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8/14/10

ECU Silver (ECU.to) 2q10 results: The Mexico Mike Challenge

The instructions for this week's competition are simple:

1) Download this PDF. It contains charts generated from the earnings reports of ECU Silver (ECU.to) dating back to 2007. The charts include the 2q10 earnings report figures that ECU.to filed yesterday but no written comments.

2) Send the PDF to Mike Kachanovksy, aka 'Mexico Mike' and owner of this website that has relentlessly pumped ECU Silver to the world in all this time.

3) Ask Mexico Mike to explain the evolution of the numbers shown in the charts to you. He should consider this a test of his own earnings report analysis skills.

4) Ask Mexico Mike whether he has made a mistake in relentlessly pumping ECU Silver (ECU.to) to the world and whether he should have paid more attention to the company financials and balance sheets all this time.

The end.

UPDATE:
So apparently Mexico Mike thinks I'm (and I quote) "a disgrace to the mining community", which made me laugh, coming from a guy that can't read a balance sheet and takes sponsorship money from the very people he should be redflagging to his members. Mike, the only mining community that feels threatened by me and resorts to calling names is the community of scamsters and self-servers who don't like plain truths about themselves in print.

And another thing: I don't consider myself part of the mining community, which is probably the thing that people like you are most worried about. The disgrace of the mining community is much more likely to be the way that its close-knit, buddy-buddy way of existence stops anyone with a public voice from speaking out against the hundreds upon hundreds of bad apples in its midst that constantly rip off the investment community. Mexico Mike, your silence is far more disgraceful than my plain speaking. Now go fuck yourself.


Concentration of wealth in Chile? Shome mishtake shurely ossifer!

Here's the first part of a report over at Mercopress. Click through to read the rest:

Four Chilean families concentrate 47% of assets in Santiago’s stock exchange

Four families in Chile concentrate 47% of the assets of companies quoting in the Santiago Stock exchange according to a book titled “Towards an inclusive growth; economic policy proposals” written by economist Luis Eduardo Cerda.

The book which addresses wealth concentration in Chile names the four families: Andronico Luksic; Anacleto Angelini; Eduardo Matte and current president Sebastián Piñera, whom together made up 9.16% of Chile’s GDP in 2004 and 12.49% of GDP in 2008.

To the 47% of assets in the stock exchange, according to Cerda must be added critical market concentrations in other areas such as CONTINUES HERE

Twelve point five percent of GDP!!!! In four families!!!!! I lol'd.

Fair warnings

I really like this page from the website of some dude named Tom Scott. Here are just two of the plenty newspaper warning stickers on offer.

You can download all the stickers on Tom's page, too. He's put a handy-dandy PDF together, yours for free. Go visit.

A room with a view (part 17) summer vacs edition

Today's is from reader and NYC dweller WB, who took the first day of his vacation last Monday to go see the Yankees before heading out of town.
For the record, taken at 2:20pm approx, Monday August 9th. He assures me this was a $50 seat. Looks like da bleacherz to me..... :-).

Send in your summer vacation photo to the usual address and make IKN a prettier place in cyberspace.

8/13/10

The Friday OT: Simple Minds; Alive and Kicking

Stay until your love is alive and kicking.



Revisited by these ears just a couple of days ago after years gone by, it's great to say that this one has stood the test of time. Yep, the video is cheapo and 80s cheesy (keyboard player stares in camera close-up, bass player thrashes out while at least ten miles from a power supply etc) but the tune? Wowsers. Solid players all round, a group that combines beautifully and Jim Kerr has a standout singing voice. Minute 2:44 onwards my fave bit. Amongst the 80s crud now pushed at us and called nostalgic greats, this one truly stands out. CHOOOOOOOOOOON!

ps: That's the Kaaterskill Falls, USA

I love gold

Reflections from the mainstream. Pass the tinfoil hat, dude.



Thanks to reader JS for the headsup.

Polling for the new Mayor of Lima, Peru

On October 3rd, Peru runs its municipal elections to vote in mayors and regional representatives in an election that will shape the 2011 Presidentials. The most important race, and one that will really set the scene for next year, is that for the mayor of Lima.

Pollsters IMA published its third monthly voter intention poll today on the race and the results are interesting. Here's the chart:

click to enlarge

Lourdes Flores, a right wing candidate who has failed several times at runs for the Presidency, is leading and steady in first place. In second and fading fast is Alex Kouri, up to this year the mayor of neighbouring Callao but a person tainted with plenty of suspected corruption over the years.

But the most interesting thing about today's poll is the rapid rise of centre-left Susana Villarán, now holding 9.7% of voter intentions, double that of last month. Susana is a rare breed amongst Peruvian politicians in that she's honest and trustworthy. Seeing her rise in the polls here suggests that Peru is actually maturing as a political entity and is looking for a break from the usual mafioso-type of representatives that look after themselves first and care little about the people they govern.

We wish Susana well, hope she makes a serious run at second place soon and goes on to fight it out with Lourdes.

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A better quarter from Minera Andes (MAI.to)


Tell the world: A mine in Argentina actually made a profit!

Sales revenue of $49.4m from San José is a new mine record. Net income for MAI on that (MAI owns 49% of the mine) came to $11.3m, which is also good. From there, MAI has clearly been spending on its other projects, because once the San José revenues had run through the MAI.to structure post tax net profit turned out at $4.6m.

Here's the NR for more crunchy goodness. This McEwen vehicle isn't sparkling yet, but this quarter was a step in the right direction. DYODD.

What does Goldman Sachs say about gold?

Find out by downloading the Goldman PDF report dated August 11th right here, but below find excerpts:

Gold prices have sold off on lower speculative positioning …

After rallying to a record high in June, gold prices have declined on a selloff in speculative futures positions and gold-ETF holdings. Although the sell-off in speculative positions might not be surprising given the rise to a record-high price and decreased concerns over European sovereign debt, it stands in sharp contrast to the movements in US real interest rates, which have fallen to near-decade lows.

… however significantly lower US real rates point to higher prices

Under our gold framework, COMEX gold market positioning tends to reflect US real interest rates, with low US rates driving a high level of net speculative length in gold futures. Consequently, the recent decline in gold net speculative length, even as 10-year US TIPS yields fall below 1.00%, suggests that the gold market is now oversold, and we expect increasing speculative long positions to carry gold prices back toward our 6-month COMEX gold price forecast of $1,300/toz.

Renewed quantitative easing measures by the US Fed would be an effective catalyst to drive gold prices higher

We expect the current low real interest rate environment to continue as our US economics team recently lowered their US growth outlook for 2011, with the implication that the US Federal Reserve will likely keep short-term US interest rates low through 2011. This should provide further upside support to gold prices and raise the upside risk to our current gold price forecasts. In addition, our US economics team also expects that the US Federal Reserve will return to quantitative easing measures in late 2010 or early 2011. We believe that a return to quantitative easing could act as a strong catalyst to carry gold prices to higher levels.

Charts of the day are....

...these, stolen from this post and h/tipped from @felixsalmon

click to enlarge
Pretty, no?

8/12/10

Fortuna Silver (FVI.to) reports its quarter

How earnings have progressed at FVI, 2007 to date

Fortuna Silver (FVI.to) filed its 2q10 financials and its 2q10 MD&A (click on those links to download your copies) a few minutes ago. A solid quarter (as expected) including:
  • 5c EPS
  • 55% operating margin at Caylloma
  • Cash cost at Caylloma of negative $5.23/oz silver
  • A strong working cap position of U$71.7m, more than enough to pay for the San José capex (even if you forget the earnings to come in the next quarters at Caylloma)

This stock is dirt cheap. Toldya enough times and repeated the message in IKN65, two Sundays ago, using these words:
Fortuna Silver (FVI.to): The holding pattern continues. I’m just going to take a couple of lines here to say out loud that I still believe this current period is an outstanding window of opportunity to accumulate FVI shares and that this stock is as good as they come in the junior mining world. When push comes to shove, you can keep your hotpot juniors with their discovery holes and overhyped potential, because I’ll take exceptional underlying value as my point of departure every single time. Top pick, end of story. Rah-rah.

Those words were written with FVI at $2.08. It's now $2.40. Just sayin'. More analysis in IKN67 this Sunday. DYODD.

Kaption Kompetition: The winners

So on Tuesday IKN asked, nay begged you for captions to go with the photo on offer there. We had plenty of entries mailed in and none were rejects, but a winner there must be. Well two winners in fact, as your impartial and unswayable judge (that be me) couldn't separate these two and we're calling joint winners on this one.

First winner is Rick B, owner of the wonderful blerg known as Ten Percent, who sent in this comment on the sartorial elegance on offer:


Second winner is site friend Setty, witty as always and tying in the photo's date with the fact that Juan Manuel Santos turned 57 that day. Setty also provides a nice dose of bizarre, which always goes down well Chez Otto.

So those two both win U$8.50. Setty wants his to be donated to this site, which has been promo'd all week by A Tiny Revolution. Fair enough, it's on the way. RickB please contact and give prize collection instructions. Have a nice day, y'all.

Trading Post (fat lady not singing edition)


Fortuna Silver (FVI.to) up 4.5% at $2.34 on moderate volumes. FVI reports its quarter late today.

B2Gold (BTO.to) up 4.3% at $1.70 on 2X normal volumes, with the market liking the news out of BTO today on the recommencement of work at Gramalote Colombia, in JV with AngloGold. UPDATE: What does Haywood Securities think about this news? Find out here (pdf), but let's tell you before clicking through that the call is "impact: positive" according to the dude.

Almaden Minerals (AAU) up 16.8%
at U$1.67 on continued strong volumes week. There's been a lot of market movement in AAU since its news release on Monday that had a sparkling looking hole included and the potential for great things. I'd point readers to Mickey Fulp's Mercenary Geologist page where, if you sign on (it's totally free) you can read his recent write-up on Almanden and find out more. Not a stock this humble corner of cyberspace has ever covered or held but if Fulp likes it there must be good things there. And hey, if you'd taken his advice at the time you'd be 70% or so up in a very short space of time. DYODD, dude.

More on the unravelling of the US-Colombia military base deal

Further to our post yesterday, Bina has translated today's developments out of Colombia's Constitutional Court.
La W Radio reports that the Constitutional Court of Colombia will declare the military-cooperation accord between Colombia and the US inexecutable, since it must first be passed by the Congress before being approved.

The court declared the measure inconstitutional, but left it alive for a limited time. It gave the Colombian congress one year to decide whether or not to approve the accord continues here


As a slight aside, here's a map presented by AFP newswire that shows the positions and uses of the seven bases that the US wants to set up in Colombia.


Now is it just me, or perhaps it's just lucky typesetting, but do you think all them there boats, planes and armed soldiers are pointing in the same direction out of sheer coincidence too?

Doing the jobs most US citizens wouldn't do

Greg Weeks has a good post up on his site this morning*, a concise but insightful review of what looks like a very interesting book. Here's how Weeks introduces the subject.

I really enjoyed Gabriel Thompson's new book Working in the Shadows: A Year of Doing the Jobs [Most] American Won't Do. Back in 2007 I reviewed his book There's No José Here. To highlight the plight of low wage immigrant workers, he gets a job picking lettuce in Yuma, Arizona, then in a chicken factory in Russelville, Alabama, and finally a restaurant in New York City.

It is a very well written book, and he captures how incredibly hard the work is

We're then given some excerpts from the book and reported comment such as:
For all three jobs, he wanted to quit early and was relieved when it was done, acknowledging the privilege he had in doing so, when in fact others were doing two such jobs at the same time to make ends meet.

This humble corner of cyberspace recommends Weeks' post to you, dear reader. Plenty of food for thought.


*yeah i know

Bolivia increases its exports to the USA


Chapter One: In December 2008, then President George Bush suspends the ATPDEA trade agreement between Bolivia and the USA, stating that Bolivia hadn't coopoerated with the "war on drugs", US style. Laments from Bolivian biz, we're-all-gonna-die, Morales killing country economy, etc.

Chapter Two: In the period January 2009 to July 2009, Bolivia's exports to the USA, now having to pay trade tariffs, totalled $175.2m

Chapter Three: In the period January 2010 to July 2010, Bolivia's exports to the USA, still paying the same trade tariffs as in the same period of 2009, totalled $256.76m. In other words, Bolivian exports to the USA are up 46.6% YoY.

All this happened in the period when Bolivia's economy was the fastest growing in all the Americas, too. Yep, from Canada to Tierra del Fuego, Bolivia came out best. Funny old world, innit?

Source: La Razon

Constitution Mining (CMIN.ob) is running short of suckers


It's been a few weeks since we checked out the game of stone soup known as Constitution Mining (CMIN.ob), but the news today from the company is somewhat hopeful, so here's an update. Not hopeful for the company itself, mind you. What this humble scribe refers to is that by the looks of things, CMIN is running out of suckers to scam. Here's why:

  • On June 23rd, CMIN announced it was running an equity placement to raise U$8.125m. At that time, early in the raising process, it had pledges of $302,250 on the table.
  • So today CMIN updated on the raising process. So despite pumping the stock not once but twice in via its bullshit Swiss, German and Austrian compliant paid pumphouses (it got over $1 recently before the inevitable selloff and pullback) CMIN is now at a total of just $1,722,733 raised. In other words, in the last seven weeks it's only managed to add $1.4m to the placement book and still has six million left to find.

We know that CMIN is woefully short of cash. It's taken on short-term bridge loans that it needs to pay off quickly and it needs to raise the cash to close on its silly deal with the equally silly Seabridge Gold (SA). This not even mentioning the stupidity of its Marañon river "gold sands" malarkey. With working capital still heavily negative it's going to be fun to watch how long Michael Stocker can keep this shell game running. DYODD, dude.

Rusoro (RML.v) likely to move up on this news


Rusoro (RML.v) has had a wretched year, but this news out of Reuters this morning should bring it some relief:

CARACAS Aug 12 (Reuters) - Gold miners in Venezuela will be allowed to export 50 percent of production, up from 30 percent previously, Venezuela's Central Bank said Thursday.

The change came in new rules published by the bank in response to requests from private companies. (Reporting by Eyanir Chinea; Writing by Andrew Cawthorne; Editing by John Picinich)


The word on this has been floating around for about a week, but until rumour becomes fact in Venezuela, it's best not to count chickens.

Chart of the day is.....

...the Gold/Silver ratio.


You need more silver to buy gold again, folks. I wonder what the silverbugs will blame it on this time? Moon phases? Delay in the second coming? Obama?

8/11/10

Trading Post (lentejas si la quieres las tomas y si no las dejas edition)


Gammon Gold (GRS) (GAM.to) down 2.6% at U$6.03. I laughed when I saw GAM getting bot to $6.20 or so yesterday on the back of its results. Why so? Well, cos when I plugged the numbers into the model and then ran the forecast of what it could make by running Ocampo only in 3q10 and beyond, the PE sucks. Kool-Aid served here by the shepherds in the Canadian houses.

Jaguar Mining (JAG) down 7.0% at U$5.87. All that needs to be said on this PoS was said yesterday. Untouchable and untrustable.

Medoro Resources (MRS.v) down a penny at $2.04 on low volumes. After the reverse stock split hype saw this dog jump a few points, ennui has set in again. Hey, is the market finally hearing about this company's significant social problems at both Frontino AND Marmato? It's about time that news filtered thru......

Rio Alto Mining (RIO.v) up 5.9% at $0.90. There must be a reason why RIO is bucking the downtrend today. Whatever could it be............?

TheNewCrystallex (EC.v) UNCH at 15c and even though one of the chief EC.v bullshitters and hatemailers sent me a few bytesworth of his bile last weekend, he still didn't have the guts to apologize. However, your humble scribe may have scared him by writing back and telling him a few things about himself that he didn't know I knew. For example his bullboard handle. Strange how the cowards tend to STFU when discovered, innit? Why people think they can remain anonymous on the interwebnetpipes is totally beyond me. The rule for staying anon is not to piss people off that know how back offices work.

Wowsers! Colombia's airbase agreement with the USA may about to be voted inconstitutional by Colombia

Colombia's Constitutional Court dudettes and dudes

If this happens, a very interesting turn of events is on the way. Colombia's interwebnetpipes site "La Silla Vacía", known for its insight and good contacts, today reports that Colombia's Constitutional Court is likely to throw out the USA/Colombia airebase agreement that allows the US to use Colombia as its own personal aircraft carrier. Here's the first paragraph of the Silla Vacia report translated, click through for the rest:

Yesterday for several hours, the meeting of the Constitutional Court debated the agreement that allows gringo military the use of seven military and concluded the session without coming to a decision. Today they meet again. Although the input of two of the judges is still needed, three different sources told La Silla Vacía that there is a clear majority to vote down the agreement between Colombia and The United States. Continues here.



UPDATE: What, you don't speak Spanish and want more translated? Oh, that's a tough one, isn't it? So let's get this straight: You have all these opinions that you get from news filtered to you by English language media, you consider yourself an expert on South America, you tell people that actually live here what's right and wrong....and you don't actually have any way of knowing what's being directly said...is that right? And then you write stuffy mails to bloggers demanding more information as if it were your God given right? Here's a message for you, my anonymous friend:


The trapped Chilean miners

Your humble scribe received a mail this morning asking why I hadn't mentioned the plight of the 33 miners in Chile trapped deep underground by a rockfall, a story that has captured the attention of the country in question and raised many questions about permitting practices in Chile. Well in fact the sad story has been covered but it was mentioned in the Weekly, not here on the open blog. This is how IKN66 began last Sunday:

There but for the grace of God go I
Once again we have been reminded of the dangers of the mining industry, as a cave-in at a small Chilean copper mine has trapped 33 workers (of a total of 155 on that mine’s payroll) deep underground. Rescue work was severely hampered on Saturday when a rockfall in the ventilation shaft blocked rescuer’s access to the trapped miners (1).

Chile’s Mining Minister Golborne cut short his visit to Ecuador and Colombia (he was going to attend the Santos inauguration) and was on the scene within hours. Chile’s President Piñera left Colombia immediately after the ceremony Saturday to make it on site as quickly as protocol would allow. After meeting with families of the miners on site Saturday night he returned to Santiago to make the appropriate official noises from the Presidential Palace today.

This opening segment of IKN66 doesn’t seek to preach but merely wishes to add perspective. We’re all intelligent people here, so spare a thought.

For what it's worth, Setty has been covering the story well (along with the ensuing polemic) so go there for analysis in English. This corner of cyberspace isn't into rubbernecking but today we're posting about the Chile trapped miners because of heartening news out of Mexico. There, two miners were trapped in an underground cave-in for eight days. One died, but the other has just been rescued alive. Here's the report in Mexico's Jornada today (translated):

Saltillo, Coah. Plutarco Ruiz Loredo, 45, was pulled out alive by rescuers after being trapped for one week 90 metres underground in a coal mine in the municipality of Melchor Múquiz. Since the accident on July 30th, 12 workers have been saved but last Tuesday the Secretary of Work and Social Security for the region gave up hope for the two others inside the mine after they fell to the bottom of the mineshaft when the rope they were using broke. In fact the search was called off because the mine was flooded, but a squadron from the Northern Steelworkers Group re-started the mission. In the end, the only death was that of Ramón Sánchez Arellano, 30.

We send our best wishes for the survival of the Chilean miners and also a message: Don't lose hope, people. Fuerza Chile Carajo!

UPDATE: Setty today runs the story "Chile Fires mining regulators over mine collapse". Go look.

Peru sees macroeconomic in-fighting

Back last week (while commenting on the normal level of dumbassery displayed by economists regarding Peru) we noted that the Central Bank, headed up by Julio Velarde, was worried about the overheating of the economy. This is why they raised rates from 2% to 2.5% of course, but the thing that caught mine eye at the time was the phrase used in the communique that mentioned public spending was causing inflation. Here's the snippet of snark from that IKN post:

Particularly interesting is the bit about accelerated public spending causing inflationary pressures....hey, you'd never know Peru is in an election year, would you?

With that background, let's check this Reuters note (that displays great insight, must be said) about how Peru's FinMin Araoz is opposed to the Peru CenBank position and is pushing to keep public spending at high levels.

LIMA, Aug 10 (Reuters) - Peru's finance minister on Tuesday bristled at a suggestion by the central bank that she slow spending to curb inflation and vowed to meet her fiscal target for this year in one the world's fastest-growing economies.

'If there were no public investment then we would unnecessarily be putting the brakes on the economy,' Mercedes Araoz told reporters. 'Our fiscal deficit this year will be 1.6 percent of gross domestic product. Next year it will be 1 percent.'

The central bank, citing a surge in public spending and sizzling domestic demand, raised its benchmark interest rate by more than expected last Thursday to 2.5 percent from 2 percent. It was the biggest increase of the current tightening cycle in an economy investors see growing about 7 percent this year.

The next day, its monetary policy director, Jorge Estrella, said: 'The finance ministry will need to start stepping on the brakes to gradually reduce spending and in this way help domestic demand grow in a more sustainable way.'

Araoz, who on Tuesday responded publicly to the central bank's comments for the first time, said there were no signs the economy was overheating.

Public investments rose 65 percent in the first half of this year from the same period a year ago, though that pace should slow to 20 percent in the second half of this year as the government is winding down its economic stimulus program launched last year, said Araoz.

She ruled out criticism from the opposition that President Alan Garcia wants to ramp up spending before regional elections later this year.

SPECULATIVE CAPITAL

At the same time, Araoz issued a warning that too much monetary tightening could attract more short-term capital to Peru, which has been flooded with dollars this year, pushing the sol to a two-year high of 2.80.

'You have to make sure that the interest rate is not raised too much, so as not to make it so attractive to speculative capital, this is a measure that the central bank will have to study at the appropriate time,' she said.

The central bank has repeatedly intervened on the local foreign exchange market this year to soak up excess liquidity, buying nearly $6 billion since January to prevent currency volatility, which could contribute to inflation if the sol were to sharply reverse direction after excessive strengthening.

In recent weeks, the finance ministry has said it would complement the interventions with purchases of its own.

Araoz said there were no signs Peru's economy is overheating. Inflation in the first seven months of this year was 1.79 percent. The central bank's annual target range is between 1 percent and 3 percent.

Along with Brazil, Peru is expected to grow the fastest in Latin America this year.

Peru's economy grew more than 9 percent in the second quarter as its construction and finance sectors expand at double-digit clips, swifter than the traditional engine of mining exports.

Araoz said her office plans to upwardly revise its 2010 growth forecast, which at 5.5 percent is well below more optimistic projections by lenders and the International Monetary Fund.

'It would be around 6 percent, something like that,' she said.


Once again, politicians care more about the short-term feelgood reflection of a higher GDP rate (which in itself is a dubious metric for measuring a country's progress) than being economically responsible and checking back growth to a sustainable level. Viva freakin' investment grade, peeps.

Chart of the day is....

.....late. Another day in paradise, another power cut.

In a Flash update to subscribers on Monday, the words

"...Your author is still somewhat leery about the shorter-term prospects for copper..."

were contained as part of a new reco (which I'm not in any hurry to fill, subbing-guys, even though my 48 hour waiting period is now over) so this general shorter-term funk isn't unexpected (however neither do we claim soothsaying powers...it's a binary call, after all). And thusly copper sags a bit on the latest round of were-all-gonna-die. So be it. If you want to run with the herd you shouldn't be interested in what IKN says about junior mining stocks anyway.


8/10/10

It's Kaption Kompetition Time

We haven't done one of these for a while so here's the shot, taken at some airport in Colombia today.


What are they saying? Stick your thoughts on a mail to the usual address, or in the comments section below. Best answer come Thursday afternoon wins U$8.50 sent to your PayPal account (update, or if preferred donated to the blog of your choice, not including here).

Setty calls out the bizmedia on Venezuelan oil

This links to a great post and puts numerous newswires, media outlets and analysts to shame. Here's how Setty kicks it off, click through to read the rest:

Is there anyone out there who gets the numbers right on Venezuela oil shipments to the USA? Not as far as I can tell. Everybody — Reuters, Barclay’s, you name it — reports a U.S. import figure that is much lower than the reality. Here’s why, and how to avoid this common error. Note: If you are frightened of Microsoft Excel, skip this post and keep reporting the wrong number. Nobody cares except me. In fact if you do it my way you will piss off your boss, because it makes Venezuela look better than the EIA numbers. So really, just ignore this post. Truth will get you in trouble.

Continues here.

Mining PRs and the Ottotrans™, Part 23


Today's example comes from the pages of Northern Miner, online edition out today.

This is what they said:

Apology

Apology to East Asia Minerals and Michael Hawkins

In the online story regarding East Asia Minerals published on July 29, 2010, and reprinted in our newspaper (vol. 96, no. 25), we incorrectly stated that East Asia Minerals had not disclosed to its shareholders that a large portion of its tenements in Indonesia is on land designated as protected forest.

In fact, the company wrote in its August 2007 information circular to shareholders that "almost the entire Miwah tenement is in Protected Forest Area" and that "a special permit from the Indonesian Department of Forestry is required to conduct exploitation in such an area."

As such, there is no imputation whatsoever by The Northern Miner that East Asia's President and CEO Michael Hawkins or any other management or directors of East Asia Minerals personally benefited from withholding this information from shareholders.

While it's widely agreed that Indonesia has its challenges with respect to corporate governance, there is also no imputation that a company must engage in illegal activities in order to acquire a special exploitation permit in a protected forest in Indonesia.

A similar retraction and apology will appear in the next paper issue of The Northern Miner, vol. 96, no. 26.

We apologize for and regret any embarrassment, distress, inconvenience or damage to the company and Michael Hawkins resulting from publication of the story.


And this is what it means:

Apology


Yeah, errr.....sorry about the $101m our bullshit lies written by a just-out-of-college hack with more bravado than ethics managed to knock off your market cap Mike. Won't happen again, pretty promise.

My stars, I just hope they don't start French kissing on live TV....ewwww


In a dramatic development that has shocked absolutely nobody, Oldboy Prez Chávez goes to Bogota today to meet, greet and play kissy-makey-uppy with Newboy Prez Santos. It's like watching the politics of an elementary school playground, honestly. Hey, it's so unsubtle that maybe even the EngLang media will be able to decode it this time! On second thoughts.....

Jaguar Mining (JAG): Just how bad was the 2q10 earnings report, Otto?

Ohhhh, it was very bad. Very nasty, smelly and badly bad.

In the world of OPUD (over-promise, under-deliver) so normal to the world of gold mining (GRS, MFN, countless others) one small producer stands head and shoulders above the rest in terms of utter mediocrity. Jaguar Mining (JAG) has always managed to disappoint its shareholders and the market on its earnings day each quarter but this one, published after the bell yesterday, takes the biscuit.

The miss was so bad that it's left even the cynical amongst us (i.e. me and hopefully you) open-mouthed. Go see the numbers yourself in the NR and the way the company has no idea how to guide for the future due to the complete snafu it's made of its Turmalina mine, but I'd just like to offer up one chart generated from company projections that shows just how moronic JAG thinks its shareholders are:


Here we have the last 10 quarters results. Now this is the same company that said in late 2008 it would be "leaving 2009 at a 200,000oz per year production rate". It's the same company that saw its Pres/CEO Titcomb say on March 25th 2008:
"Today I am going to focus primarily on our growth initiatives and the program to grow the company from its program that was announced shortly in the past year, about a month ago. We’re moving the company from a 400,000-420,000 oz Au producer to a 700,000 oz Au producer."

Honestly I shit thee not, dear reader. That's how this bullshitter started the YE conference call that day, transcript available on request. I mean, Jeebus Creepus! How in the name of all things good and sweet can you move a company from 400k if you can't even put together a 200k production year two years later?

But no, this doesn't stop the stream of drivel and balderdash from flowing out of JAG, as we see that it's now guiding the next two quarters as the highest production numbers ever at the company! YOU CANNOT MAKE THIS SHIT UP!

There's only one thing left to be said here. Daniel Titcomb, will you please just...

And while you're at it, resign in disgrace.

UPDATE: Not only that, but they've gone chicken on us and hedged. Truly pathetic. This from the 2q10 financials:
12. Subsequent Event
During July 2010, the Company entered into a limited ‘no-cost gold collar’, which is a financial contract to mitigate gold price risk in the event of an unforeseen significant global financial event. These no-cost collars will be measured at fair value on a recurring basis, using significant observable inputs (fair value hierarchy level 2). To place the no-cost collars, the Company purchased gold puts for 59,600 ounces with a strike price range of $1,050 to $1,117 per ounce and sold gold calls for 60,000 ounces with a strike price range of $1,300 to $1,475 per ounce. The contracts are time-matched and settle prior to December 31, 2010.

Chart of the day is....

...the 2 year price chart of the company we're featuring in next weekend's fundamentals report in The IKN Weekly.
No numbers and no names, the only clue is that it's a producing gold miner. And it's an interesting stock, particularly on the financials side.

8/9/10

It's junior mining Quiztime!!!!!!!


YESSS!!!!! It's time to test your analytic abilities, folks!!! Sent in by reader 'RB' who writes:


"....scroll through this and see if you detect a pattern......."


So go ahead lucky contestant, click the link and see what you think!!!!! Good Luck!!!!!!!!


This week's freebie

This one looks quite fun. Sign up for this free eNewsletter and you get a delivered digest of financial blogging, featuring the "best of the web" (which means you'll never get this humble corner of cyberspace featured...natch squared).

Anyhow, take a look at the blurb and get wiser on the markets via this thing. Totally free too, so the price suits.


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Argentina, mining, Mercosur, a rant (excerpted from IKN66)

Here's a chunkette from yesterday's IKN Weekly.

MERCOSUR backs mining

In last week’s two day meeting of MERCOSUR in San Juan Argentina, the four Heads of State that comprise the trading block (Brazil’s Lula, Argentina’s Cristina, Paraguay’s Lugo, Uruguay’s Mujica) along with associate member heads from Chile and Bolivia as well as Venezuela’s foreign affairs minister (Venezuela hopes to join MERCOSUR in the very near future but is being stymied by right wingers in Paraguay’s congress) signed the Declaration of the 39th Meeting of MERCOSUR which contained the following passage as one of its points of order (translated) (12):

“The Presidents of MERCOSUR reiterate that mining, minerals and metals are important for the economic and social development of MERCOSUR countries, as conformed by the results of the World Summit for Sustainable Development of 2002” .

The declaration went on to state that it was concerned about actions taken by third party countries

“....that limit the full development of the mining sector of the block at a time of new investments, development of new projects and the generation of employment that creates opportunities for social inclusion and economic progress”.

This clause was in clear allusion to the European Union that has threatened to block imports of Argentine metal production as a retaliatory measure against fairly recent Argentine import restrictions, but could also be used against the countries of origin of anti-mining NGOs.

Argentina ‘Glacier Law’ and anti-mining protests (and a rant)

The MERCOSUR statement was a strong one and comes at a time when Argentina’s anti-mining movement has seen some momentum on its side. For example, on Wednesday President Cristina Fernandez de Kirchner wanted to make a speech in the city of La Rioja to commemorate the assassination of a local bishop (Bishor Angelelli, murdered in 1976 during Argentina’s Dirty War and now honoured by an official day of mourning every August 4th in Argentina) but was forced to abandon the idea due to a anti-mining protest that turned somewhat confrontational (13).

It also comes at a time when the revised so-called “Glacier Law” is expected to pass vote in Argentina’s Senate this August. Your author received a mail on this subject from subscriber AP, who was concerned as to whether the passing of the law would affect specifically Minera Andes’s (MAI.to) Los Azules copper project up in the Andean highlands. To put minds at rest on that score (and on the other projects in the Cordillera) here’s what I wrote back to AP:

The law will almost certainly pass, but it's very unlikely to affect Los Azules. In fact, the law as stands is a very watered down thing and not even Pascua Lama will be stopped. Any mine would have to directly affect a glacier...as in the ice itself.

This passage of this law may make some headlines when it happens (and it still has to pass through the Presidential veto), but unless your mining project finds itself directly on top of a glacier or likely to directly affect water supply from mountain run-off put it low on your list of potential worries. But Argentina being Argentina, watch out in the longer-term (i.e. years, not months) for revisions done by future non-Kirchner governments that might just make the law more of a threat to mining projects. In Argentina, anything can happen and often does.

A final word about the anti-mining movement in Argentina; we’re now moving into the first stages of the Presidential election pre-campaign (the vote is October 23rd 2011) and we can expect the issue of mining to be on the debate slate. Most significant political powers in the country are pro-mining but there will be noise made by the anti-mining brigade looking to make the issue a central subject. What I’ve witnessed so far from the anti-mining people is a rather naive and simplistic campaign, with a message that doesn’t stand up to much scrutiny relying more on emotional responses than hard facts. A Spanish phrase that springs to mind when thinking of them is “Perro que ladra no muerde”, which literally translates as “the dog that barks doesn’t bite” and is similar to one in English, of course.

Your author does on occasion side with anti-mining groups when they present a solid case, for example many places in the Amazon basin region of Ecuador, Colombia, Brazil and Peru have no reason to see mining development, many projects are opposed by the people that really matter (i.e. the immediate locals) for cultural or even religious reasons and there are strong cases for the undoubted damage they would cause in very rich and sensitive areas of biodiversity, as even a low footprint operation can upset things. Also for the record, I am a supporter of Costa Rica’s ban on mining as a country policy as the Tico’s decision will probably turn out to be a net positive (marketing-wise at least) in a country reliant on eco-tourism for a significant portion of its income. But when the anti-mine factions use the Luddite “No Mining Because We Say So!” line they deserve no sympathy whatsoever. Just ask them where the raw materials came from to build their Prius/cellphone/flatscreen TV/ electricity supply/etc ad infinitum and send them on their way, as up in the arid reaches of the Chilean and Argentine Cordillera and away from the glaciers it would need a nuclear explosion to cause significant damage to the biosphere. The reactionary left is every bit as stupid as the reactionary right.

My very favourite part of the current Majaz/Rio Blanco court hearing

Andrew Bristow, prize shit

Right now a court case is going on the the UK to try and get to the bottom of the Majaz/Rio Blanco torture case that we've featured on this humble corner of cyberspace quite a lot. Here's my very favourite quote from proceedings so far, part of the depositions made by witnesses late last week:

The engineers José Saavedra and Darwin Palacios as well as workers Eugenio Castro and Román Tirado Villar, confirmed that the company (Monterrico Metals) coordinated the reprisal operation against the protestors.

Román Tirado, administrator of the Rio Blanco camp, kept in constant contact with Andrew Bristow Bevege, Director and General Manager of the company, who ordered the security company 'Forza' and the police to abuse and torture the protestors.

José Saavedra affirmed that "Román Tirado gave instructions to the police, the workers and to Forza about the villagers, said that they were terrorists and they had to be treated as such. He also was in charge of taking the photographs".

We always suspected Andrew Bristow to be a total shit. Now we know.

Chart of the day is....

...gold. Good ol' fashioned gold. Daily candles.

I think we can safely say that this chart causes little in the way of worry for people holding gold :-)

8/8/10

IKN Uncovers Gold Mining Fraudulent Scam

Peggy Dodson (for it is she); Welcome to your
house of pain, scumball scamster

Today IKN reveals a gold mining scam. Not a cheap-shot junior mining company trying to pull a fast one, nor a scummy newsletter writer skirting the edges of what's legal or illegal. No, this time we're talking about a full-on, no-holds-barred, dirty, criminal and illegal fraud operation that's designed to bilk people to the tune of THREE HUNDRED AND SEVENTY-MILLION DOLLARS (I put that last bit in capitals to catch your attention).

Ladies and gentlemen, let me present Peggy Dodson (photo above). She heads up the Urban Broadcasting Corporation TV station out of Harlem NYC, she describes herself as a "...professional speaker, visionary, creatress and business professional." And now to add to her career history of jazz singer and broadcasting entrepreneur, Peggy is branching in the gold mining business...in a big way.

All that preamble is to get you to download this PDF report. Do it now, download and read what Peggy is trying to offer to the world, because if it weren't so brazenly criminal and had the potential to rip off thousands of naive people it would be funny.

The basis of this fraud is a 160 acre gold mining claim in Kern, California called 'Gold Pan'. Peggy, along with her associate Jeff Magnuson and probably a whole team of fraudsters in the background, are pitching to raise U$370,000,000 to develop Gold Pan via the issuance of senior secured collaterized notes (i.e. bonds) that come in $100,000 sized packages. Or in other words, the minimum investment (however in this case, when you see the word 'invest', please read 'flush money down toilet') that Peggy Dodson is trying to get from you is U$100,000 per tranche of this debt issuance. The debt is pitched as coming with an 8% coupon that would be paid half yearly for 20 years, beginning in 2011. Debt maturity is in 2031.

When the money is raised, the pitch tells us that Gold Pan will be put into production and will make lots and lots of money. However, the numbers used are straight out of fairytale land and here are a few for your reading enjoyment. We are told that:
1) Gold Pan is a placer-type deposit that has 64.333m tons of mineralization (page 6)
2) That rock can be processed at the rate of 3.68 million tons per year over a mine life of 20 years
(page 34).
3) The gold that comes from that throughput adds up to 1,711,200 ounces per year (page 34)
4) EBITDA is calculated at U$1.3Bn (yep, that says one point three billion) per year with gold priced at U$900/oz (p34)

The numbers are, quite simply, ridiculous. Just to pick one of those sets out the hat, to get 1.7m oz Au from 3.68mt throughput means that even at 100% recoveries the gold content would have to be at 14.5g/t! For a placer deposit! In California! And nobody's ever heard of it before! My name is Franz Kafka, welcome to my world.

And this is the business plan that Dodson, Jeffrey Magnuson and whoever else is behind this fraud is pitching to people in order for them to hand over cash in lumps of $100,000 at a time to a minimum of $35m and a maximum (God forbid it) of $370m, which according to the pitch would be collateralized on the property itself! There is of course some vague promise of buying insurance coverage for the bonds, but by the time that one becomes a questioned issue these scamsters will be in Tahiti.

Here, for example, is an image that Peggy Dodson is using in her fraudulent activity that tries to convince people the bonds offering is all on the level. I love that "not created by Bloomberg" bit!

Hmmm...I wonder whether the Mayor of
New York knows about this screenshot?

But if that isn't enough to convince you yet, there's even more evidence of fraudulent activity. Besides the fact that Peggy Dodson and Jeff Magnuson have refused on several occasions to hand over an mining engineer's report on the Gold Pan property that is supposed to exist, the person named as "Lead Mining Manager" is also falsified.

Your author has been in contact this weekend with the man named in the file. He is a bona fide, legitimate and professional mineral economist, geologist, minerals appraiser and valuer who we'll call 'TE' here, as I don't want his honest and good name appearing in Google searches concerning this fraud. When I mailed TE and asked him if he'd ever heard of Dodson a reply came quickly and read (extracted):

I have had a few brief exchanges with Ms Peggy Dobson (sic) by telephone and e-mail over the last few months about doing some work for her. These were about an association placer claim in Kern County, California. The discussions have not reached the stage of a contract for work being drafted. Some mention was made by her initially of having me be her mine manager, but as of yet, I have not been retained in any role by her.

I then sent TE the pitch PDF that you can download on that link above (or here if you like), explained a little about the highly dubious numbers being used by Peggy Dodson and pointed out that his name and professional biography was being used to sell the scam. He wrote back (excerpted):

Thank you for bringing this very unsettling use of my name to my attention and for sending me the entire document. I will forward your message with the attachment to my attorney today.
So the only other member of management aside from Peggy Dodson listed in the pitch for this debt raising has no idea he'd been named as 'Lead Mining Manager' and as soon as he'd heard about this immediately contacts his attorney to make sure his name isn't sullied!

We suspect that Peggy's plan is to offer this business opportunity to people that have little or no idea about mining, because if you take a look through the pitch sheet you'll note enormous gaping holes in correct disclosure all over the place. However, Peggy made a bad mistake last week and sent the pitch to somebody that actually knows about mining. Even worse for Peggy, that person happens to be a friend of IKN and forwarded the pitch to your humble author, already noting that it was the strangest scam he'd seen for quite a while. Therefore full kudos is deserved to the IKN friend who will be making sure the SEC and/or the Attorney General knows about Peggy Dodson and her bright ideas for wealth in the very near future.

So if you get approached by Peggy Dodson or Jeffrey (Jeff) Magnuson or anyone else offering you the deal of a lifetime tied to the Gold Pan placer gold deposit in Kern County California, run away fast. This is a scam, it's fraud, it's illegal and if you give them your money you will never, ever see it again. IKN, signing out.


Peru's narco-corruption stories just get better and better

Front page of Peru's 'La Republica' today

Y'know I thought I wouldn't be revisiting this subject after last week's post that pointed to not one but three cases of corruption between the drug barons of Peru and the judiciary in their sordid pockets, but here we are again. The reason is this story that's almost too brazen and bizarre to be believed.

Today Peru's national daily 'La Republica' broke a story about our old pal Luis Valdez, the narco capo of the Ucayali Amazon basin region of Peru, the very same Luis Valdez that has been featured on several occasions here at IKN because he's knee deep in the cocaine trade, he ordered the killing of an investigative journalist and then recently got let off the charges by a compliant judge in highly dubious circumstances.

Today's story tells of the judge that, back in late 2005, originally ruled that Valdez should be liberated from the charges murder and ordering the assassintion of the journalist Alberto Rivera. thus Valdez was set free and, quite literally, got away with murder. The now ex-judge's name is David Zevallos and he has now turned up in the public spotlight again because...wait for it...he's now the president of the electoral committee of the Ucayali political party "Todo por Ucayali", whose leader is none other than Luis Valdez!

In other words, not only has Valdez been let off the charges and let out of jail again, he's also going to run for public office in his region again, but to cap it all the compliant judge that absolved him of charges in 2005 is now his political campaign manager!

But of course the cocaine problem is all Hugo Chávez's fault, right?

The IKN Weekly, out now

bet this one didn't surprise you, B :-)

IKN66 has been sent to subscribers. Just thought I'd tell you.