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3/28/09

Bolivia: This'll confuse 'em


Bolivia, that little country that booted out the US DEA people last year, has just made its (and I quote) "biggest drug bust in a decade".

All on their little lonesome ownsome, without the help of safety nets or "help" from up North, Bolivia's Special Force in the Fight Against Narcotrafficking (Fuerza Especial de Lucha Contra el Narcotráfico (FELCN)) intercepted a plane flying between the eastern Santa Cruz part of Bolivia last week and arrested the two on board. The two arrestees then took police to home base, which turns out to be a 1,000 hectare cocaine mega-processing area that is capable of making 100kg of cocaine per day.

So the FELCN, the same guys that intercepted a record 27 metric tonnes (MT) of drugs in Bolivia last year (which compares well to the 100MT estimated country production; consider Peru confiscated 29MT from an estimated 290MT of production) has just taken a potential of 36MT per year off the market and has clearly dealt a major blow the the scum that profit from the cocaine trade.

Strange how these people suddenly get put out of business after the DEA leaves, isn't it? Beats me how the world's premier drugs squad with all that technology and manpower and funding and stuff could miss a 1,000 hectare (UPDATE CORRECTION, that should read ACRES) cocaine factory all this time, then the small brown people are put in charge and the biggest freakin' bust in a decade happens.

Unless.................

South American World Cup Futbol Qualifiers


Yay!! South America lives and breathes futbol this weekend, as the World Cup qualifiers are back after their long break. All eyes will be on Maradona's first serious match in charge of the national team versus Venezuela, but there's plenty more goodstuff on offer.

Longer-term readers of this humble corner of cyberspace may remember that Otto gave himself a $100 virtual pool of cash to bet on the first phases of the tourney last year...and promptly lost it all. So I awarded myself another hundred virtual dollars...and lost them all again. So now you are clear that I TOTALLY SUCK AT SPORTS BETTING, here are the matchups and prices (supplied by UK bookmaker Ladbrokes). I'm risking fate by adding another hundred to my imaginary bankroll and I'm going to try and pick a value bet or two (be clear that I don't bet for real...I really, truly suck at this and don't waste my own cash). Here we go!

Uruguay 5/4.......Draw 9/4.......Paraguay 9/4

Argentina 1/6 ..........Draw 6/1......... Venezuela 14/1

Ecuador 16/5 ........ Draw 9/4 ............. Brazil 8/11

Colombia 8/15 ....... Draw 11/4............ Bolivia 11/2

Peru 13/8 ............Draw 23/10........ Chile 13/8



Comments: Argentina will win but the price is way too short to offer value. Uru vs Para is two good teams and a lot in play and imho way too tough to call. Colombia has been in bad form, but Bolivia away from home is a weak team too, so anything could happen in that match.

Therefore I'm going to concentrate my cash on the other two matches. Ecuador and Brazil is fancy for a draw at 9/4, basically the weaker Ecuador needs a win and the stronger Brazil doesn't and will settle for a point away from home. As for the other match, Chile at 13/8 looks a very big price to me and the best value of the weekend. Peru is a truly mediocre national side, but this time around Chile has serious designs on claiming a place at the finals in South Africa next year. Marcelo Bielsa has got the team working well and there's new, quality young blood, too.

So my bets are:

$70 on Chile to win @ 13/8 (theoretical return $183.75)
$30 on Ecuador and Brazil to draw @ 9/4 (theoretical return $97.50)

And let's see how we get on.

UPDATE: Argentina 4, Venezuela 0. And oh my stars, this guy is good:

Pictures worth more than their allotted thousand words

Simple but deeply moving photographs.

No long commentary on this post as the images speak for themselves. Thirteen photo pairs that explain better than a million words what the word dictatorship means and what it did to Argentina. Click on any photo to enlarge.

UPDATE: Thanks to kind readers, we now have two links for these wonderful photos. This one at Taringa and this one at UNESCO. Also, here's the link to the photographer Gustavo Germano's website.


Warren Buffett: The Snowball. A free book synopsis offer


Request your free copy on this link

In this summary you will learn:

  • Who Warren Buffett is
  • What his personal and business history is
  • What his investment philosophy is
  • How he became the world’s richest man
Why you should read The Snowball:
Warren Buffett is “everyman” as multibillionaire. Despite his vast wealth, he has always eschewed ostentation. He pays himself about $100,000 annually, which in today’s U.S. economy places him in the upper-middle-class. He lives in the same simple Omaha, Nebraska, house that he bought in 1958 for $31,500. He prefers an old gray suit to expensive London tailoring. In Buffett’s early days, when he was only a multimillionaire and not a multibillionaire, he walked around with holes in the soles of his shoes. To Buffett, wardrobe doesn’t matter; what matters is making money.

He is better at this pursuit than anyone else in the world. In 2008, Forbes magazine ranked him as the globe’s richest man, with a net worth of $62.3 billion. Author Alice Schroeder does a masterful job of chronicling Buffett’s improbable, inspiring life. As a former superstar research analyst, Schroeder uses her expert knowledge of finance and commerce to detail Buffett’s investment philosophy and business activities.

getAbstract praises Schroeder’s remarkable skills as a researcher and writer. Her book is packed with fascinating details and trenchant observations about the “Oracle of Omaha.” One of the best business biographies available, this book shows how the world’s greatest investor amassed the world’s greatest fortune, while staying true to his essential self.

Request your copy of the abstract here

3/27/09

Friday OT: Jacques Brel, Ces gens-là

An amazing live performance that comes with nicely translated English subtitles.



'Ces gens-là' tells the tale of a young man in love with a girl whose family disapproves of him. In the song he draws a pictures of each member of the dysfunctional family that hate him. Take 5 minutes and 29 seconds to appreciate the greatest of singers.

Trading Post (wind down week edition)


Chariot Resources (CHD.to) down 5% at $0.19. Buy this report and know all you need to know, that's an order, soulja. But seriously, thanks for the pre-orders so far (nine of you). You get the note Sunday afternoon.

Southern Copper (PCU) down 2.2% at $18.17 but PCU has had a great couple of weeks all told. Here's the 10 day chart to prove it.......

....but watch out sportsfans, as it got pumped over at sinkingalpha today. When the late arrivals starts shilling it gets my contrarian antennae a-buzzin'....buzz buzz.

Hochschild (HOC.L) up 16% at 217.75p and getting the rebound catch-up boost from the news that its striking Peruvian mines went back to work. Volumes average.

Ventana Gold (VEN.to) up 2% at $1.53 and looks like it's topping out to me. That's just me though, so DYODD dude.

Troy Resources (TRY.to) down a penny at $1.07 and not following the good action seen in the Aussie listing last night. Fair value (whatever that weird concept means these days) on the A$1.36 close would put TRY.to at C$1.16 or C$1.17, but it's all but impossible to run an arb on such a lightly traded issue. So be it.

Pele versus Maradona, round 320


Pele doesn't like Diego Maradona. This is basically because, deep down, Pele knows that Maradona was a better footballer than him. In fact Maradona is the greatest soccer player ever to walk the planet, but that's another story.

Pele is always dissing Maradona, and his usual line of attack is to question Maradona's infamous private life. And hey, it's easy to knock Diego for this as he's a arch-disaster by anyone's standards and probably lucky to be alive after all the crap he's put into his body.

So Pele had another dig at Diego last week, saying this, that and the other and in particular that, "Maradona is a negative example. He was an excellent player, but unfortunately all the world can see what he has done with his life."

So last night Maradona came back with the round-winning quote:

"He (Pele) lost his virginity with a young boy, so I don't know what a good example is."

I love Diego. ¡Que Viva El 10!

One day I'll write the long post I've promised myself I'll write that explains why Diego is the greatest, why Pele was, is and always will be an inferior player and person, and why Maradona is an important figure in the South American psyche.


UPDATE:
EG write in the comments section;

"I love him too! Even when I hate him."

Exactly, EG...exactly.

Mining PRs and the Ottotrans™: Part Five


Today's Ottotrans concerns our old favourite Petaquilla Minerals (PTQ.to), a company that beats out hundreds of strong competitors for the coveted title of "worst mining company in Latin America."

Note the translation for today's PTQ press release is simplicity itself.

This is what it says

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VANCOUVER, BRITISH COLUMBIA--(MARKET WIRE)--Mar 27, 2009 -- Petaquilla Minerals Ltd. (the "Company") is pleased to announce that it has negotiated a private placement of Convertible Senior Secured Notes of up to US$40,000,000. Each Note in the principal amount of US$1,000 is convertible into common shares at CAD$2.25 per share. The Notes will bear interest at an annual rate of fifteen percent (15%), of which the first 12 months' interest shall be prepaid in full at the time of issuance of the Note. All interest payments will be grossed up for Canadian withholding tax, if any.

The Notes will mature two years from date of issuance at 110% of the principal amount of such Notes; provided however that in the event of a change of control of the Company, the Notes shall be immediately due and payable. The Company shall have the right to prepay the Notes at any time for an amount equal to 110% of the principal amount of such Notes and accrued and unpaid interest on the principal amount of the Notes (it being understood that any and all prepaid interest shall be forfeited as a penalty).

The indebtedness represented by the Notes will be senior to all other indebtedness of the Company and will rank pari passu with the previously issued senior secured notes.

In connection with this offering, subject to regulatory approval, the Company has agreed to reduce the exercise price of 23,836,800 warrants from CAD$2.30 per share to CAD$0.65 per share provided that under the revised terms, if the common shares of the Company trade at a weighted average trading price of CAD$1.00 or more per share for 30 consecutive trading days, the holders of the warrants must exercise the warrants within 30 days.

The Offering is conditional upon, among other things, the Company obtaining all necessary regulatory and TSX approvals.

The Company will pay the placement agent upon closing of the financing, a 5% cash commission on the gross proceeds raised by the agent on the offering.

Holders of the previously issued Series 1, Series B and Series C notes are being offered the opportunity to exchange amounts due upon maturity of their existing notes and participate pro rata in the Convertible Senior Secured Notes offering up to a maximum of US$24,187,083. The remaining proceeds of the private placement will be used for the continued commissioning of the Molejon Gold Project located in Panama and for working capital.

The offered securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or applicable state securities laws, and may not be offered or sold within the United States, absent registration thereunder or in transactions exempt from such registration requirements.

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And this is what it means

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VANCOUVER, BRITISH COLUMBIA--(MARKET WIRE)--Mar 27, 2009 -- Petaquilla Minerals Ltd. (the "Company") is pleased to announce that Richard Fifer has just loaned his own company $40m at 15% per annum interest with a whole bunch of shares as the kicker, thus screwing the few shareholders that the company has left even further. Fifer has loaned his own company "working capital" because nobody in their right mind would touch the thing with sixpence, let alone a seven figure sum.

The end. Mojitos served.

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Previous Ottotrans™ episodes available here

Yves Smith crucifies Alan Greenspan

Yep, off my beaten LatAm track for sure and all this post really does is to pass on a must-read link.

But it is must-read. Greenspan stood up and tried to defend himself today in the London Financial Times. Nearly all of us know he deserves to be knocked off his perch as the intellectual author of the clusterf we're going through, but Yves Smith of Naked Capitalism does it better than the rest.

100% agreed, Yves, I doff my cap. Magnificent rant backed up by a whole dose of smarts. Greenspan deserves every single word. Link here, so use it.

Lula

So if you haven't read that Brazil's Lula Da Silva blames the whole financial crisis on you blue-eyed whiteys up there, here's the link to the original FT piece written by Johnathan Wheatley.

And here's the moneyline:

"This crisis was caused by the irrational behaviour of white people with blue eyes, who before the crisis appeared to know everything and now demonstrate that they know nothing."

The bottom line is that he's right. Live with it.

So enjoy your G20 bunfest, begin to think about the fact there's a whole section of the planet you never consider that is really pissed with you guys and owes you nothing. Also reflect what it feels like to be on the receiving end of some racism for a change.

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

.....S&P short interest.

Oh, look, that's quite high, isn't it?

3/26/09

Venezuela's parallel rate and drug money laundering

Check out the Devil's Excrement on this esp the comments section on his latest post, as MO scooped the world last night by hearing of frozen parallel dollar accounts. What happened after that was a guy living in Florida, one Rama K. Vyalasu, was indicted on charges of money laundering that have clear connections to the Venezuelan parallel market as well as wire transfers inside the USA (read the indictment here).

One of the consequences of all this action is that the normal parallel market has been virtually closed down all day, with the ask shooting to VEF7 on the uncertainty (bid staying around 6...big big spread). It remains to be seen whether Venezuela gets a normal parallel market tomorrow or whether there will be further moves by US authorities against the presumed drug money laundering ring.

By the way, great scoop, MO. I read you last night after finishing some writing here and thought it interesting, then promptly forgot about it today. Good stuff, kudos to you, and blogs showing the way yet again.

Argentine Humour

This one isn't for everyone. Knowledge of Spanish and of Argentina both vital here, but it's too good to miss this week.

'Revista Barcelona' is the Argentine version of maybe The Onion in the States or maybe Private Eye for you UK viewers. But it's different to both, too. What it does have in common is sharp satirical humour aimed at its local politicos. This is the cover of this week's issue that hits the Argentine newsstands tomorrow and features the leaders of the farmers associations mashed with local youth culture fashion. As long as you know what you're looking at, it's hilarious.

UPDATE: More Argentine visual humour tonight, but from a different source. The website of the Kirchner's FpV party was hacked and images and messages left behind, including this one.

Again Spanish is needed, but this time the picture speaks for itself. This one is of 'Patota' Moreno, loyal Kirchnerite and head of the ridiculed Argentine Stats office INDEC that insists Argentina's GDP is growing and there's no inflation.


Doe Run Peru: The truth will out

Reuters knocks one straight out the park. Here's the link and below is the story.

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Doe Run Peru faces renewed environmental criticism

Thu Mar 26, 2009 3:43pm EDT

LIMA, March 26 (Reuters) - With Doe Run Peru nearly shuttered amid sliding metals prices and tight credit, a Peruvian environmental group has released a new study saying the company dragged its feet on cleaning up the town around its smelter in La Oroya.

The company halted 95 percent of work this week at its sprawling plant after banks cut its credit lines, strangling its ability to buy concentrates.

The government is weighing whether to give Doe Run a $75 million bailout to save thousands of jobs. The government is also mulling whether to grant it an extension to meet terms of an environmental cleanup plan for La Oroya, long ranked as one of the world's most polluted cities.

"It's dirtier now than it was before," said Corey Laplante, a U.S. Fulbright scholar at the Peruvian Society for Environmental Law who led the study.

"If the government is going to give this bailout, it needs to attach a number of conditions: more transparent financial reporting, stronger public-participation mechanisms and stricter air-quality standards," he told Reuters.

Doe Run says it has been lowering emissions of polluting metals since it bought the smelter in 1997 from an old state-run company.

But Laplante says official data shows pollution has risen over a longer time frame, going back to 1995.

Using information from the Sindicato station that monitors lead in the air, Doe Run has said pollution fell 77 percent between 1997 and 2008.

Laplante says using 1997 as a baseline is misleading because pollution spiked that year, making pollution in subsequent years look low. When 1995 is used as the baseline, pollution at the station actually rose 6 percent through 2008, he said.

Victor Andres Belaunde, a Doe Run official, said data collected before 1997 may not be reliable, and the company cannot use data collected before it owned the smelter in its environmental compliance program.

When Doe Run bought the smelter -- which produces copper, zinc, lead and precious metals -- it was told it would need to spend little a more than $100 million to bring La Oroya into environmental compliance and solve a public health problem.

So far, Doe Run says it has spent $307 million, and that the total cost will end up being $500 million.

The compliance program still has not been completed. Initially, it was expected to take 10 years, but in 2006, the company got a three-year extension and now the government is being asked to grant another one.

Doe Run says the clean up job has turned out to be bigger than it thought.

Critics say it is stalling and that the company's owner, New York billionaire Ira Rennert of the Renco Group, has the money to accelerate the clean up.

But Peru has prohibited Rennert from taking profits out of Doe Run until the environmental program is complete. Now that work has halted at the plant, the future of a cleanup that was being financed by cashflows hangs in the balance.

Evo 1, Alan 0

Still laughing, lardass?

Something's gonna give under this pressure
and the cracks are already beginning to show
Bitter Suite, Marillion, 1985

The recent round of very strange
things coming from the mouth of President Twobreakfasts makes me wonder whether the dude has been on a medication vacation, but he's now reaping that which he sowed. As well as telling rich bankerfest that he had the power veto the next president if he so chose (and that he'd already proven his powers), and being rounded on by every single politico and media channel in Peru (including the normally Prozacked El Comercio, it was that widespread) he also mused yesterday that, as part of the ongoing (and rather boring...that's why I've not mentioned it here) spat about the maritime border with Chile that Bolivia "had long ago given up its claim of a coastal passage" (or words to that effect).

This, of course, is complete balderdash. Anyone down these parts not on medication this last three years (geddit?!?!) will know that Chile and Bolivia have held several non-state level talks on the subject and that certain progess has been made. So with Twobreakfasts leaving his door wide open for ridicule (once again) Dr. Evo Morales took full advantage. This is a quote to remember, as put through the Ottotrans™. Evo dixit:

"With much respect to the Peruvian people, I want to say that maybe President Alan García is being affected by his obesity and is not well-informed. Bolivia will never renounce its return to sea sovereignty."

Nuff said.

Trading Post (sniffing round edition)


Troy Resources (TRY.to) up 9.9% at $1.11 and exactly matching the Aussie stock's closing price last night. It's all good. The vendor of the Casposo property, Intrepid mines (IAU.to) is enjoying a real pop today. Up 19% at $0.28 on triple avg volumes, the world is liking the fact that this cash starved minnow is cash starved no longer. All in all, a win-win-win deal. Good to report.

Exeter Resources (XRA) up 7.6% at U$3.52. Volveré y seré millones. I've mentally pencilled in U$4 to let the games begin, but it will all depend on the action at the time.

Argentina's Merval index (MERV) up 2.33% at 1,158. The word on the street is that the Argy Central Bank will sell dollars to keep the Peso from dropping before the upcoming elections. Hmmm... I dunno 'bout dat but conspiracy theorists will enjoy the tidbit. Best of a bad bunch (if you insist on having some Arg exposure in that portfolio) is Telecom Argentina, available as TEO on the US ADRs list. Nicely run company that is still growing and still making a profit...just a pity about its geography.

Amerigo Resources (ARG.to) down 2.8% at $0.34. This sold off heavily yesterday due to its big reported YE loss, but it really wasn't all that bad, considering. I liked the fact that ARG.to has written down its investments in DNT.to and LA.v (that was $18m) as that now provides a clean slate and potential upside in the junior copper world. The recent placements were very dilutive for sure, but they got a strong hand in as a shareholder (RB) and now have money to get through 2009. With copper at its current $1.83/lb now they'll have stopped the total fracture of money and are likely close to breakeven right now. Sure it's cheap, but there are worse out there. Mgmt very likeable, and that counts for a lot these days. DYODD.

Inca Pacific (IPR.v) up 20% at $0.35. There it is again, upping on decent volume and no news. It's been like this since Sprott sold its large chunk the other day. I have no idea what's going on there, but that countdown clock on Magistral is still ticking the last time I looked.

Chariot Resources (CHD.to): A new NOBS report for sale

This is a pitch to try and sell you a copy of a new NOBS report that features Chariot Resources (CHD.to). However, to try and confuse you, we begin by mentioning a different company to the real main event.

I've been watching the progress made by Antares Minerals (ANM.v) recently. Today it's trading at $1.68, and with around 54m shares out that means it has a market cap of C$90m. That's pretty good. For sure it has cash at bank ($21m at Oct31 '08) and for sure the recent resource report makes for very prospective reading. It's in Peru, drilling great copper returns, it's got smart management, it's deserving of its success so far. All in all the company is doing well and I wish them good luck and godspeed.

But ANM.v also made reflect just how some stocks become fashionable and how others are somewhat forgotten, even ones in the same sector and in the same country that are much further along in the development track and offer real value. And so I'm writing up a NOBS reprot on Peruvian junior copper play Chariot Resources (CHD.to) that will be delivered to anyone who stumps up the royal booty of ten US dollars between now and the Sunday evening delivery date. It's the same system as in previous offers, folks. All you need to do is use your PayPal account to send U$10 to...

otto.rock1 (at) gmail.com

....(replacing the (at) with an @) and your copy gets sent in plenty of time before the bell on Monday morning. If you prefer, you can use this U$10 pre-set button below (that takes all the usual credit cards, too). And to make it as straight a deal as possible, once again I declare that I do not own CHD.to and will not buy into it until anyone who orders a copy of the report has their own opportunity to decide on the investment (i.e. I won't go near the thing until next Wednesday mimino).





Your humble correspondent believes that CHD.to offers good value right now if (and I repeat "if") you think that copper is looking strong and will stay that way. The point here is the relative value of a market laggard compared to peer stocks grabbing the limelight. If ANM.v isn't a flash in the pan and the whole sector is about to enjoy a decent rebound, then companies such as CHD.to are the place to look, methinks.

So order your copy of this NOBS report on CHD.to today and be wise about the company for next week. To wrap up, here's a comparative chart of CHD and ANM to point the way.


Corriente (CTQ.to): The difference between rumours started by CFAs and rumours started by anyone else is.....

....that there is no difference.

Remember back on March 11th and 12th when Corriente Resources (CTQ.to) (ETQ) ran up on big volumes? Then remember on March 13th when Desjardins announced that takeover talks between CTQ.to and its 'mystery buyer' (whose name starts with a T, ends with a G and has onglin in the middle...apart from that we know nothing) were well advanced and how the sale would go through in the next two to three weeks?

Well last night we had this from the company:

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Mar 25, 2009 -- Corriente Resources Inc. wishes to advise that, contrary to recent media reports, there are no material developments to disclose regarding ongoing exclusive negotiations for the potential sale of the company that were announced on December 16, 2008.
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And today we have the stock down 6.15% on 350k traded. The big day (and probably the reason why Desjardins started the rumour in the first place) is that the mystery buyer has an exclusivity deal up to and including March 31st, after which the deal is likely to lapse.

And you guys still believe these clowns-in-suits after all they've done to you. I know the saying goes "Fool me once shame on you. fool me twice shame on me", but how does it work for "fool me 100 times"?

Ventana Gold (VEN.to) halted before the bell

Today's Spanish lesson: Ventana = Window

Ventana Gold (VEN.to) is the early stage gold thingy in Colombia that's next to Greystar, if you recall. IKN has mentioned the stock a few times (see 'related posts' underneath) so you should at least know that the drill results have been very smart so far.

I've no idea what's about to be announced by the company, but I'd bet 10 loonies to a poke in the eye with a pointed stick that it's a financing. After all the stock has done this recently.....


........and Canada being Canada, these no point in letting people enjoy a good run-up in a stock price without da boyz getting a share, n'est pas?

Disclosure: I don't own. DYODD, dude.

UPDATE 9:40am: Here's today's news. Well, it looks like I'm in for a poke in the eye. It's drill results. For the record I called 'take profits' on this stock a few days ago and I'm happy to stick with that call, no matter what the thing does in the next couple of days. Da boyz are circling, methinks.

Related Posts
Ventana Got Gold
Ventana Gold (VEN.to): How placements can be done to benefit all concerned
Ventana Gold and the blueprint of a successful young miner

Your tax dollars at work

Chris Bendsen (for it is he)

In the wee small hours of Tuesday (04:10 to be exact), the US Consul General in Chile, a certain Chris Bendsen, managed to fall asleep at the wheel of his car and do this to the front end after a rapid stop against a wall in a posh corner of downtown Santiago.


He admitted to officers that arrived at the scene that he'd "had a little to drink" but then played the diplomatic immunity card and refused the mandatory alcohol breath test. He was then taken along to the local police station where he claimed full diplomatic immunity and was released under no charges a couple of hours later....out of a side door....to avoid the press corps that had gathered by then.

Good to know that the US reputation in Latin America is being held to its normal standards, no?

UPDATE: Sadly, I've been informed that the following photo is of the Bendsen's ride..not nearly as bad as he deserves.

Charts of the day are....

........WTI crude oil futures. This seven day chart (well, 90 min candle in fact) shows that the upward channel is looking pretty darned bullish for crude.

However, it's worth checking the long term monthly candle chart (year 2000 to date) to remember that bullish channels only work until they don't.

DYODD

3/25/09

Change we can believe in (in LatAm at least)

Oh wowsers, are we pleased that Dubya is done with. Hillary's words before landing in Mexico today might not be absolutely perfect, but my stars they're a light year closer to the truth than the principle of denial that we've suffered for (at least) eight years. Let us only Hope™ that it's not just lip-service being paid. From Reuters tonight:

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"Our insatiable demand for illegal drugs fuels the drug trade. Our inability to prevent weapons from being illegally smuggled across the border to arm these criminals causes the death of police officers, soldiers and civilians," Clinton told reporters during her flight to Mexico City.

"I feel very strongly we have a co-responsibility."

FULL REPORT HERE


Troy Resources (TRY.to) (TRY.ax) News

Map from Intrepid Mining website

Troy Resources today announced it was paying U$20m (straight from the kitty) to buy the 'Casposo' deposit in the San Juan region of Argentina from Australian miner Intrepid Mines (IAU.ax) (IAU.to). Looks like a good deal to me. TRY has had a full production facility in mothballs for some time and has made no secret of the fact that it's been looking for a place to put it, with an ideal deposit grading 3g to 4g/t Au. That's what they've found in Casposo.

Check out the paste of the PR below, but you'll note an envisaged six year mine life for 338k oz Ag (including inferred) and 9m oz Ag (incl inferred), so via memory and quick ballpark numbers, your humble correspondent expects Troy expects to run its mothballed plant basically at optimum speed, as 60k oz Au per year with silver credits sounds just right (note more gold than silver production expected to begin with, with the mix changing in the later years). Also, notably most of the gold deposit is already in the probable reserves column...that's positive. As for the U$20m pricetag, if we use the totally totalled 454,900oz Au Eq number (below) that comes out of the Casio at U$44/oz. That works.

Importantly, very importantly in fact, please note that San Juan Argentina is very much miner-friendly country. As mentioned several times on this blog in previous posts, Argentina can be pro or anti mining, the key being the provincial level of government, not the national or local township levels. San Juan is a province that welcomes mining and has a long history of mining activity. It is the province that is home to the Argentine side of Barrick's contentious Pascua Lama gold project, but as Casposo is just 700masl and the polemic Pascua Lama is over 4000masl up the circumstances are very different. Add to the mix that the deposit is low sulphide and (although I'm assuming somewhat) is unlikely to need use of cyanide to extract the gold (UPDATE Thurs AM: after a lesson in metallurgy from those who know this rock better than I, it seems my assumption was wrong. The likely solution is a cyanide circuit. Thanks due to the person kind enough to un-ignoramus me). Make no mistake, Troy is in pro-mining country.

This type of small deposit is tailor-made for Troy, a company with a track record of bringing mines to production quickly (again, see below). It will also be able to totally fund the project from cash held at bank, so no need to get sticky in the credit markets.

Bottom line: Troy Resources, my pick of 2009, has just added investor value. DYODD, because I own (avg buy C$0.84). Right now TRY.ax (Aussie listing) is up 6.3% at A$1.285 which is C$1.106 at current forex. TRY.to closed at C$1.01 today.

Here's the PR to enjoy (I did at least).


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March 25, 2009
Troy to Acquire the Casposo Gold-Silver Deposit From Intrepid Mines Ltd
PERTH, WESTERN AUSTRALIA--(Marketwire - March 25, 2009) - Troy Resources NL ("Troy") (TSX:TRY)(ASX:TRY) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Highlights

- Troy has reached agreement to buy the Casposo gold-silver deposit in San Juan province of Argentina from Intrepid Mines Ltd ("Intrepid").

- The acquisition price is US$20 million on closing and US$2m on the 6th month anniversary of first production. Troy will fund the acquisition from cash reserves.

- Troy will look to fast track the mine development utilising the gold plant it holds in storage in New South Wales, Australia.

Troy Resources NL ("Troy") announces it has reached agreement with Intrepid to acquire its 100% interest in the Casposo deposit in San Juan Province in Argentina (to see Figure #1 please click on: http://media3.marketwire.com/docs/try325.jpg). Troy will fund the acquisition out of cash reserves. Completion of the acquisition is subject to receipt of any consent or approval under any law or regulation affecting the parties and to completion of a reorganisation of certain subsidiaries of Intrepid not intended to be included in the acquisition. Completion is also subject to the parties settling a definitive acquisition agreement on usual commercial terms.

Commenting on the result, Troy CEO, Paul Benson, said: "This is an exciting acquisition for Troy. Casposo is an excellent deposit and Intrepid have done a great job exploring and proving up the resource. We see this as tailor made for Troy as we can use our in-house expertise to bring the mine into production quickly. Our aim is to minimise capital and time to first production by utilising an existing gold plant we hold in storage. Ken Nilsson who has built and operated all of Troy's mines will take responsibility for Casposo."

"The March 2007 feasibility study completed by Intrepid envisaged a 6 year mine life with the first 4 years being fed by a gold rich open cut followed by 2 years from a silver rich underground mine. The Argentinean based Intrepid team of geologists working on the project have done an outstanding job to date and we look forward to this group joining the Troy team as employees and continuing the exploration program with the aim of adding to the resource inventory and extending the mine life."

"The province of San Juan has a very supportive attitude to mining and we look forward to working with the local regulators and communities to bring the mine into production as soon as possible."

Troy has a track record of building mines quickly, efficiently and at low cost and this will be Troy's third mine in South America. In 2002 Troy acquired its first mine, Sertao, as an in-situ resource and quickly sourced an appropriately sized second-hand plant in Australia that was refurbished and transported to Brazil. In addition, Troy completed an infill drilling program which increased reserves whilst awaiting shipping. Time from acquisition to first production was just 14 months with an initial capital of just US$8m. Plant construction including earth works took approximately 6 months.

Andorinhas, Troy's second Brazilian operation was acquired as an in-situ resource in November 2006 and developed by relocating the mill and plant from Sertao. As additional milling capacity was required, a second-hand mill was sourced from Western Australia. Following the acquisition Troy converted the resource to reserve status, constructed the processing facility and developed the open cut mine and poured first gold in March of 2008, sixteen months from acquisition to first production with an initial capital cost of just US$16m. In mid 2007, Troy commenced development of the high grade Mamao underground mine which is now ramping up to full production.

With Casposo we will look to similarly fast track development to bring it into production as quickly as possible and expect to utilise some or all of the gold plant we have in storage in Cobar, New South Wales to lower the capital cost and time of the mine development.

The Casposo project is subject to royalties payable to the original owners of the property of US$6 per gold equivalent ounce on the first 450,000 gold ounces (less royalties already paid totalling up to US$900,000) and a royalty of US$5.00 per gold equivalent ounce for each ounce of gold produced in excess of 450,000 ounces.

Casposo is a typical Low Sulphidation epithermal style gold-silver deposit where mineralisation is hosted within rhyolite breccias and andesite. Veins are typically banded quartz-chalcedony colloform - crustiform banded with quartz - carbonate infill. Mineralisation is associated with an assemblage consisting of quartz, chalcedony, adularia, calcite, illite, sericite and trace sulphides. Gold and silver occur as electrum, native silver, sulfosalts and silver sulphides.

Mineralisation at Casposo occurs along a 10 kilometre long west-northwest-east-southeast (N60 degrees W) regional structural corridor, with the main Kamila Vein system forming a sigmoidal set 500 metres long near the centre. The main structural corridor consists of 2 parallel vein sets dipping to the southwest at -60 degrees to -65 degrees (B Vein & Inca Veins). A secondary mineralised trend comprises multiple north-south striking sigmoidal structures that dip to the west at -65 degrees (Aztec, AF, B North & MV1 - Mercado Veins). Ore shoots are typically lenticular bodies up to 200 metres in length and up to 15 metres wide.

Work completed included surface sampling and geological mapping, trenching and pitting, detailed trench sampling of the vein systems, reverse circulation and diamond core drilling, an airborne magnetic survey, ground gradient-array induced polarization (IP) and pole-dipole IP surveys as well as bulk sampling for metallurgical studies. A feasibility study, commissioned in 2005, was competed in March, 2007.

The latest Casposo Resource estimate was completed in July 2008 by AMEC International Chile. Open pit resources were contained within a Whittle pit shell using a gold price of US$760/oz. Resources below this were classified as underground resources with a cut-off grade of 3.5g/t Aueq. Grade interpolation techniques were inverse distance weighted.

The Casposo project is subject to royalties payable to the original owners of the property of US$6 per gold equivalent ounce on the first 450,000 gold ounces (less royalties already paid totalling up to US$900,000) and a royalty of US$5.00 per gold equivalent ounce for each ounce of gold produced in excess of 450,000 ounces.

Table #1 Casposo Resources and Reserves
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CASPOSO MINERAL RESOURCES
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Gold Silver Gold Gold
grade grade equivalent Gold Silver equivalent
Tonnes (g/t) (g/t) grade (g/t) Ounces Ounces ounces
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Open pit
Indicated 1,882,400 5.39 130 7.05 326,000 7,854,100 426,900
Inferred 15,800 5.61 137 7.38 2,800 69,900 3,700
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Underground
Indicated 193,800 1.97 196 4.49 12,200 1,223,200 28,000
Inferred 8,800 2.43 294 6.21 700 83,000 1,700
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TOTAL
Indicated 2,076,200 5.07 136 6.81 338,200 9,077,300 454,900
Inferred 24,600 4.47 193 6.96 3,500 152,900 5,400
--------------------------------------------------------------------------


--------------------------------------------------------------------------
CASPOSO MINERAL RESERVES
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Gold Silver Gold Gold
grade grade equivalent Gold Silver equivalent
Tonnes (g/t) (g/t) grade (g/t) Ounces Ounces ounces
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Open pit
Probable 1,399,000 5.44 96.05 6.80 244,600 4,320,300 305,900
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Underground
Probable 335,000 3.99 220.5 7.11 43,000 2,375,200 76,600
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--------------------------------------------------------------------------
TOTAL
Probable 1,734,000 5.16 120.1 6.86 287,600 6,695,500 382,500
--------------------------------------------------------------------------

Notes:

1. Mineral Resources are estimated using a US$760/oz gold price and US$13/oz silver price. An economic function that includes operating costs, metallurgical recoveries and royalty costs has been applied.

2. Rounding as required by reporting guidelines may result in apparent differences between tonnes, grade and contained metal content.

3. Tonnage and grade measurements are in metric units. Gold ounces are reported as troy ounces.

4. All Mineral Reserves are reported in the Probable category

5. Mineral Reserves are estimated using a gold price of US$690/oz and US$11.80/oz silver price and an economic function that includes operating costs, metallurgical recoveries and royalty costs.

6. Cut-off grades for Mineral Resources were 1.41g/t gold equivalent for open pit and 3.5g/t gold equivalent for underground. Gold equivalent grades for Mineral Resources were based on metal prices of US$760/oz gold and US$13/oz silver and processing recoveries of 93.7% for gold and 80.6% for silver.

7. Cut-off grades for Mineral Reserves were 1.56g/t gold equivalent for open pit and 3.5g/t gold equivalent for underground. Gold equivalent grades for Mineral Reserves were based on metal prices of US$690/oz gold and US$11.8/oz silver and processing recoveries of 93.7% for gold and 80.6% for silver.

8. The information regarding Mineral Resources and Mineral Reserves is drawn from the technical report entitled "NI 43-101 Technical Report, Intrepid Mines Limited, Casposo Project - July 2008" that was filed on September 16th 2008 by Intrepid under its profile on SEDAR at www.sedar.com.

Information of a scientific or technical nature in this news release was prepared under the supervision of Peter J. Doyle, Vice President Exploration and Business Development of Troy, a "qualified person" under National Instrument 43-101 - "Standards of Disclosure for Mineral Projects", a member of the Australasian Institute of Mining and Metallurgy. Mr. Doyle has sufficient experience, which is relevant to the style of mineralization and type of deposit under consideration, and to the activity he is undertaking, to qualify as a "competent person" as defined in the 2004 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Doyle has reviewed and approved the information contained in this press release. For further information regarding the project, including a description of the quality assurance program, quality control measures, the geology, samples collected and testing procedures in respect of the project please refer to the technical report entitled "NI 43-101 Technical Report, Intrepid Mines Limited, Casposo Project - July 2008" that was filed on SEDAR on September 16th 2008 by Intrepid Mines Limited and which is available under Intrepid's profile at www.sedar.com.

This news release contains forward-looking statements. These forward-looking statements reflect management's current beliefs based on information currently available to management and are based on what management believes to be reasonable assumptions. A number of factors could cause actual results, performance, or achievements to differ materially from the results expressed or implied in the forward looking statements. Such factors include, among others, future prices of gold, the actual results of current production, development and/or exploration activities, changes in project parameters as plans continue to be refined, variations in ore grade or recovery rates, plant and/or equipment failure and delays in obtaining governmental approvals or in the commencement of operations.

Trading Post (nobody said it was gonna be easy edition)


Cosan (CZZ) down 8% at $2.30 and hurting my trading port. Wanna hear the cuddashuddawuddas? Nah, didn't think so. However Otto's patience has a limit and to that end a stoploss has now been set. If it hits, so be it...never been afraid of taking a loss before it gets too big.

Minera Andes (MAI.to) up 4% at $0.77 and has been behaving itself in a very healthy way recently. If (big if, but it should be considered) copper continues on up, the big Argentine copper JV that MAI.to runs with Xstrata might start being considered as a positive asset.

Hochschild (HOC.L) down 10% at 182.5p in London trading today after the 2008 YE earnings report came in ....and sucked. Really, really sucked. Yes, we know that Ag went down to under $9/oz for a part of the time, but all the same....the numbers sucked. HOC.L hinted at a possible closure for its Peruvian 'Selene' mine, too, though that might be more a negotiating tactic with its presently striking Peruvian workforce than something to be taken seriously.

Dynasty (DMM.to) up 4.3% at $5.27. A silver lining for my port cloud. Volumes low.

Vena Resources (VEM.to) up 5% at $0.21, with some movement registered in German trading today, too. I'm looking you in the eye and telling you "this thing is worth more".

Merado Libre (MELI) up 11.8% at $18.84 one 3X volumes. It's a long time since I've mentioned this thing at the blog, but it's always there in the corner of my stockscreen. I just can't trade it to save my life, that's all. If you're a true bull on LatAm and particularly Brazil it's one to consider, if only for it's low debt.

UBS continues to call Mexico well

UBS delivers the real enchilada

Find linked here a UBS report dated March 25th (today) that includes the company's call on Mexico and the transcript of a very interesting conference call between four Mexico sector experts (namely UBS Mexico economist Gabriel Casillas, Latin America FX strategist Marcos Mollica, Latin America fixed income strategist Alvaro Vivanco and Mexico equity strategist Tomas Lajous). Here's an excerpt from the report to whet your appetite. It's well worth reading the rest, so use that link.

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The main conclusions (of the conference call debate) are as follows: First, this will almost certainly continue to be a very weak year for Mexican growth, although we do look for stabilization by end-year and recovery in 2010. On the other hand, despite fears of widening current account deficit and external corporate debt, the Mexican foreign financing position actually looks well-supported – and this in turn means that although we don’t expect a sharp recovery in the level of the peso, we also don’t see sharp depreciation risks from here. With the surprise 75 basis-point cut by the central bank last Friday we are no longer taking strong positions in the domestic rates market, preferring to focus on external bonds and CDS. And finally, while the equity market has already fallen to very inexpensive levels, in light of ongoing earnings risks we prefer to wait for more visibility before jumping back in to buy stocks.

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FWIW*, I think UBS has been calling Mexico really well recently and this paper just is more confirmation. There's no need to fall for all the 'failed state' idiocy propagated by those who want to see that wall finished (Fox News et al) but on the other hand the big exposure the country has to the USA (traditionally the market for 80% of all exports) means that there are real economy woes still in the pipeline, so no need to exposure yet.

*not much

Bear

Danger, soul-bearing pretentiousness coming your way.
Please tune out if investor navel-gazing annoys you.


I've been reflecting on my negativity about the market and its potential for trading/investment recently, and how that blue funk has seen me miss decent trading opportunities. I feel I've been pretty much in a negative mindset recently when it comes to investments. As far as can be seen by the myopic Otto, there are several factors in play:

One of the main problems, and it is a problem, is my natural contrarian attitude to investment and trading (and life, but that's another story). When I see the whole world get excited about fluffy, superficial announcements be they large (Geithner's plan compared to the months in store), medium (García and his lapdog media) and small (miners that rocket up due to people with questionable knowledge buying on questionable advice of people that should know better...see previous post) I'm one of those guys that automatically goes "hey!! wait a cotton pickin' minute!". This is a true weakness in my investment make-up and one that I have tried and failed to improve over the years. Put basically, why not run with the sheep for a while if it makes you money? Very true in the case of Exeter (XRC.v) (XRA) in the last few weeks, as the whole hype was clearly setting itself up. But me being me, I just can't bring myself to buy these things even though there was money there, sitting up and begging. I'd rather rant on the stock and watch it go higher. Put simply, I recognize my masochistic weakness.

Part of this (in mitigation) is that I'm not a good trader (never pretended to be, either) and I'm a better long-term investor. I've always made better coin by searching for value and holding through the beta-bumps (such as the current CZZ position) or holding through the slack periods when nothing seems to happen to my stock while all around is action and adventure (such as the current TRY.to position). Basically, being boring works for me. I play with my spreadsheets, find something undervalued, try to work out what is a fair value, buy it low and sell it when it hits the target. Sounds easy, huh? Well it's not and there are safety checks and seat-of-pants rules I've developed over the years, too, but all in all that's the basic philosophy behind my calls.

Another point about being negative on this market is that in my preferred sector, LatAm junior mining companies, even in the good bullish times the number of bad companies outweighs the number of good companies by 10:1...probably more, in fact. By way of a topical for instance, an e-mail pal sent me a mail today asking about Oroco (OCO.v). To his credit he wasn't looking for a positive on the thing because all he wanted was to get a colleague that has been boring him about the stock off his back and just asked me where to look. This is part of the mail I wrote back (including the 43-101 resource table from the OCO.v website):

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There's more metals grading in my back garden than there is in this Oroco return

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Au Ag Pb Zn
Category Tonnes (g/t) (g/t) (%) (%)

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Indicated 25,250,000 0.52 8.6 0.34 1.02
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Inferred 4,690,000 0.17 19.4 0.53 1.69

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Let's use gold at U$29/g (900/oz)
Silver at U$0.40g (13/oz)
lead at 55c/lb
zinc at 55c/lb

AND THOSE ARE GENEROUS FOR FEASIBILITY. At 100% recoveries that Oroco indicated rock is worth $15.08 + 3.44 + 1.87 + 5.61 = U$26 per metric tonne. With likely recoveries you'd have a mine that was unprofitable with gold at 1500/oz, frankly. This dog has so many fleas it would have a problem in standing up cos of the weight involved.

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Trust me, the bits of the mail I missed out weren't any more positive.

It gets boring being negative all the time. My scam alert is set permanently on red as I search junior miners (elseways I'd be bankrupt by now), I'm bearish on short-term copper, mildly bearish on short-term gold (maybe $880 if you're asking, but WTFDIK anyway?), I'm bearish on nine out of ten miners I look at, I'm bearish on LatAm's macro compared to present forecasts, etc etc.

But that's the way it is right now. In fact, that's the way it's been ever since I started this blog, as the overriding message that I'd like to get across is that of preservation of capital. We're not in a situation where you can go looking for tons of alpha. Right now it makes the most sense, boring, tedious common sense, to stay majority in cash, hold bullion with a long term view and just play the odd splash'n'dash on opportunities as they arise. In my opinion, anyway. I too look forward to the day I can write my "YES! I'm bullish!" post and go 90% bought on stocks instead of the current 40% or so (I think..need to check), but that day simply isn't here yet.

Self-absorbed post with overdose of first person now complete. Thank you for bearing with me. DYODD.

Exeter (XRA): C'mon guys, keep buying......

.......because this is setting itself up as the short of the year.

Right now it's not a case of if but when I reverse on this thing, so first job is to watch and gauge and try to guesstimate just how far this thing will travel. When a suspect asset is so overhyped by the full Canadian pump machine the opportunity is just too good to miss. DYODD, but something around the U$4 point (as mentioned yesterday) is my idea of a killer short position.

Meanwhile, I'll leave you with a music video to ponder.

Unmissable information on Doe Run Peru

Chernobyl, anyone? This bizarre mashup photo is
actually part of DRPs promo propaganda


US citizen and Fulbright Scholar Corey Laplante has been living in Peru and studying the operations at Doe Run Peru (DRP) for around eight months. He has a blog (that I recently discovered) and last night posted this article about the operational situation at DRP.

Thus the scales fall from mine eyes. All this time I fell for the DRP line. I was wrong.

This is seriously, seriously unmissable reading. Laplante shoots down in flames the company propaganda about how the place is cleaner than before. Also, this guy is not speaking from some treehugging NGO save the planet prejudiced playbook about DRP, but has done some very solid research work on the company. What he has found has made him angry. Damn I'm angry, too.

You should be angry too, when a shit like Ira Rennert takes over a company, significantly increases poisonous pollution outputs, then uses his first year at the site for his own benchmark thus later falsely claiming reductions in pollution. Here's an excerpt from Corey's post, but I strongly recommend that you read the whole thing. Here's the link to Corey's post again, just to make sure you go.

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3) You site “dramatic reductions” in contamination levels. Over the last few years Doe Run has reduced contamination. In fact, according to a graph that they sent CNN for December’s planet in Peril piece, they have reduced lead contamination by 77%. Wow. Seems impressive right? Trust me I know—I was fooled too (see some of my earlier posts)

When we look a little more closely however, we see what is really going on here. The graph that Doe Run sent to CNN compares 2008 against 1997. That is to say, they are pointing out that lead contamination is 77% lower in 2008 than it was in 1997. I confirmed the numbers with the Ministry of Energy and Mines, the reduction does, in fact amount to 77%

BUT, 1997 is the year that Doe Run came to La Oroya and dramatically increased contamination levels. They have only reduced contamination relative to when they increased it before.

If we really want to measure the changes in La Oroya—absolute changes—we need to look at the situation as it was before Doe Run came to town. Luckily, I was able to get my hands on this information. Specifically, I have the information for the same monitoring station that DRP used to derive the 77% figure—Sindicato. And when I compared 2008 against 1995 (instead of using 1997 as the baseline), I found that lead contamination at the Sindicato monitoring station did not decrease by 77%. In fact it increased by 6%.

At another monitoring station, Hotel Inca, lead contamination increased by 255%. That is not a typo. 255%.

Continues here

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Once again, I am in debt to reader MH. Thank you. There will be more on Doe Run and the (looking like it's about to happen) government bailout soon. Watch this space.