IKN #340Premium

The IKN Weekly
Week 340, November 15th 2015
Contents
This Week: Paris, Will gold go under U$1,000/oz?
Fundamental Analysis: B2Gold (BTO.to) (BTG) 3q15 financials.
Stocks to Follow: Overview, Timmins Gold (TMM.to) (TGD), Legend Gold (LGN.v), Teranga
Gold (TGZ.to) (TGZ.ax), True Gold (TGM.v), Sandspring Resources (SSP.v), McEwen Mining
(MUX), B2Gold (BTG) (BTO.to), Lake Shore Gold (LSG.to) (LSG), Dalradian Resources (DNA.to),
Focus Ventures (FCV.v).
Copper Basket: Overview, Reservoir Minerals (RMC.v), Western Copper & Gold (WRN.to),
NGEx Resources (NGQ.to)
Low Cost Producer Basket: Overview, Barrick (ABX) & Kinross (KGC), Buenaventura (BVN).
Regional Politics: Peru: The 2016 Presidential elections are officially sanctioned, Brazil: A
week on from the Samarco tailings dam failure, Chile: Trying to be optimistic about copper,
Guatemala: A law is revoked and a mine is closed, Argentina: One week to the new President,
Chile: The rising tide of seawater, Segovia Colombia: Temperatures are lowered a little.
Market Watching: A quick Tahoe Resources (TAHO) (THO.to) snippet, Gran Colombia Gold
(GCM.to) 3q15 financials, Almaden Minerals (AMM.to) AAU check up, Sunridge Gold (SGC.v)
redux, Minera IRL (IRL.to) (MIRL.L): Team Hodges tries and fails to cause problems in the
community.
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
Paris
“He who contemplates the depths of Paris is seized with vertigo.
Nothing is more fantastic. Nothing is more tragic.
Nothing is more sublime.”
Victor Hugo
There are more important things to concern us all this weekend. Still, I’ve written the Weekly
and here it is.
Will gold go under U$1,000/oz?
No.
Next question?
1

Look, I apologize to the lonely few who occupy the smarter end of the Guild of Chartists (Gary
T, you’re several cuts above the field and have a permanent exemption) but the sheep-like
behaviour of people who can and do make 100% accurate predictions about the past via charts
are just as bad when they go Full Doom as they are when they’re Full To Da Moon Alice. For
sure they’ll trot out all the post-hoc reasons why gold’s going to weaken further (suddenly the
new buzzword is ‘Diwali’, which then feeds into earnest exchanges of how the rainfall that didn’t
make it to the Deccan Traps this year), but it’s no coincidence that the mediocres ALL go bear
at the same time and drag sector sentiment down with them. Let us be clear:
• The reason why gold’s been weak is that the dollar’s been strong
• The dollar got strong because of the US Jobs number
• The US macro improvement indicates that Janet will raise the base rate in December
• That move needed to be baked into gold.
• It’s now baked in.
• And that’s all.
Semi-OT, on some matters I agree with Rob McEwen and his folksy style of approaching the
gold market, on others he drives me a little mad. But when he said (1) last week that...
“If you are in Australia, Canada, the price is going up because of the foreign
exchange -- at some point, it will move in U.S. dollar terms”
...he was spot on. That the dollar popped a move at the same time as gold dropped one seems
to have been lost on the goldbug crowd. But unless the terrible events in Paris create a
temporary Euro weakness that makes the Greenback look artificially good for a day or so,
there’s very little true upside left in the USD (and it’s been notable that in recent times,
2

terrorism attacks however awful they may be have had little near-term effect on markets and
even less medium/long-term). And that’s why gold isn’t going under the feared and fabled 1k,
people.
Fundamental Analysis of Mining Stocks
B2Gold (BTO.to) (BTG) 3q15 financials
NB: Being the house Top Pick we tend to cover B2Gold (BTO.to) (BTG) pretty closely and as
BTO gave us lots of clues about things in its production NR three weeks ago, including the pre-
announced revenues figures, we did a fairly long piece on the stock. What follows is meant to
complement that note rather than supersede it, so please refer to IKN337 dated October 25th
for the production side of BTO’s Q3, here we’re going to concentrate on the financials.
Note: All prices in this analysis in US Dollars unless specified.
Thursday evening saw BTO report its 3q15 (2) and as per the blog that evening (3) I was good
about its contents on first perusal. As it turns out the market agreed because BTO managed a
decent reaction the next day which, even though it faded a little towards the close, is a real
achievement in a bear-controlled market that rewards precious lfew companies for good
numbers and whacks a lot more hard when they only dare to post in-line numbers.
In short, the flash on BTO’s numbers went down well with both myself (unimportant) and the
general market (more important), our job today is to consider why that might be.
The baseline of any operating mining company quarter is “What did the company make?” so
we’ll start there, with revenues costs and operating margin. Here’s the overview chart on that...
BTO: operating margins
180
161.0
160 154.9
138.1 138.9 136.5 139.3
140 128.7 129.0
120 120.9 122.6 120.3 114.9 122.4 115.6 116.9 116.3 117.0
102.0 98.3 99.0 103.5
100 91.9
86.9 87.5
80
60
41.2 44.0
40 34.0 35.7 36.0 37.1
20 22.0 15.9 18.9 23.3 19.6 22.9
0
3
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4
$m
revenues COGS Op. Rev
source: company filings, IKN ests for 4q15
...which shows revenues at $139.3m (that was pre-announced with the production NR three
weeks ago), COGS at $116.3m (which includes amorts/deprec/deplet), leaving operating
revenues at $22.9m.
This compares to the IKN house estimate for costs at $112m for the quarter (and op revs at
$27m approx), which means costs came in a little hotter than I expected.
Moving to the costs element (we thrashed revenues to death in IKN337), here is the cash costs
evolution chart which shows cash operating costs that came in at $584/oz and All In Sustaining
Costs (AISC) at $875/oz for 3q15.

U$/oz
BTO: Cash costs evolution and forecast
1600
cash op costs
1391
1400 AISC
1200 986 1039 1028 1091 1056
1000 946
875 850
800 638 634 720 732 646 701 677 584 600
600
400
200
0
4q13 1q14 2q14 3q14 4q14 1q15 2q15 3q15 4q15est
source: company filings, IKN calcs for 4q15
These results compare well to the previous IKN estimates for the quarter (made in IKN337) of
$631/oz and $977/oz respectively. The one that’s used as a close guideline for company costs,
AISC, came in $102/oz lower than our guesstimate.
WAIT? WHAT? Apparently, costs in real dollar terms came in $4.346m higher than the IKN
model, but costs in AISC per ounce came in $102/oz less on production of 124,371 ounces of
gold! What’s going on here? The answer, once again, is to note that AISC isn’t giving us a
particularly accurate idea of the real costs incurred at BTO (in much the same way as our
recent focus on companies like Primero (P.to) and Detour (DGC.to) have shown).
The difference between the COGS number and AISC/oz X 124,371 oz (i.e. the quarter’s
production) is $7.521m. That’s $60.40/oz right there, with COGS at the mines per ounce higher
than “all in” sustaining costs! That makes little sense, as AISC is supposed to be more inclusive
than the costs any given company incurs at its operations-to-mine-gate.
Then it’s almost certain that any monies spent at Fekola, still very much a development stage
project, isn’t included under AISC even though in real terms the development of projects is a
vital part of any mining company (they tend to run out of rock to process otherwise). Then
other grassroots type exploration, be it greenfield or brownfield at/near their current assets,
isn’t going to be included in AISC. Again a type of expense that doesn’t need to be included in
AISC, again something that any mining company needs to do in order to sustain itself in a very
literal sense. Add it to the pile of things that should be included in AISC but isn’t.
To add a few more numbers to the argument, if we run the same type of model on BTO that
we saw reader ‘BW’ do in his guest article on Primero in IKN339 last week the “Final Score
AISC”, that would include the company’s stated AISC, finance charges, DD&A, financing
charges, tax, then subtract the debt amortization, gets to $1,128/oz which gives us a better
explanation as to why BTO failed to make a profit on such a low “all-in” sustaining cost per
ounce number.
The bottom line to all this is simple enough: I don’t trust AISC to give me a good yardstick
measurement of any company’s costs. It’s too easy to hide expenses from this supposed “all-in”
number and make your costs profile look slimmer and more efficient than it actually is. For me,
taking the good old fashioned COGS number in absolute dollar terms and comparing against the
amount of money the company (in this case BTO) needed to spend in order to go about
business in any given three month period makes more sense.
But now the good news (or at least the “less worse” news): In fact even though that BTO “Final
Score AISC” of over U$1.1k/oz looks high, it’s pretty competitive when you consider that’s
everything, really everything, the company needs to declare to be “all-in” on their costs (give or
take, for what it’s worth I couldn’t pin down about $4m of spend in the BTO books but that’s
4

not a bad approximation) and that BTO took a small impairment and also front-loaded its tax
burden during 3q15. If you want to consider the overall costs compared to what we expect
from the company in 4q15, it’s going to be just fine I think.
Anyway, back to the imperfect benchmark of cash costs and AISC per ounce as reported by
BTO and as seen on the above chart’s right-hand side, I’ve adjusted my estimates from a
previous (IKN337) reasonable but conservative U$631/oz for cash operating costs and
U$977/oz for AISC for 4q15, numbers that would bring BTO in at the top end of its guidance for
2015 for all-in sustaining costs ($950 to $1,025 per ounce). With the apparently decent 3q15
costs numbers, I’ve updated to bring the profile lower and now if my updated forecast comes to
pass ($600/oz and $850/oz respectively) it would frame the company’s overall 2015 AISC at
U$960/oz, which would be at the bottom end of current company guidance (AISC $950 -
$1025). I think that’s a perfectly gettable number, but it also relies on the way in which AISC
can be used to mask the true amount of costs being incurred by any given company (again, do
yourself the favour of re-reading last week’s guest article for more ideas on that (4). Therefore
and for me, I’ll be more interested in seeing BTO hit my COGS estimate number of $117m than
some fancy-dancy AISC that wows the audience but fails to deliver cash to the bottom line.
Enough about costs, time to move on to operating results and this chart shows the 2.4c/share
op revenue returned by BTO in 3q15. That
was in fact 0.5c lower than my house estimate
from three weeks ago, but I still expect BTO
to deliver a much improved quarter in 4q15,
that estimate stays at nearly 5c/share.
As for adjusted net earnings, BTO returned a
net loss but really, I’m not going to sweat this
one. The loss was all about the small
impairment charges and extra tax and the fact
that a growth oriented company didn’t return
bottom line profits in a given quarter is never
going to worry me too much, as long as
there’s a reasonable operating profit to point
at. Here there is, we’re good, move on.
BTO: Adjusted net earnings
40
30
20
10
0
-10
-20
-30
5
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4
BTO: Operating Revenue per share, per qtr
0.07
0.06
0.05
0.04
0.03
0.02
0.01
0.00
$m
source: company filings, IKN ests for 4q15
And before we leave P+L matters and visit the balance sheet items, I want to repeat this
overview production chart from IKN337 of quarterly production plus estimates for 4q15.
31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4
$/share
source: company filings, IKN ests

BTO: gold production by mine
160000
150000
140000
130000
120000
110000
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
6
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4
oz Au
Otjikoto prod
Masbate prod
Limon prod
Libertad prod
source: company filings, IKN ests for 4q15
One of the many production-based visuals from IKN337 piece, it’s here as a reminder of what
BTO has to do in order to make its updated guidance number for 2015. In fact to make the
bottom-end of its guidance range for 2015 (500k) BTO will have to deliver 139k and bits in Q4,
but I’ve rounded that up to 140k for a real world target.
And let’s be clear; last week BTO ratified its 2015 guidance numbers at half way through the Q4
period. There’s no excuse for a miss here, even though the target is much higher than its
previous record production quarter. As a result we expect BTO to pull out the stops and deliver.
If not, it’s going to look pretty bad in my opinion.
Balance sheet items
No chit-chat, we dive straight in and assets look like this, dominated as usual by its mine asset
valuations. BTO took a small impairment in 3q15, but it hardly shows against the main total.
BTO: assets
3000
2500
2000
1500
1000
500
0
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4
$m
fixed
other current
cash&ST
source: company filings, IKN ests for FY15
If we isolate current assets by taking away that big fixed number...
BTO: Current assets
450
400
350
300
250
200
150
100
50
0
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4
$m
other current
cash&ST
source: company filings, IKN ests for FY15

...we get a better picture of liquidity at BTO. I wouldn’t call this a critical situation, not yet
anyway, but equally I wouldn’t want the company cash pile to go down any further from this
quarter’s $86.785m number. We do expect free cash flow from the mines to run into the
treasury this Q4 quarter, hence the forecast for slightly taller bars on the right. BTO needs to
deliver on this.
Liabilities stack up this way. The main lump here is still the financial debt, which is mainly the
$258m senior facility and the $175m
revolver. It’s worth mentioning here that
BTO has only drawn half of its total revolver
facility so far (4350m) and then the debt
can be extended to $450m as long as
certain conditions are met. This is going to
be the source of capex cash to build Fekola,
so that long-term debt is going to get
bigger before it gets any smaller.
Working capital is now at a new low of $111.2m.
BTO: Working capital
350
300
250
200
150
100
50
0
7
31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4
$m
source: company filings, IKN ests for FY15
We expect this to reverse in 4q15 (in fact it has to in order to keep me on board this stock, see
IKN337 for more) as Otjikoto removes its final burdens from the corporate model and generates
decent net cash, plus the Nicaragua operations get back into full order.
Book value isn’t expected to move much, not until Fekola’s ready at least.
BTO: Book value per share, per qtr
3.00
2.50
2.00
1.50
1.00
0.50
0.00
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4
BTO: Liabilities
800
700
600
500
400
300
200
100
0
$
source: IKN calcs from BTO data, ests
As for shares out, we’re now at 926.918m. Future modelling assumes that number continues.
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4
$m
LT debt
current debt
source: company filings, IKN ests for FY15

BTO: Shares outstanding
1000
900
800
700
600
500
400
300
200
100
0
8
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4
m S/O
source: company filings/IKN ests
The bottom line to the balance sheet position isn’t that I see BTO under pressure all of a
sudden, but there’s a certain look of decadence about the numbers, a slight fading away from
fully healthy to a slight cough and the beginnings of a temperature that could be a real illness.
The key metrics to watch in 4q15 will be cash and working capital, because we want to see the
operations drive profits into treasury and improve things in real terms, no matter whether BTO
draws on its remaining revolving credit agreement or not. I’m aware that BTO needs to spend
on Fekola, but it also needs to show present day corporate health. If we assume the balance
sheet has just seen the back of its weakest quarter then everything’s going to be all right. If
not, it’ll be another place for more active concern.
Discussion and conclusion
Three weeks ago I concluded the analysis on BTO by saying that for me at least, 4q15 will be
the put-up-or-shur-up quarter, the one in which I decide whether BTO is truly deserving of its
Top Pick status here at the Weekly. After digesting the numbers since my first pass reaction on
Thursday, that call is reiterated today. I was reasonably happy with what I saw at first, that
eyecatching cash costs per ounce number had seen a decent drop, but when I got more nitty
and gritty it turns out that AISC number is another one that looks under-reported. True costs
were slightly higher than my expectations and while that isn’t a problem, it’s something that
may have been exaggerated by good old Mr. Market in the initial positive reaction to BTO’s
figures on Friday morning.
But still the stock did well enough Friday, late-day sell-off or not, so there must be something
here to really like and on consideration that’s going to be less about the past, more about the
future. We’ve been flagging 4q15 as having the potential of being a blowout quarter for quite
some time (indeed it’s one of the main reasons I jumped the gun and promoted BTO to Top
Pick too early, ugh) and with the company guidance continuing to point us at a very decent
Q4’s worth of production (140k or so) I think the market has finally woken up to the fact that
BTO’s thin days are now over. Just a darned pity I bought too soon.
The bottom line to the BTO numbers: 3q15 was fine without being great, my enthusiasm
waned a little once I’d got into them and saw the money they’d spent that didn’t make it to that
flashy AISC/oz number in the headlines. But the stock rallied and correctly in my opinion on
expectations for the current quarter, rather than the numbers just posted, because it’s setting
up to be a good production period with Libertad back on track, Otjikoto now running full tilt and
a Masbate that tends to do its best numbers in the last quarter of any given year. BTO now has
to deliver on that promise because if not, I’ll either drop BTO from Top Pick and cut my position
size down or just plain sell ‘em all and be done. So yes, it’s still all about Q4.
Stocks to Follow
The rebound came, which is good. Only time will tell how deadcatty the bounce turns out to be,
but after weeks of relentless pressure on the portfolio stocks and the sector in general, I’ll take

the relief. Just one of our open positions registered a loss on the week (FOS.to) and another
four were unchanged (SAM.to, DNA, IRL.to suspended, REG.v). Which leaves nine winners and
I’m not going to list them all, but the biggest and best move came from Teranga Gold (TGZ.to
up 12.0%), which pleased me a lot considering I managed to add an average down a little early
week. The 5c added by BTO.to on Friday’s results-driven rally was a good thing, too.
With the loss of TGD and LGN.v from the open positions we now have 14 open positions in our
'Stocks to Follow' list, one below our self-imposed 15 name maximum. Three positions are in
the green, the others are in the red.
company Ticker this week Avg Price Reco date Current PPS Gain/Loss% Notes
TOP PICK
B2Gold BTO.to STR buy C$2.17 12-sep-14 C$1.42 -34.6% Top Pick, good 3q15
Metals Producers (in current order of preference)
Lake Shore Gold LSG.to buy C$1.07 07-apr-15 C$1.05 -1.9% Added Aug, M&A tgt
Teranga Gold TGZ.to buy C$0.55 15-feb-15 C$0.56 3.6% 3 purchases, like under 60c
McEwen Mining MUX hold U$1.09 25-jan-15 U$0.87 -20.2% looking cheap again
Starcore Intl SAM.to hold C$0.12 10-jan-15 C$0.09 -25.0% Also "land grab", tgt 19c
Land Grab Stocks (in current order of preference)
Phoscan Chem FOS.to hold C$0.28 29-mar-15 C$0.27 -3.6% 36c/share of cash
Sandspring Res SSP.v spec buy C$0.195 18-oct-15 C$0.18 -7.7% New buy, 30c 1st tgt
Atacama Pacific ATM.v hold C$0.19 26-apr-15 C$0.15 -21.1% Spec buy, cheap adv proj
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.25 -78.3% 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$0.71 10.9% New tgt 95c to $1 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$0.205 13.9% 25c to 30c sell price tgt
Focus Ventures FCV.v hold C$0.23 01-jul-12 C$0.12 -47.8% tgt 50c, phosphate great value
Regulus Res REG.v hold C$0.30 06-apr-15 C$0.20 -33.3% 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
Legend Gold LGN.v nov'15 C$0.085 01-mar-15 C$0.035 -58.8% tiny "land grab" idea, failed
Timmins Gold TGD nov'15 U$0.245 20-sep-15 U$0.15 -38.8% small near-term loser
2009, 2010, 2011, 2012, 2013 and 2014 closed positions in appendices below
Now for some notes on current basket stocks.
Timmins Gold (TMM.to) (TGD): Position closed. And of course the stock rallied 20% or so
on Friday, long after I’d taken my lumps and dumped the position, to climb to 18.4c USA
(CAD$0.24). Which is the type of cherry on the top of a failed trade you need to expect.
9

Harrumph. TMM had some news on its drilling program at Ana Paula (5) and the numbers were
in line with previous assays, but it’s all too late for me. Badly timed or not, I’m glad to be out.
Legend Gold (LGN.v): Position closed. I cannot tell a lie, LGN is “position closed “as of this
week on The IKN Weekly but it’s going to take a while longer for me to get rid of mine, because
it’s gossamer-thin trading and there’s no rush to get out. My position truly is tiny (it started very
small in cash terms, got even smaller) and there’s no haste here for the cash, I’ll exit slowly and
calmly. But it’s been a failed trade basically since it started, the “Land Grab” philosophy for
2015 hasn’t taken off yet (though as a theory I think it’s still perfetcly valid) and it’s time to
clean away the brushwood.
Teranga Gold (TGZ.to) (TGZ.ax): Added. It turns out that the 50c close of last weekend,
the one I was moaning and complaining about,
was the lowest point in this stock in recent times
and apart from very early on Monday the best
price of the week was 52c. I took that price and
got my number (very nearly, close enough) back
down to a 55c cost average. And because of that
and the Friday rally we can boast a little extra
green on the screen this weekend, my TGZ is
one shiny penny to the positive now.
This stock represents tremendous value at its
current price. Financially solid, organic growth in
2016, costs under control. Any rise in the gold
price goes straight to the bottom line.
True Gold (TGM.v): In some respects I managed to call this one right last weekend,
considering anything under 20c a real bargain price now. Then again, I honestly thought it
would rally harder and higher than the 20c and 21c generally available all week, even with the
soft gold price. As a first stage recovery from the dump it’s ok, but it’s 25c and 30c we’re after
here, not 20c.
Sandspring Resources (SSP.v): Volumes continue to be very quiet. That’s all.
McEwen Mining (MUX): We ended last week’s anal ysis on MUX with these words:
Summing up, MUX gave us a largely in-line quarter which might not have
wowed the market, but it’s more than enough to keep me in as a holder. I
can’t help thinking the company is setting itself up for a very strong Q4, as
well. But when it comes right down to it, MUX will rise and fall on the tide of
the gold price, no more no less. A decent way to play the metal, but only one
of many.
That played out last week, except for the
way I assumed the gold price to be the
driver and it wasn’t. In fact gold bullion
was a (slight) net loser on the week but
the stocks managed to avoid that
inconvenient truth and rally (GDXJ up
2% or so), with MUX outstripping that
performance and up 6% week-over-
week.
MUX is still under the difficult looking
U$1.00 line and time’s running out for
Rob McEwen to so something about that
10

fact, else risk losing MUX’s full US listing (frankly it’ll hurt his ego more than anything else). But
last week’s performance was promising enough and if gold rallies the way I fully expect it to do,
MUX will be back in the 90s at least.
B2Gold (BTG) (BTO.to): For once BTO did better than the rest, even with that late day
Friday selling that took the gloss off the final
score. Still, nobody can roll back the strong
volumes on Friday that came on the back of
the very decent financials filed that morning
(see above).
BTO has always been a bit of a volume
monster, needing buying interest surges in
order to move substantially higher. The way
in which it traded Friday suggests that the
will-sapping downwards trend has been
broken at last.
Lake Shore Gold (LSG.to) (LSG): Reader “HA” and I were watching LSG’s tape pretty closely
last week and agreed that even though it didn’t seem to outperform the sector, there’s real
accumulation going on. This five day chart (15 mins) that pits LSG.to against the GDXJ ETF,
which shows how the stock sold quite sharply at the end of the week but aside that, went along
with the market. But the volumes were great considering the lack of love the sector has at the
moment and that’s the thing here.
Somebody with deeper than average pockets likes LSG enough to want to buy all they can at
current levels. That’s my hunch and I found it notable that HA, a man who follows the market
very carefully, picked up on it too.
Dalradian Resources (DNA.to): DNA filed ts 3q15 numbers on Friday evening and there
were no big surprises in them. Cash at bank as at September 30th was $24m or so, but the real
change happened a few days after as the Subsequent Events section noted, “On October 7,
2015, the Company closed a bought deal offering of 50,312,500 units including fully exercised
over-allotment units, at a price of $0.80 per unit, for gross proceeds of $40,250,000. Each (etc
etc)...”. While over at the MD&A, the “going forward” section is the most interesting and
confirms what we know already, that a) they’re aiming for the Feas Study for the second half of
2016, that they have plenty of infill drilling to do, that they’re going to use that cash etc etc.
Also of some interest may be the bang-up-to-date share count:
As at November 11, 2015, and following on the closing of the October 2015
Financing, the Company has 214,202,705 common shares, 73,655,477
warrants, 8,735,000 options, and 1,070,000 RSUs issued and outstanding.
This amounts to 297,663,182 common shares outstanding on a fully-diluted
11

basis.
So now you know.
Focus Ventures (FCV.v): Friday saw FCV announce (6) the successful closure of its dilutive
but necessary financing round:
Focus Ventures Ltd. (TSX VENTURE:FCV) is pleased to advise that its previously announced
non-brokered private placement financing was oversubscribed and the Company has now closed
the financing with the issuance of 18,672,000 units at $0.125 per unit, for gross proceeds of
$2,334,000. Each unit consists of one common share and one warrant entitling the holder to
purchase one additional common share of the Company for five years from closing at $0.15 per
share in the first three years, and at $0.20 per share in the fourth and fifth years.
FCV now has 116.6m shares out. And it’s darned cheap today, that either despite or because of
this low-priced financing deal. As for getting the price back up to where it deserves to be, we
can look for FCV to complete its studies and make the case for either the Direct Application
production or the larger mine along the lines of next door’s Vale operation (Miski Mayo), but the
real catalyst will be when it secures JV partner. That day could see the stock quadruple
overnight from these levels, the only problem is knowing which night it’ll be.
The Copper Basket
After forty-six weeks of 2015, The Copper Basket is showing a 34.85% loss to level stakes.
company ticker price 1/1/15 Shares out Market Cap current pps gain/loss%
1 Reservoir Min. RMC.v 3.96 47.55 204.47 4.30 8.6%
2 Capstone Min. CS.to 2.03 381.95 175.70 0.46 -77.3%
3 NGEx Resources NGQ.to 1.17 187.71 88.22 0.47 -59.8%
4 Nevada Copper NCU.to 1.65 80.5 63.60 0.79 -52.1%
5 Copper Fox CUU.v 0.135 402.96 56.41 0.14 3.7%
6 Amerigo Res ARG.to 0.27 173.65 50.36 0.29 7.4%
7 Hot Chili Ltd HCH.ax 0.16 333.11 41.64 0.125 -21.9%
8 NovaCopper NCQ.to 0.58 60.15 31.88 0.53 -8.6%
9 Western Copper WRN.to 0.68 93.68 31.38 0.335 -50.7%
10 Panoro Minerals PML.v 0.295 220.64 30.89 0.14 -52.5%
11 Regulus Res REG.v 0.35 56.39 11.28 0.20 -42.9%
12 Metminco MNC.ax 0.008 2650 10.60 0.004 -50.0%
13 Catalyst Copper CCY.v 0.305 31.41 5.97 0.19 -37.7%
14 AQM Copper AQM.v 0.06 141 5.64 0.04 -33.3%
15 Coro Mining COP.to 0.045 159.37 3.19 0.02 -55.6%
NB: HCH.ax & MNC.ax priced in AUD$, rest CAD$ Portfolio avg -34.85%
The overall basket average dropped another 1.44% with lots of bigger volume losers, though it
could have been worse for the overall basket
because a couple of lighter-traded stocks 5% The Copper Basket 2015, weekly evolution
managed to buck the trend on a few 0%
thousand shares traded and prop things up. -5%
There were four winners (PML.v, HCH.ax, -10%
NCQ.to, CCY.v) and among those Panoro -15%
managed to pop to 14c from 10c, a 40% -20%
gain, plus Catalyst Copper (CCY.v) moved up -25%
2c, or 11.8%. Three others were unchanged -30%
(REG.v, MNC.ax, COP.to) which leaves seven -35%
downers (CS.to, NGQ.to, RMC.v, NCU.to,
WRN.to, CUU.v, ARG.to, AQM.v) that include
12
ht4naj ht81 ts1bef ht51 ts1ram ht51 ht92 ht21 ht62 ht01 ht42 ht7nuj ts12 ht5luj ht91 dn2gua ht61 ht03 ht31 ht72 ht11 ht52 ht8
source: IKN calcs

big losers Capstone (CS.to down 20.7%), Nevada Copper (NCU.to down 12.2%), AQM Copper
(AQM.v down 11.1%), Copper Fox (CUU.v down
9.7%) and Western (WRN.to down 9.5%).
Moving on and more pain for copper market prices
last week, we’re now under U$2.20/lb (psot and
futures) and in new multi-year lows territory; the
lowest since July 2009 to be exact.
Regarding the copper market, in a note to clients
on Wednesday Goldman Sachs reiterated its bearish
view on copper and went further, saying that its
downside base case target of U$4,800/mt (U$2.18)
was likely to be broken. According to Goldman, the
new mines coming on line are going to cause a
supply surplus and though we haven’t seen it yet in
the normal datasets, Chine’s going to one big
copper stocks unwinding machine at some point.
Copper immediately dropped to U$2.16/lb that day
so yes folks, the bears are still very much in charge. Goldman went on to say the following
about the supply/demand dynamics and what stocks may be telling us:
There has been a distinct lack of visible (LME, Comex, SHFE, China Bonded) refined
copper inventory build during 2015 (Exhibits 6 and 7). However, we believe Exhibits 8-
13 illustrate the deterioration in copper supply and demand balance during 2015, which
points to rising copper inventories over the period. In particular, the charts illustrate the
following points:
• Our GS global copper demand indicator suggests that demand growth is likely
to have slowed at a faster pace than refined copper supply growth (Exhibit 8),
with demand declining on a yoy basis for the most recent data points, and
supply growing, albeit slowly.
• The difference between the GS global copper demand indicator and the
refined copper supply growth (as a proxy for the supply/demand balance
delta) has a strong historical relationship with the copper price (Exhibit 9).
• Global demand growth weakness has been broad-based across China and
ex-China (Exhibit 10). In particular, the weakness in the ex-China apparent
refined copper demand represents a significant downside risk to our demand
forecasts for 2015 and beyond (though it has to be said that the data quality is
not high and any read across should be made with caution).
• Exhibits 12 and 13 point to an amply supplied concentrate market. Indeed,
with mine supply growth relative to refined supply growth and TCs high and
rising in recent months, it is likely that copper in concentrate inventories are
building. As this unwinds over the coming years, this could make inventories
more visible.
Meanwhile, we now assume c.100-200kt (150kt midpoint) of SRB buying spread
evenly across 2015 in Exhibits 6 and 7, which is our base case assumption for this
year (up from no buying, but down from 500kt of assumed purchases during 2014).
The rationale here is that the underlying surplus is not visible in LME, Comex, Bonded,
SHFE warehouses, and thus may have at least in part been purchased by China’s
State Reserves Bureau.
Here are the main charts connected to the Goldman piece, Ex 6 and Ex 7. The other charts
mentioned in the above note (Ex 8 thru 13) can be found in Appendix 1 below).
13

Now our regular weekly warehouse comment section:
• Total world copper stocks didn’t move much last week with a small drop at the LME all-
but cancelled out by a similar rise at Comex. Shanghai stayed pat. World totals come to
513,759 metric tonnes (mt) this weekend.
• Shanghai stocks are virtually unchanged, down just mt to 197,372mt. Still skirting the
200k level, still way too early to be this high for health or comfort.
• The LME saw stocks drop by a modest 5,075mt (-1.9%) to finish at 261,025mt.
• And Comex rose again, up another modest hike in real terms, big hike in percentage
terms. We’re now at 55,362mt, up 4,561mt (+9.0%) on the week. That’s Comex with
more than 10% of the warehouse system for the first time in a very long time.
Here's the Shanghai-only tracker chart, which hasn’t changed its trend since July.
Shanghai Futures Exchange Warehouse Stocks, 2014/2015
260000
240000
220000
200000
180000
160000
140000
120000
100000
80000
60000
14
31'13ceD ht91 ht9 dn2ram dr32 ht31 ht4yam ht52 ht51 ht6yluj ht72 ht71 ht7 ht82 ht91 ht9 ht03 ts12 ht11 ts1bef dn22 ht51 ht5rpa ht62 ht71 ht7nuj ht82 ht91 ht9 ht03 ht02 ht11 ts1von
Mt Cu
source: Cochilco
Now for comments on a few of our basket stocks.
Reservoir Minerals (RMC.v): Thursday’s NR from the company announced (7) a JV deal
between RMC and Rio Tinto (RTZ) on the four areas of the Timok concession 100% controlled
by RMC, plus its Tilva concession in Serbia. Very similar in scope to the JV deal RMC has with
Freeport (FCX) that led to the discovery of the Cukari Peku deposit, RMC gets a de facto free
ride on exploration in return for giving RTZ an option to earn into 75% of whatever they like.
There are minimum expenditure and time limits on the exploration stages and RMC gets to be
in charge at Tilva until such time as RTZ triggers its option deal.

This is RMC doing its project generator thing and doing it very sucessfully, too. On the news,
RMC share rose nicely on Friday, up 3.9%. Sadly, all that managed to do was to counter the
drop RMC and the sector had suffered on Wednesday and Thursday.
Western Copper & Gold (WRN.to): After last week’s opinion piece on WRN, I received
feedback from Chris Donaldson, corporate development manager at WRN. By way of Right To
Reply I think it only fair to give both sides of this story an airing so here’s his mail, with just the
top and bottom pleasantries removed. Here you go:
A couple of points about WRN and the access road:
We are supporters of KAM and understand that any additional infrastructure/attention to the
region is good news for WRN, however, the northern route that KAM has chosen does not work
for WRN.
As you may be aware, WRN has previously completed two pre-feasibility studies (both of which
our mutual friend/colleague Tim Oliver was the QP or involved with) as well as a full feasibility
study (M3 Engineering). The conclusion is that the route we have chosen is the best option for
WRN. WRN will be shipping large amounts of concentrate 24/7 for an initial mine life of 22 years.
Shipping the high volume of concentrate and LNG over two large rivers and at a greater distance
to port through the northern route simply wasn’t feasible.
We have been discussing our route with First Nations, local communities and Territorial and
Federal Governments for over 5 years. We now have support from these groups for this route
and are in discussions with the Yukon Government for funding a portion of the route.
Regarding the project being a “White Elephant”, permitting is never a “sexy” time for newsflow, so
we have been relatively quiet of late. One good piece that came out this summer was our ranking
on the Goldman Sachs report. While we do not share the same feelings about the copper price in
the short term, we were pleased to be ranked favorably (#1) on their low-cost producer basket.
(attached – see pages 35,40,89,93,109)
Despite the overall market and our share price, we are very encouraged with where WRN is
positioned right now.
-Permitting is advancing
-We have been prudent with our cash (we should end the year with ~$10M cash) and have a
great track record of not excessively diluting our shareholders
-We are fairly tightly held by a handful of patient long-term shareholders and insiders (who have
bought recently in the market.. myself included)
-We are in one of the best mining jurisdictions in the world
-The project has robust economics at today’s commodity prices
-While other copper stories are proving to be uneconomic as they advance through to feasibility,
we remain a very economic project and are ranking at or near the top on more and more lists.
NGEx Resources (NGQ.to): Among many others on a busy filing day, NGQ reported its 3q15
period on Friday evening. It probably left it until after the close because of its balance sheet,
with cash treasury now down to $4m and working cap at $2.5m. To give context, treasury was
at $28.5m cash at the beginning of 2015.
15

The Low Cost Producer Basket
After 46 weeks, the 2015 Low Cost Producer Basket is showing a 25.32% 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 9.97 12.01 -35.2%
2 Newmont NEM 18.90 528.08 9.24 17.50 -7.4%
3 Barrick ABX 10.75 1164.67 8.77 7.53 -30.0%
4 Franco Nevada FNV 49.19 156.5 7.39 47.23 -4.0%
5 Agnico Eagle AEM 24.89 214.12 5.58 26.07 4.7%
6 Silver Wheaton SLW 20.33 403.75 5.01 12.40 -39.0%
7 Kinross KGC 2.82 1146.2 2.10 1.83 -35.1%
8 Buenaventura BVN 9.56 254.19 1.24 4.88 -49.0%
9 Pan American PAAS 9.20 151.64 1.05 6.90 25.0%
10 B2Gold BTG 1.62 926.68 1.00 1.08 -35.8%
all prices in U$, using NYSE ticker prices Portfolio avg -25.32%
Overall the basket managed to reverse recent losses and move up by 0.86% on the week, but
with six winners (GG, ABX, FNV, AEM, KGC, BTG) and four losers (NEM, SLW, BVN, PAAS) it’s
nobody’s idea of a sector-wide rally. Best performance came from Barrick (ABX up 6.66%,
numbers and beasts and all that) on the news of its Nevada assets sales (see below). Worst
was again Buenaventura, down a whopping 12.4% as it goes into severe oversell mode.
The Low Cost Producer Basket: Weekly performance
30% and comparative to GDX control
20%
10%
0%
-10%
-20%
-30%
-40%
16
ts13ceD ht11 ht52 ht8 dr42 ht8 dr32 ht5rpa ht91 dr3yam ht71 ts13 ht41 ht82 ht21 ht62 ht9 dr32 ht6peS ht02 ht4tco ht81 ts1von ht51
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 ts1von ht51
|
source: ikn calcs, NYSE/Nasdaq data
Barrick (ABX) and Kinross (KGC): The big deal news of the week in the world of mining
concerned two of our basket stocks, ABX and KGC. On Thursday morning ABX announced (8) it
was selling a suite of assets in Nevada for U$720m cash. The deal comprises $110m for assets
sold to Waterton, then the lion’s share deal was announced in this way by KGC (9):
TORONTO, ON--(Marketwired - November 12, 2015) - Kinross Gold
Corporation (TSX:K.TO) (KGC) announced today that it has entered into a

definitive asset purchase agreement to acquire 100% of the Bald Mountain
("Bald Mountain") gold mine, which includes a large associated land package,
and 50% of the Round Mountain ("Round Mountain") gold mine in Nevada
from Barrick Gold Corporation for $610 million in cash
That means KGC has, in exchange for using 2/3rds of the cash treasury it’s had hanging around
all year, is 100% of both of those mines as well as a minor JV exploration agreement on other
properties in the zone that were previously Barrick’s. Meanwhile Barrick gets past its target of
raising over U$3Bn to pay down its debt position this year via the sale of non-core assets (or
what it now tells us are non-core, how times change). ABX has got to $3.2Bn in cash deals in
2015 and that’s helped take the pressure off.
Here’s how the two stocks reacted this week:
It’s normal for any acquirer to see its equity price stall on news of a deal, but it was interesting
to see how KGC bounced back from the initial 4% approx drop and ended up neutral over the
last two days, as well reducing the difference between itself and ABX from 4% to around 2% by
the end of play.
I was also interested to see Josh Wolfson Dundee cut his call on Kinross in a note entitled
“Betting The Farm On A Gold Price Recovery: Lowering To Sell”. Here’s the executive blurb from
that note:
Kinross announced a $610MM cash acquisition of Barrick's Bald Mountain mine and
50% of Round Mountain. Valuation of the transaction at spot gold prices is dilutive to
Kinross, but more critically, financial liquidity and refinancing risks have been
introduced to Kinross' corporate outlook in 2016. As a result, we are lowering our
rating from NEUTRAL to SELL and target to C$2.00 (prev. C$2.75).
If you’d like to read the whole thing mail me and I’ll send it over, but basically the argument is
that with $380m left in the bank after the deal’s done and $250m to pay in debt maturities at
the end of 2016, Kinross could be in covenants trouble in 2019 if gold goes to and stays at an
average of U$1,050/oz.
In other words, it’s a hit piece. What really gets me about this type of anal ysis, these pieces of
worthless number-masturbation such as Wolfson’s, is how these anal ysts ride down these
stocks for years on end and watched while they threw money down the drain, then finally call
sell when they buy decent assets with positive cash flow at today’s bargain prices. Where was
Wolfson’s “Sell” call on KGC under Tye Burt? When the stock was at U$18 in 2011? Or U$6 in
mid-2013, after the gold waterfall drop? Or hey, even post-Burt at U$4 in mid-2014?
17

Yes, if you want to use provocative language you can say they’re “betting the farm”; after all
it’s a gold mining company that mine gold. Apparently, spending money on profitable mining
gold mining companies is a worse thing than keeping it stashed in your vaults these days. I’ve a
good mind to buy myself a couple of hundred Kinross shares next week as a small marker on
Wolfson’s call, just so I remember to haunt him as KGC moves back up.
Buenaventura (BVN): I can’t let this week go past without mentioning how BVN continues to
get hammered by the market. Now under U$5 for the first time since 2001, I think it’s because
people are looking at the balance sheet, seeing a rake-thin +$8m net working capital position
and a cash treasury that doesn’t cover near-term financial obligations (mainly an expanded
overdraft facility) and think BVN is in cash crunch territory.
It’s not. BVN’s never die, they just go through cycles. I wouldn’t be at all surprised to see
something along the lines of a “backed rights issue” or a “Class A shares financing” to put cash
in the coffers soon, which would basically mean Roque Benavides ploughing back some of the
cash he and his family drew from the company in better times, all at very preferential share
price terms. BVN won’t run out of cash, period, but the market is starting to price it as a
Chapter 11 candidate. We’re now under U$1.3Bn market cap for a 800k/oz Au/annum gold
miner. That’s wild.
Regional politics
Peru: The 2016 Presidential elections are officially sanctioned
A bit of standard protocol last week from outgoing President Ollanta Humala last week, plus a
signature or two, means that the 2016 elections in Peru are now officially underway and the
first round of voting will take place on April 10th (which is less than six months away now, my
how time flies). Current frontrunners are Keiko Fujimori (yes, the daughter of, who won’t get
enough votes to win in round one but is virtually guaranteed a place in the second round run-
off)), followed by Pedro Pablo Kuczynski (PPK) and then battling for third place are one Cesar
Acuña and a certain Alan Garcia (who, mark my words, will fight out the second spot for the
run-off vote with PPK).
This is one we’ll follow more closely in the New Year, as hot campaigning will only start in
February or so.
Brazil: A week on from the Samarco tailings dam failure
Last week IKN expressed surprise that the English language press wasn’t covering the tailings
dam failure at the Samarco (BHP/Vale 50/50 JV) very closely. This weekend we can confirm
that the English speaking developed and industrialized world has decided to use the “ignore it
and it’ll go away” strategy on this story, even though it’s still one of the biggest current affairs
items in Brazil and being watched carefully by neighbouring countries too.
So to fill a little of your knowledge gap in on this, in the last seven days the disaster has been
picked up by all politicos, Dilma downwards, and already blame is being apportioned on locals
Vale, who are blaming BHP, who are blaming the government inspectors who are blaming the
rules under which they work, which leads us neatly back to the politicos. But in more practical
matter, Vale has already said (10) that due to the dam failure at Samarco it now plans to cut
back production at other mines (due to accident risk), namely Fábrica Nova (by 3m tonnes this
quarter 9m tonnes in 2016), Timbopeba (equal amounts) and that they’ll stop producing at the
Fazendao mine, close to Samarco (though no timescale has been given for that one yet).
We’re also getting clean-up cost estimates (which the politicos vow to charge to Vale and BHP)
of anywhere between U$550m and U$1Bn, but frankly they’re still anyone’s guess because and
to give an idea of the scale of the disaster, fresh water supplies have been cut off to towns
within 300km of the dam failure due to pollution risk, mud from the tailings pond flowed
through two states of Brazil and of the eight confirmed dead and 21 missing the dead are
18

confirmed because they’ve found the bodies and rescuers are searching in a 100km range for
the others. So, imagine searching under a 100km long mud bank for 21 dead bodies to give you
an idea of the chances those people have of a Christian burial.
As well as clean-up costs, the Brazilian government has said it will fine BHP and Vale for the
“environmental catastrophe” caused by the failure. In the words (11) of Environment Minister,
“If Federal fines are applicable, we will apply them. There will be punishment and under the
Brazilian law the environment must be repaired”. To this, Vale and BHP have said they will
create a fund to pay for the clean-up costs between them.
Chile: Trying to be optimistic about copper
During a speech at the “Australia Latin America Business Council” last week, Chile’s Under-
Secretary of Mining, Ignacio Moreno (who’s more influential than that job title makes him out to
be) said (12) that Chile was “being cautious” about its mining sector in light of the drop in the
price of copper. He estimates that copper could return to between U$2.80/lb and U$3.00/lb by
2017 or 2018 once the current round of supply cuts (from mines going offline or projects not
going forward into production) have a meaningful impact on world prices.
He also noted that project investments are not calculated at spot prices, so it’s important that
the perspective for the sector remains positive”. Which is a nice way of saying that if copper
prices don’t move up, Chile’s GDP growth plans are screwed.
Guatemala: A law is revoked, a mine is closed
Two from Guatemala last week. First, and as widely reported as part of the Tahoe Resources
(TAHO) (THO.to) 3q15 financials NR (suddenly they pay attention up there) the 10% royalty
that Guatemala was planning to impose on mining activity (as well as a couple of other
industrial sectors) has been ruled unconstitutional by the country’s courts and will not be
implemented.
You people have not been paying attention. For example, the winner of the recent Presidential
elections, Jimmy Morales, has stated all along that if he’s made President he will revoke the law
due to its illegality but will replace it with another royalty payments law, which looks to be set
at 5%. Not only that but the loser of the election, Sandra Torres, vowed to do the same thing.
And what’s more, everyone knew that the law, passed under disgraced President Otto Pérez
Molina’s admin, was going to be annulled by the courts and it was only a matter of when the
judgement got handed down. Bottom line here; if any part of Friday’s rally in TAHO was due to
that little snippet, it needs to be unwound quickly.
Second, and far less widely reported, was the way (13) in which the Sechol mine in Guatemala
owned by Mayaniquel S.A was ordered to shut down by the same Constitutional Court, due to it
refusing to take into account legal arguments previously presented to the courts by the anti-
mining group CALAS, as well as for apparent serious environmental infractions committed.
CALAS are of course the ones after TAHO at Escobal and have challenged the company’s
operating permit, saying it was granted in a doubtful way. Which is true, it was.
Bottom line: Avoid Guatemala exposure. There’s a little more on TAHO in ‘Market Watching’
today, below.
Argentina: One week to the new President
A short update this weekend on the big and regionally important Argentina Presidential election
run-off set for next Sunday, November 22nd.
1) This table shows (from this link (14)) the latest voter intention polls for Mauricio Macri and
Daniel Scioli. We note that in all but one Macri is leading, but in the latest polls Scioli is closing
the gap somewhat. As a reminder, Macri was eight to ten points clear just after the the first
round, and about a week ago that was a typical six to eight points. We now have an arguable
four point average gap and even one poll that puts Scioli ahead.
19

2) However, we need to be quick to point out that the opinion pollsters got the first round badly
wrong, so there’s no real reason to put too much trust in their forecasts.
3) One way of gauging the feeling in Argentina is to follow the “Dolar Blue”, or black market
dollar forex quote. In theory, if the Dolar Blue gets stronger it predicts a Macri win and if it gets
weaker a Scioli win. Just before the first round the Dolar Blue was at Arg$16, then after wards
it rallied and got down as low at Arg$14.30. In the last couple of days it’s weakened again, with
Thursday and Friday seeing some very volatile trading between Arg$14.80 and Arg$15.40, the
weekend close at Arg$15.00 exact.
4) As this edition of the Weekly goes out (Sunday evening Americas time) one of the key events
of the next week will be taking place, namely the final Presidential debate between Scioli and
Macri, with no-one else on the platform aside the moderators. It’s the type of event that can tip
the balance in a tight race and both candidates will have to show well. In this respect, Macri
can come across a little vacuous at times and will need to be sharp with his responses, while
the current underdog Scioli will need to attack more than his usual amount (he can be soft and
a little too conciliatory at such moments). It’s difficult to make any sort of call on this race until
this debate is done and reaction is gathered.
Segovia Colombia: Temperatures are lowered a little
I made mention of the rising tensions in the town of Segovia, Colombia, weekend after having
watched quietly for a while. The good news (16) is that a planned strike set for November 19th
has been put on hold by the workers and co-operatives after intervention and negotiations with
State authorities.
The upset locals have reached some sort of deal with local authorities and though they haven’t
backed down on their claims to be able to work the mines that are currently blocked by court
order, they have apparently decided to use legal channels instead of direct physical
confrontation. This is a good thing, though the new peace is still very fragile.
Chile: The rising tide of seawater
An interesting report and presentation out of Cochilco last week (15), which forecasts water use
20

in the country’s copper industry for the next ten years to 2026. This chart is the global
representative one:
...but of course, these things are always more complex than just the contents of a single chart.
This shows how the use of fresh water (Agua Fresca) is set to drop from 13.3m3 per second to
10.18m3/s, while use of sea water (Agua de mar) is set for exponential growth in the years to
come, moving from this year’s 2.5m3/s to 10.7m3/s.
Market Watching
A quick Tahoe Resources (TAHO) (THO.to) snippet
One of the reasons that Tahoe Resources managed to beat (17) on costs in 3q15 and impress
the market to this extent last week...
...is that according to reliable information TAHO has gutted the Rio Alto Mining SA subsidiary
head office staff and officer payroll, reducing the Lima office headcount to skeleton at best,
retiring a lot of the best company brains. TAHO chief Kevin MacArthur now plans to run the La
Arena min and the new Shahuindo mine from its head office in Reno.
I calculate that the company will be able to get away with this for two or perhaps three
quarters before it begins to deeply regret this beancounter-imposed decision.
Gran Colombia Gold (GCM.to) 3q15 financials
A couple of you pointed me towards the Gran Colombia Gold (GCM.to) 3q15 financials last
week, as they reported and the headline numbers (18) showed a marked improvement in the
company. The net profit of $6.68m was an eyecatcher, as was the drop in cash costs and
revenues at $39m were better than expected, too.
But GCM is an example of the need to scratch the surface on quarterlies as just a little
scratching is enough to uncover the real weaknesses, ones that a quarter’s worth of operating
21

profits won’t mend. For one minor thing, the $6.68m net was due to a $7.15m forex gain (non
cash). But the main thing isn’t at the ops but the balance sheet:
$m Gran Colombia Gold (GCM.to): Working Capital
40 35.8 31.7
15
20 4.4
0
-20
-40 -19.5 -19.5
-60 -48
-80 -69.1
-100
-120
-140
-160 -144.1 -146.7 -147.2 -142.1
-180
4q12 1q13 2q13 3q13 4q13 1q14 2q14 3q14 4q14 1q15 2q15 3q15
source: company filings
This company is still enormously weighed down by its quasi-defaulted debt load and it’s going
to take a whole series of decent operating results to turn such a big number around in any
meaningful way. GCM is a case where equity value is at the back of a long queue, birds on a
telegraph pole style (see IKN339).
Even with my personal antipathy towards Serafino Iacono, if I thought there were a chance of a
decent trade for you people out there I’d say as much. There isn’t, so don’t. SGC.v is a much
better bet for a flip today.
Almaden Minerals (AMM.to) (AAU) check-up
On Friday evening Almaden posted its first set of financials since spinning out its non-core
properties plus CAD$3m in cash to the newly floated Almadex. As the one I care about is AMM
and only AMM, due to its interesting Ixtaca property in Mexico, I took a look at the filings.
What we now have (or more precisely, as at September 30th 2015) is a clean balance sheet with
CAD$4.6m cash and approx CAD$4.3m in working capital. The Ixtaca property is carried at
roughly CAD$30m, which looks reasonable. With 73.15m shares out and a share price of
CAD$0.70 (U$0.53) this weekend, it’s a CAD$51.2m market capper and that means that even at
this low price, the market assigns more asset
value to Ixtaca than the current carry.
It looks as though AMM is keeping expenditures
tight (there were some one-time lawyers bills to
pay due to the spin-out) and I’m assuming its
current $4.5m will be enough for perhaps three
quarters of low level burn. That’s a little respite,
but it also means AMM will need to go to
market and raise cash at some point in the near
future. This is why I’m not yet a buyer of this
stock (well, that and the gawdawful
atmosphere out there for explorecos) but once
its financing is announced and the terms of the
deal are known (as well as how it’s received by
the market) it’s one that can again be actively considered as a trade potential.
Sunridge Gold (SGC.v) redux
I’ll use the ten day chart to illustrate the happenings in SGC last week rather than the five day
variety, because showing the big pop of two Fridays ago give better context to the range-bound
moves of last week, in which 24c and 25c were the general trade prices.
22

I’ve heard from several people about SGC after last week’s piece, including people who’ve been
one-on-one with the Sunridge team and say that SGC expects the final distribution to be around
35c, perhaps a little higher. That makes the 25c we see this weekend look quite the bargain
and Chinese counterparty or not, there’s decent value here. I may partake in a few myself next
week, though if I do it’s not a trade that will make the official ‘Stocks to Follow’ list.
Minera IRL (MIRL.L) (IRL.to): Team Hodges tries and fails to cause problems in the
community
Please note: This article will also feature on the IKN blog
Back in “A policy statement on Minera IRL” featured in IKN337 dated October 25th, the first
bullet point was “it’s going to be dirty”. Last week provided plenty of that, particularly in the
Team Hodges news release on Friday (19) so I’m going to take as read that mud-slinging on
both sides is part and parcel of this whole process and restrict my comments to things from last
week that are actively interesting. Though I will state at the top here by way of reply to a few
mailers that Team Hodges’ idea of “initiating legal proceedings” (yes, that means against me,
big surprise) is probably the very same as the “start of legal action” they called against Diego
Benavides. Let’s note that to this day, Benavides has not been charged with a single count of
wrongdoing. Not one. A whole truckload of rumours and whisper campaigns for sure, August,
September, October and November, but you have to wonder why they haven’t moved forward
and made the charges public or formal. So these jokers can “initiate” all they want against me,
it’s worth precisely zero and is pure BS lawyer-spiel.
So to real matters and first, it’s interesting to note in passing that of the eleven points out of
Team Benavides (20) about false and misleading statements made by Team Hodges...
It is FALSE that Mr. Hodges recommended Mr. Benavides for the position of Interim CEO. Mr.
Benavides was appointed to this position by the Company's co-founder Courtney Chamberlain,
before he announced his medical leave in March 2015.
It is FALSE that Mr. Benavides refused to cooperate with Mr. Hodges. The capacities and
responsibilities of Mr. Benavides as Interim CEO of MIRL and the Peruvian subsidiaries were
usurped by Mr. Hodges in July 2015 through his re-organization plan, which started 30 days after
the Company signed COFIDE mandate and debt facility. These events resulted in criminal
charges being brought by Mr. Benavides against members of the current board of directors,
certain officers of the company and Mr. Daryl Hodges. These charges are currently under
investigation by the relevant Peruvian ministry.
It is FALSE that Mr. Benavides took the de facto control of the Peruvian subsidiaries. Mr.
Benavides has been President and General Manager of Minera IRL S.A. for 13 years, with total
transparency and the permanent control of the Board, and has held similar positions for 9 years in
Compañia Minera Kuri Kullu S.A.
It is FALSE that Mr. Benavides prevented officers of the company from doing their jobs or from
entering the company offices. The COO of Minera IRL Ltd, Eric Olson, worked in Peru for over a
year. The Peruvian Migratory authorities asked him to present his work visa via two official
citations, to which Olson refused to appear, preferring to flee from the IRL offices in Lima and
23

subsequently from Peru on both occasions. The Management and Finance VP, Carlos Yrigoyen,
was physically present in the Lima offices of IRL in the period between July and September 2015,
at which point until he was renamed as Controller of Minera IRL Ltd in Toronto.
It is FALSE that there exists a process to remove key personnel for no apparent reason. There is
enough evidence that the Company's personnel affected the relationship with the Community and
misused the Company's assets. The evidence and legal procedures will be duly submitted in
compliance with the Peruvian laws.
It is FALSE that the information to publish the Financial Statements was not submitted. Minera
IRL S.A. sent the documents on August 06, 2015 to the CFO, Brad Boland, who resigned his post
on September 28, 2015, irrevocably and immediately, leaving the Company without the signature
requested by the TSX for its publication. MIRL Board changed the facts. It informed on
September 29 that there was a delay in the publication because the documents were not
received, and on October 01 it informed on the CFO resignation, three days after the date it
happened.
It is FALSE that Minera IRL S.A. and its directors failed to convene a Shareholders Meeting.
Minera IRL Ltd presented its request for a meeting on October 27th after complying with the
necessary accreditation. The EGM of the Peruvian subsidiary will take place on December 3rd
2015.
It is FALSE that Mr. Armando Lema, proposed as Director by the shareholders has any debt with
SUNAT, which is the Peruvian tax authority. Mr. Lema ceased to be a partner of Estudio Lema,
Solari, & Santivañez a few years ago, and therefore such firm is in charge of fulfilling the
obligations with SUNAT. Mentioning this subject is unethical and evidences the interest of the
Non-Executive President, Jaime Pinto, who was also partner of said Firm from 2008 to 2010, to
discredit Mr. Lema.
It is FALSE that COFIDE declined a meeting with the Company. The Deputy Minister of Economy
and President of COFIDE, Mr. Enzo Defillipi answered the meeting request stating the COFIDE
management issued were responsibility of the CEO Jorge Ramos, who had a meeting with Mr.
Pinto on August 21, 2015, after he submitted his letter stating he was appointed as Director on
August 19, 2015 by Mr. Hodges. According to the press release, Mr. Pinto was "announced" as
Director on August 27, and "appointed" on September 03. Mr. Pinto had access to confidential
information and represented the Company before his official appointment as Director.
It is FALSE that Mr. Jorge Ramos is not qualified to be member of the Board or there is any
conflict of interests. Mr. Pinto's interpretation of the Peruvian Corporate Law is not appropriate
since COFIDE is a development bank; therefore it has no direct connection with the economic
sector (mining) in which Minera IRL operates. Moreover, Mr. Ramos will participate as Director on
a personal basis, not as a representative of COFIDE.
It is FALSE and biased to alert about a situation of permanent de-listing of AIM shares if the
nominated adviser (NOMAD) resigns. The company and/or its newly elected directors after the
EGM are in position to replace the NOMAD before the 30 day period indicated by AIM lapses.
...the current board of directors (i.e. Team Hodges) chose to address just one of them in their
NR on Friday (21). As stated previously, what this band of snakes doesn’t say is just as
important as what it says.
But the most interesting part of the Team Hodges NR was at the beginning, specifically this bit:
Developments concerning Ollachea Community
Comuneros (persons with voting privileges) from within the Ollachea community
recently met with the Company and the Company's external community relations
consultant in Lima. During this meeting the Comuneros informed the Company of their
concern about the events which led up to the suspension of support for the Ollachea
project from the President of the Ollachea community, as announced in a press
release on August 17, 2015. Additionally, the Company understands that a community
information meeting took place in Ollachea on 7 November at which this matter was
discussed in front of representatives of Minera IRL SA (Minera IRL Ltd's 99.99%
percent owned subsidiary in Peru) and the providers of the bridge loan, COFIDE.
The Minera IRL Limited board (the "Board") is discussing these developments with the
Company's community relations consultant and is awaiting detailed minutes of the
meeting. The Board expects to be in a position to provide further information on
community support for the Ollachea project next week.
What’s clear here is that Jaime Pinto and his band are trying to sow discord, or what to the
24

world may look like discord, in the ranks of the Ollachea community. The tactics aren’t difficult
to guess at either, the idea being that they try to call into question the veracity of the Ollachea
community’s position as stated in the official letters sent to Minera IRL in August and try to
make out that the community is split, rather than united as one.
The problem is that they’ve gone about this dirty tricks campaign in such a clumsy and ignorant
way that it’s about to explode in their faces again. What went down last week is that on the
morning of November 11th, Jaime Pinto sent some lackeys into town with flyers to distribute to
the locals in the town square, this happening at the same time as him sending a copy of the
same letter to the community president, Sr. Valeriano. Summing up the flyer, was something
along the lines of:
• My name is Jaime Pinto, I’m the maximum authority in Minera IRL
• My job is to finish the process of kicking Diego Benavides out the company
• Please tell me whether the letters you sent to the company in August were written by
you, or were they faked by somebody else.
• I look forward to working with the community and will honour all agreements
previously made.
Not only has Pinto never set foot in Ollachea, his name wasn’t even known to the locals as the
company chair until that flyer appeared because all agreements and deals Ollachea has with
IRL are via its subsidiary, Kuri Kullu SA, and its president is not Pinto but still (much to Team
Hodges’s chagrin) Diego Benavides.
But back to the point in hand and once again we see Team Hodges people doing exactly the
same thing that got them into hot water with the town’s authorities back in August; refusing to
follow the correct channels of communication and talk with Ollachea’s elected authorities,
preferring to hand out flyers on the streets to the rank and file in order to sow discontent. And
to be clear, the act of handing out flyers in this way is a criminal offence in Peru, called
(literally) “Perturbation of Public Tranquility”. Aside from this being a direct insult to the people
who make the decisions in the town (you may have noted by now how Ollachea’s run like a
democracy; that’s because it is a democracy), it once again shows the complete tone-deafness
of the people who’d be running the community relations in Ollachea if they were to win on
November 26th. People, you just cannot treat communities in Peru like this! It’s like watching
something from the era of Spanish rule and we can point a whole list of examples of soured
community relations that have scuppered mining projects in Peru. This idiotic way of treating
locals is what got Daryl Hodges into trouble back in July and August, but lo and behold, Team
Hodges are sowing it all over again.
Therefore it will come as no surprise to learn that the town of Ollachea has already replied to
Jaime Pinto via the letter you’re about to read (translated by your author). Not only that, but
this communique will appear in the Monday edition of Peru’s newspaper of record, El Comercio
(in the original Spanish of course) so that the whole of Peru clearly understands the position of
the town of Ollachea.
Declaration of the Rural Community
Signed by the community directive and all other organizations of the Ollachea
community.
First: Backed by our community, we are extremely offended by the
expressions and lack of respect for our community, for which we ask for full
respect for our lands, people and especially our organizations.
Second: To this end, we informed that the transitory President of the Minera
IRL directors, Mr. Daryl Hodges, disturbed (our community) by handing out
25

leaflets that disrespect our community authorities. The same thing has again
happened, this time on November 11 via another leaflet handed out by Señor
Edwin Huanca Rosel and signed by Mr. Jaime Pinto and we demand that he
abstains from declarations about the community to media channels. It is a
serious accusation and an insult against the dignity of the community and
because of that we find ourselves extremely offended by the expressions
distributed by the documents handed out.
Third: If Mr. Pinto continues with his declarations and his intent to divide us,
the whole community will make the decision to permanently stop the project.
Fourth: The rural community has maintained a relationship for over eight
years with the Kuri Kullu S.A. Mining Company. We wish this to continue, and
that also our Honorary Community Member Dr. Diego Benavides Norlander is
also respected, who we look to in order to continue our established
relationship in compliance with established commitments and agreements.
Fifth: The community of Ollachea is in favour of the development of the
project and solicited the presence of COFIDE in order to know more about the
financing deal. Being satisfied with the presentation, we trust the in the near
future all the financing will be raised in order to start the project.
Sixth: The community, as shareholders and partners with the Kuri Kullu S.A.
Mining Company, supports the election of the new directorate of Minera IRL
on 26th November to move forward and develop the Ollachea project. We
underscore that the Rural Community of Ollachea is characterized by being
always open to dialogue and public and private investment with full respect.
Ollachea, November 13th 2015
IKN340 back. The letter is then signed by four of the Ollachea community brass, including
community president, vice-president and treasurer.
But that’s not all! My ground-level Ollachea source tells me that tomorrow Monday evening the
community of Ollachea has convened an emergency meeting, at which the person or persons
from the community who met with Jaime Pinto’s people last week in Lima without the
knowledge of the wider town will be asked why he/they did such a thing. They will also explain
to the general population what was going on behind the scenes when Pinto’s people handed
out the leaflets on Wednesday November 11th. They will then take a town-wide vote on the
position to be adopted by Ollachea regarding last week’s events and on anything that Team
Hodges may try to say or do in order to pretend the community of Ollachea is fractured in its
opinion. And once that’s all done we’re going to get another official letter from the people of
Ollachea.
You want that in simple terms? Okay, it means that if Team Hodges wins the EGM vote, the
mine at Ollachea will never be built. Ever. Short of sending in the army and evacuating the
whole of the town’s population, at least. It’s impressive how these Team Hodges people ruin
their relationships so rapidly with the Ollachea community, it’s almost as if they have something
in common...
But irony aside, it’s difficult to put into words the rank stupidity of the way Team Hodges has
treated and continues to treat the town of Ollachea but in the end it’s also going to be their
downfall. What I believe has happened is that Team Hodges treats them as ignorant and pliable
because that’s how they see other people, as mirrors of themselves. The reality is that Ollachea
is populated by honest and intelligent people who see right through the deceitful members of
our world.
Back in IKN337 I wrapped up that policy statement with a paragraph that included these words.
26

It’s as true now as it was back then.
People, in the end I just want the mine to be built at Ollachea and my shares
to go up. That’s the bottom line of all the bottom lines. You may be less
supportive of Diego Benavides than I, but the plain fact is that the community
at Ollachea has made its position crystal clear on this matter and that without
Benavides heading up the project, there’s not going to be a mine built. Period.
Somehow and for some reason, people backing Team Hodges think that all they need to do is
get rid of an Honorary Community Member of Ollachea, Diego Benavides, and that afterwards
all their problems are over. It’s crazy. They’re crazy.
Conclusion
IKN340 is done, we end with a few bullet points:
• If you haven’t voted your IRL proxy yet, please do so. Remember that you need to vote
FOR on each count. Also, expect next week to get very dirty as Team Hodges is now
desperate and will try to throw any sort of mud to see if it sticks. Among the dirt and
trickery, the good people of the community of Ollachea will be there and stating their
case very calmly and clearly: A Team Hodges win on the 26th means no mine ever and I
can’t blame them for that, the way they’ve been mistreated by these pathetic excuses
for human beings this year.
• Sunridge Gold (SGC.v) is still a decent looking arb bargain. There is some risk that the
deal falls through or the terms get altered by the purchaser, but it has the air of serious
about it and 35c looks a clear target.
• B2Gold (BTO.to) (BTG) didn’t impress me as much as I’d originally thought with its
3q15 numbers. This one is still all about delivering a strong 4q15. If not, things change.
• Teranga (TGZ.to) TGZ.ax) rebounded well in a difficult week. For further love, it needs
to re-take and consolidate in the 60s.
• You up in the North can ignore the Samarco tailings dam failures all you like, this is a
big problem for mining in South America and it’s not going to go away.
I thank you in advance for any feedback. Our Top Pick stock is B2Gold (BTG) (BTO.to). Flash
updates will be sent if required by events.
I wish you good trading fortune, ladies and gentlemen.
Otto
Footnotes, appendices, references, disclaimer
(1) http://www.kitco.com/news/2015-11-10/No-One-is-Paying-Attention-to-the-Gold-Price-Rob-McEwen-Chairman-
McEwen-Mining.html
(2) http://finance.yahoo.com/news/b2gold-reports-third-quarter-2015-014037670.html
(3) http://incakolanews.blogspot.pe/2015/11/b2gold-btoto-btg-3q15-financials.html
(4) http://incakolanews.blogspot.pe/2015/11/guest-article-by-reader-bw-lifting.html
(5) http://finance.yahoo.com/news/timmins-gold-announces-results-2q15-110000420.html
(6) http://www.focusventuresltd.com/s/NewsReleases.asp?ReportID=730170&_Type=News-Releases&_Title=Focus-
Completes-2.3-Million-Private-Placement
27

(7) http://www.juniorminingnetwork.com/junior-miner-news/press-releases/380-tsx-venture/rmc/13621-reservoir-
minerals-and-rio-tinto-agree-an-earn-in-and-joint-venture-agreement-for-timok-magmatic-complex-properties-in-
serbia.html
(8) http://finance.yahoo.com/news/barrick-announces-sale-non-core-123000624.html
(9) http://finance.yahoo.com/news/kinross-acquires-strategic-nevada-assets-123000542.html
(10) http://www.americaeconomia.com/negocios-industrias/vale-dice-que-desastre-en-complejo-germano-reducira-
produccion-en-minas-cercanas
(11) http://www.americaeconomia.com/negocios-industrias/brasil-se-compromete-que-bhp-y-vale-paguen-por-desastre-
minero
(12) http://www.portalminero.com/pages/viewpage.action?pageId=105054544
(13) http://www.diariosobrediarios.com.ar/dsd/notas/11/84-macri-se-impone-en-ocho-sondeos.php
(14) http://www.cochilco.cl/
(15) http://lahora.gt/ordenan-suspender-actividad-de-minera/
(16) http://www.elcolombiano.com/paro-minero-en-segovia-suspendido-hasta-el-proximo-jueves-HG3109779
(17) http://finance.yahoo.com/news/tahoe-resources-reports-strong-third-220600113.html
(18) http://finance.yahoo.com/news/gran-colombia-gold-announces-third-235736774.html
(19) http://finance.yahoo.com/news/minera-irl-limited-provides-corporate-140000375.html
(20) http://incakolanews.blogspot.pe/2015/11/the-minera-irl-sa-ie-team-benavides.html
(21) http://finance.yahoo.com/news/minera-irl-limited-provides-corporate-140000375.html
Appendix 1: Goldman Sachs copper exhibit charts (from ‘Copper Basket’ article above)
28

Stocks To Follow Closed Positions 2014
Closed in 2014 closed close price
Fortuna Silver FVI.to jan'14 C$2.80 23-dic-13 C$3.19 13.9% small ST trade closed
Rio Alto Mining RIO.to jan'14 C$2.06 07-jun-13 C$2.30 11.7% trading position finally closed
Network Expl. NET.v feb'14 C$0.01 22-jul-12 C$0.005 -50.0% position closed, did nothing
Tahoe Resources TAHO feb'14 U$13.10 08-abr-13 U$21.72 -65.8% short closed due to reality
Darwin Res DAR.v mar'14 C$0.10 14-jul-12 C$0.045 -55.0% tiny risk play dropped
B2Gold BTO.to mar'14 C$3.07 28-nov-12 C$3.35 9.1% closed to free up capital
Pretium Res PVG mar'14 U$5.38 22-nov-13 U$6.50 -20.8% short closed as port longer
Gold Res Corp GORO may'14 U$5.07 26-ene-14 U$4.12 16.7% took profit
Bear Creek Min BCM.v may'14 C$1.63 23-mar-14 C$2.05 25.8% Took profit, sm near-term win
Eco Oro Min. EOM.to aug'14 C$0.48 22-sep-13 C$0.26 -45.8% sold small loser to make room
True Gold TGM.v sep'14 C$0.395 02-feb-14 C$0.41 3.8% M&A won't happen, sold
Santacruz Silver SCZ.v sep'14 C$1.04 26-ene-14 C$0.86 -17.3% silver/M&A spec, rel. small
Timmins Gold TGD nov'14 U$1.38 09-abr-14 U$0.99 -28.3% failed trade, sell, raise cash
Kinross Gold KGC nov'14 U$2.90 20-oct-14 U$2.15 -25.9% V small trade, didn't work, chau
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.145 -48.2% lost China sponsor
Stocks To Follow Closed Positions 2013
Closed in 2013 closed close price
USA Graphite USGT feb'13 U$0.93 08-ene-13 U$0.17 81.7% short tgt made/trade closed
29

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)
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Galway Res GWY.v dec'12 C$2.19 24-nov-12 C$2.30 5.0% closed good ST arb trade
Stocks To Follow Closed Positions, 2011
Closed in 2011 closed close PPS
Sunward Res SWD.v jan'11 C$1.05 21-nov-10 C$1.63 55.2% target made, trade closed
Serengeti Res SIR.v mar'11 C$0.245 05-dec-10 C$0.285 16.3% sold pre-tgt, ST trade fail
Fronteer Gold FRG apr'11 U$2.37 03-may-09 U$15.24 543.0% buyout, trade closed
Minefinders MFN apr'11 U$9.09 07-nov-10 U$16.89 85.8% target made, trade closed
Metalline Min. MMG may'11 U$1.04 26-jan-11 U$0.89 -14.4% exit, resource disappointed
Peregrine Met PGM.to jul'11 C$0.87 06-mar-11 C$2.60 198.9% buyout offer, closed
Dynasty Metals DMM.to jul'11 C$4.20 03-may-09 C$2.85 -32.1% Sold. Fail. Move on.
Aura Silver AUU.v aug'11 C$0.22 13-oct-10 C$0.16 -36.4% Bad pick. Take loss
U.S. Silver USA.v aug'11 C$0.52 26-jan-11 C$0.71 36.5% closed to make room
B2Gold Corp BTO.to sep'11 C$2.80 12-may-11 C$4.27 52.5% target made, trade closed
Bear Creek Min. BCM.v sep'11 C$3.80 27-may-11 C$4.17 9.7% macro sell call victim
Minefinders MFN sep'11 U$14.70 10-aug-11 U$15.15 3.1% macro sell call victim
Great Panther GPR.to sep'11 C$3.03 22-aug-11 C$2.64 -12.9% macro sell call victim
Fortuna Silver FVI.to sep'11 C$1.07 03-may-09 C$5.36 400.9% sold 20%, macro sell call
Focus Ventures FCV.v nov'11 C$0.40 20-apr-10 C$0.20 -50.0% cut losses, bad trade
Regulus Res. REG.v dec'11 C$1.17 14-aug-11 C$0.52 -55.6% cut on news of poor 43-101
2009 and 2010 closed positions in appendices below
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
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S. Amer. Silver SAC.to nov'10 C$1.38 24-oct-10 C$1.60 -15.9% loss on short, small fail
Ventana Gold VEN.to nov'10 C$7.92 27-jun-10 C$13.51 70.6% trade closed on buyout
Lumina Copper LCC.v nov'10 C$1.42 11-aug-10 C$3.65 157.0% trade closed
Antares Minerals ANM.v dec'10 C$1.42 06-dec-09 C$8.40 491.5% trade closed
Rio Alto Mining RIO.v dec'10 C$0.69 23-mar-10 C$2.16 213.0% trade closed
Coro Mining COP.to dec'10 C$0.585 03-oct-10 C$1.24 112.0% target made, trade closed
Stocks To Follow Closed Positions, 2009
Closed positions closed closing PPS
Cardero Res CDY/CDU.to May'09 U$1.20 03-May-09 U$0.87 -27.5% sold on negative news
Eastmain Res. ER.to May'09 C$1.04 06-May-09 C$1.315 26.4% trade closed
Radius Gold RDU.v May'09 C$0.165 03-May-09 C$0.235 42.4% trade closed
Latin Amer Min. LAT.v May'09 C$0.12 03-May-09 C$0.158 29.2% trade closed
Aquiline Res. AQI.to July'09 C$2.03 16-Jun-09 C$1.68 -17.2% took loss, bad timing
Chariot Resources CHD.to Aug'09 C$0.20 12-Jul-09 C$0.415 107.5% trade closed
Castle Gold CSG.v Sep'09 C$0.64 02-Aug-09 C$0.60 -6.3% ST trade didn't work out
Guyana Goldfields GUY.to Sep'09 C$2.30 12-May-09 C$4.50 95.7% profit taken
Los Andes Copper LA.v Sep'09 C$0.09 21-Jun-09 C$0.09 0% trade closed
Pediment Gold PEZ.to Oct'09 C$0.80 09-Aug-09 C$1.00 25.0% trade closed
Minera Andes MAI.to Oct'09 C$0.68 03-May-09 C$0.71 4.4% too much bad news
Dynasty Metals DMM.to Nov'09 C$4.18 03-May-09 C$6.01 43.8% half sold
Rusoro Mining RML.v Nov'09 C$0.55 03-May-09 C$0.57 3.6% underperformed
Important Disclosure
The information and opinions contained within this report reflect the personal views of the author and therefore all
material within should not be construed as accurate or reliable or be utilized as advice for investment or business
purposes. Independent due diligence and discussions with ones own investment and business advisor is strongly
recommended. Accordingly, nothing in this report should be construed as offering a guarantee of the accuracy or
completeness of the information contained herein, as an offer or solicitation with respect to the purchase or sale of any
security or as an endorsement of any product or service. All opinions and estimates included in this report are subject to
change without notice. It is prohibited to copy or redistribute this report to any type of third party without the express
permission of the author.
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