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7/22/13

IKN urges you to read this article on Rio Alto Mining (RIO.to) (RIOM) at Sinking Alpha


So what can be said about it? Well, apart from the incorrect assumptions about mine life (oxide to run out in three years, you say?), costs currently being run by the company (not FCF+ at $1.3k/oz Au, you say?), costs of operation for the stage 2 sulphide ops (not profitable at $3.15/lb you say?) confusing the political risk of La Libertad with South side Puno (oh gosh, where shall we start with this one?....hmmm, how about "learn Spanish then read some books") it's really not bad at all. Which basically means he got the stage 2 capex ticket price right. Well done, sir.

Seriously, go read the note because counterparties are vital in this market. You may even agree with him so if you do, you may want to consider shorting RIO.to before the 2q13 financials are published. What with it being overvalued and unprofitable and all that. And oh yeah, just remembered, there is one more thing to say about that Sinking Alpha report which is that it cost you nothing to read it. Priced to perfection, I'd safely say.

Disclosure: Long RIO.to.