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Which will be worth more at end 2015?

3/14/09

Vena Resources (VEM.to) springs to mind

Name me the junior miner that has Cameco as its JV partner and is exploring for uranium in the Puno region? Yeah, that's VEM.to. Check this out:

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13-03-2009 16:03

Peru likely to export uranium by 2011

Lima (ANDINA).- In the next two years, Peru may export uranium and be one of the four Latin American countries to have a nuclear reactor generating electricity in several remote areas of the country, the president of the Peruvian Institute of Nuclear Energy (IPEN) Conrado Seminario said Thursday.

He noted that IPEN currently promotes a bill encouraging private investment in the electric core field with the purpose of having an alternative electricity generation source to fossil fuel, hydro-electric and wind power.

In the future, given the oil, gas and water shortage caused by global warming, the atomic reactors would be the substitutes to generate electricity and avoid stagnation of industrial and human activities.

Seminario said that in the world there is a resurgence of nuclear power, driven by the high cost and scarcity of traditional fuels and in the Peru the nuclear activity has also resumed in the context of technical cooperation in Latin America which had remained stagnant.

"In 2008, a provision enabling the IPEN be part of the Energy Guide Plan Commission was issued. This committee will seek to modify the energy matrix which has remained unchanged for years. Its amendment will provide access to other energy sources including nuclear," he said.

The scientist said that the work is going well and state that there are projects to export uranium by 2011 after checking the prospecting works which mining companies are currently conducting in the region of Puno.

When heads of state guestblog, they don't do it on IKN

Instead they choose some apparently popular publication called 'The New York Times' or something. Here's the link to Evo Morales' op-ed found in the pages of the NYT today. The subject is the coca leaf and the argument can be filed under "plain common sense". Here's an extract, but it's a "read it all" thing so go visit that link yourself.

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The custom of chewing coca leaves has existed in the Andean region of South America since at least 3000 B.C. It helps mitigate the sensation of hunger, offers energy during long days of labor and helps counter altitude sickness. Unlike nicotine or caffeine, it causes no harm to human health nor addiction or altered state, and it is effective in the struggle against obesity, a major problem in many modern societies.

Today, millions of people chew coca in Bolivia, Colombia, Peru and northern Argentina and Chile. The coca leaf continues to have ritual, religious and cultural significance that transcends indigenous cultures and encompasses the mestizo population.

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It's not just me that thinks this way about Alan García (glad to say)

Enrique Iglesias, general secretary of the important Iberoamericana institute, today wrote a good analysis of what the recession is likely to do to Latin America. In his review of the Iglesias piece, Peru opposition politican Juan Sheput whacks into President Twobreakfasts for much the same reason as this humble correspondent.

Below is part of Sheput's critique. I'm not a grand fan of Sheput, for what it's worth. I read him occasionally and feel that sometimes he's right and sometimes wrong. Also, the Toledo government was just A.N Other corrupt LatAm gov't and nothing to write home about on the social front (though it was pretty efficient economically-speaking). Of course Sheput is talking his own political book, being a party member of ex-Pres Toledo and a natural opposer of the current ruling APRA regime, but all the same....all the same.....

Also those versed in Spanish will learn a lot from the original E. Iglesias article linked here. Here are two extracts from the Sheput critique as put through the Ottotrans™:

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"President García acts irresponsibly as his attitude is like somebody in a tower watching the giant waves of a tsunami still far away and shouts to those below, "Nothing's going to happen here". Guided by his calculations and hopes, his invocations to an imaginary god and without scientific rigour. His only support is in the irresponsibles that accompany him, such as (Finance) Minister Luis Carranza, who prefers to keep in with his boss and entourage than with his nation...


........

"The Iberoamerican secretary general, Enrique V. Iglesias, has just written an article in Spain's El Pais entitled "Iberoamerica and the Economic Crisis", in which he warns us about what is coming and including the neighbour states. The difference is that while Lula, Kirchner, Evo, Uribe and Michelle Bachelet prepare and prepare their population by warning them, here in Peru the demagoguery of Alan García is fuel for his own self-deception that manifests publicly when he says that here nothing is going to happen...."

Good weekend reading from respected bruddasites


Duderino on Bolivia and Victor Cardenas. Just how good is El Duderino? Very good.

Setser on China and Wen's now famous comments. Just how good is Setser? Very good.

Olivera* on Argentina and the Kirchner plan to bring forward the October elections. Just how good is Miguel? Very good. Smart comments left by readers, too.

Rendon* on Peru and more reverse-racism. Just how good is Rendon? Very good.

Tim on El Salvador and tomorrow's election. Just how good is Tim? Very good.

UPDATE: Damn, that Rendon link has been preying on my mind. It's worth a little English language explanation that will show the kind of people in Peru's political (no) class. Fujimori party politico Carlos Raffo (a long-standing figure in Peruvian politics and very much part of the establishment scene) this week launched an attack on indigenous congress member María Sumiré. Raffo's ironic and amazing racist complaint was that now Sumiré couldn't represent her people (crudely labelled 'The Quechua' by the original report) because nowadays she didn't travel by mule but by 4x4 SUV.

You see, in pea-like brains of the elites that think they own Peru, any indigenous person that has the temerity to make themselves successful and enjoy the trappings of success that scum such as Raffo enjoy all the time can't call themselves indigenous anymore. The sucessful indigenous either have to renounce the fruits of their success and "live like their own" or they should "move up" to Raffo's way of life (dear reader; please say that "move up" out loud with as much sarcasm as your voice can muster).


*Spanish language

Andre Agapov and things


Well, I think we all need to read this story in The Vancouver Sun today. Thank you reader RO for passing this on. I'm going to paste the first half and leave the link so you can read the second half over at the original source, and then read it through myself a third time while sipping the morning java.

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Vancouver mining company CEO linked to Thai bank collapse

The chief executive officer of a Vancouver-based junior mining company that is closely associated with Vancouver mining magnate Frank Giustra has been accused by the Thai government of plundering millions of dollars from the now-defunct Bangkok Bank of Commerce, according to documents obtained by The Vancouver Sun.

Andre Agapov, a Russian national who is now living in London, is CEO and a director of Rusoro Mining Ltd., which is based in Vancouver and trades on the TSX Venture Exchange.

In a request for assistance issued to the U.S. government in March 2002, Thai authorities named Agapov as a co-conspirator along with Krekkiat Jalichan, the bank's former managing director, and Jalichan's former adviser, Rakesh Saxena, as well as numerous others, in a scheme to defraud the Bangkok Bank of Commerce of hundreds of millions of dollars in the mid-1990s.

Giustra, who has become fabulously wealthy promoting mining deals throughout the world, and his right-hand man, Gordon Keep, have had a close business and financial relationship with Rusoro, initially through their publicly traded merchant-banking firm, Endeavour Financial Corp., and more recently through their private financial advisory firm, Fiore Capital Corp. In an interview this week, Keep said he became aware of the allegations against Agapov in a report done by a private investigation firm at the request of a U.S. investment banking company about three years ago. He said the report addressed the allegations, but because it is confidential, he declined to provide details. He said he also made other inquires, but once again declined to provide details. "The net result is that I felt comfortable dealing with Andre," he said, adding that, as far as he can determine, Agapov has acted appropriately as a senior officer and director of Rusoro.

Giustra declined to discuss the matter.

Thailand's current position with respect to its charges against Agapov is not clear. Several years have passed, and there have been frequent regime changes in Thailand. Agapov was out of the country last week and could not be reached for comment. It is clear, however, that Thailand has been pressing its cases against the other accused. Last September, Jalichan was convicted on corruption charges relating to the bank scandal and sentenced to 20 years in prison. Last week, he was convicted on more charges and handed an additional 20-year sentence. At least four other people implicated in the scandal have also been imprisoned.

Continues here

3/13/09

Quality free report for finance personnel


This post offers a free white paper report entitled "Best Practices in Creating a Strategic Finance Function" that is aimed at CFOs, company financial team members and anyone involved with the running of day-to-day company finances.

It's not a report for everyone, but those in the field in question will find it essential reading to stay ahead of the game. The offer is open for residents of the USA and Canada. See the blurb below for more details and request your free copy by clicking the link here.

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Many CFOs and the finance organizations they lead have started to take on new strategic roles within the enterprise.

Their goal is to enforce stricter control processes to ensure legal and regulatory compliance, offer strategic insights into the internal and external business environment, and connect the business strategy with daily operations through performance tracking. To assess the trends in the finance function and identify best practices, APQC, an internationally recognized nonprofit organization that provides best practice research, metrics, measures, has evaluated the performance of more than 130 finance organizations. This SAP Insight shares the results of SAP research as well as APQC's Open Standards Benchmarking Collaborative (OSBC) research.

Publisher: SAP

Message to Bloomberg Editors: Please send immediate memo to Berlin correspondent Jeremy van Loon


Bloomberg's standards are slipping.

Standard number one: Never mention Venezuela in anything even approaching a positive light.

Standard number two: Never mention Venezuela without slipping in the keyword, "Chávez".

Standard number three: Never mention Venezuela without using words like "leftist", "enemy", "socialism", "Fidel", "crisis" etc.

Here's the link to the offending article. Send that memo, Caracas. Get the darned thing off the open web asap. C`mon, souljaboys, get to it. It comes to something when you can't even trust Bloomie to hold up its own standards. What kind of world is this, anyway?

Trading Post (funny Friday edition)


Fortuna Silver (FVI.v) up 4.5% at $0.92. Hey, Moriarty, is that all you got these days? Your condescending pump jobs used to be able to get your sheep fired up and moving stocks 15% in a day. Remember KAL Energy...ahhh, those were the days, weren't they? Looks like you're losing our touch....must be those everso sincere disclaimers you put on the end of your articles. Volumes mediocre, too.

Cosan (CZZ) up 1% at $3.05. Cosan reported its quarter this morning, and here's a Reuters note that sums up things neatly. I looked at the headline loss and saw the stock move down in early trading and though uh-oh, so went to get the full filing. On reading it thought "nah, not bad at all, really" and while I was putting my own mind at rest the stock returned to UNCH. Still holding and very much on the right side of the trade. The $3.50 to $3.70 mark is still the target, sugar prices permitting. DYODD.

Corriente Resources (CTQ.to) (ETQ) up 0.77% at $5.24, but the main story is the volume, doing 350k shares and strong again. Desjardins put out a note on CTQ.to this morning .....is that what all the fuss is about? Hope not, but all the same Desjardins said that the comapny looks like getting bought out in the next two to three weeks and set a reasonable $6 price tag on the deal. Sounds about right to me, but I'm not buying. Not buying anything today, in fact (unless TRY.to loosens up a bit).

Mining PRs and the Ottotrans™: Part Four

The Ottotrans™ is back for another episode, as once again we try to make sense of those weird and wonderful mining company press releases. Today's example is the PR emitted by Great Washbasin Gold (GBG) just a few minutes ago.

This is what it says

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VANCOUVER, March 13 /PRNewswire-FirstCall/ - Great Basin Gold Ltd. (the "Company") (TSX: GBG; NYSE Alternext: GBG; JSE: GBG) announces that it has completed its previously announced public offering of 100,000,000 units at a price of C$1.30 per unit resulting in gross proceeds of C$130,000,000. Each unit is comprised of one common share and one-half of one common share purchase warrant. Each full warrant will entitle the holder to purchase a common share of the Company at a price of C$1.60 at any time before 5:00 p.m. (Vancouver time) on October 15, 2010. The Company has granted to the underwriters an over-allotment option, exercisable for a period of 30 days following closing of the offering, to purchase up to an additional 15,000,000 common shares and/or 7,500,000 warrants to cover over-allotments and for market stabilization purposes, which if exercised would result in additional gross proceeds of C$19,500,000. A syndicate led by BMO Capital Markets and RBC Capital Markets acted as underwriters in connection with the offering.

The net proceeds from this offering will be used by the Company to fund the development of the Company's Burnstone project in South Africa and for general corporate purposes.

Ferdi Dippenaar, President and CEO, commented: "The support received for this financing shows that the market, like the management of Great Basin Gold, believes that there is significant value in our Burnstone gold project. With initial commercial production at Burnstone targeted for July 2010 and our Hollister Project in trial mining phase, the Company is emerging as a significant gold producer."

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And this is what it means

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VANCOUVER, March 13 /PRNewswire-FirstCall/ - Great Washbasin Gold Ltd. (the Company) announces that it has completed its previously announced public reaming of 100,000,000 units at a giveaway price of C$1.30 per unit resulting in gross proceeds of C$130,000,000. Each unit is comprised of one common share and one-half of one common share purchase warrant. Each full warrant will entitle the holder to purchase a common share of the Company at a price of C$1.60 at any time before 5:00 p.m. (Vancouver time) on October 15, 2010, which is bound to happen so this one really counts as a boyz-special giveaway. To rub it in and add insult to injury, the Company has granted to its new, special best friends an over-allotment option, exercisable for a period of 30 days following closing of the offering, to purchase up to an additional 15,000,000 common shares and/or 7,500,000 warrants to cover over-allotments and for market stabilization purposes, which when exercised (because this one is bound to fill at these knockdown prices) would result in additional gross proceeds of C$19,500,000. A syndicate led by BMO Capital Markets and RBC Capital Markets acted as pimps in connection with the offering.

The net proceeds from this offering will be used by the Company to fund the development of the Company's Burnstone project in South Africa and for general corporate purposes. We're not telling you if we will need to dilute further in the future so you keep guessing on that one, suckers.

Ferdi Dippenaar, President and CEO, commented: "The banks screwed us over and in the end couldn't lend us the moolah, so really we had no choice but to ream our longstanding shareholders via the Canadian criminals in suits. The amount of large players that queued up for this extremely dilutive financing shows that the the Canadian boyz club is alive and well and, like the management of Great Basin Gold, knew they'd be mad to ignore the stupid price we set because of the significant value in our Burnstone gold project. Initial commercial production at Burnstone was originally targeted for 2009 but we're going to miss that deadline by a country mile, so let's hope we can get a couple of ounces poured in July 2010. Our Hollister Project is also way behind schedule and still in trial mining phase and the Company is emerging as a significant retail goldmine shareholder's pain in the ass. But hey...retail, y'know? If they can't take a joke, **** 'em."


Related Link

Mining PRs and the Ottotrans™: Part Three

Reject and protest Bolivian mob rule now, before it's too late


The story of the week in Bolivia has been, without a doubt, the attack on the home of opposition politician Victor Hugo Cardenas by Evo Morales supporters. The best write-up I've seen on the story is (as usual) Jim Shultz over at Blog From Bolivia and it's linked for you right here. I recommend you check out Jim's words to get the nuts and bolts of what happened last weekend, his normal sharp insight also comes for free.

Mine is a commentary, no more. Firstly, I join the vast majority of voices down these parts that totally rejects, condemns and speaks out against such mob-style vigilante movements and ask that the government of Evo Morales clamps down immediately on this action and doesn't let it become a trend. Morales has talked plenty of talk about "equality for all", and now he has to show he isn't afraid of weeding out the bad ones from his own movement.

The episode reminds me that Bolivia's democracy is still in its infancy. There's a whole section of its population that have never been allowed into the democratic franchise before (about 60% of them, in fact) and now that they have some real political power the temptation to excess in the minds of some factions is clear. Morales' job now, and it's a tough job, is to get Bolivia out of the childish phase of democratic backlash and revenge-taking as quickly as possible. In a perfect world, last weekend's episode will mark the end of it. We shall see.

Following on from that, I'm also reminded at the way the Central European Jewish community took their revenge on many members of the Nazi party in the period just after WWII. Of course this example is more extreme than the situation in Bolivia today. Of course it doesn't condone the attack on Cardenas' home. That said, authorities ostensibly rejected the summary executions by Jewish vengeance-seekers at that time but also, deep down, understood. Governments of countries all over the region stood back and watched the bloodlettings. To be quite honest, after what the Jewish people went through in the years previous I would have stood back and done nothing afterwards, too. The act of revenge for past ills is a primitive emotion and is not one confined to Bolivia 2009. Again and to emphasize, the indigenous Bolivian's plight isn't anything as dire as the Jewish shoah but it has stirred the same underlying emotions amongst its more extreme militants. Evo Morales needs to show, quickly and firmly, that his pacifist and reconciliatory message is good for all sides, not just eastern criollo white versus western indigenous brown. President Morales, impose the rule of law now, before it's too late.

Finally, the roaring silence on this from the progressive English language blogs that cover Bolivia (you know who you are) does no service to the free and open dialogue that you say you want about the other bits of Bolivia 2009...all the coca leaf, racism, self-rule, new democracy, constitution-for-all etc etc. I've waited patiently all week and, Schultz at BFB aside, there has been nothing from the blogs that should cover the bigger Bolivian stories and inform the wider world about the real Bolivia. If it's a big story that doesn't fit with your vision of the shiny, new and wholly healthy Bolivia you cannot ignore the story out of convenience. Nuff said.

Charts of the day are.......

....of Corriente Resources (CTQ.to) (ETQ)......by popular demand. This first one is the 12 month price chart

and this one below zooms in on the action in the last ten trading days.


Both charts can be enlarged by clicking.

Most of the things I want to note about yesterday's action in CTQ are scribbled on the charts themselves. Of the messages (plural) from readers yesterday about the move in CTQ.to this one from DP was the best:

Someone woke up this morning and said "man i got to get me some of that Ecuadorian mining company, CTQ looks good". There has been no company specific news what is the deal? or am i just way out of the loop? Any insight?

Nope, sorry, no insight here. I asked around, too. This has always been a speculative stock and it's always been propped up by a large cash pile in the coffers and strong hands that haven't sold out through the current mess. But if you know the general Chinese-flavoured background to the buyout stories behind CTQ.to there's nothing new I can add here that hasn't been said already. Your guess is as good as mine on yesterday's trading.

3/12/09

Mixed bag of links

Naked Capitalism on the US banks. Yves Smith nails the current situation with this analysis. I do try to steer clear of all things non-LatAm on the blog, but this synthesis of recent happenings and the insight offered is too good to miss.

Bloomie's Kueffner on Ecuador bonds. Seems to me that the FinMin is trying its very hardest to delay any full-on confrontation with bondholders until after the April coronation of Studmuffin. BT, Kueffner is proof that Bloomie does have decent reporters..I tend to forget that sometimes.

Reuters on Argentine futbol. There's a big thing going on about Riquelme's decision to sulk in a corner. I'm happy that he's excluded himself from the side as we have a chance of winning the World Cup now (yeah...we).

Peru gov't getting in on the bailout act. Doe Run (those very polluting smelter owners East of Lima) have a serious cash crisis and the Twobreakfasts gov't is rushing to help. Doe Run has already laid off 1,100 workers at La Oroya....but don't let that worry you...move along now...nothing to see here....let's check those GDP figures again, yeah?

Trading Post (financial junkies edition)


In the WSJ today, some old dude called Alan Greenspan said that the Fed didn't cause the housing boom. He went on to explain that if you suddenly supply people with a very, very large quantity of cheap narcotic drugs as well as the syringes, cigarette papers and all the other paraphernalia needed as delivery systems, and THEN take away the social stigma surrounding the drugs in question, the people are to blame for becoming addicts. If you ever needed a perfect example of an emperor with no clothes check out Greenie version 2009.

Cosan (CZZ) up 8.8% at U$3.08. No gloating allowed, Timothy :-). Still holding, no selling yet.

Antares Minerals (ANM.v) up 19% at $1.10 on the back of nothing. Volumes low, so DD needed before rushing at that buy button.

Freeport (FCX) up 3.8% at $36.90 and just keeps motoring on up. The broad markets helping Freeport and PCU, too (up 3.2%). Gotta like the company.

Chariot Resources (CHD.to) up 16.7% at $0.14. It wasn't me, I promise. I don't hold this thing. Anyway it's been bumping round the 12c to 15c level for a while, so it can hardly be called a breakout. Volumes ok.

Troy Resources (TRY.to) up 2% at $1.02. I tried and missed to buy some yesterday under a buck. As a reader mailed to me yesterday, volumes are so pitiful 'it's like watching paint dry'. There's more volume in Troy over on the Aussie bourse, of course. Patience needed. DYODD, cos I'm long this one.

ECU Silver: When is 92.7m oz Silver not 92.7m oz of Silver?


Answer: When it is 20.1m ounces of silver.

Hey guess what? Some guy called Wistar mailed me yesterday and took issue with a couple of things I said about him and his deeply underwater pump vehicle, ECU Silver (ECU.to). I won't go into detail about the mail exchange as it is private correspondence, but suffice to say that he invited me to place my lips on a certain part of his anatomy so you can probably guess the general thrust of his missives.

You know that phrase "red rag to a bull"? Well I'm that bull*. So I've been checking out ECU.to and Wistar more deeply since yesterday, and OH WHAT FUN THIS LITTLE WONKY OTTO HAS HAD! Now I could go into a looooong long-winded takedown of Wistar (quite frankly it would be very easy) but better that we get to the grain of things and see what kind of company this ECU Silver really is.

The most fun of all can be had by checking out its latest 43-101 compliant technical reports. I mean, these are really special reads. Produced by Micon (it's a homophone, probably) they have all the usual disclaimers about how resources can't be relied upon and ECU has no reserves as yet (something Wistar seems not to have captured in his 29 years of suck...SORRY!...of client advisory). But once Micon has disclaimed its own way out of trouble it uses the resource assumptions tables that ECU kindly provided. You'll see why this is important in a minute.

For example, go have a look for yourself (here's the link, but it's a 5mb download) at the 43-101 for the San Diego end of their Mexico gig, which is three concessions collective named Velardeña. San Diego is important because ECU Silver tells the world that it has a total inferred resource of 391 million ounces of silver equivalent. As San Diego contributes 214 million ounces of that total, it's a lion's share lump of the whole game.

Did you notice that word "equivalent", by the way? Yeah, that means that not all those ounces are really silver, but are made up of other metals. In fact, here's how ECU Silver stacks the metals up to 214m oz Ag Eq:

Gold 93,000 oz
Silver 76.47m oz
Lead 876.452m lbs
Zinc 1,046.725m lbs

Well ok, that's all well and good. But once you look at a couple of other tables provided in the 43-101 report, things start to get rather suspicious. Firstly, the pricing table. At San Diego ECU.to prices gold at $775/oz, silver at $14/oz, lead at 90c/lb and zinc at at a whopping $1.28/lb! This means that ECU.to assumes that for every 10.93lbs of zinc it owns one ounce of silver.

14 /1.28 = 10.93

Now go look at current prices for Zinc and Silver. Zinc stands at 52c or so and Silver at $13 or so. So the real ratio should be:

13/0.52 = 25

Yeah, you got it. ECU.to should be saying to you "for every 25lbs of zinc we have one ounce of silver". But no! It's trying to tell you that its zinc is "worth" over double the amount that market prices dictate.

So if we go back to that 1,046 million pounds of inferred zinc resource again:

1,046.725m /10.93 = 92.7m ounces of inferred silver (what they want you to believe)
1,046.725m /25 = 41.87m ounces of inferred silver (something closer to reality)

See the slight difference? Well that's not even half the story, folks! The other half is that nearly all that inferred Zinc is hosted in sulphide rock, and the recovery rate as estimated by ECU.to and confirmed by Micon in the 43-101 is 48%. So the actual amount of zinc that can be extracted from the resource is less than half the contained amount!

41.87m oz /48% = 20.1m ounces of inferred silver.

Look, people, I've chosen just one of the metals from one of the three projects that makes up the Velardeña concessions owned by ECU.to and shown you that when they say "92.7m" the reality is more like "20.1m", AND I'VE USED THEIR OWN FIGURES!

I could go on and on, for example running the same calculation techniques lops off another 38m oz or so of Ag Eq from the inferred Lead resource. I haven't even started on the other two sections that make up the entirety of Velardeña and already 110m oz of silver has disappeared into a puff of reality. And remember that all this time we're talking about an inferred resource, something much less reliable than the still unreliable M+I resources that ECU.to has outlined at the project. There are no economic reserves there whatsoever! However that doesn't stop a charlatan such as Wistar from trying to comment on my blog yesterday (and I quote):

" ....you failed to acknowledge the fact that ECU has 431 million ounces of silver equivalent...."

I failed to acknowledge it because it's a total crock, Wistar W. Holt! What kind of mental blockage or pumphouse attitude do you have that allows you go jump from an inferred resource to "ECU has" anyway? And then check the math above afterwards, because I've already lopped off over a hundred million ounces of that Ag Eq without even trying hard. Not. Even. Breaking. Sweat.

Now you know what to look for you can do the rest of the DD yourself, kind reader. Meanwhile, IKN reiterates its call on ECU.to: Don't buy it, don't sell it, don't short it, just avoid it like the plague.

Disclosure: I've never traded the stock neither long nor short and I never will. I won't be using Wistar's investment advisory service, either.

*horoscope sign is taurus, as a matter of fact

In one simple phrase...

The face of agendas past or future? YOU BE THE JUDGE!

.....Peter Hakim, economist* and president of Washington's Inter-American Dialogue explains to the world exactly why the Bush regime was so hated by Latin America. The subject is next month's Summit of the Americas (you'll be hearing a lot about this little gathering for sure, and the word association with Cuba will become intensely boring). Hakim dixit:

"He (Obama) shouldn't simply say what the United States is going to do, he should say what he expects Latin America to do."

No further comment necessary.

*aka dumbass in a suit

News roundup

Ask any Argentine about "placas de Cronica": A national institution

In Argentina, Interior Minister Anibal Fernández responds to the recent media circus cooked up by TV stars (TVland holds the people who truly set the the agenda in the land of estilo no sustancia) and says that Argentina "is the safest country in the region". IKN agrees, but also assumes that Fernández is referring to the region East of Chile and South of Bolivia/Paraguay/Brazil/Uruguay.

In Peru, the nation's inferiority complex with Chile is a generous and unending source of political capital for its pathetic and vomitworthy ruling class. The Toledo gov't (pre-Twobreakfasts) is the one that made the Free Trade Agreement with the USA happen, but now ex-PM of the Toledo era, Carlos Ferrero, says that the brand new FTA with Chile "damages the independence of Peru". Your humble correspondent is confused about this; how can you damage something that was smashed into a thousand pieces years ago?

In Brazil, Petrobras (PBR) watched the absurd trick Citigroup (C) pulled with its leaked "we're making a profit" documents and thought "hey! cool! let's do that too!". Unfortunately for PBR, unlike the anglosaxon world Brazil actually has a regulatory body that does some work occasionally and now the episode is being investigated. Market Memorandum tells you more on this link.

Chariot Resources (CHD.to): A bit of unfounded gossip

Get a haircut, scruffy

After the bell yesterday we had this press release from Chariot Resources (CHD.to) (owners of the advanced exploration-stage Marcona copper project on the coast of Peru next to the big Shougang ironworks) that stated the company was adopting a shareholder rights plan. Pretty standard stuff for two reasons:

1) The plan is designed to protect sharehodler in the event of a takeover bid by some third party.

2) It's an easy way to get a company a bit of publicity and start people thinking about possible takeovers.

The "we have adopted a rights plan" PR is trotted out by junior mining companies all over the place so this one from CHD.to, being of the totally standard cookiecutter variety, would normally have passed through my eyes and out the back of my head without registering much. After all, I don't hold the stock (though I know a guy who does and that's the disclosure, so DYODD dude).

But it reminded me about a rumour I heard a few weeks ago about the normally gold-only California scientology promo tagteam (and that's putting it as nicely as I possibly can) of Ken Gerbino and Michael Baybak. The ottobird heard some word from a normally solid and reliable source that Baybak was suddenly very interested in the Marcona district of Peru. This was kind of strange because, as noted above, these dudes have only really ever operated in the world of gold miners (as Mark Twain would have note, gold mines suit them perfectly). Because it wasn't "their metal" I kind of forgot about it after a time, though it was interesting for sure.

So maybe Baybak has his sights set on Shougang's overly cheap neighbour CHD.to, the one with a whole heap of copper? Maybe, and maybe CHD.to has got wind of whispers of the type that passed this desk back in January (I think it was). Be clear, this post is based strictly on unconfirmable rumour and should be taken as such...just passing on a bit of gossip.

DYODD, dudettes and dudes, but FWIW I do think Chariot is a smartly-run company with a very nice and undervalued copper asset. If Cu goes above $2/lb it will suddenly become an object of conversation in polite circles again. That's solid opinion, not scuttlebutt. I'll leave you with the CHD.to 12 month price chart; just another story of junior copper ouchness.


sheep


So some US politico introduces a law project that would ban all mining from the You Ess of Ay. Manna from heaven for Jim Sinclair and the other wingnut shillers, but please.....gimme a break on this....are you honestly even thinking about considering to take this one seriously?

The USA couldn't push through its silly attempt to raise royalties to 8% or something last year. How the devil will it do a full nuclear on the mean, nasty miners and stop them working altogether? The ban 'em all brigade couldn't even cut the mustard in Ecuador, which was really its best chance ever. Look, it's quite amusing that you guys up there have a system which allows a single politician to throw these madcap ideas into the machine and get him or herself a bit of publicity, but really, that's as far as we go on this. Can we leave this to Mr. Sinclair and his flock now, please?

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

...sugar, the ongoing saga.

I'm happy with Cosan (CZZ) so far but watching the underlying commodity closely. Nothing else to say. Just keeping an eye on the jewels.

3/11/09

No green muffins

Any loophole will do.


Let's face it, an NGO that goes by the name of "Accion Ecologica" (AE) (Ecological Action) isn't likely to be mainly fighting for health causes in the first place, is it? But that's the way it was registered with the Government of Ecuador...until today that is. The Ministry of Health this week revoked AE's licence to work inside Ecuador because, according to Health Minister Caroline Chang, "it was not working in the field of health but in that of the environment."

AE is one of nine NGOs that have been suspended from its registration with the Health Ministry in the last twelve months for the same "not health workers" reasons (six last year, three this month), so there must have been a good reason why these NGOs used the Health Ministy to get their permits. Some kind of easy paperwork or loophole, probably. But AE is certainly the highest profile NGO to have had their permits suspended. It's been front'n'centre in the social protests against the now-active mining laws and is part of the group that Correa railed against when he repeatedly spoke of ecological extremists last year.

And now it is no more in Ecuador, at the same time as the new mining law goes active and President Studmuffin is romancing Canadian bizpeople investments in his country. Strange coincidence that, innit? Of course, HealthMin Chang said that,"there is no interest in prejudicing any organization, including Accion Ecologica. Because of this its NGO file has been sent to the Environment Ministry and that Ministry will approve its people" but if you can't smell the BS eminating from that statement you need to take a couple more of those cold cure tablets you've been on recently.

Your humble correspondent, for one, knows just how long paperwork can take to get through a LatAm government ministry, especially when it suits them to "make absolutely sure that all the papers are in order". I get the feeling that AE is about to find out all about this lack of dynamism in the next few days...or weeks...or maybe months....

Allen Stanford on 20% commission


That's what "taking the 5th" means, right?

Right?

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Billionaire Stanford to take the 5th

DALLAS (AP) -- Texas billionaire R. Allen Stanford and one of his top officials have asserted their Fifth Amendment right against self-incrimination in the federal government's fraud case against them and Stanford's companies, according to court documents filed Wednesday.

Stanford said he will "decline to testify, provide an accounting or produce any documents" related to the Securities and Exchange Commission's civil case, which accuses him of running a "massive Ponzi scheme."

Finance chief James M. Davis, using similar language, also asserted his right not to incriminate himself.

The documents were filed Wednesday in federal district court in Dallas, a day before a hearing in which the SEC is expected to make a case for an injunction yada yada continues here

Oh yeah, nearly forgot

Inca Kola News (that's here) turns one year old today.

My oh my, look at my humble corner of cyberspace now! Here she is all grown up...it seems like only yesterday that she was crawling around on all fours and popping any old thing in her mouth.

A bit like Monica Lewinsky, really. Anyway, happy 1st birthday, my little blog.

Trading Post (mine that market edition)


Dorato Resources (DRI.v) down 3.7% at $0.52. Our merry band of shareholder-miners today shocked nobody by asking for another $5m in a dilutive placement that adds 10m shares to the outstanding column and 5m to the F/D. Franco Nevada is averging down. Proceeds will go towards the next ransom fee for employees kidnapped by locals that will never allow mining to happen in Cenepa.

Fortuna Silver (FVI.v) up 6% at $0.86. FVI.v today released the final set of drilling results from its 2008 infill campaign at San José in Mexico. No unpleasant surprises in the grades or widths (at first sight, anyway), which means they were good and strong and very economic at present pricing levels for silver and gold. The next step will be to submit the enviro plans to the Mexican authorities, with us investors paying special attention as to how the water supply is proposed to be both procured and managed. I like. I own. DYODD dude.

ECU Silver (ECU.to) up 1.9% at $0.54. Message to main ECU.to pumper Wistar&Co: Yes I know you've tried to comment three times on that ECU.to note written a couple of days ago, but if you don't have the common decency to sign your posts and insist on trying to publish your slanted views anonymously you won't get any joy. House policy is crystal clear. By the way, don't you have any shame about the way you evangelized people into this dog at $2.70?

Freeport (FCX) up 3.3% at $35.28. FCX is just doing so well, result of a good mangement team that isn't afraid of telling the truth to its shareholders. CEO Adkerson gave this interview to Reuters on Monday and it's a prime example of how a head honcho should treat all concerned...with respect, basically. I don't own and I should, frankly. This company is a credit to the USA.


Goldcorp at Marlin, Guatemala


The BBC is running a report today entitled "Canadian mine accused of causing skin infections". The subject is Goldcorp's (GG) Marlin mine in Guatemala and the report contains the two photos of children you can see here. The BBC report is clearly a hit-piece, but that's not necessarily a bad thing, either. Sometimes the world needs a nasty photo and a story of mining hatred to get the real story out in the open...just ask the locals around Monterrico's Majaz /Rio Blanco project.


I'm telling you now that I'm not an expert on this mine and the ongoing controversy it has caused (today's BBC note is not new news in the enviro-world). There are always two sides to these issues and there's no way I'm going to ignore my own ignorance and rush to judgment on this. For a better idea of the story for the environmental protector's point of view (and with plenty of links) I found this post dated to 2007 that sums things up pretty concisely. As counterpoint there's a wealth of information, reports etc on Marlin and its operations (as well as the social spending projects that GG has sponsored) at this link on the GG company website.

What I will say is that those are really unpleasant photos for a father of two young girls who lives in mining country.


I'd be interested in getting a view from somebody at Goldcorp on this and I'll be writing to the company with a link to this post today.

It's never too late

An old crook

Peru provides today's WTF moment. Here's the link to the El Comercio story (has a video of the lady in question), and here comes the Ottotrans™:

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A 90 year old woman who looks like a sweet grandmother was captured in Lima when she took part in a house robbery, according to police reports today.

Fanny Marulanda went to a house that was for sale along with two other women in the Lima district of Los Olivos. The old woman's job was to distract the host with a supposed deal negotiation while the other two stole valuable objects.

On being discovered the two younger women escaped in a taxi that was waiting for them, but Marulanda couldn't get to the taxi in time and tried to escape on foot. Her age got the better of her and she was apprehended two blocks away.

At the police station Marulanda gave a false name to officers and told them that the other two women had conned her by saying they were only going for a visit. However, when Marulanda's true identity was confirmed so was her previous criminal record as a thief.

The woman was freed by police who took her age into consideration.

Antofagasta (ANTO.L): a good investment if you live in the UK

UK-listed ANTO.L compared directly to US-listed PCU, 24 month chart

The FT reports today on the 53.6c dividend that big Chilean copper company Antofagasta (ANTO.L) is paying, this despite all the sector slowdown and all the et ceteras. that you know already. ANTO.L also pointed out in its conference call that capex will remain as stated previously, U$1.7Bn for 2009. Production schedules remain on target for FY09 and FY10 (2010 includes a big boost from the new mine due online).

That's pretty good stuff, and ANTO is enjoying the benefits of sitting on the large cash pile it made in the $3.50/lb to $4/lb copper period just finished. If you live in the UK and are looking for a defensive cyclical there are plenty of worse options out there and that above chart shows that the stock has held up well against PCU, as good a pure copper benchmark as there is.

But due to the swandive in the British Pound (GBP) things aren't so promising for dollar-based investors in ANTO.L, as this chart that compares the main London quoted stock with the US pinksheet illustrates.

Still, it's a good performance from ANTO.L in 2008, whichever way you cut it. At today's PPS of 530p, that dividend declared today offers a 7.3% yield. If you're feeling contrary and like the GBP against the USD going forward, ANTO.L certainly offers leverage and that investor-friendly dividend will give you a decent amount of downside protection, too. DYODD.

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

...one that shows the ongoing negative opinion polls for President Klishtina of Argentina.

Not much to add, really. She's still the second most unpopular regional president, vox populi dixit. At least her positive column isn't getting any worse, I suppose, but these numbers are down from the 45% to 50% bracket she held when voted into the presidency. Doesn't bode well for her supporters in the congressional elections late this year.

3/10/09

Regarding Cocaine, The USA and Latin America

Stolen with no shame from The UK Guardian

After reading yesterday's Borev shredding of that Guardian fool Rory Carroll and his half-baked note on the cocaine trade, my thoughts returned to how the USA doesn't seem to be able to come to terms with the fact that it is a major, if not the major, piece in this whole puzzle (as that above map lifted from the Guardian report illustrates). Let's see now..... hmmmmm....U$1,700 a kilo in Colombia....hmmmm....U$30,000 a kilo in the States.... hmmmm...tellya something dudes, I'll wager you a full dollar that if Adam Smith were alive he'd be able to spot the demand motor straight away.

That the USA doesn't like hearing how it is the problem from Evo Morales is pretty obvious and even understandable (to a point). It certainly doesn't like hearing about it from Venezuela, even in the fine style that Coronel Reverol of the Venezuelan National Anti-Drugs Office quoted to the Washington Post last April:

"We're between the biggest producer of cocaine and the biggest consumer of cocaine, and we're the problem?"

But watch out, people! Nowadays there are "friendlier" voices calling the same tune, ones that will be more difficult to ignore in the weeks and months ahead. For example The Mex Files this week noted how President Felipe Calderon is quickly losing patience with his northern neighbour, along with normally conservative and establishment-loving bodies in Mexico such as the Catholic church (that packs serious political clout as well). In the words of Calderon:

"The main cause of the problems associated with organized crime is having the world's biggest (cocaine) consumer next to us"

So why can't the USA seem to see that which is blazingly obvious to the rest of us? That is to say, once the world's largest consumer of cocaine admits that it is part of the problem it can start to become part of a meaningful solution, not just some outside observer that thinks it can throw money at the problem and make it go away.

Then, bad scholar and slow on the uptake as I am, something occurred to me that must have occurred to thousands of people previously. The USA, being a cocaine addicted entity, is displaying the classic psychological symptoms of the addicted person. So to shed some light, here's a link to a nice, brief article called "Obstacles to Recovery From Addiction" by Dr. Floyd P. Garrett that seems to hit the nail on the head when it comes to the United States of America and its addiction to Colombian marching powder. Extracts here:

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The principal obstacles to recovery from any addiction are ignorance, shame, dishonesty, and personal exceptionalism..........

..........Simple ignorance of addiction and recovery, for example, is in theory easily remediable by exposure to accurate medical information on the topics – but the adjoining and interlinked "forts" of shame and dishonesty serve to limit the amount of understanding the addicted individual can acquire about his real condition. Similarly, the rectification of the dishonesty and evasiveness that is a central and necessary part of the psychology of addiction is rendered far more difficult by the co-existence of the addict's ignorance of addiction and his resulting shame about his addictive behavior........

...Personal exceptionalism makes it difficult for the addict to seek or accept help for his problems. Other people, people unlike himself, can and should receive help in overcoming their addictions – but he, precisely because of who he is, should neither need nor obtain such help. To do so would be a serious threat to his entire system of uniqueness.

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For me at least, that sums it up. We down here talk can logic and sense on the issue until blue in the face, but the US defence of ignorance will be held in place by shame (the USA knows what nationality owns the noses of the cocaine end-users) and will dishonestly evade facing up to its responsibility. As for that "personal exceptionalism", does that fit or does that fit?

So, ready to get mature on the subject?


UPDATE: The Mex Files has carried this baton further tonight. As you'd expect from RG, it's smart and insightful stuff. Here's the link.
.

Trading Post (do yourself a favour edition)


The sun is out and the sky is blue, Pandit is a hero and the Dow storms up a major bear market rally. All of this does not concern me (now I'm out of that RIO short, anyway :-).

Today is a great day, a perfect day in fact, to study the price of gold and understand what gold is and why it moves the way that it does. If you're long a bunch of miners and are hurting don't fret about that. Look at spot gold, look at the dollar, look at the US T-bonds, look at the broader markets...and think. Get all that noise and rubbish written by the permabulls out of your head...all that crap and nonsense available free of charge over at kitco. Look for yourself and think about it.

Lucas at Trend and Value understands gold, that's why I link to him.

Gary at Biiwii understands gold and holds bullion in much the same way as your humble correspondent does. That's why I link to him.

Mickey Fulp at Mercenary Geologist understands gold cos he's been helping to dig the stuff out of the ground half his life. That's why I link to him.

Permabull, to-da-moon, conspiracy theory, fiat-hating gunslinging fools that tell you to buy!buy !!buy!!! and get you 100% out of cash, then on days like this tell you "Hey, listen up my worshipping flock, it's a great day to buy this dip!!!".....those people do not understand gold. I do not link to them.

Cosan (CZZ) up 4.4% at $2.61 and making me think (erroneously) that I'm suddenly smart and can time the market after all. Down ego, down! Hollowflexible is the way forward. I hold quite a lot and I like even more.

Fortuna Silver (FVI.v) down 9.8% at $0.83 and is in the right place to buy in my opinion. So I bought a few...not many.....to add to the bunch at $0.85 the other day. Before really opening the wallet I'd like to see just how far this broad market rally takes itself. Worth remembering that FVI.v still benefits from the Zn and Pb rally even though 2/3rds of BM production is hedged until end June.

Nadagold (NG) down 7% at U$2.36 and proving that every cloud has a silver lining. I'm not short any more but that's ok...this snarky shoutout is just for the sake of justice. Hateful stock run by licenced bandits.

Troy Resources (TRY.to) refuses to break a loonie to the downside. It screams underlying strength and should be welcomed, but I'm all greedy and want some more on a downspike first.

Latin America = Safe Haven


Pachakuti! Whatever happened to you guys up there with your triple A local ratings and your surly attitudes and your "you gotta do this way you gotta do that way" way of talking to Latin America?

Today Eurekahedge reports that the only positive returns made by world hedge funds in Febraury 2009 and in 2009 to date were in...roll those drums....yes you've guessed it already...LATIN AMERICA! The future is ours, folks. Here's the paydirt section of today's Eurekahedge PR (click over there for the whole story):

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".....Latin American funds were the only ones to finish the month with decent gains (0.7%), as managers in the region were afforded opportunities with the weakening of most regional currencies against the US dollar, among other things during the month.

Index

Feb 09
Est¹

2009
Return

2008
Return





Eurekahedge North American Hedge Fund Index

-0.92

0.28

-10.44

Eurekahedge European Hedge Fund Index

-0.69

-1.67

-22.65

Eurekahedge Eastern Europe & Russia Hedge Fund Index

-1.07

-7.80

-54.22

Eurekahedge Japan Hedge Fund Index

-2.08

-3.95

-11.43

Eurekahedge Emerging Markets Hedge Fund Index

0.15

-0.38

-23.67

Eurekahedge Asian Hedge Fund Index

-0.72

-2.06

-21.01

Eurekahedge Latin American Hedge Fund Index

0.66

2.12

-3.30

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Enjoy today's bear market rally, then once you've taken some profits send them down to a safer place altogether, gringos :-).

Stop Peruvian Stupidity


It's always funny until someone gets hurt

And then it's just hilarious
Faith No More, Richochet


So today I get this comment from the a reader resident in South America (let's just say):

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Luchillo has left a new comment on your post "Peru: Does this look like a solid economy to you?": We know you don't like Peru, but unfortunately for you it's doing far better than your Bolivarian friends...

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This kind of mindset is what comes of of having too much ego, too much nationalistic pride, not enough insight and not enough basic common sense. In the world of the South American establishment-fed egoist, criticizing Peru's government means I hold an automatic hatred for the country, its people, its food, its beaches, its mountaintops. It also means I'm some pinko communist Evo-Hugo-worshipper. That's not what this is about, you silly little person.

What it's about is not believing the crap you're hypnotized with about this, that and the other. You are constantly told that Bolivia is doing badly economically and is on the verge of collapse. Look at the figures for yourself...y'know, pretend you have a brain and do it all independent like, dude... and you will see that's wrong. You're told non-stop that Bolivia is being irresponsibly managed. That's also false. Look at all the macro numbers for Bolivia in the past three years and look at its exposure to the recessionary pressures to come and if you have an idea of how macro-numbers flow you'll see that, although not perfect by any means, it's being run well, it's ready for the downturn and will get through just fine, much to the chagrin of those who think that lefties can't run countries to the lasting benefit of their people.

Meanwhile, you're told that Peru is some great white hope, is an oasis of stability and growth in a continent of fools. This is a highly misleading, dishonest and downright dangerous message that's being propagated by the Garcia government and spoonfed to a sheep-like population by its friendly media. What I am saying here is nothing to do with love for nations and peoples. What I am trying to tell you is that Peru is also in deep trouble due to this world economic crisis, but its government is being extremely irresponsible in trying to pretend that everything is fine, Peru is in good shape and the world slowdown somehow won't affect it. That's false. Get it? It's a lie! It's not true, it's bull, it's blatant, populist propaganda, it's whatever you want to call it. In fact, if you really want to betray a whole nation and leave the door open for that arch-dickhead named Ollanta Humala, what better way than to lie and fake your way through a whole government term of office and then send your whole country down the toilet just before the next presidential election?

Profess love for countries and live with hatred for others all you want, cos I don't give a damn. But don't tell me that the Garcia administration is being honest with you about the Peruvian economy and don't confuse my abhorrance for Peru's corrupt government with my feelings for the country, because they are poles apart.

Rant over.

Know when to take a loss

I just covered my RIO short at the first possible moment today (at $13.16) and lost money.

You can have a trade all mapped in your head, the functions, the logic, the cunning plan, the whole caboodle. Check those fundamentals, watch the note fading supply, draw pretty lines on a chart, wait for the right moment and make your trade. Dudettes and dudes, truly I say unto you; when the market decides to go the other way it just proves you wrong, wrong, wrong.

But the quicker you realize that you've made a mistake the better it is for your back pocket. I shorted RIO at $12.77 yesterday, so that's 40c a paper down the drain. So be it. Do you still honestly believe that you can profit from every single trade that you make? If so, let me show you round my bridge one more time...it's still on special offer.

Bottom line: A big ego will cost you money. Accept that you'll be a loser sometimes. Embrace the fact, because it comes with the territory of being a successful investor.

Brazil: No doubt about today's top regional biz story


Reuters: Brazil economy contracts 3.6% in fourth quarter

Bloomberg: Brazil Fourth-Quarter GDP Shrank 3.6%, Most on Record

AP: Brazil Growth Slows Sharply in Q4 Amid Meltdown

Plenty of other versions to choose from. Beyond the headline number that "beat" (if that's really the operative word) expectations of a -2.3% drop in the quarter (it even beat the worst estimate from the 17 economists* polled), your future-looking Otto particularly notes capex spending down 9.8%, which doesn't bode well for the next few quarters. Other notables compares to 3q08 are:
  • Industrial output down 7.4%
  • Agro output down 0.5%
  • Consumer spending down 2%
  • Service sector down 0.4%
By the way, get your information raw and not via the mediafilter by going to the relevant Brazilian gov't webpage right here. If you do you get useful charts like this one:


*aka dumbasses in suits. I think that's getting beyond question now