IKN #353Premium

The IKN Weekly
Week 353, February 14th 2016
Contents
This Week: In today’s issue, Golden violence, My general trading strategy for the next month.
Fundamental Analysis: Updating B2Gold (BTG) (BTO.to).
Stocks to Follow: Overview, New Gold (NGD) (NGD.to), Lake Shore Gold (LSG.to) (LSG),
Atacama Pacific (ATM.v), Teranga Gold (TGZ.to) (TGZ.ax), Dalradian Resources (DNA.to)
(DALR.L), Sandspring Resources (SSP.v), Lara Exploration (LRA.v), Starcore Intl (SAM.to).
Copper Basket: Overview, Atico Mining (ATY.v), Nevada Copper (NCU.to), Cordoba Minerals
(CDB.v).
Low Cost Producer Basket: Overview, Franco Nevada (FNV):
Regional Politics: Colombia: The Páramo ruling, Chile: The mining layoffs continue,
Nicaragua: Concession areas reduce, Argentina: The vulture fund deal delayed, Argentina:
Export taxes on mining eliminated, Argentina: Chubut’s legal problem with mining, Peru: A wild
election campaign begins in earnest.
Market Watching: The Zombies Awaken (aka ‘Do Not Feed The Animals’ part 904), A rant on
and from the First Mining Finance (FF.v) Clifton Star (CFO.v) deal, Continental Gold (CNL.to):
The cracks appear, Kinross (K.to) (KGC) files a shelf prospectus for C$1Bn (with a B), Primero
Mining (PPP) (P.to) Richmont Mines (RIC.to) and Renaud Adams.
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 talk a little more about the way I’m going to play February and the gold surge, plus
confirmation of the change in attitude in B2Gold (BTG) (BTO.to), which is now going to
stay as a Top Pick and The IKN Weekly’s largest position.
• I update on plenty of other long positions in the ‘Stocks to Follow’ list.
• I have a good old rant about the false value of “Zombie Juniors” and “Optionality’, via
two pieces in the ‘Market Watching’ section.
• The Regional Politics includes a look at the state of play in the Peru presidential election
race (which has moved into high farce) and what the Colombia Supreme Court’s
páramo decision means for the country and for FDI in mining. Three pieces on
Argentina too, which is becoming a target country for many (IKN urges caution).
Golden violence
I wrapped up last week’s Fighting the Fed piece in this way:
”...I’m guessing we get a few more weeks of bullish attitude towards the
metal (gold) and I’m confident we’ll see North of U$1,200/oz, but that may
turn out to be just a few days, I don’t know how panicky Janet and her pals
1

feel right now. The advice therefore is to stay long gold stocks and add some
more when you see fit, but don’t fall for all the To-Da-Moon-Alice narrative
that’s equally as stupid on the other side of the shouting match. Gold’s move
is welcome, but it’s not a straight flight to wonderland and the perfect day to
cash in will be the day before the Fed makes its change in narrative clear.
That’s virtually impossible to guess correctly so I’ll take the day after and the
haircut that’ll come off the top of my paper winnings. I will not fight the Fed.
Finally and to be clear, all the above addresses how I see the near-term
market for gold and precious metals. In the medium and long-term I’m as
bullish as ever. To sum up, I see further upside in gold stocks, then a jag
down at some point in “the next few weeks”, then a period of consolidation,
then the return to gold price appreciation. So make the most of what the
market is offering us at the moment.
To a certain extent, the above fits in fine with the action in gold and precious metals miners last
week. However the speed and violence of the mood and the way gold took out U$1,200/oz in a
couple of days rather than my gentler timescale, is very different from the scenario I’d cooked
up in my head. Yes my theory and last week’s reality are on the same track, but mine was a
gentle footpath with scenic views of rolling green hills to take in and admire, reality was an
autobahn.
Due to that, you got the Flash update on Thursday (see Appendix 3) which announced the
purchases and additions as planned. However, be clear that the overall idea is still to harvest in
February rather than sow, I’ve already taken profits in the large LSG holding (it was bumped up
to ‘Top Pick’ a couple of weeks ago in order to make it bigger), the successful near-term trade
in NGD is on the way out and as you’ll see below, I’m primed to convert other positions into
cash if the right price and opportunity shows up in the days ahead.
For more on that, read this next section.
My general trading strategy for the next month (or so)
We must be humble. We are so easily baffled by appearances
And do not realise that these stones are at one with the stars.
It makes no difference to them whether they are high or low,
Mountain peak or ocean floor, palace, or pigsty.
There are plenty of ruined buildings in the world but no ruined stones
Hugh MacDiarmid, 'On a Raised Beach', 1967
My favourite lines from Hugh MacDiarmid’s geology prose poem (if you want a crash course in
geological terminologies find a copy the whole piece, it’s great fun) are thrown into today’s
mixer to remind us that geology doesn’t change, rocks don’t change, the mineralization
underground or at the surface hasn’t changed, what does change is our attitude towards it.
Suddenly and from out of nowhere, people “like the miners” and big institutions full of big
people with big clients and big ideas want to own lumps of gold. Fair enough. Me personally,
for sure I’ve missed opportunities along the way and I’ve been chased out of positions too early
by my own special brand of neurosis, but I’ve never lost sight of the fact that there is a whole
sector of industry that’s been wildly undervalued by the larger investment and business
community and time, only time, would change that. In so many words, I’ve stayed net long
gold, I’ve stayed net long the gold miners.
Here we are today, the tide has turned in no uncertain manner, gold is well above U$1,200/oz
and love is in the air for the miners on this Valentine’s Day. However, I’m not going to get
carried away on the upside either, mine is not the shouts of To Da Moon and by way of
example I cringed on receiving a mail from blog reader “K” (a non-IKN Weekly subscriber I
hasten to add, hope it stays that way) that included:
2

“Gold: The questions in my mind are... when the battle over $1450ish will
begin, how long that will take, and what direction it will go from there... and
how on earth the fed or anyone else can do anything about suppressing gold
ever again?”
Seeing gold take out U$1,200/oz is a pleasant experience for a gold/gold miner long such as I.
Assuming U$1,450/oz as some sort of fait accompli on the back of that move simply tells me
there are still Darwinian evolutionary processes left to play out. People, if you want to read
ZeroHedge for entertainment value then go right ahead and have the best of times
but...please...
To practical matters: Here’s a segment from the notes written on Dalradian (DNA.to) below in
‘Market Watching’. I’m repeating it here because in five lines it’s a quick window on the way I
see the market right now.
LSG.to: profits taken
NGD: profits being taken
ATM.v: May sell and take profits
TGZ.to: Added last week, but may sell if it goes higher
DNA.to: Ditto
That’s as big a clue as you can get and once again I stress, ultimately The IKN Weekly’s stock
calls are about what I am doing with my money. I am not you, you are not me, my
circumstances are different from yours, I don’t hit the buy and sell buttons for anybody else but
me. Call me a whuss if you must (and I wouldn’t disagree, when it comes to speculations in
juniors at least), my desire and intent to take profits on this gold upmove should be clear, but
its not a cut-and-dried thing either and adjustments are necessary to the general plan as laid
out last week. My best guess on the timeframe last week was “in a few weeks” and for gold
“above $1,200” but as one of those has already been taken out, and in a very stylish manner, it
was obviously imperfect as a trading frame. What has changed is my attitude towards the
velocity of the changes and what that might entail and that means I’m making a strategic
change in my attitude towards the Top Pick and biggest holding B2Gold (and biggest by quite a
distance too, now that LSG has gone). That’s now back as a longer-term hold and I’ll be okay
about letting it ride through any retrace (if it comes). What hasn’t changed is that as soon as
the Fed starts to jawbone on not raising any further (and it will, be in no doubt) I expect the
rally in gold will come to a halt, in the near-term at least. Due to that, I want to raise cash in
the current window and that’s going to be the work of February.
So come March and post-PDAC, expect there to be fewer stocks on the ‘Stocks to Follow’ list
and expect me to be prowling around, cash in pocket, looking for a new place to deploy the
ammo. Be clear that near-term is just that, it’s not a judgment call on the underlying philosophy
of holding gold. Medium-term and long-term I’m still as bullish as ever about gold and its
miners, then somewhere along the line I expect copper to come out of its funk and provide us
with some gilt-edged investment and trading opportunities. However, if I’m wrong (it happens
all too frequently, let’s be honest) I’m still going to be net long gold miners all through this
2016 thanks to the main core holding of B2Gold, plus the bits and pieces that orbit around it.
Plus if I’m wrong and gold does indeed do a ZeroHedge and goes directly to U$1,450/oz to fight
its next battle, I can always buy back the stocks I sold too early. The only damage I’ll do is to
my own ego.
Finally, as I re-read the above and edited slightly, my mind went back to MacDiarmid and a
couple of lines found in another section of his ‘On a Raised Beach’:
A culture demands leisure and leisure presupposes,
A self-determined rhythm of life.
That, ladies and gentlemen, is exactly why I own physical gold bullion.
3

Fundamental Analysis of Mining Stocks
Updating B2Gold (BTG) (BTO.to)
This is a story and a stock that I’ve thrashed to death over numerous editions of The IKN
Weekly, we’ve looked at it from all the angles you’d care to imagine and in context with both
the market (downturned, bear, chronically moribund) and its peers. Today’s update is different
for three reasons:
1) It’s short (cheers heard from the back of the hall). I’m not beating about the bush.
2) It’s bullish. As noted last week in the Flash update of Thursday (see Appendix 3), gold’s
price move above U$1,200/oz makes changes in attitude towards stocks, their outlooks
and their current price decks necessary.
3) It’s not about BTO’s production schedule because finally, at long last, we’re seeing
mining companies start to get revalued on what they own rather than just what they
do. And the process is still in its infancy, but it’s the main reason why we expect strong
gains from BTO off its current price level.
We last covered BTO in detail in IKN348 and IKN349, both those in January 2016 (though it
seems like a longer time ago now). In today’s update I’m going to use the date of IKN349,
January 17th, as a reference point because we’ll be able to see how far the mining sector has
bounced back since then and also why I believe there’s plenty more to come from BTO, despite
its decent upmove, because it’s still lagging its peers. It won’t do for much longer, though. Be
long BTO.
Kinross versus B2Gold: I was trying to find a succinct way to frame my newly bullish attitude
to B2Gold last week when one fine lunchtime I took a phone call from A. Person (a person in
the mining sector) who floated his idea at me; he was going to buy Kinross (KGC) (K.to stock
that day and wanted an opinion. I was generally in favour as I know the man in question knows
his gold miners very well, reads balance sheets and understands mining operations,
understands the pros and cons of a trade in a company like K, and importantly was only putting
risk capital to work. As part of my comments to him I said (paraphrasing myself), “Isn’t it funny
how Kinross was slated by the anal yst community when it bought Round Mountain/Bald
Mountain, they all said K was making a big mistake, it was betting the farm, it looked risky. And
now, $100/oz gold later, they’re all congratulating Special K for nailing down a strong gold
producing asset at the right time, getting in at the bottom of the market, praising the
company’s bosses for their smart acumen!”.
And that’s when it hit me.
• Kinross was sold down very hard in 2015, big insto holders bailed and bailed again.
• Questions were raised about its creditworthiness and the amount of debt.
• Questions about its assets and growth plans.
• Suddenly the market turned and shares in K go ballistic. It gets all the upside leverage
from those tricky debt and credit questions that it suffered from on the way down, its
growth plans now look smart, etc etc.
So Kinross has bounced wonderfully, with a market attitude that’s gone from from hate to love.
And now, B2Gold:
• B2Gold was sold down very hard in 2015, big insto holders bailed and bailed again.
• Questions were raised about its creditworthiness and the amount of debt.
• Questions about its assets and growth plans.
• Suddenly the market turned and shares in BTO...have rebounded nicely, but nowhere
nearly as much as they’d suffered in 2015 and January 2016. Not yet anyway.
4

And how much are we talking about? Check this chart, which compares the same company peer
group we used against BTO in IKN349 dated January 17th. This time we see the market caps of
each company as at IKN349 (Jan 17) and today (Feb 14).
Market caps of BTO peers, Jan 17th 2016 and Feb 14th 2016
14000
13000
12000
11000
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
5
MEN MEA CGK LGBS ot.CGD OHAT ot.GXT OTB ot.YUG GA ot.GSL IVF PPP
U$m
jan 17th
feb 14th
source: NYSE, TSX, IKN calcs
As you can probably make out, they’ve all done pretty well and added market cap in the four
short weeks since IKN349 (except for Primero (PPP) (P.yo)) which has had its own Mexico tax
problems). But the scale that includes NEM and AEM as bigboy Tier 1 players does the visuals
no favours, so here instead is a better way of presenting the above data, the percentage
change in market caps between IKN349 and IKN353 today:
Four weeks in mining: The percentage price changes for our BTO
peer group of mining companies, January 17th to February 14th
140 126.7
120
98.3
100
80
65.7
60 59.7 56.1 54.7 47.8 45.9 45.0
40 30.9 27.4
20 11.9
-17.6
0
-20
CGK ot.YUG LGBS MSF/IVF ot.GXT ot.GSL GA MEN GTB/OTB ot.CGD MEA OHAT PPP
% change
source: NYSE, TSX, IKN calcs
And here you see just what kind of a rip Kinross has been on, up a cool 126.7% in those four
short weeks. You can then cast your eye over other names, some that have held up well during
the prolonged downturn, others that are new on the scene, others with very solid balance
sheets. But what you see when you get to BTO is a company that, in 2015 and that particularly
nasty overselling in early January 2016, took a hit every bit as bad as Kinross but so far, on the
way back up, is way under-performing Special K and even slightly under-performing the others
in its peer group. So far it’s getting no love at all from the market, I contend this will change.
To what level can we expect reasonable expect BTO assets to be revalued? That’s the big
question, because we get a handle on that and we can pencil in a near-term target for the
stock. And that’s where I want to be today, with a target for the separate trading position that I
took out at U$0.85 (still can’t believe it went as low at 60c) and i now showing a modest profit,
thanks to the rebound. This position is separate from the longer-term one but add them
together and I feel as though I currently own too much BTO. So the near-term traders will be
sold at some point, but I’m not going to leave cash on the table unnecessarily either.
To get a handle on the asset revaluation question, first let’s consider where BTO’s share price

sat compared to its book value on January 17th in IKN349. This is the chart from that day:
THAT WAS THEN...
Price/Book Ratios of BTO and peer group
ON JANUARY 17TH 2016
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
6
ot.CGD MEA ot.GXT MSF/IVF ot.GSL OHT/OHAT GA/ot.RF MEN GTB/OTB ot.P/PPP CGK
source: TSX, SEDAR
Back then we stood at 0.45X or so, in
other words well down on the apparent
book value of the assets and deep in
“dysfunctional company” territory. But
notice, Kinross at 0.38X was even worse.
On the subject of debt ratios, BTO stood
in this way against peers, better off than
Kinross (a higher number is better in this
one) and on terms with Agnico Eagle.
But it’s the change in perspective in the
price/book ratio from then to now that
really interests us, because is gives a
handle on how much asset revaluation has gone on in the space of just four short weeks.
Here’s the updated chart:
...AND THIS IS NOW
Price/Book Ratios of BTO and peer group
(latest share price, latest financials)
2.00 1.87
1.80
1.60 1.58 1.57 1.54 1.48
1.40
1.16
1.20 1.05
0.94
1.00 0.82
0.80 0.68
0.60
0.37
0.40
0.20
0.00
MEA MSF/IVF ot.CGD ot.GXT ot.GSL GA/ot.RF OHT/OHAT MEN CGK GTB/OTB ot.P/PPP
Book Value/Financial Debt ratios of BTO and peers
8.0
7.0 ON JANUARY 17TH 2016
6.0
5.0
4.0
3.0
2.0
1.0
0.0
source: TSX, NYSE, SEDAR
Firstly let’s note that apart from Primero which has its own company-specific problems, they’ve
all gone up (even the under-performing Tahoe Resources). But B2Gold is clearly lagging its field
here, given a low 0.68X P/BV. Compare that to to (what I consider to be the closest model at
the moment) Kinross, which may still be in “dysfunctional company territory at 0.82X but has
more than doubled in value, assets-wise. I see no reason why B2Gold cannot emulate that
move and get above 0.8X P/BV, the type of figure which still suggests it’s under financial debt
pressure but also takes into account the new revaluation of what it owns. After all, this is still a
well operated free cash flow generating mining company that’s expanding rapidly and in its next
build-out project, Fekola, has a real live company maker on its hands.
MSF/IVF ot.P/PPP ot.GSL ot.CGD MEA GTB/OTB CGK MEN ot.GXT
source: TSX, SEDAR

Valuing B2Gold today
And that’s it really. I could pad out this piece with more charts and waffle, but the crux of the
buy call (nay, strong buy call) on B2Gold today is simple enough. We’re bullish BTO for its asset
book (and saying that makes a very pleasant change for your balance sheet fanboy author):
• Up and down the sector, gold mining companies are getting newly valued thanks to the
pop in gold.
• Their assets, previously all-but ignored as a price driver, are back and in the target
price mix.
• B2Gold has enjoyed a very decent 45% rebound in the last four weeks (or 73.3% if you
count the very bottom intraday price to Friday’s close) but when considered on its
assets, “what it’s got”, it’s still lagging peers.
• That lag won’t last forever and by aiming for a modest 0.8X Price/Book ratio target
we’re not asking the earth, either. That kind of level doesn’t suggest “strong balance
sheet” all of a sudden, it recognizes that things are getting better and B2 isn’t in half as
much trouble as it was.
Therefore I’m setting a near-term target on B2Gold’s US BTG ticker of just over 0.8X
P/BV, which if you do the numbers comes to U$1.30 (or CAD$1.63 at current forex),
representing a 25% upside to Friday’s close. That’s the price level at which I’ll sell my
separate trading portion of B2Gold shares and at that point I’ll be able to take stock of what to
do with the bigger, longer-term portion as well (to which I added last week). And be clear, we
don’t need a further rocket boost from gold to get BTG to U$1.30 either, all it will take is gold
consolidating where it is and the market recognizing a quality stock that’s lagging the field.
We’ll see U$1.30 in BTG and we’ll see it soon.
Stocks to Follow
Of the 12 positions (or 11 stocks, BTO counts twice) we had open this time last week we saw
two put in week-over-week losses (LRA.v and REG.v, both of which had popped on very low
volumes the week before last so we’ll forgive them).
The other ten positions made gains, some of them big, some of them very big. The best moves
in percentage terms came from Atacama Pacific (ATM.v up 80.0%...yeah, eighty), Sandspring
Resources (SSP.v up 45.9%), Teranga (TGZ.to up 29.4%), Starcore (SAM.to up 23.2%),
B2Gold (up 23.1% in the USA, up 21.4% in Canada), Lake Shore Gold (LSG.to up 14.8%) and
to round off the double figure percentage wins Dalradian (DNA.to up 11.5%). It’s Valentine’s
Day, love is all around.
7

With the sale of Lake Shore Gold (LSG.to) last week, we now have eleven open positions on our
positions ‘Stocks to Follow’ list, four below our self-imposed maximum of 15. That’s set to drop
even further by this time next week. Six of the open positions are in the green and five are in
the red. Sadly, at least three of those red positions are deep SCUBA bagholds and are likely to
stay in the red for the next few weeks, even if this market rallies further.
company Ticker this week Avg Price Reco date Current PPS Gain/Loss% Notes
TOP PICK
B2Gold BTO.to STR Buy C$2.11 12-sep-14 C$1.42 -32.7% Suddenly looks v cheap
Metals Producers (in current order of preference)
B2Gold BTG STR Buy U$0.85 13-jan-16 U$1.04 18.8% separate trade tranche
New Gold NGD SELLING U$2.06 24-jan-16 U$2.95 40.3% half sold, will sell rest next wk
Teranga Gold TGZ.to hold C$0.54 15-feb-15 C$0.55 1.9% added a few, will exit soon(ish)
Starcore Intl SAM.to spec buy C$0.48 10-jan-15 C$0.345 -41.7% Starting to move, trying to add
Land Grab Stocks (in current order of preference)
Sandspring Res SSP.v hold C$0.195 18-oct-15 C$0.27 38.5% Risky small play, 30c tgt
Atacama Pacific ATM.v may sell C$0.19 26-apr-15 C$0.36 89.5% Spec buy, cheap adv proj
Lara Expl. LRA.v spec buy C$1.15 08-apr-12 C$0.34 -70.4% solid biz model, LT hold
Other Recommended Stocks (in current order of preference)
Dalradian Res DNA.to Buy C$0.67 27-oct-13 C$0.87 29.9% tgt still 95c to $1, added
Focus Ventures FCV.v spec buy C$0.23 01-jul-12 C$0.07 -69.6% Hit hard by PFS news
Regulus Res REG.v hold C$0.30 06-apr-15 C$0.29 -3.3% 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
Lake Shore Gold LSG.to feb-16 C$1.10 07-apr-15 C$1.69 53.6% bot out, sold early in process
2009, 2010, 2011, 2012, 2013, 2014 and 2015 closed positions in appendices below
Now for some notes on current basket stocks.
New Gold (NGD): Sold half, still selling. I called sell on the stock last weekend in IKN352
and said I wanted U$3+ if possible. Then as noted through the Flash updates last week (see
appendices) I managed to get too greedy, then sell roughly half of my holding at U$2.86
average, then decide to wait on the sale of the rest of it until the week to come. Therefore and
to be clear:
1) I’m still a seller of NGD next week and will dispose of the half that I still hold.
2) I have left the position open on the above table (no “semi sale” recording at U$2.86).
This time next week it will be a member of the ‘closed in 2016’ groupette and with the
average sale price noted.
3) That’s all.
I realize that we’re just days away from NGD’s 4q15 financial results and “Investor Day” promo
bash, set for this Thursday February 18th. Depending on how the first couple of days look (i.e.
movements in the price of gold) I may hold until Thursday or Friday and look to gain from a
new round of interest generated by the YE financials (which I think will contain a strongly
positive message for Rainy River, see IKN349 for more) and the investor day marketing. But
Friday will be my limit date for holding what was always going to be, and still is, a near-term
trade opportunity. I want to take the profit and bank the cash on this one and that’s what I’ll
finish doing in the next five trading days.
8

Lake Shore Gold (LSG.to) (LSG): Position closed. The main subject of last week’s edition
and the various Flash updates I peppered you all with between then and now, the final decision
was announced in the Flash update of Friday morning (see Appendix 4) to sell the position and
take the profits. I said that I
wanted CAD$1.70, I eventually
took CAD$1.69 (sold into a suitable
bid and I do not care one jot that it
closed the day two pennies higher
than that.
I’m allowed to moan and gripe
about the deal accepted by Tony
Makuch on Monday morning, I
could even speculate on the
potential that he was self-serving
more than looking after his
shareholders (around $4m in
change of control bonuses plus you
get to keep your paying job and
not even change offices, can’t be
bad), but what I’ll do instead is show you this chart above, which compares the last ten days of
LSG.to against a bunch of other squiggly lines.
In there you see:
• GDX and GDXJ to give industry average benchmarkers
• NEM and GG to show you what the larger caps have been doing
• Richmont (RIC.to) and B2Gold (BTG) as examples of more direct peers for LSG
As you can see, there’s a small spread of percentage gains over the seven lines, but they all
show roughly the same pattern and share price evolution over the period than ran before
during and after the announcement of the TAHO all-paper buyout of LSG.
SO WHERE IS THE BUYER PREMIUM? Where’s my M&A love? What’s noticeable here is that
shareholders of LSG would almost certainly have been equally rewarded by the current stock
market interest in mining companies even without an accepted bid from TAHO! What I, as a
person looking for a “M&A play” in LSG all this time, got for my trouble is no premium, no
payout, no “win”, for being right about LSG and seeing it as a highly coveted asset. And that is
simply because LSG signed onto a poor deal with TAHO, it sold out.
How disappointed am I really? Truly? Well in fact not massively, how can I moan and groan too
much about a booking a 50%+ win in a large position in a junior mining company? But I will
say that with no reason to stay in the stock, no “alpha compared to others and LSG now tying
its horse to a company run by an arrogant empire-buider who has made it crystal clear he
intends to use more paper to expand via new M&A, I see no reason to stick around. And that’s
without my deep misgivings of TAHO’s main Escobal asset and the potential it shows for being
hit by a Black Swan political event.
I’m glad to have sold and it means my war chest is back at “cash available for purchases”
level, even after the additions made to several positions on Thursday. Case closed.
Atacama Pacific (ATM.v): May take profits. Last week we noted the 134,500 shares that
traded at 20c (two Thursday’s ago) and liked it, but trading was still thin and also said that I
wasn’t going to get my hopes up too high. It turned out that rebound was a mere hors
d’oeuvre, rather than the main event.
As this ten days chart versus GDXJ shows, volume started running into ATM on Monday and
9

kept on coming, to the point where on Thursday and at the behest of IIROC, ATM issued a NR
(1) stating that it was unaware of any material change in the company to have made its stock
price jump the way it did. On Friday the
price backed off a little, but we still closed
at 36c (the bid, with ask at 40) and that
means ATM is suddenly a big percentage
winner for our ‘Stocks to Follow’ list after
spending most of its year on the table in
the red, sometimes deep in the red. It’s a
weird world.
So what to do? Well first let’s state that
although a very big move, it’s exactly the
type of thing that can happen to your
unloved junior exploreco when a market
tide turns, so although a welcome surprise
it’s not something I’m palpitating about
either; after suffering the negative side to this junior mining game for an over-extended period
it’s nice to get one of the nice things happening to a semi-forgotten position for a change.
With that said, we move to practical matters and the story behind that “May take profits” bold
type above. In this case yes, we could let ATM ride and see how far it goes, but the immediate
problem for current shareholders such as I is that ATM doesn’t have much in the way of cash
treasury...in fact it’s been running on fumes for the last couple of months. That means it’s
going to be keen to take advantage of this new interest in the company and that means...yup, I
expect them to run a placement and crimp the upside potential. Therefore, I’m going to try and
get out of my small position (I bought twice, neither of them were big purchases) at-or-around
this 36c to 40c level if that nice Mr. Market lets me. Be clear I’m not in a rush to dump either,
it’s not a case of running down through any light bidding first thing Monday morning, the cash
stacked in ATM was always the type that wasn’t under time pressure and that attitude doesn’t
change even after a big price pop. But if I can get a (near) double on the trade I’ll take it, what
with wanting to lighten before PDAC arrives and all that.
Teranga Gold (TGZ.to) (TGZ.ax): Position added, but will sell on a run-up. As per the
Flash update Thursday (see Appendix 3 below), instead of looking to sell at 50c (a view aired
just two weeks ago, my how things change) I bought some more at 52c and got my cost
average down to 54c.
However, be clear that I’m still an overall seller of TGZ if it gives me a profitable out in the next
few days, that the addition to this name is a purely opportunistic short-term trade to try and
tack on some extra bonus value at the end of a somewhat disappointing ride (so far). There’s a
strong chance that the market sees “laggard value” in TGZ in the days ahead as it takes profits
in the first-movers and looks to deploy those profits in less-loved names. Something North of
60c would tempt me.
Dalradian Resources (DNA.to): Position added (but will sell at target). Before diving
in, I want to say that I spent more time trying to work out what near-term call to make on DNA
in the above table (as you can see, I settled for “buy”) than on any other company this week.
That’s because on the one hand I see upside here, on the other I’m a seller if my target is
pinged. Taking a wider view for a second, there’s a pattern of behaviour starting to show, is
there not?
LSG.to: profits taken
NGD: profits being taken
ATM.v: May sell and take profits
TGZ.to: Added last week, but may sell if it goes higher
DNA.to: Ditto
10

So to DNA-specifics and as per the Thursday Flash update (see Appendix 3) and the call to add,
I got a some more (more than I though I’d but in fact, I got a bit carried away and hit the buy
button one more time)
averaged up on the position
and then sat back to enjoy
the rest of the move.
However (and here come the
mental gymnastics), I’m still
a seller at my current target
price of $0.95 to $1.00 and
here’s why. First a quick re-
cap of the project economics
as stand today, via one of
the pages of DNA’s latest
corporate presentation (the
easy hack and good enough
for our needs)
We see that at U$1,200/oz
gold we’re looking at a
36.2% IRR and an NPV*8
(the correct discount assumption in my view) of U$504m. Capex is set at U$249m with
contingency, so we’ll fly with that number. All those are pretty decent parameters, but we
should keep in mind this is PEA level calculations and we’ll know a lot more once the company’s
full feasibility study (FS) is completed at the end of this year.
Now let’s check in on the share structure. Currently DNA has 214.2m shares outstanding and
297.7m shares fully diluted. The lion’s share of the derivatives are the stack of 50.3m warrants
emitted during the last financing, with a strike price of CAD$1.04. That’s a pretty heavy
overhang in my view.
If we assume CAD$1 = U$0.80 forex, a share price of CAD$1 would value DNA today at just
over U$171m. I disregard all cash treasury at bank today because DNA is set to use just about
all that cash during its 2016 program and production of its FS.
However, if we move up to CAD$1.10 and add in those 50.3m warrants, we’d get a company
worth just under U$233m and with U$42m extra cash at bank, so let’s call it U$191m (a de
facto EV). What’s notable here is that, for any potential acquirer of Curraghinalt/DNA, there isn’t
really much damage done by moving above that warrants exercise price in the great scheme of
things. But what it does mean is that the warrants holders get their bonus prize, which I’m sure
they will require from any buyout deal.
Which brings us to the crunch question: Would a company a) buy out DNA.to for a price such
as CAD$1.10, which would cost it around U$191m in real terms, then b) build a mine for
U$249m in order to c) enjoy an NPV of U$504m at U$1,200/oz gold? Or put another way, it
invests U$440m and gets U$504m for its troubles after 18 years of mining.
My answer: Maybe they will once there’s a FS in place that goes beyond the current sketch
engineering of the project and provides a more solid theory. And maybe they will if gold’s
priced at U$1,300/oz. Or U$1,400/oz. And maybe they will thanks to the clear exploration
upside at Curraghinalt, because we can only compare projects on an apples-to-apples for a
while, it’s always apples to oranges after a certain point. But for me, today, committing around
U$440m to a mine project with a PEA in a U$1,200/oz (arguable) gold environment...it’s too
rich for my blood today. And if DNA.to isn’t on the block at a CAD$1.10 selling price, it’s not
going to breach that CAD$1.04 warrants overhang for the time being, either.
11

All that’s a long-winded way of telling you that I like this stock and its project a lot (I wouldn’t
have stuck with this company, an exploreco, in the bearish hell of 2015 otherwise) but I do see
an upside price limit to the stock at the moment. We could come back in a year’s time and the
whole sector could be a different fish,
plus DNA with a strongly economics
and workable FS under its belt, and
under those circumstances I may be
prepared to pay more to own the
stock. But not today, today if I see
95c show up on the ticker I’ll be
tempted to hit the sell button and if it
reaches CAD$1.00 I’m definitely out.
So be clear, if DNA goes on a tear
next week don’t expect me to tell you
I’ve sold at $1 in another Flash update
as it won’t be necessary. They’ll be
gone at that price, period.
Sandspring Resources (SSP.v): Holding through. Here’s a short note that’s best read in
the context of the above on Atacama Pacific (ATM.v) and the “Zombie Awaken” piece in ‘Market
Watching’ below. In this case I’m not a seller
yet, let’s see how far it can run. This is junior
mining speculation after all, part of the fun is
being illogical at times.
SSP was another of the tinycaps that moved
hard last week (and another that turned one of
my red inkblots into a green inkblot on the
above tracking table). It showed positive action
all wek but the main move came Friday after
SSP trumpeted the new purchases by Frank
Giustra into the stock (2). My best pal Frank
now owns 10.951m shares, or 12.85% of
shares out and when you add in his options and
warrants covers 16.2% of the fully diluted total. We’ve seen on other occasions that “Mister Big
Has Bought More Of Our Stock!” announcements from juniors have fallen flat, but SSP (and
Giustra) made the right marketing move at the right time and banked the feeding frenzy.
Summing up so far, we have a nicely timed marketing pump, a big move on a decent volume
spike and a share price that’s closing in on my pencilled in 30c target (after being a long way
into the red for most of the time I’ve owned it. It’s potentially another candidate for a sale and
profit-take, but on this occasion I’m going to hold longer and see what SSP can do.
Why so? Easy, it has cash. SSP is unlikely to go to market in the next few days or weeks to run
an equity financing (and thereby crimp any potential speculative upside) because it already has
all the working cap it needs for the next few months. The fact I don’t think it has much space
to move above 30c due to straight comparative fundies (i.e. its ounces in situ start to look
expensive alongside other development projects) doesn’t mean it can’t run higher, it would just
mean that I’m wrong (again) but this time in a most positive way. It’s right to take a risk or
three and let some cash run on the momentum. As I’ve already taken or am taking plenty of
profit in other places, SSP is the one we can shoot the moon with. That and BTO anyway.
Lara Exploration (LRA.v): With fixed mining assets starting to be given dollar value by this
market (see ATM.v for an example), we may be in for a run back up to a more respectable
share price for LRA.v, one of the better and most efficiently-run prospect generator companies
out there. We recall that Miles Thompson has been a constant buyer of his own shares during
12

this downturn and has pushed his holding up to 10% (pretty good going on open market
purchases) and that he’s particularly happy about the opportunities he’s seeing in Brazil right
now (he and his team are experts in navigating the difficulties of the Brazilian legal system for
mining concessions). The problem will continue to be traded volume, which is traditionally too
light to make LRA into a viable trading vehicle.
Starcore Intl (SAM.to): In Thursday’s Flash update (see Appendix 3) I mentioned that I was
looking to add here as well. In the end I didn’t, as
the best price on offer from that moment was 32.5c
(and then only very briefly) which wasn’t my idea of
value at all. I’m not into chasing bids at the best of
times, even less so when the market goes on tilt.
Volumes stayed bitty and on the low side, but
you’re not going to get many complaints from me
as it was pleasant to see this one move with the
tide of the larger producers (for a darned change),
which underscores how this gold/stocks move really
was across the board stuff.
The Copper Basket
After six weeks of 2016, The Copper Basket shows a 9.40% loss to level stakes.
company ticker price 1/1/16 Shares out Market Cap current pps gain/loss%
1 HudBay Min. HBM.to 0.35 235.23 639.83 2.72 -48.8%
2 Ivanhoe Mines IVN.to 0.61 778.96 482.96 0.62 1.6%
3 Reservoir Min. RMC.v 4.08 48.46 201.11 4.15 1.7%
4 Capstone Min. CS.to 0.44 382.04 129.89 0.34 -22.7%
5 NGEx Resources NGQ.to 0.65 187.71 110.75 0.59 -9.2%
6 Copper Mtn CUM.to 0.445 118.8 52.27 0.44 -1.1%
7 Copper Fox CUU.v 0.125 417.64 52.21 0.125 0.0%
8 NovaCopper NCQ.to 0.395 104.33 40.69 0.39 -1.3%
9 Nevada Copper NCU.to 0.66 80.5 37.43 0.465 -29.5%
10 Atico Mining ATY.v 0.28 97.59 31.72 0.325 16.1%
11 Western Copper WRN.to 0.38 94.19 31.08 0.33 -13.2%
12 Hot Chili Ltd HCH.ax 0.09 420.12 27.31 0.065 -27.8%
13 Amerigo Res ARG.to 0.205 173.61 23.44 0.135 -34.1%
14 Cordoba Min. CDB.v 0.16 79.45 12.71 0.16 0.0%
15 Revelo Res. RVL.v 0.055 99.19 6.94 0.07 27.3%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg -9.40%
The basket average dropped 1.5% in a mixed week for its components that saw, with
exceptions to prove the rule, the bigger caps
retreat and consolidate while the smaller caps The Copper Basket 2016, weekly evolution
made gains and played catch-up. Of our 15 5%
names five made gains (RMC.v, NCQ.to,
0%
ATY.v, CDB.v, RVL.v), two were unchanged
-5%
(CUU.v, WRN.to) and eight were losers
(HBM.to, IVN.to, CS.to, NGQ.to, CUM.to, -10%
NCU.to, HCH.ax, ARG.to). The best winner -15%
was Atico Mining (ATY.v up 20.4%), while
-20%
biggest losers were Nevada Copper (NCU.to
-25% source: IKN calcs
down 28.5%), HudBay (HBM.to down 10.8%)
jan3rd 10th 17th 24th 31st feb7th 14th
and Amerigo (ARG.to down 10.0%).
13

With China closed for business (Fire Monkey!) there
was little news on supply/demand matters in base
metals, so the main influence on the equities was the
copper metal market price and as the five day chart
here shows, the reason the bigger names jagged
down again (HBM etc) is that copper came off its
mini-rally to the $2.10/lb $2.15/lb range and is back
bouncing just above U$2.00/lb. Another attempt
from the copper bulls to push on the string, the only
way I see copper avoiding a more prolonged period
under the $2/lb level (once China goes back to work)
is if the US Dollar caves in on us all, thereby pushing
up the prices of all things marked in that currency.
Moving on, here’s the weekly update of copper
inventory positions that consolidate the SHFE as top
dog:
• Total world copper stocks in the three official warehouse systems dropped by a modest
6,945 metric tonnes (mt) (-1.3%) to stand this weekend at 522,606mt.
• Shanghai stocks remained unchanged during the main New Year holiday week, s you’d
expect. People start going back to work next week, but the real direction of this market
is unlikely to be revealed for another two the three weeks.
• The main move this week was at the LME, which still wasn’t that big. Stocks dropped
here 8,425mt (-3.7%) to finish the week as 220,225mt. Which means for the second
week running (and first time ever) there’s more copper being stored in SHFE
warehouses than there is the LME warehouses. Interesting times.
• Comex copper warehouses added 1,480mt (+2.5%) to move back up above the 60k
level and reach 61,099mt by Friday’s close.
Here's the Shanghai-only chart, which shows the unchanged level on the week. China closed for
Fire Monkey (!!) festivities, zero surprises.
Shanghai Futures Exchange Warehouse Stocks, 2014-2016
260000
240000
220000
200000
180000
160000
140000
120000
100000
80000
60000
14
31'13ceD ht91 ht9 dn2ram dr32 ht31 ht4yam ht52 ht51 ht6yluj ht72 ht71 ht7 ht82 ht91 ht9 ht03 ts12 ht11 ts1bef dn22 ht51 ht5rpa ht62 ht71 ht7nuj ht82 ht91 ht9 ht03 ht02 ht11 ts1von dn22 ht31 dr3naj ht42 ht41
Mt Cu
source: Cochilco
Now for comments on a couple of our basket stocks:
Atico Mining (ATY.v): We once again see how ATY is badly understood by the reactionary
end of the junior mining investment world. I’ll concede that it might have been in severe-
oversold territory when it went under 20c (not so very long ago either), but the move last week
was the clear outlier in the small copper producer world. And why? Because there are still

enough people who think this is a small gold story with a copper kicker, not the other way
around. For sure the company isn’t going to batter down doors to tell people otherwise, it’s
happy enough getting the 20% pop like so many other real gold plays while its cupric kin fail to
move. But it doesn’t hide the fact that 2/3rds of this company’s revenues come from copper
production and sales, one third from gold (and a tiny amount of silver).
Whether or not ATY will adjust down from this outsized move is debatable, as it did look
oversold and there’s probably enough fundies around this stock to justify its current market
cap. It’s not particularly shortable either (unless you have access to a pro desk).
Nevada Copper (NCU.to): Well I laughed, anyway. After faking a run-up in the stock the
week before last, Mr Pretty Face’s true intentions were revealed last week when on Wednesday
NCU announced a “keep the lights on” round
of financing (3) that plans to raise a minimum
of U$15m (CAD$22.7m) on a best efforts
basis, with the market price of the stock to
determine the issue price. That’s why its share
price did what it did last week (here right five
days vs the copper producer ETF COPX).
It’s notable that even Red Kite feels it needs
to prop up the company on this round (it’s
steered well clear of adding equities, much
preferring to be on the financial loan end of
the deal that provides solid guarantees of a
return), because you get the strong suspicion
that if this current round of financing falls flat this company sleeps with the fishes.
Almost as fun was the announcement later in the week (4) that NCU was joining forces with a
solar power company to investigate the potential of some of the land around the Pumpkin
Hollow project for solar power generation, that would apparently power the eventual mine and
also provide for the national (or local) grid.
Cordoba Minerals (CDB.v): Up a penny on the week, last week we got another
announcement from CDB that Robert Friedland had added more to his pile of shares. On
Wednesday Ivanhoe Industries announced (5) the purchase of another 2m shares, which brings
his total up to 25.07m share,s or 31.6% of shares out. On the fully Diluted count (throw in the
options, warrants and restricted stock) and he’s now at 34.37m shares, or 38.6% of the total.
With Friedland having a Standstill Agreement with CDB that he takes no more than 46%
ownership, he’s now floating up towards that limit quite rapidly.
As for me, I’ve already made it clear that I think this has a chance as a decent spec play for
2016. I like its sponsor, I like the concession and its rock targets, I like the chances it has of
returning splashy/flashy drill assay numbers from its current program (that started in late 2015,
so I think they’re going to roll out results for PDAC). However there are still things that concern
me:
• Colombia risk in general: The páramo ruling last week (see ‘Regional Politics’ below)
doesn’t really affect CDB, but it does show the sketchy nature of the country as a
mining jurisdiction once again and the type of legal background that inspires zero
confidence in FDI.
• Location risk: CDB is located in what was, or still is perhaps, a hot zone in the
complicated violence (shall we dare call it civil war?) and the patchwork of instability
shared between government forces, the FARC-EP lefties, the ELN lefties and the
Paramilitary Far Righties, into which you can throw in the cocaine industry and the
struggle for control of illegal gold mining operations.
15

• Financials: CDB needs to find around $1.5m to keep working through 2016. It’s looking
to receive cash if/when Friedland exercises his warrants in the next couple of months,
but it does look as though CDB will need to run a placement that brings in others, not
just relies on Friedland’s largesse. Though to be clear, of the three issues I have with
this stock, this is the one that worries me the least. Being exposed to the vagaries of
Colombia (national, political and local) is what chafes the most.
Finally of course, we can pick the right spec vehicle with the right backing and get great drill
numbers until the cows come home, but the ultimate success or failure of CDB is in the hands
of the copper metal market. Others with a longer view (Friedland) can afford to take large
chunks and let it lie fallow, or have more interest in gaining a large percentage of the company
than paying $5m or $10m more or less to do so. I’m still in the copper bearish camp here, so
until I see a real change in the copper price market I’m going to stay on the outside looking in.
However be clear, CDB is definitely on my shortlist of high risk/high reward potential plays.
The Low Cost Producer Basket
After 6 weeks of 2016, the Low Cost Producer Basket shows a gain of 47.89% to level stakes.
company ticker price 1/1/16 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Barrick ABX 7.38 1164.67 14.27 12.25 66.0%
2 Newmont NEM 17.98 529.12 13.64 25.78 43.4%
3 Goldcorp GG 11.56 830.22 12.99 15.65 35.4%
4 Franco Nevada FNV 45.75 176.298 9.59 54.40 18.9%
5 Agnico Eagle AEM 26.28 217.67 7.76 35.64 35.6%
6 Ang/Ashanti AU 7.10 405.27 4.74 11.70 64.8%
7 Detour Gold DGC.to 14.41 170.85 3.64 21.31 47.9%
8 Sibanye Gold SBGL 6.09 228.71 2.95 12.88 111.5%
9 New Gold NGD 2.32 509.16 1.50 2.95 27.2%
10 Buenaventura BVN 4.28 254.19 1.40 5.49 28.3%
Prices in U$/NYSE tickers, except DGC.to (CAD$) Portfolio avg 47.89%
All the winning, all the time. Big cap miners continue to make hay with all our ten
representatives up again on the week and plenty of big winners to report once more. The best
move was (quite tellingly) Goldcorp (GG up 13.8%) as it finally starts to play catch-up to its Tier
One peers. Then came the unstoppable Sibanye (SBGL up 13.2%) which converts it into our
first triple digit percentage winner of the
year (I get the feeling there may be The Low Cost Producer Basket: Weekly performance
more later), which is mightily impressive 50% and comparative to GDX control
considering we’re only six weeks into
40%
2016. The other double digit percentage
move was from the laggard 30%
Buenaventura (BVN up 13.0%), finally
20%
waking up (but still cheap on many
10%
metrics). And my stars look at Franco
Nevada, now a near ten billion dollar 0%
market capper thanks to the combo of its
-10%
move and its news last week (see below
for a little more on that).
For the first time this year, the GDX benchmark managed to cut the distance between itself and
our basket average last week.
16
dr3naj ht01 ht71 ht42 ts13 ht7bef ht41
basket
gdx control
source: Google Finance, IKN calcs

Low Cost Basket: Percentage difference between
basket and GDX control, 2014
2%
0%
-2%
-4%
-6%
-8%
-10%
-12%
-14%
-16%
17
dr3naj ht01 ht71 ht42 ts13 ht7bef ht41
source: ikn calcs, NYSE/Nasdaq data
Smells like rotation into second tier names to me.
Franco Nevada (FNV): In a flash, FNV raised gross proceeds of U$920m last week by
announcing a bought deal at U$47.85 per share and then increasing its size the next day (6). If
we assume (and face it, it’s a shoo-in) the full over-allotment is taken up, then 19.228m new
shares have just been printed in FNV.
Although the bought deal hasn’t closed yet, I’ve already added those shares to the count in FNV
(e.g. in the above table), which makes it a U$9.59Bn market cap entity these days, what with
the big price surge it enjoyed to boot last week.
And we already know what it’s going to do with a large piece of that cash, as on Wednesday
and at the same time as the announcement of the first offering, FNV announced (7) that it was
paying U$500m for a significant precious metals stream from the Glencore Antapaccay mine in
Peru. As noted on the blog that day, this is a big player’s deal and the amount of cash it’s
managed to harvest sets the company up for its next deal, too.
Regional politics
Colombia: The Páramo ruling
Since the Colombia Constitutional Court ruling that hit the wires last Tuesday, much virtual and
real ink has been spilled on the subject in the Colombian press (here (8) (9) are just two
examples) as well as the reports picked up by mining trade publications in English language
(here are my two pieces on the fallout (10) (11) which also reference Paul Harris of The
Colombia Gold Letter as he was the guy who first alerted me to the ruling that morning.
Below in ‘Market Watching’ there’s another piece on my fave Colombia bugbear whipping boy
stock, Continental Gold (CNL.to) (it deserves every lash it gets) and the problems it specifically
faces due to the Colombia Supreme Court decision. Here I want to take a more general view of
things and consider exactly what the “Páramo Ruling” means to Colombia’s mining industry. We
lay out the substance of the court ruling in bullet points, then comes commentary and a bit of
opinion.
• Last August members of Colombia’s national congress under the “Democratic Pole”
(Polo Democrático) alliance filed petition against seven parts, or decrees, in the Santos
government’s 2014-1018 “National Development Plan” (Plan Nacional de Desarrollo),
known as the PND. Their beef was that the PND allowed mining activity to take place
on the country’s 29 páramos, the high areas that are natural water reservoirs and
sources for much of Colombia’s drinking water. They argued that mining activity could
cause irreversible damage to these delicate ecosystems and was unconstitutional. The
petition therefore went to the Constitutional Court, the highest in the land.
• Last week the Constitutional Court presented their rulings and/or findings on the seven

disputed decrees. Here come the main points of the rulings.
• The court ruled that all types of mining or hydrocarbon extraction activity in the
páramos is unconstitutional and is now prohibited.
• The court ruled that, contrary to the government’s PND, those mining licences obtained
before February 9th 2010 (and hydrocarbons licences before 16 June 2011) were no
longer valid. The court ruled that all mining activity going on in páramo regions must be
shut down immediately.
• The court ruled that the delimitation of the páramo regions was in the hands of the
Ministry of the Environment and Development, using maps produced by the Van
Humboldt Institute on a scale of either 1:100,000 or 1:25,000, as available.
• The government “PINES” projects initiative (projects of national strategic interest) was
ruled constitutional as stands. The PINES projects include five mining development
projects e.g. La Colosa, Gramalote, Buriticá. However, the court in further rulings also
stripped the PINES initiative of some of its key powers and these next ones may affect
FDI in Colombia directly
• The court ruled that victims of violence and forced displacements due t o the ongoing
civil war (FARC etc) had first right to claim on any land they left behind and then came
back to. Previously, the government PINES project gave the government first refusal.
• The court ruled that projects under the PINES initiative no longer had the power of
judicial expropriation of lands. That means the PINES projects can no longer turf people
off their lands automatically and pay compensation, the landowners must agree to
move.
• The big one for Continental Gold (CNL.to): The court ruled that PINES projects could no
longer get all their environmental permits and licences directly from the national
environmental body ANLA. Instead, they must (also) get permits from the autonomous
regional corporations (CAR) such as Coriantioquia in the Antioquia region, home to
Buriticá.
Now for commentary. There are headaches all round thanks to this ruling; locally, nationally
and internationally (which is our main focus, of course). To begin, the Santos government
(which has already said it will respectfully abide by the rulings as soon as they are officially
published, a protocolar matter) now has the job of marking the boundaries of all the páramo
regions in Colombia. So far it’s managed to do just one, the (in)famous Páramo de Santander
(home to Angostura, Ventana etc) which it managed to do in four years. There are 29 páramos
in Colombia, which means it now has another 28 to demarcate! Secondly, this makes an unholy
mess of the Santos government’s development plans for mining. It reflects very badly on the
“seriousness” of Colombia as a mining jurisdiction, as once again those outside looking in see
the goalposts move. Thirdly, although the PINES projects are still green lighted, the ruling has
taken away key parts of their so-called “fast track” powers. As a result, projects such as
Buriticá, Gramalote and La Colosa once again find themselves facing the red tape of local
environmental bodies and their own political agendas.
Chile: The mining layoffs continue
While you were whooping and giving gold your best “To Da Moon Alice!” shout last week, the
layoffs in the copper industry in Chile continued unabated. The latest big announcement was
the “optimization plan” unveiled by Anglo American at its big El Soldado mine in Central Chile
(Valparaiso region) which included the pinkslipping of 150 workers, around 10% of the total
workforce there (12).
18

Nicaragua: Concession areas reduce
Last week Nicaragua’s Ministry of Energy and mining announced (13) that 13,690km2 of the
country’s territory, around 10.5% of the country’s 130,373km2, was currently under metallic
and non-metallic minerals concessions. This represents a drop of 4,814km2 from the
18,504km2 under concession this time last year.
Although this “total area under concession” is one of the most misunderstood sets of mining
data for people not versed in the industry (it conjures up images of 10% of the world being dug
up, towns and villages moved on a regular basis etc and is of course an image the anti-mining
brigade love to play on) the change in concession areas is still a useful way in measuring the
sentiment in the industry. It’s a normal thing to let concession areas drop as you home in on
the real targets you’ve found, it’s also a normal thing to see them picked up by others. The
26% year-over-year drop in Nicaragua is symptomatic of the downturn that’s being felt even in
this pro-mining jurisdiction.
Argentina: The vulture fund deal delayed
With the Argentina deal offer on the table for the bond holdouts/vulture funds as from the week
before last, the sudden deathly silence on the matter was slightly strange. We found out why
on Friday when the government, as diplomatically as possible, said that the two biggest holders
of the defaulted bonds were still “in negotiation”, which is a cute way of saying that they’re not
happy with the 75% face value offer they’ve been handed (which would mean an average profit
on less than a billion dollars of investment of around 1,000%) and they still want more.
Argentina: Export taxes on mining eliminated
It’s been expected for a while so when President Macri made the announcement on Friday that
as of that day (14) Argentina would not impose its 5% export duty on metals mining products
leaving the country, it came as no surprise to the market. It did make more waves inside the
country however, with the usual anti-mining suspects telling us all how terrible it was, and
cyanide and things. Meanwhile the Argentina Chamber of Mining noted that last year the
country exported a little over U$4Bn of metals produce, mainly copper concentrate plus gold
and silver (in conc, doré bars and bullion bars) and the duties paid on that came to U$220m in
2015. That’s the sort of cash that won’t make it to the country’s treasury as from this weekend,
thanks to the business friendly Macri government call.
Ir’s worth noting that President Macri made a big media show of this announcement too.
Instead of doing in from the comfort of his own office, he flew out to San Juan province and
announced the elimination of duties in the presence of Sergio Uñac, the new governor of San
Juan, as well as the new governor of Catamarca, Lucia Corpacci (both Peronists and in theory
at least, opposition to Macri’s party and government), who helicoptered in from her
neighbouring province to be in the photos (15). As both of those provinces are strong mining
regions, it was a real show of national unity that had the local mining community purring with
approval.
Argentina: Chubut’s legal problem with mining
I fielded a question from A. Subscriber last week regarding the state of play in Pan American
Silver’s (PAA.to) (PAAS) ‘Navidad’ project in Chubut province, Argentina. According to people
connected to my subscriber, the permits PAAS needs to move forward are now a shoo-in and
he sees upside potential in the stock as a result. Aside from mentioning the problem with
Navidad’s economics lies with its base metals (zinc and lead) rather than with silver, the main
point I made in my answer was this:
“The problem with the permits is that they may be granted, but Chubut constitution as
stands says you can't have one rule for one part of the region (i.e. la meseta where
Navidad is located) and another for another (eg Esquel/Suyai). The new government
wants to separate the areas and say "ok no mining there, but yes mining there" which
is logical enough but the anti-mining people will be able to fight that ruling in the courts
for YEARS (in caps for a good reason).”
19

And just a couple of days later, a fine illustration of that came in the shape of this report in the
regional newspaper El Patagonico (16). In it we hear from two Chubut province parliament
members whose names don’t matter to us but I’ll mention them anyway. Sergio Ongarato is
parliament member for the town of Esquel in West Chubut, in the foothills of the Andes
Cordillera. This town is also the location of Yamana Gold’s Suyai project, which was voted down
by a binding local referendum many years ago (when it was called “Esquel” and owned by
Meridian) and is still very strongly opposed by the local population. Ongarato said last week
that “mining is not feasible” in Esquel.
Meanwhile, one Mariano García Aranibar is parliament member for the Gaiman region, in central
Chubut (the so-called ‘meseta’) and in the area of influence of the PAAS Navidad project. He
said that mining in “a necessity” in his locality because in the central zone the population,
“...perhaps has no other production sector that, in the near-term, can generate (economic)
impact and so of course mining could be a good solution”.
In other words, one part of Chubut province welcomes mining another is dead set against it.
However this is where the provincial constitution comes into play, because according to that
you cannot have one rule for one part of the province and a different one for another part. This
doesn’t just apply to mining, but it still includes the activity. As the town of Esquel set a clear
precedent many years ago in a binding referendum that rejects all types of mining activity. In
order or PAAS, or any other mining project in the region, to get its permits we’d either have to
1) change the constitution or 2) get Esquel to change its mind or 3) grant the permits to the
Navidad project and hope the anti-mining people don’t try to block the project in the
courtrooms by using the Constitutional argument. Of those three, number 1) is the most likely
to happen and that could take yeas in itself.
And this is the rub with working Argentina: You can have the happiest smiliest, miner-friendly,
FDI-friendly business friendly national government and President you can imagine, but when
push comes to shove it’s all about the regional/provincial rules and regulations. There are
enough people against mining to try and stop it from prospering in Chubut and they know the
drill, too.
Peru: A wild election campaign begins in earnest
We’ve only had serious campaigning for a little over a month, but already the Peru presidential
election is madder than a sack of monkeys. Here’s the latest need-to-know, along with a few
things you don’t need to know but are too much fun not to pass on.
In IKN349 dated January 17th we made a first mention of Julio Guzmán, who at that point had
come up from the ranks of the also-rans and was suddenly polling 5% and in 5th place. At that
time we made passing mention and finished with “In short, one eye is now kept on Guzmán
who’s a potential wild card in the 2016 scene”. Then on the blog on February 2nd in the post
“Time to take Julio Guzmán seriously” (17) I noted that he’d risen further in the voter intention
polls and was at that time,
according to pollster GfK, in
Peru Presidential Election: The CPI and Datum polls
50%
second place by the skin of his
(polls taken first week of February 2016)
45%
teeth with 10.4% of voter
40%
intention. 34.1% Datum
35% 31%
30% CPI
The news since then, nearly two 25%
weeks later in this short campaign 20% 16%
(remember the first round vote 15% 14.1% 12.6% 11%
happens on April 10th) is that 10% 7% 7.7% 6.2%
4%
5%
Guzmán has continued rising and
0%
is now in clear second place
Keiko Guzmán Acuña PPK Alan
according to two separate polls
source: El Comercio, CPI, Datum
this week. Here right is a visual of
the data (18), notes below.
20

• I’m only bothering with the top five, there are 14 other candidates running for
President and there’s virtually zero chance of any of them making a significant move
any longer. That verdict includes ex-President Alejandro Toledo who is in the middle of
“an accidented campaign” (as they say in Spanish, deliberately translated literally). See
the anecdote below for more.
• Keiko Fujimori continues way out in front and with a very solid “early 30s” intention,
the same as it’s been all the way through the process. She won’t make 50% + 1 vote
and win in round one, she’s a lock for one of the two places in the run-off.
• Julio Guzmán has changed everything. Now in a clear second spot and rising, his face is
now well known in the Lima conurbation. His issue now is getting the message out in
the provinces. He’s rocked the political establishment and brought a viable alternative
to Peruvians who are sick and tired of the same old faces and same corrupt political
scene. And that’s why he may be disqualified form running (seriously see below).
• Third/fourth place is either for Pedro Pablo Kuczynski (PPK) or César Acuña, depending
on which pollster you believe. Both have lost substantial voter intention points to
Guzmán in the last month
• Last of the main five now is Alan García, who has surprisingly (for me at least) not
managed to get much traction as yet. Perhaps the APRA party isn’t in full swing yet, but
it looks as though he’s also a victim of the self-appointed “dinosaur slayer” Guzmán.
Alan anecdote below, too.
Summing up so far, Keiko has maintained her clear lead and looks on with serenity as the
others fight for second spot. The big surprise in Julio Guzmán who has had massive success in
a short period by tapping into the disaffection of many Peruvians with their traditional political
class. A classic outsider, he’s shaken the campaigns of people like PPK and Acuña to the core
(with PPK sacking his campaign manager and bringing in a new team just two days ago). As
things stand today Keiko Fujimori and Julio Guzmán will battle out a second round run-off and if
early head-to-head polls are to be believed, Keiko would beat Guzmán by 46.1% to 33.3%
according to one poll but a much tighter 42% to 41% in another.
And now for the barrel of monkeys gossip and fun.
We start with the biggest potential newsflow: That Julio Guzmán may be barred from running.
The Jurado Nacional de Elecciones (JNE) is the body which oversees elections in Peru and they
now have a case against Guzmán over supposed irregularities in the way his party was set up
and registered its candidate for the Presidential election. From what we’ve heard in the media
there does seem to be something amiss with the way in which his party was registered for the
election, but it’s tough to tell without the full details and the only people with those are the JNE.
It might be a technicality, it might be a serious mistake by Guzmán and his team, but we’re
now expecting a judgment (19) from the JNE in the next few days and there’s a decent chance
he’ll be barred from running. If so, there will be a major scandal and the shouts of a corrupt
political system will reach fever pitch.
Next, César Acuña may also be barred by the JNE from running. His case however is regarding
ethics, as it’s been uncovered by “investigative journalism” (read “Alan Garcia’s intel mob
finding dirt and passing it on to hacks) that Acuña not only plagiarized his doctor’s degree
thesis, but there’s evidence of plagiarism in his original degree thesis and what’s more, he co-
opted a whole book written by his erstwhile professor in the late 1990s, changed his professor’s
name for his and published it as his own work (20). With all this, Acuña’s reputation as a
successful academic and businessperson been trashed by these revelations and he’s now a
laughing stock in the chattering class circles. But perhaps more seriously he now has a date in
front of the Ethics Committee of the JNE on Wednesday, which is a body that has the power to
bar him from running any further if it sees fit.
21

A quick mention now for Gregorio Santos, the governor of Cajamarca who was the main
opponent of the Conga gold/copper project (remember all that?) and was later thrown into
remand prison for a couple of corruption cases. Well folks, believe it or not he’s still in prison on
remand after nearly two years in jail but he’s also one of the 19 candidates up for election as
President (as he’s eligible until found guilty). He’s therefore finding it tough to hit the campaign
trail, what with being locked away and all that, but he did manage to join in the first televised
presidential debate via a telephone link (21) in which he had his chance to tell people his side
of maters. All quite bizarre.
But we leave the best until last, the clownshow that is ex-President Alejandro Toledo. On Friday
morning Feb 12th Toledo was in the Arequipa region, having spent the night in a local town and
on his way to the main city of Arequipa for campaign stops. At around 9:30am he was
interviewed b y telephone on Peru’s main news station, RPP, and by arguably Peru’s best radio
journalist Raul Vargas. After about a minute and a half Vargas cut the call short, claiming
“communication problems but that’s only because Señor Vargas is a true gentleman. The fact is
that Alejandro Toledo was clearly drunk, and very drunk, on the other end of the line that
morning. A recording of the conversation quickly went viral on social media and went a long
way to confirming the long-standing rumours that have surrounded Toledo for many years, that
he has a serious drink problem. That got even worse when he arrived in the city of Arequipa,
an hour or so after the drunken phone conversation that had gone out live on the national news
show. Toledo was “welcomed” by a throng of journalists all asking him what went wrong with
the phone call and though Toledo’s team tried to keep him from talking and told everyone he
wasn’t accepting questions, he eventually answered that “he had something wrong with his
throat” (22) in a drunken and slurred manner once again. He was still obviously drunk and
needed help in walking straight from his people.
Toledo’s campaign had already been going badly, it went into full trainwreck mode this
weekend, the political equivalent of a Spinal Tap tour. More than anything, he elicits pity from
people these days and he clearly needs medical or psychological help for his alcoholism.
So apart from that it’s been a pretty quiet campaign so far ☺.
Market Watching
The Zombies Awaken (aka ‘Do Not Feed The Animals’ part 904)
We’ve all thoroughly enjoyed the gold pop and the rise in share prices so far (that’s me simply
assuming that all readers of The IKN Weekly are net long PMs/PM miners) but let’s be clear that
when cash moves into junior mining, the price inflation of shares outstanding is but a first
stage. You don’t need a rocket scientist to tell you that the cash-starved explorecos won’t just
look on in envy at the influx of cash; No way folks, they want their piece of the action, too.
With PDAC just round the corner the petitions and corporate moves to feather the nests of the
unfeatherable will come in droves, that’s not even a forecast because it’s like forecasting that
the sun will rise over the horizon tomorrow morning. The process has started already, here are
just a few picked from the bunch with a line of intro from yours truly:
1) As it happens I think ANG.v isn’t quite as bad as the rest of the Zombies, its people know
Colombia and they don’t seem to have “going to rip you off” stencilled on their foreheads. Still,
they sure were quick off the mark;
February 12, 2016
Symbol: TSX – V: ANG
Angel Gold Announces Private Placement Financing
Vancouver, British Columbia – Angel Gold Corp. (the “Company”) (TSX-V:ANG) is pleased to
announce a non-brokered private placement raising gross proceeds of up to $600,000 through
the issuance of up to 12,000,000 units at a price of $0.05 per unit. Each unit will be comprised of
one common share of the Company and one-half common share purchase warrant. Each whole
common share purchase warrant will allow the holder to acquire an additional common share of
the Company at a price of $0.10 per share for a period of two years from the date of closing of the
22

non brokered private placement.
2) On the other hand, there are some companies I know all too well and wouldn’t touch with
my worst enemy’s barge pole, let alone mine.
February 11th
Lupaka Gold Corp. intends to complete a non-brokered private placement to raise gross proceeds
of up to $300,000.
The company plans to issue up to six million units priced at five cents per unit. Each unit consists
of one common share and one transferable common share purchase warrant. Each warrant
entitles the holder to purchase one additional common share, exercisable at 10 cents for a period
of 36 months from closing.
3) And some lucky ones (lucky for the insiders, not for the shareholders) have already closed on
previously unannounced financings, the classic “oh by the way...” dilution in order to get the
next few months’ worth of director paychecks covered (that’s what they mean by “general
corporate purposes” or “general working capital requirements”):
February 12, 2016
Toronto, Ontario
WEST RED LAKE GOLD MINES CLOSES $180,000 FINANCING
West Red Lake Gold Mines Inc. (“West Red Lake Gold” or the “Company”) (CSE: RLG) (FWB:
HYK) (OTC: HYLKF) announces that it has completed a non brokered private placement of
common share units for aggregated gross proceeds of $180,000.
The Company issued 3,600,000 common share units (the “Common Share Units”) at a price of
$0.05 per Common Share Unit for aggregated gross proceeds of $180,000. Each Common Share
Unit consists of one common share in the capital of the Company and one half of a common
share purchase warrant (the “Warrant”). Each full Warrant issued in connection with the financing
entitles its holder to purchase one common share in the capital of the Company at an exercise
price of $0.10 per share for a period of 24 months from the date of issuance.
Proceeds from the Common Share Units will be used for exploration expenditures on the
Company’s gold project located in Red Lake, Ontario, and for general corporate purposes.
4) Then there are other urgent corporate matters for the Zombie rip-off juniors, such as this
one, which once upon a time had a sweetheart pump deal with Louis James of Casey Research:
February 12, 2016 - Gold Bullion Development Corp. (TSXV:GBB) (OTCPINK:GBBFF) (the
“Company” or “Gold Bullion”) announces that it has granted stock options to its directors, officers,
employees and consultants to purchase an aggregate of 4,900,000 common shares in the capital
of the Company. The stock options are exercisable for a term of five years at an exercise price of
$0.05 per share. All stock options are granted in accordance with the terms of the Company’s
Stock Option Plan and the policies of the TSX Venture Exchange and will be subject to a hold
period of four months and one day
5) But this is my favourite so far, read and believe (or weep). However I fear there’s still a long
way to go before the 2016 Zombie NR of the Year Award is handed out.
February 11, 2016
Friends of Tri Origin,
Tri Origin recently announced a private placement of units consisting of common shares and
warrants to raise proceeds of up to $500,000. The placement is structured so that all existing
shareholders can participate as well as accredited investors. This correspondence is to inform
you of the placement and to encourage you to consider it as an investment opportunity.
Capital raisings in the mineral exploration industry have been scarce over the past couple of
years and mineral exploration activities have slowed dramatically as a result of weak resource
markets on a global scale. Recently, gold price has stabilized and has begun to increase. There
are many who predict that this trend will continue. Tri Origin is of this belief. The lack of capital for
most entrepreneurial, junior exploration companies to conduct sustainable, ongoing exploration
has resulted in very few exciting new exploration projects that are available to fill the pipeline that
will supply future development and production. Tri Origin has been able to differentiate itself from
the industry norm.
What we’re going to see, as day follows night, is a whole range of mining companies from the
largest to the smallest use the renewed interest in the sector to attract direct investment into
their companies. We’ve already seen a very big deal go through, that of Franco Nevada that’s
raising a cool U$920m gross proceeds (see above) and using part of that OPM to buy a decent
looking stream from Glencore. We will see more placements of all sizes, large medium and
small, but the ones that we the speculator of juniors have to watch out for are at the tinycap
23

end of the spectrum. These are the placement announcements that kill rallies stone dead, so if
you know a small/tiny/nanocap you follow is desperate for cash, it’s the one you should avoid.
Or in my case look to sell, as the run-up in Atacam Pacific (ATM.v) has given me a good
percentage win and I know these guys need funding.
And so far, in that last paragraph, we’re still talking about the valid juniors with something
reasonable to offer the investment world. Quite another thing are the operations we’ve
highlighted in some of those extracts above, the disaster moneyholes like Lupaka or Gold
Bullion Development Corp who will take your money and spend it on their own salaries without
a second’s hesitation. These are the Zombies, these are the animals of the sector and they’re as
keen to get a new influx of treasury as the valid entities. But be clear, no matter whether gold
has rallied U$200/oz from its lows, these companies are destined for absolute failure and total
wealth destruction. The call, once again, is Do Not Feed The Animals.
A rant on and from the First Mining Finance (FF.v) Clifton Star (CFO.v) deal
On the blog on Monday I published (23) a quick line on sourced intel about Keith Neumeyer;
He's looking to run a equity placement in First Mining (FF.v) to raise cash. In the very
near future. So now you know.
In the end I was only half-right, or maybe three-quarters right, because come Friday the
imminent deal became fact and First Mining Finance (FF.v) announced its latest deal (24) to
buy Clifton Star (CFO.v) for 48.2m in shares. And yes, of course I had a personal comment on
the deal on the blog that day, too (25). Let’s be clear as we possibly can, CFO’s assets
development are plain awful. For sure it can talk up its projects and point to the fact it has over
900k ounces of gold (all categories, including inferred) under 43-101 compliance. But these are
the type of BS moose pasture calculations that got the industry, especially the Canadian
industry into trouble. I have no adjective strong enough, plus we know that nearby Osisko has
already picked over their projects carefully and handed them back, but the definitive word on
the “quality” of CFO and its exploration stage projects came from an e-mail pal (who will remain
nameless and, on hearing of the deal, remarked, “Clifton Star, you’ve got to be joking! It’s an
arsenic mine with a refractory gold by-product.”. When that popped into my inbox I was in a
taxi. I had to explain to the taxi driver why I had burst out laughing so hard.
The “assets” are not that, they’re liabilities. They’ll never be taken seriously by any mining
company worth its salt, the ounces will never be mined (unless, as my friend noted, somebody
finds an amazing new use for arsenic and the market price for that element skyrockets), they
will cost the holder of those concessions far more than they’ll ever make.
Which brings us to the real reason FF.v bought out CFO.v, as a different mailpal “KC” noted:
This acquisition is for the Agnico and Yamana shares that CFO obtained after suing Osisko in the
twilight hours of the Acquisition of Canadian Malartic Saga. Long story short, Osisko had
promised a loan to CFO.V under certain conditions. Osisko respectfully disagreed as they were
being acquired and didn't care. Yamana, afraid of damaging their new asset with lawsuits, wanted
Canadian Malartic cleaned up and convinced its dance partner to issue some shares to settle
everything up.
$11M (was over $14M only 12 months ago!) in very liquid shares is like cash in these markets.
Easy as pie.
So yes easy as pie KC, but at what cost? Paying 48.2m in shares for fixed assets worth zero zip
squat nada, but a company with C$11m in cash, means FF.v is getting a tad under 23c in cash
for each of those shares it’s emitting. When your share price is 41c and 44c and you’re willing
to do such a deal, you’re sending a clear message to people who know that CFO’s projects are
worthless (i.e. the serious end of the investment community, not the people FF.v is trying to
rope in). That’s seriously dilutive and surely it would have been better to go the route I’d heard
about on Monday and simply run a equity placement to raise cash at, let’s say, 35c or 40c?
Which brings us to the way in which FF.v has been operating this last year, aggressively buying
24

up fixed assets of very dubious quality (aside from the Coastal Gold acquisition, which it
snatched from under the nose of Stan Bharti and comes with a deposit that has a shot at
becoming a real mine). To give an idea of the changes in less than one calendar year, consider
these datapoints:
• On April 2nd 2015, when FF.v started trading as a public company, it had 73.767m
shares out and a closing day market cap of C$36.14m.
• Today, less than a year later, FF.v has lost 19.4% in share price, but these days (if we
go pro-forma on this CFO.v acquisition) has 356.1m shares out and a market cap of
C$140.64m.
• And as this chart shows unless you were willing to trade in and out of the stock (notice
the spikes, caused by paid promotional pumping via the contract FF.v has with stock
promoter Daniel Ameduri at “Future Money Trends”), a started holder of FF.v is now
19.4% in the red on his position, despite having watched his charge almost quadruple
its market cap.
FF.v markets itself as a “Mineral Bank”, which is another cute name for the ‘optionality’ Rick
Rule talks about. In other words, the Greater Fool theory. You buy something that’s worthless
for peanuts, you wait until the market moves up
and people start thinking its
ounces/pounds/tonnages in the ground might
actually be worth something after all, it gets
assigned a higher value in dollar terms, you sell
it. Notably, all through the process the thing
being bought and sold remains resolutely
worthless, it’s just the attitudes of human beings
circling round it that change.
Or are supposed to change, because I have
serious doubts that optionality of the type being
marketed to us by FF.v, a Mineral Bank full of
subprime, is going to work this time around. It
looks to me as though it’s an old man’s strategy, looks tired and won’t be able to contend with
the growing sophistication of the investment community. I would agree there’s plenty of space
to pick up decent quality assets at cheap prices and hey, that’s exactly what I’m trying to do as
I sniff around Almaden’s Ixtaca property for my idea of a great entry price. But the FF.v type of
optionality, the Greater Fool variety, is an error and it’s already showing up as the market
bifurcates. We’re already seeing the good stuff rising and the bad stuff failing to catch a bid,
being completely left behind. When the market turned, was it better to be holding a company
with a portfolio of marginal properties, or better to be holding a company with world class
assets that produces gold at an operating profit? Here’s a hint to help answer that question:
25

Wasn’t that the idea behind FF.v, that you the shareholder would benefit from the renewed
interest in metals mining assets? Instead, your share price fails to budge and you get further
diluted by “value” deals.
We live in an age in which information is far more freely available, which means known moose
pasture properties with no chance at all of ever becoming mines will be known as such by more
and more people. Not only that, but the peddlers of this tripe have already picked up
reputations for being scammy operators and these days, just mentioning Name X as being
associated with a company, a trade or a promotion is enough to scare people away. Add in the
far greater choice of investment vehicles for (just as our small sector example) mining, such as
triple-leveraged gold ETF tickers that give you all the gambler’s trade-rush you can handle (and
if not, play the call and put options on those things instead). I contend that the playing field is
changing rapidly but people stuck in the past with models that used to work (so they think they
still will) such as Neumeyer are making a serious mistake with their money. I just hope you
don’t let them make that mistake with your money as well, let them regress to the mean all by
themselves.
Continental Gold (CNL.to): The cracks appear
We featured the ongoing serious community relations problems of CNL at Buriticá last weekend
in IKN352. This week brought a whole new chapter of pain for the company and news that
even this company with its woeful record of disclosure had to acknowledge in a public manner
(thereby complying with Otto’s First Law of Mining NRs*).
On Wednesday CNL published (26) its comments on the Colombia Supreme Court ruling (see
Regional Politics above) and in the IKN blog’s typical snarky style (used in particular against the
two-faced juniors out there, plenty to choose from) I commented on the news that day (27)
with special emphasis on the key sentence in the NR:
"The court also indicated that ANLA (the National Environmental Agency) will not have
sole exclusivity over permitting and maintaining environmental aspects of PINES
projects."
My stars! That ruling, preliminary as it may be, must have hit CNL people like a bucket of iced
water. A bathtub full. It means that CNL has to go back and get the approval of the regional
environmental body Coriantioquia and cannot rely on the national enviro people to emit valid
environmental permits for its project. As we’ve noted on previous occasions both here in The
IKN Weekly and on the blog, the problem isn’t just that Coriantioquia denied CNL its EIA
permits last year, but CNL then blew them off and didn’t tell anyone that they’d been denied,
preferring to pretend that the regional enviro people were taking too much time and preferring
a “fast track” permit schedule via the national-level PINES initiative. According the the Supreme
Court ruling, the PINES program is still legal and valid but it’s not enough for permitting,
regional bodies must have their say too.
Add this to the growing unrest among Buriticá locals we reported upon last week and it’s fair to
say that CNL at Buriticá is in a lot of
problems. It’s one thing having an orebody
(or better said ‘mineralized resource’), quite
another to have the authority to mine it in
the way you want. CNL has played
roughshod with both local and regional
entities and those basic mistakes will now
come home to roost.
As for trading, the Northern market may still
be ignorant of the rising hatred of Buriticá
locals for CNL, but even they couldn’t ignore
last Wednesday’s news. It’s best framed in
this ten day chart of CNL.to versus the
26

juniors ETF (GDXJ), which shows how the two lines tracked each other fairly tightly until the
news hit, but within three days a 30%+ gap had opened up between them.
However, be clear that the full extent of the news, plus the negative developments for CNL in
its locality, are nowhere near to being fully factored into its share price. It’s now difficult to see
how CNL at Buriticá gets permitting approval
without a radical overhaul of its project and mine
plan, which even in a best case situation will mean
extensive delays to its current timeline and will go
down like a lead balloon with the market. A more
realistic case is that the company is eventually run
out of town and the stock goes to zero. We have a
clear precedent for that too, look no further than
the mess Ari Sussman made in Serra Pelada Brazil.
The 52 week (and multi-year) low for CNL.to is just
over CAD$1.25, as seen on this chart. I expect that
to be challenged again, then broken, in 2016.
*Otto's First Law of Mining News Releases: Considering that anything contained in a mining news
release is presented in the best possible way for the company in question, any piece of
information contained in a NR that comes across in any way negative means the real news and/or
events behind it must be very, very bad indeed.
Kinross (K.to) (KGC) files a shelf prospectus for C$1Bn (with a B)
On Thursday (and published Friday evening) Kinross (KGC) (K.to) filed a short form base shelf
prospectus to raise up to CAD$1Bn (with a B) in any type of financing process over the next 25
months. This is the type of documentation that doesn’t necessarily mean an imminent round of
financing, nor one that is for the ful amount, but paves the way for an equity or debt raise and
makes the paperwork easier and more flexible come the time.
But it will also be taken as a big hint that ‘Special K’ is looking to raise cash. It’s likely to be a
headwind to further share price upside in the next few weeks. Here’s how the filing starts, go
see it all on SEDAR (it’s very long):
Kinross Gold Corporation (“Kinross” or the “Corporation”) may offer and sell from time to time debt
securities (“Debt Securities”), common shares of the Corporation (“Common Shares”), warrants
(“Warrants”) to purchase any of the other securities that are described in this short form base shelf
prospectus (the “Prospectus”), subscription receipts (“Subscription Receipts”), units (“Units”) comprised of
one or more of any of the other securities that are described in this Prospectus, share purchase contracts
obligating holders to purchase a specified number of Common Shares at a future date or dates, or similar
contracts which may be issued on a prepaid basis (in each case, “Share Purchase Contracts”) or any
combination of such securities (all of the foregoing collectively, the “Securities” and individually, a
“Security”) for up to an aggregate offering price of $1,000,000,000 (or its equivalent in Canadian dollars or
any other currencies), in one or more transactions during the 25-month period that this Prospectus,
including any amendments hereto, remains effective.
Primero Mining (PPP) (P.to) Richmont Mines (RIC.to) and Renaud Adams
On October 16th 2014, Renaud Adams left his job as president and COO of Primero Mining
(P.to) (PPP) and joined Richmont Mines (RIC.to) as its new president and CEO. At that time
RIC.to had a RIC.to CAD$2.68 share price and P.to had a CAD$5.36 share price. On the blog
the next day (28), we noted that Renaud Adams was “(l)eaving a $750m company like Primero
(P.to) (PPP)... and joining a $125m company...”. It looked strange at the time and we also
covered the move in IKN284. In that edition I considered the move a hint to look at RIC a little
further, but didn’t make any solid call on the potential for a trade. Cut to today:
• Primero is now a CAD$372m company with a share price of CAD$2.33. It’s down 56.5%
since the day Renaud Adams resigned.
• Richmont is now a CAD$399m company with a share price of CAD$6.60. It’s up 59.4%
27

since the day Renaud Adams joined.
Those numbers speak for themselves and I’m not going to write any special concluding
paragraph to this market snippet, you don’t need to be spoon-fed the obvious. One has to
wonder just how deep the problems are at Primero, however. That Adams made the right
choice in leaving is without question, but the series of problems at the company point to errors
at basic levels of corporate guidance, the type of buck that stops firmly at the desk of the CEO.
Conclusion
IKN353 is done, we end with bullet points:
• I’ve taken money off the table by selling Lake Shore Gold (LSG.to) (LSG) and half of the
New Gold (NGD) (NGD.to) trade so far. That process is set to continue as the other half
of my NGD goes next week, plus possible sales of Atacama Pacific (ATM.v) and even
Dalradian (DNA.to) and Teranga (TGZ.to) if they ding my targets.
• B2Gold, on the other hand, not selling any of those yet. As long as gold doesn’t cave on
us it’s going to U$1.30 in the near term, nail that number to your wall.
• Peru is crazy. Argentina is crazy. Colombia is crazy. I love South America.
• Here’s hoping for more upside in gold next week. I know it’s not a valid investment
strategy, but I’m still going to hope.
• I’m going to be busy tomorrow Monday and Tuesday morning, posting may be light on
the blog on those days.
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://finance.yahoo.com/news/atacama-pacific-unaware-material-change-183933054.html
(2) http://finance.yahoo.com/news/sandspring-resources-announces-share-purchases-185310139.html
(3) http://www.nevadacopper.com/s/NewsReleases.asp?ReportID=739084&_Type=News-Releases&_Title=Nevada-
Copper-Announces-Financing
(4) http://finance.yahoo.com/news/nevada-copper-forms-strategic-alliance-123000619.html
(5) http://www.marketwired.com/press-release/ivanhoe-industries-acquisition-of-common-shares-of-cordoba-minerals-
corp-2095611.htm
(6) http://finance.yahoo.com/news/franco-nevada-announces-increase-previously-151848038.html
(7) http://finance.yahoo.com/news/franco-nevada-acquire-precious-metals-211637349.html
(8) http://incakolanews.blogspot.pe/2016/02/colombia-court-news-bad-for-continental.html
(9) http://incakolanews.blogspot.pe/2016/02/continental-gold-cnlto-market-begins-to.html
(10) http://www.eltiempo.com/estilo-de-vida/ciencia/corte-genera-dudas-en-limites-de-mineria-sobre-paramos-en-
colombia/16505783
(11) http://www.eltiempo.com/politica/justicia/claves-de-la-decision-de-la-corte-constitucional-sobre-los-paramos-
/16505161
(12) http://www.lanacion.cl/noticias/economia/mineria/anglo-american-plan-de-optimizacion-despedira-a-150-
trabajadores-en/2016-02-12/213945.html
(13) http://www.laprensa.com.ni/2016/02/12/economia/1984776-se-reducen-concesiones-mineras-nicaragua
28

(14) http://incakolanews.blogspot.pe/2016/02/argentina-export-duties-on-mining.html
(15) http://www.lanacion.com.ar/1870414-macri-peronismo-pj-san-juan-unac
(16) http://www.elpatagonico.com/la-mineria-no-es-factible-esquel-pero-es-una-necesidad-la-meseta-n1470060
(17) http://incakolanews.blogspot.pe/2016/02/peru-presidential-election-time-to-take.html
(18) http://elcomercio.pe/politica/elecciones/cpi-keiko-primera-341-y-julio-guzman-segundo-141-noticia-
1877997?ref=nota_lima&ft=mod_porsi&e=titulo
(19) http://elcomercio.pe/politica/elecciones/jne-pide-no-especular-sobre-caso-partido-julio-guzman-noticia-
1878572?ref=portada_home
(20) http://elcomercio.pe/politica/elecciones/tribunal-pacto-etico-cita-cesar-acuna-plagios-noticia-
1878414?ref=nota_politica&ft=mod_interesa&e=titulo
(21) http://elcomercio.pe/politica/elecciones/gregorio-santos-expondria-telefono-debate-esta-noche-noticia-
1878460?ref=nota_politica&ft=mod_interesa&e=titulo
(22) http://elcomercio.pe/politica/elecciones/toledo-su-accidentada-entrevista-estoy-garganta-noticia-1878479?flsm=1
(23) http://incakolanews.blogspot.pe/2016/02/the-latest-keith-neumeyer-gossip.html
(24) http://finance.yahoo.com/news/first-mining-acquire-clifton-star-145544939.html
(25) http://incakolanews.blogspot.pe/2016/02/the-first-mining-finance-ffv-business.html
(26) http://finance.yahoo.com/news/continental-gold-comments-colombias-constitutional-153217691.html
(27) http://incakolanews.blogspot.pe/2016/02/continental-gold-cnlto-market-begins-to.html
(28) http://incakolanews.blogspot.pe/2014/10/renaud-adams-primero-richmont.html
Appendix 1: Flash update dated Monday February 8th 2016
Good Monday morning, grey and cloudy outside for this Flash update, the first one I've sent for a long time (there just
hasn't been much the "flash" about these last few months, sadly).
TAHO and LDG merge: The reco is to HOLD LSG (for the time being)
First the facts: This morning pre-open, Tahoe Resources and Lake Shore Gold confirmed your author's intel and
announced a friendly...
http://finance.yahoo.com/news/tahoe-resources-lake-shore-gold-120000876.html
...all-paper merger. TAHO shareholders will own around 76% of the newco, LSG shareholders around 24%. The ticket
price of this all-paper deal (one LSG share gets 0.1467 TAHO shares) is CAD$1.71 for your LSG shares, according to
the NR.
Now the opinion: First up I hate the deal and with the news out last week having already re-valued LSG, I firmly believed
it would have been better walking away and building its own value. With that said I have to play the cards I'm dealt, so
the moan stops there
TAHO is framing this as a CAD$945m "implied equity" deal, including the debentures. That's disingenuous at best
because the LSG share price before the deal also took into account those debentures! A better fixed dollar price on this
is CAD$792m ($1.71 x shares out), or U$567m.
The break fee on the LSG side is $37.8m, which means any third party would have to bid around CAD$850m for a
meaningful better offer. Call it CAD$1.84/share. That doesn't look too rich (esp in the new bullish gold climate) and may
attract somebody, but with GG out of the picture as noted yesterday, I can't see an obvious best fit challenger. "Me and
my friends" have bandied a few names about in mails between us this morning, but without much conviction. On
balance, I still see this as most likely to go through as stands. LSG will almost certainly get the insto support it needs on
this to reach 66.67% approval as all those guys will take the print happily.
Gold's continued strength has skewed the market for these stocks, but is we take GDX as our benchmark, at time of
writing mid-morning TAHO shares are trading around 4% off the benchmark and LSG shares are trading around 9%
above the benchmark. This indicates to me that the "paper penalty" TAHO is paying is small and the market thinks
TAHO is getting a bargain. But not a massive one.
I think my Thursday evening post cost TAHO very little perhaps 1% max of the newco. I think they would have gone to
30% of the previous $1.30 approx share price for LSG easily enough. Therefore my scoop is now merely a minor
footnote and of very little importance.
Overall, the big gains in gold this morning are helping the deal's top line numbers and with LSG/TAHO making
headlines, the assumed newco is getting bid up (I've seen a silly Bloomberg headline "Tahoe Takes Advantage of
Cheap Loonie to Acquire Lake Shore Gold", which plays right into the hands of those who chase deals and could have
been written by MacArthur).
I see no reason to sell on this first day and we may see an unlikely, though possible, third party make noises at some
point. But I'll tell you all now that the temptation to sell early into this deal is strong and I may do so in a few days' time.
For the moment I hold LSG and let it ride but if that call changes you'll be the first to know via a second Flash update.
Best, O
Appendix 2: Flash update dated Tuesday February 9th 2016
Good Tuesday afternoon, 1:20pm local time, 2, hours 40 minutes before the close, hot and sunny outside.
29

Two sales to mention, one already flagged, one getting priced.
Lake Shore Gold (LSG) (LSG.to): Will sell at CAD$1.70
I'm going to take CAD$1.70 if offered today, which is quite likely as the stock is at 68/69 and rising at time of this
message. Basically speaking, I'm not going to get greedy on this. It may go higher (on gold price improvement) but on
surveying the scene I think it's very unlikely we'll see a competing bid for LSG now. I have no stomach for second-
guessing the people behind the deal. I'll take profits.
New Gold (NGD) (NGD.to) currently selling
I got greedy, saw U$3.10 offered yesterday and didn't take it, watched the initial bloom fade away quickly, regretted not
going wit my gut. I've sold about half of mine so far at an average of U$2.86, the other half won't be far behind (today or
tomorrow most likely).
These two mean that suddenly, from getting low on funds in the spec portfolio, I'm flush with cash. No plans on what to
do with it yet. Enjoy your Tuesday, Best, O
Appendix 3: Flash update dated Thursday February 11th 2016
Good Thursday morning, 9am local time, half an hour before the open.
General commentary
With the gold market waking up with a vengeance and gold touching U$1,241/oz at the time of writing, my attitude
towards gold stocks and trades, proposed or otherwise, necessarily changes. The main risk is that we're watching a
blow-off top this morning and gold reverses nastily later on today or tomorrow, but that's a risk I'm going to take with the
following trades you see below.
Trade positions: Here's what I plan to do today, but see the note at the end.
B2Gold (BTO.to) (BTG): Up to this point, in a nutshell the Top Pick has been "waiting for it to improve so that I can sell
some and lighten, bring it down from Top Pick". That has now changed, I will add some more this morning and will
become newly aggressive about this stock's chances. It's been pushed down WAY too far and could double on us if it
gets momentum.
Lake Shore Gold (LSG) (LSG.to): It failed to reach my CAD$1.70 selling price (as per the Flash update Monday) and
dropped away quickly. I didn't sell a single share and I've been kicking myself since. That may turn out to be a lucky
mistake, as this gold price move looks to have saved face on this poor TAHO/LSG deal. I will now hold for at least
today, no matter what the price does. If I decide to sell tomorrow I'll tell you, if not I'll still be a holder this weekend.
New Gold (NGD): I called sell on the stock last weekend, sold about half of the shares at an average of U$2.86 before
they dropped away. I'll now hold the other half for the next couple of days and see where the price goes. No more
selling.
Teranga Gold (TGZ.to): I was annoyed with this stock to the point of wanting to dump it at 50c. The change is that today
I will add some more and average down. I will still sell this position in the near future, but it looks like one that can give
me a Swan Song trade at the end of this holding and jump hard under the circumstances.$1.2+k gold really helps the
company cash flow.
Dalradian Resources (DNA.to): I will add some more today.
Starcore Intl (SAM.to): I'm going to try to add some more, but won't take any old silly price they offer.
Final note: All the above will change in an instant if gold drops away. This is a near-term trade proposal and I'm going to
watch the market like a hawk today, instead of my usual hands-off approach.
We live in interesting times. Enjoy your Thursday. Best, O
Appendix 4: Flash update dated Friday February 12th 2016
Good Friday morning, just after the opening bell, sunny outside.
The quickest of updates today. After due deliberation and as noted in yesterday's Flash update, a heads-up here that
I'm going to sell my Lake Shore Gold (LSG.to) (LSG) position today. I'm looking for CAD$1.70, I'll take a few pennies
less if necessary. I'll be out by the close today.
Apart from that the other trades noted yesterday are as per. I'm unconcerned by the small pullback in gold from
yesterday's highs (that would change if gold loses its 12-handle). I haven't managed to add any Starcore (SAM.to) yet
though, as I'm not chasing the bid on that one. See you Sunday evening for IKN353. Have a pleasant weekend. Best, O
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
30

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
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
31

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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