Let's just do the charts and be done.
Here's the assets breakdown.
Debt next, and look at the current column moving up as those payment deadlines start coming closer.
Working capital a cool negative $9.2m!!!
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Let's just do the charts and be done.
Meanwhile, MAG Silver (MAG.to), though treading water somewhat recently, has held on to the bronze medal spot. Next comes our benchmark SLV, which means all the others left to mention have not performed as well as their main product in 2010 (so far at least).
A final thought: The range shown in this update is the smallest ever, with just 36% between the best and the worst performers. Also, only two of the 10 tickers are in negative territory now, which is probably good.
So oil is back to $70/bbl (here's a weekly candle chart to show how crude has liked that number for quite a few months) .........
Let's be clear here: The FreeWorld™, led up by The USA, led up in turn by The Fed, is scared out of their short pants by the mere word "deflation", let alone it getting any traction at all. Here we are on the second Friday in a row where the deflation trades are winning out, so you can bet your sweet bippy the suits are going to do something about it over the weekend. As such, IKN offers a few ideas for places where trades might work nicely:
- Any small silver. My personal choice would be Fortuna (FVI.to) here but if you like, choose EDR.to, FR.to, IPT.v, USA.v...hell, even GPR.to is flippable here in the shorter-term (not my preferred timespan, but is for others)
- Copper explorers. This is a sector we've tracked carefully in The IKN Weekly this year and over there we've selected three favourites. One is Antares (ANM.v), the stock currently being dicked around by the Casey mob, but there are others to like. Copper doesn't like deflation, it really likes inflation and the same leverage factors (plus the depletion of world copper mines) makes exploration plays a great place to be. It also happens to appeal to me persoanlly because LatAm has some world class deposits just raring to go.
- Small golds. They can be producers or explorers with a defined resources. They can also be scam-ridden things just waiting for you to hand over your money. But find a good one (e.g. one I own is RIO.v and that's a good story) and what you have is exposure to gold at a fraction of the cost of the big producers. These little guys can give you great leverage going forward, but remember the flipside of leverage is the high risk.
The choice is yours; you bet on inflation or bet on deflation? If you think Deflation is about to happen (or "is happening", for that matter), ignore these thoughts (or perhaps take the opposite sides to the trade). There is a case to be made for a shorter-term deflationary impulse in the works, but if that does indeed happen your longer-trm looking Otto will just ride it out. This is because i'm hitching my cart to the inflation trades and am long to prove it. DYODD.
|code||date||Amount sold||Price||gross proceeeds|
|Scott Perry, CFO|
|Dana Hatfield, Sr VP Fin|
| || |
|Rene Marion, Pres & CEO|
|Peter Tremayne, Exec VP, COO|
One of the things to note is how much got sold here. Those are big numbers and from several directors, including the main company players Pres/CEO Marion, CFO Perry and COO Tremayne.
You'll also note that the selling suddenly stops late February. That's because GAM released this NR on Feb 23rd that announced it would report its year end on March 30th, which means the company went into a Quiet Period and directors couldn't sell (sidebar: Mr Tremayne's Feb 24th sale looks odd in that light). Then finally, let's remember that it was the March 30th YE results that announced the pisspoor revenues AND the big downward revisions in reserves and grades held at Gammon Gold.
Ain't it funny how the company insiders were so keen on selling their stock hand over fist in that short window they had before the quiet period when they couldn't do anything? I mean, what a freakin' coincidence, eh?
This chart shows the 5 year performance of copper producers Southern (SCCO), Freeport (FCX), Antofagasta (ANTO.L), FNX Mining (FNX.to) and Quadra (QUA.to).
FNX and QUA were chosen to give an idea of a the smaller end of the producer sphere. SCCO, FCX and ANTO.L are there to represent the bigger mining boys. It's worth mentioning here that "pure copper" plays are hard to come by, as companies such as Xstrata, BHP, Anglo etc are also very large copper producers but Cu is just one part of their overall operations. Even FCX's full corp title is "Freeport McMoRan Copper and Gold" which tells you something pretty straight about that company, too. In fact, the closest examples of "pure copper" out there are ANTO and SCCO (even though they have byproduct credits themselves).
On the the five year copper price chart:
If you'd asked just a couple of weeks ago the percentage changes would have been pretty different, but as regards this snapshot the move is from $1.47/lb to $3.16/lb, a difference of 115%. Therefore the "pure copper" plays SCCO and ANTO.L have done significantly better over time and we haven't even included the very tasty dividends that SCCO throws off every quarter.
A semi-OT to round off, while we're on the subject of Cu. Here's the latest LME inventory chart...
...and we see the drop continues. Here's a quote from this report on the issue today:
"Copper stockpiles tracked by the LME fell 0.3 percent to 485,150 tons, the 13th drop in a row. Bookings to remove metal from inventories jumped 15 percent to 19,525 tons.
Check out Cresencio busting moves (and heads) in this video. There's another video of his ability on this link. You go dude!
And not only did I buy the stock back then but I also advised other people to buy it. Here's the December 2008 NOBS report on DMM.to written by your author by way of proof. If you can't be bothered to download the file (and I wouldn't blame you; who needs to read a 18 month old report from a lunatic wonky blog ranter anyway?) here's the conclusion section pasted out for you. DYODD, dude.
Dynasty has been severely affected by the local political scene in 2008, as well as suffering some of the effects of the wider market woes. However, as project economics still look sound and profitable, the decision to invest in Dynasty is a call on Ecuador mining and its future in the country.
NOBS has no doubts that the current discount for political risk at DMM is far too large. Once the new mining law is on the books DMM will almost certainly revalue. We expect an initial target of around $3, with $4.00 to $4.50 once Zaruma is operational. Market doubts will remain, especially about the size and shape of the windfall tax to be applied, but as total state burden is likely to be designed around 50/50 parameters the combination of “classic taxes”, the royalty burden and the WFT will not take much more away than in other countries….perhaps the final difference will be 10% of proceeds.
Socially and environmentally, there is still delicate ground to clear. However DMM enjoys strong local support and that should win the day (although there is a clear risk of political or protest actions from other groups in Ecuador).
Once in steady operation at Zaruma further price revaluation is likely. The NOBS medium-term target of $5.60 is based on the P/E ratio parameters discussed in the report. Once Zaruma is running, DMM will be in a position to grow organically, and can decide whether to move ahead at Jerusalem and then Dynasty Goldfields.
DMM.to is a speculative buy, and could almost be described as a “strong speculative buy” due to its compelling economics and the political situation which is on the road to stabilizing, but may still hold unpleasant surprises. But the bottom line is that reward far outweighs risk. DMM is an obvious buy for investors with a higher risk profile to their portfolios.
.....because he should check the definition of the word "strong".
Today Gammon Gold (GRS) (GAM.to) released its 1q10 earnings, which it described as strong.
....does not justify the U$7.50 share price currently commanded by GAM (the US ticker being GRS)...not even close. That's because with 138.4m shares out, this company makes a $1.8m quarterly profit and thinks it's worth over a billion dollars. Craziness abounds.
Anyway, GAM has its ConfCall at 10am EST today, which you can tune into via this link. I'll be there listening and noting just how many softball questions get tossed by the lapdog brokerage analysts that cover this stock. They're unlikely to be too hard on GAM, cos clients are up to their eyeballs in paper generated by previous rounds of financing. Don't wanna rock da boat too hard, eh boyz...
Thus endeth this chapter.
*however if Galland writes again and gives permission you'll see the whole thing
Now, we all know (or darn well should by now) that inflation is driven by monetary factors and not price factors. Most of us know that Global Money Supply has been rising fast, too. But to see it in a chart like this really rams it home (i.e. good job, Lago).
The bottom line is that the wealth gap is widening. So you have to decide with side of the widening gap you'd like to be on.
Yours, Otto (long gold since 2005)
no wait...hold on...I'm getting confused here.....
Go check out The Mercenary Geologist on this video link right here.
VANCOUVER , May 12 /PRNewswire-FirstCall/ - Fortuna Silver Mines Inc. (TSX: FVI / Lima Stock Exchange: FVI) is pleased to announce the results of drilling completed in the upper portion of the Animas Vein at the Caylloma Mine in southern Peru . Exploration raises and cross-cuts completed in late 2009 and early 2010 along the Animas structure above level 6 of the mine cut high-grade silver-gold mineralization as previously reported (see Fortuna news release dated Feb. 2, 2010).Highlights of the drilling include:
ANIS016010 2222 g/t Ag, 9.64 g/t Au, 1.17% Pb and 3.02% Zn over 9.2m
ANIS016210 431 g/t Ag, 0.45 g/t Au, 0.53% Pb and 0.26% Zn over 11.8m
ANIS015610 520 g/t Ag, 0.45 g/t Au, 0.47% Pb and 0.32% Zn over 7.6m
ANIS015910 305 g/t Ag, 0.64 g/t Au, 0.91% Pb and 2.33% Zn over 8.2m
ANIS015810 508 g/t Ag, 0.42 g/t Au, 1.51% Pb and 3.76% Zn over 4.1m
Widths given are estimated true widths based on the orientation of the drill holes relative to the Animas Vein. The drilling tested the Animas Vein mineralization over a strike length of 500m and vertically from level 6 to the surface, a distance of 150 to 200m along the inclination of the vein.The full assay results from all twenty drill holes completed in the upper portion of the Animas Vein are summarized below with length-weighted assay averages calculated for the mineralized intervals. The new silver results compare extremely favorably to the 156g/t Ag average Proven and Probable Reserve (P&P) grade for Caylloma with sixty percent of the holes returning higher silver grades (see Fortuna news release dated July 16, 2009). CONTINUES HERE
"Bullies often pick on someone they think they can have power over. They might pick on kids who get upset easily or who have trouble sticking up for themselves. Getting a big reaction out of someone can make bullies feel like they have the power they want. Sometimes bullies pick on someone who is smarter than they are or different from them in some way. Sometimes bullies just pick on a kid for no reason at all."Go over to the link for more. There's strong, practical advice on how to stand up to people that try to throw their weight around, pick on smaller fry and attempt to cow them into submission using dubious logic.
In other news, it's strange to note that after the IKN post on Casey Research and its Two Tier system of subscribers (the top tier getting buy advice way before the second tier), Casey Research's David Galland was so very fast in sending in his rebuttal (before 7am the very next day, in fact). However, since IKN ran a critique of Galland's mail (that was published with due permission from the author) that showed up severe deficencies in the arguments put forward by the "selective memory" (let's say) of Casey's Louis James, your humble scribe has had to wait for comment from Galland for two days without a peep as yet, even though there was a question directly asked of him. Let's repeat that question here, just to make sure it gets through:
been telling lies in order to cover his tracks, David?
And here's the chart that accompanies the last post, just by way of a reminder:
We're looking forward to a response. After all, getting both sides of a issue is important and we're always willing to give Galland room here. So don't go all shy on us all of a sudden, David...it's not like IKN is bullying you in to a response or anything :-)
1) Buy any company that has the word "Gold" as part of its corporate name
2) Errr...that's it.
Meanwhile, can anyone else see the obvious danger in this chart?
People, be careful out there. Level-headed investors are better investors. Booyah, suckaz.
Because Man Utd ran out of money, Bolivia stepped in and bought the thing instead. We presume Evo will be cool with red leather seats and minibars. Here's Bolivia Weekly on the story.
Evo Buys Manchester United Plane
The Bolivian government confirmed on May 11th that it has bought a luxury airplane model Falcon 900 that belonged to Manchester United. “This is a plane that Manchester United ordered, paid for portially but then couldn’t finish paying for so the company is selling it to us. It is new and has the safety features we require,” said minister of economy and finance Luis Arce Catacora. The French airplane is being purchased because the President has been continues here
Goddam commies, eh Marcelo?
Here's Alonso Soto (very good reporter, by the way) on the current scene in Chile's copper mining protests, industrial relations and what's in the pipeline. Recommended read.
Chile's copper output could take hit from protestsAlonso Soto, May 12
SANTIAGO (Reuters) – Miners in the world’s top copper producer, Chile, risk a slew of subcontractor protests that could curb global supply if they don’t move quickly to boost benefits and pay for part-time workers.
State-owned Codelco, the world’s biggest producer, has settled bonuses with subcontractors, and so has the biggest mine, Escondida, so these key producers are less likely to be hit by demonstrations. But big risks remain elsewhere, as workers demand a bigger share of booming profits stemming from high copper prices.
A five-day subcontractors protest at Chile’s No. 3 copper mine Collahuasi cut 3.3 percent of the world’s mined output and fanned fears of contagion. For the main story click on
Talks broke down on Tuesday, raising the specter of violence as subcontractors threatened to step up their fight at the mine, 4,400 meters above sea level in the Andes mountains.
In a worst case, widespread subcontractor demonstrations could hurt output in Chile enough to cut global copper production by 18 percent, boosting prices for the red metal.“Companies have to start giving out bonuses and improving working conditions for subcontractors if they don’t want this to get out of hand,” said Pedro Marin, head of continues here
...the Gold/Silver ratio. Here's the six month evolution of the GSR:
Here below we take a longer view, with three years worth of data. Note that since the Financial crisis, silver has not recovered to that 52X averaging range.
Why should that be? Same inflation/deflation reason, cos the fat lady ain't sung yet.
Not easy to see in blogsize so click on it to get better detail.
This may turn into man's worst ever single act of pollution.
B2Gold (BTO.to) up 13.9% at $1.72 on the back of a strong progress report that hit the wires this morning. The ex-Bema team are executing well.
Western Copper (WRN.to) down 19.9% at $1.53 and it'll probably drop more. A full million shares traded into the water permit mess, which is 8X avg for this stock.
Gammy Gold (GRS) up 5.3% at U$7.65 and proving that this gold bull move is so strong that even the worst of the sector can get an upmove.
TheNewCrystallex (EC.v) UNCH at $0.215 on low volumes. Oh fiddlesticks boys, are you missing out on all the fun today? Best advice is to storm off in a huff and go stomp your feet somewhere.
Carpathian Gold (CPN.to) up 1.3% at $0.40 and showing Rodney Dangerfield characteristics after getting little pull from a great drillhole news release this morning. Apparently, 791m of 0.92g/t Au Eq from a deep porphyry just isn't enough to please the market these days.
So go have a read yourself, and by the way The IKN Weekly subscribers can compare what's being said here to what they read on April 18th in IKN50. Always kinda interesting to get a second opinion, no?
I'm not a goldbug and I will never be a goldbug. What I am is long gold and if you don't understand the difference you need to read more and talk less. Today's post isn't going down that street, but it is directed at that bunch of self-appointed experts who told me I was wasting my time and my productive capital by tying it up in the relic. I've been meaning to write this quick little ditty for a while so today's market action has brought up a topical opportunity. You idiot, knownothing fools laden with worthless qualifications and self-important manners have had this coming for a long, long time (and you know who you are, too). Don't bother to mail me; just enjoy, dumbasses:
This is what they wrote:
VANCOUVER, BRITISH COLUMBIA--(Marketwire - 05/10/10) - Western Copper Corporation ("Western Copper" or the "Company") (TSX:WRN - News) was notified today by the Yukon Water Board that the Carmacks Copper Project's ("Project") Water Use Licence application has been denied.
Western Copper is disappointed by this unexpected decision.
The Company is concerned that the decision of the Yukon Water Board is inconsistent with previous decisions of the Executive Committee of the Yukon Environmental and Socio-economic Assessment Board, and the Yukon Government which, after a lengthy environmental assessment process, determined that the Project should be allowed to proceed and issued the Project a Quartz Mining Licence allowing construction to commence.
The Company will be reviewing the decision in more detail and determining its next course of action.
And this is what it means:
disclosure: no position in WRN.to
First, let's take this morning's news release about the major new gold discovery made by Gold Fields (GFI) and Buenaventura. Here's how the NR kicks off:
JOHANNESBURG, May 11, 2010/PRNewswire-FirstCall/ -- Chucapaca's joint venture partners, Gold Fields Limited (51%) (Gold Fields) (JSE, NYSE, NASDAQ Dubai: GFI) and Compania de Minas Buenaventura S.A.A. (49%) (Buenaventura, BVN), are pleased to announce the discovery of a major gold-copper-silver deposit in their Chucapaca project area (CPA) in southern Peru.
Called the Canahuire deposit, it has a Mineral Resource estimate of 5.6 million gold equivalent ounces (Table 1), with mineralisation potential beyond the extent of current drilling. The Inferred Mineral Resource for Canahuire is approximately 83.7 Mt at 1.9 g/t gold, 0.09% copper and 8.2 g/t silver for a total of 5.6 million gold equivalent (AuEq1) ounces. CONTINUES HERE
And if you do the math, 5.1m oz of that total is pure gold.
Third, let's check a map:
And here's a nice close-up.
Oh look! Esquilache is just 25km away from a major new gold discovery made by GFI....hoodathunkit, eh?
Fourth, let's remind ourselves of the VEM.to NR dated May 4th 2010.
TORONTO, ONTARIO--(Marketwire - May 4, 2010) - Vena Resources Inc. (TSX:VEM - News;VEM - News; FRANKFURT:V1R - News; OTCBB:VNARF - News), a Company with strong partnerships with four of the world's largest mining companies, is pleased to announce that after field reviews conducted by its partner Gold Fields Limited ("Gold Fields") (
NYSE:GFINews; JSE:GFI)( NASDAQDubai:GFI) in the Amantina region (18,900 hectares) in southern Peru, a technical committee comprised of geologists from both Vena and Gold Fields has agreed to advance the exploration to focus on a significant diatreme breccia target that had been previously identified by Vena in 2007. LIMA: -
The explosive breccia target known as the Amantina prospect is located approximately nine kilometres east of the historic Esquilache silver mine where Vena is actively exploring and approximately 27 kilometres east of the Gold Fields / Buenaventura Chucapaca JV project. The Amantina prospect consists of a polymictic breccia with a strongly silicified chalcedonic matrix surrounded by a zone of hydrothermal heterolithic breccias developed in Tertiary aged andesitic volcanics. The core breccia measures approximately 400 x 200 metres and trends N 20 degrees E. Additional lenticular outcrops of breccia poke through the extensive soil cover approximately 250 metres to the southeast and indicate that the overall size of the diatreme pipe may be much larger than the observed outcrop. The breccia body responded as a chargeability / resistivity high (disseminated pyrite in the siliceous matrix) during the 2007 induced polarization survey conducted by Vena and two other similar targets were identified to the southwest and northeast.Strongly anomalous mercury, arsenic, lead and antimony geochemistry combined with the chalcedonic content of the breccia matrix suggest that CONTINUES HERE
Hey, there are never any guarantees when you're out exploring for gold, but GFI didn't just pick the VEM Esquilache/Amantina concession to JV because it had some leftover geologists that wanted a new spot in the mountains to go hiking. DYODD, dude.
But here's a little thing: Let's also note that Colombia is now seeing a big bout of monetary stimulus, as since September 2009 (just 6 months) the country M3 money supply shot up by 14%...that's a Venezuelan rhythm and not normal for a monetarily prudent economy such as Colombia's.
I smell inflation in the pipeline, folks.
However, I was very pleasantly surprised by one thing. Flicking over to my fave UK politics blog Ten Percent, your humble scribe today read owner (and IKN friend) RickB's stunningly good rant on the whole Greece affair. I'd never have suspected that the best Greece bailout commentary so far would come from that quarter, but there ya goes, Joes. Here's an excerpt:
"This is a rescue package within the rules of the game, better than what could have happened but ultimately it prolongs the scam. Neoliberalism does not work, financialisation in place of actual productivity does not work (excuse the pun), capitalism unregulated and unconstrained does not work, Adam Smith was actually very clear on that despite what Randroids and laissez faire fundamentalists prefer to read into his works (by current standards he’d be labeled a socialist by corporate media). What we are seeing is a rolling breakdown of systems of human activity because we are serving the economy not making the economy serve us."
Yes, yes, and thrice yes. Go over and read the whole thing at Ten Percent by clicking this linky right here.