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Which will be worth more at end 2015?

3/3/12

Money

A superb article on money and its origins by Rosemary Joyce, right here.

The Dundee PDAC report, yours to download

Ron Stewart, Head of Research at Dundee Capital Markets, is one of the few brokerage analysts covering the Canadian junior mining market out there that your humble scribe admires outright and without quarter. This is partly due to the deep knowledge he displays on the subject but also because he's modest in victory and quick to admit (his very occasional) failures, rare qualities amongst the overstuffed egos in the Canadian brokerages. He also writes like a dream, too. Anyway, your author received this from Mr. Stewart yesterday morning:

Attached is our annual publication on the Junior ExploreCo space.  We are proud of our track record despite the dismal returns in 2011.  We are always looking for new, high quality names to add and happy to see the report widely circulated.
 
Trust you took your fill of Lachlan Star when I first pointed it out to you... It is my latest add under full coverage - a nice double in 6 months!
 
best
 
Ron Stewart
EVP & Head of Research
Dundee Capital Markets

That bit about Lachlan Star refers to an exchange a few months ago and silly me, I looked at the thing, liked it but didn't act. Should have known better. Anyway, the point of today's post is to pass on the link to the Dundee Capital Markets PDAC extravaganza report. Click right here and download your copy of the 110 page PDF, you'll be glad you did.

Bill Gates and Philanthropy in Peru

This English language post by Cynthia Sanborn (Director of Research Social Sciences Pacific University Lima Peru, no less) is recommended reading for those who want to know more about the state of play in aid and the general distribution of wealth in Peru. Acute insight that also manages to touch on sensitive issues without inflaming them.

The above is the kind of thing the medium of the blog does best. For those who want to know more, look deeper, get better informed there are people out there like Sanborn who share their expertise in language the layperson can understand.

Five days of metals and miners: March 3rd

The now regular slot: The last five days' worth of action in the gold bullion ETF (GLD), the silver bullion ETF (SLV), the miner ETF (GDX), the junior miner ETF (GDXJ) and the copper ETF (COPX)

the first thing to say is that the copper ETF (COPX) really didn't do that badly at all. So when that's compared to GLD the message (however weak it may be) is that the economy is in better shape than before. Yes I know you can't call that on just five days of action in two metals groups, but the theory goes along those lines.

It's often the case that GDX tracks SLV closely. I wonder why that might be.

And if you thought gold sucked badly last week, that means you don't own many juniors.

3/2/12

The Friday OT: Andrés Calamaro; Por una cabeza

Calamaro takes on a Gardel classic and does a fine job of it, too.



Vos sabés, no hay que jugar

Mexico: The race starting to tighten

Mexico Perspective has the news on how, according to one poll at least, PAN's Vázquez Mota has closed the gap to just seven points with PRI's Peña Nieto. Read all about it (with links to several numerical sources) right here.

Scotia launches coverage on Fortuna Silver (FVI.to) (FSM)

It took a long time, but Scotia Capital's Trevor Turnbull has finally joined the partaaay and opened coverage (buy rating) on Fortuna Silver (FVI.to) (FSM) (aka Flying Spaghetti Monster). You can read all about it in the 12 page Scotia PDF dated today, Friday March 2nd, which you can download from this link right here.

Please be having the nice day.

12 months of Great Panther Silver (GPR.to) (GPL) versus silver

Any further questions?


dyodd, dude.

Chart of the day is...

...Brent crude, monthlies:

Insert your own snappy, annoying and trite comment here today, I'm more interested about making breakfast for my kids.

3/1/12

Ecuador: Remember where you heard it first, folks


"You heard it here first. IKN can confirm that on Monday March 5th 2012, Ecuador's government will sign the contract for the big Mirador copper project with the delegation representing China's CRCC-Tongguan consortium, owners of ECSA (Ecuacorriente).

"The signing will happen in the Presidential Palace, Correa in charge of the whole bunfest. Expect the full PR machine in attendance and expect Vice Minister of mines Auquilla to beam and smile to one and all as he mans the Ecuador booth at PDAC."



El Comercio Ecuador (country's newspaper of record), evening of March 1st 2012:

First Large Scale Mining Contract To Be Signed Monday

Thursday March 1st 2012, 5:22pm

The Minister of Non-Renewable Resources, Wilson Pastor, said a few minutes ago that next Monday (March 5th) at 5:30pm in the Yellow Room of The Carondelet Palace (aka Presidential Palace) the first contract for large scale mining production will be signed.

The agreement will be signed between the Government of Ecuador and the Chinese company Ecuacorriente (Ecsa) that operates the Mirador project located in the province of Zamora Chinchipe. Continues here

IKN back and next you'll be asking how your humble scribe scooped the world by two days on this. Answer: not telling you. My Kung-Fu is (etc etc)

Colombia Gold Letter March 2012

Back in this post a month ago, a free copy of the February 2012 Colombia Gold Letter was offered to readers and I'm happy to say that hundreds of you took the opportunity and got your free copy. This post is directed mainly at you guys, because the March edition of the Colombia Gold Letter has just been published and it's very good stuff. There's an interview with Patrick Highsmith, new CEO of Bellhaven (BHV.v), a detailed analysis of the new initiatives being put into place by Colombia's Mining Ministry, a report on progress at Red Eagle Mining's (RD.v) Santa Rosa property and that's just mentioning three of the many features. I've learned a lot this morning by reading the letter, so have decided to write this post without even consulting Colombia Gold Letter published Paul Harris to say so. I'm not on commish or anything of the sort, just passing on a good information source that you, dear reader, may be interested in.

If you want to know more about Colombia Gold Letter, visit the website here

drinking coffee > not drinking coffee

Here's a message to those that think I drink too much coffee. First read this and then


Thank you for your attention. Here's how that Reuters piece kicks off, by the way.
Numerous studies of coffee's links to myriad diseases have provided head-spinning results, but a new paper finds java drinkers have no more risk of illnesses such as heart disease or cancer.

continues here

UPDATE: My stars how I adore the IKN readership. Reader 'LN' send in news of the latest Japanese invention, the STFU machine.

The 'Small Silvers' 2012 sweepstakes first edition

It's that time again, so with two months of 2012 now out the back door here's our first look at the gaggle of little silver plays we call the "small silvers" for the 2012 sweepstakes. Which companies will fare the best in the competitive pile during 2012? Only time will tell.

click image to enlarge
 
It's still early days, but the general story here is that the dogs of 2011 are bouncing more quickly than the better performing issues of last year. Top after two months comes IMPACT Silver (IPT.v) and then MAG Silver in second (why they insist on spelling their names in capslock is beyond me, so decade-ago it hurts) and in third that perennial dog Golden Minerals (the one that sucked up ECU Silver) actually making a move for a change (Adam Graf must have a woody on by now). Still, wins are wins and so we tip our hat to the front three.

Then come a closely matched bunch in GPR.to, USA.to, FVI.to and SLV, the silver ETF and our benchmark to performance. This means that First Majestic (FR.to) so far at least is a slight underperformer. However real underperformance so far is only seen in Bear Creek (BCM.v) and Endeavour (EDR.to) though we confidently predict that one of those two will bounce very well as 2012 unfolds. Watch this space for the next Small Silvers update end March.

Chart of the day is...

...LME copper inventories, 5 year, kitco chart, with scribbles.


Enjoy your day, people.

2/29/12

North Springs Resources (NSRS.ob): The final post on this scam

On February 10th 2012, a couple of days after North Springs Resources (NSRS.ob) had broken down from its $1+ peak, your humble scribe wrote this about the NSRS.ob bullshit scam:
"If you're daft enough to have bought this bullshit scam at the higher prices and are now confused and worried, the course of action is simple. Sell them all now and walk away carrying your loss, because if you think it's dropped a lot already, just wait til it breaks under 10c. Because it will. Soon."

At the time the stock was still at 40c. Today, just 19 calendar days later, it's at 9.6c


The end. No more posts on this scam, just another sigh and wistful thought about where the SEC was hiding when the criminals running this thing were making off with greenhorn cash.

Exceptions to rules

I want to make something absolutely clear. I am most definitely anti-Technical Analysis (TA) and believe it to be a waste of time. However I also know two other things:

1) I am often wrong.
2) There are always exceptions to rules.

With those in mind, your humble scribe states for the record and forever that Gary Tanashian at Biiwii (his free blog link here) is just about the best macro analyst he knows. And by far the best when it comes to deciphering the metals markets using technical analysis. I honestly don't know how he does what he does, but I do know that he's right way more often than he's wrong (which immediately sets him aside from 99% of the TA charlatans out there). I do not have anything to gain from writing this post and although we sometimes swap mails and thoughts I've never even met the guy face to face, but say out loud that his subscription service, Notes From The Rabbit Hole (NFTRH), is required reading for anyone in the PM and junior mining world (and it covers a lot more than that sector, besides). It's also way too cheap for the amount of top quality information and work that goes into it every week. You need to be a subscriber to NFTRH, so check out the service on this link here and while you're at it, check out the unsolicited testimonials on the service from some of his large band of happy clients.....then sign on for a month, it'll cost you little more than the price of one commission for one trade and will make you more money than you spend, I confidently forecast.

End of message.

Disclosure: I receive no form of payment, commission or anything you care to imagine from Gary for recommending his service, however I have been benefited from a complimentary subscription to NFTRH from the very first issue until today in an exchange deal with him (i send him IKN Weekly, he sends me his, fair swaps). I recommend his service because of its high quality and desire that more IKN readers benefit from his work, no more no less.

Cassandra does The BBC World Service

Just the most fabulous post by Cassandra Does Tokyo today on SW radio, a bygone age of propaganda, a childhood, the lack of decent news media that continues to this day, but above all the influence of the BBC World Service over the years. Today's must-read.

Stopped clocks

Y'see, even Nicholas CampbellSoup can get 'em right occasionally. This from today:

Fortuna Silver Mines Inc.
FVI : TSX : C$7.30 | C$902.5M | Speculative Buy, C$9.50
  • A premier junior silver producer with a proven management team; maintaining SPEC BUY rating; increasing target to C$9.50 (from C$7.25)
Nicholas Campbell, 604.643.XXXX
Investment recommendation We maintain our SPECULATIVE BUY recommendation on the shares of Fortuna Silver with a revised 12-month target price of C$9.50, up from C$7.25.

Investment highlights

  • With the San Jose mine ramping up and the steady contribution of the Caylloma mine, Fortuna appears positioned to continue growing its annual production over the next five years, with peak production estimated at 6.8 million ounces of silver-equivalent by 2017.
  • Fortuna has more than US$70 million in cash in the bank and no debt. We forecast that the company should generate operating cash flows of $80-115 million per year over the next 10 years.
  • We believe Fortuna's management team has a stellar track record of developing and operating underground mines. In an environment with increasing scarcity of experienced, proven management groups, we believe Fortuna possesses one of the top teams to add value through further exploration and development.
Valuation Our peak silver estimate of NAVPS (5%, US$35/oz Ag) remains unchanged at C$8.54. However, given the proven management team, strong balance sheet, and organic growth profile, we believe Fortuna Silver is a premier junior silver producer that warrants a premium valuation. We are adjusting our valuation to 1.1x our peak silver price estimate of NAVPS (5%, US$35/oz), up from 0.85x previously.


IKN back. That's really the whole thing apart from a page of numbers, but if you want to see the PDF of the above click right here for your copy.

PS: By the way Soupy, real lack of genuine analysis on your GGA call today. Swallowing the company line wholesale like that will get you into trouble again. Haven't you learned that from your BAT debacle yet?

Chart of the day is...

...silver versus gold, these last two days:


In the olden days (about six months ago) they'd call that "risk on", I believe.

By the way, I'm fed up with having to write "The gold ETF (GLD) as a proxy for gold" and "The silver ETF (SLV) as a proxy for silver" just because enough of the tinfoilhat brigade has been brainwashed by Their Lord God Almighty Sprott and are anal enough to believe the world economy will collapse if holders force remits on the ETFs. Give me a freeeekin break one time, yeah? GLD = gold, SLV = silver, the end.


PS: Bonus Leap Day Quiz Question! (and answer):

Q: Which month has 28 days?



A: They all do

2/28/12

Mailbag (reactions edition)

Ahhh, one of the great pleasures of this blog is the quality of mail feedback received by your humble scribe, with this morning's crop particularly rich. I've been given permission to share from both of the following.

First, regarding the Batero (BAT.v) post of yesterday this came in from a reader that prefers not even to have his initials up in lights (respected).
The reason why I'm emailing you is because of your statement about Batero yesterday. The company released a resource estimate of 6.1M ounces (3.5M+2.6M), and not 3.5M, as you pointed out in yesterday's blog post. I agree 200% with your remarks on the grade. It's pretty shitty.

That's fair comment, especially about how your humble scribe missed out the inferred. Corrections always welcomed (unlike Chez CampbellSoup)

Second, on the back of the post yesterday about 43-101 disclosure rules for drilling results the following was sent in by a professional geologist working the LatAm region (can say no more) and your humble scribe  found it particularly enlightening:

The 43-101 workshop at Round Up this year was pretty interesting, with a full review of the new rules. However, the real eye-opener for me was to hear how understaffed they are over at IIROC and at the Securities Commissions. They admitted that they do not go over in any sort of detail up to 90 or 95% (that’s the number that stayed in my brain; it may be off slightly but it was definitely north of 90%) of technical reports. That’s full-fledged technical reports, not NRs! If they don’t even have the resources to police full-fledged technical reporting, you can imagine what this means for NRs. I think this means the onus is on the investing public (and those professionals who care about our industry’s reputation) to send complaint notes to IIROC or the BC Sec Commission when we spot more egregious examples of non-compliance. Hopefully they DO have the manpower to follow up on complaints. Come to think of it, they should subscribe to your blog. They would get their daily dose of non-compliant NRs in one easy read!

The other point is about drill location data. I asked this exact question at the Round Up workshop. It seems that from the point of view of disclosure, it doesn’t seem that they are that bothered about *how* you disclose location data. A table of XYZ coordinates is obviously best for the technically minded amongst us, and to my mind is the least obfuscated way of presenting data, but a map with drill collars hosted on the company’s website is apparently also acceptable. However, I agree that at present the vast majority of NRs coming from the junior sector are non-compliant. And given the attitude of many, it seems likely to stay that way until the Commission gets more teeth.

That sure fits with what IKN sees happening in the market.

Ecuador: The Mirador contract to be signed March 5th

You heard it here first. IKN can confirm that on Monday March 5th 2012, Ecuador's government will sign the contract for the big Mirador copper project with the delegation representing China's CRCC-Tongguan consortium, owners of ECSA (Ecuacorriente).

The signing will happen in the Presidential Palace, Correa in charge of the whole bunfest. Expect the full PR machine in attendance and expect Vice Minister of mines Auquilla to beam and smile to one and all as he mans the Ecuador booth at PDAC.

Disclosure: No exposure to anything Ecuador. That won't change.

Trelawney (TRR.v) and a letter to the editor of Northern Miner, July 2011

First up, let's consider the price chart of Trelawney (TRR.v) from July 12th 2011 to date (why July 12th is explained by the date on the mail below):

That's a downward trend, but yesterday it put in a burst of accelerated downeration due to the publication of its latest 43-101 resource number for Côté Lake. The resource came in at 5.9m oz inferred, 0.9m oz indicated, no measured resource at all (and P+P is out the question, dude). As reader 'HA' pointed out to your author when the NR landed Friday night, these "all inferred" (or darned close) resource updates (not a first pass folks, this is an update) is, let's generously say, a novel turn of events in exploration world.

Now for the main course: Here's an interesting mail sent to and published by Northern Miner dated July 12th that I read at the time. Sorry no link, because NM runs behind one of those quaint 20th century devices that stops your website from ever becoming popular or influential

Letter to the editor: How big can Côté Lake get? Depends how you stretch it!

2011-07-12

In the cover story of The Northern Miner's June 27 - July 3, 2011 issue, staff writer Anthony Vaccaro describes Trelawney Mining and Exploration's activity on its newly discovered Côté Lake gold deposit in the southwestern Abitibi region of Ontario.
Trelawney has made remarkable progress in just one year, delineating a National Instrument 43-101 compliant inferred gold resource of 4.2 million oz. to a depth of 550 metres at a grade of 1.0 gram per tonne using a cut-off grade of 0.3 gram gold. Citing analysts' euphoric projections that this resource has now grown to 8 to 10 million oz., Mr. Vaccaro asks "How big can it get?"
Côté Lake is described as being unlike typical shear-hosted Abitibi gold deposits, instead being hosted by brecciated granitic rocks and sharing many features with porphyry deposits.
However, the deposit nicely fits current gold-exploration requirements where the preferred target is a wide, large-tonnage deposit amenable to open-pit mining. The tendency today is to stretch the width and depth of these deposits as much as possible to maximize the ounces that can be extracted while maintaining an acceptable profit margin.
The parameters and assumptions used to establish the 4.2-million-oz. gold resource at Côté Lake are well documented in a technical report prepared by independent consultants Roscoe Postle Associates (RPA) as an audit of an initial study by Trelawney's consultant. RPA's report is clearly written and thorough, and its assumptions are fairly standard for an open-pit mining operation in a readily accessible location in the level terrain of the Canadian Shield.
However, there are two features of the Côté Lake deposit which suggest that a more conservative approach may be needed to allow for possible unpleasant surprises. The first is that a significant portion of the deposit is not as close to surface as other gold deposits of a similar 1.0-gram-gold grade that are currently being mined or developed in a shield setting. The second is that the gold grade within the resource limits is highly variable, with many samples being barren and much of the 1-gram-per-tonne average gold content contributed by a small number of high-grade samples. With the mineralization being hosted mainly in the breccia matrix, these high-grade intercepts are unlikely to have significant continuity.
The 4.2-million-oz. inferred resource is based on the first 47 core holes drilled at Côté Lake. These holes tested a strike length of roughly 800 metres between grid lines 88+00E and 96+00E, with most holes in the eastern 400 metres.
Cross and longitudinal sections from RPA's report and a Trelawney presentation to investors dated May 2011, indicate that the western half of the deposit crops out whereas, in the eastern half, very little mineralization occurs within 100 metres of surface. It appears that only 10% to 20% of the gold resource lies above the 100-metre level, limiting the potential for early payback of capital costs if a mine is developed at Côté Lake.
A fundamental requirement for mineralization to qualify as a resource, even in the preliminary "inferred" category of Côté Lake and similar early-stage deposits, is that the mineralization must have "reasonable prospects for economic extraction."
In the Abitibi, does all or even a significant portion of a 4.2-million-oz. gold deposit with a grade of just 1.0 gram gold at a 0.3 g/t cut-off and with more than 80% of the deposit lying between depths of 100 and 550 metres actually have reasonable prospects for economic extraction?
One table in RPA's technical report (11-2) features 15 drill holes having mineralized intervals grading between 0.82 and 1.75 grams gold per tonne across widths of 16 to 196 metres, in some cases with two or three such intervals in the hole. The other 32 holes included in the resource study but not in the table generally had significantly shorter and/or lower-grade mineralized sections; all were included in Trelawney's news releases.  The typical sample interval was 1 metre.
The 47 holes considered in the resource study yielded 54 samples having unusually high-grade gold assays exceeding 25 grams gold per tonne and ranging up to 785 grams gold; these were capped at 25 grams per tonne to limit their influence on the average grade of the resource.
This strict capping is commendable but the gold grades of the 1-metre samples appear to be so variable throughout the deposit that an even more conservative approach may be needed.
RPA notes that the resource blocks include 8,807 samples. However, not all of these samples exceeded the 0.3-gram-gold resource cut-off grade. Rather, as is usual when estimating resources, the grade was obtained statistically by "compositing" (essentially averaging) the assays, in this case in 2-metre intervals across 10-metre sections, or ten consecutive 1-metre samples.
Thus a single assay of just 3 grams gold per tonne might qualify a 10-sample section for inclusion in the 4.2-million-oz. gold resource even if the other nine samples contained no gold whatsoever.
RPA further notes that the median grade of the 8,807 samples is just 0.34 gram gold per tonne, indicating that nearly half of the samples within the resource blocks were below the 0.3-gram cut-off grade.
Trelawney's cross sections show many 30- to 50-metre intervals within the resource field having grades only marginally above cut-off. Would a large mining operation at Côté Lake be able to withstand significant periods with very little gold coming out of the mill?
At the deposit scale, the major dependence of Côté Lake's average resource grade on the highest-grade samples is evidenced by the fact that the 4.2-million-oz. resource diminishes by only 300,000 oz., or 7%, if the cut-off grade is raised from 0.3 to 0.5 gram gold per tonne. This suggests that capping only those assays greater than 25 grams gold may not be sufficient; it may be necessary to cap somewhat lower values as well.
At the drill-hole scale, the degree of grade dependence on the highest assays is illustrated by hole 33 on Section 94+00E. This hole was featured in a Nov. 16, 2010, Trelawney news release. Using a 50-grams-gold cap rather than the more-conservative 25 grams subsequently adopted for the resource calculations, Trelawney reported a remarkably long, 520.3-metre intercept grading 0.92 gram gold per tonne. Within this interval, a 193.5-metre, sub-interval graded 1.42 grams gold. However, 62% of the gold was contributed by three short, 0.95- to 1.7-metre sections spaced 40 to 60 metres apart, with the other 190 metres grading just 0.54 gram gold, well below the 1.0 gram per tonne average resource grade.
In contrast, a recent news release by Atac Resources announcing a 114.9-metre drill intercept grading 3.15 grams gold per tonne from its Conrad discovery in the Yukon included a footnote clearly explaining that 32 of the 45 samples within this wide intercept yielded greater than 1 gram gold per tonne and only 4 samples yielded less than 0.25 gram gold, thereby assuring potential investors that the gold grade is relatively uniform and that the mineralized interval was not stretched to boost the size of the zone.
Côté Lake is not the only new gold deposit in the Canadian Shield for which the length of the mineralized drill intercepts and the depth of the proposed mine pit have been stretched to maximize the resource ounces. However, the Côté Lake resource is based on just 47 drill holes whereas the others were determined from hundreds of holes, providing a better understanding of the gold-grade distribution, and also have a higher percentage of their resources at shallower depths.
In today's euphoric markets, there is a lot of pressure from analysts, shareholders and the media for gold exploration companies to quickly deliver more ounces. In The Northern Miner interview Trelawney's president, Greg Gibson, is quoted as saying: "We've done this so quickly that we weren't able to prepare for everything, but the world has said we're on to the real deal so we have to keep on pushing."
Unfortunately, history has shown repeatedly that hurrying results to meet the expectations of those who may have little interest in oversight and due diligence is a perilous path.
Have we so quickly forgotten the many mines that were opened in 1987 with easy money obtained from poorly regulated flow-through financings only to fail within a year, the Bre-X Minerals debacle of 1997, the dot-com bubble of 2000 and the juiced-up derivatives and asset-backed commercial paper offerings that triggered the 2008 recession?
The market meltdown from each of these events devastated our mineral exploration industry, drying up our principal source of capital and disrupting the careers of many mining professionals, thereby creating a lingering shortfall of qualified personnel with no end in sight.
Recently we had another market warning from Sino-Forest.
Will we in the exploration industry, from geologists and analysts to the media and stock exchanges, heed these warnings and muddy the crystal-clear waters underpinning euphoric resource projections by asking penetrating questions about the quality of these resources? Or will we once again raise investor expectations to unattainable levels and kill the golden goose?
Stu Averill, P. Geo., president
Overburden Drilling Management Ltd.
Ottawa, Ont.


IKN back, and taking into account the events since that letter, methinks Mr Averill's mail should be considered essential reading by anyone, retail or industry, who wants to know more about this crazy exploration game. dyodd, dude.

Chart of the day is...

...recoverable copper ore yield grade, 1980 to 2010, according to Barclay's Capital.

Peak Copper by any other name.

2/27/12

Goldgroup (GGA.to) now has serious problems at Caballo Blanco: The State governor just said "no"

Is the company going to step up and make a statement? On reading this, it's about time it did, methinks:

Mexican State of Veracruz Rejects Goldgroup Mining Project

Monday, 27 Feb 2012


Mexico: The governor of Veracruz, Javier Duarte de Ochoa, rejected the installation and operation of the gold mine in the municipalities of Alto Lucero and Actopan promoted by the Canadian company Goldgroup.


"After careful inter-institutional studies made by the secretaries of the environment, social development, civil protection, health and economic development, the State government has come to the conclusion that the Caballo Blanco mine is not a viable project", he said.


He added that "It is incompatible with the specific environmental characteristics of the zone in which it would operate."

continues here

Disclosure: I'm adding a disclosure and extra information to this post on request from a GGA.to long. Firstly I have no position in GGA.to, not long and not short and that's not about to change. Secondly, there's more to today's story than just the above translation and anyone with a vested interest in the stock, the company or the region should find out all they can. Start with the following links here, here and here. Thirdly, you'll note those links are in Spanish language and if you don't understand Spanish well enough to read them you should really ask yourself exactly why you're in this stock in the first place, because if you have to rely on the filtered and selective information that's dripped to you by obviously biased sources you're at a woeful disadvantage. If you don't do your own DD you only have yourself to blame. Finally, let it be known that I stopped swallowing the one-sided twaddle that spews from junior mining IR departments years ago. Until a company has proven itself to be a trustworthy source, its information should be considered just as bad as some asshole blogger spouting off on the interwebs.

Batero (BAT.v): Nicholas CampbellSoup over at The Can of Corn is probably not having the greatest of Monday mornings

Here's a little note from January 16th, 2012:

Analyst Nicholas Campbell of Canaccord Genuity is maintaining his rating on shares of Batero Gold Corp. (BAT.V) as the company released promising drilling results from its Colombian Batero-Quinchia mine, The Globe and Mail reported.
The Globe said he is expecting an initial resource of at least 7 million ounces of gold, with longer-term potential for the project to develop into a 10 million ounce gold resource.
Canaccord Genuity maintained its "speculative buy" rating and 12-month target price of $10 on the stock.

Here's a NR from BAT.v this morning that puts the resource at 3.5m oz gold. So half of CampbellSoup's wild-assed guess, but it then gets worse as the grade is 0.44 g/t Au and the cut-off is 0.16g/t on $1500/oz gold (or if you like, $7.71 per tonne of rock shifted). Ugh.

Here's a price chart. How's that $10 spec buy target looking these days, Soupy?


Here's an owl:

And by the way, we congratulate Batero Gold (BAT.v) on closing a $7.2m bought deal at $2.10 last November and also congratulate Canaccord, what with that brokerage running the financing.

The Rio Alto (RIO.to) price chart over the past six months compared to the gold ETF (GLD)


If you look very very closely, you may be able to spot a trend.

Drilling results requirements

An interesting mail received from reader 'MR' last week, so rather than try and claim the idea as original let's reprint the whole thing below (bar the name) and let you think about it:

Hi Otto,

Love your blog. Thought I would send this along, as this will certainly perk up some ears on your more technically minded readers. NI43-101 requirements changed in June 2011, and of the more significant changes is this:
Requirements Applicable to Written Disclosure of Exploration Information
3.3
(1) If an issuer discloses in writing exploration information about a mineral project on a property material to the issuer, the issuer must include in the written disclosure a summary of
(a) the material results of surveys and investigations regarding the property;
(b) the interpretation of the exploration information; and
(c) the quality assurance program and quality control measures applied during the execution of the work being reported on.
(2) If an issuer discloses in writing sample, analytical or testing results on a property material to the issuer, the issuer must include in the written disclosure, with respect to the results being disclosed,
(a) the location and type of the samples;
(b) the location, azimuth, and dip of the drill holes and the depth of the sample intervals;
(c) a summary of the relevant analytical values, widths, and to the extent known, the true widths of the mineralized zone;
(d) the results of any significantly higher grade intervals within a lower grade intersection;
(e) any drilling, sampling, recovery, or other factors that could materially affect the accuracy or reliability of the data referred to in this subsection; and
(f) a summary description of the type of analytical or testing procedures utilized, sample size, the name and location of each analytical or testing laboratory used, and any relationship of the laboratory to the issuer.

In other words, any TSX or TSX-V listed company that is putting out drill results in press releases must include the location, azimuth, dip, and intersected depths. Most juniors I have seen so far are not yet in compliance, but this is especially pertinent to those sophisticated investors (or institutions) with 3D modelling software who can effectively make estimate block models. If the juniors aren't doing this yet, there's no hurt in sending them a gentle reminder so we can make more educated decisions about projects.

Here's the full text:

Cheers, MR

IKN back and MR has made a very good point here. I mean, check all the NRs out this morning with drill results, do you see any azimuth data here? What about this mixed salad of obfuscation here that's seen the stock shoot up 37% at the bell?

The real question, however, is just why the asleep-at-the-wheel toothless agents at the Canadian authorities that are supposed to audit one of the shadiest markets in the world aren't bothering to impose their own, brand new minted rules.

Chart of the day is...

...silver, monthlies.

Looks overbought...on the chart that is. Gotta believe the charts, right?

2/26/12

2012 Oscar Winner for Best Animated Short

Right here

The IKN Weekly, out now

The last great Canadian sporting achievement that didn't involve frozen water

IKN147 has just been sent to subscribers. It makes no predictions on the Oscar winners, though as it happens I'd like to see Rooney Mara win best female because she nailed that Dragon Tattoo girl role. I know she won't win it, but since when have the Oscars ever awarded the really good stuff out there? Oh yeah, business! Yeah right, so The IKN Weekly is really wonderful and has lots of things to read and might even make you a bob or two along the way. Will that do?

Small thought for the day

For reasons not fully understood, on checking out the OT post over at World of Wallstreet today (one of my regular reads) an old Dalai Lama quote came to mind. So your humble scribe scuttled off to Google to get the quote right (well, the EngLang translation of the quote at least) and here it is:
"Man sacrifices his health in order to make money. Then he sacrifices his money to recuperate his health. Then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never going to die and then he dies having never really lived."
I like that.