Subscribe via email, get all daily posts sent to you next day (and without all the annoying ads)

8/29/09

Today's must-read post on Honduras...

...comes from Honduras Coup 2009. Once again somebody who actually knows the country and knows what they're talking about shows how the coup apologists' arguments do not stand up to reason.

Otto got friend

aaaah! Jealous yet? I am

And friend got blog...and boat.

Some great photos of the idyllic pleasures of sailing up North on offer...well worth checking it out.

Ecuador and Chevron: What 'clash of cultures' really means

The LA Times is running a story today entitled "Chevron, Ecuador and a clash of cultures". It's a fairly good summary of the situation in the ongoing legal dispute from the environmental crimes 'allegedly' committed by Texaco/Chevron in Ecuador, the last paragraph summing up the mood:
"When the verdict is issued in Lago Agrio, it will prompt a round of appeals and other legal procedures, possibly in Ecuador and certainly in the United States, where Chevron has assets. The plaintiffs promise they will never give up. The company has assured investors that it will never pay. And the Amazon and its people will remain unhealed."
Which is sad but true. The article even tries to explain the concept of 'pachamama' a little further than the normally scant attention paid to it by English media, so that was quite nice. However the title got me thinking that calling it all a 'clash of cultures' is pretty stupid, as the only culture clash going on here is "We crapped on your culture in a way we'd never do to our own culture". And that's all you need to know about culture in this case. Good story, bad title.

The Amerikan Dream comes to Peru

CONSUME MORE! is the answer to all our prayers these days, and the fact that a reader yesterday sent me this link to the great Janis Joplin singing 'Oh Lord won't you buy me a Mercedes Benz?'......



..... fits nicely with the story below.

Peru's Minister of Production, Mercedes* Araoz, spent yesterday exhorting her minions to "drink more Peruvian coffee" as per capita coffee consumption in Peru is around 0.25kg a year, which compares to 5kg in Brazil and about 14 metric tonnes in Colombia**. In her words:

"If we in Peru consumed 5kg per person we would consume all our exportable supply. So we could double national production for the grain."

Mercedes Aráoz said that if a person gets up early the best thing to do is to have "a little coffee. It's a healthy drink, a good antioxidant and energizing. I drink it pure. Also, it's not true that it stops you from sleeping", she said.

So next we'll have Peru Chamber of Aviculture wheeling out Aráoz for its "Eat More Chicken" drive, the sugar cane people with their "Sweeter The Better" and "Diabetes Is Not A Problem, Oh No" campaigns, then the national council for chocolate cake and its "Stuff Your Face and Get Fat Your Country Will Thank You For It" promotional tour. And so the emerging market countries raise their GDP and are applauded as they aspire to the model offered by all those developed world wondercountries.

The more you consume the better your life is.


Then comes the fitness club sector and diet foods....more GDP! And healthcare! And insurance! Ahh, ain't life wonderful?

*shome coinshidensh, shurely, ossifer
**well....8kg in fact, but I like a laugh

8/28/09

Understatement of the Day Award goes to....

...Michael Warren of AP for the following paragraph from his report on the UNASUR Bariloche summit today.

Latin American leaders tend to be suspicious of foreign militaries in a region where U.S.-backed dictatorships killed and tortured their own citizens only decades ago. The unresolved coup in Honduras — by a military with close U.S. ties and training — worries them as well.

Though fair's fair, the report is a pretty good, balanced view of what went on today. And yes, I did say AP back there.

The Friday OT: AC/DC, Whole Lotta Rosie

A full strength straight shot of rock and roll from one of the world's best live bands.



In your face raw music, instantly recognizable voice, instantly recognizable guitar. Rock In Peace, Bon Scott. Keep on rocking Angus.

Peru GDP down 1.1% in 2q09

That's what Reuters (spanish language) said. As well as the headline number:
  • Investment down 24.6%
  • External demand down 6.3%
  • Internal demand down 5.4%

Economic miracle? The only miracle left is that people actually listen to Twobreakfasts.

UPDATE:
Here's the link to the full 43 page INEI 2q09 bulletin...fun for all the family.

Trading Post (naked capital edition)

Before moving to my crummy and myopic viewpoint of the big bad world of market (version Friday in late August) please check out this great post over at Naked Capitalism, "The Five Stages of Panic Buying". Essential headcheck material.

Jaguar Mining (JAG) up 9.1% at U$9.95. File this under WTFDIK, anyway?

Dynasty Metals (DMM.to) up 4.9% at $3.46. Whaaat? It's finally rallying a bit? Oh oh oh, I feel all giddy. Hey dudes, when it doubles you'll remember me.

Amarillo Gold (AGC.v) down a penny at $0.74 and I happen to know for a factual fact that one of the smarter investor/readers that hangs round this humble corner of cyberspace bought all that Haywood could sell to him at 70c earlier today. Nice play, sir, you got yourself a real bargain there. DYODD, dudes.

Troy Resources (TRY.to) up 4.4% at $1.91. You KNOW it's true. Highfives with Cormier, folks, that guy has the eye.

Minera Andes (MAI.to) up a penny at $0.67 and once you're relaxed about the fact it's being suppressed, it's really quite funny to watch the scumballs at work. Hey, anyone think it might be HOC.L exacting revenge for McEwen's letter to shareholders? That'd be funnier still.

Gleichen Resources (GRL.v) up 1c at $0.74. Remember this one? Yeah, the one with Team Canada™ suddenly on board and buying out that cool Teck asset in Mexico? I own a few and there's a small but interesting snippet of news for subbers this weekend regarding it. DYODD.


MAG Silver (MAG.to) (MVG) laughs at its shareholders again


MAG Silver (MVG) (MAG.to) management yet again says one thing and does another. For the sake of CAD$38,850 (the gross profit on the deal), the CFO at MAG Silver prefers to send yet another "we prefer to sell our own stock to you saps" signal to the market.

MAG Silver Corp. (MAG)

As of August 27th, 2009
Filing Date Transaction Date Insider Name Ownership Type Securities Nature of transaction # or value acquired or disposed of Unit Price
Aug 27/09 Aug 11/09 Hallam, Frank Direct Ownership Common Shares 10 - Disposition in the public market -17,500 $5.220
Aug 27/09 Aug 11/09 Hallam, Frank Direct Ownership Common Shares 51 - Exercise of options 17,500 $3.000
Aug 27/09 Aug 11/09 Hallam, Frank Direct Ownership Options 51 - Exercise of options -17,500 $3.000


We also note in passing that CFO Frank Hallam prefers to ignore TSX directives and file his trades after the allotted time period of 10 trading days, just another example of the lack of respect shown to others by the people in charge of this directionless operation. So with another 438,000 or so options at $3,00 to dump on the market still left in his pocket, Hallam has plenty of ammunition to make money and further dilute the share base at the expense of the loyal retail sheep around him.

If it were only one or two occasions, then fair enough. But the insider selling has been non-stop all year as witnessed by these previous posts. Speaking of previous posts, back on December 4th 2008, just after the Fresnillo buyout offer came, your humble correspondent said the company was "dead meat" and according to my calculations the only documented case of resurrection in the last 2,000 years has not been added to by this company. Yet another example of how great rocks can be wasted by a mediocre, self-serving bunch in charge.

DYODD.

The UNASUR Bariloche Summit: What you need to know













Chart of the day is....

...from Desjardins (via a reader's mail..thank you A. Reader :-)

Now that's what Roubini's talking about with his "W". Any one with a sense of history cannot possibly be automatically bullish at this moment.

What has been will be again,
what has been done will be done again;
there is nothing new under the sun.
Ecclesiastes 1:9-14

There is nothing new under the sun but
there are lots of old things we don't know.
Ambrose Bierce, The Devil's Dictionary


8/27/09

Bolivia's right wing thugs resort to violence because.....

...they know they can't win by any democratic or fair means.

Today, Gallup International released the results of their survey on the December 6th Presidential elections. Here's how voter intention stands right now between the candidates for the job.
Let's be clear: This is not a tough one to call, folks.
(click to enlarge)

According to Gallup, even if the fractured and rabid opposition bandied together and united behind a single candidate, the Evo would still score at least 58% of the vote and possibly a lot more. Also important is the low number of undecided, as minds are already largely made up. Evo wins, period. Get used to the fact, wingnuts.

Also (and this is pretty impressive), according to Gallup, as things stand Evo wins the popular vote in every single one of the nine departments of Bolivia. Here's the chart of the region-by-region voter intention...

Opposition=toast
(click to enlarge)

..and even in the lowest polling department of Santa Cruz (natch) he gets enough to be top dog against a fractured opposition and would be neck and neck if opposition united. As it is, he scores over 50% of the vote in four regions, easily wins three, probably wins Beni whatever happens and only has any chance of losing amongst the fascists and Nazi-worshippers of Santa Cruz...y'know, the ones John Enders speaks so highly of all the time.

Here's a report that includes this from Gallup (translated):
"The theory of ethnic division (place an indigenous candidate against Evo to split the MAS party vote) has not gained any traction, as neither Víctor Hugo Cárdenas, René Joaquino or Román Loayza have any popular support. This simply ratifies a principle of any strategist "Whoever tries to copy the fortunate leader will always come second" and also a second basic fundamental; "Never underestimate the advantages of facing a divided opposition."

"Also, under the "non-critical conclusions", Gallup establishes that with the exception of Santa Cruz and Beni the opposition has no clear chances; Santa Cruz, Beni and Pando have split votes (between two and three opposition candidates; in Cochabamba and Potosí, Reyes Villa and Joaquino respectively have some regional power. Mathematically, adding opposition votes gives 36% versus 58% for Morales and this gives (Reyes Villa and Joaquino) some possibilities."

Now it wasn't so long ago that a certain blue-eyed whitey named Enders filed a report lauding the sellout Cuellar of Chuquisaca and trying to make out that indigenous vote-splitting tactics of the opposition were working. Jeesh what a dumbass that guy is, waltzing around a country without a single clue about how it feels, what it thinks and how it acts....it's embarrassing. So when will the English language reporters start to accurately reflect the opinions of the clear majority of Bolivians? Inquiring minds etc...

Argentina and the IMF: Just say no to drugs


The big economy news in Argentina this week.....

(No, wait, scrap that)

The big economy news in Latin America this week has been the talks between Argentina's economy team and the International Monetary Fund (IMF). Firstly, last week we had headline like this...


...from Bloomberg on the 20th. Then yesterday when the talks actually happened we had this....


...from the WSJ. Then suddenly today the tone has changed, with Argentina's new FinMin Boudou saying that...


...and that the country wouldn't allow conditions to be imposed upon it by the IMF lackeys. If that's true it will be a great weight off everybody's mind down this neck of the woods. Argentina may be one kooky country when it comes to finances and the Kirchner regime is going from bad to worse right now, but one of the better moves in its history happened when Neshtor&Co paid off the IMF debt and kicked them out of the country, slamming the door behind them. In the words of the Ex-Prez in 2005;
"There is life after the IMF, and it's a very good life.....being in the embrace of the IMF isn't exactly like being in heaven."
After what Argentina went through in the late 1990's under the IMF straightjacket which sent them tumbling over the cliff in late 2001, no country in the world knows better about the IMF's hidden agenda. So rather than wax any further lyrical, let's leave it to 'Larry' of the esteemed Argentine economics blog 'los tres chiflados' to tell you what professional, experienced, qualified and intelligent economists in Argentina think of the IMF. The following is the first part from the L3C blog today, well said indeed, Larry.

  • Accomplices* in the Latin American dictatorship in the 1970's
  • Accomplices in allowing de facto governments to go into debt in the 1980's
  • Accomplices in de-industrializing Latin America on the 1990's

The IMF has never looked after the interests of Latin America, it is simply another tool used by the USA for its foreign policy. The IMF finances in exchange for structural economic changes that only favour US economic interests: Open the economy, privatize, make government smaller, don't intervene in the economy (or in its negotiations), liberalize capital flows, don't intervene in the forex market, no trade barriers, no tariffs, liberalize the labour market (restrict rights), don't use generic drugs (so royalties are paid), more laws to cover patents etc etc. We already know the consequences.


To ask the IMF for money is to give in the the temptation of the carrot, is to be under the illusion, is to not recognize the power of the USA in the world, is to be naive about history.........
CONTINUES HERE.


Trading Post (exclamative edition)


Editor's note: IKN is aware of the unusual high frequency of dubious punctuation used in recent articles, with four exclamations and one question mark in the title lines of the last eight posts. The editorial board at IKN would like to apologize for this lapse into hyperbole and assures its valued readership that its normal measured, mature tone will resume as soon as possible. Thank you for your attention.

Chariot Resources (CHD.to) down 7% at $0.40 on this news which basically says a big, influential player in the world of Chariot is going to vote for the present board and against the dissident proxy headed up by Lukas Lundin on Sept 4th. The funniest line is the one says; "We also believe that shareholders should be mindful of the relative underperformance of Lundin Mining's share price". OUCH! LOL! ¡Tomate eso, hijo-de-grande! All this is fun to watch from the sidelines as we're cashed in on the trade already. Ah lurve it when mineheads get catty.

Castle Gold (CSG.v) up 1.8% at $0.58. Subscribers got a message about this stock before the bell this morning, as well as a quick note on..

....Troy Resources (TRY.to) up a penny at $1.83. Troy announced its year-end profit of A$16.7m overnight in Oz. Nice number for a company with near-term growth baked in. We heart TRY, too.

Minera Andes down 2.9% at $0.67 on higher than normal volumes again, the fun continuing. This is one for traders to keep a sharp eye upon sez me.

Pediment Gold (PEZ.to) down 3.8% at $0.77. The ask at $0.79 is a nice price and the company has a line in the sand right at this 77c to 79c mark. We like this stock for high risk high reward fancymoney. Solid management team.

I heart XKCD

The world's finest webcomic is linked down there on the bottom right, but here's a headsup on the last three editions cos they're all sublime:

Here's today's..

...but please check out Tech Support Cheat Sheet and the math gag called Newton and Leibniz, both from this week. Wonderfully wonderful.

Venezuela Breaking News! Subversive German Bankers Topple TheFreeWorld™ Propaganda Campaign


Those pesky so-and-sos at Deutsche Bank have only gone and upgraded their recommendation on Venezuelan dollar bonds. And not only that, check out the reasoning. Here's Bloomie:
Aug. 27 (Bloomberg) -- Venezuelan sovereign bonds, the world’s highest-yielding behind Ecuador, were raised to “overweight” from “neutral” at Deutsche Bank AG because returns have become more attractive.

(DB wrote that) “The continued improvement in economic data gives justification for optimism”
CONTINUES HERE

Dammit guys, how the hell is the constant propaganda campaign about the imminent demise of Venezuela's economy supposed to work if you people start "investigating" and coming up with "facts"? You're going to have Moises Naim and Ricardo Hausmann phoning you up and giving you a mouthful today, I'd bet.

Revealed! Rusoro CEO André Agapov's secret double life!

YOU BE THE JUDGE!

Reader 'SM' sent over a link to this post on Stockhouse by Lexluthor2. Lex says:
I can swear this either him or his younger brother in the video playing the guitar.
Well Lex, on further investigation IKN can confirm your smart observation. Indeed, the guitarist in the band Los Colorados is in fact André Agapov, CEO and head honcho of Russky-Canucky-Venezuelan..y gold mining company Rusoro Mining (RML.v). So sit back and enjoy the multi-talented Agapov as he rocks da house on this cover version of Hot'N'Cold by Kate Perry.



Fabulous stuff, André, we're proud of you.

Shenanigans at Minera Andes (MAI.to)

MAI.to five day chart, 1 minute bars: Not easy to
read, but has all those 500 share trades showing

One of the nice things about running this blog is that over its lifetime it has attracted some pretty sharp market observers as readers that are often kind enough to share their opinions with your scribe. Yesterday I received a mail from reader 'AP', who has noticed the same thing as your humble correspondent these last couple of days about trading in Minera Andes (MAI.to). Here are extracts from his mail:
Hello Otto,

At the end of trading, for the last couple of days, there was always someone dumping a big number of shares on the market, this pattern looks somehow suspicious to me. .
................

Do you think there could be some importance to those trades at the end of the trading day or is it just some kind of coincidence in your eyes? Thanks in advance for your opinion.

Best regards,
Here's my reply to 'AP':
Yep I'd noticed too. I think you're right and someone wants a lid kept on MAI.to. the suppression is done by multiple 500 share blocks, too (the minimum number required for a price change to be registered.

Note volumes are high recently (1.5m in two days). I think it adds up to somebody wanting in for a nice, big chunk at these prices. Not a bad pattern and one not to worry about.
And sure enough, this morning we're seeing the same sort of action. The fact that the multiple trades are going through in blocks of 500 shares is also significant, as any number less than 500 is classed as a small lots trade by the TSX and doesn't register any price change in the stock. Also, all these 500 share lots are sold by our old friend "anon" and bought by house 7, TD Sec.

Funny coincidence that, innit?

The bottom line is that MAI.to is being sat on here, folks. That means things look good for a short term trade, because once the bigger player has decided the sitting-upon chapter is over, the stock will pop back up, just like the metaphorical cork held under water.

DYODD, dude.

Chart of the day is....

..LME copper (again). Obsessive? Moi?

All I'm saying here is that the US Dollar is the whole ballgame and if it suddenly decides to get stronger, copper has no visible means of support. The hedgies bidding up Cu on their "copper is an asset class" nonsense will yet again get a lesson in reality.

8/26/09

Trading Post (after hours edition)


Just for a change, Trading Post appears after the closing bell today.

Fortuna Silver (FVI.v) down 1.7% at $1.14 and taking a day off from its very cool bull run. The HUI and XAU indices were down today so following peers here, it seems. Plenty of upside available according to our new target (as seen in the weekly..charts and everything...pretty colours, too).

Ecometals (EC.v) down 3.9% at $0.49, and the suckers' pump of the month down from the 58c printed Monday. A stock strictly for the Icarus Syndrome sufferers amongst us, not for adults. By the way, nobody took me up on the "permit by end of month is bullshit" challenge. C'mon shillers, the month's not over yet...any takers?

Ecopetrol (EC) down 1.9% at U$26.88. The other "EC" stock in LatAm is a bigger and better fish altogether. EC is closing in on what looks like a solid support level at U$26, so this is a headsup for you flippy-tradery people out there. Nice to say good things about Colombia here, as EC is a well run company.

Hathor (HAT.v) down 2.6% at $1.48. "Zed's dead, baby..Zed's dead."

ECU Silver (ECU.to) down 2% at 48c. Don't say I didn't warn you. Woof woof woof.

Dynasty Metals (DMM.to) up 4.4% at $3.29. I'd like to tell you that volumes were great too, but I can't. They weren't. Again. Despite the pisspoor interest good to note the % difference, so if it holds on to gain mañana it might be worth thinking that the bottom is in this time. Again. Humph. A reminder; DMM.to is the best fundy value in gold out there today imho.

Does Peter Mullens read IKN?

Smile for the camera please, Peter

So back on August 17th, this humble corner of cyberspace noted some serious insider selling going on by Peter Mullens, director of Lydian International (LYD.to) He'd sold on some good news about drill results at LYD which left us all scratching our chins and going "hmmmmmmmmmm".

But fair is as fair does, so let's note that Mullens has already bought back 127,000 of the 350k shares he sold into the rush. Let's also note he bought back his stock on the very day IKN ran its post (yok yok). Maybe he's the publicity-shy type? Anyway, more seriously it's good to note the vote of confidence Mullens is making in his stock here.


Aug 24/09 Aug 17/09 Mullens, Peter James Direct Ownership Common Shares 10 - Acquisition in the public market 3,000 $0.680
Aug 24/09 Aug 17/09 Mullens, Peter James Direct Ownership Common Shares 10 - Acquisition in the public market 58,500 $0.650
Aug 24/09 Aug 17/09 Mullens, Peter James Direct Ownership Common Shares 10 - Acquisition in the public market 4,000 $0.630
Aug 24/09 Aug 17/09 Mullens, Peter James Direct Ownership Common Shares 10 - Acquisition in the public market 18,500 $0.620
Aug 24/09 Aug 17/09 Mullens, Peter James Direct Ownership Common Shares 10 - Acquisition in the public market 43,000 $0.610

Wowsers! An intelligent English language article on Bolivia

Here's the link to an article published in Upside Down World today that concerns the "threat" that the Muslim community in Bolivia poses to TheFreeWorld™. But instead of conjuring up oogabooga imagery and the balderdash that's the norm in English language articles on Bolivia, this report actually does something rather radical; it treats you like a thinking human being. It also does another wild thing by actually interviewing the people accused of being a ThreatToDemocracy™ and, amazingly, incredibly, spookily, it turns out they're into things like peace, respect for fellow man, democratic debate and all that weird stuff that used to happen way back in the late 20th century.

Below follows an extract from "What Is Behind the Bolivia-Islam Connection?". Those of you who don't fall for the normal John Enders-like racially tinted brainwash pieces and prefer to know more about the real South America should link through and read this excellent report.

"The head of the Islamic Center, Mahmud Amer Abusharar, an elderly grey haired Palestinian refugee sitting in his front office appeared humorously bewildered when presented with recent US intelligence and media reports detailing him among others in a study of extremist threats in Bolivia.


"“The Islamic center is a Bolivian institution, which has no discrimination, whatsoever, against anyone… white like the Europeans, or brown like the Bolivians… Thank God we call on the people to be good to be universal and honest, not to be aggressive,” Abusharar insisted.


"“I never thought that the Islamic Center forms danger to the United States, but who is introducing this idea to the United States public; he must be the one looking to harm the North American people.”

.....

"....
I have met many Americans in my life and they deserve respect. They teach their sons to tell the truth, but once they read the rubbish of a person like this problems start for the United States. If we have intelligent governments, they will not listen to this rubbish.”"


FULL REPORT HERE

Regarding gold backwardation

Here's a mail exchange from yesterday with regular reader 'TM'. He sent me this link to an article by a certain Antal Fekete who is predicting gold prices to go up sharply due to backwardation. By the way, the link includes a easy-to-get primer on that subject for those already confused by the gobbledygook...don't worry, it's just another case of people inventing strange words for logical situations and making them sound special and important.

Anyway, here's what I wrote back to TM regarding the subject. Consider this mis dos centavitos on the subject.

However much i try, i can't get myself to be a goldbug. My problem with Fekete's technical arguments about the imminent rising of gold due to backwardation are twofold:

1) Gold is not a commodity. It's money, and the vast, vast majority of the stuff is hoarded, not used. It makes the dynamics of its spot market vastly different to that of copper, zinc etc..even silver, in fact. I get annoyed by the goldbug community that points out that "gold is special" etc etc ad infinitum but then changes its base philosophy on a whim when a "gold is prone to the same market forces" argument is published that makes for a bullish story.

2) Gold is, in the end, a tiny market compared to the amount of currency that's moved around. The small technical indicators in the specific gold sector can be squashed at any given moment by a Central Bank or Fed decision. I think Fekete's argument is valid from a technical standpoint, but it's the story of a flea on the back of an elephant.

If you're wondering why Verena Minerals (VML.v) has jumped today...

...it's because it got pumped by Lawrence Roulston in a "special update" to subscribers last night.

Seriously, WTF is this? Some kind of guru's ego trip? If a large distribution gold tipster points his finger in a special one-off reco on a tiny lil $18m mkt cap explorer (well, $24m now) on the 'news' that it will publish a preliminary economic assessment 'in the next few weeks' the only thing that can possibly result from it is a self-fulfilling prophecy. What's the story, Larry? You got out of bed yesterday aching for a bit of attention? Decided to flex the ego-muscle a bit? Why a 'special report' on a tiny little explorer now, and why not in your regular letter?

So far 325k shares traded in the first 20 minutes of play.

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

...sugar.

Rolling over here. It may take a couple of months to drop in a meaningful way and not happen right here right now, but the run is done. Still, a great time to be long sugar. Long ethanol, too. CZZ is the normal house play, but another to note is Maple Energy (MPLE.L), a company we've outlined in the subscriber weekly no less than three times.

8/25/09

Colossus Minerals (CSI.to): Congratulations John Embry!

Back in June, IKN ran this tribute to ace stockpicker John Embry and his June 12th call on Colossus Minerals (CSI.to). News of the Embry call shook the investment world and was soon picked up by the company and slapped on PR releases and its own website. At the time we at IKN doubted His Embryness on the sagacity of his pick called the day CSI.to was priced at CAD$3.23, but credit where credit is due. After a mere eleven weeks the stock has gone positive on his call and now shows a magnificent nine percent profit.

So warm congrats to Embry for his prescient recommendation. After all, there wasn't a single other Brazil-exposed gold play with impressive growth upside he could have called, was there?

And I nearly forgot; we have to applaud his boss too, as Eric Sprott is the biggest single owner of Colossus Minerals. Hey...you don't think that..? NAHHHHHHH

DYODD, dude.

The Magnificent Bipolar Capybara

Here's the link to the funniest thing I've seen this week....this month, probably; today's Chigüire Bipolar. You need to be a Spanish speaker and although I thought about translating it you really need to get it as stands, sorry and that.

So what makes you think mining in Peru is dangerous, Otto?

Oh, just a suspicion of mine, y'know.

Align Center(click to enlarge)

Here's the monthly totals for deaths in mines in Peru for this decade. Jawdroppingly, you have to go back to September of the year 2000 before you find a month that saw no fatalities in the country's mining industry. If you count 'em up, it's 608 deaths so far.

This is one of the things that concerns mining operators in serious countries, I mean, take a look at any regulatory report from (for example) an Australian miner and they're always very proud (and rightly so) of a "zero accident" period and a high accident level will cause serious fingers to be wagged at them...and that's just for injuries; they get a bunch of fatalities on their books and they're toast.

But hey...Peru...buncha small brown people underground....who gives a shit, right?

Hey, I got me a great idea, dude! Let's treat the workforce like crud, make ourselves into millionaires and brainwash them into believing that freemarket capitalism is the only way to achieve Freedom™.

Viva investment grade. Viva, viva, viva.

Trading Post (results driven edition)


Stocks with newsflow this morning.

Rusoro (RML.v) up 9.1% at $0.42 on a nice earnings report. Gold sold was lower than produced, but the mines are clearly working very nicely as cash costs drop yet again and production hits a quarterly record. Note to subscribers, there are a few things we'll be going over about this quarterly report on Sunday. Nothing urgent.

Pediment (PEZ.to) down a penny at $0.79. PEZ.to came out with this news on its San Antonio property today, upping the resource and saying nice things. The headlines didn't grab the attention of the market but the news was positive enough. There's one other issue that we'll look at in next week's Weekly. It can wait til then, though.

Minera Andes (MAI.to) up 6.1% at 70c on good volumes. The news was yesterday and not today, but after sleeping on it Mr. Market now likes the stock. So be it.

Guyana Goldfields (GUY.to) up 2.4% at $4.65. After yesterday's PA release, Cormark this morning put a $6.50 target on the stock and BMO maintained its 'outperform' rating on GUY.to. DYODD, dude.

Fronteer (FRG) down 1.4% at U$4.24 and was also subject of an analyst's note this morning, with RBC upping its target a loonie to C$5.50 after listening to the Conference Call yesterday afternoon. Subscribers, check your inboxes.

The morons that run Peru


How much did Manhattan Island go for again?

There are many things illustrated by the following report. Just the basic point that there's no electricity supply in the region but there are multimillion dollar oil exploration contracts is enough to explain the screw you attitude of Twobreakfasts towards anyone that's small and brown and not living in the Republic of Lima.

But this story shows more: The lack of respect, of understanding.... hell, the sheer dumbass stupidity shown by Peru's government to its people. These are the ones that have no right to complain, by the way, but if they do dare to protest the arrogant, usurping nature ofAlan Garcia's Peru they are then slaughtered by police in helicopters. Now follows a direct translation of this story in El Comercio this morning:

Laptops given to Asháninka students in Junín but they have no electricity to use them

7:20am: The Regional Government gave 2,656 computers to children, but in 50 of the 73 communities there is no electricity to use them.

"Our teachers will be able to tell us about the world" says Blas optimistically, 12 years old and an Asháninka indigenous, while holding on to a personal computer that has just been handed over by state functionaries. He doesn't yet know how it works, but asks what he will do when the battery runs out.

He and 2,655 other student from 73 Asháninka communities in the Satipo region received laptop computers from the Ministry of Education and the Regional Government of Junín. "They're not toys and you have to keep them out of the rain and humidity because they can go wrong" said various children. The sad fact is that 50 of the 73 communities can't keep them running, because they have no electricity supply.


"It's true that the majority of these towns don't have electricity" the regional president Vladimir Huaroc admitted, who faced with CONTINUES HERE

This Sporting Life

Today's action comes from a local grudge derby match in Bolivia this weekend between Oriente Petrolero and Blooming, the two teams of Santa Cruz. Leonardo Medina was going off at half time after scoring a hotly contested goal in the first period when Sergio Jáuregui of Blooming came over to explain that he had a slightly different worldview and has become a little irritated with Medina's previous attitude.



The result is that Medina ended up in hospital and Jáuregui is now facing criminal charges (to which he took the Bolivian version of the 5th yesterday afternoon).


Singani served. The end.

Chart of the day is....

.....the year-to-date performance of SLV (the silver ETF, by way of proxy to the metal) Fortuna Silver (a good silver mining company) and ECU Silver (the trainwreck) and is dedicated to Dave in Denver, sender yesterday of multiple abusive e-mails full of bad language, threats of violence and unfounded, laughable bullyboy menaces of civil and criminal legal actions.

(click to enlarge)

You backed the wrong horse, dumbass. Get used to the fact.

8/24/09

That Peruvian economic miracle in numbers

Yes indeedy, a true miracle! Peru 2009 is the only country ever in the history of ever everness to have seen its electricity consumption drop and claim GDP growth. The red line shows monthly electricity demand in Peru, and especially for those tuning in from El Comercio, that broken line is what's known in the trade as "a trend line".


Hallelujah!

These jokers still claim a +0.34% GDP growth rate for Peru. Seriously, do they think we have pelotudo tattoed on our foreheads or something?

Of course, the BSsers in the Peru admin couldn't even let this moment pass without trying to massage the numbers. Even though demand was down 2.95% YoY (Jul '08 to July '09) the press releases didn't bother mentioning the important figure and decided to note only electricity production, which was down 'just' 2.4%. Hell, y'know you could produce double the amount you needed if you like*, the real pointy end of the statistics is how much is used and not how much is made. You can't stockpile a gigawatt, y'see. You need to be the obsessive numberwonk type (errr...none of them round here...ahem cough cough) and get busy on the MEM website to find the true non-spin disaster area that is Peruvian electricity consumption in all its glory.

Economic miracle? Yeah right.

UPDATE: Reader 'PV' wrote and asked about the correlation between GDP and electricity demand, so check out this chart.


It's not an exact correlation, but that mainly because monthly GDP data collection is not very accurate and in the case of Peru is affected by the number of working days compared to the same month of last year (e.g. where Easter falls will affect the monthly reading quite markedly). However, although not a perfect fit it's still not bad; it's clear that there's a correlation between the two sets of figures. Hey, I bet you can't wait for Peru's July 2009 GDP number to be announced! That'll be out mid-September and we're bound to hear Spongebob and his "we're at the bottom" baloney yet again.


*well you can't, but you could churn out an extra 10% or so

Mining PRs and the Ottotrans™, part 12


I'm sorry, I shouldn't just pick on this one company all the time. There are so many flea-ridden dogs out there, after all. BUT I JUST CAN'T RESIST IT.
TORONTO, ONTARIO--(Marketwire - Aug. 24, 2009) - ECU Silver Mining Inc. ("ECU Silver") (TSX:ECU - News) is pleased to report that it has entered into an agreement with its lender to restructure its current debt. The restructuring of the debt will provide ECU Silver with greater financial flexibility as we move forward with additional development plans for future operational growth and for the planning of our exploration program.

The Company has reached an agreement to restructure its current debt whereupon it has extended the maturity date of the loan by one year. Principal repayments will now commence in November 2010 and will be payable in 12 equal monthly payments.

The ability to restructure the financing is testament to the quality of the Company's assets, the success with our milling operations and the excellent relationship we have with our lenders.

An important benefit of the debt restructuring is that the revenue generated by our operations will not be encumbered by principal repayments which are now deferred for one year. In addition, the debt restructuring will also mitigate the need for the Company to seek out other material financing alternatives.


And here's what it means:

TORONTO, ONTARIO--(Marketwire - Aug. 24, 2009) - ECU Silver Mining Inc. ("ECU Silver") (TSX:ECU - News) is pleased to report that it has decided to ream its shareholders even further to the tune of CAD$2.5m and has entered into an agreement with its very happy lender to restructure its current debt. The restructuring of the debt will provide ECU Silver with the chance to boot its problems into the future and pretend they don't exist as we dazzle our sheep-like hoards with shiny beads, mirrors and yet more talk about undeliverable plans for the future.

The Company has reached an agreement to restructure its current debt because right now we have no money at all, whereupon it has extended the maturity date of the loan by one year, which means we pay quarterly interest on U$15m owed at a rate of 14.9% for a year longer than everyone expected and add CAD$2.5m to the bill. Principle repayments will still have to be made, however, but now commence in November 2010 and will be payable in 12 equal monthly payments of U$1.25m per month, which will be a very special time for all shareholders and a lesson in junior mining finances they will not forget in a hurry.

The ability to restructure the financing is testament to the ability of management to come out with bullshit excuses, the utter desperation of paying through the nose instead of swallowing pride and admitting the dog's dinner we've made of this company and the excellent relationship they have with our lenders who have been wetting themselves laughing ever since we went crawling to them and begging that they don't serve us with payment orders.

An important benefit of the debt restructuring is that the revenue generated by our operations will not be encumbered by principal repayments which are now deferred for one year. Instead we will add CAD$600,000 to each quarter's obligations and get screwed into the ground by the principle payments later. In addition, the debt restructuring will also mitigate the need for the Company to seek out other material financing alternatives but don't worry cos we're still gonna dilute your lilly asses suckers, just you watch.

Whatever makes you think there's abusive police repression going on in Honduras, Otto?

Oh, just an inkling I have.

This transcript of a radio show in Honduras is from the excellent blog Honduras Oye. Not pretty to read, but necessary. The bold type is mine:

Irma Villanueva: Good afternoon, last Friday we went to the march -

Host: Friday – you’re talking of the march at Choloma

Irma: Yes, that’s right. We went to the march, we stayed there a while. All of a sudden we saw like a people stampede coming, – All was confused, they brought tear gas canisters. Lost myself from my group in the confusion, they started grabbing us – other persons and myself, we were forced into a [police] patrol pickup. They said they were going to Choloma, they came out through some part behind, and I heard them ask a police officer: “Chepe Luis, and this here [woman], where is she going?” “She goes to San Pedro,” he answered. – And then – only I remained on the flat part [on the bed] of the pickup [starts sobbing] and … I don’t know where they were bound, because, the cop kept me pinned face down, immobilized with his foot on my back [sobs], and they took me to a very cloddy, gritty place [sobs], then took me down and told me “Now bitch, now you’re gonna see what happens to you for you being where you shouldn’t be (starts weeping) I was raped by four police … . I managed to see the name of two of them, one was Ortiz, another’s name is Lopez, and the other was the one called Chepe Luis, the fourth one I couldn’t – didn’t find out his name.

After they raped me [themselves], they stuck into me a … … that black thing police strikes you with. They left me lying down in the open [i.e. in the wilderness] – - I begged them “please, don’t hurt me, I have little children, I implore you! And they insulted me and called me names, I only asked God to protect me for my children, because they’re young. They left me all alone there. I was unconscious, I guess, don’t know. Then I got up with with what strength I had [left] and managed to reach the curb of a highway, I walked for around half an hour. I fell and stayed on the ground because I couln’t stand the pain in my private parts [weeping] … and a lady picked me up, I told her please to take me with my mom, don’t know how much time we took, the only thing I could see, we left through the side of Zincon[ph] … and I was taken where my mom was … My mom was already there, and my husband was looking for me. No … Didn’t want to go to the police, how could I if they had been the ones who injured me. Only – [she can't go on]

Host: This is so difficult, Irma’s situation, Irma Villanueva, 25 years old, a mother of four kids – and girls? How many [girls] – ?

Irma: A boy and three girls.

Host: A boy and three girls. She has come here to Radio Progreso station in order to give her testimony, that we listen to her, that you our friends, women and men who tune in with us, listen to what happened to her, what has not come out to the mainstream media, what everybody keeps silent, in this country, under this de facto government – and you do not remember exactly the place where they took you? and were taken you alone?

Irma: Me alone, several persons were going, men for the most part, because – I was going in a corner but me they left on the bed of the pickup – and they took only me, I guess me, I was the only woman. I only remember the place full of branches, trees, with mounts, for as long as I walked, the mountain blocked the view, and it – When I managed to get out, I had to walk over some ditches, then like a little lagoon and I knew it was Ticamaya where I got out as I noted that we left on the side of Zincon.

Host: And who helped you?

Irma: A lady who was passing by, I stayed lying on the ground as I couldn’t stand the pain in my abdomen [sobs]

Host: Yes

Irma: and she saw I was fallen, and got down and helped me, I asked her to help me please, and [she asked] could she take me to a hospital and I said no, that I wanted her to take me with my mom because – what could I get in forensic medicine? that they took me with the police, when they were the ones who did this to me.

Host: That they mock, make fun!

Irma: Yes … yes, for they were telling horrible things to me, and I was frightened.

CONTINUES HERE

Unsolicited testimonial

I know I should really get in your face and do this more often, marketing and all that, but it always seems to me a bit cheesy. However I'm going to share a testimonial received this morning from a subscriber to The IKN Weekly because 1) he's a successful indy investor with a public blog on investing that I respect, 2) his line about "teaching to fish" was really cool because it's one of the most important things I want to get across here and 3) he's allowed me to name him, so if you like you can check with him for veracity. So here goes, what follows is not my pen:

About Your News Letter...

IKN is my most valuable subscription news letter. You have a genuine edge which gives your readers a clear shot at making good money. Your edge is a better understanding of understanding Latin American politics / economies than any other mining stock picking writer's I know.

That's really valuable, but there is another thing which is just as valuable or more valuable to me. You are clearly teaching me to fish (improve my own fundamental analysis-based stock-picking) rather just giving me fish (stock picks). Each NO BS report, if looked at properly, is a great example of how to do fundamental analysis of a mining stock. Prior to receiving them, I invested only in producers and near-producers, because they were the only kind of mining stocks I knew how to value. Now I'm learning how to better analyze those stocks but also am spinning up on how to value explorers.

The improvement in fundamental analysis allows me to improve my own stock picking among the universe of stocks outside of Latin America that you don't cover.

Sincerely said,

MontyHigh, www.worldofwallstreet.us

Mexfiles on form this morning

Absolutely Nuthin (say it again)

Hit this link to go see The Mex Files' excellent analysis of the recent Foreign Policy article that compares the economies and drug-related problems of Colombia and Mexico. So much neolib dross is bandied about regarding LatAm that it's hard to keep track of it all, but every now and again the crass and facile analyses from the very doctrine that causes, rather than solves, the problems in question needs to be spanked the way Mexfiles has spanked 'em. Here's an extract, but you really need to see the whole thing to appreciate RG's sharp brain at work here.
"Whistling in the dark — claiming that the “war on drugs” is not a factor in foreign investment — is plainly silly. It is. And, while that does make economic recovery all that much more difficult, ignoring the Administration’s creation of a crisis — and mishandling of it — while simultanously ignorning the clear signs of a problem with a one-market export economy — made the Foreign Policy article an exercise in ad hoc ergo propter hoc reasoning..."

That Rob-O-Meter in action


On Friday we wrote about Minera Andes:

".....my Rob-O-Meter predicts a PR or two early next week...."

And here we are Monday morning. Right on schedule, Mr McEwen.

SPOKANE, WA, Aug. 24 /CNW/ - Minera Andes Inc. (the "Corporation" or "Minera Andes") (TSX: MAI and US OTC: MNEAF) is pleased to announce exploration plans for two principal areas in Argentina. 1) Santa Cruz province where the Corporation's San José mine is located and 2) San Juan province, site of the Corporation's recent Los Azules copper discovery. The target in Santa Cruz province is high-grade epithermal gold-silver mineralization. In San Juan province porphyry-style copper mineralization is the primary target.

Exploration Program

Minera Andes plans to systematically evaluate its portfolio of properties in Santa Cruz and San Juan province. It is anticipated that in the next eighteen months all the properties currently held will be evaluated using satellite image analysis, soil and rock yada yada continues here