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8/18/12

Five days of metals and miners; August 18th

It's been a couple of weeks but it's back, our regular Saturday slot of 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). Done via Bigcharts instead of Yahoo because for some reason Yahoo Finance's charts have gone all glitchy


It turned out to be a flat week in all thew squiggly lines we offer, give or take a few tenths. Decent fightback from the equity ETFs after that midweek slump, though.

8/17/12

The Friday OT: Tom Waits; Hell Broke Luce

Your author has had a working week that's well rounded-off by this track&vid:


The track is Tom Waits angry, plus Keith Richards on lead and Flea on bass. The video is sublime. The back story about the man who inspired Waits is here. Thanks to KC for the inspiration.

Cerro Verde expansion agreed

The Freeport (FCX) majority-owned Cerro Verde copper mine has had its expansion plan approved by Peru's Mining Ministry. The expansion is due to cost a cool U$4Bn (note to cost-creep watchers; that's up from the company estimate of $3.5Bn this time last year) but the benefits is impressive too; production is slated to move up for around 120kt/annum Cu to 350kt/annum. That's a lot of copper.

The other thing that's changed is that Cerro Verde will now pay a 3% royalty on its production. It was royalty exempt before. Alll that's left is to award the construction permits after the necesary EIA work, which should happen before the end of this year.

Assange, Ecuador, Figs

Greg Weeks does well to sum up the main points of this Assange thing in just three paragraphs over at his blog and I agree with all his points. Read it here. I'd also like to state on the blog something I stated on Twitter yesterday (for the selfish reason of stopping the drip of mails before they become a flow); As long as the UK doesn't make the incredibly stupid move of busting into the Ecuador embassy to arrest Assange and haul him out of there, I really don't give a flying fig about what happens to him. 

Chart of the day is...

...gold, dailies:

The advantage of knowing bugger all about TA is that you're not limited to the normal range of wonky jargon-speak labels they use. I suspect that members of the National Union of Trained Technical Analysis (or NUTTAs) would have me drummed out for non-standard language.

8/16/12

AP's great report on the Antamina toxic spill

Frank Bajak of AP has done a fine job of work with this report that tells of the recent pipeline spill at the Antamina mine in Peru, so go read it. But amongst the hundreds of ill people, men women, pregnant women and children, my favourite line from the report is this one further down, part of the report on what happened when Antamina executives visited the affected village:
"Villagers also demanded an explanation for why they have not seen the promised $10 million reservoir to provide the town with water that the company promised in 2000 as a condition of laying the pipeline."

Read more here: http://www.charlotteobserver.com/2012/08/16/3459065/townsfolks-sickened-after-peru.html#storylink=cpy

That's what I call a damned good question. Read it all here

High Desert Gold (HDG.v): I wonder...

...what might have caused that?



Some tipster on a hot streak?

disclosure: no position in this overhyped dog going nowhere fast

OT: Irish sailing commentary must share

Thank you reader 'JP' for the headsup on this:



adore


The stupidity of fund managers never ceases to amaze

This is a bit of a generalized rant, not much more. Nothing particularly stunning or new contained either, I just feel like getting it off my chest every now and again that the utter dumbass stupidity of people that move millions of dollars' worth of money (their own and OPM) is something I can never fully assimilate. After seeing a couple of examples over the last 48 hours to unfairly pick upon (unfair in the sense that there are dozens of other to choose from) it just gets me to a point. Take for example the blow-up on Great Basin Gold (GBG) (GBG.to) on its 2q12 results and firing of CEO. Back in March we laughed heartily about the way in which RBC Capital Markets ran a $50m bought deal at 75c, finishing with the line, "But the great news is that Freddy Oh-No-I-Never-Mislead-Anyone Dippenaar says his mine will be up and running and free cash flow positive by the end of this year. AND THIS TIME HE MEANS IT. " but our coverage of this perennial dog has been long-standing (check them all out here, including the Feb 2009 post in which we baptized the company "Great Washbasin Gold" due to the amount of dilution). It's been dead dog obvious for years that this bunch of sophists shouldn't be trusted further than the distance to which they could be thrown, but that didn't stop the utter dumbasses filling RBC's books with their orders for "cheap" stock. Wonder how cheap they think it is now?  Then yesterday, the news from Los Andes Copper (LA.v) also caught my eye, as some offshore fund outfit called The Turnbrook Corporation announced that it had upped its shareholding in LA.v to 50.786m shares representing 31.2% of company shares out. These are people who either have no contacts whatsoever in Chile or just prefer to keep digging when in a big deep hole, because it would take them possibly 15 minutes of DD to find out from knowledgeable third party sources ( I personally have had several conversations about this company with several trusted sources and they've always come to the same conclusion) that the LA.v project at Vizcachitas is fatally flawed and will never, as in never, become a mine. But no, fuck it, they just keep on buying through sheer ignorance, or arrogance, or chutzpah, or whatever other psychological failing is behind their stupidity. GBG, LA.v, a host of others. I try not to get too narked about retail shareholders making silly choices about their own investment decisions, as after all I'm one of them and make my own bad calls for my own bad money. But when you are running millions for OPM and just blindly buy into these obvious dog stocks without so much as a minimum of knowledge, save reading the corporate presentations and being so impressed you ring your compliance office immediately? The lesson here is to remember, and keep remembering (because it's easy to forget) that the people running funds, buyside ops etc are ususally just as stupid as we are, but they're often far more irresponsible.

UPDATE: Gary Biiwii adds his thoughts on GBG here


The problem of arresting Assange inside a foreign embassy in the UK

A lot of talk around this Assange thing now, particularly about the way in which the UK has apparently threatened to break into the Ecuador embassy and arrest the guy. This would flagrantly contravene the Vienna Convention, but the UK is citing a national law that it says would allow them to do it. I'm not so sure about that, guys.

The law in question dates from 1987 and this link, to the British Law Society's review of the law (i.e. a page that succinctly explains laws in the UK to non-lawyers such as I) shows the problem. Here's the bit that matters, the reasons that the UK can revoke status of an embassy, either permanently or temporarily, under this law:


The Act is primarily addressed to these problems, and permits the government inter alia: 
1. to prevent missions from setting up offices in sensitive parts of London; 
2. to deal with the problem of empty former diplomatic premises by acquiring title to them and then selling them; 
3. to remove diplomatic status from premises which are being misused; 
4. to retaliate in kind of an overseas government insisted that a British mission move from existing premises or withheld consent to the acquisition of new premises.


As numbers 1,2 and 4 don't count in this case, we're left with #3, "misuse", and what that might mean. I think that as asylum seeking, although uncommon, is one of those accepted practice things in embassies around the world, it seems very unlikely that it can be categorized under "misuse".

Anyway, it's now nearly 7am in Ecuador so any interesting developments will be added to this post later. Enjoy the show.

UPDATE: Just a couple of minutes ago and after a long presser, Ecuador's Foreign Minister Ricardo Patiño announced that his country would grant asylum to Julian Assange. The main argument for the granting of asylum is that neither the UK nor Sweden would provide guarantees that Assange would not be extradited to the USA to face charges that carry the death penalty there. 

Chart of the day is...

...silver, dailies:


I don't usually care much about the day-to-dau machinations of silver, as it's not much more than a gold derviative (the gold/silver ratio is more interesting, though). However, the way in which Ag has stayed between basically $28 and $29 for four months, belies its wildman status and brings its own type of interest.

By the way, it's now 06:47am in Quito Ecuador, so I dedicate today's CotD to a couple of pals who work the newswires in Ecuador. Enjoy your day i the world limelight (for a change), guys.

8/15/12

OT: Two pictures received

One from my brother, one from a friend, both hit my mailbox in the last 24 hours. Sharing in the hope they might brighten your day, too:



None of the analysts on the Thompson Creek (TC) (TCM.to) ConfCall asks the right question

It was interesting to peruse through the transcript of the Thompson Creek (TC) (TCM.to) ConfCall dated August 14th on Seeking Alpha (as a sidebar we repeat; the only thing that SinkingAlpha has ever done to add real value to the marketplace is offer up this service, as before they came along you'd have to wait days and pay through the nose for transcripts), especially after receiving very interesting information from somebody who, let's say, has an intimate knowledge of the company's Endako mine. 

That's because, according to information reliably received, a lot of what TCM thought was ore is silicate encapsulated fine moly and is (I quote) "totally unrecoverable". The decision to run Endako on stockpile only  was blamed in part on the low moly prices and the need to cut operating costs, but that's only half the story folks. Unless TCM's scientist boffins come up with a new way of recovering moly, when the three year stockpile runs out that's all she wrote for the mine and after spending over $600m on that nice new mill, too. As it happens, some of those boffins inside TCM have apparently been trying to tell the stuffed suits at board level about this for quite a while but it's only now, when the caca hits the ventilador, that they're actually being listened to at last. Funny dat, innit? 

Anyway, ConfCall anal yst peoples on that TCM call yesterday, you missed a big chance to really blow that Loughrey guy out the water on this. Don't miss out on the 3q call, willyaz?

Disclosure: no position in TCM.to.

Barkerville Gold (BGM.v): We applaud the BCSC

This humble corner of cyberspace has been a vociferous critic of the Canadian market regulatory bodies for a long time, but today we need to give credit where due to the British Columbia Securities Commission (BCSC) for its decision to impose a cease trade order (CTO) on Barkerville Gold Mines (BGM.v) late yesterday.

The reason for the CTO is straightforward, but the fact that the BCSC has moved quickly and applied the rules as stand to BGM  is something of a surprise. A very pleasant surprise and hopefully just the first part of a chain of events that will see Frank Callaghan prosecuted and (hope against hope) sent to prison, but a surprise all the same. The terse CTO release from the BCSC today gave this as its main reason:
"A technical report for the Cariboo Gold Property, completed in accordance with the Act and regulations, supporting Barkerville's disclosure of the change in mineral resources at the Cow Mountain (the required record)."

Fact is, the 43-101 filed on Monday August 13th may have arrived (just a couple of hours) before the deadline for filing, but it did not support the June 28th NR, the one that started this whole bunch of shenanigans running and shot the BGM.v share price higher on heavy volume. That June 28th release claimed that the Cariboo gold project had an indicated (no inferred at all) resource of 10,626,100 ounces of gold. However, the 43-101 as filed Monday did not tell us how BGM.v and its now very suspect looking 43-101 compiler Peter George got to that figure. The technical report did not support the BGM disclosure of June 28th, but instead came up with different resource numbers for Cariboo which depend on whether you want to concentrate on indicated, indicated/inferred, uncapped or capped. Personally I prefer focussing in on the 4.25m oz indicated and 3.25m oz inferred capped numbers, but whichever set you use they do not add up to the 10.6m that BGM announced in the NR that shot the price higher. Period.

The BCSC made its position crystal clear to BGM on this point on July 10th as well. In its mail to the company the BCSC said that the news release must confirm the Company will file a technical report supporting its Cow Mountain estimates within the 45-day period following the June 28th, 2012 news release, and that it will promptly announce any material changes to its estimates that result from the audit or preparation of the report. So when BGM didn't do that, the BCSC slapped its CTO on the company.

This is a good thing for a first step and the ball is now in BGM's court. The company has to comply with its directive; it has to tell us how it got to 10.6m oz Au in the first place. If Callaghan, George et al can't do that, it will then be clear that the company lied in its June 28th release and somebody got rich (while others got poor) via ill gotten gains. It's at that time, if we get there, that we'll find out whether the BCSC really has grown a pair at long last because if Callaghan is a liar, he must be taken to court by the authorities and when found guilty of his lying, sentenced accordingly. What we saw from the BCSC yesterday is a good thing, as it's actually applying its own rules (much to the surprise of many, not just your author, according to mails received this morning) and actions of this sort will help clean up the stinking cesspool of the Canadian junior market. However, if Callaghan, George & Co can't justify the June 28th NR and then get off with nothing much more than a slap across the wrists months or years later, it will be just another another sordid chapter of an old book, not the start of a new and more pleasant story.

8/14/12

OT: Tuesday tune

Thank you HighlySalassee for the run though of Russian pieces today, which was capped with this:



It gets shared here because things of great beauty are best shared.

No need to come back to IKN

Your humble scribe here at IKN Nerve Centre™ did one of his very occasional back-house checks of readership flows, pageview numbers etc and notes the welcome arrival of plenty new readers, thanks for coming along (and apparently coming back, too). However, it's not necessary to keep on coming back to the blog to keep up with the doings and silliness here, as there are several other ways of getting your daily dose of IKN, such as...
1) The e-mail digest, which dumps all of the previous day's posts into your mailbox, first thing every morning (EST). A really simple way of one-stop reading all bog production, 100% free of charge, 100% reliable and as it's run by Google, no mail addresses ever go to third parties. Sign on for the service right here. 
2) The RSS feed, which is my fave way of keeping up with other blogs because the posts arrive in your feed reader realtime, one by one. Get your feed sort out via this link (or the button top right of course). 
3) Twitter, which I'm using more and more these days for comments and banter, not just the post feeds. I never thought I'd like it so much (I'm still very anti-Facebook) but it's grown on me to a surprising extent. Twitter's a great realtime resource too, so get the bug yourself by starting here at the IKN page.

So there we have it, three way to avoid all those annoying Google Adsense ads we run on the blog. Glad to have new readers on board. Toodle pip.

A blogger's guide to making your post on South America popular

You're a new blogger on South American matters? You want more readers? Well in that case you need to know just how to attract more viewers to your website and IKN is here to help you on that. Here we go with some handy tips on how to get those yearned-for eyeballs:

  • Want more readers from The USA? Mention Hugo Chávez.
  • Want more readers from The UK? Mention cocaine.
  • Want more readers from The U.S. State Department? Mention Hugo Chávez and cocaine.
  • Want more readers from Canada? Mention mining
  • Want more readers from Argentina? Mention Argentina
  • Want more readers from Chile? Mention Chile
  • Want more readers from Peru? Mention Chile
  • Want more readers from Australia? A long post about different beers for sale in the region.
  • Want more readers from Russia: Just mention something about girls, never fails.


Mojitos served, the end.


Especially for Iwnattos, B2Gold (BTO.to) 2q12 numbers

Good old stick and batman Iwnattos, dictator and overlord at Market Narrative, likes B2Gold (BTO.to) as do many others (including your author, but no position at this time) and rightly so, as BTO is a good little gold producer. So for his dee lek tay shun here are a couple of charts on the company after its 2q12 results were filed last night and also a snipped from the financials. Between these three things, we get a flavour for the three main themes of the BTO quarter (I think). First up is working cap, which dropped in the quarter. 

That's because the cash pile came in surprisingly light at $77m or so. But I wouldn't fret too much about this balance sheet item because the reason BTO has less cash is that...

...it's been spending oodles on its investments. As well as $5.068m in shares of Calibre Mining (that's the top item), BTO has been ploughing cash into just about all its assets, particularly the Nica mines (Libertad and Limón). This, of course, is a good thing. Meanwhile, the other main takeaway from the numbers can be seen (just about) in this P+L chart...

...which is that on an operations basis, BTO had a very good quarter. Production was up and slightly above target, but thanks to the previous production NR we knew that already. What last night's numbers told us was that BTO got those ounces out the ground very efficiently, spending just $28.853m on COGS (it was over $32m the two previous quarters). I'm guessing the pre-strip work undertaken by BTO previously is now paying off, but will be listening in on the ConfCall for confirmation of that.

So anyway, we're looking at a good quarter from Iwnattos's muse. The thing left to decide is whether its operations merit adding to an already pretty rich market cap. The valuation is already running 2 1/2 times equity, after all. BTO is a very good gold mining company, but everything has its price.

UPDATE: On trudging round the interwebs, I come across this Reuters report on the numbers entitled "B2Gold profit falls on higher costs", which shows you just how little the reporters actually understand about quarterlies and how little brain is engaged before they get to their keyboards.  Comparing net incomes YoY on a company like BTO is not the way to move forward, you freakin' dumbass hack, but worse is that your sub-ed didn't pull you up on this. People, you are supposed to be financial reporters so why are you so keen on demonstrating that you know fuck all about financials?


Chart of the day is...

...the gold/silver:



Just the last six months this time, because the lack of move away from this 57X 58X range is making the ratio boring.

In fact, the reason it's CtdD today is precisely because it's boring. Boring brings its own lessons to the table.

PS: By the way Barker[woofwoof]ville did manage to file its 43-101 last night (close to midnight won our sweep). I've downloaded mine already and the first thing to note is the drop in resource estimate, as we're now 4.25m oz Au indicated and 3.25m oz Au inferred, using the capped table (which BCSC wanted BGM to use). However, we're talking about a 2,877 (!) page document here and it's going to be a while before even experts find any devils in details, let alone a grunt like me. However, it's notable that the resport itself is only 50 pages or so long and the appendices go on forever here.

8/13/12

Greg Johnson has left the building

And so we bid a fond farewell to Greg Johnson, now ex-Pres/CEO of South American Silver (SAC.to), who has just been told that he has decided to resign by Ralph Fitch and Roman Mironchik (chik-chik-chik-chikkin, lay a lil egg for me). NR please!

VANCOUVER, BRITISH COLUMBIA--(Marketwire -08/13/12)- South American Silver Corp. (SAC.TO)(SOHAF) (the "Company") announces that Gregory Johnson has stepped down from his role as President and Chief Executive Officer and as a director of the Company effective August 13, 2012 in order to pursue other interests. The Company thanks him for his contributions and tenure as President and CEO and wishes him well.

It seems that the non-stop sophistry from Johnson on how badly the Mallku Khota project was...make that wasn't...progressing has now turned round and bit him in the nether regions but hey, he managed to get that $341k cash salary on his side in 2011 before anyone noticed. However, fear ye not if you're fretting about Greg's chances of being able to pay for his next square meal kind reader, because he now gets the chance to dispose of his 1,826,500 shares in SAC.to without anybody noticing. That's lucky, isn't it?

Barker(woofwoof)ville Gold Mines (BGM.v) is supposed to file that 43-101 today

What with it being August 13th today and all that. Here are options and odds

  • 43-101 to arrive during market hours: 10/1
  • 43-101 to arrive post-bell: 6/4
  • 43-101 to arrive just before midnight: 4/1
  • 43-101 to be delayed: Even money


Place your bets, ladies and gentlement.

Molybdenum prices slip under $11/lb

This chart from the Scotia morning mailer today:


And the last time we saw prices this low for moly was...

Ooh, early 2009 you say? And what about cobalt (also from the Scotia mailer today)?
Ouch. Why are Mo and Co ones to follow? Hint: Think about the steel sector.

Peru electricity demand update

Today we catch up on the stats for Peru's electricity demand. We follow this dataset because it's one of the better ways of back-checking the GDP data offered up by any country, so with Peru talking heads currently predicting a 2012 GDP growth of between 5.5% and 6% (depending who you talk to, with the government pithcing at the top end of the range of course) let's see how a bit of underlying reality stacks up against that. 

First the monthly demand chart, measured by end-user sales demand (we're customer driven, after all) and progress continues to be smooth and in the same upwards direction:


So when the numbers get crunched into year-over-year percentage change per month, this chart appears:

We see on the right that although the rate of change is slowing, the 2012 numbers do indeed justify the type of GDP growth number being bandied about for Peru in 2012. Not shabby in a soft year for world money and growth things. All data from Peru's MEM, which is where you're supposed to go for numbers like these.

Chart of the day is...

...zinc spot price, 12 months:


Looking a bit sick. And for those of you out there who are "young" and "trendy", by sick we don't mean "That LeBron dunk was sick!", we mean, "I've have a bad cold and have felt pretty sick all weekend".

PS: Totally OT, I'm really warming to blog The World Complex as it's managing to dust off and de-rust a corner of my mathbrain that's had scant exercise for a few years. The latest offering linked here is good brainfood


8/12/12

The IKN Weekly, out now

Tally Ho!

IKN171 has just been sent to subscribers. Hoepfully the service will benefit from my recent downtime as much as I did. Time will tell.

Bolivia: China to develop Mallku Khota (ex-South American Silver (SAC.to))

Here's a report that Greg Johnson of South American Silver (SAC.to) will enjoy reading, dated today, Sunday August 12th 2012 and here's the translation:
Chinese Company to Explore Mallku Khota
The exploration of the Mallku Khota deposit in Potosí will be put in the charge of The Department of Mining Exploration of China.
The president of the (state run) Mining Corporation of Bolivia (Comibol), Héctor Córdova, began conversations during his recent visit to Asia.
With the view to advancing negotiations, a Chinese delegation will arrive in Bolivia on September 4th but "preliminary conversations" have already taken place, said Córdova while mentioning that Comibol is looking at this form of help due to not having experienc in the mining of indium. Continues here
 And here's a song for Johnson, too:



dyodd