"In a move that should surprise no one, Canadian/Chinese forestry company Sino-Forest filed for bankruptcy in Canada yesterday. The timing of the filing shouldn't be a surprise either, since the company was due to deliver its 2011 audited financial statements and also unsurprisingly couldn't find an auditing firm willing to sign off on them."
All lower again this week (what is it about Thursdays anyway?) but I still say we saw the bottom on March 22nd and there's nothing up there, apart from the distressed selling in the juniors, to evidence otherwise. Meanwhile, as an extra special bonus here's the first three months of the same set of squiggly lines, what with it being end of quarter yesterday, too.
Gold miners down, juniors just beat even, coppers and gold did ok, silver did best. Nuff said.
Fortuna Silver FVI.to) (FSM) has insider buyers now. This from INK Research:
|Fortuna Silver Mines Inc. (FVI) has the following new filing(s) recently:|
|GANOZA DURANT, JORGE A. (President & CEO)|
|SEDI Insider Relationship:|
4 - Director of Issuer
|Acquired 33,000 Common Shares (Direct Ownership) between the prices of $4.330 and $4.420 through the public market on March 29th, 2012 (Holdings Change* of 91.7%)|
|GANOZA DURANT, LUIS DARIO (CFO)|
|SEDI Insider Relationship:|
5 - Senior Officer of Issuer
|Acquired 22,500 Common Shares (Direct Ownership) between the prices of $4.330 and $4.410 through the public market on March 29th, 2012 (Holdings Change* of >= 100%)|
"Too many low-grade deposits: High gold prices have allowed companies to significantly reduce cut-off grades applied to new deposits and resource estimates. It is no longer unique to have a one million ounce gold project. As grades have dropped, the focus shifted to scaling up projects to benefit from economies of scale, which have resulted in substantially higher capex requirements. The net result is operations that have high capex (which is tough to finance as a junior) and relatively high costs (which is less attractive for larger cap producers)."
"Over-promote/under-deliver: Unfortunately, some of the more promising, much hyped new discoveries that have been announced over the past few years have not lived up to the heightened expectations of investors."
Wendell Zerb, Canaccord Genuity (1/18/12) "Exeter Resource Corp. has released the prefeasibility study for its 100%-owned Caspiche Au-Cu-Ag project, with results as expected. We maintain our Speculative Buy rating and 12-month CA$9.35 target price. . .Exeter's Caspiche deposit remains one of the most significant new Au-Cu-Ag discoveries in the last decade; located in the Maricunga belt in Chile and adjacent to Barrick's Cerro Casale and Kinross' Maricunga (Refugio) deposits, Caspiche is well located as this prolific district expands. . .we continue to value Exeter on metrics related to it ultimately being acquired."
16/1/2012 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.
Leo Rosten step aside, sir. There's a new definitive definition of "chutzpah" in town. Origins: Canada.
This is how exactly your humble scribe is feeling this morning:
And we certainly hope you are having a pleasant day
...went out to subscribers just before the bell today.
...zinc LME inventories, 5 year:
LME zinc stocks hit highest since May 1995 SINGAPORE, March 28 (Reuters) -
Zinc stocks in warehouses monitored by the London Metal Exchange (LME) jumped to the highest in nearly 17 years on Wednesday, climbing steadily after years of market surpluses.LME stocks of zinc , a metal used to galvanise steel, jumped by 9,850 tonnes to 898,675 tonnes, latest LME data showed, which was the highest since May 1995, metals strategists at Bank of America-Merrill Lynch and BNP Paribas said. "The zinc market has been in a very large surplus for several years now, and is looking at another surplus this year. Stocks are generally continuing to build up from already massive levels," metals strategist Stephen Briggs of BNP Paribas said. "There's likely to be a slowdown in steel demand growth this year, and for the last few months, for most base metals, demand has been quite weak. Zinc is in worse shape than some because producers have been more than matching demand," he added.
The global zinc market was in surplus by 22,400 tonnes in January, having recorded a 351,000 tonne surplus in 2011, according to Lisbon-based International Lead and Zinc Study Group (ILZSG). 29
BMO Nesbitt Burns Inc.
Scott Gryba, P.Eng., P.Geo.
Fortuna Silver Mines Inc.
Losing A Bit Of Its LusterFVI surprised to the downside with Q4/11 earnings. Adjusted EPS were $0.00 compared to us and consensus at $0.08. The miss was particularly shocking given production and cash costs were pre-released. As of 3/28, we reduce FVI's rating from SO to SP as our PT goes from C$9 to C$6.50.Over the past three years, operating costs per tonne have almost doubled. During the conference call, management guided to cost inflation of 20% in 2012. We have raised our long-term operating costs across the board for Fortuna, with a somewhat disastrous effect on our NAV.Smelter agreements, particularly for "pure" precious metals concentrates have become progressively more onerous recently. San Jose produces this type of concentrate, and given the difficulties that we have observed, we have materially boosted our smelter costs at this operation for 2012.The new mining taxes in Peru are based on operating profit, not on revenue, and they are assessed on a sliding scale. The rates slide from 3% for mines with no operating profit to 20% for operating profit above 85%. These are now incorporated in our Caylloma model.
PS you can download your copy of the CIBC report by clicking here
UPDATE: I've been asked to share the March 25th IKN151 analysis on FVI.to here on the blog. I'm not so sure about the whole thing (it's 9 pages long for one thing, hardly blogpost stuff) but to give the general idea, here's how the conclusion section of the report started.
Before any further thoughts, after last week’s diatribe I again want to stress my full personal satisfaction with the way FVI has disclosed and approached the news dissemination of the recent accidental death of a worker at Caylloma. The company had already said it would be raised at the ConfCall and in the MD&A, but it was above and beyond its call to have featured the circumstances in its NR so prominently (and given it a large space at the top of the MD&A too, instead of tucking it somewhere further down where many eyes don’t travel) as well as making sincere pledges to help those directly affected by the accident when it most likely has little legal obligation to do so (if we read between the lines about the causes of the accident). My decision to sell FVI is not in any way related to this now closed issue.
I’m selling FVI because the way in which 2012 is shaping up doesn’t seem to give the company much more share price growth to the upside, it’s that simple. The combination of reduced revenues and creeping costs, particularly those at Caylloma, mean that cash flow that affects the price the market is willing to pay for a piece of this company is being squeezed on either side. Added to the straight math-crunching, the $57m budgeted for cap-ex at Caylloma and San José combined suggest that FVI will be a better and more profitable company once those improvements are done, but 2012 is shaping up to be a transition year for the company, at least in respect to its results (and yes, bottom line results because they do count round here).
At Sonora I again helped myself to free bread and cheese while the proprietor chatted with a big rancher on the other side of the store. Dean huzzahed when he heard it; he was hungry. We couldn’t spend a cent on food. «Yass, yass,» said Dean, watching the ranchers loping up and down Sonora main street, «every one of them is a bloody millionaire, thousand head of cattle, workhands, buildings, money in the bank. If I lived around here I’d go be an idjit in the sagebrush, I’d be jackrabbit, I’d lick up the branches, I’d look for pretty cowgirls - hee-hee-hee-hee! Damn! Bam!» He socked himself. «Yes! Right! Oh me!» We didn’t know what he was talking about any more. He took the wheel and flew the rest of the way across the state of Texas, about five hundred miles, clear to El Paso, arriving at dusk and not stopping except once when he took all his clothes off, near Ozona, and ran yipping and leaping naked in the sage. Cars zoomed by and didn’t see him. He scurried back to the car and drove on. «Now Sal, now Marylou, I want both of you to do as I’m doing, disemburden yourselves of all that clothes - now what’s the sense of clothes? now that’s what I’m sayin - and sun your pretty bellies with me. Come on!» We were driving west into the sun; it fell in through the windshield. «Open your belly as we drive into it.» Marylou complied; unfuddyduddied, so did I. We sat in the front seat, all three. Marylou took out cold cream and applied it to us for kicks. Every now and then a big truck zoomed by; the driver in high cab caught a glimpse of a golden beauty sitting naked with two naked men: you could see them swerve a moment as they vanished in our rear-view window. Great sage plains, snowless now, rolled on. Soon we were in the orange-rocked Pecos Canyon country. Blue distances opened up in the sky. We got out of the car to examine an old Indian ruin. Dean did so stark naked. Marylou and I put on our overcoats. We wandered among the old stones, hooting and howling. Certain tourists caught sight of Dean naked in the plain but they could not believe their eyes and wobbled on.