IKN #387Premium

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The IKN Weekly
Week 387, October 9th 2016
Contents
This Week: Trading heads-up, In today’s issue, Mailbag, A painful week
Fundamental Analysis: Excellon Resources (EXN.to) NOBS report.
Stocks to Follow: Overview, Miranda Resources (MAD.v), Starcore Intl (SAM.to), Riverside
Resources (RRI.v), Tinka Resources (TK.v), Cordoba Minerals (CDB.v), Atico Mining (ATY.v),
Continental Gold (CNL.to), B2Gold (BTG) (BTO.to), Sandstorm Gold (SSL.to) (SAND), Wesdome
Gold (WDO.to), Rye Patch Gold (RPM.v).
Copper Basket: Overview, Copper Mountain (CUM.to).
Low Cost Producer Basket: Overview, Goldcorp (GG).
Regional Politics: Mexico: The move to rescind the extra royalty on mining gains ground,
Ecuador: Marketing to come, And Peru may copy Ecuador, Philippines: 100 days of Duterte.
Market Watching: Fresh eyes on Coro Mining (COP.to), Tinka Resources (TK.v) and a good
news release, Sandstorm (SSL.to) (SAND) 3q16 sales results, Episode six of “What I’d buy
now”.
I remind subscribers that no part of this newsletter can be copied, reproduced or
given to any third party without the express permission of the author.
This Week
Trading heads-up
The standard heads-up sentence, please note that I am a buyer of Excellon Resources (EXN.to)
in the week ahead. All the details in the main Fundamental Analysis section, below.
And don’t forget that Canadian markets are closed for business tomorrow Monday.
In today’s issue
• Given the dip in silver prices I’m finally going to bite the bullet and add a silver miner to
the portfolio (resistance is futile!) in the shape of the best value producer I can see out
there, Excellon Resources (EXN.to). Today’s main event.
• The market action last week was horrid but I firmly believe it to be a pothole in the
road, not a serious traffic accident stopping the bull run. In other words last week’s
sell-off has given us a strong buying opportunity, even though that kind of phrasing is
exactly the thing that a market shill will often tell you.
• Tinka Resources (TK.v) and Sandstorm (SAND) both gave us positive news last week,
but only TK.v got rewarded. See ‘Market Watching’ for the numbercrunches, but also
see the ‘Stocks to Follow’ note on TK because that elusive financing is nearly with us.
• “Buy. Hold. Win.” is a snappy and easily repeated line when the whole complex goes
up, it gets a little tougher to follow my Siren’s Song after a week like the one we’ve just
had. The BS-pumpmerchant will use verbs like “believe” and “hope”, concepts such as
1

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“faith” and “trust”. I prefer pointing to hard numbers that show the apparently bearish
action in gold last week is suspect and hasn’t changed its bullish aspect in the slightest.
Mailbag
Reader Patrick mailed in late in the week and once he’d got my attention with a first paragraph
laden with nice things to say about IKN (yes I’m vain, yes it works, pathetic no?) gets to the
point of the missive:
“I am curious if there is a gold price (sub 1200 perhaps?) that might cause you
to change your current stance/view on mining shares?”
A good question. And yes, I think that U$1,200/oz is close to the mark today. I could handle a
spike under that level in the near-term, but if gold went under that level and showed little sign
of bouncing back I’d be obliged into portfolio management moves that go against my longer-
term bullish stance. In short, I’d lighten. But that’s just me. I don’t expect gold to go under
U$1,200/oz either and I have my money where my mouth is on that call, too.
A painful week
In order to avoid confusion, let me state that I didn’t expect last week’s sell-off and read the
market badly. Period. That’s an obvious statement because if I’d expected a week of results
such as GLD down 4.7%, GDX down 12.9% and GDXJ down 14.0% I would have 1) sold my
long positions 2) opened short trades to hedge 3) made money instead of lost money 4) all of
the above. Now comes a bit of ‘splainin, with thoughts that hopefully avoid your accusations of
bias confirmation psychobabble because you can always come back to this paragraph and see
I’m not trying to hide my failures.
It’s not that I hate being wrong, either. Even though I do get annoyed about making a bad
near-term call of course, I’m also a citizen of the real world when it comes to predicting the
market and know that balancing sides, making judgment calls and playing the percentages only
goes so far, you cannot avoid making mistakes in the stock market.
• We are constant apprentices, experience allows you to include more factors in your
investment decisions but getting them all in, every one of them and then managing to
give them the correct relative importance, is Utopian.
• It’s reasonably to make an investment on a risk/reward situation that looks 80/20 in
your favour. Fact is, 20% of the time those trades will go against you. Or 90/10. Or
95/5. I could continue.
• Markets are by their nature unpredictable. They do things that are “illogical” and they
sometimes remain they way longer than you, I or JM Keynes can remain solvent.
• Et cetera.
All that means that yup, I’m going to stick to my guns and expect gold higher in the near future
because form what I saw and felt last week, added to the way in which one of the most solid
indicators of the gold price moved in an irregular way, points me towards last week’s gold sell-
off being powered by bullshit rather than true fundies.
The first exhibit comes from a region I rarely visit, the world of conspiracy theory, so with my
tinfoil hat suitably donned here we go.
• We know that last week saw some wholesale dumping of paper gold positions. It
doesn’t take much looking around the usual suspect goldbug pages to hear (1) about
the 3.2m oz Comex futures attack on Tuesday’s open that tipped spot gold under
U$1,300/oz and set off a raft of auto-sell orders
• We know that the balance of demand in the gold market has changed significantly in
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recent years and these day, China just edges out the traditional big consumer India as
the biggest buyers of the physical metal.
• We know that October 1st to 7th this year was “Golden Week”, the Chinese national
holiday week that sees the country all-but close down as its population goes on
vacation (I’m told six hundred million Chinese people traveled on vacation last
week...just let that number sink in for a minute, it’s hugely impressive).
Put those three together and you have the recipe of a well-orchestrated attack
on the price of gold. Now it’s up to you to decide whether gold was open for this
type of attack after flatlining on diminishing investment/market interest these
last few weeks, there’s surely a case there, but the tipping point was almost
certainly a weight-of-money aggression an a successful one too.
Thing is, as from today Sunday China is back at its workdesks and looking for its
own value investments and for my money, gold at U$1,250/oz or so is going to
look like an attractive bet.
Why so? Because it isn’t just market sentiment, feeling and a sudden propensity
for the whackaloon end of the internet that has me suspicious about the move
gold made last week, the fundies show that it’s out of kilter and a clear anomaly,
too. In the intro piece “TIPS vs gold suggests that precious metals have room to
run” last week, the suggestion was that there’s a discrepancy forming between
two squiggly lines that have tracked each other in an impressively faithful way
for almost ten years, the inverse US TIPS (an accurate measure of real interest rates) and the
price of gold. Last week we used the long-term chart to map out the close correlation of the
two, this week I’m going to zoom in a little and used the 12 month chart, it shows last week’s
strangeness more clearly:
The gap that’s suddenly appeared between gold and TIPS is big, it’s anomalous, it means one
of three things:
1) TIPS will run from its current 0.08% to perhaps 0.2%. It’s possible of course, but if you take
a closer look at the relative squiggles it’s far more common for the TIPS line to lead the gold
line.
2) Gold will rebound and return to (or close to the TIPS) line, suggesting the metal back at
U$1,300/oz soon.
3) As it says on the chart, “this time it’s different” and this long-standing close correlation has
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just broken down in a definitive manner. If so, all bets are off.
Of the three, my money’s on reason 2). By necessity I need to discard point 3) because this
relationship has gone back nearly ten years and if it’s breaking today, I’m damned unlucky. As
for 1), the only time that gold seems to have led TIPS was late May, when all the talk was
about the imminent Fed rates raise that was possible in June but more likely in July “when all
the Brexit nonsense was over and the UK had voted to stay in the EU”. Oops. There was no Fed
raise, the UK shocked everyone, gold followed inverse TIPS up as market jitters got bad. And
that’s also where we are today with TIPS screaming risk aversion, but this time gold hasn’t
followed suit. It’s done something else, zagged when it would have normally zigged and the
heavy gold future selling last week provided a handy and well timed (in sino-terms) trigger.
Therefore and to sum up the intro, even though I lost heavily last week by incorrectly calling
the market, failing to recognize the risk and being long when I should have at least hedged
overall positions I’m calling bullshit on last week’s action because it’s a easy call to do so, it
doesn’t pass the test of a change in trend and is far likelier to have been a blip in the unbroken
bull market action in gold, precious metals and their mining companies in 2016. The chances
that the nascent bull market in metals and miners has just broken down are slim indeed. And
that’s why I’m going to seize the opportunity presented to me by the market and open
coverage and position on a new precious metals mining company this week, this time a silver
miner. Read on.
Fundamental Analysis of Mining Stocks
Today we open coverage on Excellon Resources (EXN.to).
NOBS report dated October 9th, 2016
Excellon Resources Inc (CDB.v)
Company Overview
Excellon Resources Inc. (Canada: EXN.to, USA OTC: EXLLF, Frankfurt E4X1.f) is a junior
mining company operating in Mexico. Its flagship is the operating Platosa silver mine and
surrounding property in Durango State, Mexico. Current share structure is as follows:
Shares out: 74.82m
Options: 1.4m
Warrants: 12.43m
Deferred and restricted share units: 2.93m
Fully diluted shares: 91.58m
Shares due coverted from 4q15 debentures: 11.2m
Implied fully diluted count: 102.78m
Current share price: C$1.77
Market Cap: C$132.43m
Approx working cap per S/O: 16c
All prices are in United States Dollars unless stated. Forex U$0.80=CAD$1
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Part One Of Two
Today’s format is one I’ve only used on a couple of occasions but as I chewed things over this
weekend I’ve decided to take it out of hibernation. What you get today is the opening of
coverage on Excellon Resources INC (EXN.to) and it’s also my formal recommendation call
which means I’m a buyer in the next week, but it’s not the whole thing. Reasons:
• There’s no rush to own EXN, it’s going to be a longer term play and with an initial 12
month target. I’m also planning to buy in several tranches because the chances of it
throwing out cheaper buying opportunities over the next six months is high.
• By slow playing my hand (to borrow a poker phrase) I’d like to think we collectively can
avoid the type of sudden price pop that does nobody any favours. I’m not kidding, there
really is no rush to get involved here.
• Although the company is basically a one mine story, the strategic reasons to prefer EXN
over other silver plays are more nuanced. By giving myself two weeks to roll out the
narrative instead of one I won’t feel under so much pressure to edit down, get “the story
told” and potentially miss out on some of the factors that have got me in as a buyer of
the stock.
• There’s also a company-specific reason (in fact this is the one that finally tipped the
balance and has made this coverage a two-parter): EXN the company is at its own
crossroads today and the mine and company it’s been up to now is almost certainly
going to change significantly in the near future. By attacking the story this way, I get to
review EXN today and then look to its very interesting, even exciting, future next week.
The split becomes natural.
• I don’t mind writing them (in fact I enjoy the process) but when it comes to wading
through 14 and 16 page fundies analysis on stocks they can be a little hard to swallow.
Therefore this is also something of an experiment, so comments or opinions about the
format chosen would be very welcome.
So what we do today is set the scene and do the legwork, which will let me roll out the strategic
view of EXN as a long position and the reasons to like its future next weekend. Here’s what you
get today:
• Why I like Excellon (EXN.to) and my general investment plan
• Management and shareholders
• The Platosa mine
• Financials overview
You get the growth forecasts, risks, opportunities and eventual price target in IKN388, by which
time I’ll be a shareholder in the stock.
Why I like Excellon (EXN.to) and my general investment plan
The future growth model of EXN, what we can expect of the company in 2017 and the resulting
IKN Weekly price target all turn up in Part Two next week, but there aren’t any deep secrets
either so what this section does is lay out the list of reasons why EXN as my silver sector bet.
• Its plans for the future are already being executed and we should start seeing the
results in the next quarter or two. It’s still a work in progress, but when the company
starts churning out close to double the amount of silver (and base metals credits) from
its mine than today’s rate, I expect the stock price will re-rate considerably from here.
Once you compare what’s on offer in the silver space and at what price to the future
production and revenue profile of EXN as from next year, the numbers it offers are
compelling. To be honest that’s the main reason why EXN is a buy right there and we’ll
have plenty of details on that (mostly next week), but the other points below are
important too.
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• Behind the scenes, EXN has already polished up its act considerably. It’s brought in
better management, the cost profile has dropped considerably and any upside in the
silver price
• It has strong insto and tight-hands backing, all the cash it needs to complete its
upgrade, no need for any further share dilution. I will in fact argue that we should value
EXN on a share count of around 103m shares and not the near-75m shares outstanding
count of today, but there’s no hidden problem after that.
• Its community/political risk exposure is less than many people imagine. It’s certainly one
that I have misjudged over the years and there are constant stories and reports of
discontent among both locals and workers coming out of the local region. But having
done some more complete and detailed DD on the issue I’m comfortable with this part
of the EXN story now, the vast majority of issues are tempests in teacups that are
magnified by interest groups for their own ends. The bottom line here is that there’s no
true risk to the mining operation.
• It’s a very under-covered producer stock, with the only formal brokerage coverage in
Canada at the moment from Cormark. One of the things I remember about the way
Fortuna Silver (FVI.to) (FSM) took off way back in the 2009 to 2011 period, the time in
which it was a Top Pick here at the Weekly, is how it was largely ignored by the
Canadian bigwigs but then how its share price ratcheted higher every time it was
picked up a brokerage. I see the same for the future of EXN
For more background, I urge you to check out the company literature and a user-friendly place
to start is the latest corporate presentation (2), which does a good overview job of its plans for
the immediate future and how it’s set to double production at La Platosa.
As for the general investment plan, the way I envisage this is first and foremost, a longer-term
investment opportunity that set up in order to benefit from appreciation in the price of silver (be
that in absolute terms or its relative appreciation to gold. After the rout of last week we now
have a window of opportunity in the silver sector, most prices for equities have dropped from
very expensive to levels that are more reasonable and a lot of the future ‘Jam Tomorrow’
wishful thinking has been obliterated. That’s good for Johnny Come Latelies such as I and I plan
to take a first tranche of shares in the week ahead. However, I’m also clear that the next six
months or so for EXN are unlikely to be plain sailing, the company has plenty of hurdles to clear
in its expansion process and there a good chance that the market will price in blue sky levels of
production too quickly, then feel disappointed with its quarterly results for perhaps the next two
or three quarters. Therefore I really am not in a hurry to take my full position here, I’ll be sniping
shares in small blocks from time to time, starting now and probably finishing the process in mid-
2017. Because I repeat in order to stress that I see Platosa and EXN as a very attractive long-
term proposition with a lot of value left to be discovered by the wider market. This is the start of
something at The IKN Weekly best measured in years, not weeks or months.
Management and shareholders
Excellon is led up by the young, talented, intelligent and CEO Brendan Cahill. I hate him. A few
weeks ago I had the opportunity of meeting with CEO Cahill for an extended conversation and
the thing that really struck me (apart from his youth, good looks, intelligence and how much I
hated him) was his open and engaging manner. You could ask him anything and he answered
all queries, doubts and criticisms in the same way, willing and not afraid of addressing any weak
points the company might display. I’ll make no bones about it, up to that extended meeting I had
EXN on my general radar and that’s about all but afterwards it went to the very centre of my
radar and high on the watchlist. Cahill is also a director and spoke highly of his fellow board
members, including Ned Goodman of Dundee fame who also owns 3.55m of the total
approximate 5.4m shares held by board members.
The officers team has recently been strengthened with the appointment of Gerardo Rovelo as
Senior Operations Manager at La Platosa in 2015, he was poached from First Majestic (FR.to)
(AG) and has been one of the key elements in the cost reductions seen at the mine in the last
year and a half. Another recent appointment is Ben Pullinger as VP Geology, who came from
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Roxgold this summer and (according to Cahill at least) made a very significant impact on the
understanding of the local geology and has generated several very promising exploration
targets, as well as contributed to a better understanding of the current resource at depth that will
help with mine planning in the next years.
As for shareholders, the biggest one at EXN is Eric Sprott (you’ve probably heard of him
before). He was already a large shareholder of EXN but in the recently completed placement
took over 5.8m units and now holds 14.33m shares and 6.247m warrants (3). That gives him
19.3% of shares out and in theory at least 25.5% of the F/D number (until the convertibles
become shares at least, see below for that). However Sprott is under a Other large insto
holders include Dundee, Blackrock, Charteris Treasury and Notae Investments.
The Platosa mine
We do the rough and dirty overview of the main points of La Platosa. In Durango State in
Northern Mexico, it’s is a manto structure deposit that’s often marketed by EXN as “Mexico’s
Highest Grading Silver Mine”, or words to that effect. Here’s the latest resource estimate at the
mine. It dates from 2014 and is due to be updated soon, but it still gives us a good idea of
what’s going on:
And yes, with an M+I resource of 428,000 tonnes grading and average of 760 g/t silver as well
as 8.28% lead and 9.88% zinc, it has every right to be called high grade. Those resources use
very reasonable economic parameters too, such as U$17/oz Ag cut-off and a net smelter
revenue minimum of U$146/tonne.
This small chart (right) gives an idea of the mill throughput rhythm at EXN (for the record its mill
lies some 220km from the mine and the ore is
trucked in). Recent quarters have seen throughput EXN: Tonnes per day thruput average, per qtr
ranging 141td and 167tpd, in other words a long way 240
220
from the nameplate capacity of is mill which is 200
supposed to be around 350tpd today (and we’re told 180
160
it’s scaleable to 650tpd with some standard 140
modifications). The bottleneck at EXN isn’t the 120
100
production facility, the problem is getting the rock out 80
of the ground in sufficient quantity per day and that’s 60
40
what EXN is tackling via its underground capital 20
0
investment program, currently underway.
I’m going to get a little ahead of myself at this point
and show you this slide from the latest presentation (on the next page) because not only does it
give an idea of what EXN is doing at the moment to improve production rates for the years
ahead, it also gives an idea of the complicated nature of the deposit at La Platosa. The main
problem faced by EXN at La Platosa is the water table, which currently rises above the areas of
mineralization it wants to access and makes underground life very difficult. What it’s currently
doing is installing a pumping system that will lower the water table in the mine and make mining
easier and far more efficient (therefore higher production and throughput at the mill), but in this
schematic we also see how the resource grade varies from section to section in the mine. One
of the things that will help boost production is to access the very high grade material at depth
(see arrow to table, top right), which means the flipside is also true; that EXN to date has had
difficulty running its mine at the average deposit grade because most of the feed comes from
the upper areas at the moment. More on this part of the EXN story next week (and likely the
same slide shown again).
7
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2
tpd
source: company filings

,
Moving to a production performance EXN: Silver and Silver Equivalent production per quarter
overview, as this silver and silver Ozt Ag/AgEq
equivalent production chart shows 500000 Other AqEq
the majority of revenue at La Platosa Ag Ozt
400000
come from the main metal but the
by-products, namely zinc and lead, 300000 238771 159929 191016 177711 151995 140742
contribute significantly to the 159266
revenues mix too. In recent quarters 200000 107257
t a h n e d ra 6 ti 2 o % h as o f f l uc to tu ta a l t ed re b ve et n w u e e e s n 5 fr 8 o % m 100000 216379 206343 217079 182709 241872 152628 211557 227826
silver, with zinc the second product 0
and lead the third. 3q14 4q14 1q15 2q15 3q15 4q15 1q16 2q16
source: EXN filings
The main production problem EXN
has had (up to today at least) harks back to the complex natures of the deposit. Production
doesn’t fill the mill for sure, but due to the lack of access EXN has suffered from wide variances
in grade. These charts show grades of the payable metals:
EXN: Average Ag head grade (g/t), per qtr % EXN: Zn and Pb avg head grades (%), per qtr
684 11
700 614 594 632 10 Pb %
600 550 533 547 536 9 Zn %
475 483
500 8
406
400 7
6
300 5
200 4
3
100
2
0 1 source: company filings
4q13 1q14 2q14 3q14 4q14 1q15 2q15 3q15 4q15 1q16 2q16 0
source: company filings 4q13 1q14 2q14 3q14 4q14 1q15 2q15 3q15 4q15 1q16 2q16
Part of the solution coming next year is multiple accesses to the resources which means that
not only the grade goes up, but the average becomes more predictable.
Finally, a word about the the community situation in and around the La Platosa mine. It’s a
8

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common thing to see reports out of Mexico about troubles and strife at this mine and indeed,
back in 2011 there was a 53 day strike and blockade over a land possession dispute that spilled
over (and part of that dispute is still in litigation). Here are just three reports (4) (5) (6) from the
last couple of weeks, one that screams the mine “could close down” when the judgment on the
land litigation is handed down (they’ve been waiting for the judge’s ruling for seven months),
another talking about a union wrangle between workers at the mine, mostly about one union
wanting to get in on the act and the established one holding its ground. This type of noise will
continue, whether or not you follow me in and buy some EXN. But what I’ve learned after doing
some careful Spanish language research and also by grilling CEO Cahill is that it’s nearly all
bark, very little bite. The local landowner group (Ejido, the Mexican term) isn’t against the
presence of the mine, what they do want is their cut of the deal and it’s a constant to-fro
discussion between the sides, with one trying to get as much as possible and the other try9ing
to concede as little as possible. In other words, a normal type of situation in Mexico but one of
the strategies used by the locals is the media blast.
This is one of the subjects I’m most careful, nay leery about when it comes to the mining
industry in Latin America and I’ve passed on any number of projects or operations as
investments because of the project-killing potential of the community relations or wider political
risk. EXN doesn’t come close to that level of risk, even though it will continue to carry the
burden of very public grumbling around its neck for the foreseeable future. I’m good about this
aspect, it’s not a major problem and certainly not as bad as I thought it were before beginning
the closer DD of the last weeks.
Financials overview
Today’s final section is an overview of EXN’s financial position to date, with a little added to take
in the important aspects of the upcoming 3q16 numbers. Some things are pretty standard and I
won’t dwell, others need some explanation in
order to get us into line for the business end of this EXN.to: Assets
anal ysis next week 70
60
Assets (right) are one of the standard parts,
50
though we can see the way the 3q16 placement
40
has boosted the cash position at the company
30
(IKN guesstimate $12m at date). EXN took a
$15.463m impairment on its assets in 3q14 and 20
quite right too, we were already over an year into 10
the serious downturn by then, so both resources 0
and profit-making ability had dropped
considerably.
Liabilities has an interesting little phenomenon
going on in its long-term items in 2016. At the end of 2015 EXN ran a raising and placed
CAD$6.6m of convertible debentures, which could be converted into shares at the end of the
four year term (or forced after two years by the
company if the share price went up enough,
which is now by far the most likely scenario) at a
50c deck price. In total, there are just over 11.2m
shares to be converted and as EXN is now a
$1.77 share, unless things totally collapse (and
they won’t) we can assume all of those converts
are going to be turned into shares. In hindsight a
very sweet deal for the takers, they get interest
paid on the money they stuck into EXN and at
the end of it shares for 50c, an example of taking
a risk at the bottom of the market and getting
rewarded for it so good for them. But it also
means EXN has an embedded derivative liability
and it’s also marked-to-market, which in simple terms means that the CFO has to take into
account the rise in the share price of those 11.2m shares compared to the 50c ticket price and
add the difference to the long-term liabilities position of the company. It’s an accounting thing, it
9
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 tse61q3
$m
fixed
other current
cash
source: EXN.to filings
EXN.to: Liabilities Breakdown per qtr
20
18
16
14
12
10
8
6
4
2
0
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 tse61q3
source: company filings
srallod
fo
snoillim
LT liab
current liab

,
doesn’t actually cost the company a penny, pure paper pushing and when the converts are
made whole, that lump will disappear but because the share price has risen so well recently,
that column has got bigger and bigger. The bottom line is don’t worry about it, it is of no
consequence to the day-to-day of EXN and would
only matter to us if some third party moved in and 20 EXN.to: Working Capital per qtr
bought EXN. What’s more important is the near- 18
term liabilities position and in the 3q16 column 16
14
estimate I’m assuming EXN uses at least some of
12
the proceeds from the recent raising to pay it down
10
a bit, back to where is used to be. 8
6
4
But even it doesn’t, we’re in good liquidity shape
2
here as witnessed by the working capital chart.
0
EXN is now a little over half way through its capital
project on the improvements at La Platosa and
CEO Cahill tells me there’s around $3 left to
spend. With $12m in cash in the bank and a
working capital at an IKN estimated $18m, there are zero problems here.
Finally shares out and aside from the way the recent placement bumped the number up to
74.83m, there’s another important aspect to EXN worth mentioning today. The 74.8m number is
the real total today but EXN is better judged on a
higher number of shares. With all options and
warrants in the money (even the $1.75 ones from
the last round) and RSUs/DSUs to add, there are
also those 11.2m more to add to the pot once the
convertibles become shares and that’s most likely
to happen at the end of 2017. Therefore 74.8m
sounds fine, but for target generation purposes I’m
using the fully-fully diluted total to get a handle on
the real share upside potential of EXN, that’s
102.78m. It also implies the true (though still
artificial) market cap of EXN to be around
CAD$181m, or U$138m for context
under today’s analysis. A lot more than
today’s nominal one of course, but I still
think that’s wildly cheap compared to
what the company should be able to
achieve in 2017 and beyond once the
production starts shooting meaningfully
higher.
The very last thing to cover today is the
company’s recent operational results
profile and here are a selection of charts
derived from the P+L. This first chart is
the main one, it’s the most telling story
there is about EXN’s recent financials and it’s
also why I’ve paid less attention to the company
over the last couple of years. I like charts that get
to the bottom of an issue quickly and here we
see how EXN indeed generates revenues but for
six quarters in a row, 3q14 to 4q15, couldn’t
return an operating profit. Even now in the last
two quarters the operating profit is meagre at
best which means that when we turn our
attention to the bottom line net earnings, they’ve
been consistent losers of money. From where I
come from in businessworld, that tends to defeat
the object of going into business in the first place.
10
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 tse61q3
source company filings/IKN ests
srallod
fo
snoillim
EXN.to: Shares Out
100
90
80 74.8
70 61.6
60 55.0 55.0 55.0 54.9 54.9 55.0 55.0 55.0 55.0 54.7
50
40
30
20
10
0
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 tse61q3
source: company filings/IKN ests
serahs
fo
snoillim
EXN.to: Revenues and operating earnings, per qtr
12
10
8
6
4
2
0
-2
-4
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2
U$m
revenues
Op earnings
source: company filings
EXN.to: Net Earnings
4
(ex-4q14 $15.463m asset impairment)
3
1.9
2
1
0
-1 -0.2
-0.7
-2 -1.3
-1.8 -1.7 -3 -2.4 -2.6 -2.6
-4
-5 -4.4
-6
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2
source: company filings
srallod
fo
snoillim

,
The endless quarters of lacklustre performance were obviously affected all this time by the
dump in the price of silver 2014-2015, though more recently it’s been the way EXN has invested
into capital projects. There is some cause for
cheer from its recent sets of numbers though EXN.to: Costs overview
and that’s in the improvement in costs. This 10
chart shows the story well enough.
8
Production costs of $3.44m compare to an 6
average of $6m in 2014 before Senior
4
Operations Manager Rovelo arrived in
January 2015. Yes of course EXN has also 2
benefitted from the drop in the Mexican Peso
0
(MXN) versus the dollar and cheaper fuel
costs to boot, but that’s a 75% drop in
prodcution costs and that’s a tigher ship, no ifs
or buts. Meanwhile DD&A is small and G&A is
one of the lowest out there for an operating PM miner (it helps that top management receive at
least part of their remuneration in restricted and/or deferred share units instead of cash. In the
last six quarters G&A has run at an average of $0.77m per qtr.
Concluding part one
It took seven pages, which sounds about right. That’s just about all the EXN legwork
background I wanted to do this week, which now leaves me room and time to expand on why
this company is set to become a star in the silver sector as from some time next year. I’ll leave
you with a price chart and a clear statement that I will open my account and take my first
tranche of EXN in the week ahead, it will be part of the ‘Stocks to Follow’ list this time next
weekend and in IKN388 we’ll finish the job on the company with part two of the analysis, the fun
bit where we turn our gaze to the future.
Stocks to Follow
Yes it was horrible and nothing that follows in this paragraph will change the week in absolute
terms. But...but but but, with a GDX that was down 12.9% and a GDXJ down 14.0% the only
stocks on our list that underperformed the market average was Continental Gold (CNL.to down
19.8%) and arguably B2Gold (BTO.to down 13.7%). Yes there were other big losers such as
Starcore (SAM.to 11.6%), Riverside (RRI.v down 10.7%), Sandstorm (SAND down 10.5%),
Wesdome (WDO.to down 9.4%), Rye Patch (RPM.v down 8.1%) and I’m not sugarcoating
anything here, I got caught full square in the downdraft and there’s a large hole in my net
worth this weekend. Then again, having an unchanged stock (FCV.v) and even managing to
11
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2
$m
production costs deplet + amort G&A
Source: EXN.to filings, IKN ests

,
squeak out three week-over-week winners under the circumstances (REG.v, TK.v, ATY.v)
helped ease some of the pain. The best stock on the week was Tinka Resources (TK.v up
15.8%) on the back of its strong news. Fundies still count for something.
With the closing of MAD.v there are now 13 open positions on the ‘Stocks to Follow’ list, two
fewer less than our self-imposed maximum of fifteen at any given time. Nine stocks are in the
green, one is unchanged, 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$2.97 37.9% tgt $5.30 IKN375
Regulus Res REG.v hold C$0.64 06-apr-15 C$1.42 121.9% LT exploreco top pick
Starcore Intl SAM.to STR buy C$0.61 10-jan-15 C$0.61 0.0% $1.04 tgt, added a few IKN387
Long positions (in current order of preference)
Sandstorm Gold SAND STR buy U$3.80 17-apr-16 U$4.50 18.4% $7 tgt IKN378, now v. cheap
Tinka Res TK.v buy C$0.195 19-apr-16 C$0.22 12.8% Top value under radar Zn play
Wesdome Gold WDO.to buy C$1.72 22-may-16 C$2.42 40.7% $2.88 tgt IKN381, cheap again
Cordoba Min. CDB.v buy C$0.73 15-sep-16 C$0.78 6.8% new position, $1.50 tgt
Atico Mining ATY.v buy C$0.51 24-jul-16 C$0.53 3.9% bot again IKN382, 90c tgt
Rye Patch Gold RPM.v spec buy C$0.355 02-sep-16 C$0.285 -19.7% 75c tgt, post-Oct 17th add?
Riverside Res RRI.v buy C$0.39 27-jun-16 C$0.375 -3.8% Added IKN380, 60c tgt
Continental Gold CNL.to STR buy C$2.68 22-may-16 C$3.34 24.6% permit 4q16/1q17, $4.80 tgt
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$1.22 6.1% 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
Closed in 2016 closed close price
Phoscan Chem FOS.to jan16 C$0.28 29-mar-15 C$0.265 -5.4% Buyout trade, bot but poor deal
True Gold TGM.v jan16 C$0.18 23-aug-15 C$0.25 38.9% okay trade, sold on pol risk
McEwen Mining MUX jan16 U$1.09 25-jan-15 U$1.20 10.1% sold due to lack of value
Lake Shore Gold LSG.to feb-16 C$1.10 07-apr-15 C$1.69 53.6% bot out, sold early in process
Atacama Pacific ATM.v feb-16 C$0.19 26-apr-15 C$0.40 110.5% sold for a double on big pop
New Gold NGD feb-16 U$2.06 24-jan-16 U$2.96 43.7% closed good near-term trade
Sandspring Res SSP.v mar-16 C$0.195 18-oct-15 C$0.32 64.1% Hit tgt, took profit
Teranga Gold TGZ.to mar-16 C$0.54 15-feb-15 C$0.60 11.1% disappointing trade
B2Gold BTG mar-16 U$0.85 13-jan-16 U$1.30 52.9% Separate trade on B2, hit tgt
Dalradian Res DNA.to mar-16 C$0.67 27-oct-13 C$1.00 49.3% Hit target, sold, good win
HudBay Min. HBM may-16 U$4.10 03-apr-16 U$4.36 -6.3% Short trade, poor timing
Nevada Sunrise NEV.v may-16 C$0.185 28-feb-16 C$0.23 24.3% V. small, no big deal either way
Richmont RIC jun-16 U$7.60 01-may-16 U$9.30 22.4% near-term trade, profit taken
INV Metals INV.to jul-16 C$0.25 03-apr-16 C$0.95 280.0% Trade closed on time
HudBay Min. HBM aug16 U$4.98 09-jun-16 U$4.80 3.6% short trade covered, no big deal
Miranda Gold MAD.v oct-16 C$0.125 03-jul-16 C$0.10 -20.0% tiny spec trade, didn't work
2009, 2010, 2011, 2012, 2013, 2014 and 2015 closed positions in appendices below
Now for some notes on current basket stocks.
Miranda Gold (MAD.v): Position closed. It went on Thursday and I was out at 10c. So a
20% percentage loss, a real cash terms minor loss, a small idea that didn’t work out and a
space freed up on the list for something a little more worthy. Zero sleep lost, we move on.
Starcore Intl (SAM.to): Added. You’re going to have to forgive me, I couldn’t resist the 59c
12

,
and 60c prices that showed up late week and added a few - just a few – to my SAM.to position
without mentioning it in a Flash update or on the blog. I added just enough to knock the cost
average down a penny to 61c and could hardly believe I had the chance to average down on
this stock at this stage of the year and the temptation was too great. And in the same vein...
Riverside Resources (RRI.v): May add this week. This section is the bit where I grant
myself permission to add a few RRI.v to my holding in the week ahead.
Tinka Resources (TK.v): In ‘Market Watching’ below we take a closer look at the October 4th
news release from TK.v on its metallurgy results that created such a favourable impression
withe the market and yes indeed, TK traded like a champ last week and moved up over 15% on
decent buying volume thanks to the news.
But before leaving this snippet section, your author would like to pass on some more good
news about TK as we hear the financing round is almost ready to roll at the company. It’s going
to be the right size for the company’s needs, not too big and not too small (but I don’t have an
exact number so I’m not going to guess on one and play cute), but I do understand that
current holders Sentient is slated for around 40% of the whole deal and there’s another new
insto (I think it’s an endowment fund and if so it’s the type of tight-hand holder we like) that
wants a larger chunk. I’ve also heard that it’s being set up without warrants attached but can’t
confirm that; if so it’s a strong endorsement of the company at this price.
Cordoba Minerals (CDB.v): CDB spent the week fighting the tide of selling and come Friday
was only 3c down, which was more than okay given the circumstances. Meanwhile, I’m a little
late to this but let’s note that last Sunday (while I was writing up IKN386) Mining Journal
published a piece (7) quoting Robert Friedland at the Mines & Money Americas show in Toronto
the previous week, pumping the whole Colombia exploration scene (N.B. he only he CDB.v
there) by throwing out such media-friendly soundbites as “Colombia is probably the world’s
largest geochemical anomaly for gold” and comparing CDB’s San Matias district with the Cadia
Ridgeway system in Australia.
Atico Mining (ATY.v): ATY bumped along at or above its current level, managed to avoid just
about all the market flak and even squeaked a penny win over the week. In fundies news, we
should look out for its 3q16 production number , out either this week or next. I’m expecting a
good production number, a very good sales number and a stock that rallies into the 60s, this
current level is way too cheap.
Continental Gold (CNL.to): I don’t like myself much when I go down the “do as I say not as
I do” line, but that’s what happens here today. I need to reconcile two opinions:
1) Personally and considering the state of my own portfolio I have enough CNL shares
already and I’m not buying any more.
2) The chart below offers a very clear visual as to why CNL looks like a great buying
opportunity at this weekend’s price
and I’d recommend it to any itchy
finger trader out there.
CNL has bounced off its current level not
just once, but three times since the end of
June this year. That’s a strong base and it’s
also a stock that recovers quickly, the type
of reaction near-term speculation requires.
If CNL moves up 10% next week I wouldn’t
bat an eyelid, it wouldn’t take much more
than a modest recovery in gold to do so,
not even U$1,300/oz again.
13

,
B2Gold (BTG) (BTO.to): B2 has gone through one of those perfect storm things, it gets hit
by its own micro issues (Masbate) one week, then right on its tail comes the macro hit from the
gold sell-off. We’re now at the point when even I, the overweight B2 owner*, is thinking of
adding at this gilt-edged buy/add opportunity price. We’re now out the other side of cheap,
through very cheap and into Crazy Cheap territory with this stock again. Sadly it’s not the first
time, either. A company this good able to offer a near-double to a very reasonable target price
is an opportunity that doesn’t come along very often.
BTO used to be one of the slowest
companies to announce its quarterly
production numbers but in the last couple
of quarters it’s been a little quicker off the
mark. We may well get its 3q16 numbers
in the week ahead and the bonus with
BTO is that it also typically provides a
breakdown of production by mine and
normally some basic guidance to quarterly
costs, as well. A good quarter could
provide a decent catalyst at the right time
here.
In othe news, if you have any interest in
BTO please take time to read the section
and the links offered below in ‘Regional Politics’ today, “Philippines: 100 days of Duterte”.
*I’m talking about the amount of B2Gold shares of course, but I’m the first to admit that I need to lose 15 Lbs.
Sandstorm Gold (SSL.to) (SAND): SAND delivered its 3q16 sales number as expected at the
front of the quarter and we go into the details of the NR in ‘Market Watching’ below. In trading
SAND sucked, but then again they nearly all did. You may note that SAND is up to “Strong But”
on the near-term sentiment column, it’s the type of stock that will rebound first and fastest
once the coast is clear and the world works out the gold isn’t going to go lower.
Wesdome Gold (WDO.to): Recent quarterly production NRs from WDO have come between
day 13 and day 20 of the following month, therefore it’s possible that we’ll see the 3q16
production numbers released in the week ahead, if not the week after. In trading it sank with
the tide.
Rye Patch Gold (RPM.v): One mailer asked me whether I was a buyer yet, with the stock
now trading under 30c. The answer is no,
even though my position on its long-term
value should be crystal clear by now. Any
addition will be made after the share lock-up
day goes through (October 17th) because it’s
one of those situations where it may be very
cheap now, but there’s a chance of the market
throwing out one of those “Oh My Stars! What
a price!” moments if things run against the
stock at the right (wrong?) time. So I’ll wait
and see what happens when the 223m shares
are out of escrow before making any sort of
move.
The Copper Basket
After forty weeks of 2016, The Copper Basket shows a 81.13% gain to level stakes.
14

,
company ticker price 1/1/16 Shares out Market Cap current pps gain/loss%
1 Ivanhoe Mines IVN.to 0.61 778.96 1760.45 2.26 270.5%
2 HudBay Min. HBM.to 5.31 235.23 1171.45 4.98 -6.2%
3 Reservoir Min. RMC.v 4.08 48.69 449.41 9.23 126.2%
4 Capstone Min. CS.to 0.44 382.04 282.71 0.74 68.2%
5 NGEx Resources NGQ.to 0.65 205.06 252.22 1.23 89.2%
6 Western Copper WRN.to 0.38 94.19 98.90 1.05 176.3%
7 Trilogy Metals TMQ.to 0.395 104.33 67.81 0.65 64.6%
8 Cordoba Min. CDB.v 0.16 86.86 67.75 0.78 387.5%
9 Copper Mtn CUM.to 0.445 118.8 53.46 0.45 1.1%
10 Atico Mining ATY.v 0.28 97.59 51.72 0.53 89.3%
11 Nevada Copper NCU.to 0.66 80.5 50.72 0.63 -4.5%
12 Copper Fox CUU.v 0.125 417.64 48.03 0.115 -8.0%
13 Amerigo Res ARG.to 0.205 173.61 26.04 0.15 -26.8%
14 Hot Chili Ltd HCH.ax 0.09 445.723 21.39 0.048 -46.7%
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 81.13%
The copper names dropped along with the
rest of the market and few exceptions here, The Copper Basket 2016, weekly evolution
100%
even IVN.to went down. In the end there
were two winners (HCH.ax, ATY.v) and two 80%
unchanged stocks (RMC.v for obvious 60%
reasons, RVL.v), with the other eleven all
40%
losers, however notably there were no big
20%
losers in double figure percentages, the
worst showings coming from Trilogy Metals 0%
(TMQ.to down 8.5%) and Capstone (CS.to -20%
down 7.5%).
Over in the metals pit, copper couldn’t hold
on to the U$2.20/lb level due to a) the complete lack
of trading in China due to its week-long holiday and
b) the rise in the US Dollar, which affected just about
every commodity priced in its terms unless there was
outsized demand. And there wasn’t in copper, China
was closed.
In other words, a quiet week for fundies in the metal
and we’ll see what goes down when the big user of
the stuff gets back to work this week. Now for the
regular weekly copper warehouse inventory bullets:
• Overall world copper inventory levels in the
world’s three official systems dropped again
last week, down 17,064 metric tonnes (mt)
(-3.1%) to finish at 526,244mt.
• Shanghai was closed all week for China’s
week-long “Golden Week” holiday, therefore its 107,058mt figure from last weekend
didn’t budge an inch.
• The LME caused the drop this time, giving up the gains of the week before and
dropping 16,925mt (-4.5%) finish the week at 355,300mt. Not too much to read into
this move, so I won’t.
15
dr3naj ht01 ht71 ht42 ts13 t7bef ht41 ts12 ht82 ht6 ht31 ht02 ht72 r3rpa ht01 ht71 ht42 1yam ht8 ht51 dn22 ht92 ht5nuj ht21 ht91 ht62 dr3luj ht01 ht71 ht42 ts13 t7gua ht41 ts12 ht82 t4peS ht11 ht81 ht52 n2tco ht9
source: IKN calcs

,
• Comex stocks did something they haven’t done for a while, they dropped a little. Stocks
moved down 139mt (-0.2%) to finish Friday at 63,886mt.
Here’s the Shanghai-only chart, showing the lack of movement this week. I included it this
week only because it’s always here, not for any good reason.
Shanghai Futures Exchange Warehouse Stocks, 2014-2016
400000
350000
300000
250000
200000
150000
100000
50000
16
31'13ceD ht91 ht9 dn2ram dr32 ht31 ht4yam ht52 ht51 ht6yluj ht72 ht71 ht7 ht82 ht91 ht9 ht03 ts12 ht11 ts1bef dn22 ht51 ht5rpa ht62 ht71 ht7nuj ht82 ht91 ht9 ht03 ht02 ht11 ts1von dn22 ht31 dr3naj ht42 ht41 ht6ram ht72 ht71 ht8 ht92 ht91 ht01 ts13 ts12 ht11 dn2tcO
Mt Cu
source: Cochilco
Now for notes on a couple of the basket component stocks:
Ivanhoe Mines (IVN.to): Here’s part of the mail received from Reader “C” on Thursday
evening’s NR out of IVN:
“...had to laugh about this "Friedlanding". A news release about a news release? Just great! :)”
And here’s reader J’s mail, same day:
“Right on target. Great promoter indeed”
Yup, you have to hand it to the guy. Here’s the whole of the NR:
KOLWEZI, DEMOCRATIC REPUBLIC OF CONGO--(Marketwired - Oct 6, 2016) - Robert
Friedland, Executive Chairman of Ivanhoe Mines (IVN.TO), and Lars-Eric Johansson, Chief
Executive Officer, announced today that Kamoa Copper expects to issue the initial Mineral
Resource estimate for the Kakula Discovery during the week of October 10, 2016.
The high-grade Kakula Discovery is on the company's Tier One Kamoa Copper Project, near the
mining centre of Kolwezi in the Democratic Republic of Congo. The Kamoa Project is a joint
venture between Ivanhoe Mines and Zijin Mining.
Amec Foster Wheeler, of Reno, Nevada, has been engaged to independently oversee and review
the Kakula Mineral Resource estimate.
About Ivanhoe Mines
In short there’s nothing there, it’s an announcement to say that they’re going to have a
resource for one part of one of the three properties they have in DRC, and in JV at that, but
that didn’t stop IVN rallying Friday by nearly 10% as the world bought into the....well, what is
it?...the “pre-hype” I suppose.
Copper Mountain (CUM.to): On Thursday
CUM.to: Copper production, per qtr
CUM.to announced (8) its 3q16 production 21.7 22.0
22 21.2
n co u p m p b e e r rs ( a a l n o d n g a s w t i h th is c 8 h , a 1 r 7 t 0 s h o o u w n s c , e t s h e g o 2 l 2 d m a l n b d s 20 19.1 19.9 20.3 18.4 19.5 20.4 19.3 19.0
18
81,540 ounces silver) was a pretty decent
16
production quarter, the best since early in its
14
production life in fact.
12
10
A fair effort, but the problem CUM.to has is
contained in this second chart:
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3
source:company filings
uC
sblM

,
Copper Mountain (CUM.to): Operating Financials
90
80
70
60
50
40
30
20
10
0
-10
17
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2
$m Revenues Costs Gross profit
source: company filings
Its operating costs strip away nearly all the revenue and leave precious little to service a big
debt load (that’s priced in US Dollars by the way, to add insult to injury). The above pattern can
be expected for 3q16 and any future quarter until copper market prices lift up and away from
this floor. This is the “leverage to copper” I mentioned last week and those who trade these
stocks that sit at the fulcrum of profit and loss due to their costs profiles need to remember that
leverage is a double-edged sword. As you know I’m no fan of Capstone (CS.to) either but I
prefer it to this dog, there’s no point in doing all that hard work of mining if you can’t make any
money from it.
The Low Cost Producer Basket
After 40 weeks of 2016, the Producer Basket shows a gain of 82.10% to level stakes.
company ticker price 1/1/16 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Barrick ABX 7.38 1165.33 18.33 15.73 113.1%
2 Newmont NEM 17.98 530.595 33.67 63.45 88.9%
3 Goldcorp GG 11.56 832.381 11.74 14.10 22.0%
4 Franco Nevada FNV 45.75 178.01 11.29 63.45 38.7%
5 Agnico Eagle AEM 26.28 223.475 10.05 44.95 71.0%
6 Ang/Ashanti AU 7.10 405.27 5.44 13.43 89.2%
7 Buenaventura BVN 4.28 254.19 3.15 12.40 189.7%
8 Detour Gold DGC.to 14.41 174.06 3.93 22.55 56.5%
9 Sibanye Gold SBGL 6.09 228.71 2.59 11.32 85.9%
10 New Gold NGD 2.32 512.8 1.97 3.85 65.9%
Prices in U$/NYSE tickers, except DGC.to (CAD$) Portfolio avg 82.10%
Complete carnage. All ten down (which probably went without saying) and while the benchmark
GDX dropped 12.9%, there were a whole bunch of our stocks that
got hit harder than that. Every stock in the above list dropped by
10% or more except for Franco Nevada (FNV), which ‘only’ lost
9.2%. The worst of the bunch was Detour Gold (DGC.to), down an
eye-popping 21.0% as Canadian sellside’s favourite sale suddenly
went completely out of fashion. DGC even lost 1.4% on Friday when
most other issues managed a bit of a late week rally on gold’s return
above U$1,250/oz.
Another big drop was seen in Sibanye (SBGL), down 19.9% and
under a double on the year for the first time since February. And a
word due to Agnico Eagle (AEM) too, another big market favourite
this year and down 17.0% on very heavy trading. Put the whole thing
together and it looks like large money stampeding towards a small
door, bleating as it goes.
The extra heavy losses recorded by our list of suspects meant that the gap between us and the

,
GDX benchmark is now down to less than 15% (it was double that in August), a big drop. It’s
still going to take some mighty upheavals in the stocks above to cause us to lose that lead
totally in the last quarter of the year, but the hit was a heavy one all the same.
The Low Cost Producer Basket: Weekly performance
200% and comparative to GDX control
180%
160%
140%
120%
100%
80%
60%
40%
20%
0%
-20%
Which brings up the burning question, was what we saw last week a capitulation selling
moment in the larger cap miners? Yes I believe it was,maybe not an absolute one like we saw
in the final dip of January 2016, but a capitulation of hot money in an intermediate moment,
the cash that had got on the bandwagon late and was hurting. A mini-washout in the top end
stocks, I’d go as far as to say that with those annoying 20:20 hindsight glasses on it was a
healthy thing to see.
Goldcorp (GG): Very late Friday evening (literally just before midnight) Goldcorp (GG)
announced (9) that the near-weeklong strike and blockade by truckers at its big and important
Peñasquito mine has been lifted and the mine was getting back to work. The blockade arose
because the contract with the main trucking firm used at the mine expired on September 4th
and the two sides couldn’t reach a deal, with the main bone of contention seemingly how the
trucker group wanted the exclusive contract at the mine and GG said no (quite rightly too, I’d
say without knowing all the details). So they blockaded, Garofalo called it extorsionate, police
moved in, the blockade finally broke Good news but Garofalo must be sick of hearing the word
Peñasquito by now and you have to wonder whether the problem is solved or merely
postponed.
In the same NR GG announced that it expected to meet its 2.8m oz to 3.1m oz production
guidance for the year, but notably it used the overall corporate figure and said nothing about
Peñasquito specifically.
Regional politics
Ecuador: Marketing to come
The last week in October sees Ecuador’s “Forum of Strategic Investment 2016” conference in
Quito and according to the country’s mining minister last week, the government and Lundin
Gold (LUG.to) are looking to the shindig as a great moment to sign the definitive mineral
exploitation contract (i.e. operating permit) for the Fruta Del Norte project (10). This would be
a full-on marketing moment for Ecuador’s mining industry, international cameras there for the
pen-swap and handshakes, plus it’s the occasion when LUG is due to hand over U$25m in
“anticipated royalties (I translated directly for a change), first payment on pre-payment of
future royalties to Ecuador (most go to the local communities) which is scheduled to total
U$65m before the mine goes into operation. Said Mining Minister Javier Córdova (translated),
“We have arranged that the contract be signed at the investment forum to show that Ecuador is
a country suitable for foreign investment”. Meanwhile LUG’s boss Ron Hochschild told local
reporters that Ecuador is the only country with this pre-payment of royalty mechanism which he
sai was (translated from report into English), “...very positive and brings development to
communities quickly during the initial phase of projects. We have mentioned it to other
countries as a good practice which deserves to be copied.”
18
dr3naj ht71 ts13 ht41 ht82 ht31 ht72 ht01 ht42 ht8 dn22 ht5nuj ht91 dr3luj ht71 ts13 ht41 ht82 ht11 ht52 ht9
Low Cost Basket: Percentage difference between
basket and GDX control, 2016
5%
0% basket
gdx control -5%
-10%
-15%
-20%
-25%
-30% source: Google, IKN calcs
-35%
-40%
ht01 ht42 ht7bef ts12 ht6 ht02 dr3rpa ht71 ts1yam ht51 ht92 ht21 ht62 ht01 ht42 ht7gua ts12 ht4peS ht81 dn2tco
source: ikn calcs, NYSE/Nasdaq data

,
And Peru may copy Ecuador
Interestingly, it’s quite possible that Ecuador’s southern neighbour Peru, a country with far
more experience about mining, could use what’s happening in Ecuador at FDN as a model to
follow. It may not be exactly the same with the money coming from some other source than
future royalty payments, but word on the streets of Lima is that the PPK government is looking
at ways in which money can get to local communities hosting mining projects that have gained
the necessary local approvals, allowing them to build hospitals, roads or whatever else is their
fancy before the mine becomes a reality.
There’s a double-win potential here, as the idea would certainly help open the door to
communities in Peru (the promise of a fat cheque just by passing the prior consultancy stage
with green lights will surely help smooth the path), but it would also give an international seal
of approval to the way Ecuador’s now going about its business.
Philippines: 100 days of Duterte
Not exactly ‘Regional’ here, because anyone with a map or a working knowledge of geography
can tell you this country isn’t in the Philippines, but what with the latent threat the new Rodrigo
Duterte government has posed to our Top Pick B2Gold (BTO.to) (BTG) at its Masbate mine
(along with OceanaGold (OGC.to) (OGC.ax) (OGC.nz) at Didipio and other mining operations
too) here’s a short heads-up on reading material that marks the controversial new President’s
first 100 days in office.
This one from the Sydney Morning Herald (11) concentrates on the human rights angle and the
apparent disaster Duterte has created in foreign relations and is negative in tone. Perfunctory
journalism for an audience that wants its views to be confirmed in print.
This from The Independent (12) also zeroes in on the drug war nd thuggery angle and uses all
the keywords; brutal, Hitler, crackdown, slaughter. But it also has paragraphs like this one:
“Around 732,000 addicts and dealers have surrendered, apparently for fear of being
killed. The sheer number has surprised Mr Duterte and the national police, prompting
them to scramble for land and money to build rehabilitation centres.”
Interesting, no? But (unsurprisingly because although its editorial can be tiresomely milquetoast
lefty, it’s one of the best venues in the English-speaking world for foreign affairs journalism,
The Guardian’s report (13) is a far better and more nuanced one, which doesn’t shirk from the
controversial issues but has a lot more space for the views of Filipino citizens. Here’s a snippet
from the report:
“From the hundreds of responses we received to our callout the main objection against
the international media was not criticism for what Duterte has said or done, but the lack
of recognition for the positive things his administration has implemented.”
After reading and digesting them, plus considering the state of play and last week’s thoughts on
the mining issues there, my view that B2Gold isn’t under serious threat has been strengthened
further and there’s a clear buying opportunity in the stock this month.
Mexico: The move to rescind the extra royalty on mining gains ground
This publication has mentioned on a couple of occasions, most recently last week in IKN386
Regional Politics (here’s an extract)...
“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.”
...that the Mexico Chamber of Mining (CAMIMEX) initiative to annul the current law that
demands an extra 7.5% royalty on EBIT of mining companies, plus an extra 0.5% on precious
metals miners, has been gaining support in the country’s Congress. And as good timing would
have it last week those moves became official in parliament. Here’s a direct translation of this
19

,
report (14) on the subject:
Mexico City, October 9 2016: The secretary of the Commission for Taxation and Public
Credit in the lower house of deputies, Lucía Virginia Meza Guzmán, proposes the
reform of Article 270 of the Federal Rights Law which states that owners of mining
concessions must pay annually an extraordinary tax of 8% on income dervied from the
production of gold, silver and platinum. In the case of other metals, she asks that the
general tax rate be 4%. Via a communicado themember of parliament form the PRD
party explained that the reform would help mechanisms to stop the the deterioration in
production output in the mining industry.
Now for sure this is not fait accompli, there’s an awful long way between a law project and the
President of the country signing off on such a thing. But it is the first official news on the idea in
Mexico’s Congress, an important first step that will now set the wheels in motion.
Market Watching
Fresh eyes on Coro Mining (COP.to)
Before the topical paragraph I need to say that although the NR registered with me on
publication, for several reasons (most but not all work-related) I haven’t had the time to go into
its details yet, do the necessary DD or even update my spreadsheet models on the company.
Also, please note that I used to cover Coro Mining (COP.to) closely and even traded it with
reasonable success way back when, then semi-covered it and a couple of years ago I dropped it
from active coverage. Which means that I do
at least know something about the company,
who the people are (top management has
always struck me as upstanding people) and
where they’re doing their thing.
With those in mind, aside from perhaps TK.v
that the NR from COP.to last Tuesday morning
(15) was the best from any exploration stage
junior last week. It was certainly the best drill
result NR, with a headline that shouted “Coro
Drilling at Marimaca Returns More Exciting
Intercepts Highlighted by 330m @ 0.80%CuT,
236m @ 0.81%CuT & 188m @1.06%CuT” and
had every right to scream them too, as the
backup results in the table went to confirm that Marimaca could be a real deal deposit and
make for profitable mining, but due to the turmoil in the mining sector it largely fell on deaf
ears.
What I will say is that I’ll be doing DD work on COP in the days ahead and the company is
definitely back on my radar. This short piece today is to lead your eyes towards the company
too, it may well be worth your investigation time.
Tinka Resources (TK.v) and a good news release
On October 4th Tinka Resources gave us a NR (16) that allowed the stock price to swim strongly
against the sector negative tide and finish up over 15% on the week, all on good traded
volumes. I waxed lyrical about its contents on the blog the same day (17) and here today I’d
like to add a couple of extra thoughts to the mix, what with it being the Weekly and where I do
my serious work.
This is the table that came with the NR on Tuesday morning and it shows how two samples,
known as AAFC-01 and AAFC-02, were tested for recoveries using standard bench-scale met
testing methods.
20

,
It should be stressed that this is the first pass metallurgical testing and it’s only being done at a
small scale, but the results are nothing short of optimum and as TK highlights in its NR, the
indium apparently reports to the zinc concentrate as well as the silver. That should make it a
payable by-product and improve economics of the project. It also potentially means that any
eventual mine operation at Ayawilca could begin by running a single recoveries circuit, rather
than a multiple one that would entail higher capex.
I received a query from reader V about the apparent low percentages of the “3rd cleaner
concentrates” section of the results table, as they may point to lower recoveries of the final
product. Rather than answer it myself (I was pretty sure, but I’m not a geol nor am I a
metallurgist) I booted the question on to TK’s CEO Graham Carman. Here’s how he explains it:
“This was an 'open cycle' cleaner test which is a relatively quick and cheap testing
option focusing on grade in the final concentrate more so than recovery. I have been
assured that recoveries will improve significantly with more refined test work in 'closed
cycle ' tests. Not exactly what that means but it is more expensive and rigorous. We
will do that later. But these tests tick the box on our metallurgy and are about as good
as we could have expected at this early stage.”
In other words, all good. So what does all this mean for the economics of the Ayawilca project?
To answer that in general terms, here’s a table showing the two samples and then running the
numbers on their grades and recoveries for each metal (the lead and copper are ignored, it
looks like they don’t report to this conc) which are then priced at the following going rates:
• Zinc: U$1.00/lb, lower than this weekend’s spot.
• Silver: U$18/oz, which I think is fair enough under today’s market circumstance.
• Indium: U$500/kg, this one may be pitching a little high, so as a general thumbrule if
you prefer a low-end U$300/kg price you should knock U$4 off the totals.
Here’s how that crunches out with cash revenues offered on a per tonne basis:
TK.v: "what's that rock worth" on met sample results
sample Zn at U$1/lb Ag at U$18/oz In at U$500/kg total
AAFC-01 $154.49 $5.45 $10.41 170.35
AAFC-02 $217.60 $5.45 $6.24 229.29
source: TK data, IKN calcs
As you can see, the silver and the indium are all well and good but Ayawilca is a zinc project, an
open and shut case (until we start considering the tin content there, though that’s for another
day) with the vast majority of cash revenue coming from the main metal. For what it’s worth I
had a few exchanges with TK.v people and asked whether the AAFC-01 sample wasn’t a bit
high at 10% zinc to be considered “typical” for the whole resource and though there were
21

,
specific and good reasons for them to choose that sample (aside from the headline metal
content percentages), there was a consensus that perhaps to get a better handle on the overall
potential of Ayawilca we should focus in on the AAFC-02 sample and its 7.1% Zn. However,
even that sample points to a “Rock Worth” of over U$170/tonne and if your company officers
can’t mine that type of rock successfully and at a profit, I suggest they give up the profession
and go into hairdressing or catering or plumbing or something.
Bottom line: this was a strong NR from TK, its share price rebound on the week was fully
deserved and it was particularly pleasing to see it move up so well on a down week for the
sector. With the financing round nearly in place (see above) things are now looking up for the
company and in the near-term I’m more relaxed about TK than I was just one short week ago.
Sandstorm (SSL.to) (SAND) 3q16 sales results
This is the chart I put up on the blog on Monday (18) after opening the short’n’sweet
Sandstorm (SAND) (SSL.to) 3q16 peliminary sales NR that day (19.
U$m Sandstorm (SAND) (SSL.to): Revenues per quarter
18000 Royalty revs
16000 Au Sales
14000
12000
10000
8000
6000
4000
2000
0
4q14 1q15 2q15 3q15 4q15 1q16 2q16 3q16
source: SSL filings, IKN ests for 3q16
To that we can also offer this chart, which shows
the gold equivalent sales per quarter
AuEq Oz SAND: AuEq sales per qtr (3q16 preliminary)
(unsurprisingly the same shape) and we see that
14000 12460 12901 12517 12500
Q3 came in almost identically to Q2 (in fact Q2’s 12000 10424 10834 11381
original preliminary number was exactly the
10000 8951
same at 12,500 oz AuEq and adjusted later.
8000
From this scant information and knowing the
6000
average gold price for the quarter, we can take a
4000
stab at the quarterly financials (at least the main
2000
overview numbers).
0
Here’s the operations overview chart that shows 4q14 1q15 2q15 3q15 4q15 1q16 2q16 3q16
the 3q16 revenues forecast of U$16.625m, which source: company filings
would be a recent years’ record if it
SAND: Operations overview
comes in. Assuming the normally
low production costs and depletion 18
charges come in around the norm, 16
gross profit is set to come in at just 14
12
over $6m (fwiw the model says
10
U$6.125m, it won’t be).
8
6
However, as we’ve mentioned in
4
previous piece on the stock those 2
GAAP-y numbers aren’t the real 0
measure of SAND, a better idea is -2
to get the “cash generation
capacity” of the stock. This gives an
idea of the real cash flow in and out of the company and ignores the paper-only accounting
22
41q4 51q1 51q2 51q3 51q4 61q1 61q2 tse61q3
U$m
total revenues prod costs depletion gross profit
Source: SAND filings, IKN ests

,
measures. To get this metric we take total revenues and subtract the two things that truly cost
SAND money (before taxes come along at
least), namely production costs and
administration costs. Here’s how that charts
looks and as you can see, thanks to the
sustained strong level of sales (equal to Q2
bar a spit) and the modest improvement in
the gold price, we estimate that this metric,
akin to free cash flow generation, to set a
new record this quarter at U$11.825m.
That’s a decent enough result.
As the SAND share price popped nicely over
Q3 (from U$4.17 on June 30th to U$5.03 on
September 30th), despite the better sales the price/sales ratio has increased in the period.
20 SAND: Annualized price/sales ratio, per qtr
18
16
14
12
10
8
6
4
2
0
23
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 tse61q3
SAND: Cash generation capacity
14
11.825 12 11.022
10 9.091 9.508 8.935
8 6.825 7.125
6
4
2
0
source: company filings, IKN data
However, at 3q16 annualized price/sales stood at 11.38X it’s still well below my rough target for
this derivative ratio of 15X (you may recall from previous numbercrunches on SAND that with
stocks such as FNV and SLW commanding much higher price/sales ratios, I think 15X is well
within the grasp of SAND). For the record, at
current levels at price/sales of 15.83X would
be enough to get SAND to my target price of
U$7.00, so overall I may be pushing the limit
a bit but it fits in okay with the general
gameplan...it wouldn’t take more than a little
extra production going forward to get it
there comfortably.
Bottom line: On its own Q3 results, SAND
didn’t deserve the kicking it got at the
market last week. And as this comparative
chart of SAND to the Gold & Silver Index
(XAU) shows its dive wasn’t related to the
results, out Monday opening bell, but more a
case of SAND doing what the rest of the sector did, dropping as the tide went out.
And that’s the way things are sometimes, but the Friday rebound in this ticker looked better
than the rest and volume showed up that day, too. It looks like bargain-hunters to me and
that’s not a surprise either as Sandstorm priced at U$4.50 looks a pretty good bargain to me. In
fact I was nearly tempted into adding a few on Friday, but ultimately decided to go for a few
ultra-cheap Starcore (SAM.to) and hold some ammo back for EXN this week. In other words
there’s nothing wrong with SAND and a lot to like at this price, strong hold for me, you may
want to buy or add at this bargain level.
51q1 51q2 51q3 51q4 61q1 61q2 tse61q3
$m
source: company data, IKN calcs

,
Episode six of “What I’d buy now”
The sixth edition of this segment, now a regular segment and according to feedback for every
negative opinion there have been roughly three positive ones, unsurprisingly mostly from those
subscribers who are more frequent traders (than I). Therefore let’s make this official and keep
it as part of the monthly rhythm of the IKN Weekly (feel free to ignore it from now on).
For those of you just joining us it works like this: The feature conveys “what I like now” in my
own portfolio considering the state of the market, the company particulars and their shares
prices right here and now. It’s has been, is and forever will be more of a thought experiment
than a map of how I’m trading the market (because I tend not to day-trade very much). The
rules are these:
1) You give me $50,000. We assume flat forex during the time period.
2) You tell me I have to invest every dollar in currently open IKN Weekly stock picks.
3) I’m allowed to allot different dollar amounts to different stock, from zero on up.
4) I base my decisions, choices and dollar amounts on what I think today about the
company, the stock price and the current underlying micro and macro fundamentals.
5) You know that I like all the stocks because you know I already own them, we both
understand these answers are about how I feel today about the open stock positions
for the next four weeks, no more or less.
We’ve had five episode periods so far (IKN369 to IKN372) (IKN372 to IKN375) (IKN375 to
IKN379) (IKN279 to IKN383) and now we close the fifth, (IKN383 to IKN387). Here’s how the
latest editions weightings got on:
Mark spends $50,000 in IKN383 Mark's $50k in IKN387
company ticker current PPS amount I'd invest today PPS today position value
B2Gold BTO.to C$3.51 9000 C$2.97 7615
Riverside Res RRI.v C$0.385 5000 C$0.375 4870
Starcore Intl SAM.to C$0.71 5000 C$0.61 4296
Atico Mining ATY.v C$0.52 5000 C$0.54 5192
Rye Patch Gold RPM.v C$0.34 5000 C$0.285 4191
Continental Gold CNL.to C$3.90 4000 C$3.34 3426
Sandstorm Gold SAND U$6.09 4000 U$4.50 2956
Tinka Res TK.v C$0.20 4000 C$0.22 4400
Wesdome WDO.to C$2.81 3000 C$2.42 2584
Regulus Res REG.v C$1.50 2000 C$1.42 1893
Miranda Gold MAD.v C$0.145 2000 0.1 1379
Lara Expl. LRA.v C$1.43 1000 C$1.22 853
Focus Ventures FCV.v C$0.085 1000 C$0.08 941
Total 50000 NEW TOTAL--> 44597
Yup, it was pretty awful, when the tide goes out on the mining sector the way it did, especially
last week, there’s precious little that gets missed by the rout. We managed to eke out a four
week win in just two positions, ATY.v and TK.v, the rest was just nasty and the final total of
$44,597 (not even considering commish costs) means the list lost 10.8% in just four weeks.
Ugh. Here below yo have the now growing table that has results and performance of all episode
periods to date:
period final total profit/loss to $50k
IKN369 to IKN372 $58,003 $8,003
IKN372 to IKN375 $53,274 $3,274
IKN375 to IKN379 $49,853 $-147
IKN379 to IKN383 $55,918 $5,918
IKN383 to IKN 387 $44,597 $-5,403
It was going quite well until then, too. We’re still up I suppose, but the shellacking was heavy
and it hurt in real terms, not just in this theoretical experiment. But hope springs eternal and
24

,
it’s time to set up the next four weeks that runs from today to the IKN391 edition. Here’s how
I’m playing the month with the stocks we cover:
Mark spends $50,000 in IKN387
company ticker current PPS amount I'd invest today
B2Gold BTO.to C$2.97 7000
Continental Gold CNL.to C$3.34 7000
Starcore Intl SAM.to C$0.61 7000
Sandstorm Gold SAND U$4.50 7000
Atico Mining ATY.v C$0.54 5000
Excellon EXN.to C$1.77 3000
Wesdome WDO.to C$2.42 3000
Tinka Res TK.v C$0.22 3000
Riverside Res RRI.v C$0.375 2000
Regulus Res REG.v C$1.42 2000
Rye Patch Gold RPM.v C$0.285 2000
Lara Expl. LRA.v C$1.22 1000
Focus Ventures FCV.v C$0.08 1000
Total 50000
Just a couple of comments this time:
• First I’m going to take a bit of a liberty and include Excellon in the list, even though I’m
only calling buy on it today and do’t actually own any yet.
• Second, you’ll note the virtual cash is spread a little more evenly this time. That’s
because for I can’t really pick out a potential star performer and that in turn is because
we’ve just been through one of the “tide out” moments, so if the equal and opposite
shows up (as I think it will) we’ll enjoy a “tide in” effect when they all rise, regardless
the individual story.
• However I will pick out Continental gold (CNL.to) as looking particularly good,
considering the way it’s pinged back quickly from this level three other times since the
end of June. That gets the equal top weight of $7,000.
We’ll catch up on the results of this batch in IKN391, hopefully a lot better than the dog’s
breakfast in this edition.
Conclusion
IKN387 is done, we end with bullet points:
• Excellon Resources (EXN.to) is my choice for the silver sector going into (and likely out
of 2017). We’ve done the background numbers this weekend, next edition I get to
show you just why it stands out from the pack.
• The gold sell-off of last week looks like an excellent buying opportunity to me. If I were
more nervous about the market I’d tell you, I know this and the tone of many other
parts of today’s edition sound strident to the point of arrogance on the subject, but it
looks like an obvious one to me.
• Enjoy your day off tomorrow, Canada. I’m cutting short the closing bullets because it’s
nearly midnight already here.
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
25

,
Footnotes, appendices, references, disclaimer
(1) https://lawrieongold.com/2016/10/06/3-2-million-oz-of-comex-paper-gold-crashed-the-price-on-tuesday/
(2) http://www.excellonresources.com/images/Presentation/2016/EXN_Corporate_Presentation_-
_September_30_2016_-_minimized.pdf
(3) http://www.excellonresources.com/index.php/investors/news/2016/180-excellon-completes-15-2-million-bought-deal-
financing
(4) http://www.milenio.com/region/Milenio_Noticias-Mina_La_Platosa-Sindicato_Minero_seccion_07-
Napoleon_Gomez_0_824317782.html
(5)https://www.elsiglodedurango.com.mx/noticia/690960.mina-la-platosa-dejaria-de-operar.html
(6) https://www.elsiglodedurango.com.mx/noticia/690967.la-sierrita-olvidada-por-sus-autoridades.html
(7) http://www.mining-journal.com/world/centralsouth-america/colombia-is-probably-the-worlds-largest-geochemical-
anomaly-for-gold/
(8) http://finance.yahoo.com/news/copper-mountain-announces-production-results-171900228.html
(9) https://finance.yahoo.com/news/goldcorp-resumes-operations-pe-asquito-040200718.html
(10) http://www.portalminero.com/pages/viewpage.action?pageId=115050737
(11) http://www.smh.com.au/world/100-turbulent-days-that-have-shaken-asia-20161008-gry2wz.html
(12) http://www.independent.co.uk/news/world/asia/rodrigo-duterte-philippines-president-slaughtered-war-on-drugs-100-
days-in-office-a7352651.html
(13) https://www.theguardian.com/world/2016/oct/08/rodrigo-duterte-first-100-days-philippines-president
(14) https://mexico.quadratin.com.mx/propone-gpprd-reformas-contener-crisis-sector-minero/
(15) https://finance.yahoo.com/news/coro-drilling-marimaca-returns-more-123000326.html
(16) http://finance.yahoo.com/news/tinka-metallurgical-tests-ayawilca-result-130100069.html
(17) http://incakolanews.blogspot.pe/2016/10/tinka-resources-tkv-it-takes-very.html
(18) http://incakolanews.blogspot.pe/2016/10/sandstorm-gold-sand-sslto-3q16-sales.html
(19) http://finance.yahoo.com/news/sandstorm-gold-announces-12-500-113000955.html
26

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