Iwnattos explains Dow Theory

And he does it well, right here. My fave line is...

you can ignore all blogs from now on

...because it's true. He also makes Business Insider look stupid along the way. Which is good. Because it's run by a liar and a crook. But seriously, the Iwnattos post does a good job in explaining the bones of Dow Theory. The real bones, not the neatly-selected-pieces-of-Dow-Theory that charlatans use to justify their stupid calls on the market. Go have a read

Five days of metals and miners; September 22nd

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).

The metals consolidated their upmoves from last week, while the PM producers had a modestly positive time of it. The interesting one is COPX, telling us that Benny's stimulus can't come through the system too quickly.

The Friday OT: Alabama 3; Mao Tse Tung Says (rpt)

The second in what may turn out to be an occasional series of repeating favourite Friday OT tracks of yonder, simply because I love them too deeply to resist any longer. Back when we first went with this one in June 2010, I wrote that it was, "One of the best live performances ever witnessed by a camera and then stuck on yootoob". That's reaffirmed today.

As anyone who's seen them live will tell you, they're total freakin brilliance. Everthanks to RickB and Amber for turning me on to the boatload of wonderful that is Alabama 3.

IKN's final post on the 2012 Venezuela elections

We're now two weeks and a bit from the October 7th vote that will decide whether Hugo Chávez Frías keeps his job or whether Henrique Capriles Radonski gets a new job. As the media bullshit chatter is already ratcheting up and is going to get a lot worse in the days left, IKN is therefore going to keep away from all the false polemics and liberty/tyranny/democracy/dictatorship/freedom/fair/fraud tosh and nonsense that your media channels of choice are bound to subject you to and make this post today our final comment on the subject until October 8th minimum. So for the record...

• I think Chávez is favourite and if you wanted a book number from me, I'd go for something around 75% chance. Purely seat-of-pants subjective stuff. Put another gun to my head and I'd go for Chávez securing 55% of valid votes come the big day. Again, guesstimate.

• However, this means that Capriles has about 24% more chance than any other candidate running against Chávez in recent years and his campaign shouldn't be written off. Henrique Capriles has run a good campaign, a smart campaign and has played to his strengths more than trying to attack Chávez on any given occasion. That type of slugfest would have favoured Chávez much more, so Capriles' strategic decision to keep away from the insult-swapping type of campaign has been a good one.  Bottom line: I'd consider it a surprise if he wins, but not a stunning surprise.

• But one 100% dead cert is that media coverage and anal yst comment is going to be all-but insufferable. World-and-his-spouse all suddenly experts on the intricacies of Venezuelan politics? Why of course!

• The final confident prediction is that on October 8th, the losers will be calling fraud. That, my fine feathered friends, is a given.

So, until October 8th and if you really have the right type of masochistic streak that insists you keep up with the BS show, Two Weeks Notice is as good a filter as any, I think.  

A flash update...

...was sent to subscribers about 10 minutes ago, before the opening bell this fine and sunny Friday morning (well, round here it is anyway). 

The Copper Fox (CUU.v) feasibility arrives today!

It must do, because CUU management is sure to keep its word. Because it's not a company run by a bunch of bullshit liars now, is it?

A propos...

Chart of the day is...

...Talisman Energy (TLM.to) (TLM) short position on August 31st and Sep 15th (the latest date for published data from the TSX):

What, up 9.15m in two weeks? Gosh, it's almost as if somebody knew the TLM CEO Manzoni was going to be canned on September 10th. By the way, on August 31st TLM closed at $13.74. Yesterday's close was $13.78. So scew you, Canuck inside trader.

A Flash update...

...has just been sent to subscribers, midday Thursday. It contains an interesting snippet gleaned from the wild yonder of the capital markets about a covered stock, but is ultimately a non-actionable event. 

Barrick (ABX) Pierina roadblock clash leaves one protester dead

Reuters got the word here, start of the piece here:

One person died and four were injured when police clashed with protesters blocking a road leading to top gold miner Barrick's Peruvian mine Pierina, company and police officials said on Thursday.

continues here

So how's that all-paper buyout going, Mr. Clive CEO?

Oh, that well?

Looks like the phrase "good paper" is subjective, does it not?

The single best junior mining trade in LatAm today

1) Buy Grand Colombia Gold (GCM.to) for what it's worth.
2) Sell it for what Serafino Iacono thinks it's worth.
3) The end

Copper Fox (CUU.v): Feasibility announcement any time now

Today or tomorrow at the very latest Copper Fox (CUU.v) will announce on its long-awaited feasibility study for Schaft Creek. And according to management, tomorrow is the very latest, the absolute deadline.

MILA: A damp squib

Hey, who out there remembers MILA, the "Mercado Integrado Latinoamericano" (or 'Integrated Latin American Market', if you insist) that was set up in 2011 to connect the stock markets of Chile, Colombia and Peru and give access to stocks of all three markets to all three markets?

Yeah, me neither. So when I came across this report in Colombia's always decent biznews site dinero.com it was interesting to note just how little it's being used by its three participants. Chart please!

So what we have here is August 2012's transactions between the three markets and clearly, the system was used mostly by Peru to invest in Chilean stocks. We also see that Colombians don't give a flying monkey about Peru or Chile. Also interesting is that of the 560 stocks available in MILA, over $2m of the $2.53m traded via the system was in just two companies, namely Chile's Entel and Colombia's Ecopetrol.

Since its inception MILA has seen a mere $25.4m pass its doors, a veritable damp squib of an idea that was fanfared to all and sundry in its oft-delayed creation period. Bottom line: People prefer NYSE.

UPDATE: Kind reader RW writes in to note that "the IKN meter" would have gone well with this post. True RW and what's more, it still does:

Rare earths: Look out below

A Reuters piece that caught mine beady lil eye starts like this...

Prices of rare earth elements, which tumbled after a speculative bubble burst last year, are likely to erode further as new supplies hit the market and exports edge higher from dominant producer China due to weak demand at home.

...and finishes like this:

"It isn't a pretty or happy place at the moment," said a London trader who specialises in exotic metals. "There's no blind panic out there, either to buy or sell, but people are very uncertain about what the future will hold and rightly so."

It's worth reading the whole thing because there are devils in details, e.g. the differences being seen in the heavy and light REE markets. So read it all here. 

Orko Silver (OK.v): It's bullshit time

Orko Silver (OK.v), the Mexico-based silver company run by scam merchants and pathological liars, is halted pre-bell today. Your humble scribe is guessing that these purveyors of dreams are about to give us the  new PEA. Let's see what kind of bullshit they lay upon us this time.

UPDATE: Oh look, it's a "superpit". Oh isn't that just super! Tyros, step this way...

Chart of the day is...

...Zinc, 12 months:

The big comeback.

Exciting news for Copper Fox (CUU.v) shareholders: The feasibility arrives tomorrow

According to company management, tomorrow Copper Fox (CUU.v) announces the results of its feasibility study for its Schaft Creek project.

It's actually difficult to believe that Tahoe Resources (TAHO) (THO.to) is down less than B2Gold (BTO.to) today

I mean, all THO has seen cut is its gains from yesterday. It's impressive to watch how the Canadian asshole bootlick brokerage and buyside parasite brigade will take the junior mining company's word as some sort of gospel on these things, preferring to simply believe everything the juniors say and do as regarding political risk in LatAm despite the junior industry's incredibly poor record for true disclosure and over-promising.

But hey, gotta get them retailers fully bot, right guys?

oh yeah, before the peanut gallery starts mailing in: No position in either stock at present and not planning on one in the near future, either.

Guat the hell is going on?

Dear subscribers,

I believe we have made this point on previous occasions as regards political and social risk in Guatemala, have we not?

Yours annoyingly, Otto

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sep 19, 2012) - Tahoe Resources Inc. (THO.TO)(TAHO) announced today that construction activities on the power line for the Escobal project and at the project site were disrupted by a mob intent on forcing the Company to cease construction. The 5.2 km power line and the mine facility construction project are fully permitted and are in compliance with all legal requirements.

The protestors are not from the local area. Authorities identified them as individuals transported into the area from outside regions, organized and funded by local and international NGOs. Protestors purportedly object to construction of the power line for a variety of reasons, ranging from baseless claims of negative health effects of electricity to unfounded fears of contamination caused by mining. Continues here

AAAAAAAAAAARRRRRRRRGHHHHHH!!!!!!!!

Sept 19th is International Talk Like A Pirate Day.

Today is September 19th.

Which can only mean....

TODAY IS INTERNATIONAL TALK LIKE A PIRATE DAY!

AAAAAAAAARRRRRRRRRRGGGGHHHHHHHHH!!!!

(and ramen to you all)

B2Gold (BTO.to) prints paper, gets production

On Sunday evening I wrote in reply to a subber and very nice person (yeah, you) who'd asked whether I was considering coverage on BTO (after he'd read the latest edition of The IKN Weekly). I replied that I'd been working on BTO pretty closely in the last few days and decided not to call buy on it at the current prices and for reasons why, here's one sentence of the mail I sent him in reply:

"The bottom line to BTO is that I can't see how to justify much more than the current PPS using the present and even a decently positive future. It's weakness is the lack of cash at bank, because if it wants ot expand and buy out these other jrs, it's going to have to do it via paper..."

So today we get this:

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sep 19, 2012) - B2Gold Corp. (BTO.TO)(BGLPF)(BGLPF)(NAMIBIAN:B2G) ("B2Gold") and CGA Mining Limited (CGA.TO)(CGX.AX) ("CGA") are pleased to announce that they have entered into a definitive Merger Implementation Agreement ("Merger Agreement") to combine the two companies at the agreed exchange ratio of 0.74 B2Gold common shares for each CGA share held, which represents a purchase price of approximately C$3.18 per CGA share and a premium of 22% using the 20 day volume weighted average share price of each respective company, and a 26% premium over the CGA closing share price on September 17, 2012 based on the closing price for the B2Gold shares as of such date. The transaction is valued at approximately C$1.1 billion.

The merger will be implemented by way of a Scheme of Arrangement under the Australian Corporations Act 2001 ("Scheme"). Upon completion of the Scheme, existing B2Gold shareholders and CGA shareholders will own approximately 62% and 38%, respectively, of the issued common shares of the combined company.

The combination of B2Gold and CGA will result in a merged entity operating the Masbate gold mine in the Philippines, in addition to B2Gold''s existing continues here

That's a lot of paper, Mr Clive CEO sir. Now, maybe the market will like this deal in BTO share price terms (for the size and all that), maybe it'll be kinda of neutral, maybe it'll be slightly negative to the PPS in the short term (fwiw my best guess right now, 90 minutes before the open) and maybe it'll hate it. But the call on BTO to be a paper printer was spot on, was it not, "J"?

Final thought: Why is it that the idiot mouthbreathers we know as gold bugs will rail and froth at the mouth about "fiat currency" and the way it gets printed into oblivion, but raise nary an eyebrow when the companies in which they invest do exactly the same to them? Just askin'...

Charts of the day are...

...on Peru imports:

After this post a couple of days ago, your humble scribe received a mail from reader 'RC' who made some insightful comments, but also noted that one of the reasons for the boost in imports is the importing of capital goods (bienes de capital) for the mining industry. In his otherwise very smart reply, RC's point here stuck out because it's one of the classic chunks of bullshit that is trundled out by the mining industry in Peru any time they feel the need to defend their activities. It's always "Oh, the boom in mining can also be seen in the massive new amounts of capital goods we're importing and aren't we wonderful" and all that. Well folks, as the charts here clearly show there has been an absolute rise in capital goods imports (cream colour on top chart) but the gain compared to the other sectors of import goods (consumer goods (bienes consumo), supplies (insumos) and other (otro)) is basically zero. This "capital goods is the reason for import rises is just another one of those truthiness canards that suit certain people and has been accepted as fact by those who haven't really checked the figures.....i.e. 99% of journalists.

End of wonky CotD that only five of you will care about.

Must share Occupy photo

It's from here and this is it:

Coming to you live and direct from chapter one of 'Cant Make This Shit Up'.

Update: Apparently you can make this shit up. Comments kindly received note that it's a movie promo photo (though whether it was a set-up for the snapper or taken candidly is unknown). Oh well...

Gregorio Santos is going down

It's been pretty obvious for quite some time that the Peru media is out to get Gregorio Santos, regional governor of the Cajamarca region and central figure of the anti-Conga protests that have seen the project put on hold. But even considering the media bias against him, it looks like the story out today will be enough to undermine his position and if Santos goes the whole anti-Conga edifice will crumble.

National newspaper Peru21 (it's a kinda of semi-scandal paper from the same stable as national benchmark El Comercio) runs this report today of a recorded telephone conversation betwenn A.N. Other and a certain Wilson Vallejos, close associate of Gregorio Santos, in which Vallejos says that he's the go-between for Santos in a money siphoning scheme. Vallejos, already identified as the beneficiary of a 90 million Soles (U$34.6m) contract from the Cajamarca regional government, said that he0s the one laundering all Santos's money and that they'd alreadys et up a bank account in Pamana so that Santos could get his share.

Hilarity and fun is sure to ensure.

UPDATE: By popular demand, a translation of the most damning part of the eavesdropped conversation. There's tons of slang in it, but a fair gist translation is this:

WV, "No, yes, because now I have to give that fool (i.e. Santos) the cash and I'm the one that's laundering all the money for that fool. Fuck, I'm scared that later on they start screwing with me"
I. "Dude, where are you sending the cash?"
WV: "We've already opened an account in the SBS branch in Panama"

And by the way, to all the mining media that will pick up on this story and run with it after reading it here: Just do what you always do and give no credit to IKN and then wonder later why the world hates the way you do business, fucktard dumbasses.

UPDATE: Santos denies everything and says he's only ever met the guy Vallejos two or three times in his life. And if you think that'll be the end to this story, I have a bridge you may be interested in. Santos is now a marked man and if Peruvian history tells us anything it tells us that when a government wants to extract a thorn in its side, it does so. Every time.

Chester Millar bails on Goldgroup Mining (GGA.to)

Can't blame him for selling every single fully paid up share of the company he owns.

After all, he does have a decent reputation in the mining business.

However it would have been nice for him to have filed the sale earlier, so that we humble grunt knew what he must have known about the permitting snafu at Caballo Blanco while the stock was still up at 50c. Just sayin'

Venezuela's election (from IKN176)

In IKN176 on Sunday, we dared to do what very few English language commentators have done in the last seven days; we noted and commented on the last opinion poll on the Venezuelan presidential election (October 7th is the big day) delivered to the public by Datanálisis, the least worst of the polling companies in Venezuela. Here's that note, as seen by subscribers last weekend:

Venezuela: The latest Datanálisis poll puts Chávez comfortably ahead

Wednesday saw the dissemination (15) of the latest (and likely final) poll from the best of a bad bunch Venezuela polling company Datanálisis and the news is that there has been little change in the support for the two candidates for President, challenger Capriles and incumbent Chávez, which means that Hugo Chávez should now be considered favourite for the October 7^th election. The poll, conducted between September 3^rd and 8^th on 1,200 people from all socio-economic walks of life in Venezuela and with a reported margin of error of 2.82%, put Chávez on 43.1% support for the vote and Capriles on 30%.

That headline number is good for Chávez and there’s little comfort for Henrique Capriles in the other details either. Of the Chávez 43.1%, no less than 99.4% consider themselves “hard votes” for the current President who will not change their mind under any circumstances. As for the undecided, Datanálisis reported that of the 26.9% who responded that they didn’t know who they’d vote for or wouldn’t vote on the day (via spoiling ballot, not going to vote, etc) 10.7% were inclining towards Chávez and 6.4% were inclining towards Capriles, which if translated into votes on the day would see Chávez winning 53.8% of the popular vote and be called clear winner.

 

Finally, another interesting datapoint in this opinion poll was that 41.7% of those questioned said they considered themselves “Chavistas” (i.e. Chávez supporters, or pro-current government), just 16.1% considered themselves “anti-Chavistas”, 38.6% said they were neither one nor the other while 3.6% did not respond. This strikes your author as a very different make-up to the type of coverage we get about Venezuela from both the national and international media.

The reason why the Datanálisis poll got very little airtime amongst the hi'falutin English language press that cover (or at least pretend to in their mediocre way) should be clear by now; Datanálisis wasn't telling them what they wanted to hear, i.e. Capriles is in some way close or with reasonable chances of winning the vote, so the reaction has been of the LalalalalaI'mNotLisnin variety. This despite the fact (not opinion, but fact) that Datanálisis has by far the best and most accurate track record of any Venezuelan polling company over the last 15 national votes in Venezuela (and that in turn despite the fact that the polling company's owner is a well known anti-Chavista, so some kudos deserved for keeping it real). Instead, the bullshit Venezuelan national and bullshit international press have been lumping in the reliable pollsters with the silly and very silly ones on either side of the fence and saying generalized things such as "oh, polls are  saying widely different things right now". But don't be fooled, ladies and gentlemen, Capriles and his lapdog press coverage al fear the numbers out of Datanálisis because the lack of bullshit from that house makes a startling change from the crap spewed by both left and right in Venezuela.

Bottom line: Chávez is favourite for the October 7th vote, so just get used to the idea. And don't kill the messenger.

Fortuna Silver (FVI.to) (FSM): As subscribers already know...

...late last week I got rid of the last chunk (and a fairly chunky chunk it was) of Fortuna Silver (FVI.to) (FSM) from my portfolio at prices at (well, slightly above in fact) $5.50. Thing is, it looks like company CEO Jorge Ganoza agrees with the assessment of this being a good spot to sell:

But we understand the need for Ganoza to sell. After all, his pure cash salary/bonus (aside from share and options awards, that is) only came to $1.3m in 2011 and it's hard to get to the end of the month on those kind of wages. Every fifty grand helps, right? DYODD, dude.

Chart of the day is...

...the Gold/Silver Ratio (gsr), year to date:

It got to 50X back there....then it didn't. Now it don't. Innit.

Kinda looks like to me that Peru's economy is starting to overheat and it's going to see its currency start dropping and if it does, it'll be inflation at consumer level

So I was checking out the macro scene in Peru and at first sight you'd normally be happy that the percentage total of exports from mining is dropping, with less than 52% coming from its metals trade in July which is the lowest in a long time and well down on that 60% average

But the problem is that Peru is getting all modern and fancy and middle class expansive, so it's importing more and more and more stuff from other places. So with the drop in mining exports (and the other products it sells not moving much in aggregate terms) we're now at the point where Peru is importing more than it's exporting.

Which makes the trade balance look like this:

Now that's ok as long as your currency keeps up with or beats the dollar, because imports stay competitively priced in local currency terms that way and inflation isn't fed into the system. But if the trade imbalance continues, as day follows night then the Peruvian Nuevo Sol (PEN) will reverse its upwards trend against the greenback and start weakening. Which will mean that fancy new fridge that José Publico has his eye on suddenly gets just that bit more expensive. The rest of this story you know.

Moral: Middle class Limeños that are dead set against the expansion of their mining industry are going to have a helluva lot more to complain about if they get their way. Dumbasses.

Goldgroup Mining (GGA.to) at Caballo Blanco: "You can't fire me cos I quit"

What does one do when the Mexico enviro people are about to hand down a negative ruling on your project? Simple; you withdraw your application and avoid the unpleasant letter arriving in your mailbox and then you can still tell all and sundry that your project is just fine and dandy six months down the line. When it obviously isn't:

VANCOUVER , Sept. 17, 2012 /CNW/ - Goldgroup Mining Inc. ("Goldgroup" or the "Company") (GGA.TO),  on September 14, 2012 deferred the evaluation of the Environmental Impact Assessment (MIA) for its Caballo Blanco mining project in the State of Veracruz by the Mexican Ministry of Environment (SEMARNAT).

Mexico is going through a change in Federal Government and Goldgroup recognizes the importance of working with the transitioning team and the new authorities to integrate their requirements for the development of the Caballo Blanco project.

President elect, Mr. Enrique Peña Nieto, has made public his interest to promote investment and enhance the development in the mining sector, with strict compliance to the laws and regulations, with a strong commitment to sustainability and the environment.

Deferring the evaluation and approval process of the MIA complies with Goldgroup's objective of working further with the relevant authorities to ensure yada yada continues here

Or in the words of Graham Chapman...



dyodd

Chart of the day is...

...the US Dollar index (USD) because it continues to be the whole ball game:

So, my bright and glistening gold bug friends, you should continue to look beyond the price of silver and look at what's happening to the dollar to take your cue. Sometimes the dollar's position to the market is merely important but in other periods, such as right now, it's a case of 'the rest is noise'. Today's bounce isn't unexpected and it'll take a while to get down to the 74s we saw at the peak/trough of the action last cycle...all good things to those who wait.

The IKN Weekly, out now

IKN176 has just been sent to subscribers, yet another batch of brainlessness and stupidity with which your fancy be tickled, kind audience. Nice charts, though.

I'm off to read stories to a couple of small people I know. Scuse me.

Peru Presidential approval ratings: Rich people love Commies

The regular monthly numbers from Peru's benchmark pollster Ipsos/Apoyo that measure Presidential approval ratings are out and here's the updated chart:

President Ollanta Humala scores 41% this month, a couple of clicks up on the sag point noted last month but still under the 50% barrier and a long way from the honeymoon numbers last year. And if we sift through the secondary data, this chart built from the September 2012 poll numbers makes for very interesting reading:

Hey, you remember when all the world was worried sick about that Commie bedwetter Socialist Ollanta coming to power in Peru and nationalizing everything and stealing from all the nasty rich people and turning Peru into Cuba and all that? My, how time flies....