My thanks to reader 'RB' for sending this in:
It is a slow day in the small Saskatchewan town of Pumphandle and streets are deserted. Times are tough, everybody is in debt and nearly everybody is living on credit.
A tourist visiting the area drives through town, stops at the motel and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs to pick one for the night.
- As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.
- The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.
- The pig farmer takes the $100 and heads off to pay his bill to his supplier, the Co-op.
- The guy at the Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.
- The hooker rushes to the hotel and pays off her room bill with the hotel owner.
- The hotel proprietor then places the $100 back on the counter so the traveler will not suspect anything.
- At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves.
No one produced anything. No one earned anything. However, the whole town is now out of debt and looks to the future with a lot more optimism.And that, folks, is how a Stimulus package works.
I knew all this, but maybe you didn't. So now you do.
|pyrite conc inventory||2259oz||$465?||$1,049,111|
|pyrite conc prod||1740oz||$465?||$809,100|
This link takes you to Mickey Fulp on the Korelin show, talking Animas amongst other things.
This link takes you to Brent Cook on the Puplava show, talking on what makes a junior miner successful, with advice on how to avoid the bad ones.
17. Agoracom’s representatives serviced the client hubs by moderating their discussion forums and posting information and news to the forums. In order to post comments on the discussion forums, users are required to create a username and provide an e-mail address.
18. Tsiolis and Kondakos required their representatives, as part of their daily responsibilities, to post anonymously to some client forums using aliases. To post messages anonymously, the representatives created fictitious usernames and posed as investors blending in with other users, investors and interested persons. Representatives had between 40-50 aliases (some had up to 200) and were required to make up to 2 posts per hub per day or risk having their pay docked. On occasion, Agoracom staff conversed with themselves on the forums using different aliases.
19. During the Material Time:
- more than 24,000 alias posts were created from within Agoracom on client and non-client hubs;
- more than 670 alias user names were created by representatives of Agoracom and used on client and non-client hubs;
- alias posts originated from Tsiolis’ residence; and
- posts by Agoracom representatives, using their aliases, were occasionally promotional and promoted purchasing and/or holding stock.
20. Neither the public users nor the majority of Agoracom’s clients were aware that representatives of Agoracom were posting on their hubs using aliases. In some cases, Agoracom reported the number of posts and shareholder inquiries answered by Agoracom’s representatives to clients on a monthly basis, and failed to disclose that a portion of the posts and shareholder inquiries were created by Agoracom’s own representatives. For certain clients, alias posts by Agoracom’s representatives represented a significant proportion of the postings within the forum.
21. The Respondents also took steps to actively conceal the alias posting activity by its representatives. In March 2009, when the business development representative, Scott Purkis, revealed that he was an Agoracom representative posting with an alias, the Respondents posted an “Official Statement” stating that these actions were carried out by a single individual and that Agoracom would be taking steps within next sixty (60) days to ensure that this would never happen again. The message posted by the Respondents to the public in relation to Purkis’ alias postings was misleading given that Tsiolis and Kondakos knew and instructed many representatives to create and use multiple aliases to post on several of the client forums. In addition, Tsiolis and Kondakos were aware that representatives continued to post using aliases after this Statement was released.
22. The posting activity described above, mandated by the Respondents, was undertaken, in part, to create an appearance of greater interest in the securities of some of Agoracom’s clients.
IV. INTERCEPTION OF PRIVATE MESSAGES23. Another feature available on the Agoracom platform is a “private messaging” service which, according to Agoracom’s web site, allows users to have “direct and private contact with other Agoracom members.”
24. From July 2008 to February 2009, Kondakos intercepted private messages sent between public users for the purpose of gathering information about reporting issuers and issuers, in which he was personally invested.
25. Kondakos forwarded private messages to a personal friend who was not associated with Agoracom and provided this individual with administrative access to the Agoracom website. This individual also intercepted private messages between public users, and forwarded these private messages to Kondakos.
There also clause 26 which says...
IT IS ORDERED THAT:
The settlement agreement is approved.
The registration granted to Agoracom Capital Inc. under Ontario securities law be terminated on the date of the Commission’s order.
The registrations granted to Tsiolis and Kondakos (the “Individual Respondents”) under Ontario securities law be suspended for a period of 10 years commencing on the date of the Commission’s order, and the Individual Respondents are prohibited from becoming or acting as a registrant or as an investment fund manager for a period of 10 years commencing on the date of the Commission’s order.
The Individual Respondents be permanently prohibited from becoming or acting as a director or officer of any client of Agoracom or any client of Agoracom’s affiliates or subsidiaries;
The Individual Respondents be prohibited from becoming or acting as a director or officer of any reporting issuer, registrant or investment fund manager for a period of 5 years commencing on the date of the Commission’s order.
The Respondents will not trade or invest in any client of Agoracom or any client of Agoracom’s affiliates or subsidiaries, save and except for options or placements that are part of a contractual compensation arrangement.
The Individual Respondents be reprimanded.
Within 24 hours of the date of the Commission’s order, the Respondents will issue a press release, pre-approved by Staff (the “Press Release”), which shall include an electronic link to the within Settlement Agreement. The press release shall be posted on the home page of www.agoracom.com for a period of 6 months commencing on the date of the Commission’s order.
The Respondents will pay $125,000, to be allocated under s. 3.4(2)(b) of the Act to or for the benefit of third parties.
The Respondents will pay the costs of the Commission’s investigation in the amount of $25,000.
The Respondents, jointly and severally agree to make the payments ordered pursuant to paragraphs 9 and 10 above as follows:
- $50,000 by certified cheque when the Commission approves this Settlement Agreement; and
- 2 post-dated cheques, each in the amount of $50,000.00, dated 9 months and 18 months following the approval of this Settlement
This week IKN tips its hat to one of the great sources.
Century Mining Fully Funded and Reopens Lamaque Gold Project
BLAINE, WASHINGTON - (Marketwire - Jan. 4, 2010) - Century Mining Corporation ("Century" or the "Company") (TSX VENTURE:CMM) is pleased to report that the previously announced debt and equity financings totaling CDN$60.75 million have all been completed. These funds will provide the necessary capital for the continued exploration, development and reopening of the Company's Lamaque project in Val d'Or, Quebec, enable repayment of the Company's previous debt, and provide the Company with substantial working capital. Included in the funding is a US$33 million prepaid gold forward facility with Deutsche Bank AG. Simultaneously, Century has completed a CDN$17 million private placement yada yada continues here.
- On March 11th, CMM paid down $1m in debt, but not with the funds as mentioned above. Instead it added 3.57m shares to the S/O dilution pot (and 250k warrants to boot).
- On June 28th, CMM added two extra debt lines to the tune of $9m in order to buy plant and equipment... darnit Peggy, weren't you already fully funded for that kind of thing?
- On September 15th, CMM runs a $5m placement, adding 12.82m units (a share and a half warrant) at 39c to the share structure.
- On September 17th, CMM runs a $1.2m placement, adding 3.08m units (a share and a half warrant) at 39c to the share structure.
- On November 9th, CMM runs a $4m placement (combo PP and flow through) that adds 8.4m shares and 4.2m warrants to the share structure.
- On November 12th (i.e. today), CMM runs a $5m placement, adding another 12.82m units (a share and a half warrant) at 39c to the share structure, the same price as two months ago.
On BNN Fri. afternoon
2:45 PM – Q3 Earnings & Gold Price Outlook
Clive Johnson, President and CEO, B2Gold
"Much ado followed World Bank President Zoellick’s so-called ‘proposal’ to perhaps include gold into a revamped form of global monetary peg, given current turmoil and uncertainty. Camps are forming, battle lines are being drawn, forum chatter is ablaze with flamers (on both sides), and…economists, well, they bring logic to the table with “on the other hand” types of analyses. One such academic is Nouriel Roubini. According to whom, the re-adoption of a gold standard is unworkable.
"Speaking on CNBC the other day, Professor Roubini flat-out stated that "A fixed exchange regime, even if it is not a gold standard… that world just doesn't work, because in that world, monetary policy by definition instead of being countercyclical becomes pro-cyclical. Suppose you have a fixed exchange rate regime...it just exacerbates the business cycle." "
"NetNet reporter Ash Bennington details that “although he is best known as an economist who challenges conventional views, Roubini pretty well lines-up the consensus view of mainstream economics on the gold standard or fixed exchange rate regimes: "You have the opposite of what any optimal rule about monetary policy will tell you." Basically, fixed rate regimes inhibit the ability of banks to provide their “lender of last resort” support role to an economy when most needed. In so many words, the “good old days” were anything but “good.”
"This is borne out by the more than 22 recessions (some harsher than what took place in 1929-1941) the US experienced before WWII. See, for example, the “original” Great Depression (aka “The Long Depression”) that plagued the European and US economies from 1873 to 1896. The gold standard is generally thought to have its origins in the early 1700’s.
"UC Berkeley Prof. Barry Eichengreen has blamed the “dragging out” of the Great Depression 2.0 on the fact that the gold standard was then in force. Economic theorists would concur that –under such a rigid standard- monetary policy would essentially be determined by the rate of gold production. Variations in the amount of gold that can be mined at any particular time (where are the ‘peak gold’ adherents when you need them?) could cause inflation if there is an output increase, or deflation if there is a decrease in same.
""When you had a traditional gold standard, boom and bust with severe swings in economic activity were the norm—really big ones. It was only once we moved to fiat money that central banks were able to smooth the business cycle, and make it less volatile, as we did during the financial economic crisis," Prof. Roubini said.
"We say, hold that personal “gold standard” of your own, and remain on it. Let central banks do what they might (while not forgetting that they, too, have their own ‘reserve’ stash of the stuff) –chances are they will steer a course away from rocky shores. Hoping for a crash upon said rocks is not in anyone’s best interest. Never has been."
UPDATE: Always good for a chip-in, reader 'MP' adds....
Store closes in 5 minutes. This is the last day of the Madness Sale...
FORTUNA SILVER MINES INC 3:04:49 PM EST
Symbol T Bid AskLast Change Volume FSI
FVI CA T + 4.28 4.29 4.28 0.23 (5.68%) 540,763
"Latin America needs to diversify its exports - away from oil, iron, soya, meat and the like - if it is to grow sustainably. Unfortunately, as the region has focused yada yada guess the rest it's easy continues here"
Dear Family and Friends,
What an incredible day Sunday November 7, 2010 turned out to be, probably one of the best days of my life!I thought it might interest you to know how the day unfolded.It started at 5:30am catching a bus at the NY Central Library and being transported to Staten Island for the start of the New York Marathon.After what seemed to be a very long wait, huddled inside large tents chatting with some fellow runners in the cold, my race started at 9:40am.The race starts with one of my favourite singers Frank Sinatra singing New York, New York and then the gun sounded and we were off for a 26.2 mile run through all five boroughs of New York. It took me 8 minutes to get to the start line and we immediately started the one mile climb up the Verrazano Narrows bridge and then down the other side into Brooklyn.Almost immediately upon entering Brooklyn we were met by a wave of people cheering and yelling encouragement, this continued almost without a break for all 26 miles, except for the five bridges we crossed.Rock bands, jazz bands, gospel singers and other assorted musicians played on the side of the streets. People handed out Gatorade, water, bananas, oranges, candies, tissues and lots of encouragement throughout the race. I passed Edison Pena (one of the 33 trapped Chilean miners, who spent 70 days underground) at Mile 7 and Miss Holland at Mile 10 (it almost took me 70 days to pass her)! Chile, Peru, Argentina, Brazil, Japan, China, Australia, Holland, Germany, France, Britain, Iceland, Norway, South Africa, Israel, Denmark, Sweden, Italy, Russia, Spain, Ecuador and Mexico were just some of the countries I saw that were represented at the race. It truly is a worldwide event.While crossing the Queensboro Bridge you can look out over the beautiful skyline of Manhattan, 16 miles completed, only 10 left.With approximately 300 yards to go before you exit the bridge, you start to hear the noise of the crowd, by the time you set foot in Manhattan it has built into a thunderous roar.As you head north on First Avenue there are people lined up 3-5 rows deep on both sides of the street screaming themselves hoarse, the excitement and adrenaline boost is unlike anything I have felt before!A short 70 blocks north we entered the Bronx and the race is starting to take its toll on people as many are slowing down and starting to walk.I overheard an Australian runner yell at his mate “this is the Bronx, no one walks though the Bronx...start running!”From the Bronx, we crossed into Harlem and then back onto Fifth Avenue and the upper east side...the most diverse 3 miles of the race.Only 3 ½ miles to go and now it becomes extremely difficult to keep running...everything hurts, you are so tired and all you want to do is walk.The excitement of the crowds, the lure of the finish line and thoughts of your family pushes you forward.At 24 miles I feel terrible and don’t think I can keep moving, let alone run, and then a double leg amputee passes me (at speed) and I know I have to run to the finish.The last two miles are through gently rolling hills in Central Park (they felt like the Rockies) and then a last surge to the finish.I finished in 3:58:53 breaking the magical 4 hour mark and felt an enormous sense of accomplishment and pain all at the same time!
On the way back to the hotel I must have had 50 people stop and congratulate me on the race and in our hotel lobby a group broke into applause and congratulated me when they saw my medal for finishing.
Over 45,000 runners entered the race and there were over 2 million people cheering the runners on, this is definitely New York at its finest!
And now the important part.....Because of you I was able to raise over $12,000 for the Livestrong Foundation.Of the 283 people who raised money for Livestrong I was the 3rd top fundraiser and raised the most money of all the international runners, representing 20 different countries...thank you very much. I am very fortunate/lucky to have the support of many wonderful friends and family that made this all possible. I would also like to thank my wonderful wife who chased me around the course, cheered me on and supports me every day.When the race got difficult, which it did on more than one occasion, I thought about my Dad and sister and all the people who have had cancer and how this was contributing in some small way to them.
Scarce heard amid the guns below.
We are the Dead. Short days ago
We lived, felt dawn, saw sunset glow,
Take up our quarrel with the foe:
To you from failing hands we throw
We shall not sleep, though poppies grow
U.S. coal giant Drummond congratulated members of paramilitary organization AUC on the murder of two labor rights activists working for the Colombian branch of the company, a paramilitary testified Wednesday.
Drummond is involved in a lawsuit filed by victims of paramilitary violence that accuse the coal company of having given money to paramilitary organization AUC between 1999 and 2005, during which 116 civilians were killed in the region where the firm operates.According to Spanish press agency EFE, the lawyer of one of the bosses of the demobilized AUC, extradited Rodrigo "Jorge 40" Tuvar Pupo, told press that his client admits responsibility for the murder of the unionists in 2001.
A second paramilitary, "Samario," said in the hearing that two Drummond executives congratulated Jorge 40 and Oscar Jose Ospino, alias "Tolemaida" on the crime in a meeting that took place after the double homicide, Caracol Radio reported.
The two victims, Valmore Locarno Rodriguez and Victor Hugo Orcasita Amaya, were murdered in CONTINUES HERE
Your author's mails are in blue. Holt's mails are in red. Read on:
Nice to know you still read my humble little corner of cyberspace. I was away from the office all day. I know you'll need some sort of proof on that, being the kind of character that you are, so this is the line that was in the IKN Weekly for subbers yesterday regarding that:
"Please note that tomorrow Monday 8th posting will be light on the blog. I have some family stuff to take care of and will be away from the office until evening."So anyway, like I say I missed all the share price fun today and didn't make a trade, but I pretty promise you i'll open up my short position on ECU again tomorrow.
Anyway, hope you have a nice week. and here's something i wrote especially for you this evening. I hope you didn't masturbate too much today.
Love ya! O
Good stuff! I see the champagne is working well tonight!
And thanks for this line:
I've included it as an update in that post.
I swear to God that if I ever come across you in person, I will rip you apart.
By the way, if you really feel like doing that if and when we meet, make sure you have more than your bare hands. I promise you that if you don't, you'll be biting off way more than you can chew.
You seem to have some problems with the English language (aside from the mental instability on show, that is).
When someone points out that his bullying and threatening opponent would need more than his bare hands to "rip someone apart", it's not a challenge, but a simple statement of fact while standing up against the real coward, a bully such as you who talks the big talk but could only manage to get physical with members of his own family when (pardon the pun) push comes to shove (yeah man, you're more famous than you ever thought).
Meanwhile, a coward is someone who makes a bad call with their own money, gets a whle load of willing sheep to bail it out and then hasn't the basic valour to say, over a long three year period, that he was wrong about the stock pick. Another definition of a coward is someone who waits a full year to re-contact me because his stock had one good day. That's you, Wistar.
Before we go any further, let's make one thing clear. I am not afraid of you and your threats of physical violence Wistar. Bullies like you will always fold when their words are forced into action. As for facing up to me in the flesh, come on over. I'll tell you exactly where you* live and you just name the day (assuming you own a passport, that is). I'll buy you a beer when it's all over, too.
Final point: I do feel sorry for you, Wistar. But i feel far more sorry for your family and for those who've been hoodwinking all this time.
I don't care what you say, think, pretend to know, etc. about me. So, we can just dissolve the animosity and go on with our lives.
Well what fun. After wanting to "rip me apart" you get your words thrown back at you and now want to "dissolve the animosity". If you bump into a sociologist on your travels, why not ask them if that kind of behaviour fits into the 'bullying 101' classes they teach?
Look out for your mails, and mine, appearing soon on the blog. Not my normal way but this time an exception can be made. I think it's worth others knowing about the type of person you are under that public persona.
IKN back: Wistar decided not to reply and the mail exchange ended here, on the morning of November 9th.
*sic...should have written "I" there but leaving it verbatim
...comes from the razorsharp 'DL', commenting on this news from junior miner "Christopher James Gold Corp" (CJG.v):
"...shareholders of Christopher James have approved the consolidation of all of the issued and outstanding common shares of the Company on the basis of one (1) post-consolidation common share for every ten (10) pre-consolidation common shares. Christopher James will change its name to Gunpoint Exploration Ltd. in conjunction with the Share Consolidation."
Applause and thanks for the giggles, DL. Link for further reading on the issue here.
"Peruvians study hard for three years to get the professional title of "Pharmacy Technician". Others study five years to be a "Pharmaceutical Chemist". But at Farmacias Peruana S.A (FASA) those three or five years mean nothing at all. They're not worth a thing. Because the contracts given to these titled professionals are registered as "sales person", not as a technician in their respective branches.
"There's more.The company also considers that even though the workers spend eight hours in the pharmacies on duty, they're not working! Because they are "sales personnel" they assume there are lapses in the work hours with periods of inactivity. It doesn't matter if the workers are permanently in the shops and complete eight hours, do their job, look after customers, stock medicines, run inventories, clean the premises, take credit card payments, promote own brand goods, etc.
"And as someone in FASA realized that they were simple "sales personnel", they also established that they should earn S/170 per month. Yes, you read that right. Pharmacy technicians and some pharmaceutical chemists in the city of Lima and apparently other cities in Peru have a minimum monthly wage of one hundred and seventy Soles for eight hours work per day, six days a week." CONTINUES HERE
I've occasionally regretted not using Amazon. Not any longer. This from AP.
NEW YORK (AP) -- Amazon is selling a self-published book defending pedophiles, sparking discussions about the retailer's obligation to vet items before they are sold in its online stores.
The book, "The Pedophile's Guide to Love and Pleasure: a Child-lover's Code of Conduct" by Philip R. Greaves II, offers advice to pedophiles afraid of becoming the center of retaliation. It is an electronic book available for Amazon.com Inc.'s Kindle e-reader.
The book has triggered mounting outrage on Twitter and beyond. A chorus of Twitter users is calling for Amazon to pull the book, continues
UPDATE: Out of academic interest, a bit of oldmedia-vs-newmedia grist. Peru's two biggest newspapers, La Republica and El Comercio, "broke" the same story at 11:58am and 11:59am respectively, which could have been read on umpteen Peru Spanish language blogs by that time. Just sayin'.
From El Universo today:
Venezuela's President Hugo Chávez said on Monday that Cuba has substantial oil reserves in its exclusive area in the Gulf of Mexico. He said that Venezuela will be drilling "soon" its first oil well on the island.
"We know that Cuba has a lot of oil and we will be drilling soon our first oil well," the Venezuelan president told his Cuban counterpart Raúl Castro, during the official celebration of the Tenth Anniversary of the Comprehensive Cuba-Venezuela agreement, which was yada yada continues here
So why hasn't moly done the same thing as it did when copper was last at $4/lb?
"... CME is raising, on one days’ notice, initial and maintenance requirements for Silver by 30% - hence the $1.60 drop in Silver in the last 40 mins"
Here's the link to the CME announcement.
- Tell subscribers of Casey Research just how much in the way of finder's fees the Casey mob has made from placements run by companies reco'd by Casey Research in, let's say to be brief, the last 12 months.. I mean, I could wade through the whole public filings myself but it's boring, tedious and frankly I've better things to do with my life than rake through all that Casey muck.
- Inform the "regular" subscribers list just how many times they've been frontrun by a "premium" list that gets the advantageous intel first. After all, this may turn out to be good marketing, Caseyboyz...you might get more people on the expensive list once it's all done and dusted.
hits % term
|5||7.25%||casey research scam|
"There are some increments (due to) the push that an expanding economy gives, that has an enormous demand, the result of having incorporated millions of Argentines into the jobs market and millions of Argentines into the pensions system.
"However there is an attitude, and I want to say it with much respect, on the part of businesspeople who quickly move to increase prices instead of expanding supply and services."
Economics 101 lesson over. Data source: BCRA. DYODD, dude.
Things that come to mind at moments such as these:
and to be greedy only when others are fearful."
...copper, due to popular demand.
"We urge readers not to take seriously accusations made by anonymous internet bloggers and other questionable sources. If you have questions regarding any of our practices or policies, please contact us for the facts."
I emailed Casey research concerning your allegations. I recieved the following response.
In fact your allegations were not refuted and were in my view admitted too in this response. The excuse is given in point number two of the response that "all fees were publicly disclosed by the exchange". However as a subscriber I do not remember them telling me about this in the reco. The fact that they are recommending a stock that they are involved in and recieving renumeration for may not be illegal but it sure is greasy and slimy. I am cancelling all my subscriptions to casey research immediately. Otto I do not know if you have seen this response yet. If not can you take a look at it and respond.
I've nothing further to add to that commenter's words, but before we go, two points to make.
Dynasty Metals & Mining (DMM.to): Is the long wait nearly over? Modestly optimistic news came out of Ecuador Friday evening, which we examine in detail in ‘Regional Politics’ below.
Ecuador: The government set to sign its deals with minersNews out of Ecuador on Friday was positive. Early Friday the Ministry of Non-Renewable Natural Resources (MRNNR) (15) published the following (translated):
The Ministry of Non-Renewable Natural Resources (MRNNR), via the Vice-Minister of Mines, has made ready the “Contract for Mining Exploitation” that will be negotiated with those mining companies that are found in the the exploitation/production phase.
The Vice-Minister of Mines, Luis Bustamente Monteros, said that the contract has been elaborated together with the Tax Office (Servicio de Rentas Internas (SRI)), the Ministry of the Environment, the Secretary of the People, the Ministry of Finances and the National Secretary of Water (Senagua) due to their direct areas of competency in mining activities.
The terms of the contract document will be disclosed once the Minister of Non-Renewable Natural Resources, Wilson Pástor Morris, signs the respective ministerial agreement as established by Article 41 of the Mining Law.
Bustamente said that the contract model is directly related to terms established by the Mining Law and the Law of Fiscal Equity. This means that the document will include terms on royalty payments as well as windfall taxation.
He confirmed that the “Contract for Mining Exploitation” must be signed by mining companies that have large scale and industrial projects, that are in production phases and whose concessions were acquired before the implementation of the current Mining Law (January 2009).
Included in the list are the five projects considered as the “Strategic Mining Projects”: Fruta del Norte (Kinross Aurelian), Quimsacocha (Iamgold S.A.), Río Blanco (San Luis Minerales S.A.), Mirador (Ecuacorriente) and Panantza San Carlos (Explorcobres S.A.). The Fruta del Norte, Quimsacocha and Río Blanco projects have gold and silver resources, while the Mirador and Panantza San Carlos projects have copper resources.
For the negotiations, programmed to begin around the middle of December 2010, the MRNNR and Vice-Ministry of Mines will be represented by teams made up of national and foreign experts.
Vice-Minister of Mines Luis Bustamente said that once the contract model is officialized it will be shared with representatives of mining companies that operate in the country.
The MRNNR also included this map with its release showing the location of the five large projects deemed “strategic” by the government of Ecuador.
Dynasty (DMM.to), along with other mining companies outside the five “strategics”, was not named in the release, but this new contract is clearly the one DMM signs with the government as well. As the Zaruma project is already up and running (though on tick-over until the deal is done and dusted) DMM will be there at the front of the queue to sign and be done on this issue.
Now for a bit of Friday timing. Interestingly, the MRNNR release (16) came early Friday morning, but seemed to pass largely un-noticed by the wider world. Around midday Friday, while the markets were still open, there was an oblique mention of the NR in another Ecuador government website (17) but it wasn’t until the story was picked up by State newswire ‘El Ciudadano’ (The Citizen) and published after the Friday bell (5:15pm local time) (18) that other newswire services noted the event and ran their own copy (19) (20) etc. This may explain the lack of movement seen in DMM.to on Friday, because the contents of this release are a solid step forward for mining companies in Ecuador. There are still unknowns here, as we’ll be particularly interested in seeing the precise terms of state burdens proposed by the Ecuadorian government (royalty percentages, WFT details etc) and we’re still going to have to wait until mid-December to get to negotiations between government and mining companies underway, but we now have a document that’s ready to be presented and we have a fairly solid timeline (though the usual LatAm caveat applies at this point; when it comes to timescales, anything can happen and often does).
As for the terms that may be included, we recall that according to the letter of Ecuador’s revised mining law each mining company must negotiate its terms with the government. However, by the sounds of things it looks like there will be some sort of group negotiation, if only on the main terms that are most likely to include its royalty and windfall tax (WFT) agreements. We also recall that according to the terms of the mining and state fiscal laws, the WFT cannot be set under the spot price for the metal on the day of the agreement, which means that, for example, if DMM signed this very evening the WFT base level could not be set under Friday’s London PM fix of U$1,395/oz
Be clear: I fully expect Dynasty (DMM.to) to rally on this news Monday morning. I’m also reasonably confident that once details are revealed we’re not going to see any nasty surprises for mining companies and the terms that Ecuador wants to apply will allow mining companies to go ahead, do their stuff, mine for metals and make a decent profit. Yes, the burdens are likely heavier than other regional countries, but when it comes to DMM we’ve already accounted for a 51% total burden on revenues and come out with a stock that is a virtual double, so there’s plenty of room for the very robust economics displayed by DMM at Zaruma to accomodate extra state payments (according to this analyst’s Casio at least). So once the contract terms are known to the outside world, there’s every reason to see a second rally in DMM. In my mind’s eye (Ecuador and mining: WHAT COULD POSSIBLY GO WRONG?) we’d then get a quiet period until the negotiation gets going mid-December and if all goes well between miners and government suits, shareholders in DMM will be set for a year to remember in 2011, a year to wipe away three years of suffering.
Yes, I’m bullish DMM.to. Always have been in fact, because there’s no getting away from the fundamentals on this one. All we want is a final piece in position, a country that finally gives DMM a chance to do some serious mining.