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8/22/09

YAY! Go GATA! Go ECU.to! Go Bankruptcy! YAY!


Why does GATA insist on pumping arch-dog ECU Silver (ECU.to) to its innocent flock?

  • Maybe it's something to do with the 1.75m shares held by Bill Murphy alone.
  • Maybe it's Wistar Holt's chunk of shares that's so desperately underwater.

But whatever the reason, it's beginning to look like the ECU.to management have been playing dirty with their own joint venture partners. So the question begs; will the whiter-than-whites at GATA condemn the seemingly illegal actions of ECU.to before the company loses its property rights or afterwards? Will GATA at least make the risk known to the poor saps that took their advice about serious and imminent legal risk on the horizon? After all, GATA is the first to cry gold manipulations and crimes to the world but seem to be playing precisely the same sort of games they themselves condemn by using their influence to pump a heavily owned and very dubious stock to their sheep for all its worth. Inquiring minds wonder whether full disclosure will be given by these shillers and cheerleaders.

The below comes from the June 2009 MD&A published by Golden Tag (GOG.v) yesterday. Enjoy.


On June 23, 2009, the Company gave a formal notice to ECU Silver demanding arbitration consequent upon having determined that ECU, the operator of the San Diego joint venture has failed to remedy fundamental breaches of the option and JVA in respect of the San Diego property. The Company became aware of a lien on the San Diego property at the end of February, 2009. A meeting was held in ECU’s offices in early March to discuss this matter and other breaches. Also, Golden Tag’s counsel in a letter dated March 20, 2009 formally notified ECU of these breaches and Golden Tag subsequently received assurances that the breaches would be rectified within the requested 30 day period. The notice of arbitration was issued, when after an almost 4 month period since the original meeting was held to discuss this matter, and despite several follow-ups by the Company during that time, the breaches were not remedied.

Among the breaches of ECU which Golden Tag believes will be substantiated at arbitration are that ECU : (a) Allowed a third party charge against the property contrary to the JVA; (b) Invoiced Golden Tag for joint venture expenses but did not remit the funds to pay joint venture suppliers on a timely basis, some suppliers still being unpaid ; (c) Failed to timely contribute its equivalent pro rate share of funding to the joint venture; and (d) Failed to follow proper procedures and timely financial reporting.

Due to these significant breaches, the Company plans to seek the right to assume operatorship of the property, dilution of the interest of ECU and/or compensatory damages and other relief. At this time, the breaches have still not been remedied. Golden Tag and ECU have named their individual arbitrators. A third arbitrator as outlined in the arbitration process in the JVA is planned to be appointed soon to form the arbitration committee/board.

Golden Tag also learned recently that ECU commenced unauthorized removal of surface stockpiles on the San Diego property in clear contravention and breach of the ECU and Golden Tag JVA. As such, the Company on August 13, 2009 presented a formal notice to ECU Silver demanding the immediate cessation of the removal of this material. Removal of these stockpiles and transport of the material at an approximate rate of 250 tonnes per day was continuing on a daily basis with a fleet of seven trucks making two trips per day. The material was being transported to the nearby processing facility of ECU. There are at least 40,000 tonnes of mineralized material grading 1% Lead, 1% Zinc and 100 grams Silver per tonne on the property. Golden Tag estimates that approximately 3000 to 3,500 tonnes had been removed from the property since on or around March 23, 2009 and until ECU ceased removal on August 14, 2009 after receiving the Notice. The Company has asked ECU for an accounting of the material that was removed without its consent.

The stockpiled materials represent a joint venture asset which cannot be mined or processed without the authorization and approval of the Joint Venture Management Committee. Such authorization and approval has not been requested or approved. This matter will be addressed at the arbitration hearing together with the other breaches mentioned in this report.

Fronteer Development (FRG) (FRG.to): A very interesting chart

If you're really feeling bullish about the future of the world look where this quality miner play was just two years ago....and look at the price it just printed yesterday.

click to enlarge (gets big)

Oh and while we're at it, look at the price we recommended and bought when the stock went under the analysis microscope known as the NOBS report. Toot toot.

8/21/09

The Friday OT: The Onion does The Weather Channel

A nice slice of Onion.



This Friday OT is dedicated to all those Australians currently praying for three days of rain in London (note to all others; if you have to ask you'll never know).

Tales from the Axis of Evo

"Big plane?"
"Da. Very big plane."

On an interest scale, this one rates a solid 9/10 Chez Otto. Direct translation from this America Economia report:

President Evo Morales stated that the Russian government has offered to install a maintenance centre in Bolivia to repair Russian planes that fly in South America.

The President said, during an official ceremony in Chimoré, Bolivia, that the Russian government via its Bolivian ambassador has offered to sell Bolivia an Antonov plane for Presidential use.

"My worry was that if we bought it and there were any mechanical problem it would have to go to Russia for maintenance. The ambassador told me, by recommendation from Russian President Dmitri Medvédev, that they should install in Bolivia a maintenance centre for all Russian planes that fly in South America", Morales said.

According to a report published in the newspaper 'Opinión', Morales added that the Russian government offers to "unconditionally" invest U$5m to create the maintenance plant that may be built in Chimoré at the President's wishes.

The government of Bolivia will ask for a loan from Russia, possibly for U$100m, to finance to purchase of arms and the new Presidential jet that would cost U$30m and be delivered in 2011.

Also, the Bolivian President confirmed the government's intention to construct an international airport with a view to boosting tourism and improving commerce for the Chimoré zone with the rest of the country.

Trading Post (brusque movements edition)


Chariot Resources (CHD.to) down 16.2% at $0.415. This means that Lukas Lundin doesn't have enough shares. This means he's taking a bath. This means I'm happy to be a spectator and not involved. As Baruch rightly said, "I made my fortune by selling too early". UPDATE: CHD.to now 46c and some real fun'n'games going on. I repeat; happy to have already made mine and to be a sideline observer.

Minera Andes (MAI.to) up 3.2% at $0.65 and fighting back from the worst of the week. The financing closed on time and overallotted at 75c and my Rob-O-Meter predicts a PR or two early next week. One for traders to grab a-hold of, perhaps.

Fronteer Development (FRG) up 12.3% at U$4.30...Whoosh! Wheeee! Ching! I love it when this happens. Big kudos to Gary Biiwii for the original headsup on this stock when it was down in the early $2s. I have no idea how he does that squiggly-line chart thing he does, but it seems to work. Proof right here.

Fortuna Silver (FVI.v) up 3.6% at $1.15 and strong, strong, strong. Don't buy cruddy silver miners, buy quality silver miners. This is a quality silver miner. DYODD, dude (cos I have).

An IKN preview


The two main features in this week's IKN Weekly are;
  • A NOBS Fundamental analysis on a small gold miner operating in LatAm. I'm not giving out the name here, but subscribers should know which one it is if I say it's the one we've already bought and then sold for a 42.4% gain earlier in the year. It's time to give it a thorough examination and, now that it has retraced to its earlier valuation, consider whether it's time to re-enter the position.
  • A overview of the current situation in Argentina as pertains to the mining industry. This is the third in the series, having already looked at Ecuador and Mexico from a macro perspective.

Of course all the usual fun and games as well, with relevant news, from the region (interesting stuff in Ecuador, for example) snippets on stocks and updates on our favoured stocks.

Common Sense on Gold

I like Biiwii and reco posts over there quite often. This is because Gary is very good at what he does, proven once again today by this post. He takes a broader look at gold that won't make mega-headlines or bring him thousands of hits to his site. He does not seek the bubble reputation even in the cannon's mouth (if you know your Bill the Quill).

This is the world that adults inhabit. A world where we're not looking round every corner or under every stone for the fashionable conspiracy theory. Here's the link again, go now and be smarter on gold than the bunch of rabid fools so easily swayed by wannabe gurus.

Peru's economic liars: A primer for those who need to get up to speed

It has been brought to my attention that certain higher-traffic bloggers and financial commentators who were plug-dumb enough to buy into the "economic miracle" bunkum and lies spread by Peru's government and central bank lackeys (ably helped along by the dumbasses in suits at the IMF and World Bank) and were silly enough to regurgitate official numbers to their innocent flocks of readers have recently discovered IKN and are beginning to wake up, smell coffee and recognize they've been hoodwinked*.

And thus for their benefit, your humble correspondent has thrown together this little primer on the lies spread by this most pathetic of governments. First let's take in the figures in question via this chart:

And now let's hear what we've been told all this time:

January 19th: "Minister Carranza acknowledged the strength that characterizes the Peruvian economy....with a projected growth rate in 2009 of at least 6%. "

March 8th: "The results obtained from the leading indicator studies estimate an increase (of GDP) of 4.5%, 3.0% and 3.9% for the months of January, February and March 2009, respectively." (Peru official INEI stats office)

April 16th: Commenting on the February 0.17% growth rate registered, Carranza said, "February has been atypical and has been a pothole...additionally the impulse from the finance sector will show in the second quarter of the year."

May 5 2009: ""We likely hit the bottom in the first quarter, and we should see a stronger recovery in the second quarter," he (Carranza) told Reuters."

It goes on and on, with each and all this time your humble correspondent laughing tragic laughs and explaining how much bullshit is being spread by these unclothed emperors. Then finally, after half a year had gone by, some of the dumbasses in suits who fell for this crap for month after month up in gringoworld started seeing reason.

August 3rd: ""The lack of recovery signs following the first half 2009 growth collapse has many increasingly skeptical of Peru's growth story," said Merrill Lynch in a report Monday. "

But it's not just Spongebob Carranza, either. Goes without saying that Twobreakfasts is BSsing (his only talent), but as another example Peru's foreign trade minister Martin Perez is quoted in Newsweek as late as July 30th as saying:
" As a result of these actions, during the first half of the year, Peru's economy grew 0.9 percent. Martin Perez, Peru's minister of foreign trade and tourism, told Bloomberg he expects GDP to grow between 2.5 percent and 3 percent this year.

"Exports have suffered around 15 percent but the stimulus package the government has passed is trying to bring forth internal demand," he was quoted as saying by the magazine.
"
Now we can argue the toss about Peru's final 2009 figure if you like (for the record, he's still aiming high), but there are not one but two factually proveable incorrect statements in that short passage. Firstly, Peru's economy grew 0.34% in the first half of 2009 according to govt figures (that are also BS and way high) and not Perez's 0.9%. Secondly Perez says "exports have suffered around 15%" which is a barefaced lie. Peru's exports dropped 29.66% in the period in question, nigh on double Perez's balderdash. Again, official numbers. And as I hear you asking "what difference does it make anyway, Otto", let me tell you; that 15% understatement makes for two point four billion dollars in exports, or around 2% of Peru's GDP.

These people are liars. Plain and simple, look at the evidence above. This is the country that has a foreign trade minister overestimating foreign trade by $2.4Bn in Newsweek and because it's Amerika's friend nobody bothers to fact check, nobody questions, the nodding donkeys nod their heads and the moving finger, having writ, moves on. Meanwhile, here follows one segment from a whole plethora of posts at IKN that nailed the real story months and months ago. March 16th:
But don't let that worry you, because Twobreakfasts says it's going to be 5% this year, and Carranza says 5% this year, and the Central Bank says 5% this year, and the IMF says 5% this year. I mean, why on earth should you listen to me and ignore all those utterly reliable and impartial sources?
Therefore, the latest story from Spongebob is that Peru's GDP will grow by 2.5% in 2009 and will see "important improvement" to 5% in 2010. Are you going to take him at his word this time? Fool me once, shame on you, fool me twice..............

Moral of this story: Be they your local mayor's office, your own country, Peru or LatAm or Asia or anywhere else you like, politicians do not tell the truth. However the mass hypnosis created by battering out the same "Peru miracle" story from all sources and feeding it to a compliant and brainless media means that the same lies and bullshit pervades into the financial commentaries of those with serious influence that are either 1) too stupid to work it out for themselves or 2) too lazy to bother checking the figures themselves before spreading the BS on. Yeah, that means you, "T"**.


*That was a mouthful of a paragraph, wasn't it?
**Before you mail and accuse me of bolshiness again note that I'm not naming you; my pathetic way of being nice, as I think you're saveable re LatAm.

Chart of the day is....

...Chariot Resources, (CHD.to), three month chart.

The IKN Weekly bought this stock at 20c a few weeks ago and sold this week at $0.415. Yes we have 100%+ winners and yes we take profit without later regrets, but now things are getting political. We bought as a value play, looks like Lundin are doing so too...but on a much grander scale. Here's Mineweb with the story: the PPS could now go much higher:

Lundin Mining Chairman Lukas Lundin is heading a proxy battle for control of Chariot Resources (TSX: CHD) and has proposed a new board of directors-all of whom have ties to the Lundin group of companies.

At 18.3%, Toronto-based Lundin Mining is the largest shareholder of Chariot, which is developing the Mina Justa/Marcona copper deposit in Peru. Mina Justa could produce 2.38 billion pounds of copper, 16 million ounces of silver, plus a small amount of gold.

In a response aimed at Chariot shareholders, which was released early Friday morning, Chariot's Board of Directors called the action of the Lundin directors "an opportunistic attempt to steal control of your company through control of the board without paying a control premium to you for your shares."

However, Lukas Lundin and Brian Edgar, a director serving on both Lundin and Chariot boards, are calling on Chariot's shareholders to replace the current board, who they believe failed to progress Mina Justa/Marcona in Peru, "leading to a consistent undervaluation of Chariot by the market." CONTINUES HERE

8/20/09

The LatAm GDP beauty contest

Know your history, dudes...

And the winner is..........

MEXICO, with a drop of 10.3% in its GDP in 2q09.



Second prize goes to...

CHILE, with a 4.5% drop in its GDP in 2q09.



And third prize is awarded to....

VENEZUELA, its GDP dropping 2.4% in the same second quarter period.



The message was brought to you by IKN, bringing context to Venezuelan figures you'll see bandied about on their own for the rest of 2009.

Usain Bolt and his 200m world record today: 19.19 seconds

Oh my.



This is one seriously, overwhelmingly impressive human being.

Trading Post (shhhhhhhh edition)

Without the need to consult a calendar and simply by noting trade volumes, The Great Mephisto uses his powers of divination and states that today must be a Thursday or Friday in the last two weeks of August (the crowd gasps in amazement and bursts into wild applause).

(insert name and ticker of personally preferred stock here) up 1% on low volumes and no news.

(insert name and ticker of personally preferred stock here) down 1% on low volumes and no news.

Mojitos served. The end.

Petaquilla (PTQ.to): LatAm's worst miner about to hit a serious cash crunch

We've documented just how bad this mining company really is on several occasions.

  • We've mentioned the as-yet unpaid multi-million dollar environmental fines imposed by the government for reckless disregard for the law, the land and the people around the mine.

But we haven't mentioned the big big financial problems at PTQ.to yet.



If we check out the working capital position at PTQ.to, we see that according to the last earnings report it is in deficit to the tune of $7.7m or so. OUCH.

BUT WAIT, THERE'S MORE!

Now that's a lot of money for such a pisspoor company, but the progress towards PTQ.to imminent cash crunch has now been made that much quicker by recent rulings from Panama's government. According to latest reports, in order for the company to make itself legal and get the licences it needs to operate, it will have to:

1) Pay its outstanding fines to the Environment agency ANAM that amount to U$1.93m

2) Pay its amount outstanding to the MICI commerce ministry, precisely $900,000

3) Deposit U$14.3m at ANAM as a bond to cover any future environmental fines caused by the company as well as final clean up charges.

And the funniest thing is that so far not a single dollar of the above U$17.3m is set aside as contingency by the company, so somehow they have to add all this burden on to the books in order to get a licence to operate. Or in other words, I sure hope you're not long PTQ.to right now, dude, because if you are there's a financially religious experience coming your way very soon. DYODD.

Peru ImpEx June 2009 numbers are out...

...and it's the samo samo. For the eleventh month in a row the figures are down YoY.

The main culprit on the exports side is the price of copper and its base metals friends, as 60% of exports from this monocultural economy are metallic. On the imports side, capital goods and construction primaries imports are down 45% and intermediates down 43%. As an aggregate, Peru's trade with the rest of the world is down a whopping 32% and that will only get worse for the July numbers due to the absolute peak in metals revenues for that month in 2008. But don't worry, because everybody's investing in Peru right now according to the government...these numbers can't be right...can they?

How these liars and charlatans must be looking forward to November when they can finally point to a YoY increase in things, but that will only be because world metals prices are better than they were back then. Economic miracle? Gimme a break!

Metal up = Peru up.
Metal down = Peru down.
End of story.


Wow! At last, Bolivia given fair treatment by English language media

It took a travel writer to do it, but this report by Pia Chatterjee in the San Francisco Chronicle is as close to my own (somewhat extensive, I have to say without trying to pull rank) experiences in Bolivia. The whole thing is full of smart insights and well worth reading, but the thing Pia does the best is capture the essence of Bolivia's people. Kudos to you, ma'am. Far better than the crud doled out by the wirepeople and those that pontificate with no basis on superficial observation of politics. Here's an excerpt:

I have loved being in Bolivia. It has challenged and confused me, it has asked me to revise my opinion of the world, and for this I am grateful. In a world that is swiftly becoming homogeneous, Bolivia is unmistakably unique - in the streets the ladies wear their traditional dress, the morning drink is a fiercely sweet api made from purple corn, and the day to day food, full of hominy and crisply fried fish is different from anything else I have ever eaten. We have been treated with a gentle warmth wherever we go - the eyes of our new friends are friendly and secure - everyone we speak to is kind and interested - but there is no excessive curiosity or glee. We have been told to be careful with our belongings in Bolivia, but the one day when, frazzled from our twelve hour bus ride, we leave our debit card in the ATM, it is returned to us. As we spend time in Bolivia, we feel the magic of the country overtake us. We too grow gentler, more compassionate, less needy. When we buy things, we do not bargain - the country is more obviously poor than any where we have ever been, and we find it impossible to haggle over a few cents here and there. When there is no hot water, or internet, or even electricity - as seems to be the case for us in remote areas of the country - I find it hard to get upset. More than 60% of the country lives below the poverty line, yet everyone we meet has found the time to chat with us, ask us about ourselves, offered help. In the place like this, it's difficult to be demanding.
CONTINUES HERE (great photos, too)

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

...a forex update on the major traded currencies down here versus the greenback.


  • Argentina's Peso continues its slow deval
  • Mexico's Peso conforms with reality and shows shillers calling for a "Tequila Effect II" a few weeks ago for what they are; idiots.
  • Peru's Sol and Chile's Peso remain on a level with the dollar.
  • Brazil's Real and Colombia's Peso zooming higher.

8/19/09

Putis

Click to enlarge. It's a high-resolution photo and gets big.

Take a good, hard look at what oppression in Latin America means.

It's not water cannon, it's not tear gas in Seattle, it's 123 people
shot to death by their own army and thrown in a mass grave.

A most excellent and moving report on Putis can be found today at Jacqueline Fowks' blog, Notas Desde Lenovo. Today in solemn ceremony, 92 coffins bearing the remains of people massacred by the Peruvian army in 1984 were handed back to locals, 28 of them having been positively identified.

The village name 'Putis' resonates among Peruvians the same way that 'My Lai' does for North Americans; back in December 1984 the Peruvian army rounded up at least 123 Putis villagers and forced them to dig a large pit. Then, as they were suspected of being sympathetic to the Shining Path (Sendero Luminoso) terrorists they were mown down by gunfire and thrown into the communal grave of their own making. The remains of children as young as one year old were found when the site was excavated last year (photo above).

For an overview on what happened at Putis, the English language wikipedia page does a fair job and it's linked right here. But Fowks' report is far better.

Zero Currency 3

August 19

Silver juniors update

Here's a chart showing the year-to-date performance of Fortuna Silver (FVI.v), First Majestic (FR.to), MAG Silver (MAG.to) and ECU Silver (ECU.to).


  • The good news is that Otto has been telling you to buy FVI.v all year (as well as telling you to avoid MAG.to and ECU.to like the plague, with "not like so good" mentions of FR.to along the way, too).
  • The better news is that people are actually beginning to believe me on this one. Y'see, I really wasn't joking, was I?
  • The best news is that (as IKN Weekly subscribers now know after last week's edition) there's plenty more upside left in FVI.v and we now have a new, improved price target.

Stop buying dogs and get wise on LatAm junior miners. Subscribe to The IKN Weekly. End of blatant promo. Have....Nice....Day.

Vox Populi

Here's a chart showing the latest presidential approval ratings for LatAm leaders. The figures are all those take so far in August and are from the authoritative Angus Reid Global Monitor page on Latin America, right here:


  • Funes in El Salvador is enjoying his honeymoon period.
  • 'Chelle in Chile is enjoying her swan song..we'll miss her.
  • Evo in Bolivia is up a point since the last poll in April
  • Studmuffin in Ecuador is down a point since the last show
  • And then we have Twobreakfasts. Isn't it amazing how this dude is the one made out to be the best of the bunch by the idiot English media? Shome coinshidensh, shurely ossifer!

So what's the next argument, blue-eyes? The little brown people down here don't know what's good for them, is that it?

Top note on Peru from Reuters


HT to Justin Delacour at LANR for the headsup on this report from Terry Wade at Reuters. He nails the story here and even points out at the end that Bolivia will grow faster than Peru this year....that's pretty readical stuff for MSM right now, but it'll be getting more airtime as the year closes out, that's for sure.

Dudes, I've been telling you this all along but now it's getting some official, bigmedia airtime. Here below is how the Reuters story kick off, but click through for the rest as it's all good stuff. Meanwhile, for those of you versed in the language of Cervantes that want to get nittygritty on the latest numbers, this report from Farid Matuk is well worth your time. Meanwhile here we go with Reuters:

ANALYSIS-Peru's hopes of being an 'Asian tiger' fade

Less than a year ago, Peruvian elites smugly began calling their country a 'Latin tiger' and predicted that it had entered a magical phase of constant economic growth that would outshine the rest of Latin America.

A leading minerals exporter, it grew every year for the past decade and capped off the heady days of 2008 with a 10 percent surge as China bid up global metals prices. But this year, Peru will be lucky to expand at all. The slowdown has been sharper than forecast and exposed the country's overreliance on raw materials exports, with minerals making up 60 percent of all overseas sales. Unlike 'Asian tigers' such as South Korea and Taiwan, which boomed as they became manufacturers of everything from cars to microchips between the 1960s and 1990s, Peru's economy still largely depends on the cyclical whims of commodities prices and exports have plunged 30 percent since December. Most economists say Peru will grow less than 1.0 percent this year, and the government appears to be backing away from its downwardly revised forecast of 3.0 percent..............
CONTINUES HERE

Spellcheck Wednesday: It's a credibility thing, Enders


Spelling mistakes happen (hey, my keyboard dyslexia should be clear by now to regulars), but you kinda expect serious media outlets to make the effort and spell things correctly. Down on this side of the Darien Gap the classic offence is to spell Colombia with a 'U', making it out to be a university in the USA or part of a regional name in Canada. Here's an example with thousands more available. Typos of South American things can sometimes be put down to genuine mistakes. Here's an example from Reuters today with "La Oyoya" instead of the correct 'Oroya' (though admittedly they get the word right one line later). These are the ones that you shrug and go "yeah well, errar humanum est" and you know that when they correct, Reuters are straight with you and will mention in the leader that a correction has been made.

However there are others that speak volumes. For example, our old blue-eyed whitey pal John Enders is talking nonsense in The Miami Herald again today. Reader 'James' sent in this link to Enders' latest ball of crud published yesterday. James also said in his mail that;
Enders strikes again, this time with serious mis-representations about the new Bolivian constitution, community justice, conditions for modifying the constitution and Evo's re-election.
Well said James, but it is telling how Enders' bigoted attempts to sound like an authority on the region get blown asunder as he can't even spell the word "Quechua" correctly. Here's the excerpt from Ender's copy:
"...government's public administration school would begin training bureaucrats to speak Aymara, Quetchua and Guarani...."
The clear disrespect towards indigenous continues with his incorrect spelling of Guaraní (for those with an eye for accents). This guy cares so much about slagging down Evo Morales, but when it comes to anything approaching a fact on those strange brown people that surround him at every turn (bar of course his idea of the promised land, downtown Santa Cruz) he just shows himself for what he is; a dumbass.

A good reporter tells people facts and lays off his own prejudices. John Enders cannot do either of these. Pathetic work from a country that, due to the likes of John Enders, suffers from a near-complete lack of English language accounts on the reality of matters.

UPDATE: El Duderino rips the Enders piece to shreds right here.

Site of the day

Check this one out.

Called "worldometers", it's a realtime running total of world statistics, like births, deaths, expenditures, energy use...all sorts of things. Fascinating stuff for number wonks (guily, m'lud). Thought-provoking and definitely worth a couple of minutes of your time.

Here's the link again, just in case. Thank you reader 'JR' for the headsup, always a pleasure, sir.

Chart of the day is....

...copper, 90 min candle:

This follows on from yesterday's CoD that highlighted LME warehouse inventories (though they dropped just a tad yesterday). This is also why your humble author wrote to IKN subscribers yesterday morning to say "profits taken" on Chariot Resources (CHD.to) after registering a 100%+ gain in our position.

8/18/09

Annals of niche marketing, canine edition


Totally OT, apart from another large chunk of mondo bizarro evidence that shows us down here that you dudes up there really will buy anything. I've just been sent the link to this website by a regular reader who's as cracked as this author (yeah, I mean you, MR). Here's the front page blurb and seeing is believing. $110 for ten years!

You've committed your life to Jesus. You know you're saved. But when the Rapture comes what's to become of your loving pets who are left behind? Eternal Earth-Bound Pets takes that burden off your mind.

We are a group of dedicated animal lovers, and atheists. Each
Eternal Earth-Bound Pet representative is a confirmed atheist, and as such will still be here on Earth after you've received your reward. Our network of animal activists are committed to step in when you step up to Jesus.

We are currently active in 20 states and growing. Our representatives have been screened to ensure that they are atheists, animal lovers, are moral / ethical with no criminal background, have the ability and desire to rescue your pet and the means to retrieve them and ensure their care for your pet's natural life.

We currently cover the following states:
Maine,New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, Wisconsin, Minnesota, Michigan, Arkansas, Mississippi, Tennessee, Kentucky, Colorado, Oklahoma, Kansas, Washington, Oregon, Idaho and Montana ... and growing.

Our service is plain and simple; our fee structure is reasonable.
For $110.00 we will guarantee that should the Rapture occur within ten (10) years of receipt of payment, one pet per residence will be saved. Each additional pet at your residence will be saved for an additional $15.00 fee. A small price to pay for your peace of mind and the health and safety of your four legged friends.

Unfortunately at this time we are not equipped to accommodate all species and must limit our services to dogs, cats, birds, rabbits, and small caged mammals.

Thank you for your interest in Eternal Earth-Bound Pets. We hope we can help provide you with peace of mind.

Please visit our FAQS page

Trading Post (spiral staircase edition)

Getting one installed in the house today. Gawdawful racket right now, but it'll look good later. Today we're featuring a few favoured stocks, regulars on the beat only.

Vena Resources (VEM.to) up 7.9% at $0.41 on strong volumes and this strong news release. Check it out yourself, but it's good for the cash flows at VEM. By the way, the Lima quoted stock is up 18% on this news with great volumes recorded, too. People in Peru know what the formal linking up with the respected local miner IIMPUL signifies.

Fortuna Silver (FVI.v) up 5.8% at $1.09 and this stock has looked strong. At other times the panic sale seen yesterday morning would have set the tone for weeks but now it's just bouncing right back. Good volumes now the norm rather than the exception, another sign of times changing for the better here. This stock was the NOBS fundamental report in The IKN Weekly last Sunday and subscribers are now bang up to date on the company and know all they need to know about it.

Dynasty (DMM.to) up 7.3% at $3.22 and an ok-ish response on low volumes to today's PR. With a bit of radar this is a double from here. DYODD, dude.

Nadagold (NG) down 2% at U$3.51 and not joining in today's rebound. That's probably because it's a total dog and all the usual NYC lambs that get suckered in are lounging around the Hamptons right now instead of doing any work.

Rusoro (RML.v) UNCH at $0.38 and back to doing low volumes again after last week's improvement. Methinks that newsflow will improve soon at the company. One for you traders to consider. DYODD

ECU Silver (ECU.to) and this week's coveted award

Yesterday evening around the cocktail hour, instead of getting on with the work I should have been doing your humble correspondent got into a conversation with someone we'll call An Investor Friend ('AIF'). It was in fact AIF that gave me an initial "hey look at the books of this dog" comment on ECU Silver (ECU.to) some moons ago and so the conversation turned to that stock. AIF regularly does something that I gave up doing a while ago, namely reading bullboards on stocks (for me a case of 'too much noise, not enough info' more than anything else). Anyway, my friend AIF started sending me links to comments made by ECU.to bulls recently written on the boards.

I was amazed. I had no idea.

There are, apparently, a whole army of self-appointed mining experts out there pushing this stock to the gullible and less informed. For sure this isn't a new story and it goes without saying that in typical bullyboy style pointing out a few facts about this arch-dog of a silver miner is immediately called an idiot (and much worse), but the way that solid facts are ignored, abuse is heaped and the jam tomorrow story is pumped non-stop on an organized, relay-style basis between several old hands smacks of something far more sinister. So on reading the junk sent over by AIF I whacked a few simple charts together. Here are four that anyone even remotely considering ECU as a trade should consider. This stuff, ladies and gentlemen, is BASIC.

First, assets.
I look at this and laugh. The claims of fixed asset worth are the only thing that makes this company attractive, but if ECU had to sell land to raise cash the final prices wouldn't be anywhere near the purely subjective numbers attached to its property assets as featured above. Pure smoke'n'mirrors. Meanwhile, real objective values in the form of current assets have been whittled to virtually nothing, this despite the BS hype over the cash flow that would be generated by the new oxide plant that's been running since early '09. And it's worth reminding ourselves that ECU.to actually raised cash via share placement in 2009! The cash netted by selling over 43 million shares to a naive market has all-but disappeared into this money pit. ECU.to is running a $99m deficit since inception, fer chrissakes! WHERE HAS ALL THE MONEY GONE?

Now the debt load at ECU.to.
How much airtime to the pushers and shillers give to this part of ECU.to? The company has virtually no cash ok, but what's with all the debt that comes due this year (and on which ECU paid $641k interest last quarter)? We hear all about the ridiculously hyped oxide mill (that's running out of mineral feed so quickly that the company has seemingly taken to stealing from its own JV partner) but any cash generated is just being used to pay off interest on loans pacted at 15% annual. Not to mention how the majority of that principle is now due soon...how on earth are they going to pay it off without reaming the people holding stock?

From those two, here's the utter trainwreck known as working capital.
What's your definition of "we have no money"? What's your definition of "we have squandered over $47m in cash since 2q07?". That's mine above. Let's make this really simple; if ECU doesn't raise at least $20m and soon, it won't have enough money to do anything. Not pay wages, not release more BS news releases, not offer its directors free shares and undated loans. IT HAS NO MONEY. Got it? And how do you think it's going to raise cash? Yep you got it, another bullshit dilutive financing. Right now I'd guess 50m shares at 40c (with the half warrant kicker, of course) but that could get much, much worse if the market wakes up to this stock and drives the PPS to where it belongs, because this company is also the living, breathing definition of "a sitting duck" right now.

And finally, just in case you think that the people running ECU.to are unfortunate victims of circumstance, here's how they've awarded themselves $5.89m in stock options in the last seven quarters.
Yes, that's right. Despite running the stock into the ground, getting way overburdened with debt due in less than 12 months and letting working capital swing from +$30m to -$17m in the space of just 18 months, the people that run ECU.to have awarded themselves a heap of bonus options; talk about a sense of entitlement (and that's putting it as mildly as possible).

But this week's coveted award doesn't go to ECU.to management. It is reserved for the message board shillers and bullshitters that proclaim themselves experts. Just by taking one quick look at the books, anyone with an ounce of ken about miners and how they run can see that this company is a disaster movie with no happy ending. Therefore those self-proclaimed 'experts' that troll public (and private) message boards are either pig-ignorant about miners (perfectly possible) or they are fully aware of the major problems faced by ECU Silver in its very immediate future and refuse to mention them in their non-stop bullish postings. In which case they are simply liars. Either way there is precisely zero reason to take these people seriously, either about this stock or any other stock they might opine upon.

So therefore, ECU.to bullboard shillers and bullshitters, you collectively win this week's coveted award. Waste your own money on this dog if you like, but what right do you have in trying to palm off a full scale trainwreck of mining company to those that read bullboards and hoodwink them into believing its a company with some bright future ahead. Your analyses are disgraceful and have the sole aim of conning other people and covering your own ego, back pocket, reputation or (most likely) a combination of the three. Your time is now up. Enjoy, dumbasses:


UPDATE: The hatemail has started already, so let's point out here on the blog nice and clearly that I have no position whatsoever in ECU Silver (ECU.to). In fact I've never owned the stock. That's also true for family and (as far as my knowledge goes) any friends. That clear enough for you?

Peru's media of record

Honestly, this is not only what is known as 'the serious newspaper', it's also the main source of business and financial news in Peru. Welcome to the front page of today's 'El Comercio', government lapdog rag to beat them all.
click for better focus

Joseph Goebbels is alive and well and living in San Borja.

Dynasty's IR dept finally bothers to inform the world

One line from IKN16 published two days ago finished off the section on Dynasty Metals (DMM.to) and said:
No matter: Dynasty Metals is still a buy, confirmed by a solid quarterly report. Now if only their IR department would move up from “pathetic” to simply “mediocre”....
And surprise surprise, the IR dep't must have got some pressure and talk of layoffs, because 30 minutes ago the company released this PR to update shareholders on progress. However IKN sends a message to the company right here and right now; Dear DMM IR dudettes&dudes, this PR doesn't mean you can go back into hiding for another three months. I've received various complaints from long term shareholders that you guys can't even be bothered to return calls, so get off yer butts and show some respect to the people that pay your rent. Great company, crappy promo people.

With that small rantette out the way, here's the PR pasted out:

VANCOUVER, BRITISH COLUMBIA--(Marketwire - 08/18/09) - The management of Dynasty Metals & Mining Inc. (TSX:DMM - News) ("Dynasty" or the "Company") has recently completed a thorough review of its operations and hereby provides the following update to shareholders.

Zaruma Gold Project

The Zaruma Gold Project comprises 46 concessions located in the El Oro Province of southwestern Ecuador. The Company has mine development and plant operating permits to mine and process materials from several concessions on which the Company conducted exploration activities, the results of which are included in the gold resources estimate (see Table 1). The Company will make application for additional mining permits in the area as required and as new resources are identified through exploration activities.

Processing Plant Commissioning

The Company has successfully commissioned all sections of its gold processing plant at Zaruma, with the exception of the carbon stripping section where gold, which has been absorbed into the carbon, is stripped and separated from other constituent metals. Once the level of gold absorbed in the carbon has reached capacity, the Company will commence the carbon stripping process and pour its first gold bar, which is expected in the near future.

The plant is currently operating one eight hour shift during the day and is processing lower grade material mined during the development of the declines (see "Zaruma Mine Development Activities") in order to train a sufficient number of employees in the operation of the plant so that it may be operated twenty four hours a day. Training is being supervised by Trevor McLoughlin, who was recently appointed the Project's new Plant Manager. Mr. McLoughlin has 25 years of experience mining, commissioning and operating gold plants and currently resides in Ecuador.

Minor completion and testing delays from previously announced time estimates were primarily the result of a mechanical problem with the main power generator, which has been resolved. Two additional generators are now installed and operating which can be used to provide a back-up power source. The Company is also reviewing several options to determine the most cost effective way in which the plant can be connected to the main power grid.

Although the Company's current target for commercial production is 300,000 tonnes per annum ("tpa"), the installed capacity of the crushing and conveying sections is in excess of one million tpa, the capacity of the milling section is 800,000 tpa and the capacity of the wet (carbon absorption and carbon stripping) section is approximately 400,000 tpa.

The design of the plant is such that additional tanks may be added in the future to expand the wet section capacity firstly to 800,000 tpa and then to one million tpa, while the modular design of the milling section allows for the addition of a third ball mill to increase the milling section capacity to one million tpa. The current estimated capital cost to upgrade the wet section to 800,000 tpa is approximately US$2.5 million and to upgrade the entire plant to one million tpa is less than US$5 million.

Robert Washer, the Company's President and Chief Executive Officer, commented: "The Company's gold plant at Zaruma is a world class processing facility, which was constructed on budget in a country that lacks an infrastructure for large scale mining and a familiarity with modern plant construction. We are extremely proud of this achievement."

Photographs of the Zaruma Gold Project will continue to be updated and are available on the Company's website at www.dynastymining.com.

Zaruma Mine Development Activities

The Company continues with the construction of three declines, which are approximately 15 kilometres or less from the processing plant, and is carrying out further exploration activities to identify sites for new declines. As expected, the material mined during the construction of the declines is of lower average grade than the average grade set out in our resources estimate. Such average grade should increase as Dynasty drives closer to targeted resources, which reside at deeper levels.

The Company has implemented measures to address normal course start-up challenges as well as certain extraordinary circumstances, including the introduction of new mining legislation (see "Exploitation Contract"), which have delayed the commencement of commercially viable mining operations at Zaruma. Specifically:

- The Company has built its own equipment repair and refurbishment workshop, which currently employs approximately ten mechanics and fifteen other employees. Anthony Cadorette, a US citizen with thirty years experience repairing and refurbishing underground mining equipment recently moved to Ecuador and is now in charge of the workshop. The Company was required to do this since there are no modern underground mining equipment workshops or a sufficient amount of suitably qualified mechanics in Ecuador who are able to adequately service the Company's underground mining equipment.

- The Company has opened the Dynasty School of Mines to train employees since there is a shortage of qualified personnel to operate specialized underground mining equipment.

- The Company is now accumulating larger inventories of commonly used mining supplies and equipment spares as well as securing additional sources of supply to avoid future delivery delays from outside the country.

- The Company has made recent changes to its labour scheduling and mining procedures to increase efficiency, which was affected by recent changes to the labour laws in Ecuador.

The Company's President has been in Zaruma for the last month re-organizing the mine operations and has addressed each of these problems. In addition, the Company recently hired Robert Anderson, who has moved to Ecuador, as project manager to oversee mine development. Mr. Anderson has in excess of 40 years of underground mining experience including fifteen years as the owner-manager of an underground mining development contracting company based out of Australia that managed projects in Western Australia and throughout the world. During this time Mr. Anderson acted as lead manager on numerous underground mining projects, the largest of which mined up to one million tonnes of material per annum using narrow vein technology.

Both Mr. Anderson and Mr. Washer are working together to revise systems and procedures to increase production and expedite development using existing assets.

Mr. Washer further commented: "We believe it is only a matter of time before we establish commercially viable operations. All of the prerequisites are now in place and the remaining issues before us are well understood. We are very pleased that Mr. Anderson has joined the Company as project manager to help current management expedite and supervise the implementation of our mine development plans."

Exploitation Contract

The Ecuador government continues to advise that the regulations, under which the new Mining Act will be governed, are due for release in the near future. It remains Dynasty's understanding that the regulations will set out the framework in which exploitation contracts will be settled. As a result of ongoing dialogue with members of the mining ministry and other government officials, the Company is developing a discussion paper for presentation to the government in order to expedite contract negotiations once the regulations have been enacted.

Dynasty continues to work closely with government officials and regularly apprise them of its progress and plans with respect to the Zaruma Gold Project. The Company has not received any indication that such plans are at risk as a result of probable government intervention or policy.

Cash on Hand

The Company currently has approximately $10 million on hand. Management believes that such amount is sufficient to meet its primary objective, which is to establish commercial production at Zaruma. The Company will require additional cash resources in the future, either from future cash flows or from financing, to meet other business objectives including the development of other principal properties.

Other Projects

In addition to the near production Zaruma Gold Project, the Company owns the advanced-stage Jerusalem Project, and a highly prospective exploration project, the Dynasty Copper-Gold Belt, which includes the Dynasty Goldfield.

The combined resources estimate for the Company's three Projects is as follows:



Table 1 - Combined Total Resources Estimate for Dynasty Metals & Mining Inc.
---------------------------------------------------------------------------
Estimated Ton- Gra- Gra-
Gold Tonnes Grade Measured nes de Indicated Tonnes de Inferred
Resources (000) (g/t) (ounces) (000)(g/t) (ounces) (000)(g/t) (ounces)
---------------------------------------------------------------------------
Dynasty
Goldfield 3,155 4.6 470,000 3,516 4.8 544,300 7,652 4.7 1,151,700
---------------------------------------------------------------------------
Zaruma 1,568 13.9 702,100 915 13.9 408,100 3,382 12.7 1,383,400
---------------------------------------------------------------------------
Jerusalem 602 12.6 239,730 864 12.5 345,370 1,927 11.5 710,000
---------------------------------------------------------------------------
Total 5,325 8.2 1,411,830 5,295 7.6 1,297,770 12,961 7.8 3,245,100
---------------------------------------------------------------------------


---------------------------------------------------------------------------
Estimated Gra- Ton- Gra- Gra-
Silver Tonnes de Measured nes de Indicated Tonnes de Inferred
Resources (000)(g/t) (ounces) (000)(g/t) (ounces) (000)(g/t) (ounces)
---------------------------------------------------------------------------
Dynasty
Goldfield 3,155 35 3,560,200 3,516 38 4,340,000 7,652 34 8,337,000
---------------------------------------------------------------------------
Zaruma(i) n/a n/a n/a n/a n/a n/a n/a n/a n/a
---------------------------------------------------------------------------
Jerusalem 602 90 1,760,400 864 95 2,627,000 1,927 101 6,276,470
---------------------------------------------------------------------------
Total 3,757 44 5,320,600 4,380 49 6,967,000 9,579 47 14,613,470
---------------------------------------------------------------------------
(i) No silver (Ag) analyses were done for Zaruma.

For further information regarding resources estimates for the individual Projects, readers are referred to the technical report entitled "Independent Geological Evaluation, Dynasty Goldfield Project" by AJ Maynard, MAIG MAus IMM dated October 30, 2007; the technical report entitled "Independent Preliminary Assessment, Jerusalem Project, Zamora Chinchipe, Ecuador" by WJ Holly, MAusIMM FFin and AJ Maynard, MAIG MAus IMM effective February 27, 2006 (revised January 21, 2007); and the technical report entitled "Independent Preliminary Assessment, Zaruma Project, El Oro Province - Ecuador" by WJ Holly, MAusIMM FFin and AJ Maynard, MAIG MAus IMM dated August 21, 2006, all of which are available on SEDAR.

Jerusalem Project

The Jerusalem Project comprises one 100% owned concession, located in the Zamora Chinchipe Province of southeastern Ecuador, about 40 kilometres east of Zamora and immediately south of Kinross Gold Corporation's Fruta del Norte project.

The Company has presented applications to, and is awaiting a response from, the Ecuador government for both mining and plant operating permits at the Jerusalem Project. These applications were submitted prior to the introduction of the Mining Mandate, which suspended the processing of all such applications.

The proposed plant for Jerusalem will initially be designed to produce approximately 100,000 ounces of gold annually and, although smaller in size, will include similar processing methodologies as those employed at Zaruma. The Company has already purchased the ball mills and crushers for the proposed plant. The timing of the commencement of construction at Jerusalem is currently uncertain and will primarily depend upon the issuance and terms of the yet to be released mining regulations, the timing of the issuance of permits, the economics of the exploitation contract the Company concludes with the Ecuador government and the availability of capital.

Readers are cautioned that a feasibility study has not been completed on the Jerusalem Project and there is no certainty the proposed operations will be economically viable.

Dynasty Goldfield

The Dynasty Copper-Gold Project lies within a mineralized corridor, approximately 90 kilometres long and 20 kilometres wide, in the Loja Province of southwestern Ecuador. To date, the Company has identified eight mineralized porphyry-style alteration zones within this corridor, each associated with a system of gold and silver vein swarms. The total Project area covers 980 square kilometres and consists of 52 100% owned concessions. To date, the drilling and resources have been concentrated in the Dynasty Goldfield, which is one of the eight zones.

In addition to the approvals to undertake exploration and drilling at the Dynasty Goldfield, the Company has also received approval to open two declines and mine the materials at these concessions. Given the proximity of the Dynasty Goldfield to the Zaruma Gold Project, the Company is currently evaluating the economics of mining and transporting materials from the Dynasty Goldfield to Zaruma for processing in the future.

Julian McDermott, a member of AUSIMM (Australian Institute of Mining and Metallurgy) and a "qualified person" within the definition of that term in National Instrument 43-101, has supervised the preparation of the technical information contained in this news release.

About Dynasty Metals & Mining

Dynasty Metals & Mining Inc. is a Canadian based mining company involved in the exploration and development of mineral properties in Ecuador.

The Company has the near production Zaruma Gold Project, the advanced-stage Jerusalem Project, and a highly prospective exploration project, the Dynasty Copper-Gold Belt, which includes the Dynasty Goldfield.

Dynasty Metals & Mining Inc.

Robert Washer, President and CEO

For further information please visit the Company's website at www.dynastymining.com.

Chart of the day is...

...LME warehouse copper, now over 294,000MT

Just keeps on creeping up, dudettes and dudes.

UPDATE: Bloomberg wins the "Headline of the Day" award with this one:

8/17/09

Trading Post (happy days edition)


All sorts of carnage to choose from out there today, but let's not worry too much about the bad and get überselective. Only good things that put silly smiles on happy Otto's face get reported here today.

Troy Resources (TRY.to) up 4.4% at $1.68n with bits of volumes, too. You go girl, a nice wodge of green on a very red Ottoscreen.

ECU Silver (ECU.to) down 7.7% at $0.48...hahahahahahahaahahaaaaaaa, the market lovin' that quarterly as much as your humble servant. Woof Woof..Down Boy..Down. A new 52 wk low beckoning, which is nothing short of jawdropping with silver at $14 an ounce.

Nadagold (NG) down 8.2% at U$3.46 and starting to move towards its true valuation.... about a buck fifty I suppose.

Cosan (CZZ) down 7.5% at U$7.25 despite talk brewing of a sugar shortage in the USA. CZZ was the one that Otto called "take profits at $8" last week...that worked.

Minefinders (MFN) down 4.9% at U$8.03. Seriously Thomas, that balance sucked. When are you gonna admit your dumbassery? Shilling for your dinner will get you in trouble over the long run, dude.

Petaquilla (PTQ.to) down 10.3% at $0.52 and LatAm's worst mining company (yeah, even worse than ECU.to) getting some real BOHICA treatment. Find out why later at IKN as your humble servant breaks news that hasn't reached the English speaking world about this arch-dog-of-all-dogs illegal scumbag miner from hell.