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3/17/12

The measure of a man

And it doesn't matter whether you believe there's someone listening to him, either.

Five days of metals and miners: March 17th

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).



And the result of note is just how the PM stocks large and small got seven bells kicked out of them. The other one is how the positive economic influences managed to hold up the copper stocks, more akin to pure industrial, compared to the store-of-value metal gold or Jekyll/Hyde silver.

We'll know in time whether late Weds marked a bottom. Hope so, cos I bought some extra Ag exposure early Thurs.

3/16/12

The Friday OT: Faith No More; Ricochet

The only possible choice today. Wild, rip-ass, blow-frustration-out-yer-head-by-the-earholes track based around a famous Bill Hicks line:

It's always funny until someone gets hurt. Then it's just hilarious.


This is not a song to play at half volume. This is a song to play at "rattle next door's windows and put hairline cracks in mine" volume. Dedicated to JG.

Fortuna Silver (FVI.to) (FSM) and Pan American Silver (PAAS) (PAA.to)

If Fortuna Silver (FVI.to) (FSM) wants to be a leading force in world silver production, then that's fine by me.

But if it wants to adopt the corporate culture of Pan American Silver (PAAS) (PAA.to) to get there then FVI should inform us of its intentions right now. It will make my personal choice (and that of the people behind the many mails received this morning, thanks for the support people) of whether to sell FVI or to remain a shareholder that much easier. Because be clear on this, if you do not clean up your act right now, Jorge Ganoza and friends, you will lose a lot of support both at retail and institutional level.

This chart shows the number of deaths at PAAS mines in Peru since the year 2000. 

Ross Beaty's dirty little secret. Data from here

As is the Pan American style, not a single NR emitted to tell people of the accidents, no time lost in closed mines while the company tries to get to the bottom of the causes. And most importantly, no improvement ever noted. Well, we could say that 2012 has no accidents so far, that's something i suppose.

The above chart is exactly, precisely absolutely why your author and many others would never hold shares in PAAS. So come on FVI, tell us your plans. Is the way you've kept hush hush about the death of Sixto Chambilla Apaza at your Caylloma mine the shape of things to come, or are you going to collectively man up, tell us that keeping the death quiet was a gross error of judgment and that from now on transparency will reign?

I'd really like the guys at FVI to have a good look at that chart above and think on it. And while they're at it, if PAAS really is the role model they should take a look at this two year price chart as well.

dyodd

Chart of the day is...

...Fortuna Silver (FVI.to), February 26th to date:

Fortuna Silver (FVI.to) (FSM) fails miserably

You know what pisses me off? I'll tell you what pisses me off. When a company that I think displays all the hallmarks of best practices in the mining industry falls way, but way short of the mark. When a company in which I've held shares for years and watch grow in an extremely successful way, one that I've championed to others, turns out to prefer the shady way of doing business once it's reached a certain level of maturity and success.

On February 26th, Fortuna Silver (FVI.to) (FSM) suffered a fatality at its Caylloma mine in Peru. According to the mandatory filing at Peru's Ministry of Energy and Mining (MEM) Sixto Chambilla Apaza, a third party contractor working at Caylloma was killed "by explosives". As mentioned just the other day, we know that mining is a dangerous occupation and that however exacting a company may be, fatalities are (forgive the irony) a fact of life in the business. But what's hard to swallow is that Fortuna (FVI.to) (FSM) preferred to keep the death quiet, away from news media and out of any sort of news release that any responsible mining company, although it has no obligation to publish, should damn well publish.

No, FVI preferred to keep it quiet, which may have been a choice that was influenced by the arrival of PDAC just afterwards and the way in which company CEO Jorge Ganoza may have had to face difficult questions when presenting on his company. Coincidence? I think not.

I found out about the death this evening, March 15th, and it was only by some semi-chance as I was looking for another dataset at the MEM website and while there decided to check in on the accidents and deaths reports. On noticing the fatality at Caylloma, I immediately contacted FVI IR who told me the company felt "very perturbed" by the accident and that they planned to inform the public via the year-end report due out March 23rd and also at the conference call to discuss the company's year-end results slated for March 27th.

Yeah well, let's call bullshit on that immediately because how can a management team feel "very perturbed" and then decide not to disclose the thing they were all perturbed about until a full month (and one day) later? And what about that disclosure, stuck somewhere in the MD&A, all kinda "yes we did this and achieved that and revenues were this and profits were that and wow look at us and oh by the way some 3rd party grunt blew himself up the other day but the outlook for 2012 is great and we're just wonderful and look at all that silver....." , or in other words the type of disclosure that assuages the brass but is done in the least damaging way possible...over a month after the event and long after PDAC and all those pats on the back have passed.

Not good enough, Fortuna Silver. Not good enough by a long, long way. If this is the how you've decided to grow up and become a "leading force in world silver" (or whatever that soundbite was), while on the way discarding the best practices that made you an attractive stock to own in the first place, good luck to you. You can do it all on your own.

Finally, before publishing this evening your humble scribe sent a draft of the above to FVI to allow for comment and also asked for further details on the death of Sixto. This below was the reply received from the FVI IR department (translated by your author) approximately 90 minutes after the request. Except to note here that the government authority investigation is an automatic occurrence in Peru and it would be strange not to have one move into action immediately, the reply is offered with no further comment:

Let me start by stating that our company does not hide information from the market nor do we go about our business in a shady way.


To answer your question, Sixto died at 10am on February 26th on level 12 of the Animas vein when his set charge exploded in an uncoordinated way. This accident killed Sixto instantly and his immediate superior, Felix Larota, was injured. Felix is currently recovering.


The accident is under investigation by government authorities and an internal investigation is about to be concluded.

The company has decided to inform and discuss the unfortunate event via its MD&A and the telephone conference call. You have the right to disagree with our decision.
UPDATE: Thanks for all feedback, both here and in the comments section below, on this subject. I'd like to thank Gary BiiWii for the post and link, too. There's a follow-up post on this subject here. Also, here below is a selection of the unsolicited mails received this morning from readers (sorry if yours isn't included, there has to be a limit at some point):

From JM
So does that mean you're calling a sell on FVI?
 
I mean, I don't know what other good silver producer you could replace it with. Then again, you do have your ethical standards and nobody who knows you would expect otherwise.
(the answer to that one is in the follow-up post)

From HA, who was commenting on a mail exchange a few days previously in which we both praised FVI as a company.
" I think Fortuna's mgmt. has made their bones. "

Is there a word (usually German) for when you make a statement and it gets contradicted almost immediately?  There should be.

Good job. It kind of hurts when you like the company.

From GC
"...good piece on FVI today.  Not liking that one bit.  Was going to buy more today.  Am holding off - you said it - they need to make an announcement regarding the error of their ways, the accident, and it will NOT happen again."
From reader W:
Fortuna's reaction must have been coldly calculated over many hurried meetings fraught with clammy hand wringing and filled with maggots buzzing, "optics," "damage control," and "sad-sad-sad, this coffee's great."

Some thought might've even been given to compensation, but that compassion would be the bailiwick of legal, delegated by the boardroom.

Your own blog, via the Big Picture link provided this context:

Final word: There will be more on this in IKN150, out Sunday.

3/15/12

Memo to* Louis Lobito James of Casey Research

Guyana Goldfields (GUY.to) just broke under $4, can we stop buying it now, please?




*in tribute to Sam Antar

The fun never stops at Great WashBasin Gold (GBG) (GBG.to)


No BS manipulation to see here, oh no no no no...

Further to this post dated March 9th that documented the wonderstuff that is Great WashBasin Gold (GBG) (GBG.to) (and remember, washbasin refers to the amount of dilution at GBG...see that link for the share count crunchy goodness) this morning we have new news from the company.  

Great Basin Gold Ltd. ("Great Basin Gold" or the "Company"), (TSX:GBG)(NYSE Amex:GBG)(JSE:GBG) announces that the Company and the syndicate of underwriters led by RBC Capital Markets (the "Underwriters") have agreed to terminate the previously announced public offering. The Company and the Underwriters have entered into a new agreement with respect to a public offering, pursuant to which the Underwriters have agreed, on a bought deal basis, to buy 66,700,000 units of the Company (the "Units"), at a price of $0.75 per Unit, for aggregate gross proceeds of approximately $50 million (the "Offering"), by way of a short form prospectus. Each unit will consist of one common share of Great Basin Gold (a "Common Share") and one half of a purchase warrant (each whole warrant, a "Warrant"). Each Warrant will be exercisable for a period of 2 years following the closing of the Offering at an exercise price of $0.90 per Warrant. The Company has granted the underwriters an over-allotment option to purchase additional Units up to 15% of the Offering, for a period of 30 days following the closing.

Well I laughed, at least. So, an extra 6m or so onto the share count, Freddy....don't make it a habit now, willyaz?

  Thanks to LR for the headsup.

A Flash update...

...has just been sent to subscribers. Belt'n'braces post completed, please have the nicest of days.

Chart of the day is...

..zinc spot, six months:

Considering the inventory build-up, the price fetched by the metals has held up very well. these last couple of quarters and all producing mines must be turning a profit at this price. A modest one perhaps, but a win is a win in this crazy game.

3/14/12

Risks Challenging Latin American Miners

A good piece with plenty of insight at The Gold Report today. Go read.

What Canaccord Wealth Management can do for you

On Monday Feb 27th, as we who are dumb enough to care about junior mining companies already know, Batero Gold (BAT.v) released a disappointing 43-101 resource report for its Batero-Quinchia project in Colombia. The stock plummeted that week and by the close of March 1st (four days later) it has dropped from the $2.60 or so of the previous weeks to close at $1.20.

That was when Hoesgen Investment Partners, a subsidiary of Canaccord Wealth Management, sent out this letter to its clients:

From: Hoesgen Investment Partners [mailto:hip@canaccord.com]
Sent: Friday, March 02, 2012 XXXXXXX AM
To: Undisclosed recipients:
Subject: Batero Gold Corp (BAT.V) | TDV Publication


Good Afternoon,
 
Please find attached a report titled, "Batero Undeservably Plummets on Whittle Pit Shell Misunderstanding" published by Jeff Berwick and Ed Bugos of The Dollar VIgilante.    We encourage you to read this publication. 
 
For more info about TDV, please visit their website at  http://www.dollarvigilante.com/
 
Thank you,
 
Hoesgen Investment Partners | Canaccord Wealth Management
D
: 604.643.0293 | F: 604.643.1851
Providing complete and unique financial services


Along with that mail, Hoesgen Investment Partners sent its mailing list the PDF you can read on this link here but if you don't feel like downloading the document, we can sum up by saying it was one-sided bullshit and ended up by urging its readers the average down on BAT.v at $1.20 or so. With all that in mind, consider the following:

  • Since that mailer went out, BAT.v has dropped another 28.3% to trade as your author writes at $0.86 (it was under 80c earlier today, too).
  • Do you consider a website with a name like "The Dollar Vigilante" to be a place where you're going to find expert opinion on geology and mine engineering?
  • Canaccord has under its umbrella plenty of qualified geologists, any one of which in a better position to comment on the technicalities of the BAT 43-101
  • Canaccord has been pumping the merry hell out of BAT.v for over a year.

That The Dollar Vigilante gives out crappy information to its goldbug conspiracy theory loving subs' list is one thing. To see a full service brokerage use the worthless and utterly erroneous analysis as a way of grasping at straws over a bad trade gone wrong and try to get its client list even longer in this obviously failed company is quite another. If the brass at Canaccord had any integrity or backbone they'd track down the employee that sent the TDV article out to their client list and it'd be Go To Woodshed, Go Directly to Woodshed, Do Not Pass Go, Do Not Collect $200.

Fortunately for him/her, there's a distinct lack of integrity and backbone at Canaccord at all levels, not just theirs.

No, it isn't childish

Under yesterday's post on the call made by Louis James on Guyana Goldfields (GUY.to), some anonymous commenter added "Isn't this rather childish !" (badly punctuated, but waddya expect?) Well, you may not like the sarcastic method of delivery, dear anon, but in your humble scribe's opinion, trying to save one greenhorn from the clutches of the self-serving scam merchants at Casey Research is something that shouldn't be considered a puerile activity in the slightest.

That's because, sadly, we've seen this situation before from this so-called anal yst, who is so cocksure of himself and fed on his own arrogant ego that he prefers to compound errors rather than do the honest, adult thing and admit a mistake. Today's situation with GUY.to is strangely reminiscent of what we saw in East Asia Minerals (EAS.v) and Louis 'Lobito' James of Casey Research last year.

  • Both were called buy by Lobito
  • Both then came out with disappointing 43-101 compliant reports
  • Both sold off
  • Both were then called "average down" or "buy again" or "refresh buy" (whatever house-speak they use over there) at Casey Research.
  • Both continued to dive hard.

And to give you the idea of just how bad the EAS.v call was, here's the chart from this post dated August 10th that documented just how many times Lobito insisted on his subscribers buying EAS.v all the way down.

 (click to enlarge and for better focus)

Today' EAS.v trades at $0.53 (yeah, fifty-three cents). 

Bottom line: I don't think trying to save greenhorn cash from the idiots at Casey is childish, not in the slightest. But hey, dyodd dude and don't take anything you read on any blog as gospel...especially this one.


Chart of the day is...

...gold.

Keeping on searchin' for the trend.....need a trend.... like them trends....gotta find the trend.... can't see the trend......hold on!

Found it!

3/13/12

Vena (VEM.to)

Rule in play: If you want to find something, look in the right place.


.

Bacon joke title suggestions, please

This newsflash comes to you by translating this report from Noticias Argentinas:

Entre Rios: Man Dies After Having Sex With Pig
Body found in pigsty. Pig found alongside the naked man

A 47 year old man was found dead inside a pig sty in the Entre Rios province locality of Victoria, and police are investigating if the death occurred during a case of zoophilia.

The man, named Maximo, was found dead yesterday at around 6:30pm at the Grosso farm, located close to the local branch of the Farmer's Society, according to media and police sources.

The body was found inside a pig sty where there was only one female pig.

Also, a few metres from the body a condom containing semen was found, according to reports.

Initial investigations suggest that the man, who lived at the farm, died of a heart attack while having sexual intercourse.

The body was taken for autopsy to confirm that it had not been subjected to any sort of violence and whether the man had taken any pills to stimulate virility.

Buenos Aires, N.A.

UPDATE: First two suggestions are in. First from SB for all you film buffs:

And the whole time he was yelling, "Squeal like a pig! I said squeal!"

Now from MP, with a subtle mining take on it:

Why am I not surprised that the alleged act took place at the "Grosso" farm?

JN chips in
1.  Porky's: The Final Chapter (terrible 1980's comedy) http://www.youtube.com/watch?v=AFpsRr0WjDE
2.  Pork Grinds
3.  Driving Ms. Piggy
Reader MM sends in (and we quote) "the secret to a good bacon cheese burger"

Now 'RW' gives us...

 Sounds like a hambush to me


But the best (so far at least) comes from the slection in the comments section below and done by that literary genius (and published author, which is an unfair advantage methinks) Richard G of Mexfiles:

 A sow. He came. He conked.

.

Guyana Goldfields (GUY.to): Checking in on Louis 'Lobito' James's call on the stock

He reco'd it at $8.69 back in June of 2011 and as we noted back in late February when the Guyana Goldfields (GUY.to) feas study came out and severely disappointed the market, the world was awaiting, bated breath and chewy fingernails, for the verdict that Louis 'Lobito' James of Casey Research would give on his underwater position. 

Luckily, we didn't have to wait long, as that all-seeing oracle came out with the call on March 1st 2012. At the time GUY.to was marked at $5.87, a 32.5% loss and here's how Lobito summed things up:


And the world breathed a sigh of relief! Lobito averaged down, got aggressive, KNEW it was worth more than $5.87, GUY.to was saved from the clutches of disaster by our hero, tickertape parades already planned. So let's see how things have been going since then, shall we?



Oh dear. GUY.to now at $4.60. That's 47.1% down from the original buy price and and extra bonus special 27.6% down from this month's buy it again call. Beats me why the market is daring to opposed Lobito...

UPDATE: I'm sorry, did I say 'down to $4.60'? That should be "down to $4.46".

Goldgroup Mining (GGA.to): A united front

At a delicate moment in the permitting process for Caballo Blanco, you'd certainly expect the management of Goldgroup Mining (GGA.to) to be putting on a united front and showing confidence about the upcoming decision, due by March 23rd from Mexico's Semarnat enviro people. Which is why the way in which Richard Irvine, head of Minera Cardel (the local subsidiary that holds Caballo Blanco for GGA.to) has just bailed on all his shares of GGA.to looks kind of weird.

Filing
Date
Transaction
Date
Insider Name Ownership
Type
Securities Nature of transaction # or value acquired or disposed of Unit
Price
Mar 12/12 Feb 27/12 Irvine, Richard Michael Direct Ownership Common Shares 10 - Disposition in the public market -30,000 $1.36
Feb 22/12 Feb 22/12 Irvine, Richard Michael Direct Ownership Common Shares 10 - Disposition in the public market -30,000 $1.35

Even weirder is the fact that Richard Irvine's entire holding of GGA.to shares was 60,000....in other words, he's just sold all the shares he owned.


Irvine, Richard Michael
Insider's Relationship to Issuer: 8 - Deemed Insider - 6 Months before becoming Insider
Transaction
Date
Transaction Nature # or value acquired
or disposed of
Unit
Price
Account
Balance
Security Type: Common Shares (Direct Ownership)
Feb 27/12 10 - Disposition in the public market -30,000 $1.36 0
Feb 22/12 10 - Disposition in the public market -30,000 $1.35 30,000
Dec 16/11 10 - Acquisition in the public market 2,300 $1.11 60,000
Dec 16/11 10 - Acquisition in the public market 3,000 $1.10 57,700
Dec 16/11 10 - Acquisition in the public market 4,700 $1.09 54,700
Nov 23/11 10 - Acquisition in the public market 5,000 $1.30 50,000
Nov 14/11 10 - Acquisition in the public market 10,000 $1.50 45,000
Oct 7/11 10 - Acquisition in the public market 10,000 $1.33 35,000

Question: Who'd know more about the situation Caballo Blanco finds itself in on a local level than the man in charge of the local operation in Mexico? data from here.

UPDATE: Several readers (thank you all) have written in to note that Richard Irvine seems to have left GGA.to and is now working for Gold Resource Corp (GORO), the silver producer in Oaxaca that loves to pretend it's a gold producer. Here's a link to the news. This does explain why Irvine might sell his shares of course (it's a good excuse at the very least and might even have been part of the deal), but then again we'd really like to know why he's abandoned ship at this rather delicate moment...well I would at least. Also, it's pretty wild to think that Piggott at GGA.to head office doesn't think the loss of his main man at his main property isn't a material event and that he doesn't think he has to announce it to his shareholders. Oh well, I never could understand them Brits and how they tick anyway....old bean.

Chart of the day is...

...U308, two year chart


The interesting bit here is the LT contract price rather than spot, which is now just a lick and a spit away from the 2010 low (the time when spot was $41/lb and $42/lb). Hell, maybe something happened about a year ago that put the kibosh on U as an investment...any ideas, people?

Great Panther (GPR.to) (GPL): A really crap silver mining company

There's so much to laugh about regarding the 4q11 numbers out of Great Panther (GPR.to) (GPL), starting perhaps with the near unbelieveable fact that it made a net loss in one of the richest moments for silver at market possible. Then there's the way higher than guided cash costs. Then the nasty looking G&A spike. Then the reduced throughput at its main mine (well, I say "main" but it's not even 500tpd) which showed the worst quarterly figures for the year at an average of 436 tonnes per day in the period.

But the weird one is this:


Once you consider this and this, then read this in the MD&A...
The Company was successful in selling the majority of the excess Guanajuato concentrate backlog which had been built up in the second and third quarters of 2011.
 ...and take into account a typical underlying shortfall of 15,000 to 20,000 oz per month between produced silver and payable silver I think there's still something in the region of 80,000 to 100,000 ounces of silver missing here. I could be wrong of course, but wouldn't you just love to know where $2.5m to $3m worth of Ag has got to? I would, so let's hope that Robert Archer reveals all during Tuesday's CC.

dyodd

3/12/12

Apple (AAPL) Post-Jobs

So would you remind me again just why I'm spending untold hours of my time filtering, cutting slicing and dicing my way through the shark-infested, scam-laden and morally dubious world of junior mining stocks?

Seriously.

UPDATE: No, seriously. I'm not joking.

Never invest in AuRico Gold (AUQ) (ex-Gammon Gold)

This from IKN149, out yesterday. It speaks for itself.

Mexico: A death in a mine
Mining is a dangerous business, that’s a given. The job of the modern mining company is to reduce danger as much as it can through best practices etc, but its responsibility to the mining community continues after any fatal accidents occur.

Such accidents are lamentable but, even at the best mines and under the most responsible of companies in the world, they are sadly bound to happen.If they do, the good mining companies will tell the world immediately, inform on the circumstances to its shareholders (the serious mining companies are almost always public quoted companies these days) and to the general public and not try to sweep things under the carpet for fear of negative repercussions.

Just another reason why it’s tough to take AuRico (AUQ), ex-Gammon Gold, seriously as a mining company. Add last week’s events to the mix of bad production results, long-term under-achievement on revenues labour strikes and community strife at the company, ladies and gentlemen readers. On Tuesday March 6th José Alfredo Flores Flores, 29 years old, was killed by underground rockfall at the AuRico Ocampo mine in Mexico. The accident occurred as Flores was collecting samples in a disused shaft area of the complex. The two people accompanying him were also injured, one with serious head injuries. The body of Flores has not yet been recovered from the accident zone because the company says that the rock in the zone is still unstable and it’s too risky to go there for a while (16). None of this has been reported by AuRico, not by the company (17) to its shareholders, not to the press and the only way that your author knows about it is that he can read Spanish and makes a point of watching for news on mining companies in the LatAm region. Even worse, AUQ did put out a NR after the incident that made no mention at all to the Ocampo fatality but preferred to give shareholders the warm and fuzzy about its development at the Young-Davidson property.

Let’s be clear here: If a fatality happens at a mine owned by Newmont, Barrick, Gold Fields, or any other world-class mining company you care to mention, the company will have the moral fibre needed to tell the world about its misfortune. The best juniors, the ones in which I look to as potential and actual investments, are the ones that will do things the way the big boys do.  Are you seriously expecting me to invest my money in a company like AUQ that can’t even show the most basic and common decency to its workforce? The management style of the 20th  century has to remain in the past and the idiots that insist on continuing its style, such as the idiots that run AUQ, need to be first called out and then put out to grass as they have no place in the mining industry of the future.

Chart of the day is...

...coffee, monthlies:

I remember back in late 2010 when the speculators running their scam looked at us with serious, unblinking faces and said that the price rise was pure supply and demand, no hint of market rigging.

The funniest was how everyone believed them

3/11/12

The IKN Weekly, out now


IKN149 has just been sent out to subscribers and hey by jingo slap my thigh, I think we've found ourselves a jolly old stock worth buying at last.

ps: two subscriber mailboxes seem to be full to the brim and the Weekly has rebounded right back at me. Please get in contact, guys...or preferably make some space in your inbox then get in contact :-)

Cassandra Wilson's Harvest Moon

I cannot be selfish, I must share.


After sticking up Neil Young singing his own song, Harvest Moon, on the Friday OT a couple of days ago I've just received the second mail asking about a version sung by Cassandra Wilson that was once featured on the blog but was later deleted by Youtube. Well here it is again, the most spellbinding cover version of any song, let alone this pearl. 



Cassandra Wilson, wow wow wow wow wow. What a woman, what a voice. You won't regret hitting that play button and sitting back for seven minutes and eleven seconds, gilt-edge guarantee.