IKN #406Premium

,
The IKN Weekly
Week 406, February 26th 2017
Contents
This Week: In today’s issue, Gold up miners down, BMO Miami this week, The IKN Weekly is
boring.
Fundamental Analysis: Sandstorm Gold (SAND) (SSL.to) 4q16 financials.
Stocks to Follow: Overview, Belo Sun (BSX.to), Riverside Resources (RRI.v), Rye Patch Gold
(RPM.v), Regulus Resources (REG.v), Cordoba Minerals (CDB.v), Lara Exploration (LRA.v), Atico
Mining (ATY.v), B2Gold (BTO.to) (BTG), Excellon Resources (EXN.to).
Copper Basket: Overview.
Producer Basket: Overview, AngloGold (AU), Kinross (KGC).
Regional Politics: Peru: Graña y Montero pulled into the Odebrecht bribery scandal, Peru:
Perumin 33 dates confirmed, Nicaragua trumpets so-so 2016 gold exports, Chile: La Escondida
strike continues, Argentina: Latest voter surveys should worry Macri fans, Ecuador: A second-
round run-off.
Market Watching: Prospector Resources (PRR.v) cashes up, Gran Colombia Gold (GCM.to) to
file suit against Colombia, Minera IRL: Meeting the CEO, Primero Mining (P.to) (PPP), from bad
to worse.
I remind subscribers that no part of this newsletter can be copied, reproduced or
given to any third party without the express permission of the author.
This Week
In today’s issue
• Sandstorm (SAND) (SSL.to) delivered a solid set of 4q16 financials and provided both
sales guidance and other clues to its plans for 2017. It still looks decidedly undervalued
to me, so even though it’s been a modest winner so far without setting the world on
fire, I’m good about holding through and opposing the prevailing market view.
• Last week we saw gold go up but the precious metals mining stocks lose ground, an
unusual though not impossible situation. Today’s intro chews the cud on that.
• It’s time to flag up Prospector Resources (PRR.v) again, the Alex Black vehicle we first
mentioned in IKN390 that will soon change its name to Rio2 Mining. ‘Market Watching’
has the details.
• Our near-term trade in Belo Sun (BSX.to) got hit by apparent bad news out of Brazil,
but the price recovery after the hit was as informative as the drop. The main piece in
the ‘Stocks to Follow’ portfolio tracker section, you won’t see me sweating on this one.
• The Ecuador presidential election has gone to a second round run-off and suddenly
uncertainty is in the air there. ‘Regional Politics’ is the place. Also in that section, my
250th attempt to warn you about rising Argentina political risk.
Gold up miners down
1

,
It was an odd week in which as we saw gold the metal go up (GLD +1.7%), silver the metal go
up even quicker (the gold/silver ratio dropped to 68.3X, the lowest in 2017 so far), but the
precious metals miners lose ground (GDX down 2.7%, GDXJ down 2.8%). That’s unusual for
sure, gold’s moves normally drives its dependent companies, but it’s not a shock-the-world
unheard episode either. It’s unlikely to be “miners leading the metal downwards” either, a
theory that got column space here or there last week. In last week’s case, the unusual reality
for me was caused by two separate influences:
1) The Fed minutes, which were far more wishy-washy on the prospects of a March rate
hike than the market expected. There’s more than a hint of that “Trump Uncertainty”
shtick from the Fed in its minutes too, but the bottom line is that higher rates are now
less likely and lower Fed funds rates make it easier for gold to rally (if it wants to), a
strong correlation that has stood the test of time.
2) Earnings season and many of the major names in PM mining have reported their year-
end results, plus 2017 guidance(s), in the last two weeks or so. We’ve had a few
outperforming companies (we noted GG and ABX last week) but for the most part the
results haven’t managed to live up to the expectations of the market.
This chart above comments in so many words that the valuations for mining companies
probably got ahead of themselves a little in the first six weeks of 2017, so the advent of
earnings have brought a dose of reality to these stocks.
As for gold fundies the GLD inventories levels (below left) show no change on the week, so the
modest improvement in the gold price has seen the GLD inventory/price ration drop back to just
above the 7X number.
GLD gold holdings, US Election to date (metric tonnes)
960
940
920
900
880
860
840
820
800
780
There’s not too much to read into this dataset this weekend, but in theory at least the return to
the 7X line gives more chance of a reactive price bounce if buyers step up again. That’s one I’ll
be keeping the corner of one eye upon, no more.
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 71/03/1 71/1/2 71/3/2 71/7/2 71/9/2 71/31/2 71/51/2 71/71/2 71/22/2 71/42/2
mt
GLD: Inventory/Price Ratio, US Election to date
8.2
8.0
source: SPDR GLD data 7.8
7.6
7.4
7.2
7.0
6.8
6.6
6.4
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 71/03/1 71/1/2 71/3/2 71/7/2 71/9/2 71/31/2 71/51/2 71/71/2 71/22/2 71/42/2
Source: SPDR data

,
BMO Miami this week
We have PDAC close on the radar now (pre-show things happen, then “PDAC Monday” is March
6th) but before then in the week ahead it’s the BMO Miami conference, the one where the
influential companies strut their stuff and Big Swinging Richards work on the deals they
announce at the Canada show.
The IKN Weekly is boring
I look around, see the breathless promotions out there at the moment and consider how
tedious it must be at times to read a publication such as this one. Out in the wonderful world of
promotion, ramping up right on schedule for PDAC, there seem to be no end of exciting deals in
which you can participate (for a modest entry fee) backed by people who always strike it rich
and never make a wrong move. Here in the plod and drudgery of The IKN Weekly your author
is raising some cash with a couple of sales/partial sales, tinkering at the margins and for the
time being just letting the main trades run on.
It’s boring. It’s not good for the newsletter business. I should be out there feeding you ideas,
stock tips and STRONG BUY recommendations galore, raising pulses and diving headlong into
the cut and thrust of capital markets at any given opportunity. And all those things are easy to
do in fact, even easier when you’re a tipster service selling thought and no skin in the game.
When it becomes more difficult is when it’s your own money at stake and with the realization
that of the 1,500 or more stocks swirling around in the Canadian capital markets, the vast
majority aren’t just mediocre but outright wastes of time and money. There are no end of great
stories in the wonderful world of the TSX(V) but there just aren’t that many good companies,
not for my money at least. What’s more, stocks haven’t looked particularly cheap for a number
of weeks which puts a value-oriented investor off the trail early. Thus another week goes by,
watching covered stocks and failing to find a new bargain name but don’t worry about me, I’ll
find something interesting to do with my recently raised cash soon enough. The rest of you can
get your kicks trading Northern Dynasty.
Fundamental Analysis of Mining Stocks
Sandstorm Gold (SAND) (SSL.to) 4q16 financials
On Tuesday and right on time, Sandstorm Gold (SAND) (SSL.to) filed its 4q16 and year-end
financial results with news release (1) that evening and Conference Call the next day. The CC
recording is still on the company website
SAND: AuEq sales per qtr and FY17 ests
(2) and the transcript is available at
16000
Seeking Alpha right here (3), but in this 14000 12460 12901 12517 12588 132451280013000 1320013600
particular case it’s useful (I’d venture to the 12000 10424 10834 11381
point of critical) to listen to how things 10000 8951
were said, not just read the words, as 8000
insight is there for the taking. More on that 6000
later, first lets check out some Q4 numbers 4000
2000
with a few straightforward projections into
0
this year. Starting with this, gold equivalent
(AuEq) sales for 4q16 which are confirmed
at 13,245oz, slightly higher than the pre-
announcement number in January.
Here I’ve also added in best guesses for 2017 quarterly sales, based on three assumptions:
1) The official SAND guidance for 2017, which rwads like this as per the YE MD&A: “Based
on the Company’s existing Gold Streams and NSRs, attributable Gold Equivalent
production (individually and collectively referred to as “Attributable Gold Equivalent”)
for 2017 is forecasted to be between 45,000–55,000 Attributable Gold Equivalent
ounces. The Company is forecasting Attributable Gold Equivalent production of over
3
41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1 tse71q2 tse71q3 tse71q4
AuEq Oz
source: company filings

,
65,000 ounces per annum by 2020.”
2) We’ve seen SAND regularly pitch low in its forward production (well sales really, this is
a streamer), CEO Nolan Watson obviously preferring UPOD strategy. That’s okay by
me, but when I read 4k to 55k, it’s the top number that gets my attention.
3) So taking into account this year’s total (49,731 oz AuEq) adding more mainly for the full
quota from Karma and a little extra from the Yamana streams and preferring some
level of conservative pitch, the IKN estimate is for 52,600oz split down into a general
“lower to higher” quarterly pattern.
And before moving on I’m going to address questions on what may see at first to be unstable
streams with problematic companies. We know Metanor is a dog of a share, but we also know
that its Bachelor Lake mine will continue production and when your revenue depends on a
stream, that’s all we really need to know and MTO.v the company can dilute its shareholders to
Kingdom come. Roughly the same comment applies to Primero Mining (PPP) (P.to) and its
travails at its main San Dimas mine that could indeed see the company go bankrupt (it’s
certainly not a share that anyone should own). The good news re. SAND on this is that our play
has its stream revenue coming from Black Fox, not San Dimas and even if PPP goes Chapter 11,
it’s very unlikely to affect production at this mine in any significant way. For sure it’s not the
best mine out there (I hated the deal Conway did at PPP to buy the thing and said so at the
time) but once in production they tend not to stop and no matter what happens at San Dimas,
SAND will keep getting its money.
And that’s enough on those two, the bottom line is that I’m perfectly happy about going with
the upper end of the guidance range at SAND for 2017 and see no systemic problem in the
pipeline. Moving quickly on, we get the SAND 4q16 operational numbers and with sales of
U$16.463m, minus production costs of U$3.316m and DD&A of U$7.903m, we get a gross
profit number of U$5.244m. All those are pretty much in line with our previous estimates for Q4
with perhaps the only asterisk next to the numbers that DDA number, slightly hotter than
expected (my $5.5m gross profit guess would have been spot on but for that...just saying). As
for the next couple of quarters, slightly lower expected sales means slightly lower revenues but
there’s not much in it, we should expect SAND to keep churning out the same type of profitable
quarter.
SAND: Operations overview
20
15
10
5
0
-5
4
41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1 tse71q2
U$m
total revenues prod costs depletion gross profit
Source: SAND filings
SAND: production costs per qtr
However, operating earnings and eventual net
earnings were flat (here’s op-earnings, the net 4. 4 5 4.249 3.78 4.019 3.917
was a quarterly loss of $19,000) due to BTL 3.5 3.142 3.212 3.321 3.039 3.268 3.211 3.316
financial adjustments. Once again we’re 3
reminded that the real way of gauging 2.5 2.309
progress at SAND isn’t its bottom line profits. 2
In fact it’s not even gross profits (above) 1.5
1
because the artificially high depletion it needs
0.5
to book makes things look worse than they
0
are. The best way to see what’s going on is to 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4
$m
source: company filings

,
strip out these factors and look at its cash generating ability, the thing that’s been driving the
recent rise in treasury levels.
25 SAND: Op. Earnings
20
14.2
15
10 7.5 8.4
5 4.0 2.4 2.3 6 1.4 -0.3
0
-5 -1.4
-10 -5.1
-15
-20
-25
-30 -28.8
5
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4
source: company filings
srallod
fo
snoillim
Here are those charts, in which we take total revenues and then subtract the two things that
really cost the company money, production costs and administration costs. To the left in
absolute terms, to the right on a per-share basis.
10 Cash generation capacity/share
9
8
7
6
5
4
3
2
1
0
SAND is tucking away around U$12m per quarter and that’s decent money. Therefore and
unsurprisingly, due to the lack of big deals it’s been doing recently that cash is showing up in its
treasury position. Yes SAND ran a small deal with the doggy-looking Condor (CN.v) at very
favourable terms recently but small it was (CN giving away large chunks of its asset value in
return for a modest amount of cash, SAND looking like lender of last resort). Here’s the working
capital and cash/eq treasury charts and we have a good idea on the accuracy of my 1q17est
guess of U$30m already because CEO Nolan Watson said during last week’s Conference Call
that SAND already has U$30m cash on hand. In other words, I may well be underestimating
there.
Assuming SAND does no deals before end 2q17 (which is a big guess, it’s certainly out there
wanting to do a deal and it has financial firepower) the cash is going to keep on accumulating.
As for shares out, they dropped slightly to 151.931m (from over 152m in December) as SAND
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1 tse71q2
source: SAND data, IKN calcs
erahs/stnec
SAND: Cash generation capacity
14 12.354 12.195 12.7
11.7 12 11.022
10 9.091 9.508 8.935
8 6.825 7.125
6
4
2
0
51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1 tse71q2
$m
source: company data, IKN calcs
60 SAND: Working Capital per qtr
55
50
45
40
35
30 25
20
15
10
5
0
51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1 tse71q2
source company filings/IKN ests
srallod
fo
snoillim
SAND: Cash treasury per qtr
55
50
45
40
35
30 25
20
15
10
5
0
51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1 tse71q2
source: company filings/IKN ests
srallod
fo
snoillim

,
did some buying back at the year-end low prices. The company could follow through on that
and buy back more shares if it can’t find
anything better to do with its growing cash pile
of course, butb I’d prefer that it sought out a
deal rather than try this low-radar investment
technique too much.
As for the other parts of the balance sheet,
here below are the main assets and liabilities
tracking charts but the only thing I really care
about is the lack of debt on the books right
now. That would change if SAND activates all or
part of its U$110m revolving credit facility, of
course, but that would presumably only be
done with good reason and to finance a larger deal. For the time being we should really like the
shape of the SAND books today, a company that’s generating good cash from its active streams
and royalties even if it does nothing and with no debt headwinds slowing it down either.
That just about wraps up the financials overview at SAND this quarter. The company is in good
financial shape and is generating cash and as the derivatives chart below show, it’s still not an
expensively priced company even before we get to the bonus ball (JDL/Trek Mining) that
follows.
SAND: Price / Book Value Ratio
2.20
2.00
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
6
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 WON
SAND: Shares Out
160
150
140
130
120
110
100
90
80
70
60
P/BV
source: SAND filings, IKN ests
The first chart above, price/book ratio, shows the dip at the end of December (and when SAND
dipped towards 1.0X we saw Nolan Watson buying back shares) but we also see that SAND still
hasn’t clawed back to the levels we saw when Aurizona was producing for the stream. For the
quality of assets it has and the solid nature of its revenue generating branches, now proven as
willing and able to churn out easily achieved profits on a regular basis (this is not late 2015,
folks) SAND still isn’t getting the type of valuation (that I feel) it deserves. For sure it’s smaller
than FNV or SLW, then again SLW is exposed to San Dimas and SAND has got over its bad
investment decisions (Luna part One, Colossus and has a solid asset book these days). For what
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1
source: company filings/IKN ests
serahs
fo
snoillim
SAND: Assets
600
550
500
450
400
350
300
250
200
150
100
50
0
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4
$m SAND: Liabilities Breakdown per qtr fixed
other current 120
cash 110
100
90
80
70
60
50
40
30
20
10
0
source: SAND filings
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1 tse71q2
source: company filings
srallod
fo
snoillim
LT debt
current debt

,
it’s worth, a return to the 1.8X price/book we last saw in mid 2014 would price the stock at
around U$6.50. I’m at $7.00. Those are
gettable. 14 SAND: Annualized price/sales ratio, per qtr
13
As for price/sales here, it’s been 12
11
reasonably regular at between 9X and 11X
10
for the last year or so and at this
9
weekend’s share price, our 2q17 estimates
8
model would put it at 10X. Again (and I
7
know I’ve beaten you over the head with 6
this point), this looks chap compared to 5
peers (FNV, SLW, RGLD, OK.to) that often 4
enjoy multiples of 15X and even beyond. A
15X price/sales would price today’s share
at U$6.70, right in the range (for me). If I
had to guess (and I will), I’d say that SAND is still suffering from an overhang of bad press from
the days in which it gambled big money on riskier projects and lost (again, Colossus Minerals
sticks in a lot of people’s minds). These days SAND is a very different fish to that and much
improved (if it weren’t i wouldn’t be long the stock, QED) but the bad press seems to be
lingering. The solution for the company is to keep on keeping on, it’s hardly the first time the
collective whizz dumb of the market has been incorrect for a long period of time.
With that, we now move to a couple of subjects that require more examination as they may
provide new impetus and upside to SAND, all apart from the above financial anal ysis and
conservatively set projections for the year ahead.
The Luna Gold revival and SAND’s part in the Trek Mining deal: The main reason I pitch
my anal yses and assumptions on these mining companies to the conservative side is that when
surprises come along, they tend to be pleasant ones. Such is the case here, as in the last
quarter SAND’s apparent large loss in Luna Gold (they bought high, it started producing,
technical problems and the gold price slump saw it go belly-up) has turned around and now our
streamer suddenly has a decent amount of money to re-coup from this arm of its investment
book. For more on the subject check out the JDL Gold and/or Luna Gold websites, but in a
nutshell JDL Gold is taking over Luna in an all share deal and is raising at least some of the
cash it will need to put Luna’s main asset, Aurizona, back into production (assuming they can
right the wrongs there and assuming gold doesn’t dive on us again).
There are several different ways in which the Luna Gold/JDL merger can finish but if we
assume the path of least resistance, once it’s all done SAND will own the following of the Trek
Mining newco:
• Around 28.3m shares of Trek Mining (the new name for the mergeco once it’s all done)
• Around 10m warrants at $3.00 strike that expire in 2021.
• A sliding scale NSR on production from the main Aurizona mine zone, which is 3% at
current gold prices but goes up to 5% if gold prices go above U$1,500/oz
• Another 2% NSR on the outlying exploration zones of the Aurizona concession.
At the $2.20 ticket price of the deal the fully paid up shares are worth around U$46.7m, or 30c
per SAND share. That’s not bad money for an asset I’d personally previously written off. Which
begs the question, what will SAND do with its newly acquired position in Trek Mining?
If we consider what was said at the Conference Call last week, my best guess is that SAND
plans to liquidate its fully paid-up shareholding in 2017 (while the inevitable full-court Marin
Katusa/Stansberry sheep-shearing pump job is being played on this stock, it’s going to be loud
and constant noise in 2017 folks, get used to the idea) and hold onto its warrants and
especially that valuable looking NSR (no need to worry about the large scale dilution Trek will
foist upon the unsuspecting in 2018 and beyond when you have an NSR).
7
41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 WON tse71q2
source: company filings, IKN data

,
In last week’s CC there were a couple of key passages and it was notable that every time the
subject of Luna/JDL/Trek came up, the next breath was about raising cash. Here’s one part of
the script (and this is from the aforementioned Seeking Alpha transcript, but it’s really worth
hearing this on the recording as the connection between facts and corporate planning is easier
to spot). Your author bold-types:
A line item that I would like to discuss is a net income figure, which was materially
higher in 2016. One of the drivers of the increase was a gain on the revaluation of
the company’s investments and a big reason to that gain was a change in fair
value of the convertible debenture in warrant position that Sandstorm holds in
Luna Gold.
Overall, we ended up recognizing a fair value increase of $39 million within the
company's portfolio of investments. Due to accounting, half of this is recognized in net
income and the other half is in other comprehensive income. And during 2017, we
expect to monetize a portion of the more than $80 million that we hold in
investments and loan receivables.
Now, it doesn’t say outright that SAND is about to sell Luna Gold (i.e. Trek) shares, after all it
could sell its position in Hot Maden or other shares it holds. But later on when asked what its
most valuable and interesting streams due to come online in the future, CEO Watson said this:
I’d say the most significant ones coming online over the coming years would be the
royalty from Aurizona, as that starts to back up the royalty from Hot Maden that we
talked about.
Again, SAND talks about the NSR over the long-term and not its share position, another hint of
its nearer-term plans. So if SAND is about to liquidate its Trek Mining shares and take the cash,
it means that as long as we assume it doesn’t close some other deal in the meantime by the
end of 2q17 approx it’s going to be swimming in war chest cash:
• U$30m as at today
• Another U$12m in cash generating revenues between now and the end of 2q17
• Perhaps U$50m from the sale of Trek shares (assuming SAND sells them all by Q2)
• The as-yet untapped U$110m revolving credit facility it put in place last year.
In other words, in less than four months it’s easy to imagine SAND with U$200m to spend on a
new deal. I just hope CEO Watson waits for a strong deal at a good price and doesn’t get an
itchy trigger finger, as another failure such as Luna Gold 1.0 or Colossus is something SAND
needs to avoid at all costs.
Meanwhile, new streams are not coming on line soon
As for current organic upside, when asked about the significant streams in the pipeline during
the (short) Q&A, CEO Watson named four in particular:
• The Yamana Gold Cerro Moro silver stream, scheduled by Watson to be a revenue
generator as from 2019. This will replace the interim deal it has on other Yamana
assets and will make a big difference to revenues. As per IKN calculation it adds
approximately $12m/annum to revenue streams.
• Aurizona, which may be framed as producing in 2018 by JDL/Luna, but Watson takes a
more conservative approach and expects meaningful stream revenue by 2020
• Then down the line, Hot Maden in Turkey which should start in 2021.
• Also mentioned was Coringa in Brazil, owned by “New” Anfield Gold (born from the
wreckage of Ross Beaty’s previous Anfield nickel company which according to Watson
should provide revenue stream a “couple of years from now”.
What’s notable here is that among the future streams considered significant by SAND
management there’s nothing much in the near future. Nothing in 2017, nothing in 2018 and
only one scheduled to start in 2019. That’s interesting because now SAND is suddenly sitting on
8

,
a pile of cash, which is getting bigger and includes a useful revolver.
Discussion and conclusion
We’ve considered three parts to the Sandstorm Gold (SAND) (SSL.to) story on the back of its
4q16 results...
• The decent operating results, financial corporate strength and rising cash levels
• The advent of the Trek Mining deal which promises to rescue at least some value and
potentially a lot of value from a previously failed investment.
• The lack of near-term catalysts in the organic pipeline at SAND.
...which together point to one of two roads for the stock in 2017: Either eat or be eaten. With
rising cash, you can be sure the company is ready to do another deal and with the size of
money it has available they could announce a real game-changer (instead of the minnow-sized
CN.v the other week) at any given moment.
On the other hand, the larger royalty/streamer companies will start to look at SAND with
greedier eyes if the status quo continues. The longer SAND sits there passively, collecting cash
and failing to close a dial-moving deal, the longer its EV will drop and a tempting looking cash
pile grow. With its ratio derivatives lower than the SLWs and FNVs of this world, a predatory
move by a larger streamer would be considered accretive for the aggressor and leave plenty of
room to up a bid if necessary, too. Either way, I doubt the current situation at SAND will
continue for much long er in our rising metals prices market. SAND these days is a solid money-
making machine that’s not getting the credit it deserves for the turnaround effort it made last
year. With extra bonus cash and a newly revalued NSR asset likely to come from the Trek
Mining re-boot of Aurizona, that process is only going to be accelerated.
If SAND announces a U$100m+ deal in the next few weeks, it’s going to move up in people’s
estimation (assuming the deal is a solid one). If it doesn’t, its current share price won’t last long
anyway because there are too many good things accumulating here to ignore. Perhaps a
takeover deal would mean Nolan were out of a job (for a while) but we in shareholder land
won’t mind about that, more likely is that the share price rises to a level that assumes a target
price (that then potentially puts off advances). SAND doesn’t post spectacular financial results
compared to its market cap but then again it doesn’t have to, it’s not a mining company after all
and its whole model is built on less
volatile ground.
Personally, I’m sorely tempted to
add to my position and ignore my
own advice about raising cash right
now and keeping away from “value”
bets. I’ve convinced myself to wait
until after PDAC and see if the semi-
traditional post-PDAC hangover for
mining stocks shows up, but if
there’s a swoon in the market
between now and then and this
stock goes under the U$4 level once
again I won’t be able to resist. Great
value today, drop dead stone cold
value if it goes 20% lower. Own
some of this and consider it a solid core to your portfolio when you do, count the investment in
years and only a large-scale long-term drop in gold can get between you and a good profit.
Once my current nerves about the state of the market today are assuaged, either by being
proved right or wrong about raising some cash in these weeks of February, I will add to my
SAND holding and the overall cost average will likely average up.
9

,
Stocks to Follow
It wasn’t an easy week for stocks (again), the theory of the tired rally gets further confirmation.
Of our thirteen current open positions, four returned gains on the week (BTO.to, REG.v,
SAM.to, RPM.v) and nine were losers (not listing them all) but even though it’s an overall
negative week to report to you, this Saturday morning as I write up this section I’m feeling
decidedly optimistic and glass-half-full so I’m going to highlight a couple of happy details
instead of the normal moaning and groaning:
• Both Top Picks, Regulus and B2Gold, were weekly winners. That’s good.
• There were no big percentage losers, with most stocks performing to peers
• We’ve finally got green ink next to Rye Patch’s (RPM.v) name. Better late than never.
We currently have 13 open positions on the ‘Stocks to Follow’ list, two less than our self-
imposed maximum number at any given time. Ten of the positions are in the green, three are
in the red.
company Ticker this week Avg Price Reco date Current PPS Gain/Loss% Notes
TOP PICKS
B2Gold BTO.to buy C$2.11 12-sep-14 C$4.39 108.1% tgt $5.30 Top Pick prod.
Regulus Res REG.v STR buy C$0.64 06-apr-15 C$1.60 150.0% LT exploreco top pick
Long positions (in current order of preference)
Sandstorm Gold SAND STR buy U$3.80 17-apr-16 U$4.54 19.5% $7 tgt IKN378, good Q4
Tinka Res TK.v buy C$0.195 19-apr-16 C$0.34 74.4% Under-radar Zn.
Cordoba Min. CDB.v buy C$0.73 15-sep-16 C$1.39 90.4% First $1.50 tgt hit
Starcore Intl SAM.to hold C$0.61 10-jan-15 C$0.60 -1.6% ex-Top Pick, holding thru
Belo Sun BSX.to buy C$0.90 30-jan-17 C$0.99 10.0% near-term trade $1.28 tgt
Excellon Res EXN.to STR 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$0.88 72.5% tgt $1.10, Cu play
Rye Patch Gold RPM.v STR buy C$0.31 02-sep-16 C$0.32 3.2% 75c tgt, bot more IKN400
Riverside Res RRI.v sell at 60c C$0.39 27-jun-16 C$0.55 41.0% Will take profits at 60c tgt
Red Eagle Min. R.to STR buy C$0.71 13-dec-16 C$0.83 16.9% Big growth potential
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$1.05 -8.7% solid biz model
Short positions
None at present
Closed in 2017 closed close price
Continental Gold CNL.to Jan'17 C$2.68 22-may-16 C$4.17 55.6% trade closed, profit taken
Focus Ventures FCV.v Jan'17 C$0.23 01-jul-12 C$0.05 -78.3% Give up, a disaster trade
Wesdome Gold WDO.to Feb'17 C$1.72 28-aug-16 C$3.00 74.4% Target hit, sold, good trade
2009 to 2016 annual closed positions in appendices below
Now for notes on some of the current basket stocks:
Belo Sun (BSX.to): Still giving it until PDAC. BSX traded down last week, but it wasn’t the
unmitigated disaster that it looked like being when the news started filtering through on
Tuesday (Brazil media) then confirmed by BSX itself before the bell on Wednesday (4) that a
judge in Brazil had slapped a 180 day injunction on the construction of the Volta Grande mine
due to concerns from locals on the mine construction and use, on forced displacements and a
handful of other things. The order amounts to a freezing of development and the case has got
plenty of media space in both Portuguese and English (here’s a link (5) to a long article that
covers just about all the points from an anti-mine standpoint on enviro website Mongabay). As
this ten day price chart shows, the news of the injunction had already started to make inroads
10

,
on the share price on Tuesday but still hit the price hard on Wednesday, down as much as
13.9% at the open that day before a rebound kicked in. However, what I found most
interesting is also noted on the chart, that on the waterfall drop day there was only 837k shares
traded and the next day was pretty quiet and back to a normal volume trading day for BSX.
This compares to the 5m + shares that the market bought up in the three days after the
announcement of its construction permit award in early February (just after I’d reco’d the stock
an bought in on my near-term trade), including 2.5m the day of the permit award. This is a clue
as to the reality of the injunction slapped on BSX last week, its bark is worse than its bite.
In fact no permit has been rescinded and in Latin America, be it Brazil, Bolivia or Belize, getting
a permit awarded is the big thing because once you have it in your hands it’s very difficult to
see it taken away. Delaying tactics yup, but permanent judicial blocks are rare things unless the
company is seriously at fault. When I saw the news Tuesday evening (out of Brazil) then on
Wednesday morning I knew it was a negative, but what really surprised me was seeing the
stock dive under 90c that morning (if I hadn’t been on vacation and more interested in sliding
down tubes into swimming pools with my daughter, I might have called Buy/Add on weakness
in a Flash update...but didn’t. Dereliction of duty. I do not apologize. The pool was great fun).
Then came Thursday evening and the NR (6) which had BSX dong the “rise above the noise”
strategy as it announced the order for a SAG ball mill on long-led time, though I had to laugh a
cynical laugh when reading CEO Ian Pritchard’s comment, just two days after the 180 day
suspension had been handed down. He said, “The purchase of the SAG mill marks an important
milestone as we prepare for the construction of the Volta Grande Mine. The delivery of the SAG
mill is expected in early 2018, which meets our planned construction schedule”. Early 2018?
You mean the court order doesn’t affect you? Well isn’t that a stroke of luck! But whatever, this
show of calm and “business as usual” at BSX saw the stock price re-gain every penny it had lost
early week until some late and light selling action pushed BSX back under a Loonie for this
weekend.
Moral of this story: Don’t panic. Brazil’s exploration mining scene was once famously described
to me as the exact opposite of that of Peru’s when it came to expenses; In Peru you spend
90% of your cash on community relations and 10% on lawyers, while in Brazil it’s 90% on
lawyers and 10% on communities. It’s a litigation nation and opponents don’t set up road
blocks, they go at you through the courts. Finding a “friendly” judge for your cause is neither
difficult nor a surprise but as mentioned above, the big thing is having the permit awarded.
From that moment on your opponents are fighting a rearguard action, not inflicting potentially
mortal blows. In our example last week once the shock of the Volta Grande injunction had
washed through, we could see a distinct lack of panic sellers and a price rebounding quickly.
I again stress that I’m long BSX as a strict near-term trade. If things get worse on the ground
in Pará it’s not going to matter much to me, because in a couple of weeks maximum I’m out of
11

,
this position and taking profits. With BMO this week and PDAC after that there’s still a shot at
getting a deal announced between AEM and BSX, if not I’ll have to settle for a thinnish but still
positive 10% or so win. Either way, not sweating.
Riverside Resources (RRI.v): Still selling at 60c. My “sell at 60c” call almost got a fill
early week as RRI rallied to 59c, but there wasn’t any follow-through on volume or news and
the stock traded back to 51c the next day before finishing the week in the mid-50s...not a bad
place. With a stock like this, it only takes a single dedicated buyer or a single piece of good
news to fill a higher ask, let’s see if RRI can get some traction at PDAC.
In fundies news (7) RRI is raising a little war chest money via a rare placement in the stock (its
kept the share count very tight over the years) and is now in the process of selling 5.5m units
(1 unit = 1 share + ½ warrant at a 85c strike) at 55c apiece for gross proceeds of $3.025m. It
looks like one of those “if they offer you money then take it” deals, as RRI doesn’t really
desperately need the cash. On hearing the news I shrugged my shoulders, considered it a net
neutral and knew that it would fill easily enough.
Rye Patch Gold (RPM.v): Green ink, a modest profit, a pulse. No news. End
Regulus Resources (REG.v): This is the type of near-term pattern in a thinly traded stock
that I like to see. It says, “Okay, here’s the price, the price is $1.60 but if you want to buy some
of these shares, you’re paying $1.66”. And clearly there are enough people out there unwilling
to join the queue at the bid and prepared to pay up to own some REG. On the back of last
weekend’s site visit by a bunch of influential writers, this is good to see.
Cordoba Minerals (CDB.v): Last week brought confirmation that the 2m warrants exercised
at $1.50 we noted last week in IKN405 were owned by Robert Friedland, something we’d
assumed without having the public document, which was filed on February 23rd (8). All good. In
trading CDB continued to drift a little away from the $1.50 number, not anything we should be
worried about. I’m expecting CDB to come at us with more news over the PDAC period and one
of those things may well be that they’re getting promoted to the big board as a Dot Tee Oh.
Lara Exploration (LRA.v): I’m going to make a decision on LRA after PDAC, as I think there’s
some newsflow to come. For the moment, a hold.
Atico Mining (ATY.v): Although it’s made a big move (with us on board) and the current
$1.10 target price looks close at times when the stock nudges into the mid-90s level, at under
90c it’s just about buyable on a value basis in my opinion (offering 22.2% of easily reachable
upside) and that’s why it’s been clicked back to a near-term sentiment buy this weekend.
B2Gold (BTG) (BTO.to): A good start to the year from our Top Pick stock, evident from this
comparative chart against the XAU index.
We still have a while to go before we get
the BTO 4q16 financials, due out March
16th. As we’ve seen the majority of mining
companies feel the weight of any result
that isn’t sparkling, we might be getting
near and interim top in this stock after its
excellent run in 2017 to date. That and
PDAC on our doorstep, too. Then again
we may not and I’m confident my current
$5.30 price target is easily reachable by
mid-2017. I’m a holder and a happy one,
too.
12

,
Excellon Resources (EXN.to): Another one to
wait on for fundies news is EXN, which comes
out with its year-end financials on March 23rd.
However unlike BTO, our lone silver pick on the
list has underperformed the market in 2017 to
date, basically flatlining apart from that first-day-
of-January pop while silver the metal itself is up
13% and plenty of silver stocks have done better
than that. In this case, EXN isn’t dependent on
what will be a transition quarter 4q16 for share
price push, what we need from this investment is
solid news that it’s executing on the growth plan
and that in turn is dependent on the new water
pumping system that seeks to lower the in-mine
water table. In theory the plan is fine and buying before it happens (as I did) then waiting for it
all to unfold is my best approach (really don’t like playing catch-up on stock prices when they
start to move), in practice EXN is only going to get a finite amount of time to put up or shut up
on production growth. I’m not in love with silver and never will be, EXN got the nod in the first
place because, if it goes to plan, it’s one of the very few silver companies out there with a
valuation comparable to a gold mining cousin stock. But that’s as far as it goes, I see no need
to own silver exposure “just because”, or due to fashion, or if I don’t I lose popularity with the
world of mining.
The Copper Basket
After eight weeks of 2017, The Copper Basket shows a 20.68% gain to level stakes.
company ticker price 1/1/17 Shares out Market Cap current pps gain/loss%
1 Capstone Min. CS.to 1.26 382.04 630.37 1.65 31.0%
2 Imperial Metals III.to 6.06 93.587 617.67 6.60 8.9%
3 NGEx Resources NGQ.to 1.20 205.06 276.83 1.35 12.5%
4 Western Copper WRN.to 1.86 94.19 186.50 1.98 6.5%
5 Copper Mtn CMMC.to 0.94 118.8 142.56 1.20 27.7%
6 Excelsior Min. MIN.to 0.63 167.364 140.59 0.84 33.3%
7 Cordoba Min. CDB.v 0.73 86.86 120.74 1.39 90.4%
8 Regulus Res. REG.v 1.20 68.368 109.39 1.60 33.3%
9 Amerigo Res ARG.to 0.345 173.61 97.22 0.56 62.3%
10 Atico Mining ATY.v 0.95 97.59 85.88 0.88 -7.4%
11 Coro Mining COP.to 0.15 483.425 84.60 0.175 16.7%
12 Copper Fox CUU.v 0.125 417.64 64.73 0.155 28.0%
13 Trilogy Metals TMQ.to 0.66 104.33 63.64 0.61 -7.6%
14 Nevada Copper NCU.to 0.77 80.5 61.99 0.77 0.0%
15 Revelo Res. RVL.v 0.070 128.486 7.07 0.055 -21.4%
NB: All stocks priced in CAD$ Portfolio avg 20.68%
The Copper Basket 2017, weekly evolution
A mixed week for The Copper Basket, headlined
by a 1.61% drop in the average due to the five 30%
weekly winners (CS.to, CMMC.to, REG.v,
25%
NCU.to, ARG.to) being outnumbered by the nine
20%
losers (III.to, NGQ.to, WRN.to, MIN.to, ATY.v,
15%
COP.to, TMQ.to, CDB.v, RVL.v), with just one in
the UNCH column (CUU.v). As for the bigger 10%
movers, there was one double figure percentage 5%
winner in Amerigo (ARG.to up 12.0%) as its 0%
impressive (and for me totally illogical) run Jan1st jan8th 15th 22nd 29th feb5th 12th 19th 26th
source: IKN calcs
continues, while Coro Mining (COP.to down
13

,
10.3%) was the yang to the yin.
The drop in shares was driven by the weakness in
copper prices at the end of last week. As seen in this
five day chart, copper tried its very best to rally back
above the U$2.75/lb level but the demand just isn’t
there, ladies and gentlemen (keep trying to tell
people). Not even the ongoing industrial actions at
La Escondida, Grasberg etc could stop the bears from
winning out which means by simple deduction that
the supply disruption/strike risk is now to the
downside, as the current situation isn’t powering
copper prices higher and any settlement deal at any
of the disputes will simply add to the bearish feel
(smelter companies won’t be in a hurry to drop TCs
either).
Now for the regular weekly copper warehouse
inventory bullets:
• Total world stocks dropped 17,596 metric tonnes (mt) (-2.8%) last week, finishing
Friday at 611,657mt total.
• SHFE Shanghai stocks dropped by 5,831mt (-2.0%) to close at 289,899mt, a small but
interested de-stock at a time you’d normally expect stocks to be added. This could
potentially be the early effects of the multiple copper mine strikes starting to show.
• At the LME warehouses it was another drop, this time by of 18,275mt (-8.0) to a close
of 210,800t.
• Meanwhile at the increasingly intriguing Comex we saw another add to stocks, we’re
now up to 110,958mt, a rise of 6,510mt (+6.2%) on the week.
Here’s the Shanghai-only chart, with the stall in the inventory stocking there on the right. It’s
the big incognito right now, will there be a sudden dearth of concentrate for smelter feed? If it
comes to pass we’re likely to get a tell from an nonseasonal drop in SHFE inventory levels and
because of that, I won’t be watching this dataset on my normal weekly rhythm next week, I’ll
be checking it out every evening.
Shanghai Futures Exchange Warehouse Stocks, Dec'13 to date
400000
350000
300000
250000
200000
150000
100000
50000
14
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 ht5beF
Mt Cu
source: Cochilco
No focus on stocks this week, the only one that’s vaguely interesting is Amerigo (ARG.to) that
continues to buck the trend and trade higher, but I simply don’t understand why anyone should
pay this much per share for something as historically mediocre that always seems to disappoint

,
at the moment of filing financials. Hell, I get calls wrong on occasion, should have bought some
at 20c and 25c.
The Producer Basket
After 8 weeks of 2017, the Producer Basket shows a gain of 14.18% 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 22.77 19.54 22.3%
2 Newmont NEM 34.07 530.595 19.14 36.08 5.9%
3 Goldcorp GG 13.60 832.381 13.79 16.57 21.8%
4 Franco Nevada FNV 59.76 178.01 11.73 65.89 10.3%
5 Agnico Eagle AEM 42.00 223.475 10.13 45.32 7.9%
6 Kinross Gold KGC 3.11 1245 4.74 3.81 22.5%
7 Ang/Ashanti AU 10.51 405.27 4.70 11.59 10.3%
8 Royal Gold RGLD 63.35 65.281 4.46 68.35 7.9%
9 Buenaventura BVN 11.28 254.19 3.21 12.63 12.0%
10 Sibanye Gold SBGL 7.06 228.71 1.95 8.54 21.0%
Prices in U$, NYSE or NASDAQ tickers Portfolio avg 14.18%
In a negative week for the precious metals The 2017 Producer Basket: Weekly performance and
miners, all ten of our basket stocks lost 25% comparative to GDX control
ground and most of them in the same range
as the loss in GDX (-2.7%). The only outlier in 20% b g a d s x k c e o t ntrol
the bunch was AngloGold Ashanti (AU down
15%
10.2%) on results that failed to please the
market. That equal weights move hit our 10%
basket performance as compared to the GDX
5%
benchmark and we’re now 1.16% behind the source: Google, IKN calcs
market. Early days yet though...hmmm... 0%
Jan1st 8th 15th 22nd 29th feb5th 12th 19th 26th
AngloGold Ashanti (AU): AU resumed dividend payments along with its 2016 year-end
results, but that failed to impress the market which couldn’t see past higher costs for the
company (forex related) and as a result the stock got whacked by over 10% on the week. The
negative vibes of seeing the CEO around U$150k of his own shares didn’t help matter either,
even though the sale was previously okayed by the board (he says he had tax payments to
cover. Along with those weaker than expected earnings AU may be getting flak from the move
that’s now being flagged by many inside observers; that it’s about to buy B2Gold (BTG)
(BTO.to) out of its 49% of the Gramalote project in Colombia and move it forward. Whatever
the reason, AU was by far the worst larger-cap performer in the sector last week, another
victim of earnings season (see today’s intro).
Kinross (KGC) (K.to): Having started at eighth on our list in market cap terms, Special K is
now up to sixth and has neatly outperformed peers in the mid-cap (let’s say sub $5Bn) size
range so far this year.
Regional politics
Peru: Graña y Montero pulled into the Odebrecht bribery scandal
I’ve heard off-record for a numbers of weeks that inside Peruvian civil works and construction
company Graña y Montero (GyM) the top brass has been soiling their collective underwear
15

,
about the potential implications to their company of the Odebrecht corruption and bribes-paying
scandal breaking across Latin America (see IKN Weeklies passim). Last week we started to see
why as the declarations of main whistleblower in the Peru end of the Odebrecht/Lava Jato,
Jorge Barata, made on January 24th, got leaked to the Peru press (9). His testimony stated that
GyM as a company, as well as fellow Peru construction company JJC (closely associated with
the Fujimori party and family) was fully aware that Odebrecht was paying bribes for contracts,
such as the U$20m paid to then-President of Peru Alejandro Toledo for the Interoceanic
Highway construction contract. Barata said (translated):
“The payment was made by Odebrecht, but the other companies (JJC and GyM) were
aware (of the payment), not of the details but they did know an agreement existed”.
“(The cost of the bribe) was distributed between the consortium members, I don’t
remember the exact formula, I will verify that. It was more or less this way, they all
knew they we had paid and they knew they had to assume their part of the cost.”
This bombshell came on the back of sworn testaments from GyM executives that the company
had not been involved in any bribery payments and as soon as Barata’s comments were made
known, GyM again came out with a press release to categorically deny any involvement with
bribes paid by Odebrecht. This didn’t stop GyM shares from dropping 18% on Friday in NYSE
trading, but it was enough to get head of GyM, José Graña, to postpone his previously
scheduled appearance at the parliamentary bribery hearings in Peru that was set for tomorrow
Monday. He asked for another date. Not suspicuous at all, oh no.
Peru: Perumin 33 dates confirmed
To coincide with conference season, last week the necessary Peru mining bigwigs confirmed the
dates and location for the country’s biggest business conference of any type, the bi-annual
Perumin mining get-together which will celebrate its 33rd edition (10). The place as usual is
Arequipa in the South of Peru (in the grounds of its main university), the dates are between
September 18th and 22nd. It’s Latin America’s biggest mining conference and over 100,000
visitors are expected to cross its threshold (though if memory serves they count visits per day
rather than total visitors, therefore the same person can be counted up to five times so PDAC is
still the world’s biggest mining bash Canada, don’t worry).
The main theme of Perumin this year will be socio-environmental in nature and the slogan for
Perumin 33 is (translated) “Mining: Sustainability and Competitivity”, which makes sense, what
with community, social and environmental factors being the main block to development of
many projects in Peru and a bone of contention around mines already in operation.
Nicaragua trumpets so-so 2016 gold exports
The way of the Ortega government is the use of Socialist-type declarations of thrusting forward
advancement for one and all, even when the subject is as capitalist as they come; the
production and export of gold from the country by (mostly) foreign mining companies. Last
week the Ministry of Formentation, Industry
and Commerce (Mific) gave us the figures on U$m Nicaragua: Gold exports per year (U$FOB)
gold production and Nicaragua’s Vice- 500
431.87 435.85
President Rosario Murillo (aka Daniel Ortega’s 385.92
400 364.11 357.71
wife) took them and stated at a presser (11)
319.35
(translated) that the mining sector “...saw 300
strong dynamism with a high level of foreign 222.16
investment and favourable international 200
prices...” and, “...in 2016 the country
96.9
exported U$357m of gold and U$12m of 100
silver, exports that represent an increase of
0
12.7% on 2015”. Which is sexy money talking
2009 2010 2011 2012 2013 2014 2015 2016
and all great year-over-year, but as 2015 was source: CETREX
the single worst year since Nicaragua got its
gold mining act together and the BTO La Libertad mine re-opened for newly expanded
16

,
business, it’s better to look at the bigger picture (12). As we can see here, 2016 was in fact the
second worst year of the last six and a long way from the record set in 2013. That said, gold is
still Nicaragua’s third largest export product behind beef and coffee.
The other thing that catches the eye about the ministry declaration is the way they state,
without batting an eyelid, that the principle export markets for its gold are The USA, Canada
and The Cayman Islands. Nothing suspicious there, move along now.
Chile: La Escondida strike continues
No progress at all was made last week during government/worker/management meetings and
we’re now at day 18 of the La Escondida strike. The main takeaway from last week is the way
management are apparently playing hardball, preferring not to budge an inch or give the union
leaders a face-saving small concession they could then take to their members. There’s a whiff
of “break the unions” about all this and although it’s hard to get an on-record comment from
anyone, consensus among the executive class is of support for the BHP position and the chance
to clip Chilean unions’ wings on a more permanent basis. Meanwhile, we’re now hearing the
first complaints and voiced worries from Chilean economists who note the country GDP growth
rate will be meaningfully affected by the La Escondida strike if it continues much longer (yes,
the mine really is that big).
Argentina: Latest voter surveys should worry Macri fans
This weekend a comprehensive survey report was published by Argentine pollster company
DICEN (which occasionally gets accused of being pro-Kirchnerist but usually returns fairly
accurate numbers that are comparable to other polling companies). The whole report is right
here (13) but as a snapshot, this frame taken from site friend Abel (14) shows voter intention
for the key mid-term elections coming up in August and October this year. It concerns voter
intention for the most important province under the vote this year, Buenos Aires province (with
the right hand chart splitting the urban and rural areas):
The main take away is on the left: As things stand today duplo of Daniel Scioli and ex-President
Cristina Kirchner would trounce the government ticket, led by Eliza Carrió and President Macri’s
brother. Also, of you go deeper into the main document this month is the first time DICEN has
scored disapproval of President Macri (47%) higher than approval (45%), up to now he’s ridden
the “give him time” ticket, but the feeling of time running out is now palpable. It’s wiser to take
it as a snapshot of today, rather than a forecast for a vote over half a year into the future, but
even so it’s a damning verdict on this Macri government that’s getting all the applause from
foreign climes but so far has failed to convince the Argentine people who haven’t seen anything
of the promised economic recovery (2016 GDP negative 2.9%).
I continue to recommend general avoidance of Argentina mining exposure. If you like them
high risk/high reward I won’t stop you, but the risks of the country have been severely
underplayed since Macri came to power and the disconnect between the reality and the story
being sold to outside investors is getting wider by the month.
Ecuador: A second-round run-off
It took until Thursday for Ecuador’s official electoral body, the CNE, to confirm the news but
17

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now we know; The Correa government’s candidate, Lenin Moreno, failed by a whisker to get
the 40% and 10% difference to second place needed for a first round win and will now go up
against Guillermo Lasso in a second round run-off in which there’s everything to play for.
A few bullet points:
• There were doubts about Moreno as a candidate previously, they are now confirmed.
It’s worth noting that in the last Presidential election Rafael Correa trounced Guillermo
Lasso by 35 points but without the main man up for the job, the difference was just 11
points.
• Although in theory at least Moreno only needs 11% added to his score to win, it’s
generally agreed that the run-off vote on April 2nd will be a tight one that could go
either way. There were seven other candidates in the first round and the majority of
those votes are expected the transfer to Lasso in the “Anybody But Him” anti-sitting
government protest style. In fact third placed Viteri with a 16% block has already
thrown her support behind Lasso.
• Guillermo Lasso is an ex-banker turned right-wing politico and would normally pose
little existential threat to the nascent mining industry in Ecuador. But things are seldom
as they seem on the surface in the crazy countries and in this case, to get as far as he
has Lasso has put together a weird coalition of political groups from all sides of the
political spectrum. The only real thing his coalition has in common is opposition to
Rafael Correa and his Alianza Pais party, the ticket on which Lenin Moreno runs.
• And now we get to the pointy end of the problems now brewing for mining companies
in Ecuador. Of all the components of the Lasso coalition the one that should concern
us, mining investment people on the outside looking in, is that of Pachakutek. I
mentioned this name briefly in last week’s wrap up and now comes some expansion on
the issue. Pachakutek is the party political arm of CONAIE, the indigenous umbrella
group that brings together indigenous peoples from all over Ecuador (there are dozens
of individual societies) and one thing they have in common is an anti-mining stance.
• Pachakutek is an integral part of the Lasso ticket and be clear, without their support it’s
most probable that Moreno would have passed the 40% barrier and would now be
President-Elect. In other words, Lasso owes one to Pachakutek and you can be sure
they’re going to get what’s owed to them. One of those issues will be that in the event
Lasso wins the run-off vote, Pachakutek gets his government’s support for their anti-
mining position.
In other words, you with Ecuador mining exposure in your portfolios better be hoping and
praying for a Lenin Moreno victory on April 2nd because if not, your share price may well have
some serious downside.
But it’s not all bad; Lasso is right wing, pro-trade, pro-FDI, pro-development etc etc and that’s
something that’s bound to play against the straight flat anti-mining position of CONAIE. The
way I see it is that there will be some horse trading between the coalition members if, repeat IF
Lasso wins the big job. To illustrate this here’s an excerpt from a question received from
subscriber AS last week who has a position in SolGold (smart guy, great rocks there):
I realize the CONAIE would have to be repaid with some favors but do you think a
Lasso victory would reverse all the development gains in Ecuador or just possibly stop
specific projects in specific parts of the country ?
And here’s how I replied to his question:
The latter, specific projects in specific parts, is the most likely.
18

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For a while i've had a mental model of "mini Peru" for Ecuador, with certain hot
projects blocked while others get to move forward. Ones in the firing line include
Panantza, Loma Larga and Rio Blanco. Others such as FDN, Mirador will be okay.
As for Cascabel, i don't think it will have near-term direct problems. It might get some
negative vibes from overall political risk, but minor level.
That “Mini Peru” image may turn out as a help to you (it’s helped categorize Ecuador for me).
Peru is certainly pro-mining as a whole, but pockets of anti-mine exist and polemic projects
such as Tia Maria, Conga etc have indeed been stopped in their tracks. In the case of Ecuador
under an hypothetical Lasso presidency I highly doubt Lundin Gold (LUG.to) at Fruta Del Norte
is going to have a problem, but INV Metals at Loma Larga is an obvious target and I can
imagine Lasso “giving” CONAIE that one in exchange for another project getting developed,
(maybe Cascabel?).
Anyway, let’s see what happens on April 2nd because all this drumming up of fear may all be for
naught; If Moreno wins it’ll be Correa-esque business as usual and mining moves forward, in
fits and starts, in Ecuador.
Market Watching
Prospector Resources (PRR.v) cashes up
We first mentioned this company in IKN390 dated October 30th 2016. Hee we are four months
later and the new company is now taking shape. Late Friday came the news that the new Alex
Black vehicle, currently known as Prospector Resources (PRR.v), closed its funding round of
private placement by selling 15m shares at 50c apiece (15). With this placement closed, PRR.v
now has 59.69m shares out.
Notable details include the fact that Alex Black owns 21.5m of those shares (36.02% of S/O)
and financier partner in this new company, Pat DiCapo, owns 11.5m shares (19.27% of S/O),
so between them they have over 50% sewn up and presumably a tight rein on what the
company does and when it does it. I got in touch with CEO Alex Black last week to get a bit of
extra flavour and the need-to.know things are:
• Today PRR has CAD$9m in cash at bank and the original assets that come from the
reverse-in (e.g. the titanium thing in Canada). There are no liabilities of importance.
Therefore, although the fixed assets will have some sort of value placed on them,
they’re not going to be the eventual thrust of the company and it’s fair to say overall
working cap is C$9m as well.
• April sees the AGM, at which point we can expect PRR to go through the expected
name change and become Rio2Mining, in order to remind the world about Rio Alto and
that Alex Black success. The ticker will change, too.
• Probably before the AGM we should get an announcement on the appointment of key
management and personnel. I have no confirmation on who they might be, but strongly
suspect that at least some of the “Old Rio Alto” team will get on board.
• I asked CEO Black about any acquisition targets the new company might have in the
cross-hairs. He said (and I quote), “Several targets are being working on”. Fair enough.
As this price chart shows, since PRR came out of NEX hibernation at the beginning of December
it’s traded higher and the 90c close on Friday makes the 50c placement round just closed look
quite the bargain (it also makes CEO Black’s position worth CAD$19.35m, on paper at least).
The gap that’s grown is testament to the quality of the people putting this new company
together and the collective reputation they bring to the table. However trading has been kind of
thin so far and we won’t really get an idea of the true value in PRR/Rio2 until it announces an
19

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acquisition, from there we get a better idea of what the company is capable of doing. We also
need to recognize that while CAD$9m is useful money, it’s not the type of war chest an
exploreco will need to first acquire a quality
asset and then explore/develop it. The near
60m shares out is a certainty to expand as
the company gets filled out with a live asset
then goes about its business.
Caveats aside, this is obviously a company
that deserves and needs to be watched
closely in 2017. Among the shysters and
scam-merchants, teams like this with a
strong reputation for adding shareholder
value (not merely adding cash to their own
pockets at the expense of all) are the ones
that stand out from the mediocre TSXV
crowd. Watch this space.
Gran Colombia Gold (GCM.to) to file suit against Colombia
On the subject of dross companies run by rip-off merchants, what you see below is what
happens when your company is run by scumbags and they’re desperate enough to do anything
for money. News from Colombia this weekend (16) is that Serafino Iacono’s complete failure of
a gold mining company, Gran Colombia Gold (GCM.to), is set to sue the government of
Colombia to the tune of U$700m for breach of contract and failure to comply with the terms of
the Free Trade Agreement (FTA) between Canada and Colombia, its main cause being the
failure of the State to execute the eviction orders on informal mining co-operatives and locals
from the Marmato mine, even though the locals were mining the area for centuries before GCM
got there and have consistently claimed that they have every right to be there and mine
deposits that were illegally awarded to GCM.
This litigation development may explain the rather heavy duty buying and selling of the
company debt and converts recently by Iacono and his partner in grime, Frank Giustra. It’s also
worth noting that Iacono is now a man wanted for questioning in Colombia by the regulatory
authorities due to the collapse of Pacific Rubiales and the recent birth of his new oil and gas
company, Pentanova (PMI.v) (17) as the new entity offers no recourse to investors in Colombia
who lost untold millions in the bankrupt Pacific. The way he’s decided to play hardball with
Colombia may have something to do with Colombia’s decision to pressure him on the Pacific
side of his businesses.
And as luck would have it, Serafino Iacono was seen last week (18) with Frank Giustra, Ian
Telfer (ex-GG) Tommy Humphreys (of Giustra’s promo pump site CEO.ca) and others in Santa
Cruz Argentina, meeting with governor Alicia Kirchner (yes, sister of Nestor and in-law of
Cristina) to discuss investment in the province’s oil fields. Let’s hope they get to read Colombian
media channels in Patagonia before it’s too late and avoid closing a deal with these rapscallions.
Minera IRL: Meeting the CEO
If something time-sensitive comes from my meeting this week with CEO Diego Benavides, you’ll
get a Flash update. If not, you’ll get all you can eat on Minera IRL next weekend in IKN407,
including a recommendation call on the stock and any decision to re-open formal coverage on
the position.
However, there is one subject I want to mention this week before the coverage gets detailed;
As seen above today in ‘Regional Politics’, civil works contractor Graña y Montero (GyM) could
well be deep in the doo-doo soon due to its involvement in the Odebrecht bribery scandal. We
need to remember at this point that GyM is, or at least was, the most likely company to get the
EPCM contract to build the Ollachea mine for Minera IRL and that plan involved the quasi-State
20

,
Peruvian finance entity Cofide organizing the syndicated loan to fund construction and
potentially taking up to 50% of the debt position itself, as well as paying off the U$70m bridge
loan it provided to Minera IRL in early 2015 before that criminal idiot Hodges tried to rip
everybody off and delayed the whole project by a year and a half (minimum). We’re suddenly
in a different world for GyM and potentially Minera IRL, too. If we consider the heat GyM is
under (it’s not a stretch of the imagination to wonder whether this scandal might kill the
company) and way in which the Peru State may back off from any involvement, however
tenuous, with them until further notice, it puts a couple of question marks into the equation
about the plans Minera might have to build their new mine. And indeed, the end of this week
saw the local Peru end of Scotiabank publish an opinion report on GyM (19) in which it opined,
rightly in my opinion, that...
• Graña y Montero may now be vetoed in any State-funded project.
• Financing for any private company contracted with GyM may be adversely affected,
either by a deterioration in credit rating or a flat refusal to do business with a third
party connected to GyM in Peru.
• The eventual GyM restructuration process is now cut and dried, the company itself may
collapse.
• The news tying GyM directly to the corruption scandal now reduces the possibility that
it gets compensation from The State for money invested in the large-scale Gas pipeline
contract, centre of one arm of the bribery charges.
How the mighty fall. Be sure that I’ll be asking CEO Benavides about these angle in the days to
come and what Minera IRL intends to do in order to move Ollachea forward as quickly as
possible. IRL has suffered through enough heartache of its own making these last couple of
years, the last thing it needs now is more problems, even though they’re nothing of its own
doing.
Primero Mining (P.to) (PPP), from bad to worse
Last week’s short note on Primero Mining (PPP) (P.to) and the news its San Dimas workforce
was on strike finished with the words, “Cheaper yes, bargain basement no, this is a very easy
stock to avoid. So do so”. That call got all
the franking you’d ever want when we were
told on Thursday (20) that its CEO,“...Mr.
Ernest Mast and Primero have reached a
mutual decision that Mr. Mast will depart
Primero to pursue other opportunities
effective no later than March 6, 2017”.
It is the way of our wonderful financial
linguistic world that you get fired by mutual
decision. Founder and ex-CEO (i.e. the
person who created the mess Mast
inherited) Jospeh Conway is back at the
helm as interim CEO. We presume his self-
appointment was meant to send a
swashbuckling “Let’s Sort This Mess Out” message to the market. It didn’t work. Already down
heavily due to the mess of 2015 and 2016, PPP has lost another 24% since the strike was
announced. Avoid.
Conclusion
IKN406 is done, we end with bullet points:
• We noted in closing last week that the Ecuador presidential elections may be throeing
us a curveball. It’s turned out that way and there’s a new level of political uncertainty
21

,
there and due to the Pachakutek connection, this could affect the mining sector
directly. All eyes on April 2nd.
• Meanwhile in the background, the daddy of all South America basket case countries is
starting to see the effects of some crucial mid-term elections. Though not happening
until October the country’s politicos are already campaigning for the event and so far at
least, it’s not looking great for its newly installed President who hasn’t managed to
deliver on his promises yet. Yep I’m talking Argentina, how did you guess? ☺
• Sandstorm continues to impress on the financial front. I’s not the first time I’ve ben
flummoxed by a mining stock price that doesn’t seem to reflect the deep value in the
company. The good thing is that in these cases time is usualy my friend.
• Belo Sun (BSX.to) has a maximum of two weeks left in this portfolio, near-term trade is
was, is and will remain. I’m unconcerned by the effects of that 180 build freeze though,
not for the time window I’m playing with. Let’s see if AEM steps up to the plate in time
to change my modest win into a big one.
• The other sale in the pipeline is Riverside (RRI.v), as long as it hits my desired 60c
price. I’ve already raised some cash this month, these two sales will see me more than
fine. That’s my port position though, you’re bound to see things differently.
• So ends another sub-standard Weekly. I haven’t really been impressed with my own
work recently, hopefully I can make that up to you in the next couple of weeks with an
extensive and detailed look at Minera IRL. And an expletive delted decision on what to
do with Lara.
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://finance.yahoo.com/news/sandstorm-gold-announces-2016-fourth-215200609.html
(2) http://www.sandstormgold.com/investors/
(3) http://seekingalpha.com/article/4048537-sandstorm-golds-sand-ceo-nolan-watson-q4-2016-results-earnings-call-
transcript
(4) http://finance.yahoo.com/news/belo-sun-receives-temporary-order-114500428.html
(5) https://news.mongabay.com/2017/02/judge-halts-excavation-plans-for-largest-ever-brazilian-goldmine/
(6) http://finance.yahoo.com/news/belo-sun-initiates-long-lead-205253054.html
(7) http://www.rivres.com/index.php/news/2017-news/317-riverside-resources-inc-announces-private-placement-of-3-
025-000
(8) https://www.canadianinsider.com/company?menu_tickersearch=CDB%20%7C%20Cordoba%20Minerals
(9) http://elcomercio.pe/politica/actualidad/odebrecht-y-gym-sus-principales-obras-mismo-consorcio-noticia-
1971449?flsm=1
(10) http://www.entornointeligente.com/articulo/9655419/PERU-Perumin-2017-Empresarios-y-profesionales-mineros-
de-50-paises-arribaran-a-Arequipa
(11) http://www.radiolaprimerisima.com/noticias/general/217976/reportan-un-importante-dinamismo-en-sector-minero
(12) http://www.cetrex.gob.ni/website/servicios/estadisticas.jsp
22

,
(13) https://drive.google.com/file/d/0B0Ej29Wnc1MPT3c3MDJuUDhiSXM/view
(14) https://abelfer.wordpress.com/2017/02/26/danos-hoy-nuestras-encuestas/
(15) http://www.marketwired.com/press-release/prospector-announces-closing-of-c7500000-private-placement-
2198545.htm
(16) http://www.noticiasrcn.com/nacional-pais/multinacional-gran-colombia-gold-demandaria-al-estado-700-millones-
dolares
(17) http://incakolanews.blogspot.pe/2017/02/pentanova-pmiv-news.html
(18) http://www.tiemposur.com.ar/nota/125904-grupo-petrolero-interesado-en-santa-cruz-se-reunio-con-el-gobierno
(19) http://elcomercio.pe/economia/peru/scotiabank-proyectos-grana-y-montero-serian-afectadados-noticia-
1971516?flsm=1
(20) https://finance.yahoo.com/news/primero-announces-executive-leadership-change-220000064.html
Stocks To Follow Closed Positions 2016
Closed in 2016 closed close price
Phoscan Chem FOS.to jan16 C$0.28 29-mar-15 C$0.265 -5.4% Buyout trade, bot but poor deal
True Gold TGM.v jan16 C$0.18 23-ago-15 C$0.25 38.9% okay trade, sold on pol risk
McEwen Mining MUX jan16 U$1.09 25-ene-15 U$1.20 10.1% sold due to lack of value
Lake Shore Gold LSG.to feb-16 C$1.10 07-abr-15 C$1.69 53.6% bot out, sold early in process
Atacama Pacific ATM.v feb-16 C$0.19 26-abr-15 C$0.40 110.5% sold for a double on big pop
New Gold NGD feb-16 U$2.06 24-ene-16 U$2.96 43.7% closed good near-term trade
Sandspring Res SSP.v mar-16 C$0.195 18-oct-15 C$0.32 64.1% Hit tgt, took profit
Teranga Gold TGZ.to mar-16 C$0.54 15-feb-15 C$0.60 11.1% disappointing trade
B2Gold BTG mar-16 U$0.85 13-ene-16 U$1.30 52.9% Separate trade on B2, hit tgt
Dalradian Res DNA.to mar-16 C$0.67 27-oct-13 C$1.00 49.3% Hit target, sold, good win
HudBay Min. HBM may-16 U$4.10 03-abr-16 U$4.36 -6.3% Short trade, poor timing
Nevada Sunrise NEV.v may-16 C$0.185 28-feb-16 C$0.23 24.3% V. small, no big deal either way
Richmont RIC jun-16 U$7.60 01-may-16 U$9.30 22.4% near-term trade, profit taken
INV Metals INV.to jul-16 C$0.25 03-abr-16 C$0.95 280.0% Trade closed on time
HudBay Min. HBM aug16 U$4.98 09-jun-16 U$4.80 3.6% short trade covered, no big deal
Miranda Gold MAD.v oct-16 C$0.125 03-jul-16 C$0.10 -20.0% tiny spec trade, didn't work
Avino G & S ASM nov-16 U$2.00 21-oct-16 U$1.40 -30.0% Abandon trade on bad bot deal
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
23

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Stocks To Follow Closed Positions 2014
Closed in 2014 closed close price
Fortuna Silver FVI.to jan'14 C$2.80 23-dec-13 C$3.19 13.9% small ST trade closed
Rio Alto Mining RIO.to jan'14 C$2.06 07-jun-13 C$2.30 11.7% trading position finally closed
Network Expl. NET.v feb'14 C$0.01 22-jul-12 C$0.005 -50.0% position closed, did nothing
Tahoe Resources TAHO feb'14 U$13.10 08-apr-13 U$21.72 -65.8% short closed due to reality
Darwin Res DAR.v mar'14 C$0.10 14-jul-12 C$0.045 -55.0% tiny risk play dropped
B2Gold BTO.to mar'14 C$3.07 28-nov-12 C$3.35 9.1% closed to free up capital
Pretium Res PVG mar'14 U$5.38 22-nov-13 U$6.50 -20.8% short closed as port longer
Gold Res Corp GORO may'14 U$5.07 26-jan-14 U$4.12 16.7% took profit
Bear Creek Min BCM.v may'14 C$1.63 23-mar-14 C$2.05 25.8% Took profit, sm near-term win
Eco Oro Min. EOM.to aug'14 C$0.48 22-sep-13 C$0.26 -45.8% sold small loser to make room
True Gold TGM.v sep'14 C$0.395 02-feb-14 C$0.41 3.8% M&A won't happen, sold
Santacruz Silver SCZ.v sep'14 C$1.04 26-jan-14 C$0.86 -17.3% silver/M&A spec, rel. small
Timmins Gold TGD nov'14 U$1.38 09-apr-14 U$0.99 -28.3% failed trade, sell, raise cash
Kinross Gold KGC nov'14 U$2.90 20-oct-14 U$2.15 -25.9% V small trade, didn't work, chau
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.145 -48.2% lost China sponsor
Stocks To Follow Closed Positions 2013
Closed in 2013 closed close price
USA Graphite USGT feb'13 U$0.93 08-jan-13 U$0.17 81.7% short tgt made/trade closed
Lachlan Star LSA.to feb'13 C$1.50 30-sep-12 C$0.95 -36.7% sold to reduce port risk
United Silver USC.to mar'13 C$0.21 28-oct-12 C$0.095 -54.8% small Ag sector trade, failed
Aurcana Corp AUN.v apr'13 C$1.07 11-nov-12 C$0.55 -48.6% closed on poor YE results
Gold Res Corp GORO apr'13 U$14.11 25-jan-13 U$9.38 33.5% short tgt made/trade closed
Marlin Gold MLN.v apr'13 C$0.075 10-feb-13 C$0.065 -13.3% closed trade
Bear Creek BCM.v may'13 C$2.58 01-apr-13 C$2.40 -7.0% near-term, time ran out
Lupaka Gold LPK.to may'13 C$1.12 23-oct-11 C$0.32 -71.4% towel thrown in
Tahoe Resources TAHO may'13 U$18.62 08-apr-13 U$14.70 21.1% took profit on ST short
OceanaGold OGC.to jun'13 C$3.03 16-sep-12 C$1.18 -61.1% sold on gold drop
IMPACT Silver IPT.v jun'13 C$1.14 13-jan-13 C$0.62 -45.6% sold on silver drop
Duran Ventures DRV.v jun'13 C$0.045 10-may-13 C$0.025 -44.4% ST trade never worked
Plata Latina PLA.v jun'13 C$0.79 10-apr-12 C$0.13 -83.5% closed
Bellhaven BHV.v jun'13 C$0.065 03-jun-13 C$0.12 84.6% closed ST trade
B2Gold BTO.to aug'13 C$3.07 28-nov-12 C$3.44 12.1% sold 1/2 to raise cash
Colossus Min. CSI.to aug'13 C$0.72 24-jul-13 C$0.79 9.7% closed thru nerves on future
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
24

,
Augusta Res. AZC.to may'12 C$3.10 29-jan-12 C$2.07 -33.2% bad mkt, bad trade cut loss
Bellhaven BHV.v may'12 C$0.50 22-sep-10 C$0.28 -44.0% new mgmt not impressive
Zincore Metals ZNC.to may'12 C$0.325 29-jul-11 C$0.17 -47.7% bad mkt, bad trade cut loss
Soltoro SOL.v may'12 C$0.70 18-mar-11 C$0.41 -41.4% bad mkt, bad trade cut loss
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% fail ST trade close pre split
Estrella Gold EST.v aug'12 C$0.91 27-mar-11 C$0.14 -84.6% Closed on port realignment
Fortuna Silver FVI.to sep'12 C$1.07 03-may-09 C$5.32 397.2% sell call $6.17/ Mar25
Strait Minerals SRD.v oct'12 C$0.125 09-dec-11 C$0.12 -4.0% closing coverage til FY13
Sunward Res SWD.to oct'12 C$1.47 13-mar-11 C$1.21 -17.7% sold, took loss
Gold Res Corp GORO oct'12 U$21.47 09-sep-12 U$17.40 19.0% Short trade closed
Yellowhead Min. YMI.to nov'12 C$1.00 01-apr-12 C$0.63 -37.0% sold, took loss
Primero Mining PPP nov'12 U$7.26 07-oct-12 U$6.73 7.3% Short trade closed
Bear Creek Min. BCM.v nov'12 C$3.38 07-nov-11 C$3.72 10.1% Took small profit
Vena Resources VEM.to dec'12 C$0.70 31-may-09 C$0.18 -74.3% Failed trade (caps F)
Galway Res GWY.v dec'12 C$2.19 24-nov-12 C$2.30 5.0% closed good ST arb trade
Stocks To Follow Closed Positions, 2011
Closed in 2011 closed close PPS
Sunward Res SWD.v jan'11 C$1.05 21-nov-10 C$1.63 55.2% target made, trade closed
Serengeti Res SIR.v mar'11 C$0.245 05-dec-10 C$0.285 16.3% sold pre-tgt, ST trade fail
Fronteer Gold FRG apr'11 U$2.37 03-may-09 U$15.24 543.0% buyout, trade closed
Minefinders MFN apr'11 U$9.09 07-nov-10 U$16.89 85.8% target made, trade closed
Metalline Min. MMG may'11 U$1.04 26-jan-11 U$0.89 -14.4% exit, resource disappointed
Peregrine Met PGM.to jul'11 C$0.87 06-mar-11 C$2.60 198.9% buyout offer, closed
Dynasty Metals DMM.to jul'11 C$4.20 03-may-09 C$2.85 -32.1% Sold. Fail. Move on.
Aura Silver AUU.v aug'11 C$0.22 13-oct-10 C$0.16 -36.4% Bad pick. Take loss
U.S. Silver USA.v aug'11 C$0.52 26-jan-11 C$0.71 36.5% closed to make room
B2Gold Corp BTO.to sep'11 C$2.80 12-may-11 C$4.27 52.5% target made, trade closed
Bear Creek Min. BCM.v sep'11 C$3.80 27-may-11 C$4.17 9.7% macro sell call victim
Minefinders MFN sep'11 U$14.70 10-aug-11 U$15.15 3.1% macro sell call victim
Great Panther GPR.to sep'11 C$3.03 22-aug-11 C$2.64 -12.9% macro sell call victim
Fortuna Silver FVI.to sep'11 C$1.07 03-may-09 C$5.36 400.9% sold 20%, macro sell call
Focus Ventures FCV.v nov'11 C$0.40 20-apr-10 C$0.20 -50.0% cut losses, bad trade
Regulus Res. REG.v dec'11 C$1.17 14-aug-11 C$0.52 -55.6% cut on news of poor 43-101
2009 and 2010 closed positions in appendices below
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
25

,
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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