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4/27/13

Thirteen seconds of Messi

AWOL versus Bayern Munich last week and benched for the A. Bilbao game today, Lionel Messi came on with half an hour to go and after about 10 minutes of fizzing stuff capped it by doing this:



Brilliance is commonplace and he's now scored in 20 league games on the trot, which is the wildest stat there is. Barsa's only chance next week, he'll have to be back to 100% and then some and then luck on top. Also, Barça will have to improve its mediocre defence by many loads. Bayern is long odds-on to make the final, but because of Leo (and really, only because of him) I'll be watching.





4/26/13

Gernot Wober, held hostage for 99 days and counting




The Canadian geologist Gernot Wober  has been a hostage of the ELN since January 18th 2013, now 99 days and counting. According to Wober's  terrorist captors , Braeval Mining (BVL.to) can secure his release by giving up its concessions in Colombia.  So far the company responsible for sending Wober into the danger zone has refused to do so. Meanwhile, good to know that Braeval Mining (BVL.to) is watching:




That thing about history repeating or rhyming or something

H/T to the wonderful Setty for sending this paper along to your humble scribe. For those after deeper insight into LatAm business history, the paper is entitled "The Guggenheims and the Coming of the Great Depression in Chile, 1923-1934" , the author is one Elizabeth Glaser-Schmidt and here's the closing sentence:

"What is the historical lesson? Investments in Latin America that aim at a quick profit, while neglecting to study  local political conditions carefully then, as now, seem a perilous business."

Read it all here, fascinating stuff for any LatAm bizwonk.

Lenic Rodriguez is a liar

Now that the dust has settled on my losing trade in Aurcana Corp (AUN.v), I want to make sure that it's publically stated for all the world to see. Lenic Rodriguez, President and CEO of Aurcana Corp. (AUN.v) is a liar. That's not an opinion, that's a straight plain fact. The evidence was shown to subscribers back on April 12th in the Flash update sent to them that day. Here's the whole missive.

Good morning, just gone 5am this Friday morning,

I'll go through the numbers in more detail in IKN206 this weekend, but because Aurcana Corp has turned out not simply to be a little economic with the truth but outright bare-faced liars, your author is looking to sell Aurcana Corp (AUN.v) either later today (I'll wait at least two hours after the opening bell) or next week. 

The information contained in the YE 2012 MD&A and accompanying news release...


...includes the statement that its Shafter mine has not yet reached commercial production by the company's benchmark of operating continuously at 600tpd minimum. To quote the NR, " As a result, Shafter mill has not yet reached its initial target of 600tpd on a continuous basis."

This statement directly contradicts the company statement in the news release of December 14th...


...in which AUN.v stated (exact quote): "The assets at the Shafter Mine are ready for their intended use and the plant is now operating on a continuous basis at an average rate of 600tpd".

We are now told, 118 days later, that commercial production has not been achieved at Shafter.

There is a difference between rose-tinted corporate spin and outright lies that look, for all intents and purposes, legally actionable. However, with working cap down to a little over $7m as at end 4q12 and AUN clearly needing to invest more cash than expected over a longer time period in order to bring its Shafter mine up to commercial status and positive free cash flow, time has now run out on this failed trade and these shameless liars can raise the money they'll need from someone else in 2013.

For what it's worth (very little) I personally feel downright stupid for hanging on in this stock during the first part of 2013 and being fooled this way by a management team with a previously marked patchy track record for delivery. 

Best, O



PS: Back to April 26th and this post today to show to a wider audience the message that subscribers saw two weeks ago was prompted by a blog reader, who wrote in to ask an opinion of AUN.v. Hopefully, the mailer will pass over AUN and find a better place to put his PM junior risk cash

Barrick (ABX) is oversold

Here's the theory:

1) Pascua Lama is a total snafu and Barrick (ABX) deserves to have dropped. That's a given, but maybe the burden is now overestimated.

2) If Pascua Lama is a washout (and it's at least delayed with more cost overruns) then we should see that effect in Silver Wheaton (SLW) as well, what with that very chunky stream that's supposed to come to SLW from the mine.

3) But if we check the YTD chart, we see that ABX has been whacked hard, but SLW has shown basically 1:1 correlation to the gold miners' ETF (GDX).


Working theory: ABX has been oversold due to the psychology of this mess, more than the straight numbers, so a bit of calm in the story would see ABX float back up to peer level. And hey, that might happen now that ABX has correctly fired (oh sorry, "they resigned"!!) the people responsible for the unending arrogance of ABX at Pascua Lama until today. If ABX faces a few facts, admits its errors and changes its attitude, Pascua Lama is still likely to become a reality.

Plus the decent 1q13 numbers and the 20c quarterly dividend...nothing to sniff at there.


Chart of the day is...

...copper, weeklies.

An interesting datapoint about copper costs of production in this weekend's edition too, subbers.

4/25/13

Man avoids being hit by runaway motor boat at pedestrian crossing

What, you think it's a joke? Watch this:



It happened in the town of Tigre, North of Buenos Aires in Argentina. Today's slice of LatAmBizarro.

U.S. Silver and Gold (USA.to)

Yup I know that the gold (and therefore silver) pop is rising ships on the tide, but I have to shake my head in merry wonder about the move in U.S. Silver and Gold (USA.to) today on the back of its 1q13 production report. Are you guys such dumbasses to believe this new(ish) team after all the broken pledges they've brought to the table so far? Did you look at the today's cash cost number and how it relates to earnings in previous quarters? Haven't you given a moment's thought to how Drumlummon was promo'd and hyped at as a key part of the merger...and now they're putting it on C&M? Do you people ever read company MD&As? Do you give a crap about the overpromising and underperforming and think that this time is different? And all that about Blasutti being Barrick so he must be trustworthy? Errr, have you seen ABX lately? Doesn't that make you kind of reflect that.....oh, forget it, never mind.

Although not one of their number I, personally, have nothing against those who actively enjoy masochism. But if you're one of those and are also a professional financial person operating in the junior mining sphere it really should be part of your full disclosure to clients.




Message to mining companies in Peru (updated)

Do you want to have, keep or improve your good community relations in rural areas? And do you really want to help the local population around your mining operation or project, instead of just paying lip-service to the idea and effectively doing nothing over the years (then wondering why you're run out of town)?

If the answer to those questions is 'yes' then read this. A new initiative to improve camelid livestock quality in Peru and just arrived on the scene. Initial trials show that the techniques offered to improve llama and alpaca work and have bettered income in local communities, and on top of the report you'll read I know for a fact that these people are looking for funds for expansion of the program.

UPDATE Friday AM: Several people have written in to say that the above link is dead. That's because it is (the newspaper in question's "Regionals" section seems to be totally offline). So here's a short report on the same thing and here's a longer report on the initiative




A small trade secret, revealed

If one publishes a newsletter on mining stocks, after a while one tends to notice:

1) At or around market bottoms, aside from general market comment exchanges, you only receive subscriber mails about specific companies that have a bad day at the market. No mention is made about companies covered that are going up.
2) At or around market tops, aside from general market comment exchanges, you only receive subscriber mails about specific companies that have a good day at the market. No mention is made about companies covered that are going down.
This, ladies and gentlemen, is at-or-around a market bottom. Inbox evidence abounds.

Be prepared for the goldbugs

Prepare your riposte.

When the whackjob goldbug nutbars start fapping about the pop in the price of gold this morning, just ask them if they'd have been happy about U$1,455/oz Au a month ago. And then tell them to...


Mojitos served, the end.

And another Mexico journalist murdered


Amongst the never-ending murder stats that are generated by the narcoterrorists, there's always something that resonates about the murder of a reporter. Via David Agren, who covers Mexico so very well, this report:
Vanguardia Newspaper Photographer in Saltillo is Murdered 
April 25 2013: 12:28am 
body was found at 2am in the streets of the Miraville neighbourhood, South of Saltillo.
 SALTILLO: Daniel Alejandro Martínez Bazaldúa, photographer at the newspaper Vanguardia de Coahuila, was found dead and mutilated in the early hours of Wednesday morning along with the body of another young man identified as Julián Alejandro Zamora Gracia, 23.
Vanguardia reports that the 22 year old Martínez had joined the newspaper as photographer in the Sociales area just one month ago. continues here

Sierra Metals (SMT.v): More on what's being hidden from view in the Mexico Chihuahua mining scene

We ran a little post earlier this week that noted Sierra Metals (SMT.v) (formerly Dia Bras Explorations, ex-DIB.v) had a little problem and was keeping it quiet. That five line post, with no links, has generated a lot of interest (according to site hits and feedback) so it's time for a little more, but quite honestly folks (this message specifically for the people "in business" that have been asking for more info), you need to find yourself a mirror and take a good, hard stare at it if your principal source of information on LatAm mining issues is this pissant snarkfest of a blog.

Anyway, first we note that according to this report, there are 15 kidnapped SMT.v workers, not just four. Here's a translation of one of the paragraphs:
"Benjamín Reyes Palomares, 27 años; David Fuentes González, 37 años; Mauro Antonio Orduño Muela, 51 años y Abraham Mendoza Vázquez, are some of the 15 workers of the mining company Dia Bras who have disappeared and whose cases have been filed with the Wes and Central Zone authorities."
What? Did you say FIFTEEN MISSING WORKERS OF SIERRA METALS (the new name for Dia Bras, which may explain why the company was so keen on a name change)? And this public listed company in the Canadian TSXV exchange has not said a single thing about this extremely serious problem to the market and its shareholders? It beggars belief, quite frankly.

Secondly, of the reports read by your humble scribe on the kidnapped and disappeared mining employees of SMT.v this report dated April 10th gives the best detail on just how dangerous things have become there and the level of fear in which everyone lives. Here's a translation of the first part, click through for the rest:
Chihuahua, Chih, (APRO). On the afternoon of Saturday 16th February, an armed gang raided the mining camp of Dia Bras Exploration of Mexico, located in the municipality of Urique, in the lower reaches of the Tarahumara sierra.
They arrived in silence. With faces hidden behind ski-masks and uniforms similar to those of the Federal Police, camouflage blue, they got in via the camp kitchen and suddenly the gunshots started.
Awoken by the sounds of the gunshots, the workers who at that time were resting in the camp portable cabins that they themselves had built tried to leave the cabins to see what was happening outside.
But they didn't even have time to open the door, as a loud voice ordered "Hit the floor!".
The armed men asked the workers where their guns were. Nobody said anything.
Then one of the gang asked who the boss was.
Abraham Mendoza Vázquez, the group's contractor, broke the silence and said, "I'm responsible for all these people."
In the middle of the tension, one of the gang asked for the key to one of the trucks parked outside, that of Abraham. Scared by the situation, a miner didn't remember that he had the keys in his trouser pocket.
On checking the pockets of all the workers, they found Abraham's key. They then beat the miner up.
"We could only hear him saying that he'd done nothing, and shouts, and punches. The rest of the group was still lying on the floor."
One of the survivors remembered that the gang started to ask each other what they should do with them.
"What?" "We kill them all?" "Did you bring the ropes?"
One voice commanded, "Let's burn them."
But the leader of the group overruled. "Wait! We're going to pardon them, but by tomorrow morning we don't want anything or anybody here."

continues here

What if a major story in Canadian mining in Mexico broke, but both mining community and Canadian media decided that they didn't give a shit? People, it's long long past the time when SMT.v should have told the world about it's problems in Chihuahua, Mexico. 


Chart of the day is...

...the gold/silver ratio, last three years:


We go back that long on this chart as your humble scribe would like to point out to those kindly assembled that even though we've seen a decent spike in the GSR these last few weeks, in the simplest of terms it's clear there's room to go higher. Because it's been higher.

Slight sidebar: We should also recall that period between September 2010 and April 2011, as it was the last time people actually believed what Eric Sprott was saying about metals. Oh, happy days....

4/24/13

Football quiz of the day

Whose hand is this?

For what it's worth, despite The Big Lewandowski's amazing evening I'm still taking Real Madrid to make the final and then beat Bayern at Wembley. In fact (and it's been a long while), I'm tempted to have a real live monetary bet on that call.

 Feel free to laugh at this prediction in seven days' time.

Gary Biiwii and a good decision

Go check this out, as Gary Tanashian over at Biiiwii has done the right thing and made available to one and all, free of charge and no strings, the excellent edition of his subscription weekly, Note From The Rabbit Hole #235. All you need to do to get your copy is 1) click that above link to download from the site and then 2) that's all.

So ladies and gentlemen, you now have no excuse to read the normal guff and nonsense produced by the unending stream of gold sector dumbasses. Go read something intelligent on gold for a change. Alternative link here

Luis Castilla to resign as Peru finance Minister...

...is now the big rumour suddenly doing the rounds in Peru. The sources are of the serious type, too.

We shall see.

(updated) If you want a great example of everything that's wrong with junior gold mining management teams...

...check out this news release today from International Tower Hill (ITH.to) (THM) that includes:

1) Total gobbledegook corporate-speak that takes multiple syllables to say precisely nothing on several subjects.
2) Complete denial of what's going on around them
3) Refusal to consider the major errors committed by the company in the past
4) The obligatory bright rosy future bullshit
5) And more

It wraps up with a classic line, too:
"Despite the recent drop in gold price, the value of the long life Livengood asset will be judged by factors in addition to today's gold price, including the existing infrastructure, favorable geo-political setting and highly qualified development team."
Well guys, when it comes to judgement I think the jury has already come to its decision. Unanimous, too:

So tell me again why Canaccord has quietly dropped its incessant pumping of ITH again?

The people running ITH.to are utterly incompetent and have demonstrated to a level that removes all reasonable doubt that they have no right to be in charge of a public listed company. Sadly, ITH is just one example of hundreds of junior mining companies about which we can say exactly the same thing but before you decide to use "the freakin' dumbass management" as your whipping boy excuse for losing money these last two years, Mrs/Mr Retail Shareholder, remember that nobody put a gun to your head and forced you to buy stock in their companies. The retail bagholders* are perhaps even more dumbass than the fools and idiots running these things, because those company officers have been drawing fat salaries and you haven't. They haz teh fancy SUV and swanky restaurant lunch, you haz teh walk to work and sandwiches in a plastic bag. Ha.

UPDATE: Mail of the day comes from A.N. Other (a guy that definitely prefers anonymity under the circumstances who writes:
Otto,
If you ran ITH's Don Ewigleben's surname thru a German to English translator, you'd see that it means "Live For Ever"
Coincidence?
I think not.

I lol'd. A lot.

*I very much include myself in the group of dumbasses

Chart of the day is...

...gold's ETF (GLD) over five years:


Considering the recent drop, the last time gold traded at its current price was March 2011, a time when news headlines included "Japan on 'Maximum Alert' as Nuclear Crisis Deepens" "Japan Quake Toll Passes 18,000", "World Food Prices Hit Record Highs Amid Oil Jitters" and not forgetting "Sen. Boxer on PBS Cuts: 'Republicans Have a Vendetta Against Elmo'".

My how times change. Not.

Oh and by the way, the clue about gold is in that third link with Khadafi still alive and fighting hard, oil  supply risks and contagion risks and all sorts of other fear factors that were all the rage. Have a nice day.


4/23/13

Barack Obama, Associated Press, Twitter and Hackers

Here's the screenshot:


Kinda...errrr.....hmmmm.....what can I.... say about.....perhaps....errrr...well.......ok...perhaps....Twitter isn't the best place to get your fast breaking information after all, Mr Ritholtz?

Could Sierra Metals (SMT.v) please tell us more about the four company employees kidnapped, with whereabouts still unknown, by Mexican narcoterrotists recently?

After all, any normal public listed company would feel obliged to inform the market about such an event, wouldn't it? The fact that the four men working for Sierra Metals (SMT.v) are still missing weeks after the event and nobody seems to know what has happened to them also adds to the mystery.

Or perhaps SMT just wants everybody to ignore what's happening in and around its Chihuahua operations, which is why they've been so quiet about it. 


A Flash update...

...has just been sent to subscribers. Tuesday pre-bell.

Chart of the day is....

...copper:


Cuprum vultus valde pallens.

4/22/13

Was Wednesday the bottom? (From IKN207)

Here's how IKN207, published yesterday Sunday, kicked off (with just two small redactions):





Was Wednesday the bottom?
Good question. So before tackling the ideas around gold at the moment, let’s ask Brian Cohen for his thoughts on telling people what they want to hear:

Brian: I'm not the Messiah! Will you please listen? I am not the Messiah, do you understand? Honestly!
Girl: Only the true Messiah denies His divinity.
Brian: What? Well, what sort of chance does that give me? All right! I am the Messiah!
Followers: He is! He is the Messiah!
Brian: Now, fuck off!
[silence]
Arthur: How shall we fuck off, O Lord?
Monty Python’s Life of Brian, 1979

With that out the way, we move to the happenings of last week in the market. We saw the forced sell-off, a raid if you like, against gold two Fridays ago.

[Sidebar: I stick firmly to the assertion from last week’s closing comments that goldbugs are mostly idiots and are now suffering from Boy Who Cried Wolf syndrome, because of their constant bleating (word chosen carefully) about manipulated markets and how gold would be at choose preferred silly dollar amount per ounce if “they” didn’t “rig” things. When true and serious real live market manipulation of the gold market comes along, orchestrated by people who move markets in order to make a fat profit for themselves in a perfectly legal (though perhaps morally dubious) manner, all the whining and handwringing in the world by same goldbugs sounds exactly the same as the innumerable times they’ve been bullshitting over nothing].

We saw margin calls over the weekend and forced liquidations from all parts. We saw all the shouts of the toldyaso gold bear brigade, a sizeable proportion of which couldn’t resist doubling down and calling $1,200 or even $1,000 ounce gold which is fair enough I suppose, they’re allowed to be loudmouthed when a market moves their way for a while and goldbug extremists are just as guilty of the same (beware when you catch yourself) singing in the shower moments when bullion powered through $1,800 and towards $1,900...which wasn’t so very long ago, either. We saw large position instos and larger-scale private investors publically walking away from the whole gold and mining sector on very high volume, both trade-wise and the amount of badmouthing that metals, miners and the whole resource/commodity sector took.

In short, last week was a classic, tick-the-boxes capitulation. I for one have considered certain moments in 2013 (and 2012 for that matter) as potential capitulation moments, of “Hmmm, did we just see wholesale towels being thrown in there?”, of what might be called mini-capitulations that signal the end of a chapter. They’ve been debatable both before and after the fact, but last week saw the end of a whole novel, not just a chapter or two. Last week’s action was capitulation, but that doesn’t mean we’re about to get an automatic easy-to-play big rise in stocks. Which brings us back to the main question: Was that a bottom last week?

1)      Beware those that will tell you “YES!”
2)      Beware those that will tell you “NO!”

Which is why we kicked off with that excerpt from the Life of Brian script today. Your author’s opinion is that we did indeed see full-scale capitulation and that’s the type of thing we want at the bottom of a market, but there may be further lows to come in the next few days before all the detritus is washed out and we can rebound correctly. There may be. Or there may not be. I don’t know and because I don’t know I’m adding to positions next week. Being a bad market timer I’m simply not going to enter the arena in the great quest to tick the bottom and buy at the lowest possible price. However what I do see is that a few weeks from now, the quality junior names would have recovered and prices for their shares will be higher than they are today so under those circumstances, I can easily buy now and ignore the jitters that might pass through the market before the rebound sets in. I’ll also find it very, but very easy to avoid listening to anyone who screams “buy now! or “sell now!” in that special way that people who “know” tend to prefer. Sorry guys, I can’t tell you what to do, I can only tell you what I’m doing and that’s to add exposure at these low prices after considering the risks (and there are risks) and the rewards (there are those, too).

I’ve managed to salvage a bit of something from this market by playing a couple of shorts and selling bad losers before they became downright awful losers. It’s now time to put that money back and although the market may drop more from the clear capitulation phase we’ve just seen, I don’t trust my near-term timing enough to hang on and wait for the exact right moment; Where we are now, with [two company names and stock prices redacted] will do nicely for me. I’m half-expecting a rough few weeks and don’t know where the absolute bottom might be, but the prices on offer today will be better come the end of 2013. The rest is noise, quite literally.



Beto...

...does not screw around.

For those who know.

Argentina parallel dollar (aka "dolar blue") exchange rate, 2013

The info is from this tracking service for the exchange rate, the prices shown are the 'ask' (bid being typically 30c or so lower), the dates are those when changes are registered in the price by the dolar blue tracking site. Put it all together and the chart looks like this:

NB: Please note the cut down Y-axis, done in order to better see changes and not to try and fool you.

As of this morning, the Dolar Blue stood at 8.63.

Australian bravery

There are far too many examples of the bravery shown by Australians over the years to list on this humble corner of cyberspace. Here are just three:

The ANZACS: As my paternal grandfather served next to them at Gallipoli, it's one of the segments of the First World War that I've read about most carefully. The Australians' (and New Zealanders for that matter) breathtaking courage in that battle is recognized the world over and our modern society owes an infinite debt to them.

Australian Rules Football: Not many team games in this world are specifically designed at the rulebook level to include inflicting bodily harm on your opponent as a tactical advantage, nay necessity. Aussie Rules stands high on that list.

Troy Resources (TRY.ax) (TRY.to) taking on $40m in balance sheet liabilities this weekend, at a shockingly awful time for junior mining companies, in order to finance the development of a grassroots gold mine project.... in Guyana. A hat tip to their ballsy bankers, too.

So three cheers for Australia. For the rest of us:




4/21/13

The IKN Weekly, out now



IKN207 has just been sent to subscribers. There are pretty photographs and words and numbers as well. It's guaranteed to break the ice at parties.






(oh, and don't worry about Batman, he gets out of that one just fine)

Barrick (ABX) at Pascua Lama: Chile's Court of Appeal rules against ABX, the project remains halted

Today Chile's Court of Appeal has ruled against Barrick (ABX), who had filed a motion on April 10th to revert the halt order aginst work on its Pascua Lama project on the Chile side of the Chile/Argentina binational property. 

In other words, Barrick wanted the ruling that stops them from moving forward with the project to be overruled. Chile said the ruling stands and ABX will have to clean up its act before any more work gets done up there, not while or after.

Luis Suarez...

...bites Ivanovic. Great camera angle here.



The guy is bizarre squared. And yes, he's done it before (and got a seven match ban for his toothy troubles). And yes, of course he stepped up in the last minute of injury time and scored the equaliser to save the match. And yes, I was wrong about calling Chiquito Flores' foul yesterday as the worst of the weekend.

A meteorite in Argentina

Last night, around 3:30am local time in and around Santiago de Estero in Argentina, the sky was lit up for a few seconds by a meteorite. Some great footage on this video here.



Report here, for those of you versed in the tongue of Cervantes.

UPDATE: Here's another video of the meteorite, taken by someone attending a concert. The event is well captured at minute 2:56

Open message to Gary Tanashian of Biiwii

Gary, I think that your subscription letter today, Notes From The Rabbit Hole 235, needs to be read by a wider audience. So I suggest that out of respect to your subscribers you wait 48 or 72 hours and then offer it up for free public consumption so that anyone can read it. Today's edition is the single best thing I've read on gold price, period.

Anyway, that's my little suggestion, because I'd really like you to be read by more people, get the type of respect for your analysis that you fully deserve and get more subscribers to your paid-for service as a result.

And the Foul of the Day Award goes to...

...Juan 'Chiquito' Flores, the goalkeeper for Union Comercio in tonight's match against Pacífico FC in Peru's first division. Watch this video from 10 seconds onwards and see what he does to striker Mauro Cantoro:



Amazingly he didn't get sent off, though he may be arrested later tonight for common assault. Even worse, he then saved the penalty awarded for the foul. The match finished 1-1. Here's a still shot of today's finest sporting moment: