IKN #342Premium

The IKN Weekly
Week 342, November 29th 2015
Contents
This Week: US BLS NFP & Au, Samarco and the Doce River.
Fundamental Analysis: Minera IRL (MIRL.L) (IRL.to): Comments on last week’s events.
Stocks to Follow: Overview, Lake Shore Gold (LSG.to), B2Gold (BTG) (BTO.to), McEwen
Mining (MUX), Starcore Intl (SAM.to), Phoscan Chemicals (FOS.to), Atacama Pacific (ATM.v).
Copper Basket: Overview, Catalyst Copper (CCY.v), NGEx Resources (NGQ.to).
Low Cost Producer Basket: Overview.
Regional Politics: Argentina: The Macri cabinet and mining, Peru: The campaign trail starts,
Chile: Small copper miners in trouble, Guatemala mining risk and Tahoe Resources (TAHO)
(THO.to), Brazil: The Samarco tailings dam failure story continues.
Market Watching: Tis the tax-loss selling season to be jolly, Endeavour Silver (EDR.to) (EXK)
and another warning about balance sheets, Gran Colombia Gold (GCM.to) refis at last (with
predictable results, Sunridge Gold (SGC.v) continued.
I remind subscribers that no part of this newsletter can be copied, reproduced or
given to any third party without the express permission of the author.
This Week
US BLS NFP & Au
The United States Bureau of Labor Statistics releases its latest Nonfarm Payroll data (plus other
things) this Friday morning coming, i.e. it’s the jobs report. As the assumptions these days are
all about the Fed raising rates at its December meeting, to the point where the base rate rise
(oh how wonderful, we have a new
buzzword; “liftoff”) is now taken as read by
the wider market. Or put another way (1):
Federal-funds futures, which investors
use to predict Fed policy, show a 72%
chance of a rate increase in December,
compared with a 58% likelihood two
weeks ago, numbers from CME Group
shows.
When it comes to gold, the move has
already happened. This news is baked in
like mincemeat into a Christmas mince pie,
nobody’s been fighting the Fed and the big
money will now let the little money worry
about the effects of something it has
already discounted.
1

Leave aside the thin and easily ignorable trading around Thanskgiving that has “Cat is away,
mice will play” written all over it. Gold still has a long way to go before it threatens the now
mear-mythical $1k level.
Samarco and the Doce River
“Whatever gets you through the night
It’s all right, it’s all right”
John Lennon
This weekend you’d have thought the main thing on my mind has been the arch-stupidities of
the Minera IRL Extraordinary General Meeting, but it’s not.
The continued stream of news coming out of Brazil about the damage caused by the Samarco
iron ore mine (50% BHP, 50% Vale) tailings dams collapse (see Regional Politics) has affected
me to the point where I’m now wondering just why I write about mining stocks and offer advice
to people on investing in the sector, albeit in a tributary (pun intended) of the sector that does
things with explorecos and smaller mining companies, not these bigboy companies. I am aware
that in my very small way I encourage people to invest in mining companies, that I’m part of
the chain. It’s not a pleasant feeling this weekend, so it’s time to state a clear position (and you
never know, my pathetic navel-gazing and lib-lefty handwringing may encourage other people
who make a living from this activity to say something as well).
Two things have affected me profoundly: First the news, video images (2) and testimonies of
the people who live there, as well as the experts now on the case. It’s a disaster of
international scale that will affect the river and its environment for years to come (and it’s
telling that even the best brains on environmental matters are reduced to best-guesses at this
point, nobody really knows). The photo I’ve featured in the main pice below stopped me cold,
knowing how far Samarco is (was?) from the sea.
The second thing that’s affected me is the indifference shown by industrialized nations (yes,
that means you guys up there) to the disaster. Yes I know the 24/7 rolling news modern world
in which we live has better things to talk about and there’s Paris and ISIS and Donald Trump
and Coldplay’s new album and immigration and the football season and quinoa recipes and
elections and the latest movement of the gold price, the Dow and even the price of iron ore.
We get to hear that ‘this time it’s different’ far too much, we as a race need a dose of cynicism
and heavy filtering of what’s out there just to make it through a day and remain sane. But this
one, this Samarco tailings story, it really is different and nobody outside of South America
seems to care. But the loudest of the roaring silences is in the mining industry trade papers,
2

who are actively ignoring what is BY FAR the biggest story in their world at the moment,
arguably the biggest story of the year. Why that might be is the source of my depression and
why I just don’t ever want to be involved with the people who would form your opinions on the
sector. I’m sick to the core of the nonsense and spun-to-death sanitized versions I am required
to read on mining that are offered by the liars and thieves running mining companies that have
the sole of objective of the continuation of their pretend world that simply does not exist.
Fundamental Analysis of Mining Stocks
Minera IRL (MIRL.L) (IRL.to): Comments on last week’s events
Here follow some thoughts on the Minera IRL EGM, rightly labelled a “fiasco” by Lawrie Williams
on Saturday (2). Let’s start with a few bullet points
1) I’m fed up with this story. Seriously, way too much time, way too little return. I need to
spend more time on companies that trade openly on the exchanges and not get bogged
down with “all the IRL all the time”.
2) With that said, I know where I am as a shareholder and one of the people most closely
following events. I need to continue coverage because the waning of spirits is one of
the things that slugs rely upon to get their nefarious way.
3) However, I’m acutely aware that syaing too much today may play straight into the
hands of these Team Hodges slimeballs, so I’m going to limit my commentary to a few
certain aspects. With luck we will be in position to give a better overview this time next
week.
4) There was a very interesting turn of events on Thursday via the Peruvian National
newspaper of record, El Comercio. See below for more as it shines a light on the real
way the EGM was carried out and again, how fast and loose these self-styled paragons
of corporate governance break any rule they want when they feel like it.
5) But we can comment on things already out there in the public realm, such as a note
from SP Angle on Friday which contains some unconfirmed numbers on the vote.
6) We also can take a guess as to strategies that Team Hodges may try to use in order to
get their way in the days and weeks to come.
7) We feature two mails received from reader JC and LJ, two of many over the last few
days with “IRL” in the title line (I thank you all even though I haven’t replied to all of
them, just too much volume folks, apologies).
So in no particular order, let’s address those points.
The SP Angel numbers
On Friday via his morning note to clients and the general public (3) John Meyer of London
brokerage SP Angel voiced his disgust for the dirtball tactics used by Jaime Pinto (fronts for
Daryl Hodges and Chuck Higgins, no more no less) in the EGM. Quite right too, but he also
wrote (and I quote), “EGM adjourned despite Rebels holding >90% of votes, questions over
handful of shares”, and by “rebels” he refers to the Team Benavides slate. As you’ll note below,
this information links in with a comment published by El Comercio on Thursday. I have no way
of knowing for certain whether the SP Angel 90/10 numbers are correct, but in a short
numbercrunch-type analysis below I’m going to assume them correct as they’re the only hard
and publically known numbers on the vote count so far.
The strange case of the El Comercio report
When you’re enemy is a proven liar, the best thing to do is to watch them carefully and wait
patiently because sooner or later they make a mistake, their frilly underwear shows, light gets
shone upon their false position. Last Thursday we had the EGM and as we all know by now, it
was suspended. On the same day at lunchtime I began getting calls from Peruvian people
wanting to know if it was true that the EGM had been suspended. I knew nothing about this at
the time (and let’s say this clearly, I’m fairly well connected on this story) so I asked the people
3

where they’d heard this. “In El Comercio” they replied, so I immediately went to the website of
Peru’s newspaper of record, its NYT or WaPo if you like, and there was this link (4) to this story
(title screenshot):
On reading the report I immediately contacted sources who confirmed that yes indeed, the EGM
had just been suspended. The title of that news report as seen above can be reasonably
translated as “The Minera IRL Shareholders’ Meeting Has Ben Suspended”, but as you see
above, my added red ink cares more about the timestamp on the report. This note was
published at 13:43 (i.e. 1:43pm) local Lima time on November 26th, the day of the EGM. You’ll
also note that at the time in Lima Peru is exactly the same as in Toronto (e.g. 12 midday up
there is 12 midday down here), the two towns are in the same time zone.
So far so normal, but when we get to the body of the text we read something very strange
indeed. Here for the record is a screenshot of part of the text (just in case it “accidentally” goes
missing from the El Comercio website):
As for the content the first paragrpah translates like this:
In a communique for shareholders (i.e New Release), the company chairman
Jaime Pinto pointed to presumed irregularities in the way the vote was carried
out to determine the future of the company.
You’ll note that the report talks about a news release. You’ll also note that the verb “point” is in
the past tense (and so is “happened”, in Spanish “llevaron”). There are no doubts about the
tense being used here and that the report is talking about something in the past. So let us be
clear, at this point in time there was no news release from Minera IRL Ltd and the only news
release from the company came nearly 12 hours later, at the opening bell of the London Stock
Exchange around 01:30am Toronto and Lima time, the wee small hours of Friday morning,
November 27th.
Pray tell, how did El Comercio know about a news release that didn’t exist until twelve hours
later? Why, at lunchtime on November 26th, was El Comercio referring to a NR that didn’t get
published until November 27th in the past tense?
4

But that’s not all. The El Comercio report goes on with a quote from Jaime Pinto and here I’m
going to bore you with a chunk of Spanish, the same in that screenshot, so you can play at
Google Translate for yourself if you want:
"Es mi responsabilidad como presidente del directorio determinar la validez de
los votos llevados a cabo que se han realizado en persona o cedidos en
poder. He recibido evidencias sobre una posible violacion de las leyes de
seguridad de Ontario, [dado que] una importante parte de los votos fueron
cedidos a personas que no tienen interés de velar por el futuro economico de
la compañía".
As it happens (and any sworn translator or expert in both languages can tell you if you don’t
believe me), an excellent translation of those Spanish words is the following:
“As Chair of the EGM, it is my responsibility to determine the validity of the
votes cast by proxy or in person. I have received evidence of a potential
violation of Ontario securities laws as a result of which a substantial
proportion of the votes cast by proxy, significant enough in number to alter
the outcome of the matters to be decided at the EGM, were cast on behalf of
persons who do not have a corresponding economic interest in the future of
the Company.”
And those words are found in the NR that Minera IRL Ltd (i.e. Team Hodges) released on
November 27th. Again, how did El Comercio know the EXACT words Jaime Pinto would use in a
NR the next day?
The answer is, of course, that El Comercio published something it wasn’t supposed to have.
And that shows just how much theatre was going on that day in the room inside Fasken
Martineau that played host to the EGM. Team Hodges had already decided that the vote wasn’t
going to take place and it would accept no arguments from the floor up to and including the
point where it had already written the NR that it would send out to the market the next day
before the meeting was done. But somebody somewhere screwed up, sent off the pre-written
missive too early and it got published 12 hours before time in Peru’s newspaper of record. And I
read it.
I would strongly suggest to lawyers looking into this case that, come the time, they get a few
people from the El Comercio newspaper on record about the happenings of November 26th.
Those lawyers should also get Messrs. Henry Fitzgerald-O'Connor and Oliver Donaldson of
Canaccord Genuity Limited in London, the NOMAD (Nominated Adviser and Broker) for Minera
IRL Ltd, on record as it would seem they have committed a grave infraction and dereliction of
duty regarding key company news releases.
BUT WAIT! THERE’S MORE! At the end of the same El Comercio report there are two short
addenda. This is the first one (translated):
It is worth mentioning that Pinto told this newspaper yesterday that the
voting in the EGM did not favour him (i.e. he had lost). The same feeling was
picked up (by the newspaper) from the Diego Benavides group (who thought
they had won).
And this is the second one (translated):
The next big chapter in this story will happen in the first week of December,
when the board meeting of Minera IRL SA takes place in Lima, the objective
of which is to remove Diego Benavides as president of this subsidiary. The
way forward for this will be relatively straightforward, as the controlling
company under Pinto has 99% of the votes.
5

IKN342 back. In other words, on November 25th Pinto admitted to El Comercio that he didn’t
have enough votes to win and that after checking, El Comercio reported that Team Benavides
was of the same opinion. Then the second segment is the biggest giveaway to the strategy of
Team Hodges possible. They now want the Minera IRL SA board meeting to go ahead in Lima,
kick out Diego Benavides and get their hands on the assets of the company before they in turn
are kicked out of Minera IRL Ltd in the suspended meeting that will take place on or before
December 17th latest.
I’d expect Team Benavides is well aware of this.
And one other thing before we move on: In the NR of last week (be it November 26th or 27th)
Jaime Pinto stated the following:
“Information was brought to the attention of the Board early on the morning of
the meeting suggesting that there may have been irregularities in the way the
vote for the EGM was conducted.”
There is a clear lie in that statement. You don’t need to know what that lie is and, quite frankly,
neither do I. But all the same Jaime Pinto is a liar and there are enough people in this world
who will recognize that. The question is whether those people will continue to support a liar.
This two-faced idiot Pinto thinks we were all born yesterday, it’s embarrassing.
Mails from reader ‘LJ’ and ‘JC’
As noted above, I’ve received a lot of mails about IRL in the last few days. Some have been
about specific matters, some about things I didn’t know, others with advice. I’m going to
feature just two here because they address different ends of the spectrum and one or the other
(even both) may be useful to you on a practical level.
Reader JC: First here’s the main point from the mail sent by reader ‘JC’:
As of today presumably due to the delisted status it is a total loss. Perhaps
not. I have no idea.
Now that the EGM has passed and not gone well it would be a great help to
me to have you describe where we are today, e.g., $0.00. And beyond that
what are the good and bad possibilities for next steps in the process. As well it
would be helpful to know in view of past history in general and in particular
vis a vis the Hodges slugs, what are the probabilities for the different possible
outcomes.
Dear JC: No, your shareholding is not a total loss. It doesn’t matter if your shares are de-listed
from the TSX exchange, in fact in theory at least (practice may make trading them difficult or
more expensive, but by no means impossible) it doesn’t even matter if they’re never re-listed
again (though I’d be very surprised if they weren’t) because in the end the stock exchange is
only the conduit and your real relationship is with IRL. If you are a shareholder you are a part
owner of the company and that means if IRL comes out of this and starts creating the value it
should be capable of generating, your shares will still be worth money. The biggest danger to
the value of the shares isn’t whether or not they are listed on an exchange and it isn’t a bunch
of legalese blocks and tactics, but what the management does with either the company assets
or with the share count in the longer-term future. In the event of a Team Benavides win, that is
almost certain to be shareholder-friendly (reactivate, close COFIDE financing with little or no
more shares emitted, build Ollachea, etc). In the event of a Team Hodges win, the least they’ll
do is dilute us to kingdom come, the worst (and something I firmly believe will happen, with
plenty of anecdotals to back up my opinion) is that the assets are stripped out of the company
and sold for virtual peanuts to a third party.
6

As for probabilities/possibilities, this is now a straight legal fight and I’m not a lawyer. We know
almost for certain that Team Benavides won the EGM vote because that’s why the slimeball
Pinto (i.e. Hodges/Higgins) refused to announce the result. I’m not in a position to comment on
the legal moves now being made by both sides and I’m not going to provide free info for the
Team Hodges crudbags, but I will go so far as to say that I have confidence that the Team
Benavides side is doing a good job legally.
Reader LJ: Now for something completely different, a mail from reader ‘LJ’. He’s zeroed in on
the total lack of concern that Jaime Pinto has for fiduciary duty to shareholders and has a
couple of suggestions for ways in which we, the smallfry retail shareholder, can legally pressure
these two-faced rascals into first disclosing the vote count and eventually admitting it as the
result, thereby kicking them out once and for all. LJ prefers that people don’t copy the text of
the tipline message he sent through, so I’m not going to include it here and have as a result
slightly adapted his mail so that it makes sense.
I just (used) the OSC anonymous tipline (5). Perhaps others from all and sundry can
inundate the OSC and other respective regulatory agencies with similar (messages
about their disgust with the events of the Minera IRL EGM). Here's the link at the OSC
on how it's done:
https://www.osc.gov.on.ca/en/Investors_questions-complaints_index.htm
On another note, the type of lawsuit to be carried out against the board in Canada is
called a "derivative action". Fortunately Fasken (of all people!) wrote a whitepaper to
help people like us on the subject a few years ago (6):
http://www.fasken.com/files/Event/2508039d-8edf-46ac-a158-
52dad507f6d6/Presentation/EventAttachment/572b7f22-e024-
4e6b-8243-5362e5197614/53611_2_CohenPontin.pdf
I'm not much for legalese but I'm p___ed enough to go hard if pointed in the right
direction. I'm in Toronto area and if you know other people in area just as p___ed as
me but know better how to proceed for max pain results, feel free to put me in touch.
My thanks to reader LJ. If any of you in the Toronto or Canada area would like to get in touch
with him, I’ll be happy to link you.
A theoretical numbercrunch to shine light on a possible Team Hodges strategy
Let’s do some theoretic numbercrunching on the votes. First some inputs, which are either
known or assumed from things picked up, or logically deduced. I stress that there’s no special
inside information here, it’s all my own analysis and assumption work based on things out there
in the public realm.
1) We know that 141m votes were cast, around 61% of the total number of shares out,
and we know that because it was declared at the meeting (7).
2) That’s a lot of votes, way more than the AGM in August, so it’s fair to assume that Rio
Tinto voted actively in this election. Therefore we assume that to be so.
3) The Rio Tinto block is around 44m shares. That we know.
4) That means the “non-Rio Tinto” votes add up to around 97m shares (i.e. votes).
5) If we assume the SP Angel data as seen in the note on Friday morning (8) to be true,
then round off a bit, we get to a “non-Rio Tinto” vote of 87m shares for Team
Benavides, 10m shares for Team Hodges.
6) According to Jaime Pinto in the Minera IRL Ltd NR of Friday morning (8), “...a
substantial proportion of the votes cast by proxy, significant enough in number to alter
the outcome of the matters to be decided at the EGM, were cast on behalf of persons
who do not have a corresponding economic interest in the future of the Company”,
which is of course crazy and the reasoning of a scoundrel trying everything he can to
avoid the inevitable, but it’s what he said. It’s the “significant number” thing that grabs
my attention, because the Rio Tinto block is the only one of real size apart from the 8%
7

or 9% owned by Ciminas (who are staunchly Pro-Team Benavides), therefore I’m going
to assume that Pinto is referring to the RTZ shares as the potentially irregular ones.
7) Therefore, if the Rio Tinto votes are thrown out and their influence is annulled, Team
Hodges loses. Bigtime.
8) Therefore, if after investigation the Rio Tinto votes are allowed to stand, we can
assume Team Hodges loses as well because it’s the result they were trying to block on
Thursday.
9) But, if the Rio Tinto votes are not allowed and then Rio Tinto decides to change its vote
and side with Team Hodges, the percentages change. If we assume all the above is
correct or at least in the ballpark, we’d finish with Team Benavides on 87m votes and
Team Hodges on 54m votes. That would mean Team Benavides gets around 62% of
the total (Team Hodges 38%) and that falls short of the 66.67% needed to pass these
special resolutions. And Team Hodges wins.
In other words, one of the strategies that Team Hodges may be using is to try and delay the
EGM of IRL Ltd, get the Minera IRL SA subsidiary board meeting to happen, remove Benavides,
get its hands on the assets and sell them out (I firmly believe this to be true). But the above
calc also suggests they may be trying to pressurize Rio Tinto into changing its vote between
now and the re-start of the suspended EGM, because if they do they win (and then have all the
time in the world to ruin shareholder value).
Frankly, if Rio Tinto go with these jokers after the underhanded stunt they pulled on Thursday,
it will haunt the multinational for years. They’d be stark raving mad to back Team Hodges now.
Bottom line: That’s all I’m going to do today (no free ammo for you, slimeball shame of
Markham Yrigoyen). I’m as disgusted as the rest of you by the pathetic legal tactics used by
Team Hodges at the EGM. But there are recourses on offer and there are things that can be
done by Team Benavides as well. My best guess is that it now all hinges on the position of Rio
Tinto, so we’ll see if that changes in any way. However, I will underscore that I’m still very
confident indeed of a positive outcome for our side of the fight here, though we may need
more time than anticipated.
Stocks to Follow
A mixed bag of moves in the week that people care more about buying turkeys and discounted
HDTVs than stocks and shares. Of our 14 open positions, six made weekly gains (BTO.to, MUX,
FOS.to, ATM.v, DNA.to, REG.v), four others were unchanged (LRA.v, TGM.v, IRL.to suspended,
FCV.v) and four were losers (LSG.to, TGZ.to, SAM.to, SSP.v). The biggest loser was Starcore
(SAM.to down 16.7%), the biggest winner Atacama Pacific (ATM.v up 16.7%). Bookends.
We currently have 14 open positions in our 'Stocks to Follow' list, one below our self-imposed
15 name maximum. Same order as last week, just two positions in the green and the rest in the
red. And I still suck.
8

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$1.41 -35.0% Top Pick, good 3q15
Metals Producers (in current order of preference)
Lake Shore Gold LSG.to buy C$1.07 07-apr-15 C$0.97 -9.3% Added Aug, M&A tgt
Teranga Gold TGZ.to buy C$0.55 15-feb-15 C$0.495 -10.0% 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$0.075 -37.5% 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$0.27 -3.6% 36c/share of cash
Sandspring Res SSP.v spec buy C$0.195 18-oct-15 C$0.16 -17.9% New buy, 30c 1st tgt
Atacama Pacific ATM.v hold C$0.19 26-apr-15 C$0.175 -7.9% Spec buy, cheap adv proj
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.22 -80.9% 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$0.69 7.8% 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$0.21 16.7% 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$0.21 -30.0% 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.
Lake Shore Gold (LSG.to): LSG surprised the market on Thursday morning with this news
(8):
Lake Shore Gold Corp. (TSX:LSG) (NYSE MKT:LSG) ("Lake Shore Gold" or the
"Company") today announced the completion of a non-brokered private placement of
6,900,000 flow-through common shares ("Flow-Through Shares") sold at a price of
$1.45 per Flow-Through Share for gross proceeds of $10,005,000.
A Flow-Through priced at CAD$1.45 that bumps the share count up from 456.3 to 463.2m S/O
can hardly be considered dilutive, but the market reacted that way and one 400k+ block seller
over the thin US Thanksgiving trading was enough to push the Canadian listing under $1.00.
9

Hell, I dunno, maybe I’m just reading too much into a minor move but I really thought this one
had seen the back of sub-Loonie prices and I’m feeling slightly miffed and bitter about it.
Though what we do have now is an LSG with $10m worth of funding to dedicate to its ongoing
exploration program.
On considering the LSG working capital position (just under +CAD$70m as at 3q15) and cash
pile of $87m or so, it’s not a company that needed this cash, so it looks to me as though it’s
one of those “if they offer you money, take it” situations. Overall I consider the flow through a
net benefit to the company and it may be a sleeper due to the Thanksgiving trade lull, but I
cna’t really understand why LSG should sell off on the news. This one’s worth a lot more (and
worth a lot more to GG) and is a true bargain at this weekend’s price.
80 LSG.to: Working Capital per qtr
70
60
50
40
30
20
10
0
B2Gold (BTG) (BTO.to): Wednesday saw B2Gold announce (9) its groundbreaking at Fekola
that happened on Tuesday (likely waiting a diplomatic few days to separate the event from that
small hotel incident in Mali) and it’s good, valid, fundies news on the stock. We note how much
10
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3
source company filings/IKN ests
srallod
fo
snoillim
LSG.to: Cash treasury per qtr
100
90
80
70
60
50
40
30
20
10
0
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3
source: company filings/IKN ests
srallod
fo
snoillim
LSG.to: Current liabilities per qtr
60
50
40
30
20
10
0
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3
source: company filings
srallod
fo
snoillim

emphasis is placed on the presence of local dignitaries and politicos. Just $395m to find
between now and late 2017 when the mine is due on line. Piece of cake.
In trading, BTO did okay without setting the world on fire. Along with just about every name
out there, its traded volume was greatly affected by the short trading week in the USA.
McEwen Mining (MUX): Reverse split part one. The quote in Wednesday’s NR (10) that
addresses the issue of MUX’s continued listing in the NYSE was a classic McEwenism (your
author highlights):
"We've made good progress in a difficult market. This year we strengthened our
balance sheet, increased production, and decreased our costs," said Rob McEwen,
Chief Owner. "I'm not going to take this lying down, I have no intention of being
delisted from the world's premier stock exchange."
As I write these words it occurs to me that if it were up to Daryl Hodges, he’d be screaming for
criminal charges against Rob McEwen, a man that is Chairman, CEO and CFO of a mining
company, claiming obvious suspicions of corruption, underhand dealings and spreading rumours
of such without any sort of foundation to his group of slimy friends and hangers-on. So it goes.
I digress. The move by McEwen is logical enough
and it may even be his best card to play against this
now clearly defined “one dollar barrier”. If there’s
less reason to keep it under a buck, it’s less likely to
offer true resistance the next time the level is
challenged. And of course the chances of McEwen’s
will not being done in the AGM is somewhere
between zero and none.
In trading MUX was up on the week, but the true
show is the ten day chart which shows how MUX is
bouncing around in a (very nearly flip-tradable)
range in the 80s.
Starcore Intl (SAM.to): Reverse split part two. On Tuesday SAM.to announced (11) that
its board had approved a 4-for-1 share rollback and that on receipt of consent for the move
from the TSX, it would have 45,153,600 (or
thereabouts) shares outstanding instead of its
near-200m virtual tally if we include the scrips
mentioned last week. Full details in that NR link
below.
The NR was met by some relatively heavy selling
on Wednesday morning (relative because the
cash involved is minor in the great scheme of
things and the 585,500 shares traded looks far
more dramatic...it looks like one single seller
person too), which is slightly strange in itself as
the rollback news came out Tuesday morning,
not post-close. Then Thanksgoving arrived and
volumes dropped back to virtual zero, so I’m not concerned about the Friday close of 7.5c
either...that will rebound (as long as gold doesn’t cave in).
Once again, as with the MUX notelet above I stress that fundamentally speaking a rollback
makes zero difference to a company (50m shares at $2 is the same as 100m shares at $1). But
in this case, particularly with the message later in the NR that...
“The Board of Directors believes that the share consolidation will provide the Company
11

with greater flexibility in developing its plans for its recently acquired projects and for
the expansion of its exploration program at the San Martin Mine in Queretaro, Mexico.”
...there’s an implicit message being sent: SAM wants to run another financing. That could be a
bind and a weight on the future share price, on the other hand it’s already at such a low price
level compared to its asset value (see last week’s note) that downside is limited whatever near-
term sentiment dynamics come into play. We know Eric Sprott likes this stock (he owns more
than me) and if they’re after funding, if I were the board that would be first door that I knock
upon. We may have seen Sprott’s terms of further engagement put into action.
Phoscan Chemicals (FOS.to): After the weakness we noted last weekend after somebody
dropped nearly 350k shares onto this thinly traded
stock, bargain hunters moved in last week and
brought FOS back up to a more reasonable 27c by
the end of Friday. As at this weekend I could in
theory be a buyer at 27c on straight math terms,
but I see no big appeal in tying up another tranche
of cash in an illiquid position. Fundies are rock solid
of course, so no worries about holding through. I
just wish the management would do something
with its cash pile instead of just playing the forex
market.
Atacama Pacific (ATM.v): The 16.7% upmove looks fine on paper, but in fatc it was the
result of just two trades in which 43,000 shares changed hands. Not exactly a irreversible new
trend, but it does show that if you want in, you have to pay up (or wait very patiently for some
disillusioned seller to take nay price offered. There will be nothing doing here until volume picks
up and that’s unlikely until the company gives real news to the market.
The Copper Basket
After forty-eight weeks of 2015, The Copper Basket is showing a 38.44% 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 47.55 194.96 4.10 3.5%
2 Capstone Min. CS.to 2.03 381.95 148.96 0.39 -80.8%
3 NGEx Resources NGQ.to 1.17 187.71 144.54 0.77 -34.2%
4 Nevada Copper NCU.to 1.65 80.5 60.38 0.75 -54.5%
5 Copper Fox CUU.v 0.135 402.96 56.41 0.14 3.7%
6 Hot Chili Ltd HCH.ax 0.16 333.11 43.30 0.13 -21.9%
7 Amerigo Res ARG.to 0.27 173.65 34.73 0.20 -25.9%
8 Western Copper WRN.to 0.68 93.68 31.38 0.335 -50.7%
9 Panoro Minerals PML.v 0.295 220.64 27.58 0.125 -57.6%
10 NovaCopper NCQ.to 0.58 60.15 26.77 0.445 -23.3%
11 Regulus Res REG.v 0.35 56.39 11.84 0.21 -40.0%
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 4.71 0.15 -50.8%
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 -38.44%
12

The basket average dropped 1.7% on the week as another new low is reached. Just four stocks
recorded gains (NGQ.to, NCU.to, REG.v,
PML.v) and of those, the only real winner as 5% The Copper Basket 2015, weekly evolution
a massive boost that NGEx Resources 0%
(NGQ.to up 60.4%) got on the publication of -5%
-10%
its Filo de Sol resource update. More on that
-15%
below. There were three stocks unchanged
-20%
(HCH.ax, MNC.ax, COP.to) and that leaves
-25%
nine droppers (CS.to, RMC.v, WRN.to, -30%
CUU.v, ARG.to, NCQ.to, AQM.v, CCY.v) with -35%
the biggest downmoves coming from AQM -40%
Copper (AQM.v down 22.2%) and Amerigo
Resources (ARG.to down 20.0%, so maybe
that should be aaaaargh.to this time).
As for copper the metal, it rallied away from the big
fat U$2.00/lb level and managed to break above
U$2.10/lb briefly midweek, before fading again into
(yes you guessed it) thin Thanksgiving trading.
The source of the mini-rally seems to be a bunch of
rumours out of China about hos the government
there is going to do this and going to do that in order
to prop up either its whole economy or the metals
world or the smelter industry or just the price of
copper. The two most persistent things I heard
during the week were “investigation into illegal short
selling” and “government to buy up surplus metal at
these levels”, either of which could be true but
they’re also the easiest ones to spin out when you
want a nice sounding story that needs to basis in
proof (until after the fact). Personally I just think that
longs are scared crapless about copper going under
$2 and are doing anything to avoid it.
In a more subtle pump for copper, industry overseers CRU gave a presentation in Chile last
week and the nice people at Cochilco were kind enough to stick the Powerpoint from the talk on
their website (12). It’s in Spanish, but the graphics tell the story in the international language of
numbers and the main thrust of CRU’s argument is that things really aren’t as bad as they seem
for 2016, they still predict a modest supply deficit that should prop up prices, then as from 2017
(and accelerating into 2020) demand and therefore prices should recover and move back to the
$2.90 (or so) level. So for the thinking person’s bull case, go check that link.
Now our regular weekly warehouse comment section:
• At last, some movement and to the joys of copper bulls we see an overall drawdown in
copper stocks. The total world number dropped by 17,123 metric tonnes (MT) (-3.3%)
to finish the wek at 496,684mt.
• The bulk of that move overall move happened in Shanghai, which fed nicely into the
“China Govt Buying Up the Slack” talk we mentioned above. SHFE stocks dropped by a
noteworthy 12,136mt (-6.1%) to close at 187,152mt. The 2-handle will have to wait a
while.
• The LME also saw stocks drop again, the seocnd week running for this warehouse
system. We finished down 8,975mt (-3.6%) at 243,350mt. That’s the first time in quite
a while we’ve seen both Shanghai and LME stocks drop by an amount worthy of
13
ht4naj ht81 ts1bef ht51 ts1ram ht51 ht92 ht21 ht62 ht01 ht42 ht7nuj ts12 ht5luj ht91 dn2gua ht61 ht03 ht31 ht72 ht11 ht52 ht8 dn22
source: IKN calcs

mention in the same week, so maybe those China Gubmint rumours are true after all.
• On the other hand, the rise and rise of Comex continues unabated. Here, warehouse
stocks rose by another 3,988mt (+6.4%) to reach 66,182mt. From just 4% of the world
total, Comex now stores 13.3% of the copper hanging about in futures market
warehouses and need to be taken seriously. How high will this one go?
Here's the Shanghai-only tracker chart, which shows the sudden reversal after an uptrend in
place since August. One swallow doesn’t make a summer, so let’s see how the next week’s
worth of figures come in before jumping to conclusions. However, I concede (as a bear) that
there’s a glimmer of a hope for a slight reason to be cheerful for longs in this datachart.
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 dn22
Mt Cu
source: Cochilco
Now for notes on a couple of basket stocks:
Catalyst Copper (CCY.v): This one reported its 3q15 financials on Friday and with $121k left
in treasury and a background “do nothing” burn of around $100k per month, it’s a fair guess
that it might run a financing soon.
Yes, that’s an understatement.
It’s a Frank Giustra vehicle, so we can also guess it will be able to raise cash but at a heavy
dilutive cost.
NGEx Resources (NGQ.to): The big mover of the week was GQ, up a massive 60% on very
strong volumes after it announced after the close on Monday (13) an updated resource for Filo
de Sol, one of the deposits on the Argentine side of its Vicuña project in the high Andes that
straddles the border with Chile. To quote the NR, the headline resource number is now...
“The total Inferred Resource for the Filo del Sol deposit, at a 0.30% CuEq1 cutoff grade is:
• 381.0 million tonnes at a grade of 0.39% copper, 0.33 g/t gold and 12 g/t
silver for a copper equivalent grade of 0.69% (3.3 billion pounds of copper,
4.0 million ounces of gold, and 149.8 million ounces of silver).
This new resource estimate updates and replaces the initial resource estimate released on
December 2, 2014.”
...and that’s okay I suppose sizewise, but the grade looked pretty marginal at first sight and
overall it’s going to have to rely heavily on the gold kicker (perhaps better considered a co-
product) if it’s ever going to be a viable mine project. This is high Andes, it’s not cheap to get
there, not cheap to operate there and what’s more, it’s in Argentina (unlike Los Helados,
another part of Vicuña on the Chile side).
So on hitting the headline part of the NR I wasn’t particularly impressed, but further down
things got better. Unsurprisingly Filo de Sol isn’t a uniform block of mineralization and what

NGQ has found are two areas of higher grading material which they now call the “silver zone”
and the “copper zone”.
The silver zone: Part of the overall resource is an area that’s outlined by NGQ in this table.
I’ve scribbled in red on the tables a little bit, to highight the things I like the most
That’s four ounces per tonne silver and a total of 91.4m ounces and the type of number that
lets you leave aside thoughts of a copper or a gold mine and say “Hey, there’s a silver mine
right there”. I’ll be quick to point out that NGQ used a $23/oz price assumption for silver on its
Whittle Pit design, so I’m sure we can argue the case about that cut-off being too low, but
grade and size is on offer here, that’s not bad.
The copper zone: Another part of the overall resource, and one that’s totally separate from
“the silver zone”, is this outlined by NGQ in this table. Again my red scribbles:
Agian the Whittle Pit model is based on a high looking $3/lb copper, but the grade involved
again gives a reasonable shot at this part of the project working as a real mine, perhaps a
starter pit (and I know at least some of you out there reading these words hate the starter pit
concept, but I’m going to use it anyway). These two areas, conceptually at least, give Filo de
Sol and therefore the whole Vicuña concession a logical shot at working. High Andes isn’t an
easy place to build a mine (ask Barrick) but it’s easy enough to envisage a small mine that
expands to become a camp, built on the high grading areas that fund expansion as the mine
generates its own capex cash.
Overall it was a pretty good NR out of NGQ last week and after I’d fully digested it even I
(cynical about large copper projects and low grades at high altitudes) was expecting a pop in
the stock Tuesday morning. I even toyed with
sending out the first Flash Update in weeks to
you guys, but decided to wait and see how
the stock traded the next morning before
making a decision on that. What I wasn’t
expecting was this right:
NGQ shot from 48c to 95c in one fell swoop (a
double minus a penny) which blew out the
water any chance of a trade (that’s why you
didn’t get a Flash update). The trading was
pretty wild on Tuesday and at 65c it might
have been a buy (I was way too chicken even
to opine at that point, let alone purchase) and
when things finally settled down NGQ closed
at 77c for the week. That Friday close makes NGQ a CAD$144m stock and with just $4m or so
15

left at bank and a high burn rate, that move we saw last week looks way too much. I expect
NGQ will go for a financing on the back of its decent news last week and once that’s done, we
can take a better look. The price move last week may have been helped by the Mauricio Macri
win in the Argentina elections too, plus of course that NGEx is a Lundin Group company and
they’re never short of cheerleaders in the everso everso straight, unbiased and non-sycophantic
Canadian brokerage world.
Bottom line: Back to life? Yes. Buyable now? No. Let’s see how much and how they raise their
next year’s worth of treasury.
The Low Cost Producer Basket
After 48 weeks, the 2015 Low Cost Producer Basket is showing a 26.09% 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 9.57 11.53 -37.7%
2 Newmont NEM 18.90 528.08 9.18 17.39 -8.0%
3 Barrick ABX 10.75 1164.67 8.28 7.11 -33.9%
4 Franco Nevada FNV 49.19 156.5 7.41 47.32 -3.8%
5 Agnico Eagle AEM 24.89 214.12 5.57 26.02 4.5%
6 Silver Wheaton SLW 20.33 403.75 5.09 12.60 -38.0%
7 Kinross KGC 2.82 1146.2 2.15 1.88 -33.3%
8 Buenaventura BVN 9.56 254.19 1.19 4.70 -50.8%
9 Pan American PAAS 9.20 151.64 1.03 6.82 25.9%
10 B2Gold BTG 1.62 926.68 0.99 1.07 -34.0%
all prices in U$, using NYSE ticker prices Portfolio avg -26.09%
In the US Thanksgiving-shortened trading week, the main message was the lack of movement
in the basket. We did see four names drop slightly on the week (GG, ABX, NEM, AEM) and the
other six go up (FNV, SLW, KGC, BVN, PAAS, BTG), but aside from the 7.4% gain stuck in by
Kinross, the moves were modest in weight and volume.
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 ht92
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 ht92
|
source: ikn calcs, NYSE/Nasdaq data

The IKN basket is now 0.73% “better” (maybe “less worse” is more accurate) than the GDX
benchmark for the year. No biggie, but we eked out a little advantage as the smaller names we
featured in flat rate weighting terms did better than the bigger names.
Regional politics
Argentina: The Macri cabinet and mining
And Macri wins by around three points, my prediction goes officially down the drain and the
Western World rejoices because Argentina is sudenly “Open For Business” (or at least Paul
Singer is rejoicing). Fair enough. Since Sunday’s victory (that was confirmed early on Monday)
it’s a been a week of celebrations for the Macri supporters, plus a lot of conjecture and talk on
what his government is going to look like. Part of that last issue took better shape on Thursday
and Friday as the names of his cabinet of ministers were announced and one that caught my
eye was Sergio Bergman, who is a long-time Macri supporter, one of Macri’s inner circle of close
advisors, an environmentalist by profession as well as being a Jewish rabbi (of high repute) in
Argentina. He was announced as Macri’s new Minister of the Environment and Sustainable
Growth. Two things about this event:
1) It’s the first time ever in Argentina that “Environment”, in any shape of form, gets its
own dedicated ministry. That’s an immediate improvement in my book.
2) Bergman is an opponent of open pit mining activities.
It was therefore interesting to note that in his first comments to press after being nominated
for the job, Bergman said (14), “The question about open pit mega-mining is that it has to be
more carefully regulated”. He went on to say that, “There have been irresponsible act(s) and
depravation of the environment that end in pollution and about which we have to take charge”.
Now for sure this doesn’t mean that a Macri government is going to be an anti-mining
government, as he’s viewed as right wing, neoliberal in economic stance and in favour of
business big and small. However it’s a clear indication of the reality of the country, that anyone
expecting Argentina to shift from a difficult place to go mining to a sudden free-for-all bonanza
for mining will be in for a steep learning curve.
As well as that, I’ll reiterate (until blue in the face if necessary) that national politics are less
important than provincial politics for mining in Argentina and like it or not, that’s not going to
change under “business friendly” Macri. Or as I put it to a mining sector pal in a mail on
Monday, when asked what the Macri win means for the industry (grammar tidied up a bit, the
rest as-is):
For miners, it won't change much. Mining in Argentina is ruled by provincial
governments, not national. CFK tried very hard to promote mining but it's always
down to which province you're in. If you're looking at Catamarca, San Juan, Salta etc
then fine. If you're looking at Chubut, Mendoza, Rio Negro etc then not fine. Santa
Cruz is a tougher one to call, it becomes micro-regional.
You may get some macro advantages from a deflationary economic period as the
exchange rate comes under control and inflation gets reeled in. So include miners in
the macro and that should be a positive, if he (Macri) manages to do it anyway.
I'd predict some serious social upheaval in years two or three as the syndicates
suddenly realize their social programs and free ride jobs are disappearing. That
happens every time a non-Peronist has a go at ruling the place.
Bottom line: I’m still very leery about exposure to Argentina’s mining sector and juniors working
there. But in some ways that doesn’t matter, because with the amount of true bargains in
juniors (etc) now available who are working in true miner-friendly places (Peru, Chile, Mexico
17

etc) there’s just no need to Go Argentina for your deep discount bargain.
Peru: The campaign trail starts
The week ahead sees the Annual CADE conference in Peru, the big bash of the year for the
national chamber of commerce that’s always well-attended by national industrial bigwigs and
their assorted hangers-on. But in the year before an election the CADE conference is also seen
as the start of the official campaign trial and the leading candidates are invited to speak the the
great and the good. This year is no exception, with (in no particular order) Keiko Fujimori,
Pedro Pablo Kuczynski (PPK), Alejandro Toliedo, Cesar Acuña and Alan García al set to speak.
At the conference they’re due to set out their respective visions for the economic future of Peru
and (if they do it right) seduce enough of the moneypeople into backing their campaigns.
Sidebar: Let us be clear, the real fight is between Keiko, PPK and Alan. The other two, plus any
other minor figure who minght be running for President, is just noise. And while interjecting, a
quick reminder that Keiko is almost certain to win round one but at the same time almost
certain not to get enough votes to win outright in round one, so the big fight will be between
Alan and PPK to see who comes second to Keiko and gets into the second round run-off.
But APRA party candidate and twice ex-President Alan García is getting his blows in early, via
attacks on the early springer Cesar Acuña and via a speech last Friday November 27th which set
his economic agenda. Among the items was his vision for the mining sector in Peru and here’s a
translation of this report (15) from Peru’s State news agency ‘Andina’ (which always turns
politically neutral during the official campaign period and as such is a decent place to get news
with less filters).
He also said that the mining royalty (‘Canon Minero’) that APRA proposes will
allow rural communities that live in areas with potential for mines to directly
access a part of the resources that the State receives, in order that they
benefit from mining operations.
“Peru is a mining country, God made us miners and nobody can deny that.
What’s happened is that this mining has left the communities, the owners of
the land, without a penny. We start from there; either mining benefits all of
Peru or the local populations are going to stop mining from happening”, said
García in an interview with TV Perú.
There are no details of the “APRA mining royalty” plan yet, but by the sounds of that it’s going
to be that the State gives part of the money it receives for concession rights to the local
communities, which would fit with the narrative that communities in areas “with potential”
benefit. We’re likely to know more this time next weekend.
Chile: Small copper miners in trouble
El Mercurio reports this weekend (16) that according to State-owned Enami mining company
stats, of the approximately 1,100 small copper mining operations in Chile, 167 have closed this
year due to the drop in the price of copper. As the average cash cost of these concerns was
U$2.23/lb in 2014 (Mercurio data) they expect more to close in 2016 and beyond if the copper
price doesn’t pick up. The loss of these small mines won’t make much of a dent in the coper
supply figures going forward, but it’s a bigger internal political problem for Chile due to the
unemployment it brings.
Along with the news that Codelco has produced 9% more copper in 2015 to date than the same
period of last year, as well as La Escondida producing 6% more than YoY, the copper industry’s
squeezing out of small companies and expansion of mega-pit concerns continues. Away from
Chile, just in Peru add the Cerro Verde expansion, Toromocho and Las Bambas to the list.
Guatemala mining risk and Tahoe Resources (TAHO) (THO.to)
After thinking a while how to condense and inform on this article (17) in the Guatemalan media
18

channel and magazine Cerigua about the legal moves surrounding the mining industry in
Guatemala and how the incoming Jimmy Morales government may react, I’ve decided that it
can tell its own story so here it is in direct translation.
The declaration of a moratorium on mining licences for both operations and exploration
activity should be a serious commitment of the President Elect Jimmy Morales when
he takes office in January 2016, says the legal director of CALAS, the Centre of Legal-
Environmental Action of Guatemala (Centro de Acción Legal-Ambiental y Social de
Guatemala), Pedro Rafael Maldonado Flores.
“We know he knows nothing about the issue, he has no working group that can advise
him in this field, therefore the first thing to do is to take a reasonable amount of time
the analyse the persistent conficts (between mining companies and local populations)
the bad business that is mining for the country and the high levels of pollution that it
produces”, said the lawyer in declarations to CERIGUA during his visit to Geneva,
Switzerland to participate in the 4th United Nations Forum on Companies and Human
Rights.
Above all, he recommends that the future President revise the decision of the
Constitutional Court of Guatemala on October 28th, which via a blocking order
(Ottonote: The specific Spanish legal term for this blocking order is “Amparo”) brought
by CALAS for the first time in the country cancelled a mining licence “because there
was violation of human rights in its granting”. This concerns the ‘Sechol’ mining project
located between the regions of Senahú and Panzós, in Alta Verapaz and is a licence
that had been granted to the Mayaníquel S.A mining company.
The lawyer said that the court’s decision has been handed down, what will now happen
is that the sentence returns to the first Constitutional Court which will decide on the
definitive cancellation, which would also imply that a community consultancy process,
established in the OIT169 convenant which covers indigenous people’s territories,
would take place.
“In these communities there are a great many people who are unhappy with these
mining projects”, said the environmental lawyer. He also warned that, ”A well
orchestrated system exsists, with the support of the mining company’s private security
firms, which identifies the mani community leaders, invents cases against them in
which they’re accused of violence in the community and uses these to remove the
(local) defenders of human rights”.
The case of the conflict in San Rafael Las Flores, Santa Rosa
According to Maldonado, who is personally in charge of the legal defence of up to 125
environmental defenders, the San Rafael S.A. mining company, property of Canadian
company Tahoe Resources, even contracted a retired Peruvian military officer, Alberto
Rotondo, to design and implement a criminalization and judicial strategy against those
who would oppose the mining project.
The ex-army officer is currently in prison waiting to stand trial for acts of violence
against community members (in San Rafael Las Flores). Also, according to the CALAS
lawyer, “Since 2012 the company has faced a legal action for environmental damage
caused since the time of its construction and the legal case is about to come before a
judge.”
Added to the current conflict are elements that could activate further protest actions
and resistance, said the legal director of the environmental group. “The government of
Alejandro Maldonado Aguirre (interim president of Guatemala since the resignation of
Otto Pérez Molina) has ractivated the granting of licences in the months of its
administration, and the President elect has shown his intention to authorize those
mining projects which are necessary”, he said.
“Faced with the manifestations of social rejection (of mining), a pro-mining agenda
could generate even more conflict”, he said.
The lawyer was participating in the 4th United Nations Forum on Companies and
Human Rights, an annual event in Geneva for State, business and social organizations
representatives to discuss best practices in the business and human rights. The only
19

voluntary instrument of the UN, it covers measures to prevent, sanction and repair
violations of human rights caused by business activities.
Maldonado Flores took the opportunity of his visit to the UN internaitonal human rights
system to present the situation of threats and oppression he has faced due to his work
as legal defence in favour of communities and for people opposing the development of
mining projects in the Santa Rosa region of Guatemala.
Brazil: The Samarco tailings dam failure story continues
From bad to worse, and as this photo shows the pollution from the Samarco iron ore mine
tailings dams collapse has now reached the Atlantic Ocean, many hundreds of kilometres from
the accident site. For the record, this photo brought a big fat lump to my throat.
Photo of the moment the Samarco pollution reached the sea. Have a nice day.
Developments include the following:
1) Twelve people are reported dead, with another 21 people missing.
2) 50% owner Vale (VALE) will not be a component of the Bovespa stock exchange
sustainability index as of 2016 (18). The only way this happens is via voluntary withdrawal or
by being thrown off by the oversight body. The latter is by far the more likely reason and it
represents a enormous loss of face and prestige for one of Brazil’s biggest companies.
3) The United Nations on Wednesday directly contradicted the Samarco company, who said at
the time of the disaster that the mud let loose by the failure was non-toxic. Citing new
evidence, the United Nations Office of the High Commission of Human Rights said in a news
release (19) that the residue from the failure “contains high levels of toxic heavy metals and
other toxic chemicals” but kept the source of its revelations to itself.
4) And so after denying all reports of toxicity in the mud since the day of the disaster and
insisting he mud was “benign”, Vale started playing a morbid game of catch-up after the UN
revelations. A spokesperson for Vale on Friday (20) admitted for the first time that toxic
materials such as arsenic had been detected at levels above the permitted maximum in the
Doce River (something that becomes blindingly obvious if you watch that AJ+ video). However,
the spokesperson denied the arsenic had come from the tailings, saying that the it was
probably dislodged from from the down-valley area when the rush of liquid and mud came
through. “Oh well that’s all right then!”, thought I.
5) On Friday, Brazil’s Environment Minister said at a news conference that, “It is not a natural
disaster, it is a disaster prompted by economic activity, but of a magnitude equivalent to those
disasters created by forces of nature.”.
20

6) In a story broken by AFP Brazil on Friday (21), tomorrow Monday Brazil’s Federal
Government is widely expected to file a R$20Bn (U$5.24Bn with a B) lawsuit against BHP and
Vale for the environmental damage caused by the collapse. Try ignoring that one, bizworld.
7) The one minute and thirty-nine second video report from Al Jazz that I featured on the blog
on Thursday (22) is essential viewing. I’ve received plenty of feedback and one I’d like to share
here is from reader and long-standing exchanger of mails with IKN, “N” (very slightly redacted
because these days some subscribers’ profanity filters reject PDFs with swear words):
You know I fancy myself as a reasonably hardened tough, mining engineer who normally takes
pleasure in ripping off liberal, greenies and bunny huggers because most of the time they spew
out necessary, irrational, anti-mining BS from their coltan filled iPads.
But watching that video of those poor, suffering farmers nd fishermen in Brazil really got to
me, I'm really angry and upset about what these idiots from BHP and Vale have done. They
need to fix this, and they need to fix this now.
The mining industry does not need this ____, seriously. I'm most definitely an arm-waving
greeny on this one.
8) Reports started coming out of the Samarco mine late last week (23) that a third tailings dam
wall, one holding back 100m m3 of tailings and water, was starting to crack and new fissures
were appearing. The news has been taken seriously enough that locals have been evacuated
from the local towns once again, often against their will, by government officials and teams. For
context, the two failed dams held back a combined total of 62m m3.
Market Watching
Tis the tax-loss selling season to be jolly
Below is the chart for the Canadian Venture Exchange index versus the S&P500 index for the
period October 1st 2012 to December 31st 2012, which is chosen to illustrate the so-called Tax
Loss Selling season in Canadian stocks:
Next, this second is the chart for the Canadian Venture Exchange index versus the S&P500
index for the period October 1st 2013 to December 31st 2013.
21

Finally, this below is the chart for the Canadian Venture Exchange index versus the S&P500
index for the period October 1st 2014 to December 31st 2014. Last year was particularly vicious.
This time last year I remember thinking that the Tax Loss Selling season may arrive early in
November 2014 and be done by the time December came around. Once again I was dead
wrong, it was a vicious ride into Christmas week. Past performances don’t necessarily predict
the future but the shape of those TSXV index lines the last three years do point us to a tax loss
selling season that isn’t going to trough out until mid-December and then won’t show a rebound
until the last week. So perhaps selling a few things now and buying them back just after your
turkey and trimmings have been digested may be a good timing strategy for the month ahead.
Endeavour Silver (EDR.to) (EXK) and another warning about balance sheets
The news after the bell on Wednesday that Endeavour Silver (EDR.to) (EXK) was looking to
raise $16.5m by selling shares through its EXK listing (24) came as no surprise to your author.
That’s because as part of a trawl of newly cheap stocks that may turn out to be trades, I took a
look at EDR earlier this year. EDR isn’t one I’ve ever liked much (and neither is the silver sub-
sector these days) but as value is always dependent on price, its drop may have made it
potentially interesting. It was fair to give it a look as part of the larger trawl of PM producers,
but once I’d seen what there was to see it was quickly discounted as being too risky.
Despite the company’s claims of newly competitive cash costs and decent working capital, this
is a situation in which close examination of a company’s financials reveals significant weakness
at a balance sheet level and, with the company unable to return anything close to a profit,
things were always going to get worse. At the time I looked at the 2q15 numbers, but as this
shot of the latest version (3q15 end September) of the EDR balance sheet shows, the basic
22

numbers you might get in a corporate presentation are undermined by the most cursory of
examinations:
As detailed above, working cap at just over $20m looks okay enough. But, once we consider
that $18.9m of that is “inventories”, a line item that any operating mining company needs to
keep topped up if it wants to be considered a going concern, then a full $22m of the liabilities is
a financial debt that’s recently moved to the current part of the sheet, things get a lot tighter.
In fact that $22m financial liability is the revolving line of credit held by EDR that is due to be
re-paid in full on July 24th 2016, a little under eight months from today. As no real-terms cash
flow is being generated by its operations with silver at its current prices, it makes sense that
EDR raises now in order to cover that looming financial contingency. For sure it’s not quite the
same message that the company wants to project with its apparent reasons for raising the
$16.5m at this time....
The Company intends to use the net proceeds of the Offering, if any, together with the
Company's current cash resources, to expedite the Company's brownfields exploration
drilling programs at existing operations in order to extend their mine lives, to advance
the exploration and development of the Company's Terronera Project with further
drilling, engineering and related studies, and to add to working capital.
...but it would hardly be the first time a
junior miner hides its real reasons behind a
wall of blather and wordsmithery.
EDR is down around 30% on the year to
date but as this chart that pits its squiggly
line against that of the silver bullion ETF
(SLV) shows, to this point it’s been fairly
closely tied to the ups and down of its
underlying main metal product. I’d add that
even at 30% down on the year it’s done
better than many other silver company
names 2015, but for me that only suggests
that EDR has more to drop before it finds
23

its real level. This stock is not a bargain at current levels, its need for a cash injection has
forced it into the at-market deal and when New York opens again on Monday, it will have
chance to pass judgment on this placement deal that was announced after Wednesday’s close
when the country’s Thanksgiving holiday kicked in. Low it might be, I think EDR could go a lot
lower now we have a big clue to its obvious need for cash and the terms of this deal which
could see the shares it emits struck at lower and lower price levels. A bear market with sharp
teeth is not the right place for a mining company to give “we’re financially weak” strategy
messages.
Gran Colombia Gold refis at last (with predictable results)
You don’t get just one salutary tale on balance sheet awareness this week, you get two. As
recently as IKN340 on November 15th we had this to say about Gran Colombia Gold (GCM.to)
after it had posted a “profit” (term used very loosely) in its 3q15 period:
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.
Right on cue, GCM last week finally managed to strike a tentative deal with the creditors of its
quasi-defaulted loans, those disastrous Gold Linked and Silver Linked Notes that Serafino
Iacono decided would revolutionize the financial markets for PM miners at the time (which were
in turn heavily peddled by Fino’s friends Frank Holmes and Thom Calandra to a bunch of
unsuspecting saps). The NR on Wednesday (25) was a long one and those of you with a
penchant for financial car crashes will find a lot to rubberneck inside its pages, but perhaps the
two most important bits were...
1) “...the option to holders of each of the Gold and Silver Notes to convert up to 100% of their
respective notes on the effective date into freely tradeable common shares of the Company at a
conversion price of US$0.13 per common share, approximately equal C$0.17”. That puts an
enormous cap on any share price upside in one shot.
2) “....Company covenants that a minimum of 75% of its Excess Cash Flow, as defined below,
will be paid into a sinking fund, which will be applied towards repayment, repurchase (in the
market, by tender, or by private contract, at any price, which, for greater certainty, may be
below par) or other redemption, as the Company elects, of the 2020 Debentures”. That’s a
mouthful which translates as “No Soup For You, Shareholder”.
The effect on the share price was predictable (and if you don’t remember that pop on the 3q15
“profit” recently, here’s a spiky reminder of how people prefer to buy headlines rather than
24

research):
Moral of the story: Balance sheets matter.
Sunridge Gold (SGC.v) continued
I’m going to continue to bang on the table about the opportunity this arbitrage play provides
(and being long yself maks it that much easier to remember to do so). On Tuesday SGC filed
its 3q15 financials and the bit that interests the most is this in the MD&A, regarding the deal
into which I’ve bought and the plans for dissolution and eventual distribution of the cash from
the deal. I’m pasting the whole section, but I’ve highlighted the bits that really matter:
Planned Dissolution
The junior mineral exploration sector that the Company operates in continues to be subject to
extremely difficult market conditions, where it can be difficult, and in some cases impossible, to
raise equity funding to finance mineral property development programs in addition to funding
continued listing and reporting requirements to remain as a publicly traded company.
The Board of Directors of Sunridge has carefully reviewed and considered the options of winding
up the Company or carrying on as a publicly traded company and acquiring a new mineral
property. Management has held discussions with some of its shareholders and advisors and the
unanimous advice has been to wind up the Company and distribute all remaining cash to the
Company’s shareholders. As a result management and the Board of Directors have agreed that
when the SPA is put to a shareholder vote they will recommend to the Company’s shareholders
that Sunridge should distribute the resulting net cash as a return on capital to shareholders in two
tranches, and, after satisfying all of its liabilities, Sunridge should dissolve its corporate existence.
The amount of net cash available to be distributed to shareholders is subject to a number of risks
and uncertainties, including the timing of closing the transaction, transaction costs, settlement of
obligations of the Company, taxation, currency exchange rates and stock option and share
purchase warrant exercises, which make it impossible to be definitive at this time. However,
management currently expects that the aggregate amount of the distributions to
shareholders will be not less than C$0.35 per share, payable in two distributions. The
obligations of the Company that must be settled prior to Sunridge’s voluntary dissolution will
include payment of the severance packages to its terminated employees, exercise and payment
of the US$1,500,000 option to purchase and cancel the 2% net profits royalty interest held by the
Perry Estate, settlement of the WMC (Overseas) Pty Limited entitlement to the first US$860,000
of revenue derived from the sale of any minerals mined from the Debarwa license, payment of
applicable Eritrean income taxes and any other applicable taxes or other liabilities. After the
settlement of such obligations, all of the directors except one will resign and the Company will go
on care and maintenance for approximately six months until the receipt of the final US$7,330,000
portion of the deferred payment, plus accrued interest six months after closing the transaction.
The first distribution will be distributed shortly after closing the transaction (outside date
currently February 29, 2016) and the second tranche approximately six months later, after
receipt of the deferred payment.
Shortly after closing the transaction the Board of Directors will determine and publicly announce
the record date and the expected amount of the first distribution. The Company will likely de-list its
shares from trading on the TSX Venture Exchange on or about the record date.
The second tranche distribution would be distributed to the shareholders of record after the final
proceeds from the SPA are in hand and all obligations of the Company are settled.
The Company would then voluntarily dissolve.
That 35c estimate smack on the assumptions in IKN340, of our onservative price target for this
25

arb (which for me could be as high as 38c, but I’m not pushing my luck and 35c will be just fine
thank you). This represents a 40% upside
from Friday’s close and as this ten day
chart shows, it’s still not too late to get on
this stock at a low price and look for your
own 35c+ payola in January. The drawback
is time (or time value of money, if you like)
as SGC now expects to pay out in two
(roughly) equal tranches and the second
tranche won’t come until somewhere at the
end of August 2016. That may turn out to
be too long to wait for some of you and the
arbitrage will likely reflect that, but the still
we’re talking about a minimum of 40%
here and risk/reward is definitely on the
side of the longs. I’m the type of guy who’d
take perhaps 30c early-ish and leave the larger funds to sweep up the rest.
Conclusion
IKN342 is done, we end with a few bullet points:
• NGEx Resources (NGQ.to) came out with news that was good enough to blast through
market indifference last week. The combo of 1) from a very low level 2) news from
Argentina at an opportune good moment and 3) the Lundin stable also helped its cause
but the exploraiton results and resulting resource upgrade was good, no ifs or buts.
The stock’s been drifting down on nothing volume for a while and considering its label
as a copper exploreco, it would have been very difficult to pick it out from the bunch
just a week ago. Also it’s likely to runa financing on the back of its pop, so that’s to
consider. But it’s suddenly back on the radar here and that’s not a bad thing.
• The Minera IRL saga drags on and on. I hope we have some more specific news this
time next weekend.
• The Samarco tailings dam disaster needs far more attention than it’s getting, first and
foremost from trade papers, but this is an international headline level story that’s
getting sytematically buried. This one isn’t going away and even if Vale and BHP
pretend otherwise, neither are the toxins in the River Doce.
• Lake Shore Gold under a Loonie is an absolute steal. I haven’t mentioned Teranga
today because I’m getting a bit boring about that one, but same thing: Dirt cheap gold
producers. On the other hand, tax loss selling season may drag them even lower so the
crazy could get even crazier.
• Sunridge is cheap and now it’s not just me who says 35c, the management does as
well.
• Every time I think about Tahoe Resources my thoughts turn to Taleb’s black swans.
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
26

Footnotes, appendices, references, disclaimer
(1) http://gazettestandard.com/2015/11/28/december-rate-hike-a-possibility-according-to-the-us/
(2) http://lawrieongold.com/2015/11/28/minera-irl-egm-fiasco/
(3) http://incakolanews.blogspot.pe/2015/11/sp-angel-on-minera-irl.html
(4) http://elcomercio.pe/economia/peru/junta-accionistas-minera-irl-limited-se-suspendio-noticia-1859302
(5) https://www.osc.gov.on.ca/en/Investors_questions-complaints_index.htm
(6) http://www.fasken.com/files/Event/2508039d-8edf-46ac-a158-
52dad507f6d6/Presentation/EventAttachment/572b7f22-e024-4e6b-8243-5362e5197614/53611_2_CohenPontin.pdf
(7) http://www.marketwired.com/press-release/minera-irl-limited-reports-on-extraordinary-general-meeting-of-
shareholders-aim-mirl-2077356.htm
(8) http://www.marketwired.com/press-release/lake-shore-gold-issues-6900000-flow-through-common-shares-priced-at-
145-per-share-tsx-lsg-2077207.htm
(9) http://finance.yahoo.com/news/ground-breaking-b2gold-corp-fekola-213805409.html
(10) http://globenewswire.com/news-release/2015/11/25/790422/10157323/en/McEwen-Mining-Provides-Update-on-
NYSE-Listing.html
(11) http://finance.yahoo.com/news/starcore-board-approves-share-consolidation-150000640.html
(12) http://www.cochilco.cl/
(13) http://globenewswire.com/news-release/2015/11/23/789761/0/en/NGEX-ANNOUNCES-SIGNIFICANT-INCREASE-
IN-RESOURCE-AT-FILO-DEL-SOL-PROJECT.html
(14) http://www.lanacion.com.ar/1849513-sergio-bergman-ambiente-ministro
(15) http://www.andina.com.pe/agencia/noticia-alan-garcia-dice-se-tumbaria-a-sunedu-caso-llegue-a-presidencia-
586731.aspx
(16) http://www.aminera.com/index.php/component/k2/item/14918-ca%C3%ADda-del-precio-del-cobre-provoca-la-
salida-de-m%C3%A1s-de-un-centenar-de-peque%C3%B1os-mineros-del-mercado.html
(17) http://cerigua.org/article/exigen-al-presidente-electo-declarar-moratoria-de-/
(18) http://www.americaeconomia.com/negocios-industrias/vale-dejara-indice-de-sustentabilidad-del-bovespa-desde-
2016-tras-desastre-ecolo
(19) http://www.americaeconomia.com/negocios-industrias/onu-lodo-de-deslave-por-colapso-de-represa-en-brasil-es-
toxico
(20) http://www.americaeconomia.com/negocios-industrias/vale-confirma-que-se-hallo-arsenico-en-agua-dias-despues-
de-colapso-represa-en-b
(21) http://www.msn.com/en-ca/money/news/brazil-sues-mining-giants-for-dollar52-billion/ar-AAfKTSY?ocid=spartandhp
(22) http://incakolanews.blogspot.pe/2015/11/the-samarco-tailings-dam-disaster-video.html
(23) http://www.colombiainforma.info/internacional/nuestra-america/2923-una-tragedia-historica-minas-gerais-a-20-dias-
del-derrame-minero
(24) http://news.edrsilver.com/press-releases/endeavour-silver-announces-at-the-market-offering-of-up-to-us-16-5-
million-nyse-exk-11g073616-001
(25) http://finance.yahoo.com/news/gran-colombia-gold-announces-changes-010927305.html
27

Stocks To Follow Closed Positions 2014
Closed in 2014 closed close price
Fortuna Silver FVI.to jan'14 C$2.80 23-dic-13 C$3.19 13.9% small ST trade closed
Rio Alto Mining RIO.to jan'14 C$2.06 07-jun-13 C$2.30 11.7% trading position finally closed
Network Expl. NET.v feb'14 C$0.01 22-jul-12 C$0.005 -50.0% position closed, did nothing
Tahoe Resources TAHO feb'14 U$13.10 08-abr-13 U$21.72 -65.8% short closed due to reality
Darwin Res DAR.v mar'14 C$0.10 14-jul-12 C$0.045 -55.0% tiny risk play dropped
B2Gold BTO.to mar'14 C$3.07 28-nov-12 C$3.35 9.1% closed to free up capital
Pretium Res PVG mar'14 U$5.38 22-nov-13 U$6.50 -20.8% short closed as port longer
Gold Res Corp GORO may'14 U$5.07 26-ene-14 U$4.12 16.7% took profit
Bear Creek Min BCM.v may'14 C$1.63 23-mar-14 C$2.05 25.8% Took profit, sm near-term win
Eco Oro Min. EOM.to aug'14 C$0.48 22-sep-13 C$0.26 -45.8% sold small loser to make room
True Gold TGM.v sep'14 C$0.395 02-feb-14 C$0.41 3.8% M&A won't happen, sold
Santacruz Silver SCZ.v sep'14 C$1.04 26-ene-14 C$0.86 -17.3% silver/M&A spec, rel. small
Timmins Gold TGD nov'14 U$1.38 09-abr-14 U$0.99 -28.3% failed trade, sell, raise cash
Kinross Gold KGC nov'14 U$2.90 20-oct-14 U$2.15 -25.9% V small trade, didn't work, chau
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.145 -48.2% lost China sponsor
Stocks To Follow Closed Positions 2013
Closed in 2013 closed close price
USA Graphite USGT feb'13 U$0.93 08-ene-13 U$0.17 81.7% short tgt made/trade closed
Lachlan Star LSA.to feb'13 C$1.50 30-sep-12 C$0.95 -36.7% sold to reduce port risk
United Silver USC.to mar'13 C$0.21 28-oct-12 C$0.095 -54.8% small Ag sector trade, failed
Aurcana Corp AUN.v apr'13 C$1.07 11-nov-12 C$0.55 -48.6% closed on poor YE results
Gold Res Corp GORO apr'13 U$14.11 25-ene-13 U$9.38 33.5% short tgt made/trade closed
Marlin Gold MLN.v apr'13 C$0.075 10-feb-13 C$0.065 -13.3% closed trade
Bear Creek BCM.v may'13 C$2.58 01-abr-13 C$2.40 -7.0% near-term, time ran out
Lupaka Gold LPK.to may'13 C$1.12 23-oct-11 C$0.32 -71.4% towel thrown in
Tahoe Resources TAHO may'13 U$18.62 08-abr-13 U$14.70 21.1% took profit on ST short
OceanaGold OGC.to jun'13 C$3.03 16-sep-12 C$1.18 -61.1% sold on gold drop
IMPACT Silver IPT.v jun'13 C$1.14 13-ene-13 C$0.62 -45.6% sold on silver drop
Duran Ventures DRV.v jun'13 C$0.045 10-may-13 C$0.025 -44.4% ST trade never worked
Plata Latina PLA.v jun'13 C$0.79 10-abr-12 C$0.13 -83.5% closed
Bellhaven BHV.v jun'13 C$0.065 03-jun-13 C$0.12 84.6% closed ST trade
B2Gold BTO.to aug'13 C$3.07 28-nov-12 C$3.44 12.1% sold 1/2 to raise cash
Colossus Min. CSI.to aug'13 C$0.72 24-jul-13 C$0.79 9.7% closed thru nerves on future
Pretium Res PVG.to aug'13 C$8.20 11-jun-13 C$10.14 23.7% closed to raise cash
Bear Creek BCM.v sep'13 C$2.06 30-may-13 C$2.20 6.8% sold on pol risk decision
MAG Silver MVG oct'13 U$7.00 12-sep-13 U$5.62 19.6% near-term short
Gold Res Corp GORO oct'13 U$9.52 03-may-13 U$4.98 47.7% short tgt made, covered
AQM Copper AQM.v oct'13 C$0.31 16-oct-11 C$0.125 -59.7% closed failed trade
First Majestic AG nov'13 U$11.51 07-nov-13 U$10.50 8.8% v near term short, closed
Fortuna Silver FSM nov'13 U$4.00 07-nov-13 U$3.68 8.0% v near term short, closed
Primero PPP nov'13 U$5.70 07-nov-13 U$5.75 -0.9% v near term short, closed
Starcore Intl SAM.to nov'13 C$0.235 08-sep-13 C$0.17 -27.7% ST trade didn't work, sm loss
B2Gold BTO.to dec'13 C$2.22 28-nov-12 C$2.16 -2.7% closed ST trade to raise cash
28

Stocks To Follow Closed Positions, 2012
Closed in 2012 closed close PPS
Soltoro SOL.v jan'12 C$0.87 07-nov-11 C$0.94 8.0% cash moved to BCM.v
Gold-Ore Res GOZ.to feb'12 C$0.84 13-oct-10 C$0.98 16.7% trade closed on ELG.v offer
Minefinders MFN feb'12 U$11.68 17-nov-11 U$14.80 26.7% target made, trade closed
Iron Creek IRN.v mar'12 C$0.58 26-sep-10 C$0.31 -46.6% time up on small bad trade
U.S. Silver USA.to apr'12 C$2.18 15-mar-12 C$1.86 -14.7% ST trade no good, cut loss
Augusta Res. AZC.to may'12 C$3.10 29-jan-12 C$2.07 -33.2% bad mkt, bad trade cut loss
Bellhaven BHV.v may'12 C$0.50 22-sep-10 C$0.28 -44.0% new mgmt not impressive
Zincore Metals ZNC.to may'12 C$0.325 29-jul-11 C$0.17 -47.7% bad mkt, bad trade cut loss
Soltoro SOL.v may'12 C$0.70 18-mar-11 C$0.41 -41.4% bad mkt, bad trade cut loss
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% fail ST trade close pre split
Estrella Gold EST.v aug'12 C$0.91 27-mar-11 C$0.14 -84.6% Closed on port realignment
Fortuna Silver FVI.to sep'12 C$1.07 03-may-09 C$5.32 397.2% sell call $6.17/ Mar25
Strait Minerals SRD.v oct'12 C$0.125 09-dec-11 C$0.12 -4.0% closing coverage til FY13
Sunward Res SWD.to oct'12 C$1.47 13-mar-11 C$1.21 -17.7% sold, took loss
Gold Res Corp GORO oct'12 U$21.47 09-sep-12 U$17.40 19.0% Short trade closed
Yellowhead Min. YMI.to nov'12 C$1.00 01-apr-12 C$0.63 -37.0% sold, took loss
Primero Mining PPP nov'12 U$7.26 07-oct-12 U$6.73 7.3% Short trade closed
Bear Creek Min. BCM.v nov'12 C$3.38 07-nov-11 C$3.72 10.1% Took small profit
Vena Resources VEM.to dec'12 C$0.70 31-may-09 C$0.18 -74.3% Failed trade (caps F)
Galway Res GWY.v dec'12 C$2.19 24-nov-12 C$2.30 5.0% closed good ST arb trade
Stocks To Follow Closed Positions, 2011
Closed in 2011 closed close PPS
Sunward Res SWD.v jan'11 C$1.05 21-nov-10 C$1.63 55.2% target made, trade closed
Serengeti Res SIR.v mar'11 C$0.245 05-dec-10 C$0.285 16.3% sold pre-tgt, ST trade fail
Fronteer Gold FRG apr'11 U$2.37 03-may-09 U$15.24 543.0% buyout, trade closed
Minefinders MFN apr'11 U$9.09 07-nov-10 U$16.89 85.8% target made, trade closed
Metalline Min. MMG may'11 U$1.04 26-jan-11 U$0.89 -14.4% exit, resource disappointed
Peregrine Met PGM.to jul'11 C$0.87 06-mar-11 C$2.60 198.9% buyout offer, closed
Dynasty Metals DMM.to jul'11 C$4.20 03-may-09 C$2.85 -32.1% Sold. Fail. Move on.
Aura Silver AUU.v aug'11 C$0.22 13-oct-10 C$0.16 -36.4% Bad pick. Take loss
U.S. Silver USA.v aug'11 C$0.52 26-jan-11 C$0.71 36.5% closed to make room
B2Gold Corp BTO.to sep'11 C$2.80 12-may-11 C$4.27 52.5% target made, trade closed
Bear Creek Min. BCM.v sep'11 C$3.80 27-may-11 C$4.17 9.7% macro sell call victim
Minefinders MFN sep'11 U$14.70 10-aug-11 U$15.15 3.1% macro sell call victim
Great Panther GPR.to sep'11 C$3.03 22-aug-11 C$2.64 -12.9% macro sell call victim
Fortuna Silver FVI.to sep'11 C$1.07 03-may-09 C$5.36 400.9% sold 20%, macro sell call
Focus Ventures FCV.v nov'11 C$0.40 20-apr-10 C$0.20 -50.0% cut losses, bad trade
Regulus Res. REG.v dec'11 C$1.17 14-aug-11 C$0.52 -55.6% cut on news of poor 43-101
2009 and 2010 closed positions in appendices below
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Stocks To Follow Closed Positions, 2010
Closed in 2010 closed close PPS
B2Gold Corp BTO.to Jan'10 C$0.88 08-nov-09 C$1.49 68.2% target made, trade closed
Radius Gold RDU.v Jan'10 C$0.18 23-aug-09 C$0.40 122.2% target made, trade closed
MAG Silver MVG mar'10 U$5.60 23-nov-09 U$7.28 30.0% closed in pdac week
Riverside Res RRI.v mar'10 C$0.435 20-sep-09 C$0.60 37.9% closed in pdac week
Amarillo Gold AGC.v mar'10 C$0.81 31-may-09 C$0.70 -13.6% closed in pdac week
B2Gold Corp BTO.to apr'10 C$1.24 18-feb-10 C$1.50 21.0% target made, trade closed
Lumina Copper LCC.v apr'10 C$0.84 14-jun-09 C$1.55 51.2% total position now sold
Troy Resources TRY.to may'10 C$1.10 03-may-09 C$2.25 104.5% sold on negative results
AuEx Ventures XAU.to may'10 C$2.51 24-may-09 C$3.38 34.7% trade closed
Nevada Copper NCU.to jun'10 C$3.27 14-mar-10 C$2.03 -37.9% need to lower Cu exposure
Carpathian Gold CPN.to jun'10 C$0.39 14-mar-10 C$0.35 -10.3% too exposed to cap raising
Amerix PM Corp APM.v jun'10 C$0.065 08-nov-09 C$0.05 -23.1% victim of macro bear
Antares Minerals ANM.v jun'10 C$1.42 06-dec-09 C$2.10 47.9% sold half
Vena Resources VEM.to jun'10 C$0.37 31-may-09 C$0.23 -37.8% sold half
Minera Andes MAI.to sep'10 C$0.75 28-jul-10 C$0.95 26.7% ST trade closed
Gold-Ore Res GOZ.to sep'10 C$0.52 01-aug-10 C$0.75 44.2% target made, trade closed
B2Gold Corp BTO.to sep'10 C$1.45 25-may-10 C$2.01 34.5% target made, trade closed
Blue Sky Uran BSK.v oct'10 C$0.41 19-may-10 C$0.22 -46.3% v small v bad trade closed
Dia Bras Expl DIB.v oct'10 C$0.14 30-aug-09 C$0.35 150.0% target made, trade closed
S. Amer. Silver SAC.to nov'10 C$1.38 24-oct-10 C$1.60 -15.9% loss on short, small fail
Ventana Gold VEN.to nov'10 C$7.92 27-jun-10 C$13.51 70.6% trade closed on buyout
Lumina Copper LCC.v nov'10 C$1.42 11-aug-10 C$3.65 157.0% trade closed
Antares Minerals ANM.v dec'10 C$1.42 06-dec-09 C$8.40 491.5% trade closed
Rio Alto Mining RIO.v dec'10 C$0.69 23-mar-10 C$2.16 213.0% trade closed
Coro Mining COP.to dec'10 C$0.585 03-oct-10 C$1.24 112.0% target made, trade closed
Stocks To Follow Closed Positions, 2009
Closed positions closed closing PPS
Cardero Res CDY/CDU.to May'09 U$1.20 03-May-09 U$0.87 -27.5% sold on negative news
Eastmain Res. ER.to May'09 C$1.04 06-May-09 C$1.315 26.4% trade closed
Radius Gold RDU.v May'09 C$0.165 03-May-09 C$0.235 42.4% trade closed
Latin Amer Min. LAT.v May'09 C$0.12 03-May-09 C$0.158 29.2% trade closed
Aquiline Res. AQI.to July'09 C$2.03 16-Jun-09 C$1.68 -17.2% took loss, bad timing
Chariot Resources CHD.to Aug'09 C$0.20 12-Jul-09 C$0.415 107.5% trade closed
Castle Gold CSG.v Sep'09 C$0.64 02-Aug-09 C$0.60 -6.3% ST trade didn't work out
Guyana Goldfields GUY.to Sep'09 C$2.30 12-May-09 C$4.50 95.7% profit taken
Los Andes Copper LA.v Sep'09 C$0.09 21-Jun-09 C$0.09 0% trade closed
Pediment Gold PEZ.to Oct'09 C$0.80 09-Aug-09 C$1.00 25.0% trade closed
Minera Andes MAI.to Oct'09 C$0.68 03-May-09 C$0.71 4.4% too much bad news
Dynasty Metals DMM.to Nov'09 C$4.18 03-May-09 C$6.01 43.8% half sold
Rusoro Mining RML.v Nov'09 C$0.55 03-May-09 C$0.57 3.6% underperformed
Important Disclosure
The information and opinions contained within this report reflect the personal views of the author and therefore all
material within should not be construed as accurate or reliable or be utilized as advice for investment or business
purposes. Independent due diligence and discussions with ones own investment and business advisor is strongly
recommended. Accordingly, nothing in this report should be construed as offering a guarantee of the accuracy or
completeness of the information contained herein, as an offer or solicitation with respect to the purchase or sale of any
security or as an endorsement of any product or service. All opinions and estimates included in this report are subject to
change without notice. It is prohibited to copy or redistribute this report to any type of third party without the express
permission of the author.
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