IKN #355Premium

The IKN Weekly
Week 355, February 28th 2016
Contents
This Week: In today’s issue, Possible small purchase, Chart complaint, I fought the law and
the law won (Fighting the Fed redux).
Fundamental Analysis: NOBS report on Sandstorm Gold (SSL.to) (SAND).
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, Cordoba Minerals (CDB.v), Western Copper & Gold (WRN.to),
Ivanhoe Mines (IVN.to), HudBay (HBM.to) Capstone (CS.to).
Low Cost Producer Basket: Overview, Goldcorp (GG), Sibanye Gold (SBGL).
Regional Politics: Buenaventura (BVN) at San Gabriel is turning into “Tia Maria Two”,
Argentina: Vale wants to sell its Rio Colorado potash project, Colombia: The FARC peace talks
now expected to overrun the deadline, Dominican Republic: Set on developing its mining
industry, Peru: Polls again point to Keiko versus Guzmán.
Market Watching: On your author’s obvious tendency to sell too early, Belo Sun (BSX.to):
Locals protest against Volta Grande, Regarding Canasil Resources (CLZ.v) Orex Minerals (REX.v)
and the Sandra Escobar discovery in Durango Mexico, Pretium (PVG) raises cash and
underperforms even further, Nevada Sunrise (NEV.v): A Clayton Valley area play with
something to offer.
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
• Gold price vs Fed Funds = gold doesn’t have much higher to go on this move
• Sandstorm Gold (SAND) (SSL.to) has gone from outcast to interesting
• I’m tempted to dip my toe in the lithium brine pool
• The copper space has become fascinating and I’m expecting some kind of sign for the
fate of the metal in 2016 in the next couple of weeks. I’m still on the sidelines as things
stand today, though
• My stars Goldcorp’s quarter was a mess
Possible small purchase
A standard heads-up: I may buy a few Nevada Sunrise (NEV.v) in the week ahead, a small
speculative play on the latest lithium fashion rush. As noted in the ‘Market Watching’ section
covering the stock, even if I do buy some I’m not sure whether it will become a member of the
‘Stocks to Follow’ list. Whatever happens, this will be a small position. Read below for more.
Chart complaint
Several of you complained that the forex charts at the top of last week’s edition were difficult to
see, blurry, lack of contrast etc. That almost certainly means that many of you had the same
1

problem. Apologies, point taken, I’ll do better and won’t make the same mistake again.
I fought the law and the law won (Fighting the Fed redux)
Breakin' rocks in the hot sun
I fought the law and the law won
I needed money 'cause I had none
I fought the law and the law won
The Clash, ‘I Fought The Law’, 1977
In IKN352 dated February 7th the main intro section, “Fighting the Fed” we set out the case for
a ceiling on the current gold move. There were more points made at the time but by way of a
reminder, here’s a section at the end of the note:
Gold’s appreciation on the Fear Trade will last as long as the Fed says nothing about the
change in direction which it will first jawbone, then announce formally. There is no way in
the world that Janet ignores shouts of “One more raise and the market crashes” because
the Fed never ignores these things, ever.
• The new jawbone will come.
• Then the subtle change of wording in a Fed presser will come.
• Then the policy will be formalized.
• Same as it ever was.
It’s why the microphone is given to the Doves and the Hawks in turn, it’s the reason Gary
Tanashian over at Biiwii/NFTRH refers to it as the Kabuki Theater. When it does, the fear
will subside and you’ll get those annoying “gold losing its lustre” headlines in the semi-
comatose bizpress channels.
How long do we have for this gold ride? I don’t know, I’m guessing we get a few more
weeks of bullish attitude towards the metal 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 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.
That was the beginning(ish) of the month, here we are at the end and here’s a 2016 year-to-
date chart of the gold bullion ETF (GLD) to see
how things are going:
So yes, we saw North of U$1,200/oz and well
North in fact, we touched U$1,260 intraday on
the big hoopla Feb 11th day when Wall St.
Decided it had to own some shiny stuff. The
move has been good and welcome, the miner
stocks have benefitted greatly (for evidence,
look no further than our very own ‘Low Cost
Producer Basket’ below) but it has to be said
loud and clear, we haven’t seen gold move off
into the stratosphere.
On the other hand, my call was about a more gentle move and as noted in IKN353 (and 354 a
bit), the violence of the gold pop caught me out. I’m not claiming to have called this move per
se no way José, what I’m framing here is that gold hasn’t moved off into the “inevitable”
U$1,450/oz “battle zone” as calmly predicted by the goldbug brigade.
Why should that be so? At this point I’d like to give a big shout-out and recommendation to
Mike Churchill, owner of Churchill Research out of VA USA (1). He runs his own fund (a mix of
his own money and client money) and this isn’t a pitch for his services as he’s doing very well
all by himself and hardly begging new sponsors, but it is a pitch for his mailers that have always
been good, but have switched up gears to excellent in 2016 as Mike muses on the broad
2

market volatility. He’s been insightful on gold too (not his primary point, but part of the mix).
By way of full disclosure Mike is also a friend of mine since my days in Argentina, we worked
together there. I’ve always admired the way he thinks outside the box and though sometimes
his ideas come off half-baked, other times he strong right-wing leanings show through (yup, in
somethings we’re very different), when he’s on form and digging deep into a subject his brain
shines through and it’s pure pleasure to read his work. And he’s damned good at money, too.
To the point: In his Friday mailer he offered up this chart of gold bullion price versus Fed Funds
as reason to suppose that gold isn’t going much higher in the near-term.
As Mike Churchill wrote in his accompanying note to that chart and while commenting on gold’s
recent rise, “...it’s more a function of the market dictating to the Fed that its four-hikes-in-2016
path was untenable. The chart of gold vs. Fed Funds shows both rising sharply beginning in
early January. They now have rolled over together, so unless something gets actively worse in
the real economy (we’ll see), gold would appear topped out for now”. This was also the point
behind IKN352 and “don’t fight the Fed”, but put in a better and more succinct way (and with
an excellent visual back-up). Fed Funds and gold are saying the same thing right here and right
now: The Fed has indeed got the message from the market (as forecast in IKN352), it has
started the dovish jawbone (ditto), it will begin to make the U-Turn official in as graceful a
manner as it can because, as noted in IKN352, the Fed is always behind the curve because
that’s part of its essence. It’s not an entity that dictates economic policy, it always has been and
always will be an entity that responds to market economics.
I’ve been raising cash in February (and please see the note “Regarding your author’s obvious
tendency of selling too early” in ‘Market Watching’ below for some extra thoughts on that
subject, I do not claim perfection) because although I’m not expecting gold to reverse and go
under U$1,100/oz again, I do think there’s a limit to the current near-term move and as a
result, I want a war chest of cash to buy cheaper precious metals mining stocks later on (I’ve
pencilled in ‘late March’ so far, let’s see how that goes). The above may therefore appeal to my
own bias confirmation and let that be a warning, my theory could still be wrong. However,
seeing Fed Funds and gold act in very similar ways is my idea of a big clue that I’m on the right
track. I won’t fight the Fed.
Fundamental Analysis of Mining Stocks
This week we look at Sandstorm Gold (SAND) (SSL.to).
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NOBS report dated February 28th, 2016
Sandstorm Gold Ltd. (SAND) (SSL.to)
Company Overview
Sandstorm Gold Ltd. (Canada: SSL.to, USA: SAND, Frankfurt AYS1.f) is a precious metals
streaming and royalty company, with exposure to operations in the The Americas and Africa. It
has several streams and royalties that provide current income plus a pipeline of potential
revenue generating streams and royalties. Current share structure is as follows:
Shares out: 136.68m
Options & Restr.Shares: 7.42m
Warrants: 28.0m
Fully diluted shares: 173.1m
Current share price: U$2.85
Market Cap: U$389.54m
Approx working cap per S/O: $0.31
All prices are in US Dollars unless stated. Forex U$0.80=CAD$1
Today's SAND analysis
I’ve been beating myself up on how to present today’s piece for the last few days and I’ve
decided to go the route you see below for these basic reasons:
• I know you out there get bored wading through the dozen-page fundies notes with tons
of numbers. Because you’ve told me and frankly, I don’t blame you.
• I’m not a buyer of SAND yet, not this week at least. This company is one of those
mentioned on my shortlist of last week and as it’s a new addition to the prospects, the
reasons behind my interest need to be expanded upon here, at least to some extent. As
my best current guess is that we see a sector retrace in March, that’s when I’ll be
fishing for an entry price.Get that wrong and I may pay up compared to this weekend’s
U$2.85 but that will be my strategic mistake, nothing to do with SAND the company.
• I’m relatively new to the deeper details of this company and as a result, I want to make
this first analysis not much more than a ‘first pass’. It takes (me?) time to get a close
handle on a company and I’m also interested to see how the SAND 4q15 and year-end
numbers come in. Also in the case of this royalty holder with over a hundred different
potential new sources of income (mostly via held NSRs) it takes time to fully understand
which of the royalties held aren’t worth diddlysquat (e.g. the 1.5% NSR it holds on
Rubicon’s Slate Lake...not gonna happen folks) and the ones that could turn out to be
real gems (e.g. the 2% NSR on Hot Maden). Therefore I’m not playing it cute and
although I’ve done plenty of digging on the stock, I’m not going to pretend to be the
world expert on it from the first analysis, life isn’t like that.
• The current window to buy SAND for the first time has plenty of appeal. The mining
market tide seems to be turning and equally as important, the corporate culture inside
SAND seems to be improving with better, more “serious” deals the norm these days
instead of a risk culture deals of yore.
With the general arm-waving strategy in place, here come some numbers and words.
4

Company and management overview
SAND is a pretty well-known company so I’m not going to bore you too much with the general
stuff, but to at least tip our hat to a real analysis piece here’s the front page blurb that SAND
gives you on its website:
Sandstorm Gold Ltd. is a gold streaming and royalty company. Sandstorm provides
upfront financing to gold mining companies that are looking for capital and in return,
receives the right to a percentage of the gold produced from a mine, for the life of the
mine. Sandstorm has acquired a portfolio of 132 streams and royalties, of which 19 of
the underlying mines are producing. Sandstorm plans to grow and diversify its low
cost production profile through the acquisition of additional gold streams and
royalties.
That just about covers the basics. As for management, president CEO and chair is Nolan
Watson, who co-founded SAND (with fellow director David Awram) after both left that other
streamer/royalty winner, Silver
Wheaton (SLW). At SLW
Watson was CFO and Awram
was VP investor relations and
the idea was, pretty clearly, to
copy the winning formula
they’d hit upon at SLW and
build their own empire. For
the first few years everything
went swimmingly and SAND
enjoyed the mining market
boom time to the full. Then
things went nasty on them.
For sure the sector downturn
didn’t help SAND one little bit,
but its slide down from $12
and $14 to today’s sub-$3
share price, but if you
compare SAND’s last few years to that of stream sector leader Franco Nevada, it becomes
evident that it’s not just the market that’s to blame.
I stood at the sidelines and watched SAND all these years (and many of them in disdain and
sniping at the company on the blog with ironic posts) because I considered their corporate
decisions to be a joke. The blame for those lies with Nolan and Awram and I’m never likely to
know for sure, but I think they just got carried away with the easy success period and thought
they were better at this mining game than they were. The Nolan Awram duo were directly
responsible for the company’s two biggest disasters, namely the investments in Colossus
Minerals (ex-CSI) and Luna Gold (LGC.to, still going but only just) and their guilt wouldn’t have
been so bad if it had been an invest-fail-walk-away story. The problem was that in both cases
SAND decided to throw good money after bad, even when things were evidently wrong at the
projects, and as a result lost the company a lot more money than they should have lost.
Is that what happens when you put an investor relations guy and a CFO in charge of technical
due diligence of mining projects and operations? As I say, I don’t know and probably never will,
but SAND in the 2012 to early 2015 period went from one bad strategic move to another.
But recently things seem to have changed at SAND and I think it’s because they got a real
geologist in to decide on projects. Again I don’t know for sure, but the timing of the arrival of
Keith Laskowski (2) to SAND (officially early 2015, in fact very late 2014) and the change in
tone of the company is unlikely to be a coincidence. A Masters degree geologist with an
extensive CV, since coming on board SAND has stopped throwing money down pits such as
LGC and ex-CSI, renegotiated its deal with Luna Gold to potentially salvage something from
that trainwreck in the long-term, stopped bailing out Metanor by quietly buying its equities in
placement and has closed on solid stream and royalty deals, such as the Diavik diamonds
5

royalty and the company’s biggest deal to date, the $152m Yamana (AUY) (YRI.to) silver and
copper streaming deal in late 2015.
These are a few examples, we could cite the Gold Royalties Corp purchase or the most recent
deal with Teck (that gets the 2% NSR on Hot Maden inside the company along with a whole
suite of other NSRs) as others. The bottom line is that there seems to be a welcome change in
attitude at SAND and the company has stopped playing fast and loose with its liquid assets,
stopped trying to hit one out the park with risk-laden deals and has changed the corporate
attitude over to ‘serious’. All this is good.
Okay, I’ve made my condensed point on this score, time to move on and consider what SAND
has by way of assets.
Main streams and royalties at SAND
As noted above, this company holds 132 different streaming deals and royalties of all shapes
and sizes, so you’re not getting a rundown on each one today. You’re not even going to get
words on each of the assets that are revenue generators (18 of those), because what I really
care about are the main assets at SAND, the ones that make up the lion’s share of revenues.
There are seven of those and these are the reasons to like SAND today, more than any of its
future potential streams or NSRs. They’re also the reason I can get over my previous hatred for
the stock and its dumb deals in LGC and ex-CSI, because they’re more than enough to justify
current share prices.
The biogs and estimates charts here are necessarily brief, they’re also a distillation of a whole
mountain of figures, models and best-guesses on your author’s Excel machine. As noted above,
I’m trying to cover the broadstrokes of SAND today, not trying for perfection in modelling from
day one.
Yamana silver stream. This is (nearly) one half of the deal SAND struck with AUY late last
year, and is a deal on silver from AUY’s Cerro Moro
mine (which is due to start producing in 2019) with a AUY Ag deal ($m)
deal that covers 2016 to 2018 from a couple of 16
other AUY mines while Cerro Moro is built. SAND 14
pays 30% of spot and if things go according to plan, 12
10
should get 300k oz Ag between 2016 and 2018,
8
then 1.2m oz Ag from then on.
6
4
Here right is a chart with my estimate on the NET
2
annual revenue from this stream for SAND (i.e.
0
gross revenues minus payments to AUY), using
2016 2017 2018 2019 2020 2021 2022
$15/oz silver for 2016 and $16/oz silver for the
following years.
Yamana copper stream. This is (nearly) the other
AUY Cu deal ($m)
half of the deal SAND struck with AUY late last
10
year, and is a deal on copper from its Chapada 9
mine in Brazil. It should supply 3.9m lbs copper to 8
7
SAND, who pay 30% of spot price
6
5
Here right is a chart with my estimate on the NET 4
annual revenue from this stream for SAND (i.e. 3
2
gross revenues minus payments to AUY), using
1
$2.10/lb Cu for 2016, $2.25/lc Cu for 2017 and 0
$2,50/lb for the following years. 2016 2017 2018 2019 2020 2021 2022
Diavik Diamond royalty. This is the exception to my list of seven the only royalty deal at SAND
that’s large enough to be separate (the others get lumped under “other royalty”) later). Last year
SAND took advantage of IAMGOLD’s financial woes and bought its 1% royalty of the Diavik
mine (Canada’s largest diamond mine, run by Rio Tinto). It generated revenues of $8.2m for
6

IAMGOLD in 2014 and I’m modelling it to generate a flat $8m for SAND in the years to come.
For what it’s worth, I’ve converted that into a slightly weird AuEq for modelling purposes, but it
works okay (the AuEq on $8m drops as my assumption of higher gold prices per year kicks in).
Primero Black Fox gold stream: In this deal, SAND gets to buy 8% of the gold produced at
Primero’s (P.to) (PPP) Black Fox mine for
$1518/oz. This isn’t a great mine operation and PPP Black Fox Au ($m)
PPP has its own corporate troubles, but the mine 6
5.5
should continue to churn out its metal and I see 5
no reason why this one should run into trouble 4.5
4
just because Primero hasn’t paid its Mexico taxes 3.5
3
or Black Fox was a bad purchase.
2.5
2
1.5
Here right is a chart with my estimate on the NET 1
annual revenue from this stream for SAND (i.e. 0.5
0
gross revenues minus payments to PPP), using
2016 2017 2018 2019 2020 2021 2022
$1,200/oz Au for 2016, $1,250/oz Au for 2017
and $1,300/oz for the following years.
First Majestic Santa Elena gold stream: In this deal, SAND gets to buy 20% of the gold
produced at First Majestic’s newest acquisition,
the Santa Elena mine in Mexico (mostly silver, FR.to Santa Elena Au ($m)
gold kicker), paying $357/oz until 50,000 oz is 10
delivered on the stream, thereafter $450/oz 9
8
(should be 2018). This is a very solid looking 7
stream and should provide decent, long-term 6
revenues to SAND. 5
4
3
Here right is a chart with my estimate on the NET 2
annual revenue from this stream for SAND (i.e. 1
0
gross revenues minus payments to FR.to), again
2016 2017 2018 2019 2020 2021 2022
using $1,200/oz Au for 2016, $1,250/oz Au for
2017 and $1,300/oz for the following years.
Metanor Bachelor Lake gold stream: In this deal, SAND gets to buy 20% of the gold
produced at the perennially horrible Metanor’s Bachelor Lake mine for $500/oz.
This stream isn’t without its risks, as Metanor has been a painfully poor company over the years
and basically keeps itself afloat by financing via very dilutive equity placements. It’s also roped
SAND into buying its shares on previous occasions, presumably because without the cash the
company would go under and SAND loses its
stream...Ouroboros-type mining economics. My
MTO Bachelor Lake Au ($m)
best guess is that, even with the rotten quarter
6
MTO has just reported, it will be able to continue 5.5
5
operations and if so SAND will be fine. But if
4.5
things turn bad SAND could lose this line of 4
3.5
revenue. It’s the riskiest of the current revenue 3
ines, that’s for sure, but I’d rather have my 2.5
2
exposure to Bachelor Lake via this SAND stream 1.5
1
than via MTO’s abjectly awful shares.
0.5
0
But assuming things go on, here right is a chart 2016 2017 2018 2019 2020 2021 2022
with my estimate on the NET annual revenue from
this stream for SAND (i.e. gross revenues minus
payments to MTO.v), again using $1,200/oz Au for 2016, $1,250/oz Au for 2017 and $1,300/oz
for the following years.
True Gold Karma gold stream: This is set to be SAND’s newest source of significant revenue,
as deliveries begin as of 2q16. In this deal, SAND gets to buy 5,000oz gold per year from
Karma for the first five years of production, then 1.625% for the rest of the mine life (which is set
7

at a short 8.5 years at the moment, but TGM.v should be able to extend that greatly as long as
it’s allowed to expand its local footprint). SAND pays 20% of spot for its gold.
TGM has pulled Karma out of a tight political risk
TGM Karma Au ($m)
spot in 2015 and done well to get to the cusp of
6
production. I think this will be a good producer (no 5.5
5
matter that the shares are currently way 4.5
overpriced). From looking iffy, this stream is 4
3.5
turning into a good asset for SAND. 3
2.5
2
Here right is a chart with my estimate on the NET 1.5
1
annual revenue from this stream for SAND (i.e.
0.5
gross revenues minus payments to TGM.v), again 0
using $1,200/oz Au for 2016, $1,250/oz Au for 2016 2017 2018 2019 2020 2021 2022
2017 and $1,300/oz for the following years. You
see how the revenues are set to drop off once the
guaranteed 5k oz Au are delivered, but that might change if TGM expands and ups production.
We’ll see on that, for the moment we go the safe route.
Putting those all together
Here’s how those seven main revenue lines add up in gold equivalent terms (I’m using to-gold
ratios of 80:1 and then 75/1 for silver, 595/1 and then 550/1 for copper, then a straight division
of revenue cash for Diavik) over the next four years:
SAND: Est. AuEq from main producing streams (plus Diavik royalty)
Au/AuEq
60000
TGM Karma Au (oz)
50000
MTO Bachelor L. Au (oz)
40000
FR.to Santa Elena Au (oz)
30000 PPP Black Fox Au (oz)
Diavik est AuEq
20000
AUY Cu in AuEq (oz)
10000 AUY Ag in AuEq (oz)
0
2016 2017 2018 2019 source: SAND data, IKN ests
I’ve included 2019 in this chart because it shows just how much SAND will benefit from the
Yamana silver stream as from that year onwards, it really puts some oomph in the AuEq count.
Here right is another chart of the same Sandstorm: Gold and Gold Eq deliveries from current
dataset (though out to 2022) which Au/AuEq production streams (+Diavik royalty), per annum
breaks down deliveries (plus Diavik 60000
Total non Au in AuEq
royalty cash) into pure gold and non-gold
50000 Total gold
in AuEq. As you can see, the non-gold
parts of SAND are going to become 40000
more important as the years go by. 30000
20000
The final chart here below is a best
guess on NET revenues (including 10000
payments to stream ounces/pounds)
0
from the streams (plus Diavik) and the
2016 2017 2018 2019 2020 2021 2022
“other royalties” which I haven’t dived source: SAND data, IKN calcs
into today and won’t do, either (there’s a
whole bunch of little nits and pieces, check the SAND MD&A at your leisure).
8

SAND: Estimated net revenues from current production streams,
U$m
70 plus Diavik, plus other royalties, per annum
60 other royalties (ex-Diavik)
Net revs from sales
50
40
30
20
10
0
2016 2017 2018 2019 2020 2021 2022
source: SAND data, IKN calcs
Using my reasonable gold price assumptions ($1.2k rising through to $1.3k, plus the other
metals all as mentioned above) the NET revenues peak out at $59m in 2019. From that of
course you have to discount the normal corporate expenses (G&A, exploration, tax, interest
servicing) but it’s fair to say that it’s the type of “operating” revenue that’s good for strong cash
flow and eventual profits.
Financials overview
We’ll start this section with a look at the balance sheet items, but instead of concentrating on
the P+L afterwards as per normal, the emphasis is going to be on a couple of items from the
statement of cash flows. Like all other royalty and streaming companies SAND isn’t your normal
sort of corporate entity and homing in on things like net profits give a distorted view of what it is
and what it does. The key to understanding SAND is to consider its cash generating capacity,
not necessarily its bottom line.
Balance sheet items
We start with assets and liabilities, with assets that look like this:
SAND: Assets
fixed
$m other current
600 cash
550
500
450
400
350
2 3 5 0 0 0 278.142 284.031 339.87 349.909 338.1 382.667 359.413 357.8 508 516
200
1 1 0 5 0 0 2.625 5.304 4.793 4.328 2.746 4.171 4.933 3.862 4 5
50 98.936 110.964 111.387 91.131 90.224
0 38.316 51.598 46.508 42 47
4q13 1q14 2q14 3q14 4q14 1q15 2q15 3q15 4q15est 1q16est
source: SAND filings
Starting with the assets, it’s clear that the majority of the net worth of SAND will always be in the
things it owns. But it also keeps its liquidity levels correct, with the 4q15 raising that provided
$28.8m in gross proceeds an example of how SAND maintains treasury. The recent hikes ion
fixed assets correspond firstly to the Yamana stream deal in November and then to the most
recent $22m deal for the Teck suite of royalties in January. My estimates are as above, we wait
to see exactly how SAND books those new additions.
Here below is the liabilities chart:
9

SAND: Debt Breakdown per qtr
120
110
100
90
80
70
60
50
40
30
20
10
0
10
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4 tse61q1
source: company filings
srallod
fo
snoillim
LT debt
current debt
This is an obviously important charts, as there’s been a big change round these parts recently.
That’s because SAND finally tapped its revolving loan facility (first set up in 2012) in order to
pay for the Yamana stream deal (and in fact it made the $100m revolver into a $110m to do so).
The revolving loan runs at LIBOR + 4.25% (i.e. not too expensive and matures in the middle of
2019, which gives SAND in effect four years to pay it down. What we need to know is whether
the company is capable of doing just that because if it’s bitten off more than it can chew on this
financial loan, the share price may suffer in the same way that many, many other mining
companies with debt loads have done recently. My answer to that question comes below.
To round off, as current liabilities are small and cash is the major part of its current assets,
treasury and working capital are very similar to each other.
SAND: Cash treasury per qtr
120
110
100
90
80
70
60
50
40
30
20
10
0
So SAND has plenty of assets, but it’s just taken on a big financial liability. The question is
whether that was wise. Read on.
Cash flows and income
Now for the departure from our usual service and it’s been kind of tough for me to find a method
to frame this correctly in a condensed (ha ha, sorry, it got long again) note, but here comes the
attempt.
If we look at the net income numbers posted by SAND over the quarters (below), they’re not
really that impressive. They also get hits from impairments (e.g. 2q15, a big one) that distort
things somewhat, though I’d be the first to concede that SAND has needed to take write downs
and impairments on some of its investments because in previous years some of the things they
bought into were horrid. However, that’s also the type of bad deal that gets factored into the
market share price before it makes it to the company financials (a point for another day,
perhaps).
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4 tse61q1
source: company filings/IKN ests
srallod
fo
snoillim
120 SAND: Working Capital per qtr
110
100
90
80
70
60
50
40
30
20
10
0
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4 tse61q1
source company filings/IKN ests
srallod
fo
snoillim

SAND: Net Income
$m
5
0
-5
-10
-15
1q14 2q14 3q14 4q14 1q15 2q15 3q15
source: company filings
What really matters at this company isn’t the depletion of assets of third party companies it has
streaming deals with, nor is it the non-cash items they weigh on the P+L but don’t affect
treasury. To focus on that we could use non-GAAP parameters such as “income before
changes in non-cash working capital, but as Bart Simpson and I agree on that funnymath way of
doing things (3) I’m not going there. But if we eschew the P+L and go to the Statement of Cash
Flows, there is a set of GAAP compliant figures we can use that shows the cash generation
capacities of SAND, that’s what you see in this next chart:
$m SAND: Net income vs "generated cash"
25
net income
20 items not affecting cash
difference (i.e. cash generated)
15
10
5
0
-5
source: SAND filings
-10
-15
1q14 2q14 3q14 4q14 1q15 2q15 3q15
1) First we take the net reported profit of SAND (the same dataset in the previous chart.
2) We then subtract the “items not affecting cash” as seen in the Statement of Cash Flows
3) We’re then left with the difference, which is a fair, though by no means exact,
approximation of the amount of real operating income and cash generated by SAND
each quarter. That’s the green bars above and this next chart below isolates those for
easy viewing:
SAND: unofficial "generated cash" per quarter
$m
12
10
8
6
4
2
0
1q14 2q14 3q14 4q14 1q15 2q15 3q15
source: company filings, IKN calcs
11

As you can see, SAND’s cash generation abilities as a company are pretty smooth and regular.
By backing out depletions, impairments (those two are the big ones) and other bits and
pieces,SAND is your actual “we earn
$8m a quarter” company, corporate SAND: unofficial "generated cash" per quarter
expenses included. We can also 14
project out and see how the current 12
revenue streams and royalties are 10
expected to generate quarterly cash 8
flow. Here’s that chart: 6
4
If gold stays at $1,200/oz for 2016
2
we’re expecting the $8m quarters to
0
continue, but as the new revenue lines
arrive things get stronger and TGM is
aiming towards cash generation of
around $12m per quarter once the
Yamana silver stream is in full gear.
And for what it’s worth, the projection of cash generation between 1q16 and end 2q19, when
that $110m revolving loan matures, is $130.4m. More than enough to pay its dues.
Bottom line to the financials: I have issues with Nolan (and Awram) for their project selection
capacities, but when it comes to the financials side of SAND this is a carefully run ship. The
balance sheet is strong even after activating that revolver, there’s plenty of cash flowing into the
company to service its debt (and probably pay it down early), liquidity (for any opportune deal?)
is well managed, it’s a well run set of books. I’d wager that SAND waited a long time for the right
type of deal in order to use its debt facility and when the Yamana opportunity showed, it was a
chance too good to miss (with excellent market timing, too).
Discussion and conclusion
I’m not a buyer of SAND today or next week because, as stated, I’m looking for a cheaper
window in the next few weeks (late March/early April?), but what I wanted to do is get the
legwork on the stock and its story out of the way today, so that come the time I can crunch
numbers, show projections based on different gold (and metal) prices, consider the upside the
stock can have if things go well.
There are two main objective today. First is to state that since the arrival of Laskowski SAND
has changed in its aspect, for my taste at least, and has stopped messing around with risky
deals like Colossus and isn’t throwing money down any Aurizona drains any longer. These days
it’s looking “serious” and the book of streams and royalties it has today are long-lasting
(something we haven’t touched) and mostly very solid cash generators. The second item is to
note that the company’s financials are still very solid even after that big debt draw and it won’t
have any problem servicing its revolving credit facility from cash flow.
Even though 50k oz gold production per year might not sound like much to you to cover a near-
$400m market cap, streaming companies can command higher multiples than your actual miner
because a) margins are strong on each ounce and they’re baked into the business model too,
b) the assets tend to be long-term revenue generators c) there’s less that can go wrong, the
execution risk (aside from full chapter 11 collapse) is with the client company. What we do have
here, exemplified by the main revenue generator assets we’ve concentrated on today, is an
improved quality level inside SAND and that’s coming at the right time.
If and when my cunning plan works out and the gold price decides to take its breather, the
weekend I decide to buy some (cheaper?) SAND will be the day when I do the
numbercrunching on forecasts and so forth, give up a target price, make that buy call. Today’s
has covered the background to a company that until recently I’ve never liked much, but its lower
share price, solid financials and improvement in held assets have made me change my
mind.SAND is a solid member of my shortlist for future purchase.
End of Report
12
41q1 41q2 41q3 41q4 51q1 51q2 51q3 tse51q4 tse61q1 tse61q2 tse61q3 tse61q4 tse71q1 tse71q2 tse71q3 tse71q4 tse81q1 tse81q2 tse81q3 tse81q4 tse91q1 tse91q2 tse91q3 tse91q4
$m
source: company filings, IKN calcs

Stocks to Follow
Of the nine open positions in the IKN Weekly ‘Stocks to Follow’ list, just two managed to eke
out a win last week (DNA.to, REG.v) and the other seven lost ground (BTO.to, BTG trading
position, TGZ.to, SAM.to, SSP.v, LRA.v, FCV.v) but as a silver lining, apart from the 11.4% loss
in Starcore the losers weren’t that heavy and it all smacked of a round of consolidation after the
very decent weeks that came before. One decent percentage winner to report, with Regulus
Resources (REG.v) up 12.5%. With the main gold bullion ETF (GLD) down 0.4% on the week,
the list put in the type of performance that isn’t great but is perfectly acceptable.
We currently have just nine open positions on our positions ‘Stocks to Follow’ list, six below our
self-imposed maximum of 15. But I have cash ☺. Same as last week, five of the stocks are in
the green, four are in the red (and two of those deep in the red).
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$1.45 -31.3% Suddenly looks v cheap
Metals Producers (in current order of preference)
B2Gold BTG STR Buy U$0.85 13-jan-16 U$1.08 27.1% separate trade tranche
Teranga Gold TGZ.to hold/sell C$0.54 15-feb-15 C$0.56 3.7% added a few, will exit soon(ish)
Starcore Intl SAM.to spec buy C$0.48 10-jan-15 C$0.39 -18.8% 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$0.31 59.0% Risk play, 30c tgt hit, holding
Lara Expl. LRA.v spec buy C$1.15 08-apr-12 C$0.365 -68.3% 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$0.89 32.8% 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$0.36 20.0% 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.
Teranga Gold (TGZ.to) (TGZ.ax): Still selling at “something over 60c”. And darnit, I
nearly pulled the trigger again last week when TGZ traded at 60c and 60.5c, but didn’t. More
fool me. In the end sellers appeared in front of me and the stock finished a penny down on the
week, hardly the most popular gold name out there.
In other and more interesting news, TGZ reported its year-end numbers last week which I
summed up in two words on the blog at the time, “in line”. It took an impairment that made the
bottom line 20c/share EPS look heavy, but back that out and the adjusted EPS was Zero, a
breakeven quarter which is admitted a couple of million less than I was looking for on my
model, but the TGZ Q4 was never going to light up the world anyway. Breakeven is acceptable.
I’d do a whole lot more charts and things if I weren’t looking to sell soon, but my plan is
already laid out and if 60c comes. I’ll take it. That will be more likely a function of the gold price
than any thing internal to TGZ, though 1q16 is looking better and we can expect lower costs
this year. If I change my mind and decide to keep TGZ in the portfolio I’ll publish more on the
13

numbers, but that’s unlikely as I’ve been dicked around by this management team one time too
many and don’t trust them enough any longer.
Dalradian Resources (DNA.to): In trading, DNA popped up and down the 8-handle during
the week and closed a penny higher. No great shakes and we’re not threatening my $1.00
selling target yet, either. Meanwhile news from the Emerald Isle and my thanks to reader ‘R’ for
passing along this report (4) from Ireland’s agricultural website “Farming Life” last weekend,
which documents the “fury” of local farming communities towards Dalradian’s Curraghinalt
project. Here’s how the report begins:
Saturday 20 February 2016
Rural communities in the Greencastle area of Co Tyrone are up in arms at plans by a
Canadian company – Dalradian Gold Ltd – to extract gold from a 200 acre site in the
region.
According to Bernie Fox, vice chair of the recently established GRG Concerned
Community Group - representing families and farmers in the Greencastle, Rousky and
Gortin areas, the operation will entail the use of Cyanide in the extraction process.
“Dalradian only confirmed this state of affairs three weeks ago, as they sought to
secure full planning permission for the project.
“If allowed, this will result in the creation of a toxic dump on our doorsteps. The land
purchased by Dalradian lies close to a number of rivers and watercourses. All it would
take is a single accident to blight one of the most picturesque areas of Co Tyrone for
ever
“The site purchased by Dalradian is directly adjacent to an area of outstanding natural
beauty.”
Mr Fox confirmed that all of the residents in the area are totally opposed to the
Dalradian project.
“We want it stopped. There is a level of fear, anger and tension never before
experienced in this community, where many have said they would leave this area if this
goes ahead. The threat to our farming community and their livelihoods, is very real.”
“The Company has confirmed that it intends to use cyanide at its processing plant to
separate the gold from ore. As Minister of Agriculture I share the concerns of local
residents regarding the potential negative impact that this process will have on
farmers, rural dwellers and our environment.”
Further down the report, we get a response from DNA which includes the quote from their
spokesperson that, “Proactive consultation will continue over the next few months after which a
final design will be presented to the community in the summer of 2016”, and that the planning
application is to be submitted in the autumn.
And therein lies the rub. We, the longs of DNA with a specific price target and no big desire to
sponsor this Curraghinalt project all the way through to production, shouldn’t have a problem
with the local “fury” because there’s going to be a lid on that until the permit applications start,
the townhall meeting happen, the fears of locals can be addressed by the company with facts
and technical data at its fingertips, etc etc. Also, the locals can grumble in the media, but until
the meeting season begins we’re highly unlikely to get organized photo-op protests, roadblocks
and other matters. That’s as from this summer, the EIA permit track with the meetings, begins
this autumn after the feasibility study is delivered, by then I will be long gone with my profit
banked. Finally, as a UK citizen with an ear for such things, I can assure you that any
newspaper that uses the word “fury” in a headline is giving you a thinly disguised op-ed, rather
than a balanced picture. Therefore when reading “all of the residents in the area are totally opposed
to the Dalradian project”, please translate as “some of the residents in the area are probably opposed to
the Dalradian project”.
Sandspring Resources (SSP.v): Still holding, but I can’t help but wonder how dumb that
may turn out to be. After all SSP has hit my 30c target and has also been subject to a round of
Vancouver promo pumping, so if it’s going to move up now it’s going to happen during PDAC or
not at all. I may sell this after all, but give me a couple of weeks to decide and watch a while
longer. It’s not looking anywhere near as cheap as it was that’s for sure, plus the ballpark 43-
101 capex bill for the eventual mine is at the expensive end for this size of production potential.
14

B2Gold (BTO.to) (BTG): Waiting for Godot. The truth will out in the end and the truth is that
BTO continues to be dirt cheap next to peers. Banging on the table, bang bang bang. The hold-
up in stock price appreciation looks to me more corporate strategic than fundamentals-based,
with the world and his wife waiting for The Clive to announce some some of financing deal and
as we’ve seen from recent examples Pretium and Kinross, those come with an immediate
flattening of stock prices. The market seems to be second-guessing the company on the
announcement for the capex it needs to build Fekola.
But fret not, I get the strong feeling that the financing, if and when announced, will be at far
friendlier terms than the ones agreed to by Robert Quartermain at PVG (for just one example).
I will get my U$1.30 on the trading chunk and then the long-term position will continue to
benefit as 2016 unfurls.
Starcore Intl (SAM.to): The thing to like about SAM was on Wednesday, when the stock
traded 121k shares on apparent new interest in ownership and closed at 46c. The thing to
dislike about SAM was Thursday and Friday, when it gave up 7c of price on just 42k shares
traded. This is symptomatic of the issue I’ve been harking on about around this stock in the last
few weeks, all through the move from under 30c to 44c last weekend; it’s been on thin volume
so if all of a sudden one holder needs to sell, they’re going to take a crappy bid offer that
knocks the PPS right back down again.
I wrote last week that SAM.to can easily justify its current share price on straight fundamentals
(then 44c, but pick 29c or 46c and I’ll still agree) but until it trades in a more liquid manner it’s
going to be very trappy to trade. Also as noted in recent weeks I’d add if given the chance to
do so at a cheap entry point (30c, maybe up to 35c under these new gold price circumstances)
but there’s no point in fresh money chasing an ask and paying too much. Of course I’d like to
see the share price higher (it’s why I’m long) but it needs to get there by creating its own
catalysts. And that’s operations, not thin trade action.
Lara Exploration (LRA.v): Rumours coming down the line that LRA is close to optioning out
at least one of its Peru projects, which would be a positive sign for this project generator (it’s
the corporate model to do such deals after all) and one that would bode well for more deals as
the market for exploration assets thaws. Perhaps something announced around PDAC time.
Focus Ventures (FCV.v): Monday March 7th is “Peru Day” at PDAC, with the Canada-Peru
Chamber of Commerce sponsoring a full day of presentations and activities in a dedicated
meeting room at the Toronto bash. Check out the agenda on this English language page (5)
and the casual observer of Peru mining affairs will see that many of the bigwig names in the
sector (business side and politics side) are due to make an appearance, but tucked in among
the presentations I notice this one:
PHOSPHATES: Fosfatos del Pacífico: Isac Burstein, VP Corporate
Development – Hochschild Mining
For one thing, Burstein is one of the top dogs at HOC.L. For another the ‘Fosfatos del Pacifico’
(aka ‘Fospac’) project sits right next door to Focus and its Bayovar12 project. It also enjoys very
similar project geology and economic parameters. If FCV.v is on its toes it will be able to make
decent capital from this part of the official ‘Peru Day’ event.
Regulus Resources (REG.v): Apart from being the best performing stock on the list
percentage-wise last week, the thing that catches the eye is that it actually traded with a bit of
volume for a darned change. Nothing ABX or FCX sized of course, but at least it opened for
trading on every day and even managed to do over 143k on Monday alone. Good to see.
John Black has been in Peru all week meeting with the great and the good and I managed to
catch up with him this weekend. He gave me an hour of his time and we went into a lot of the
details of what REG.v is doing up at its Flagship Antakori project in Cajamarca, Peru. What I
15

can’t tell you is about 95% of the conversation, because we agreed to talk off-record so that he
could go freely into those details. There’s nothing cloak and dagger about that and much of the
stuff is about intricate community negotiations and agreements that aren’t so very interesting
on the printed page anyway. What I can tell you is:
• REG is active on a grass roots level at the project, it’s not like nothing is being done up
there.
• They’re keen to be as transparent with the various communities and land smallholders
in the area as possible, which is all about making clear and open offers and closing
deals that everyone agrees with. This avoids jealousies and “he got more than me”
type comments later down the line. However, it takes time.
• The market slump has in fact helped REG in this aspect, as the pressure’s been off to
“Do something” as regards formal exploration and development work (form people like
us the shareholders) and the local communities, as feeling the pinch from the mining
downturn, are more willing to negotiate at reasonable rates (fo all sorts of things, from
4x4hire to land access to whatever else).
• On the geological side, the company has used the slack period to re-log the approx
17,000m of core it has stored from previous drilling programs and, in a nutshell, their
working theory about the robust deposit at Antakori has been confirmed by what
they’ve gleaned from the re-log.
• Black is happy about the progress made, although it’s been slower than anticipated. He
was keen to stress that the company burn rate was low and REG has more than
enough by way of funds to keep chugging along until deals get done that will allow the
company to ramp up exploration.
• Meanwhile, they’ve also developed decent working relationships with the neighbouring
mining companies, particularly direct neighbours Gold Fields and Buenaventura (who
operate the working Tantahuatay mine literally next door to Antakori), as well as the
BVN minor partner at Tantahuatay, Southern Copper. The opportunity of working in
collaboration with one or other of those companies has increased.
• From what I heard this weekend, I’m happy enough too and my attitude of “give these
guys time” has been reinforced.
In short, I’m happy about holding through on REG.v, though I’m not expecting any fireworks
from the stock in the near-future.
The Copper Basket
After eight weeks of 2016, The Copper Basket shows a 0.82% gain to level stakes.
company ticker price 1/1/16 Shares out Market Cap current pps gain/loss%
1 HudBay Min. HBM.to 0.35 235.23 891.52 3.79 -28.6%
2 Ivanhoe Mines IVN.to 0.61 778.96 529.69 0.68 11.5%
3 Reservoir Min. RMC.v 4.08 48.46 198.69 4.10 -2.0%
4 Capstone Min. CS.to 0.44 382.04 152.82 0.40 -9.1%
5 NGEx Resources NGQ.to 0.65 187.71 118.26 0.63 -3.1%
6 Copper Mtn CUM.to 0.445 118.8 56.43 0.475 6.7%
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 Western Copper WRN.to 0.38 94.19 45.21 0.48 26.3%
10 Nevada Copper NCU.to 0.66 80.5 42.67 0.53 -19.7%
11 Atico Mining ATY.v 0.28 97.59 30.74 0.315 12.5%
12 Hot Chili Ltd HCH.ax 0.09 420.12 27.73 0.066 -26.7%
13 Amerigo Res ARG.to 0.205 173.61 24.31 0.14 -31.7%
14 Cordoba Min. CDB.v 0.16 79.45 17.48 0.22 37.5%
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 0.82%
16

Wow, what a comeback! The Copper Basket average managed to add over 7% last week and
from being a full 20% down just a month
and days ago, we’re back with an overall
The Copper Basket 2016, weekly evolution
positive position in this tracker. I’m
5%
impressed, but I fear there’s a lot of
optimism now being baked into the copper 0%
space that isn’t really deserved. We’ll see. -5%
-10%
As for the components, eight of our stocks
registered weekly gains (HBM.to, IVN.to, -15%
CS.to, NGQ.to, NCU.to, WRN.to, CDB.v, -20%
RVL.v), three were unchanged (CUU.v, -25% source: IKN calcs
NGQ.to, ARG.to), and the other four were
jan3rd 10th 17th 24th 31st feb7th 14th 21st 28th
losers (RMC.v, CUM.to, HCH.ax, ATY.v). Best
of the wins came from Western Copper & Gold (WRN.to up 41.2%), Revelo Resources (RVL.v
up 27.3%), Capstone Mining (CS.to up 19.4%),
Cordoba Minerals (CDB.v up 15.8%), NGEx Resources
(NGQ.to up 10.5%) and HudBay (HBM.to up 10.2%),
which is an impressive collection of double figure
percentage winners from the large, medium and small
of the list. There were no big losers.
I’m going to highlight the daily chart rather than the
hourly this week, because even here you can see the
pop up on Friday to over U$2.15/lb Cu, but also the
way that price didn’t hold. This wider picture also shows
that copper has had no luck in meaniningful movement
above the $2.15 barrier since its last waterfall drop in
November. If the share price improvements we saw in
stocks such as HBM and CS.to are based on the copper
price, there seems to be an awful lot of optimism being
baked in right now. It’s up to you to decide whether
that optimism is justified, I find it very easy to stay on
the sidelines until there’s more clarity and for once, our
careful weekly tracking of copper warehouse inventories may be just a couple of weeks away
from providing a big clue to the puzzle.
But before we get to the weekly numbers and that clue, as it’s the end of the month we first
check in on the monthly chart trackers.
Copper inventories: percentage held per exchange
80
70
60
50
40
30
20
10
0
The big story here is the one in the left-hand chart, the news we’ve flagged for the last three
weeks that for the first time ever, Shanghai holds the majority of world copper warehouse
inventory. As for overall stocks, they’ve been rising gradually as the Shanghai pop is largely
17
21.naJ bef ram rpa yam nuj luj gua pes tco von ced 31.naJ bef ram rpa yam nuj luj gua pes tco von ced 41.naj bef ram rpa yam nuj luj gua pes tco von ced 51.naj bef ram rpa yam nuj luj gua pes tco von ced 61.naj bef
Copper inventories, per month, 2012 to date
1000000
LME Shanghai Comex source: Cochilco 900000
800000
700000
600000
500000
400000
300000
200000
100000
0
21.naJ bef ram rpa yam nuj luj gua pes tco von ced 31.naJ bef ram rpa yam nuj luj gua pes tco von ced 41.naj bef ram rpa yam nuj luj gua pes tco von ced 51.naj bef ram rpa yam nuj luj gua pes tco von ced 61.naj bef
Mt Cu
LME Shanghai Comex
source: Cochilco

offset by the LME drop. Comex stocks are holding solid at 11.5% of the total, which makes
nearly five months of 10% participation in the overall figure and a segment that’s not to be
ignored these days.
Now for the regular weekly update of copper warehouse inventories, in bullet point form:
• Total world copper stocks in the three official warehouse systems dropped by a
significant amount, down 12,598 metric tonnes (mt) (-2.3%) to finish Friday at
534,590mt.
• Shanghai stocks were virtually unchanged, down just 881 mt (-0.3%) to 276,023mt. So
no follow-through from last week’s post New Year re-stock as yet and though I’m still
expecting my 300k target to be broken, if I’m wrong it may be worth watching as a
decent bullish signal for the metal (and its miners, of course).
• The LME was the big mover on the week and that move was down (yet again). LME
inventories lost 11,300mt (-5.4%) and closed the week at 197,225mt (yup we’re under
200k now). The chart above shows the size of the change in recent months, the shift to
SHFE and away from LME has been impressive.
• The Comex copper warehouse numbers are still treading water. Stocks dropped just
417mt on the week (-0.7%) to 61,342mt this weekend.
Here's the Shanghai-only chart, which shows the stall-out at 276k. Is that it? No more up to
come? We see the shape of the peaks in 2014 and 2015 which have a couple or a few UNCH
weeks then a big drop, so if the next couple of weeks show not extra moving into the SHFe
system, there’s a potential bullish signal for copper longs (or wannabe longs like me).
Shanghai Futures Exchange Warehouse Stocks, 2014-2016
300000
260000
220000
180000
140000
100000
60000
18
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:
Cordoba Mining (CDB.v): Another strong
week for my pick of the tiny copper pick (but
hey, guess which dumbo didn’t buy any of
his own fancy?) and we also saw Robert
Friedland add 2m more shares to his holding,
which brings him that much closer to his
45% standstill number. This ten day chart
shows how CDB spiked as high as 26c on
Monday this week, but despite the new
interest in the stock (see those volume bars)
it couldn’t hold that number.
It’s also worth noting that during February

alone, company CEO Mario Stifano has added 95,500 shares to his own pile at prices between
13.5c and 21c. For sure not the size of Friedland but still a reasonably positive signal from
somebody without the same picket depth as the Ivanhoe guy.
Regarding community and local problems, the company wrote into IKN last week to note that it
hadn’t seen any terrorist action form FARC or ELN in its vicinity for many years, which is just as
well because I didn’t say there had been. My comment on political risk is connected to the
eventual success or otherwise of the peace talks, because if they fall apart the whole Colombia
image will take a big hit. Meanwhile, in this report (6) last week we got to hear about an
investigation by Colombia’s “Legal Medicine” bureau into apparent health problems around the
Cerro Matoso nickel mine. The investigation is to last for the next six months and is in reply to
local populations’ persistent claims that the mine is seriously affecting their health and well-
being. Last week a as well as company CEO Mario Stifano report in the Colombia. As Cerro
Matoso is close to the CDB project zone (roughly 30km), the results of this health report may
have a negative effect on community acceptance of any eventual mine at San Matias and
environs.
Western Copper & Gold (WRN.to): A big move on decent volume, including a 428k trading
day on Friday that saw the stock move up
six cents of the 14c it added over the
week. WRN seems to be getting attention
as one of those “call option on copper”
promotes and that’s fine, there are worse
things out there. This week’s big move
managed to break the share price out of
the recent downtrend, but the last part of
that move could be due to overbuying on
Friday and 50c may turn out to be a
harder nut to crack. However I don’t want
to be too cynical, it was a strong move by
WRN and that’s not a bad thing. Time will
tell whether the move can stick and for
that, I’d suggest that the copper price will
be centre stage.
Ivanhoe Mines (IVN.to): The thing about running a bigtime exploration company with
millionaire budget and development on several big assets at once is that there’s no shortage of
newsflow. We’ve seen Robert Friedland get aggressive on the promotion of IVN already this
year and it’s had a reasonable effect too (from mid 50c share price to upper 60s). We now hear
that Friedland is about to announce a “major development” at the company and, with PDAC just
a week and a day away I’d bet dollars to donuts he’s saved a big promo push for the annual
bunfest (with Rick Rule on hand to give it the pumpo on BNN, which is becoming an annual
tradition for IVN.to no matter how far the share price has dropped in the meantime).
HudBay (HBM.to) and Capstone (CS.to): The poster children for the copper miners’ share
price collapses of early 2016 due to heavy debt load, they’re now the poster children for the
“optimism about copper” and its chance sin 2016. Let’s be clear, copper at $2.10/b or $2.15/lb
will save neither of these stocks from bankruptcy over the longer term (though CS.to has
perhaps a year of “long term” while HudBay can count on perhaps three), so the rises in their
equities are not due to current earnings power. Results from both companies were pretty much
in-line with expectations but what’s interesting to note in both cases is how management put
strong emphasis on how they’d be able to cover their debt obligations, keep inside the covenant
rules, stay liquid etc. What in effect they’re pitching is time, giving themselves the image of
leverage to copper and where the market expects the metal to be in, for example, 2017.
That’s of course the same bunch of market experts who said at this time last year copper would
average over $3/lb in 2015. Just sayin’.
19

Me personally, I’m looking for clues. I’m not against a trade into copper if the signals start
getting into line, but the type of rally seen in HBM has to be based more on hope than reality.
There’s been a lot of love baked into these stocks all of a sudden, only time will tell whether it’s
warranted. I’m staying on the sidelines but I will reiterate, of all the metals sectors at the
moment copper is the one that is most intellectually interesting (as opposed to trade
interesting, for the time being at least). Give it two or three weeks.
The Low Cost Producer Basket
After 8 weeks of 2016, the Low Cost Producer Basket shows a gain of 50.17% 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 15.76 13.53 83.3%
2 Newmont NEM 17.98 529.12 13.41 25.35 41.0%
3 Goldcorp GG 11.56 830.22 11.51 13.86 19.9%
4 Franco Nevada FNV 45.75 176.298 10.45 59.26 29.5%
5 Agnico Eagle AEM 26.28 217.67 7.52 34.55 31.5%
6 Ang/Ashanti AU 7.10 405.27 4.92 12.15 71.1%
7 Detour Gold DGC.to 14.41 170.85 3.60 21.06 46.1%
8 Sibanye Gold SBGL 6.09 228.71 3.09 13.52 122.0%
9 New Gold NGD 2.32 509.16 1.61 3.16 36.2%
10 Buenaventura BVN 4.28 254.19 1.32 5.18 21.0%
Prices in U$/NYSE tickers, except DGC.to (CAD$) Portfolio avg 50.17%
Oh my stars we are whipping the GDX’s butt, but that’s mainly thanks to owning two largely
South Africa Rand stocks in US Dollar
terms, AU and SBGL. At 50.17% up on the The Low Cost Producer Basket: Weekly performance
year after just two months, the average of 60% and comparative to GDX control
our chosen bigger miners has been
50%
extremely impressive and we’re now
40%
14.02% ahead of the GDX benchmark. Nd
30%
yeah, hubris alert going out again because
20%
unlike last year’s list these were put
together in order to try and beat the 10%
benchmark, not just track it. 0%
-10%
As for components, last week brought us
three losers (GG, DGC.to, AEM), one
unchanged stock (BVN to the penny) and
six winners (ABX, NEM, FNV, AU, NGD,
SBGL). Of the winners it’s the SA stocks
Sibanye (SBGL up 14.1%) and AngloGold
Ashanti (AU up 11.7%) that did best, with a
honourable mention to third placed Barrick
(ABX up 7.7%) which has arguably been the
star of the mining show so far in 2016. As for
losers, the biggest by far was Goldcorp (GG
down 10.3%).
Goldcorp (GG) (G.to): Last week’s main
event for our list of stocks was an outright
negative one. Thursday evening saw
Goldcorp release its 4q15 and 2015 year-end financial results and you don’t need me to tell you
what the market thought of the numbers. Take a look at the price chart:
20
dr3naj ht01 ht71 ht42 ts13 ht7bef ht41 ts12 ht82
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 ht82
source: ikn calcs, NYSE/Nasdaq data

Or take a look at any of the anal yses that came out the next morning on the stock, from the
realworld versions to the sellside excuse-brokers. There were many, I featured a typical one
from Credit Suisse on the blog that morning (7) because I liked their “...it will take the market
some time to adjust to GG’s reduced production outlook..” phraseology (so cute), but my
favourite line came from the increasingly obsequious Scotia and their, “Where Do You Buy
Goldcorp? How Much of This Was Already Priced In?” framing of a no-holds-barred disaster
quarter, then answering their own question with “...U$13.95 is a good buy...”. Only time wil tell
on that “good buy” call, for what it’s worth my answer to that first Scotia question is “you
don’t”. Also fwiw I think my call on the GG numbers on the blog that Thursday evening, after
scraping the main events from the company NR (and before getting to the regulatory filings)
(8) was accurate, though irony was part of my take (unsurprising):
• If you take a happy medium, production forecast for 2016 is around 10%
lower than the 2015 booked production
• It's cutting the dividend from 2c per month to 2c per quarter
• It mined 3.4m oz gold in 2015, but in the same period reserves dropped by
8.9m oz.
• It lost a over billion dollars on operations in the fourth quarter.
• It took a $4.9Bn impairment.
But apart from that, great quarter!
However I did miss one of the more interesting pearls in the NR (and the MD&A), as a couple
of regular mailers pointed out quickly. This one:
“At Cochenour (100%-owned), the focus during 2015 was on drilling and development to
increase the level of confidence in the interpretation of the deposit. Initial development in 2015
has shown deviations of the geology and structures from the initial interpretation. As a result,
Cochenour has been removed from future production guidance in the next three years and is
reentering the advanced exploration phase.”
Nobody ever said that Red Lake was easy geology (just ask those who invested in Rubicon) but
this is particularly impressive, as GG has sunk around $2.5Bn into Cochenour to this point and it
was supposed to be in production by last year, not this. Now we’re at least three years further
down the line and that in itself is probably soft soap to stop the impairment taken in this year-
end financial ($1.2m from Cochenour, total impairment $4.9m) from being even larger. As a
source to IKN with intimate knowledge of Cochenour confided, “It will never go into production
under their mining model. The veins are offset by tiny blackline faults makes it very hard to
bulk mine. Kind of like Rubicon only twice as disjointed.”
The final point of interest is that back in December when outgoing CEO Chuck Jeannes
announced incoming CEO David Garofalo (9), the changeover was scheduled for April. It’s now
February 29th (i.e. tomorrow Monday), which makes you wonder whether Jeannes kept the bad
news away from his board in order to broker a top retirement deal and this accelerated
21

departure was symbolic middle finger from an annoyed board to Chuck. And according to that
link chosen above, Garofalo at the time in December was happy because he was inheriting a
miner “that’s running very smoothly” and it was “the world’s most valuable gold miner”. How
times change.
Sibanye Gold (SBGL): The rise and rise of Sibanye continues, with the company reporting
earnings that beat street expectations, then guided strongly for 2016 and as cherry on top,
declaring a 6c dividend (to be precise 0.9 Rand). Basically the opposite of Goldcorp ☺. This
Bloomie piece (10) on the earnings numbers, including the glowing comments from anal yst
desks, is as good a place to pick up on the warm and fuzzy atmosphere for SBGL as anywhere
else, the company can seemingly so no wrong and the weak Rand forex against the USD has
expanded its margins considerably, just as everyone expected.
I could offer you any number of impressive charts to depict the SBGL revival, but I’m going to
keep it topical and mapping SBGL against Goldcorp (GG) over the last 12 months in this one:
The change in fortunes of the two stocks as 2015 turned into 2016 is remarkable.
Regional politics
Buenaventura (BVN) at San Gabriel is turning into “Tia Maria Two”
We covered BVN’s recent travails with the local community at the San Gabriel (ex-Chucapaca)
project in the Southern Moquegua region of Peru in December and early January editions of
The IKN Weekly. At that point I kept comments inside the ‘Low Cost Producer Basket’ section
above but this week it’s moving down here to ‘Regional Politics’, because there’s now more to
this one than just one company’s main gold development project in play.
Firstly, this report from last week (11) notes that BVN is using exactly the same type of “knock
on every door” community outreach approach as Southern Copper has been using in the Tambo
Valley region of coastal Arequipa with the communities directly affected the the Tia Maria
project (which isn’t so very far away from San Gabriela as the crow flies). On paper this
strategy of ‘community outreach’ seems all well and good, but it’s deeply flawed. On paper,
what happens is that teams from the community relations of the mining company go round and
talk to each household in the zone, one by one, if possible sitting down in their houses, to
explain the benefits of the mine project and answer any and all concerns they might have
(pollution, water, all the other classic concerns). So the theory goes, they can put people’s
minds at rest and let them understand the bigger picture so that when the day comes to hold
the social licence meeting, the locals are on their side.
That’s not what happens in practice. For one thing, the community outreach people will explain
the benefits to the mine and ask a loaded question, such as “after all you’ve heard, do you
22

think this project will be good for your community?” and when they get a non-negative answer,
that household is suddenly “in favour of the mine”. That’s then used by the mining company as
evidence they’re loved and wanted by the community, when in fact there’s much more doubt in
the minds of people. For another, this type of grassroots “seek out the individual” strategy runs
against the grain of the way a community such as Ichuña next to San Gabriel is structured.
There are elected community leaders who are given the right and duty to speak as
representative of their people (shades of Ollachea coming up now), so if the mining company
goes behind their backs and talks to the rank and file, they get rather annoyed at the disrespect
being shown to them. And finally, it’s one thing for a member of a community to tentatively
agree that the benefits of a mine project sound good while speaking one-on-one with a trained
team of community relations personnel, quite another when that same local member is in a
meeting with their elected leaders and advised to vote against the project. They will hold their
leaders in higher regard, so when push comes to shove, the mining company will be holding
one set of unofficial figures that don’t tally with the results of a community meeting vote. From
there come accusations of bias, fraud, corruption (from both sides). Hilarity ensues.
Bottom line: This is the wrong way to do community relations and Tia Maria has shown that to
be clear, but the numbskulls who live 30 years in the past in Lima who concoct these plans to
“convince” the rural communities in Peru still don’t understand why that might be. This does
not bode well for the BVN permitting track at San Gabriel.
Meanwhile, this separate report (12) is about the rising opposition to the San Gabriel project,
with local leaders forming associations between the small towns and villages dotted around the
mine project location to stop the project from moving ahead. They’re using several lines of
attack, including fears that the mine will rob the arable land in the area of water supply, the
pollution angle of course, and interestingly they’ve been joined by one Otto Hitto Urquizo, who
is a geologist who can explain to the locals what the San Gabriel mine project will do, but more
to the point he’s the very same geologist from the Tambo Valley who made a name for himself
by pointing out all the weaknesses and deficiencies in the Southern Copper EIA for Tia Maria
and informed the locals on what the project would really mean for the valley. Seeing his name
pop up in the San Gabriel story can’t be any sort of coincidence and it strongly suggests a more
organized opposition that’s using national–scale resources to stop the mine from happening.
You call them NGOs.
In short, what BVN has on its hands is a mess that could become Peru’s next headline anti-mine
story. We’ve had Conga stopped, we’ve had Tia Maria stopped, there have been other projects
put in the freezer too (Galeno, Majaz) using the same type of local pressure tactics. All this
coming in the midst of a national presidential election that also gets to choose its members of
national congress and local authorities.
Argentina: Vale wants to sell its Rio Colorado potash project
Amid all the current Macri-New-Broom Argentina hype and hoop-la for mining, which is bound
to reach a new volume level at PDAC next month, some sobering news. From the Vale earnings
reporting, the news that caught my eye (13) is the company’s stated intention to sell its Rio
Colorado potash project in Mendoza, Argentina. It’s been a burden around Vale’s neck for many
years and the company has been trying to sell the project unofficially for the last four, but we’re
now at the put-up/shut-up point, what with Vale under its own financial pressures from its core
operations in Brazil (and the Samarco disaster, of course). Vale has sunk approximately U$2Bn
into Rio Colorado already and the last time anyone looked seriously, total capex as marked at
U$6Bn, so it would presumably like to re-coup as much of that $2Bn as possible but along with
the notable antipathy for mining activity in the province of Mendoza (not al Argentina provinces
are the same, remember) Vale is also up against the clock, as it has until 2017 to do something
with the project else the concession lapses.
Colombia: The FARC peace talks now expected to overrun the deadline
After last week’s “Santos patience running out with the FARC” piece, that reported on a new
show of impatience from Colombia’s President about delays to the peace talks in Cuba, this
23

week saw diplomacy crank up, gentle but clear intervention from the USA which calmed waters
on both side (remember, Obama has changed “Plan Colombia” to “Peace Colombia” so there’s
political capital at play in the North now, too). The result is a return to pragmatism by President
Santos and a tacit admission by both sides that the March 23rd deadline will overrun. They’re
now talking about June or July for a final deal.
The outcome to the Colombia peace talks is far from certain, much less so than around
Christmas time a couple of months ago when the world applauded the significant
breakthroughs made and Santos went to the Havana Cuba negotiations and had his photo
taken with friend and foe alike, handshakes all round. The IKN advice at this stage is not to
take the success of these talks for granted and if it falls through, political risk in Colombia will
spike up again, blanket-style.
Dominican Republic: Set on developing its mining industry
Last week saw the 7th World Conference for the Extractive Industry Transparency Initiative take
place over two days in Lima Peru (no I didn’t go), which is one of those very important
sounding government/industry pow-wows that makes creates more heat than light. Its 49
member states were last week joined by a 50th, the Dominican Republic, with the new member
capturing a lot of the headlines (14) for the bunfest via its Minister of Energy & Mining, Antonio
Isa Conde, talking up its desire for a clean, responsible and formal mining industry and putting
forward Barrick Pueblo Viejo as its best case.
My cynical take on this type of beano aside, this is another positive step for Dom Rep in its
desire to set up and grow a formal mining sector. As for ways to trade the country, it’s similar
to my attitude towards Nicaragua in that I like the jurisdiction but can’t find a junior with which
I’m comfortable. There are a few out there, notably GoldQuest (GQC.v) which has done well
recently (since Rob McEwen took his chunk) and I’m also keeping half an eye on 10c stock
Precipiate Gold (PRG.v), not least because Eric Coffin is intimately involved in the company (as
a co-founder, director, shareholder and promoter) and I have a higher regard for Coffin than
the vast majority of anal ysts.
Peru: Polls again point to Keiko versus Guzmán
Here’s a smaller version of the chart I put up on the blog last week (15) to report on the CPI
pollster voter intention poll for the Peru
Peru Presidential Election: Voter intention poll
Presidential election, first round April
published Friday 26th February by CPI polling company
10th. 40%
33.7%
35%
The poll confirms Keiko’s solid lead, it 30%
25%
also confirms that the until-recently
20% 18.3%
outsider Julio Guzmán has consolidated
15%
his second place position (at the main 10% 7.3% 6.8% 6.4%
expense of Pedro Pablo Kuczynski and 5%
César Acuña), so those two look like 0%
locks to be the contenders for the big Keiko Julio César PPK Alan García
prize in the second round run-off. Fujimori Guzmán Acuña
source: CPI/El Comercio
Market Watching
On your author’s obvious tendency to sell too early
Rather than the normal focus on trades still open, let’s review the six trades that we’ve closed
here at The IKN Weekly in 2016. Before the real analysis we need to mention Phoscan
Chemicals, which I bought in March 2015 at 28c and sold in January at 26.5c. It needs
mentioning in passing because it’s a closed trade in 2016 but it’s not really a good example, as
this was a left-over trade from 2015 that was looking for a modest win on M&A activity but
when it came (as expected) the management decision as to go for a poor deal (sigh).
24

With that out the way, let’s get to the real business and the other five closed trade in 2016:
1) True Gold (TGM.v): Bought 18c, sold 25c, pre-commissions profit
38.9%.
This weekend TGM.v is priced at 37.5c. If I’d held onto my shares, the pre-
commissions profit would be 108.3%.
2) McEwen Mining (MUX): Bought U$1.09, sold U$1.20, pre-commissions
profit 10.1%.
This weekend MUX is priced at U$1.82. If I’d held onto my shares, the pre-
commissions profit would be 67.0%.
3) Lake Shore Gold (LSG.to): Bought C$1.10 (avg over several purchases),
sold C$1.69, pre-commissions profit 53.6%.
This weekend LSG is priced at C$1.76. If I’d held onto my shares, the pre-
commissions profit would be 60.0%.
4) Atacama Pacific (ATM.v): Bought 19c, sold 40c, pre-commissions profit
110.5%.
This weekend ATM.v is priced at 35c. If I’d held onto my shares, the pre-
commissions profit would be 94.4%. However, it was at 45c earlier this week.
5) New Gold (NGD): Bought U$2.06, sold U$2.96, pre-commissions profit
43.7%.
This weekend NGD is priced at U$3.16. If I’d held onto my shares, the pre-
commissions profit would be 53.4%. It was as high as U$3.46 this week, too.
In other words, apart from the sale of Atacama Pacific at 40c, as things stand today all my sales
in 2015 have either turned out to be too early or way too early. Now context is clearly
necessary and to have booked five winners in two short months isn’t to be sniffed at, a win is a
win and all that jazz. Also, I have to say that on a personal level I’m not overly annoyed in
having left money on the table on those trades. I’m only slightly annoyed in fact; the bad
selling of True Gold on the political flare-up in Burkina grates a little because I read the
situation badly. Also, I should have given MUX a little more time, but overall it’s the type of
thing I personally used to get pissed (with myself) about much more in the past than I do now.
I’ve also learned that however difficult it is to ‘buy well’ it’s ten times harder to ‘sell well’ and
the compromise of “selling at a profit”, even if it’s far from the best profit that could have been
achieved, is one I’m willing to accept. That’s me, Mark Turner, hi pleased to meet you. And yes
that’s right, I am not you and you are not me but all the same it’s necessary to point out, kind
and wonderful people who send me money in exchange for this publication, that in the last
couple of months I’ve shown a clear tendency to hit the sell button too early.
I’m not a great trader, never have been and never will be. When I buy at absolute bottoms or
sell at absolute tops it’s pure luck, nothing more nor less and my developed attitude isn’t of
competition with the next woman or man, it’s a competition against that nebulous entity we
know as ‘the market’ and if I can score a win it matters very little if the guy next to me starts
on the “huh? Only 50% up on a trade? In this market? Hey, I bought XYZ at 12 and now its 34
and I know it’s going to go to....” etc. I take my wins, I also take my losses, I owe nothing to
anybody on either type of result. With that said I do feel a responsibility to those who read The
IKN Weekly because you’re kind enough to pay me real money and perhaps U$40 in one month
isn’t so much in absolute terms in the great scheme of things, but it’s symbolically very
important for me. I won’t play coy with you, I do like it when I hear via feedback that you’ve
followed me into trades. The thing that bugs me is if you hit the sell button at the same time as
me (and my personal objectives) then feel hard done by as the stock then continues to zoom
higher (all the time as I exhort you to hold and add B2Gold which treads water yet another
week). So if your decision process if affected by mine, let this section also be an influence on
25

when or whether you sell your trades.
Bottom line: I have a weak spot in my armoury at the moment, I’ve been selling too early.
Please take that into account.
Belo Sun (BSX.to): Locals protest against Volta Grande
Here’s one of those piece that could have been put in ‘Regional Politics’ above, but as it affects
a specific junior company I’ve decided to put it here. If I was sent links to the reports of the
meeting of local residents in the Xingu region of Brazil once last week, I was sent links a dozen
times. I thank you all, but you should also know that you’re preaching to the converted and I’m
fully aware of the amount of antipathy there is towards Belo Sun (BSX.to) and its Volta Grande
gold project.
Here is one example of news reports on the event (16), there are others out there if you fancy
brushing up on your Portuguese. In a nutshell, the meeting was called to gather opinions, and
mainly complaints from locals about the last three years of activity by BSX at Volta Grande.
Around 500 people attended and the had diverse complaints, from local artisanal miners who
have been stopped from working by BSX personnel and guards, to environmental activists who
voiced concerns about the project plan, to government officials who noted the current EIA
application omitted a lot of information about the potential impact to nature reserve areas close
by to the project. Perhaps the most important criticism levelled against BSX was by locals who
said that the company had, quietly and using third parties, bought up land areas around the
project without notifying authorities; that if true would be plain illegal and get them into direct
problems come the day permits are supposed to be signed.
I’ve noticed the unwelcome reappearance of a tendency among Canadian sellside brokerages,
that the opinion of locals isn’t so very important and what matters is “getting the permits” and
“the company says they’re on track with the government” so therefore the mine will happen. If
there’s one thing the last few years should have taught the clowns in suits and cubicles writing
their incessant puff-pieces, it’s that Latin America doesn’t work like that any longer. The
chances of imposing a remote project such as Volta Grande on locals who are dead set against
against it are practically zero, no matter what national govenment piece of paper gets waved in
front of their eyes. If your company cannot show you consensus approval from the people who
will be most directly affected by the project then your company is going about its development
in the wrong way, it’s as simple as that.
Regarding Canasil Resources (CLZ.v) Orex Minerals (REX.v ) and the Sandra Escobar
discovery in Durango Mexico
I’ve fielded several mails on this subject in the past couple of weeks, with the latest NR from
the JV (17) on Tuesday that included
a headline hit of 37m of 328 g/t silver
(in old money, ten ounces bar a spit)
eliciting another round of mails. All
the activity has come with a big spurt
in the two companies’ share prices,
here compared to GDXJ over 2016. All
very impressive I’m sure.
Therefore, to be clear: This is a silver
project and impressive though the
first hits may have been, I’m not
interested in buying into any silver
project, let alone one run by Gary
Cope. At the start of the year I stated
that gold exposure looks far more
attractive to me than silver exposure and so far at least, that position hasn’t changed one iota.
The silver/gold ratio moving up to 82:1 has given me plenty of backing on that call too, so
26

although I’m open to revisiting silver companies if and when the underlying metal starts making
a meaningful move, I still find the whole sub-sector an easy pass, splashy new discoveries
included. If you managed to eke any type of win on these small companies I congratulate you,
if you continue like the look of the play more than me and are holding, adding or even buying, I
wish you the best of fortune.
Pretium (PVG) raises cash, underperforms even further
I’m glad to report that the “Pretium underperforms” piece last week nudged at least one of you
to sell their PVG stock at U$5.05 (I
know because subscriber NA mailed me
and said so). And that sale happened
the day before PVG announced (18) a
U$120m financing that was eventually
priced at U$4.60, an announcement
that sunk the share price even lower
compared to peers. Here’s an update to
the three month chart featured in last
week’s note on PVG and the gap to
peers (GDX, GDXJ) is now 50% or 60%
in just one quarter, that’s a lot. It’s also
a company that has stubbornly refused
to join in the sector revival and is now
12% down on the year, when so many
others have registered massive gains.
Nevada Sunrise (NEV.v): A Clayton Valley area play with something to offer
My disdain for Lithium X (LIX.v), the outright scam being run out of Vancouver by Frank Giustra
and his cohorts, is well-documented on the blog and on these pages. However we also noted
last week that there’s a rare old price bubble forming in lithium (mostly via battery grade
lithium carbonate and mostly driven by the surge in interest for electric powered cars) and the
sector is bound to see growth on the back of this until such time as the price curve flattens out
again, such is the way of economics text books. Last week we mentioned the place set for the
quickest and easier growth, Chile, but it’s not going to do much good for us the junior mining
speculator set, what with the players there being the bigboys rather than the minnows capable
of tripling overnight.
So today a word or three on one company out of the many that have sprung, mushroom-like
out of the Canadian TSXV quagmire and are now selling themselves as The Next Big Thing in
lithium. The company is Nevada Sunrise (NEV.v) and its project of interest is also in the Clayton
Valley area of Nevada, same as the scam LIX.v, which means I don’t give it much of a chance
of ever becoming a real producer with a real mine but there’s still a chance of a trading win in
this stock, I think.
Reasons why I don’t like the stock: For a start, it’s one of those juniors that changes its
suit to match the fashion and goes chasing after the next hot sector story. A year ago it was a
gold play, now it’s lithium and this section of its latest MD&A gives you the flavour:
“Nevada Sunrise is adapting to a changing marketplace and in August 2015, made the
decision to explore for lithium brines in Nevada. The Company intends to maintain its
gold properties during these volatile times for precious metals, and at the same time
offer its shareholders the potential rewards that a new lithium discovery might offer.”
Hmmmm, these aren’t my kind of stock stories under normal circumstances.
Another reason not to like NEV.v is its mineral properties, which are a bunch of maybe-one-day
early stage gold assets that haven’t shown much so far, plus a couple of newly acquired lithium
concessions to match its “change in corporate strategy” (to coin a diplomatic phrase for “area
play chaser”).
27

It should be clear by now to long-standing readers of The IKN Weekly (and maybe even blog
readers) that under normal circumstances this is the type of TSXV junior that brings my out in
an allergic rash and running in the opposite direction. However, NEV may be different and for
one good reason, plus one structural reason.
One good reason: The reason I like NEV as a potential speculative play (more than the rest of
the area play sillystocks) is in this January 28th NR from the company, which announced (19) it
had secured an option on water rights in Clayton Valley. This is significant because of two basic
reasons
1) Without water rights, no lithium brine project in the area will ever happen because
without water rights you can’t pump a drop of water out of the water table.
2) The local and regional authorities are not awarding any more water rights in the area,
all done and finished. There are no more.
In other words if you can’t buy an existing water right from a third party, your lithium project is
screwed even if you can prove its economics work (time, grade, recovery, production, all those
niceties). And that means that NEV.v has, by a piece of swift and timely business, locked up a
potentially very valuable asset by securing these rights.
The price set for the deal is U$1.42m and the terms of the deal are reasonably easy too, with
U$125,000 to pay on the closed deal (U$50,000) already paid and then scaled annual payments
that start at U$150,000 this time next year. There are shares in NEV emitted in each staged
payment too (see the NR for full details). The deal is likely to close soon (it’s in the 60 day DD
period) and as NEV managed to raise C$200k in a private placement just a couple of weeks
ago, that will cover the remaining initial payment (plus the directors’ monthly salaries, I’d hate
to think they were going without food or driving a battered old pick-up truck around
Vancouver). However, there is a clause which states that if NEV sells its new rights to a third
party, the vendor to NEV gets 50% of the proceeds minus any payments made to that point.
EG: If somebody buys the water rights from NEV for U$2m this year, NEV gets U$1.125m and
the vendor to NEV gets U$0.875m (minus the value of emitted shares).
EG2: If somebody buys the water rights from NEV for U$5m next year, NEV gets U$2.725m and
the vendor to NEV gets U$2.225m (minus the value of emitted shares).
Those are just two examples of the way the water rights may become valuable in cash terms,
pure sketchwork and there are many ways in which the calculations can change (not least via
the simple act of not selling and letting the asset appreciate if the market so dictates).
One structural reason: The other thing to like about NEV.v is its share structure. Even after two
recent placements (one later last year at 15c, another just closed at 18c) the company has just
28.307m shares outstanding. So we round off and say there are 28.3m shares out in NEV.v, at
Friday’s closing price of 18c, that’s a market cap of CAD$5.1m and that’s the type of small
market cap that can fly if something they own suddenly becomes popular or highly desired (e.g.
that water right in Clayton Valley).
As for cash, NEV via its recent raisings has enough get-by cash to make the pending $75k
payment to close the option deal, then keep afloat for the rest of 2016 (if it’s careful with its
money). As for non-paid-up paper, unless they’ve slipped in some extras for themselves
recently and I missed the filing there are another 8.53m warrants and 2.2m options
outstanding, which brings the fully diluted total to 39.0m. Of those papers, 4m of the warrants
are at a 25c strike and 1.13m at a 30c strike, so there’s the potential for overhang at those
prices. But overall we’re looking at a company with a reasonably tight share structure and the
main 28.3m count is low. That, above all, make it interesting.
28

Which brings us to the crux of the matter: As for the trade potential, it should be fairly
clear at this point. The deal for the Clayton Valley water rights was struck at December 2015
prices using a arbitrator of fair value between the parties,. Since then we’ve seen two
developments, the substantive one of lithium prices skyrocketing (literally doubling for battery
grade lithium carbonate) and the speculative one of the LIX.v promotion BS hitting the streets.
You can make the case that its other assets might or might not be worth something (I’ve taken
a closer look and come away saying “meh” about its gold projects without being totally
dismissive) but the thing that could become far more valuable in the marketplace is that piece
of paper that allows it to pump water in Clayton Valley. If Giustra’s smoke and mirrors
operation wants to go to a second chapter it will have to address its lack of water rights at
some point.
Mostly due to its marketing to the naive and stupid, LIX is now valued at C$33.5m and NEV is
the type of vehicle it could snap up and put into its structure at the current discrepancy of
share prices. Or it could buy the water rights from NEV (but that’s less ikely , as it would leave
NEV with project areas and no water). Therefore, conceptually at least the smart-looking
business move by NEV.v to secure water rights may make it a decent play on a current fashion
and fad in and around Clayton Valley. There’s certainly less for it to lose at this point in market
cap terms than buying the pumped up Giustra company.
Bottom line: What I see here is an interesting angle on all this Clayton valley promo, as NEV
does have something that’s worth fighting over if any of these juniors ever decide to get serious
about their Li development and not just play pass the paper with the retail suckers. Clayton
Valley lithium hype is in “sell the sizzle not the steak” mode in Vancouver today, at some point
one of these purveyors of dreams will have to take it to the next level and provide more
substance. NEV has secured one of the key elements to true production in the area, the scarce
resource of water without which, nothing ever gets produced. It’s by no means the cleanest of
vehicles, as noted by its ambulance-chase move into lithium less than a year ago. We can also
point out the 15 (fifteen!) news releases
from the company since December, all
about lithium and all with the express
purpose of waving hands in front of the
investment community and going “Look at
me! Here I am!”. But if you’re looking for a
speculation on the lithium hype and want a
cheap entry point into something that does
at least have some fundamental substance
to it, NEV.v might be the one for you. I’m
going to try and pick up a few shares next
week at 18c and if I do, I’m undecided on
whether or not to add it to the ‘Stocks to
Follow’ list or make it one of the occasional
‘side bets’ here at the Weekly (the last one, Sunridge, is showing a 20% approx gain and I still
haven’t sold it yet...still waiting for 30c).
Conclusion
IKN355 is done, we end with bullet points:
• I like the look of Sandstorm (SAND) and today the background is done to show you
why.
• But before anything, own B2Gold. That’s the one to provide you your strong and solid
2016 double.
• Nevada Sunrise (NEV.v) shouldn’t be confused with those two mentioned above, it’s a
tinycap, it’s very speculative, it’s all about a fashion that will wax and wane (as they
always do). But as a Clayton Valley spec crapshoot, there are worse out there. I’m
29

going to try and get some at 18c and see where all this lithium hype takes me and my
moolah afterwards.
• I’m still expecting gold to take a breather for a few weeks and I’m betting on The Curse
Of PDAC to provide a few cheap entry points for my raised cash afterwards. Of mice
and men? We’ll see, but that excellent gold vs Fed Funds chart adds backbone to my
theory.
• Another long edition, 33 pages and 29 of those of script Ugh, enough, I’m off to watch
the beautiful people applaud Di Caprio when he picks up his statue.
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://www.churchillresearch.com/
(2) http://sandstormgold.com/news/index.php?content_id=430
(3) http://incakolanews.blogspot.pe/2016/02/bart-simpson-has-message-for-teck.html
(4) http://www.farminglife.com/news/farming-news/fury-at-proposed-gold-mining-operation-1-7223560
(5) http://www.pdac.ca/convention/programming/presentation-reception-rooms/sessions/presentation-reception-
rooms/peru-day-canada-peru-chamber-of-commerce-%28full-day%29
(6) http://www.vanguardia.com/colombia/348896-seis-meses-para-identificar-afectaciones-a-la-salud-por-mineria-en-
cordoba
(7) http://incakolanews.blogspot.pe/2016/02/credit-suisse-on-goldcorp-gg-gto-quarter.html
(8) http://incakolanews.blogspot.pe/2016/02/goldcorp-gg-gto-files-its-year-end.html
(9) http://business.financialpost.com/news/mining/incoming-goldcorp-ceo-david-garofalo-says-hes-inheriting-miner-
thats-running-very-smoothly
(10) http://www.bloomberg.com/news/articles/2016-02-25/sibanye-gold-sees-better-2016-as-profit-drops-60-on-
disruptions
(11) http://larepublica.pe/impresa/sociedad/743680-buenaventura-tocara-puerta-por-puerta-para-sacar-mina-san-gabriel
(12) http://larepublica.pe/impresa/economia/744518-surge-nuevo-grupo-opositor-al-proyecto-minero-san-gabriel
(13) http://www.portalminero.com/pages/viewpage.action?pageId=107220151
(14) http://www.elcaribe.com.do/2016/02/25/gobierno-dice-convertira-industrias-extractivas-motor-desarrollo-beneficio-
social
(15) http://incakolanews.blogspot.pe/2016/02/peru-presidential-poll-keikos-lead.html
(16) http://www.mabnacional.org.br/noticia/mineradora-canadense-comprou-terras-forma-irregular-no-xingu
(17) http://finance.yahoo.com/news/orex-hits-high-grade-again-140000308.html
(18) http://finance.yahoo.com/news/pretivm-prices-offering-common-shares-142424905.html
(19) http://finance.yahoo.com/news/nevada-sunrise-option-purchase-water-133000532.html
30

Stocks To Follow Closed Positions 2015
Closed in 2015 closed close price
Argonaut Gold AR.to jan'15 C$1.47 14-dec-14 C$2.53 72.1% Big gain small time, profit taken
Amerigo Res ARG.to jan'15 C$0.405 20-jul-14 C$0.285 -29.6% Given up on weak Cu prices
Reservoir Min. RMC.v jan'15 C$6.05 18-jun-14 C$4.12 -31.9% sold on Cu downturn
Coro Mining COP.to jan'15 C$0.075 26-jan-14 C$0.035 -53.3% sm, sold on Cu downturn
Fortuna Silver FSM mar'15 U$4.12 10-nov-14 U$3.75 9.0% Short used as hedge
GoldQuest Min. GQC.v mar'15 C$0.26 27-oct-13 C$0.085 -67.3% given up ghost
Rio Alto Mining RIO.to apr'15 C$2.30 07-apr-11 C$3.57 55.2% Top pick, bot out, big win
Timmins Gold TGD jun'15 U$0.60 19-apr-15 U$0.62 3.3% near-term trade, out of time
First Majestic AG jul'15 U$10.51 10-aug-14 U$4.55 56.7% horrible failed trade
NovaCopper NCQ.to jul'15 C$1.05 09-apr-14 C$0.50 -52.4% no more Cu exposure, sm sell
McEwen Mining MUX aug'15 U$0.695 21-jul-15 U$0.92 32.4% Closed nearterm flip for win
Midas Gold MAX.to sep'15 C$0.39 21-sep-15 C$0.35 -10.3% Sm. trade idea that didn't work
New Gold NGD oct'15 U$2.18 23-aug-15 U$3.05 39.9% trade closed, profit taken
Legend Gold LGN.v nov'15 C$0.085 01-mar-15 C$0.035 -58.8% tiny "land grab" idea, failed
Timmins Gold TGD nov'15 U$0.245 20-sep-15 U$0.15 -38.8% small near-term loser
Stocks To Follow Closed Positions 2014
Closed in 2014 closed close price
Fortuna Silver FVI.to jan'14 C$2.80 23-dec-13 C$3.19 13.9% small ST trade closed
Rio Alto Mining RIO.to jan'14 C$2.06 07-jun-13 C$2.30 11.7% trading position finally closed
Network Expl. NET.v feb'14 C$0.01 22-jul-12 C$0.005 -50.0% position closed, did nothing
Tahoe Resources TAHO feb'14 U$13.10 08-apr-13 U$21.72 -65.8% short closed due to reality
Darwin Res DAR.v mar'14 C$0.10 14-jul-12 C$0.045 -55.0% tiny risk play dropped
B2Gold BTO.to mar'14 C$3.07 28-nov-12 C$3.35 9.1% closed to free up capital
Pretium Res PVG mar'14 U$5.38 22-nov-13 U$6.50 -20.8% short closed as port longer
Gold Res Corp GORO may'14 U$5.07 26-jan-14 U$4.12 16.7% took profit
Bear Creek Min BCM.v may'14 C$1.63 23-mar-14 C$2.05 25.8% Took profit, sm near-term win
Eco Oro Min. EOM.to aug'14 C$0.48 22-sep-13 C$0.26 -45.8% sold small loser to make room
True Gold TGM.v sep'14 C$0.395 02-feb-14 C$0.41 3.8% M&A won't happen, sold
Santacruz Silver SCZ.v sep'14 C$1.04 26-jan-14 C$0.86 -17.3% silver/M&A spec, rel. small
Timmins Gold TGD nov'14 U$1.38 09-apr-14 U$0.99 -28.3% failed trade, sell, raise cash
Kinross Gold KGC nov'14 U$2.90 20-oct-14 U$2.15 -25.9% V small trade, didn't work, chau
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.145 -48.2% lost China sponsor
Stocks To Follow Closed Positions 2013
Closed in 2013 closed close price
USA Graphite USGT feb'13 U$0.93 08-jan-13 U$0.17 81.7% short tgt made/trade closed
Lachlan Star LSA.to feb'13 C$1.50 30-sep-12 C$0.95 -36.7% sold to reduce port risk
United Silver USC.to mar'13 C$0.21 28-oct-12 C$0.095 -54.8% small Ag sector trade, failed
Aurcana Corp AUN.v apr'13 C$1.07 11-nov-12 C$0.55 -48.6% closed on poor YE results
Gold Res Corp GORO apr'13 U$14.11 25-jan-13 U$9.38 33.5% short tgt made/trade closed
Marlin Gold MLN.v apr'13 C$0.075 10-feb-13 C$0.065 -13.3% closed trade
Bear Creek BCM.v may'13 C$2.58 01-apr-13 C$2.40 -7.0% near-term, time ran out
Lupaka Gold LPK.to may'13 C$1.12 23-oct-11 C$0.32 -71.4% towel thrown in
Tahoe Resources TAHO may'13 U$18.62 08-apr-13 U$14.70 21.1% took profit on ST short
OceanaGold OGC.to jun'13 C$3.03 16-sep-12 C$1.18 -61.1% sold on gold drop
IMPACT Silver IPT.v jun'13 C$1.14 13-jan-13 C$0.62 -45.6% sold on silver drop
Duran Ventures DRV.v jun'13 C$0.045 10-may-13 C$0.025 -44.4% ST trade never worked
Plata Latina PLA.v jun'13 C$0.79 10-apr-12 C$0.13 -83.5% closed
Bellhaven BHV.v jun'13 C$0.065 03-jun-13 C$0.12 84.6% closed ST trade
B2Gold BTO.to aug'13 C$3.07 28-nov-12 C$3.44 12.1% sold 1/2 to raise cash
Colossus Min. CSI.to aug'13 C$0.72 24-jul-13 C$0.79 9.7% closed thru nerves on future
31

Pretium Res PVG.to aug'13 C$8.20 11-jun-13 C$10.14 23.7% closed to raise cash
Bear Creek BCM.v sep'13 C$2.06 30-may-13 C$2.20 6.8% sold on pol risk decision
MAG Silver MVG oct'13 U$7.00 12-sep-13 U$5.62 19.6% near-term short
Gold Res Corp GORO oct'13 U$9.52 03-may-13 U$4.98 47.7% short tgt made, covered
AQM Copper AQM.v oct'13 C$0.31 16-oct-11 C$0.125 -59.7% closed failed trade
First Majestic AG nov'13 U$11.51 07-nov-13 U$10.50 8.8% v near term short, closed
Fortuna Silver FSM nov'13 U$4.00 07-nov-13 U$3.68 8.0% v near term short, closed
Primero PPP nov'13 U$5.70 07-nov-13 U$5.75 -0.9% v near term short, closed
Starcore Intl SAM.to nov'13 C$0.235 08-sep-13 C$0.17 -27.7% ST trade didn't work, sm loss
B2Gold BTO.to dec'13 C$2.22 28-nov-12 C$2.16 -2.7% closed ST trade to raise cash
Stocks To Follow Closed Positions, 2012
Closed in 2012 closed close PPS
Soltoro SOL.v jan'12 C$0.87 07-nov-11 C$0.94 8.0% cash moved to BCM.v
Gold-Ore Res GOZ.to feb'12 C$0.84 13-oct-10 C$0.98 16.7% trade closed on ELG.v offer
Minefinders MFN feb'12 U$11.68 17-nov-11 U$14.80 26.7% target made, trade closed
Iron Creek IRN.v mar'12 C$0.58 26-sep-10 C$0.31 -46.6% time up on small bad trade
U.S. Silver USA.to apr'12 C$2.18 15-mar-12 C$1.86 -14.7% ST trade no good, cut loss
Augusta Res. AZC.to may'12 C$3.10 29-jan-12 C$2.07 -33.2% bad mkt, bad trade cut loss
Bellhaven BHV.v may'12 C$0.50 22-sep-10 C$0.28 -44.0% new mgmt not impressive
Zincore Metals ZNC.to may'12 C$0.325 29-jul-11 C$0.17 -47.7% bad mkt, bad trade cut loss
Soltoro SOL.v may'12 C$0.70 18-mar-11 C$0.41 -41.4% bad mkt, bad trade cut loss
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% fail ST trade close pre split
Estrella Gold EST.v aug'12 C$0.91 27-mar-11 C$0.14 -84.6% Closed on port realignment
Fortuna Silver FVI.to sep'12 C$1.07 03-may-09 C$5.32 397.2% sell call $6.17/ Mar25
Strait Minerals SRD.v oct'12 C$0.125 09-dec-11 C$0.12 -4.0% closing coverage til FY13
Sunward Res SWD.to oct'12 C$1.47 13-mar-11 C$1.21 -17.7% sold, took loss
Gold Res Corp GORO oct'12 U$21.47 09-sep-12 U$17.40 19.0% Short trade closed
Yellowhead Min. YMI.to nov'12 C$1.00 01-apr-12 C$0.63 -37.0% sold, took loss
Primero Mining PPP nov'12 U$7.26 07-oct-12 U$6.73 7.3% Short trade closed
Bear Creek Min. BCM.v nov'12 C$3.38 07-nov-11 C$3.72 10.1% Took small profit
Vena Resources VEM.to dec'12 C$0.70 31-may-09 C$0.18 -74.3% Failed trade (caps F)
Galway Res GWY.v dec'12 C$2.19 24-nov-12 C$2.30 5.0% closed good ST arb trade
Stocks To Follow Closed Positions, 2011
Closed in 2011 closed close PPS
Sunward Res SWD.v jan'11 C$1.05 21-nov-10 C$1.63 55.2% target made, trade closed
Serengeti Res SIR.v mar'11 C$0.245 05-dec-10 C$0.285 16.3% sold pre-tgt, ST trade fail
Fronteer Gold FRG apr'11 U$2.37 03-may-09 U$15.24 543.0% buyout, trade closed
Minefinders MFN apr'11 U$9.09 07-nov-10 U$16.89 85.8% target made, trade closed
Metalline Min. MMG may'11 U$1.04 26-jan-11 U$0.89 -14.4% exit, resource disappointed
Peregrine Met PGM.to jul'11 C$0.87 06-mar-11 C$2.60 198.9% buyout offer, closed
Dynasty Metals DMM.to jul'11 C$4.20 03-may-09 C$2.85 -32.1% Sold. Fail. Move on.
Aura Silver AUU.v aug'11 C$0.22 13-oct-10 C$0.16 -36.4% Bad pick. Take loss
U.S. Silver USA.v aug'11 C$0.52 26-jan-11 C$0.71 36.5% closed to make room
B2Gold Corp BTO.to sep'11 C$2.80 12-may-11 C$4.27 52.5% target made, trade closed
Bear Creek Min. BCM.v sep'11 C$3.80 27-may-11 C$4.17 9.7% macro sell call victim
Minefinders MFN sep'11 U$14.70 10-aug-11 U$15.15 3.1% macro sell call victim
Great Panther GPR.to sep'11 C$3.03 22-aug-11 C$2.64 -12.9% macro sell call victim
Fortuna Silver FVI.to sep'11 C$1.07 03-may-09 C$5.36 400.9% sold 20%, macro sell call
Focus Ventures FCV.v nov'11 C$0.40 20-apr-10 C$0.20 -50.0% cut losses, bad trade
Regulus Res. REG.v dec'11 C$1.17 14-aug-11 C$0.52 -55.6% cut on news of poor 43-101
2009 and 2010 closed positions in appendices below
32

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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