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1/31/15

The World Complex does the gold/copper ratio

Yesterday morning your humble scribe floated an idea that has the charty brigade up in arms; that the ratio between gold and copper can stay where it is now, even after a very big hike in the last few weeks.

Today, Mickeyman over at The World Complex picks up on the idea and runs with it using his elegant, weird and wonderful phase space charts and explanations. He basically agrees. 

In blogworld they say that you haven't arrived...

...until some twentysomething wannabe hack at The Huffington Post has taken one of your blog posts, re-worked it and published it under their own name. If so, then apparently IKN has arrived. After all these years, too.



1/30/15

The Friday OT: Radiohead; How to disappear completely

Live version, on the Jools Holland show:



Brilliant live band.



Endeavour Silver (EDR.to) (EXK): There's no point

I really don't see the point in owning this. Endeavour Silver (EDR.to) (EXK) announced its new reserves/resource estimates plus its 2015 guidance in this NR yesterday, which (unusually) came with a ConfCall (listen to it here) and after doing all the number thing and listening carefully to the company's arguments (twice, replay this morning) I'm left with the impression that the only people who can benefit from the existence of EDR are the people who work there.

Now that's not such a bad thing (aside from the overstuffed paypackets of Brad Cooke and the assembled directors) as I'm all for providing gainful employment to Latin Americans. But why should a shareholder own a company that bases its reserves/resources on $18/oz silver and $1,260/oz gold when it's already shown that it can't make a profit on those numbers? I mean, it may see cost reductions in the pipeline but the hard fact is that in 3q14, when its realized price for both metals was higher than that (U$18.78/oz Ag and U$1,278/oz Au) it returned an operating loss of $3.6m and a net loss of $11.386m for the quarter.

Also, when it comes to the future Brad Cooke told us on the CC that the company "had to crack the nut" on El Cubo and I was "Whaaaaat?", because this is the same nut they promised  to crack in 2013. And 2014. This company is pure jam tomorrow, but when it comes to execution it never lives up to the sweet talk.

Seriously, what's the point in owning a loss-making silver company at the current price deck? In fact, even if it breaks even, even if it runs a modest profit, it still has a crapload of financial debt on its books (oh...they're promising to get that down to $25m by end 2q15...we'll see). And that's the bottom line here; EDR and many other silvercos in Mexico are running to stand still, with all that mining and production and busy ness that shows nothing for shareholders. Nothing at all. 


The latest from Travel Past 50

The website of husband and wife team Kristen Henning and Tom Bartel has been a personal favourite for quite a while but it has to be stated, over the last year or so their work has gone from very good to absolute top class world standard travel journalism. What the thrust behind this quality jump might be I do not know, but these days anything that pops up on my RSS from Travel Past 50 gets immediate eyeballs, the two posts today no exception.

This from Kristen, another report on their recent stay in Florence/Firenze, Italy. Tons of info, plus insight and tips on how to get the best out of your visit there. And the photos.

This from Tom, a post on where they stayed last night, a Bedouin encampment in Wadi Rum, Jordan. The two photos included in this are simply beautiful, even better than Tom's usual high standards (as regulars know, he's serious about his photography).

Those links are there because if you click on them you get to enjoy the contents, too. Make your Friday a more pleasant experience by doing so.

Cochilco's copper price, 2011 to 2016

On the subject, yesterday in Chile we had the presentation of the Cochilco Market Tendencies report, with Cochilco being the world's number one copper producer country's copper beancounter people and the Market Tendencies report their main annual thingy, which invariably comes at the end of January each year. 

Cochilco forecasts copper to sell at an average of $2.85/lb this year, and $2.80/lb in 2016. That first number is down from their previous guess of $3/lb in 2015. Here's a chart with numbers on it:



So even if their guesses for the next two years are correct, which means copper recovers somewhat from its present level, you can easily see the type of price drop faced by the industry in that graphic.

If you'd like your own copy of the 34 page Cochilco report, it's right here. 

Chart of the day is...

...the gold/copper ratio:



A whole range of chartists currently insisting that copper "cannot stay this low" and it's basically because of this chart. Which they did not predict and therefore causes them psychological pain. Because, we're told "this ratio can't stay this way" and "something's got to give" and mutterings of that ilk.

Yes it can stay up there. Copper can sell at $2.50/lb for the rest of the year and gold at $1.3k/oz or so (or copper at $2.30 and gold $1.2k., or $2.70/lb and $1.4k. etc). Forget the stupid squiggly line, tell me why those two components cannot possibly remain steady at their new price brackets.

One thing's for sure; whatever gold and copper do in 2015, it won't be because some randomwalk charty dude who makes a living by selling his snake oil feels the ratio chart is esthetically displeasing.

1/29/15

The whole Clive fisticuffs thing makes the Financial Post

Right here. It also backs up the IKN version of events below, though clearly with slightly different witnesses and their track on the story. We liked...
"You expect that behavior from a bunch of 19-year olds not the CEO of a public company".
...in particular.