IKN #410Premium

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The IKN Weekly
Week 410, March 26th 2017
Contents
This Week: Trade heads up, In today’s issue, Gold moves away from the miners.
Fundamental Analysis: NOBS report on Amarillo Gold (AGC.v).
Stocks to Follow: Overview, Lara Exploration (LRA.v), Rye Patch Gold (RPM.v), Solitario E&R
(XPL) (SLR.to), Red Eagle Mining (R.to), Riverside Resources (RRI.v), Starcore (SAM.to), Tinka
Resources (TK.v), Sandstorm Gold (SAND) (SSL.to), Minera IRL (MIRL.cse), Cordoba Minerals
(CDB.v), Regulus (REG.v), Atico Mining (ATY.v).
Copper Basket: Overview, Crapstone (CS.to).
Producer Basket: Overview, Franco-Nevada (FNV).
Regional Politics: Regional Risk Review next week, Argentina: Lipsticking the pig, Ecuador:
The final voter intention polls are in, Peru weather update, Peru: Michiquillay news, Chile: The
La Escondida strike is over (for the moment).
Market Watching: DRG Global (DRG.ax): A discounted backdoor into Cascabel, Gran
Colombia Gold (GCM.to) and the power of share consolidation, Graña y Montero (GRAM): A
heads up, B2Gold (BTO.to) BTG) 4q16 financials, Excellon Resources (EXN.to) 4q16 financials.
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
I will be a buyer of Amarillo Gold (AGC.v) next week. As the ‘Stocks to Follow’ list is currently at
its self-imposed maximum of 15 stocks, with a slightly heavy heart I’m going to make room for
this new position by dropping Lara Exploration (LRA.v) from the list.
In today’s issue
• As noted above, I’m a buyer of Amarillo Gold (AGC.v) this week, a decision that comes
on the back of an impressive pre-feas and some extra digging into the company’s Mara
Rosa project. Buy low sell high, they say. Well folks, this one is low.
• News and view on plenty of our covered companies in ‘Stocks to Follow’ this weekend,
including the rationale behind the decision to cut LRA from the list, a look at the good
news from Starcore (SAM.to) last week, TK’s retrace, SAND and REG bringing news to
market, lots of others too.
• Check out the piece on DRG Global (DRG.ax) that heads up the ‘Market Watching’
section today, that’s a really cheap looking stock any way you care to cut it that offers
a great backdoor way into SolGold and its Cascabel project.
• A lot of you skip over it. But to my knowledge there are a few of you who only
subscribe because of it. I know it has good and bad editions, but for me this week’s
Regional Politics section came out pretty well with information that’s almost actionable
on Peru, Argentina and Ecuador. Almost.
1

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Gold moves away from the miners
Sic transit gloria mundi*
I’m the one that’s bored you to death with all the Gold/TIPS talk this year, but I’m not wedded
to the idea either and as it looks to me as though the tight relationship is breaking down
somewhat, I think it’s about time we draw a line under its usefulness in forecasting the very-
near-term moves in the metal.
• Yes, historically and over the long-term it’s a good indicator.
• But that’s not always the near term case and for my taste, its moment has now passed.
However, notwithstanding, but, sin embargo, au contraire, there is something that’s well worth
highlighting on the box standard chart we’ve been using (taken from here (1)) to track
Gold/TIPS before giving it a rest because the bigger picture has a message:
See those big bumps? They coincide with the before/during/after of the two recent rate raises
out of the Fed (two of the only three in the last ten years, I might add). And unsurprisingly they
coincide inversely with the two significant gold sags of the last six months. But the thing is,
neither of them managed to stick. That may be because people are worried about The Donald.
Or it may be because even after the hikes real interest rates are still negative (e.g. your time
deposit isn’t going to stop your dollars from losing purchasing power) and historically gold tends
to do well in such a financial environment. Or it may be because equities in general are
correcting (a little, there may be more in the tank) and with the dollar index dropping as well,
gold’s a nice place to hide for a while. That
hasn’t shown up in GLD inventory holdings GLD: Inventory/Price Ratio, US Election to date
8.2
yet (they’re still bumping along at the low
8.0
830’s metric tonnes, but one thing we have
7.8
noticed in 2016 and 2017 is the way that
7.6
when the inventory/price ratio gets back to
7.4
the 7.0X line, gold’s ready for the higher
7.2
price bounce (new buyers of GLD pop the
7.0
market price higher with a bit of extra
6.8
leverage. That’s now primed to happen 6.6
again. 6.4
In fact the way GLD rose by 1.6% on the
week, beating out the upper tier precious
metals miners (GDX up 1.1% on the week)
and making mincemeat of the juniors (GDXJ down 0.2%) suggests those nerves are not
confined to banks biotechs and retailers. If this de-coupling of metal to miner continues is to be
seen, but if it does there’s one thing that watching this sub-sector of the market has taught me
over the years; the quality companies and quality stocks will rebound and catch up first and
fastest. That suits me and my portfolio just fine, thanks.
*Gloria was ill on the bus last Monday.
2
61/9/11 61/71/11 61/82/11 61/6/21 61/41/21 61/22/21 71/3/1 71/11/1 71/02/1 71/03/1 71/7/2 71/51/2 71/42/2 71/6/3 71/41/3 71/22/3
Source: SPDR data

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Fundamental Analysis of Mining Stocks
Today we look at Amarillo Gold (AGC.v).
NOBS report dated March 26th, 2017
Amarillo Gold Corp. (AGC.v)
Company Overview
Amarillo Gold Corp (Canada: AGC.v, US OTC: AGCBF, Frankfurt: 72A.f) is an exploration stage
junior mining company operating in Brazil. Its flagship property is the Mara Rosa gold project in
the Southern Brazil state of Goias. Current share structure is as follows:
Shares out: 80.25m
Options: 2.4m (at 30c)
Warrants: 5.15m (at 24c and 32c)
Fully diluted shares: 87.8m
Current share price: C$0.37
Market Cap: C$29.69m
Approx cash treasury per S/O: C$0.01
All prices are in Canadian Dollars unless stated. Forex U$0.75=CAD$1
NB: As Amarillo reports in Canadian Dollars, that is today’s default currency. Any
reference to United States Dollars will be clearly market U$ at all times.
Overview
At first, earlier this month, I was puzzled by the fact that the share price of Amarillo Gold
(AGC.v) hadn’t moved much on the back of its pre-feasibility announcement (2) for the Mara
Rosa open pit gold project in South Brazil. And now, after investigating the stock pretty carefully
(up to the point that the pre-feas news release rather than the full PFS document, which hasn’t
been filed yet, allows) and meeting with company management last week in order to get a better
feel for the company and discuss what I believed were potential weaknesses, I’m frankly
amazed its share price has simply flatlined so far. This company is a bona fide sleeper stock
and once the market pays more attention to what it has at Mara Rosa, we don’t even have to
include a valuation for its second-string Lavras do Sur property in order to see this stock much
higher than it is this weekend. In a junior mining world where investors complain about a lack of
precious metals sector bargains, the numbers around AGC stand out like the proverbial sore
thumb. I’m a buyer of this thing next week and the next eight pages or so are to explain why.
Management overview
AGC is led by President and CEO Buddy Doyle, who to the junior world and AGC from over two
decades in Rio Tinto, mostly in diamond mining. He’s a geologist was some notable discovery
successes under his belt, such as leading the team that discovered the Diavik mine in NWT
Canada (I like that mine as it provides my preferred streamer Sandstorm with plenty of
revenues and provides a good reminder that IAMGOLD, who sold its royalty to SAND, is a
pathetically run company). I’ve never met CEO Doyle but he comes with solid thumbs-up from
industry peers, hardly a bad word said about him. Also part of AGC is Rick Brown, who I have
met. Brown’s official title is AGC’s Business Development Director which is a bit of a disservice,
as he is also a highly experienced geol who also holds a master’s degree in business (one of
those rare ones who can wear both hats). More importantly, Rick Brown is a major shareholder
3

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of AGC with 8m shares to his name.
On the subject of shares, it’s worth a mention that the last time AGC went to market and raised
funds was its placement in 4q16 (closed December 13th) which brought in $3.3m in gross
proceeds by selling 10,312,500m shares at 32c apiece (no warrants apart from broker’s
warrants, which went to Pollitt). Interestingly, 2.24m of those shares were taken up by a range
of insiders and officers of the company, these guys have plenty of commitment to AGC’s
success. In total directors own 9.208m shares, representing 11.5% of shares out and if you
widen that to “officers”, that goes up to 14.5%. Just under half of those insider shares are the
8m owned by Rick Brown, a true believer for sure.
Financials overview
The money numbers at AGC are reasonably straightforward and as the main attraction of this
company is its low market valuation compared to what it’s got at Mara Rosa, the important
metrics are the balance sheet items. We could go into its expenses and background burn, but
it’s not really the point here (and it’s a tightly run ship in general, very little in the way of
splurging expenses).
On the left you have the assets chart, dominated in true exploreco style by its mining assets.
Mara Rosa is carried at $15.7m, LdS at $12m. Current assets are thin on the ground, so let’s
separate them and check out cash treasury only (below right):
AGC.v: Assets
50
45
40
35
30
25
20
15
10
5
0
It’s easy to see that AGC has been pootling around with very little cash to play with for quite a
time. Then came that $3.3m placement raise, the money earmarked for the updated PFS that’s
just been delivered. Treasury is now assumed to be back down around C$0.7m.
Moving on to liabilities, this is the slightly sticky part of the AGC story. In 2014 AGC took out a
“Gold Linked Loan” with its main basker, Asian Investment Management Services Ltd (AIMS),
which allowed the company to consolidate its previous loans book and provide working capital
without diluting the share count. Since that
time AGC has drawn on the loan facility and
accrued interest on it as well. The result is
what you see in this chart, a book of liabilities
at around $12m total, with most of that being
cash loan debt. The other notable part of
liabilities, in the currents section, is about
$650,000 owed to officers in unsecured
loans and some back pay.
Now that’s quite a chunk of money they owe
there, certainly enough to add to the current
market cap and give a better gauge of the
value of AGC by using Enterprise Value (EV). The main gold-linked loan isn’t due payable until
mid 2019 however, which does leave AGC plenty of time to get its Mara Rosa project moving
and funded (at which point the debt book would almost certainly be part of the deal).
We move on to working capital. With those unsecured loans in the current debt books, plus the
4
41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 tse61q4 tse71q1
C$m AGC.v: Cash treasury per qtr
5
fixed 4.5
other current
4 cash & eq
3.5
3
2.5
2
1.5
1
0.5
0
source: AGC.v filings
41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 tse61q4 tse71q1
source: company filings/IKN ests
srallod
fo
snoillim
AGC.v: Liabilities Breakdown per qtr
14
12
10
8
6
4
2
0
41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 tse61q4 tse71q1
C$m
LT liab
current liab
source: company filings

,
drip-drip way AGC draws on its loan facility, we’re left with a slightly unusual situation of a
company that normally runs a negative working
cap. The only change to that was in 4q16
(estimated) when that $3.3m placement cash hit
the books, but AGC has used most of that for its
purpose already. With the next stage of the Mara
Rosa development now in sight I’d expect this
working capital situation to change, the company
is going to need money to move Mara Rosa
through to the Construction Permit (LI) award
and also pay what it owes to people eventually.
As for shares outstanding, the last couple of
years is a direct reflection of the corporate
decision to pay for its day-to-day with that loan
facility. AGC avoided all share dilution for many years, with that only changing recently via the
aforementioned $3.3m placement. The company now has 80-25m shares out.
AGC.v: Shares Out
100
90
80
70
60
50
40
30
20
10
0
5
41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 tse61q4 tse71q1
source: company filings
serahs
fo
snoillim
3 AGC.v: Working Capital per qtr
2.5
2
1.5
1
0.5
0
-0.5
-1
-1.5
-2
Summing up, what you have at AGC is a tightly-run corporate ship but it hasn’t followed the
classic junior path of dilutive share placements, either. The decision to take out a small loan
backed by produced gold (or a repayment date, that’s now looking more likely) is unusual and
the downside is that here in 2017 it’s a small junior with a relatively large lump of financial debt
weighing its balance sheet down. However it’s not a massive amount and as the counterparty is
the company’s biggest shareholder and sponsor, there’s almost certainly the good will to avoid
any crunch moments.
Other projects
Amarillo operates in the South of Brazil. Aside from a handful of very early stage properties, its
main projects are Lavras do Sul and Mara Rosa. Lavras do Sul is a big land package covering
190km2 that AGC says has generated over 19 targets already, mostly centred on old
artisanal/informal mine workings (normal: if you want to find gold in Brazil, follow a garimpeiro).
The most advanced target at Lavras do Sul (LdS) is called Butia, an open pit project with a 43-
101 compliant resource compiled in 2010 that contains an indicated resource of 215,000 oz Au
at a grade of at 1.05 g/t, plus an inferred 308,000 oz Au ounces of gold grading 0.74 g/t (all that
using a 0.3 g/t cut off). That’s pretty interesting in itself and if we consider the absolute size of
LdS, it’s obvious that there’s plenty of exploration upside to come as well. However, for our
purposes today LdS gets this paragraph, the quickest of mentions and we move on because the
reason we’re here is all about Mara Rosa.
Mara Rosa
The reason we’re here today. The 100% owned Mara Rosa (aside a 1% NSR owned by Franco-
Nevada and a 1% NSR owned by Royal Gold), in the State of Goias in South Brazil, is AGC’s
flagship property and most advanced project. Rather than wow you with purple prose, the
company’s website does a solid job of introducing the project and here’s how that page begins:
The Mara Rosa Project is a greenstone belt, shear hosted meso-thermal gold
mineralized system of Neo-Proterozoic age located near the village of Mara Rosa in
41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 tse61q4 tse71q1
source company filings
srallod
fo
snoillim

,
the state of Goias.
The project encompasses approximately 60,000 hectares of exploration permits and
2,600 hectares of mining permits. Local infrastructure is excellent, with nearby access
to Brazil's main North-South highway and close proximity to the national capital of
Brasilia (320 km) and the state capital, Goiania (350 km). The main accumulation of
gold within the Mara Rosa project is known as the Posse Deposit, which occurs in two
main zones, Posse North and Posse South.
Couldn’t put it better myself and I’m keen on you visiting that page because AGC go above and
beyond the normal dross level of project presentation by putting a 3D Corebox view of the
deposit on the page, for your consideration. Wish more juniors would do the same.
AGC has been developing Mara Rosa for many years (I bought and held the stock for nearly a
year back in 2009 and 2010 for its potential) so there’s plenty of data to consider, but we’re
going to keep things to the point today by going straight to its latest development, the news of
the updated Pre-Feasibility Study (PFS) that was announced on March 7th (2), because that
document not only gives us the Mara Rosa/Posse updated reserve and resource numbers but
also the main economic parameters of the re-worked plan. Let’s start with the two tables that
show how much gold there is at the project. This is the resource overview...
...which shows 1.25m oz Au M+I grading 1.56g/t at a cut-off of 0.35 g/t gold. That’s a really solid
grade for an open pit project. We also note the 300,000 oz of inferred gold, which offers decent
upside to the current project economics as inferred resources can’t make it into a PFS. Inside
that 1.25m oz total above, most of the resource can be designated as proven and probable
reserve and that’s laid out in this second chart:
In short, the P+P reserve, on which the PFS is based, contains nearly a million ounces of gold
at a strong grade in around 19 million tonnes of rock. And as the previous chart indicates,
there’s upside potential on that eventually.
The reason AGC raised $3.3m in 4q16 via that 32c placement was to fund an updated PFS on
the Posse deposit, compiled by SRK. As per the March 7th NR that 43-101 PFS is now complete
and the NR gave us plenty of details, highlights and bullet points on that project but to illustrate
it here I’m going to stick with tow of the main charts. First this one, which compares the main
parameters of the updated SRK PFS (on the right) to the PFS it replaced, prepared by Coffey in
2011. A few notes below:
6

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On paper at least, this is a very robust project:
• The initial capex hurdle of U$148m isn’t a massive one.
• The average annual production of 112k oz gold over an eight year mine life may not be
the type of project to attract a major miner, but it’s a solid average production that could
tempt any number of mid-sized precious metals company. We should also recall the
upside potential of over half a million ounces of M+I plus inferred ounces left out of this
mine plan.
• Two of the big stand-out line items go hand-in-hand, namely the 35.2% IRR at
U$1,200/oz gold and the payback period of just 2.2 years. Those are excellent
parameters to offer in any pre-feas, a direct product of that good average grade.
• AGC+SRK have done the cost trade-offs and the plan is now to go with contract mining,
a decision that makes sense to me (having seen the way Minera IRL went through the
same process recently and came to the same decision).
When I first saw the NR on March 7th, this table really caught my eye and its contents were the
reason I thought I may have missed a boat here. It was a mystery as to why the stock didn’t
rally on the NR (and still is), which is compounded when the contents of this second table, also
ripped from the NR, are put into the mix:
7

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This table shows two things. Firstly, it gives an idea of the project sensitivity to the price of gold
and that shows a project that still works at a gold price as low as U$1,000/oz (20% IRR is
acceptable), but it also gives great leverage if gold manages to move higher (and I think it will
before Mara Rosa gets its construction permit). But it’s the second thing that really impresses
me, the parameters at the baseline U$1,200/oz gold price. Highlighted is the 35% IRR at
U$1,200/oz of course, but then I’ve highlighted another number there which is also truly
impressive. In its NR bullet points, AGC chooses to highlight the Net Present Value (NPV) of
Mara Rosa using a 5% discount, therefore showing off the U$178m number. Well that’s what
mining companies do I suppose, but for me the 5% discount doesn’t represent anything close to
the true discount (a close proxy to cost of capital) such a company would have to pay in order to
raise the U$148m it needs to build the mine. More realistic is a 10% discount to NPV at the
moment, which points us to U$129m.
Now that’s less for sure, but for my money it’s every bit as impressive, especially considering
the current low share price and market cap of AGC. And that’s at U$1,200/oz gold, at present
spot it works out at around U$145m. The next bit I’ll put in bullets, try to make it straightforward
to follow:
• At a big 10% discount, Mara Rosa runs an NPV of U$145m at spot.
• That’s C$193m (using the house standard 0.75/1 forex)
• This weekend, AGC has a market cap of C$$29.7m
• As AGC has that financial debt on its books, I think it correct to value the company on
an EV basis to get a real handle on where it’s being valued as an entity. That adds an
IKN estimated C$12.2m as at end 1q17.
• Therefore, you have a company worth C$42m (rounded) owning a project worth
C$$193m
• That’s a Price/NPV ratio of just 0.22X and that, ladies and gentlemen, is my idea of a
drop dead bargain.
It’s a bargain because I’m using the most conservative inputs possible. Other people could flash
the 5% discount before your eyes, or forget about that debt position. We throw it all in the pot,
make it as difficult as possible for AGC to look good and it still comes out looking cheap
compared to most project, but extremely cheap for a project with:
1) a 43-101 compliant resource that includes nearly a million ounces of P+P reserves
2) High grade rock (for its open pit type)
3) A recently updated pre-feas study
4) Most importantly, a clear path to eventual production.
My recent meeting with Rick Brown
Last week I managed to catch up with AGC director and big shareholder Rick Brown, a meeting
that couldn’t have been timed better as I could ask him about the main issues that had been
bugging me since the updated PFS was announced to that strange lack of market response.
Since the NR I’d been wondering on a basic question, “What’s holding AGC back?” and the
meeting was a fine opportunity to air doubts and hear responses.
• Community relations/legal matters: My first concern, maybe there was some local
opposition. In fact it’s quite the opposite there in the town of Mara Rosa. The region is
miner-friendly (e.g. Yamana at Chapada just 35km away), the project received its social
licence in May last year after a big town hall presentation and event at which only one
person out of literally hundreds voiced opposition, the locals wants the jobs, they know
the sector. I remember back when I owned the stock in 2010 there were some legal
problems thrown in the way of AGC but those are now all over, AGC passes the often-
tricky community question with flying colours.
• The planned gold recovery method: This is one issue on which Rick Brown put me at
ease. In a nutshell AGC plans to use an innovative recovery technique at Mara Rosa
because some mining operations have a telluride issue and they get around it, others
have a recovery issue and they use a technology called oxygenation to get around it,
8

,
but Mara Rosa would be the first to use these two techniques together. As with any
unproven technology doubt surface, but Rick Brown explained that they’ve done plenty
of lab-scale and bench scale testing and are confident of having found the way to make
it work and get recoveries up to their targeted 92% (one fo the key elements is a grind
to 45 microns, apparently).
• Money to get to a construction decision. We also talked about the timeline to the
construction decision and what AGC needs to do in order to get its second main permit,
the LI construction permit. He final permitting process has already started and
according to their literature, it should be awarded come the end of 1q18. So, basically
three quarters to get there and to do so, including the Bankable Feas work necessary,
AGC estimates it will need around $15m. That’s quite a lot of money for a company
used to running on a shoestring and with a share that trades lightly, so it’s going to be
interested to see how they raise the necessary cash.
So yes, that final one is a bit of a black box at the moment, though I’d expect AGC is already
talking to different third parties and potential financing entities on ways of raising the necessary
once the PFS is published. And on the subject of risks...
Risks and potential problems
This is one of those situations where it almost seems too good to be true; an ignored company
with plenty of cheap gold ounces under an advanced stage project with a clear pathway to
production. And as just that “too good to be true” thing is more than enough to get me on edge,
I’ve been trying to find the potential fatal flaw or weak spot in this story. On a level of direct-red-
flag-fatal-flaw-run-away there really isn’t one, but there are a few things that can be classed as
potential or real weaknesses that need an airing:
• We haven’t seen the PFS yet. Yes we’ve seen the NR announcing the PFS, that came
out on March 7th, but as AGC has 45 days to file the full document to SEDAR and is
likely to use all those days to polish and check, we don’t have the details on the
overview numbers as per this weekend. Whether or not this is a major issue is up for
debate, what the PFS will give is detail on line items and that’s always good to know
and by way of example, here’s the second potential concern:
• The Mara Rosa pit walls are planned at 48°. That’s steeper than your average open pit
plan, it’s good if they can do it of course as it improves strip rates and cost parameters.
Also, this isn’t a seismic area of the world and if the engineers and SRK believe the rock
is competent, then fair enough. However, the 2011 mine plan assumed a 40° gradient
and until recently SRK was assuming a 46° gradient, so the move to 48° does give me
a niggling concern.
• The exchange rate assumption of USD1 = BRL3.2 may be cutting things fine. Here’s a
long-term chart of the Brazilian Real (BRL) against the greenback and although the
Real has been cheaper than its
current 3.1 or so, that was due to
bigtime macro concerns on the
Brazilian economy. As the country
looks as though it’s now coming
out of recession with the worst
behind it, assuming 3.20 for your
dollar looks too optimistic to me
Again, I’d like to see the full PFS
document because it’s bound to
run cost sensitivities on the forex,
I’d be most interested in seeing
how operating cash costs are
affected by a Real at 2.50 or so.
• The permitting track. AGC makes a reasonable assumption of getting its “LI”
construction licence in about a year from now. All fine, but Brazil is a notoriously trappy
9

,
place for bureaucracy so there’s the potential for significant delay on this point. That’s
not something that I’ll be able to assuage by reading the PFS or digging for detail, this is
a risk that anyone buying in today will have to assume and one that only goes away
when the permit arrives. Hey, this is mining, it’s not an exact science.
• The placement shares go free-trading soon. Last year’s placement closed on December
13th. That’s 103 days ago, which means in just under three weeks’ time the shares
come out of escrow (the 121 day rule). That may cause some near-term selling
pressure in the stock (though it’s by no means a given).
In other words, just like any other junior mining investment this is not a riskless trade, there are
always issues that can turn around and bit you later. It’s now time to wrap up this piece.
Discussion and conclusion
There’s risk of being early on this stock without reading the PFS. There’s risk of taking company
officers at their word on several matters (e.g. a site visit would be useful). There’s risk that the
company can’t raise the cpapital required for the next stage of development on friendly terms.
So risk, yes of course there’s risk in this company, it’s a junior miner after all. But the risks look
relatively low compared to the excellent potential reward from buying AGC at its current bargain
level. This is, after all, a company not just with a project, but with a project that’s advanced all
the way to PFS stage and boasts excellent and highly robust economic metrics. Pick your own
favourite, I think a U$129m NPV at a 10% discount for a U$148m project is the best of the lot.
You might like the 35% IRR. Or the ultra-rapid 2.2 year capital payback. Or the community
approval and environment permit already in hand. Or the upside potential of half a million
ounces not yet in the mine plan. The list goes on, but what we have in AGC can be boiled down
to one simple phrase:
Cheap gold ounces, in a robust and advanced project, with a clear path to production.
There are vanishingly few juniors who can say the same thing.
As for a valuation, there are dozens of ways you can cut and slice these metrics and a lot will
depend on how AGC takes its next steps of financing, but for the moment I’m going to keep it as
simple as I possibly can and make a judgement call on the 0.22X NPV(-10%) highlighted a few
paragraphs ago. It’s my contention that a project like this could easily demand a much higher
multiple than 0.22X and after due
consideration, I’m going to pick a
reasonable 0.4X for my valuation. Apply
that to the same math as above (and using
EV, not market cap, remember I’m making
it difficult for myself) it indicates a target
price of C$0.67. That’s where I’m going to
mark my card in these first stages of the
AGC trade but I’m also aware that could
turn out to be a real lowball target.
The IKN Weekly recommends Amarillo
Gold (AGC.v) as a speculative buy in the
gold junior sector on the back of its
impressive, but largely ignored, pre-feas
study news out at the beginning of this
month and sets a 12 month target of
C$0.67 on the stock, representing an upside of 81.1% to this weekend’s price. I’m buying
cheap gold ounces in an advanced project in a friendly jurisdiction, at a time when the market is
looking for cheap gold ounces in advanced projects in friendly jurisdictions. The odds are on my
side.
End of Report
10

,
Stocks to Follow
Our portfolio of 15 Stocks to Follow outperformed the market last week, making up for the
rather lacklustre previous fortnight. We had eight winning stocks week-over-week (REG.v,
SAND, ATY.v, XPL, EXN.to, MIRL.cse, SAM.to, LRA.v), one unchanged (ERC.v) and six losers
(BTO.to, CDB.v, TK.v, R.to, RPM.v, RRI.v). There were a couple of larger percentage losers
among that latter group but neither are cause for concern, Tinka (TK.v down 14.5%) was
probably getting ahead of itself anyway, owes us nothing at all and has a bright 2017 ahead of
itself, while Riverside (RRI.v down 10.0%) saw what looks like one medium sized seller and
from being a sell, suddenly looks very buyable at an unexpected bargain entry point.
Meanwhile and more than making up for those, we got strong gains from Starcore (SAM.to up
10.0%), Top Pick Regulus (REG.v up 9.6%), Solitario (XPL up 9.4%), Excellon (EXN.to up
9.4%) and Lara (LRA.v up 9.2%), all those bucking the weakness in the juniors sub-sector and
most of them doing so on positive fundies news.
With the addition of Solitario (XPL) we are back up to 15 open positions on the ‘Stocks to
Follow’ list, our self-imposed maximum at any given time. Ten of the positions are in the green,
one is unchanged, four 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$3.90 84.8% tgt $5.30 Top Pick prod.
Regulus Res REG.v STR buy C$0.64 06-apr-15 C$1.60 150.0% LT exploreco top pick
Long positions (in current order of preference)
Sandstorm Gold SAND STR buy U$3.87 17-apr-16 U$4.29 10.9% $7 tgt, added March'17
Cordoba Min. CDB.v STR buy C$0.73 15-sep-16 C$1.34 83.6% $1.50 tgt hit, rebounding again
Atico Mining ATY.v buy C$0.54 24-jul-16 C$0.85 57.4% tgt $1.10, Cu play
Tinka Res TK.v buy C$0.195 19-apr-16 C$0.53 171.8% Was under-radar; no longer!
Solitario XPL buy U$0.80 19-mar-17 U$0.875 9.4% new Zn trade, $1.50 tgt
Excellon Res EXN.to buy C$1.71 09-oct-16 C$1.75 2.3% $3.13 tgt, Ag growth story
Minera IRL MIRL.cse buy C$0.195 22-jul-12 C$0.155 -20.5% tgt 53c, risk + much reward
Red Eagle Min. R.to STR buy C$0.72 13-dec-16 C$0.73 1.4% Ramping up, great March buy
Starcore Intl SAM.to hold C$0.61 10-jan-15 C$0.55 -9.8% ex-Top Pick, reduced, holding
Rye Patch Gold RPM.v hold C$0.31 02-sep-16 C$0.29 -6.5% 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 spec buy C$0.39 27-jun-16 C$0.45 15.4% Will take profits at 60c tgt
Lara Expl. LRA.v selling C$1.15 08-apr-12 C$1.07 -7.0% Closing to make room
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:
Lara Exploration (LRA.v): Selling. As noted in today’s intro, it’s with a bit of a heavy heart
that I’ve decided to make room for the new Amarillo Gold position by closing out Lara
Exploration (LRA.v). I’ve been humming a hahing about this call for a while now, since before
PDAC in fact. At that time I said I’d make a decision after PDAC and I’ll fess up totally, I’ve
11

,
been putting it off.
The problem (if I can call it that) is there’s no real active reason to turn my back on LRA. It’s
one of the best run and managed juniors out there, it does everything right and its income
streams via its JV and optioning deals stops share dilution from taking upside away from retail
grunts like me. There’s no better exponent of the Project Generator model and any one of its
projects, if taken up and run with by a partner company, could offer up the type of multi-
bagger win we’re in this sector for, LRA gives you plenty of bites at different apples at any
given time.
So why sell now? Three basic reasons:
• We’re at a lull point in most of its JV stories. Yes there’s the Brazilian thing that’s about
to go into production and from that LRA will be due a nice $750k cash payout along
with continued modest revenue from its NSR. It has other assets being actively
explored too, but quite frankly not that many of them. A lot of assets are inside LRA at
the moment, all looking for JV/optioning deals and while they’re there not only does
LRA pay the land maintenance costs, but it doesn’t get any positive newsflow.
• LRA is planning to make new land acquisitions. In my recent meeting with CEO Miles
Thompson he was at pains to point out that getting more hectares on the company
books is exactly the right thing to do at this stage in the cycle. I fully agree. However,
those deals are set-up stage for the type of JV/optioning-in deal with a larger company
that comes further down the line, they aren’t normally the ones that move the stock
price on their own, that comes later. Again, it points to LRA going through a quiet time
share-price wise.
• It’s plain portfolio management, I want a space for AGC. It’s as simple as that and
although I have bent my own rules slightly from time to time and had 16 names on the
‘Stocks to Follow’ list on a temporary basis, the fact that I want in on AGC has forced
me to look again at the current list of stocks with a critical eye and the focus comes
down to LRA. It’s not dead money sitting there, but it’s quiet money at a moment in the
juniors sector when I’m looking for a little more risk exposure, more pzazz, from my
portfolio list. I’m happy with the solid central position of my portfolio that SAND and
BTO take, they’re larger positions and safer ones with less chance of explosive upside,
so what I’m looking for from the smaller holdings is higher risk/reward potential.
Lara is a great junior and if the opportunity arises (especially at a lower price) I’d buy back in a
heartbeat. But here and now, end of 1q17, the strategic decision is to sell and deploy the cash
in other places, such as AGC. Here’s hoping Miles doesn’t get too angry.
Rye Patch Gold (RPM.v): Still holding for the moment. The other candidate for removal
to make space for AGC was this one and I’ve made no bones about the fact I’m getting leery on
its chances. For one thing it’s plenty behind schedule on first pour and commercial production
(we haven’t had either yet, back in 2016 we were promised both by now) but there have been
semi-reasonable reasons behind that, such as the lack of permit from the region to allow
cyanide handling. For another thing, even if there were a timeline glitch you’d still expect RPM
to have re-rated by now if all we needed was a signed piece of paper and a green light on an
operation raring to go, however all we get is a flatlining stock and occasional selling pressure.
With those in mind, the bottom line to RPM and the resulting decision is that I’m going to give
RPM one last chance to impress me. This week I’ve heard the same information from three
separate sources, and one of them was directly from the company to me, that:
• The final permit which will allow RPM to start production is going to be awarded in the
first two weeks of April maximum (one source said first week in April). As soon as that
permit comes out RPM can start irrigating the pads with NaCN solution and the fun
12

,
begins.
• The company has stacked plenty of mineral on the pads and is ready to roll. All sources
told me that they have half a million tonnes placed, two of them also
mentioned/confirmed that instead of lining with barren rock they’ve used mineralized
rock, which means more early-end production expected.
Therefore, the call: RPM has until April 15th to show up with the news that its fully permitted for
operation. If so, then the stock is bound to move up. However, if the permit is not forthcoming
by April 15th (Easter Saturday, it just so happens) then even if I miss out on the permit award
news by a week and live to regret it later, I’ll sell and take my medicine. They’re now giving out
a firm time window for this key permit and that’s my cue; if they don’t deliver by then it’d be
just one broken word too many, obvious price value in this stock or not.
Solitario Expl & Roy. (XPL) (SLR.to): Position opened. As per the plan last week, I took a
small opening position in XPL, though I’m going to wait until it comes back down before adding
and making it more than just a foot in the door. To that end, and considering it was a 74c stock
when I first announced my intention and now it’s 87.5c (i.e. up 18.2%), I’m booking my
foothold at the 80c of last weekend for the time being. Once the position is filled I’ll adjust to
an accurate cost average. What we did see was a big jump in volume, with around 1.1m shares
traded on the US XPL ticker (my
preferred medium) which was previously
running a three month average volume
of just 60k per day and even an uptick in
the even more thinly traded SLR.to
Toronto listing (SLR can often go days
without trading and then just do 1k or 3k
in a day, last week it traded every day
including 66k on Monday). I may not like
it, but it’s a fact of life when a stock gets
a reco like this and the price move
comes with the new demand for shares.
However this is nearly always a
temporary state of affairs and once the
first flush wears off, I’m confident of
getting what I want at a better price. Yes
indeed, I’ll be a happy guy next week to tell you XPL is a week-over-week loser.
I took plenty of mail on this trade call, with one of the most common queries being
(paraphrased), “Why has Milpo dragged its heels?”. A fair question, what I do know is that
Milpo (under Votorantim) has until this point prioritised other projects. Bongará has been on the
back burner a bit, but it hasn’t been totally ignored by the JV majority company either, as its
decision to upgrade access via the 30km access road demonstrates. The other issue at the
project has been for a long time local opposition to mining (even though there’s plenty of
informal artisanal-type activity) and to that end, Milpo has been doing an extensive CSR
outreach campaign to get people up to speed on what a mine there would entail. It’s not a
quick process, but to my knowledge the acceptance of a mining company doing its thing has
improved significantly. What I’m not expecting to see is more movement here as Milpo changes
its priorities (to that end, check the small piece about the company and the end of its interest in
the Michiquillay project in ‘Regional Politics’ below.
But ultimately, what the JV partner does or does not do at Bongará in the next few months is a
secondary matter to this trade. What XPL offers is outstanding value on a high grade zinc
deposit and, with zinc suddenly the latest and greatest fashion metal* its deep value won’t last
forever.
*Until it isn’t.
13

,
Red Eagle Mining (R.to): The nerves around R.to continue as we enter the final week before
the company is scheduled to declare commercial production. The rumour-mongers have been
spreading nerves and trading reflects that. We know better than that, the nerves are unfounded
and this is going to re-rate move back up as soon as R.to declares commercial production either
on March 31st or in the first days of April.
Riverside Resources (RRI.v): Although I’m still a seller at 60c, the sudden drop for no
apparent or good reason, aside from what looks like one medium-sized holder deciding to
liquidate, has suddenly turned a sell idea into a potential buy/add idea. This weekend’s 45c
offers a 33.3% upside to my extremely gettable target price (and it’s already got there recently,
which brings on a pang of remorse for not selling the moment I saw 60c come up...hey ho) and
with plenty of irons in the fire this year, you’re getting a lot of company and an IKN estimated
$6.3m treasury for just under CAD$20m this weekend.
Starcore Intl (SAM.to): These words were part of the conclusion to last week’s look at the
SAM.to 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.
And lo and behold, it took less than three days to sort out that cash treasury problem via a
piece of long-overdue and very welcome news. On Wednesday morning SAM announced (3)
that the real estate deal that had been dragging its feet had closed and that it had already
received most of the cash. In the end (probably to expedite the main payment) the deal has
been cut into four parcels of land, with what seems to be governmental paperwork dragging a
little on three smaller parts. But the main area is clear and along with the news, SAM provided
a useful table to see what’s going on:
The need-to-know: They’ve already banked CAD$10.17m, they have another CAD$3.3m to
come over the next 18 months or so maximum (according to the NR). This is good and the
share price moved on the news (helped
along Tuesday afternoon by your author
(4) finding out what was about to
happen thanks to reader/mailpal PB
providing a big clue and then another
contact providing confirmation, thanks
PB) as seen in this 10 day chart. But in
the end it didn’t shift that much, only
10%. If we consider that just the
C$10.17m banked is equivalent to 20.7c
per share (SAM.to has 49.147m shares
out) and the total bottom-to-top move
was 9c last week, that either means the
market had assumed nearly 12c of the
cash already into the share price or
14

,
there’s more upside to come. I definitely lean to the latter and for several reasons:
• Part of the recent share price weakness in SAM and the way it’s been trading under 50c
recently is all about that real estate deal failing to close.
• All all the rest of the sum parts of SAM only worth 35c per share? If so, you’re getting a
profitable gold mine (admittedly glitchy recently, but normally free cash flow positive),
the suite of land assets (Toiyabe, Creston etc) and the Altiplano toll operation (now
finding its feet at last) and the positive working cap before the real estate deal closed
all for under U$13m. That seems extremely low to me.
• Not only that, but there’s still another C$3.3m to come from the smaller parts of the
real estate deal as they eventually close. That’s another 6.7c/share.
But the main thing to like about the news last week is that it relieves all the balance sheet
pressure at SAM. As at January 31st SAM had C$8.324m in current liabilities, of which $6.119m
was that financial debt which is due May 2017. The potential problems of payback have now
disappeared entirely and SAM is now for all intents and purposes debt free (the only big thing
on its liabilities sheets is the $10.97m deferred tax liability, which is ledger bookwork stuff and
doesn’t affect real world operations. I would expect SAM to trade higher in the week to come,
there’s more equity upside due from last week’s strongly positive news. By way of a SWAG, I’d
put the equilibrium point at around 65c for today’s SAM, which would be a good starting point
for any further upside once the San Martín mine gets its act together and/or Altiplano starts
running at a true profit.
Tinka Resources (TK.v): And on the seventh day he rested. TK peaked at 66c early in the
week and finally found profit-takers after its big
run, trading as low at 50c before buyers turned
up and decided the low-50s provided value for
new money. That’s okay, nothing ever goes up in
a straight line and the big difference today is that
TK.v is now on a lot of people’s radars and doing
plenty of daily volume, too.
Plus when your year-to-date chart looks like this
(right), it’s easy to forgive a week’s worth of
profit-taking. In logistics news, here’s a couple of
bullet points on what’s happening at Ayawilca
and at the company
• There are now two rigs on site and working. This is good.
• TK plans to add a third rig by the end of April. This is very good, I like the way they’re
not hanging around and using the new equity interest to accelerate exploration, the
sign of a serious company.
• Weather is an issue up there, just the same as all Peru (I’m bored with this crappy
weather). TK has been slowed down by the heavy El Niño-type rains, as well as road
blockages on the way up to the project. All these are totally foregiveable in my book,
it’s tough for everyone in Peru at the moment, especially tough in the North and
everyone is suffering to some extent.
• We should get the next round of drill assay results in the next week or ten days, as
long as the labs stick to the plan. This could provide the next price catalyst.
• Thursday saw a an updated corporate presentation published at the company website.
Check it out on this link (5).
Finally, I’ve received a couple of “what’s a target on Tinka?” mails and that’s fair enough, I
haven’t formally updated mine yet and it’s a valid question. It’s obviously tough to make a
scientific estimate for a company just starting to unveil the true value of its rocks and
15

,
exploration upside to the world (and the world actually paying attention for the first time, too),
but for the moment I’m going to stick with my conceptual-only target of a C$250m market cap
potential for this company, which implies a share price of $1.00. I think that’s perfectly possible,
but wouldn’t want to stretch too much further until we see how the 2017 drilling program
comes in. So no formal new target as yet, let’s see where the combo of momentum plus
exploration plus zinc price action takes us in the next few months.
Sandstorm Gold (SAND): So much for my wishful thinking “might add” in IKN409, as I
mused on the potential of adding at U$3.90 or so. Last week SAND started strongly and kept
on, even having enough in the tank to
deliver a weekly win after its now traditional
late Friday sag (traders locking in positions?).
We also got one of those style-over-
substance NRs from the company (6) which
announced nothing new per se but did list up
all the new royalty and NSR it has added to
its books via the three small deals it has
done with several companies, but mostly
with Condor, Millrock and Tower, in 1q17.
The whole suite cost SAND a modest U$1.9m
to put together so it’s not going to break the
bank of a company which reminded us again
in last week’s NR that it has U$20m cash and
a U$110m revolving credit facility to play
with. But as a package (and in that NR) it’s good business and it would only take one of those
to bear fruits in the future to make all that money back and a lot more.
Finally, it’s worth mentioning that SAND is one of the quickest companies to pre-announce
quarterly production (in its case sales) once a quarter is closed. We probably won’t get that
next week, but Monday 3rd April wouldn’t surprise me in the least.
Minera IRL (MIRL.cse): IRL has settled down to trading in the 15c to 16c range and it’s
generally light stuff. That makes sense to me until news is forthcoming about any financing
deal(s) for Ollachea. In community news, my contact inside the Ollachea community tells me
that a team from IRL head office visited the town last week in order to update them on
progress and their plans for the construction of the mine. The meeting went smoothly and
relations are in good working order.
Cordoba Minerals (CDB.v): Contrary to a few rumours that have floated around the internet
as far as this desk, we’re not about to get a set of drilling results from CDB this week. We’re not
far away though, as I checked with a company person who told me “between 2 and 4 weeks,
most probably closer to 4”. In other words, we should get something in April. The rig count is
still at four and everything is happening according to plan on-site. In trading, CDB consolidated
in the mid-1.30s range and though it lost an eventual 2c on the week did a lot better than the
average copper junior during the selling rafts that came through (see The Copper Basket for
more on that, it was a tougher time for BMs than PMs as the broad markets finally slid a little).
Regulus Resources (REG.v): The near-10% upside was a welcome event, especially as it
flew in the face of some pretty determined selling in the world of copper mining stocks last
week (see below), but ultimately REG is still merely bouncing inside its long-term trading range
and as such the price move wasn’t a real game-changer. There was no big spike in traded
volume either. However, what we really liked was the NR out on Wednesday (7) that
announced drilling was about to commence, as well as putting an official seal on the deal with
Corescan that we mentioned back during the site visit write-up in IKN390 dated October 30th. I
have a tentative meeting date with CEO John Black coming up in April (it’s a case of grabbing
him as he comes down from Cajamarca, weather permitting of course) so if/when that happens
I’ll be able to give more colour on the progress being made. By that time the drills should be
16

,
turning at AntaKori, too.
Atico Mining (ATY.v): Atico also did well to swim against the tide of copper company selling
and posted a penny gain on the week. I’ll take that as a strong signal that the market sees the
same type of deep value in this one as I do. Looking forward to mid-April and the year-
end/quarterly financials.
The Copper Basket
After twelve weeks of 2017, The Copper Basket shows a 13.31% gain to level stakes.
company ticker price 1/1/17 Shares out Market Cap current pps gain/loss%
1 Imperial Metals III.to 6.06 93.587 574.62 6.14 1.3%
2 Capstone Min. CS.to 1.26 382.04 462.27 1.21 -4.0%
3 NGEx Resources NGQ.to 1.20 205.06 225.57 1.10 -8.3%
4 Western Copper WRN.to 1.86 94.19 153.53 1.63 -12.4%
5 Excelsior Min. MIN.to 0.63 167.364 133.89 0.80 27.0%
6 Copper Mtn CMMC.to 0.94 118.8 118.80 1.00 6.4%
7 Cordoba Min. CDB.v 0.73 88.6 118.72 1.34 83.6%
8 Amerigo Res ARG.to 0.345 173.61 118.05 0.68 97.1%
9 Regulus Res. REG.v 1.20 68.368 109.39 1.60 33.3%
10 Atico Mining ATY.v 0.95 97.59 82.95 0.85 -10.5%
11 Trilogy Metals TMQ.to 0.66 104.33 76.16 0.73 10.6%
12 Coro Mining COP.to 0.15 483.425 70.10 0.145 -3.3%
13 Copper Fox CUU.v 0.125 417.64 58.47 0.14 12.0%
14 Nevada Copper NCU.to 0.77 80.5 54.74 0.68 -11.7%
15 Revelo Res. RVL.v 0.070 128.486 7.07 0.055 -21.4%
NB: All stocks priced in CAD$ Portfolio avg 13.31%
A nasty week for copper stocks, with our basket The Copper Basket 2017, weekly evolution
dropping a full 4% as the broad market sag hit
30%
industrial metals names more than their
25%
precious metals cousins. Of out 15 we saw
20%
eleven stocks drop (III.to, CS.to, NGQ.to,
15%
WRN.to, CMMC.to, MIN.to, COP.to, CDB.v,
10%
NCU.to, ARG.to, CUU.v) and just four move up
5%
on the week (ATY.v, REG.v, TMQ.to, RVL.v).
0%
Big losers were led by Crapstone Mining (CS.to
down 22.4%) and though there were several
losers in the 6% to 8% range, no others broke
the double figure barrier. The best percentage
17
ts1naJ ht8naj ht51 dn22 ht92 ht5bef ht21 ht91 ht62 ht5 ht21 ht91 ht62
source: IKN calcs

,
winner was Revelo (RVL.v up 10.0%) though in
reality that was just half a cent, more impressive was
the 9.6% added by Regulus Resources (REG.v) under
the general sector circumstances.
In copper market news, we continue to bounce
around inside the U$2.60/lb to U$2.70/lb range that,
trough in December and peak in February aside, has
been the new normal since November last year. The
world can’t seem to work out the next move in the
metal.
Now for the regular weekly copper warehouse
inventory bullets:
• World copper inventories started to drop last
week, conforming to the normal annual
rhythm to the point where you can set your
clock to the move. Overall world stocks
dropped 35,180 metric tonnes (mt) (-4.5%) to finish Friday at 751,347mt. Normal
service has been resumed.
• SHFE Shanghai stocks put in their first serious drop of 2017, down 12,694mt (-3.9%) to
close at 312,584mt. The week-in-week-out work we do in this section of The Copper
Basket can sometimes go plenty of time without offering up a key insight but there are
moments when the careful tracking pays off. This is one of them and a look at the
Shanghai-only weekly chart below is all you need to know; SHFE stocks are rolling over.
This is a good thing, healthy for the overall copper market and a tentative bullish
indicator to throw into the mix; markets don’t like surprises and this move isn’t a
surprise, it’s on-time and welcome.
• At the LME stocks also dropped, the first one since that big inventory dumpage earlier
in the month. Stocks finished Friday down 25,075mt (-7.4%) at 312,525mt overall and
under the big number, it’s interesting to note that of the 25k drop, nearly 21k came out
of its Asia warehouses.
• Over at the Comex, its gentle rise to prominence continues, with copper stocks up by
another 2,589mt (+2.1%) to finish the week at 126,238mt. Trend the friend, part deux.
Here’s the Shanghai-only chart and the action is all over there on the right-hand side.
Shanghai Futures Exchange Warehouse Stocks, Dec'13 to date
400000
350000
300000
250000
200000
150000
100000
50000
18
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 ht7guA ht11 ht61 ht72 ts1naJ ht5beF ht21
Mt Cu
source: Cochilco
When sat next to the peaks of 2014, 2015 and especially the big spike of 2016 the pattern
couldn’t be clearer, SHFE stocks are rolling over right on schedule and we can now expect the
traditional Q2 drawdown to kick in. Be sure that bulls will draw some cheer from that, no

,
matter what strike-ending deals come down the pipe at the world’s bigger copper mines
Now for notes on just one basket stock, not so much here this week:
Crapstone Mining (CS.to): The combo of the artificial bounce put in by CS.to late Friday the
week before (see IKN409), due to the TSX re-balancing putting artificial buy pressure on the
stock, plus the sub-sector sell-off of last week as the Trump rally hit the bumpers and industrial
metals suddenly went out of fashion, produced a big reversal in this market spec stock. Quite
right too, it was way over-valued and is still expensive this weekend despite the drop.
The Producer Basket
After 12 weeks of 2017, the Producer Basket shows a gain of 10.36% to level stakes.
company ticker price 1/1/17 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Barrick ABX 15.98 1165.33 22.39 19.21 20.2%
2 Newmont NEM 34.07 530.595 17.76 33.48 -1.7%
3 Goldcorp GG 13.60 832.381 13.18 15.84 16.5%
4 Franco Nevada FNV 59.76 178.01 11.50 64.58 8.1%
5 Agnico Eagle AEM 42.00 223.475 9.79 43.83 4.4%
6 Ang/Ashanti AU 10.51 405.27 4.50 11.10 5.6%
7 Royal Gold RGLD 63.35 65.281 4.39 67.23 6.1%
8 Kinross Gold KGC 3.11 1245 4.22 3.39 9.0%
9 Buenaventura BVN 11.28 254.19 3.17 12.49 10.7%
10 Sibanye Gold SBGL 7.06 228.71 2.01 8.81 24.8%
Prices in U$, NYSE or NASDAQ tickers Portfolio avg 10.36%
The basket average rose another 2.05% The 2017 Producer Basket: Weekly performance and
last week, a decent performance that beat 25% comparative to GDX control
out the GDX benchmark and puts our
20%
basket 0.8% up against its nominal rival on
the year. There were three week-over-week 15%
losers however (FNV, KGC, BVN) so it
10%
wasn’t all one-way traffic, but the seven
winners (ABX, NEM, GG, AEM, AU, RGLD, 5%
SBGL) more than made up for that. The 0%
best move was put in by Sibanye (SBGL up
4.6%) on Rand forex benefits, but basket
newbie Royal Gold (RGLD up 3.7%) was a
19
ts1naJ ht8 ht51 dn22 ht92 ht5bef ht21 ht91 ht62 ht5 ht21 ht91 ht62
basket
gdx control
source: Google, IKN calcs

,
decent performance under moderate circumstances too, it’s beginning to justify its anchor-
position place. Newmont rebounded a bit, but it’s still the obvious sector laggard in 1q17.
Franco-Nevada (FNV): FNV filed its 4q16 and year end numbers and they came in okay
without storming any barns. The main news was that the company has made good on its
threats to expand into oil & gas and has spent $110m on new royalty streams in that sector.
That’s probably as much to do with the law of diminishing returns in the hard rock deals as any
deep desire to take over the whole of the resource sector. FNV finished down 2c on the week,
which means it survived its year-end report unscathed. Can’t say that for Newmont.
Regional politics
Regional Risk Review next week
The end of another quarter swings around, which means next weekend in IKN411 the Regional
Politics section will be taken up by our regular feature, Regional Risk Review. Scores change,
macro matters chewed over, the relative merits of the top jurisdictions for mining compared. All
that and more next weekend.
Argentina: Lipsticking the pig
Last week in London, Argentina’s Finance Minister Nicolás Dujovne appeared at a conference
organized by the Argentina/UK chamber of commerce and the Argentina Embassy called “Plan
Minero 2017”, at which those assembled extolled the virtues of the country’s mining sector and
the opportunities it affords today (8).
“I urge you to find the motivation to invest in Argentina. You will be welcomed”, said Dujovne
to the representatives from the world level mining companies at his presentation and he backed
up this wish with his ten main points on what has improved in recent times. Here they are:
• Macri has “normalized” the Argentine economy
• There is now one normal, free floating exchange rate
• The bond holdout court case is now resolved, which has allowed Argentina access to
the world debt market again.
• Its INDEC stats office now produces reliable data.
• The tax haven forgiveness program which has seen dollar savings held in quasi-illegal
offshore accounts come back into the country and bolster reserves.
• The process of “disinflation”, which according to Dujovne has brought inflation back
down to 18% annual.
• Economic recovery, which according to Dujovne has seen Argentina move out of
recession in 4q16.
• Job creation which, again according to Dujovne, has seen jobs created at a rate of
25,000 per month recently.
• The improvement in public sector accounting (a cute way of saying “less corruption”).
• Lower overall taxes, estimated by Dujovne to be 1.5% less than in 2015.
He also told them that the Macri government’s plan was to see Argentina GDP grow in the long-
term at between 3% or 4% per annum, a rate that could be sustained over many years.
Now some of those points are valid, such as the improvements made to the exchange rate
mechanism and the dropping of the 5% export tax for mining products. Others are rather
cherry-picked, for example the claim that inflation is down to 18% annualized when that’s just
one study from a range that put 2017 inflation forecasts at between 18% and 22% (and there’s
a lot of evidence to say it’s at the upper end at the moment, including the latest inflation
measurements just out). Others still are rose-tinted specs stuff, such as claiming unemployment
is dropping (highly massaged figures there, the truth is that in the 2016 recession plenty of jobs
were lost or became lower-paid) or there is less corruption in Argentina today, a bit like saying
a standard nuclear bomb is less dangerous than an H-bomb. And in ironic timing, his claim that
20

,
the INDEC stats office came on the very same day a court of law ruled that the INDEC data
during the CFK government was totally reliable (in a case brought against the country by index-
linked bonds holders who claimed they were due more money because INDEC rigged inflation
data). What’s more, the new INDEC is now at the centre of a small scandal when it was
discovered the people collecting price data weren’t bothering to go to the full range of shops
and supermarkets and just using numbers they saw in shop windows next to their subway
stations on the way to the office. So much for the new capitalist work ethic.
But what really amused your author was the total lack of mention of the “Federal Mining
Agreement”, the grand plan of the Macri government to bring a level playing field to the whole
of the country and by-pass the provincial problems that companies have had forever in the
country. That’s because the whole plan, pushed hard all through 2016, has been quietly
dropped by the Macri government because it cannot get the “anti-mining” provinces on board.
The whole plan (as predicted on these pages) was a total waste of time/money, the
ineffectiveness of the country’s Mining Ministry is writ large against this failure and it points
once again to the most basic of truths about mining there; whatever national-level advantages
Argentina thinks it has, any mining company worth its salt knows that without a welcome and
agreements at provincial level you cannot do mining business in the country, period. In real
terms, that means Navidad (Pan American), Agua Rica (Yamana), Suyai (Yamana), San Jorge
(ex-Coro, now those Russian guys) and a whole host of other projects located in anti-mining
areas will never happen.
And all this is aside the problems faced by an increasingly unpopular Macri government coming
up against the mid-term elections (starts August, big votes in October), because all this good
will and future projection of a rosy future would all be for naught if Macri’s party is beaten at
the polls later this year, we would be in immediate dead-duck presidency world. In short, IF
Macri does well at the polls in October and IF the country shows real signals of macro-economic
improvement, you may see big mining companies start to commit to Argentina. Until then all
these conference talks and optimistic presentations are an exercise in lipsticking a pig.
Argentina is still a basket case country like no other, I care not if you prefer the policies of the
current President to the previous one.
Ecuador: The final voter intention polls are in
As from this weekend Ecuador puts a blackout on polling for the election set for next Sunday
April 2nd, which means the final sets of polling results are offered up by the various pollster
companies and here’s a visual ripped from this report (9) which sums things up nicely. Notes
below:
• The two on the left, Opinión Publica and Perfiles, are the two that were mentioned last
weekend and have always looked rather iffy. I highly doubt Moreno holds a lead that
big.
• The freshest new polls are on the right, from Cedatos and Market. They both put
government candidate Lenín Moreno in a slight but statistically meaningful lead over
the opposition right wing candidate, Guillermo Lasso.
• Of particular interest is the Cedatos poll, because one from that company just a few
21

,
days earlier had Lasso in a 1.6% lead. Its publication again brought screams of poll-
rigging from the Correa government, up to a point where one member of parliament
has started legal actions against Cedatos. This final poll therefore seems to indicate
that momentum is going the way of Moreno.
• The above numbers are for “total votes”. According to Cedatos, its results would
translate into a “valid vote” result of Moreno 52.4% v. Lasso 47.6%. As for polling
company Market, their “valid vote result forecast is Moreno 52.1% v. Lasso 47.9%.
To wrap up, with just one week to go it’s looking close but with the Correa candidate Lenín
Moreno as the new favourite. Too close to call from me (and my recent track record of calling
South American elections has been abysmal so even if I did venture an opinion you’d be wise to
fade it).
Peru weather update
The El Niño bad weather has continued through this week and the Peru weather people are
now saying that April isn’t likely to bring much relief, with the rains only slackening off in May.
Once again I’m not going to delve into the human misery end of the whole issue (it’s rather
depressing) and stick to mining/economics. This week we had a new force majeur declaration
from Milpo, which has seen its logistics from two of its mines affected badly and one of its
operations near the coast closed down due to heavy rains. Main roads up to the high country
are still blocked on a temporary or permanent basis, landslides/mudslides the biggest problem,
with two that carry a lot of mining trucks hit, the Central Highway out of Lima and the main
route from Trujillo up the hills to La Libertad and on to Cajamarca province.
Meanwhile, ratings agency Fitch downgraded its GDP growth forecast for Peru this week from
4.2% to 3.5%, the drop blamed on the weather effect and the fall-out from the Odebrecht
corruption and bribery scandal (10). However Fitch didn’t touch its sovereign debt rating, which
stays at BBB+ and stable perspective.
Peru: Michiquillay news
In other Peru news, doubts are now being raised about the Peru government plans to auction
off the big Michiquillay copper project in Cajamarca during the second half of 2017, with local
commentators saying it’s probably going to take longer than that (11). Analysts in Peru say that
to get real interest for the project, copper would need to be over U$3.00/lb and the local
community relations would need to show measurable improvement. Those are fair comments in
my view, though how community relations improve before a new owner is announced sounds a
bit chicken-eggy to me.
Also last week we got confirmation that Milpo has pulled out of the bids process for Michiquillay.
Analysts believe that Milpo is now concentrating more on the zinc market (which is interesting
for our XPL trade if true), but I’m quick to remind readers that Milpo has been expressing great
interest in the Haquira copper project currently owned by First Quantum (FM.to), either in JV or
perhaps buying it outright.
Chile: The La Escondida strike is over (for the moment)
As you’ve alreay probably seen via a hundred trade outlets, on Thursday the 43-day strike at
the La Escondida mine came to a finish (12) when union leaders invoked their legal rights to
return to the previous collective pay agreement it had with the company instead of submitting
to the BHP-led management’s offer of a pay cut and a small one-time cash bonus (about half
the amount they were after). This isn’t the end of the industrial dispute however, the real effect
is to kick the problem down the road because both sides will now have to negotiate a new
permanent deal at the start of 2018.
As this (13) decent English-language report on the strike end from Reuters points out, the
unions are the winners in this fight because they’ve shown that the worst they’ll ever get is the
same as before (not a chance of a pay cut) and they can use the same statute until they get a
22

,
deal they like from the company. Meanwhile, BHP has lost an estimated U$1Bn in production
with precious little to show for their attempt at union-busting.
Market Watching
DRG Global (DRG.ax): A discounted backdoor into Cascabel
I do not claim originality for the following note. For one thing I’m pathetically bad at following
companies that trade only in Australia, so I would never have known about this if I hadn’t been
told by reader ‘AS’. For another, it was his heads-up and original numberwork that got me
interested in the story and the stock and all I’ve really done is check through his figures, done
the DD in order to make sure his facts were right (they are, I knew before this that ‘AS’ is a
smart and thorough investor so it didn’t surprise me). Nevertheless, it’s still a very interesting
proposition and though trading the Aussie market isn’t easy for many people who read The IKN
Weekly, I’m quite sure at least some of you will be interested in what follows.
NB: However, before we dive in I want to make two things perfectly clear. First, I am not a
shareholder of DRG.ax personally, nor am I planning to become one. The trade potential is
obvious (as you’ll see) but personally speaking, I am happy with my current level of exposure to
copper names (and branching into Oz stocks isn’t really my thing). Second, reader ‘AS’ is a
shareholder of DRG.ax and has recently finished building his position in the stock. He therefore
has a vested interest in seeing the stock go higher, however I know for a fact that he’s not long
DRG.ax for a fliptrade, he’s in for the long-term and not for a quick profit therefore please rest
assured that if you buy, he will not be the counterparty. For what it’s worth, AS and I have
watched each other’s trade on-and-off for years and I consider him t be one of the most honest
and transparent traders I know. Full disclosure done, on with the show.
DGR Global (DGR.ax) is an Australian domiciled company run by Nick Mather, who is also of
course CEO of SolGold. CEO Mather owns around 6.25% of Solgold shares and 18% of DGR
shares. To cut a longer story short, DGR is basically a resource investment vehicle that takes
percentage stakes in other companies in the junior mining sector. It has a whole book of
shareholdings in different companies, both publically traded and currently private. I invite you
to check out the whole asset book over at the company website (14), there’s a wide range of
holdings in gold projects, oil & gas, iron ore etc. All that’s fine, but the central reason for
today’s note is this:
DGR Global owns 14.51% of SolGold.
Now that’s a good start to things, but when you start scratching at the mathematics it gets a
whole lot better, so here come the bullet points:
• DGR has 562,031,877 shares out and a share price this weekend of A$0.145. That
gives it a market cap of approx A$81.5m.
• Now I know that’s a lot of shares, kind of typical in the Australian way, but it does also
have a modest level of cash and receivables and being little more than a share
investment company its background burn isn’t heavy. I wouldn’t expect it to go to
market and dilute via placement in the foreseeable future. However it might see
options/warrants exercised and the current fully diluted total is around 617m shares, so
the F/D mkt cap is A$89.5m approx and that might be a better way of considering this
overall trade (don’t worry, it still works out really well).
• As many/most of you know, SolGold is the majority owner of the impressive and fast
growing ‘Cascabel’ copper porphyry project in Ecuador. It’s become a real go-to stock
for people wanting into the junior copper exploreco scene in the last year or two and
although I’m not a holder myself (as noted in previous editions, I prefer REG.v and
23

,
CDB.v for my exploreco copper exposure) the Cascabel project is obviously a good one.
• As a result SolGold Shares, which are traded on the London LSE exchange, have been
flying recently. As a matter of fact SOLG.L closed this weekend at 40p.
• As noted above, DGR.ax owns 14.51% of SOLG.L shares. That works out at exactly
207,394,714 shares. In cash terms, this weekend that holding is worth GBP82.96m
• The current exchange rate between the British Pound (GBP) and the Australian Dollar
(AUS) is GBP1 = A$ 1.64.
• Therefore DRG’s shares in SOLG are worth A$136.05m, give or take a rounding error
tenth here or there. Let’s call it A$136m and be done.
• Yes indeed, check again that DRG.ax market cap. This weekend DRG.ax is valued at
A$81.5m or if you prefer, A$89.5m fully diluted.
And that’s the whole reason this note exists in IKN410. If you’re interested in owning SOLG.L
shares, by investing in DRG.ax at A$0.145 you get A$0.242 of SOLG value per share (or just
over A$0.22 if you prefer the fully diluted route). That’s my idea of a real bargain but
impressively that’s not all you get. I invite you once again to check out the other holdings of
DRG.ax as per its website, but even if you discount all its holdings in non-public entities to zero
and just value its publically traded shares then add in its working capital, it adds another
A$0.10 to the value of DRG.ax shares as per this weekend. In other words, DRG.ax is backed
by around $0.34 of liquid marketable assets and you can buy that 34c worth for $0.145.
When Reader AS first contacted me about DGR.ax, his words included a sign-off line of “As a
speculator in the Jr. Resource space DGR looks like a pretty compelling punt to me”. I’m forced
to agree and I strongly suspect that a lot of you out there will feel the same. I’ll leave you with
a 12 month price chart of DGR.ax and as you can see, it’s already been moving quickly.
However, plain boring mathematics says that there’s a lot more upside left to come.
Gran Colombia Gold (GCM.to) and the power of share consolidation
My thanks to A. Reader for the nudge on this little note, which can be subtitled “A lesson in
what poor management, excessive financial debt and over-promise/under-deliver can do for
your share price”.
Even before the end of 2012 it was clear that Gran Colombia Gold (GCM.to), the Serafino
Iacono trainwreck of a mining company, had plenty of problems because its share price had
already tumbled by around 80% since the start of 2011. But instead of going for the big
numbers its shares traded for the in 2009 to 2011 period, I’m going to go for the modest 35c
share price it typically traded during most of and at the end of 2012.
24

,
Then in mid-2013 GCM announced (15) a 25-to-1 share consolidation. In other words, if you
owned 25 shares of GCM, that was suddenly converted into one share.
Life went on though the next three and a half years until this week, when the company
announced (16) it had received shareholder approval to run another share consolidation, this
time 15-to-1. Yes, those shares you owned before that were shrunk 25 times have just been
shrunk another 15 times or in other words, if you owned 375 shares of GCM at the beginning of
2013, in just a few days’ time that will be down to just one share, no buying or selling.
As GCM is currently trading at-or-around 10c, when the 15:1 rollback is official we can
reasonably expect each single share to be worth $1.50. So let’s do a little theoretical calculation
by imagining this reasonable situation:
• At the end of 2013, you bought 3,750 shares of GCM at 35c apiece.
• Due to the double effect of the two rollbacks since then, those 3,750 shares have
become just 10 shares.
• At the time, you paid approximately $1,312.50 for your share.
• They are now worth $15.
And if you think that’s bad, consider how much money Frank Holmes lost for his Global fund
when he waded bigtime into GCM stock in 2009 and 2010 (and also told everyone else to do
the same on many many occasions), paying a typical $2.50 to $3 a share at the time.
Finally, do of course expect a big round of promo pumping on the back of the consolidation
when it’s finalized so do yourself a big favour; make a note of the people telling you that
GCM.to is a great opportunity, having that little list to hand may save you a lot of money in the
future.
Graña y Montero (GRAM): A heads up
It’s not really the normal remit of The IKN Weekly so it’s not going to be a long note, but I
think it’s worth a few lines by way of a heads-
up and perhaps a starting point for your own
DD, so here goes.
As noted on several occasions in the last few
weeks on these pages, particularly in the
‘Regional Politics’ sections, the big Peruvian
construction and civil works company Graña y
Montero (GRAM) has bit hit very hard by its
connections to the Lava Jato/Odebrecht
corruption scandal that’s been making waves all
over South America. Just one look at its 12
month share price (it trades as GRAM on the
NYSE) is enough to see the effect of being
dragged into the corruption mess and being
actively connected with the bribes paid by Odebrecht to high ranking individuals in Peru, up to
and including ex-President Alejandro Toledo.
However, there’s now reason to believe GyM is going to survive this mess and as such, it may
be a decent “blood on the streets” buy for consideration. The combination of factors:
1) The El Niño weather crisis currently hitting Peru hard will need clean-up and plenty of
reconstruction later. There is no better placed company to do that work than GyM.
2) The corruption scandal is beginning to be yesterday’s news in Peru and the sensation
that GyM isn’t going to collapse (the country’s own private “too big to fail”) is growing.
The 10% rise in the stock on Friday bears testimony to that.
25

,
3) The latest word, being reported in Peru this weekend (17), is that as well as the recent
change at the very top of the company and the resignation of the three main company
leaders, we’re about to get a complete change at the board of director level with new
(and we assume uncontaminated) blood coming in to lead the company out of the hole
it’s created for itself.
Up until this scandal hit, GyM was one of the most highly regarded companies of any type in
Peru. With a direct employment roster of up to 40,000 people, as well as untold numbers of
indirect jobs depending on it, it’s one of the biggest employers in the country too. The way in
which the tide is turning, plus the “fortunate” arrival of the most severe and damaging storm
period for the last two decades in Peru, may make the stock an interesting trade. You need to
do your own DD on this one though and check the company numbers carefully, consider this a
place to start, not a reco to buy.
B2Gold (BTO.to) BTG) 4q16 financials (all in US Dollars unless stated)
This one rolled over from last week (I ran out of time and energy after that stomach episode),
it’s time to run a belated ruler over the results posted by B2Gold (BTG) (BTO.to). It’s all a bit
water-under-bridge at this time so I’m not going to make it the longest examination, preferring
to home in on the most salient points from the financials, MD&A and conference call.
As BTO pre-announced production and sales for 4q16, the revenues total of just under
U$181.2m for the quarter surprised nobody. What did surprise was the total costs figure of
U$138.7m, higher than most anal yst expectations and around U$10m higher than I’d
guesstimated in the forecast model. The big reason for the extra total cost was a bigger DD&A
charge for its Libertad mine in Nicaragua, which has seen its mine life cut to just three years
now. However, we should note that’s a non-cash charge and won’t weigh upon the all-
important cash flow potential at BTO as the company uses operating profits in its growth plans
(particularly Fekola).
B2Gold: operating margins
$m
220 Revenues Total costs Operating Revs
200 193.0 181.2
180 164.8
160 138.9 136.5 139.3 139.0 144.3 138.7
140 129.0
120.3 114.9 122.4 115.6 116.9 116.3 117.8 122.0
1 1 0 2 0 0 91.9 98.3 99.0 103.5 101.8 110.6
80 71.0
60 37.1 42.4 54.2 42.5
40
22.0 15.9 18.9 23.3 19.6 22.9 21.2
20
0
1q14 2q14 3q14 4q14 1q15 2q15 3q15 4q15 1q16 2q16 3q16 4q16
source: company filings
Thus operating earnings came in at
BTO: Operating Revenue per share, per qtr
U$42.5m and coupled with the rising 0.08
share count (more on that below) op 0.07
revenues per share came in at 4.4c, the 0.06
lowest this year. 0.05
0.04
The real test of BTO is there, in its 0.03
operating earnings as it gathers cash to 0.02
invest in its other projects, but there’s no 0.01
harm in taking the P+L data one stage 0.00
further and showing adjusted net profits,
in at a modest U$8.077m for Q4.
26
31q2 31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4
$/share
source: company filings

,
BTO: Adjusted net earnings
40
30
20
10
0
-10
-20
-30
27
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4
$m
source: company filings
Over at the balance sheet, total assets have crept higher mainly due to the rise in overall value
of fixed assets, now at U$2.06m as BTO ploughs cash into Fekola.
BTO: Assets
2750
2500
2250
2000
1750
1500
1250
1000
750
500
250
0
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4
$m fixed
other current
cash&ST
source: company filings
This breakdown of total spend at the Fekola
project shows how BTO is now pressing on the
accelerator (just over $80m of the 4q16 was
capital construction alone). BTO has a total of
U$220 left to spend at Fekola to get to production
day one, slated for October 1st 2017. That total
includes U$173m for capital construction and the
rest for pre-stripping and fleet purchase costs. As
BTO has U$225m available just on its revolving
credit, in theory at least they wouldn’t even need
to dip into treasury in order to complete the job.
That thought brings us to the liabilities chart and
the weakest part of this set of financials.
BTO: Liabilities
1000
900
800
700
600
500
400
300
200
100
0
31q3 31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4
U$m BTO: Fekola spend per quarter
120
103.4
100
77.5
80
64.1
60 51.1
43.8 45.3
40
23.5
20
0
2q15 3q15 4q15 1q16 2q16 3q16 4q16
source: company filings
$m
LT debt
current debt
source: company filings

,
I was expecting a little debt creep in the quarter, but seeing current liabilities rise by nearly
U$25m and long-term by over U$45m was more than I’d bargained for. All this will eventually
be forgiven once the key Fekola project is up and running, but this chart is probably why we
saw BTO weak in the last six or seven trading days, down from C$4.10 to today’s C$3.90.
The main move here was that BTO drew another U$50m from its established revolving credit
facility and on that subject, we note that in the YE MD&A BTO reported this:
“Subsequent to December 31, 2016, on March 14, 2017, the Company
received a binding letter of commitment from the Canadian Imperial Bank of
Commerce to participate in the Company's RCF, thereby increasing the
aggregate amount of the facility from $350 million to $425 million.”
In other words, they now have an extra U$75m to play with. Yes as seen above BTO now
undoubtedly has its capex covered. But we’re
probably going to see that debt load increase in
the next couple of quarters before the company
is in position to start paying it back down. And
by the way, that decision by BTO to take out
more debt cost me U$100, I lost a bet with
another analyst. I still say it was an
unnecessary move by The Clive and this
working capital chart says why, the company
still has over U$100m in net liquidity (way
above covenant requirements) and is making
operating profits at all its mines too, but hey
ho.
Next up, the rise in shares outstanding. As at December 31st BTO had 964.89m shares out,
that’s now up to 973.045m and the main reason for this move can be found in this (slightly
edited to remove legal guff) segment of the MD&A:
“On August 11, 2016, the Company entered into an equity distribution agreement (the
"ATM Agreement") with two placement agents for the sale of common shares for
aggregate gross proceeds of up to $100 million through "at the market"
distributions....(d)uring the year ended December 31, 2016, the Company issued 14.8
million shares for net proceeds for $44.2 million, under the ATM Offering.”
Since December 31st just over 8m extra shares have been added to the pile. Some of those are
insiders exercising options (The Clive’s crew making seriously good bonuses) but undoubtedly
some of that is the ATM share sales as well.
BTO: Shares outstanding
1000
990
980
970
960
950
940
930
920
910
900
890
880
28
41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1
BTO: Working capital
250
200
150
100
50
0
m S/O
source: company filings/IKN ests
Please note cut-down Y-axis
So BTO’s share count is nudging toward the one billion barrier and that’s another reason to see
a little weakness in the stock price these last two weeks, but even with that and the extra
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4
$m
source: company filings

,
weight on liabilities the company is adding to its overall book value per share. I have no
problem with a company spending money as long as it’s using it wisely.
BTO: Book value per share, per qtr
1.70
1.65
1.60
1.55
1.50
1.45
1.40
1.35
1.30
1.25
1.20
29
41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4
U$
source: IKN calcs from BTO data, ests
Finally, a brief return to the 2017 production outlook numbers and with BTO offering production
guidance this year of between 545,000 and 595,000 ounces gold, the IKN best guess
(conservative guess in fact, BTO has a habit of hitting the top end of guidance) is 570,000 oz
gold which looks like this on a chart:
BTO: sales and IKN forecast sales, per annum
1000
900
900
800
700
600 550.423 570
493.265
500
373.4 391.2
400
300
200 108.7 144.5 158
100
0
0102 1102 2102 3102 4102 5102 6102 tse7102 tse8102
OzAu
source: BTO data, IKN ests
In other words, we’re expecting yet another record year for BTO though perhaps not quite as
sparkling as previous guesses around the 600k range had been. Inside that overall number, we
can break it down into component parts:
KOzAu BTO: annual production and guidance
1000
900 Fekola
800 Otjikoto
700 Masbate
600 Limón
500 Libertad
400
300
200
100
0
2010 2011 2012 2013 2014 2015 2016 2017est2018est
source: BTO filings, IKN ests
• Libertad is due a soft year, with the IKN forecast of 110,000 oz some 22,000 oz lower
than the year just gone and a full 40k less than its record year, 2014. It’s still having
access problems with locals for its Jabali satellite deposit and production from that has
now been set back to 3q17...and even then it wouldn’t surprise me if it didn’t happen.
• Limón is set at 50,000 oz Au guidance, a little higher than the strike interrupted 2016

,
but still no biggie. And as a slight sidebar, I’m still expecting BTO to try and dispose of
its Nicaragua assets this year, they’re getting long in the tooth and are higher cash cost
than its main big operations. BTO should have news on the sale of its 49% of
Gramalote in Colombia soon, too.
• The IKN guidance for Masbate this year is 180,000 oz gold as we take our cue from the
company who say that 2016 was a bonus year with unexpectedly high grades that are
unlikely to repeat. In the end Masbate produced 206k oz Au in 2016, a fine effort.
• Otjikoto is forecast at 170,000 oz, slightly higher than FY16. This has quickly turned
into a key asset for the company, its low cash cost making it a real moneyspinner.
• Finally, we’re estimating 50,000 ounces of pre-commercial production at the new Fekola
mine, starting in 4q17. And as you can observe from the 2018 forecasts, once Fekola
kicks into gear and into commercial production in 2018 it’s going to be a real company-
changer.
Summing up the 4q16 numbers: They were okay, they weren’t great and on balance, even a
BTO fanboy like me understands why the stock has lost a little bit of the advantage it put
between itself and the gold producer pack in the first two months of 2017 on the back of these
financials. The main concern is the heavier than expected debt load as The Clive builds out
Fekola and keeps things humming. Libertad is moving through the maturity phase into the first
signs of depletion and really needs Jabali on line (or to be sold before it’s too late), but Otijkoto
and Masbate are running on rails and a credit to the company’s strategic vision.
What will change BTO in 2017, however, is Fekola. That’s been the bet here at The IKN Weekly
since mid-2016 and a couple of soft-ish weeks of trading in March isn’t going to change that.
These financials will soon be a thing of the past and BTO will get bid up as the new mine comes
closer to reality. So without being a blowout quarter, what we got from BTO was more than
enough to keep this stock as the house Top Pick and the very centre of the portfolio.
Excellon Resources (EXN.to) 4q16 financials (all in US Dollars unless stated)
On Thursday morning our lone silver company long at The IKN Weekly, Excellon Resources
(EXN.to), posted its 4q16 and year-end financials along with a NR (18) which, along with the
MD&A, gave us an update on progress at the Platosa mine and the company’s project to lower
the water table in the mine using new pumping equipment in order to access more and higher-
grading mineralization (essentially the only reason we’re long the stock in the first place).
By way of a reminder, this production chart per qtr below show the pre-announced production
for 4q16 of 159,783 oz Ag and another 146,410 oz AgEq (mostly zinc and lead by-products)
which was the basis for the IKN revenues guesses.
30

,
EXN: Silver and Silver Equivalent production per quarter
800000
700000
600000
500000
400000
300000
200000
100000
0
31
41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1 tse71q2 tse71q3 tse71q4
Ozt Ag/AgEq
source: EXN filings
Other AqEq
Ag Ozt
As things turned out my guesses were out by quite a lot, due to the fact that payable silver
ounces dropped to just 128k oz in Q4. That meant my revenues estimate of $4.4m was out by
over a million dollars and the reality was $3.354m. My bad.
With costs (below left) coming in as per (give or take, a bit of extra non-cash costs sue to
bonus options awarded to new appointees) here below right is how operating earnings stack up
against that light revenues column:
EXN.to: Revenues and operating earnings, per qtr
6
4
2
0
-2
-4
When we get to the bottom line, that operating loss is all-but reversed due to a BTL financial
credit (finance costs got a rebate) and the final
loss was a mere $55,000, but we should read
too much into that. 4q16 was a soft quarter for
EXN operationally but hopefully it’s the last poor
one before the upgrades kick in.
More important to EXN today is its building for the future, which shows up on the balance
sheet. Cash treasury dropped in Q4 as you’d
expect as the company wrote cheques for the
new pumping equipment and covered its
operational loss at the mine. But liabilities
dropped too and once the dust had settled, the
working capital position is still healthy, more
than enough to get it through its current transition phase to when production increases begin.
51q2 51q3 51q4 61q1 61q2 61q3 61q4
EXN.to: Costs overview U$m
6
revenues
5 Op earnings
4
3
2
1
0
source: company filings
51q2 51q3 51q4 61q1 61q2 61q3 61q4
U$m
production costs deplet + amort G&A
Source: EXN.to filings
EXN.to: Net Earnings
3 1.9 (ex-4q14 $15.463m asset impairment)
2
1
-0.1 0
-1 -0.2
-0.7
-2 -1.3 -3 -2.4 -2.6 -1.8 -1.7 -2.6 -4
-5 -4.4
-6
-7
-8 -7.0
41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3
source: company filings
srallod
fo snoillim

,
EXN.to: Liabilities Breakdown per qtr
26
24
22
20
18
16
14
12
10
8
6
4
2
0
32
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4
source: company filings
srallod
fo
snoillim
EXN.to: Assets
70
60 LT liab
50 current liab
40
30
20
10
0
As for the key part of this story, the state of
play in the newly upgraded water pumping
system that is designed to to lower the in-mine
water table and allow access to the high-
grading rock beneath, the best thing to do here
is simply quote the relevant passage:
In December 2016, the Company completed
the installation and testing of the primary
booster station (comprising four 600hp
pumps) in Guadalupe South. The Company
also completed installation of two additional
250hp submersible pumps in Guadalupe
South. The initial results from these wells far exceeded expectations, with the
drawdown over the succeeding week in excess of one metre. Well drilling was
completed in March 2017, with twelve wells now in the process of being
cleaned/prepared, equipped with submersible pumps or operating. The Company
expects to complete installation in early Q2 2017, with dry mining conditions being
achieved during Q2 2017.
I think that’s reasonably optimistic. We’re not getting a big production boost in 1q17 any
longer, but we knew that already and now EXN is stating very clearly and for the record that
the fun starts in 2q17. As it has enough cash to get there, I’m good about giving the company
this extra quarter to make good on its plans.
Bottom line to EXN: The market took heart in what it saw from EXN last week and the stock
bucked the general trend in the silver
space and rose nicely. This means that
give or take a penny, after its mini-rally on
the back of positive news about the water
pumps EXN is unchanged for 2017. That’s
not great, we require more from
leveraged plays in the portfolio but on the
other hand it’s a lot better than the 2017
performances of a whole bunch of other
silver stocks such as Fortuna Silver (FVI.to
down 18%), Endeavour Silver (EDR.to
down 20%), Tahoe Resources (TAHO
down 23%), IMPACT Silver (IPT.v down
9%) or Great Panther (GPR.to down 6%).
As repeated too many times already,
generally speaking I’m not a big fan of silver stocks because their fundies valuation metrics
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4
$m
fixed other current
cash
source: EXN.to filings
EXN.to: Working cap breakdown
16
14
12
10
8
6
4
2
0
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4
$m
other working cap
cash
source: company filings

,
don’t often offer value next to an equivalent sized gold play, but i do recognize that when the
silver stocks gets into bullish gear it can offer up face-ripping gains and that’s why I have this
limited exposure to the sub-sector via EXN. The company hasn’t kept to its own timeline on this
water pumping project and certainly needs to deliver in the first half of this year on its
production growth plans else I’m out of here, but signs are good. I’ll be looking for modest
production improvement in 1q17 and if it doesn’t come, consider it a yellow flag. Then comes
the crunch quarter because 2q17 needs to offer significant improvement, else it’s red flag time.
Conclusion
IKN410 is done, we end with bullet points:
• Amarillo Gold (AGC.v) is a real bargain at current prices, even if they dilute heavily to
raise the cash needed for the year ahead, its current 37c share price won’t last for long
as soon as its value is spotted by a wider audience. In one sentence, it’s cheap gold
ounces with a clear path to production.
• Well spotted by reader AS, DRG Global (DRG.ax) offers an excellent entry into SolGold
if you were thinking of moving on that stock. Or perhaps Graña y Montero (GRAM) is
more your thing. Either way food for trading thought in today’s ‘Market Watching’.
• I’m happy enough with the numbers posted by both B2Gold and Excellon in their
respective 4q16 financials, but the real catalyst for both companies are their growth
plans for 2017. B2’s track record for delivery is second to none, while EXN’s timeline to
the water pumping and resulting production growth has been set back by maybe a
quarter so far, it will need to deliver on the new Q2 promise else lose my trust.
• I enjoyed compiling this weekend’s edition. A long one yes, but sometimes they just
write themselves and the act of getting down the ideas I might have on a subject, be it
metal, company or country, helps crystallize my thoughts and get my head straight for
trading.
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) https://www.quandl.com/data/USTREASURY/REALYIELD-Treasury-Real-Yield-Curve-Rates
33

,
(2) http://finance.yahoo.com/news/correction-amarillo-golds-updated-pre-210455371.html
(3) http://finance.yahoo.com/news/starcore-closes-c-13-50-143000039.html
(4) http://incakolanews.blogspot.pe/2017/03/starcore-intl-samto-about-to-announce.html
(5) https://www.tinkaresources.com/assets/docs/ppt/tinka-presentation-23-march-2017.pdf
(6) http://www.marketwatch.com/story/sandstorm-gold-announces-the-acquisition-of-22-royalties-during-q1-2017-2017-
03-23
(7) http://www.marketwired.com/press-release/regulus-resources-announces-agreement-with-corescan-as-drilling-set-
commence-antakori-tsx-venture-reg-2204719.htm
(8) http://www.cronista.com/economiapolitica/Dujovne-cito-10-logros-macroeconomicos-de-Macri-para-atraer-
inversiones-mineras-20170320-0076.html
(9) http://www.eluniverso.com/noticias/2017/03/22/nota/6101566/encuestadoras-dan-ultimo-reporte-intencion-voto
(10) http://www.pulso.cl/economia-dinero/fitch-baja-prevision-crecimiento-peru-mineria-odebrecht-e-inundaciones/
(11) http://elcomercio.pe/economia/peru/dudan-que-michiquillay-se-adjudique-este-ano-noticia-
1978874?ref=portada_home
(12) http://www.20minutos.com/noticia/79011/0/finaliza-huelga-de-minera-escondida-en-chile-tras-43-dias/#xtor=AD-
1&xts=513357
(13) http://www.reuters.com/article/us-chile-copper-labor-idUSKBN16V2SL
(14) http://www.dgrglobal.com.au/
(15) http://www.prnewswire.com/news-releases/gran-colombia-gold-announces-the-consolidation-of-its-common-
shares-and-warrants-211609261.html
(16) http://www.grancolombiagold.com/news-and-investors/press-releases/press-release-details/2017/Gran-Colombia-
Gold-Provides-Update-on-Share-Consolidation-Proposal-and-Details-for-the-Fourth-Quarter-and-Year-End-2016-
Results-Webcast/default.aspx
(17) http://elcomercio.pe/economia/opinion/futuro-grana-y-montero-julio-luque-noticia-1979031?ref=portada_home
(18) https://www.juniorminingnetwork.com/junior-miner-news/press-releases/506-tsx/exn/30525-excellon-resources-
reports-2016-annual-and-q4-financial-results-update-on-optimization-plan.html
Stocks To Follow Closed Positions 2016
Closed in 2016 closed close price
Phoscan Chem FOS.to jan16 C$0.28 29-mar-15 C$0.265 -5.4% Buyout trade, bot but poor deal
True Gold TGM.v jan16 C$0.18 23-ago-15 C$0.25 38.9% okay trade, sold on pol risk
McEwen Mining MUX jan16 U$1.09 25-ene-15 U$1.20 10.1% sold due to lack of value
Lake Shore Gold LSG.to feb-16 C$1.10 07-abr-15 C$1.69 53.6% bot out, sold early in process
Atacama Pacific ATM.v feb-16 C$0.19 26-abr-15 C$0.40 110.5% sold for a double on big pop
New Gold NGD feb-16 U$2.06 24-ene-16 U$2.96 43.7% closed good near-term trade
Sandspring Res SSP.v mar-16 C$0.195 18-oct-15 C$0.32 64.1% Hit tgt, took profit
Teranga Gold TGZ.to mar-16 C$0.54 15-feb-15 C$0.60 11.1% disappointing trade
B2Gold BTG mar-16 U$0.85 13-ene-16 U$1.30 52.9% Separate trade on B2, hit tgt
Dalradian Res DNA.to mar-16 C$0.67 27-oct-13 C$1.00 49.3% Hit target, sold, good win
HudBay Min. HBM may-16 U$4.10 03-abr-16 U$4.36 -6.3% Short trade, poor timing
Nevada Sunrise NEV.v may-16 C$0.185 28-feb-16 C$0.23 24.3% V. small, no big deal either way
Richmont RIC jun-16 U$7.60 01-may-16 U$9.30 22.4% near-term trade, profit taken
INV Metals INV.to jul-16 C$0.25 03-abr-16 C$0.95 280.0% Trade closed on time
HudBay Min. HBM aug16 U$4.98 09-jun-16 U$4.80 3.6% short trade covered, no big deal
Miranda Gold MAD.v oct-16 C$0.125 03-jul-16 C$0.10 -20.0% tiny spec trade, didn't work
Avino G & S ASM nov-16 U$2.00 21-oct-16 U$1.40 -30.0% Abandon trade on bad bot deal
Stocks To Follow Closed Positions 2015
34

,
Closed in 2015 closed close price
Argonaut Gold AR.to jan'15 C$1.47 14-dec-14 C$2.53 72.1% Big gain small time, profit taken
Amerigo Res ARG.to jan'15 C$0.405 20-jul-14 C$0.285 -29.6% Given up on weak Cu prices
Reservoir Min. RMC.v jan'15 C$6.05 18-jun-14 C$4.12 -31.9% sold on Cu downturn
Coro Mining COP.to jan'15 C$0.075 26-jan-14 C$0.035 -53.3% sm, sold on Cu downturn
Fortuna Silver FSM mar'15 U$4.12 10-nov-14 U$3.75 9.0% Short used as hedge
GoldQuest Min. GQC.v mar'15 C$0.26 27-oct-13 C$0.085 -67.3% given up ghost
Rio Alto Mining RIO.to apr'15 C$2.30 07-apr-11 C$3.57 55.2% Top pick, bot out, big win
Timmins Gold TGD jun'15 U$0.60 19-apr-15 U$0.62 3.3% near-term trade, out of time
First Majestic AG jul'15 U$10.51 10-aug-14 U$4.55 56.7% horrible failed trade
NovaCopper NCQ.to jul'15 C$1.05 09-apr-14 C$0.50 -52.4% no more Cu exposure, sm sell
McEwen Mining MUX aug'15 U$0.695 21-jul-15 U$0.92 32.4% Closed nearterm flip for win
Midas Gold MAX.to sep'15 C$0.39 21-sep-15 C$0.35 -10.3% Sm. trade idea that didn't work
New Gold NGD oct'15 U$2.18 23-aug-15 U$3.05 39.9% trade closed, profit taken
Legend Gold LGN.v nov'15 C$0.085 01-mar-15 C$0.035 -58.8% tiny "land grab" idea, failed
Timmins Gold TGD nov'15 U$0.245 20-sep-15 U$0.15 -38.8% small near-term loser
Stocks To Follow Closed Positions 2014
Closed in 2014 closed close price
Fortuna Silver FVI.to jan'14 C$2.80 23-dec-13 C$3.19 13.9% small ST trade closed
Rio Alto Mining RIO.to jan'14 C$2.06 07-jun-13 C$2.30 11.7% trading position finally closed
Network Expl. NET.v feb'14 C$0.01 22-jul-12 C$0.005 -50.0% position closed, did nothing
Tahoe Resources TAHO feb'14 U$13.10 08-apr-13 U$21.72 -65.8% short closed due to reality
Darwin Res DAR.v mar'14 C$0.10 14-jul-12 C$0.045 -55.0% tiny risk play dropped
B2Gold BTO.to mar'14 C$3.07 28-nov-12 C$3.35 9.1% closed to free up capital
Pretium Res PVG mar'14 U$5.38 22-nov-13 U$6.50 -20.8% short closed as port longer
Gold Res Corp GORO may'14 U$5.07 26-jan-14 U$4.12 16.7% took profit
Bear Creek Min BCM.v may'14 C$1.63 23-mar-14 C$2.05 25.8% Took profit, sm near-term win
Eco Oro Min. EOM.to aug'14 C$0.48 22-sep-13 C$0.26 -45.8% sold small loser to make room
True Gold TGM.v sep'14 C$0.395 02-feb-14 C$0.41 3.8% M&A won't happen, sold
Santacruz Silver SCZ.v sep'14 C$1.04 26-jan-14 C$0.86 -17.3% silver/M&A spec, rel. small
Timmins Gold TGD nov'14 U$1.38 09-apr-14 U$0.99 -28.3% failed trade, sell, raise cash
Kinross Gold KGC nov'14 U$2.90 20-oct-14 U$2.15 -25.9% V small trade, didn't work, chau
Salazar Res SRL.v hold C$0.28 02-mar-14 C$0.145 -48.2% lost China sponsor
Stocks To Follow Closed Positions 2013
Closed in 2013 closed close price
USA Graphite USGT feb'13 U$0.93 08-jan-13 U$0.17 81.7% short tgt made/trade closed
Lachlan Star LSA.to feb'13 C$1.50 30-sep-12 C$0.95 -36.7% sold to reduce port risk
United Silver USC.to mar'13 C$0.21 28-oct-12 C$0.095 -54.8% small Ag sector trade, failed
Aurcana Corp AUN.v apr'13 C$1.07 11-nov-12 C$0.55 -48.6% closed on poor YE results
Gold Res Corp GORO apr'13 U$14.11 25-jan-13 U$9.38 33.5% short tgt made/trade closed
Marlin Gold MLN.v apr'13 C$0.075 10-feb-13 C$0.065 -13.3% closed trade
Bear Creek BCM.v may'13 C$2.58 01-apr-13 C$2.40 -7.0% near-term, time ran out
Lupaka Gold LPK.to may'13 C$1.12 23-oct-11 C$0.32 -71.4% towel thrown in
Tahoe Resources TAHO may'13 U$18.62 08-apr-13 U$14.70 21.1% took profit on ST short
OceanaGold OGC.to jun'13 C$3.03 16-sep-12 C$1.18 -61.1% sold on gold drop
IMPACT Silver IPT.v jun'13 C$1.14 13-jan-13 C$0.62 -45.6% sold on silver drop
Duran Ventures DRV.v jun'13 C$0.045 10-may-13 C$0.025 -44.4% ST trade never worked
Plata Latina PLA.v jun'13 C$0.79 10-apr-12 C$0.13 -83.5% closed
Bellhaven BHV.v jun'13 C$0.065 03-jun-13 C$0.12 84.6% closed ST trade
B2Gold BTO.to aug'13 C$3.07 28-nov-12 C$3.44 12.1% sold 1/2 to raise cash
Colossus Min. CSI.to aug'13 C$0.72 24-jul-13 C$0.79 9.7% closed thru nerves on future
Pretium Res PVG.to aug'13 C$8.20 11-jun-13 C$10.14 23.7% closed to raise cash
35

,
Bear Creek BCM.v sep'13 C$2.06 30-may-13 C$2.20 6.8% sold on pol risk decision
MAG Silver MVG oct'13 U$7.00 12-sep-13 U$5.62 19.6% near-term short
Gold Res Corp GORO oct'13 U$9.52 03-may-13 U$4.98 47.7% short tgt made, covered
AQM Copper AQM.v oct'13 C$0.31 16-oct-11 C$0.125 -59.7% closed failed trade
First Majestic AG nov'13 U$11.51 07-nov-13 U$10.50 8.8% v near term short, closed
Fortuna Silver FSM nov'13 U$4.00 07-nov-13 U$3.68 8.0% v near term short, closed
Primero PPP nov'13 U$5.70 07-nov-13 U$5.75 -0.9% v near term short, closed
Starcore Intl SAM.to nov'13 C$0.235 08-sep-13 C$0.17 -27.7% ST trade didn't work, sm loss
B2Gold BTO.to dec'13 C$2.22 28-nov-12 C$2.16 -2.7% closed ST trade to raise cash
Stocks To Follow Closed Positions, 2012
Closed in 2012 closed close PPS
Soltoro SOL.v jan'12 C$0.87 07-nov-11 C$0.94 8.0% cash moved to BCM.v
Gold-Ore Res GOZ.to feb'12 C$0.84 13-oct-10 C$0.98 16.7% trade closed on ELG.v offer
Minefinders MFN feb'12 U$11.68 17-nov-11 U$14.80 26.7% target made, trade closed
Iron Creek IRN.v mar'12 C$0.58 26-sep-10 C$0.31 -46.6% time up on small bad trade
U.S. Silver USA.to apr'12 C$2.18 15-mar-12 C$1.86 -14.7% ST trade no good, cut loss
Augusta Res. AZC.to may'12 C$3.10 29-jan-12 C$2.07 -33.2% bad mkt, bad trade cut loss
Bellhaven BHV.v may'12 C$0.50 22-sep-10 C$0.28 -44.0% new mgmt not impressive
Zincore Metals ZNC.to may'12 C$0.325 29-jul-11 C$0.17 -47.7% bad mkt, bad trade cut loss
Soltoro SOL.v may'12 C$0.70 18-mar-11 C$0.41 -41.4% bad mkt, bad trade cut loss
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% fail ST trade close pre split
Estrella Gold EST.v aug'12 C$0.91 27-mar-11 C$0.14 -84.6% Closed on port realignment
Fortuna Silver FVI.to sep'12 C$1.07 03-may-09 C$5.32 397.2% sell call $6.17/ Mar25
Strait Minerals SRD.v oct'12 C$0.125 09-dec-11 C$0.12 -4.0% closing coverage til FY13
Sunward Res SWD.to oct'12 C$1.47 13-mar-11 C$1.21 -17.7% sold, took loss
Gold Res Corp GORO oct'12 U$21.47 09-sep-12 U$17.40 19.0% Short trade closed
Yellowhead Min. YMI.to nov'12 C$1.00 01-apr-12 C$0.63 -37.0% sold, took loss
Primero Mining PPP nov'12 U$7.26 07-oct-12 U$6.73 7.3% Short trade closed
Bear Creek Min. BCM.v nov'12 C$3.38 07-nov-11 C$3.72 10.1% Took small profit
Vena Resources VEM.to dec'12 C$0.70 31-may-09 C$0.18 -74.3% Failed trade (caps F)
Galway Res GWY.v dec'12 C$2.19 24-nov-12 C$2.30 5.0% closed good ST arb trade
Stocks To Follow Closed Positions, 2011
Closed in 2011 closed close PPS
Sunward Res SWD.v jan'11 C$1.05 21-nov-10 C$1.63 55.2% target made, trade closed
Serengeti Res SIR.v mar'11 C$0.245 05-dec-10 C$0.285 16.3% sold pre-tgt, ST trade fail
Fronteer Gold FRG apr'11 U$2.37 03-may-09 U$15.24 543.0% buyout, trade closed
Minefinders MFN apr'11 U$9.09 07-nov-10 U$16.89 85.8% target made, trade closed
Metalline Min. MMG may'11 U$1.04 26-jan-11 U$0.89 -14.4% exit, resource disappointed
Peregrine Met PGM.to jul'11 C$0.87 06-mar-11 C$2.60 198.9% buyout offer, closed
Dynasty Metals DMM.to jul'11 C$4.20 03-may-09 C$2.85 -32.1% Sold. Fail. Move on.
Aura Silver AUU.v aug'11 C$0.22 13-oct-10 C$0.16 -36.4% Bad pick. Take loss
U.S. Silver USA.v aug'11 C$0.52 26-jan-11 C$0.71 36.5% closed to make room
B2Gold Corp BTO.to sep'11 C$2.80 12-may-11 C$4.27 52.5% target made, trade closed
Bear Creek Min. BCM.v sep'11 C$3.80 27-may-11 C$4.17 9.7% macro sell call victim
Minefinders MFN sep'11 U$14.70 10-aug-11 U$15.15 3.1% macro sell call victim
Great Panther GPR.to sep'11 C$3.03 22-aug-11 C$2.64 -12.9% macro sell call victim
Fortuna Silver FVI.to sep'11 C$1.07 03-may-09 C$5.36 400.9% sold 20%, macro sell call
Focus Ventures FCV.v nov'11 C$0.40 20-apr-10 C$0.20 -50.0% cut losses, bad trade
Regulus Res. REG.v dec'11 C$1.17 14-aug-11 C$0.52 -55.6% cut on news of poor 43-101
2009 and 2010 closed positions in appendices below
Stocks To Follow Closed Positions, 2010
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Closed in 2010 closed close PPS
B2Gold Corp BTO.to Jan'10 C$0.88 08-nov-09 C$1.49 68.2% target made, trade closed
Radius Gold RDU.v Jan'10 C$0.18 23-aug-09 C$0.40 122.2% target made, trade closed
MAG Silver MVG mar'10 U$5.60 23-nov-09 U$7.28 30.0% closed in pdac week
Riverside Res RRI.v mar'10 C$0.435 20-sep-09 C$0.60 37.9% closed in pdac week
Amarillo Gold AGC.v mar'10 C$0.81 31-may-09 C$0.70 -13.6% closed in pdac week
B2Gold Corp BTO.to apr'10 C$1.24 18-feb-10 C$1.50 21.0% target made, trade closed
Lumina Copper LCC.v apr'10 C$0.84 14-jun-09 C$1.55 51.2% total position now sold
Troy Resources TRY.to may'10 C$1.10 03-may-09 C$2.25 104.5% sold on negative results
AuEx Ventures XAU.to may'10 C$2.51 24-may-09 C$3.38 34.7% trade closed
Nevada Copper NCU.to jun'10 C$3.27 14-mar-10 C$2.03 -37.9% need to lower Cu exposure
Carpathian Gold CPN.to jun'10 C$0.39 14-mar-10 C$0.35 -10.3% too exposed to cap raising
Amerix PM Corp APM.v jun'10 C$0.065 08-nov-09 C$0.05 -23.1% victim of macro bear
Antares Minerals ANM.v jun'10 C$1.42 06-dec-09 C$2.10 47.9% sold half
Vena Resources VEM.to jun'10 C$0.37 31-may-09 C$0.23 -37.8% sold half
Minera Andes MAI.to sep'10 C$0.75 28-jul-10 C$0.95 26.7% ST trade closed
Gold-Ore Res GOZ.to sep'10 C$0.52 01-aug-10 C$0.75 44.2% target made, trade closed
B2Gold Corp BTO.to sep'10 C$1.45 25-may-10 C$2.01 34.5% target made, trade closed
Blue Sky Uran BSK.v oct'10 C$0.41 19-may-10 C$0.22 -46.3% v small v bad trade closed
Dia Bras Expl DIB.v oct'10 C$0.14 30-aug-09 C$0.35 150.0% target made, trade closed
S. Amer. Silver SAC.to nov'10 C$1.38 24-oct-10 C$1.60 -15.9% loss on short, small fail
Ventana Gold VEN.to nov'10 C$7.92 27-jun-10 C$13.51 70.6% trade closed on buyout
Lumina Copper LCC.v nov'10 C$1.42 11-aug-10 C$3.65 157.0% trade closed
Antares Minerals ANM.v dec'10 C$1.42 06-dec-09 C$8.40 491.5% trade closed
Rio Alto Mining RIO.v dec'10 C$0.69 23-mar-10 C$2.16 213.0% trade closed
Coro Mining COP.to dec'10 C$0.585 03-oct-10 C$1.24 112.0% target made, trade closed
Stocks To Follow Closed Positions, 2009
Closed positions closed closing PPS
Cardero Res CDY/CDU.to May'09 U$1.20 03-May-09 U$0.87 -27.5% sold on negative news
Eastmain Res. ER.to May'09 C$1.04 06-May-09 C$1.315 26.4% trade closed
Radius Gold RDU.v May'09 C$0.165 03-May-09 C$0.235 42.4% trade closed
Latin Amer Min. LAT.v May'09 C$0.12 03-May-09 C$0.158 29.2% trade closed
Aquiline Res. AQI.to July'09 C$2.03 16-Jun-09 C$1.68 -17.2% took loss, bad timing
Chariot Resources CHD.to Aug'09 C$0.20 12-Jul-09 C$0.415 107.5% trade closed
Castle Gold CSG.v Sep'09 C$0.64 02-Aug-09 C$0.60 -6.3% ST trade didn't work out
Guyana Goldfields GUY.to Sep'09 C$2.30 12-May-09 C$4.50 95.7% profit taken
Los Andes Copper LA.v Sep'09 C$0.09 21-Jun-09 C$0.09 0% trade closed
Pediment Gold PEZ.to Oct'09 C$0.80 09-Aug-09 C$1.00 25.0% trade closed
Minera Andes MAI.to Oct'09 C$0.68 03-May-09 C$0.71 4.4% too much bad news
Dynasty Metals DMM.to Nov'09 C$4.18 03-May-09 C$6.01 43.8% half sold
Rusoro Mining RML.v Nov'09 C$0.55 03-May-09 C$0.57 3.6% underperformed
Important Disclosure
The information and opinions contained within this report reflect the personal views of the author and therefore all
material within should not be construed as accurate or reliable or be utilized as advice for investment or business
purposes. Independent due diligence and discussions with ones own investment and business advisor is strongly
recommended. Accordingly, nothing in this report should be construed as offering a guarantee of the accuracy or
completeness of the information contained herein, as an offer or solicitation with respect to the purchase or sale of any
security or as an endorsement of any product or service. All opinions and estimates included in this report are subject to
change without notice. It is prohibited to copy or redistribute this report to any type of third party without the express
permission of the author.
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