IKN #411Premium

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The IKN Weekly
Week 411, April 2nd 2017
Contents
This Week: In today’s issue, Gold lacks US buyers, Gold miners are real companies.
Fundamental Analysis: NOBS update report on Rye Patch Gold (RPM.v).
Stocks to Follow: Overview, Amarillo Gold (AGC.v), Red Eagle Mining (R.to), Lara Exploration
(LRA.v), Regulus (REG.v), Rye Patch Gold (RPM.v), Solitario E&R (XPL) (SLR.to), Starcore
(SAM.to), Tinka Resources (TK.v), Sandstorm Gold (SAND) (SSL.to), Minera IRL (MIRL.cse),
Atico Mining (ATY.v).
Copper Basket: Overview, NGEx Resources (NGQ.to)
Producer Basket: Overview, Goldcorp (GG), Royal Gold (RGLD), Franco-Nevada (FNV).
Regional Politics: Regional Risk Review.
Market Watching: Red Eagle (R.to): Added to the position plus the 4q16 numbers, DRG
Global (DRG.ax) redux: A tax matter, Graña y Montero (GRAM) follow-up.
I remind subscribers that no part of this newsletter can be copied, reproduced or
given to any third party without the express permission of the author.
This Week
In today’s issue
• We run the ruler over Rye Patch Gold (RPM.v) again, in light of the positive news out of
the company about its permitting last week. It’s been a while since we went with the
numbers here and the crunching is overdue, enough has changed since the original
report on RPM.v in IKN382 to merit a target price adjustment. Fundies section.
• It’s Regional Risk Review edition.
• That Goldcorp (GG) deal for Exeter (XRC.to) and half of Cerro Casale is a weird one and
the market rightly priced GG down on the news. Today’s intro and ‘Producer Basket’
sections have my angles on the story.
• The discounted Red Eagle (R.to) price, plus its proximity to commercial production, saw
me adding to my position last wee. Also on Friday the company reported its 4q16 and
year-end numbers. For all that, Market Watching
Gold lacks US buyers
April is the cruellest month, breeding
Lilacs out of the dead land, mixing
Memory and desire, stirring
Dull roots with spring rain.
The Waste Land, T. S. Eliot
My gold prediction intros, so common in 1q17 are now behind me and a good job too, because
I wouldn’t have been able to call gold back at U$1,250/oz using the tools I’d become attached
to in the first part of the year. However, in order to see further upside in gold I’d suggest that
at least one of the datasets needs to break out of its funk because the way GLD inventories
1

,
have been flatlining recently shows the apathy in mainstream financial circles for the metal:
GLD: Inventory/Price Ratio, US Election to date 8.2
8.0
7.8
7.6
7.4
7.2
7.0
6.8
6.6
6.4
By way of a quick reminder, US BLS jobs numbers are out on Friday. It’s not set up as one of
the key jobs reports but you never know, it’s one of the main US drivers for macro policy
decisions and needs to be watched.
Gold miners are real companies too
As I put together my thoughts on the deal done by Goldcorp (GG) this week to buy half of
Cerro Casale and all of Caspiche (see ‘Producer basket’ below) I got to thinking about the way
these tier one stocks are being run at the moment. The big turnaround story of the sector is, of
course, Barrick (ABX), which has managed to pull back from the precipice since ex-GS-
orthodox-capitalist Thornton took over from gold-prospector-hit-it-big Munk and the decision
was made to run ABX like a normal company instead of applying the crazy pretzel logic that
seems to prevail in the sector.
The difference at ABX has been its new. hard-nosed attitude towards the balance sheet and
particularly to its debt position. In the 2009 to 2011 period Munk added nearly U$12Bn to the
company’s liabilities, most of that as straight financial debt. Which is all well and good if the
gold bull goes on forever, but what we now know is that the party came to a shuddering halt in
2013 and left ABX staring down the barrel of real financial problems. And that’s what has made
ABX under Thornton the big turnaround success; he’s sold fixed assets, hacked down the debt
and plans to continue to do so in the next two financial years (another U$2.4Bn or so to come
off the debt in order to get it down to U$5Bn, he says).
What with the Garofalo decision last week to follow the samo samo route of mining companies
and buy mediocre assets with real money, I got to thinking about the two companies and
compared their balance sheets over the important recent period. There are plenty of interesting
comparisons that show up and we could take a lot of space to chew them over, but the crux is
in two datasets comparing the crisis year end of 2013 to the end-of-tunnel year end of 2016:
• In the period end 2013 to end 2016, Goldcorp increased its financial debt by U$1.0Bn
• In the period end 2013 to end 2016, Barrick reduced its financial debt by U$5.1Bn
• At end 2013 Goldcorp had a market cap of U$17.1Bn. Today its market cap is U$14.6Bn
• At end 2013 Barrick had a market cap of U$18.1Bn. Today its market cap is U$19.0Bn
In a nutshell, the decision by Thornton to treat ABX as a normal company that needs to show
financial discipline and balance sheet strength has seen the market cap of the company under
his charge increase by close to a billion from the start of the slump to the end of the tunnel.
However the collective decisions of Telfer and Garofalo, prizing gold ounces and project
collection over basic financial well-being have seen GG’s market cap (aka “the silver of hope
that lies between assets and liabilities”) drop by over U$2.5Bn.
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 71/03/3
GLD gold holdings, US Election to date (metric tonnes)
1000
975
950
925
900
875
850
825
800
775 Source: SPDR data
750
61/9/11 61/61/11 61/32/11 61/1/21 61/8/21 61/51/21 61/22/21 61/03/21 71/9/1 71/71/1 71/42/1 71/13/1 71/7/2 71/41/2 71/22/2 71/1/3 71/8/3 71/51/3 71/22/3 71/92/3
mt
source: SPDR GLD data

,
The decision last week by GG to buy into Cerro Casale, plus the stated intention of ABX to keep
reducing its financial debt by selling fixed assets (and apparently the next deal is close to hand)
show that the trends we saw in both companies in 2013 to 2016 are only set to continue. In
other words, one of these companies is doing it the old-school way, betting on projects and
hoping gold prices makes it look smart later. Meanwhile, the other company is being run well.
Fundamental Analysis of Mining Stocks
Today we revisit Rye Patch Gold (RPM.v).
NOBS update report dated April 2nd, 2017
Rye Patch Gold Corp. (RPM.v)
Company Overview
Rye Patch Gold Corp. (Canada: RPM.v, USA otc: RPMGF, Frankfurt 5TN.f) is a Vancouver
domiciled junior mining company operating mainly in Nevada, USA. Its flagship is the Florida
Canyon gold mine, now ramping up operations. Current share structure is as follows:
Shares out: 387.3m
Options: 15.1m
Warrants: 42.4m
Fully diluted shares: 444.8m
Current share price: C$0.34
Market Cap: C$131.68m
Fully Diluted Market Cap: C$151.23m
Approx working cap per S/O: C$0.04
All prices are in Canadian Dollars unless stated. Forex U$0.75=CAD$1
NB: As Rye Patch reports in Canadian Dollars that is default currency in this report. When used or
mentioned, United States Dollars are denoted “U$”.
Today’s update
We opened coverage on Rye Patch Gold (RPM.v) in the NOBS report in IKN382, dated
September 4th 2016. On that day, with the stock trading at 37c, the call was to buy the stock and
though we saw plenty of risk to the plan, the potential reward and a 75c price target offset that
nicely. Then in IKN400 a in December I took advantage of the drop in price of RPM, added
more and reduced my cost average to where it is today. So far in 2017 RPM has been a laggard
and if you’ve been following the week-over-week commentaries you’ll know that I’ve been close
to cutting this trade loose, taking the loss and putting it down to experience, but good news last
week may have changed that for the better.
Since the original coverage in IKN382 RPM has moved forward with its plan to put the Florida
Canyon open pit heap leach gold operation back into production, but not nearly as quickly as
their original plan envisaged. Even our original assumptions, more conservative on the timeline
than the company’s, have been shown as overly optimistic so instead of reaching 2q17 with
commercial level production we’re only now starting to get the mine into operating gear. Aside
from extra time needed to get Florida Canyon to the point of production, the main block on the
critical path has been permitting fo the mine from State authorities but last week news arrived
that the mine had finally been granted the key cyanide use permit and was finally beginning to
3

,
irrigate its leach pads (1). In that same release, the company stated that production was up to
70% of full speed, optimization was beginning and that we could expect first pour in this month
of April. Our job today is, therefore, to revisit the RPM model and take into consideration the
new circumstances (2), which include the cost to RPM of the delays, the change in the price of
gold etc and, now that we have a working mine on our hands, work out a new price target. This
means that we’re not going to re-visit a lot of the nuts and bolts work in the first NOBS report,
from here on the task is to keep focus on the numbercrunching and arrive at a reasonable new
price target. So, first an update of company financials, then the cash flow model, finally tie it
together for a revised target and recommendation. Really will keep it neat and concise today,
about time too.
Financials overview
The thing that surprised me about the way RPM used its big cash injection during 2q16 was
how it immediately wrote cheques and turned the cash into mining assets. Back in IKN382 I’d
guessed the cash pile going above $50m but it didn’t work that way, Florida Canyon was the
place where the big bucks were immediately added (left) and the cash treasury position didn’t
even make it to $12m (right)
RPM: Assets 160
140
120
100
80
60
40
20
0
That’s fair enough and wouldn’t be an issue if the mine had started on time, but the delay to the
start of production that ran all through 1q17 means that even by my best reckoning and taking
into the account the approximate $4m RPM got
from the sale of remnant gold during 1q17, cash
is going to be tight. Yes, that’s a potential issue
for this current quarter because if, as that cash
chart above and this working capital chart to the
right indicate, RPM starts and finishes Q2 with
$3m at bank it means that liquidity could
become tight at some point in the three month
period. Although working capital looks okay with
$5m to play with, around $10m of that is
inventory and that’s a going concern item, not
something that can suddenly be tapped. It’s fair
to say that the irrigation permit didn’t come a
moment too soon.
As for liabilities, they moved up as expected and
when the 4q16 numbers come out, I’ll be looking
carefully to see if there’s any difference to my
modelled assumption of “no change until 3q17”
(when the scheduled $5m payment due on day
60 of commercial production is due).
Which brings us to shares outstanding (below).
As this chart shows, I’m still assuming for the
model that RPM keeps the share count where it
is, at 387.3m (445m f/d). However I think it’s fair
4
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 tse61q4 tse71q1 tse71q2 tse71q3
$m RPM: Cash treasury per qtr fixed 20 other current
cash 18
16
14
12
10
8
6
4
2
0
source: RPM filings
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 tse61q4 tse71q1 tse71q2 tse71q3
source: company filings/IKN ests
srallod
fo
snoillim
22 RPM: Working Capital per qtr
20
18
16
14
12
10
8
6
4
2
0
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 tse61q4 tse71q1 tse71q2 tse71q3
source company filings/IKN ests
srallod
fo
snoillim
RPM: Liabilities Breakdown per qtr
60
50
40
30
20
10
0
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 tse61q4 tse71q1 tse71q2 tse71q3
source: company filings
srallod
fo
snoillim
LT debt
current debt

,
to say that, given the now potentially tight quarter ahead, that RPM decides to sell paper in
order t raise cash. That wouldn’t be a good thing.
RPM: Shares Out
500
450
400
350
300
250
200
150
100
50
0
5
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 tse61q4 tse71q1 tse71q2
source: company filings/IKN ests
serahs
fo
snoillim
The bottom line to the financials is that when the 4q16 are filed (should be in the next two
weeks) I’ll have a better idea of the risk, but there’s little doubt that the delay to start-up at
Florida Canyon has put the corporate financials under pressure. The announcement of start-up
and first pour in April may have come in time (and it’s also possible they’ll be able to front-load
production by using some of their highest grade material, specially selected for the first few
weeks of operations) but the the apparently comfortable financial position set up at the start of
this Florida Canyon game-changing acquisition is tighter than it should ever have been. I’m not
expecting a new placement round from RPM but it wouldn’t come as a shock or surprise any
longer. If it does come, it won’t do the new target price any favours.
Re-running the valuation on RPM
At this point I will again invite you to look back at the report in IKN382 because we ran the
model on expected production and operating cash flows, the same as today below. But today
I’m being a little less optimal in my assumptions, as well as adjusting the model for the drop in
the price of gold since then (remember back in the days when Hillary was favourite to become
the next President of The USA?).
The two main adjustments are the following to the model year calculation, all with a view being
more conservative about the potential at Florida Canyon:
• Average gold production of 75,000 oz. This is down from the 76,450 oz model and I’ve
cut the number even though grade and projected recoveries indicate the original
number at perfectly gettable. The way this project has begun doesn’t inspire confidence
that RPM will be able to aim for optimum operations.
• An operating cash cost of U$800/oz, up from the U$716.50 we used previously that was
taken directly from the 43-101 compliant economics report on Florida Canyon. The
higher per-ounce cash cost is assumed due to 1) slightly lower model year production
2) reported cost creep beginning to show up in the sector 3) the want to be more
conservative about this operation and not automatically assume the optimum.
Aside from those, and the slight adjustment of the CAD/USD forex to 0.75/1 (we were still using
0.8 back in IKN382) the restof the model stays as-is. As for the gold price assumptions, they’re
now like this the following way those in place we can make a good guess at the operating
income potential of Florida Canyon. The final step is to apply the criteria to four different gold
prices to get an idea of how Florida Canyon looks when things are bad, when things are good.
• Stress Test: U$1,000/oz average gold price. That’s the same as in IKN382, we need to
see if Florida Canyon ops can continue even if the stock comes under pressure from
low gold prices. As a reminder RPM does the same and uses $1k/oz in its PEA.
• Baseline: U$1,200/oz average gold price,the same as before.
• Real Today: U$1,250/oz, a reasonable proxy for this weekend’s price for gold. Back in
IKN382 I was using U$1,324/oz and that made the economics look a whole lot better.
• Blue Sky: U$1,400/oz, down from the U$1,500/oz assumption of before. U$1.4k is my

,
target price for gold this year, I think it’s disingenuous to assume a higher blue sky price
than that for the moment.
With adjustments now in, we use the same spreadsheet as before to run the numbers and
present them with the same results table, too:
RPM at Florida Canyon: Model Year Revenues & Op Income (U$m)
Price Deck Stress Test Baseline Real Today Blue Sky
Prod. gold (Oz) 75,000 75,000 75,000 75,000
U$/oz $1,000 $1,200 $1,250 $1,400
gold revenues $75.00 $90.00 $93.75 $105.00
Op costs $60.00 $60.00 $60.00 $60.00
5.75% royalty $4.31 $5.18 $5.39 $6.04
sales costs $0.38 $0.38 $0.38 $0.38
Operating income $10.88 $25.13 $28.69 $39.38
Op inc/ FD share $0.03 $0.06 $0.07 $0.09
Sources: RPM data, IKN calcs and estimates
Once again, I’m going to base my target on the “Real Today” column that shows what RPM at
Florida Canyon is capable of achieving under today’s gold price. The operating income of the
model year of U$28.69m works out at CAD$38.3m approx, the U$0.07 per F/D share comes to
CAD$0.093.
As for a target price from that, I’m going to stick with the 6X multiple to operating income we
used in IKN382. RPM isn’t a story that will be valued on bottom line profits (be they real or
theoretical), because it’s going to be ploughing back the cash flow in the first couple of years.
What it needs to show is a profitable operation and for that we can’t beg a 10X or 12X multiple
the same way as an EPS. So 6X is good for me and that put the new target at 56c (rounded),
representing a 64.7% upside to this Friday’s close.
Conclusion
I’m holding my position in RPM on the back of last week’s news that the Florida Canyon mine is
now irrigating its leach pads, will soon give us first pour and can start moving through the gears
to its planned full production rhythm. However there is now a catch; due to the delay, RPM’s
corporate financials are now under pressure
and if it decides to run a placement, the
resulting dilution is likely to prove too much
for my blood. It would depend on the size
and shape of any round of financing, but just
as one possible example we can imagine a
F/D total that goes to 500m shares. That
would bring the per-share operating income
down to around CAD$0.076 and the target
to 46c, which isn’t enough to offset my risk
of holding a 34c stock. Therefore, if RPM
makes it through 2q17, production ramps up
as planned and the company has enough
cash to get it through the potentially tight
liquidity spot then I’m a holder. But if a
placement comes along it will be my signal
to abandon the trade, no matter whether at a slight profit or loss, and chalk another one down to
experience.
End of Report
6

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Stocks to Follow
The portfolio underperformed this week. Five of the current 15 open positions on the Stocks to
Follow list returned weekly gains (TK.v, R.to, AGC.v, RPM.v, RRI.v) and the other nine were
losers (BTO.to, REG.v, SAND, CDB.v, ATY.v, XPL, EXN.to, MIRL.cse, SAM.to, ERC.v) so the
headcount is not in our favour, but even though most of the losers were small percentage
drops (e.g REG, SAND, ATY down 2c each) the 11c lost by B2Gold (BTO.to) along with its
weighting did for the portfolio. Not even the strong gains filed by Rye Patch (RPM.v up 17.2%)
and Riverside (RRI.v up 8.9%) could save the aggregate.
With the replacement of Lara (LRA.v) for Amarillo (AGC.v) we’re at 15 open positions on the
‘Stocks to Follow’ list, our self-imposed maximum at any given time. Eleven of the positions are
in the green, four are in the red. It’s also worth a mention that in general terms, with
exceptions to the rule, the picks with the largest cash weightings are the ones that have done
the best so far. Not a bad thing.
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$3.79 79.6% tgt $5.30 Top Pick prod.
Regulus Res REG.v STR buy C$0.64 06-apr-15 C$1.58 146.9% LT exploreco top pick
Long positions (in current order of preference)
Sandstorm Gold SAND STR buy U$3.87 17-apr-16 U$4.27 10.3% $7 tgt, added March'17
Cordoba Min. CDB.v STR buy C$0.73 15-sep-16 C$1.26 72.6% $1.50 tgt hit, rebounding again
Atico Mining ATY.v buy C$0.54 24-jul-16 C$0.83 53.7% tgt $1.10, Cu play
Tinka Res TK.v buy C$0.195 19-apr-16 C$0.56 1.0% Was under-radar; no longer!
Solitario XPL buy U$0.80 19-mar-17 U$0.82 187.2% new Zn trade. Deep value.
Excellon Res EXN.to STR buy C$1.71 09-oct-16 C$1.60 -6.4% $3.13 tgt, Ag growth story
Minera IRL MIRL.cse buy C$0.195 22-jul-12 C$0.145 -25.6% tgt 53c, risk + much reward
Red Eagle Min. R.to buy C$0.71 13-dec-16 C$0.77 8.5% Ramping up, great March buy
Amarillo Gold AGC.v buy C$0.38 24-mar-17 C$0.385 1.3% new position, value gold
Starcore Intl SAM.to hold C$0.61 10-jan-15 C$0.51 -16.4% ex-Top Pick, reduced, holding
Rye Patch Gold RPM.v hold C$0.31 02-sep-16 C$0.34 9.7% 56c tgt IKN411, risk/rewrd spec
Eros Res ERC.v spec buy C$0.18 01-mar-17 C$0.175 -2.8% New position, deep value
Riverside Res RRI.v spec buy C$0.39 27-jun-16 C$0.49 25.6% Will take profits at 60c tgt
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
Lara Expl. LRA.v Mar'17 C$1.15 08-apr-12 C$1.05 -8.7% sold to make room
2009 to 2016 annual closed positions in appendices below
Now for notes on some of the current basket stocks:
Amarillo Gold (AGC.v): Position opened. As per the NOBS report of IKN410 last week, I
opened my position in AGC and it starts with a 38c cost average that I’ll look to reduce if lower
price show up. As per (bleedin’) usual we also got a price bump that took until Friday to begin
to wear off (serious guys, what’s the point in paying up?) that’s easily ignored. What I did like,
however, was the volume at which AGC traded because it was over 100k every day last week,
(lowest was 116k on Friday) the last time a sequence like that happened to AGC trading was
April 2016. This is what AGC needs, a bit of share ownership refreshment to jig things up (you
7

,
may remember how TK.v suffered from the same malaise for many months). The next step
from AGC, aside from that imminent date when the December placement shares go free-trading
(April 13th if my calculation is right, but don’t trust me 100% on that), is the filing of the
updated PFS to SEDAR. AGC has three weeks max to do that and when it does, it will be
essential reading material for your author and for any other long out there now (the volume
pop suggests it isn’t just me).
Red Eagle Mining (R.to): Position added. As per the Flash update of Thursday morning
(see Appendix 1) I added a slug of R.to shares to my holding and averaged down slightly in the
process (it’s just the right side of 71.5 to count, I’ll take it, bite me). Se ‘Market Watching’
below for more on the decision and a quick overview of the 4q16 financials, which were filed on
Friday evening by R.to
Lara Exploration (LRA.v): Position closed. As per IKN410, this position is now closed. LRA
continued trading on a wide bid/ask last week and on light volume, I got a very nice mail from
Miles Thompson and yes, given a proactive opportunity (plus cash and space on the list) I
wouldn’t hesitate in adding LRA back to the covered stocks list.
Regulus Resources (REG.v): Expect positive news out of REG tomorrow Monday, word
reaches this desk that REG late Friday (i.e. too late for a NR last week) nailed down the last
piece in the agreement puzzle at AntaKori, the Colquirrumi Definitive Agreement. There was
little doubt there would be a problem, it was all about crossing Ts and dotting Is, but now that’s
finalized and signed the quasi-JV can get on with the real job of drilling the project.
As noted last week, I sit down with CEO John Black in the very near future (for lunch, in fact)
and with a little luck company president Fernando Pickmann will be there, too. All insights and
snippets from that meeting will be duly passed on, but suffice to say at this point with a near-
150% gain on my hands that I’m a happy holder of the stock as the no-news period of this deal
comes to an end and the next stage gets into gear.
Rye Patch Gold (RPM.v): We cover the positive
news out of RPM in today’s Fundies section above,
here to note that now we have a permitting green
light from Florida Canyon I’m feeling better about
holding through on this trade, let’s see where this
current move takes us. Volume improved on receipt
of the news (3) as well as price, as you might
expect, but I was a little surprised to see the lag in
any real move until late Thursday/early Friday. A bit
of a sleeper perhaps, but when the significance of
the receipt of irrigation permit began to sink in RPM
made a more respectable rebound move. I think
there’s more to come.
Solitario Expl & Roy. (XPL) (SLR.to): The last part of last week’s note on XPL was on the
post-reco price bounce and how it wouldn’t last. It went like this:
“...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.”
Although XPL is back under 80c yet, that prediction was on the button and XPL deteriorated as
the week wore on, volume getting thinner. Fine by me and as soon as the true prices show up,
I’m adding.
Starcore Intl (SAM.to): I’m forced to admit it, even though I try to take a long-term view
and patient attitude to the vast majority of my mining stock positions the action last week in
Starcore (SAM.to) was somewhat disappointing.
8

,
Not the 51c close on Friday, that was a one-
off trade and the price is near-certain to
bounce back next week. What’s a drag is the
lack of follow-through on the price action last
week after the real estate news of the week
before, the market has decided to ignore this
company’s newly strengthened fundamentals
and let it bounce around at 53c and 55c on
thin volume.
I’ve said it before and I’ll say it again, one of
my Achilles’ Heels as a junior trader and
investor is the Value Trap stock and
unfortunately, SAM.to is showing some classic
symptoms here.
Tinka Resources (TK.v): TK did well last week, bouncing back from the profit-taking sellers’
drop of the week before and trading between 54c and 60c Monday through Thursday. We had
that day-long trading halt on Friday which was
slightly mysterious (and overly-long), but as
noted on the blog yesterday Saturday (4) the
underlying reason is that TK will give us drill
assay results before the bell tomorrow
Monday morning. We await the details of the
assays and although I’m expecting the news
to be positive, the near-term dynamic will be
to see just how much optimism on the current
campaign is already baked into the price.
Finally, as long as there aren’t any last minute
schedule changes I’m meeting up with TK CEO
Graham Carman next Friday. If you have any
specific questions I’ll be happy to relay them
and report back, but rest assured you’ll get a report on the meeting in IKN412, next weekend.
Sandstorm Gold (SAND): We should expect the 1q17 sales report from SAND next week.
The stock went through another week of treading water, closing down just two cents despite
the sentiment improvement at its interesting Hot Maden play (MARL stock rallied around 20%,
SAND holds equities of MARL plus that valuable looking 2% NSR on the whole deposit) and the
closure of the Trek Mining re-organization that carried the ex-Luna Gold Aurizona project and a
lot of SAND value.
Minera IRL (MIRL.cse): IRL reported its quarter on Friday evening and there was no
surprised at all in the numbers, right in line with expectations and that means:
• Corihuarmi continues to throw off modest free cash flow. In 4q16 the operating cash
cost of U$824/oz and AISC of U$1,110/oz makes that clear.
• The Cofide deal is officially revoked
• Though official working capital is deep in the red, the real world working cap is is
reasonable shape and the company has enough liquidity to see it through, assuming of
course that Cofide doesn’t call in the loan in hardball style (we repeat: it won’t, this is a
zero worry).
• Importantly (and don’t take this for granted the way the idiots Hodges and Pinto did),
as per the MD&A the company is in good standing with the local Ollachea community.
Unofficially I can report from my best Ollachea contact that the community is pleased
Diego Benavides is running the show and he’s due to visit this month of April. I doubt
he’ll go there without solid news to offer up about the project development.
9

,
A minor positive was the Corihuarmi guidance for 2017, set at 22,000 oz gold, or 5,500oz/qtr
and better than my 5k/qtr model. As long as we don’t get a gold price crash, that means IRL
will continue to enjoy useful free cash flow and now its G&A costs are going to drop
substantially (no more ridiculous lawyers’ fees or heavy-handed director salaries to pay) will
help keep the company ticking over as it moves on the Ollachea financing deal. On that subject,
the paragraph that most catches the attention is in the cover NR that quotes company chairman
Gerardo Pérez and says the following:
“Regarding the mandate for the U$240m structured financing subscribed with COFIDE
dated June 2015; the agreement was revoked by COFIDE due to a strategy change of
the organization by the government of Peru. Once the exclusivity clause of the
mandate lapses on April 1st 2017, the company's objective is to secure financing for
the Ollachea project during the second quarter of 2017.”
Couldn’t have put it better myself. Noteworthy is the lapse date for the exclusivity of the Cofide
agreement, which was yesterday. That effectively means IRL is now free to talk with third
parties on an official basis as of this week, though we can be confident that preliminary talks
have already gone on with several prospective partners.
In trading, things were quiet again but this desk did pick up reports that Seminario SAB, the
Lima brokerage, has again been trying to shake the tree and spread nerves around local
holders with scare stories of impending company collapse. The reason is simple, there’s a big
buyer who wants as many shares as possible at a low price. His name is Napoleon Valdez, he’s
the ex-director of IRL and he was one of the ringleaders of the attempted usurping of the
company in 2015.
Atico Mining (ATY.v): Traded quietly. ATY is still a couple of weeks away from its 4q16
financials and its quiet period is showing in trading. In other news there was a change in the
board as Jorge Ganoza (head of FVI) has tendered his resignation as director and (non-xec)
chairman in order to concentrate efforts on running Fortuna Silver, so they say (5). No biggie, it
seems.
The Copper Basket
After thirteen weeks of 2017, The Copper Basket shows a 12.47% 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 93.587 595.21 6.36 5.0%
2 Capstone Min. CS.to 1.26 382.04 496.65 1.30 3.2%
3 NGEx Resources NGQ.to 1.20 205.06 200.96 0.98 -18.3%
4 Western Copper WRN.to 1.86 94.19 165.77 1.76 -5.4%
5 Excelsior Min. MIN.to 0.63 167.364 135.56 0.81 28.6%
6 Copper Mtn CMMC.to 0.94 118.8 122.36 1.03 9.6%
7 Amerigo Res ARG.to 0.345 173.61 112.85 0.65 88.4%
8 Cordoba Min. CDB.v 0.73 88.6 111.64 1.26 72.6%
9 Regulus Res. REG.v 1.20 68.368 108.02 1.58 31.7%
10 Atico Mining ATY.v 0.95 97.59 81.00 0.83 -12.6%
11 Trilogy Metals TMQ.to 0.66 104.33 74.07 0.71 7.6%
12 Coro Mining COP.to 0.15 483.425 71.06 0.147 -2.0%
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 12.47%
The Copper Basket average dropped again last week, but this time the decline was more
10

,
modest at less than a percentage point. Six stocks recorded gains on the week (III.to, CS.to,
WRN.to, CMMC.to, MIN.to, COP.to), three were
unchanged (NCU.to, CUU.v, RVL.v, the three
smallest market caps on the list) and the other
six stocks were losers (NGQ.to, ATY.v, REG.v,
TMQ.to, CDB.v, ARG.to). The only double figure
percentage move in either direction was the
10.9% lost by NGEx Resources (NGQ.to).
The direction of the basket differed from that of
the metal, but the way in which copper
bounced back to within its standard $2.60/lb to
$2.70/lb trading range was less about optimism
and more about a return to the new normal.
The macro on the metal was balanced, too. On the
supply side came bearish price news (6) (7) that the
Cerro Verde strike was over, with unions and
management working out a deal (funny how these
things coincide with the end of the really bad
weather in the South of Peru) and that Freeport and
Indonesia are close to a deal to resume copper
exports. Smelting charges rose on that double-team,
as supply to Asian refineries is expected to return to
something close to normal in a week or two. On the
demand side came bullish price news as China’s
manufacturing survey came in unexpectedly hot on
Friday, signalling stronger medium-term demand.
The price chart shows the ping from lows early week
and then a series of UNCH days as copper tried to
decide what to do. In effect nobody knows yet and
though I’m definitely in the bullish camp for the
medium-term (sticking with my “above U$3.10/lb this
year” call for 2017), my best guess is that Q2 could be choppy inside the current range.
We come to the end of another month, here are the long-term inventory tracking charts.
Copper inventories, per month, 2012 to date
1000000
900000
800000
700000
600000
500000
400000
300000
200000
100000
0
11
21.naJ bef ram rpa yam nuj luj gua pes tco von ced 31.naJ bef ram rpa yam nuj luj gua pes tco von ced 41.naj bef ram rpa yam nuj luj gua pes tco von ced 51.naj bef ram rpa yam nuj luj gua pes tco von ced 61.naj bef ram rpa yam nuj luj gua pes tco von ced 71.naj bef ram
The Copper Basket 2017, weekly evolution
30%
25%
20%
15%
10%
5%
0%
Mt Cu source: Cochilco
LME Shanghai Comex
A big hike in overall copper stocks, we haven’t seen inventories this high since the big build-up
of 2013 that presaged the price drop from the then-normal U$3.50/lb (copper went on to lose
the U$3/lb level in late 2014). However, this time may turn out to be a one-off spike due to the
bear attack (almost certainly from China and using unofficial stockpile inventory). We got a high
spike in both 2015 and 2016, a reversion in April would fit the cycle even if this month’s total is
more exaggerated. On the other hand, if April sees more added watch out below.
ts1naJ ht8naj ht51 dn22 ht92 ht5bef ht21 ht91 ht62 ht5 ht21 ht91 ht62 dn2rpa
source: IKN calcs

,
The percentage chart sees equilibrium restored between the two main players, while the
Comex’s slow and steady rise to between 17% and 18% of the world total continues to claim
attention. This is boil-a-frog stuff, at some point Comex may become a price driver for copper
rather than a follower.
Copper inventories: percentage held per exchange
80
70
60
50
40
30
20
10
0
12
21.naJ bef ram rpa yam nuj luj gua pes tco von ced 31.naJ bef ram rpa yam nuj luj gua pes tco von ced 41.naj bef ram rpa yam nuj luj gua pes tco von ced 51.naj bef ram rpa yam nuj luj gua pes tco von ced 61.naj bef ram rpa yam nuj luj gua pes tco von ced 71.naj bef ram
LME Shanghai Comex source: Cochilco
Now for the regular weekly copper warehouse inventory bullets:
• World copper inventories dropped last week, the trend to de-stocking is now set fair
and overall depletion over the three official systems came to 23,999 metric tonnes (mt)
(-3.2%) to finish Friday at 727,951mt. No surprises.
• SHFE Shanghai stocks dropped again, down a modest 5,208mt (-1.7%) to close at
307376mt. Things are going according to the yearly cycle playbook, not too much to
read into this number at the moment.
• For the second week running we had a 20k+ drop at the LME, this time down 21,350mt
(-6.8%) the close at 291,175mt. Once again, Asian warehouses saw the lion’s share of
the drawdown (around 18k).
• It was business as usual at the Comex as well, with a 2,559mt (+2.0%) increase to
stocks that increases the total under roof to to finish the week at 129,400mt. Trend the
friend, part trois.
Here’s the Shanghai-only chart, the rollover formation continues, it’s still just a case of how fast
stocks fall in its warehouses rather than whether. It’s this time of year that we get “stocks
falling! Bullish for copper!” noises from people who cherrypick data to suit their prejudices; filter
them out.
Shanghai Futures Exchange Warehouse Stocks, Dec'13 to date
400000
350000
300000
250000
200000
150000
100000
50000
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

,
Now for notes on just one basket stock, not so much here this week:
NGEx Resources (NGQ.to): End of the quarter and after many weeks of scratching around at
low volume with a slow deterioration in the share price, something snapped inside the head of
one smallish holder. It looks as though they had around 10k shares to sell and on stepping up
to the plate found no buyers at all, which is not a good sign. NGQ sold down to 92c at one
stage before recovering somewhat and closing the week at 98c, still nearly 11% down though
and a world away from the optimistic noises of mid-2016.
I’m not a fan of this company as a vehicle to trade copper. Yes it has big concessions and yes
there’s a lot of contained copper already in its 43-101 numbers and with plenty to add. But its
grade is iffy at its main deposits (in Chile) and the big blocking point that the good stuff isn’t
just in Argentina, but it’s in a location in Argentina that comes under the Glacier Law rules.
“Miner-friendly” province or not, that leaves NGQ wide open to the worst the basket case
country can throw at it.
The Producer Basket
After 13 weeks of 2017, the Producer Basket shows a gain of 9.10% 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 22.13 18.99 18.8%
2 Newmont NEM 34.07 530.595 17.49 32.96 -3.3%
3 Goldcorp GG 13.60 832.381 12.14 14.59 7.3%
4 Franco Nevada FNV 59.76 178.01 11.66 65.51 9.6%
5 Agnico Eagle AEM 42.00 223.475 9.48 42.44 1.0%
6 Royal Gold RGLD 63.35 65.281 4.57 70.05 10.6%
7 Kinross Gold KGC 3.11 1245 4.37 3.51 12.9%
8 Ang/Ashanti AU 10.51 405.27 4.36 10.77 2.5%
9 Buenaventura BVN 11.28 254.19 3.06 12.04 6.7%
10 Sibanye Gold SBGL 7.06 228.71 2.01 8.81 24.8%
Prices in U$, NYSE or NASDAQ tickers Portfolio avg 9.10%
The basket average lost 1.26% last week, a worse performance than the GDX which lost less
than half that on the week that has cut the advantage our choices for 2017 have over the
benchmark to a tiny 0.07%...basically nothing. Our little list saw three winners (FNV, RGLD,
KGC), one unchanged stock (SBGL to the penny) and six losers (ABX, NEM, GG, AEM, AU, BVN).
Most moves were small on either side, the outlier being the 7.9% lost by Goldcorp (GG) on the
13

,
news it had decided to throw money down the toilet in Chile.
The 2017 Producer Basket: Weekly performance and
comparative to GDX control
25%
20%
15%
10%
5%
0%
14
ts1naJ ht8 ht51 dn22 ht92 ht5bef ht21 ht91 ht62 ht5 ht21 ht91 ht62 dn2rpa
basket
gdx control
source: Google, IKN calcs
Goldcorp (GG)
"seekinge..too make a silke purse of a Sowes eare,
that when it shoulde close, will not come togeather."
Rev. Stephen Gosson, Ephemerides of Phialo, 1579
The biggest news out of the majors last week was the announcement from GG (8) that it was
moving into Chile, via a three-cornered deal which (to make it simple) sees it spend the
following:
• Approximately U$185m in shares for Exeter Resources (XRC.to) (XRA), mainly for its
Caspiche gold project.
• U$260m in upfront cash for the 25% of the Cerro Casale project owned by Kinross
(KGC), with another U$40m payable to Kinross when a positive construction decision is
made (thought there is some minor hair on this end of the deal including other early
stage exploration lands, NSRs and some water rights, so check the documents for the
whole story if you care enough).
• An agreement with Barrick (ABX) in which GG gets another 25% of Cerro Casale owned
by ABX in exchange for GG paying for development costs and adding in the nearby
Caspiche project into the JV.
The market reaction to this three deal was to dump GG stock hard (and at the same time
reward Kinross with a weekly win against the sector grain) and without mincing words, I think
the market is 100% right and Garofalo is 100% wrong, convoluted “20/20/20” marketing
concepts or not. For one thing, Cerro Casale is a case that got studied over at the blog quite
closely once upon a time (when people cared about it). For example way back when in 2009 (9)
when writing:
“...one highly respected professional in the field who knows the Chilean heights very
well has told me on more than one occasion that in his opinion Cerro Casale will never
be a mine. He's not bearing a grudge or with skin in the game or similar; he just says it
as a rockdude wearing his hardhat.”
For another example back in 2011 when we noted (10) that the capex for the (supposed 23m
oz Au and 6Bn lbs Cu) Cerro Casale, first estimated at U$1.4Bn in 2004, was then pegged at
U$6Bn. For yet another, in 2013 when we noted (11) Barrick valued its (then) 75%
participation of Cerro Casale, by that time with its environmental permit approved, at U$1.8Bn
(which means Kinross sold its piece at half price if you believe accountants...okay, I’ll stop the
silly jokes right there).
The GG plan seems to be to improve both Caspiche and Cerro Casale by throwing them
together, but in my view two wrongs will never make a right because in Cerro Casale we are
still considering a $6Bn project with marginal economics and adding Caspiche to the mix won’t

,
make that price any cheaper (and it probably means going through the enviro permitting track
all over again). In this case we need to see the wood for the trees, Cerro Casale was a marginal
project in 2004, in 2011, in 2013 and is still exactly that here today in 2017. But that hasn’t
stopped yet another major from scratching this permanent itch and committing good cash to it,
plus the promise of 50% of a serious, serious capex bill to come to a project that will always
demonstrate profitability at the mercy of near or middle-term moves in the gold price.
Of course, the other thing about the GG move is how it gets to add reserve ounces to its books
(at a relatively minimal cost), after all half of Cerro Casale and all of Caspiche is upwards of
30m oz gold if you believe everything you read. This may have been part of the decision made
by Garofalo to buy 50% of Cerro Casale (as well as wildly overpaying for XRC), but I just can’t
go for this line of reasoning any longer and neither should you. As I wrote to a market pal on
the day of the announcement (part of a longer string of mails)...
“I mean i get it, the whole cheap reserve ounce philosophy, but it's exactly that which
drives my comment of never being able to understand this sector. The reserve ounce
thing is accepted in mining as a value driver (esp tier 1) but it's utter bullshit, pure
Emperor's New Clothes stuff. Ask Newmont about Conga for an example. All i see in
this XRC deal is yet another big PM company refusing to learn from the mistakes made
over the years and buying into the samo samo thinking that has seen them go boom
bust boom bust sans cesse. GG is under new mgmt but not much else.”
Garofalo must have been annoyed at the negative reception given by the market to this deal,
but that’s because he’s got the deal wrong. These aren’t reserve ounces, they’re crappy ounces.
This isn’t great opportunity for GG, it’s a roll on the dice and adds risk to the company. It’s not
an added value, the way the market cap dropped week-on-week by U$1.25Bn, way more than
the paper cost of the whole package, is an immediate and in my view correct verdict on this
new dose of gold sector insanity. To underscore this, Kinross was the only “real” gold miner on
the list (see below) to post week over week gains, the market rewarding it for getting out of
Cerro Casale with some real cash to show for it. As Einstein wisely noted, madness is doing the
same thing over and over again and expecting a different result.
Royal Gold (RGLD) and Franco-Nevada (FNV): I was a little unfair on these two
companies in that last paragraph above by refusing to call them “real” mining companies, but
the fact remains that these excellently run, financially solid and constantly profitable companies
are not precious metals mining companies in the true sense of the phrase. So it’s interesting to
note how the market rewarded these two and their much lower risk rating by buying them up
while all around them prices dropped (including gold this time, too). I’d suggest that part of the
whole theoretical flight to safety that may be underway would show up in this type of against-
current move by the streamer/royalty companies and though it’s very tough to make that claim
on just a week’s worth of evidence, in the end it’s the reason I decided to add RGLD to the
basket this year in my attempt to beat GDX. The next two or three weeks will decide whether
what we’ve just witnessed was a one-off or whether a trend is forming. Watching brief.
Regional politics
Regional Risk Review
It’s the end of a quarter as well as the end of a year and that means it’s time our regular review
of Latin America regional political risk for junior mining companies. This is the 16th edition of the
revised format, the latest having come in IKN398. The standard reminder of how the categories
are considered with their score out of ten: The six categories are:
a) National Government Miner Friendly: The country on its national stance towards
mining activity.
b) Community/Social Miner Friendly: The overall attitude of locals towards mining,
either in specific zones or in country regions.
15

,
c) Foreign Direct Investment (FDI) Friendly: The openness towards FDI and the
safeguards it gives to foreign capital looking for a home.
d) Mining Culture: Countries or regions with generational traditions in mining are easier
places in which to operate than those which have little previous exposure to formal
mining operations.
e) Geopolitical Optics: The way in which the outside world sees this country, an
important factor, no matter if the perception be right or wrong.
f) Internal/National Political Stability: A gauge of how stable the place is politically.
As usual we concentrate on the nine countries with the best potential to host companies, rather
than try to offer a comprehensive LatAm-wide view that takes in countries with little or no
appeal for investment or speculation in juniors. Here’s this quarter’s table, below the country-
specific notes.
March 2017 Latin American Country Risk For Foreign Mining Companies
Nat. Govt Community/Social Geopolitical Internal Nat.
Country FDI Friendly Mining Culture Total
Miner Friendly Miner Friendly Optics Political Stability
LatAm countries under active consideration for junior mining project location
Chile 9 7 8 10 7 8 49
Peru 9 7 9 9 6 7 47
Mexico 8 6 8 9 6 7 44
Nicaragua 8 5 7 7 7 6 40
Brazil 7 5 6 8 7 7 40
Dom Rep 8 5 7 6 6 7 39
Guyana 7 7 7 6 6 5 38
Colombia 7 5 8 6 6 6 38
Ecuador 7 6 6 6 8 5 38
Argentina 8 5 6 6 6 5 36
Potentially relevant LatAm countries for junior mining
Panama 6 5 9 5 7 5 37
Guatemala 6 4 4 4 4 6 28
Countries of little or no interest for junior mining exposure
Bolivia 4 6 2 9 5 8 34
Uruguay 3 4 7 3 6 7 30
Paraguay 6 5 6 3 3 6 29
Honduras 7 3 4 4 3 3 24
Costa Rica 1 1 5 1 6 7 21
Haiti 6 3 4 1 3 4 21
El Salvador 1 1 4 1 6 4 17
Venezuela 3 5 1 3 1 2 15
source: The IKN Weekly house estimates
Overall another 2 points dropped from the aggregate (667 from 669). Now for noted on a
selection of the country names (reducing the content this quarter a bit).
Chile: Geopolitical optics down 1
The La Escondida strike is over, but it’s brought another set of world financial eyes to bear on
Chile and see how powerful the country’s union lobby can be and that’s a classic turn-off for
FDI. It’s not that the mining companies, BHP et al, don’t have cash to distribute to their
workforce at these big and constantly profitable copper operations, it’s that the way the cost of
doing business in Chile compared to peer countries (start with Peru) spirals and makes the next
round of investment decisions go against the world’s biggest copper producer. Chile has a lot of
advantages but there’s no doubting the relatively high cost of operation there, last quarter’s
saga with the company failing to break union resolve showed that clearly and the result only
16

,
booted the issue into the future. We’ll go through the whole thing again in 2017 (by which time
the unions will be hoping that copper prices are high enough to push through a better deal).
Peru: Geopolitical optics down 1
Once again it’s not an easy call with the rise of El Niño weather crises, with roads blocked and
deaths from flooding, looking worse than it is for the mining industry. This was highlighted in a
recent speech by new Buenaventura CEO Victor Gobitz (12) who noted that industrial
infrastructure hasn’t been badly affected by the storms and flooding. In his words (translated),
“The problem is the roadways. If the coastal weather phenomenon ends in the next two or
three weeks, mining production in Peru shouldn’t suffer in significant levels”. The big mining
operations are either still shipping or they have storage space on site for concentrates so
assuming roads get unblocked, the catch-up will be quick (though FOB numbers may be light
for Q1 and rebound in Q2).
But in the end I’m docking a point from Peru’s geopolitical optics score for the semi-negative of
the weather added to the semi-negative of its involvement in the Odebrecht Java Jato
corruption crisis. That too is now past its peak of screaming headlines (and companies in the
centre of the storm such as Graña y Montero are bouncing back, see below) but it does the
country no god to see arrest warrants issued for ex-Presidents and committee inquiries leading
to arrests of ex-functionaries.
Mexico: Internal National Political Stability up 1 point
For the second report running, Mexico gets a point added to its political stability score and I
even considered adding another point this quarter, but that might be too much too soon. Yo
the surprise of some, Mexico has actually benefitted politically from all the Build The Wall
nonsense as a country, it’s found a patriotic rallying point and President Peña Nieto (after
making a mess of the issue in 2016) has been quick to seek and gain political capital from it. At
the same time, the whole “USA renegotiates NAFTA” issue has lost momentum and seems to be
getting the ignore button from Trump as his new admin has bigger problems to work through
(healthcare, tax reform, another round of golf, early morning Twitter urges) which can only
help the nation.
In mining, Mexico’s parliament is slowly but surely working the bill through its halls that would
cut the extra royalty taxes from their burdens, there’s will to get it finished too.
Brazil: Geopolitical optics up 1 point
Another country past the worst. Michel Temer’s clumsy sexism aside, the country is getting
back on track after its dip into recession and the mega-scandal of Lava Jato have both largely
washed through. GDP is ticking back up (they’re now talking +6% for the next 12 months) and
inflation is ticking down (SELIC ratcheting down) which all points in one place, that LatAm’s
biggest economy is getting back on track. As for our focus sector, we’ve seen Belo Sun’s
(BSX.to) Volta Grande project get its permits awarded, a decision followed almost immediately
by a court injunction. Symptomatic of the way it is in the country’s bureaucratic minefield for
miners. Next on the agenda is Trek Mining as it starts its promotional campaign on Aurizona,
the mine folded into this new vehicle from Luna Gold. Here’s hoping Sandstorm takes
advantage of the liquidity window the pump will provide and dumps as much of its shares in
TREK as possible before the magic Vancouver angel dust wears off.
Colombia: Unchanged
Tough call. The Tolima vote against AngloGold Ashanti looks bad, as does the El Niño flooding
that hit the South of the country this weekend, havoc and death in its wake. But nothing has
really changed in Colombia due to that local referendum (aside from a specific anti-mining
population now having an official piece of paper to back up their position) and the South has no
mining of note anyway. The FARC demob is going according to plan, with the final laying down
of arms complete, the country has had its share of Odebrecht bribery scandals too. But nothing
to really upset the economy and certainly nothing on mining. As for our sector, that should get
a boost when Red Eagle goes commercial at some time next week.
17

,
Ecuador: Mining Culture up 1 point
The big change of this quarter. It’s a bit of a risk to do it on the very day of the election that
decides the next President of the country, but even if Guillermo Lasso gets the win against
government candidate and favourite Lenin Moreno, there will only be certain projects at high
altitudes affected directly (e.g. Loma Larga) and in the end, the country would have a right
wing pro-biz leader. So the decision has been made to move Ecuador up from a “potentially
interesting” and to a covered country for mining in LatAm.
The optics for mining in Ecuador have improved significantly over the last twelve months, both
in style and substance. Yes there is opposition and there will always be specific project up
against strong local opposition, but in that the country really isn’t much different from Peru, a
“miner-friendly” if ever there were one. Meanwhile the Lundin Gold (LUG.to) Fruta del Norte
project moves forward and even though it’s not my idea of a share to buy (cost overruns are
now looking very likely) once it’s a mine in operation it will give Ecuador the political big win it’s
been looking for over the years. And FDN will happen, be in no doubt. Meanwhile Cascabel has
caught the attention of country and the world and Ecuador has another big an exciting project
in the capitalist sphere to boast about, not just A.N. Other Chinese project that provides no
access to free market dollars.
If Moreno wins this evening, Ecuador’s mining industry will get a boost and a sigh of relief from
MacGibbon. If Lasso wins the good projects will still move ahead. It’s time to take Ecuador
serious as a jurisdiction but as always, micro-regional attitudes are vital so you can’t just wade
into the place because the national government has given the green light.
Argentina: FDI friendly down 1 point.
The Macri government is now on the full charm offensive, trying to convince the world that
Argentina has turned the corner and its macro datasets are improving (GDP, inflation etc). It
may come too late to help its chances in the 2017 mid-term elections (we’ve talked about these
in detail over the weeks of 2017) and with news out of Buenos Aires in the week ahead set to
be dominated by the national strike and mass protest march on Thursday, the voices of
opposition to the new economic model are growing louder.
In mining, the quarter’s newsflow was epitomized by the failure of Mining Secretary Daniel
Meilan’s Federal Mining Agreement plan, now quietly dropped as the national government
cannot get the provincial governments on the same page. As always, we’re back at the regional
level for approval of projects, the nation is impotent against the country’s constitutional set-up
(and if that reminds you of Trump’s immigration plans and blocks I’m not that surprised).
Potentially relevant countries
Guatemala: Mining Culture down 1 point
The news during Q1 that Tahoe Resources (TAHO) (TGO.to) will have to defend itself in the
civil action brought against it by local residents in a Canadian court of law, rather than the case
being heard only in Guatemala can only bring negative optics for that company and the
country’s mining industry. The other news is that Goldcorp (GG) has pulled out of the country
by selling its Cerro Blanco project to a small junior. With Marlin now at the end of its life, GG’s
exit speaks volumes for the rick of doing business there.
Other
Paraguay gets two points docked because they’re doing silly things like setting fire to the
parliament building and shooting protesters. Par for the course.
Venezuela has taken another step down its road to total madness, but the Regional Risk score
hasn’t changed because it’s difficult to get it down much lower. I’ve been asked about the
potential of buying Venezuela exposed juniors on the back of the dissolving and reinstatement
of parliament soap opera last week, you may remember I floated the idea of Valgold (VAL.v)
18

,
as a way of playing mining concession land in Venezuela during 2016. The answer there is “not
yet”, in the case of this country the “buy when there’s blood in the streets” rule applies and
we’re not there. Yet.
Market Watching
Red Eagle (R.to): Added to the position, plus the 4q16 numbers
Two things to do here and I’m going to try and be as succinct as possible on both parts. On
Thursday morning I sent out that Flash update to say I’m adding to my position in Red Eagle
(R.to) (see Appendix 1). Then on Friday after dark, R.to posted its 2016 4q16 and year-end
numbers to SEDAR. The following considers both events.
The decision to add to my R.to holding: The rationale here is pretty straightforward:
1) I expect a NR out of Red Eagle this week coming to announce commercial production
starting 2q17.
2) This should settle the nerves of the market and allay most, if not all, of the false
rumours swirling around the marketplace about this stock and company.
3) As R.to was trading at what I consider to be a highly discounted 70c and 71c Thursday
morning, it was good opportunity for a trade with a short timeline before resolution and
the next NR.
4) Therefore reward outweighed risk at the time and I pulled the trigger.
The obvious risk to my trade is that R.to doesn’t go commercial and needs more time. I think
the chances of that happening are low. Meanwhile, in the event of the expected re-rating next
week I’m going to reserve the right to flip out some (or even all) of the share I bought last
week and take quick profits on that slice, leaving the core holding for the longer term. If I do
so, my cost average will return to 72c.
The 4q16 financials (all results in Canadian dollars, the reporting currency of R.to, unless
otherwise stated): Late Friday (8:39pm in fact) R.to posted its numbers to SEDAR, which means
we’re going to get a fanfare NR on the results early tomorrow morning (along with that
commercial production call?). Though it sounds a little weird, these 4q16 financials are not that
important to the whole Red Eagle buy thesis and story because for this investment we’re buying
into a company that’s at the big turning point, a developer that becomes a producer and at this
crux a lot of changes show up in financials. As these numbers are by definition backward-
looking, it’s tough to read too much into the financial health (or otherwise) of R.to, for that
we’re going to need the 1q17 and 2q17 results at least, but we can at least adjust the model to
see how the corporate plan (collect underpants/?????/profit!) is taking shape and for that, the
balance sheet items are the place to be.
Assets look like this and unsurprisingly, in this last stage of the San Ramon build-out R.to has
been busy turning current assets into fixed assets.
R.to: Assets
You’ll also see the updated forecasts (aka guesses) 220
for the next two quarters, with the only big 200
180
difference between these numbers and the last time 160
we looked being the $17m in cash added to the pile 140
120
via the placement that closed in February. 100
80
60
As for liabilities, as expected we hit the peak of the
40
money owed as at end 4q16 (or at least I think so). 20
0
However there is a significant difference between
these results and the ones I’d previously modelled,
as around $20m in debt has mvoed from the long-
term to the current liabilities (it’s my error and
nothing odd at the R.to end, I didn’t see the date coming round and made a basic mistake).
19
41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1 tse71q2
C$m
fixed
other current
cash & eq
source: R.to filings

,
R.to: Liabilities Breakdown per qtr
140
120
100
80
60
40
20
0
20
41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1 tse71q2
C$m
LT liab
current liab
source: company filings
What that means is that the company working capital (below left), previously projected at
negative $13m in my previous model, comes in at a scary looking negative $34.473m. However,
the placement cash is bound to improve that number in 1q17’s results and with pre-production
cash flow from the gold ounces produced in the previous quarter plus the advent of commercial
production in this one, the model still points us to positive working cap by the end of June. Also
importantly, general liquidity (below right) which measure using the reasonable yardstick of
treasury cash maintains just fine in this critical period (thanks to that raising)
20 R.to: Working Capital per qtr
15
10
5
0
-5
-10
-15 -20
-25
-30
-35
-40
Finally, shares out at 241.005m were almost exactly on the button, a few extra exercised
options making the difference. The 23m shares added from the placement that closed February
means the total is now at around 264m and I’m
still expecting R.to to go back to market in
either Q2 or Q3 and sell more, raise capital and
pay down debt. It’s by definition a guess, but
put me down for another 21m shares sold that
will get the count up to 285m.
And that’ll do for this quick round-up. The end
2016 quarter isn’t a biggie in the story of Red
Eagle, what matters is seeing it get into gear
and go free cash flow positive as from this
current 2q17 quarter. At that point I’m looking
for the debt pile to come under control and
that’s when this story should move into its next level, which also implies moving through the
gears pricewise and becoming a stock with a CAD$1 handle.
Bottom line: numbers in the past just fine, we now look to news in the next five days on the
mine and its production schedule.
41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1 tse71q2
source company filings
srallod
fo
snoillim
R.to: Cash treasury per qtr 40
35
30
25
20
15
10
5
0
41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1 tse71q2
source: company filings/IKN ests
srallod
fo
snoillim
R.to: Shares Out
350
300
250
200
150
100
50
0
31q4 41q1 41q2 41q3 41q4 51q1 51q2 51q3 51q4 61q1 61q2 61q3 61q4 tse71q1 tse71q2 tse71q3 tse71q4
source: company filings
serahs
fo
snoillim

,
DRG Global (DRG.ax) redux: A tax matter
Further to the trade suggestion of DRG Global (DRG.ax) last week that laid out its apparent
compelling value compared to its investment holdings, including the big share stake it has in
Cascabel hotpot stock SolGold (SOLG.L), three reader wrote in with the same observation about
the apparent discount; it looks like a tax thing. Two of the three mails sent in so kindly went
into some detail about the possible tax deduction of the equity, but rather than quote those I’m
going to take the absolute liberty of sharing with you the words of reader JS, who sent in five
accurate lines with the overview concept:
The DRG portfolio gain is huge, but it looks to me like the company will pay
Australian tax if/when it realizes a gain from its Solgold holding. So the gain
may need to be discounted by 30% for this future liability. A portion of that
liability will be offset by a tax loss carry-forward. I am not experienced in
Australian capital gains tax issues, but it seems like DRG may be a bit less
cheap and more complicated than the story that was given to you.
So that may well explain the differences here. For the record, I’m a dummy about Australian tax
rules, too.
Graña y Montero (GRAM) follow-up
A quick line or three on last week’s non-mining trade idea (though I stress it was not a reco,
merely a heads-up and a prompt for further DD) of Graña y Montero (GRAM), the Peruvian
construction and civil works company that was showing signs of being able to reverse its
waterfall sell-off in 1q17. Indeed it was the case and also right on schedule came the news (13)
of the new board of directors, with seven new
names taking seats (all Peru business stalwart
names that went down well locally). This five
day chart of GRAM shows the approx 19% move
last week (from U$2.54 to U$3.13 Friday close).
If the rebound really sets in, there’s still more
upside left in the tank here. As you may recall
from last week’s note, before GRAM’s problems
with Odebrecht and the corruption scandal came
to light, it was an U$8 stock. However, the other
side of the coin includes two recently opened
main class action suits against the company and
many side-feeding legal ambulance-chasers in
the USA trying to get their bit of the action, too. Returning to that $8 figure may take a while.
Conclusion
IKN411 is done, we end with bullet points:
• Rye Patch Gold (RPM.v) gave us good news last week and reason to hold through on
what’s been a disappointing trade so far. But it’s not totally out of the woods yet and if
they decide to run a financing, I’m out of there.
• Next week is set to be a big week for Red Eagle (R.to). We might not get the
commercial production tomorrow Monday, as it takes a couple of days to collate
information from a working mine. But we should expect something this week and I’ve
made my bet on the stock re-rating once the news is out and people see this operation
has suffered from false rumours. Numbers beat BS every time.
• Last week Goldcorp (GG) offered us another example of the mediocre business acumen
in this sector. A silly deal on a project zone that’s been a money pit for two decades, is
21

,
there no escape from the “reserve ounces” mindset?
I thank you in advance for any feedback. Our Top Pick stocks are Regulus Resources (REG.v)
and B2Gold (BTG) (BTO.to). Flash updates will be sent if required by events.
I wish you good trading fortune, ladies and gentlemen. Namaste.
Mark
Footnotes, appendices, references, disclaimer
(1) http://ryepatchgold.com/rye-patch-receives-state-approval-to-irrigate-new-pad/
(2) http://ryepatchgold.com/wp-content/uploads/2017/03/Rye-Patch-Presentation-March-2017-1.pdf
(3) https://www.juniorminingnetwork.com/junior-miner-news/press-releases/360-tsx-venture/rpm/30797-rye-patch-gold-
receives-state-approval-to-irrigate-new-pad.html
(4) http://incakolanews.blogspot.pe/2017/04/regarding-tinka-resources-tkv-trading.html
(5) http://www.marketwired.com/press-release/atico-announces-changes-in-the-board-of-directors-tsx-venture-aty-
2205626.htm
(6) http://uk.reuters.com/article/peru-copper-strike-idUKL2N1H71BO
(7) http://www.reuters.com/article/global-metals-idUSL3N1H834W
(8) http://incakolanews.blogspot.pe/2017/03/goldcrp-gg-bets-on-chile.html
(9) http://incakolanews.blogspot.pe/2009/02/all-gold-resource-ounces-are-not-same.html
(10) http://incakolanews.blogspot.pe/2011/07/cerro-casale-capex-estimate-goes-up.html
(11) http://incakolanews.blogspot.pe/2013/07/so-im-sitting-here-thinking-about.html
(12) http://elcomercio.pe/economia/peru/ejecutivos-ceo-forums-hoy-lo-que-hay-que-hacer-ayudar-noticia-
1979583?flsm=1
(13) http://finance.yahoo.com/news/gra-y-montero-announced-backlog-001500590.html
Apprendix 1: Flash update dated Thursday March 30th
Good Thursday morning, just before 11am local time, cloudy and grey once again in a world suffering from El Niño.
Adding to Red Eagle Mining (R.to)
A very quick note. As we can fully expect company to declare commercial production in the next few days, as we can
expect a significant re-rating from that news which will calm the market nerves around the stock, and as the current
price allows me to average down slightly, I am adding to my Red Eagle Mining (R.to) position today.
That's all. Have a good Thursday. Best, Mark
Stocks To Follow Closed Positions 2016
Closed in 2016 closed close price
Phoscan Chem FOS.to jan16 C$0.28 29-mar-15 C$0.265 -5.4% Buyout trade, bot but poor deal
True Gold TGM.v jan16 C$0.18 23-ago-15 C$0.25 38.9% okay trade, sold on pol risk
McEwen Mining MUX jan16 U$1.09 25-ene-15 U$1.20 10.1% sold due to lack of value
Lake Shore Gold LSG.to feb-16 C$1.10 07-abr-15 C$1.69 53.6% bot out, sold early in process
Atacama Pacific ATM.v feb-16 C$0.19 26-abr-15 C$0.40 110.5% sold for a double on big pop
New Gold NGD feb-16 U$2.06 24-ene-16 U$2.96 43.7% closed good near-term trade
Sandspring Res SSP.v mar-16 C$0.195 18-oct-15 C$0.32 64.1% Hit tgt, took profit
Teranga Gold TGZ.to mar-16 C$0.54 15-feb-15 C$0.60 11.1% disappointing trade
B2Gold BTG mar-16 U$0.85 13-ene-16 U$1.30 52.9% Separate trade on B2, hit tgt
Dalradian Res DNA.to mar-16 C$0.67 27-oct-13 C$1.00 49.3% Hit target, sold, good win
HudBay Min. HBM may-16 U$4.10 03-abr-16 U$4.36 -6.3% Short trade, poor timing
Nevada Sunrise NEV.v may-16 C$0.185 28-feb-16 C$0.23 24.3% V. small, no big deal either way
22

,
Richmont RIC jun-16 U$7.60 01-may-16 U$9.30 22.4% near-term trade, profit taken
INV Metals INV.to jul-16 C$0.25 03-abr-16 C$0.95 280.0% Trade closed on time
HudBay Min. HBM aug16 U$4.98 09-jun-16 U$4.80 3.6% short trade covered, no big deal
Miranda Gold MAD.v oct-16 C$0.125 03-jul-16 C$0.10 -20.0% tiny spec trade, didn't work
Avino G & S ASM nov-16 U$2.00 21-oct-16 U$1.40 -30.0% Abandon trade on bad bot deal
Stocks To Follow Closed Positions 2015
Closed in 2015 closed close price
Argonaut Gold AR.to jan'15 C$1.47 14-dec-14 C$2.53 72.1% Big gain small time, profit taken
Amerigo Res ARG.to jan'15 C$0.405 20-jul-14 C$0.285 -29.6% Given up on weak Cu prices
Reservoir Min. RMC.v jan'15 C$6.05 18-jun-14 C$4.12 -31.9% sold on Cu downturn
Coro Mining COP.to jan'15 C$0.075 26-jan-14 C$0.035 -53.3% sm, sold on Cu downturn
Fortuna Silver FSM mar'15 U$4.12 10-nov-14 U$3.75 9.0% Short used as hedge
GoldQuest Min. GQC.v mar'15 C$0.26 27-oct-13 C$0.085 -67.3% given up ghost
Rio Alto Mining RIO.to apr'15 C$2.30 07-apr-11 C$3.57 55.2% Top pick, bot out, big win
Timmins Gold TGD jun'15 U$0.60 19-apr-15 U$0.62 3.3% near-term trade, out of time
First Majestic AG jul'15 U$10.51 10-aug-14 U$4.55 56.7% horrible failed trade
NovaCopper NCQ.to jul'15 C$1.05 09-apr-14 C$0.50 -52.4% no more Cu exposure, sm sell
McEwen Mining MUX aug'15 U$0.695 21-jul-15 U$0.92 32.4% Closed nearterm flip for win
Midas Gold MAX.to sep'15 C$0.39 21-sep-15 C$0.35 -10.3% Sm. trade idea that didn't work
New Gold NGD oct'15 U$2.18 23-aug-15 U$3.05 39.9% trade closed, profit taken
Legend Gold LGN.v nov'15 C$0.085 01-mar-15 C$0.035 -58.8% tiny "land grab" idea, failed
Timmins Gold TGD nov'15 U$0.245 20-sep-15 U$0.15 -38.8% small near-term loser
Stocks To Follow Closed Positions 2014
Closed in 2014 closed close price
Fortuna Silver FVI.to jan'14 C$2.80 23-dec-13 C$3.19 13.9% small ST trade closed
Rio Alto Mining RIO.to jan'14 C$2.06 07-jun-13 C$2.30 11.7% trading position finally closed
Network Expl. NET.v feb'14 C$0.01 22-jul-12 C$0.005 -50.0% position closed, did nothing
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
23

,
Duran Ventures DRV.v jun'13 C$0.045 10-may-13 C$0.025 -44.4% ST trade never worked
Plata Latina PLA.v jun'13 C$0.79 10-apr-12 C$0.13 -83.5% closed
Bellhaven BHV.v jun'13 C$0.065 03-jun-13 C$0.12 84.6% closed ST trade
B2Gold BTO.to aug'13 C$3.07 28-nov-12 C$3.44 12.1% sold 1/2 to raise cash
Colossus Min. CSI.to aug'13 C$0.72 24-jul-13 C$0.79 9.7% closed thru nerves on future
Pretium Res PVG.to aug'13 C$8.20 11-jun-13 C$10.14 23.7% closed to raise cash
Bear Creek BCM.v sep'13 C$2.06 30-may-13 C$2.20 6.8% sold on pol risk decision
MAG Silver MVG oct'13 U$7.00 12-sep-13 U$5.62 19.6% near-term short
Gold Res Corp GORO oct'13 U$9.52 03-may-13 U$4.98 47.7% short tgt made, covered
AQM Copper AQM.v oct'13 C$0.31 16-oct-11 C$0.125 -59.7% closed failed trade
First Majestic AG nov'13 U$11.51 07-nov-13 U$10.50 8.8% v near term short, closed
Fortuna Silver FSM nov'13 U$4.00 07-nov-13 U$3.68 8.0% v near term short, closed
Primero PPP nov'13 U$5.70 07-nov-13 U$5.75 -0.9% v near term short, closed
Starcore Intl SAM.to nov'13 C$0.235 08-sep-13 C$0.17 -27.7% ST trade didn't work, sm loss
B2Gold BTO.to dec'13 C$2.22 28-nov-12 C$2.16 -2.7% closed ST trade to raise cash
Stocks To Follow Closed Positions, 2012
Closed in 2012 closed close PPS
Soltoro SOL.v jan'12 C$0.87 07-nov-11 C$0.94 8.0% cash moved to BCM.v
Gold-Ore Res GOZ.to feb'12 C$0.84 13-oct-10 C$0.98 16.7% trade closed on ELG.v offer
Minefinders MFN feb'12 U$11.68 17-nov-11 U$14.80 26.7% target made, trade closed
Iron Creek IRN.v mar'12 C$0.58 26-sep-10 C$0.31 -46.6% time up on small bad trade
U.S. Silver USA.to apr'12 C$2.18 15-mar-12 C$1.86 -14.7% ST trade no good, cut loss
Augusta Res. AZC.to may'12 C$3.10 29-jan-12 C$2.07 -33.2% bad mkt, bad trade cut loss
Bellhaven BHV.v may'12 C$0.50 22-sep-10 C$0.28 -44.0% new mgmt not impressive
Zincore Metals ZNC.to may'12 C$0.325 29-jul-11 C$0.17 -47.7% bad mkt, bad trade cut loss
Soltoro SOL.v may'12 C$0.70 18-mar-11 C$0.41 -41.4% bad mkt, bad trade cut loss
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% fail ST trade close pre split
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
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,
Regulus Res. REG.v dec'11 C$1.17 14-aug-11 C$0.52 -55.6% cut on news of poor 43-101
2009 and 2010 closed positions in appendices below
Stocks To Follow Closed Positions, 2010
Closed in 2010 closed close PPS
B2Gold Corp BTO.to Jan'10 C$0.88 08-nov-09 C$1.49 68.2% target made, trade closed
Radius Gold RDU.v Jan'10 C$0.18 23-aug-09 C$0.40 122.2% target made, trade closed
MAG Silver MVG mar'10 U$5.60 23-nov-09 U$7.28 30.0% closed in pdac week
Riverside Res RRI.v mar'10 C$0.435 20-sep-09 C$0.60 37.9% closed in pdac week
Amarillo Gold AGC.v mar'10 C$0.81 31-may-09 C$0.70 -13.6% closed in pdac week
B2Gold Corp BTO.to apr'10 C$1.24 18-feb-10 C$1.50 21.0% target made, trade closed
Lumina Copper LCC.v apr'10 C$0.84 14-jun-09 C$1.55 51.2% total position now sold
Troy Resources TRY.to may'10 C$1.10 03-may-09 C$2.25 104.5% sold on negative results
AuEx Ventures XAU.to may'10 C$2.51 24-may-09 C$3.38 34.7% trade closed
Nevada Copper NCU.to jun'10 C$3.27 14-mar-10 C$2.03 -37.9% need to lower Cu exposure
Carpathian Gold CPN.to jun'10 C$0.39 14-mar-10 C$0.35 -10.3% too exposed to cap raising
Amerix PM Corp APM.v jun'10 C$0.065 08-nov-09 C$0.05 -23.1% victim of macro bear
Antares Minerals ANM.v jun'10 C$1.42 06-dec-09 C$2.10 47.9% sold half
Vena Resources VEM.to jun'10 C$0.37 31-may-09 C$0.23 -37.8% sold half
Minera Andes MAI.to sep'10 C$0.75 28-jul-10 C$0.95 26.7% ST trade closed
Gold-Ore Res GOZ.to sep'10 C$0.52 01-aug-10 C$0.75 44.2% target made, trade closed
B2Gold Corp BTO.to sep'10 C$1.45 25-may-10 C$2.01 34.5% target made, trade closed
Blue Sky Uran BSK.v oct'10 C$0.41 19-may-10 C$0.22 -46.3% v small v bad trade closed
Dia Bras Expl DIB.v oct'10 C$0.14 30-aug-09 C$0.35 150.0% target made, trade closed
S. Amer. Silver SAC.to nov'10 C$1.38 24-oct-10 C$1.60 -15.9% loss on short, small fail
Ventana Gold VEN.to nov'10 C$7.92 27-jun-10 C$13.51 70.6% trade closed on buyout
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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