IKN #356Premium

The IKN Weekly
Week 356, March 6th 2016
Contents
This Week: In today’s issue, On valuation methods for stocks, PDAC 2016 is here.
Fundamental Analysis: The last and next four weeks at The IKN Weekly.
Stocks to Follow: Overview, Nevada Sunrise (NEV.v), Teranga Gold (TGZ.to) (TGZ.ax),
Sandspring Resources (SSP.v), B2Gold (BTG) (BTO.to), Dalradian Resources (DNA.to) (DALR.L),
Starcore Intl (SAM.to), Regulus Resources (REG.v), Lara Exploration (LRA.v),
Copper Basket: Overview, Reservoir Minerals (RMC.v), Ivanhoe Mines (IVN.to), HudBay
(HBM), Cordoba Minerals (CDB.v), Copper Fox (CUU.v), Nevada Copper (NCU.to), NovaCopper
(NCQ.to).
Low Cost Producer Basket: Overview, Goldcorp (GG).
Regional Politics: Latin America at PDAC 2016, China: Nothing’s impossible, Peru: Mining
becomes a campaign issue, Peru’s presidential election at “can’t organize a booze-up in a
brewery” level, Argentina: The bond holdouts get their deal.
Market Watching: Minera IRL (MIRL.L) (IRL.to): Patience required, Yamana (AUY) (YRI.to)
will announce on Brio Gold this week, Dealflow is the key, Forex update, Sandstorm Gold
(SAND) (SSL.to) redux.
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
• If that nice Mr. Market offers me C$1.00 or above on Dalradian (DNA.to) next week, I’ll
take it and sell my position. That will be the last sale in the current phase.
• I’m looking for gold to retrace and offer up new bargains in the weeks to come (until
end March perhaps) and deploy the newly swollen war chest of cash. But what if I’m
wrong? What if gold doesn’t drop and the miners have only just started a massive
move? We address that possibility below.
• PDAC is here, so don’t try and fight on all fronts, choose your battles carefully.
• Copper is where the real action is. I’m tempted to short HudBay (HBM) but the timing is
going to be very difficult, the company’s fundies are very secondary to the macro
market for copper the metal, and that means China.
• Suddenly nobody cares if you stick in a bad quarter, my how times change.
On valuation methods for stocks
“I am also concerned not to come off as shrill or preachy
when what I really am is more like confused.”
David Foster Wallace
Reader ‘MZ’ (by some bizarre coincidence there are four IKN Weekly subscribers with the same
initials, so it was just one of you ☺) wrote in regarding the valuation methods I’ve been using
for companies recently, mostly in the fundamentals analysis section. Here’s an excerpt of the
mail from MZ that contains the essence of the message:
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I've seen you take three approaches to valuation:
1. Comparison to book value
2. Value per ounce of resource / reserve
3. Multiple of profit / cash flow
Those are listed in order from least useful to most useful, in my opinion. Personally, I'd
feel much more comfortable if you did more of #3, but lately you've been doing a lot of
book value comparisons. I don't like book value, because it's so arbitrary. There's
always a question of mine asset write-offs, hanging onto goodwill too long, and other
questionable accounting when it comes to assessment of resources according to book
value. Furthermore, it's very one-dimensional, and doesn't consider mining input costs
and timing of revenues. Can I persuade you to move back to what you used to do more
of, valuing companies based on profits or cash flows?
Let’s begin at the beginning and say that MZ makes a valid point here. I do pick and choose the
way I present my fundies numbercrunching and it will at times look arbitrary, which is why this
subject gets a few lines today to more than just MZ. So here goes:
One of the things that ‘The IKN Weekly’ doesn’t do to is to try and emulate standard sellside
analysis. The Gold Report recently interviewed Brent Cook and Joe Mazumdar, the double-team
behind Exploration Insights with Mazumdar the recent addition to that team (1). Mazumdar was
asked about the difference between his new job of writing for a newsletter and where he came
from, most recently sellside analyst at Canaccord but he has a whole CV of experience behind
that. He said this:
The Gold Report: Congratulations on the new Exploration Insights partnership, Brent and Joe.
How is working on the newsletter side different than the analyst side?
Joe Mazumdar: A lot of the work for a sell-side analyst involves chasing news as it's released
with little time for sober second thought. In my opinion, writing for Exploration Insights is more
amenable to taking a longer look at the implications of events. The difference can be as wide as
between writing for a daily newspaper such as the New York Post and for The Economist.
That resonated with me, because part of the job description of my job is specifically not to do
what sellside brokerage anal ysts do. A newsletter service such as IKN isn’t a datacrunch, it is
by nature subjective, it’s editorializing, it’s a place where a point of view is put across and
therefore opinions and talk of implications isn’t merely useful but obligatory. I’m not denigrating
the work done in sellside brokerages either (at least not today) because when done right by
good people, the analytical capacities of a brokerage, its databases and information access, are
vastly superior to anything an independent analyst can ever manage.
The element of subjectivity doesn’t just show up in the news stories I decide to cover or the
stocks I decide to pick, it also applies in the way they are presented to you the reader. That
includes editing the numberwork in order to show the way that best reflects what I believe to
be the state of play in the stock in question. Straight cash flow, DCF, NAV price/book and (yes
at a pinch, it’s not great) in-situ are all possibles. I’ll pick and choose the instrument because
I’m allowed to do just that. I’m not a brokerage tied down by protocol and necessarily adhering
to a cookie-cutter presentation policy.
Over the last few months, with a lot of locked up asset value going unrewarded, I’ve tended to
drift to the discrepancy that’s opened up between the price of a company and its nominal book
value. It needs to be done with care, it’s way too easy to skew your results to confirm already-
held bias (e.g. ignoring assets that haven’t been correctly written down makes the P/BV look
artificially low) but it’s also been the big canary in the coalmine for me recently, the reason why
I’ve been banging on the table about B2Gold and saying things like “As long as gold doesn’t
cave on us it’s going to U$1.30 in the near term, nail that number to your wall” as recently as
IKN353.
But the final point is the most important of all: No matter what mathematical model or method
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you use, no matter whether you’re a guy working on financials for you rown portfolio, an
independent newsletter writer, part of a sellside team or running in-house calculations for a
buyside fund, all financial models are subjective. That’s the dirty little secret the anal ysis world
prefers to keep quiet, there’s no better example I think think of for the computer acronym
GIGO (Garbage In Garbage Out). You can run the finest and most intricate model ever created,
but if your basic assumptions are wrong it’s going to give a false result. You can reverse-
engineer you answer to suit your boss’s directive of “make this stock a buy in your note...or
else”, or conversely you can use the rough-and-ready in-situ method and get a great result with
judicious use of parameters and intelligent assumptions. In the end it’s not the model that’s
important, it’s the person running the model and that’s why there are anal ysts sitting in plush
corner offices in Wall St firms pulling down hundreds of thousand of dollars a week in pay. And
why there are others who charge...err...U$40 a month.
PDAC 2016 is here
My attitude towards PDAC is summed up by the Bingo Card I published for the blog last wee.
For sure there are “things” that happen at the biggest mining get-together of the year but 95% of
it is fluff, bluff, nonsense and one long game of Liar’s Poker. With that said there is content to be
had if you look hard enough and one of the few events that interests me, aside from following
the newsflow from the industry (tomorrow should be a fun day, with great good bad and rotten
NRs to pick over) is the appearance of Brent Cook and Joe Mazumdar on BNN’s Market Call
from PDAC. It’s a one hour show, Brent Cook does it regularly and has made the PDAC show
an annual event too, but this time I’ll be particularly interested in what Joe Mazumdar has to
say. The gig is scheduled for Tuesday at 6pm EST and if you so desire, you can get your
questions into the tag team by phone (1-855-326-6266 toll free), e-mail (marketcall@bnn.ca) or
even Twitter (@marketcall).
The other BNN Market Call that may be of interest is Rick Rule tomorrow Monday, same
scheduled time (and question channels the same, too). Bet you he pumps Ivanhoe (IVN.to).
Fundamental Analysis of Mining Stocks
The last and next four weeks at The IKN Weekly
This week’s section is less about the fundamentals of mining stocks, more about the macro
sector overview. It’s what I believe to be a necessary re-cap because at this moment in time,
revolving around PDAC and with a gold price that’s rallied nicely, The IKN Weekly is less about
stockpicking or what’s happening inside any given company and more about the tidal moves of
the sector which are controlled by gold. I want to go over the strategy moves I’ve made in
February and this first week of March, confirm the plan that I put in place is on track and
consider what I’d do if things don’t go to plan in March (and I’d add early April, not fixed and
stressed on exact timing).
The main purpose of today’s piece is to allow you to consider whether I’m right or wrong about
the strategy, which we’ve covered detail over the last few weeks but in a nutshell, the plan has
been as follows:
• Enjoy the gold bounce to “above U$1,200/oz”.
• Raise cash by selling positions before PDAC comes around (in fact I framed it as “In
February”, but The Curse Of PDAC has been a natural deadline too and I know what’s
been in my head these last three or four weeks).
• Look for a retrace in gold, mean by which it goes sub-U$1,200/oz (to be specific, I
have U$1,180/oz in the back of my mind somewhere)
• Deploy the raised cash in the newly available bargains, from perhaps mid-March
onwards.
So much for plans, how have things worked out so far?
Yes, gold went over U$1,200/oz, but it’s also gone higher than I imagined it would and it
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popped faster too. That violent angle to the recovery had me changing strategy somewhat,
with the main decision being to hold onto the core B2Gold position (which is also, please
remember, is way oversized and by far the biggest I hold here in absolute cash terms).
Gold in fact touched U$1,280/oz on Friday after the US jobs number, though its steady drop
after the spike peak wasn’t anywhere nearly as healthy and also clipped the wings of the most
vociferous end of the goldbug rah-rah brigade, at least for one weekend. I’ll make not bones
about it, when I laid out my roadmap for the next couple of months (starting in IKN352 dated
February 7th) I thought gold at U$1,230/oz would be a decent number, with perhaps a quick
spike to U$1,250/oz as possible. We’ve seen perhaps U$30 to U$50 more than I had in mind,
which points to my underestimation and bad reading of the state of play.
Yes, I’ve raised cash, with the sale of Lake Shore Gold (LSG.to), Atacama Pacific (ATM.v), New
Gold (NGD), Sandspring (SSP.v), Teranga (TGZ.to) and the trading portion of B2Gold (BTG) in
February and this nascent March. For one thing has made the ‘Stocks to Follow’ list look rather
thin all of a sudden but for another yes, I now have the right amount of cash to go bargain
hunting in the weeks to come.
So parts one and two are in place, we all enjoyed the gold move and then I raised some cash.
Now for the next stage of the plan, part three (gold drops) and part four when your author
picks up his bargains, they shoot to the moon (Alice) in the second half of 2016 and we all live
happily ever after. What could possibly go wrong? Which brings us to the point of today’s intro
piece: Yes, I could be wrong (hell’s bells I’ve been wrong enough times in the past, you hardly
need me to point these things out) and therefore if I am and all this cash collection blows up in
my face as gold and its dependent stocks and vehicles keep on going higher, what will I do?
That’s the question I’ve been fielding and the frequency of mails asking “what if you’re wrong
Mark?” increased last week, in parallel with gold’s price increase, which is fair enough. And the
answer is simple enough, I’ll still be a buyer of gold stocks. Yes I have cash to burn, yes I’m
looking for gold to take a healthy corrective move before moving higher and yes that’s when I’ll
position for larger gains (not just the near-term scalping trades of the first couple of months)
but if I’m wrong and prices don’t drop, the only thing that really gets hurt is my ego, which
wouldn’t b a bad thing at all. For sure it would mean that I’ve missed out on some of the profits
I could have made if I had called the market better, but I can handle that.
As things stand today the plan is in place and I’m confident that I’ll get my window to buy more
cheaply. If not I may just have to settle for buying at higher numbers and “only“ registering
70% or 100% winners instead of 150% or 200% wins come the end of the year. Oh woe is me.
Stocks to Follow
Of nine open positions in the IKN Weekly ‘Stocks to Follow’ list this time last week, just one was
a loser (FCV.v, down half a penny). All the others were winners (and add another one for NEV.v
opened on Monday) with plenty of double figure percentage wins to report, too. The best move
(and my stars it’s pleasant to report this) was from B2Gold (BTO.to up 16.6%), then came Lara
Exploration (LRA.v up 12.3%), Dalradian (DNA.to up 11.2%), Regulus (REG.v up 11.1%),
Nevada Sunrise (NEV.v up 11.1%) and Starcore International (SAM.to up 10.3%). In short, the
list performed very well and caught its share of the money cascading from the bigger caps into
the riskier parts of the mining sector.
With the sale of SSP.v, TGZ.to and the trading slab of B2Gold (BTG), plus the new addition of
Nevada Sunrise (NEV.v) we’re down to just seven open positions on our ‘Stocks to Follow’ list,
eight below below our self-imposed maximum of 15 and I believe it’s the lowest number we’ve
ever had on the open list. That might even go down one more notch next week (if DNA.to gives
me my out at a Loonie) but fear not, with the cash raised by recent sales I’m going to be a full-
scale shopper soon enough (and looking forward to that). Of our open positions, three are in
the green and four are in the red and for two of reds SCUBA equipment is needed.
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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$1.69 -19.9% Excellent week (at last)
Metals Producers (in current order of preference)
Starcore Intl SAM.to spec buy C$0.48 10-jan-15 C$0.43 -10.4% Starting to get traction
Land Grab Stocks (in current order of preference)
Lara Expl. LRA.v Buy/Add C$1.15 08-apr-12 C$0.41 -64.3% solid biz model, waking up
Other Recommended Stocks (in current order of preference)
Dalradian Res DNA.to hold/sell C$0.67 27-oct-13 C$0.99 47.8% At $1, selling next week?
Focus Ventures FCV.v spec buy C$0.23 01-jul-12 C$0.065 -71.7% Hit hard by PFS news
Nevada Sunrise NEV.v spec buy C$0.185 28-feb-16 C$0.20 8.1% New Li spec play, small flipper
Regulus Res REG.v hold C$0.30 06-apr-15 C$0.40 33.3% Comm. Rels slow progress
Closed in 2016 closed close price
Phoscan Chem FOS.to jan16 C$0.28 29-mar-15 C$0.265 -5.4% Buyout trade, bot but poor deal
True Gold TGM.v jan16 C$0.18 23-aug-15 C$0.25 38.9% okay trade, sold on pol risk
McEwen Mining MUX jan16 U$1.09 25-jan-15 U$1.20 10.1% sold due to lack of value
Lake Shore Gold LSG.to feb-16 C$1.10 07-apr-15 C$1.69 53.6% bot out, sold early in process
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
Sandspring Res SSP.v mar-16 C$0.195 18-oct-15 C$0.32 64.1% Hit tgt, took profit
Teranga Gold TGZ.to mar-16 C$0.54 15-feb-15 C$0.60 11.1% disappointing trade
B2Gold BTG mar-16 U$0.85 13-jan-16 U$1.30 52.9% Separate trade on B2, hit tgt
2009, 2010, 2011, 2012, 2013, 2014 and 2015 closed positions in appendices below
Now for some notes on current basket stocks.
Nevada Sunrise (NEV.v): Position opened. Last week’s piece in ‘Market Watching’,
“Nevada Sunrise (NEV.v): A Clayton Valley area play with something to offer”, elicited more
feedback than expected, including one individual who decided to tell everyone on a chat board
about the new IKN coverage of NEV.v and SAND. It took me a day and a half to find out his
identity, his subscription has been cancelled.
Anyway, leaving the admin stuff aside I did indeed buy a small slug of NEV last week, just
enough to be able to preen and boast and brag about hitting on a massive percentage winner if
it flies, but small enough to write something like “Oh well, it wasn’t much money in play
anyway, no harm done” when it falls flat on its face and I sell at a massive percentage loss
later. In other words, another newsletter writer with his heads-I-win-tails-you-lose attitude.
NEV came out with a couple of pieces of news last week too, starting with this on Wednesday
(2) to announce it had started a drill program on its main ‘Neptune’ lithium property in Clayton
Valley. In fact the drilling is scheduled to start on March 6th but hey, you have to tell these
people before PDAC starts. Then there was this (3) on Friday to tell the world it had optioned
another lithium property in Clayton Valley, on a easy payment low entry standard type of option
deal. In other words, this company is setting itself up as a real promo pump on lithium. At
PDAC, too.
In trading it did okay and I’d even venture to say that its eventual 20c Friday close wasn’t
representative of the week’s action at slightly higher prices.
Finally, I’ve decided to make NEV.v a part of the official ‘stocks to follow’ list and not a side bet,
mainly because there’s a lot of space available on the list after all these sales (of mostly larger
positions). But be clear, I don’t care too much about the fundies of NEV.v, I won’t be following
it closely and if it offers me up a decent win in a short period of time I’ll take it without a
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second thought.
Teranga Gold (TGZ.to) (TGZ.ax): Position closed. As per the Flash update of Thursday
(see appendix 1) TGZ did indeed run through 60c and where I’d placed my ask earlier, so this
one has finally closed out. A minor win for some major headaches along the way and I’m 100%
certain I can find a better place to invest this cash.
Sandspring Resources (SSP.v): Position closed. I mused about it last weekend and as the
week drew on I convinced myself t take profits on SSP, which is why it made the Flash update
on Thursday (see Appendix 1).
B2Gold (BTO.to) (BTG): Trading position closed. I didn’t announce it as part of the Flash
update on Thursday because I wasn’t expecting
BTG to take out U$1.30, but as I’d made it
pretty clear that was the target, when the stock
shot up Friday and peaked right at my number,
it wasn’t an opportunity I was going to let pass.
However, it must be stressed that the main
tranche of Canadian-ticker BTO held (in Loonies
and from much higher prices way back when)
remains as the mainstay of the current open
positions, it’s still Top Pick (all those doubts are
by the wayside) and I’ll be the happiest person
you can imagine if its turns out that I sold the
trading position cheaply. The tranche that’s
closed was a strict, separate bet that’s worked out very well, from here we’ll see whether B2
can build on its excellent week, hangovers included.
Dalradian Resources (DNA.to): Looking to sell next week. Friday’s potpourri of a trading
day in juniors saw a real switchback between companies, some rising while others fell. One of
the stocks that bucked the norm of up
early/down late was DNA, which at first found
it difficult to move up with the crowd (and its
euphoria) at the open, but then put in its own
surge as Friday came to a close and finished
just a penny off its high at 99c.
As you may be aware my DNA selling window
is 95c to $1, with the full Loonie being the real
target. Let’s see how this stock moves on and
you never know, there may be newsflow as
well (there’s always a ton on “PDAC Monday”).
But the plan hasn’t changed, I’m a seller at
these levels and given the right opportunity it
will be another to bite the dust from the list.
Starcore Intl (SAM.to): For traders and value investors alike, the word for SAM continues to
be “Caution” because although the price is right and trading neatly in the 40s now, volumes
remain stubbornly low and that means it would only need one medium-sized liquidator to knock
the stuffing out of the recent gains.
As for real news, we had some last week from SAM and it’s a good signal from its new Altiplano
toll milling arm. On Monday it announced that its first doré bar had been poured (4), weighing
in at 21.131kg. That sounds good and “first pour” is seldom a bad moment for a mining
company, but we don’t know much else about the event (grade, price paid for ore, the
silver/gold ratio in the doré, etc etc) so it’s best considered a promotional moment and not
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much more. The acid test comes in the financials and whether Altiplano can hold its own, or
more to the point whether it can cover the 12 month loan SAM took out to get the ball running.
Regulus Resources (REG.v): Up again on low volume and REG is basically rising on the
copper tide, not much else. I stress that with this company, you will need to give it time to get
its community deal in place, patience is the key, expect periods of no news. But if you’re long
REG you’re also long one of the best junior management teams in Peru and they deserve your
patience. Also, the potential prize at the end of any wait is more than enough to keep me
interested, be clear that if they get things straight with the locals, Antakori has the potential to
be a world class deposit.
Lara Exploration (LRA.v): It’s quiet and on low volume, but LRA has managed to put in its
own double in recent weeks and match the more commonly covered names. It’s about time too
and a reminder of my aborted “Land Grab” play that started this time last year and now looks
to have been almost exactly one year too early.
LRA gave us a couple of NRs last week, one (5) on a new optioning in deal on a nickel project
in Brazil that the company thinks is worthy of further and better exploration (it’s very low front
end payment) and another (6) to announce that as scheduled, it’s received a useful $500k from
its partner, Tessarema, at the Curionopolis copper/gold project that’s moving towards
production.
That $500k payment is part of the total of $1.5m LRA is expected to reap from its project
partners in 2016 and according to the announced budget (see the latest corporate
presentation) fully covers LRA’s expected budget for the year. LEA has always been a tightly
run ship and this is what’s kept the share count from ballooning over the years. As stands
today, LRA has 31.23m shares out (10% of those in the hands of its main man Miles
Thompson, who has been adding to his pile) 33.83m fully diluted and a market cap of around
C$12.8m. For that money you get an awful
lot of mineral acreage in South America,
mainly Brazil (the country in which
Thompson has been most interested in doing
further deals this year) and Peru, but LRA
has its footprint and Colombia and Chile as
well.
This is why I’ve notched LRA up to
“Buy/Add” on the table above, as if it’s truly
time that land assets start getting valuation
love from the market, a company with so
much land, excellent brains trust and a low
share count and market cap is the type that
can leverage well. The downside to any potential near-term trade (as opposed to you patient
people who can invest and forget for a longer period) is the continued low volumes traded in
the stock, it’s not an easy one to play until they get better. I’m seriously considering an add at
this point, not to make my cost average look better (I’m deeply underwater and make no bones
about the bad timing of my entry) but as a real value opportunity for the new cash.
The Copper Basket
After nine weeks of 2016, The Copper Basket shows a 29.30% gain to level stakes.
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company ticker price 1/1/16 Shares out Market Cap current pps gain/loss%
1 HudBay Min. HBM.to 0.35 235.23 976.20 4.15 -21.8%
2 Ivanhoe Mines IVN.to 0.61 778.96 630.96 0.81 32.8%
3 Reservoir Min. RMC.v 4.08 48.46 236.97 4.89 19.9%
4 Capstone Min. CS.to 0.44 382.04 221.58 0.58 31.8%
5 NGEx Resources NGQ.to 0.65 201.06 146.77 0.73 12.3%
6 Copper Fox CUU.v 0.125 417.64 81.44 0.195 56.0%
7 Copper Mtn CUM.to 0.445 118.8 76.03 0.64 43.8%
8 NovaCopper NCQ.to 0.395 104.33 62.60 0.60 51.9%
9 Nevada Copper NCU.to 0.66 80.5 61.99 0.77 16.7%
10 Western Copper WRN.to 0.38 94.19 51.80 0.55 44.7%
11 Atico Mining ATY.v 0.28 97.59 34.16 0.35 25.0%
12 Cordoba Min. CDB.v 0.16 79.45 31.78 0.40 150.0%
13 Amerigo Res ARG.to 0.205 173.61 26.04 0.15 -26.8%
14 Hot Chili Ltd HCH.ax 0.09 420.12 21.85 0.052 -42.2%
15 Revelo Res. RVL.v 0.055 99.19 7.94 0.08 45.5%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg 29.30%
And I thought that the week before was impressive, with a 7% gain. The world went crazy for
copper names and bought anything that
moved thanks to the pop in copper prices and The Copper Basket 2016, weekly evolution
the general mining sector rally. Chief winners 30%
were among the illiquid and/or beaten down
20%
names which found new cash flowing into
their shares for the first time in ages. 10%
0%
We did have one loser on the week, Hot Chili
(HCH.ax) down 21.2%. All the other 14 were -10%
winners and hold onto your hats, because the -20%
list of double-figure percentage winners isn’t
just good, it’s eye-popping. So we’ll do it like
this for once:
1. Cordoba Minerals (CDB.v) up 81.8% (yup, eighty-one point eight percent)
2. Copper Fox (CUU.v) up 56.0%
3. Nevada Copper (NCU.to) up 45.3%
4. Capstone Mining (CS.to) up 45.0%
5. NovaCopper (NCQ.to) up 36.4%
6. Copper Mountain (CUM.to) up 34.7%
7. Reservoir Minerals (RMC.v) up 22.3%
8. Ivanhoe Mines (IVN.to) up 19.1%
9. NGEx Resources (NGQ.to) up 15.9%
10. Western Copper & Gold (WRN.to) up 14.6%
11. Revelo Resources (RVL.v) up 14.3%
12. Atico Mining (ATY.v) up 11.1%
And HudBay doesn’t even make the list with a week-over-week gain of “only” 9.5%. The only
one missing from the roll call is Amerigo, which could only move a penny on the week.
Aside from the general feelgood factor for mining sector stocks, the driving force for the
massive wins in copper juniors, explorecos (and bigger players too, check the scores registered
by the larger cap industrial metals names at your leisure) is found right here below in these two
charts (as with last week going with the daily and the hourly again, perspective and that):
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dr3naj ht01 ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht6
source: IKN calcs

Of the two, the one that really hits my eye is the hourly (right) and the incessant buying over
all five days, non-stop 24/7 hitting the ask.
And yet...yet, in among the bullish fanfres and high-fives there were words that deliver a big fat
“danger” sign to the market. They were all-but ignored of course, I didn’t catch them being
bounced through English language bizwires or trade media system very much (they got way
more attention in Spanish language down this way though, I saw copies of the interview in just
about every media channel I use) but all the same they were delivered and by none other than
the head man at the biggest copper producing company in the world Chile’s State-run Codelco.
In an interview with Bloomberg published Wednesday (7) while attending the BMO Conference
in Floria, Codelco chairman Oscar Landerretche predicted that copper would “probably fluctuate
at around $2 to $2.10 a pound for a couple of years, with extreme volatility”, talked copper
supply surpluses (2016 and 2017) and deficits (2018 onward), and said that people who think
copper will rise above $3 a pound “must have some secret information that we’re not aware
of...it doesn’t look very plausible.”
Those are nice quotes, but what’s going on right now to make copper pop the way it has? To
begin with the Landerretche position, I readily agree with the “extreme volatility” idea behind
copper, it’s always going to be pushed and pulled by those with a penchant for trading rumours
and hearsay, as this week readily demonstrates. To that end, here’s a example of the
shameless bullishness in the market when the very same Bloomberg uses this as one corner of
a “four reasons why copper’s bullish” piece (8):
Warehouse Inventories
Stockpiles in warehouses tracked by the London Metal Exchange, the biggest metals
bourse, have been falling. They declined this week for a ninth straight day to the lowest
level in more than 13 months.
"The copper market is fundamentally still relatively tight," Leon Westgate, an analyst at
ICBC Standard Bank Plc, said by e-mail. "Stockpiles are definitely shrinking."
Cherry-picking just the LME inventory data, completely ignoring the massive rise in SHFE
inventories to all-time record levels (see below) and using it as a “fact” to underpin a rah-rah
piece on copper is everything I’d ever want from a fade in my business rag report. To round off
I’m also in line with the leery about real end-user fundies in copper and the market surplus
which will certainly cap any rally (the question is always “when”).
But the plain fact is that copper prices are up, there has to be a reason behind that. If it’s
“buying copper as an asset class” again, a trend we saw in the Far East a couple of years ago,
9

it’s one which will end in tears. If it’s straight speculation by big players, the medium term will
see the effect level out but it’s a fair reason to get on board (they say that you have to keep
dancing until the music stops). On the other hand, a longer-term boost may be from what we’re
hearing about new rounds strategic buying and stockpiling by Chinese State entities, which
happened in December and is rumoured to be happening again. There’s a logical underpinning
here, as if copper is expected to be in supply surplus for the next two years and then go into
deficit, strategic purchases today would flatten out that effect and buyers with deep pockets get
their bargain prices.
This time last week I was “let’s give the copper world two to three weeks to show resolution”.
I’m sticking with that, as today there are way more questions than answers. My gut feeling is
still squarely bearish but it isn’t a dogmatic position either, I’d be happy to switch into bullish
mode and join the bandwagon if the data demands such. But my stars, the copper universe is a
fascinating place from which to watch the market right now.
Now for the regular weekly update of copper warehouse inventories, in bullet point form:
• Total world copper stocks in the three official warehouse systems rose by an even more
significant amount than they dropped the week before last, up 18,266 metric tonnes
(mt) (+3.4%) to finish Friday at 552,856mt.
• Shanghai stocks were the big mover and your author’s Christmas “wish” has come true.
SHFE went through the 300k inventory barrier and into uncharted waters, up a big
29,083mt (+10.5%) on the week to finish at 305,106mt. It’s a whole new world out
there, but we need to underscore that the market managed to shrug off this ostensibly
bearish data and plough copper higher.
• The LME dropped again, down 10,525mt (-5.3%) to end Friday at 186,700mt. Copper’s
looking thin on the ground in what used to be the main price discovery system...but not
any more.
• The Comex copper warehouse numbers continue to do nothing but at this new, higher
level. Stocks dropped a minor 292mt and the number at the end 61,050mt. It’s still
11% of the world total in official exchange warehouses and that’s not to be sniffed at,
but the return to inertia means it’s back to being a non-factor.
Here's the Shanghai-only chart, which shows the punch through 300k at the SHFE for copper
for the first time ever. This is supposed to be bearish and if you couple this fundy data with the
declarations of Mr Codelco last week (above), there’s good reason to consider whether this pop
higher in copper will stick. Yes I’m leery and that wasn’t a good thing last week, it got me
missing the big trade pop. But that’s the way fundy-heads work, they’ll search for the flaw in
the argument and “it’s going up because it is” doesn’t cut enough ice.
Shanghai Futures Exchange Warehouse Stocks, 2014-2016
340000
300000
260000
220000
180000
140000
100000
60000
10
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 ht6ram
Mt Cu
source: Cochilco

Now for comments on a couple of our basket stocks:
Reservoir Minerals (RMC.v): The big news of the week in copper was the announcement
Thursday evening (9) that Lundin Mining (LUN.to) was taking over most of the Freeport (FCX)
option on the Timok project in Serbia, the JV FCX has run with RMC to date. The deal price is
$262.5m, with LUN paying $135m of that up front and the balance in installments over an
agreed time period, including exploration costs payments (see the NR for the nitty-gritty, or do
like me and tune into the Conference Call set for tomorrow morning).
The deal centres on the main high-grading Cukari Peki target at Timok, with LUN taking over
the FCX option to earn in up to 75% (with RMC keeping 25% and getting free rise to
feasibility). That’s now being called the “upper zone” in the new deal. LUN is also taking 21% of
the eventual 75% of FCX’s option on the “lower zone” at Timok (that’s the part with the deep
and potentially very large porphyry mineralization), which means that if things go swimmingly,
the split come the feasibility study will be FCX 54%, RMC 25%, LUN 21%.
But the real deal here is the upper zone, that high grade discovery that made RMC and put
Timok on the map as a world-class discovery. That Thursday evening I chewed over the deal
with a couple of industry mailpals and though at first my impression was the deal made RMC
look expensive, that was only a first hunch and on getting down with the numbers I believe it
prices RMC fairly at its current price. RMC strongly on the new on Friday of course, but that
looks more like a mix of good timing in a buoyant market plus a splash of speculation about the
ROFO clause.
The ROFO, i.e. right of first refusal, is built into the original option deal between RMC and FCX
and states that RMC has the right to match any offer received by FCX within 60 days. That’s
now in play and although it’s pretty clear that the small RMX doesn’t have the financial
wherewithal to match the price on its own (and then pay many many millions to move the
project forward, instead of having its current 25% free rise to feas level), it could solicit a third
party to come in, buy out RMC and scoop the whole prize. That would have to big a big, world-
level mining player that likes copper and is looking for a new project, which cuts the field down
to just a handful of names immediately. Perhaps Rio Tinto (that was a mailpal suggestion, it
makes sense), perhaps Mick Davis and his cashed-up X2 vehicle, perhaps even Chile’s Codelco
(there’s a undercurrent of talk in Chile
about the need for Codelco to spread its
wings and become a world player). In
short, there’s a chance that some larger
player takes out RMC in the next 60 days
and though I don’t think it’s a probable,
it’s a possible. That’s what might account
for the trading in RMC on Friday
because, buyouts aside, in my opinion
the move the close at $4.89 on Friday is
adding too much into its market cap on
what looks like a straight-line financial
deal. In fact on Thursday one of my
comments (after eschewing hunches and
looking at numbers for a while was, “I
wouldn't be surprised to find out (years
down the line) that LUN and FCX used the RMC market cap as a benchmark for valuation”.
There are things to like about this deal, not least that we’ve known for a while FCX has its own
financial problems and giving this high-grade deposit to LUN means it has a better chance of
being developed more quickly and going into production. LUN likes these high grades in remote
corners, as Tenke Fugurume bears witness. Also, as the anal yst at Haywood pointed out in
their note to clients on Friday, LUN is a better match for RMC because the needs and wants of a
true major aren’t often aligned with those of a junior, for example a major will want to do all
the exploration, engineering and technical work in-house without announcing or explaining the
11

step-by-steps to the market, while a junior lives (or dies) on newsflow.
So on a conceptual level the news last week was a positive for RMC, the passive partner in the
Timok deal. Yes there is a low possibility shot at seeing RMC bought by a bigger player, but
overall I like the concept of the new deal more than the hard number that back it up, which
state that the deal went through “at RMC’s value”, not less nor more. I wouldn’t be a buyer of
RMC today on this news but if I were a holder I wouldn’t sell, either.
Ivanhoe Mines (IVN.to): In tune with many
other copper stocks, IVN shot higher last week
but unlike quite a few I could mention, it did
so from an already liquid treading position and
rewarded traders who saw things clearly (or at
least more clearly than your author, the fool
who thinks about adding IVN without doing
so).
Also unlike many others, there could be a
good reason behind the move that started
Wednesday and kicked on in the subsequent
two days. Here’s the sequence:
1) It’s PDAC next week
2) Rick Rule is scheduled to be the guest on BNN’s one hour long ‘Market Call’ program on
Monday, live and direct from PDAC ground zero.
3) Rick Rule has made this an annual appearance on BNN and every time he does he
makes Ivanhoe Mines (IVN.to) one of his Top Picks.
4) If PDAC had fallen in the second week in January I doubt it wouldn’t have made a
difference but the way in which the metals market has suddenly picked up means there
could be a real difference made to IVN by the voice of a industry capo such as Rule.
5) Another highly respected market voice, Brent Cook (along with his new partner at
Exploration Insights Joe Mazumdar) is also scheduled to be the guest on BNN’s ‘Market
Call’ program but this time on Tuesday, again live from PDAC.
6) I have no previous knowledge on this, but I know Cook is currently long IVN.to and it
wouldn’t be a massive surprise to hear him call IVN.to as one of his Top Picks on the
show (though I’d expect he also plumps for Mirasol Resources (MRZ.v as he always
seems to call that one).
So with that all said, a word of warning as if a guy as un-tuned in as I can work out that IVN is
likely to get a PDAC promo boost, you can bet a lot of other people worked this out before me
and have traded on the thought as well. We may be in a “buy rumour sell news” situation on
IVN.to. And then again, another big shift in the market price for copper, up or down, and all
bets are off.
HudBay (HBM.to): The idea of shorting HBM is becoming very tempting, as the continued
rally is supposing that there’s a lot of good news already baked into this company’s share price.
It’s not enough that copper stays at U$2.30/lb to justify the recovery we’ve seen, copper needs
to go a lot higher in order to cover the precarious balance sheet position at HBM.
Last week I was “give it two or three weeks” in order to see resolution and a clear trade
opportunity. That may come sooner, as the heavy gains we saw last week have all the signs of
misplaced optimism in the metal. HBM was a fundamentally unsound company three weeks
ago, it’s an unsound company today. The difference is that its market cap has nigh-on doubled
in the period so if things don’t continue to get better, HBM will have to face up to its less than
rosy reality at some point. That or run a placement , which would also do the stock price in.
The trouble with a short on HBM is that its eventual success or failure isn’t connected to the
12

company, but to the copper price. Get the timing wrong, watch a little more of the extreme
volatility that Oscar Landerretche spoke of last week take copper 10c/lb higher on a spike, and
the short could quickly go deep underwater and take time just to get back to break-even. I’m
going to watch the copper market price action very closely in the days to come, more closely
than gold or any other issue, it’s the key to the big game and it’s also the key to either passing
on HBM or placing a short bet.
Cordoba Minerals (CDB.v): Wow. Okay, so I don’t own any but don’t say I didn’t pick this
150% winner out of the pack as a decent risk play on the sub-sector. My trading instincts may
be too cowardly for my own good, but the nose for a bargain is still there.
Copper Fox (CUU.v), Nevada Copper (NCU.to). NovaCopper (NCQ.to): In any serious
courtroom, after the case for the prosecution we are duty-bound to listen to that of the
defence. Listed here are three stocks that put in large percentage gains, but from heavily
beaten down positions and on a small uptick in traded volumes. This sticky, illiquid stocks jump
this way when tides rise, not when their own prospects improve. Things like CUU are plain
horrible and a waste of time unless you’re the CEO, which makes it very lucrative to keep the
story spinning along. And talking of CEOs the salary Rick van Neuwenhoweveryouspellit pulls
down as head of NCQ (C$400,000 in cash every year, bonuses on top of that) is obscene for
this size of company in a years-long bear market with a share price performance which leaves
little pride.
Once upon a time all three of these did regular and liquid daily trading, but they’ve been
reduced to bit-part players. So when you see them all jump by large percentage amounts in line
with companies with better assets, better management and better attitude towards their
shareholders it adds more doubt to the veracity of the move last week. Will Canada keep
feeding the animals (10)? Only time will tell.
The Low Cost Producer Basket
After 9 weeks of 2016, the Low Cost Producer Basket shows a gain of 56.55% to level stakes.
company ticker price 1/1/16 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Barrick ABX 7.38 1164.67 15.99 13.73 86.0%
2 Newmont NEM 17.98 529.12 13.82 26.11 45.2%
3 Goldcorp GG 11.56 830.22 12.57 15.14 31.0%
4 Franco Nevada FNV 45.75 176.298 10.09 57.26 25.2%
5 Agnico Eagle AEM 26.28 217.67 7.47 34.30 30.5%
6 Ang/Ashanti AU 7.10 405.27 5.24 12.92 82.0%
7 Detour Gold DGC.to 14.41 170.85 3.62 21.18 47.0%
8 Sibanye Gold SBGL 6.09 228.71 3.19 13.93 128.7%
9 New Gold NGD 2.32 509.16 1.90 3.74 61.2%
10 Buenaventura BVN 4.28 254.19 1.40 5.51 28.7%
Prices in U$/NYSE tickers, except DGC.to (CAD$) Portfolio avg 56.55%
An interesting result for our larger cap producer tracker, worthy of closer attention than most
weeks. The headline scores are good, with a basket average that moved up another 6.38% and
eight winners (not listing them all), but this time the notable and big moves in the smaller end
of the mining market cap universe wasn’t matched, or even approached, by the bigger names.
Best of our bunch was New Gold (NGD up 18.4%...after I’ve sold, grrrr) which is one of the
smallest group members here. Then came Goldcorp (GG up 9.2%) on the rebound after its
awful time of the previous week...bargain hunters who can stomach the GG new normal, I can
only suppose.
13

The Low Cost Producer Basket: Weekly performance
60% and comparative to GDX control
50%
40%
30%
20%
10%
0%
-10%
14
dr3naj ht01 ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht6
basket
gdx control
source: Google Finance, IKN calcs
Apart from those two, the gains were pretty modest compared to the recent impressive weekly
returns (e.g. Detour up 0.57%, Barrick up 1.5%, Sibanye up 3%, Newmont up 3%) and the
selling and profit-taking on Friday afternoon
Low Cost Basket: Percentage difference between
in the face of (what may turn out to be
basket and GDX control, 2014
temporary) weakness in the gold price was
2%
swift and heavy. That subject also brings 0%
into play our two weekly losers (FNV and -2%
-4%
AEM), two of the companies that have
-6%
captured headline-level attention so far this -8%
year. -10%
-12%
-14%
The other aspect to all this is that GDX took
-16%
over a percentage point out of our list. Not
such a big thing all by itself, but the
currency and forex angle (as seen in the
intro above today) may play a part of this.
We have Detour Gold (DGC.to, Canada ticker only), Sibanye (SBGL, South Africa main ticker
with US ADR) and AngloGold Ashanti (AU, South Africa main ticker), companies that have share
prices driven by non-US stock markets. Admittedly AU is an outlier on this working theory (AU
up 6.3% on the week, pretty decent) but I do get the feeling that forex, up to now a tailwind
for stocks such as SBGL, may suddenly become a headwind. We’re still 13% ahead of the GDX
and that’s a lot by any measure, but the dynamic was different.
Goldcorp (GG) (G.to): GG bounced straight back from its ‘Kitchen Sink Quarter’ week as
reported in IKN355 last weekend and added 9.2%, by far the best return of the Tier One
names. Gold price forgives all sins, party on Garth.
Regional politics
Latin America at PDAC 2016
Here are some of the highlights to watch out for as Latin America’s mining countries present
their cases at PDAC 2016:
• Mexico’s ministerial level team, who will tell you that mining is welcome in their
country. Cocktail reception to follow (tequila).
• Argentina’s ministerial level team, who will tell you that mining is welcome in their
country. Cocktail reception to follow (malbec).
• Peru’s ministerial level team, who will tell you that mining is welcome in their country.
Cocktail reception to follow (pisco sour).
• Chile’s ministerial level team, who will tell you that mining is welcome in their country.
Cocktail reception to follow (also pisco sour, but inferior to that of the Peru reception).
• Colombia’s ministerial level team, who will tell you that mining is welcome in their
dr3naj ht01 ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht6
source: ikn calcs, NYSE/Nasdaq data

country. Cocktail reception to follow (fruity rum punches).
• Ecuador’s ministerial level team, who will tell you that mining is welcome in their
country. Cocktail reception to follow (canelazo, one of the world’s nicest warm punch
drinks).
• Paraguay’s ministerial level team, who will have a big continental map in their booth so
they can show you where their country is. Cocktail reception to follow (tereré, you
won’t like it).
In short, life is perfect in Latin America, opportunities abound, mining companies are welcome
everywhere, permitting is easy, locals are hard-working and they like mines next to their
residencies. All you as mining companies need to do is to believe us the local politicians, come
and invest your money and then repeat our refrains to your investors. This mining thing, beats
me why people think it’s complicated.
China: Nothing’s impossible
This weekend we got the following from the business newswires out of China (11):
BEIJING – China's top economic planning official says it is impossible that the
Chinese economy would have a "hard landing" — or a sharp slowdown — and offered
assurances that it would continue to contribute to global growth, not hinder it.
Xu Shaoshi, director of the National Development and Reform Commission, said at a
news conference Sunday that China's economy has inner flexibility and abilities to
resist risks.
Now I’m not in a position to judge the financial expertise of Mr. Xu Shaoshi, but I know that
when financial academics talk in absolutes it sends a shiver down my spine. On reading that
last night, my mind went back eight years to this (12):
"We've got strong financial institutions . . . Our markets are the envy of the world.
They're resilient, they're...innovative, they're flexible. I think we move very quickly to
address situations in this country, and, as I said, our financial institutions are strong."
That was Hank Paulson, former top dog at Goldman and at that time U.S Treasury Secretary,
appearing on Fox News (bless their cotton socks) in March 2008. For those of you who didn’t
experience the “fun” of the subsequent months that year, you might want to start with the
excellent documentary ‘Inside Job’, it fills in a lot of the details. The recent Oscar nominated
‘The Big Short’ is an entertaining way to spend a couple of hours, too.
Anyway, China and its experts and hubris: Not my idea of a great combination.
Peru: Mining becomes a campaign issue
Five weeks to go and as the candidates hit Lima escape velocity and do the rounds of the
provincial towns and cities, the issue of mining becomes a hotter topic (Limeños prefer to
ignore it until it goes away). Here are a few declarations and situations from the week, then
your author lays down the problem the vote-grabbing strategies of all the major candidates are
currently creating:
On her visit to Cajamarca province Keiko Fujimori had this to say (13) about the contentious
Conga gold mine project: “Humala betrayed the people of Cajamarca because when he was
candidate...he said “Water yes, gold no”. And later he changed his opinion...from the comfort of
the presidential chair he said “Conga yes”. And the Cajamarcan people don’t pardon this type of
change of opinion”. On that she was on safe ground, telling the people what they want to hear.
Then came the policy statement, “I relieve that as things stand, the Conga project cannot move
forward. It needs to recuperate the trust of the population. There needs to be an aggressive
project of reservoir construction, irrigation channels and roads that allow farmers to get their
produce to market. And later we can talk about private investment projects, but later on. For
the moment, no”.
15

Over at the other hot-politics mining project, Tia Maria in Arequipa region, candidates are lining
up to do the same thing:
1) Criticize the positions of their opponents.
2) Say exactly the same thing as their opponents.
Here’s Alan García (14): “In my opinion these (Tia Maria yes/no) and not the only two options,
we don’t think in black and white. When I’m asked if Tia Maria should go or stop in my opinion
if, despite dialogue, the population (around Tia Maria) say no at the end then the project
cannot go ahead....I’ve just told you my position, if the people say no, then it’s no!”.
Here’s Julio Guzmán on Tia Maria (15) while in Arequipa on Tuesday, who found himself in
problems after being too wishy-washy for the taste of Arequipeños by saying, “Tia Maria has
the possibility of moving forward as long as it benefits everybody and the solutions are reached
by consensus”. After being harangued by a group of locals who didn’ like that message he
changed it to, “When I say that if the people of Islay (the local province of Tia Maria) decide
that it doesn’t go forward, then the project doesn’t go forward, period. That is my position, if
the people say noy, then it’s no!”
Here’s Keiko Fujimori again (16), this time also on Tia Maria while in Arequipa this weekend:
“Southern Peru lied to the population (when they said that) it wouldn’t affect agriculture”, which
was again a crowd-pleaser, followed by. “After three people died, only then did the company
decide to construct a desalinization plant, which generates mistrust and against among the local
population...it will take (Southern Copper) years to recover the lost trust of the people”.
And just to add another to the pot about another project, while in Puno region the energy
spokesperson for the Julio Guzmán candidacy, one Pedro Gamio (who also happened to be a
Vice Minister of Energy between 2006 and 2008 during Alan García government), talked about
the Santa Ana (Bear Creek) project by saying that an Guzmán government would re-start the
Santa Ana project, which got an immediate and very vociferous reaction from the Aymara
people around that particular project. The president of the Defence Front of the South Puno
Zone (the organization that got the project stopped in 2010) considered the Guzmán team’s
statements highly provocative, would organize a march against the candidate and said, “Who
does he think he is? We have said no, and we are not going to allow the project to proceed.
This is cost us many days of suffering and struggle”. On hearing this Gamio denied that he was
in favour of the project and said that if the people say no, that must be respected.
You notice the similarity too? The presidential candidates have all hit upon the line of least
resistance, that of “if the people say yes then yes, if no then no”. Pure vote-winning populism
and a story we’ve seen too many times already in Peru, but it’s getting long in the tooth and
people aren’t going to forgive so easily in the next cycle when (not if) the eventual winner goes
back on their word. Ladies and gentlemen, welcome to the latest can of worms being opened
by the inept political class of Peru. When one of these people makes it to the big job (my
money has been on Keiko since December 2015 (17) a call that’s looking even more likely now)
the national mining sector policy will be at the mercy of every provincial leader that wants to
make a name for her or him self. And for a topical example, the Islay region population around
the Tia Maria project are set to vote on whether to re-start protest marches on March 9th (i.e.
Wednesday) (18) after locals who heard the declarations of Daniel Muñiz, head of finances at
Grupo Mexico (parent of Southern Copper) who said two weeks ago that the project would start
operating in 2017. Expect
The precedent being set in Peru’s mining industry under the next government is at the very
best “same as the mediocrity of today”, more likely it’s going to get worse. The aforementioned
flagship projects of Conga and Tia Maria won’t stand a chance of going ahead unless real
agreements are made between companies and locals, which is unlikely and even if they happen
will be very costly (and set another precedent). Meanwhile, those projects that have put in
16

place solid and proactive community relations programs will be in a far better position to move
forward than those with the arrogant “we got the permit, get out of our way brown person”
attitude so typical of the large mining company that’s stuck in the 1980s. See Buenaventura at
San Gabriel in IKN355 last weekend for further details.
For the record, I own share sin Regulus Resources (REG.v) and Minera IRL (IRL.to) because the
people on the ground in those companies do community relations the right way.
Peru’s presidential election at “can’t organize a booze-up in a brewery” level
First the facts: There is an appeals process for both and that happens tomorrow Monday, but
on Friday two of the main candidates, Julio Guzmán and César Acuña, were excluded by Peru’s
electoral oversight body, the Jurado Nacional de Elecciones (JNE). Guzmán, lying a clear second
in the polls and the most likely to reach the ballotage with Keiko Fujimori, was excluded
because “at least ten citizens filed official complaints” about the technical procedures behind
Guzmán’s original inscription to be a presidential candidate in 2015. Meanwhile, Acuña has been
barred because he’s been found guilty of gifting U$10,000 to a group of people who work in a
local market in one of the Lima suburbs and that kind of cash-for-votes move is strictly
prohibited.
Strangely, it was left to both those candidates main rival to say it best, as on hearing of the
bars on their candidatures Keiko Fujimori said on Friday (19) while on the campaign trail in
Arequipa (translated), “There’s 37 days to go for the election and we Peruvians still don’t know
who the candidates are”. She went on to say, “I understand that (the barring of) both
candidates...are preliminary decision. They have the opportunity to appeal and that will be
handled by he JNE”. That’s also true and assuming they both appeal the ruling tomorrow
Monday, we should have a judgment handed down by next Saturday. We’re now 35 days and
counting by the time we have a ruling that will be 30 days, in other words less than a month
before 30 million people get to choose their next Head of State and we don’t know the official
list of candidates. It’s madness. What is notable however is how Keiko, leading in the voter
intention polls by a big gap (she’s generally over 30%, the nearest rival is under 20%), has
been running a serene and smooth campaign with no hitches and very little controversy while
all those in the race for the other run-off spot have had non-stop glitches and hitches.
Argentina: The bond holdouts get their deal
Probably. There are still details to be tied up but Argentina’s 50 year old Minister of the
Economy, Alfonso Prat-Gay, (I do not make these names up) went to Argentina’s Congress and
announced (20) the country would emit bonds to the tune of U$11.684Bn in order to pay the
hold-outs (which may eventually go to U$15Bn) at a coupon of between 7% and 8%. The
government people duly cheered the fact that the country was finally coming out of default
while the government opposition had its scheduled field day, with perhaps the quote of the
afternoon coming from ex-FinMin under Cristina Axel Kicillof who pointed out to the assembly
that Argentina was paying U$220m just to the lawyers of Paul Singer. And that’s a lot of
money.
Market Watching
Minera IRL (MIRL.L) (IRL.to): Patience required
On March 3rd we got a NR (21) from the walking wounded company we know as Minera IRL,
updating on corporate matters and on its listing requirements on the London (AIM), Canada
and Peru stock exchanges. The main points are bold-typed in this section of the NR:
“...the Company must appoint a replacement Nominated Adviser and re-commence
trading on AIM on or before 22 March 2016 in order to maintain its admission to AIM.
The board had been in discussion with several Nominated Advisers, however it has
been determined that it may not be practical to appoint a replacement Nominated
17

Adviser by 22 March 2016, in which case the Company's admission to AIM will
be cancelled with effect from 7:00 am on 22 March 2016.
Once the Company has resolved the matters that led to the suspension of trading on
21 September, 2015, and has published its 30 June 2015 interim financial statements,
and filed all other outstanding continuous disclosure documents, the Company
intends to apply to the Canadian provincial securities regulatory authorities for
revocation of the cease trade orders which were issued in 2015. This will allow
the Company to apply for listing of the Company's shares on one of the
Canadian Stock Exchanges. At the same time, application will be made for lifting of
the suspension of trading on the Lima Stock Exchange (BVLAC.) In the event the
Company's admission to AIM is indeed cancelled on 22 March 2016, the Company
intends to provide guidance to those shareholders who purchased through AIM on how
to deal in the Company's shares.
Bottom line: We can expect IRL to be de-listed from the London exchange, but re-listed in
Canada soon. It will also be unfrozen in Lima once the internal issues are resolved. As for more
news and things, I cannot comment on the internal negotiations at IRL (certain corners of the
negotiations are still being run by some of the most nefarious, self-serving specimens of sub-
humanity who don’t like their names in print and may delay the deal if so) but what I will say
are two things:
1) From mails received, the main fear for shareholders is that the shares are going to be
worthless at the end of this process, which is of course wholly understandable. I can
tell you as a fellow shareholder that I am very confident my shares are going to be
worth real money and have their rightful part of the Ollachea project once this whole
sorry soap-opera is over.
2) We’re close to a definitive deal, I at least a solid working plan to get a final deal in
place to be done in this month of March.
3) One day I will write a novel.
Yamana (AUY) (YRI.to) will announce on Brio Gold this week
Expect Yamana Gold’s (AUY) (YRI.to) Peter Marrone to use the stage of PDAC to announce the
re-boot of his plan to spin out the Brio Gold assets from the company (now with added
Carpathian, of course).
Dealflow is the key
The best sign that the sector is coming back to life doesn’t come from the talkers, but the
walkers. Consider this:
• Tahoe Resources buys out Lake Shore Gold
• Franco Nevada raises U$920m in an equity placement
• Kinross Gold raises U$250m in an equity placement
• Endeavour Mining buys out True Gold
• Pretium Resources raises U$130m in an equity placement
• Lundin Mining commits $263m to buy (a lot of) Freeport’s end of the Timok copper
project
And those off the top of my head, I’m sure you can add a few of your own. No matter what my
opinions are of the quality of the deals and who anre the winners/losers in each one, that’s a
strong list of big and bigger ticket deals which state clearly that the sector is back to life. Yes,
this time it is different.
Forex update
Two weeks ago in IKN354, in a couple of charts that we’re easy to read (see ‘Chart complaint’
last weekend), we noted the reversal in the Loonie versus the US Dollar and mused on what
that might mean for costs in the mining industry. This week we focus on what’s happening in
the LatAm region with this chart of the year in the US Dollar versus:
18

• The Brazilian Real
• The Colombian Peso
• The Chilean Peso
• The Mexican Peso
• The Peruvian Sol
And that’s not all, check out last week in those five currencies against the USD:
Yes that does indeed say that the Brazilian Real appreciated by 6% against the dollar in just the
last five days, the Colombian Peso just a couple of tenths behind that and the other three
appreciated 2% or 3% against the Greenback. Ladies and gentlemen, forex moves are always
double-edged swords, it’s worth keeping that in mind once the euphoria bounce wears off and
project fundamentals begin to get calmly reconsidered.
Sandstorm Gold (SAND) (SSL.to) redux
Last week’s piece on Sandstorm (SAND) elicited decent feedback (I apologize if I didn’t answer
yours, but I can be pretty darned ignorant at times and I did get back to most of you...I think),
for which I thank you. I have a couple of extra thoughts to add:
1) To be clear, the SAND report last week was pipe-opener, it wasn’t the deep dive on
the numbers. If and when the purchase decision gets made round these parts I’ll be
doing all those for you (and me). The opportunity window remains “mid-March or
later”, for this stock and the others on my list.
2) From the feedback received, one of the repeated comments (and it’s not the first time)
was that covering larger caps/more liquid stocks/better known companies is a good
thing for you the reader. In general I agree, in fact I like doing these more complicated
companies, but the number of moving parts means it’s not as easy to present the
whole case in one shot (it’s not a zero debt one-pit miner, that’s for sure). However,
what with there only being 24 hours in a day and wanting to get deep on any company,
19

never mind whether it’s big or small, is a restraint on a practical level. The IKN Weekly
has other things to cover, so I’d humbly submit that those of you who want this
publication to go active coverage on SAND, ABX, GG, AEM, NEM etc would do well to
get their market information for a brokerage rather than a newsletter; they have a
couple of dozen people hanging round offices and can handle the information load.
3) I received a couple of mails from people who said (one paraphrase, one quote
verbatim) that they “don’t get the streamer model”. That’s fair comment, it’s a different
fish from the mining corporate structure and that’s why I alluded more on the cash flow
side of the financials to my normal obsessions with balances a P&L. What I will say at
this point is that to be a fully functional and mature streaming (or streaming/royalty to
be exact) play, in my considered opinion the company HAS to offer a dividend to its
shareholders. SAND doesn’t do that yet, it’s not at the mature stage of its development
and that’s one of the things I most like about this current window of opportunity.
4) As for trading last week, here’s a ten day chart with some words scribbled on it. My
point is that SAND did nicely in
following the market optimism from
midweek onward, but it’s one of
the stocks that most overcooked on
the Jobs Report reaction and then
the gold selling on Friday. This
might not be a bad thing for a
person like me, on the sidelines
waiting for the right entry point.
Conclusion
IKN356 is done, we end with bullet points:
• I care more about copper than anything else at the moment, it’s the puzzle to solve for
riches and wealth in 2016. As at this weekend it’s still far too risky for my blood to
wade in and go long, there’s a great deal of perfect future already baked into some of
these stocks and those going long now are very exposed to a reversal.
• If Dalradian (DNA.to) gets sold next week my cash raising will be done with, now that
Teranga, Sandspring and the B2Gold trading position have all been liquidated. A couple
of weeks of patience is now required, only then will I know whether the current IKN
roadmap is wrong.
• Enjoy PDAC, people. Have a beer, relax, and join the thronging masses at the
newsletter writers’ presentation.
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
20

Footnotes, appendices, references, disclaimer
(1) https://www.streetwisereports.com/pub/na/why-brent-cook-and-joe-mazumdar-are-doubling-down-on-the-
exploration-and-the-insights
(2) http://finance.yahoo.com/news/nevada-sunrise-drill-program-mobilization-133000198.html
(3) http://finance.yahoo.com/news/nevada-sunrise-drill-program-mobilization-133000198.html
(4) http://finance.yahoo.com/news/first-dore-bar-produced-starcores-140000987.html
(5) http://finance.yahoo.com/news/lara-signs-option-acquire-damolandia-130000777.html
(6) http://finance.yahoo.com/news/lara-reports-progress-tessarema-earn-130000879.html
(7) http://www.bloomberg.com/news/articles/2016-03-02/world-s-top-copper-miner-says-rally-will-fade-as-gluts-persist
(8) http://www.bloomberg.com/news/articles/2016-03-03/four-charts-show-why-copper-s-comeback-could-have-staying-
power
(9) http://finance.yahoo.com/news/lundin-mining-announces-agreement-acquire-023000163.html
(10) http://incakolanews.blogspot.pe/2016/03/will-canada-feed-animals.html
(11) http://www.foxnews.com/world/2016/03/05/china-top-economic-planner-hard-landing-impossible.html
(12) http://www.realclearpolitics.com/articles/2008/03/secretary_paulson_on_fox_news.html
(13) http://elcomercio.pe/politica/elecciones/keiko-fujimori-afirma-que-conga-no-viable-ahora-noticia-1883267
(14) http://diariocorreo.pe/politica/alan-garcia-sobre-tia-maria-humala-cambio-a-conga-si-en-un-mes-y-julio-guzman-en-
una-hora-video-657586/
(15) http://www.capital.com.pe/2016-03-01-youtube-julio-guzman-tuvo-acalorada-discusion-con-arequipenos-por-el-
proyecto-tia-maria-noticia_847118.html
(16) http://gestion.pe/politica/keiko-fujimori-southern-peru-mintio-poblacion-que-tia-maria-no-iba-afectar-agricultura-
2155783
(17) http://incakolanews.blogspot.pe/2015/12/ten-random-predictions-for-2016.html
(18) http://elcomercio.pe/peru/arequipa/retoman-movilizaciones-contra-proyecto-minero-tia-maria-noticia-
1884180?ref=portada_home
(19) http://elcomercio.pe/politica/elecciones/keiko-fujimori-37-dias-eleccion-aun-no-sabemos-quienes-son-candidatos-
presidenciales-noticia-1883914?flsm=1
(20) http://www.lanacion.com.ar/1877035-emitiran-bonos-por-us-11684-millones-para-el-pago-a-los-holdouts
(21) http://www.investegate.co.uk/minera-irl-limited/mkw/update-regarding-resignation-of-nominated-advis---
/20160303065949M3452/
Appendix 1: Flash update dated Thursday March 3rd 2016:
Good Thursday morning, 11am local time, an hour and a half after the open and a very quick mail.
1) I've decided to sell my Sandspring (SSP.v) on today's pop. I'll take what the market offers.
2) My sale order is in for Teranga (TGZ.to) at 60c. If they go at that price, they go.
That's all for now.
Best, O
21

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
22

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
23

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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