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5/29/10

A room with a view (part 5)

This week's edition is the view reader 'DC' gets from his place in Auckland, New Zealand.

If anyone feels like sending in the scene from their window, you're welcome to do so.

ATW Gold (ATW.v) up to tricks again

What are these crooks at ATW Gold (ATW.v) up to now? Here's the latest, a "debt for shares proposed swap.

ATW GOLD CORP. ("ATW")
BULLETIN TYPE: Shares for Debt
BULLETIN DATE: May 28, 2010
TSX Venture Tier 1 Company

TSX Venture Exchange has accepted for filing the Company's proposal to
issue 2,000,000 shares at a deemed price of AUD$0.25 (or CAD$0.22065) to
settle outstanding debt for AUD$500,000 (CAD$441,271.41).

Number of Creditors: 1 Creditor

The Company shall issue a news release when the shares are issued and the
debt extinguished.

However it's planned to work, you can bet it will have ulterior motives at work and you can also bet it won't be for the benefit of bagholders already ripped nine ways by these frontrunning scamsters.

5/28/10

The perfect video for memorial weekend

My thanks to reader 'AT' for the headsup.

Here's the link to the article in Harper's, here's an extract of the text....


".....with former Argentine president Néstor Kirchner, Oliver Stone learned that Bush claimed that waging war was a formula for economic growth. Here’s the key exchange:

kirchner: I said that a solution for the problems right now, I told Bush, is a Marshall Plan. And he got angry. He said the Marshall Plan is a crazy idea of the Democrats. He said the best way to revitalize the economy is war. And that the United States has grown stronger with war.

stone: War, he said that?

kirchner: He said that. Those were his exact words.

stone: Is he suggesting that South America go to war?

kirchner: Well, he was talking about the United States: “The Democrats had been wrong. All of the economic growth of the United States has been encouraged by wars.” He said it very clearly."

......and here's the video:

The Friday OT: Spinal Tap; Big Bottom

So many cherished Tap moments to choose from. It could have been Stonehenge, or the now legendary "11" scene, or even "Puppet Show and Spinal Tap" followed by the freeform jazz. All those and many, many more.



But we're going with 'Big Bottom', because of lyrics worthy of Pulitzer. Take for example the first verse:

The bigger the cushion, the sweeter the pushin', that's what I said.
The looser the waistband, the deeper the quicksand or so I have read
My baby fits me like a flesh tuxedo,
I'd like to sink her with my pink torpedo


And the unforgettable hook, How could I leave this behind? Enjoy.

The Pacaya eruption, Guatemala

This Spanish language video is the last dispatch from Guatemalan journalist Anibal Archila before his death (QEPD).



In the report he talks of being as close as 60m from the lava flow and saying that the heat was almost unbearable. Shortly after filing this report on the scene of the Pacaya volcano eruption he was hit in the back by a flying rock from the eruption and disappeared from sight. Six hours later his body was found by rescuers. His is one of three deaths reported from the eruption, as well as many injured and some 15,000 evacuated people.

Meanwhile, President Colom of Guatemala has declared a 'State of Calamity' due to the eruption. Guatemala's main 'La Aurora' airport is closed due to ash falls on the runway and plenty more disruption to normal life is coming through.

Colombia votes

This weekend sees the first round of voting in Colombia's Presidential elections (and also 'ley seca' starts today, which means no alcoholic drinks can be sold until the polls close Sunday), with the most likely result being frontrunners Santos and Mockus going to Ballotage in three weeks' time. IKN thoroughly recommends that you follow any and all developments this weekend via the best English language coverage of the country bar none, the excellent online news medium Colombia Reports.

Catching up with Ascot Mining (AM3.f) (ASMP.l)



Way back last September we ran "Ascot Mining and Bargepoles" as a warning against taking a position in German listed Ascot Mining (AM3.f) (ASMP.l), a view backed up by a London-based expert, Minesite's Charles Wyatt (see link). So let's see how it's been getting on since then:

It was 49c on September 7th, day of the post. It's now 22c. Nuff said.

And funny to remember how I had this miffed shareholder mailing me after that September note, telling me how wrong both Wyatt and I were about the stock, telling me about the 'significant developments' in the stock, offering me special one-on-one chats with Ascot's CEO...all sorts of stuff. I suppose it's now mere detail that the guy who introduced himself as a shareholder turned out to be in charge of Ascot Mining's investor relations.....

Moral of the story: There are no shortcuts for retail shareholder when making money in the markets. Read Mark Twain on gold mining for more details and DYODD, dude.

How many Ventana Gold (VEN.to) shares does Eike Batista own?


Answer: 19,306,000.

This number went up this week, as Eike's 63X Master Fund vehicle added 1.1m shares to its pile on Wednesday (and filed them as quickly as yesterday).

Ventana Gold Corp. (VEN)

As of May 27th, 2010
Filing Date Transaction Date Insider Name Ownership Type Securities Nature of transaction # or value acquired or disposed of Unit Price
May 27/10 May 26/10 63X Master Fund Direct Ownership Common Shares 10 - Acquisition in the public market 1,100,000 $10.620


Strangely and weirdly, this puts the 62X Master Fund's total holding at 19.82% of shares outstanding, assuming that the May 13th total of 97,409,131 shares out is still the exact correct one. As many out there will know, special things start happening to Canadian stocks if one single holder goes above 20% so it's not really surprising to see Eike's crew stop just under that magic number.

Now that the land deal is done with Los Gelvez, the question now is "when" Eike makes his move and buys out VEN.to, not "if". My best guess would be after the Presidential elections, but WTFDIK? Anyway, to round off here's the current state of full dilution at the company (the warrants and options are all in the money). I wonder if mgmt will have time to squeeze in a final round of bonus options?

shares out: 97,409,131
warrants: 3,644,000
options: 6,327,000

Chart of the day is.....

.....oil again, but this time the hourly candles.

The rally continues, with $75 falling this morning and the 'Deflation Play' quickly being forgotten by this fickle world. Meanwhile, featuring oil again this morning gives me a lame excuse to paste up a section from today's Can of Corn Morning Coffee. I dunno whether to laugh or cry about this, frankly:

Irish Petroleum - Betting

PaddyPower.com has placed odds on what species would be first to become extinct as a result of crude belching from BP’s (BP) ruptured well in the Gulf of Mexico. Odds are the Kemp’s Ridley turtle, and other critically endangered species that migrate to the Gulf this time of year, would go first. A $5 bet on the turtle would win $9 if it’s listed as extinct at any time because of the spill. Less likely species – the gulf sturgeon, smalltooth sawfish and elkhorn coral – have payout rates of 20-to-1.

The Irish bookmaker hopes the betting will “highlight the environmental catastrophe” and the “sure bet” that it would lead to the loss of some marine species. “We kind of have a very simple philosophy at Paddy Power – within reason, if there is a very newsworthy event that people are talking about, people should be allowed to back up their opinion with some cash,” a company spokesman said. PaddyPower.com is also taking bets on who will be the next CEO of BP.

5/27/10

Dorato Resources (DRI.v) cares for its employees so much....

...that it will happy ream its retail shareholders to please them.

Y'know, there are handouts to management and there are handouts to management, but ONE POINT NINE MILLION OPTIONS worth $1.6m when you're on a stock with a market cap of $58.5m? They've just awarded themselves 2.75% of the company, FerLaffinOutLoud!

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 27, 2010) - Dorato Resources Inc. ("Dorato" or the "Company") (TSX VENTURE:DRI - News; OTCQX:DRIFF)(PINK SHEETS:DRIFF - News; FRANKFURT:DO5 - News) announces that, Pursuant to its 2009 Incentive Stock Option Plan, Dorato has granted incentive stock options to certain directors, officers, employees and consultants allowing them to purchase up to an aggregate of 1,900,000 common shares in the capital stock of the Company. The options are exercisable at a price of CAD 0.85 for a period of two years ending May 27, 2012.
It wouldn't be so bad if options were the only way Dorato (DRI.v) brass handed themselves the love, but the company racked up $1.1m in consultancy fees in the first nine months of the year and you can bet large sums versus rosquillas that names first in the queue when those contracts got handed out also coincide with directors and Cardero Group pals (and we wait on tenterhooks for the YE and its contents). But on the other hand, the company can always point to this year's sparkling share price performance.....

........as a way of justifying this wildly excessive options handout, can't it Owly?

Retail shareholders: The crop that never fails.

IKN heart Jeffrey M. Christian

Somebody has to stand up to those knownothings, charlatans and bullies at GATA. You go Jeff.

"GATA represents itself to its followers as experts when they clearly are not. They prey on the lack of knowledge and fear of investors who have not studied the markets as well as they should have. The solution to that problem is investor education, not lies. All that the reckless pursuit of conspiracy theories do is distract investors from the much more important agenda of understanding the gold bullion marketplace and the fundamentals that drive the price of gold."

The full and most excellent GATA smackdown is right here. I'm sure Jeffrey M. Christian will agree when I say, "DYODD, dude".


UPDATE: A reader writes in with this:
Did you catch the Christian vs. Murphy "debate" on FSN last week?

Link here

I say "debate" because Christian ate Murphy alive.

Doe Run Peru

Peru's best political cartoonist is Carlín of La Republica. Today he nails the liars and fakes at Doe Run Peru better than 10,000 words can do.

Here's the original:

Here's a translation.

China does Mutún, Bolivia

Apparently, there is no foreign investment in Bolivia because of the normal type of scary EvoRedCommieAllGonnaDieRunAndHide etc etc stuff written in your northern propaganda rags (never mind that Bolivia was LatAm's fastest growing economy last year, as EngLang media learned long ago to wisely ignore facts when they don't fit prejudices).

However, the Chinese have not been informed of the all this. Today's hot story from Chinamining is that China wants in on the massive (really....it's very big wow massive) Mutún iron ore project in East Bolivia. Here we go with a straight paste:

The Chinese government has proposed to extend up to US$15 billion in loan to a large scale iron ore mining project in Bolivia, sources reported.

China also intends to set up a joint venture to jointly develop the mine, according to the report.

However, a spokesman at Bolivian government said that the talks with China are still in the preliminary stage. Bolivia is also considering the related proposals raised by enterprises from Korea, Russia and Venezuela, the spokesman added.

According to the spokesman, Sergio Alandia, president of Bolivia's state-owned steel firm ESM, will hold talks with a Korean delegation including Hyundai Steel Co this week.

Bolivia's local newspaper, La Razon, reported yesterday citing Alandia as saying that China is facilitating an iron ore supply agreement with Bolivia and suggests China Development Bank Corp to offer loans to the above iron ore.


Also right now there's a Bolivian delegation in South Korea, invited over by the Seoul brothers to talk about that very same Mutún thing (as featured in IKN55). Strange how you have to resort to blogs to find this out too, innit?

Proof that Studmuffin will talk to anyone

"The card you chose was........THE NINE OF DIAMONDS!"
(crowd bursts into wild applause)

News yesterday is that some lady named Hillary is visiting Ecuador in June to chat with Da Muffin about this and that. The last time they saw each other was Uruguay in March, but this one will be the first official visit by a US Sec State since Madeleine Albright in 2000. Here's the translated blurb and quote from EcuadorCentral, which features the name Arturo Valenzuela, head US diplo for LatAm, i.e. the guy who normally has to clear up the mess the other make. This time he got to do something more proactive.

"Arturo Valenzuela called me a few days ago and said that Hillary wants to visit Ecuador, and I said that she's welcome", said Correa. "(The visit will discuss).. regional issues, Unasur issues. There's a wide agenda with the USA pending, including commercial talks."

So now you know.

The British Pound (GBP) and the Euro (EUR)

Once again we wander off IKN's normal beaten track to check out the other side of the pond. It just seems to me the real baselines for metals prices are being shifted around in Europe right now so it's silly not to watch.

Interesting how the British Pound (GBP) has managed to rally pretty well recently against the euro (EUR). You would have thought the GBP attached to the hip to its bigger neighbour currency....but then again, perhaps it makes perfect sense with the Brits not bodily attached to the PIIGS.

Fund managers know what it's like to use Emerging Market leverage. It's fun in the good times, but has a nasty bite when things go bearish. Now we have the same thing here, just on a much bigger scale. Germany/France etc are fully industrialized nations and have been benefitting from the sharp growth in the southern European EMs for the first decade of the Euro's existence. But now the EMs are weak and those 1st worlders are getting pulled down with them. Except for The UK, shown by the GBP that's moving away from the mess. Just thinking out loud this Thursday morning and noting that a complex subject can have some fairly straightforward results.


Chart of the day is.....

.....oil, and that weekly candle chart of the stuff we follow here from time to time.

The only real reason oil gets followed this way at IKN as it's one of the better cost inflation indicators for the hard rock mining industry. After all, if it's good enough as an indicator for the likes of Keith Barron, it's good enough for me.

By the way, on an oily note here's a link to where Setty picks up on an IPS note telling the world how a US oil exec needs to pay $482m in back taxes on the recent of Peruvian-based Petrotech to Colombia's Ecopetrol. Bribery and corruption allegations woven into the story, too. Good stuff.

5/26/10

Trading Post (head above the parapet edition)


Is it safe to come out yet? It'd be nice to believe that today's GreenScreen is the start of a more pleasant period for equities but let's not jump the gun, as today may turn out to be a small verdant oasis sitting amongst a sea of smelly gunk. Still, let's enjoy saying nice things about nice stocks for a day.

Antares Minerals (ANM.v) up 5.8% at $2.36. Was this really trading as low as $2.02 just three sessions ago? Seems like another epoch. Casey subbers will be happy with this move, as it now only has another 17.8% to move up before they're back to neutral on the stock.

Rio Alto Mining (RIO.v) up 4.1% at $0.77. This stock has weathered the last couple of weeks far better than most junior goldies, perhaps because it's already secured the necessary moolah to bring its near-term project to production. If gold hangs around at $1.2k it'll be a serious cash cow, as the number work just fine at $1,000/oz. DYODD.

Dorato Resources (DRI.v) down 4.7% at $0.82 on tiny volume and the Cardero Crew deciding not to join in the party. One would have thought that a decent gold exploration company might have little problem in attracting a rebound on renewed sector interest today. Whatever could be holding this company back?

AuEx Ventures (XAU.to) up 4.4% at $3.33 and back to the price printed at last Friday's close. note to subbers; I'm trying to do what I want to do here, but the piddly volume is making things sticky so patience is being applied.

Petaquilla Minerals (PTQ.to): An aclaration

In several previous posts, your author has made mention of and also linked to a US court judgement that names Richard G Fifer as a convicted narcotrafficker, having been caught bringing into the US some 4,900lb of marijuana by boat. The posts made a direct link between the convicted Richard G Fifer and the head of Petaquilla Minerals (PTQ.to), Richard Glenn Fifer.

It was brought to my attention late last week by a third party, unconnected to PTQ.to, that the Richard G. Fifer convicted was not the same person. After reviewing the evidence and also contacting the original source that offered up the information previously used by this blog, it would seem that I have been mistaken all this time, that the Fifer of PTQ is not the same person as the convicted smuggler and that, though acting in good faith at the time, my original contact also withdraws their connection between the two. IKN apologizes unreservedly for any misinformation previously published in this matter.

Brazil: Mining royalties will be a hot topic soon

Here's an excerpt from IKN55, out last weekend, that talks about the subject. If your invested via a brokerage in Brazil-exposed mining stocks and haven't heard anything about it yet, why now phone up your friendly a/c manager and ask her or him just why you have to read these things on a blog first?

Brazil, elections, miners and royalties

Thank you for the feedback last week concerning the possible rise of extra royalty payments on mining operations in LatAm, the theme following on from the recent Australian 40% windfall tax proposals. Further to this I was kindly sent an article (5) that neatly sums up the state of affairs in Brazil as that country moves towards its Presidential elections at the end of this year. The article states that all three of the current Presidential frontrunners, Dilma Rousseff (PT), José Serra (PSDB) and Marina Silva (Green Party) are in favour of changing extra royalties to mining companies.

The issue is likely to start making louder headlines amongst the mining community in the next two or three weeks, as the ruling PT candidate Rousseff is due to define her policy towards mining royalties (and thus remove herself from the current backroom lobbying being conducted by mining companies) via a PT party committee that will sit in Brasilia, come to a agreement and then send the agreed text to Rousseff as the official party line (to which she is very likely to stick). The text is not likely to vary much from a proposal sent to congress by the PT party last year that failed in passage. That text envisaged changes in the current system and would charge a royalty perhaps as high as 5%. As for the other candidates, it seems that main opponent Serra is waiting for the PT policy so that he can take a different position, which is likely to be a differing rate of new royalty rather than none at all.

The bottom line is that the junior mining investor is advised to take into account a higher rate of royalties in future calculations on Brazil-exposed miners. They also might want to take into account a possible rude awakening to the issue if and when it begins to make English language headlines.

Amazon boat accident

News is filtering through of a nasty accident on the Peru stretch of the Amazon, close to the border with Colombia. A boat carrying around 150 people is reported sunk, going down at 2:15am local time this morning and most of the passengers are currently listed as missing. Two dead have been confirmed to now. There are reports of the sound of banging coming from inside the sunken craft, presumably from people trapped inside. No news yet on how many people managed to swim to the river bank but may still be officially missing.

UPDATE: Reports are still patchy, with unofficial word coming through that at least 80 people who were asleep on the boat when it went down are now safe, but there are still more than 100 unaccounted for and there's also talk of around 40 people trapped inside the sunken craft. Also (surprise surprise), the boat that is licensed to carry up to 170 people was probably carrying more than 250. That snippet will not come as a shock to anyone that has travelled The Amazon.


Chart of the day is...

....gold, daily candle.

5/25/10

When insider selling makes sense

This blog has recently made mention of the insider selling done by Patrick Sheridan, CEO of Guyana Goldfields (GUY.to). So when that selling continued last week, both this humble scribe and others (who mailed in with headsups...thanks people) made note of it. But it did make me wonder a bit more and look a little deeper at the recent filings from Sheridan and from the searchings at SEDI this little table was put together.

Patrick Sheridan: Insider Trades of Guyana Gold in 2010
date type of transaction amount price shares left
23/02/2010 51 - Exercise of options 250,000 2.02 4,847,334
22/04/2010 51 - Exercise of options 250,000 2 5,097,334
23/04/2010 10 - Acquisition or disposition in the public market 30,000 6.8
23/04/2010 10 - Acquisition or disposition in the public market 30,000 6.8
23/04/2010 10 - Acquisition or disposition in the public market -30,000 6.8 5,067,334
26/04/2010 10 - Acquisition or disposition in the public market -5,000 6.75 5,062,334
26/04/2010 10 - Acquisition or disposition in the public market -5,000 6.75 5,057,334
26/04/2010 10 - Acquisition or disposition in the public market -2,100 6.65 5,055,234
27/04/2010 10 - Acquisition or disposition in the public market -5,000 6.7 5,050,234
28/04/2010 10 - Acquisition or disposition in the public market -13,900 6.65 5,036,334
30/04/2010 10 - Acquisition or disposition in the public market -10,000 6.7 5,026,334
30/04/2010 10 - Acquisition or disposition in the public market -5,000 6.75 5,021,334
30/04/2010 10 - Acquisition or disposition in the public market -5,000 6.78 5,016,334
30/04/2010 10 - Acquisition or disposition in the public market -5,000 6.8 5,011,334
30/04/2010 10 - Acquisition or disposition in the public market -5,000 6.85 5,006,334
03/05/2010 10 - Acquisition or disposition in the public market -10,000 7 4,996,334
03/05/2010 10 - Acquisition or disposition in the public market -3,500 7.01 4,992,834
06/05/2010 10 - Acquisition or disposition in the public market -20,000 6.9 4,972,834
06/05/2010 10 - Acquisition or disposition in the public market -5,000 6.92 4,967,834
10/05/2010 10 - Acquisition or disposition in the public market -20,000 7 4,947,834
11/05/2010 10 - Acquisition or disposition in the public market -10,000 7.29 4,937,834
11/05/2010 10 - Acquisition or disposition in the public market -10,000 7.33 4,927,834
12/05/2010 10 - Acquisition or disposition in the public market -11,600 7.48 4,916,234
12/05/2010 10 - Acquisition or disposition in the public market -8,200 7.45 4,908,034
12/05/2010 10 - Acquisition or disposition in the public market -20,000 7.39 4,888,034
12/05/2010 10 - Acquisition or disposition in the public market -300 7.41 4,887,734
12/05/2010 10 - Acquisition or disposition in the public market -600 7.4 4,887,134
17/05/2010 10 - Acquisition or disposition in the public market -5,700 6.9 4,881,434


What we have here is basically the following:
  • Sheridan is a dude with about 4.6 million shares of GUY.to at end 2009.
  • He then exercises two 250k chunks of options at $2 a shot to take his holdings up to 5.1m or so.
  • He's since then sold 185,900 of the recently exercised shares, at prices fluctuating between $6.50 and $7.50 approx, for gross proceeds of $1.3m
  • He now has a touch under 4.9m shares owned.

Now, it seem to me that he's sold the shares that he's sold this year to pay for those two options exercisings which cost him a total of $1m or so (because he has to stump up the exercise price). Now yeah, for sure he's shelled out $1m and grossed $1.3m from the trades, leaving him $300k gross to the good, but in essence what we have is a man that has been keen on getting his shares held number UP and not down in a way that doesn't weigh on his own pocket (after all, not all CEOs are multimillionaires).

I'm not saying that the pattern above from Sheridan is the best possible. I am saying that it's not really a bad thing going on here and the selling is understandable, it's not a red flag signal for the stock and, in the long run, shows that the CEO is keen on raising his stake in GUY.to. Not all insider sellers are crooks, not all insider sales are immediate selling signals and the thoughts floated here about CEO Sheridan fit 100% with anecdotals from trusted sources that say the GUY CEO is one of the good guys. DYODD.

Bizarrely, Otto agrees with The Can of Corn again

I must be getting old.

One section of today's Morning Coffee, from said establishment, covered Greystar Resources (GSL.to) and I found myself nodding in agreement with Nocholas CampbellSoup's call on the stock. In fact, the guy has been nailing good calls on LatAm bargain miners for a while now, gotta be said. Here's the excerpt from today Morning Coffee (and if you'd like to receive this on a daily basis I have absolutely no idea where you could get it from but you could always send me a mail):

Greystar Resources* (GSL : TSX : $3.36), Net Change: 0.08, % Change: 2.44%, Volume: 307,396
Falling star? Greystar, a Colombia gold explorer, reported on Friday that it has not received a decision in regard to its appeal with the Ministry of the Environment, Housing and Territorial Development (MAVDT) to reinstate its December 22, 2009 Environmental Impact Assessment (EIA) and to accept that the company has complied with all legal requirements to proceed with the development of an open-pit gold-silver mine at the company's Angostura project in Colombia. Greystar will continue to work with the Colombian Government and MAVDT to resolve issues of concern and ensure that the impact of the Angostura project on Paramo is minimized whilst ensuring the financial viability of the Angostura project. At the end of April, MAVDT requested that a new EIA be filed for the Angostura project, with adjustments made to limit the occupied area to an elevation below 3,200 metres. Roughly half of the Angostura deposit and the vast majority of planned infrastructure and project facilities are currently designed to be developed above the 3,200-metre elevation. The request by the MAVDT would require Greystar to completely redesign the Angostura project. According to Canaccord Genuity Mining Analyst Nicholas Campbell, given the topographical challenges of the Angostura land package, particularly at elevations below 3,200 metres, the potential to engineer an economically viable alternative development of the Angostura project that would adhere to the guidelines set out by the MAVDT would be incredibly challenging and likely unworkable. Greystar is completing a Definitive Feasibility Study (DFS) on the Angostura project that is expected to be published in H2/10. In addition, the company has begun the process of securing US$650 million in project finance from international sources. The company continues to carry out exploration at the project with a total of four drill rigs focused on three targets; Angostura high grade, Mongora and La Plata.
It'll get even worse for GSL.to if Mockus gets the nod on June 20th, as he's said pretty darn clearly that mining at 3,000masl should be taboo. I now need to go lie down, get drunk or do something to shake these pro-Corn feelings out of my system. Cream of corn served, the end.

Argentina celebrates 200 years

BsAs sky last night

The Revolución de Mayo began on or around 18th May 1810 and ended a week later on 25th May 1810 when the ruling Spaniards were kicked out and locals took over control of the region that's now, mainly, known as the Republic of Argentina.

So the country celebrates 200 years of existence today. ¡Feliz Cumple, Ches!

UPDATE: This links to a good, wide-ranging note note on Argentina's political and social present day, from Ballvé at South Meridian.

Charts of the day are....

...five year spot copper and LME inventories for the same period.

So let's assume the following to try and make sense of this mess:

Up to late 2008 China (the word "China" used as shorthand for the major world dynamic growth for copper consumption) bought every tonne of copper it could, blissfully unaware in the same way as most of the world of the approaching storm.

Stocks went up rapidly in late 2008 because China simply stopped buying.

The price dropped off a cliff because of oversupply. Econ101.

Then China thought "Hmmm, copper be cheap!" and bought up all it could at new low prices. Stocks dropped from LME but rose in strategic stockpiles inside China. This takes us to mid-2009.

Then LME stocks started rising, as companies jacked up supply and happily found the metal going ever higher. Speculators had moved in, enough of the business world looked at ZIRP, QE and other stimuli policies as being monetary inflation-stoking. Therefore commodities were now in fashion as a store of wealth. This is quite true for gold, but a dangerous assumption for industrial commods like copper.

Cut to present day. Inflation fashionistas are out, deflation callers have an upper hand and although warehouse stocks are dropping, something that indicates higher end-user demand, the price has cut away by 10% to 15% from recent highs, too. That's the bearish case. The bullish case from staring too long at these charts is that even in the face of $3+/lb copper (a price that's supremely profitable for all copper producers worth their salt), the market is an interested buyer and keen on locking up the goods (see recent comments out of Grupo Mexico, Codelco etc for ample evidence of strong end-user purchasing demand).

Now for sure there's a lot of nuance left out of this little list, but it does try, at least, to provide a simple little roadmap and give an idea of the push-pull fight going on right now. So who's the Daddy here? Will monetary influences pull harder than demand influences and get us lower spot copper prices? Or will end-user demand win out. FWIW, history has shown us ample evidence that industrial metals eventually ignore any currency and forex shenanigans and will follow the demand for their products....eventually. DYODD, dude.

5/24/10

Trading Post (daily education edition)


So today I found out that for every dollar some guy spends on a Google AdSense campaign, the publisher (e.g. me, cos I run AdSense here) gets 68c. That sounds like a fair deal, all told. I also found out that I should have bought that Bosch hammer drill and not the cheaper Chinese brand, even though the motor is a bigger wattage and the shop gave me a 12 month guarantee. Live'n'learn.

Fronteer Gold (FRG) up 5.3% at U$5.59 and coming back quite nicely. Volumes are low on this Victoria Day (24 May, a.k.a 24-pack day I'm led to believe) which is only to be expected.

Constitution Mining (CMIN.ob) down a penny at $0.63. It's worth even less.

Spot Copper up 6c at U$3.14, which is a pleasant little rally and should put the Canuck markets in a good mood for tomorrow.

Placement fail

Anyone else notice the slight shortfall here?

This from March 15th:

VANCOUVER, BRITISH COLUMBIA--(Marketwire - 03/15/10) - Petaquilla Minerals Ltd. (the "Company") (TSX:PTQ - News)(OTC.BB:PTQMF - News)(Frankfurt:P7Z - News) is pleased to announce that, subject to all applicable regulatory approvals, it has negotiated a non-brokered private placement of 19,750,000 Units at a price of Canadian $0.60 per Unit for gross proceeds of Canadian $11,850,000. continues here

This from April 22nd:
VANCOUVER, BRITISH COLUMBIA--(Marketwire - 04/22/10) - Petaquilla Minerals Ltd. (the "Company") (TSX:PTQ - News)(OTC.BB:PTQMF - News)(Frankfurt:P7Z - News) is pleased to announce that it has been granted an extension by the Toronto Stock Exchange ("TSX") to May 21, 2010, for the final closing of the private placement of units announced on March 15, 2010. The Company has received expressions of interest for the full amount of the offering, and intends to diligently proceed to closing. continues here

This after the bell last Friday, May 21st:
VANCOUVER, BRITISH COLUMBIA--(Marketwire - 05/21/10) - Petaquilla Minerals Ltd. (the "Company") (TSX:PTQ - News)(OTC.BB:PTQMF - News)(Frankfurt:P7Z - News) announces that it has closed its previously announced non-brokered private placement. As an update to its news releases of March 15, 2010, and April 22, 2010, the Company has issued 4,000,080 Units at a price of Canadian $0.50 per Unit, raising gross proceeds of Canadian $2,000,040. continues here

Sooooo....in March Petaquilla (PTQ.to) gave it the bells and whistles to announce it was raising $11.85m. Then in April it told us that things were going swimmingly and the full whack would be placed. Then late last week the placement is closed, the ticket price is dropped from 60c to 50c and the whole process raises $2m, not the $11.85m planned.

We conclude by opining there is a certain suspicion here at IKN nerve centre that this round of financing didn't go quite as well as the company originally planned. DYODD, dude.

Chart of the day is...

...the latest voter intention poll for Brazil's presidential election:


The last Datafolha survey had PT party's Dilma Rousseff seven points lower, so this poll confirms her rise as seen in other results from other pollsters. Those versed in Castilian can find out more here, as AmericaEconomia does its normal good job of reporting.

5/23/10

Posting will be light this week...

.....as there are things to do Chez Otto that don't include sitting in front of a screen all day.

Just thought I'd tell you.

The IKN Weekly, out now


IKN55 has just been sent to clients and tries to make sense of the recent selloff. Whether it does or not will only be decided by time.

Evo does Finland

As well as the important statesmanlike stuff and the promotion of a true pachamama-friendly agenda....

Bolivian President Evo Morales said Saturday he would like Finland to provide his country with "clean technology," and in exchange Bolivia would send organic products to the Nordic country.

"We could protect our Mother Earth together," Morales told reporters in Helsinki during the first official visit by a Bolivian president to Finland.

"Finland could provide Bolivia with clean technology, while Bolivia could supply organic products to Finland," continues here

.....we hear that President of Bolivia, Dr. Evo Morales, has been spending his time in Finland watching TV and eating breakfast, dinner and snack lunch in the hall. ALL TOGETHER FINOPHILES!