The Daily IKN email digest, get all daily posts sent to you next day (& no ads)
UPDATE: This is still a breaking story and more unofficial information coming out. We now hear that the hostages weren't freed by locals but at least three of the five managed to escape (three have made unofficial declarations to family who have passed on the info, so we can perhaps assume all six escaped) when locals were about to
UPDATE 2: Now hearing only three hostages are free.
UPDATE 3: Saturday morning and what we now know is that three hostages managed to escape and were not freed by the Mallku Khota locals. They were helped in their escape by police officers in "an intelligence operation". As for the others held, at least two are due to go be "judged" by locals this weekend according to community law (i.e. a local and totally unrecognised ad hoc trial, which is potentially dangerous) and have been accused of espionage and attempting to infiltrate the protesters' ranks while wearing locals' clothing. Authorities have told of roads to Mallku Khota being blocked, with deep trenches dug to stop vehicle access. Also, the protesters are armed with rifles and dynamite.
A slice of 80s, a funky baseline, a memorable chorus and above all....
...an infamous video. If you don't know the song and feel need to ask, no it's definitely NSFW.
It's 10:48est and the confcall starts at 11am. Access it on the interwebnetpipes via here
...has just been sent to subscribers and this is the belt'n'braces post. Yep, it's about the LPK/AAG deal.
Here's the NR, here's how it kicks off
Lupaka Gold and Andean American Announce Business Combination to Create a Peru Focused Gold Exploration CompanyVANCOUVER, BRITISH COLUMBIA--(Marketwire - July 5, 2012) - Lupaka Gold Corporation (TSX:LPK) ("Lupaka") and Andean American Gold Corp., (TSX VENTURE:AAG)(FRANKFURT:AQN) ("Andean American") are pleased to announce the signing of a Binding Letter of Intent (the "LOI") that provides for a combination of the two companies (the "Business Combination") to create a new Peru-focused gold exploration and development company. Under the terms of the Business Combination, Andean American shareholders will receive 0.245 shares of Lupaka for each share of Andean American owned, resulting in the shareholders of Andean American owning 45.27% of Lupaka upon the completion of the Business Combination.
Subscribers: Expect an update later this evening. We'll also be taking a good look at the numbers and what this deal means to LPK in the subscription IKN Weekly issue 166, out Sunday.
Barkerville Gold Mines is a client of Dig Media. Dig Media was paid a fee for the creation and dissemination of this commentary.
BUT WAIT! THERE'S MORE! If you start sniffing around the interwebnetpipes you also find that Resource Investing News ran a piece written by Thomas Schuster on Helio Resource Corp (HRC.v) that was very complimentary about that company. At the end we read:
Helio is a client of Dig Media. Dig Media was paid a fee for the creation and dissemination of this commentary.
Kivalliq is a client of Dig Media. Dig Media was paid a fee for the creation and dissemination of this commentary.
Kivalliq is a client of Dig Media. Dig Media was paid a fee for the creation and dissemination of this commentary.
Canyon Copper Corp. is a client of Dig Media. Dig Media was paid a fee for the creation and dissemination of this commentary.
...Great Panther Silver (GPR.to) (GPL), September 7th to date. The reason for Sept 7 as the kick off point is on the chart:
A dish best served cold.
“It can’t go from half a million oz. at half the grade to 10 million oz. at twice the grade, you can’t do that, it doesn’t happen in reality,” said geologist Brent Cook of Exploration Insights in a phone interview. Cook said his initial reaction to the news was disbelief.
“It got me to pull out my copy of ‘Gold Today, Gone Tomorrow,’” Cook said of the book about the Bre-X scandal."
"...the company could theoretically be sitting on between 65 million and 90 million oz. gold.
“It’s impossible, period,” was Cook’s reaction to the 90 million oz. figure. Even for the Cow Mountain resource itself, Cook pointed out the challenge of achieving such high numbers.“This is a narrow, high-grade vein district. From the cross-sections we’ve seen, you have a real hard time connecting the veins. Continuity is a real real problem there,” Cook said."
But back to Cajamarca, which has received an official seal of approval from the national government but is also getting the same flat rejection from Cajamarca locals, perhaps not all the locals or even a majority, but enough of the ones with political clout to make a difference. The ball is now in Ollanta Humala’s court and it will be interesting to see whether he goes for the more talk route or more direct action route. The way things look, he’s likely to want to negotiate with local protest leaders at least one more time (or better said, attempted time) but there will come a time when this Humala government loses patience and goes for the direct, authoritarian route. That much was implied in Saturday’s speech when Humala told Peru that it has to respect current agreements and cannot rescind on deals without suffering grave consequences that natural resource investments are a vital part of Peru’s future growth and prosperity and that Peru would abide by the rule of law, come what may. Therefore, the likelihood is that the Conga/Cajamarca protests will drag on a while longer, at roughly the same noise level as we have today, but as we’ve already noted in previous editions there will come a time when Humala bangs a few heads together if necessary. Sadly, I think it’s going to be necessary and if pushed for a timeline, I’d best guess that at some point in October or November the government will get more active, as that’s the time when Cajamarca region’s non-city dwellers (the core of the Santos protest groups) need to tend their land, plant crops etc. There’s also one more thing worth noting, which is that Gregorio Santos has the clock ticking on his regional presidency as his term finishes in mid 2014. He’ll be around to make lots of noise in 2013 for sure, but it’s a near certainty that he’s voted out the year after.
IKN back and some thoughts to update that passage from two-and-a-bit weeks ago:
a) As considered, the local anti-mine people rejected his move that week out of hand (again)
b) As considered, between then and end of last week he moved to open talks one more time and nothing came of it
c) And here we are, the time has come and this week President
NadineOllanta Humala has decided to do that head-cracking
d) though it has come earlier than my best guess in the piece of October/November, though more because the Celendín mob attack yesterday seems to have overplayed the anti-mining hand and the government took advantage by slapping a State of Emergency on the region.
e) So to today's events and the arrest today of anti-mine leader Marco Arana was done in such a heavy-handed manner and at a time/place when the police officers knew they'd have their every move on video, that it seems as though a deliberate decision to be heavy handed was made further up the chain of command. I can't help but think that Humala is making a sacrificial lamb of his Prime Minister, Oscar Valdés, on this issue as there were already plenty of rumours swirling around Lima that he's on his way out before the end of the month. If some sort of shock-horror show is laid on and Valdés gets the chop, Humala gets to play the KingOf Democracy, getting his way in Conga while throwing a bone to the shocked and horrified.
UPDATE: Another protest death reported, now bringing it to four for the day in the Cajamarca region. This time in disturbances in the nearby town of Bambamarca. Those of you long Sulliden (SUE.to) will be able to find that one on a map quickly, won't you?
South American Silver (SAC.to) finally musters up enough common decency to inform its shareholders on the Mallku Khota clustafark
UPDATE: this morning, one of the anti-mine protest leaders, priest and famous politico Father Marco Arana was arrested by police in Cajamarca square. He was arrested under State of Emergency laws passed last night that prohibit political demonstrations but the manner of his detention was heavy-handed to say the least. This video from a Cajamarca TV station sympathetic to the anti-mining cause (hence the choice of comments from the presenter) shows what happened:
There's some kind of message being sent out today from national government. My guess is that Humala is saying 'No more Mr Nice Guy'. I'll also hazard a guess that Prime Minister Valdés will be Ollanta's sacrificial lamb once the polemic about these images start. In other words, it's showtime folks.
UPDATE 2: Another protest death reported, now bringing it to four for the day in the Cajamarca region. This time in disturbances in the nearby town of Bambamarca. Those of you long Sulliden (SUE.to) will be able to find that one on a map quickly, won't you?
...the gold/silver ratio:
Let’s just visualize what this deposit would have to look like on the ground. It is an order of magnitude richer per cubic meter than the Timmins Camp in Ontario. To support such a resource, the 1,000 by 300 by 300-meter block of ground at Barkerville’s Cow Mountain would have to host approximately 39 kilometers of Mother Lode type veins, at a density of one 2-meter wide vein spaced every 7.6 meters. This assumes each and every vein is consistently grading 5.28 grams per tonne gold along a 300 meter strike and 300 meter depth. Got it?
As a geologist, I will steer away from commenting on some corporate anomalies at Barkerville such as the recent resignation of a couple and the very short tenure (45 days) of a CEO appointed in early March.
I do not have the luxury of having the final NI43-101 report supporting this resource in hand, so my initial review comes from the June 29, 2012 news release and other publically available information from the company’s website and SEDAR. Having reviewed these over the weekend, I would like to address several technical red flags I see around the reported resource at Cow Mountain.
1) This resource is a quantum leap in size and grade over the last resource for the Cariboo Gold Project published by Giroux (2006) which, at a 0.01 oz per ton cut-off, included an indicated resource of 479,504 oz gold at a grade of 0.046 oz per ton gold and and inferred resource of 112,992 oz gold at a grade of 0.033 oz per ton gold. Such growth over such a short time would be extraordinary, especially the increase in grade.
2) All of the resource at Cow Mountain is classified as indicated and none is classified as inferred. It is exceptional to see a resource, especially one of this magnitude, display this high of certainty.
3) The news release mentions that if a block falls within the search ellipse of one drill hole, it is classified as “ore.” Most resource calculations require more stringent criteria for resource blocks to be classified as indicated.
4) From a drill plan map available on Barkerville’s website, I calculate there have been 238 surface drill holes completed at Cow Mountain between 2007 and 2011. In the news release, there is a mention of 2,638 drill holes totaling 145,600 meters, mostly historic, used for calculating this resource. Although results from 2007-2011 drill holes are available in recent news releases and the NI43-101 update report from 2009, data from the vast number of historic holes is not readily available. This lack of transparency is disturbing.
5) There are all of seven cross sections showing drill intercepts on the company’s website. Text displayed on these sections is painfully hard to read due to the very small font size used. Gold intercepts on these sections as well as in recent news releases are mostly narrow, typically no more than a few meters, and of highly variable grades ranging from less than one gram per tonne gold up to rare intercept grading >100 grams per tonne gold. On the sections, no attempt has been made to connect veins from one drill hole to the next. A full set of cross sections like those described as having been employed by the resource modeler in the news release are not available on Barkerville’s website. This makes a critique of the news release’s assertions nearly impossible.
6) A review of recent news releases indicates some drill holes have occasionally intersect narrow, very high grade veins. Mesothermal lode gold systems such as Cariboo commonly display such “nuggety” gold. What is disturbing is that the company has employed extreme grade smearing utilizing these high grade spikes. For example, on December 12, 2011, the company reported an intercept of 62.3 meters at 14.2 grams per tonne gold in hole CM11-102. Within this are two intervals (veins), 0.9 meters at 858.1 grams per tonne gold and 0.7 meters at 84.6 grams per tonne gold. I calculate these smaller intercepts contribute 95% of the gold to the longer intercept, yet represent only 2.5% of its length. Although these high grade intercepts are intriguing, one look at the cross section displaying this hole indicates they do not extend to other nearby holes. Therefore, it is likely these represent small volumes of material, certainly not the large high grade zone implied by the longer reported intercept.
7) Reporting “geological potential” is highly unconventional, but it is done very liberally in this news release. The QP asserts that the Island-Cow-Barkerville belt potentially hosts 405-684 million tons at 0.12-0.16 oz per ton for 65-90 million oz gold. The Rainbow unit of the Barkerville sequence is stated as being the preferential host to veins at Cariboo due to its brittle nature. The news release implies that the resource modeler used this observation to make certain assumptions about volumes of rock, vein density, etc. to help calculate this potential. While such theoretical exercises are entertaining, they are highly speculative and have no place in a news release.
The seven red flags I have presented here are hopefully enough to provide you a taste of my initial review of Barkerville’s resource. This story comes at an interesting time given the current doldrums in the market. I’d urge subscribers to give the observations above some thought and undertake your own due diligence before jumping into this stock.
We have now beaten this one up sufficiently. It is up to Peter T. George, the resource modeler contracted by Barkerville, to, in his upcoming NI 43-101 report, fully illuminate investors on the methodology he employed to calculate this astounding resource. Like Brent, I shall be preparing a cold gin and tonic about 45 days from now in preparation.
UPDATE 2: Brent Cook weighs in, via an interview with Northern Miner.I like the bit where he references Bre-X
UPDATE: And this new report states that locals have taken 20 (twenty) hostages in total, including 15 locals who were working at the Mallku Khota project campsite and three SAC.to workers, which added to the two taken last week brings the number up. Also the campsite was largely destroyed by the ambush attacked of 70 to 100 protesters, a Hi-Lux 4x4 taken away, radio antennae smashed and other types of mayhem. And yet again, all this info comes from the SAC.to company in Bolivia, in Spanish for the Bolivian population but zero zip nada nothing from the comapny for its Canadian shareholders. Ever get the feeling Greg's hiding things from you?
And Yamana's Esquel (now called Suyai) Also a Beauty - They Will Benefit from a Positive Mining Swing in Chubut - Scotia Mining loves low sulphidation, epithermal precious metals deposits (like Goldcorp's Cerro Negro and AngloGold's Cerro Van Guardia both in Argentina) - Most Analysts give very little value to Yamana's Suyai due to the current laws in Chabut making it near impossible to develop. Yamana (YRI-CN/AUY-US, 2-SP, US$19.50/sh target, Tanya Jakusconek) is looking to develop Suyai as an underground deposit instead of open-pit plus Mill the ore off-site in an area that would be more acceptable to locals (perhaps as far as 40kms away). The high grade nature of the orebody gives Yamana this flexibility. Suyai, which has huge exploration potential, currently has 2.3Mozs grading 15 gpt in the Indicated category.
But today July 3rd, with the news that Chubut's law proposals (still at proposal stage five months later, you'll note) are all nasty and horrid and smelly and that, here are their thoughts on the same asset held by the same company:
Minimal Impact for YamanaAnd while Yamana’s (AUY-US / YRI-CN, 2-SP, US$19/sh target, Tanya Jakusconek) Suyai project is also located in Chubut , it comprises only ~1% of her Yamana NAV and is being evaluated as an underground mine with offsite processing, tailings, and waste facilities.
No, not yet. Still plenty of suckers left to get on, it seems.
"[Peña Nieto] may have even more trouble than Calderón convincing the public of his legitimacy. I just heard from a trucking company owner, who says his drivers are saying there's real anger over the "election" not just among the Mexico City intellectuals and the professional lefties, but people all over the country. When even Norteño truckers and warehouse guys think something's hinkey, it's gonna be rough"
It's all over folks, EPN is the new Prez of Mexico. Congrats, dude.
I missed this NR in the rush this morning and only got to it a few minutes ago...and wowsers! You see this stuff? Here's the chunky bit, with the special lines in bold type:
continues hereThis level of government participation and tax burden is unprecedented relative to any of the other jurisdictions where Pan American operates, including the province of Santa Cruz in Argentina, where the Company's Manantial Espejo mine is located. The Company's initial review of the effects of the proposed legislation, when coupled with the current inflationary environment in Argentina, indicates that the increased provincial participation will render the Navidad project uneconomic at any reasonable estimate of long-term silver prices.While the proposed law remains subject to revision within the legislative sub-committee and during the debate process in the provincial legislature, in the event that the law is approved as proposed without any meaningful modifications, Pan American will have no other reasonable option but to suspend further investment in Navidad. Without clear potential for positive economic returns, further investment and project expenditures cannot be justified.Geoff Burns, President & CEO of Pan American commented on the proposed legislation, "This is an incredibly unfortunate development for the mining industry in the province of Chubut and in Argentina. Having made significant investments over the last two and a half years in work to prepare the world-class Navidad silver project for development, it is extremely disappointing that the government of Chubut would introduce this legislation without meaningful consultation with the mining industry. Since acquiring Navidad, we established a policy of open and honest communication with all levels of government as to our progress and plans and were surprised that we were not consulted on the economic effects that the proposed legislation would have on Navidad's development. I am convinced that it was the provincial government's intent with the new draft legislation, to define a path for the development of Navidad, not to render the project uneconomic. However, if the draft law is passed as submitted there can be no other choice currently than to stop investing further in the project".
So let's run two theories here:
Indigenous community holds Canadian Mining Company Engineers HostageBolivian indigenous community members in the Andean Potosí zone have held hostage two engineers from the Canadian mining company South American Silver (SAC.to) and stopped a commission of local authorities from accessing the location via road blocks, according to government and company sources.The governor of the Potosí region (department), Félix González, told EFE that he had sent fiscals (lawyer/judges), regional legislators and social service managers to the zone where the kidnapping took place to converse with the indigenous with a view to liberating the two people.The Potosí indigenous took as hostage the engineers Fernando Fernández and Agustín Cárdenas to demand that the Government free their leader, Cancio Rojas, accused of kidnapping and torture, and to reject the operations of the company in the zone.Rojas left prison last night, but is being kept under house arrest and is investigated for violent aggression towards other indigenous locals and the taking hostage of police officers over a period of several days.González has preliminary information that the Mallku Khota indigenous, from where the company operates, have taken to two hostages to another community but is waiting for official word from the commission on site.The governor said that the zone is "high risk" and rejected the idea that Bolivian President Evo Morales, of the same Aymara origins as the indigenous of the region, could travel to the region, some 350km south of La Paz, as the natives ask so that he can hear their demands.More than 80 police officers, reporters, fiscals and employees of the company arrived at the company camp site at Sacani, 20km from Mallku Khota, but could not go any further because the indigenous had blocked the roads and were detonating dynamite to threaten them.A source connected to the company currently in Sacani, told EFE that authorities were looking for a peaceful solution to the conflict and that a indigenous leader had told fiscals that the two engineers were in good health.The Canadian mining company is conducting explorations in the region to determine its potential for silver and indium, its main minerals, although there is also gold in reduced percentages that the indigenous want to mine for themselves.
...gold spot, the Kitco live chart screenshot:
UPDATE: Oh looky, gold just went over $1.6k and green on the day. That's confounded the TA pundits.