Subscribe via email, get all daily posts sent to you next day (and without all the annoying ads)

4/7/12

Five days of metals and miners: April 7th

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).


An easy one to sum up this week: Don't fight the Fed.

But even your author can't help but look at this and think the PM miner sell-off was overdone last week.

4/6/12

The Friday OT: Stevie Wonder on Soul Train (including Superstition)

Dedicated to pal TW, owner of exceptional music taste and the headsup giver for this youtube.



You have Stevie Wonder and Don Cornelius (R.I.P.) and nearly 13 minutes' worth of a Soul Train episode from 1971. You get interview, then at 3:25 Stevie plays Superstition, then more Q&A, then at 9 minutes Stevie plays a jam with the audience. And a whole boatload of great dancing going on too, but most of all you have Stevie banging down of one his great tracks from the height of his musical, singing and songwriting powers. Don't miss that jam starting at 9 mins either, cos it starts gently but the buzz grows and grows.

Unmissable Friday OT this week, ladies and gentlemen, spine-tingling stuff. Thanks TW dude.

x

Good Friday Art (repeat post)

The following is repeated from this April 2011 post.


Christ of St. John of the Cross, painted by Salvador Dali in 1951.

 click to enlarge (gets very big)

We'll leave the comments to Dali himself, along with a chunk out of the wiki page on the painting.
The painting is known as the "Christ of Saint John of the Cross," because its design is based on a drawing by the 16th century Spanish friar Saint John of the Cross. The composition of Christ is also based on a triangle and circle (the triangle is formed by Christ's arms; the circle is formed by Christ's head). The triangle, since it has three sides, can be seen as a reference to the Trinity, and the circle may be an allusion to Platonic thought. On the bottom of his studies for the painting, Dalí explained its inspiration: "In the first place, in 1950, I had a 'cosmic dream' in which I saw this image in colour and which in my dream represented the 'nucleus of the atom.' This nucleus later took on a metaphysical sense; I considered it 'the very unity of the universe,' the Christ!"

For what it's worth, your humble scribe has visited the museum where this painting hangs on many occasions. Mainly to see this work, really. I don't know where they hang it these days, but back then it used to be at the end of a very long corridor on the first floor and the best way of reaching it was to walk the corridor from one end to the other, watching the painting get bigger and bigger in front of your eyes. It's awe-inspiring.

4/5/12

A question for charties

By way of an update to this post dated March 7th (a full month, my how time flies), here's the question for all you technical analysis enthusiasts out there:

Does this count?
dyodd




UPDATE: By the looks of a couple of mails that arrived very quickly after the publishing, I get the feeling that the sentiment behind this post has been misunderstood (probably because of author's heavy hand rather than reader's interpretation) so here's a quick line to clarify. The question here is a genuine one and I'm actually interested (for a change) in how TA rules would interpret this, because on the day before the ELG.v offer GOZ.to traded at 76c intraday but closed at 75c, then yesterday GOZ traded down to 76c but closed at 80c. So I suppose my question is whether intraday gap closing counts, or whether it's the closing price that counts (cos if it's closing prices, the gap hasn't closed yet).

The bad news, the good news, the annoying news

The bad news is that once again, seven types of fecal matter are being kicked out of my juniors portfolio today.

The good news is that at least it's not lonely out there.

The annoying news is that, just when your humble scribe is supposed to be running and hiding for cover just like all of the rest of the whole of the juniors and metals market (and when everybody does the same thing you just know they must all be doing the right thing, yeah?) this Sunday coming in The IKN Weekly issue IKN153 we are recommending yet another brand new buy in the junior exploration sphere. Just to make sure that your author's exposure the sector is fully topped up and can lose the most amount of money in the quickest period of time. Dontcha know.

Today's quiz question

What's better to own?

a) Half of something 
b) All of nothing

Answer below, after the chart.


Answer: a)


More details here

A Plan B at La Oroya? Some cojones starting to show, perchance?


Hey, this Doe Run La Oroya Ira Rennert Nadine Heredia Ollanta Humala thing might just get interesting soon. Here's El Comercio today:

The cabinet chief, Óscar Valdés Dancuart, was tight-lipped while mentioning yesterday that the government had a Plan B, which he did not wish to reveal, in the event that the group of creditors of the Doe Run Peru company didn't accept the financial restructuring plan that the mining company will present on Monday in order to re-start its operations at La Oroya.


However, the prime minister was emphatic when saying that under no circumstance would the government accept the conditions demanded by Doe Run for the plant re-opening.


He also remarked that neither would they accept any more postponements in the PAMA (Programa de Adecuación y Manejo Ambiental) environmental clean-up program because that would put the La Oroya environment and its population at risk, particularly the youngest amongst them. Continues here

C'mon Ollanta, stick one to the scumbags and apologists, onetime.

Chart of the day is...

...TVI Pacific (TVI.to), two year price chart:


When a junior silver mining company with a less-than transparent track record of disclosure, a poor record of over-promise and under-produce and a band of paid pumpers that extols its virtues at every corner announces a new member of senior management has just been appointed, but doesn't say where they have come from, your author is immediately interested and cynical as he is, runs around the interwebnetpipes to find the missing information.

Here's how Great Panther Silver (GPR.to) (GPL) announced the appointment of Ms. Rhonda Bennetto to the position of Vice President, Corporate Communications today:

"Ms. Bennetto has held senior roles with several publically traded companies with a focus on international mining and resource assets, including Mexico, and brings more than 18 years of experience in capital markets and investor relations expertise to Great Panther. Ms. Bennetto will be one of the key liaisons between Great Panther and the investment community. She will lead the Company's Corporate Communications function, developing and implementing external and internal strategies that will enhance Great Panther's strategic vision of becoming a profitable mid-tier primary silver producer."

And as all we got from the serial-sophists at GPR.to was "...several publically traded companies..." your author went and looked, of course. And yeah, you've guessed already haven't you? Ms. Bennetto has come from TVI Pacific (TVI.to). Hmmm...12c to 4c....could have done a little better there, Rhonda. But of course, this isn't why Robert Archer decided not to put in the name of Rhonda's last employer, oh no no no no no.

4/4/12

Luck

It's easier to feature the occasional Jack Kerouac or Robert Frost on these humble and virtual pages than it is Wilfred Owen. The reason for me (and hey, it's my blog after all) is that I can relate to the messages from Mending Wall, or The Road Not Taken, or On The Road because they touch on themes that are relevant even today. But on reading Owen there's no easy correlations or connections, as it's witness to a past reality too difficult to imagine and the only link I can bring myself to make with this modern world is just how amazingly, ignorantly, stupendously lucky our generation is. Less than a hundred years on. The other thing is just how difficult it is to excerpt Owen. Unlike Frost, the lines don't stand up on their own as individually quotable, as although the quality is set by the tone and imagery he conjures, the brilliance lies in the structure of his work. 

Due to out-of-office commitments, posting will be light today. I leave you to consider the work that Siegfried Sassoon called Owen's "passport to immortality", Strange Meeting.

Strange Meeting
Wilfred Owen (1893 - 1918)

It seemed that out of the battle I escaped
Down some profound dull tunnel, long since scooped
Through granites which Titanic wars had groined.
Yet also there encumbered sleepers groaned,
Too fast in thought or death to be bestirred.
Then, as I probed them, one sprang up, and stared
With piteous recognition in fixed eyes,
Lifting distressful hands as if to bless.
And by his smile, I knew that sullen hall;
By his dead smile I knew we stood in Hell.
With a thousand fears that vision's face was grained;
Yet no blood reached there from the upper ground,
And no guns thumped, or down the flues made moan.
"Strange, friend," I said, "Here is no cause to mourn."
"None," said the other, "Save the undone years,
The hopelessness. Whatever hope is yours,
Was my life also; I went hunting wild
After the wildest beauty in the world,
Which lies not calm in eyes, or braided hair,
But mocks the steady running of the hour,
And if it grieves, grieves richlier than here.
For by my glee might many men have laughed,
And of my weeping something has been left,
Which must die now. I mean the truth untold,
The pity of war, the pity war distilled.
Now men will go content with what we spoiled.
Or, discontent, boil bloody, and be spilled.
They will be swift with swiftness of the tigress,
None will break ranks, though nations trek from progress.
Courage was mine, and I had mystery;
Wisdom was mine, and I had mastery;
To miss the march of this retreating world
Into vain citadels that are not walled.
Then, when much blood had clogged their chariot-wheels
I would go up and wash them from sweet wells,
Even with truths that lie too deep for taint.
I would have poured my spirit without stint
But not through wounds; not on the cess of war.
Foreheads of men have bled where no wounds were.
I am the enemy you killed, my friend.
I knew you in this dark; for so you frowned
Yesterday through me as you jabbed and killed.
I parried; but my hands were loath and cold.
Let us sleep now ...

Chart of the day is...

...silver

And if you're one those of you worrying and fretting and oh so concerned about the drop in silver seen in the last 24 hours, or gold for that matter, the only other post scheduled on IKN today is dedicated to you.

4/3/12

Mo' Pacific Rubiales (PRE.to)

Following on from the note below, check out this excellent analysis of the big strategic mistakes Pacific Rubiales (PRE.to) has been making recently in Colombia, published by Risk Management firm THAW. Here's how it starts, click through for the rest:

What Oil Companies Should Not Do
When Hugo Chavez became president of Venezuela, he decided to seize complete control of Venezuela´s most important asset: PDVSA, the Venezuela  oil company. His question to the people was simple: why if the country is so rich you are so poor?
Decades later the Venezuelan diaspora has moved to places such as Miami, Panama and most recently Colombia.   The technical expertise of many of these talented Venezuelan PDVSA professionals has been key to improving the know how in the emerging Colombian oil industry.  Combined with changes in the regulation of the Colombian oil industry which eased the restriction on the activities of foreign nationals in the oil fields, Colombia has begun to see major improvements in exploration and output.   Critical to this success are Canadian petroleum firms operating in Colombia.   The most successful one is certainly Pacific Rubiales.
As Pacific Rubiales has grown its operations, attention to the company and its practices  has also grown.  So when workers in the oil field protested and halted production for one week, Pacific became a public subject for Colombians overnight.  The cause of the disturbance? A classic labor dispute: local operators who were contractors felt their wages were too low for the working conditions they were asked to endure.  Simply put, the workers wanted better pay and better working conditions.
What has followed are a series of mistakes by Pacific Rubiales that continue to make matters worse — and will ultimately threaten the oil sector as a whole if not corrected.

Gotta love Serafino Iacono

Below is the translation of this report in Colombia's El Espectador, dated April 2nd 2012. And by the way, those of you versed in the language of Cervantes should click through, read the original version and also take in the highly entertaining comments section below the note. Anyway, here goes with the translation:

Economy: April 2 2012 - 9:42pm

The legal battle of one of the Pacific Rubiales shareholders

An Avalanche of Lawsuits and Crude Oil

By David Mayorga

The reporter Héctor Mario Rodríguez has had to face multiple lawsuits due to his reports that have highlighted the irregularities committed by Serafino Iacono

The reporter Héctor Mario Rodríguez and the 
Venezuelan investor Serafino Iacono. / Gabriel 
Aponte and Dinero Magazine


The snowball started with a simple revealing of stock market information. In 2009 Héctor Mario Rodríguez, editor of the news site Primera Página, heard of a high level business scandal inside Coalcorp, one of the main mining companies on the Toronto Stock Exchange. It concerned a law suit for $161m filed against five of its high level executives for a series of irregular transactions between 2005 and 2008. The names of three of the accused immediately caught the eye of the journalist: Serafino Iacono, José Francisco Arata and Miguel de la Campa, all of them Venezuelan and shareholders of Pacific Rubiales (PRE.to), the Canadian financed oil and gas company that was at the time changing the face of the Colombian private sector oil business.

"They were fired in 2008 and the company (Coalcorp) hired a forensic investigation to the company called Kroll. The only thing I did in September 2009 was to report this, that the gentlemen concerned had made a series of maneuvers", he said.

The experts found that large sums of money had been diverted to a specific foundation and that they had covered up the movements of one of their executives. But for Hernández, the next day the judicial problems against him began. "They sued me for this case, which ended up being found as true. But I also reported that they had bought land on the island of Barú from "Turco" Ilsaca, that they had bought a yacht and that they had made improper use of the company corporate jet..."

The suit for libel and defamation was brought before the General Fiscal of the Nation by Iacono, and after a tense and prolonged judicial process the judgment went in favour of the journalist in 2010.

The message of the suit
Among the anecdotes that make up this case, Hernández highlights the events of April 9th 2010, when the Fiscal called him to declare under oath on the Day of the Journalist. This is a case of messages. They wanted to tell me that I don't touch them any more", he said. But this wasn't the only suit to which he had to answer. As the legal process advanced, he decided to continue investigating the information about companies in which Iacono had interests and those that, due to them being publicly listed companies, must report to the Stock Market. There he found "bizarre salaries" that he (Iacono) and his colleagues were awarded, contractual problems between Pacific Rubiales and Ecopetrol and, above all, the confusions in the numbers at the oil and gas company Alange, which had changed its name to PetroMagdalena. "At the end of 2010 40 executive were fired for having inflated the numbers. When the issue was made public in January of 2011 the share price dropped by 70%", he recalled. The response wasn't long in coming because this time, as well as being sued again for libel and defamation, they accused him of having caused economic panic.

The judicial avalanche
"This charge is made when a person, with a news item, wants to generate expectation or put in risk the judicial or economic security of a company. Not that of the economy in general", explains Jaime Lombana, the lawyer that represents Serafino Iacono in this case, from New York. Not only the company price, but also that of Pacific Rubiales as, according to the litigant, the snowball converted into a large avalanche. "As a consequence of the acts of Héctor Mario Rodríguez, at that moment the shares of Pacific Rubiales (PRE.to) fell slightly due to the noise generated."

Between notifications and declaration, the fight has left the courthouse
Various organizations that defend the right to information, such as the Foundation for the Freedom of Press (Fundación para la Libertad de Prensa (FLIP)) of the Circle of Reporters of Bogotá (CPB) started to take interest, while in recent weeks some media channels, amongst those El Espectador, have re-run an editorial from the website Primera Página denouncing that they want to gag the press using judicial bullying (ie the constant notification of process steps). And from this, a new dispute has arisen between the parties, as the editorial stated that "..the editor and also the director of Primera Página were part of El Espectador in the difficult era of the 1980s and 1990s and felt first-hand the daily pressure that was put upon the Cano family, then owners of the newspaper, and then all of the editorial and reporting team. So it's fair to say that the lessons of undue pressure on reporters have already been taken and passed (by us)."

According to Lombana, the greatest problem has to do with the indirect association that the report makes between the shareholders of Pacific Rubiales and the narcotrafficking mafia. "A normal reader, reading through the report, could not tell the difference (between the two parties)."

But for Rodríguez, the centre of the problem is that the oil and gas company cannot afford to lose its contract renovation in 2016, for the Rubiales oil field contract, the goldmine of its Colombia business. "Pacific is worth today one price with the contract prolonged, and another if it is not prolonged."

First Majestic (FR.to) goes shopping in the bargain basement

I remember this Silvermex (SLX.to) getting pumped to over a Loonie in late 2010 and plenty of mouthbreathers getting on then (to da moon alice, etc). I also remember Sprott getting loads in a 62c placement, so he's walking away even on this, it seems. It's not one I've ever owned but overall it looks like a bite-sized chunk of fun at a cheap price for FR.to that'll give it a bit more production ooomph without much of a dent to the balance sheet. Big fish eat the little fish, way it's always been.



Here's the NR, here's how it starts:

VANCOUVER, BRITISH COLUMBIA--(Marketwire -04/03/12)- First Majestic Silver Corp. ("First Majestic") (TSX: FR.TO - News)(NYSE: AG - News)(Frankfurt: FMV.F - News) and Silvermex Resources Inc. (TSX: SLX.TO - News)(OTC.BB: GGCRF.PK - News)(Frankfurt: GSBN.F - News) ("Silvermex") are pleased to announce that they have entered into a definitive agreement (the "Arrangement Agreement") pursuant to which First Majestic has agreed to acquire all of the issued and outstanding common shares of Silvermex for a consideration of 0.0355 common shares of First Majestic (the "Exchange Ratio") and C$0.0001 in cash per common share of Silvermex. The offer values Silvemex at approximately C$0.60 per share, representing a premium of approximately 33% to the closing price of Silvermex as at April 2, 2012 and approximately 43% to the 30 day volume weighted average price ("VWAP"). The transaction will be yada yada continues here

In a better world, Ollanta Humala would grow some balls and tell Ira Rennert to go fuck himself

So Doe Run Peru, owners of the La Oroya polymetallic smelter that's been shut down for ages now because the company wouldn't comply with its environmental clean-up obligations, is now slapping extra demands on the Peru government in exchange for starting up the smelter again. Up until a few days ago the plan was to re-start on May 1st, but yesterday we hear that Renco, owned by US billionaire Ira Rennert and the controlling company of Doe Run Peru, says that June is the re-start date if, and only if, Peru's government assumes responsibility for any lawsuits regarding health or safety or enviro at Doe Run La Oroya. Oh, and they don't have to spend the cash to make the smelter cleaner or less polluting either (the very reason it was closed down in the first place).

It's the type of asshole capitalism that makes you want to vomit and if President Ollanta Humala had the sufficient gumption, he'd expropriate La Oroya tomorrow morning, say "See Yaz In Court" to the scumbag Rennert, nationalize the plant, spend the necessary cash on a new filtering system for that black smoker lead poisoner of a chimney and get the thing back in operation. Seriously, what is it about Peru's collective psyche that allows it to be walked over by the worst type of scumbag capitalists such as Rennert? Grow some balls one time, will you? Doe Run Peru has failed to meet its contractual obligations regarding the smelter on numerous occasions and is now trying to get the country's government to beg and plead before re-opening the plant. C'mon Peru, screw 'em. Fuck 'em. Tie em up in litigation for a decade and in the meantime, take over the plant, Ollanta. Show some pride for once and forget about all the kowtowing to the almighty dollar for once.

A Flash update...

..went out to subscribers just before the bell on this fine and sunny Tuesday morning.

Chart of the day is...

...copper, dailies:

The case for buying junior copper names at the moment is pretty good
1) If copper breaks above the current range, they're a buy.
2) If copper breaks below the current range, they're a sell.
3) If copper stays in the current range, they're a buy.

Two out of three ain't bad.

4/2/12

Excellent news from Colombia

The FARC's track record of reneging on hostage handover deals is well-known, so your humble scribe (along with many others) had doubts about whether the deal to release 10 long-held hostages (as long-term as 14 years in captivity, imagine that while sipping your cocoa tonight) would go ahead or not.

Well the good news is that the recovery team, led by The Red Cross and featuring Brazilian helicopter crews, has just radioed in to say that they have picked up all 10 now ex-hostages and are on their way back to base. And by the way, Gabriel Elizondo of Al Jazz has been doing sterling twitter work on this story today, follow him here for up to the minute reports.

Lake Shore Gold (LSG.to) (LSG) does not shy away from bad news

This is how bad news should be disseminated: immediately.

TORONTO, ONTARIO--(Marketwire -04/02/12)- Lake Shore Gold Corp. (TSX: LSG.TO - News)(AMEX: LSG - News) We regretfully announce that an unfortunate incident occurred today at our Timmins West Mine resulting in a fatal injury to one of our employees. The individual was part of a crew working in a development heading underground at the mine. Full details of the incident are not known at this time.
The immediate family has been notified however the name of the individual is being withheld pending completion of the notification process.
Tony Makuch, President & CEO, stated, "This is a tragic event and loss. We offer our sincere condolences to the family, friends and fellow workers of the employee. We are concentrating our efforts on supporting the family and our employees at the mine site and on investigating the incident to understand exactly what occurred. Our focus has always been and will remain on the health and safety of our people."
The scene has been secured, and the accident is under investigation by the Ministry of Labour, the Ontario Provincial Police and Lake Shore Gold Management and Health and Safety Committee.

Peru's stock market inches from an all-time high (EDIT: Breaks new all-time high)

Here's the chart of the IGBVL "General" index over at the Bolsa de Valores de Lima...

...an index stuffed to the gills with Emerging Market and Mining crunchy goodness. And with the index printing  23,800 at the time of posting today, we're less than 1% away from an all-time high in this market (the IGBVL has got very close to, but has never broken, 24k).

So tell me again all about the English dumbass press and their confident predictions on how a Humala government would be bad for business in Peru?

UPDATE: Looks like the BVL has decided to do this all in a hurry, too. Just 90 minutes after posting that the IGBVL was at 23,800, it touches 23,900 (and it's now at 23,884). At this rate we might get the ATH tomorrow morning.

UPDATE 2: Screw tomorrow, the IGBVL has just printed 24,019 and a new ATH today.And now just a few minutes later 24,100 and counting...full melt-up.

Regarding the trustworthiness of PEAs (scoping studies)

Reader 'M' (an experienced mining professional, by which we refer to the fact that he really, really knows what it means to try and extract metal out of rock for a living rather than him being a financial hanger-on parasite like your author) points IKN's nose towards a most interesting article that was written by Douglas Bryce and Jeremy Fraiberg, partners at Osler, Hoskin & Harcourt LLP, first published in an Osler Update on March 27th and then reproduced at this link by Mining Markets on March 28th.

The article concerns the validity and levels of trust we can or should place in Preliminary Economic Assessments, or PEAs, those documents that used to be called 'scoping studies' by the industry until recently. Bryce and Fraiberg refer to three recent cases when bought deal financings for Extorre Gold (XG.to), Rio Novo Gold (RN.to) and Karnalyte Resources (KRN.to) had to be scrapped because the Canadian regulatory authorities (in turn the BCSC, the OSC and the ASC) threw out the findings of a PEA and wouldn't let the deals go through on the backs of the reports, with the basic argument that they were trying to make themselves out to be "PFS type" reports when they in fact weren't. The article should be read in full, but here's the opening paragraph to what your appetite:
"The failure and termination of several recent Canadian prospectus financings has highlighted the particular disclosure challenges that companies face in the mining sector, and in particular some recent confusion around the rules applicable to preliminary economic assessments (PEAs). It also suggests that regulators have recently been scrutinizing the technical disclosure of mining issuers with particular attention, raising the execution risk associated with public financings and other transactions in the sector." Continues here

As for reader M, his comments on sending over the link were also interesting and amongst them, this:

"From a macro industry point of view, I'm finding it very difficult to believe or rely on many of the PEA-type reports now coming out. You can shop around and find one that will produce something that fits your needs."

Unfortunately I cannot reveal M's real ID, but I can say that when such comments are heard from the caliber of mining brain and reputation that M enjoys I take them very seriously indeed. And with that annoying little teaser your author again exhorts IKN readership to DYODD, dude.

Chart of the day is...

...oil, Brent, monthlies:

Like old man river.

4/1/12

Like Ottotrans™ only better

IWNATTOS in fine fettle and frisky form formenting fun freeforall. Here's an extract (with the punctuation slightly improved):
"Over the last year or two, investors who love gold... have been quite disappointed in the general gold sector's performance in terms of execution, be it capital blowouts, or a range of operating issues," Chief Executive Greg Hawkins of African Barrick Gold (ABGL.L) told the summit in London, "except for B2, Argonaut, Rio Alto, and all the other juniors whose share prices have steadily gone up over the past year because the companies aren't run by fucking idiot morons."

You want more? Of course you want more so read it all here.

The IKN Weekly, out now


IKN152 has just been sent to subscribers. It has words, charts and tables and is guaranteed to break the ice at parties.

Breaking: Hugo Chávez rushed to hospital

This is a breaking story, we'll keep you informed as news develops (link here).



UPDATE: It's now 12 midday at IKN Nerve Centre™ so fun is now officially over on this, the first day of the month of April. We can inform readers that according to back stats just 32 of you decided to click through on that link above, which isn't so many and we therefore commend the majority. Until this time next year folks, and I'll leave you with the best report of the day that I've seen anyway, in this morning's Guardian about how Shaun Ryder (ex-Happy Mondays) is to become an advisor to British PM David Cameron.. 

Google Maps 8-Bit Version for NES

This is just wonderful