IKN #354Premium

The IKN Weekly
Week 354, February 21st 2016
Contents
This Week: In today’s issue, Recalling gold commentary in IKN349, Having your forex cake
and eating it, The juniors are running.
Fundamental Analysis: Starcore Intl (SAM.to); buy (add), sell or hold?
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, Western Copper & Gold (WRN.to), NGEx Resources (NGQ.to),
Cordoba Minerals (CDB.v).
Low Cost Producer Basket: Overview, Franco Nevada (FNV), AngloGold Ashanti (AU),
Sibanye (SBGL).
Regional Politics: Ecuador wants exploration stage companies, Canadian mining companies in
Latin America: “Glacial progress” on policing, Colombia: A new mining plan, Colombia: Santos’s
patience running out with the FARC, Argentina: Meilán sets it out, Peru: Short update on the
election.
Market Watching: Stocks currently under consideration as new trades, Correcting my dumb
mistake on Dalradian Resources (DNA.to) last week, Lithium in Chile: Where the big boys go,
Pretium (PVG) underperforms, Kaminak (KAM.v): Trading like it’s about to be bought tomorrow.
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
• For me, the most interesting developments this week are found in ‘Regional Politics’,
with the region’s countries now lining up to fight for your Foreign Direct Investment
(FDI) mining cash. Check out the Colombia and Argentina sections in particular (two
countries that really, really need to get their mining act together one of these days).
• The temporary move to cash continues (I want a war chest for late March), but I also
mark your cards on the companies on my shortlist of potential new purchases
• We consider SAM.to and whether its recent share price pop is justified.
• I continue to bang on the table regarding B2Gold (BTO.to) (BTG).
Recalling gold commentary in IKN349 (with thanks to reader ‘NA’)
Back in IKN349 dated January 17th, when gold bullion was $1,089/oz (it’s now 13.0% higher)
and GDX, the precious metals miners’ ETF, was spending the weekend at $13.09 (it’s now
$18.38 and 40.4% higher), one of the intro sections was entitled “The best gold article that I’ve
read for a long, long time” and highlighted the analysis published on January 7th by John
Hathaway, Senior Portfolio Manager and Tocqueville Asset Management (1) (2). It was a long
article and we offered just the conclusion to the article, but urged you to go read the whole
thing because it really was an excellently-constructed argument. By way of a reminder, here’s
the very end of that conclusion section:
1

“We believe that the stage has been set for a significant repricing of gold in all
currencies, including the US dollar. Ownership of physical gold outside of the
financial system seems to make more sense than ever. Gold-mining equities,
which have been severely depressed by the four-year decline in the gold
price, should also participate. We believe that a trend reversal could prove
explosive for the entire precious metals complex.”
So, how we doin’ folks? Or more to the point how is Mr. Hathaway doing, because I cannot
claim any sort of responsibility for that precise and wholly accurate call, made before the big
move in gold. However, I will humbly submit that IKN349 was the same week I promoted Lake
Shore Gold (LSG.to) to a Top Pick and added more to my position (it was CAD$1.14). “Yet the
dogs eat of the crumbs which fall from their masters' table”.
Having your forex cake and eating it
Look what’s happened to the Canadian Dollars all of a sudden:
The lowly Loonie, unloved by the world since it failed to hold parity against the dollar, has
suddenly put in a spurt against the pecunia franca and risen 6% against the USD in the space
of just one month.
Six months ago the forex ranged around CAD$1 = U$0.76. One year ago we were at CAD$1 =
U$0.80. In my opinion, the current 1/0.72 isn’t going to last long (the chart strongly suggests
the Loonie lags gold but will eventually play catch-up) but even if we don’t see 0.8/1 in the near
future, we have witnessed a tide change and it’s certainly something you’ll need to take into
account when you’re considering your trades in miners that don’t report in US Dollars, because
up to now it’s been one of the caveat points used by people buying large chunks of miners that
report in Loonies (yes, that includes Lake Shore Gold). “The forex really helps costs” and
“margins in local currency are stronger” have indeed been true things to retort when the world
laughed at you for buying another gold miner.
The juniors are running
A quick comment on a developing trend. One of the main reasons The IKN Weekly runs its
“Low Cost Producers” basket and section is to keep track of what the bigger names are doing,
2

compared to our specific focus area of junior mining stocks (typically smaller producers and
explorecos). So with that in mind, please compare the difference in performance in the large
cap Producer Basket (it dropped over 3%) to the performance of The IKN Weekly ‘Stocks to
Follow’ list (they all went up, every last one of them).
I’m not claiming superpowers on the selection of stocks either, there were plenty of other junior
names that put in stronger gains than the penny or two in some of my own portfolio names
(check out the short Kaminak (KAM.v) comment in ‘Market Watching’ for just one other). No,
what seems to be happening is that money is indeed rotating out of the entry level mining
stocks that have given them strong gains in a short time and is now looking for new alpha in
(what the market considers to be) riskier companies further down the mining food chain. That
little mouthful can be summed up with an example, “out of GG, into BTO”.
This is healthy, this is good, this is what we, the junior speculator, want to see in a market
that’s coming back to life after years in the hinterland.
Fundamental Analysis of Mining Stocks
Starcore Intl (SAM.to); buy (add), sell or hold?
Last week, two things happened around Starcore International (SAM.to), our small producer-
cum-land grab play.
1) the stock rose by 27.5%
2) On Wednesday it gave us (3) its 2q16 (to January 31st) production numbers
We cover the ins and outs of the stock movements in ‘Stocks to Follow’ below, here in the
Fundamentals section today we concentrate...well..on the fundamentals, what the production
numbers point to and whether the stock is currently a buy, sell or hold after the big percentage
price gain last week. I’m going to use a lot of the ‘usual suspects’ charts in this piece today, but
the commentary will be kept to a minimum (I’ll try hard, promise) until we get to the end.
The 2q16 production numbers
Before we dive in, please remember that SAM.to has its financial year end on July 31st every
year so it’s second quarter, the one we’re considering today, closes on January 31st. From now
on I’ll simply refer to the period as 2q16.
So to business and from Wednesday’s NR we can update on several parameters including the
tonnes per day throughput, average grade, average recovery and the one that really matters,
quarterly production (which SAM.to in its production NR gives in AuEq terms, we get to find out
the exact split of gold to silver when it files its financals later). Here are those four items in
chart form:
SAM: tonnes per day throughput
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
3
31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj
tpd SAM.to: Avg gold head grade (g/t) per qtr
3.50
3.00 2.812.89
2.50
2.40
2.142.152.032.01 2.23
2.38 2.55 2.342.422.362.22
1.982.00 2.22 1.99
2.00 1.70
1.50
1.00
0.50
0.00
source: company filings
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj
g/t Au
source: company filings

As you can see, gold equivalent production for 2q16 was at the low end of the recent range at
4,543 oz AuEq. As tonnage throughput was normal, we can set most of the blame on the lower
average head grade of 1.99 g/t Au, with a side order of blame for the 84.2% recovery rate, a
pip or two down on the most recent quarters.
Revenues estimates for 2q16
The above covers what we know, now for some conjecture on what we can expect from the
SAM 2q16 financials when they show
up (mid-March approx). Here’s the
development of reported revenues at
the company and by using an average
price for gold during the quarter,
assuming production = sales (and as
you know, that’s always a bit of a leap
of faith but we have to start
somewhere) and converting into
Loonies (SAM reports in Canadian
Dollars) IKN forecasts revenues of
$6.5m in 2q16.
In the Wednesday NR, SAM guided us lower on costs so by going modestly lower on a per
ounce basis, here’s how operating cash costs look compared to previous quarters:
SAM.to: Cash cost AuEq vs Au realized price
2000
1800
1600
1400
1200
1000
800
600
400
200
0
4
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco tse61.naj
SAM.to: Gold recovery percentage
100
95
90 89.00 88.20 86.70 86.90 84.61 84.50 84.20 85 89.00 86.00 79.30 86.90 86.30 85.60 86.60
80 83.90
81.00
75 78.40
75.00
70
69.50
65
U$/oz
Au realized price
cash cost AuEq
source: company data, IKN ests
There’s not much margin there, but it’s not deteriorating by much compared to 2015, either.
Taking the money side one step futher, these charts show how mine operating earning and pre-
tax and net earnings shape up:
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj
SAM.to: Gold Equivalent produced
8000
6900 7000 6315
6000 5749 6000 5100 5338 5381 5130 5194 5000 4800 4429 4686 4543
4000
3000
2000
1000
0
source: company filings
31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj
oz AuEq
source: company filings
SAM: Reported revenues, per qtr
10
9
8
7
6
5
4
3
2
1
0
31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco tse61.naj
$m
source: SAM filings, IKN calcs, Jan'16 ests

SAM.to: Operations overview
10
9
8
7
6
5
4
3
2
1
0
-1
5
31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco tse61.naj
$m revenues
COGS
mine op earnings
source: SAM filings, IKN ests
SAM.to: Earnings
8
7
6
5
4
3
2
1
0
-1
-2
-3
11.rpa 11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco tse61.naj
$m
pre-tax earnings
net earnings
source: SAM filings
Want it in one sentence? It’s another break-even/small-profit/small-loss quarter. It’s been the
same story since 1q15 and if my calculations are spot on this time it’s a small and near-
inconsequential loss. If I’m out, it could be a neutral or even a slight profit quarter, but there’s
really very little in it. What we’re going to get from SAM.to in its 2q16 financials is yet another
“meh” quarter. Which isn’t bad conisdering gold averaged under U$1,100/oz in the period.
Balance sheet items
We’re seeing changes in the balance sheet, mostly due to the addition of the Cortez toll milling
operation to SAM plus the $4.5m one year loan the company has taken out in order to fund its
start-up.
SAM.to: Assets Breakdown per qtr
90
80
70
60
50
40
30
20
10
0
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco tse61.naj
$m
cash st inv other current fixed
source: company filings, IKN ests
Here above the overall asset position, which holds no great surprises. Below find overall
liabilities, which have crept up due to that loan.

SAM.to: Liabilities per qtr
50
40
30
20
10
0
6
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco tse61.naj
source: company filings/IKN ests
srallod
fo
snoillim
LT debt
current debt
Homing in on the current liabilities, here’s
SAM.to: Current Liabilities per qtr
how we think they get shifted and although 12
11
less than $9m might not be much for a
10
company with (modestly) free cash flow 9
8
positive operations and a hatful of assets,
7
but it represents in visual form the risk SAM 6
has taken in moving on the Altiplano 5
4
(Cortez, ex-CUT.v) toll miner. Let’s be clear,
3
I like the plan and if they execute well they 2
become a Mexico equivalent of Dynacor in 1
0
Peru (though not quite as big), with
operating margins baked into the business
plan. But after investigating the toll milling
business last year (and in 2014) it’s clear
there are a lot of traps one can fall into
and in the case of SAM, they now have a
clock ticking on their ability to run the
new arm of the corporation at a profit.
Here’s working capital. It’s worth
mentioning here that, at a pinch, SAM
could pay back that new loan from
treasury but it would make it a bit cash-
tight. One of the things I’ve always liked
about it is its safe cushion of cash, I
wouldn’t want that stripped away.
Which brings us to the relative value of
its assets compared to market cap, shown in these two charts. The recent pop in SAM has
closed the gap a little, but it’s very small stuff compared to what the company via its balance
sheet says the
company is worth.
31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco tse61.naj
source: company filings/IKN ests
srallod
fo
snoillim
SAM.to: Working Capital per qtr
14
12
10
8
6
4
2
0
-2
-4
-6
-8
-10
-12
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco tse61.naj
source company filings/IKN ests
srallod
fo
snoillim
SAM.to: share price vs book value/share
(adjusted for Dec'15 reverse split)
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco tse61.naj won
pps at qtr end
bv/share
source: company filings, TSX, IKN calcs

SAM.to: Price/Book Ratio
1.00
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
Discussion and conclusion
Here are a few bullet points on today’s SAM today:
• It’s a company likely to register a small loss for its 2q16 period to January 31st. Nothing
drastic, but more of the type of virtual break-even result we’ve been getting from it for
the last five or six quarters. There’s nothing new on this score.
• However, its 2q16 was from a company that produced a lower than average 4,543 oz
AuEq in the period and sold them at an assumed average of U$1,089/oz (London Fix
average for the quarter).
• If it can (virtually) break even at those low levels, we’re not doing badly in the new
gold price climate. For a very simple example, a 5,000 oz AuEq quarter at current gold
prices would boost SAM.to’s revenues from the 2q16 estimate of CAD$6.5m to
CAD$8.45m, the type of figure that guarantees a quarterly profit (and with just 43.15m
shares out, it doesn’t take much to drive an eyecatching per share number).
• The risk in 2016 is the near-term loan SAM has taken out to get its Altiplano toll milling
arm up and running. We have until November to pay that back so the gold price pop of
the last six weeks is very welcome on that score. But the eventual success of the toll
mill is what we need to see from SAM in order to feel confident, that has to pay for
itself and it remains to be seen whether this business will work. It should work, done
right, but neither you nor I should take that as a given.
• Meanwhile, the market’s newfound appreciation for land asset values should also play
into SAM’s hands. Not only has it incorporated the ex-CUT.v assets, but recall in 2015 it
paid a mere $2 cahs for the big Creston moly project (as well as some other moly land
up North). For sure moly as a metal price is still deeply in the dumpster, but the timing
and price of the purchase looks impeccable with hindsight and if the market begins to
applaud the SAM moves in 2015 with even a minor percentage of the money that’s
been “invested” (wasted?) in drilling and development at Creston over the years, SAM
moves higher still.
• On the subject of asset values, even after last week’s big percentage move (on low
volumes, see below) SAM is at 0.33X price/book. That’s low for any company, it’s very
low for a company that’s making a profit on selling its gold. As to where that could
potentially go, I wouldn’t want to ask the world from the stock in one shot and due to
its size and potential debt risk this year, we’re not in the position to demand a 0.7X or
0.8X ratio á la B2Gold for the moment, but if I saw it at 0.5X P/BV I wouldn’t bat an
eyelid. That would be a CAD$0.65c stock at today’s rates and 47.7% higher than
Friday’s close.
7
31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco tse61.naj won
source: company data, TSX, IKN calcs

The bottom line to SAM in 2016 is that you have a clear risk, that of being able to pay back its
$4.5m financial debt on time and in good order come November. You also need to take into
account its backwater trading status at the moment (see below) and it’s overall small size of
operations, something that makes quarter-by-quarter stability difficult. But get over those
problems and you have a wonderful potential moneyspinner on several levels:
• The gold price hike really favours its current operations
• If the toll milling end of the business gets into gear, that’s a whole new revenue stream
• The assets on board will get revalued if the mining recovery sets in (but we’ll have to
wait patiently for Mo and Cu to rise before the real bonanza comes on that score).
As things stand today and at Friday’s closing price, I consider Starcore International
(SAM.to) a hold. It’s not the perfect company, but there decent logical reason to support its
new price range of 40c+ and as seen above, it’s not difficult to make a ballpark case for it to go
higher. It’s the type of company that can also start zooming higher on newly found volume and
trading (let’s recall Eric Sprott is the major shareholder here) so I’m in no hurry to sell at the
first price move. Then again, I do see the potential risk of the debt it’s holding and on an
operations front, SAM has to prove to the world that its toll mill project is a moneymaker, rather
than a white elephant (and after DDing the Peru toll mill sector, making money is far from a
given no matter what the glossy corporate presentations might tell you to the contrary). Thanks
to the new gold price I’m a happier holder than I was and if it retraces to 30c, I’d add another
tranche. But for the time being I’ll stick with what I have.
Stocks to Follow
Of the 11 positions (or 10 stocks if BTO counts twice) we had open this time last week they all
went up. I’m not sure, but I think that’s the first time ever we’ve seen all components of a
‘Stocks to Follow’ list rise on a week-on-week basis (I vaguely recall a couple of times with no
losers but a couple of unchanged stocks on the list). Anyway, they all went up and that’s a
good thing so no need to list them all, just the biggest percentage winners which are led by
Starcore Intl (SAM.to up 27.5%) and followed by Sandspring Resources (SSP.v up 18.5%),
Atacama Pacific (ATM.v up 14.3% now sold), Regulus Resources (REG.v up 10.3%) and Lara
Exploration (LRA.v up 10.3%).
With the sale of the other half of New Gold (NGD) and Atacama Pacific (ATM.v) last week, we
now have just nine open positions on our positions ‘Stocks to Follow’ list, six below our self-
imposed maximum of 15. That leaves plenty of room to add new names when the time is right
and what’s more, I have cash to play with too. Wow, it’s been a long dark winter. Five of the
open positions are in the green and four are in the red. At least two of those aren’t turning
green in the near future (we hold bags), but high hopes exist for both SAM and BTO.
8

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$1.50 -28.9% Suddenly looks v cheap
Metals Producers (in current order of preference)
B2Gold BTG STR Buy U$0.85 13-jan-16 U$1.11 30.6% separate trade tranche
Teranga Gold TGZ.to hold C$0.54 15-feb-15 C$0.57 5.6% added a few, will exit soon(ish)
Starcore Intl SAM.to spec buy C$0.48 10-jan-15 C$0.44 -8.3% Moving now, didn't add
Land Grab Stocks (in current order of preference)
Sandspring Res SSP.v hold C$0.195 18-oct-15 C$0.32 64.1% Risk play, 30c tgt hit, holding
Lara Expl. LRA.v spec buy C$1.15 08-apr-12 C$0.375 -67.4% 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$0.88 31.3% tgt still 95c to $1, added
Focus Ventures FCV.v spec buy C$0.23 01-jul-12 C$0.075 -67.4% Hit hard by PFS news
Regulus Res REG.v hold C$0.30 06-apr-15 C$0.32 6.7% Comm. Rels slow progress
Closed in 2016 closed close price
Phoscan Chem FOS.to jan16 C$0.28 29-mar-15 C$0.265 -5.4% Buyout trade, bot but poor deal
True Gold TGM.v jan16 C$0.18 23-aug-15 C$0.25 38.9% okay trade, sold on pol risk
McEwen Mining MUX jan16 U$1.09 25-jan-15 U$1.20 10.1% sold due to lack of value
Lake Shore Gold LSG.to feb-16 C$1.10 07-apr-15 C$1.69 53.6% bot out, sold early in process
Atacama Pacific ATM.v feb-16 C$0.19 26-apr-15 C$0.40 110.5% sold for a double on big pop
New Gold NGD feb-16 U$2.06 24-jan-16 U$2.96 43.7% closed good near-term trade
2009, 2010, 2011, 2012, 2013, 2014 and 2015 closed positions in appendices below
Now for some notes on current basket stocks.
New Gold (NGD): Position closed. No surprises here, it was always a near-term trade and
although I like the company’s chances going forward, there’s a plan to be stuck to here and as
per both IKN353 and the Flash update of last week (see Appendix 1) this trade is closed.
It’s one of those rare occasions when I get to feel right for the right reasons. The plan included
a potential pop on the filing of its year-end numbers (which I’m not going into today, but they
were fine and in-line) and interest generated from its “Investor Day” on February 18th. That
happened, NGD enjoyed its bounce back over U$3, ka-ching.
Before leaving, I want to stress that this trade plan is the way I decided to play NGD, it’s no
reflection on the quality of NGD the stock and if you decide to stay in and hopefully ride it
higher, you’ll get nothing but goodwill from me. To that end, and to underscore something I’ve
floated on a couple of occasions since warming to NGD in the last month’s worth of coverage, I
heard from a well-placed source on Friday that my hunch about NGD slow-playing the positive
effect of the Loonie against the USD is almost certainly correct. He’s picked up from talks with
engineers working the project that the Loonie’s weakness over the last year (don’t get confused
with the comments about the last month or so in the intro above) may take as much as
U$100m off the final capex bill, but Randall Oliphant don’t want to reveal that to the world as
yet (probably because they’re erring on the side of caution).
But no matter, I’m out until further notice and any coverage of NGD in the meantime can come
in “Low Cost Producer Basket”, as it’s a member of the team there. A good trade that’s given
me a decent profit and a lot of personal satisfaction...every so often you feel that you aren’t
just stumbling around in the dark after all. It won’t last.
Atacama Pacific (ATM.v): Position closed. This was an easy one to liquidate. It fiddled
around between 32c and 35c early week (on suspicious looking program trades based on 5k
chunks being thrown back and forth) and had me thinking about taking profits, but once it
9

popped to 40c and stayed there on volume, the sell button got hit.
Again, it could go higher, who knows? But this was always a speculative small trade, the type
that 100%+ profits are built for. That’s the margin they offered me, that’s what I took.
Goodbye and thank you.
Teranga Gold (TGZ.to) (TGZ.ax): Selling at “something over 60c”. As per the Thursday
evening Flash update (see Appendix 1) I’m a seller at “something over 60c”. We did in fact
briefly see 61c on Friday but it was ephemeral pleasure and TGZ finished the week with a
modest 2c win.
This is one that has disappointed, with a
management team that has failed the
transparency test (for my taste at least). How that
it’s out of the deep 40c penalty box it’s easier to
hold and wait for a decent place to sell, patience
was rewarded a few weeks ago when I decided to
hate myself a while and hold, but it’s not one I’m
looking to base my investment future around,
either. I noted (4) Rick Rule’s words last week, “I
have used the liquidity offered up in the last three
weeks to sell some mistakes”. For sure I don’t
need as much liquidity as a big hitter in order to
dump things, but that resonated with me and my thoughts about TGZ.
Sandspring Resources (SSP.v): Holding through. It’s gone through my 30c target and
under normal circumstances I’d sell, because when it comes down to the hard numbers I don’t
see much upside in SSP under today’s conditions, particularly when compared to peers. But
these aren’t normal circumstances and SSP is the type of set-up that could go much higher, up
into the illogically high levels, under today’s bullish and hints-of-frothy market for juniors with
gold projects. Plus it’s not the biggest holding I have in absolute dollar terms, not by a long
chalk, so SSP is the one I’m going to run a risk on and keep as a hold for a while longer, let’s
see what happens.
B2Gold (BTO.to) (BTG): Over the last few days I’ve heard moans and groans from people
unhappy about B2Gold’s apparent lagging behind compared to other stocks during this upmove.
To that I say “Phooey”, it’s way too easy to cherrypick your opponent and for sure there have
been more spectacular gains
registered in Stock X or Stock Y,
but when you compare BTO’s
performance to sector-wide
benchmarks such as GDX or
GDXJ (for me and others,
including Van Eck, B2 seems to
fall somewhere between these
two lists) the rebound seen in
the stock has been more than
satisfactory. Here right is the
action of those three tickers in
the last two week, using the US
BTG ticker to make the
comparative forex-free:
It compares well over just five days, too:
10

In short, BTO’s been kicking butt and if clear outperformance against market benchmarks isn’t
enough for you I’d suggest that you fill up your glass immediately because it looks half empty
from what I see.
Perhaps the issue isn’t with BTO’s recovery and more to do with where it’s recovering from, for
example the now-infamous U$0.60 it
touched intraday on January 25th .
This chart shows how deeply
BTO/BTG dropped compared to the
benchmarks, it really was a horrid
period and I fielded plenty of
“What’s wrong at B2?” mails from
people during the period. In
hindsight it’s an easy one to figure
out, some USA Wall St office(s?)
decided that they didn’t want gold
exposure any more and in doing so,
ticked the bottom for the rest of us
(and my contempt for the lack of
mining knowledge among fools in
suits with way more money than
sense is well-documented).
As I wrote to subscriber PJ during last week on the subject of BTO (excerpt of longer mail on its
free cash flow generating ability):
“... the issue the market has with BTO and the reason it underperformed in late 2015
and first two weeks of January 2016 (which was gut-wrenching, by the way) is summed
up by "We don't think BTO can afford to build Fekola". ...The bottom line is that I'm
clear about BTO's potential to deliver on Fekola, others aren't.”
Sidebar: I should have put “three weeks of January” and not two, I was writing rather than
checking (and I’m probably still trying to blot the memory of BTO’s January out of my
subconscious).
All this is the same point I made last week, that BTO is still undervalued! And even after
beating out the sector averages neatly last week, it’s still undervalued! People, this is the sound
of me banging on the table about BTO, here you have a stock that doesn’t need a single dollar
added to the price of gold in order to see its share price improve, there’s a approx 20% gap
there and it’s going to be covered. At steady state that would put BTG at my near-term (first
stage of real recovery, if you like) target of U$1.30, give or take the pennies so for those of you
who thikn the bargains have already dried up, think again and look no further.
11

Starcore Intl (SAM.to): See above for the nitty gritty on the numbers, here we do last
week’s trading and it’s good to report on the best percentage winner of our bunch of Stocks to
Follow list. However, the obvious weakness to this significant share price pop needs light shone
upon it too, the continued lack of significant traded volume. Here’s how SAM.to traded last
week:
• Monday: Markets closed
• Tuesday: 6,300 shares traded
• Wednesday: 36,000 shares traded
• Thursday: 35,600 shares traded
• Friday: 32,900 shares traded
Not only are the numbers low, but they come
around the Wednesday morning NR (3) of
SAM.to’s 2q16 (to January 31st) production
numbers. Also, I have to say that the
homogeneous “mid-30k” volumes on the three
days that matter don’t look blatantly suspicious,
but there’s enough there to get my nose
twitching slightly.
The Copper Basket
After seven weeks of 2016, The Copper Basket shows a 6.46% loss to level stakes.
company ticker price 1/1/16 Shares out Market Cap current pps gain/loss%
1 HudBay Min. HBM.to 0.35 235.23 809.19 3.44 -35.2%
2 Ivanhoe Mines IVN.to 0.61 778.96 514.11 0.66 8.2%
3 Reservoir Min. RMC.v 4.08 48.46 198.69 4.10 0.5%
4 Capstone Min. CS.to 0.44 382.04 127.98 0.335 -23.9%
5 NGEx Resources NGQ.to 0.65 187.71 106.99 0.57 -12.3%
6 Copper Mtn CUM.to 0.445 118.8 58.21 0.49 10.1%
7 Copper Fox CUU.v 0.125 417.64 52.21 0.125 0.0%
8 NovaCopper NCQ.to 0.395 104.33 45.91 0.44 11.4%
9 Nevada Copper NCU.to 0.66 80.5 40.25 0.50 -24.2%
10 Western Copper WRN.to 0.38 94.19 32.02 0.34 -10.5%
11 Atico Mining ATY.v 0.28 97.59 31.23 0.32 14.3%
12 Hot Chili Ltd HCH.ax 0.09 420.12 29.41 0.07 -22.2%
13 Amerigo Res ARG.to 0.205 173.61 24.31 0.14 -31.7%
14 Cordoba Min. CDB.v 0.16 79.45 15.10 0.19 18.8%
15 Revelo Res. RVL.v 0.055 99.19 5.46 0.055 0.0%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg -6.46%
The basket average gained nearly three
percent on the week and rallied well, with nine The Copper Basket 2016, weekly evolution
of the components filing weekly gains 5%
(HBM.to, IVN.to CUM.to, NCU.to, NCQ.to,
0%
HCH.ax, WRN.to, ARG.to, CDB.v), one
-5%
unchanged (CUU.v) and logically enough, the
other five losers on the week (RMC.v, CS.to, -10%
NGQ.to, ATY.v, RVL.v). Biggest winners were -15%
racked up by HudBay (HBM.to up 26.5%),
-20%
Cordoba Minerals (CDB.v up 18.8%),
-25% source: IKN calcs
NovaCopper (NCQ.to up 12.8%), and Copper
jan3rd 10th 17th 24th 31st feb7th 14th 21st
Mountains (CUM.to up 11.4%). The only
12

double figure percentage loser was Revelo (RVL.v down 21.4%). Overall, the copper juniors
managed to get over the world’s ennui with their underlying metal and manage to climb with
the other left-behind juniors, though the outlier to the pack is HudBay, a larger stock with
bigger liquidity and coverage that seems to march to a different beat than its basket colleagues.
I suppose that’s one of the reasons why I included it in the first place this year (that and to
watch how its welter debt burden affects the stock, which is now clear enough, as even with
last week’s big pop it’s still the worst performing
component year to date).
This hourly chart (right) shows that copper market prices
for the futures contract last week chopped around in a
tight range, with spike lows of U$2.04, spike highs of
U$2.09 and most trades going off between U$2.05 and
U$2.07/lb. There wasn’t much direction and with China
only just getting back to business after its festivities,
volumes remained low.
The second chart of the dailies in the same contract
belowshows a different picture, for my money at least. At
some point in this mini-rally away from U$2.00/lb, copper
will need to put in a higher high than the ones seen in late
December (U$2.15) and earlier this month (just under
$2.15/lb) if it wants to impress the technically-minded and
get some real momentum going. Because if it turns back
with a lower high the chartists among us will not be impressed
at all, three strikes and you’re out and all that. And if the
bigtime inventories build-up in Shanghai warehouses is anything
to go by, the message is that bulls should be very wary of real
end-user demand.
Now for the regular weekly update of copper warehouse
inventories, in bullet point form:
• Total world copper stocks in the three official
warehouse systems rose by a big 24,582 metric tonnes
(mt) (+4.7%) to stand this weekend at 547,188mt.
• Shanghai stocks were the big mover as the Chinese
New Year period ended, people got back to work and
the rush to fill warehouses began. SHFE stocks rose by
a very heavy 35,622mt (+14.8%) and hit a new all-time record 276,904mt under roof.
My Christmas period prediction that SHFE would top 300k before the loading was done
is just a step and a half away now.
• The LME was again eclipsed by Shanghai, that’s something that could become a long-
lasting theme. At the LME stocks dropped (arb to SHFE?) by a big 11,700mt (-5.3%) to
finish the week at 208,525mt. The gap between the new daddy and the old one has
grown quickly. London Calling.
• Calmer waters at the Comex copper warehouses, which added just 660mt (+1.1%) to
finish this week at 61,759mt.
Here's the Shanghai-only chart, with the visual on that new all-time record warehouse figure for
copper.
13

Shanghai Futures Exchange Warehouse Stocks, 2014-2016
300000
260000
220000
180000
140000
100000
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:
Western Copper & Gold (WRN.to): On Thursday morning WRN brought news on the
permitting track at Casino (5) that started this way:
VANCOUVER, B.C.--(Marketwired - February 18, 2016) - Western Copper and Gold
Corporation (WRN) (NYSE MKT: WRN) announces that its wholly-owned subsidiary,
Casino Mining Corp. (together, the "Company" or "Western") has been informed that
the Executive Committee of the Yukon Environmental and Socio-Economic
Assessment Board ("YESAB") has notified the Federal Minister of Environment and
Climate Change that it is requiring that the Casino Project be reviewed by a panel (the
"Panel Review") for matters relating to tailings and waste management and potential
effects to wildlife.
The panel review is the highest power that can be taken by the Assessment board and it’s the
first time it’s been used since the appropriate legislation was enacted in 2005. The company
welcomed the move and I think that’s exactly the right attitude, not only for purposes of
transparency and good social standing, but also because it means that if this hurdle were
passed permitting becomes much, much easier for the project. On the other hand,
environmentalists and those opposed to the project welcomed the move too, not least due to
their deep concerns about the high (286 metres!) tailings wall that would be part of the project.
Via this link to the wonderful Canadian juniors blog The Muckpile (6) you can get to two
regional news reports for more information.
As for timing, once the YESAB gets a reply from the Federal Minister, it will have 15 months to
present its findings. So pencil in “mid-2017” as the crunch moment for this company and its
project.
Cordoba Mining (CDB.v): My little copper
muse did very well last week and managed to
return 100k+ volumes on every trading day. In
fact there’s only been one day in the last ten
that it hasn’t managed to trade more than
100,000 shares in a day, so there are more
people than just Friedland nibbling at this one,
it seems. Not me yet though, I want to see if
the government of Colombia and the FARC can
nail down that deal come March 23rd (see
below) because if not, CDB’s specific locality
suddenly becomes unsafe again.
NGEx Resources (NGQ.to): Friday post bell, NGQ announced (7) that its $8m equity
financing had closed (13.333m shares at 60c a pop). What’s interesting to note is that very few

of those shares were bought outside of the Lukas Lundin empire, with $6.05m taken directly by
the Lundin Family Trust (via one of its standard bankers, Julius Baer & Co of Zurich Switzerland,
while another $1,65m was bought in name by VP Bank AG of Liechtenstein, which has also
been used by Lundin connections in previous deals (going back to Lundin Petroleum). Just
$300,000 worth of the shares made it to British Columbia, according to the regulatory filings. All
of which goes to show that having a deep-pocketed sponsor or being part of a family empire
such as NGQ is surely very useful during a market downturn.
The Low Cost Producer Basket
After 7 weeks of 2016, the Low Cost Producer Basket shows a gain of 44.73% to level stakes.
company ticker price 1/1/16 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Barrick ABX 7.38 1164.67 14.63 12.56 70.2%
2 Newmont NEM 17.98 529.12 13.14 24.84 38.2%
3 Goldcorp GG 11.56 830.22 12.83 15.45 33.7%
4 Franco Nevada FNV 45.75 176.298 10.12 57.42 25.5%
5 Agnico Eagle AEM 26.28 217.67 7.54 34.63 31.8%
6 Ang/Ashanti AU 7.10 405.27 4.41 10.88 53.2%
7 Detour Gold DGC.to 14.41 170.85 3.68 21.53 49.4%
8 Sibanye Gold SBGL 6.09 228.71 2.71 11.85 94.6%
9 New Gold NGD 2.32 509.16 1.53 3.01 29.7%
10 Buenaventura BVN 4.28 254.19 1.32 5.18 21.0%
Prices in U$/NYSE tickers, except DGC.to (CAD$) Portfolio avg 44.73%
And on the seventh day, he rested*. The The Low Cost Producer Basket: Weekly performance
constant upmoves came to a (brief or 50% and comparative to GDX control
otherwise, you be the judge) conclusion
40%
and last week our basket saw four
30%
names make gains (ABX, FNV, DGC.to,
NGD) and six names show losses (GG, 20%
NEM, AEM, AU, BVN, SBGL). Importantly 10%
and in stark contrast to the last three
0%
weeks, no basket stock moved 10% or
-10%
more in either direction. Biggest winner
was Franco Nevada (FNV up 5.6%),
biggest losers were Sibanye (SBGL down
8.0%) and AngloGold Ashanti (AU down
7.0%), all those three get a separate
mention below.
Both our Basket and the GDX benchmark
(we’re still 10%+ ahead and long may it
stay that way) finally showed signs of
profit-taking, but the action we saw in the
better quality juniors (see ‘Stocks to
Follow’ above for examples) is very
encouraging and points to a mining sector
that isn’t seeing cash withdrawn, more like
being rotated into second tier names. We
mooted that idea in one quick line in this
section last week, what we saw over the trading days since then adds further evidence. So a
pullback for the big names but arguably a healthy one. I continue to like what I see.
Franco Nevada (FNV): It took one flat week to close on the big bought deal and yes, as fully
15
dr3naj ht01 ht71 ht42 ts13 ht7bef ht41 ts12
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%
dr3naj ht01 ht71 ht42 ts13 ht7bef ht41 ts12
source: ikn calcs, NYSE/Nasdaq data

expected last week it went to the top number and U$920m. Add in the 5.6% week on week
share price win and FNV is the latest addition to the U$10Bn market cap club, Pierre’s little girl
ain’t a girl no more.
With at least half a billion US dollars left to play with after paying for the Antapaccay stream,
FNV now has cash burning its pocket. Zero surprises if we hear about another large-size deal in
the next few weeks, this isn’t a company that’s ever sat on a large cash pile and the way in
which the mining market has suddenly woken up adds more urgency.
Sibanye (SBGL) and AngloGold Ashanti (AU): It’s not just the Loonie versus the
Greenback. The South African Rand (ZAR) has enjoyed a strong rebound against the US Dollar,
all thanks to the gold price move of course, which starts to reflect in the share prices of
companies with big cost exposure to South Africa. We have two solid examples in our list this
year and I doubt it’s a coincidence they were the two biggest losers (in dollar terms) last week.
The South African Rand has appreciated by a touch over 8% in the last month. Yes we do of
course need to take into account the biggest depreciation it suffered in 2015, but markets don’t
care much for nostalgia and the adjustments in both AU and SBGL are wholly logical.
*I am in full agreement with George Carlin’s view that God cannot possibly be a woman (8). “...if there is a God, I am
convinced he is a he, because no woman could or would ever f__ things up this badly.”
Regional politics
Ecuador wants exploration stage companies
According to the Ecuador Mining Ministry website (9) when Ecuador goes to PDAC next month
as one of the official sponsors of the event (for the second year running, they tell me last year’s
Ecaudor Day reception had great food and drink, consider your cards marked, Toronto), the
county plans to make a special appeal to exploration stage companies and wants them to make
Ecuador their next jurisdiction of choice. Another example of how Ecuador’s mining minister
Javier Córdova lives in his own little dream world.
Canadian mining companies in Latin America: “Glacial progress” on policing
I don’t watch BNN but occasionally dial up a specific segment or get sent one in the mail.
Reader ‘KK’ sent over this section (10) of Andrew Bell’s Friday shows in which the policing of
Canadian mining companies’ activities in Latin America was criticized by Shin Imai, a law
professor at Osgoode Hall Law School and part of an organization that helps communities
affected by natural resource extraction industries. Here’s the blurb that comes with the nine
minute video:
The York University associate professor monitors the behaviour of Canadian mining
companies in Latin America. The new Liberal government is said to plan no changes to
the previous government's much-criticized Office of the Extractive Sector Corporate
Social Responsibility Counsellor. Imani has been quoted as saying there is “really no
16

point” to the office.
I’m not sure where they got York University from, but the rest is useful. The interview
resonated with me because Shin Imai’s position is very close to my own on these matters (one
of the avenues from which I get accused of being a lefty pinko by the brain-dead end of the
blog readership...bless em all). Imai is a realist, not a reactionary anti-mining-at-all-costs
treehugger. He recognizes that mining is necessary and when done right is a benefit to all, but
his keystone question of “At what point does it go over the line?” when it comes to disruptions
inside communities gets to the hear of the matter. He also highlights the abuses committed by
Tahoe Resources and HudBay, which quickly endeared him to me ☺.
Colombia: A new mining plan
In a reasonably important speech at a meeting organized by the National Association of
Businesspeople of Colombia (Asociacion Nacional de Empresarios de Colombia), Colombia’s
vice-minister of Mining, María Isabel Ulloa, rolled out the Santos government’s latest plan to
improve the mining sector of the country.
Vice-minister Ulloa said (11) that the plans were in their final stages and were due to be
formally presented before the end of the first quarter of this year (i.e. before March 31st). Ulloa
is selling her plan on the idea of “Six Pillars” on which to construct a solid base for mining
activity in Colombia. Here’s an outline in bullet point form (no big details for today, let’s see
how this progresses):
• Pillar One: Judicial Security. In the words of vice-mininster Ulloa, this means
that the mining and extratcive industries “have laws that are not constantly
changing” and “end in how we decide to interpret the rules”.
• Pillar Two: Competitive Conditions, which includes zero import tariffs on key
supplies needed by mining/O&G, plus a clearer picture on royalties (which
from the comments made by Ulloa, is still under discussion inside the
government).
• Pillar Three: Legitimate Trust, which covers the key aspect of communities
affected by extraction industries. Shewill be looking to promote better cross-
governmental communication in order to improve and refine the message
sent to communities.
• Pillar Four: Infrastructure, with special emphasis placed by Ulloa on the
connections to hydrocarbons operations and projects (coal, oil/gas) in rural
areas. Improved logistics such as train tracks would greatly improve industrial
efficiency in these areas.
• Pillar Five: Information, starting with the basic geological knowledge of the
country. She mentions in her presentation that the Colombian Geological
Service (Servicio Geológico Colombiano) has, in the last four years, mapped
67% of the country and has 44% of of its total geophysical data compiled.
That’s an improvement, but the bare numbers show there is a lot of data left
to be collected.
• Pillar Six: Institutions, particularly the ANM (National Mining Agency), which
needs to be strengthened, become more efficient and more-user-friendly.
Now for the personal opinion and there are things to like here, first and foremost that the
Santos government recognizes that as things stand today Colombia’s mining industry statute is
a mess and it needs to improve in order to progress and attract investment.
Colombia: Santos’s patience running out with the FARC
Up until late last week, President Juan Manuel Santos had showed a flexible approach to
deadline for the peace negotiations between the government and the FARC-EP terrorists (and
the separate ELN terrorist group) being held in Cuba, but after a round of provocation by the
FARC last week (they showed up armed, masked and flag-bearing in a Colombian political
video, something strictly against the terms of the peace talks deal) he has changed his tune. On
17

Friday he stated (12) that the pending issues for a final deal must now be resolved by the
previously agreed deadline of March 23rd, else it will be clear that “the FARC has no interest in
peace”, a statement that says “it will be war again” in no uncertain terms.
Argentina: Meilán sets it out
Daniel Meilán is Argentina’s Secretary of Mining Daniel Meilán, working under the Minister of
Energy and Mining Juan José Aranguren. As Aranguren is basically a hydrocarbons man (e.g. he
was formerly CEO of Shell Argentina) Meilán, who is a hard rock mining man and used to be
sub-secretary of mining in the Carlos Men_m* government in the 1990’s, now carries a lot of
political and industrial heft when the subject is mining as we know it.
Last week he gave a speech to a select audience (but plenty of reporters in attendance (13)
(14)) with all his mining team sitting on the platform with him in a show of unity. We can
reasonably assume his message was a dress rehearsal for the presentation he’ll give at PDAC
next month, so its contents will mark your cards and give an idea of the type of expectation
he’s going to try to raise for mining in Argentina. His main points:
• The 5% retention on mining exports imposed by the previous CFK government, coupled
with the forex capping policy, killed foreign investment in mining during the Cristina
years. Both those are now gone. Meilán said that “no country levies an export tax on
mining now” the policy was a “distortive tax” and had to go, which is why Macri has got
rid of it so quickly.
• He noted that in 1990, mining production and exports for Argentina were valued at
around U$550m. He didn’t mention the current figure (2015 is expected to come in at
around U$13Bn, with 20% of that from non-metallic mining products), but a large part
of his speech was the ministry’s vision for the 2016–2025 period when, according to
Meilán, the objective is to have U$25Bn in production and exports from mining.
• Meilán is looking to get spending on mining exploration projects to U$400m per year.
He says there are currently 435 project concessions active in Argentina, of which there
are between 20 and 25 “certain possibles” for projects that can become operating
mines in the near future.
• He noted that the general “public disinterest” in mining in Argentina has allowed
“radical anti-mining environmentalists” (his phrases, not mine) to take over the debate.
• One of the objectives of the current government will be (quote translated), “...to
maintain macro and sector policies that allow investment sustainability”. He also wants
to see better distribution of mining profits (presumably to locally affected communities)
and “apply systems to improve fiscal income” and to “optimize the institutional
environmental management”. Nice phrases, I’m sure.
And that sums up Señor Meilán’s position, coming to a PDAC near you soon. Expect those who
don’t understand the intricacies of the Argentina mining sector and those who think that the
national position is more important than any given region’s position to throw a plethora of
“value” trading ideas your way in March. It’s how the world works, unfortunately.
*It’s bad luck to spell that person’s name out.
Peru: Short update on the election
I’m in two minds as to whether this needs to be covered closely, because on the one hand it’s
arguably the biggest political event South of the Darien Gap this year and it’s also in a n
important country for mining activity in the region. On the other, once you strip away the
political baggage all the main five candidates are running on the same type of centre-right
political and economic platform, the degrees of difference only matter to Peruvians an FDI
won’t be concerned about who eventually wins between Keiko Fujimori, Julio Guzmán, Pedro
18

Pablo Kuczynski, César Acuña or Alan García (that’s the current poll order too, by the way).
That said, it’s worth noting today that the outsider and big surprise in the campaign, Julio
Guzmán, got a ruling against his candidature by Peru’s election people, the JNE (see last week
for a little more detail on this particular pantomime), but they’ve also apparently given him a
chance to repair the technicality-style wrongdoings in his pre-election processes and once he’s
filed the necessary paperwork with the bureau, we should find out in the next couple of days
whether he’s eligible to stand for election. It’s still in doubt, but from what I’ve read and
understood he’s likely to be given the green light. Meanwhile Guzmán has consolidated his
second place in the polls (behind clear leader Keiko) and a new poll out this weekend (14a)
puts Keiko on 30%, Guzmán on 18% and third place PPK a long way back on 9%. The other
story from this weekend’s poll is that Keiko (45%) and Guzmán (43%) are in a technical dead
heat for the second round run-off.
It’s been a volatile election season in Peru so far and with just 48 days to go before the first
round vote (April 10th) there’s a lot that’s likely to be packed into this compressed campaign
period. However, I am duty bound to admit that the US Presidential election campaign this year
is more compelling and wilder than anything I’ve ever seen in South America over the last 17
years of living down here (and I’ve been eyewitness to elections in Argentina, too), a comment
which applies to the DEM and GOP sides of the show. Just when you thought that politics
couldn’t get dumbed down any further...
Market Watching
Stocks currently under consideration as new trades
I’ve made several allusions and hints to current DD on potential new trades recently, some
have been open and named the names, but others on the cryptic side. On reflection this
weekend I think that to be unfair, so to lay all cards on the table these are the companies that
I’m currently considering as potential buys.
PLEASE NOTE THAT THE LIST IS NOT ALL-INCLUSIVE. For one thing I reserve the right to
spring a surprise on you (and on myself) if a new name comes up. For another, I have never
pretended to cover every nook and cranny of the (junior) mining sector and there are some
names that I pass on that are just as reasonable as my subjective targets (for one, look at how
Kaminak has done recently below). Finally and most importantly, just because I’m considering
the name doesn’t mean I’m going to buy it. All you’re getting in this list is my current shortlist,
be clear that the system at The IKN Weekly is about what I do with my money (not yours),
Alamaden Minerals (AMM.to): But you already knew that. I like the Ixtaca gold project,
it has a chance of becoming a real gold mine, although it’s not the biggest thing out there
either and there are still some question marks over community risk. The company has enough
tick-over cash to get through 2016 and the people behind it, Poliquins pere et fils, have enough
good standing in the mining sector to be able to attract more working capital if they see fit.
It closed at C$1.07 on Friday and that’s simply too expensive, I’m looking for value in my
exploreco and this one has already run too far too fast. I’ve talked about a 70c entry point on a
couple of occasions and that’s still my best fit, but if gold remains higher I’d considering buying
a little above that number. But not this much. One for consideration if it pulls back after PDAC.
Cordoba Minerals (CDB.v): But you already knew that. I like the Friedland factor, I like
that it has plenty of real newsflow in the pipeline for 2016, drill results and all that. I still don’t
like the copper space and prefer to see real signs of a turn, not just the round of wishful
thinking we’re getting for the rah-rah merchants right now. Also, political and community risk is
an issue. At Friday’s 19c finish it’s bumping its head on the recent ceiling price of 20c-or-so, but
even that would look cheap if it can deliver.
19

Buenaventura (BVN): But you already knew that. The attraction here is the leverage of
market cap to gold ounces produced, plus the way in which the market is reading BVN’s debt
position badly, thinking that the company faces existential risk (it doesn’t). What I don’t like is
its sketchy attitude towards community relations (that has recently blown up in its face on more
than one occasion) and the minimal chance of BVN ever being a serious M&A target, no matter
how cheap it looks next to peers, because of the was the Benavides family Class A voting
shares keep the company firmly under its control and whim.
Ivanhoe Mines (IVN.to): But you may have already worked that out. What you need to like
more than I is copper, because although IVN has other metals in its universe, particularly a very
rich zinc deposit, its fate will undoubtedly be decided by the movements in the copper price.
The other thing you need to like (and I’ll say it here, I’m never going to be fully comfortable) is
exposure to the Democratic Republic of Congo, because when the subject is political risk DRC
makes small Central American states look like Switzerland.
But there’s plenty to like here too, and that’s the constant trade-off between pros and cons we
all need to consider. In this case we’ve covered the massive (no other word) copper projects in
the IVN portfolio previously in our ‘Copper Basket’ coverage (e.g. see IKN346 end year 2015
and the intro to the new basket members). Then there’s the high profile of Robert Friedland, he
and all his pals will be urging you into his deeply discounted projects during PDAC week, let
there be no doubt. And yes, IVN is at a deep discount these days, I’m not worried about
whether I can buy at 50c 60c or 80c, because if copper takes off all those prices become
doubles for the brave backer.
Sandstorm Gold (SAND) (SSL.to): Yes, this one is new to the shopping list. It’s new to me
too this week and the process started when SAND provided its Assets Update news release on
Wednesday 17th February (15) which I opened, tried to read with my normal cynical eye but
after a while it occurred to me that this wasn’t anywhere near as risky as it was a few quarters
ago when Luna Gold was decimating its value, when Serra Pelada was still a recent and painful
memory, when True Gold at Karma had less certainty of a first pour about it.
So Wednesday I stopped opinionating on the stock and started working, running the Excel (it’s
not a difficult company to analyze, just a sum of parts exercise) and considering SAND on its
2016 prospects, rather than previous years’ baggage. The conclusion surprised even me, SAND
looks cheap all of a sudden and is very well placed to benefit from any further upside in gold. At
this weekend’s U$360m market cap, it’s precious metals and diamonds streams/royalties
provide plenty of net income, the pipeline looks stronger, it then becomes a question of what
type of multiple you think SAND might deserve and that’s what’s holding me back today. That
and timing, because late February is a time to sell rather than buy. This is now a definite
shortlist for new precious metals exposure come the post-PDAC period that I have mentally
slated as the next moment for purchases.
Lundin Gold (LUG.to): Yes, also new. Here’s an example of a stock I was firmly against as an
investment option, but over time I’ve found my attitude thawing (aka there’s no problem about
saying “I was wrong”, especially if I change my mind the right way). In the case of LUG the
main issue has never been the quality of the Fruta del Norte project, more the high political risk
it runs at both a national (it’s Ecuador folks) and local community level. I’ll make no bones
about it, I’ve been impressed in the way LUG has gone about its political and community
relations work. Where we stand today, LUG has (the equivalent of) a binding heads of
agreement with the government of Ecuador and the next stage is to deliver the feasibility study,
officially move from “exploration” to “operation” in the eyes of the government (a move due
this Northern summer), raise the cash and build the mine.
It’s that last point about raising cash that has me hesistent: That LUG will raise the money is a
near-given (just check that corporate title, that’s one deep-pocketed family we’re talking about
here), it’s on what terms. I’m warming to the idea of taking a bit of a risk and diving in before
we know the details of the cape package but I’m still feeling a bit whussy and, the way LUG has
20

been pegged at CAD$4-or-about on low volumes ever since the company IPO smacks of a
manipulated stock which that could be trading artificially high for strategic reasons.
Correcting my dumb mistake on Dalradian Resources (DNA.to) last week
Okay, now to clear-up the stupid error that made it
into my piece on Dalradian (DNA.to) last week, as
mentioned in the Flash update Thursday (see
Appendix 1). The only excuse I have is that I threw it
in as an afterthought, once I’d chosen the DNA corp
presentation table to accompany the notes, because I
thought a bit of extra oomph to the numerical
argument from a different angle would be a good
idea. But event that’s a hellishly weak excuse, I have
no good defence, it was plain wrong and that’s the
bottom line.
Here’s the point: I wrote this in IKN353;
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.
That, ladies and gentlemen, is plain wrong because it doesn’t “invest U$440m and get
U$504m”. It invests U$440m and gets (de facto) U$753m because NPV already takes the capex
cost into account. The way I presented the case last Sunday in IKN353 meant that capex was
being double-charged on the overall mine economics, the NPV.
However, even with that major math error corrected I’m not changing my call on DNA.to and I
still think it’s going to continue to be capped by the CAD$1.04 warrant overhang, at least until
the end of 2016 and the arrival of the feasibility study. That was this bit in the piece last
week...
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.
..and neither does it negate my personal view found at the end of the note, that, “...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”. Therefore I continue to be a potential seller if DNA dings
CAD$1.00 in the days ahead, but be clear that I’m not in a rush to sell either, only if the current
February window gives me the opportunity that I desire.
Lithium in Chile: Where the big boys go
Not fake scams in Clayton Valley, here’s where the real lithium action is and will happen. Since
President Bachelet announced a few weeks ago that lithium would become a strategic mineral
and subject to separate growth plans during her government, the interest in the metal in Chile
(and its continued stratospheric price rises on the world market, with battery-grade Lithium
Carbonate now apparently fetching up to U$28,000/tonne) has gone mainstream.
Last week we had a new round of news with, depending on which report you read (here are
two as examples (16) (17)), between six and nine foreign companies having already made
formal approaches to Chile’s Ministry of Energy and Mines as regards lithium concessions,
exploration, development and even production plans, with two of those inquiries including full
scale presentations on planned development and production. The names of companies haven’t
21

been officially released but reporters have already identified a few of the companies looking to
move into the Chilean lithium sector and they’re some of the biggest in the world, including
South Korea’s POSCO, Australia’s Talison, Japanese lithium specialist Li Energy and a company
from the United States called Tesla, a name that’s probably familiar to you already.
I’ve made this point before and I’ll make it again, when it comes to lithium Chile is the number
one world producer but more importantly, when it comes to the growth potential of lithium
production Chile is also number one. It has the permitting procedure down pat, the
infrastructure is there, the country is very miner-friendly in both fiscal and judicial terms and
the scalability of its Li sector means it will ramp up faster than any other region in the world
(and that includes Clayton Valley, an area play promotion scam par excellence).
Pretium (PVG) underperforms
Our revels now are ended. These our actors,
As I foretold you, were all spirits and
Are melted into air, into thin air:
And, like the baseless fabric of this vision,
The cloud-capp'd towers, the gorgeous palaces,
The solemn temples, the great globe itself,
Yea, all which it inherit, shall dissolve
And, like this insubstantial pageant faded,
Leave not a rack behind. We are such stuff
As dreams are made on, and our little life
Is rounded with a sleep.
Prospero, The Tempest, Act 4 Sc 1
Last Wednesday February 17th, the NR from Pretium (PVG) (PVG.to) (18) covered a lot of
ground already covered, noted that it now estimates the Loonie deval to have saved the
company around U$50m from its estimated capex bill (unsurprisingly, that’s the piece of info all
the sellsiders jumped on) and then only much later on revealed the only piece of material news
in the NR, that its COO had resigned. It also has the look of a sudden and fractious resignation,
because there had been no warning of the departure, the resignation is immediate and PVG
couldn’t find it in themselves to give the usual “thanks for great service” line that normally
accompanies such events. And yes, all that was relayed on the blog at the time (19) but in
a...errr... slightly snarkier way ☺. Related to this, I couldn’t help but smile my sardonic smile
when I saw Canada’s sellside brokerages either ignore or explain away the news of ex-COO
James Currie’s departure, with this from Scotia Daily Scoop my favourite:
Should We Be Concerned About the COO Departure? No. Also of note in the release,
PVG also reported that COO James Currie has left the company to pursue other
interests. Martyn Creaney is now acting as Project Advisor (Mr. Creaney is Senior
Project Advisor for OGC's Haile project construction). Scotia Mining Sales noting that
this could have been a major blow to PVG if this was 4-5 years ago, BUT NOT IN
TODAY’S MARKET. There is ample talent out there if PVG needs to draw on it given
that not too many mines are really being built right now. After a conversation with PVG
senior management this morning, the company has full confidence in Martyn
Creaney’s ability to manage Brucejack’s development – after all, he has an impressive
resumé (see below). As such, we were put at ease after our discussion – especially as
the current PVG construction team remains unchanged. PVG’s focus remains
squarely on Brucejack’s construction – notably the schedule and budget, and
everything continues to be tracking well and PVG doesn’t expect things to change with
Mr. Currie’s departure. Keep in mind as well that when the mill’s start turning for PVG
in 2017, this is a single-asset company so a VP Ops will likely suffice over a full-
fledged COO. With PVG in the construction period, they feel like they have plenty of
time before this becomes a concern, however.
I read these daily mailers of wonder and brightsidedness just to keep a handle on the spin
these houses put on matters, highly amusing. The question that begs to be asked is obvious: If
it’s so easy to get good talent, why did good talent just walk out the door at PVG? You don’t
throw away a plum industry job just because you’re bored with the cold in northern B.C.
However and to PVG’s credit I must agree with the opinions voiced about his semi-replacement
(will build the mine, won’t take the job) Martin Creaney. For example, somebody in the industry
22

whose opinion I trust implicitly told me that in his opinion, Creaney is “..one of the few
construction managers on the planet that knows what he’s doing”. That’s all I need to know
from a source of impeccable calibre.
All the above is a mix of events and conjecture, with a dose of my default position of cynicism
towards anything mining companies do or say. What cannot be denied however is the clear
underperformance of PVG stock in the face of the current sector rally; my, it must hurt if this is
your largest position in the juniors.
And it’s perfectly feasible that it is, what with PVG being arguably Canada’s premier
development project, ultra-high grade, expensive to develop, move forward and get to
operations. It’s the one run by so-called A-Team management (Quartermain etc) and with
Chinese money on board already, it’s getting plenty of attention from the wider world of gold.
It’s also the project that was the centre of the big spat between two of the big consultancy
companies out there in miningworld, Strathcona and Snowden. If you recall, Strathcona
resigned from the project (20) because it couldn’t get comfortable with the resource/reserve
numbers used by Snowden (not re-hashing it all, but spat revolved around the nugget effect of
thin but ultra-high grade veins and the use or non-use of a top cut), since then the project has
moved onto Feasibility Study level and public chatter about the dispute has all-but disappeared.
But the rocks are the same rocks, they don’t change so easily. So if you ask me, PVG’s
problems, which include the sudden departure of a COO who spent a lot of time looking at
Brucejack and an as-yet unresolved argument about who’s model is best, may be behind it all.
Kaminak (KAM.v): Trading like it’s about to be bought tomorrow
Out of all the stocks on my radar that I follow price-wise without owning, the one that
impressed me the most last week was
Kaminak (KAM.v). Consider this chart of
the last six months of KAM.v compared
to GDX and GDXJ (you’ll notice how
much I’ve used those benchmarks today,
as relative performance has become
important again), which shows how KAM
tracked the benchmarks to the end of
2015, then enjoyed a burst of buying
early in January (my guess is that this
“Beaty Play” was subject to early year
bets by some astute players who saw
further) which protected it from the
worst of the mid-January meltdown.
But then February came the the real
23

volume action began to crank up in KAM.v, culminating in last Thursday and Friday which saw
the market happy to take any ask price offered. This ten day chart below gives more detail on
the last two days and how KAM suddenly shot off into the stratosphere:
With the LSG/TAHO deal still fresh in people’s minds and KAM with its Coffee project
progressing well and considered one of the better exploration stage development projects out
there, what the market is signalling is that KAM is about to find a new owner. However be
clear, these are only my observations as a casual onlooker, I’m not an owner of KAM and at
these prices, I’m not planning to become one either. Do with this what you will.
Conclusion
IKN354 is done, we end with bullet points:
• Own B2Gold, it’s going higher.
• Get ready for the big “love me please!” push from various South American nations at
PDAC, all fighting for your wonderful dollars up there.
• Starcore (SAM.to) deserves to be where it is price-wise, but the thing with small
companies is that the risk is ever-present. Don’t even think about making this your
biggest position but, if you’re into calculated risks with potentially strong upside, it
could be for you. I’m a holder but not an adder at today’s levels, a 30c bargain would
get me buying more.
• Now you know my current shopping list. Were you surprised to see Sandstorm (SSL.to)
(SAND) there? I sure as hell was.
• Another long edition. I keep meaning to cut back on the word count for a few weeks,
but we’re now living in interesting times.
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
24

Footnotes, appendices, references, disclaimer
(1) http://www.tocqueville.com/insights/paper-gold-utopia-alchemists
(2) http://www.barrons.com/article_email/an-acute-shortage-in-gold-can-boost-prices-1452805246-
lMyQjA1MTI2MjEyNjAxOTYxWj
(3) http://finance.yahoo.com/news/starcore-produces-4-543-equivalent-163808594.html
(4) http://ceo.ca/2016/02/16/rick-rule-selling-mistakes-into-gold-rally/
(5) http://finance.yahoo.com/news/western-copper-gold-provides-casino-125500654.html
(6) http://yukonprospectors.ca/Wordpress/?p=2311
(7) http://www.marketwired.com/press-release/ngex-closes-8-million-private-placement-tsx-ngq-2098495.htm
(8) http://www.goodreads.com/quotes/180469-he---and-if-there-is-a-god-i-am
(9) http://www.mineria.gob.ec/pdac-2016-ecuador-se-promociona-como-nuevo-destino-minero-en-latinoamerica/
(10) http://www.bnn.ca/Video/player.aspx?vid=812448
(11) http://www.minuto30.com/ultiman-detalles-de-nueva-politica-de-mineria-en-colombia/440797/
(12) http://elcomercio.pe/mundo/latinoamerica/santos-farc-se-agoto-tiempo-terminar-negociaciones-noticia-
1880437?ref=portada_home
(13) http://www.diariodecuyo.com.ar/home/new_noticia.php?noticia_id=704112
(14) http://www.elpatagonico.com/daniel-meilan-presento-la-politica-minera-2016-2025-n1471323
(14a) http://elcomercio.pe/politica/elecciones/empate-tecnico-entre-keiko-y-guzman-eventual-segunda-vuelta-noticia-
1880648
(15) http://finance.yahoo.com/news/sandstorm-gold-provides-asset-updates-151200765.html
(16) http://www.latercera.com/noticia/negocios/2016/02/655-668999-9-al-menos-seis-firmas-han-expresado-interes-por-
explotar-litio-en-chile.shtml
(17) http://www.biobiochile.cl/2016/02/19/nuevas-empresas-interesadas-en-al-extraccion-de-litio-en-chile.shtml
(18) http://finance.yahoo.com/news/pretium-resources-inc-updated-construction-100000445.html
(19) http://incakolanews.blogspot.pe/2016/02/pretivm-pvg-pvgto-forgot-to-thank-its.html
(20) http://business.financialpost.com/news/mining/pretium-shares-plunge-30-5-as-independent-consultant-resigns
Appendix 1: Flash update dated Thursday February 18th 2016
Good Thursday evening, just after 8pm local time. An update on portfolio moves and a couple of comments.
Today I sold the rest of my New Gold (NGD). The 4q15 financials came out very close to IKN Weekly expectations, in
both style and substance. The gold pop today made the exit easy and profitable. My average sale price, after selling the
other half last week, is U$2.96. A happy near-term trade, optimum result, I wish those staying in NGD the best of
fortune.
Today I also sold my Atacama Pacific (ATM.v), a trade that ended up turning into an unlikely but welcome double.
I notice Teranga (TGZ.to) closed at 60c this evening. If it makes a further move up tomorrow I may well sell this position,
too.
Dalradian (DNA.to): This has been bugging me all week and I'll take a line to mention it here: I made a stupid basic
math error in my Dalradian piece last weekend in IKN353. Some of you have pointed it out to me (fastest was you, VC),
I've pointed it out to a couple of you, I'm sure that others didn't comment on my crass error of counting capex twice in
the NPV calculation out of sheer politeness. I'll make a full correction on that this weekend, it doesn't change my attitude
towards the stock (much) though.
B2Gold (BTO.to) (BTG) looks great from here. Strong hold.
And regarding the gold move today, you'll note from the above that I've been a seller of positions and moving some
more into cash. As I noted to a couple of industry friends this afternoon, with regard to the gold price in the near term i'm
sticking to my scenario of "upside down world". I believe that the longer the Fed remains ostensibly hawkish, the longer
the market will oppose the view. Result 1 of that is a weaker dollar (which we saw in force today, result 2 is a fear-driven
move into gold (on positive beta to the dollar as well). When Janet and her friends begins the clear "no more rises"
jawbone (and they will) I think the gold rally will top out as the dollar stops diving. This is all near-term perspective, as
medium and long term I'm still a full gold bull. Bottom line: at the moment, hawkish is good for gold, dovish is bad. It's a
weird world.
What I'd like to do is hold all the freed-up cash until after PDAC, but sadly I know myself too well and I'm the archetype
of Oscar Wilde's quote "I can resist anything except temptation". There ares stocks that are tempting me in again, but
no decisions until the relative calm of the weekend.
25

In other news, after trading out of ATM.v and NGD today I took my girls to see 'Zootopia', which we all enjoyed. Another
good family film from the Disney factory, recommended for all ages. I liked the wolves.
Until Sunday and IKN354. 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
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
26

Bellhaven BHV.v jun'13 C$0.065 03-jun-13 C$0.12 84.6% closed ST trade
B2Gold BTO.to aug'13 C$3.07 28-nov-12 C$3.44 12.1% sold 1/2 to raise cash
Colossus Min. CSI.to aug'13 C$0.72 24-jul-13 C$0.79 9.7% closed thru nerves on future
Pretium Res PVG.to aug'13 C$8.20 11-jun-13 C$10.14 23.7% closed to raise cash
Bear Creek BCM.v sep'13 C$2.06 30-may-13 C$2.20 6.8% sold on pol risk decision
MAG Silver MVG oct'13 U$7.00 12-sep-13 U$5.62 19.6% near-term short
Gold Res Corp GORO oct'13 U$9.52 03-may-13 U$4.98 47.7% short tgt made, covered
AQM Copper AQM.v oct'13 C$0.31 16-oct-11 C$0.125 -59.7% closed failed trade
First Majestic AG nov'13 U$11.51 07-nov-13 U$10.50 8.8% v near term short, closed
Fortuna Silver FSM nov'13 U$4.00 07-nov-13 U$3.68 8.0% v near term short, closed
Primero PPP nov'13 U$5.70 07-nov-13 U$5.75 -0.9% v near term short, closed
Starcore Intl SAM.to nov'13 C$0.235 08-sep-13 C$0.17 -27.7% ST trade didn't work, sm loss
B2Gold BTO.to dec'13 C$2.22 28-nov-12 C$2.16 -2.7% closed ST trade to raise cash
Stocks To Follow Closed Positions, 2012
Closed in 2012 closed close PPS
Soltoro SOL.v jan'12 C$0.87 07-nov-11 C$0.94 8.0% cash moved to BCM.v
Gold-Ore Res GOZ.to feb'12 C$0.84 13-oct-10 C$0.98 16.7% trade closed on ELG.v offer
Minefinders MFN feb'12 U$11.68 17-nov-11 U$14.80 26.7% target made, trade closed
Iron Creek IRN.v mar'12 C$0.58 26-sep-10 C$0.31 -46.6% time up on small bad trade
U.S. Silver USA.to apr'12 C$2.18 15-mar-12 C$1.86 -14.7% ST trade no good, cut loss
Augusta Res. AZC.to may'12 C$3.10 29-jan-12 C$2.07 -33.2% bad mkt, bad trade cut loss
Bellhaven BHV.v may'12 C$0.50 22-sep-10 C$0.28 -44.0% new mgmt not impressive
Zincore Metals ZNC.to may'12 C$0.325 29-jul-11 C$0.17 -47.7% bad mkt, bad trade cut loss
Soltoro SOL.v may'12 C$0.70 18-mar-11 C$0.41 -41.4% bad mkt, bad trade cut loss
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% fail ST trade close pre split
Estrella Gold EST.v aug'12 C$0.91 27-mar-11 C$0.14 -84.6% Closed on port realignment
Fortuna Silver FVI.to sep'12 C$1.07 03-may-09 C$5.32 397.2% sell call $6.17/ Mar25
Strait Minerals SRD.v oct'12 C$0.125 09-dec-11 C$0.12 -4.0% closing coverage til FY13
Sunward Res SWD.to oct'12 C$1.47 13-mar-11 C$1.21 -17.7% sold, took loss
Gold Res Corp GORO oct'12 U$21.47 09-sep-12 U$17.40 19.0% Short trade closed
Yellowhead Min. YMI.to nov'12 C$1.00 01-apr-12 C$0.63 -37.0% sold, took loss
Primero Mining PPP nov'12 U$7.26 07-oct-12 U$6.73 7.3% Short trade closed
Bear Creek Min. BCM.v nov'12 C$3.38 07-nov-11 C$3.72 10.1% Took small profit
Vena Resources VEM.to dec'12 C$0.70 31-may-09 C$0.18 -74.3% Failed trade (caps F)
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
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Regulus Res. REG.v dec'11 C$1.17 14-aug-11 C$0.52 -55.6% cut on news of poor 43-101
2009 and 2010 closed positions in appendices below
Stocks To Follow Closed Positions, 2010
Closed in 2010 closed close PPS
B2Gold Corp BTO.to Jan'10 C$0.88 08-nov-09 C$1.49 68.2% target made, trade closed
Radius Gold RDU.v Jan'10 C$0.18 23-aug-09 C$0.40 122.2% target made, trade closed
MAG Silver MVG mar'10 U$5.60 23-nov-09 U$7.28 30.0% closed in pdac week
Riverside Res RRI.v mar'10 C$0.435 20-sep-09 C$0.60 37.9% closed in pdac week
Amarillo Gold AGC.v mar'10 C$0.81 31-may-09 C$0.70 -13.6% closed in pdac week
B2Gold Corp BTO.to apr'10 C$1.24 18-feb-10 C$1.50 21.0% target made, trade closed
Lumina Copper LCC.v apr'10 C$0.84 14-jun-09 C$1.55 51.2% total position now sold
Troy Resources TRY.to may'10 C$1.10 03-may-09 C$2.25 104.5% sold on negative results
AuEx Ventures XAU.to may'10 C$2.51 24-may-09 C$3.38 34.7% trade closed
Nevada Copper NCU.to jun'10 C$3.27 14-mar-10 C$2.03 -37.9% need to lower Cu exposure
Carpathian Gold CPN.to jun'10 C$0.39 14-mar-10 C$0.35 -10.3% too exposed to cap raising
Amerix PM Corp APM.v jun'10 C$0.065 08-nov-09 C$0.05 -23.1% victim of macro bear
Antares Minerals ANM.v jun'10 C$1.42 06-dec-09 C$2.10 47.9% sold half
Vena Resources VEM.to jun'10 C$0.37 31-may-09 C$0.23 -37.8% sold half
Minera Andes MAI.to sep'10 C$0.75 28-jul-10 C$0.95 26.7% ST trade closed
Gold-Ore Res GOZ.to sep'10 C$0.52 01-aug-10 C$0.75 44.2% target made, trade closed
B2Gold Corp BTO.to sep'10 C$1.45 25-may-10 C$2.01 34.5% target made, trade closed
Blue Sky Uran BSK.v oct'10 C$0.41 19-may-10 C$0.22 -46.3% v small v bad trade closed
Dia Bras Expl DIB.v oct'10 C$0.14 30-aug-09 C$0.35 150.0% target made, trade closed
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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