IKN #409Premium

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The IKN Weekly
Week 409, March 19th 2017
Contents
This Week: Trade heads up, Announcement for one specific subscriber, In today’s issue,
Wrong about being wrong about gold.
Fundamental Analysis: NOBS report on Solitario Exploration & Royalty Corp. (XPL) (SLR.to).
Stocks to Follow: Overview, Belo Sun (BSX.to), Tinka Resources (TK.v), Red Eagle Mining
(R.to), Sandstorm Gold (SAND) (SSL.to), Riverside Resources (RRI.v), B2Gold (BTO.to) (BTG),
Eros Resource (ERC.v), Minera IRL (MIRL.cse), Atico Mining (ATY.v), Cordoba Minerals (CDB.v),
Copper Basket: Overview, Crapstone Mining (CS.to), Amerigo Resources (ARG.to), Trilogy
Metals (TMQ.to), NGEx Resources (NGQ.to).
Producer Basket: Overview, Newmont (NEM).
Regional Politics: Peru weather news and views, Mexico: The revoking of EIA for the Los
Cardones gold project, Ecuador: Polls give Lenín Moreno a clear lead over Guillermo Lasso,
Argentina: Six months to the end of the Macri govt, Chile: Latest on the La Escondida strike.
Market Watching: First Quantum (FM.to) now willing to sell 100% of Haquira, Starcore 3q17
financials, Catching up on the “Four speculative tinycap plays for 2017” (ANG.v, RYR.v, CXB.v,
ERC.v), Episode twelve of “What I’d buy now”.
I remind subscribers that no part of this newsletter can be copied, reproduced or
given to any third party without the express permission of the author.
This Week
Trade heads up
As forwarded in the Flash update of Friday (see Appendix 1) I will buy an initial position in
Solitario Exploration & Royalty Corp (XPL) this week. See the NOBS report in today’s Fundies
section for more.
Announcement for one specific subscriber
I will not name you today, however I know who you are. You are getting one chance to desist
from publishing subscriber-only information on a public forum in Germany (it’s now happened
twice to my knowledge) but not only that, taking the information and pretending it’s your own
material. It is possible that you have not registered this notice...
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.
...that appears in every issue of The IKN Weekly, but it should be crystal clear to you by now. I
will not hesitate in taking further action if you continue and be clear that plagiarism is a dirty
label to carry against your name for the rest of your working career. It is due to the
severity of being known as a plagiarist that, after careful consideration, I’ve decided to give you
a chance. You don’t get a second and this, mein freund, is what is known as “fair warning”.
In today’s issue
• I called buy on Solitario Exploration & Royalty (XPL) (SLR.to) on Friday morning,
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today’s NOBS report is all about why.
• An apology: I was going to write up the B2Gold (BTO.to) (BTG) quarter but in the end
it’s getting deferred because I simply ran out of time, the bout of food poisoning took
too many days out of my week. It wasn’t bad though, I’ll get there next week.
• Starcore’s (SAM.to) quarter was mediocre, but as per the analysis in IKN405 we were
expecting just that. There’s still a lot to like about SAM at this price point.
• Everybody’s talking Tinka (TK.v) these days and the set-up reminds me of the wisest
person I ever met and her saying, “You can achieve anything in this world, as long as
you’re prepared to let somebody else take the credit”. So very true; I do not want the
fame, just give me the money.
Wrong about being wrong about gold
“One cannot step twice in the same river”
Heraclitus (c 540 – 480 BC)
Last weekend’s intro was all about your author’s loosening grip on (reality?) being able to
predict the twists and turns in the gold price. It was also about my fears that gold was looking
like cracking under the U$1,200/oz line again. As things turned out the two thoughts meshed
together well, because my fears were misplaced and my “bad” call this time was very welcome
(because I’d also resolved not to act on my fear of gold dropping). Janet raised, there was no
aggressive language in the communique or the presser, the market decided that too much
downside was already in the metal and it was now unjustified, up went gold by 30 bucks or so
(or GLD +2.0% on the week). Stocks followed too but only tepidly, GDX up 4.3% and GDXJ up
4.6% and quite a lot of that was due to a late surge in a wide range of Canadian listed names
getting a weightings re-balance for the TSX (e.g. the 3.5m shares of Wesdome (WDO.to) which
shot the stock 15% higher in minutes, followed by the main 22m block in an after hours
trading...hello, my name is Mark and I have seller’s regret).
There were a few weeks back then where I was in tune with gold’s moves, those have now
gone and I feel out of touch with the metals and wouldn’t even want to risk a guess. The
gold/TIPS relationship is tight long-term, but doesn’t do a good job in explaining current
movements. Other non-numerical influences are shaping gold’s price now and fear seems to be
leading greed all over the market now, now just for gold. That might be it but either way, I now
feel out of touch with the comings and goings so anything I have to say about the metal’s next
move won’t be much more than a guess. Heraclitus was right and until a bit of personal
confidence and/or insight returns I’ll stay away from the subject for a while. Ultimately I own
gold for other reasons than trading (it might be different for you) and for sure I’ll keep plugging
away trying to find a stock winner to make a financial difference, but gold bullion isn’t in the
portfolio to make me rich, it’s there to stop me from becoming poor.
Fundamental Analysis of Mining Stocks
Today we open coverage on our new position, Solitario (XPL) (SLR.to).
NOBS report dated March 19th, 2017
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Solitario Exploration & Royalty Corp. (XPL) (SLR.to)
Company Overview
Solitario Exploration & Royalty Corp. (XPL) (SLR.to)(USA: XPL, Canada: SLR.to, Frankfurt
RJO.f) is an exploration stage mining and royalty holding company. Its current flagship property
is the Florida Canyon zinc deposit, part of its larger Bongará project, in North Peru. Current
share structure is as follows:
Shares out: 38.687m
Options: zero
Warrants: zero
Fully diluted shares: 38.687m
Current share price: U$0.804
Market Cap: U$31.1m
Approx working cap per S/O: U$0.42
All prices are in United State Dollars unless stated. Forex U$0.75=CAD$1
NB: As Solitario’s main listing is XPL in The USA, we use US Dollars as default currency
in this analysis.
Overview
Solitario Exploration & Royalty Corp. (XPL) is a company I’ve looked at on a number of
occasions, sometimes pretty closely. It’s also a company I’ve been asked about by several
subscribers switched onto the base metals/zinc scene over the months and years and on
receiving them I’ve sent back variations on “I pass” messages. But times change as do market
dynamics and I think the time is now ripe for a trade in this stock. The combination of the rise in
the price of zinc which has made it into an increasingly fashionable metal among (junior) mining
speculators, the upcoming publication of a PEA on XPL’s main Bongará project in Peru and its
strong corporate fundamentals and shareholder-friendly track record all fit. That’s the reason
behind the buy call, as revealed in Friday’s Flash update (see Appendix 1).
Today’s NOBS report (for those of you just joining us, since 2009 “NOBS” at The IKN Weekly
has stood for “No BS”) isn’t going to be one of the long-winded varieties we saw with Minera IRL
recently, for example. I’m going to try hard to keep it succinct for today, cover the main points
and get to reasonable, though not scientifically generated, target price. I expect XPL to be a
trade for 2017 (not long-term, not near-term) so there will be time and column inch space to
expand on details in the future. So on with the show, starting with corporate stuff:
Management and share structure
XPL is led up by CEO Christopher Herald, a long-term mining executive with fine credentials
and about which I’ve received plenty of positive feedback during the DD on XPL (interestingly, I
even received non-solicited testimonial to CEO Herald’s abilities this weekend after announcing
the purchase in Friday’s Flash update). Management has reasonable skin in this game with
around 8% of shares outstanding. Other large/insto
XPL: Shares outstanding
holders include Newmont, Sprott, AGF and Vanguard
and between those names around 30% of shares are 40 39.248 39.248 39.314 39.314 39.169 38.995 38.763 38.745 38.694 38.687
39
locked up. On the subject of shares, I’m going to
38
feature the shares out chart here at the top because 37
it’s an unusual situation: 36
35
34
Not only is the share count remarkably low and it’s
33
been that way for a long time (2011 34.2m, or if you 32
like 24.7m in 2005..no rollbacks either), but in recent 31
quarters it’s actually been shrinking as XPL not only 30
announced a share buyback program but, unlike
most juniors, has actually been acting on it. Since
3q15 XPL has extinguished 627,000 shares, with
current count at 38.687m. Almost as notable, there are no options and no warrants outstanding.
3
41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1
m S/O
source: XPL, IKN ests

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Company assets
XPL has three things that we like a lot:
1) Lots of cash: In mid-2015 XPL sold one of its properties at a very decent profit (see below)
and turned it’s balance sheet rock solid. As at the latest filings for 4q16 (Dec 31st) XPL has
U$15.4m in cash/eq, no debt and its underlying burn rate means
it could go for many years without the need for more cash (at
least six, possibly up to ten).
2) Bongará: In fact Bongará is a word that covers three different
aspects of its concession up in the Amazonas region of North
Peru. There’s the main 12,600 hectare area known as Bongará,
(green on that map right) there’s the main deposit held inside
Bongará called Florida Canyon (red) which has a 43-101
resource and is the main asset held by the company (more
below) and wrapped around the Bongará concession it has
another large land package, known as Chambara (grey and
yellow, the yellow bits very recently added (1)), which is 200km
by 85km and according to the company and its JV Partner Milpo
(majority owned by Brazil’s Votorantim) is also prospective
ground for zinc deposits. All in all this is a massive land package
so consider Chambara to contain Bongará to contain Florida
Canyon and be aware that there’s plenty of exploration ground
for elephant hunting aside from the known resource.
3) Other assets: Aside from its cash and flagship, XPL has a
selection of other land assets that don’t get much attention (the
best is probably the ‘La Promesa’ silver project in Peru, under
option to Newmont), a small 100,000 shareholding of Kinross
(KGC) (K.to) and a more interesting share position in another
lead/zinc junior, Vendetta Mining (VTT.v). These aren’t the
things that will make or break an investment in XPL, the reason to own this stock is clearly the
prospects of Bongará (plus that cash backing) but before zeroing on on the investment thesis
here’s a quick aside on the shareholdings´ story.
The K shares comes from a previous transaction, have been held through and are a minor pat
of the story (though it should be noted that XPL has made a little revenue over the quarters by
writing covered calls on its position, a sign of switched-on management).
In May 2016 XPL spotted a bargain and paid $289,000 for 7.24m units of VTT.v in a placement
offering at 4c per unit (1 unit = share plus full warrant at 10c). VTT owns the Pegmont lead/zinc
project in Australia, since then it’s drilled and found good mineralization (eg a recent 14.77m of
11.91% Pb+Zn) and as a result of the market pick
up and good exploration results, here’s what VTT
shares have done (right). Those four cent shares
are now worth 22c and the 7.24m warrants are
deeply in-the-money too. Yup, very nicely timed
and XPL owns a tiny fraction under 10% of that
company, thanks to its well timed investment.
Adding in the Kinross shares, as at end 4q16 its
marketable securities position (VTT.v + KGC) was
booked mark-to-market at U$1.339m, in other
words it had doubled from the day in 2016 it
bought VTT shares. Very cool but that’s not all,
because today those shares are now worth around
U$2.37m. In other words the position is up nearly
U$1m in the last quarter and this alone covers background burn and the extra expense it’s
incurring by paying for a PEA on Bongará. So although a minor part of the story it’s one that’s
paying off nicely and it shows the competence of this management team.
4

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With that covered we now concentrate on the two principal matters, XPL’s financial position and
Bongará (and what it might be worth).
Financials overview
We dive straight in, using ‘usual suspect charts but because XPL really isn’t that complicated a
story to get a handle on, not to many and no blinding with science today. What really matters
here are the balance sheet items because they provide a great window on how this company is
run (hint: very well).
This is the overview assets chart and it’s one of my all-time favourite asset visuals ever,
because once you understand the bars and colours here you understand what’s been going on
at XPL for the last three years and what we can expect from the company soon. Notes below:
XPL: assets
20
18
16
14
12
10
8
6
4
2
0
5
41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1 tse71q2
other current
fixed
$m Cash Eq, S/T inv
Cash
XPL filings, IKN ests
There are four colours:
• Grey shows fixed assets, i.e. properties held by XPL.
• Red is cash and equivalents, i.e. liquid treasury
• Green is cash equivalents short-term investments, e.g. term deposits paying a little
interest, US treasuries etc
• Yellow is “other current”, e.g. the marketable securities positions in VTT.v and KGC.
Now for the chronology:
• In the first three quarters to 2q15, grey was the dominant segment of assets holdings.
Then during 3q15 XPL sold its main asset, the Mount Hamilton gold project in Nevada,
to Waterton for U$24m in cash as well as the
• U$8m debt it owed to Sandstorm (SAND) on the property, due in 2022. You can see
how that affected the balance sheet very clearly, fixed assets became cash.
• The last two quarters of 2015 saw the red section dominant, as XPL has all that cash in
its current accounts, dollar bills stuffed under mattresses etc.
• Then in 1q16 XPL decided to move that cash into short-term investments and money
market securities (at present roughly half that total is in US Treasury bonds, the rest is
money market etc). Good housekeeping if you’re not about to spend the cash on
something else.
• That situation continues to this day, but we are now seeing changs to the mix. First
we’re seeing “other current” starting to grow mostly thanks to the smart investment in
VTT.v. Second I’m going to guess (but frankly I’m not sure, what with Bongará minority
owned by XPL) that the cost of the PEA will be capitalized by XPL. Also, we’re seeing
cash/eq/STInvs drop as the company burns through cash.

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And that’s XPL over the last couple of years, all in one chart. There are other things, such as
the fact typical background burn rate is quite high at XPL for this type of company, but I don’t
see it an as issue. For one thing it has a lot of cash and liquidity won’t be a problem for many
years. Another is that management should be rewarded for a good job done so if they pay
themselves more than others and get expenses
benefits, fine by me because they’re worth it
(check out the way they’ve created value via
that VTT purchase again).
To finish up this story with more good news,
here right is the liabilities chart which shows two
things. First that as of today there is basically
none at all (a perfect situation) and second the
way XPL paid off all its debts at the time of the
sale of Mount Hamilton, as not only did the long-
term liability go away but also XPL paid down its
near-term debts.
And that means working capital is as strong as you could desire:
XPL: Working capital
20
18
16
14
12
10
8
6
4
2
0
-2
-4
-6
6
41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1 tse71q2
XPL: Liabilities
20
18
16
14
12
10
8
6
4
2
0
$m
XPL filings, IKN ests
From negative before the sale, XPL has kept things very liquid, held onto its dry powder and at
as end 4q16 filed a working cap of U$16.673m. I’m expecting some burn in 2q17 due to
payment of the PEA, but it’s still an IKN estimate of just under $15m for a company that burns
maybe $2m a year.
On that subject, the only non-balance sheet chart I’m showing you today. I’ll tell you without
batting an eyelid that the estimated columns for 2017 are best-guesses only. I’m assuming the
PEA costs a total of U$2m to the company (a good friend in just this type of business estimated
$1.5m, I prefer to keep it to the conservative side) so the G&A and exploration columns reflect
that addition as an aggregate of 1q17 and
2q17 to normal background burn. But it’s
just that, guessing Notably, DD&A is virtually
zero, there are no significant moving parts to
this company (it means office must be
skeleton-type).
And that’s the financial essence of XPL.
What we have is an extremely well-run
company with bundles of cash covering over
half of its U$31m market cap and a share
structure that couldn’t be more shareholder
friendly. Background G&A burn is high but
that’s easily forgiven, you have to reward
quality. Overall this is one of the neatest and
best looking sets of books I’ve come across
in the mining world, this is a company in an optimum financial and corporate situation and the
41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1 tse71q2
$m
LT debt
current debt
source: XPL, IKN ests
XPL: Expenditures breakdown
2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1 tse71q2 tse71q3
$m
G&A
Exploration
Deprec/amort
source: XPL filings, IKN ests

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type of structure that lets success directly reward shareholders via equity upside. Now it’s time
to examine the reason why this stock isn’t just one to hold, but one to buy.
The Bongará project
Now for the once-over on XPL’s flagship, Bongará. The property, in the North of Peru in the
middle of jungle, was staked and discovered by XPL itself back in the mid-90’s. The company
then advanced development by itself and in JV with Cominco (now part of Teck) in a period
covering a decade or so until in 2006 it signed a new JV deal with Brazil’s Votorantim. That deal
was transferred by Votorantim to Peruvian company Milpo when Votorantim took control of it in
2015 (after adding to its holding recently, Votorantim now owns around 80% of Milpo). The JV
deal, which is still active, mans that Milpo currently owns 61% of Bongará and XPL owns the
other 39%. That ratio changes to 70/30 when Milpo completes its obligations, which include
funding the whole project to pre-feas and construction decision stage, at which point the JV
partners fund the construction pro-rata (though Milpo has to help XPL find its end of the
funding). Up until recently it was difficult to access the Bongara site, with the last 30km or so
from the nearest town taking around 10 hours by 4x4 (or helicopter was used), but in the last
year Milpo has driven in a 30km dirt track road which has improved access enormously. Water
is plentiful (duh), power supply isn’t (assuming a mine, power cable could be strung along the
new road), local communities have little experience in mining so qualified mining workers need
to be shipped in from other parts of Peru.
The main target at Bongará is called Florida Canyon
(not to be confused with Rye Patch Gold), which is
in the middle of Bongará and covers a surface
footprint of around 2.5km by 1.3km. Over the
years, either XPL or is partners have put nearly 500
holes worth nearly 120,000 metres of drilling into
Florida Canyon (and some outlying Bongará land) to
a value of around U$60m. That’s a lot of drilling
and it also means Bongará has a 43-101 compliant
resource. The latest iteration came in March 2014,
via a technical report complied for XPL by the
decent third party company SRK. Although just an
initial technical report, it’s a very complete
document that runs to 171 pages (some technical
reports can be just a dozen) and is well worth
digging from SEDAR if you’re interested in this
company. But to cut to the chase I’m going to take
just two screenshots from the report. First this above, a photo of the Bongará project area.
Yup, that’s jungle. It’s also an area between 1,800 metres above sea level (5,900 feet) and
3,200masl (10,500 feet) so there’s lots of elevation changes as you can make out on that photo
(Spanish has a wonderful phrase for this type of terrain, “muy accidentado”, literally meaning
“very accidented”). In short, not the easiest place in the world to go mining.
The second screenshot is this, the resource table snipped straight from that 43-101. Plenty of
notes below:
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• This is very high-grading rock. There are plenty of examples in that table, but one
example is the overall Measured and Indicated (M+I) resource grade of 15.1% zinc
equivalent (ZnEq). Of that, 12.77% is straight Zn which means that of the total 925.3M
lbs ZnEq, 782.7m is zinc.
• Neither XPL nor compilers SRK are allowed to add together M+I and inferred
resources, but we can. When you do you get 3.413Bn lbs ZnEq and again, that’s mostly
straight zinc with some useful lead (Pb) and silver (Ag) kickers. Even if Milpo/XPL fail to
find anything else on their massive land package, they already have a high-grading/high
margin deposit to mine.
• The resource is comprised of 63% sulphide, 28% oxide and 9% mixed material types by
contained metal. As sulphides give better recovery rates, this mix affects things like cut-
off percentages.
• The parameters for this resource are very reasonable overall. Metal price assumptions
of U$0.95c/lb for both zinc and lead look very good compared to today’s spot prices and
though the silver price assumption is higher at U$20/lb, it’s the minor contributor of the
three metals. Overall, the zinc assumption number leaves a lot of room to the upside.
• Recovery assumptions are also reasonable with 93.1% for zinc sulphide and 73% for
the oxide zinc, then lead (84.8%) and silver (55.6%) for the sulphide material only, zero
recovery assumed for the oxide on those two.
• The cut-off level is calculated on an NSR basis and an overall mining cost of
U$51.30/tonne. That might be on the low side (in this terrain I’d prefer to see something
around U$60/tonne personally, it’s never going to be as cheap to mine here as as
Tinka’s Ayawilca) but the zinc spot price compared to price assumption more than
makes up for this. The resulting cut-offs are 4.1% ZnEq for sulphide, 5.0% ZnEq% for
oxide, and 4.5% ZnEq for mixed material types.
Overall, what we have here is a great looking deposit that may be remote, but its high grade
makes it economic. And put in context of the JV, if we assume Milpo does the work it needs to
get its participation up to 70%, it means that XPL is getting a free ride on 30% of that deposit.
As the 43-101 stands today that’s 1.024Bn lbs of high grading ZnEq.
The upcoming PEA at Bongará
Early this year XPL engaged the compilers of the 2014 technical report, SRK, to come up with a
PEA (scoping study) for Florida Canyon. This is interesting on several levels and Here come
some bullet points on this development which may not be in any particular order, but the whole
fits together to make the current time window an interesting one for XPL shares.
The PEA is due delivered by the end of the second quarter, i.e. end June 2017. We’re three
months maximum away from seeing news on this document (then another 45 days max before
it gets published to SEDAR.
As noted above in the financials section, I’ve assigned a cost of U$2m to XPL for this report
though it may come in quite a bit lower than that. It’s interesting that XPL is engaging and
paying for this third party PEA, because we should remember that it is fully carried to
construction decision by the terms of the JV. Why then, should it shell out good money for a
report like this when it doesn’t need to? Part of the answer is to consider the reasons XPL gives
for the PEA and to quote from its own documentation...
The focus of the study will be to characterize the economic potential of the
sulfide component of the mineralization.
...which says to me that it’s more interested in showing the world what it has here, rather than
proving it in-house or to its JV partner.
Indeed, that’s confirmed when you start a close read of the 2014 43-101 technical report. It’s not
8

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really the right place to quote large chunks of text but there is room for a couple of paragraph of
straight lift, because they really catch the eye in light of the upcoming PEA
“SRK acknowledges, after examination of the Project data set, that there have
been a significant number of technical studies completed by Votorantim, many
of which are beyond scoping level (preliminary economic assessment or
PEA), and some of which would satisfy Feasibility Study criteria. Therefore,
the work elements listed in Table 4 represent mostly Prefeasibility- and
Feasibility-level engineering and drilling to support those studies.
Votorantim is a private company and does not have an obligation to produce
NI 43-101 compliant reporting; however, the Project would benefit by having
future reporting prepared by Votorantim, who are directly involved in the
specifications of the test-work and studies and are therefore most qualified to
interpret and apply the results. At the juncture where Prefeasibility-level
engineering has been completed, the Project will likely warrant further public
reporting.”
Want that in English? Between 2006 and early 2014, Votorantim (now Milpo) did a lot of work
on Bongará and a lot of it was technically sophisticated, way past the level of an initial scoping
study. That’s one reason why SRK could run its baseline technical report to 171 pages back
then, but it also means that whatever we see in this upcoming report, there’s going to be very
little indeed that wasn’t known already by the majority JV partner. And as XPL has access to the
same data as its JV partner, it’s not going to get new information on its major asset, either
Therefore, if the upcoming PEA isn’t being written for the benefit of education at Milpo or at
XPL, who is it being written for?
Answer: Us.
Milpo has been slow in moving Bongará forward, it’s not a project on many people’s maps
outside of these two companies and it’s certainly not one of the “hot zinc stories” we’re getting
bombarded with in 2017. What this upcoming PEA implies is that the situation is about to
change and XPL is keen on getting column inches and news written about its high grading Peru
zinc project. And although the decision to fund and publish a PEA came before the big part of
the move, I’m quite certain XPL has watched the ay TK.v has moved up over 200% in the first
three months of 2017 and thought about catching the same train.
Discussion
It’s easy to see the value in XPL today, it’s difficult to assign a target price. What that means
can be broken down like this:
• XPL has 38.687m shares out (and no options, and no warrants). Therefore at its
U$0.804 price this weekend XPL has a market cap of U$31.1m, or a little over
42c/share of cash.
• As XPL has an IKN Weekly estimated working cap of U$16.4m as at end 1q17,
everything else it owns (which I’m going to call “Bongará and be done) is valued by the
market at U$14.7m
• If we assume Milpo at 70%, 30% of Bongará puts 1.024Bn lbs ZnEq in the hands of
XPL
• Therefore, XPL’s in-situ rocks are currently valued at 1.4c/lb ZnEq.
And that looks incredibly cheap to me. If it were low grading I may not agree and if XPL had to
run its treasury position down in order to fund development I may not agree, but even taking into
consideration its remote location, these are high grading and high margin tonnages that won’t
cost XPL a penny to get to a construction decision. To give an idea of the margins involved,
here’s a table that shows what that rock’s worth at various Zn spot prices:
9

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XPL at Bongará: Estimated Zinc Equivalent (ZnEq) value per tonne
grade Various spot prices/lb, assuming 90% recoveries, sulphides only
% ZnEq $0.90 $1.00 $1.10 $1.20 $1.30 $1.40
10.0% 178.57 198.42 218.26 238.10 257.94 277.78
11.0% 196.43 218.26 240.08 261.91 283.73 305.56
12.0% 214.29 238.10 261.91 $285.72 309.53 333.34
13.0% 232.15 257.94 283.73 309.53 335.32 361.12
14.0% 250.00 277.78 305.56 333.34 361.12 388.89
15.0% 267.86 297.62 327.39 357.15 386.91 416.67
source: IKN calcs
• We assume 90% global recoveries (Zn is 93%, we need to take into account the small
but lower recovery Pb and Ag products).
• We go with the current U$51.30 mining cost assumption (but it can obviously handle
higher).
• The PEA will look at the sulphide material only, so do we.
• We use different ZnEq grades and spot prices.
And what we see is very rich rock. Anyone who can’t turn a profit on that, even with a tough
road between mine and port, shouldn’t have gone into mining in the first place.
It’s my contention that XPL knows very well that Florida Canyon at Bongará is a valuable asset
in absolute terms and becoming very valuable indeed in light of the new bull market in zinc, as
well as the market’s new appetite for zinc stories. This isn’t some Hail Mary pump vehicle either,
it’s a real and advanced deposit under 43-101 compliance owned by a serious company that’s
stood the test of time (without diluting its shareholders), but I also contend that XPL must bee
feeling frustrated to be in a JV with a large player such as Milpo that takes its sweet time about
everything and though it has a whole stack of detailed technical reports, has no requirement to
release them to market and show the world what is here. Therefore XPL has taken it upon itself
to spend $1.5m or $2m, get in SRK (that did a great job before) and prepare a document that
XPL can use for promotional purposes. Not BS hype promo pumping, but real honest promotion
of an obviously interesting and undervalued company.
And I want to own XPL before the promotion begins. As for how high it might go, in-situ metal
value is hardly my favourite method of doing these things (people use this method to include
low grade, economically marginal tonnages and then claim Northern Dynasty (NDM.to)
/International Tower Hill (ITH.to)/ Chesapeake(CGK.v)/ Vista(VGZ.to)/ Exeter(XRC.v)/
Goldmining (GOLD.v) etc is a wonderful buy), with these high grades it’s more valid. Therefore
if we assign the dollar prices you see on the left to the ZnEq at Bongará, then assume...
• XPL controls 1.024Bn lbs ZnEq
• It has 38.7m shares out
• It has 42c of cash per share
...we get the following price targets:
XPL: In Situ valuation (U$)
$/lb in situ ZnEq XPL share price
0.01 $0.68
0.02 $0.95
0.03 $1.21
0.04 $1.48
0.05 $1.74
0.06 $2.01
0.07 $2.27
source: IKN calcs from XPL data
And yes, I’ve picked out the 4c/lb and 5c/lb lines because although I’m keenly aware it’s up for
10

,
debate, I think it’s the type of valuation these high grade tonnages can reasonably command at
market today, especially (and to labour the point) when we take into account XPL gets a free
ride to the construction decision. By way of a comparison, the big market hotpot zinc story of the
last 12 months is Arizona Mining (AZ.to), which is on the cusp of publishing its own PEA, is
currently valued at 6c/lb ZnEq (at a 4% cut-off and average 11% head grade, similar to
Bongará). Most people assume the AZ deposit is going to grow substantially in size come the
PEA so that in-situ price will come, but things are not the same here and AZ has very high burn
rate, plenty of permitting issue etc etc).
Conclusion
We’re in a three month window of opportunity for XPL shares. Thanks to the rise in the price of
zinc, projects that looked like higher operating cost propositions such as Bongará are now
obviously economic. XPL has commissioned its own PEA on its own coin because it’s probably
a little bored being at the behest of the larger Milpo/Votorantim, has seen the new surge in
interest in zinc names (which has only accelerated since it got SRK on the job) and wants a
piece of the action. The rock tonnage calculations show there’s plenty of money laying
underground at this project and with a PEA, XPL can go out and show the rest of the world that,
too. Between now and the publication of the PEA is the time to accumulate these shares and
that’s what I’m going to do.
The IKN Weekly recommends
Solitario Exploration & Royalty Corp.
(XPL) (SLR.to) as a buy and sets a
rounded U$1.50 price target on the
stock for 2017, representing an 86.6%
upside to this weekend’s price of
U$0.804. This stock has been very
quiet for a long time but, due to its PEA
catalyst and the new appetite for zinc
stories out there, I believe this is about
to change. But most importantly, XPL
won’t be trying to sell a promo BS pump
story to the world, this is a company
and an asset with real substance and a
lot to offer. I’m a buyer this week and
XPL will take its place on the ‘Stocks to Follow’ list as from next weekend, a worthy and valid
second zinc position that will sit under our main Tinka (TK.v) trade.
End of Report
Stocks to Follow
Of the 15 stocks that were open on the list this last weekend, seven of them registered gains
on the week (REG.v, CDB.v, ATY.v, TK.v, BSX.to, EXN.to, SAM.to), one was unchanged (RRI.v)
and seven gave us losses (BTO.to, SAND, MIRL.cse, R.to, RPM.v, ERC.v, LRA.v). There was one
double figure percentage loser in Minera IRL (MIRL.cse down 16.7%), whereas there were
three double figure percentage winners thanks to Tinka (TK.v up 19.2%), Cordoba (CDB.v up
15.3%) and Atico (ATY.v up 12.0%).
Overall it was a winning week for the list and my personal back pocket, because the larger
losers were the small holdings, BTO only lost 4c and the bigger winners more than made up for
the slack. However it must be said, in a week where GDXJ rose 4.6% and GLD by 2.0% the
selections below make for a generally underperforming portfolio that was saved by a couple of
stocks with out-sized rebounds. Must try harder.
11

,
With the sale of Belo Sun (BSX.to) we now have 14 open positions on the ‘Stocks to Follow’ list,
one below our self-imposed maximum number at any given time. However that will change
next week with the addition of Solitario (XPL). Eight of the positions are in the green, one is
unchanged, five 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$3.98 88.6% tgt $5.30 Top Pick prod.
Regulus Res REG.v STR buy C$0.64 06-apr-15 C$1.46 128.1% LT exploreco top pick
Long positions (in current order of preference)
Sandstorm Gold SAND STR buy U$3.87 17-apr-16 U$4.11 6.2% $7 tgt, added March'17
Cordoba Min. CDB.v STR buy C$0.73 15-sep-16 C$1.36 86.3% $1.50 tgt hit, rebounding again
Atico Mining ATY.v buy C$0.54 24-jul-16 C$0.84 55.6% tgt $1.10, Cu play
Tinka Res TK.v buy C$0.195 19-apr-16 C$0.62 217.9% Was under-radar; no longer!
Excellon Res EXN.to STR buy C$1.71 09-oct-16 C$1.60 -6.4% $3.13 tgt, Ag growth story
Minera IRL MIRL.cse buy C$0.195 22-jul-12 C$0.15 -23.1% tgt 53c, risk + much reward
Red Eagle Min. R.to STR buy C$0.72 13-dec-16 C$0.75 4.2% Ramping up, great March buy
Starcore Intl SAM.to hold C$0.61 10-jan-15 C$0.50 -18.0% ex-Top Pick, reduced, holding
Rye Patch Gold RPM.v hold C$0.31 02-sep-16 C$0.295 -4.8% 75c tgt IKN400, doubts arising
Eros Res ERC.v spec buy C$0.18 01-mar-17 C$0.18 0.0% New position, deep value
Riverside Res RRI.v sell at 60c C$0.39 27-jun-16 C$0.50 28.2% Will take profits at 60c tgt
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.98 -14.8% decision post-PDAC
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
Belo Sun BSX.to Mar'17 C$0.90 30-jan-17 C$0.90 0.0% failed near-term flip trade
2009 to 2016 annual closed positions in appendices below
Now for notes on some of the current basket stocks:
Belo Sun (BSX.to): Position sold. As per the plan, this trade is now closed and gone. I
managed to break even on the straight number, having stuck an ask on the price which filled
thanks to that nice Ms Janet and her FOMC pals (thanks Janet), but it’s stil a loss due to
commish paid and opportunity cost. It’s potentially another trade down the line once the legal
barrier is lifted, so I’ll keep an eye on newsflow coming out of that corner of Brazil. Until then, a
salute for a failed trade. It won’t be the last one.
Tinka Resources (TK.v): Here’s how we finished the write-up on Tinka in IKN408 last week:
“...the stock has grown wings, found new fans and started to move higher. The key
word there is “started”. There could be a lot of upside left in the current move. Hold
them all, don’t sell a one.”
Here we are at 62c, another 19% added week-over-week to the company valuation and
continued high volumes that scream of a market falling in love with its new fashion stock Good
thing, too. If you’re like me and long at much lower prices, don’t even think of selling your
shares. When runs like this start they can surprise even the most optimistic observer and to
answer you by quoting a reply I sent to one of you on Monday, “I wouldn’t bat an eyelid about
C$1.00)”.
12

,
Sandstorm Gold (SAND): Might add. How this one failed to return a weekly win is beyond
me. SAND was trading merrily early week and held gains all the way through to the last hour of
Friday, when some liquidation or other (perhaps connected with that TSX rebalancing?) saw it
dive back to U$4.11 finish. No matter and once again a quick line here to underscore I’ll add
some if it gets down to U$3.90 on a down spike.
In fundies news, SAND announced (2) it was investing a modest $1m in Tower Resources
(TWR.v), a small junior with early stage properties in BC Canada. They must have seen
something they like in the rocks there and have committed $500k to a share placement (3.44m
units at $0.145 each), plus another $500k to buy a 2% NSR on most of the properties.
Red Eagle Mining (R.to): There are still obviously nerves about the negative rumours floating
around R.to, you can see it in the way it
traded on Friday and it even managed to
lose a penny on the week due to the
asthenic finish. No worries folks, the only
thing that matters here is a declaration of
commercial production at the end of the
month, now less than two weeks away. It
beats me why the market suddenly fails to
believe that this company can pull it off, as
R.to has knocked down every single barrier
between them and a working, profitable
mine that you can imagine and all inside
their own very tight timeline.
Riverside Resources (RRI.v): Still selling at 60c. As expected RRI closed its financing
round in good style last week and raised over $3.3m in gross proceeds. We even saw Rick Rule
picking RRI out of the pack and singing its praises in a Sprott’s Thoughts piece on royalty and
prospect generator plays. That’s probably because RRI offered him up some warrants in this
last placement.
B2Gold (BTG) (BTO.to): There’s a change to the planned coverage today and the only real
concession I’m making to that damned bout of food poisoning last week that laid me up for two
days (all better now though and thanks for the mails people, greatly appreciated and I know I
forgot to reply to a couple of them, too). I originally planned a deep look at BTO this week,
with forward projections and thoughts on
what The Clive and his people are
promising us for 2017 and 2018 and framed
it that way in IKN408 last week. Due to a
simple lack of time in my working week last
week (illness) plus the decision to pull the
trigger on Solitario I’m going to defer it
until IKN410, please forgive. As for the
results and the way the share price wilted
slightly afterwards (and didn’t join in the
late Friday rush), overall the results really
weren’t that bad, they just didn’t sparkle.
Once the market’s done with looking
backwards and sees Fekola is getting built
and coming on line, the slightly lacklustre
4q16 will be a thing of the past. More next week, promise and apologies once again.
Eros Resources (ERC.v): The good thing here is volume, ERC is beginning to see six figure
volume trading days and that’s just what the doctor ordered for this stock. We’re still bouncing
around the 18c and 19c range (in fact it saw action at 17c and if I hadn’t been so under the
13

,
weather I may have taken some, apathy won out) which is fine, I have some room to add here.
Minera IRL (MIRL.cse): The NR from last Friday evening, discussed in some detail during the
NOBS report part two in IKN408, obviously affected trading in IRL more than I anticipated. IRL
was a 15c and 16c virtually all week and one notable seller was Canaccord, who threw 100k
chunks at the bid midweek. It’s obviously sheer coincidence that Canaccord UK were the pieces
of crud in cahoots with Daryl Hodges that first withdrew NOMAD support then stuck legal
barrier after legal barrier in IRL’s way to stop the company from hiring a different NOMAD,
thereby forcing it to suspend its listing indefinitely. Crudballs.
No matter, IRL has got over problems 100x the size of this kind of balderdash and in other
news, we hear that negotiations on financing the Ollachea project are moving forward on
several fronts, with plenty of interested counterparties. None of them are Canadian brokerages,
thank God.
Atico Mining (ATY.v): Last week, “Hell’s Bells it’s cheap!”. This week saw any price with a 7
handle evaporate quickly as ATY bounced along with copper and come the end of play the
typical trade was in the mid to high 80s range. For my taste (and assuming copper doesn’t do
crzy things) it’s going to consolidate around this level for the four weeks until we get its 4q16
financials, that’s the time you should be fully locked and loaded for the strong numbers and
guidance we’ll get.
Cordoba Minerals (CDB.v): This is the way a market-leading stock (well okay, a sub-sector
leading stock, in this case junior copper explorecos) trades into a rebound. CDB reportedly
found new money too from the BNN
TV advertising campaign that kicked
off (see it here (3)).
Regarding that BNN advert, I didn’t
even know it was running until
getting a mail from reader ‘R’ who
asked whether it was a good idea to
have a junior blowing its cash on an
expensive advertising campaign. I
thought that a fair query, so I asked
CDB CEO Stifano about it and the
answer was both surprising and
interesting. The slot taken by CDB
on BNN is for three weeks of
exposure for its 15 second
commercial and costs just C$7,000.
It’s generated at least four broker leads as well as retail interest and for that cash (less than
you’d give a lazy third party IR firm), it sounds like tremendous value for money to me. Stifano
agreed, calling it (and I quote) “...the best marketing money I’ve spent”. CDB is now looking to
use the BNN slot again, the next one available is May.
I had no idea Andrew Bell was this cheap ☺.
The Copper Basket
After eleven weeks of 2017, The Copper Basket shows a 17.31% gain to level stakes.
14

,
company ticker price 1/1/17 Shares out Market Cap current pps gain/loss%
1 Capstone Min. CS.to 1.26 382.04 595.98 1.56 23.8%
2 Imperial Metals III.to 6.06 93.587 575.56 6.15 1.5%
3 NGEx Resources NGQ.to 1.20 205.06 244.02 1.19 -0.8%
4 Western Copper WRN.to 1.86 94.19 163.89 1.74 -6.5%
5 Excelsior Min. MIN.to 0.63 167.364 135.56 0.81 28.6%
6 Amerigo Res ARG.to 0.345 173.61 128.47 0.74 114.5%
7 Copper Mtn CMMC.to 0.94 118.8 128.30 1.08 14.9%
8 Cordoba Min. CDB.v 0.73 88.6 120.50 1.36 86.3%
9 Regulus Res. REG.v 1.20 68.368 99.82 1.46 21.7%
10 Atico Mining ATY.v 0.95 97.59 81.98 0.84 -11.6%
11 Coro Mining COP.to 0.15 483.425 74.93 0.155 3.3%
12 Trilogy Metals TMQ.to 0.66 104.33 70.94 0.68 3.0%
13 Copper Fox CUU.v 0.125 417.64 60.56 0.145 16.0%
14 Nevada Copper NCU.to 0.77 80.5 57.96 0.72 -6.5%
15 Revelo Res. RVL.v 0.070 128.486 6.42 0.05 -28.6%
NB: All stocks priced in CAD$ Portfolio avg 17.31%
The Copper Basket recovered over half the previous week’s big loss and bounced back to the
tune of 7.19%, thanks to the count of ten
The Copper Basket 2017, weekly evolution
winners (III.to, CS.to, WRN.to, CMMC.to,
ATY.v, REG.v, TMQ.to, CDB.v, NCU.to, 30%
ARG.to) and four losers (NGQ.to, MIN.to, 25%
COP.to, CUU.v) with just one unchanged stock 20%
(RVL.v). There were big winners too, led by 15%
Amerigo (ARG.to up 21.3%) and ably assisted 10%
by Capstone (CS.to up 15.6%), Cordoba 5%
(CDB.v up 15.3%), Atico (ATY.v up 12.0%) 0%
and Trilogy (TMQ.to up 11.5%). All in all,
quite the rebound for our sub-sector of
smaller end copper stocks.
The rally was driven by the rebound in the
price of copper, as seen in this five day chart.
After the heavy drop suffered in that
inventory-fuelled bear attack of the week
before, copper did...well, no false modesty, it
did what I expected it to do and come the end
of the week it was just a lick and spit under
the U$2.70/lb line once again.
Copper prices were helped by the return of
healthy inventories action in Asia (see below)
as well as the ongoing strike at La Escondida
and now the Cerro Verde strike, which
managed to last through the week (though I
strongly suspect the weather was a big part of
that, neither side wanted to work in the kind
of crappy weather I’ve been suffering this last
seven days and now the city of Arequipa’s
water supply has been cut off due to
upstream landslides).
Now for the regular weekly copper warehouse inventory bullets:
15
ts1naJ ht8naj ht51 dn22 ht92 ht5bef ht21 ht91 ht62 ht5 ht21 ht91
source: IKN calcs

,
• Not the move of last week but overall world stocks moved modestly higher over the
week, up 13,339 metric tonnes (mt) (+1.7%) to finish Friday at 785,971mt. The calm
after the storm.
• SHFE Shanghai stocks in fact lost a little, down 1,454mt (-0.4%) to close at 325,278mt.
It was this week last year that saw SHFE stocks peaking and the timing here looks the
same. This event certainly helped shore up the copper price and help its rebound.
• At the LME we saw another overall rise, but nothing like the bear attack of the week
before. There are still games being played, because the bear side managed to
neutralize some 40,000 tonnes of stock that immediately left the LME warehouses and
add another ten thousand or so, but it wasn’t a show of strength to strike fear into the
hearts of bulls and, along with the topping signals from SHFE (above) the copper price
recovered accordingly. Stocks rose 12,100mt (+3.7%) and finished the week at a
grand total of 337,600mt in inventory.
• While at the Comex, stocks edged up again by 2,693mt (+2.2%) to keep its long-term
growth trend intact and finish the week at 123,093mt. Trend the friend.
Here’s the Shanghai-only chart and as mentioned above, it looks as though the stocking cycle is
now finding its stall point. That’s interesting, we’re still 70,000k tonnes off the peak of last year
(which was on this same third week of March, to boot).
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 ht5beF ht21
Mt Cu
source: Cochilco
Now for notes on a couple of basket stocks:
Capstone Mining (CS.to): Look what
crapstone did in the last hour Friday, another
one of the big moves up on block volume that
came as the index and its tracking devices
rebalanced. As mentioned in today’s intro, CS
was one of several TSX stocks that really got
motoring late Friday, others including Wesdome
(WDO.to), Alamos (AGI.to), Gold Standard
(GSV.to), Klondex (KDX.to) just a sample of the
stocks that enjoyed a bounce on late volume at
the end of the week.
Amerigo Resources (ARG.to): ARG powered
right back after last week’s big loss and it’s worth noting that the stock started the year in
thirteenth position on our market cap league table. It’s now up to 6th and snapping on the heels
of the two above it, as well.
Just goes to show what I know, I wouldn’t have given this mediocre small operation an earthly

,
chance of performing the way it’s done in the first quarter of 2017, copper bullishness or not.
Trilogy Metals (TMQ.to): A nice percentage move and more importantly, a bit of volume
flowing through TMQ last week with 70k shares traded Friday. This is what this stock needs,
trading interest. If not, any price rise will be doomed to another failure.
NGEx Resources (NGQ.to): Now officially an underperformer and down YTD as well, NGQ is
being hit by its exposure to Argentina and specifically, the way its concessions may (more likely
will) be affected by the country’s so-called Glacier Law (McEwen Mining (MUX) big Loz Azules
copper project suffers from the same fate, by the way).
The Producer Basket
After 11 weeks of 2017, the Producer Basket shows a gain of 8.31% 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 21.97 18.85 18.0%
2 Newmont NEM 34.07 530.595 17.42 32.84 -3.6%
3 Goldcorp GG 13.60 832.381 12.75 15.32 12.6%
4 Franco Nevada FNV 59.76 178.01 11.50 64.60 8.1%
5 Agnico Eagle AEM 42.00 223.475 9.47 42.37 0.9%
6 Ang/Ashanti AU 10.51 405.27 4.38 10.81 2.9%
7 Royal Gold RGLD 63.35 65.281 4.23 64.84 2.4%
8 Kinross Gold KGC 3.11 1245 4.23 3.40 9.3%
9 Buenaventura BVN 11.28 254.19 3.25 12.78 13.3%
10 Sibanye Gold SBGL 7.06 228.71 1.93 8.42 19.3%
Prices in U$, NYSE or NASDAQ tickers Portfolio avg 8.31%
Up 4.99% with nine winners and just one week-over-week loser, the now clearly lagging
Newmont (NEM). As for the winners, the
biggest percentage moves came from the The 2017 Producer Basket: Weekly performance and
stocks at the lower end of the market cap 25% comparative to GDX control
table, with big leverage moves from Sibanye
20%
(SBGL up 11.8%), Buenaventura (BVN up
8.2%) and AngloGold Ashanti (AU up 8.0%). 15%
10%
Overall our basket did well last week and has
5%
all-but caught up to the GDX benchmark, just
six hundredths behind thanks to those 0%
outperforming smalls (and not having NEM as
an overweight like the GDX does).
Newmont (NEM): There’s no way around it, Newmont is now the eyecatching laggard of the
gold sector. The only Tier One stock to managed a week-over-week loss while GDX rose 4.3%
and gold 2%, there’s something amiss here and if I followed the bigcaps more closely I’d have
a smarter word or three to give you, as such I’m too dumb to attempt an explanation.
Regional politics
Peru weather news and views
The bad weather that’s hit Peru so far in 2017 has got much worse in the last week or ten days,
with selective emergency decrees being issued by the government for areas badly affected,
schools closed until further notice (a certain author’s children are happy), roads blocked all over
17
ts1naJ ht8 ht51 dn22 ht92 ht5bef ht21 ht91 ht62 ht5 ht21 ht91
basket
gdx control
source: Google, IKN calcs

,
the place and landslides/mudslides/river flooding killing people and making headline news, even
on a world level.
Things are pretty bad generally (personally I’m bored with the wet and the cold), but part of
the brief of The IKN Weekly is to be hard-nosed and mining-focussed so I’m not going to go too
deeply into the human and country cost angles, here we think mines and here’s the need-to-
know:
• Not all of Peru is affected and even in the heavy rain zones, impact will vary. Most of
the big infrastructure problems have been in the strip of geography between the coast
and the highlands, with floodwater running down the mountains and causing havoc to
people and residences, rather than mining company assets directly.
• Some main artery roads are cut off at the moment, due to floods, landslides and
bridges being taken out. Of chief concern this weekend are the roads that lead up to
mines in the Ancash/La Libertad/Cajamarca provinces in the North (e.g. La Arena, ,
Shahuindo, San Simon, Michiquillay) and the Central Highway that runs up the
Cordillera from Lima (e.g. Toromocho, Volcan’s mines, Coricancha, La Oroya, plenty of
others). Those roads are blocked this weekend and traffic is zero, but as long as the
forecast holds and rains die down as from Tuesday, logistical problems are likely to be
temporary and not affect mining operations too much.
• However, heavy rains typically affect open pit heap/dump leach operations and we may
see warnings on production from mines in those areas. Either that or excuses offered
when quarter-end production numbers are announced.
My best advice is, don’t assume the worst. If you have exposure to producer companies in
Peru, call the IR department and find out the on-ground situation for them, rather than guess
the mine’s been flooded or totally closed.
Mexico: The Revoking of the EIA for the Los Cardones gold project
New this weekend (4) is that the controversial ‘Los Cardones’ gold project in Baja Califormia
Sur, North Mexico, has had its Environmental Impact Permit (EIA) revoked by Mexico’s enviro
people, Semarnat. The 1.2m oz P+O Los Cardones project is owned by the Canadian/Mexican
private equity group Invecture (5), who bought it from Vista Gold (VGZ) for $10m in a
transaction that was first announced in 2013 and closed in 2015. It has been fiercely opposed
by local residents for many years and the licence revoke is due to Invecture not completing
necessary environmental work in the three years given to it.
Ecuador: Polls give Lenín Moreno a clear lead over Guillermo Lasso
So much for my “Lasso now favourite to be next President” statement of last week. Well
according to the polls at least, because on Thursday we had another survey which gives the
government candidate Lenín Moreno a clear lead over the opposition candidate Guillermo Lasso
(6). According to pollster Perfiles de Opinión (7), Moreno is good for 51.02% in the April 2nd
run-off vote on April 2nd, while Lasso os over 15 points behind at 35.53%. Meanwhile pollster
Diagnostico (8) puts Moreno on 48.36% and Lasso on 35.7%, over 12 points behind.
Unsurprisingly, President Rafael Correa only talks about these polls and not the Cedatos poll
that had Lasso in the lead, calling the former the “only serious polls” (8). Indeed there was a
shot at smearing the Cedatos poll result, as a pro-government media channel tried to link it to a
U$30,000 payment made by one of Lasso’s business associates to the polling company.
Fact is, I still don’t trust the polls we’re seeing. There’s still no logic behind trusting polls that
move Lasso’s overall vote up just 8% when the all main opponents to Moreno in round one
have fallen into line and exhort their followers to vote Lasso in round two. I like Rafael Correa
as a President (always have) and he’s done great things for his country’s economy during his
terms, but he’s nobody’s idea of perfect either and the ‘strongman’ part of his leadership (in
Spanish the word is ‘caudillo’) has come in for criticism both at home and abroad. I wouldn’t put
18

,
it past him to rig a couple of polls. What I will concede, however, is that my “Lasso now
favourite” call of last week may have been too much. I’m back to “too close to call”.
Argentina: Six months to the end of the Macri government
Okay, I admit that title line is a bit of an exaggeration, context is required:
• As the Macri presidential period runs to 2020, unless he does a De La Rua he’s not
going anywhere.
• The opinion polls we’re getting here in March have to run through to October.
• It’s eight months, not six.
But if what we’re seeing today doesn’t change, and the overly slow rate of recovery in
Argentina (much less than the Macri government forecast back in 2015 when their promises
won them a tightly fought election) strongly suggest things will not indeed change much, then
come October we’re going to see a big shift in the political outlook in the country that will
effectively turn Macri into a dead duck President. Mining investors beware, you’re not being told
everything by the people who want you into this country.
Polling company Analogías this week published a report on the upcoming mid-term elections
that focuses on the key province of Buenos Aires (NB: Don’t confuse the city of Buenos Aires
with the much larger and politically far more powerful province), here’s one of the key tables
from the report...
... here’s how media reported on it (9) and here are a couple of translated excerpts from that
report:
“An opinion study published by the consultants ‘Analogías’ during the first week of
March in various location of the province of Buenos Aires places Cristina Fernández de
Kirchner (CFK) as the winning candidate in all electoral scenarios.”
...
“The results show a victory for the candidate of he ex-President with 31.4% of votes. In
second place is the government candidate with 24.6%. Third place is the candidate
from the Masa-Stolbizer alliance with 18%, fourth place for Randazzo with 6.9%, the
left’s candidate with 2.8%.”
It’s worth reading further into the poll info because we already know that CFK is almost certain
to run herself for the job of Senador of Buenos Aires province and, according to the polls, with
CFK at the top of the ticket voter intention moves up further to 33.3%.
CFK has been all-but written off by the Northern press as a spent political force, the constant
spin about Argentina is how it has changed, it’s now business and FDI-friendly, ready to
become a serious country, et cetera ad infin. It’s not true, don’t believe it, what we’re seeing is
a relatively calm period in a Basket Case country that will come to an end. When it does, don’t
be exposed with your foreign cash in mining projects.
Chile: Latest on the La Escondida strike
The latest from the ongoing saga at La Escondida is that the two sides may decide to sit down
and talk to each other but the vibes from the Union this afternoon isn’t great. Management and
19

,
unions were scheduled to meet tomorrow Monday at 3pm Chile time, with the company willing
to offer more to the striking workers (at last), though not as much as they are demanding (e.g.
BHP previously offered an 8 million Peso bonus, they’re now offering 11.5, he workers want 25)
(10). Unions responded to this late Saturday evening by saying that management were being
“manipulative” (11) and trying to make the unions look bad without offering much more of
substance, and would decide whether to attend tomorrow’s meeting at the last minute.
We shall see what happens, but as the whole shebang hasn’t affected the copper price
anywhere near as much as the drama queen end of the commentary brigade expected, the
effect of any news of the end of the strike is likely to be temporary in nature. If we see a dip in
the price of copper on news Monday evening or later this week that La Escondida is going back
to work, consider it a buying opportunity in the sector.
Market Watching
First Quantum (FM.to) now willing to sell 100% of Haquira
During PDAC week we broke the news that Milpo is close to a deal to go JV with First Quantum
(FM.to) on its Haquira project in Peru (close to Las Bambas). That deal is still in play, but the
latest is that FM.to is now considering an outright sale of the project. The buyer may turn out
to be Milpo (we know they’re keen on the asset), but there are other companies out there with
deep pockets who have been scouring LatAm for a large copper porphyry to call their own, for
example Australia’s Fortescue.
FM is tight for cash it seems. Tighter than they want the market to imagine while they close out
the debt offering
Starcore 3q17 financials
Friday after the bell (uh-oh) saw our ex-Top Pick Starcore Intl (SAM.to) report its 3q17
financials (12), (though to be fair, they quietly filed on SEDAR a couple of hours before the
finish). We previewed the results in IKN405 dated February 19th, just after SAM gave us that
lacklustre production report, and in general terms what they’ve filed this week is in line to IKN
Weekly expectations that day.
On the production side a lot of the stats were pre-reported (see IKN405) so not re-hashing
them here but this chart, which shows the evolution of revenues versus cash costs per tonne, is
indicative of the financial situation we get below. On the right is the 3q17 (end January 2017)
result and though the San Martín mine is admirably constant with its costs, the reduced grade,
recovery and slightly low tonnage throughput we saw all point in the same direction, lower
revenues per tonne. The revs/tonne of $77 compare to costs/tonne of $51 and though it means
the mine itself is cash flow positive, its small size isn’t enough to support corporate level profits
this time (in the same way April 2016 returned losses, in fact.
SAM.to: Revenues/tonne vs cash cost/tonne
140
120
100
80
60
40
20
0
20
31.naj 31.rpa 31.yluj 31.tco 41.naj 41.rpa 41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj 61.rpa 61.yluj 61.tco 71.naj
$/mt
revs/tonne
cash cost/tonne
source: company filings, IKN ests
So to the financials and here’s the main operations overview chart

,
SAM.to: Operations overview
9
8
7
6
5
4
3
2
1
0
-1
21
41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj 61.rpa 61.yluj 61.tco 71.naj
$m revenues
COGS
mine op earnings
source: SAM filings, IKN ests
For this set of figures, in IKN405 I’d estimated revenues at CAD$5.4m and costs of CAD$6.2m,
resulting in a Mine Operating Earnings (MOE) of $-0.8m.
In the end the result was slightly different, with revs $6.164m, costs of $6.659m and a resulting
MOE of $-0.495m but the reason for that means my guesses were in fact very close. The
difference was that SAM incorporated operations from its Altiplano toll mill for the first time,
which bumped revs up by $0.756m. If it weren’t for that my guesstimate would have been out
by just $8k. The interesting bit is that if we assume my original costs number was close for the
San Martin mine, costs only went up by $0.46m which suggests Altiplano is running at a $300k
margin on this low level initial throughput. Ok I may have underestimated San Martin costs a
bit, but I’d bet Altiplano is already cash flow breakeven at worst. And that’s good, a sign that
the SAM plans for Altiplano to be self-funding and a stand alone source of cash flow are now
taking shape (at last, a couple of quarters
longer than I’d expected but here we are). SAM.to: Earnings
1.5
1
There were no big surprises in the Below The
0.5
Line parts of the P+E and pre-tax earnings 0
were booked at negative $1.741m. That -0.5
-1
compares closely to the IKN model forecast of
-1.5
negative $1.5m. As for net earnings, I’d
-2
guesstimated a $1m loss because SAM is -2.5
usually pretty good at finding ways of claiming -3
-3.5
back on operating losses via tax, but this time
they only managed to improve by $200k
instead of my best guess $500k. That means
net loss was $1.546m.
Just as you’d expect, the effect of that $500k extra burden to my forecast shows up over at the
balance sheet. I’d forecast working capital at $2.9m, it came in at $2.283m. That means the
IKN model is working, but it also means the projected thinning of the working cap position is
that much more fragile. When I look at this
chart, thoughts turn immediately to the
delayed closure of that real estate deal which
is supposed to put U$7m into the treasury of
SAM. We’re now at least four months overdue
on that, not good. In the MD&A just out, I
couldn’t help but notice how much emphasis
SAM placed on the MXN50m (approx U$2.6m)
non-refundable deposit that was placed in
escrow by the buyer. What this means is that
even if the deals falls through SAM gets cash,
but 1) it’s less and 2) knowing the LatAm
41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj 61.rpa 61.yluj 61.tco 71.naj
$m pre-tax earnings
net earnings
source: SAM filings
SAM.to: Working Capital per qtr
14
12
10
8
6
4
2
0
41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj 61.rpa 61.yluj 61.tco 71.naj
source company filings
srallod
fo
snoillim

,
litigation world, I’d be very surprised if SAM can get its hands on the cash quickly if the deal
goes sour (and there will be lawyers to pay on top).
As for the balance sheet overview, there was a a forex adjustment to fixed assets that brought
the line item down a bit, but no biggie.
SAM.to: Assets Breakdown per qtr
90
80
70
60
50
40
30
20
10
0
22
41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj 61.rpa 61.yluj 61.tco 71.naj
$m
cash st inv other current fixed
source: company filings
The debt position is okay (in fact current liabilities were cut $1m more than I expected, which is
good housekeeping. The liquidity situation is fine, SAM has more than $4m to play with
30 SAM.to: Liabilities per qtr
25
20
15
10
5
0
41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj 61.rpa 61.yluj 61.tco 71.naj
source: company filings
srallod
fo
snoillim
LT debt
current debt
So its only issue is paying back the loan it booted forward for 12 months (hello real estate
cash).
SAM: Cash & short-term investments
12
10
8
6
4
2
0
41.yluj 41.tco 51.naj 51.rpa 51.yluj 51.tco 61.naj 61.rpa 61.yluj 61.tco 71.naj
$m
cash st inv
source: SAM filings
The bottom line to SAM’s quarter: In line. The financials were slightly softer than expected
(call it half a million), but we knew they’d return a modest loss on those bad production
numbers and it turned out that way. The good news is that the Altiplano tolling operation has
moved into gear and on cash flow at least, now looks self sustaining. I’ll be looking for material
improvement on the numbers of that part of SAM next quarter.
I’d like to see the cash and working capital position improve soon, it’s a bit thin these days, but
the basic reason to own this company hasn’t changed at all: You’re getting a lot of things for a
CAD$25m market cap here and any one of the moving parts at Starcore can deliver news that

,
can really move the stock at any given moment. Hindsight tells me I was wrong to promote this
trade to a Top Pick last year, an error fully admitted (and I managed to reduce the position
without it hurting financially, which was fortunate) but as a speculative trade on a small gold
producer is still makes plenty of sense as part of a wider portfolio. Holding through, on to the
next quarter.
Catching up on the “Four speculative tinycap plays for 2017”
Back in IKN398 at the very start of the year, January 1st, I outlined four tinycap companies in
the ‘Market Watching’ section that I thought were worth a second look, or even following or
eventually buying if things went their way. The companies were Angel Gold (ANG.v), Royal
Road (RYR.v), Eros Resources (ERC.v) and Calibre Mining (CXB.v). We then featured them in
IKN399 and the last time they cme up was in in IKN402 dated January 29th.
I promised to catch up on them after PDAC, so here we are.
• Angel Gold (ANG.v): In IKN398 8.5c, IKN399 9.5c, IKN402 9.5c, today 8.5c: ANG
has been treading water since I first identified it as a potential risk/reward tinycap at
the Colombia Gold Symposium. The company has managed to raise some cash to meet
its payment obligations and move forward on its plans for 2017, so it’s not just sitting
there doing nothing and hoping (quite right too, I’d expect nothing less of the
impressive CEO Stella Frias) but I’m
told the cash will be good for
around six months of normal work
so there’s still doubts on the
horizon. I’d love to see this
company get a JV deal of some sort
as it’s got very interesting and
prospective land to its name. And
as IAMGOLD is now picking up
projects in Colombia (note its deals
with Miranda (MAD.v) and Gran
Colombia (GCM.to), both last week)
that could even happen. I’m still
forced to take a watching brief on
ANG (though I’d like a solid reason
to buy some for a small spec play), it needs some real news to break it out of this funk.
• Royal Road (RYR.v): In IKN398 8.5c, IKN399 9.5c, IKN402 9.5c, today 9.5c: Here’s
another one that’s flatlined in price terms, but unike ANG it’s seen a lot of changes
going on. The main one is the deal
the take over Caza Gold (CZY.v)
which is now nearly complete and
we’ve now moved to the final
mopping up stage of 90% ownership
and compulsory purchase of the
other 10% of shares. Along with a
successful funding round, what this
means is that Coughlin & Co have a
new place to go exploring, Nicaragua
rather than one of the politically
most difficult corners of Colombia.
This is a good thing and we can
expect decent newsflow from RYR in
2017 and 2018.
23

,
• Calibre Mining (CXB.v): In IKN398
14c, IKN399 17c, IKN402 18.5c,
today 24.5c: Now up 75% since first
mention and he most successful of
the four January 1st picks by quite a
distance, CXB has been getting
promoted in several places by market
commentators and Pierre Lassonde
(large shareholder) has been behind
most of the marketing, talking up the
stock and its “massive porphyry
potential”. Fair enough part of the
game (and I did chuckle when Louis
James of Casey Research reco’d it on
February 24th after having breakfast
with Lassonde...it popped from 25c to 29c on volume before falling back to where we
are today). I would say that though the promotional push has sucked value away, it’s
also legitimate as CXB does have an explorer’s shot at something interesting, even
though it’s been picking over its land package for several years already without finding
the big discovery.
• Eros Resources (ERC.v): In IKN398 15c, IKN399 19c, IKN402 18.5c, today 18c: It
moved up in price at the very
beginning, since then it’s stayed in a
very tight trading range around the
current 18c number. On a personal
basis there has been a big change to
my coverage of the stock, as the deep
value temptation was simply too great
and I’m now a shareholder of ERC.
This is the way I really like my tinycap
spec plays, lots of asset value
backstopping the share price, with
plenty of upside potential if luck goes
its way.
The bottom line: At this point, nearing the end of the first quarter, all four of the tinycap stock
ideas remain interesting. ERC is now an active open position on the Stocks to Follow list, which
means by definition it’s the one I like the most. RYR has done a lot of corporate heavy lifting
and that stage is nearly complete, so we can expect the explorer to go exploring now. ANG
needs some company-changing news, be it success in the field or a deal with another company.
CXB has been promo’d and looks expensive now, unless of course it delivers the goods on
property exploration. However all four are still interesting companies with lots of potential, a lot
better than much of the penny stock crap that infests the TSXV and worthy of following here
further. I’ll come back with an update on them at or near the end of the second quarter.
Episode twelve of “What I’d buy now”
Our established feature gets to edition number twelve and only those new to The IKN Weekly
won’t know the routine by now. As always we first dial in on the results of our picks and
weightings in IKN401, then we move to the new choices for the next four weeks. For those just
joining us here come the rules (copypasted from before):
The feature conveys “what I like now” in my own portfolio considering the state of the market,
the company particulars and their shares prices right here and now. It has been, is and forever
will be more of a thought experiment than a map of how I’m trading the market (because I
tend not to day-trade very much). The rules are these:
24

,
1) You give me $50,000. We assume flat forex during the time period.
2) You tell me I have to invest every dollar in currently open IKN Weekly stock picks.
3) I’m allowed to allot different dollar amounts to different stocks, from zero on up.
4) I base my decisions, choices and dollar amounts on what I think today about the
company, the stock price and the current underlying micro and macro fundamentals.
5) You know that I like all the stocks because you know I already own them, we both
understand these answers are about how I feel today about the open stock positions
for the next four weeks, no more and no less.
We’ve had eleven periods so far (IKN369 to IKN372) (IKN372 to IKN375) (IKN375 to IKN379)
(IKN279 to IKN383) (IKN383 to IKN387) (IKN387 to IKN391) (IKN391 to IKN394) (IKN394 to
IKN398) (IKN398 to IKN401) (IKN401 to IKN405) and now this one, 405 to 409. Here’s how the
latest period finished:
Mark spends $50,000 in IKN405 Mark's $50k in IKN409
company ticker previous PPS amount invested PPS today position value
Excellon EXN.to C$1.84 7000 $1.60 6087
Rye Patch Gold RPM.v C$0.305 7000 $0.295 6770
Sandstorm Gold SAND U$4.66 6000 $4.11 5292
Belo Sun BSX.to C$1.03 6000 $0.89 5184
B2Gold BTO.to C$4.22 5000 $3.98 4716
Atico Mining ATY.v C$0.92 5000 $0.84 4565
Red Eagle R.to C$0.86 3000 $0.75 2616
Tinka Res TK.v C$0.36 3000 $0.62 5167
Cordoba Min CDB.v C$1.45 3000 $1.36 2814
Riverside Res RRI.v C$0.56 2000 $0.50 1786
Starcore Intl SAM.to C$0.57 1000 $0.50 877
Regulus Res REG.v C$1.56 1000 $1.46 936
Lara Expl. LRA.v C$1.09 1000 $0.98 899
Total 50000 NEW TOTAL--> 47709
Down to earth with a thud. Check down the list, read and weep, only one in the whole list of
stocks returned a profit so a cheer and a sigh of relief for Tinka (TK.v), because without that
big win, the hole in the this edition would have been gaping. So we add the latest result into
the period table and get this:
period final total profit/loss to $50k
IKN369 to IKN372 $58,003 $8,003
IKN372 to IKN375 $53,274 $3,274
IKN375 to IKN379 $49,853 $-147
IKN379 to IKN383 $55,918 $5,918
IKN383 to IKN 387 $44,597 $-5,403
IKN387 to IKN391 $58,210 $8,210
IKN391 to IKN394 $44,651 $-5,349
IKN394 to IKN398 $52,235 $2,235
IKN398 to IKN401 $56,668 $6,668
IKN401 to IKN405 $57,453 $7,453
IKN405 to IKN409 $47,709 $-2,291
Our win streak is broken, but again thanks to Tinka it wasn’t quite as bad as it could have been
(or deserved?). Now for that totally artificial stat again: In the 40 weeks of this segment,
IKN369 to IKN409, the total profit for the original $50k stake now sits at $28,571. So some
damage done to that in the last four weeks but overall we’re still doing very well (but I wouldn’t
like to see that number eaten any further going forward).
25

,
That was then this is now. It’s time to present the new list and weightings for the period from
today to the next chequered flag, due in IKN413. Here’s the new list:
Mark spends $50,000 in IKN409
company ticker current PPS amount I'd invest today
Red Eagle R.to C$0.75 7000
Atico Mining ATY.v C$0.84 6000
Excellon EXN.to C$1.60 5000
Tinka Res TK.v C$0.62 5000
B2Gold BTO.to C$3.98 4000
Sandstorm Gold SAND U$4.11 4000
Cordoba Min CDB.v C$1.36 4000
Solitario XPL U$0.804 3000
Regulus Res REG.v C$1.46 3000
Minera IRL MIRL.cse C$0.15 3000
Riverside Res RRI.v C$0.50 2000
Eros Res ERC.v C$0.18 1000
Starcore Intl SAM.to C$0.50 1000
Rye Patch Gold RPM.v C$0.295 1000
Lara Expl. LRA.v C$0.98 1000
Total 50000
I’ve tinkered around with most of the weightings here and there, so rather than explain every
single one let’s stick with a few bullets on the main changes this:
• Red Eagle (R.to) is pushed to the top of the weightings because this is the period in
which the company is expected to declare commercial production. I expect naysayers in
this stock to get a neatly sliced portion of humble pie, false rumours to drop away,
confidence to rise in R.to along with its stock. And at this weekend’s discounted 75c, it’s
a bonus entry price to boot.
• Rye Patch is dropped right down, because I’m losing trust in this story.
• The new positions of Solitario and Minera IRL are placed in the middle of the pack, let’s
see how they start their lives here first before weighting them higher or lower.
• I’ve dropped Excellon (EXN.to) down a bit, but only because I needed some extra
dollars to spread around and it seems quiet at the moment. I still think it’s one of the
places that could spring hard in the weeks ahead, all we need is positive news about
the water pumping.
And that’s your lot for this edition, we’ll be back in IKN413 and let’s hope things are better than
this episode.
Conclusion
IKN409 is done, we end with bullet points:
• Solitario (XPL) fits the bill as a second zinc name to add to the portfolio. TK will stay as
my number one pick, but a trade around the upcoming PEA and before more of the
world latch onto this very cheap Zn name makes a lot of sense.
• We’ll get to it next week but there was nothing wrong with B2Gold’s 4q16 financial
report, it’s just one that didn’t shine brightly. The tepid market reaction will pass, this
investment is about long-term value in the gold sector. I’m sticking with my “$5.30 by
mid-2017” call that’s been in place for nearly three quarters, which makes its upside
prospects in the next three to five months look strong. In The Clive We Trust.
26

,
• The political situations in both Argentina and Ecuador are very fluid but more
importantly, way more fluid than the Northern coverage would have you believe. I
know I bore you with repetition on these subjects and it’s not a blanket call either,
there are some enclaves and specific projects that will be fine but once again, exercise
caution. Do the DD and know the risks of portfolio exposure to either country.
• Last week I signed off with the words “Signals point to a lower gold price. I hope I’m
wrong (I often am)”. I was. That’s good.
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.businesswire.com/news/home/20170213005775/en/
(2) https://www.juniorminingnetwork.com/junior-miner-news/press-releases/1260-tsx-venture/twr/30277-tower-
resources-announces-financing-package-with-sandstorm-gold-and-concurrent-private-placement.html
(3) http://www.b-tv.com/cordoba-minerals-commercial/
(4) http://www.bcsnoticias.mx/tribunal-cancela-autorizacion-que-le-dio-la-semarnat-al-proyecto-minero-los-cardones-en-
la-paz/
(5) http://invecture.com/en/about-us
(6) https://www.el-carabobeno.com/correa-encuestas-serias-dan-ventaja-candidato-oficialista-ecuador/
(7) http://www.elcomercio.com/actualidad/leninmoreno-lider-intencion-voto-encuesta.html
(8) http://www.cubadebate.cu/noticias/2017/03/09/sondeo-con-4836-lenin-moreno-encabeza-intencion-de-voto-en-
ecuador/
(9) http://www.letrap.com.ar/nota/2017-3-14-una-encuesta-de-analogias-muestra-a-cfk-primera-en-todos-los-
escenarios-bonaerenses
(10) http://www.aminera.com/2017/03/18/escondida-acepta-invitacion-sindicato-n1-presenta-direccion-del-trabajo-
oferta-cierre/
(11) http://www.reuters.com/article/chile-copper-idUSL2N1GW0IO
(12) http://news.sys-con.com/node/4036531
27

,
Appendix 1: Flash update dated Friday March 17th 2017
Good Friday morning, just after 7am local time, an hour and bits before the opening bell and another day threatened by
El Niño rains later on.
Buying Solitario Exploration & Royalty Corp (XPL) (SLR.to)
After announcing a new purchase idea for this weekend's edition of The IKN Weekly IKN409 on the blog yesterday I've
taken a few mails asking about the pick and, on consideration, even though the full report on Solitario (XPL) (SLR.to)
isn't written yet, the number work is done, so there's no reason to hold back.
Therefore, the main NOBS report on Sunday will be about my decision to buy XPL, an interesting zinc play with an
upcoming catalyst. The time frame for the trade is medium-term, I envisage it closed before the end of 2017. The target
price will come with the full report on Sunday.
IMPORTANT: Please be clear that I personally will NOT buy this stock until next week at the earliest. I also have a limit
entry price in mind and will not overpay for ownership.
Enjoy your Friday. Best, Mark
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
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
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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
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
29

,
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
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
30

,
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.
31