IKN #351Premium

The IKN Weekly
Week 351, January 31st 2016
Contents
This Week: In today’s issue, Do not feed the animals (part 24)
Fundamental Analysis: Teranga Gold (TGZ.to) (TGZ.ax) 4q15 numbers.
Stocks to Follow: Overview, New Gold (NGD) (NGD.to), McEwen Mining (MUX) (MUX.to),
Lake Shore Gold (LSG.to) (LSG), Regulus Resources (REG.v), B2Gold (BTG) (BTO.to).
Copper Basket: Overview, Ivanhoe Mines (IVN.to), NovaCopper (NCQ.to), Nevada Copper
(NCU.to), Revelo Resources (RVL.v), Cordoba Mining (CDB.v).
Low Cost Producer Basket: Overview, Buenaventura (BVN), Franco Nevada (FNV).
Regional Politics: Argentina: Honeymoon over, Ecuador: Lundin doing it right with locals.
Market Watching: True Gold (TGM.v) redux: The penalty for being a chicken, Minera IRL
(IRL.to) (MIRL.L) update, Fortuna Silver (FVI.to) (FSM): The San José Trinidad North project
under threat.
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
In today’s issue
• I do Teranga’s 4q15 numbers, consider its 2016 guidance, make a call on ownership.
• Make sure you check the leaps and bounds being made by the large cap precious
metals miners in “Low Cost Producer Basket, it’s good news for the juniors too.
• Last week I bought my New Gold.
• Last week I sold my McEwen Mining (MUX).
• I tone down the new round of gold stock hype. By ranting a lot.
Do not feed the animals (part 24)
Rock the hard jams, treat it like a seminar
Teach the bourgeois, and rock the boulevard
Some say I'm negative but they're not positive
But what I got to give? The media says this.
Don’t believe the hype, Public Enemy, 1988
Last week, on the insistence of a few people, I read the note “It’s time to buy uneconomic gold
companies”, by Cejay Kim and published by Palisade Research on January 27th (1) then picked
up by a whole bunch of rebound sites (e.g. Mining dot com here (2)). Its argument is a simple
one, that you (and I) should get out there and buy shares in (junior mining exploration)
companies that have uneconomic gold assets as flagship projects, with names mentioned
including Chesapeake (CKG.v) with its Metates project in Mexico, International Tower Hill
(ITH.to) and its Livengood project in Great White North, Exeter Resources (XRC.to) and its
Caspiche project in Chile. We’re also offered a list of thirty big gold mine projects and their
resource count that comes to over a billion ounces of gold. We’re told it’s a good idea because
of their “optionality” on the metal and that if gold goes higher, these beaten down stocks will
1

go a LOT higher, with the classic “ten bagger” phrase used by its keen and thrusting author for
your delectation and reading pleasure. Yes indeed, the article annoyed me immensely on
several levels:
It’s pure BS: There’s a reason why these so-called “gold assets” are priced at pennies to the
dollar, they’re not economic now and the vast majority will never be economic ever, not ever,
never, nunca, jamais, keine freakin’ chance. We’re offered a list with “one billion ounces of
gold” and invited to ask how much a billion ounces of gold is worth. We’re given CKG.v at
Metates as an example and told it’s not a project that can be financed“...despite having an in-
situ value of C$31 billion” (they underlined the big dollar number, not me). Allow me to answer
the question: A billion ounces of uneconomic gold is worth zero dollars and zero cents because
if it costs more to get out the ground than you can sell it for, it’s worthless. But hey let’s up the
ante because according to USA’s oceanic people NOAA, there are around 20 million tonnes of
gold in the world’s seawater (3). In old money, that’s 643 billion ounces (yeah, with a B). Not
only that, but about twenty seconds on Google will show you that people have spent time
working out successful methods for extracting that gold (4).* But despite there being oodles
and oodles of ounces of gold, out there, identified and available, they’re all worth nothing.
And be clear, just because they’re uneconomic now, it doesn’t mean a sudden rise in gold
makes them economic. If there’s one lesson you should take from the boom/bust era for the
exploration mining sector, it’s that one. What the PM sector is crying out for isn’t big projects or
high grade projects or low grade projects or cheap projects or expensive projects, it’s economic
projects. A sudden spike in gold can outrun underlying costs on a temporary basis (we saw that
in 2010) but by the time things such as build decisions are made the cost creep will be there in
a whole bunch of things, from rebar to geologists to drilling contracts to the price of NaCN, not
forgetting of course forex of other currencies against the dollar (gold is money, but you think
gold goes up in US Dollar terms and other monies don’t, Mr. Goldbug?). And also remember
that just because Metates (for one example of these never-gonna-happen projects) suddenly
gets into a zone where it’s theoretically economic, there’s still a whole bunch of better projects
waiting to be bought, developed and built. The way it works isn’t on an individual project level,
it’s more like a sports league table and the best teams, the best projects, are the ones with the
most points. Those are the projects and companies that are going to get bought first, long
before the mid-table mediocrities or the moose-pasture relegation candidates finding people
sniffing around. Put another way, marginal projects stay marginal, even when the nominal
economics make them theoretically possible during the possibility of a short window when gold
price outruns underlying price inflation. That’s what the last few years should have taught us
all. Or put yet another way, do you seriously believe Caspiche (XRC) gets built before
Curraghinalt (DNA)? If not, why are you buying Caspiche with money you could dedicate to
Curraghinalt?
It’s written by BS merchants. The whole mining commentary world is something forced
upon me, not something I enjoy and as time has gone on I find myself reading less and less of
the guff and nonsense that pretends to be sound advice, because it’s often anything but that. It
normally takes prompts from third parties to get me to read “expert anal ysis” these days, such
as the way this Cejay Kim article got to my eyes. But even among the mediocrity of the mining
parasite world special place in hell awaits the two-faced toerags at Palisade.
Cejay Kim is a product of the Casey Research school of copywriter bullshit, he knows exactly
how to market to the mouth-breather end of the investor world, hit the greed button, sequins
and dollar signs suddenly appearing before their eyes.
Palisade has two main arms and a couple of offshoots, such as the weird “Palisade Radio” thing,
basically a podcast by any other name that also appears on Youtube. But the main parts are
Palisade Global, which is an investment firm that provides solutions to companies in return for
fees and Palisade Research, which is purportedly sellside-only. Ask Palisade about their set-up
and they’ll tell you sophistic nonsense such as how Palisade Research offers investment ideas
without paid motivation, while Palisade Global offers paid-for services.
2

Which means that our friend Cejay Kim can decide to put on his “Palisade Research” cap and
pretend to offer conflict-free opinions while all the time he’s really employed by a company that
takes cash from mining companies in order to promote them to you. If the combo of a person
who leaned his trade at Casey Research, is paid by mining companies who give his promotion
company money for services, then pretends to write independently and without conflicts isn’t a
very large red flag to you I still have that bridge for sale, just outside Brooklyn NY, viewings on
request.
It spread to the point where I started to field questions. With the coverage it got, I
found that not only was I told to go and read it by people, like me, were scoffing at the idea
but also by people who were at least beginning to buy into the investment theory. Out of the
blue late last week came a smattering of mails from certain people who, without citing the
piece, floated the idea of buying these “out the money gold options” as a plausible investment
theory. This annoys me because that means there’s not just a smattering but a whole bunch of
people who have failed to learn the lessons, the hard jams, that Mr. Market has offered us
these last few years. Hope is not a viable investment thesis. If you want to invest in the gold
mining sector because you think gold’s going to appreciate I respect your opinion, but if you
want to buy into the awful Livengood project (to name just one of many) because you know
gold’s going to U$5,000/oz because Doug Casey’s “When Money Dies” theory isn’t dead like a
Norwegian Blue parrot but just restin’...well it’s time to take a good hard look at yourself in the
mirror and ask yourself why you’re not as rich as Croesus yet after all that effort you put in over
the last ten years.
But here’s the thing that bugs me the most. My real gripe about all this “optionality” thing
is the question of wealth creation. I got into financial analysis a long time before I stumbled
backwards into the mining sector, but since that accidental turn in my life (lucky or otherwise,
the jury is out) the mining world has been a never-ending source of fascination for me. That’s
for many reasons, but one of them is how you can have decent, upstanding people who work
for the good of all in the same sector, the same boat, hell even in the same room as utter
parasitical scumbags, complete sociopaths and dregs of society whose only ambition is to take
money away from you.
Mining is a fascinating sector of industry because it has done and will continue to do a great
deal of good for mankind. It contains the essence of entrepreneurship by which the brain of
man can apply itself to something as common as hard rock and, if done right, create real
tangible wealth from the process for that brain and for those around it. There may be equals to
it (e.g. agriculture) but there is nothing more positively capitalist than the process of mining. I
get accused of being a pinko lefty from time to time and I know my politics are social (lower
case S) in flavour, but scratch the vote preferences away and I’m as strong a supporter of
capitalism as you’ll ever find. When done right, its capacity to create wealth has been the single
strongest driving force behind human development since at least The Renaissance (arguments
to further back in history accepted), we should be proud of our small parts in this process.
But capitalism isn’t good or evil, merely a conduit for our own psyches. Pecunia no olet (money
has no smell) said the Romans. Buying into this uneconomic gold projects argument doesn’t
create any wealth at all. If you buy CKG at 50 and it goes to 80 you win 30, good for you, but
that 30 hasn’t suddenly appeared from nowhere, stocks unlike economies are a zero sum game.
On discussing this “It’s time to buy uneconomic gold companies” article with a couple of
industry professionals, one of them hit the nail on the head by saying, “These guys pushing this
strategy... are the same pundits that turn right around and bash the industry for not making
any money, no retained earnings and buying shit assets”, and that’s exactly right.
Hey, all you disgruntled investors who are now waving your pitchforks at the TSX Venture
exchange people, giving it the rowdy shout at the VRIC “Townhall Meeting”, let’s have the
person there without sin casting the first stone. I’m not talking to the Venture Exchange, I’m
talking to you, Venture Exchange investor. You want a “clean” exchange, you want to “get rid
3

of the scams”, you want “the zombie companies” to die? Well stop feeding them! Enough is
enough, turn your back on these crud projects inside crud companies run by crud managers for
the benefit of their cruddy lifestyles.
Do Not Feed The Animals.
If you want to get rid of the moose pasture peddlers, stop buying their stocks and stop giving
the slightest credence to people like the ones working out of Palisade who’ll give you what they
frame as independent advice while accepting their thinly disguised bribes from people inside
worthless companies looking to sell you more paper. Fool me once, shame on you. Fool me
twice, shame on me. Fool me 25 times, get a “valued client” special V.I.P. invitation to the
PDAC lunch and a Christmas card from your broker every year, without fail.
Yes for sure a stock market that works and creates true wealth is a stock market that sponsors
companies with real projects and lets the others die, so the TSXV has to get its house in order
as well. But moaning at a townhall meeting isn’t going to do a jot of good if your eyes are still
getting lighting up after reading two-faced by the BS merchants and their carefully crafted and
lawyer-approved greed-gland material.
*According to this (5), which I haven’t checked and I’m not going to either, gold is the least of your economic
concerns when it comes to seawater:
“If you could extract gold to get just 2.5 ounces you would also get...7.3 ounces of lead, 7.3 ounces gallium, 36.5
ounces of mercury, 48 ounces of chromium, 68 ounces of silver, 13.6 pounds of copper, 13.6 pounds of tin, 15 .2
pounds of aluminum, 15.2 pounds of titanium, 28.8 pounds of Vanadium, 50.1 pounds of uranium, 51.6 pounds of iron,
100 pounds of Nickel, 152 pounds Molybdenum, 1.29 Tons of lithium, 22 Tons of silicon, 34 tons of boron, 121 tons of
nitrogen, 212 Tons of Carbon, 2977 Tons of Potassium, 3121 Tons of calcium, 6865 tons of sulfur, 9796 Tons of
magnesium.”
Fundamental Analysis of Mining Stocks
Teranga Gold 4q15 preliminary results
Post-close Thursday January 28th brought the awaited results NR (6) from Teranga Gold
(TGZ.to) (TGZ.ax), which although not the
full financials for the quarter gives us
plenty of information as the company
complies with the rules of its Australian
listing. And as I mentioned on the blog
early Friday morning (7), once the
numbers were plugged into the Excel, it
wasn’t a great quarter from the company.
I then tuned into the conference call (CC)
on Friday morning and unlike many, it
turned out to be an enlightening one
(there’s a transcript available here (8) and
I’d venture to say that its contents helped
shore up the stock price on Friday, with
the stock closing the week at 40c, 2c
down on the day but above the lows we hit earlier this month.
Production in 4q15 and company guidance for 2016
I’m going to stick to the facts and the company’s guidance numbers for this section but don’t
worry, I have plenty of opinions on what TGZ offered up last week and you’ll get them in the
‘Discussion’ section below.
We’ll start with this, gold produced and sold so with 51,292 oz produced and 52,939oz sold (at
an average of U$1,099/oz) it was the best quarter of 2015. However it was also a big miss,
because the market (myself no exception) was expecting far better from TGZ as it tapped into
the high grading Gora deposit for the first time. Up to last week my guesstimate was 70,644oz
4

so the result was a nasty shock.
TGZ: gold produced vs gold sold, per qtr
80000
71278
70000
60000
52368 52090 48643 49392 51292
50000 48598
40000 39857
32956
30000
20000
10000
0
5
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4
Oz Au
reported Au prod
Au sold
source: company filings
TGZ explained that the miss came for two main reasons:
1) Before they started mining the deposit, artisanal miner activity at Gora had been
greater than they’d expected, with tunnels that went down further than they’d
imagined and a lot of the higher-grading zones of the deposit dug out. They estimated
that they’d lost 13,500 ounces (over and above their previous estimates of depletion)
due to this activity.
2) A rockfall at its Masato deposit impeded access to a high grading zone for a month,
which resulted in a loss of 4,500 oz of production. Again, according to the company.
So put those two together and it’s 18,000 oz, while I had them producing 19,352 oz in my
failed model. So be it. My thoughts on that later on.
As for production guidance in 2016, the first thing TGZ wanted to get across in its NR (and they
repeated this message four times in the
TGZ: Gold production and 2016 guidance, per qtr
CC) was that both Masato rockfall and 80000
71278
the Gora artisan depletion issues were 70000
n w o il w l a b f e fe h c i t n d t h t e h i e r c p o la m n p s an g y o in a g n d f o n r e w it a h r e d r . 5 6 0 0 0 0 0 0 0 0 52368 52090 48598 48643 49392 51292 51384 51384 51384 51384
39857
TGX went on to guide for between 200k 40000 32956
and 215k production in 2015 and after 30000
doing some basic calculations on their 20000
likely feed rates, recovery rates and mill 10000
head grades for 2016, then splitting the 0
results into four identical quarters,
here’s how I have a conservative level
of production for our current year,
51,384 oz per quarter (call it 205k oz).
Inside the 4q15 production numbers and 2016
guidance there are some things that need
pointing out, starting with the tonnages
shifted and to be shifted. This tonnes mined
chart shows how “ore mined is set to drop
significantly as TGZ moves to mine areas of
higher grade. I’m supposing that at least some
of the waste gets classified as “capitalized
waste” and held over for eventual treatment in
the company’s planned low grade heap-
leach/dump-leach project. We have some
experience of how the mining mix goes from
the period in mid-2013 when TGZ mined the same type of material mix, which can also be seen
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 tse61q1 tse61q2 tse61q3 tse61q4
Oz Au
source: TGZ filings, IKN ests
TGZ: Tonnages mined, per qtr
14
12
10
8
6
4
2
0
21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 tse61q1 tse61q2 tse61q3 tse61q4
source: company filings, IKN ests from TGZ guidance
TM
snoilliM
cap. waste mined
op. waste mined
ore mined

in this next chart of strip rate averages and the house 2016 forecasts.
TGZ: Strip rate (waste-to-ore ratio) per quarter
20
18
16
14
12
10
8
6
4
2
0
6
21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 tse61q1 tse61q2 tse61q3 tse61q4
source: TGZ data, IKN ests
oitar
ero/etsaw
For the record (and not for the first time) I’m dubious about the true dollar value of the
“capitalized waste” thing, particularly because TGZ uses it to bolster its balance sheet (as at
3q15 over $100m of its supposed $631m in fixed assets was “ore stockpile”, which is way too
rich and a clear contributing factor to the company’s low price/book ratio). However you can’t
get round these matters when cash flow and absolute costs in dollars are examined (instead of
those wonderful non-GAAP cash cost per ounce calcs that mining companies use and all too
often offer us more heat than light) which is why I’ve always approached TGZ this way.
But we can at least get a ballpark idea on final costs via its cash cost declarations and as we
know those (and not the final financials for 4q15 as yet, they come later) we can take a shot at
revenues and earnings for the quarter. In this chart I’ve also put in the house estimate for 1q16
by assuming 51,384 oz gold sold, average price U$1,100/oz and a total cash cost at U$950/oz,
at the higher end of the 2016 guidance of U$900/oz to U$975/oz as supplied by TGZ last week.
TGZ.to: Quarterly Earnings Overview
90
80
70
60
50
40
30
20
10
0
-10
41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4 tse61q1
$m
revenues
COGS
gross profit
source: company filings/IKN ests
As the revenues number for 4q15 will be very close (TGZ flags that one clearly in its production
NRs) and reasonable guesstimates can be
made form the cash cost numbers (without it TGZ.to: operating profits, per qtr
containing everything, we adjust for that), 35
30
the lower than expected revenues for 4q15
25
due to low sales is largely (not totally) offset 20
by lower than expected costs. The result is a 15
forecast U$11.2m in gross profit, which then 10
5
translates to U$6m in operating profits and a 0
U$4.2m net (though that’s not so easy to -5
get, bottom lines get distorted by -10
pre/deferred tax payments). -15
As for 1q16, the expectations are for a drop
in costs (the company is guiding fuel prices
lower, thanks to the national benchmark finally dropping and TGZ not having to pay a
31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4 tse61q1
$m
|
source: company filings, IKN ests

significant duty on fuel any longer). That has me guiding for a typical quarter in 2016 (total
costs $950/oz, selling price $1,100/oz) with
$7m in operating profits. In essence, TGZ is 30 TGZ.to: Net Earnings
looking to cut and control costs in 2016 by 25
focusing on high-grading areas, which is 20
logical enough, I’m fine with that and as costs 15
is a big thing these days, following the fashion 10
5
successfully (we’ll see if it can) will win
0
friends.
-5
-10
Here’s the chart with a little extra on the costs
-15
breakdown at TGZ. Finance costs are minimal
these days now that it has no financial debt
on its books (the streaming deal plus the new
shares it sold to David Mimran have that
covered), G&A is reasonably constant but just
to make sure I’m assuming to the high side on
those in the next two quarters.
The bottom line to the production section is:
1) 4q15 sucked, but TGZ should still be
able to return a modest profit on
operations. However we shouldn’t
praise them too much and after
capital investment TGZ spent more
money than it made in 2015, which
wasn’t part of anyone’s plan.
2) In 2016, if we assume mid-range production, then $950/oz total cash costs per ounce
alongside an average of $1,100/oz for gold, TGZ becomes modestly profitable in
operational and absolute terms (as capex this year is much lower). That’s not bad but
at $1,100/oz gold it’s not going to set the world on fire either.
Let’s move on.
Balance sheet items
In previous analyses of TGZ I’ve gone deep on balance sheet items, mainly to pull the dubiously
valued parts and show that liquidity is fine
despite the apparent asset stuffing. It’s also
been worth looking at how things improved
drastically thanks to the streaming deal it did
with FNV (one of the better ones out there, a
true win-win). This time I’m not doing every
little corner, that can wait if necessary to the
publication of the hard financials for 4q15 (or
more likely 1q16), we do mostly overview stuff
and are done. Here are assets, in which I’m
assuming no write-downs or impairments in the
4q15 financials despite there being plenty of
space to do so in my opinion (the company
hasn’t flagged us on this).
Take away the fixed asset column, here below is the bit that matters more.
7
31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4 tse61q1
source: company filings/IKN ests
srallod
fo
snoillim
TGZ.to: Costs profile
80
70
60
50
40
30
20
10
0
31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4 tse61q1
$m Finance costs
G&A
COGS
Source: TGZ filings, IKN ests
TGZ.to: Assets
900
800
700
600
500
400
300
200
100
0
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4
$m fixed
other current
cash & eq
source: TGZ filings, IKN ests for 4q15

TGZ.to: Current Assets
160
140
120
100
80
60
40
20
0
8
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4
$m other current
cash & eq
source: TGZ filings
T
Thanks to the cash injection from the sale of the shares to Mimran, less the capital expenditure
we assume, cash is now at an estimated $45m. Now to liabilities, starting with the overall
picture on the left and moving your eyes to the right and the current part of the book, which at
an IKN estimated U$72m is a number that’s easy to control.
TGZ.to: Liabilities per qtr
300
275
250
225
200
175
150
125
100
75
50
25
0
It’s worth remembering that around $93m of
the total liabilities at TGZ comes from the
streaming deal with FNV, with a little over
$20m of that always on the current section.
Being covered directly from gold deliveries,
these are no pressure on the balance sheet
and makes things easier still for the going as a
going concern.
To underscore the good position, here’s the
working capital plus 4q15 guesstimate, which
sees how the cash injection from the Mimran
share sale has boosted things.
Finally, shares out. As noted previously and
confirmed by TGZ last week, shares out stand
at 392.001m. At CAD$0.40 that’s a market cap
of CAD$156.8m, or this weekend in United
States currency U$112.1m
21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4
source: company filings/IKN ests
srallod
fo
snoillim
TGZ.to: Current Liabilities per qtr
140
120
100
80
60
40
20
0
21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4
source: company filings
srallod
fo
snoillim
Booking the stream: How the Franco Nevada (FNV)
liability sits in the TGZ balance sheet
140
120
100
80
60
40
20
0
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4
U$m
deferred revenue (l/t)
deferred revenue (n/t)
source: TGZ filings, IKN ests
50 TGZ.to: Working Capital per qtr
40
30
20
10
0
-10
-20
31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4
source company filings/IKN ests
srallod
fo
snoillim

TGZ.to: Shares Out
500
450
400
350
300
250
200
150
100
50
0
9
11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 tse61q1
source: company filings/IKN ests
serahs
fo
snoillim
The bottom line to the balance sheet section is that it’s better than the 4q15 production and
operations section. That’s because it remains more than adequate, as solid as you could expect
under the circumstances and a strong backstop to the company’s 2016 if things don’t go as well
as we’d like. But again I’m not trying to apply shiny gloss on TGZ this weekend because we
now get to the part where I vent.
Discussion and conclusion
I am not the only person who was very annoyed at the numbers presented by TGZ last week,
both in style and substance. I took several mails on the subject Friday and I’d like to share from
two of them. Here are a couple of excerpts from a mail by reader R:
“Nice title – “Teranga Gold Outperforms 2015 Cost Guidance” code for we’re even better at lying
about our costs.”
R then lays out a few lines on his crits of what he sees and finishes with this:
“Bottom line here is, IMHO, the company lies. It is very difficult to spot liars on first glance but over
the couple years I followed this company they always seem to have some new and unforeseen
balls-up.”
The bit about “lying” is subjective but those new unforeseen problems show up, I have no
argument against that, true enough. Moving on here’s reader M, who overnight Thurs/Fri wrote
an excellent rant mail, so I’d like to share it with you in full (I know he won’t mind):
Hi Mark,
You would have seen Teranga’s results – what a bullshit nr.
They make a big point about how the cash was increased, when after including the pp and the
credit drawdown, they are actually $24 million down on the quarter.
Then buried deeper in the nr we get to the production figures, 18,000 oz down fro guidance given
on 29 Oct.
And why were we not informed of the loss of ounces due to artisanal activity, the rock fall, and
handling issues? These are material events and we should have been informed last year. Some
investors obviously were.
The same happened last quarter, no warning at all about production well down on forecasts made
30 July. Sickening.
Current management can not be trusted, it must be time for senior management changes.
Mark, your two recent top picks, BTO and TGZ, have performed very badly this year. Maybe it’s
time to examine why and reassess?
I think establishing a close liaison and rapport with top management (as you did with Rio) is
essential with the Canadian companies. The majority of them you just cannot trust.
I look forward to your response.
I replied to M on Friday morning by saying that TGZ has never been a Top Pick here, but apart
from that detail I agreed with his views. Now it’s my turn, riffing from the above and then
adding my own thoughts
1) The style of the news release was awful. It’s exactly this type of “Hey Everybody! Look

at the cool headline! Don’t look any further now will you?” NR that I rip into on the blog
when a company I’ve marked as serial BSsers gives us one of its specials. Headlining
the NR “Teranga Gold Outperforms 2015 Cost Guidance” and then making a big point
about improved cash treasury on annual basis when operations didn’t justify a scrap of
that cash was naive at very best, plain sneaky if you prefer.
2) No warning about the 4q15 production shortfall was bad. No it’s not materially
necessary to declare before the production numbers hit, but as M pointed out it was
just two months after guiding 18k oz higher!
3) Also, as R mentioned in the body of his mail, it’s one thing to get an estimated
depletion number a little wrong due to artisanal activity at your mine, quite another to
miss by 13,500 ounces! That’s way too much, it smacks of incompetence (again, at
best).
4) In the words of M “Some investors obviously were (aware). The price chart shows a
very clear tale, that some people knew this quarter was going to come in poorly. You
can see it on the chart I stuck in at the start of this piece, how the stock dived from its
50-or-around level, struck 38.5c ten days ago and couldn’t climb back any further than
42c and 43c before Thursday evening. Then to cap it all the Friday action on the bad
news saw no new lows for the year and once the early sellers had gone, value hunters
moved in. All the bad news had already been baked in, as much as two weeks ago and
that’s no good at all, another reason not to trust this company. Again to put it as
diplomatically as possible TGZ is running a leaky boat, less diplomatic would have me
spitting about illegal insider trading.
5) Both M and R made the same point in different words, I agree that this management
team has lost that most precious of assets in the mining business, trust. BS news
release titles that try to lipstick a pig, the type of attitude that fools only the greenest
out there. Then poor understanding of their own asset (Gora), then incorrect guidance
and no move to warn the market later when they knew it wasn’t going to be right, plus
allowing some or other section of the business community free rein on intel without
making the playing field level. The optics aren’t good at all.
On the other hand, TGZ is cheap: And here comes the flipside. I made a point of keeping
my reaction to a minimum on Friday, because I
was blowing hot about being “misled” (put it TGZ.to: Price/Book ratio
0.6
nicely) by the company in the way it did (again
0.55
the substance was bad, style really helped rub 0.5
0.45
me up the wrong way, I was spitting feathers) 0.4
and I knew it wasn’t the moment to make any 0.35
0.3
sell decision. Come Saturday morning I revisited 0.25
0.2
the numbers and started playing with the
0.15
projections, out of which this chart popped up. 0.1
0.05
0
At 0.27X TGZ isn’t just cheap today, it’s dirt
cheap. It’s put the heavy lifting of its expansion
projects behind it and has an estimated $11m
or $12m left to fund, which is easily covered by
treasury. At U$1,100/oz gold and as long as we can assume the management isn’t BSsing us
again with its production and costs projections, it’s modestly profitable. At $1,200/oz it’s
profitable period. But it’s once you compare it to peers that its value shows through, even after
this poor quarter, with two examples here close to my heart because they’ve both made me
money):
• McEwen Mining (MUX) is a 120k to 130k AuEq producer (about 70% of that pure gold,
the rest silver equivalent) and like TGZ returns modest but unimpressive profits at
current gold prices. It also has a similar cash position, a similar working cap position, I
could go on. It gets a market cap valuation of U$370m, over three times as expensive
as TGZ despite producing a third less gold.
10
31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4 won
source: company data, TSX, IKN calcs

• Lake Shore Gold (LSG) has a similar gold production rate to TGZ, but due to its location
and market darling status, is valued at U$420m or so at the moment.
Now I’m aware TGZ isn’t a perfect beast and I’m fully aware they royally pissed me (and
others) off with that 4q15 NR last week, but at U$112m market cap for a company with a solid
balance sheet and under no financial pressure, with costs dropping and at that level where
every move up in gold gets high leverage on its profitability, I don’t think this is one to reject at
these levels either.
And the clincher is that the bad news was clearly already baked in to the price before
Thursday’s NR. It’s not a good thing to be behind the curve like I am, knowing that insider intel
had stripped away all the price discovery before the public knew, that’s because when it
happens once it can (and will) happen again, to the upside or the downside, but it’s better to
admit it late than not at all. Where we are today has assumed all the bad, which means we’d
need something else bad to happen for TGZ to move meaningfully lower. That might be
company-operational, that might be the gold price, that might even be civil war in Senegal
(though I doubt that one) but without a Black Swan this today is not the place at which to sell,
upside is far easier than downside this weekend.
Conclusion: I am aware of my failings. Yes, I can feel myself falling deeper down the Value
Trap hole by stating what I’m about to state. I’m also aware (to my own financial pain) that I
gave B2Gold “one more chance” to impress me after its lacklustre 3q15 results, only to watch
the stock get flattened before we even got to sniff at its 4q15 fundies numbers. But on the other
hand I know that by holding through on MUX the way I did I managed to turn a big potential
percentage loss into a modest overall winning trade, just by sticking it out and letting my “the
truth is in the numbers” mantra rattle round my head. But when it comes right down to it The
IKN Weekly’s imperfect system is based on what I do with my own money, therefore I can only
inform you of my weak spot in Value Investment and then go for it. As at this weekend and at
current valuations, Teranga Gold (TGZ.to) (TGZ.ax) is a hold. I’ve tried hard to convince
myself to sell it and know that I shouldn’t stick around a company run by managers with a
relaxed attitude to honesty and disclosure. But try as I might I can’t, not at the moment when a
200k oz gold producer that’s operating at a profit and with a decent mine life ahead of it is
selling for less than U$120m (or an EV of less than $75m). I’m certainly not adding, but I’m
going to give my position in TGZ one more quarter in which to show me a good operational
result. If 1q15 comes in well this price will go higher and I can find a better place to exit, if 1q15
comes in badly I’ll throw in the towel and sell, whatever price the market might offer me. I won’t
be an owner of TGZ at the end of 2016, of that there is no doubt, the loss of trust in a junior
means there are better places to park cash. But 40c today is simply too low for what it can
achieve and I’m going to play a few more weeks or a couple of months in order to get a better
exit price. Teranga is a hold.
Stocks to Follow
Of the 13 stocks we can mention at this point (or 12 if you don’t count BTO twice) just two
registered losses (ATM.v, LRA.v) and another two were unchanged (TGZ.to, SAM.to). Which
means nine went up and that’s a good week for the list so no need to name them all, just the
bigger winners that include Regulus Resources (REG.v up 47.4%), New Gold (NGD up 20.8%,
personally up 18.4%), B2Gold (BTO.to up 15.1% but only 12.0% on its US BTG ticker),
McEwen Mining (MUX up 12.8% but I sold mine at $1.20, see below) and Focus Ventures
(FCV.v up 10.0%, which is really just a half cent rise but math is math). As for biggest losers,
that’s Lara Exploration (LRA.v down 13.3%) that gave up most (not all) of its previous week’s
anomaly gain. And that’s what I call a good week, albeit a bounceback one from depressed
levels that have a long way to go before most of the red is scrubbed from the table.
With the addition of New Gold (NGD) and the sale of McEwen Mining (MUX) last week, we still
have 12 open positions on our ‘Stocks to Follow’ list, three below our self-imposed maximum.
Just three of the open positions are in the green, pretty pathetic.
11

company Ticker this week Avg Price Reco date Current PPS Gain/Loss% Notes
TOP PICK
B2Gold BTO.to Buy C$2.17 12-sep-14 C$1.07 -50.7% Rebounding after heavy selling
Lake Shore Gold LSG.to STR Buy C$1.10 07-apr-15 C$1.27 15.5% New Top Pick, added, M+A tgt
Metals Producers (in current order of preference)
B2Gold BTG Buy U$0.85 13-jan-16 U$0.746 -12.2% separate new trading tranche
New Gold NGD Buy U$2.06 24-jan-16 U$2.44 18.4% New near-term play, $2.80 tgt
Teranga Gold TGZ.to hold C$0.55 15-feb-15 C$0.40 -27.3% poor 4q15, under review
Starcore Intl SAM.to hold C$0.48 10-jan-15 C$0.28 -41.7% Target under review
Land Grab Stocks (in current order of preference)
Sandspring Res SSP.v hold C$0.195 18-oct-15 C$0.125 -35.9% Risky small play, 30c tgt
Atacama Pacific ATM.v hold C$0.19 26-apr-15 C$0.14 -26.3% Spec buy, cheap adv proj
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.26 -77.4% 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$0.72 12.5% New tgt 95c to $1 Sep 20
Focus Ventures FCV.v spec buy C$0.23 01-jul-12 C$0.055 -76.0% Hit hard by PFS news
Regulus Res REG.v hold C$0.30 06-apr-15 C$0.28 -6.7% Comm. Rels slow progress
Closed in 2016 closed close price
Phoscan Chem FOS.to jan16 C$0.28 29-mar-15 C$0.265 -5.4% Buyout trade, bot but poor deal
True Gold TGM.v jan16 C$0.18 23-aug-15 C$0.25 38.9% okay trade, sold on pol risk
McEwen Mining MUX jan16 U$1.09 25-jan-15 U$1.20 10.1% sold due to lack of value
2009, 2010, 2011, 2012, 2013, 2014 and 2015 closed positions in appendices below
Now for some notes on current basket stocks.
New Gold (NGD): Position opened. I didn’t hand around and bought twice on Monday
morning, getting the position size I wanted almost immediately in this near-term trade with
easy in/out trading liquidity. And it’s not
often I get lucky with timing like this, but in
the space of just one week NGD has
managed to rise halfway towards my U$2.80
price target, set in last Sunday’s NOBS report
on the company. This is good.
Not much more to add at this point, I said
enough about NGD last week and just feel
lucky about the good timing. However I will
point out a bit of simple TA via this price
chart of NGD (US ticker) that shows clear
resistance at the U$2.50 level, which by
coincidence (!) was where last week’s rally
faltered. For sure some of you are going to look at that and tell me that if I’m going to hold for
U$2.80 the chart is screaming it’ll keep running to $3 if my number comes. That’s a reasonable
argument too, my U$2.80 target is pencilled in and not set in stone, let’s see how the stock
performs in the next few days. If luck stays on my side and it continues to run quickly, the
momentum would likely take it higher. If it’s more of a slower creep, U$2.80 would do nicely if
seen. And hey, all that’s presumptuous and we may have just seen the 2016 high, a lot will
depend on the gold price.
McEwen Mining (MUX): Position closed. Here’s how I closed the piece on the MUX 4q15
numbers and 2016 guidance, in IKN349:
12

MUX enjoys an owner premium, Rob McEwen has his following and rightly so, he’s a
very successful miner. As a result I’d expect MUX to be able to hold at its current
U$1+ level for the next few weeks and it will probably stick in a spike or two along the
way, there’s every reason to see it above U$1.20 again I believe. If we do see that
kind of level in the near-ish future I’m a likely seller in order to take modest profits and
to be out of the stock before it reports its financials, which are likely to be lacklustre
for a few quarters unless gold prices run up and save all our days. For now MUX is a
hold, but I’m not a strong hand holder any longer.
That was clear enough and again last week I mentioned that U$1.20 was a possible in the week
to come and if so, I’d have a decision to make. And indeed MUX hit U$1.20 and within a penny
or two either side stayed there all week, so after
due deliberation I hit the sell button and
liquidated. In this case I think I gave more than
enough warning and didn’t feel the need to
launch an unnecessary Flash update at you all.
As well as the reasons mentioned in IKN349, as
noted in IKN350 last week the purchase of NGD
had put me in the “getting tight for cash” level in
my juniors portfolio and at the point where I’d
want to sell something before any next purchase.
With MUX dinging my U$1.20 bell it gave me a
good excuse to raise cash, it made the call that
much easier to make.
All in all, a disappointing main trade that returned just 10% (ex-commish) for a year’s worth of
holding, but considering the depths to which it dropped in mid-2015 it could have been a lot
worse (an I’m still kind of kicking myself for being too whussy and not adding more strongly at
those U$0.60 and U$0.70 levels). However, with the MUX 2015 year end financials unlikely to
sparkle and the 2016 production schedule somewhat lacklustre as well, I’m pretty sure there
are better places to deploy this cash.
Lake Shore Gold (LSG.to) (LSG): The rally consolidated the previous relative strength in LSG
last week and even managed to take it higher, but as this one has already done better than the
average junior in 2016 it wasn’t an eye-catching double figure percentage move.
But what we did see was chunks of volume come through, just the type of accumulation I’d like
to see before M&A activity comes along. The general upbeat nature of the PM miners last wek
is also a big help, any CEO itching to buy this will have a tough time getting it past their board
if the market is set in bear mode. One week of goodness isn’t likely enough, but if we get a
couple more weeks of positivism from the mining sector the chances of that long-awaited offer
on LSG go higher. And I know one is out there, waiting to pounce. Be long this thing.
Regulus Resources (REG.v) REG reported its 2015 financial year end on Thursday evening
and although there wasn’t any big fundamental
change in the numbers or the MD&A, the stock
managed to find a buyer on Friday and pop
higher to 28c. I’d be surprised if that continues
next week though.
As for the contents of the financials (REG has its
year end September 30th) the numbers need-to-
know is $7.9m in treasury, $6m in working
capital, a burn rate of $3.1m for the year and
that means REG won’t need any more cash in
2016 minimum, even if it gets to drill.
13

As for the operations need-to-know, the main message comes from what it plans to do at its
main Antakori project in Cajamarca Peru in 2016. Here’s the paragraph:
The focus of our activity in the upcoming year at the AntaKori project will be as follows:
1) continued consolidation of mineral concessions, 2) completion of agreement with
neighboring major mining companies to collaboratively explore the District, 3)
negotiation of surface access agreements for areas of interest, 4) preparation and
submission of required exploration and drilling permits, 5) completion of remediation of
some previous mining and exploration sites with community involvement, 6) completion
of surface geological mapping and additional geophysical surveys, 7) significant
engagement with surrounding communities to plan for upcoming exploration, and 8)
potential initiation of drilling activity by year end.
In other words, we now officially knwow that all the talk about 2015 being preparation for a
drill campaign that would kick off in early 2016 was way too optimistic. As I’ve said from the
start, the problem here is the community relations and to get them onside will take time and
effort. However, if any team can do that it’s a team under John Black and I’m very willing to cut
him and them some slack, it’s even easier considering the small amount of foot-in-door shares I
own here. I know John Black and Kevin Heather love the geological potential of Antakori and
that’s all I need to know on that score, these are top level geols and (unlike other people or
companies I could mention) their word is gold. Easy to hold under these circumstances.
B2Gold (BTG) (BTO.to): B2 finally found a bottom and rebounded on us, which was a bit of a
relief (and when it hit U$0.60 those “will this ever stop?” questions were floating round my
head as much as that of anyone else). And to think I thought I was getting a massive bargain
by buying a near-term trading slug at U$0.85. Ugh.
We’re still deeply cheap here, my plan is to find an exit point and lighten some (not all) the load
in order to drop it from the Top Pick level, but if it added another 20% in the week to come I
wouldn’t be at all surprised so therefore it’s still an official BUY in my warped Twilight Zone
world of market anal ysis.
The Copper Basket
After four weeks of 2016, The Copper Basket shows a 16.62% loss to level stakes.
company ticker price 1/1/16 Shares out Market Cap current pps gain/loss%
1 HudBay Min. HBM.to 0.35 235.23 628.06 2.67 -49.7%
2 Ivanhoe Mines IVN.to 0.61 778.96 521.90 0.67 9.8%
3 Reservoir Min. RMC.v 4.08 48.46 173.49 3.58 -12.3%
4 Capstone Min. CS.to 0.44 382.04 137.53 0.36 -18.2%
5 NGEx Resources NGQ.to 0.65 187.71 108.87 0.58 -10.8%
6 Copper Fox CUU.v 0.125 417.64 52.21 0.125 0.0%
7 Copper Mtn CUM.to 0.445 118.8 49.90 0.42 -5.6%
8 Nevada Copper NCU.to 0.66 80.5 40.25 0.51 -22.7%
9 NovaCopper NCQ.to 0.395 104.33 33.39 0.32 -19.0%
10 Hot Chili Ltd HCH.ax 0.09 420.12 30.25 0.072 -20.0%
11 Western Copper WRN.to 0.38 94.19 29.20 0.31 -18.4%
12 Atico Mining ATY.v 0.28 97.59 22.45 0.23 -17.9%
13 Amerigo Res ARG.to 0.205 173.61 20.83 0.120 -41.5%
14 Cordoba Min. CDB.v 0.16 79.45 10.33 0.13 -18.8%
15 Revelo Res. RVL.v 0.055 99.19 4.96 0.05 -9.1%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg -16.62%
A better week for copper stocks. Of our 15 basket members just two lost ground, NGEx
Resources down 9.4% and Nevada Copper down 15.0%. Four others were unchanged (CUU.v,
14

HCH.ax, ARG.to, RVL.v) which means nine winners (not listing them all) including double figure
percentage gains in Atico (ATY.v up
24.3%), Ivanhoe (IVN.to up 24.1%) and The Copper Basket 2016, weekly evolution
Capstone (CS.to up 10.8%). Which means 5%
the basket has clawed back some of the
0%
losses but we can’t sugarcoat things too
much, it’s been a disastrous first month of -5%
the year for this sub-sector. -10%
-15%
-20%
-25% source: IKN calcs
jan3rd 10th 17th 24th 31st feb7th
Copper the metal did basically okay last week, first
dropping under the U$2.00/lb level and then
rebounding smartly back above it as it joined in the
worldwide commods rebound (oil first, most of the
rest went along for the ride) which gets me
wondering just how “key” or “critical” $2/lb might
be these days. Once one of these psychological
numbers starts getting traded around regularly,
they tend to lose their mystique. I still think
U$1.80/lb is the number we should really be
worried about, Gary Biiwii will tell you $1.50/lb still
beckons the metal. Whatever, we’re both bearish.
As it’s the end of the month here are the longer-term copper inventory tracker charts, right on
cue:
Copper inventories: percentage held per exchange
80
70
60
50
40
30
20
10
0
The big change this month is the coming-together of the LME and SHFE warehouse totals,
which are closer to each other than at any point since early 2012 when, if you remember that
far back, the world was chattering about the end of the LME hegemony on metals trading and
the rise of the new star. As at this weekend the LME holds 47.17% of the world’s official
warehouse stocks in futures markets control, SHFE has 41.26% and Comex has 11.57%. With
the Chinese New Year up soon and the seasonal influx of stocks expected into Chinese
warehouses, we may finally get to see Shanghai become the daddy.
15
21.naJ bef ram rpa yam nuj luj gua pes tco von ced 31.naJ bef ram rpa yam nuj luj gua pes tco von ced 41.naj bef ram rpa yam nuj luj gua pes tco von ced 51.naj bef ram rpa yam nuj luj gua pes tco von ced 61.naj
Copper inventories, per month, 2012 to date
1000000
LME Shanghai Comex
source: Cochilco 900000
800000
700000
600000
500000
400000
300000
200000
100000
0
21.naJ bef ram rpa yam nuj luj gua pes tco von ced 31.naJ bef ram rpa yam nuj luj gua pes tco von ced 41.naj bef ram rpa yam nuj luj gua pes tco von ced 51.naj bef ram rpa yam nuj luj gua pes tco von ced 61.naj
Mt Cu
LME Shanghai Comex
source: Cochilco

Moving away from the monthlies, here comes the regular weekly comments on Cu stocks:
• Total world copper stocks in the three official warehouse systems rose by a chunky
22,384 metric tonnes (MT) (+4.6%) to stand this weekend at 513,784mt and break
above the psychologically important (or so they tell me) 500k level.
• Shanghai stocks finally started to make their move. Stocks in SHFE rose by 25,734mt
(+13.8%) to finish at 211,965mt as the expected influx of surplus that flows around
the Chinese New Year period (Fire Monkey!!) begins in earnest.
• At the LME, stocks grew by a more modest 5,025mt (+2.1%) to Friday’s 242,375mt.
The action is now SHFE and it remains to be seen whether Shanghai is capable of
finally taking over the LME’s crown as copper top dog.
• Comex copper warehouse stocks lost a very minor 294mt (-0.5%) to finish the week at
59,444mt. So be it.
Here's the Shanghai-only chart. In 2014 the SHFE inventories busted through 200k in late
February, the same happened in 2015. This year 200k is taken out in late January.
Shanghai Futures Exchange Warehouse Stocks, 2014-2016
260000
240000
220000
200000
180000
160000
140000
120000
100000
80000
60000
16
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 dr3naj ht42
Mt Cu
source: Cochilco
Stocks data haven’t been much of an influence recently, that might be about to change.
Copper’s trying hard to hold above U$2/lb, the likely build-up of inventory in Asia warehouses
could become a factor in the debate. Chances are that the large purchase by the Chinese State
Strategic reserves people has already gone through and if so, that has likely crimped the stock
build until now. If we see large numbers start to accumulate on a weekly basis, the message on
slack demand among real end-users will be clear and very bearish.
Now for comments on a few of our basket stocks and no HudBay or Capstone this week, time
to feature a few other names:
Ivanhoe Mines (IVN.to): One of the reasons I included IVN in this year’s list was to keep a
closer watch on Robert Friedland’s undoubted promotional skills. Last week saw them rolled out
in spades, with the first salvo timed to the VRIC conference in Vancouver and Friedland
applying the accelerator all week, including a much-commented pitch session at the offices of
Haywood last Friday in which he headed up the marketing effort and (according to one person
present at the gig who mailed me a few lines, ty you-know-who) had them eating out the palm
of his hand come the end of the show.
As for real news , Monday’s (9) was on a “major new copper discovery” at the company’s
Kamoa project in DRC, which was followed up on Wednesday by news (10) of a resource
estimate for its Kipushi zinc mine in DRC that ran with top paragraph numbers like this:
Big Zinc Zone estimated to contain Measured and Indicated Mineral Resources of 10.2
million tonnes at 34.89% zinc, containing 7.8 billion pounds of zinc In addition, adjacent
zones contain copper-rich Measured and Indicated Mineral Resources of 1.6 million

tonnes at 4.01% copper, containing 144 million pounds of copper
All very eye-catching I’m sure. The result of
this new promo drive was very positive, as
this ten day chart shows. We’re still a mile
away from the prices demanded for IVN
stock this time last year (I remind you all
once again of Rick Rule on BNN’s Market Call
PDAC Special program in March 2015 calling
this stock dirt cheap at $1.40 and $1.50) and
as both Friedland and IVN have more strings
to their bows in potential marketing angles
and material, it would greatly surprise me if
this has been a simple one week marketing
push. No, I think we’re going to get plenty of
noise from IVN and its boss between now and the big Toronto show.
NovaCopper (NCQ.to): Last week NCQ announced (11) that its company chairman,
“congratulates our President and Chief Executive Officer, Rick Van Nieuwenhuyse and our past
Vice President, Exploration, Joseph Piekenbrock as recipients of AME BC's 2015 Colin Spence
Award for Excellence in Global Mineral Exploration.”
In the case of Rick Van Nieuwenhuyse I can only presume Canada is running out of people to
give awards to. I have no opinion on Mr Piekenbrock.
Nevada Copper (NCU.to): After last week’s up on thin volume tape-painting, the stock
reversed on the same thin volumes and we’re back to where we were. If I had to guess I’d say
that NCU is going to bounce around the 40c to 60c for the rest of the year (and close-to
untradable even in that wide range, as buyer interest has dried up to a trickle and the lack of
liquidity deters flippers), but I don’t have to guess so I won’t. I’ll just avoid this thing like the
plague and watch from the sidelines as it takes a couple of years to die.
Revelo Resources (RVL.v): The smallest market capper on our list announced Thursday (12)
that Kinross was handing back its participation of the Las Pampas project in Chile, which will
always get the “we now have 100% of the property” silver lining in the NR somewhere or
another but is always a negative in real terms. K had spent $500,000 in 2014 on its optioning in
deal and an undisclosed amount in 2015 (probably minimal) before deciding to drop it. RVL now
has the upkeep costs to cover on this 50,000 hectare land package, which isn’t a small deal in
our newly austere market atmosphere for this type of nanocap.
Cordoba Minerals (CDB.v): A word due about this tinycapper too, but this time a little more
optimistic. Two things on my mind here:
1) Robert Friedland, yes him over at IVN who has suddenly re-gained his voice, was a big
buyer of CDB stock last year.
2) CDB is one of the very few junior
explorecos actually doing that drilling
thing on its main project (San Matias) and
has been at it since late November (13).
That’s an interesting combo at an interesting time
of year, we’re now just five weeks before PDAC
and I’d bet dollars to donuts CDB is “luckily
timing” its drill assays to make a noise at the big
event. That and the Friedland Factor too.
In 2016 to date trading in CDB has been thin, with
17

just one day seeing over 100k in volume and plenty of days when it hasn’t opened at all.
However this one comes to life on news and can trade quite briskly on occasions (1m+ vols).
Here’s a 12 month chart with the visual evidence. The copper price is a major drag on
prospects of course, but it’s still the type of tinycap that could provide speculative gains for
those brave/smart enough.
The Low Cost Producer Basket
After 4 weeks of 2016, the Low Cost Producer Basket shows a gain of 13.29% to level stakes.
company ticker price 1/1/16 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Barrick ABX 7.38 1164.67 11.53 9.90 34.1%
2 Newmont NEM 17.98 529.12 10.57 19.97 11.1%
3 Goldcorp GG 11.56 830.22 9.41 11.34 -1.9%
4 Franco Nevada FNV 45.75 157.07 6.93 44.11 -3.6%
5 Agnico Eagle AEM 26.28 217.67 6.41 29.43 12.0%
6 Ang/Ashanti AU 7.10 405.27 3.44 8.48 19.4%
7 Detour Gold DGC.to 14.41 170.85 2.91 17.05 18.3%
8 Sibanye Gold SBGL 6.09 228.71 2.02 8.82 44.8%
9 New Gold NGD 2.32 509.16 1.24 2.44 5.2%
10 Buenaventura BVN 4.28 254.19 1.02 4.00 -6.5%
Prices in U$/NYSE tickers, except DGC.to (CAD$) Portfolio avg 13.29%
A massive week for the Tier 1 precious metals miners, with the mid-tiers doing nicely as well.
Our Low Cost Producer Basket really hit its stride last week and bore excellent witness, January
will go down as the month the big miners
The Low Cost Producer Basket: Weekly performance
finally fought back. All our ten basket
stocks put in gains, with the best of the 20% and comparative to GDX control
bunch New Gold (NGD up 20.8% and yes 15%
I am happy about that, thanks for asking).
10%
Then came Newmont (NEM up a massive
19.7%) and the continued excellent 5%
performance of Barrick (ABX up 15.3%), 0%
with that one now up a cool 34% for the
-5%
year and nearly a billion dollars in market
cap in front of the pack (Goldcorp -10%
languishes $2bn behind...somebody tell
Garofalo).
I’m far too happy about the way in which
my choice of ten is outperforming the GDX
benchmark, too (edit: to the point where I
nearly caught myself singing in the shower
this Saturday morning after writing up this
segment, which is a dire warning in itself)).
We’re 9.72% ahead of the GDX even with
three obvious underperformers in the group
(GG, FNV, BVN)
Buenaventura (BVN): Peru’s serious and decent source for biz news ‘Semana Economica’ last
week picked up on the “BVN gonna get debt refi” jungledrums and got an on-record quote from
company number two Carlos Galvez in this note (14). In his words (translated); “We’re in the
18
dr3naj ht01 ht71 ht42 ts13 ht7bef
basket
gdx control
source: Google Finance, IKN calcs
Low Cost Basket: Percentage difference between
basket and GDX control, 2014
2.0%
0.0%
-2.0%
-4.0%
-6.0%
-8.0%
-10.0%
-12.0%
-14.0%
-16.0%
dr3naj ht01 ht71 ht42 ts13 ht7bef
source: ikn calcs, NYSE/Nasdaq data

process of raising syndicated debt. It’s not a bond. We’ve found it most convenient to go for a
syndicate (-d debt deal)”. BVN plans to use part of the raised cash for the construction of its
hydroelectricity generator project at Huanza, part at its El Brocal asset for growth and
expansion work, part at the new Tambomayo project that’s due to go into production this year
(and almost certainly will).
Galvez also tried to paint the permitting and community travails at the San Gabriel project as an
advantage, telling Semana Economica that they may postpone San Gabriel in order to preserve
treasury (translation: they will postpone San Gabriel to teach the rebellious locals a lesson).
Franco Nevada (FNV): A discreet start to 2015 for FNV, particularly when set against the big
rebounds seen in the Tier 1 gold miners to which it’s compared these days (as well as vying for
the sector investment cash). And
that’s fair enough, but we need to
consider that stocks like GG, ABX
(and NEM to a point) are rebounding
after deep selling. Also we should
acknowledge how FNV has
performed in the last couple of
years, not just the last couple of
weeks. FNV is playing the long game
and although nominally a “gold
producer” has a very different
business model. As such, doesn’t
suffer/enjoy as much volatility as the
average gold play.
FNV is fishing for a different kind of investor than I, the retail minnow. FNV wants instos and
funds that have enough GLD on their books and are looking to add low risk alpha. Nothing
wrong with that and it makes FNV a great ticker to include in a basket such as ours, but don’t
expect me to move in and buy any this year. Not enough adrenaline here.
Regional politics
Not so much this week.
Argentina: Honeymoon over
Informal Spanish includes the word “Tarifazo”, derived from tariff and the suffix “-azo” which
means “big”. You get the word Tarifazo wheeled out when a utilility service gets a sharp price
rise and last Friday in Argentina we had a doozy of an example, when the Minister of Energy
and Mining Juan José Aranguren announced (15) that electricity prices were going up as from
tomorrow Monday Feb 1st. The main electricity companies in BsAs region, Edenor and Edesur,
have a combined total of 4.6m billed users. Of those some 900,000, some 20%, don’t have to
pay the price rise (retired, pensioners or those with take home pay of less than approx U$850
per month) according to the Macri government, but according to reality (16) they’re paying
72% more. Meanwhile the other 80% have to pay.
And how much is the hike? In the words of Aranguren, “If...you paid 25, you will now pay 150”.
In that simple phrase Argentina gets to realize what a government that proposes a free market
standard neoliberalist economic policy means, as it arrives at the door of rank and file
Argentines. While in the non-BsAs provinces of Argentina price rises aren’t as sharp, but are still
projected at an average of over 100%. Add in declarations from ex-President Cristina to
“transform your anger into action”, plus the way the “formal offer” of the Macri government to
the vulture fund/bond holdouts failed to appear on the scheduled January 25th date and we can
19

now let the fun begin.
Ecuador: Lundin doing it right with locals
I’m a little late to this, but it gets a necessary catch-up mention. On Thursday 21st January (17)
Lundin Gold (LUG.to) held a big community meeting with locals who live around the company’s
Fruta del Norte project. It informed them on the details of the agreement it had reached with
the government of Ecuador and announced on January 14th (see IKN348 and IKN349), as well
as notifying them that in the course of 2015 LUG had signed 27 different agreements with
different local communities in the Yantzaza, El Pangui and Paquisha areas (all clsoe to the
mine). According to the company at its presentation, those agreements amount to $1m in social
and community investments of all types (road repair and maintenance, agro support,
sponsorship of cultural activities etc). Company president/CEO Ron Hochstein headed up the
meeting and said (translated), “We want to make this project into a mining operation that will
serve as a reference of excellence in safety, environmental care and community respect”.
He went on to say that LUG expects to present its application to the government of Ecuador to
convert Fruta del Norte from an exploration to exploitation operation “before June 17th”. He also
said that the company was organizing a site visit on which locals and Ecuador media
representatives would be invited and could see for themselves what was happening at the mine
site.
That’s as close to impeccable as it gets in a mining company’s attitude towards locals and LUG
should be congratulated for its attitude.
Market Watching
True Gold (TGM.v) redux: The penalty for being a chicken
True Gold closed this week at 28.5c and touched my 30c upper limit target price during the
week, too. I sold on that Burkina terrorist
attack news and got 25c for mine, the
bottom of my selling range. That, kind
reader, is the sound of me leaving money
on the table for somebody else.
When I buy at 18 and sell at 25 i shouldn’t
complain, but the five cents between my
selling price and last week’s top represents
over 27% that went elsewhere. The price
paid for misreading political risk.
Minera IRL (IRL.to) (MIRL.L) update
A short piece here, just to make sure you have the very latest even though there’s not much
news to offer. However we do have three latent matters that are likely to cause news to start
flowing soon.
1) As far as this desk understands (and it’s one of those cases where no news (updates) is
not good news), to the continued amazement of anyone outside the the company its
board refuses to revoke the powers of attorney of Jaime Pinto, the ex-chair of the
company voted off out by over 91% of shareholders last year. This is utterly bizarre
and one wonders whether the board of directors has any intention of ever listening to
the company’s owners
2) According to the contract, the final option payment on the Ollachea property is due
paid by latest today, January 31st 2016. No solid news on how that’s going or being
20

dealt with, though we note that IRL has the option of paying either in cash (a little over
$2.5m) or the equivalent in shares. Your author’s contacts inside RTZ are currently in
radio silence lockdown, too
3) The “amparo” (de-facto freeze) on judicial matters regarding IRL SA comes to an end
as of this weekend, which means “things” (on either side and of any matter) can start
happening again.
I have no special inside information on this, but strongly suspect the newsflow is about to
ratchet up. If I were on “Team Hodges” I’d be very concerned about getting nothing won
before the AGM mid-year, because that’s when shareholders will likely get their chance to cast
verdict on this board, the single most shareholder-unfriendly you’re ever likely to have the
misfortune of encountering (which is saying something in Canadian capital markets). Therefore,
if they have any fight left I’d expect Team Hodges to get back on the dirty tricks sooner rather
than later.
Fortuna Silver (FVI.to) (FSM): The San José Trinidad North project under threat
This photo of the Fortuna Silver (FSM) (FVI.to) tailings pond at its San José mine in Oaxaca,
Mexico comes from this report (18) dated
January 27th 2016 n the opposition to the mine
being put up by locals in the San José de
Progreso zone around the mine.
A look at the latest FVI corporate presentation
(19) shows the importance of the Trinidad
North zone to the future of San José and of the
company, as its growth and production
expansion plans are based on the mineral there
and at the new brownfields exploration at a
zone entitled La Noria de Ortiz.
It’s there where the problems begin, because according to the news report last week, since last
September Fortuna has been trying to get locals in the zone to sell them part of their land so
that they can run with their expansion plans. The locals have refused point blank and have
continued to do so even when a Mexico State functionary came on the scene and began to
pressure them from the government’s side. One of the things they’ve been asked to do is to
separate the desired land package from the main “ejido” (local land owner cooperative) and
form their own smaller ejido so that they can then sell the land, which according to locals is
unfair and an attempt to divide the community.
There have been several local community meetings called by all sides, at which the locals’
position against any sort of land sale or long-term lease agreement has not changed. The last
one was on January 14th and according to last week’s report, another scheduled for January
27th was called off because locals are fed up with the pressure tactics being used, above all by
government officials who will not take ‘no’ for an answer as well as apparent “meddling in local
affairs”. According to spokesperson for the locals Felix Hernandez, “We are at battle stations,
they’re not going to invade us. We are nine communities in the zone, united so that they don’t
pollute us”. Also, back in November 2015 the area was a co-signee with other macro-regions
who joined in a “Prohibited Territory for Mining” agreement, a declaration that supposedly stops
any mining activity from happening in areas that have joined in the campaign.
There’s almost certainly more than meets the eye on this issue (there always is with local
communities), but what we can say today is that FVI has a significant problem on its hands
with locals if it wants to carry through on its expansion plans at San José. Up to this point we’ve
heard nothing from the company about this stiff and determined opposition to the mine’s
expansion.
21

Conclusion
IKN351 is done, we end with bullet points:
• The New Gold (NGD) (NGD.to) trade has started well. Nice to get one nicely timed for a
change.
• Good to see B2Gold rebound too. Let’s see how CEO Johnson decides to finance Fekola.
• Teranga Gold (TGZ.to) put in a crummy quarter and the optics on its management are
now even worse. Not a pleasant position, but I’m going to hold for a while longer
because I don’t think a 200k gold miner with this type of costs background can go
much lower. Famous last words, but offer me 50c next week and I’d probably sell my
shares and take the loss.
• Be long Lake Shore Gold.
I thank you in advance for any feedback. Our Top Pick stocks are B2Gold (BTG) (BTO.to) and
Lake Shore Gold (LSG.to) (LSG). 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://palisade-research.com/its-time-to-buy-uneconomic-gold-companies/
(2) http://www.mining.com/web/its-time-to-buy-uneconomic-gold-companies/
(3) http://oceanservice.noaa.gov/facts/gold.html
(4) http://www.google.com/patents/US679215
(5) http://forums.anandtech.com/showthread.php?t=2252096
(6) http://finance.yahoo.com/news/teranga-gold-outperforms-2015-cost-225952111.html
(7) http://incakolanews.blogspot.pe/2016/01/well-that-tgz-quarter-sucked.html
(8) http://finance.yahoo.com/news/edited-transcript-tgz-earnings-conference-233701092.html
(9) http://finance.yahoo.com/news/ivanhoe-mines-exploration-team-makes-123000091.html
(10) http://finance.yahoo.com/news/ivanhoe-mines-reports-independent-mineral-123101130.html
(11) http://www.newswire.ca/news-releases/novacoppers-ceo-and-vp-exploration-receives-colin-spence-award-
566449031.html
(12) http://finance.yahoo.com/news/revelo-provides-las-pampas-project-214000259.html
(13) http://www.cordobaminerals.com/s/NewsReleases.asp?ReportID=731163&_Type=News-
Releases&_Title=Cordoba-Minerals-Announces-the-Commencement-of-Diamond-Drilling-at-the-San-...
(14) http://semanaeconomica.com/article/sectores-y-empresas/mineria/177875-buenaventura-levantara-deuda-a-traves-
de-un-sindicado/
(15) http://www.lanacion.com.ar/1866522-juan-jose-aranguren-si-por-un-consumo-de-180-kwh-por-mes-pagabas-25-
pagaras-150
(16) http://www.pagina12.com.ar/diario/economia/2-291461-2016-01-30.html
(17) http://www.eltelegrafo.com.ec/noticias/economia/8/empresalundingold
(18) http://www.noticiasnet.mx/portal/oaxaca/general/ambientales/325449-mineria-bomba-tiempo-ocotlan
(19) http://www.fortunasilver.com/s/presentations.asp
22

Stocks To Follow Closed Positions 2015
Closed in 2015 closed close price
Argonaut Gold AR.to jan'15 C$1.47 14-dec-14 C$2.53 72.1% Big gain small time, profit taken
Amerigo Res ARG.to jan'15 C$0.405 20-jul-14 C$0.285 -29.6% Given up on weak Cu prices
Reservoir Min. RMC.v jan'15 C$6.05 18-jun-14 C$4.12 -31.9% sold on Cu downturn
Coro Mining COP.to jan'15 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
Stocks To Follow Closed Positions 2014
Closed in 2014 closed close price
Fortuna Silver FVI.to jan'14 C$2.80 23-dec-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-apr-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-jan-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-jan-14 C$0.86 -17.3% silver/M&A spec, rel. small
Timmins Gold TGD nov'14 U$1.38 09-apr-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-jan-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-jan-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-apr-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-apr-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-jan-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-apr-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
23

Colossus Min. CSI.to aug'13 C$0.72 24-jul-13 C$0.79 9.7% closed thru nerves on future
Pretium Res PVG.to aug'13 C$8.20 11-jun-13 C$10.14 23.7% closed to raise cash
Bear Creek BCM.v sep'13 C$2.06 30-may-13 C$2.20 6.8% sold on pol risk decision
MAG Silver MVG oct'13 U$7.00 12-sep-13 U$5.62 19.6% near-term short
Gold Res Corp GORO oct'13 U$9.52 03-may-13 U$4.98 47.7% short tgt made, covered
AQM Copper AQM.v oct'13 C$0.31 16-oct-11 C$0.125 -59.7% closed failed trade
First Majestic AG nov'13 U$11.51 07-nov-13 U$10.50 8.8% v near term short, closed
Fortuna Silver FSM nov'13 U$4.00 07-nov-13 U$3.68 8.0% v near term short, closed
Primero PPP nov'13 U$5.70 07-nov-13 U$5.75 -0.9% v near term short, closed
Starcore Intl SAM.to nov'13 C$0.235 08-sep-13 C$0.17 -27.7% ST trade didn't work, sm loss
B2Gold BTO.to dec'13 C$2.22 28-nov-12 C$2.16 -2.7% closed ST trade to raise cash
Stocks To Follow Closed Positions, 2012
Closed in 2012 closed close PPS
Soltoro SOL.v jan'12 C$0.87 07-nov-11 C$0.94 8.0% cash moved to BCM.v
Gold-Ore Res GOZ.to feb'12 C$0.84 13-oct-10 C$0.98 16.7% trade closed on ELG.v offer
Minefinders MFN feb'12 U$11.68 17-nov-11 U$14.80 26.7% target made, trade closed
Iron Creek IRN.v mar'12 C$0.58 26-sep-10 C$0.31 -46.6% time up on small bad trade
U.S. Silver USA.to apr'12 C$2.18 15-mar-12 C$1.86 -14.7% ST trade no good, cut loss
Augusta Res. AZC.to may'12 C$3.10 29-jan-12 C$2.07 -33.2% bad mkt, bad trade cut loss
Bellhaven BHV.v may'12 C$0.50 22-sep-10 C$0.28 -44.0% new mgmt not impressive
Zincore Metals ZNC.to may'12 C$0.325 29-jul-11 C$0.17 -47.7% bad mkt, bad trade cut loss
Soltoro SOL.v may'12 C$0.70 18-mar-11 C$0.41 -41.4% bad mkt, bad trade cut loss
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% fail ST trade close pre split
Estrella Gold EST.v aug'12 C$0.91 27-mar-11 C$0.14 -84.6% Closed on port realignment
Fortuna Silver FVI.to sep'12 C$1.07 03-may-09 C$5.32 397.2% sell call $6.17/ Mar25
Strait Minerals SRD.v oct'12 C$0.125 09-dec-11 C$0.12 -4.0% closing coverage til FY13
Sunward Res SWD.to oct'12 C$1.47 13-mar-11 C$1.21 -17.7% sold, took loss
Gold Res Corp GORO oct'12 U$21.47 09-sep-12 U$17.40 19.0% Short trade closed
Yellowhead Min. YMI.to nov'12 C$1.00 01-apr-12 C$0.63 -37.0% sold, took loss
Primero Mining PPP nov'12 U$7.26 07-oct-12 U$6.73 7.3% Short trade closed
Bear Creek Min. BCM.v nov'12 C$3.38 07-nov-11 C$3.72 10.1% Took small profit
Vena Resources VEM.to dec'12 C$0.70 31-may-09 C$0.18 -74.3% Failed trade (caps F)
Galway Res GWY.v dec'12 C$2.19 24-nov-12 C$2.30 5.0% closed good ST arb trade
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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