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8/20/11

Miss Universe Chile goes copper mining


In the interest of the ....errr...extensive coverage given by this humble corner of cyberspace to all things LatAm and mining, it's only ......errrrr....scientifically correct that the following is brought to your attention.

On September 12th, we get the Miss Universe Pageant in Sao Paulo Brazil this year and Chile's representative, Vanessa Cerati, has decided to pay homage to her country's mining industry (and milking dry "The 33" story into the bargain, of course)  by going to the gig in a dress made of copper, with miner's hat and pick as accessories.


See the whole thing here.

Antonini Wilson is on Twitter

Hey, who remembers Antonini Wilson, the big guy (quite literally) at the centre of the Suitcase scandal between Venezuela and Argentina way back when Cristina was a newly minted President? Well back than IKN followed the story quite closely (whole range of posts found on this link), but that's not the news today.

The news is that Antonini Wilson has decided to be a twitterer, so follow his fun and frolics (bilingual tweets, so there's something for everyone) right here.

The week in gold (GLD) silver (SLV) their miners (GDX) and their juniors (GDXJ)

How was it for you, darling?


So despite all the headlines captured by gold the metal and its all-time highs, it was silver (SLV) that performed best over the course of last week. We're not saying gold (GLD) did badly however, because 6%+ in just five trading days for the essence of money is a rip-roaring display. The miners (GDX) also did well which is a good thing and might just loosen a few of the "long gold short gold miner" positions held by hedgies these days, but the juniors (GDXJ) not so great, just managing to eke out a week-over-week win

8/19/11

The Friday OT: Steppenwolf; Born to be wild

Not only is the track a rock-out classic, this 1969 B&W video of the band in action is its own little pearl of a rarity.


High in the ranking of world's most irresistible guitar riffs. Heavy metal thunder.

Portage Resources (POTG.pk) versus East Asia Minerals (EAS.v) versus Gold ETF (GLD) versus Silver ETF (SLV)

Here's a chart that starts on June 15th 2011. That date is chosen because it's basically the day that the criminal bullshit pump and dump operation kicked off on Portage Resources (POTG.pk). Since that time:


1) We saw the pump and then the dump, classic pattern, sheep shorn, scumbags run away with the money. POTG.pk is now down 47% from the start point.

2) Meanwhile, gold (GLD) and silver (SLV) are both showing decent gains.

3) But strangely East Asia Minerals (EAS.v), the recommendation of Casey Research's Louis James he first called in May 2011 and has seen its reco refreshed on several occasions since then, is down even more than POTG.pk. In fact EAS.v has dropped 65% in the same time as the POTG pump and dump has been operating (it's also down 78.6% since that original Lobito reco in May).

Now I dunno what to make of all this, but perhaps there's a market lesson to be learned here?

Quote of the day...

...goes to President Juan Manuel Santos of Colombia for this:

"President Chávez is a stabilizing factor in Venezuela and stability is always a very important element in politics, not only internally but externally."

So you guys up there, just keep on believing what you want to believe, but down this way we prefer reality. And by the way, I adore the fact that I was wrong about Santos. I thought he was going to be an Uribe clone, but far from it; he's an excellent President and Colombia should be proud of both him and the choice it made at the ballot box last time around.

The classic and infallible short-term top signal on gold bullion has just been triggered

I go to Kitco and get....

Service Unavailable

 ...as a reply.

UPDATE: Gary BiiWii backs this up with his post on Sentimentrader and public opinion on gold.  And before you start, no I'm not saying that you should sell your gold bullion, nothing like that at all. Frankly, if you only hold bullion you shouldn't even be watching intraday action, you should be out playing games with people and laughing and enjoying life. Leave the worrying bit to the damnfools like your author who get a kick out of following junior miners.

Chart of the day is...

...the gold/copper ratio over the last three years.

Yep i'm still totally obsessed by gold and copper, that's needs an apology. While I'm at it, I'll take the chance to apologize for my compulsive/obsessive behaviour in general.

I digress. So here's the gold/copper ratio and it's flashing up the same kind of signals you can find over at the gold/oil ratio, just for one. Question is, will this top out now like it did mid 2010, or are we going to start climbing higher and match the 2008/2009 spike? You be the judge!

And here's one for all us gold longs (even the rampant goldbug types as, fortunately, there's enough love for everyone in this world including those who prefer to hate for a living):


enjoy

Gold overnight

A chart

Just after midnight EST, a new all-time high (in dollars at least) for Au.

8/18/11

Good news for holders of Great Panther Silver (GPR.to) (GPL)


It looks like the company has got its concentrate sales problems out of the way now. This must be why the stock is up and breaking trend this morning. Here's the link to the NR, here's the main bits of the content:

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 18, 2011) - GREAT PANTHER SILVER LIMITED (TSX:GPR)(NYSE Amex:GPL) (the "Company") is pleased to announce that it has commenced the shipment of silver-gold pyrite concentrates from its Guanajuato operation to a new buyer in Mexico. The first delivery of 100 tonnes started today and is the first of many shipments which will allow the Company to reduce the backlog of concentrates at its Guanajuato mine. While second quarter revenue was lower as a result of the unsold concentrates, it is considered to be a short-term issue. The additional new sales are expected to return strong revenues in the third and fourth quarters. Great Panther also operates the Topia silver-gold-lead-zinc mine located in Durango State, which sells its silver-rich lead and zinc concentrates under a separate contract.

The Guanajuato operation currently produces over 250 tonnes per month of silver-gold bearing pyrite concentrates. Great Panther has a one-year contract to sell Guanajuato concentrates through a metal trader to an overseas smelter. However, the smelter is fully supplied with concentrates and has reduced the quantity of purchases from Guanajuato. Consequently, the Company has sought out, and found, an alternative buyer. As of today, concentrates are being trucked to an efficient Mexican plant producing Dore bars (containing mostly silver and gold), which are marketed to a refinery where fine silver and gold is produced. The plant has surplus capacity over the requirements of its own mine and, from extensive test work, has been found to be suitable for the recovery of gold and silver from Guanajuato concentrates. Terms of the new sales agreement are competitive and should allow the backlog to be reduced to normal levels by year end, resulting in higher revenues in the third and fourth quarters of 2011.


So now that 1) they're selling what they produce correctly and 2) they've decided to be honest about their true costs and 3) there's a plant expansion close to coming on line, this stock might just turn out to be a buy at these levels...after all these years too. So subscribers, we'll go into to numbers in this weekend's IKN Weekly, see what's what and make a measured decision. DYODD.

Tug of war

General WeAllGonnaDie type panic in the broader markets doesn't seem to be spreading to the junior miners...so far at least. For sure the base emtals issues are under more pressure (e.g. check out NCU.to under $4 again) but for the PM names, there's a tug or war going on. Do they sell off with stock or do they rise with bullion?

I'm off out to spend time with the wife now so won't be watching the show, but it'll be interesting to see how our chosen sector holds up (or not) today. What I will say right now is that, once the waves of panic are done it'll be very bullish for juniors if they've held on to most of the gains since the very recent market spike low (all that US debt ceiling and S&P thing, remember?). Even the TA lovers would agree that higher lows are cool.

Anyway, enjoy the fun and catch you later.

Mining PRs and the Ottotrans™, Part 43


Today's tranche of junior mining NR crunchy goodness comes from Greystar Resources (GSL.to), so let's  dive right in:


This is what they said:
August 18, 2011
Greystar Changes Name to Eco Oro Minerals Corp.
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 18, 2011) - Greystar Resources Ltd. (TSX:GSL) ("the Company" or "Greystar") announces that the Company has changed its name to Eco Oro Minerals Corp. effective August 16, 2011 pursuant to the Articles of the Company and as approved by the Company's board of directors on August 10, 2011. It is expected the common shares of the Company will commence trading on the Toronto Stock Exchange under the Company's new name on Friday, August 19th. The trading symbol will change to "EOM".

And this is what it means:
August 18, 2011
Greystar Changes Name to Eco Oro Minerals Corp.
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 18, 2011) - Greystar Resources Ltd. (TSX:GSL) ("the Company" or "Greystar") announces that the Company's name is mud in Colombia after all the crap that's gone down, so were changing the name. In this way we can pretend it isn't us and all that happened before didn't happen. And hey, let's throw that "eco" term into the new name, because after all gold mining is such an ecological and environmentally friendly activity, isn't it?

About Greystar Resources Ltd.

DYODD



The Venezuela gold news

Yes, your author has watched the newsflow on the Chávez "nationalize it" for the gold sector and yes, thanks to all for sending me over reports and suchlike, it's always greatly appreciated.

However somebody who's done the real strong legwork here is Setty, so go over to his new post right now because he reports on what Andre Agapov of Rusoro (RML.v) thinks of the whole deal. It starts like this:

Rusoro says no worries as Venezuela moves against gold miners

Venezuela’s only private-sector gold miner says it has nothing to worry about after President Hugo Chavez says he will nationalize the gold mining sector.
It’s “not a concern for us at all,” Andre Agapov, president and CEO of Rusoro Mining, said late yesterday in a phone interview. “This is all to do with illegal mining activities, nothing else.”

Now go read the rest, cos there's tons of information waiting for you. Great stuff Settydude, chapeau.

Chart of the day is...

....well it's gold, innit?

What if gold made a new all time high and nobody noticed?

8/17/11

OT: Cookie Monster sings Tom Waits' "God's away on business"

This is why the interwebnetpipes was invented.

Fundamentals matter, junior silver producers edition

Any further questions, charties?

(click chart to enlarge)

If you can't read a quarterly (or perhaps worse, you think you can but you can't) please make like Snagglepuss and Exit .....Stage Left



Heavens to Murgatroid!

Golden Minerals (AUMN) (AUM.to): Whatever happened to that $104 price target, Adam Graf of Dalman Rose?

Some research reports stick in the brain more than others and one that did just that for your humble scribe was the note written by Adam Graf of Dalman Rose & Co and published on October 1st last year. The subject matter was Golden Minerals (AUMN) (AUM.to) ( $AUMN ) and the reason it was memorable wasn't for its 35 pages of fun, frolics and pretty maps, but for its price target. 

That's because Adam Graf decided to place a $104 target on what was at that time a $15 stock.

Yeah really, and if you don't believe me, take a look yourself as here's a Scribd copy of the thing and a fascinating journey into "what could possibly go wrong" it is. This humble corner of cyberspace urges student of junior mining and the anal ysts that comment upon them to read and digest. Plenty of lessons to be learned there.

So anyway, cut to today and let's see how $AUMN has done compared to Graf's call


Oh dear. 

Something else worth noticing is that not everyone took the same bullish attitude towards the future of AUMN as Adam Graf. For example the company head honcho, Jeffrey Clevenger, who sold half a million dollars' worth of his own stock in February. Turns out that was pretty good timing, which must come as a shock to us all. DYODD, dudettes and dudes.

Chart of the day is...

...again copper (this time the weekly), because if you're not watching the tug'o'war going on in this metal right now you're either 1) not interested in metals* or 2) way too obsessed with the shiny ones for your own good.

For the time being this chart is as close to the centre of the metals universe as it gets.


*which is a very smart attitude to take, frankly. However your author and many of the readers round here are a lost causes

8/16/11

Joe Mazumdar of Haywood Securities, revisionist and track-coverer

Reader 'AF' alerts your author to a bit of revisionist history that seems to have been directly prompted by your author's post of yesterday afternoon and linked here with the original words found in the Gold Report note. AF writes:

I read what JM said and it is not what you have in italics


From your link


"The former president of Peru, Alan Garcia, was very positive about resource development including mining, oil and gas. He took a stand in an area of southeastern Peru where he sought to allow development of some projects that the local indigenous people, the Aymara, were against. Garcia basically rescinded the original decree to mine that area prior to the new president, Ollanta Humala, taking office on July 28"


You have this in Italics


"The former president of Peru, Alan Garcia, was very positive about resource development including mining, oil and gas. He took a stand in an area of southeastern Peru where he sought to allow development of some projects that the local indigenous people, the Aymara, were against. New President Ollanta Humala took office July 28 and has basically rescinded the original decree to mine that area."

Interesting, huh? Instead of saying "I was wrong", dumbass-on-LatAm Joe Mazumdar of Haywood Securities prefers to slip out the back Jack make a new plan Stan and get his original dumbassery altered so that it kinda fits the facts and it goes without saying that no hint of the edit can be found in the newly altered piece. However the new sentence makes no sense whatsoever when compared to the sentiment in the first part of the paragraph, so maybe that needs tinkering with now, too. 

Oh and bad news Joe. You can't deny your revisionism because I get Gold Report on RSS and in that version the original sticks, just like it was.

Got any theories on 9-11 while we're at it, Joe?

UPDATE: Now it's REALLY bad luck, Mr. Joe Mazumdar, because it turns out your note was syndicated all over the place in the original version. For example here and here's the paydirt:

M: The former president of Peru, Alan Garcia, was very positive about resource development including mining, oil and gas. He took a stand in an area of southeastern Peru where he sought to allow development of some projects that the local indigenous people, the Aymara, were against. New President Ollanta Humala took office July 28 and has basically rescinded the original decree to mine that area. He is also planning a new tax and royalty on miners. Peru remains a very prospective country for gold, silver and copper, among other metals, and foreign direct investment has had an important role in reducing poverty over the past few years. So although I believe that mining investment will continue-Newmont and Buenaventura have recently approved the development of the multibillion dollar Conga copper-gold project in Peru-an investor should lever him or herself to companies that are comfortable permitting and developing projects in this environment. My pick would be Minera IRL; its senior management team predominantly resides in Peru and is levered to the new geopolitical paradigm in Peru.

Joe = pwned

A Dilbert

Reader 'PV' alerts your author to the brilliance that is Dogbert

Dilbert.com

more here

Colombia: Oh just the six election candidates murdered this week is it?

Top EngLang source on the country, Colombia Reports, brings us the chilling news. Here below is a small extract, read it all right here:
Six candidates in Colombia's upcoming local elections have been murdered in the last week alone, the Polo Democratico’s Camilo Romero told the senate on Tuesday.
According to Colombian media, Romero painted a bleak picture of the coming elections. According to the senator, 27 candidates have now been assassinated, while at least 66 more have received threats and been pressured to drop out of the race.
CONTINUES HERE

How junior mining analysts admit mistakes

1) The method used by honest, mature adults that understand that you can't possibly pick 100% winners all the time.
"I'm sorry, it was a bad pick. It's time to admit that and take the loss, heavy though it might be."

2) The method used by bullshit pumpers and liars who think far too much of themselves to be of any use to their client base:
"We see this temporary downturn as an excellent opportunity to average down and pick up some great priced etc etc blah blah BS BS snooze....."

As East Asia Minerals (EAS.v) is now 75% down (wow! now that's a loser) from the time Louis James of Casey Research recommended the stock as a buy just four months ago (wow! now that's quick), we wait with bated breath to see which method he uses in the next edition of his International Speculator monthly newsletter, coming 1st week of September. 


Watch this space.

Madre de Dios: Latest photos of the environmental disaster

Via the twitterfeed of wonderful Frank Bajak, the AP reporter who's been there and reported on the shame of all Peru, your author is given the headsup on the latest set of photos from the Madre de Dios region of Peru featured on the reliable eco-site Mongabay. Here's just one in the extensive collection there, make a point of clicking though to see them all.


Words fail me. I mean, disgusting is just scratching the surface. More photos here (and be warned, they don't get any prettier)

President Mauricio Funes of El Salvador interviewed by Al Jazeera

As usual, the excellent Tim's El Salvador Blog brings us a headsup to good content about his subject of choice. Here's a great interview with President Mauricio Funes by Al Jazeera (the news media we've extolled at IKN for years due to its strong regional coverage).


Take 24 minutes out and watch this one. Well worth it.

The most interesting bit in Bear Creek Mining's (BCM.v) 2q11 report

The Bear Creek (BCM.v) 2q11 was filed today and the best bit is right here

In August 2011, the Company reached an agreement with land owners and occupants at the Corani project to acquire all remaining surface rights access needed for mine operations as identified in the Prefeasibility Study for the Corani project. The Company expects that additional surface rights access agreements will be required to conduct mine operations as defined in the Corani feasibility study, which is expected to be completed in Q4 2011.

In other words, since the rumbles and problems at Santa Ana, BCM has been active community-wise at its much larger Corani project and reached some pretty significant agreements with them, too. So much for the illogical fears up North about BCM losing Corani to unhappy locals. We can perhaps also infer from the above paragraph that the FFS is going to grow Corani even more.

Oh ECU Silver (ECU.to), can I count the ways I love thee?

Never failing to provide enormous guffaws Chez Otto every three months or so, the 2q11 earnings numbers are out at ECU Silver (ECU.to), though "earnings" is a very loose term when it comes to the worst cam dog of a silver mining company out there. TO THE CHARTS, I SAY!

Incredibly, not only did ECU.to report a loss during this amazing price environment for silver and other metals, it also reported its biggest net loss since the dog days of late 2008, $4.386m.


Assets stood like this (cash down to just $656,000, by the way)


Here are liabilities and, oh surprise, the current column is creeping up again.


Working capital is now at negative $16.6m


Meanwhile, the CEO Michel Roy gets $450k+ in cash salary and minions get $250k payouts, all paid for by these sparkling results. Numbers do NOT lie, however bullshit pumpers do. DYODD.

UPDATE: At 09:35am EST, about 45 minutes after this post went up and five minutes into the trading day, the scam runners at ECU.to finally get round to telling their sheep about this latest round of results. Find the NR here.

Chart of the day is...

...the US Dollar index.

The valley of Joachim, Joachimsthal, is a place now located in the Czech Republic. In the 15th century, very high grade silver veins were discovered there. The mines were run by the Count of Slik and the coin minted there was named after the location and called the Joachimsthaler, later popularly shortened to simply 'Thaler'. The Thaler quickly gained a reputation as an uncorrupted and reliable coin and became popular all over Europe. Its name was later linguistically corrupted by some country languages. In Denmark, for example, it was known as the 'Daler'. With the discovery and population of the New World, the name of Europe's most reliable coinage was adopted for its new money, the dollar.

I like the fact that the origins of the word dollar are so tightly connected with silver and the want to associate with reliable currencies.

8/15/11

The highly acclaimed 'Dumbass-On-LatAm-Pretending-To-Know-What-He's-Talking-About-Dumbass-Financial-Professional-Dumbass' award today goes to....

...Joe Mazumdar of Haywood Securities for this little resumé of what happened to Bear Creek Mining (BCM.v) at Santa Ana in Peru.

"The former president of Peru, Alan Garcia, was very positive about resource development including mining, oil and gas. He took a stand in an area of southeastern Peru where he sought to allow development of some projects that the local indigenous people, the Aymara, were against. New President Ollanta Humala took office July 28 and has basically rescinded the original decree to mine that area."

What you say to that then, Owly?

Seriously dude, if you can't get basic facts right why the devil should we believe any of the opinionated tosh that comes out your cakehole? It was Alan García who rescinded Santa Ana's concession and blocked mining development there, not Ollanta Humala, and on the executive order is all the proof you need (i.e. Twobreakfasts' hand-written signature). So what was that about Alan 'taking a stand' again, dumbass gringo? Here's the IKN suggestion du jour for you and all other bullshit spin artists who tell versions of stories that fit their own prejudices:


UPDATE: Don't miss out on part two of this fascinating look into the world of LatAm stupid, right here.

That Bloomberg freebie offer thing

It turns out that the freebie offer from Bloomberg for its 'Bloomberg Government' service we ran over the weekend was more popular than this humble scribe thought it'd be, so to give all you hard-working cubicle population type people a chance to hook up, get your free live demo and impress your boss into giving you a raise in a few weeks' time, here it is again. As before read the Blurb below then click and sign up, 100% free stuff and no obligations, no sensitive numbers required etc etc.

subscribe
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Fortuna Silver (FVI.to) headsup

At 12 midday EST Monday August 15th (that's 26 minutes from now), Fortuna Silver (FVI.to) is running its 2q11 conference call. You can tune in by clicking right here (do it just a couple of minutes before 12).

It should be an interesting CC and worth your time, longs. DYODD.

Update: Just three questioners, so it was a bit flat in the end. Good info on Caylloma early on, but overall I'd say it would have been better to spend time listening to this cool groove (tx RB)

U.S. Silver (USA.v) puts in a good quarter

Here's the EPS chart from the more extensive chart-set that subbers will get to look at on Friday (target price confirmed on these numbers guys, btw):


The $6.5m net for the quarter is a 2.2c EPS which means on a simple straight line multiple we're looking at a 7.4X PE here. But even that doesn't take into account that things are going to get better at USA.v in the quarters to come. Today's NR right here.

FWIW* The IKN Weekly had earnings forecast at $6.3m. I'll take that as a win :-). DYODD.

*not much

Chart of the day is...

..the price of copper these last five days.

Three for bad four for good, Rainman.

8/14/11

At last, an insightful analysis on the new, quiet Ollanta Humala

For two weeks after his inauguration, Ollanta Humala kept away from public announcements, press conferences, impromptu street declarations etc and basically drove the idiot Lima chattering classes crazy. All sorts of commentaries were run on the quiet Humala, but it's taken until now to get a really top quality insightful article written in English about what's been going on (it's a cut above 99% of the things written in Spanish too, for that matter).

You want smart analysis on Peru political and social affairs? Look no further than Cynthia Sanborn, somebody who really knows what she's talking about (don't believe me? check her CV). Here's how her article starts, click through for more.

On July 28, 2011, Ollanta Humala gave his first official message to the nation, after being sworn in as President by the new Congress.  According to pundits, it did not go so well.  An initial salute to the Constitution of 1979 (replaced in  1993 under autocrat Alberto Fujimori), provoked such cheering and jeering in the chamber that those present, including most Latin American heads of state, could barely hear the speech.   The most vociferous was Dr. Martha Chavez,  leader of the fujimorista opposition, and her 47 minutes of heckling suggested an ugly portent of things to come.

During the following 15 days, President Humala took a cure of silence, avoiding the media while trying to get the new government house in order.  This  generated nonstop complaints from the local chattering classes.  Though Chavez was suspended by Congress for 120 days, she didn’t stop talking, and Fujimori siblings Keiko and Kenji also gave press conferences to question Humala´s silence and leadership skills.


CONTINUES HERE

The IKN Weekly, out now


IKN119 has just been sent to subscribers. Max knows.

Thought of the day...

...comes to us via regular IKN reader Wejn, who left the following comment in this post:

Hmm, I thought of this post when I was reading following paragraph this afternoon:

"You are never dedicated to something you have complete confidence in. No one is fanatically shouting that the sun is going to rise tomorrow. They know it’s going to rise tomorrow. When people are fanatically dedicated to political or religious faiths or any other kinds of dogmas or goals, it’s always because these dogmas or goals are in doubt."

Pirsig, Robert M. (2009-04-10). Zen and the Art of Motorcycle Maintenance (Kindle Locations 2456-2459). HarperCollins e-books. Kindle Edition.

Yes, yes and thrice yes, Wejn

Apparently it's a "must read", so....

...here we go, have a read for yourself. The following is how Christopher Barker, who in April '11 called Great Panther Silver (GPR) (GPL.to) is his favourite silver play without understanding the trickery the company has been using in its earnings report and has taken a 20% loss on the position since that time, decided to reply to the post from your humble scribe a couple of days ago.

The lady doth protest too much, methinks. But hey, wtfdik anyway, have a read for yourself and decide whether his Ad-Hom slapdown (attempt?) actually addresses the issues raised in the post. 

A Must Read - Setting the Record Straight

August 13, 2011 – Comments (6)
If you're going to swing a bat, you'd better be sure it's not made of rubber. Otherwise, it's likely to bounce off the intended target and smack you right in the face.
It was recently brought to my attention that some blogger named Otto has been swinging a bat my way with respect to my coverage of Great Panther Silver. Because I value my time, I will go only so far as I need to in my rebuttal to discredit his careless claims, since the facts speak for themselves. As an undeserved courtesy, I might suggest that this Otto character keep one arm raised in a defensive stance, since the bat he's been swinging is about to backfire very badly.
On April 14, 2011, the blogger in question stated: "Comparing the GPR cash cost metric to the PAAS cash cost metric is stupidity squared, because one of them is a fair representation of what goes on in the mining world and the other one is just laughable. PAAS may have its faults, but it's not trying to [BS] the market via its quarterlies."
Fact: the methods by which Great Panther Silver and Pan American Silver calculated their cash costs, which is the metric I reported for both companies respectively in the article he sought to ridicule, are 100% identical! Page 44 of this document outlines Pan American's method for calculating the non-GAAP metric for 2010, and pages 42-43 of Great Panther's 2010 Annual Report permit a side-by-side analysis revealing identical procedures. For both companies, cash operating costs are subject to adjustments by smelting, refining and transportation charges, by-product credits, and then small incidentals including royalties for PAAS and custom milling for Great Panther. The sole salient difference between the two is that Pan American gave both cash costs and total costs, while Great Panther omitted total costs as it is their right to do. The point is, the two cost metrics discussed for the two companies within my article were 100% comparable metrics. Later in his tirade, he blasts Great Panther for not including depreciation & amortization within its cost of sales, when neither does major miner Pan American! It appears Otto neglected to really compare filings between the two companies before wielding his rubber bat.
On April 14, 2011, the blogger in question stated: "Well the problem is that Christopher Barker has absolutely no idea on what he's talking about when it comes to "cash costs" and is simply taking the [expletive] GPR.to figures and stats to back up his case. The reality of GPR is that its costs of production (a MUCH better way of measuring efficiency than a non-GAAP metric such as cash cost that is prone to really nasty attacks of scammy company [expletive]) are way higher per ounce than PAAS, or serious mining companies or the kind of [expletive] propaganda that GPR puts out to pull the wool over the eyes of the marketplace."
Fact: No one in the industry looks principally to "cost of sales" (which he presumably intends with "cost of production" given his subsequent look at Great Panther's data) when assessing the profitability or attractiveness of mining operations. And nowhere will you ever encounter any informed person discussing cost of sales per ounce of payable silver. Perhaps someone can show me where anyone, anywhere in a professional and credible setting, discussed Hecla Mining's $59.77 million cost of sales (including DD&A) for the fourth quarter of 2010 in relation to its 2.74m ounces of silver production (amounting to $21.81 per ounce!). That's a meaningless construct for assessing the profitability of mining operations.
On April 14, 2011, the blogger in question stated: "Yes, you read that right. When GPR touts its "cash cost" figure, what it doesn't explain is that it only covers less than half of its real costs."
Fact: Again... there's nothing to see there! The blogger reveals his poor understanding of the nature of the relationship between cash operating costs and cost of sales throughout the mining industry. So he blasts GPL for having a cost of sales that is 2X its cash operating cost, but fails to recognize that Pan American Silver's comparable ratio for the full year 2010 is 2.31X! Massive divides between cost of sales and cash operating costs are the norm for the entire industry, regardless of where DD&A adjustments enter the picture.
On April 14, 2011, the blogger in question asks: "How on earth can 1) A company claim $3.111m in "cash costs" on $13.809m in gross revenues but then only deliver a $782,000 net profit on a quarter? Because that's exactly what GPR did in 4q10, its last reported quarter. Don't ask me that question, ask Christopher Barker of The Motley [Expletive] and when he's failed to explain why, tell him to....[Expletive].
Fact: Well, that's an entirely different question from anything else he previously discussed, but let's have a look. For starters, note that the blogger moves freely between CAD and USD figures without batting an eye! Careless! Furthermore, it's clear the blogger does not understand the nature of by-product credits nor how they are accounted for by the mining industry at large. Byproduct credits reduce the notional cash cost incurred to yield payable silver, yielding a useful metric for evaluating the performance of mine operations in exclusive relation to the targerted product. But revenue is not a product of silver alone, so when bridging the gap between revenue and net earnings, that is when cost of sales does come into play. And here again, there is absolutely nothing here that is unique to Great Panther in any way, shape, or form, rendering the blogger's tirade all the more unfounded. But to answer the inane question anyway, for Great Panther's Q42010 (all figures in CAD): $13.81m revenue - 6.36m cost of sales = 7.45m - 2m exploration expenditure - 2m G&A - 1m forex loss - 0.6m A&D - 0.6m stock-based compensation - 0.2m derivative loss - 0.1m tax expense = close-a-frickin-nuff!
Without even delving into the myriad ways in which the blogger fails to understand Great Panther's broader growth story or the fundamental justification for the stocks long-overdue advance after being frozen in obscurity beneath the $1 mark, I have more-than-adequately shown that his allegations of deceptive cost accounting leveled against Great Panther are 100% unfounded and illustrative of the accuser's profound lack of expertise in the basic principles applied when evalutating mining stocks. Finding one clear fault in his rampage would have been sufficient to discredit the Especially in light of the bloggers nasty personal attack packaged in a barrage of expletives, I also believe the blogger's conduct toward me speaks volumes about the nature of his attack against Great Panther.
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Worse yet, Otto is a repeat offender, attacking me yet again in a post that followed GPL's recent Q2 earnings release. I will be happy to discuss GPL's quarterly result with the community, but my present purpose remains the clearing of the record with respect to the baseless allegations leveled against Great Panther by the blogger in question:
On August 12, 2011, the blogger states: "the interesting bit is that GPR seems to have swallowed the honesty pill and is now reporting its cash costs in a more open and transparent way"
Fact: Nothing whatsoever changed in the way Great Panther conducted its cost accounting between Q42010 and Q22011. Nothing! Zilch! Every single aspect of the way in which GPL calculated its cash costs in the release that spawned the blogger's original tirade remained 100% identical to the calculations behind the metric this time around. I'm not sure how much more clearly I can state that fact. Worse yet, the blogger is looking for cash costs to match cost of sales, further underscoring an incredible failure to grasp even the most basic elements of cost accounting within the mining industry. That the two figures nearly match in Q2 is not, as he wrongly presumes, a result of a change in accounting methodology. More likely, the nearly matched figures underscore an unusual quarter of operations during which realized sales significantly lagged mining capacity due to technical issues with a nearby mining smelter. Note the resulting disparity between silver produced and payable silver ... that is primarily what caused the cost of sales and cash costs to converge. Of course, 2011 costs will come in well above plan, but challenges of the sort are rampant throughout the industry.
On August 8, 2011, the blogger posted the following data:
2q11 silver production: 386,210 oz
2q11 cash cost: $11.84

Total of above: $4.57m
Reported cost of sales in 2q11 report: $4.61m 
Fact: Cash cost is based upon payable silver production. The difference between mine production and payable production becomes particularly poignant in a quarter like this one where concentrate deliveries are delayed en masse. GPL's cash cost of $11.84 is based upon payable silver production of 193,914 ounces.
Hmmm ... who was it that had "absolutely no idea on what he's talking about when it comes to "cash costs""?
Needless to say, I also reject out of hand the blogger's wholly unsubstantiated insinuation that GPL's trouble with a third-party smelter had anything to do with the company's concentrates. That's a ludicrous notion, and a spurious insinuation that lacks any manner of merit!
And finally, in what has to be one of the more hilarious self-contradictions I've seen in some time, he actually paired the following two phrases within the same blog post: 1.) "Feeling stupid yet, Christopher Barker of the Motley [Expletive]?", and 2.) "And if Christopher Barker (aka TMFsinchiruna) is resorting to Ad Hom attacks instead of addressing his own obvious failings he so totally fails. Ego = poverty in this game, dumb[expletive]." And with that, his rubber bat just transitioned from recoil mode to self-inflicted blows.
This guy gets $40 a month for a subscription??? 

IKN back and just one comment from me. This guy thinks I don't understand cash cost parameters, but then goes off on a like-for-like scientific comparative appraisal of cash costs as if there were a set standard to them? Dude, you may be able to pull the wool over the eyes of the Motley crew, but when you poke you head out from that cosseted world your shortcomings become way too apparent. Oh, and another thing, dumbass isn't an expletive unless you're overly sensitive about such language and if so, I can guarantee 100% that you've never set foot on a trading floor. Or a mine for that matter.


UPDATE, and an important one too. Please everybody, take time to go over to the original note and click the "recommend" button on the top right, as I think it's one of those things the Motley people consider of great value. I've found that you can only do it once per IP number, so I've clicked through and reco'd on the office computer and my laptop too. He's only got nine so far and I think he deserves at least 100 after spilling all that spleen....poor guy must have been in knots all weekend over his failings and how to cover them up.

A punchup at a wedding

In 2003 Thom Yorke talked about the lyrics he'd put in Radiohead's then new album, Hail To The Thief and said they'd come from ".... the feeling that we are entering an age of intolerance and fear where the power to express ourselves in a democracy and have our voices heard is being denied us."

Here we are, 2011. Any further questions?



Ladies and gentlemen, we present "A Punchup at a Wedding", one of the angriest songs ever set to a cool jamming beat.