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

6/30/12

Five days of metals and miners: June 30th

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 even the junior almost, almost made it to a positive result on the week thanks to that impressive Friday rally.  The Thursday selling of juniors was also likely the most significant move of any of those lines all week, as it sure looked like a lot of people throwing in the towel on the sector.

6/29/12

The Friday OT: Mr Creosote (Monty Python's Meaning of Life)

Meaning of Life is the imperfect Python movie, a curate's egg of semi-related sketches that allow the theme to run through to the end but make it, in the end, the film that is always relegated behind Holy Grail/Life of Brian (which one is best? fight it out between yourselves). But it still has some true Python gem moments, capped off by this scene.


It has everything, from real shock value (this film was first shown in 1983, rare are the scenes that can truly shock nearly 30 years later) to full on funny and the wonderfully silly wwwafeeeh theeeen meeeeent at the end. Led in, as it must be, by The Penis Song.

Jaguar Mining (JAG) (JAG.to): Handbags at dawn

Wonder-fun developments at Jaguar Mining (JAG) (JAG.to) this evening. Here's the link to the NR, here's the content that matters:

BELO HORIZONTE, Brazil, June 28, 2012 /CNW/ - Jaguar Mining Inc.  (TSX: JAG) (NYSE: JAG) today announced that Daniel Titcomb, the Company's former President and Chief Executive Officer, has filed a lawsuit against the Company and three of its directors in connection with the termination of his employment as the President and Chief Executive Officer of the Company.  Mr. Titcomb was terminated on December 6, 2011.
Among other things, Mr. Titcomb is alleging that his termination occurred as a result of a change of control and is therefore entitled to three years of compensation plus three years of bonus.  He is also claiming an unspecified amount of damages under applicable New Hampshire employment laws.  Jaguar and its directors believe the claim to be without merit, will vigorously defend this lawsuit and will take any steps necessary to protect Jaguar's interests.  Jaguar also intends to proceed with a counterclaim against Mr. Titcomb for, among other things, breaches of his fiduciary duties to the Company prior to his termination.

IKN back and rubbing its pathetic, grubby little hands with veritable glee. Why so? Because it's at rare moments like this that we retail players, so used to putting or trust into the black box directorships of junior miners and ending up anally violated for the privilege, get a glimpse of what goes on behind the scenes of these dirtbox companies. Sooo....bring it on Dan Titcomb and friends! No out of court settlements please and wash all that dirty linen in public. You know it makes sense.

dyodd

6/28/12

"My best moment was when I kissed my mother after the match"

IKN loves Mario Balotelli forever. Official.


Quote and photo, easily the most beautiful image of the Championships, from here

Tahoe Resources (THO.to) and Guatemala

We know that Tahoe Resources (THO.to) has great rocks, we've known that for ages, but your author has kept away from the stock all this time because of its address. And now the wheels come off the THO.to stock price due to that political risk which was, sadly, totally expected by your author and completely ignored by the dumbasses in suits that pump stocks to you up North Here's an extract from IKN143, dated January 29th 2012:

Recent optimism as to the state of play in Guatemala under the new Pérez administration may continue (or may not, watch those prices in FV.v, RDU.v, THO.to and others and find out) but unless progress is made on the mining law reform, the rally is bound to peter out. Your author continues to avoid exposure to Guatemala for his personal cash though does recognize, as we did in IKN133, that the risk-takers amongst the audience may feel it’s a place worth a dabble. A small bit of fun money risked on Guatemala isn’t such a bad thing, but the thought of major cash exposure to the country, such as that of anyone in Tahoe (THO.to) that’s betting on a smooth and direct run from here to production, still breaks brows out in a cold sweat in this office.

And here's a bit from the IKN133 report referenced, back further in November 2011:

The bottom line here that my personal call isn’t going to change and i still say “avoid Guatemala”. However, high risk money may feel like a flutter on Guatemala risk and potentially playing a new-found pro-mine feeling on the Perez Molina election. Who needs reality when you have perception, anyway? Of the three Guatemala vehicles mentioned here, RDU.v appeals the most and those into flippy type of trades (and as long as you go in with eyes wide open knowing that risk here is high) may want to consider it, tax loss selling season or not. FV.v is also a possible (see Zinc Basket) but is so tiny on a market cap level it brings its own risks. THO.to, for it sheer size compared to the others, scares me far more even though it’s got wonderful rocks and world-class mining potential.

Here's a YTD chart for THO.to including the fun today as the market reacts to the new Guatemala government's cunning plans for the sector. And to think The Can of Corn actually called them "a positive"...utter dumbasses of the highest water.


Errr.....Toldyaso.

UPDATE: THO halted its stock on the waterfall and then told the world that it wasn't affected by the new law proposal. Here's how the NR starts:
VANCOUVER, BRITISH COLUMBIA--(Marketwire -06/28/12)- Tahoe Resources Inc. (THO.TO)(TAHO) today reported that government-proposed mining law reforms in Guatemala should not affect its Escobal project.

Oh of course you're not affected guys. Of course not. In other news, Otto Perez has a bridge for sale, but be quick before John Doody and his subbers make a collective bid for the thing.

On the road


Your humble scribe is doing things in other places for a couple of days, so posting will be light through Sunday evening but don't worry, Jack will keep you company:

"But I remember seeing a mess of leaves suddenly go skittering in the wind and into the creek, then floating rapidly down the creek toward the sea, making me feel a nameless horror even then of "Oh my God, we're all being swept away to sea no matter what we know or say or do" -- And a bird who was on a crooked branch is suddenly gone without my even hearing him."

Good news/bad news from McEwen Mining's (MUX) Los Azules copper project

The good: It just got bigger

The bad: It's still in Argentina

NR here

Chile's copper isn't making the grade

An interesting report from the Chile Mining council, who explain that average grades of copper mineral mined in Chile have dropped from 1.61% Cu in 1992 to 0.87% Cu today. What's more, the forecast is for an average of 0.67% in 20 years' time. Chart please!


Or put in a manner that applies to you and not just Chile, the days of $2/lb Cu are over. Forever. Get used to the idea.

Chart of the day is...

...the gold/oil ratio (GOR) 2012 year to date:


We had the GORfest on a few days ago when it went thru 20X and although TA sucks, this ratio has clearly rolled over and is about to plummet. Scout's honour. So, just up to you to decide whether crude's going back up or gold's about to drop off its own little cliff.

6/27/12

Footy post-match interview fail

Post-match chats between football players and TV interviewers aren't known for their intellectual depth and insight but normally the player's the source of the cringes. Tonight however, it was Sara Carbonero, one of the top Spanish TV footy reporters (and also famous for being Iker Casillas's partner) who inserted foot in mouth as she interviewed Andrés Iniesta of Spain:


Here's a translation of the best bit:
Carbonero: “How did the penalties go? Would you like to have taken one of the penalties today?"
Iniesta: "Yes. In fact I took the second one".

Big low grade gold plays

Here's a chart that covers the Year-to-Date progress of the gold ETF (GLD) and then five companies that are developing big, low grade gold (or gold/copper) in the Americas from International Tower Hill (THM) (ITH.to) and NadaGold (NG) (NG.to) in the cold North, through Sunward (SWD.to) in Colombia and down to Exeter (XRA) (XRC.to) and Andina (ADM.v) in the Maricunga of Chile:


And put simply, they've had the crap beaten out of them compared to their main target metal, with an average loss of about 40% already so far this year. So much for "optionality on the metal", eh?


Reserve requirements and interest rate moves

Not for everyone, but still interesting is this paper by César Carrera and Hugo Vega that sets out to demonstrate in economics terms something we on the outside of the sector have understood intuitively for quite some time; that Central Banks use the raising or lowering of bank reserve requirements to control the macroeconomy in much the same way as the more traditional (and headline making) hikes or drops in interest rates. Here's the abstract from the paper:
Abstract
The interbank market helps regulate liquidity in the banking sector. Banks with outstanding resources usually lend to banks that are in need of liquidity. Regulating the interbank market may actually benefi t the policy stance of monetary policy. Introducing an interbank market in a general equilibrium model may allow better identi cation of the final eff ects of non-conventional policy tools such as reserve requirements. We introduce an interbank market in which there are two types of private banks and a central bank that has the ability to issue money into a DSGE model. Then, we use the model to analyse the eff ects of changes to reserve requirements (a macroprudential tool), while the central bank follows a Taylor rule to set the policy interest rate. We end that changes to reserve requirements have similar effects to interest rate hikes and that both monetary policy tools can be used jointly in order to avoid big swings in the policy rate (that could have an undesired eff ect on private expectations) or a zero bound (i.e. liquidity trap scenarios).

Click through for more. It does eventually lapse into squiggly line stuff, but there's plenty of plainspeak all the way through and the conclusion is pure commonsense.

Back to the future

Well folks, it's the present now. Feeling old yet?


My thanks to @OperaNow who also asks the big question:

"So where are the hoverboards?"

UPDATE: When you've been had, you've been had. As Mashable notes, today's not the day and the above is a hoax. Rats, but surely not the last time I get the wool pulled over mine eyes.

The Quaterra (QTA.v) (QMM) resource update

I've had a first-and-second-pass look at the information provided today by Quaterra (QTA.v) (QMM) in this resource update NR linked here. The bottom line takeaway here, after the change in categories (the biggest change there is the move up to indicated from inferred in the San Gregorio part of the resource) is the M+I+I is now 110m oz Ag at a 15g/t cut-off and $26/oz silver (that silver price needed some chasing, by the way). So two things to note here:

1) The August 2010 resource report (to which QTA today compared results) used a 45 g/t cut off for silver and a silver price of $15/oz. Today's count is run on 15g/t silver and a $26/oz silver price, which is a lot more accommodating. Back in the August 2010 report, 85m oz silver was counted at the 15 g/t alternative cut off and I betcha that would grow without much sweat of you raised the silver price from $15 to $26. The upshot here is that it's pretty clear QTA has done a decent job of upgrading a goodly portion of the resource from inferred to indicated (roughly 35m oz by the looks of things) but just on my ciggypack stuff today I doubt whether the deposit size has grown much.

2) I know that QTA has other assets, but still I'd like to understand just how QTA can run a market cap of $73m (with a decent pop on today's news) and Soltoro (SOL.v), a company with a big low-ish grade silver thing as flagship but also with plenty other land and exploration property assets, is valued at a $21m market cap.

That's all. Oh, except for this chart:


Kinda puts the 9c pop to U$0.47 today into perspective, dontchathink? Now don't get me wrong, I have nothing particularly against QTA and in a fairly ok-ish market (i.e. one we don't have right now) it would probably rally much harder and be worth its rally, too. It just seems to me that if you think QMM is cheap then you should be drooling and slobbering all over SOL.v, which is a company I bought, held and sold a few weeks back at a loss (so right now no position in either company mentioned). Ok, that really is all.

FSA, Barclays, LIBOR and a bottle of Bollinger

Best part of the FSA ruling against Barclays today for "trying" to fix LIBOR is on page 19:

"For example, on 26 October 2006, an external trader made a request for a lower three month US dollar LIBOR submission. The external trader stated in an email to Trader G at Barclays “If it comes in unchanged I’m a dead man”. Trader G responded that he would “have a chat”. Barclays’ submission on that day for three month US dollar LIBOR was half a basis point lower than the day before, rather than being unchanged. The external trader thanked Trader G for Barclays’ LIBOR submission later that day: “Dude. I owe you big time! Come over one day after work and I’m opening a bottle of Bollinger”."

Read the whole thing here

Chart of the day is...

...China's copper exports, monthly, to May'12:


The chart comes from this most excellent Andy Home (Reuters top sog on base metals) article today. Full of though-provoking ideas and observations about copper. To whet your appetite, here's how it starts...
LONDON, June 26 (Reuters) - For a market that is supposed to be in chronic shortfall, there has been a lot of copper on the move recently.
Consider, for example, China's May trade flows. Imports of refined metal totalled 302,000 tonnes, well above a consensus that assumed manufacturing slowdown and negative arbitrage would translate into slower arrivals.

....and here's how it finishes:
The LME's daily market positioning reports have just started showing the emergence, or quite possibly the re-emergence, of a dominant position holder in the copper market. As of today's report , showing the state of play at Friday's close, someone had between 40 and 50 percent of all LME copper warrants. Watch carefully now!

read it all

6/26/12

The Guardian, Mexico's election, Enrique Peña Nieto, Televisa

I just knew The Graun had more than its semi-revelation of a few weeks ago and tonight it's running with more on how the PRI candidate for Sunday's election and favourite to win (according to the polls at least), Enrique Peña Nieto, is heavily favoured by Mexico's biggest and most influential news media. Go read the main report here but check the paper's front page for satellite reports too, including the one that says Televisa "...is like Murdoch on steroids". Great stuff and bound to cause a ruckus with the big vote now just five days away.

And for those with Spanish, this is the paydirt link, the copy of the contract.

Colombia's crude oil production: The stall sets in

We've followed this dataset quite closely for a few months and a few posts, mainly because of President Juan Manuel Santos and his constant "We'll be at one million barrels per day next month...no wait, make that the month after...no wait...errr (etc)" bluster that's beginning to have more than a tinge of huevo en cara to it. So when the May 2012 numbers came in this month and showed a production schedule that unexpectedly dropped, the lack of headlines out of the sycophantic Colombian press roared its own silence. Here are the raw monthly numbers that show the inertia setting in over the last year:


And here's the derived dataset that really catches mine eye, the trailing monthly percentage growth.

That's a big drop in growth rhythm so if June comes in at under 939,000bpd, we cross into negative territory for the first time. By the way, the first five months of 2012 add up to an average 5.74% growth from the same period of 2011 (cos I knew you'd ask). All data from here.

Panama debt troubles

A most interesting post over at Bananama Republic today, the finest blog on Panama by several nautical miles, in which we get to hear about the looming death of Panamanian President Martinelli's debt-fuelled unsustainable spending spree. Here, for example, is what UBS has just told its clients (we quote the e-mail alert title) “Panama Losing Fiscal Credibility”. And here, extracted from a longer note (link to the full doc available at the Bananama Republic post) is what Nomura thinks of Panama exposure all of a sudden.

We recommend zero exposure to Panamanian sovereign bonds. While this positioning might be relatively premature, we prefer to recommend it now inexpectation of a sharp rise in fiscal spending for electoral reasons next year. For those that are currently involved in this credit, we think it may be opportune to begin executing an exit strategy.
We recommend replacing Panama with exposure to other high-grade credits in Latin America, such as Peru, Colombia and Mexico. Because of Panama’s expensive valuations, we think investors are likely to benefit more from owning other LatAm high graders with lower downside risks.

You have been warned, ladies and gentlemen. So here's the link to the Bananama Republic post again to make sure you make it that far and here's some advice for those long Panamanian bonds from another bunch of wise people who are always worth heeding:


dyodd

Curis Resources (CUV.to) The legal bullyboys hit another 52 week low

Here's the last month's chart...


...with the filing of its bullyboy SLAPP made May 31st and the report of its existence on June 6th. It's now down 20% since this shebang started and with not much sign of a halt to the drop, so at what point will these bullies admit their own stupidity? Drop the case and try to regain the moral high ground, you HDI litigation idiots

Previous CUV.to bullboy coverage here, then CUV right to reply here and the result here

disclosure: no position of any type in CUV.to.

State Banquet Offered To Commemorate The Visit Of Chinese Premier Wen Jiabao To Chile

We offer the official photo from the bash:


And a swell time was had by all. H/T Setty

Chart of the day is...

...Exeter Resources (XRC.to) (XRA) versus the main gold bullion ETF (GLD), January 1st 2011 to date:


A chart offered today to put Yale Simpson's "it's just not jolly well fair is it?" bag of tripe NR into its correct context. 

The plain bottom line about gold mining is that if a deposit cannot be mined at a profit it doesn't matter whether it's in Chile, China or Congo and it doesn't matter if it is 1m oz or 100m oz gold contained. It's worth nothing. Zero, zip, squat, nada, nothing. As regards XRC, Yale Simpson's opinion is that (and I quote the NR) "...the current depressed share price does not reflect the potential future value of the Caspiche deposit..." and he would say that, wouldn't he? But it's an opinion, not some sort of objective truth so let's throw in another opinion to get a bit of balance. My opinion is that XRC has $61m in cash and a market cap of $155.3m today, which means it's still overvalued by around $94.3m.

UPDATE A/H: The market rewards XRC.to for its NR by dumping the stock to close at a new 52 week low and shaving another $12.3m or so from its market cap. So, eighty and bits to go...

6/25/12

Tough market for junior explorecos?

Yup, tough market for junior explorecos. Here's El Tigre Silver (ELS.v) with its NR today...


VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 25, 2012) - El Tigre Silver Corp. (ELS.V)(EGRTF)(5RT.F) ("El Tigre" or the "Company") is pleased to announce that it has closed the first tranche of its previously announced non-brokered private placement (the "Private Placement") of 400,000 units of the Company ("Units") for aggregate gross proceeds of $100,000. Each Unit consists of common share of the Company and one-half of a common share purchase warrant (each whole warrant, a "Warrant"). Each whole Warrant entitles the holder to acquire an additional common share of the Company for a period of 18 months from the date of issue at a price of $0.40 per share.
In addition, the Company announces that it is continuing with the Private Placement on the same terms and conditions as previously announced in its May 2, 2012 news release, subject to regulatory approval. The Company anticipates closing the second tranche of the Private Placement on or before July 25, 2012.
This Private Placement is subject to continues


And here's how that May 2nd NR it referenced begins:
Vancouver, B.C., May 2, 2012 – El Tigre Silver Corp. (“El Tigre” or the “Company”) (TSXV: ELS) (Frankfurt: 5RT) (OTCQX: EGRTF) is pleased to announce a non-brokered private placement for up to 12,000,000 units of the Company (“Units”) at a price of $0.25 per Unit for aggregate cash proceeds of $3,000,000. Each Unit will be comprised of one common share and one-half of a common share purchase warrant (each whole warrant, a “Warrant”). Each whole Warrant will entitle the holder to acquire an additional common share of the Company for a period of 18 months from the date of issue at a price of $0.40. An 8% cash finders’ fee and warrants equal to 8% of the Units issued may be payable on all or a portion of the offering.


Sooooo, push comes to shove, ELS.v was after $3m and got $400k $100k* after seven weeks of marketing. Yup yup yup, tough market.

disclosure: no position in ELS.v, not now, not ever, not planning on one either.

*oops, ty commenters

I love it when a junior uses the phrase "visible gold" in its NR headline...

...because it means it's another BSser I can ignore forever, which means less work for me in the future and more time to do fun things. Like eating cake. Anyway, here's today's example of VG BS from a some outfit called Comstock Metals (CSL.v):


Comstock Metals Announces Discovery of Visible Gold From the 2012 Trenching Program on the QV Property, White Gold District, Yukon

Comstock Metals Ltd. (the "Company") is pleased to announce the discovery of visible gold and to provide an update on the progress of its 2012 program on the QV property in the White Gold district, Yukon Territory. Approximately 50% of the 2012 trenching program has been completed on the property, consisting of continues here


Paraguayan sharpshooters and Fernando Lugo

The most interesting part of a radio interview given by Fernando Lugo, now ex-President of Paraguay, this morning was when he was asked about the 17 deaths (eight police officers and nine civilians) during the land eviction disturbances that led directly to the Congressional motion for his impeachment and near immediate destitution. Lugo said that post-mortem investigations on the police show the dead were hit accurately in the head and heart, the classic modus operandi of professional sharpshooters. The implication is that the deaths during the land eviction were part of a set-up that was designed, and if so successfully, to bring about a political ruckus and the end of the Lugo presidency. In his words, "There is ample proof there were sharpshooters at the location." Here's the report page with a recording of the Q&A today on Argentina's Radio Continental.

Cardero (CDY) (CDU.to) investigated by the RCMP

Now there's a shocking surprise. This morning Cardero Resources (CDY) (CDU.to), the perennial underperforming dog at the centre of Henk van Alphen's Cardero Group mini-Empire, announced it was a squeaky clean corporate wonder of an entity in this NR.

That doesn't pan with this post in this blog from Ghana (the one indicated in CDU's NR it seems), which explains the company is under investigation for the bribery of a government official. Here's an extract, click through for more (and there's lots more):

The Royal Canadian Mounted Police (RCMP), a Canadian Anti-Corruption Agency, has launched investigations into the activities of Cardero Resources Corporation, herein referred to as Cardero Resources Ghana limited which is currently working on the Sheini Iron Ore Concession in the Zabzugu/Tatale District of the northern region for their alleged “involvement in illegal business deals,” the Enquirer can confirm.
The allegations labeled against the company and its Ghanaian partners, Emmaland Resources Ghana Limited, the Enquirer can report are related to bribery and corruption, disregards to laws of Ghana and manipulation of Ghanaian public officials regarding Sheini Iron Ore concession.
The anti-corruption agency launched the investigations when



Chart of the day is...

...gold in Euros and Dollars, 12 months:


From those happy beans over at Kitco. A reminder about gold's relationship with the Euro is always worth a neuron.

6/24/12

Re-post: last week's most read post was this one...

...and I'm happy about that, so just for the heluvit here it is again:



For your information.

dyodd


x

The IKN Weekly, out now


IKN164 has just been sent to subscribers. Here we'll leave you with something decent to read for a change:

Design

I found a dimpled spider, fat and white,
On a white heal-all, holding up a moth
Like a white piece of rigid satin cloth --
Assorted characters of death and blight
Mixed ready to begin the morning right,
Like the ingredients of a witches' broth --
A snow-drop spider, a flower like a froth,
And dead wings carried like a paper kite.

What had that flower to do with being white,
The wayside blue and innocent heal-all?
What brought the kindred spider to that height,
Then steered the white moth thither in the night?
What but design of darkness to appall?--
If design govern in a thing so small.

 
Robert Frost