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Which will be worth more at end 2015?

10/6/12

Dominic Frisby's new book; a sampler

Back on September 26th this humble corner of cyberspace pointed your way over to the new book by Dominic Frisby. The response was good (and I've ordered my own, no freebies here) but the pre-order system means that Frisby is still about half way through the process, about 400 people away from getting the edition printed and sold. Go here for the book's promo and order page, by the way. You get to read about what it is and who Frisby is as well.

Which is where you come in, because I don't want my money back (what happens when an order isn't fully filled), I want to pay for and read my copy of the book. So what I want you to do is go over to the page, read up on Frisby (a more than interesting person, with a CV that can safely be described as eclectic) and put your order in, too.

To help you make that decision, there's now a free sample of the book available on this link right here. You go over, click the audio thingy and hear Dominic's dulcet tones read from the manuscript, an offer you can't refuse. So go over, listen, agree with me that it's going to be worth it, and help this one along by pledging for the book too. You know it makes sense.

UPDATE: Apparently the link to the free sampler is down, temporarily at least. If that's the case for you later, then go straight to the book page here to find out more.

UPDATE 2: Audio book sample link (in which you get to hear Frisby narrate chapter one) is now working again. This is good.


Free sampler here

Five days of metals and miners; October 6th

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).


All quiet on the western front, with the second week of meh after the big Bernanke bounce. It almost got interesting to the downside on Wednesday for the PM stocks large and small, but buyers came back on Thursday. Interestingly, the US 7.8% jobs number didn't do much for the sector, with only lukewarm ike even from the industrial metals.

10/5/12

The Friday OT: INXS; Disappear

IKN gives you Michael Hutchence, the quintessential male lead singer. We're closing in on 15 years since his untimely death and that's slightly difficult to take in round these parts.



Everyone except Hutchence shows their age in this (including the video director and their editor), but the main man has that timeless thing going on.

Barrick (ABX) at Pascua Lama are liars

Barrick (ABX) has repeatedly claimed that its work at the Pascua Lama gold project on the Chile/Argentina border does not affect the nearby glaciers. For example, this is how Barrick's Vice-President of Corporate Affairs for South America, Rodrgio Jimenez Castellanos, explained the situation after a recent court ruling on Argentina's so-called "glacier law" on July 3rd:
"We are in the process of evaluating the text (ruling). However, it's important to highlight that our activities are not carried out on glaciers and that Barrick complies with all environmental permits, including the provincial legislation for the protestion of glaciers."

That's just one of many (peruse this EngLang Google search return at your leisure, oodles to choose from) that have ABX saying the same thing all the time; Pascua Lama doesn't affect the local glaciers.


Here's a photo from Pascua Lama this week:


So ABX is a bunch of liars about Pascua Lama. Now you just need to decide if you care.

Resource Capital Fund of Denver is suddenly all interested in this humble corner of cyberspace

No end of hits on that post earlier in the week exposing Bharti's bonus payments plans at Sulliden (SUE.to)....hmmm, wonder why? Must be about that spat they're having with Forbes Coal (FMC.to) and the way that management strategy at Sulliden ties in. Just thought I'd give you a headsup Stan, try to make up for the $20m in bonuses you've had to leave in the cash box (til another day at least).

Jose Mourinho talks about Mario Balotelli

Enough serious stuff for one week. This is good.


The world's worst central banker

I loved this note by L Randall Wray and hope you do, too. Read it carefully, there's plenty to enjoy.

10/4/12

Schemers scheming, thieves thieving, teasers teasing (etc)

If I may suggest, good friend Gary, this is not a new phemonenon.



So if we're going to consider these matters, let's at least do it via a well kicking choon.

More on Dev Randhawa of Fission Energy (FIS.v)

The post on Dev Randhawa, Chair & CEO of uranium junior Fission Energy (FIS.v) that we ran earlier in the week elicited a bunch of feedback, with most of it saying "yup, he's like that", but there were some that defended Dev and cast doubt on the reliability of he story we linked to as well. Then another mail arrived the day after the rush, this time from someone I consider a friend. She'd never told me about any brush with Dev Randhawa before so I asked her to write a little script on what happened to her, one that could be used here on the blog. She agreed to do that and here's what she wrote (and yes, she's remaining anonymous but I personally guarantee that this is one very reliable and trustworthy lady):

I met Dev at a conference a few years back, and my first impression was that he seemed to fast-forward through the stages of conventional friendship/acquaintance, to the point that I thought to myself, did I meet him some other time? Have we been introduced? He invited me out at the end of day 1, I declined, but he asked for my card. He immediately texted me, asked for my BBM contact. Sigh, what an idiot I can be, not wanting to insult him, I gave it to him. Chump. He started BBM'ing me all that night, non-stop, I had to turn my phone on silent. I honestly can't remember the subject matter, most likely flirtatious bullsh*t. Stuff I had to delete just in case my boyfriend picked up my phone one day. Then on day 2 he started showing me photos of him in a private jet, and started the name dropping "I'm so rich and cool" routine. He mentioned his wife, and made it seem like he had an open relationship of sorts. He never got angry at me, never sent mean texts- but he continued to message me sometimes late at night, and tried (failed) to hook up for drinks when he was in town. I feel like he isn't the worst douche bag out there, but he's one to be aware of. I feel sorry for him now, knowing that this is some sort of pattern. I feel far more sorry for his family. Lesson learned on my part.

So what happened with my friend closely matches the story revealed the other day, with the clear difference that Dev didn't get aggressive or insulting. But he did start to quickly pester my friend just after first contact, he was sexually suggestive and the message pestering continued late into the evenings. And to answer a couple of queries as to why I'm posting this follow-up, it's simple: The man is a sex pest who has a pattern of behaviour that needs to have some light shone on before he does some real damage. It's also to highlight the quality of person you're relying upon if you decide to invest in Fission Energy (FIS.v). If you still feel like defending Dev, certain people, go right ahead. You'll be in a small minority.

Gold Resource Corp (GORO): Can't help but think...

...that the market is a leeetle leetle leeetle bit nervous about the production figures GORO is due to release next week.


Can't help but think that the market's right to be nervous as well. Anyway, we'll see next week.

The one thing to take away from all that Sulliden (SUE.to) hoohah yesterday

The piece of useful, actionable information to come from yesterday's chain of events is that employees of brokerages are too damned lazy to read the regulatory filings. If I were a team leader in any one of the houses this morning, I'd be threatening the anal ysts in my charge with the sack if they didn't get off their overcomforted, overpaid, overfed asses and do the basic back reading on the companies they supposedly cover. The information on SUE.to's bonus scheme had been on SEDAR an age, but nobody with buttons to push had read it, that's pretty clear. 

The bit I like about this is that lil me and lil you, us retail investors, can get an advantage over these $1000 suit wastes of space. Read the filings, people. 

Chart of the day is...

...soybeans, monthlies since 2004:
 
  • The rise in price of soybeans is from higher demand, which is outstripping the higher supply from South American (Brazil, Argentina, Paraguay, other) expansion
  • The demand comes from China
  • China imports soybeans from South America because it can't grow enough on its own land
  • China doesn't have enough water to do that
  • Ergo, China is importing concentrated water more than soybeans, which are just the carrying vessel
  • Soybeans are a proxy to the price of water. 
  • Water's never going to get cheap again.
  • Neither are soybeans.
  • End

10/3/12

Sulliden (SUE.to) cancels its bonus scheme

Right here the link, right here the text:

Sulliden Terminates Milestone Bonus Plan

TORONTO, Oct. 3, 2012 /CNW/ - Sulliden Gold Corporation Ltd. ("Sulliden", or the "Company") (TSX & BVL: SUE) (OTCQX: SDDDF) announces that based on discussions with its shareholders, it will not be proceeding with the milestone bonus plan outlined in the Management Information Circular dated September 5, 2012.
The Board of Directors felt that a milestone-based incentive plan would align management focus and shareholder value with a view to the best interest of the Company. However, in light of shareholder input, the board has decided to terminate the plan.

"An ah wudda gotten away with it too, if it hadna been for you meddlin' kids an' that there dawg"


UPDATE: And Iwnattos does a nice job of the Ottotrans, so that we don't have to. Right here, on this link.

Shine a light

Here's a clip in which Canada's BNN (which used to be called ROB TV, a far better name for a finance and business channel) cites this humble corner of cyberspace's post on Sulliden (SUE.to) today and helps shine a light on the way in which Stan Bharti goes about his business. Minute 5:30 and onwards, if you want to get it down. 

Considering Mariano Rajoy's political strategy

After careful consideration, it seems that Mariano Rajoy, Prime Minister of Spain, has deliberately made himself as unpopular as possible by promising the completely untenable "no tax rises" to get himself into office, then immediately raising taxes and putting in place a draconian austerity plan that has made him, in the space of less than one year, the most unpopular head of government in modern times in Spain. And he's done it all quite deliberately too. The only possible answer as to why is that when he officially recognizes his homosexuality (an unofficial datapoint long understood by Spain political insiders) he will actually gain popularity for being honest instead of losing popularity from his right-wing party base.

Either that or he's a total twat.

Candente (DNT.to): An interesting news report

Dating from one month ago, it's a balanced report of the situation around the vote that happened on Sept 9th last weekend and suggests that the vote was done in a responsible manner, that locals consider the previous vote (the one that DNT.to says gives it its social licence) was fraudulent, that the locals had an oral agreeement with the Peru Ministry people that the Sept 9th vote would be recognized and if it wasn't (and so far it hasn't), the government was basically asking for a social conflict.



Spanish langauge, 3:38mins long. And if you don't speak Spanish, reflect on the disadvantage while the rest of us get wiser about what'sgoing on in Cañariaco.

Mining PRs and The Ottotrans, part 63


Another foray into the weird and wonderful world of the junior mining company news release. Today we examine the NR out of Exeter Resources (XRC.to) (XRA) this morning, the first since its VP Corp Development "was resigned" (from XRC and other Yale Simpson companies as well, all on the same day) and succinctly explain in our own special way the important information that you, dear and kind and good-looking reader, need to glean from the missive. Anyway let's get on with it.


This is what they wrote:

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct 3, 2012) - Exeter Resource Corporation (NYSE MKT:XRA) (NYSE Amex:XRA) (XRC.TO) (EXB.F) ("Exeter" or the "Company") is pleased to provide an update on the Caspiche gold-copper project in the Maricunga region of Chile. Recent activities have focused on enhancing and advancing the necessary engineering studies for the potential development of the extensive, near-surface, copper-free, oxide blanket at Caspiche as a relatively simple heap leach operation.
Activities completed include the following:
  • An engineering study considering the feasibility of a power line extension from the nearby Maricunga mine supply to provide power requirements for a potential oxide heap leach operation.
  • A geotechnical evaluation of the proposed Caspiche mine site, focused primarily on the footprint of the oxide heap leach operation.
  • A hydrological and hydrogeological study on the Caspiche area, focused on the heap leach operation but also, where applicable, incorporating the overall mine (oxide plus sulphide) and process plant footprint.
Engineering Study - Power Line Extension:
Previous studies on the Caspiche oxide deposit considered that power would be supplied from generators installed at the project site. Exeter contracted POCH, an engineering group based in Chile but with offices and operations in Mexico, Colombia, the USA and Australia amongst others, to complete an engineering study to consider the feasibility of extending the existing Maricunga mine power line to Caspiche, a distance of 12 kilometres. The line would be used to supply power initially to the heap leach operation.
The cost of the extension of the power line and all associated electrical infrastructure and substations is estimated to be in the region of US$12 million ("M"), approximately US$10M less than that assumed in earlier studies utilizing on-site generators. More importantly, grid power would provide cheaper electricity to the operation. 
The study includes the following key conclusions:
  • There is sufficient capacity in both the existing substation connected to the National grid and the power line to the Maricunga mine to carry the additional load estimated for the Caspiche heap leach project.
  • The power line extension would follow a reasonably smooth corridor and as such there are no additional construction constraints over and above those associated with the altitude at which the power line would be constructed.
  • The power line corridor takes consideration of potential future installations associated with the larger concentrator project and does not interfere with them.
Geotechnical Evaluation:
Knight Pièsold has completed a geotechnical evaluation of the Caspiche project area, which included a field campaign of 43 trenches, 18 drill holes and collecting some 90 samples. The objective was to test key sites to evaluate their suitability for process facilities and heap leach pads, amongst others.
The study conclusions show that the project can be built using conventional construction methodology with key parameters of:
  • Conventional cut and fill slope angles ranging from 1.5 - 2:1.
  • Earth fill slopes of 1.5:1.
  • Foundation thicknesses of 1m or greater depending on size of structure.
  • Compaction to be 95% of modified Proctor maximum dry density or to a minimum relative density of 80%.
In addition, the study calculated a preliminary estimate that more than 2,000,000 cubic metres of material suitable for concrete aggregate is available, largely eliminating the need to locate aggregate sources outside of the project construction area.
Caspiche Hydrology and Hydrogeological Study:
The study, conducted by Schlumberger Water Services ("SWS"), was focussed around the heap leach project and open pit, although consideration has been taken of the overall project footprint where applicable. SWS used Exeter''s water level monitoring measurements from 24 drill holes, drilled two additional hydrogeological holes, carried out a field testing program of slug, packer and pumping tests and fitted 2 drill holes with vibrating wire piezometers for long term monitoring of water table changes.
Preliminary report conclusions include:
  • A mean annual precipitation of 113 millimetres ("mm") was determined, of which 67 mm corresponds to precipitation as snow and 46 mm to precipitation as rain.
  • At the latitude of the Caspiche project area, the bulk of the precipitation falls during the Chilean winter. Summer precipitation rates are low, reflecting the weak nature of the Bolivian winter effect at the relatively southerly latitude of the Caspiche study area.
  • The hydrological modelling indicates that inflow to the surface of the waste rock dump is between approximately 0.6 and 1.08 litres/second (annual average) for the mean annual precipitation.
  • The rate of water infiltration from the waste rock dump to the underlying groundwater system is very low. At the end of operations the dump would be capped, or alternatively measures put in place to remove snow cover from the dump surface with the possibility of reducing infiltration to zero.
Water Exploration
Exploration drilling for a new water source dedicated exclusively to the Caspiche project began in May before being curtailed by weather. A news release specific to water exploration drilling can be expected.
Exeter''s Unique Position
Exeter Chairman, Mr. Yale Simpson states: "Exeter is in a unique position for a junior explorer. We have a world class gold-copper asset in an excellent jurisdiction, $57 million cash and no debt. In my view the current share price does not reflect the potential future value of the Company, a value that, if realized, could well be a multiple of our current valuation given a further improvement in metal prices and economic conditions. Another Caspiche-size deposit has not been found for years, simply because they are increasingly scarce in a world starved for natural resources."
Mr Jerry Perkins, Vice President Operations a qualified person as defined in NI 43-101, is responsible for preparing the information contained in this news release.
About Exeter

And this is what it means:

No water = no mine



x

Sulliden (SUE.to): In which IKN explains why you should never invest in a company run by Stan Bharti

The short explanation is that Stan Bharti and his Forbes Manhattan cronies only care about inserting the maximum amount of banknotes into their own pockets at the expense of others. Here comes the longer answer.

True with the very recent example of Aberdeen International (AAB.to), which is well documented in this script (and here's how the piece starts):
How to Pocket $5MM For Losing Over a Quarter of Company’s Assets in Only Six Months

It was a tough year to be a shareholder of Aberdeen International ( AAB.TO). In the first six months of 2012 the net loss amounted to over $26MM or over 25% of the assets, the net asset value (NAV) at the end of the period was less than $72MM (from $136MM in the early 2011), the share price declined 40%, and the market cap dropped under $35MM. But while shareholders felt the pain, the management was doing great: “salaries, consulting, benefits, and bonus” increased sharply compared to prior years: for the past six months it was $5,459K compared to $600K in 2011 and $798K in 2010. Most of the difference was due to increase in the “key management remuneration” which added up to $4,870K in benefits and shares – 7% of the NAV and almost 15% of the market cap - in just six months. By any reasonable measure, the “key management” awarded itself compensation that is way out of proportion to company’s overall performance or assets.

Aberdeen is lead by Mr. Stan Bharti who is not a stranger to excessive compensation questions. Only this year a similar situation took place at Longford Energy, where Bharti-led management gave themselves seven figures bonuses before being finally unseated by dissident shareholders. And at Bharti-led Forbes and Manhattan Coal ( FMC.TO), where Institutional Shareholder Services (ISS) just this month highlighted excessive executive compensation issues and shareholders are fighting to replace the board (1).continues here

And now Bharti's hit mob are about to have their jolly way with the treasury at Sulliden (SUE.to), another F&M company. On October 5th (that's this Friday) the AGM gets to vote on this brand new bonus payments scheme cooked up in cahoots and as the Bharti companies have their votes locked down, you can bet the house it's approved.


So let's see...

As SUE.to now has the M+I resource at 2.438m oz gold, that's 1.548m oz difference and good for a $2.3m bonus to the pool of directors.

As for the inferred resource, that's 3.256m oz and apparently good for $2.9m in bonus payments. To add insult to injury on this one, nearly half that inferred total comes from the sulphide resource and nobody has a clue as to whether that will be economic or ever mined.

Next, the IRR bonus, which is a crock of shit because we don't know whether it's based on pretax or post-tax for one thing. Not only that, but any fool can offer up a high % IRR just by changing the gold price assumptions. In the recent feas study results, SUE.to offered us a 52.2% IRR which suggests that directors get to pay themselves $2.1m in bonuses.

Next, these jokers get $2m just for handing in an EIA to the Peru government! It can be a total crock and get rejected, but that doesn't matter, ka-ching $2m, but if it gets approved, it's another $2m in bonuses.

The next line items are no less audacious but speak for themselves and mean SUE.to directors get $12m more to carve up amongst themselves if the mine gets to commercial production.

And then note down the bottom, that they're not that worried if the share price goes up. Cash is king in Bharti's world, but if by some miracle they haven't smashed the retail holders into tiny bits by this point, they can award themselves a bonus on share price performance, too. 
And as for that share price performance...


Down 35% in the space of a year...yup, that's what earns you $7m in bonuses in World of Bharti.

In short, on Friday October 5th, SUE.to will vote and pass the resolution that immediately puts $7.3m of company cash into their back pockets, another $2m by the end of the year when the EIA is handed in and a potential to add $14m more if (big if, considering its location in Cajamarca) it ever gets off the ground. The moral of this story: Don't let Stan Bharti and his band of self-serving lackeys rip you off and take your money. Let somebody else be their patsy.

UPDATE: Best mail feedback so far comes from reader 'P' who IDs himself as a shareholder in SUE.to and then goes on to say:

 "...I knew nothing about this! Why didn't my broker tell me about this?!"

That, reader 'P', is a very, very good question. However, if I were you I'd ask your broker about it rather than this humble scribe. And by the way, just to be 100% crystal on this I have no position in SUE.to, not long not short not anything. My only opinion on this stock "avoid like the plague" and I take my own advice.

10/2/12

The Dev is in the details

Dev Randhawa sounds like an interesting dude, what with his moving and shaking in the Vancouver junior mining world and his current position of Chair & CEO of Fission Energy (FIS.v). He's also the subject of this most interesting biography found on this website and dated from just a couple of days ago. We strongly recommend that you click through to read the whole piece, but here's a sample to get you in the mood:
"Know MANY women who have met the dirt bag only once while out at public functions, and Dev will coyly ask for a business card, then message the woman off the hook asking her to meet him so he can “do dirty things to her” because he “knows she is a naughty girl”. This “play boy” is ultimately a drunk looking to sleep with younger women as clearly no woman his age would dare give him the time of day (no wonder he’s still single) and he thinks his boasting and exaggerations will attract a younger woman, misunderstood as a complete idiot. When he gets rejected (because how hard would it be to turn down this hairy, 5foot ape), he will blast the woman’s phone with nasty, insulting texts, calling them “f*ck heads”, “dum b*tches” (his spelling, not mine), and continues here

Fun guy, no?

Update: I'm getting some very cool mails by way of feedback from this post. I wish I could share but on this one sorry, can't really happen. What I can say is that the person who wrote the above is not alone in her negative judgement of Dev Randhawa, of that there is no doubt. But she did get one thing wrong, as apparently Dev is a married man.

Chile's under secretary of mining resigns

So there was this lithium tendering in Chile recently and SQM won the contract but then there was a lot of fuss and now the whole process has been thrown out and we're back to square one on the Li contract but because of the snafu Pablo Wagner, under-secretary of mining, has resigned.

So there you go, all up to date.

Lydian International (LYD.to) from IKN178

Sometimes in the Weekly I write up on companies that I feel are interesting for you guys out there without them being personal purchases, because we all have different needs as investors. An example here, the piece on Lydian International (LYD.to) from last Sunday Sept 30th edition of The IKN Weekly, IKN178. I'm not a buyer of LYD because at the moment I'm a buyer of producer names, not explorer names, but apart from that....well, read for yourself.


Thoughts on Lydian International (LYD.to)
Here’s an idea for those of you looking for an exploration play and to start with, here’s a five year chart of the company, Lydian International (LYD.to).
 
I personally have had LYD on my radar since late 2009 when Mickey Fulp reco’d, liked and owned the stock (by way of full disclosure, at that time I briefly owned it and made a bit of money on the trade too, but it was never a big position, it was taken as a shorter-term trade and I haven’t owned it since). Fulp eventually dropped coverage of LYD after watching company officers make some pretty chunky insider sales (a bad habit that the company has basically kicked, glad to say) at the time, but the coverage baton was picked up by Brent Cook who has championed this company to anyone who cares to listen for over two years and also managed to get in mostly before the big ramp that took it from $1 approx to as high as $3 in mid 2011. But saying that, it’s also fair to say that LYD’s share price hasn’t really done much more than track sideways for two years and bumble about inside a $2 to $3 range. Cut to today, and the Friday close of LYD at $2.25 means the company has a market cap of $281m (124.87m shares out, 132.99m shares fully diluted as at 27th September). While considering corp structure, we also note that its $37.8m in cash at bank (that puts working capital at an IKN estimated $34m) is more than enough for the company to move forward comfortably and as for the people on board, they come with high reputations (e.g., Marc Henderson is a director and that’s enough on its own for the company to pass muster).
 
So anyway, up to now I’ve liked and watched the company without ever getting involved and the two main reasons for following it are simple, Messrs Fulp and Cook. When those guys say “Look, this Amulsar project is a good gold deposit with growth upside and cheap mining parameters for eventual production”, I listen. But alongside those two, I think that we’re now at a moment when there’s more to like about LYD as recent newsflow from the company has been more than interesting. In particular, there are two pieces of news that catch the eye:
 
1) On September 5th LYD announced (21) the findings of its 43-101 feasibility study (led by KD Engineering and featuring a team of third party compilers). Here are the bullet points that came in the NR to get those of you unaware of this company up to speed
 
·                       Proven and probable open pit mineral reserves of 2.26 million ounces gold and 9.63 million ounces silver
·                       Average life-of-mine (LOM) waste to ore ratio of 2.23:1 (1.80:1 years 1 to 3)
·                       12 year LOM with expansion in year four from a nominal-ore feed rate of 5 million tonnes per year to 10 million tonnes per year
·                       Steady state annual gold production for years 1 to 3 of 118,341 ounces per year and for years 4 to 12 of 186,047 ounces per year via heap-leach processing  
·                       Average LOM cash operating cost of $468.5/oz
·                       Pre-tax net present value (NPV) of $646 million at a 5% discount rate generating an internal rate of return (IRR) of 27.7%
·                       Estimated start-up capital cost of $269.6 million
 
Those are good numbers, ladies and gentlemen, with plenty of the conservative-type pitches and assumptions a guy like me appreciates reading. Below the headlines and in the details there’s plenty to like, too (the 43-101 is filed on SEDAR, date September 7th, and is required reading for those now interested). The project has a fast capital payback, produces an average of 200,000 oz annual over 12 years and is generally understood as “simple” mining. Then waiting in the wings, there’s another 4m oz of inferred category material that can’t make it into a feasibility study (must be considered waste by the 43-101 rules) but as the Amulsar deposit has behaved in a predictable way up to now, we can assign a decent level of confidence to that inferred and assume there’s plenty of growth left in the deposit (mine life or extra annual production or both, you decide). As for that IRR, it moves to nearly 50% on current gold prices, which is more than enough for anyone. As for locals, the government of Armenia has been actively promoting its mining industry, looks upon Amulsar as a poster child to attract other companies and its accommodating attitude has been evident in the prompt delivery of the necessary permits LYD has required through the exploration cycle.
 
2) Last week, LYD announced it had made final payments to the original vendor of Amulsar and now own the property outright. The timing of this announcement, right on the heels of the feasibility study, piques your author’s attention as it’s the type of move made by a company that wants to clear the way for an eventual sale (because the most likely exit strategy has been crystal clear since day one on this play) to a major or mid-tier producer. This brings up the type of price bracket LYD may demand and on consideration of Amulsar alone (LYD has other properties on its books) an eventual sale at $4/share wouldn’t bat a single eyelid round this way. A $4 selling price would value LYD at $532m (f/d) and assuming the price parameters in the feasibility are accurate, the buyer would have its mine up and running for $800m all-in. For a 200k/annum gold asset with a low cash cost profile and upside potential, that works.
 
The main concern I’d have is the political risk of operating in Armenia, as although the government has made all the right noises regarding Amulsar and mining in general, we’re still in unknown political waters and risks can pop up from left field. Take for example the recent story about Armenia falling out with its neighbour over a pardon granted for a murderer there (22), in which the country’s President resorted to good old fashioned, rally round flag populist sabre rattling and undisguised threats of war against the offending neighbour, Azerbaijan. That’s the kind of political atmosphere that should give anyone pause for thought.
 
Overall, there’s a lot to like about LYD and although not a riskless play, the economics and geology of Amulsar are more than enough to balance that out and provide the type of reward scenario that risk-takers like you (and me) go for in the farther flung countries and mining projects. It’s not one I’m going to cover formally here at The IKN Weekly because I’m really keen on making progress with coverage on producers before adding any explorers, but that shouldn’t stop you from taking a closer look and deciding whether it’s for you. I make no bones about the fact that the main reason to like is “Cook and Fulp like this one” and so I’m cribbing off the work of others in a shameless manner, but the recent corporate developments and the new chinks of light we’re seeing at the end of this 2012 tunnel for explorecos suggest, to me at least, that now may be a good window to buy into the cut-above-the-average junior exploration name.


Candente Copper's (DNT.to) investor relations department is having an interesting week at the office, methinks

This just out from the company, the second NR in as many days about the Cañariaco vote that went 95% against Candente (DNT.to) on Sunday. The strange bit is that DNT is trying to tell us that only 650 voted, when the real number was three times that amount, but the interesting bit is this at the end...
"The Company''s Peruvian counsel has advised that this meeting should be considered an opinion of some..."
...because all of a sudden DNT is "well, they may have a point" which is 180° away from yesterday's poppycock spin. Tell you what, the worst thing about this is that the whole of the investment community in Canada has to stoop to getting its information from a pissant blog like IKN rather than a bit of honesty from IR depts as yesterday's post, few lines though it was, got much closer to reality than anything the company wanted to admit to its own shareholders.



PS: Reader "M" mails in with this. His opinion rather than mine but very interesting and a good example. Particular agreement with paragraph two.
This reminds me of the controversy a few years ago in western Ghana, when and Australian company (Adamus) proposed to move the village of Anwia in order to build a new mine. Their local disclosure was incomplete, the people protested, police were called, there was a clash, and one or two people were injured (police, IIRC). Dr. Google provides this article:

Many mining companies view the law as a club to be wielded on the local populations--"the Federal Gov't has given us permission to proceed so you have to let us."

About two years later we met the fellow appointed by Adamus to clean up the mess. He was actually a very nice fellow with an understanding of local sensitivities. He was able to patch up things enough that Adamus was able to sell the properties to Endeavour (these are now operating mines).


10/1/12

If you're wondering why Candente (DNT.to) is dropping like a stone...

...that'll be because the community around the Cañariaco project has just thrown the company out and rejected the project. Beats me why it isn't halted, actually. Clearly an unfair advantage for Spanish speakers in play.

UPDATE: Ok, so this is going to get interesting. DNT has come out with a NR that does the, "Oh, we hear there was some sort of vote but it's not legally binding and we don't care and we're going to drill anyway". In Argentine Spanish, it's known as "hacerse el boludo". Meanwhile, this (excerpt translated):

"During the eight hours of the vote, 1,896 members of the local population of more than 4,000 registered members of the San Juan Batista de Cañaris Rural Community cast their votes. Although 100% of the population did not show at the urns, the numbers of voters is nearly six times greater than the number of locals that went to the assembly on July 8th when the social licence was discussed.

Of the 1,896 people who took part in the referendum yesterday, 1,719 voted against the project and 106 in favour. There were 71 spoiled ballots. At least 120 police officers came from the cities of Chiclayo and Jaén to oversee the vote were present in Cañaris, Huacapampa and Congona."

But of course, a meeting convened by DNT.to and run by DNT.to at which 6 times fewer locals had a say is legal, and the vote yesterday can be ignored, 120 police officers and all. And the company can just plough ahead and ignore the vote and expect no trouble whatsoever when it starts drilling. The IKN "Bridge for Sale" alert is now in operation.



It comes in a black leatherette case

My thanks to kind reader "S" for the headsup on this.


Comstock Mining (LODE) is the name, commemorative pieces of metal at $500 plus tax and shipping is the game, so if you want your "Piece Of The Comstock" instead of just any old ordinary silver/gold doré bar, click here and order yours. And you know they're serious when they say...
"Comstock Mining is proud to celebrate the achievement of responsible mining in the Comstock with these one-ounce bars of silver-gold doré."
...and that's without going into the obvious advantages of this offer, such as...
"...every bar is encapsulated in protective plastic and proudly displayed in a black leatherette case."

You might have to wait a while for delivery though, what with the disclaimer at the bottom saying...
"Pour date and assay data will be determined when the actual first pour occurs, and the bar design will be updated to include it when they are minted."
...at the website of this $134m mkt cap company. Oh, the other thing is that you don't yet know what percentage of silver goes with what percentage of gold in this one ounce bar, either. But details, right? And as the great news today is that the company has just poured its first silver and gold, we're cooking already and you should be just fine as they'd hardly rip you off, would they? And looky, we got the percentages for silver 88.2% and gold 8.5% for the doré, so cool! That means a 1 oz bar made of that stuff and priced at today's yummy super spot prices for silver ($35.05/oz) and gold ($1780/oz) would be worth $182 and so the one ounce for $500 is a real bargain. BECAUSE IT'S FROM THE COMSTOCK LODE...and...and...YOU GET SILVER AND GOLD ALL TOGETHER, NO NEED TO OWN TWO BARS...and....and.... IT COMES IN A LEATHERETTE CASE.

Oh c'mon, where's your sense of humour? Go buy yourself a bar...go on.

Reader "S", I officially love you forever thank you thank you thank you made my day thank you.


Of all the stock market neuroses out there...

...the one that troubles me the most, the one that delivers the most harrowing window into the investor's soul, is when a person takes a long position in a stock, the stock goes up and he or she is still not happy with the outcome. The discontent can take many forms, be it not having bought enough stock, or the rise not quick enough, or underperformance of its peers or an index, but the root is the same.

ps: I should point out that it troubles me that I worry about it as much as anything else.

The 2012 Small Silvers Sweepstakes, October update

I've forgotten to keep up with this monthly check, but it occurred to me all of a sudden yesterday so here it is today. In this, we check on how nine silver juniors (if your fave isn't amongst them sorry, but we've used this sample for three years now) get on during the year compared to the underlying metal, noted using the silver bullion ETF (SLV as proxy):

click on chart to disensmallify if necessary

In the lead with just one quarter left in the year is MAG Silver (MAG.to) (MVG), the Mexico junior that Fresnillo is going to buy every year for the last four years. Then comes sector biggie First Majestic (FR.to) (AG) that's having a decent year and then in third palce comes the silver ETF (SLV, which means all he rest haven't even done as well as the metal and officially suck. After that we have the midfield Charlies and then the last three deserve special "ha ha you really suck" mentions, because they're still making a net loss on the year despite that September rebound. So ha ha you suck go to Endeavour (EDR.to) (EXK), Fortuna (FVI.to) (FSM) and Golden (AUMN) and let's recall that according to Adam Graf of Dalman Rose, AUMN is going to $104. Seems to be taking its time about that move, Adam,

Chart of the day is...

...the gold/silver ratio (gsr), year to date:


Good old 50 to 1, we're back. Nearly.

9/30/12

The IKN Weekly, out now


IKN178 has just been sent to subscribers. Just thought I'd tell you.

For Seve