Back at the time of the Malvinas/Falklands war, the military dictatorship in power in Argentina famously organized a "donate for the war effort" campaign. Old ladies innocently sent in their jewelry and cash by the bucketful and millions upon millions of dollars worth of items were collected under the whipped-up jingoistic fervour......and never seen again. They certainly never got as far as the undernourished, underequipped and innocent lambs sent to the slaughter by the scumbags in power and most believe it all ended up in the back pockets of the military generals and then whisked offshore before their time was up.
The memory of that story came back today. In this post on September 8th, we reported on the devastation wreaked by a tornado in the poverty stricken northern region of Misiones Argentina. The town of San Pedro was ripped apart (see photos in this post), eleven people died and there were hundreds of injuries, light to serious, among the population.
Considering gold is holding above $1,040/oz and silver's $17.44 too, there's hardly an air of ToDa Moon Alice amongst the rockbreakers. Mostly green for sure and some nice winners, but a fair smattering of red splodges on the radar, too.
ATW gold (ATW.v) down 29.7% at $0.26. What else did you expect?
Crown Point Ventures (CWV.v) UNCH at $0.70 with moderate volumes traded at that price. Still way under the radar, which is the way I like 'em. Extremely addable.
Vena Resources (VEM.to) up 4.2% at $0.37 on low volumes. There shouldn't be much longer to wait for decent newsflow now. Never an exact science, but we're overdue good news here methinks.
Dynasty Metals (DMM.to) up 1.4% at $3.70. I got a mail from a reader asking on this one. The answer is "yes, it's still one of my top picks for the year, definitely". PolRisk misunderstood on your side of the Darien Gap. Fundamentals compelling. I own, I adore, I hold for the higher prices to come. Nuff said, DYODD.
Ecometals (EC.v) down 7% at $0.40. What was that I heard about the government conceding two sensitive and non-exploited regions to the indigenous that will never be developed by miners? Could one be around Zarza? Is that why EC.v still hasn't received the exploration permit that McMullan&Co promised the sheep by the end of August? So many questions, so much uncertainty...Hey I know! Why don't you ask the EC.v IR dep't, dudes? I mean, they've never pulled the wool over your eyes before, have they?
And I bet that Luke Norman dude sounded so convincing at the time. Then he sold his shares to you. Then the bad news came along, then Norman resigned from the company. Then the PR today as the creditors jump the queue....
But don't worry dude, you'll be better off with Pediment if you help them push through that land deal. If not, there's always the Marina.
Tequila Sunrises served. The end.
UPDATE: Take a wild guess as to who said this in May 2009? Of all the gold companies out there, he had to top-pick the one that drops by nearly half during the gold bull run.
My favorite gold producer today is ATW Gold Corp. They are an advertiser and we own a lot of shares. Obviously, I’m biased, but I’ve known and followed these guys for three or four years. They have two mines in Australia, Burnakura and Gullewa. They’ve got a big drill program going on at Gullewa right now. They’re actually in production at Burnakura. They were picking up $50 million worth of mine and mill for $3 or $4 million. The purchases were brilliant. They pumped a lot of money into the ground. They built up the resource. They’re producing gold now. They’ll be cash flow positive in a matter of weeks. They’ll have the second mine in production, and should be doing about 100,000 ounces a year production in a year to 18 months.
My thanks to reader 'H' for the headsup. I really should pay more attention to these contrary indicators.....
This is the only one that matters, as right now the rest of the financial and trading world is revolving around the greenbacks travails even more closely than it usually does.
Click to enlarge
Otto sez: I expect the USD to bounce off the current levels and move back up through 78. Time will tell whether that call is yet another OttoFail™. DYODD, dude.
Check out previous IKN posts here that show just how many times insiders have sold shares into the market this year. Now here's the latest in the looooong line of gimme da munneh transactions that sees management scoff in the faces of their shareholders once again.
MAG Silver Corp. (MAG)
As of October 6th, 2009
Filing Date
Transaction Date
Insider Name
Ownership Type
Securities
Nature of transaction
# or value acquired or disposed of
Unit Price
Oct 06/09
Sep 30/09
Jones, R. Michael
Direct Ownership
Common Shares
10 - Disposition in the public market
-20,000
$6.320
Oct 06/09
Sep 29/09
Jones, R. Michael
Direct Ownership
Common Shares
10 - Disposition in the public market
-10,000
$6.163
Oct 06/09
Sep 28/09
Jones, R. Michael
Direct Ownership
Common Shares
10 - Disposition in the public market
-10,000
$6.300
Oct 06/09
Sep 25/09
Jones, R. Michael
Direct Ownership
Common Shares
10 - Disposition in the public market
-10,000
$6.157
Another $300+k to soften the blow of not getting bought out (due to mgmt's own strategic incompetence), Mr. Jones? Oh how sweet.
No wonder only geologists take this company seriously nowadays ;-)
....Gammon Gold (GAM.to) (GRS), as it hands over another BOHICA* moment to its shareholders. The award is for this press release that starts thusly:
HALIFAX, NOVA SCOTIA--(Marketwire - Oct. 7, 2009) - Gammon Gold Inc. (the "Company") (TSX:GAM - News; NYSE:GRS - News) announces that it has entered into an agreement with a syndicate of underwriters led by BMO Capital Markets and UBS Securities Canada Inc. under which the underwriters have agreed to purchase on a bought deal basis 11,240,000 common shares (the "Common Shares") at a price of US$8.90 per Common Share for gross proceeds of US$100,036,000 (the "Offering").
I've looked at GRS several times over the years and have always passed. I've never regretted that decision, either. How long-term shareholders must suffer to be in this thing, the archetypical zero-sum game.
Rule one of a business: Make money. Gammon Gold fails that test, DYODD.
The pollsters are the official election survey company in Honduras, not some two-bit unknown company. Time to call bullshit on people like this who use twitter to disseminate lies.
Yup Venezuela has inflation all right, product of its funky monetary policy that really confuses the hell out of some people. But check out this chart, that shows the Venezuelan inflation rate (precisely, the CPI consumer price index) over the last five-and-a-bit years, but this time compared to the average increases in salaries (the general salary index, comprised of national public and private sectors) for the same periods.
What do we see? Basically, pay increases have kept up with inflation. 2008 was a bad year for the wage packets versus the shop prices, but this year things look more equal again. In fact, if you tot up the scores salaries have outstripped inflation by 1.3% over the extended period.
Ever noticed how the English media will tell you all about Venezuela's inflation rate but never tell you about the matching increases in salaries? Funny dat, innit?
"Bodies: The Exhibition" is that kinda famous show featuring polymerized corpses that has been doing the world tour since 2005. Millions of people have seen the thing all round the world; France, UK, Australia, Argentina, Czech Republic...name your own country from a list of dozens.
IKN17 did a full fundy report on Radius Gold (RDU.v) and since that time the stock is up nicely. But to give you and idea of how undervalued the thing still is, consider this:
At its current 22.5c share price, RDU.v has a market cap of $12.05m
RDU.v owns one million shares of Focus Ventures (FCV.v)
Focus Ventures is currently trading at 84c
That means $8.4m of RDU.v's current market cap of $12.05m is covered by that investment alone. So the $16.8m in assets as booked in 2q09 are currently being valued at just over $3.6m.
Next question?
UPDATE: Oh jeesh, my biiiig bad. More coffee needed and a brain replacement. Reader EA has just whacked me over the head with the obvious, that 1m X 0.84 = $840,000, not $8.4m. Therefore this post is in the world of EpicFail. Thank you 'EA' for the mail and the correction and my apologies for being stooooopid, I shall leave the text as stands as tribute to my own dumbassery.
Update November: A warm welcome to all the dumbasses from Germany's "WallStreetOnline" idiots club.
Where do we start today? Yeah, let's start with "highest ever price for gold in US dollars" then the rest kind of falls into place, does it not? Yes indeedy, it's another one of those "I could pick a thousand to mention" days today so forgive me if yours isn't here. You know how it is, I'm terribly biased and unfair about it all.
Radius Gold up 12.5% at $0.23 and yes you know it's true.
Amarillo Gold (AGC.v) up 12.7% at $0.80 and we can expect newsflow to begin soon. Undervalued goldie in Brazil...dudes, they'll need somebody to supply metal for the 2016 medals, right?
Ventana Gold (VEN.to) down 3.8% at $8.20 and has more action in the last two days than many stocks see in a year. Check out the 1 minute chart: Imminent financing, anyone?
Crown Point Ventures (CWV.v) up 34% at $0.67 and yes you know it's true. Volumes haven't been great but apart from that there's little to complain about, is there? Subscribers can expect a further update on this stock tonight with further thoughts and gleaned information.
Petaquilla Minerals (PTQ.to) down 1.4% at $0.355. Hahaahaaaaaaaa, the stock is dead. Broken. Finished. Just seeing this thing in red on the day gold hits its all-time high has justice written all over my screen. Moral; play nice or suffer eventually. Fifer Fail.
Here come the small silver producers:Fortuna Silver (FVI.v) up 6.3% at $1.51, First Majestic (FR.to) up 7.7% at $2.79, Endeavour Silver (EDR.to) up 5.8% at $3.11, Great Panther (GPR.to) up 18.7% at $0.89. GPR and its high cash cost lead the field today, it's that leverage thing again. I'm still uncomfortable with GPR and will always prefer FVI., intraday stellar gain or not. BTW, the arch-dog ECU.to isn't on the list because it's not an official producer and if you want to argue that point you're a dumbass about mining.
Let's add one more small silver to the list, US Silver (USA.v) up 14.8% at $0.155 on good volumes. Again, high cash cost is the factor in play so again this stock having an eyecatching day. I know smart people who like this one. I like smart people cos they be smarter than me. DYODD.
Reader 'T' and I have swapped a few mails this morning and he's given me permission to publish the following mail he sent as part of the exchange.
It's a salutory reminder. A smart, financially literate guy such as 'T' who is making a positive difference to his net worth by being successful and trading metals stocks can see that by being inside the dollarzone, all he's really doing is running to stand still. So what about the vast majority of citizens that aren't as market savvy as 'T'?
I get the feeling that what they've been through in the last 18 months or so may be just the tip of the iceberg. Here's 'T's mail:
You're lucky you don't have to figure out what to do with your cash, with our default being USD that means we are at risk even when we're trying to be conservative. Even our savings "cushion" doesn't give us the security it should because it erodes every week. No wonder the markets are levitating, who wants to park cash in USD? But I have to say while it's a fun intellectual event it sucks to live in the country whose currency is going down the shitter. My wife's money is kept all in cash (and some physical gold) because I didn't want to be risky with it, but it turns out she is much worse off. That's what the country gets for abusing its reserve currency, but there are lots of individuals (like her) who only acted responsibly and never spent more than they had (or anywhere close to what they had), and it looks like they are going to be the biggest losers.
Sorry, just a rant. Times are getting more and more "interesting" in the Chinese fashion.
After the bell yesterday Crown Point Ventures (CWV.v) released this PR that explained just how very, very well its three drilled wells at El Valle in Argentina are running. You need to read it for yourself and consider the barrel numbers in light of the company market cap (subscribers to The IKN Weekly got the breakdown as I see it in a Flash update last night) but the result is that the stock this morning has done this:
Yep, that's 30% up, and every percentage point well deserved, guys. Congrats.
It's not often that in the trappy, risky world of small O&G drillers that a company hits three from three and gets all-but optimum results from its program. CWV.v has knocked one out the park here and will surely continue up.
Disclosure: I own a few and I've been on this case for IKN Weekly readers for the last 10 weeks so it's likely some subbers are long too, so DYODD dude. I really mean it. It's your money.
OH NOES! SECRET OIL DOLLAR CONSPIRACY! Dumbasses fall for this crap every time, but Mish nails the issue in this post. Gimme a freakin' break here, dudes....
Argentina: Why do we lurve da booorev? Let's take yesterday's note by the WSJ on Argentina and the IMF:
Paraguay: Beats me why AP is so, so bad sometimes, cos other times they nail great stories. Check out this one on Paraguay that starts
"Three police chiefs imprisoned for torture have finally have been fired after collecting their salaries from behind bars since 1995, Paraguay's interior minister said Tuesday."
Peru: The strike at Shougang's iron ore mine in Peru is now eight days old. Reason for strike? The deal brokered by workers and management to end the last strike has been totally ignored by the Chinese management. It's the future of Kapitalism, Komrade.
There are many reasons to love Armen Kouyoumdjian. The way he knows LatAm better than any other economic/political analyst I know, the way he speaks his mind with eloquence and wit, the independent nothing-is-sacred attitude, the way he recently threw Andres Oppenheimer off his mailing list due to the moronic bullshit published by Schloppenheimer on the region. The list continues.
But here comes another reason to love the dude. Published last week, the following analysis on Brazil gives a much-needed counterweight to the permabull, Brazil-Is-Economic-Miracle sheep bleating of our current era. Kouyoumdjian's view is essential reading for anyone interested in Brazil's economic(and political, for that matter) future. I have been given permission to reprint his analysis here on the blog. I also recommend that you use the mail address included in his title line, shoot the great man a mail and ask nicely if you can join his free mailing list.
BRINGING BRAZIL DOWN TO EARTH As the “Hadji Yatmaz” Country Inflates its Image
By Armen Kouyoumdjian kouyvina (AT) cmet.net October 2, 2009
Once again, Brazil is riding the top of the wave in terms of world consideration. Comments one reads describe it as leading the recovery in Latin America in the short-term, flexing its regional and international muscle on the diplomatic stage, and even on the road to becoming a “new Saudi Arabia” for oil production. When you point out that in a 33-year career covering Latin America, you have all heard it before, several times over, your cynicism is countered by the comment: “ah, but this time, they really have got it right!”. How many times I have heard that one as well. Unfortunately, many of the analysts and journalists behind this enthusiasm were not even born when I started looking at Latin America in November 1976.
This is one of the main problems in not only analysing, but also putting across any contrary views on Brazil. The fan club is so large and militant that they will not hear anything against the subject of their undying love and admiration. Moreover, even with the evidence under their nose, they will not even look at it. “A virtuous circle” as one London analyst described it to me some years ago. The other problem is that, fully conscious of this goodwill, Brazilian authorities themselves take advantage and put across a positive image in an unparalleled decades-old exercise in cosmetic dressing-up.
Though I am fully capable of it (once I see the colour of your money), I am not planning here to undertake a detailed Country Risk analysis of Brazil, but just to underline some cautionary aspects which are always ignored.
WHAT IS A HADJI YATMAZ? I normally do not translate foreign expressions used in my reports, because even though I have little faith in the cultural level of much of my readership, I think it is a job for foreign embassies in Santiago. After all, there is something they should spend their time on, because updating their websites, managing their invitation lists and organising proper catering does not seem to be much of their concern. However, in this case, the concept of “Hadji Yatmaz” is fundamental to this report, so I shall have to explain it.
In the Beirut of my childhood, before it was destroyed by the invading vandals of the territory to the South, there used to be a toy called a “Hadji Yatmaz”. Probably a result of the Ottoman occupation, the expression used is Turkish. It means roughly “the Hadji that won’t lie down”. It consisted of a small plastic figure, with a piece of lead in its base. If you bent it downwards, it always stood up again, because of the heavy lead base. Such a toy was probably available in other countries, though nowadays the lead content would be illegal because it is poisonous. I had several of them, and my playing with lead probably led to the imbecility with which I generously send my reports for free.
So most people regard Brazil as a “Hadji Yatmaz", which will quickly stand up after falling down. The problem with the toy, as with Brazil’s image, is that it was made of very cheap plastic, and it was completely hollow inside.
INFLATING THE PRESTIGE Having had two emperors (Pedro I & II) for a total period of 67 years after independence (1822-89), and contrary to Haiti (Dessalines and Faustin) and Mexico (Iturbide and Maximilian), whose flirtation with imperial status was shorter and unedifying, Brazil never recovered psychologically from losing that status. In fact, soon after a military coup sent Pedro II into exile, they sent a delegation to woo him back (which he refused to do). So the country had to make do with its own imperial size, embassies that are palatial (the one in Santiago has its own chapel), and flexing its muscle from time to time among its smaller neighbours (it shares a border with all but two of South American countries, Chile and Ecuador).
Flexing your muscle is not difficult when you are the size of an elephant. Brazil is only 11 % smaller than China (though it has less than a seventh of its population). Elephants have small brains but powerful muscles, and their mere presence is intimidating. One has to say that Brazil has used its size in a generally benign and certainly “softly softly” fashion, rather than in an openly aggressive way.
Following a long period of crises, and after thinking that their economy had been “stabilised”, the country actively embarked on making its mark on stage. This has gone into overdrive in recent years. It started modestly enough with a bid to represent Latin America in a potential permanent seat of an enlarged Security Council (a UN debate that is far from being resolved anyway). Its only likely contender, Argentina, though pretending that it is still in the running, does not appear to have much of a chance, to put it mildly.
As this matter was dragging on, Brazil thought up another role for itself, closer to home. It convinced the USA, busy killing babies in Iraq and Afghanistan, that it could be its proxy “regional stabiliser”. That was not really Brazil’s real intention. It did not want to be a proxy for anyone, but have a role for itself. So it thought up UNASUR, making sure membership was limited to countries south of the Panama Canal, and more importantly, its offshoot, the South American Defence Council (or CDS). The latter had a double purpose: give a military dimension, and provide an outlet for its growing defence industry. Massive acquisitions of modern weaponry mainly from France, at various stages of confirmation, all insisted on “technology transfer” clauses. One hopes that the quality of training in their armed forces has improved to the point of handling nuclear submarines and U$ 200 million a piece state-of-the-art combat aircraft. During WWII, the Brazilian Navy had the dubious record of a destroyer sinking itself (a badly positioned machine gun fired a “training burst” into ammunition stored on the deck below, causing an explosion from which only two crew members survived to tell the story). There is no limit to the ambitions. Vice-president Alencar recently expressed the wish that Brazil would become a “nuclear power”. Contrary to people’s attitude to Iran, not a single voice protested around the world (not even when the country’s authorities refused access to an IAEA inspection team to an army facility known as IME, where nuclear research is carried out).
Among its immediate neighbours, Brazil played godfather to the start-up Bolivian gas industry, and put pressure to stop a break-up of that country sponsored by local business interests with Israeli help. With Paraguay, after playing an unusual game of toughness and carrying out live ammunition exercises on its borders, it accepted to renegotiate iniquitous agreements on revenue from the joint Itaipu hydroelectric project, trebling the sum paid to its small neighbour.
More recently, Brazil became even more proactive in terms of diplomacy by the crucial role it is playing in trying to restore democratic rule in Honduras, having arranged for the deposed president to return in secret and take refuge in their embassy of Teguchi-galpa (as French TV called the Honduran capital, probably thinking it was a provincial town in Japan). Though the gathering was held in Venezuela, Brazil was a strong voice in the recent African-Latin American summit. It had previously flirted actively in the continent, particularly with the Portuguese-speaking former colonies like Angola and Mozambique. It has also nibbled at the Palestinian problem, the G-20 group and the Doha trade round. Last April, in another fit of panache, the country lent U$ 10 bn to the IMF.
Brazil is not a member of the OECD, but holds observer status there since 1994, and some time ago became the first OECD country to join a trade pact norm with its members. Last but not least, Rio de Janeiro’s just became the seat of the 2016 Olympic Games, the first to be held in the region. This is despite the fact among the four finalists, it had the lowest “suitability” score in the evaluations. The honour will cost the country another U$ 5bn in investments.
POLITICS AND THE LULA PHENOMENON There is exactly a year to go until the October 3rd 2010 elections, which will mark the end of two terms of Lula presidencies. That day will also mark the renewal of all the Lower House and part of the Senate. Lula cannot stand again on this occasion, but he is said to be already eyeing the one election after next, in 2014.
In the meantime, his personal popularity still stands at an incredible 65 to 70 % or so, a score only bettered by Chile’s Ms. Bachelet, also coming to the end of her single term. What can the explanation of such popularity be, after years in power and in the midst of a severe crisis? Unassuming agreeable personalities, trying to stay above daily occurrences (”blindaje” as they call it in Chile), whilst appearing like the person next door (which in a way they both are).
The problem with such popularity is that it does not rub off on an heir, anointed or not. Lula has hand-picked his rather dour chief of cabinet Ms. Dilma Rousseff, a Bulgarian from his own PT party, as heir apparent. It did not help that soon afterwards she was diagnosed with cancer, but the fact is that, exactly a year ahead of the polls, she has only 15 % backing in the polls, running virtually in third position in a field led by the PSDB’s Jaime Serra.
One eyebrow raiser has been the formal announcement on September 30 that Central Bank president Henrique Meirelles would bid for the governorship of Goias state, in alliance with Lula’s PT party, thus putting a question mark on the real independence of the Central Bank ( a concept which in any case rarely goes beyond the theory in Latin America)..
THE DEBT OVERHANG I have often referred to the conspiracy of silence, for there is no other word, surrounding Brazil’s fiscal situation, which everyone appears to wantonly ignore, to the great joy of the authorities. Whereas it might be true that the way their finances currently look, France, Spain and the United Kingdom may declare bankruptcy sooner than Brazil, it is amazing that on September 22, Moody’s joined Fitch and S&P to give the country an “investment grade” rating.
Brazil is very good at pulling the wool over the eyes of the average analyst and journalist, concentrating on the totally irrelevant “primary balance”, and the size of the debt as a percentage of GDP. Debt is a precise figure, which your creditors can calculate down to the second decimal. GDP is a nebulous concept. A quotient of the two is meaningless. In any case, debt is not serviced with GDP (nor with trade surpluses), but with fiscal revenue over and above other needs.
With the just published fiscal results for January-August (the amazing thing is that these figures are available for anyone to see on the Central Bank’s website), we have the following results:
The treasury generated a primary surplus of U$ 23.5 bn over 8 months, but this only covered 40 % of an interest bill equal to U$ 58.5 bn (U$ 241 million in interest per calendar day, or U$ 10 million per hour). The resulting overall deficit was U$ 35 bn in 8 months, nearly SIX TIMES the figure for the same period of 2008. If that is an “investment grade”, I’d hate to see the figures for a junk bond issuer. Total debt as of August 31st stood at U$ 1,055 bn.
The most worrying aspect of this is that the deterioration of public finances took place in a context of falling interest rates, and in particular the benchmark SELIC rate at which around a third of the debt is denominated. A year ago, SELIC was at 13.75 %. It is now at 8.75 %, down by over a third in just a year, but a reversal is expected, with some local forecasters thinking it may go up by 4 points by the end of 2010.
In late July, Brazil managed to place a 28-year bond issue for U$ 500 million, with a coupon of 7.125 %. Admittedly this is more than Citibank is paying us on our time deposits, but at least these are guaranteed by Uncle Sam (why are you laughing?). There was actually demand for U$ 7 bn and the bonds were placed at 108.63, still giving a yield of 6.45 %. The question is whether they can keep up the coupon and pay the principal in 2037. Look at the past 28 years and you may find the answer.
SOME OTHER STATISTICS Brazil was the Latin American country with the largest stimulus programme, much of it unfortunately directed to consumption, with some going to housing. Credit card use is at a record level, and bank credits for that purpose are up. This will add debt accumulation to the population. Even though they are at a 14 year low, average interest rates on consumer credits are at an average of 7 % A MONTH (that is 125 % per year, unless you are a Chilean economist, and think it is actually 84 %).
In fact, one wonders where this lead in recovery that Brazil is supposed to be taking in Latin America can be seen (“The Clear leader of the region’s recovery”, as JP Morgan described the country in late July). One would have hoped that the shit they put us in over the past year would shut up all these investment bank twits. No, they still talk, write, get invited to speak at seminars and even insist on getting bonuses! Only retail sales and car sales recently showed positive growth, helped by all sorts of incentives. Passenger car sales to September rose by 5.5 %, but the lack of real investment is better reflected by the 20.2 % drop in truck sales over the same period. Industrial Production in the first 8 months was down 12.1 %, and second quarter GDP was a negative 1.2 %, after a first quarter drop of 1.8 %. Passenger car output to August was 10.7 % lower and that of trucks 34.6 % down. The August urban unemployment rate of 8.1 % was the same as in June, and 0.5 points above a year earlier.
On the external front, the 8 % rise in the January-September trade surplus (to U$ 21.28 bn), was only due to imports (-31 %) falling faster than exports (-25.9 %). Capital goods exports alone were down 46 % in January-August. This helped shrink the first semester’s Current Account deficit (- 52.5 % to U$ 9.56 bn).
External reserves as of end September were at a comfortable record of U$224 bn, so at least (thank heavens for small mercies) we do not have to fear a good old fashioned external sector crisis (which used to cause most Latin American disasters in the past, hence the fact that for many psychologically frozen analysts), Country Risk is limited to a study of the external sector.)
Inflation is also under control (under 3 % in the first 8 months, accumulating a 12-month total of 4.4%).
SAUDI ARABIAN MIRAGE? Those familiar with the works of French fabulist La Fontaine, himself inspired by older writers of morality tales going back to Greek literature, may remember the one about Perette et le Pot au Lait. In it, Perette, a carefree milkmaid, is walking with a pot of milk on her head and she starts daydreaming about how she is going to benefit from the milk she is transporting, ending up as the head of a major farming operation. Unfortunately, she fails to see an obstacle on her way, so absorbed she is in her fantasies, that she stumbles and all the milk is spilt, putting an end to her dreams.
No long ago, Brazil announced with great panache (no faltaba menos) that it had found a giant oil field under the sea bed, with such potential as to make the country a new Saudi Arabia. “A passport to our future”, described it presidential hopeful Dilma Rousseff . The money was going to go towards developing the country and eliminate poverty (why didn’t they do it when they had rubber or coffee, one wonders). Heated discussions started as to how it was going to be exploited, by whom and which proportion of earnings would the various stakeholders get. There was even talk of the “Norwegian model” in managing the bonanza.
Back in 1974, Brazil claimed similarly (soon after the first oil shock) that it had found major deposits that would make it self-sufficient in oil over the short-term. In fact, it took over 30 years and several more finds to barely reach that aim. In fact, strictly speaking, the country is not as yet self-sufficient in oil, gas and derivatives, as the sector’s trade balance in the first 8 months of 2009 was still in deficit to the tune of U$ 3.5 bn. Even if we grant the fact that the new deposits, known as “Pre-sal” exist in the quantities mentioned, there are a number of strong doubts and reservations.
-The deposits are some 5,000 metres below the sea-bed. Though the technology to extract at that depth does exist, it is very specialized and expensive. -There is no single mega-deposit, but a series of “pockets” of oil, which have to be exploited separately. They are also spread over an area measuring 160,000 Km2. Each will need its own expensive perforation and production installations (only two companies in the world currently manufacture them), at a cost of between U$ 80 and 90 a barrel (the figures vary, and they are probably impossible to gauge until you actually get on with it. -Due to the nature of the deposits, the recovery rate of the oil “in situ” is likely to be below 15 % of what is actually there -There are some legal problems related to the proximity of some of the Pre-sal to existing concessions held by other firms.
Even if it is true that the new discovery doubles the size of Brazil’s oil reserves, it will require a tremendous investment and technical effort to exploit it, in order to sell at a price which may or may not be economic. Hardly a boon considering the previously described fiscal constraints, particularly as in order to keep control, the authorities seem keen that most of the work will be done by the state firm PETROBRAS.
According to the company’s president, they will invest no less than U$ 111bn to develop Pre-sal by 2020, to which one has to add nearly U$ 300 bn that the private sector would have to invest as suppliers of goods and services. There are strong fears that such sums will crowd out the availability of capital for other needs in both the state and the private sectors. Before Pre-sal became the talk of the town, there was another pharaonic fantasy of building 60 nuclear power stations. Petrobras estimates that it will need 40 rigs by 2017 (there are only 80 similar ones in service today all round the world), of which it insists 28 must to be built in Brazil itself. Is it the best way to spend U$ 400 bn when the rest of the world is trying to reduce dependency on fossil fuels?
STILL AN UNDERDEVELOPED COUNTRY If Brazil wants to emulate Saudi Arabia, it might better consider a policy of cutting the hand of thieves. Even by Latin American standards, the levels of corruption and mismanagement in the public sector are abysmal, as are business manners. In the past two years, I have sent umpteen messages to various Brazilian entities ranging from the Rio Film Festival to the Defence Ministry. Not a single one has ever been answered.
The national infrastructure is seriously lacking in many ways. Ports are a big problem, and recent accidents have also turned up a disastrous situation in airports and air traffic control. Here again, the announced action is on prestige projects. The prime example is the high speed train link between Rio and Sao Paulo, originally estimated at U$ 11 bn, but now expected to cost from U$ 15 to 20 bn. If such a proven technology is difficult to cost up, imagine what can happen to the calculations for Pre-sal investment. Only a third of roads in the country are considered to be in good condition. Energy shortages also loom in the medium-term.
To that, one has to add the worst income distribution on the continent, and abject levels of poverty. Farmers, over and above the 8 % drop in output estimated for this year, have seen concentration of ownership actually worsening in the past 20 years. No less than 30 % of Brazil’s farmers are illiterate. Though some poverty-reduction programmes such as Fome Zero and Bolsa Familia have brought-in relief, rural poverty is still a huge problem.
One day, the Hadji Yatmaz may not stand up after all. If you circulate this report to third parties, I am not interested in their baseless debunking comments. This paper was very well researched, and contrary to their impressionistic opinions, is based on facts and figures, goods which are often in short supply among other scribblers. Also anyone complaining that I did not mention “the good aspects”, should remember that I am a diagnosis doctor, not a publicist.
Right here right now gold is a lick and a spit away from the highest price it's ever fetched in US dollars, but the difference is that it's getting there on the back of a solid build-up, not the spike of before.
This is good.
Your humble correspondent trimmed a little PM exposure last week and it sure looks like the timing was wrong-o (oh wow, again?) . It goes without saying that the weakness in the dollar is at least 90% of this waxball here, but gold is doing what it does well; protecting the portfolios of those who didn't believe the "all is now well" self-congratulary backslappers known as economists; we still know them as dumbasses-in-suits.
Hats off to Eduardo Garcia of Reuters Bolivia (we've feted the dude before due to his better-than-the-rest reports on Bolly) who published the following report on Reuters newswires last week (h/t reader PD).
To finally see some credit given by serious financial media (not just sillyblogs like this one) to the Bolivian economic success story is a refreshing change, but Garcia gets into the nitty-gritty as he explains how Evo's radical communist idea of "giving money to the poor" actually helps the economy.....wild huh? It also has wild'n'crazy things called "facts" that include:
Bolivia's record international currency reserves
How Bolivia is on track to be the fastest growing country in the whole of Latin America this year
The manner in which children are getting better schooling
The communist conspiracy of giving retirement aged people a pension
The red-in-bed way of "helping pregnant mothers"
The way economic growth brings social stability (neocons: read&weep, dumbasses)
The absence of bad debts in Bolivia's macroeconomic make-up
So here's Garcia's piece. By the way, it's unlikely you've seen it before, because although it was a strong note on the Reuters newswire service, strangely and weirdly not a single open web service picked up on the note so strangely and weirdly it has managed to miss the eyes of those of us not equipped with a U$1,500/month Reuters terminal. It's almost as if they didn't want to you read it...strange'n'weird that, innit?
LA PAZ, Oct 1 (Reuters) - Bolivia's economy is healthy despite the global slump because leftist President Evo Morales is redistributing soaring state revenue as subsidies to the poor, the country's finance minister told Reuters on Thursday.
The Bolivian economy grew 3.2 percent in the first six months of this year, despite lower export income for natural gas, which is key to the Andean country's economy.
The International Monetary Fund says Bolivia is likely to post the highest growth in gross domestic product, in Latin America at 2.8 percent.
Finance Minister Luis Alberto Arce is even more optimistic. He expects GDP to grow 4 percent this year, largely because Morales has handed out money to the country's poor majority, which is boosting their spending.
"Our policy was to make the cake bigger for Bolivians with the nationalization policies, to increase state revenue. Our second policy was to divide the cake better in order to give more to those who have less," said Arce.
Arce said the subsidies are the "small engine of growth" that has allowed Bolivia's economy to grow despite lower export revenue caused by drops in demand and prices for natural gas.
Moody's Investors Service and Fitch Ratings upgraded Bolivia's credit ratings last month, citing the country's good macroeconomic performance.
But they noted that years of above-trend growth, the benefits of external debt forgiveness, limited foreign banking interests in the Andean nation and the absence of bad debts prevalent in developed markets helped Bolivia to avoid a direct fallout from the global crisis.
CASH FOR THE POOR Morales, an Aymara Indian from a poor background who took office in 2006, has increased taxes on foreign investors and has nationalized energy, mining and telecommunications firms.
State revenue from the key natural gas sector boomed to $2.65 billion last year, from just over $1 billion in 2005, and revenue from the mining sector increased fourfold in the same period to $128.1 million.
The country's foreign reserves have rocketed to around $8.5 billion from $1.7 billion at the end of 2005.
Morales' government is spending some $320 million a year in grants to encourage parents to keep their children in school, in pensions for the elderly and in cash handouts to persuade pregnant women and mothers to go through health checks.
Earlier this year the government said that in 2008 nearly 2.4 million Bolivians received cash subsidies, roughly 25 percent of the country's population.
That is on top of the nearly $200 million donated by Morales' main Latin American ally, Venezuelan President Hugo Chavez, that Morales has spent in hundreds of small education, sports and health projects since 2006.
Although critics have said the government is giving subsidies to buy support from poor Bolivians, Arce says the stipends are a good way to redistribute wealth.
"These are policies to redistribute income ... tomorrow when the poor of today are no longer poor, of course we're going to have to stop giving this support," Arce said.
But the economist said that the government is likely to continue giving subsidies in the medium term because they stabilize the country.
"We can't stop ... because it's something that brings social stability. Social conflicts have decreased greatly with our government because we're solving the social problems that people have," Arce said.
Before Morales took office, three presidents in three years were forced to step down amid social unrest.
Featuring red-tinged losers only today, just to be different and to sing the FundyMan Blues. I mean, who needs to analyse stocks and understand what they're really worth when you can follow the BS pumpers and get rich, right? Right?
Fortuna Silver (FVI.v) down a penny at $1.39, even though silver is up and this company produces Ag more efficiently than the rest.
AuEx Ventures (XAU.to) down 4.8% at $2.81, even though it had more positive news from Long Canyon for the market this morning.
Troy Resources (TRY.to) down 3.1% at $1.90, even though it's big brother listing in Oz gained last night and the stuff it makes is up nicely this morning. Go figz, dude.
Gleichen Resources (GRL.v) down 6.5% at $1.30, even though it has TeamCanada™ behind it and is about to raise $200m to fund its superduper new purchase from Teck.
ATW Gold (ATW.v) down a penny at $0.38, even though it has a brand new Mexican sugardaddy. Perhaps that's due to the people selling their shares to Ernie....
Dynasty Metals (DMM.to) down 3% at $3.52, even though the company is now producing gold. Gotta laugh.
ECU Silver (ECU.to) down a penny at $0.51, even though.........errrrrrrr.....hmmmm.... nope, can't think of one this time.
El duderino over at 'Abiding in Bolivia' has noted on several occasions recently that the online medium Latin American Herald Tribune is one of the few places that offers fair, balanced reporting on his subject country. This humble corner of cyberspace would like to second that opinion of the LAHT today and note that its coverage of Ecuador's issues has been equally fair and balanced.
What I always but always want from a news media is a piece of reporting that doesn't try to pander to my political views or those of anyone else...just tell it to me straight, please. Don't tell one side and don't prefer one opinion over another. These journalistic basics are woefully lacking when it comes to coverage of AxisOfEvo countries such as Ecuador, Venezuela, Bolivia. None of these countries are political heaven on earth, but neither are they some sort of disaster zone.
And so to the latest newsworthy happenings in ecuador, that of the indigenous protests. that are largely aimed at water rights but encapsulate opposition to mining projects in the region. While the world of whore reporting on LatAm tries its hardest to find controversy where there is none (note President, indigenous groups at odds over fatal protest in Ecuador from CNN, Ecuador Indigenous Groups Threaten More Radical Protests from DJNW as just two of far too many) the LAHT tells things as they are. Here's the first part of its recent report on the current situation in Ecuador as regards the indigenous protests, click through for the rest and kudos for the good job of work done by LAHT.
QUITO – Delegates from the Shuar and Achuar Indians delivered to a governmental commission a petition as the Confederation of Indigenous Nations of Ecuador, or Conaie, and the Ecuadorian government are holding discussions, which began because of the Indians’ fears over a bill they say will privatize water.
The government delegation went to Amazonia on Saturday, where the protest has been under way since last Monday, to meet with representatives of the Indians.
The meeting with the Shuar and Achuar tribes took place in the town of Sucua, in Morona-Santiago province.
Miguel Carvajal, the coordinating minister of internal and external security, who headed the government delegation, said that the government complied with what it had offered to do before the meeting, namely to receive a list of the tribes’ demands and construct an agenda for dialogue.
President Rafael Correa said Saturday that Conaie, Ecuador’s largest Indian organization, had requested to meet with him about the water bill, adding that he would receive their representatives “with open arms.”
Following on from the previous post (better read first), here's how we broke down the EC.v July 17th PR as a case study in The IKN Weekly, issue 12:
If you want to believe everything you read in junior miner press releases, be my guest, I’m not going to stop you.
The news release from Ecometals (EC.v) dated Friday 17th July is one that we’re going to take apart and examine carefully here today as an object lesson in the things written for the benefit of suckers. There are two parts to this story. The PR dated yesterday (10) was published to ‘clarify’ (their word, not mine) an earlier PR dated June 29th 2009 (11) that told the world about a successful shipment of manganese ore from its Brazilian operations and the rosy prospects the firm had for the future of its Brazil operations. I’ve been trying to think how to do the analysis of these two press releases in the most concise way possible, but really we need to go the long route, be a little tedious with word count and lay out the two PRs here to look at them in parallel. We’re taking up room this way but it’s the only real way of applying the scalpel correctly, at least as far a I can see. So here goes, and this is the paste of Ecometals’ first release, dated June 29th:
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TORONTO, ONTARIO--(Marketwire - June 29, 2009) - Ecometals Limited (TSX VENTURE: EC BERLIN: GDQ FRANKFURT:GDQ; the "Company") -
The Company wishes to announce that it has completed its first manganese ore shipment from Port Santana, BrazilThe Company believes this first shipment represents a major step forward for its business activities in the State of Amapa. With the completion of this shipment the Company will now apply for three new permits. The first application will be for the export of up to a further 300,000 tonnes of manganese ore direct from its manganese stockpiles at Serra do Navio which will significantly raise the Company's market profile as a creditable supplier of manganese ore in the world market ahead of long term sustainable sales out of Serra do Navio. This will also provide interim funding prior to the completion of the processing plant at Serra do Navio. The second and third licenses will be the simultaneous applications for the Preliminary and Installation Licenses which will enable the Company to commence the construction of a jigging process plant at the Serra do Navio mine in order to value add and sell the remaining 3.5m tonnes of stockpiled manganese ore.
The Serra do Navio Project design work is well advanced and the Company is in discussion with a development bank for funding. The Company will provide updated statements on the Project as and when information is finalised.
Chief Operating Officer Daniel Major said, "This first shipment is a major step forward for Ecometals as it represents the commencement of the Company's commercialisation of its projects in the State of Amapa. Subject to funding and permits, we intend to now actively progress our manganese capital project at Serra do Navio with resulting further manganese beneficiation and shipments from Brazil."
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All very positive, bright and warm future, for sure. That news came on the back of its June 26 announcement (12) about its plans to drill its Rio Zarza property in Ecuador, close to the now famous FDN discovery, that doubled the EC.v stock price on that same day. The news about the manganese shipment pushed EC.v stock back up 27.8% on June 30th on heavy comparative volume.
So now we have the second PR, dated Friday 17th July. Here goes, and this time I’ve added my notes between the lines in bold type to see what all the trouble is about.
As a result of a review by the British Columbia Securities Commission, Ecometals (the Company) is issuing the following news release to clarify its disclosure in a previous news release issued 29 June 2009 and in its Management Discussion & Analysis for the 9 month period ended December 31, 2008.
In other words, the regulators in Canada have, for once, been doing their job correctly. The BCSC has reviewed recent EC.v filings, called “bullshit” and told them to rectify or else.
Serra do Navio Mine Site
The Serra do Navio manganese mine was operated by Industria e Comercio de Minieros SA (ICOMI) from 1957 until closure in 1997, producing a reported 34Mt of commercialised products. Ecometals owns 66.67% and operates a joint venture company, which is the owner of the mineralised material, with ICOMI (now Alto Tocantins Mineracao Ltda).
On closure of the mine, Roberto Costa Engenharia Ltda completed a report which covers the geology, historical mining and processing methods, production, metallurgy, mineral economics, and an estimate of the remaining in situ mineralized material. Ing. Roberto Costa is a registered mining and metallurgical engineer in Brazil under CREA MG-4381.
As the Costa resource report was completed in 1997, the resource is "Historical" under NI43-101.
The above is preamble to make clear that the resource referred to by EC.v is not 43-101 compliant. This was not made clear by the company in its previous PR. The theme is revisited as this clarification PR continues.
Costa reports the remaining in situ (in ground) resources as 1.2Mt oxide @ 38.43% Mn and 4.4Mt carbonate type @ 30.61% Mn mineralised material. The historical mineral resource was not classified as measured, indicated or inferred, and the Company considers the mineralized material is comparable to a potential mineral deposit for which there has been insufficient exploration to delineate a mineral resource.
Stockpiled manganese mineralised material at Serra do Navio was surveyed by Topgeo Servicos Ltda as 1,615,759 cubic metres in 34 stockpiles. Using a density of 2.5t/m3 for floated mineralized material from the Costa report, this amounts to a total of approximately 4Mt of stockpiled manganese mineralized material. However, the stockpiles are comprised of material which has been processed to different sizes and grades, and contain both oxide and carbonate type mineralization. A more conservative density of 2.02t/m3 taken as the lowest density measured by SGS do Brazil Ltda on similar stockpiled material at Porto Santana is assumed by the Company. This results in an estimated 3.3Mt of stockpiled manganese mineralised material at Serra do Navio.
Small point: The ‘3.5Mt’ (million metric tonnes) mentioned in the original puff-piece PR is now 3.3Mt ....or perhaps 4Mt.
Grade ranges from grab samples taken from larger stockpiles range from 28.3% to 45.3% Mn, but there has been insufficient work to determine the inherent inhomogeneity of the material and the samples are not considered representative of the total volume of the stockpiles. The Company considers the stockpiles of 3.3 to 4Mt with potential grades in the range 28 to 45% Mn are comparable to potential mineral deposits for which there has been insufficient sampling and test work to determine the average grade or delineate a mineral resource.
Neither the in situ resource nor the stockpiled mineralized material at Serra do Navio are considered current Resources by the Company according to CIMM/JORC definitions.
Important point: What this means is that EC.v simply cannot go around telling people it “has” 3.3Mt or 3.5Mt or even 4Mt of stockpile to sell. This stuff is not CIMM 43-101 (or JORC, the Australian equivalent to the Canadian certification process and equally as trustworthy) compliant and EC.v needs to put it through the correct procedures to certify it. The 43-101 certification process came into being after the Bre-X scandal for this precise reason; it stops mining companies from being able to say “we have this, we have that” to a less knowledgeable audience (i.e. you and me) before the claim is proven by a reputable and qualified person. In its June 29 PR, EC.v was playing fast and loose with this fundamental point and was representing its stockpile of manganese mineral as something that it is not. There are two things to recognize here; firstly EC.v has to get a third party in before it can shoot its mouth off again like this, secondly that 3rd party will cost EC.v both time and money. One of the recurring themes in this clarification PR is the way it disassambles the whole impression EC.v was trying to give of “well, we just scoop it up, put it on a boat and collect the cash” and this is the first example of that.
Previous references to the term "ore" in Company disclosures referring to some of the above material were inappropriate because the Company does not have a current mineral resource, pre-feasibility or feasibility study to demonstrate economic viability.
Very important point: This part shows clearly that EC.v is either incompetent or dishonest. If you or I laypeople in the word of geological science, mix and mush the words “mineral”, “resource”, “ore” etc nobody worries too much about it. However in the world of geology and especially mining the word “ore” has a very specific meaning. Here’s a good definition as culled from my ‘Boys’ Own Guide to Mining, 1973’
“A mineral or an aggregate of minerals from which a valuable constituent, especially a metal, can be profitably mined or extracted.”
Because EC.v has not certified its stockpile of manganese mineral as a resource (or a reserve), it cannot possibly state that the mineral in question is profitable. No way. Therefore it simply cannot call it an “ore”. This is so basic it hurts and so that’s why I say they’re either incompetent (i.e. called it an ore without realizing the mistake...and what kind of mining company doesn’t know the difference?) or dishonest (they knew it wasn’t an ore by any definition but went ahead and called it so to fool the suckers who were about to read their PR). Yes, what they have is a stockpile of mineral. No, what they do not have is ore. So why say so?
On 29 June 2009, the Company disclosed "...project design work is well advanced", and referred to discussions with a development bank for project funding. Metallurgical recovery tests on beneficiation of the manganese stockpiles at Serra do Navio are being conducted by Bateman Engineering NV and in-house conceptual process design is ongoing, to enable a management decision to be made on advancing the project to commercial production. Preliminary discussions with Banco Amazonia SA in Brazil have taken place, with the objective of financing up to US$10M for the capital and development costs for construction of a beneficiation plant to process the stockpiles at Serra do Navio.
So much for that “scoop it up, put it on a boat and collect the cash”, eh? So apparently the stockpile at the mine will need to be put through a machine that will cost U$10m to build before it gets shipped and sold. Also, not a stone’s worth of foundation has been laid yet. Also, they don’t have the money to build it and have had “preliminary discussions” with a bank about going (further) into debt in order to raise the cash. Despite all that EC.v sees fit to tell its audience that things are ‘well advanced’. The background whiff of PT Barnum and his phrases about how suckers are born every minute has now turned into a stench.
But wait! There’s more! Read the next bit about the Porto Santana stockpiles and we’ll put it into context in the next comment section:
Porto Santana Stockpiles
Stockpiled manganese mineralized material at Porto Santana was mined from Serra do Navio but was not shipped previously by ICOMI due to prevailing economic conditions. SGS do Brazil Ltda surveyed the volume and density of nine stockpiles at the Anglo Ferrous Brazil (AFB) port resulting in a total of 57,935.4t. Grade estimates by SGS ranged from 29.46 to 48.05% Mn.
The stockpiled mineralised material was transhipped by road from the AFB port to the public port operated by Compania Docas do Santana (CDSA). Material from the nine stockpiles was blended into two stockpiles of high and low grade. Topgeo Servicos Ltda re-surveyed the two blended stockpiles and concluded 13,079.78m3 for stockpile A (low grade) and 6,031.79m3 for stockpile B (high grade), with 2,715.31m3 remaining at the AFB port. Not all the material was shipped to the CDSA port as the maximum size vessel limited by the depth of the Amazon River delta is 45,000t.
Using the density measurements estimated by SGS, the total material at the CDSA port was 42,394t with 6,023t remaining at the AFB port. A discrepancy of 6.5% between the original stockpile survey at the AFB port and the survey after transhipment is attributed to loss of material on the laydown area and error inherent in the volumetric surveys.
A sales contract with an undisclosed buyer was made for 35,532t of mineralized material from the stockpiles at CDSA. The sales contract required a minimum of 43% Mn of high grade material (all of stockpile B) and the remainder of minimum 35% Mn from stockpile A (low grade material) to fill the hold of the ship.
Continuous sampling according to ISO Standard 4296/1:1984 during ship loading was conducted by Inspectorate do Brasil Inspecoes Ltda. Results of draft loading and analysis measured 12,088t of 41.62% Mn (high grade material) and 23,444t of 35.96% Mn (low grade material) loaded on cargo ship MV West Lake.
There remains an estimated 12,885t (6023t at AFB port and 6,862t at CDSA port) of low grade stockpiled manganese mineralized material available at Porto Santana. This material is potentially saleable, and the Company is actively pursuing buyers. This remainder will be supplemented by additional material from Serra do Navio stockpiles to fulfil the 65,000t purchased by Ecometals separately from the JV agreement with Alto Tocantins.
In the first PR we were told that 35,532 tonnes of manganese ore was shipped from from Port Santana and had a gross value of C$1.1m. This is apparently true. However we knew nothing about the “high grade” and “low grade” stockpiles. We didn’t know that the high grade stuff is now all sold and there’s only 12,885t of low grading mineral left (not the 15,000t it mentioned in the first PR). And we certainly didn’t know there may be a contractual dispute about the shipment, as the buyer specified a grade of manganese mineral (43% for the high grade) that EC.v has apparently not been able to supply. Whether this point is resolved quickly or becomes a payment-delaying dispute is not mentioned. Next, in the original PR the sale of the remaining mineral “is planned shortly, as soon as shipping can be arranged” while in the clarification PR we’re told that EC.v is “actively pursuing buyers” (i.e. can’t sell the mineral) and isn’t just trying to find a ship to load and float to a happy customer. And then finally, we’re told that EC.v has another 21,000Mt or so to come that it purchased from the JV, but it isn’t specified when that ore will ever arrive portside; from the looks of things it will have to build that U$10m sorting device first so don’t hold your breath.
Manganese is not traded on international commodity markets, and prices are based on negotiation of individual contracts. For this shipment, the total gross revenue to the Company based on a negotiated price was C$1.1M.
A little math breakdown: according to my calculator there were a touch under 29 million Lbs of contained manganese in the shipment that left port (35,532Mt x 37% avg grade Mn x 2204.62), which means it was sold at about 3.8 Canadian cents per Lb of pure manganese. A theoretical of course, as it has to be processed, there will be wastage etc, but infomine today has manganese selling at a little over U$1/lb, down from around U$1.80/lb this time last year. I can’t help thinking that in the rush for a little cash flow EC.v is leaving plenty of cash on the table....
My how we giggled last week when noting that the CEO and President of Constitution Mining (CMIN.ob), Willem Fuchter, suddenly and unexpectedly resigned from the company. But then the stifled titters burst into full-blown howling-and-rolling-around-on-the-floor when this nutbars-only company put out its next PR, excerpted here:
LIMA, PERU--(Marketwire - Oct. 5, 2009) - Constitution Mining Corp. (OTCBB:CMIN - News) has appointed Mr. Gary Artmont of Quito Ecuador, to serve as the new President and Chief Executive Officer of the Company replacing Willem Fuchter. In addition, Steve McMullan has joined the Board of Directors and Dr. Richard Garnett has been named Senior Technical Field Coordinator.
Since 2007, Mr. McMullan has served as Vice President of Exploration of Ecometals Limited, a Canadian public company listed on the Toronto Venture Exchange. Mr. McMullan is responsible for all aspects of planning, execution, quality assurance, quality control and regulatory compliance of exploration programs conducted by Ecometals Limited. Mr. McMullan is also a member of the Ecometals Disclosure Committee and is responsible for all technical disclosures by the Company.
Let's ask our friend the owl what he thinks of this. What say you, owlyfriend?
ECOMETALS! BWAAAAAAAAAAHAHAHAHAAAAAA! Talk about a match made in heaven! One scuzzy pump job begets the other of course, but if you haven't suspected both these companies up til now how many more clues do you need? What? Another clue? OK, here's EC.v in the time McMullan has been "planning, executing" and all that jazz at Ecometals:
But the cherry on the cake is that last line about CMIN.ob's new director. We are reminded that Steve McMullan (and I re-quote) "....is responsible for all technical disclosures by the Company."
Yes indeed, this is the person responsible for the technical disclosures at Ecometals, folks. And the high quality, responsible work he does there includes this hilariously classic press release dated June 29th 2009 that carried the title "Ecometals Completes Manganese Shipment from Brazil". That presser was so bad that even the slumbering fools that supposedly regulate the Canadian capital markets arose from their collective torpor for a day and told ecometals "Dudes, this release is total bullshit and you need to issue a correction else we whup yer tushes". This they did on July 17th in the PR linked here. There were so many errors and omissions noted in the original bullshit PR that it's tough to list them all, but standout specials include the way Ecometals uses the word "ore" when it cannot (i.e. economic geology 101, McMullan) and the way it clears up the implied message that all EC.v had to do was scoop up a whole pile of rock and load it on a boat to make money when, in fact, there was a trifling matter of raising $10m or so for equipment before it could do anything.
This incompetance is the "calibre" of people proudly showcased as new directors by CMIN.ob. It will all end in tears, so just make sure it's somebody else crying when the caca hits the ventilador. Avoid like the plague. DYODD, dude.
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