IKN #373Premium

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The IKN Weekly
Week 373, June 26th 2016
Contents
This Week: Trade heads up, In today’s issue, Gold and silver moving well now.
Fundamental Analysis: NOBS fundamentals report on Miranda Gold (MAD.v).
Stocks to Follow: Overview, Miranda Gold (MAD.v), Riverside Resources (RRI.v), Wesdome
Gold Mines (WDO.to), HudBay Minerals (HBM) (HBM.to), B2Gold (BTO.to) (BTG), Sandstorm
Gold (SAND) (SSL.to), Continental Gold (CNL.to), INV Metals (INV.to), Lara Exploration (LRA.v),
Tinka Resources (TK.v).
Copper Basket: Overview, Capstone (CS.to).
Low Cost Producer Basket: Overview, Goldcorp (GG), Barrick (ABX).
Regional Politics: Regional Risk Review.
Market Watching: Goldman Sachs on the China metals market, Minera IRL: Step by step,
Asanko Gold (AKG): Its short attack and the company response.
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
I’m going to buy some Miranda Gold (MAD.v) next week, all the details in the NOBS report in
the main fundies section today. Not your usual rationale for a trade here at IKN, either. Well,
except for the Buy Low Sell High bit of course.
In today’s issue
• It’s a MAD world and I’m a buyer of Miranda Gold (MAD.v) because it’s about to be
pumped to the mouthbreather end of the market. Greater fool theory in operation, your
author gets cynical and buys a few shares of something about to be bought on a pump
job. It’s nothing personal, it’s capitalism baby.
• There are a lot of words in this week’s edition, most are mine but some are extracts
from things written by smarter people. I know these long-waffling editions don’t go
down well with some of you, but sometimes I just find there’s a lot to get down in
order to get across. It won’t be a habit.
• I’m not decided yet, but I may be on the wrong side of my HBM short and copper
trade. Having bought well (or better) it’s not a dramatic situation but if inventories don’t
rise as expected in July it will be time to step out the way of this one.
• The Regional Review does its sweeping eye thing, the most interesting country in
LatAm this quarter is again Argentina because its progress under the new Macri
government is being over-estimated by the outside world. Méfiez-vous.
• It’s a bull market, so be a bull market player.
1

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Gold and silver moving well now
For my taste and judgment there was a changing up of gears in the precious metals market on
Thursday and Friday (though the Canadian equities didn’t get to benefit from the biggest day
for gold and silver what with July 1st falling where it
did, that market gets to have its big fun tomorrow
July 4th). Gold and silver now look in the grip of real
speculative momentum. Here’s the gold price chart
but I won’t bother you with the silver one, even
though it was the better performer of the two and
managed to fulfill my prediction for 2016 that dates
from over six months ago (1):
2) Silver to rally against gold and the
gold/silver ratio will finally break under 70/1.
It's been that high since October 2014 but I think
it could be better for the poor relation metal in the
year ahead. However and the same as last year, I
still much prefer gold mining stocks to silver
mining stocks as the goldies have much more
chance of making real profits.
Hindsight makes it sounds easy to have called gold
to beat U$1,250/oz and for the gold/silver ratio to
make the number, does it not? Therefore I don’t mind blowing my trumpet just a little bit and
telling this audience that on the day I made that call, December 27th 2015, gold was
U$1,068/oz, the gold/silver ratio stood at 75.2X (then went a lot higher) and I got a lot of flak
and mockery delivered to my mailbox for the ten predictions made that day (though I admit
this...
9) England to win the Euro 16 European Football Championships.
...wasn’t my best of the ten, ask the country of Iceland for more details). To paraphrase Nigel
Farage, they’re not laughing now.
So what’s happening? Well in fact your guess is as good as mine when the momentum starts
running our way; it could be Brexit, Hillary/Trump, Fed, Bildebergs, massive short covering of
precious metal that doesn’t exist in Fort Knox, the oogabooga scary man or The Rapture for all
I know. Or even more wildly the tyros at King World News may be right for once. But what I do
know is that Gary Tanashian over at NFTRH (1a) dialled me into the right literature last week,
Reminiscences of a Stock Operator, a book I’ve read a few times over the years and one that
Gary’s been quoting recently. Specifically the character known as Old Turkey and for a change
(though, I hasten to add, not merely to fill space cheaply) I’m going to add a page to this
edition with an extensive quote, not just a single sentence. I’ve tried to condense it as much as
possible by de-spacing the dialogue lines, but it’s all there and I hope you take time to read the
excerpt, it’s by far the smartest prose in this week’s edition:
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
In Fullerton’s there were the usual crowd. All grades! Well, there was one old chap who was not like the others. To
begin with, he was a much older man. Another thing was that he never volunteered advice and never bragged of his
winnings. He was a great hand for listening very attentively to the others. He did not seem very keen to get tips that is,
he never asked the talkers what they’d heard or what they knew. But when somebody gave him one he always thanked
the tipster very politely. Sometimes he thanked the tipster again when the tip turned out O.K. But if it went wrong he
never whined, so that nobody could tell whether he followed it or let it slide by. It was a legend of the office that the old
jigger was rich and could swing quite a line. But he wasn’t donating much to the firm in the way of commissions; at least
not that anyone could see. His name was Partridge, but they nicknamed him Turkey behind his back, because he was
so thick-chested and had a habit of strutting about the various rooms, with the point of his chin resting on his breast.
The customers, who were all eager to be shoved and forced into doing things so as to lay the blame for failure on
others, used to go to old Partridge and tell him what some friend of a friend of an insider had advised them to do in a
certain stock. They would tell him what they had not done with the tip so he would tell them what they ought to do. But
whether the tip they had was to buy or to sell, the old chap’s answer was always the same.
The customer would finish the tale of his perplexity and then ask: “What do you think I ought to do?” Old Turkey would
2

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cock his head to one side, contemplate his fellow customer with a fatherly smile, and finally he would say very
impressively, “You know, it’s a bull market!” Time and again I heard him say, “Well, this is a bull market, you know!” as
though he were giving to you a priceless talisman wrapped up in a million-dollar accident insurance policy. And of
course I did not get his meaning.
One day a fellow named Elmer Harwood rushed into the office, wrote out an order and gave it to the clerk. Then he
rushed over to where Mr. Partridge was listening politely to John Fanning’s story of the time he overheard Keene give
an order to one of his brokers and all that John made was a measly three points on a hundred shares and of course the
stock had to go up twenty-four points in three days right after John sold out. It was at least the fourth time that John had
told him that tale of woe, but old Turkey was smiling as sympathetically as if it was the first time he heard it.
Well, Elmer made for the old man and, without a word of apology to John Fanning, told Turkey, “Mr. Partridge, I have
just sold my Climax Motors. My people say the market is entitled to a reaction and that I’ll be able to buy it back
cheaper. So you’d better do likewise. That is, if you’ve still got yours.” Elmer looked suspiciously at the man to whom he
had given the original tip to buy. The amateur, or gratuitous, tipster always thinks he owns the receiver of his tip body
and soul, even before he knows how the tip is going to turn out. “Yes, Mr. Harwood, I still have it. Of course!” said
Turkey gratefully. It was nice of Elmer to think of the old chap. “Well, now is the time to take your profit and get in again
on the next dip,” said Elmer, as if he had just made out the deposit slip for the old man. Failing to perceive enthusiastic
gratitude in the beneficiary’s face Elmer went on: “I have just sold every share I owned!”
From his voice and manner you would have conservatively estimated it at ten thousand shares. But Mr. Partridge shook
his head regretfully and whined, “No! No! I can’t do that!” “What?” yelled Elmer. “I simply can’t!” said Mr. Partridge. He
was in great trouble. “Didn’t I give you the tip to buy it?” “You did, Mr. Harwood, and I am very grateful to you. Indeed, I
am, sir. But ” “Hold on! Let me talk! And didn’t that stock go op seven points in ten days? Didn’t it?” “It did, and I am
much obliged to you, my dear boy. But I couldn’t think of selling that stock.” “You couldn’t?” asked Elmer, beginning to
look doubtful himself. It is a habit with most tip givers to be tip takers. “No, I couldn’t.” “Why not?” And Elmer drew
nearer. “Why, this is a bull market!” The old fellow said it as though he had given a long and detailed explanation.
“That’s all right,” said Elmer, looking angry because of his disappointment. “I know this is a bull market as well as you
do. But you’d better slip them that stock of yours and buy it back on the reaction. You might as well reduce the cost to
yourself.” “My dear boy,” said old Partridge, in great distress “my dear boy, if I sold that stock now I’d lose my position;
and then where would I be?” Elmer Harwood threw up his hands, shook his head and walked over to me to get
sympathy: “Can you beat it?” he asked me in a stage whisper. “I ask you!” I didn’t say anything. So he went on: “I give
him a tip on Climax Motors. He buys five hundred shares. He’s got seven points’ profit and I advise him to get out and
buy ’em back on the reaction that’s overdue even now. And what does he say when I tell him? He says that if he sells
he’ll lose his job. What do you know about that?” “I beg your pardon, Mr. Harwood; I didn’t say I’d lose my job,” cut in old
Turkey. “I said I’d lose my position. And when you are as old as I am and you’ve been through as many booms and
panics as I have, you’ll know that to lose your position is something nobody can afford; not even John D. Rockefeller. I
hope the stock reacts and that you will be able to repurchase your line at a substantial concession, sir. But I myself can
only trade in accordance with the experience of many years. I paid a high price for it and I don’t feel like throwing away a
second tuition fee. But I am as much obliged to you as if I had the money in the bank. It’s a bull market, you know.” And
he strutted away, leaving Elmer dazed.
What old Mr. Partridge said did not mean much to me until I began to think about my own numerous failures to make as
much money as I ought to when I was so right on the general market. The more I studied the more I realized how wise
that old chap was. He had evidently suffered from the same defect in his young days and knew his own human
weaknesses. He would not lay himself open to a temptation that experience had taught him was hard to resist and had
always proved expensive to him, as it was to me. I think it was a long step forward in my trading education when I
realized at last that when old Mr. Partridge kept on telling the other customers, “Well, you know this is a bull market!” he
really meant to tell them that the big money was not in the individual fluctuations but in the main movements that is, not
in reading the tape but in sizing up the entire market and its trend.
And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of
dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got
that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and
early bears in bear markets. I’ve known many men who were right at exactly the right time, and began buying or selling
stocks when prices were at the very level which should show the greatest profit. And their experience invariably
matched mine that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found
it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big
money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days
of his ignorance.
The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its
time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class,
not even in the third grade, nevertheless lose money. The market does not beat them. They beat themselves, because
though they have brains they cannot sit tight. Old Turkey was dead right in doing and saying what he did. He had not
only the courage of his convictions but the intelligent patience to sit tight.
IKN373 back and “Be right sit tight” is the same message as The IKN Weekly’s latest motto:
Buy. Hold. Win.
Hey, did you think I’m an original thinker?*. It sounds easy too, doesn’t it? But before I opened
my e-book copy of Reminiscences this week I’d caught myself staring hard at my B2Gold
(BTO.to) (BTG) position and even considering the sale of part of it into market strength. If I
had, even on the strong Thursday, I would have missed all the Friday fun (and BTG moved up
11% that day, which should get added into my BTO.to on Monday). There’s a lesson there.
3

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Be in no doubt whatsoever ladies and gentlemen, this is a bull market for gold and for precious
metals mining stocks. Now is not the time to reduce exposure to equities, now is the time to
increase and to bring that thought to a flourish here’s a quick reminder of the section of IKN362
dated April 17th in which I coined that motto phrase:
I’m not second-guessing gold’s near term any longer. It may go down to my previously
desired U$1,180/oz, it might not. In fact I’d quite like it to do so because I’m not a
seller of stocks at the moment, I’m the guy with a cash pile who’s buying. But no
matter, gold can fiddle around $50 lower or $50 higher or $10 or $20 or whatever. I
do not care. All the current prices are cheap compared to where we’re going to be in
2017 and 2018, in bullish times you stop sweating after the pennies in order to win the
dollars. Or if you like we can get it down to three words: Buy. Hold. Win.
Will gold go up next week or correct down? My best guess is up again (what with the way it
performed on Friday) but that’s all it is, a guess. Gold may correct, the mining stocks may jag
down again, it’s tough to predict the short-term stuff. But put me into the same category as Old
Turkey, I’ll stick with the things that are easier to predict and one of those is “gold higher next
year than now”. That is, as they say, a no-brainer.
Don’t get me wrong, I’m still running near-term trades here, I have my “special situations”
positions such as Wesdome (going to get bought out), INV Metals (target hit and double made,
just waiting for the updated PFS for my exit point), Continental (its permit, my sale) or even
today’s new pick Miranda (going to be pumped by the scumbags). But that’s not the Real
Money, that’s not where real differences are made. Those are B2Gold, Regulus and Sandstorm,
trades with monetary heft. That’s Starcore which, given a modicum of luck, has a clear run at
being a real live tenbagger (and don’t say I didn’t tell you so if it breaks $5 in 2018). And I have
no shame in telling you that I’m already changing my attitude towards Riverside (RRI.v) and
wondering just why I stuck it on such a lowball 50c initial target. But what makes any of those
better than the 200% improvement in the share price of Barrick Gold (ABX) in just six months,
or the multi-bagger gains in First Majestic Silver (AG) (FR.to), a company I wouldn’t touch with
my worst enemies barge pole, or the 150% put on by Chesapeake (CKG.v) with a Metates
deposit that will never ever be mined? Nothing. Mine are best guesses and risk/reward choices
that suit my limited knowledge and investment style, that’s all they are.
Okay, enough blabbing, let’s do some real work.
*You think you are too?
Fundamental Analysis of Mining Stocks
"If it looks like a duck, and quacks like a duck,
we have at least to consider the possibility
that we have a small aquatic bird of the
family anatidae on our hands."
Douglas Adams
Today we look at Miranda Gold Corp (MAD.v).
NOBS report dated July 3rd, 2016
4

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Miranda Gold Corp. (MAD.v)
Company Overview
Miranda Gold Corp. (Canada: MAD.v, US OTC MRDDF, Frankfurt MRG.f) is an exploration
stage junior mining company operating in Colombia, Nevada USA and Alaska USA. In much the
same way as RRI.v last week 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: 103.38m
Options: 5.9125m
Warrants: 49.976m
Fully diluted shares: 159.27m
Current share price: C$0.09
Market Cap: C$9.3m
Approx working cap per S/O: C$0.04
All prices are in Canadian Dollars unless stated. Forex U$0.80=CAD$1
NB: As Miranda Gold (MAD) reports in Canadian Dollars, said currency is used by default
today.
Overview
In some ways, today’s note on MAD.v is similar to last week’s decision to cover and purchase a
position in Riverside Resources (RRI.v):
• They are both small explorecos.
• They both follow the ‘prospect generator’ model of business, with books of land assets
and concessions they want to JV out to larger partner in order to spread the risk.
• They both have reasonably healthy financial and treasury positions with no need for
further equity raisings this year, or even next.
• They both have stocks that (until last weekend in RRI at least) haven’t felt the benefit of
the newly bullish atmosphere.
• They both have simple stories and reasons to buy that aren’t of the normal ilk here at
The IKN Weekly.
That little list should be enough to get you suspicious in my motives and wonder whether I’m
drip-dripping you information in order to present a buy idea every weekend and keep you on the
hook to send over your monthly (or annual) subscriptions in good order thereby saving my
children from starvation and keeping them in shoes that fit without going to second-hand
markets. Well yeah, perhaps I am and perhaps I’m not, just remember that “don’t trust anyone”
message from a couple of weeks ago includes your truly.
Enough jovial banter, now for real business and despite the apparent similarities there are a big
differences about this proposed trade and the one set up by RRI last week. Here’s a list:
• RRI is a decent company and without beating round the bush MAD is mediocre at best.
• I consider RRI a much better pick over the long-term on fundies and discovery potential.
• The first two bullet points beg the obvious question about my suddent interest in MAD.
Answer, it’s for one reason only; it’s being set up as the object of a Vancouver
marketing push. It has all the hallmarks of a pump job in the making and a bunch of
sharks are about to promote it to the naive end of the investment community.
• MAD is also dirt cheap, at a $9.3m market cap with solid looking financial books and
4c/share cash. You’re getting the leverage on $5m of “project and intangible” value, that
allows for plenty of upside given the right circumstances.
• Our trade set-up is therefore simplicity itself; We buy now before the BS pump starts,
we sell when the pump is off and running and in full swing, we walk away and never
return. It’s a near-term flip, rather than a long-term investment made on the conviction
it’s being undervalued on its fundamentals.
5

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• This proposed trade also benefits from the decent liquidity and trading volume. MAD.v
may only be a 9c stock but it typically trades in the hundreds of thousands of share per
day and can go over a million per day. This helps our cause and should stop the stock’s
price running away from us too quickly at the entry point.
All that means it’s not even close to the same situation as RRI. It makes the trade proposed in
MAD a near-term flip, no more no less. This is also partly your author getting cynical and
resigning himself to “if you can’t beat em join em” as regards the Vancouver-based pump and
dump merchants of pure male bovine excrement, but it’s also an easy game plan and a simple
trade that should net a decent profit, which is the name of the game after all.
Today’s analysis looks at the company management and recent developments, its financials,
considers the company’s current land assets, then takes rough guess as to how the marketing
pump is going to play out. We then wrap it up and by then if I haven’t convinced you to follow
me in that’s fair enough. This one is a different sort of trade set-up to our normal ways.
Management and recent developments
MAD is headed up by Joe Hebert, who was VP Exploration until the previous top guy, Ken
Cunningham, stepped aside at the last AGM in January 2016 to become the new company
chair (which is basically semi-retirement from the company). Cunningham came into MAD.v
many years ago with a strong reputation as both a geologist with particular expertise in Nevada
and as a highly regarded, straight-shooting “good guy” of the mining world. However reputation
counts for little when the rocks go against you and in its time MAD.v had in Nevada they turned
up very little (these days they’ve all-but exited the region). MAD under Cunningham had very
little success in Colombia too and it’s a best guess that he got fed up with it all. Now the
company is run by Hebert, also known as a very smart geologist (credited with the discovery of
the ABX Goldrush deposit in Nevada) but a less capable CEO.
At the same time in January 2016, MAD lost its main JV partner when AngloGold Ashanti
decided not to renew its JV exploration deal with MAD in Colombia. For three years MAD was
an exploration partner for the bigger miner and got to do subsidized exploration work. It’s my
best guess that AngloGold Ashanti’s own problems in Colombia (La Colosa is a monumental
headache) are behind the decision to pull the plug on the MAD JV agreement, but all the same
it was a negative development for the company.
And to complete the trifecta, the decision of Cunningham to move on and the AngloGold
Ashanti news were probably the catalyst that got a couple of long-term sponsors of MAD to
throw in the towel on their investments and liquidate their large share positions. We’ll talk about
that more below, but it’s certainly been a heavy burden for the stock price in 2016.
Projects at MAD today
Now for the overview on the projects currently on the books at MAD and this is going to be as
quick as possible. I first direct you to the latest corporate presentation (2) which has all sorts
about the projects at today’s MAD, but to topp that up, here comes my own more cynical pass.
The first one to talk about is Willow Creek, its JV in Alaska with the US OTC Company Gold
Torrent (GTOR), if only to discard its influence because it’s a waste of time. The good news is
that GTOR is earning into the project by spending up to $10m to own 70% and build a mine that
(if you believe the literature) can be up and running within 14 to 18 months. The bad news is
that GTOR has no cash and has only spent just over a million there to date, so that’s much
further off than 2018 or whatever. And even then MAD won’t benefit much from its 30% free
carry because until it gets its $10m back, GTOR would get 90% of cash flow. Add in its small
size (though admittedly high grade with the potential for expansion) and nobody should be
holding their breath on this as a market mover for MAD. For more if you care, try here (3) for 35
pages of corporate-ese promo.
Willow Creek out the way, we now move to MAD’s main playground of Colombia and the three
projects it has there at the moment.
6

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• At Cerro Oro in the Middle Cauca belt of North/Central Colombia (a good address to go
rockbanging), MAD has a JV agreement with Prism Resources (PRS-H), a Canadian
junior on the NEX, in which Prism can earn in up to 70%. Prism is making its payments
on time but hasn’t got much cash and the project is stalled. If somebody throws money
at it one of these days it has a future but that’s a doubt in itself. Interestingly, one Tim
Moody has just joined Prism as a director and he’s a well-regarded geologist in LatAm,
the type that doesn’t waste their time on no-hope rocks. Then again the Prism head guy
Robert Baxter is reportedly a bit of a dick. Overall Cerro Oro isn’t going to be a mover of
the MAD.v fundies for the time being.
• Next Oribella: Around 100km North of Cerro Oro and still in the Middle Cauca, Oribella
is a 100% controlled property (minus a 1.5% NSR) of 3,700 hectares considered as
high-sulphidation target for gold and/or copper. Some bootleather geology has been
done and it’s prospective enough, but not much is happening here and isn’t likely to
until MAD finds a JV partner for the property.
• Finally Antares is probably MAD’s best shot at a discovery right now. About 50km East
of Oribella, Antares is considered similar to the (reasonably) nearby Gramalote deposit
(51% AngloGold Ashanti/49% B2Gold) and is pitched as a potential large, low grading
open pit deposit. This one is also 100% owned and again MAD is looking for a JV
partner to move it forward, which means we’re not likely to get new news on it until they
find somebody willing to pay to put drills into it.
Summing up the project book as stands today, you may get a different impression from the
rose-tinted spectacle take in the MAD literature but what they have right now is a whole heap of
mediocrity. I’m not saying there’s nothing there for sure, what I am saying is that we’re not about
to get any real catalyst from anything held by MAD today. It’s fair to say that I’m not interested in
MAD as a trade for its prospectivity or near-term newsflow potential. To put that more clearly,
there’s no way in the world I’d buy MAD on the back of its projects today. No way.
Financials overview MAD: Net loss per qtr
1
The idea here is to get a feel for the rhythm of
the company and its current position via its
0.8
numbers, the following charts should cover it.
Today I want to start with the operations charts 0.6
because they show the cash-sipping nature of
0.4
MAD the company and its low burn rate that’s
recently got even lower. Here’s the most basic 0.2
of bottom line charts, net loss per quarter. As
you can see, net losses are normally confined 0
to between $0.5m and $0.6m per quarter, this is
smalltime cash burn.
Looking a bit deeper, here right is
how expenditures break down. The
“Net Exploration” number is derived
from the amount of cash MAD
spends on exploration, minus the
cash it recovers (from the Prism and
Anglo JVs). We see a weird result for
August 2015 (year end) because that
quarter saw MAD receive back dues
from JVs, but aside from that one we
can see how expenditures are both
small in absolute terms and also
dropping over the quarters.
7
31.voN 41.beF 41.yaM 41.guA 41.voN 51.beF 51.yaM 51.guA 51.voN 61.beF
$m
source: company filings, IKN ests
MAD: Expenditures breakdown
1
0.8
0.6
0.4
0.2
0
-0.2
-0.4
31.voN 41.beF 41.yaM 41.guA 41.voN 51.beF 51.yaM 51.guA 51.voN 61.beF
$m Exploration net
office
consulting fees
other
wages
source: company filings, IKN ests

,
To take a closer look at the biggest line item, those exploration expenditures, here’s a second
chart below. The grey columns are the cash MAD spent per quarter and the black columns
show the money clawed back from the partners. That was mainly from the deal with AngloGold
Ashanti and as that’s now a thing of the apst we won’t get that any longer, but we will get a
small amount rebated from the Prism deal as 2016 unfolds.
C$m MAD: Exploration Expenditures and recoveries
0.7
Exploration expenditures
0.6 Exploration recoveries
Exploration net
0.5
0.40
0.4
0.29 0.32 0.30
0.3 0.25
0.22
0.2 0.17
0.13
0.09
0.1
0
-0.1
source: company filings
-0.2 -0.19
Nov.13 Feb.14 May.14 Aug.14 Nov.14 Feb.15 May.15 Aug.15 Nov.15 Feb.16
Anyway, the red columns show the net expenditures on exploration and the drop is now more
evident, as a couple of years ago MAD was spending perhaps $100k per month, now it’s less
than $50k per month. This is set to continue for the rest of 2016 according to company
statements, as 2016 burn rate was budgeted at CAD$1.5m and even before the recent equity
placement, MAD had more than enough money to get itself well into 2017.
On the other hand, all the above also shows how MAD has been battening down the hatches.
This isn’t a Tinka Resources (TK.v) type situation, where the junior goes boldly forth and spends
on drilling in 2015 to move forward its project(s). MAD is one of those that decided to go into
hibernation, cutting back on running costs, handing back concession acreage and laying off
staff (esp in the now closed Nevada offices). That decision to protect capital (at all costs) can be
debated on different levels; perhaps a sensible move but with hindsight the companies that
picked up distressed assets at the right time have benefitted. Etc etc and what I’m laying out is
the reality of MAD , that’s all.
MAD: assets
6
Okay, that’s enough of the
P+L now that we’re clear MAD 5
is a low cash burn rate 4
company. We’ll move to the
3
balance sheet and take a look
at the substance, instead of 2
just talking about style. Assets
1
look like this (right) and the
major portion of MAD’s value 0
is in cash treasury. Fixed
assets are carried at half a
million dollars or less, then
there are some marketable
securities. This is a small balance
sheet but it’s healthy, too. One of
the reasons for that health is the
liabilities, as shown here right.
No long-term debt, and current run
of-company stuff rarely goes above
200k. As good as it gets. Another
reason for the healthy look to
MAD’s books is the liquidity of its
current assets, here below is a
closer look at that sub-section of
8
41.guA 41.voN 51.beF 51.yaM 51.guA 51.voN 61.beF tse61.yaM tse61.guA tse61.voN
C$m
fixed assets
marketable securities
other short term cash
source: company filings
MAD: Liabilities
0.5
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
41.guA 41.voN 51.beF 51.yaM 51.guA 51.voN 61.beF tse61.yaM tse61.guA tse61.voN
$m
source: company filings, IKN ests

,
the assets chart above.
MAD: Cash and ST investments
5
4.5 (liquidity)
4
3.5
3
2.5
2
1.5
1
0.5
0
9
41.guA 41.voN 51.beF 51.yaM 51.guA 51.voN 61.beF tse61.yaM tse61.guA tse61.voN
C$m
cash marketable securities
source: company filings
Note the significant jump in cash going on at the moment, that’s due to the recently closed non-
brokered private placement that raised $2.6m for the company (see below for a lot more on that
event). That’s put cash at an IKN Weekly estimated $4m for the end of the current quarter (end
August, which is also the company’s financial year end) but it’s topped up by the expected
improvement in marketable securities, which in February was $9k’s worth of Prism (its JV
partner and priced down to virtually nothing for good reasons) and the main event, 400,000
shares of Red Eagle (RD.v) that came from a previous JV with that company. As RD.v and its
San Ramon mine has been on a bit of a price tear since end February and MAD prices those
shares at fair market value, they’ve nearly doubled in value and are worth just under $300k
today, a nice little bonus.
The bottom line to the cash position is that it’s healthy, period.. It really wasn’t in bad shape
before June and the recent financing, as with MAD’s low burn rate it wasn’t in a hurry to top up
on its $2m in treasury. But top it
up it did, which is interesting. MAD: Working capital
5
4.5
Here right is the working capital 4
position, is a close proxy to the 3.5
3
cash position (unsurprising, what
2.5
with those ultra-low liabilities). 2
We estimate MAD will close its 1.5
1
year-end in August 2016 with
0.5
over $4m in working cap and as 0
this chart also shows, it’s the
type of company that can make
$4m last a long time. It’s safe to
say that MAD won’t need to top
up again for a couple of years. It may want to, but it won’t need to.
Finally, the share count and the significant change of the current period is the only one in recent
times. MAD isn’t a serial diluter, which adds yet another layer of intrigue to the recent 29.14m
addition to shares out. However, the recent share placement also means that even at the new
103+m count, MAD has 4c/share in
cash, and that’s not bad for a 9c stock.
You get everything else, projects and
brains trust and going concern etc etc,
for around C$5m. Now I agree that
MAD doesn’t have that much, but it’s
just the type of non-cash EV that can
make big strides if they find something
worth money or if the company gets
talked up in the right places by the right
people (“right” being figurative, of
course).
Before moving on and while on the
41.guA 41.voN 51.beF 51.yaM 51.guA 51.voN 61.beF tse61.yaM tse61.guA tse61.voN
$m
source: company filings, IKN ests
MAD: Shares outstanding
120
110
100
90
80
70
60
50
40
30
20
10
0
41.yaM 41.guA 41.voN 51.beF 51.yaM 51.guA 51.voN 61.beF tse61.yaM tse61.guA tse61.voN
m S/O
source: company filings/IKN ests

,
subject of shares, let’s note that 20.8m of the near-50m in outstanding warrants at MAD are at a
strike of 37.5c (December 2017 expiry) and don’t represent an overhang issue. The other
29.14m warrants are from the recent placement (see below) and have a 12c strike price. That’s
a potential overhang of course, but it’s a new one and if the stock manages to break through
that number it would then presumably provide a decent floor level.
That wraps up the overview of the financials at MAD, with the TL:DR on the section being “Neat
and tidy, but small”. Along with the projects overview above we now have a decent idea of the
background to this company, now it’s time to explain why I’m a buyer of this penny stock,
because it’s less about the steak, more about the sizzle.
Time to talk share deals
We now get to the reason I’m a buyer of MAD.v shares. See below for more.
Above is clear evidence to flag the pump set-up that’s going on behind the scenes at MAD
today. On June 23rd MAD announced the closure of its recent non-brokered private placement
and here’s how that NR (4) started:
10

,
Vancouver, BC, Canada --June 23, 2016 -- Miranda Gold Corp. ("Miranda") (TSX-V:
MAD) has closed a non-brokered private placement with aggregate gross proceeds of
$2,622,650 from the sale of 29,140,555 units at a price of $0.09 per unit (a "Unit").
Each Unit comprised one common share and one non-transferable common share
purchase warrant (a "Warrant"). Each Warrant entitles the holder thereof to purchase
one additional common share of Miranda at a price of $0.12 until June 23, 2021. The
common shares issued, and any common shares issued pursuant to the exercise of
Warrants prior to October 23, 2016 will be restricted from trading until October 24,
2016.
Let’s start by stating for the record that a 9c unit placement with a five year duration full warrant
at 12c is a very juicy looking deal in this bubbly market. As such it won’t come as a surprise to
learn it was a popular financing, originally pitched at raising $1.5m when announced on June 3rd
but a week before the closing it got raised to $2.6m and then formally announced as “fully
subscribed” by the company (5)...but after even that NR MAD sold another 311k units (!!). But
it’s when we take a good look at the list of people buying into this deal that the fun starts, the
scene changes and evidence grows that MAD is being set up for a promo pump. Above is your
except of the BCSC filing on the placement, the one that Vancouver prefers to keep away from
the limelight but is obliged to file by law. These filings take a bit of searching but as long as you
know where to look they give more detail about the people buying into these share deals:
The bigger takers include:
• Europac, the Peter Schiff house, which took $447k of the placement. For the record
Europac has one of the most aggressive boiler rooms out there and over the years I’ve
heard of all types of nefarious dealings done by their desk jocks, all off-record of course
(and see Martin Scorsese’s Wolf of Wall Street for more), but these days whenever I
see Europac pop up as a major placement buyer my red flag is duly unfurled.
• Next up is Brandon Munday, who as well as being a Vancouver real estate player and a
director of juniors such as Klondike Silver (KS.v), a 100% BS pennystock so woeful that
it can’t even catch a serious bid in the current bullish surge for silver, is also the man
behind Red Plug Capital (6) a “friends and family” fund set up to trade Canadian penny
spec stocks. Mr. Munday took $360k of the deal for himself as stated, meanwhile off
that list of named participants fellow investors of Red Plug took another $103.5k approx.
• The $200k piece of the placement taken by Palisade Global (7) group (including
Palisade Radio, Palisade Research), the promotional pump house that runs the
“sponsored coverage” model of doing business (i.e. legalized bribery). This was signed
off by Randy Rongavilla, investment banker at Haywood, who also signed off on a
couple of other portions of the placement in order to get his 18k or so in finder’s fees.
As a final sidebar we note the smaller $40,500 of the placement taken by Adrian Day, he of the
well-regarded asset management company. This is a more logical purchase, as Adrian Day has
been a long-term holder of MAD.v and is probably taking the chance to add some shares at a
discount to his cost average. In this we have no issue.
In total, the named takers of the placement add up to just under $1.2m. After those, another
$900k was taken by two unnamed backers in Germany and Austria. Then around $250k was
taken by unnamed residents of The USA, which leaves a $250k balance spread among different
jurisdictions. Of the undeclared parts of the placement, the dual Teutonic blocks catch the eye
as the German market is (in)famous for running the type of blatant promo pump to the naive
end of its population, if anything it’s worse than in Canada (and hell’s bells that’s saying
something). Two individual buyers taking nearly half a million Canadian dollars worth of
pennyshares each and likely in the position to "formulate capital markets strategic plans in
Europe" just adds to the atmosphere now building.
But there’s more than just buyers to this story, as the stars also align for MAD.v due to the
recent exit of at least two (and possibly three) large sellers of the stock.
11

,
Selling pressure likely to have come to a close, large sellers are done
To the above, your author has recently learned that large-scale sellers of MAD stock have run
out of shares to sell. MAD has been systematically sold to the tune of 5.7m shares by one of its
long-term backers who (probably quite rightly) ran out of patience after sponsoring the company
and its previous CEO for many years. The same is also true for the Rick Rule via his Rule
Family Trust, who since the AGM late January has sold the 1.5m shares he held since 2007. It’s
also possible (though I haven’t been able to confirm this one) that Sprott Inc, a fund closely
related to Mr. Rule, has sold the 4.9m shares of MAD it had on its books at the end of January
2016 (8), an educated guess reinforced by MAD insider filings that imply Sprott had already sold
a little over 2m shares in 2015. But that 4.9m Sprott block aside, the other two blocks having
sold is solid and confirmed intel. We know that both the large 5.7m share backer and Rick
Rule’s 1.5m have been sold into this market
in 2016 and we also know both those
sellers are now finished. Those two alone
are 7.2m of the approximate 17m shares
traded in MAD.v since the AGM and the
start of their liquidation, a big weight on the
stock that is now lifted. Add in the potential
Sprott block’s sale and its the majority of
MAD volume this year. With the selling
done in two of those three, perhaps all
three, the chances of shares hitting a large
iceberg on the ask have diminished greatly
and not only that, but we can assume the
change of hands in these large portions of
MAD.v stock will be stronger hands, (at
least until the market pump is in full swing)
and also make a fair guess that the buyers
of this distressed stock on the open market are likely to be related to the people behind the
recent round of funding via the 9c placement.
Discussion of Miranda Gold (MAD.v) and its potential for a trade
The scene is now set and by now I hope you’ve caught on as to why this isn’t the same type of
play as last weekend’s note on Riverside Resources (RRI.v):
• The management has just changed hands and as things stand its project book isn’t
anything great, but the company is pushing their benefits all the same.
• The company may be small but financially it’s in good shape, with plenty of cash in
treasury these days and no debt to speak of.
• A new and somewhat unnecessary placement at this rock bottom level has just been
run, with a full warrant thrown in cheaply, the placement oversubscribed and the largest
takers having the hallmarks of people who run promo-BS marketing (call them pump
and dump if you like) on the naive end of the junior world.
• Add to that how a large amount of shares have changed hands in the last four or five
months as long-suffering holders run out of patience and capitulate. Ifs omeone’s been
selling, someone else has also been buying at these distressed levels.
In short, ladies and gentlemen, MAD.v is about to be a pump vehicle. We’re now in a phase of
the market in which anything with “gold” in its corporate title can find willing buyers. I could offer
you up any number of examples, but the best one that comes to mind is West Red Lake Gold
(RLG), a tiny exploreco on the CSE market which has been talked up from 10c to over 30c
recently. No matter that its concessions are pure moose pasture that have never seen the
shadow of a drill truck and are considered “horrible” by people I trust, it’s been talked up and up
by the promo players who bought in cheaply and who are about to sell, leaving the dumb end of
the market holding a large bag. That RLG dog and whole pack of them howling behind, proving
without a shadow of a doubt that your junior mining vehicle doesn’t need to have anything great
in the way of projects in order to see its price run up sharply, all it needs is to be considered
cheap and be backed by those who sell sizzle rather than steak.
Miranda also has “gold” there in its title, but with the type of proven promo merchants that have
12

,
recently lined up behind MAD this is a stock ticker that’s certain to get more than its fair share of
attention in the weeks to come. How the promo happens is up to those at the centre, but I’d
suspect that Palisade will be one of the main pushers (it has reach in Germany as well) what
with it taking a large portion of the share + full warrant placement. A possible plan of those
inside the latest placement will be to “clip the warrant”, i.e. wait until the escrowed shares go
free float, then sell the shares and keep the 12c warrant as a free bingo ticket, but it might not
go down that way either because of the way the recent big sellers have been taken means that
whoever is behind this may be holding more free trading stock and have a different. We’re also
talking about a company that’s recently had a change of control and is now run by a CEO
looking to generate new buzz and a name. Add in the reasonable financials and a treasury that
could even be used to pick up some new land concessions or projects and as a vehicle for
selling dreams of getting rich quick, they don’t often come in neater packages. Sadly, the ones
who’ll be selling the dreams are the ones who are most likely to benefit, not the ones buying.
But however they run their pump, our opportunity is far more straightforward. We here today:
1) Buy now, while nobody is looking
2) Wait until they start to talk up the stock
3) Sell into the pump
4) The end.
As for a timeline on that, there are variations on the theme but as the new placement shares
come out of escrow on October 24th it’s a fair guess that they’d want volume and price to sell
into that date. That gives us time, because these type of pumps tend not to take off until those
in the drivers’ seats are good and ready. It wouldn’t surprise e to see MAD get a pop tomorrow
morning (though I’d strongly advise all of you not to buy in at any old price), but once that’s
done I’d expect this stock to cool off for a while before the promo is rolled out.
And by the way, this little trade plan also has the side benefit of siphoning away at least some of
the profits from the promo pumphouses and into our pockets instead, but I also know that if you
start thinking too hard about that angle it gets into a moral grey area quite quickly so I’ll leave it
there and wrap up.
The IKN Weekly recommends Miranda Gold (MAD.v) as a near-term speculative buy, as
it’s being set up as a Vancouver pump vehicle in the weeks ahead. The trade’s timeline is
likely to be near-term with a three to four month window, but as the exact timing of the promo is
out of our hands it’s difficult to say exactly how it will develop, it may happen a lot more quickly
or it may be part of a longer game. Either way, MAD with 4c/share of cash, clean books and a
market cap of under C$10m is a low risk way of putting some cash where new cash is about to
flow, thanks to the pump job ahead. As for a target I’d tentatively frame 20c and a double over
the period, but that again is a tough call. This trade isn’t about fundamentals (or even
technicals), it’s about the power of promotion and the way in which these people press the
world’s greed buttons, all we’re doing is grabbing a piece of a larger pie.
Final word: For what it’s worth I’ve edited out a large-ish slice of the conclusion section because
I was selling my pitch story too much and, ironically, was starting to sound like the people who
will be behind the upcoming pumpo of MAD.v. Life resembles art. All the same I encourage you
to check out the closing bullet point at the bottom of today’s edition on MAD.
End of Report
Stocks to Follow
Three of our 12 open positions were losers last week (SAND, WDO.to, HBM short) and another
two remained unchanged since last weekend (SAM.to, TK.v). The other seen were winners
(BTO.to, REG.v, RRI.v, CNL.to, INV.to, LRA.v, FCV.v) and that list includes the double figure
percentage winners Riverside Resources (RRI.v up 37.7%), Lara Exploration (LRA.v up 22.4%)
and Focus Ventures (FCV.v up 12.5%). It would have included other Canadian listed stocks too
13

,
if July 1st and the national holiday hadn’t fallen on the Friday. Still, those have a few percentage
points worth of catch-up to factor in next Monday when the US markets are shut, what goes
around comes around.
With the addition of RRI.v to the list we now have 12 open positions, three fewer than our self-
imposed maximum of fifteen at any given time. Eleven are in the green and just one is left in
the red, Focus Ventures. Miracles happen.
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$3.24 53.6% Target under review
Regulus Res REG.v hold C$0.64 06-apr-15 C$1.29 101.6% 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$4.64 22.1% Now close to Top Pick
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$1.98 4.2% KGI M&A target
Riverside Res RRI.v buy C$0.38 27-jun-16 C$0.42 10.5% new pick, 50c tgt
Continental Gold CNL.to buy C$2.68 22-may-16 C$3.63 35.4% new near-term trade $4.80 tgt
INV Metals INV.to hold C$0.25 03-apr-16 C$0.54 116.0% PFS news now late
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$1.20 4.3% solid biz model
Focus Ventures FCV.v hold C$0.23 01-jul-12 C$0.09 -60.9% financing sept next hurdle
Short positions
HudBay Min. HBM short U$4.98 09-jun-16 U$4.88 2.0% 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.
Miranda Gold (MAD.v): A quick reminder, if it were needed, that I’m a buyer of this stock
next week. If you join me don’t overpay, there’s time to get positioned here.
Riverside Resources (RRI.v): Position opened. I kind of feared it would do what it did on
Monday, but I still wasn’t quick enough to get any early 35.5c stock for myself and so took
some of the freely available 38c later on. What I didn’t expect was an RRI that kicked on from
the early move and it got second wind mainly because of solid fundies news out of the
company Wednesday (9) on initial sampling results from its newly acquired La Silla concession
in Mexico (picked up by winning an auction last year, a move that’s looking pretty smart now).
That NR was headlined, “Riverside Samples Up to 7.24 g/t Gold at the 100% Owned La Silla
Gold Project in Sinaloa, Mexico” and it was interesting to see the stock move on by another
14

,
10% when it hit, as another signal of a bull market is when NRs on channel sampling start
moving explorecos. 2015 seems a long time ago now.
Also, I now regret pitching low at the end of my report last week and setting my initial target
for RRI at 50c. I won’t lie to you, I had one eye on the way in which peer project generator
company Lara Exploration (LRA.v) had sold down hard the Friday before and wondered whether
the marketing had stopped. It hadn’t, as seen in LRA trading last week and that suggests
there’s plenty of room left for RRI to play catch up to at least 60c. Whatever happens, I won’t
be in a hurry to sell my RRI in this new re-booted bullish market because if word starts getting
round RRI could go a lot higher, not just give us a double. Also, it’s good to sponsor the good
guys in this sector and Staude is one of those. Buy yourself some more.
Wesdome Gold Mines (WDO.to): Even if the KGI buyout deal isn’t announced first thing
tomorrow Monday morning (which I doubt, they’re still trying to find a route to a friendly deal)
WDO will enjoy a pop tomorrow thanks to the way its trading was closed Friday and gold, plus
the whole mining market, enjoyed a strong day. That’s true of plenty of other stocks as well,
not least our own BTO.to and CNL.to positions to name but two, but it still doesn’t make it any
less true.
WDO had a reasonable week under the circumstances and Friday effects aside, its performance
was in line with my expectations in the near-term of a stock that’s fully valued to market and
needs the buyout offer to push it higher. Well, there’s also this...
...the five day chart (to close Thursday) that shows how WDO and KGI are trading compared to
the broader market (proxy GDX). This publication isn’t the only one that knows what’s going
down between these two companies; hell, we weren’t even the first to know.
HudBay Minerals (HBM) (HBM.to): Ugh, copper rebounded and dragged HBM up with it. As
usual this is about the macro copper call, so check ‘The Copper Basket’ for more. Overall the
fact that I got short at the right price range has helped cushion the blow, but if copper starts to
run on a newly bullish market view of copper it will be time to cover and close. The copper
world is expecting excess Chinese copper purchases to be vomited back to the market in July
(or so the talk goes) and that if true will show up in LME (and perhaps SHFE) warehouses. I’m
good about staying short for this month, no hurry to make a decision, plus in a few days’ time
we’re due to get production figures for HBM in 2q16. Those will help shape the market.
B2Gold (BTO.to) (BTG): On Wednesday B2 gave us a NR (10) with a largely posiive update
on progress at its Fekola and Kiaka projects in Africa. At Fekola in Mali, the company is now
mulling over a mill expanson to bring throughput up to 5,000 tonnes per day (tpd), some 1k
tpd higher than the current design capacity (though that’s probably being beaten already). This
15

,
sounds fine by me, as long as local exploration is going well and the resource supports a move,
it’s a cheap way of adding organic growth and with the way gold is moving, the $20m capex
ticket would be easily covered by cash flow.
Meanwhile at Kiaka in Burkina Faso the story is exploration discovery and a new zone of higher
grading mineralization close to the main pit project site, with the line that most caught my eye
“...a reconnaissance aircore drilling program to the east of known mineralization intersected 16
metres at 4.16 g/t gold, including 6 metres at 9.90 g/t gold associated with quartz veining
hosted in siltstone”. That’s the kind of result that gets company geologists salivating and it’s
good that they’ve seen their exploration budget increased for this year already.
Sandstorm Gold (SAND) (SSL.to): For my taste the best fundies news of the week in any
IKN Weekly stock came from SAND, which on Tuesday announced (11) a bought deal set to
bring in U$57.5m in gross proceeds (because the full over-allotment will fill, be in no doubt) by
selling 12.9m shares at U$4.45 apiece. This will move the shares outstanding count to
151.21m, but it also means that SAND, with the main intention of paying down debt with this
deal, will make a large leap in its efforts to pay down its financial debt in 2016. This was a
smart decision made in the type of I like the way SAND is changing its aspect from the small
chancer royalty/streamer and into a serious, solid Franco Nevada Mini-Me. If I didn’t have three
deserved Top Picks already this would be a real candidate for the top rung now and with gold
doing what it’s doing, the current house U$5.50 price target is starting to look like a staging
post for greater things.
Continental Gold (CNL.to): CNL traded very nicely last week and it’s worth noting that the
US pinkie CNOOF added an extra 10c to its price on Friday (while Canada was closed), which
ceteris paribus would point to CNL opening at $3.75 in Canada tomorrow Monday.
CNL gave us news last week too, when on Tuesday pre-open it announced (12) channel sample
results from one part of its deposit where they’re currently developing tunnels. Although only in
one area of the larger deposit the company had chance to talk up the results in this way:
Assay results presented below have not only confirmed that vein orientation and
geometries are as modelled in the current Feasibility Study ("FS") mine plan but have
also outlined a significantly wider zone of high-grade precious metal mineralization that
may be amenable to wider, more productive extraction than currently envisioned.
At first market reaction to the news was
muted (CNL still has that Boy-Who-Cried-
Wolf problem around it, I think) but then
came the boost when Ron Stewart of
Dundee published his update to
coverage of CNL, using the NR and his
interpretation to raise his price target on
the stock from $4.00 to $5.00 and calling
the current investment potential
“compelling”. As a result of his call CNL
shot forward (that’s what his word is
good for) so take a look at the Ron
Stewart anal ysis here (13), it’s well
worth your time.
INV Metals (INV.to): INV is now officially late with its updated Pre-Feasibility study, as it said
it would be with us during 2q16 and since Friday it’s been 3q16. I shall put my patient face on,
assume there was some last minute adjustment they wanted to make and smile sweetly when
the news release shows up in the next five days. What could possibly go wrong?
16

,
Lara Exploration (LRA.v): The crazy ride at LRA.v took another turn to the positive as it
rebounded hard again and by some small miracle, after holding an 80% loser just a few months
ago, this position is now in the green. Let’s see how much further it runs on this Agora promo
before making any decisions, but one of the ideas I have spinning round my head is to lighten a
little here and add the cash raised to the similarly-profiled RRI.v.
Tinka Resources (TK.v): Three things to say about TK:
1) On Monday TK announced it had started (14) a helicopter-borne magnetic survey of its
greater 150km2 Ayawilca property, news that didn’t budge the stock price an inch despite it
being a reasonable positive. Come the end of this month, TK should have the results which
should help the company its next set of targets. A positive.
2) On Wednesday TK filed (15) its new 43-101 technical report on SEDAR, making official the
resource update we’d already covered when the NR came out previously. I have my copy and
though I’m not a geologist (and never will be) took time to peruse its pages and as far as I can
see, the 43-101 had no unpleasant
surprises and basically reaffirmed the
information supplied in the previous NR as
straight and true. That day saw selling in
TK and the stock spiked under 20c for a
few minutes as somebody or other decided
to leave. Com ethe end of the week things
were back to normal and the price was
again fluctuating inside its recent 22c to
25c range.
3) Zinc the metal moved higher last week,
finishing with a flourish on Friday and
hitting 97c/lb (surely now on the way to
breaking the $1.00/lb barrier). This price
move is going to push all zinc-exposed
stocks eventually and TK is one of them.
It would be good to see TK getting its story out to
a wider market from here, but we also need to be
aware that at some point the quarter it needs to
go to market and raise capital. Somewhere
between those two factors is the likely reason for
its stubborn refusal to move higher, so as TK can’t
control the zinc spot price, it should get on and do
something about its own marketing as that’s the
one it can influence.
The Copper Basket
After twenty-six weeks of 2016, The Copper Basket shows a 72.56% gain to level stakes.
17

,
company ticker price 1/1/16 Shares out Market Cap current pps gain/loss%
1 HudBay Min. HBM.to 5.31 235.23 1451.37 6.17 16.2%
2 Ivanhoe Mines IVN.to 0.61 778.96 786.75 1.01 65.6%
3 Reservoir Min. RMC.v 4.08 48.69 449.41 9.23 126.2%
4 Capstone Min. CS.to 0.44 382.04 324.73 0.85 93.2%
5 NGEx Resources NGQ.to 0.65 205.06 184.55 0.90 38.5%
6 Western Copper WRN.to 0.38 94.19 103.61 1.10 189.5%
7 Cordoba Min. CDB.v 0.16 86.86 74.70 0.86 437.5%
8 NovaCopper NCQ.to 0.395 104.33 67.81 0.65 64.6%
9 Copper Mtn CUM.to 0.445 118.8 58.21 0.49 10.1%
10 Copper Fox CUU.v 0.125 417.64 50.12 0.12 -4.0%
11 Nevada Copper NCU.to 0.66 80.5 49.91 0.62 -6.1%
12 Atico Mining ATY.v 0.28 97.59 46.84 0.48 71.4%
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 7.94 0.08 45.5%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg 72.56%
An excellent week for this basket, up 14.3% and at a year high, with only two losers on the list
(NGQ.to, RVL.v). There were also four
unchanged stocks on the week (RMC.v, CUU.v,
ARG.to, HCH.ax), which means there were nine
winners and that’s a fine way to end the
quarter and half-year. Not listing all of those,
but we will name the big winners because they
were impressive, led by Cordoba (CDB.v up
38.7%), Capstone (CS.to up 21.4%) and
Western (WRN.to up 13.4%). Those three
made the real difference last week.
And that brings us to the end of another
quarter so let’s check in on the relative
performance of our 15 components at this juncture. Top stock by a long way is Cordoba
(CDB.v) which rebounded strongly last week after finally deciding which way it wanted to jump
at the 60c resistance level. Western Copper & Gold (WRN.to) has also had a great six months,
up to second spot and ahead of arguably the year’s biggest success story in the copper space
(and certainly the biggest success story over the last three years), Reservoir (RMC.v). That one
is now sold and its percentage win is set for the year.
The 2016 Copper Basket Components after 26 weeks
450%
400%
350%
300%
250%
200%
150%
100%
50%
0%
-50%
18
v.BDC ot.NRW v.CMR ot.SC v.YTA ot.NVI ot.QGN v.LVR ot.QCN ot.MBH ot.MUC v.UUC ot.UCN ot.GRA xa.HCH
The Copper Basket 2016, weekly evolution
100%
80%
60%
40%
20%
0%
-20%
Despite the bull market we still have four stocks that are showing a loss for 2016 to date (and
Copper Mountain is hardly a winning winner either). Worst Q2 performer was Nevada Copper,
which moved from a 45.5% profit to a 6.1% loss. Totally deserved too, how Bonifacio remains
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 dr3luj
source: IKN calcs

,
as CEO there is one of the mysteries of our sector.
And the reason behind last week’s bullish action in
copper stocks is the bullish action in copper the
metal, which rallied (against my personal forecast,
it must be said) all through the week as people
started putting money into anything that’s heavy,
metally and shiny. Except uranium (ha ha). Copper
did well on the speculative boost that seems to
have been part of the Brexit fallout and the
expectation for easier money policy in Europe.
Trading was light on Friday and we can perhaps
take that final three cent pop with a pinch of salt,
but the copper bull was active all week and
U$2.20/lb the new solid line. We’ve seen this sort of
move before of course and so far in 2016, when
U$2.20 is taken out, so is U$2.30/lb. I’m not as
cocksure and arrogant about my HBM short this
weekend, I don’t mind telling you.
It’s the end of another month, here are the long-term copper inventory tracking charts:
Copper inventories: percentage held per exchange
80
70
60
50
40
30
20
10
0
19
21.naJ bef ram rpa yam nuj luj gua pes tco von ced 31.naJ bef ram rpa yam nuj luj gua pes tco von ced 41.naj bef ram rpa yam nuj luj gua pes tco von ced 51.naj bef ram rpa yam nuj luj gua pes tco von ced 61.naj bef ram rpa yam nuj
LME Shanghai Comex source: Cochilco
Copper inventories, per month, 2012 to date
1000000
900000
800000
700000
600000
500000
400000
300000
200000
100000
0
21.naJ bef ram rpa yam nuj luj gua pes tco von ced 31.naJ bef ram rpa yam nuj luj gua pes tco von ced 41.naj bef ram rpa yam nuj luj gua pes tco von ced 51.naj bef ram rpa yam nuj luj gua pes tco von ced 61.naj bef ram rpa yam nuj
Mt Cu
LME Shanghai Comex
source: Cochilco
Now for the weekly copper warehouse inventory bullets:
• Total world copper stocks in the three official warehouse systems moved up last week
by 4,987 metric tonnes (mt) (+1.2%), which is a small but significant amount. The
world total this weekend is at 407,668mt.
• Shanghai saw inventories move up, which is a distinct change from recent weeks. The
drawdown had already slowed in the week before last and there’s all signals now on

,
the bottom having been reached (see chart below). This weekend stocks stand at
161,649mt, some 6,659mt (+4.3%) higher than this time last weekend.
• LME stocks did the same as the week before last, down a small-ish 3,250mt (-1.7%) to
finish the week at 189,125mt. A second quiet week for London copper, the market is
now expecting a new raft of inventory to arrive in next three or four weeks. We shall
see.
• Comex stocks rose for the second week running, up 1,578mt (+2.9%) to finish Friday
at 56,649mt. Comex is still the minor partner in the official futurs market inventory
stocks story, but it’s now at 13% of the total and with its palns to increase market
share, shouldn’t be taken lightly.
Here’s the Shanghai-only chart, the shape at the right is beginning to confirm that we’ve
already found the bottom of the inventories drawdown. That’s early both in absolute tonnages
(it usually goes to 100k or less) and on the calendar (by about a month).
Shanghai Futures Exchange Warehouse Stocks, 2014-2016
400000
350000
300000
250000
200000
150000
100000
50000
20
31'13ceD ht91 ht9 dn2ram dr32 ht31 ht4yam ht52 ht51 ht6yluj ht72 ht71 ht7 ht82 ht91 ht9 ht03 ts12 ht11 ts1bef dn22 ht51 ht5rpa ht62 ht71 ht7nuj ht82 ht91 ht9 ht03 ht02 ht11 ts1von dn22 ht31 dr3naj ht42 ht41 ht6ram ht72 ht71 ht8 ht92 ht91
Mt Cu
source: Cochilco
Now for a note on just one basket stock this week, copper isn’t our main focus this week.
Capstone (CS.to): Ha! So much for my smartypants idea of zeroing in on CS as a short
candidate last week. CS.to added a cool 21.4% as the market came in for anything with
“mining” in its corporate title.
The Low Cost Producer Basket
After 26 weeks of 2016, the Producer Basket shows a gain of 130.03% 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 25.87 22.21 200.9%
2 Newmont NEM 17.98 529.12 21.34 40.34 124.4%
3 Goldcorp GG 11.56 830.22 16.34 19.68 70.2%
4 Franco Nevada FNV 45.75 176.298 13.88 78.72 72.1%
5 Agnico Eagle AEM 26.28 217.67 12.10 55.60 111.6%
6 Ang/Ashanti AU 7.10 405.27 7.72 19.04 168.2%
7 Detour Gold DGC.to 14.41 170.85 5.52 32.32 124.3%
8 Sibanye Gold SBGL 6.09 228.71 3.27 14.29 134.6%
9 Buenaventura BVN 4.28 254.19 3.15 12.38 189.3%
10 New Gold NGD 2.32 509.89 2.42 4.75 104.7%
Prices in U$/NYSE tickers, except DGC.to (CAD$) Portfolio avg 130.03%
Nine of our ten names made gains last week and the only reason Detour Gold (DGC.to)
registered a smal weekly loss is that it didn’t trade on the big pop Friday, being as it is a

,
Canadian listed stock. All others made gains and most made big ones, with the typical frqme
between +7% and +9% on the week and the best of the bunch the 13.5% added by AngloGold
Ashanti (AU).
The Low Cost Producer Basket: Weekly performance
130% and comparative to GDX control
110%
90%
70%
50%
30%
10%
-10%
Goldcorp (GG): I continue to marvel at the relative underperformance of GG this year, as
although we shouldn’t sniff at a 70% improvement in the first six months of 2016 that’s a long
way behind its direct peers in Barrick (+200%) and Newmont (+124%). Even the “low risk”
model of Franco Nevada (FNV +72%) is doing better the GG nowadays, which makes one
wonder why anyone would want to expose themselves to execution risks of operating mining
companies.
So here’s the six line tentative hypothesis thinkpiece behind GG’s poor show so far this year.
First and foremost, Chuck Jeannes isn’t stupid and he knew when to bail. Second, Garofalo was
frced to go down the “we’re going to concentrate on quality ounces, not quantity of ounces”
strategy line because that’s the hand he was dealt. Thirdly, suddenly the market just wants
quantity again. Result: Garofalo’s best pal Boyd whips his ass all year and eventually AEM
becomes the bigger company.
Barrick (ABX): A piece of minor news, but I wanted to make mention of it just to get it on the
record. Last week ABX received community approval in a prior consultancy meeting with locals
for its La Merced project in Ancash, Peru. This one is still a long way from a build decision, but
it was good to see ABX proactive and building strong community relationships early.
Regional politics
Regional Risk Review
It’s quarter-end and time for the review of regional political risk for junior mining. This is the
13th edition of the revised format, the latest having come in IKN360. The standard reminder of
how the categories are considered with their score out of ten: The 6 categories are:
a) National Government Miner Friendly: The country on its national stance towards
mining activity.
b) Community/Social Miner Friendly: The overall attitude of locals towards mining,
either in specific zones or in country regions.
c) Foreign Direct Investment (FDI) Friendly: The openness towards FDI and the
safeguards it gives to foreign capital looking for a home.
d) Mining Culture: Countries or regions with generational traditions in mining are easier
places in which to operate than those which have little previous exposure to formal
mining operations.
e) Geopolitical Optics: The way in which the outside world sees this country, an
important factor, no matter if the perception be right or wrong.
f) Internal/National Political Stability: A gauge of how stable the place is politically.
21
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 dr3luj
Low Cost Basket: Percentage difference between
basket and GDX control, 2016
5%
basket 0%
gdx control
-5%
-10%
-15%
-20%
-25%
source: Google, IKN calcs
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 dr3luj
source: ikn calcs, NYSE/Nasdaq data

,
We concentrate on nine countries with the potential to host companies, rather than try to offer
a comprehensive LatAm-wide view that takes in countries with little or no appeal for investment
or speculation in juniors. Here’s this quarter’s table, below the country-specific notes.
June 2016 Latin American Country Risk For Foreign Mining Companies
Nat. Govt Community/Social Geopolitical Internal Nat.
Country FDI Friendly Mining Culture Total
Miner Friendly Miner Friendly Optics Political Stability
LatAm countries under active consideration for junior mining project location
Chile 9 7 8 10 7 8 49
Peru 9 6 9 9 7 6 46
Mexico 8 7 7 9 6 5 42
Nicaragua 8 5 7 7 6 6 39
Guyana 7 7 7 6 6 5 38
Brazil 7 5 6 8 5 5 36
Argentina 7 6 7 6 7 5 38
Dom Rep 8 5 7 5 5 8 38
Colombia 7 5 8 6 6 6 38
Potentially relevant LatAm countries for junior mining
Panama 6 5 9 5 8 6 39
Ecuador 6 5 5 4 8 6 34
Guatemala 7 4 4 5 3 5 28
Countries of little or no interest for junior mining exposure
Bolivia 4 6 2 9 6 9 36
Uruguay 5 5 7 3 6 7 33
Paraguay 7 5 6 3 4 6 31
Honduras 7 3 4 5 3 3 25
Costa Rica 1 1 5 1 6 7 21
Haiti 6 3 4 1 3 4 21
El Salvador 1 1 4 1 6 4 17
Venezuela 3 5 1 3 1 2 15
source: The IKN Weekly house estimates
Chile: Unchanged
I always manage to arrange things so that the region’s top country for mining activity, Chile,
remains on an unchanged score but the fact is that there isn’t enough news, either positive or
negative, to move it away from this long-term stability.
Peru: Internal National Political Stability up 1 point
Three months ago we were chewing over the likely make-up of the second round run-off for
President, we now know that Pedro Pablo Kuczynski will be sworn in at the end of this month
after a wafer-thin victory against Keiko Fujimori and that’s a good thing, overall. We still don’t
know the names of most of his ministers, but we know Alfredo Thorne will be FinMin and he’s
already saying exactly the things that Foreign Direct Investment wants to hear, such as the
incoming PPK government’s “total commitment to fiscal discipline” (16). All fine and thanks to
the peace and general acceptance of the narrow result in Peru, the national stability number
gets a point added this quarter.
Mexico: Internal National Political Stability down 1 point
The main event in Mexico this quarter has only developed these past couple of weeks, namely
the social disturbances in the South of the country which have been woefully handled by the
Peña Nieto government. In a nutshell:
• Mexico tries to push through (badly needed) education reforms, including results-based
pay increases and ability tests for teachers.
22

,
• Teachers in the traditionally militant Oaxaca region go on strike to protest the move,
set up roadblocks.
• Police wade in to break up the roadblock and as a result, eight teachers are shot dead.
At this point blame gets thrown from one side to the other, with police saying that
narco groups intent on mischief shot the protesters to lay blame on police, but Occam’s
Razor has a problem with that as does the whole of the South of Mexico.
• We now have widespread protests in the South against the police force and Peña Nieto
government’s heavy-handed way of dealing with social protests, teachers have been
joined by other groups, disturbances and roadblocks have popped up mushroom style.
• We’re now at the point where outlying areas need food airlifted in due to the
roadblocks and severe shortages.
As South Mexico (Oaxaca, Guerrero) are key areas for the development of the mining industry
in the country, these problems affect our sector directly. Point docked.
Nicaragua: Unchanged
Last quarter we noted a ratcheting up of anti-mining feeling and protests in Nicaragua and
though not a major issue, it needed watching. Since then the protests seem to have died down
(or at least not gained any further momentum) and Nica remains the quiet achiever State in
Central America. No news continues to be good news here.
Guyana: National Government Miner Friendly down 1 point
The regional riser of the last couple of years has seen a point taken away for the first time in a
long time, the reason is governmental. The first is news that the government is now phasing
out VAT relief on imports of heavy machinery, a tax break that GUY.to at Aurora benefitted
from but is now being taken away for any future project development. Added to that, there’s
unofficial but persisent rumours that Guyana’s government is renegotiating its State burden and
tax deal with Aurora which, if true, raises the issue of both resource nationalism and the way in
which the smaller, less institutionally rigid countries in LatAm can and will change the rules to
suit themselves at a moment’s notice.
Brazil: FDI Friendly down 1 point
In some ways the changes in Brazil have been monumental, in others it’s business as usual.
Dilma has been suspended as President, Temer is in as interim head of state, the country is
rocked on a near-daily basis by the ‘Lava Jato’ (car wash) corruption scandals that leave no
region or political party untouched (including Temer and several of his newly appointed
ministers). My favourite recent one is the story of a second-hand military helicopter bought by
the regional government of Pará a couple of years ago and somebody has just noticed that
even though the U$40m used to pay for it left the government accounts under receipt, the
helicopter never arrived.
On the subject of Pará, the trials and tribulations that Belo Sun (BSX.to) is going through as it
tries to get its long-delayed environmental permit for Volta Grande are a more concrete reason
to take a point away from Brazil this quarter. Not a good precedent for jungle-based projects.
The final negative is the exchange rate. It’s still cheaper than in the haydays of BRIC, but the
Brazilian Real (BRL) is quickly becoming expensive again. After spending most of 1q16 in the 4
to 1 range versus the US Dollar and still at 3.65/1 at the end of Q1, the BRL is now at 3.20 to
the dollar and its advantage is evaporating quickly. The cheap mining opex numbers we’ve seen
out of the country in the last couple of quarters aren’t going to last long.
Argentina: National Government Miner Friendly down 1, Internal National Political
Stability down 1 point
The Argentina section in the last edition of the Regional Risk Review, in IKN360, turned into a
full scale essay and I’m not going to waffle on so much this time, but here’s a couple of lines
repeated from the conclusion section of that piece:
23

,
From a strict investment point of view I think there could (not will, but could)
be a good window for a trade coming soon. The big tell will be the
inflation rate, watch that number like a hawk because if the Macri
government can get inflation ticking down (real down, not make-believe
down) it’s the classic world signal for FDI to start flooding into a country.
That’s the key point today. We haven’t seen Argentina inflation come down at all so far, the
latest figures show inflation running at around 40% and even the current Central Bank
forecasts (likely to be rose-tinted) have inflation forecast at 34% for the end of 2016. Also
tellingly, two weeks ago the Central Bank had to do a significant round of money printing as it
created ArgP$4Bn in national currency out of thin air (and this time really out of thin air, no
mitigating arguments of the type you get from the US Fed) in order to meet its payment
schedule obligations. That’s not a good sign at all that this new Macri government is getting the
inflation genie back in the bottle. Added to that, the voices of serious critics (rather than knee-
jerk politicos) are starting to be heard. We’re now in the promised land of “second half of
2016”, the period in which Macri said that the macro numbers in the country would improve.
We’re already getting excuses from the President (17) (Macri: “I said that the second half of
2016 would be better than the first, I didn’t say that Argentina would have all its problems
solved by now”) and also critics are raising their voices such as the head of the Peronist (PJ)
party and ex-governor of San Juan, JL Gioja, who said (18), “We’ve been lied to, we’re now in
the second half of the year and nothing has changed”.
People, I’ve said it before and I’ll say it again, be careful of false dawns in Argentina. You
cannot change the fortunes of a deeply FUBAR country just by changing its government and
trying to lead it in a new direction for a year or two and I’ve watched nervously as mining
companies, Fortuna Silver (FVI.to) (FSM) at the forefront with a very risky move into the
country via its purchase of Goldrock (GRM.v), have rushed in where angels fear to tread. I’ll
repeat, until we have clear indications that Argentina’s macro numbers are improving, it’s way
too risky a place to get overexposed. If things do improve there will be time enough to take
positions and feel the benefit, but the hype has been too much too soon and stock valuations
don’t reflect the continued high level of political risk.
Colombia: Community/Social Miner Friendly up 1 point, Internal National Political
Stability up 1 point
Colombia is the best performer this quarter, up two points on two separate issues. First the
mining-specific one and that’s based around the impressive improvement at the Continental
Gold (CNL.to) Buriticá project in the country. That’s come from 1) the government initiative to
get rid of the illegal/informal/artisanal mining community there, a plan that’s gone deeper than
I imagined it would and has cleaned up the area well, then 2) the government being obviously
keen to get the CNL environmental permit awarded and how national and regional bodies are
now working together in order to expedite that important piece of paper for the future of that
project. As we noted a couple of weeks ago, the timeline to the permit award may have been
set back a little (from “4q16” to “4q16/1q17”) and we need to be careful about any more
slippage on that, but the word from inside the country is still highly positive and we can now
expect that permit to happen.
Second the FARC/government cease-fire, which has put the Uribe right-wing opposition’s noses
out of joint and they’re claiming all sorts of dire consequences and FARC cheats in the deal, but
we on the outside are obliged to take this as a very positive development for the stability of
Colombia. I wasn’t joking when I called Juan Manual Santos as a favourite for the Nobel Peace
Prize this year and any deal that stops people from shooting at each other, no matter how
rough or in need of details, is a good deal in my book.
Colombia is by no means a mining panacea, its bureaucracy is still a disaster and we’re about to
get a headline-catching regional referendum that will see locals vote against the AngloGold
Ashanti ‘La Colosa’ mine project in large numbers. Optics won’t be great on that but they won’t
take away from the steps forward we’ve seen in the last three months. Tread carefully in
24

,
Colombia, know the local rules, but it’s starting to open up again.
Potentially relevant countries
Panama: Mining Culture up 1 point
Word is that (19) Panama is in the final stages of permitting the Pershimco (PRO.v) Cerro
Quema project and as long as the company makes ‘mitigations’, it’s currently being considered
viable by the governmnt bureau. This would be the first environmental impact permit awarded
in the country for a long time and send a positive signal to the markets about the permitting
track in Panama and that’s not a bad thing. It’s just a pity PRO.v is run as a lifestyle company
by total idiots with no regard for shareholders, plus the debt on board and the small detail
about the way its concession is due to lapse next April. If it weren’t for the details it could be a
decent play at a cheap price. It’s not.
Ecuador: National Government Miner Friendly down 1 point, Internal National
Political Stability down 1 point
Ecuador loses two points this quarter and brings its rise in the poll to a shuddering halt.
Reasons are simple:
• Internal National Political Stability loses a point because we’re now starting to feel the
shadow of the upcoming February 2017 Presidential election in which current President
Rafael Correa isn’t running (he’d have completed ten years in charge come the day of
the handover). Ecuador is in for a rough campaign, with the opposition parties smelling
their fist chance of getting back into power now that the succesful and popular (despite
all you’ve heard) Correa is stepping aside. Meanwhile, the Correa government will be
looking to continue its mandate undr a new leader, probably current VP Glas.
• National Government Miner Friendly loses a point because the contents of the Lundin
Gold (LUG.to) feasibility study shows that the country is still expensive and difficult
place in which to work. Enscapulated by “if a world class deposit such as FDN only
comes out with average looking economics, how will the normal-level deposits ever
make money?”. Part of that are State burden levels in Ecuador which are well
documented, but equally important is the country’s currency, the US Dollar, whihc
affords no forex relief or cheaper capex/opex.
I’m still long INV and exposed here, that won’t be for much longer. We can and will revisit the
scene in Ecuador once the February 2017 elections are done as things may have changed
(hopefully for the better), but there’s no reason or rush to get back here.
Guatemala: National Government Miner Friendly down 1 point, Internal National
Political Stability up 1 point
The Jimmy Morales government has so far been reasonably benign, letting the CICIG
committee move on the high profile corruption cases (Otto Pérez Molina etc) to bring social
justice to the country but also letting business be business and not going too deeply into what
must be a whole stack of bribery suspect papers. On the other, the recent court cases that have
gone against both the KCA El Tambor mine and a highly contentious hydro-electric dam project,
stopping both in their tracks due to the lack of prior consultancy.
Market Watching
Goldman Sachs on the China metals market
Yes we do need to take into account the Vampire Squid’s reputation for fading its own clients,
but over the months and years I’ve come to apprciate the company’s regular ‘Metal Detector’
report as it provides useful insight, particularly on a macro market level. This week’s edition
(thank you reader N, always appreciated) ran this report on GS’s recent visit to China and the
25

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state of the (mainly industrial) metals market. It’s good enough to re-print here so I offer it
with little further ado but I will direct your eyes to points three, four and five, the most
interesting in my view with the market trends most likely of use to junior metals investors.
Metal Detector: China trip take aways
We attended the Asian LME conference in mid-June in China; at the conference, we talked with
traders, investors and producers. Based on our discussions, onshore investor sentiment appears
neutral on base metals in 2H16. While Chinese metals demand appears to have short-term
support via strong Chinese credit growth in 1H16 and anticipated continuous credit support in
2H16, the divergence of metals fundamentals are generally expected to continue to weigh on
prices differently. The metals that have the most bearish supply-side dynamics (particularly
copper) are expected to continue to underperform. Below are some of the key trip takeaways:
1. Metals perceived to be supported by strong Chinese credit short term, lack of US dollar
upside. More recently, we discussed the impact of the unexpected ‘leave’ outcome in the UK’s
EU referendum on metals and noted that market expectations for China’s further monetary easing
appear to be rising in order to offset the external weakness and stabilize China’s financial market.
As such, some market participants expected strong credit growth could support metals demand
short term. Meanwhile, the conviction among China investors for another rate hike by the Federal
Reserve towards year-end is now much lower post the Brexit vote. If the Fed does not tighten
meaningfully, which is what the onshore market now seems to expect, metals prices are also
expected to be supported short term. There are also fears in the market over a sharp devaluation
in China which would present headwinds for metals prices and lead to market speculation about
large moves of prices short term. Meanwhile, most participants believe that the fundamentals of
the base metals market are unchanged. As such, they continue to see a return of fundamentally
driven markets in base metals in 2H16.
2. Concerns over shadow banking has re-emerged. Following conversations with market
participants during the conference, there appeared to be less concern over local government
debt, but rising concerns about domestic shadow banking. Undiscounted bank acceptance notes
(BAN) fell sharply following China’s escalated restrictions on BAN business in May. However,
other forms of shadow banking such as P2P (peer-to-peer financing) that are less statistically
transparent and not included in the TSF (total social financing) are concerning the market.
3. There appeared to be consensus that a bull metals market is unlikely in the medium
term, given China’s transition from old economy to new economy, which is consistent with senior
government officials comments that China’s economic growth will be an L-shaped recovery. Most
market participants expect strong infrastructure activity to continue through the course of the year
given that the Chinese government has been increasingly reliant on this to support economic
growth, but they also expect a gradual slowdown of property development owing to the high
property inventory level in the lower-tier cities.
4. Copper bearishness remains intact. Most market participants we met expect China’s copper
demand to be moderately higher this year as a result of an uptick in property construction and
demand from solar PV cable (photovoltaic cable) producers, as many domestic PV projects
rushed to be commissioned before the subsidy policy adjustment on June 30, 2016. However,
they generally expected copper demand to weaken in 2H as orders from PV producers are set to
slow, and major air-conditioner producers have already reported production reduction plans in the
coming months. Further, there appeared to be consensus that ample copper concentrate supply
is a price risk for the rest of the year as most market participants do not see domestic smelting
capacity bottle-neck as a problem, and most participants we met believed a gradual increase of
copper treatment charges was evidence of sufficient availability of copper concentrate. In fact,
Chinese copper output through January to May this year has already grown by 10% yoy, which
suggests that the risks surrounding our output forecast of 6% for the whole year are skewed to
the upside
5. Consensus was that zinc is indeed likely to be a bullish exception. Most market
participants we met agreed with us that zinc is the bullish exception among base metals.
However, there is some concern about the potential ramp-up or re-start of Chinese zinc mines
with no consensus on how China’s environmental restrictions would impact domestic zinc mining
activities, even in a strong price environment. So far however, Chinese treatment charges
continue to decline, suggesting the output response to date has been insufficient.
6. Aluminium production response to happen, but remain slow. We didn't receive much
pushback on the view that aluminium supply would respond to strong margin but at a much
slower pace than steel, and there appeared to be consensus that Chinese aluminium production
costs have moved lower and China will still expand capacities in the next few years which is
bearish aluminium. But most people that we talked to expect the ramp-up of domestic production
in the next 3-6 months and large unreported stocks outside of the LME system were downside
catalysts.
7. Reports of Chinese government metals stockpiling may have been misleading. Local
26

,
media reported on June 14, 2016 that six major domestic aluminium producers held a meeting to
discuss another round of production cuts and stockpile plans. We found that most market
participants were sceptical about whether an actual agreement had been made. Then, on June
16, 2016, the General Office of the State Council released a guidance note to promote industry
restructuring, transformation and efficiency in the non-ferrous metals industry. Local media
reported that China planned to boost metals stockpiles. We checked the guidance note on the
government website and found nothing to suggest China has any immediate plans but there is
likely to be a long-term plan to stockpile reserves of metals in which China is short (i.e. copper).
8. The ferrous complex was generally expected to be supported short term by those we
spoke with. There was also some discussion on rebar and iron ore during the meeting. Most
market participants we talked to expect to see sequentially less support from downstream
demand in the next 1-2 months. However, as the market generally expects the amount of fiscal
and monetary support in 2H16 to be similar to 1H16 (particularly infrastructure spending), this,
together with a seasonal uptick in demand during September-October, could support sentiment
and thus the price of rebar in the short term. And while market consensus appeared to be bearish
on iron ore on a long-term horizon, the anticipated temporary price strength in rebar may provide
a key factor to support iron ore prices.
9. The degree and timing of China's supply-side reform is difficult to predict. There seemed
to be low conviction that we will see a similar size of capacity cuts (particularly in the steel
industry) in 2H16 as that seen in 2H15, as producers saw a strong increase in margins on the
back of credit stimulus in 1Q15. Most people we talked to thought the impact of China’s ‘supply-
side reform’ is hard to anticipate. However, given the geographic closeness between
Hebei/Shanxi and Beijing, political influence could have an outsized effects in those nearby
regions than anywhere else. Indeed, Hebei and Shanxi are two provinces that we’ve seen the
most capacity curtailments for steel and coal industry, respectively, in recent years.
Minera IRL: Step by step
Things are coming together at Minera IRL, if you’re like me then you’d like it to all happen
faster but these things do take time and the progress now being made is good and solid. First
up, IRL is now in the process of getting itself re-listed in Canada, which is going to take a
couple of months but the paper trail is now off and running. That’s good but it’s not going to
provide any breaking news anytime soon.
What might however is the meeting going on in Ollachea this weekend, as the Minera IRL SA
top table team, including Diego Benavides, are in the town as I write these words in order to
meet with the local community, inform them on the progress made since Team Hodges was
kicked out, make good on social commitments (Team Hodges’ dirty tricks tactics in 2015 also
included delaying previously agreed social deals in order to pressurize the Ollachea community)
and most importantly, get the Ollachea community’s agreement to ift the ban on access to the
project and allow the company to go ahead with its planned 2016 drill campaign (which will be
funded by the Cofide bridge loan cash, the first time any of that is used aside from the paying
off of the Macquarie debt). Assuming the permission is granted by Ollachea, IRL will have good
news to bring to market.
I’m not privy to the timeline for re-listing of IRL, not in Lima or in Canada, but on a personal
level it’s good to know my contacts in the town of Ollachea are still alive and kicking. According
to said source the town of Ollachea is keen to get the project moving again and will welcome
Diego Benavides with open arms when he arrives in town this Sunday evening (I’ll get a better
briefing of events tomorrow Monday, most probably).
PS: Before this edition closed, I received a photo from the scene at Ollachea this Sunday
evening and put it on the blog (20). Quite a crowd for a town that small, it looks like Diego
Benavides is very welcome there. Another Daryl Hodges/Jaime Pinto lie duly de-bunked.
Asanko Gold (AKG): Its short attack and the company response
On the blog last week we documented the unfolding short attack story around Asanko Gold
(AKG), first by offering up the link to the K2 Associates report critical of the company and
saying there’s a potential 90% downside on the stock price (21), then by noting that AKG had
apparently held a non-public conference call with anal ysts sympathetic to its cause, which is
naughty according to the rules (22). I invite you to catch up on the doings and dealings via
27

,
those two posts, what I want to elaborate on follows on from the AKG conference call.
Well in fact that should be callS, because I’ve now learned that Asanko last week held not one
but two private, off-record Conference Calls with analysts and funds that cover or own AKG.
And what’s interesting is that IKN has learned that even people who are “pro-Asanko” and were
invited to participate came away with the feeling that they hadn’t been told the whole truth.
Under the circumstances, that of a private (and probably rule-breaking) CC convened to debunk
the shorters and refute arguments, the lack of clarity on certain issues didn’t go down as well
as AKG might have wanted. The specifics tend to get down into the nitty-gritty of the K2
Associates arguments against AKG so to get the full picture you’d need to read their hit piece
first, but I’m going to take those as read and provide a simple list. According to IKN sources:
• AKG said that K2 Associates did not include drill data beyond 2010. That’s false, as
anyone reading their literature and support documentscan easily see.
• K2 raised issues about the projected strip rates in the Asanko mine plan, which AKG
refuted by stating that it’s not true the mine plan final strip ratio is below that of the
previous mine owner Resolute’s average. However that comes across as a Straw Man
argument because that’s not what K2 claimed in its document. The K2 argument is that
in the years to come (up to shell 21, to be exact) the AKG strip ratio looks very low
compared to evidence and history. Not the same by any means.
• AKG claims that K2 is using the average strip ratio of previous owner Resolute as its
benchmark, in fact that doesn’t take into account the real key data of marginal strip
rate. Again, hints at a Straw Man.
• AKG was apparently asked by one person on the call whether its reserve estimate
includes assumption that the ore zones expand beneath Resolute’s old pit. This is a key
point because previous owner Resolute states ore zones were thinning at the end of its
tenure and it was one of the main reasons they gave up the concession. According to
the source AKG got weasely on this point, talking about the way their data implies this
and that without bringing out solid evidence. Even to the taste of an “AKG Friend”, the
company avoided answering this question directly and seeded doubt in their mind.
So four matters which may look like nitpicking, but devils are in the details on these matters
and as stated, you would have
thought that a private, off-record CC
with people sympathetic to your cause
would be the place to lay out your
argument in a transparent manner.
My source came away from the CC
that was supposed to bolster the AKG
cause with more doubts, rather than
less, and this effect may be behind
the lack of response from the stock
price after the CCs were done. This
five day chart of AKG versus the XAU
index shows how the stock didn’t get
any of the big boost enjoyed by the
sector on Thursday and especially
Friday (the XAU popped 5% Friday, a
big move for the index and the first time it’s been above 100 for a long, long time).
Ultimately this AKG battle will be resolved by hard numbers and the next batch, the 2q16
production results, are going to be an important set to consider. AKG is likely to guide strongly
for the quarters to come but the timing of the short report attack, just before quarter’s end,
means that the 2q16 numbers are going to be relatively free from bias and should provide
28

,
strong clues as to who is right and who is wrong. I’m staying neutral on this story though, for
one thing we’re in a bull market (Mr. Partridge) and those can cover multitudes of sins. For
another, AKG has a distinct data advantage and all the numbers about all its mining all of the
time, we on the outside are always reduced to best-guessery and that could mean K2 is plain
wrong in its assumptions. We shall see, but the AKG 2q16 production report will be one pored
over closely by the mining world, K2 has seen to that and AKG didn’t do itself any favours by
leaving gaps in its responses and doubts in the minds of sympathizers during those grey-areas
private ConfCalls last week.
Conclusion
IKN373 is done, we end with bullet points:
• Today’s buy call on Miranda Gold (MAD.v) also marks a new development in my
personal fight against the scumbag elements of the Canadian junior mining world, the
thing that’s fed the open IKN blog over the years. There is a shorter game and a longer
game involved here. Firstly, the shorter game is that I’ve noticed over time that most of
the pondscum don’t mind you calling them names as long as they get their money. So
this time I’m going to disrupt their game, we get to take a share of their profits away
from them before they even start, they get to worry when I (we) decide to dump into
the bid, their margins drop. Secondly and more important is the long game, the only
real way of weeding these excuses for human beings out of the marketplace is to shine
a light on their practices, show more people how they do what they do and how much
advantage they hold over the suckers. When more people see the M.O, more people
can play it and the law of diminishing returns kicks in. In their secretive little world of
shame knowledge is power, so share the knowledge and the power disappears.
• Aside from my new spec position in MAD.v, the precious metals market looks as though
it’s now moving into a new bullish period. Things are looking up and my best call for
you is still the same; whatever your preferred vehicle get long and stay long. If you
don’t believe me, take it from Old Turkey instead.
• My personal jury is out on copper. I’ll give it July to make a decision. Zinc, on the other
hand, looks in great shape and it’s only a matter of time before a wider audience
discovers the best kept secret in the sector, TK.v.
• 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
29

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Footnotes, appendices, references, disclaimer
(1) http://incakolanews.blogspot.pe/2015/12/ten-random-predictions-for-2016.html
(1a) https://nftrh.com/
(2) http://www.slideshare.net/Adnet/miranda-golds-willow-creek-project?next_slideshow=1
(3) http://www.mirandagold.com/i/pdf/Corporate_Presentation.pdf
(4) http://www.mirandagold.com/s/NewsReleases.asp?ReportID=753382&_Type=News-Releases&_Title=Miranda-
Gold-Closes-2.6m-Non-Brokered-Private-Placement
(5) http://www.mirandagold.com/s/NewsReleases.asp?ReportID=752333&_Type=News-Releases&_Title=Miranda-
Increases-Private-Placement-To-2.6-Million
(6) http://www.redplugcapital.com/
(7) http://palisadeglobal.com/
(8) http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=11122816-1836-
8705&type=sect&TabIndex=2&companyid=96915&ppu=%252fdefault.aspx%253fcompanyid%253d96915%2526amp%
253bformtypeId%253d346
(9) http://finance.yahoo.com/news/riverside-samples-7-24-g-123000811.html
(10) http://finance.yahoo.com/news/b2gold-2016-exploration-west-africa-073000494.html
(11) http://www.sandstormgold.com/news/2016/index.php?&content_id=499
(12) http://finance.yahoo.com/news/continental-gold-samples-high-grade-100000662.html
(13)
http://research.dundeecapitalmarkets.com/en/~/media/Dcm/Publications/CoverageListResearch/2016/June/C/CNL0628
16.ashx
(14) http://finance.yahoo.com/news/tinka-commences-property-wide-airborne-124500483.html
(15) http://finance.yahoo.com/news/tinka-announces-filing-ni-43-141700939.html
(16) http://elcomercio.pe/economia/peru/alfredo-thorne-compromiso-total-disciplina-fiscal-noticia-1914005
(17) http://www.lanacion.com.ar/1914771-mauricio-macri-no-dije-que-la-argentina-iba-a-tener-todos-sus-problemas-
resueltos-en-el-segundo-semestre
(18) http://www.lanacion.com.ar/1914806-gioja-contra-macri-nos-mintieron-llego-el-segundo-semestre-y-no-pasa-nada
(19) http://www.prensa.com/sociedad/Azuero-amenazada-mineria_0_4519798088.html
(20) http://incakolanews.blogspot.pe/2016/07/minera-irl-news-in-ollachea-tonight.html
(21) http://incakolanews.blogspot.pe/2016/06/the-asanko-akg-short-report.html
(22) http://incakolanews.blogspot.pe/2016/07/naughty-naughty-asanko-gold-akg.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
30

,
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
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
31

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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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