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Which will be worth more at end 2015?

7/18/09

Mel's in Honduras (and other fun)


According to this report, President Mel Zelaya has made it into Honduras and has set up a secret location operations base inside the country. The source is a reporter with close links to Zelaya, one Sergio Miranda.

Meanwhile, Honduras Coup 2009 accuses the New York Times of being crap at Spanish...doesn't surprise me, but this time the newspaper's generalized LatAm mediocrity has led to a pretty serious case of Lost in Translation.

And if you're good at the Spanish lingo thing, check out this very complete note explaining why what happened was undoubtedly a full-on coup d'etat no matter what them thar wingnuts and fruitbars might tell you.

The South America Swine Flu Sweepstakes Update July 18

Here's the updated chart:

Click to enlarge

Chile breaks the 10,000 barrier. Nobody's really sure how many cases there are in Argentina, but the official number is 3,056 as at July 13th so we're going with that even though it's almost certainly way more. Peru now has 2,503 cases and 12 deaths, which is an infection-to-death ratio about 10X lower than the fatties in Argentina with 155 dead.

Paraguay and Uruguay are fudging their numbers. Uruguay has 19 dead but won't say how many confirmed cases there are, only saying there are "40 outbreaks", many in schools. President Tabaré Vasquez last night appealed for calm. Paraguay with 8 dead says there are only 164 confirmed cases but also 1,728 suspected cases. As so often, the truth lies somewhere in between.

I made a mistake in the last update and said that every single South American state now has a fatality. Reader 'S' pointed out to me that Venezuela has missed the bullet so far. Let it stay that way. So anyhow, as countries down this way are beginning to count fatalities more accurately than infection cases here's a new chart:

click to enlarge

It's pretty clear that the southern cone is being affected far more than the tropical North of the continent, so watch out northern hemisphere...your winter will come.

Mosiac (MOS), as seen on IKN

We wrote on Thursday:

The news out of Brazil caught the headlines of all newswires, with Bloomie's 'Mosiac Climbs After Report Vale May Bid $25Bn' and Reuters with 'Vale mulls bid for Cargill's Mosiac' pretty typical of the bunch. But when your humble correspondent clicked open the stories it turns out that the source for the story is the newspaper O Estado de S. Paulo, a medium second to none for its unfounded bullshit and made up stories about takeovers, movers and shakers.

So if you want to get out of MOS, do it today.

We read on Bloomberg Friday afternoon:
Vale Denies Fertilizers Acquisition; Mosaic Falls (Update2)

By Carlos Caminada

July 17 (Bloomberg) -- Vale SA, the world’s biggest iron- ore miner, said it hasn’t made any offers to acquire fertilizer assets. Shares of fertilizer producer Mosaic Co. fell CONTINUES HERE

We see the reaction in share price:

Toldya.

7/17/09

FARC, Correa and a video

This youtube video is the talk of Colombia and Ecuador this evening and comes from this report.



What it seems to show is the FARC leader 'Mono Jojoy' talking to his troops just after the death of Tirofijo Marulanda, but the explosive information it holds is the part where Jojoy clearly says that the FARC contributed funds for the presidential election campaign of Rafael Correa.

There are no English subtitles and the Spanish is not super-clear so it's really only for those proficient in the language right now, but I've played over the key part several times (minute 3:10 onwards of the 4.14 youtube) and although we don't get the context of the sentence from the moment before Jojoy takes his drink, he clearly says:
"...y ayuda en dolares a la campaña de Correa y posteriores conversaciones con sus emisarios..."
...which translates as;
"...and help in dollars for the Correa campaign and subsequent conversations with his representatives...."
So, here we go with the next scandal, folks. They are never too far in the future down this way.

UPDATE: Ecuador's Interior Minister Miguel Carvajal is reported here as saying:
"We have to verify if the video is real and not a fake. If it is real, the FARC will need to be asked the names of the people they gave money to, because neither the País Movement (Correa's party) or the government has asked for or received money from the FARC."

The Friday OT: The Philosopher's Song and Omar Kayyam

Another quick snip of Python:



This Friday OT is accompanied by a small chunk of The Rubáiyát by Omar Kayyám*. Enjoy your weekend...and hey, pour yourself a glass of wine while you're at it.

Yesterday this day’s madness did prepare;
Tomorrow’s silence, triumph, or despair:
Drink! for you know not whence you came, nor why:
Drink! for you know not why you go, nor where.

*Thinking about it large chunks of Rubáiyát would be fine cos the whole thing is about getting sloshed, but let's keep it at a single quatrain.

Trading Post (pumpy edition)


All the following stocks will get featured (or at least mentioned) in The IKN Weekly, out Sunday. Why not join the throng? Only U$25 a month and plenty of happy customers already. I really must put together one of those testimonial posts to show you what the ever-growing number of clients have said regarding the service one of these days.

Ecometals (EC.v) down 16.2% at $0.155 and this may be the funniest press release from any LatAm junior miner in 2009. A classic of its kind.

Troy Resources (TRY.to) up 1.7% at $1.20. Slowly coming back from last week's pain.

Minera Andes (MAI.to) UNCH at $0.79. I've been mucking around all morning with my XLS and the latest production figures published yesterday. Plenty to talk about here, subbers.

New Gold (NGD) down 2.8% at U$2.68 and the production/cost numbers released today sucked, no two ways about it.

Capella Resources (KPS.v) UNCH at $0.55. Woof woof. Don't say I didn't warn you.

Kobex Resources (KBX.v) up 15.6% at $0.445 and I'm happy for reader 'TL' on this one today (as long as you held thru, sir...you bought well and have a nice winner now). We'll be running eyes over the proposed merger of KBX, IMR and IBX pn Sunday, too.

Delivering Hypocrisy

  • Delivery companies FedEx and UPS get into a competitor's spat
  • The ACU, the USA's “..oldest and largest grass-roots conservative lobbying organization,” offers to sell its support to FedEx for U$3m.
  • FedEx refuses, so The ACU supports UPS's position instead.
  • And these are the people who constantly pass judgment on Latin America from their self-imposed moral high ground?

Is that right? Am I missing something here? Nice reporting from Politico.
ACU Chairman David Keene

Peru's GDP for 2009 and the IKN prediction: How are we doing so far?

Back on April 16th I published this note which included this chart.


The chart shows my forecasts for monthly GDP (yellow) and for the evolution of annual GDP (red) in Peru for 2009. So for May 2009 I put my forecast at 5.66% for the trailing yearly GDP rate.

Now here's a chart ripped from this page in yesterday's 'La Republica' which has the yearly trailing numbers so far this year (May figures came out this week, remember). I've just changed the labels into English for easy reading.


Oh look, yearly trailing GDP is now at 5.65%, just one one-hundreth of a percent different than my forecast.

Autographs available on request. Pisco sours served. The end.

Luis Carranza vs Sponge Bob

"Ya tocamos fondo" said FinMin and liar Luis Carranza about the Peruvian economy yesterday. Translated it mean "we've touched bottom" or "we've bottomed out" if you like. We also get to see the fruits of his Casio as he explains (and I shit thee not, kind reader):
"If, in the first six months, we end up by growing 1%, we'll need to grow in the second six months by around 5% to reach the 3% forecast at the end of the year."
I just hope and pray that he's dumbing himself down and trying to explain things to his audience of economy knownothings (i.e. Peruvian financial journalists), because if that's the limit of his analytical powers we're currently watching one of the greatest confidence tricks of the 21st century. And as for all that bottom touching stuff (saucy!), strangely that's the exact same thing this joke said in April...and May...and June for that matter.

But all this broken record stuff isn't the point of this post, because we have far more important things to discuss. Reader 'GP' writes in and says, "Have you noticed the similarity between Luis Carranza and Sponge Bob?". Well I hadn't in fact, so let's check the evidence:



Yep, you win a prize, GP. Nice call.

Chart of the day is....

...crude oil, daily candle.

Oh phew, looks like the Bolivarian revolution is intact for another week.

Honduras: 50 ways to leave your exile

Click to enlarge (gets big)
You just slip in the back, Mel
Make a new plan, Mel
You don't need to be coy, Mel
Just get yourself free
Hop on the copter, Mel
You don't need to discuss much
Just drop out the hatch, Mel
And get Honduras free
(with apologies to Paul Simon)

AP filed this story tonight that has President Mel Zelaya en route for Honduras right here right now. Has Mel discovered that helicopters are smart options? Will the blocked roads all over the country help his cause? Looks like tomorrow may be a key day in the hoohah.

TEGUCIGALPA, Honduras — A top aide said exiled Honduran President Manuel Zelaya was heading home Thursday to set up an alternative seat of government inside the country, and will use it as his headquarters in a "final battle" against the coup leaders.

Zelaya's foreign minister, Patricia Rodas, said he is "on his way" back, but refused to say how or when he planned to enter Honduras. Zelaya's current whereabouts are unclear and the leaders who replaced him after the military sent him into exile have vowed to arrest him if he returns.

"Our president will be in Honduras at some point and some moment. He is already on his way. God protect him and the people of the Americas who are with him," Rodas told reporters in La Paz, Bolivia, where she yada yada continues here

7/16/09

The Economist, back to its normal LatAm mediocrity

I've had occasion to say "yup, good job" about a couple of recent reports in The Economist. This was quite pleasant to do, too, as TE gets about a quadzillion more eyeballs laid upon its pages than this humble corner of cyberspace and the bottom line is that any article that helps tell it like it is down here is fine by me....I mean, even Simon Rosemary has been applauded on these virtual pages in the past when he gets one right.

But back to The Economist and like all good things its good run of articles has come to an end with this piece of junk about Bolivia. Unshockingly it hits all the usual targets, like the fact that it is in fact bad for Bolivia to have a president that's popular with Bolivians, etc etc (thank God for intellectuals, else we'd never realize these counterintuitive things). There's every single cliché available, really; Chávez is mentioned...there's Russia...got a bit of Iran. But then it goes off on a tack about Santa Cruz by saying
"...but in fact Santa Cruz is ethnically mixed and average incomes in the two cities are comparable."
That made me laugh. Yeah...errr....any of those little brown people in the ruling elite of Santa Cruz, Mr/s. Economistwriter (they don't do bylines at TE...we're left guessing as always)? Err...any mention of how the 2008 referendum vote in Santa Cruz went pro-Evo Morales in Santa Cruz ex-city? And then there's the slave and virtual slave labour (Oxfam and WHO dixit, not I) that line the pockets of blue-eyed-whitey. As for "comparable incomes" what's the benchmark here, La Paz, New York, Santa Cruz, Buenos Aires and Tokyo? Gotta love those statistics, boys.....

But then it gets really mondo bizarro as TE goes where only dumbasses tread, trying to use a bit of revisionism on the Santa Cruz terrorist cell that was broken up when its integrants decided to stop some government bullets with their chests. They go with the "killed in their beds" line that suggests execution when forensic evidence has proven, no doubt, no flimflam, there was a full-on firefight. TE tells us "the supposed terrorists were an unlikely bunch" which may be true, but they're also proven far-right wing gunsmiths that are on tape as saying they wanted to kill Evo, his Veep, his security minister and cause a insurgency to break Santa Cruz away from the rest of Bolivia. They were funded by the Santa Cruz elite, they had a cache of weaponry that can officially be classed as "a shitload", they bombed the house of the nation's best-loved Catholic bishop and they were staying at the best hotels in town free of charge because......because.......TE doesn't try explaining any of that. When it comes to TE you expect a bit of lean towards capitalism, but not outright lies and the refusal to let overwhelming evidence stain the pre-conceived thrust of the argument. Y'know, things like photos, sworn statements, audiotapes, computer files....just trivia according to the lying drivelwriter working for TE.

At the end, The Economist (being The Economist) signs off with a nod to Bolivia's...well, it's economy. We get some un-named fool who is simply referred to as "one pundit" (hey, maybe it's Alek Boyd!! Maybe it's Fausta!! Maybe it's Goni!!) who tells us, amongst other things, that Bolivia is suffering from "bad economic policy"? Well let's see what our friend the owl thinks about that, shall we?
Yep, a special jolly good show British version of our friend the owl for the blokes over at The Economist. Here's a checklist on Bolivia's economy under Evo Morales:

  • 2007 GDP up 4.6%
  • 2008 GDP up 6.15%
  • 2009 GDP expected to grow "at least 4%"
  • U$8Bn in international currency reserves, which is all-time record levels and represents U$816 per capita.
  • Inflation now under control. The last two months have seen negative inflation thanks mainly to the drop in imported foodstuffs.
  • Expansion of exports despite losing the ATPDEA advantages with the USA. New and very large investment programs in hydrocarbons and metals in exactly the way those economists say you should do these things (except it's China, Brazil and India invited to the parties, not the US...perhaps related?)
  • An old age pension given to every single senior citizen regardless of sex, status or history for the first time ever. Poverty rates dropping at record speed.
  • Programs that have rid the country of illiteracy by official UN world standards.
  • Free heathcare that is so popular visitors come from "the economic miracle" Peru to get their eyes fixed.
  • etc

I could continue. But perhaps from all that list the "GDP +4% in 2009" is the killer stat, because if achieved (and that seems very likely the way things are going) Bolivia will have the best performing economy in the whole of South America in 2009. So what kind of crow will the author of this most pathetic of hit pieces in The Economist have to eat come the end of 2009 and the magazine's learned audience starts writing in with "Hey, if Bolivia's in bad shape what about the rest?". Or maybe the author is just full of shit...YOU BE THE JUDGE!

Thus, unnamed yet shamed Economist author, for your ridiculously slanted piece on Bolivia that manages to combine a mass of errors of omission with everything you can possible get wrong about the country in the true spirit of neolib hit-jobs in the space of just 740 words, you win this week's coveted award. Enjoy, dumbass:


Trading Post (Tom Watson tribute edition)


He's not the leader tonight, but at 59 years old Tom Watson went round Turnberry (remember 1977?) in 65 shots today, he's just one shot behind the leader, he whupped Tiger's tush bigtime and deserves a standing ovation from all sports fan with a sense of history. Nice guys do come first occasionally, so Mr. Watson, I salute you.

Troy Resources (TRY.to) up 2.6% at $1.18 and just for a change has bid and ask just a penny from each other...miracles never cease. I'll be mulling over the Sandstone news release in this week's IKN Weekly...be there or be square.

Creston Moly (CMS.v) UNCH at 10c. Hahahahaaaaaaaa, what stupid sold-out dumbass reco'd this dog at the beginning of the year? LatAm's worst base metals stock? Well, there's a helluva lot of competition but CMS has to be up there vying for the title. This message goes out to someone who slags off this blog to all and sundry but still decides to come and read it every other day. And FYI I never open your e-mails either so don't waste your time writing any more.

Fronteer Development (FRG) up 0.8% at U$3.83 and has bounced back in great style from the $3.10 numbers printed very recently (as recently as Monday, in fact). That's the thing about cream; it tends to rise.

Fortuna Silver (FVI.v) up 7.8% at $0.97 and getting a lift from this morning's strong news. Is there any need to tell you again that I like this stock? Nah, didn't think so....DYODD.

What Twobreakfasts can learn from Samuel Beckett


When Samuel Beckett’s Waiting For Godot exploded on to the London stage 50 years ago, it shocked as many people as it delighted. There had never been a play like it; two men clowning around, joking and arguing, repeating themselves, as they wait through one day and then another, waiting for the mysterious Godot. The combination of music hall, poetry and tension redefined what is possible in theatre, so that these days, Waiting for Godot is accepted as one of the most significant plays of the 20th century.

In Godot We Trust, Davis Smith, The Observer, March 2009

Today we have another episode in the Doe Run Peru (DRP) tragicomedy, with Peru's Ministry of Energy and Mines yesterday saying that it's waiting on an offer from Ira Rennert, Renco and DRP. Here's how BNAmericas reported it last night:
Peru's energy and mines ministry (MEM) is waiting for a "serious proposal" from Doe Run Perú to consider extending the company's deadline for meeting environmental improvement requirements, known as PAMA, at its La Oroya smelter, MEM said in a statement.
Obviously, Beckett's seminal work Waiting for Godot just sprang to mind of your correspondent. Y'see, Peru just doesn't get it. They seem to think they an negotiate a deal that gets cash out of a billionaire mega-capitalist for some vague environment and social cause. Last month Rennert's side sat down and offered between $31m and $38m, depending on which source you read. It also wants yet another extension to its environmental cleanup deadline.

Meanwhile, Peru at least recognizes that the $30-odd million wouldn't actually be put down by Rennert but come out of tax breaks and government loans to the company; in fact that $38m or so wouldn't cost Rennert a penny. So Peru is insisting that Rennert comes up with $100m to get a deal done. In the words of deputy mining minister Fernando Gala, Rennert "... must inject cash for the smelter".

Must? MUST? Peru will be waiting as long as Vladimir and Estragon did for the deal it thinks it can get cos the poor saps now getting a large taste of "the amerikan way" have no idea who they're dealing with. It's kinda embarrassing to watch how the innocent neoliberal ideals that Peru wants to follow are making it lose all sense of national pride. Damn, if Rennert tried this kind of tactic with Correa's Ecuador, or Morales' Bolivia, or Chávez's Venezuela the only word he'd hear by way of reply is "expropriation".

The only reason that Twobreakfasts doesn't do what any self-respecting leader would do is that he's just too keen on keeping in the USA's good books. The country is being screwed over by the hardest of hard-edged capitalists and they actually think they'll reach a compromise on this? Gimme a break! There are only two possible outcomes to any "negotiation":

1) Rennert gets Peru to cave in and take his offer
2) Rennert walks, declares DRP bankrupt and Peru picks up the bill anyway.

Sad to watch. So just expropriate now, Twobreakfasts. Make a point, do the right thing, assume the company onto state books and get the thing back to work. And go to the theatre more often cos you might just learn something about human nature that'll help you run the country in a better way.

Memo to shareholders of Mosiac (MOS)

Woof Woof

Get on your knees and thank the market gods for the chance to sell out today.

The news out of Brazil caught the headlines of all newswires, with Bloomie's 'Mosiac Climbs After Report Vale May Bid $25Bn' and Reuters with 'Vale mulls bid for Cargill's Mosiac' pretty typical of the bunch. But when your humble correspondent clicked open the stories it turns out that the source for the story is the newspaper O Estado de S. Paulo, a medium second to none for its unfounded bullshit and made up stories about takeovers, movers and shakers.

So if you want to get out of MOS, do it today. Any other source and I'd be expecting the deal to happen, but as it's O Estado the chances drop to 25% maximum. I mean, why should Vale buy a fertilizer play right now when anybody with a brain sees the potash cartel prices cracking and a big drop in revenues in the very near future?

UPDATE: Right on cue, Forbes published this report this afternoon on the soft earnings outlook for the major fertilizer players, including MOS of course.

Colombia and Peru: It's love...official

Colombia's ambassador to Lima, a certain Álvaro Pava (his last name translates as 'kettle' as a bit of trivia) today gushed gushingly in the direction of his host country. In this report we have him saying the following, neatly mixing the typical über-condescending tone of the LatAm criollo (they think they're) elite with over-the-top superlatives.
"Without doubt I believe that in the region there is no better ally than Peru for Colombia and I also consider that there is no better ally than Colombia for Peru. We have absolutely exceptional binational relationships that are nothing more than the reflection of the good relationship enjoyed between presidents Alan García and Álvaro Uribe."
And you gotta agree, there's a lot of common ground between Peru and Colombia version 21st century, so the love affair is understandable. Let's see now...........

  • World's two largest producers of cocaine? Check
  • Extrajudicial killings by armed forces? Check
  • Constant threat to Human Rights organizations? Check
  • False optimism about economies recently laid bare? Check
  • Selling out large tracts of land to oil companies against wishes of indigenous populations? Check
  • Demagogue presidents? Check

In fact, thinking hard about it all the only difference I can see is that Uribe is actually popular in his country. Angus Reid monitor has his most recent approval rating at 71%...but that's Colombia for you, who am I to judge? Meanwhile, Twobreakfasts scores a mighty 21%, the worst rating in the Americas. The Economist uses the adjective "dismal" about Twobreakfasts in this article out today...I agree.

Fortuna Silver (FVI.v): and in a shock development....


...people are now beginning to realize that FVI does have silver in its silver mine and that they haven't been playing some silly trick on the world of high finance. Yes, Virginia, twenty point three million ounces of silver means the mine isn't going to close any time soon. Here's the PR:

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 16, 2009) - Fortuna Silver Mines Inc. (TSX VENTURE:FVI - News; BVLAC:FVI) is pleased to announce the release of an updated NI 43-101 compliant mineral resource and reserve estimate for the Caylloma Mine located in southern Peru. Caylloma is currently in production at a rate of 1,200 tpd and is forecast to produce 1.6 million ounces of pure silver in 2009. For the first half of 2009, Caylloma has produced 853,162 ounces of silver or 53.3% of annual forecast production. Silver production accounted for 48% of revenues in the first quarter of 2009 and Fortuna projects that silver revenues will remain at a similar percentage of total revenues for the remainder of the year.

  • Proven and Probable Mineral Reserves are estimated at 4.03 million tonnes averaging 156 g/t Ag, 0.55 g/t Au, 1.70% Pb and 2.58% Zn.
  • Contained silver is estimated at 20.3 million ounces, representing a 404% increase in silver ounces in the Proven and Probable reserve categories over the previous resource and reserve estimate (43-101 Technical Report published October 3, 2006).
  • Inferred Mineral Resources are estimated at 1.3 million tonnes averaging 187 g/t Ag, 0.29 g/t Au, 1.92% Pb and 3.25% Zn.
CONTINUES HERE

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

...the monthly GDP chart for Chile and Peru, YoY data:

We've followed the correlation between the two countries' GDPs for the last few months, but this month shows a distinct advantage towards Chile. Even though YoY data has Chile's May at +0.1% and Peru's at +0.46%, the gap has now closed from as much as +8% in Peru's advantage to all-but nothing. Why should this be so? Well, let's start with the fact that only one country mentioned is serious. Then maybe add that only one of the countries mentioned bothered to put in any contingency plans for the crisis-to-come in 2008 while the other was waltzing around saying "we're armour-plated...we're gonna grow 6% in 2009". Dumbasses.

As for the future, check out May 2008; both Peru and Chile had a "soft" month so this helped no end with the year-over-year calculations this time round. But June 2008 in Peru came in at +13.1% growth. Oh lordy, this FinMin liar Carranza dude still thinks Peru grows at +3.5% in 2009? Somebody buy him a Casio and sign him on for the remedial mathematics course quick, cos Peru's June '09 numbers are going to ruin his cunning plans once and for all...if they get -2% it'll be a good result what with double the amount of strikes than June 2008, swine flu, a dumping of the tourist industry, the drying-up of imports, rising unemployment..uff, not good. Not good at all.

7/15/09

Troy up tonight

Troy Resources (TRY.ax) (TRY.to) is up 5% on 200k+ volume thanks to this news linked here (or here if that first link doesn't work).

Looks like its Sandstone operation in Australia is good for a new lease of life. Can only be good.

Trading Post (investing is easy edition)


Pick ten exploration-stage junior miners, any ones you like. It doesn't matter if they have good assets or bad, whether they're about to go into production or whether there isn't a hope in hell of a mine getting built on top of the resource. It doesn't matter if they're run by thieves or straightshooters, sinners or saints. It makes no odds whether they have a ton of cash or if they're down to their last bean and about to drown you in a dilutive placement. Hell, this game is so easy that you don't even need to understand a thing about mining, or accountancy or geology or metallurgy. Just find the stocks that shout the loudest and get the sheep salivating and buy some of their stock.

However, if that scenario doesn't appeal and you'd prefer to follow stocks that have a solid background and won't suddenly surprise you by going bankrupt or something, here are the names of three junior mining companies with good people in charge, good mining operations and good financials...the only problem is that it takes time for the blind to grope around before they get discovered:

Fortuna Silver (FVI.v) up 3.5% at $0.90 and on big traded volume of 1.2m and counting. But screw that...why pay o.6X of NAV for a profitable silver miner when I can pay 1.2X NAV for a gold explorer that won't mine an ounce in the next five years?

Troy Resources (TRY.to) UNCH at $1.13 and untraded today. Who gives a damn about fundamental value anyway?

Minera Andes (MAI.to) up 5% at $0.84. Rob Mac Who? Never heard of him...better to place my money in a company with a CEO who quit his job as an IR manager two years ago and now pays himself $120,000 a year plus options and exes.


Understanding Junior Mining Companies, part 936

click to enlarge

Argentina: Just a little reminder every now and again.....


...is enough to realize just how dumbass its politicos really are.

I try to ignore Argentina as much as possible on the blog these days because it's just too silly. For some it's difficult to explain just how a country that has everything necessary for human development, virtually unlimited water supply, most flavours of climate but for the most part very clement and agreeable weather all year round, vast tracts of fertile land, hydrocarbons for all, friendly people etc etc etc can be so screwed up. But just check out the people that have been running the shop for the last 20....no, 30....no, 100 years and the answer is pretty simple in the end.

Today's small example comes from the mouth of President Klishtina. It's only a little thing but it's enough to keep me on track and as far away as possible from bizarro circus numero uno. The subject was swine flu (AH1N1 still sounds so boring next to the original name) and the fact that 137 people were yesterday confirmed as fatalities in Argentina, a big jump from the weekend's 92. Klishtina said:
"I'm not worried that Argentina is second in the mortality rankings because it's the only (country) that really counts its figures (correctly)."
And y'know what? After living in the country for several years, I can assure you that the BS coming from her mouth will be believed by the majority of Argentines. Not because they trust her over the World Health Organization, or Chile's health service or that of the UK, or France or whatever else. The reason is that the average Argentine has absolutely no idea about what goes on outside their own country apart from the European soccer leagues or the odd 'bleeds-it-leads' accident that gets picked up from CNN. She tells her descamisados that Colombians paint themselves blue for a couple of months every year and it'd get debated in Porteño coffee houses the next morning.

And as for the thought of Argentina being some paragon of statistical collection....ahhh, just wonderful.

Avoid sillycountries.

Gold Trading: a must-read


Gary nails gold. Check out the note "micromanaging the gold price" on the biiwii blog this morning. A total must-read for all of us mad enough to try and pick tomorrow's price in gold (yup, that includes me).


Peru: The New York Daily News puts its rivals to shame

Bizarre. I've just read an interview with Eva Ayllón in the NYDN and it's the best piece of journalism on any subject Peruvian I've seen in print media for quite a while. The only problem is deciding whether this gossip central rag has done a great job or it's the others setting the bar so low (I suspect the second).

Anyway, if you don't know who Ayllón is it's a recommended read. If you do know Ayllón and her outstanding voice and music, she's playing the Blender Theatre, Gramercy NY on July 17th and 18th. Otto guarantees a memorable night if you live round that way and decide to go.

Chart of the day is.....

...copper 60 minute candles.

Well, as IKN Weekly subscribers will know I wasn't expecting the move we've seen over the last two days. They'll also know why I'm happy to be wrong. DYODD, dude.

7/14/09

Bagua: Twobreakfasts' fancy new propaganda technique is to make shit up about Amnesty International

(click to enlarge)

A pair of simply excellent posts over at Gran Combo Club here and here, with the first link the key article. All Spanish speakers should forget the rest of this post and hightail it over to Rendon's GCC right now to see how it all unfolded, but for our purposes here's how the action went down:

1) On Friday 10th July, Peru's state-run 'Andina' news agency published a story in both Spanish and English about how Amnesty International had apologized for using false information in their coverage of the Bagua massare of June 5th. Here on this link the English-language version of the story and above is the screenshot of the page in question. If you want the Spanish page it's on Rendon's original post.

2) Immediately the story was picked up from the government wires by the Peruvian lapdog media and splashed around the country. In the space of an hour, versions of the "Amnesty Wrong, Alan Right" story had been run by these mainstream outlets that clearly hadn't bothered to check the veracity of the story and just added fuel to the fire

- Correo,
- El Comercio 1,
- El Comercio 2,
- Radio Nacional,
- La República,
- Ojo,
- Dirección de Educación de Lima Metropolitana,
- Expreso.

3) Peru's newspaper of record, the lamentable El Comercio, was the worst. In its print edition the next day (see screenshot on right) and under the title "Amnesty Intenational of Spain Apologizes", it published an editorial that finished with the following dark and threatening words for those people that support the cause of the indigenous against that of the government (my translation):
"Those that stay silent will show that their flag is not that of 'human rights for all', but that of 'political interests for some'."
People, that's creepy shit to read in a South American newspaper of supposed gravity and reminded me (and Rendon in fact) of the stuff that used to be printed in Argentine and Chilean newspapers about subversives in the 1970s....who then disappeared.

4) However, inquiring minds were also on the case. Silvio Rendon at Gran Combo Club immediately smelled a rat with the whole story and pointed out four glaring discrepancies in the original Andina story. The note that had been so willingly reprinted and rehashed in media all over Peru was, according to Rendon, "an unlikely news story with gross errors". Or in other words, a humble blogger worked out something that the editor of El Comercio either couldn't be bothered to do or just deliberately ignored: THE OFFICIAL GOVERNMENT NEWSWIRE OF PERU, RUN BY THE ALAN GARCIA ADMINISTRATION, IS MAKING SHIT UP ABOUT AMNESTY INTERNATIONAL SO THAT ITS POSITION OVER BAGUA LOOKS STRONGER.

5) And sure enough, the bullshit lies have been discovered and thrown back in the faces of Twobreakfasts and company. In this note entitled "Amnesty International And the Government of Peru", Amnesty makes it clear that the person who wrote the letter to the Peruvian Embassy in Spain is not a member of Amnesty but simply someone on their mailing list. Here's the paragraph (my translation):
Amnesty International would like to make it clear that Sr. Herranz belongs to a network of people all over the world that receives information from Amnesty International but is not a member of the organization. Therefore the two letters that he sent to the Peruvian Embassy in Madrid were sent as personal correspondence and their contents do not reflect the position of Amnesty International.
The article by Amnesty then goes on to explain that even speaking as a private citizen, he got Amnesty's position wrong and that they did in fact know about and acknowledge the police deaths in the Bagua massacre, that Amnesty insists on an imparcial investigative body into Bagua etc etc. Or in other words Herranz was making shit up, too.

So what we have is a whole network of lapdog media in Peru that will accept at face value the lies and spin of the Twobreakfasts government without so much as a second thought or the most basic of fact-checking. So the only question left is to wonder whether El Comercio will have the guts to apologize for its bullshit lies, because there's no point in asking the Twobreakfasts and his band of mini-Goebbels at the Andina propaganda outlet.

Serious kudos for your work, Rendon. Bloggers 1, Liars and Lapdogs 0.

Mining PRs and the Ottotrans™, part ten


Well here we are again. Part ten could've been any number of ECU Silver, MAG Silver or Nadagold press releases, but after a while it gets to be no type of challenge. So today's Ottotrans™ picks on a new victim, South American Silver (SAC.to), a strange thing with a strange silver/indium project deep in the heart of Evolandia. The occasion is today's press release.

Here's what it says:

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South American Silver Corp. announces that it has initiated discussions on the Malku Khota silver-indium project with various interested parties in China, Japan and South Korea. The purpose of these discussions has been to explore the possibility of securing a strategic alliance in the form of a marketing, off take or investment agreement. Several groups have expressed interest in learning more about the Malku Khota project and discussions are ongoing but there can be no assurance that a strategic alliance will result from these efforts.

As demonstrated in the recently released Preliminary Economic Assessment (Scoping) Study ("PEA")- see SASC PR09-03, March 20, 2009- Malku Khota has the potential of becoming one of the world's largest future sources of indium. The PEA was prepared by Pincock, Allen & Holt and showed that at a production rate of 20,000 tpd, Malku Khota could produce 27,000 kg. of indium per year for 36 years and if the project were expanded to 40,000 tpd, could represent approximately 10% of the world's current production. Indium is a key ingredient metal in a number of consumer electronic applications and its current primary application is being used as a coating for the flat panel displays. It is also increasingly being used in the solar energy industry where Copper, Indium, Gallium Selenides (CIGS) are becoming a key semiconductor material in the high efficiency photovoltaic cells. In recent years the price of indium has ranged from US$250 to US$1,000 per kg. The current price is approximately US$350/kg.

Ralph Fitch, President and CEO of the Company, noted that "This is a positive development for the Company and shows that Malku Khota is a becoming a recognized project in the minds of consumers and other producers. The presence of gallium, in addition to indium, has added interest to Malku Khota. Gallium is also a strategic metal with similar applications to indium in the electronics and solar photovoltaic fields that we think will attract the interest of consumers and producers and further the development of a strategic alliance. We will be estimating the gallium resource when we complete the next resource update for Malku Khota."

With respect to the program in Asia, the Company has retained the consulting services of Mr. Michael Mason, Managing Partner of Mineral Services LLC, based in Garden City, New York. Mr. Mason has been working with the Company in developing these Asian contacts and he has a wide range of professional experience in Asia, particularly in the field of mineral product marketing and sales contract negotiations. In that capacity he has been associated with such projects as the Escondida Copper Project in Chile and the Olympic Dam Project in Australia. He was involved in the development of the strategic marketing plan for placing the complex lead, zinc and bulk concentrates produced at the San Cristobal Project in Bolivia.

Malku Khota is a large, disseminated silver-indium deposit in west central Bolivia with associated gold, copper and lead credits. The present 43-101 resource includes an indicated resource of 144.6 million oz. of silver and 845 thousand kgs. of indium and an inferred resource of 177.8 million oz. of silver and 968 thousand kgs. of indium. The PEA demonstrated a net cash flow of US$1.23 billion, cash costs (net of credits) of US$3.74/oz silver, a pre-tax IRR of 50.7%, capital cost of US$104 million and a 1.4 years payback. SASC management believes that there is significant upside potential to expand the resource and to optimize the project economics. The metallurgical testing continues to indicate that the deposit is leachable with an acid-chloride solution and will not require the conventional, higher capital cost milling method normally associated with other silver deposits.

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And here's what it means
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

South American Silver Corp. announces that the small ad it placed online in the "Ali Baba Dot Com" website has finally attracted a couple of people who got us to phone them. The purpose of these discussions has been to see how long we could keep them on the line until they realized they'd have to wait until we actually got round to mining the stuff before they could buy it. Several groups have expressed interest in getting a free trip to Bolivia with the excuse of learning more about the Malku Khota project and discussions are ongoing but there can be no way on this planet we're stumping up for their airfares.

As demonstrated in the recently released Preliminary Economic Assessment (Scoping) Study ("PEA")- see SASC PR09-03, March 20, 2009- Malku Khota has the potential of becoming one of the world's largest future sources of investment relations bullshit. The PEA was prepared by Pincock, Allen & Holt and showed that in our little dreamworld at a production rate of 20,000 tpd, Malku Khota could produce 27,000 kg. of indium per year for 36 years and if the project were expanded to 40,000 tpd, could represent approximately 10% of the world's current production. Indium is a key ingredient metal in a number of consumer electronic applications and its current primary application is being used as a coating for the flat panel displays. It is also increasingly being used in the solar energy industry where Copper, Indium, Gallium Selenides (CIGS) are becoming a key semiconductor material in the high efficiency photovoltaic cells. In recent years the price of indium has ranged from US$250 to US$1,000 per kg. The current price is approximately US$350/kg and it's dropping fast because the world is now being oversupplied with the stuff, mainly from those Teck guys in Canada and mines in China which have restarted processing from their copious zinc mineral. I mean, it's their fault in the first place that the price shot to $1,000/kg when they stopped refining the stuff back in 2002 and here they are starting to produce again, so now those bastards are dumping on the market we haven't got a cat in hell's chance, really.

Ralph Fitch, President and CEO of the Company, noted that "The fact that the telephone actually rang for a change is a positive development for the Company and shows that Malku Khota is a becoming a recognized project in the minds of the three people who answered the Ali Baba Dot Com advert. The presence of gallium, in addition to indium, has added interest to Malku Khota. Gallium is also a strategic metal with similar applications to indium in the electronics and solar photovoltaic fields that we think will attract the interest of consumers and producers and further the development of a strategic alliance. We will be estimating the gallium resource when we complete the next resource update for Malku Khota."

With respect to the program in Asia, the Company has decided to use up shareholder cash on the consulting services of Mr. Michael Mason, Managing Partner of Mineral Services LLC, based in Garden City, New York. Mr. Mason was the dude who said to us that AliBaba Dot Com might work and he has a wide range of professional experience in Asia, particularly in the field of mineral product marketing and sales contract negotiations. In that capacity he has been associated with such projects as the Escondida Copper Project in Chile and the Olympic Dam Project in Australia. He was involved in the development of the strategic marketing plan for placing the complex lead, zinc and bulk concentrates produced at the San Cristobal Project in Bolivia which afterwards bankrupted Apex Silver and sent their stock from U$20 to zero.

Malku Khota is a large, disseminated silver-indium deposit in the middle of a country that won't let a gringo miner make a profit, with uneconomic traces of gold, copper and lead. The present 43-101 resource includes an indicated resource of 144.6 million oz. of silver and 845 thousand kgs. of indium and an inferred resource of 177.8 million oz. of silver and 968 thousand kgs. of indium, so if you think the "company has" all that metal you'd better go check what the words "indicated" and "inferred" really mean in 43-101 parlance. The PEA demonstrated a net cash flow of US$1.23 billion, cash costs (net of credits) of US$3.74/oz silver, a pre-tax IRR of 50.7%, capital cost of US$104 million and a 1.4 years payback. But we neglect to mention how we're using a 0% discount to NPV when any serious, unscammy operation would offer up the 8% or 10% discount numbers and not feed a bunch of bullshit to people. In fact at a 10% discount the NPV drops from $1,233m to $325m and that's still wildly assuming indium sells at $530/kg instead of today's $350/kg. The SASC management believes that there is significant upside potential to expand their back pockets at the expense of you suckers and to optimize their personal economics. The IR testing continues to indicate that the shareholder base is leachable with a continual share placement solution and will require the conventional, low cost pumphouse method normally associated with other silver deposits.

Trading Post (wheat and chaff edition)


Aquiline (AQI.to) up 4.9% at $1.71 though volumes rather low. The market liked this morning's news about AQI's decision to buy in as planned 100% to the Pico Machay project in Peru. Subscribers of the weekly will know I've been...errrr...ahem..following this stock fairly closely recently.

Capstone Mining (CS.to) up 15.5% at $2.90 and everyone loves CS.to again. New kid in town on copper and that Minto thing it got as part of the Sherwood deal is turning out to be a little star of a mine. Why it's up so hard today I dunno (apart from the way copper upped in London, por supuesto)...anyone heard of an upgrade or a newsletter pump?

Fortuna Silver (FVI.v) up 3.6% at $0.86, again low volumes. You could have got 77c last week...hey ho, another round of the bouncing FVI. Great company, well run and excellent value here.

South American Silver (SAC.to) up a penny at $0.41. SAC.to published a NR less than an hour ago....oh I feel an Ototrans™ coming on! This thing should be avoided (or at best approached with extreme caution), as it's yet another miner that massages its numbers to a deep shiatsu level in order to be something it isn't and then has this habit of leaving the sensitive parts of its bizplan in the deeper corners of its regulatory filings. "Pssst! Wanna buy some indium in Bolivia, guv?. We don't have surface rights or money anything...but come have a look at this here indium! Pretty colour, innit guv?".

Chariot Resources (CHD.to) up 9.5% at $0.23 on fair volumes. Well hoodathunkit...up 15% on the week so far. IKN Weekly subscribers will know we've been fishing for weeks on a decent entry point for this stock and took the recent 20c offered. A nice start to the trade on the back of today's copper pop. DYODD, dude.

Note to Colombian narcotraffickers: Take the Pacific route in August


News from Ecuador is that the USA isn't going to wait 'til the September 18th "we be kicking you out today, gringos" day to stop anti-narcotics operations (and the odd bombing run, of course) from its Manta air base in Studmuffinlandia. The Ecuador bigwigs in charge of the caboodle today confirmed the USA's decision that the last surveillance op will take place this month, on July 17th to be exact.

So a headsup to all those marching powder entrepreneurs in Colombia and Peru; dudes, forget that cross-Venezuela route for the next six weeks or so and load all up in those semi-submarine thingies you got for the Pacific run. There ain't no bear in the air no more.

Mojitos served. The end.

Peru: Can I Haz Scotiabank Job?

It must be a truly great thing to land a job as an economist in a Peru bank. Two main reasons:


1) If you have a brain there's no competition

2) Say what you have to say in the right way and you get quoted everywhere by the lapdog press. World of Ego, here we come.

Case in point, Pablo Nano of Scotiabank. Señor Nano yesterday predicted that Peru's trade balance would come out positive in June, which is largely along the lines of predicting that the sun will rise tomorrow morning or that the current Pope is of the same religious creed as the previous incumbent Holy Father. What you have is a rapidly shrinking economy and deflation on one side (imports down? Duh!) and a rebound in metals prices as China buys up all that lovely copper and Switzerland squirrels away as much gold as it can get from Yanacocha and Pierina. Or in the words of Pablo, "The May numbers show on the one side a sustained recovery in exports and on the other a larger than expected drop in imports". No shit Sherlock.

And sure enough, today's imports numbers confirm that Peru's real economy is diving into an ever deeper recession. YoY imports are down 39.6% (really..not joking), with the worst affected sector that of capital goods and construction materials, down 44.9%. That makes the first six months of 2009 down 30.1% from the same period in 2008, so if you care to think about it, 30% in six months and 39.6% last month.....means......that....yep...it's getting worse, not better.

But Peru isn't in recession....oh no, whatever makes you think that?

UPDATE: A very sad but very true observation comes from regular reader Ward in the comments section below. Here's the excerpt:
"...the fact that you typically need to be (very) young, female and goodlooking to be hired by a Peruvian bank may not bode well for having the most qualified people for the job."

I wonder why Ventana Gold doesn't talk about political risk much.....


Funny old world, innit? You get reams and reams written on Ventana Gold (VEN.to), not to mention next door neighbour Greystar (GSL.to). There's also Anglo at La Colosa and then after those big three a whole bunch of hangers-on in the area, too. But I'll be darned if I can find a word written by any analyst hot on VEN.to and/or the other stocks about political risk in the cocaine-smuggling, fast-shooting, blood-stained Colombia/Venezuela border region.

Which is strange. I mean, to the East of Santander (where the gold-bearing region in question lies) you have Arauca, controlled by the far-left wing FARC, so why not check out the latest on what's happening in that area by going over to the CAJA blog and reading this post (excerpt here)
Pablo Rodriguez, of the Sikuani people, taught in the indigenous school in Marrero. He was murdered in his classroom by the FARC on June 9. Because of the difficult access to that community, his body wasn’t recovered until two days later. When I arrived in Arauca City, the wake had finished and the funeral procession was marching to the cemetery.


Humberto Echeverri taught for 18 years in the community of Los Colonos and he was with his students on June 11. The Social Pastorate program of the Catholic Church has a nutrition and community garden program in Los Colonos, and they were monitoring the weights of the children. FARC guerrillas came into the school and told Humberto they needed to speak with him. They led him away, prevented the people from following, and then killed him.

.... and then when you've had your heart broken by the stories and photos of the children left behind, check out this other recent post at CAJA when the blog author suddenly found himself on the wrong side of town(excerpt here):
The bursts of gunfire were becoming longer and the direction of the sound was changing. It seemed as though the shots were coming closer. There was a particularly long, and ugly, burst of automatic rifle fire. At one point, shots were fired in the plantain grove – 100 yards away.


We also heard explosions which could have been army mortars or guerrilla cylinder bombs. The guerrillas sometimes launch propane cylinders filled with shrapnel – deadly devices that often veer off course and miss their intended target.


A group of soldiers had set up camp in the neighboring house – 50 feet away. I was afraid that the explosions could have been cylinder bombs and that the guerrillas would attempt to hit the army encampment. I counted the explosions (something else to focus on) and noted 16.


...................................................

A helicopter came and circled overhead five minutes later. A roar of machinegun fire came from the helicopter – the ugliest sound I’ve heard in my life. I looked behind me and saw Nidia crouched underneath a table with her son Brandon, who was crying. One of the bullet cases tore through the metal roof of a house fifty yards away and landed on the ground a few feet from a mother and child (see attached photos).
Sounds like a safe place to start a multi-billion dollar gold mine or two next door to, doesn't it? So what about the far-right wing Paramilitary zone that includes and runs North of Santander? Well, here's Plan Colombia and Beyond with a video post of what an area looks like after the paras surge through and force people to relocate. And here's a report on the paras' recent admissions that they're responsible for 21,000 extrajudicial killings in Colombia.

That video example is North of the exact zone, but Bucaramanga, just next door to Ventana & friends, is a well-known para stronghold, too. So why not do a bit of DD and ask your friendly stockbroker about political risk on these stocks the next time he pumps them down your throat with his $10 target prices? If he tells you the truth, I'd guess the investment may not sound as inviting as it did when he was giving you the full spiel. If he tells you there's little risk and there's nothing much to worry about, I'd guess it's time to change your investment advisor.

Chart of the day is....

...the reason why IKN comments are moderated.


Has anyone else with a blog noticed a sudden surge in spambot posts? Things like this one I got no less than seven times yesterday.....
Welcome to lotro gold buy cheap final fantasy gil,wow gold,aoc gold service,WoW Powerleveling aoc gold is our Atlantica goldprimary service,
archlord gold and is on sale last chaos money
....that always come with links to other websites embedded (which I've taken out to reprint here). Also, the people that read "no anonymous comments" and then go right on ahead and vent a whole kilo of spleen on some madfool tinfoilhat rant....jeesh people, get a life will yaz?

7/13/09

Scary Wiki Bloggy News(y)

Oh Lordy! Some criminally insane person (and I swear to you it wasn't me or anyone I know) has decided to use this humble corner of cyberspace as a reference in Wikipedia. Are they mad? A better example of society's slow ebb and the chronic decadence of information integrity is difficult to imagine.

Go check it out here if you like...IKN is reference number 2 of 4 on the page footnotes. Meanwhile, this next photo is for the recently reappeared Bina:

Trading Post (triumphant return edition)


Yeah, it's back. I gave Trading Post a break for a fortnight, basically because I felt it was getting stale. Let's see if we can be a little spunkier now.


Gold Hawk Resources (CGK.v) down 11% at $0.04 and back on the radar at this price. The stock has sold off some thanks largely to 1) a chunk of placement shares coming out of escrow and 2) lack of news on the financing front. This humble corner of cyberspace is a-rootin' for a deal that will get Coricancha running again, but it's up to management to deliver.

Meredith Whitney up 300% on her Goldman Sachs out-da munneh calls today. Shome mishtake shurely ossifer!

MAG Silver (MVG) (MAG.to) down 1.3% at U$4.67. What a dog this thing is! Hands up who remembers back to June 23rd when the BS, sneaky insider-selling management said that the reason the stock had underperformed was "..largely attributable to the capping effect of the Fresnillo offer" which had been withdrawn the day before. So how come the stock is totally UNCH in the 16 trading days since that "capping effect" of FRES supposedly disappeared? Answer: It's still there, cos these dumbasses can't sell their company to anybody else. It's a pity there isn't any Canadian brokerage honest enough to say "People, we f***ed up when we reco'd this to you" cos the spiel coming out now is "Aaaah, but just you wait til the drilling results and resource calcs start flowing in 3q09". Bullshit is the motor of this market and my how it shows, Mr. Zed.

Radius Gold (RDU.v) UNCH at $0.155 and hasn't traded today, but for a value play there must be worse out there. Volumes have sunk back to a trickle since pisspoor Casey pumped Ridgway a few weeks back....when they've bought back in we can expect the second helping...that's how it works Duggie, right?

Nadagold up 9% at U$3.99 and this dog of dogs gets a bounce because Meredith said Goldman Sachs was cheap. Can somebody please explain how an uneconomic never-to-be-exploited greenfield that's so North I can't point that far and with a management team that treats its shareholders like battery hens can possibly benefit from this? Ay, que vida, che!

Gold Resource Corp (GORO.ob) up 3.1% at U$4.64. Great slideshow guys...where's the permit? Still no permit? I'm sure you said you'd have the permit by now...what's the problem with the permit?