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2/13/16

Oh goody, we mortals get to ask Rick Rule some questions

Yesterday evening your humble scribe received a mailer from Sprott Global entitled "Optionality: Rick Rule answers your questions and tells listeners what he's doing with his own money". It included this paragraph.
"Next week, Rick Rule will be recording a call to let listeners know what he is doing with his own money and to answer your calls on optionality.  Please submit your questions either to your Sprott Global financial advisor or to contact@sprottglobal.com by Thursday February 18th."

And to that IKN says, vote early and often! Here are this house's two suggestions:

1) Despite being two plays that have been recently and deliberately set up for the same "optionality" play, you refuse to invest in or back Keith Neumeyer's First Mining Finance (FF.v) or that Dundee-backed Oban Mining (OBM.to). Isn't this hypocritical?

2) Admit it Rule, "optionality" is just a fancy phrase for the age-old Greater Fool theory isn't it? None of the horsecrap assets in this sub-set will ever become mines, you just want to be in early and sell a dream. Even if it works, nothing happens here except a transfer of wealth from a sucker's pocket into yours.


2/12/16

How to keep your copper mine cash costs low: Nevsun (NSU.to) knows how

Be proud Canada, be so very proud. You are the leading edge of capitalism.

A Vancouver-based mining company that struck gold in the small North African country of Eritrea is being accused in a B.C. lawsuit of permitting forced labour to be used in the construction of its mine.
The allegations filed by three former Eritrean conscripts in B.C.'s Supreme Court accuse Nevsun Resources of being "an accomplice to the use of forced labour, crimes against humanity and other human rights abuses at the Bisha mine."

Full story here.

The Friday OT: Carole King; It's too late

The original studio version, from the 1971 album Tapestry:



Argentina: Export duties on mining eliminated

It's been considered a certainty for a while, today President Macri made it official. He flew to San Juan province and made the formal announcement that export duties on mining produce from Argentina is now eliminated. Spanish language link with pretty photo here.

The First Mining Finance (FF.v) business model

I have paper.
You have shit.
Let's do a deal.
I'll give you my paper.
You give me your shit.

FF.v dilutes the only decent asset on its books even further (ex-Coastal Gold) with another laughable deal. Clifton Star (CFO.v), dog among dogs, moves into the stable of crud in exchange for 48m shares and will now be marketed as "Osisko will pick it up from us, just you watch". 

In the meantime, FF.v will boast how much its market cap has grown (no matter the stock has been diluted to kingdom come). Take it away, lovable parrot.



I'm amazed people fall for this outright scam.

PS: Truth is I'm not amazed. After all this is the precious metals mining Utopian dreamworld, where the naive have handed over their cash to the unscrupulous since at least the time of the California 1849 gold rush. The pattern shows no signs of stopping.

A Flash update...

...has just been sent to subscribers, Friday morning a few minutes after the opening bell. Taking profits on one.

Updating Canaccord's shark-jump call on HudBay

Back on January 20th we had a good old guffaw at the Can of Corn's pathetic attempt to pump on one of its major bagholder positions, HudBay (HBM). Anyone who can run a spreadsheet knows that Garofalo is bailing on HBM at the right time and the spectre of Chapter 11 is looming on the company and its everso everso clever idea of growth thru debt (i.e. it spent U$1.9Bn to build Constancia alone, it's now a U$4.12m market cap...where's all da munneh gone David?), but that's not going to stop a shameless band of whores such as the sellside anal yst community from trying to hoodwink its own clientele. 

Which is why we were told to buy HBM by Can of Corn last month, because when a dam that isn't going to collapse collapses it'll be really cool. Or something. Because science.

Anyway, here's how HBM has got on since then, compared to the copper producer ETF CPX as a benchmark:



We see that with the copper metal market price finally finding a (temporary?) floor, the stocks managed to level out too and they even managed a small rally when copper popped to U$2.15/lb or so (it's now back at U$2.03/lb). But in a shocking development HBM has underperformed its peers. 

Hey Canaccord, isn't it strange how people think financial debt bankruptcy risk is bigger than dam collapse risk?

Chart of the day is...

...the gold/oil ratio:



I don't have a clue what this means for next week, or month, or anything. It's just one helluva visual.