IKN #386Premium

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The IKN Weekly
Week 386, October 2nd 2016
Contents
This Week: Trading heads-up, In today’s issue, TIPS vs gold suggests that precious metals
have room to run.
Fundamental Analysis: A 3q16 portfolio review.
Stocks to Follow: Overview, Cordoba Minerals (CDB.v), Atico Mining (ATY.v), Sandstorm Gold
(SSL.to) (SAND), B2Gold (BTG) (BTO.to), Regulus Resources (REG.v).
Copper Basket: Overview, HudBay (HBM.to), Amerigo (ARG.to), Capstone Mining (CS.to) and
Copper Mountain (CUM.to).
Low Cost Producer Basket: Overview, Barrick (ABX).
Regional Politics: Regional Risk Review.
Market Watching: Another Minera IRL update, B2Gold (BTG) (BTO.to) at Masbate, Silver Bull
(SVB.to) (SVBL) a potential silver/zinc speculative drill play.
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
Trading heads-up
It’s never been a big or particularly important position in the ‘Stocks to Follow’ list (in fact in
absolute cash terms the word “tiny” describes it best), but it’s time to throw in the towel and
admit defeat on Miranda Gold (MAD.v). I’ll sell this one in the week ahead and even though it’s
showing a slight profit, its thinly traded nature means that I’m likely going to take a loss. More
in both ‘Fundamentals..’ and ‘Stocks to Follow’.
In today’s issue
• We review the performance of the precious metals and mining sector in 3q16 and also
that of The IKN Weekly ‘Stocks to Follow’ list. That’s the fundies offering this week.
• It’s also the time for the regular end-quarter ‘Regional Risk Review’, found in ‘Regional
Politics’. Argentina to the fore once again and I’m now a little bored by the Argy-
obsession up North, but the shock “NO” result for the peace accord today has suddenly
spiked up risk in Colombia.
• B2Gold (BTG) (BTO.to) had a particularly rough week thanks to the mining ministry of
The Philippines. We take a closer look at the issue in ‘Market Watching’ and explain why
you shouldn’t bee too worried. In fact it’s a potential buying opportunity.
• Patience will pay off for those of you holding Minera IRL shares. Not long now.
TIPS vs gold suggests that precious metals have room to run
The third quarter of 2016 is now history and I for one am glad to see the back of it. For the
mining sector the period was marked by the screeching halt in its bullish run, for the metals
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price inertia was the overall name of the game without any new trend setting in, be it up or
down, for most of the underlying commodities and no direction apparent. Then for me
personally the last couple of weeks have seen a dearth of fundies news with which to make any
serious decision. In other words, the market’s been a bit on the boring side and a far cry form
the “sneeze on it and it goes up” ultra-bull of the previous Q2.
We take a closer look at what Q3 did or didn’t do for us in the Fundies section this week, a
sector and portfolio review, but here in the intro I want to put my optimist’s hat on and say that
all is not lost, things are looking up. Check this out, the ten year version of the inverse TIPS
(white line) versus gold (yellow line) chart.
We’ve used this comparative chart on a few occasions this year, because the correlation
between real US interest rates and the price of gold is one that’s impressively tight as well as
one that’s managed to stand the test of time. If you strain your eyes over to the right side of
the chart, you’ll notice that inverse TIPS has just popped back under zero (-0.004% to be
exact) which is, nominally at least, a bullish signal for the price of gold. However, so far at least
gold hasn’t managed to join in and the two lines have separated a little more than they
normally do. Now it’s not impossible for things to stay that way (as a glance at other parts of
the above chart will soon tell you) but it has increased the likelihood that we get a bounce-back
rally in gold and there’s certainly room for gold to run on a logical basis, even U$1,400/oz isn’t
out of the question.
One things true about the gold market is that it does tend to lapse into moments of ennui along
the way, but another is that the boring bits don’t last for long. Now that 3q16 is behind us, a
big election looming closer and a new tide of political and financial nerves washing over Europe,
not to mention the new reality of a Brexit that really is going to happen it seems, the boring
interval in 2016 may now be over. Living in interesting times suits the gold price, the way it is.
Fundamental Analysis of Mining Stocks
A 3q16 portfolio review
The next thing to happen in the world of mining starts next week, as (most, not all) producers
hand over their 3q16 production and/or sales numbers and give me, your fundies-obsessed
numbercruncher, something real to chew on. So what with the third quarter of 2016 (3q16)
now officially closed and picking up on a theme mentioned in last week’s intro, I’m going to
take the opportunity to review the quarter just closed for the sector, then move to see how the
IKN Weekly Stocks To Follow list has performed in comparison, warts and all.
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Reviewing the macro
As mentioned last week in the intro to IKN385 “Reviewing “Buy. Hold. Win.””, the mining sector
and its stocks haven’t done nearly as well recently as they did in the first half of the year when
pickings were easy and the fruit was low-hanging. Here’s a snippet from last week’s intro:
“Suddenly we’re looking at a broad market (S&P500 etc) that’s been in
excellent rally mode (up 8% approx) and a GDX which has only managed to
flatline. In short, the “Buy. Hold. Win.” idea started well enough but it’s not
been anything like as successful over the Northern summer months,
something that needs to be taken into account.”
We now have hard numbers for the end of 3q16 and we can expand on that thought and
quantify it a little more. A tidy way of looking at the period in which (glass half empty) the
metals/mining rebound stalled or (glass half full) the sector got its necessary consolidation
period after the initial period of rapid growth is in this chart:
Quarter over Quarter percentage changes
in GLD, GDX and GDXJ
60
52.96
50 45.5544.98
38.76
40
30
20 15.95
7.51 10 3.97
-0.66
0
-10 -4.62
4q15 to 1q16 1q16 to 2q16 2q16 to 3q16
source: Yahoo Finance data
3
egnahc
%
QoQ
GLD
GDX
GDXJ
The dataset is simplicity itself. Take end quarter prices for the gold bullion ETF (GLD), the
precious metals miners’ ETF (GDX) and the precious metals junior miners’ ETF (GDXJ) then run
them through a spreadsheet to get the quarter-over-quarter changes in said prices (if you care
enough, here’s the dataset...
Quarter end prices of ETFs
End 4q15 End 1q16 End 2q16 End 3q16
GLD 101.46 117.64 126.47 125.64
GDX 13.72 19.97 27.71 26.43
GDXJ 19.21 27.85 42.6 44.29
source: Yahoo Finance
...but the clear visual in the chart does the job best). Between end 4q15 and end 1q16 we saw
the initial blast-off in gold and the miners rebounded nicely. That got doubled-down in the 1q16
to 2q16 period, because even though gold
didn’t run as fast the miners had been let GLD gold holdings, Brexit to date (metric tonnes)
1000
off the leash after two long years of bearish 990
drudge. So when Brexit marked the end of
980
2q16 and the world was gnashing its teeth 970
over the systemic shock it would bring 960
there weren’t many predicting that gold’s 950
initial run were over and the flattening out 940
of the mining complex in 3q16, but that’s 930
920
what we got. It also shows up in our
910
regular GLD inventories tracker which from
900
Brexit shows the big pop higher then the
slight but clear decadent trend to this
weekend, the inventory amounts lost aren’t
massive (spikes and troughs aside, let’s
round it out to “from 965 to 950”) compared to the total inventory held, but the lack of interest
61/32/6 61/82/6 61/1/7 61/7/7 61/21/7 61/51/7 61/02/7 61/52/7 61/82/7 61/2/8 61.8.5 61/01/8 61/51/8 61/81/8 61/32/8 61/62/8 61/13/8 61/6/9 61/9/9 61/41/9 61/91/9 61/22/9 61/72/9 61/03/9
mt
source: SPDR GLD data

,
in hoarding the yellow stuff is evident and we haven’t seen the 1,000 tonne barrier threatened
at all.
As for the reasons behind this change, it can be generally summed up as “lack of fear”. We’ve
had the Fed jawboning along the way and we’ll also always have to suffer those who insist that
gold is “a love trade” as well as “a fear trade”, that gold goes up in both deflation and inflation
scenarios, that gold is bullish during periods of interest rate inertia and in tims of interest rate
hikes. Sorry, doesn’t work like that and it’s no coincidence that the moves in the price of gold
coincide with the phases of this chart, the VIX 2016 YTD (and I think it’s the first time ever for
this one in The IKN Weekly). The early year upsets (not revisiting the newsflow here, we
covered it blow-by-blow at the time) saw the first thrust of gold, the Brexit period June/July
was the other major moment, when gold went over U$1,300/oz and has stayed there ever
since. But blips aside (e.g. early
September) the VIX and the market
atmosphere went from rough to
smooth, tailor-made for alpha in
the broad markets (yes, the Dow
did break 18,500 and an all-time
high, I noticed it too).
Sorry Mr. Holmes, you cannot have
your cake and eat it, gold is a fear
trade and always will be. As things
stand this weekend we’ve seen
more volatility showing in the VIX,
a higher pulse rate that may be due
to the impending US Presidential
election. Or it may be Deutsche
Bank. Or “Hard Brexit”. Or Europe
in general. Or Aleppo/Russia/MH17/all sorts of geopolitics (that don’t matter much). Or it could
be the oldest and most effective ceiling to the price of broad market stocks yet invented, an
impending earnings season with result that fail to justify the prices being charged for share
ownership of companies (normally known as “PE”). But if we isolate the Clinton/Trump issue for
a second, it’s a good way of seeing the psychological fear trade element in gold as I’ve heard
no end of Trump supporters saying that if Clinton wins gold’s going higher. And of course no
end of Clinton supporters saying that if Trump wins gold’s going higher (and then there’s Frank
Holmes who says that Trump or Clinton will be good for gold, bless him). In other words, the
result that the opposing side fears is in fact bullish for the price of gold! If beauty is in the eye
of the beholder, ugliness must be too.
To wrap up part one of this review, we can say without fear of contradiction that the metals
and miners sectors have stalled after the violent and strong rally of the first half of this year.
Some sort of consolidation period was always going to happen at some point, the whole tide of
the market can’t continue to go up forever and as mentioned on a couple of editions of The IKN
Weekly in September it’s at this point that stock picking comes into its own, money results and
real metal in rocks becomes important, following the paid sponsorship pumps or actually
believing that the word “optionality” will convert your backwater stock’s project into a real mine
becomes a less effective strategy. As quarterly results roll out exploration program results get
known, paper from placements from the more dubious end of the juniors market goes free-
trading etc I expect that sorting the wheat from the chaff will become a more effective way of
navigating the sector. And my stars, there’s a lot of chaff out there.
Reviewing the IKN Weekly ‘Stocks to Follow’ portfolio
That’s enough blahblah on the macro backdrop in Q3, now for the micro and a look at how the
stocks chosen on these pages did in the 3q16 period. To do so I’ve split them up into three
groups, with the first one the most indicative and important.
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1) Stock positions held through the period
2) Stock positions closed during 3q16
3) Stock positions opened during 3q16
The first category is the most important because a) it involves the lion’s share of stocks held at
The IKN Weekly b) they tend to be the biggest positions and c) longer-term positions are the
rule round these parts, not the exception. To consider these stocks, here’s a table that shows
the prices of the ten stocks held start to finish a per IKN373, published July 3rd (i.e. including
Friday July 1st trading so it adds an extra day to the mix...bite me).
Q3 performance of IKN Weekly stocks open thru qtr
Ticker IKN373 IKN386 % change
BTO.to 3.24 3.44 6.17
REG.v 1.29 1.4 8.53
SAM.to 0.8 0.69 -13.75
SAND 4.64 5.03 8.41
TK.v 0.23 0.19 -17.39
WDO.to 1.98 2.67 34.85
RRI.v 0.42 0.42 0.00
CNL.to 3.63 4 10.19
LRA.v 1.2 1.25 4.17
FCV.v 0.09 0.08 -11.11
source: IKN data, calcs
As you can see, during 3q16 the list saw three losers (SAM.to, TK.v, FCV.v), one unchanged
position (RRI.v) and six winners (the others). That’s the right ratio at first sight but it’s not quite
as wonderful as it first seems, because the three red inks are all double figure percentage
losers and if you do the sums and such, on average the ten stocks have gained just over 3% in
3q16. That compares closely to the numbers posted by GDX and GDXJ.
That’s the longer-term positions that ran from start 3q16 to finish, to those we now add the two
stock positions we closed during 3q16:
• The short in HudBay (HBM), which was booked as a 3.6% win.
• The long position closed in INV Metals, which was booked as a 280% win.
Although nominally a win the HBM short was really a wash once commissions and carrying
charges for shorts are considered. On the other hand and even if I say so myself the INV.to
trade turned out very well, I was also lucky to have opened and closed at the right times.
The final category is the performance of new trades, added during 3q16:
• Miranda Gold (MAD.v), opened in early July, now up 4.0%
• Atico Mining (ATY.v), opened in late July, now up 2.0%
• Rye Patch Gold (RPM.v), opened early September, now down 12.7%
• Cordoba Minerals (CDB.v), opened a couple of weeks ago, now up 11.0%
Again, MAD.v and ATY.v are best considered as “UNCH” and right along with the quarter sector
averages. RPM.v has been disappointing so far, CDB.v has started well enough.
Bottom line: Putting them all together, considering the three parts as objectively as possible
and ignoring the fact that my personal positions in the stocks are cash weighted (which affects
overall portfolio performance significantly) it’s fair to say that if it weren’t for the one punctual
and highly successful trade in INV Metals the IKN Weekly showing in 3q16 would be “industry
average”: Not bad, not great, straight down the middle average and nothing to crow about at
all. That also means those of you paying for this missive on a monthly basis would have been
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much better off buying U$120 worth of your preferred speculative penny stocks than this
subscription.
It wasn’t an fun quarter as action slowed down and the easy pickings dried up. But the change
in market atmosphere also gives me reason to be cheerful because the quarter to come should
suit my skill set more. Although not averse to rolling the dice on a name or two in the crappy
end of the market (I bought MAD.v after all) those tend to be the exceptions to my portfolio
rather than the rule. A person such as I, fundies-based, untuned to the pure stock market
trading of paper, rather slow and constantly searching for value and “real stories” rather than
optionality or heavy promotion based on market players, and insistent on “buying quality” when
it comes to their mining company vehicle hasn’t made the same kind of large percentage gains
that somebody with a smarter sense of capital market dynamics enjoyed in the boom period,
those that were smarter about buying optionality plays (to name but one example). We’re now
moving into a stock-picking period when the cream should rise, I like that more.
That’s the theory at least, let’s see how things get on in Q4 but before wrapping up I will say
that you’d be wise to judge The IKN Weekly on performance, not just on entertainment value
or the occasion nugget of market intel or advantage it can throw your way. This is in essence a
capitalist publication, it exists to help you make money so if it’s not doing that your best
reaction would be to unsubscribe, walk away and find a better place to spend your hard-earned
cash. Just like any other newsletter or advisory service there’s only one true way of judging its
effectiveness, in Q3 The IKN Weekly has not beaten the market.
Focus on four under-performers
At times like these I don’t care much about the performance of the better winners (because
that’s what they were supposed to do anyway, right?), our attention should be on the ones that
haven’t lived up to expectations. Here’s a little script on four of the weak spots in today’s
portfolio, including thoughts on what might have gone wrong and what I intend to do.
Miranda Gold (MAD.v): This has always been a tiny play, but even though it’s marginally in
the green it hasn’t delivered the type of large percentage difference one needs in order to make
a small cash outlay worthwhile. We’re
now looming in the shadow of its
placement escrow day and the plan
was all about the stock making a
move (via results news or a promo
effort) before that time, then cashing
in and leaving before the stock in
escrow could take advantage.
That was the plan at least, the fact is
that MAD hasn’t moved and with
29.1m shares bought at 9c about to
go free-trading on October 24th this
trade is going into the failure pile. As
noted below in ‘Stocks to Follow’ and in the intro, it’s time to cut and run and leave an extra
space on the ‘Stocks to Follow’ list for a company more worthy of our attention.
Rye Patch Gold (RPM.v): This is the recently added gold play with near-term production in
the pipeline that should see the company become a free cash flow positive producer as early as
1q17 thanks to a transformative deal it’s done to buy the Florida Canyon mine (see IKN382 for
the full NOBS report). The problem? Since I bought in the stock has fallen by nearly 13% to my
average.
In IKN384 two weeks ago I wrote that I think I may have made a near-term strategic error by
buying in before the large amount of escrow stock from the placement earlier this year goes
free trading (and apologies for the over-use of the first person, but I feel like underscoring just
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who is to blame). By way of reminder, the first and biggest tranche is when 223m shares
(placed at 22c in July) go free-trading on October 17th and when you consider that including
those shares RPM has 387m shares out, that’s a lot of potential dilution in the pipe. Then comes
a much smaller second wave on November 29th, when brokers’ and bonus warrants come out of
escrow. For sure I knew about the
escrow stock and when it was going to
get freed up (full details in IKN382),
but my value-oriented brain didn’t give
it the necessary gravity at the time, it’s
one of those occasions when my feeling
for the ways of capital markets fails me
and is overridden by the pure math side
of the story. I get all, “Yeah I know
there are 387m S/O and a bunch of
those will get sold into the market mid-
October but JUST LOOK AT THE
NUMBERS! This thing is still way cheap
if the mine works as planned, it’ll go
higher easily come 2017”. There’s the problem you see, sometimes you don’t see the forest for
the trees but on other occasions it’s worth staring at an individual tree or two. Yes I’m confident
that RPM will be higher, much higher in fact, in 2017 once production cranks up and the
execution risk is much lower than the market assumes at this point too, but I didn’t take into
account that the price could go lower due to the placement shares coming out of escrow, I
could have got in cheaper than I have, no doubt about that.
The solution to all this? Simple enough, I’m going to hold the shares I’ve bought and take the
rough over the near-term in order to benefit from the medium-term. Even with 387m shares
out this stock price is compellingly low and represents an excellent bargain, it’s just more fool
me that I read the near-term dynamics badly and paid too much. Another part of the remedy is
that I’ve (mentally) separated a chunk of my remaining sideline cash and will add if RPM goes a
lot lower on October 17th or the days following, there’s a potential opportunity to average down
before the good things start to happen at RPM and if so, I get to mitigate my error a little.
Tinka Resources (TK.v): This has been a highly frustrating stock to own for three reasons.
Firstly it has plenty to like and still does, but gets
zero market attention. Second it’s in the zinc
sector and while the metal has been the year’s top
performer (this chart (right) ripped from this
Reuters note on Friday (1)), TK has done basically
nothing since its first flush move (when these
pages recommended the stock) and if you’re like
me, its current 18c and 20c price range means
you’re breakeven at best while plenty of other
zinc-exposure stocks have shown strong gains in
the period (including the overpumped and
fundamentally weak Trevali (TV.to), a fact that
sticks firmly in my fundies craw, believe me).
But it’s the third thing that’s most frustrating,
because it’s my basic error: I called the impending
bullish zinc scenario well, but instead of taking
advantage of via more than one stock I put all my
eggs into this one basket and now regret the fact.
In hindsight, a far wiser move would have been to buy bits and pieces of several stocks such as
the sellsider pushed TV.to or the hotpot AZ.v, instead of gambling on this one tiny play.
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I still like TK.v and will hold through,
it’s now secured all its community
agreements around Ayawilca (which is
important, though the market gives no
credit for this type of grassroots work)
and the delayed drill program is now
set to kick off in Q4, that will provide
newsflow and there’s plenty to like
about TK at its current level. I’m still
concerned about a lack of news on
equity raising and that’s likely to be
the current drag on price, the
company needs to bite the bullet
sooner rather than later and raise the
cash it needs to get through 2017. But what I now plan to do is correct my trading mistake,
expand Zn exposure and find at least one other company to hold alongside TK to give a second
arrow in my quiver. I’m a holder of the stock today because I believe in its future and potential,
but TK won’t get any more of my money until it shows better share performance.
Starcore Intl (SAM.to): Here are a few quotes from Rick Rule:
May 2011 (2): “I've learned in 30 years that anything that can go wrong with a big mine can go
wrong with a small mine.”
December 2012 (3): “Everything that can go wrong with a big mine can go wrong with a small
mine”
July 2016 (4): “Everything that can go wrong with a big mine can go wrong with a small mine”
September 2016 (5): “I would say that the third element of success is to understand that big
deposits and small deposits offer up the same variety of risks. In other words, everything that
can go wrong with a big deposit can go wrong with a small deposit. But a small deposit can
never make you big money.”
Get the picture (and I saved you the examples from 2013 to 2015)? The thing is, it’s a good
quote and smart too (which is probably why Rule makes use of it so much) and yes indeed, it
applies to SAM.to as this is another frustrating position, down nearly 14% in 3q16 and this time
it’s because of shortcomings in its
operations. Indeed San Martin is a
small gold mine and at roughly
5,000/oz gold production per quarter
it doesn’t pretend to be anything else,
so when a glitch hits such as the
reduced throughput it reported in the
last quarter, the financials get affected
significantly by small changes.
In 3q16 SAM was judged squarely on
the performance of its operating mine
and due to that, it didn’t do anything
for my investment. If SAM were only
San Martin I wouldn’t be anywhere near as interested in the stock as I am today (for one thing
it wouldn’t be a Top Pick) and it hasn’t helped that things like the Altiplano toll milling arm has
been slower to ramp up than we wanted, or the U$7m net proceeds from the real estate deal
have been deferred until “before Christmas” instead of closing last month as was the original
plan. But in the same way that a lacklustre period can negatively affect a small operation, it will
8

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only take one good quarter to see SAM sparkle operationally. As it’s a tightly managed company
with a strong financial position, it gives the leeway to take a longer view and let all its plans
come to fruition (Toiyabe, Toll Mill, Real Estate, Creston sale, San Martin) and therein lies the
basic attraction of SAM as an investment; any one of those could make this stock a multi-
bagger winner. Therefore this is one I hold through too, it’s one where I’ll ignore Rule’s
warnings about small mines and apply the necessary patience. There’s just too much to like in
the longer term to get too antsy about a soft quarter’s worth of price action.
Stocks to Follow
I won’t try and gloss things over, last week was one of the most depressing and disheartening
weeks at market I’ve had in a long while. I do note that GLD was down 1.6% on the week, GDX
was down 2.2% on the week and GDXJ was down 2.5% on the week, which means the metals
and mining market was solidly lower, but it’s hardly the type of massive dumpage we used to
get at times in 2014 and 2015. But all the same, not a single one of the 14 stocks in the current
‘Stocks to Follow’ list managed to register a gain and while most of the losses were small and a
percentage point or two either side, the only relief was the UNCH result from Rye Patch Gold
(RPM.v), a rare week indeed. The worst losses came from B2Gold (BTO.to down 10.4%) thanks
to the mischief in Masbate, the two other larger losers were Continental Gold (CNL.to down
8.3%) and Atico Mining (ATY.v down 7.1%).
It’s a downer not to have a single winner in a portfolio of 14 names in a week, a feeling
exacerbated by the trials and tribulations of Top Pick B2Gold at Masbate. The general grey
atmosphere may have been partly caused by some weird looking trades on Friday and some
window-dressing for Q3 close going on, but that’s a minor thing. Some days are just better than
others, I suppose.
There are currently 14 open positions on the ‘Stocks to Follow’ list, one less than our self-
imposed maximum of fifteen at any given time. Eleven stocks are in the green, three in the red.
company Ticker this week Avg Price Reco date Current PPS Gain/Loss% Notes
TOP PICKS
B2Gold BTO.to STR buy C$2.11 12-sep-14 C$3.44 63.0% tgt $5.30 IKN375
Regulus Res REG.v hold C$0.64 06-abr-15 C$1.40 118.8% LT exploreco top pick
Starcore Intl SAM.to STR buy C$0.62 10-ene-15 C$0.69 11.3% $1.04 tgt, excellent value
Long positions (in current order of preference)
Sandstorm Gold SAND buy U$3.80 17-abr-16 U$5.03 32.4% $7 tgt IKN378, trading well
Tinka Res TK.v buy C$0.195 19-abr-16 C$0.19 -2.6% Top value under radar Zn play
Wesdome Gold WDO.to hold C$1.72 22-may-16 C$2.67 55.2% $2.88 tgt IKN381 v strong
Cordoba Min. CDB.v buy C$0.73 15-sep-16 C$0.81 11.0% new position, $1.50 tgt
Atico Mining ATY.v STR buy C$0.51 24-jul-16 C$0.52 2.0% bot again IKN382, 90c tgt
Rye Patch Gold RPM.v spec buy C$0.355 02-sep-16 C$0.31 -12.7% New IKN382, 75c tgt
Riverside Res RRI.v buy C$0.39 27-jun-16 C$0.42 7.7% Added IKN380, 60c tgt
Continental Gold CNL.to buy C$2.68 22-may-16 C$4.00 49.3% permit 4q16/1q17, $4.80 tgt
Miranda Gold MAD.v Selling C$0.125 03-jul-16 C$0.13 4.0% Small trade didn’t work, sell time
Lara Expl. LRA.v hold C$1.15 08-abr-12 C$1.25 8.7% solid biz model
Focus Ventures FCV.v spec buy C$0.23 01-jul-12 C$0.08 -65.2% refi news good
Short positions
None at present
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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-ago-15 C$0.25 38.9% okay trade, sold on pol risk
McEwen Mining MUX jan16 U$1.09 25-ene-15 U$1.20 10.1% sold due to lack of value
Lake Shore Gold LSG.to feb-16 C$1.10 07-abr-15 C$1.69 53.6% bot out, sold early in process
Atacama Pacific ATM.v feb-16 C$0.19 26-abr-15 C$0.40 110.5% sold for a double on big pop
New Gold NGD feb-16 U$2.06 24-ene-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-ene-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-abr-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-abr-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.
Overview: In yet another week of drudgy action, once again here’s again little to get my juices
running and today’s notes section is limited in scope. I’m looking forward to more real fundies
newsflow in Q4.
Miranda Gold (MAD.v): Selling. As noted above, it’s time to put one down to experience,
admit defeat and close this very small position. One point; I know at least a few of you own this
one with me so due to the thin nature of trading and volume here, it’s only right that I let you
go first if you so desire. I plan to be sold this time next weekend but I won’t sell tomorrow
Monday.
Cordoba Minerals (CDB.v): CDB spent the week in UNCH-land, trading in a tight range (for a
exploration junior at least) with a low of 81c and a high of 85c. That’s pretty healthy and no
worries about its official weekly loss. Robert Friedland was doing one of his numerous star turns
at conferences again last week, this time at Mines & Money Americas (the first time this UK-
based conference organizer had done a Canada gig) and between breaths of promoting his
Ivanhoe and Platreef companies, was quoted by Northern Miner as saying that “he loves
Cordoba Minerals”. Which means he’ll be ready to give this one the big pumpo once he’s got
bored with his fully-owned charges.
Atico Mining (ATY.v): News Friday was that company COO Thomas Kelly was stepping down.
Under other circumstances this may be worrying, but not this time and Kelly has planned this
departure for some time and wants to
lighten his workload for other projects, as
well as taking things a little easier from now
on (6). Not one we should be overly
concerned about.
In trading, ATY has failed so far to get the
bounce afforded to other copper-exposed
names to the run-up in the metal. With
production reporting just around the corner
for plenty of sector names, it’s worth a
reminder that we can expect a bumper
sales quarter from ATY, thanks in part to
the lag of sales in 2q16 that will get caught
up this quarter, plus of course its relatively
10

,
new higher rate of throughput at the mine and its new emphasis on copper production over the
gold by-product (the cycle time shift that coincided with the throughput upgrade). This looks
really cheap and my idea of a strong buy at the present time.
Sandstorm Gold (SSL.to) (SAND): SAND did indeed dip under my worry barrier of U$5 last
week, but managed to recover and it was only the small spate of position covering into the
close of Friday (and the quarter) that stopped it from registering a win on the week.
As Sandstorm announced preliminary sales figures for its 1q16 on March 31st then its 2q16 on
July 7th, it’s a fair bet that the week ahead will see the company giving us preliminary sales
numbers for its 3q16. That will make it one of (or just about the) first to deliver fundies news
for the quarter in the sector and our bunch of longs.
B2Gold (BTO.to) (BTG): The whole B2Gold Masbate hoo-hah gets covered by an extended
note in ‘Market Watching’ below, too long for the notelets section. But before you go below to
read all the handwringing stuff I’m going to make myself feel a little better about things here:
In IKN383 dated September 11th the main event was a NOBS fundies report on New Gold
(NGD) and at the very bottom of it all came these words:
“B2Gold with its U$2.522Bn market cap this weekend is obviously a better
stock to own than New Gold (NGD).”
That weekend NGD was a U$4.70 stock and BTO CAD$3.51. This weekend NGD is U$4.35
(down 7.4%) and BTO is CAD$3.44 (down 2.0%), that despite the almighty shellacking B2 took
from the Philippine mining news last week. In other words, I’m still a firm believer in the value,
both relative and absolute, that B2Gold offers today and I’m not shifting my current C$5.30 12
month price target a single inch. Come mid-2017 we’ll hardly remember the storm in a teacup
that was Masbate October.
Regulus Resources (REG.v): Reasonably good news in that the site visit to AntaKori is now
firming up and although still subject to confirmation from the other corners, looks set for the
end of this month October 24th to 28th. I won’t be the only anal yst on the trip either, other
Canada-based people are expected on board too so we can expect the company and its project
to start getting more coverage as from November.
The Copper Basket
After thirty-nine weeks of 2016, The Copper Basket shows a 86.96% gain to level stakes.
company ticker price 1/1/16 Shares out Market Cap current pps gain/loss%
1 Ivanhoe Mines IVN.to 0.61 778.96 1776.03 2.28 273.8%
2 HudBay Min. HBM.to 5.31 235.23 1220.84 5.19 -2.3%
3 Reservoir Min. RMC.v 4.08 48.69 449.41 9.23 126.2%
4 Capstone Min. CS.to 0.44 382.04 305.63 0.80 81.8%
5 NGEx Resources NGQ.to 0.65 205.06 264.53 1.29 98.5%
6 Western Copper WRN.to 0.38 94.19 103.61 1.10 189.5%
7 Trilogy Metals TMQ.to 0.395 104.33 74.07 0.71 79.7%
8 Cordoba Min. CDB.v 0.16 86.86 70.36 0.81 406.3%
9 Copper Mtn CUM.to 0.445 118.8 57.02 0.48 7.9%
10 Nevada Copper NCU.to 0.66 80.5 51.52 0.64 -3.0%
11 Atico Mining ATY.v 0.28 97.59 50.75 0.52 85.7%
12 Copper Fox CUU.v 0.125 417.64 50.12 0.12 -4.0%
13 Amerigo Res ARG.to 0.205 173.61 27.78 0.16 -22.0%
14 Hot Chili Ltd HCH.ax 0.09 445.723 20.06 0.045 -50.0%
15 Revelo Res. RVL.v 0.055 128.486 9.64 0.075 36.4%
NB: HCH.ax priced in AUD$, rest CAD$ Portfolio avg 86.96%
11

,
The basket average rose by 1.49%, thanks to the continued rally in the price of copper and
buying interest at the producer end of the
sector as players look for that “leverage to
(name metal)” they seem to love so much.
There were nine weekly winners (HBM.to,
IVN.to, CS.to, NGQ.to, CUM.to, NCU.to,
HCH.ax, WRN.to, ARG.to), two unchanged
(RMC.v for obvious reasons, than also CUU.v),
therefore four losers (TMQ.to, ATY.v, CDB.v,
RVL.v). There were two double figure
percentage movers, namely the wins in
Nevada Copper (NCU.to up 14.3%) and
Amerigo Resources (ARG.to up 10.3%).
It’s the end of the third quarter of 2016, let’s see how our 15 components in The Copper Basket
are getting on against each other in the regular quarter-end chart:
The 2016 Copper Basket Components after 39 weeks
450%
400%
350%
300%
250%
200%
150%
100%
50%
0%
-50%
12
v.BDC ot.NVI ot.NRW v.CMR ot.QGN v.YTA ot.SC ot.QMT v.LVR ot.MUC ot.MBH ot.UCN v.UUC ot.GRA xa.HCH
The Copper Basket 2016, weekly evolution
100%
80%
60%
40%
20%
0%
-20%
13 wks
26 wks
39wks
Cordoba (CDB.v) is still consolidated way out in front (and reminds me that my 73c entry point
of the other day looks like a decent bargain), but the big news and move in 3q16 was in
Ivanhoe (IVN.to), which has been the talk of the market all quarter as Friedland pumped the
merry bejeez out of his charge and the
company provided plenty of news catalyst
backing to give sellsiders and instos plenty to
digest and love. But it’s still in DRC, can’t
change that.
Moving on to the copper metal market last
week, the rise in copper is starting to attract
biznews wire stories as it passes through
U$2.20/lb. So instead of joining the bullish
rallying cries I’ve dialed out the price chart t the
Weekly version and drawn in a couple of red
lines to show that even though copper’s done
well this last couple of weeks, we’re still very
much inside the 2016 trading range and things
will stay that way until U$2.30/lb is broken (or
U$2.00/lb to the downside, of course). I’m
going to stick with my mildly optimistic position
about copper and the main positive of “the
bottom is in”, without expecting too much from
the upside.
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 ht82 t4peS ht11 ht81 ht52 n2tco
source: IKN calcs

,
While we’re on the subject of not expecting too many wild moves in copper, a quick reminder of
a quick post on the blog dated August 5th (7) entitled “Excellent news for copper bulls” that
went like this:
Goldman Sachs is bearish on copper:
A storm’s about to hit the global copper market, according to Goldman Sachs
Group Inc., which forecasts that the price may slump to $4,000 a metric ton
over 12 months as mine supply picks up, producers enjoy lower costs and
demand growth softens.
“Company guidance and our estimates suggest that copper is entering the eye
of the supply storm,” analysts including Max Layton and Yubin Fu wrote in an e-
mailed report received on Friday. A drop to $4,000 would be a 17 percent
slump from Thursday’s close on the London Metal Exchange.
Continues here. World's number one fade is bearish? Be bullish.
Since that GS call copper dropped from $2.20 or so to $2.08, but got nowhere near the
U$4,000/t target (around U$1.81/lb) before reversing and it’s now back from whence it came.
Moving on to inventories talk and as another month has drawn to a close, here are the updated
long-term inventory tracker charts that show the rise of LME and the fall of SHFE.
Copper inventories: percentage held per exchange
80
70
60
50
40
30
20
10
0
13
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 luj gua pes
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 luj gua pes
Mt Cu source: Cochilco
LME Shanghai Comex
This month’s main takeaway is the continued resurgence of the LME warehousing system, as it
mops up refined copper supply out of China on what we understand to be favourable terms for
suppliers. The LME is bossing the price discovery market once again and it has put a clear line
under the price for copper, a clear bottom is now in place at “just over $2” that is unlikely to be
broken any longer. All this bodes well for those investing in the better class of copper juniors.
Such as I ☺.
Now for the regular weekly copper warehouse inventory bullets:
• Overall world copper inventory levels in the world’s three official systems dropped lat

,
week, down 9,110 metric tonnes (mt) (-1.7%) and finishing Friday at 543,308mt.
• The reason for the drop was Shanghai, which saw inventories drop sharply to
107,058mt, down a big 18.1% from the already diminishing stocks levels of the last
couple of weeks and now back close to minimums of previous years. This is a
significant move, shows demand for copper in China has maintained strength and
surely contributed to the price move above U$2.20/lb this week
• At the LME, the reverse is true, stocks rose again by 15,350mt (+4.3%) to finish the
week at 372,225mt. There is still stock leaving China and finding homes in LME
warehouses on favourable terms, but the dynamic seems to be separate from the
demand out of the SHFE warehouses.
• Comex stocks rose modestly once again, up by 262mt to finish at 64,025mt. Interesting
to note that Comex now half over half the amount in the bigger and traditionally more
important SHFE system. The stealth growth of stocks here, plus the Comex’s stated
intent to grow its system, may become a more influential factor in 2017.
Here’s the Shanghai-only chart, showing that rapid drop toward the 100k level where stocks
traditionally flatten out (give or take 10k). We’ve seen a remarkable top-to-bottom move in
2016 that’s now approaching 300kmt in the SHFE that’s given lie to the worst of the “supply
tsunami” dire warnings out of Goldman Sachs and other in August this year.
Shanghai Futures Exchange Warehouse Stocks, 2014-2016
400000
350000
300000
250000
200000
150000
100000
50000
14
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 ht11 dn2tcO
Mt Cu
source: Cochilco
Now for notes on a couple of the basket component stocks:
HudBay (HBM) (HBM.to): I highly doubt that HBM will experience any negative effects from
the announcement of civil charges against former employee Nino Coppero plus two other
Peruvian nationals in the SEC announcement dated September 28th (8). The investigation has
gone on for nearly two years and in the end, the SEC has decided to limit the charges to the
three individuals, the central figure having been dismissed from the company at the time, in the
type of “bad apple” situation in which the corporation itself is left unscathed.
Amerigo Resources (ARG.to): It wasn’t a Friday post-close NR but it was’t far away and it
contained negative news all right. ARG announced Friday (9) that the pay deal it had offered its
workers had been rejected and although there were a couple of delaying tactics that would stop
a strike from going ahead immediately, if they can’t reach a solution to the impasse soon this
company will see a strike in October, either as from the 6th or if a final delay can be
implemented the 11th. Not good news for ARG and another reason to avoid this stock, when it
comes to small copper producers Atico (ATY.v) offers far superior investment metrics at current
prices.
In trading ARG.to popped 10.3% but it was only on a couple of tape-painty looking trades on
Friday in otherwise light volume. We can full expect this one to drop back next week (unless

,
copper the metal surges of course).
Capstone and Copper Mountain (CS.to) (CUM.to): Of the two medium-scale producers
picked out as potential leverage plays on rising copper, CS.to continues to do the better and is
now 17.6% up on the trade framed as “68c to 85c” a couple of weeks ago. CUM has started to
twitch a reaction and may play catch-up this week, but I’m also quick to remind readers that
both of these are debt-laden balance sheet semi-disaster areas and the leverage they offer is
definitely a double-edged sword. I’m not partaking in any trade in these two personally, the
running commentary of the past three weeks or so is simply an idea for those braver than I.
The Low Cost Producer Basket
After 39 weeks of 2016, the Producer Basket shows a gain of 112.56% to level stakes.
company ticker price 1/1/16 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Newmont NEM 17.98 530.595 20.85 39.29 118.5%
2 Barrick ABX 7.38 1165.33 20.65 17.72 140.1%
3 Goldcorp GG 11.56 832.381 13.75 16.52 42.9%
4 Franco Nevada FNV 45.75 178.01 12.44 69.87 52.7%
5 Agnico Eagle AEM 26.28 223.475 12.11 54.18 106.2%
6 Ang/Ashanti AU 7.10 405.27 6.45 15.92 124.2%
7 Detour Gold DGC.to 14.41 174.06 4.97 28.54 98.1%
8 Buenaventura BVN 4.28 254.19 3.52 13.84 223.4%
9 Sibanye Gold SBGL 6.09 228.71 3.23 14.13 132.0%
10 New Gold NGD 2.32 512.8 2.23 4.35 87.5%
Prices in U$/NYSE tickers, except DGC.to (CAD$) Portfolio avg 112.56%
Detour Gold (DGC.to) managed to register a small gain on the week after a couple of bad ones,
but that was the only winner in the bunch and the other nine all lost ground, but there were no
massive losers either, the worst being the 4.8% lost by New Gold (NGD) and typical loser was
between 0.5% and 2%....really not that big a deal as 3q16 wrapped up.
By U$0.2Bn, Newmont is back above Barrick and top of the market cap pops. It’s going to be a
fight to the finish between those two in the last quarter, I’d imagine.
Low Cost Basket: Percentage difference between
basket and GDX control, 2016
5%
0%
-5%
-10%
-15%
-20%
-25%
-30%
-35%
-40%
Barrick (ABX): A bit more about the extended suspension of the ABX Veladero mine in
Argentina, as on Friday I and many others were surprised that the judge in charge of the case
refused to give the mine the green light to re-start operations. Another surprise is that the
Argentina State news agency Telam offered up some of the best and most detailed coverage of
the issue so here’s what they explained (10):
15
ht01 ht42 ht7bef ts12 ht6 ht02 dr3rpa ht71 ts1yam ht51 ht92 ht21 ht62 ht01 ht42 ht7gua ts12 ht4peS ht81 dn2tco
The Low Cost Producer Basket: Weekly performance
200% and comparative to GDX control
180%
160%
140%
120%
100%
80%
60%
40%
20%
0%
source: ikn calcs, NYSE/Nasdaq data -20%
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 ht82 t4peS ht11 ht81 ht52 n2tco
basket
gdx control
source: Google, IKN calcs

,
• The provincial government of San Juan ordered earthworks to be done at Veladero, as
well as other safety measures, in order to protect the mine from further events such as
the (apparent) ice block that fell from a nearby glacier and hit the tailings waste pipe,
causing the leakage.
• Barrick complied with the orders and did what was asked of it.
• The judge in charge of the permit renewal, one Pablo Oritja, visited the mine Monday
along with provincial inspectors and stated that he was happy with the work done, but
would wait for a final report from the San Juan “Mining Police” before making a
decision.
• The Mining Police reported on Thursday and said that they wanted to add extra security
measures, including closed circuit cameras that would remotely monitor mine
operations.
• Due to these extra requirements, judge Oritja refused the permit renewal and then
promptly went on (a pre-programmed) 15 day vacation. Most interestingly he left the
case in the hands of a deputy who is also the circuit judge in the nearby town of Jachal,
the town that’s vehemently against the Veladero mine after last year’s major spill and
ABX cover-up. This almost certainly means ABX is going to have to wait at least another
15 days for the green light, assuming they get the necessary cameras and other items
installed by then.
That’s where we are today. As Veladero traditionally accounts for around 8% of ABX
consolidated production (and around 9% of mine operating profits, it’s one of its more efficient
operations) and we’re now looking at a suspension of perhaps a month tops assuming ABX gets
its permits back in two weeks’ time, we’re not talking about a production blip of any great effect
for the share price. It’s perhaps 2.7% of a quarter’s worth of gold and even then the leach
cycle at the mine will probably cover most of that as the issue unwinds. Therefore what we
have here is more a political issue than an operational one, it’s Argentina and San Juan in
particular firing a shot across the bows of ABX. With the Lama side of Pascua Lama in San Juan
and ABX’s new stated objective to get that operation going at least on a small scale, it’s makes
for an interesting backdrop in what is normally the most pro-mining province in Argentina.
Regional politics
Regional Risk Review
It’s come around again, the end of another quarter-end and our regular review of Latin America
regional political risk for junior mining companies. This is the 14th edition of the revised format,
the latest having come in IKN373. 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.
16

,
As usual we concentrate on the nine countries with the best 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.
September 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 7 9 9 7 7 48
Mexico 8 6 8 9 6 5 42
Nicaragua 8 5 7 7 7 6 40
Dom Rep 8 5 7 6 5 8 39
Guyana 7 7 7 6 6 5 38
Argentina 8 5 7 6 7 5 38
Brazil 7 5 6 8 5 6 37
Colombia 7 5 8 6 5 5 36
Potentially relevant LatAm countries for junior mining
Panama 6 5 9 5 8 6 39
Ecuador 7 6 5 4 8 6 36
Guatemala 6 4 4 5 4 6 29
Countries of little or no interest for junior mining exposure
Bolivia 4 6 2 9 5 8 34
Uruguay 4 4 7 3 6 7 31
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
Chile remains unchanged at the top. This quarter of mining in Chile has been marked by two
major themes; what the government plans to do about the lack of capital funding inside the
State-run world’s largest copper producing company Codelco, then what the government plans
to do to capture investment and revenue in the lithium space. Regarding Codelco, its
management have complained for a long time about the lack of investment capital at its
disposition and the Bachelet government is at least sympathetic to the calls, but also say there’s
little cash available at this time. Therefore we’ve again seen private funding ideas for Codelco
come up, most likely via a bonds emission but we’ve also seen a return to an old theme of the
Chilean right wing, the partial privatization of the company. It’s ironic to think that Codelco wa
created under the most right wing of them all, General Pinochet in the 1970s, because these
days its full State control is defended tooth and nail by the political left and undermined by the
right.
In the lithium space, we still don’t have a definitive plan but Chile seems to be tending towards
public/private partnerships on new operations, with a new State-controlled entity being set up
(currently part of Codelco but which may eventually fly free and alone) to go JV with foreign
companies large and small (the latest revealed this weekend (11), the Russian State nuclear
and mining company Rosatom has been in talks with the Chilean government on lithium
ventures). President Bachelet has been clear on her plans to cash in on the future lithium boom
(assuming it happens) and signals are that it will turn into something akin to the way the
17

,
copper sector is split up in the country, though obviously on a smaller scale. Chile feels under
pressure from neighbour Argentina (and to a certain extent Bolivia) in the lithium space and
understands it has to move fast. This is its advantage, because unlike Argentina in Chile the
mining rules are clear and the industry is largely welcomed, as well as being fully understood.
Peru: Community/Social Miner Friendly up 1 point, Internal National Political
Stability up 1 point
This time last update, Pedro Pablo Kuczynski was President-elect. This time we’re now solidly
into the first hundred days of the PPK govt and so far at least, signals are good for the country
and for the mining sector which is why the country sees two points added to its score this
quarter. The main positive in the political arena so far happened last week, when the Fujimori
party controlled Congress passed a resolution to give the PPK executive a “90 day faculty”, a
period of time in which their law reform plans and initiatives would be give fast-track approval
(though not simpe carte blanche) if presented to Congress. This helps PPK, minority in
parliament, push through the main things he wants to achieve in this early and key stage of his
mandate. It also makes Keiko look conciliatory and Stateswoman-like (though she may just be
giving PPK enough rope to hang him with later on).
In the mining sector, the government has been focussing its efforts on the single big bottleneck
to development, that of community relations. PPK has made his position clear on several
occasions, that of the classic support for “Responsible mining”, which always comes with the
appeasing rejoinder “...but not at any cost”. But he and his team have also started on a new
and better tack than the Humala government by proposing that at any new project that needs
community approval, the government (rather than the company) goes in and makes pre-
emptive developments in the zone, such as building schools, new roads, health centres etc
before any agreement is reached, as a sign of goodwill and a demonstration of what a mining
development can further bring to the area. These capital costs would then be re-couped by the
government from the mining company via royalty or specific tax when the eventual mine plan is
approved or in operation. This for me is a smarter way of doing things and let’s hope it helps
clear the way for more green lights across the country.
Mexico: Community/Social Miner Friendly down 1 point, FDI Friendly up 1 point
It’s always difficult to make succinct comments on Mexico and I’m seriously considering
chopping up coverage into “pro-mine Mexico” and “anti-mine Mexico”, large and diverse as it is.
This quarter the country gets a point added to FDI Friendly because of moves afoot by the
Chamber of Mining, backed by a significant portion of Congress, to rescind the currently mining
royalty law and reduce the burden on mining companies. With the Peña Nieto government now
wholly unpopular and losing political capital by the month, there’s a good chance this can get
pushed through.
Meanwhile “community/social miner friendly” loses a point, as there have been many separate
protests against companies and project up and down the country (Baja California Sur, Potosí
Oaxaca and of course Chiapas, but also the continued instability in mining regions where the
narco gangs still hold sway. We’ve seen community protection racket problems in Guerrero and
the theft of an undisclosed (so far) amount of gold form the Agnico Eagle La India mine.
Nicaragua: Geopolitical optics up 1 point
The first ever international mining conference held in Nicaragua went well, got plenty of
attention in the sector and highlighted the improvements in jurisdictional safety Nica offers, the
message being that mining is welcomed by both government and people. That’s certainly true
for the Daniel Ortega government and as he’s all-but locked up the outcome of the upcoming
presidential election (by fair means or foul) that’s going to continue. There are continued anti-
mining rumblings at the populace level, but NGO’s don’t seem to have reached the same
amount of influence as they have in other Central American countries.
Dominican Republic: Mining Culture up 1 point
During Q3 Dom Rep saw its popular and pro-mining President Danilo Medina re-inaugurated
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and his re-booted administration get serious about the long overdue reform of its mining
statute books. Although the better operators in the country (e.g. Pueblo Viejo) won’t be directly
affected, a tightening up of concession and environmental laws will help the industry in the
eyes of the public and with the Catholic Church continuing to take a sceptical and often
negative view of mining in the country, that public relations exercise is important.
In the mining sector we’ve seen results and development news coming through from several
small juniors in the country, such as GoldQuest, Precipitate and Unigold. GoldQuest (GQC.v) is
one I traded badly a couple of years ago and eventually sold for a loss, since then of course it’s
ridden the 2016 upwave well and made me regret my selling. Of all the explorecos in Dom Rep
I’d say it has the best chance of success from here, but it’s not the absolute bees knees of a
deposit either and looks kind of expensive to me now. Though that may be partly sour grapes
on my part.
Guyana: Unchanged
In the Q2 review we noted there was a push by the Guyana govt to raise VAT (sales tax). This
hasn’t crystallized yet but it’s not off the table yet either, so the point it lost in the last episode
doesn’t get added back yet.
In anecdotal news, a few weeks ago I had lunch with mining industry professional A.N. Other,
who had recently been in Guyana doing his mining thing (sorry, no names or companies get
mentioned here). Aside from comments on this-and-that company working there (you may note
that I don’t hold any positions in Guyana-exposed miners at the moment) his major beef about
the country was the amount of institutionalized corruption, with government officials of all
levels particularly bad news. He says that pure cash bribes are the norm rather than the
exception and that functionaries are often brazen and open about the requirement to grease
their palm before any necessary document gets stamped and signed. I was tempted to dock a
point off Guyana’s National Government Miner Friendly score due to this, but in the end have
decided to stay pat for the moment, due to the accusation’s anecdotal nature. But a problem it
is and the type of thing that can become a real risk down the line.
Argentina: National Government Miner Friendly up 1 point, Community/Social Miner
Friendly down 1 point.
At times this quarter it’s seemed like there is only one country with mining activity in South
America, judging at least by the contents of my mail inbox. Everyone wants to know something
or other about Argentina mining these days, it seems.
However the most pressing issue today is the state of the country’s macro economy because
we’re now in a crucial period that will decide whether the reforms President Macri has pushed
and is pushing through will be successful. In effect, what the Macri government is betting on is
that the next couple of quarters are the period of max pain for the country economy. The fiscal
and monetary reforms now in place are classic orthodox economic pills to swallow (and why the
IMF is praising Argentina so effusively): Go through the sharp recession, restrict pay rises and
then see inflation drop later, enjoy the benefits of a V shaped drop next year. As things stand
today the country in in recession (best fit figure -5% GDP) and this is expected to continue to
the end of the year, while inflation has shown signs of dropping in the latest sets of data but is
still running at between 35% and 40% per annum. As wages are no longer keeping up with
prices, the discontent at street level is rising fast and Macri’s approval ratings have dropped
from 60% at the beginning of the year to between 35% and 45% today (depending on which
pollster you prefer).
However 2017 does look brighter for the country and the situation was summed up neatly last
week in by one of Argentina’s most famous economists (who seems to have been around
forever, he was chief economic advisor in the Carlos Men_m years*), Miguel Kiguel in an
economics conference. Here’s a quote (14) (translated):
“There’s not much doubt that next year Argentina will grow (i.e. year-over-year GDP
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expansion), even (Ex-Minister of the economy in the Cristina government Axel) Kicillof
agrees. And there’s not much doubt that inflation will drop either. What we see this
year in an inflation rate of 40% has a lot to do with the one-time readjustments (e.g. the
very large utiliity bill increases, known as “tarifazos”, as government subsidies were
withdrawn). Later we’ll see whether the Central Bank has enough power to drop
inflation to 17% in 2017 or maybe it will be a little higher, but nobody’s expecting an
inflation rate in 2017 that starts with a 3, the most pessimistic are talking about 23% or
24%, the most optimistic around 17%.”
So there you have the scenario for the next year; pain today, GDP recovery at perhaps 5% next
year, with an inflation rate that drops from its current 40% to something around 20% in 2017.
The point here is that 2017 will be better, but will it be enough and for two reasons:
1) Inflation at 20% is better, but it’s still going to hurt the back pockets of José Publico if
their salary increases are restricted to below that level and add to the hurt they’re
currently feeling. A year is a long time and the dissent is likely to get louder before it
calms.
2) A key point: In October 2017 Argentina has mid-term legislative elections in which 127
of the 257 lower house parliament seats (just under half) and 24 of the 72 upper house
senate seats (one third) are up for grabs. This vote will be critically important, as not
only might it change the balance of legislative power in Congress but it’s already being
framed as the make-or-break moment for the Macri reform package.
Therefore, not only is there a reform period to get through without too much social protest, but
there’s a time limit on progress too because if the recovery lags in the country and the rank and
file are suffering too deeply come election day, Macri (and I keep reminding people that he only
scraped in 52%/48% last year) is going to get a big thumbs down and then everything is up for
grabs. And signs today are not good. Not only do we have his dropping approval ratings but as
noted last week the largest and most powerful union in the country is now on the brink of
calling a one day general strike to protest the measures in place. They want bigger wage
increases etc etc, just the type of thing that would feed inflation (15) at the wrong time for the
economic turnaround model Macri and his team are trying to implement. The strike still doesn’t
have a fixed date and there are formal negotiations that are expected to go on for the next ten
days, but a strike if it happens would be a clear negative and may set off further rounds of
social protest.
Meanwhile in the mining scene, the government is still trying its hardest to push the Federal “all
work together” model in the provinces and try to take executive decision power away from
individual governors. That’s going to be a tough sell in places like Chubut and I’ve covered that
example (particularly Navidad) closely, as it’s a good test case for the rest of the country. Then
on top of all that, Barrick goes and adds insult to injury with another spillage incident at
Veladero (see above), which wouldn’t have been any sort of problem if the company hadn’t
been stupid enough to try and cover it all up.
Overall, Argentina gets one plus point for the macro and one negative point for the mining
scene this quarter, but it’s still a story that’s being way overhyped in the North and the large-
scale risks involved in jumping in too early are being ignored by most commentators (and the
board of directors of Fortuna Silver).
*it’s bad luck to spell his name out completely
Brazil: Internal National Political Stability up 1 point
Brazil is still in a mess and the newly ratified President Michel Temer is a polemic character,
hated with a vengeance by the Lula/Dilma supporters as a traitor and a liar, but he has brought
a deal of economic sanity to a country that was showing signs of spiralling out of control and
the austerity measures introduced have stopped the rot before it became too deep (i.e. what
Argentina should have done four or five years ago). He will continue to be unpopular, he’s
unlikely to care and the chasing after the PT high echelon on corruption charges (thought now-
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deposed Dilma herself is normally considered a clean politico, Lula da Silva is now facing some
very difficult and serious questions) is enough to justify his position.
In mining, last time we spoke we noted that the turnaround and appreciation in the Brazilian
Real was beginning to cut into the cost advantage that Brazil had built up in 2016. The Real
(BRL) had been R$3.65 to the US Dollar but by end 2q16 and IKN373 it was back up to R$3.20
three months ago. However there hasn’t been any follow-through on that move and that’s good
for miners operating there, this weekend we’re at R$3.26 to the dollar, the appreciation has
steadied out.
The main problem in operating in Brazil hasn’t changed it’s still a legal, bureaucratic and
permitting quagmire that’s arguably the worst on the whole continent. That’s not going to
change, but if you’re exposed to a company that knows its way around that part of the
equation, Brazil remains a reasonably attractive place to go mining.
Colombia: Geopolitical optics down 1 point, Internal National Political Stability
down 1 point, FDI friendly down 1 point
I had a pre-written segment on Colombia written up for today, the day of the national
referendum that was expected by all and sundry to ratify the the peace deal with the FARC-EP
and make it official. According to polls vote was expected to pass with around 55% to 60%
approval, but but here I am with a “Brexit Part Deux” feeling and writing a completely new
segment for Colombia and downgrading its score, because in a shock result and on low turnout
due to apathy and bad weather that seems to have favoured the more motivated “NO”
campaign, the results of the referendum is NO 50.24% and YES 49.76%. More on the result
details over at the blog tonight (12) (13).
This means the peace deal has been rejected and as, in President Santos’s own words “There is
no plan B”, it means that technically at least the country is now back at war. The cease fire
agreement between government and FARC still stands, but this does mean that Santos will
have to go back to the negotiation table and get more concessions else the whole edifice will
fall and the FARC itself has made its position clear; this is as far as they go, no more
concessions. There’s also the added complication of the other terrorist group, the ELN, which
had started its own peace talks on the back of this main agreement and those initial talks have
been thrown into deep jeopardy. So to cut a long story short this is of course a big step
backwards and there are now a mountain of complications and issues to resolve in a process
that would have been complicated anyway, even if the Yes vote had won after an internal war
that lasted for many decades. Rarely has the phrase “thrown into turmoil” been more apt.
Meanwhile in specific mining news there’s more negativity on the horizon. Due to today’s
national vote the local referendum in Ibagué against open pit mining, specifically the AngloGold
Ashanti ‘La Colosa’ project has been delayed to the end of this month vbut the vote will happen
and when it does, it’s very likely to deliver a negative message to that project and to the world
of mining in general as regards Colombia. I wrapped up the last edition of Colombia’s report
card in IKN373 with, “Tread carefully in Colombia, know the local rules, but it’s starting to open
up again”. That still applies and I’ve gone as far as to add a position in Cordoba Minerals
(CDB.v) to my portfolio as my confidence about its political risk profile has increased, but
Colombia is still trappy as hell for mining investment and there are many places and specific
companies in which I would invest a penny of my worst enemy’s cash. For the time being I’m
good about my positions in CDB.v and ATY.v, they’re not operations that will feel any effect of
the shock referendum vote except for the possible degradation of perceived country risk.
Potentially relevant countries
Ecuador: National Government Miner Friendly up 1 point, Community/Social Miner
Friendly up 1 point
It’s normally around this time, with six months or so before a critical Presidential election, that
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I’d dock a point off the “internal national political stability” score as a country goes into the
throes of what could becomes a bitterly fought political campaign. But not this time, because as
of this weekend we got positive and stabilizing news from Ecuador when the ruling Alianza Pais
(AP) party chose Lenin Moreno (ex-country veep to 2013) to be its candidate for President in
February, on a ticket with the current veep Jorge Glas again up for the Vice-President’s job. All
this was passed with the full backing and approval of current President Rafael Correa, who has
decided not to try and bend the rules and run again, after semi-threatening to do so a while
back. This is a good thing for Ecuador and removes the accusations of quasi-dictatorship from
the shoulders of Correa and his party. They stand favourites to win re-election at this point, but
we’ll see what the right wing and indigenous groups can do about that in the months ahead.
In mining news, Ecuador has made clear progress in the sector and although I hate to say it, I
may just be warming to the idea of having a little more speculative exposure here. Not only has
the Lundin Gold (LUG.to) Fruta del Norte project advanced towards its near-inevitable official
construction decision green light, but we’ve also seen the Chinese capital Rio Blanco gold
project get green-lighted and the start of the build-out of its approx 50k/annum operation, with
production expected for 2018. Another advance has been the way in which the government has
been promoting mining at a grassroots level, with workshops entitled “Myths and Truths about
Mining” that have given locals a different view than the normal anti-mining NGO workshops
they normally get. For this, Ecuador gets two points this quarter and is becoming interesting.
There is a potential problem on the horizon though, it’s that Presidential election. With the AP
party now firmly pro-mining, they risk a battering from the CONAIE indigenous umbrella group
a coalition of many different indigenous community organizations that are mostly anti-mining.
This won’t go unnoticed by the rather cynical right wing in Ecuador, who may decide to join
forces with the indigenous groups and reel in the government on the issue of mining and other
general development projects. If we see a reasonable election campaign and then Moreno
elected President it will be a positive step forwards for mining in Ecuador, but there’s a long
way to go before election day yet and this is South America, anything can happen. I won’t truly
warm to the idea of Ecuador as the next great frontier until then, we’ll see how things stand
come end 4q16 and the next review.
Guatemala: National Government Miner Friendly down 1 point, Geopolitical optics
up 1 point, Internal National Political Stability up 1 point
One point lost and two points gained this quarter, a net positive result that reflects well on the
macro in Guatemala but has a growing interrogative over the mining industry. New President
(the previous totally inexperienced) Jimmy Morales has been reasonable and pragmatic in his
opening period of government, keeping the political power players in check and gaining bonus
points from foreign observers by not interfering (in fact actively supporting) the ongoing
corruption investigation run by the CICIG board, which has brought more high-level arrests and
charges against members of the Otto Pérez Molina government and people in positions of
previous power (a recent big one being the arrest of the man in charge of the Guatemala ports
who turns out to be a key figure in the “La Linea” chain of corruption payments on imports).
As for mining, the whiff of old corruption still hangs over certain corners of the sector, such as
the way in which Tahoe Resources got its operating permits without the need for the
apparently necessary prior consultancy and permission from locals in the Pérez Molina era. The
way in which the KCA-owned El Tambor (La Puya) mine was closed down by the judiciary and
the way in which the people behind that legal victory have pressed their case against TAHO
means there’s still a latent threat here, with initial judgments expected to be handed down late
this year (though there’s a whole appeals process to go though as well, it could be spun out for
years). Overall Guatemala has made strides as a country under Jimmy Morales, but it’s still
definitely not a place to be confident about placing mining investment cash.
Other countries
Bolivia: Geopolitical optics down 1 point, Internal National Political Stability down 1
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point
I didn’t mention the whole scandal much on either blog or here at the weekly, largely because
Bolivia isn’t a place that we as mining investors should worry about. But still we need to make
mention of the violent strike action of mining cooperative workers that finished with clashes
between the strikers and forces of order that claimed six lives, but more dramatically the way
that during the violence the vice-interior minister was first taken hostage by the protesters,
then first tortured and finally beaten to death. Since that event over 50 people have been
arrested in connection with the death of the minister and fortunately tempers have also calmed,
but it gives an idea of what it’s like as grassroots level in the Bolivian mining scene. It also gives
me a clear opportunity to cut the score of a country that will always score more points than it
deserves in this kind of table, because it’s a country with deep knowledge about the mining
industry but at the same time untouchable as a FDI opportunity for us on the outside. Two
points docked, it will stay that way. Avoid.
Uruguay: National Government Miner Friendly down 1 point, Community/Social
Miner Friendly down 1 point
No news is not good news. The total lack of development or forward movement in the
Uruguayan mining industry, which includes a near-total lack of newsflow from the country on
the sector, means it’s high time to downgrade the country score. A few years ago Uruguay was
a promising riser and had even attracted the likes of B2Gold to its shores. Those days are gone,
another one to forget about until further notice.
Venezuela: Unchanged
Oh please, don’t fall for any of this Rusoro or Gold Reserve or Crystallex bullshit. This place is
as big an “avoid” as can be imagined in the world of business.
Market Watching
Another Minera IRL update
Because of the simple fact that Minera IRL is still suspended from trading there’s been no real
need to get in front of the company’s own communication efforts. But now that the company, in
the shape of Chair Frank O’Kelly and Minera IRL SA president Diego Benavides last week made
a formal presentation to the London UK analysts and institutional backers and gave details out
to a wider audience we can confirm a few things on these pages.
The re-listing process is going well and the plan is for Minera IRL to list first on the Canadian
CSE market and the Lima BVL market. Once those listings are up and running it will be much
easier for IRL to move back to the TSXV market in Canada. The company does not expect to be
listed on the CSE for very long and considers the move a stepping stone.
There is a lot of big money financial interest in funding the Ollachea project and IRL has been
entertaining various offers and permutations. One of the most likely courses of action will be to
give a portion of equity to the eventual mine construction company as part of the capex deal to
be struck. I’m not sure that the company in question has been named yet so I’ll defer on that,
but for an example of how the capex structure may work check out the Red Eagle San Ramon
mine, about to go into production.
Main backer, the quasi-State Cofide, is on board and happy with progress being made on the
drilling program at Ollachea. That’s now roughly 50% complete and going well and last week in
a key meeting in the town of Ollachea the local community ratified its support for the project in
concrete terms. Representatives of IRL also met with provincial-level political leaders to bring
them up to date and got strong support for the project so far. The current drill program is a
stipulation of the deal with Cofide and once it’s complete and results known, the company will
be able to open the gates to the main financing deal and raise its capex. And on that subject, I
understand that the plan is now to build the mine to run at 100,000 oz per annum production
rate from the get-go, rather than the alternative plan to build a stage one that runs at around
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50,000 oz/year and then scale up using cash flow. One of the reasons is that capex is now
being slated at around U$150m all-in, another may be (and I’m not sure on this and can’t get
anyone to tell me in Ollachea or in Lima, but there have been hints in the air) that the current
Minapampa driling program is hitting better grades than those already in the 43-101 resource
and has brought new optimism about the whole project.
Meanwhile on the subject of cash, I am told that IRL has more than enough liquidity at present
to see through until the major financing package is closed. It has good cashflow from
Corihuarmi, plus plenty of liquidity from what’s left of the initial bridge loan (you may recall
from 2015 that one of the things Team Hodges tried to do was burn through all that cash and
leave IRL’s coffers empty, thereby facilitating its eventual plan of asset sales to friendly third
parties).
On the subject of Corihuarmi, although it will have a limited life from here the company has
approved a short drilling program that’s expected to move the mine life out until 2019. The
grade they (fully) expect to encounter will be lower than the historical average at the mine but
thanks to lower overall costs and the higher gold price it will still be profitable. Once again, it’s
worth noting that Team Hodges wanted to close that mine in late 2015 and slapped a U$10m
closure cost on the plan (which is now around $6m, one has to wonder why Team Hodges were
going to overcharge the company by around $4m).
I’m aware of how annoying it is to have the shares still under suspension and then read on
these pages from time to time that it’s “not long now”. But it really isn’t long now, this month
should see official on-record news releases coming that confirm at least the first portion of
today’s note on the company.
B2Gold (BTG) (BTO.to) at Masbate
Here’s the ten day price chart of B2Gold (BTO.to):
A rotten week for my Top Pick, biggest position and back pocket. I don’t have any extra special
super-secret information to offer you today on the events, even after spending plenty of time
looking into things and exchanging with people “close to the story” (as they say, off-record they
must stay), but what you get in this segment today is a overview of events then my opinion
and recommendation, as anal yst and shareholder.
First up. I hadn’t made any call on the issue previously, even though I was aware that the
Philippines was under new governmental management and even though I knew the new
Minister of Mining was taking a very hardline, even anti-mining stance against the industry and
even though she’d already closed down a number of mining operations (mostly nickel) and was
running the audit whose results were announced last week. After looking into the subject at the
behest of a couple of subscribers after mail exchanges, my decision was that BTO wouldn’t
have a problem and wouldn’t face suspension from the audit results.
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At first sight that now looks like a wrong decision and I readily admit that today, I was wrong to
underestimate what would happen when the audit results were announced, QED. However (and
we anal ysts are so irritating with our “yes, but...” neverwrong attitudes) I was deeply surprised
that BTO was caught in the final list of licence suspension/cancellation candidates and my call
wouldn’t have been any different if I’d made previous comments. After checking out how BTO
works at Masbate and noting its superior level of operational and environmental controls (BTO
in its own NR last week pointed to the fact its operations are ISO 14001 compliant, not a
common thing in mining anywhere in the world and particularly impressive for a place like The
Philippines) I saw no reason to imagine BTO getting caught in the same dragnet as some of the
very sketchy nickel operations that seemed to be the main bone of contention for the new
government’s mining ministry.
However, I do admit to a full and unmitigated mistake in dropping the ball on the geopolitical
angle. What we seem to have here is a new administration under a hardline and controversial
new President that’s keen on laying down the law in the country. That ol’ 20/20 hindsight can
be a dangerous and expensive thing, but considering the issue in the new light of a country
political stance there’s more sense in including Masbate in the list of suspension candidates.
And it’s for this reason that I firmly believe today that Masbate is not under threat of
suspension or closure and its current share price drop has offered up a one-time bargain
opportunity in the shares.
We covered the problem fairly extensively on the blog last week (16) (17) (18) (19) (20) (21)
and the bottom line news is that BTO’s Filipino subsidiary and holding company of its Masbate
mine, Filminera, was included on the list of 20 mining companies (that own 23 different mines)
under threat of suspension and eventual closure by the Mining Ministry of the country after an
extensive government review and audit. When B2Gold got round to issuing a statement on
Masbate later on the day of the big drop (22) it pointed to how the issues are an administrative
rather than operational problem. Here’s an excerpt:
Based on the reference to the three findings indicated in the brief received today and
based on our subsequent meeting with the Secretary of DENR, B2Gold is confident
that these issues will be resolved by working with the government agencies, in the time
frame provided. None of the findings involve any environmental or social issues. They
are related to administrative issues only.
What happens now is that BTO waits two weeks for formal notification, it then has one week to
address the issues and provide solutions, then the government has one week to decide whether
things are now okay. That means in effect that we’ll get judgement on Masbate from the
Philippines government at the end of this month, and that in turn means we longs of BTO have
a nervy month ahead of us.
Under normal circumstances this potential suspension doesn’t look to be a particular problem
and BTO stated as much in its NR; the matters are administrative (it apparently doesn’t have a
3 year work plan in place, as if it needs one) and not a massive problem to overcome in real
terms. The potential fly in the ointment is what I called the “loose cannon factor”, namely the
militant nature of the new mining minister who has already closed down 18 mine operations in
the country for (what she says are) serious pollution problems and bad employment track
records, plus the new and extremely hardline President Duterte who has made international
headlines recently by calling President Obama (the local slang equivalent of) a son of a whore,
has been directly implicated in death squad operations in The Philippines and just last week
likened himself to Hitler (referring to the way he’d want to kill the approximate three million
drug addicts in his country). Quite a guy, it seems.
Therefore the burning question: Is this guy one of the “screw loose” type of Presidents who
makes mad and unpredictable decisions? Is he interested in making an example of foreign
mining companies such as BTO and prepared to cut off his nose to spite his face and lose a
significant source of jobs and country revenue in order to make a political point, no matter how
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clean or dirty or underhand or upstanding the mining company may be?
The answer, it seems to me, is a clear “No” and after dropping the ball on the new President
Duterte and his administration, I’ve been furiously playing DD catch-up this week to try and get
a handle on what makes this man tick. After reading plenty on the man I now know at least the
basics:
• He was the mayor of the Southern city of Davao for almost two decades, so he’s no
political newbie.
• Yes, he’s extremely hardline and makes very little effort to distance himself from death
squad activities.
• But he used this (clearly illegal) strategy plus a lot of other strong-arm tactics to great
effect in Davao and successfully cleaned up the city, turning it from a drugs-ravaged
town into one of the biggest success stories in the county (if not the biggest).
• He has now been voted in as President on a mandate to repeat the formula he used
there over the whole country and as things stand today, he is enormously popular. A
recent opinion poll I saw gave him 91% approval ratings for his first 100 days in office.
• For an excellent potted history of the man, I strongly recommend this Washington Post
report dated September 28th (23) that captures most of the other points I’ve gleaned in
one easily accessible piece.
After reading up on Duterte it’s clear this is no crazy guy, this is a man who cares deeply about
his country but he’s also also hard as nails and is very willing to play dirty in the real world and
in the political arena to get his way and push through his plans. His mandate comes from the
masses and his job is pretty simple, to make a success of The Philippines in the same way he
made a success of Davao and brought prosperity and security to the country. That last
comment seems to me to be key; this government has shown no fears about closing down
highly polluting mines with bad employment practices, but I think it extremely unlikely that he’s
going to close down Masbate and bring poverty and unemployment to the locality just because
of a few admin infringements. I’d go a little further and say that by drawing up a list that
includes real bad boys and then also a company like BTO Masbate, Duterte and his mining
minister get the opportunity to give a thumbs-up to the good guys while closing down the bad
guys, it will show criteria in the eyes of his population and the wider world.
That’s my call on the last few days and what’s about to unfold in the month of October. I can’t
be 100% sure about it and I must leave room for error, I may after al be reading him badly.
But along with most Canadian brokerage analysts last week I too think that it’s very unlikely,
less than a 5% chance, that Masbate gets its licence to operate taken away from it. Therefore
on a risk/reward equation the choice is a simple one for me today, I hold my large position in
BTO and I’m confident that the
losses incurred last week will be fully
recouped in four weeks’ time.
A final note: I cannot speak for my
own back pocket because I’m
already heavily overweight BTO and
straight portfolio management
dictates that I shouldn’t buy any
more. However, I do consider this
current price to be an excellent
buying opportunity for BTO at a
decent discount to market. In the
event of an utter surprise and the
catastrophic loss of Masbate from
the corporation, the IKN model has
another 50c maximum to come out of the current share price (once the seismics had
quietened) and that’s not so very much from here, so even the downside is limited in the
26

,
absolute worst case. But as I strongly doubt that will happen, even that risk in minimal while
the upside potential just by getting its licence reaffirmed would be equal and opposite. And as a
final word on price, it’s worth noting that B2Gold has always been one of the more volatile mid-
tier producers and goes through sudden periods of being in and out of fashion with the market.
In fact less just one month ago B2 traded at a lower price than this weekend’s close and that
when nobody was worried about the future of Masbate.
The bottom line: Risk for BTO has been over-estimated and the chances of the Duterte
government revoking the Masbate operating licence on not much more than an administrative
technicality are minimal. October will jangle the nerves of longs but the call here is to hold
tight, or even add if you have room for more exposure here and are sufficiently risk-tolerant.
Silver Bull (SVB.to) (SVBL) A potential silver/zinc speculative drill play
On the subject of wanting to expand my zinc exposure a little, here’s one trade that I’m
thinking about in the sector which also covers that most fickle of metals (and one I tend to be
very leery about), silver. It’s also a stock that I once covered and held way back years ago, so
its fundies are known to me.
Silver Bull Resources (SVBL) (SVB.to) is a horrid name of for junior mining company (put the
word “bull” in your corporate title and you’re asking for trouble) but at least it trades on both
the TSX and NYSE via two liquid tickers that do reasonable volume. Its main focus is the Sierra
Mojada deposit, in a quiet backwater corner of Northern Mexico where there’s a small
population and no narco activity (a bonus). Sierra Mojada has been a known deposit for a long
time (long before SVBL came on the scene) and has metallurgical issues, but it also has a 43-
101 compliant resource of 58.7 million tonnes containing 4.67Bn lbs zinc and 90.8m oz silver,
as well as a few minor credit metals. Overall grade isn’t strong, but roughly half of that overall
resource is contained in a couple of higher grading zones that offer better economics and if you
want to know more, check out the company webpage on the subject (24) and read to your
heart’s content (there’s a link to the 43-101 there too).
As for corporate structure, SVBL currently has 177.895m shares outstanding and the PPS closed
Friday at U$0.1455, giving the company a market cap of U$25.88m. After a recent warrants
exercise and considering the normal burn rate of the company, SVBL has an IKN estimated
treasury of U$1.5m and estimated working capital of U$1m. That’s enough to cover a small
drilling program and that’s just what the company is putting together according to its latest NR
(25) of last week. Here’s an excerpt:
“...Silver Bull has applied for a drill permit to test these areas with an initial 3,000 meter
drill program. The program will consist of six to nine holes up to 900 meters deep.
Major Drilling has been contracted for this work and are expected onsite in early
November, as soon as possible after the drill permits are issued.”
And this is where the trade idea comes in. Considering the following...
• Enough budget to run a modest drill program
• A deposit that’s already well-understood (which means they’ll have a very good idea as
to where to stick those upcoming holes to get flashy results)
• The need to raise cash at some point, probably early 2017
• A management team that’s highly experienced in the ways of Canadian capital markets
• Two target metals in zinc and silver that are on many people’s lips right now
...I think SVBL may be setting itself up as a near-term flip trade play. I’m not dying to get in
immediately and at the first opportunity, but once its drill program is permitted and underway
there could be a nice window here, perhaps later on in 4q16. As you can see I’m making no
instant decision on this and there’s no formal recommendation, it’s simply an idea that gets
passed along in the normal IKN Weekly way for your further consideration, we’re all big boys
27

,
and girls here. I’ll leave you with the 12 month price chart as a visual, it’s a shape we’ve seen
repeated in many other junior explorecos.
Conclusion
IKN386 is done, we end with bullet points:
• The Regional Risk Review this week was largely positive, aside from the shock that is
the Colombia vote result this evening. It’s impossible to make a blanket assumption,
but the LatAm region is slowly coming to accept the mining industry a little more and
that’s probably more about telling people about the real risks and rewards, educational
efforts that pay off in the long term.
• The third quarter wasn’t an easy one, here’s hoping for more interest in our sector in
Q4. I’m betting on it, in fact.
• I own too many B2Gold personally and will simply hold what I have, but I’ll hold them
with strong confidence in October and this incident around the Masbate permits looks
like a buying opportunity to me.
• Buy. Hold. Win. Stay the course because even though it’s hard to time every peak and
trough this bullish period for mining is still in its infancy
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
28

,
Footnotes, appendices, references, disclaimer
(1) http://fingfx.thomsonreuters.com/2012/03/22/160957eae5.htm
(2) https://www.streetwisereports.com/pub/na/rick-rule-capitalize-on-gold-stock-volatility
(3) http://www.kungfufinance.com/rick-rule-how-to-interview-mining-companies/
(4)http://www.outsiderclub.com/rick-rule-position-yourself-for-gold-now/2011
(5) http://www.mining.com/web/sprott-urging-clients-to-hold-physical-precious-metals/
(6) http://www.aticomining.com/s/NewsReleases.asp?ReportID=766335&_Type=News-Releases&_Title=Thomas-Kelly-
to-Step-Down-As-Chief-Operating-Officer-of-Atico
(7) http://incakolanews.blogspot.pe/2016/08/excellent-news-for-copper-bulls.html
(8) http://incakolanews.blogspot.pe/2016/09/the-hudbay-hbm-augusta-resource-insider.html
(9) http://finance.yahoo.com/news/amerigo-provides-labour-mvc-173913063.html
(10) http://www.telam.com.ar/notas/201609/165114-la-justicia-extendio-la-suspension-del-trabajo-productivo-en-la-
mina-veladero.html
(11) https://www.leylobby.gob.cl/instituciones/AS001/audiencias/2016/381/106825
(12) http://incakolanews.blogspot.pe/2016/10/colombia-possible-referendum-shock-in.html
(13) http://incakolanews.blogspot.pe/2016/10/colombia-votes-no-to-peace-agreement.html
(14) http://www.cronista.com/economiapolitica/Kiguel-Argentina-va-a-crecer-la-inflacion-va-a-bajar-y-el-tipo-de-cambio-
seguira-alto-20160930-0095.html
(15) http://www.elciudadanoweb.com/moyano-la-reunion-con-el-gobierno-no-sirvio-y-la-cgt-debe-convocar-a-un-paro/
(16) http://incakolanews.blogspot.pe/2016/09/the-list-of-20-philippine-mining-firms.html
(17) http://incakolanews.blogspot.pe/2016/09/im-getting-lot-of-mails-about-b2gold.html
(18) http://incakolanews.blogspot.pe/2016/09/a-philippino-pair-trade.html
(19) http://incakolanews.blogspot.pe/2016/09/ogc-and-bto-analyst-opinion-wrap-up.html
(20) http://incakolanews.blogspot.pe/2016/09/updating-philippino-pair-trade.html
(22) http://finance.yahoo.com/news/notice-philippines-denr-department-environment-164339385.html
(23) https://www.washingtonpost.com/world/asia_pacific/before-duterte-was-the-philippines-president-he-was-the-death-
squad-mayor/2016/09/28/f1d1ccc4-800b-11e6-ad0e-ab0d12c779b1_story.html
(24) http://www.silverbullresources.com/s/sierra_mojada.asp?ReportID=525590
(25) https://finance.yahoo.com/news/silver-bull-provides-exploration-113000008.html
29

,
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
30

,
Colossus Min. CSI.to aug'13 C$0.72 24-jul-13 C$0.79 9.7% closed thru nerves on future
Pretium Res PVG.to aug'13 C$8.20 11-jun-13 C$10.14 23.7% closed to raise cash
Bear Creek BCM.v sep'13 C$2.06 30-may-13 C$2.20 6.8% sold on pol risk decision
MAG Silver MVG oct'13 U$7.00 12-sep-13 U$5.62 19.6% near-term short
Gold Res Corp GORO oct'13 U$9.52 03-may-13 U$4.98 47.7% short tgt made, covered
AQM Copper AQM.v oct'13 C$0.31 16-oct-11 C$0.125 -59.7% closed failed trade
First Majestic AG nov'13 U$11.51 07-nov-13 U$10.50 8.8% v near term short, closed
Fortuna Silver FSM nov'13 U$4.00 07-nov-13 U$3.68 8.0% v near term short, closed
Primero PPP nov'13 U$5.70 07-nov-13 U$5.75 -0.9% v near term short, closed
Starcore Intl SAM.to nov'13 C$0.235 08-sep-13 C$0.17 -27.7% ST trade didn't work, sm loss
B2Gold BTO.to dec'13 C$2.22 28-nov-12 C$2.16 -2.7% closed ST trade to raise cash
Stocks To Follow Closed Positions, 2012
Closed in 2012 closed close PPS
Soltoro SOL.v jan'12 C$0.87 07-nov-11 C$0.94 8.0% cash moved to BCM.v
Gold-Ore Res GOZ.to feb'12 C$0.84 13-oct-10 C$0.98 16.7% trade closed on ELG.v offer
Minefinders MFN feb'12 U$11.68 17-nov-11 U$14.80 26.7% target made, trade closed
Iron Creek IRN.v mar'12 C$0.58 26-sep-10 C$0.31 -46.6% time up on small bad trade
U.S. Silver USA.to apr'12 C$2.18 15-mar-12 C$1.86 -14.7% ST trade no good, cut loss
Augusta Res. AZC.to may'12 C$3.10 29-jan-12 C$2.07 -33.2% bad mkt, bad trade cut loss
Bellhaven BHV.v may'12 C$0.50 22-sep-10 C$0.28 -44.0% new mgmt not impressive
Zincore Metals ZNC.to may'12 C$0.325 29-jul-11 C$0.17 -47.7% bad mkt, bad trade cut loss
Soltoro SOL.v may'12 C$0.70 18-mar-11 C$0.41 -41.4% bad mkt, bad trade cut loss
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% fail ST trade close pre split
Estrella Gold EST.v aug'12 C$0.91 27-mar-11 C$0.14 -84.6% Closed on port realignment
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
31

,
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.
32