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9/11/10

Cockroach bashing update

Plenty of feedback from yesterday's post that asked to to take action, write to the BCSC and make your voice heard in the fight against Canada's sleazy Capital Markets practices. Here's an example of a mail one reader, who'll we'll call at their request "subscriber from Canada", wrote in to the BCSC:

Dear Ms Rose
This is to express my support for your initiative to increase disclosure and improve the transparency of financings on the TSXV. Publishing the names of private placees is an important step in the direction of improving the available information for investors which will have a direct impact on the reputation of the Vancouver Exchange. 

As you are well aware over the years the TSXV has had mixed reviews regarding transparency and integrity. This is a real detriment to a potential huge competitive advantage in the global marketplace for resource companies. Canada is the world centre for listings and financings of mining companies. Many of these start out as TSXV listed juniors. This is where the market action is today and for the foreseeable future during the ongoing bull market resource cycle. So integrity of the exchange listings and diligence on the part of the Regulator is of prime concern to investors. Improvement will lead to additional listings, financings, volume and economic growth for BC and Canada.
 
Personally the majority of my investments are in the mining/oil & gas sectors and many of those are TSXV listings. One of the biggest investing issues I face is filtering out the less reputable listed companies some of which can only be classified as outright scams.
I encourage you to pursue this issue and use your influence to overcome any resistance you encounter in your drive to establish the TSXV as the premier exchange for junior resource listings in the global market.

Let it be an example to others. WRITE THAT MAIL!

Twitter follows for good LatAm insight in English

Here are four to put on your Twitter follows list to get good views and news of LatAm issues, all chosen because they tweet in English, tweet regularly and tweet smart.

@Bananamarep: That's the wonderful Bananama Republic on Twitter. Best Panama source possible.
 
@adamisacson: Adam was the brains behind the groundbreaking  'Plan Colombia and Beyond' blog and now works at WOLA covering the region. This twitter account is his own personal views on things.
 
@adriaanalsema: The editor of the great source, Colombia Reports. Adriaan feeds CR and adds his own views on things.
 
@MexicoTimes: This EngLang news media on Mexico is a regular tweeter. Covers several sources and a good way to check pulse in MexNews.

Quote of the day


"How did "9/11 victim" become sloppy shorthand for "white Christian"?"

Alicia Torres, wife of 9/11 victim, here.

A room with a view (part 21)

Buenos Aires Microcentro, photo showing the building this author was sitting in nine years ago to the day. So much seems to have changed that the changes are probably illusory. But events? Yes, they've happened.

For the record, I can't remember where I was on September 11th 1973.

9/10/10

The Friday OT: Boomtown Rats; She's So Modern

Your humble scribe is knocking off early today, going to a have a plate of fish in his fave restaurant and thusly leaves you with slice of rockin' vintage punk.


My elder sister bought The Rats' 2nd album Tonic For The Troops way waaaaay before anyone had ever heard of Live Aid or Sir Bob or The Fine Art of Surfacing (crap follow-up album) or I Don't Like Mondays. It was a killer disc (Like Clockwork, Me and Howard Hughes, The Normal People, Rat Trap, etc) and she never knew how much I played it while she was out the house. But She's So Modern was the standout, the one that got repeat-played by picking up the needle and putting it back down at the start again. Above is the band in full flow on Top of the Pops, circa 1978. Great performance, great tune, great memories.

Gold-Ore Resources (GOZ.to)


Here's how the fundamentals report on Gold-Ore Resources (GOZ.to), published in IKN65 on August 1st, concluded (target price removed):
"NOBS recommends Gold-Ore Resources (GOZ.to) as a speculative buy and sets a three
month target of XXXX, representing a XXXX upside to today’s 52c price. We will add the
company to our ‘Stocks to Follow’ list as of this week and your author will open a long position on the stock once his 48 hour self-imposed waiting period is up (i.e. Wednesday onwards)."
Oh look, we're 32.7% up since then. And here's the conclusion of what the Flash update on Tuesday September 7th at 1:40pm told IKN Weekly subscribers, just after GOZ.to had released its quarterly production figures and the stock was trading at 60c:
We reaffirm our short-term target for GOZ.to at XXXX, representing a XXXX upside from current prices. This stock offers a good, short term trading possibility.

Oh look, we're 15% up in the three days since then.

Just sayin'.

Help shine a light on cockroaches

This humble corner of cyberspace wants to make the scam-ridden Canadian markets a better place for retail investors to operate and, what with the way people keep coming back to read the blog, it's pretty clear that there's a lot of people who want the same in interwebnetpipesland.

So this post addresses you, fellow scumball fighters, because its time for you to take 15 minutes out of your life and write a mail to help the cause. Here below is the paste-out of this report over at Stockwatch (it's important you read the whole thing, so apologies to Stockwatch for repeating the whole article) and at the end there's an e-mail address that asks for your feedback on the plan to force juniors into disclosure on this issue. 

WRITE THAT MAIL, PLEASE

Seriously, write it. Tell the BCSC that this is a great idea. Tell them why. Tell them your fed up with the uneven playing field. Tell them the scamsters and cockroaches have to be exterminated. Applaud them for this initiative. Write what you want in the way you want, but make the effort, people. This is the kind of thing that will really matter in the long run and, if successful, will encourage the authorities to clamp down further on the shady side of Vancouver finances. So read the following, enjoy, note the bit I've highlighted in red at the bottom and then do something about it. Thank you for your attention.

BCSC looks at making private placees public

2010-09-09 22:01 ET - Street Wire
by Mike Caswell

Hidden buyers in private placements may be visible to the public for the first time in seven years, if a plan by the B.C. Securities Commission goes ahead. The regulator announced on Thursday that it would be seeking public comment on its proposed disclosure procedure whereby the names of all placees would be publicly available.

The proposal marks a reversal of the BCSC's policy of hiding the names of individual private placement subscribers. Today, even a freedom of information request will only receive the names of corporate placees, not individuals. In April, 2003, then-chairman Doug Hyndman ordered the commission to stop making the data available, citing the privacy of investors. Since then, the only names released have been those of insiders and brokerage employees (and corporate placees to freedom of information requests). Mr. Hyndman's change was a significant loss of information for the public, as it stripped investors of the ability to discover who was backing many "dicey deals," says Gordon Robertson, a market follower.

Many of the buyers in private placements are offshore entities, but ascertaining the true ownership of shares bought by those entities will still not be possible. In its proposal, the BCSC will, however, require the name of a contact person for institutional buyers. This part of the policy change would be of marginal benefit to investors because in the case of offshore banking companies, for example, the name of a contact person, an employee, does not reveal the name of the buyer represented by the institution. On the other hand, information as to the beneficial owners has never been available and was not available under the previous disclosure regime of before seven years ago.

The Stockwatch editor sees the return of the data as good news for the investing public in B.C. He says: "In the past, investors have pored over these records and as a result have been able to determine the quality of individuals financing the company, whether good, bad or indifferent. While this is often a case of one man's meat is another man's poison, the point is the investor has the information and that is what is important. You know -- full, true and plain disclosure."

It is not entirely clear why the BCSC has changed its mind about the policy now, after seven years. According to Martin Eady, the commission's director of corporate finance, staff received instructions from chairman Brenda Leong to take another look at the policy. Ms. Leong has received much criticism, particularly from The Vancouver Sun's David Baines, for keeping the data hidden. It has been one of his long-term campaigns on behalf of B.C. investors.

The BCSC will address the ostensible reduction in privacy by keeping the addresses of investors out of the forms. "We believe that's the proper balance," says Mr. Eady.

So far the proposal remains just that, a proposal. It still must go through a process that includes feedback from supporters and opponents. One supporter is the Stockwatch editor. "Should this proposal be enacted, it will amount to the official end of what I have always thought of as the BCSC's cockroach policy. 'Cockroach' because of the insects' dislike of light," he says. "If those cockroaches scurry off to other jurisdictions that will keep their presence a secret, that is a win for B.C."


Assuming the policy goes ahead, the data should be available early in the new year. "Investors who support the idea should tell the commission of their support and explain why it is important to them," says Stockwatch's editor. They may respond to the policy by sending an e-mail to Leslie Rose at the BCSC. Her e-mail is lrose@bcsc.bc.ca. The deadline for submissions is Nov. 9, 2010.

Mail exchanging on Mercer Gold (MRGP.ob)

Reader 'TK' sent this mail into IKN Nerve Centre yesterday afternoon:

Here's another laughable company for your humble corner of cyberspace. 
Mercer Gold   MRGP.OB 
20+ million market cap with an option on a property in Colombia that has 249 soil samples still awaiting results!!!!

But little did TK know that we'd already given a headsup on this stock. Here's the reply sent back.

Hi XXXXXXX 
This from the subscription IKN Weekly issue 59, dated June 20th:

Mercer Gold (MRGP.ob): A Colombia short
As mentioned at some point on the blog last week, there are a small number of subscribers that are always on the lookout for an OTC mining short so here’s one that fits the bill. With a name change from “Uranium International Corp” to “Mercer Gold” (MRGP.ob) just finalized, this company has recently restructured debt, added new personnel and is looking to explore the recently acquired “Guayabales” gold concession in the Caldas province of Colombia.

The property is assumed to sit on strike from the Marmato mine recently taken over by Medoro Resources (MRS.v) just a few kilometres away and is currently operated on a small scale (around 50 tonnes per week) by artisanal miners working in co-operative. MRGP has 76.1m shares out (May 2010, after the recent company restructuring), no debt and around $2m in cash at treasury thanks to an April 2010 private placement at 50c that raised all the $2m currently held. According to this passage of the recent company 10-K, this is how the cash is due spent:

Based on our current plan of operations as set forth above, we estimate that we will require approximately $1,000,000 to pursue our plan of operations over the next twelve months if we complete Phase I only, but approximately $2,000,000 over the next twelve months if we also proceed to Phase II during that time frame. As at February 28, 2010, we had cash of $Nil and a working capital deficit of $1,107,660. Subsequent to year end, the company closed a private placement which raised $2,050,000 which will be utilized in the Phase I and II programs. However, we may require additional financing to pursue our plan of operations over the next twelve months. There can be no assurance that we will obtain any additional financing in the amounts required or on terms favorable to us. If we are unable to obtain additional financing, we may have to re-evaluate or abandon our business activities and revise our plan of operations. The Phase 1 exploration includes initial exploration, with Phase 2 evisaging a limited diamond drilling campaign on site.

The stock is open for promotion and will try to jump on the Colombia gold bandwagon, but the management team put together has an air of improvisation about it (new recruit James Stonehouse ran the local ops of the trainwreck known as Ascendant Copper/Copper Mesa, kicked out of Ecuador due to bad practices) and inquiries made by this author regarding the property have been met with comments such as “skinny veins.....ok for smalltime producing....will probably be good for a flashy NR headline....not a real mine”. So once the $2m is spent and the pumped-up headlines are shot, MRGP is 100% certain to be adding paper in return for extra cash before too long. The next six months will provide no great news and the drill campaign won’t see a result until 2011 minimum, which is a long time for junior pumpers to be holding their breath. Add in the already dubious style of promotional news releases (e.g. we get to hear that the company has received a 43-101 technical report on the property but we’re not allowed to see it ourselves) and that overriding “OTC smell” around the stock and it all points to a decent place to balance your port with a short. An obvious one, folks
We even mentioned it in a quick update in IKN70, last weekend. Just sayin'.....

Charts of the day are....

....all about Chile's IPSA index.

The IPSA's been rocking recently, as you can see on this five year chart.


But check out how well it's been doing versus the local competition this year, too.

And just out of interest, it sure does seem to track gold, no?

DYODD, dude

9/9/10

Constitution Mining (CMIN.ob) running short of suckers, part deux

In this post dated August 12th we noted the problems Constitution Mining (CMIN.ob) was having in raising the capital it needs to get out of its very sticky financial hole. At that time, the BSsers at CMIN has only managed to get U$1.72m of its planned U$8.125m raising covered, which is a long way short of the goal and doesn't even cover its present working capital deficit, let alone get on board the cash it needs to close the silly deal with silly Seabridge. 

So let's see how CMIN.ob has got on in the month since that last post, according to today's SEC filing:

Oh Dear. Oh very very dear. Another month gone by in its desperate campaign to raise enough cash to stay afloat and a paltry U$1.96m totalled. In other words, CMIN has only managed to raise another U$235,693 these last four weeks and still has U$6.17m left to cover. Once again evidence is mounting that this smoke'n'mirrors operation has run out of suckers to bilk.
And how much of a problem is this lack of cash at CMIN? Well let's check the assets as at 2q10:
Nearly all CMIN's asset 'value' (term used loosely) is in mining properties and is of dubious worth at that. Meanwhile, useful cash is still at a bare minimum. But it gets worse when you check out the debt position as reported last quarter. Oh lookie! A sudden spurt in liabilities!

So here's the working capital, showing the difference between current assets and current liabilities:

As you see, the cash raised means it's still underwater. Time's running out, Stocker....as is your share price. Mind you, it hasn't stopped CMIN from awarding stock based compensation of nearly $2m to its insiders during the first half of 2010. Scamsters iz what scamsters duz, y'see. DYODD, dude.

WOLA on the corrupt state of Peruvian justice

This below is from here

WASHINGTON OFFICE ON LATIN AMERICA
Promoting Human Rights, Democracy, and Social and Economic Justice in Latin America
September 9, 2010
Washington, DC
NEW DECREE IN PERU WILL LEAD TO STATE-SANCTIONED IMPUNITY:
WOLA SENDS LETTER TO PERUVIAN PRESIDENT URGING THE DECREE'S REVERSAL
Today, the Washington Office on Latin America (WOLA) sent a letter to Peruvian President Alan García expressing its profound dismay regarding Decree Law 1097 that applies time limits to judicial investigations and statutes of limitation to human rights violations committed during Peru's internal armed conflict. The decree will effectively put an end to many ongoing human rights investigations and trials.  In the letter, WOLA urges the Peruvian government to immediately repeal Decree Law No. 1097.
"The decree is basically a 'get out of jail free card' for individuals who committed systematic atrocities against civilians, including massacres, tortures, forced disappearance," said Coletta Youngers, WOLA Senior Fellow and a prominent advocate for human rights in Peru for more than two decades. "The decree is an affront to the victims of the internal conflict and their family members, who for so many years have fought for justice,"  she said in reference to Decree Law No. 1097, which went into effect on August 31st, 2010.
"This decree is a major step backwards in Peru's efforts to promote truth and justice," said Jo-Marie Burt, one of the leading international experts on human rights in Peru and author of Political Violence and the Authoritarian State in Peru. "It amounts to state-sanctioned impunity. This decree law blatantly violates international law, and the Peruvian government should repeal it immediately."
According to the WOLA letter, "The conviction of former president Alberto Fujimori to 25 years in jail for aggravated homicide, assault and kidnapping - which the judges referred to as crimes against humanity - represents a milestone in the struggle against impunity in Peru and across the hemisphere.  In contrast, the new decree law represents a major setback and could lead to the release of some individuals already convicted or on trial for human rights violations; of particular concern is the on-going trial of members of the Colina death squad implicated in the Barrios Altos and La Cantata massacres."
Another disturbing element of the decree law is that it also introduces regulations that provide for the conditional liberty of those prosecuted for grave human rights violations.
"Military and police officers being prosecuted for torture, forced disappearance and extrajudicial killings should not be granted the opportunity to go into hiding or flee the country, or worse, walk out of jail as if nothing ever happened," said Coletta Youngers, WOLA's Senior Fellow. "That is the wrong message to send to security forces."
For more information, including President Garcia's power to declare decree laws, contact:
Coletta Youngers, WOLA's Senior Fellow at 301-404-1905 or
Jo-Marie Burt, WOLA Advisor and Professor at George Mason University at 703-946-9714. For additional commentary on Decree Law No. 1097 tune in to Jo-Marie Burt's recent audio podcast.

Trading Post (lentils for lunch edition)


Golly gee whizz, is it nearly a week since the last Trading Post? I had no idea time was slipping by, so by poppylar request here we go:

B2Gold (BTO.to) down 3.3% at $1.74 and has been whupped down from its $1.90+ numbers of the previous fortnight. We'll be taking time out and talking about the trading patterns in BTO in IKN71, out Sunday.

Constitution Mining (CMIN.ob) down 10% at $0.62 and the scam begins to move towards its real value. Nothing.

Gold-Ore Resources (GOZ.to) up 1.6% at $0.65 on decent volumes and bucking the general downtrend today. This is likely due to being pumped by a man who should be writing his prose from inside a prison cell, Thom "Never-Met-A-Junior-I-Didn't-Like" Calandra.

Fortuna Silver (FVI.to) up 3 pennies at $2.66. FVI got whacked yesterday down as low at $2.56 on some kind of reachdown, but the deep bargain prices didn't last for long. Now simply trading at a bargain price.

Antares Minerals (ANM.v) down 3.6% at $3.78. This star-performing copper junior saw a $4-handle for a while yesterday and early this morning, but nothing goes up in a straight line and ANM has decided to correct along with the most of the market. ANM mgmt is currently marketing in the UK, trying to rustle up some Limey dough probably.

Scammon Gold (GRS) down 3.0% at U$6.70. Worth much less.

Ah, memories.....

Who remembers this, an Op-Ed written by The Hawaiian in April 2009 as soft soap bullshit just before the Summit of the Americas that month? Here's the bit about what The USA was going to do to help that violent druggyborder thing (IKN provides the red ink):

"Just as we advance our common prosperity, we must advance our common security. The United States will strongly support respect for the rule of law, better law enforcement, and stronger judicial institutions. Security must be advanced through our commitment to partner with those who are courageously battling drug cartels, gangs and other criminal networks throughout the Americas. And our efforts start at home. By reducing demand for drugs and curtailing the illegal flow of weapons and bulk cash south across our border, we can advance security in the United States and beyond. And going forward, we will sustain a lasting dialogue in the hemisphere to ensure that we are building on best practices, adapting to new threats, and coordinating our efforts."

He talk talky, he no walk walky. Or if you like, more bollocks talked by a depressingly poor President. Or as Jonathan Schwarz put it in A Tiny Revolution yesterday, "I have to admit, I may have once again underestimated the ability of the Democratic Party to make the world a much, much worse place. Well, at least it will be exciting!".

News Roundup (We're shifting the whispering sands)


Hemispheric Brief calls the ruling 'fascinating' and this humble corner of cyberspace agrees. Costa Rica now makes internet access a fundamental human right. Gotta love the ticos.
Studmuffin won't have to complain about the editorial line in this paper, methinks. Ecuador's government this week launched its own pro-party daily called "PP El Verdadero" (the 'true thing' or the 'reality' I suppose, tough to nail the translation in context) a tabloid-style paper that appeals to the masses and will be according to the publishers, "....a different newspaper, with optimism, positivity, hope, where we analyze issues from a humanist point of view". He also says that the paper won't be a simple gov't mouthpiece. Yeah right.

Mo' Ecuador with Correa in Korea. After hosting Bolivia's Evo just a few days ago, South Korea rolls out the red carpet for the Muffin Man who's touring the factories and seeing what Seoul could do for Ecuador's growth profile. Thusly South America continues to divert its eyes from the North and look to the other side of the Pacific....and the USA still thinks it's in charge. Rude awakenings in the pipeline, gringos.

Yesterday's sickest joke? President Twobreakfasts is going to declare Peru free of illiteracy in 2011, which is the kind of thing that could only be said by a moron who cares much more about image than actually getting out there and doing something constructive for his country. There is no way this can be true, just ask anyone in the field who understands the reality of the situation. But it doesn't stop the bullshit from spewing out his face.

And to wrap up, this humble corner of cyberspace would like to declare that it doesn't give a shit what Fidel thinks of Cuba's economic model or what Hillary thinks of Mexico'10 vs Colombia'90. Both issues are LatAm-For-Gringos fodder only.

I don't know about Black Hotels, but Black Goldmines no worries

 Panoramic view of the Comarsa Mine, La Libertad region, Peru 
(click to enlarge)

Felix Salmon today waxes lyrical about the new John Le Carré novel and excerpts a bit about what Le Carré calls "Black Hotels", a way of laundering money. Salmon asks whether such a money laundering scheme is possible and offers up the novel snippet as context:
‘Would somebody mind telling me what a black hotel is?’ Matlock demanded of the air in front of him. ‘I happen to take my holidays in Madeira. There never seemed anything very black about my hotel.’
Fired by a need to protect the subdued Hector, Luke appointed himself the somebody who would tell Matlock what a black hotel was:
‘You buy a bit of prime land, usually on the sea, Billy. You pay cash for it, you build a five-star luxury-hotel resort. Maybe several. For cash. And throw in fifty or so holiday bungalows if you’ve got the space. You bring in the best furniture, cutlery, china, linen. From then on your hotels and bungalows are full up. Except that nobody ever stays in them, you see. If a travel agent calls: sorry, we’re fully booked. Every month a security van rolls up at the bank and unloads all the cash that’s been taken in room rentals, bungalow rentals, the restaurants, the casinos, the nightclubs and bars. After a couple of years, your resorts are in perfect shape to be sold with a brilliant trading record.’
No response beyond a raising of Matlock’s avuncular smile to maximum strength.
‘It’s not only resorts either, actually. It can be one of those strangely white holiday villages — you must have seen them, trickling down Turkish valleys to the sea — it can be, well, scores of villas, obviously, it can be pretty well anything that’s lettable. Car hire too, provided you can fudge the paperwork.’
Well Felix (and others), this humble scribe isn't so sure about 'Black Hotels' but is more confident of the existence of 'Black Goldmines' such as the one photographed above, the Comarsa mine in Peru owned by the notorious Peruvian narcotrafficking family, the Sanchez-Paredes (who, thanks to their corrupt ties with the APRA party, never seem to get thrown in jail). Here's how the laundering works (well, part of it at least):

1) Produce your cocaine
2) Transport your cocaine across the porous Amazon jungle border between Peru and Brazil
3) Exchange your cocaine at an agreed rate for gold produced by Brazil's "Garimpeiros" the informal gold miners there.
4) Smuggle the gold back into Peru and take it to your mine
5) Add the Brazilian gold to the production pile from the supposedly working mine.
6) Declare all the gold, the Peruvian and the Brazilian product, as "Made In Peru" and run it through the company books.
7) Et Voila! Washed, rinsed, tumble-dried and ironed with a touch of starch in the collar.

For more details, Google "Sanchez-Paredes", "Gold", "Cocaine", "Trafficking".

Chart of the day is.....

...the Gold/Silver ratio.

I fail to see anything out of the ordinary here, nothing that wants me to suddenly switch to a heavier Ag exposure, nothing that anyone outside of the foam-mouthed mass of conspiracy theorists we know as "the silverbugs" would jump on and shill. Business as usual until sub 60X.

9/8/10

Understanding Marin Katusa of Casey Research

"Thanks" to two kind readers mailing in, this evening we're offered up the public image of what Casey Research would like you to believe about the charlatan Marin Katusa right here as he buddies it down with that other Casey bullshit merchant Louis James.

How Katusa really operates is better explained here. Unaccountable to anybody, total cherrypicking of results, sneakily sidestepping responsibility, forgetting the bad losses he causes amongst his sheep, whining and pathetic. In other words, just another typical Casey lipflapper.

So do me a favour, kind and gentle IKN readership; don't send me links to this company's bullshit lies any longer cos it's bad for my blood pressure and I'd prefer to live in ignorance about what these liars do and say to rip off their naïve audience.

love the sharkfin suit, Rupert

Thanks to @felixsalmon and the fact this humble scribe was fiddling around on twitter at the moment the RT came through (which isn't usual), you get to enjoy this wonderful imagefest as well.

Mining PRs and the Ottotrans™, Part 24


The Ottotrans™ is back with Baja Mining (BAJ.to) once again le feature du jour.

This is what they wrote:

VANCOUVER, BRITISH COLUMBIA--(Marketwire - 09/08/10) - Baja Mining Corp. ("Baja") (TSX:BAJ - News)(OTXQX: BAJFF) is pleased to announce that its 70% owned project company, Minera y Metalurgica del Boleo S.A. de C.V. ("MMB"), has now received confirmation from the ECAs and the Commercial Lenders (both defined below) and from the Korea Development Bank that all necessary credit approvals have been obtained in relation to the project financing facilities (the "Facilities") for the development of the Boleo project (the "Project") in Mexico. Total credit approved Facilities now amount to US$823 million, the entire amount of debt financing required to develop the Project. The amounts to be provided by each lender under the Facilities are detailed in the table below.
The Facilities will be provided, subject to satisfaction of customary project financing conditions precedent, by (i) a group of export credit agencies (the "ECAs") comprised of The Export-Import Bank of the United States and Export Development Canada; (ii) the Korea Development Bank (all mentioned in the press release dated 29 July 2010); and by (iii) a group of commercial banks comprised of Barclays Capital (the investment banking division of Barclays Bank PLC), Standard Bank plc, Standard Chartered Bank, UniCredit Bank AG and WestLB AG (together, the "Commercial Lenders"). MMB is working with the Commercial Lenders to arrange US$100 million of loans, consisting of US$50 million of senior project and US$50 million of senior cost overrun facilities, and to provide the proposed copper hedging program.
The combined Facilities total US$823 million. This will be the entire amount of required debt financing for Boleo.
 

----------------------------------------
        PROJECT FINANCING (US$ m)
----------------------------------------
EXIM Bank                            419
----------------------------------------
EDC                                  150
----------------------------------------
KDB                                   90
----------------------------------------
Commercial Lenders                   100
----------------------------------------
Total                                759
----------------------------------------
        SUBORDINATED DEBT (US$ m)
----------------------------------------
KDB                                   64
----------------------------------------
TOTAL                                823
----------------------------------------
Drawdown of the project financing will be subject to a number of standard conditions precedent, including completion of satisfactory legal documentation, implementation of a hedging program and expenditure by Baja and its Korean partners of their required equity contributions. Under the facility documents, MMB will be required to enter into offtake agreements for at least 70% of copper and cobalt production for the first 10 years of production and to enter into the proposed copper hedging program. MMB has finalized the terms of the 70% offtake arrangements with a major international trading entity.
Baja and its Korean partners are working with the ECAs, the Korea Development Bank and the Commercial Lenders towards finalizing all such necessary documents as required for initial signing of the Facilities to occur in the near future.
MMB is being advised on the financing by Endeavour Financial International Corporation, and aims to close the transaction and recommence construction at Boleo as soon as possible.

And This Is What It Means:

VANCOUVER, BRITISH COLUMBIA--(Marketwire - 09/08/10) - Baja Mining Corp. ("Baja") (TSX:BAJ - News)(OTXQX: BAJFF) is pleased to announce that its 70% owned project company, Minera y Metalurgica del Boleo S.A. de C.V. ("MMB"), is really really close to getting the money it needs to build the Boleo mine, honest like. I mean, you think we were close last time we announced that we were close back in July? Oh maaan, that's not nearly as close as the close we are now.

Meanwhile Baja is determined not to go into the details of the offtake agreement and the hedge program, because the company management team isn't that freakin' stupid and has no intention of revealing how bad this deal is going to be for the retail sheep at this stage in the game. Baja much prefers allowing more time for insiders to continue their non-stop selling of stock at  the moment and allowing people without intimate knowledge of the deal to live in some sort of false hope for a little while longer. Tequila reposadas served, the end.

Peru is a third world country according to Alan García

Back in April this year, when the illegal mining that's destroying the Peruvian Amazon jungle managed to keep the world's attention for more than 15 minutes, President Twobreakfasts said that (we quote) "....the illegal activity (of Madre De Dios gold mining) makes us look like a backwards, third world country and leaves open the possibility to be condemned internationally for allowing this chaotic activity to take place." He also explained how..."his government would stop the existence of the informal mining that was poisoning rivers, destroying the environment and making slaves of the youths that were dragged into the sector by the large operators."

Since then, Madre de Dios gold production has gone straight back to where it was before the headlines got made.
click to enlarge

Not only that, but Peru's gold mining industry, seeing production drops in its formal mines like Alto Chicama relies even more heavily on this scandalous export to maintain its economy. Madre de Dios gold now accounts for nearly 11.5% of all gold produced in the country.

click to enlarge

Third world is as third world does, Mr. President, and another thing that Peru has in common with the other third world countries is the bullshit demagogue liar and shyster it has as Head of State. But who gives a damn when we can all shout ¡VIVA INVESTMENT GRADE! as one voice?

Hey junior explorers, treat me like an idiot please

 minute 1:20 for the song (but the intro is worthy of your time)

So far this morning your humble scribe has received 61 news releases from junior mining companies telling me just how wonderful and dynamic and thrusting stuff they're being. All before the opening bell. And this has nothing to do with it being just after Labor Day and with gold nudging highs, oh no...it just happens that you have marketworthy news all of a sudden and it's just sheer coincidence, innit?

So hey, do me a favor all of you and just

Watching Edgewater (EDW.v)


Your author has had Edgewater Exploration (EDW.v) on the radar ever since the company had the sagacity to hire George Salamis as its head honcho earlier this year during its start-up phase, so the TSXV filings this morning caught the eye. There's the one about the purchase of the Rio Narcea assets, but there's also the terms of the funding placement.

EDGEWATER EXPLORATION LTD. ("EDW")
BULLETIN TYPE: Private Placement-Non-Brokered
BULLETIN DATE: September 7, 2010
TSX Venture Tier 2 Company

TSX Venture Exchange ("Exchange") has accepted for filing documentation
with respect to a Non-Brokered Private Placement announced August 12, 2010:

Number of Shares: 10,413,000 Subscription Receipts. Each Subscription Receipt will automatically convert into a unit consisting of one common share and one half of one common share purchase warrant upon satisfaction of certain release conditions, including receipt of final Exchange approval of the Company's recently announced acquisition of Rio Narcea Gold Mines S.L. pursuant to an agreement with Lundin Mining Corporation.

Purchase Price: $1.00 per share

Warrants: 5,206,500 share purchase warrants to purchase
5,206,500 shares

Warrant Exercise Price: $1.40 for a three year period

Number of Placees: 54 placees

Insider/Pro Group Participation:

Insider equals Y/
Name ProGroup equals P/ No. of Shares

George Salamis Y 20,000
Silka Investments Ltd. P 50,000
Catherine Seltzer P 25,000
Thomas Seltzer P 25,000
Roger Poirier P 1,000,000
Darren Wallace P 260,000
Mike Harrison P 50,000
Chris Roy P 150,000
Kevin Williams P 150,000
Chris Burchell P 30,000
Jeff Kennedy P 60,000
Patrick Soares Y 100,000
Cormark Securities
Investment Fund P 1,000,000
Ryan King Y 10,000
Michael Marosits P 60,000

Finders' Fees: $249,912 and 249,912 warrants payable to Cormark Securities Inc.
$156,195 and 156,195 warrants payable to PI Financial Corp.
$124,956 and 124,956 warrants payable to Canaccord Genuity Corp.
$93,717 and 93,717 warrants payable to Haywood Securities Inc.

- Each warrant is exercisable at a price of
$1.10 for an 18 month period.

Pursuant to Corporate Finance Policy 4.1, Section 1.11(d), the Company must issue a news release announcing the closing of the private placement and setting out the expiry dates of the hold period(s). The Company must also issue a news release if the private placement does not close promptly. (Note that in certain circumstances the Exchange may later extend the expiry date of the warrants, if they are less than the maximum permitted term.)
So Eric Sprott likes Edgewater? (by that i mean both Cormark's million and the million under Roger Poirier's name). Food for thought. DYODD, dude.

Disclosure: No position in EDW.v

What a gold all-time high would mean

It'd mean that even Glenn Beck is making a profit.

Chart of the day is.....

...the year-to-date performance of the IKN Rogue's Gallery stocks:


There are so many crappy mining companies and tickers out there that get SpecialFeatured™ on IKN that it's tough to keep count, but the ones on this list are the special ones, if you like. They all get ongoing coverage of their general nastiness and they all are the ones that get "really dude, don't go near this dog" slapped on them for very solid fundy reasons. They also vary in size from the scam explorarion start-ups like Affinity and Constitution to the middling/big producers like Gammon, Jaguar and Minfinders.

So here above is how they've got on so far this year, with the gold ETF (GLD there as our benchmark, too.

Top performer is Dorato Resources (DRI.v) that's actually put in a 17% profit this year and generally thumbed its nose at IKN. It'll still all end in tears, though....

Second comes GLD, just scraping above breakeven. Not very promising for the others, is it?

Third place is our old friend ECU Silver (ECU.to), a bronze that will surely warm the cockles of the pumpo paid promoter of this stock, 'Mexico Mike' Kachanovsky. Hey Mike, your owners are only 17% down so far this year. Getting better all the time, as in 2009 ECU lost 18%. Does this mean we can look forward to ECU.to only losing 16% in 2011? Time will tell.....
Fourth place is Minefinders (MFN), last featured here in August when its latest quarter was reviewed. MFN has actually managed to put on 3% or 4% since but has largely missed out on the sector's August rally and for good reason; it's a dog.

Fifth place is Gammon Gold (GRS) which has also seen extended coverage of its pisspoor results all year, including the way top management has been so darned lucky with the timing of insider sales.

Six is Jaguar Mining (JAG), the gold world's top proponent of OPUD. Its latest quarter was also so bad it was cause for derisive humour and we cut'n'diced in this post at the time.

Next in position seven is Constitution Mining (CMIN.ob), the epitome of Stone Soup. I'm actually surprised this one is still floating around the 70c range, what with owning nothing and having a silly number as its price/book value ratio to this day, but the year's performance is satisfactorily crap so far.

Then we come to the real dog performers. Ecometals (EC.v) is in next to last place, is no less than 90% down on the year (that's Enron territory) and is the worst type of scumball scam imaginable. Crooks leading sheep with promises of great things and hiring paid pumpers to fill empty heads with dollar signs....as they've always done throughout the history of this awful company coming up with zero zip nada nothing.And let's not forget how the insiders quietly sold at the top and late filed their trades, too. Disgusting people.

But the worst of the Rogue's Gallery (or the best, depending on how you look at these things) is Affinity Gold (AFYG.ob) (AFYG.pk). First highlighted as the most obvious scam possible in December 2009, it's not even pretended to be a proper company since then. The controllers sold their worthless shares and then just let it drop.

So to sum up, in a year of bullishness over gold juniors, IKN has managed a seven-from-eight record of identifying and weeding out potential crap from your portfolios. DYODD, dude.

Disclosure: No position in any of the stocks mentioned and advice remains to "avoid" (i.e. just don't go near these dogs)

9/7/10

Living (and dying) Peru's election campaigns

News through from the Huánuco region highland Peru today regarding the campaigning style used for those wishing to be elected mayor of the local towns.

The Town in question is Chacabamba and as part of his re-election campaign, current mayor Vidal Figueroa decided in all his wisdom to run a "Who can drink more than me?" competition as part of his vote-winning push, with a S/150 (U$53.50) prize put up for grabs to the person who could drink the most hard liquor during the allotted time. There were 10 competitors and the winner turned out to be 50 year old local Hernando Lorenzo. Having claimed his prize, Lorenzo then went home and that same night died in his sleep due to the effects of the copious amounts of alcohol in his body, according to the official autopsy. Five other competitors were also hospitalized for the effects of alcohol poisoning.

This photo was taken of Lorenzo leaving his house next morning. He won't be able to vote for the Mayor, being dead and that. The mayor is now under investigation, orders of the local DA. 

South American Silver (SAC.to): Greg Johnson's lucky timing

Isn't it strange how these things tend to happen? Back On June 18th South American Silver (SAC.to), on the back of some sudden and strange hype from certain Canadian-based quarters that saw its stock jump quickly, ran a bought deal financing at 63c with Wellington West (a company that has its quarters based in Canada, if you didn't already know) that raised some $4m for the company.

This humble corner of cyberspace noted the deal in its subscription IKN Weekly that week and then a little later ran the excerpt here on the open blog in a post entitled "Why is South American Silver (SAC.to) so keen on running a bought deal financing this month?" . The reason the bought deal timing caught the eye were the little-known moves by Bolivia's government to change the rules for junior exploration miners there (the post linked above runs bulletpoints of the main initiatives). Needless to say, the mooted changes are not for the greater good of the Canadian juniors exposed to Bolivia like SAC.to.

So let's see how SAC.to has traded since that extremely fortunately timed bought deal went through:


Well riddle me ree, it's back to the sub-50c prices already! Waddya say Owly?

Oh, by the way SAC.to & Wellington West didn't manage to sell any of the overallotment connected to the June bot deal. Strange that, innit? DYODD, dude.

This week's freebie

This week we have a really good one to give away, a free year's subscription (yes honestly, it's totally free and they don't ask for credit card details and sneak in a payment after the year is up, either...free and no strings attached) to Oil and Gas Financial Journal.

Just click through, fill in the form and it's all done and dusted. Here comes the blurb:

subscribe
Oil & Gas Financial Journal

 
Oil & Gas Financial Journal provides petroleum industry managers, analysts and investors credible, useful information about the most important financial developments and oil exploration of their business. 
 
Oil & Gas Financial Journal provides petroleum industry managers, analysts and investors credible, useful information about the most important financial developments of their business. OGFJ brings to the worlds of petroleum finance and investment the type of authoritative coverage that Oil & Gas Journal gives to industry operations and technology. 
 
Geographic Eligibility: USA, Canada, Mexico, & Selected International 

Offered Free by: PennWell Corporation 

Other Resources from: PennWell Corporation

Venezuelan elections and Hemispheric Brief

Good news! Joshua Frens-String is back from his summer break and the return post at his blog, Hemispheric Brief, provides a great roundup of news and views on the Venezuelan legislative elections which happen September 26th. I'd excerpt a bit of JFS's prose here but it's tough to take any part out of the full context without losing the benefits of reading the whole piece. So go read the whole piece linked right here as it's today's required reading on LatAm.

And now it's back, put Hemispheric Brief on your RSS, your bookmarks or your whatever. A great and concise way of getting an EngLang, no-spin, no-BS view of what's happening in this neck of the woods.

Uranium update

From Scotia:

- Tradetech U3O8 +$1.25 to $46.75/lb: Well, the uranium spot price kicks off September with more volatility, clawing back some of last week’s fall in what can be only be dubbed a very active market (1.2mm lbs traded in the first 3 days of September).

Do with this info what you will and DYODD

Peru's IGBVL rally

click to enlarge

We keep an eye on the Peru IGBVL 'General' index because it's a nice way of checking on mining stocks and EM trends at the same time. We've had a rally in recent weeks that now sees the IGBVL at the top of its (roughly speaking) 14,000 to 16,000 channel which has remained on track for more than a year. Will this time be different? YOU BE THE JUDGE!

Shock Headline! Can of Corn Zeds pump Minera Andes! Suited Analyst Talks Book of Failing Reco! Short-Term Upmove Expected!


Jeesh, these guys are so predictable you can set your clock by them. IKN may begin a new series entitled "The Zed Fade" if this keeps up. Here's the pumpo excerpted in this morning's CanOfCorn Morning Coffee:
Minera Andes* (MAI : TSX : $0.97), Net Change: 0.11, % Change: 12.79%, Volume: 1,553,939 
Minera Andes: Its San Jose operation (49% MAI, 51% Hochschild) in Argentina continues to ramp up to full production. H1/10 is believed to have been the weaker half of the year as operational improvements were implemented, leading to the second half of the year carrying the better overall production. For FY10, Canaccord Genuity is expecting 192,000 oz AuEq from San Jose (49% MAI). This translates to just under 100,000 oz AuEq net to Minera Andes that at current Au Ag prices could translate to over $50 million in operating cash flow. Based on Canaccord Genuity’s price to cash flow (2011) basis Minera is trading at about 4.0x versus many peers that range from 8x to 15x cash flow. The company also owns 100% of a large Cu porphyry system (Los Azules) and maintains an excellent portfolio of Au Ag exploration ground in Argentina. Note: This portfolio is in the vicinity of Andean"

IKN back. MAI is marking up $1.00 in the pre-mkt right now (time of writing 8am). I kinda knew I'd likely be leaving $$ on the table by selling my MAI.to on Friday, but it's ok. For one thing I've made my moolah on the trade and for another I much prefer buying when the shepherds like them there Zeds are all STFU and selling when they are flogging the dead horses. A good trading philosophy doesn't get you out at the exact high points of any single trade, but it does make you a winning trader in the long term. Which do you prefer?

The gold/copper ratio

click to enlarge

This three year timescale chart that tracks the price ratio between an ounce of gold in dollars and a pound of copper in cents is probably a very interesting and insightful one for those people who think technical analysis works.

Chart of the day is.....

...an update of the race to be Mayor of Lima Peru, the main event in the Municipal elections coming up on October 3rd:

Since we last noted this race on August 13th, the then-2nd placed candidate Alex Kouri has been barred by the Peruvian election authorities from running because 1) he's a dumbass and 2) he wasn't a resident of the City of Lima. So with the field narrowed down we see the race developing into a woman vs woman contest (and this is good). Lourdes Flores (right wing) is still in the lead but Susana Villaran (centre-left) is closing in and making a real fight of it. In July Susana was polling 4%,  in early August 7.5%, now 21.7%. There's still a big gap to make up, but the trend is her friend. and it'll likely be much closer come the big day.

By the way, the August 16th numbers were those from the same IMA pollsters and they assumed Kouri would be barred, so it's a fair comparative. Data from the survey results here.

Final thought: If you're asking why you should care about a city Mayorial election in a South American country, it's a fair question of course. So the answer is

1) It's excellent news that two women are fighting out the top position and most likely the job itself. Good for South American politics, good for all of us to have women in power seats.

2) This election, especially the Lima vote, will set the scene for next year's big shebang Presidentials in Peru. Flores is rightwing, Villaran is centreleft (though her opponents are trying to paint her as more radical. Big clues to how 2011 will go, coming soon.

3) If 1) and 2) aren't enough for you then that's still fine by me, but perhaps you should ask yourself just why you're reading a blog about LatAm written by some dumbass South of the equator in the first place.

Have. Nice. Day.


UPDATE: Another reliable polling company publishes this morning and puts Lourdes on 33% and Susana on 27%. Spanish language link here.

9/6/10

Kinda tight market for junior funding still.....


...unless of course you have friends in the Canuck houses. Take for example the case of Azteca Gold (AZG.v), a tinycap explorer trying to raise capital in order to explore its projects. Here's how the funding round started on August 13th:

Private placement
The Company will undertake a non-brokered private placement of up to $1,500,000 by the issuance of up to 30,000,000 units, subject to regulatory approval.

Each unit is priced at $.05 and consists of one common share and one common share purchase warrant exercisable for 2 years from closing. Each warrant entitles the holder to subscribe for one additional common share for $0.10. Proceeds will be used to complete drilling, logging and assaying of the current drill hole DDH-009 at its 100% owned Two Mile project in the Silver Valley, Idaho, and for general working capital.

The financing book opens, the book running is done, the phones are hit, the brokers are consulted, the pitches are made and here's how it turned out, dated September 6th (today):
Corporate Update
Azteca closed its current financing at CAD $223,600, selling a total of 4,472,000 Units. Each Unit was priced at CAD $.05, and consisted of one share of common stock and one purchase warrant.

IKN assumes that the exploration program and budget expenditure flowthrough charts will be revised slightly. DYODD, dudettes and dudes.

Bolivia inflation: Baaaack?


In 2008 and 2009 the Bolivia of Evo Morales fought the good fight and did what very few governments there had been able to do before them; Thanks to sound macro policy (and deflation in the world's major economies) Bolivia managed to get its consumer price inflation under control.

No mean achievement, but all of a sudden there are signs that inflation is back and eating away at people's pockets. Today's announcement of August CPI at 1.06% is not a good thing and puts the 12 month trailing rate for CPI (what we normally understand as "the inflation rate") at 2.6%.


But the real problem isn't that headline 2.6%, rather the recent spike that's baking inflation into the cake for the next 12 months. This chart shows the monthly breakdown and we see how the last three months have added most of the inflationary burden onto the 12 month trailer.


June, July and August combine to give 1.82% of inflation and that 1.82% will show on the annual numbers all the way through next year. As August 2009 notes, there is a tendency for a higher price spike in that month (this year the goverment blamed much of the 1.06% on rises in the price of potatoes and chicken, which is not much of a surprise during the Andean winter) so we'll wait to see what September brings before shilling "we're all gonna die!" at you. But inflation is rearing its ugly head once again in Bolivia and if Morales&Co wants to keep its good economic record intact they'd be wise to tackle the issue immediately. 

DYODD.

Chile: The pushback against the royalty hike begins (from IKN70)

 Got a gold tie, have you? Think you're clever, do you?

In Chile dumbass xenophobia is not confined to the proletariat masses, as what it tries to pass off as its executive also promote soft racism for its own political ends. Today's example of shameless purveyor of hatred is Miguel Angel Durán (Anglo American should be ashamed of themselves) and the situation was included in yesterday's IKN70 thusly (as we've been following the Chilean royalty law issue over there):

Chile: The pushback against the royalty hike begins
We mentioned above the revised royalty plan now heading to Chile’s congress for passage to law, so it’s worth mentioning here the tactic unveiled this week by the industry to stop this royalty proposal from becoming reality. And the tactic is, “remind Chile just how much they hate Peru”. This crass strategy comes from the mouth of Miguel Angel Durán, head of the Chamber of Mining and also (significantly) Executive President of Anglo American Chile. The thinly veiled attempt to appeal to historical friction and ill-feeling between the Andean neighbours took the guise of competitivity in the copper sector. In his op-ed published in Chilean biz magazine ‘Estrategia’ he wrote (8) that he was ‘worried’ about the growth rates shown by mining in Peru because its costs of production were lower than in Chile. He continued (translated):
 
“If one looks at the growth rate that copper mining (in Peru) has had in the last few years it has been greater than that of Chile; if one looks at the costs, they are lower.
 
“Projection made by international organizations reveal that producing a pound of copper is cheaper in Peru than in Chile, that exploration investment is lower in Chile than in other mining countries and that energy costs (for mining in Chile) are higher.”
 
So after waving the flag and appealing to base nationalistic traits, Durán comes to the point:
 
“The problem in modifying the royalty impacts the profits of companies operating today in Chile, but will undoubtedly affect future investments. Therefore for the investor who has to decide between countries that have higher taxes than others, or lower exploration costs or higher costs of production, the alternatives are clear.”
 
This is, of course, total balderdash. The same arguments are trotted out every time a government decides to raise burdens on mining and it makes little or no difference in the longer run, as anyone who can remember the debate in 2004 when Peru’s mining industry was up in arms about its own royalty hike can remember. As for Chile itself, Señor Durán in his discourse neatly avoids the low overall state burden placed on mining by the State, along with the early stage tax breaks offered by the country. Playing the reduced profits card is also a real stretch at a time when Chilean miners produce at U$1.30/lb to $1.70/lb and sell their product at $3.50/lb. Finally, when it comes to the building of new mines, we know that the miner goes to the project rather than vice-versa.
Bottom line: If this is all the top executives can manage by way of an argument against the new, time-limited and watered down royalty proposal to raise money towards the post-quake rebuild, then the project will make passage and become law. Durán does a dissservice to his fellow miners with this shameless jingoism.

A comment on comments

There's a change gone on around here. 

Up to now, your author has slapped all the draconian controls on commenting at IKN (you needed the Google account, you needed the antispam word, you needed the author approval) before any comments appeared. This was due in part to those fine upstanding members of the interwebs we know as "anonymous haters" but mainly because IKN Nerve Centre was getting inundated by spam comments (and we were talking dozens per day, people..really boring). But THE GOOD NEWS is that those nice nerdy types at Google have recently implemented a antispam comments program that's supposed to filter all these out before they get published, so as from today and by way of experiment comments at IKN are automatically published and need no form of Google account, either. If it works, it'll stay this way. 

The bottom line is that commenting is now much freer and easier round here. If heaps of spam and/or haters show up we'll go back to the draconian ways you've learned to love, but if not the spirit of free speech has managed to invade this humble corner of cyberspace at last. Thank you for your attention, please be having that nice day you promised yourself.

Adventures in basic mathematics, Ecuador oil edition


Your humble scribe was surprised to see this report in his interwebnetpipes this morning:
BEIJING, Sep. 6, 2010 (Xinhua News Agency) -- Ecuador finance minister Patricio Rivera has said the country would sell 360,000 barrels/day of crude oil to PetroChina (601857.SH; PTR.NYSE) in the next four years, according to a Dow Jones Newswires report.
 The South American country's finance minister was quoted as saying that the crude oil will be sold at market prices. CONTINUES HERE

Why so? Time for the funmath!
1) According to home gov't and EIA figures (which unlike Venezuela largely agree) Ecuador currently produces 490,000 barrels of oil per day (bbl/d)

2) Ecuador's internal consumption of oil currently runs at 180,000bbl/d

3) This means that even in the very VERY unlikely event that Ecuador stops selling its wares to traditional partners (such as main customer USA or next door Peru) they still have another 50,000bbl/d to magic up from somewhere.

So tell me again how this greenheaven Yasuní ITT initiative will work? Meanwhile, today's pretzel math gives us a great chance to CUE THE MUSIC!

Chart of the day is....

...crude oil weeklies.


Your author continues to marvel at just how well behaved crude prices have been this year. It's almost as if......NAH SURELY NOT!

9/5/10

Long live the State of Arizona Department of Mines and Mineral Resources

With all the unfriendly vibes coming out of officialdom in Arizona recently, it's a pleasure to point readers to a Az govt website that does minehead readers a great service. Its page title is Mining Scams and it has solid tips for investors and help the naive or innocent avoid falling into the clutches of the mining scam scumballs and losing hard-earned wedge. Here's how the intro runs as an appetizer, click through for the rest.
Introduction
A time-honored method to bilk the public of millions of dollars is the ubiquitous mining swindle. Since an unusually rich ore deposit, or bonanza, has historically produced enormous profits for the developer, many of us believe that we too, like the '49er, can strike it rich. The glamour attached to "discovery" creates, in the imagination of some people, a relatively easy way to attain fantastic wealth. 

Although money can be made in mining and this Department certainly encourages mining, we also have a responsibility to urge the public to exercise prudence in its investment. Too many people have lost their hard-earned savings on an ill-advised mineral scheme. Archives are full of outrageous examples of mining scams and swindles in which the only beneficiary was a glib entrepreneur with unbounded optimism. In most cases, he disappeared before his investors realized what happened. CONTINUES HERE

Many thanks to the wonderful Setty for the headsup.

UPDATE: Reader GV kindly sends in this link to a PDF with plenty more sound advice from John Meech from the Centre for Environmental Research in Minerals, Metals and Materials,  University of British Columbia about avoiding mining scams.