IKN #368Premium

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The IKN Weekly
Week 368, May 29th 2016
Contents
This Week: Trades heads-up, Memorial Day, In today’s issue, Don’t Panic, A few more words
on why Brexit won’t happen.
Fundamental Analysis: Tinka Resources (TK.v) updates at Ayawilca.
Stocks to Follow: Overview, Continental Gold (CNL.to), Regulus Resources (REG.v), Starcore
Intl (SAM.to), Sandstorm (SAND) (SSL.to), Richmont Mines (RIC) (RIC.to), Tinka Resources
(TK.v), INV Metals (INV.to), B2Gold (BTG) (BTO.to), Lara Exploration (LRA.v), Nevada Sunrise
(NEV.v).
Copper Basket: Overview, Cordoba Minerals (CDB.v), Nevada Copper (NCU.to).
Low Cost Producer Basket: Overview, New Gold (NGD), Franco Nevada (FNV).
Regional Politics: Mexico: The “other” royalty charge, Chile: Codelco reports a 1q16 loss (of
sorts), Chile: Pascua Lama locals reject Barrick’s latest offer, Colombia: That Constitutional
Court ruling and what it really means, Colombia: Antioquia’s governor waxes lyrical, Colombia:
Close to peace, Peru Presidential run-off election: One week to go, Argentina: The Macri
government popularity wanes.
Market Watching: Cordoba Minerals (CDB.v) is back at a buyable price, Minera IRL: the good
news picking up pace.
I remind subscribers that no part of this newsletter can be copied, reproduced or
given to any third party without the express permission of the author.
This Week
Trade heads up
The standard line at the top of the edition. I plan to add to my positions in Starcore (SAM.to)
and Sandstorm (SAND) in the days ahead, taking advantage of the discounted price in both. I
also plan to sell my very small position in Nevada Sunrise (NEV.v) because I can’t justify its
inclusion on the list any longer.
Memorial Day
Tomorrow is the day that The United States of America rightly remembers many fine and brave
people sent to their deaths by the decisions of a few stupid people. The US markets are closed,
Canada is open for business but trading is bound to be light.
In today’s issue
• Tinka Resources (TK.v) delivers its resource update, we take a good look at the
contents.
• A longer than expected piece on Cordoba Minerals (CDB.v), mostly thanks to an
interesting and enlightening exchange with company CEO Mario Stifano. And your
author deciding not to be so lazy about the stock.
• Colombia and its political movements are centre of attention in Regional Politics today,
with the sum result message positive for the country.
• Don’t fret the gold drop, do like me and enjoy it by adding to preferred precious metals
positions. More on that in ‘Stocks to Follow’ below.
1

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Don’t Panic
In last week’s intro I rounded off (near the
end anyway) with, “I expect a summer of
flat gold prices, we may see U$1,200/oz
challenged and we may see U$1,300/oz
challenged, but I doubt either of those.
From here until Labor Day gold’s not going
to do much, we’ll see how the land lies for
the last quarter of the year when it comes
around”. It didn’t take long for one of those
limits to come into play...maybe. See right.
No, I’m not sweating this downmove at all.
Gold’s been hit because of “dollar strength”
they tell me, that because Janet said last
week that what they wrote in the Fed
minutes the week before wasn’t a joke...or
something like that. But gold is now
oversold and we know that just by
comparing the normal way in which the US
Dollar and gold have been working
inversely and the last ten days...
...in which the 1% improvement in the dollar has been met by a near-6% loss in the metal.
Unless this time is different of course, in which case I’m wrong.
But so far I’m not, we haven’t seen U$1,200/oz challenged (you may think U$1,207/oz Friday
midday on the back of the Yellen spook-out counts, it doesn’t for me) and until then I don’t
think there’s anything here except an obvious buying opportunity on temporary weakness in the
gold price. So that’s what I’m going to do next week by adding some Starcore (SAM.to). Or to
cruelly steal from and unfairly edit one of my favourite authors, “The IKN Weekly...has many
omissions and contains much that is apocryphal, or at least wildly inaccurate, it scores...in two
important respects. First, it is cheap and secondly it has the words DON'T PANIC inscribed in
large friendly letters on its cover”. Or it should have.
Does all this sound a little too blasé for your taste, the cool and smooth newsletter writer pooh-
poohing dissent, going full goldbug and giving it the “we go up from here!!!” (three
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exclamations de rigueur)? Well...yes maybe, but be in no doubt the tide has definitely and
definitively turned, this is now a bull market for gold and its stocks. In a bull market be bullish,
don’t be bearish. And you’ll also note that it’s really easy to agree with “Buy. Hold. Win.” when
everything is going up, it sounds snappy and brings a smile to the collective face of my
esteemed and highly respected readership*. When such catchphrases really matter is when
there has been a temporary reversal over the larger uptrend, the reminder grates more when
your position has just lost 10% or 20% but it’s far better to annoy than appease.
A few more words on why Brexit won’t happen
Also in last week’s intro was this line, “..once the silly Brexit thing is over and the UK almost
certainly votes to stay in Europe..” about the June 23rd referendum vote in the UK on whether
the country stays in the EU or leaves. It was almost a throwaway in last week’s intro,
nevertheless it got a decent handful of mails and the contents of them all can be paraphrased
down to “Why think that Mark?”. Okay, here goes and it’s really quite simple: Though Brits on
both the left and the right may secretly love the idea of breaking away from all those European
types due to their 1) innate sense of superiority and 2) innate racism* towards the nebulous
menace of both “immigrants” (why has that simple and descriptive word become so
threatening?) and other established Europeans (I’d treat you to the racist slang Brits have for
every major country on the continent but there’s no point), Brits are at heart greedy self-
serving people who will only ever vote for their own back pocket and have scant regard for
idealistic matters such as society or togetherness. Take it from a British citizen who may have
been living out the country for many years, but baggage is baggage and Napoleon had us down
pat two centuries ago when he labelled the place “a nation of shopkeepers”. The “Leave”
campaign people have not made a good case as to why the rank and file will be better off out
of the EU, while the “Remain” campaign people have scared the holy excrement out of Brits by
threatening the thing most dear to their hearts; the value of their houses. It doesn’t even
matter if Chancellor (i.e. FinMin) Osborne’s prediction of an 18% drop in house prices is correct.
It could be half that, or a quarter, even “your house won’t appreciate any further” is good
enough, citizens who vote lefties, righties or centries in the UK have one thing in common,
they’re all me-firsties and rare indeed is the principled stand for one’s political beliefs when loss
of cold hard cash is at stake. An Englishman’s Home is his Castle (goes the expression), her/his
castle is under threat, British people won’t leave because the Remain campaign’s so-called
“Project Fear” is working. Quite right too, I’m all for scaring a bunch of sheep into doing the
right thing.
Also, the UK bookmakers are offering odds of 4/1 that Britain votes to leave the EU (i.e. bet
$10 and win $40, getting back $50 in total) and 1/6 that it stays (i.e. bet $10 and win $1.67,
getting back $11.67 in total. Bookmakers are not charities. Finally, if you were to point out that
in this setting the above-mentioned sense of superiority and the innate racism are the same
thing, with certain caveats I’d agree.
*An example: When Labour (left) won a landslide general election victory in 1964, one
Conservative (right) candidate bucked the trend and won his seat in a largely working class
borough by using the campaign slogan, “If you want a ni___er for a neighbour, vote Labour."
Yup , two Gs missing. And the campaign worked because it hit the button of “your house price
will drop” more than “next door will have strange smells in the kitchen” or “they talk funny”.
*You pay for the food my children eat, nothing could elicit my respect more.
3

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Fundamental Analysis of Mining Stocks
Tinka Resources (TK.v) updates at Ayawilca
The morning of Wednesday May 25th saw our zinc exploration play Tinka Resources publish (1)
a NR on its updated 43-101 resource for its flagship Ayawilca project in the Central highlands of
Peru. We don’t have the full 43-101 report yet (they have 45 days to get it onto SEDAR) but the
NR was a long one with plenty of the main details. Today we go through the information and
try to make more sense of a piece of news that failed to make an impression on the market.
The numbers
The quickest way of showing what’s changed at Ayawilca is compare and contrast so here’s
how the resource count looked until last week:
Once you did the math that came to contained metal of 1.7Bn lb zinc (An), 0.91m kg indium
(In), 5.8m oz silver (Ag) and 55m lb lead (Pb).
So to the new numbers and here below the main table from last week’s NR. There are plenty of
notes below but to kick off the comparative process I’ve added in a few discreet red boxes on
the table to highlight the more important numbers.
THIS IS NOW
Notes on changes
These notes start with basic discussion of the numbers in the box then expand to consider their
consequences, as rather than try to create a beautiful story-like narrative it’s the way it’s
poured out of my brain this weekend. It’ll do, you’ll get the picture and this isn’t a big formal
economic analysis, either.
Between the February 2015 and May 2016 resource counts, TK has drilled another 9,000m
(approx) into Ayawilca, mainly in the Central zone. This is the main reason for the change in
numbers.
However, the company has taken a more conservative approach to several of its parameters at
the same time, which limited the increase of the headline numbers you see in the above chart.
To begin this line (we’ll pick it up later) note that the assumed metals prices for the resource
are all lower including the main one for Zn, down from U$1.20/lb to U$1.00/lb.
The resource is still 100% in the 43-101 inferred category, which is as expected and fair
enough. Management tells me that it’s going to stay that way as there are no plans to infill for
the moment, the next phase of development at Ayawilca will be drilling into the new targets as
noted in the main NOBS report on TK.v that opened our recent coverage on the stock, in
IKN363 dated April 24th. Those are to the South and North of Ayawilca (or see the map below).
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On that score, management says that both the government permitting track and the community
agreements are moving forward correctly and they should be drilling “in Q3”, which is also as
previously stated and planned. All good.
The resource has grown. We now have 2.446Bn lbs Zn (up by 746m lbs) and on the credit
products 82m lbs Pb (up by 27m lbs), 1.385m kgs In (up by 475,000 kgs) and 8.8m oz Ag (up
by 3m oz). The grade is now a global 8.2% ZnEq which is up from the previous 7.7% ZnEq and
the cut-off is run at 5.0% ZnEq. The company says that’s an approximate U$60/tonne NSR,
which for my money is a very conservative assumption, because at those assumed prices the
cut off could be lower and we still get to U$60/t NSR. But hey, details, and I’m always the one
that pitches for companies to take a conservative end to their numbers so that’s all fine.
A word about the U$1.00/lb assumption on zinc price, the main metals and the one on which
TK at Ayawilca will float or sink as a company (the by-products are useful of course, but it has
to work as a Zn deposit). It doesn’t stack up against the current spot price of around 85c/lb for
zinc, but on consideration and after talking with management about why they chose that
number I’m good about using it. Ultimately, TK at Ayawilca will become an eye-catching project
and company for the market if zinc metals prices start moving up. There’s a lot of assumptions
about higher zinc price s in the pipeline these days (and for once I agree) and though certainly
not a given, you ahve to start somewhere. Notably TK has dropped its price assumption for zinc
from $1.20/lb in the Feb 2015 resource to $1.00/lb today and that’s a reasonable concession
without losing the blue-sky capacity of the project
On the subject of confidence, one thing that management was keen to point out to me last
week is that the conservative, cautious approach to this resource update wasn’t confined to
things such as cut-offs and prices. We’ll get to see this better when the 43-101 technical report
appears on SEDAR, but TK says it has taken a very different approach to the resource model
this time and that also limited the size of the new numbers. Up to the last resource count, TK
was taking a more global approach to the calculation and constraining the model on grade
alone. That’s a normal thing for an early stage in deposit development of course, nothing
nefarious going on, but now they have more drills in and a better handle on the controls of the
Ayawilca deposit they’re getting more serious about the model. This means it’s now constrained
by grade and geology and mineralization solids, not just grade. It’s a model that’s more faithful
to the reality of Ayawilca and what can actually be mined for a profit, rather than just “what’s
down there” but by design there are now nooks and corners of the deposit that were included
in the February 2015 resource and are not included today. Or put simply, just by keeping the
parameters of the Feb 2015 resource calculation, TK could have made its top line numbers
much bigger and would have been much flashier and splashier, but they didn’t go that way.
These people are after the attention of the serious end of the mining world and is part and
parcel of the “serious junior” philosophy that separates the wheat from the scammy promo
chaff and (in my opinion) it’s what we the junior mining investor want, need and should
encourage at every opportunity. Hence the paragraph you just read.
But wait! There’s more! So far we’ve only compared the February 2015 resource for the zinc
part of Ayawilca. This time around TK has also provided a new resource (again inferred for the
deeper manto layers of largely tin mineralization. Here’s how that looks:
This is a first pass resource, TK takes pains to state that it’s separate from (i.e. deeper in the
system) the Zn resource and the real world implication is that without a primary Zn operation
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on top this isn’t going to get mined so again, the Zn rocks have to work economically before we
can consider the positive effects of this known mineralization. That said, this is now an
interesting extra chapter to the Ayawilca story and brings value to the table. The resource is
again cut at a U$60/tonne NSR (makes sense) and the 90m lbs Sn inferred at 0.76% and 85%
recovery assumption is a rock value of U$128/tonne even before those credit metals are in play.
We could gripe about the assumption of U$9/lb,
as this chart shows it’s been a while since we’ve
seen that price. In fact I am griping a bit because
it’s a bit of a reach but even at this weekend’s
spot close of U$7.13/lb the rock value of SN alone
is U$101.5/tonne. That works.
The tin layer at Ayawilca isn’t a reason to buy TK.v
shares, be clear as possible that this is a zinc play
period. But it’s definitely a value add at the project
and initial results (along with this initial resource
show it to be as continuous as the higher Zn
mineralization. You can’t dismiss this part of the
TK story out of hand and I’ll be interested to see
how much TK pushes this part of the story as it
rolls out its 2016 marketing campaign.
Moving on to the updated layout of Ayawilca and the resource map, this is the business end of
the diagram offered to us in the NR last week. We see that the blue zinc zone in the Ayawilca
Central area has increased in size and gets to within 200m (approx) of joining up with East
Ayawilca and creating a continuous zone. In fact management told me last week that they can
tentatively join the two areas together (via the results of hole 35) but for the sake of caution
and their new preferences on how to put the resource together decided not to do so. That’s fair
enough. Meanwhile the new tin zone (red and remember this lies below the zinc zone in the
mineralization) covers roughly the same area at this early stage of exploration development.
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Let’s leave aside the new tin zone, best considered a potential bonus prize at this point, and
play with those new zinc-only resource numbers a little further: If we factor in the assumed
metals prices of the resource and do the math that comes to a addition of a total of $1.07Bn in
contained metal value. Then factor in the (still very basic) recovery percentage assumptions
and it comes to U$900m minus a spit. We can go further by taking into account the treasury
position when the 2015 resource was released, the treasury position today, the nearly 34m
shares added by the 2q15 placement, then adjusting for the small change in the share price,
this whole TK strategy of exploration and development in the year and three months has cost
around $6m. And that’s not just the exploration program but everything this cash-sipping
company has done in the 15 months; G&A, director salaries, investor relations and everything.
For that $6m ploughed in we have a theoretical $900m of new recoverable metal, that’s not a
bad return at all. Now for sure that calculation above is a bit of an artificial number and not
something on which I’d recommend a stock. It’s more a refection on the company philosophy
and its strategy, not whether Ayawilca is going to be a mine or whether that strategy is
ultimately correct. But while we’re on the subject let’s recall that in 2015 nearly all the
exploreco world had battened down the hatches and was just sitting on its hands doing nothing
to “protect capital” (translation: pay directors for doing nothing). But not TK, they saw that it
was the time to press on rather than go into hibernation and put 9,000 metres into its flagship
property. I agree with this way of doing business, the type of contrarian attitude that appeals to
my own sense of the markets.
Finally, I wasn’t planning on doing this type of thing today but reader ‘V’ got in touch this
weekend and we exchanged on the subject as regards TK at Ayawilca, so just to show how I
think this resource can stand up economically here’s the simple table. And yes V, I stole your
XLS and adapted it rather than run this through my own kit because 1) I’m lazy and 2) your
model, though simple, does the job very nicely and puts us in the ballpark. Written apology on
request, V ☺. What you have is an economic breakdown of the zinc-only resource (we again
forget the tin stuff) using US Dollars all the way through and at three zinc prices 85/lb (spot),
$1.00/lb and an upper case of U$1.20/lb, just for fun. Here’s the table, assumptions below:
Ayawilca: Per tonne breakdown of Zinc resource
Using US Dollars Zn Spot Zn $1.00 Zn $1.20
Mining cost/tonne $45 $45 $45
Processing/tonne $10 $10 $10
G&A/tonne $5 $5 $5
Total/tonne $60 $60 $60
ZnEq grade 8.2% 8.2% 8.2%
Zinc price $0.85 $1.00 $1.20
Lb/t 2204.6 2204.6 2204.6
Gross revenue $154 $181 $217
Weight avg recovery 84% 84% 84%
Weight avg payability 80% 80% 80%
NSR $103 $ 121 $146
Profit per tonne $43 $61 $ 86
Margin 42% 51% 59%
source: TK data, IKN ests
The assumptions used are:
• Mining cost at U$45/tonne. This is comparable to the costs at the Trevali Santander
zinc mine in Peru (which is roughly the same size as any eventual operation at
Ayawilca, too).
• Processing costs at U$10/tonne. This is a guesstimate.
• G&A at U$%/tonne, which assumes G&A doesn’t go over U$1m per quarter.
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• The ZnEq grade as stands
• The three zinc prices as seen, then the by-product credit metals as per the TK
assumptions in last week’s NR (In $500/kg, Pb $1.00/lb, Ag $20/oz)
• Recoveries as per the TK assumptions in last week’s NR, which base at 90% for Zn and
then when the by-product recoveries are factored in give a weighted average recovery
of 84% for the 8.2% ZnEq rock.
• Payables at 80%, which is conservative.
From that you get, for example, a NSR of U$121/tonne which translates to a 51% operating
margin at the U$1.00/lb zinc price. Notably, the economics still work to a reasonable level at
the current $0.85/lb zinc spot price.
Now let’s be clear, this type of economic analysis has to be taken with a pinch of salt, we’re
years away from knowing the details of how Ayawilca will work on an economic level so we
need to make a whole heap of broadstroke assumptions to get a number coming out of the
bottom of such a spreadsheet. What this type of exercise does is show that by using reasonable
line items and assumptions, TK at Ayawilca does have a potentially profitable and
economically robust project on its hands and that’s a good thing. But did you see how I put the
word “potentially” in bold type and underlined it? Yup, did that for a reason. I’ll also state that
during the back and forth with reader V this weekend, it becomes abundantly clear to both of
us that the key to a successful mine at Ayawilca will be costs control. That’s normal for a zinc
operation as they tend to run at significantly lower gross margins than copper mines (as one
example). Operational efficiency would be paramount in any mine here, because if you raise
that mining cost by just ten dollars the prospects of getting somebody to pay to build your mine
are a lot lower and the whole thing is likely to stay as a great idea that never becomes a mine.
Discussion and conclusion
The resource update that TK delivered to market last week failed to move the stock price, as
seen in the near-term ten day chart to the left and the longer-term two year chart to the right
that also shows how TK is firmly inside its normal trading range price of between 20c and 25c.
Despite the non-reaction of the market, we longs in TK should be happy with what has come
out of this resource. We have a bigger resource and a better zinc equivalent (ZnEq) grade
(even though the headline Zn grade stayed at 5.9%) and as a result a good pop in the overall
resource number. Not only that, but the more conservative modelling and “serious” nature of
TK means that quality has been preferred to quantity and once again, I get the strong
impression that this company isn’t trying to impress us retail grunts, it’s got industry peers and
large-scale shareholders in mind more than trying to cause another price spike and turn itself
into a trading vehicle.
This resource update is one step in the process, next comes the Q3 drilling campaign in other
parts of the project. CEO Carman never tires of talking up the expansion potential of Ayawilca
and, considering that the initial discovery was 100% blind and the company now has a much
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better handle on the geology and system, there’s good reason to believe.
With Tinka Resources (TK.v), what we have is a junior exploreco company and a project that
ticks the right boxes:
• At C$33m market cap, it’s cheap.
• With Ayawilca it has a strong flagship project with a resource that responds well to
drilling investment and plenty of upside potential
• It’s well-run tight ship of a company that ploughs its cash into its project, no big
expense accounts to fund, no gold taps in the bathrooms. If only for this reason it’s a
better prospect than 90% of the junior mining companies on the TSXV.
• Management prize quality over quantity and are looking to impress fellow mining
companies more than us retail grunts.
• Partly due to that it’s been flying under the radar of the retail brigade, the time to
accumulate stock of a worthy company is when nobody’s talking about it (the reverse is
true for the scammy pump jobs, of course).
As to whether Ayawilca becomes a mine, that’s up to the Market Gods to decide because
ultimately the fate of just about every grassroots zinc (even base metals) project is with the
metals price. Out it this way; if zinc stays at U$0.85/lb indefinitely it won’t be developed. On the
other hand, if Zn suddenly flies to U$1.50/lb your 22c shares will be trading at multiples higher
and bankers will be forming an orderly queue at the door of TK in the hope of writing the
company a fat capex cheque.
Tinka Resources (TK.v) delivered positive news to the market last week and I don’t care a hoot
if its collective wisdom hasn’t seen it yet, because they will. This is a great way to play the
metal in question and if and when word gets around, TK will move higher even without any
further exploration success. The risk/reward balance in is greatly in our favour, I’m a strong
holder of this stock on last week’s news and once I’ve done collecting a few more precious
metals shares, I may consider adding further to an already chunky position.
Stocks to Follow
A bad week to be long juniors. Overall our list managed to register eight losers (BTO.to,
SAM.to, SAND, TK.v, RIC, INV.to, LRA.v, FCV.v) and just two winners and impressively, the
minimum percentage move in any of our stocks, up or down, was 7.5% (in LRA.v). For sure the
moves in Regulus (REG.v up 32.9%) and Nevada Sunrise (NEV.v up 11.4%) were a silver lining
to the dark clouds, but there’s no avoiding the heavy losses taken by larger holding stocks such
as B2Gold (BTO.to down 12.5%), Sandstorm (SAND down 12.1%) and Starcore (SAM.to down
10.3), to name just three.
With the addition of Continental Gold (CNL.to, itself a 10.1% loser) we now have eleven open
positions on the list, four less less than our self-imposed maximum of fifteen at any given time.
Six are in the green, five are in the red.
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company Ticker this week Avg Price Reco date Current PPS Gain/Loss% Notes
TOP PICKS
B2Gold BTO.to buy C$2.11 12-sep-14 C$2.31 9.5% New tgt C$2.96
Regulus Res REG.v buy C$0.64 06-apr-15 C$0.93 45.3% New Top Pick, long-term pos.
Starcore Intl SAM.to STR buy C$0.58 10-jan-15 C$0.70 20.7% Top Pick 2016, $1.26 tgt
Long positions (in current order of preference)
Sandstorm Gold INV.to STR buy U$3.90 17-apr-16 U$3.49 -10.5% A buy on FY16 re-rating
Tinka Res TK.v buy C$0.195 19-apr-16 C$0.22 12.8% Top value Zn/Sn/Ag stock
Richmont RIC hold U$7.60 01-may-16 U$7.38 -2.9% M&A target, near-term trade
Continental Gold CNL.to buy C$2.68 22-may-16 C$2.41 -10.1% new near-term trade $4.80 tgt
INV Metals INV.to buy C$0.25 03-apr-16 C$0.52 108.0% back to value level, buyable
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.86 -25.2% solid biz model
Focus Ventures FCV.v hold C$0.23 01-jul-12 C$0.075 -67.4% financing sept next hurdle
Nevada Sunrise NEV.v selling C$0.185 28-feb-16 C$0.245 32.4% V. small, no reason to own
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.
Continental Gold (CNL.to): Position opened. I bought what I wanted to buy early week,
CNL sunk with all the others late week. Harrumph, another dose of bad timing but one I’ll live
with okay, the prize is six months away and a double (or so), not two days and 10%.
For more on CNL and Colombia (the news is mostly positive), there are three pieces on the
country in ‘Regional Politics’ below. One is specific about CNL too and to be clear here, there’s
nothing new on the political/permitting side that CNL needs to be worried about. The bet I’m
making here isn’t about whether Buriticá gets funding, or becomes a mine, or whether CNL gets
bought out. None of those things interest me, I’m long CNL because I know they’re going to get
the EIA permit in 2016 and on that they’ll be re-rated. And then I’ll sell. Simple.
Regulus Resources (REG.v): Added. Okay, let’s get the basic numbery stuff out the way
first. As expected (feared) the stock shot higher on Tuesday (first trading day after holiday)
touched a high of $1.05, then spent the rest of the week “in the 90s”. The price is one thing, I
was more encouraged by volume because a sum total of 1.076m shares changed hands in the
four days of trading REG.v and the stock traded over 100k on every day (it’s only ever had two
consecutive 100k+ days before in its history). This is the best news because there’s a changing
of the guard from old hands tired of holding a dusty and (to this point) dysfunctional position to
new hands with a better view of developments...and it’s in the retail realm, too.
As for me, I bought some on Tuesday (snagged some 80s) and as a result my cost average has
10

,
just moved higher from the previous long-standing 30c, it’s moved MUCH higher. I could of
course stick with the historical number and claim a 200% winner at this point, but we’re all big
boys and girls here, we’re not trying
the BS anyone with massaged
performance figures, the only thing
that matters in the end is cash out
the trade compared to cash in the
trade. So for the time being the cost
average is on 64c and I expect that
will creep up over time as I add, but
I’m not in a hurry for my next
tranche because I expect REG to
come down in price over the next
couple of weeks as the novelty
wears off. I’ve mentally pencilled in
75c but that’s just pencil, let’s see
how things develop.
REG management were in Canada
last week marketing the story to brokerages and suchlike, which is a good thing. I’ve noticed
that aside from a very few places there hasn’t been much chatter about the big move REG has
put in over the last couple of weeks, that lack of noise from the peanut gallery is also a good
thing. The main message here is that this is a the first chapter of a long-term story, I’m in no
hurry to fully position and in my opinion, you shouldn’t be either.
Nevada Sunrise (NEV.v): Selling. It’s a combination of three or four things. Firstly I don’t
like that NEV is getting caught up in water use lawsuits in the Clayton Valley (2) because the
water availability angle is the main reason I bought into NEV in the first place. Second, I don’t
really buy into the whole Li hype and this position is an outlier on the portfolio table. Third I’m
starting to think that making room isn’t such a bad idea. Fourth it’s only a tiny position anyway
and I may be giving a wrong impression by owning it and sticking it next (or at least on the
same page as) what I consider to be exciting and excellent risk/reward opportunities in the
junior sphere, such as B2Gold, Starcore or Regulus. It won’t be missed by you or I, I’m going to
sell my small holding and take the profit next week.
Starcore Intl (SAM.to): Adding. It shouldn’t really be necessary to say it out loud any more,
but I will anyway. As stated, this buyer on weakness of SAM is to take the opportunity next
week of adding at under 70c, though I will almost certainly wait until Tuesday minimum and the
opening of the NYSE to buy as it provides a more liquid market (even though SAM.to is a
Canada only stock).
As for newsflow, we should watch out for anything from the San Martín mine about that game-
changing manto. Underground drillers have been checking it out more closely and we can also
assume the tunneling equipment has been brought in to open it up for eventual mining.
Anything we get from SAM on this score may be a real market-mover.
Sandstorm Gold (SAND) (SSL.to): Adding. Equally I’ll take the opportunity to add and
average down on SAND next week, because.... If you liked it at $3.93 you’ll love it at $3.41!!!
(the exclamations necessary).
More seriously, this is the type of opportunity that comes in a bull market, people get jittery
and think it’s all over early when it’s not. Take advantage of the weaker hands, they’re there for
something, every winner has an equal and opposite loser in the world’s biggest casino.
Richmont Mines (RIC) (RIC.to): Let’s start with the obvious: My decision after running
through the dilemma of “hold or sell” last week was hold and as RIV dropped by a cool 11.9%
last week, it was the wrong decision period. I could have sold them all Monday and come back
11

,
in Friday afternoon, I could have done all sorts of things, we live in a democracy (I think), but I
decided to hold through was wrong because pecunia no olet, as they said in old time Rome.
Okay, that done we’re still holding a stock at a good price, I think we’re at the bottom of the
channel for gold and its rebound will bring a sharp revaluation for RIC so I could buy some
more, but I’m going to stick with adding to SAND (like it more longer-term) and SAM.to
(exceptional great value going begging).
INV Metals (INV.to): Excuse me while I wring my hands and sob with grief, as after last
week’s selling in INV on light volumes I’m only 108% in less than two months. Oh isn’t life
cruel? In other words no change to the plan and holding happily, waiting for the updated PFS.
B2Gold (BTG) (BTO.to): I still can’t get around to writing up the 1q16 numbers, these pesky
“juniors” and their “stories” keep distracting me at the wrong time. Anyway, this week I’m just
going to note how B2 traded like a pig last week and dived more than most, perhaps due to the
poor optics created by the $5.9m insider share dump (nearly all at C$2.60) that got a lot of
airtime last week. Sadly it’s par for the course at BTO and I’d like to be more indignant about it,
but we already know this team has an established track record of cashing out large lumps of
shares (around this time of year too). The normal reaction is for the share trading to be soft as
well, but then it springs back and over time, it’s made no big impression on whether the stock
goes up or down over the medium term.
For what it’s worth, I have a sneaking suspicion that BTO is the stock Porter Stansberry is going
to pump to his list on May 31st. Wouldn’t it be funny if those large chunks of shares dumped by
management were picked up by Porter’s new BFF Paulson? That’s just my idea of a rumour,
other people in one of my “preferred focus groups” (a fancy title for a bunch of mining people
swapping salacious gossip) think it could be Sandstorm (SAND) or even Victoria Gold (VIT.v).
But all these are pure guesses.
At the new share price B2 is re-classed as a 2buy” in the near-term sentiment column of the
above table, but to be hypocritical (once again) I’m not buying as I have a ton of these already
and prefer to diversify by buying more SAND and SAM.
The Copper Basket
After twenty-one weeks of 2016, The Copper Basket shows a 50.00% 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 1211.43 5.15 -3.0%
2 Ivanhoe Mines IVN.to 0.61 778.96 771.17 0.99 62.3%
3 Reservoir Min. RMC.v 4.08 48.69 418.73 8.60 110.8%
4 Capstone Min. CS.to 0.44 382.04 255.97 0.67 52.3%
5 NGEx Resources NGQ.to 0.65 205.06 192.76 0.94 44.6%
6 Western Copper WRN.to 0.38 94.19 75.35 0.80 110.5%
7 NovaCopper NCQ.to 0.395 104.33 73.03 0.70 77.2%
8 Copper Mtn CUM.to 0.445 118.8 55.84 0.47 5.6%
9 Nevada Copper NCU.to 0.66 80.5 53.13 0.66 0.0%
10 Cordoba Min. CDB.v 0.16 86.86 49.51 0.57 256.3%
11 Copper Fox CUU.v 0.125 417.64 48.03 0.115 -8.0%
12 Hot Chili Ltd HCH.ax 0.09 445.723 40.12 0.09 0.0%
13 Atico Mining ATY.v 0.28 97.59 38.06 0.39 39.3%
14 Amerigo Res ARG.to 0.205 173.61 23.44 0.135 -34.1%
15 Revelo Res. RVL.v 0.055 99.19 7.44 0.075 36.4%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg 50.00%
12

,
Being a numberwonk means you get hot and sweaty about things such as when random price
movements of 15 stocks end up at a 50.00% profit on the year, to the hundredth, even when it
means the basket took another sizeable drop
on the week. There were six winners on our The Copper Basket 2016, weekly evolution
100%
list (HBM.to, RMC.v, CS.to, NGQ.to, CUM.to,
80%
WRN.to), one stock that stayed unchanged
(RVL.v), and eight week over week losers 60%
(IVN.to, CUU.v, NCU.to, NCQ.to, HCH.ax, 40%
ARG.to, ATY.v, CDB.v). The best winner was
20%
NGEx Resources (NGQ.to up 10.6% and why
don’t the stocks I like and are considering as 0%
a buy go down?), worst losers were Cordoba -20%
Minerals (CDB.v down 21.9%) and Nevada
Copper (NCU.to).
Copper the metal has done exactly what I
didn’t expect from it and rallied (remember all
that “imminent under $2” talk I gave you this
time last week?). This helped the cause of the
producers first and foremost, as seen in HBM,
CS, CUM and now RMC by proxy as it’s tied
closely to the fate of Nevsun (NSU). Copper
futures added a useful 6c/lb on the week, as
seen in this hourly chart, and after ignoring
the dataset for months on end the market
seems to be taking its cue from the drop in
world inventories of the metal, particularly the
action in the SHFE. It’s why we patiently track
the figures of inventories here, of course.
In fundies news the Chilean copper
beancounters Cochilco published an
interesting report on the state of play in
production costs of copper in the world’s
biggest producer country. You can find the
report and the presentation here (3) (see the May 24th links) and from those, here’s the main
event table:
And I’ve taken the liberty to scribble a bit to make an English language version of the table.
Notes underneath:
13
dr3naj ht01 ht71 ht42 ts13 t7bef ht41 ts12 ht82 ht6 ht31 ht02 ht72 r3rpa ht01 ht71 ht42 1yam ht8 ht51 dn22 ht92
source: IKN calcs

,
Notes:
• The data is compiled from the stats from Chile’s 19 largest mining operations that
account for 90% of the country’s total annual production. That’s to say it’s a good
database.
• It starts at the top with the 2014 C1 (i.e. mine site or operating) cash cost average for
the country of U$1.524/lb.
• Next is the first positive, “management cost cutting strategies”, defined in the report as
the reduction of workforce salaries (i.e. job losses) and better operational efficiency.
That brought down the average cash cost by 1.9c/lb in 2015.
• The second positive is “favourable market factors”, defined as forex pair benefit of the
Chilean Peso against the US Dollar and cheaper prices for fuel and energy. These
brought down the average cash cost by 18.7c/lb in 2015.
• Then the first negative, “adverse market factors”, defined as the big drop in prices for
by-products, mostly moly gold and silver, plus any planned or unplanned production
stoppage. These brought up the average cash cost by 19.8c/lb in 2015.
• The second negative is “geology”, defined as the continued drop in overall average
mined copper grades. This brought up the average cash cost by 1.5c/lb in 2015.
• The final line is the 2015 result and average C1 cash costs in Chile came in at
U$1.532/lb, some 0.8c/lb higher than in 2014.
The results surprised many market watchers and business media channels in Chile (and other
places) because the accepted wisdom (whizz dumb) was that the drop in fuel and the Peso
devaluation would make things cheaper in Chile, but the flipside of lower by-product revenues
cancelled that advantage out completely.
We move to the weekly copper warehouse inventory bullet points:
• Total world copper stocks in the three official warehouse systems dropped heavily once
14

,
again, the trend is in and set, down by another 38,986 metric tonnes (mt) (-8.3%) (and
that after losing 30,913mt the week before last), finishing up the week at 430,748mt.
• Shanghai’s drop was the big one, of course. Where all this copper is going is anyone’s
guess, to another bonded warehouse inland or to China State strategic reserves or even
to a real end user, but the downshift is now violent, check the chart below for all the
evidence you need. SHFE stocks dropped 36,122mt (-14.0%) to close at 221,212mt.
• LME stocks also dropped again modestly, underscoring the world de-stock trend by
losing 1,975mt (-1.3%) to finish Friday at 153,750mt. Trading was again light, SHEe is
where all the fun is.
• Comex stocks dropped by “1k or so” for the four thousandth week running...okay,
that’s an exaggeration but you know what I mean. This week’s exact number was
889mt (-1.6%) this weekend stocks stand at 55,786mt.
Here’s the Shanghai-only chart and the drop from the March peak has been mightily impressive.
A straight line through the chart to 2015 shows that SFHE inventory levels are now similar to
those of May 2015 (maybe a couple of weeks’ lag, but that all) and in the range of normal
again, after that massive early year surge.
Shanghai Futures Exchange Warehouse Stocks, 2014-2016
400000
350000
300000
250000
200000
150000
100000
50000
15
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 ht92
Mt Cu
source: Cochilco
As mentioned above, this has caught the
attention of the price discovery end of the
market for the first time in 2016 (and even
arguably for the first time in a year). Last
week we saw copper and the dollar index
move up together, with a subsequent
reversal in the gold/copper ratio.
That ratio could stick on the squiggly blue
line but March and April already show its
tendency to overshoot and spike lower. If
so it’s either copper going up or gold
dumping down lower. Or both, of course.
Now for comments on just one of our
basket stocks.
Nevada Copper (NCU.to): If ever a NR
said “dead in the water”, it was the one
from NCU last week that announced yet
another change to the terms of the
financing deal between it and main sponsor

,
Red Kite. RK, being the size and shape it is, can afford to play the long game. Retailers are just
seeing all value being slowly sucked away from the shares. I’d rather hold Capstone than this,
and that’s saying something.
The Low Cost Producer Basket
After 21 weeks of 2016, the Producer Basket shows a gain of 78.73% 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 19.36 16.62 125.2%
2 Newmont NEM 17.98 529.12 16.91 31.96 77.8%
3 Goldcorp GG 11.56 830.22 13.78 16.60 43.6%
4 Franco Nevada FNV 45.75 176.298 11.07 62.81 37.3%
5 Agnico Eagle AEM 26.28 217.67 9.61 44.14 68.0%
6 Ang/Ashanti AU 7.10 405.27 5.42 13.38 88.5%
7 Detour Gold DGC.to 14.41 170.85 4.30 25.15 74.5%
8 Sibanye Gold SBGL 6.09 228.71 2.64 11.53 89.3%
9 Buenaventura BVN 4.28 254.19 2.42 9.52 122.4%
10 New Gold NGD 2.32 509.89 1.90 3.73 60.8%
Prices in U$/NYSE tickers, except DGC.to (CAD$) Portfolio avg 78.73%
For the second week running, all ten
registered losses and this time the losses
were big ones. The basket average
dropped 13.24% last week and is now
down 28.81% from its high point
registered on May 1st...a better case of
that cliché “Sell in May...” is hard to
imagine. As for the benchmark tracking,
our basket was virtually unchanged
against GDX last week and still holds a
16+ point lead on the big ETF.
Low Cost Basket: Percentage difference between
basket and GDX control, 2016
5%
0%
-5%
-10%
-15%
-20%
-25%
16
ht01 ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht6 ht31 ht02 ht72 dr3rpa ht01 ht71 ht42 ts1yam ht8 ht51 dn22 ht92
The Low Cost Producer Basket: Weekly performance
130% and comparative to GDX control
110%
90%
70%
50%
30%
10%
-10%
source: ikn calcs, NYSE/Nasdaq data
New Gold (NGD): A stock with fond memories for your author, as it provided a profitable
near-term fliptrade at the start of the gold pop earlier this year, NGD got a thumbs-down from
Josh Wolfson of Dundee last week. Part of my thesis back when going long was that NGD
would be able to deliver lower capex costs for the key Rainy River project than its then budget,
but the most recent updates from the company don’t reflect that and it was one of the key
points Wolfson jumped upon in his note entitled “Swimming Upstream at Rainy River” dated
Wednesday May 25th that saw the target price for NGD dropped to CAD$4.00 and ‘Sell’ rating
dr3naj ht01 ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht6 ht31 ht02 ht72 dr3rpa ht01 ht71 ht42 ts1yam ht8 ht51 dn22 ht92
basket
gdx control
source: Google, IKN calcs

,
called (not the first time Wolfson has called sell on a stock and bucked the industry trend,
Eldorado back in January snagged him a win with the same strategy, good to see more cojones
than the average from a sellside anal yst). Here’s how he put it:
“Compared to initial capital cost guidance of $885MM in Jan 2014, May 2016 guidance
of $912MM (+3%) is relatively in line. However, updated forecasts reflect a weaker
exchange rate and the incorporation of pre-production tax inflows, which has masked a
net 35% cost increase on a constant currency basis. In addition, while half of project
spending remains outstanding, contingency has been allocated.”
Even after the heavy drop in the last two
weeks of over 20% net, NGD is still around
20% higher than that CAD$4.00 target this
weekend at CAD$4.87.
I played NGD as a short-term trade in the late
January to mid-February period and walked
away with a 43.7% (pre commish) win and
even though it went much higher later it was
my idea of a successful trade. As things stand
today I wouldn’t go back to NGD as one of the
main components of being confident enough
about going long was to be able to say “fully
funded to commercial production” at Rainy
River. That now has considerable doubt, I need no other reason to stay away.
Franco Nevada (FNV): This stock came up in a couple of disparate conversations I had last
week, so I’d like to add a word on why it’s such a good alternative for “serious money”. Yes it’s
true that FNV is the worst performing stock on our little focus group so far in 2016, having
“only” risen by 37.3% in five months (you can hear ‘em weeping at the back). But to get a
better perspective on this stock you need to consider the longer-term:
This chart neatly illustrates the blue chip nature of FNV. When things are rough in the
gold/precious metals sector (as we knew they were all through 2014 and 2015) FNV kept its
value and, percentage point here or there, managed to keep pace with the broad markets. That
left it in a better place in early 2016 when the gold and PM miner revival came and as you can
see on that chart, if you’d held through on the GDX for the last two years you’d now be
breaking even, but FNV is a 38% win. FNV also benefitted from the upsurge in gold, but its
leverage wasn’t quite as powerful as the really beaten down issues (ABX etc) due to its relative
security during the tough days. Normal stuff, but it goes to show why FNV is so attractive to Big
Money that wants precious metals exposure, it gets the downside protection of its Blue Chip
aspect without losing the upside potential of better gold prices. It’s not a stock for The IKN
17

,
Weekly, our job is a different one, but if I were running a very large fund and wanted in on
gold it would be my first stop no-brainer purchase.
Regional politics
Mexico: The “other” royalty charge
We know that mining companies in Mexico have to pay 7.5% of their operaiting EBIT as a
royalty to the State, plus another 0.5% if the operation is a a precious metals mine (which may
explain why First Majestic, Great Panther etc can’t seem to make a bottom line profit even
when they boast about the low cash costs they run these days...that’s another story). But the
other payment miners in Mexico have to keep in mind is for security, as Canada’s Ambassador
to Mexico pointed out last week when stating (4) that the average Canadian mining company
spends around 2% of its revenues on security against narco gangs, etc. He doubtless got this
information from Torex, as he was a visitor there the week before last.
Chile: Codelco reports a 1q16 loss (of sorts)
As the world’s biggest single copper producing company Codelco is a Nationalized and State-
owned entity, the way it announces its financial results is always a little different from your
classic privately owned miner. Such was the case last week when Codelco head Nelson Pizarro
announced (5) the 1q16 financial results of the company and an “excedentes” (roughly
translates as “cash left over” and is roughly equivalent to a normal company’s bottom-line net
profit) of negative U$151m. So at first sight it’s a net loss for the quarter, but it’s not quite that
simple because the “excedentes” go to the national government coffers and Codelco also paid
the government U$223m in the quarter via royalties and the Copper Law requirements, so it’s a
moot point as to whether it was a true loss or not.
What we do know is that Pizarro and his team are expecting better things from Codelco as the
year rolls out and repeated their forecast of an overall 2016 Excedentes result of +U$300m.
They also highlighted the record quarterly production of 436m tonnes, which is 11% higher
than the same period of 2015 and 6% higher than their projections, despite a slight drop in
average grade. Average cash costs (C1, or operating costs) dropped 8% to U$1.254/lb (largely
due to the record production. The company also reported copper prices 20% lower than 1q15
and moly prices (its main byproduct) 37% lower than 1q15.
Chile: Pascua Lama locals reject Barrick’s latest offer
Chile’s bizmedia source Pulso ran a story last week (6) that said locals around the Barrick (ABX)
Pascua Lama project had rejected an offer from the company to clear up the legal and
environmental mess caused. And quite right too, the deal ABX offered sucks. In essence, locals
have taken ABX to court demanding they pay the social funds that both sides agreed upon in a
previous deal. The deal dates back to 2005 and according to the plaintiffs, ABX has failed to pay
U$60m of funds agreed.
In response, ABX last Wednesday offered the locals series of payments that total U$35m,
between now and the year 2027. But the payments would also be tied to the dropping of al
previous claims and the goodwill of locals to the project from now until that date. In other
words, ABX are trying a form of cheap and legal extortion and unsurprisingly, the offer was
rejected out of hand. ABX probably thinks this is some sort of starting point for negotiations.
Colombia: That Constitutional Court ruling and what it really means
Last week, as reported on the blog in three posts (here’s one (7)), we got a ruling from the
country’s Constitutional Court that basically said that local and regional authorities (governors
and mayors) had the right to impede mining projects in their territories. The news was greeted
by wails of horror from the mining community as it envisaged a world where any
Tom/Dick/Harry local bigwig had the power of veto over them and how it would negatively
affect country political risk. In theory that sounds correct (and negative) but in practice it’s less
dramatic than that. The bullets:
18

,
1) The case was brought to the Constitutional Court (CC) by the governor of Huila region
in Central Colombia, as he(they) objected to the national government plan of building
hydroelectric power facilities in the region. The national government claimed that
according article 37 the new mining law (Código de Minas) regionals had no right of
veto on such projects.
2) Huila took them to court and last week, the CC held for Huila and against the national
government, ruling article 37 unconstitutional because it impeded the right of local
decision that is part of the country’s constitution.
3) Errr...that’s it.
In some ways this is an important ruling but in practical terms it isn’t, because it doesn’t touch
on the social licence factors that any mining project needs, nor does it consider any good/bad
relations between miner and local or regional government. In effect the ruling states that a
mining company cannot push through a project against the will of locals, but that was already
true. What it does give is a more direct weapon for anti-mining regional and local authorities to
move against a company and its project, for example this report (8) notes that the Tolima
region government, dead set against the La Colosa gold project of AngloGold Ashanti, will be
able to use this effectively. But the polemic ones aside, companies have to be in a positive
relationship with local authorities anyway because said locals already have enough laws, rules
and regulations on hand (starting with the environmental laws as seen in the February CC
ruling) to stop any project they want to stop.
In the specific case of my new position in Continental Gold (CNL.to) this isn’t a worry at all
because for good or ill, locals and regional authorities are pro-Buriticá (the gold project). In fact
there are very few mining projects that can be affected by all this. In the end it’s a storm in a
teacup, don’t listen to the Colombia doom-mongers on this one.
Colombia: Antioquia’s governor waxes lyrical
“To try to understand another human being, to
grapple for his ultimate depths, that is the
most dangerous of human endeavors.”
Irving Stone, The Agony and the Ecstasy, 1961
Luis Pérez Gutiérrez is the governor of the Antioquia region of Colombia and he gave a talk last
week to the Mining Faculty of the Colombia National University and the National Association of
Mining Engineers in which he laid out his pro-mining (and pro-Continental Gold) stance. Here
are a few quotes from the event (9):
“We will work so that mining becomes a locomotive of progress, so that it complies with
all the rules, so that between the agony and the ecstasy of mining we get the ecstasy
and not the agony that affects the (rest of the) country.”
“With the intervention (of forces of order) in Buriticá, 4,700 people who did not belong
to the zone have left. We have reached an agreement with Continental Gold for the
creation of between 1,200 and 1,500 jobs and an agreement of continuity has been
signed by the company and formalized miners (in the town of Buriticá) to guarantee
peace and security in the zone.”
He went on to say (10) that the operation to clean up Buriticá is now 64% complete, of the 111
mines that were operating without licences 52 have been closed down permanently (which
means by implication that the tunnel entrances were dynamited and then blocked) and that
prices for goods such as food had begun to normalize, down 20% from their highs.
Colombia: Close to peace
Last Friday, on the 52nd anniversary of their taking up arms against the government of
Colombia, the FARC-EP terrorist group made a impressively optimistic statement about the
progress of the peace talks between it and the Santos government of Juan Manuel Santos (11).
Among other phrases:
19

,
“The Guerrilla and the Government have never been this close to signing a definitive
cease fire on bilateral hostilities as now”.
“The happy smiles of the next generations are in our hands”.
“...(although there are some important aspects left to be agreed upon) The final
definition is on the near horizon of a few weeks or months. No human power can
impede it”.
Also interesting was the volte-face the FARC has done in regard to terrorist groups taking
political hostages. The other smaller left-wing terrorist group ELN last weekend took hostage a
Spanish journalist, one Salud Hernández, which is the type of thing the FARC used to do (and
they’d keep their hostages for years, too). This time the FARC quickly said “These practices
must stop forever in Colombia” and exhorted the smaller ELN to release the hostage. They did
so on Friday, Ms. Hernández was freed after just six days in captivity.
Peru Presidential run-off election: One week to go
Last Sunday evening PPK and Keiko went head-to-head in a live TV debate, a key moment in
the Presidential election run-off campaign, and Keiko wiped the floor with PPK. She was
polished, confident, trained, the finished product. He was good at times but also bumbling and
unsure at others, plus Keiko got in a couple of direct hits in attacks that left him without reply.
Tonight is the second and last Presidential live TV debate (that I’ll be watching as soon as this
Weekly goes out) and again without mincing words, it’s PPK’s last real chance of turning things
around. Because as the tendency of our lengthening list of voter intention poll results shows
(with the latest in bold type)...
• 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%
• DATUM May 12th: Keiko 42.3%, PPK 42.3%
• CPI May 13th: Keiko 45.8%, PPK 40.2%
• IPSOS May 15th: Keiko 44.1%, PPK 43.8%
• IPSOS May 22nd: Keiko 46.1%, PPK 41.6%
• CPI May 26th: Keiko 46%, PPK 38.9%
• GfK May 27th: Keiko 45.4%, PPK 41.6%
• IPSOS May 29th (today): Keiko 45.9%, PPK 40.4%
...the trend is definitely Keiko’s friend. If you stick that into a chart here’s what comes out:
Peru: Round 2 run-off voter intention polls, PPK vs Keiko
48%
Keiko
46%
PPK
44%
42%
40%
38%
36%
Ipsos CPI DATUM IPSOS CPI IPSOS DATUM CPI IPSOS IPSOS CPI GfK IPSOS
Apr Apr Apr Apr May 1 May 8 May 12 May 13 May 15 May 22 May 26 May 27 May 29
source: Peru media
Please note the cut-down Y-axis
I’d even go as far to say that if PPK pulls this off the pollsters will never live it down. The PPK
20

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campaign has gone very negative in the last couple of weeks and according to this weekend’s
pro-PPK media...
(Sidebar: Most Peru media channels have maintained an modest editorial
preference for PPK during the run-off, some such as the historically anti-
Fujimori La Republica group a clear preference. However the majority of TV
channels and papers such as the El Comercio ‘Papel Prensa’ group have never
really gone after Keiko. They know they may well be onto a loser if they do
and pay in the years ahead. That dilution of editorial bias has been clearer by
the week as Keiko has risen in the polls. Business is business, after all)
...their last roll of the dice is to connect Keiko to the jailed and disgraced mega-Minister of her
father, Vladimiro Montesinos, cause of the downfall of the Fujimori regime. That the Keiko
campaign has always run negative attacks is beside the point, the problem is that PPK is not
very good at being nasty and the PPK campaign is trying to beat Keiko on one of her strong
points, rather than concentrating on their own strengths. In short, PPK and his team have run a
weak campaign and helped open the door for Keiko.
Next week’s report will go out later than usual because I want to take in the first official results
from the Peru election people, scheduled for 9pm local time (10pm New York time). I’m still
fervently hoping on a personal level that PPK can turn it around in the last week and win, but
have to say that it looks as though the prediction I made in December 2015 of a Keiko win (one
ratified on several occasions since then) is about to become true. I also fear for what I’m about
to see in tonight’s debate as Keiko really did make mincemeat of PPK last weekend, a fact that
wasn’t lost on Peru’s voting public.
Argentina: The Macri government popularity wanes
The results of a survey from (12) Argentine pollster company Grupo de Opinión Público (GOP)
(Public Opinion Group), a reasonably unbiased team (who used to incur the wrath of the
Cristina government to give some idea) shows the honeymoon period of the new Macri
government waning fast.
The cover statement given to people was “It is very likely or probable that the government will
in the next year be able to...” and then seven categories as the ends of the sentence, which in
order are:
• Improve criminality/security (red)
• Create jobs (purple)
21

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• Diminish corruption (green)
• Diminish narcotrafficking (orange)
• Reduce inflation (blue)
• Diminish poverty (yellow)
• Unite Argentines (pink)
We then get the results of the survey every month, starting in December and finishing in April.
No need for a big breakdown of the chart, you can see what’s going on all by yourself but the
quote from Raúl Timerman, the director of GOP, was “The negative expectations signify a loss
of credibility in the government”. A candidate for the No Shit Sherlock Award perhaps, but he
goes on to say, “All indicators have dropped by at least 20 points (because) the population
doesn’t feel that the Macri government is interested in the problems that concern them. When it
communicates, the government says, “We’re going to do things together” but says nothing
about inflation, unemployment or crime and security”
As stated on previous occasions, watch for a drop in inflation in the second half of this year
because if it comes, Macri will enjoy a boost and FDI will start moving in to the country. It’s the
green light signal for Argentina as a destination for speculative investments and they don’t
come more speculative than junior mining in Argentina. But if inflation stays high watch out
because serious trouble will be brewing and I personally won’t be exposing my money to it.
Market Watching
Cordoba Minerals (CDB.v) is back at a buyable price
Note: This piece started life as a couple of quick paragraphs in the normal
‘Copper Basket’ comments section, I didn’t plan to go into the stock deeply
and was going to limit myself to a comment on the NR release and the price
drop. As you’ll see it got longer for its own reasons and, as a result, it’s better
placed here.
CDB has reversed quite sharply in May and the move
accelerated last week, with the drop 21.9%. Now I’m
quite sure that longs of CDB in at the start of the year
will quickly point out they’re “only 256%” so far, in
much the same way that I’m not fretting in the
slightest over the re-trace in INV Metals (INV.to) as
seen in ‘Stocks to Follow’ above. All the same, it’s a
move that’s worthy of highlighting (if, for example,
you’ve been looking for a cheaper entry point).
It came on the back of news out of the company too,
when on Thursday pre-open CDB gave us a NR
(13) that ran “Cordoba Minerals Drills 150
Metres of 1.15% Copper-Equivalent
Mineralization at the Alacran Project” with that
headline hole ACD-009 of 0.73% Cu and 0.49
g/t Au backed up by ACD-007 and its 0.48% Cu
and 0.33 g/t Au, which was no slouch either.
But as this five day chart shows CDB got no
relief from what looked at my first pass eye a
decent a positive NR and just slumped further.
To be honest CDB got shuffled to the back of
my mind last week and I didn’t think about the
stock again until Friday afternoon when a mail
22

,
arrived out the blue from CDB CEO Mario Stifano, asking if I had any questions about the new
results. That’s sharp CEO-ship in my book because if a CEO cares about little old me that way,
he’s undoubtedly chasing up with all the media and anal ysis contacts with more clout. I sent
him this reply Friday evening:
“I suppose what I'd really want to know is why you think the stock is down 16c
(21.9%) on the week? I saw the Alacran numbers and they looked okay, but I
won't BS you because I only read the NR and i haven't really looked deeply
into what they mean yet.”
And here’s what he sent back to that. I’m showing you the contents of the exchange I had
because I think this conversation is both useful and shows positive information about CDB. And
to be clear, I have edited very slightly in order to keep the conversation on-topic and also
shown CEO Stifano its contents for full approval for publication in the weekly (he was also given
right to edit if he wanted, as after all he wasn’t writing a public material piece when replying to
me and the tone can be very different).
“I can’t pretend to say I understand the markets at times. We drilled a fantastic hole of
150 metres at 0.73% Cu and 0.49 g/t Au showing that we have potentially a large Cu-
Au skarn. The Alacran mineralization is currently over 1.3 km and its clear that we are
within a big system. To the east of the main zone of Alacran we now have a 1.3 km by
800 metre Cu-Au soil anomaly. Soils were never done previously – unbelievable! This
is in addition to the porphyries in the district. Typically where you have skarns you
have large porphyries - there is a big engine feeding this district. I just got back from
site and I am reminded that we have fantastic geology but just as important we have
great infrastructure. We have roads, power and our deposit is in flat land. When you
are trying to build a mine in the mountains 40–60% of your cost could be infrastructure
related. We have all the infrastructure as there are operating open pit mines nearby. I
met individuals from the community and we have their support. When Minatura had
the project starting in 2008 (prior to me consolidating it in 2014) they had no money for
drilling. Minatura then spent years working on social and community relations (where
cordoba was recognized by the government for our work). That was a huge blessing in
disguise as those years of social work built tremendous community support for the
company and the project. “
A very good answer, I thought. He’s promotional of course (it’s his job) but the enthusiasm is
genuine and as they already have strong exploration returns this year, it’s his right to be so.
CEO Stifano also mentioned the point about the new round of drilling at Alacran, another
2,100metres being put in the ground after that first 3,000m reported. All in all a good reply and
I started feeling a little sheepish about not paying moe attention to the Thursday NR contents.
So after a closer look and bouncing some thoughts off a couple of geol friends I wrote back
with three questions. CEO Stifano then came back answers and here are the Q&As as seen:
Mark: We've seen previous drilling over the years at San Matias. What does this
tell you about the North and South ends of the hill? Also, are there holes that
haven't been published from previous programs?
CEO Mario Stifano
The San Matias project is the whole 20,000 hectare project and Alacran is located
within the San Matias project. On the Northern end of Alacran is where we drilled the
first 6 holes where there appears to be higher grade Copper. There is some faulting as
you move further North so additional drilling will work it out. On the South, there is a
topographic high and it looks like the drilling was too shallow in the south (we think
they drilled over top of the mineralization). The Alacran cross section below was
based on the Airborne magnetics and we are completing ground magnetics to increase
the accuracy (as well Typhoon is planned). In the South we see a very large magnetic
anomaly. The Alacran mineralization dips to the west, but the high grade trend is
south dipping which makes the magnetic anomaly very very interesting. HPX is
unbelievable in their expertise with geophysics – never seen anything like it. There is
13,000 metres of historical drilling that was used in the historical resource. We plan to
issue a 43-101 compliant resource during Q3. On the October 21/15 news release we
provided a lot of the historical holes.
23

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Mark: To the East is porphyry mineralization, it looks to be in dykes and pretty
narrow. Are the geophysics results different at Alacran? Will we get to see the
geophys results in the public realm at any point?
Mario Stifano
“2km east of Alacran is Costa Azul which is a porphyry. We did a small drill program at
Costa Azul in 2014 where we got 87m of 0.62% Cu and 0.51 g/t Au – great grade and
widths. Again, I think when you piece it all together on the grades and widths we are
seeing in the early days of this district, it becomes very obvious that we are onto
something special. We hit some faults at Costa Azul and stopped drilling (ran out of
money). We will be covering the area with Typhoon to work out Costa Azul. The East
soil anomaly I was referring to is just east of the main zone at Alacran (see attached).
We released the Typhoon geophysics results on April 25, 2016. We only covered the
Northern end of Alacran and we need move it South which will occur in the next phase
and it will also cover Costa Azul. Montiel East and West Porphyries were drilled (we
got 100 metres of 1% Cu and 0.65/g/t Au) but we may have just drilled the outside
limit. We will drill the Montiel area with HPX this year (details of the drill program to
follow once finalized).”
Mark: You as a company continue to refer to the project as a discovery, even
though it's been around for quite a while. Am I missing something here, isn't it
better defined as a "project" these days?
Mario Stifano
“I guess we are referring to San Matias as a discovery (which Alacran is included) as
there has been very little drilling in the 200 sqkm project area. Our intention is to not
only expand Alacran but also find the porphyries that we believe are in our district.
Even at Alacran there has been very little drilling to expand the deposit on strike to the
east/west and at at depth (our first 6 holes where in the north and they had the best
copper grades). Look at the copper and gold soil anomalies in the areas that we
covered so far in the 200 sqkm (see below). It is everywhere! Also makes it difficult as
where do you start (note Alacran soil samples was not added as it was recently
completed). We are currently doing soils in the area we call Batero where there is a
large magnetic anomaly on the South West area of the map. That is why Typhoon is
important (we only covered 7.5 sqkm of the 200 sqkm with Typhoon). Fair comment re
Alacran.
“I know it is still early days but I think we have the best exploration project out there
period. Just as important with HPX we are actually working the project rather than just
sitting pretty. It is going to take time and money to work it all out, but there is no one
better at finding tier one world class assets than Robert Friedland and his team.”
As for comment on all that:
Question one: To the positive it shows why CDB has been so keen on concentrating efforts on
the Alacran zone, where they’ve hit high grading skarn material and have enough of a handle
on the geology to chase the mineralization. I’m a little more jaded than CEO Stifano about the
absolute value of any sort of geophysics and though I’m happy about using geophys for target
generation and even willing to take somebody else’s word of the relative value of the HPX
Typhoon system compared to others, I don’t lose too much sleep when any geophysical “hot”
target is drilled but then comes up a duster. As for the question about unpublished historic
holes, that was answered as when Stifano says “a lot of” holes were published, it means that
not all of them were so there’s at least some information missing from the public realm. That’s
not a sin either of course, but we on the outside always want to know as much as possible. But
I don’t want to split hairs as I’m told they will be included in the upcoming 43-101 and I’d say
that overall, the reply given to question one was a very positive one.
Question two: Again a positive sounding answer and I like the fact CDB plans to drill again at
Costa Azul in “the next phase” (I’d guess at next year) after doing some Typhoon geophys on
it. We like it when CEOs talk of district scale mineralization of course, but we don’t know how
that part of the deposit hangs together yet and won’t do for a while. Jury out.
Question three: This was the least pressing of my questions and it was more about trying to
24

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fish for an idea of the company’s marketing stance, but it elicited an interesting response. CDB
thinks it has a very big fish on its line and that means there’s going to be a lot more exploration
and drilling on other areas of the property as time goes on. Today we’re all about Alacran,
tomorrow the exploration is likely to be on several fronts. That means extra expense of course
(which is why having someone like Friedland bankrolling things is a positive. That means extra
expense of course (which is why having someone like Friedland bankrolling things is a positive
as HPX carries the project to feasibility).
On the treasury front, CDB is in a good place right now with all bills picked up by its partner
(basically Friedland) except for its own office G&A. That’s a modest number for a small outfit so
if and when CDB goes back to market and raises it’s likely to go to the small end, perhaps
something like $2m that covers its back in 2017 and be done (unless the market starts offering
bigger deals on good terms, when the “If they offer you money, take it” Vancouver trusim
comes into play and Stifano gets to play through that mini dilemma). Not only that, we’ve
already seen a queue of people looking to buy into this story so in short, financing is not going
to be any sort of headwind this year. A little further out and possibly in play if the company
really starts to shine with drill results and such, there are still 15m warrants out with a $1.50
strike, limit date February 7th 2017. If CDB gets its mojo working and breaks over that level
(and as February and March should have taught us, nothing is impossible in junior mining)
there’s $22.5m in potential treasury there.
Conclusion: This has turned out to be a longer than expected piece on CDB this week, my
original idea was to write two paragraphs and be done but the exchange with CEO Mario
Stifano and the way in which he kindly agreed to share in this more public realm shook me out
of my torpor. So a short conclusion is in order, I think. With 86.8m shares outstanding (fully
diluted 109.1m), a share price of 57c and a consequent market cap of just under CAD$50m,
CDB is now priced in the same range as my Top Pick stock Regulus (REG.v). It’s prospectivity is
clear, we’ll need to see how the next set of drills come in but overall, this looks the right type of
price for anyone (like me) who watched as the stock shot off without them to consider an
entry. We’re not going to see anything close to 16c ever again in this stock (well, at least in the
indefinite future, you know what I mean) and if it lives up to the billing of its clearly enthusiastic
and positive CEO (who, we recall, left the CFO post at Lake Shore Gold to join this company)
there will be the same type of upside in CDB that I see in the longer-term future of REG. I’m
not going to jump in immediately, but I wouldn’t have a word against anyone who decides to
allocate some of their risk capital to this combo of better entry point and exciting prospect.
Minera IRL, the good news picking up pace
Expect more positives out of IRL this week coming. I’m still holding my tongue here and the
whole cleaning up process is taking longer than imagined (I shouldn’t have been surprised) but
give it a couple more weeks (he says...again) and I expect to be able to rip the muzzle off and
bring closer coverage of what’s going on at the company.
Conclusion
IKN368 is done, we end with bullet points:
• The volume in Regulus Resources (REG.v) was excellent and a sight for sore eyes. The
price pop looks overcooked to me (I thought it would be around 90c max and a 75c
average, so I was perhaps 15c too cool) and I expect the share price will now come
down gradually in the next couple of weeks. That’s when I’ll start to pick at more
shares, 90c and above looks too rich.
• I don’t think there have ever been three Top Picks here at The IKN Weekly before. It’s
quite nice too, could get used to it quickly.
25

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• Next week I’m adding to SAND and SAM.to because that’s what you do in a bull
market, you buy on the dips. But if you want to pay more attention to the prophets of
gold doom be my guest, I won’t stop you. After all, who am I to argue with Goldman
Sachs who wrote on March 8th, “We also maintain our bearish view on gold that has
rallied along with the other commodities” (28)?
• Buy. Hold. Win. The main point that we’re in a new bull market for gold and the
precious metals miners does not change when a couple of weeks go against you and
your portfolio. Macro level volatility is part of playing in this particular sandpit we know
as junior mining stocks, it’s the way it is.
• Please note that next week’s edition of The IKN Weekly will arrive late night Sunday
night (perhaps 11pm or 12 midnight local time), later than usual, because I want to
include the results of the Peru election run-off vote (assuming it’s clear cut by then).
And I want to watch the political TV shows on the night too, they tend to be fun. Well,
more fun than five years of Keiko in charge, anyway.
I thank you in advance for any feedback. Our Top Pick stocks are Regulus Resources (REG.v),
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
Footnotes, appendices, references, disclaimer
(1) http://finance.yahoo.com/news/tinka-increases-inferred-mineral-resources-124449906.html
(2) http://www.nevadasunrise.ca/wp-content/uploads/2016/05/NR-2016-05-16.pdf
(3) http://www.cochilco.cl/
(4) http://equilibrioinformativo.com/2016/05/inseguridad-un-alto-costo-para-la-miner-a-mexicana/
(5) http://www.aminera.com/2016/05/28/codelco-proyecta-cumplir-los-us-300-millones-excedentes-comprometidos-
2016/
(6)http://www.aminera.com/2016/05/27/agricultores-rechazan-oferta-barrick-us35-millones-destrabar-pascua-lama/
(7) http://incakolanews.blogspot.pe/2016/05/continental-gold-cnlto-and-my-final.html
(8) http://www.cronicadelquindio.com/noticia-completa-titulo-
alcaldes_del_quindo_con_facultad_de_rechazar_proyectos_mineros-seccion-la_regin-nota-99314
(9) http://www.minuto30.com/la-gobernacion-de-antioquia-se-comprometio-a-luchar-por-la-buena-mineria/477990/
(10) http://caracol.com.co/emisora/2016/05/25/medellin/1464203448_688505.html
(11) http://www.elcolombiano.com/colombia/farc-hablan-sobre-la-firma-del-acuerdo-final-para-la-paz-BF4227021
(12) http://www.letrap.com.ar/nota/2016-5-28-sube-el-humor-social-negativo-y-el-gobierno-pierde-credibilidad
(13) http://finance.yahoo.com/news/cordoba-minerals-drills-150-metres-120000284.html
(14) http://incakolanews.blogspot.pe/2016/03/the-vampire-squid-doubles-down-on-its.html
26

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Stocks To Follow Closed Positions 2015
Closed in 2015 closed close price
Argonaut Gold AR.to jan'15 C$1.47 14-dec-14 C$2.53 72.1% Big gain small time, profit taken
Amerigo Res ARG.to jan'15 C$0.405 20-jul-14 C$0.285 -29.6% Given up on weak Cu prices
Reservoir Min. RMC.v jan'15 C$6.05 18-jun-14 C$4.12 -31.9% sold on Cu downturn
Coro Mining COP.to jan'15 C$0.075 26-jan-14 C$0.035 -53.3% sm, sold on Cu downturn
Fortuna Silver FSM mar'15 U$4.12 10-nov-14 U$3.75 9.0% Short used as hedge
GoldQuest Min. GQC.v mar'15 C$0.26 27-oct-13 C$0.085 -67.3% given up ghost
Rio Alto Mining RIO.to apr'15 C$2.30 07-apr-11 C$3.57 55.2% Top pick, bot out, big win
Timmins Gold TGD jun'15 U$0.60 19-apr-15 U$0.62 3.3% near-term trade, out of time
First Majestic AG jul'15 U$10.51 10-aug-14 U$4.55 56.7% horrible failed trade
NovaCopper NCQ.to jul'15 C$1.05 09-apr-14 C$0.50 -52.4% no more Cu exposure, sm sell
McEwen Mining MUX aug'15 U$0.695 21-jul-15 U$0.92 32.4% Closed nearterm flip for win
Midas Gold MAX.to sep'15 C$0.39 21-sep-15 C$0.35 -10.3% Sm. trade idea that didn't work
New Gold NGD oct'15 U$2.18 23-aug-15 U$3.05 39.9% trade closed, profit taken
Legend Gold LGN.v nov'15 C$0.085 01-mar-15 C$0.035 -58.8% tiny "land grab" idea, failed
Timmins Gold TGD nov'15 U$0.245 20-sep-15 U$0.15 -38.8% small near-term loser
Stocks To Follow Closed Positions 2014
Closed in 2014 closed close price
Fortuna Silver FVI.to jan'14 C$2.80 23-dec-13 C$3.19 13.9% small ST trade closed
Rio Alto Mining RIO.to jan'14 C$2.06 07-jun-13 C$2.30 11.7% trading position finally closed
Network Expl. NET.v feb'14 C$0.01 22-jul-12 C$0.005 -50.0% position closed, did nothing
Tahoe Resources TAHO feb'14 U$13.10 08-apr-13 U$21.72 -65.8% short closed due to reality
Darwin Res DAR.v mar'14 C$0.10 14-jul-12 C$0.045 -55.0% tiny risk play dropped
B2Gold BTO.to mar'14 C$3.07 28-nov-12 C$3.35 9.1% closed to free up capital
Pretium Res PVG mar'14 U$5.38 22-nov-13 U$6.50 -20.8% short closed as port longer
Gold Res Corp GORO may'14 U$5.07 26-jan-14 U$4.12 16.7% took profit
Bear Creek Min BCM.v may'14 C$1.63 23-mar-14 C$2.05 25.8% Took profit, sm near-term win
Eco Oro Min. EOM.to aug'14 C$0.48 22-sep-13 C$0.26 -45.8% sold small loser to make room
True Gold TGM.v sep'14 C$0.395 02-feb-14 C$0.41 3.8% M&A won't happen, sold
Santacruz Silver SCZ.v sep'14 C$1.04 26-jan-14 C$0.86 -17.3% silver/M&A spec, rel. small
Timmins Gold TGD nov'14 U$1.38 09-apr-14 U$0.99 -28.3% failed trade, sell, raise cash
Kinross Gold KGC nov'14 U$2.90 20-oct-14 U$2.15 -25.9% V small trade, didn't work, chau
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.145 -48.2% lost China sponsor
Stocks To Follow Closed Positions 2013
Closed in 2013 closed close price
USA Graphite USGT feb'13 U$0.93 08-jan-13 U$0.17 81.7% short tgt made/trade closed
Lachlan Star LSA.to feb'13 C$1.50 30-sep-12 C$0.95 -36.7% sold to reduce port risk
United Silver USC.to mar'13 C$0.21 28-oct-12 C$0.095 -54.8% small Ag sector trade, failed
Aurcana Corp AUN.v apr'13 C$1.07 11-nov-12 C$0.55 -48.6% closed on poor YE results
Gold Res Corp GORO apr'13 U$14.11 25-jan-13 U$9.38 33.5% short tgt made/trade closed
Marlin Gold MLN.v apr'13 C$0.075 10-feb-13 C$0.065 -13.3% closed trade
Bear Creek BCM.v may'13 C$2.58 01-apr-13 C$2.40 -7.0% near-term, time ran out
Lupaka Gold LPK.to may'13 C$1.12 23-oct-11 C$0.32 -71.4% towel thrown in
Tahoe Resources TAHO may'13 U$18.62 08-apr-13 U$14.70 21.1% took profit on ST short
OceanaGold OGC.to jun'13 C$3.03 16-sep-12 C$1.18 -61.1% sold on gold drop
IMPACT Silver IPT.v jun'13 C$1.14 13-jan-13 C$0.62 -45.6% sold on silver drop
Duran Ventures DRV.v jun'13 C$0.045 10-may-13 C$0.025 -44.4% ST trade never worked
Plata Latina PLA.v jun'13 C$0.79 10-apr-12 C$0.13 -83.5% closed
Bellhaven BHV.v jun'13 C$0.065 03-jun-13 C$0.12 84.6% closed ST trade
B2Gold BTO.to aug'13 C$3.07 28-nov-12 C$3.44 12.1% sold 1/2 to raise cash
Colossus Min. CSI.to aug'13 C$0.72 24-jul-13 C$0.79 9.7% closed thru nerves on future
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Pretium Res PVG.to aug'13 C$8.20 11-jun-13 C$10.14 23.7% closed to raise cash
Bear Creek BCM.v sep'13 C$2.06 30-may-13 C$2.20 6.8% sold on pol risk decision
MAG Silver MVG oct'13 U$7.00 12-sep-13 U$5.62 19.6% near-term short
Gold Res Corp GORO oct'13 U$9.52 03-may-13 U$4.98 47.7% short tgt made, covered
AQM Copper AQM.v oct'13 C$0.31 16-oct-11 C$0.125 -59.7% closed failed trade
First Majestic AG nov'13 U$11.51 07-nov-13 U$10.50 8.8% v near term short, closed
Fortuna Silver FSM nov'13 U$4.00 07-nov-13 U$3.68 8.0% v near term short, closed
Primero PPP nov'13 U$5.70 07-nov-13 U$5.75 -0.9% v near term short, closed
Starcore Intl SAM.to nov'13 C$0.235 08-sep-13 C$0.17 -27.7% ST trade didn't work, sm loss
B2Gold BTO.to dec'13 C$2.22 28-nov-12 C$2.16 -2.7% closed ST trade to raise cash
Stocks To Follow Closed Positions, 2012
Closed in 2012 closed close PPS
Soltoro SOL.v jan'12 C$0.87 07-nov-11 C$0.94 8.0% cash moved to BCM.v
Gold-Ore Res GOZ.to feb'12 C$0.84 13-oct-10 C$0.98 16.7% trade closed on ELG.v offer
Minefinders MFN feb'12 U$11.68 17-nov-11 U$14.80 26.7% target made, trade closed
Iron Creek IRN.v mar'12 C$0.58 26-sep-10 C$0.31 -46.6% time up on small bad trade
U.S. Silver USA.to apr'12 C$2.18 15-mar-12 C$1.86 -14.7% ST trade no good, cut loss
Augusta Res. AZC.to may'12 C$3.10 29-jan-12 C$2.07 -33.2% bad mkt, bad trade cut loss
Bellhaven BHV.v may'12 C$0.50 22-sep-10 C$0.28 -44.0% new mgmt not impressive
Zincore Metals ZNC.to may'12 C$0.325 29-jul-11 C$0.17 -47.7% bad mkt, bad trade cut loss
Soltoro SOL.v may'12 C$0.70 18-mar-11 C$0.41 -41.4% bad mkt, bad trade cut loss
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% fail ST trade close pre split
Estrella Gold EST.v aug'12 C$0.91 27-mar-11 C$0.14 -84.6% Closed on port realignment
Fortuna Silver FVI.to sep'12 C$1.07 03-may-09 C$5.32 397.2% sell call $6.17/ Mar25
Strait Minerals SRD.v oct'12 C$0.125 09-dec-11 C$0.12 -4.0% closing coverage til FY13
Sunward Res SWD.to oct'12 C$1.47 13-mar-11 C$1.21 -17.7% sold, took loss
Gold Res Corp GORO oct'12 U$21.47 09-sep-12 U$17.40 19.0% Short trade closed
Yellowhead Min. YMI.to nov'12 C$1.00 01-apr-12 C$0.63 -37.0% sold, took loss
Primero Mining PPP nov'12 U$7.26 07-oct-12 U$6.73 7.3% Short trade closed
Bear Creek Min. BCM.v nov'12 C$3.38 07-nov-11 C$3.72 10.1% Took small profit
Vena Resources VEM.to dec'12 C$0.70 31-may-09 C$0.18 -74.3% Failed trade (caps F)
Galway Res GWY.v dec'12 C$2.19 24-nov-12 C$2.30 5.0% closed good ST arb trade
Stocks To Follow Closed Positions, 2011
Closed in 2011 closed close PPS
Sunward Res SWD.v jan'11 C$1.05 21-nov-10 C$1.63 55.2% target made, trade closed
Serengeti Res SIR.v mar'11 C$0.245 05-dec-10 C$0.285 16.3% sold pre-tgt, ST trade fail
Fronteer Gold FRG apr'11 U$2.37 03-may-09 U$15.24 543.0% buyout, trade closed
Minefinders MFN apr'11 U$9.09 07-nov-10 U$16.89 85.8% target made, trade closed
Metalline Min. MMG may'11 U$1.04 26-jan-11 U$0.89 -14.4% exit, resource disappointed
Peregrine Met PGM.to jul'11 C$0.87 06-mar-11 C$2.60 198.9% buyout offer, closed
Dynasty Metals DMM.to jul'11 C$4.20 03-may-09 C$2.85 -32.1% Sold. Fail. Move on.
Aura Silver AUU.v aug'11 C$0.22 13-oct-10 C$0.16 -36.4% Bad pick. Take loss
U.S. Silver USA.v aug'11 C$0.52 26-jan-11 C$0.71 36.5% closed to make room
B2Gold Corp BTO.to sep'11 C$2.80 12-may-11 C$4.27 52.5% target made, trade closed
Bear Creek Min. BCM.v sep'11 C$3.80 27-may-11 C$4.17 9.7% macro sell call victim
Minefinders MFN sep'11 U$14.70 10-aug-11 U$15.15 3.1% macro sell call victim
Great Panther GPR.to sep'11 C$3.03 22-aug-11 C$2.64 -12.9% macro sell call victim
Fortuna Silver FVI.to sep'11 C$1.07 03-may-09 C$5.36 400.9% sold 20%, macro sell call
Focus Ventures FCV.v nov'11 C$0.40 20-apr-10 C$0.20 -50.0% cut losses, bad trade
Regulus Res. REG.v dec'11 C$1.17 14-aug-11 C$0.52 -55.6% cut on news of poor 43-101
2009 and 2010 closed positions in appendices below
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Stocks To Follow Closed Positions, 2010
Closed in 2010 closed close PPS
B2Gold Corp BTO.to Jan'10 C$0.88 08-nov-09 C$1.49 68.2% target made, trade closed
Radius Gold RDU.v Jan'10 C$0.18 23-aug-09 C$0.40 122.2% target made, trade closed
MAG Silver MVG mar'10 U$5.60 23-nov-09 U$7.28 30.0% closed in pdac week
Riverside Res RRI.v mar'10 C$0.435 20-sep-09 C$0.60 37.9% closed in pdac week
Amarillo Gold AGC.v mar'10 C$0.81 31-may-09 C$0.70 -13.6% closed in pdac week
B2Gold Corp BTO.to apr'10 C$1.24 18-feb-10 C$1.50 21.0% target made, trade closed
Lumina Copper LCC.v apr'10 C$0.84 14-jun-09 C$1.55 51.2% total position now sold
Troy Resources TRY.to may'10 C$1.10 03-may-09 C$2.25 104.5% sold on negative results
AuEx Ventures XAU.to may'10 C$2.51 24-may-09 C$3.38 34.7% trade closed
Nevada Copper NCU.to jun'10 C$3.27 14-mar-10 C$2.03 -37.9% need to lower Cu exposure
Carpathian Gold CPN.to jun'10 C$0.39 14-mar-10 C$0.35 -10.3% too exposed to cap raising
Amerix PM Corp APM.v jun'10 C$0.065 08-nov-09 C$0.05 -23.1% victim of macro bear
Antares Minerals ANM.v jun'10 C$1.42 06-dec-09 C$2.10 47.9% sold half
Vena Resources VEM.to jun'10 C$0.37 31-may-09 C$0.23 -37.8% sold half
Minera Andes MAI.to sep'10 C$0.75 28-jul-10 C$0.95 26.7% ST trade closed
Gold-Ore Res GOZ.to sep'10 C$0.52 01-aug-10 C$0.75 44.2% target made, trade closed
B2Gold Corp BTO.to sep'10 C$1.45 25-may-10 C$2.01 34.5% target made, trade closed
Blue Sky Uran BSK.v oct'10 C$0.41 19-may-10 C$0.22 -46.3% v small v bad trade closed
Dia Bras Expl DIB.v oct'10 C$0.14 30-aug-09 C$0.35 150.0% target made, trade closed
S. Amer. Silver SAC.to nov'10 C$1.38 24-oct-10 C$1.60 -15.9% loss on short, small fail
Ventana Gold VEN.to nov'10 C$7.92 27-jun-10 C$13.51 70.6% trade closed on buyout
Lumina Copper LCC.v nov'10 C$1.42 11-aug-10 C$3.65 157.0% trade closed
Antares Minerals ANM.v dec'10 C$1.42 06-dec-09 C$8.40 491.5% trade closed
Rio Alto Mining RIO.v dec'10 C$0.69 23-mar-10 C$2.16 213.0% trade closed
Coro Mining COP.to dec'10 C$0.585 03-oct-10 C$1.24 112.0% target made, trade closed
Stocks To Follow Closed Positions, 2009
Closed positions closed closing PPS
Cardero Res CDY/CDU.to May'09 U$1.20 03-May-09 U$0.87 -27.5% sold on negative news
Eastmain Res. ER.to May'09 C$1.04 06-May-09 C$1.315 26.4% trade closed
Radius Gold RDU.v May'09 C$0.165 03-May-09 C$0.235 42.4% trade closed
Latin Amer Min. LAT.v May'09 C$0.12 03-May-09 C$0.158 29.2% trade closed
Aquiline Res. AQI.to July'09 C$2.03 16-Jun-09 C$1.68 -17.2% took loss, bad timing
Chariot Resources CHD.to Aug'09 C$0.20 12-Jul-09 C$0.415 107.5% trade closed
Castle Gold CSG.v Sep'09 C$0.64 02-Aug-09 C$0.60 -6.3% ST trade didn't work out
Guyana Goldfields GUY.to Sep'09 C$2.30 12-May-09 C$4.50 95.7% profit taken
Los Andes Copper LA.v Sep'09 C$0.09 21-Jun-09 C$0.09 0% trade closed
Pediment Gold PEZ.to Oct'09 C$0.80 09-Aug-09 C$1.00 25.0% trade closed
Minera Andes MAI.to Oct'09 C$0.68 03-May-09 C$0.71 4.4% too much bad news
Dynasty Metals DMM.to Nov'09 C$4.18 03-May-09 C$6.01 43.8% half sold
Rusoro Mining RML.v Nov'09 C$0.55 03-May-09 C$0.57 3.6% underperformed
Important Disclosure
The information and opinions contained within this report reflect the personal views of the author and therefore all
material within should not be construed as accurate or reliable or be utilized as advice for investment or business
purposes. Independent due diligence and discussions with ones own investment and business advisor is strongly
recommended. Accordingly, nothing in this report should be construed as offering a guarantee of the accuracy or
completeness of the information contained herein, as an offer or solicitation with respect to the purchase or sale of any
security or as an endorsement of any product or service. All opinions and estimates included in this report are subject to
change without notice. It is prohibited to copy or redistribute this report to any type of third party without the express
permission of the author.
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