IKN #372Premium

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The IKN Weekly
Week 372, June 26th 2016
Contents
This Week: Trade heads up, In today’s issue, The UK Leave result and gold, What I got right
about Brexit and what I got wrong.
Fundamental Analysis: NOBS fundamentals report on Riverside Resources (RRI.v).
Stocks to Follow: Overview, Wesdome Gold Mines (WDO.to), HudBay Minerals (HBM.to)
(HBM), B2Gold (BTO.to) (BTG), Sandstorm (SAND) (SSL.to), Starcore Intl (SAM.to), Continental
Gold (CNL.to), INV Metals (INV.to), Lara Exploration (LRA.v).
Copper Basket: Overview, Reservoir (RMC.v), Capstone (CS.to).
Low Cost Producer Basket: Overview.
Regional Politics: Guatemala: Government to fund community consulting, Ecuador won’t pay,
Brazil: Belo Sun news about no news, Peru: PPK assembling his team, Ecuador: Illegal gold
trafficking group arrested, Mexico: Excellon’s (EXN.to) potential Black swan.
Market Watching: Dalradian (DNA.to) and Brexit, Dynasty Metals & Mining (DMM.to): The
obvious about to happen, The return of “What I’d buy now”.
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
To make sure the main portfolio issue is clear, the normal top of letter heads-up. I plan to buy
some shares in Riverside Resources (RRI.v). See the main ‘Fundamentals...’ section for more.
In today’s issue
• Riverside Resources (RRI.v) offers a value entry point today and I’m going to take it, no
matter what the push-me-pull-you of gold versus equities does in the days to come.
• Copper is still in incognito mode, but the way in which it reacted as an industrial
commodity rather than a store of value on Friday is the way things should be, rather
than the way some people are trying to consider the metal these days
• The UK referendum decision to Leave the UK will have many consequences. You’re
going to be bombarded with opinions from all sides of the financial and political worlds
so The IKN Weekly will back off on the deep stuff, but today we throw out the skinny
on what it means for our main focus metal, gold (as well as a short return to just one
political angle, feel free to skip that separate section).
• But Brexit also has a small practical angle we need cover, as it is in our focus area. This
publication closed its position in Dalradian Resources (DNA.to) a couple of months ago
but for anyone left in, the call is to sell their positions. See ‘Market Watching’ for more.
1

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The UK Leave result and gold
This is the practical part of today’s intro. In short “Leave” is good for gold, we saw that in the
immediate reaction and rocket scientists are not required, but my best guess is that we’re now
at the new level for the near-term and we shouldn’t expect any extra near-term upmoves.
I’m sure you noticed what happened to gold last
week, no need for a chart here. The Leave vote is
strong for gold, mainly because 1) classic Fear
Trade buying and 2) Janet & Co over at the Fed
aren’t going to raise rates in July, September now
looks off the table and even December is priced in
at 23% according to Fed fund futures. Those things
will support gold well at its new 13-handle. The
dollar also moved higher, up to 95.5 and 96 on the
Brexit result as opposed to the typical 93 and 94
range of the days leading up to the shock. But that
move was mainly about the USD reacting to the
historic percentage drop in the British Pound (GBP),
which is 11.9% of the basket that makes up the
USD index. If you check the dollar against other
major currencies, including the Euro, the Greenback
did indeed strengthen against most (but no the
Yen, another safe haven) but the moves were
moderated. The impression is of a GBP that’s been
isolated as the problem and the cauterization process has already begun (also note how quickly
the EU leadership wants to begin the exit negotiations with the UK, they don’t want this to
fester). Therefore on a strictly strategic level we shouldn’t expect much more upside from the
USD and if that becomes so, it helps a Fed that eventually wants to raise its rates (December?).
Ultimately it’s the dollar’s development that will set the tone for gold, as although last week saw
one of the rare occasions when USD and gold move up together, they are the exception rather
than the rule and with the dust settling, normal service is bound to resume. For a start the USD
is gold’s benchmark, for another the USD is the preferred destination for flights to quality so if
the Dollar is considered safe and steady at 95 or 96, gold won’t have much more upside.
Therefore in the near term I’m adjusting my previous “between U$1,200/oz and U$1,300/oz for
gold in a quiet summer” assumption in light of the Leave market upset. The new house
assumption is a gold price between U$1,280/oz and U$1,350/oz until Labor Day,
though I strongly suspect U$1,300/oz will hold to the downside. From that point, let’s see
where things stand.
All that above is very good for mining companies and I’m feeling nicely bullish about their
prospects. You the reader are allowed to be disappointed if gold doesn’t shoot straight off to
U$1,400/oz by this time next week, then U$1,500/oz by August and then it really gets started, I
personally will be a happy guy with just a U$1.3k flatline from here to the start of 2017.
So there you go, the IKN theory on which I’ll approach what may not turn out to be a wild week
after all, though under present circumstances it’s worth considering other people’s theories
about other subjects, such as Miss Anne Elk on dinosaurs (1):
“All brontosauruses are thin at one end, much much thicker in the middle and
then thin again at the far end....that is my theory, it is mine and belongs to
me, and I own it and what it is, too”.
With thanks to Monty Python’s Flying Circus for that quote, it may turn out to be just as useful
for your life as my pet roadmap for gold prices.
2

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What I got right about Brexit and what I got wrong
An easy list to put together:
What I got right
• Being nicely long the precious metals miners
• Not trading around the vote
• Bonus prize: Short HBM
What I got wrong
• Everything else.
In other words my worst (best?) ever case of being right for the wrong reasons, though it must
be stated clearly that my person’s perennially poor political prognostications are becoming a
bad habit. I call Scioli for the Argentina election, Macri wins. I call Keiko for the Peru election,
PPK nicks it. And now the worst mistake of the lot so far, my exuding of arrogant confidence
about The UK voting to Remain, when the result was a worldshaker Leave. Therefore, due to
my ‘unblemished by success’ track record, for the rest of the year I’m not going to opine on any
upcoming campaigns, which means that first and foremost I’m going to keep my mouth firmly
shut for the US election.
And now with the political mea culpa done, if you’re fed up with the whole Brexit subject feel
free to look away and skip the next half page, you won’t be missing much if you do. To return
to the Leave result for a moment (in the same way one scratches a mosquito bite, today on a
different tack), after making reference on the blog Friday (2) to political and social historical
events in mainland Europe in the 1930’s, Godwin’s Law indeed kicked in and I was rightly
kicked by a few mailers. I take my kickings when deserved, but a couple of you got this reply:
“Ok, if you prefer it framed more diplomatically, this is part of the general rise
of populist parties which is clearly a long-term negative. Same thing.”
This is not a question of left or right wing politics, as both extremes bring forth some very
unsavoury characters and historical mistakes. Neither is it a problem confined to Perfidious
Albion, as here in this comparatively tranquil neck of the woods known as South America
populism it’s all too common. Questions arising:
• How long the Macri government will be able to stave off Argentina’s Peronist
culture (which is neither left nor right, but a better example of populism is
difficult to imagine)?
• Who will be able to replace Maduro in Venezuela when (not if) he falls, but
also the more difficult one of combatting his PSUV party?
• What type of hard right backlash we’ll see from the Álvaro Uribe end of
Colombian politics now that the FARC ceasefire is a signed document?
• What should we make of the long-delayed rise of an organized and
“electable” left wing in Peru, happening around Veronika Mendoza?
• Will we see Chile’s tendency to right wing populism, now actively rejected by
its new generation, cause clashes far worse than anything seen in the Piñera
administration?
Those and more, all without straying North of the Darien Gap. Populism is another reason why
owning gold is a good idea going forward, just not quite as immediate as influence such as the
Fed rates decisions, or the UK Article 50 fun to come.
I could continue, but there comes a point where The IKN Weekly strays off its focus too far and
for too long. In the end, all this is just another minor brain with its dos centavos and waffling
on about matters that are for others to decide. That will do for today, let’s get on with some
junior mining stock talk.
3

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Fundamental Analysis of Mining Stocks
Today we take on Riverside Resources (RRI.v).
NOBS report dated June 26th, 2016
Riverside Resources Inc. (RRI.v)
Company Overview
Riverside Resources Inc. (Canada: RRI.v, Frankfurt R99.f) is an exploration stage junior mining
company operating mainly in Mexico. It follows the ‘prospect generator’ model, looking to move
forward on several early stage exploration properties and then attract partners to fund and
develop the projects. Current share structure is as follows:
Shares out: 37.372m
Options: 3.237m
Warrants: zero
Fully diluted shares: 40.609m
Current share price: C$0.305
Market Cap: C$11.4m
Approx working cap per S/O: C$0.10
All prices are in Canadian Dollars unless stated. Forex U$0.80=CAD$1
NB: As Riverside Resources reports in Canadian Dollars, the Loonie is used as default
currency in today’s note.
Overview
The essence of today’s anal ysis of RRI is one of the most straightforward I’ve written for a long
time. We cover the basic nuts and bolts of the company and its management team, talk a little
about its properties and projects, cover its financials and how the company ticks, all the usual
stuff. But I won’t kid you on, I could strip it all away and still make the case for buying this stock
this weekend as all you really need to know are these three lines:
• It’s a good company that does good work.
• It’s well run by peer-respected, honest people who have shareholders as a top priority.
• It’s very cheap in the current market deck and ripe for a re-rating.
Yes it’s a serious company and above all its president and CEO Jean-Mark Staude is a quality
guy, as good as they come in this rat-infested world we know as junior mining. But the one thing
that really matters is the last line; compare it any way you want and in this market, RRI.v is a dirt
cheap stock, it’s only a matter of time before its share price goes higher to better reflect the true
value of this asset-rich junior. That’s all I have for you, a stock which we can buy low and sell
high. As a result this one isn’t going to be a long blahblah note, so on with the show.
Management and shareholders
RRI is headed up by President and CEO Jean-Mark Staude, an experienced geologist who is
highly-regarded by peers and basically runs the whole shop. The only other salaried offer is
CFO Robert Scott, other officers come and go on a regular basis (we just lost the VP
Exploration, but Staude can and does cover all those duties as part of his normal daily work life)
and directors get paid in options to oversee the structure. Jean-Mark Staude (JMS) owns 1.36m
shares (3.6% of the total), all other insiders another 800,000 aggregated.
4

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As for other major holders, they are mainly instos and are headed up by Sprott Global who own
approx 13.5% (and have been adding in the last couple of months via the open market). Then
come Adrian Day Asset Management (approx 6%), Stephens Investment Management (approx
6%), Peter Schiff’s Euro Pacific Gold Fund (2.5%...glad it’s not more because they’re rather
scammy), Frank Holmes’ U.S. Global Investors (2.5%), Trimark Capital (approx 1.5%) and
Kinross (K.to) (KGC) with 1.5%. Add those up and nearly 40% of shares are off the table. That’s
okay. As for skin in the game, the officers and insiders don’t have tons of shares but as this
company is very much the Jean-Mark Staude show and he has a large part of his net wealth
sunk into the company, that’s good enough for us.
The skinny on the prospect generator model
RRI is a prospect generator and The IKN Weekly audience should have a good idea of what
that entails, but just to make sure:
1) Use geological expertise and local knowledge to acquire promising, early stage
concession areas.
2) Explore and develop properties to the stage where promising targets are generated.
3) Get a third party to buy into the project and develop it further. This will typically be an
optioning deal where the prospect generator such as RRI gets cash, or shares, and/or a
free ride on development in exchange for handing over a large percentage of the project
to its partner.
The idea is to have plenty of properties, plenty of JVs developing those properties at zero cost
to your company and that by having fingers in plenty of pies, it only takes one of them to hit the
bigtime for the company to become a winner. There are several prospect generator companies
on the TSX(V) and over the years they’ve enjoyed varying degrees of success. The ones that
make it ar those that hit a bona fide discovery and get rich as their partner develops a hot
prospect, a classic example being Reservoir Minerals (ex-RMC.v) and its Timok property, which
has just been sold to Nevsun and made its early backers a hatful.
There is a downside to this, of course. A prospect generator spreads the risk, but if it options out
what turns out to be a hot property, it doesn’t get all the reward. There are wrinkles to this one,
such as how a third party can bring in the type of expertise that the owner company doesn’t
have, but just to keep it theoretical we can imagine what Reservoir would have been worth if it
had owned 100% of Timok the day it was sold, instead of just 30%.
The other aspect of the prospect generator is that, in theory at least, by keeping its overheads
low and doing deals along the way it doesn’t need to go to market every so often and raise
more working capital via share placement deals. When the model works correctly, it keeps the
share structure from bloating and blowing out and we shareholders don’t see their ratio of
ownership diluted away. That’s the theory and the good prospect generators deliver on that idea
too, one of the ways to spot a good one is to check how many (or how few) shares it has
emitted and added over the years. That also means that if the company hits a home run (or gets
one hit for it by one of the third parties on its team) the shareholders on board fully benefit from
the upside.
Those are the main points to the model and it’ll do, it’s now time to get specific on RRI
Operations
Riverside Resources has the bulk of its property book in Mexico and in fact, markets itself as a
Mexico specialist with a deep database on the country that helps it identify prospective terrain.
This map comes from its latest corporate presentation and while on the subject, I strongly
encourage you to go check out said presentation on the RRI website (3). It’s just been updated
and as well as hosting this map in better resolution, has a whole lot more info on RRI. I’ll make
no bones and have no secrets about today’s anal ysis, the basic background into has been
scraped from the corporate literature and re-worded as RRI does a good job of summarizing
what they’re up to and the reasons I’m a buyer of this stock isn’t some sort of secret sauce; this
time it’s a case of buying a value position low, selling it higher, the end.
5

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So to business and as you can see (probably, typeset is small) RRI has several things going on.
Two 100% owned porphyry copper projects in BC, Canada, Flute and Lennac.
An exploration agreement with Antofagasta (ANTO.L). the Chilean copper company, on a large
area of Northern Mexico (mainly Sonora State).
Several 100% owned exploration properties in Mexico: First we list Glor (gold), Clemente
(silver/gold), Ariel (copper), Teco (copper) and La Silla (gold/silver). Next is the Peñoles
property in Durango, that’s still technically under option to Morro Bay Resources (MRB.v) but as
that junior has lapsed on its obligations RRI is currently in the process of getting the property
back and will soon officially have 100% ownership again. This one has a 43-101 to its name,
too. Then comes the Thor property, which is a fruit of the alliance with ANTO and is set to be
drilled later this year.
The Sugarloaf Peak gold project in AZ, USA. This was optioned out 100% to a private
company, Croesus Gold, and recently RRI has closed a sale on the property with its partner.
RRI’s interest in this project is now its 6m shares of Croesus and a 2% NSR on the project.
The Tajitos/Tejo/Cortez gold/silver project in Mexico, currently under option to Centerra
Gold (CG.to), the near-$2Bn market capper. Less problems about CG lapsing on its end of the
deal, I’d imagine.
To sum up, RRI currently has deals with two large public mining companies that are developing
two specific properties, as well as giving RRI the chance to explore Sonora free of charge. It’s
closed a deal with a private company on one of its properties for shares plus an NSR, then it
has a book of assets waiting for a partner. In a perfect world, most or even all of the 100%
owned projects would be out on option deals, as that way the JV company pays for their upkeep
etc and RRI keeps its treasury position healthy. As things stand today RRI is in full control of a
lot of its generated targets because (if you needed reminding) we’ve just come out the back end
of a prolonged bearish period for the mining sector there has been little interest in spending
cash on exploration. With the market now picking up, we’d expect RRI to be able to score new
deals on its asset book and getting new rounds of exploration work done on them using Other
People’s Money (OPM).
6

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Financials overview
With the brief overview of properties done, we move to the brief overview of company financials
starting with balance sheet
items. I’m going to try to keep
this brief too, today’s really isn’t
a complicated story (as you’ll
see). Step forward a selection
of usual suspect company
charts.
Here’s the Assets chart, which
shows a general decline on the
amount the company is worth
on paper over the quarters and
years. There are three main
reasons for this;
1) RRI has burned cash along the way and hasn’t topped up meaningfully via a share
placement for a long long time.
2) RRI doesn’t capitalize expenditures, so cash put into a project doesn’t suddenly appear
as a fixed asset credit.
3) RRI regularly writes down and/or impairs its asset book. It keeps its fixed asset value as
low as is practically possible, there’s no artificial padding or leaving in a big ticket piece
of land to make things look far better than they are. RRI has gone as far as to write
down to zero the 6m shares it recently received from Croesus, a private mining
company, as part of the sale terms of its Sugarloaf project.
In other words, at first sight you might RRI: Cash and ST investments
not be so very impressed with a 7 (liquidity)
company that has only $6m in total 6
assets on board but that’s just you, I 5
really appreciate the lean way in which 4
RRI goes about its book-keeping. 3
That’s a good chart above. 2
1
This second chart separates the 0
business end of the above assets, cash
and short-term investments, for a closer
look. RRI had some maintenance bills
to pay at the end of its financial year,
plus it was bidding for new concession areas in Mexico and that costs some too. But we see
how the company has kept its treasury in good shape all this time and even now, with nearly
$4m at hand, it has more than enough for everything it wants to so in this year and beyond. The
figures we’re bandying about aren’t multi-millionaire stuff, they’re the numbers a small explorer
needs to do its job. RRI takes a lot of care over its cash drawer, a policy that pays off in the
long-term by keeping the share
count tight (see below).
Another good chart is this one right,
liabilities. RRI carries zero long-term
and as of this quarter just gone, less
than 200k in near-term matter
(basically normal run of company
stuff). This is an optimum situation
for a balance sheet
Stick those two parts together and
out pops working capital and in this
chart, I’ve extrapolated four quarters
out to show how I consider the
7
31.peS 31.ceD 41.raM 41.nuJ 41.peS 41.ceD 51.raM 51.nuJ 51.peS 51.ceD 61.raM
RRI: assets 14
12
10
8
6
4
2
0
CAD$m
ST invest
cash
source: company filings
31.ceD 41.raM 41.nuJ 41.peS 41.ceD 51.raM 51.nuJ 51.peS 51.ceD 61.raM tse61.nuJ
$m fixed
ST invest
other st
cash
source: company filings
RRI: Liabilities
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
31.peS 31.ceD 41.raM 41.nuJ 41.peS 41.ceD 51.raM 51.nuJ 51.peS 51.ceD 61.raM
$m
source: company filings, IKN ests

,
liquidity in RRI will look a year or so from now:
RRI: Working capital
7
6
5
4
3
2
1
0
8
31.peS 31.ceD 41.raM 41.nuJ 41.peS 41.ceD 51.raM 51.nuJ 51.peS 51.ceD 61.raM tse61.nuJ tse61.peS tse61.ceD tse71.raM
$m
source: company filings, IKN ests
In simple terms, RRI is in fine shape and we shouldn’t worry about any sort of dilutive
placement at the current share price, these guys have kept it tight over time and will keep doing
just that. On the subject, share count looks like this. One of the key elements of the prospect
generator model is keeping the share count
low, not going to market for top-up cash,
getting funds for working capital from deals
struck and so forth. On this count RRI does a
stellar job and as good as you could possibly
wish for in this type of junior. The last time any
amount of shares worth mentioning were
added (i.e. aside from exercised options) was
the 1.5m shares way back in the March 2013
quarter. Since then the count has basically
flatlined, it was 37m at the end of 2013 and it’s
37.3m here in the middle of 2016. This means
that any sort of re-rating of its mineral asset
book, be it from a general sector re-rating of
“what earth is worth” to a drill discovery of
merit from a partner, will be reflected in full in its share price.
If you only want one reason to love RRI as a potential trade it’s this one, that chart you see
above. They care about the share structure and that means you and I, the retail, just a fair throw
of the dice along with the insiders.
Moving to the P+L items and quarterly operations numbers. We already know that cash burn is
low at the company, here’s a little more on that via the main operating expenses:
RRI: Expenditures breakdown
0.7 (ex-impairments/write downs)
0.6
0.5
0.4
0.3
0.2
0.1
0
-0.1 31.ceD 41.raM 41.nuJ 41.peS 41.ceD 51.raM 51.nuJ 51.peS 51.ceD 61.raM
RRI: Shares outstanding
50
45
40
35
30
25
20
15
10
5
0
$m
share based payments
rent
other
office exp.
source: company filings, IKN ests
Aside from the odd quarter such as March 2014 where we saw incentive options handed out,
we see that the cash burn at RRI fluctuates between $200k and $400k per quarter. That’s
crazily cheap, it’s as low as one can imagine for any mining company even if it had shuttered
right down and merely sitting on its hands and doing nothing. Here at RRI the company is out
getting deals done, looking for new prospects and developing those already on its books, as
21q3 21q4 31q1 31q2 31.peS 31.ceD 41.raM 41.nuJ 41.peS 41.ceD 51.raM 51.nuJ 51.peS 51.ceD 61.raM
m S/O
source: company filings/IKN ests

,
well as receiving results from JV partners. If it were just the
You could say that RRI is run on a shoestring and that would be fair comment, as if you look
down the list of line items, things such as office rental space around ($50k/qtr) or office G&A
(which used to be $30k/quarter but now bounces between $12k and $24k) are the largest single
items in the list, not the smallest. But it’s not really that, it’s more the case that Jean-Mark
Staude is tight. In fact he’s famously tight-fisted and known in the sector for cutting costs at any
or every turn. There are no five star hotels on stays (I’ve heard tell of analyst site visits that get
dormitory bunk beds), no business class flights, no frills and no fancy at RRI. Costs are cut to
the core and as a result, the company gets to maintain its healthy cash and treasury position
just on the deals it does. And even when it goes through a prolonged period of depressed
market conditions, there are no rounds of financings that blow out the share structure. This of
course makes him unpopular in Howe St and Bay St, they want companies that raise cash via
placements and offer commissions to brokerages, scratching back that scratch them in return.
There, in a nutshell, is why the mainstream of the Canadian mining world has nary a word to
say about RRI.
Summing up so far
The adjective that best describes Jean-Mark Staude’s prospect generator RRI is “tight”:
• Its share structure is tight
• Its financials are tight
• Its CEO is tight.
But coupled with that penny-pinching attitude to excess is a dynamic company that goes about
business and does deals, this isn’t a company that’s battened down hatches through the bad
times, this is one that’s out there working and that shows in its extensive asset book, along with
larger partners like ANTO and CG. You get a lot of value for money from this structure and
that’s one of the reason to like the stock today.
But the main one is its share price, because it’s dirt cheap.
The investment case
And now, the most straightforward investment thesis I’ve ever used in the Weekly. We like RRI
because it’s a well run company with a proven model, prospective land assets, professional
people, right attitude to shareholders etc. We also like Lara Exploration for the very same
reasons. Another prospect generator that’s stood the test of time, headed up by a smart one in
Miles Thompson, a well run company with the same proven model, its own prospective land
assets, professional people and right attitude to shareholders, the same nine yards.
LRA and RRI have a lot in common, including the way they specialize in one area of the world
(RRI Mexico, LRA Brazil and Peru). As you might imagine, over the years they’ve performed
similarly on the ebbs and flows of the stock market too, as you can see in this ten year chart
below. Right up to the last few weeks:
9

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These stocks have been close performance matches until very recently, when suddenly LRA
has shot much higher than RRI. The main reason is stock commentators, with the move in LRA
started by Byron King of Agora and then recently complemented by the Sprott tema who’ve got
on the same bandwagon and have pushed the stock higher. Even with the big spike up then
down we saw last week (see ‘Market Watching’ below), LRA has put in a massive move, one
we can better see in this 12 month comparative of the same two stocks:
Yes of course RRI has had a decent rebound along the way as well. It has doubled from its
January 2016 15c to the current 30c and that’s nothing to sniff at.
But Lara Exploration in the same time put in its double, then from late March doubled again
even if we completely discount the spike we saw to $1.30 last week, just this weekend’s 98c so
close is more than enough. That in straight line terms would point to an RRI capable of moving
up to 60c
And that, in a nutshell, is why I’m buying RRI next week. We’ve seen a market that after years
of slow grind has finally turned around and is willing to give junior mining fixed assets a
reasonable equity value. LRA has seen that support, but as things stand today RRI hasn’t felt
the same pop. It’s only a matter of time before more people see how RRI has lagged its field
and there’s no real reason for that any longer. LRA’s recent move shows there is appetite for
the prospect generator model as long as the company is a well-run and reputable outfit. RRI
has shown itself to be the equal to LRA
over the years and I want to buy some
shares before it gets its re-rating, rather
than during or after.
The IKN Weekly recommends
Riverside Resources RRI.v) as a
speculative buy and sets a price
target of 50c on the stock,
representing an upside of 63.9% to
this weekend’s close of 30.5c. This is a
simple one, RRI has got good land and
does its job right, it will play catch-up to
its peers before too long. When it does
I’ll sell my shares that I bought cheaply
in the week ahead.
End of Report
10

,
Stocks to Follow
Of the eleven positions open last weekend six registered gains (BTO.to, SAND, WDO.to, CNL.to,
LRA.v, HBM short), one stayed unchanged (FCV.v) and four were losers (REG.v, SAM.to, TK.v,
INV.to) and of all that lot the only one I felt disappointment with was SAM.to, which failed to
catch much of a bid on gold’s pop Friday (the market was frying larger fish, it seems). The
combo of watching your largest long position move up 10% (BTO) while your only short moved
down 10% (HBM) made the fallout from the UK Leave vote a lot easier to swallow.
We currently have eleven open positions on the list, four fewer than our self-imposed maximum
of fifteen at any given time. Nine are in the green and just two, the legacy bagholds of Focus
and Lara, 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$3.12 47.9% New tgt C$2.96
Regulus Res REG.v hold C$0.64 06-apr-15 C$1.25 95.3% Long-term exploreco top pick
Starcore Intl SAM.to STR buy C$0.59 10-jan-15 C$0.80 35.6% Top Pick 2016, $1.26 tgt
Long positions (in current order of preference)
Sandstorm Gold SAND STR buy U$3.80 17-apr-16 U$4.83 27.1% A buy on FY16 re-rating
Tinka Res TK.v buy C$0.195 19-apr-16 C$0.23 17.9% Top value Zn/Sn/Ag stock
Wesdome Gold WDO.to STR buy C$1.90 22-may-16 C$2.04 7.4% new trade, M&A target
Continental Gold CNL.to buy C$2.68 22-may-16 C$3.34 24.6% new near-term trade $4.80 tgt
INV Metals INV.to hold C$0.25 03-apr-16 C$0.52 108.0% Close to exit on pfs news
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.98 -14.8% solid biz model
Focus Ventures FCV.v hold C$0.23 01-jul-12 C$0.08 -65.2% financing sept next hurdle
Short positions
HudBay Min. HBM short U$4.98 09-jun-16 U$4.60 7.6% re-shorting, near-term trade
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
Nevada Sunrise NEV.v may-16 C$0.185 28-feb-16 C$0.23 24.3% V. small, no big deal either way
Richmont RIC jun-16 U$7.60 01-may-16 U$9.30 22.4% near-term trade, profit taken
2009, 2010, 2011, 2012, 2013, 2014 and 2015 closed positions in appendices below
Now for some notes on current basket stocks.
Wesdome Gold Mines (WDO.to): WDO did very well last week, even though I got a mail on
Friday wondering why it wasn’t moving up like a rocket along with peer stocks. That’s probably
because WDO is on its own agenda now, I’d call it fully valued compared to peers as long as no
buyout offer comes along so ceteris paribus (starting with UNCH on gold price) I’d expect WDO
to remain at-or-around $2 until the KGI fun starts. And it will.
In other news, I learned a little more about the atmosphere inside KGI before Ogilvie left and
11

,
Makuch was named successor. Apparently (these things are always going to be anecdotal so
forgiveness is begged a priori, but my source is a good one) there was no love lost between
Eric Sprott and George Ogilvie, plus contrary to the smooth and harmonious looking image at
KGI Ogilvie was particularly disliked by several key members of the company. Therefore when
Tom Stanley came to Sprott with his plan to take over WDO and Ogilvie was against the idea,
Sprott saw the chance of killing two birds with one stone and putting in someone who would
run the company to order, rather than oppose the executive chair on general strategy.
All this would potential weaken the thesis for Stanley’s impending move on WDO if it weren’t for
“The Middlemiss Factor” and the way in which Stanley changed his position on his appointment
from June 9th to June 14th. Middlemiss is the direct connection to Makuch, via the previous
SAS.to deal. That’s solid evidence and aside from the fact that my intel is solid and Stanley is
indeed set on wresting control away from the current WDO board.
So yes, fret not, this buyout action will begin sooner or later and the only issue is when. I’d
expect that talks on reaching a potential friendly deal (the preferred option of those inside the
boardrooms, of course) are already underway so until those are exhausted, we’re not going to
get any hostile move. If and when that happens, our best case for share price appreciation
would be a bidding war and it hasn’t escaped the attention of a couple of insightful IKN readers
that Richmont (RIC) are in the right position today. For a start that have strong and expensive
paper, for another the geography makes sense, for another WDO management may want a
White Knight, for another the “from hunted to hunter” move would shore them up against any
further overtures from the Tahoe Resources’ of this world. Just a thought.
HudBay Minerals (HBM) (HBM.to):
Seeing HBM sink on Friday was a sight
for sore eyes. Since the end of the big
sell-off period for HBM in the first half of
2015, we’ve seen the stock try to rally
and hold the U$5 level four times and
four times it’s failed. And as this chart
demonstrates, every time it breaks down
it goes under U$4 again.
We don’t know what the price of copper
will do in the meantime so I’ll be keeping
an eye on that, but there’s no need to
even think about this near-term shorting
position until the stock drops under U$4.
B2Gold (BTO.to) (BTG): Of all the stocks covered here, Top Pick (and largest personal
position) BTO did the best from the Friday
fun and games, powering higher by over
12% on the day, with strong 13m volume
in Canada
As well as 7m on its US BTG ticker, both
of those over 2X average volumes. Fine
stuff and the type of reaction we’d want
from a market leader.
In other potentially less positive news,
insider selling goes on at BTO with last
week another 330,000 options held by
insiders with a $1.12 strike price exercised
and liquidated (4):
12

,
This Canadian insider chart (rather than the list of usual suspect names this time) shows how
those red crosses have stacked up in the last few months (the green crosses being the
exercised options to fuel the cashing out of shares). We note the peppering of the stock price
line with red crosses since the middle of May (expect a big non-cash line item in the 2q16
financials to take away from operating profits) but we should also note a more basic thing; the
selling hasn’t stopped BTO from moving higher. For sure I’m not a fan of this type of wholesale
and serial cashing-in, but we can mitigate the BTO sellers by saying that this isn’t the first time
they’ve done this, in fact it was a regular occurrance back in the days of the previous gold bull
run thru to 2013. It didn’t stop the share price from moving higher back then, either.
Sandstorm Gold (SAND) (SSL.to): SAND
continues to trade like a champ and has re-
rated quickly through the 4-handle numbers,
my U$5.50 target price is starting to show on
the horizon and today it’s a case of not
touching any dials, happy holder and all that.
We could get fundies news from SAND in the
week to come. Thursday is June 30th and the
end of the quarter and on the last day of 1q16
SAND gave us a preliminary sales NR for the
period then closing. If that March 31st NR is a
new corporate policy rather than just a one-off,
news may be upon us. We’ll see.
Starcore Intl (SAM.to): Last Tuesday saw negative news of a fatal accident at the SAM San
Martin mine in Mexico (5), though we
commend the company for the way in which
it handled things, including doing and saying
the right sympathetic things for the family
affected, immediate disclosure of the event
to the market and noting that the mine’s
operations continue with no shutdown on
this occasion.
Mining is a dangerous way to make a living,
period. We the investor need to make
allowances for that, but the red flags should
also be unfurled if fatal accidents are a
recurring problem at a company or mine
13

,
rather than a one-off (see Great Panther Silver for more on this). SAM gets a pass on last
week’s event but I wouldn’t want to see another one.
Continental Gold (CNL.to): CNL traded very nicely again, especially on Brexit Friday. What
with all the loud noise it’s probably not the time to apply cold, calm technicals but it’s worth
noting that Friday’s close is the highest share price for CNL since October 2015 and beats out
the price peaks seen in mid-2015 when Ari Sussman was promising the earth and permits to
the lapdog sellside brokerages.
Two pieces of news from CNL-land. First from inside the company which announced on
Wednesday (6) that René Marion had resigned as a director “for personal reasons”. IKN can
reveal that those personal reasons are that he’s sick of the sight of Ari Sussman (and I’m not
joking). Now that’s okay as far as me and my trade is concerned, I don’t care a dot about the
Canadian end and any corporate friction at HQ, what matters for me is the Colombian
permitting track and that is apparently in better hands. And I repeat, I’m not going to be
around for any capex financing or even eventual sale of the project to a third party, the trade
here is a fixed plan that’s all about the permitting of Buriticá; once that happens, I sell and take
my profit, cheerily waving goodbye and wishing those left in the bst of luck.
The other news comes from a report in Colombia’s independent political/current affairs website
La Silla Vacia last week. In Spanish language and written by Jaime Arteaga, an well-regarded
expert in development issues in Colombia (he runs his own specialist company on such matters
and his CV includes working for USAID for eight years). This extensive, longform first-hand
witness report (7) is an excellent snapshot of how things have improved on the ground at
Buriticá, both for locals and politically. Arteaga knew Buriticá before the current clean-up
operation and last week visited again. Although too long to quote correctly here without missing
issues out, his report is a real before/after account and very positive on the current state and
future of the town. Even if Spanish is not your strong point, I highly recommend that you read
the report via Google translate or some-such.
INV Metals (INV.to): Another soft week and INV traded under 50c again, saved by the Brexit
bell from a worse weekly loss. We await the PFS, which accoring to its very latest corporate
presentation (8) dated June 14th 2016 is still expected at “end of Q2/2016”. That means this
week if their word is good, so a final reminder that the plan here has always been to sell into
this news and ensuing liquidity. On this one a decision to sell will come with a Flash update, I
won’t sell mine before telling you.
Lara Exploration (LRA.v): On
Thursday and for half of Friday the
almost unthinkable happened: My
position in LRA, held for years as an
object lesson in bad bagholding, went
into the green. Then suddenly somebody
liquidated something over 300,000
shares at any price available and it was
all wiped away. Frankly I can’t blame
them, whoever it was, because the run
enjoyed by LRA since it was highlighted
by Agora’s Byron King (who’s nobody’s
idea of a sharp pencil when it comes to
juniors, check all the Pershing Gold
silliness (9) for more) has been
impressive. Not out of the question fundies-wise either (see today’s RRI note for more), but
$1.20 and $1.30 was starting to look seriously overbought for a single movement. I’m okay
about this overall and my patience with LRA is well-documented, so I’ll just keep on plugging on
with this hold. I expect it will flatten out around its current Loonie level in the medium term, it
certainly deserves a breather.
14

,
The Copper Basket
After twenty-five weeks of 2016, The Copper Basket shows a 58.26% gain to level stakes.
company ticker price 1/1/16 Shares out Market Cap current pps gain/loss%
1 HudBay Min. HBM.to 5.31 235.23 1406.68 5.98 12.6%
2 Ivanhoe Mines IVN.to 0.61 778.96 755.59 0.97 59.0%
3 Reservoir Min. RMC.v 4.08 48.69 449.41 9.23 126.2%
4 Capstone Min. CS.to 0.44 382.04 267.43 0.70 59.1%
5 NGEx Resources NGQ.to 0.65 205.06 190.71 0.93 43.1%
6 Western Copper WRN.to 0.38 94.19 91.36 0.97 155.3%
7 NovaCopper NCQ.to 0.395 104.33 64.68 0.62 57.0%
8 Copper Mtn CUM.to 0.445 118.8 57.02 0.48 7.9%
9 Cordoba Min. CDB.v 0.16 86.86 53.85 0.62 287.5%
10 Copper Fox CUU.v 0.125 417.64 50.12 0.12 -4.0%
11 Nevada Copper NCU.to 0.66 80.5 47.50 0.59 -10.6%
12 Atico Mining ATY.v 0.28 97.59 45.87 0.47 67.9%
13 Amerigo Res ARG.to 0.205 173.61 27.78 0.16 -22.0%
14 Hot Chili Ltd HCH.ax 0.09 445.723 24.96 0.056 -37.8%
15 Revelo Res. RVL.v 0.055 99.19 9.42 0.095 72.7%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg 58.26%
The basket average lost just under 2% on the
The Copper Basket 2016, weekly evolution
week, with five winners (IVN.to, CS.to, 100%
CUM.to, WRN.to, ARG.to), six losers (HBM.to, 80%
RMC.v, NGQ.to, NCU.to, HCH.ax, CDB.v), and
60%
four unchanged stocks (CUU.v, NCQ.to, ATY.v,
40%
RVL.v). There were no stocks that put in
double figure percentage moves, interesting in 20%
its own way. 0%
-20%
The UK Leave vote had less effect on the
minnow end of the copper world than most
other sectors, but did hit the larger names
such as HudBay hard. The overall week’s result
was also dictated by the rise and adjustment in
the price of copper, the two movements largely
cancelling each other out on a weekly basis
(though we wait to see if the last day negativity
feeds through to next week’s trading). Futures
trading in copper reached U$2.17/lb on
sustained buying through the week, dropped to
U$2.07/lb in the semi-panic first stages of
Friday, recovering to U$2.11/lb at the close.
Theoretically, copper would be one of the least
affected trading vehicles from the mess that
Cameron made, its price driver ultimately a
world away in China. I get the feeling the hike
in inventory numbers predicted for July will be a
greater influence than anything a small island
can achieve. Now for the weekly copper
warehouse inventory bullets:
• Total world copper stocks in the three official warehouse systems moved down last
week by 13,190 metric tonnes (mt) (-3.2%). Stock movements were calmer. The world
15
dr3naj ht01 ht71 ht42 ts13 t7bef ht41 ts12 ht82 ht6 ht31 ht02 ht72 r3rpa ht01 ht71 ht42 1yam ht8 ht51 dn22 ht92 ht5nuj ht21 ht91 ht62
source: IKN calcs

,
total stands at 402,681mt.
• Shanghai’s drop was the biggest in percentage terms, down 10,870mt (-6.5%) to finish
Friday at 155,235mt. However, signals are starting to appear that we’re reaching the
bottom of the SHFE drawdown.
• LME stocks dropped a small-ish 3,550mt (-1.8%) to finish the week at 192,375mt. A
quiet week for London copper movements, the country probably had other things on its
mind.
• Comex stocks rose for the first time in many weeks, adding 1,230mt (+2.3%)to
inventories and finishing Friday at 55,071mt.
Here’s the Shanghai-only chart which shows the continued de-stocking but with signs that the
rhythm is slowing and the process may be coming to an end.
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 ht92 ht91
Mt Cu
source: Cochilco
Now for notes on a couple of basket stocks.
Reservoir Minerals (RMC.v): The sale to Nevsun (NSU) was wrapped up and closed last
week on schedule, which means that RMC is only going to trade remnants from now on. I’ve
thought about replacing RMC with NSU in the list but in the end I’m just going to freeze the
stock as per (the way we used to in The Copper Baskets of yore, when juniors got bought out
quite regularly) and leave it to sit for the rest of the year.
Capstone (CS.to): I saw a research note out last week that called CS a buy (with a C$1.00
target) after consultations with the company. The main positive is that CS is now very confident
about its liquidity levels and it’s not going to fall under any covenant threholds this year. Well,
we knew that one already! CS wouldn’t have placed the ‘costless’ (ha ha) collars on its
production in order to collar IN a cash crunch and the weakness in this stock is of the chronic
variety, 2017 and onwards is where the financial strain is more likely to be felt. Until then CS
can be considered a copper leverage gamble vehicle I suppose, but it’s way way too risky for a
guy like me who cares about balance sheets instead of whistling past them, graveyard style.
As a few of you know, I’ve considered shorting CS as an alternative or complement to the
current HBM short position. The problem is more about the practical side than the theoretical,
it’s just so much easier for a retail guy like me to short on the NYSE.
The Low Cost Producer Basket
After 25 weeks of 2016, the Producer Basket shows a gain of 113.31% 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 23.84 20.47 177.4%
2 Newmont NEM 17.98 529.12 19.68 37.19 106.8%
3 Goldcorp GG 11.56 830.22 15.26 18.38 59.0%
4 Franco Nevada FNV 45.75 176.298 12.77 72.43 58.3%
5 Agnico Eagle AEM 26.28 217.67 11.33 52.03 98.0%
6 Ang/Ashanti AU 7.10 405.27 6.80 16.77 136.2%
7 Detour Gold DGC.to 14.41 170.85 5.58 32.67 126.7%
8 Sibanye Gold SBGL 6.09 228.71 3.00 13.11 115.3%
9 Buenaventura BVN 4.28 254.19 2.88 11.32 164.5%
10 New Gold NGD 2.32 509.89 2.26 4.43 90.9%
Prices in U$/NYSE tickers, except DGC.to (CAD$) Portfolio avg 113.31%
All ten went up last week, none of them
went up by 10%, the best move came
from Detour (DGC.to up 8.8%) as it got
the double whammy benefit of being the
Canadian Loonie gold producer as both
gold and the US Dollar strengthened.
Our basket added distance against the
GDX benchmark last week, mainly
because it has smaller names as equal
weightings and those got a bigger boost
on Brexit Friday. ABX and GG were
underperformers that day, AEM wasn’t
great shakes either.
Low Cost Basket: Percentage difference between
basket and GDX control, 2016
5%
0%
-5%
-10%
-15%
-20%
-25%
17
ht01 ht71 ht42 ts13 ht7bef ht41 ts12 ht82 ht6 ht31 ht02 ht72 dr3rpa ht01 ht71 ht42 ts1yam ht8 ht51 dn22 ht92 ht5nuj ht21 ht91 ht62
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
Regional politics
We run our quarterly Regional Risk Review next week, until then some snippets and stories
from across LatAm.
Guatemala: Government to fund community consulting
The Jimmy Morales government last week announced (10) it had earmarked Q1.27m (U$166k
approx) to fund four prior consultancy commissions for civil works project in the country in the
next 12 months. That may not seem like a lot of money and in government terms it isn’t, but
what is interesting is the precedent it sets. Guatemala is a adherent of the OIT169 international
covenant that requires the permission of indigenous locals for large civil works projects in their
localities, such as hydroelectric power stations, mines etc. Up to today Guatemala has ignored
its obligations under this ruling and gone ahead with granting permits to companies (such as
Goldcorp and Tahoe Resources) without the necessary prior consultancy period done. Last
dr3naj ht01 ht71 ht42 ts13 t7bef ht41 ts12 ht82 ht6 ht31 ht02 ht72 r3rpa ht01 ht71 ht42 1yam ht8 ht51 dn22 ht92 ht5nuj ht21 ht91 ht62
basket
gdx control
source: Google, IKN calcs

,
week’s move is a tacit admission by a new administration that it needs such consultancies for
valid permits and campaigners against mining operation in the country, people such as the
permanent thorn in the side of Tahoe Resources, CALAS, say that it brings them an extra legal
weapon in their fight to close down the mine via the courtrooms.
Ecuador won’t pay
On June 1st Copper Mesa (formerly Ascendant Copper) announced (11) that it had won a little
over $24.3m via an industrial tribunal ruling in the international courts of The Hague,
Netherlands, against the State of Ecuador that stemmed from the time when it was called
Ascendant Copper and it owned the Intag property in the country. The case was opened nearly
five years ago and the ruling was handed down late last month.
What they didn’t mention is that they sued the State for $69m. And now we note that Ecuador
has appealed even this reduced award (12), stating that there is reason not to pay due to the
way in which the company acted while owners of the concessions.
Brazil: Belo Sun news about no news
There’s nothing new in the Belo Sun (BSX.to) Volta Grande story as such, the permitting track is
still ostensibly on hold and the regional Pará government has made no type of formal
declaration recently, but what I’m suddenly reading are a whole series of Portuguese language
articles and reports coming from Brazil about the project, designed for a non-sector audience in
Brazil and nearly always critical in tone of the project. Here’s one in a socio-environmental
website (13) which is one of the better on facts, but the editorial line leaves little in disguise.
But they are sometimes the type of reports written by reporters who don’t understand much
about the subject (one of the classics is confusing the tonnage of rock removed with the
tonnage of gold produced (14) as in this report). Finally, they’re all written by different people
but the content are nearly always identical, ticking off the owners, the regional government, the
dam upstream, the indigenous, the pollution angle, mentioning cyanide, the tailings dam wall
that was signed off by the same man who signed off on the collapsed Samarco dam, the locals’
concerns, etc. The uptick in number of Belo Sun coverage reports is significant, up to around
three weeks ago the whole issue was on radio silence, just this week I’ve read five different
notes.
Conclusion: There’s a blueprint for Anti-Belo Sun news reports doing the rounds, which strongly
suggests an organized campaign against the project and its permitting process is now
underway in Brazil, most likely promoted by locals against the project along with environmental
groups. I continue to cal avoid on this company stock, risk is off-scale high.
Peru: PPK assembling his team
President-Elect Pedro Pablo Kuczynski (he gets to be official prez-elect this Tuesday when he
goes and signs a few pieces of paper, then the hand-over comes at the end of July) hasn’t
made much noise regarding his team of ministers to take over from the Humala administration
yet, aside from confirming Alfredo Thorne as his FinMin (mentioned a couple of weeks ago) and
saying that he has his likely team assembled, with an announcement expected July 10th latest.
However, when it comes to mining it’s worth a word that we know of course who the country’s
Vice-President is because he was on the PPK ticket. This recent interview (15) with (the highly
regarded) Victor Gobitz, head of big local miner Milpo, made an interesting point on this. Here’s
that section of the Q&A translated:
El Comercio: How do you take the fact that the new Vice-President is the ex-Governor
of Moquegua region Martín Vizcarra, who resolved a social conflict at the Quellaveco
mining project (in his region)?
Victor Gobitz: It’s positive. Vizcarra is an engineer who studied Civil Engineering at
the National University of Engineers (UNI), this is the main point of reference. As
governor of Moquegua he understands mining projects and has the experience to
manage and reach agreements, putting forward the points of view of both the mining
18

,
company and the communities.
That’s a good point. One of the issues in the Humala government has been the tone-deaf
nature of its management of miner/community matters, as you often see the Mining Ministry
doing one thing, the Environment or Social Inclusion Ministries doing another and no
communication between the two sides at an executive level. Let’s consider Vizcarra in at Veep
to be a tentative positive for the mining industry at this point.
Ecuador: Illegal gold trafficking group arrested
This is a story that broke last weekend while I was writing up IKN371 and what with my myopia
on Wesdome and its issues I didn’t catch it at the time. It’s newsworthy enough for space this
weekend.
On June 17th authorities in Ecuador raided 21 houses, arrested seven people and confiscated
goods and cash to the value of U$8m from a band of alleged (I stick that word in there, though
it’s almost certainly unnecessary in this case) illegal gold traffickers operating in the country.
The event made for plenty of news in Ecuador (examples (16) (17) (18) Ecuador’s Vice-Minister
of the Interior, one Diego Fuentes, led the press conferences and explained that two local
companies had been buying illegally mined gold since 2013, then exporting it to refineries in
The USA. The value of the gold exported is estimated at U$500m and it apparently mostly
comes from the illegal mining operations in Peru (Madre de Dios etc), entering Ecuador frm the
Southern border before being shipped out. The two companies sold their gold to three
refineries in the United States, namely MVP Imports LLS, Kaloti Metals and Logistics LLC and
Republic Metals Corporation. A couple of interesting matters arise:
There has been hardly a word about this big Ecuadorian operation in Peru. That might sound
strange until one realizes just how much influence the illegal gold mine operators hold in Peru.
Also there has to this time complete radio silence in The USA and North, I’ve seen no English
language reports of note about this.
I know that at least one of those refineries, Kaloti, has a very poor reputation for its bona fides
in the world of gold. When Minera IRL was being strangled by the idiot Daryl Hodges in 2015,
the local Minera IRL SA company headed by Diego Benavides couldn’t find a buyer for its gold
from Corihuarmi. This was part of the nefarious Hodges plan to starve IRL SA of cash and cause
the company’s bankruptcy and luckily it didn’t work because IRL Sa found a willing buyer in
Kaloti. IRL SA only sold to Kaloti once and only due to the extreme circumstances of its position
but when it did it got a new range of accusations levelled against it by the scumbags in IRL Ltd
in Canada.
Mexico: Excellon’s (EXN.to) potential black swan
Here’s a political risk possible that affects a singe company, one that we rarely mention on
these pages (I don’t like it much which shows how stupid I am, it’s up mountains in 2016).
The problem stems back to 2008, when Excellon Resources (EXN.to) signed a deal with the
local landowners (ejido) at its project in Mexico to explore and develop on 11,000 hectares of
land. All was in order until 2011 when locals (who were already griping about the relationship)
accused EXN of developing on land that was not part of the agreement. Since then there has
been a court case going on and continual bad blood between the two sides (roadblocks from
time to time etc) which may or may not be interesting but now we cut to the present day.
According to local reports (19) we’re about to get a definitive judgment on the case from the
Mexico upper courts and if it goes against EXN, they could be slapped with anything from a
very large fine to a suspension of their operations. There’s no way of knowing exactly when the
verdict will be delivered, but best estimates from those close to the story are August this year.
Heads up complete.
19

,
Market Watching
Dalradian (DNA.to) and Brexit
Fallout from the UK’s decision to vote Leave last week will come in all shapes and sizes. In the
great scheme of things what follows here is a tinysmall consequence compared to the massive
issues now on the table such as EU membership, the new political leaders of parties in the UK,
et cetera and so forth. But it is our focus subject and we’re also talking about a company we’ve
covered on these pages as well as traded (with reasonable success too), Dalradian Resources
(DNA.to). Though small, this is a practical
consequence of the Brexit vote and our field
of interest, so here goes.
It's way too early to be dramatic about the
future of Northern Ireland and the
ramifications from the Brexit vote result are
only starting to show. Therefore I am not
talking about clear negatives such as a
return to hard borders between North and
South, the vote for a reunification of Ireland
(though Sinn Fein will push that agenda as
from tomorrow in the Irish parliament, it's
the party's basic raison d'etre after all), a
split from the UK nor even more stressful
things such as troops on the ground to quell any resumption of sectarianism (the
Catholic/Protestant issues of the country aren't counted in decades but in centuries, yes things
are much better now but multi-generational conflicts can be tough to extinguish completely).
I am not considering any of the potential bad cases, for Northern Ireland in general or
Dalradian specifically as they are too far in the future to consider seriously for a junior mining
company investment. However we must be clear, what this does do is add a significant amount
of political uncertainly to business investment in Northern Ireland and that includes DNA. In our
focus company's case it's worse, as right now DNA is on the permitting track and in the period
when it wants political and authority certainty, from which it goes to market to raise capital (or
sells to the highest bidder). Who will be governing the land in two years' time? In five? That's
the timescale a mining project such as Curraghinalt needs. What will the laws be? Will
previously awarded permits be recognized? Will local grievances become louder? What will the
exchange rate be for the pay of workers at the mine? How much tax will the company pay? A
hundred other unknowns have suddenly shown their head above the parapet. The Curraghinalt
deposit and project is one thing, but its political situation has suddenly taken a turn for the
worse. The IKN Weekly's recommendation is to avoid exposure to Dalradian
Resources (DNA.to) until such time as the political future of Northern Ireland is better
understood. Yes, that means sell if you still own shares and as a post-script, that call goes for
other Northern Ireland exposed companies such as Galantas Gold (GAL.v). Even in a best case
situation DNA (and GAL and others) aren’t going to benefit as much from the safe haven
interest in gold as other juniors, transferring any cash from these to other similar stocks
working other countries is a simple and practical call.
Dynasty Metals & Mining (DMM.to): The obvious about to happen
Fair warning: If you own any Dynasty Metals & Mining (DMM.to) shares, or if any of your
friends, family or anyone else you come across does, you all have a month to get out of the
stock. Following on from our last update on the stock (which was on the blog dated June 15th
(20) IKN can confirm that the two funds run by Vertex that loaned a total of $4m to DMM have
run out of patience with the company. In the rearranged deal, DMM has to pay back to Vertex a
little under $600k per month, for eight consecutive months at the end of each month starting in
July 29th, in order to comply with the terms of the renegotiated deal. Vertex hopes that DMM
will be able to make the first couple of payments, isn’t even sure about that but it is now clear
that the moment DMM goes into default on the terms, Vertex is going to call in its loan and that
20

,
will be the end of DMM as we know it.
Yes DMM is asset-rich and has some potentially interesting properties on its books, but don’t
confuse that with the orderly queue that will appear when some type of bankruptcy protection
is place on the stock; equity holders come at the back of that one. Those of you up for big risks
might want to buy a few DMM after the Chap11 (or equivalent) order comes into effect. It
won’t be for me (way too risky), though gamblers among this audience might want to have
your fun. But not until then, run away fast from DMM, it’s all over bar the shouting now.
The return of “What I’d buy now”
Back in IKN369, four weeks ago, I ran a short piece in Market Watching which was a mix of
thought experiment and a way to convey “what I like now” in my own portfolio, considering the
state of the market, the company particulars and their shares prices at that point. I called it
“What I’d buy now” and from the feedback received that week, it went down well with quite a
few of you (though I did get a bit of dissent as well). The idea was to convey my personal
thoughts in the very near term about the stocks we cover and the framework was this:
1) You give me $50,000.
2) You tell me I have to invest every dollar in currently open stocks.
3) I’m allowed to allot different dollar amounts to different stock, from zero on up.
4) I base my decisions, choices and dollar amounts on what I think today about the
company, the stock price and the current underlying micro and macro fundamentals.
5) You know that I like all the stocks because you know I already own them, we both
understand answers are about how I feel today.
I then published my ideas of stocks and cash weightings. So here we are one month later (well,
four weeks, you know what I mean) so let’s catch up on that table and how the calls have got
on in the time period. Here’s the newly extended table with the original bits on the left and the
results as per this weekend on the right:
Mark spends his theoretical $50,000 in IKN369 Mark's $50k in IKN372
company ticker PPS IKN369 amount invested IKN369 PPS today position value
B2Gold BTO.to C$2.64 12000 C$3.12 14182
Sandstorm Gold SAND U$3.99 10000 U$4.83 12105
Tinka Res TK.v C$0.22 8000 C$0.23 8364
Starcore Intl SAM.to C$0.80 7000 C$0.80 7000
Regulus Res REG.v C$0.95 5000 C$1.25 6579
Continental Gold CNL.to C$2.61 5000 C$3.34 6398
Richmont RIC U$8.18 2000 U$9.30 2274
Lara Expl. LRA.v C$0.89 1000 C$0.98 1101
INV Metals INV.to C$0.65 0 C$0.52 0
Focus Ventures FCV.v C$0.085 0 C$0.08 0
Total $50,000 NEW TOTAL--> $58,003
In other words, in four weeks I’ve managed to change my theoretical $50k into $58.003, a 16%
profit. Now that might not strike you as much but I think that’s one helluva good return for a
weighted portfolio in such a short space of time. The only licence I gave myself was to take my
own closing price for RIC, instead of this weekend’s price, which I think fair. I also think a lot of
it was luck, as for example the only two basket stocks with net losses during the period, INV.to
and FCV.v, were the ones in which I allocated zero bucks.
That was then and this is now: With the experiment turning out to be reasonably
successful, plus the way in which the IKN369 segment was generally well-received by you the
readership, let’s try again by updating the list with the new components of the ‘Stocks to
Follow’ list (i.e. no RIC, WDO.do and HBM short added) and then putting a new and fresh $50k
to work (I’m not rolling on the $58k, this is a simple thought experiment and not some new-
fangled fund initiative). Just one thing; I decided not to include RRI.v in the list because it may
21

,
pop artificially tomorrow...depending on the market of course. Notes below.
Mark spends $50,000 in IKN372
company ticker current PPS amount I'd invest today
Wesdome WDO.to C$2.04 $8,000
Tinka Res TK.v C$0.23 $7,000
Starcore Intl SAM.to C$0.80 $6,000
HudBay Short HBM U$4.60 $5,000
Sandstorm Gold SAND U$4.83 $5,000
Regulus Res REG.v C$1.25 $5,000
Continental Gold CNL.to C$3.34 $5,000
B2Gold BTO.to C$3.12 $5,000
Lara Expl. LRA.v C$0.98 $2,000
INV Metals INV.to C$0.52 $2,000
Focus Ventures FCV.v C$0.08 0
Total $50,000
This time the weighting is more evenly spread. Top position goes to the newly established
Wesdome, because I think it has a real shot of going under offer (from KGI or other) in the
weeks to come. I’ve moved the weightings of BTO and SAND down a fair amount for the simple
reason that they’ve performed well and may be at or close to a consolidation point. Sticking a
fair amount on the HBM short gives the mix some hedging. Finally, INV gets a couple of grand
this time because it’s dropped and the PFS should come soon, but FCV still doesn’t appeal.
I’ll come back in another four weeks (maybe five) and see how that little lot has performed.
Conclusion
IKN372 is done, we end with bullet points:
• Riverside Resources (RRI.v) is the right type of extension to my current portfolio, a
strong and well-run company with undervalued land assets, we’ve seen its peers
revalue and it will soon be its turn. The time to buy is now.
• The UK Leave vote result has put the cat among the pigeons in no uncertain terms and
we’ll see any number of consequences from the shockwaves. For our purposes we’ll
focus on gold and things look good there, but the DNA piece shows we can’t take
individual stock stories for granted.
• I’m still bearish on copper until otherwise proven and the new level of economic
uncertainty isn’t going to help the metal’s cause. Shorting HBM is a good way to play it,
but if you have the opportunity and access via your Canadian brokerage a short on
Capstone (CS.to) would fit well, too.
• Here’s something I wrote the the closing bullets of IKN371 last week; “This time next
week the Brexit vote will be behind us and the financial and political worlds will be
quieter and more pleasant as a result, no matter who wins”. I’m repeating it just to
show how stupid I can be at times. That’s worth your reflection, too.
• Buy. Hold. Win.
I thank you in advance for any feedback. Our Top Pick stocks are Regulus (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. Namaste.
Mark
22

,
Footnotes, appendices, references, disclaimer
(1)https://en.wikipedia.org/wiki/Anne_Elk%27s_Theory_on_Brontosauruses
(2) http://incakolanews.blogspot.pe/2016/06/reader-lj-is-long-standing-reader-of.html
(3) http://www.rivres.com/images/presentation/RRI_Corporate_Presentation_Spring-Summer_2016.pdf
(4) https://www.canadianinsider.com/company?ticker=BTO
(5) http://finance.yahoo.com/news/starcore-regrets-report-fatality-san-030457386.html
(6)http://finance.yahoo.com/news/continental-gold-announces-resignation-director-184302600.html
(7) http://lasillavacia.com/silla-llena/red-de-la-paz/historia/ayer-estuve-en-buritica-56238
(8) http://www.invmetals.com/investor-resources/presentations/
(9) http://incakolanews.blogspot.pe/2016/06/byron-king-of-agora-calls-sell-on.html
(10) http://elperiodico.com.gt/2016/06/25/opinion/la-consulta-a-los-pueblos-indigenas/
(11) http://www.sedar.com/DisplayProfile.do?lang=EN&issuerType=03&issuerNo=00022376
(12) http://mineriaenlinea.com/blog/2016/06/23/ecuador-pide-anular-laudo-a-favor-minera-canadiense/
(13) https://www.socioambiental.org/pt-br/noticias-socioambientais/belo-sun-and-the-seven-errors-game-that-may-once-
and-for-all-do-in-the-big-bend-of-the-xingu-river
(14) http://br.blastingnews.com/ambiente/2016/06/nova-corrida-pelo-ouro-no-para-a-previsao-e-de-impactos-
socioambientais-irreversiveis-00961923.html
(15) http://www.aminera.com/2016/06/26/peru-milpo-bueno-vicepresidente-conoce-la-mineria/
(16) http://www.eltelegrafo.com.ec/noticias/judicial/13/operativo-desarticula-red-transnacional-de-lavado-de-activos-y-
contrabando-de-oro
(17) http://www.eltiempo.com.ec/noticias-cuenca/185778-en-prisia-n-siete-presuntos-integrantes-de-banda/
(18) http://www.eluniverso.com/noticias/2016/06/17/nota/5640486/ecuador-anuncia-desarticulacion-red-lavado-activos-
exportacion-oro
(19) http://www.yancuic.com/ejido-de-durango-tiende-la-mano-a-minera-y-esta-se-toma-el-pie-inicia-exploracion-sin-
contrato
(20) http://incakolanews.blogspot.pe/2016/06/dynasty-metals-mining-dmmto-is.html
Stocks To Follow Closed Positions 2015
Closed in 2015 closed close price
Argonaut Gold AR.to jan'15 C$1.47 14-dec-14 C$2.53 72.1% Big gain small time, profit taken
Amerigo Res ARG.to jan'15 C$0.405 20-jul-14 C$0.285 -29.6% Given up on weak Cu prices
Reservoir Min. RMC.v jan'15 C$6.05 18-jun-14 C$4.12 -31.9% sold on Cu downturn
Coro Mining COP.to jan'15 C$0.075 26-jan-14 C$0.035 -53.3% sm, sold on Cu downturn
Fortuna Silver FSM mar'15 U$4.12 10-nov-14 U$3.75 9.0% Short used as hedge
GoldQuest Min. GQC.v mar'15 C$0.26 27-oct-13 C$0.085 -67.3% given up ghost
Rio Alto Mining RIO.to apr'15 C$2.30 07-apr-11 C$3.57 55.2% Top pick, bot out, big win
Timmins Gold TGD jun'15 U$0.60 19-apr-15 U$0.62 3.3% near-term trade, out of time
First Majestic AG jul'15 U$10.51 10-aug-14 U$4.55 56.7% horrible failed trade
NovaCopper NCQ.to jul'15 C$1.05 09-apr-14 C$0.50 -52.4% no more Cu exposure, sm sell
McEwen Mining MUX aug'15 U$0.695 21-jul-15 U$0.92 32.4% Closed nearterm flip for win
Midas Gold MAX.to sep'15 C$0.39 21-sep-15 C$0.35 -10.3% Sm. trade idea that didn't work
New Gold NGD oct'15 U$2.18 23-aug-15 U$3.05 39.9% trade closed, profit taken
Legend Gold LGN.v nov'15 C$0.085 01-mar-15 C$0.035 -58.8% tiny "land grab" idea, failed
Timmins Gold TGD nov'15 U$0.245 20-sep-15 U$0.15 -38.8% small near-term loser
23

,
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
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
24

,
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
25

,
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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