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The IKN Weekly
Week 365, May 8th 2016
Contents
This Week: In today’s issue, Regarding my own portfolio, The dollar makes a fool of me (and
a good thing too).
Fundamental Analysis: NOBS update report on Sandstorm (SAND) (SSL.to).
Stocks to Follow: Overview, Richmont Mines (RIC) (RIC.to) HudBay Minerals (HBM) (HBM.to),
Starcore Intl (SAM.to), Tinka Resources (TK.v), Sandstorm (SAND) (SSL.to), INV Metals
(INV.to), B2Gold (BTG) (BTO.to).
Copper Basket: Overview, NGEx Resources (NGQ.to), Ivanhoe Mines (IVN.to), NovaCopper
(NCQ.to), Cordoba (CDB.v).
Low Cost Producer Basket: Overview, Detour (DGC.to)
Regional Politics: Argentina: A mining minister with his head screwed on, Mexico’s silver
production, Argentina: San Juan Mining may quote on the stock market, Peru: Keiko adds
Hernando de Soto to her team, Peru: Tia Maria locals gear up for three days of protests, Chile:
Codelco in trouble with the Environment bureau, Argentina: Mine workers concerns, Three
deaths in the Grupo Mexico Buenavista mine, Cananea.
Market Watching: Dalradian (DNA.to) delivers a resource update, Minera IRL news.
I remind subscribers that no part of this newsletter can be copied, reproduced or
given to any third party without the express permission of the author.
This Week
In today’s issue
• Gold can flutter and fluctuate all it likes, this is a bullish buyer’s market for mining
names and the scenario is very different from just a few months ago. People are not
dumping on nerves, they’re buying the dips. As I’m still a buyer I want to see more
volatility, not less.
• We update on Sandstorm (SAND) after a strong set of 1q16 numbers.
• Political risk for mining companies in Peru is now on deck as part of the 2016 election
run-off. Be careful out there folks, populism is raising its ugly head in a tight race.
Regarding my own portfolio
I’ve been fielding a few mails on the general subject recently, so this week’s intro kind of
rounds them all up and addresses them all. A three-part rantette.
1) My own holdings. This first one is mainly for new and new-ish subscribers. With rare
exceptions that are flagged clearly as “side bets” when they happen and are always mentioned
here in The IKN Weekly, my portfolio of juniors is comprised of the stocks you see in the
‘Stocks to Follow’ list. Another thing that long-term subbers of the Weekly know is that I do
have a couple of other positions in senior miners, but they’re in my long-term portfolio with
other things connected to long-term net worth, such as bullion and real estate. The miners are
there because they’re dividend payers, I do not intend to trade those stocks (bowing to the
1

,
Warren Buffett maxim, “Our favorite holding period is forever”). They are not mentioned on
these pages, apart from the occasional harvest of the dividend cash (perhaps once a year, it
tends to end up in the trading port) the value of the long-term port has precisely zero effect on
the way I live my life. I do not disclose the absolute cash amounts I have in the ‘Stocks to
Follow’ list. I do tell you that the position is “tiny”, “small”, “reasonable”, “chunky”,
“overweight”, “very big” etc using general adjectives. Two reasons for that, first I do like to
keep a little privacy (I’m not James Altucher), but more importantly, it’s not for me to decide
what your idea of “big” or “small” is. Your life, your money, your decisions, I am not you and
you are not me which also means that my idea of a big trade might be something that’s
covered by the commission you pay on your idea of an average trade. My idea of a small trade
might be something bigger than your biggest trade ever. It’s not for me to impose in cash
terms, as although I understand the curiosity behind the questions it would ultimately be
disrespectful to answer with specifics.
2) Why there’s a 15 stock maximum at ‘Stocks to Follow’. As for recently received
questions about, “Why the 15 stock maximum?” on the ‘Stocks to Follow’ list, that started at the
very beginning of The IKN Weekly and it’s something I’ve learned to appreciate personally. To
cut a long story short, I hate (with a vengeance) those market commentators and stock touts
who’ll tell you to buy-this-buy-that-buy-this-buy-that but rarely if ever call sell on any position.
For one thing it’s an arrogant and assumes the reader is some bottomless pit of cash, rare are
those cases. For another, even if you only decide to follow half the recos it’s all-too easy to end
up with a port stuffed with 55 names, some of which you don’t even remember buying or why
you’re holding. If the market then takes a turn for the worse it can become a multiple bag-
holder disaster area. Meanwhile the newsletter writer who recos 80 stocks is on a no-lose,
because they can then brag about “My recommended company XYZ is up 250%!!!” (triple-
exclamation de rigueur) to the awaiting masses looking to get-rich-quick, ignore the
performance of the other 79 and reap a whole new crop of subscribers, even as those already
in the same service wonder why their portfolio isn’t up by anything like the same amount.
Which is where the 15 name maximum comes in. To start, there is a limit to the number of
companies one can follow closely (the good Lord built just 24 hours into one day, we are
mortals, etc) and in complex large companies, that can be just one. Here in junior world where
companies tend to be more simple narratives, 15 is a reasonable number. By keeping the
‘Stocks to Follow’ list to a self-imposed maximum of 15 open positions it means that if the list is
full I need to sell something if the list is full. Over the years I’ve come to greatly appreciate the
discipline this brings to the table, not just because it makes sell calls obligatory and keeps us in
the real world, but because on a personal level it gets me to question the validity of the current
holdings, along the lines of “Well I really lie this news stock XYZ that I’ve found, but I need to
sell something to make room...what’s the worst thing I currently hold?”. This limit causes
rotation, which can be a bad thing (I sell things and then they fly) but in the long run it keeps
things fresh and avoids that “Why am I still holding this dog?” feeling that comes from a
bloated portfolio with dozens (sometimes literally hundreds) of small names.
Bottom line: 15 stocks is an artificial limit, but it helps keep things real world. It frustrates the
hell out of me sometimes and there have even been a couple of rare occasions when I’ve
broken the rules and held 16, such as late last year when I couldn’t sell a thing to save my life
as they were all too crazily cheap. But those moments are rare and taken on balance, I like the
self-imposed limit a lot.
3) An improving personal portfolio balance. Final point today. For what it’s worth, on
checking the numbers yesterday Saturday I noticed that for the first time in a long long time
my own portfolio had a decently winning week when the largest position BTO was a loser.
That’s certainly a function of the small size of the loss in BTO, but it’s also definitely about the
way my port has become more diversified (inside our weird monoculture of a sector at least).
The SAM.to position, although still with space, has grown considerably. TK.v and SAND, then
the recently closed HBM short that had a final days sell-off and helped greatly, all of those
count in the mix.
2

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I’m happy about this. It was uncomfortable to have so much weighting (outside of cash) in just
one stock, it’s simple bad portfolio management to be exposed that way. That’s now changing
(it’s not fully changed, still a way to go on new purchases and there’s cash left to be deployed)
Plus in BTO I see a stock that although still necessarily a ‘Top Pick’ on these pages due to its
size, is now down at “hold” for the near-term sentiment reading. It’s played its catch-up, it’s
now valued with the field and I don’t expect it to surge forward on its own without new help
from the price of gold. That said, if gold goes up 5% (i.e. to over U$1,350/oz) from this
weekend’s position I’d expect BTO to add at least 20%, which makes the rationale for holding
the stock logical enough.
Which wraps things up (I think). But above all, I want to stress that your requirements and
circumstances will always be different from mine and what I do with my cash isn’t something to
copy parrot-like. The system of “this is what I’m doing with my money” is the least worst way
of presenting stock ideas to you, it’s open and transparent, but I’m not looking after anyone’s
money but my own and it’s never going to be a perfect fit for somebody else. That means you.
The dollar makes a fool of me (and a good thing too)
“Don’t Just Do Something, Sit There”
Sylvia Boorstein (repeated from last week)
Yes, of course I am the centre of the whole world. Yes of course my views about everything are
always the most relevant and
impeccable. And of course it took a
note from me about my newly
developed bearish view of the
dollar to get the world’s reserve
currency to bounce. It had to be
that way, no? Here’s a chart.
The dollar managed to rally last
week on (insert opinion of expert)
and step back from what’s stil
looking like a chart abyss, but I’d
venture to say that unless we get
more rallying action in the
greenback next week, it’s merely a
stay of execution. The trend since
late February is clear enough and
as the hawks give up on their
entrenched “three hikes this year”
position (Friday’s BLS jobs report
shook a few more out, including
Goldman Sachs I believe) there’s
no reason to suppose a
change...right up to the moment
one happens, of course.
Bottom line: I remain a dollar bear. That makes me a gold bull. Own mining companies. Buy.
Hold. Win.
Fundamental Analysis of Mining Stocks
This week we update again Sandstorm Gold (SAND) (SSL.to).
3

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NOBS report dated May 8th, 2016
Sandstorm Gold Ltd. (SAND) (SSL.to)
Company Overview
Sandstorm Gold Ltd. (Canada: SSL.to, USA: SAND, Frankfurt AYS1.f) is a precious metals
streaming and royalty company, with exposure to operations in the The Americas and Africa. It
has several streams and royalties that provide current income plus a pipeline of potential
revenue generating streams and royalties. Current share structure is as follows:
Shares out: 138.286m
Options & Restr.Shares: 6.856m
Warrants: 29.235m
Fully diluted shares: 174.38m
Current share price: U$4.17
Market Cap: U$576.65m
Approx working cap per S/O: $0.04
All prices are in US Dollars unless stated. Forex U$0.80=CAD$1
Today's SAND update
We first looked at SAND in IKN355 dated February 28th 2016 in a NOBS report that covered a
lot of the operational and assets background of the company. We then looked at the stock in
IKN362 dated April 17th when I finally called it a buy with a price target of U$5.50. Check out
those reports for background and information that won’t be repeated today, this update won’t be
repeating old information, it’s about presenting the changes and new things. Today’s update
comes on the heels of the last one, just three weeks on, but there’s decent reason to look at
SAND mainly because of a positive set of 1q16 financials posted last week by the company.
That’s what today’s update is all about, re-jigging the model in light of fresh evidence, re-
considering price targets and upside, trying to quantify the unquantifiable. It’s what we self-
important anal yst parasites do to get you to pay us, dontcha know.
Dealflow update
Since IKN362 there have been two new deals closed by SAND. In fact the first one with Erdene
had already been announced and I was a little remiss in not mentioning it in IKN362, but today
we make amends. The second one with Mariana is interesting. Put together they provide a
window on current strategy at SAND.
The Erdene Resource (ERD.to) deal: Announced April 11th (oops) and closed April 21st this is a
$2.5m deal with two separate components:
1) SAND buys 5m shares of ERD at 20c apiece in a private placement, with a lock-up of
18 months minimum on the shares. The CAD$1m treasury boost allows ERD to go
ahead and begin drilling on its Bayan Khundi gold project in Southwest Mongolia. As a
matter of fact, ERD shares closed Friday at 33c, so this end of the deal is already
looking good for SAND. It will almost certain carry these shares at mark-to-market
which means another $650,000 added to the balance sheet as at this weekend.
2) SAND exchanges 321,888 shares for a 2.0% Net Smelter Royalty (NSR) on its two
Mongolia gold projects, Bayan Khundi and Altan Nar. As part of the smallprint on the
deal ERD can buy back 1.0% of the NSR for CAD$1.2m (three year time limit). Those
4

,
shares were priced at CAD$4.66 for the purposes of the deal, so SSL.to at CAD$5.41
this weekend means Erdene is probably very happy about its 16.1% win to date as well.
The Mariana Resources (MARL.L) deal: The latest SAND deal closed last week when SAND
bought 89.3m shares of Mariana Resources (MARL.L) as part of the 330m share private
placement that company ran at 1.82p (UK money) apiece. For its part of the deal SAND paid
around U$2.34m (at current forex), less than my original intel expected on the deal as noted last
weekend in IKN364.
MARL confirmed SAND’s participation on Wednesday May 4th when it announced (1) the
placement had closed correctly and that SAND was now a 7.56% shareholder of the company.
This weekend MARL shares are at 2.42p, which means. SAND has made a 33% paper profit
(approx U$0.77m) on this trade too...to date anyway. There’s no lock-up period on these shares
but we’d expect SAND to be holders rather than near-term sellers. This means that SAND now
has two separate participations in the Hot Maden project in Turkey, via these new shares in the
30% minor of the JV and via the in my view more valuable) 2% NSR on Hot Maden.
Put together, these two deals struck by SAND during the current 2q16 are indicative of the
company’s enthusiasm for the current market. They’re speculative in nature of course, the
projects in question may never become mines and even in a best case, cash flow from those
NSRs is a long way in the future. They’re also a reflection of a company willing to back the
geological know-how and brains trust now on board the company (Tom Bruington and Keith
Laskowski, both known to be very keen on at least Hot Maden). To mitigate to risk SAND is
playing the equities angle once again, a strategy that paid well (on a minor $1.6m profit level)
with its foray into Aurico Metals in 2015/2016.
The other thing about these deals is that they’re smaller-scale and financially prudent. These
aren’t the big investments made in the True Gold (now Endeavour Mining) Karma and the
Yamana Chapada streams. These are not the size of the NSR/royalty package bought from
Teck last year. SAND doesn’t have much treasury cash at the moment (we’ll get to that below)
but theoretically at least, it could use the U$45m or so it has on stand-by in its revolving loan
facility, but rather than using more debt it’s doing the opposite and paying down its debt levels.
Put together, the ERD and MARL deals don’t reach U$5m (the end 1q16 working capital at
SAND) and they’re firmly in line with SAND’s stated 2016 objective of improving its balance
sheet. However and to finish the deal spiel, as the added bonus they’ve been nicely timed. Put
together and assuming they’re priced mark-to-market this weekend SAND has added U$6.26m
in asset value in exchange for the shares emitted to ERD and U$3.34m in cash. That’s instant
accretion of book value and we like that kind of thing at The IKN Weekly.
Financials update
In the 1q16 results NR out last week (2) we got the numbers as at March 31st but we also got
bits and pieces of extra information,
such as when CEO Nolan Watson
U$m SAND: Long-term bank debt position
stated, “We continue to use our free
90 83.5
cash flow to pay down debt and have 77
80
recently reduced the balance on the
70 64.5
credit facility to $64.5 million since the 60 60 55
end of the first quarter”. That really 50
caught my eye and this chart right 40
shows why. As at end 2015, SAND had 30
drawn U$83.5m of its U$110m 20
revolving loan facility (matures mid- 10
0
2019, no pressure on repayments) and 0
as at end 1q16 it had paid that down by 3q15 4q15 1q16 2q16est 3q16est 4q16est
U$6.5m to $77.0m. So to see Watson
source: SAND filings, IKN ests for rest of 2016
declare that in the six weeks from then
to now it had paid down another U$12.5m made for impressive reading. SAND is messing
about on its pledge to improve its balance sheet, it’s going about the job rapidly and due to that,
I’ve adjusted my forecasts for balance sheet liabilities as follows:
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,
SAND: Liabilities Breakdown per qtr
120
110
100
90
80
70
60
50
40
30
20
10
0
6
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 tse61q2 tse61q3 tse61q4
source: company filings
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LT debt
current debt
Stated loud and clear, financial debt dropping from U$83.5m to U$64.5m in the space of just 18
weeks is excellent. It’s faster than I’d modelled, it’s impressive both as a statement of intent and
in the cash-generating abilities of SAND today. I don’t know whether SAND will pay down more
before the end of Q2 and for conservative purposes I’m modelling that they won’t. I’m also going
to the conservative side and making further payments in Q3 and Q4 more modest, but even my
babysteps approach gets SAND to $55m come the end of the year and means they have a
potential U$55m to invest in any new opportunity (balance of the revolver). Also be clear that
my model is conservative end, SAND may end up paying back a lot more on its facility come the
end of 2016 and have a much stronger looking balance sheet. I’m trying to curb my enthusiasm
here (and failing a little because SAND is beginning to look great).
As for assets, there are a couple of interesting developments to note (well, interesting for a
wonk like me, all you may want to know is “SAND financials strong” and move on). First it’s
managed to add a cool U$33.76m in
fixed asset value and most of that has SAND: Assets
come via the re-valuation of its
600
investments line item. 550
500
450
Priced mark-to-market (M2M), the
400
shares in third party companies held by 350
SAND rose in value by U$12.659m 300
250
thanks to new net additions (U$4.066m)
200
and fair value adjustments of shares 150
already held (U$8.593m). 100
50
0
Also adjusted for fair value is the
convertible debt held by SAND, almost
exclusively in Luna Gold. That was
adjusted upwards by an impressive
U$13.509m in 1q16 and the total fair value of convertibles is now U$25.099m. That’s an
interesting development for sure, as up to now I’ve discarded the seemingly failed SAND
investment in Luna Gold at Aurizona to zero. However (and unlike the unmitigated disaster that
it Colossus at Serra Pelada) LGC shares have been showing signs of life recently and the
company is making the right noises about turning the project around and getting it going again.
Whether they eventually can or not is a different question, but the new valuation given by SAND
to its distressed holding is valid enough.
Over on the current assets side, back in IKN362 I modelled on a best-guess basis that SAND
would add cash to treasury. Here’s exactly what I wrote:
I’m modelling some slight additions to cash and working cap in 2016, but
really I’m just guessing because the 4q15 working cap looked mightily thin
and I’d expect they’d like a bit more of a cushion.
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 tse61q2 tse61q3 tse61q4
fixed
$m other current
cash
source: SAND filings

,
Interestingly, that assumption of mine is plain wrong and what’s more, I fully approve of being
shown as stupid. Here are a couple of charts, cash treasury and working cap:
SAND: Cash treasury per qtr
120
110
100
90
80
70
60
50 40
30
20
10
0
As at 1q16, cash treasury stood at U$5.316m (U$30k less than end 4q15) and working capital
was at a very thin looking U$288k. When added to the new data we have on SAND’s quick
repayment of bank debt, we can see the company is reasonably happy to keep cash to a ow
while it doesn’t just pay down debt, but pays it down aggressively. This is my idea of good
housekeeping, there’s no reason to collect even an extra million in the till if you can pay down
your debts and save on servicing charges. Along with the smallish new deals (ERD and MARL),
this is a clear indication of the new strategy at SAND, to create a financially solid
streamer/royaltyco that has the same type of “investment grade” aspect that drives up its
valuation multiples and reduces its cost of capital for future deals. A snowball effect we’ve seen
used most successfully by Franco Nevada (FNV), SAND is now on track to be a smaller version
of the market leader (rather than the company that took risks and got burned).
Q1 operating results
Enough boring balance sheet, here come some boring ops numbers starting with revenues.
SAND had pre-announced 11k oz
AuEq sales for the quarter so the total
of 11,381 AuEq came in with a small
bonus prize and total sales came to
U$13.384m. This chart (right) shows
how those sales break down into gold
sales and “other” (royalties etc). Sales
were slightly better than expected for
that 381oz adjustment. This was a
strong quarter and the first one to get
SAND back on track after its loss of
the revenues stream from the Luna
Gold shut-down. We need to consider
that things are going to improve
thanks to the Karma gold stream now
coming online too.
We move to the other side of the coin and
costs. As usual, the thing we care about at
SAND isn’t the final net profit result, but its
cash generation ability (see the previous
notes on SAND for details on that). This
table pits revenues against the combo of
the main cash burners, production costs
and admin costs, and gives us a close
approximation of the amount of cash
generated by the company. In 1q16 the
“difference” climbed neatly to U$8.935m,
7
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 tse61q2 tse61q3 tse61q4
source: company filings/IKN ests
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120 SAND: Working Capital per qtr
110
100
90
80
70
60
50 40
30
20
10
0
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 tse61q2 tse61q3 tse61q4
source company filings/IKN ests
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SAND: Sales breakdown per quarter
20
18
16
14
3.988 3.719 4.069
12
10 3.429 3.025 3.031 4.880
8 3.259
6 11.571 11.566 11.360
4 9.724 9.463 9.055 8.504
6.604
2
0
41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1
U$m
Other Sales
Gold Sales
source: company filings
SAND: Cash generation capacity
18
16
14
12
10
8
6
4
2
0
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 tse61q2 tse61q3 tse61q4
$m total revenues
prod costs + admin costs
difference
source: company data, IKN calcs

,
which beat out my forecast by nearly a million.
Costs came in much lower than I expected, so after snuffling round the numbers for a while it
turns out that SAND has changed the way in which it books its administrative expenses which
shaves perhaps $600k from its quarterly corporate expenses line item. It’s not really accounting
trickery, I don’t have a problem with this, but it showed up after a while hunting in the financials
and made more sense of the sharp drop in administration costs. A sidebar thing, all told.
We can consider the same “generated cash is what counts” subject by checking out the
statement of Cash Flows in the same way as in IKN362. Here’s the chart that gets generated
from that crunch, that takes SAND declared net income (which get thrown around by
impairments and new non-cash credits) and subtracts the items not affecting cash. The green
columns are what really matters, that’s the amount of cash that came into the company.
$m SAND: Net income vs "generated cash"
35
net income
items not affecting cash
25 difference (i.e. cash generated)
15
5
-5
-15 source: SAND filings
-25
1q14 2q14 3q14 4q14 1q15 2q15 3q15 4q15 1q16
Here’s the same set of green columns you see above presented by themselves, which shows
the 1q16 “generated cash” at U$9.69m (close enough to the P+L method above to make sense)
and this one, for me at least, is the most important chart of the day. SAND is back earning cash-
money-moolah profit at the rate it was doing in 2014 when Luna Gold was still giving it stream
and before gold and silver and all the others lapsed into the worst moment of their slump.
SAND: "generated cash"
$m
12
1 1 0 1 9.38 9.96 9.48 9.69
8.85
9 8.12 8.23 8.23
8 7.03
7
6
5
4
3
2
1
0
1q14 2q14 3q14 4q14 1q15 2q15 3q15 4q15 1q16
source: SAND filings
We can back that statement up in a number of
SAND: gross profit per share
ways, it shows all through the datasets. Here’s
0.08
just one, the comparative of gross profit per
0.07
share (and the share count has diluted by
0.06
around 17% since the 2014 period). Late 2014
0.05
and 2015 are now memories, SAND is out the 0.04
other side and making meaningful profit. 0.03
0.02
Additions to the share count have partially 0.01
funded the latest deals and allowed SAND to 0.00
pay treasury cash for shares in ERD and MARL. -0.01
-0.02
8
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 tse61q2 tse61q3 tse61q4
$
source: company financials/IKN ests

,
SAND: Shares Out
160
140
120
100
80
60
40
20
0
9
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 tse61q2
source: company filings/IKN ests
serahs
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And here’s the rub, the stock price chart with a red note that says what I want to say.
There are two caveats to the statement in that chart:
1) The 17% approx dilution to the SAND share structure between 2014 and today means
that we need to adjust for “value”. Put crudely, today’s U$4.17 share price would
correlate to U$4.90 at previous dilution levels to get the same market cap.
2) Financial liabilities at SAND are now different to those in 2014 and paying it down or
not, it still has U$64.5m of bank debt.
The thing with point 2) is that it’s one of the big reasons to own this stock today. That comes in
the conclusion section.
Upwardly adjusting revenues forecasts at SAND
I’m trying not to cover every single nook and cranny in this update so previously covered work is
getting taken as read, but one final thing that needs light shone upon it is our revenues
forecasts for SAND. The combination of better AuEq “production” (streams, royalties etc) and
higher price decks for gold and its friends shows through clearly in the 1q16 results and as
those came in with gold eq at an average of U$1,176/oz for SAND, the upside in revenues is
now clear. Therefore I’ve fiddled with the model, moving up average gold prices to U$1,250/oz
in 2016, U$1,300/oz in 2017 and U$1,350/oz beyond (plus equivalent modest moves for silver
and copper such as U$17/oz silver for the rest of 2016), I’ve also slightly increased the gold
equivalent ounces forecasts used (41,171oz in 2016, 42,891 oz in 2017 etc) but I’ve deliberately
left those on the conservative side, considering SAND is still guiding for between 40k and 50k
oz AuEq in 2016.

,
But even by veering to the very conservative here’s how the new revenues forecast comes out:
U$m SAND: Adjusting Conservative revenues forecasts
80
IKN362 price deck 67
70 IKN365 price deck
60 54 56
51
50
40
30
20
10
0
2016 2017 2018 2019
source: SAND data, IKN calcs
I’m now modelling SAND to return revenues of U$51m in 2016, up by nearly U$9m on the
numbers posited in IKN362 just three weeks ago. A lot of that is from a better set of royalty
returns than previously anticipated, most of the rest comes from the metals price hikes. But
whatever the reason, I now see that I was being way too low in my forecasts and that SAND is
turning itself into a real cash generating machine this year. That’s an extra 6.5c/share in
revenues and with costs expected to be flat, that’s all free cash flow for SAND’s best use.
Conclusion and recommendation
I finally pulled the trigger and bought some SAND after the IKN362 anal ysis. Since then it’s
bounced around U$4 in a tight-ish trading range but the positive reaction to the 1q16 financials
last week should be considered a wake-up call.
The thing I most like about SAND is that most people are still considering it in 2015 terms,
rather than the 2014 terms which are a much better fit. The strategy that CEO Watson is rolling
out, to make SAND a financially rock solid enterprise and emulate the stream market leaders,
has yet to get full recognition from the
SAND: Book value per share
market. The penny has yet to drop 4.00
about just why they’re so keen on 3.90
paying down that debt, because once 3.80
they do SAND is going to be a very 3.70
different entity. By adding new deals 3.60
3.50
(and getting some relief from the Luna
3.40
Gold debacle) it’s boosted its asset
3.30
book considerably, but it’s done so at
3.20
the expense of added debt and added
3.10
share count. 3.00
Here right is the second most important
chart in today’s anal ysis, it shows how
Book Value (total assets minus total
liabilities fell sharply as SAND reorganized last year. But it’s now bouncing back and even (and I
need to stress this) under my conservative end sub-42k AuEq production result for 2016, it’s
going to add cash quickly (be that cash used to pay off debt or added to treasury) and I expect
BV/share to get back to U$3.46 by the end of 2016.
What we see here is an under-rated turnaround story. When the penny finally drops about what
SAND is doing it’s going back into that U$5 to U$7 trading range with a vengeance, which I
think we can adjust for dilution down to a U$6 target (and that’s my new adjusted target 12
month target price, by the way.
This U$6.00 could be reached on an upspike (which may well tempt me into selling if gold isn’t a
lot higher by then) or it could come gradually, but as it represents a 1.73X price/book ratio it fits
into the place where SAND traded back when things were relatively good, in early 2014.
10
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 WON tse61q3 tse61q4
source: SAND filings, IKN calcs

,
SAND: Price / Book Value Ratio
2.20
2.00
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
11
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 WON
P/BV
source: SAND filings, IKN ests
What I most like about SAND today is that it’s still misunderstood by the market. Yes there’s a
chunky debt level there, but that’s exactly why the company is addressing it quickly and paying
it down as fast as possible because once it’s gone (or under full control) people will start looking
again at the amount of new assets added to the pile (and decent ones too, I like the new Hot
Maden bets not to mention the snapping up of the diamond royalty from IAMGOLD at distressed
levels that’s just got a big reserve boost).
My interest in SAND started in IKN355 when I saw it as a turnaround story and “newly serious”.
Then the purchase came and now the 1q16 results have underscored and franked my opinions.
SAND is turning itself into a serious streaming company and the time to get on board is before
the rest of the world realizes this. Target price upped to U$6.00, representing a 43.9% upside to
this weekend’s close and if that’s not a good enough potential return from a rock solid mining
company with guaranteed cash flow in its near and medium-term future, there’s no hope for any
of us. Obvious strong buy.
End of Report
Stocks to Follow
Of the ten current open positions, just three registered minor losses last week (B2Gold down
2c, Sandstorm down 10c, Lara down 3c) and three others stayed unchanged (FCV.v, NEV.v,
REG.v), which means there were four week-over-week winners (SAM.to, TK.v, RIC, INV.to)
including decently sized percentage gains in Tinka (TK.v up 16.7%) and newly promoted Top

,
Pick Starcore (SAM.to up 10.0%). For a week in which gold dropped (proxy GLD down 0.4%)
and the gold miners dropped (proxy GDX 2.7%) that’s a positive near-term performance for the
‘Stocks to Follow’ portfolio. But hey it’s only a week, let’s not get too back-slappy.
With the addition of Richmont Mines (RIC) and the covering of the ill-fated short in HudBay
(HBM), the overall count hasn’t changes and we still have ten open positions on the list, five
less less than our self-imposed maximum of fifteen at any given time. Seven are in the green
three are in the red.
company Ticker this week Avg Price Reco date Current PPS Gain/Loss% Notes
TOP PICKS
B2Gold BTO.to hold C$2.11 12-sep-14 C$2.77 31.3% New tgt C$2.88, holding
Starcore Intl SAM.to STR buy C$0.53 10-jan-15 C$0.66 24.5% Top Pick 2016, Added 81c tgt
Long positions (in current order of preference)
Sandstorm Gold INV.to STR buy U$3.90 17-apr-16 U$4.17 6.9% StreamCo, good Q1, new $6 tgt
Tinka Res TK.v STR buy C$0.195 19-apr-16 C$0.245 25.6% Top value Zn/Sn/Ag stock
Richmont RIC buy U$7.60 01-may-16 U$7.81 2.8% M&A target, near-term trade
INV Metals INV.to spec buy C$0.25 03-apr-16 C$0.70 180.0% Near-term trade for 2q16
Lara Expl. LRA.v spec buy C$1.15 08-apr-12 C$0.42 -63.5% solid biz model, waking up
Focus Ventures FCV.v hold C$0.23 01-jul-12 C$0.085 -63.0% Now re-grouping
Nevada Sunrise NEV.v spec buy C$0.185 28-feb-16 C$0.285 54.1% V small Li spec play
Regulus Res REG.v hold C$0.30 06-apr-15 C$0.48 60.0% 2016 looking better
Short positions
none at present
Closed in 2016 closed close price
Phoscan Chem FOS.to jan16 C$0.28 29-mar-15 C$0.265 -5.4% Buyout trade, bot but poor deal
True Gold TGM.v jan16 C$0.18 23-aug-15 C$0.25 38.9% okay trade, sold on pol risk
McEwen Mining MUX jan16 U$1.09 25-jan-15 U$1.20 10.1% sold due to lack of value
Lake Shore Gold LSG.to feb-16 C$1.10 07-apr-15 C$1.69 53.6% bot out, sold early in process
Atacama Pacific ATM.v feb-16 C$0.19 26-apr-15 C$0.40 110.5% sold for a double on big pop
New Gold NGD feb-16 U$2.06 24-jan-16 U$2.96 43.7% closed good near-term trade
Sandspring Res SSP.v mar-16 C$0.195 18-oct-15 C$0.32 64.1% Hit tgt, took profit
Teranga Gold TGZ.to mar-16 C$0.54 15-feb-15 C$0.60 11.1% disappointing trade
B2Gold BTG mar-16 U$0.85 13-jan-16 U$1.30 52.9% Separate trade on B2, hit tgt
Dalradian Res DNA.to mar-16 C$0.67 27-oct-13 C$1.00 49.3% Hit target, sold, good win
HudBay Min. HBM may-16 U$4.10 03-apr-16 U$4.36 -6.3% Short trade, poor timing
2009, 2010, 2011, 2012, 2013, 2014 and 2015 closed positions in appendices below
Now for some notes on current basket stocks.
Richmont Mines (RIC) (RIC.to): Trade opened. As planned and noted in IKN364 I opened
my “better late than never” position in RIC (using the US ticker), but didn’t manage to get any
of the deeply discounted Wednesday prices (it went under U$7 for a while that day). No matter,
I’m in and now ready for the fun. We note that the May 12th board meeting where they’ll also
sign off on the quarterly numbers comes this week.
In newsflow, on May 5th RIC offered us an exploration update (3) which confirmed a lot of the
positive current market assumptions regarding the main Island Gold asset. The ongoing
underground drilling program is hitting exactly what RIC wanted to see, the continuation of the
high grade deep mineralization that it’s now mining. This in turn should means that RIC can
keep up on its new. Higher production rates at the new higher grade averages. In a nutshell
the drill machine is stating that the 1q16 blowout quarter that delivered around 10k oz more
than anal ysts expected wasn’t an anomaly, but the start of the new normal at RIC.
12

,
HudBay Minerals (HBM): Short covered. It could have been a lot worse and as things
turned out I could have even finished with a small profit from this short trade that I called to
cover last weekend thanks to (the expected, ahem) reversal in the price of copper (see ‘The
Copper Basket’ below for more on that). After taking a mail Sunday evening urging me to wait
on the covering, I held off until Tuesday and I was very glad I did too (reader S, I owe you a
beer or some baked goods or something). It would have been even better to have waited until
Wednesday or Thursday but I’m not complaining, as I’d already resigned myself to a hefty loss
and it turned out to be a mild one.
As for HBM, yes I still think it’s a weak company but first and foremost I must attend to my own
portfolio. The desire to be longer the market is succored by this covering and as I noted last
week, we’re in a market where the macro trumps any micro issue. Stock picking can wait until
the distribution phase begins.
Starcore Intl (SAM.to): Added. As planned I added a few more the cost average is now up
to 53c, this position is getting chunky. If we get another downspike in gold and a chance to
buy at a cheaper level then all good, if not I’ll swallow hard and pay up...in small tranches.
We’re now into the second week of May and it’s possible we get the SAM Q3 production
numbers before IKN366 swings around, but I think week three will be more likely. All the same.
Watch the wires and if we get 4,500oz AuEq it’ll be acceptable, with anything above 5k oz AuEq
worthy of the company getting a share price pop.
Tinka Resources (TK.v): Added. I After last week’s bullish sounds from these pages on TK
and announcement that I was planning to add, I got a couple of mails asking whether I’d pay
up over my previously noted
Tinka (TK.v): 14 straight days of 100k+ traded volume
20c maximum (when the
trade began), which I 2.2 2.152
2
honestly I’d answered in last
1.8
week’s piece, but perhaps 1.6
there was an information gap 1.4
1.2
there in hindsight. The answer
1
0.788 is year and I did just that, 0.8 0.679
adding enough at 22.5c to get 0.6 0.464 0.413 0.475 0.348
my personal cost average to 0 0 . . 2 4 0.2 0.231 0.102 0.237 0.216 0.128 0.219
19.5c (give or take a tenth). 0
Even if we ignore the big first
day on April 19th and just
keep with the following 13
days, the average daily
volume is now 346k and that makes it as near to a tradable stock as dammit. For small money,
anyway. As for trading, TK last week began threatening what looks (to me at least) like an
important price resistance at 25c. If it breaks above, expect 30c in short time. It’ll be worth
every penny, too. Also good to see how TK managed to ignore the approx 3c/lb drop in spot
price for zinc.
Sandstorm Gold (SAND) (SSL.to): Added. And even managed to reduce the cost average
by two pips, thanks to the selling in SAND last week. The rest is above.
INV Metals (INV.to): No doubt about the most interesting day for INV last week. On
Wednesday it suffered like most of the sector from the accelerated sell-off, but come Thursday
morning buyers were ready to buy all they could at 60c or below.
13
61/4/91 61/4/02 61/4/12 61/4.22 61/4/52 61/4/62 61/4/72 61/4/82 61/4/92 61/5/2 61/5/3 61/5/4 61/5/5 61/5/6
source: TSXV, IKN calcs
serahs
fo
snoillim

,
A fine example of current perception and how things have changed mightily in just a few short
weeks. We await the updated pre-feas and the promotion we’re likely to ge ton the back of it.
B2Gold (BTO.to) (BTG): BTO went with the
flow last week and although slightly
underperforming the GDX benchmark (as seen
here), there are a whole lot of mining stocks
with the same shape and pattern as that one
over the last ten days.
According to a post-close Friday filing on
SEDAR, big holder and GDX/GDXJ owners Van
Eck has added 6.55m shares to its BTO
position, which now stands at 118,271,852
shares or approximately 12.76% of shares out.
The Copper Basket
After eighteen weeks of 2016, The Copper Basket shows a 65.68% 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 1244.37 5.29 -0.4%
2 Ivanhoe Mines IVN.to 0.61 778.96 794.54 1.02 67.2%
3 Reservoir Min. RMC.v 4.08 48.69 413.87 8.50 108.3%
4 Capstone Min. CS.to 0.44 382.04 294.17 0.77 75.0%
5 NGEx Resources NGQ.to 0.65 205.06 172.25 0.84 29.2%
6 NovaCopper NCQ.to 0.395 104.33 102.24 0.98 148.1%
7 Western Copper WRN.to 0.38 94.19 70.64 0.75 97.4%
8 Nevada Copper NCU.to 0.66 80.5 70.04 0.87 31.8%
9 Cordoba Min. CDB.v 0.16 86.86 65.15 0.75 368.8%
10 Copper Mtn CUM.to 0.445 118.8 60.59 0.51 14.6%
11 Copper Fox CUU.v 0.125 417.64 56.38 0.135 8.0%
12 Atico Mining ATY.v 0.28 97.59 41.96 0.43 53.6%
13 Hot Chili Ltd HCH.ax 0.09 445.723 37.00 0.083 -7.8%
14 Amerigo Res ARG.to 0.205 173.61 26.04 0.15 -26.8%
15 Revelo Res. RVL.v 0.055 99.19 6.45 0.065 18.2%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg 65.68%
Down 4.2% on the week, there were nine losers in our Copper Basket components (HBM.to,
14

,
IVN.to, RMC.v, CS.to, NGQ.to, CUM.to, HCH.ax, ARG.to, CDB.v), two unchanged stocks
(WRN.to, RVL.v) and four winners (CUU.v,
NCU.to, NCQ.to, ATY.v). Best of the wins
The Copper Basket 2016, weekly evolution
came from NovaCopper (NCQ.to up a very big 100%
42.0%), worst of the losses were checked by 80%
HudBay (HBM.to down 15.5%), Copper
60%
Mountain (CUM.to down 15.0%) and Cordoba
40%
(CDB.v down 13.8%). It was notable that the
top six stocks on our list in market cap 20%
valuation all lost ground. 0%
-20%
As for copper, once again the good Doctor
tried and failed at U$2.30/lb, which makes
four times since March. Your author the
copper price bear isn’t surprised of
course, neither are the people who
attended the Expomin conference in
Chile and heard Cochilco call the 2016
average price at U$2.15/lb (as
mentioned in IKN364 last weekend). This
time blame for copper’s weakness was
put on the standard ChinaFears (April
data expected to come in weaker than
March) and the stronger dollar, thanks to
that pop. Natch. There’s not much to
add to this section that hasn’t already
been said, we remain in an asthenic
market for copper with speculative hopes
and wishes trying to push the price up,
real world data and end-user apathy
stopping it from going too far. Until one
or the other of those change,
We move to the weekly copper
warehouse inventory bullet points:
• Total world copper stocks in the three official warehouse systems rose by 9,755 metric
tonnes (mt) (+1.9%) to 530,923mt, a surprising result.
• The big surprise came from Shanghai, where SHFE stocks rose by 1,294mt (+0.4%) to
finish the week at 313,168mt when by all rights the stocks should have dropped. That’s
two blips in three weeks for the normal yearly de-stocking period and that’s not good
for the narrative of the copper bulls.
• LME stocks also rose, this time by a chunkier 9,525mt (+6.4%) to finish at 159,025mt.
That’s the first biggish rise since LME stocks bottomed after all that Shanghai arb
action.
• Comex stocks dropped again last week, down 1,044mt (-1.7%) to finish the week at
58,730mt.
Here’s the Shanghai-only chart, which shows the growing suspicions that the normal de-
stocking cycle in China isn’t going according to plan.
15
dr3naj ht01 ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht6 ht31 ht02 ht72 dr3rpa ht01 ht71 ht42 ts1yam ht8
source: IKN calcs

,
Shanghai Futures Exchange Warehouse Stocks, 2014-2016
400000
350000
300000
250000
200000
150000
100000
50000
16
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 ht71 ht8
Mt Cu
source: Cochilco
Here’s a closer look at the same data, but only for 2016. Presented by request and without
further comment, personally I think the use of following inventory data is only for the long-
term.
Shanghai Futures Exchange Warehouse Stocks, 2016
400000
350000
300000
250000
200000
150000
100000
50000
6102
dr3naj
ht01 ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht6ram ht31 ht02 ht72 dr3rpA ht01 ht71 ht42 ts1yaM ht8
Mt Cu
source: Cochilco
Now for brief comments on a couple of our basket stocks:
NGEx Resources (NGQ.to): NGQ reported its 1q16 numbers after the close on Friday (4), but
despite the late hour of the filing, at first pass there seems to be no untoward or negative news
contained.
As noted in the last couple of editions, I’m very interested in this stock and think it may be the
way to play Argentina in 2016, but haven’t really had the time to run these numbers as closely
as I’d like. Expect more next weekend
Ivanhoe (IVN.to): A notable filing for INV late Friday, in which Fidelity disclosed for the first
time its new large position in the stock. Fido announced via SEDAR that it holds 84,810,352
shares of INV, representing 10.89% of shares out.
NovaCopper (NCQ.to): So much for my finger-wagging warnings about the false moves in
NCQ last week, the stock managed to zoom on some reason or another (somebody pump it
perhaps?) and it managed to break the $1 level before finally settling this weekend at 98% and
“only” 42% up on the week. With 182k traded Tuesday and over 200k Wednesday, the price
surge came on the back of buying pressure too.
I still can’t touch this stock, the timeline to eventual production is way too long and without the
road to the Ambler district being approved and built it’s not going to happen.
Cordoba Minerals (CDB.v): Nobody long this stock for more than a few weeks could
begrudge the sell-off in CDB, the profits are massive even with the big drop of last week

,
The Low Cost Producer Basket
After 18 weeks of 2016, the Producer Basket shows a gain of 105.00% 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 21.51 18.47 150.3%
2 Newmont NEM 17.98 529.12 18.05 34.12 89.8%
3 Goldcorp GG 11.56 830.22 15.93 19.19 66.0%
4 Franco Nevada FNV 45.75 176.298 12.38 70.24 53.5%
5 Agnico Eagle AEM 26.28 217.67 10.02 46.04 75.2%
6 Ang/Ashanti AU 7.10 405.27 6.63 16.37 130.6%
7 Detour Gold DGC.to 14.41 170.85 5.02 29.37 103.8%
8 Sibanye Gold SBGL 6.09 228.71 3.46 15.12 148.3%
9 Buenaventura BVN 4.28 254.19 2.55 10.03 134.3%
10 New Gold NGD 2.32 509.89 2.35 4.60 98.3%
Prices in U$/NYSE tickers, except DGC.to (CAD$) Portfolio avg 105.00%
“I'm very glad you asked me that, Mrs Rawlinson. The term `holistic' refers to my conviction that what we are concerned
with here is the fundamental interconnectedness of all things. I do not concern myself with such petty things as
fingerprint powder, telltale pieces of pocket fluff and inane footprints. I see the solution to each problem as being
detectable in the pattern and web of the whole. The connections between causes and effects are often much more
subtle and complex than we with our rough and ready understanding of the physical world might naturally suppose, Mrs
Rawlinson.
"Let me give you an example. If you go to an acupuncturist with toothache he sticks a needle instead into your thigh. Do
you know why he does that, Mrs Rawlinson?
No, neither do I, Mrs Rawlinson, but we intend to find out. A pleasure talking to you, Mrs Rawlinson. Goodbye.”
Douglas Adams, Dirk Gently's Holistic Detective Agency
Two stocks up (FNV, DGC.to) and the
other eight down (not listing them all), the
The Low Cost Producer Basket: Weekly performance
producer basket adjusted down with the
130% and comparative to GDX control
rest of the world and it would have been a
110%
lot worse if it hadn’t been for the Friday
90% rally on the back of the gold pop, all
thanks to the weak-ish BLS jobs report. 70%
Wheels within wheels and the 50%
fundamental interconnectness of it all. 30%
10%
In other news, we note that thanks mainly -10%
to having Detour Gold as a flat 10% of the
basket weighting, the gap between our
basket and the GDX benchmark is at a
new record of 21.84%. And yes I’m very
happy about that, having picked the stocks
this year expressly to try and beat the
mining street.
Detour Gold (DGC.to): The undoubted
star of last week, DGC got its boost from
fundies reasons too. The reason was the
company AGM last week for which,
unusually, the company actively
encouraged the analyst community to tune
in because they’d reveal the latest on the
“Lower Detour” zone.
17
dr3naj ht01 ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht6 ht31 ht02 ht72 dr3rpa ht01 ht71 ht42 ts1yam ht8
basket
gdx control
source: Google Finance, IKN calcs
Low Cost Basket: Percentage difference between
basket and GDX control, 2016
5%
0%
-5%
-10%
-15%
-20%
-25%
ht01 ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht6 ht31 ht02 ht72 dr3rpa ht01 ht71 ht42 ts1yam ht8
source: ikn calcs, NYSE/Nasdaq data

,
I’d suggest you check out anal yst notes from any of the main brokerages for more, but the
skinny on “Lower Detour”, some 6km from the main mineralization currently being mined, is
that they have outlined a smaller but much higher grading gold deposit that could make a
meaningful contribution to higher head grades in the future of DGC. A decent enough best
guess of size is perhaps 500k oz gold at 7.5 g/t, much higher than the DGC reserve average of
1.03 g/t for its open pit operation. Lower Detour is potentially open to expansion too, but even
if not the ciggypack calcs indicate that DGC could add 15% to 20% to average head grade by
blending this high grade with the normal rock. The market loved the news and DGC was the big
winner among the bigger names, up in a down week.
Regional politics
Argentina: A mining minister with his head screwed on
Argentina’s new Mining Secretary (i.e. the Vice Minister in charge of hard rock mining sector
and working under the Minister of Energy and Mining) Daniel Meilán spoke at Chile’s Expomin
two weeks ago and last week he delivered the same general message to the Argentine press.
This interview (5) in San Juan’s (arguably Argentina’s most miner-friendly province) Diario de
Cuyo hit all the points and on reading it, one can’t help but be thankful that there’s someone in
charge of mining at a national governmental level that really understands the sector and what it
will need for growth.
The main point he makes, right at the start, is that (translated), “We need to realize the the
only way to conduct mining policy is via federal politics, where the owenrs of the resources are
the provinces. Therefore, the first thing we need to assume is that the provinces are the owners
of the mining resources. From there everything changes, as for mining the only way to work is
with Nation and Provinces together. The National political policy has to help all factors move in
the same direction”.
This is a fundamental difference to the mining policies under the previous CFK government, in
which the National government (i.e. ex-Mining Minister Jorge Mayoral) tried to impose its will on
the provinces. Some of those provinces decided they were miner-friendly and went along with
the directives, others decided they were against mining and caused significant friction between
Buenos Aires and the provinces, with the resulting deterioration in Foreign Investment
confidence in the whole country. In Meilán today, there’s a man in charge of policy who
understands the realities of the Argentine mining sector and isn’t afraid to tell is as it is,
weaknesses and problems and all. That’s a good start.
Mexico’s silver production
The World Silver Institute last week (6) confirmed Mexico as the world’s number one producer
of silver. Its figures state that Mexico produced 189.5 million oz Ag in 2015, up 3.2m oz from
2014 (+2.0%). This represents 21% of world production and is also a historical record for a
single country in a single year (though Peru/Upper Peru (now known as Bolivia) in the
Conquistadores era may well have had better annual figures). On that subject, Peru took
second place in the list by producing 135.9m oz silver (15.3% of world production).
Overall, world silver production dropped by 2% to 886.7m oz, due to significant drops in
production in Canada, Australia and China.
Argentina: San Juan Mining may quote on the stock market
Here’s a strange one. At a ceremony in San Juan to mark Argentina’s “Day of the Miner”, local
dignitaries announced (7) that they were looking to set up a small capital fund that would be
tradable via the Argentina stock market (Mercado de Valores) at its Rosario branch. The idea
would be to provide a source of funding for mining projects in the San Juan province to benefit
small mining companies with ideas but limited access to capital. The fund would be run by local
government and in that sense, is a completely novel (and very capitalist) initiative. The mining
18

,
bigwigs say they have interest for the idea from some 20 local investors and were in the
process of studying the type of structure the fund could take.
Peru: Keiko adds Hernando de Soto to her team
With the voter intention polls indicating a tight race between Keiko Fujimori and Pedro Pablo
Kuczynski, the Peru election campaign is now about finding minor issues and attracting specific
sub-sets of voters. Keiko Fujimori is going full populist as well, with the last week seeing her
announce that she’d scrap the current mining formalization plan and also saying she opposes
“Civil Union” (i.e. not marriage but legal rights of partnership) for homosexual couples. On that
one she’s simply running the numbers pretty cynically, as she spoke publicly in favour of Civil
Union as recently as August 2015.
And as this paragraph points out, Keiko’s penchant for populist vote-winning policies may be
about to land on the mining industry as well. Yesterday Saturday brought confirmation (8) that
economist Hernando de Soto was joining the Keiko campaign. As he’s one of the very few
Peruvian figures known on the world stage, it’s a significant fillip for her campaign and adds
potential prestige to her eventual government. It’s also interesting because De Soto was a
strong supporter of her disgraced father when he was President in the 1990’s. On the subject of
mining, it was De Soto last year who proposed (9) that the “Ollachea Model” of giving at least
5% of any mining project to local populations (in the way Minera IRL has done at Ollachea)
should be adopted nationwide. As Keiko’s party has also flirted with that idea, it could become a
formal policy for the industry and if so, watch out. It’s the type of thing that sounds fine on
paper but in practice there are a ton of traps waiting for any similar policy and it would only
work on some very specific projects, such as a geographically controlled (no geologically, we’re
talking maps) Ollachea. Imagine for example what would happen when a line is drawn around
Antamina/Las Bambas/Toquepala and all those villages inside the deemed “area affected” (be it
10km or 20km or whatever km) get presented with 5% of billions of dollars’ worth of
production, while those outside the imaginary line get nothing? Not to mention the backlash
we’d get from the mining companies, their shareholders and FDI sponsorship people on political
risk issues when producing and stable operations are suddenly forced to hand over 5% of their
assets and cash flow by law. How “Miner Friendly” would Peru look all of a sudden?
Finally, the latest voter intention poll came out today Sunday (10) and it’s at the bottom of our
lengthening list here:
• IPSOS April: Keiko 40%, PPK 44%
• CPI April: Keiko 43.6%, PPK 41.5%
• Datum April: Keiko 40.4%, PPK 41.1%
• IPSOS April: Keiko 39%, PPK 43%
• CPI May 1st: Keiko 42.3%, PPK 40.1%
• IPSOS May 8th: Keiko 42%, PPK 39%
We need to take pollsters in Peru with a pinch of salt because they have their own agendas, but
this new IPSOS poll is a departure from the other results because it’s the first poll that’s
changed position. IPSOS was giving PPK a clear lead last week but has swung to Keiko.
Peru: Tia Maria locals gear up for three days of protests
Last week in IKN364 we told of how, Óscar Gonzales Rocha, president of Southern Copper, said
he’d push hard for the outgoing Humala government to permit the controversial Tia Maria
copper project in the coastal Arequipa region of South Peru.
That position was backed up this week by José Miguel Morales, director of Peru’s chamber of
mining, the National Mining Petroleum and Energy Society (SNMPE), who said (11) (translated),
“The Tia Maria mining project is practically ready (to go), that’s why now we need to see what
can be done to activate other big mining project and keep boosting mining activity”. The
SNMPE mining bigwig inference was clear; get Tia Maria permitted and running, we’ll get to do
more things afterwards.
19

,
These mining bigwig people are incredibly stupid and unsurprisingly, it took just a couple of
days for the locals at Tambo Valley to react. They’ve (and by “they” we mean the vast majority
of locals around the Tia Maria project and it doesn’t matter what Southern Copper spins at you,
that’s one of those inconvenient facts that isn’t going away) called a three day protest strike,
starting this week, for May 11th to 13th, with local politicians such as recently re-elected
congress member Justiniano Apaza supporting the anti-Tia Maria cause. He said this
(translated) (12), “I support this measure (the three day protest and strike) because it
expresses the dignity of a population that rejects the arrogance of those in economic power and
tries to impose a mining project that the (local) people have already rejected in an
overwhelming manner”. He went on to say that the protest was “inevitable” after the words of
Señor Rocha and the only definitive solution would be to cancel the project because it would
never receive the necessary “Social Licence”, i.e. the necessary consent from locals in order to
be permitted.
And like it or not, that’s true. That Southern Copper’s president Rocha decided to press his case
in the most sensitive political period possible, during a presidential run-off campaign, shows just
how tone deaf the man is.
Chile: Codelco in trouble with the Environment bureau
Thursday saw Chile’s environmental oversight body, the SMA (the same people who shut down
Pascua Lama and are shutting down Kinross’s Maricunga mine), take aim at Chile’s State-owned
mining company Codelco, specifically its “Ventanas” smelter in coastal Chile. The SMA has
slapped Codelco with a list 13 separate serious infractions (13), including insufficient pollution
controls and lack of environmental remediation policies, which if left unanswered (Codelco has
10 days to admit fault and begin to rectify, or 15 days if they decide to challenge the fines and
penalties) could see the smelter closed down.
Argentina: Mine workers concerns
Salaries, job security, on-site safety. Those are the three things mineworkers in Argentina care
most about according to the outcome on the 47th General Congress of Argentina’s biggest
mining union, AOMA (Asociación Obrero Minero Argentino). According to the union’s General
Secretary Héctor Laplace, “Everything points to this year not being a boom year. (The new
Macri government) has made policy changes and there’s hope that the second half of the year
things will get better, but we also have to deal with reality. There are sectors that are faced
with dropping production, and fighting for salary increase in this inflationary context is
complicated. The truth is that when a mineworker goes to buy the weekly groceries he’s
shocked about how things are getting more expensive and when that happens, he or she is not
thinking about the rise or the fall of the Dollar (to the Peso).
Three deaths in the Grupo Mexico Buenavista mine, Cananea
Last week saw a horrific accident in which three employees of the Buenavista mine in Cananea
Mexico, owned by Grupo Mexico (Southern Copper’s parent company) were crushed to instant
death when the Ford 4x4 in which they were travelling on site was crushed by one of the 360
tonne trucks that carries the mine rock from one place to another at the mine. Apparently the
accident happened because the truck driver, at 06:30am and at the ned of his 12 hour shift,
didn’t see the truck due to the position of the morning sunrise.
The protests from workers and families made big news in Mexico as employees at the mine
have been pushing for some time for shifts to be dropped from twelve hours to eight,
something that Grupo Mexico had refused to do. Until this week, when they suddenly
capitulated (14) in the face of public opinion and have agreed to drop hours worked and hire
the number of new workers necessary to change the mine from a 2 shift/24 hour system to a 3
shift system. Salaries will remain unchanged. Sadly, three people had to die before that
happened.
20

,
Market Watching
Dalradian (DNA.to) delivers a resource update
There’s been a lot of talk around Dalradian (DNA.to) in the last two or three weeks for various
reasons and although I personally sold my position back in March (at $1 for a decent profit but
ultimately it’s another in which I left money on the table for somebody else) and have no dog in
this fight any more, the events of last week were enough to get the debate raging again. I’ve
heard all sorts of rumours and hearsay, with brokerage X doing this and analyst Y saying that,
I’ve been in exchanges with mining industry pals (no names no packdrill) on the subject, plus in
the last 72 hours received plenty of inquiry mails on DNA from readers and subscribers. Here’s
a short-ish piece to sum up all that and give an opinion.
First the prelude and to do that, here’s a price chart with some scribbles on it. My decision to
sell in mid-March is utterly inconsequential, I’ve only included it as a guide on time. The more
important matters are on the right as in late-April the team of Joe Mazumdar and Brent Cook of
Exploration Insights called Sell on the stock (and their own long position in DNA), with their call
based on research about the continuity (or lack of) of the Curraghinalt deposit. As the EI letter
is influential it caused a sell-off (and to be clear, the selling was NOT caused by a few local
politicos raising concerns about cyanide use, that’s a red herring) and the stock remained
depressed (compared to many others in the peer group, as we well know) until Thursday and
the publication of the resource update.
The sector has known for quite a while that a new resource update was due from DNA, the one
that delivers the numbers from DNA’s (largely) infill drilling campaign at Curraghinalt and
Thursday brought the long-awaited update (15). Here’s the headline table from the NR:
The mineral resources are reported at a cut-off grade of 5.0 g/t gold, based on a gold price of
US$1,200 per ounce and 95% gold recovery. Those are reasonable assumptions. Here below is
a chart that shows how the all-categories (M+I plus inferred, we can do it but the mining
company can’t) 43-101 resource count has developed over the years at Curraghinalt.
21

,
Moz Au DNA: Evolution of resource* ounce count
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2003 2009 2010 2011 2014 2016
source: company data *P+P+M+I+inferred
As things stand, 2.096m oz of that 4.4m oz total there on the right is in M+I. As you’re not
allowed to include inferred resources in a Pre Feas or Feas study (only a PEA/scoping study
stage document), the Feasibility Study that DNA is expected to deliver during 4q16 will surely
now be based on 2.096m oz Au.
As for the reaction to Thursday’s news (delivered while the market was open), it was at first
muted. DNA spiked intraday but fell back and closed at $1.04. Then Friday came along and
thanks to a whole bunch of warm and glowing research reports from the brokerages (giving it
the full-court pump) and with the help of a happy gold price pop, DNA rallied hard to close at
$1.22, the same price at which Mazumdar/Cook called sell a few weeks ago. Even though I was
basically off-duty for days last week I couldn’t help but follow the shenanigans (a fine Irish
word) and post a quick thought on the blog Friday, because the brokerage pump job was pretty
blatant and based on a large helping of denial.
The reason Mazumdar/Cook called sell was on continuity issues, they don’t think it’s going to be
easy to efficiently mine this thin-veined deposit because according to the numbercrunching
they’ve done (and they’re both geologists) on the drill data, Curraghinalt may suffer from areas
of low grade waste between the bits with the paydirt. Now that’s fair enough and they may be
right or wrong about that, but the brokerage pump Friday was on the back of the assumption
that dilution was acceptable, something from the NR itself. The point here is that these are two
different subjects! Dilution is about how much barren rock comes out with the ore. Continuity is
about there being no ore in the place where you’re mining. It’s fair enough to assume a 10% or
20% mine dilution at this stage in a deposit’s development, but as things stands there’s no way
of knowing for sure about the continuity factor. The Cook/Mazumdar conclusion is that there’s
enough doubt to not be long DNA any longer, the brokerage reply Friday (when the en masse
pump got into gear) was summed up by the snippy BMO header “Mineral Resource Update
Debunks Cooked Up Continuity Concerns” that I featured on the blog Friday.
That above is a bit wordy, but the bottom line is that the resource update last week did NOT
debunk continuity concerns. In fact the only way we’re going to know for sure is when DNA (or
whoever owns the thing by then) runs trial stoping on the mine and takes out large-scale bulk
samples to see how it hangs together. We’re unlikely to get that information even in the Feas
Study out at the end of this year (and it will be interesting to check the FS notes to see what
recommendation the third party compilers have for DNA at that point).
The bottom line: I owned DNA, I sold it at a profit, it ran further after I’d sold, I don’t mind that
at all, I have no plans to return (unless it gets a lot cheaper). I’m not sticking up for the
Cook/Mazumdar position either (if I were I’d consider shorting the thing), all I’m saying is that I
know when I’m getting smoke blown up my trasero by Canada’s well-oiled sellside machine and
there was a hurricane blowing about my nether regions last Friday morning. I don’t think
anyone knows the real story of DNA at Curraghinalt yet, it may turn into a massive success, it
may need a new approach to dig those ounces out at a good profit. But as things stand today it
looks fully valued to me and with a question mark or two over the project that aren’t going to
go away easily. I’m happy not to have a dog in this race and remain very neutral
22

,
Minera IRL news
On May 4th IRL confirmed the information we ran last weekend in a NR (16) that stated it was
looking to re-list in the Peru stock market and then in Toronto once it had things sorted out.
Again and for the time being, IKN defers from too much comment on the cleansing process
currently underway at IRL but even if we keep strictly to published material from the company,
we can get clues as to the way the problems are being sorted out and cleaned up. If we
consider the December 4th 2015 news release from IRL (17), at the time when the (thankfully
now EX) company president Jaime Pinto was in charge and the power struggle was reaching its
conclusion, we read this passage:
Jaime Pinto, chairman of the Minera IRL Limited board of directors (the "Board")
commented "This latest development does not come as a surprise to the Board as the
president of Minera IRL S.A. has a history of not of complying with lawful requests that
do not serve his or his family's interests. His son, Felipe Benavidez, holds one share of
Minera IRL S.A. and refuses to cooperate with the Company and his son-in-law, Marco
Arevalo, serves as the Minera IRL S.A's in-house legal counsel."
And to be clear, when Pinto talks of “president of Minera IRL S.A” he refers to Diego Benavides.
Last week at the bottom of the Minera IRL Ltd (and that’s the parent company Limited, not the
S.A. subsidiary) news release we read this:
Contact Information
Minera IRL Limited
Robin Fryer
Director
+1 (416) 907-7363
Marco Arevalo
General Counsel
That’s as big a clue as they get, ladies and gentlemen. Public information too. Long-term
suffering fellow holders of IRL, all I ask of you is just a little more patience. Won’t be long now
Conclusion
IKN365 is done, we end with bullet points:
• Sandstorm (SAND) gave us strong numbers in its 1q16 financials, to the point where
I’ve been wondering whether to make it a third Top Pick here at the Weekly. The
market has yet to see the big structural changes and I can say that with confidence
because if it had, it would have been re-rated by now.
• Peru’s going to have a shaky few weeks due to the election run-off.
• Ultimately forget the noise, choose your vehicle and Buy. Hold. Win.
I thank you in advance for any feedback. Our Top Pick stocks are B2Gold (BTG) (BTO.to) and
Starcore Intl (SAM.to). Flash updates will be sent if required by events.
I wish you good trading fortune, ladies and gentlemen.
Mark
23

,
Footnotes, appendices, references, disclaimer
(1) http://finance.yahoo.com/news/mariana-resources-ltd-mariana-announces-060656912.html
(2) http://finance.yahoo.com/news/sandstorm-gold-announces-first-quarter-210000865.html
(3) http://finance.yahoo.com/news/richmont-mines-exploration-drilling-continues-103000908.html
(4) http://finance.yahoo.com/news/ngex-reports-first-quarter-2016-000000923.html
(5) http://diariodecuyo.com.ar/home/new_noticia.php?noticia_id=713681
(6) http://www.portalminero.com/pages/viewpage.action?pageId=112918980
(7) http://www.tiempodesanjuan.com/economia/2016/5/6/perlita-mineria-sanjuanina-cotizara-bolsa-132864.html
(8) http://elcomercio.pe/politica/elecciones/hernando-soto-confirma-apoyo-candidata-keiko-fujimori-noticia-1899732
(9) http://diariocorreo.pe/economia/hernando-de-soto-comunidades-deben-ser-accionistas-de-mineras-601678/
(10) http://rpp.pe/politica/elecciones/keiko-fujimori-le-saca-3-puntos-de-ventaja-a-ppk-en-nueva-encuesta-de-ipsos-
noticia-960377
(11) http://www.aminera.com/2016/05/07/peru-proyecto-tia-maria-esta-casi-listo-sera-una-senal-inversion-minera/
(12) http://diariocorreo.pe/edicion/arequipa/tia-maria-congresista-justiniano-apaza-responsabiliza-a-southern-por-paro-
en-el-valle-de-tambo-670920/
(13) http://www.aminera.com/2016/05/07/sma-formula-cargos-codelco-faltas-ambientales-fundicion-ventanas/
(14) http://www.termometroenlinea.com.mx/vernoticiasN.php?artid=51366
(15) http://finance.yahoo.com/news/dalradian-announces-mineral-statement-curraghinalt-165554377.html
(16) http://www.marketwired.com/press-release/minera-irl-limited-reports-it-will-maintain-its-listing-on-lima-stock-
exchange-lma-mirl-2121368.htm
(17) http://www.marketwired.com/press-release/minera-irl-limited-reports-on-egm-of-minera-irl-sa-scheduled-for-
december-3-2015-aim-mirl-2079413.htm
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
24

,
Darwin Res DAR.v mar'14 C$0.10 14-jul-12 C$0.045 -55.0% tiny risk play dropped
B2Gold BTO.to mar'14 C$3.07 28-nov-12 C$3.35 9.1% closed to free up capital
Pretium Res PVG mar'14 U$5.38 22-nov-13 U$6.50 -20.8% short closed as port longer
Gold Res Corp GORO may'14 U$5.07 26-jan-14 U$4.12 16.7% took profit
Bear Creek Min BCM.v may'14 C$1.63 23-mar-14 C$2.05 25.8% Took profit, sm near-term win
Eco Oro Min. EOM.to aug'14 C$0.48 22-sep-13 C$0.26 -45.8% sold small loser to make room
True Gold TGM.v sep'14 C$0.395 02-feb-14 C$0.41 3.8% M&A won't happen, sold
Santacruz Silver SCZ.v sep'14 C$1.04 26-jan-14 C$0.86 -17.3% silver/M&A spec, rel. small
Timmins Gold TGD nov'14 U$1.38 09-apr-14 U$0.99 -28.3% failed trade, sell, raise cash
Kinross Gold KGC nov'14 U$2.90 20-oct-14 U$2.15 -25.9% V small trade, didn't work, chau
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.145 -48.2% lost China sponsor
Stocks To Follow Closed Positions 2013
Closed in 2013 closed close price
USA Graphite USGT feb'13 U$0.93 08-jan-13 U$0.17 81.7% short tgt made/trade closed
Lachlan Star LSA.to feb'13 C$1.50 30-sep-12 C$0.95 -36.7% sold to reduce port risk
United Silver USC.to mar'13 C$0.21 28-oct-12 C$0.095 -54.8% small Ag sector trade, failed
Aurcana Corp AUN.v apr'13 C$1.07 11-nov-12 C$0.55 -48.6% closed on poor YE results
Gold Res Corp GORO apr'13 U$14.11 25-jan-13 U$9.38 33.5% short tgt made/trade closed
Marlin Gold MLN.v apr'13 C$0.075 10-feb-13 C$0.065 -13.3% closed trade
Bear Creek BCM.v may'13 C$2.58 01-apr-13 C$2.40 -7.0% near-term, time ran out
Lupaka Gold LPK.to may'13 C$1.12 23-oct-11 C$0.32 -71.4% towel thrown in
Tahoe Resources TAHO may'13 U$18.62 08-apr-13 U$14.70 21.1% took profit on ST short
OceanaGold OGC.to jun'13 C$3.03 16-sep-12 C$1.18 -61.1% sold on gold drop
IMPACT Silver IPT.v jun'13 C$1.14 13-jan-13 C$0.62 -45.6% sold on silver drop
Duran Ventures DRV.v jun'13 C$0.045 10-may-13 C$0.025 -44.4% ST trade never worked
Plata Latina PLA.v jun'13 C$0.79 10-apr-12 C$0.13 -83.5% closed
Bellhaven BHV.v jun'13 C$0.065 03-jun-13 C$0.12 84.6% closed ST trade
B2Gold BTO.to aug'13 C$3.07 28-nov-12 C$3.44 12.1% sold 1/2 to raise cash
Colossus Min. CSI.to aug'13 C$0.72 24-jul-13 C$0.79 9.7% closed thru nerves on future
Pretium Res PVG.to aug'13 C$8.20 11-jun-13 C$10.14 23.7% closed to raise cash
Bear Creek BCM.v sep'13 C$2.06 30-may-13 C$2.20 6.8% sold on pol risk decision
MAG Silver MVG oct'13 U$7.00 12-sep-13 U$5.62 19.6% near-term short
Gold Res Corp GORO oct'13 U$9.52 03-may-13 U$4.98 47.7% short tgt made, covered
AQM Copper AQM.v oct'13 C$0.31 16-oct-11 C$0.125 -59.7% closed failed trade
First Majestic AG nov'13 U$11.51 07-nov-13 U$10.50 8.8% v near term short, closed
Fortuna Silver FSM nov'13 U$4.00 07-nov-13 U$3.68 8.0% v near term short, closed
Primero PPP nov'13 U$5.70 07-nov-13 U$5.75 -0.9% v near term short, closed
Starcore Intl SAM.to nov'13 C$0.235 08-sep-13 C$0.17 -27.7% ST trade didn't work, sm loss
B2Gold BTO.to dec'13 C$2.22 28-nov-12 C$2.16 -2.7% closed ST trade to raise cash
Stocks To Follow Closed Positions, 2012
Closed in 2012 closed close PPS
Soltoro SOL.v jan'12 C$0.87 07-nov-11 C$0.94 8.0% cash moved to BCM.v
Gold-Ore Res GOZ.to feb'12 C$0.84 13-oct-10 C$0.98 16.7% trade closed on ELG.v offer
Minefinders MFN feb'12 U$11.68 17-nov-11 U$14.80 26.7% target made, trade closed
Iron Creek IRN.v mar'12 C$0.58 26-sep-10 C$0.31 -46.6% time up on small bad trade
U.S. Silver USA.to apr'12 C$2.18 15-mar-12 C$1.86 -14.7% ST trade no good, cut loss
Augusta Res. AZC.to may'12 C$3.10 29-jan-12 C$2.07 -33.2% bad mkt, bad trade cut loss
Bellhaven BHV.v may'12 C$0.50 22-sep-10 C$0.28 -44.0% new mgmt not impressive
Zincore Metals ZNC.to may'12 C$0.325 29-jul-11 C$0.17 -47.7% bad mkt, bad trade cut loss
Soltoro SOL.v may'12 C$0.70 18-mar-11 C$0.41 -41.4% bad mkt, bad trade cut loss
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% fail ST trade close pre split
Estrella Gold EST.v aug'12 C$0.91 27-mar-11 C$0.14 -84.6% Closed on port realignment
25

,
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
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
26

,
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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