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1/14/11

The Friday OT: Chemical Brothers: Star Guitar

The quality of Chemical Brothers music set to the trainiest, trippiest, paintshoppiest video ever.


Warning: This four minute video clip can become addictive.

The easiest way to make money in junior oil and gas plays...

...isn't to study all the charts out there, looking for advantages in RSIs and bollybands and suchlike on hundreds upon hundreds of potential plays.

It isn't doing deep DD fundamental analysis about the companies and knowing more than the next guy about what dozens of companies are doing and where they're going at any given moment.

It isn't about being expert on the world markets for oil, for natgas for all those type of things.

Nope, there's a much easier way of making money in junior O&G. All you have to do is know when Marin Katusa is appearing next on BNN Television.


More on East West Petroleum (EW.v) and its self-fulfilling pump'n'dump that benefits scamster Marin and his pally pals far more than anyone else right here.

Evo whups Santos at footy

Presidential stupid injury of the day award goes to Juan Manuel Santos of Colombia. Here's the translated excerpts of this story:

Colombia President Juan Manuel Santos suffered a sprained left ankle while playing an informal game of football with the Sub-20 national team, about to play in the Sub-20 South American championships in Peru.


"(On Wednesday) the President went to hand over the national flag to the members of the Colombian team that was about to set off for Peru and while playing with them a bad movement caused a sprained ankle in his left foot," said John Ocampo, Presidential press secretary.


After the injury, he was taken to a nearby hospital where the ankle was immobilized using a special sock and was told he had to use a cane for walking while the injury healed.

Peru: New polling numbers for the Presidential elections

Today, decent-enough pollster Datum published this survey and the headline numbers are about the first round of voting in the April 10th Presidential election (hey, not that far away now). Here's the chart your humble scribe has generated from the numbers.


Toledo leads and his support is 1% up from the previous Datum poll in December. Castañeda in second place also gets one extra point (he was at 21% in December according to Datum). Keiko has dropped 2 points to 20% and is now a clear third (we remind readers that if no candidate gets 50% +1 vote on April 10th, the top two go into a run-off for the job).

Amongst the others, Ollanta is steady at 10%, PPK isn't making much progress so far and the trainwreck that is the APRA campaign led up by Meche Araoz is reaping what it sows.

Redhill Resources (RHR.v) Scum changes name, still scum

To paraphrase Juliet Capulet (Act 2 Sc 2), "What's in a name? That which we call a scumbag ripoff scam-laden heap of fetid turds by any other name would smell as putrid." Yesterday the front-running rip-off merchants at ATW Gold (ATW.v) that screwed over their shareholders in one of the worst cases of illegal frontrunning sales seen for a while (and the most bare-faced in 2009, that's for sure), decided that they don't want to be weighed down with the name ATW Gold any more and so they changed it. Here's the NR, here's an excerpt:

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 13, 2011) - ATW Gold Corp., (TSX VENTURE:ATW - News; "ATW" or the "Company"), is pleased to announce that effective January 14, 2011 the Company's new name will be Redhill Resources Corp.
Effective at the opening Jan. 14, 2011, the common shares of Redhill Resources Corp. will commence trading on the TSX Venture Exchange and the common shares of ATW Gold Corp. will be delisted.
The Company will trade under the new symbol RHR: TSX-V.

So this post exists as a warning to anyone in the future that's even thinking of considering in buying a few shares in Redhill Resources (RHR.v). So far you've managed to put the name into Google and that's a good start. What you now need to do is click right here and read how these scumballs treat their shareholders. You'd also be interested in the amount of cheap share options they've recently been awarding themselves too, I'd reckon.

Andrew Bowering, Graham Harris and all the rest of this unsavoury mob at ATW Gold (now Redhill Resources) are the dregs not only of the Canadian market but its whole society. Avoid this scum like the veritable plague.

Chart of the day is....

...Brazil's Bovespa index, Chile's IPSA index and Peru's IGBVL index, so far in 2011.

Guess which one has the most exposure to mining companies? Yes you're right, precisely why it's the one I follow most closely. Waddabout you, minehead? Here's the last three months of the IGBVL for a bit more context:
DYODD, dudettes and dudes.

1/13/11

Alange Energy (ALE.v)

If you want to know why Colombia-based O&G junior Alange Energy (ALE.v) has a stock price that's doing this today....

 oooh, nice volumes!

...you'd do well to start with its NR out this morning. But if you really want to find out what's going on, check out Setty's excellent post on ALE.v right here that explains all and more. You'll understand far more in less time than trudging thru the ALEspin...and most importantly, Setty's got an owl. Go see a real classic example of a Canadian junior trying to bullshit its way out of a hole.

UPDATE: Setty runs a second post, gets comment from the company, makes them look silly again. The old phrase "when in hole stop digging" doesn't seem to have filtered through to those at ALE.v. All in all, there's something rather strange bout this one methinks. And great job of work, Settydude.

Silly House publishes its 2011 "Silliness In The World 2011" report

The big US watchdog on the state of silliness in the World, Silly House, today released its 2011 report. Here's how the report kicks off:

"Global seriousness suffered its fifth consecutive year of decline in 2010, according to Silliness in the World 2011, Silly House’s annual assessment of political silliness and silly liberties around the world. This represents the longest continuous period of decline in the nearly 40-year history of the survey. The year featured drops in the number of serious countries and the number of electoral democracies, as well as an overall increase for silliness in the Middle East and North Africa region."
When it comes to The Americas, the big news is that Mexico has been downgraded to "Partly Silly" from its previous ranking of "Not Silly". Here's the PR and here's the Americas segment:

"Americas:The inability of the Mexican government to protect ordinary citizens, elected officials, or journalists from organized crime caused Mexico’s status to fall from Not Silly to Partly Silly. Other countries that saw declines included Venezuela, where President Chávez pushed through silly legislation just before the formation of a new parliament with significantly more opposition seats. Improvements were noted in Colombia and St. Vincent and the Grenadines."

As things stand, most of The Americas is understood to be "Not Silly" by Silly House. However, there are currently nine countries ranked as "Partly Silly" and seen on this map shaded yellow, namely Mexico, Guatemala, Honduras, Nicaragua, Colombia, Venezuela, Ecuador, Bolivia and Paraguay.

There is of course still one regional country ranked as Very Silly, Cuba (shaded in purple on above map).

OT: far too good not to share

Even by the high standards of Tom Tomorrow, this one is a pearl. Here's the link to the cartoon, here's Tom Tomorrow's site (make use of it) and thanks due to AS for the headsup.

click to enlarge

AQM Copper (AQM.v): Half of 3.25Bn lbs copper? Sorry guys, you're going to have to do better than that

The delayed 43-101 copper count for AQM Copper's (AQM.v) Zafranal project in Peru came out today. Read the thing and find out more for yourself, but the basic takeaway is that M+I+I resource comes to 3.25Bn lbs copper. As AQM controls half of that number (it's a 50/50 split with Teck), AQM is now being valued on this 1.6Bn lbs copper or so. Here's some quick and dirty math:
  • Shares out 104.96m
  • Current PPS: $1.12
  • Market Cap $117.5m
  • In situ value for each Lb copper : 7.34c

Now for sure this doesn't take in the upside potential of finding more copper at the main zone or at the satellite zones. It doesn't take in the decent cash position AQM holds, either (I know there are those of you prefer the EV/lb in situ variant), but this guy looks overvalued to peers at this stage. Meanwhile, let's check the 5 day action in the stock to see what went on yesterday (just before today's announcement) and this morning:


Which is the kind of thing that happens when you employ people from ECU Silver. DYODD.

UPDATE: While putting a quick polish on the post before publishing, this happened:

Tell 'em Owly:

Is Doug Casey a Scientologist?

I don't know personally, but reader 'RM' sent me this link that has the evidence in question and it's an interesting read. I particularly agree with this section from an author obviously well-read in the whacked-out world of Hubbard:

"My objection is not that Casey is a Scientologist, though I think it is legitimate to criticize anyone who knowingly supports the unethical activities of the Church of Scientology.  Rather, my objection is to his making unfounded claims based on Scientology and Hubbard doctrines without being open about his sources.  It's a common tactic by the Church of Scientology and other cults to use front groups and try to conceal their nature until after they've persuaded someone to participate in a program--the Unification Church calls it "heavenly deception."  I've also wondered to what extent Scientology principles are used in Casey's investment advice, and whether Casey has promoted investment in Scientology-related companies, and whether there were any other Scientologists on Browne's financial committee, but I haven't seen any evidence of those things."

Also, interesting is the way the normally err......unafraid to opine Casey has apparently had more than one chance to make a simple denial of his possible Scientology links but has remained very quiet about the subject. Go have a look for yourself.

Chart of the day is....

...the results for a question taken recently by Pew in their regular 'Political Knowledge' poll of US citizens:


So the BP dude gets a better score than the right answer. That's brand recognition for you, folks.

1/12/11

A Tale of Two Cities


Ciudad Juarez: 
Approx population: 1.4m
Number of murders in 2010: 3000 (as recorded December 15th)

El Paso:
Approx population: 620,000
Number of murders in 2010: 5 (yes, that says five)

Don't mess with Texas.

Messages from Dr. Copper and BiiWii

First, Dr. Copper:

Second, BiiWii has a post entitled "Balance" today that's recommended reading. For what it's worth*, as noted in the last two or three IKN Weeklies this humble scribe in general agreement with the squiggly line reader named Gary.

*not a lot

Colombian coffee production and statistical BS in news releases

Grow, grow, grow. The touchstone for any company or association in our wonderful modern world is to show how much your growing and thrusting forward and all that stuff. Now for sure if the growth is genuine and good it's worthy of mention, but the wary ananlyst is always on the lookout for the bullshit layer put on the fun fact and figures.

BS number massaging is found in many spheres and especially true in this author's normal chosen biz subject of junior miners (where the scumball liars come by the dozen). But also true in place like the Colombian coffee scene as noted here yesterday. The jaded numbercruncher (such as your humble scribe) develops a BS-meter that's triggered by this type of news headline and lead paragraph:

Colombia Coffee Production Increased 14% In 2010

Good weather during the first half of last year and the incorporation of renovated areas were the main reasons for the consolidation of 14% growth in production.

What's strange about that one? Well firstly it's a percentage figure only, one of the things that should get your BS-meter twitching. Secondly, there's a certain forced happiness about the lead para (it's a finely tuned BS-meter these days). And thirdly, your author happens to know that Colombian coffee production hasn't been that great recently. So when the forced smiles of a Colombian Coffee Federation news release run against memory, it's off to the stats department we go and a chart we make.


Saying things are great in 2010 by comparing them to 2009 is like saying things are great in Tucson right now because the congresswoman didn't die. But you see this kind of statistical massaging all over the place. I mean, would you prefer a country's economy to have grown by 4% in 2009 and then 4% in 2010? Or do you prefer a country that crashes to 0% growth in the 2009 recession year and then bounces back to 8% the next year? If you prefer the first, you like Bolivia, if you prefer the second, you like Peru (in rounded terms at least). 

Anway, coffee production has been shitty for two years in Colombia and that's the only thing you really need to know about this post (the rest is just rambling). Oh by the way, due to the exceptionally heavy rainfall in Colombia this last couple of months it's going to be crappy in 2011, too. Just so you know.

Chart of the day is....

...gold vs the miners, via this chart that compares the gold ETF (GLD) with the gold miner ETF (GDX).

We're continuing on this recent goldchart fixation because...well...because your author goes through obsessive phases about most things, not just charts. Ask the wife. Anyway, above we see that GDX has outperformed GLD since the dog days of early 2009, but not by a stunning amount either. This is probably because the three biggest holdings of the ETF, namely ABX, GG and NEM that combined cover nearly 39% of AUM at GDX, have been there-or-thereabouts with gold all this time, as the next chart shows:


So if you want leverage, the smaller your gold mining company the better. DYODD.

1/11/11

News roundup (keeping you slathered in ketchup and mayonnaise since 2008)

"There shall in that time be rumours of things going astray, erm, and there shall be a great confusion as to where things really are, and nobody will really know where lieth those little things with the sort of raffia-work base, that has an attachment. At that time, a friend shall lose his friend's hammer, and the young shall not know where lieth the things possessed by their fathers that their fathers put there only just the night before, about eight O'Clock."

Bulls make money, bears make money, dumbasses who chase after stupid-assed rumours get their asses slaughtered (and did i mention 'ass'?). Click here for very good Bloomie article on how short selling all the market buyout rumours in 2010 would have made you a cool 14% annualized return on all trades.

Colombia coffee production up 14% YoY. Later on we'll show you why this apparently good number is in fact a crock. Please be watching this space thank you.

Gold looked perky this morning but has fallen back a touch. And as usual Jon was right. If you follow the Au mkt you need to read 'gold this morning' every weekday.

Another good reason to be a regular BiiWii reader is Gary's coverage of the Gold/Silver Ratio (GSR). Another installment today.
Inventories? We don't need no stinkin' inventories.

Colombian farmers sue BP because they're crap about protecting the environment and stuff. Now where have I heard something like this before?

HudBay Minerals' (HBM.to) special brand of community relations coming to Peru

The thing about this Constancia place in the southern region of Peru is that the community relations between it and the exploration mining companies there hasn't always been the best. Things got a bit better last year when explorer Norsemont (NOM.to) finally got permission to access land that is part of its concession but still dosn't own and the local villagers around there have been given workshops and committee time to understand what the arrival of a big mining operation would mean, but it's still not the most welcoming place in all the highlands, gotta be said (ie the welcoming ones sell surface rights, they don't just say "yeah you can walk on my land"). Which brings us to the likely new owner of the project and their idea of community relationships with indigenous peoples. The (proposed) new owner of Constancia is HudBay Minerals (HBM.to), that made its offer for Norsemont (NOM.to) yesterday. So  let's recall its caring and loving way of community relations used recently in Guatemala via the words of a woman local to its Fenix project there:

"Just over a year ago, my husband, Adolfo Ich Chamán, was killed by security forces employed at the Fenix mining project in Guatemala – a mining project owned by Canadian company HudBay Minerals. In the afternoon of September 27, 2009, I watched my husband leave our house for the last time. I later learned that mine security forces had surrounded my husband, dragged him through a gap in a fence and hacked at him with machetes. Then the mine’s chief of security shot him in the neck at close range. This attack was unprovoked." CONTINUES

Adolfo Ich Chamán died because he had led a protest group against the Fenix mine. Now for sure Peru isn't Guatemala and there's always going to be apples-to-oranges comparatives between the community relations a mining company has with its locals, but in light of the pisspoor human rights record that the murderers at HBM.to have, it might be nice to get a quote or two from them about how they plan to treat the Peruvian local communities...before they start hacking them to death or shooting them, that is. It might save a lot of bother in the long run.

Mining PRs and the Ottotrans™, Part 34


Today no less a figure than Eric Sprott gets to step into the Ottotrans™ limelight thanks to his comments in yesterday's NR out of Sprott Physical Silver Trust (PHS.U.to)(PSLV):

This is what they said:

Sprott Physical Silver Trust Updates Investors on the Delivery Status of its Silver Bullion Purchases

TORONTO, Jan. 10 /CNW/ - Sprott Asset Management LP is pleased to provide investors with an update on the delivery status of silver bullion purchased by the Sprott Physical Silver Trust (NYSE ARCA: PSLV, TSX: PHS.U) ("Trust"). 

As of November 10, 2010, the Trust had contracted to purchase a total of 22,298,525 ounces of silver bullion. As of December 31, 2010 a total of 20,919,022 ounces of silver bullion had been delivered to the Trust. The Trust expects to take delivery of the final 1,379,503 ounces of silver bullion by January 12, 2011 and will subsequently publish the serial numbers of all bars held by the Trust on its website: www.sprottphysicalsilver.com. 

"Frankly, we are concerned about the illiquidity in the physical silver market," said Eric Sprott, Chief Investment Officer of Sprott Asset Management. "We believe the delays involved in the delivery of physical silver to the Trust highlight the disconnect that exists between the paper and physical markets for silver." 

Additional detail on the Trust can be found in the final prospectus available on EDGAR (www.sec.gov/edgar.com) and SEDAR (www.sedar.com) or on the Trust's website at www.sprottphysicalsilver.com.
And this is what it means:

Sprott Physical Silver Trust Updates Investors on the Delivery Status of its Silver Bullion Purchases

TORONTO, Jan. 10 /CNW/ - Sprott Asset Management LP is pleased to provide investors with an update on the delivery status of silver bullion purchased by the Sprott Physical Silver Trust (NYSE ARCA: PSLV, TSX: PHS.U) ("Trust").

As of November 10, 2010, the Trust had contracted to purchase a total of 22,298,525 ounces of silver bullion. As of December 31, 2010 a total of 20,919,022 ounces of silver bullion had been delivered to the Trust. The Trust expects to take delivery of the final 1,379,503 ounces of silver bullion by January 12, 2011 and will subsequently publish the serial numbers of all bars held by the Trust on its website: www.sprottphysicalsilver.com.

"Frankly, we know exactly who our potential investors are, that bunch of wild-eyed tinfoilhat silverbugs who want to invest in silver bullion but don't trust anyone with their cash," said Eric Sprott, Chief Investment Officer of Sprott Asset Management. "We believe that rattling on about delays involved in the delivery of physical silver to the Trust, however marginal and unimportant, will stoke the fears of these nutters a bit more and get them running to us instead of that  freakin' SLV ETF that's taking all our business. It's funny if you think about it, because if the financial system goes down the drain we're all screwed and you won't be able to monetize the silver bullion we're holding for you, but we're pandering to paranoia here and not trying to be logical. Business is business, you know."

Additional detail on the Trust can be found in the final prospectus available on EDGAR (www.sec.gov/edgar.com) and SEDAR (www.sedar.com) or on the Trust's website at www.sprottphysicalsilver.com.

Chart of the day is....

...gold in 2011, with deep and meaningful comments included in the chart.

IKN suggests that you dudettes and dudes out there DYODD.

1/10/11

FT Tilt

Today is launchday for FT Tilt, a new service from the Financial Times aimed at covering Emerging Markets. It's set up like a blog, has a dozen staff and is important enough to have been reviewed by econoblog royalty like Felix Salmon over at Reuters (and others like Kedrosky, but we don't care about him), with Salmon's call on the site "a blog with a paywall", which might just turn out to be unfair (see below).

IKN recommends that readers click through, check out the site (it looks great and the article filtering system is smart) and sign on for the free trial of its Pro Level. Sadly that will become a pay service after a while (I dunno how long) but the other bits on the site stay free, so your effort won't be in vain if you don't want to shell out.

But paysite or freesite, Tilt will thrive or fail on the quality of information available there and so far your author has been quietly impressed (for example I learned something today about Brazil's Sov Wealth Fund that I didn't know and what's more it fits right in with something expected from the new Dilma gov't). And even though Tilt is set up to cover all the world's EMs and not just your author's beloved region, anything that betters the quality of information in the English language about this corner of the world's Emerging Markets should be welcomed with cheers and fanfares. We hope FT Tilt works, we hope IKN readers join and make use of it, we hope people get to understand Latin America and other EMs a little more because of it. Here's the link to Tilt again, go use it.

Greystar Resources (GSL.to): A ray of hope for CampbellSoup and the Can of Corn

IKN once again performs an act of charitable kindness to the Canadian equities analysis community, this time offering a glimmer of hope™ to Nicholas CampbellSoup over at the Can of Corn, currently bogged down with what's looking more like a disaster buy call on Greystar Resources (GSL.to) back in November when it was trading two full dollars higher than now.

This is from IKN88 yesterday, Soupy. Enjoy.

Colombia’s new mining code may be declared inexecutable
A development out of Colombia that sounds like it may delay mining development on one level but, strangely, may help one specific and polemic project move forward to construction.

Last week Colombia’s national procurator (9) asked that the current mining law reform be declare inexecutable, because 1) due to the fact that Colombia is a signee of the International Work Organization’s Covenant 169 that guarantees indigenous populations the right to decide on the future of mining projects and that 2) the new mining code was not presented to said populations for their approval, it cannot be implemented. Apparently, at least. We shall see.

Over the medium-term this may become a setback for Colombia’s mining industry as it tries to reform old and often difficult to work rules and regulations. The potential for bureaucratic bottlenecks is clear, but on the other hand if the current mining code is declared null and void it may allow Greystar (GSL.to) to move forward with its Angostura project, unfettered by the new environmental code that protects about 50% of the land on which it wants to develop its mine.

The IKN Weekly is not calling GSL a buy at this point and the potential for unhindrance of rules that may help GSL is by no means a done deal, but it is a story we’ll be watching carefully in the near future for developments.


María Elena Walsh: ¡Yo Si Me Acuerdo!

I was late to María Elena Walsh's work but friends of mine that grew up in Buenos Aires told me about her, so the move she made to anti-dictatorial poems and songs from her children's stories background made for an interesting window on Argentina's past. Today she died after a long illness.

This Walsh song, "El Pais De Nomeacuerdo" (the country of "i don't remember") was the theme for the 1985 (had to check the date) movie 'The Official Story" on Argentina's Dirty War that won that year's Best Foreign Film Oscar (which is, by the way, an excellent film and must see material for anyone interested in the modern history of South America). A song that bridges the gap between her own works and is also an insightful comment on how a Dictatorship manages to flourish. As befits an excellent poet such as Walsh, its lyrics are both simple and deep.


María Elena Walsh 1930-2011 QEPD.

So what does Cormark think about Base Metals in 2011, Otto?

Well funny you should ask that, because just this morning those nice people at Cormark delivered a 32 page tome of loveliness on base metals and prospects to the marketplace. Click through and download your own copy of the PDF, but by way of a taster here's the covering letter that came with the note. Good stuff.

Base Metals - Deficits Looming On The Horizon As Demand Poised To Outpace Supply - Monday, January 10, 2011 
With metal prices in Q4/10 sustaining levels above our recent forecasts, we are taking this opportunity to adjust our commodity forecasts. We have also adjusted our long-term assumptions modestly to reflect the ongoing weakness in the US dollar. Driven by continued growth in China, an emerging India and a slow but recovering western world, we maintain the view that the supply side response will be insufficient, especially for copper, coking coal and zinc, thereby pushing prices higher. While the recent run up always leaves room for a correction, we believe the fundamentals remain robust and the ongoing weakness in the US dollar coupled with inflation uncertainty should only add to the price support. As such, we see the price strength continuing in 2011 and believe material price spikes are not out of the question. On the equities side, we would look for M&A activity to heat up given the robust cash position within the industry and the need to commit to new supply over the medium term to alleviate market tightness.  
In light of our revised price deck, we have updated our near-term earnings and cash flow estimates. We have also adjusted our target prices and recommendations based upon our revised outlook and current market prices. Our valuation methodology remains unchanged. In general we continue to view the sector as a blanket buy and maintain it is prudent to have an overweight position.
DYODD

Bayfield Ventures (BYV.v) is IKN's twittery friend

Is 'friend' what you say when somebody follows you on twitter, or is that just Feibu*? I forget the protocols and etiquettes of Webz2.0. Anyway, when your humble scribe finished up and sent his weekly missive last night he then trundled over to the IKN Twitter account to see what was going twit and a joyous little piece of news awaited him. The guys over at Bayfield Ventures (BYV.v) have decided to be special followers of IKN as you can see here

This, thought your humble scribe, was wondrous news as I wrote at the time.....
"Great News! Bayfield Resources Ventures (BYV.v) has decided to follow IKN's tweet a/c! @Bayfield_BYV Do they follow Marin Katusa too?"
 ......and a great chance to pose a couple of questions to the team at BYV.v about how things are developing. So far I've sent them this question....
"A great chance to ask some Qs, no? Hey @Bayfield_BYV why all that luckily timed inside selling while running financing over $1?"
...and also this question. 
"Hey @Bayfield_BYV why so slow with ALL the drilling results? What's wrong, don't you want everyone to see all the info?"
 Sadly, they haven't replied as yet, but I'm sure they'll get round to it. Meanwhile, how's that stock doing, Lobito?

Hey...moving down towards 65c, Lobito! You're right again, Lobito! (gotta love lobito)



*Facebook in Spanish...seriously

Definitely no leaks on this takeover story....

...oh, no no no no no...perish the thought.....


Hey, I can't say much cos I've never been a big fan of Norsemont's (NOM.to) project and have missed a decent winner due to my bad. However, what does come to mind is the sudden change in direction Candente (DNT.to) took at the same time. Did somebody flip a coin in HudBay's boardroom or something?  

Never mind...next please...

HudBay Minerals Announces Agreement To Acquire Norsemont Mining 
Press Release Source: Norsemont Mining Inc. On Monday January 10, 2011, 6:00 am EST

HUDBAY'S COMBINED ANNUAL COPPER PRODUCTION EXPECTED TO INCREASE BY APPROXIMATELY 145% FROM 2011 LEVELS
Editors Note: All amounts listed are in Canadian dollars unless otherwise indicated
Highlights
  • Norsemont shareholders will receive 0.2617 HudBay shares and $0.001 in cash, or $4.50 in cash, subject to a maximum aggregate cash consideration of $130 million.
  • HudBay's offer represents a premium of 33%(1), based on the volume weighted average trading prices of HudBay and Norsemont on the TSX for the 20 trading days ended January 7, 2011 of $17.76 and $3.49, respectively.
  • Norsemont's Constancia copper project has excellent infrastructure in an established mining district in Peru.
  • HudBay's future combined copper production is expected to grow by approximately 145% between 2011 and 2016, as a result of bringing Constancia into full production. Constancia will also contribute to HudBay's gold equivalent production, which is expected to increase 130% during the same period(2).
  • The Norsemont acquisition is expected to increase HudBay's mineral exposure on a per share basis and is expected to deliver per share growth in HudBay's net asset value and long term earnings and cash flow.
  • The transaction is consistent with HudBay's strategy of acquiring porphyry or VMS deposits with exploration upside in mining-friendly jurisdictions in the Americas, with the opportunity to add value through exploration, mine development and operational expertise.
  • With $1.2 billion of available cash and credit lines, and strong cash flow from existing operations, HudBay is in an excellent position to finance construction of the Constancia project.

CONTINUES HERE

Chart of the day is....

...the US Dollar index (USD), daily:

 So we were all gonnna die in September, right? QE2 was going to pummel the dollar to nothing in October, remember?The fate of the USA was to be crushed under Bernanke's stupidity in November, or so I heard over at Kitco commentaries about 45,000 times, at least.

So what went wrong, Ludwig? Ah, yeah of course...the cartel conspiracy boyz or summink...

1/9/11

The IKN Weekly, out now


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News roundup (we dare to use words like 'reload' and 'crosshairs' before they're banned on the interwebs by President Palin.)

Death by caffeine. Apparently it'd take about 700 cans of Coca-Cola or 200 shots of espresso to kill me. How 'bout you? Sillyfun interesting site.

Ecuador votes to make organ transplant donations automatic. You're allowed to opt out if you want, but those who don't get to donate organs if their time comes to an end early. IKN applauds this move.

Colour me unsurprised. "Residents of Colombia oil patch complain boom is passing them by" say the L.A Times. "It's like deja vu all over again" says Otto.

How many dead miners in Peru in 2010? Sixty-three dead miners in Peru in 2010.

And a very happy birthday to my sister, who turns older today.