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3/10/12

OT: A goal worth sharing this Saturday morning

If only for the rarity value of seeing a goal set up by an overhead (bicycle) kick cross and then scored by, yes you guessed right, another overhead (bicycle) kick




It got Seongnam of South Korea back level against Nagoya Grampus of Japan in the Asian Champion's league last night, for the record.

Cocaine, the USA, Bolivia, Peru

A great post over at Andean Information Network about the apparent double standard the USA imposes on the cocaine manufacturing countries of Peru and Bolivia. There are some illuminating charts at the AIN post which I'm not pasting here (you click through for those, it's only fair) but here's the top-page blurb of the post:
On March 7, the US released the International Narcotics Control Strategy Report. Drug policy advocates have long criticized the yardsticks used by the US government to measure efficacy in drug control. But even by US standards, Bolivia surpasses Peru in most categories, though the US certified Peru and determined that Bolivia “failed demonstrably to make sufficient efforts to meet its obligation under counter-narcotics (CN) conventions.” When seen alongside these figures, the US verdict gives the impression that there are unspoken conditions for certification, and that countries that follow US policy dictates are more likely to receive US approval and funding regardless of the numbers.

Click here for more and make sure you link through to the main piece at the bottom of the AIN post. By the way, it's also interesting to compare the views of the politically biased USA to those of the UN on Bolivia's efforts against the cocaine trade. Just yesterday the UN said Bolivia's efforts were (translated), "a success in coca eradication, breaking up drug rings and seizures, but need to do more". Nuff said.

Five days of metals and miners: March 10th

The regular Saturday 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)

Gold wins! The only squiggly line (GDL) that kept its head above water and in the positive zone last week. The other straight metal, silver (SLV), also managed to beat out the ETFs made up of mining companies that came in between 2% and 3% down on the week.

Overall it looked as though a nasty correction was going to happen, but the sector(s) pulled together and found buyers. A poor excuse for a correction in my book.

3/9/12

The Friday OT: Neil Young; Harvest Moon

One of the great things about quality music is the way it will force you to stop whatever you're doing and whatever you're thinking about and transport you somewhere else. This happens to me every time I hear Harvest Moon by Neil Young.



Because every time I hear it, I think about my wife and how wonderful she is. Today's Friday OT is therefore slushily, sentimentally and unashamedly dedicated to her. Neil Young's a pretty darned fine human being, too.

The PDAC interview extravaganza

The place to go to see PDAC interviews is Market Narrative, as IWNATTOS has gone embed-crazy and stuck a hatful of gooduns up on his blerg today. 

Amazingly, most feature Daniella Cambone of Kitco. I wonder why. Anyway, go see Cambone + Fulp, Day, McEwen and a bunch of others too, right here (scroll down)

Great WashBasin Gold (GBG) (GBG.to): I love these guys

Freddy D and his pals at Great Washbasin Gold (GBG) GBG.to) (named thus due to the amount of dilution) crack me up no end and have me rolling around the floor in guffaws and snorts, so let's take a trip back in time and see why that's so, shall we? Here's a slide from the GBG September 2008 (seriously, three and a half years ago) presentation that was wonderfully entitled "Responsible Growth":

I adore that bit about how they only need $100m to bring their two mines on line and how they got that moolah covered already, don't you? Now, here's a chart that shows the evolution of the GBG share count from then until now:

So since the time of that "we got it covered" presentation and the projection for once the latest round of financing is closed (see below), the share count has moved from 215m shares out to an estimated 545.8m S/O, a difference of...errrr....a very lot of shares, dude.

And here's a chart showing how the stock price has been getting on in all these years:


And here's yesterday's announcement (re-transmitted this morning) about an $50m bought deal for GBG that will add another 67.6m 70.15m (oops) shares to the mix if the overallotment is taken up (and that's very likely, as we're talking about the same sheep-shearing techniques they've run successfully before). Here's how today's NR starts:

March 8, 2012, Vancouver, BC – Great Basin Gold Ltd. (“Great Basin Gold” or the “Company”), (TSX: GBG; NYSE Amex: GBG; JSE: GBG) is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by RBC Capital Markets pursuant to which the underwriters have agreed to, on a bought deal basis, buy 61,000,000 common shares of the Company at a price of C$0.82 per common share for aggregate gross proceeds of approximately C$50 million (the “Offering”), by way of a short form prospectus. The Company has granted the underwriters an over-allotment option to purchase up to an additional 15% of the Offering, for a period of 30 days following the closing.
Net proceeds from the Offering will be used towards working capital for the development and ramp up of the Burnstone Mine.

But the great news is that Freddy Oh-No-I-Never-Mislead-Anyone Dippenaar says his mine will be up and running and free cash flow positive by the end of this year. AND THIS TIME HE MEANS IT.

dyodd, dude.

Party time! (you're invited)

Juanma says:

Hugo says: Can I come?

Juanma says: Yes! Bring cake!

Hillary says: Can I come?

Juanma says: Yes! Bring Coca-Cola!

Rafael says: I'll come but only if my friend Raul can come. It's all the 'hood or nobody, ok?

Juanma says: Ok Rafa! I don't know your friend Raul but he can come anyway! All are welcome at my house!

Raul says: Hi Juanma! My friend Rafael says you're having a party and I can come. Is that right?

Juanma says: Yes Raul, no problem. Bring cigars!

Hillary says: Ewwwww! I don't like Raul, he's horrid! I'm not coming to your party if he's coming.

Juanma says: Oh don't be like that Hillary! Let's all get along, after all it's a party!

Hillary says: No Juanma, sorry. That Raul has been nasty to our family for years and it's impossible to have him in the same room as me. It's either him or me.

Rafael says: Pick Raul! Pick Raul!

Juanma says: Hmmmm.....

Hillary says: I'm warning you Juanma, don't ruin the party over somebody you don't know.


Juanma says: Ok ok. As you're bringing the Coca-Cola you can come and I'll go over to Raul's house and tell him personally that it's a bit difficult this time....but next time, yeah?

Rafael says: Not fair! We should all play together!

Juanma says: Raul, there's something we have to talk about .....(cont)

Raul says: Huh! Typical.

Hillary says: That'll learn you, brown people.

Chart of the day is...

...copper, dailies:

$3.80 is enough for anyone.

3/8/12

Dear AQM Copper (AQM.v): I have a question

Dear Mr Bruce Turner, President and CEO of AQM Copper (AQM.v), or other,

By way of context before we get to the question, it seems to this humble scribe that it's getting a teensy tad hard to understand how you're going to get your promised 43-101 compliant Preliminary Economic Assessment (PEA) out "in late Q1, 2012" (as per the latest corporate presentation, link here) if you still don't know how many tonnes of mineral or the grade or the total metal in situ you have at Zafranal.

So to the question: When are you going to get round to publishing the fucking resource update?

Yours sincerely, Otto (shareholder, long at 40.5c avg)

Duran (DRV.v)

Well I laughed at least.

One of the main problems in the Canadian markets isn't that of the outright, blatant illegal scam, it's the fact that NRs like this one are considered legal.

UPDATE: Even funnier, somebody bid it up at the bell today.


Owl please:

Chart of the day is...

..this.

.

3/7/12

Colombia's oil production growth stalls

Blame the pipeline explosions or blame the recent strikes at the Rubiales field, but when push comes the shove the baseline is that Colombia's much-vaunted oil boom has stalled in the last few months.


Today we had Colombia's Ministry of Energy and Mines inform the world that the preliminary total for February 2012 was 896,000 barrels per day, which is of course up on the 862kbbl/d from the same month of last year but is behind all months since April 2011 bar one (the 891kbbl/d of September'11). So once again reality bites where a politico's words once stood, as President Juanma Santos has had the one million barrels per day obsession for a while now and after promising it by the end of the year (fail), went for it again on January 13th with these words:
"We're not going to achieve this million barrels (of production per day) in August of 2014, I believe we're going to get there this month or next month at the latest."
But hey, what's a hundred and four thousand barrels between friends anyway?

The other stats for that chart above come from here.

UPDATE: Reader 'PW' writes in to ask if a YoY growth percentage chart is possible from those numbers (the same way as seen in the Peru electricity post on Tuesday). Yup PW, can do, here you go and I've even thrown in a best fit line to see where the four year trend lies:


Next month's number will be an interesting one by the looks of this chart, methinks.

Batero (BAT.v)


I'll leave it to Douglas Adams (who would have turned 60 years old this weekend coming) to provide the commentary on the above chart:

"In the end, it was the Sunday afternoons he couldn't cope with, and that terrible listlessness that starts to set in about 2:55, when you know you've taken all the baths that you can usefully take that day, that however hard you stare at any given paragraph in the newspaper you will never actually read it, or use the revolutionary new pruning technique it describes, and that as you stare at the clock the hands will move relentlessly on to four o'clock, and you will enter the long dark teatime of the soul."

LK on Peru's PDAC

Kind subscriber LK sends in the following:

Yesterday I saw three presentations from (Peru companies).

Alex Black (RIO.to) was great, especially after the quite boring Peruvian government officials. He conveyed a feeling of strong leadership going forward. Jorge Ganoza  (FVI.to) was also great, in a quiet, nice way he also showed confidence.

Andrew Swarthout from Bear Creek (BCM.v) though was not convincing, especially when answering a question of how they would obtain financing of USD 600 million. He said that they have commitments from banks for 60%, but was elusive for the remaining 40%.

IKN back and re Alex Black, just by looking at what the RIO.to PPS did yesterday is enough to tell you that the guy sure knows how to put on a good presentation. As for Ganoza, he's the living breathing proof that being a good miner is three zillion times more important than being a good promoter. As for Andrew S, I don't know the guy so can't comment. As for Peru government officials being boring, wow what a shocker.

UPDATE: Reader and smart industry player, 'LR' adds by four word mail:

 "fortuna presentation was excellent"


.

Chart of the day is...

...Gold-Ore Resources (GOZ.to), year to date:

Here's a 17 second video:



Ever felt like you've missed a bullet? Of course, the video only applies to those that actually believe in TA. It's a bit like the concept of eternal damnation, come to think of it. Well, perhaps not quite as severe, but belief systems are belief systems, y'knowz.

Disclosure: no position in GOZ.to, a situation which changed on Feb 2nd when your humble scribe sold all the shares he owned. dyodd, dude.

When is a bought deal not a bought deal? (Part Two)

Back in October 2011 we looked at how Canada's National Bank decided to re-write the rules on bought deals because....well, because it's a bullying heads-I-win-tails you-lose bank, basically. Instead of honouring its commitment to a "bought deal" placement, it refused to play ball with Sulliden and take up $25m of the bought deal as arranged. In that post we defined the term bought deal so as it's also useful today, here it is again:

A bought deal occurs when an underwriter, such as an investment bank or a syndicate, purchases securities from an issuer before a preliminary prospectus is filed. The investment bank (or underwriter) acts as principal rather than agent and thus actually "goes long" in the security. The bank negotiates a price with the issuer (usually at a discount to the current market price, if applicable).
The advantage of the bought deal from the issuer's perspective is that they do not have to worry about financing risk (the risk that the financing can only be done at a discount too steep to market price.) This is in contrast to a fully marketed offering, where the underwriters have to "market" the offering to prospective buyers, only after which the price is set.
The advantages of the bought deal from the underwriter's perspective include:
  1. Bought deals are usually priced at a larger discount to market than fully marketed deals, and thus may be easier to sell; and
  2. The issuer/client may only be willing to do a deal if it is bought (as it eliminates execution or market risk.)
The disadvantage of the bought deal from the underwriter's perspective is that if it cannot sell the securities, it must hold them. This is usually the result of the market price falling below the issue price, which means the underwriter loses money. The underwriter also uses up its capital, which would probably otherwise be put to better use (given sell-side investment banks are not usually in the business of buying new issues of securities).

Ok, onwards. Last night (yes folks, it's the late night NR syndrome again) we got this NR from Rio Novo (RN.to):

March 6, 2012 - 10:57:12 PM

TORONTO, ONTARIO--(Marketwire - March 6, 2012) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

Rio Novo Gold Inc. (TSX:RN)(TSX:RN.WT) ("Rio Novo" or the "Company") wishes to announce that it has agreed to terminate the underwriting agreement with a syndicate of underwriters led by Canaccord Genuity Corp. and including Clarus Securities Inc., Dundee Securities Corporation, GMP Securities L.P., and UBS Securities Canada Inc. in respect of its previously announced $20,025,000 bought deal financing, and that the Company will not be proceeding with the offering at the present time.

In other words, yet another Canadian brokerage with no shame just pulls the plug on a deal that it decided it didn't want to do anymore. It can do this because of the hermetic lockdown the brokerages have on this one-sided financing game in Canada. And the reason for the volte-face by The Can of Corn is that the offering was struck at 75c and these days RN.to trades at 55c.

In the October post, we finished of with the line "The time is ripe for alternative sources of financing for mining activities other than the rip-off Canadian houses. ". That timer gets riper still.

3/6/12

Idol

Two requirements for this video:

1) Know your footy
2) Know Spanish.

If you fit the bill, this is unmissable.

The single must-read PDAC microcap junior news release

VANCOUVER, March 6, 2012 /PRNewswire/ -- Original Grass Resources, Inc. (TSXV: WTF, US: WTFTT.pk) is pleased to announces that it has entered into a letter of intent (LOI) to option into a maximum of 24% of a very flat piece of land with no outcropping but nice IP returns in a place that has a lot of snow in the winter.

In exploration news, we have recently completed an extensive grab sample program at our flagship project as we move aggressively towards deciding where we can drill one of the four holes we can afford this year unless the share price moves up and we can sneak in a $500k placement.

We are also proud to announce a change of address of our corporate offices, as the company has secured rented accommodation that's a little bit closer to Bay St. than the shoebox it has been working from since Lehman blew up.
About Original Pasture Resources

PS: not forgetting this year's PDAC theme tune:

 

Market thought for the day

Why is it that, in a market dumpage, the ones I want to buy never go down as much as the ones I already own?

Russian democratic numbers

Frankly I don't give a crap about Russian politics, its ideas about democracy or its recent election either. Also, my best guess is that Putin is about all they can aspire to as a leader right now so I have no problem either way about him getting the job.

But I adore numbers. Here's the link that tells us of voting results in Chechnya for last weekend's Russian Presidential election, here below the excerpt, click through for more.

Putin got 611,578. His nearest rival the former Communist leader Gennady Zyuganov got 182. The three others got even less than that.
What that gave Putin is a thumping majority- a 99.82% share of the vote.
A fine win.
It’s remarkable, because Putin attacked Chechnya twice in appallingly brutal wars with its separatists, wars marked by massacre and murder. All that is clearly blood under the carpet.
The turnout was interesting too.
For example, look at Precinct 451 in the capital Grozny,where Putin got 1,482 votes and Zyuganov got one. Terrific vote. Except that only 1,389 people were registered to vote in the precinct. That means the turnout was 107%.

continues here

h/t to newstwit supremo, michael van poppel

Electricity demand growth: A good way of tracking Peru's economic expansion

The thing with GDP stats is that they tend to be bullshit, especially when newly minted, because there are all sorts of revisions and adjustments still left in the pipeline quite apart from the party political bias that's placed upon the numbers by whatever government is in charge. Now some countries are better than others in having reasonably independent statistics offices and official beancounters, with those in LatAm that can be normally trusted to do a fair job including DANE in Colombia and Chile's Central Bank. 

But what to do about the countries where bullshit competes with facts when it's time to publish macro stats? Offenders in the LatAm include Argentina, Venezuela and Peru (add your own fave to the list, for example I hear Panama's numbers are of the laughable type but I've never really looked much) and in the case of your author, up to his veritable neck in mining whatnots and malarkeys, getting some sort of handle on the state of play in Peru has always been a problem.

So that's the blahblah preamble, here's a method used Chez Otto that offers a decent gauge. Electricity demand in a country is a good one, because you can't store it (easily), it (normally) gets used in the types of things that add directly to economic activity and as long as the generation is kept in mostly private or semi-private hands, the datadumps offered are tough to fake on a global scale. Here are a couple of charts that show the growth in demand for electricity in Peru (NB: not peak demand nor generation figures, what we care most about is total monthly demand for the stuff in GWh). 

This first chart shows total monthly demand and the quickest eye-scan will tell you "Peru growing":


This second one crunches the figures down a bit further and gives the Year-over-Year (YoY) percentage change. This is the one I personally like the most, because it's the one that gives me my proxy to the GDP numbers often faked by governments (Alan Twobreakfasts García is a great politico, but he's a lying tart as well).


What we see here is that apart from the dip caused by the late 08 financial crisis (that hit Peru via the dumpage in commods prices more than anything else, specifically copper and other metals) and then the kneejerk rebound you'd expect from the trailing figures, Peru has done very well in recent years. Pre '08 things clipped along fast with an 8% to 10% YoY growth in demand for electricity, then after the kneejerk had worked its way through we saw perhaps 8% as the standard benchmark

But hey folks, look at recent numbers. For sure there are heaps of countries that would dream of a 6% annual growth in power demand, but there's little doubt that from perhaps mid 2011 things have started to trail off. Data from here, if you care enough

Chart of the day is...

...one that shows the annual numbers of deaths in the mining industry in Peru and in Chile, 2000 to 2011:

The most important thing for observers to do here is not to give a shit. Just like Peru.

sources here and here

3/5/12

First Majestic (FR.to) (AG): Is a 20c quarterly EPS enough to support a $20 share price for a silver miner?

Answer: Nope.


Here's today's NR on annual results, so click through and have a look for yourself. Anyway IMHO and FWIW* revenues came in fine, cash costs are creeping up (but aren't they all?), guidance for FY12 right is on the button. In other words FR.to is still a good company executing well, but its stock is expensive.

Important, three-part instructions for all IKN readers attending PDAC

1) Invite yourself to the McEwen Mining (MUX) partay tomorrow (Tues March 6th) by clicking right here


2) Turn up en masse, eat all the food and drink all the booze.

3) The end.

UPDATE: Holy Crap! I've just checked the click-thru stats and you guys sure like free food offers, dontcha? Anyway, first photo sent in of somebody walking round PDAC with IKN on their iPad wins...errr....something nice (I'll think of summink)

Chart of the day is...

...gold.


And hey, isn't it the most amazing freeekin coincidence that dozens of junior mining companies all get drill results back from the assay labs all on the same weekend? Anyway, here's a song to go with that chart and don't let doom spoil your partaaaay, Mister Junior Miner. 



Don't let the pissy shareholders with their silly "Scuse me, but where has all my money gone?" questions bother you (while you spend their money at the bar), either.

Blogger 1, BBC 0

Well this is fun. Naked Capitalism has decided that IKN is a better source of news about Colombian mining scams than the venerable BBC. 

Can't say I disagree. Read all about it right here and thanks to Richard Smith for the shoutout on one of the better financial blogs out there.

3/4/12

PDAC "Newsletter Writers" presentation day: a user review

Market Narrative has written up a nice user's review of today's Newsletter Writers presentation day at PDAC, with reviews on no less than ten of the presenters who spoke today. Go over and have a read for yourself.

Handicapping the PDAC Monday NR sweepstakes

Last year there were 162 NRs published by Marketwire and sent straight, hot out the oven, to your humble scribe's mailbox on the Monday morning of PDAC (that's to say between midnight and 12 midday on the Monday).

This year I'm going to set the handicap at 150. Anyone for the over? The under? Results as soon as the clock strikes 12 tomorrow.

UPDATE: It's 12:02pm Monday and the result is....115. So the under wins it.

The IKN Weekly, out now


IKN148 has just been sent to subscribers. Yet another poor excuse for an issue, beats me why you guys bother reading it, frankly.