IKN #361Premium

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The IKN Weekly
Week 361, April 10th 2016
Contents
This Week: STOP PRESS, Trade heads-up, In today’s issue, Robert’s mouse and Mark’s gold
unicorn, Choose your battles.
Fundamental Analysis: Starcore International (SAM.to): Adding and promoting to Top Pick.
Stocks to Follow: Overview, HudBay (HBM), INV Metals (INV.to), Silver Range (SNG.v),
B2Gold (BTG) (BTO.to), Starcore International (SAM.to).
Copper Basket: Overview, Nevada Copper (NCU.to), Cordoba Minerals (CDB.v).
Low Cost Producer Basket: Overview, Buenaventura (BVN), Sibanye Gold (SBGL).
Regional Politics: Argentina: Why criminally charge one President when you can charge two?,
Peru: A potential “Veronika Mendoza” trade.
Market Watching: Continental Gold (CNL.to) personnel threatened by terrorists in Colombia,
Porter Stansberry brings a bazooka to a knife fight.
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
STOP PRESS: It’s too close to call between PPK and Veronika Mendoza for the
second spot in the Peru Presidential election and a place in the run-off. Please see
the ‘Regional Politics’ section for the outline to a potential trade on this event
because if Mendoza makes it, the trade is on. Reliable results tomorrow, not before.
Trade heads-up: I will add to my Starcore (SAM.to) position and will probably need several
bites at this cherry over the next few days (even weeks) before I have all I want. More on this
in today’s ‘Fundies’ section. Also, as long as the entry price is right (25c or so) I will add to my
INV Metals (INV.to) position in the days to come. Not so much on this call this week as it’s a
smaller addition, it’s price dependent and I’ve recently covered the stock in detail. I may also
buy Silver Range (SNG.v), but it’s not getting to my 8c price on any volume and I feel it running
away from me. It was only a tiny trade plan anyway, not too worried.
Top of shop heads-up complete.
In today’s issue
• Waiting for a lower gold price was a mistake. It’s time to buy into the precious metals
junior sector, the process begins today as I add to two current positions.
• We consider the new Stansberry/Casey sector pump, the stocks picked and how
members of the closely-knit promotional stock tip world feed off each other.
• Copper dropped as if to order, some lucky timing that’s allowed my new short in
HudBay to start well. I’m not averse to covering the short and taking profits if it’s kind
enough to spike down.
1

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Robert’s mouse and Mark’s gold unicorn
But Mousie, thou art no thy-lane,
In proving foresight may be vain:
The best laid schemes o’ Mice an’ Men
Gang aft agley,
An’ lea’e us nought but grief an’ pain,
For promis’d joy!
To A Mouse, Robert Burns, 1785
Find below the last paragraph of last week’s intro piece, “Gold bulls living in the past”, which
gets a re-print this weekend as it’s a good entry point to discuss the most likely weak point to
my argument:
Fear has dissipated, the markets have rallied and for my money, quite
literally, the next piece in the puzzle is a gold price that disappoints its
hardcore supporters and dips under the U$1,200/oz level for a while (they do
enjoy a chance of shaking their fists at the world, though). That will be our
cue to fill up on quality precious metals equities because as day follows night,
we’re staring at a whole sector that will be worth a lot more this time next
year.
I still agree with the theory behind most of last week’s piece and the strategy that’s been in
place but there ain’t no way to hide them lyin’ eyes, every time gold pretends to do its
weakness act it pings back in style.
The great thing about having a plan is seeing it unfold and work well. The normal thing about
having a plan to predict the near-term movements in gold is that it works right up to the
moment it doesn’t. Case in point, the strategy I’ve been running since February which did
pretty well for a while by doing this:
1) Predicted the gold price surge over U$1,200/oz
2) Predicted it had a limit
3) Predicted a re-trace from the top
4) Predicted a new bottom price of around U$1,180/oz in late March (or early April).
It’s been fun, but nobody gets to score a run if you only get to third base. I’ve been through a
process of reflection in the last few days,
considering my position and re-reading my own
words while watching gold and the miners do things
that don’t match my ideas. The weakness to my
theory is that it got entrenched, I’m guilty of using
U$1,180/oz as a totem and gold doesn’t need to
drop that far in order to have complied with the
ballpark. To cut a long story short, theories are
great until they don’t match reality, I got too cute
with both the market and myself, I’m bored with
being wrong for the right reasons because two
years of that is enough for any stomach. The main
conclusion I’ve drawn is that gold may drop that
extra bit and hit my unicorn number of $1,180/oz,
but it doesn’t matter much any more. It’s a pencil-
note in the margin, the correct position now is
looking further out and positioning for where gold
and this sector will be a year from now, not a week
or even a month.
2

,
The precious metals stocks game is changing in front of our eyes. The sector of stocks we
follow may or may not be overbought in the very-short-term, but when gold breaches
U$1,500/oz down the line (and it will) current prices for quality stocks will be remembered as
the bargains they were. It’s time to be long gold stocks, ladies and gentlemen. It’s
time to buy and hold. It’s time to position for the big wins, not the small fliptrades.
The final verse of To A Mouse by Rabbie Burns is the one where he tells the mouse that it’s
better off than he the human being, because a mouse lives in the present moment and doesn’t
suffer from regret about past actions, or trepidation of what might come next:
Still, thou art blest, compar’d wi’ me!
The present only toucheth thee:
But Och! I backward cast my e’e,
On prospects drear!
An’ forward tho’ I canna see,
I guess an’ fear!
And two hundred and thirty years (and five months...I checked) after those words were written
it would be all too easy to lose myself in past regrets and future fears.
• Woe is me, my prediction on gold’s downside in early April hasn’t materialized, I’ve
missed out on stock winners.
• Woe is me, the fear and pressure, make the right prediction about the future of gold
else suffer humiliation and pain.
Write them down and the neurosis becomes both clear and ridiculous. The person who tries to
call the detailed price moves in something as fickle as gold is on a fool’s errand. Foolish I may
be, especially about the short-term, but the real money is made by getting the big calls right,
not the details. Gold’s going higher, name your own price and timescale, be long the sector.
Choose your battles
The latest development in the junior miner market wasn’t directly connected to the latest
moves in gold, up 1.5% in a week in which managed
to mirror the downside shown by the S&P500 very
nicely. Classic stuff that all the usual suspect talking
heads managed to notice (bless them all).
It wasn’t connected to the ebb and flow of bullion
either, with GLD holdings down on the week and on
two weeks ago (by just under six tonnes)
The major development in the juniors was simple:
The moves put in by Almaden (AMM.to (AAU), Midas
(MAX.to) and Lundin Gold (LUG.to), as well as more
modest benchmark beats from NovaGold
(NG) and Pretium (PVG), on the back of a
GLD gold holdings, last two weeks (metric tonnes)
major promotional move by Porter 830
828
Stansberry and Stansberry Research,
826 823.74
helped along by stablemate company 824
Casey Research and their coordinated 822 820.47 819.28819.28 819.6 819.6
820 818.09 817.81
move to pump the same way at the same
818 815.72815.43
time (no Virginia, not a coincidence). I’ve 816
814
written a longer piece on this nascent
812
pump today in ‘Market Watching’ below, 810
so go there for more. Here I want to
mention a line of thinking that’s been
doing the rounds in my brain for several
weeks but has crystallized into something
3
61/82/3 61/92/3 61/03/3 61/13/3 61/1/4 61/4/4 61/5/4 61/6/4 61.7.4 61/8/4
mt
source: SPDR GLD data

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worth mentioning thanks to the Stansberry promotional move.
I just so happens that I’d been tracking Almaden as a potential trade for a couple of months
(see editions passim), but couldn’t find the right entry price at the right time to pull the trigger
and buy some. It also just so happens that last year I bought Midas as a trade on a potential
pump job from Stansberry/Casey but my timing, picked up in August and dropped in
September, was faulty. And for the trifecta, it just so happens that I ran the numbers on Lundin
Gold (LUG.to) in IKN358, three short weeks ago, liked the project a lot but saw little value in a
stock trading a little over $4. In so many words, I don’t own any LUG, AMM or MAX this
weekend and have missed out on the lift that others have enjoyed (not least the companies
themselves) thanks to those companies being anointed as Chosen Ones. Well boo hoo little me.
In this bullish phase, money will be made by many people and stocks of companies of all stripes
and forms get to climb high. Not all of them of course (Do Not Feed The Animals) but a decent
proportion will, that’s for sure. Some of those people and companies may or may not be
deserving of their rewards according to your own criteria, but they’re going to win all the same.
It won’t matter a jot whether you applaud or begrudge their success, whether you are in or out
of the same stocks. Unlike Bono from U2, mining companies and their sponsors can indeed live
without or without you and as noted on Saturday (1) it’s really nothing personal, it’s just
capitalism baby. To that end, a small suggestion: Don’t try and participate in every hot trade
idea, don’t feel envy for the success of others, don’t get downhearted when that trade you
passed on nails big wins for somebody else. There’s going to be money to be made, but pick
your own battles and win your own money. Jealousy doesn’t become anyone.
And on the subject of choosing one’s battles carefully, here comes a change in stock
recommendation.
Fundamental Analysis of Mining Stocks
Starcore International (SAM.to): Adding and promoting to Top Pick
I have chosen my battleground. Starcore is “my size” of company, it flies under the radar of
nearly everybody, it’s financially solid, it has massive growth potential.
The first move in the re-tooling of my portfolio and converting the sizeable cash position into
shares, is this one. Up to this point, I’ve kept the Top Pick category for names with “ducks in
line”, such as the mid tier growth story B2Gold or the promotion of Lake Shore Gold to the rank
before it got bought out.
In this respect the decision to make Starcore International (SAM.to) a Top Pick as from this
week coming and add significantly to my personal position is a departure from the norm. It’s
not a riskless play and I’m going to face issues in getting the size I want because it’s not a
particularly liquid stock. However it’s getting the upgrade because the risks, although real, are
clearly outweighed these days by the potential gains even in a sub-optimum situation. However,
SAM also offers the type of Dare To Dream upside, a blue sky potential that’s second to none in
the sector today and if things start going right for the company, it has true multi-bagger
potential from its current levels.
There are many things to like about SAM today, there are risks and potential negatives too.
Here are a couple of lists, following them are details and anal ysis.
Positive Things
• The San Martin gold mine, which may be small but now has a track record of a well-run
operation. With gold now rising and its costs on a tight rein, we can expect useful free
cash flow from this mine.
• The San Pedrito real estate deal, which if we assume closes correctly adds a cools
U$7m to treasury.
4

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• The recent start-up of the Altiplano toll milling operation, which is a positive signal for
this new arm of SAM.
• The asset book at SAM, which has been expanded by the timely additions to the
company of the Creston properties and the AJC properties.
• The company financials, which are solid. This company is under no money pressure,
share structure is tight, operations are cash flow positive, growth can be funded
organically. Eric Sprott is the biggest owner of this stock, with 5.41m shares
representing 11% of shares out.
Negative Things
• The potential that the Altiplano toll mill start-up doesn’t go smoothly and the asset
turns into a white elephant.
• The potential that the San Pedrito real estate deal fails to close. It’s not absolutely vital
for company well-being (see below) but it’s a positive and material, so we shouldn’t
count the chickens before they’re hatched.
• Top management doesn’t have much skin in its own game via stock ownership, but
recently awarded themselves a big increase in cash salaries.
• The trading in the stock tends to be thin, it takes time to buy even the type of modest
(in absolute terms) size I’m looking for to turn this into an out-sized Top Pick position.
I’ll need to apply patience, if you join in you will too.
Now to expand on those bullet points.
Shares out
The share count was rolled back as part of the acquisitions process of the last 18 months. It
was 180m, it reversed 4:1, then after the
SAM.to: Shares Out
latest small additions we’re now at
50 (adjusted to 4:1 rollback December 2015)
49.147m shares outstanding. That’s a low 45
number and at this weekend share price, 40
the market cap is C$23.1m (i.e. under 35
30
U$20m). You’re getting a lot of miner for
25
20 million here.
20
15
I mention the share count early in this 10
discussion of the expansion of bullet 5
points because what follows also attempts 0
to give dollars-per-share values to the
several moving parts of SAM.to which we
add up in the end to give a new target for
the share price.
The San Pedrito real estate sale
A month ago on March 9th and reported in The IKN Weekly at the time in IKN357, SAM brought
shareholders a pleasant surprise (1) via a deal on land it had acquired during the original deal
to buy San Martin from Goldcorp back in 2009 and had converted to real estate property (when
it became clear it would never host a mine). Here’s the segment from the latest MD&A to
explain all:
The Company announced that it has entered into a Binding Agreement (“Agreement”)
to sell the San Pedrito Property located in Queretaro, Mexico. The sale is expected to
net the Company approximately USD $7 Million. The Agreement requires the buyer
to deposit 50 million Mexican Pesos (“MP”) (approximately $2.8 million US dollars),
which has been received in trust pending various confirmations, including compliance
with state and municipal regulations and evidence that the property is in good
standing.
As U$7m is around CAD$8.5m at today’s forex, this represents a cash windfall of 17c/share,
5
41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj
source: company filings/IKN ests
serahs
fo
snoillim

,
which is a substantial amount for a company with a share price currently bouncing between 40c
and 50c. If this wer all SAM had it wouldn’t be enough to justify its equity value, but as you’ll
see by reading on, there’s a lot more here.
The new Altiplano toll milling operation: The new operations arm of SAM.to, its “Altiplano”
toll milling operation that came into the corporation as the main asset in its buyout of sister
company Cortez (ex.CUT), is now up and running with the first doré pour already announced by
the company.
The project has largely been funded by loans, with the two main tranches a near-term C$4.5m
loan that is payable November this year, plus a C$1.3m loan due August 2017. Add in the
interest servicing and the liability rises to just under C$6m. Assuming SAM can pay back its
dues (and numbers in the financials discussion section below show that to be easily covered) it
will have an operating toll mill and no burden going forward.
The current capacity of this operation is a small-end 25 tonnes per day (tpd), but expansion to
50tpd has been built into the infrastructure which means that once Altiplano learns to crawl, it
will be able to walk. Its business model is the typical one for toll milling; buy mined ore from
informal/small/artisanal miners at attractive rates for the locals (no further need for them to
transport longer distances), process the gold/silver rich material, sell doré at market prices,
pocket the difference. The trick with toll milling is cash flow and as SAM primed its treasury with
cash in order to get the ball rolling, it should be able to pay the miners for their rock and then
pay from future earnings. Of course it’s not that simple and I found out a lot of the tricks and
potential pitfalls when researching the nascent Peru toll milling companies last year. I’m not
assuming victory on this operation yet, if they don’t do things right Altiplano could become a
white elephant, but if SAM executes correctly it adds a second line of cash flow generation.
As for Altiplano’s potential value to SAM, we could look to the publicly listed more advanced toll
mill operations in Peru for guidance. Two are decent guides, though the $80m market cap of
Dynacor (DNG.to) isn’t a direct apples-to-apples by any means, as its toll milling runs at nearly
200tpd and it has its Vetas gold mine project adding to value. On the flip-side, Inca One (IO.v)
at a $5m market cap is burdened with debt and if Altiplano gets it right it’s going to be worth
more than that. It’s tough to be accurate on this, but if things go well in the next two or three
quarters and Altiplano goes Free Cash Flow neutral (i.e. self-supporting) before it ups tonnage
throughput to 50tpd, a $10m asset valuation would be reasonable, that’s 20c/share.
It’s not worth that today, however, SAM needs to show the world this thing works so the way
forward, at least in ballpark terms, is to apply a heavy discount to that NAV. It’s going to be
risky until proven otherwise but I’m willing to give Altiplano a $7m value at this time, or 14c per
share. Feel free to argue with me on this one.
The SAM fixed asset book of properties
Alongside its core asset of the San Martin mine and the Altiplano toll milling operation came in
when SAM incorporated Cortex Gold into its structure, over the last year and a half (the process
started with the first announcement of the fusion with AJC in December 2014) SAM has
expended its fixed asset book in recent times with two other major transactions.
The all-share buyout of previous sister company American Consolidated Minerals (ex-AJC),
which has added the Lone Star (USA), Toyaibe (USA) and Sierra Rosario (Mexico). These are
100% owned (barring NSRs) expect for Toyaibe, which will be 100% owned as long as SAM
spends just over U$1m on exploration by October 2018 (easily doable).
The purchase for U$2m cash of the Creston Moly properties (out or receivership and with no
underlying debt claims), a deal that added the main El Creston moly/copper project in Mexico
as well as the Ajax moly property in BC Canada and the Molybrook project in Newfoundland
Canada. There’s plenty of prospective turf in and among those names, but a lot of it is still early
stage exploration hectares. Perhaps the most interesting of them are the El Creston property in
6

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Mexico and the Toyaibe project. El Creston is an advanced stage project with a 43-101
compliant resource and a pre-feas to go with it. The deposit hosts an M&I resource of 215.4
million tonnes containing 335.5 Million lbs Molybdenum at 0.071% and 281 Million lbs Copper at
0.06% and was promo’d in the last cycle when moly was at U$20/lb and above. Those days are
long gone now and with moly languishing where it is at U$5.50/lb this isn’t a valuable project at
the moment. But if we take a leap of faith and assume moly puts in a rebound in the middle or
distant future, Creston would be back in play and worth a lot more than the $2m SAM paid for
it (and the other two moly projects in Canada that came with it). Meanwhile, Toyaibe is
interesting for three reasons:
1) It has a historic (i.e. non-43101 compliant so be careful) resource outlined on part of
the property, the Courtney deposit estimated at nearly 5m tonnes at 1.08 g/t gold.
Either do the math or check out the SAM literature to work out that comes to 173,562
oz of gold. The basic plan is to open pit that one of these fine days.
2) Even though it has that resource, there’s a lot of lightly explored ground at Toyaibe
and plenty of potential for pleasant surprises. This might attract a JV partner.
3) Even without a JV partner, the company needs to spend about a million dollars on
the project to comply with the optioning deal. That means we’re going to get
exploration happening at some point this year or next, that means news flow from a
new flank of SAM.
Overall Toyaibe, although not the biggest thing out there, probably has more chance of getting
a valuation re-rating from SAM and/or the market, simply because it’s a gold project and gold is
suddenly cool again. But the whole of the fixed asset package outlined above is testament to
the smarts at management level in SAM, they bought (or brought in) these grounds very
cheaply and as stands, the company is getting zero share value credit from these purchases.
As for a current valuation, I’m going to go with the book valued at which they’re carried, just
over $3m total. That’s going to be way too low for the suite even if just one of the many
properties gets some exploration discovery love, but for the time being I prefer to pitch
conservatively here plus there are some modest carrying charges SAM has to take to keep them
on board (but nothing too heavy). For my purposes they worth $3m, or 6c/share. But be clear,
if moly moves back up over $10/lb just El Creston would be worth a multiple of that number.
Also true if Toyaibe shows promise or gains a JV partner to move it forward.
The San Martin mine
I’ve left the SAM cornerstone operation next to last (only the financials and balance sheet left to
consider) because I wanted to discuss the semi-hidden but valuable elements of SAM first.
When it comes to operations, we’ve followed SAM at San Martin pretty closely over the years
and it’s been the main reason I’ve held onto the stock. With gold prices now improving, the
SAM model indicates that San Martin won’t have a tough time in moving from its current break-
even level of overall operations (it’s been free cash flow positive at the mine, it manages to
cover corporate G&A too) and become a profitable mine.
SAM.to: Gold Equivalent produced
8000 6900
7000 6315 6000 5749
6000 5100 5338 5381 5130 5194
5000 4800 4429 4686 4544
4000
3000
2000
1000
0
7
31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj
SAM.to: Gold produced vs gold sold, per qtr
oz AuEq
6000 source: company filings 5500 4900 5240 4998 4814 4823
5000 4500 4100 4315 4174
4000
3500
3000
2500
2000
1500
1000
500
0
41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj
Oz Au gold prod
gold sold
source: company filings

,
We’ve done plenty of these numbers before today just a few of them starting with operations.
San Martin is a gold mine with a silver
kicker, over 90% of revenues comes from
gold, there above is how recent quarters
have come in. The point to make here is
that the last quarter saw below average
production, mainly due to a lower than
average gold grade (1.99 g/t). The mine’s
vein system goes through periods of
slightly higher and lower grades as it gets
mined out. It’s very tough to model a
small mine accurately, as just a little
variation from the norm can have a large
effect on numbers, but it’s reasonable to
assume SAM can put in better quarters in the future. As for costs, this next chart shows how
SAM has got them under control and they’ve been going down. Ops are part of that, the
favourable Loonie forex has helped a lot, too.
SAM.to: Cash cost AuEq vs Au realized price
2000
1800
1600
1400
1200
1000
800
600
400
200
0
8
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj tse61.rpa
SAM.to: Avg gold head grade (g/t) per qtr
3.50
3.00
2.812.89
2.50
2.40
2.142.152.032.01 2.23
2.38 2.55 2.342.422.362.22
1.982.00 2.22 1.99
2.00 1.70
1.50
1.00
0.50
0.00
U$/oz
Au realized price
cash cost AuEq
source: company data, IKN ests
We also see there how SAM has seen its average realized gold price in US Dollars drop along
the way. But now, check out the IKN
assumption for the current quarter. In
fact, check it out here right, the same
dataset with just the last few quarters.
I’m expecting $150/oz better margins
per ounce and that’s no small thing for
a small company. Assuming a
reasonable quarter of production (i.e.
slightly better than last quarter and
back at the historical average) we’ll see
revenues jump at SAM, while costs stay
where they are. That means an
increase in margin and if I take a leap
of faith and assume 4,500/oz gold
produced and sold (then the AuEq from
silver on top of that) and current forex, here’s the revenues overview chart below
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj
g/t Au
source: company filings
SAM.to: Cash cost AuEq vs Au realized price
1400
1300
1200
1100
1000
900
800
700
600
41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj tse61.rpa
U$/oz
Au realized price
cash cost AuEq
source: company data, IKN ests

,
SAM.to: Operations overview
10
9
8
7
6
5
4
3
2
1
0
-1
9
31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj tse61.rpa
$m revenues
COGS
mine op earnings
source: SAM filings, IKN ests
And here’s the Mine Operating Earnings numbers separated for easier viewing:
SAM.to: Mine Operating Earnings
3
2.5
2
1.5
1
0.5
0
-0.5
41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj tse61.rpa
source: company filings/IKN ests
srallod
fo
snoillim
That’s good. As corporate overheads are typically low, there’s reason to believe SAM can deliver
$1m to the bottom line this current quarter. This longer view of net earnings at SAM shows
what the company is capable of and also shows how it’s managed to run at around break even
all through the bad period we’re now
SAM.to: Earnings
leaving. 8
7
6
And for full context, San Martin would 5
only have to deliver a $1m/qtr net profit 4
3
for SAM to be a 2c/qtr EPS machine.
2
Strip away everything else it owns and if 1
their cornerstone mine can do that every 0
-1
quarter its earnings potential fully
-2
justifies the current share price. Eight -3
cents a year, a modest 6X price to
earnings ratio for a small mine, job done.
As for a valuation today, I’m not going that high for the moment. Starcore at San Martin is a
small mining operation and its financial requirement on a quarterly basis can fluctuate quite
sharply compared to gross revenues. Plus we don’t know where gold is going for a while, not in
the near-term at least, so I’m going to assume an average of a penny a quarter EPS for the
next year. Applying the same modest and reasonable 6X P/E to that gives me 24c of share price
value in this part of SAM.
More financials
The last part of SAM is a look at its books. I’m going to try to be quick on this, we’ve done too
many charts already and I feel like I’m repeating myself from other analyses of the stock in this
bit, but the point to make here is that even considering its debt position and even if we totally
ignore SAM’s cash generation potential from San Martin and the real estate windfall in the
works, the books are solid and the net value here worth money.
11.rpa 11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj
$m
pre-tax earnings
net earnings
source: SAM filings

,
SAM.to: Assets Breakdown per qtr
90
80
70
60
50
40
30
20
10
0
10
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj
$m
cash st inv other current fixed
source: company filings, IKN ests
Assets look like this. Chief are the fix assets
(and that’s mainly San Martin) but the
current stuff counts too so here’s cash and
short-term assets separated, which shows
there’s more than enough liquidity at this
company and the team knows how to keep it
from leaking away when times are tough.
Liabilities look like this:
SAM.to: Liabilities per qtr
50
40
30
20
10
0
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj
source: company filings/IKN ests
srallod
fo
snoillim
SAM: Cash & short-term investments
12
10
8
6
4
2
0
LT debt
current debt
The major lump there is a $15m deferred tax liability that doesn’t affect SAM as a going
concern. Then comes the previously documented near-$6m financial debt taken by the
company ($4.5m and $1.3m plus interest) to build Altiplano, as mentioned above. As these are
pressing loans, with the big lump due in November and the smaller one in August 2017, these
are worth a closer look and when we do, the best case is simple, SAM will be able to clean its
financial debt completely thanks to the U$7m net from the San Pedrito real estate deal (see
above) more than enough and another reason as to why the unexpected bonus of this real
estate sale is so welcome, great timing.
But even in a “reasonable worst case” scenario (e.g. absolute worst case would be gold
dropping to U$500/oz or the kidnapping of the entire San Martin workforce, so let’s keep inside
the bounds of reality) SAM has its obligations fully covered. Working cap as at end 2q16 is a
healthy C$10.567m, which includes cash of $3.495m and on top of that, a bank investment
certificate for $4.921m that matures on November 5th 2016, in other words just before its
$4.5m principle needs to be repaid. SAM has its financial obligations fully covered, even if San
31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj
$m
source: SAM filings, IKN ests

,
Martin doesn’t show positive free cash flow this year (when it almost certainly will) and even if
the real estate deal, due closed this July or August, is delayed or deferred.
SAM.to: Working Capital per qtr
14
12
10
8
6
4
2
0
-2
-4
-6
-8
-10
-12
11
11.yluj 11.tco 21.naj 21.rpa 21.yluj 21.tco 31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj
source company filings
srallod
fo
snoillim
And it’s this working capital position that is my idea of the easiest way to value the solid
financial position at SAM. It’s managed to keep it at least $10m all the way through the fallow
period, that’s worth 20c/share and that’s something SAM isn’t getting much credit for. It should.
Discussion and conclusion
I’ve split SAM up into its main moving parts and tried to give a share price value on each piece.
Let’s start with the basic count as stands today which goes like this:
• Real Estate Deal: Assuming correct closure, 17c per share
• Altiplano: If all goes well with the commissioning and ramp up to FCF+ status, we
discount to $7m value and 14c/share
• San Martin: Assuming an easily reached $2m annual net profits at current gold prices,
then a 6X P/E, San Martin is valued at 24c/share.
• Asset Book: Currently booked at just over $3m, or 6c/share
• Strong financials: Using the consistent $10m working cap number as guide, 20c/share.
That little lot comes to 75c, which is where I’m going to set my first target for SAM.to as from
this weekend. This represents a 59.6% upside from this weekend’s price of 47c and I believe it
to be an eminent gettable number. Once people start noticing the underlying value in this
stock, the operating profits, the recent growth, the strong financial position and the latent value
in its fixed asset portfolio it’s going to be bought up in this new bull market for gold stocks. It
ticks all the boxes.
So The IKN Weekly, in raising Starcore International (SAM.to) to Top Pick, sets its new price
target at a very juicy but logical 75c and that means there’s a 60% gain up for grabs. However,
you may have noticed that under a scenario where gold and then other metals move higher,
there’s a lot of potential untapped value here in the company.
Example: Moly get popular again and SAM sells part or all of El Creston (or Ajax, or Molybrook)
for pure cashmoney.
Example 2: SAM churns out 5000 oz AuEq per quarter at San Martin, with every $100/oz added
to gold bringing in 1c/share per quarter in extra revenue. Plenty of upside multiple there.
Example 3: Altiplano moves through the gears and becomes neatly profitable, expands to
50tpd, creates $200/oz net margins on 20,000 oz gold equivalent per year. That may be a blue
sky scenario and I’m not trying to sell you it today, but run the numbers and you’ll se that it’s
also perfectly possible. Another 8c/share annual net EPS arm of this company could be worth
50c on each share and I write that up without blinking an eyelid.
All those and more. The bottom line is that under present circumstances SAM.to is a cheap

,
purchase, but if things start going wel for both company and the macro market, this one has
clear-cut chances of being one of your fabled multi-bagger opportunities. And that, ladies and
gentlemen, is why I’m loading up on Starcore in the days to come.
Stocks to Follow
Last week, two of of our eight open positions on the ‘Stocks to Follow’ list registered week-
over-week losses (BTO.to, FCV.v), the other six were winners and among them, the heavy
percentage gains in INV Metals (INV.to up 26.1%), Regulus Resources (REG.v up 25.0%),
Starcore (SAM.to up 16.0%), HudBay (HBM short up 14.4%) and Lara Exploration (LRA.v up
11.1%). Focus Ventures was the big loser in percentage terms (FCV.v down 15.4%), but in
practice it was only a penny. The minor 2c loss in Top Pick B2Gold was the big downer, it didn’t
manage to rise with the tide last week.
With the addition of the short in HudBay (HBM) we’re now up to eight open trades, seven less
than our self-imposed maximum and still plenty of space and cash to play with. Five positions
are green, three are red and two of those are long-term, deeply underwater trades.
company Ticker this week Avg Price Reco date Current PPS Gain/Loss% Notes
TOP PICK
B2Gold BTO.to Buy C$2.11 12-sep-14 C$2.16 2.4% New 2016 tgt C$2.50
Metals Producers (in current order of preference)
Starcore Intl SAM.to ADDING C$0.48 10-jan-15 C$0.47 -2.1% Adding this week
Land Grab Stocks (in current order of preference)
INV Metals INV.to buy C$0.24 27-apr-16 C$0.29 20.8% new near-term trade
Lara Expl. LRA.v spec add? C$1.15 08-apr-12 C$0.40 -65.2% solid biz model, waking up
Short positions
HudBay Min. HBM short U$3.60 03-apr-16 U$3.10 13.9% new short, near-term trade
Other Recommended Stocks (in current order of preference)
Focus Ventures FCV.v hold C$0.23 01-jul-12 C$0.055 -76.1% Hit hard by PFS news
Nevada Sunrise NEV.v spec buy? C$0.185 28-feb-16 C$0.19 2.7% V small Li spec play
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-apr-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.
HudBay Minerals (HBM): Short position open. And a nice start too, rarely do I get such
fortuitous timing. HBM was kind of soft early week, but due to copper’s big drop on Thursday
12

,
(well, Thursday overnight Asia trading to be exact) this short, opened Monday at U$3.60 (could
have got higher, didn’t) went from modestly to solidly green in the first week of existence. For
a while Thursday it traded under U$3 before bouncing back a bit Friday, but it couldn’t hold it
together.
In real news, HBM told us it would publish its 1q16 on April 28th and announce the numbers
along with a ConfCall on Friday April 29th. So, three weeks to wait.
INV Metals (INV.to): ADDING at a reasonable price if possible. My spec play on
Ecuador got its tape well and truly painted Friday,
as this ten day chart shows. But at least it came
with a bit of volume and the crazy way the juniors
traded on Friday means that it might not drop
back next week, you never know.
The weekly gain looks very cool and all that this
weekend, but it’s best taken with a pinch of salt
until more volume moves in at these prices. And in
fact I hope it doesn’t stick because this is the
place in which I want to add more if possible and
as I’m allergic to chasing prices, I’ll let it come
back to me first. If possible. Aiming to enter as
before, 25c maximum.
Silver Range Resources (SNG.v): Trade still NOT opened yet. It traded at 8c a couple of
times, but as I was not on the bid they didn’t trade to me. Reader C also mailed to report he
couldn’t get a fill, even a small one. I may defer this trade idea, no point in banging my head
against an illiquid brick wall and saying the same thing every week. It’s tinycash in the end, too.
B2Gold (BTO.to) (BTG): BTO underperformed last week, not so good. That could be because
BTO has taken a break compared to peers after out-performing just about everything else in
the mining universe in March, or it could be because of the negative optics that came from a
wholesale dump of insider share sales filed last week. You can get an idea of the sales on
Canadian Insider (2) but for the full whack it’s best to go to the horrid SEDI website and trawl
through the official filings. When you do and once you’ve done the right filtering, you can put
together this table to see how they all add up:
BTO: Insider Sales filed April 2016
Name Shares sold
Clive Johnson 398,906
Roger Richer 145,987
William Lytle 145,987
Thomas Garagan 145,987
Ian MacLean 88,116
Dale Craig 75,186
Dennis Stansbury 58,684
John Rajala 40,099
Brian Scott 35,087
Hugh Mackinnon 35,087
Eduard Bartz 35,087
Total 1,204,213
source: SEDI, IKN calcs
CEO Clive “I’m A F__ing CEO” Johnson led the pack with 398,096 shares sold, but other officers
weren’t far behind him and the total number of shares added by company directors and officers
to the total shares out count was over 1.2m, mostly from restricted share awards that came out
of escrow, some via options. If you consider the average selling price was around the C$2.15
13

,
level, those names have just carved up a C$2.5m pie between themselves.
We can mitigate this in a couple of ways. Firstly, the directors get these restricted shares and
options as part of their numeration packages and have every right to enjoy the fruits of their
labours. Secondly, BTO management get this selling window every year and the process is at
least expected and regimented. Thirdly, BTO has a track record of insider selling over the years
and in the share price growth period too, when the stock went from $1 to $4. These type of
sales didn’t stop the share price from moving up.
But mitigation only goes to a certain point and I’m the first to agree that the optics on this type
of wholesale insider liquidation are awful. The sales of BTO by the people that know the
company best are a big fat negative and when management are the ones causing share price
headwinds, they need to be called out on bad practices. Good company or not, I’m getting very
bored with Clive Johnson, he’s just another mining guy with an out-sized sense of self-
importance.
Starcore Intl (SAM.to): Much more on the
stock above, here we note trading and
another tape-painting exercise, though at
least it has traded at these high-40s level
recently (this ten day chart as evidence) and
the person who picked up 50c or so at 39c
on Wednesday must be feeling very happy
with her or him self (which means it wasn’t
me).
The Copper Basket
After fourteen weeks of 2016, The Copper Basket shows a 34.82% gain to level stakes.
company ticker price 1/1/16 Shares out Market Cap current pps gain/loss%
1 HudBay Min. HBM.to 0.35 235.23 943.27 4.01 -24.5%
2 Ivanhoe Mines IVN.to 0.61 778.96 685.48 0.88 44.3%
3 Reservoir Min. RMC.v 4.08 48.69 346.67 7.12 74.5%
4 Capstone Min. CS.to 0.44 382.04 181.47 0.475 8.0%
5 NGEx Resources NGQ.to 0.65 205.06 137.39 0.67 3.1%
6 Nevada Copper NCU.to 0.66 80.5 74.87 0.93 40.9%
7 Western Copper WRN.to 0.38 94.19 66.87 0.71 86.8%
8 Copper Mtn CUM.to 0.445 118.8 57.02 0.48 7.9%
9 Cordoba Min. CDB.v 0.16 86.86 55.59 0.64 300.0%
10 Copper Fox CUU.v 0.125 417.64 50.12 0.12 -4.0%
11 NovaCopper NCQ.to 0.395 104.33 46.95 0.45 13.9%
12 Hot Chili Ltd HCH.ax 0.09 445.723 33.43 0.075 -16.7%
13 Atico Mining ATY.v 0.28 97.59 29.28 0.30 7.1%
14 Amerigo Res ARG.to 0.205 173.61 21.70 0.125 -39.0%
15 Revelo Res. RVL.v 0.055 99.19 6.94 0.07 27.3%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg 34.82%
The Copper Basket clawed back all the loss it took from the previous week, up 4.67% even
though there were just five weekly winners (IVN.to, RMC.v, HCH.ax, WRN.to, CDB.v), with
three others unchanged (CUU.v, ATY.v, RVL.v) and seven losers (HBM.to, CS.to, NGQ.to,
CUM.to, NCU.to, NCQ.to, ARG.to). That’s because the Cordoba Minerals (CDB.v) shows keeps
on rolling along with this year’s star junior copper name up another 30.6% last week and is
14

,
now a 300% winner 2016 year to date. To put that into perspective, if CDB were at UNCH for
the year our overall basket would be at
14% profit, in other words CDB.v alone The Copper Basket 2016, weekly evolution
35%
adds 20% to our basket average’s 30%
performance. No other winner’s 25%
20%
percentage move got into double figures, 15%
but we did have some larger losers in 10%
5%
HudBay (HBM.to down 14.3% and I 0%
won’t play cute, I’m happy about that) -5%
-10%
and Amerigo Resources (ARG.to down
-15%
12.0% and soon to be re-named -20%
AAAARGH.to).
While some of the smaller names (and
CDB doing its own thing) propped up our average,
copper metal market action caused the weakness in
the more serious players and bigger names such as
HBM. In fact, it’s testimony to how strongly the
tinycaps performed that those in the copper business
managed to shake off this type of price drop
Meanwhile, it’s important not to over-play the bearish
hand. In what could be the single most stupid
headline from the wires about copper so far this year
(plenty of time yet though), Reuters on Thursday gave
us...
“China set to shake up world copper market
with exports as stockpiles rise: traders”
...(3) a header which seems to hang on one single
anonymous comment from (and I quote) “a source at
an Asian copper producer, who declined to be named because he is not authorized to speak to
the media”. That person said:
"The situation for copper smelters in China is probably the worst it has been
in 20 years. But they won't admit it. It wouldn't surprise me in the least (if
they start exporting)”
Gotta love the telephone game. It’s one thing to get a quote from an under pressure trade desk
suit after his long day and then four or five unwind cocktails, quite another to get your shock
piece headline on it. This is dumb beyond imagination and to nip this one in the bud right now:
• China copper production 2014: 1.632 million tonnes
• China copper imports 2014: 3.59 million tonnes
• China copper production 2015: 1.669 million tonnes
• China copper imports 2015: 3.678 million tonnes
When you import twice as much “stuff” as you make, any “stuff” you care to name, every single
year forever, you don’t suddenly start exporting your stuff. People, I’m not denying that China’s
copper demand has moved into inertia and in fact it’s one of the main reasons I’m now short
HudBay (HBM). I’m also clear about certain copper products that already get exported from
China (they do brisk copper wire trade with the Indian subcontinent, I’m reliably informed)
but...please...let’s not move into sillyworld.
Meanwhile, back in the serious world of supply and demand and some real bearish news we
note that the world’s biggest single copper mine, La Escondida, is coming out of its low
15
dr3naj ht01 ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht6 ht31 ht02 ht72 dr3rpa ht01
source: IKN calcs

,
production period. Here is your chart from the Cochilco website that shows how January 2016’s
monthly output (ene 16, for “enero” meaning January in Spanish) popped back close to 100k
tonnes copper after five months of under-average 80k tonne numbers.
La Escondida: Monthly copper production, Jan 2000 to Jan 2016
160
140
120
100
80
60
40
20
0
16
00-ene 00-luj 10-ene 10-luj 20-ene 20-luj 30-ene 30-luj 40-ene 40-luj 50-ene 50-luj 60-ene 60-luj 70-ene 70-luj 80-ene 80-luj 90-ene 90-luj 01-ene 01-luj 11-ene 11-luj 21-ene 21-luj 31-ene 31-luj 41-ene 41-luj 51-ene 51-luj 61-ene
Kmt Cu
source: Cochilco
And things can only get better for La Escondida, as last week saw the official inauguration of its
new third concentrator, OGP1 (4) a U$1.5Bn capex Project that has added a cool 152,000
tonnes per day capacity to La Escondida, a mine that now has a total nameplate capacity of
422,000 tonnes per day. That’s my idea of a mind-boggling figure. Add that to the nearly
complete U$3Bn desalination plant and water pipeline project that will provide all the water La
Escondida will ever want without worrying Chile’s water table any longer and this mine is now
ramping back up and is set to return to an annual production rate of 1.2 million tonnes of
copper per year.
The future for copper is in big mines, not in the dead and dying medium scale operations. For
more details, please check the price charts for Capstone, Copper Mountain, HudBay etc.
We move to the weekly copper warehouse inventory bullet points:
• Total world copper stocks in the three official warehouse systems dropped last week,
but not by much. The total this weekend is down 5,575 metric tonnes (mt) (-1.0%) at
571,859mt.
• Shanghai inventories dropped again and in the weeks to come you’re going to get used
to reading that line, but it didn’t drop by anything big and copper stocks moved down
7,800mt (-2.1%) to 360,925mt. The relative lack of shipments may have been one of
the causes of last week’s sudden drop in the copper spot price.
• LME stocks dropped 5,600mt (-3.7%) to finish at 145,675mt. Not much changes, stocks
are low but there’s not much rush to get back in here, all the action (and the price
discovery) is now firmly in the SHFE camp. Times have changed.
• Comex numbers were virtually unchanged, dropped a mere 50mt (-0.1%) to finish at
65,259mt. Enough said.
Here’s the Shanghai-only chart...

,
Shanghai Futures Exchange Warehouse Stocks, 2014-2016
400000
350000
300000
250000
200000
150000
100000
50000
17
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
....which shows the continued drop from the March peak. The burning question is about the
speed of the de-stocking about to come.
Now for brief comments on a couple of our basket stocks:
Nevada Copper (NCU.to): I haven’t been bearish on this one this year, it’s been years on
end. I was reminded of this last week by reader
DF, who sent me a link to my own post dated
March 14th 2014 (5) and addressed the “we’re
getting permitted” line of promo NCU was using at
the time, the post ending with the pithy “Crap
rocks with a permit are still crap rocks. Any further
questions?”. Here’s the price chart form then to
now, really nothing has changed except for the
number of cheques that top management has cut
for itself. Nice job if you can get it.
Cordoba Minerals (CDB.v): We had significant news out from CDB last week, which may be
construed as a prelude for the release of the much-awaited assay results from its (now six
month old) drill campaign, but for me what we saw last week is more important.
The news release out (6) Wednesday morning went down well with the stock, it moved up
again (as is its habit) on decent volume that day (500k+), but the more I looked at the
arrangement that CDB has come to with sponsor Robert Friedland, mainly via his privately
owned HPX company, the less I liked the look of the deal. The details are in the NR but the
impression is that of a big player, Friedland, muscling in on a smaller player and now in the
position to squeeze them out of participation if San Matias turns out to be a winning project.
The first stage of the Deal Phase One, will be covered by the next $2m or so spent by HPX and
will give that company 25% of the property. Stage two will bring HPX up to 51% ownership by
spending an extra C$10.5m in a maximum of seven years (though they’ll probably get there
long before that, see below) and if HPX decides to fund the project to pre-feas stage (which is
the type of result they’d be looking for after investing that type of cash already) HPX’s
participation goes to 65%, with CDB at 35%.
It sounds like a standard (though somewhat bargain) earn-in agreement, but the thing that
gets me is that Friedland, via his previous share purchases of Cordoba, is already very close to
45% ownership of CDB.v which is the standstill agreement maximum. In effect, if HPX takes
this to PFE stage Friedland has over 84% of the project under his name and it looks too easy to
shove the small people, i.e. you and me small retailers in CDB, out the way at a cheap number.

,
I put this to Mario Stifano, CEO of CDB, in a short mail on Wednesday morning that said this:
“I'll get to the point, Mario: At every turn in the NR, it looks as though Friedland
is muscling in on the assets. I'd be happy to hear why my assumption is mis-
placed.
How long does HPX have to complete the Phase two earn-in?
He replied with an even shorter mail (which perhaps I deserved):
“Friedland is going all in which is fantastic for Cordoba.
I think 7 years - but he won't take anywhere near that long”
That’s the type of reply that makes me more concerned rather than less. No details, nothing to
refute my concerns and of course Friedland is going “all in”, one glance at his track record is all
you need to know it’s the only way he ever goes on these exploreco plays. Stifano’s reply
passes the bravado test, however.
At this point I would like to remind readers that although I may have tipped CDB as a tinycap to
watch in 2016 and talked up its potential early year, I did NOT recommend the stock at any
point and do not own any shares: In simple terms, I missed the boat. Hey ho hard luck me, but
it does mean I have no skin in the game at this stage and it makes it a little too easy to shoot
my mouth off about potential “fears” that don’t affect my own cash pile or portfolio. That said, I
fear that CDB is being put into a spot where it will be all too easy to remove the minority
ownership and dilute it out if the project turns out to be a big winner, but it still runs the
downside risks at this point if it’s an eventual sinner.
The next stage of this story should come soon, the news that Alacran’s ownership has been
defined was the prerequisite for the publication of the drill numbers, I’d expect we get them
this week and by the look of the way Friedland has been aggressive, positive numbers are now
baked into the pie. Time will tell how positive and if they have the capacity to move the stock
further North. I pass on ownership at this point.
The Low Cost Producer Basket
After 14 weeks of 2016, the Low Cost Producer Basket shows a gain of 77.56% 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 17.67 15.17 105.6%
2 Newmont NEM 17.98 529.12 15.40 29.10 61.8%
3 Goldcorp GG 11.56 830.22 14.21 17.11 48.0%
4 Franco Nevada FNV 45.75 176.298 11.49 65.15 42.4%
5 Agnico Eagle AEM 26.28 217.67 8.37 38.47 46.4%
6 Ang/Ashanti AU 7.10 405.27 5.90 14.56 105.1%
7 Sibanye Gold SBGL 6.09 228.71 3.41 14.93 145.2%
8 Detour Gold DGC.to 14.41 170.85 3.93 22.99 59.5%
9 New Gold NGD 2.32 509.89 2.11 4.13 78.0%
10 Buenaventura BVN 4.28 254.19 2.00 7.86 83.6%
Prices in U$/NYSE tickers, except DGC.to (CAD$) Portfolio avg 77.56%
Once again nine winners and just one loser, this time the loser was Sibanye Gold (SBGL) which
had some operational issues holding it back. The others all put in gains, with the biggest
numbers struck by Barrick (ABX up 11.1%), Detour (DGC.to up 10.4%), New Gold (NGD up
18

,
9.6%) and Newmont (NEM up 9.3%). Heavy moves for these larger companies.
The Low Cost Producer Basket: Weekly performance
80% and comparative to GDX control
70%
60%
50%
40%
30%
20%
10%
0%
-10%
19
dr3naj ht01 ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht6 ht31 ht02 ht72 dr3rpa ht01
basket
gdx control
source: Google Finance, IKN calcs
Our basket is now 21.29% ahead of the GDX benchmark, which is good.
Low Cost Basket: Percentage difference between
basket and GDX control, 2016
5%
0%
-5%
-10%
-15%
-20%
-25%
dr3naj ht01 ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht6 ht31 ht02 ht72 dr3rpa ht01
source: ikn calcs, NYSE/Nasdaq data
Buenaventura (BVN): This one has rushed
back up to re-join the pack, an impressive
catch-up move in the last month after being
hit much harder than its peers from last
November onward.
A reminder here that of the “Veronika
Mendoza Trade” outlined in ‘Regional
Politics” below, go these for more but if
Mendoza manages to snag the second spot
in today’s Peru presidential election, BVN
could offer a great snap-back trade once the
panic sellers are done.
Sibanye Gold (SBGL): Last week’s only
loser of our bunch, Sibanye had its own
problems to contend with via a threatened
strike by its workforce in South Africa.
The bad news came out late last weekend (I
missed on picking it up in IKN360 last week),
the good news is that the situation got
unofficially better on Friday and this
weekend (7) a deal has been struck and the
strike averted. Sibanye can get back to its
record-setting 2016 rise next week.

,
Regional politics
Argentina: Why criminally charge one President when you can charge two?
A week is a long time in politics. It’s an absolute eternity in Argentina.
The country last week went from the type of open debate about the new direction and either
praise or rumbling complaints about the social changes under the new Macri government to
outright us/them war being declared by the two sides of the political spectrum. The first
revelation was the connection between President Macri and the ‘Panama Papers’ scandal, which
has hit the rich and powerful all over the world. Macri’s involvement is via his (very rich and
success business) father Franco Macri’s companies who are named in the leak and have used
Panama as a tax haven. Included in the papers are companies which son Mauricio headed at
the time of the alleged tax evasions. Macri was formally charged with criminal offences (on a
preliminary basis, but still charged in the classic manner of the Argentina legal system) and
presented his defence statement on Friday in which he basically denied everything and claimed
his companies had paid their dues.
Meanwhile and on the other end of the scale, the testimonies of CFK-government henchmen
who have been charged with money laundering, corruption and all sorts of financial
wrongdoings during the Cristina presidency years brought about criminal charges levelled
against the ex-Prez herself (8) with the news hitting the wires yesterday Saturday. Again
preliminary charges rather than something she gets immediately arrested and locked up over,
but as in the unconnected Macri situation be in no doubt, these are criminal charges.
The anti-Macri brigade staged a protest in front of the Casa Rosada presidential palace on
Thursday, thousands turned up and little was made of it all in the pro-Macri press and media.
The same pro-Macri press that treated the criminal charges against him as 4th or 5th story of the
day (Macri’s problems got more headlines in foreign wire services than in Clain or La Nacion)
have gone to town over the CFK news, further cementing the country’s reputation for free and
unbiased journalism. Not.
The next couple of weeks will be key, Argentina could quite literally descend into chaos. I’d
expect CFK loyalists to make a lot of noise against Macri’s involvement in the Panama Papers,
the best way to obfuscate their leader’s new problems and slow down the pace of the
investigations. My plan will remain that of “Wait And See” on significant country exposure and
the key inflation data we should look for in 3q16 or so will set the tone.
Peru: A potential “Veronika Mendoza” trade
Here’s one of those bipolar pieces that could be in ‘Regional Politics’ or could be in ‘Market
Watching’, because it offers up trade ideas on a political event. I’m sticking it here, so be it. As
I write these words on Saturday lunch time, we in Peru are in legally mandated the electoral
cooling off period between the end of campaigns and the start of voting tomorrow Sunday
morning. It’s supposed to provide a period of reflection in which citizens can consider what
they’ve heard from the presidential and congressional candidates and added to that, it’s also a
legally mandated dry weekend where you can’t buy alcoholic beverages of any type before
Monday comes.
It’s a pleasant 24 hour break from the noise of politics, which has been dominated in the last
couple of days by the reports, promotions, suggestions, assertions or clearly stated fears
(depending which part of the political spectrum the speaker coms from) that Veronika Mendoza,
the only truly left wing candidate running in for President that in with the chance, has drawn
level for second place in late polls and is challenging Pedro Pablo Kuczynski for the coveted
second spot. Whoever comes second goes into the run-off for the big job against Keiko Fujimori
and if it’s “Vero”, we can expect the right-wing pro-business media in Peru (which is all the
major channels) to throw up their hands in collective horror. The thought of a REAL lefty
coming to power in the country, rather than the fake lefty that Ollanta Humala acted out to get
the job, brings those with the real power in Peru out in a cold sweat so if she manages to beat
20

,
their favoured candidate PPK you’ll hear the wails and screams on your side of the Darien Gap.
Be clear, Veronika cannot win against Keiko. This is the easiest political call of the year, the
easiest since calling Rafael Correa and Evo Morales as winners in their last elections. It’s a no-
brainer and anyone outside of the pro-Vero camp will tell you the same, Keiko may be polemic
in her own right due to her father’s legacy and connections, but she’s the least-worst of the two
by a country mile.
• Yes, there are second round projection polls doing the rounds which have Keiko
Fujimori and Veronika Mendoza in a tight fight for the run-off. They’re complete BS,
likely being sown into the debate by PPK people trying to frighten voters into
supporting him instead of voting for their preferred also-ran.
• Mendoza doesn’t stand a chance against Keiko in round two, it’ll be 55% to 45%, nail
that down.
• It will be bizarre to see the Peruvian press and commentariat suddenly frame the
daughter of the 1990s dictator as the last chance to save the country, but that’s what
they’ll do.
• And the left simply doesn’t have enough support. The way it works here is that you try
and capture the minority left to get you into round two, then a successful challenge
form the left moves to the centre and captures waverers. With Mendoza, she’ll stay full
lefty all through the run-off and alienate people, rather than attract them.
And that’s the trade opportunity set-up mentioned in the title, because if there’s enough
screaming and wailing from down here, some of you up there worried about Mendoza actually
winning (and she’s a true anti-mining person) might panic and dump Peru exposure. Bonds,
currency, stocks and yes, mining stocks. It’s a simple trade set-up too, if you see panic selling
in Peru-exposed names such as Buenaventura (BVN), the Peru ETF (EPU), Banco Credito (BCP),
or perhaps less exposed names such as Fortuna Silver (FVI.to), Teck (TCK), HudBay* (HBM) or
Newmont (NEM) let them find a bottom and then grab yourself a few shares, because once it
becomes clear up there that it’s an over-reaction and Vero will not win, the same stocks will
rebound from whence they came.
For the record, my preference as the flip vehicle is for EPU as it’s a pretty faithful tracker of the
country’s stock exchange (BVL), with Buenaventura (BVN) in second spot due to its total
exposure to Peru and liquidity. Also please note the asterisk placed next to HudBay’s (HBM)
name in that previous paragraph, as I’m already short there personally but may end up
covering and taking profits very quickly if it spikes down (a de facto way of playing any down-
up spike to the long side). For what it’s worth there are other names with big Peru exposure
that you might want to consider, such as Bear Creek Mining (BCM.v) and Trevali (TV.to). You
may see the same type of reflex dump and bounce, but as I have serious issues with the
fundies of all of those (esp HBM today, short as I am) I can’t reco them as potential rebound
trades on any punctual drop. You may think differently, and that’s fine by me.
As for the logistics and timeline of the election itself according to the Peru electoral body ONPE
we can expect the results schedule in this way:
Sunday 4pm, the first exit poll numbers come out as polling closes. This “Flash” is unofficial and
recent years have seen discrepancies between the first numbers thrown at people and the final
official results, so if it’s tight between candidates take them with a pinch of salt.
Sunday at 9pm local time (10pm New York and Toronto), the first batch of official numbers
from ONPE. They expect to be able to provide around 20% to 30% of the final count at this
point.
An official result “on Monday morning”. Due to this I’m not going to wait until late Sunday
before sending the weekly and if there’s a “Veronika” trade to run, you have the roadmap set
out above. If not, there isn’t.
21

,
Market Watching
Continental Gold (CNL.to) personnel threatened by terrorists in Colombia
A deterioration in the situation faced by Continental Gold (CNL.to) at its Buriticá project in
Antioquia, Colombia. The so-called Urabeños far right wing paramilitary terrorist group, have
published a pamphlet with direct threats against the company, against 21 of its employees
(particular attention given to higher level management) and to security firms and local citizens
that are seen to be helping CNL. The Urabeños consider those mentioned as “military targets”
(9). CNL told reporters in Colombia that it didn’t plan on issuing a news release on the subject
and trusted the well-being of the company and its employees to the rule of Colombia’s
government.
It’s understood that the Urabeños are closely connected with illegal mining in the region and
allied with the leaders of the Buriticá informal/illegal miners who were arrested a month ago
(March 8th to be exact). It’s fair to assume the terrorists are annoyed by the recent move from
government and company to close down the illegals in the Buriticá zone, thereby stopping their
money from flowing. For the rest of us, it goes without saying what the optics of any terrorist
attack against CNL in Buriticá would be or how a serious incident would reflect on Colombia the
country as a place to go mining.
CNL has been getting bid up again recently, mostly on the back of a promotional push by
company CEO Ari Sussman who has been assuring anyone who wants to listen that his
company will get its permits. The above is no small matter and they are not idle threats, this is
a serious political risk situation for CNL, the mining sector in the country and the country itself.
Porter Stansberry brings a bazooka to a knife fight
He moves in darkness as it seems to me,
Not of woods only and the shade of trees.
Mending Wall, Robert Frost, 1914
As mentioned in today’s intro, last week’s biggest market moving event came from the money
side of the mining sector, rather than the mining or operational side. For those unaware as to
who Porter Stansberry is he’s the brains behind Stansberry Research, that bought out the Agora
empire a few years ago (where Stansberry started work as a file clerk in 1996) and in 2014
bought out Casey Research from its founder Doug Casey. He’s also the person who was fined
$1.5m in 2007 by the U.S Courts for disseminating false stock tip information, with a court that
said during its ruling that, "Stansberry's conduct undoubtedly involved deliberate fraud, making
statements that he knew to be false”. When he tried to take his case to the U.S Supreme Court
under a First Amendment appeal, he wasn’t even let in the door (10). He moves, he shakes, he
sells dreams and investment tips, he tells his largely hard-right-wing audience what they want
to hear (a recurring theme is the Death of the Dollar, the pitch is to sell gold, sometimes
punctuated with warnings how Barack Hussein Obama is about to hijack the constitution and
claim a third term of office), he’s short on morals, long on spiel. In short Stansberry is a stock
tout and obviously a successful one as these days his touting moves markets in a way his peers
and wannabes only dream about.
Last week Stansberry rolled out a new promotion and it’s a doozy. You can find it if you like on
the internet, not difficult to come across, in which for the low low price of U$1,500 (one
thousand five hundred United States dollars) down and $49 per month you get immediate
access to his suite of 15 investment recommendations that tie in closely with the...yes you’ve
guessed it,...imminent death of the dollar and a gold price about to jump to $2000, $5000 and
even $10,000 per ounce on wholesale financial sector meltdown and destruction. Bless him.
After noting the moves in stocks apparently under the Stansberry pump on the blog last week
and after posting (12) on possibles and probables on the list, I decided to stop being so lazy
and chase up the story a bit more. It turns out that the 15 Stansberry investment
22

,
recommendations aren’t all mining stocks, but there are seven precious metals mining stocks
highlighted and recommended and they are the following:
• Silver Wheaton (SLW)
• Franco Nevada (FNV)
• NovaGold (NG)
• Pretium (PVG)
• Almaden (AMM.to) (AAU)
• Midas Gold (MAX.to)
• Lundin Gold (LUG.to)
That’s an interesting list for several reasons, so let’s start by splitting them down the three
obvious sub-sets, small medium and large:
1) The smallest ones LUG.to, AAU/AMM.to, MAX.to: These are straight plain juniors all.
Here’s a five day chart that shows how they’ve performed compared to gold (GLD)
Those are big, nay massive two day percentage price moves. The type of move that catches
the eye of regulators and Lundin Gold was required to comment on the activity on Friday (14).
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Apr 8, 2016) - Lundin Gold Inc. ("Lundin
Gold" or the "Company") (LUG.TO)(LUG.ST), in response to a request by Market Surveillance
(IIROC), today confirmed that it is not aware of any material, undisclosed information related to
the Company or its Fruta del Norte gold project in Ecuador that would account for the recent
increase in the market price and level of trading activity of its shares.
As is often the case, it’s what they don’t say which is as important. LUG is under no obligation
to state everything it knows, it needs to disclose its own position and nothing else, but nobody
in their right mind runs a multi-million dollar public listed gold mining company and doesn’t
know within seconds the whys and wherefores of significant price movements in its shares. Or
put more simply, Ron Hochstein isn’t going to say, “We are not aware of any material,
undisclosed information related to the Company or its Fruta del Norte gold project in Ecuador
that would account for the recent increase in the market price and level of trading activity of its
shares but we do know that Porter Stansberry just pumped the merry bejeez out of our stock
and it’s flying because a whole bunch of people are scrabbling for the few shares on the ask”.
Not LUG’s problem, frankly, but you could reflect to yourself how “fortunate” this timing is for
Lukas Lundin, what with LUG’s big financing to raise the capex required to build the mine has
been flagged by the company itself for this quarter.
2) The medium-sized companies, NG, PVG: These are liquid stocks with decent sized
market caps of around $2Bn and $1Bn respectively and as you’d expect they do much better
23

,
average market volumes in both share count and cash terms than the smaller fry noted above.
Here’s how those two traded on on Thursday and Friday compared to GLD, as well as the GDX
and GDXJ benchmarks which also had good days:
As you can see, PVG and NG out-performed GDX and GDXJ by around 4% on Thursday and
Friday, which is a reasonable return for one’s efforts but nowhere as impressive as the little
guys noted above
3) The big cap miners, FNV and SLW: These are highly liquid Tier 1 names, worth $11Bn
and $7Bn by market cap. Here’s the five day chart of these two against GLD, GDX and GDXJ:
FNV performed right on the GDX/J average, SLW didn’t have such a great time (perhaps
because it’s still in the overhang period of its recent $550m equity placement) but performed
closely with GLD.
Discussion of promotion effects. The seven stocks performed very much in line with what a
market watcher would expect from them under these circumstances, targets of a big promo
pump by a market tout with a following of people who can easily sell out $1,500 for a list of
names. For sure the whole mining complex had a good week and that helped things pop nicely
too, but the small non-liquid stocks’ massive moves weren’t mirrored by the bigger and more
liquidty traded issues. That makes sense, as even the biggest mining promo pusher can’t bring
in the type of cash that would move up FNV 50% on its own, but it’s perfectly feasible to have
a $5m anomaly entering Almaden and seeing it pop like crazy.
So let’s look a little more closely at the big movers, with LUG popping over 30% in two days,
MAX around 40% and AMM up 60%. As for the volumes involved, Lundin Gold (LUG.to) isn’t a
good example because it’s a very tight share structure and there’s little width available even if
24

,
you pay up. Also, after running the numbers on that one just a few weeks ago I know it’s now
way over-valued (and for my taste, a perfect example as to why this isn’t some carefully DD’d
scientific list...it’s just another stock pump). However Almaden and Midas are fairer yardsticks
so let’s note volumes in those stocks these last two days:
• Almaden did around 5.5m shares more than its daily average on its US ticker (AAU)
and 1.3m more than its normal on the Canadian ticker (AMM.to). It’s never easy to be
exact, some arbitrage may have caused some of that volume, but it’s fair to say that
AMM saw around $5m dollars flow into it from this promotion and that’s more than
enough to get a normally thinly traded exploreco to jump like a kangaroo.
• Midas did around 2.5m shares more than its daily average in its US OTC ticker
(MDRPF) and the same in Canada (MAX.to). Let’s go for around $2.5m in extra volume
in this company’s shares the last two days of last week. We should also note that as a
Canada listed stock with just an OTC entry point for US investors (apparently the lion’s
share of Stansberry customers, I’m reliably told), it’s a lot easier to move cash into AAU
than it is AMM.to.
From those, it’s fair to say that between $2.5m and probably closer to $5m is the kind of money
Porter Stansberry can conjure up in just two of the 15 investment recommendations he put in
front of clients who paid U$1,500 each for the privilege of reading his words. That’s not bad at
all and as I noted on the blog Saturday (11), “I'll give Porter Stansberry credit too, he sure
knows how to run one of these and makes the rest (of the junior miner newsletter writer and
stock picker community) look like pikers”. He gets an exta $5m moving into an illiquid stock like
Almaden and I don’t have to check out my stock radar page, just my e-mail page is enough as
I’ve received at least 20 mails since Thursday with “AMM” in the title line.
It also makes sense that the entry of a “fresh” $5m over two days into PVG or NG, stocks that
average around U$10m in trade volume per day, will move their dials a little compared to
benchmarks but not by anything like as much as the little guys in percentage terms.
It also makes sense that $5m “fresh and extra” moving into Franco Nevada over two days
(does U$70m to U$70m per day average) or Silver Wheaton (does U$80m to U$90m per day
average) won’t move their dials so very much.
It all fits in fairly well and that type of “Let’s say $5m” per investment idea means Porter’s
clients are not short of cash to play with. Which is fair enough when it comes to the big names,
I’ll even take the medium sized names as fair game for large money at a pinch, but you can’t
tell me that Stansberry Research didn’t know exactly what was about to happen to LUG.to,
AMM.to and MAX.to as soon as he pumpo started. Which makes me wonder just why those
names were chosen.
Focus on Midas
I’m not going into all three of the smaller names today, but there are reasons to suspect that
both LUG and AMM aren’t just names Stansberry pulled out of a hat or eventually decided upon
after close DD. Today I’m going to try and keep it short (ish) so my efforts are now
concentrated on Midas Gold (MAX.to).
In IKN325 dated August 2nd 2015, we ran a feature on what looked like a set-up for a promo
pump in Midas Gold. There were several points and point six noted details about the May 2015
$8m placement, which sold 19.1m units at 42c apiece (unit = 1 share + ½ warrant at 60c
strike, valid for two years). Here most of that point 6 from IKN325 (go see the edition for the
whole thing, or if you’re new round here and would like a copy, just drop me a line):
6) The people who bought the placement. There were a total of 83 persons
(natural or judicial) who took parts of the placement and in among them are many
that are involved in the typical Canadian pump job. There are more promo and
25

,
insto names on the list of placement takers (23) than you can shake a stick at, but
by way of a sample...
• M&G Investment Management of the UK ($1m of the placement)
• Sun Valley Gold Master Fund ($412k of placement)
• Jeff Phillips of Global Market Development ($126k of the placement), who also
earned $91k in finder's fees so there are plenty inside his sphere also in this
deal
• Casey Research via its KCR LLC fund (25) ($420k of the placement), run in
cahoots with Rick Rule and his entourage.
• Marin Katusa ($42k of the placement)
• Plethora Precious Metals of The Netherlands ($84k of the placement)
• Sprott Funds via Exploration Capital Partners fund ($840,000 of placement)
• Kitco Gibson ($21,000 of placement)
All those and more with most of those less interested in the long-term wellbeing of
the Stibnite property and more interested in the near-term lining of their back
pockets. Between them, noise is bound to be made and we also note with interest
that MAX.to was one of the lunch sponsors at last week's Sprott/Stansberry
conference, where those present got a plate of food while they watched the
company present and pitch.
And that’s ladies and gentlemen readers of The IKN Weekly is a long list of usual suspects in
the mining promo world, all with the chance to clip a warrant and then hold out for a liquidity
event in which to take profits.
Next let’s consider one of the key parts of the Stansberry pitch last week. Listen to his spiel (I
did, nearly fell asleep but I did) and you too will hear all about the secret phone call he took
that got him a secret dinner meeting with one of the world’s top hedge fund people in New
York. He then went on to tell us how he heard world top-table financial people talking
about....yup, the death of the dollar and gold at $10k and all those wonderful things. We get no
evidence that the conversation happened that way, or even that the meeting happened, but the
whole hedge fund plus world famous player gold plus fear thing sure sounds like John Paulson
to me. And oh look who’s long MAX.to!
Let’s consider what happened in February this year (closed mid-March), when MAX.to ran a
much bigger round of fund-raising then in 2014 and the main taker was none other than
famed New York hedge fund boss John Paulson. Here’s a chunk of the NR:
As a result of the completion of the Offering, including the issuance of the Advisory Fee
Shares (as defined below), the Company's issued and outstanding share capital
consists of 175,826,167 Shares. Assuming conversion of all of the Notes, the issued
shares would increase to 317,081,748. Were just the Notes held by Paulson converted
into Shares, Paulson would hold approximately 97,437,165 Shares, representing
35.7% of the issued and outstanding Shares on a partially diluted basis and 30.7% on
a diluted basis (assuming conversion of all outstanding Notes).
For the record, as well as the big Paulson position Sun Valley took 24.3m of the conversion
rights (worth about $8.6m) and brought its overall holding up to just under 10%. Then other
large takers of the share offering include M&G Investment Management as well as other names
already listed above. At C$0.3541 per share, these guys are sitting on a real bargain it seems,
now that the Porter Stansberry pump has pushed the stock to 58c. In fact that 42c placement
last year is looking good too.
In other words, Porter Stansberry can time the gold market all he wants, he can pick out FNV
and SLW and even NG too as solid investment vehicles, but the way in which a MAX.to got
equal billing stinks to high heaven because it’s on another level entirely. This is a pump job
designed to benefit his friends, new and old alike. Paulson’s got a free ride on $35m and
26

,
Porter’s got a new BFF. It’s the start of something....beautiful?
Bottom line: Once you see the modus operandi behind these people, you see them for what
they truly are. What you do with this information is up to you, you may consider playing this
pump alongside the ones that know when it was going to start and (more importantly) when it
will stop. If you do there’s potentially money to be made, but it’s also the classic musical chairs
situation so don’t get left standing when the music stops. It tends to stop very abruptly.
And a final word: I’ve also noticed that the Stansberry-owned stock tipping company Casey
Research (Louis James et al) is pumping very hard on the same kind of theme and there have
been out-sized volume moves on no news in some of their typical pump vehicles, such as Brazil
Resources (BRI.v, an awful dog of a thing with mediocre assets in Brazil). These Casey people
have alliances and connections with other market voices such as Marin Katusa and John
Mauldin, the type of people who don’t think it strange for a person to recommend a stock and
sell their own positions at virtually the same time. Other more trustworthy market people I’ve
talked with this weekend have noted strange buying action in small explorecos such as
Colorado (CXO.v). These and others are the type of size and shape better suited to a “stage
two pump” from the Casey people, rather than the main Stansberry Research pump engine. We
may be on the threshold of a multi-stage concerted pump effort by these so-called honest
money people. Think about that, too.
Conclusion
IKN361 is done, we end with bullet points:
• Starcore Intl is the smallest Top Pick I’ve ever had, in market cap terms at least. And
that’s really the essence of the investment, it’s way too small for what it is already and
what it could be in the future.
• B2Gold traded badly, but I’m not bailing on it yet. We’re now moving into a market
phase when stocks won’t be able to help but go up
• Expect more new positions in the weeks to come, there’s a decent cash pile to get
through before I’m done positioning myself in this market. And before you ask, silver
names are now on the table too, yes.
• But copper will remain weak in my view. The HudBay short started well due to copper’s
woes last week, it’s time to see how low it can go.
• You may consider the Porter Stansberrys of this world a necessary evil. You may even
benefit from their services. All I ask is that you’re clear about who they care about and
who they’ll throw under a bus without a second thought.
• And I can safely say that Porter Stansberry wouldn’t approve of the note I wrote about
Porter Stansberry today. That’s because it wasn’t re-written eight times and then sent
through copywriters and legal desks before publication.
I thank you in advance for any feedback. Our Top Pick stocks are B2Gold (BTG) (BTO.to) and
the newly promoted Starcore Intl (SAM.to). Flash updates will be sent if required by events.
I wish you good trading fortune, ladies and gentlemen.
Mark
27

,
Footnotes, appendices, references, disclaimer
(1) http://incakolanews.blogspot.pe/2016/04/the-top-three-most-visited-ikn-posts_9.html
(2) http://finance.yahoo.com/news/starcore-enters-sale-agreement-real-134500122.html
(3) https://www.canadianinsider.com/company?menu_tickersearch=B2Gold%20Corp.%20|%20BTO
(4) http://www.reuters.com/article/us-china-copper-idUSKCN0X40EW
(5) http://www.pulso.cl/noticia/empresa---mercado/empresa/2016/04/11-82831-9-escondida-inaugura-su-tercera-planta-
concentradora-de-cobre-con-inversion-de-us.shtml
(6) http://incakolanews.blogspot.pe/2014/12/bart-simpson-explains-nevada-copper.html
(7) http://finance.yahoo.com/news/cordoba-minerals-announces-hpx-entered-110000144.html
(8) http://www.bloomberg.com/news/articles/2016-04-10/amcu-union-agrees-to-wage-deal-with-sibanye-gold-to-avoid-
strike
(9) http://www.lanacion.com.ar/1887833-cristina-kirchner-imputada-lavado-de-dinero
(10) http://www.elcolombiano.com/antioquia/banda-los-urabenos-amenaza-a-directivos-de-multinacional-minera-
AM3916705
(11) https://en.wikipedia.org/wiki/Porter_Stansberry
(12) http://incakolanews.blogspot.pe/2016/04/the-top-three-most-visited-ikn-posts_9.html
(13) http://finance.yahoo.com/news/midas-gold-completes-c-55-204130967.html
(14) http://finance.yahoo.com/news/lundin-gold-responds-market-activity-173543669.html
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
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Bear Creek Min BCM.v may'14 C$1.63 23-mar-14 C$2.05 25.8% Took profit, sm near-term win
Eco Oro Min. EOM.to aug'14 C$0.48 22-sep-13 C$0.26 -45.8% sold small loser to make room
True Gold TGM.v sep'14 C$0.395 02-feb-14 C$0.41 3.8% M&A won't happen, sold
Santacruz Silver SCZ.v sep'14 C$1.04 26-jan-14 C$0.86 -17.3% silver/M&A spec, rel. small
Timmins Gold TGD nov'14 U$1.38 09-apr-14 U$0.99 -28.3% failed trade, sell, raise cash
Kinross Gold KGC nov'14 U$2.90 20-oct-14 U$2.15 -25.9% V small trade, didn't work, chau
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.145 -48.2% lost China sponsor
Stocks To Follow Closed Positions 2013
Closed in 2013 closed close price
USA Graphite USGT feb'13 U$0.93 08-jan-13 U$0.17 81.7% short tgt made/trade closed
Lachlan Star LSA.to feb'13 C$1.50 30-sep-12 C$0.95 -36.7% sold to reduce port risk
United Silver USC.to mar'13 C$0.21 28-oct-12 C$0.095 -54.8% small Ag sector trade, failed
Aurcana Corp AUN.v apr'13 C$1.07 11-nov-12 C$0.55 -48.6% closed on poor YE results
Gold Res Corp GORO apr'13 U$14.11 25-jan-13 U$9.38 33.5% short tgt made/trade closed
Marlin Gold MLN.v apr'13 C$0.075 10-feb-13 C$0.065 -13.3% closed trade
Bear Creek BCM.v may'13 C$2.58 01-apr-13 C$2.40 -7.0% near-term, time ran out
Lupaka Gold LPK.to may'13 C$1.12 23-oct-11 C$0.32 -71.4% towel thrown in
Tahoe Resources TAHO may'13 U$18.62 08-apr-13 U$14.70 21.1% took profit on ST short
OceanaGold OGC.to jun'13 C$3.03 16-sep-12 C$1.18 -61.1% sold on gold drop
IMPACT Silver IPT.v jun'13 C$1.14 13-jan-13 C$0.62 -45.6% sold on silver drop
Duran Ventures DRV.v jun'13 C$0.045 10-may-13 C$0.025 -44.4% ST trade never worked
Plata Latina PLA.v jun'13 C$0.79 10-apr-12 C$0.13 -83.5% closed
Bellhaven BHV.v jun'13 C$0.065 03-jun-13 C$0.12 84.6% closed ST trade
B2Gold BTO.to aug'13 C$3.07 28-nov-12 C$3.44 12.1% sold 1/2 to raise cash
Colossus Min. CSI.to aug'13 C$0.72 24-jul-13 C$0.79 9.7% closed thru nerves on future
Pretium Res PVG.to aug'13 C$8.20 11-jun-13 C$10.14 23.7% closed to raise cash
Bear Creek BCM.v sep'13 C$2.06 30-may-13 C$2.20 6.8% sold on pol risk decision
MAG Silver MVG oct'13 U$7.00 12-sep-13 U$5.62 19.6% near-term short
Gold Res Corp GORO oct'13 U$9.52 03-may-13 U$4.98 47.7% short tgt made, covered
AQM Copper AQM.v oct'13 C$0.31 16-oct-11 C$0.125 -59.7% closed failed trade
First Majestic AG nov'13 U$11.51 07-nov-13 U$10.50 8.8% v near term short, closed
Fortuna Silver FSM nov'13 U$4.00 07-nov-13 U$3.68 8.0% v near term short, closed
Primero PPP nov'13 U$5.70 07-nov-13 U$5.75 -0.9% v near term short, closed
Starcore Intl SAM.to nov'13 C$0.235 08-sep-13 C$0.17 -27.7% ST trade didn't work, sm loss
B2Gold BTO.to dec'13 C$2.22 28-nov-12 C$2.16 -2.7% closed ST trade to raise cash
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
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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
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
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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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