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5/15/10

ECU Silver (ECU.to): Another classic quarter from the GATA-pumped scamsters

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!!!

Shares outstanding balloon again, now at 307.3m (this doesn't even count the near 51m warrants priced avg 92c and then the 15m or so options)

And yes....of course...for all the fanfare and lah lah about better production numbers we have to suffer from these jokers non-stop, it's yet another net loss, this time $1.852m
And let's note that it would have been worse but for the $802k forex gain booked by the company. But the thing is with net losses at ECU.to is that it never stops the scumbags running the show from doling out more stock based compensations to themselves. This quarter saw another $266,000 sent to the ECU great and good via that channel. Oh, and then there are the forward sales on as-yet undelivered metal. These guys are so hand-to-mouth it's cringeworthy and the countdown to next dilutive financing is now reaching its climax.

The 2010 Small Silver Sweepstakes update

Checking in on the state of play in our sweepstakes challenge, as we take nine small silver players and compare their 2010 Year To Date performance to how silver-the-metal is doing via the silver ETF (SLV).

(click to enlarge)

This update shows the field has been shaken up considerably in recent weeks. Our top player is now Bear Creek Mining (BCM.v), a company that has been up'n'around the top echelons ever since we started the series in the 2009 season. But second place deserves a decent mention, as US Silver (USA.v) has made a strong move forward on the back of a decent earnings report recently (and we suspect, some of the larger newsletters putting its name forward as a possible investement). I took a good hard look at the USA.v earnings release and in general I liked what I saw. The high cash cost is still an issue but this can play in favour of those investors who think silver is going much higher from here and can look to USA.v for great leverage. That one is up to you to decide so DYODD, dude.

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.

5/14/10

The Friday OT: Smashing Pumpkins, Tonight Tonight

The basics: Released on the Mellon Collie album in 1995, released as a single in 1996, winner of the MTV best video award the same year.



A Proustian apricot madeleine of a song that triggers memories in everyone who heard it then and then hears it again. The sound of The Pumpkins in their finest moment, this track brings on the emotions in bucketloads. Enjoy.

Trading Post (austere but practical edition)




A different format today, but the same old photo.

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) .........
(click to enlarge)

.......and the market doesn't like it when countries come out and say they're not going to spend as much money as they were going to spend. So the obvious choice here is to print a bunch of dollars, Bernie. As Gary Biiwii oftens says it's a case of "inflate or die", so rather than die, just get on and inflate the balloon again.

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.

A Spanish lesson

It's been featured on The Mex Files, it's been recommended by several readers mailing in, it has over 200,000 views logged up on Youtube already and now it's time to see it on IKN.



La Familia del Barrio (with good English language subtitles) will teach you some of the finer points of Spanish slang...and they're right on about their politics, too. I hope you enjoy as much as I did. Oh yeah by the way, if you hadn't guessed already this video is not for children or those easily offended by strong language.

Gammon Gold (GAM.to) (GRS) Insider Sales

I've been getting all wonky at SEDI this morning, checking out the pattern of sales from insiders at Gammon Gold (GRS) (GAM.to) this year. Fascinating ain't the word :-) Here's a little table put together that shows the transaction code of each trade, the transaction dates, the amount of shares sold, the price fetched and the total gross proceeds of these recent sales.

code date Amount sold Price gross proceeeds
Scott Perry, CFO


1568591 19/01/2010 46,100 10.97 505717
1568592 22/01/2010 15,000 10.45 156750
1568593 25/01/2010 34,000 10.07 342380
1579402 16/02/2010 150,000 10.67 1600500

total
245,100
$2,605,347
Dana Hatfield, Sr VP Fin


1581416 19/02/2010 7,500 10.7 80250
1581418 19/02/2010 1,516 10.64 16130.24

total
9,016
$96,380.24





Rene Marion, Pres & CEO


1568579 22/01/2010 2,500 10.3 25750
1568579 22/01/2010 1,900 10.3 19570
1568581 22/01/2010 2,500 10.4 26000
1568581 22/01/2010 1,900 10.4 19760
1568582 22/01/2010 2,300 10.41 23943
1568582 22/01/2010 1,700 10.41 17697
1568583 22/01/2010 4,300 10.42 44806
1568583 22/01/2010 3,700 10.42 38554
1568584 22/01/2010 900 10.43 9387
1568584 22/01/2010 300 10.43 3129
1568585 22/01/2010 4,600 10.45 48070
1568585 22/01/2010 4,000 10.45 41800
1568586 22/01/2010 1,600 10.46 16736
1568586 22/01/2010 1,000 10.46 10460
1568587 22/01/2010 2,400 10.48 25152
1568587 22/01/2010 1,800 10.48 18864
1568588 22/01/2010 2,200 10.49 23078
1568589 25/01/2010 10,000 9.97 99700
1568590 25/01/2010 10,000 10 100000
1568590 25/01/2010 36,500 10 365000
1581882 22/02/2010 15,725 10.41 163697.25
1581883 22/02/2010 1,700 10.42 17714
1581885 22/02/2010 4,900 10.43 51107
1581887 22/02/2010 2,300 10.44 24012

total 120,725
$1,233,986.25
Peter Tremayne, Exec VP, COO


1570303 28/01/2010 5,000 9.35 46750
1570304 28/01/2010 5,000 9.44 47200
1570305 28/01/2010 5,000 9.64 48200
1570307 29/01/2010 5,000 9.7 48500
1570308 01/02/2010 10,000 10.15 101500
1570309 01/02/2010 5,000 10.08 50400
1570310 02/02/2010 5,000 10.14 50700
1570312 03/02/2010 5,000 10.06 50300
1582227 22/02/2010 15,000 10.48 157200
1582931 23/02/2010 10,000 10.17 101700
1583570 24/02/2010 10,000 10.2 102000

total 80,000
$804,450


Now it should be pointed out that some of these sales (not all by any means) came from options exercising (usually on the same day), so the option base price would have to be subtracted from the gross proceeds to get the true amount of pre-tax profit per trade, but what we're looking at here is the pattern of selling rather than the number of SUVs each insider could afford afterwards.

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?

Coppery things

Following on from yesterday's chart of the day, reader Tweetie asked for the same kind of longer-term treatment on copper and its producers. Can do Tweetie, but as it's a little tougher to put together a single chart without a $2k/month Bloomie terminal we'll do it on two charts and not one.

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.

Chart of the day is.....

...the gold grades reported by Gammon Gold (GAM.to) (GRS) per quarter. This is a special guest chart-of-the-day sent in by A. Person.


At what point does fraud start to get a mention here? Not only were the GAM geols and directors signing off on reserve counts (note; we're talking 43-101 compliant proven and probable reserves here, not M+I+I resources) but the absolute number of ounces was much higher too, all at a lower gold price cut-off as well. Check out the stock price and ask yourself how it got inflated up to $12 or so.

Seriously, would people have run this up to $12 at the end of last year if they knew the truth about the grades at Ocampo? That instead of 1.3g/t in the open pit area there was less than 0.5g/t? Even in the world of scammy gold miners where this author resides and bathes, this story is a real jawdropper. OSC? Are you out there?

5/13/10

a rueful sigh

Troy's flying in Oz tonight, on great volumes too.


It reminds me of the favourite phrase of an old friend: "Which wrong decision shall I make this time?".

Cresencio Choque, Bolivia's wrestling marvel

do not mess with this dude

Cresencio Choque is the hot ticket in Bolivia right now. Standing 90cm (just under 3 feet) tall, he's probably the world's smallest professional wrestler. He's not just a novelty act, either, having beaten plenty of opponents double his height (not to mention three or four times his poundage) and because of his ability he's been given the nickname "Criatura de Dios" (Child of God). He wears that one with pride, apparently.

Check out Cresencio busting moves (and heads) in this video. There's another video of his ability on this link. You go dude!

Dynasty Metals (DMM.to)


I get these really boring anonymous hatemails (hey, on a blog like IKN they come with the territory) from this one guy and there always about Dynasty Metals (DMM.to). Another one came today, loaded with the usual selection of teethgnashing. But then I also get mails from normal people who ask me why I hold the stock, what with the Ecuador pol risk and the way it's flatlined for the longest time. The simple answer is that I bought the stock when it was at $1.35 and at current prices that's a 295% upside in around a year and a half. Hey, maybe not the kind of returns you could have got from Ventana Gold (VEN.to) in the same period, but really it's not that shabby. Sure makes holding a value play that much easier, I can tell you :-).

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.

Conclusion
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.
Any further questions?

The CEO of Gammon Gold (GRS) (GAM.to) needs a dictionary........


.....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.

Let's see why our friend the owl seems to disagree with the use of that adjective. First there's gold and silver production. Despite previous production forecasts from GAM that said the company would produce between 200,000 oz and 220,000 oz gold in 2010, the first quarter number of 28,431 oz (which annualizes at 113,724 oz) leaves mucho mucho to be desired:


Then there's silver production that came in pisspoor too. (Previous GAM forecasts of 8.5m oz to 9.275m oz Ag also look very silly nowadays).


Cash costs continue on up (previous GAM guidance on costs was $315/oz to $350/oz for 2010)....
...with $490/oz a new recent high on costs. So when it comes down to the nitty-gritty, the $1.828m net profit reported by GAM.....

....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...

Mailbag

Just a quick note to say that David Galland of Casey Research got round to mailing your humble scribe last night after getting his memory jogged in yesterday's post. I'm not the type of person to reproduce private mail in the public sphere so the exchange will not get to the blog without permission from the other party*, but suffice to say that Galland decided not to answer the question posed to him. Rather, he concentrated his efforts on erroneous opinions of the character and motives of your author. Put simply, I was neither impressed nor surprised.

Thus endeth this chapter.


*however if Galland writes again and gives permission you'll see the whole thing

Ricardo V. Lagos, gold, pork bellies and money supply

Seems like everyone is talking about gold these days, with most words written the most basic of two-dimensional analyses. However, S.Am Economist Ricardo V. Lago proves that to write an overview of gold and its price rise you don't have to be uninspiring. In his blog El Nuevo Sol, Lagos wrote this post yesterday and included this neat little chart (all I've done is re-label it in English, the credit is fully that of Lago):


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).

Then there was this post by Joe Weisenthal over at TBI. He decided to get all tongue-in-cheek, but by accident he offers up insight. Here's one of the charts in the post, showing the ratio of gold to pork belly prices in the last 10 years:

His point (if there was one, as it's a pretty puerile post) is that "pork prices have been killed in gold terms over the ten year period" even though they've stayed fairly regular in dollar terms. So if you think about this more then a couple of seconds (i.e. more than Joe did, obviously) you'll see that a gap is growing and it's growing quickly. There are the "haves" that own gold and therefore have more purchasing power for dollars, for pork bellies, for plastic knick-knacks from China, for whatever you like. Then there are the "have nots" who don't own gold but haven't really suffered that much because with their dollars they can buy the same amount of pork bellies as they could 10 years ago.

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)

Chart of the day is.....

....how gold the metal (represented here by its ETF (GLD) as proxy) has done compared to four of the world's biggest gold mining companies over the last five years.


So you've heard enough times about the way gold miners offer leverage to gold, right? Well according to facts and track records, it ain't necessarily so, Joe. Of these four producers (and we're including the world's biggest players here) only Goldcorp (GG) has outperformed the metal over the last five year period.

Just sayin'

5/12/10

Mickey Fulp does BNN

Mickey Fulp in his role as Lex Luthor in Superman Returns.....
no wait...hold on...I'm getting confused here.....

Site friend Mickey Fulp was on BNN this morning. He talked gold, silver the ratio between the two, why everybody should own at least some gold and all things related. He then comes up with a couple of stock picks in the Rare Earths sector, plus there are updates on his previous TeeVee picks (that have done rather well, must be said).

Go check out The Mercenary Geologist on this video link right here.

Today's silver riddle

Is rock that contains 2.2Kg of silver and 9.6g/t gold economically viable? Personally, I reckon it has a fair chance of turning a profit :-). Here's a NR from Fortuna Silver (FVI.to) out today:

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

Two totally separate subjects in one post


Regarding bullies, there's some good advice for parents and children right here. Here's an excerpt:

"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:

Does the (above) evidence suggest that Louis James has
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 :-)

IKN presents: The CNBC Gold Trade


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.

Shock!!! Evo Morales Steals Manchester United's Plane!!!

Well, nearly.

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

Chile's copper industry begins to work out that it can't keep all the profits for itself

Awad confused by the concept of paying
workers fairly and giving them a decent life


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 protests

Alonso 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


Chart of the day is...

...the Gold/Silver ratio. Here's the six month evolution of the GSR:

That recent spike is innarestin', innit? When the Greece crisis bloomed fully, the market wet its knickers about a deflationary future and silver sold off compared to gold. But when same Mr. Market worked out that the TheLeadersOfTheFreeWorld™ were going to save Greece by throwin a great big bucket of moolah at the country, the conclucion was "Aha! We got inflation!" and silver ran right back to the previous level.

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.

5/11/10

Read Setty today

A wonderful piece of writing is waiting for you right here on this link. Setty visits the scene of the recent Chilean tsunami and paints a word picture of depth and moment.

Really and unjokingly, a must read article.

The Gulf of Mexico Oil Slick Satellite Photo

Not easy to see in blogsize so click on it to get better detail.

click to enlarge (gets very big)

By the way; please don't refer people to this post. If you want to spread the image around, please download it yourself and post it to wherever you want. This kind of image won't make it to the general public conscience if we leave it to MSM.

This may turn into man's worst ever single act of pollution.

Trading Post (Huarangal edition)

A late Trading Post with just 20 minutes left on the clock today. Hey, I'm looking forward to tonight, Jaime :-)

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.



Dundee throws in the towel on Gammon Gold (GRS) (GAM.to)

Here's the link to a report out of Dundee Securities yesterday with Gammon Gold (GAM.to) (GRS) (and a.k.a gammy gold) as its subject matter. Penned by Ron Stewart and Robert Thaemlitz, the note carries the thwumping sound of Dundee finally throwing in the towel on this overhyped dog of a stock that has bullshitted the market far too long about the "reserves" it pretended to have at Ocampo. Ron&Robert have done a good job here and a service to their clients. We applaud.

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?

Gold (this week's coveted award)

Way way back many moons ago (well, in 2005 in fact) when I took my position in gold and silver bullion, the move was met with derision by, let's say, "people I knew at the time". Verbal shots were made, tin foil hat jokes cracked and I was even laughed at to my face on one occasion.

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:

Mining PRs and the Ottotrans™, Part 18


Today's Ottotrans™ is somewhat similar to the recent one concerning Greystar (GSL.to), but the company, metal and country are all different. Today we feature Western Copper Corp. (WRN.to) and its news release from late last night.

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:

OH SHIT, WE'RE SCREWED AS WELL.



disclosure: no position in WRN.to

So why is Gold Fields (GFI) in JV with Vena Resources (VEM.to), Otto?

Good question. Hmmmm...let's see now.

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[1] (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.

Second, let's remember what the GFI Head of Exploration said about the area in and around Chucapaca. In his opinion, what we have here is a "new district".

Third, let's check a map:
click to enlarge (gets big)


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)(NASDAQ Dubai: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.

Chart of the day is...

....Colombia's CPI inflation, 1990 to date.


This because somebody mailed me last night and asked why Uribe is a popular President in Colombia. It's not just this whole hard line FARC thing he has, y'see; it's the economy, stupid.

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.

5/10/10

Best Greece bailout commentary


It was utterly unsurprising to see Greece bailed out. It was also unsurprising to hear the cheers from the corner that was always going to cheer and the boos and hisses from all other corners (that include the far-righters that would prefer the country to burnBabyburn and the far lefters that get all hangwringy over anything that involves money and finances).

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.