IKN #345Premium

The IKN Weekly
Week 345, December 20th 2015
Contents
This Week: The IKN Weekly Christmas/New Year schedule, Gold: Much ado about nothing.
Fundamental Analysis: The Minera IRL (IRL.to) (MIRL.L) EGM vote result: What it means
(and what it doesn’t mean), Jaime Pinto: The measure of the man.
Stocks to Follow: Overview, B2Gold (BTG) (BTO.to), Lake Shore Gold (LSG.to) (LSG),
Teranga Gold (TGZ.to) (TGZ.ax), Starcore Intl (SAM.to), Lara Exploration (LRA.v).
Copper Basket: Overview, Capstone Mining (CS.to).
Low Cost Producer Basket: Overview, Buenaventura (BVN), Barrick (ABX).
Regional Politics: Argentina: Comment from the mining sector on the national government
changes, Argentina: The Mendoza Supreme Court ratifies the “no toxic material” law, Peru and
Ecuador mining sectors to work together more closely.
Market Watching: Almaden (AMM.to) (AAU) redux, Starcore Intl (SAM.to) rolls back and
reports its quarter.
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
The IKN Weekly Christmas/New Year schedule
For new subscribers and long-standing sufferers alike, here’s a short heads-up of the schedule
over the holiday period at The IKN Weekly.
1) Next week, IKN346 dated December 27th: Next week’s edition will be a somewhat
reduced one, as on a practical level there’s not going to be much going on in the mining sector.
There will be even less in the LatAm political world which invariably goes into hibernation as
from tomorrow Monday, will poke its head out for a couple of days between the 28th and 30th,
then radio silence until after New Year (though by then mining news will be flowing again).
However, in next week’s edition I will roll out the new compositions of The Copper Basket and
the Low Cost Producer Basket. Here are some notes on what I plan to do with those two
sections next year (as well as asking for suggestions, as usual).
Regarding The Copper Basket, I plan to include more larger sized companies and a few more
producers, i.e. ones that run better traded volume than the dead-and-dying minnows that
currently overpopulate the index. The Copper Basket this year became semi-dead due to the
downturn and about half way through stopped being a useful reflection on the sub-sector. I’m
going to re-work it to avoid that. And as usual, feel free to write in and suggest companies that
you might have for the list, as I have a draft list complete but I’m still open to ideas (and yours
are often better than mine).
Regarding the Low Cost Producer Basket I’m generally happy in the way it’s performed this year
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but I still plan to tinker with the composition a little, for two reasons. Firstly because I want
larger cap names on the list in order to separate it from the juniors we cover and typically
recommend. I like the way that this list shows a different aspect to our main focus and provides
perspective. Secondly, I’m going to try and pick names not just to track the GDX, but beat it.
It’s nice to have a tracker that works, but this year the relationship between the two squiggly
lines has been tight to the point of making the IKN list redundant.
2) Then IKN347 dated January 3rd 2016 will be a “bare bones” edition on most matters,
updating the tables and covered stocks as well as beginning the year’s new baskets, but there
will be substance as we take the opportunity to run the regular quarter-end “Regional Risk
Review”.
Coverage will then go back to normal in IKN348 dated Sunday January 10th.
FOMC and Gold: Much ado about nothing
Two facts:
• Last Friday’s London PM fix for gold was U$1,072.50/oz
• This Friday’s London PM fix for gold is U$1,062.50/oz
And once the Fix was in gold managed to drift up and close the week U$1,067/oz and we’re still
a long way from the sub-$1K predictions so common out there in talkland. In other words, all
that FOMC thing and then quadruple witching on top left us with a move of ten bucks in gold,
less than one percent and as such we end another tale told by an idiot, full of sound and fury,
signifying nothing*. Yep, that Fed move was baked in and in the end the biggest swings came
Thursday (down) and Friday (up) as the Purveyors-Of-Financial-Truth dumped various things
then bought them back through the options expiry period in order to create a few more
Christmas turkeys from the weak hands playing the futures.
We should also note how the Gold-Under-A-Thousand people (today we capitalize) have quietly
shifted their goalposts, as there were plenty of “Gold Under $1k Soon” or “Gold Under $1k in
the first half of 2016”. And of course, even though they were wrong about 2015 they may be
right in 2016.
Though that’s as tied into the fate of the US Dollar as anything else at this point and on that
subject, while professing to be no expert on Fedwatching, I can’t help but think that the way in
which the market quickly did a new round of baking-in and now assumes the Fed will raise four
times in 2016 is an assumption with way more risk to the downside than the upside. After all,
this is the same Fed who were going to bring us Lift-Off (ahh, love those buzzwords) in early
2015, then mid-2015 before finally getting round to the move last week. The reaction of a
strong US Dollar is exactly the type of brake on GDP growth that Janet & Friends don’t want to
see, so it will only take one or two sets of disappointing macro numbers to see the rate hike
assumptions tumble back to three or two...or one more. That’ll be bad for the dollar. That’ll be
good for gold in US Dollar terms.
*With apologies to The Bard for mixing my references twice over
Fundamental Analysis of Mining Stocks
The Minera IRL (IRL.to) (MIRL.L) EGM vote result: What it means (and what it
doesn’t mean)
Today’s Fundies isn’t pressing stuff for most of you, as the stock in question is suspended from
trading. All the same I’m going to dedicate the space to an analysis of the Minera IRL EGM vote
and the fallout from it so far, because it’s necessary to get a handle on what seems to be going
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on in the background, especially on the part of Team Hodges who haven’t given up on their
plan to steal the company from under the noses of the shareholders: On the contrary, they’ve
redoubled their efforts. For a TL:DR summary, here are the main points:
• Rio Tinto (RTZ) used their vote block selectively and created a mixed board, with two
directors nominated from “Team Hodges” and two from “Team Benavides”. Why they
might have done that is up for debate, but press reports now link the company to a
new investment fund and RTZ’s moves may be connected to that.
• The NOMAD (Nominated Advisor) in London, Canaccord Genuity, is playing a dirty
game and is now clearly biased towards the cause of Team Hodges. I now expect
Canaccord will come under investigation by the AIM exchange and its NOMAD advisors
will find themselves in hot water with the authorities at some point in the New Year.
For a little extra light on this see the examples noted below, but the topical issue is that
if Diego Benavides had been nominated he would either have been blocked from
taking his seat by the NOMAD or the NOMAD would have resigned and started actions
at the AIM exchange that would have almost certainly caused the stock to have been
de-listed.
• In effect, Diego Benavides withdrew his nomination in order to keep his powder dry.
His reason was to note the criminal charges he now faces in Peru, brought by ex-head
Jaime Pinto.
• The two “Team Hodges” members of the new board, Robin Fryer and Doug Jones, have
already shown their intent to continue pressurizing the company and, in effect, destroy
it from within. The prima facie evidence of this is that Jaime Pinto, although voted off
the board with 92% of shareholders against him, has been allowed to continue with his
power of attorney over the company. Jaime Pinto continues to be active in the Team
Hodges cause even after being voted off, in much the same way as Daryl Hodges is still
pulling the strings behind the scene.
Summing up the overview, even though we had the EGM vote and even though Pinto was
removed in an overwhelming vote against him, the situation remains unacceptable to the
shareholder base of the company, who continue to be ignored by Doug Jones and Robin Fryer.
We can expect more dirty tricks from them in the days ahead.
The EGM vote
And so the EGM happened, the result was a valid and we have a new board comprising of Doug
Jones, Robin Fryer, Julian Bavin and Jorge Ramos. That on the face of it counts as two from
“Team Hodges”, two from “Team Benavides”. As to why the final result was like this, we need
to consider how Rio Tinto (RTZ) used its voting power and block of perhaps 45m votes. To do
this, let’s first re-cap on the theoretical scenarios we posited in IKN344 last week and then
compare them to the results as seen.
Please also note the way in which the voting for the people involved (1) closely matched the
three scenarios we supposed last week:
Scenario One was if Rio Tinto (RTZ) voted its shares with the Team Benavides preference. In
that case we guesstimated that the result would be 93% to 7% and in reality, with a little
leeway, that happened in two specific cases:
• Jaime Pinto lost by 92.1% to 7.9%
• Julian Bavin won by 92.0% to 8%
Scenario Two was if Rio Tinto (RTZ) abstained. In that case we guesstimated that the result
would be 90% to 10% and that happened in one specific case:
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• Jorge Ramos won by 89.1% to 10.9%
Scenario Three was if Rio Tinto (RTZ) voted its shares with the Team Hodges preference. In
that case we guesstimated that the result would be 62% to 32% and mean that the votes
wouldn’t reach the necessary 66.67% barrier in order to be carried. In reality on this I was a
little out, it turns out RTZ was somehow moving more than just 44.3m shares (my guesstimate)
and the weighting was heavier, but the result was the same in practical terms and we saw its
effect in five of the votes:
• The vote to remove Robin Fryer received 57.3% approval. This didn’t get to
66.67% and Fryer survived.
• The vote to remove Doug Jones received 57.2% approval. Ditto.
• The vote to appoint Len Harris received 56.9% approval. Even though a simple
majority this wasn’t the necessary 66.67% to get him voted onto the board and so the
motion was not carried.
• The vote to appoint Frank O’Kelly received 56.8% approval. Ditto.
• The vote to appoint Armando Lema received 56.9% approval. Ditto.
As for Diego Benavides himself the reason why he withdrew his nomination was due to the
legal charges that have been heaped on him by Jaime Pinto. These would have in effect
allowed the very biased and pro-Team Hodges NOMAD, Canaccord Genuity London (see the
separate section on the warped world of this NOMAD below) to have blocked his approval. As
such he prefers to stay on the sidelines.
To round all that up, because Rio Tinto (RTZ) used its all-important voting block selectively and
voted the way it did, it managed to select two people from Team Hodges and two people from
Team Benavides (and even if Diego Benavides had been nominated, a swoop of the pen at the
NOMAD and it still would have been two and two). Why RTZ voted the way it did is the stuff of
speculation at this time and I’m not going down that speculative road at the moment, but it is
fair to point out that the apparently very well informed journalist at Peru’s El Comercio on
December 17th wrote the following (translated) (2):
A fund will move into IRL Ltd
An investment fund specialized in mining will shortly enter as a shareholder of Minera IRL Ltd,
according to sources close to the deal. The arrival of the fund will bring an injection of new money
to the company, which has been going though a critical phase due to its current corporate crisis.
And let’s leave it at that for today.
The new board shows its reluctance to change matters
We could go round the houses on this, but to cut to the chase Power of Attorney (POA) was
awarded to Jaime Pinto and (IRL Ltd controller) Carlos Yrigoyen by the old board of directors so
that Pinto (in particular) could act on behalf of the board.
Sidebar: Power of Attorney (3): A written document in which one person (the
principal) appoints another person to act as an agent on his or her behalf, thus
conferring authority on the agent to perform certain acts or functions on behalf of the
principal.
It gives him the power to do what he wants, when he wants, with the IRL assets. The idea
behind the POA was related to the gaining of control of the subsidiary, Minera IRL SA, because
the IRL Ltd (Team Hodges) people want to transfer all assets out of the subsidiary and into the
mother ship company and from there, they can do what they want with them.
Now that’s fair enough you might say and if you believe the Team Hodges people they were
only going to do that to clean up the structure and take the assets away from an overly
powerful and quasi-independent subsidiary that was up to no good. However, that argument
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suddenly unravels when you realize that the new board of directors has not revoked the POA to
Jaime Pinto. It also gets a different light when you consider the way Pinto really operates (see
below for more on that).
Yes folks, that’s right: Under any normal change of board, the first thing that would happen is
that powerful legal devices such as POA would be taken away from an outgoing board member
immediately. But in the crazy world of IRL and because of the obstinacy of the two Team
Hodges people left on the board of directors, Jones and Fryer, the person that you voted out by
a tally of 92% to 8%, Jaime Pinto, still has full control over the assets of Minera IRL Ltd.
Not only that, but we also hear from our reliable contact in the town of Ollachea that in the last
few days, i.e. after the EGM vote, Jaime Pinto has been in contact with the town’s authorities
asking for a meeting. What he might want to do or say there is unknown, but it’s mightily
strange that a person recently kicked out of his post at IRL would care enough about the
people affected by the project at his old job, is it not?
The warped world of the NOMAD
Another part of the equation that needs light shone upon it is the role of the Minera IRL
NOMAD, Canaccord Genuity. It’s been evident for a long time that it has not been doing its
fiduciary duty correctly and has been clearly biased towards Team Hodges throughout this
mess. Examples of this bias abound, but the most obvious one is their failure to acknowledge
and have remove the Minera IRL Ltd “EGM Fight” website, irlmining.com (4) that’s run by Team
Hodges and is filled with highly biased, blatant op-ed material, badly edited videos that give a
wholly incorrect impression of the relationship between Diego Benavides and the Ollachea
community (heavy editing of a two hour video into six minutes of lowlights) etc etc. The mere
existence of this unofficial company controlled website that sits side-by-side the official IRL
website isn’t just against the AIM rules, it’s wildly and crazily against the rules. And the NOMAD
must abide by those rules, but Canaccord Genuity simply ignores them, it seems.
The NOMAD allows Team Hodges to run roughshod over another AIM rule by allowing them to
give out an incorrect phone number on all their press releases, as the person quote here (5)
explains (with “Oliver” being one of the two NOMAD declared brokers at Canaccord Genuity):
“When you do get Oliver on the phone, let him know that the phone number
for Eric Olson at +1 (416) 907-7363 is a fraud. It's on all their recent NRs. But
the poor darling receptionist on the other end doesn't work for IRL and she
thinks she's supposed to pass messages on to Brad Boland.”
Then there’s the way in which the NOMAD, which MUST sign off on all press releases, allows
Jaime Pinto to release NRs to Peruvian newspapers a full day before they’re released to the
world (6). Again, 100% rulebreak but Canaccord just lets it happen.
And this “let them release anything” attitude from the NOMAD, which will land them in hot
water with the authorities one of these fine (and near future) days, also showed up only this
week when Jaime Pinto sent out a press release to journalists (7) and industry people on
Monday to tell them all about the new criminal charges laid against Diego Benavides and
others.
As this NOMAD has been patently failing to do their duty for months and showing clear bias
towards “Team Hodges”, we should be vigilant for any tricks they might try to pull. But help
may well be at hand on this, as we hear moves are afoot in London to investigate the actions of
the IRL NOMAD and if so, the fruits of the nascent investigation should be with us at some time
in the new year.
Jaime Pinto: The measure of the man
And to wrap up, I want to give you an idea of the real Jaime Pinto, the person that passes
himself off as whiter than white and doing valiant battle against the forces of evil and
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corruption. For this we have to go back to late September and early October, the time when I
first shone light on him by posting on September 28th (8) (and featuring in IKN333 a day or so
before) about his shady history with Elliott Associates and the bonds deal during the notoriously
corrupt Fujimori government in the 1990’s, a deal that was judged as a clear case of corruption
by a later congressional inquiry. To get the context across there’s need for some back-story so
bear with me, but the point to make is in the screenshot of the mail at the end of the exposé.
After publishing that “The Talented Mr. Pinto” note (8a), Jaime Pinto asked a mutual
acquaintance (somebody I know and who is totally innocent in this by the way, his intentions
were and still are 100% open and honest) for my personal e-mail address. I then received a
mail from Pinto out of the blue, but correct and polite, asking me for a meeting so that he could
give his side of the story. I thought that fair enough so after a couple of completely cordial mail
exchanges we agreed a time and place in Lima and I bought a return plane ticket.
However, just a couple of days before we were supposed to meet, I found out that he and the
board (others Fryer and Jones) had voted not the pay the company employees’ payroll and
salary for that month (even though there was more than enough treasury to cover payroll).
This was a disgusting turn of events from management and I told Pinto exactly that in a mail. I
also said that if this was the type of person he was, there was no point in meeting and I
cancelled on him.
On hearing that, his attitude didn’t just change to cold, but it went openly hostile and
aggressive (and I realize that’s nothing I don’t attract on a regular basis from mining sector
scumbags, but the change of tone was startling). After the first few mails calling me a coward
for cancelling the meeting and accusing me of never having bought a plane ticket in the first
place (he wanted me to send him a photo of the ticket stub!). And for what it’s worth, it’s why
this post (8a) with (among other things) a photo of me in a Lima Starbucks wearing a “The
Pilot” baseball cap and sipping a latte with “Jaime” written on it exists...I thought that I’d have
fun that day with my already bought plane ticket, rather than cancel it). Anyway, back to the
story and once the insult mails started flowing I simply told him he was wasting his time and
not to mail me any longer, I wasn’t going to answer him. But the mails continued, he decided
to nickname me “Mr. Morality”, demanding a meeting etc. Here is a screenshot of a couple of
the mails in the string (as examples, if anyone wants to se the full string of exchanges I can
forward it, I have nothing to hide)
The mails stopped coming on October 2nd (by the way, that youtube link is to the song “Just
You Wait” from the musical ‘My Fair Lady’). Then another popped up on October 19th (the
“jajajajajajajaja....and this is only the beginning) which came just before the Minera IRL Ltd
circular that announced the EGM for November 26th. I also ignored that and made no reply.
We now get to the point of this section on Pinto. That same evening October 19th he sent me
this below, after I’d written on the blog that he had traveled to London in order to present the
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Team Hodges case. That day I’d also posited that the EGM would happen on December 4th (in
fact I was out by a week and a bit, the first one happened November 26th).
Anyway, here’s what he decided to write to me:
And here’s the body of that written copied out so that it’s nice and clear. My bold type:
You have it so wrong Mr. Morality, I never traveled to London. So now you
read my mind: the EGM will be on December 4.
You know, I have a nephew that started today school in (name of school
removed) in Arequipa!
When would you like to meet Mr. Morality?
I’m going to have so much fun!!!!
Cheers
J. Pinto.
And surprise surprise, the name of the school he mentioned in his mail is the name of the
school that my two daughters, aged nine and eleven, attend. Cute. And he then makes another
demand to meet when I’d already made my position crystal clear. Double cute.
Now for sure he’s a lawyer and knows how to write something that can be construed in a court
of law as innocent. But the reason why he suddenly and for no reason whatsoever mentioned
the name of my daughter’s school in Arequipa (when he live many hundreds of miles away in
Lima) in a total non-seq manner is patently obvious and believe me, it’s not funny to receive a
mail like that from a person who’s already shown himself willing and able to use a whole bunch
of dirty tactics. I’ve waited patiently for the EGM and the kicking out of Pinto to make this
public, and today’s the day.
• This is the person who accuses other people of being corrupt and underhand.
• This is the person, Doug Jones, that you are supporting and protecting.
• And this is why anyone with a brain should oppose the continued efforts of Team
Hodges to take over a company with an extremely valuable asset that’s currently
valued at peanuts due to the mess Team Hodges has deliberately concocted in order to
steal it form under shareholders’ noses.
Stocks to Follow
Of our 14 names currently open in the ‘Stocks to Follow’ list, three managed to register gains in
another tough week (LSG.to, MUX, REG.v) and another five were unchanged (ATM.v, LRA.v,
DNA.to, IRL.to suspended, FCV.v), mostly due to the overriding apathy towards tinycap stocks
and not because they held out better than any others. That leaves six stocks as weekly losers
(BTO.to, TGZ.to, SAM.to, FOS.to, SSP.v, TGM.v) and of those, the biggest percentage loser was
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Sandspring (SSP.v down 13.3%), with a necessary spotlight on the 6.7% lost by Top Pick
B2Gold as well. Of the winners, Regulus as the best (REG.v up 15.8%) while one cheer is
deserved by MUX and its 9.5% gain (though how much of that was tape-painting will only be
revealed next week).
We currently have 14 open positions in our 'Stocks to Follow' list, one below our self-imposed
15 name maximum. Three trades are green, eleven are 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$1.54 -29.0% Top Pick, 4q15 shaping v well
Metals Producers (in current order of preference)
Lake Shore Gold LSG.to STR buy C$1.07 07-apr-15 C$1.12 4.7% M&A tgt 1.50 tgt
Teranga Gold TGZ.to STR buy C$0.55 15-feb-15 C$0.49 -10.9% V cheap sub-60c but no momo
McEwen Mining MUX hold U$1.09 25-jan-15 U$1.04 -4.6% popped above U$1
Starcore Intl SAM.to spec buy C$0.48 10-jan-15 C$0.275 -42.7% 4-for-1 rollback, tgt 76c
Land Grab Stocks (in current order of preference)
Phoscan Chem FOS.to hold/sell C$0.28 29-mar-15 C$0.27 -3.6% Under offer, may sell
Sandspring Res SSP.v spec buy C$0.195 18-oct-15 C$0.13 -33.3% Risky small play, 30c tgt
Atacama Pacific ATM.v hold C$0.19 26-apr-15 C$0.145 -23.7% Spec buy, cheap adv proj
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.24 -79.1% solid biz model, LT hold
Other Recommended Stocks (in current order of preference)
Dalradian Res DNA.to STR buy C$0.64 27-oct-13 C$0.70 9.4% 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$0.23 27.8% 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$0.22 -26.7% Comm. Rels slow progress
Closed in 2015 closed close price
Argonaut Gold AR.to jan'14 C$1.47 14-dec-14 C$2.53 72.1% Big gain small time, profit taken
Amerigo Res ARG.to jan'14 C$0.405 20-jul-14 C$0.285 -29.6% Given up on weak Cu prices
Reservoir Min. RMC.v jan'14 C$6.05 18-jun-14 C$4.12 -31.9% sold on Cu downturn
Coro Mining COP.to jan'14 C$0.075 26-jan-14 C$0.035 -53.3% sm, sold on Cu downturn
Fortuna Silver FSM mar'15 U$4.12 10-nov-14 U$3.75 9.0% Short used as hedge
GoldQuest Min. GQC.v mar'15 C$0.26 27-oct-13 C$0.085 -67.3% given up ghost
Rio Alto Mining RIO.to apr'15 C$2.30 07-apr-11 C$3.57 55.2% Top pick, bot out, big win
Timmins Gold TGD jun'15 U$0.60 19-apr-15 U$0.62 3.3% near-term trade, out of time
First Majestic AG jul'15 U$10.51 10-aug-14 U$4.55 56.7% horrible failed trade
NovaCopper NCQ.to jul'15 C$1.05 09-apr-14 C$0.50 -52.4% no more Cu exposure, sm sell
McEwen Mining MUX aug'15 U$0.695 21-jul-15 U$0.92 32.4% Closed nearterm flip for win
Midas Gold MAX.to sep'15 C$0.39 21-sep-15 C$0.35 -10.3% Sm. trade idea that didn't work
New Gold NGD oct'15 U$2.18 23-aug-15 U$3.05 39.9% trade closed, profit taken
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.
B2Gold (BTG) (BTO.to): Started badly, finished well. The $300m Shelf Prospectus news last
Friday evening (see IKN344 last week) weighed heavily on the price at the open Monday, more
than I thought it would (therefore more than it deserved ☺). A late Friday 6% was the
consolidation and it’s notable there were quite a few poppers late Friday, some like BTO
involved in index re-ratings (hence the 42m or so BTO shares that changed hands on the
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Canadian ticker in the AH period), others like Torex (TXG.to) or MUX that seemed to do it just
for fun.
Lake Shore Gold (LSG.to): A late Friday
pop into the close can be just tape-painting,
but as this one in LSG (Canadian ticker)
happened on some significant volume it’s
definitely more interesting than the average
spike.
Teranga Gold (TGZ.to) (TGZ.ax): News
from TGZ Thursday is that via his “Tablo
Corp”, the new big investor in TGZ David
Mimran added another 5,833,500 shares of
TGZ to his pile (via private transfer, not open
market, and paying 54c a pop) which brings
his total holding up to 45,033,500 shares, or approximately 11.5% of shares out. That’s a
decent mark of approval from the new TGZ whale and all the evidence you’ll need that his was
not a mere one-time hit.
Trading in the stock was dull once again, 49c is the price being paid.
Starcore Intl (SAM.to): Because it got long and has a few charts, I’ve put the SAM
commentary into ‘Market Watching’ below in order to avoid clutter.
Lara Exploration (LRA.v): I think LRA is dirt cheap at these levels and will reward the buyer
with patience who can think longer-term when properties will have true asset value again. That
was the thinking in this year’s “Land Grab” sub-section and just by looking at the red ink it’s an
idea that hasn’t worked, the timing was obviously out and the market has been worse than I
initially expected.
But I’m not the only one who thinks LRA is cheap at these levels:
That’s this record (9) of insider buying by company head honcho Miles Thompson, who bought
and paid for 101,500 shares of LRA last week, paying between 23c and 24.9c (the average 24c,
roughly).
The Copper Basket
After fifty-one weeks of 2015, The Copper Basket is showing a 44.18% loss to level stakes.
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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 2.03 381.95 145.14 0.38 -81.3%
3 NGEx Resources NGQ.to 1.17 187.71 106.99 0.57 -51.3%
4 Nevada Copper NCU.to 1.65 80.5 48.30 0.60 -63.6%
5 Copper Fox CUU.v 0.135 402.96 46.34 0.115 -14.8%
6 Western Copper WRN.to 0.68 93.68 33.72 0.360 -47.1%
7 Amerigo Res ARG.to 0.27 173.65 32.13 0.185 -31.5%
8 Hot Chili Ltd HCH.ax 0.16 333.11 31.98 0.096 -40.0%
9 NovaCopper NCQ.to 0.58 60.15 25.26 0.420 -27.6%
10 Panoro Minerals PML.v 0.295 220.64 24.27 0.11 -62.7%
11 Regulus Res REG.v 0.35 56.39 12.41 0.22 -37.1%
12 Metminco MNC.ax 0.008 2650 7.95 0.003 -62.5%
13 AQM Copper AQM.v 0.06 141 4.94 0.035 -41.7%
14 Coro Mining COP.to 0.045 159.37 3.98 0.025 -44.4%
15 Catalyst Copper CCY.v 0.305 31.41 3.77 0.12 -60.7%
NB: HCH.ax & MNC.ax priced in AUD$, rest CAD$ Portfolio avg -44.18%
Yes the overall basket dropped again last week 5% The Copper Basket 2015, weekly evolution
and gave us another record low, but it was only 0%
-5%
0.17% this time and there were several stocks
-10%
that put in (dead cat?) bounces, which -15%
managed to leaven out the losers. Five of our -20%
-25%
15 stocks produced weekly gains (CS.to, -30%
NCU.to, WRN.to, REG.v, COP.to), another three -35%
-40%
were unchanged (RMC.v, MNC.ax, AQM.v) and
-45%
seven were losers (NGQ.to, PML.v, CUU.v, -50%
ARG.to, HCH.ax, NCQ.to, CCY.v). Best
percentage winners were Coro (COP.to up
25.0%, which was in effect half penny but a
win is a win), Regulus (REG.v up 15.8%) and
Western (WRN.to up 12.5%). As for the losers, the
only that broke a double figure percentage loss was
Hot Chili (HCH.ax down 12.7%).
In real terms, most of the moves last week were
penny-here-or-there, which is more about the
complete apathy the market has towards this sub-
sector of stocks than of steady ships.
As for copper at market, prices showed some sharp
fluctuations but as this daily chart indicates, we’re
still in this “new normal” $2.00/lb to $2.10/lb range,
give or take a penny.
Now our regular weekly warehouse comment
section:
• In a quiet trading week (unlike stocks, copper’s movements were modest in the face of
the Fed decision) overall world copper stocks in the official warehouses rose by 7,319
metric tonnes (MT) (+1.6%) to finish at 475,951mt.
• Shanghai SHFE rose for the first time in three weeks, up 9,205mt (+5.4%) to close at
179,612mt.
10
ht4naj ht81 ts1bef ht51 ts1ram ht51 ht92 ht21 ht62 ht01 ht42 ht7nuj ts12 ht5luj ht91 dn2gua ht61 ht03 ht31 ht72 ht11 ht52 ht8 dn22 ht6ceD ht02
source: IKN calcs

• LME dropped but only very slightly down a thin 850mt (-0.4%) to finish Friday at
231,825mt.
• Comex stocks also dropped by a small amount, down 1,036mt (-1.6%), to finish at
64,514mt.
Here's the Shanghai-only tracker chart, which notes that small uptick. We’re now moving into
the period between Christmas and the Chinese New Year that usually brings stock building in
the world’s main warehouses.
In 2013 the peak came in Shanghai Futures Exchange Warehouse Stocks, 2014/2015
March at 220k in Shanghai, in
260000
2014 the peak came slightly
240000
later in April at 240k. It’s been 220000
an abnormal year in the 200000
180000
warehouses and Shanghai’s
160000
levels may quickly add from a 140000
relatively high current number 120000
compared to December of the 100000
80000
last two years. We’re arguably
60000
60kt higher this time around,
which would make 300k a
viable high end number. If that
were to occur and even though
warehouse inventories haven’t been a great guide to price moves in recent months, it’s a near-
guaranteed damper on any bullish rebound.
Now a note on just one of our basket stocks this week:
Capstone Mining (CS.to): This is one of the names most notably marked down by Canaccord
in its analysis end-year disposal sale report
on Thursday (10) which took the sword to
most of its base metals names and in the
case of CS.to, stuck a 30c price target on a
35c stock. The message should be clear
enough.
In trading CS managed to rebound to a 3c
gain on the week, closing at 38c. That’s
because nobody listens to Canaccord any
more, not since Joe Mazumdar left to join
Brent Cook at Exploration Insights anyway.
The Low Cost Producer Basket
After 51 weeks, the 2015 Low Cost Producer Basket is showing a 27.07% loss to level stakes.
11
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 ht31
Mt Cu
source: Cochilco

company ticker price 1/1/15 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Goldcorp GG 18.52 830 9.63 11.60 -37.4%
2 Newmont NEM 18.90 528.08 9.35 17.71 -6.3%
3 Barrick ABX 10.75 1164.67 8.42 7.23 -32.7%
4 Franco Nevada FNV 49.19 156.5 7.18 45.88 -6.7%
5 Agnico Eagle AEM 24.89 214.12 5.58 26.07 4.7%
6 Silver Wheaton SLW 20.33 403.75 4.98 12.34 -39.3%
7 Kinross KGC 2.82 1146.2 2.15 1.88 -33.3%
8 B2Gold BTG 1.62 926.68 1.04 1.12 -30.9%
9 Buenaventura BVN 9.56 254.19 1.03 4.05 -57.6%
10 Pan American PAAS 9.20 151.64 0.96 6.33 -31.2%
all prices in U$, using NYSE ticker prices Portfolio avg -27.07%
The arrow pointed solidly South for the larger PM producer stocks last week, with all of our 10
components registering losses once
again. The biggest percentage drops
came from Pan American (PAAS down
11.3%), Buenaventura again (BVN
don 10.2%), Newmont (NEM down
7.4%) and Silver Wheaton (SLW down
7.3%, it was another bad week for
silver). Although Goldcorp also lost
some ground, its loss was much less
than that of Newmont and thanks to
that it’s regained the top slot in the
Market Cap league table. Garofalo will
be happy.
As the tracking chart shows, we’re again bouncing down at this 27% to 30% level that’s already
been visited three times since August. If that’s any guide, there’s a pop in the pipeline. As our
basket carries smaller market cap stocks at the same weighting as larger ones, due to the
downturn last week hitting the smaller ones harder we lost ground on the GDX benchmarker.
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%
12
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 ht31
The Low Cost Producer Basket: Weekly performance
30% and comparative to GDX control
20%
10%
0%
-10%
-20%
-30%
-40%
|
source: ikn calcs, NYSE/Nasdaq data
Buenaventura (BVN): On Thursday (11) debt graders Moody’s dropped BVN’s credit rating
from Baa3 to Ba1, with a negative outlook on the new rating to boot (they say it could go lower
if BVN doesn’t refinance its debt pile during 2016). The drop from Baa3 to Ba1 is a significant
one, because it means BVN lost “investment grade” status” (it was on the bottom rung) and is
now classes as “speculative grade (the top rung thereof) (12). That in turn means that funds
that only hold investment grade paper by mandate are required to dispose. It also means that it
will cost BVN more to refi if they get round to that. As a result (and after trying to rally with the
rest of the market early Friday, reality hit the stock and it closed at new lows, just over $4.
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 ht31
basket
gdx control
source: Google Finance, IKN calcs

At what point is this a buy? Which is of course the same question I posed when BVN broke $5,
then rested for a while at $4.50 and of you’d bought a thousand shares at $5 just a couple of
weeks ago, they’re now worth a thousand dollars less. Not funny.
My contention remains that BVN may look as though it’s under potential liabilities stress, but its
structure and close Benavides family control, plus they’re attitude on life, mean that BVN the
company still has plenty of sources of capitalization if the world market gets snooty and
demands too much. Then again Roque & Co aren’t stupid either and they’d ant to get a bargain
price for any capital injection, so this process may continue for a while longer.
I suppose the bottom line to this is one of the easiest ones in the trading book: Don’t try to
catch a falling knife. Let’s watch from the outside and not worry if we miss the first part of any
upswing, because from where it is today there would be a lot of meat left on BVN and a
medium-term move back to even a historically modest $10 share price.
Barrick (ABX): The whisper about Misha
For those of you wondering where the hidden value may be in Barrick, unlike the rest of the
world I don’t think it’s the 50/50 JV it has with NovaGold (NG) and it beggars my belief that NG
is trading at above U$4 (NG is currently valued
higher than BVN, New Gold (NGD) or B2Gold
(BTO.to)). However, from the noises picked up
recently its wholly owned Peru subsidiary, Minera
Barrick Misquichilca S.A. (operator of Lagunas
Norte among other things) may hold a good one
in the shape of the Misha project, located
3,900metres above sea level (12,800 feet) in the
Apurimac region of Southeasten Peru. Detailed
information on the project resource is scant and
ABX is saying very little about it in public, but
there’s been plenty of work done already. Most of
the project area is covered by the geological
Hualhuani Formation, which is a quartzite
sandstone unit that’s well known as a host for
porphyry and skarn type mineralizations, most
typically copper (for example the Panoro Antilles
project nearby) but they can also be gold-with-
copper. The Hualhuani Formation is also tightly
related to the Chimu Formation in the North of
Peru that hosts mines such as Lagunas Norte
(ABX) and La Arena (Rio Alto/Tahoe), so it’s fair to
say that ABX will know what it’s looking at with
this project. As per the porphyry textbooks they
13

can come with large overlaying zones of oxide mineralization. All this, plus the 184 hectare size
of the project zone, strongly suggests that ABX is looking at a large open pit type operation. As
for inside track, after making a discreet inquiry, I heard back from the proverbial friend of a
friend that ABX was keen on keeping low profile on the project before it secured more claims
and that although my contact didn’t know much, inside ABX the geology was indeed porphyry
and considered very promising. And that’s all I have, folks.
However, unlike details on the resource we know more about the permitting track for Misha
because it needs to interact with the Peruvian government for those pieces of paper and after
some (rather determined) digging I found the March 2015 Environmental Impact Declaration
(13) for Misha on the local Grau province (one of seven provinces in the Apurimac region)
website. This is the document that now needs to be ratified and approved by the Ministry of
Energy and Mining (MEM) and to that end, the next three weeks will see the company running
its ‘Prior Consultancy’ (Consulta Previa) meetings with the locals in the direct and indirect zones
of influence of the Misha project (14).
So far the process has been a smooth one for ABX and its community relations seem to be
good (the specific location of the Misha property is very sparsely populated and the nearest
small town, Cotaruse, is 5.4km away) to the point where this year, ABX has quietly run a 20
platform drilling campaign at the project without causing much of a fuss. With the now
obligatory Consulta Previa workshops and meetings about to happen (they begin on the 27th)
and assuming they go well with the final
debate open-floor meeting slated for
January 8th, the world will probably get
to know more about Misha in 2016.
It’s more than interesting that Barrick is
pushing ahead with the consultancy
process at this time directly after the
close of the 2015 drill campaign (end
November). Companies only do that
when they like what they see.
And I keep staring at the ABX price
chart, in much the same way as the BVN
chart (except there’s no falling knife) and
thinking that it wouldn’t take much more
than a break above U$8 for the chart community to get hot a sweaty about this stock again and
call it to $10.
For all the criticism he comes in for as a “non mining man” CEO Thornton has done a good job
on the ongoing balance sheet repair work and swapped over $3Bn of fixed assets into cash to
pay down that debilitating debt pile. As the price chart shows, he’s been given no reward for
that effort since August and maybe it’s time the market gave at least some credit to the ABX
turnaround efforts.
Regional politics
Not much going on this week, ladies and gentlemen.
Samarco Brazil: BHP and Vale get their assets frozen
This is an interesting turn of events. This weekend a Brazilian judge determined that the buck
doesn’t stop at the Samarco JV, but its parents BHP and Vale are also directly to blame for the
tailings dam failure that has wiped out the Rio Doce (as well as human lives). Here’s The
Guardian (14a) breaking the news that BHP and Vale have had $5Bn of their Brazil assets
frozen (they’ll appeal for sure) and here’s a chunk of the script:
14

Despite the scale of the crisis, Vale had argued Samarco, as an independent legal
entity and a sizeable company in its own right, was wholly responsible for the accident
and the subsequent damage and fines.
But federal judge Marcelo Aguiar Machado disagreed. “I understand to be correct the
allegation that Vale and BHP, as controllers of Samarco, can be classified as indirect
polluters and as such responsible for the environmental damage caused,” he wrote in
his 19-page judgment.
As one person noted to me today, with the price of the end product depressed and being tipped
for even lower, $5Bn is no longer chump change for iron ore miners.
Argentina: Comment from the mining sector on the national government changes
Last week, local San Juan newspaper El Diario de Cuyo interviewed several mining industry
people for their views on the measures taken so far by the new Macri government (15). The
replies gathered were based around the move to cut currency controls on the purchase and
sale of the dollar and to let it free float against the Argentine Peso (in fact technically last week
was a first stage, but it’s trading reasonably freely at around ArgP$14 to the dollar, plus access
to dollars is already easier for rank and file Argentines), as well as the rumours that import and
export controls were to be lifted soon, plus thoughts on the new make-up Mining and Energy
Ministry. I’ve chosen the comments of Señores Jaime Bergé, president of the San Juan
Chamber of Mining (CMSJ) Julio Rios Gómez, president of the industry body the Group of
Argentine Exploration Companies (GEMERA), because they’re a fair example of the general
mood in mining to the start of the Macri era and speak for the consensus. Anyway, here are his
words translated, starting with Sr. Bergé of CMSJ.
“The announced measures are basically what we’ve been asking for in the
sector for some time. The ex-President (Cristina Fernández de Kirchner)
announced decrees that limited the mining industry and caused a drop in
investment”.
“(New Minister of Energy and Mining) Aranguren is a man who knows his
subject, he’s been president of Shell Argentina for ten years, he understands
commodities and has the profile of a technical person more than politician.
From now we’ll be able to discuss clear points and not over confusing matters
as has been to now”.
Meanwhile, Julio Rios Gómez of GEMERA, said so far so good, but there’s more needed.
“I believe it’s good, but it’s not the only thing to do. It’s not enough just to lift
currency controls or improve the imports conditions, (the new government)
needs to bring a atmosphere of judicial certainty and above all, lower the
State tax burden pressure that exists at the moment. We know of no other
place in the world where supply companies pay taxes on earnings before
they’re earned, in the understanding that production and exploration are
about the price-opportunity duality.”
As for the semi-surprise designation of Daniel Meilán as Vice-Minister of Mining (the direct hard
rock guy) over the expected choice of San Juan’s Ricardo Martinez, the San Juan newspaper
continued by quoting Rios Gómez:
“We would have liked Ricardo Martínez to have been named as Mining
Secretary, but Daniel Meilán is an industry stalwart and when he has his post
(in the Menem government) he fulfilled his role well, he manages Federal-
level mining well and has a very good relationship with provincial governors
and a lot of international relations, we think he’s an excellent choice for the
country”
15

So now you know.
Argentina: The Mendoza Supreme Court ratifies the “no toxic material” law
A bit like last week, we have a “Bad Argentina” following on from a “Good Argentina”. On
Wednesday and by a vote of seven to zero, the Supreme Court of Mendoza ratified the
Province’s Law 7,722, known colloquially and locally as the “Anti-Mining Law”, which prohibits
the use of chemical substances such as mercury, sulphuric acid or cyanide solution in metals
mining and/or refining in the Province (16). Among other things, this looks like the final nail in
the coffin of the San Jorge copper project, ex Coro Mining and now owned by Russian capital,
which might still be able to mine in Mendoza and then ship to nearby San Juan province in
order to process the rock, but the way things stand in the copper market today an extra-
expense small copper project isn’t looking too promising.
Environmentalists were very happy with the constitutional ruling, those wanting mining in
Mendoza less so. Meanwhile, we on the outside looking into Argentina are once again reminded
that it’s less important who the President is than what the local provincial attitude towards
mining is in this basket case country.
Peru and Ecuador mining sectors to work together more closely
On Friday, Presidents Rafael Correa of Ecuador and Ollanta Humala of Peru met in the North
Peru city of Jaén in a bilateral cabinet meeting and went on the sign “The Declaration of Jaén”,
(17) an agreement that is mostly a political act of closer relationships between the two
countries (always a good thing; remember just 20 years ago the two countries fought a live
arms skirmish over a border dispute that very nearly degenerated into all-out war). But even
though largely protocol-type stuff, mining got a mention at point 24 of the 38 point document
(signed in a flourish by both heads of state):
“The subscription, from July 20th 2015, of the Covenant of Inter-institutional
Cooperation in the Area of Informal Mining, which will promote the exchange
of experiences and the formulation and implementation of policy, including
the identification of informal mining in the frontier region and mining in
process of regularization.”
This kind of agreement is a) a bit of a mouthful, b) as much about diplomatic niceties as real
progress and c) will be of less help or interest to Peru. But it’s exactly what Ecuador needs at
the moment, asking for and getting help from a country with vastly more formal mining
experience than itself (as well as knowing more than it would like about informal/illegal mining)
and opening the door to expertise is the right direction for Ecuador to take.
Market Watching
Almaden (AMM.to) (AAU) redux
After featuring the stock in last week’s NOBS report, I was surprised to see how well Almaden
(AMM.to) (AUU) traded last week. However, I highly doubt that had anything to do with these
humble pages. Here’s the stock plotted next
to the junior PM ETF (GDXJ) which shows
how AMM has managed to open up a 10%
gap on the benchmark ETF.
Trading wasn’t great shakes, with around
200k shares traded on the week in Canada,
approx 450k in the USA ticker, but then
again at least it traded every day and there
wasn’t anyone dumping into the bid even
when it reached 80c. Not a bad performance.
16

I don’t think there’s much value at the moment and to be tempted to change my mind and
follow into my “good stock but for me not right now” call of last week, I’d want to see under
70c CAD. That could happen, because when playing these thinnish-trading stocks it only takes
one determined seller to push it down quickly. Unless and until, I’ll remain on the sidelines
watching.
Starcore Intl (SAM.to) rolls back and reports its quarter
Two rounds of news from SAM last week, so let’s start with the minor one and on the Monday
14th SAM closed its 4-for-1 rollback (18), which means the share count is now 45,153,648
according to the NR and the price was adjusted 4X accordingly. As rollbacks tend to be negative
signals we saw some selling that day and new lows touched, but the 27.5c close was just half a
cent (adjusted) down from last week.
As for the main news, the next day (Tues 15th) SAM filed its 1q16 financials (to October 31st
2015) and the results (19) were pretty much in line with our previous expectations, as seen in
IKN341 dated November 22nd. In fact they were a little better than expected, because revenues
at $7.704m were much better than I’d expected (I’d slated in $6.5m, they did well on the
average selling price and the forex conversion really helped) and costs were in line ($6.5m
rather than my $6.3m). Because that was the only real difference I’m not going to make this a
big long thing, but a couple of charts won’t go amiss for overview purposes:
Here’s the overview chart for operations and how that $7.704m in revenues and $6.568m in
COGs stacks up for the mine operating
earnings, which to SAM’s credit was
the best quarter since April 2014, but
all the same these are modest
numbers in absolute dollar terms and
that’s unlikely to change until gold
makes a real move higher.
The pre-tax ($0.228m) and net
earnings ($0.562m) were both
positive, which was better than the
house estimate of a small loss in each
column. A deferred income tax
recovery of $0.334m helped matters.
SAM.to: Earnings
8
7
6
5
4
3
2
1
0
-1
-2
-3
17
11.rpa 11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco
SAM.to: Operations overview
11
10
9
8
7
6
5
4
3
2
1
0
-1
$m
pre-tax earnings
net earnings
source: SAM filings
As for the balance sheet, we see the Cortez (ex-CUT.v) merger incorporated into the balance
sheet and expect assets to rise just that little bit more in the current period, as the loan to build
out the Altiplano toll mill complex arrives on the books
31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco
$m revenues
COGS
mine op earnings
source: SAM filings, IKN ests

SAM.to: Assets Breakdown per qtr
90
80
70
60
50
40
30
20
10
0
18
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco tse61.naj
$m
cash st inv other current fixed
source: company filings, IKN ests
Here’s the liquidity position, helped by the new debt
financing. This is one of the stronger points of
SAM.to, because even though $4m or $5m treasury
may not be a king’s ransom, with the San Martin
mine ticking over and making a modest profit on
operations, this isn’t a company that faces a cash
crunch.
As the loan comes into the books and is spent on
the Altiplano mine, we expect working capital to
drop but again, it’s important to note that SAM has
the principle of $4.5m due at the end of 2016
covered .
SAM.to: Working Capital per qtr
14
12
10
8
6
4
2
0
-2
-4
-6
-8
-10
-12
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco tse61.naj
source company filings/IKN ests
srallod
fo
snoillim
SAM: Cash & short-term investments
12
10
8
6
4
2
0
I could go on (and on and on and on) about the other numbers, but they’re not far enough
away from the scenario discussed in IKN341 and SAM is still the same proposition that it was
back then. In other words, my well-documented weakness for a value trap is on display again.
SAM isn’t going to go up until gold does, but its advantage here is that it can stay treading
water almost indefinitely and if this one goes to the wall, we’re going to have to see a whole
bunch of other sub-$50m market cap juniors, explorers or producers, disappear first.
Conclusion
IKN345 is done, we end with a few bullet points:
• The Minera IRL situation hasn’t changed much for the better since the EGM and even
though chairman Jaime Pinto has been kicked out, incredibly he still holds power of
31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco tse61.naj
$m
source: SAM filings, IKN ests

attorney over the company. The entrenched position of Robin Fryer and Doug Jones is
ignoring shareholders’ wishes and we can only suppose Rio Tinto had a larger plan in
mind when it voted the way it did. With the company NOMAD acting in a dubious
manner, shareholders need to voice their opinions loudly and immediately.
• Barrick (ABX) may be worth buying at last. It’s interesting how they’ve kept the Misha
project totally off the radar to date, but now we have an important permitting process
going ahead straight after the end of a 20 pad drill program. That augurs well. We
should also consider that it’s been keeping the noise on its world class Altura multi-
million ounce project in the Chile high country quiet, too.
• Buenaventura (BVN) just keeps getting cheaper and cheaper. The only sensible way of
playing this now is to wait until after it manages to turn around and confirm a rebound.
• I’m sure you know exactly how I feel about Jaime Pinto now. I don’t think there’s any
need to use the exact descriptive words.
• Wishing you all a very merry christmas, or whatever other holiday you celebrate at this
time of year. Have a good one and thank you for flying IKN Weekly in 2015.
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://incakolanews.blogspot.pe/2015/12/the-minera-irl-voting-results.html
(2) http://elcomercio.pe/economia/peru/ex-presidente-minera-irl-acusa-filial-pagar-sobornos-noticia-1864492
(3) http://legal-dictionary.thefreedictionary.com/Power+of+Attorney
(4) http://irlmining.com/
(5) http://incakolanews.blogspot.pe/2015/12/minera-irl-irlto-mirll-interesting-post.html
(6) http://incakolanews.blogspot.pe/2015/11/minera-irl-irlto-mirll-hypocritical.html
(7) http://incakolanews.blogspot.pe/2015/12/minera-irl-irlto-mirll-latest-round-of.html
(8) http://incakolanews.blogspot.pe/2015/09/the-talented-mister-pinto-from-ikn-333.html
(8a)http://incakolanews.blogspot.pe/2015/09/lima-downtime-photoshow.html
(9) https://www.canadianinsider.com/company?menu_tickersearch=lra.v
(10) http://incakolanews.blogspot.pe/2015/12/canaccord-dumps-on-its-copper-coverage.html
(11) http://gestion.pe/empresas/moodys-rebaja-calificacion-buenaventura-ba1-desde-baa3-2151230
(12) https://en.wikipedia.org/wiki/Moody's_Investors_Service
(13) http://sial.munigrau.gob.pe/index.php?accion=verElemento&idElementoInformacion=1360&idTipoElemento=2
(14) http://www.americaeconomia.com/negocios-industrias/ministerio-de-economia-peruano-inicia-tercer-proceso-de-
consulta-previa-para-exp
(14a) http://www.theguardian.com/world/2015/dec/20/brazil-dam-disaster-judge-freezes-assets-of-miners-bhp-and-vale
(15) http://www.diariodecuyo.com.ar/home/new_noticia.php?noticia_id=697371
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(16) http://www.elsol.com.ar/nota/252395/provincia/7-a-0-la-ley-antiminera-es-constitucional.html
(17) http://www.cronicaviva.com.pe/gabinete-binacional-peru-ecuador-concluye-con-firma-de-declaracion-de-jaen/
(18) http://finance.yahoo.com/news/starcore-consolidates-share-capital-140000383.html
(19) http://finance.yahoo.com/news/starcore-reports-q1-2016-results-211000010.html
Stocks To Follow Closed Positions 2014
Closed in 2014 closed close price
Fortuna Silver FVI.to jan'14 C$2.80 23-dic-13 C$3.19 13.9% small ST trade closed
Rio Alto Mining RIO.to jan'14 C$2.06 07-jun-13 C$2.30 11.7% trading position finally closed
Network Expl. NET.v feb'14 C$0.01 22-jul-12 C$0.005 -50.0% position closed, did nothing
Tahoe Resources TAHO feb'14 U$13.10 08-abr-13 U$21.72 -65.8% short closed due to reality
Darwin Res DAR.v mar'14 C$0.10 14-jul-12 C$0.045 -55.0% tiny risk play dropped
B2Gold BTO.to mar'14 C$3.07 28-nov-12 C$3.35 9.1% closed to free up capital
Pretium Res PVG mar'14 U$5.38 22-nov-13 U$6.50 -20.8% short closed as port longer
Gold Res Corp GORO may'14 U$5.07 26-ene-14 U$4.12 16.7% took profit
Bear Creek Min BCM.v may'14 C$1.63 23-mar-14 C$2.05 25.8% Took profit, sm near-term win
Eco Oro Min. EOM.to aug'14 C$0.48 22-sep-13 C$0.26 -45.8% sold small loser to make room
True Gold TGM.v sep'14 C$0.395 02-feb-14 C$0.41 3.8% M&A won't happen, sold
Santacruz Silver SCZ.v sep'14 C$1.04 26-ene-14 C$0.86 -17.3% silver/M&A spec, rel. small
Timmins Gold TGD nov'14 U$1.38 09-abr-14 U$0.99 -28.3% failed trade, sell, raise cash
Kinross Gold KGC nov'14 U$2.90 20-oct-14 U$2.15 -25.9% V small trade, didn't work, chau
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.145 -48.2% lost China sponsor
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
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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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