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11/21/09

Alan von Altendorf on oil companies and the SEC (update)

Good news from yesterday's post.

Felix Salmon picked up on the story and wrote an article here. Then SinkingAlpha jumped on first Felix's post and then decided to run the AvA article on site (as a three parter). It's currently on the front page main headline, has been chosen as an editor's pick and is getting some smart comments from pretty knowledgeable oilheads.

It's also found its way to The Business Insider, where Joe W completely misses the point (he's usually better than this). Probably didn't bother to read the article. If you haven't read AvA's most excellent exposé of the oil industry, get your copy right here (in PDF from the author's website).

Fact of the day

FACT: There is a presidential election coming soon in Colombia.


BOGOTA — Colombia warned its forces were on "maximum alert" and were prepared to defend against any attack, amid rising tensions with neighboring Venezuela.

Colombian Defense Minister Gabriel Silva issued the warning after a meeting of the country's national security council in Arauca, a city on the eastern border with Venezuela.

He said President Alvaro Uribe and the military forces of Colombia were intent on remaining calm "because they know there are provocative forces on the border that must be avoided at all cost."

But this "does not mean that we are not prepared or are not on maximum alert to prevent any aggression against Colombia, against Colombians or against our territory."

Uribe's national security council met for five hours in Arauca with military and police commanders in the border area a day after Bogota charged that Venezuelan troops had blown up two footbridges across the border in northeastern Colombia.

Silva said the destruction of the bridges was an aggression against yada yada continues here

Keith Barron interview

Jim Puplava interviewed Keith Barron (of Aurelian fame) this week in the first 20 minutes of Puplava's radio show. Well worth listening to and thanks to reader MP for passing on the link this morning. I wonder what mining company he was thinking about at minute 10? (Hint)

Here's the link to the show.

11/20/09

The Friday OT: The Cure; Friday I'm In Love



Friday never hesitates.




With a doff of the cap to RickB over at TenPercent, this song is dedicated to my youngest daughter. She knows why. The rest of you can enjoy one of the greatest pop songs ever made. Canned joy.

Trading Post (jump to conclusions edition)


For the record, I do not post on any message or bullboard anywhere ever. If somebody's pretending to be me it's a reflection on their sad-assed life....so no more mails, please?



ECU Silver (ECU.to) down 2.4% at $0.80. How's your long position doing, Wistar?

Lumina (LCC.v) up 7.5% at $1.29. Low volumes for sure, but has had that Elmer Fudd "sssh be wevy qwiet 'am huntin' wabbit" look about it for a couple of weeks. i own, so DYODD.

Minera Andes (MAI.to) UNCH at $0.72 and just can't change its funk. I used to own, so DYODD.

MAG Silver (MAG.to) down 1.4% at $5.82 and betcha a dollar that if you hang out at the San Francisco mining show this weekend you hear great things about this stock.

Must read on oil

If you only read one article about the oil industry this year, the report linked right here has to be it. Utterly, totally, completely and absolutely unmissable. Not only is it intelligent and über-insightful, but it's a highly entertaining read, too.

Alan von Altendorf is a smart guy when it comes to the oil industry. He runs an independent oil consultancy out of Houston called CWSX and knows his patch. Several moons ago, I got lucky and hooked up with AvA while covering the subject of Petrobras (PBR). At the time of the mega pre-salt hype PBR was plainly getting way expensive and I said so. When the idiot sheep screamed their denials, AvA stepped up with solid science and arguments that agreed with the overbought call. He was proved very very right.

Anyway, to the point. He's written a new, free access paper that blows the lid off the new SEC rules and eviscerates the oil industry, version 2009. I cannot praise this paper highly enough and have already learned a whole bucketload about the scams going on in the oil biz during my first couple of scans at the piece. I'll be sitting back and absorbing every word later. You should too.

Here's the intro section to AvA's note. Here's the link again, so go get your own copy.


This is a long article on the subject of oil & gas reserves and due diligence.

My purpose is to alert you to revision of SEC Regulation S-K and Regulation S-X effective January 1, 2010. Concealed in a handful of benign new regs is a financial truck bomb that's going to blow away "proved reserves" as a meaningful metric of oil company assets.

Old definition: Proved Reserves are those quantities which can be estimated with reasonable certainty to be commercially recoverable from known reservoirs under defined economic conditions. Proved quantities arelimited by the lowest known hydrocarbon as seen in a well penetration unless otherwise indicated by definitive geoscience, engineering, or performance data. Seismic data alone is not sufficient to define fluid contacts. Undeveloped locations may be classified as Proved in undrilled areas of a reservoir that can be judged with reasonable certainty to be commercially productive.

New definition: Industry is no longer constrained by the criterion of certainty. An operator can book incremental proved reserves from planned enhanced recovery projects (gas injection, acid fracturing) based on a pilot project. Coal seam gas, bitumen, oil shale and other unconventional resources can be booked as Proved Reserves. Estimated reservoir properties in the aggregate is a departure from the old rules. The new SEC definition does not require that an analogous reservoir has to be in the immediate area or in pressure communication. Seismic analysis and reservoir models are sufficient to book Proved Reserves.

Hold on to your shorts, it gets worse.

Under the new SEC rules you don't have to drill a well and actually produce oil. An operator can establish levels of lowest known hydrocarbons and highest known oil through "reliable technology" other than well penetrations. It doesn't have to be 90% reliable or widely accepted by industry peers... [more]

x

Burning bridges

ka-boom?

Well...dynamiting them, actually.

Another taste of bizarre today as the hypocrisy of US foreign policy towards Venezuela shows up once again. Several newswires are running the story about how Venezuelan troops blew up two pedestrian bridges that connect Venezuela with LittleUSA (a.k.a. Colombia) in the Norte de Santander region this week. Anyone who knows anything about that spot on the planet knows that those bridges are used for two main purposes:
  • carrying cheap fuel from Venezuela to Colombia illegally
  • carrying cocaine from Colombia to Venezuela (need I mention that's illegal?)

But sure enough, LittleUSA is going to make a protest about the fact that Venezuela wants to protect its borders from Colombia's main source of dollars. Apparently, fucking up your neighbours via a long term and very large cocaine habit is socially acceptable while watching them protect themselves from you is aggressive behaviour.

This comes on the same day that The USA declares it wants to see Venezuela make more effort against drug runners. The arrogantly entitled 'Voice of America' (hint, 'America' is not a country, it's a double continent) starts off its report thusly:
U.S. anti-drug officials are calling for greater efforts by Venezuela to combat drug traffickers who are using the country to make illegal shipments.
So Venezuela has to make more effort to combat druggies, but when it does there's hell to pay. Go figure.

Chart of the day is....

....oil January futures, daily candle.

I look at this chart, I see this pattern, then that pattern, then another pattern. It's all so very interesting but I didn't bother drawing in any of those lines that Tekkies so love because it's ultimately useless. Oil price is a function of the US dollar and there's no point putting the cart before the horse. However the main reflaction I got from this chart this morning was to remember all the inflation headline scares that surrounded crude oil back in the good ol' days...you remember 2007 and 2008 too? So why isn't U$80/bbl oil scaring us all this time? Have a think about it and see what you come up with.

OT: I note the combo of words 'Palin', 'Fox' and 'Misleading' in many news service headlines this morning. That makes a change.

11/19/09

Would you like fries with that, sir?

So, it seems this band of Peruvians have been murdering people, extracting the fat from the bodies and then selling it for U$15,000 per litre. A direct translation from this news story in El Comercio today. And no, this is not a hoax. Enjoy.

Traffickers killed and sold human fat for U$15,000 per litre

Member of the band known as 'Los Pishtacos' confessed their crimes. They are attributed with the deaths of 60 rural dwelling people in Huánuco and Pasco.


Hilario Cudeña Simón, Segundo Castillejos Agüero, Marcos Veramendi Príncipe and Enadina Estela Claudio were arrested on Monday for the crime of homicide for payment and illegal association to commit crimes against the state.

The chief of the Dirincri police force, Eusebio Félix Murga , confirmed that the suspects lured their victims to quiet spots by deception where they decapitated them and then took them to laboratories to extract human fat from the dead bodies. Sometimes they even put together their own rudimentary labs.

"The fat was taken from the thoraxes and muscles" said Félix Murga.

The members of the group known as 'Los Pishtacos' are understood to have murdered 60 rural dwellers in Huánuco and Pasco and then sold their fat for a price of U$15,000 per litre to Europe.

"From the quantity of fat that has been sold, we can deduce there are many victims. The investigations continue because many people do not report the disappearances of family members."

According to police, the suspects admit to carrying out their crimes for around 30 years.

UPDATE: Better late than never, the English language newswires have decided to love this story, too. Here's Reuters, here's AP and here's AFP.

Important Twobreakfasts News

All the pies! Gone!

Thank you to reader Paul E in the comments section here for the headsup on some pop kulture. Conan O'Brien dude is jumping on the Twobreakfasts bandwagon. Apparently he's been laying into Kirstie Alley for being a porker and Kirstie kicked back. So according to this:

O'Brien acknowledged that he regularly mocks the actress for her weight issues and showed clips of several jokes to prove it. He got one final insult in ("My penis is not on the Weight Watchers diet--I looked it up. She can have a shake, one slice of wheat bread and then a sensible penis.") before promising to lay off her. Instead he says he'll use Alan Garcia Perez, the heavyset president of Peru, as a punchline for any fat jokes.

Message to ConanDude: Permission granted to use the nick 'Twobreakfasts' without any reference necessary. Knock yerself out, skinnyguy.

Pisco sours and pies served. The end.

Trading Post (mining friendly edition)


Randall Oliphant was hilarious on BNN today with his argument that NGD works in mining friendly jurisdictions and whatever would make us mere mortals think otherwise. While we're on the subject, Otto reminds his fellow mere mortals the official reason Barrick gave when Oliphant was ousted as Pres and CEO of ABX back in 2003:
"The board made the change to address its concerns over the company's recent performance and to restore Barrick to the leadership position in the gold industry it has consistently maintained throughout much its existence"

No further comment necessary.



New Gold (NGD) (NGD.to) down 16.3% at U$3.64. We'll have more coverage on the story in IKN30.

Fortuna Silver (FVI.v) down 1.4% at $2.08 and off its lows of the day by a way. FVI holding up nicely here.

Endeavour Silver (EDR.to) down a penny at $3.84 and also off its lows. EDR has had a killer November and is already up 95c since the end of October on great volumes. Instos seem to have chosen this one as the way into small silvers.....good for EDR. I've always liked the stock but always preferred FVI, but that's just me. Certainly little or nothing to dislike here and a good, solid longer term business plan, too. A serious junior.

Riverside Resources (RRI.v) down 10.5% at $0.51 and suffering the low volumes syndrome once again. I was chatting with a smart stockmarket pal this morning on this one; we're both convinced this stock is on to a winner at Sugarloaf Peak. DYODD, dude.

Radius Gold (RDU.v) down 8.3% and also a victim of lack of volume. So be it. Not a trading vehicle anyway....it's here for the value merchants amongst us.

Nadagold (NG) down 3.5% at U$5.17. On the other hand, Nadagold is here just to laugh at.

New Gold (NGD) suspends operations in Mexico

Goodbye. Oh monsieur Lassonde, you didn't do your DD, did you? Tut tut tut.......

Here's the Press Release, and here's how it starts:

VANCOUVER, Nov. 19 /PRNewswire-FirstCall/ - New Gold Inc. ("New Gold") (TSX and NYSE AMEX-NGD) is cooperating with Mexican government authorities and pursuing all legal appeals after the company was notified yesterday that it must suspend mining operations at its Cerro San Pedro Mine, known regionally as Minera San Xavier ("MSX"). Although mining has been suspended, gold recovery operations of existing inventory on the leach pads are continuing.

Following a ruling by the Federal Court of Fiscal and Administrative Justice, SEMARNAT, the Mexican government's environmental protection agency nullified the mine's Environmental Impact Statement ("EIS") which was issued in 2006. PROFEPA, the Mexican environmental enforcement agency, issued the order requiring MSX to suspend mining as a consequence of the nullification of the EIS.

MSX has appealed the decision of the Federal Court of Fiscal and Administrative Justice and intends to pursue all legal avenues with respect to the recent actions of both SEMARNAT and PROFEPA. New Gold is seeking immediate remedies. MSX has also filed a new EIS with SEMARNAT.

"This is a continuation of a decade of challenges from a group of individuals largely from outside the area who are opposed to the mining operations at Cerro San Pedro. We are taking all possible steps to respond to challenges to our legal ability to operate the mine, and believe that we will resume full operations" says yada yada continues here


Good to see that Mexico has finally grown a pair....that's the only bit that surprised me, but as I wrote in IKN29 last weekend...
The IKN Weekly does not have the same agenda as the IKN blog and does not try and pass judgement on these things. It is up to the individual investor to decide whether NGD suits his or her portfolio, but in this case I’ll venture to say that I would not be a shareholder in New Gold for the forseeable future. That’s just me. Enough said.

Peru: Viva investment grade (part 14,279)

This chart (English trans Otto)........


....... comes from this report on Caretas today that shows up close and personal, once again, that Twobreakfast's obsession with GDP and his KY Jelly attitude to foreign direct investment have not helped Peruvians in the slightest. Note that between 2006 and 2008 and according to the official figures (i.e. this is not a case of making shit up):

  • an extra three percent of Peruvians don't reach the minimum daily calorie intake. Put in simple terms, that's ANOTHER 700,000 people who don't get enough to eat. Note to those who have been to Peru for their three week aventure vacation and now consider themselves experts on the country; you are unlikely to have met these people on the Inca Trail or in that cozy four star hotel where you stayed.
  • by World Health Organization standards (not the BS stats of the Twobreakfasts gov't), chronic malnutrition still affects 27% of the population of Peru
  • illiteracy levels are still at 10% of the adult population
  • more people have no access to running water in their homes than in 2006
  • home phones are a luxury

And the biggest takeaway from all this is that this was the supposed "boom period" in Peru, with GDP growth rates over 9%! What are these figures going to look like after our present crisis year is over? Are you beginning to understand why Twobreakfasts is such an unpopular president in Peru yet, or do you need "I am a moron" tattooed on your forehead?

Viva Investment Grade. Viva, viva, viva.



PS: for those that don't suffer under a Castilian challenge, here's the original table


Petaquilla Minerals (PTQ.to): IKN Weekly subscribers knew

A lot of talk about Petaquilla Minerals (PTQ.to) yesterday on the release of this NR that saw the stock more than double. As regulars round here know, PTQ.to is LatAm's worst mining company and is headed up by a convicted drug trafficker and all-round nasty piece of work....but business is business. Here's an excerpt from The IKN Weekly, issue 27 dated November 1st 2009.

FYI, there were two charts that went along with the analysis that you may or may not be able to see on this paste-up, but they are simple price charts dated YTD to October 30th and the weekly 5min chart for that same week ending Oct 30th...nothing out of the ordinary.

This week's IKN30 will take a closer look at the company and I'm telling you right now that the fat lady ain't singing on this one yet and anyone thinking it's a slam dunk from here may be in for a very nasty surprise.

Anyway, here's the Nov 1st piece that marked subscribers' cards:


Panama: New life for the Petaquilla trainwreck?

Sometimes news falls into either the Politics or Markets categories and the choice of where to put it is not black or white. Here’s an example. It’s also an example of when I feel obliged to put personal opinions to one side and to point out a trading opportunity to the subscriber base.

Petaquilla Minerals (PTQ.to) is a stock that has been given a lot of coverage on the IKN blog and not one word of it has ever been positive. However, this trainwreck of a company may have just been given a lease of life by the new Martinelli government. In a report on Thursday (2) (3) the government is supposed to be holding informal talks with PTQ that will allow the company to move into production in exchange for a higher tax/royalty deal with the state that will then allow the government to aid those in and around the area. According to the reports, the current 2% royalty payments would double to 4%, taxes would be paid after year three (instead of “when debt is paid” as currently stipulated, the financial equivalent of “how long is a piece of string”) and that $300,000 per annum is paid for environmental damages (past, present and future) along with a one-time $1m social fund payemnt for those living around the mine.

It should be stressed that these talks are both preliminary and non-binding. It should also be stressed that PTQ has an abysmal record in social and environmental issues and should not be trusted any further than its rotund CEO, Richard Fifer (a convicted drugs felon himself) can be thrown. I personally wouldn’t go near this stock with my money if it were the last choice left on the TSX, but there is clearly renewed interest in the stock as these two charts show. The longer timescale shows the decline and fall of PTQ....

.....while Thursday’s news was greeted with an upsurge in the price and traded volume.

From 22c to 27c in two days. Yep, that’s a move, with 811,000 share volume Friday, too.

Add this to reports that Inmet is beginning to move on studies for its ‘Panama Copper’ project (sold to Inmet by PTQ and situated close to the gold project) (4) and it begins to look like Panama’s new government is giving tacit approval to mining in the area (or at the very least giving the industry a green light to present its case).

PTQ’s balance sheets are still a total mess, with negative working capital and debt payments soon due that would sink the company if it doesn’t get new funds. However Fifer himself is stinking rich after selling the Petaquilla Copper project to Inmet and would be able to find enough cash to help himself and his company (and maybe other shareholders, though that is always less likely with this mob). Even with this positive news, PTQ is a high risk proposition. Those looking for “moral” trades should also avoid, in the opinion of this author at least. But there are big possible gains in the short-term in this stock thanks to last week’s news, that is something that should be recognized.



ECU Silver (ECU.to): The no brain short (that takes money off those with no brains)

Charts like this....

....are all good fun, but the real reasons why this company is stupidly overpriced are right here. I'm short cos it's so damned obvious to be short.

Charts of the day are.......

.....the US dollar index (USD), daily candle and 60 minute candle, because the greenback is still the whole ballgame right now.

Here's the daily candle (and my call from last week of "wake me up when it breaks 77" is still valid):
Here's the 60 minute candle. Those that adore the micromanaging side of the markets will see this current 75.5 / 75.6 or so as important. Personally I don't give a culo de la rata.

On the subject, a recommended post over at Trend & Value today, where Lucas considers gold in relation to other world currencies.

11/18/09

Two Venezuelans in Paraguay.....apparently.....

A strange story out of Paraguay this week. Apparently, on November 12th a Venezuela armed forces C-130 Hercules took off from Ezeiza airport, Argentina.

The plane landed in Asuncion Paraguay, taxied into a hangar then after refuelling took off an hour later. According to reports, this mysterious plane had 14 people on board and left behind two of its crew members in Asuncion without them having to register through immigrations or anything else of the sort. On arrival in Caracas, Venezuela there were undoubtedly 12 people on board (here's an EngLang note from El Universal that gives the basic story).

When the press kicked up a fuss, the Paraguyan commander of the armed forces released this statement....
click to enlarge

...saying that there were only 12 people ever on board in the first place. The thing is, ABC Color clearly trusted its sources and smelled a rat. So the journos there did some more digging and sure enough found the flight record for the plane as noted by Argentina....
(click to enlarge)

...and sure enough, according those flight records there were 14 military personnel on board when the plane left Argentina. In the words of ABC Color:
"...the names of Rafael Polo and José Gélvez appear on the list that left Buenos Aires, but not in the list that went to Caracas."

So what were two Venezuelan military guys doing hitching a lift from their pals in Argentina and then getting off in Paraguay without going through any sort of immigration procedure? Inquiring minds and all that............

JP Morgan, internet scammers

Felix Salmon has just done a great job of shining some light on the world of internet scams and finds JP Morgan at the bottom of it all.

Surprised? Nah, me neither. Here's the link to his post, today's essential reading.

B2Gold (BTO.to), and what goes on over at the subscription service

BlatantMarketing Alert. On Thursday November 5th, a Flash update was sent to subscribers that wrote this about BTO.to:

B2Gold (BTO.to)
I was going to wait until IKN28 to talk on this stock, but the price action yesterday (and its volumes) were very strong once it released its "corp update" type news release (which is worth a read; here's the link).

Therefore a quick headsup. B2Gold is the subject of our NOBS report this week and is almost certain to be rated either "buy" or "spec buy" (Chez Otto the numbers are basically done on the stock but the DD is still happening). The NOBS report will (as always) be based upon the Friday close of the stock, but consider this an advanced notice about the company. I do not own as yet and will wait until at least Wednesday next week to buy in personally.

Best, O
Then on Sunday November 8th, the NOBS report in IKN28 appeared. We went over the stock, its structure, its assets and its prospects. The result was that buy call and it was added to the 'Stocks to Follow' list (we're currently at our maximum of 15 open positions, by the way). Then as previewed, I waited my self imposed 48 hours before taking my first personal long position in the stock.

Here's the chart for BTO.to, including the last two days' action:


DYODD, dude.

Wow! An Exeter Resources (XRC.to) investment opportunity actually worth considering

I've had my issues about Exeter Resources (XRC.to) for a while (documented over the months on the blog), mainly because although the Cerro Moro project in southern Argentina has all the making of a good looking asset and eventually gold mine, the company continues to BS the world about the Caspiche dog thingy up in the frozen wastes of high Chile.

But news today is encouraging. Apparently XRC is mulling over the idea of spinning out Cerro Moro. If they do I'm a possible buyer, cos I've never been able to get over the idea of buying into that project and the large white elephant as well....but gimme a shot at Cerro Moro on its own and I'm listening to you, Yale.

Sandspring Resources (SSP.v): Touching nerves


I've had all types of feedback from this post on Sandspring Resources (SSP-H.v) (SSP.v) dated November 10th that went behind the slick show being put forward to the investment community and looked at some of the issues faced by the company and its property. That feedback includes this comment left under the post by a person who claims to be John Adams, soon-to-be lead director at the company.

Since you seem intent on trashing this property, let me give you some more information so you can do a complete job. After the qualifying transaction is completed, the lead director and majority owner will be John R Adams. Mr. Adams has over 30 years experience in the mining business. He owned developed and operated the largest coal mine in Colorado, Energy Fuels Corp)(4 million tons a year) His family created and he managed the largest uranium producer in the US throughout the 1980's and early 90's(Energy Fuels Nuclear Inc.5 million lbs a year) He has owned and developed the Guyana property for over ten years and has invested $15 million of his own money, building a 140 mile road and drilling out over 3 million ounces of gold equivalent. Sounds like a real "pump and dump kind of guy to me!! Thanks for the great press.
John R Adams

Although it's not possible to confirm if Adam is the actual author of the comment, (update: confirmed) the words do have an air of knowing what they're talking about (and it's signed Adams, of course) so let's assume it was Adams until proven otherwise. Therefore while this humble corner of cyberspace has your attention, Mr. Adams, I have a comment and a question:
  • Comment: I actually said SSP might be a buy when it opens for trading. It's just that we don't treat people here like dentists and give them a lot more information (that you seem not to have refuted) so they can make up their own minds.
  • Question: If, as you claim, this isn't a pump and dump operation, why have you chosen Thom Calandra to promote it to the investment community? I mean, this is a person who was banned by the SEC from the stock market because of illegal trading activities that included his fave M.O. the classic pump and dump! He'd buy stock quietly, pump it to his retail sheep and then sell while they were buying. What is he doing pumping your stock to the investment community, just five years after paying a $540,000 fine for this kind of unethical and illegal activity? Put basically, you hire a proven pump'n'dumper and then claim it's not a pump'n'dump. Why?


But like I say, there's been plenty of feedback on that piece, not just Adams' dos centavitos. For example, here is a mail extract from a reader who is also a very experienced industry professional (very slightly edited to protect identities)
Had heard of it ........ about 6 months ago ......... Indeed 3 M ozs of 0.93 g/t, in the middle of the jungle with no access and infrastructure does NOT work. Period, end of story. Needs to own to 7 or 8 and even then, you’d better have cheap power/fuel or its game over.

I can't reveal who the author of that is, but can say he's an industry executive and a lifelong (and very qualified) miner himself. The kind of person one takes seriously.....not like the paid shill Thom Calandra. DYODD, dude.

The Honduras Embassy in the USA wants to make a point

This is my translation of the original Spanish language poster below, taken from the Honduras Embassy in USA website. HT to Honduras Oye.

English translation


Spanish original.

Say NO to farcical elections. Boycott November 29. Refuse to recognize this affront to democracy.

Chart of the day is....

....gold, daily candle.
It was either Au or Cu, both impressive. Gold won out.


I learned not to try and stand in front of this steamroller weeks ago. Still highly sceptical, but not fighting it has paid off nicely.

11/17/09

Zero Currency 7


Nov 17th

c

New Gold (NGD): Business as usual in Mexico

The normal high standard of reporting by Al Jazeera is found in this report that comes along with this video....



....about the controversial Cerro San Pedro mine operated by New Gold (NGD). Al Jaz gets all sides of the argument onto tape in three minutes (bar the company's, who refused to be interviewed) as it talks to locals for and against the mine which, as the report points out, is operating illegally according to Mexican law.

Here's the link to the report. My thanks to reader 'TS' for the headsup on this, as giving all sides of a story is the way to do these things. Kudos AlJaz

Trading Post (chinese food plus lemonade equals gringo edition)



Fortuna Silver (FVI.v) up 8.1% at $2.14 and having another good day on strong volumes. Yes you know it's true.

Radius Gold (RDU.v) up 2.1% at $0.24 but maybe threatening to pop higher soon. I was sent this chart.....
...by a smart marketwatcher friend along with the following comment (with which i agree, esp the need for volume):
"Hi Otto, seems like that we could see the next upmove with Radius Gold. Chart looks good. We need some more buyers."

Riverside Resources (RRI.v) up 5.8% at $0.55 on slimmish vols. Riverside dropped under 50c for no apparent reason last week and has rebounded so far this week. Now's the time to accumulate before the sexy news flows in December. Official headsup (and yes I own some, so DYODD).

Search of the day

This one just arrived from the Internation Atomic Energy Centre in Austria may be a harbinger of the next round of propaganda bullshit to be unleashed by the Free World™ on Evo.
  • Search engine: Google
  • keywords: bolivia uranium min* yellowcake or u308

Oh...hoodathunkit...18 days and counting to a Presidential Election in Bolivia, too....

Domain Name
iaea.org ? (Organization)
IP Address
161.5.131.# (International Atomic Energy Centre (IAEA))
ISP
International Atomic Energy Centre (IAEA)
Location
Continent : Europe
Country : Austria (Facts)
State/Region : Wien
City : Vienna
Lat/Long : 48.2, 16.3667 (Map)
Distance : 6,789 miles
Language
English (U.K.)
en-gb
Operating System
Microsoft WinXP
Browser
Internet Explorer 6.0
Mozilla/4.0 (compatible; MSIE 6.0; Windows NT 5.1; SV1; GTB6; .NET CLR 1.1.4322; .NET CLR 3.0.04506.30; InfoPath.1; .NET CLR 2.0.50727; .NET CLR 3.0.4506.2152; .NET CLR 3.5.30729)
Javascript
version 1.3
Monitor
Resolution : 1024 x 768
Color Depth : 16 bits
Time of Visit
Nov 17 2009 9:26:13 am
Last Page View
Nov 17 2009 9:26:13 am
Visit Length
0 seconds
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1
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http://www.google.co...R u308&start=50&sa=N
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google.co.uk
Search Words
bolivia uranium min* yellowcake or u308
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Fact: Bolivia has no uranium production.

Tim's El Salvador Blog turns five years old today


Here's the link. Why not go over and leave a message? TESB is what great blogging is all about and we should all be grateful for this ongoing window into his subject.

Ah yeah....those foreign relations, right?


Just to mark your card about the end of the honeymoon period down this neck of the woods. The Hawaiian stabs Zelaya in the back, The Hawaiian signs his troops into Colombia and it's not only your humble correspondent that has had the scales falling from his eyes. People that actaully matter have twigged on, too. People that really matter.

Brazilian Foreign Minister Celso Amorim last weekend warned that relations between the United States and South America are deteriorating and called on U.S. President Barack Obama to begin a dialogue with Venezuelan President Hugo Chavez.

“It’s possible that by the time President Obama concentrates on the region’s problems, relations between United States and South America will have deteriorated even further,” said Amorim in a Sunday interview with Folha de Sao Paulo (CONTINUES HERE)

Meanwhile, the true scope of the recent agreement between Colombia and the USA to establish a ten year do-what-you-want-boys beachhead in South America (and right next to the country with the world's biggest reserves of oil.....what a coincidence) is starting to come to light. COHA published this note yesterday that pointed to out the following:

Though details were not released to the public prior to the signing of the agreement, official statements from both governments have continuously affirmed that the leased facilities would be exclusively used to support counternarcotic and counterinsurgency initiatives within Colombia. However, a recently publicized U.S. Air Force document presents a far more ominous explanation for massive congressional funding for the forthcoming military construction at the Colombian bases. It emphasizes the “opportunity for conducting full spectrum operations throughout South America” against threats not only from drug trafficking and guerrilla movements, but also from “anti-U.S. governments” in the region.
CONTINUES HERE

Dear Gringos: After the abysmal record of your paymasters' interventions and direct involvement in human rights atrocities stretching back over decades in Latin America, do you honestly think we down here are stupid enough to give you the luxury of innocence until proven guilty?

Constitution Mining (CMIN.ob) third quarter results


This post is for anyone stupid enough to invest in OTC exploration stage mining companies without ever reading the regulatory filings. Our subject is the outright scam known as Constitution mining (CMIN.ob) and the event is the 10-Q financial report for 3q09 filed by the company last night.
  • First, the cash position at the company is $1.15m but working capital was negative at $-0.387m, due to its debt position.
  • Second, according to the company here's what it needs to run its exploration campaign in Peru in the next 12 months:

Activity U$000s
MINERAL PROPERTY COSTS:

Surface Rights Access
150
EXPLORATION

Mapping
230
Geophysics – Seismic
400
DRILLING

Reconnaissance
1500
Resource Definition
2000
GEOTECHNICAL

Pits & Shafts
200
TECHNICAL SERVICES

Consultants
580
Personnel
430
CAMP AND FIELD EXPENSES

Camp
630
Field
250
TRANSPORT AND LOGISTICS

Air Transport
480
Water Transport
120
Ground Transport
150
EQUIPMENT & PERMITTING
210
COMMUNITY OUTREACH
300
ADMINISTRATION
150
TOTAL
7,78


Yes, that says U$7.78m


  • Next, what the company plans to squander in G&A over the next 12 months:

Two Point Four Million Dollars

  • Next, what the company needs to pay the title holders of the gold sands property, the equally scammy Temasek of Panama, on March 31st to get the third 25% of the property:
Three Million Dollars

Add 'em all up, and this is a company that has no money but needs $13.18m to go about its business. And as the following excerpt from the 10-Q makes very clear, the company is going to dilute your ass to try and get the cash. If you haven't sold yet, get the hell out of this scam.


At September 30, 2009, we had cash and cash equivalents of $1,153,669 (December 31, 2008 - $66,580) and a working capital deficit of $386,590 (December 31, 2008 - $162,440).

During the twelve month period following the date of this report, we anticipate that we will not generate any revenue. Our proposed plan of exploration anticipates that we will incur exploration related expenditures of $7,780,000 over the next twelve months. We anticipate spending approximately $200,000 in ongoing general and administrative expenses per month for the next twelve months, for a total anticipated general and administrative expenditures of $2,400,000 over the next twelve months. The general and administrative expenses for the year will consist primarily of professional fees for the audit and legal work relating to our regulatory filings throughout the year, investor relations related expenditures, as well as transfer agent fees and general office expenses. Our current cash on hand is insufficient to be able to make our planned exploration expenditures and to pay for our general administrative expenses over the next twelve months. Accordingly, we must obtain additional financing in order to continue our plan of operations during and beyond the next twelve months. We believe that debt financing will not be an alternative for funding additional phases of exploration as we do not have limited tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. We are currently seeking additional funding in the form of equity financing from the sale of our common stock, but cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our complete exploration program. In the absence of such financing, we will not be able to pursue our exploration program and maintain our mineral property interests in good standing. If we do not fulfill the terms of any of these option agreements according to our business plan, then our ability to commence or continue operations could be materially limited. We also may be forced to abandon our mineral property interests and cease operations.

Chart of the day is....

...Peru's monthly GDP, 2008 to date.

Yesterday the INEI released its latest round of heavily massaged bullshit, yet again insisting that "oh nooo..no recession here....ohhhhhhh no no no no no...whatever makes you think that?" and a 0.04% (!!!) GDP growth for September. A joke for sure, but the time of taking these people serious has long passed already, so it just got a roll of the eyes Chez Otto.

Meanwhile in the real world, Chile noted a 24% rise in export revenues for copper last month. This is the signal that will get GDPs in both Chile and Peru into the believable plus side for the three months that remain in the year.

11/16/09

December 1st will be a good day for South America....

José and Alex: you go boys

.....because the continent's first ever homosexual marriage will take place.

The couple, José María De Bello and Alex Freyre, got their appointment confirmed at a registry office in Buenos Aires, Argentina today. They chose December 1st (with a little help from the authorities in question) for the following reason (let's allow José Maria explain):
"We're happy because we now have a set date to marry on World HIV-AIDS day, a date that is part of our militancy against discrimination that not only attacks sexual diversity but also those who have HIV/AIDS."

The couple got the chance to marry when last week the Argentine courtrooms overturned the (until then) existing laws banning homosexual marriages as inconstitutional (and Buenos Aires City Mayor Macri didn't appeal the decision, thank the stars), so mark Tuesday December 1st 2009 as a date when LatAm takes another solid step towards social maturity.

Trading Post (pum! edition)


Fortuna Silver (FVI.v) up 11.4% at $1.95.....oh, so NOW you think it's cheap do you? Love you all latecomerz, but fear not; FVI has plenty of upside left to come.

Cr__tallex (K_Y) up loads at $0.44. But really, who in their right mind gives a shit?

Troy Resources (TRY.to) up 4.1% at $2.56 and refuses to lie down, even under the present rights issue. I get to buy one share at A$2 for every six I own, which is my idea of an early Xmas present. DYODD, dude.

The NewCrystallex (EC.v) down 4.6% at $0.83 and when the penny starts to drop that this crooked dog isn't getting its drill permits anytime soon, the downside will just get steeper.

Salazar (SRL.v) UNCH at $1.00. This stock was featured in IKN29 yesterday, with pros and cons considered and a personal viewpoint. We do like Fredy, though.

New Gold (NGD) up $2.7% at U$4.26. Not unexpected.

Canplats (CPQ.v) up 37.3% at $3.50 and today's big winner. It gets to sell its main show to GG and spin out the exploration sites into a 90% owned new entity ready financed with $10m in the pot. Brent Cook's subscribers have likely paid their subscriptions fees for the next 10 years on his reco...well nailed, sir.

Subscribers

A flash update has just been sent with a brand new buy recommendation. Check your mailboxes.

Mike Kozak of Cormark, numerical dumbass

One of the main qualifications of an equities analyst is being able know your ass from your elbow when it comes to numbers and stuff. Unfortunately Mike Kozak, analyst at Cormark, fails on this score in a rather epic manner.

Last Friday, Kozak published an analysis on Dynasty Metals (DMM.to) that was so full of elementary mistakes it was laughable. Here's a little chart that has just a few of them (not kidding, just a few of them):

Dynasty Metals & crap analyses, Cormark Edition
Mike Kozak vs Bleedin' Reality, November 13th 2009
Kozak Reality Cormark result
52wk high $11.18 $6.20 EpicFail
52wk low $3.53 $1.09 EpicFail
Shares out 36.4m 37.64m EpicFail
cash at bank $18.8m $10.75m* EpicFail
mkt cap $205.4m $212.7m EpicFail
source: Cormark report and bleedin' reality, mate
* approx, but way way closer than Kozak, I promise

Add to this things like assuming Ecuador's corp tax rate is 30% (it's 25%), overestimating insider holdings at DMM by what looks like a million shares, getting the gold resource number wrong by nearly half a million ounces....there's a whole bunch of other stuff. Maybe funniest of the lot was that, after getting so many asset parameters way way bad he decided to value DMM.to using a Net Asset Value calculation!

It's super-early to give out this week's coveted award, but surely nobody can beat this one. Therefore, Mike Kozak of Cormark, you win this week's coveted award. Your report on Dynasty Metals was the worst piece of rushed and sloppy analysis we've seen this year. Enjoy, dumbass: