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1/10/09

Read to the end. It's LatAm all right

Hat tip to Vivirlatino for reproducing this. Screw the politics, this is just plain common sense. Here's how the speech ends.

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As for everything else, what will happen will happen. The Israeli government will declare that it dealt a severe blow to terrorism, it will hide the magnitude of the massacre from its people, the large weapons manufacturers will have obtained economic support to face the crisis, and "the global public opinion," that malleable entity that is always in fashion, will turn away.

But that's not all. The Palestinian people will also resist and survive and continue struggling and will continue to have sympathy from below for their cause.

And perhaps a boy or girl from Gaza will survive, too. Perhaps they'll grow, and with them, their nerve, indignation, and rage. Perhaps they'll become soldiers or militiamen for one of the groups that struggle in Palestine. Perhaps they'll find themselves in combat with Israel. Perhaps they'll do it firing a gun. Perhaps sacrificing themselves with a belt of dynamite around their waists.

And then, from up there above, they will write about the Palestinians' violent nature and they'll make declarations condemning that violence and they'll get back to discussing if it's zionism or anti-semitism.

And no one will ask who planted that which is being harvested.

For the men, women, children, and elderly of the Zapatista National Liberation Army,

Subcomandante Insurgente Marcos
Mexico, January 4, 2009.

More on Ecuador's anti-mining protests


Here's the link to a good report from Daniel Denvir in Upside Down World that chronicles some of the protests seen in Ecuador this week about the passage of the new mining law.

The report is biased towards the plight of the protestors and that's all right by me, though to its credit does give the other side of the story further down the note. I've mentioned previously that Denvir does a good job reporting on Ecuador and that hasn't changed. Do read for yourself about the reported police repressions that sounds pretty severe and make up your own mind. But most interesting is paragraph five that reports on the CONAIE national executive position. Here's the extract:

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After emergency meetings on January 7, the Confederation of Indigenous Nationalities of Ecuador (CONAIE) called for a national mobilization on January 20, calling the government “dictatorial.” It is unclear whether the January 20 mobilization will spread road blockades to other provinces in central and northern Ecuador. Protesters are demanding a dialogue with central government leaders and for a broad national discussion on mining before any legislation is passed.
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As noted yesterday in this post, CONAIE is a smart, canny intelligent political animal. Note that it calls for its national mobilization on Janaury 20th, by which time the debate would have happened and the mining project voted into law. You telling me that CONAIE didn't know that? Wanna buy that bridge of mine?

This law is going through.

Message to stktrader of Carlsbad, San Diego, USA

Read carefully, both you and the group you belong to.

I get hatemail from time to time, but your version of internet communication is clearly criminal behaviour. Threaten me in the same way again or take even one of the actions you say you'll take and I will publish all your details on the public internet and hand them over to the necessary authorities.

Monterrico Metals: How Peru's Police and British miners use torture to control populations

Richard Ralph. An good example of colonial scum.

In early 2007 Monterrico Metals was taken over by Chinese metals company Zijin Mining Group. I want to say that first and foremost because this story is not about some dastardley story of Chinese suppression. In fact the Chinese of Zijin are fair corporate citizens that have suffered under the weight of the previous owners of Monterrico, the British. It's also the story of how the Peruvian government betrays and lies to its own people in order to continue with its "growth at all costs" policies.

"The Brits, Otto?", I hear you asking. Yep, the Brits. To prove that the British aren't all the sporting fair play they're cracked up to be, here comes a report on how they, along with Peru's loving and caring National Police in cahoots with the Mining Ministry, treated Peruvian locals who protested against their mining development of Majaz (now re-named Rio Blanco) in 2005. These Brits also include the then British Ambassador to Peru, an ungodly shit named Richard Ralph who was later caught insider-trading Monterrico stock in 2007 and fined £117,691. In the press release about the insider deals there is this passage about Ralph;

"The fact that a British Ambassador working in Peru finishes by being a high executive in a mining company and using all his contacts demonstrates the low moral character of these people and is evidence as to how this type of company is managed."

Indeed. So on to the main story. In August 2005, a group of locals claimed that they had been victims of violence and torture when they staged a pacific protest at the British-owned Monterrico's project at Majaz. The company has always denied these claims, even when independent doctors reported in June 2008 that the locals were telling the truth and had clearly been tortured. But yesterday, January 9th 2009, a development occurred. The National Coordinator of Human Rights in Peru (serious people) published photos obtained of the illegal detention and torture of the group of indigenous. Below find the whole story (translated by me) and photos of what happened that look like something out of an improvised Guantanamo.

So read on, people. Remember that since being taken over by the Chinese, Monterrico has basically been a good corporate citizen in Peru. What you're going to read is how a British mining company that includes a crooked ambassador to the country in question enjoys treating their South American hosts. And remember the whole trap was set up by the Peruvian Ministry of Energy and Mines that lied about a high level commission being set up for the locals and then set their police force attack dogs on the group.

Viva investment grade. Viva, viva, viva.

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Since 2003 the mining company Majaz, today named Rio Blanco, operated in an irregular manner in the territory of the rural communities Segunda y Cajas and Yanta, in the northern frontier of Peru. The presence of the mining company is irregular as it did not have the consent of the two thirds majority of communal assembly as required by the law 26505, as noted by the People's Defence ombudsman (report 001-2006/ASPMA-MA). For two years the communities affected tried to use channels of dialogue with the State to demand the respect of their territorial rights, without any success.

At the end of July 2005 the communities began a peaceful march towards the mining camp where, according to an offer from the Ministry of Energy and Mines, they were to meet with a high level multisectoral commission. The communities have noted on many occasions that it was a very difficult march, because it implied walking for several days through dense vegetation in extreme climatic conditions.

On arriving at the mining camp on August 1st 2005, the group was not received by the anticipated commission for dialogue, but instead a large police contingent that brutally repressed them, throwing tear gas canisters from helicopters and firing live rounds at the people, even when they were fleeing.

Under these circumstances 29 people, including two women and the journalist Julio Vázquez Calle, were apprehended and taken inside the mining camp. They were held there for three days and were submitted to various forms of psychological and physical torture. As well as being savagely beaten, in those three days they were kept blindfolded by bags sprinkled with tear-inducing powder and with their eyes bandaged. They were also deprived of warm clothing despite the low temperatures.

According to the testimonies of the group, from time to time a toxic powder was put on their faces under the bags and bandages that made them vomit and did not let them breathe properly. The women were subjected to diverse sexual assaults. Also, they were all inflicted with diverse verbal humiliations and threats.

In October 2007 the US institute 'Physicians For Human Rights' (recipients of the 1997 Nobel Peace Prize) performed examinations on eight of the tortured people and confirmed the abuses they had suffered during their illegal detention.

The responsibles
The responsibility for these occurances lies with various members of the Peruvian National Police Force that directly participated in the illegal actions and also the security personnel of the company Minera Majaz that directly intervened in the occurances. The tortures happened in the interior of the mining camp.

The denouncement
In July 2008 the National Coordinator of Human Rights in Peru (Coordinadora Nacional de Derechos Humanos (CNDDHH)) and the Ecumenic Foundation for Development and Peace (Fundación Ecuménica para el Desarrollo y la Paz (Fedepaz)) presented a denouncement of the occurances to the Penal Authorities of Piura (Quinta Fiscalía Provincial Penal de Piura) (North Peru).

The report contained the charges of aggravated sequestration, tortures and crimes against the person. Among the methods of torture included in the report were aggression with tear gas, exposure to toxic substances, beatings, asphyxia, being kept bound in forced position for long periods of time, prolonged exposure to cold, denial of water and food, death threats etc.

Additionally, the procurator fiscal who was present during the group's detention, Félix Toledo Leiva, has been charged with the crime of omission of exercise of penal action, as he was fully aware of the abuses committed and far from promoting penal action against the perpetrators he denounced the victims for their part in the peaceful march.

The doctor who examined the tortured people has also been charged with the crime of expedition of false medcal certificates, as he did not affirm the evidence of tortures presented to him. This report is the origin of investigation 214-2008 of the Penal Authorities of Piura (Quinta Fiscalía Provincial Penal de Piura). To date, the Public Ministry has been taking declarations from the victims.

The Photographs of the Horror
A few days ago, the National Coordinator of Human Rights in Peru was given access to a group of photographs, handed in anonymously, that corroborate the allegations of torture reported by the community group.


The photos shows diverse moments in the occurances in the Majaz mining camp. In the photos the belongings confiscated by the police including clothing, food and cooking equipment can be seen. Of course there are no armaments which accredits the peaceful character of the community's march.

The images reveal, without a shadow of doubt, different signs of ill-treatment to the group that participated in the difficult march. Bloodied faces with contusions and haematomas product of repressive actions. People with no shoes and bare backs, herded together, bound and blindfolded in the interior of the mining camp.

The images also show how the group was kept with their heads covered by plastic bags that contained tear-inducing powder that as well as producing severe burns did not allow them to breathe (according to the testimony of the victims held under these conditions). In such circumstances they were transferred to different points inside the mining camp installations where they were held hostage.

The National Coordinator of Human Rights in Peru strongly condemns the acts of torture and abuse against the communities of Ayabaca and Huancabamba who appear undoubtedly accredited in the published photos. We invoke the authorities to rigorously sanction according to law the responsibles for these terrible acts.

The Death of Melanio

The march against the Majaz mining company also had by way of tragic result the death of the community member Melanio García. In these exclusive photos we see Melanio García after being shot but still alive on August 1st in plain day. The photo shows a bandage that covers the region of the wound and the expression of pain of the community member.


The circumstances of the death of the community member must be seriously investigated. Above all because the autopsy examination reported the death of Melanio García on August 2nd, product of a hemorrage cause by the bullet wound. And also becasue the photos taken on August 2nd register the body of Melanio, who on this date was in police custody, in another place and in a distinct position (lying back down on a sack).



UPDATE:
For more information on Majaz 2005 and the report from the medical team in 2008, click here and open the English language Word document second from the top.

UPDATE 2: More important testimony at this link, translated by Lillie at Memory in Latin America. Good job Lillie.


Peru: the first of many downward revisions

It didn't take long for the smiles to begin leaving the faces of Peru's financial glitterati. After being told since November by Twobreakfasts, by FinMin Luismi Valdivieso, by the Central Bank and by any official bullshitter you could point a stick at that Peru's GDP would grow 6.5% in 2009, the first revision has appeared.

Buried in this upbeat note from Reuters is the Central Bank's new forecast of 6.0% GDP growth. Now that may still seem good to you, IncaKuloNewser, but these are the same people who confidently predicted 2008 inflation at 3% for 2008 (it finished more than double).

Otto can also confidently predict things. Confident predictions include that between now and March we'll have one more downward revision of GDP to maybe 5%. Then around September 2009 4% or so, but nobody will care because the gov't will keep screaming about how inflation is dropping and all is well and it's not their fault that GDP isn't living up to expectations anyway.

Meanwhile, remember that at the end of this GDP rainbow there's no pot of gold for the 40% (and climbing) of Peruvians that live under an already very low poverty line.

IKN still needs your vote


Here we are with just four day left in the vote for "Best Caribbean, Latino, or South American Blog" and it's looking kinda optimistic for Otto's aim of a top three finish. But there's nothing written in stone yet so I'm boring you once again with a cheesy request to click on this link and cast a vote for the blog. It'll take up about 20 seconds of your day and you can also see how the others are doing.

Thanks in advance. By the way, if we reach 800 votes I'll be especially pleased. Get there and I'll tell you why Wednesday.

1/9/09

Ecuador 14 January 2008: The Studfather

Note down 14th of January in your bizdiary, esteemed lector of IncaKuloNews.

  • January 14th the most likely date for the second debate for Ecuador's new mining new is set to happen. Got the date, invitations have been sent out, the hall has been booked. The second report was approved 4-0 this afternoon (one abstention from the arch-socialist on the Congresillo). The law project now has to wait 48 hours for any observations to be added from third parties, then it must be debated in full session within five days. That means Friday is the limit, but word is that Thursday is the day.
  • January 14th is the deadline that Studmuffin has given FinMin Viteri to announce how Ecuador wants to run its defaulted bonds buyback. She says there are still plenty of options on the table and is now working against the clock. Here's El Comercio with the whole story in Spanish (run it thru Google translator if you're Castilianly challenged).
More on the miners: As for ongoing rumbles and protests, yesterday was another day of skirmishes between anti-mining protestors and The Studfather's enforcement brigade. One journalist was taken hostage by the protestors for a while but then released. Sticks and stones were thrown at 20 cops until another 50 turned up and things went quiet. There is no big, organized voice-of-the-people against mining going on, but plenty of photo opportunities for the treehug brigade to take photos and handwring themselves into a frenzy.

The most notable absentee from the protests has been CONAIE national executive. The indigenous umbrella group has made anti-mining noises from the sidelines but hasn't actively joined in the protests. This is pretty significant, as although CONAIE has the manpower to help bring down governments if it wishes (check the history books for proof), it's also a canny operator and knows how to play the realpolitik game. There are enough indigenous members of CONAIE that want mining development to go ahead (those local groups have been hanigng round a welcoming Congress all week) and so CONAIE has backed off the full commitment protest, it seems. Put simply and without beating around the bush, this means the law is going to pass next week. Period. No ifs, no buts, no stupid comebacks from people who don't know about Ecuador.

From there we'll have a period of i-dotting-and-t-crossing and it should be on the books by the end of the month. Bought DMM.to today? Looks like somebody did!


Trading Post


Mag Silver (MVG) (MAG.to) up 12% in the US and 13% in Canada. There was this news yesterday about new finds (that didn't really surprise anyone) but why should it be travelling hard and high on good (but not great) volumes today? Is Fresnillo about to sweeten the bid? I honestly don't have a clue.

Troy Resources (TRY.to) refuses to go under $0.90 (which is where I want to buy it). Buy now at 0.91/0.92 or wait a while longer? Which wrong decision do I make this time........?

Coastport Capital (CPP.v) is a leetle leeetle springer that has caught the corner of my eye for the last three days. Now at $0.045 and coughing and spluttering its way back up from the 2c doghouse. Ecuador exposure is the key to this stock so regular readers will understand why it's recovering. I have never owned or reco'd the stock, FWIW. Not reco'ing it now, either. Just saying it's caught my eye, so DYODD.

Corriente Resources (CTQ.to) (ETQ) at C$4.11 right now. I'd like to be positive about CTQ and it's been getting a bounce off next week's Ecuador mining law second debate, but it looks as though a lot of the expectation is now baked in to the price. It was a buy a few weeks ago under $3 but I was all wishy-washy then as well, so WTFDIK anyway? I know lots of people like this stock but I also know there's a lot bunch of cheaper copper plays in LatAm right now, cash at bank or no cash at bank. Jeesh, what a pathetic fence-sitter I am.

Rusoro (RML.v) down 8% at $0.66 today, taking a breather from the big run-up we've seen recently. Watch this space for news on RML, people. Otto's got a surprise up his sleeve.

Cosan (CZZ) down 3%. It went under $4 but has popped back up nicely and is behaving very well considering yesterday's big move and today's broad market weakness. Me own and me likey.


Update: CZZ now green at $4.23. I know a winner when I see one and I'm looking at one right now.

Moly News

It semi-affects Latam so it gets in. This PR today told the world that Sprott Moly Fund (MLY.to) is going to distribute assets to shareholders due to the ongoing malaise in the moly market. Fair enough, so let's see how that has affected the market today. Here is MLY.to compared to its four largest equity holdings, Thompson Creek (TCM.to), Quadra (QUA.to), Mercator (ML.to) and Inca Pacific (IPR.v)

Or in other words, "dump the shares, there's cash being given away over there, boyz."

News round up (serious edition)

When you live in a seismic zone and see photos like this, you know
what it means. Thinking of you, Costa Rica

"Pura Vida" (I hope). In Costa Rica the death toll from the 6.1mag quake yesterday is at 14, with unconfirmed reports of another 18 dead. No more, please. Aguante ticos.

Check this out for an excellent early morning news review as he does this nearly every day. Headlines from all over the LatAm region all neatly packaged and a line of comment to boot. Put this dude on your RSS immediately and then I won't feel so obliged to be all serious here.

Wow, what a coincidence. As soon as the Peruvian petroleum exploration business comes under close corruption scrutiny a whole bunch of international players stop getting busy. Add to the list of deferred projects this JV between Royal Dutch Shell and BPZ yesterday. BPZ dropped 17% on this news that was blamed on the market's "current environment". Yeah right. Wanna see this bridge I have for sale again? It's a really nice one...got arches and everything.

In other regional countries insider stock trading is positively encouraged, but Chile is more serious than most (as we know). Land of the Mapuche wins more anti-corruption brownie points by fining and upholding this ruling against a director of airline LAN.

Finally, an excellent report from the London Financial Times about the economic downturn and how it's affecting the whole region, written by Stephen Fidler. This article is highly recommended as balanced and accurate. Personally, I know the world has gone totally gaga when I start agreeing with Ricardo Hausmann. Sheesh...i need a stiff drink.

Unemployment datapoint du jour

Just saying, ya knows.........


First person who writes to tell me I'm a Commie is the winner.

otto.rock1 (AT) gmail (DOT) com



Update
(four minutes later): We have a winner! Thanks 'FL'

Peru: as corrupt as ever

"Just the one breakfast this morning, Mr. García? Or would you like two"

Another immersion in the putrid world of Peruvian politics.

Remember the scandal back in October when this Romulo Leon guy was recorded in conversation with Alberto Quimper of state-run PetroPeru talking about the bribes they were about to pick up for favours offered to foreign oil companies? Yeah, course you do cos I blogged about 9 times on the thing (here's one). It's also the corruption scandal that led to the resignation of the then Prime Minister Jorge Del Castillo and all the cabinet and the start of the woefully disappointing Yehude Simon's term.

So anyway, since then plenty has happened in the case, but things came to a head this week with two happenings.

The parliamentary commission charged in investigating as to how deep all this corruption malarkey went (and it went deep into the APRA party, no doubts) was expected to slap at least four ex ministers with formal corruption charges. But when it came to the vote, one committee member decided to vote against the charges and due to the nature of the committee this meant that the charges disappeared into puff of smoke. Carlos Raffo is the name of the committee dude that saved the bacon of Jorge del Castillo along with ex-Health Minister Hernan Garrido, ex-Health Minister Carlos Vallejos and ex-Mining Minister Juan Valdivia

Of course Raffo will deny it (in fact he already has), but people who don't live in the fantasy world of PeruPolitik need about 10% of their brainpower to work out that he was bribed by the APRA party to change his vote. This Raffo guy is one of those long-standing "controversial ministers"; a member of Fujimori's party, a vocal supporter of his ex-boss..and most importantly a corrupt piece of shit who would sell his mother to a platoon of Slavic soldiers given the chance.

Meanwhile, in true Peru style, while the guilty corrupt bigwigs get off scot-free the people who managed to eavesdrop the conversation between Leon and Quimper in the first place are now behind bars. Eight people from the Peruvian Spooks'Я'Us company "Business Track" (website here) were arrested yesterday, including the bossman who was.........roll on the drums.....the ex chief of intelligence in the 1990's Fujimori government.

And thus the sordid world of Peru, APRA and Twobreakfasts continues:
  • The sacrificial lamb is chosen (Romulo Leon)
  • The bigboy corruptos cross palms with silver, get away with it and lived to be bribed again (Del Castillo and his merry men)
  • The whistleblowers are thrown in jail (as a lesson to the next people who dare to try for a bit of justice)
And President Twobreakfasts, leader of the most corrupt political party in South America, member since he was old enough to walk, stalwart party capo-de-tutti-capi for decades..... knows absolutely nothing at all.

Chart of the day is.........

.....China's YoY Electricity "growth rate" (used as a very loose term) in the last three months of 2008.


Pooh's friend Eeyore has le mot juste here; "Oh dear.....oh my."

1/8/09

The now traditional "please vote again" evening post

Dudes&Dudettes, IncaKolaNews still hanging in there in the top three (3rd to be precise) for the "Best Latino, Caribbean, or South American Blog" in this 2008 Weblog Awards thingy.

I'm going to thank you in advance one more time for putting up with my constant chatter on this and asking you to keep on voting the site. A podium finish in this awards after just nine months of the blog's existence would be such a cool thing. Click here to vote. Thanks.

LatAm Mining: Calling all industry executives and professionals.....

....because I know you read the blog, guys.

On January 15th the TSX and Fasken Martineau are putting on a live video webcast with a top-level discussion panel. The video webcast is entitled ""Dealflow in Mining" A Current Canadian Perspective" and is aimed at mining people with business (past, present or future) in Latin America particularly.

This video webcast costs nothing to video-attend and you get your invitation by registering with the correct people (see underneath). Perfect for executives (and even people that actually do work in mining companies :-), mining analysts (I know you're out there) and business journalists (I know you're out there, too) amongst others. Latino mining people especially welcome. Also, please note that one of the aims of the video webcast is to help you get the most out of your visit to the PDAC conference in March, the tips coming from people that know PDAC better than anybody.

Coming up are some of the details you need to get your free participation arranged. Also, click this link or the link below to get in touch with the people organizing the event. Lastly, I'd just like to point out that I get no payment, commission, benefits or anything of the sort for promoting this video webcast; it's only getting this space because after talking to one of the organizers today I was left very impressed (both with the person and the conference agenda). I believe it to be an excellent initiative and I hope you guys out there can benefit from it.

Please read below for more details and click here for the contact info, or to register or to ask the organizers any further questions. Enjoy, and I hope you make the best of this opportunity, people. It surely beats getting your LatAm info from a snarky blog like this one ;-)

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"Dealflow in Mining" A Current Canadian Perspective

Toronto Stock Exchange & TSX Venture Exchange/Fasken Martineau Roundtable

January 15, 2009
The Exchange Tower
130 King Street West
Toronto, ON

2008 has been a difficult year for the economy and particularly so for the mining industry as liquidity problems, lower commodity prices and steep declines in market valuations have severely impacted exploration and mining activities. Yet, the new valuations, are prompting strategic reappraisals by financial and industry players and, for some, attractive possibilities are opening up. M&A, restructurings, joint ventures and creative financial arrangements are all, to a greater or lesser degree, being discussed or being implemented.

On January 15th, 2009, the Global Mining Group at Fasken Martineau DuMoulin LLP and TSX Inc., in co-ordination with the Prospectors and Developers Association of Canada (PDAC), will host a live video webcast about the current market conditions and developments as they apply to financings and other transactions in the mining sector. The distinguished panel, comprised of investments bankers and other experts will include:

David Cobbold................. Managing Director, Equity Capital Markets, CIBC World Markets
Janis Koyanagi ............... Business Development & Strategy, TSX
Kimberley Lok .................Sector Advisor, Extractive Industries, Export Development Canada
John Turner .....................Global Mining Group Leader, Fasken Martineau DuMoulin LLP
Elizabeth Wademan........ Director, Equity Capital Markets, BMO Capital Markets
John Warwick..................Managing Director, Corporate Finance, Paradigm Capital Inc.
Raziel Zisman ..................Global Mining Group, Fasken Martineau DuMoulin LLP (Moderator)

This event has been put together for the benefit of mining executives and professionals located throughout Latin America and will provide topical information on mining finance and deal making. This live video webcast will be especially helpful to participants that will attend PDAC’s Annual Convention in Toronto in early March 2009, as they will arrive with a better understanding of current market conditions and the transactions being contemplated at this time. During PDAC, a function will take place at which participants will be able to meet in person members of the panel and other professionals as well as each other. Details as to time and place will be e-mailed to participants prior to PDAC.

Trading Post (w00t edition)


Gold Hawk Resources (CGK.v) up 125% (yep, one hundred and twenty five percent) at $0.045 and its share volume traded stands at the very top of the TSX boards today. Excellent market response to the news last night (as mentioned before the bell this morning). Also note the Reuters story on the company by clicking through here. You go girl!

Fortuna Silver (FVI.v) up 7.8% at $0.97 and it hit $1.05 earlier today, too. The good run continues. If it reaches $1.05 again it may well be time to take half profits and see if it pulls back some. Chance to average down the position, methinks. Volume good but not great.

Cosan (CZZ) is quickly turning into a portfolio OttoWinner. Bot at $2.84 recently, CZZ just popped through the $4 barrier. Excuse me while I shout "w00t! w00t!" at the computer screen. DYODD (cos I've done mine, dude). Today's volume average.

Dudes&Dudettes, IncaKolaNews still hanging in there in the top three (3rd to be precise) for the "Best Latino, Caribbean, or South American Blog" in this 2008 Weblog Awards thingy. I'm going to thank you in advance one more time for putting up with my constant chatter on this and asking you to keep on voting the site. A podium finish in this awards after just nine months of the blog's existence would be such a cool thing. Click here to vote. TIA

Religion (a three part story)


Peru
Alan Garcia sounds desperate. In another one of his condescending pep-talk speeches to (the people he thinks are) his minions, he uses the words "faith", "miracle" and "pray" to talk about the Peruvian economy. Tis the last refuge of the political scoundrel. I still fear the worst.

Paraguay
El Nuevo Herald reports that President Fernando Lugo has (for the third time since taking office) taken his cabinet of ministers away to "a spiritual retreat" some 170km west of the capital, Asuncion, so that they can formulate their plan to combat poverty in Paraguay. It must be like camp David....but better. More mosquitoes too, probably.

Mexico
Via the wonderful MexFiles we get to hear about the Vatican report entitled, "Fides Dossier on the Question of Immigration in the United States of America". The report includes such pearls as:

"… the institution of a free-trade area sanctioned by the North American Free Trade Agreement (NAFTA) in force since 1 January 1994, to regulate goods and capital, said [no]thing about the circulation of persons, or did anything to find a solution to the problem of migrants. Indeed, precisely in the 1990s, the competition of multinational companies and a capitalistic agriculture, inflicted a severe blow on Mexico’s economy, causing a rise in the unemployment rate, a substantial drop in industry wage levels and economic growth at minimum terms. The NAFTA, intended to bridle these tendencies, on the contrary, encouraged them."

As Mexfiles says, "AMEN TO THAT"

Troy Resources headsup: this could be the day to buy

Last night's action is not included in the TRY.ax line.

Let's see how things progress (after all, gold just popped $15), but last night's action in the Troy Resources main Australian listing (TRY.ax) points to weakness in the Canadian stock today.

Troy Australia dumped 7.75% overnight to finish at A$1.01. Once the current forex calculation is factored in (C$1=A$1.18), this points to a Canadian dollar price of C$0.85. The Canadian stock does tend to trade slightly above the Australian, so perhaps a price of $0.88 is makeable today.

THIS WOULD BE A GREAT ENTRY POINT TO THE STOCK. As those of you (28 people and counting) who bought the $10 NOBS report on Troy Resources note, the strong fundamentals and underlying value of the stock with gold at its current level is clear. The report is still available by the way. Click on this link to find out more.

No matter; if TRY.to goes under $0.90 today I'm a buyer, as that is the kind of entry point that I've been waiting for patiently. DYODD, dude.

another recommendation for the blog "Market Memorandum"

GPB has been doing a great job at his Market Memorandum of covering the swathe of sovereign bonds deals that have suddenly popped up all over the continent (and beyond, for that matter). This is one (just one) of the dude GPB's specialties in life and he knows the field backwards.

Here's the link to the latest overview post, but check the main page for the multiple reports already there and waiting for you. Great coverage of this new fashion in local finances, and recommended reading.

Also, as an added bonus I'm happy to say he's dumped the crappy dark template he was using and now has an easy-on-the-eye format.

Chart of the day special: Gold Hawk Resources

Proof that being good can pay off in the long run.

Here's the Gold Hawk (CGK.v) one year chart with a couple of notes added.


This site has followed the trials and tribulations of CGK.v closely (see related links at the bottom of this post for some of the coverage), mainly because your caring-sharing Otto is sympathetic to its cause. The company has had a lot of problems foisted upon it by circumstances not under its control and has been suffering greatly due to the snail-like speed of Peruvian bureaucracy and foot-dragging insurance companies.

However, in all 2008 it has done right by its workforce, by the law, by social standards and by the environment. It should be remembered that way back in May when the first cracks appeared in the wall of its tailings pond, it was the company that voluntarily closed down its operations and contacted the authorities.

This isn't some bad example of a dirty and dangerous mining operation (are you listening LAMMP in Bromley?). This is an example of a good corporate citizen that deserves support and applause for its attitude.

FINALLY, YESTERDAY, THIS GOOD GUY JUNIOR MINER GOT A DOSE OF WELL-DESERVED GOOD NEWS. Underneath I've pasted out the press release (also linked here) that says the company has been granted the permits and permissions needed to get moving again. It also has a bit of breathing space on the $9.7m it owes, so hopefully it can sort out its finances this month and not go into default.

GREAT NEWS, and I'm happy for the guys at CGK.v. DYODD, dude, but expect CGK to move away from the 1c and 2c prices of the last few weeks. The company isn't out of the woods yet, but this is a big step forward no doubts.

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VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 7, 2009) - Gold Hawk Resources Inc. ("Gold Hawk" or the "Company") (TSX VENTURE:CGK - News) is pleased to announce that the Company's Peru subsidiary, Compania Minera San Juan (CMSJ) received earlier today the final permit for the construction of its new permanent tailings facility at Chinchan.

Highlights:

- Final permit received to construct permanent tailings facility at Chinchan.

- Certificate of Mining Operations (COM) for 2009 as well as the water use authorization for the new Chinchan tailings facility have now been received.

- The most recent extension of the Emergency Decree no longer requires the Coricancha processing plant to relocate once certain conditions are met.

- The Company has negotiated with lenders for an extension to January 29, 2009 of its debt repayment date.

- As a result, the Company is in a position to more effectively seek the funding required to rapidly advance its strategy to restart production at the 100%-owned Coricancha polymetallic mine.

"Final permitting of the new permanent tailings facility at Chinchan is a significant milestone for Gold Hawk and its shareholders, and a key component of our strategy to restart production at the Coricancha mine," said Mr. Kevin Drover, Gold Hawk's President and CEO. "With these permits in hand, we now have the ability to more aggressively look for financing on acceptable terms that will allow us to construct the tailings facility and get back into production as quickly as possible."

Other key permits received include the Certificate of Mining Operations (COM) for 2009, a key permit to allow mining that needs to be renewed annually, and the water use authorization for the new Chinchan tailings facility. All other permits required to operate the Coricancha mine are in place and in good standing.

The authorization to construct the new tailings facility at Chinchan is a general authorization to construct the tailings area, which will be used as the new location both for historical tailings that require relocation as well as new tailings generated when the Company resumes production in the third quarter 2009 subject to the Company obtaining additional financing.

The most recent extension of the Emergency Decree states that the requirement for the relocation of the processing plant as specified in the original Decree would be eliminated provided certain conditions are met. These conditions include:

- The third-party irrigation system must remain shut-off,

- drainage of the hillside must remain in place; and,

- the Company commit to relocate the tailings, stabilize and ensure continued safety monitoring of the hillside.

The Company is confident it can achieve these conditions and that the plant can be operated in its current location, resulting in a significant reduction in time delay and cost necessary to re-start operations.

Chinchan is located approximately 30 kms from the Company's Coricancha mine and processing plant in central Peru. The Chinchan tailings facility occupies a large land holding of more than 40 hectares and through a phased expansion of the current design produced by the Company's U.S.-based consultants Tetratech, more than 15 years of tailings capacity can be achieved. The Company expects to transport tailings via rail from Coricancha to Chinchan; both sites are easily accessible by existing railway and paved road. Chinchan was in the initial stages of geo-engineering and baseline studies prior to ground displacement being discovered in May 2008, leading to a suspension of production.

Debt repayment extension

The Company's lenders have agreed to extend the debt repayment date to January 29, 2009. The US$9.7 million total debt was scheduled for repayment on December 31, 2008. This extension will allow the company to continue discussions with current and other lenders regarding alternative financing arrangements.

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Definitions (joke of the day)

Hat tip, Miguel Olivera

What's the definition of "recession"?
When people lose their jobs.

What's the definition of "depression"?
When you lose your job.

What's the definition of "recovery"?
When George W. Bush loses his job.

1/7/09

It's that annoying reminder again.

If you have already voted for Inca Kola News for the weblog award, I thank you.

I also remind you that you can vote again every 24 hours. If you'd like to help the site keep its top three position in the poll (and I'd be chuffed to finish on the podium) click on this link to vote again. Thanks for your patience and remember you can vote every day from now until Tuesday January 13th at 5pm EST.

We're now three days into the vote and the yearned-for top three finish is looking possible. However it will only happen if you people out there take a few seconds out and continue to vote every day. It may be a silly system, but as it's the biggest open vote award of the blogging year if you care you'll be helping to put this humble corner of cyberspace on the map...and that would be cool.

Chavez is wrong


Chávez is wrong, part one

January 5th, 2008: Citizens Energy has recently been informed by CITGO that due to falling oil prices and the world economic crisis, CITGO has been forced to re-evaluate all their social programs, including the heating oil program, which has provided hundreds of thousands of low-income U.S. households with much-needed fuel these etc etc ........................................................


Andres Oppenheimer says*: "This only goes to prove that the Chávez regime is quickly falling apart. As I predicted, his hatred of the USA and its citizens is showing through at long last and he would rather watch your grandmother freeze than to yada yada......."

Chávez is wrong, part two

BOSTON, Jan. 7, 2009 – CITGO Petroleum Corporation confirmed the continuation of its social programs in alignment with the solidarity principles endorsed by the government of the Bolivarian Republic of Venezuela through its national oil company, Petroleos de Venezuela, S.A., said CITGO Chairman, President and CEO Alejandro Granado during a press etc etc.....................................................


Andres Oppenheimer says*: "The Chávez regime shows no shame to its people, preferring to watch its own country starve to death while overspending to supply cheap oil to the USA in an obvious propaganda attempt to score political points and influence yada yada.........."


*ok, I made these up. bite me

So what does Dominic Channer of Aurelian think of Ecuador's new mining law?

Dominic Channer (for it is he)

This morning, Aurelian's (now a branch of the Kinross empire) President Dominic Channer spoke on Radio Quito. Here are a few direct quotes from the interview (via OttoTrans™):

"We have followed with great interest the advance of the mining law and we have participated at several points in the mining debate to present our opinons."

Channer then pointed out that the debate goes ahead tomorrow and made a point of mentioning that the law has changed from organic to ordinary. Then there was a whole section about the contentious issue of water (one of the battlegrounds for the treehugger NGOs that have been brainwashing locals about the big nasty miners). Channer said;

"On the subject of water, we see this as a fundamental issue in the law and the fact that there will be many controls with a new water law. We see this as extremely important in the mining sector."

Next came talk about the environment in general. Channer again did himself a service by telling it like it is.

"I think it's important everybody understands that mining has an effect on the environment, but the same as any human activity, any industry, agriculture, daily human life affects the environment. The important thing is how we manage these impacts, and that is why the standards used by modern mining and the control applied by the State are so important."

"(The new law)..has many controls and is much better in this aspect than the current law. This is why a new law was created that has all necessary controls in the environmental area, the social area, the labour area. It's very important people understand that the new mining law takes cares of these uncertainties and is the result of over a year's work."

All in all, a good job done in the interview by Channer and kudos to you, sir. By the way, it's news to me that the debate will go ahead tomorrow (I thought it was just the report handing-over ceremony tomorrow)...let's hope that's true. The sooner the better, I say.

UPDATE: Silvia Santacruz of Ecuador Mining News clears up the slight confusion. Thanks, Silvia!

Hey Otto,

The Assembly's Economic Commission will present their observations to
legislators, tomorrow. Then, they will have two days to read it, and then the mining law will be presented for second debate. Here is the link to the Assembly's website.

http://www.asambleanacional.gov.ec/index.php?option=com_content&task=view&id=16811&Itemid=1

Trading Post ("what goes up..." edition)


This may sound all hokey to you, but when I get correspondence such as "...thanks for exhorting me to take some cash off the table, one of my many weaknesses.." (reader GB referring to this post yesterday) it makes it all worthwhile. I just hope GB did what he said he'd do yesterday.

Here's the kopper korner: Right now FCX is down 6%, PCU is down 5.% and yesterday's example stock Capstone (CS.to) is down 8.5%. Let it be repeated; "DON'T BE AFRAID TO TAKE PROFITS IN A BEAR MARKET". Spot copper is down 3% on "demand fears" today.....errr, what did I say about bear markets again?

Colossus (CSI.to) up again, now at $1.30. After the bell yesterday CSI.to announced its 2009 drill program at Serra Pelada was underway. So be it. I still say 'avoid' and the more I read about this thing the leerier I get. You should get reading, too. It's called DD...do it.

Petaquilla Minerals (PTQ.to) at $0.55. To prove every dog has its day, this thing has moved 30% or so with the rest of the junior gold field. What's that one about rising tides? Check the insider filings for 2008 and you'll see just how underwater CEO Fifer really is. Man the bilges, shipmates!

Nadagold up at $2.27. It made a very big move yesterday on the back of the news about the extra bonus share giveaway that has put $75m in the company coffers instead of the original $60m. Who cares that the big projects won't ever be built and the company has already proved itself incapable of running a gold mine properly? Answer: Nobody (except boring fuddyduddy fundamental analysts who search long-term stock value like me). Just get the money, boyz.

Cornerstone Capital (CGP.v) UNCH at $0.075. I stared and stared at this when it went low recently, but didn't pull the trigger. I saw it get the Caseypump treatment when at 5c, but did nothing. I mentioned it to a couple of e-mail pals at the time and didn't move on it. It's still there, looking at me and saying, "Hey look at me, Otto! I'm good value for the Ecuador mining law good news just down the path." There are worse pennycrappers out there, that's for sure.


DON'T FORGET TO MAKE OTTO'S DAY AND VOTE EVERY DAY!
HERE'S THE LINK, DUDETTES AND DUDES
.


Venezuela's media love Israel more than Hugo. Surprised?


I love you though you hurt me so
Now I'm going to pack my things and go
Tainted Love, Soft Cell, 1981


Israeli news service Ynet
got a telephone interview with Israel's (now ex) ambassador to Venezuela, Shlomo Cohen. Here's the link and go visit and read for yourself, but here are the direct quotes from Cohen. Y'know, sometimes...just occasionally.....you get a glimpse of the reality behind the curtain. No further comment from me. Let's be different about all this and treat you as a thinking human being. Read the man and work it out for yourself.

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"This is the first time I'm being dismissed. We're getting the paperwork together and preparing to close down the embassy as quickly as possible. We don't have much time to waste, since the government has ordered us to leave the country within 72 hours. I don't remember anything like it. This is a new low in the relations between the countries."

"Since yesterday I've been receiving many calls from friends of Israel here, expressing their sympathy and support in light of the president's decision."

"During the Second Lebanon War I was summoned for consultations and Chavez threatened to sever the ties with Israel, but didn't follow through with the threat. This time he did. I estimated that something like this could happen. After all, he is an ally of Iran who maintains very close relations with the government in Tehran."

"Although the parliament lauded the decision and supported it, it's clear to everyone that he is the only one making the decisions. He regularly supports radical states and organizations, and his door is closed to us. Even if the media in Venezuela understands why we embarked on the Gaza operation, the regime is simply uninterested. It supports one side and that's that."

"I hope the economic and cultural ties continue despite the crisis, and I'm hopeful that one day the friendship that characterized the ties in the past will return. I no longer believe I will be back here as an ambassador; after all, I was declared a persona non grate. Perhaps I shall return in the future as a tourist."

Mo' Ecuador: Bonds and Visits

Raul suddenly realizes that his guest has not yet arrived

Two shots from Ecuador:

1) Studmuffin lands in Cuba today on an official visit to shake hands with at least one Castro and possibly two. The visit is by personal invitation of Raul, with The Muffin due to be handsome and dashing at scientific and social displays. Mojitos served.

2) According to Reuters this morning (Spanish language link), Ecuador's plans to buy back the defaulted debt include setting aside U$900m for the job. FWIW, this implies a 28.15c on the dollar average pricing, so we're starting to get the target in sight now. Still all deathly quiet amongst the vulture funds. Methink they be biding their time. In fact, meknows it.

Ecuador mining law update

Petsain (right) and assembly head honcho Fernando Cordero on Monday

Things are beginning to move in Ecuador concerning the mining law. There are quite a few bases to cover, so here we go with bullet points:
  • The report that will be used as the base for the second assembly debate is handed over to the parliamentarians tomorrow. We can expect the debate next week. Remember, if it gets through the debate next week (and there's little reason why it shouldn't) then it becomes law.
  • The law is now very likely to be non-organic. This means that other laws can be applied to the mining sphere and may complicate matters for some. In the case of my preferred vehicle Dynasty (DMM.to) there's nothing to be worried about (there...I've stuck my neck out on this).
  • Over the last two days, enviro protestors have been protesting in the southern districts. Things turned a bit nasty yesterday and the protests got violent. In total 12 police were reported injured in clashes and one police medic was taken hostage by the protestors. The hostage was apparently taken to use as a bargaining chip to get arrested colleagues out of jail. The medic dude is in no danger here, it should be stressed.
  • Protests are continuing this morning but less vociferous. The gov't has shipped an extra 140 police into the area and schools etc are open as normal for the first time this week (70% attendance rates reported).
  • Indigenous umbrella group CONAIE (national executive) has not been directly involved in these protests but yesterday expressed their support and called on the law to be delayed and for a national debate. It should be pointed out that CONAIE has used the same tactic in previous moments and the government has always replied that the consultation process before the proposed law was published was extensive and thorough. CONAIE also made their usual anti-transnational (i.e. gringo) noises.
  • Meanwhile this link takes you to a report of the visit to parliament by Paúl Petsain, president of the Shuar Arutam people from the Cordillera del Condor region (where the DMM, K, CTQ etc etc projects are located). He expressed his support for the mining law, disagreed with the CONAIE-backed protests and is happy that minor changes are being added to the second debate paper (mainly about artisan mining support proceses). Run the Spanish language link above through Google translator; a very interesting and positive article. I remind you that the indigenous voices closest to any mining project are the most important, with the larger national executive's position being less important. This may seem counterintuitive to some, but it's the way it is.
The bottom line here is optimistic; the protests from enviro-group locals are bound to continue during this week and next but they will not affect the passage of the law. The date is all but set for the second debate and once that happens we'll basically have our active law. It looks like DMM.to's prediction of commissioning at the end of March is going to come true.

Chart of the day is...........

.....copper, 60 day spot price.

Even though it has sagged a bit today in London trading (currently $1.52/lb), copper and its base metallic friends have staged a good recovery since Christmas came and went. Certainly a lot healthier than the last time we looked at the 60d copper chart back on the morning after the US congress voted down the auto bailout plan (wowsers, that seems like half a year ago, doesn't it?). Here's the link to that earlier post which pointed out the double bottom.

Where were you on January 7th 2004 at 07:55 and 32 seconds?

Happy 5th Birthday, wonderful and blessed firstborn child. It is a great honour and a great privilege to be your father.

1/6/09

A polite reminder

Yes, it's about this darned Weblog Award again.

If you have already voted, I thank you. I also remind you that you can vote again every 24 hours. If you'd like to help the site keep its top three position in the poll (and I'd be chuffed to finish on the podium) click on this link to vote again. Thanks for your patience and expect more annoying posts like this for the rest of the week.

News roundup (the bits that Fox News forgets to tell yaz)

BLAME CHAVEZ FOR THIS
HUMANITARIAN DISASTER

Honour amongst thieves. This afternoon at its cabinet meeting, Peru's 17 ministers of state decided to reject the pay rise given to them late last week by Presidential emergency decree. Or in other words, Peruvians kicked up such a fuss about this barefaced crime that the ministers collectively decided that they couldn't get away with it.

Freeze, suckers! Chávez takes approximately four nanoseconds about deciding between cutting cheap fuel aid for US citizens and cutting aid for....errr...Venezuelans. Y'know that if Venezuela carried on spending the way did with crude at $100 it would also be frowned upon as too much public sector burden. Some you lose, some you draw, eh? Anyhow, betcha can't wait for the first "Chávez Froze My Grandmother!" headline out of New Hampshire.

Argentina started its "plan zero" easy credit plan for new cars today. Just in time (geddit?) too, as auto production was announced today as down 47% in December YoY. Phunny phactoid; originally the first person on the list for the new car on cheapo credit was the 21 year old son of the Minister of Environment and Development, Homero Bibiloni. When the press got wind he struck his name off the list. Only in Argentina........

Ecuador has shrinking reserves. At end 2008, international currency reserves stood at U$4.472Bn. El Comercio does the math and notes the important bit; that's down U$1.538Bn in the month of December. Ouch. Not good.