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2/9/13

Colombia 7.0mag earthquake

Here's a USGS map, which shows the centre close to the town of Pasto, Southwest corner, not so far from the border with Ecuador:


Here are the details from the site right now, which will likely be updated:

Magnitude7.0
Date-Time
Location1.143°N, 77.362°W
Depth129.3 km (80.3 miles)
RegionCOLOMBIA
Distances5 km (3 miles) ENE of Yacuanquer, Colombia
11 km (6 miles) SW of Pasto, Colombia
21 km (13 miles) SE of Sandona, Colombia
29 km (18 miles) E of Tuquerres, Colombia
Location Uncertaintyhorizontal +/- 14.6 km (9.1 miles); depth +/- 8.6 km (5.3 miles)
ParametersNST=498, Nph=499, Dmin=157 km, Rmss=0.9 sec, Gp= 50°,
M-type=regional moment magnitude (Mw), Version=8
Source
  • Magnitude: USGS NEIC (WDCS-D)
    Location: USGS NEIC (WDCS-D)
Event IDusc000f4ij

A 7mag is no fun at all. Wishing the best to all in the region.

UPDATE three hours later: News is pretty good so far, with reports about scared populations and minor infrastructure damage but no deaths to date. Google News Colombia (Spanish language) compilation page here.

2/8/13

Looking for a favour from anyone with a Facebook account

A friend of mine is a professional photographer who has just entered an online competition by submitting this great photo of an evening beach scene she took a couple of days ago. She needs 1,000 likes to get nominated and doesn't have many so far. 

I think the photo is a real cracker and deserves to be nominated, so if you could be kind enough to visit the page and click Like for her, it'd be most appreciated. Thanks in advance.

An interesting Liberty Silver (LSL.to) reference

Ok, we knew that it was being aggressively pumped, but it's good to get a piece of smoking gun evidence on that via this report. Here's an extract:
Mr. Belesis and other principals of John Thomas use promoters to present securities and companies to the firm's representatives to get the brokers to sell the securities to increase the price of the shares. At the same time, the firm instructs promoters to sell into the market, according to the affidavits.
One example of a “pump and dump” scheme occurred with Liberty Silver Corp., a company that John Thomas recommended to its clients, according to the affidavits. Continues here

Hey, one wonders whether that fine upstanding all-star Canadian management team at Liberty Silver (LSL.to) (LVBSV) knew their company was a Bobby G boilerhouse special? Or perhaps with those generous share deals when signing on to the BoD, they simply preferred not to ask.

Special delivery for Nicholas CampbellSoup of Canaccord

Enjoy Argonaut (AR.to) versus Gold ETF (GLD) versus Rio Alto (RIO.to), Soupy.


Oh, and this:


We are your easy IKN

We run this info-post occasionally and after a quick check of back-house stats this morning it appears that new readers are wasting at least part of their day by coming over and returning to IKN. The good news for you people is that it's not necessary to keep coming back to the blog to keep up with the nonsense and fabulousness, because you can use these easy on the brain methods to read this blog:

1) The e-mail digest, which dumps all of the previous day's posts into your mailbox, first thing every morning (EST). A really simple way of one-stop reading all blog production, 100% free of charge, 100% reliable and as it's run by Google, no mail addresses ever go to third parties. These days it's used by thousands of you (and that surprises me more than it will ever do to you, I promise). Sign on for the service right here. 
2) The RSS feedwhich is my personal preferred fave way of keeping up with other blogs because the posts arrive in your feed reader realtime, one by one. Get your feed sort out via this link (or the button top right of course). 
3) Twitternow a de rigueur part of 21st century weblife and a great realtime resource for any subject you care about. Hey why not start here at the IKN page?

There you go, three ways to avoid all those annoying Google Adsense ads we run on the blog. Glad to have new readers on board. 

A good interview with Rob McEwen, ruined

Kip Keen over at Mineweb runs a good Q&A with Rob McEwen of general gold mining fame ( (MUX) (GG) etc) but ruins it all by mentioning this humble corner of cyberspace. Anyway, even with this obvious blot on his credibility Keen does a good job on the interview, it's still well worth your time and so here's the link, go read.

Sadly he didn't mention anything about the nasty bug going around the San José mine in Argentina that MUX runs in JV with Hochschild (HOC.L) that's seen 58 workers go down with some mystery gastro illness, the whole mine evacuated of its 800 workers and the mine shut by unions on a flash strike action to ensure the well-being of those not already struck down. The cause of the mass illness hasn't been identified yet (Spanish language digest of the reports here) but with at least some reports ruling out food poisoning it's all a bit of a mystery.

2/7/13

Candente Copper (DNT.to): Cañaris locals suspend protest

As jaw jaw is better than war war, the news yesterday from Cañaris, locality of the Cañariaco copper project owned by Candente Copper (DNT.to) was positive. Here's one of several reports now available, here's a translation
During the meeting held on the afternoon of Wednesday February 6th in the town of Cañaris, locals approved the suspension of protests that began on January 20th and unblocked roads that connect the district with the Fernando Belaúnde roadway which goes Northwest. 
Members of the meeting also passed a resolution to say that if dialogue with central govrnment authorities failed, the protests would restart in a more radical form, although what that would consist of was not mentioned.
Leaders and locals from this Andean locality said that the suspension is until February 9th, the date on which a meeting with representatives of the national ministerial cabinet was scheduled in order to find a solution to the socio-eonvironmental mining conflict.



Apparently, Canaccord cares about IKN's view on Belo Sun (BSX.to)

We understand (though it's unconfirmed) that The Can of Corn has just issued this alert:

Belo Sun Mining (BSX:TSX, SPEC BUY, Target: C$2.50): The incakola newsletter/blog issues a negative comment on Belo Sun's Volta Grande project stating that the Federal Public Ministry recommends the Para State Secretary of the Environment does not permit the Volta Grande project. We would note that permitting in Brazil is done on a state level not the federal level. Further, the link on the blog article actually recommended that the license be granted only after impact studies and consultations with indigenous peoples are done (and this is part of the normal permitting process). This newsletter has a track record of incorrectly representing facts in order to put a negative spin on mining stocks. In the past, the author has made similar attacks (but by mis-stating facts) on other stocks such as Argonaut Gold. The newsletter does have a bit of a following so this may cause some concerns but we would be buyers on weakness.

In weak defence, we are unable to boast a track record of systematically bullshitting our own clients, though. Over to you, Soupy :-)

PS: Oh, and by the way we here at IKN Nerve Centre™ don't believe that this blog's personal view of the news is particularly important. More important seems to be the linked report itself, entitled "Federal Public Ministry (MPF) Recommends to State Environment Agency (SEMA) That Xingu (Pará) Gold Mine Is Not Permitted". But hey, why let facts get in the way of a chance to ad-hom, right?

UPDATE: And TD Sec's Daniel Earle is on the case this morning, though he takes a more balanced view and wisely leaves his original headsup source out of it. Earle notes that any consultation would delay BSX's timeline, which at least offers objective facts to his clientele rather than Can of Corn bullshit.

UPDATE 2: With the BSX story making Canadian biz TV today, we offer some words of advice for junior mining IR departments:


Cachaças served, the end

A suggestion to improve your morning at work

1) Hit play on this:



2) Leave it on as you work.
3) The end.

USA Graphite (USGT): Closing short position

Subscribers know that your humble scribe was fortunate enough to get a borrow on USA Graphite (USGT) (USGT.ob) in early January. It's now time to close the position and take profits, not because it's suddenly about to rally (it isn't) but because it's easier to close out when there's still volume in the stock (the the percentage returns are now diminishing).


It's one of those calls that's easy to make in theory, but unless you can grab some short interest it's tougher to turn a real world profit. As we put it in IKN193 dated January 13th:
I’m keenly aware that shorting OTC stocks is somewhere between difficult and impossible for a significant portion of readership, but I managed to find myself a borrow via a friendly channel, therefore the trade really sat up and begged at me and as such I took it, which made its disclosure necessary to all subscribers (in my view). Also, although it’s difficult for many readers I know there are at least some IKN Weekly subscribers who have the necessary channels to short US OTCs. Therefore a short call such as this can be of active use for at least some of you, which is an even better reason to have disclosed my trade Tuesday.



Chart of the day is...

...this Reuters chart...


...from today's Reuters piece by the inimitable Andy Home entitled "Nice rally, shame about the fundamentals" which is simply today's must-read on metals. Here's a snippet to get you in the mood:
Metal bulls can take particular  heart from the fact that both widely tracked PMIs for China were in positive territory, reinforcing a belief that the  country is recovering after a flirtation with "hard landing" scenarios over the middle of 2012. Since China is the undisputed driver of metals demand, this is  "obviously" a positive signal.    
What a shame that no-one seems to have told the Chinese.  

Ian Gordon on Barkerville (BGM.v) wins quote of the day by a nautical mile

The venue, this Gold Report article (ty reader M for the headsup) and here's what some guy named Ian Gordon says about Barkerville Gold (BGM.v):

Oh how we laughed. So let's just check the logic behind Gordon's long call on BGM.v (which still trades on the US OTC, by the way) once again:
1) He has shares in the stock
2) The original 43-101 that was laughed out the room by the BCSC won't in fact be materially wrong
3) Because he doesn't believe it was fraudulent and he's a geolo.....oh wait, he's not.
4) And the numbers compiled in the report aren't wrong either.
5) Because he doesn't think so and he's a geolo...oh, we've done that already.
6) Oh, did we mention the bag that he (and undoubtedly his clients too) is holding, full of unloved and untradeable BGM shares?

However, when you ask real live geologists with no axe to grind what they think of the report they say things like "In our opinion, the 43-101 compliant Technical Report is crap" or things like "It can’t go from half a million oz. at half the grade to 10 million oz. at twice the grade, you can’t do that, it doesn’t happen in reality" or how about "The seven red flags I have presented here are hopefully enough to provide you a taste of my initial review of Barkerville’s resource". But hey, what can geologists possibly know of rocks that someone who uses something called Longwave Theory doesn't? 


2/6/13

Why (oh why) is Stan Bharti's Belo Sun (BSX.to) down 14.5% this year?


I mean, there seems to be no news out there in the English language that's prejudicial to the company's cause, and we're quite sure that somebody as open and transparent as Stan Bharti would be quick to warn his fellow shareholders if there were any sort of glitch or problem with the BSX Volta Grande project. Now...what could it possibly be....?...hmmmm....Hey, wait a moment! This might be it! Here's a translation of how the report dated January 5th begins:
"The Federal Public Ministry recommends that the Pará State Secretary of the Environment does not permit gold mining project on the Xingu River, Pará 

"The Federal Public Ministry says that environmental impact studies and consultations with indigenous peoples have not been done. 

"Belo Sun says that it concerns the largest gold mining project in Brazil"
And BSX longs can practice their Portuguese right by clicking through, though we can give a general idea or two here about how the first problem seems to be that BSX hasn't done anything about the legal right of prior consultation that locals have over the project, and the second problem seems to be about how a hydro dam project upstream is set to cut the river's flow significantly and because of that, the authorities think that a gold mining operation such as that planned for Volta Grande is unsustainable.

But hey, better read it yourself, no?


Liberty Silver (LSL.to) (LBSV): Shade and froid

Months of no-news from Liberty Silver (LSL.to) (LBSV) and in this case no news is not good news, for the company at least. The last time we had a financial report from the company it had less $785k cash at bank and since then no word on any sort of financing.
It's almost as if they've been locked out of the financing market by a united front from the brokerages who have decided not to touch this stock with the proverbial barge pole, innit?

Anyway, IKN's best idea for the fine upstanding people running LSL, first floated in November, still stands : The all-star cast of directors should ignore the cold shoulder they're getting from the houses and stump up their own cash in order to move LSL forward, right? Money where mouth is and all that. 


Just in case you were wondering about the move in Fortuna Silver (FVI.to) (FSM)...

...it got pumped by Casey Research yesterday.


Now you know.

Peru metals production: Copper up, gold down

As we now have the final scores from Peru's MEM on 2012 production these charts below are nicely up to date and show the story clearly enough. The two main revenue earning products in Peru, copper and gold (that between them provide over 40% of the country's export revenues and we're not just talking metals, we're talking everything) have taken clearly different trajectories over the past few years.


Expect copper production to rise further in FY13, led by the new production from Antapaccay. As for gold, the depletion trend is likely to continue as well.

Just in case you thought that Copper Fox's (CUU.v) Schaft Creek was the worst copper project in Canada...

..Serengeti Resources (SIR.v) comes out with this PEA news today to win the crown. What do you get for your money (specifically, $508m capex)? You get a pre-tax IRR of 13.4% (npv5) using $3.63/lb copper.  But don't worry about the economic parameters, because the CEO emphasizes how it's in a great location. 

That's enough for this blog, you can go and read the 'Opportunities To Enhance Value' (love that minespeak) all by yourself.

What Gold Canyon's (GCU.v) news release this morning tells us

Need a longer read with that coffee this morning? Here it is and to give you a clue, here's how it kicks off:
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb 6, 2013) - In response to enquiries, Gold Canyon Resources Inc. (TSX VENTURE:GCU)(GDCRF) ("Gold Canyon" or "the Company") wishes to comment on the Company''s recent share price weakness and higher than normal trading volume, which over the past several months has raised concerns amongst its investors. Volatile stock market conditions, particularly for junior mining issuers, and continued concern for the global economy have no doubt contributed to the decline. However, Gold Canyon management is unaware of any specific reason, other than these continuing general market conditions and market trading influences unrelated to Gold Canyon''s business discussed below, for the recent weakness in Gold Canyon''s common share price as there have been no particular continues here

Anyway, what we can infer is that you're allowed to lose as much as 40% of your share value as long as you do it at the same rate as the rest of the market. But if your losses start outstripping the rest, watch out.



Chart of the day is...

the monthly average prices for gold, 2005 to date:


What the monthly chart does is take away the spike stuff and blow-off tops we occasionally see in gold. It has a more sober aspect, which is as it should be. At least I think so.

2/5/13

Resting places


Osisko's (OSK.to) Mexico exploration, a mystery no more

The news post-bell that Osisko (OSK.to) has agreed on an option for Tarsis Resources's (TCC.v) Erika property in Guerrero State, southern Mexico, rather gives the game away. We can now safely assume that the staked land is East of Erika and makes OSK a brand new neighbout of Newstrike (NES.v) and Torex (TXG.to), to name but two. I'd expect you'll want to have a look at this claims map to see how it al pieces together.

Colombia's oil production breaks the one million barrel per day barrier

Done it at last, and President Juanma will be happy. News today is that Colombia's oil production avergaed 1,011,992 barrels per day in the month of January, thus breaking the 1mbbl/d barrier for the first time. Here's the updated chart:



Argentina electricity demand

What with humble scribe's working theory that electricity demand figures give a true proxy to economic activity in any given country (and as has been pointed out to these pages by a couple of commenters, it's a theory that works well when EM economies are the focus), this morning the decision was to traipse around the normally unloved corners of the Argentina electricity people's website (cammesa) and put a few stats together. Here come two charts from the data which we we offer to our esteemed readership. This one is straight monthly demand and please note that the Y-axis has been cropped at 7,000 GWh in order to see the monthly contrasts more clearly. 


Argentina's electricity market has a couple of notable season peaks in winter (heating) and summer (air-con), which show up. What we also see is a growth tendency that people who have been predicting the imminent demise of the country will not be comfortable about.


This second chart shows the year-over-year (YoY) percentage changes in the same net demand figures. As you'd expect from a seasonal dataset the YoY changes are a bit noisy, also there was a time back in 2008 and 2009 where the system was saturated and new power generation plants weren't yet online. Then the downspike in January 2012 was due to power cuts, but that one looks more of a one-off and can be considered and anomaly. We also put in a best fit line which indicates that growth is ratcheting up from around 2% annual to around 4% annual, though if you extract the 2009 inertia it levels out to around 2%.

Overall, I think this snapshot works well. Believing the Argentine government to one extreme and the prophets of doom to the other is a fool's game and by taking an accurate and measurable dataset (by the nature of the cammesa system, which monitors generation realtime and also set spot prices, it's not a dataset that can be gamed, even by the serial liars at Argentina's INDEC stats agency) we get the impression of a country that's not breaking growth records but on the other hand isn't doing that badly. 

2/4/13

I enjoyed reading Iwnattos's critique of the recent Credit Suisse bear view analysis on gold...

...and not just because of the charming chunks of prose on offer, such as this:
"Tom Kendall and Rick Deverell at Credit Suisse are utterly fucking idiotic morons. If this is the quality of moronitude being pooped out the bunghole of Credit Suisse, I'd fucking avoid that dog of a bank before it implodes."

Sidebar: If you are offended by such language I will safely wager that you've never been in earshot of a pro-trading desk. That alone should give you pause before writing in to complain.

The CS analysis was featured on that flaming cyber-rag Business Insider under a title of "12 charts that will make goldbugs wet their beds and go running to mommy" or something akin (not quoting it as i refuse to read that trash site and until Joe W leaves he's doing himself a great disservice). However Iwnattos over at Market Narrative takes the offerings and makes mincemeat of them in short time, which is half the fun. The other half is getting supporting evidence of your humble scribe's long-held view that many, nay most of the suits working the houses these days are true dumbasses when it comes to applying their numerical education to real world matters, a polite way of saying the same thing that our featured friend said above.

The Market Narrative post is recommended reading as the more light shone on these unclothed emperors, the better for all of us. Go read it.

CEOs are chosen because they’re CEO material (from IKN196)

With the wish that herd-think would STFU just for once, this was part of the intro to IKN196, published yesterday.


CEOs are chosen because they’re CEO material
What with the reported near $50Bn or so in collective write-downs (1) that the mining industry has seen recently along with the fall of several top CEOs from the big and bigger mining companies out there (Albanese at Rio and Carroll at Anglo are the recent headline grabbers in that category, though for me the defining news was when Aaron Regent ‘was resigned’ from Barrick and replaced by the company CFO), a lot of talk has resulted about the way in which the new crop of CEOs in the majors (along with the few that have survived until now) will be more conservative in their approaches to company development and growth, with big-ticket mergers or projects that threaten capex blow-out a thing of the past and smaller, organic deals that give premium to robust economic parameters in politically safer jurisdictions the future.

Well yeah, maybe, for a while at least. A corporation (such as Barrick) may decide to rein in its top level decision-making and go for a more conservative approach for a short while, or maybe even into a medium-term timeframe, but it won’t last. Let’s stay with Barrick as our example (slightly unfair, I could have chosen plenty of others, but ABX is as good as any) and imagine a time two, three or even five years down the line. If Barrick goes into caution mode it’s unlikely to do any systematic harm to the company itself, but if and when the economic and dealmaking climate improves, it risks being left behind by a peer (or even peers) who take a more aggressive stance and is led by an individual who sees the market opportunity, goes for it and makes her or his name in the process. At the same time, the “whatever happened to good old Barrick?” questions will start cropping up in the mining world chattering classes and the company would have picked up an image of fustiness, of resting on its laurels, or the cardinal sin of them all; of failing to maximize shareholder value.

So promote a CFO to become the new CEO and ride out a choppy period in the market if you will, but CFOs are very rarely the stuff that “star CEOs” are made of. The people that make their mark and claim headline spaces in the bizrags are nearly always risk-takers by nature and the ones that make it up to CEO will have (by luck, judgement or a combination thereof) made risky calls, got them right and earned kudos from those who work with them all through their career. If a sector leading company such as Barrick goes into caution mode for a while it’s not such a big deal as long as others do the same, but it will eventually create a vacuum of opportunity that gets filled by the up and coming company headed by the next generation of thrusting corporate executives. Or in practical terms, now that the sector has decided not to take risks, look out for the first deal done by a Tier 1 or Tier 2 miner that’s considered “audacious” or “against the grain” by the market because whichever company it turns out to be will probably be worth following into the next cycle.

2/3/13

Atoms For Peace - Judge Jury and Executioner

The IKN Weekly, out now


IKN196 has just been sent to subscribers. To let you know.