Subscribe via email, get all daily posts sent to you next day (and without all the annoying ads)

11/3/12

THREE days of metals and miners; November 4th

Our regular Saturday slot is usually 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). But this time it's three, what with the storm and all that:


And in the end the only real news came Friday, when US jobs came in well, gold took a predicable kneejerk downturn and dragged the rest with it. COPX, being the industrials tracker, liked the news of course. Interesting that silver had its "I'm a precious metal, honest guv" hat on though. Not always the case.

11/2/12

The Friday OT: Talking Heads; And She Was

From the 1985 album Little Creatures.




Junior mining buzzword bingo

Your humble scribe is not the author of this chunk of wonderful. That honour goes to Javelin Partners, a new capital markets advisory shop in Toronto who added this bingo card at the bottom of its monthly newsletter  (edition one). 

Anyone who has sat through more than a couple of junior mining presentations will get a kick and guffaw from this:


I like these guys. My thanks to reader M for the headsup.

Chart of the day is...

...world copper stocks, courtesy of Reuters here:


Shanghai soon to be daddy.

11/1/12

Australian public warning notices

Reader M sends these in and the only possible thing to do is to share here with no further comments necessary. Enjoy.


More on why you should never invest in any company run by or even slightly connected to Stan Bharti

The IKN post at the beginning of October entitled "...in which IKN explains why you should never invest in a company run by Stan Bharti" made the point (I mean you want a clearer title than that?) and we're happy to say that it did have an effect on his self-serving scumball ways. Then this link to a newly discovered blog, Rock Solid Politics, gave you plenty more reasons to avoid anything touched by the hand of Forbes & Manhattan. 

And to underscore the "avoid like the plague" call, here's a mail received from regular reader RL this morning. I asked for and received permission to share this mail because with a little luck it might help somebody out there avoid wasting their money on BhartiStocks. Here's RL:

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx


“Thanks for the link to Rock Solid – good to air out the practices of Forbes & Manhattan.
I’m a shareholder of Aberdeen International and besides being pissed that they paid out an extra $5MM in compensation in the first half of this year (no disclosure on why or who got it but it’s a sure bet it went to related parties) I’m not happy that they’ve been using Aberdeen as a piggy bank for other F&M companies who need the money, apparently so that they can continue paying the salaries and fees of related parties in those companies.
They’re giving unsecured loans to companies that have little prospect of paying them back and that appear to be going nowhere. Temujin, their largest investment, is getting money advanced to them by Aberdeen on an unsecured basis (over $1MM last 6 months probably mostly flowing into the pockets of related parties) – this is after Aberdeen gave up a secured debt position last year to get common shares that appear next to worthless. Both Aberdeen and F&M have removed discussion of Temujin from their sites so best guess is that nothing much is going on to advance their holdings and their investment (now over $13MM) doesn’t look like it’s worth much if any.
Another company continuing to get unsecured money from Aberdeen (now over $1MM and counting) is Desert Eagle Resources, a penny stock where Aberdeen has a less than 10% stake. The company appears to have no operations and no assets to speak of, having lost its properties of consequence in a title dispute. It has a working capital deficiency of over $3.5MM and the Aberdeen loan ranks behind a secured debenture. Yet Aberdeen shows the loan on their balance sheet as if it is unimpaired.
Their modus operandi seems to be to provide working capital to related companies which have no means of repayment, so that their own salaries and fees can be paid, and after a while converting the loans into shares of doubtful value.
If anyone has any ideas about how to bring even a minimum level of good governance practices to this company, that would be helpful ”

UPDATE: Reader T chips in with another datapoint

Not sure if this was already covered in the Rock Solid Politics post but...did you happen to notice this when it came up last summer?

Dacha makes a Loan of 3.5m to F&M Asset Management (a sub of F&M), and then just writes down about $2m of it (with more writedowns to come).  It amazes me that stuff like this is allowed to go on in Canadian capital markets.


TORONTO, ONTARIO--(Marketwire - June 21, 2012) - Dacha Strategic Metals Inc. ("Dacha" or the "Company") (TSX VENTURE:DSM)(OTCQX:DCHAF) is issuing this press release at the request of TSX Venture Exchange (the "Exchange") to provide information regarding the convertible loan it issued to Forbes & Manhattan Asset Management Corporation ("FMAMCo"), a related party, for up to C$3,500,000 during the fiscal year ended March 31, 2010. The Company loaned FMAMCo $3,056,118 and accrued interest of $647,732 on the loan. To date the Company has written off $2,056,118 of the principal amount of the loan as well as the interest receivable of $647,732. Further write-offs on the principal may occur. On May 15, 2012, FMAMCo advised the Company that it had conditionally sold the underlying business and all its subsidiaries including Monarch Wealth Corporation for $1,950,000. The first payment of $750,000 will be applied to the subordination agreement with non-arm's length party, Forbes & Manhattan, Inc. (see press release dated March 1, 2012) and other FMAMCo liabilities. Although not completed at this time, FMAMCo and Dacha intend to enter into a release and assignment agreement irrevocably directing the remaining installment payments from this sale to Dacha. As a result Dacha expects to receive $1.2 million less certain contingent FMAMCo liabilities as repayment for this loan. Stan Bharti is a director of both Dacha and FMAMCo and Executive Chairman of Forbes & Manhattan, Inc. therefore, transactions between Dacha, FMAMCo and Forbes & Manhattan, Inc. are considered to be non-arm's length.
The Exchange conducted an issue specific review on the Company and concluded that non-arm's length transactions commencing August 2009 failed to comply with Exchange Policies requiring timely press release disclosure and Exchange notification for non-arm's length party transactions. To address past deficiencies in the corporate governance practices applied and to ensure the Company appropriately deals with non-arm's length transactions according to TSX Venture Exchange Policy going forward, the Company has implemented a Code of Business Conduct and Ethics and a Corporate Disclosure Policy.


Thinking about Moneta Porcupine (ME.to)...

...and its PEA today. On the one hand you have a company that, according to the weird and wonderful world of PEA mathematics, requires one point five billion dollars in order to set up and run its mine that will potentially dig three million ounces of gold out of the gold at a decent profit. On the other hand you have a company with a market cap of ~$40m.

So basically, the tiny company can't build the big ticket mine...ever....ever ever ever. It needs a bigger mining company to come in, buy out ME.to and build the thing with the required funds. Therefore, once you consider the company market cap against the cash needed to build the thing, it's virtually irrelevant. Therefore, it doesn't matter what ME.to's share price is right now; it could be 10c, it could be today's 23.5c, it could be double that. It's near impossible to put a "correct" price on ME.to today and that's the only thing you'll ever need to know about the company in order to avoid owning its shares forever and we haven't even touched upon niceties of how ME.to proposes getting 2m of its 3m oz Au from inferred into indicated in order to get those ounces into any eventual feasibility study.

There are lots of other juniors in the same boat. Avoid them all.


Chart of the day is...

...the new Barrick (ABX) capex estimate for Pascua Lama, as per the 3q12 numbers today:


What's another half a billion dollars between friends anyway?

10/31/12

Fujimori pardon update

The formal process being made by ex-President and current jailbird Alberto Fujimori to request a pardon from President Ollanta Humala took an interesting turn today, as Fujimori's lawyer handed in the request paperwork signed by Fujimori himself. It's interesting because previously, Fujimori had refused to sign himself, leaving the job to family members and that's because Fujimori, who has always protested his innocence of all charges, knew that by signing documents requesting a pardon he was making a de facto admission of his guilt. However, the Peru government came out with a line of how his signature was necesary for the case to move forward which caused Fujimori to back down this morning.

So now Ollanta has wrung an admission out of him, what we'll now get is independent medical reports that will decide whether Fujimori is dying (as his camp claims) or not (as many assume). 


Chart of the day is...

...this one of Buenaventura (BVN) costs from last night's overview post on the company's 3q12 numbers:


Because just for a change that's a dataset on IKN to which it's worth paying attention. Seriously, there's much more fluff'n'nonsense on the blog than stuff that's actually useful but that chart above is an exception;  It isn't just about BVN, it's about the state of play in Peru mining. 

IKN Recommends: Rock Solid Politics

A blog on political happenings in Newfoundland wouldn't normally be the type of thing that your humble scribe recos on this humble corner of cyberspace, but this time it's very, but very different.

Any blogger who stands up to the sleazeballs at Forbes & Manhattan, takes on Stan Bharti, Mark Morabito and all their feathered friends, runs three part exposés on Alderon Iron Ore (ADV.to) like this one (part one here, then part two here, then part three here) even after being sued under a SLAPP suit by Alderon for his public comments on the company and its project, any blogger like that needs your eyeballs on his work.

The instruction is, therefore, to stop wasting your time here and go visit Rock Solid Politics today (and make use of the keyword filter on the right of his blog, you'll learn a lot more).

10/30/12

The Buenaventura (BVN) 3q12 results: It's costs, baby, costs.

The BVN 3q12 numbers are out and here's the story in three words: Costs are up.

Now for three charts, first op income versus op costs


Here's the costs dataset isolated, done so because it's the one that matters today:

So to do the math for you, here's what it's done to gross revenues

Bottom line: It's getting more expensive to mine in Peru. Remember that.

UPDATE: Just one more chart, because you see the costs pressure even more clearly if we consider the evolution of the Costs of Sales line item, which excludes costs derived from depreciation, amortization, royalties and exploration.

Y'see? That's what it costs to mine in Peru

Disney Lucas


that is all

Excellent report on the La Rinconada gold mine, Peru

We've pointed you to reports on the hellhole that is La Rinconada before, but today's offering really is a cut above the rest. Written by Marie Arana and illustrated by photos from the lens of Gina Nemirofsky, it's a great piece of journalism published by the Virginia Quarterly Review. Here's an excerpt, plenty more on the link here:
"The mines at La Rinconada are called “informal,” a euphemism for illegal, a status without which Peru’s economy would screech to a standstill. For forty years now, the Peruvian government has turned a blind eye to increasingly wretched conditions in this remote community, its government agents unwilling to scale the heights, brave the cold, take control. In the interim, what was once a region of crystalline lakes and leaping fish—replete with alpaca, vicuña, chinchilla—has become a Bosch-like world that beggars the imagination. The scrub is gone. The earth is turned. What you see instead, as you approach that distant glacier, is a lunar landscape, pitted with rust-pink lakes that reek of cyanide. The waterfowl that were once abundant in this corridor of the Andes are gone; no birds flap overhead, save an occasional vulture. The odor is overwhelming; it is the rank stench of the end of things: of burning, of rot, of human excrement. Even the glacial cold, the permafrost, the whipping wind, and driving snows cannot mask the smell. "

Now go get it all and find out who Senna Ochochoque is while you're over there, because you'll be glad you did and it may help put your own petty neuroses into perspective. Today's must-read.

Ahhh, that explains it

I'll drink to this report:


Childhood intelligence, measured before the age of 16, was categorized in five cognitive classes, ranging from "very dull," "dull," "normal," "bright" and "very bright."
The Americans were revisited seven years later. The British youths, on the other hand, were followed in their 20s, 30s and 40s. Researchers measured their drinking habits as the participants became older.
More intelligent children in both studies grew up to drink alcohol more frequently and in greater quantities than less intelligent children. In the Brits' case, "very bright" children grew up to consume nearly eight-tenths of a standard deviation more alcohol than their "very dull" cohorts.

Continues here

Ecuador enjoys its first ever miner's strike

The basic question: Are the Chinese owners/managers running the Mirador/Pangui copper project in Ecuador (the company name is ECSA) going to model themselves on the smart, socially responsible Chinese running the Toromocho project in Peru, or are they going to use the fuckwit asshole Chinese management that run the Shougang mine in Peru as their model? Here's a translation of this report from Ecuador's El Universo, published yesterday. 

Monday 29 October 2012, 13h 
Workers at ECSA Stage Sit-in Strike at the El Pangui Camp 
Workers at the ECSA mining company have taken over company installations at the El Pangui sector camp, in the Zamora Chinchipe province.
"This is a very big project at which we're told that local people will be given employment priority, but there's no training plan to guarantee their future jobs", said Víctor Samaniego of the workers' committee at the company. 
The workers are also demanding a pay rise. "We are still earning less than the country poverty line and they've always said that they were going to bring us out of extreme poverty; we've already asked for a pay rise on several occasions" said the leader, and added that the strike action started on Sunday.
"We are waiting. We've sent a document to executives asking them to come and negotiate a win-win situation, but up to now we've had no answer. It seems there's a lack of will and interest on their part. We're waiting and later we'll send a message to authorities and ministers who are connected to mining, said Samaniego.




A flash update...

...has just been sent to subscribers. Pre-bell Tuesday morning.

Chart of the day is...

...the gold monthlies, because perspective is a good thing and every so often it's good to remember that...

...if you look very, very carefully you may be able to spot a trend. Meanwhile, here's a jolly tune dedicated to friends in the US NE region.



Take it easy guys, worst is over.

10/29/12

Video of the Con Ed power plant explosion, New York tonight

Starts just a few seconds in:



On E14 and FDR. Wowsers.

UPDATE: So many to choose from, but I choose this:


The good news is that the bicycle is looking more like the future of New York.

Good news for Gold Resource Corp (GORO) longs

The NYSE will remain closed tomorrow Tuesday, too. Here's what NYSE said

New York, NY, Oct. 29, 2012 -- In consultation with other exchanges and market participants, NYSE Euronext (NYX) will close its markets in coordination with all U.S. equities, bonds, options and derivatives markets on Tuesday, Oct. 30, 2012.  This follows the closure of U.S. markets on Monday, Oct. 28, 2012. We intend to re-open our U.S. markets on Wednesday, Oct. 31, 2012, conditions permitting; updates will be provided tomorrow.


So that's why they call it Ocean City

Ocean City, New Jersey, a few minutes ago.


To all IKN friends in the NE: Keep yourself safe and dry, people.

UPDATE: As the day unfolds, Edgar Rice Burroughs comes to mind.

"Such is life, such is fame, such is power--in the center of the world's highest civilization, or in the depths of the black, primeval jungle. Always, everywhere, man is man, nor has he altered greatly beneath his veneer since he scurried into a hole between two rocks to escape the tyrannosaurus six million years ago."

Toronto's best mining party happens this week, and you are invited

Toronto's finest mining people bash, the annual Mining For A Heart Of Gold party happens on November 1st this year, the seventh time of asking and it gets bigger, better and more wonderful every time. So click here, or click there, go over, get the details, reserve your ticket and don't miss out. All proceeds go to charity as always, you get to have all the fun.



Click here for more details

Chart of the day is...

...copper, dailies.

The doctor would like to say that reports of rampant inflation about to hit at the core of civilization itself have been greatly exaggerated.

10/28/12

The IKN Weekly, out now


IKN182 has just been sent to subscribers. We got a new one.