IKN #402Premium

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The IKN Weekly
Week 402, January 29th 2017
Contents
This Week: Trading heads-up, In today’s issue, It’s a BLS Jobs week, The near-term Gold/TIPS
relationship breaks down (slightly).
Fundamental Analysis: Belo Sun (BSX.to) offers a trade on permit award re-rating, Cordoba
Minerals (CDB.v) rocks the market.
Stocks to Follow: Overview, Focus Ventures (FCV.v), Wesdome Gold (WDO.to), Starcore Intl
(SAM.to), Regulus Resources (REG.v), B2Gold (BTO.to), Sandstorm Gold (SAND), Tinka
Resources (TK.v), Red Eagle Mining (R.to).
Copper Basket: Overview, Trilogy Metals (TMQ.to), Amerigo Resources (ARG.to)
Producer Basket: Overview, Buenaventura (BVN), Sibanye Gold (SBGL).
Regional Politics: The big beautiful wall, Peru and Colombia sign mining agreements, Chile:
La Escondida update.
Market Watching: Presentations at the Whistler Conference, Riverside Resources (RRI.v)
4q16 and year-end financials, An update on Eros Resources (ERC.v), The three other tinycaps
mentioned in IKN398, A short Minera IRL update, Regarding SolGold (SOLG.ax) Cornerstone
(CGP.v) and Cascabel.
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
Unusually, there are three planned trade moves to report this weekend so here’s a list:
• I’m selling my Focus Ventures (FCV.v) and throwing in the towel on this disaster. See
‘Stocks to Follow’ for more
• I’m looking to buy some Belo Sun (BSX.to) for a near-term fliptrade, see today’s
‘Fundamentals’ section for details.
• I’m looking to start a small position in Eros Resources (ERC.v), an intention already
voiced but the change is that I’m now willing to pay up to 18c. Find details in ‘Market
Watching’.
And those are aside from the previously stated plans to sell Wesdome Gold (WDO.to) if we see
$2.88 and also lighten on Starcore (SAM.to). A lot of activity for me and my usual snail’s pace
of doing things, but that’s the way these things go sometimes.
In today’s issue
• There are several planned trades for the week to come, or perhaps next couple of
weeks. The list is above, the details are below.
• Cordoba Minerals (CDB.v) knocked the market’s socks off with its Monday NR. Lots to
discuss there.
• Belo Sun (BSX.to) may be about to wake up from a long slumber and I smell fliptrade
profit potential.
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• Gold just about held the bottom end of my parameters last week if you’re generous
with me. Which means it didn’t. We’ll consider what’s changed in today’s intro.
It’s a BLS Jobs week
Friday brings the January BLS jobs report and these lines are the usual heads-up. Here’s how
Bill McBride is calling it at the moment (1)...
The consensus is for an increase of 175,000 non-farm payroll jobs added in January,
up from the 156,000 non-farm payroll jobs added in December. The consensus is for
the unemployment rate to be unchanged at 4.7%.
...but as you know, those forecast medians can adjust as the week goes on (especially after
Wednesday).
The near-term Gold/TIPS relationship breaks down (slightly)
The Donald’s first real week on the job saw executive orders flying like confetti, the Dow
punching through 20,000 for the first time
(and staying there) and a gold price that
suffered from the Risk-On atmosphere as
traders again piled into equities and out of the
boring safe things. The result is seen on this
gold price chart, as gold broke down through
my best-guess U$1,190/oz line (as mentioned
only last week) and made me look the fool
that I am about gold price guessing, though to
its eternal credit it managed to fight back and
leave the week $11 off its lows.
What was interesting, however, was the
general resilience in the precious metals
mining stocks. While the gold main bullion ETF
(GLD) dropped by 1.3% and reflected the
above chart faithfully, the junior miners ETF
GDXJ only lost 0.4% and even more
impressively, the larger PM miners rallied and
saw the GDX ETF up 0.4% week-over-week.
An appetite for equities even inside the gold
sector, a fairly good signal.
GLD gold holdings, US Election to date (metric tonnes)
Going back to GLD for a second, the selling
1000
of bullion positions continued in the Jock
980
Desk Trader end of the gold market and GLD 960
940 dipped under 800 metric tonnes and finished
920
the week at 799.07mt, over 10 tonnes lower 900
880
than this time last weekend and the first
860
time under the 800mt line since March 16th 840
2016 (just after PDAC). 820
800
780
760
The final chart in this week’s intro is once
again of the Ten Year TIPS yield (2), but this
time it’s featured to note that the close,
near-term correlation we’ve tracked since the
start of 2017 seems to be breaking down. I repeat (until blue in the face if necessary) that the
TIPS/gold relationship is close over the long term, but it’s not always an accurate gauge for
very-near-term moves, the type of thing we’ve been tracking on a daily and weekly basis
recently. It’s been working well, but the signs of a disconnect shouldn’t come as a great
surprise as the nebulous (and nefarious) world of “politics” gains greater influence over the
2
61/9/11 61/11/11 61/51/11 61/71/11 61/12/11 61/32/11 61/82/11 61/03/11 61/2/21 61/6/21 61/8/21 61/21/21 61/41/21 61/61/21 61/02/21 61/22/21 61/72/21 61/92/21 71/3/1 71/5/1 71/9/1 71/11/1 71/31/1 71.81.1 71/02/1 71/42/1 71/62/1
mt
source: SPDR GLD data

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reserve metal and it stops being moved by straight financial factors.
The main point here is that the TIPS indicator is still very much inside our “New Normal” range
(0.4% to 0.5% approx), which will allow gold to drift up and down on other factors as long as it
stays there. There is a case growing for a drop in TIPS rates, which would be the type of
catalyst we’d need to push gold higher again, but that’s probably a medium-term thing and we
can leave it all for another day. As things stand this weekend, more financial eyes will be on the
BLS numbers Friday than the new US President’s Twitter account.
Fundamental Analysis of Mining Stocks
Belo Sun (BSX.to) offers a trade on permit award re-rating
Introduction
I believe there’s an opportunity for a near-term trade in Belo Sun (BSX.to), due to renewed talk
that its Volta Grande gold project in Pará State Brazil is about to be awarded the necessary
permits for construction and eventual operation by local authorities. I intend to act on this
opportunity and buy shares in BSX next week, with a view to a near-term trade (count it in
weeks, rather than month) that has a specific price target. Today’s report on BSX will therefore
do four main things:
• Set out the current corporate structure at BSX
• Give a little background on the Volta Grande project itself
• Go over the latest developments and the reasons I’m finally interested in this stock
(after a long long time just watching it
• Figure out a reasonable, near-term target price for the stock.
So without further ado...
Corporate structure
A brief overview of what BSX looks like these days, starting with the box you normally get in a
NOBS report:
Shares out: 465.09m
Options: 19.145m
Warrants: zero
Fully diluted shares: 484.235m
Current share price: C$0.85
Market Cap: C$395.33m
Approx cash treasury per S/O: 17c
All prices are in United States Dollars unless stated. Forex U$0.75=CAD$1
There’s a lot of shares out as you can see, but no warrants and very few options. Also, 19.2%
of shares out are held by BSX’s biggest holder and corporate sponsor, Agnico Eagle (AEM). That
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works out at just under 89.3m shares and it won’t come as a shock or surprise to anyone to
hear that AEM has been framed as the most likely buyer of BSX for the last few years. The
other big holder of BSX shares is Sun Valley Gold LLC, a fund that owns 74.65m shares
representing 16.1% of the shares out total. Executive chairman of BSX (and former CEO) Mark
Eaton owns 9.1m shares, according to the last MIC. The other thing to know about BSX.to is
that it’s a child of the Forbes & Manhattan group, i.e. it’s a Stan Bharti company. Many (even
most) of you will know my opinion about that particular market participant and yes, for me it’s
a negative to see his named attached to the gig (just for one example there’s a $26m bonus for
the F&M people on any change of control deal). As the saying goes, four places to avoid when
investing in mining companies are Afghanistan, Kazakhstan, Uzbekistan and Bhartistan. But in
the case of a time-limited trade with specific parameters, there is room to work here. After all,
we did okay with Continental Gold ☺.
As for that cash position, it’s one of the stronger points at the company. As at the last filed
quarter, 3q16 dated September 30th 2016, BSX.to had C$85.9m in cash and a working capital of
C$76.67m. As the current burn rate has been low, the current IKN estimated working cap is
C$70m and that’s good money which somewhat offsets that high market cap (an EV of around
C$325m or U$244m is easier to bet on than a headline number close t $400m for an
exploreco).
And just to round off a semi-interesting thing about the options: 1.552m of them mature
January 31st 2017 (i.e. in two days’ time) with a strike of $1.15. Then just over another 2m
mature at the same strike price of $1.15 between June and July 2017. The ones about the don’t
have much of a chance, but the June and July holders must feel as though they’re in with a
decent shot. Those might be flagging an impending rally.
The Volta Grande project
Now for a quick’n’dirty on the company’s main asset, the one its whole valuation depends upon.
The 100% owned Volta Grande project is planned as a large open pit gold mine. It sits next to
the local Xingu River and downstream from the massive and new Belo Monte hydroelectric dam.
There’s plenty of gold there too, as this table ripped from the latest MD&A shows (there are
dozens of other ways to cut and slice the gold reserves (and resources) on this one, I’ve gone
for a basic table to give the general idea:
It also has a 43-101 compliant full feasibility study, which was completed in March 2015. Here
are the basic parameters on that (but if you want more the study is on SEDAR, knock yourself
out there’s a ton to read)
▪ Annual gold production of 205,000 oz averaged over a 17.2 year mine life
▪ Post-tax Internal Rate of Return of 26% using a gold price of US$1,200/oz and an exchange
rate of 3.1:1 (Brazil R$3.1: US$1)
▪ Post-tax Net Present Value of US$665 million at a 5% discount rate
▪ Initial capital costs of US$298 million, including pre-production costs and taxes
▪ Average cash operating costs of US$618/oz and all-in sustaining costs of US$779/oz
There are more besides, but again we’re going for a general overview today. And once those
parameters are put together, you get this type of economic study result at different gold prices:
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For what it’s worth, I like the base case here because it closely reflects the current gold price
and it also shows good post tax NPV (U$665m) and post-tax IRR (26%). These are robust
numbers and show Volta Grande works as a project, on paper at least. I only have one gripe
with the above dataset and that’s the way BSX uses a 5% discount. Under normal
circumstances I’d be shouting about that much louder, but as the eventual theoretical owner
and operator of Volta Grande has that type of $300m on hand to develop the mine (we assume
Agnico Eagle, see below) it’s less of a problem.
We’ll come back to the numbers at the bottom of this when we try to work out a target price
for the stock, but first I want to talk about the catalyst for this trade and why I’m finally
interested in buying shares of BSX. There’s news from ground zero.
The latest developments at Volta Grande
On Thursday January 26th, Brazilian national newspaper Estadão reported (3) that the Pará
regional government is “about to authorize the start of the operation” of the Volta Grande gold
mine project. At this point, we need to state that Volta Grande that’s been on the permitting
track for many years and has been strongly opposed by local indigenous populations. You can
tell that because the Estadão goes on to say that the eventual awarding of the permit would
ignore “.. the conclusion of a technical opinion from the National Indian Foundation (Funai),
which does not approve the licensing of Mining due to failures in impact studies on indigenous
communities”, but those involved with the lawsuit brought by Funai against both Belo Sun (´s
wholly owned local subsidiary) and the Pará government, “...say that authorization will come in
the next few days”. They go on to quote the regional environmental body who say that BSX has
complied with all the necessary documentation for permitting of the project (without delving
into the minutae, a lot of the dispute is about where the areas of direct influence of the project
are demarcated). Apparently, the Enviro people’s decision is to be based on a technical report
submitted in late 2016 which used data supplied by BSX itself.
The news of impending permit awards comes just after a two day “participatory workshop” put
on by the company in the local town of Senador José Porfírio on January 12th and 13th, which
according to the company was attended by around 1,200 locals as well as representatives from
a range of relevant local and national Brazilian government bodies and institutions. All the suits
at the meeting liked it when BSX said it planned to invest a total of around U$1.2Bn in the
region, dollar signs in eyes etc.
The final point here; in earlier years and through the previous permitting process, BSX used to
deliver fairly regular news updates to the market. Not this time, they’ve been trying their very
hardest to stay under the market radar with the last news release from BSX dated July 29th
2016. We’ve gone over six months and through two sets of quarterlies and MD&As without a
single NR from the company, what it’s up to or any sort of puff-piece promo. That in itself is
interesting, because it’s not as if BSX has been sitting on its hands doing nothing in Brazil
Now for some context on what news of an impending (and you never know, eventual real)
permit award may mean for the stock price. The last time we paid and real attention to BSX.to
was back in April 2016 when the same Pará regional government was reportedly about to
award all the necessary permits to BSX in a ceremony at a local hotel (rooms were booked,
dignitaries flown in). But at the last minute the ceremony was cancelled and the permits left
unsigned due to a large and spontaneous local protest and march. If we check a couple of
twelve month charts, one pure price and the other a comparative to the Gold & Silver Index
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(XAU) to give an idea of sector ebbs and flows...
...it’s an interesting set-up, with a recent pattern very similar to the period just before BSX
popped above $1 last year (and with a very small gap up to boot). So if we cut back to today
and a look at the ten day chart below, it right shows that somebody was paying close attention
and that morning decided to pay up to own BSX.
People, this stock looks ripe.
A target price estimate for Belo Sun
This weekend’s 85c represents an interesting price level for several reasons:
1) If the permit is indeed awarded in the days to come then the stock price goes higher,
period.
2) As yet in 2017, we haven’t had anything like the type of volume surge we saw around
when BSX got buzzing and popular last year
3) Even if the permit doesn’t come in the next few days, we saw that last year it only took
a few rounds of “anytime now” talk to move the stock to the $1.10 level, which is 30%
higher than this weekend’s level.
The caveats here are reasonably obvious, too.
a) The gold price today (for argument’s sake let’s call it U$1,200/oz) is lower than it was
last mid-April (between U$1,230/oz and U$1,255/oz) the last time we had “any
moment now” for the Volta Grande permits in April 2016.
b) As in 2016,the Pará government may get cold feet at the last minute due to indigenous
protests and postpone the overdue permits.
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c) Even with permits in hand, this is going to be a controversial project at the local level
and difficult to build (AEM as large passive sponsor and potential buyer or not).
d) There are a lot of shares out here, it makes for lower potential explosive upside.
One thing important to recall is that, with permits in hand or not, this is still going to be a
controversial and polemic project among locals and that’s why I’m mostly interested in playing
the current window of opportunity (a bit like CNL recently, though underlying circumstances are
rather different). BSX gets the re-rate, we take our profits and move on wishing those left in
the best of fortune. Therefore job at hand then is to try and estimate what type of upside there
is at BSX in the event of permits coming through and to do that, ballpark and such, I’m going to
take the BSX feasibility study as gospel and work on its stated U$665m NPV at the current
U$1,200/oz gold price. The advanced state of the project means NPV is a decent way of going
about things, the gold price assumption is reasonable and for what it’s worth, the whole feas is
a serious document and worthy of measured trust. There is that thorny issue of using a 5%
discount rate, but as my model also goes on the assumption that Agnico Eagle buys out BSX
and they have that type of cahs on hand without the need to run to the banks and pay higher
interest rates, I’m going to let it slide.
Therefore we have a U$665m NPV on which o base our guesses. As BSX reports in Canadian
Dollars we convert to that currency (at the house 0.75/1 forex), which means Volta Grande has
an NPV of CAD$887m. The question is, therefore, what percentage of the NPV is an eventual
buyer of BSX (and that means you Sean Boyd at AEM) prepared to pay. Cue this table:
Belo Sun (BSX.to): Upside potential at U$1,200/oz gold
NPV multiple at C$887m NPV at 484m f/d share upside % to 85c
0.20 177.4 0.37 -56.88
0.30 266.1 0.55 -35.32
0.40 354.8 0.73 -13.76
0.465 412.5 0.85 0
0.50 443.5 0.92 7.80
0.55 487.9 1.01 18.58
0.60 532.2 1.10 29.36
0.70 620.9 1.28 50.92
0.80 709.6 1.47 72.48
0.90 798.3 1.65 94.04
1.00 887.0 1.83 115.61
source: BSX data, IKN ests and calcs
• The left column is a range of NPV multiples, including the approximate 0.465X the
market is baking into BSX today according to its 85c share price.
• The second left is the ratio to the C$887m NPV that results
• The third column shows that NPV percentage on a per share basis. Please note I’ve
used the fully diluted total in order to be conservative, rather than the S/O number.
• The final column shows upside to this weekend’s share price.
As you can see, I’ve shaded today’s implied value and also the 0.7X multiple. That second one
is the important one because that’s my best guess as to the multiple AEM (or anyone else)
would be willing to pay. That 0.7X may sound a little high at first to you, but please recall that
AEM already owns 19.2% of shares and would only need to buy out the remaining 80% and
bits. That would work out at CAD$500m right now, give or take, and then when you subtract
the working capital position of $70m AEM would in fact only have to shell out CAD$430m in
order to get its project with an NPV of double that. So, that’s why I’m best guessing 0.7X for
my multiple, rather than something skinnier.
Conclusion and trade call
Even though it’s not my idea of a great board of directors and even though the project faces
and will continue to face significant local opposition for a whole number of reasons, I’ve
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watched BSX on the sidelines for a long time because of the potential opportunity for a trade
like this. With the permitting jungle drums now starting to sound, I believe now is the time to
go for a near-term punctual trade in Belo Sun (BSX.to) in order to flip a quick profit. The set-up
is simple:
• I will buy shares tomorrow Monday (or perhaps Tuesday, we’ll see how the market
goes)
• I will wait for the news of permits for BSX at Volta Grande, either confirmed news that
they’ve got them or perhaps as effective, the type of rumourmill that we last saw in
March and April of last year that pushed the stock higher.
• When it hits my $1.28 target I will sell. No ifs or buts, this is a punctual trade.
• What could possibly go wrong? ☺
Assuming I can get in tomorrow at this weekend’s 85c, the trade if successful would return
50.6% pre-commish. That would be very nice, but I’m also a realist and know there’s a
probability I’ll have to pay up tomorrow (sigh), so if I can get in at 90c and out at $1.28, we’re
talking a 42.2% win, still more than enough.
This is a simple trade on potential re-rating on permits, not rocket science and not a company I
will be sponsoring to production. A decent way of deploying some of the cash that’s started to
accumulate in my account. I don’t expect to be in this stock more than a couple of months
maximum and if I get lucky and the target price is taken out quickly, even better. Belo Sun
(BSX.to) will be a part of the IKN ‘Stocks to Follow’ list as from next week in IKN403.
Cordoba Minerals (CDB.v) rocks the market
Last Monday at 7:01am our copper long Cordoba Minerals (CDB.v) published (4) the week’s
best junior mining news release, probably the best one of the month in fact. The title was no
exaggeration, either:
“Cordoba Minerals Intersects 4,440 g/t Gold, 10.25% Copper, 24.7% Zinc
and 347 g/t Silver Over 0.9 Meters in New Discovery”
This, of course, was a completely different type of result than the ones CDB was looking for
from the Alacrán project, as so far it’s been of the large low grade copper/gold variety and
likely a distal from a porphyry (or porphyry/skarn) system. This isn’t just a high grade
underground vein, it’s an eye-poppingly high grade vein and according to the geologists at CDB
(led by VP Expl Chris Grainger) it’s similar to the mineralization found at Buriticá by Continental
Gold (CNL.to). Here’s that bit of the NR:
The high-grade gold vein is similar to Carbonate Base Metal (CBM) vein systems found globally,
including Barrick Gold's Porgera gold mine and also Continental Gold's Buritica deposit, located
south of Cordoba's licenses along the Mid Cauca belt in Colombia.
All very promising and as the chart below shows, the market reaction to the news Monday was
nothing short of explosive. This time last week we were happy that CDB had broken through
long-term resistance at 85c and had closed at 93c. That number was left for dust, CDB opened
18.3% up at the bell (box 1) and then just kept on climbing. But then as the chart shows, there
were other phases in the breakout. Phase 2 saw buying through to the close and on Tuesday
morning between $1.30 and $1.40, already up to 50% higher than the previous weekend and
volume was strong, but then the price started to fade and as I mentioned on the blog (5), the
pattern was a typical one that smacks of person or people trying to reel CDB back in and not let
it go any further. In fact CDB went as low as the $1.10 open we saw on Monday before
reversing, but when it did the selling pressure suddenly disappeared into thin air and the only
way was up. It’s arguable whether the very end of the Friday session, up close to the bell from
$1.35 to $1.45 was overbuying and therefore unsustainable tomorrow, but even if CDB can’t
hold its absolute best prices from last week it’s still an impressive performer all of a sudden.
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Now for a couple of notes on today’s CDB, the NR last week and thoughts on the price action.
They’re going to tumble out in semi-random order but whether connected or not, they’re all
things I’d like to get across at this point.
It’s been understood for a while that CDB needs to raise some cash, as although it’s getting a
free ride to Feas Study level at San Matias it’s short of cash for its own working capital purposes
(cover G&A etc). Previously I’d taken cues from jungledrums and assumed CDB would raise a
modest $1.5m or so, enough to keep its corporate entity running into 2018. I’m now assuming
the placement will be somewhat larger at perhaps $3m or even $5m.
As alluded to in that blog post last week, I’m keenly aware that there are now larger funds and
players interested in taking a stake in CDB. It wouldn’t surprise me to see them take large
chunks of any upcoming placement. It was also likely the people looking to take chunks of CDB
(no names no packdrill) tried to reel in the price in order to get a better entry on the
placement, which is why the move back up on Friday is so interesting. That treading pattern
shows me the stock isn’t behest to the normal Canadian games played by the larger pockets
there, CDB has suddenly become a very popular issue.
We need to stress, and stress clearly, that the bonanza eye-popping grades returned by the
drillbit in last week’s NR are unproven as far as mineable mineral, resource, reserve, ore,
whatever else you’d like to call it. We don’t know much about the hit, whether it’s a vein of that
thickness, or normally much thinner and the drill hit lucky, or whether it’s a one-off and not
continuous, or part of a larger system or not. It’s one hit, which could be anything and then
again, could turn out to be nothing.
With that “could be anything/nothing” comment now in place, we come to the most important
aspect of what happened last week. There’s nothing like an eye-catching discovery hole to
attract attention to your project and last week’s from CDB has opened the door to a whole new
audience. It’s one thing for a guy like me to say “Hey Everybody! Check this out because
Alacran is only the beginning and there are more targets and the geology promises much
and...and...etc etc”, quite another for a new audience to come in and discover all that for
themselves. There are a whole bunch of new people looking at CDB now and they’re the type of
investor smart enough to understand that fabbo gold hit may or may not be a big new thing,
but they’ve also taken a closer look at the wider San Matias project and like what they see.
That’s the new competition for shares and that’s what pushed CDB back up into the $1.30s
range (and eventually $1.40s) on Friday, it’s not just “the usual suspects” buying this stock.
Partly for the reason that Alacrán is showing unexpected and excellent gold values from last
week’s NR, but more because the company stock is now in the limelight, I’ve been mulling over
promoting CDB.v to “Top Pick” all this weekend. It’s a close run thing, but for the time being
I’m going to keep it where it is because I suspect its price may consolidate a little lower next
9

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week or when the company announces its modestly sized placement (which I expect sooner
rather than later, they’re really running on fumes now).
Finally, for a good view of how the company sees CDB at San Matias today and what that big
flashy gold hit might mean, check out the video of Joe Mazumdar interviewing CDB’s VP Expl
Chris Grainger at Roundup last week on this link, it’s a pretty good overview of the company (6)
and Alacrán. If you want to skip to the part where they discuss the brand new gold hit, that’s
around minute 5:05 onward. The only slight error comes right at the end, where Mazumdar
says HPX is funding San Matías to Pre-Feas stage. In fact they get to ride on HPX’s coattails to
full feas. And by the way Mazumdar isn’t a particularly short guy, it’s just that Grainger is very
tall. I mean, I’m pretty tall at 6’2” but Grainger towers above me.
To sum up, last week’s news from CDB was impressive on its own, but it seems to have acted
as a long-overdue catalyst and attracted new and very welcome attention to the stock. The
stock price has busted out and though I find it difficult to estimate whether the next five days
will see it go up or down, what I can say is that we’ve entered a new chapter in the stock. I’m
seriously considering promoting CDB to Top Pick status now, though will wait a few days and
perhaps the advent of a market calming placement to make that call. Hold on tight, folks.
Stocks to Follow
With eight winners (BTO.to, REG.v, TK.v, WDO.to, CDB.v, SAM.to, ATY.v, R.to) and six losers
(SAND, EXN.to, ROM.v, RRI.v, LRA.v, FCV.v), at first glance it looks like a neutral week for the
portfolio. But things were much better than than as the eight winners included all the higher
weighted stocks (apart from Sandstorm) and some of the winners were big ones, unlike the
small scale of the losers. The top performer last week was the big move in Cordoba Minerals
(CDB.v up 55.9%) and that one sure steals the limelight, but the moves in Top Pick Regulus
Resources (REG.v up 13.8%) and the newly active Tinka Resources (TK.v up 10.0%) were no
small beer, either.
We currently have 14 open positions on the ‘Stocks to Follow’ list, one less than our self-
imposed maximum number at any given time. Ten of the positions are in the green, one is
unchanged, three are in the red.
company Ticker this week Avg Price Reco date Current PPS Gain/Loss% Notes
TOP PICKS
B2Gold BTO.to STR buy C$2.11 12-sep-14 C$3.88 83.9% tgt $5.30 Top Pick prod.
Regulus Res REG.v buy C$0.64 06-apr-15 C$1.65 157.8% LT exploreco top pick
Long positions (in current order of preference)
Sandstorm Gold SAND STR buy U$3.80 17-apr-16 U$4.31 13.4% $7 tgt IKN378, good Q4
Tinka Res TK.v buy C$0.195 19-apr-16 C$0.33 69.2% Waking up at last, can go higher
Wesdome Gold WDO.to hold C$1.72 22-may-16 C$2.64 53.5% Will sell at $2.88
Cordoba Min. CDB.v STR buy C$0.73 15-sep-16 C$1.45 98.6% Moving to Top Pick
Starcore Intl SAM.to part sell C$0.61 10-jan-15 C$0.61 0.0% ex-Top Pick, reducing position
Excellon Res EXN.to buy C$1.71 09-oct-16 C$1.83 7.0% $3.13 tgt, Ag growth story
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$0.29 -6.5% 75c tgt, bot more IKN400
Riverside Res RRI.v buy C$0.39 27-jun-16 C$0.44 12.8% Added IKN380, 60c tgt
Red Eagle Min. R.to STR buy C$0.71 13-dec-16 C$0.85 19.7% Big growth potential
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$1.10 -4.3% solid biz model
Focus Ventures FCV.v SELLING C$0.23 01-jul-12 C$0.05 -78.3% Throwing in the towel
Short positions
None at present
10

,
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:
Focus Ventures (FCV.v): Selling. I should have done this months ago, but after holding out
from doing the right thing for far too long last week’s news (7) was the straw that broke this
camel’s back. One of my worst trades ever and by a nautical mile the worst open position on
the ‘Stocks to Follow’ list for months on end, I’ve hung in on FCV for two reasons:
1) Loyalty to its president David Cass, the type of geologist you want to back. Smart,
straight-shooting, miles better than the average rockbrain.
2) The understanding that it had its financial position under control after renegotiating its
debt deal with Sprott USA (Rick Rule)
In one fell swoop FCV blew both out the water last week.
Strike One: David Cass decided to step down and be replaced as President by one Gordon
Tainton who is apparently qualified and experienced in the international fertilizer markets.
Which is nice for him I’m sure. As for reasons, we got this from FCV chair Ridgway:
“It has become clear from discussions with potential partners in the fertilizer industry
that the Company would benefit greatly with leadership from an expert in fertilizers with
the knowledge to know the value drivers in this industry”
Calling this a lame excuse is calling Donald Trump “occasionally in the news”.
Strike Two: FCV runs an extremely dilutive placement:
“Private Placement
The Company announces that it proposes, subject to stock exchange approval, to
complete a non-brokered private placement financing of up to 80 million units at $0.05
per unit, for proceeds of $4.0 million. Each unit will consist of one common share and
one full warrant, each full warrant entitling the holder to purchase one additional
common share of the Company at $0.10 for five years from closing.”
160m papers? And the warrants on a five year expiry? To cut to the chase, even if FCV under
its new President Tainton manages to close the type of JV deal it’s been seeking for the last
couple of years, upside is crimped to a perhaps a double if we’re lucky, not the type of potential
reward I want from a pennycrapper. The size of the placement also infers the entry of some
new player to the company and it wouldn’t be a massive surprise to find out Tainton is being
sponsored by the new money. It’s not one red flag too far, it’s several.
FCV has been my portfolio’s lame appendage for far too long and as at least some of you know,
one of the reasons I’ve kept it there at the bottom of the table is for its constant reminder, an
ego check that sometimes in the crazy world of juniors you don’t just get trades wrong, you get
them way wrong. I had every intention of staying on board and hoping (yup, sorry, it’s the only
verb that fits) it could pull a deal out of the fire but last week’s news changes everything. I’ve
hung in before when FCV moved from hard rock exploration to the phosphate project and that
was against better judgement (one of the golden rules is “when a story changes, get out” and I
broke that rule, to my own cost. But this week’s pivot is a twist too far, I can no longer condone
the way FCV is shape-shifting its share structure once again and will now do what a better
investor than I should have done a long time ago, next week I will sell my shares in FCV and
cauterize this utter failure once and for all. For what it’s worth I will wait a couple of days
before selling at the remnant price I’m bound to receive as being 80% down or 90% down
11

,
doesn’t really make much difference at this point.
Wesdome Gold (WDO.to): Weird. Just a week after announcing guidance that put 2017
production between 52,000 and 58,000 ounces of gold (here’s the chart from last week’s anal
ysis)...
2017 max
Oz Au WDO: Gold production per year 2017 min
60000 6000
55000
50000
45000
40000
35000
30000
25000 52757 50470 47737 52000
20000
15000
10000
5000
0
2014 2015 2016 2017est
source: company data
...the same company comes out with a whole bunch of very impressive drill results (8) with a
highlights reel that looks like this...
• Hole 844-E-26 7.08 gAu/t uncut (5.86 gAu/t cut) over 8.88 m true width
• Hole 844-E-27 28.72 gAu/t uncut (19.03 gAu/t cut) over 20.67 m true width
• Hole 844-E-28 20.75 gAu/t uncut (13.36 gAu/t cut) over 17.94 m true width
• Hole 844-E-29 89.61 gAu/t uncut (24.60 gAu/t cut) over 3.93 m true width
• Hole 670-131 10.35 gAu/t uncut (10.35 gAu/t cut) over 4.32 m true width
...that includes impressive widths and grades way above the 8g to 10g per tonnes typical for
this mine and elicits this type of commentary from WDO CEO Middlemiss:
“These results contain potential widths of up to 20 metres and are unprecedented at
Eagle River. The current proximity of these intercepts to mine infrastructure coupled
with the sheer volume of high grade mineralization will potentially have near to mid-
term positive production implications. Furthermore, the presence of these structures
give rise to the possibility of additional zones of similar size and grade, as well as bulk
mining opportunities at Eagle River."
As seen in this ten day chart WDO’s share price popped hard on this news and quite right too,
this is certainly good news and will
improve the production profile of Eagle
in the near and medium-term future.
But it’s strange to see guidance moved
in such a de facto way just one week
after the official 2017 number is laid
down. Taking all things into
consideration, including the way WDO
moved higher on this news but hardly
zoomed into the stratosphere, I’m still
happy enough about sticking to the
current plan and selling at my assigned
$2.88. Assuming the sale proceeds, I’ll
reinvest the cash in companies that I
consider have a better risk/reward
profile at current prices, but first things
first and let’s see if $2.88 gets taken out.
12

,
Starcore Intl (SAM.to): I finally sold some of shares I want to lighten in SAM at 61c last
week, though there are more to shed (and with a little luck, at higher prices). The other
development, noticed by readers as well as I, was the continued insider buying of CEO Robert
Eadie. Here’s the latest (9), updating from the same message a couple of weeks ago in IKN400:
Those top three lines are the new ones, they add up to a total of 250,000 shares bought and
means CEO Eadie now owns 1.99m shares, 710k more than just before Christmas. You kind of
get the feeling he knows something. I kind of get the feeling I may have started lightening this
position a little too soon, but whatever happens I’m still going to own some once I’ve sold all i
want to sell; my position got bloated compared to my overall portfolio, that’s the thing.
Regulus Resources (REG.v): We got the news we were looking for last week when the
company announced the main Coimolache Definitive Agreement had been completed (10).
There’s still a little paperwork left to do, as the whole joint working arrangement is dependent
on the separate Colquirrumi agreement being completed too, but CEO Black assured us all in
the NR that there are no impediments to that happening and all is set fair. We also got
confirmation on the information about the timing for drilling, the program is indeed set to kick
off in March. Here’s what CEO Black said on that:
“We now look forward to an aggressive exploration program in 2017 with a 15-18,000
meter drilling program scheduled to commence by early March. Additional details
about the exploration program will be announced after signing the definitive
Colquirrumi agreement."
In trading, REG.v was a star yet again, up strongly on good buying interest. As noted last week,
we’re now close to the top of the current trading range for the stock, up to this point it’s tended
to range between $1.15 and $1.65 or so. There’s no way in the world I’m going to get cute and
trade the channel though, this one is for keeps.
B2Gold (BTO.to): Another week of radio
silence...c’mon The Clive! Meanwhile in
trading BTO had another successful week,
trading up on good volume especially on
Thursday. I heard from kind reader ‘DR’ that a
newsletter writer I’d never heard of before
called Larry Edelson reco’d BTO to his
subscriber list. Apparently Edelson is a big
name in the world of letters...perhaps I need
to pay a little more attention. This chart is the
2017 YTD on BTO.to (i.e. January) and
although it’s far from the only mining stock to
present this type of positive performance in
the last four week, it’s sure good to have your
13

,
Top Pick as one of them. We await the 4q16 production numbers, hopefully this week coming.
Sandstorm (SAND): SAND was the weak one among my suite of larger sized positions, as
even though it never looked like breaking under U$4 it didn’t get much love or volume. I don’t
know why, though Mariana did trade badly, it could be that.
Tinka Resources (TK.v): Last week on these pages the please was for “more please” from
Tinka after its excellent breakout run of the week before. The good news is that there was
indeed more, TK up another 10% and most
importantly (for my eye) the volume was
good as well, with half a million traded on
both Monday and Tuesday, all other days
over the 100k barrier. This makes TK
tradable, we want this to continue.
In other news, word reaches this desk that
TK.v is planning an analyst site visit for the
third week in February. Sadly I won’t be
able to make that trip personally as I’m
taking my kids to the beach for a few days,
hotel booked and all the trimmings, but it’s
great to hear TK both opening up for new
eyeballs at Ayawilca and that there’s anal
yst interest to get up there and see the goods. I’m sure they’ll approve of what they see,
especially when they get a feel for the size of the land package owned by TK and its
prospectivity away from the current known resource areas.
Red Eagle Mining (R.to): A NR out Monday (11) gave me just what I was looking for last
week in IKN401, a nice little update on commissioning and the ramp-up towards commercial
production. Thre was plenty of information about achievements achieved and landmarks
marked, but the most interesting bit came at the bottom of the NR and this short paragraph:
Commercial production of 750 tonnes per day is anticipated to be achieved by the end
of Q1 2017. As at December 31, 2016, Red Eagle Mining held $4 million in cash and
is managing working capital while advancing to positive cash flow in the coming
months.
Two things there:
1) “End 1q17” for commercial production is perfectly acceptable, but it is perhaps a month
slower than the timeline whispered in your author and other people’s ears during the site visit in
November. As long as it hits by end 1q17 we should be fine, I wouldn’t want it dragging on any
further though.
2) The cash treasury of $4m as at end December 2016 could be a bit tight. Please note the
word “could” there as this isn’t a confident prediction of mine, more of a logical possibility that
R.to may get short of ready cash before it goes free cash flow positive. Consider the following:
• R.to had $8m in cash on December 3rd 2016 (we know that because the company said
so in its corporate presentation of that date)
• Four weeks later that cash was down to $4m. Now I know R.to was still spending on
certain late-stage capex things in December (e.g. cement works for non-essential
builds), so not all that is operating burn, but I’d guess they’re spending between $1.5m
and $2m a month on running the mine now.
• Therefore the ballpark is that they need to get to end March, three months and
potentially $6m of burn, with $4m in the bank.
• R.to has already produced during this pre-commercial ramp-up (which is good, the
machine is working) and they’ll be able to sell that gold. Let’s call it C$2.5m worth
14

,
net/net.
• They’ll also produce and sell more pre-commercial gold between now and end-March.
As commercial run rate is likely to be set at around 3,500oz per month, I’d like to see
another 3,000oz produced in the two months to the declaration of commercial
production. Of those, they’ll probably have time to sell at least a thousand of the
ounces, perhaps 1.5k. In ballpark terms there’s another $2m there.
So as long as things go to plan, R.to probably goes Free Cash Flow positive with a $2m cushion
and won’t need to raise funds via other means. But that’s all I’ve got, probably, it’s by no
means certain and there are a couple of tight weeks in the pipeline, I’d guess. Therefore, and
considering that R.to has already made it plain it wants to reduce its financial debt load (likely
via refinancing), it wouldn’t come as the greatest shock to me to see the company run an extra,
top-up placement before it hits 100% speed at San Ramón in order to give the balance sheet
some breathing space.
The Copper Basket
After four weeks of 2017, The Copper Basket shows an 18.32% gain to level stakes.
company ticker price 1/1/17 Shares out Market Cap current pps gain/loss%
1 Imperial Metals III.to 6.06 93.587 649.49 6.94 14.5%
2 Capstone Min. CS.to 1.26 382.04 557.78 1.46 15.9%
3 NGEx Resources NGQ.to 1.20 205.06 272.73 1.33 10.8%
4 Western Copper WRN.to 1.86 94.19 163.89 1.74 -6.5%
5 Copper Mtn CMMC.to 0.94 118.8 136.62 1.15 22.3%
6 Excelsior Min. MIN.v 0.63 167.364 128.87 0.77 22.2%
7 Cordoba Min. CDB.v 0.73 86.86 125.95 1.45 98.6%
8 Regulus Res. REG.v 1.20 68.368 112.81 1.65 37.5%
9 Atico Mining ATY.v 0.95 97.59 90.76 0.93 -2.1%
10 Coro Mining COP.to 0.15 483.425 87.02 0.18 20.0%
11 Copper Fox CUU.v 0.125 417.64 71.00 0.17 36.0%
12 Trilogy Metals TMQ.to 0.66 104.33 68.86 0.66 0.0%
13 Amerigo Res ARG.to 0.345 173.61 68.58 0.395 14.5%
14 Nevada Copper NCU.to 0.77 80.5 65.21 0.81 5.2%
15 Revelo Res. RVL.v 0.070 128.486 7.71 0.06 -14.3%
NB: All stocks priced in CAD$ Portfolio avg 18.32%
Another strong week for our Copper Basket, adding nearly 10% to the overall average (the
2017 tracking chart makes its debut this
weekend) to cap off a strong first month of the The Copper Basket 2017, weekly evolution
year for copper in general and several of the
20%
chosen names above in particular. On the week
we had a big eleven winners on the list (CS.to, 15%
WRN.to, CMMC.to, MIN.v, CDB.v, REG.v, ATY.v,
COP.to, TMQ.to. NCU.to, CUU.v), two 10%
unchanged stocks (ARG.to, RVL.v) and just two
5%
weekly losers (III.to, NGQ.to). Some big
winners in the group too, starting with
0%
Cordoba’s massive move (CDB.v up 55.9%) and
Jan1st jan8th 15th 22nd 29th
ably backed up by Copper Fox (CUU.v up source: IKN calcs
17.2%), Regulus Resources (REG.v up 13.8%),
Capstone Mining (CS.to up 10.6%) and Coro Mining (COP.to up 9.1%) is also worthy of
mention.
This good performance was underscored, as you’d expect, by a rising copper price. However
15

,
the metals couldn’t hold on to its best prices midweek
and once again failed at the early $2.70/lb level. Major
factors for copper’s decent performance were 1) a
slight weakening of the dollar (making commodities in
general more expensive in dollar terms, not just Cu)
and 2) supply crimp talk from both Chile and Peru. As
expected (see IKN401 Regional Politics) the potential
for a strike at La Escondida was front and centre and
we’re bound to hear more on that in the week ahead.
But there are new bottlenecks due to severe weather
conditions in South Peru and Chile with weather
conditions this neck of the woods blocking roads and
even making international headlines...for a minute or
two at least. Yes I’m bored with the rain and it’s also
playing havoc with my internet connection, thanks for
asking.
Now for the regular weekly copper warehouse
inventory bullets:
• Total world stocks levels moved higher last week on an influx into the SHFE system
warehouses, which was big but is also a pretty typical move in the days before Chinese
New Year. World stocks stood at 566,863 metric tonnes (mt) on Friday evening, up
30,999mt (+5.8%).
• SHFE Shanghai warehouse inventories exploded higher, up 39,946mt in the week
before China closes down for it’s New Year celebrations (Rooster, started yesterday).
That’s a rise of 23.1% in stocks on the week and leaves inventories at 212,925mt.
They’ll stay exactly there for a week and little changed for a couple more, then the real
action begins.
• LME inventories dropped 11,625mt (-4.2%) on the week to close at 263,775mt. Fairly
likely that most of that shift was to SHFE warehouses on an arbitrage deal, same as we
saw last year.
• And Comex stocks break into a nine handle, up 2,678mt (+3.1%) to close the week at
90,163mt. At what point will this upward curve make comment in the trade papers?
Here’s the Shanghai-only chart, showing the breakout move over 200k on the far right, just in
the nick of time to make my December call look sparkling and wonderful. We’ll do the monthly
update charts next week even though February 5th is a little late for “end month”, because what
with China now closed for vacations there won’t be much difference between now and then.
Shanghai Futures Exchange Warehouse Stocks, Dec'13 to date
400000
350000
300000
250000
200000
150000
100000
50000
16
ht5naj ht9 ht61 ht02 ht52 ht92 dr3gua ht7 ht21 ht61 ts12 ht52 ts1ram ht5rpa ht01 ht41 ht91 dr32 ht72 ts1von ht6ced ht01 ht41 ht02 ht42 ht92 dr3luJ t7guA ht11 ht61 ht72 ts1naJ
Mt Cu
source: Cochilco

,
This week, notes and thoughts on just two of our basket stocks:
Trilogy Metals (TMQ.to): Want a “Trump Play” in copper? Try this one. Northern Dynasty is
just a stupid overcooked pump on a deposit that will never work, permit papers or not. On the
other hand, this one has excellent grade that makes economics on paper sparkle, its problem is
the permitting of a road to join its part of the GWN to the outside world and that people who
live up there oppose the idea of splitting the wilderness in two with asphalt. We’re now in an
admin that promises to loosen up on environmental permitting matters and we’re not just
talking theoretically about Pebble, the Keystone XL pipeline is now hard fact. As we know the
people behind TMQ are always keen to pump their stock hard, it wouldn’t take much for Rick
Van Alphabet or the Kaplan crew to bung Marin a hundred grand and see this one get pumped
to the rafters as well.
Amerigo Resources (ARG.to): The only reason I can think of for ARG.to managing to stay
UNCH on the week was a market that didn’t
ARG.to: Copper sales
look at its rotten 4q16 production news
18
release (12), or if i did it didn’t realize how
16
bad it was. Here’s the copper production
14
chart:
12
10
Now for sure we’re up on the 2014 and 2015 8
numbers, but Q4 production came in low 6
compared to recent quarters and sales at 4
13.417m lbs Cu were poor. That’s likely due 2
to the approximate two week stoppage at 0
the plant due to workers’ wage claims. This
is not an insignificant matter, as ARG has
invested in a production upgrade and took
on significant debt to do so. The idea was that ARG would drop its cash costs thanks to newly
won efficiency and so forth, but if we look at the results so far, it’s not that great:
ARG.to: Cash costs/lb and received copper price/lb
(GCTP = Gross Tolling Copper Price) cash cost
$m
total cost
3.5 GCTP*
3
2.5
2
1.5
1
0.5
0
1q15 2q15 3q15 4q15 1q16 2q16 3q16 4q16 1q17est
source: ARG data, IKN ests for 4q16
Here we see cash costs, total costs (which include G&A, the royalties it must pay etc) and the
average received price for copper per quarter. Up to
and including 4q16 total costs have been higher than
received price and that means (right) yup, they’re
making a loss every quarter. As for 4q16, we now the
basic cash cost because they told us last week
($1.87) and as ARG total costs are typically 60c/lb
higher than its recorded cash cost (operating cash
cost), we’re looking at a true production cost of
around U$2.45/lb. As my best guess for an average
copper price in 4q16 is U$2.38/lb (see ATY.v last
week) it means that if ARG.to is lucky, and only if its
lucky, will it break even this quarter. It’s likely a loss.
17
11q1 11q2 11q3 11q4 21q1 21q2 21q3 21q4 31q1 31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4
source: company filings
rtq/uC
sblM
ARG.to: Gross profit
$m 1q15 2q15 3q15 4q15 1q16 2q16 3q16
0
-1
-2
-3
-4
-5
-6
source: company filings

,
The world seems to be relying on the fact that ARG should get average costs down in 2017 and
with copper prices now higher, it returns an operating profit. I’ve modelled that in the 1q17
estimates above and if it works (I’m guessing a 30c margin on total costs) they could return a
pre-tax profit of around $4.5m. However it’s far from certain and we need to recall that ARG
has a big debt it needs to pay off these days.
Liquidity is fine at $21m as at 3q16, but ith a negative working cap (of around $1m) and
financial borrowings of over $63m as at 3q16, ARG was supposed to be turning a profit by now.
It’s not and as the clock is now ticking on repayments (this from the Financials)...
Interest is paid semi-annually starting on June 30, 2015. The Cauquenes
Expansion Loan has a maximum repayment term of 6 years consisting of 12
equal semi-annual principal payments of $5.4 million, commencing on June
30, 2016.
... this isn’t one I’d rush to buy if you want a small copper producer Atico (ATY.v) is really
profitable (not theoretically), has its debt repayments nicely under control, has exploration
upside and just makes miles more sense. People looking at the rise in the copper price as their
signal to buy anything copperish that moves have pushed ARG.to from a reasonable (under the
circumstances) 25c to today’s 40c or so and a $68.5m market cap. They’re wrong, it’s not worth
that much. Avoid.
The Producer Basket
After 4 weeks of 2017, the Producer Basket shows a gain of 12.34% to level stakes.
company ticker price 1/1/17 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Barrick ABX 15.98 1165.33 20.73 17.79 11.3%
2 Newmont NEM 34.07 530.595 18.24 34.38 0.9%
3 Goldcorp GG 13.60 832.381 13.12 15.76 15.9%
4 Franco Nevada FNV 59.76 178.01 11.19 62.85 5.2%
5 Agnico Eagle AEM 42.00 223.475 10.26 45.92 9.3%
6 Ang/Ashanti AU 10.51 405.27 4.86 12.00 14.2%
7 Royal Gold RGLD 63.35 65.281 4.60 70.48 11.3%
8 Kinross Gold KGC 3.11 1245 4.49 3.61 16.1%
9 Buenaventura BVN 11.28 254.19 3.38 13.31 18.0%
10 Sibanye Gold SBGL 7.06 228.71 1.96 8.56 21.2%
Prices in U$, NYSE or NASDAQ tickers Portfolio avg 12.34%
It’s the type of lead that can be snatched away in the twinkling of an eye, but the 1.35% that
our basket has taken out of the GDX
benchmark so far is a good start and going in The 2017 Producer Basket: Weekly performance and
the right direction, too. On the week there 14% comparative to GDX control
were seven winning stocks in our basket (ABX, 12%
basket
GG, AEM, RGLD, KGC, BVN, SBGL) and three 10% gdx control
losers (NEM, FNV, AU) and while most traded
8%
at-or-around the GDX average +0.4% of the
6%
week, the moves in Sibanye (SBGL up 4.1%)
and the suddenly in-fashion Goldcorp (GG up 4%
2.5%) stood out. To the downside, Newmont 2% source: Google, IKN calcs
(NEM down 1.9%) again traded softly 0%
compared to peers and is now only just above Jan1st 8th 15th 22nd 29th
breakeven for the year, at least 10% behind
its direct rivals. ABX is back above the bragging-rights U$20Bn market cap level.
18

,
Buenaventura (BVN): By way of a quick update on last week’s BVN note and to make timing
more transparent, BVN last week officially inaugurated (13) its new Tambomayo gold mine in
Arequipa region (not so very far from Fortuna Silver’s Caylloma mine up in the Andean foothills,
to give a rough idea of geography). This doesn’t mean we’re at commercial production levels
yet of course, but that’s just a matter of time. According to the BVN releases, Tambomayo cost
U$362m and three years to build and will produce between 140k and 160k oz gold per year,
along with Ag Zn and Pb by-product kickers.
Sibanye Gold (SBGL): It it deja vu all
over again? Those of you around these part
in the first months of 2016 will surely
remember how SBGL started its year in fine
fashion and streaked ahead of the pack in
the first two months of the year, only to
fade badly in the second half of the year
(and particularly Q4). Here we are near the
end of January 2017 and once again SBGL
is the best-performing stock in our basket.
Regional politics
The big beautiful wall
The biggest news of the week in the LatAm region wasn’t in fact in LatAm, but a few metres to
the North of the region’s upper limit. Donald Trump campaigned on building a wall between
The USA and Mexico and getting Mexico to pay. In his first week in power he seems to have
surprised and shocked the political world by....signing an executive decree to build a wall
between The USA and Mexico and then saying that he’ll get Mexico to pay. Now this may be a
joke policy on many levels, but at least the world knows he wasn’t joking. But I’m not here to
add to the political noise up North, the job is to note reactions here down South (the title of this
section is “Regional Politics”, after all) and here come the interesting ones:
The main issue isn’t Trump building a wall, in general Mexico recognizes The USA is free to do
whet it wants on its side of the border (and of course Mexico has already built its own
containing wall on its border with Guatemala) but it’s affronted to the point of insult by Trump
saying Mexico will pay for the civil works project. That’s the reason why Peña Nieto cancelled
on Trump. As the trade balance between the two countries favours Mexico on paper at least
(Trump is right when he states there’s a US trade deficit with Mexico of around U$60Bn per
annum; it’s $290B one way and $230Bn the other) the facile implication is that Mexico is
negotiating from a position of weakness. However countries aren’t “deals”, corporate culture
has nothing on national culture and the dumb (no other word comes to mind) way Trump is
treating this is a personal reminder as to the only reason why I’d have preferred Hillary Clinton
as President (see Weekly intros passim), US Foreign Policy is really the only thing that ever
affects me personally, Trump has messed up clumsily on his first foray into the arena as
President. In fact I suspect he may not even realize how much of a blunder he’s made yet,
which is even worse.
Running from that, the next point: Mexican President Enrique Peña Nieto has been under the
kosh for many months and one of the reasons for his dropping approval ratings in Mexico was
the way he was seen to have been played by Trump on the wall issue during the campaign. He
was even hesitant to make a firm declaration in the face of the decree signing, but the next day
when he announced (or was induced by further Trump taunting, your call) he was not
attending the programmed meeting at the White House this week he suddenly galvanized
19

,
cross-party support from across Mexico. He’s also remained reasonably diplomatic about it all is
his style (I would have loved to see Vicente Fox as President right now, not just a loud political
voice) but the way in which Mexico as a nation has lined up behind him in support has been
most interesting; patriotism cuts both ways, Mr. Trump. Most notable of all were the words of
Carlos Slim. Who has had his own comings and goings with Trump over the years (they’ve
crossed words and been friendly in turn, with the last round being friendly after Slim dined with
Trump at Mar-a-Lago and Trump called him a great guy afterwards). Slim held a rare presser
for Mexican media and here’s how Reuters reported on that (14):
Mexican billionaire Carlos Slim said on Friday a united Mexico was ready to help the
government negotiate with Donald Trump and called on all political parties to support
President Enrique Pena Nieto in his discussions with the U.S. president.
In a rare news conference by the generally media-shy mogul, Slim said Mexico needed
to negotiate from a position of strength, noting that Trump, who he called a "great
negotiator," represented a major change in how politics is conducted.
Slim’s position, that of political diplomacy and leaving the door open for a “deal” with Trump,
grew widespread praise in Mexico and fit with Peña Nieto’s preferred non-aggressive stance.
In short the Mexican response has been to make plain the national-level insult it feels, but leave
the door open for talks. In other words mature and responsible and most interestingly, that was
echoed by two strategically important countries in the region (for the USA at least), Colombia
and Peru. On Friday Presidents Kuczynski of Peru and Santos of Colombia met in Arequipa Peru
for the “Third Bi-National Peru-Colombia Cabinet Meeting” (see below for more) and part of the
declaration made by the two Presidents afterwards went like this (translated):
“...it is fundamental to find room for dialogue and agreement in order to promote the
type of free trade that has created prosperity in the global system over many decades.”
As well as that quote, the two Presidents in the press conference afterwards said that they had
requested a virtual summit of heads of the Pacific Alliance trading block (namely Chile, Peru,
Colombia and Mexico) in the next few days in order to “reflect on current challenges”. All this
caught the eye of press corps and diplomats alike (15), because even though nobody said the
words Mexico USA it was a clear allusion to the spat being generated by the big beautiful wall.
Bottom line: So far the official response from the South about the big beautiful wall (and more
precisely the payment method for it) has been measured in tone but clear. EPN’s decision to
cancel his trip to Washington is all you really need to know, but so far he hasn’t gone the
populist route and wrapped himself round the flag. The interesting one has been the support
he’s gathered from inside Mexico and also from countries The USA considers its regional
friends. The Pacific Alliance has considerable political weight, being the countries The USA
wants on its side in LatAm (and the counterweight to the left-leaning Mercosur) and to see both
Peru and Colombia express diplomatic but obvious support for Mexico is unlikely to be
something the new Trump administration had in their calculations. Add in the whole NAFTA
issue and then how Canada relies on LatAm support and good favour for its mining incursions
into the region and there are potential mid-term repercussions for The Americas, too. May we
live in interesting times.
Peru and Colombia sign mining agreements
On Friday 27th January, the city of Arequipa in the South of Peru played host the “Third Bi-
National Peru-Colombia Cabinet Meeting”, a now regular meeting of the two countries at
ministerial level (it started in 2015) at ministerial level that was headed up by the respective
Presidents, Pedro Pablo Kuczynski of Peru and Juan Manual Santos of Colombia. It was a
friendly and apparently fruitful day-long meeting and at the end of it all, as it normal on these
occasions, came a series of declarations on several matters of political policy and economic
agreements. One has already been mentioned in the previous article, so here we’ll cut straight
to our focus sector of mining and on Friday the respective Minister of Energy and Mining
(Gonzalo Tamayo of Peru, Germán Arce of Colombia) signed agreements to co-operate in
20

,
mining matters such as helping the formalization processes of small mining concerns, socio-
environmental management, the formation of a bi-national working group that would co-
ordinate between the two countries and meet on an annual basis. As for a soundbite, here’s
what Peru’s Minister Tamayo said (translated) (16):
“The principal objective is to exchange policies and experiences for the
formalization of small-scale mining in both countries, as well as share on best
practices, correct use of resources and the reduction in the use of mercury”.
What does all this mean? In short, it’s good news for Colombia. For sure there are plenty of
things Colombia can teach Peru in other economic sectors, but when it comes to mining we
have one country with a wealth of formal, scale mining experience and another that’s still in its
formative years, but with plenty of governmental level will to get it right. There are no perfect
role models and give me a couple of minutes and I’ll be able to rattle off a list of things that
annoy me about the way Peru runs its mining industry, but it’s certainly better than most out
there and can undoubtedly help Colombia along its own learning curve. At present the
covenants are aimed mostly at a twin problem, that of small informal/illegal mining (both
countries have plenty) but seeing a formal channel for mining dialogue between these two can
only help Colombia improve its own jurisdiction, either learning from the things Peru does well
or learning from its previously made mistakes.
Chile: La Escondida update
Last week we ran over the scenario of the salary negotiations between management and unions
at La Escondida, the world’s largest single copper mine. Since then we’ve had developments
and so far at least, they’re on the track we laid out:
• We had management improve the offer
• We had the unions scoff at the offer and instruct their members to vote it down
All to plan and the voting is going on now (it’s over a number of days) and the results will be
announced on February first. It’s at that point the second and more important part of last
week’s forecast is due to kick in, it went like this:
• Strike preparations are made
• Management and unions reach an improved offer in last-ditch talks early February
• The new offer is accepted, no strike happens, but not after bizwires make the most of
the whole situation and try to drum up copper supply fears in the market.
I still expect a last minute deal to be struck and no strike at La Escondida, or if there is one it
lasts for a day or two maximum and no harm is done to production levels.
Market Watching
Presentations at the Whistler Conference
I was sent this mail by kind reader MS, I think it may be useful for some in this audience too so
here you go:
FYI. I thought I would share with you. CIBC had its annual Whistler
conference this past week and several companies you discuss
frequently including Tahoe, Kirkland Lake, Continental Gold, Capstone
and several others have webcasts available online. Enjoy!
CIBC Whistler Conference (January 25-27, 2017)
https://webcasts.welcome2theshow.com/cibcwhistler2017
21

,
What you need to do is:
1) Paste that link into your browser (it’s also here (17))
2) Add your name and e-mail address into the box when it shows and hit return
3) You’re there. And it’s free (though I don’t know how much spam they’ll send you now
they have your mail address, for me it won’t get any worse as they have mine already)
4) You can then click on any one fo the dozens of links to watch the videos of the
presentations and round tables provided.
There are several other names from the mid-cap and large miner sectors than the one
mentioned by MS, too. Good source material, consider the message passed on.
Riverside Resources (RRI.v) 4q16 and year-end financials
On Wednesday evening Riverside Resources (RRI.v) filed its year end financials (its financial
year closes September 30th) and the results can be summed up by “Boring Is Good”. Yes
indeed, it’s not always fascination
RRI: Expenditures breakdown
and fun in the world of balance
0.7 (ex-impairments/write downs)
sheets and statements of cash flows
0.6
☺, but the type of numbers RRI
0.5
posts deserve some column inches
0.4
all the same because they epitomize
0.3
the way a well-run and efficient
0.2
junior should go about their work. To
0.1
that end, a few sample charts
0
generated from the spreadsheet.
-0.1
Here right is how RRI’s expenditures
break down, with 4q16 (let’s call it
“the September 2016 quarter” from
now on) once again coming in under $400k.
RRI does everything it does for under C$4,500
per day, impeccable use of funds and one of
the reasons it has managed to keep its share
count tight over the years
Feeding on from that, the overall net loss chart
(below right) once again came in negative, i.e.
a “negative net loss” means it made a profit.
This is the Prospect Generator model done
correctly, officially speaking to this day a non-
producing “exploration stage enterprise”
company but due to the deals it cuts with
partners on its properties it generates income.
Over the course of FY16 RRI posted a $0.763m
profit, with the main reason for this result the
$1.1m brought in from the deal with Croesus
Gold on the Sugarloaf Peak project.
Over at the balance sheet, the solid numbers continue. Here’s the overall assets chart...
22
31.ceD 41.raM 41.nuJ 41.peS 41.ceD 51.raM 51.nuJ 51.peS 51.ceD 61.raM 61.nuJ 61.peS
$m
share based payments
rent
other
office exp.
source: company filings, IKN ests
RRI: Shares outstanding
50
45
40
35
30
25
20
15
10
5
0
21q3 21q4 31q1 31q2 31.peS 31.ceD 41.raM 41.nuJ 41.peS 41.ceD 51.raM 51.nuJ 51.peS 51.ceD 61.raM 61.nuJ 61.peS
m S/O
source: company filings/IKN ests
RRI: Net loss per qtr
1.5
1
0.5
0
-0.5
31.ceD 41.raM 41.nuJ 41.peS 41.ceD 51.raM 51.nuJ 51.peS 51.ceD 61.raM 61.nuJ 61.peS
$m
source: company filings, IKN ests

,
14 RRI: assets
12
10
8
6
4
2
0
23
31.ceD 41.raM 41.nuJ 41.peS 41.ceD 51.raM 51.nuJ 51.peS 51.ceD 61.raM 61.nuJ 61.peS
$m fixed
ST invest
other st
cash
source: company filings
...and here, isolated from the above, just the “cash” and “short-term investments” (basically
term deposit earning a bit of interest) that together show the liquidity position of RRI.
RRI: Cash and ST investments
7 (liquidity)
6
5
4
3
2
1
0
31.peS 31.ceD 41.raM 41.nuJ 41.peS 41.ceD 51.raM 51.nuJ 51.peS 51.ceD 61.raM 61.nuJ 61.peS
CAD$m
ST invest
cash
source: company filings
While hardly awash with cash, RRI
manages to keep treasury in fine shape RRI: Liabilities
1.1
over the quarters without going to
1
market and selling paper. The $5m at 0.9
0.8
bank compares to the approximate
0.7
$1.2m annual cash burn, so in theory at 0.6
0.5
least RRI could keep on keeping on
0.4
until 2020 without any trouble at all. 0.3
0.2
Over at liabilities, they’ve crept up for
0.1
some reason and are over $1m for the 0
first time in a long time, but as he
working capital chart shows there’s no
problem here, it’s probably a one-off
thing and I know how allergic John-
Mark Staude is to holding liabilities, it should move back down next quarter.
31.peS 31.ceD 41.raM 41.nuJ 41.peS 41.ceD 51.raM 51.nuJ 51.peS 51.ceD 61.raM 61.nuJ 61.peS
$m
source: company filings, IKN ests
7 RRI: Working capital
6
5
4
3
2
1
0
31.peS 31.ceD 41.raM 41.nuJ 41.peS 41.ceD 51.raM 51.nuJ 51.peS 51.ceD 61.raM 61.nuJ 61.peS
$m
source: company filings

,
And that’s it, really. What RRI’s financials offer is a top class demonstration of how to run a
prospect generator company correctly. They keep expenditures tight, the deals they close on its
properties with third parties give RRI income, the share count couldn’t be more shareholder-
friendly and all the time the work being done by its partners offer the chance of the big
discovery and payola. Although to date RRI hasn’t had its big discovery win, the small
successes along the way and its ultra-conservative use of funds has held the company in good
stead. Right now Centerra and Antofagasta are doing the drilling for RRI and you never know
when the discovery hole might turn up. In the meantime, the way RRI is run by Staude and his
team means meaningful downside only happens if we hit a sectorwide downturn. Low risk and
high potential reward are the odds I like, long here and staying that way.
An update on Eros Resources (ERC.v)
Friday afternoon (pre-close) Eros Resources (ERC.v), the tinycap we highlighted in IKN398
dated January 1st (also in IKN399) as a potentially good little trade due to its very strong assets
backbone (its liquid assets book is substantially higher than its market cap), gave us a NR
update (18) which told the world about the recent AGM (all agenda items passed in normal and
boring style) but also told us of an extra equity position it holds. Here’s that part of the NR:
In addition, the Company wishes to advise that it became a reporting insider of Tarku Resources
Ltd (TSX-V: TKU), (“Tarku”), through participation in Tarku’s private placement on June 24, 2016.
Eros acquired an additional 1,300,000 shares of Tarku, bringing Eros’s ownership of Tarku to
3,300,000 shares, representing 12.08% of the then-outstanding shares of Tarku. Tarku has since
issued additional shares, diluting Eros’s ownership to 10.3% of the currently-outstanding shares
of Tarku.
As that’s certainly part of the “other” part of the liquid assets it held as at end 3q16, it gives us
a little more detail to play with so here’s an update of the table we first ran in IKN398 that lists
the liquid assets (cash and third party shares) held by ERC:
Marketable securities held by ERC.v
ticker company shares held* current pps value C$m
HRT.to Harte Gold 2.12 0.325 0.69
SKE.v Skeena 48.69 0.090 4.38
SBW.v Strongbow Expl 1.60 0.135 0.22
TIM.v Toachi 1.00 0.420 0.42
TKU.v Tarku 3.30 0.045 0.15
Canamex debent. 0.25
Other 0.60
Subtotal C$m 6.71
approx ERC cash C$m 4.40
total liquid assets C$m 11.11
Just to be clear, first I’ve changed all share prices to this weekend’s levels. Then to adjust for
the Tarku line item, I’ve subtracted the value of the 3.3m shares at the September 30th price
from its “other” line item (that was over $800k, I previously rounded down), then again
rounded down what’s left of “other” to the $600k you see above. When cash treasury is added
in (adjusted for estimated burn to date), we get to an IKN estimated total marketable securities
+ cash of C$11.11m as at this weekend. Which compares to this:
ERC valuation data (C$m)
Shares out Share price Market Cap
41.87 0.18 7.54
A market cap for ERC.v of C$7.54m, what with ERC.v closing Friday at 18c. That’s a difference
of C$3.57m to its liquid assets, or putting it another way if you gave ERC shares ‘full value’ for
its liquid asset holdings it would be a 26.4c stock right now, 8.4c (46.7%) higher than this
weekend’s cruel reality.
24

,
When ERC was featured in IKN398 it was a 15c stock and I wrote that I’d be interested in
paying 16c maximum. As the stock immediately popped higher than that, has traded to 20c and
is generally an 18c to 20c proposition these days I may have to pay a little more to own some
now (more fool me). I’m still interested
in doing that, as this strikes me as a
good way not only to play the excellent
brains trust at ERC (new CEO Ron
Stewart may be modest to a fault, but
whatever he says he’s still second to
none as a mining brain in this business)
but as a way of playing a basket of
tinycap stocks and getting an instant
premium in doing so.
ERC is small, therefore it’s always going
to be a risky one. But its strong asset
book compared to discounted market
cap makes it one with plenty of upside
opportunity and very limited downside.
At 18c I’m a buyer in the days to come and if I get some, it will become a small but valid
member of the ‘Stocks to Follow’ list.
The three other tinycaps mentioned in IKN398
In IKN399 I wrote that we’ll return to check on progress of these names around PDAC time, but
while I’m here and thinking about ERC I see now reason why we can’t run a couple of lines
right now. The other three we were watching with a potential view to purchase are Angel Gold
(ANG.v), Royal Road (RYR.v) and Calibre Mining (CXB.v):
• Angel Gold (ANG.v): In IKN398 8.5c, in IKN399 9.5c, today 9.5c: ANG hasn’t done
much or moved much in the market and the most notable thing so far is something we
haven’t seen, i.e. news on the closing of its round of financing. If that comes to a
happy ending I’ll get more interested in its nearer-term prospects, as things stand
today it’s still a very cheap way of playing the new love the market has for Colombia
but unless it can attract the necessary working capital, it’s unlikely to move up.
• Royal Road (RYR.v): In IKN398 8.5c, in IKN399 9.5c, today 9.5c: Now in the middle
of the decently-termed financing we mentioned last week, RYR will almost certainly
have less problems than ANG is having in raising capital. From there we expect the
merger with CZY to close and then exploration newsflow can begin.
• Calibre Mining (CXB.v): In IKN398 14c, in IKN399 17c, today 18.5c: This one is now
up 32.1% and is doing tradeable type volume, too. The best performer of the bunch so
far, it’s just announced (19) the start of two drilling programs. The successor otherwise
of these will likely set the tone for the year and please remember, the reason this is a
possible is the Orla/Lassonde connection.
The bottom line is that all four of the tinycaps we featured at the start of the year are still
interesting, but for my taste at this time, ERC.v stands out and it’s the one I’m looking to buy at
the right price in the days to come. The others are still on the watchlist and I do like their
prospects, but things have to happen first.
A short Minera IRL update
IRL CEO Diego Benavides is back in the saddle after his battery-charge break, but I’m not going
to get to sit down with him until the end of February because he’s going to be travelling for the
next couple of weeks (and then I have a short break planned of my own, the kids have a beach
25

,
resort to do but it won’t interfere with The IKN Weekly normal output). By the looks of his
travel agenda, including Canada and
London, we can expect positive news Minera IRL (MIRL.pe): Closing price in Lima (BVL), 2017
on trade resumptions in both places in 0.16 0.1430.148 0.141
t he near future. 0 0 . . 1 1 2 4 0.119
0.101
0.11 0.119 0.117 0.1250.125 0.1190.1190.119 0.12 0.12 0.115 0.110.106
In the Lima BVL stock exchange IRL 0.1
saw light trading last week and one 0.08
0.06
single U$2.5k trade on Friday saw the
0.04
stock dip under U$0.11 for the first
0.02
time since Seminario SAB were trying
0
to spook small holders out of the stock.
No biggie there, IRL is still trading at
over double the price it was before it
was halted and the price is bound to
pick up as newsflow accelerates.
Regarding SolGold (SOLG.ax) Cornerstone (CGP.v) and Cascabel
Over the last few weeks I’ve had a smattering of mails com in about the Cascabel project in
Ecuador, 85% owned by Australia’s SolGold (SOLG.ax), who optioned in and are giving
Canada’s Cornerstone Capital (CGP.v) what amounts to a free ride on 15% of the project (the
deal is slightly more complicated than that, but it’ll do just fine in ballpark terms). I got a few
more mails in this week, I think due to the way it wowed the audience at Roundup last week,
so here’s a few lines stating the IKN policy on the project and the companies involved:
• I’ve watched it grow and yes, it’s an impressive porphyry system. They’re currently
concentrating on one target, there are at leat a dozen others in the area around, size is
already good, grade is great, it ticks all the rock boxes for a big copper project.
• I’ve met SOLG’s main spokesperson in the Americas, Exploration Manager Jason Ward
(for coffee), and also sat through his corporate presentation (at The Colombia Gold
Symposium, be there in 2017 it’s great) and was suitably impressed, both with the
project and the personnel doing the work. These are serious people doing serious work.
• I have the greatest respect for people like The Angry Geologist (20) and Brent Cook
(21) who have spoken on Cascabel just this week. I’m not a geol and will never pretend
to be one, but I know when I’m in the presence of a smart and trustworthy geol brain
so to keep it short, if people like Brent and TAG like Cascabel’s rocks, I do too.
But...and there’s always a but: I’m not a holder of SOLG or CGP and it’s going to stay that way.
The reason is simple, Cascabel is in Ecuador. Now I’m aware that Ecaudor has improved its real
and perceived political risk profile for mining in recent months and said as much in the latest
edition of the Regional Risk Review (IKN398 dated January 1st 2017), but for one thing I’m still
not totally comfortable with the whole dynamic of “National Miner Friendly” versus “Local Miner
Attitudes Patchy”. Plus we are on the cusp of a Presidential election next month that sees
Correa leaving whoever wins. And just as important, as much as I like the Cascabel rocks, I’m
already long into Regulus and Cordoba for exactly this type of porphryry/big copper junior
exposure. Or as I put it to longtime reader, subscriber and mailpal ‘AS’ (FWIW another man
with a sharp eye for junior miners and value) who recently asked me about Cascabel...
“...(v)ery impressive potential. I'm long REG and CDB for my Cu bigass plays
because I prefer the pol risk profiles. BUT I have nothing against Cascadero
aside from it being in Ecuador.
And that’s really the bottom line, if you’re in and long Cascabel, via the main SOLG company or
the satellite CGP play (and of the two I much prefer SOLG, CGP has always been a bit on the
slightly shady, self-serving Canadian exploreco side and has its market cap predicated by a
26
61/1/4 61/1/5 61/1/6 61.1.9 61/1/01 61/1/11 61/1/21 61/1/31 61/1/61 61/1/71 61/1/81 61/1/91 61/1/02 61/1/32 61/1/42 61/1/52 61/1/62 61/1/72
U$
source: BVL

,
couple of other things too, therefore watering down direct Cascabel exposure) you won’t hear a
single moan or groan from me, aside the
“be careful about Ecuador” noises. I’ll
leave you with the highly impressive 12
month chart of SolGold (A$0.02 to
A$0.30) to prove that all my above tlak
and opinion is just a load of hot air, if I
hadn’t been as snooty about Ecuador
exposure as I have been, I may have had
a massive winner on my hands.
Conclusion
IKN402 is done, we end with bullet points:
• Belo Sun (BSX.to) looks like an interesting near-term trade on permitting newsflow.
• On the other hand, it’s time to officially recognize the horrid loss in Focus Ventures.
Swallow bitter pill, wince, move on.
• Cordoba Minerals and Tinka Resources have both broken out. Get those drills turning
guys, that goes for Regulus too.
• Roger Federer is the greatest.
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) http://www.calculatedriskblog.com/2017/01/schedule-for-week-of-jan-29-2017.html
(2) https://www.quandl.com/data/USTREASURY/REALYIELD-Treasury-Real-Yield-Curve-Rates
27

,
(3) http://economia.estadao.com.br/noticias/geral,polemica-envolve-exploracao-de-ouro-nas-margens-da-usina-de-belo-
monte,70001641807
(4) http://www.marketwired.com/press-release/cordoba-minerals-intersects-4440-g-t-gold-1025-copper-247-zinc-347-g-
t-silver-over-09-tsx-venture-cdb-2190102.htm
(5) http://incakolanews.blogspot.pe/2017/01/on-smoke-and-mirrors-and-cordoba.html
(6) https://www.youtube.com/watch?v=pPdh5vz5obY
(7) https://www.juniorminingnetwork.com/junior-miner-news/press-releases/1204-tsx-venture/fcv/28675-focus-ventures-
appoints-gordon-tainton-as-president-announces-private-placement.html
(8) http://www.marketwired.com/press-release/wesdome-drills-wide-high-grade-intersections-at-eagle-river-300e-zone-
tsx-wdo-2191219.htm
(9)
https://www.canadianinsider.com/company?menu_tickersearch=Starcore%20International%20Mines%20Ltd.%20%7C
%20SAM
(10) http://www.marketwired.com/press-release/regulus-resources-completes-definitive-agreement-antakori-copper-
gold-project-peru-2190587.htm
(11) http://finance.yahoo.com/news/red-eagle-mining-operations-santa-103000066.html
(12)http://www.amerigoresources.com/_resources/news/nr_2017_01_26.pdf
(13) http://www.eleconomistaamerica.pe/empresas-eAm-peru/noticias/8115341/01/17/Buenaventura-inauguro-
Tambomayo-con-inversion-de-US-362-millones.html
(14) http://www.reuters.com/article/us-mexico-slim-idUSKBN15B25Q
(15) http://www.newsjs.com/url.php?p=http://elcomercio.pe/politica/gobierno/peru-y-colombia-emitieron-declaracion-
respaldando-mexico-noticia-1963899
(16) https://noticias.terra.com/mundo/latinoamerica/peru-y-colombia-suscriben-convenio-para-promover-formalizacion-
sector-minero,208fdd9a4940b9f2c8340272fe21a6c2d6k95psn.html
(17) https://webcasts.welcome2theshow.com/cibcwhistler2017
(18) http://www.kitco.com/pr/1845/article_01272017140330.pdf
(19) finance.yahoo.com/news/calibre-mining-initiates-two-drilling-141500714.html
(20) http://angrygeologist.blogspot.pe/2017/01/solgold-casabel-update.html
(21) https://www.youtube.com/watch?v=eYAmvTk4pRE&feature=youtu.be
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
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Avino G & S ASM nov-16 U$2.00 21-oct-16 U$1.40 -30.0% Abandon trade on bad bot deal
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
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B2Gold BTO.to aug'13 C$3.07 28-nov-12 C$3.44 12.1% sold 1/2 to raise cash
Colossus Min. CSI.to aug'13 C$0.72 24-jul-13 C$0.79 9.7% closed thru nerves on future
Pretium Res PVG.to aug'13 C$8.20 11-jun-13 C$10.14 23.7% closed to raise cash
Bear Creek BCM.v sep'13 C$2.06 30-may-13 C$2.20 6.8% sold on pol risk decision
MAG Silver MVG oct'13 U$7.00 12-sep-13 U$5.62 19.6% near-term short
Gold Res Corp GORO oct'13 U$9.52 03-may-13 U$4.98 47.7% short tgt made, covered
AQM Copper AQM.v oct'13 C$0.31 16-oct-11 C$0.125 -59.7% closed failed trade
First Majestic AG nov'13 U$11.51 07-nov-13 U$10.50 8.8% v near term short, closed
Fortuna Silver FSM nov'13 U$4.00 07-nov-13 U$3.68 8.0% v near term short, closed
Primero PPP nov'13 U$5.70 07-nov-13 U$5.75 -0.9% v near term short, closed
Starcore Intl SAM.to nov'13 C$0.235 08-sep-13 C$0.17 -27.7% ST trade didn't work, sm loss
B2Gold BTO.to dec'13 C$2.22 28-nov-12 C$2.16 -2.7% closed ST trade to raise cash
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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