IKN #359Premium

The IKN Weekly
Week 359, March 27th 2016
Contents
This Week: Trade heads-up, In today’s issue, Gold retraces.
Fundamental Analysis: NOBS report on INV Metals (INV.to).
Stocks to Follow: Overview, B2Gold (BTG) (BTO.to), Nevada Sunrise (NEV.v), Starcore
International (SAM.to).
Copper Basket: Overview, NGEx Resources (NGQ.to), Hot Chili (HCH.ax), Cordoba Minerals
(CDB.v).
Low Cost Producer Basket: Overview, Sibanye Gold (SBGL).
Regional Politics: Regional Risk Review deferred.
Market Watching: Silver Range Resources (SNG.v): Buying a few, Minera IRL (IRL.to)
(MIRL.L): The re-tooling begins.
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
Trade heads-up
In normal style, a top-of-the-shop notification of new trades. Assuming the correct entry prices
are available I plan to buy some INV Metals (INV.to) next week, see the Fundies section for
more on that. I’m also going to fish for a few shares of Silver Range Resources (SNG.v) next
week though in this case I’m going to be very price-sensitive and won’t pay anything above 8c.
That’s also going to be a very small trade, a stocking-filler more than anything else, because
with a full nine positions available on the Stocks to Follow list and cash ready to deploy, last
week’s gold drop has nudged me into a little bit of minor action.
I stress, however, that the bigger trades I plan are waiting in the wings. I want gold to drop
further before pulling those triggers. For more on gold and the way I see the market evolving in
the next couple of weeks, see today’s main intro piece and then mail in to tell me I’m wrong.
In today’s issue
• Gold pulls back a little, though I think it has more to come down in the near future.
• I’m pleased about the wya B2Gold (BTO.to) (BTG) held onto its recent gains in the face
of sector selling. A decent signal.
• My own personal jury is still out on copper.
• The Regional Risk Review has been deferred until next week. I’m lazy. Happy Easter.
1

Gold retraces
Shhhhhhh!
Be vewy vewy qwiet
I'm huntin’ wabbits
Elmer Fudd, 1952
Let’s begin with simple bullet points:
• Last week gold and the precious metals miners lost ground. We can cut this in a
hundreds different ways, I’ll just offer up 2.89% lost by the main gold bullion ETF
(GLD) and the 5% lost by the main precious metals miners’ ETF (GDX) and move on.
• Since mid-February (i.e. pre-PDAC) I’ve been calling for a downturn in gold and its
merry men in March (or April). Last week was therefore expected by these pages.
• However, last week’s downturn isn’t my idea of a full re-trace and if my strategy of
raising cash in Feb/March and then buying back (in April-ish?) is going to work, gold
will need to go down further. I’m not out of the woods yet, my call isn’t the right one
unless gold moves down further.
• The dollar has bounced well from the shellacking it took on Fed day, another reason to
suppose a lack of upside in gold next week.
• Therefore and taking into account the three bullet points above, beware of my inherent
bias. I’m trying not to fall into the obvious psychological trap myself but I’m aware it’s
tainting my opinions. I can still be very wrong about this near-term strategy.
• I haven’t said anything in print about a downside target for gold to date, but all through
March I’ve had U$1,180/oz in the back of my mind. I’ll explain why below.
Gold trading suddenly went from hot to cold last week (there never seems to be a middle point
for sentiment around this metal), the inertia we’ve noticed for a few weeks finally moved into a
downturn and by way of a sidebar, as was to be expected the terrible events in Brussels were
nothing but a blip on the roadmap (we’ve seen far too much truck made of geopolitical events
affecting markets, we’re now at the point where for gold at least they’ve become instant fades
on any spikes). This is the reason I raised plenty of cash pre-PDAC (and sold most of the
positions too early, hell I’ll survive) but I’m not a buyer yet, I see more near-term downside to
come. Here’s why.
NB: Please note the cut-down Y-axis to show contrasts, not to fool your eye.
In IKN357 dated March 13th we noted how the S&P500 had quietly got back to UNCH on the
year and how around the latest 100 metric tonnes of gold bullion holdings at the biggest bullion
ETF (GLD) was showing no profit, despite all the new-found love of gold among the Wall St.
2

Trader jocks. Today we update on that situation and above is a to-date version of the GLD
bullion holdings chart (and in IKN357 I didn’t spot that the chart dates hadn’t PDFfed well,
today’s is a cleaner version).
Since IKN357 March 13th GLD has seen another 24.97 metric tonnes (+3.1%) added to its
holdings, not bad at all for two weeks. It also means that 2016 year-to-date GLD has added
181.37 tonnes of gold bullion
(+28.2%). A big tidal change
after the chronic depletions we
witnessed in 2014 and 2015. But
the timestamp I care about most
is February 10th 2016 and since
that date GLD has added 121.71
tonnes of gold bullion (+17.3%).
In this price chart right,
comparing GLD to the S&P500
index, is why:
What we’ve seen since then is a
big move back towards broad
market equities and by taking
this weekend’s close for GLD,
the person, insto or trade desk
that bought gold at any point since the big volume day of February 10th would have to be very
lucky indeed to be showing a dollar profit on the position. And as for the marker in which gold
is priced for the world, those who yet again wailed for the death of the dollar were easily
frustrated. This is an easy one to understand, as risk
goes back on and people want into the big NYSE pool.
The dollar may not be providing any return in itself,
but it’s the medium of choice for those looking for
alpha in world markets now.
I could go on and on, I won’t. The thrust of my
argument should be clear enough, you guys aren’t
stupid and should have caught on that I’m talking
about the volatile, trade-position-only section of the
gold bullion market run by the jocks and flipped
around for profits, not held long-term by the serious
sedate investor as a hedge, asset class or net wealth
protection position. With the broad markets rallying
we move into a “Risk On” atmosphere, that doesn’t
suit gold as a money position and there’s around 120
tonnes of gold (call it U$4.7Bn) now being newly held
in the last six weeks in GLD alone. For sure not all of
that will be itchy-finger near-term money now
regretting buying into a market top (or what it might believe to be a top if they fall for the guff
and nonsense coming out of Goldman Sachs about gold), but be in no doubt, at least some of
that net 120 metric tonnes most definitely is.
As for my downside target, the point at which I’ll stop the mere nibbling (at INV.to and SNG.v
next week) and start taking real bites (and it’s no secret, SAND is high on the list of real money
targets) is currently pencilled in at U$1,180/oz. I’m aware that technical anal ysts have
highlighted 1180 as a Fibonacci retrace number and I’m also aware that someone much
smarter than the Fib-only anal ysts has sketched U$1,183/oz as one of his target levels (step
forward Gary Tanashian of NFTRH), but my own predilection for 1180 is more about simple
market psychology, less about squiggly lines.
3

1) In the last week the goldbug permabull chatterers have gone full Monday Morning QB.
2) They now tell us a gold retrace was “to be expected” and is “healthy” (and fwiw I agree
on that, but my opinion is beside the point).
3) There’s also a whole goldbug thought leader* ‘don’t worry be happy’ attitude and
plenty of them telling us gold with any 12-handle is good, no need to fret, etc.
4) It therefore stands to reason, in my biased and warped world at least, that these gold
cheerleaders will need to get shaken out a bit before gold finds its bottom.
5) The people who move real money (i.e. not us and not the permabull gold community)
won’t get max profits without applying a bit of max pain. That has to be under
U$1,200/oz, they’ll need to chip away at that veneer of relaxed goldbug confidence.
6) Therefore I pick a number out my hat that’s far enough from the 12-handle on gold to
cause worry and get weaker hands to move out.
There you have it, U$1,180/oz is my downside target. Unscientific, biased as hell, subjective
and loose, it’ll do very nicely for the time being thanks very much. Gold might go even lower
than that (and blow those Fib-disciples out the water for a while), I claim no oracle-like vision,
but the current best-guess plan also involves stepping back into the market and buying shares
at cheaper prices and to do that, you gotta start somewhere. If this whole scenario works out
it’s extremely unlikely to catch the bottom-bottom (and I don’t care) and for all I know last
Thursday was the bottom, next weekend has gold at U$1,350/oz and I look suitably stupid. But
the plan remains in place for the time being and the summing up of the main strategy piece in
IKN352 dated February 7th...
“...I see further upside in gold stocks, then a jag down at some point in “the next few
weeks”, then a period of consolidation, then the return to gold price appreciation.”
...is still in play. We’re perhaps ¾ of the way there, now is not the time to fold the hand.
*oxymoron alert
Fundamental Analysis of Mining Stocks
This week we look at INV Metals (INV.to).
NOBS report dated March 27th, 2016
INV Metals Inc. (INV.to)
Company Overview
INV Metals Inc. (Canada: INV.to, USA: ILNLF) is an exploration stage junior mining company.
Its flagship asset is the Loma Larga gold project in Ecuador. Share structure is as follows:
Shares out: 49.421m
Options: 3.6795m (avg 98c)
Restricted Shares: 0.9777m (at 47c)
Fully diluted shares: 54.08m
Current share price: C$0.235
Market Cap: C$11.61m
Approx working cap per S/O: C$0.23
All prices are in Canadian Dollars unless stated. Forex U$0.80=CAD$1
4

Overview
Two editions ago we ran a NOBS report on Lundin Gold (LUG.to), an exploration stage gold
company operating in Ecuador, stating that it was a simple and straightforward anal ysis report.
Today’s report is the same metal, the same country, another junior exploreco and what’s more
the argument to be put forward for this one is pretty simple, too. In one sentence, today’s report
lays out the case for a speculative trade in INV Metals (INV). However it’s a little longer because
I want to cover all the major aspects in one shot, that’s because I’m a buyer next week (unlike
LUG.to, which I think expensive).
Today we do financials, consider project economics, take into account the project’s major weak
point of community/social relations and country of location, I’m planning to buy some of these
shares next week so the conclusion is suitably favourable towards that call, but I want to be
crystal clear from the outset that this won’t be a riskless trade. There’s hair on this company,
local opposition to Loma Larga is the obvious project killer and only time will tell whether the
reasonable community outreach program INV has been running over the last couple of years
will be able to revert community objections that are now over a decade old and counting.
However and in the end, the buy thesis on this stock is simple:
• It’s dirt cheap for what it’s got. As things stand today, its share price is almost totally
covered by its cash treasury position. It’s debt free (i.e. all assets gratis) and even
exiting 2016 we can expect INV to hold over 15c/share in net cash.
• Its 2m oz gold is decent grade, there’s a pre-feasibility study to demonstrate its
economics, importantly if the machine ever gets built the economics look robust enough
to be profitable under current gold prices, therefore it goes almost without saying that if
gold goes up the economics get very interesting.
• The Ecuador risk profile is improving. The jury is out on exactly how much progress
is being made country-wide but the view from the outside is certainly more positive.
• INV has been in quiet mode for quite a while, but is due to deliver an updated pre-
feasibility study (PFS) in 2q16 and we can expect it to move into marketing and
promotion mode on the back of a study that will almost certainly offer better theoretical
economics (and tip its hat to locals’ environmental concerns).
Therefore the TL:DR conclusion to this piece is to note that there’s a distinct window of
opportunity here. Cash covers market cap, Ecuador’s getting a little more love in the market
(thanks largely to LUG.to at FDN), INV has a project that fits the “next in line” profile, solid
development news in the shape of a new PFS is on the way. I believe this combo will re-rate
INV and even if it doesn’t, the downside risk is minimal. This is a trading-type buy which should
offer a decent near-term gain.
Management and share structure
After its previous CEO Robert Bell left last year (ill health the official reason), INV has been
headed up by Candace MacGibbon, owner of a famous mining surname and in fact her father
Terry is a member of the board of directors. We can perhaps question the CV of the head, we
can also question the presence of Richard Spencer in the background who was one of the BS
merchants behind Crystallex at its peak hype moment, but even Spencer away from the promo
pump side of juniors is a respected geologist and the current INV team have the right type of
qualifications and experience to be taken seriously.
As for share structure, the biggest thing is the 23,128,090 shares owned by IAMGOLD, which
came from the sale of Loma Larga/Quimsacocha to INV. That’s 46.8% of shares outstanding
(IMG has in certain circumstances future rights to another small block of shares that would bring
its participation up to 49.9%). After that big block, Terry MacGibbon owns 1.16m shares (but the
rest of the board don’t own many themselves, not s much skin in this game).
Loma Larga project history
What’s now known as Loma Larga was until recently known as “Quimsacocha”, named after the
local volcano at the centre of this old (in Andean terms at least) caldera system where the
5

deposit was discovered. The word Quimsacocha means “Three Lakes” (the volcano has three
of them, you see) which adds a little more sense to the decision by INV to change its name to
“Loma Larga” (“Long Ridge” or “Long Hill”), it helps in marketing terms at least to diffuse the
sensitive water issue among locals. First
exploration in the vicinity was by Ecuadorean state
geologists in 1970, at which point interesting
alteration was found but not much else. Serious
exploration work began in 1991 when Cogema
took up the concession and then went into JV with
Newmont and TVX Gold in 1994, but no big
discovery was made.
Then in 2001 IAMGOLD took over the concession
and in 2002 received an environmental exploration
permit, the first one ever awarded in Ecuador. The
current deposit, at an altitude of between 3600m
and 3,900m above sea level (3900 metres =
12,792 feet) was discovered and in 2004 the first
resource published. IAMGOLD kept the project for
many years and during at least some of those,
Quimsacocha was one of its flagship development
projects. However, the combo of community
opposition, which got particularly hot in the period
2008 to 2011, the difficulty for any mining company to work in Ecuador at the time (recall
Kinross bailed on Fruta del Norte too) and in-company problems saw IAMGOLD divest
Quimsacocha to INV Metals in November 2012. The name was changed to Loma Larga in early
2013 and to begin with INV had plans to move forward quickly, explore, try to resolve
community issues and get the project on a faster track. Then came the big gold market
downturn 2q13 onwards, so once the already programmed pre-feasibility study was delivered to
INV in late 2014 the company has been in tick-over mode, working on its community relations
but in no big hurry to wow the world. And that’s where we are today, potted history complete.
Resource information
Loma Larga is in the words of its 2014 PFS, a “typical high sulphidation polymetallic epithermal
deposit containing significant values of gold, silver, and copper”. The orebody would make for
an underground mining operation and is near horizontal lozenge share, 1.2km long and 400m
wide at its fattest point. As for what it contains, here’s the basic resource table from the PFS, it
gives us the general idea and that’s what we need today, a couple of bullet points below:
• These values were at higher assumed metal prices (e.g. gold U$1,500/oz), but then
again costs back in 2013 and 2014 were assumed higher as well. We can expect this
count and the project economics to change when the updated PFS lands on our desks
during 2q16, but the advantage to a project such as Loma Larga is that its relatively
high grade protects operating margins and it’s not going to see any massive changes to
the resource numbers (or at least that’s what I assume, and you gotta start
somewhere).
• The main story here is the 10.17 million tonnes (mt) of 6.24 g/t gold, which adds up to
2.04m ounces indicated. The IKN model indicates that roughly 90% of revenues come
from gold and 10% from the silver and copper by-product kickers, so be in no doubt that
6

this project will stand or fall on gold and nothing else. It’s not the biggest deposit of gold
in the world but 2m oz isn’t bad either, not enough to move Barrick’s dial but more than
enough to attract a mid-size producer under the right circumstances.
• You’ll note there’s very little in the inferred category here; for one thing it’s had plenty of
drilling over the years, for another the geological characteristics of this epithermal and
its controls means that the orebody and its limits are pretty much understood and
defined.
Bottom line on the resource: Two million ounces of gold plus kickers, fairly well understood
geologically, a classic and straightforward orebody that wouldn’t need a quantum leap in
technology to be mined, it has a PFS published, a good grade for an underground operation, it
passes muster on straight economics. At a plain straight project level there are many worse
things out there, given a clean run it’s easy to imagine this becoming a mine one day.
Company financials
NB: Please recall that INV.to files its financials in Canadian Dollars (CAD$),
which is also the default currency for today’s note).
We go through some of the usual suspect charts, pointing at things that matter and letting slip a
few other things that don’t. I’ve also (mostly)
added the best guesses for the current 1q16
INV: assets quarter to show roughly where we are today,
70
but in most cases the past trajectory is more
60
than enough to get a handle on this company.
50
We start with assets, which look like this. When
INV bought Quimsacocha/Loma Larga from 40
IAMGOLD it also raised a big chunk of cash 30
with an equity placement (at a MUCH higher 20
share price than today) and it’s been living off
10
that treasury ever since. You can see the
0
steady depletion of current assets (nearly all
cash), though note how fixed asset values
fluctuate as Loma Larga’s book value in US
Dollars is adjusted to the reporting currency of
the Loonie. Sometimes you get write-downs in the P+L, other times the thing gets a bigger
Loonie price tag thanks to the strength of the Greenback. To give an example, consider that:
• On December 31st 2014 Loma Larga was valued by INV at CAD$35.63m
• During 2015 INV booked CAD$2.69m of capitalized asset additions to the project
• During 2015 INV booked CAD$6.95m of forex adjustment to the project
• On December 31st 2015 Loma Larga was valued by INV at CAD$45.27m
In other words, roughly 70% of that approx CAD$10m extra asset value was pure forex.
Moving on, liabilities look like this and I only
include this chart due to near-obligation (you
see the assets, you need the other side of the
balance sheet). INV has no debt, very little
carried over on a quarter-by-quarter basis, this
is an optimum situation.
Which brings us to working capital (in this
case a very close proxy to cash treasury) and
a chart that’s I’ve projected out to the end of
2016. As things stand today INV has
approximately 23c of cash for every one of
those 23.5c shares, by the end of the year I
model working cap at CAD$7.55m, just over
7
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 tse61q1
fixed
$m other current
cash&ST
source: company filings
INV: Liabilities
2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 tse61q1
$m
LT debt
current debt
source: company filings, IKN ests

15c/share and still way more than enough for a company in tick-over mode.
INV: Working capital
20
18
16
14
12
10
8
6
4
2
0
8
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 tse61q1 tse61q2 tse61q3 tse61q4
$m
source: company filings, IKN ests
The shares outstanding chart (right) is an object lesson in “no news is good news”. INV raised
its pile of cash and shows no sign of going
back to market and raising yet (in fact there’s INV: Shares outstanding
60
a very decent case to be made for INV
55
running a share buyback program). As a 50
matter of fact, since December 2012 INV has 45
40
only added 248,000 shares to its count (a 35
few derivs were exercised). We like that a lot. 30
25
20
Since the bottom fell out of the gold market 15
it’s been very careful with its money and 10
5
protected that cash position. Here below a
0
further illustration of that, a table showing the
annual budgets at INV (in Canadian Dollars,
you will remember):
INV.to: Annual expenditures budgets and results (CAD$m)
loma larga only total budget result change in work. cap
2014 $2.6 $4.7 $4.6 $2.42
2015 $3.3 $5.1 $4.7 $5.47
2016est $2.8 $4.5 $4.2 $3.90
totals $13.5 $11.79
source: INV data, INV and IKN ests for 2016
Working in Ecuador, where the US Dollar is the official currency, hasn’t been cheap for INV
recently what with the deval of the Loonie against the Greenback. However they’ve managed to
stay under-budget (and a slim budget at that) recently and as the 2016 budget ($4.5m) was set
at what was probably the low point
of the forex pair, there’s reason to
suppose they’ll be able to keep
spending down this year too. But
that’s probably a detail, what I want
to show with this chart is how
careful INV has been with its
precious treasury and that’s
undoubtedly another good thing.
Here’s another breakdown of
expenses, taken from the P+L and
in this we ignore the periodical and
non-cash write-downs that skew
things out too much for my liking.
The biggest thing is “compensation”, the biggest item inside that is the U$250k INV pays its
CEO. That’s too much for the job being done but aside from that one item this is a tight ship and
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 tse61q1
m S/O
source: company filings/IKN ests
INV: Expenditures breakdown
0.8 (ex-impairments/write downs)
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
-0.1
-0.2
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 tse61q1
$m G&A
professional fees
other
compensation
source: company filings, IKN ests

costs are low, even taking into account a company in largely tick-over mode.
As for quarterly bottom line net losses, I’ll INV: Net loss per qtr
7
show you that chart just to show how the
6
write-downs change matters. Compare the
above chart (expenditures are 90% of the 5
P+L, there are a few financial BTL items but 4
the ops section is all you really need to 3
know) with this for net losses per quarter and 2
you’ll spot the three quarters that took a non- 1
cash write down on assets in about a
0
nanosecond
And that just about does it for the financials
overview and the two things you need to
know are:
• INV has a lot of cash compared to its market value.
• It’s being careful with that cash.
I won’t play coy on this, it’s this cash position and the way in which INV has protected itself that
changes my opinion from “not bad” to “I’m
buying some of these”. The Ecuador country
and community risk profile isn’t good for this
stock and that would normally put me off, but
INV’s financial position is so strong I see an
at-worst limited (probably negligible)
downside to the share price in the next few
months. It’s the (near) no-lose set-up that
has me most interested in INV.
Okay, one more chart from the financials
Excel sheet and that’s enough, here’s the
book value (i.e. total assets minus total
liabilities) per share, which fluctuates
between CAD$1.15 and CAD$1.20 per
share. Yes there have been a few small write-downs taken, adjustments along the way, but
that’s all and there was no impairment taken in the 2015 year-end financials either, a logical
moment to do so. INV is telling the world “We think we’re being severely undervalued” and
when you consider that in practical terms their main asset with 2m oz of decently grading gold is
being valued at big fat zero, they do have a point. Current Price/Book is around 0.2X.
Loma Larga project economics
In one line, not stunningly great at U$1,200/oz gold but good enough. Read on for more.
What we have at the moment is a project that’s gauged on a PFS published in late 2014, what
we will have soon is a project with new economic parameters via an updated PFS due out at
some point between now and the end of June 2016 (i.e. three months max, assuming they keep
to the timeline). And be clear that in the upcoming PFS, INV is planning a significantly different
approach to its project. At the moment the plan is centred on a sub-1000 tonne per day (tpd)
operation that was set at that level to take advantage of Ecuador’s apparent easier permitting
for small and medium-sized mining projects. With the advent of the “big mining” agreement
between the State and Lundin Gold (LUG.to) on reasonable terms for Fruta Del Norte, INV is
now going to run its numbers on a 2,500tpd machine. That will likely mean higher capex, but
running costs and economics per ounce are bound to be favourably affected.
Updated economics are a good thing and we await the contents of the new document, but for
the time being we need to stick with what is an outdated set of numbers. This is enough for our
purposes today, what I want to do is show the ballpark economics and demonstrate Loma Larga
would be theoretically profitable using current gold prices (instead of one of those crazy
9
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 tse61q1
$m
source: company filings, IKN ests
INV: Book value per share, per qtr
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 tse61q1
$
source: IKN calcs from INV data

“optionality” plays that are never going to get built) and grade, recoveries, cash costs etc.
We begin with a couple of screenshots from the latest corporate presentation, which do justice
to the basics of Loma Larga according to the 2014 PFS NB: THESE CHARTS ARE PRICED IN
US DOLLARS. Below the table come a few comments.
This one is costs and projected returns and suchlike:
This one shows operating parameters:
Now for the notes on the above:
• At nearly U$220m for a 80,000 oz per year gold project, Loma Larga isn’t cheap. This is
the main reason I expect much better economic parameters (esp the skinny 16% IRR
from U$1,250/oz gold) from the updated PFs in the next quarter. The capex hurdle for a
2,500tpd machine is bound to be higher, but on a relative basis in a country with the US
Dollar as its currency, the economies of scale will be significant.
• Recovery percentages are good and what you’d expect from one of these high
sulphidation epithermal projects. In fact, a read of the full PFS (all 289 pages, get your
copy from SEDAR, my evenings have flown by this week) shows Loma Larga to be a
technically straightforward project with no big engineering issues.
• The current plans has a low level for sustaining capital/closure assumptions. There’s
plenty of room for INV to play with the economics there, I’d vouch.
10

• On the other hand, we need to keep an eye on the projected mine life at Loma Larga if
the tonnage thoughput goes that much higher. If the machine is changed from 1,000tpd
to 2,500tpd, on a straight line basis the mine life drops to 5.3 years. This is one of the
devils in the details that will come in the updated PFS.
• Gold head grade at 7.67 g/t is high and attractive, there’s always more room for
forgiveness in a high grade operation.
• Silver and copper provide useful by-product credits, perhaps an extra 10% revenue in
gold equivalent terms.
All that and more, but what we need to do is plug in the numbers and come up with a model for
Loma Larga, again the idea being to see how and whether the project runs economically.
Therefore it’s spreadsheet time and an economic cash flow model based on the following
parameters:
• The Loma Larga project with tonnages, grades and recoveries as per the 2014 PFS
because we have to start somewhere. See above for those.
• Operating costs per ounce of gold of U$600/oz. This is slightly higher than the current
PFS assumption for conservative purposes (and you’re probably aware I like erring to
the side of caution in these models), but it’s also because I’m treating the corporate
costs and State burdens in a greatly different way than the company PFS. On that
subject...
• In the same style used in the recent Lundin Gold (LUG.to) model (see IKN357) we’re
going to use “The Ecuador Hack” to work out the total State burdens and split operating
profits down the middle. We know it’s more complicated than that, we know windfall tax
might kick in at higher gold prices (eg U$1,500/oz in my blue sky case is brushing
them), we know things like worker participation and corporate tax come out at different
places. But we also know that due to the “Sovereign Adjustment” (part of Ecuador’s
Constitution), the State will take a grand total of at least 50% of revenues under all
circumstances, so to get in the ballpark we can just split operating revenues down the
middle.
• However, one thing IS different from the LUG.to FDN model of two weeks ago: There’s
a 5% NSR held by Areva (they bought Cogema) and that comes out separately in my
model, it’s an extra 5% that I assume INV will have to pay.
• As for covering the capex bill, it’s a near-impossible task to model accurately (and
what’s more the exit strategy here isn’t for INV to build the mine, it’s for INV to sell it and
let the big miner (IAMGOLD?) do it once permitted and accepted) but in the model we
need to come up with U$218m to make it reasonable, therefore I’m assuming INV sells
150m shares and takes the rest out in debt that’s serviced at an average of U$20m
annual. I honestly don’t know how close that’s going to be to reality, an eventual share
count could be 300m, so to compensate I’m using a low price multiple when we get to
the valuation box.
• G&A $8m per annum, Depreciation etc $15m per annum, forex CAD$1 = U$0.80, all
financial parameters in US Dollars (until we get to the share price). Other small matters.
We then take that, mix thoroughly, grease the baking tray and place in a pre-heated oven for 45
minutes. However another important part of the process is to run the economics on different
price decks, which is what you get in the following three tables of results. Those price
assumptions are...
Stress Test Case: We use U$1,100/oz gold, U$14/oz silver and U$2.00/lb copper. For what it’s
worth, I thought about using a lower price deck than this (e.g. U$1,000/oz gold) but these levels
are really as low as the 2014 PFS economics allow. Things may change in the new PFS, but for
11

my taste INV Metals is no longer interesting at sub-U$1,100/oz gold.
Base Case: We use U$1,200/oz gold, U$15/oz silver and U$2.20/lb copper. This is the close
match to today’s price deck and gives an idea of what Loma Larga could achieve if it were open
and running today. It’s also my preferred set of prices and the case I’m going to use to develop
price targets below.
Optimist Case: We use U$1,300/oz gold, U$16/oz silver and U$2.40/lb copper. Perhaps that’s
not optimistic enough for you, I just wanted an upper range of today’s type of prices and
basically to show the difference $100/oz on gold makes to the project.
Blue Sky Case: We use U$1,500/oz gold, U$20/oz silver and U$2.50/lb copper because we’re
allowed to dream.
Here’s the first table derived from my project assumptions, breaking down revenues into metal
types:
INV Metals: Projected annual revenues by metal type (U$m)
Price Deck Stress Test Base Case Optimist Case Blue Sky
copper (mt) 1,305 1,305 1,305 1,305
$/lb 2.00 2.20 2.40 2.50
copper revs $5.75 $6.33 $6.90 $7.19
silver (Oz) 401,397 401,397 401,397 401,397
$/oz 14 15 16 20
silver revs $5.62 $6.02 $6.42 $8.03
gold (Oz) 76,803 76,803 76,803 76,803
$/oz 1,100 1,200 1,300 1,500
gold revs $84.48 $92.16 $99.84 $115.20
Total Sales $95.86 $104.51 $113.17 $130.42
Sources: INV data, IKN calcs and estimates
You’ll note I’m assuming under 77,000 ounces of gold in the model year, lower than the 80k INV
uses in its literature. I’m good with pitching lower on these things, conservative works. Also note
that at the base case, 88% of revenues come from gold (approx 7% copper, 5% silver) This will
not be a co-product mine, this is gold with by-products period.
Moving on, this is normally a table I keep to myself on the Excel but this time I think it’s useful to
go in the note, it shows an overview relationship between production, costs and profit:
INV.to: Loma Larga Annual Revenues Estimates (U$m)
Price deck Stress Test Base Case Optimist Case Blue Sky
process tonnage 346,020 346,020 346,020 346,020
Au prod oz 76,803 76,803 76,803 76,803
cash cost U$/oz 600 600 600 600
gross profit 29.98 38.20 46.43 62.82
Net income 0.99 5.10 9.21 17.41
EPS (200m S/O) 0.00 0.03 0.05 0.09
source: IKN estimates
The above shows how the Stress Test Case (basically U$1,100 gold) is about as low as you
can go and remain with a net profit in an average year. Be case is “okay”, but you can see how
INV at Loma Larga benefits from higher gold prices to today on the right of the table. A project
that delivers U$17.4m in net profits over 13 year mine life and owned by a company today
priced at a U$10m market cap needs no hyping or breathless prose from me.
12

Here below is the table I prefer to show normally, the bridged model year income statement:
INV at Loma Larga: Model Year Income statement items (in U$)
price model Stress Test Base Case Optimist Case Blue Sky
Sales (U$m) 95.9 104.5 113.2 130.4
COGS 46.1 46.1 46.1 46.1
Depreciation 15.0 15.0 15.0 15.0
SGA 8.0 8.0 8.0 8.0
Royalties ---> 4.8 5.2 5.7 6.5
Op income 22.0 30.2 38.4 54.8
Interest 20.0 20.0 20.0 20.0
Workers Part. 0.0 0.0 0.0 0.0
"Tax" (50% to State) 1.0 5.1 9.2 17.4
Net income 1.0 5.1 9.2 17.4
Shares out 200 200 200 200
EPS 0.00 0.03 0.05 0.09
Sources: INV data, IKN estimates
Note the U$5.2m in royalties from the 5% NSR (in the Base Case). Get rid of that and project
economics get a real boost. Also note the heavy burden of the $20m annual debt servicing
assumption, which wouldn’t exist if a bigboy miner buys Loma Larga and operates the mine.
And note again, INV today has a market cap of just U$10m which is near-100% covered by its
own cash position.
Finally here’s the target generation box:
Sales and earnings Target price & valuation data for INV based on
$1,100 $1,200 $1,300 $1,500 U$1,200/oz gold
Sales (U$m) 96 105 113 130 12-month target $0.48 based on 4x FCF
Sales growth 9% 8% 15% Upside to target 105%
EPS 0.00 0.03 0.05 0.09 Mkt cap (CAD$m) $12 Enterprise value $1
FCF 0.08 0.10 0.12 0.16 P/sales ($1,100) 0.11 EV/sales ($1,100) 0.01
P/E ($1,100) 47.4 EV/EBITDA ($1,100) 0.0
P/E ($1,200) 9.2 EV/EBITDA ($1,200) 0.0
P/E ($1,300) 5.1 EV/EBITDA ($1,300) 0.0
I’ve gone for a 4X multiple on free cash flow rather than net profits. It’s always going to be a
subjective call but for my taste the that debt servicing thing skews valuations too much, using
net profits wouldn’t provide a balanced assessment. To counter that, the multiple at 4X is low
but once the forex adjustment is made (0.8/1) the target of 48c is still 105% higher than this
weekend’s close of CAD$0.235 in INV.to.
So to sum up the financials and the project economics, we have a very solid company with a
share price backed to the hilt by its own treasury, a gold project with decent looking economics
and even when we use conservative assumptions in our model we get a target that’s over
double the current share price. It all seems too good to be true, no? What’s the catch?
The following is the catch.
Community relations and country risk
Make no bones about it, Quimsacocha/Loma Larga is a troubled project. Those issues were
always present in the early IAMGOLD years but started coming to a head in 2006, when we
saw the first public-level community and social opposition in the form of roadblocks of the
Panamericana Highway.
A large sector of the local community around Loma Larga had become concerned about the
13

effects the project may have on the region, with the overriding concern regarding water quality
in this agricultural location. Those concerns quickly spread to a wider area and to towns and
cities more distant to Loma Larga/Quimsacocha, as the Quimsacocha caldera system is source
to several rivers that feed into the whole hydraulic system of South Ecuador.
As 2006 moved to 2008 and beyond, the then new Correa government called a halt to all mining
projects in the country and looked to overhaul its mining laws and environmental statutes. The
inertia was bad for mining, it also fanned the flames of those who would oppose mining in the
country and then-Quimsacocha became one of the emblem protests. It hit all the right buttons,
gold in a high and remote area that’s vital to the water supply of a large area, NGOs were quick
to conjure up images of large swathes of the country devastated by one single cyanide spill.
At the same time and as his mandate bedded in, President Correa gradually showed his pro-
mining credentials (in his words “pro responsible mining”, thereby immediately accused of
having his cake and eating it) and backed the Quimsacocha/Loma Larga project. NGOs,
indigenous groups, local protesters made lots of noise. Fast forward to October 2011 and the
population of the populated district closest to Quimsacocha/Loma Larga, Victoria del Portete
(population approx 7,000) held a referendum in which 92% of vote were against the project. The
next month President Correa visited the zone, told people they shouldn’t fear modern mining,
told them the vote wasn’t legitimate because it hadn’t been validated or overseen correctly and
had tomatoes thrown at his motorcade as he left town (a few arrests that day, too).
Opposition became entrenched and occasionally violent, IAMGOLD had enough and vended
the property in a $30m deal to INV, a company team with previous credentials for sorting out
sticky community relations problems. Since then the opposition has become formalized against
the project and last year the opposition to Loma Larga raised enough signatures on an official,
nationally sanctioned petition to get a official and binding referendum vote sanctioned. We
covered this in several editions of The IKN Weekly last year, for example IKN327 and IKN328
(August 2015), here’s the main relevant section of IKN328 as example:
“...the communities who live around the Loma Larga (INV Metals,
ex-Quimsacocha IAMGOLD) gold project in Ecuador will have two
binding referenda on which to vote (1). One, brought by the anti-
mining groups in the area will ask the question (translated), "Do you
agree that mining activities are carried out in the upland marsh
areas and water sources of Qimsakocha, yes or no?". The other,
brought by the pro-mining groups in the area will ask the question
(translated), "Do you agree that those people living in the zone of
direct influence of the Loma Larga mining project benefit from 60%
of the royalties generated by the operation of responsible mining?".
I'd find it funny if both referenda are voted up. By the way those
questions are phrased, it's not impossible.”
However, it’s not all anti-mining these days as the section I chose to highlight from previous
coverage shows. The community outreach program at INV has made progress and these days
there’s a large section of the local population that, ostensibly at least, is in favour of the project’s
development. In fact, when the signatures for the opposing petitions mentioned above were
being solicited the pro-mining people got more names and faster than the anti-mining people.
There followed a verification process of the signatures (which smacked of deliberate heel-
dragging on the part of authorities and then, when the two petitions were both approved and
preparations for the dual referendum vote were being made, a legal battle erupted between the
two sides (neither of them want the other referendum question to be put to the people) and the
whole thing quickly descended into a mess that was sent to Ecuador’s Constitutional Court
(CCE) to rule upon. That was October last year, today and six months later we’re still waiting for
a ruling from the CCE and no vote has happened. What this means in practical terms is that no
progress is being made by the company, it also mean the community around Loma Larga is
divided on the subject and the community atmosphere between the defenders of water and the
defenders of progress and jobs is not good.
14

When the CCE eventually rules on the validity or otherwise of the referenda, it’s expected to go
one of three ways (2):
1) Declare the process invalid
2) Allow one or both of the referenda to go ahead
3) Unify the two questions into one and call the referendum
The CCE may continue to drag its heels (which wouldn’t be a bad thing for the purposes of the
trade I’m planning but one of these days it’s going to rule on this issue and when it does, if the
ruling is roughly point 1) we’re back to square one and would allow INV the time and space to
continue with its careful and cautious community relations program but if the ruling is roughly 2)
or 3) it means a binding vote on the future of Loma Larga will go ahead and INV Metals runs the
risk of losing the rights to the project. For sure even if the vote goes against INV there will be
other ways to play (government intervention, going to CIADI/ICSID under the Canada-Ecuador
Foreign Investment Promotion and Protection Agreement, all sorts of other potential roads) but
it would in practical terms be a project-killer of a vote. It would certainly be a share price killer.
Then again, if the vote (or votes) goes ahead and the pro-mining people win, it’s an automatic
green light donc faites vos jeux, mesdames et messieurs. But even in that best-case the anti-
mine people aren’t suddenly going to pack up and walk away, people working for NGOs get
good salaries from organizing protests and there are mouths to feed, tantalum filled iPhones to
purchase, “green” lithium-batteried cars running on coal-fired power station electricity to drive...
To sum up, the community risk situation at Loma Larga used to be awful, it’s still mediocre at
best and there’s supposed to be a referendum vote on the future of the project soon, but that’s
been under schedule since mid-2015 and so far nothing. The community is by no means totally
anti-project (in the old 92% way) and INV has been doing a reasonable contact job in the area,
making its case and calming nerves about the true effects of a well-run formal mining operation.
But it’s still a divided place and even if things go well for INV it’s going to have a tough job in
such a remote location.
Conclusion and recommendation
I strongly believe there’s a lucrative trade to be had in INV Metals in the near term and I’m going
to buy some shares due to that. However, it’s not a company I’m going to go long-term on and
have no wish to sponsor it or its project into fruition, there’s too much that can still go wrong on
a community and country risk level.
What we have in the case of INV is a risk/reward play, with clear downsides and clear upsides.
The good things start with that cash position which covers all but half a cent of its current 23.5c
share price. With its tightly held share count (50% are locked away and by all accounts, Letwin
of IMG has every intention of holding on tightly to the company’s position in Loma Larga) and
low spend budget for 2016, there’s a lot of downside price protection in this stock right now at
this price. Then there’s Loma Larga itself, which works at current gold prices, would work very
well at moderately higher ones and is about to offer up a revised PFS that’s most very likely to
give us even better economics. Next is the country of Ecuador, which has made positive
progress on its thorny political risk image and that largely due to the recent and good deal
struck with Lundin Gold (LUG.to). Mining people are looking at Ecuador with at least a little
interest (better than absolute zero interest of the past couple of years) and it stands to reason
that once Fruta Del Norte is on a clear development track and solidly backed, the world will look
for the next deposit that can be a gold mine. On that score as well as due to its cash position,
INV at Loma Larga looks like classic low-hanging fruit. This will improve further as INV comes
out of hibernation and moves to market its new updated PFS, due out next quarter.
Tick ‘em off, those are the reasons I want in to a few of these shares but I’m also keenly aware
that the community situation around Loma Larga isn’t going to go away easily and it’s why this
is proposed as a near-term trade based around the current window of opportunity (cash
position, new PFS, improving Ecuador country risk profile), not about shooting for the big win
where you buy a stock for peanuts at the market bottom then ride it through to production and a
ten-bagger win. No, the community thing is enough to put me off getting too greedy but that
15

does not negate the opportunity here, it’s an asset priced at zero which I believe can be logically
priced to double this stock price in the near future.
The IKN Weekly recommends INV Metals (INV.to) as a Speculative Buy and puts a 48c
share price target on the stock, representing a 105% price upside to Friday’s close of
23.5c. This is a near-term trade based on the reasonable Loma Larga project economics at
U$1,200/oz gold and I’m going to give the trade a timeframe of perhaps three or four months to
give me that double, which assumes the updated PFS is delivered on schedule in 2q16 and the
market reacts positively to the news. I personally will be buying some shares next week (I’ll pay
up to 25c if need be) and the stock will form part of the ‘Stocks to Follow’ list as from next week.
The risks are clear, don’t go in with your eyes shut, don’t bet your mortgage on this size of
company, no need to chase the ask up because a) it’ll come back to you and b) I want some
cheap ones (!!!), newsflow on the Ecuador community risk situation will need to be followed
closely while the trade is opened. But on balance I believe reward potential of a juicy double in
the current window far outweighs the risk in the time period I propose.
End of Report
Stocks to Follow
Of our six open positions on the ‘Stocks to Follow’ list, just one was up over the shortened
Easter week of trading (LRA.v), while Focus Ventures (FCV.) was unchanged. The other four
lost ground though there was no serious damage done anywhere, with gold’s drop it could have
been worse.
We’re currently at just six open trades, a very low number and the open positions in things like
NEV.v and REG.v are very small too, the only one that really matters at the moment is BTO
(and maybe there’s a case for SAM). Just one is in the green, another unchanged on its cost
average since inception, two slightly red, two very red indeed. At least I have some cash.
16

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$2.11 0.0% New C$2.50 tgt March’16
Metals Producers (in current order of preference)
Starcore Intl SAM.to spec buy C$0.48 10-jan-15 C$0.475 -1.0% Rapidly improving profile
Land Grab Stocks (in current order of preference)
Lara Expl. LRA.v Buy/Add C$1.15 08-apr-12 C$0.39 -66.1% solid biz model, waking up
Other Recommended Stocks (in current order of preference)
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$0.175 -5.4% New Li spec play, small flipper
Regulus Res REG.v hold C$0.30 06-apr-15 C$0.35 16.7% Comm. Rels slow progress
Closed in 2016 closed close price
Phoscan Chem FOS.to jan16 C$0.28 29-mar-15 C$0.265 -5.4% Buyout trade, bot but poor deal
True Gold TGM.v jan16 C$0.18 23-aug-15 C$0.25 38.9% okay trade, sold on pol risk
McEwen Mining MUX jan16 U$1.09 25-jan-15 U$1.20 10.1% sold due to lack of value
Lake Shore Gold LSG.to feb-16 C$1.10 07-apr-15 C$1.69 53.6% bot out, sold early in process
Atacama Pacific ATM.v feb-16 C$0.19 26-apr-15 C$0.40 110.5% sold for a double on big pop
New Gold NGD feb-16 U$2.06 24-jan-16 U$2.96 43.7% closed good near-term trade
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
Dalradian Res DNA.to mar-16 C$0.67 27-oct-13 C$1.00 49.3% Hit target, sold, good win
2009, 2010, 2011, 2012, 2013, 2014 and 2015 closed positions in appendices below
Now for some notes on current basket stocks.
B2Gold (BTO.to) (BTG): I liked the way BTO traded last week, simple as that. We saw BTO
run up very quickly in the previous week which can lead to a blow-off top and fast retrace. We
saw gold drop significantly and
sentiment shift, in the near-term at least.
We also had this happen in Easter week
when volumes are typically lower than
the norm, so to see buyers move into
BTO when it dropped to CAD$.201 on
Wednesday and move it back up on over
9m shares traded (7m is the average)
was the epitome of what you want in a
strong junior position. Losing just three
cents in the main house position on a
week like last week is a moral victory of
substance.
I’m not counting chickens before they hatch, I’m also clear that my new CAD$2.50 target
doesn’t represent a massive prospective gain and you the junior player might want more return
for your risk money these days. But that target is conservative in nature, very solid and
reachable without any extra gold price upside.
Nevada Sunrise (NEV.v): On Monday (3) and as fully expected, our Clayton Valley lithium
wannabe tinytrade announced it had exercised its option on its Clayton Valley water rights, with
the payment details in the NR (reasonable considering) and the 50/50 split on the selling
forward of the rights as per. NEV won’t sell those rights though, its obvious exit is to get bought
17

out by the awful scam LIX.
In trading, we’re still under the kosh of the current placement and the stock dropped 1.5c on
light volume to give me another blob of red above. Plenty of time to see if this gets hyped up
on the Li screaming and I repeat, a tiny position in cash terms.
Lara Exploration (LRA.v): On Wednesday LRA announced (4) another addition to its stable
and another step forward in its plan to add exposure to Brazil projects during this market
bottom. It secured an option on the Serrita gold project in Northeastern Brazil, which has seen
bootleather geol investigation work done on it and, so far at least, shows a decently grading
though thinnish gold veins. LRA will presumably do its own work on the property and look to
find a JV partner to stick a few drill holes into the property, or in the words of the NR:
The exploration database suggests the potential to host multiple high-grade vein deposits, though
these have not been drill tested and there remains also the possibility of outlining a larger body of
mineralization including multiple vein systems that could be amenable to bulk mining and heap
leach processing.
At $10k on signing, $10k after one year and over getting to $100k in optioning-in payments
after three, this is a cheap asset to add at LRA and as close to a no-lose as they come. In the
event that grassroots gold assets in Brazil become attractive to the market (very possible) it’s
easy to imagine this being picked up by a partner and LRA getting a free ride from thereon
(even a paid ride). This is the type of deal Miles Thompson does so very well in Brazil, more
please team.
As for trading, on that news Wednesday LRA did 80k of volume on the day which isn’t much of
course, but it’s still the best single day of trading since January and it was al on the ask, too.
Selling in this stock seems to have dried up, those of you with patience and the necessary
stomach for the way in which these low volume juniors act could have a bargain right here right
now. I’m not deploying any more money into LRA for the time being.
Starcore Intl (SAM.to): SAM moved back with the market tide on low volumes. Nothing
much else to add at this point, it will need to bring positive news to the market (perhaps about
Altiplano?) in order to make its next move. Either that or somebody with market clout works out
what the $7m due to come into the company this yar from the real estate sale will do to this
smallfry’s financial position.
The Copper Basket
After twelve weeks of 2016, The Copper Basket shows a 34.66% 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 1166.74 4.96 -6.6%
2 Ivanhoe Mines IVN.to 0.61 778.96 646.54 0.83 36.1%
3 Reservoir Min. RMC.v 4.08 48.69 323.30 6.64 62.7%
4 Capstone Min. CS.to 0.44 382.04 202.48 0.53 20.5%
5 NGEx Resources NGQ.to 0.65 205.06 143.54 0.70 7.7%
6 Nevada Copper NCU.to 0.66 80.5 76.48 0.95 43.9%
7 Copper Fox CUU.v 0.125 417.64 68.91 0.165 32.0%
8 Copper Mtn CUM.to 0.445 118.8 67.72 0.57 28.1%
9 Western Copper WRN.to 0.38 94.19 60.28 0.64 68.4%
10 NovaCopper NCQ.to 0.395 104.33 53.21 0.51 29.1%
11 Cordoba Min. CDB.v 0.16 86.86 42.56 0.49 206.3%
12 Hot Chili Ltd HCH.ax 0.09 445.723 29.42 0.066 -26.7%
13 Atico Mining ATY.v 0.28 97.59 29.28 0.30 7.1%
14 Amerigo Res ARG.to 0.205 173.61 23.44 0.135 -34.1%
15 Revelo Res. RVL.v 0.055 99.19 7.94 0.08 45.5%
18

NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg 34.66%
The Copper Basket average eked out a small average gain on a mixed and generally subdued
week for its components, with seven losers
(HBM.to, CS.to, CUM.to, WRN.to, ARG.to, ATY.v, The Copper Basket 2016, weekly evolution
35%
RVL.v), three unchanged stocks (NGQ.to, 30%
CUU.v, HCH.ax) and five winners (IVN.to, 25%
20%
RMC.v, NCU.to, NCQ.to, CDB.v). Worst losers 15%
were Western Copper & Gold (WRN.to down 10%
5%
14.7%) and Atico Mining (ATY.v down 9.1%), 0%
best winners were Cordoba Minerals (CDB.v up -5%
-10%
22.5%) and NovaCopper (NCQ.to up 9.7%).
-15%
-20%
As for copper metal trading action, the sharp
sell-off at the end of the week, once Shanghai
had closed, was put down to a combo of thin
trading and the renewed strength in the dollar but the equities
largely ignored the drop and it will have to be confirmed next
week before any adjustments seep through.
Moving on to out weekly copper warehouse inventory bullet
points:
• Total world copper stocks in the three official warehouse
systems dropped last week in thin holiday trading, down
14,616mt (-2.4%) to 602,175mt, which keeps us above
the 600k barrier but that’s not likely to last for much
longer. Shanghai has stocked itself up to the gills and it’s
just a matter of time before that inventory starts to leave
the warehouses, same as it dos every year. The question
will be how much remains once the big buying season is
done.
• Shanghai inventories dropped last week, down 8,778mt (-2.2%) to 385,999mt and the
first real drop we’ve seen in its stock numbers in 2016. This may signal the end of the
massive stocks rush we’ve seen in March, though one week isn’t enough data and
especially when it’s the short and quiet-trading Easter week. Perspective is necessary
however, the current stocks levels are record highs and one of only two occasions
when the SHFE has held the majority of world stocks.
• LME stocks dropped by exactly 7,000mt (-4.4%) to finish at 151,275mt. The arbitrage
of moving metals from LME to China continues though reports from the bizwire
channels say that the premiums between the two exchanges have tightened right down
and the law of diminishing returns will see this end soon.
• Comex added a small sliver too, up 1,162mt (+1.8%) to finish at 64,901mt..
Below is the Shanghai-only chart, data from source (5), which shows the move from the record
high posted last weekend. We know that at some point the SHFE warehouse numbers will come
down (and likely rapidly) and the peak is usually around this time of year (end March/early
April). How far and how fast the drop is the most important thing.
I’m still unconvinced that neither Shanghai nor the total world inventory situation is any sort of
direct influence on price these days. We’ve seen total stocks pop high, price has rebounded at
the same time, that alone suggesting the copper gets its real cue from somewhere else. What
will be interesting is to see whether bull latch on to the upcoming SHFE depletion and shout
their case for higher copper prices due to that, as they were deathly quiet about the very same
19
dr3naj ht01 ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht6 ht31 ht02 ht72
source: IKN calcs

dataset in the first quarter of 2016.
Shanghai Futures Exchange Warehouse Stocks, 2014-2016
400000
350000
300000
250000
200000
150000
100000
50000
20
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 ht72
Mt Cu
source: Cochilco
Now for brief comments on a couple of our basket stocks:
NGEx Resources (NGQ.to): On Tuesday NGQ announced (6) the successful closure of its
latest round of private placement, selling 4m shares at 73c a pop (no warrant) for gross
proceeds of C$2.92m. Though by looking at the BCSC regulatory filings (7) we also learn that
the taker of the entire block was JP Morgan Asset Management UK Ltd, which is a pretty
interesting place for this block to have made home, or at least I think so. Still, it does put the
total shares out at an increasingly hefty 205.6m and a long way from the January 2013
placement that raised $34m by selling 10m shares at $3.40. That money has been blown
through, we now see NGQ diluting in $3m chunks and 47m shares have been added to the
count since that multi-million dollar funding.
NGEx Resources (NGQ.to): Hot Chili (HCH.ax):
Hot Chili (HCH.ax): I’ve dropped the ball slightly on HCH in March, as PDAC took my
attention in week one when at the same time HCH announced (8) an updated Pre-Feas for its
flagship and 85% owned ‘Productora’ copper project (gold and moly kicker) in Chile. The
website has the blurbs, corp presentations and NRs which extol the virtues of Productora’s
larger resource and improved economics thanks to its plan to treat the ore with seawater. But
when you scroll down and get to this part...
“Productora achieves a US$220 million post-tax Net Present Value (NPV) and
Internal Rate of Return (IRR) of 15% assuming a long-term price deck of
US$3.00/lb copper, US$1,250/oz gold and US$14.00/lb molybdenum at a real
discount rate of 7%.”
...all interest fades. A 15% IRR using that kind of price deck impresses nobody, but of course
that doesn’t stop HCH from telling us about its advantage of being “leveraged to the price of
copper” (euphemism for “nastily uneconomic project”). It’s a pity they didn’t slip “optionality”
into their write-up, I’m sure Rick Rule would have bought some if they did....oh I forgot, he
owned a large chunk of this one for years and lost a bundle on it in the process, so maybe not.
Never mind.
In other news (9), on March 17th HCH closed yet another private placement, selling A$1.6m of
shares at 7c apiece. That brings the total count up to an eye-watering 445m and bits.
Once upon a time I was quite interested in the prospects of this one, but not any longer. A
main project with mediocre economics plus a oceanically diluted share count equals a very easy
pass of a junior. Leave it to the suckers, there are far better ways of playing the copper space.

Cordoba Minerals (CDB.v): CDB has been on a headline-making tear and is now a cool
200%+ up in 2016 (and dammit I tipped the thing without buying any). A lot of buzz around
the way in which Robert Friedland is backing this exploreco and we’re now all waiting for results
of its recent drill program.
Thing is, that round of drilling was
announced as starting in November 2015
and here we are, end of March 2016,
PDAC well behind us and still no news
from CDB about the assays. If we dial in
the tried and tested news release adage
“good news travels fast, bad news travels
slowly” that’s a potential cause for
concern, so this weekend I got in contact
with the company to chase up on what
seems like a delay. The answer received is
that CDB is waiting to cross the “i”s and
dot the “t”s (or is that the other way
round?) on the “detailed and final legal documents to purchase Alacran”, the property that CDB
is currently drilling and defining. Once the final and done deal is sealed and delivered, we can
expect CDB to issue results on five or six of the 10 holes completed to date. As things stand the
company isn’t expecting any glitches or delays to the finalized purchase deal and it should be
done in the next two weeks, so presumably that’s when we’ll get news on those holes.
Once the first 5 to 6 holes’ assays are released, we should get the other 4 or 5 right behind
them and CDB is looking to drill two more in the same patch as follow-ups.
The Low Cost Producer Basket
After 12 weeks of 2016, the Low Cost Producer Basket shows a gain of 59.41% 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 15.78 13.55 83.6%
2 Newmont NEM 17.98 529.12 13.44 25.40 41.3%
3 Goldcorp GG 11.56 830.22 13.09 15.77 36.4%
4 Franco Nevada FNV 45.75 176.298 10.82 61.35 34.1%
5 Agnico Eagle AEM 26.28 217.67 7.86 36.12 37.4%
6 Ang/Ashanti AU 7.10 405.27 5.29 13.05 83.8%
7 Sibanye Gold SBGL 6.09 228.71 3.34 14.62 134.2%
8 Detour Gold DGC.to 14.41 170.85 3.28 19.20 33.2%
9 New Gold NGD 2.32 509.16 1.81 3.55 53.0%
10 Buenaventura BVN 4.28 254.19 1.64 6.47 51.2%
Prices in U$/NYSE tickers, except DGC.to (CAD$) Portfolio avg 59.41%
A cheer for Buenaventura (BVN), The Low Cost Producer Basket: Weekly performance
which managed to buck the sector- 70% and comparative to GDX control
wide trend and post a winning 60%
Easter week. All the others lost 50%
ground and it was notable how 40%
they all sank with the tide, rather 30%
than their own news. No downside 20%
greater than the Newmont (NEM) 10%
loss of 8.6% on the week. 0%
-10%
21
dr3naj ht01 ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht6 ht31 ht02 ht72
basket
gdx control
source: Google Finance, IKN calcs

Low Cost Basket: Percentage difference between
basket and GDX control, 2016
4%
0%
-4%
-8%
-12%
-16%
-20%
22
dr3naj ht01 ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht6 ht31 ht02 ht72
source: ikn calcs, NYSE/Nasdaq data
If I’m right about gold dropping further and going under U$1,200/oz in April, these stocks ahve
more to drop yet.
Sibanye (SBGL): The success story of them all motors on in 2016. Back when we started this
new basket, SBGL was the smallest of the ten basket stocks in market cap terms. It’s now in 7th
spot and is worth more in US Dollars than Detour (DGC.to) is worth in Loonies. And yes last
week it lost ground in absolute terms, but by dropping 2.5% when its peers typically lost 6%
and 8% is a sign of strength rather than weakness.
Regional politics
Regional Risk Review deferred
I planned to run the regular quarterly ‘Regional Risk Review’ this weekend, but I’m going to
defer it until next week As things turned out 1) I found myself spending more time than I
expected on INV Metals and as things turn out I think it’s more important to get that trade
explained and opened (buy low sell high, name of the game in the end) 2) I’ve been enjoying
my Easter long weekend 3) I’m lazy. It’ll happen next weekend, feel free to complain bitterly at
the usual address.
PS: You may have noticed that posting on the IKN blog was pretty light last week, too. Same
reason, sheer laziness.
Market Watching
Silver Range Resources (SNG.v): Buying a few
Last weekend in IKN358 we made mention of Silver Range (SNG.v) and its change of control
and direction. This week we note how it
traded and the Monday action of 677k shares
changing hands was the best single day of
volume since April 21st 2014. It got easier to
buy the stock as the shortened week wore on
and for those interested in this bet, I think
there’s a reasonable and value entry point at
8c, it seems ready to give there.
Remember that we’re likely to get a small-ish
placement round soon (Doug Eaton is
marketing in Europe), which won’t bring in a
king’s ransom but will top up treasury to a
level that allows new CEO Mike Power to do
what he wants to do this year. The other thing a placement will likely do is put a lid on the
upside of the stock in the near-term, so those interested in this high risk spec shot need only
exercise a modicum of patience to get a good entry point.

As noted at the start of today’s edition, after sitting on the idea for a week I’ve decided to jump
in and buy a few of these. Theory and criteria in a few brief bullet points:
• At 8c at 47.4m shares out (50.5m f/d) it’s a C$3.8m market cap company with C$1.75m
cash in the bank. Small but financially solid.
• Mike Power is one of the good’uns out there in the junior world, I’m happy to sponsor
him and his team.
• He’s also good at what he does, so there’s every chance this move into Yukon fixed
assets is going to get the right type of land on board. If the market timing is right and
this is the start of a bull run the timing is great, too.
• No need to have a big position in cash terms at this point, better to start small and see
if SNG can deliver on its plan.
• On a practical level, with nine spaces left to fill on my ‘Stocks to Follow’ list I can afford
the luxury of adding a high spec play (to “land grab” section) and filling things out a bit.
It’s a simple enough plan, a spec play on a very cheap tinycap that’s now being run by the right
people and is potentially moving into the right place on the exploration curve at the right time. I
won’t be risking much money and under no circumstances will I pay more then 8c for the
pleasure of ownership.
Minera IRL (IRL.to) (MIRL.L): The re-tooling begins
Real news will start flowing from the suspended Minera IRL as from this week. It’s going to be
positive for us the shareholders. As the stock is still suspended I can offer you no trading
advantage, so let’s see how the news rolls out and hopefully I’ll be in a position to comment in
more depth in the very near future.
Conclusion
IKN359 is done, we end with bullet points:
• B2Gold (BTG) (BTO.to) did well last week in the face of the dropping gold price,
hopefully it’ll keep up with the relative strength.
• Also hopefully, gold drops further and gives me my real buying opportunity. What could
possibly go wrong? ☺
• I’m still sitting on the vast majority of my raised cash, but the first shots at picking up
bargains are set for the week ahead. As it happens I don’t think INV or SNG are very
market sensitive and starting to get in now instead of a couple of weeks’ time isn’t
going to make much difference. That’s not the case in a stock like SAND, that one I’d
like to see significantly under U$3.00 before pulling the trigger. Others, too.
• The last bullet last week was “Gold exposure beats silver exposure, all day and all
night”. The market action between then and now proved that in no uncertain terms.
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
23

Footnotes, appendices, references, disclaimer
(1) http://www.lahora.com.ec/index.php/noticias/show/1101853910/-
1/Se_calificar%C3%A1__firmas_para_consulta_minera_en_Quimsacocha_el_24_de_agosto.html
(2) http://www.elmercurio.com.ec/515026-esperan-respuesta-para-consulta-minera/
(3) http://finance.yahoo.com/news/nevada-sunrise-exercises-option-water-130000123.html
(4) http://finance.yahoo.com/news/lara-signs-option-acquire-serrita-160003325.html
(5) http://www.shfe.com.cn/en/MarketData/dataview.html?paramid=weeklystock
(6) http://finance.yahoo.com/news/ngex-closes-2-92-million-210000110.html
(7) http://www.bcsc.bc.ca/About_Issuers/Exempt_Distributions_Summary/
(8) http://www.hotchili.net.au/
(9) http://www.asx.com.au/asx/research/company.do#!/HCH
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
24

Stocks To Follow Closed Positions 2013
Closed in 2013 closed close price
USA Graphite USGT feb'13 U$0.93 08-jan-13 U$0.17 81.7% short tgt made/trade closed
Lachlan Star LSA.to feb'13 C$1.50 30-sep-12 C$0.95 -36.7% sold to reduce port risk
United Silver USC.to mar'13 C$0.21 28-oct-12 C$0.095 -54.8% small Ag sector trade, failed
Aurcana Corp AUN.v apr'13 C$1.07 11-nov-12 C$0.55 -48.6% closed on poor YE results
Gold Res Corp GORO apr'13 U$14.11 25-jan-13 U$9.38 33.5% short tgt made/trade closed
Marlin Gold MLN.v apr'13 C$0.075 10-feb-13 C$0.065 -13.3% closed trade
Bear Creek BCM.v may'13 C$2.58 01-apr-13 C$2.40 -7.0% near-term, time ran out
Lupaka Gold LPK.to may'13 C$1.12 23-oct-11 C$0.32 -71.4% towel thrown in
Tahoe Resources TAHO may'13 U$18.62 08-apr-13 U$14.70 21.1% took profit on ST short
OceanaGold OGC.to jun'13 C$3.03 16-sep-12 C$1.18 -61.1% sold on gold drop
IMPACT Silver IPT.v jun'13 C$1.14 13-jan-13 C$0.62 -45.6% sold on silver drop
Duran Ventures DRV.v jun'13 C$0.045 10-may-13 C$0.025 -44.4% ST trade never worked
Plata Latina PLA.v jun'13 C$0.79 10-apr-12 C$0.13 -83.5% closed
Bellhaven BHV.v jun'13 C$0.065 03-jun-13 C$0.12 84.6% closed ST trade
B2Gold BTO.to aug'13 C$3.07 28-nov-12 C$3.44 12.1% sold 1/2 to raise cash
Colossus Min. CSI.to aug'13 C$0.72 24-jul-13 C$0.79 9.7% closed thru nerves on future
Pretium Res PVG.to aug'13 C$8.20 11-jun-13 C$10.14 23.7% closed to raise cash
Bear Creek BCM.v sep'13 C$2.06 30-may-13 C$2.20 6.8% sold on pol risk decision
MAG Silver MVG oct'13 U$7.00 12-sep-13 U$5.62 19.6% near-term short
Gold Res Corp GORO oct'13 U$9.52 03-may-13 U$4.98 47.7% short tgt made, covered
AQM Copper AQM.v oct'13 C$0.31 16-oct-11 C$0.125 -59.7% closed failed trade
First Majestic AG nov'13 U$11.51 07-nov-13 U$10.50 8.8% v near term short, closed
Fortuna Silver FSM nov'13 U$4.00 07-nov-13 U$3.68 8.0% v near term short, closed
Primero PPP nov'13 U$5.70 07-nov-13 U$5.75 -0.9% v near term short, closed
Starcore Intl SAM.to nov'13 C$0.235 08-sep-13 C$0.17 -27.7% ST trade didn't work, sm loss
B2Gold BTO.to dec'13 C$2.22 28-nov-12 C$2.16 -2.7% closed ST trade to raise cash
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
25

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
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
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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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