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Which will be worth more at end 2015?

12/11/10

Seafield (SFF.v), meet owly: Owly, this is Seafield

Got a lot of bills to pay, that Paterson guy.......

Seafield Resources Ltd. (SFF)

As of December 10th, 2010
Filing Date Transaction Date Insider Name Ownership Type Securities Nature of transaction # or value acquired or disposed of Unit Price
Dec 10/10 Dec 06/10 Paterson, James Direct Ownership Common Shares 10 - Disposition in the public market -300,000 $0.705

M.B.A. in Corporate Finance information

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Google does Gardel's Birthday

This is the Google logo today.

Cool! Know more about Gardel by hitting his wiki page right here.

The Cuban innocent

Imran Garda of Al Jazz had a great idea: Instead of one of those boring year-in-review posts on his blog, he decided to review the news year 1910, one hundred years ago, by checking back at old newspapers and copy. There are lots of intruiging and great fun snippets found by Imran (e.g. 1 scientists divided as to the value of milk pasteurization, e.g. 2 Darwin's theory losing ground)  but this one excerpted below caught my eye more than any of them. 

"The Pittsburgh Press of June 28, 1910 had a tantalizing headline:

HAVANA TO BE THE MECCA OF GAMBLERS
Biggest sporting resort in western hemisphere to be erected in Cuban capital

“It will be backed by Cuban and American capitalists who have incorporated a $400,000 company.”

“The promoters plan to make Havana the biggest gambling Mecca in the world outside of Monte Carlo and possibly Nice and Venice...”

“The franchise gives the company the right to use during its ‘carnival seasons’ all the vacant lots belonging to the city, on which it is proposed to erect temporary gambling booths and places for other amusements. The purpose of this is to give the company an ironclad monopoly on all gambling privileges in the city.

"The city authorities have promised the utmost security from CONTINUES HERE

Surely a great plan. What could possibly go wrong?

Friday OT feedback

This is one of the posts I've been meaning to write for a while, with its first job to thank any and all of you that have written in and commented on any one of the Friday OT posts we've run here. It's one of those little regular slots on the blog and it's pleasantly surprising to see how much comes back, which could be anything from a two letter "great tune!" mail to one time where a regular reader went to six pages worth of script about Led Zep.

Yesterday's Friday OT, ZZ Top Just Got Paid, has brought four six fourteen (errr...guys, I gotta get the Weekly written) mails and a cool IM discussion (so far) and here are two disparate reactions to it. First up TM, who writes:
"This is a WAY better version. I have the DVD and it's amazing. Joe Bonamassa is, in my opinion, one of the greatest living guitarist around. Hope you feature him on your blog."
OK TM, here's the video as per wishes.



Secondly reader A wrote this, one of the better mails received after a Friday OT. Just thought I'd share and I know A won't mind.

Just noticed the ZZ Top vid on your blog.  The first album was recorded in Tyler Texas where I grew up.  I was 17 years old when it was released. While they were recoding it they used to play almost every night at a little club called the "Lighthouse" in Tyler. We would get stoned out of our minds and go sit on pillows on the floor, maybe 25 people and watch Billy Gibbons do amazing things with the guitar. I have some real fine memories of that time. Probably the best show I ever saw was at the National Guard Armory in Jacksonville Texas a few years later. The band was getting some recognition by then and Billy was just fabulous. They were playing Brown Sugar and in the middle of it he started playing these Clapton riffs from Deserted Cites of the Heart.... just blew my mind.
First time I ever saw ZZ Top was at Panther Hall in Ft. Worth Texas Feb. 1970 as the opening act for Quicksilver Messenger Service and the Grateful Dead. Heavy water light show from San Francisco and the works. Changed my life.
http://www.dead.net/sites/deadbeta.rhino.com/files/images/19700220_0394.jpg
Thanks for jogging the memories, A
Tell you what, people. Having a blog is fun.

UPDATE: Reader 'TK' carries the baton further. FWIW, I agree with his call that 1) it comes down to what you like and 2) ZZ Top's version takes it for being tighter and for playing the song as a group....and also Dusty's bass rocks. But that's me, here's TK:

First of all, thanks for posting a great Friday OT, and Joe Bonamassa’s version of Just Got Paid.  I always love hearing different really good versions of a good song. And I got to hear someone new to me.  I want to hear Joe Bonamassa live.
 
After listening to Bonamassa’s version – which I had to turn up to 11 - with TM’s claim of it being a way better version (a partly subjective call), I had to go back and listen to the ZZ Top version again (also turned it up to 11.)
 
Here is my reaction, as a total music amateur.  (I played tenor sax in the high school concert and jazz bands, and in a church polka band, me and six accordions, and a bass player and drummer, when the two of them occasionally showed up.  I acknowledge this experience could have skewed my perception of music.)
 
I have to give this one to ZZ Top, firstly as the version I enjoyed the most. But, secondly, I think ZZ Top did it better overall.  It sounded tighter, and like they were playing as a band, more as a unit. The Joe Bonamassa version sounded like Joe’s excellent playing dressed up with the accompaniment (also really good.) ZZ Top plays with their distinct sound.  While Joe’s guitar playing stands out, the band’s overall sound, as much as I liked it, didn’t stand out that much from a lot of other good bands.
 
Both versions were great music, but it comes down to what you like.  I think guitar nuts (I know a couple) might lean towards Joe’s guitar-first, everything-else-second sound.
 
OT from that: if you have two percussionists, shouldn’t they each do something pretty different?  Otherwise, what’s the point of having two?  I didn’t hear them diverging often.  If you need louder percussion, when they’re wired, can’t you just turn the one up?.  And what was the keyboardist doing?  I must have missed something.

x

12/10/10

The Friday OT: ZZ Top; Just Got Paid

It's the root of evil and you know the rest
But it's way ahead of what's second best

We're knocking off early here at IKN Nerve Centre and leaving you with a classic, but first let me tell you about falling in love. There was this time, I think it was 1982 or 1983, when I went round to a friend's house to hang and he'd just bought ZZ Top Double Down Live. His parents were out, we took the vinyl down to his dad's kicking stereo, put it on, the needle melted the wax, my ears collapsed and I spent the next hour with an adrenalyn-stoked heart doing 200bpm.


Just Got Paid live is ZZ Top at the height of their powers. Mighty blues/rock fusion and a kicking riff from a group with a sound that renders homage to many influences but is also one of a kind. We love ZZ Top. Enjoy.

Coro Mining (COP.to): Wanna know why?

Subscribers know why.


A Flash Update was sent out to subscribers at the bell this morning and we're now 55.5% up in this trade since it opened just over two months ago. You think it's all about numbers? Think again, you need to know what's going on politically, too. DYODD.

The gold/copper ratio

So how does this one work?


Pretty simple: You divide the dollars-per-ounce price of gold by the cents-per-pound price of copper. As a simple example, if gold is selling at $1400/oz and copper is at $4.00/lb, the gold:copper ratio will show 3.5. In other words, if that line starts moving up, it means gold is doing better in relative terms to copper. If it moves down, vice versa.

The interesting thing for your humble scribe is the bit over at the left of the chart, though. Pre-08Crisis that Gold/Copper ratio stood at 2.5X. As we've recently seen silver move back down from the 60X and 65X levels it had been running with gold to the 50X (and lower) levels it traded at pre-crisis, maybe copper will now follow suit and trade at a higher ratio to gold..

Or maybe not....

Charts, eh.....

You be the judge.

Chart of the day is....

...Paraguay GDP growth, 2003 to date.


Paraguay affairs are seldom reported even in fellow S.Am countries, but a quick look at this chart shows it's on the same kind of track as a whole bunch of regional states. No matter what kind of political leadership, the story is repeated in Paraguay, Peru, Uruguay, Colombia, Bolivia. Brazil. However, the only ones you tend to hear about in gushing raptures are those that bend over to gringo FDI at any cost. Funny dat, innit?

By the way, data from here.

12/9/10

Venezuelan oil Wikileaks fun

Thank the higher powers for Setty. Not only does he know about the Venezuelan oil scene a squillion times more than the humble author currently scribing, but he's also gone and done the legwork on a new batch of Wikileaks just out that concern Big Oil and Venezuela and saved me the tedium. Go read it all here, with added insight from the brain of the Settyman.

Ron Paul to be Chair of House Subcommittee on Domestic Monetary Policy

I don't think I've ever featured Fox News on these pages and it's unlikely to become a regular event, but there's a time and place for everything, I suppose. Here we have Ron Paul stating that he will become Chair of House Subcommittee on Domestic Monetary Policy.


FWIW this humble scribe doesn't think it'll change much substantially going forward....but it'll sure make for some fun TV in 2011 and 2012 when the Paul vs Bernanke showtimes roll around.

Gold: RBC isn't beating about the bush

Ray Hanson and Javed Mirza of RBC have made it pretty clear where they stand about gold mining stocks this week in their PDF report that you can download right here. Here's how the script begins, with guaranteed warm-fuzzy feelings for any gold investor that needs their hand held.
To be clear from the outset: we are not recommending that you buy large-cap golds and sell the small-caps. We are saying to own them all!
 
Gold has been in a major bull market for several years now. Some believe that the recent runup from $1250 to $1425 is the last inhale of a bubble that is about to burst. We disagree. In fact, we would make the case that gold is destined to become the greatest “bubble” of all time, and that the parabolic curve of its price track is still in its infancy.

In a perverse way I admire them

The sheer brass neck of these people goes way past the ingrained, inner cynic and gets me close to applause. It's certainly funny. What's going on at Seafield Resources (SFF.v) isn't some opportunistic move to take advantage of a sudden shift in market appeal; it's a well-planned, well executed orchestra of several moving parts involving, thought, strategy, main players and side-acts. It's all legal too, but it's also one helluva scam. Here's today's NR below and your humble scribe has taken the time to mark in blue those members of the deal who will not be holding any sort of bag when the music stops. Meanwhile those marked in red should remember an age-old phrase; caveat emptor. By way of disclosure, no position in SFF.v and wild horses couldn't change that.

TORONTO, ONTARIO--(Marketwire - Dec. 9, 2010) - Seafield Resources Ltd. (the "Company") (TSX VENTURE:SFF - News) is pleased to announce that it intends to complete a private placement offering of up to 16,000,000 units ("Units) at a price of $0.50 per Unit, for gross proceeds of up $8,000,000 (the "Offering"). Each Unit will consist of one common share (a "Common Share") of the Company and one common share purchase warrant (a "Warrant") with each Warrant entitling the holder thereof to purchase a Common Share at an exercise price of $0.75 for a period of two years following the closing of the Offering.
In addition, the Company intends to pay finder's fees to parties that refer subscribers to the Company equal to 6% of the proceeds of the Offering and will also issue broker warrants equal to 6% of the number of Units issued pursuant to the Offering. Each broker warrant will entitle the holder to acquire a Unit for a period of two years from the date of issuance exercisable at a price of $0.50 per Unit.
Proceeds of the Offering will be used to advance the Company's Quinchia, gold property in Colombia and for general working capital purposes.

PS: In the blog we'll just leave it at the rant, but the numbercrunching to illustrate just why the promo is getting people to overpay for SFF will happen in this weekend's edition of The IKN Weekly, the place where the level-headed stuff goes on.

Glenn Beck, frontman for gold scams

MoJones has the story and the cool cartoon above. Here are a couple of excerpts to get you au fait:

"Glenn Beck might, for once, be right: the government is coming for your gold. But only if you happened to buy it from one of Beck's advertisers, the Superior Gold Group. At the request of prosecutors from LA County and Santa Monica city who have filed a civil suit against the company, Los Angeles County judge has ordered that Superior Gold be placed into receivership and all of its assets—bank accounts, real estate, and presumably gold stored for customers—frozen."
and...
"Putting a company in receivership is a pretty drastic and very rare move for a judge in a civil case. It does not bode well for Beck's other and much bigger gold advertiser, Goldline, which has also been accused of very similar tactics..."

Isn't this fun! Continues here
x

Fortuna Silver (FVI.to): Two aspects, one stock

This first chart is why your humble scribe does very little daytrading:


Even taking into account the moves in silver and the general market vibe these last few days, your humble scribe doesn't have the first clue as to why Fortuna Silver (FVI.to) should open the way it did on Tuesday ($4.82) and trade 12.9% lower just 25 hours later ($4.20). On the other hand, this chart below shows FVI.to from May 1st 2009 to date, which happens to be the period of time that FVI.to has been a Top Pick recommendation at The IKN Weekly:


That's the kind of chart your humble scribe understands a little better. A 421% increase in just over a year and a half is the kind of result you'd want from a Top Pick, isn't it? DYODD dude and stick to what you're good at.

Internet use in LatAm, 2010

The annual Latinobarómetro survey is one place you can really get your wonk on about LatAm, with tons of stats and surveys covering Tijuana, Tierra Del Fuego and all points in between (download yours here). Sadly, the locally based dumbass hacks (they refer to themselves as the English language reporters of Latin American affairs) only ever use it for one thing; 1) scan for any mention of how many babies Hugo Chávez eats per day etc 2) report on that 3) ignore the rest cos it's like REALLY big that report and you can hardly expect me to read it all...got fruityrumpunches to drink, like.

But dig deeper and there's a wealth of information in the Latinobarómetro report, such as this chart below (data on page 99) that shows just what percentage of each country's population has never ever even once used the internet or e-mail.


You'd expect the poorer regional countries to have a low percentage, but even in the more advanced LatAm states there's clearly plenty of slack left to take up. By way of another stat to illustrate the continued low-ish penetration from the other end of the usage spectrum, in 2010 13% of LatAm connects to the internet every day, up from 11% in 2008.

Chart of the day is....

...LME copper inventory, five year chart.

Reasons for featuring this:
1) It's an ex-obsession that we haven't seen much recently.
2) An excellent article by John Kemp of Reuters explains all about the current dominant position held by one LME copper trader (apparently JP Morgan), what having a dominant position means and what it doesn't mean. Recommended read on this link.

12/8/10

Stock Pump of the Year

This is fun. Green Laser Reviews, the site dedicated to tracking huckster stock promos, is out with a "2010 Best of the Worst Awards" today to highlight the most shamefaced pumpjobs seen during the course of the year. Much to our pleasure, GLR has chosen Porter Stansberry's Nautilus (NUS.to) scam as winner of "Stock Pump of the Year", the very same BS job IKN noted earlier in the year when the whole sheep-shearing episode took place. Here's an extract:

“Stock Pump of the Year”

awarded to Stansberry & Ass. for
“Underwater Gold Sands”
The Green Laser Editorial Board unanimously decided to single out this well-orchestrated, exquisitely circumlocuted, letter-of-the-law promotion as the past year’s most ingenious example of copywriting telekinesis, which purely by accident CONTINUES

More World Press Freedom Day: Welcome to Okke Ornstein's twilight zone

Yesterday we noted the wild and bizarre news release out of The US State Dept as it plans to host the 2011 World Press Freedom Day. Well it turns out that WPFD also runs a Facebook page and  yesterday decided...like all Free Press promotion bodies would...to delete all the comments they'd picked up since announcing their brand of weirdoddity yesterday and also stop future commenters from doing same.

Okke Ornstein found this hilarious and so managed to engage the organizers in an IM conversation which is just as bizarre. You can read all that went on in that IM chat here, but Okke nails it in his conclusion line:
"A press freedom club that deletes comments from its Facebook page, won’t answer a simple question and then cackles that they are “glad” to see social media being used for debate? Kafka couldn’t make this shit up."

Go read....great stuff that shows these two-faced scumbags for what they are.

x

Peru again fakes caring about the Madre De Dios gold hellhole

Today Peru, via an executive decree, announced it was suspending all petitions for new mining licences in the Madre De Dios region of the Amazon basin that is currently being decimated by a boom in the worst sort of enironmentally poisonous gold mining possible (see previous coverage). The govt's Andina newswire begins this way (translated):

Lima, December 8 (ANDINA): The Ministry of Energy and Mines (MEM) today published an exective decree that prolongs until 31 December 2014 the suspension of the admission of mining petitions in the gold exclusion zone established in the Madre de Dios department.


In March 2010 MEM suspended the admission of mining petitions in Madre de Dios until 31 December 2010.


The measure is to complement the Executive emergency decree published in February that declared the re-ordering of mining in Madre de Dios in the national interest and established that in the exclusion zones no mining or exploration activities will be permitted.


The objective of the exclusion zones is the conservation of first growth forest, of  CONTINUES HERE.

It all sounds very eco-friendly, doesn't it? The gov't does its thing, stops new mining and cracks down on the parabolic growth in the disaster in motion, we all live happily ever after. Unfortunately it's all BS lip-service to appease those who are actually stupid enough to believe what these liars say. As you may recall, the problem isn't the legal miners there, it's the total lack of control the government has over the illegal artisanal mining. As this chart shows, since that "emergency decree" came into force back in February, production out of MDD has shot up and now accounts for 18.8% of the country's gold production, double (yes, double) the number in less than a year. 

And what had Peru done about the illegal mining? What kind of crackdown on the 300 people a day (seriously) that are moving into the area to exploit the gold and be exploited themselves? Nothing zip zero nada (surprise). It's typical Twobreakfasts Peru: Say one thing, do another, screw the environment into the ground, hope nobody notices and go for the cash. Viva Investment Grade.

Why technical analysts drive me mental

Let's take the gold ETF (GLD) over the last few weeks as our example:


So TA-heads and pseudoscientists, do us all a favour and......


...willyaz? Band of freakin' snakeoil sellers.

UPDATE: Reader 'E' agrees and mails in this:

Is Simon Ridgway bringing Emerick Resources (ERC.v) out the broom cupboard?

Simon Ridg....hold on! Shome mishtake shurely ossifer!

The Gold Group stable (aka "The Ridgway Companies") have had a pretty decent last six months, as this chart shows. Radius (RDU.v) is up tons, Fortuna (FVI.to) over a double, new kid in town Iron Creek (IRN.v) has started well and even Focus Ventures (FCV.v), beaten up when its Nueva California drill program caught a whole bunch of newsletter writers overhyping,  has made a recovery from lows and is active with the drill machine again.

All except Emerick Resources (ERC.v) that is, the Ridgway Yukon area vehicle that found very little via chasing up soil samples at its projects in 2009. Yup it's up a bit, but the volumes have been pitiful with zero market interest about the ticker. But is that about to change? Checking over at insider activity this morning, we note....

Emerick Resources Corp. (ERC)

As of December 7th, 2010
Filing Date Transaction Date Insider Name Ownership Type Securities Nature of transaction # or value acquired or disposed of Unit Price
Dec 07/10 Dec 02/10 Keyser, Harmen J. Direct Ownership Common Shares 00 - Opening Balance-Initial SEDI Report    
Dec 07/10 Dec 02/10 Cass, David Maurice Direct Ownership Common Shares 00 - Opening Balance-Initial SEDI Report  

...insiders taking up a position in ERC (with the name "Cass" particularly intruiging). I don't own ERC and I'm not planning on changing that in the near future, but I will be keeping an eye out on the newsflow to see if the company starts the resurrection shuffle. This one got pumped by Casey back in 2009 and although it's the type of promo that house tends to "forget" they ever did, it does show that the communications channels are already set for the shepherds. DYODD, dude.

Chart of the day is....

...the amount of money spent on mining exploration in Peru, 2007 to 2010.


Note the big climb in 2010 only counts the first 10 months of the year, too. Data from here.

12/7/10

OT: US to Host World Press Freedom Day in 2011

I laughed so much reading this that I just can't resist sharing. Today the US State Department announced the following and we're just going to present the NR without further comment:

"The United States is pleased to announce that it will host UNESCO’s World Press Freedom Day event in 2011, from May 1 - May 3 in Washington, D.C. UNESCO is the only UN agency with the mandate to promote freedom of expression and its corollary, freedom of the press."

It goes on:
"The theme for next year’s commemoration will be 21st Century Media: New Frontiers, New Barriers. The United States places technology and innovation at the forefront of its diplomatic and development efforts. New media has empowered citizens around the world to report on their circumstances, express opinions on world events, and exchange information in environments sometimes hostile to such exercises of individuals’ right to freedom of expression."

And then:
"At the same time, we are concerned about the determination of some governments to censor and silence individuals, and to restrict the free flow of information."

This is not a spoof, nor is it a joke. The whole NR can be read right here.

x

Brent Cook on Seafield Resources (SFF.v)

Brent Cook's Exploration Insights letter last Sunday devoted part of its space to last week's news release out of Seafield Resources (SFF.v). Your humble scribe has received permission to reproduce Cook's thoughts here at IKN, so here they are below. What follows, ladies and gentlemen, is the difference between hucksters that pretend to know about drilling results and professional geologists who do actually know what the hell they're talking about. Enjoy Cook's analysis.

Influential newsletter writers and Seafield’s big hole
...........
Speaking of investment letter writers, I understand that the Midas Letter is calling Seafield Resources (SFF.TSX-V) the next Ventana, and advises that you grab as much as you can with both hands at under $1.00.  Ventana Gold (VEN.TSX) has a 3.5 million ounce inferred gold resource in Colombia and is the subject of a takeover offer of approximately $1.5 billion.  Seafield, or Ventana II if you prefer, announced a drill intersection of 449 meters grading 1.29 grams per tonne gold including 10 meters @ 2.87 g/t Au, and 23.95 meters @ 9.18 g/t Au.  Within the higher grade section was a 2-meter interval grading 70 grams per tonne gold.  SFF (~99 million shares outstanding and ~146 million fully diluted) popped from $0.23 to $0.57 on huge volume of 70 million shares after it opened for trading on Friday. 
I reviewed the results and the well-written 43-101 after the drill hole announcement, and since I received a number of queries from subscribers, offer the following quick and dirty review of the Miraflores property in Colombia.
The property has seen a number of drill campaigns from several exploration companies, the most recent being B2 Gold, in 2007.  The historical work, plus a report from the renowned economic geologist Richard Sillitoe concluded that Miraflores is a multi-phase magmatic-hydrothermal breccia.  Meaning, the mineralization is confined to a fractured and broken pipe-like body formed by the injection of several magmas and hydrothermal fluids related to these intrusives. There are three alteration and mineralization phases, of which it appears that an early silica and base metal event is associated with the better gold mineralization.  Drilling, mapping, and underground sampling have essentially defined the limits of the body at about 250 meters by 280 meters.  Although the breccia body is open to depth, drilling suggests that the better gold mineralization is concentrated in the upper 250 meters or so.  There is some evidence that a high grade core dipping to the southwest could extend the mineralization to depth in one direction.  
In April 2010 SFF estimated an inferred resource, based on approximately ten drill holes and underground sampling, of 776,373 ounces grading 1.295 grams per tonne gold for the Miraflores breccia pipe.  The resource report noted that the high grade mineralization within the body occurred mostly within a central core and was both erratically distributed and nuggety (localized very high grade gold that is difficult to model in a resource estimate).  The highest grades (3 to 429 g/t Au) occurred in fault veins, and mineralization generally decreased towards the edges of the breccia body. 
Our handy-dandy drill interval calculator (pictured below) reveals that, excluding the two higher grade intervals in DH-03, the SFF announcement of 449 meters grading 1.29 grams per tonne gold consists of 415 meters grading 0.798 grams per tonne gold plus the two high grade sections.  Within the higher grade, 23.9 meter interval, there is a 2-meter section grading 70 grams per tonne gold.  This narrow interval alone has a significant influence on the entire 449 meter interval, such that when excluded the grade drops to just under 1g/t Au for the remaining 447 meters.  DH-03 went through the guts of the breccia pipe, and the drill results are representative of the deposit-- basically they confirm the previous drilling and resource estimate.  Hmm…this is not looking good.

(Fig. 1- Breakdown of Seafield’s 449 meters grading 1.29 g/t Au)
In summary, all the excitement is over a single drill hole that really offers minimal new information on a gold deposit that has been effectively defined by previous work.  Miraflores is a discrete breccia pipe hosting a decent resource centered around a higher grade core.  There may be the potential to add ounces at depth to the southwest as indicated by the deeper interval announced by SFF this week.  It is difficult to tell how much of the resource could be economically mined because the deposit rests on the side of a steep hill; developing the deeper portions could entail the removal of a significant amount of barren rock (high strip ratio). 
Although the upside to the Miraflores property may lie in as yet undiscovered or undrilled targets, that upside existed at $0.23, and has nothing to do with the 449 meters grading 1.29 grams per tonne gold or, the 415 meters grading 0.798 grams per tonne gold plus a couple of high grade intervals.  This is not Ventana II, and Miraflores is not a large enough deposit to entice me.  If other gold in soil anomalies on the property noted in an October 6 news release are the real sex to this play, then it is best to really look at the historical results and wait until SFF begins releasing additional data from those targets.  Considering that a single drill hole through a known deposit caused over two-thirds of SFF’s outstanding shares to trade hands in one day, one has to wonder who made the better trade, buyers or sellers.  Monday’s action should prove interesting.

Oxy in Peru

This out Monday

LOS ANGELES, Calif., Dec. 6 Indigenous plaintiffs from the Peruvian Amazon won their appeal today in the landmark human rights and environmental contamination lawsuit against U.S. oil giant Occidental Petroleum (Oxy), as the U.S. Court of Appeals for the Ninth Circuit ruled that the case should be heard in Los Angeles, Oxy's hometown, EarthRights International announced today. A district court judge had previously ruled that the case should be litigated in Peru, but the Ninth Circuit disagreed, allowing the plaintiffs to proceed in federal court.

The lawsuit accuses Oxy of causing severe injuries by knowingly dumping a daily average of 850,000 barrels of toxic wastewater into the tropical rainforest inhabited by the indigenous Achuar people of northern Peru over a 30-year period, as well as inducing acid rain from gas flaring, and improperly storing waste in unlined pits. The plaintiffs allege that these outdated practices caused widespread lead and cadmium poisoning, among other serious health impacts.

"This is a major victory for the rights of indigenous peoples," said Marco Simons, Legal Director of EarthRights International (ERI), who argued the appeal before the Ninth Circuit. "Oxy will now face justice in the U.S. federal courts, rather than in a Peruvian legal system that has never compensated indigenous groups for environmental contamination." The Ninth Circuit's opinion indicates that it was not convinced of "the ability of the Peruvian courts to satisfactorily handle this case," citing corruption and "disorder in the Peruvian judiciary."

Atossa Soltani, Executive Director of Amazon Watch, added, "The Achuar people continue to suffer the devastating health impacts caused by Oxy's damaging practices, which were illegal in the U.S. at the time. This ruling means that the Achuar will finally get their day in U.S. court and signals the end of the era when companies could destroy indigenous communities and their environment with impunity." Amazon Watch has advocated for the Achuar people for many years, and joined the case as a plaintiff to challenge Oxy's allegedly fraudulent denials of responsibility for the pollution.

The Achuar case, Maynas Carijano v. Occidental Petroleum, No. 08-56187 (9th Cir.), was filed in May 2007 in the U.S. District Court for the Central District of California. In April 2008, the district court ruled that the case should be heard in Peru under the legal doctrine of forum non conveniens. The plaintiffs and their counsel, including Washington, DC-based ERI, the Venice, CA firm Schonbrun DeSimone Seplow Harris Hoffman & Harrison LLP, and San Francisco lawyer Natalie Bridgeman, appealed that ruling. The Ninth Circuit's opinion was issued by Judge Kim McLane Wardlaw, joined by Judge Mary M. Schroeder; Judge Pamela Ann Rymer agreed with part of the opinion and issued a partial dissent.

According to "A Legacy of Harm," a 2007 report issued by ERI, Amazon Watch, and the Peruvian legal non-profit Racimos de Ungurahui, Oxy's operations discharged billions of barrels of untreated wastewater into local streams, caused numerous spills and resulted in many unremediated toxic waste sites in Achuar territory, with severe health and livelihood consequences for the Achuar.

The full report and the Ninth Circuit's opinion are available at www.earthrights.org .

Seafield (SFF.v) sound effects

"FSSSSSSSSSSSSSST" (sound of air escaping from fatally flawed, overpumped tire).


So James West, tell us the truth: Are you still holding out for that "potential 10 bagger" and buying all the stock available today (well) under 55c, or have you decided, after talking to Ian Park, that it's prudent to take some profits given market conditions*? Inquiring minds.....



*YOU THERE! STOP LAUGHING AT THE BACK!

Venezuela arrests Julian Assange

In a shocking display of Tyranny™, Hugo Chávez today arrested ChampionOfFreeSpeech™ Julian Assange on trumped-up charges that have little or nothing to do with the real reason for his detention.

We join the FreeWorld™ in condemning Chávez's actions and demand the speedy release of Assange.

What the President of Aerosur thinks of his customers

 A white guy from Santa Cruz spouts bigoted
racist BS: Well that's original, isn't it?

Humberto Roca is the President of Bolivia's private airline Aerosur, currently feeling the pinch because Evo has started a State run airline that's undercutting his prices. So during a press beano to Miami (where he proudly showed off the 47 vintage cars in his 'garage' Roca said:
"Bolivia and Venezuela have things very much in common. They have a big mass of poor and ignorant people,  which is not to insult them because they're left ignorant deliberately due to their politicians."

In other words, Bolivia and Venezuela are just like virtually all the other 200+ countries on our planet. And Roca is an asshole who's going Chap11 sooner than he thinks.

Why Biiwii Gary rules

On reading Gary BiiWii's latest edition of his subscription newsletter on Sunday (we do swapsies; he gets mine and I get his) I was mightily impressed by the early-letter discussion page on technical anlaysis, so I was very pleased that he decided to re-print it on his blog yesterday and urge you to go read it by clicking this link now. Yet again we're reminded just how intelligent Gary is. After all, who would you prefer to listen to?
1) Somebody who has read a whole bunch of books on TA, doesn't have much in the way of analytical nous and proclaims this-or-that MUST happen because the squiggly line says so because the dude that wrote the book he read told him so.

2) Somebody who thinks, learns, listens, has experience and can gauge risk/reward at any given moment, a person with a depth of synthesis in several areas of life (not just line-reading) that can bring a working brain to the subject and interpret what they see (with a strong track-record of calling them right, too). Somebody who's balanced about all things, not just the market, remains humble and keeps their ego well in check. Most importantly, somebody who has a proven track record of making their subscribers good money by making good calls.

Number 1) is the TA-charty I rail against....the binary fool that will come a cropper and never, but never outperform the market...the vast majority of get-rich-quick Walter Mitty types that populate the mumbojumbo pseduoscience called Technical Analysis. Number 2) is Gary, a rare breed of thoughtful and smart player in TA that I truly respect and admire. All analysis is subjective, be it charty or fundy. The difference between a winner and a loser in the markets is the person that can interpret the raw information correctly and it matters not a jot whether that raw info comes in the form of a chart or a balance sheet or anything else.

I'll finish this little tribute by leaving the last word to Gary and an excerpt from his post. Go read it all (and get smarter on the market by subscribing to his weekly letter..that's one investment you won't regret making). Here's Gary:
"....so I will conclude with a simple thought; TA should be an extension of the individual and said individual’s experience in the financial markets. There is no one TA method that is the Holy Grail. If there were, the markets would not be filled with so many wise guys getting it wrong as often as right. Make it work for you or take it with a huge grain of salt."

PS: I'm not on commission or anything of the type. All I get from this is the reflected glory of having aimed you in the direction of a smart guy worth listening to on markets.

Peru fashion

This Christmas's must-have T-shirt.

Chart of the day is....

...copper, monthly candles.

A new all-time high in London this morning (in GBP at least) and just a lick and a splinter away from the dollar ATH set in 2008.

12/6/10

Gold American Mining (SILA.ob) in three steps

Step One: On August 18th IKN ran its post "Gold American Mining (SILA.ob) is a scam", noted the BS pump being promoted by a zero-morals scumbag named John Myers and pointed you to the awful looking fundies of the stock.

Step Two: This chart shows the share price performance of SILA.ob from August 18th to date:


Step Three: Any further questions?
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Jaime Bayly and Twobreakfasts

Noted South American novelist, talk show host and (for a while this year) candidate for President of Peru Jaime Bayly is intelligent, engaging and writes up a storm. He's also a total son of a bitch. This is a good combination for a snark-merchant site like IKN and here he is spilling the beans today on a private dinner he had this year with President Twobreakfasts. The basic takeaway is that Bayly may well be a SOB, but García beats him hands down in the corruption and anti-democracy stakes. Translated excerpt from Bayly's column linked here or here:

"Finally, I invited President Alan García to dinner at my house, the genetic accident who governs Peru. When García sank his oceanic girth into the sofa, I had an ominous thought and feared that the piece of furniture would break into pieces. Alan encouraged me to be a candidate (in the Presidential elections). I told him I didn't have enough money and my mother wouldn't back me. I asked him how much the President of Peru earned. He didn't seem to know nor care. "Something like U$3000 a month", he said. I told him that with that salary I couldn't maintain my family for five years and added that I'm not a thief and didn't have the urge to learn the trade. Alan let out a laugh and came out with the phrase of the evening, "Don't be an idiot man, money arrives all by itself."
"Later, García said something that to me seemed awful, that if Mr. Humala won the election he would lead a Coup D'Etat and stop, by breaking the law, that Ollanta Humala became President. "Even if they throw me in jail, Humala will not be President", boasted García.


"That night left me thinking that in fact this is how politics is in Peru: The absolute lack of scruples, passing the hat around and hoping that money arrives by itself, a subtle and false way of saying that money arrives from under the table, in suitcases, bribes and secret bank accounts."

Ag 30

Here's the chart:

Seafield (SFF.v): Gotta wonder just how stupid James West is going to look once the hype dies down

The subject matter is Seafield Resources (SFF.v) and its big hole announced last week. This excerpt from James West's Midas Letter dates from December 3rd.
"When the market opens Monday, any shares you can get under a dollar will likely be ten-bagger potential, as with a few more drills holes like this one, and you’ve got Ventana 2 on your hands. (Ventana is currently the subject of a buyout offer by Brazil’s EBX Group for $1.5 Billion.)"

The market looks upon West as a guru. I personally remember him as the dumbass who looked really really stupid by reco'ing Southwestern as a buy just AFTER the Boka scandal broke. Meanwhile, this on SFF.v last week is from the smart guys at Metal Augmentor: For the record, put me firmly in their camp as regards Seafield:
"I’d go as far as saying that anybody who compares Seafield to Ventana Gold (TSX: VEN; Pink Sheets: VENGF) at this point hasn’t even bothered to look at the drill map."

DYODD dude, and laugh hard at self-fulfilling prophecies.

Morgan Stanley on China growth and forecast 2011 demand for basic materials

A new report dated December 5th out of Morgan Stanley has a front page overview that looks like this:


LatAm Basic Materials
China’s Growth to Moderate;
Appetite for Materials to Continue

 

Our field trip to China led us to believe that while the country’s economic growth will slowdown, it is unlikely that the metal-intensity of its growth will change materially in the next few years.
 

What's new: We spent last week in China with a group of Latin American investors meeting companies and talking to consultants. We had the opportunity to see the contrasts of the rapidly developing nation during our field trip. On one end, the impressive build out of the last decade is still ongoing in both Shanghai and Beijing. On the other end, Zibo and Dongying (second tier cities), in Shandong province, where people's living standards are clear evidence of China's emerging economy status and offer potential future demand for natural resources.
 

Economy: Expected GDP growth of 8–9% in 2011 to decelerate from unsustainably high levels, but remain robust. Despite consumption gaining importance as the driver of GDP growth, investment will lead the economy over the next few years, with social housing offsetting most ─if not all─ of the decline in private construction.
 

Steel: Expect steel production growth of 5–10% in 2011 with capacity utilization of ~92%. Steel demand will continue to expand, but at a slower clip than during 2003–2007. Baosteel said that 50% of Chinese listed steel companies lost money in 3Q10, and yet Wuhan believes steel prices might come down before they rise.
 

Iron ore: Iron ore prices expected to decline to $120–$150/t in 2011, as Indian exports normalize. With cash cost for Chinese material ranging from $75–135/t, all iron ore producers are profitable at current ore prices.
 

Pulp: Chinese buyers will remain opportunistic. Local production costs ~US$600/t for hardwood; US$700/t for softwood. Softwood market is tighter than hardwood. Government is supporting local plantations in an effort to reduce imported fiber dependency.
 

Copper: Chinese copper demand to grow 8% in 2011. According to the 12th 5-year plan, the government plans to invest RMB400B per year on average into power grid.

Read it all by downloading from here. A good piece of macro.
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Tahoe Resources (THO.to) Bought Deal: That's 1% of its host country's GDP!

 True dat! Take Guatemala's 2009 official exchange rate GDP of $37.66Bn, take the deal and assume the overallotment happens, do the math and it's 0.93%..... close enough.

It's not something we normally comment upon on these pages, but the bought deal financing just announced by Tahoe Resources (THO.to) is a big chunk of change, coming in at $306m (and Goldcorp committed to buying in and keeping their current 42% of the company intact). Here's the cover of the termsheet.
Issue Price:         C$14.10 per common share, 3.8% to market closed 
Jurisdictions:     All Provinces of Canada (excluding Quebec) and to the U.S. via Rule 144A/Reg D 
Settlement:       December 24, 2010
Gross Proceeds:
C$306,027,528
Underwriters’ Option:
The Company will grant the Underwriters an option (the “Over-Allotment Option”) to purchase up to such number of additional Shares as is equal to 15% of the number of Shares sold under the Offering to cover over-allotments, if any, and for market stabilization purposes. The Over-Allotment Option shall be exercisable for a period of 30 days following the Closing Date at an exercise price per Share equal to the Issue Price. The Underwriters shall be entitled to the same Commission (as hereinafter defined) provided for below in respect of any Shares issued and sold upon exercise of the Over-Allotment Option.
Use of Proceeds:
The net proceeds of the Offering will be used to fund the advancement and development of the Escobal Project, for acquisitions and for general corporate purposes.
Type of Transaction:
Bought deal, short form prospectus offering, subject to a formal underwriting agreement, including a standard industry “disaster out" and “material adverse change out” clauses running up to the Closing Date.
Jurisdictions:
The qualifying jurisdictions for this offering will be all provinces of Canada except Québec. The Shares will also be sold to U.S. buyers on a private placement basis pursuant to an exemption from the registration requirements in Rule 144A and/or Regulation D of the United States Securities Act of 1933, as amended. The Shares will also be sold to buyers in the United Kingdom on a private placement basis.
Listing:
The Company shall use best efforts to obtain the necessary approvals to list the Shares on the Toronto Stock Exchange, which listing shall be conditionally approved prior to the Closing Date.
Underwriters:
GMP Securities L.P. 1,2                                                                            50.0%
BMO Capital Markets                                                                             15.0%
Canaccord Genuity Inc.                                                                          15.0%
CIBC World Markets Inc.                                                                       5.0%
Merrill Lynch Canada Inc.                                                                      5.0%
RBC Capital Markets                                                                                5.0%
Dundee Securities Inc.                                                                           2.5%
TD Securities Inc.                                                                                      2.5%
(1)                                                                          Lead underwriter
(2)                                                                         Sole bookrunner and step-up fee of 5.0%

Chart of the day is....

...Chile's GDP growth, 2006 to date.


Chile monthly IMACEC number (monthly GDP growth proxy) was published this morning and came in slightly below estimates at 4.8%. The new datum is incorporated into the above chart that uses the raw numbers, not the seasonally adjusted smoother curve. We like it raw round here.

12/5/10

The IKN Weekly, out now

IKN83 has just been sent to subscribers. We have a new stock pick, we have our quarterly update scorecard on regional political risk for miners, we have bits and pieces about the stocks we follow, we have a whole bunch of words written, too. The winter evenings must fly by, Mr. Ploppy.

PPP (Peru Presidentials Poll): A three horse race?

Today sees the publication of one of the more useful and detailed polling surveys in Peru, the quarterly update run by the Universidad Catolica (PUCP). The whole PDF report is on this link, so go check it out (there's plenty more  stats than just the headline number shown here, too). It's required reading for Peru politic-watchers because 1) PUCP has a good reputation amongst peers and 2) this poll is done on a national level in both urban and rural areas, thus giving a more complete picture of the national trends. Here's the chart:

It's shaping up as a three horse race for the April 10th vote, with Luis, Keiko and Alejandro all looking to make it into the two-person run-off that will happen on June 5th if no candidate gets more than 50% + 1 vote (a virtual lock). Ollanta isn't making any sort of progress, Mercedes (the ruling APRA candidate) has had a month to make her prescence felt and hasn't done much so far, PPK may move up in the next poll due to last week's official launch of his alliance, but his job is to make it past 5% and get his party members seats in Congress rather than expect a serious tilt at the crown.

FWIW (not much) I'm sticking with Toledo as my "he's the least worst" pick, with Castañeda up against him in the run-off....but it's still early in this game.

A lot as been written about Wikileaks...

...and this humble corner of cyberspace isn't going to join in the fest bar the stuff that's 1) LatAm and 2) fun (audience sighs with relief), but I would like to direct you to a most thoughtful and insightful post written by Okke Ornstein on the subject, a hundred times better than the vast majority of guff written on the phenomena so far. Here's the link, go find out for yourself.