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7/21/12

The London 2012 Olympics logo: Is it true?

Twitterworld seems to think that the logo for the Olympic Games London 2012 is in fact Lisa Simpson performing a sexual act (as they say in all the class publications) on Bart. YOU BE THE JUDGE!


Is this some kind of subversive left-wing plot to turn us all into baby-eating zombies...or summink?


Five days of metals and miners: July 21st

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).


A funny old week, which seemed like much more action than it was once the dust had settled yesterday. Silver UNCH, take your cue from that.

The Friday OT: Cassandra Wilson; Love is blindness

Cassandra > Bono. That is all




7/20/12

Stinking rich in Latin America

Just how many really, really rich people are there in LatAm? To find out, we check the 2011 Annual Report from rich people counters "Wealth-X" and get this chart as a result. Here we see the top ten countries in LatAm by number of people with a net wealth of at least U$30m:


So if you want to hang with loaded neighbours, hightail it to Brazil. Meawhile, I can only assume they left Panama off the list because either 1) it was unfair competition or 2) the stinkin' rich people who live there....errr...don't actually live there.

By the way, that Wealth-X report covers the whole planet, not just LatAm.

UPDATE: To answer Utpal in the comments section here's how the ranking goes per capita, with country populations taken from the CIA World Factbook (a good source for these things). Please note that this per capita ranking is unlikely to be complete and only covers the ten countries above. For exmaple, I'd expect Uruguay (pop under 4m) to rank highly on a per capita basis.


rank country rich per million
1 Chile 43.94
2 Peru 26.23
3 Mexico 25.22
4 Argentina 24.88
5 Brazil 22.97
6 Dom. Rep 22.30
7 Guatemala 21.99
8 Colombia 19.91
9 Ecuador 18.07
10 Venezuela 17.83


We do this by number of richies per million of population and as expected, Chile wins (and by quite a distance) with 44 per million. Peru ranks highly, which isn't surprising if you have an inkling on how stinking rich some exclusive places in Lima really are.

Mo' Atico (ATY.v)

Just a few more thoughts after yesterday's pre-bell post and the subsequent action we saw in the stock:


dyodd, dude

Chart of the day is...

...12 months of Curis Resources (CUV.to):


IKN's previous thoughts on the standards of this company here.




7/19/12

The Rush vs GORO quiz

Which of the following would you prefer to be holding at the bell tomorrow morning?

1) Shares in Gold Resource Corp (GORO).

2) Rush Limbaugh's penis.

The GORO 2q12 production numbers are here, with the surprising* news that the company hasn't started to process the high-grading mineral that it said it would start bringing to the surface around....oooh, around this time last year in fact. This is a company that has "gold" in its corporate title but generates less than 30% of its revenues from said metal. No 43-101, a massive NSR it pays to straight one of its directors, serious pumping from the tinfoilhat rah-rah brigade, we could continue. In fact, kinda surprising it's taken this long.

GORO guided for 2012 at 120k to 140k AuEq (hah...love that "Eq"). It has produced 45k AuEq in the first six months of the year. It has a market cap of one point three three billion dollars. Do some math.

*not

Disclosure: No position in GORO and what's more your humble scribe has been calling this thing an avoid for the longest time. 

Hecla (HL) news

The accident at Hecla's (HL) Lucky Friday mine in November that killed a worker was one of three serious incidents at the mine during 2011 that eventually saw the operation shut down. Today we get this report on the Fed investigation and here's an interesting line from the report:
"Managers failed to provide workers with the proper safety equipment, according to a report by the Mine Safety and Health Administration."

Watch out for more news on Hecla. For example, news on lawsuits.


And now, a special message

This message goes out to two sets of people:
1) Analysts and market commentators that nowadays take ideas, themes and analysis found on this blog and The IKN Weekly, then re-package them and pretend them their own. This is particularly true of political risk analyses for mining companies in the LatAm region. It's good that you're slowly getting past the moronic levels of analysis but be careful about how much you claim as your own. And yes, I'm talking about you in particular on that, you know who you are and more importantly I know who you are, too. And I'm watching.  And revenge will be nasty if you push it any further. 
2) All those happy jolly individuals who read the blog, then copy script and paste any part of it that takes their fancy over at their favourite bullboard without giving any link-back or credit to the author. There are even some of you happy jolly people that try to claim this humble scribe's work as their own, which is sort of cherry and icing on the cake.

And now for the message:

Fuck off.

And it's underlined, too. Mojitos served, the end.

Chile copper production: Totals are up, Codelco's down

Chile's copper beancounters Cochilco released five month totals for copper production in Chile today (Jan thru May) and the most interesting thing is how Chile's state-run company, Codelco (world's biggest single copper producer) saw its production drop by 7.5% compared to the same period of 2011, while the overall total rose by 1.5%. In other words, the privately owned big copper mines are taking up the slack. You want charts on it? Yeah sure thing! This is IKN after all:

Here's the country total (incl private companies and Codelco):

Here's Codelco alone:

And here's the private company total (i.e. grand total minus Codelco total):

See a trend? Yup me too and in one oversimple sentence, Codelco's ageing and depleting mines with dropping grades are the story here. 

Atico (ATY.v) nails a couple of decent holes

Atico Mining (ATY.v) is a newish start-up ran by the Ganoza tribe (behind Fortuna Silver (FVI.to)(FSM)) and the company has been exploring a corner of Colombia, looking for lens-type mineralization that it suspected exists around an established privately owned small mining operation And by the looks of these drill results this morning...

ATDHR-04 41 meters of 6.49% Cu, 17.57 g/t Au and 13.26 g/t Ag
ATDHR-01 41 meters of 6.54% Cu, 1.82 g/t Au and 8.22 g/t Ag

...they've found what they've been looking for. Let's play "Oooh Jethro, what's that rock worth?" in true Casey Research Throw-Glitter-In-Yer-Eyes bullshit style. By using $3.50/lb for copper. $1600/oz for gold and $28/oz for silver, then by using a flat 85% recovery on all metals, we get:

For hole #4
  • Cu 143.1 lbs X $3.5 X 85% = $425.72
  • Au 17.57g X (1600/31.1) X 85% = $768.38
  • Ag 13.26g X (28/31.1) X 85% = $10.14
Total: $1,204.24 per tonne of rock


For hole #1
  • Cu 144.2 lbs X $3.5 X 85% = $429
  • Au 1.82g X (1600/31.1) X 85% = $79.59
  • Ag 8.22g X (28/31.1) X 85% = $6.29
Total: $514.88 per tonne of rock


Nice holes and bound to get greed glands opening wide in Canada this morning. Bascially, what we have here is largely the same kind of thing that Salazar Resources has at El Domo, except that Atico is working in a country that is friendly towards mining rather than Ecuador. But putting all irony aside, these are good holes and the gold kicker they've found makes a big difference to what's understood to be a copper search, conceptually at least. One to watch in trading today.


Disclosure: No position in Atico Mining. None in Salazar for that matter. Long FVI.



Chart of the day is...

...oil, (the NYMEX WTI Sep futures contract to be exact), 60 minute charting that takes in last five days:

Trend? Yup, it's a trend.




7/18/12

An AuRico (AUQ) cheap shot on Scotia

Seriously, I'm so bored by this crappy market I'm reduced to drive-by shots at analyst notes. So anyway, the Scotia analysis note dated Jun 20th linked here.

Said note summed up by this line here: "With non-core assets gone, AuRico is one of our top picks as a mid-tier,  low-cost producer in the sector"

AuRico (AUQ) chart, June 20th to date here:


So how's that Rene Marion lovefest going for you, Trevor? Seriously, isn't it about time you stopped doing the same things and expecting different results? 



Today's market comment

Here:


Yup, it's that inspiring.

IKN leads, others catch up in their own sweet time

July 15th, IKN:

Word on the streets in Peru is that in the next few days, Ollanta Humala's Prime Minister and cabinet chief Oscar Valdés will "be resigned" and take with him a sizable number of the ministers appointed under him. The Valdés period has been marked mainly by a confrontational attitude towards dissenting groups in Peru (start with Conga, work through the others) so the big question is who gets Valdés job, not whether he'll stay on (cos he won't) because the choice Humala makes will set the tone for the months to come.

July 17th, Reuters:
LIMA, July 17 (Reuters) - President Ollanta Humala has begun sounding out replacements for his prime minister as part of a widely expected Cabinet shuffle designed to calm a wave of violent anti-mining protests in the world's No. 2 copper producer. Continues here

dyodd



Argonaut Gold (AR.to) 2q12 production and stuff arising

Argonaut Gold (AR.to) came out with its 2q12 production numebrs today, which you can see on this linko right here. And once you've played around with the production and sales figures, then averaged out the London Fix prices for the quarter and seen how they compare to AR.to's average received price, you can get to this...

...a guesstimate of sales revenues of around $28.9m. That should be good for a net profit of $11m or so for the quarter, or nearly 12c EPS. All round, looks like a decent quarter from AR.to, up to expectations and all that, though on looking at the share price development...


...you kind of get the feeling most of it is already baked in. Just sayin'. Anyway, good mining company executing well.

UPDATE: Hah! Shows what I know, AR.to pops 8% at the bell. Maybe cos Canadian thieves-in-suits (you might know them by their alternative moniker of "brokerages") are pumping hard. Still 25% from that March'12 ATH though, so perhaps momo can take it higher. Hell, I dunno and bakeapples in the comments section here seems to think San Antonio is a no-go...that'd change things if true.

Chart of the day is...

...a year of zinc spot prices.


You could fall asleep watching this metal these days. A far better gauge of the world economy than copper, that's for sure.

7/17/12

OT: A good post on Syria, MENA, oil etc

Not the usual fare round these parts, but I found Bruce Krasting's post today, 'Words of War', particularly intriguing and thought-provoking so I thought I'd share the link here.

Spanish lesson of the day: "Baja" = down, drop, lower, reduce (etc)

Baja Mining (BAJ.to) 5 day chart:



IKN sez: "Yup".

IKN also sez "Be thankful we didn't feature the 12 month chart"

So how long before NadaGold (NG) buys out Sunward (SWD.to)?

And so today Greg Lang of NadaGold (NG) climbs on board Sunward (SWD.to) and joins Igor Levental of Electrum (the big backers of both companies). To use Rolf Harris's immortal line, "Can you see what it is yet?"

I just pray they offer me cash in the deal and not that shitty NG paper. Disclosure: long SWD.

Colombia's mineral dependence

Setty has put together a very interesting post on the way Colombia's growth is tied to minerals production (and note before you go over that Colombia the country tends to lump together oil&gas production, coal production and hard rock mining production in its official stats). It's recommended reading and gives us a solid bird's eye picture of where the country is now and what it intends in the future. Go and have a read yourself.

McEwen Mining (MUX) 2q12 production is ...errr..."good"

The tone was set from the first second your humble scribe received the 2q12 production numbers from McEwen Mining (MUX) (MUX.to) yesterday afternoon, because when a guy unafraid of hyperbole such as Robbie Mac uses a plain vanilla "good" to describe things, a shudder immediately runs down thy spine. So here's how San José's 2q12 production stacks up against previous quarters for gold and silver:



And that's a 2q12 described as "good", so we have therefore to assume that all the other quarters filed by this consistently underperforming mine that's only ever hinted on living up to its expectations once, back in 4q10, are "good" as well. Yeah Robbie, good good good, so good you had to merge it into U.S. Gold...

On top of that you have rapidly rising costs in Argentina and you also have the small factor of 44% of the metal not leaving during the period because CFK&Co were farting about with the revenue repatriation rules, part of the nation govt's sudden mania to hoard dollars (which backfired in this case and the rules were eventually relaxed).

I digress. We're not doing all the numbers here in this post but let's summarize with the necessary instructions for MUX longs come 2q12 financials reporting time.

1) Stand legs slightly apart.
2) Bend down, touch floor.
3) Maintaining position, grab ankles with hands.
4) Wait patiently.




Rene Marion leaves AuRico (AUQ) (ex-Gammon Gold)

Today we hear that Rene Marion is stepping down from the CEO's job at AuRico (AUQ) due to illness. We  also get the normal corporatese gibberish about the guy from the people he's leaving behind which in this case goes...
"He is an outstanding CEO who has led this company through a period of tremendous growth and transformation."

...but the cruel reality tells a completely different story:


CEOs are not accountable to their lackey officers, CEOs are account to shareholders. And by looking at that chart for about 5 seconds anyone with a modicum of common sense can see that shareholders in AUQ will be happy to see him go, whatever the reason. That too blunt for you? Tough titty, this is capitalism not a love-in. Marion failed his shareholders, period.

Chart of the day is...

...The Port of Los Angeles Outbound Cargo Tonnage minus Inbound Cargo Tonnage tallies, 2006 to present:



Now that's interesting. H/T to GMRobertson on Twitter

7/16/12

Bear Creek (BCM.v) seeing share price manipulation? Shome Mishtake Shurely Ossifer!

I mean, what's so unusual about this?


Just another normal day in Canada...

A musical interlude: Faith No More, Midnight Cowboy

The commentary for this Monday.





Barkerville (BGM.v), BCSC, stupid investors (from IKN167)

Here's how we opened IKN167 yesterday. I call it op-ed, you might call it frothing-mouth rant.


The abject stupidity of market participants should never be underestimated
For years (rather than days, weeks or months) your author has compiled an ever-growing list of complaints about the way in which Canadian regulatory bodies, specifically in today’s case the BCSC, generally fail to protect the investment community. The beef du jour (or maybe ‘boeuf of the day?) are the issues arising out of the Barkerville Gold Mines (BGM.v) situation that ratcheted up a couple of notches on Thursday morning when the company announced (1) that the BCSC had been looking into the company’s recent news release on the now rather famous 43-101 technical report that put Cow Mountain at 10.6m oz gold (see IKN reports passim and a thousand other places). The BCSC’s role in this saga can be questioned on many levels, not least of which the way in which BGM was halted the morning June 28th and then was allowed to resume trading after the release of the “we got 10.6m oz gold” NR the next day. The simple question is why was the halt lifted? The BCSC was in its right to have insisted BGM remain halted until it completed a review there and then, but preferred to allow the stock to trade, become subject to a massive pump, a nasty drop and high volume, extremely lucrative (for somebody) price movements.

So yet again, the BCSC looks woefully inept and incapable of fulfilling its brief of protecting the investment public in British Columbia (and Canada and beyond). However, its ineptitude pales in comparison to the dumb cluck trading action in BGM late last week. This is the five day chart for BGM and we see the drop at the bell on Thursday, but we can also clearly see the action on Friday when BGM saw solid buying action all day. This action can only be proscribed to retail investors “seeing an opportunity” and “buying into a story” and it beggars belief. There’s a big pump going on around BGM, on that score there’s is little room for debate, and the fact that the pump can still work well after a belated BCSC investigation, after a NR of the type seen on Thursday and after the world has been clearly warned by the company itself (under obvious legal obligation to do so, else face the consequences) is testament to the abject stupidity of retail market participants in the junior sector.

The Barkerville case shows the need for Canadian Securities Commissions that can do far more than the current batch of inept bodies working under rules and laws long past their sell-by dates. If not, the quantity of scumbags and thieves that pervade the junior mining community and prey on the stupidity of its investment community will only multiply. But in the meantime, it’s worth noting that just a few ounces of common sense and a basic ability in critical thinking puts you a nautical mile ahead of many of your investor peers, something you can take advantage of in true Darwinian style.

Polling Venezuela: The latest Presidential election voter intention poll from Datanálisis

Datanálisis, regarding as perhaps the most reliable pollster in Venezuela (which isn't saying much to be honest, but you have to start somewhere) has just released the results of its latest voter intention poll for the Presidential election coming on October 7th. Here's the chart from the numbers:


The poll was taken up to and including June 23rd, which was one week after the inscription day that marked the first quasi-official event of the electoral campaign. The poll surveyed 1300 people nationwide between June 14th and June 23rd and is given a margin of error of 2.72%

Chávez leads by over 15 points and it looks like Capriles will have to look to getting the maximum number of those undecideds to make any sort of impression. Amongst the secondary data, we note that the Chávez "hard vote", those 100% sure of voting for him, comes to 41.2%...and that's a strong base from which to build. Also, the when asked which way they were leaning right now, undecideds split 55% towards Capriles and 44% towards Chávez. In other words, Hugo Chávez is still hot favourite for this election according to the polls.


The most interesting part about the Endeavour Silver (EDR.to) (EXK) news release today isn't about Endeavour Silver


Today Endeavour Silver (EDR.to) (EXK) reports on what it's found at its new purchase, 'El Cubo', bought from AuRico (AUQ) for $250m ($100m cash and $100m shares now, $50m down the line if all goes correctly). The NR is here so go look (I'm still working thru the long NR, plenty of detail to digest) but the thing that's most interesting is the way El Cubo's reserves and resources have been significantly chopped from the old AUQ assumptions.

Here's the breakdown. According to AUQ before the deal, El Cubo stacked up like this:

Proven & Probable (P+P) Silver: 18.5m oz
Proven & Probable (P+P) Gold: 322,000 oz

Measured & Indicated (M+I) Silver: 8.3m oz
Measured & Indicated (M+I) Gold: 269,000 oz 

Inferred Silver: 26.7m oz
Inferred Gold: 548,000 oz

Total P+P+M+I+I Silver: 53.5m oz
Total P+P+M+I+I Gold: 1,139,000 oz

And now, EDR has numbers for the very same mine like this:
Proven & Probable (P+P) Silver: 7.04m oz
Proven & Probable (P+P) Gold: 112,100 oz

Measured & Indicated (M+I) Silver: 4.43m oz
Measured & Indicated (M+I) Gold: 76,500 oz 

Inferred Silver: 11.41m oz
Inferred Gold: 220,000 oz

Total P+P+M+I+I Silver: 22.88m oz
Total P+P+M+I+I Gold: 408,600oz
Thirty million ounces of silver and 700k of gold gone poof? Big differences, which reflect mainly EDR's changed attitude towards El Cubo and how to mine it. They're looking to make El Cubo a high grade vein underground operation, rather than mining it for bulk at lower grades. That's fair enough, but it also means El Cubo is now moving into the unknown. But the real story here is the way in which AUQ's reserves and resources numbers have been chopped to bits and you have to wonder how the numbers it produces at its other mines would stand up to a bit of scrutiny if this is the result at ElCubo.

Are you surprised to hear that Rene Marion and AUQ (ex-Scammon Gold) took a liberal and generous attitude towards its reserve count? Nah, me neither.

Chart of the day is...

...natgas, long-term with annotations.

And today's XKCD, entitled "Geology", is well worth your time.

7/15/12

The IKN Weekly, out now


IKN167 has just been sent to subscribers. They've gotta be at the right price, no chasing and no greed, but we're actually starting to think about buying or adding to positions on a couple of stocks now

Peru's cabinet re-shuffle: Not if, but who

 Don Corleone: Tom, I advised Michael. I never thought you were a bad Consigliari. I thought Santino was a bad Don, rest in peace. Michael has all my confidence as do you. But there are reasons why you must have nothing to do with what's going to happen.
Tom Hagen: Maybe I could help.
Michael: You're out, Tom. 

The Godfather Part 2* 1


Word on the streets in Peru is that in the next few days, Ollanta Humala's Prime Minister and cabinet chief Oscar Valdés will "be resigned" and take with him a sizable number of the ministers appointed under him. The Valdés period has been marked mainly by a confrontational attitude towards dissenting groups in Peru (start with Conga, work through the others) so the big question is who gets Valdés job, not whether he'll stay on (cos he won't) because the choice Humala makes will set the tone for the months to come.

*oops, ty droog