kay Adams: What was that?
Michael: Luca Brasi held a gun to his head, and my father
assured him that either his brains or his signature would be on
the contract.
The Godfather, 1972
On October 14th the mystery of TGZ’s relative recent underperfromance was resolved, via the
NR entitled (3) “Teranga Completes Private Placement with New Cornerstone Investor to
Support Growth Strategy”. I thought using the verb “complete” in there was a nice touch too.
Because even though TGZ has no pressing need for a cash injection and not a hint of this deal
had found its way into the market, using it makes things feel as though it was the final stage of
a clearly flagged process that was obviously going through and nobody should ever be
surprised.
The basic information is that one David Mimran, bigtime business mogul in Senegal and CEO of
his family's Mimran Group company, has injected CAD$22.736m into the company by buying
39.2m shares in a placement and in the process taking a 9.9% stake in TGZ. Now from
nowhere TGZ has a "cornerstone investor" in Mimran, who of course said nice things about TGZ
in the same way that TGZ said nice things about him in the NR.
What we also know from this Northern Miner report on the deal (4) is some of the background
to Mimran, which includes plenty of business activity in Senegal and nothing to date directly
involved with mining. It also suggests that a link-up with Mimran Group (founded by his
grandfather) will "open doors for the company in Senegal and West africa in general.
Which can be accurately translated as "not seeing doors slam in the company's face". As noted
in the last couple of weeks in the Weekly, I've been a little mystified by the sudden
underperformance of TGZ shares after a year in which it's often popped and fizzed (both higher
and lower) on outsized beta to peer companies. All of a sudden TGZ went flat and seemed to
have been sat upon, stock price speaking. What we now know is that one of Senegal's most
influential business people wanted in to the company and wanted in to the tune of 10%. And as
soon as the deal was stuck at 58c, TGZ popped over 60c for the first time, touched 65c for the
first time since August (despite the decent gold price move) and stayed above 60c even after
Friday's selling.
Want it put simply? Mimran shook down TGZ. He probably did it in a very friendly way and
when an investor pumps over $22m into your treasury it's a long-term win-win, but I'm also
quite sure that if there weren't a "pending deal" with Mimran TGZ would have been plenty over
60c and nearer 70c before this week came around. we can also deduce that if TGZ hadn't
happily agreed to this new cornerstone investor then life would have become more difficult for
our Sengalese-based gold mining stock, not only in regard to some mystery person or persons
sitting on the share price.
Dalradian Resources (DNA.to): A positive reaction. DNA rallied the way good stocks rally
when a weight is lifted from its shoulders, we're back at a more acceptable 81c (though still a
decent whack away from my selling range of $0.95 to $1.00) and volume came in too. a nice
reaction. I know that at least a couple of IKN readers bought some of the 70c and 75c prices on
offer in the last couple of weeks, which means you're better at trading than I am.
16

B2Gold (BTG) (BTO.to): One baseline fact is that BTO finished up a single penny on the
week. Another is that over in Nicaragua, the company had good news last week when the strike
at the El Limon mine came to an end and workers went back to work (5) and some bad news
when the government (via the First Lady as spokesperson, no less) informed the world (6) that
its El Pavon project near Rancho Grande in the north of the country was being denied its
environmental permits due to community opposition and concerns that any mine would pollute
the local water supply (hailed as a victory by local priests and NGOs alike).
But the real takeaway from BTO last week is that neither the positive or the negative news from
1) its smallest mine and 2) a minor expansion project had much effect on the stock price action.
The reality is that BTO for about a day and a half finally looked like it was going to run higher
before being once again hit hard by Friday profit-taking and selling.
What will move this stock isn't news on Limon or Pavon, it's the production report due out
soon-ish (BTO is one of the last in the group of junior peers to publish normally, but it does
give us extra info such as cost parameters). And if we discount the outsized drop on Friday and
consider its dynamic during the week, the market is suddenly expecting good things from this
stock (which is for the first time in a long time). As soon as we get news on Q3 IKN will run an
update analysis on BTO, what with it being Top Pick here and your author's money-where-
mouth-is biggest holding in the portfolio.
McEwen Mining (MUX): So here we are, Rob McEwen has done his magic and the stock has
broken through the U$1 barrier. It now needs to
hold the line for “an extended period” (strange
how the NYSE rules on this are a little vague)
and the first step in the company’s recovery
plan will be cemented.
In other news, I’m a little late to this October 9th
note out of Mineweb (7) that covers MUX and
its battle to get back to U$1, but it’s worth a
mention here because a) author Kip Keen is
one of the smartest beat journalists out there
and b) I fully agree with this chunk of Keen’s
prose:
If McEwen hasn’t met self-made targets – he had hoped to get McEwen on
the S&P 500 by now – he hasn’t shot the company in the foot. When he says
the gold miner has exercised financial discipline it’s one of those cases where
a boilerplate statement applies.
McEwen Mining basically has no debt and has started churning out cash flow
in recent quarters and, as metal prices fell, long ago deferred major spending
on the El Gallo II project, one of two of its main development projects.
17

McEwen is a strong proponent of not investing in a project that falls under a
20% internal rate of return (IRR) using conservative assumptions. He’s
forthright on El Gallo II, a silver-gold project, and said it needs prices of silver
over $17/oz to make more sense to build.
So holding back has helped McEwen secure a strong balance sheet.
Balance sheet fool that I am, the underlying strength corporate vehicles is something I’ve been
quick to point to in the recent anlayses, not just the pro-MUX arguments on these pages. Glad
to see it’s not just me who recognizes the benefits in this balance sheet.
True Gold (TGM.v): Without setting the world on
fire volumes-wise (252k was its best day, that’s a
modest amount compared to the three month
average) TGM traded very nicely last week and
though it got caught in the Friday profit-take like
many others, 18c now looks like a baseline again.
The Burkina political risk issues have faded into the
background
Focus Ventures (FCV.v): Another quiet week for FCV. In other news, here’s a new Youtube
(8) of a video interview with company chair Simon Ridgway, who talks FCV and its
opportunities. It’s a reasonable re-cap of how things are and the pitch is clearly made.
Regulus Resources (REG.v): A decent percentage upmove, but on wafer-thin volume (just
two trades all week and 5,500 shares shifted) so in fact it means nothing at all. Ignore price
moves without volume in any stock, not just this one.
The Copper Basket
After forty-two weeks of 2015, The Copper Basket is showing a 28.97% loss to level stakes.
company ticker price 1/1/15 Shares out Market Cap current pps gain/loss%
1 Capstone Min. CS.to 2.03 381.95 240.63 0.63 -69.0%
2 Reservoir Min. RMC.v 3.96 47.55 209.70 4.41 11.4%
3 NGEx Resources NGQ.to 1.17 187.71 93.86 0.50 -57.3%
4 Nevada Copper NCU.to 1.65 80.5 81.31 1.01 -38.8%
5 Copper Fox CUU.v 0.135 402.96 76.56 0.19 40.7%
6 Amerigo Res ARG.to 0.27 173.65 57.30 0.33 22.2%
7 Hot Chili Ltd HCH.ax 0.16 333.11 46.64 0.14 -12.5%
8 Western Copper WRN.to 0.68 93.68 37.00 0.395 -41.9%
9 NovaCopper NCQ.to 0.58 60.15 32.48 0.54 -6.9%
10 Panoro Minerals PML.v 0.295 220.64 27.58 0.125 -57.6%
11 Regulus Res REG.v 0.35 56.39 14.10 0.25 -28.6%
12 Metminco MNC.ax 0.008 2650 10.60 0.004 -50.0%
13 AQM Copper AQM.v 0.06 141 4.94 0.035 -41.7%
14 Catalyst Copper CCY.v 0.305 31.41 4.87 0.155 -49.2%
15 Coro Mining COP.to 0.045 159.37 3.19 0.02 -55.6%
NB: HCH.ax & MNC.ax priced in AUD$, rest CAD$ Portfolio avg -28.97%
The week-over-week count shows five winners (RMC.v, CUU.v, HCH.ax, NCQ.to, REG.v), five
unchanged stocks (ARG.to, MNC.ax, COP.to, CCY.v) and five losers (CS.to, NGQ.to, NCU.to,
18

WRN.to, AQM.v) which as about as evenly split as you can get, but as the winning stocks
included three larger percentage gainers the
overall basket average improved once again 5% The Copper Basket 2015, weekly evolution
and is now under the 30% barrier...as if that 0%
were something good. The three big winners -5%
were Hot Chili (HCH.ax up 40.0%), -10%
NovaCopper (NCQ.to up 14.9%) and Regulus -15%
Resources (REG.v up 19.0%) and of those -20%
three, HCH.ax was the only genuine move on -25%
real volume and news. -30%
-35%
After the early October upmove, copper
prices consolidated last week in the at-or-
around U$2.40/lb level so rather than wheel
out the same hourlies chart, this week we offer up a dailies
view that takes us back into mid 2014 and the recent rise in
context of where copper’s come from.
I’d expect those of you who know (or at least have more
faith in) technical analysis will have opinions on the recent W
shape of price action in the quarter. What I get from it is a
higher low in October (which is good) but what’s starting to
look like a lower high than the one touched in mid-
September (which isn’t so good). I’m making no hard and
fast predictions on squiggly lines, but my hunch is that we’re
now in a range, U$2.30/lb to U$2.50/lb, that may last a long
time.
We move to our regular warehouse tracking section:
• Total world copper stocks rose last week and snapped the drop-streak. Tonnages went
up 7,316 metric tonnes (mt) (+1.5%) to finish at 502,857mt. The weak bull signal from
the last couple of weeks thereby disappears.
• Even worse for the bulls is the number from Shanghai, where SHFE stocks grew by a
hefty 17,415mt (+11.4%) to 170,349mt. That’s another tell on weak end user demand
in the key consumer country for our metal.
• LME stocks however dropped and went below 300k again, down 12,275mt (-4.0%) to
stand at 292,950mt this weekend. We’re back on talk of a carry trade between the two
main systems and perhaps it’s the SHFE making a real run at market domination once
again.
• Comex warehouses moved up again and as last week, it’s a case of “Hmmm, maybe
taking this number more seriously now”. The general thrust of Comex is as an indicator
of US metals demand (though obviously it’s way more complicated than that), so here’s
an indication to that all isn’t as good as you’d magine for the world’s lead economy.
Stocks moved up 2,176mt (+5.8%) to 39,558mt
Here's the Shanghai-only tracker, with the resumption of the trend over there on the far right.
People this is way too early n the Chinese cycle to see 200k being threatened. Bearish, yup.
19
ht4naj ht81 ts1bef ht51 ts1ram ht51 ht92 ht21 ht62 ht01 ht42 ht7nuj ts12 ht5luj ht91 dn2gua ht61 ht03 ht31 ht72 ht11
source: IKN calcs

Shanghai Futures Exchange Warehouse Stocks, 2014/2015
260000
240000
220000
200000
180000
160000
140000
120000
100000
80000
60000
20
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 ht62 ht9 dr32 ht6pes ht02 ht4tco ht81
Mt Cu
source: Cochilco
Hot Chili (HCH.ax): The biggest and best mover of the copper week, on Monday HCH.ax
announced (9) the discovery of four new porphyry copper targets on its properties in Chile,
news it called a “major
exploration breakthrough”
using “cutting-edge”
technology”. On reading
the NR it turns out that
HCH has run an IP survey
and identified four targets,
but since when has
something as prosaic
stopped a junior form
pumping itself hard? The
news picked up media
coverage (10) which helped
consolidate the gains, then
on Friday more news on a
deal with its Chilean partner CMP helped push it even higher. Again, the news on closer
examination is a non-binding memorandum of understanding, rather than anything worth the
paper it’s printed upon.
The sum total of last week is to say that HCH has decided to get up off its butt and promote
itself to the world, which is all well and good but the news isn’t that wonderful (yet) and the
word ‘dump’ will always rhyme with pump. Proceed with caution.
The Low Cost Producer Basket
After 42 weeks, the 2015 Low Cost Producer Basket is showing a 12.01% 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 12.72 15.33 -17.2%
2 Newmont NEM 18.90 528.08 10.03 18.99 0.5%
3 Barrick ABX 10.75 1164.67 9.13 7.84 -27.1%
4 Franco Nevada FNV 49.19 156.5 8.15 52.10 5.9%
5 Agnico Eagle AEM 24.89 214.12 6.25 29.20 17.3%
6 Silver Wheaton SLW 20.33 403.75 5.77 14.30 -29.7%
7 Kinross KGC 2.82 1146.2 2.46 2.15 -23.8%
8 Buenaventura BVN 9.56 254.19 1.99 7.82 -18.2%
9 Pan American PAAS 9.20 151.64 1.28 8.45 -8.2%
10 B2Gold BTG 1.62 926.68 1.20 1.30 -19.8%
all prices in U$, using NYSE ticker prices Portfolio avg -12.01%

This week we saw a split decision in this basket, which points to a consoidation week for the
stocks even with the decent rise in the price of gold (and its friends) Six stocks went up (GG,
ABX, NEM, FNV, AEM, PAAS), three went down (SLW, KGC, BVN) and one remained unchanged
(BTG), with the biggest moves logged by risers Pan America (PAS up 7.9%), Franco Nevada
(FNV up 6.5%) and Goldcorp (GG up 5.9%). The gap between our basket performance and our
benchmark GDX ETF dropped to a little over 1%.
The Low Cost Producer Basket: Weekly performance
30% and comparative to GDX control
20%
10%
0%
-10%
-20%
-30%
-40%
21
ts13ceD ht11 ht52 ht8 dr42 ht8 dr32 ht5rpa ht91 dr3yam ht71 ts13 ht41 ht82 ht21 ht62 ht9 dr32 ht6peS ht02 ht4tco ht81
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 ht11 ht52 ht8 dr42 ht8 dr32 ht5rpa ht91 dr3yam ht71 ts13 ht41 ht82 ht21 ht62 ht9 dr32 ht6peS ht02 ht4tco ht81
|
source: ikn calcs, NYSE/Nasdaq data
Regional politics
Argentina: The last week
It’s the final wek before the big election and thanks to Abel (11) here’s a list of all recent voter
intention polls, including their place of publication (notable bias against Scioli in the surveys
published by Clarin, which I’m sure is just coincidence). Put simply, if Scioli is above 40% it’s
unlikely to be an opposition media channel.

One of the keys to next week are the spoiled ballots or people who vote for no candidate,
because they do NOT count as valid votes and don’t make up part of a total percentage. This
will make Scioli’s prime job, that of getting 40% and being 10% ahead of the second plad
candidate, that much easier. If he manages it, he wins in the first orund and there will be no
need for a ballotage.
Market Watching
Lake Shore Gold (LSG.to) (LSG) 3q15 production numbers
I liked what I saw in LSG’s 3q15 production NR out on October 14th (12) and this section of
IKN336 sets out to explains why.
By comparing to the GDXJ as a benchmark for peers to the LSG five day price action in this
22

chart, we see how a rough 6% gap grew between the two lines on the morning of the NR. A lot
of people focussed in on the slightly low production number of 40,400 oz gold and the stock
lagged, but when the results got a better chewing, it became evident that things are in decent
shape.
The main reason for the lower than expected production was head grade, which at 4.0 g/t
average was lower than in previous quarters.
Lake Shore Gold (LSG.to): Au grade (g/t)
6 5.7
5.2 5.1 5.4
5 4.7 4.6
4 4.2 3.8 4.3 4.2 4.2 4
3
2
1
0
23
21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3
g/t
source: company data
But that’s a run of mine thing and I’m okay about such matters as long as the ounces produced
are profitable.
Lake Shore Gold: Gold production vs sales, per qtr
60000
55000
50000
45000
40000
35000
30000
25000
20000
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4
oz Au
Au prod
Au sold
source: company filings
As it happens, sales at 42,800 oz will help paper over the cracks and if we factor in the
average sales price of CAD$1,474/oz (remember that for LSG we stay firmly in Canadian Dollars
all through our analyses) revenues are set for around CAD$63.1m.

But the thing to like about the NR last week was the costs number, which came in low on an
Op. Costs ($604/oz) and All-In Sustaining Costs ($924/oz).
LSG.to: Op Cash costs and AISC, per qtr
1100
1000
900
800
700
600
500
400
300
200
100
0
24
31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3
C$/oz
op costs C$ AISC C$
source: company filings
What this in turn points to is low overall costs in absolute dollar terms for 3q15, which even
under my conservative estimes break down like this for the quarter:
LSG.to: Global costs breakdown
70
60
50
40
30
20
10
0
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 tse51q3
$m
Prod Costs deplet/deprec G&A Exploration other
source: company filings, IKN ests
Note that LSG factors exploration costs into its P+L, so with six rigs still running at the 144/144
Gap zone we expect them to stay in the same order as previous quarters. Even so, the costs
schedule looks very competitive and leaves room for profits to be made.
Once the revenues and costs projections are thrown into the spreadsheet, this chart is what
comes out the other end:
LSG.to: Quarterly Earnings Overview
90
80
70
60
50
40
30
20
10
0
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 tse51q3
$m
revenues Prod Costs
deplet/deprec gross profit
source: company filings/IKN ests
Gross profit is estimated at $16m for the quarter, which translates to $6.3m estimated for
operating earnings and $4.2m net earnings. Or simply, the lower revenues are expected to be
fully offset by lower absolute costs and LSG will stick in another very acceptable quarter’s worth
of financials, by my reckoning at least.

LSG.to: Op. Earnings
26 (with 4q12 and 4q13 impairments backed out)
22
18
14
10
6
2
-2
-6
-10
25
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 tse51q3
source: company filings/IKN ests
srallod
fo
snoillim
In a nutshell, despite slightly lower than expected production due to lower grade, LSG remains
profitable at the 3q15 gold price lcvels in Canadian dollar terms because it’s getting a
favourable deal from the Canadian dollar’s weakness. This augurs well for 4q15, as gold’s pop
will place more cahs directly on the bottom line of operations. It’s particularly encouraging to
see LSG make a profit while it aggressively explores and expands, too.
As we saw in the price chart above, as the week wore on LSG rallied nicely and deservedly so,
too. Due to its profitable operations even at the lowest of 2015 gold prices, its exploration
profile and geographical location, it remains an obvious takeover target for a major, most likely
Goldcorp (GG).
We’ll soon find out how (in)accurate my forecasts and estomates are as well, because LSG will
file its quarter on October 29th (13), less than two weeks from today and more than two weeks
before the limit date for TSX producer names. This is good.
Minera IRL (MIRL.L) (IRL.to): a brief update
As we await more declarations from the current Minera IRL board of directors regarding the call
for the EGM announced the previous week, things have basically been on hold between "Team
Hodges" and "TEam Benavides" this past week, though there has been a little jockeying for
position and strategic matters going on behind the scenes. So no big update this week, but
there are still a few snippets to throw your way
Jaime Pinto (non-exec chair) and Daryl Hodges (ex-chair) were in London all last week
canvassing voters in the capital and trying to get them on their side for the upcoming vote. It's
been particularly interesting to hear reports on the arguments they've been using in front of
larger shareholders of IRL in order to convince them, because the amount of plain lies they're
using is impressively large. I'm going to restrict details here, because that would give too much
away to the opposition. What I will say is that the truth, when revealed, will easily refute
everything they've tried to spin to key people in London. This Hodges guy isn't just bad at
business, he's plain dumb.
This week I sat down with one of the shareholders who make up the official group of
"Concerned Shareholders", the group who represent 10.6% of shares out who have called the
Extraordinary General Meeting. It was interesting because he voiced three main concerns that
he and his dissident group have:
1) They strongly oppose the "golden parachute" payment that Daryl Hodges would be ude
under normal circumstances if his consultancy agreement with IRL is terminated. According to
his calculations (with which I agree) if Hodges is terminated after November and is allowed to
do so by a "friendly" board he would walk away with over $850,000 in payments, bonuses and
severance. That's a crazy amount from a small company for a person who hasn't just done
nothing, but has negatively affected the company from his presence from start to finish. The
shareholders are strongly opposed to any payment to Hodges.

2) They want the EGM to take place as soon as possible, rather than at the limit date whic h is
December 8th (not late November as I incorrectly said this time last week). As it happens,
according to my latest informaiton the current board is pushing to hold the EGM on December
4th, which is unacceptable to the group of concerned shareholders not least because shares
would be suspended from trading until that date, i.e. the rest of October and all through
November. They're concerned (and rightly so) that one of the prime objectives of Team Hodges
continues to be to try and push the share price as close to zero as possible.
3) They are fully aware of how damaging Hodges and his wrekcing crew has been to the
company, both at a corporate level and in their relationship with the community of Ollachea. He
gave some specific indight on this which again I cannot share (no bullets handed to enemies at
this stage, people) but will become apparent in the weeks ahead. Although it's clear that I
harboured little doubt about the toxicity of Team Hodges before, that doubt is now at absolute
zero. What I can say is that the concerned shareholders also want the EGM to go ahead as
soon as possible so that once it's over and done, the company and its new board can start
cleaning up the mess that's been made with the community.
Update: The above was put together on Saturday October 17th. Today Sunday 18th I received a
copy of an official letter sent by the concerned shareholders to the company’s main broker
(Canaccord London) as well as the Peru stock market authorities and the current board of
directors. Here’s a copy of that letter, which is basically saying “no more delaying tactics, we
want the EGM as soon as possible”.
Lima, October 18 2015
Sirs:
Superintendencia del Mercado de Valores - Perú
Board of Minera IRL Limited
Cannacord-Genuity Limited
Point of Business: Convocation of Extraordinary General Meeting
Dear Sirs,
In accordance with the official announcement by Minera IRL Limited in the press
release dated 9 October 2015, a group of over 10% of company shareholders have
solicited from Minera IRL Limited (“the Company”), the convocation of an
Extraordinary General Meeting (“EGM”), with the aim of presenting special
resolutions for the consideration and if agreed upon by shareholders, the approval and
application of said special resolutions. This solicited EGM requires up front that the
Company and its subsidiaries not enter into any agreements or arrangements to
directly or indirectly dispose of or affect any of its businesses, assets or operations
until the realization of said EGM. The proposed resolutions are to vote in the EGM
for the removal of the current Board of Minera IRL Limited and to replace it with a
Board comprising six new directors.
To conform with Article 89 of the Law of Companies, Jersey, 1991, and with the
statutes of the Company, we hope that the EGM will be called and held within the
briefest time frame, and previous to the maximum of two months stipulated by law, as
we shareholders hold grave concerns regarding the conduct of the Company.
We consider that a prompt holding of the requested EGM will resolve the current
restrictions that face shareholders, unable to buy or sell shares of the Company due to
the trading suspension since 21 September 2015. As it stands, the value of our shares
is zero.
It is also necessary to consider that delays to the execution of the EGM will increase
26

the impact on fundamental aspects of the Company, such as the relationship with the
Community of Ollachea, where the flagship gold project is located, and with
COFIDE, the Peruvian state organization with which Minera IRL SA entered into an
agreement in June 2015 for bridging finance for US$70 million and which maintains a
mandate to allow financing for US$240 million.
We trust that all associated market institutions will comply with their responsibilities
in terms of the law and transparency in order to protect the rights of the shareholders,
the Community of Ollachea and finally the Company and its subsidiaries.
Awaiting your kind response,
Conclusion
IKN336 is done, we end with bullet points:
• Sandspring Resources (SSP.v) is a worthy addition to the ‘Land Grab’ section of the
‘Stocks to Follow’ list and I’m going to buy a few next week, with a limit price of 20c
set. I see no reason to pay up but if you do, expect the pop to be temporary.
• New Gold (NGD) turned out well, a nice trade and right for the right reasons. If it wee
only as easy as that all the time...
• I liked the Lake Shore Gold (LSG.to) (LSG) quarter numbers, even if the gold produced
figure was slightly light. Now for a decent production NR from B2Gold, please pretty
please nice Market Gods...
• The small trade in Timmins Gold (TGD) looks a bit sick and due to that, I may dump it
this week. Let’s see how it trades in the next couple of days before making a decision.
• All eyes on Argentina this week, for the rugby semi-final and for the Presidential
election. One eye on the Guatemala run-off vote, too.
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
27

Footnotes, appendices, references, disclaimer
(1) http://www.sandspringresources.com/s/management.asp
(2) http://finance.yahoo.com/news/sandspring-commences-exploration-program-toroparu-113000444.html
(3) http://www.marketwatch.com/story/teranga-completes-private-placement-with-new-cornerstone-investor-to-support-
growth-strategy-2015-10-14-91731626
(4) http://www.northernminer.com/news/billionaire-becomes-cornerstone-investor-in-teranga-gold/1003713321/
(5) http://finance.yahoo.com/news/b2gold-says-restart-operations-nicaragua-214612735.html
(6) http://finance.yahoo.com/news/nicaraguan-government-denies-permit-b2gold-001446421.html
(7) http://www.mineweb.com/articles-by-type/analysis/mcewens-battle-for-the-buck/
(8) https://www.youtube.com/watch?v=B_pbB7fF3zw
(9) http://www.hotchili.net.au/
(10) http://www.miningweekly.com/article/hot-chilis-shares-rise-on-target-discovery-2015-10-12
(11) https://abelfer.wordpress.com/2015/10/18/todas-las-encuestas-todas/
(12) http://finance.yahoo.com/news/lake-shore-gold-produces-136-130349098.html
(13) http://finance.yahoo.com/news/lake-shore-gold-announces-details-210500211.html
Appendix 1: Flash update dated Thursday October 15th 2015
Good evening, just gone Thursday 11pm local time and close enough to Friday to send this update.
As mentioned in the "free offer" post Wednesday evening...
http://incakolanews.blogspot.pe/2015/10/a-free-offer-from-ikn.html
...this is the heads up on the company to be recommended in Sunday's edition of The IKN Weekly, issue 336. I'll be
covering and recommending Sandspring Resources (SSP.v). Full details in the edition.
Please note that I personally do not own the stock yet and will not buy until next week minimum. I have a maximum
purchase price in mind, too.
Have a pleasant Friday.
Best, O
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
28

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
29

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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