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8/17/13

Oh dear, the terrorist Michael Dwyer wasn't treated all fair like by Bolivian police

Back in 2009 IKN followed this story quite closely and at the time thought it all done and dusted, but like bad pennies it just keeps on coming back. Here's the story on the latest development, here's how it starts, click through for the rest (link via über expert on Bolivia, Jim Schultz)
LA PAZ - An Irishman who died in Bolivia in 2009 as police crushed a plot to assassinate President Evo Morales was actually arrested and then executed, another suspect says.
Until now the official line was that Irishman Michael Dwyer, allegedly in on the plot, died in a shootout with police.
The government has said the plot was financed by wealthy opposition figures in the city of Santa Cruz, a bastion of sentiment against the leftist Morales, Bolivia's first indigenous president.
But a Hungarian arrested in connection with the plot, Elod Toaso, told a court Friday that Dwyer actually survived the shootout and was arrested but later executed, Bolivian media said Saturday.

And at this point you want to cry about the injustice of it all, right? I mean, it totally beats me why a band of terrorists in Bolivia who were plotting to kill the President of Bolivia and were funded by extreme-right wing factions in Santa Cruz wouldn't get fair treatment by the people who foiled the plot and stopped the coup attempt in its tracks after a raid and a firefight in a hotel. In other words, fuck him. World's better off with people like this dead, always has been, always will be.

The 2013/2014 European football predictions: Fred versus Otto

Last year, twitterpal and mailpal Fred L and your humble scribe did this informally. This year the predictions get a quick post to record them officially.


UPDATE: Adding in another twitterpal CityPsmith, with his choices:

1) Bayern
2) PSG
3) AC Milan
4) Real
5) Man City
6) Barça

UPDATE 2: Adding in another twitterpal Omair Zahid with his choices:

1) Bayern
2) Monaco
3) Juve
4) Barça
5) Man City
6) Real

The S&P500 index and the gold bullion ETF over the last five trading days

Sheer coincidence, right?

8/16/13

Round Five! The "Friday-Night-Bury-That-News-While-Market-Players-Are-At-Happy-Hour" NR stakes

We have a winner folks! And to paraphrase William Shakespeare, as Jacques ends his 'Seven Ages of Man' speech;

Last scene of all, 
That ends this strange eventful history, 
Is second childishness and dilution oblivion, 
Sans teeth, sans eyes, sans gold, sans everything. 

San Gold (SGR.to) decided that Friday night was all right for this news release:
WINNIPEG, MANITOBA--(Marketwired - Aug. 16, 2013) - San Gold Corporation (TSX:SGR) (OTCQX:SGRCF) ("San Gold") today announced an offering of 32,000,000 units of San Gold ("Units") at a price of $0.125 per Unit for aggregate gross proceeds of $4,000,000. The Units will be purchased by a single strategic investor. Each Unit consists of one common share of San Gold (a "Common Share") and one-half of one warrant (a "Warrant"). Each whole Warrant is exercisable into one Common Share at a price of $0.18 for a period of two years from the date of issuance.  

All securities issued will be subject to a four month hold period. The offering is subject to a number of conditions, including, without limitation, receipt of all regulatory approvals.  

These securities being offered have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") and may not be offered or sold in the United States or to, or for the benefit of, U.S. persons (as defined in Regulation S under the U.S. Securities Act) absent registration or an applicable exemption from registration requirements. This release does not constitute an offer for sale of securities in the United States.

The Friday OT: Cassandra Wilson; Love is blindness

This is the real thing. Even better than the original thing.




When CNN (finally) met Evo Morales

This week in Bolivia, much talk was generated by the prelude and an interview given by President Evo Morales to CNN. On this link, Global Voices does a good job in reporting on the whole shebang, pre, during and post. 

A wonderfully horrible report

There are many reasons why I shouldn't like this report:
  • It's from CNBC, the perennial waste of time bizporn delivery service
  • It's MSM commenting on the gold market
  • It has a freakin question mark in the title, ugh.
Is it because of all those rather than despite them that it's getting a feature here? Nope, the bottom line is that the header is so freakin' catty it rises above its limitations and becomes delicious.


Saucer of milk for table 9, as Iwnattos would say.


A Flash update...

...has just been sent out to subscribers, Friday morning pre-open. Nothing drastic, just a few bits of housekeeping.

Mining PRs and the Ottotrans™, part 74



We're back! To be straight with you, all post factum and stuff like, there were about four thousand opportunities during the 2q reports season just done when the "Aha! That's Ottotrans™ material!" crawled through your author's cobwebbed grey matter, but an executive decision had already been made not to do any of these until it was all over....basically because the targets were too freakin' easy.

But now it's all done let's crank up our occasional series again, as once again we take the news releases of junior mining companies and translate the gobbledygook into a form of Shakespeare's tongue that is easier to intellectually digest. Today we go with Oroco Resource Corp (OCO.v) and this NR:

This is what they wrote:
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 16, 2013) - Oroco Resource Corp. ("Oroco") (TSX VENTURE:OCO)(OR6.F) announces that they have agreed to extend the closing of Goldgroup Mining Inc.'s acquisition of the Cerro Prieto project (the "Cerro Prieto project") to August 30, 2013. 

Goldgroup has made a further deposit of US $40,000 to Oroco, in addition to the US $100,000 deposited on July 15, 2013, which will be applied against the US $4.5 million initial payment due to Oroco on the closing of the acquisition of the Cerro Prieto project. The closing has been extended to allow Goldgroup time to complete the CDN $4 million senior secured loan facility announced in its news release of July 16, 2013. Goldgroup and Oroco remain committed to the Cerro Prieto transaction and they intend to close the transaction simultaneously with Goldgroup's closing of the related senior secured loan facility.

And this is what it means:
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 16, 2013) - Oroco Resource Corp. ("Oroco") (TSX VENTURE:OCO)(OR6.F) announces that they have agreed to extend the closing of Goldgroup Mining Inc.'s acquisition of the Cerro Prieto project (the "Cerro Prieto project") to August 30, 2013. 
Goldgroup's Keith Piggott has recently found out that he's burned the moneyed guys in Toronto once too often and can't raise any cash. So he's lent $40,000 to us so they we can pay ourselves, because we're in such a state that he's our only salvation, which gives you an idea of just how desperate we are and why we're keen on banking an extra month of salaries instead of converting them into share options or deferring payment or something that's more shareholder friendly. The closing has been extended because nobody in their right mind will lend Goldgroup the CDN $4 million after the way they've burned through investor cash in previous Piggott -inspired flights of fancy such as Sierra and Caballo Blanco. Goldgroup and Oroco remain committed to the Cerro Prieto transaction and feel it's a fucking shame nobody else believes them.

Chart of the day is...

...Peru's monthly copper production, 2003 to date*:


Two reasons to show you this long-timescale chart today:

1) Look at that trendline (fwiw, Peru's gold chart is the opposite, but that's another story)
2) The June 2013 month, just published (August 12th to be exact) is the biggest single production month for copper in Peru ever. 

The new boost is due to the new Antapaccay mine and from here, barring monthly fluctuations, the only way is up thanks to new mines coming online in 2014 and beyond. And when Toromocho starts churning out the Cu, the debate on which country is the world's second largest copper producing nation (behind Chile, obvs) will be well and truly over. At the moment it's tight between China, USA and Peru, but 2015 and beyond it'll be a scrap for the bronze medal position only.

*Yes, I have a one decade detabase on all this stuff. All the metals, too. What did you expect from a stats-obsessed nerdy wonk anyway?

8/15/13

Ecuador and the Yasuni ITT project: Correa says Drill Baby Drill

Just moments ago in a live broadcast to his fellow citizens, President Rafael Correa of Ecuador announced that the plan to leave the big Yasuni ITT petroleum deposit, located in the middle of some plush virgin Amazon jungle, untouched in return for payments from the rest of the world, had been scrapped and the plan is now the drill the merry hell out the region and bring up the black stuff. 

For the benefit of humanity.


Lobito Watch, International Tower Hill (THM) (ITH.to) edition

Why he ever liked this obvious dog of a stock in the first place is beyond me, but Louis Lobito Little Wolf James of Casey Research has outdone himself this time.


And oh, it's now 44% up from the close on the 24th (which wasn't even the low price of the day, either). "Whacked again and again in the days to come", you say?

It takes a special talent to get thousands hundreds dozens probably quite a few of paying subscription clients to sell right at the bottom, a talent that the Little Wolf has in spades. We luvsya Lobito, oh yes we do. If only every sector of the capital markets world had stand-up comedy of this level, the financial world would be a far more attractive place.

And how's our Sinking Alpha pal doing on his Rio Alto (RIO.to) (RIOM) call of July 22nd?

Back on July 22nd, this humble corner of cyberspace urged you to read the "Rio Overvalued" piece published by Sinking Alpha that very same day. Let's see how things have gone since then, a mere eighteen trading days later, using the bullion ETF of the underlying metal (GLD) as our benchmark:


Hmmm...methinks our observation at the end of the post, that "...it cost you nothing to read it. Priced to perfection, I'd safely say", was closer to the mark than anything opined by the dumbass of an author behind it all. The twat.

Disclosure: Long RIO.to? Bet yer ass on it dude.

We very heart that Carmelo Flores Laura already has his own page in Wikipedia

Ah, the wonders of the 21st century. It starts like this:
"Carmelo Flores Laura is an unverified supercentenarian from Bolivia. If his claimed birthday of July 16, 1890 was proven to be accurate, he would be the oldest person ever known."
Well worth a read right here (and it has links to several English language news reports) because the likelihood that "unverified" becomes "verified", due to the normally reliable way in which baptism certificates are handled in Bolivia, is very high and then, Señor Carmelo will be big chief oldest number one Guinness Records book. 

More Candente Copper (DNT.to)

And as long as things like this keep happening...


...you can 100% sure that the Canadian capital markets have yet to flush out all the idiots from its ranks.

aka, "I have a wonderful idea! I'm going to invest in a copper exploration company with no money and a project that doesn't have a snowball's chance in hell of ever becoming a mine or being sold on to a major. I'm going to invest my money at a price highly inflated to the current market average because a) gold just went up 2% b) they've drilled there a lot, found a big copper deposit and the corporate presentation looked really good and above all c) some guy on a bullboard told me it was cheap."

aka, you gringos really will buy anything, won't you?

Larry Summers just been given the job, has he?

That was my first thought on seeing this at least:

Productivity, Honduras style

This story has been bouncing round the web in Spanish for a couple of days, but for some unknown reason it's not been seen much in 'Merican, so here goes.

According to RT, who broke the story first, the South Korea / USA owned company 'Honduras Electrical Distribution Systems Kyungshin-Lear' has a factory making electrical harnesses in San Pedro Sula, Honduras. At the plant, its 4,000 workers are forced to wear diapers (or 'nappies' if you prefer) while at work so that they don't leave their workstation to go to the bathroom during their shifts.

Union head at the plant, Daniel Durón, sais to RT, "We have reported that the employees wear diapers in order to urinate and to stop them from going to the restrooms", who also stated that this is just one of a many forms of malpractice that employees have reported to the Honduran government at the factory in the last few months, only to have been ignored until now.




Peru GDP June 2013: Big miss

Peru's stats bods have just released the preliminary GDP growth rate for June 2013 and at 4.4%, it's well under the dumbass-in-suit average expected of 5.2%.

Here's the updated monthly chart since 2008, with the 4.4% number sitting there on the far right.



A Flash update...

...has just been sent to subscribers, pre-midday Thursday EDT. The result of doing bits of arithmetic and sums and button pushing and math and stuff this morning.

8/14/13

Good news and bad news for the Sprott Physical Silver Fund (PSLV)

The good news is that PSLV has more assets under management than this time last year:


The bad news is that it's because it owns sixteen million, four hundred and nine thousand, five hundred and seventy-four more ounces of gold silver than this time last year. Or if you prefer:


At least mister Eric hasn't had to sell any of the bullion in the fund. Yet.

Update Thursday. Gosh, did i say gold up there? Brainfarts R us, thanks for the mails (plural)





Candente Copper (DNT.to) makes it to negative working cap

It's evolution, baby.


$1.679m in cash and negative $41k in the working cap column, as of June 30th. Just filed.

A practical lesson in how the Canadian junior market works

In one chart.



 Not that IKN called this one impeccably, either. We bought at low 70s instead of waiting for the low 60s. Still going to make a near-term trading profit, mind. A win's a win.





Junior earnings

In the midst of a power cut at your humble scribe's humble abode (which has cramped his style somewhat this morning), a small observation about a clear change in attitude this junior earnings season. While 1q13 was all about junior producers returning generally lacklustre but not distastrous results and getting their share prices hammered into the ground as reward, 2q13 has been all about companies delivering results that are sometimes reasonable but mostly crappy. However, this time the shares haven't been pummelled which suggests that the market believes, on a fundy case-by-case level at least, that the bad news is already fully baked into the pies.

This also suggests, of course, that nice Mr/s Market thinks that the bottom is in for gold. If that's the case then good, if not there's a new overhang of potential selling if the PMs drop through $1,300/oz. That's the only caveat on offer, because aside that it's been a pretty optimistic 2q13 season. Which is good.

8/13/13

And B2Gold (BTO.to) (BTG) reports its quarter, too

A busy day for the spreadsheets, as B2Gold (BTO.to) (BTG) throws over its 2q13 numbers late-ish evening. Here are a couple of updated charts, plenty more where these came from:

Working cap hits a new record. We like the way BTO is paying down current liabilities, too.

As for equity per share, that's now $2.436. Plenty of backbone to the current share price.

Other anal ysts will likely focus on the $33m net profit for the quarter (or 5c EPS if you prefer). Fair enough, but this anal yst likes balance sheets and particularly likes strong balance sheets. (Hint: This is a strong balance sheet).

PS: There's a bit of news about Gramalote in the MD&A as well. Looks like November will be a key month for that project.

Trevali Mining (TV.to), counting them there shares ever since "production is about to begin"

Oh Trevali (TV.to), can I count the way I love thee?


And we're now over 223m shares out. Even more fun things to count!

Interested in mining issues? In Argentina? In exposing hackneyed political bias in reporting? A deeper perspective of LatAm regional politics? How a multinational like Vale works and thinks?

If so, then this piece on the Rio Colorado potash mining project in Argentina, owned by Vale (VALE) and recently put on ice, will definitely be of interest to you. Author Colin Docherty brings a lot of nuance and perspective to a story that's been reported widely but analyzed badly so far and although I think Argentina's position in the affair isn't quite as innocent as the article makes out (for example, most reports say Argentina had previously agreed at an informal level to stump up the cash for the rail transport connection to the potash mine, so when they decided not to play ball on that aspect, Vale's prospective capex bill inflated before their very eyes) it's certainly a deeper and better article on Argentina, mining biz and the way things work (or don't) down this neck of the woods than the usual superficial tosh you get to read about LatAm in English.

It's a very good article, recommended reading. Link here.

The gold/copper ratio

Twelve month timescale. As much of a mental note to myself as anything else:



That's an interesting ratio chart. Well, at least I think so.

And if you're wondering why First Majestic (FR.to) (AG) earnings missed so much...

...it's mainly (though not wholly) due to a corporate decision by the company to withhold the sale of around 700,000 ounces of silver, rather than sell them cheap. Fair enough, but this is what it does to your comparable quarterly financials:


FR.to states that its corporate decision lopped off around $14.8m from revenues, which would have put that green bar there on the right at around $63m. And if you're wondering why there's no red bar on show for 2q13, that's because at a net net profit of $160,000, it doesn't show up on the scale. NR here.

Rio Alto (RIO.to) (RIOM) reports its quarter

Numbers were fine, nowhere near as bad as the rumour-BS merchants have been trying to make out for the last three months and the mine operations were decently profitable in 2q13. The bottom bottom line loss is due to a tax provision (note that post-quarter RIO.to got $21m in tax back from the nice people in the Peru government, a nice cheque to bank) but the adjusted net earnings of 6c/ share looks decent.

Revenues were as expected, though cost of sales at $36.7m came in about $6m higher than the IKN model expected (i.e. I'm a dumbass, not them). On the other hand, exploration and G&A have been cut and that helped cushion the ops costs hike (betcha it's mostly about fuel costs). Here's one chart...


...and subbers, we'll go over all the other usual suspect charts this weekend. Guidance for the rest of the year looks decent, too (though on the MD&A script alone, they're not giving it much hype-hype).

PS: And before you ask, don't wait for a company to send out its NRs, go look on SEDAR.

PPS: Ok, NR is now out, here's the link.

UPDATE post-close: And the people who sold at a 7% or 9% discount at the open this morning after staring at the bottom line and not bothering to look at the underlying numbers, I wonder how they're feeling now?



Pro tip: Learn to read quarterlies, dumbasses.


Chart of the day is...

...Bolivian GDP growth, 2004 to date, with thanks to EF for the datadump:


This is the thing that really pisses off the North about Evo's Bolivia; it's doing really well economically. Even that drop to 3.4% in Lehman-shadowed 2009 was a strong result, in fact it was the best GDP growth in The Americas that year. And before you start with your northern prejudiced nonsense, inflation at 4.6% in 2012 is nicely under control, debt/GDP at 30% is stronger than anything you have up there and forex versus the USD has been strengthening non-stop since 2004. 

Run by me that "Oh the pinko commie lefties can't run an economy" thing again, willyaz?


8/12/13

Fortuna Silver (FVI.to) (FSM) posts a $10.571m loss for 2q13

The big miss (average analyst EPS estimate +4c, reality -8c) is mainly due to a $15m write down on its Caylloma mine in Peru, which got partially offset by a tax credit. Probably a better yardstick is mine operating income (MOI) at $6.478m...which is still a miss. NR here.


Revenues of $30.101m and cost of sales at $23.623m leaves a thinnish margin. FWIW, in the analysis of IKN221 I had them down for a $9m MOI (the costs guess was nearly spot on, the revs guess at $33m was a tad high). By the way, that 3q13 estimate you see above is probably pitching a bit high and will need to change now. 

So how did the top of the main Fundamentals section of IKN222, dated August 4th, go again Otto?

Hmmm...good question...I can't seem to recall...hold on, let me look check...ah yeah, here it is:
I am both cognizant and wary of Boy Who Cried Wolf syndrome, I don’t like to see it in others and as a result I try my very hardest to avoid it in my own declarations, but this short piece on RIO gets the Fundies space this week because I am basically obliged to bang on the table, ignore my own fears of repetition and tell readers that RIO is indeed a screaming buy right now. 
I want to be as clear as possible so here’s a statement to the effect: The other companies we feature, like and hold as long positions in The IKN Weekly are all fair trades with their own specific advantages and parameters. I see nothing wrong with any of them and as of today I’m a relaxed and happy holder of all positions. But RIO at CAD$2.26 is the single stock you should hold, add or buy in the immediate term (your pocket, your portfolio, your call) as its due for a revaluation based on the news in the pipeline. Gold at $1,300/oz will be enough to see it rise significantly in the days and weeks to come.

 Then a whole bunch of words follow as to why. That was ten trading days ago.

The big news from Argentina's primary elections yesterday

Your humble scribe has been studiously avoiding any mention of the big Senate/Deputies election in Argentina yesterday, because after a pleasant few days of relaxation in the countryside, things like votes in silly countries don't seem to matter much any more. But this story, kindly sent in by reader 'GS', has changed all that. This is the important stuff and must be relayed to you in English forthwith. Or fifthwith.

Voter Masturbates Inside Polling Booth 
After spending more than 15 minutes inside the voting room, authorities went in to see what was happening. He was caught while leaving the school. 
The voting room of Ezpeleta's School 14, in the district of Quilmes, was transformed in a matter of minutes into the scene of shameful and disgusting behaviour. A voter was caught masturbating inside the vote room. 
A man had decided to satisfy himself while choosing the voting paper on which to emit his vote, but raised attention to himself due to the length of time he took to vote, according to the newspaper Panóptico Sur. 
The voter was arrested by police officers after masturbating in the voting room in the school building in which he had to vote. According to the local criminal prosecution authorities, the man had spent 15 minutes in voting in the election, which was why the vote overseeing official went into the room to check for any type of irregular behaviour. 
He was found with a used condom and with traces of semen spread over the voting papers. The woman official informed the police officers on duty who managed to stop the man at the exit.

Goal of the Year (so far)

Here's the second goal scored by Sporting Cristal of Lima Peru versus rival Unión Comercio, during the team's 2-0 victory at the weekend. Star of the show, Unión's goalkeeper Juan 'Chiquito' Flores.


Wonderful.

Copper Mountain (CUM) shot down

Copper Mountain has just reported its 2q13, so go look here at the NR. From the numbers, here's a chart...


...and let us recall that "Cost of Goods Sold" (cogs) do not include a whole bunch of corporate line items that you have to get through before a net earnings number comes up. Now, here's a quote from the NR from company Pres/CEO Jim O'Rourke:


"We are cash flow positive and we will be continuing to improve the operation..."


Now, Mister O'Rourke, I'm taking a good hard stare at that chart I've generated from your company's numbers and especially at the 2q13 results you've just posted and the only conclusion I can reasonably come to is that you need to buy The Big Book Of Business Words, then go to the C's page and read what "cash flow positive" means.


8/11/13

The IKN Weekly, out now


There was no choice this week. More here

IKN223 has just been sent to subscribers. It has photographs.