IKN #380Premium

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The IKN Weekly
Week 380, August 21st 2016
Contents
This Week: Trade heads-up, In today’s issue, We’re early in the cycle, Don’t pay any old price.
Fundamental Analysis: Atico Mining (ATY.v) 2q16 financial and target update.
Stocks to Follow: Overview, Atico Mining (ATY.v), Wesdome Gold (WDO.to), Riverside
Resources (RRI.v), Tinka Resources (TK.v), B2Gold (BTG) (BTO.to), Regulus Resources
(REG.v), Continental Gold (CNL.to), Sandstorm Gold (SSL.to) (SAND), Miranda (MAD.v).
Copper Basket: Overview, HudBay Minerals (HBM.to) (HBM), Revelo Resources (RVL.v), NGEx
Resources (NGQ.to).
Low Cost Producer Basket: Overview, AngloGold Ashanti (AU).
Regional Politics: Mexico: Security payments, Argentina: Minister of Energy and Mining under
pressure, Argentina: Environment minister Bergman “A lobbyist for mining”, Ecuador: Mining is
becoming an election campaign issue, Peru: The new government lays out its plans for mining.
Market Watching: Tahoe Resources (TAHO) (THO.to) and the Guatemala fiscal reform,
Dalradian Resources (DNA.to) mystery solved, An overview of Avino Silver & Gold Mines Ltd.
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 looking to add to my Atico Mining (ATY.v) position next week. Its 2q16 financials were
interesting, it’s still a misunderstood stock and my original plan to hold to 70c by the end of the
year is almost certainly a case of leaving cash on the table for somebody else.
In today’s issue
• Atico Mining’s quarter impressed me greatly. I wasn’t expecting to run another long
analysis piece on the stock so soon, under the circumstances it’s a no-brainer to do so.
• I defer on purchasing NGEx Resources (NGQ.to) because I can’t get past my aversion
to Argentina exposure. And I screwed up.
• It’s a gold bull market and not only that, it’s early in the cycle. Today’s intro has more
so buy, hold, win.
• My aversion to silver miners is well-known, but that never stops me from trying to find
something of interest at current valuations. Avino Silver (ASM.v) (ASM) always looked
pretty doggy to me, but its recent results demand a second look. In ‘Market Watching’.
We’re early in the cycle
If you haven’t seen the 29 minute round table discussion video (1) I stuck on the blog last week
featuring Brent Cook and Joe Mazumdar of Exploration Insights, John-Mark Staude of Riverside
Resources (RRI.v) (a company I currently own) and Morgan Poliquin of Almaden (AMM.to) and
1

,
Almadex then do so, it’s one of the better ones I’ve seen recently and there’s plenty of
intelligent insight from all four participants to get your mining brain working.
But of all the comments made perhaps the best for me came from Joe Mazumdar who pointed
out that, so far at least, mergers and acquisitions in the mining space in 2016 have been 1)
friendly and 2) nearly all pure-paper deals, with either very little of no cash component at all.
That’s a great point, one of those
market generalities that’s easy to
spot and shows that we’re still
early on in this current cycle.
Along with Morgan Poliquin
confirming the IKN view that
there really has been sea-change
in the mining sector and this
current rally isn’t about relief in a
bear, it truly is a change of trend,
Mazumdar’s observation tells us
something simple; that mining
companies haven’t started to fight
between each other for the next
round of assets and once they do,
the friendly all-share type of M&A
that goes through without fuss or
mess will become the exception
rather than the rule. To the fore will come paper+cash deals, all-cash deals, hostile bids out of
the blue, third party interlopers, target companies finding White Knights (to save their own
boardroom hides) and all other stripes of mergers and buyouts.
We’re now two months on from Brexit and gold has just been through another soft and quiet
week, with more selling of bullion from GLD
to add to the wall of worry (955.9mt as at GLD gold holdings, Brexit to date (metric tonnes)
this weekend) and the edge taken off 1000 990
silver’s run as it drifts back up to 70X. 980
970
We’ve even had a few of the braver anti- 960
goldbug commentators piping up and telling 950
940
us that gold’s a waste of time. Again. Pay 930
920
no heed, nothing goes up in a straight line, 910
900
August has gone quiet and what’s more, it’s
890
done so at the top of the current gold 880
870
range rather than at the bottom. Most of 860
the time the advantage in capital markets is
skewed enormously in favour of the larger
player but there are some times and
circumstances in which being small and nimble offers an edge, as noted below I’ve been taking
the opportunity to top up on positions thanks to the opportunities offer by smaller weaker
hands and impetuous traders. I suggest you do the same, because when gold breaks
U$1,400/oz you’ll have to pay more. Make no mistake, Joe Mazumdar is right about where we
are in the current mining cycle and anyone bailing now on quality names with longer-term
futures is making a big mistake. This has only just begun.
Don’t pay any old price
Long-time reader AK wrote in on Friday with a thought that’s worth expanding on here. I’ve
edited his mail very slightly, but only to keep it on-topic and the issue as clear as possible
“I missed buying Atico...I have become accustomed to the Monday pop on your recos,
but this is the first one that has truly beaten me. I was hesitant because of copper
heading generally south and thought I might get better value. That worked well! On top
of all that I honestly don't have the time to be watching stock for a good entry point, so
2
61/32/6 61/72/6 61/92/6 61/1/7 61/6/7 61.7.8 61/21/7 61/41/7 61/81/7 61/02/7 61/22/7 61/62/7 61/82/7 61/1/8 61/3/8 61.8.5 61/9/8 61/11/8 61/51/8 61/71/8 61/91/8
mt
source: SPDR GLD data

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I have a question.
“Do you experience the same problems, with the Monday pop sometimes getting a bit
crazy? I have noticed that 'most' picks usually return to the low of the typical Monday
gap up in the following days. Any advice on a way to select a price range for not being
too tight as opposed to not taking 'any old price'?”
Good mail. To begin let’s use AK’s example of Atico and take a closer look.
• On the weekend of IKN376, edition that covered and called buy on Atico Mining
(ATY.v), it was a 44c stock.
• That price was the bottom of its recent trading range of between 44c and 49c, a tight
rang for a junior that had held for at least a month before July 24th.
• Monday July 25th, the day after the reco, ATY traded at between 47c and 48c all day.
Volume was modest.
• ATY stayed at or under 50c for nearly all the, only breaking higher at the very end of
the week on Friday afternoon, July 29th.
• For the first part of August (before the 2q16 financials were released) ATY continued to
trade quietly, typically around 50c with a spike higher or lower, here and there.
• Then came a change, when on August 12th a buyer stepped in for over 2m shares.
That’s a lot of ATY as it usually trades under 100k per day. In short, somebody else
spied value here.
• Then came last week, the 2q16 financials (see below for anal ysis of those) and then a
new buyer who took 400k+ and was happy to pay up to 59c.
• Here we are today.
That’s how I interpret the recent action in ATY.v (hindsight and all that jazz) and to sum it up,
here’s a visual of the last two months in ATY plus scribbles.
Following up, here’s the comment made on ATY the following weekend in IKN377. I wrote:
And I was all “Oh rats here were go again” when ATY opened up nearly 9%
on Monday at 48c, but after a few minutes of thought I bought some anyway
because 48c isn’t outside its recent trading range.
Now it’s true I didn’t buy a full position that day, but buy I did because even though there was
something of a pop trading wasn’t stupidly hot and volumes weren’t out of control either. And
as AK correctly points out in his mail, prices then proceeded to bump along at the low end of
the new range for days afterwards. AK also points out a real world issue, IKN Weekly readers
have better things to do than watch the intradays. Quite right too. And with all that now in
place we get to the grain of the matter which, to remind us all, was, “Any advice on a way to
select a price range for not being too tight as opposed to not taking 'any old price'?”. (Deep
breath, clears throat, here we go):
3

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The answer is that I don’t have any advice for you. Sorry, you need to make your own decisions
on this so the way I approach things will always be different than they way you do. But what I
can do is talk about the way I try to write The IKN Weekly, rather than tell you how to read it.
A lot of you readers have been around a long time, since the very getgo in fact, others of you
are fairly new round here and all are welcome of course, but longer-term readers know that the
last thing I’m looking to do is cause a price pop in any stock. When it comes to the whole set-
up of The IKN Weekly it’s specifically not in the business of tipsheets or promotion noise-
making and a reflection of that is its readership. A certain type of subscriber tends to stick
around while another leaves to go and find a different type of service somewhere else, written
by a different hand. And that’s fair enough, there are no right answers in this crazy game and
sometimes, following more aggressive pitch-merchants than I can be more profitable for you
the trader. I’ve never been aggressive or pushy in the marketing of the product, a deliberate
choice and although I will on occasion use some soft marketing on the I’m not into all the “BUY
NOW! MASSIVE GAINS!” stuff and nonsense that promises instant riches to the gullible end of
the investor space. The upshot is, I hope, a service that fits in with the attitude of the longer-
term reader. And hey, with eight years and counting the Weekly is doing okay.
On a personal level I don’t fret about getting or not the best price to the penny. Sometimes it’s
pretty obvious that the stock is being overbought on the first blush and it’s going to drop
afterwards (the volume is normally the tell) so I’ll hold off until it drops without worrying too
much. Other occasions I’m good about buying the new price because...
...it’s still in the trading range.
...I’m rarely into a fliptrade win one counts in days.
...I’m normally after larger gains over 12 months, missing the first 10% doesn’t hurt.
...I get paid to analyse for others as well as trade for myself.
...as I get older, not sweating the smallstuff becomes easier.
...any combination of the above.
It needs to be stressed that although I write for an audience what’s written is the product of
trying to convince myself to buy, hold or sell any given stock. That the process gets written
down for others to see is part of the deal, but the essence of The IKN Weekly is what I do with
my money. As noted previously it’s hardly the perfect system for the third party looking in, we
all have different circumstances and needs when it comes to the moment to hit the buy button,
but I think it’s the least worst and keeps things as transparent as as possible.
However, there’s a difference between a bear market and a bull market. The new scenario in
2016 means juniors are getting price pops on any type of news, not just a scribe’s
recommendation. Forget killer drill holes that shoot things higher or dubious rumours of visible
gold that have started recent feeding frenzies, I’ve watched in the last couple of months as
explorecos move up bigtime on soil sampling news, trenching results, IP maps, things of that
ilk. It’s a world away from 2013-2015 and though it’s not ideal I know that the people who read
my Sunday evening calls will affect its share price on Monday morning. I don’t like it, I accept it
as part of the deal. We need to be realistic because in such a market atmosphere even
somebody you goes out the way to dampen down expectations on any new purchase (or target
upgrade) is going to cause buying pressure in small and sometimes thinly traded shares.
The bottom line is that you need to use your own judgment. Yes, it’s that simple and cruel. The
IKN Weekly does not sugar-coat the market and doesn’t not provide facile answers for difficult
and nuanced questions because by their very nature, stock markets are difficult. Just imagine
how many Ferraris you’d see on your street if they were easy.
4

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Fundamental Analysis of Mining Stocks
Atico Mining 2q16 financial results and price target adjustment
Warm and fuzzy intro
This wasn’t supposed to happen. Atico Mining (ATY.v) is a stock I’d ignored (almost
deliberately) for a long time and then just four weeks ago I saw it as a decent buy under
today’s market circumstances, but I’m also keenly aware that it’s a small producer with a small-
ish float and not the type of pick that’s cut out for everyone. The idea was to buy some, hold it
through a couple of quarters’ worth of financial results, hit a reasonably conservative target on
a small position and then see how the lay of the land was. The idea was not to return to the
coverage and go detailed on it just four weeks later and raise the target price.
But that’s what happens today because if there’s one thing I cannot ignore, it’s a glaring
opportunity. Post close Tuesday 16th August ATY delivered its 2q16 financials (2). In superficial
ways the numbers were in-line with expectations, but inside the numbers are several significant
differences to our model. That’s normal for an early stage of coverage, especially with a small
producer such as this one and in this case it’s good, because the differences offer plenty of
positive insight into the financial future of the company. We on the right track with this long
position and the share price pop we saw last week after the numbers had hit was fully justified.
My 70c target to end year now looks lowball, ATY.v has the capacity to go a lot higher.
Q2 production and sales
Enough blabbering, time for some numbers and the best place to start is with the production
and sales figures, because we knew about production thanks to the July 18th production report,
but in the original IKN376 analysis we necessarily had to take a guess or three at sales.
The big issue at ATY this quarter was a lag in sales caused by a truckers’ strike in Colombia that
delayed the end-quarter shipment and made caused a big sales miss. Here’s how ATY put it in
its 2q16 production NR:
“Despite having a record quarter in concentrate production, the Company only delivered one of
the two concentrate shipments scheduled for this quarter due to the national transportation
union strike in Colombia. The Company anticipates that this interruption will result in higher
ending concentrate inventory and lower sales for the quarter, as revenue from the second
scheduled shipment will be recognized in the third quarter.”
Up to last week we didn’t know how big the big was, we do now and here are the paydirt lines:
Copper sales 2.108m lbs. We’d guessed at 2.8m lbs
Gold sales were 1,134.2oz. We’d guessed 1,500oz
In other words, I guessed too high on sales of both payables and that means my guesstimates
for revenues, costs and operating profits were skewed to reality as well.
ATY: Copper production and sales, per quarter
6.5
6
5.5 5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
5
41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2
Mlbs Cu ATY: Gold production and sales, per quarter
6000
copper prod Mlbs payable copper Mlbs 5000
copper sold Mlbs
4000
3000
2000
1000
0
source: company filings
41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2
Oz Au
gold prod oz gold sold oz
source: company filings

,
Average net selling price for the quarter was U$1.96/lb copper (we’d slated U$2.08). As ATY
missed its last concentrates shipment before the quarter closed, it seems the average selling
price was weighted to the early part of the quarter. That’s going to improve substantially in
3q16 now that copper’s fluctuating between U$2.15/lb and U$2.25/lb. Meanwhile, average net
selling price for gold was a tiny U$297.77/oz. This was due to 1) adjustments from payments
form previous quarters stacked up on the small total amount of ounces. Can expect that
number to increase substantially in the next couple of quarters, not least because ATY now sells
300 oz/qtr to Auramet on a forward sales deal at U$1,260/oz.
To sum up sales, they were lower than expected both in quantity and ticket price. You may
have thought that a bad thing, but the fact that ATY managed to contain the operational and
overall losses in the quarter while suffering that sales glitch means they’re doing other things
right and that’s the first glimpse of why I think ATY is much better than meets the eye.
Q2 financial results and a look towards the rest of 2016
Time to turn pounds and ounces of metal into dollars (and please recall, as ATY reports in US
Dollars that’s the default currency in this anal ysis today.
The operations overview chart has the visual on the dollar numbers:
ATY.v: Operations overview
22
20
18
16
14
12
10
8
6
4
2
0
-2
6
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 tse61q3 tse61q4
$m
revenues total cost of sales Income from mine ops
source: ATY filings, IKN ests
Revenues were U$3.6m, I’d guessed at U$6.6m
Total costs were U$3.662m, I’d guessed at U$7.23m
Unsurprisingly considering our high guesses on quantities shipped, revenues were much lower
than the model. That means ATY registered a
ATY.v: Income from Mine Operations
small loss in the income from mine item (less
10
than $3,000) and while I’d guessed the same, 9
8
my baseline figures were skewed because I 7
assumed higher sales being offset by higher 6
5
mine costs and higher depletion/amortization
4
(the DD&A number coming in particularly low at 3
2
$1.367m). Here’s the income from mine
1
operations data (above) isolated, again showing 0
-1
that virtual break-even on ops alone in Q2.
-2
In the end it doesn’t matter much to the P+L
side of things and once we run the numbers
through the spreadsheet the operating profit and
net profits we saw from ATY were similar enough to our projections on this first pass to pass
muster.
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 tse61q3 tse61q4
source: company filings/IKN ests
srallod
fo
snoillim

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ATY.v: Earnings
8
7
6
5
4
3
2
1
0
-1
-2
-3
7
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 tse61q3 tse61q4
$m
Income from mine ops
pre-tax earnings
net earnings
source: ATY filings, IKN ests
I’d forecast a pre-tax loss of U$2.3m and a net loss of U$2.8m. In the end those were a
U$1.715m loss and U$1.413m loss respectively, but both were “small loss” and expected.
However, I’m sure by now your eye has strayed from the 2q16 results columns in the above
charts and to what we can expect in 3q16, because as long as sales catches up to the the lag
and everything goes normally in the current quarter, we can expect bumper revenues and out-
sized profits from ATY. To look at the effect, we take a slight return to the copper production
and sales chart shown above (left) and also present the end-quarter inventories chart (right).
ATY: Copper production and sales, per quarter $m ATY.v: Inventory
10
10
other 9
8 8 Metals Conc 2.5
7
6 6
5 1.6
4 4 1.2 1.9 2.3 2.2
3 1.8 2.5 6.2
1 2 2 0.9 3.5 3.6 3.6 4.4 1.7 2.6 1.7 3.0
0 0 1.8 0.8 0.9 1.6
4q13 1q14 2q14 3q14 4q14 1q15 2q15 3q15 4q15 1q16 2q16
source: company filings
This version of the copper sales chart just has the last four quarters plus our estimates for the
next two, because ATY has bumped up its throughput rate recently and we can expect the type
of production seen in Q2 (for example) to repeat in Q3 and beyond (grade’s been holding up,
as has recoveries). We therefore turn our eyes to the inventories chart and see that as at end
month, ATY has $4.6m extra’s worth of metals concentrates in its storerooms than it had in
1q16. That’s a lot of metal and that gets added onto the expected 4.8m lbs payable production
(theoretically ATY is capable of over 5.1m lbs production at established throughput, grade and
recovery levels), hence the bump to over
7m lbs Cu sold in the current quarter.
We can expect a similar boost in gold sales
(and the average price will go back higher)
so when that effect is added, here’s how
we see revenues stack up for the 3q16
period, compared with others. Over $18m
in sales coming up and though we assume
no delivery glitches this quarter plus the
selling down of that backlogged inventory,
it also assumes less-than-optimum
production and a copper price at a
reasonable U$2.10/lb (that could be higher). In other words, I’m leaving wriggle room for even
better than that.
51q3 51q4 61q1 61q2 tse61q3 tse61q4
Mlbs Cu
copper prod Mlbs
payable copper Mlbs copper sold Mlbs
source: company filings
ATY.v: Revenue by metal
22
20
18
16
14
12
10
8
6
4
2
0
41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 tse61q3 tse61q4
$m
Au rev calc
Cu rev calc
source: company filings, IKN ests

,
Then as already seen in the operational and earnings chart above, that translates into a $7.3m
income from mining operations and a net of $4.8m, or 5c EPS. If it gets that far at today’s
share price a 57c stock returning 5c in one quarter should make for decent headlines.
Balance sheet: Still the key to it all
But just like in IKN376, this is the bit that really matters because it’s the part that’s getting
badly interpreted by those watching and covering the stock. As an example, here’s one of
topsheet bullet points from Dundee in its August 18th coverage update note on ATY:
Balance sheet remains tight. ATY ended Q2 with working capital of ($0.4M) including $5.5M in
cash. There is little breathing room on the balance sheet - $4.7M in loan maturities come due in
the next twelve months, the bulk of which ($4.3M) relates to ATY's $8M Trafigura debt facility.
We believe that at current commodity prices liquidity will be tight over the next year. We will look
for an update on ATY's financial position and any potential financing solutions in H2/16.
It’s the main reason the Dundee analyst uses to keep his price target at 35c, this despite the
stock price moving to 59c that day and yes, that means he’s effectively calling ATY a short on
ATY.v: Liabilities Breakdown per qtr
50
45
40
35
30
25
20
15
10
5
0
its balance sheet position. I think, well in fact I’m pretty sure, that the problem lies with the
author using the classic metrics and ratios without looking just a little deeper because if he did,
he’d see that there is no liquidity problem at ATY and there’s plenty of breathing room on the
balance sheet. This is to our great advantage because the more people call “avoid ATY” at this
time while not fully understanding what’s going on, better the stock will perform once it
becomes clear that ATY is doing just fine. So let’s look at the reasons for the confusion, starting
with the normal overviews of assets and liabilities in these charts.
As you can make out above, we’re not expecting big fluctuations in fixed asset valuations and
only minor changes in current assets (as the
bloated inventory in 2q16 gets turned into cash
in 3q16). You get a better view of the main
current asset line items in this chart on the
right. Meanwhile over at liabilities, we forecast
that the load has peaked in this last quarter and
for 3q16 onward, both long-term and current
liabilities will drop. We expect ATY to use the
extra bonanza free cash flow to come from the
out-sized revenues this quarter to pay down its
loan book. Firstly it has the first of two double
payments to make to Trafigura this quarter (the
second in 4q16, see IKN376 for the full
discussion on that), then it has also taken out more on its unsecured bank credit facility it
carries with four Colombian banks. Those facilities add up to U$7.262m in credit and as at 2q16
ATY had drawn U$4.08m, with the company adding $1.6m to its debt during the last quarter.
This makes sense considering the sales glitch in 2q16, so it also makes sense that it gets paid
8
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 tse61q3 tse61q4
source: company filings/IKN ests
srallod
fo
snoillim
ATY.v: Assets Breakdown per qtr
100 LT liabilities current liabilities
90
80
70
60
50
40
30
20
10
0
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 tse61q3 tse61q4
$m
cash inventories
other current fixed
source: company filings, IKN ests
ATY.v: Cash & inventory
16
14
12
10
8
6
4
2
0
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 tse61q3 tse61q4
$m
inventory
cash
source: ATY filings, IKN ests

,
down again as soon as the money comes back in. And while here, on the subject of that credit
facility, as principal is repayable in six months of any draw-down, by keeping the drawings
under 50% it’s an automatic source of rolling liquidity for the company, which blows the first
“liquidity will be tight over the next year” brokerage complaint. In other words, even if things
get tight profits-wise due to a severe and unexpected drop in metals prices (or another glitch in
sales) ATY faces no sort of cash crunch.
Anyway, back to the subject and we expect
ATY to keep cash treasury levels as they are
and use the free cash flow from 3q16 (and
4q16 for that matter) to pay down cash debt
in two places. However, even if it the Working
Capital position should look like this at the end
of the current quarter (right).
Still negative. Not by much but still in the
negative zone, which is what I firmly believe
to be the second error of the wider analyst
audience. By concentrating on the classic
“working cap = liquidity” assumption and
not taking into consideration that until
2017 comes round, the Trafigura debt is
mostly coming off the long-term liabilities
side of the balance sheet, they think ATY
is in cash problems. So let’s dial in the
smoothed-out Trafi payment chart we first
used in IKN376 again, that’s here:
Yes in 3q16 and 4q16 the current part of
this isn’t coming off much, but come 2017
it just metals away and by then the
payments will only be single servings of
the debt, not the double doses ATY needs to pay back in 3q16 and 4q16. What that, plus the
bank loan part of paybacks, does for the ATY.v current liabilities is in this chart below:
ATY.v: Current liabilities breakdown
22
20
18
16
14
12
10
8
6
4
2
0
9
41q4 51q1 51q2 51q3 51q4 61q1 61q2 tse61q3 tse61q4 tse71q1 tse71q2
5 ATY.v: Working Capital per qtr
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
-0.5
-1
-1.5
-2
U$m
other
A/C payable
Bank credit facilities
current part of debt
source: Company filings, IKN ests
In short, the first improvement will be the use of 3q16 funds to pay down the bank facility, as
well as the current debt a little. Then comes further improvement on a quarterly basis and in
this case I’ve extrapolated out four quarters to 2q17, where estimated current liabilities stand at
$12m. It’s a little more difficult (and less important) to estimate the amount of cash ATY books
to treasury over the next four quarters, but as the mine will be generating free cash flow all the
way through and not draining cash there’s every reason by then to imagine currents back at the
$20m level we see today. Therefore if we update the working capital chart used above and add
in the forecasts for the quarters to 2q17...
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 tse61q3
source company filings/IKN ests
srallod
fo
snoillim
ATY: Repayment schedule of Trafigura debt
12
10
8
6
4
2
0
41q4 51q1 51q2 51q3 51q4 61q1 61q2 tse61q3 tse61q4 tse71q1 tse71q2 tse71q3 tse71q4
$m
LT part of debt
current part of debt
source: ATY filings, IKN calcs

,
10 ATY.v: Working Capital per qtr
9
8
7
6
5
4
3
2
1
0
-1
-2
10
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 tse61q3 tse61q4 tse71q1 tse71q2
source company filings/IKN ests
srallod
fo
snoillim
...it suddenly looks very different. And I stress, this is at current price levels for copper (and
gold), 10c/lb on copper adds half a million dollars per quarter in extra cash flow.
The bottom line to the issue isn’t whether the company’s balance sheet is tight, it’s when the
investment community realizes it isn’t tight. Because of the effect of the Trafigura quarterly
paybacks it might look tight until the end of this year, but it’s not. Liquidity is fine, treasury is
fine, liabilities will get paid down. The big clue for those not paying close attention should come
in 4q16 when ATY.v goes working cap positive, because by 2q17 the cast will be truly out the
bag. Until that moment ATY is offering us an advantage.
Discussion and conclusion
I was wrong to price up ATY at 70c for the next six month period, because its true value will be
revealed over a longer period, probably 12 months. It will continue to be a free cash flow
positive company with a long mine life and plenty of exploration potential, even at current ow
prices for copper, but what will happen is that the world will go “hey, that’s financially solid
now” and ATY will be able to command a more reasonable multiple to its profitable operations.
At the moment and on what I consider the standard model quarter of 4q16 (current production
rates, current copper and gold prices, current
costs profile) its operating earnings per share is
3.3c/qtr, which annualized is a 4.3X multiple to
the current 57c share price. That’s way too low
and that’s because it’s getting unjust punishment
for it’s perceived balance sheet weakness. That’s
good because it means we can buy in before that
multiple goes to where it should be which for me
is around the 7X point, or a 92c share price
target. That’s cash flow, on asset valuation terms
the improvement in the balance sheet even to
4q16 (remember it gets even better six months
later) indicates that book value improves by CAD
8.5c to just over 59c. I’d be very comfortable
about giving a small and profitable company such as this (with operating assets priced
reasonably) a 1.5X price/book ratio, there’s an 88.5c target for you. And that’s where I am
today, splitting the difference on the cash flow and asset models to blend the new IKN
Weekly buy recommendation and 12 month target for Atico Mining (ATY.v) of 90c,
representing a 57.9% upside to this weekend’s price of 57c. Once the misconceptions
about this company’s balance sheet recede it will become a more valuable company and all this
without a dime added to the price of copper. If the main underlying metal starts shooting up in
2017 this could easily become a $1.50 stock and then al other things might start happening too,
such as ATY becoming a dividend payer. But I don’t want to go all blue-sky on you today, this is
about the hard numbers and what ATY can reasonably command once it’s considered a
financially solid company. It already is, but the longer other people think it isn’t, the better for
us. I will add to my position in the week to come.

,
Stocks to Follow
In a tough week for juniors, getting gains for four of the twelve The IKN Weekly ‘Stocks to
Follow’ isn’t a bad total (WDO.to, ATY.v, CNL.to, MAD.v) and throw in the UNCH in Tinka (TK.v)
too. But it does mean we had seven losers (BTO.to, REG.v, SAM.to, SAND, RRI.v, LRA.v, FCV.v)
and that list includes all the larger positions, so it was a week to hurt the back pocket. Best
winner was Atico (ATY.v up 9.6%) on its good quarterly result, worst loser Starcore (SAM.to
down 7.9%) with nobody interested in buying this small producer name. Fair enough.
We currently have 12 open positions, three fewer than our self-imposed maximum of fifteen at
any given time. Ten stocks are in the green, two in the red, same as last week.
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$4.25 101.4% tgt $5.30 IKN375
Regulus Res REG.v hold C$0.64 06-apr-15 C$1.66 159.4% LT exploreco top pick
Starcore Intl SAM.to STR buy C$0.62 10-jan-15 C$0.70 12.9% $1.04 tgt, excellent value
Long positions (in current order of preference)
Sandstorm Gold SAND hold U$3.80 17-apr-16 U$6.22 63.7% $7 tgt IKN378, turnaround story
Tinka Res TK.v buy C$0.195 19-apr-16 C$0.20 2.6% Top value under radar Zn play
Wesdome Gold WDO.to STR buy C$1.77 22-may-16 C$1.62 -8.5% Now avged down, top value
Atico Mining ATY.v buy C$0.48 24-jul-16 C$0.57 18.8% 70c tgt, Cu play, good qtr
Riverside Res RRI.v buy C$0.39 27-jun-16 C$0.40 2.6% Added IKN380, 60c tgt
Continental Gold CNL.to buy C$2.68 22-may-16 C$3.73 39.2% permit 4q16/1q17, $4.80 tgt
Miranda Gold MAD.v spec buy C$0.125 03-jul-16 C$0.14 12.0% Small play, flip, so far quiet
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$1.36 18.3% solid biz model
Focus Ventures FCV.v spec buy C$0.23 01-jul-12 C$0.095 -58.7% refi news good
Short positions
None at present
Closed in 2016 closed close price
Phoscan Chem FOS.to jan16 C$0.28 29-mar-15 C$0.265 -5.4% Buyout trade, bot but poor deal
True Gold TGM.v jan16 C$0.18 23-aug-15 C$0.25 38.9% okay trade, sold on pol risk
McEwen Mining MUX jan16 U$1.09 25-jan-15 U$1.20 10.1% sold due to lack of value
Lake Shore Gold LSG.to feb-16 C$1.10 07-apr-15 C$1.69 53.6% bot out, sold early in process
Atacama Pacific ATM.v feb-16 C$0.19 26-apr-15 C$0.40 110.5% sold for a double on big pop
New Gold NGD feb-16 U$2.06 24-jan-16 U$2.96 43.7% closed good near-term trade
Sandspring Res SSP.v mar-16 C$0.195 18-oct-15 C$0.32 64.1% Hit tgt, took profit
Teranga Gold TGZ.to mar-16 C$0.54 15-feb-15 C$0.60 11.1% disappointing trade
B2Gold BTG mar-16 U$0.85 13-jan-16 U$1.30 52.9% Separate trade on B2, hit tgt
Dalradian Res DNA.to mar-16 C$0.67 27-oct-13 C$1.00 49.3% Hit target, sold, good win
HudBay Min. HBM may-16 U$4.10 03-apr-16 U$4.36 -6.3% Short trade, poor timing
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
INV Metals INV.to jul-16 C$0.25 03-apr-16 C$0.95 280.0% Trade closed on time
HudBay Min. HBM aug16 U$4.98 09-jun-16 U$4.80 3.6% short trade covered, no big deal
2009, 2010, 2011, 2012, 2013, 2014 and 2015 closed positions in appendices below
Now for some notes on current basket stocks.
Atico Mining (ATY.v): Adding next week. ATY had a good week with somebody stepping
up to buy around 400,000 shares on Thursday, presumably as impressed as I was with the
2q16 financial results. We do those above. There’s a lot to like about ATY at these prices.
11

,
Wesdome Gold (WDO.to): Added. The addition as planned last week. There was no sub-
$1.60 on offer in the week so I didn’t fully
load up, but I bought four separate lots
and the cost average has come down to
$1.77. More additions at value prices will
get that towards the sub-$1.70 target, but
it’s unlikely to break if WDO doesn’t drop
again. And it’s looking as though it won’t
drop much further, as we hear Tom
Stanley has been rejecting offers for
blocks of WDO.
In other news, it was good to read the
sellside analyst Ron Stewart’s take on
WDO Friday, the note (3) reiterating the
house buy call and the $3.25 (!!) and
saying that the current price was a “compelling valuation”. I particularly like this part of the
overview section too..
“We see WDO's recent underperformance (WDO -5.7% since June 14th AGM vs GDX +18.7%)
due to shareholder churn as an opportunity for longer term value, regardless of further potential
near term weakness.”
...because it fits in nicely with my take on the stock. As Stewart is arguably the best mining
analyst in the Canadian brokerage world, that’s my idea of strong backing for the cause.
Riverside Resources (RRI.v): Added. In the end it got a bit silly not to bite, so I took the
generally available 40c (we did see 39c, but only a couple of trades) and roughly doubled my
position in RRI.v cash-wise. It’s now good to go for the time being.
Tinka Resources (TK.v): Added. I got a few and managed not to move up the cost average,
too. I didn’t get many but that’s okay, plus in a week where I added to two other positions I
got kind of light-headed about the cash being spent. For what it’s worth, my personal cash
levels are still comfortable and I have room to
add to other positions or purchase new ones.
But that’s just me.
B2Gold (BTO.to) (BTG): On Monday BTO
stock faded early and lost ground against
market peers. Perhaps a delayed negative
reaction to the $100m at-market placement,
perhaps people digesting the news out last
week and making it their first sale in a slightly
weaker gold environment. That’s just my
guess. From then on it traded with the rest of
the world. An okay week, al told.
Regulus Resources (REG.v): Slight change of plan. For reasons I won’t go into because
they’re not that important (and there’s nothing nefarious going on), the site visit to Antakori
that I announced last week is now slated to happen at the end of September rather than the
beginning. There are several advantages to the new schedule, including the way it won’t affect
the production of the Weekly over the weekend (the trip looks good for a Monday to Thursday
frame) and I also get to meet and tour with the new member of the executive Stewart
Redwood (our schedules would have missed otherwise).
In trading REG put up an interesting show, because there are obviously buyers sitting under the
bid/ask ready to snap up anything that shows as a bargain.
12

,
Continental Gold (CNL.to): Via the blog last week (4), I shared the off-record word out of
Colombia that CNL was on course on its permitting track for the Buriticá mine and had been
presented with around 50 “observaciones” from the national enviro people ANLA. Just in case
you didn’t read it, here’s the paste out of the post that day:
Word from Colombia is that a few days ago Continental Gold (CNL.to) met with the
official environmental body ANLA and was given a list of around 50 comments on
things that the enviro people want further information and/or details on in their mine
plan. This step, known as "observaciones", is a standard part of the permitting track
and as long as there aren't any massive red flag items in the list (which was given to
CNL orally last week, they receive the official written list in a few days' time) it's good
news and shows things are progressing well. In fact it's almost impossible to imagine
any enviro body not making a list of observaciones for a project (not just ANLA and not
just Colombia), they need to justify their jobs and show they aren't giving mining
companies a free pass.
This fits in with the company's claim that
they'll receive the key EIA permit in 4q16
or 1q17. CNL has also made it known
locally that there's nothing on the list of 50
observaciones that looks particularly
problematic.
And this is why I've been long this stock
since May. They're going to get the permit
and the stock will re-rate on the news.
Once presented in written form, CNL has a
maximum of 60 days to address the list and
provide satisfactory proposals or replies in
order to move to the final stages of the
permitting process. Last week’s news wasn’t
official but it’s solid intel and it’s a positive, be in no doubt. The IKN post had an effect on the
market, too.
Miranda Gold (MAD.v): It was still quiet trading, but we did have a notable moment on
Wednesday as MAD broke down to 12c for the first time since...well, since it got a reco on
these pages in fact. The bad is that I didn’t get any cheapies, the good is that reader CM did
snaffle some at 12.5c, the better is that he obviously isn’t the only buyer of MAD at lower prices
and it quickly sprang back to 13c and beyond. So, something to report on what’s otherwise a
quiet position waiting for the pump...that will come.
Sandstorm Gold (SSL.to) (SAND): SAND ended the week close to its Wednesday lows after
seeing late day selling (traders closing out positions for the weekend?), but as this ten day
13

,
chart comparing SAND to the Gold & Silver index (XAU) it’s still handily ahead of the pack
recently.
The Copper Basket
After thirty-three weeks of 2016, The Copper Basket shows a 90.17% gain to level stakes.
company ticker price 1/1/16 Shares out Market Cap current pps gain/loss%
1 HudBay Min. HBM.to 5.31 235.23 1432.55 6.09 14.7%
2 Ivanhoe Mines IVN.to 0.61 778.96 1308.65 1.68 175.4%
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 0.65 205.06 278.88 1.36 109.2%
6 Western Copper WRN.to 0.38 94.19 106.43 1.13 197.4%
7 NovaCopper NCQ.to 0.395 104.33 81.38 0.78 97.5%
8 Cordoba Min. CDB.v 0.16 86.86 75.57 0.87 443.8%
9 Copper Mtn CUM.to 0.445 118.8 62.96 0.53 19.1%
10 Atico Mining ATY.v 0.28 97.59 55.63 0.57 103.6%
11 Copper Fox CUU.v 0.125 417.64 52.21 0.125 0.0%
12 Nevada Copper NCU.to 0.66 80.5 50.72 0.63 -4.5%
13 Amerigo Res ARG.to 0.205 173.61 28.65 0.165 -19.5%
14 Hot Chili Ltd HCH.ax 0.09 445.723 20.50 0.046 -48.9%
15 Revelo Res. RVL.v 0.055 128.486 10.28 0.08 45.5%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg 90.17%
The Copper Basket average lost a slight 1.38% in a week of small movements and light trading
in copper stocks with a real mix of results
and little in the way of trend. Just five The Copper Basket 2016, weekly evolution
100%
stock put in weekly gains (HBM.to,
80%
NGQ.to, CUM.to, CUU.v, ATY.v), three
were unchanged (RMC.v, CS.to, NCQ.to) 60%
which leaves seven losers in total (IVN.to, 40%
NCU.to, HCH.ax, WRN.to, ARG.to, CDB.v,
20%
RVL.v). Best performers were NGEx
0%
Resources (NGQ.to up 11.5%) and Atico
Mining (ATY.v up 9.6%), worst were -20%
Revelo (RVL.v down 11.1%...but really
that’s just a penny on light volume) and
Hot Chili (HCH.ax down 8.0%).
14
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 ht01 ht71 ht42 ts13 t7gua ht41 ts12
source: IKN calcs

,
In a quiet week for copper price movements, I’ll skip over the normal five day chart and check
in with the weekly, which currently gives a good
bird’s eye view of the consolidation in the copper
price. At some point that narrowing channel will be
broken (up or down) but it’s been setting up all
year and another higher low would be bullish for
the longer term. In thumbnail terms we could see
copper back down at U$2.10/lb this autumn as long
at it reverses again.
In macro news, the only story of any note came
from ratings agency Moody’s, who served up a
Curate’s Egg (5) on base metals by upgrading the
base metals sector from negative to stable (that’s
good) but going on to say things aren’t going to get
meaningfully better immediately, either. Aside from
zinc, according to the agency all base metals are
currently in oversupply and in the case of copper,
it’s likely to stay that way until 2018. Here are two
quotes from the Moody’s piece that sum up their
call well enough:
“We view prices for base metals as having likely bottomed following the sharp decline
beginning late last year, and consequently we have revised our price sensitivity
assumptions. That being said, challenging industry conditions should continue through
to at least 2018 until the industry can recalibrate the supply levels to match demand.”
“Our sector outlook change does not imply conditions will improve meaningfully for
base metals companies, but that they are unlikely to deteriorate further over the
medium term."
That fits in well enough with the IKN house call on copper. Yes we’ve bottomed, no we’re not
going to get a massive spring back in prices in the near or medium-term. I still think we have
an outside chance of seeing U$2.50/lb this year but that’s more likely to be a funciton of US
Dollar weakness than copper strength. If U$2.35/lb or so shows up, I’ll be happy as a long.
Now for the copper warehouse inventory bullets for the week:
• Another quiet week, with the three warehouse systems only seeing small changes.
Overall copper inventory levels rose 6,634 metric tonnes (mt) (+1.5%) to finish Friday
at 443,466mt.
• Shanghai stocks dropped a tad, down 1,944mt (-1.1%) to reach 174,563 by week’s
end.
• LME stocks rose by 8,250mt (+4.1%) to close the week at 202,375mt. That’s the first
upmove for a while.
• At Comex the number finally got its head above 60k, up by 328mt (+0.5%) to finish
Friday at 60,222mt. But trading has been thin for weeks here, no biggie.
Here’s the Shanghai-only chart and the lateral pattern we mentioned last week gets another dot
added to it today. continues. No surprises.
15

,
Shanghai Futures Exchange Warehouse Stocks, 2014-2016
400000
350000
300000
250000
200000
150000
100000
50000
16
31'13ceD ht91 ht9 dn2ram dr32 ht31 ht4yam ht52 ht51 ht6yluj ht72 ht71 ht7 ht82 ht91 ht9 ht03 ts12 ht11 ts1bef dn22 ht51 ht5rpa ht62 ht71 ht7nuj ht82 ht91 ht9 ht03 ht02 ht11 ts1von dn22 ht31 dr3naj ht42 ht41 ht6ram ht72 ht71 ht8 ht92 ht91 ht01 ts13 ts12
Mt Cu
source: Cochilco
Now for notes on a couple of the basket component stocks:
HudBay Minerals (HBM) (HBM.to): We had confirmation of the long-term production plan
at Constancia from Carlos Castro, director of corporate affairs & social responsibility at HudBay
Peru. In an interview (6) with Peru’s State news agency Andina last week he said (translated):
“This year we calculate a production of between 110,000 and 130,000 metric
tonnes of copper...in 2017 we’ll possibly produce a figure a similar figure and
in the following years production will drop a little until we reach a standard
production level in five years of 90,000 metric tonnes”.
A good reminder that HBM today is running the higher grading “starter pit” mineralization t
Constancia but even so, cannot return any meaningful profits and certainly nowhere near
enough to make progress against its heavy financial debt.
Revelo Resources (RVL.v): Here’s the simple thesis behind owning Revelo now: If Atacama
Pacific (ATM.v) can move the way it did on the back of a large land package in Chile, so can
RVL. Now for sure ATM has a more advanced project on its books but I know the thing quite
well (I owned ATM for a fliptrade earlier in the year remember) and know that it isn’t any great
shakes, with low grade and marginal economics the main barriers.
Which brings in RVL, because for a fraction of the market cap of ATM you get a land package of
300,000 hectares in Chile and some very decent geological brains backing the project. It’s not a
perfect vehicle by any means, for one most of the land has already been picked over in some
shape or form, for another Revelo was born out of the wreckage of a merger between two
explorecos, Polar Star and Iron Creek. Iron Creek was a failure of a junior under current RVL
head Tim Beale that promised much without ever delivering (and the structure was expensive).
As for Polar Star, the best thing to know about it is that once upon a time its ticker was POS. I
kid you not. But what do you want for an 8c stock, perfection?
The last plus here is that I’ve heard the names of a few of the people who have got on board
during the last placement that closed mid-July and, without disclosing any here, can say they’re
the type of client who won’t be afraid of using hard-sell marketing techniques to push this stock
higher come the time those shares and warrants go free trading. If you like them small and
high-risk spec, RVL could be one for your eye.
NGEx Resources (NGQ.to): Three things to cover as regards NGQ this week:
1) I screwed up. Yes, I got the dates wrong on the distribution of new shares lin last week’s
edition and in fact, you had to be bought in by August 16th to get the spin-out shares of Filo
Mining. I have no excuse to offer, I simply read things badly and apologize.

,
2) NGQ has been on a tear due to this spin-out and as these charts show (two months left,
ten day right) the plan to monetize asset value of the silver target at its larger concession on
the Argentine side of “Constellation” (they’ve changed the name and used to call the land
package “Vicuña”) has worked very well.
3) I’m not a buyer of NGQ.to, nor Filo Mining. Once I heard about my error (and thank
you to those who wrote in with the correction) it was time to make up my mind and as much as
I like “free” shares of something such as a spin-out with reasonable potential, After chewing it
over for too long I just couldn’t get over my aversion to Argentina enough to buy into the deal.
That’s why you didn’t get any sort of Flash update on this during the week, because I didn’t buy
and won’t do either, not for the time being.
I’m fully aware that I could be making a mistake (and it’s really one of those where I’m asking
myself which wrong decision do I make now) and NGQ may be set to run on near-term
optimism about Argentina. That goes for Filo too, it’s not an easy target but it’s a reasonable
one and could be the start of a mining camp up there. I’m also aware that it wouldn’t even be
necessary to hold for a long period and get trampled on by any renewed spike in perceived risk
in Argentina next year. This could have been a fliptrade, but in the end and considering that
copper, while bottomed, still doesn’t look very perky, I’m going to play the coward card and sit
this one out. Feel free to complain bitterly, I may well deserve it.
The Low Cost Producer Basket
After 33 weeks of 2016, the Producer Basket shows a gain of 149.87% 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 24.00 20.61 179.3%
2 Newmont NEM 17.98 529.12 23.37 44.17 145.7%
3 Goldcorp GG 11.56 830.22 15.22 18.33 58.6%
4 Franco Nevada FNV 45.75 176.298 13.68 77.62 69.7%
5 Agnico Eagle AEM 26.28 217.67 12.22 56.14 113.6%
6 Ang/Ashanti AU 7.10 405.27 7.77 19.17 170.0%
7 Detour Gold DGC.to 14.41 170.85 5.44 31.86 121.1%
8 Sibanye Gold SBGL 6.09 228.71 4.51 19.72 223.8%
9 Buenaventura BVN 4.28 254.19 4.04 15.91 271.7%
10 New Gold NGD 2.32 509.89 2.90 5.69 145.3%
Prices in U$/NYSE tickers, except DGC.to (CAD$) Portfolio avg 149.87%
The larger caps had a losing week, with nine of our ten names lower than this time last
weekend, so a cheer for Buenaventura (BVN up 1.9%) which managed to buck the trend. And
while we’re here, New Gold (NGD) only lost one single penny on the week, a darned sight
17

,
better than the 12.5% drop suffered by AngloGold Ashanti (AU). Notably, Newmont’s now
closing the gap at the top of the table, less than a billion between it and Barrick now.
Our basket average lost nearly 2% compared to the GDX benchmark, mainly due to the big loss
in equal-weighted AngloGold (AU). We’re still over 31% ahead on the year though, it’s still
working out fine.
The Low Cost Producer Basket: Weekly performance
200% and comparative to GDX control
180%
160%
140%
120%
100%
80%
60%
40%
20%
0%
-20%
AngloGold Ashanti (AU): The outlier move of the week among large gold miners came from
AU, which dropped a hefty 12.5% and not because of the ruckus around its La Colosa project in
Colombia either. On Monday AU reported lower than expected quarterly financial and
production results (7) with production for the half year to June 30th at 1.745m oz gold, down
7.1% from the 1.878m on 1h15. Along with the production report, AU also reported an upspike
in lost time due to safety procedures and mass compliance audits in its South African mines
that brings with them sudden and unforeseen work stoppages. However, without so much as a
hint of irony it noted an uptick in all worker related accidents in the period and called the three
deaths of workers under its charge during and said “three work-related fatalities at its South
African operations had overshadowed
safety improvements across the balance of
the portfolio.”
AU was in bad financial shape last year,
heavily indebted and unprofitable, which
means the big share price move we’ve
seen this year is all about leverage. Up to
Monday AU was assumed to be in better
financial health, that’s not necessarily so
any longer and that’s the cause of the
sharp reversal of fortune.
As for trading, what stands out about the
last week in the company’s USA ticker (AU)
is how it was whacked at the open four
times out of five. That’s the product of the stock opening in Joburg and London and getting hit
every day before the NYSE opens. It happens once, you shrug your shoulders. It happens four
times and the location of the sellers is clear (as is the location of the saps who are propping it
up at the end of the Americas day, only to get their fingers burned the next morning. I get the
feeling someone in the States got a real rinsing at the hands of the LSE
Regional politics
Mexico: Security payments
I thought this was interesting (8), a dataset from Mexico’s chamber of mining Camimex that
shows how much their members had invested in on-site security at their mining operations in
18
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 ht01 ht71 ht42 ts13 t7gua ht41 ts12
Low Cost Basket: Percentage difference between
basket and GDX control, 2016
5%
0%
basket -5% gdx control
-10%
-15%
-20%
-25%
-30%
-35%
-40%
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 ht01 ht71 ht42 ts13 ht7gua ht41 ts12
source: ikn calcs, NYSE/Nasdaq data

,
the last three years. The report is to note that this year 2016, Camimex estimates Mexican
mining companies will spend U$48m on this part of their set-up, a little more than in 2015. But
the big change happened between 2014 and
2015, when security spending was lopped hard. Mexico: Investment in On-Site Security of Camimex
U$ registered companies, 2014 to 2016
We can presume that’s connected with the 60 55.3
sector downturn during those years, but it goes 50 45.6 48
to show that miners will try to cut costs at any 40
level. In the case of on-site security it may turn 30
20
out to be a false economy too and several
10
mining companies have paid a high price for
0
cutting corners. Evidence includes the recent
robberies from companies such as Nyrstar, Pan 2014 2015 2016est
source: Camimex
American Silver, McEwen Mining and most
recently Agnico Eagle at its La India mine.
Argentina: Minister of Energy and Mining under pressure
Juan José Aranguren, Argentina’s Minister of Energy and Mining, could be the first minister to
fall in the new Macri government. We’ve previously mentioned on these pages the very sharp
increases in utility bills that the Macri government has tried to push through, the so-called
“tarifazos” in water, electricity, gas etc that have typically added 300% to 500% to bills (they
were all heavily subsidized under the CFK government). Those hikes have been under legal
pressure for quite some time and last week the Supreme Court ruled against one of the key
cases, saying that the government could not increase gas bills for domestic users.
This is a major defeat for the Macri government’s economic reform plan and the man behind
the hike in gas prices (and electricity), Juan José Aranguren, says it will cost the country’s
economy around ArgP$20Bn (U$1.35Bn) and that’s a big hole to cover. The ruling against the
gas hike also opens up the real possibility that the other “tarifazos” will be struck down by the
highest court in the land. Like any other President, Macri isn’t going to take the blame and
fingers from all sides of the political spectrum are pointing to Aranguren. Things got worse for
him on Thursday when he was required to address congress about the whole tarifazo mess and
government parliamentarians, supposedly on his side, said that the plan should have been
debated in public instead of the attempt to push it through via executive order. Aranguren, the
ex-head of Shell Argentina and not a natural politico (Macri himself said a couple of weeks ago
that Aranguren has had to get used to the political world quickly) showed his political naivete
by replying (translated) (9), “Mentally I feel fine (about the pressure)...I form part of a team
that’s looking to provide the energy the country needs for its development. President Macri put
me into this position and he can remove me (if he wants). I have absolutely nothing to resign
about”. The kind of declaration that rattles of death knells for high ranking politicians and sports
team managers alike.
Argentina: Environment minister Bergman “A lobbyist for mining”
Or so say the anti-mining groups that met with Bergman during his recent tour of mining
hotspots around the country, such as Chubut, Mendoza and La Rioja. This report in pro-
CFK/opposition national daily Pagina 12 this weekend (10) quotes a whole bunch of anti-mining
groups saying virtually the same thing, that Bergman visited them recently but he wasn’t there
to listen, his was to give them exactly the same lines that they get from the mining companies.
They accuse him of being a lobbyist for mining and say that the Macri government is set on
moving forward on mining activity “at all costs”. Now that may turn out to be a good thing and
is a demonstration of determination on the part of the government, but the Macri
administration also seems to be taking a confrontational rather than consensus position as
regards opponents of the industry. Personally, I’d like to see them work harder on the projects
that can be moved forwards easily, thereby setting economic examples to the parts of the
country with strongly opposed projects. But what d I know?
19

,
Ecuador: Mining is becoming a Presidential campaign issue
Pomp and circumstance last week when Ecuador’s Vice-President Jorge Glas (the man who
would be President next year if the elections go well for him) and Vice-Minister of Mining Javier
Cordova presided over the ceremony to mark the official start of construction of the Rio Blanco
gold mine project in the Canton of Cuenca (part of the larger Azuay province) owned by
Chinese capitals Junefield. Glas cut the ribbon and said all the nice things such as (translated)
(11), “Today is a great day of new challenges, investments that generate wealth for
Ecuadorians” and, “In Azuay we are witnessing success in the development of our communities
and for the country. Ecuador has changed, we will take advantage of our natural resources with
great responsibility to beat poverty”.
All went well until the next day when the mayor of Cuenca spoke out against the mine project,
asking for it to be suspended until better hydrology studies had been performed that would be
able to better judge the effect on water supply for nearby cities. He was joined in calling for the
project’s suspension by indigenous groups such as the Women’s Defence Group of the
Pachamama, who marched in protest against the project in Cuenca (12). Having the local head
of politics come out against the project at this time was an embarrassment for the national
government and President Correa took it upon himself to answer the Mayor of Cuenca. He said
(translated) (13), “The losers of the election have an agenda that wants to stop the
development of mining”. He went on to say that they only raise their voice in protest due to
ideological fundamentalism and without any concrete evidence.
Bottom line: There is a vanishingly small chance that the Rio Blanco project is suspended by the
government, it would take massed protests against the mine and that’s unlikely to happen at
this stage. What we are seeing however is the politicization of the whole mining issue in
Ecuador, it’s going to become a live issue for the country in the upcoming election campaign to
choose the next President (February 2017). That’s not so great for the mining industry and as
we noted on the blog last week, the pressure on the INV Metals (INV.to) Loma Larga project
has already started, that’s looking like becoming the one they’re going to fight over. That, of
course, is why we took our profit and ran on the trade earlier this year.
Peru: The new government lays out its plans for mining
On Thursday the new Cabinet Chief, Fernando Zavala, went to Peru’s new Congress in a key
moment for the new government. According to the law he needs to get approval for all
Ministerial positions from the Congress by vote and to do that, must go and explain what they
plan to do. As Peru’s Congress is under an absolute majority of the opposition Fujimorista (FP)
party (Keiko lost to PPK in the run off by a whisker) that’s not necessarily a given vote.
I won’t go into every aspect and issue covered, we’re here for mining so that’s the subject to
cover today and as Zavala laid out the government’s plans for the sector (14). I took away
three things. A soundbite or two for mining friendly headlines, the extended quote that lays out
the PPK vision for mining and the new measure this government plans to bring in to help move
projects forward (all eyes on Tia Maria, a test-case if ever there were one). All translated form
the Spanish by these hands.
The soundbites:
“A modern Peru needs sustainable mining”.
“Mining investment is welcome”.
We like those.
The extended quote: “We will generate the conditions which allow our rich natural resources to
be converted into products of higher value, not only via foundries and smelters but also through
mining clusters that invest in the care of the mining environment, investigation, innovation and
automization of the sector.”
The new measure: There are other reforms in the pipeline which are aimed at the small private
miner/mining company, such as the phasing out of the use of mercury in gold extraction. But
20

,
when it comes to our focus the big reform will be the “Adelanto Social”, best translated as the
“Social Advance Payment” which reminds me of the way Ecuador requires mining companies to
invest and give money to local communities for civil projects before the mine gets going. In
Peru, exploration stage companies will also be required to lay down cash for new local works,
though presumably the scale will be small (and let’s face it, most decent junior explorecos in
Peru already have these types of plans, certainly the ones I invest in).
Market Watching
Tahoe Resources (TAHO) (THO.to) and the Guatemala fiscal reform
Here’s an interesting chart, which plots the last ten days of Tahoe Resources (THO.to) (TAHO)
against the industry benchmark XAU gold and silver miners’ index. The TAHO 2q16 financials
went out on a good day for the metals and enjoyed a big bounce that day, but the advantage
has now completely disappeared and it seems due to the Guatemala fiscal reform news that we
covered in IKN379 last week. Once the news became official that the Jimmy Morales
government was seeking to raise mining royalties on gold, silver and PGM metals from 1% to
10%, as well as the hiking the tax rate to 29% (from 25%) and extra charges on fuel and other
things, the market discounted TAHO.
I would suggest this shows the efficacy of reading the IKN Weekly “Regional Politics” section ☺.
Dalradian Resources (DNA.to) mystery solved
Last weekend in IKN379 I wondered out out about the move put in by Dalradian Resources
(DNA.to) last week as it popped hard from $1.20 to $1.50. It turns out that Rick Rule (no less)
turned up on BNN and gave the stock a big push, saying that he liked it and he was long
among other things. That’s all the cue these things need these day, ladies and gentlemen.
An overview of Avino Silver & Gold Mines Ltd (ASM) (ASM.v)
NB: All dollar prices in Canadian Dollars in this section unless otherwise stated.
As has been made plain on these pages over the months (nay years), I’m no big fan of silver
miners and prefer the gold mining end of the precious metals universe. That said, I’m not
averse to trading in silver plays and have done over the years. What has surprised me this year,
however, is the way in which silver companies of all shapes and sizes have sprung hard on the
back of the reasonable re-rating in their underlying metal. Yes I’ve been doing well in gold
trades but yes, it’s clear that some early diversification into silver names would have brought
me even more profits on their leverage.
My problem with silvers, particularly this year, is that to my fundamental (which is admittedly
backward-looking) eye they always seem to be richly priced compared to their earnings
potential. If you prefer, consider that part of the gold stock world offers investment to current
21

,
(or near-future) prices, the rest optionality on an eventual upmove in gold prices (and I will
never own Vista or Chesapeake or Exeter or International Tower Hill for that reason, thanks for
asking). Meanwhile, just about everything in SilverLand, from big producers like Pan American
and First Majestic, to mediums such as Fortuna, to the smallest and most badly managed things
out there (and may stars there are a whole list of those) are treated as if they are an option on
silver, as when the metal moves from U$14/oz to U$16, they’re valued as if silver traded at
U$20/oz spot. With silver today at U$20/oz, earning potential points to a typical U$25/oz baked
in. It just gets very expensive and adds to the risk of reversal in my view, however that doesn’t
stop me from looking around trying to find some value in the silver space.
Which brings me to Avino Silver & Gold Mines Ltd (ASM) (ASM.v), a small producer with
operations in Mexico and project land in Mexico and Canada (and a ticker on the full NYSE,
which is useful for some of you). It’s never been one that has shone brightly, its financials have
always been a bit on the doggy side, it tends to dilute its share count a little too regularly for
my taste. But the latest set of quarterlies got me sitting up and looking again. They say every
dog has its day.
Be clear: I am not a buyer of ASM at the moment and that’s underlined and bold-typed
for a god reason. But I think there’s enough here to lay out the current state of financial play at
the company and watch it more closely, because if it continues to show good financials it’s just
the kind of thing a larger silver play would snap up at a premium and make its own during the
market bull run.
The chart left shows ASM’s last eight quarters’ worth of production and at first sight there
doesn’t seem to be much to make its 2q16 stand out. But the difference is the chart right.
Above right maps the above silver equivalent (AgEq) total production against total booked
sales, because as from early June ASM’s new “Avino” operation in Mexico has (finally, after a
loooooong ramping period) been declared in commercial production yep, that green bar there
on the right shows sales matching production and a very big difference all of a sudden. The
knock-on into the financials comes in operating results (right), which look like this and you don’t
need me to tell you that the financial inputs at this company have suddenly changed a lot. This
is what you see when a messy company starts cleaning up its financial act.
ASM: Operations overview
14
12
10
8
6
4
2
0
22
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2
Oz Ag/AgEq ASM: Ag and AgEq produced, per qtr OzAgEq ASM: AgEq production vs sales
1000000 1000000
Other AgEq prod Total AgEq prod
800000 Ag produced 800000 Total AgEq sold
600000 600000
400000 400000
200000 200000
0 0
3q14 4q14 1q15 2q15 3q15 4q15 1q16 2q16 3q14 4q14 1q15 2q15 3q15 4q15 1q16 2q16
source: company filings source: company filings
$m
revenues
Cost of Sales
Mine Op Income
source: ASM filings

,
And even taking into account the recent equity financing that pushed the share count from
38.49m to 42.97m, the difference in mine operating earnings on the larger sales and margin to
costs makes the per-share earnings larger.
ASM: Shares Out
50
45
40
35
30
25
20
15
10
5
0
Another likeable thing about the new revenues and margin totals: They were done while selling
silver and an average of $14.99/oz and gold at U$1,262/oz. That means there’s plenty of room
for extra topline revenue now that silver’s trading around U$20/oz and gold’s where it is. What
we haven’t seen so far is a net profit at ASM...
$m ASM: Earnings
3
2.75
2.5 Income before other items
2.25 pre-tax earnings
2 net earnings
1.75
1.5
1.25
1
0.75
0.5
0.25
0
-0.25
-0.5
-0.75
-1
1q14 2q14 3q14 4q14 1q15 2q15 3q15 4q15 1q16 2q16
source: ASM filings
...and that may be why the stock dropped some 12.4% after its 2q16 financials were filed on
Monday evening.
But I think the market is caring too much about bottom lines for this quarter, the reason it
missed was for non-cash warrant pricing adjustments and deferred taxes, both “below the line”,
and the real measure of this company today is either operations or balance.
And that balance sheet isn’t bad looking. Here below just three of the “usual suspect” IKN
charts showing the overview of assets and liabilities, plus working capital. Asset growth,
23
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2
source: company filings
serahs
fo
snoillim
ASM: Op.Earnings per share, per qtr
0.08
0.07
0.06
0.05
0.04
0.03
0.02
0.01
0.00
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2
source: company filings, IKN ests

,
currents have dropped, a two-to-one-ratio to the right side between them. But it’s the new
strong working cap position I most like, due to the equity financing and that should now get
backed up by positive free cash flow from ops, particularly the newly commercial Avino mine.
ASM: Assets Breakdown per qtr $m ASM: Liabilities Breakdown per qtr
$m
100 cash inventories 40
other current fixed 35 LT liabilities
80 30 current liabilities
25
60
20
40 15
10
20
5
0 0
4q14 1q15 2q15 3q15 4q15 1q16 2q16 4q14 1q15 2q15 3q15 4q15 1q16 2q16
source: company filings source: company filings/IKN ests
Suddenly ASM is backed up by $20m in positive working ASM: Working Capital per qtr
25
capital and that’s the type of money to attract bidders
20
looking for working assets and a useful cash bonus. At a
market cap of U$103.55m this weekend, it’s not wildly 15
cheap (and yes, like many others it’s had a big run-up 10
since the start of the year) but if it produces and sells at
5
the rate it showed in 2q16, it’s now a profitable silver
0
producer and getting one of those for around U$100m is
way more interesting than paying U$1Bn for the thin- -5
margins at FVI. 4q14 1q15 2q15 3q15 4q15 1q16 2q16
source company filings
Bottom line: You may have noticed that none of the above charts have forecasts or estimates
for the quarters to come. That’s because ASM isn’t my idea of a buy yet, it needs to deliver a
decent looking 3q16 before it interests me enough to bite (even if I need to pay a higher price
for the pleasure of ownership. The 2q16
numbers mark a potential turning point in
ASM but it’s only that, potential, to much
can go wrong with this type of small mining
company to be overly confident of strong
future numbers. As things stand today I’m
interested enough to lay out the company
and stock for your consideration here, you
may want to take more risk than I and buy
a few immediately, you may think I’m mad
for sniffing around this long-term dog all of
a sudden, you may think the same way.
Personally, Avino is now on my watching
brief after a surprisingly positive 2q16, I
roundly oppose the negative market view of
its numbers last week.
Conclusion
IKN380 is done, we end with bullet points:
• I can’t help but feel somewhat guilty about obsessing over Atico Mining (ATY.v) like
this, it’s not a Top Pick stock and too small for constant coverage. But the trade
opportunity to buy in while it’s still misunderstood by the wider market needs
underscoring and my original price target of 70c was clearly pitched too low (and on
the wrong timescale). Today’s piece fixes that.
24
srallod
fo
snoillim

,
• I bought some, but have room to buy more Wesdome (WDO.to) given the right price. I
would still like to average down my position.
• Argentina makes me leery, however upbeat the Northern press is about the change in
government and the Macri free-market openness. I’m not totaly averse to exposure
there, it just has to be the right type. And right place. And right metal. And right price.
Too easy to be put off by its FUBAR political show.
• Imperfect though it was, I enjoyed the Rio Olympics immensely.
• 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
Footnotes, appendices, references, disclaimer
(1) http://incakolanews.blogspot.pe/2016/08/exploration-leaders-on-precious-metals.html
(2) https://finance.yahoo.com/news/atico-reports-consolidated-financial-results-205414915.html
(3)
http://research.dundeecapitalmarkets.com/en/~/media/Dcm/Publications/CoverageListResearch/2016/August/W/WDO0
81916.ashx
(4) http://incakolanews.blogspot.pe/2016/08/continental-gold-cnlto-is-making-good.html
(5) https://www.moodys.com/research/Moodys-changes-its-outlook-for-global-base-metal-industry-to--PR_353870
(6) http://www.andina.com.pe/agencia/noticia-constancia-producira-130000-toneladas-cobre-fino-el-2016-627038.aspx
(7) http://www.sabc.co.za/news/a/95f136004de00675b7babf1caade0c3d/AngloGold-Ashanti-says-stoppages-are-a-
challenge-in-SA-20160815
(8) http://www.proveedoresdemineria.com/?p=nota&id=8511
(9) http://www.politicargentina.com/notas/201608/16047-aranguren-aseguro-estar-mentalmente-bien-para-permanecer-
en-su-cargo.html
(10) http://www.pagina12.com.ar/diario/sociedad/3-307347-2016-08-20.html
(11) http://elperiodicohispano.com/23792-la-comunidad-azuaya-demostro-su-respaldo-al-proyecto-de-mediana-mineria-
rio-blanco/
(12) http://www.entornointeligente.com/articulo/8815737/ECUADOR-Mujeres-piden-suspender-los-proyectos-mineros
(13) http://ecuador.noticiasabc.com/2016/08/19/por-fundamentalismo-se-oponen-a-mineria-dice-presidente-correa-ante-
posicion-de-alcalde-de-cuenca/
(14) http://gestion.pe/economia/estas-son-medidas-mineria-y-medio-ambiente-que-expuso-fernando-zavala-2168125
(15) http://www.avino.com/s/news.asp?ReportID=760430
(16) http://www.europeangoldforum.org/egf16/company-webcast/ASM:CN/
25

,
Stocks To Follow Closed Positions 2015
Closed in 2015 closed close price
Argonaut Gold AR.to jan'15 C$1.47 14-dec-14 C$2.53 72.1% Big gain small time, profit taken
Amerigo Res ARG.to jan'15 C$0.405 20-jul-14 C$0.285 -29.6% Given up on weak Cu prices
Reservoir Min. RMC.v jan'15 C$6.05 18-jun-14 C$4.12 -31.9% sold on Cu downturn
Coro Mining COP.to jan'15 C$0.075 26-jan-14 C$0.035 -53.3% sm, sold on Cu downturn
Fortuna Silver FSM mar'15 U$4.12 10-nov-14 U$3.75 9.0% Short used as hedge
GoldQuest Min. GQC.v mar'15 C$0.26 27-oct-13 C$0.085 -67.3% given up ghost
Rio Alto Mining RIO.to apr'15 C$2.30 07-apr-11 C$3.57 55.2% Top pick, bot out, big win
Timmins Gold TGD jun'15 U$0.60 19-apr-15 U$0.62 3.3% near-term trade, out of time
First Majestic AG jul'15 U$10.51 10-aug-14 U$4.55 56.7% horrible failed trade
NovaCopper NCQ.to jul'15 C$1.05 09-apr-14 C$0.50 -52.4% no more Cu exposure, sm sell
McEwen Mining MUX aug'15 U$0.695 21-jul-15 U$0.92 32.4% Closed nearterm flip for win
Midas Gold MAX.to sep'15 C$0.39 21-sep-15 C$0.35 -10.3% Sm. trade idea that didn't work
New Gold NGD oct'15 U$2.18 23-aug-15 U$3.05 39.9% trade closed, profit taken
Legend Gold LGN.v nov'15 C$0.085 01-mar-15 C$0.035 -58.8% tiny "land grab" idea, failed
Timmins Gold TGD nov'15 U$0.245 20-sep-15 U$0.15 -38.8% small near-term loser
Stocks To Follow Closed Positions 2014
Closed in 2014 closed close price
Fortuna Silver FVI.to jan'14 C$2.80 23-dec-13 C$3.19 13.9% small ST trade closed
Rio Alto Mining RIO.to jan'14 C$2.06 07-jun-13 C$2.30 11.7% trading position finally closed
Network Expl. NET.v feb'14 C$0.01 22-jul-12 C$0.005 -50.0% position closed, did nothing
Tahoe Resources TAHO feb'14 U$13.10 08-apr-13 U$21.72 -65.8% short closed due to reality
Darwin Res DAR.v mar'14 C$0.10 14-jul-12 C$0.045 -55.0% tiny risk play dropped
B2Gold BTO.to mar'14 C$3.07 28-nov-12 C$3.35 9.1% closed to free up capital
Pretium Res PVG mar'14 U$5.38 22-nov-13 U$6.50 -20.8% short closed as port longer
Gold Res Corp GORO may'14 U$5.07 26-jan-14 U$4.12 16.7% took profit
Bear Creek Min BCM.v may'14 C$1.63 23-mar-14 C$2.05 25.8% Took profit, sm near-term win
Eco Oro Min. EOM.to aug'14 C$0.48 22-sep-13 C$0.26 -45.8% sold small loser to make room
True Gold TGM.v sep'14 C$0.395 02-feb-14 C$0.41 3.8% M&A won't happen, sold
Santacruz Silver SCZ.v sep'14 C$1.04 26-jan-14 C$0.86 -17.3% silver/M&A spec, rel. small
Timmins Gold TGD nov'14 U$1.38 09-apr-14 U$0.99 -28.3% failed trade, sell, raise cash
Kinross Gold KGC nov'14 U$2.90 20-oct-14 U$2.15 -25.9% V small trade, didn't work, chau
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.145 -48.2% lost China sponsor
Stocks To Follow Closed Positions 2013
Closed in 2013 closed close price
USA Graphite USGT feb'13 U$0.93 08-jan-13 U$0.17 81.7% short tgt made/trade closed
Lachlan Star LSA.to feb'13 C$1.50 30-sep-12 C$0.95 -36.7% sold to reduce port risk
United Silver USC.to mar'13 C$0.21 28-oct-12 C$0.095 -54.8% small Ag sector trade, failed
Aurcana Corp AUN.v apr'13 C$1.07 11-nov-12 C$0.55 -48.6% closed on poor YE results
Gold Res Corp GORO apr'13 U$14.11 25-jan-13 U$9.38 33.5% short tgt made/trade closed
Marlin Gold MLN.v apr'13 C$0.075 10-feb-13 C$0.065 -13.3% closed trade
Bear Creek BCM.v may'13 C$2.58 01-apr-13 C$2.40 -7.0% near-term, time ran out
Lupaka Gold LPK.to may'13 C$1.12 23-oct-11 C$0.32 -71.4% towel thrown in
Tahoe Resources TAHO may'13 U$18.62 08-apr-13 U$14.70 21.1% took profit on ST short
OceanaGold OGC.to jun'13 C$3.03 16-sep-12 C$1.18 -61.1% sold on gold drop
IMPACT Silver IPT.v jun'13 C$1.14 13-jan-13 C$0.62 -45.6% sold on silver drop
Duran Ventures DRV.v jun'13 C$0.045 10-may-13 C$0.025 -44.4% ST trade never worked
Plata Latina PLA.v jun'13 C$0.79 10-apr-12 C$0.13 -83.5% closed
Bellhaven BHV.v jun'13 C$0.065 03-jun-13 C$0.12 84.6% closed ST trade
B2Gold BTO.to aug'13 C$3.07 28-nov-12 C$3.44 12.1% sold 1/2 to raise cash
Colossus Min. CSI.to aug'13 C$0.72 24-jul-13 C$0.79 9.7% closed thru nerves on future
26

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Pretium Res PVG.to aug'13 C$8.20 11-jun-13 C$10.14 23.7% closed to raise cash
Bear Creek BCM.v sep'13 C$2.06 30-may-13 C$2.20 6.8% sold on pol risk decision
MAG Silver MVG oct'13 U$7.00 12-sep-13 U$5.62 19.6% near-term short
Gold Res Corp GORO oct'13 U$9.52 03-may-13 U$4.98 47.7% short tgt made, covered
AQM Copper AQM.v oct'13 C$0.31 16-oct-11 C$0.125 -59.7% closed failed trade
First Majestic AG nov'13 U$11.51 07-nov-13 U$10.50 8.8% v near term short, closed
Fortuna Silver FSM nov'13 U$4.00 07-nov-13 U$3.68 8.0% v near term short, closed
Primero PPP nov'13 U$5.70 07-nov-13 U$5.75 -0.9% v near term short, closed
Starcore Intl SAM.to nov'13 C$0.235 08-sep-13 C$0.17 -27.7% ST trade didn't work, sm loss
B2Gold BTO.to dec'13 C$2.22 28-nov-12 C$2.16 -2.7% closed ST trade to raise cash
Stocks To Follow Closed Positions, 2012
Closed in 2012 closed close PPS
Soltoro SOL.v jan'12 C$0.87 07-nov-11 C$0.94 8.0% cash moved to BCM.v
Gold-Ore Res GOZ.to feb'12 C$0.84 13-oct-10 C$0.98 16.7% trade closed on ELG.v offer
Minefinders MFN feb'12 U$11.68 17-nov-11 U$14.80 26.7% target made, trade closed
Iron Creek IRN.v mar'12 C$0.58 26-sep-10 C$0.31 -46.6% time up on small bad trade
U.S. Silver USA.to apr'12 C$2.18 15-mar-12 C$1.86 -14.7% ST trade no good, cut loss
Augusta Res. AZC.to may'12 C$3.10 29-jan-12 C$2.07 -33.2% bad mkt, bad trade cut loss
Bellhaven BHV.v may'12 C$0.50 22-sep-10 C$0.28 -44.0% new mgmt not impressive
Zincore Metals ZNC.to may'12 C$0.325 29-jul-11 C$0.17 -47.7% bad mkt, bad trade cut loss
Soltoro SOL.v may'12 C$0.70 18-mar-11 C$0.41 -41.4% bad mkt, bad trade cut loss
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% fail ST trade close pre split
Estrella Gold EST.v aug'12 C$0.91 27-mar-11 C$0.14 -84.6% Closed on port realignment
Fortuna Silver FVI.to sep'12 C$1.07 03-may-09 C$5.32 397.2% sell call $6.17/ Mar25
Strait Minerals SRD.v oct'12 C$0.125 09-dec-11 C$0.12 -4.0% closing coverage til FY13
Sunward Res SWD.to oct'12 C$1.47 13-mar-11 C$1.21 -17.7% sold, took loss
Gold Res Corp GORO oct'12 U$21.47 09-sep-12 U$17.40 19.0% Short trade closed
Yellowhead Min. YMI.to nov'12 C$1.00 01-apr-12 C$0.63 -37.0% sold, took loss
Primero Mining PPP nov'12 U$7.26 07-oct-12 U$6.73 7.3% Short trade closed
Bear Creek Min. BCM.v nov'12 C$3.38 07-nov-11 C$3.72 10.1% Took small profit
Vena Resources VEM.to dec'12 C$0.70 31-may-09 C$0.18 -74.3% Failed trade (caps F)
Galway Res GWY.v dec'12 C$2.19 24-nov-12 C$2.30 5.0% closed good ST arb trade
Stocks To Follow Closed Positions, 2011
Closed in 2011 closed close PPS
Sunward Res SWD.v jan'11 C$1.05 21-nov-10 C$1.63 55.2% target made, trade closed
Serengeti Res SIR.v mar'11 C$0.245 05-dec-10 C$0.285 16.3% sold pre-tgt, ST trade fail
Fronteer Gold FRG apr'11 U$2.37 03-may-09 U$15.24 543.0% buyout, trade closed
Minefinders MFN apr'11 U$9.09 07-nov-10 U$16.89 85.8% target made, trade closed
Metalline Min. MMG may'11 U$1.04 26-jan-11 U$0.89 -14.4% exit, resource disappointed
Peregrine Met PGM.to jul'11 C$0.87 06-mar-11 C$2.60 198.9% buyout offer, closed
Dynasty Metals DMM.to jul'11 C$4.20 03-may-09 C$2.85 -32.1% Sold. Fail. Move on.
Aura Silver AUU.v aug'11 C$0.22 13-oct-10 C$0.16 -36.4% Bad pick. Take loss
U.S. Silver USA.v aug'11 C$0.52 26-jan-11 C$0.71 36.5% closed to make room
B2Gold Corp BTO.to sep'11 C$2.80 12-may-11 C$4.27 52.5% target made, trade closed
Bear Creek Min. BCM.v sep'11 C$3.80 27-may-11 C$4.17 9.7% macro sell call victim
Minefinders MFN sep'11 U$14.70 10-aug-11 U$15.15 3.1% macro sell call victim
Great Panther GPR.to sep'11 C$3.03 22-aug-11 C$2.64 -12.9% macro sell call victim
Fortuna Silver FVI.to sep'11 C$1.07 03-may-09 C$5.36 400.9% sold 20%, macro sell call
Focus Ventures FCV.v nov'11 C$0.40 20-apr-10 C$0.20 -50.0% cut losses, bad trade
Regulus Res. REG.v dec'11 C$1.17 14-aug-11 C$0.52 -55.6% cut on news of poor 43-101
2009 and 2010 closed positions in appendices below
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Stocks To Follow Closed Positions, 2010
Closed in 2010 closed close PPS
B2Gold Corp BTO.to Jan'10 C$0.88 08-nov-09 C$1.49 68.2% target made, trade closed
Radius Gold RDU.v Jan'10 C$0.18 23-aug-09 C$0.40 122.2% target made, trade closed
MAG Silver MVG mar'10 U$5.60 23-nov-09 U$7.28 30.0% closed in pdac week
Riverside Res RRI.v mar'10 C$0.435 20-sep-09 C$0.60 37.9% closed in pdac week
Amarillo Gold AGC.v mar'10 C$0.81 31-may-09 C$0.70 -13.6% closed in pdac week
B2Gold Corp BTO.to apr'10 C$1.24 18-feb-10 C$1.50 21.0% target made, trade closed
Lumina Copper LCC.v apr'10 C$0.84 14-jun-09 C$1.55 51.2% total position now sold
Troy Resources TRY.to may'10 C$1.10 03-may-09 C$2.25 104.5% sold on negative results
AuEx Ventures XAU.to may'10 C$2.51 24-may-09 C$3.38 34.7% trade closed
Nevada Copper NCU.to jun'10 C$3.27 14-mar-10 C$2.03 -37.9% need to lower Cu exposure
Carpathian Gold CPN.to jun'10 C$0.39 14-mar-10 C$0.35 -10.3% too exposed to cap raising
Amerix PM Corp APM.v jun'10 C$0.065 08-nov-09 C$0.05 -23.1% victim of macro bear
Antares Minerals ANM.v jun'10 C$1.42 06-dec-09 C$2.10 47.9% sold half
Vena Resources VEM.to jun'10 C$0.37 31-may-09 C$0.23 -37.8% sold half
Minera Andes MAI.to sep'10 C$0.75 28-jul-10 C$0.95 26.7% ST trade closed
Gold-Ore Res GOZ.to sep'10 C$0.52 01-aug-10 C$0.75 44.2% target made, trade closed
B2Gold Corp BTO.to sep'10 C$1.45 25-may-10 C$2.01 34.5% target made, trade closed
Blue Sky Uran BSK.v oct'10 C$0.41 19-may-10 C$0.22 -46.3% v small v bad trade closed
Dia Bras Expl DIB.v oct'10 C$0.14 30-aug-09 C$0.35 150.0% target made, trade closed
S. Amer. Silver SAC.to nov'10 C$1.38 24-oct-10 C$1.60 -15.9% loss on short, small fail
Ventana Gold VEN.to nov'10 C$7.92 27-jun-10 C$13.51 70.6% trade closed on buyout
Lumina Copper LCC.v nov'10 C$1.42 11-aug-10 C$3.65 157.0% trade closed
Antares Minerals ANM.v dec'10 C$1.42 06-dec-09 C$8.40 491.5% trade closed
Rio Alto Mining RIO.v dec'10 C$0.69 23-mar-10 C$2.16 213.0% trade closed
Coro Mining COP.to dec'10 C$0.585 03-oct-10 C$1.24 112.0% target made, trade closed
Stocks To Follow Closed Positions, 2009
Closed positions closed closing PPS
Cardero Res CDY/CDU.to May'09 U$1.20 03-May-09 U$0.87 -27.5% sold on negative news
Eastmain Res. ER.to May'09 C$1.04 06-May-09 C$1.315 26.4% trade closed
Radius Gold RDU.v May'09 C$0.165 03-May-09 C$0.235 42.4% trade closed
Latin Amer Min. LAT.v May'09 C$0.12 03-May-09 C$0.158 29.2% trade closed
Aquiline Res. AQI.to July'09 C$2.03 16-Jun-09 C$1.68 -17.2% took loss, bad timing
Chariot Resources CHD.to Aug'09 C$0.20 12-Jul-09 C$0.415 107.5% trade closed
Castle Gold CSG.v Sep'09 C$0.64 02-Aug-09 C$0.60 -6.3% ST trade didn't work out
Guyana Goldfields GUY.to Sep'09 C$2.30 12-May-09 C$4.50 95.7% profit taken
Los Andes Copper LA.v Sep'09 C$0.09 21-Jun-09 C$0.09 0% trade closed
Pediment Gold PEZ.to Oct'09 C$0.80 09-Aug-09 C$1.00 25.0% trade closed
Minera Andes MAI.to Oct'09 C$0.68 03-May-09 C$0.71 4.4% too much bad news
Dynasty Metals DMM.to Nov'09 C$4.18 03-May-09 C$6.01 43.8% half sold
Rusoro Mining RML.v Nov'09 C$0.55 03-May-09 C$0.57 3.6% underperformed
Important Disclosure
The information and opinions contained within this report reflect the personal views of the author and therefore all
material within should not be construed as accurate or reliable or be utilized as advice for investment or business
purposes. Independent due diligence and discussions with ones own investment and business advisor is strongly
recommended. Accordingly, nothing in this report should be construed as offering a guarantee of the accuracy or
completeness of the information contained herein, as an offer or solicitation with respect to the purchase or sale of any
security or as an endorsement of any product or service. All opinions and estimates included in this report are subject to
change without notice. It is prohibited to copy or redistribute this report to any type of third party without the express
permission of the author.
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