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Which will be worth more at end 2015?

11/13/10

Saturday music bonus: Eskimo Disco; 7 -11 (featuring Pingu)

It's all earwicga's fault. She sent this over and now the kids are in love with the tune (you just gotta see them dance it) and the video too. Must say it's catchy and I'm into it too.



So here it is, mostly because now it's easier to find it the next time daddy gets asked for "the penguins, please!".

OT: Stimulus

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.

Latin America's internet service...

....is a crock. 

This chart by pingdom shows the world's top 50 net using countries (the bracketed number by the side of the names shows ranking by number of users) and the average connection speeds. Even the best in the region, Chile, is mediocre. And places like Brazil, with the 5th biggiest net population in the world but ranked 37th on speed...that's pathetic. By the way, you pay through the nose for the service, too.


I knew all this, but maybe you didn't. So now you do.

ECU Silver (ECU.to): Has anyone else noticed something really strange about these results?

When your humble scribe saw ECU Silver (ECU.to) returning a loss in its 3q10 report yesterday it was a little strange because, after all, in this previous post that looked at the production numbers we'd ended up by anticipating a net profit for the quarter of $2m or so (guesstimated, of course). The culprit of the big difference between IKN's guess and the ECU report was quickly noted, however.

IKN had estimated sales revenues at $8.7m for gold and silver. We'd come to that number by simple multiplication of gold and silver sales as reported by ECU.to with the average spot prices for those metals in 3q10, according to the London Fixes. This is a method that usually works when anticipating sales revenues, but this time it came with a big big miss.

ECU silver (ECU.to) reported sales of $5.29m for the quarter.

That's a big difference and when seeing that low number it was "WTF?" time at IKN nerve centre, so this morning I found myself checking the ECU.to 3q10 MD&A to try and work out how this low figure came about. The answer seems to be in the sales of pyrite concentrate and what follows is based on guesstimates (because ECU.to disclosure is so pisspoor you need to assume here and there) but at least makes sense

First, this from the MDA

"During the quarter, the Company recorded sales of a portion of its gold pyrite material in process inventory. This resulted in a gain from the reversal of previous inventory cost write-offs in the amount of $1,049,111."

Now, according to ECU.to filings the total pyrite concentrate sales were 3999oz, and production of pyrite conc was 1740oz. This implies that ECU sold 2259 oz Au in the pyrite conc for $1.05m...less than $500 an ounce!

This also adds up in the estimates for all products. Check this simple table in which we make conservative estimates for the prices fetched for the other metals sales. We use doré gold U$1,150/oz, silver $18.50 (according to the London Fix, the quarter average was U$18.92) and then Zn and Pb at $1.00/lb. This leaves the gold-in-pyrite concentrate as the unknown variable (presented in blue)

product sales est prices revs
pyrite conc inventory 2259oz $465? $1,049,111
pyrite conc prod 1740oz $465? $809,100
dore Au 1989oz $1150 $2,287,350
Ag 72264oz $18.50 $1,336,884
Pb 141,215lb $1.00 $141,215
Zn 65,616lb $1.00 $65,616


total $5,689,276





recorded sales $5,293,139

For me, the $5.7m rough total is close enough to the $5.29m ECU reported as sales...what with TCRC etc etc. So under the rough guess table, the produced pyrite conc, if given the same average price of the inventory conc revenues (as implied by the MDA, but not explicit), also fits that estimate of $465/oz Au

Is ECU Silver (ECU.to) really selling its ounces of gold-in-pyrite at U$465/oz or thereabouts? I'm not sure but on reverse engineering on the numbers it seems at this point the only logical answer. I know IKN isn't the flavour of the Month over at ECU.to and I'm unlikely to be able to get an answer from management, but those of you long ECU.to would be wise to write, phone, tweet or whatever the top people there and get an answer on this, because this quarter's sales number was weird compared to the ounces sold numbers.

Two minehead radio show links

Tipping the hat to MP we get to feature two smart mining brains in one post, as two heads are better than one.

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.

11/12/10

Agoracom versus The OSC: The best bits of the settlement

Here's the link to the OSC settlement agreement in the matter of Agoracom. Here are the best bits (my personal faves are clauses 24 and 25...but check them all out and see what you think):

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:
  1. more than 24,000 alias posts were created from within Agoracom on client and non-client hubs;
  2. more than 670 alias user names were created by representatives of Agoracom and used on client and non-client hubs;
  3. alias posts originated from Tsiolis’ residence; and
  4. 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 MESSAGES

    23. 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...

    "By engaging in the conduct described above, the Respondents have acted contrary to the public interest."

    ...to which we all shout "No Shit Sherlock". And now the best bits of the Order issued today, November 12th, and linked here:

    IT IS ORDERED THAT:
    1. The settlement agreement is approved.
    2. The registration granted to Agoracom Capital Inc. under Ontario securities law be terminated on the date of the Commission’s order.
    3. 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.
    4. 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;
    5. 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.
    6. 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.
    7. The Individual Respondents be reprimanded.
    8. 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.
    9. 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.
    10. The Respondents will pay the costs of the Commission’s investigation in the amount of $25,000.
    11. The Respondents, jointly and severally agree to make the payments ordered pursuant to paragraphs 9 and 10 above as follows:
      1. $50,000 by certified cheque when the Commission approves this Settlement Agreement; and
      2. 2 post-dated cheques, each in the amount of $50,000.00, dated 9 months and 18 months following the approval of this Settlement

    You'll note a marked difference between the ruling and the Agoracom version of events as posted on their site tonight, too. For example, Georgey says the $150k fine is "....fair given the resources expended by OSC staff..." but as the ruling clearly states, just $25,000 of the $150,000 fine is to cover the OSC costs. There's also the little matter of the 5 year and 10 year bans that he glossed over....but details, yeah?

    The Friday OT: The Beatles; Strawberry Fields Forever

    This week IKN tips its hat to one of the great sources.


    What's your favourite Beatles track? Yep, impossible question. I know this one stays up there as a permanent member of my top five so that's good enough. Enjoy.

    Silver: Leverage to spot prices....

    ...is a double-edged sword. Great for the spec brigade when things are wildly bullish, but those that play the riskier end of the curve should also be aware that cashing in chips is part of the short-term game.

    Your humble scribe prefers not to enter that arena and will continue to take longer-term views based on solid fundies...and will continue to sleep well at night, too. Call me boring if you like....

    Century Mining (CMM.v): "Fully Funded" my ass

    Righty-ho boys and girls, follow the bouncing ball as we review the 2010 news releases from Century Mining (CMM.v), the latest Peggy Witte BS scheme to benefit insiders and leave the pungent tangy aroma of KY Jelly amongst retail shareholders. 

    We start with this NR dated January 4th 2010 that kicked off as follows:
    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.

    "Fully funded", eh? Now this humble corner of cyberspace understands something pretty specific about that two word phrase, but it doesn't seem to mean the same thing to the BS artists that run CMM.v. Here's a list of NRs since that Jan 4th special.

    • 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.

    So since announcing that it was "fully funded", CMM has added $8m in debt to the balance sheets and 59.5m shares to its structure by way of financings. Beginning to notice a pattern yet? By the way, any resemblance to Metanor (MTO.v) is purely coincidental.

    Century Mining (CMM.v): Just another legalized scam on which we call bullshit. DYODD, dude.

    B2Gold's (BTO.to) quarter

    B2Gold (BTO.to) reported its 3q10 yesterday afternoon and there are two sides to the coin here.

    Heads: The numbers were good. Here are three charts that track the stock (subscribers: more charts and analysis on Sunday in IKN80) showing assets, liabilities and revenues/earnings development. All went in the right direction.
    Tails: The numbers had to be good this time, because this stock can only justify its current $730m market cap by returning numbers that say "we're getting better" and positioning itself as a growth story. The $10.93m in operational revenues does that, but it's not exactly a blowout either.

    Final point: Watch out for a possible "BNN effect" on BTO.to, as reader 'JC' kindly mailed last night to note this:
    On BNN Fri. afternoon
    2:45 PM – Q3 Earnings & Gold Price Outlook
    Clive Johnson, President and CEO, B2Gold

    DYODD.

    Gold standard? Roubini is right

    Since that early week left-field comment from World Bank head, Robert Kraftwerk Zoellick, about maybe slipping a bit of gold into the mix of world monetary policy (featured here) it's been hailed and jeered in turn by reactionaries. So far at least, the best and most reasoned argument heard by this humble scribe has come from Nouriel Roubini (and before we go on, yes I know his call on gold price not breaking $1200 was crap but let's leave the market fluctuation soothsayings aside because macro policy is where he's a smarter cat).

    Jon Nadler of Kitco did a good job in summing up the Roubini call in his daily market musing yesterday. Here's the link (go read it all, well worth it) and here's the relevant excerpt:

    "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."

    Indeed. IKN agrees with Roubini and also agrees with Nadler and his "hold that personal gold standard" call. World finances need flexibility, something that stodgy old gold cannot provide. Meanwhile, the personal saver (sidebar note, somebody with net asset credit, unlike the total world financial economy which is, by definition, net asset neutral) should be holding gold as their insurance policy. Holding physical gold isn't a way of getting rich (despite the glittering numbers we're seeing recently), but a way of not becoming poor....far more important in this author's humble opinion. The world doesn't need to attach itself to gold, but smart individuals make the right choice when they hold gold. DYODD, dudettes and dudes.

    An extra Friday morning chart thought on silver

    And yeah, I know just how much we longer-term fundy investors get on the tradejocks' nerves with the "value" and the "patience" and the "relax" spiel, so I'm now gonna STFU on this. Your day of niceness will have yes thank you.

    (click to enlarge)

    Chart of the day is....

    ...gold.

    Rocky end to the week coming up for the sentiment traders, with the latest comment in this post from yesterday about right: "sale looks to restart today ". 

    Personally, I just look at this and think, "Gold's at $1385oz and people long miners are worried? Madness."

    11/11/10

    Hurry! Silver discount sale now in its last few days!

    Another 20c or so to go to get back to where we were before Tuesday's silliness, I reckon.

    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 
    He's right.

    Economists = Dumbasses in suits, part 88,945

    Today in the FT, guest blogger Kevin Gallagher gives us the old chestnut about "The Chinese Threat", but this time from a LatAm angle. The story is not new and it goes without saying that the classic line of thinking, the one about how LatAm must diversify and add value to exports and how it's key to sustainable growth and how without it we're all gonna die etc etc, yep that one's front'n'centre:
    "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"

    This bullshit really gets my goat. Not the theory behind it, mind you, because economics being a social science is always up for debate, there are no empirical answers and opinions (as long as they're backed up by research and logic) are welcome. Nah, the thing that pisses me off about this is that people like Gallagher who bemoan LatAm's lack of added value growth, wag their little fingers at the overwhelming exposure to primary material and commodity exports and give countries like Brazil, Argentina, Bolivia, Venezuela, and Ecuador a stern piece of their mind on these occasions are the very same economorons that cheer and laud the economic progress made by Chile since the early 90s, a GDP growth totally dependent on primary exports that has....errr....has....well, like...err....made for 20 years of successful and sustainable growth in the country.

    It's the freaking hypocrisy of these dumbasses that sticks in my craw. So Mr Gallagher, accept this week's coveted award for yourself and all your two-faced colleagues who trot out their monotonous balderdash on LatAm macro:

    I feel better now. DYODD, dude.

    OT: Everyday heroes

    Your humble scribe is privileged to have made the acquaintance of so many fine people since this blog started in early 2008 and here comes an example. What follows is a mail received from "a runner from Canada". It's not something that will go down in the annals of humanity as a history-changing moment, nor is it written by somebody overly rich and famous; this is a rank and file human being who did an exceptional thing and wrote a modest but real and entertaining account of what he went through.

    When fortunate enough to receive a mail like this, your author gets to remember just how lucky he is and  trusts you'll enjoy it too. Thanks to "a runner from Canada" for giving permission to share it 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.

    Lest we forget

    Today is the day we remember our incalculable debt.

    In Flanders fields the poppies grow
    Between the crosses, row on row,
    That mark our place; and in the sky
    The larks, still bravely singing, fly
    Scarce heard amid the guns below.

    We are the Dead. Short days ago

    We lived, felt dawn, saw sunset glow,
    Loved and were loved, and now we lie,
    In Flanders fields.

    Take up our quarrel with the foe:

    To you from failing hands we throw
    The torch; be yours to hold it high.
    If ye break faith with us who die
    We shall not sleep, though poppies grow
    In Flanders fields.

    What US mining companies do in Colombia

    Top EngLang source for all things Colombia, Colombia Reports, brings us the news of how US mining companies congratulate far right wing paramilitary terrorists when they go around assassinating people. Here's an excerpt:

    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

    An e-mail exchange with Wistar Holt

    Hatemail comes with this territory, because exposing the scams of nasty people means that nasty people don't like you very much and IKN has picked up a number of friends over the years. But special place in the canon goes to Wistar Holt, GATA pump primer and a person that has a long track record of violent language and bullying behaviour, with others as well as here.

    So (due to popular (?) demand) follows the whole of the e-mail conversation between this humble scribe and Wistar Holt that began the evening of Monday November 8th and finished the morning of November 9th.  I'm not into displaying private mails like this, especially from the haters (as it just encourages their tiny minds), but this time feel that the publication of private mail is needed to show how this slimeball operates behind the scenes.

    Your author's mails are in blue. Holt's mails are in red. Read on:

    Please....


    ..put your money where your mouth is you motherfucken coward!


    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.

    http://incakolanews.blogspot.com/2010/11/wistar-holt-writes-in-to-ikn.html

    Love ya! O

    I have no interest in what else you wrote.  I won't even read it.
    you are a fucken coward and you know it. 
    Anybody who takes cheap shots at someone and then hides his identity is despicable.  You are the lowest in this arena of financial analysis.
    You are a paid hack and everybody knows it!  Nobody cares what you write because your analysis is worthless and unobjectively "paid off."
    Your silly little illustrations are amateur and juvenile.
    Of course, you claim innocence in "not being around the office today and thus not shorting at C$.90 as you proudly predicted last week, but what if you had a single reader who followed your bullshit and took your advice?
    Of course, you don't really care because you have no readers!
    I swear to God that if I ever come across you in person, I will rip you apart.
    Got it? 
    But of course, you won't ever show up, cause you are a coward!
    Crawl back in your hole and STFU....please!

    Good stuff! I see the champagne is working well tonight!
    And thanks for this line:


    I swear to God that if I ever come across you in person, I will rip you apart.

    I've included it as an update in that post.  
    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're a coward...you'll never show your face to me or anyone else associated with ECU.
    I'll take your empty challenge any day of the week.
    In fact, why don't you just arrange a meeting at any conference, etc?
    Nah, you're all talk which is synonymous with your cowardly incognito of your name and location.
    Fuck you...you're gutless and spineless!

    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. 
    I will remind you that you took the very first cheap shot way back when as I "innocently" raised a rebuttal to your unobjective attack at ECU.  I'm sure you don't have the fortitude to acknowledge that fact.  Then, you magnified the situation by remaining "incognito."  And, you have continued to take cheap shots at me and others on a continual basis even though you were completely out of my mind, until a source brought to my attention your latest comments.
    I really never expect to see you ever in my life.  So, your threats or my threats really don't matter, afterall.
    Adios (I'm sure you know what that means)

    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

    Charts of the day are....

    ...a couple that track the traded base metals copper, zinc, lead and nickel. Because when you take a five year view on the prices.....
    .....headline maker copper has done the best (no surprises for market watchers there), but zoom in a bit....

    ...and you notice that in the last couple of years there's been very little percentage change difference between any of them. Then go to the last month's trading and Dr. Copper, even with all the "broke $4" headlines, has lagged Pb by quite some measure and lies joint third.

    Which then makes you think why Cu juniors and stocks should get all the limelight and Zn, Pb and Ni plays get treated like the ugly sisters at the ball.

    11/10/10

    Today's best e-mail...

    ...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."
     DL says:
    "Well they do have one property in Northern Mexico after all."

    Applause and thanks for the giggles, DL. Link for further reading on the issue here.

    The real story of Peru's minimum wage

    Today in a show of blatant election campaigning care for their country, Peru's ministerial cabinet voted to raise the country's minimum wage from S/550 (550 Soles, or U$197) to S/600 (U$215). Which just goes to show what political appearances try to do at times. Here follows a translation of extracts from this article written by Carlos Mejia at Gran Combo Club about the wages paid at one of Peru's biggest retailers, the FASA chain of pharmacies, with over 200 branches throughout the nation and ranked number 121 out of the 5000 biggest companies in the country.

    "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

    IKN back: Be clear, these people getting S/170 a month basic salary (that's U$61 to you, squire) aren't working in some texile sweatshop either. They're formally contracted to one of the largest retailers in Peru. This is just one example of very many more (ask any Peruvian about the wages paid in the clothing industry, from factory to sales outlet, for dozens of other examples of pitifully low wages) in the country, so when the world's economic talking heads start congratulating Peru for the supposed hike in the minimum wage this week, call bullshit on them all. Yet another example of Peru's style over substance that makes it attractive to foreign investors.

    Short AMZN now

    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

    Bezos cares about his PPS, so stick it to him where it really hurts. Short this stock, make some money, get him to change the AMZN screening policy NOW. And while you're at it, if you see Philip R. Greaves II in the street break his nose for us all, yeah?

    UPDATE: 
    What. The. Fuck?

    Amazon sez: "Amazon believes it is censorship not to sell certain books simply because we or others believe their message is objectionable."

    Look here Bezos you dickhead, pedophilia doesn't come under the subject heading "objectionable". It comes under "illegal", "repugnant", "utterly disgusting", "felonous", "criminal" and add your own to the list. This isn't some handwringing about rights of free speech, it's about stopping some of the worst and most depraved people on the face of the planet from promoting their message. Fuck you, Amazon.

    Peru: Toledo confirms his run for President 2011

    You saw it here first (ok...maybe second) at 11:47am EST.

    Hot off the Twitterpress, Ex-Prez Alejandro Toledo has just shocked and surprised absolutely nobody by confirming his candidacy for President of Peru in 2011. Here's the linko.

    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'.

    After all, what are friends for?

    I mean, if you sell Cuba 100,000 barrels of oil a day at something around a 40% discount to market prices you're going to be long odds on favourite to get drilling licences before Exxon and Chevron, are you not?

    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

    Chile's GDP

    The IMACEC number is Chile's monthly proxy reading to the country GDP and it's usually fairly accurate (damned site more reliable than the BS out of its neighbours Argentina and Peru, for one thing). Here's the chart 2005 to date and we see how Chile has moved out of the late '08 crisis slump and is back on track.


    South America's only truly serious country, doing fine again. By the way, it's due to its seriousness that I'd never live there. No fun, y'see. DYODD.

    Jaguar Mining (JAG): Another fail

    JAG's 3q10 results yesterday were the usual dosage of underperformance. Cash costs higher, another nasty net loss etc etc ad infinitum...all the line items we're used to from this dog.

    But we note that even the way lower guidances that JAG handed out after its 2q10 trainwreck quarter (that we documented right here) we missed by some distance. Back then, JAG guided for 43,500oz production in 3q10. The result, just 23 days after that 3q10 was given to the market, was quarterly production of 38,861 oz Au produced.

    If you do the math, that 4,639 oz if sold by JAG at its sales average for the quarter of U$1,254/oz means that JAG promised the market U$5.8m worth of production more than it could deliver....just 23 days before the quarter closed! Compare that to the $3.8m net loss JAG just announced for 3q10. And think about it.

    JAG is gold mining's Boy Who Cried Wolf writ large. Avoid forever.

    Friday in Ecuador.....

    ...will be an interesting day for mining there, because according to today's reports that's the limit date for Ecuador's government to release details of its new mining contract with producers (the whole shebang we told subscribers about last Sunday and noted on the blog Monday evening). In other words, Ecuador's suited people have until Friday latest to tell us what kind of royalty, windfall tax and etc type things they propose for the sector.

    The same report has the President of Ecuador's Chmber of Mining Commerce very happy about recent developments.

    It's Dynasty time. At last.

    Today's Special Offer: 10% off Silver

    Hurry Hurry, these prices won't last long!

    Moly chart

    So why hasn't moly done the same thing as it did when copper was last at $4/lb?

    Too much bullshit in the copper pit and not enough in the moly market?

    Chart of the day is....

    ..the 5 day comparative between Rainy River (RR.v) and Bayfield (BYV.v).

    DYODD, dude.

    11/9/10

    Why did silver just sell off? This is why

    My thanks to main man 'J' for the link. His explanation was also succinct in the covering mail, so let's leave it to him:
    "... 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.

    DYODD

    IKN salutes Marin Katusa and the new air of accountability sweeping through Casey Research

    We at IKN Nerve Centre™ are pleased that, after some (ahem) gentle nudging Casey Research has decided to be more accountable to the people that pay them good money. This was noted yesterday in the Casey publication which explained to their readers for the very first time that Top Level (or whatever they called their premium service) gets stock recos before the proletariat (or whatever the lower rungs are labelled) and that the people working at the company do indeed make important sums of money via finder's fees on companies it's recommending (for example, the recent one at $1.16 $1.40 on Bayfield Ventures (BYV.v) that saw insiders selling stock the very same moment...BYV is currently trading at 90c....oops).

    As for their stupid and erroneous attacks on this humble corner of cyberspace, we can live with that. Comes with the territory and all part of trying to clean up this scam-ridden Vancouver junior world in which we live and trade. Mind you, I kinda laughed when you guys simply make shit up about this humble scribe, such as the total lie told about me calling BYV.v a "worthless company", but I wouldn't expect important people like Casey Research to apologize for being proven bullshit liars anyway...so let it slide, dudes.
    x
    But we digress, let's to the point! Now that Marin&Co are getting a taste for accountability and dealing transparency at long long last, wouldn't it be great if they didn't just stop at BYV and told their clientele (and not just via the obscure Reg F filings which only get read by wonks such as I) exactly what else the band of merry men have been up to over at Casey this year. So IKN calls upon Marin Katusa to keep up the good work and:

    • 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.

    So come on Marin, don't stop now! At long last you're showing a bit of honesty and transparency in the financial dealings that go on behind the backs of your subscribers, so this is a great opportunity to open up, clean up and start getting rid of that scummy reputation you've picked up over the years...amongst the pro community i mean, not the retailers. After all, you'd hardly want people to start using the word "scam" next to the words "Casey Research" on the old Google machine all the time, would you. Oh, which reminds me: According to blogger back office these are the top four most used search terms on IKN in the last hour:

    hits  %        term
    811.59%ikn
    710.14%casey scam
    57.25%casey research scam
    34.35%ikn otto

    DYODD, dude.

    Argentina is not a serious country, episode 12,849

    So today Argentina's FinMin Amado Boudou comes out and admits inflationary price rises in "some products" but tries to lay the blame on local businessmen for inflation, saying that


    "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."

    Well, let's see now. I'm ok about normal rank and file people not getting the fact that inflation is caused by expansion of money supply, but the FREAKIN' MINISTER OF THE ECONOMY OF A NATION OF 40 MILLION PEOPLE? Gimme a break here, fercryinoutloud. Bizpeeps to blame for Argentina's inflation? As Dr. Johnson would say, I refute it thus:


    Economics 101 lesson over. Data source: BCRA. DYODD, dude.

    UPDATE: At the behest of ace Argy econ dude and site friend Miguel Olivera, here's the chart that shows YoY percentage change in that above M2 figure. Note how the recent 20%-or-so average increase YoY closely correlates with the unofficial inflation figures out of the country (as opposed to the official INDEC numbers which are the biggest statistical crock in South America right now).

    Classic quote of the day

    Things that come to mind at moments such as these:

    "We simply attempt to be fearful when others are greedy
    and to be greedy only when others are fearful."

    Warren Buffett

    DYODD, dude

    Remittances in LatAm & Caribbean

    The World Bank is out with new data on remittances around the world, so as is our normal wont let's check out the state of play in LatAm/Carib and see how much money is being sent back from the richer (note: not "more developed') countries to the region. Here's a chart with the straight money totals and as usual, Mexico leads the field by quite some way in 2010.

    But when you factor in population counts for the top ten remittance countries (sourced this morning from the CIA factbook page) you get a better idea of the effect remittances have on a country.


    For example, U$317 per person (man/woman/child) sent back to Guatemala is more like U$100 per month for every family there. That, ladies and gentlemen, is an economy-changing amount of money. For more information on this subject, the new World Bank page and literature is highly recommended. I've spent the last hour wandering around the site.

    And then there's this chart, the gold/silver ratio

    As for things "going wrong" (not really accurate under the circumstances, but it'll pass), biiwii has a short piece worthy of consideraton this morning.

    Pretty interesting too. for what it's worth, today's reading of 50.12X was taken just now from Kitco, with gold at $1418/oz and silver at $28.29/oz. 

    Chart of the day is....

    ...copper, due to popular demand.

    So we're above four dollars again. For what it's worth, I think praise is due to John Redstone of Desjardins, who called bull on copper earlier than most anyone and basically nailed the call. Kudos to you, Redstone.

    11/8/10

    Casey Research, IKN and Bayfield Ventures

    Your humble scribe fully recommends that you read this article published by Casey Research today. Please click through and read it all, but to give you a taste here's how it ends.
    "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."

    And when you're done, make sure that you also read the comment left under this post today as well. Hey, to save you the trouble here's what the commenter wrote (the link he left is the same one that's linked above, but best to leave the commenter's words verbatim methinks):


    I emailed Casey research concerning your allegations. I recieved the following response.

    http://www.caseyresearch.com/pdfs/20101108_101106RevisedPrsponsetoBlogger.pdf

    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.

    1) The reason this corner of cyberspace pulled up Louis James on that ANM.v thing isn't the straw man reason set up by Casey&Co in their note today. It was more because he told outright lies to try and cover his tracks with his boss, David Galland. Check the story here if you care.

    2) Amazingly enough, Casey Research today totally forgets to enlighten us on Katusa's other PP cashmaker, the one that went horribly wrong for everyone except him and the $100k in cash he pocketed, CBM Asia (TCF.v). That story can be futher perused here. I wonder if Casey Research would be kind enough as to explain that one to its subscribers as well?

    Oh lordy, it must really be pissing these guys off that their outright lies, unaccountable behaviour and moneymaking schemes are getting a bit of light shone on them. DYODD, dude.

    Dynasty (DMM.to): What subscribers read about Ecuador yesterday

    If you were a subscriber you would have known yesterday (Sunday 7th) why DMM made a decent move today (Monday 8th). First they read this:
    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.

    And then in the 'Regional Politics' section of the weekly, 1,018 of the 14,000 words contained in IKN79 were devoted to the subject. The only thing missing is the small chart that's also available on link 15.

    Ecuador: The government set to sign its deals with miners
    News 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.

    DYODD, dude. I'm also happy to report that at least two subscribers (maybe more, I only have evidence from two people mailing in) took advantage of those $4.00 prices at the opening bell.