start here

start here

The Daily IKN email digest, get all daily posts sent to you next day (& no ads)

4/13/13

An urgent message from South America newswires

BREAKING: ENGLISH LANGUAGE NEWS MEDIA DESPERATELY TRYING TO FIND SOME ANGLE TO VENEZUELA ELECTION COVERAGE THAT CASTS DOUBT ON POTENTIAL RESULT BUT ALSO LETS THEM SAY "WE TOLD YOU THAT WOULD HAPPEN" WHEN MADURO DECLARED WINNER TOMORROW EVENING
For futher details, please see tonight's reports from Reuters, Bloomberg, AP, AFP, DJNW, Al Jazeera,  New York Times, Washington Post, Guardian, EFE, IPS, CNN, Fox etc etc zzzzzzzzzz

Five days of metals and miners

This is the chart we ran every weekend through 2012 and it makes a quick comeback today in order to show the mess that was last week:


The volume in GLD on Friday was nothing short of impressive, with 55.6m traded vols and 5X the average. The miners (GDX) and the juniors (GDXJ) were suitably pummelled in direct relation to the gold dumpage. What's most interesting to me is that Goldman Sachs call of early week, which pulled out a $1450/oz target for end 2013. Well folks, we're now within $30 of that target in just three or four days and if that doesn't get you scratching your chin in wonderment, nothing will (marketwise at least).

I'm not a goldbug and I constantly scoff at the sector paranoia on any occasion that the trades go against the goldbug "logic" (term used very loosely in this context, of course), because over the course of time the space has shown itself repeatedly to be populated by fools. But I know real bullshit market mechanics at work where I see them and on Friday those following the gold action had a front row seat for the showtime. Separate the wheat from the chaff; the normal blahblah from the goldbug community is pure chaff, but yesterday was wholegrain goodness.

4/12/13

The Friday OT: Miles Davis; blue in green

Sums up today nicely.



For JS, who is a good person.

Not with a whimper but with a bang

April is the cruellest month, breeding
Lilacs out of the dead land, mixing
Memory and desire, stirring
Dull roots with spring rain.

The Waste Land, T.S. Eliot, 1922

We only need one more indicator to signal the bottom now, that of Louis Lobito Little Wolf James giving up on his St Crispin's Day speeches and recommending a few short positions in the junior mining sector.

If those stupid enough really asshole enough with more money than common sense intelligent and on-pulse investment professionals on his insider trading "Investment Alert" service could give us the headsup on the day Lobito goes short, we'd all be appreciative. Thanks in advance, guys.

Pascua Lama (ABX) update

Responding to mail inquiries, the latest on Pascua Lama is that Julio César Martínez, a member of the national congress representing the UCR "Radicales" party* for the province of Rioja is calling for construction to be halted on the Argentina side of the project as well. 
"The passivity of the control organizations in San Juan province and the national government is striking, as well as that of the Argentine judiciary", he said, continuing, "this project should never have been permitted in its location because it's in the San Guillermo national nature reserve and what's more in a zone of permanent ice, permafreeze protected by the Glaciar Law." 
Said Martinez, "The water used is basically from the Argentina side, the minerals are to a great extent on the Chilean side, therefore it's a bi-national project that if halted on one side has to be halted on both sides."


*as close to a left wing political party as you get in Argentina, but nothing is split into easily understandable lines in the country so


A flash update...

...was sent to subscribers, early Friday morning.

Candente Copper (DNT.to): I'm all confused now: Were there two "Fourth Round Table" meetings in Cañaris last weekend?

According to this news release from Candente Copper (DNT.to) in the wee small hours of Friday morning, there was this fabbo fourth round table meeting in Cañaris, location of the company's Cañariaco copper project, last weekend that got all this work done as well as seeing 140 million Soles (~U$56m) committed by the government to social projects.

However, according to the Spanish language newspaper of record El Pais earlier this week (and partially translated and noted in this IKN post dated April 9th), the fourth round table meeting was a failure, its main objectives were stalled again, community representatives were barred from the meeting room, others left in protest and commented that they had been ""thrown out of their own house" by government officials and overall, little of importance was achieved. Also, at the very same meeting, it was decided that only 40% of  the 140m Soles of social program projects proposed was deemed viable in the immediate future (which includes things such as cookers and electricity for houses in the area).

Were there two meetings in Cañaris last weekend? Or maybe the Candente Copper (DNT.to) people slipped through some wormhole in the space/time continuum and visited a parallel universe for a few hours back there. I think we should be told!

4/11/13

Will Braeval Mining Corp (BVL.to) prefer to try to hang on to its concessions in Colombia or try to save the life of its geologist?



An interesting development in the case of Jernoc Wobert, the Canadian geologist captured by ELN terrorists in Colombia in January while working for Braeval Mining Corp (BVL.to). As you may recall, the other people working for BVL.to at the time, including Colombian and Peruvian nationals, were freed in mid-February but there was no such luck for Mr Wobert; here we are in April and he's still a hostage.

But as Colombia's El Espectador reports, we now have news. The ELN yesterday published a communique that indicated that Jernoc Wobert would be freed in exchange for BVL.to giving up its concessions in Colombia. Which means the ball is in the junior's court but you have to wonder whether BVL.to actually gives two hoots about the person that they hired as geologist, because in the only two company NRs since the security incident BVL hasn't had the common decency to say a single word about the unfortunate Mr Wobert. So the message to BVL management is that you might not give a toss about the fate of Mr Wobert, but there are plenty of people out here that do.

UPDATE: Big stick + hornet's nest = this post. 

Stock markets and country economies

Here's a chart that shows the 2013 year-to-date performance of the Peru Stock exchange headline index (the IGBVL) versus to U.S S&P 500 index:


Which country has a 6% GDP growth rate here? Which one is proud of its recent economic advancement? And which country is full of non-stop complaints about the state of its economy?


IKN re-recommends My Own Market Narrative

No joke, if you're into metals and markets but don't want the stock-standard viewpoints you get anywhere and everywhere, the blog My Own Market Narrative is getting better and better over time. It's much more insightful and useful than anything going on here at IKN, that's a guaranteed. If you haven't visited for a while, go over and take another look.

Bellhaven's path

Today Bellhaven Copper & Gold (BHV.v) (disclosure: used to own but saw sense) unveiled its "7 point strategic plan" to get the company back from the disastrous position it finds itself in. And here are the seven points they're going to work on:

1) Right View 2) Right Intention 3) Right Speech 4) Right Action 5) Right Livelihood 6) Right Effort 7) Right Mindfulness 8) Right Concentration. 

Oh wait, that's eight not seven. And it's the wrong list. What was I thinking?

UPDATE: Iwnattos chimes in

Chart of the day is...

...yesterday's action in Belo Sun (BSX.to):


It wasn't me, Stan.

But what I do know is that when a leaky boat company run by shake-their-hand-then-check-your-ring-finger management makes a volume-driven late day move, it's not a bad idea to watch the newswires more carefully.

4/10/13

Who could buy Barrick (ABX)?

Barrick (ABX) is still a company with decent mining assets and a strong balance sheet, but today's Pascua Lama fubar shows that even after a change at the top, a supposed shift in focus and (yet another) kitchen sink quarter, its still being arrogantly and woefully mismanaged (seriously, I laughed out loud when ABX's first reaction was to publish a NR to tell us that the Argentina end of Pascua Lama was working as normal). We're now looking at a share price that's been slashed to bits and a market cap that's slipped from way out in front to second position in the big bad league table of goldies (yes folks, as of this evening Goldcorp (GG) is the biggest player in the space by market cap). Tonight, ABX's price/book value ratio stands at 1:1 and when push comes to shove, that's all you really need to know about the pathetic amount of "value" being added by the current team running this company.

The combination of good assets being badly run and the knock-on effect it causes in its equity price is the classic recipe for a real change of management, not just a cosmetic or internal appeasement. So, anyone for a hostile bid out there?
  • Would Goldcorp dare? A one-for-one all paper bid would be darned audacious.
  • Would BHP Billiton care? After all, its seven times bigger than ABX already.
  • What about Rio Tinto, would it like to add a large chunk of gold to its books?
  • As for Glencore/Xstrata, they (it?) have enough to worry about already, I'd guess.


Anything else looks too small to make a run at ABX. But surely, there has to come a moment when the larger owners of ABX shout basta! about the way it's being run into the ground. 




Barrick (ABX) at Pascua Lama (updated): The Copiapó Court of Appeal suspends all work at the Pascua Lama project

The Court of Appeal of the town of Copiapó in Chile has ruled that work on the Pascua Lama project be suspended with immeidate effect due to accusations of environmental damage brought by the lawyer representing five indigenous communities located near the project. The lawyer, Lorenzo Soto, explained to press that the ruling was made due to irregularities committed during site construction, particularly "the destruction of the Toro 1, Toro 2 and Esperanza glaciers, located next to the mining works, and the contamination of water resources".


UPDATE: Here's what Chile's Minister of the Interior, Andrés Chadwick, says about the ruling

"It doesn't surprise us in the least and it appeared good that, via a judicial organism, work could be suspended while Pascua Lama effectively complies with all the charges that the Superintendency of the Environment put before it a couple of weeks ago."

"It's better to suspend (operations) and now they are forced to repair all unfinished situations at the Pascua Lama project."


"...an opportunity to reinforce the message to authoritarians everywhere that a poet’s words will always outlast theirs, and the blind praise of their powerful friends."

An excellent and insightful article by John Lee Anderson in The New Yorker today that examines the link between Pablo Neruda and Margaret Thatcher. The main connection is of course one Augusto Pinochet. Anderson is nobody's fool when it comes to LatAm history and is the type of voice that gains gravitas because both left wing and right wing attack him in turns for his work...he must be doing something right if that's the case.

The best possible news for the price of gold

Goldman Sachs is calling short on gold.

Here's the front page of the report...


...and this little blue line drawn on this chart is how GS's call for $1,450/oz gold by end 2013 looks compared to the action since the year 2000.


Having read the whole report, your humble scribe can report that there's nothing that classes as new insight in the argument. This is GS making a call to its entry-level clientele and if you think that's a worry to your long position, just recall how well that "oil to $200/bbl" one went when the barrel was heading through $130 and towards $150. Or how about GS's "silver to $100". Bottom line: The world's biggest fade has made the call that the mining industry wanted to see.

4/9/13

Agnico Eagle (AEM) (AEM.to), or when high-powered mining company officers understand precisely fuck all about political risk

Three charts for your consideration. All data from here, and let's not even start on about Meadowbank. Or Comaplex.



Marketing suggestion for David Strang of Lumina Copper (LCC.v)

Instead of using the word "Argentina" in your news releases, try writing "Southern South America".


Or perhaps "Really, really close to Chile, so close that it doesn't really matter that we're in Argentina. Honest."

Have a nice day anyway, David. 

Short Tahoe Resources (THO.to) (TAHO)



Over the last few days mails have been received from readers due to the apparent radio silence at this humble corner of cyberspace regarding the news last week that Tahoe Resources (THO.to) (TAHO) had received its operating permit (the last official piece of paper it needed) for its Escobal mine in the San Rafael las Flores region of Guatemala. By way of a couple of examples, here's reader RG....
How come we have seen no mentioning of Tahoe Resources lately ?The whole winter you bashed them almost every week... ! 
....and here's reader DC...
No love for THO on the blog? They were granted their permits, it seems… given the countdown clock you had running, it would only seem fair to post that they actually got them!
...who put things rather more politely than other mails (though I did like the ones that sent in crow recipes, my you guys are original). Well it wasn't a case of shying away from the subject (sorry to disappoint) and much more the fact that I wanted to tell subscribers of The IKN Weekly that due to last week's news and price pop I'd be shorting the stock this week. As that article is written and published (as per IKN205 on Sunday) and the short position is now open (as of yesterday morning, all earlybird and tweety) it now gets a mention here. Hope the way your humble scribe put paying customers first didn't upset you guys...

Anyway, you sneering longs out there now have a homework assignment, which is to look up, translate, define and understand the Spanish word "amparo" in its legal context. Have fun!

Fowks on Cañaris (Candente Copper (DNT.to) etc)

A thorough report on the situation around the Candente Copper (DNT.to) community problems at its Cañaris project in Peru came from the hand of Jacqueline Fowks in the Spanish language newspaper of record, Spain's El Pais, yesterday (and by the way, Fowks is one of the better journalists covering South America...you don't get a job at El Pais otherwise). Here's the link, and here translated is one section in which the most recent couple of official, government sponsored negotiations between all sides are discussed (that latest having happened last Saturday):

In the last two sessions, the behaviour of government representatives, all high-ranking functionaries of the Ministry of Energy and Mines and the Ministerial cabinet, has caught the eye. The meeting of March 2nd was supposed to be in the rural community of Cañaris, a location decided upon a month in advance. However the night before the meeting the government officials changed the location of the meeting, telling the press but not the population of Cañaris, who had prepared a welcome ceremony in accordance with their ancentral customs. The local authorities weren't only late arriving to the alternate meeting place, but also felt badly treated. 

This Saturday in Cañaris the outgoing community president, Cristobal Barrios, and his successor Florentino Barrios who takes over the local community presidency on April 17th, had problems entering the meeting held in the local coliseum. The impasse was resolved, but a representative of the Ministerial cabinet blocked the entry of Rosa Sara, spokesperson of the community organization and head of the Cañaris women's associations (known as 'rondas'). "We left [the meeting] because it was not convenient to go in incomplete", explained Florentino via telephone, while the outgoing president complained to the press, "They threw us out of our own house." 

Meanwhile, the president of the negotiation round table Fernando Castillo, from the Ministry of Energy and Mines, said that the local community leaders had taken "a unilateral decision not to participate in the meeting."

Chart of the day is...

...the last six months of copper:

If what we've seen in the last week or so is a bottom, it's probably a turn driven by Chinese demand. And no need for obviously good news either, as "not getting any worse" should be enough to maintain the copper price deck and no need for big improvements to keep copper away from the dreaded 2-handle. By the way, discount Chilean dockworkers' strikes, a nothing story when it comes to copper (though may affect the quality of apples you eat in the next couple of weeks).

4/8/13

A jolly tune for Monday

Basically OT, this is Calentura (rough trans "Heat") by Chocquibtown (Colombia's finest band) with help from Tego Calderón (the Puerto Rico rapper whose coolness makes Snoop look uptight and anxious).



And it's great music.

Endeavour Silver (EDR.to) (EXK) 1q13 production results

Endeavour Silver (EDR.to) (EXK) came out with is 1q13 production numbers this morning (link here) and it has to be said, they're an improvement on what we saw in 2012. Here are the comparative charts:

Silver:
Gold
Silver head grade at the two main ops (El Cubo doesn't really give enough data yet)


The fat lady isn't singing on this quarter until we see the costs profile and that comes in the financials in a few weeks, but I'd expect EDR to rally on these results for today at least.

UPDATE: Down 3.3% with an hour left in today's market, which shows how much i know. And by way of disclosure, I don't own this thing and am unlikely to change that position.

Quiztime!

In 1987, which world leader, while at the height of power and influence and in defence of the then government in South Africa and ALL of its national policies, said the following?
"The ANC is a typical terrorist organization. Anyone who thinks it is going to run the government in South Africa is living in cloud-cuckoo land."



Answer: It wasn't him (because he was in jail).

4/7/13

The IKN Weekly, out now



IKN205 has just been sent to subscribers. I hope the mails arrived safely.