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5/19/12

Five days of metals and miners: May 19th

Juniors and coppers took it hard. Gold, silver and PM biggies didn't.

I don't know if we saw a bottom last week, but if we did this chart looks right. Perhaps the best plan is to wait out, because you really don't have to grab the first 10% of any junior rally, there'll be plenty of profit available for those who look for a bit of confirmation first.

5/18/12

Another dead reporter in Mexico

Just a few minutes ago, it was announced that Marco Antonio Ávilahas, crime reporter for the Sonora newspaper 'El Regional', was found dead. 

He is the sixth reporter murdered just in the last month and the seventh in all of 2012.

The Friday OT: Nina Simone; My baby just cares for me

There was a plan as from about yesterday midday to run a Donna Summer song today, but as things are it'll have to wait until next week. Instead, the song I cued up for the slot earlier this week, after inspiration from Amber (a fine twitterpal who's a good person to follow).


This claymation dates from somewhere in the 80s and was the video that backed up the re-release hit of this 1958 classic. Great song, beautiful voice, fun vid.

Baja Mining (BAJ.to) is now the single most interesting mining stock out there

Thoughts on a potential trade in IKN159, out Sunday. Don't expect too much numbercrunching though, this is a conceptual roadmap and there's no need to jump in now, either.

PS: IKN159 will also be a F****ook-free zone.

Lumina Copper (LCC.v): Like 'em volatile?

Look no further.

BDR Resources Corp, a junior to avoid like the veritable plague

Scumball scamrunner Rahim Jivraj's latest venture is BDR Resources, which is looking to rip you off as from later this year when it floats on the TSXV. Here below is the mailer this thief and liar is now sending to his "friends" (note to Rahim; beleive me, there are plenty who are much less friendly with you than you'd imagine).

Hello Friends,

I'm excited to re-enter capital markets and mining, after a one-year hiatus, by optioning two past-producing, silver mines near Kingman, Arizona for a private company I started last year called, "BDR Resources Corp." (www.bdrresources.com <http://www.bdrresources.com/> )

The Silverado & Hibernia Silver Mines Project is 2,882 acres (1,116 hectares) and is the home of two high-grade, underground silver mines. Silverado & Hibernia produced until 1929 and into the 1960's, respectively. It has no modern, systematic exploration done to date.  I visited the mines two weeks ago and was impressed with what I saw and learned.

A 2008 NI 43-101 technical report highlights:

* The Hibernia Project constitues a property of merit due to the excellent potential for the delineation of a bonanza type epithermal silver-gold deposit based on the persistent structure, significant silver-gold values, limited previous work and recessive nature of the host rock.
* Reports from the late 1800's indicate that ore assaying 100 to several hundred ounces per ton silver was shipped from the Hibernia Mine.  Sulphide ore is reported at 60 feet in the Silverado shaft that assayed 470 oz/ton (13,324 g/t) Ag.
* Recent results from the property include a 206.3 oz/ton (5,848 g/t) Ag with 0.28 (7.94 g/t) Au obtained in 1986 and maximum values of 45.5 oz/t (1,290 g/t) Ag and 0.45 oz/t (12.8 g/t) Au in 2007 from a shaft 400m northwest of the Hibernia decline.  The gold values suggest a donation to the north with increasing gold:silver ratios

The vendor of the property, a Professional Geologist, Mining Engineer Technologist and "Qualified Person", has over 30 years experience in the minerals industry including 18 years of senior officer experience with public mining companies and more than 25 years experience in gold and silver exploration, development and production in North America.  His last two personal property transactions have had multi-million ounce Silver & Gold discoveries. - One of those discoveries is near the Hibernia & Silverado Silver Mine Project.

We began our 'Phase One' exploration program on April 16 after signing an option agreement to earn a 100% interest in the Project on April 11, 2012 (5 year option with escalating payments totalling $500,000 cash; 1,200,000 shares; $1,100,000 in exploration expenditures; 2% NSR with a 1% buyback for $1,000,000).

The program consists of mapping, a 280 geochemical soil sample program, and ground-geophysical Magnetic and VLF-EM (very low frequency electro-magnetic) surveys.  The program is nearly complete and will be in results, review and reporting stage shortly.

The Silverado Mine is accessible by taking highway 93 towards Kingman from Phoenix (235km away) and then a dirt road for 9 miles.  From the Silverado Mine, it's nearly a 45 minute relatively easy trail to the Hibernia Mine.  I plan on visiting again in early June with the Qualified Person who will write the updated 43-101, you are welcome to join!

I also brought back some ore from the Hibernia mine dump, which may assay similar to the 43-101 samples of 40 oz/t Ag.  The work we are doing now on the property should begin to indicate some of the geological structures and help plan a 2nd phase exploration program.

The intent of the work program is to further qualify it as a property of merit and commission an updated NI 43-101 technical report for the purpose of listing BDR's shares and an Initial Public Offering on the Toronto Stock Venture Exchange by the fall of 2012.

I have attached BDR's Fact Sheet for your review, which is available alongside the 43-101 on our website at http://www.bdrresources.com <http://www.bdrresources.com/> .

I look forward to reconnecting with all of you as BDR builds from 'the ground up' in hopes of making a silver discovery.

If you have any questions, comments, referrals or want to learn more about our finances and plans for future acquisitions / growth in the meantime, I'm available at your convenience to listen, answer and share more of this story.

Best, RJ

--
Rahim Jivraj

Ph: +1.604.XXXXXX
Skype: rjivraj

rahim.jivraj (at) springandmercer.com


It's time to play "This Thing Isn't Like That Thing", Velardeña edition

For years, your author had to suffer the idiocies of paid pumper delinquents such as Mexico Mike Kachanovsky, or the utter knownothings at GATA, who'd drone on and on and on about how ECU Silver at its Velardeña property had "over 300m ounces of silver!" (they'd use exclamations a lot) and how it was so cheap and how this and how that. Here's an example of the type of bullshit the company used to hoodwink teh stooopids:

ECU Silver significantly increases resource estimate at Velardena, Mexico

10th Dec 2008, 12:00 am ECU Silver Mining Inc said the fourth NI 43-101 compliant mineral resource estimate on its Velardena district properties in Mexico’s Durango State has significantly raised the resource forecast there.

The results confirm a 6 percent increase in measured and indicated resources to 40 million ounces of silver equivalent and an Inferred resource increase of 118 percent to 391 million oz of silver equivalent.


Chairman and chief executive Michel Roy said: "Our objective in our recent exploration campaign was to convert some of our mineral potential into the inferred category. This was successfully done and we now have an inferred mineral inventory of 391 million oz and measured and indicated of 40 million oz of silver equivalent establishing Velardena among the larger silver and gold projects in Mexico. This increase in our mineral resources is the largest in the history of the company.”

Today we hear from Golden Minerals (AUMN) (AUM.to), the chumps that bought out ECU Silver, about Velardena. Here's the NR, here's the moneyline:

The CAM measured, indicated and inferred resource estimate, which does not include the San Diego property, is shown in the following table:

----------------------------------------------------------------------------
Classification  Tonnes    Gold    Silver     Gold     Silver      Silver
                  (M)     (g/t)    (g/t)    Ounces    Ounces    Equivalent
                                             (M)       (M)      Ounces (M)
----------------------------------------------------------------------------
Measured &        2.3     3.46      195      0.3       14.6        27.6
Indicated
----------------------------------------------------------------------------
Inferred          3.1     3.33      159      0.3       15.8        32.3
----------------------------------------------------------------------------

IKN back with the moral of the story: Do not listen to people paid by junior mining companies to pump junior mining companies.

Rob McEwen's warning on Argentina

NR here, excerpt here:

"Mr. McEwen provided an overview of recent decrees announced by the government of Argentina and the possible adverse impact also on the mining industry. In particular, Mr. McEwen informed shareholders that the uncertainty related to the repatriation of funds from the San Jose mine could impair the company's ability to internally finance its projects. If these uncertainties persist, the company will need to seek external financing alternatives for the development of El Gallo Phase 2."

Chart of the day is...

...dedicated to the newbies in the house.


Bless you all. And now that you're blessed, please...

5/17/12

Donna Summer

It's a very sad day.



No more posts today.

The clue is in the photo

Can you smell a bottom, too?

The U.S. Dollar index

The whole ballgame, right here:

I'd guess that around 82 is where gold starts trading in positive correlation with the dollar. But even if it's not that exact number, the dollar-up-gold-down trade will stop soon.

Chart of the day is...

...the amount of copper produced by Chile, per month, and split down into three categories:

1) Codelco production
2) La Escondida production
3) All other


Just so you know. Source is that wonderful, lose-me-there-all-day wonkfest of a website run by Chile's official copper beancounters, Cochilco

5/16/12

Gold (GLD) vs S&P500 index (SPX), 12 month chart

Which your humble scribe thought interesting on dialling it up a few minutes ago.

Death of gold...yeah yeah, if you say so, death of gold...

Mo' Canaco (CAN.v) (and it's a must read for metalheads)

Reader 'ST' alerts your humble scribe to a brilliant (that's not overhype) post on Canaco (CAN.v) dated Feb 2012 that absolutely nailed the company and is a mile better than most professional analysis or opinions on the company. Go see for yourself and then put this blog on your RSS. I thank ST for the headsup, as I never knew this site existed beforehand.

Mining PRs and the Ottotrans™, Part 58


Our occasional series turns its gaze upon Extorre (XG) (XG.to) and its NR from this morning. It was a long one, with drill numbers and suchlike further down, so we'll zoom in on the bullet points XG offered at the start of the fun for the sake of brevity and focus.


This is what they said:

VANCOUVER, BRITISH COLUMBIA--(Marketwire -05/16/12)- Extorre Gold Mines Limited (XG.TO)(XG)(E1R.F) ("Extorre" or the "Company") releases high grade drilling results from Cerro Moro and comments on current market conditions as follows:

--  Extorre is of the view that the current market for the Company's shares
    does not reflect the underlying value of its high quality asset at Cerro
    Moro.

--  Extorre is evaluating the potential for a staged mine development to
    take advantage of the substantial cash flows which would be generated
    from the very high grade mineralization accessible by open pit mining.     
The Company would then fund the balance of the capital expenditure
    reported in PEA-3 through operating cash flow.

--  This initiative is advancing rapidly as the Company is particularly
    sensitive to shareholder dilution. The financing alternatives being
    pursued will be those that are the least dilutive to shareholders.

--  A public announcement on the parameters for the proposed staged
    development initiative is expected before month end.

Continues here

And this is what it means

VANCOUVER, BRITISH COLUMBIA--(Marketwire -05/16/12)- Extorre Gold Mines Limited (XG.TO)(XG)(E1R.F) ("Extorre" or the "Company") releases high grade drilling results from Cerro Moro and comments on current market conditions as follows:


--  Look, it's just not jolly well fair, ok? Stop selling our shares, will you?

--  Right then. If you're going to be bastards about this and not buy us out,  
we'll build the blinking mine ourselves. Hah!

--  After all, we have $30m in cash. Can't cost that much to build a mine, right?

--  And the fact that we already burn our treasury at $10m/qtr is beside the point, ok?

Opinions on Canaco (CAN.v)

Yes I know Moriarty pumped on Canaco (CAN.v) quite literally the day before it dropped, but aside from the timing you kind of expect Tio Bob to come out with these things (and then forget them in his anecdotes about trades wot i have traded a few months or years down the line).

Nah, the one I really love is this from that James West, aka James "crystal ball" West, aka James "geology doesn't matter" West. He said this about Canaco (CAN.v) on October 24th:

"The only problem with that property is that you can’t drill it fast enough. The results continue to be outstanding from the project, there are no problems with it, it’s purely a function of general market conditions"

Adorable. And remember folks, this is the same James West that told you to buy Southwestern after the Boka scandal hit. PT Barnum is alive and well and living in Fabulous Lima.

Meanwhile, those you want a real opinion about a property's geological make-up are best advised to ask someone who knows about geology, not some fake-ass charlatan bullshitter snake-oil salesman such as West. An example of a real opinion, you ask? Yeah sure: Brent Cook bought the stock in late-ish 2011, then had the chance to go visit the property in early 2012. On returning he sold his shares and told his subscribers all about why, on March 4th. It's why the stock dropped 20c on 3.6m volume that day....but in hindsight even the worst price that day ($1.21) was a smart get-out (while the Wests of this world were still telling you how stupid the selling was, no doubt).

Watching James West on BNN is free
Reading Brent Cook's letter costs $150 a month (i think that's the price)
Both are worth exactly the price you pay

So you see "underlying value" now? Yeah me too, but...

Several mails in the last 24 hours have contained the questions along the line of "Do you see underlying value in the mining company XXX?". The answer in each case was yes, because the plain fact is there's underlying value freakin' everywhere now. If you're acojonado enough to jump in, first make sure you have there on your side (in this order, too)...
  • A proven management team; not by their own puffed-up opinions of themselves, but a real history of success in the mining
  • A good address; you want to be in a country or a region with a good attitude towards both foreign investment and mining investment. As regards LatAm for example, most of Mexico, most of Peru, nearly all of Chile, most of Brazil and about half of Colombia fit nicely. However Ecuador, Bolivia, Argentina do not. And of course there are more good and bad names both inside and outside of LatAm to consider.
  • A decent prospect. Be picky insist on top quality projects, not any old thing.
  • A strong balance sheet. Does your target company have a decent wedge of cash? Have heavy debt? Have a low/high burn rate? If a producer, is it free cash flow positive? Know the answers to these basic questions

...because if not, your chosen vehicle may stay weaker, longer. But even with stocks that comply with all those, you're still spoiled for choice.

However the single most important thing to know is that "underlying value" is a whole heap of BS at times like these, fundies analysis is no help when it comes to market sentiment and the rug can be pulled from right under the relatively small and unimportant junior mining sector by one decision or press conference from some politico in New York London Paris Munich* Beijing Athens or wherever else and the market can quickly send all these share prices, even the best of the cream companies, a lot lower still. Yup, buying some quality stocks now and holding 12 months is a decent and valid alternative if you have the stomach, but be in no doubt that if you're a buyer today you're a gambler. That's neither good nor bad, it just is.

*everybody talk about pop music

Chart of the day is...

...the Gold/Silver Ratio (GSR), 12 months:


Look on the bright side, it means GORO's AqEq  AuEq (typo) bullshit is going to look good.

5/15/12

No escape

Not even Rio Alto Mining (RIO.to) escapes from the late afternoon carnage today (while your humble scribe was busy building a flat-pack desk for daughter, as it happens).

Babies and bathwater, anyone?

Jaguar Mining (JAG) (JAG.to): One of the good things about Twitter is...

...that it gives you an exact time and date stamp for your tweets, such as this one on Wednesday May 9th at 11:53am that commented on the bullshit dead cat bounce then happening in Jaguar Mining (JAG) (JAG.to):

"As day follows night, $JAG will revisit yesterday's lows. Boys will be boys..."

Here's the five day chart that captures the fun since then. All that's left for this one now is The Long Dark Teatime Of The Soul, so today marks the (likely) end of IKN coverage in this stock. No point in gloating.


Hey, maybe you should get into using Twitter too? I'm into it more and more these days, very useful source.

This one for the gold mining sector optimists in the house (all four of you)

Scotia had an interesting chart and blurb in its morning mailer today. Here it is:

Senior Golds are Inching Towards Lowly P/NAV Lows of 2008?  Tanya Jakusconek this morning highlighting that our North American gold group is currently trading at 0.90x - the 2008 low was 0.79x.  This morning Scotia Mocatta's Simon Weeks notes that physical demand for Gold has returned, largely from India where they have been noticeable by their absence of late.  Gold has closed lower in 7 of the last 9 sessions and given the two way interest that lies in this $1550 - $1560 corridor as well as the return of some reasonable physical demand it’s probably time to take a breather on the downside especially given some signs of euro strength this morning following German GDP numbers were 5x higher than consensus (not looking like a recession).    

South American Silver (SAC.to) ten day price chart

Don't ask me pal....not a clue.


Why do you ask, anyway?

Gran Colombia (GCM.to) explains why its Marmato pre-feas is indefinitely delayed

Here's the paragraph from the Gran Colombia Gold (GCM.to) 1q12 MD&A, filed yesterday (and available for your viewing pleasure on SEDAR right now):
In 2011, Gran Colombia commenced work on a prefeasibility study of the Marmato Project to examine a number of feasible development options for mining, processing and mine waste management to provide the foundation for decision making for the optimum development of the project. The options include stand-alone open pit mining, modern underground mining and a phased combination of both open pit and underground mining. As a result of this newly discovered deep zone mineralization that is open at depth with increasing grades, the Company has decided that the current plan to complete the prefeasibility study in the second quarter of 2012 will be delayed as the ongoing deep drilling continues. Gran Colombia will further explore the significance of this high grade deep zone mineralization and its impact on the current work undertaken in the prefeasibility study before determining the Company’s options for the development of the Marmato Project.

You see, it's not the historically pisspoor relationship between the company and the locals who refuse to give in to GCM's relocation plans, it's the new deep mineralization they've found! Well, that makes all the difference, doesn't it? We also note that GCM doesn't dare give a new estimated delivery date for the Pre-Feas. And while you're over there, on a separate matter check that bit about how the $100m facility from Standard, a deal due done end January, is still not closed yet.

Chart of the day is...

...the evolution of the trade balance between The USA and Peru, 2002 to 2011, annual numbers:

A negative number means that Peru exports more to the USA in dollar terms than its imports. Therefore a positive number (as in the recent years) means that The USA exports more to Peru than it imports. Hey, I bet you remember how Peru sold the Free Trade Agreement (FTA) to its people by telling them they've benefit massively from the brand new market opening up, don't you? You don't? Oh never mind...

So if you don't understand yet just why The USA is so darned keen on promoting FTAs with the rest of the world (the previously pacted on with Colombia kicks into operation any day now), that chart gives you plenty of clues.

Post inspired by this marvellous article over at Gregorio Samsa by main man Jurgen Schuldt, which has details and commentary from a real economist, i.e. him.

5/14/12

Footy OT: You can take the Apache out of the Villa...

...but you can't take the Villa out of the Apache*:



*some knowledge of Buenos Aires required

The Mexico Presidentials after Debate One: Vázquez drops, AMLO climbs, but Peña Nieto affirms his position as favourite

Mex pollster Buendía y Lareto today (May 14th) published a survey that shows the effect of the first televised debate between the four candidates for President in the July 1st vote. We see the effect of the May 6th debate in pre/post debate surveys taken by the same polling company (margin of error +/-3.5%)

The takeaways:
  • As many people surmised at the time, Josefina Vázquez Mota (PAN) had a weak debate and that shows in the drop in her voter intention.
  • AMLO (PRD) had a good debate (it's one of his strong points) and as a result is marked in second place now.
  • Meanwhile, Garbiel Quadri of the minor PANAL party showed well and basically doubled his voter intention numbers. But at 2% overall, he's always going to be a bit player in this year's election.
  • The main winner according to this poll was Enrique Peña Nieto, who saw his voter intention rise from an already strong favourite's position.

In effect, this race is down to whether AMLO can close the gap in the next two or three weeks. If not, EPN will begin to look like the veritable shoo-in. Here's the same data in table form
 
Mexico Presidentials: Voter Preferences pre-and post-May 6th Debate
candidate pre-debate post-debate difference
Peña Nieto (PRI) 39.20% 41.90% 2.70%
AMLO (PRD) 17.50% 20.90% 3.40%
Vázquez Mota (PAN) 22.10% 19.40% -2.70%
Quadri (PANAL) 1.10% 2.10% 1.00%
no answer 20.20% 15.70% -4.50%
published May 14th by pollster Buendía y Laredo 
post-debate survey taken May 7 to May 10

Data from here

Seabridge (SA) (SEA.to) and Queen

  • The NR: Here
  • The risk: $5.3bn
  • The reward: Base case 11.5% IRR
  • The conclusion: We'll leave it to Freddie



dyodd

Baja Mining (BAJ.to): You heard it here first

Today, this:

VANCOUVER, BRITISH COLUMBIA--(Marketwire -05/14/12)- Baja Mining Corp. (BAJ.TO)(BAJFF.PK) today announced the resignation of John Greenslade as a director of Baja. Mr. Greenslade has also resigned from his positions as Baja's CEO and President.
Baja's Board has commenced the search for a new CEO. Continues here.

Whereas 12 days ago, on May 2nd to be precise, IKN already had the info wrapped up:
Baja (BAJ.to): The dope from South Korea in just two words


"Goodbye Greenslade"


It might take up to a couple of weeks to wash through, but the fat lady is singing. You heard it here first, folks.


We even got the timing about right. Your author tips his hat to confidantes (once again)

Chart of the day is...

...this:


You might be more worried about gold or oil or copper, though. That's fine, it's your life. Just keep breathing.

Update: For those versed in the language, this El Pais report is worthy of your time (though it went to press before the latest murder over the weekend). It starts like this:
In the whole of World War 2 68 journalists were killed, in the Balkans war 36, while in the last decade in Mexico, a country officially in peace, more than 70 in the last decade. The list close, for the time being, with the four killed in Veracruz less than two weeks ago. continues here

5/13/12

Word of the day is...

(Greek Exit)

The IKN Weekly, out now

make some noise

IKN158 has just been sent to subscribers. It's right up there at the normal standard for the Weeklies, for which I once again sincerely apologize.

Joey Barton wins 2011/2012 Fair Play award

Oh, the refined and gentlemanly pastime that is Association Football:



Also congrats to Man City for the win, in the most amazing style too. But this is the play of the year for me.