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10/20/12

Frankel, 14/14

Add soft ground form to his pedigree.



The once-in-a-lifetime horse retires unbeaten.

Five days of metals and miners; October 20th

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).


Miners. Beat. The. Metals. In fact GDX and GDXJ closely tracked the broad market indices and basically ignored what was happening in gold and silver bullion world, while COPX kicked everyone's tush.

10/19/12

The Friday OT: Kate Bush; Sunset

A beautiful piece of music, dedicated to GE.



Do yourself a favour and listen to this song.

Venezuela sells four tonnes of its gold reserves

According to reports out of Venezuela today, the president of the Venezuela Central Bank (BCV) Nelson Merentes has confirmed that the country sold four tonnes of its gold reserve "to take advantage of the rise in gold's price and to generate a profit". 

According to IMF figures, Venezuela had 372.93 tonnes of gold in its reserves, a figure that is now down to 362.05mt after previous sales. This IMF figure fits with the interview given by Merentes, who said that "Venezuela had 357mt gold accumulated and then at the end of July this figure had risen to 366mt" which would include the 4mt just sold.

As there are 32,150.7 ounces in 1mt, at today's spot rpice of U$1,735/oz Au one tonne of gold is worth U$55.78m.

Liberty Silver (LBSV) (LSL.to) (LBSV.ob): The PDF report on Bobby Genovese

On the day that Liberty Silver (LBSV) (LBSV.ob) (LSL.to) is due to have its trading halt lifted by the SEC (though its shares are now moved to the difficult-to-trade gray sheets), the authors of the recent PDF report into the scams run by Liberty Silver's backer, Bobby Genovese, have allowed your author to share the report, previously distributed to a restricted list of regulators, journalists and financial commentators, with the general public. You can find it on this link right here, a 1.2Mb, 16 page report that goes deeply into the background of Genovese the stock promoter, shows his history and track record of conducting scams and looks at the way in which Liberty Silver has been set up for his benefit, too. Here's how the report starts:

On Friday October 5th, 2012 it came to our attention that the Division of Enforcement decided to halt trading in the shares of Liberty Silver Corp. (LBSV.ob) for a period of nearly two weeks resulting in the issuer being downgraded to the Grey Market pursuant to rule 15c2-11. We would like to thank you for rising to the occasion and being pro-active just when we were beginning to complain about the lack of oversight on the OTCBB market. With this trading halt it appears to us that the SEC may be turning a new page in how it treats pump and dumps something that will prevent billions of dollars of retail investor losses.
Following your trading halt we decided to dig into Liberty Silver Corp. and see if there were any red flags we could identify. The following is a compilation of what we believe to be the relevant facts investors, associates, bankers, lawyers, and accountants should be exposed to before investing, trading, or associating with Robert Donald Bruce Genovese AKA Bobby Genovese and his most recent OTCBB Promo Liberty Silver Corp. (LBSV.ob).
It is what I consider an important report, one that strips away Genovese's facade and shows him for what he is. Here's a little of how it continues:
Our investigation of Mr. Genovese has uncovered a different story one of a Vancouver Investor Relations man turned stock promoter whose name shows up repeatedly as being associated with OTCBB pennystocks, unscrupulous promotions, and offshore companies. It is important to note that while some of the information we are providing has been previously reported on this is the first time an all-encompassing account of Mr. Genovese’s business dealings has been put together stringing together what is in our view a more plausible explanation of his fortune but most importantly providing a template for how he has architected his current OTCBB promotion: Liberty Silver (LBSV).

 Here's the link again, go have a read for yourself. 


Chart of the day is...

...this Reuters piechart of LME Warehouse ownership:
It goes with this report, a fascinating look at the way in which warehouse owners are cleaning up. While you're reading, think of the price implications. Here's an extract:
Over the past year, warehouses in the Dutch port of Vlissingen run by Pacorini Metals, a unit of commodity trader Glencore, have mushroomed from 19 to 36, enough to house nearly 2 million tonnes of metal, about a fifth of total aluminium stocks, in an area the size of 40 football fields.
All that extra space is needed because of "financing deals" whereby traders or banks buy the metal from producers then sell it for future delivery to speculators at a profit, a market spread known as 'contango', when futures prices are higher than spot prices for immediate delivery.
In the meantime, it goes into the warehouses monitored by the London Metal Exchange and largely run by the same banks and commodity traders.
LME regulations allow companies operating warehouses in the global network registered by the exchange to release only a fraction of their inventories each day.
This, along with the financing deals, results in long queues for the metal and an artificial tightness in immediate supply, infuriating customers who pay rent to the warehouses while they wait, sometimes for up to a year, to get their goods out.
It's a trick that looks set to become even more lucrative for the specialist commodities houses, as
 continues here

10/18/12

On the occasion of the start of negotiations between Colombia and the FARC-EP terrorists...

...we reproduce this 'toon, from the country's El Pais newspaper, that sums up the situation well:


That is all.



Dynasty (DMM.to) ten day price chart

Interesting trading:


Looks like plenty of people used the news to step out of positions. 

China, GDP, copper, things like that

A lot of ChinaTalk aorund this morning and I've actually tried to care about the subject for once, reading up on the news and views. Two reports that resonated well are 1) Reuters' Clyde Russell and his "China GDP points to steadier commodity demand" here, then 2) Thomas Keller, head honcho of Codelco who's pinning his hopes on China macro stimulus in 2013 here (but it's not going to stop Codelco from cutting premiums to $85/t in 2012, apparently).

Overall, it's been hard to find a true bearish voice on copper this morning, which sets my contrarian antennae a'twitchin.


Mervyn King and Diego Maradona

Apropos of nothing, here's an extract of a 2005 speech given by Mervyn King, governor of The Bank of England. My thanks to darned good Twitterpal @omairzahid for the headsup, because any piece of script that starts with "The great Argentine footballer, Diego Maradona, is not usually associated with the theory of monetary policy" has to be worth a little of your time. However, it should also be noted that Mervyn King is an Aston Villa supporter, therefore his knowledge of good football is likely limited.

"The great Argentine footballer, Diego Maradona, is not usually associated with the theory of monetary policy.  But his performance against England in the World Cup in Mexico City in June 1986 when he scored twice is a perfect illustration of my point.  Maradona’s first “hand of God” goal   was an exercise of the old “mystery and mystique” approach to central banking.  His action was unexpected, time-inconsistent and against the rules.  He was lucky to get away with it.  His second goal, however, was an example of the power of expectations in the modern theory of interest rates.  Maradona ran 60 yards from inside his own half beating five players before placing the ball in the English goal.  The truly remarkable thing, however, is that, Maradona ran virtually in a straight line.  How can you beat five players by running in a straight line?  The answer is that the English defenders reacted to what they expected Maradona to do.  Because they expected Maradona to move either left or right, he was able to go straight on. 
Monetary policy works in a similar way." continues here (page 6)


Chart of the day is...

...Gold Resource Corp's (GORO) 2012 gold producetion, including its low-high guidance for 4q12:


By the way, the high guidance for 4q12 must be counted as some sort of joke. This is the company that confidently predicted 120k to 140k oz gold for 2012.

10/17/12

Message for Barry Critchley, reporter at Canada's Financial Post



plagiarisingpresent participle of pla·gia·rize (Verb)

Verb:
  1. Take (the work or an idea of someone else) and pass it off as one's own.
  2. Copy from (someone) in such a way.


On the morning of October 3rd 2012, IKN ran this note about Sulliden Gold (SUE.to). On the afternoon of that same date you ran this note on Sulliden Gold, re-hashing the same basic information and giving no credit for any original idea source.

On October 14th IKN ran this post about the results of the Sulliden (SUE.to) AGM. On October 15th you ran this report of the same AGM, repeating the same basic information and giving no credit for any original idea source.

On October 9th IKN ran this post on Liberty Silver (LSL.to), which amongst other items voiced doubts about the way in which the stock managed to get a TSX "dot TO" listing after coming straight from the US OTC board. On October 13th in this post we reiterated the same doubts and expanded somewhat on the theme. Today, October 17th 2012 you file this report on Liberty Silver (LSL.to) and place plenty of emphasis on the same question. Yet again there's no credit given for any original idea source.

Moral of the story: Give credit next time or pay the consequences, motherfucker. And your moustache looks stupid as well.

PS: Thought about writing, "...your pissy moustache looks really fucking assface megastupid as well" but decided not to. Because I didn't want to offend.

UPDATE Friday: The stories have been updated and IKN given credit. It was, according to the paper, an honest mistake. So there you go.

The Gold Resource Corp (GORO) analysis from IKN175, dated Sep 9th 2012

I sometimes get questions asking if The IKN Weekly is different from the blog. The answer is yeah it's different because I actually do a bit of work for the weekly. For example here's what subscribers read in IKN175, dated September 9th 2012, about Gold Resource Corporation (GORO). You can download the PDF here if you can't see things below.

Report direct download here


Gold Resource Corp (GORO): pigeons come home to the henhouse and roost with the crows

Time to say goodbye to Gold Resource Corp's (GORO) reputation as a serious mining company. NR here, down 11% AH on the news and will drop a lot further tomorrow.

disclosure: Yeah, I'm short GORO as of U$21.52 U$21.47 get used to the idea that you can bet on stocks going down as well as up, Mr/Mrs Retailer.

UPDATE: Plenty of mails on this NR from subscribers already, but here's one from 'EC' that's particularly pleasing:

Good short call. Want to thank you for my put option purchases on GORO.  Bought me subscriptions for IKN for at least the next 25 years.

Minera IRL (IRL.to) (MIRL.l) gets good news

Here's the NR, here's the last ten days of the stock:


Not shabby.

10/16/12

Ecuador's Presidential election, Feb 2013: Latest voter intention poll

A new voter intention survey for the Ecuador 2013 election from country pollster 'Perfiles de Opinion', due to be held on February 13th (which isn't so far away, people) puts incumbent President Rafael Correa a mile ahead of his opposition. Here's the chart, translated into Eeengleeesh where necessary by your humble scribe:

click image to growerate image

Rafa wins this one. nuff said.

So I get this cold-call mail from Dynasty Metals & Mining (DMM.to) this morning...

...out the blue and the first time ever, as the company is clearly chuffed about its news release this morning and probably wanted as many eyeballs on it as possible (even ones as insignificant as your humble scribes' darkened spheres). So I shoot back a question that came to mind and DMM.to replied to that quickly, so I shoot back another question and they quickly replied to that one, too. So I then sent them what you see below, which is being shared because 1) I'm getting mails from real people (i.e. not people employed in the mining industry) asking for an opinion and 2) DMM has, so far at least, not replied to this one. I'm sure they must have suddenly got very busy or something and will reply very very soon, though.

A couple of comments, to which your welcome to reply to or comment upon if you wish. If not, that's fine too but that decision should be taken in context of the company cold-call mailing me this morning.  
1) I understand that Ecuador law states that the country takes a minimum of 51% of gross revenues from mining. I welcome the news that DMM.to would pay less royalty and no WFT (if ever applicable, because no floor level for gold WFT has been set with any company to date, I believe) but unless mistaken, the law will still be applied here and Ecuador will get its 51% minimum, one way or another. 
2) My basic problem here is that I'd like to like DMM.to on this news but the company has a poor track record of transparency and the granting of these licences is obviously not the whole story. A company has every right to play its cards close to its chest, but when said company has a track record of obfuscation and disclosing minimum amounts of information without giving a clear picture of its situation, thereby disappointing backers and shareholders at a later date, it's hard to take any positive looking news at face value. Just my personal opinion of course, but I'd also confidently opine that the same opinion is held by many in the marketplace. If you'd care to give a fuller picture of the new current situation at DMM Zaruma and what the company expects to achieve in the current quarter and quarters to come, I'd be more interested in picking up this story again (because I'm fully aware that the company is severely undervalued on its potential economics).

dyodd, dude

UPDATE: Nearly five hours later...


Sorry for the delay getting back to you. Our office server and internet have been down since around 10am ! Please let me know if you get this email or I will try again tomorrow.
  
To the best of our knowledge the “51%” is not based on gross revenue, rather the minimum government participation, according to Article 408 of the Ecuadorian Constitution, requires that the government must receive “benefits” from a project in an amount not less than that received by the Company i.e. the government must receive a minimum 50.1%. In other words it is based on the projects profits after expenses (roughly net income). The taxes that DMM will be subject to on the sale of precious metals extracted from the 5 concessions are :

·         Royalty 3% of gross sales (after refining and transportation fees);
·         15% profit sharing tax (consists of 12% to the communities and 3% to the employees);
·         24% Corporate income tax; and
·         12% IVA on applicable expenses (DMM will not recover any IVA since it will not collect any IVA on the sale of precious metals).


Dynasty is still a development stage company that is materially affected by the application of laws and regulations, which are still relatively new and untested, in country that has little mining history and virtually no modern mining infrastructure. There are still too many variables and the circumstances too dynamic to reliably predict outcomes.  As a consequence, it is still not practical to provide near term guidance regarding production at Zaruma. We expect that will change in time and are doing everything possible to advance the project towards commercial production. We will, of course, publish material news in a timely manner and our quarterly reports will continue to provide a complete and factual historical account of operations. I hope you understand our position and will follow our progress.

A brilliant photo-report of the Lurigancho prison, Lima Peru

Posting is going to be light again this morning, but don't let that stop you from clicking this link and enjoying Reuters' Mariana Bazo's most excellent photo report on the Lurigancho prison in Lima, Peru. It's some of the best reporting I've seen for ages and the images are brilliantly framed around the narrative. The serious must-see of the day.

10/15/12

Dentist

I've been getting a tooth fixed today, which is why the posting is light. Same story tomorrow, then back to normal tomorrow Tuesday afternoon onwards. Only time will tell whether I can be bothered to post a bit more this afternoon but whatever happens, I wish you a good day.

Endeavour Silver (EDR.to) (EXK) 3q12 production

Here's how silver stacks up:

Here's gold:

Basically 1) El Cubo puts in disappointing numbers, but EDR explains that by saying it only had true ownership of its new gig for two months of 3q12 rather than three 2) gold production was good and accounts for maybe 1/3 of sales for the quarter (roughly speaking, we'll know the financials November) 3) silver production didn't impress. 

Bottom line: Acceptable quarter, but nothing to write home about. A lot of today's share price needs to be justified by the El Cubo purchase and as that's still in turnaround mode, the jury's still out. Meanwhile, if you want a spin-laden version read the company NR on this link and get down to the gushy lovey percentage changes since 3q11, which mean nothing.

10/14/12

The IKN Weekly, out now


IKN180 has just been sent to subscribers. Guaranteed to break the ice at parties.

suburban traffic

Via @felixsalmon your humble scribe gets the headsup on this photo gallery of the Space Shuttle Endeavour moving through the streets of LA last week, well worth your time and consideration. Here's just one of the many photos on display, a great shot indeed.

Click photo to enlarge

The Sulliden (SUE.to) AGM

And Stan Bharti gets to keep his job, despite getting less than 30% of votes.

Democracy in action.

Peru poll: Ollanta 40%

The monthly Ipsos/Apoyo presidential approval rating tracker is out this morning and we throw the October number onto the pile:


And thusly therefore, Ollanta Humala scores 14% less than his wife (Nadine on 54% approval). Meanwhile, here's the socioeconomic split for the last two months:

At least the As love him, that bunch of half a million people all trying to outspend each other in evermore crass ways in the posh barrios of Lima. If he sticks an import tax on Maseratis that number's bound to drop.