IKN #400Premium

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The IKN Weekly
Week 400, January 15th 2017
Contents
This Week: In today’s issue, Changing of the guard, The Gold/TIPS relationship update.
Fundamental Analysis: Sandstorm (SAND) 4q16 production results and a look into 2017.
Stocks to Follow: Overview, Continental Gold (CNL.to), Rye Patch Gold (RPM.v), Wesdome
Gold (WDO.to), Lara (LRA.v), B2Gold (BTO.to), Starcore (SAM.to), Cordoba Minerals (CDB.v).
Copper Basket: Overview, Coro Mining (COP.to), Western (WRN.to), Imperial Metals (III.to).
Producer Basket: Overview, Goldcorp (GG), Barrick (ABX).
Regional Politics: LatAm fuel prices are rising, Updating Yamana (AUY) (YRI.to) at El Peñon,
Chile: La Escondida pay negotiations over-hyped by the press, The letterbomb of Óscar
Landerretche. Argentina: Barrick reports an incident at Pascua Lama, Peru: Community trouble
brewing at Antapaccay, Ecuador: Reporters get gold stars, Ecuador: Community opposition.
Market Watching: Minera IRL’s re-start and its return to formal IKN coverage.
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
In today’s issue
• Sandstorm (SSL.to) (SAND) gave us another quarter of good results. We consider its
recent past and what 2017 has in store in today’s Fundamentals section.
• Last week I pencilled in a gold price through U$1,200/oz by the end of January, it got
there in just four trading days. That’s good, but now things get a little fuzzier. The
closely watching TIPS yield chart suggests there’s a little more upside left in the tank,
but we also have a new President to add to the mix in the week ahead. If gold’s to go
much higher, or revert lower, it requires a new catalyst.
• Copper ran hard last week, but I don’t think it’s ready to challenge the $3.00/lb level,
the whole move last week looked speculative and bubbly. The Copper Basket for more.
• We round up coverage of our successful and now closed trade in Continental Gold
(CNL.to) and remind you that if Wesdome (WDO.to) manages to repeat last week’s
strong performance it’ll be over my target price and sold as well. Stocks to Follow for
more on those, meanwhile Goldcorp (GG) provided fun news releases last week so brief
focus on those in the Producer Basket.
Changing of the guard
You may not have noticed (☺) but this time next week we’ll have a new President of the United
States of America, with Donald Trump inaugurated and settling into his new office suite. We
can expect a lack of pop stars at the party (though Kid Rock might show up to play a set
between the gospel choirs) and some sort of speechifying that includes an immediate rolling-
out of domestic policies. None of which will concern me much, I’m not going to dwell on the
political week ahead here, but I will add one extra paragraph to today’s opener and keep it on-
topic to The IKN Weekly’s main focus too (go get your political fix somewhere else).
1

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Whether or not The USA has a male or female President, whether s/he’s nominally right or left
wing (or in the reality of The USA, right wing or a-bit-less-right wing), whether Obamacare
exists or not, whether there’s a whole bunch of bridges about to be fixed or a supreme White
Elephant wall to be built on a border, none of these things will affect my life or the state of my
finances, much certainly not in the near-term and even then, only in the abstract. For me, the
fun starts when Trump starts to play geopolitics and trade sabre-rattling with China, or is up
against his first A-Class international incident to which he will need to react correctly. In other
words, Trump’s presidency only affects my life through his foreign policy calls and those are not
on the menu this week coming, they’re all for another day. All the same and personal politics
left aside, I do wish the new POTUS good fortune in his new job but can’t help feeling that
we’re about to live in interesting times, as the old Chinese saying goes. Owning gold in this
period makes a lot of sense, not for alpha potential (bullion has none) but for its real role, that
of insurance. Owning gold doesn’t make you rich, it stops you from becoming poor.
The Gold/TIPS relationship update
Let’s not complicate matters, here’s the story in four simple bullet points:
• We know the relationship over the long-term is tight and good.
• We also know that at this moment, watching the TIPS yield curve closely has also been
a good tell on near-term movements in the price of gold (king dollar, Trump effect etc).
• Therefore, we’re going to keep a close eye on the chart we’ve presented in the
previous couple of weeks.
• However be clear that long-term correlation or not, our near-term lead indicator only
works right up to the moment that it doesn’t (recall the ego trap note from last week).
This weekend sees the yield on the ten year TIPS at 0.41%, it dipped under 0.4% for a couple
of days but rallied Friday. As seen in the update of the chart seen in IKN398 and IKN399, we’re
now facing a yield that’s very similar to the period just after the Trump victory once the initial
dust had settled. The week after the win, when gold traded in the low U$1,200’s.
The chart suggests:
a) The price of gold still has a little more room to run. Put a gun to my head and I’d say
there’s potentially another 2% of gold upside under current market circumstances, not
much more.
b) Once we get to “low $1,200s” we’ll need a new catalyst to see gold move up. Or of
course down. Will that catalyst come from our new POTUS? People, your guess is as
good as mine on that one but what I will do, for the time being at least, is stick to the
roadmap. We’ve made it to the U$1,200/oz mark, I’m now in the “Collect
underpants/??????/profit!” period that will get me vaguely from here to my targeted
U$1,400/oz price by the end of the year. It seems a long way off today.
Or maybe, just maybe, the next catalyst to send gold higher comes straight from the pages of
Adam Smith. We haven’t run these two charts since before Christmas but a look at the state of
play in the world’s biggest bullion ETF, GLD, shows inventories have dropped to just over 800
2

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metric tonnes (807.96mt Friday close, to be exact), the same type of level we had in the
March/April 2016 period before the fund jocks decided to pile in and push holdings to multi-year
highs. This looks for all the world like a floor level for GLD inventory and if we combine that
with the chart on the right, the inventory/price ratio which has suddenly dropped back
(meaning that the price is more readily affected by new purchases, see previous coverage for
the explanation on that leverage), all it’s going to take is for a few tonnes added to make an
outsized difference to the gold price. Or put another way, gold is newly ripe for a bit of market
speculation action.
GLD: Inventory/Price Ratio, 2016 to date
9.0
8.5
8.0
7.5
7.0
6.5
6.0
5.5
5.0
Okay, I’ve just re-read that last section and although I’m not going to edit it much it does
sound a bit convoluted and gobbledygooky, so here’s the bottom line:
• The price of gold has been going up recently
• But GLD inventories have been dropping
• GLD is the preferred way in to bullion for insto/fund/Wall St money
• I like that they’ve been selling and gold’s been rising.
• Because they won’t keep selling for much longer.
End of intro.
Fundamental Analysis of Mining Stocks
Sandstorm Gold (SAND) 4q16 production results and a look into 2017
On Wednesday January 11th, later than normal for this company but still quicker than most
others, Sandstorm Gold (SAND) (SSL.to) released its preliminary 4q16 sales results (1) and
here’s the paydirt part from the short NR:
“...the Company has sold over 13,200 attributable gold equivalent ounces during the
fourth quarter of 2016 and over 49,500 gold equivalent ounces for the full 2016 year.
Both the fourth quarter and annual production results are records for the Company.”
Those are both better than expected numbers,
with the 13,200 oz (likely to be revised slightly
upwards come the final results) and the annual
total both beating expectations. Here’s how Q4
stacks up against recent quarters and it even
managed to improve on 2q15, the last quarter
Aurizona (Luna Gold) managed to contribute
before being shut down completely. The figures
also beat out my personal “I’m expecting
something like 12,500oz AuEq and a happy 49k
oz AuEq (annual)” guesstimate from last week,
all good.
3
61/4/1 61/91/1 61/2/2 61/71/2 61/2/3 61/61/3 61/13/3 61/41/4 61/82/4 61/21/5 61/62/5 61/01/6 61/42/6 61/11/7 61/52/7 61/8/8 61/22/8 61/6/9 61/02/9 61/4/01 61/81/01 61/1/11 61/51/11 61/03/11 61/41/21 61/92/21 71/31/1
GLD gold holdings, 2016 to date (metric tonnes)
1000
950
900
850
800
750
700
650
600
550 Source: SPDR data
500
61/4/1 61/91/1 61/2/2 61/71/2 61/2/3 61/61/3 61/13/3 61/41/4 61/82/4 61/21/5 61/62/5 61/01/6 61/42/6 61/11/7 61/52/7 61/8/8 61/22/8 61/6/9 61/02/9 61/4/01 61/81/01 61/1/11 61/51/11 61/03/11 61/41/21 61/92/21 71/31/1
mt
source: SPDR GLD data
SAND: AuEq sales per qtr (4q16 prelim.)
14000 12460 12901 12517 12588 13200
12000 10424 10834 11381
10000 8951
8000
6000
4000
2000
0
41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4
AuEq Oz
source: company filings

,
So how does the preliminary 2016 annual sales number of 49,686 oz AuEq compare to
corporate guidance? Here’s what SAND wrote in its 2015 Year-End report:
2015 Year-End report outlook
Based on the Company’s existing Gold Streams and NSRs, attributable Gold Equivalent
production (individually and collectively referred to as “Attributable Gold Equivalent”) for 2016 is
forecasted to be between 40,000 – 50,000 Attributable Gold Equivalent ounces.
Then in the 1q16 financials, the same number:
Attributable Gold Equivalent”) for 2016 is forecasted to be between 40,000 – 50,000 Attributable
Gold Equivalent ounces
In the 2q16 report the low end guidance was tightened a little, even though SAND already had
nearly 24k oz AuEq booked:
Attributable Gold Equivalent”) for 2016 is forecasted to be between 43,000 – 50,000 Attributable
Gold Equivalent ounces
And tightened further in the 3q16 filings, but again SAND was taking no chances and allowing
itself less than 10k oz AuEq in the 4q16 period:
“... for 2016 is forecasted to be between 47,000 – 50,000 Attributable Gold Equivalent ounces”
In other words SAND finished 2016 at the top end of guidance, but it was notable how it ran a
conservative low-end number all
through the year. That’s one to U$k Sandstorm (SAND) (SSL.to): Revenues per quarter
remember when we get to 2017 18000 Royalty revs
forecasts. But before we get there, 16000 Au Sales
14000
let’s take a stab at what we can
12000
expect from the SAND 4q16 financials,
10000
with the US Dollar used as default
8000
currency. By assuming the 13,200 oz
6000
AuEq is the final number
4000
(conservative, as they’ve tended to 2000
round up a few ounces come the day) 0
and by assuming SAND managed to 4q14 1q15 2q15 3q15 4q15 1q16 2q16 3q16 4q16
sell its wares at the London Fix source: SSL filings, IKN ests for 4q16
average for 4q16 of U$1,218/oz, we
get an estimated revenue of U$16.1m for the 4q16 period (right).
So although sales were a record in ounces terms in Q4, dollar revenue isn’t going to match
3q16 when 3q16 SAND recorded an average selling price of U$1,336/oz. We can then take that
revenue number, plug in expected P+L items and come up with a reasonable guess on gross
profits:
U$m SAND: Operations overview
18 total revenues prod costs depletion gross profit
16
14
12
10
8
6
4
2
0
-2 4q14 1q15 2q15 3q15 4q15 1q16 2q16 3q16 4q16est
Source: SAND filings. IKN ests for 4q16
4

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The visual says “A bit lower then Q3, but still
a good quarter”, the precise gross profit SAND: Cash generation capacity
14
estimate stands at $5.5m. From there SAND 12.354
12 11.022 11.5
takes non-cash adjustments and gets to a
bottom line number, but once again (bore 10 9.091 9.508 8.935
you by repetition), the way to gauge SAND 8 6.825 7.125
isn’t on its net-net profits, better is to 6
consider its sales or its “cash generation 4
capacity (i.e. total revenues minus 2
production costs and administration costs, a
0
good way of seeing just how much cash it
gets to put in treasury. Here’s that chart and
we’re expecting $11.5m from the quarter.
We’ll get a better handle on the finer points of
the 4q16 financials when the company reports
its year around mid-March. Until then we’ll
leave the crunching, just wrapping up with the
most important chart from the balance sheet,
that of working capital. Taking into account
the cash generated by operations, then
adjusting for the approximate U$1.9m SAND
spent on its December share buyback spree,
the IKN best-guess on working cap at end
2016 is U$24m. That’s a good slug of cash
and added to the totally untapped $110m
credit facility means that SAND has a decent war chest with which to go and do deals in 2017.
A 2017 forecast and price target estimate
The whole point of owning SAND is to benefit from gold’s upside, which may be a Captain
Obvious special but in this case there’s a
fairly direct relationship between the rise and
fall of the price of gold and the moves in the
share price. SAND has low cash cost (for
want of a better phrase for a
streamer/royalty) and high operating
margins, it also benefits from a steady level
of production costs (see right).
That little intro paragraph sets the scene for
the valuation framework, we’re going to run
this on a price/sales multiple basis. With
SAND’s steady costs and reasonably
predictable sales number on a quarterly basis, the main variable is cash flow and that’s all
about the gold price, which means we can run a fairly simple spread to get logical price targets
at different gold prices. Here are the assumptions:
• We assume SAND sales 51,000 oz AuEq in 2017. We’ve seen the last three quarters
come in at 12.5k, 12.5k, 13.2k. Come the time of the 2016 year-end financials, my best
guess is that SAND will guide 2017 at between 48k and 52k oz AuEq sales, with the
mindset to under-promise and over-deliver again but with the track record of the last
three quarters, anything under 50k for 2017 is going to disappoint the market. I think
51k, a thousand and a bit more than 2016, is very gettable.
• We use a shares out total of 152m. The recent share buybacks announced on
December 28th (2) were timed well at the recent low prices and have brought the share
count back under 152m, but they’re not a really big factor in valuations (my best guess
5
51q1 51q2 51q3 51q4 61q1 61q2 61q3 tse61q4
$m
source: company data, IKN calcs
60 SAND: Working Capital per qtr
55
50
45
40
35
30
25
20
15
10
5
0
51q1 51q2 51q3 51q4 61q1 61q2 61q3 tse61q4
source company filings/IKN ests
srallod
fo
snoillim
SAND: production costs per qtr
4. 4 5 4.249 3.78 4.019 3.917
3.5 3.142 3.212 3.321 3.039 3.268 3.211 3.2
3
2.5 2.309
2
1.5
1
0.5
0
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 tse61q4
$m
source: company filings

,
is they have added around 3c to the target price). Not a bad thing, but more a case of
a bit of housekeeping from a company that didn’t have anything better to do with its
money at the time.
• We use a range of gold prices between U$1,100/oz and my 2017 target, U$1,400/oz.
• We then use a range of price/sales multiples between 9X (just about the lowest SAND
has traded for in the last year) and 15X (just about the highest).
Here’s what comes out the other end:
SAND: Target prices at varying gold prices and Price/Sales ratios (in U$)
using 51,000 oz gold eq sold, 152m S/O
Price Sales Ratio Attributed to SAND
Au U$/oz 9 10 11 12 13 14 15
1100 3.32 3.69 4.06 4.43 4.80 5.17 5.54
1150 3.47 3.86 $4.24 4.63 5.02 5.40 5.79
1200 3.62 4.03 $4.43 4.83 5.23 5.64 6.04
1250 3.77 4.19 4.61 5.03 5.45 5.87 6.29
1300 3.93 4.36 4.80 5.23 $5.67 6.11 6.54
1350 4.08 4.53 4.98 5.44 $5.89 6.34 $6.79
1400 4.23 4.70 5.17 5.64 6.11 6.58 $7.05
source: IKN calcs from SAND data
At the present time, with gold just under U$1,200/oz and the SAND share price $4.30, the
market is paying slightly under 11X Price/Sales according to our 2017 scenario. But as this 12
month price chart shows, SAND gets leverage on the multiple with any rise in the gold price.
• Right now (right of chart) we’re trading around 11X.
• We saw the same multiple in April and May of last year, assuming the eventual 50k
sales of last year (rather than our 2017 forecast of 51k).
6

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• But as gold started moving up in June and July, the market was willing to pay 12X.
• And at the top of last year’s market, SAND was changing hands at a 15X multiple.
In other words, as long as SAND delivers sales in the same style as the last three quarters of
2016 (and there’s no reason why it shouldn’t), the rise in the price of gold should see the
multiple increase and add leverage to the share price. As I’m fixed on $1,4k this year, I see no
reason why this stock cannot get to U$7.00 which means our current price target is reiterated,
representing a 62.8% upside to this weekend’s share price. However, you may not agree. Or
you may want to pick your own stepping off point, or even consider the option of buying SAND
if gold drops again and the multiple sees it dive back to the low $3s level as it did in December
(we note that’s exactly the moment CEO Nolan Watson moved in on his buybacks). That’s why
you get a range of prices and by way of example, I’ve also highlighted the $1,300/oz to
$1,350/oz and 13X multiple that targets a price of between $5.67 and $5.89 (+37%), a price
target that looks easily reachable for me in this year of Trump, 2017.
The bottom line to the SAND 4q16 production quarter is that it was another good one, we’re
getting used to this new production schedule and by extrapolating them, we can work out a
frame for SAND shares at different gold prices. As I’m bullish on gold’s prospects this year, I’m
happy about sticking to my U$7.00 target on the stock. You should also consider the business
model run by SAND which now has a far better look to it than the days when things like
Aurizona and Colossus blew up on it (NB; Metanor may be a horrid stock, but its mine is going
to keep on churning out gold, ditto Primero at Black Fox) and offers near-guaranteed cash flow
and investment protection even if gold goes South, plus the potential for the company to add
value in the near future via a new deal which puts some of its sidelined capital to work. Overall,
there’s a lot of reason to have a stock like this as a solid centre to a junior or mid-cap mining
portfolio. Happy with 4q16, happy as a holder in 2017.
Stocks to Follow
Overall a good and positive week, though notably the smaller names didn’t join the party. Of
the 15 stocks on our open list last week seven made gains (BTO.to, REG.v, SAND, TK.v,
WDO.to, CDB.v, SAM.to), two were unchanged (RPM.v, FCV.v) and six were week-over-week
losers (EXN.to, ATY.v, CNL.to, RRI.v, R.to, LRA.v) but one thing to like is how the losers tended
to be small while the winners had some chunky gains such as Westdome (WDO.to up 13.0%),
Cordoba (CDB.v up 9.3%), Regulus (REG.v up 7.7%) and Starcore (SAM.to up 7.4%), all
significantly better than the benchmark ETFs (GDX up 1.6%, GDXJ up 3.6%).
With the sale of Continental Gold we now have 14 open positions on the ‘Stocks to Follow’ list,
one less than our self-imposed maximum number at any given time. Eleven of the positions are
in the green, three are in the red.
7

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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$3.64 72.5% tgt $5.30 Top Pick prod.
Regulus Res REG.v buy C$0.64 06-apr-15 C$1.40 118.8% LT exploreco top pick
Long positions (in current order of preference)
Sandstorm Gold SAND STR buy U$3.80 17-apr-16 U$4.30 13.2% $7 tgt IKN378, good Q4
Tinka Res TK.v buy C$0.195 19-apr-16 C$0.235 20.5% Under-radar Zn. Frustrating
Wesdome Gold WDO.to hold C$1.72 22-may-16 C$2.60 51.2% Will sell at $2.88
Cordoba Min. CDB.v STR buy C$0.73 15-sep-16 C$0.82 12.3% $1.50 tgt confirmed
Starcore Intl SAM.to part sell C$0.61 10-jan-15 C$0.58 -4.9% ex-Top Pick, reducing position
Excellon Res EXN.to buy C$1.71 09-oct-16 C$1.79 4.7% $3.13 tgt, Ag growthstory
Atico Mining ATY.v buy C$0.51 24-jul-16 C$0.93 82.4% tgt $1.10, Cu play
Rye Patch Gold RPM.v STR buy C$0.31 02-sep-16 C$0.295 -4.8% 75c tgt, bot more IKN400
Riverside Res RRI.v buy C$0.39 27-jun-16 C$0.46 17.9% Added IKN380, 60c tgt
Red Eagle Min. R.to STR buy C$0.71 13-dec-16 C$0.78 9.9% Big growth potential
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$1.20 4.3% solid biz model
Focus Ventures FCV.v hold C$0.23 01-jul-12 C$0.055 -76.1% needs JV deal
Short positions
None at present
Closed in 2017 closed close price
Continental Gold CNL.to Jan'17 C$2.68 22-may-16 C$4.17 55.6% trade closed, profit taken
2009 to 2016 annual closed positions in appendices below
Now for notes on some of the current basket stocks:
Continental Gold (CNL.to): Position closed. As per the Flash update of Tuesday (see
Appendix 1) I have sold my shares in CNL and this position is closed. In the flash update I
mentioned the main reason to sell on the news, which goes like this:
• I bought in May 2016 for the expected good news on permitting.
• When that happened, I decided to stick around to see whether a buyout offer would
come.
• The advent of this financing deal makes any potential buyout offer less likely, in the
near and medium-term at least.
• It was always a punctual trade with time parameters, time to go.
I also noted in the Flash update that,
“Strategically, selling into what may
be a temporary downdraft today
may be an error” and as things
turned out, I could have got a better
price. Here’s a five day chart:
In reality, I highly doubt that I would
have sold at the $4.50+ levels we
saw midweek if I’d decided to hold
and see what happens. I would have
got greedy after making the “go for
it” call held out for more at the
higher prices (looked like breaking
out for a minute or two, $.50 has
been tough nut for CNL to crack
8

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recently) but then folded and sold as it dropped back, maybe the $4.40 level. So, perhaps I
missed out on an extra 5% to my winnings. Oh my heavy heart. It’s also interesting to note
that despite securing U$250m to build its mine and with an implicit $395 thanks to the
necessary equity raising to come, CNL managed to be a net loser on the week, by 5c.
However, there’s one more thing I’d like to add before we close out on this successful near-
term trade (open for just seven and a half months and up 55%, that’ll do me), which is why I
think the deal done last week significantly brings down he potential of a buyout offer in the
near future. When the NR was announced the first job was to get a handle on the overall cost
of capital CNL was paying for the deal. The central number to the deal is the LIBOR +8% on
the overall U$250m but that’s by no means the only thing, so when the other knobs and
knockers are added in, plus some normal and reasonable assumptions, in the time after the NR
I got an estimated total cost of capital of 15%. That was admittedly ballpark, but in
conversations since then with other respected numbercrunchers that original ballpark of mine
has held up. The cheapest calculation result I heard about from others was 13%, others got
14%, a couple agreed with me (after spending much longer on their spreadsheets than I did)
and put it at 15%. But whatever the number, that’s not cheap and in fact, CNL is paying more
overall than Red Eagle did to build the smaller San Ramón (and they raised their package when
Red Eagle was a $40m market capper).
So why does this 15% estimate of mine matter? Here’s a direct quote from the front page of
the Continental Gold website (3):
“Utilizing a gold price of $1,200/ounce, a silver price of $15/ounce and a US$:COP
exchange rate of 1:2,850, the base case scenario resulted in an after-tax net present
value at a 5% discount (NPV5) of $860 million...”
We understand that economic studies, no matter if they’re PEAs or full Feasibility Studies, are
estimates. We understand that gold prices could go up and change absolutely everything. We
understand the upside resource potential at Buriticá, the potential for positive reconciliation
from the current known orebody, all those things. But we need to start somewhere and I’d like
you to consider this part of the above extract, “...after-tax net present value at a 5% discount
(NPV5)...” because in real terms, what the number 5 refers to is the cost of capital for the
project. See the problem?
CNL uses a cost of capital of 5% in its economic studies
Come the day of the financing, true cost of capital turns out to be around 15%
And that makes a big difference, because if you run the math the NPV of $860m shrinks to a
little over $300m at the new discount rate. But it also begs the question as to why CNL used a
5% discount rate in the first place. And why it’s still using that very same discount rate on its
website this evening? Things somebody who’s a still shareholder of CNL should ask CEO
Sussman, as according to the company CFO Ari doesn’t want to talk to me any longer. I weep.
And that wraps up our near-term and successful foray in CNL, a trade that could have been a
little better if a) I’d worked out beforehand that the company was going to get its permits
without and problem and b) sold at a smarter moment last week, but all in all I’m a happy
camper and it’s good to start the new year by booking some green on the Closed Trades part of
the table above. The end.
Rye Patch Gold (RPM.v): Added. As noted in the Flash update of Thursday (see Appendix 2)
I decided to use a few of the dollars raised via the sale of CNL and have added and averaged
down on my RPM position. For the record, the cost average in the above table has clicked down
a penny, from 32c to 31c (precisely it’s 31.2c and I also know you don’t care).
I’m aware of the risks involved, this is a speculative play and my personal position is not going
to get any bigger, not by a single share. There is execution risk to this (re)start-up play and as
9

,
noted last weekend, RPM is already lagging a few weeks behind its previously advertised
schedule. That in turn may put pressure
on treasury until it’s free cash flow
positive, even if we get a smooth (or
smooth enough would be fine) run to
commercial production levels, those are
part of the risks here. However, to
borrow from Oscar Wilde I can resist
anything except temptation and the
potential rewards here if things go well
are very strong compared to this
weekend’s 30c share price. My 75c
target may seem a long way away, I’ve
seen sellside brokerage notes with
targets higher still.
And by the way, Gary Tanashian mailed me out of the blue and said that he really likes the look
of the RPM chart now and if the best charter I know likes the squiggly line, I do too. ☺
Wesdome Gold (WDO.to): Will sell at $2.88. WDO was the star portfolio performer last
week, up a very neat 30c to finish at a much more respectable $2.60 (when it dumped under
$2 in the late December intraday trading I felt decidedly queasy). As we’re now less than 11%
away from my target price, just in case WDO goes and does the same type of move in the days
ahead I want to reiterate, clearly and with no need for a Flash update if it happens, that if I see
my $2.88 in the days (weeks) to come I’m taking it.
Lara Exploration (LRA.v): Last week LRA brought news (4) of progress at its farm-out
copper project in Brazil, Maravaia. Its partner there is a local Brazilian concern and will earn
100% of the project once its in commercial production by paying LRA $750k. After that, LRA
retains a 2% NSR on production. As the project is now close to production (the NR supplied
photos, machinery is in), our project generator looks on the cusp of another success story in its
model and the $750k, if forthcoming this year, will feed the company’s treasury veyr nicely.
Maravaia isn’t a massive mineral body and the 2% NSR, though obviously useful for future cash
flow, isn’t anybody’s idea of a company-changer. However we once again see the vindication of
the prospect generator model when done well, LRA is second to none in this mining sub-sector.
B2Gold (BTO.to): Looking out for BTO’s 4q16 production numbers this week as I’m starting to
feel antsy about not doing any detailed work on my biggest holding and need a good excuse. In
trading, BTO ebbed and flowed with the sector average and ended up a comfortable 2.2% on
the week. Decent volume.
Starcore Intl (SAM.to): Some insider trading patterns are more interesting than others and
this one is particularly interesting, so check out the screenshot below form Canadian Insider
(5). First let’s clear up the minor one, as (SAM’s biggest single shareholder) Eric Sprott on the
last full trading day of 2016 decided for his own sweet reasons to transfer the 937,500 shares
under his own name into his “number company”, where all of his total 7.681m shares now live
(probably for tax reasons, but truly I don’t care).
So to the interesting one. Up til December the holdings of CEO Robert Eadie had been stuck at
between 12.5m and 1.4m for years. Suddenly he’s gone on a spending spree on his own
company shares and added 600k shares, at prices between 44c and 59c, to bring his total
holding up to 1.74m that’s an interesting move and potentially very positive for the near-term
future of this stock, as there’s possible positive newsflow from several quarters. However, I will
reiterate that I plan to reduce my holding (perhaps by a third) when we see SAM trading in the
60c...the rest will ride on.
10

,
Cordoba Minerals (CDB.v): Last time IKN was “don’t worry about the small starter size of
Alacran, there’s a lot more to come, it’s the grade of the initial resource that matter, expect
more drill results soon” and right on cue, CDB delivered pending assays last week (6) including
a cracking hole in the middle of the zone that couldn’t be included in the first pass resource.
That hole returned 108m of 1.26% Cu and 0.87 g/t Au, significantly better than the first pass
resource averages of 0.7% Cu and 0.37% Au (which were good in themselves), so even though
CDB and HPZ are still drilling on site, we don’t need a scrap of extra work done in order to
significantly improve the maiden resource. Expect the first update of many in 2q16.
Probably as a result of those
strong drill results CDB moved
up 9.3% on the week, but the
price move doesn’t really catch
my eye because we’re still
trading inside the longer-term
trading range that CDB can’t
seem to bust out of (on either
side. However, there’s still a lot
to like about the current CDB
chart and here it is:
Somebody is accumulating CDB
and they’re doing it as quietly
as possible. I’d wager that once
our new and dedicated buyer is
full, they’ll start talking about
how good CDB really is.
The Copper Basket
After two weeks of 2017, The Copper Basket shows a 11.98% gain to level stakes.
11

,
company ticker price 1/1/17 Shares out Market Cap current pps gain/loss%
1 Imperial Metals III.to 6.06 93.587 726.24 7.76 28.1%
2 Capstone Min. CS.to 1.26 382.04 565.42 1.48 17.5%
3 NGEx Resources NGQ.to 1.20 205.06 285.03 1.39 15.8%
4 Western Copper WRN.to 1.86 94.19 164.83 1.75 -5.9%
5 Copper Mtn CMMC.to 0.94 118.8 146.12 1.23 30.9%
6 Excelsior Min. MIN.v 0.63 167.364 123.85 0.74 17.5%
7 Regulus Res. REG.v 1.20 68.368 95.72 1.40 16.7%
8 Atico Mining ATY.v 0.95 97.59 90.76 0.93 -2.1%
9 Coro Mining COP.to 0.15 483.425 79.77 0.165 10.0%
10 Trilogy Metals TMQ.to 0.66 104.33 73.03 0.70 6.1%
11 Cordoba Min. CDB.v 0.73 86.86 71.23 0.82 12.3%
12 Amerigo Res ARG.to 0.345 173.61 67.71 0.39 13.0%
13 Copper Fox CUU.v 0.125 417.64 62.65 0.15 20.0%
14 Nevada Copper NCU.to 0.77 80.5 61.99 0.77 0.0%
15 Revelo Res. RVL.v 0.070 128.486 8.99 0.07 0.0%
NB: All stocks priced in CAD$ Portfolio avg 11.98%
It’s party time in the world of copper and once again, the ten winners in our collective basket
(III.to, CS.to, NGQ.to, CMMC.to, MIN.v, REG.v,
COP.to, CDB.v, ARG.to, CUU.v) beat out the three
losers (WRN.to, ATY.v, NCU.to), with two UNCH
making up the numbers (TMQ.to, RVL.v). Some
strong percentage moves among the winners too,
including Copper Mountain (CMMC.to up 17.1%),
Imperial (III.to up 16.9%), Copper Fox (CUU.v up
15.4%), Capstone (CS.to up 11.3%) and Cordoba
(CDB.v up 9.3%), that last one the only big winner
without a Canadian footprint. Indeed the way III,
CMMC and CS all beat the market average by a tidy
margin and are all a) popular b) Canadian-based c)
operating miners shouldn’t go without a comment.
Momentum traders tend to reach for the names their
most familiar with on these occasions.
We’re now 12% up in just two weeks, an impressive
move for a basket of stocks of whatever stripe and
the occasion was...a big move in the price of copper.
Here’s the five day chart that bars witness to the 15c move on the week and has put copper
back up near the highs it reached in the November zoom-up run. The market found two main
reasons to move copper higher and I’ll let Reuters fill you in on those (7):
"China's demand outlook still looks favourable," said Xiao Fu, head of commodity
market strategy at Bank of China International (BOCI) in London.
Underlining strong demand was data on Friday showing China shipped in a record
4.95 million tonnes of copper in 2016, up 2.9 percent from a year earlier, with
December imports up almost 30 percent from the previous month.
"Aggregate financing in December was very strong, so that will have an impact
because there's a two-month lag in its effect on the economy," she said.
Data showed on Thursday that Chinese banks extended 1.04 trillion yuan in net new
yuan loans in December, far more than economists had expected.
To which I say “fair enough”, but what they failed to mention on the other side of the coin is
that copper exports out of China (i.e. finished goods) were well down in December. Then
there’s the latent threat of some type of trade war with The Donald, would he slap import
tariffs on China? That one is just something bubbling in the back of my mind though, not one
that is up there in the trade decision-making process as yet. However, I will state for the record
12

,
this weekend that copper again looks toppy, I don’t think it has much more upside in the near
term and a return towards the U$2.50/lb wouldn’t surprise much.
In other macro news, Cochilco came out with its quarterly snapshot of costs in Chile’s copper
industry and as the companies it uses cover around 88% of all copper produced in the world’s
biggest copper producing nation (by far), it’s a dataset to which I tend to pay close attention.
This chart at the end of the PDF
presentation (8) sums things up nicely,
the import supplies index which covers
a range of 17 major cost input items
including diesel fuel, sulphuric acid,
metal ball bearings for ball mills, truck
tyres and several chemicals used in
processing. It’s weighted at 100 for
1q15 and a good way of getting a
snapshot of the costs profile in Chile’s
copper world, in other words (right).
What we see matches common
perception, things have indeed got a lot
cheaper in the mining world, but we’ve
also seen the back of the very cheapest prices of this time year and costs are beginning to
creep back up.
Now for the regular weekly copper warehouse inventory bullets:
• Overall world copper inventory levels dropped a little last week, snapping the rising
trend but in light trading and without it being much of a deal. Stocks dropped 11,035
metric tonnes (mt) (-2.0%) to close Friday at 537,643mt.
• SHFE Shanghai warehouse inventories rose dropped a little, down 764mt (-0.4%) to
finish Friday at 170,797mt.
• LME inventories dropped 13,425mt (-4.5%) to close Friday at 281,700mt. We didn’t see
the same type of arbitrage between LME and SHFE this week.
• Comex stocks jumped higher by a strong 3,152mt (+3.8%) o finish at 85,146mt this
weekend.
Here’s the Shanghai-only chart, registering the stall in inventory. That will change, we’ll be
above 200k soon enough and I’ll stick by my prediction of a couple of weeks ago, 200k by end
January.
Shanghai Futures Exchange Warehouse Stocks, Dec'13 to date
400000
350000
300000
250000
200000
150000
100000
50000
13
ht5naj ht61 ht03 ht11 dn22 dr3gua ht41 ht62 ht7ced ht81 ts1ram ht21 ht42 ht5luj ht61 ht72 ht8 ht02 ts13 ht31 ht42 ht5nuJ ht71 ht82 ht9 ht72 ht8
Mt Cu
source: Cochilco
This week, notes and thoughts on three of our basket stocks:

,
Coro Mining (COP.to): As heard on the grapevine and noted last week, COP hit the mark and
came out with a resource estimate for its up-to75%-owned-eventually Marimaca project in Chile
on Thursday January 12th. Here’s the main table, as ripped straight from the NR (9):
Now there’s a lot of numbery information stuff going on there, so I’ve taken the liberty of
boxing in blue the thing that most interests me about the table, with the second best thing in
the green box.
• The blue box, measured and indicated mineral tonnage plus grade, gives us a total
copper resource of of 149,316 tonnes, or 329m lbs
• The green box, inferred tonnage plus grade, gives the extra on top of the more
important M+I of 291m lbs Cu
We can then combine the above with some of the info supplied in another table in the NR...
...and get some basic cash cost, revenue and margin parameters. Now clearly we need some
guesswork here, as the resource is based on a too-high-for-my-blood U$3.20/lb and by the
looks of the various cut-off grades there’s a lot of lower grading material that would be treated
using the lower cost but lower recovery Run-Of-Mine processing method (you can see that by
the way the cut-off grade starts getting close to the resource grade as we go up the table). So
I’m going to make it as easy as possible at this stage and split things down the middle:
• Mining cost U$2.80/tonne
• Overall average processing cost U$7.55/tonne (average of the two numbers)
• Grade of contained copper: 0.67% (the M+I number)
• Overall recovery of contained copper 57% (average of the two numbers)
It couldn’t be easier and although I’m near-guaranteed to be wrong with these rather basic
assumptions, I’d also bet cash money we’re in the ballpark. Therefore...
• Cost per tonne including G&A = U$10.42/tonne
• Revenue per tonne at U$2.50/lb copper = U$21.04 (6.7kg x 2.20462 x 57% x $2.50)
• Percentage margin at U$2.50/lb copper: 50.5%
14

,
Not bad. I mean it’s not eye-poppingly good, but a 50% margin is enough to make your small
operation free cash flow positive by anyone’s standards and that means you get to pay down
the capex Or if you like, we can do that at a more optimistic copper price. Hey, let’s go for
COP.to’s preferred U$3.20/lb:
• Cost per tonne including G&A = U$10.42/tonne
• Revenue per tonne at U$3.20/lb copper = U$26.94
• Percentage margin at U$3.20/lb copper: 61.3%
Now that’s what I call robust. What we had from COP last week is a good start, but there’s still
a long way to go before we can truly justify its current $70m + market cap under current
market conditions. Even if we assume it can treat the 620m contained pounds of copper at
Marimaca and produce it at a 50% margin, how many years will they need to turn the rock into
money? And what about the capex? Y’know, details like that, which is why I’m going to be very
interested to see how the Feasibility Study that COP is about to embark upon for Marimaca
comes out.
Western Copper & Gold (WRN.to): It
finally dropped last week while others
around it rose, a case of too-far-too-fast.
I’m still at a loss to explain this run-up,
apart from noting its suddenly fashionable
address, that it’s being pumped by people
who really don’t understand anything
about Goldcorp or how that company
thinks...plus the fact that sudden runs like
this have happened before in this stock
(and have ended in tears sooner or later)
but even now after a 20% correction the
chartists among you will take one look at
the chart and see a gap that’s aching to
get filled.
Imperial Metals (III.to): In the immortal words of Douglas Adams, "If it looks like a duck,
and quacks like a duck, we have at least to consider the possibility that we have a small aquatic
bird of the family anatidae on our hands”. Brought into our mix 2017 as a type of “mini-me”
replacement for HudBay (now too large for this type of tracking basket), this is a company and
a stock about which I’m going to have to do more homework. For sure the recent run-up comes
on the back of copper’s excellent run, but it’s also just after a neatly timed placement that saw
the main company insiders buy at (what now looks like) deeply discounted prices. The
company’s operations are well understood, Red Chris is the type of mine that will really get
leverage benefit from higher copper prices and the trials and tribulations at Mount Polley have
been documented more closely than just about any other mine in Canada. On that score, last
week’s 16.9% upmove may well have received part of its boost from the Canadian government
decision on Friday morning to stop environmental pressure group MiningWatch from giving
testimony at its criminal trial proceedings. Here’s how the NR out of the indignant MiningWatch
on Friday evening kicked off (10)....
Mount Polley Disaster Stunner: Federal Government Moves To Stop
MiningWatch From Presenting Evidence To Court
WILLIAMS LAKE, BC, Jan. 13, 2017 /CNW/ - The federal Crown announced this
morning that it is moving to stay MiningWatch's charges against the B.C. government
and Mount Polley Mining Corporation (MPMC)—owned by Imperial Metals—over the
largest mine waste disaster in Canadian history. If successful, the Crown action would
prevent MiningWatch from presenting evidence to the Court about the 2014 spill's
damages to downstream waters and fish habitat, in violations of the Fisheries Act (see
15

,
backgrounder below).
"We were stunned that the federal Crown does not even want us show the Court that
there was enough evidence to justify proceeding with a prosecution against both the
B.C. government & MPMC for the worst mining spill in Canadian history," says Ugo
Lapointe, Canada Program Coordinator for MiningWatch.
...and here’s how III.to traded last week, the big 10% boost to an already strong week starting
late on Thursday.
Was the cat out the bag? Could people already “guess” what the government position would be
at court the next morning? Gosh...illegal insider trading on privileged information in Canadian
capital markets, what a stunning shock that would be...
The Producer Basket
After 2 weeks of 2017, the Producer Basket shows a gain of 8.89% to level stakes.
company ticker price 1/1/17 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Barrick ABX 15.98 1165.33 19.66 16.87 5.6%
2 Newmont NEM 34.07 530.595 18.32 34.53 1.4%
3 Goldcorp GG 13.60 832.381 12.15 14.60 7.4%
4 Franco Nevada FNV 59.76 178.01 11.31 63.54 6.3%
5 Agnico Eagle AEM 42.00 223.475 10.29 46.05 9.6%
6 Ang/Ashanti AU 10.51 405.27 4.88 12.03 14.5%
7 Royal Gold RGLD 63.35 65.281 4.39 67.18 6.0%
8 Kinross Gold KGC 3.11 1245 4.18 3.36 8.0%
9 Buenaventura BVN 11.28 254.19 3.32 13.08 16.0%
10 Sibanye Gold SBGL 7.06 228.71 1.84 8.06 14.2%
Prices in U$, NYSE or NASDAQ tickers Portfolio avg 8.89%
Last week saw seven weekly winners (FNV, AEM, AU, RGLD, KGC, BVN, SBGL) and three losers
(ABX, NEM, GG) from our list of ten basket components and what stands out about that count
is how the big companies lost and the smaller ones won (though admittedly Kinross only
scraped in, adding a single penny on the week). Due mostly to that, we managed to overhaul
the GDX benchmark and now have a slight lead, by a couple of tenths. The biggest moves
came from the Rand-exposed AngloGold Ashanti (AU up 5.6%) and Sibanye (SBGL up 5.2%),
both of those handily beating the market mean.
16

,
Goldcorp (GG): Among the big boys, GG was the main news generator last week. First on
Monday it announced (11) it was buying a total on 9,542,402 shares of Ian Bezek’s Auryn
Resources (AUG.to) at a market premium CAD$3.67/share, a C$35.02m investment which when
the dust settles gives GG 12.5% of AUG.to’s shares outstanding. Then came Wednesday and
two more announcements. First the minor, when it announced (12) it was selling its Cerro
Blanco project in Guatemala to a small junior named Bluestone Resources (BSR.v) for U$18m
cash along with a few other things that don’t matter much (U$2m credit for machinery from the
soon-to-close Marlin mine in Guatemala, a 1% NSR and U$15m once Cerro Blanco is
operational). Then the major when GG announced a few minutes later it had also closed
another deal on one of the things it wanted to sell, with the Frank Giustra financed shell
Leagold (13) paying a total of around U$438m approx (U$279m cash, U$71m in Leagold
shares, then a tax break on the deal that will benefit GG to the tune of U$88m or so) for the
company’s Los Filos mine in Guerrero State, Mexico.
You author’s thoughts on all three of those:
• The Auryn deal looks on the expensive side to me, that’s because Auryn looked
expensive for what it is even before GG dived in and paid a premium to shares. Many
people have mentioned AUG.to to me over the last few months and there’s a mix of
opinions, but one thing people tend to agree upon is that although potentially
expensive to own, its Committee Bay project up in the GWN is very prospective, even if
still unproven and likely to be expensive to explore correctly. It also owns the
Homestake Ridge gold project in BC Canada, about which I have no opinion at all.
When it comes to opinions, the only real one I have about AUG is that its Peru assets
are crappy. Though prospective from a geological point of view, they have been picked
over for decades and without anything great resulting. What’s more interesting about
the GG deal with AUG is that the “take a minority % in exploreco and sit back” strategy
is straight out of the AEM playbook. Along with the comments GG CEO Garofalo made
last week about teaming up with other majors and doing JVs on new big projects, a
reminder of his BFF status with AEM CEO Boyd.
• Regarding Cerro Blanco, I cannot congratulate GG CEO David Garofalo enough for
closing this deal, an excellent one for his company even if he didn’t manage to sell
what’s left of Marlin as well. Cerro Blanco is not an asset, it’s a liability. It will never be
permitted and never become a mine, so getting U$18m cash plus U$2m in non-
refundable credit for Marlin machinery is precisely U$20m more than anyone with a
brain would have paid. It’s also why that extra U$15m and the 1% NSR don’t
matter...they’ll never cash those.
• As for the deal to sell Los Filos to Giustra, that’s another good one for GG, at least in a
longer-term strategic way. To start, Guerrero State has off-scale political, community
and narco gang risk and is hated inside GG, nobody worth their salt wanted to go and
work there. Second, it is a working mine and still producing well, but its open pit
operation is now depleting and coming to the end of its useful life. However it is still
prospective and with plenty of expansion potential, but only if you’re willing to invest
both time and money in a new, second stage underground mining complex (most likely
block caving). GG’s disdain for the risk around Los Filos put them off making that
investment, therefore now is the best window of opportunity to sell the asset while
there’s still a little open pit production left. Once that’s gone, the new owners Leagold
will have to invest something like two years and half a billion dollars to get the next
stage running (which Giustra is bound to do in his normal way, by hyping the hell out
of his story and telling half truths then using Other People’s Money to do the hard
work), something GG didn’t want to attempt.
The bottom line is that I don’t really have a strong opinion about the direction in which Garofalo
is taking GG, not yet at least, but he’s clearly stamping his brand on the company. Of the three
deals last week, the one I like the most is the smallest and least consequential because the
17

,
ability to sell that utter dog Cerro Blanco deserves warm applause. I don’t own any GG shares
and I’m strictly neutral, but it’s fun to watch at least.
Barrick (ABX): See below in ‘Regional Politics’
for news of an incident that happened after the
close of trading on Friday. I highly doubt it will
affect the share price, however. For one thing
the incident looks minor in itself and for
another, Pascua Lama has been FUBAR in the
eyes of the market for many moons, it doesn’t
affect the daily price ebb and flow. After all, I
published this post with this cartoon back in
2012 (14), nothing much has changed since.
Regional politics
LatAm fuel prices are rising
The combination of reports passed this desk last week concerning fuel price rises in Colombia,
Argentina and Mexico (those price rises coming with well-reported riots and protests in the
country) was interesting though hardly coincidental: Fuel prices in LatAm are rising and not just
in the countries mentioned above with government-regulated tariffs.
Mexico’s mentality on fuel was formed in the Pemex controlled years, which made cheap fuel
akin to a human right. The current awakening for them has been rude and seen average fuel
costs move from one of the lowest (4th in The Americas, only beaten by mega-subsidized
Venezuela and then subsidized Ecuador and Bolivia) to seventh (15) thanks to the 14.2%
increase announced by the Peña Nieto government that sparked all the trouble last month and
this.
Argentina under Macri saw another 8% added to fuel prices this weekend (16), bringing the
total increment since Mauricio Macri assumed the Presidency a little over a year ago to 38%.
That number closely matches the underlying rate of inflation in Argentina (41% in 2016) and
again shows the lack of effect Macri’s economic policies have had on reining in inflation.
Meanwhile Colombia’s fuel is still one of the cheaper ones, but the latest 2% rise is one of
several small increments, the Santos government using a smarter drip-drip approach.
So using data from oilprice dot com (17) and the latest adjustments, here’s a chart I’ve stuck
together showing fuel prices in the main representative countries of LatAm (for mining at the
very least), as well as The USA as a reference. We use standard family car fuel as the
benchmark (rather than diesel or whatever), I haven’t included Venezuela because the price is
a rounding error (and we don’t care about it much as a mining destination) and also beg
indulgence for averaging on some price decks (no need to tell me the difference in fuel prices
across the USA for example, such things are also true for Brazil etc), consider the figures at
best-fit guides rather than objective truths:
18

,
U$/l LatAm and USA car fuel prices in U$/litre, January 2017
1.40
1.15 1.18 1.18
1.20
1.00
1.00
0.83
0.80 0.69 0.72 0.73
0.60 0.53
0.39
0.40
0.20
0.00
Ec uad or Bolivia T h e U S A C ol o mbia Pan a ma Mexic o Per u C hile Ar genti na Br azil
source: oilprice dot com, newswires, IKN ests
On other things, such as the well documented weakening of the Mexican Peso against the US
Dollar in 2016, things are getting cheaper for mining companies. But even then, most of the
better forex effect was from early 2016 and is now baked in. For example, despite the public
perception even the Mexican Peso has been largely unmoved against the US Dollar since the
Trump win (Build The Wall!). However fuel costs, often a major component of your mine
operation total costs (especially those open pit plays), are rising again.
Updating Yamana (AUY) (YRI.to) at El Peñon
After reporting on the violent protests and strike action at the Yamana Gold (AUY) (YRI.to) El
Peñon mine in IKN399 last weekend and then on the blog Monday (18) (19), YRI finally got
round to telling the public about this material event on Monday evening. Its corporate attitude
beggars belief, they seem to think that if they ignore negative things they’ll just go away by
themselves.
Anyway, the latest news (20) is that as from Thursday evening the union called off the road
blockade and strike in order to go back to the table and negotiate with the mine management.
Operations are set to resume today Saturday (time of writing this note) as soon as the damage
caused by the near-riot last weekend has been catalogued, a prerequisite from YRI to further
pay talks. Further strike action is possible if a deal cannot be reached, but we assume YRI will
offer more than the miserable 2% pay rise they tried to foist on their workers last time.
Chile: La Escondida pay negotiations over-hyped by the press
And while on the subject, last week we saw several Fear-Based stories in the English language
bizwires on the possibility of strike action coming at the La Escondida mine in Chile (operator
BHP), due to the pay negotiations going on between management and workers. Don’t fall for
this one, nearly all the noise is being generated from posturing (on both sides) and the chances
of real and prolonged industrial action that affects output at the world’s single largest copper
mine is minimal. My best guess is that “late-in-day” offer is taken to vote by union members
and even if they reject it, some “last minute” amendment will avert any strike. In this case (and
especially since other major mines have already reached agreements in this cycle) you’re not
listening to anything that might affect the copper price, this is just the music in the background
of two partners dancing their little dance.
The letterbomb of Óscar Landerretche
Yesterday Saturday I reported (21) on the disturbing news out of Chile that the President of
Chile’s State-run mining company Codelco (still the biggest copper producer company in the
world, no matter what FCX might think), along with his wife, had been injured after opening a
letterbomb in their house. Fortunately it seems their injuries weren’t too serious, but it does
raise the question of whether the country will see a spike in its political risk profile for mining
companies (in fact I received mails yesterday to that effect). The answer is almost certainly no,
and for the same reasons that the Unabomber didn’t manage to meaningfully affect the
academic system in the USA back during his small and personal reign of terror. This weekend’s
letterbomb was almost certainly the work of a very small and radical fringe group with limited
19

,
reach, the type that gets tracked down quickly now that they’ve stuck their head(s) above the
parapet and committed a headline-grabbing act. It’s also pretty easy for mining executives of all
levels to protect themselves against further attacks, on a “once bitten twice shy” basis. An
unpleasant and unwelcome terrorist incident it is, but nothing that will change Chile’s good
standing in the mining world.
Argentina: Barrick reports an incident at Pascua Lama
According to its own news release dated Friday 13th (22), on Thursday January 12th at around
6pm there was a water spillage incident at the Barrick (ABX) Pascua Lama project on the
Argentina/Chile border, specifically on the Argentine “Lama” side of the fence. The company
stated that due the rapid rise of water from the nearby Turbio River and the tunnel that diverts
the river’s course around the project, fed by meltwater after one of the heaviest winter-season
precipitation periods on record, first the de-sedimentation tanks and then and contingency
channels at the mine site were overrun. As a result, some water with sediments from the
exposed mineralization at Lama overran onto nearby land. ABX immediately reported the
incident to Argentina’s Mining Ministry and regional Hydraulics Department and also stated that
the incident posed no sort of threat to the local environment, nor to the health of employees on
site or those around the project, and said that the overspill was now under control.
Although it seems to be only a minor incident, it’s interesting to see how quickly Barrick was
keen to report it to the general public. First, let’s remember how far behind the curve ABX was
in the separate incidents at its Veladero mine in 2014 and 2016, also in the San Juan province
of Argentina, which put the company under intense public scrutiny. It’s obviously keen to avoid
a repeat of the PR mess it made back then. Second, it’s worth noting the difference between
the proactive response here and the idiots running Yamana (El Peñon, above). As a result of
this water spillage incident at Lama, we can now expect the usual environmentalist groups to
make their noises but as long as we assume that a) the incident was small and b) ABX didn’t
and doesn’t try to cover anything up, it’s not one that will cause the type of damaging headlines
we see on occasion. Transparency in the mining industry is no longer an optional extra, not in
this age of instant communication. You don’t get to pick and choose what people hear about
your company but what you can do is control the narrative, that means being at the front of the
story and not playing catch-up.
Peru: Community trouble brewing at Antapaccay
The townspeople of and around Espinar and the nearby Antapaccay copper mine, run by
Glencore, are headed for community related clashes in the near future if the rising bad blood
between the two sides isn’t addressed. The community has complained for some time that the
many of the terms of agreement between mine and locals, signed three years ago, have not
been adhered to by the mining company and now they’re adding a new complaint, that the
water in the local Cañipía River is being contaminated by the mining operation. There was a
meeting set (23) between the two sides for last Tuesday January 10th but it was called off by
the local community heads, who said that neither company nor government (local and national)
were taking the meeting seriously by sending over low level functionaries and people with no
decision-making capacity. Another meeting has now been called for January 26th at which locals
wants high level government and mine management people to attend, at which they are willing
to give all sides the opportunity to settle the disputes amicably. If not, we’re set for another
strike/blockade situation at a large-scale copper mine in an area of the Peru highlands.
Ecuador: Reporters get gold stars
Here’s an interesting one. According to this report, over 30 journalists, mining sector specialists
and “social communicators” (love that job title) were awarded certificates last week after
successfully completing a “Professional Certification of Mining Reporting” course in Ecuador last
week. The course was sponsored by Lundin Gold (LUG.to), used material supplied by EduMine
of Canada and came with the approval of the Ministry of Mining, who said that the course
“provides journalists and opinion leaders with the necessary tools to understand the technical
aspects of mining and the current national legal situation, as well as understanding world best
practices of responsible mining”. Reports cited (24) one of the certificate winners, journalist
20

,
Leonardo Gómez, who said, “It’s valuable to have these sources of information and understand
how the industry works, as well as knowing that it is happening in Ecuador. They have given us
tools with which we can do our job”.
There are two ways of looking at this development. On the bright side, we now have a bunch of
journalists in Ecuador that didn’t have much of an idea about how mining works and now they
do, so the industry will get a better hearing in the press. On the other, we can talk about
governmental indoctrination of thought leaders who will now be under pressure to toe the
official pro-mining government position. Now that second one may be cynical on my part, but it
still means the industry will get a better hearing in the press.
Ecuador: Community opposition
Meanwhile, indigenous and community opposition is on the rise again in two high-profile mining
projects in Ecuador. In the Intag locality, where Ecuador State-run Enami and Chile State-run
Codelco are moving forward on the Llurimagua copper project (ex-Intag, once owned by
Ascendant Copper), locals last week (25) voiced their opposition and protested about the lack
of prior consultancy they have been given for the project, which is supposedly part of Ecuador’s
mining law. Meanwhile the local opposition to the Chinese capitals (CRCC and Tongling, the
same people as at the Mirador project) Panantza-San Carlos copper project has continued,
despite the area being under martial law and with the government repeatedly trying to close
down an NGO that it accuses of being behind the violent disturbances. The latest there (26) is
that the indigenous umbrella group CONAIE has tried to position itself as mediator and last
week held talks with government officials in order to find a peaceful solution. CONAIE
proposed, among other points, the very same prior consultancy rights that locals also say have
been denied to them.
Ecuador’s road to being a Mini-Peru as regards mining continues.
Market Watching
Minera IRL’s re-start and its return to formal IKN coverage
Last week we noted the re-start in trading in Minera IRL, this week we’ve seen the stock trade
every single day on the Lima Stock Exchange (BVL) (27) and this chart shows the closing prices
for what is now the eight days of action. Bullet point notes below:
Minera IRL (MIRL.pe): Closing price in Lima (BVL), 2017
U$
0.16 0.143 0.148 0.141
0.14
0.119 0.119 0.117
0.12 0.11
0.101
0.1
0.08
0.06
0.04
0.02
0
4/1/16 5/1/16 6/1/16 9.1.16 10/1/16 11/1/16 12/1/16 13/1/16
source: BVL
• The Friday close of U$0.117 equates to CAD$0.153 approx. We’ve seen a top and a
bottom, as from last Wednesday we’ve had something like stable trading at a price that
well over a double from the last time it traded in Canada.
• Trading volume dropped off in the last three days of last week, with Tuesday January
10th the last day that Seminario SAB ran its campaign of spreading fear and nerves
around small holders of IRL in Peru, mostly via social media.
• The fact is, I got bored watching those two-faced scumballs running their dirty tricks
campaign, I’m not going to stand for these idiots any longer and that’s why I posted
what I did on the blog that evening (28). Cockroaches do not like light shone upon
21

,
them, as expected they stopped what they were doing. It was hardly a coincidence that
the share price popped back Wednesday onward.
• The dirty tricks are being orchestrated by Napoleon Valdez, an ex-director of IRL who
was using Seminario SAB’s desk to get his hands on as many cheap IRL shares as
possible. For one thing, he’s very aware of how valuable this company and its Ollachea
project really is (he was on the inside and knows all the numbers, after all). For
another, he was one of the people behind all the asset stripping plans of the last two
years under Hodges, Pinto etc (he’s still in cahoots with Pinto by the way). It’s fair to
say that I have upset Valdez in the last few days. Poor thing.
• What I’m expecting from IRL in the next couple of weeks is a period of quieter trading,
until such time as the announcement from the OSC/Canadian authorities that will give
the company green light to re-list in the Canadian markets, at which point IRL will list
and start trading on the CSE (the easiest place to list). When that is I do not know, but
all the paper work is in and it’s really in the hands of the Canadian market people now.
Once trading resumes in Canada I expect the stock to move back towards the
CAD$0.20 level we saw at the start of trading in Lima, before (probably illegal) scare
tactics got nervy small holders to dump stock at any price.
I now want to address a point that several of you have made to me in mails and so forth in the
last couple of weeks. Yes, I do plan to re-open formal coverage on the stock, including financial
modelling and price targets etc. Just like you I’m keen to get moving on that (I’m a shareholder
after all and it’s all taken far too long already) but before doing so I would like to speak to all
the main officers involved, including CEO Benavides, to get a better handle on what they plan
for the corporate structure. We know that the lion’s share of Ollachea mine financing comes
from the Cofide-led financing and I know that Cofide, a quasi-State entity, is only on half
throttle in Peru during the summer vacation months until the school year starts again because
(like it or not) that’s the way Peru works. We also know that the most likely (though by no
means certain) way the mine will be built is via an EPC/M deal similar to that used successfully
by Red Eagle (R.to) at San Ramón in Colombia and as that included an equity portion, it’s likely
(though again, I need to find out more before any serious financial modelling can happen)
we’re going to see a chunk of shares added to the count (though this time not at any old price
and not to any old friend or chum of the board) in the deal. This is an important factor in any
price target generation. Finally, re. Financials I’ve been led to understand that the off-scale hih
corporate G&A the company ran under the previous boards of directors will be throttled back
considerably (not only crazy-high directors’ fees, but rapacious lawyers got their pounds of flesh
too). I’d like to get a handle on what sort of new costs parameters we’ll see at IRL as well, how
and how much money will get spent, where Corihuarmi and its small but useful free cash flow
fits into the bigger picture, etc etc.
Bottom line: Yes, coverage will resume here at The IKN Weekly on Minera IRL. Yes, I’m keen to
get moving. I do have a rough idea of what I expect from the stock and I have no secrets
about that, I’ve pencilled in something like CAD$0.20 to start, then a move up to 30c as the
financing deal is closed, then an eventual 50c once Ollachea is in production, as something in
the order of CAD$150m market cap for a 100,000 oz gold producer is perfectly feasible in this
market, even with that welter debt burden it will have to pay down in its first years. But with
that said, I’m not going to dive in and attempt a decent financial model until I’ve spoken to the
main players on a formal level and got a better handle on things. We’ve all waited and suffered
for a year and a half, four or six more weeks for a target price isn’t going to kill anyone.
Conclusion
IKN400 is done, we end with bullet points:
• Four hundred is a nice round number.
• It’s about time Cordoba (CDB.v) broke out and made its way over the Loonie level. The
accumulation on the chart tells me that somebody else thinks so, too. As long as the
22

,
copper metal price holds onto its gains anyway, of that I’m less certain.
• Really happy to own Sandstorm at under U$4.
• And even though I missed out on the top price, also really happy to have sold my
Continental for a decent profit. Good way to start the year.
I thank you in advance for any feedback. Our Top Pick stocks are Regulus Resources (REG.v)
and B2Gold (BTG) (BTO.to). Flash updates will be sent if required by events.
I wish you good trading fortune, ladies and gentlemen. Namaste.
Mark
Footnotes, appendices, references, disclaimer
(1) finance.yahoo.com/news/sandstorm-gold-announces-record-gold-130000546.html
(2) https://finance.yahoo.com/news/sandstorm-gold-provides-updates-normal-142100276.html
(3) http://www.continentalgold.com/en/
(4) http://finance.yahoo.com/news/lara-updates-progress-permitting-development-211500093.html
(5)
https://www.canadianinsider.com/company?menu_tickersearch=Starcore%20International%20Mines%20Ltd.%20%7C
%20SAM
(6) http://finance.yahoo.com/news/cordoba-minerals-intersects-108-metres-120100367.html
(7) http://af.reuters.com/article/metalsNews/idAFL4N1F33HF?sp=true
(8)
https://www.cochilco.cl/Presentaciones/Observatorio%20de%20Costos%20(Presentaci%C3%B3n)%20Enero%202017v
3.pdf
(9) http://www.coromining.com/s/newsreleases.asp?ReportID=775619
(10) http://www.newswire.ca/news-releases/mount-polley-disaster-stunner-federal-government-moves-to-stop-
miningwatch-from-presenting-evidence-to-court-610687185.html
(11) http://finance.yahoo.com/news/auryn-announces-strategic-investment-goldcorp-140234105.html
(12) http://www.marketwired.com/press-release/bluestone-resources-to-acquire-cerro-blanco-gold-project-from-
goldcorp-inc-tsx-venture-bsr-2187913.htm
(13)https://finance.yahoo.com/news/goldcorp-announces-sale-los-filos-134200313.html
(14) http://incakolanews.blogspot.pe/2012/11/dear-barrick-abx-jokes-on-you.html
(15) http://eleconomista.com.mx/economia-global/2017/01/12/ano-nuevo-nuevo-ranking-precio-gasolina
(16) http://www.efe.com/efe/america/economia/sube-8-el-precio-del-combustible-en-argentina-quinto-aumento-con-
macri/20000011-3147164
(17) http://oilprice.com/
(18) http://incakolanews.blogspot.pe/2017/01/yamana-gold-auy-yrito-fails-to-disclose.html
(19) http://incakolanews.blogspot.pe/2017/01/please-fire-yamana-auy-yrito-ceo-and.html
(20) http://www.aminera.com/2017/01/14/sindicato-n2-depone-toma-ilegal-penon/
(21) http://incakolanews.blogspot.pe/2017/01/chile-gets-unabomber.html
(22) http://www.aminera.com/2017/01/14/argentina-barrick-informo-incidente-en-pascua-lama/
23

,
(23) http://www.aminera.com/2017/01/14/cusco-dialogo-espinar-minera-glencore-antapaccay-podria-quebrar/
(24) http://www.elciudadano.gob.ec/30-periodistas-y-comunicadores-obtuvieron-la-primera-certificacion-de-reporteria-
minera-del-ecuador/
(25) http://lahora.com.ec/index.php/noticias/show/1102018318/-
1/Comunidades_de_%C3%8Dntag_ratifican_rechazo_a_la_miner%C3%ADa_.html#.WHY3pDVVK1E
(26) http://www.ecuadorinmediato.com/index.php?module=Noticias&func=news_user_view&id=2818814182
(27) http://www.bvl.com.pe/inf_cotizaciones0B1HN_TUlSTA.html
(28) http://incakolanews.blogspot.pe/2017/01/seminario-sab-and-minera-irl.html
Appendix 1: Flash update dated Tuesday January 10th 2017
Selling Continental Gold (CNL.to)
On the back of this morning's news release out of CNL...
http://finance.yahoo.com/news/continental-gold-secures-senior-debt-113000170.html
...I have decided to sell my position and take profits. CNL has secured a U$250m financing package and, along with the
implied U$125m in equity raising in the deal and the estimated U$20m left in treasury as at end 2016, the U$395m total
covers all but a small portion of the estimated U$420m CNL will need in order to build Buriticá. All this is good, but the
news of this deal has substantially reduced the potential for an early buyout of the company and that's the main reason
I've been hanging around.
Make no mistake, this is a tough call and I've been modelling the company financials all this morning as well as
discussing the deal with trusted individuals, trying to make up my mind. PLEASE BE CLEAR THAT ultimately need to
frame this decision around my personal position and that's always going to be subjective, I have no right answers for
anyone else. My nominal $4.80 target still looks in sight and the share price drop we've seen today may attract the
potential buyout move from MUX or other third party. If it does, I'm plain wrong in selling today and to that end, I expect
CNL will be a company with plenty of rumours swirling around it for the next few days.
The bottom line is this: Strategically, selling into what may be a temporary downdraft today may be an error. However,
CNL was always framed as a near-term trade and one basically for the 2016 period, with a maximum of 1q17. My gut
tells me that selling too early for a decent near-term profit never hurt anyone, even if I'm taking a bit of a haircut to my
target price today. It's a 50%+ win in around nine months, that's not to sniff at. The decision is to sell and I'll expand a
little on the call in IKN400 on Sunday.
Appendix 2: Flash update dated Thursday January 12th 2017
Good Thursday morning, just before 11am, grey and damp outside.
Happy to see gold break through U$1,200/oz this morning. I gave it til the end of the month, it's happened before the
end of the week so obviously quicker than expected but there's nothing to complain about, either.
Anyway, to the real business and this is a short note to say that I'm going to use some of the proceeds from the CNL
sale to add to my position in Rye Patch Gold (RPM.v). Today's price affords me the opportunity to average down. This
will be my third and last purchase of RPM, after today I consider the position full to my personal portfolio balance
satisfaction.
Enjoy your Thursday, IKN400 on Sunday will have more RPM thoughts as well a view of decent Sandstorm (SAND)
(SSL.to) 4q16 sales numbers and what we might expect from that company this year.
Stocks To Follow Closed Positions 2016
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
Miranda Gold MAD.v oct-16 C$0.125 03-jul-16 C$0.10 -20.0% tiny spec trade, didn't work
Avino G & S ASM nov-16 U$2.00 21-oct-16 U$1.40 -30.0% Abandon trade on bad bot deal
24

,
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
25

,
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
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,
2009 and 2010 closed positions in appendices below
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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