The Friday OT: R.E.M.; Drive

Fits the mood of this week:

This 2003 live recording caught Stipe in that blue makeup period of his. It also catches him with a rasping voice which sounds like he'd recently had the flu or something. It works well with this, one of the darker songs in the REM repertoire. The band was on top form that night.

Dedicated to DS in Savannah. You know why, dudette.

Ventana Gold (VEN.to), reader feedback and the difference between what goes on here at the blog and what goes on in The IKN Weekly

This morning I received one of the nicest mails ever from a long-time reader and subscriber to The IKN Weekly. The dude in question has been a fan of and investor in Ventana Gold (VEN.to) for a long time and we've swapped ideas on the stock on more than one occasion, but today he told me something I hadn't known. When the Ventana property problems hit back in November, your author ran an analysis of the situation in IKN31 and offered some practical advice. It turns out that 'Subscriber X' (as we'll call him) took that advice and, without ever mentioning it, sold the majority of his VEN stock. He then went about repurchasing at much lower prices earlier in 2010 and has made a big difference to an already winning position. I've been given permission to excerpt from his mail (and excuse the missing bits, but there's some sensitive information edited out by necessity):

"....a key factor in my Ventana trade was your analysis in that edition (ottonote: IKN31). General market consensus at the time was resolution would occur in days or weeks. You saw it differently, presented a solid case and I ran with that call. I sold .......... and then bought back (a couple of months later).........when prices were at lows. The insight you offered (in IKN31) made me a lot of money. Can I pay in advance for the next ten years?!".

(answer: no you can't :-). As I say, that sell-buy move by Subscriber X was unknown to me until today. The dude (and believe me, he really is a 'dude') deserves full credit on the deal too, as it was all off his own bat. As for the advice proferred in IKN31, here how the discussion in the issue concluded, as it fairly sums up the position taken at that time:

"If I had to guess, I’d say that the most likely outcome is an equitable settlement that takes months. Not weeks and not years, but maybe 6 to 12 months. But that’s just my wild guesstimate and I’d need a lot more on-the-ground information before making anything more than a simple finger-in-the-air guess. But I will say that VEN will have to cut a deal with the locals at some point or other. Not much doubt about that one.

........

"By way of disclosure, I am not long or short VEN and intend to stay that way. With that said, my best guess is that the stock has further to drop before we get resolution on this matter. DYODD."

In the end, the deal didn't quite take six months, as start-to-finish of the problem turned out to be 5 1/2 months. But hey, the IKN analysis (based on facts and opinion extensively explained in that issue) was much closer than the talking heads back in November and December who were assuring the market that it would take just a couple of weeks to resolve, that any price under $10 should be snapped up and only a fool would sell this news. We were also right about a deal being cut and that the arbitration moves wouldn't amount to much and wouldn't bring about a final result (yet again, against the grain of popular opinion at the time).

The greatest thing about Subscriber X's long mail, the thing that gives me the greatest pleasure about it, was that he was smart enough to take the information offered up by The IKN Weekly and use it in his own way. In other words, a shining example of the best type of subscriber possible. Readers and subscribers know that this humble scribe has no direct exposure to Colombian junior mining through personal choice, but that doesn't stop us from analyzing the country and its development in an ongoing and level-headed way over at The IKN Weekly. This is one of the main differences between the ranty blog and the more measured tone of the Weekly (something that subbers tell me should change on the blog, but i don't care so much). The IKN Weekly doesn't treat people like sheep, telling them what they should or shouldn't do at any given moment; we try our best to offer up the facts before personal opinion and allow people to use the insight to form their own opinions.

GringoMask: The best protest against Arizona's racism so far

hat tip to The Mex Files

The new overtly racist laws passed recently in Arizona need no link here as they've had enough coverage already (and anyone not aware of the new laws and reading these words might want to question why they're reading a blog on LatAm affairs in the first place). We've had "Los Suns" as a protest and we've had people and groups withdrawing (or at least threatening to withdraw) economic support from Arizona, but really the laws are so freakin' bigoted and ridiculous that the best method of protest is ridicule itself.

Step forward GRINGO MASK DOT COM, a great initiative that pours scorn on Arizona in its own special way. You just gotta go over and see for yourself, but to swipe the blurb from the site:

(click image for sharper view)

IKN gives a standing ovation to Gringo Mask. Go over and show your support, people.

The dollar, the pound, the US market (LatAm is boring this morning)

I'm glad Gary BiiWii turned his attention to the USD this morning and posted this chart.....

click to enlarge

.....on his public blog, cos it means I can swipe it, put it up here, link to him and get a better class of chart on the subject here with little sweat. The other forex matter that has torn me away from LatAm this morning is the state of the British Pound (GBP) in the wake of the UK General Election, the hung parliament and the serious, highest-level-possible horse trading that's going on right now.

That downspike to under 1.45/1 happened when Gordon Brown reached out to the now kingmaker Nick Clegg and offered him "far reaching reforms" (i.e. proportional representation is now on the table) if he'd come play alliances and let him keep his job. Meanwhile the Conservatives are pretty close themselves and might even manage to form a minority government. What the market wants, more than one-or-the-other-side winning out, is a quick resolution to the horse trading. That might be more complicated than it sounds and hence the drop in the GBP. Certainly the funnest currency to play in the next few days.

Add in the FunkyMonk rollercoaster ride at the NYSE and it's one helluva day to be tuned into the markets....especially when you never work on margin :-)

The Uribe English Dictionary

James Petras is a LatAm commentator with whom I agree and disgree in turns, but this time he's hit the nail on the head in an article on Colombia that's smart as a whip. Part of the text is devoted to definitions of words and phrases according to the government of Álvaro Uribe. Here are just a few as tasters:

• Terrorist: "This is a person or persons who fail to understand that the road to peace is through billions spent on warplanes, helicopter gun ships, military bases and subcontracting military advisers and mercenaries."

• Enemies of peace talks: "...those human rights groups who oppose killing adversaries and who propose dialogues instead of monologues are the enemies of peace."

• Prosperity: "...poverty, unemployment and low wages are the price of democracy and prosperity … but only the workers and peasants pay the price and only the rich prosper."

• Sovereignty: "....ceding territory to a foreign imperial power to build seven military bases operating with their own laws and jurisdiction is the new definition of sovereignty."
  

• Subversion: ".... humanitarian accords and initiatives for peace are pretexts for subversion; their advocates know in advance they will be rejected by the State. Instead, dehumanizing the enemy and the advocates of peace facilitates the bombing of subversive villages, the ‘real’ enemies of peace."

Go read the whole thing yourself. The link is right here.

Ventana Gold (VEN.to) halted

Ventana (VEN.to) got halted pending news just before the bell this morning. Has Eike done his deal with Gelvez? We'll probably add an update to this post later today. Only time will tell......

UPDATE: Yes indeed, VEN has nailed down its deal, but at what cost? Well, the original final payment was supposed to be $3m and 250,000 shares. Now it's a cool $48m. So well done to the Gelvez dude, his extorsion methods succeeded.

Guyana Gold (GUY.to): Insider selling continues

On Wednesday we noted, as part of a quick insider trading overview, solid insider selling at Guyana Gold (GUY.to), with company head Patrick Sheridan having sold 61,000 shares recently:

Guyana Goldfields Inc. (GUY)						As of May 4th, 2010
Filing Date	Transaction Date	Insider Name	Ownership Type	Securities	Nature of transaction	# or value acquired or disposed of	Unit Price
May 04/10	Apr 26/10	Sheridan, Patrick John	Direct Ownership	Common Shares	10 - Disposition in the public market	-2,100	$6.650
May 04/10	Apr 26/10	Sheridan, Patrick John	Direct Ownership	Common Shares	10 - Disposition in the public market	-5,000	$6.750
May 03/10	Apr 28/10	Sheridan, Patrick John	Direct Ownership	Common Shares	10 - Disposition in the public market	-13,900	$6.650
Apr 30/10	Apr 27/10	Sheridan, Patrick John	Direct Ownership	Common Shares	10 - Disposition in the public market	-5,000	$6.700
Apr 29/10	Apr 26/10	Sheridan, Patrick John	Direct Ownership	Common Shares	10 - Disposition in the public market	-5,000	$6.750
Apr 28/10	Apr 23/10	Sheridan, Patrick John	Direct Ownership	Common Shares	10 - Disposition in the public market	-30,000	$6.800

So on checking the filings this morning, we note that the selling has not abated. Sheridan has sold another 43,000 shares of GUY:

Guyana Goldfields Inc. (GUY)						As of May 6th, 2010
Filing Date	Transaction Date	Insider Name	Ownership Type	Securities	Nature of transaction	# or value acquired or disposed of	Unit Price
May 06/10	May 03/10	Sheridan, Patrick John	Direct Ownership	Common Shares	10 - Disposition in the public market	-3,500	$7.010
May 06/10	May 03/10	Sheridan, Patrick John	Direct Ownership	Common Shares	10 - Disposition in the public market	-10,000	$7.000
May 06/10	Apr 30/10	Sheridan, Patrick John	Direct Ownership	Common Shares	10 - Disposition in the public market	-5,000	$6.850
May 06/10	Apr 30/10	Sheridan, Patrick John	Direct Ownership	Common Shares	10 - Disposition in the public market	-5,000	$6.800
May 06/10	Apr 30/10	Sheridan, Patrick John	Direct Ownership	Common Shares	10 - Disposition in the public market	-5,000	$6.780
May 06/10	Apr 30/10	Sheridan, Patrick John	Direct Ownership	Common Shares	10 - Disposition in the public market	-5,000	$6.750
May 06/10	Apr 30/10	Sheridan, Patrick John	Direct Ownership	Common Shares	10 - Disposition in the public market	-10,000	$6.700

So what to make of this? Selling 104,000 shares like this (with perhaps more to come) in what vlooks like an average of $6.8 or so brings his back pocket gross proceeds of a little over $700,000, which is not a kings ransom of course but it is a tidy sum that makes a difference to an individual's life. But when all this sellling comes in that drip-drip-drip way and also comes straight after company press releases that talk of exploration successes and exciting new discoveries in not one but two of the company's projects, this kind of selling doesn't do anything to underline the strong prospects offered by that newsflow. Quite the opposite, in fact.

Disclosure: no position in GUY.to (and none planned).

Chart of the day is.....

......the Gold/Silver Ratio.

whoosh!

So many weird and wonderful charts to choose from this morning, what with yesterday's VLMF (very large market fart), but let's home in on the way fear whacked greed into touch and people bought gold while selling silver. Silver is many things (including the metal used to make my wedding ring), but it's not a store of wealth. The rabid silverbugz never seem to get that basic fact through their thick skulls.

RGE Monitor just can't get the staff these days (this week's coveted award)

RGE Monitor is the website and business and thingy all set up by Nouriel Roubini to cover the fascinating (stifles yawn) world of country macroeconomics. Unfortunately, the man who managed to predict the 2008 housing bust well in advance has seen his standards pulled back to the mean by staffers who can't even predict a day in advance. Case in point is Bertrand Delgado, who gets to wear a name badge with "Senior Latin America Economist, RGE Monitor" written on it. When asked about whether Peru's Central Bank would raise their base lending rate this afternoon or stick at the 1.25% rate at their regular policy, Delgado pooh-poohed the very idea of any hike and went on to say;

“Inflation will bounce back, but for now the bank can hold at 1.25 percent,” Delgado said in a phone interview. “We won’t have any surprises like there were in Colombia.”

So, come 6pm and the Peru Central Bank decision was;

May 6 (Bloomberg) -- Peru’s central bank unexpectedly raised its benchmark lending rate by a quarter percentage point as economic growth this year is expected to surpass all of its Latin American neighbors. The seven-member board raised its reference rate to 1.50 percent, from 1.25 percent yada yada continues here

And thusly we learn that for all the airs, graces fancy job titles and rolodexability, Bertrand Delgado is just another dumbass in a suit. We therefore hand out some sound advice to the dude:

Trading Post (third way edition)

Earlier today your humble scribe decided that there wasn't much doing today, thought the whole market was just going to fade into the bell and thus quit the office to go have a relaxing lunch somewhere with excellent, non-financial, un-Blackberried company. I therefore missed the last three hours of today's session. My stars, did I make the right decision for the wrong reasons or what?

I am grateful to regular reader 'M' for the FunkyMonks, sent a few minutes ago. No further comment needed.

Catching up with Greystar Resources (GSL.to)

I know what you want to ask me;

"Hey Otto, how's the market psychology being acting in the last ten days as regarding Greystar Resources after its bad dose of news from Colombia's environmental people?"

It's the question on everyone's lips, of course, so once you've checked over the Greystar (GSL.to) press release from two Mondays ago (the IKN parsing is here and much more fun than the plain vanilla NR), take a look at this 10 day price chart and the notes on the numbers below. All explained and with plenty of time left over for tea and buns.

1) Life is beautiful
2) Holy crap! We're screwed!
3) I'm not joking, we're really, really screwed.
4) Nah, you're all overreacting, dudes.
5) Oh crap....we really are screwed
6) Wait a minute.....
7) GSL is appealing and they say it's all right! YAY!
8) Nope...toldya I was right first time.
9) We are screwed.

Any further questions?

Francisco de Miranda, hair-brained collectionist

My thanks to reader 'UL' for the headsup on this one.

So what do we know about Sebastián Francisco de Miranda y Rodríguez (1750-1816), better known to the world as Francisco de Miranda?

• His nickname is "The Precursor"
• He fought for the independence of the Spanish American colonies at the beginning of the 19th century.
• Although his efforts eventually failed, he was captured and eventually died in a Spanish prison, he paved the way for the successes of Simón Bolivar, he is understood to have played an important role in the emancipation of South America and history holds him in great esteem.
• He collected the pubic hairs of his lovers.

Wait?? What was that last one???

Yes indeedy, according to the May 5th edition of Correo del Orinoco (PDF copy can be downloaded here, check page 18), scientists that have been carefully examining the belongings of Francisco de Miranda since 2006 as part of a formal program to preserve all for posterity have found a collection of pubic hairs, thought to have been harvested (let's say) from his lovers, stuffed between pages of his journals and books.

It's always good to know that people had healthy sex drives back then, of course. As for the collection, I suppose it was the equivalent to today's mania of filling up your hard-drives with pornflix (though I'd guess Francisco had much more fun). In the end, the implied machoman image that Francisco will get from this tiny revelation is likely only to enhance his stature down this neck of the woods, what with LatAm being what LatAm is.

Double Cialis served, the end.

Otto Smackdown Watch: Casey Research and the right to reply

After yesterday's post that mentioned Casey Research and its buy recommendations on Antares Minerals, I received a mail from David Galland, partner in Casey Research. As I always appreciate hearing and airing points of view different from my own and I also think that anyone who has the wherewithall to stand up to my rantings deserves to be heard, I immediately wrote back to Galland and offered him the chance to get his mail published on the blog by way of 'Right To Reply' so that more people could read his objections to my post. So after he'd given his text a slight polish (just to knock off the edges, the post you'll read is for all intents and purposes the same as the original) he sent me what you can read below.

It's only fair that you get to read his point of view without any further comment, op-ed or snark from me, so there's none of that here. My views can wait for another day. I'll leave you with David Galland.

"Otto",

I generally appreciate your analysis, but am surprised at your intensely negative accusations about Casey Research.

Of course, you can't really know who we are - and so I would like to properly introduce myself, and Casey Research.

The short version is that I was a co-founder of a successful mutual fund group (Blanchard Group) and of EverBank, one of the few success stories in the pure online banking space.

But, when EverBank grew too big, I got tired of it and so agreed to join forces with Doug Casey, a friend of long-standing.

When looking over the business he was in, I realized that there was a huge competitive advantage to be had. Namely, in an industry dominated by one-man shops willing to essentially sell their recommendations, a company that based its recommendations entirely on hard research would likely do well. Put another way, when the sole criteria for a stock recommendation is whether the proverbial check will clear, we should be able to provide real value.

Insanely, we build a team that is now over 40 researchers and support staff (this was in 2004 when the bull market in gold was anything but a sure thing) - "insanely" because this, as I am sure you know, is a very cyclical business. Yet, I trusted Doug's analysis, and my own instinct, and we built the team anyway.

It has been a big win - for our subscribers, and as a enterprise.

Consequently, it's sincerely painful to read your blog accusing us of front running our subscribers. If you go back and review your latest article about Antares, you'll see that your evidence is solely a pick up in volume.

Louis James, the lead researcher and editor of our International Speculator, on seeing your accusation, sent this along:

Some relevant facts:

1] We said right at the top of the IS write up that CIA subs had bought earlier.

2] The company had major, value-adding news just before the CIA rec (huge resource increase) that accounts for the volume the writer finds so suspicious. It would have been beyond bizzarre if there had not been high volume then.

3] The company had major, value-adding news between recs that drove the price up (very favorable metallurgy). Ditto as above.

4] Many CIA recs never make it to IS.

5] IS regularly gets recs that were never mentioned in CIA.

6] It is, in fact, almost always the case that stocks pull back after sharp spikes upwards. There were plenty of people who could see our Buy as an exit opportunity -- everyone non-CR who bought before the CIA rec, for example.

I do not believe there is any honest way the author of those remarks could have missed the news that accounts for the share price action. It looks to me like plain and simple maliciousness

David, again. I am sure you pride yourself on your work – and so I won’t attribute mere maliciousness as your sole motivation. But, per Louis, the hard facts are available – and we are always happy to take a call and answer questions.

Now, I can't know your character, or your attitude about anything. Some times I have come across people who form an opinion, and they stick with it no matter what. Others will stop and listen - perhaps engage in a dialogue to see if they may have had a misimpression.

I'm reaching out to you on a personal level, because it sincerely pains me to read you denigrating our organization - and more than that, Louis James who is the most honest and hard working guy I know.

Even if, as a partner in Casey Research, I insisted that Louis write up some company - which I would never do - and he didn't like the company, he would quit on the spot.

In any event, as I said at the beginning, I understand your bias against any research service working in this space - because much of the time you are going to be right. But in our case, you are wrong.

Don’t take my word for it – instead take time to ask around about us, and feel free to contact me at any time to verify the facts, so you don't have to operate off of assumptions alone.

Thank you for your consideration in this matter.

David Galland

Partner

Casey Research

Chigüire reveals Santos's new campaign tactics

As reported late last week, Colombia's Uribe-blessed presidential candidate Juan Manuel Santos has decided to switch tactics after making an EpicFail of his election campaign so far (noted yesterday, Colombia Reports has the lowdown on that here).

But today we All Hail The Bipolar Capybara one again, as Chigüire reveals the major new Santos tactic in this post:

Chigüire goes on to quote Santos as saying;

"I don't understand why I'm being judged for suddenly growing a beard, I simply wanted a change in my image. What's more, shaving has always bothered me. My beard has nothing at all to do with Mockus's."

The rest of the Chigüire post is also unmissable, so please make a point of clicking through. Meanwhile (and slightly more seriously) for more good commentary on The Santos change in tactics (which, surprise surprise, involves going negative and running a dirty smear campaign against frontrunner Antanas Mockus), go visit Structurally Maladjusted's post on the subject as once again bloggers lead the way and MSM journalists can only follow (then steal the ideas, give no credit and claim all plaudits for themselves....as usual).

Chart of the day is.....

...the six month price chart of Affinity Gold (AFYG.ob) (79F.f):

Back on December 16th, IKN ran the first of several posts on this stock. It was entitled "Identifying A Gold Stock Scam", it explained why Affinity Gold was wildly overpriced and the also the nasty future waiting for anyone stupid enough to have been suckered into the stock by bullboard chatter. Just after that post, Affinity Gold started its drop and now we find it trading at €0.066 (yup, six point six euro cents).

There are people who have made a lot of money from this scam company. Those people are called "thieves" and they are the insiders and the brokers that ran the stock. Meanwhile, the other 99.99% of people ever to have bought Affinity are now out of pocket.

So a message to the losers: Next time, don't be so freakin' stupid and learn about what your buying. DYODD dude, an acronym for "Do Your Own Due Diligence" which mean in turn that you should trust nobody nobody NOBODY except yourself. It also means that you need to get into the habit of going to the regulatory filings at places such as Canada's SEDAR and the USA's SEC (they're free, relatively easy and 100% necessary) to look at companies, because there you get to read the info the scumbags rip-off merchants have to publish by law but never want to include in their presentations and conference spiels.

In the end, it's your choice. Do you want to be a sucker all your life?

Colombia's Presidential Elections: an excellent op-ed by Adriaan Alsema of Colombia Reports

Colombia Reports has been the go-to site for English language news on Colombia's presidential election ever since campaigning kicked off and today the excellent coverage has a worthy addition. CR's editor Adriaan Alsema has written this op-ed on the race so far and looked carefully at the major campaign blunders of Juan Manuel Santos in the light of the Mockus surge.

It's a top article and neatly gets to the heart of several issues surrounding the election. Smart analysis and thoroughly recommended, here's the link again to make sure you click through.

Colombia's False Positives: Two cases down, one thousand nine hundred and ninety-eight to go

The banner reads "False Positives are State Crimes" and we agree

IKN applauds today's decision by a court in Medellín, Colombia, to ratify the 30 year sentences handed down to 10 Colombian soldiers convicted of so-called "false positives" murders in 2005. The case in question was about two young Colombian men, Arley de Jesús Vallejo Cardona and John Fredy García Cardona, who were arrested by the soldiers while selling food on the streets of Medellín on 2005 and turned up dead the next day. The soldiers had murdered the boys in cold blood, then dressed them up as FARC terrorists and claimed they had been killed in battle (normal M.O for the false positives cases), and all because the Army units (whose ministerial head at the time was the current presidential candidate Juan Manuel Santos) had to meet quotas of dead FARC terrorists to get bonuses and more time off.

The abhorrent practices of false positives are every bit as bad as the disgusting behaviour of the FARC scum, but if it hadn't been for persistent protests from human rights group (yeah, them meddling kids and their pesky dawg) along with the judicial independence in Colombia, the Uribe government would have managed to keep the whole thing quiet and off the current agenda. How much better it is to know before another of the Uribe lying scumballs gets elected!

Meanwhile, rights groups that made issue of the deaths of Arley de Jesús Vallejo Cardona and John Fredy García Cardona say that theirs are only two of around two thousand cases of false positives identified in the country (yeah...two thousand!) the vast majority of which have been left uninvestigated, hushed-up and ignored.

It's going to be fun to see just how high up any investigation runs under a Mockus presidency, isn't it?

Trading Post (better redmetal than deadmetal edition)

I would personally like to apologize on behalf of Dr. Copper to all those bears that thought today's rebound was impossible and that the price should already be under $3/lb if there were any justice in the world. Both the doctor and I are sorry about the money you're losing. Not.

Rio Alto Mining (RIO.v) up 2.6% at $0.78 and the great'n'good of Peru's mining world gather tonight for RIO-sponsored cocktails in a swanky downtown Lima hotel. Expect good RIO volumes on the BVL mañana.

Copper Mountain (CUM.to) up 5.1% at $2.67 on good volumes. The can of corn players waited on the sidelines for days while the nervous sold out, but today they decided to wait no longer and stepped in. The result is CUM.to leading the field again.

TheNewCrystallex (EC.v) up 2% at $0.255, just to prove that we do feature this scam-laden dog of a joke company when it has a positive day. Hey, in fact we did the same when it was trading over a buck....just a few weeks ago, that was :-).

AuEx Ventures (XAU.to) up 5% at $3.57 and this stock has bounced back fast and strong from the dumpations. Your author has heard larger market voices saying good things about XAU in recent days. DYODD on this cos I'm longer since 2009 at lower prices. My idea of a well-run, undervalued gold explorer.

Growth is a funny old thing

In Peru yesterday, President Twobreakfasts returned to one of his favourite populist drumbeats, that of "becoming first world". In a speech to Peru's private industry chamber of commerce (CONFIEP) he said that, "Peru will be a first world country" (i.e. industrialized nation), reaping the obvious round of applause and headlines this morning for his soundbite.

However, inquiring minds are wondering about the connection between The Twobreakfast Dream and recent statements made by the current lapdog Economy Minister, Mercedes Araoz (red type supplied by IKN):

"Peru’s government plans to expand the Andean country’s capital markets by developing a market for mortgage-backed securities and encouraging more companies to list stock and issue bonds, Finance Minister Mercedes Araoz said April 20."

Yes indeed, it seems that Peru wasn't satisfied with being a bit-part player and third party sufferer in the last round of financial mayhem brought on by excessive greed and pisspoor regulatory control; next time around it's looking to be slap bang in the middle of the disaster zone.

Development, eh........

The Casey Research pyramid scheme

Doug Casey must piss himself laughing at the stupid sheep who are naïve enough to pay him $749 a year for the 'International Speculator'. It's a pity they don't understand just how badly they're getting sheared by this elaborate pyramid scheme set up at Casey.

Wow, I bet all those A-listers were happy to see a sudden jump in volume to sell into.

click to enlarge

Message to Casey Subscribers: YOU ARE BEING RIPPED OFF BY A SELF-SERVING CHARLATAN.

Yours, Otto Rock (long ANM at $1.42 and staying long)

We've been watching the Peru stock market index.....

....over at The IKN Weekly for the past month, as it's one of the better tells around to combine the mining industry with the state of emerging markets. Here's the up-to-date 12 month chart......

.....and here's the spiel that came with our first coverage of Peru's IGBVL "general" index back in IKN49 (dated April 11th); since then the theory offered has basically worked out. Enjoy.

Shock! IKN does technical analysis!
I’m no TA-head and never will be. I don’t “trade off signals” or anything else because my investment decisions are firmly based on fundy analysis. However even a chart-knucklehead such as myself watches a few charts; one watched carefully is the gold/silver ratio. Another is Dr. Copper. And today here’s another one that gets followed by this author, the Peru IGBVL index.

The Peru Stock Exchange is one I watch to gauge overall metals market sentiment. With the general good feeling enjoyed by metals such as copper and gold recently, it’s not going to come as much surprise to find that the Lima Stock Exchange General Index, with around 60% of its weighting made up by miners or mining-exposed companies (eg mine services companies), has been rallying nicely these past few weeks from a February low of under 14,000 to today’s (i.e. April 11th) 15,733 (less than 200 points off its 52 week high). The chart here shows the five year longview to give a little more perspective (NOTE to blog May 5th readers: 5 year chart without notes added below this text), but we can see over on the right of the chart that this rally is now pushing on the ceiling of a trading range in place ever since the metals slump of 3q08 rebounded in the middle of 2009.

The RSI is also featured in the chart, with four litle red circles noting the recent overbought spikes. One of those is in place right now of course, with the inference that the recent rally may be at an end. On the other hand, the 2006 and early 2007 period shows quite clearly that in a strongly bullish situation, the index can remain technically overbought for a long period. The reason for showing the IGBVL index today is that, according to this little indicator that has served me quite well on a macro scale, we’re reaching a minor crunch moment for metals and miners. If I see the IGBVL breaking through 16,000 successfully with panache, strength and charm, there’s every reason to expect it to run further. However the threat of a reversal at current levels is also clear and it would surprise no-one to see a mini-slump back to that 14,000 baseline.

As master charter Gary BiiWii would say, it’s all about managing risk. The last time the index reached the 14,000 level I had my eye on this squiggly line and looked for it to reverse, which is what it did (after dipping into the 13k level for a couple of days....I’m not TA-loving enough to worry about the smallstuff and trade the technicals anyway). When the IGBVL moved up and through 15k it was only of passing interest to me, as there was no “crunch point” likely. But now 16,000 is on the horizon, I’m back looking at the performance of the Peruvian Stock exchange carefully. There’s nothing here that’s cause for worry, but there is decent reason to look for a possible downturn. As far as this chart-sceptic is concerned the reasons are not compelling, but definitely more than a couple of weeks ago.

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Winning friends and influencing people with insider trading

Three examples picked out of the hat this morning.

So let's see now....Quast of CIBC thinks Fortuna Silver (FVI.to) is cheap right now...and Nicholas CampbellSoup at the can of corn thinks FVI is cheap right now....and there there's this humble scribe....and then who else? Err, what about company Chariman Simon 'Accent' Ridgway?

Fortuna Silver Mines Inc. (FVI)						As of May 4th, 2010
Filing Date	Transaction Date	Insider Name	Ownership Type	Securities	Nature of transaction	# or value acquired or disposed of	Unit Price
May 04/10	Apr 28/10	Ridgway, Simon T.P.	Direct Ownership	Common Shares	10 - Acquisition in the public market	10,000	$2.200

Yeah, he thinks it's cheap right now, too. Funny dat, innit?


Over at Guyana Gold (GUY.to), head honcho Sheridan is cashing in a bit:

Guyana Goldfields Inc. (GUY)						As of May 4th, 2010
Filing Date	Transaction Date	Insider Name	Ownership Type	Securities	Nature of transaction	# or value acquired or disposed of	Unit Price
May 04/10	Apr 26/10	Sheridan, Patrick John	Direct Ownership	Common Shares	10 - Disposition in the public market	-2,100	$6.650
May 04/10	Apr 26/10	Sheridan, Patrick John	Direct Ownership	Common Shares	10 - Disposition in the public market	-5,000	$6.750
May 03/10	Apr 28/10	Sheridan, Patrick John	Direct Ownership	Common Shares	10 - Disposition in the public market	-13,900	$6.650
Apr 30/10	Apr 27/10	Sheridan, Patrick John	Direct Ownership	Common Shares	10 - Disposition in the public market	-5,000	$6.700
Apr 29/10	Apr 26/10	Sheridan, Patrick John	Direct Ownership	Common Shares	10 - Disposition in the public market	-5,000	$6.750
Apr 28/10	Apr 23/10	Sheridan, Patrick John	Direct Ownership	Common Shares	10 - Disposition in the public market	-30,000	$6.800

Must be fed up waiting for IAMGold to make a bid and wants that new SUV now.


And finally, it's not the size of the selling at Lydian Intl (LYD.to) that you should be worried about....

Lydian International Limited (LYD)						As of May 4th, 2010
Filing Date	Transaction Date	Insider Name	Ownership Type	Securities	Nature of transaction	# or value acquired or disposed of	Unit Price
May 04/10	Apr 27/10	Coughlin, Timothy James	Control or Direction	Common Shares	10 - Disposition in the public market	-15,000	$1.120
May 04/10	Apr 26/10	Coughlin, Timothy James	Control or Direction	Common Shares	10 - Disposition in the public market	-10,000	$1.095
May 04/10	May 03/10	Corrie, Roderick	Direct Ownership	Common Shares	10 - Disposition in the public market	-10,000	$1.160

.....it's more that the insiders seem to do nothing but sell and sell and sell. I wonder if the IFC are happy about seeing their cash go straight into the pockets of already rich people?

Chart of the day is....

...crude oil, daily candle.
But then again, WTFDIK about chartin' anyhow?

Oh Noes!

Gold is plummeting to ONLY U$1,170/oz!

Silver is crashing to ONLY U$18/oz!!!

However will miners manage to make money of those prices???????

I love days like this. Love 'em. By the way, a Flash update went out to subscribers this morning that confirmed a planned buy for tomorrow. Catch you l8rz, dudes.

A copper rant

Here's a chart that got a bit busy with extra lines thrown in by your humble scribe.

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The Gold:Copper Ratio is one that Gary BiiWii sometimes features (cos he's smarter than most) and shows just how much of the red metal you can buy at any one time with a bunch of the shiny, expensive yellow metal.

The point here is that because copper has recently seen a correction from the $3.50/lb and above range down to the sub $3.30/lb range at the same time as a gold price which has surged quite nicely (and I'm happy about that), we're getting a lot of Doomsayers telling us how copper is indicating the imminent collapse of the world economy, we're all gonna die etc etc ad infinitum.

Yeah well, let 'em shrill. This chart shows that we're still very much inside normal price parameters for copper as related to real money and there's nothing much to read into the last couple of days. As for that demand collapse for copper, you ought to learn a bit of Spanish, cos then you could phone up and ask the guys over at ports in Chile and Peru just how many transport ships are queued up to take concentrate and cathode away from South America to the other side of the Pacific....I promise you that if you do, you won't be so worried about the lack of oomph in the US economy, or that Greece thingy, or whatevs.

Yep, just another bunch of anecdotal for you and in the end nothing more than an opinion. But it's also an opinion that got The IKN Weekly subscribers into Antares Minerals (ANM.v) at $1.42 and now sees the Casey sheep about to add to their (and my) net wealth thanks to the way-late reco at double the price yesterday.

For sure it took me most of 2009 to swallow the rebound in copper, admit I'd called the sector wrong and get bullish (yeah, your author is one of those weird people who doesn't have a problem in saying "i was wrong"...we're a dying breed, y'know). It's taken other people longer. But the funniest ones are those like King Douglas of Estancia that refuse to recognize plain facts in front of their eyes; copper is in demand, it's in a bull market and it's getting a whole heap of multi-billion dollar investment programs thrown at it from major miners who don't give a lickety-flip about a 20c correction. The blind, dogmatic copper bears who consider themselves market experts are wearing Emperor's New Clothes and, as in the Andersen tale, deserved to get fingers pointed at them and giggles directed at their pompous faces.

Small rant over. Mojitos served. The end.

Date of the day is.....

...the Fortuna Silver (FVI.to) conference call. It happens at midday EST today May 4th (9am PST) and here are the phone-in details for those who still like those outdated contraptions:

Date: Tuesday, May 4, 2010
Time: 12:00 p.m. (Eastern Time) / 11:00 a.m. (Lima time) / 9:00 a.m. (Pacific Time)
Dial in number (Toll Free): +1.877.407.8035
Dial in number (International): +1.201.689.8035

Meanwhile, us modern dudes will be tuning in via the webcast, the link to which being right here. It's gonna be interesting to hear what the company has to say about the San José PFS. Disclosure: I'm long.

Charts of the day are....

......copper, 90 minute and weekly candles.

OH NOES! Zee world she be coming to zee end! RUN AWAY! RUN AND HIDE! BE AFRAID!!!!

Oh....wait a minute....no it isn't:
There are always those who feel it necessary to sweat. There will always be those who feel it necessary to call for the end of the world. Let them get on with it.

Happy Star Wars Day!

For what we are about to receive.......

........may the Lord make us truly thankful.

I'd do it in Latin but it's a real mouthful. End of gratuitous swipe.

Trading Post (in the saddle edition)

Kinda boring out there today.

Antares Minerals up 3.2% at $2.89 and reco'd by the Casey dumbasses today (or at least I hear; haven't seen the guffpiece yet). Better late than never I spose. While we're at it, here's a dedication for Louis James.

Focus Ventures (FCV.v) down 3.3% at $0.445 on low volumes. There's a rumour going round down this way about the next project to be snagged by FCV. Still trying to work out if it's vrai, faux ou salade.

South American Silver (SAC.to) up 2.9% at $0.72 and the recent rise in this stock just goes to show that you gringos really will buy anything. Laughable stock and as much chance of getting anywhere as Lemmy Kilminster has with Miley Cyrus.

Constitution Mining (CMIN.ob) down 5.5% at $0.855. It's incredible to believe that a company with no chance of ever producing a single ounce of gold, no cash and now a shitload of debt is actually getting sold here, isn't it Owly?

The main difference between Chile's mining industry and Peru's mining industry is that........

....Chile, being the closest thing LatAm has to a serious country, takes a responsible attitude towards Health & Safety issues. Meanwhile Peru doesn't give a rat's ass about the number of people that die on the job.

Take for example the news out today from Breakwater Resources (BWR.to), that reports its Toqui mine in Chile has been closed down pending the investigation into an accidental death on site this weekend. One death = mine closed and authorities wanna know what's going on (which is how it's supposed to be, folks).

Now take the example of Pan American Silver (PAAS) (PAA.to) that has managed to see not one but 24 deaths at its operations in Peru (yeah seriously, TWENTY FREAKIN' FOUR!!) in the last ten years but its operations have never been shut down by the authorities, its accident record never questioned in the official offices and therefore has just kept on killing and killing and killing.

Hey Ross, maybe that Curly flower is telling you something after all....

Shock! Mining Mogul Screwed By Curly Flower!

Augusta Resources (AZC) (AZC.to) came out with some news late last night that resulted in this reaction in the stock this morning:

Ouch.

Anyway, according to the report its Rosemont copper project near Tucson AZ has been put on hold until this little guy....

......has been further studied by the relevant authorities. Its name is the Curly Coralroot, sometimes known as the Chisos Mountain Crested Coralroot (Linnean name Hexalectris revoluta) and is a rare native species that grows in the area that AZC wants to develop for its mine. In the presser, AZC is downplaying the problems and currently says that by slight adjustment of its plans it won't affect the area in which Curly grows, but maybe they shudda thought of that before now, yeah?

The whole event has, so far today at least, knocked 8.63% off the share price on high volume trading, which has in turn removed some U$3.2m from the net worth of Ross Beaty, the mining dude that recently announced he'd taken an 11.8% position in AZC. Hey, there are a thousand ways to lose cash in this game, but paying $3m for a wild flower? Tough break, Ross.

Yours, rooting for the flower, Otto.