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10/19/13

Zlatan. Scorpion. Goal.

PSG vs Bastia today:



Zlatan rules.

For a better quality vid of the goal, go here

The World Complex does gold vs the US Dollar index

I do like World Complex's strange and wonderful charts, they're several cuts above the drossy average of plain and repeated comparatives. Today's examples that give plenty of food for thought are up there with the good 'uns and there's even room to be reasonably bullish about gold's medium term in the information presented. 

I'm not stealing and pasting here, you can go to the original and see for yourself.

IKN recommends: The Economic Geologist

A new blog is in town, started earlier this month and already plenty of very good things to read over at The Economic Geologist (thanks due to twitterpal cooper for the headsup). Just as one example, check out the latest post, a photoessay on how fire assay analysis for metal samples works (great photos).

The Economic Geologist is smart, educational, written by a person who really knows the field and doesn't get bogged down in too much technical language so it's easy to read as well. We fully recommend it to all metalhead readers of The IKN Weekly. Go look.

10/18/13

The Silvercorp (SVM) implosion: Rui Feng "has been resigned"

NR now

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 18, 2013) - Silvercorp Metals Inc. ("Silvercorp" or the "Company") (TSX:SVM)(NYSE:SVM) announced changes to its senior management and board of directors. To focus on his role as Chairman of the Board of Directors, providing the Company with leadership and strategic guidance, Dr. Rui Feng is relinquishing the Chief Executive Officer role. The Board of Directors has appointed Myles Gao, Silvercorp's President, as the new Chief Executive Officer. Mr. Gao, P.Geo., first joined Silvercorp as President in 2003 and has also held the position of Chief Operating Officer. 

Continues here

How will Northern media spin this one?

LAHT reports

"The Venezuelan Air Force has shot down two planes suspected of drug trafficking who ignored orders to land, according to Major General Vladimir Padrino Lopez, the Chief of the Venezuelan Strategic Operational Command of the National Armed Forces, who released the information with a picture of the burned plane on his twitter account. 
"CARACAS -- The Venezuelan Air Force has Continues here"
As for the reporting from EngLang mainstream media, here are your options:

a) Unwarranted act of aggression against people given no presumption of innocence
b) Didn't happen, pictures staged to mask reality
c) Will be totally ignored because it does not fit established editorial line
d) Cuba! Fidel! Ghost of Hugo! Hezbollah!

IKN best guess: C

Sad Canadian junior mining stock working in Brazil is sad

Don't worry Stan*, not Belo Sun this time.


It never ceases to amaze me how poor the reporting of Serra Pelada is in English language media. The stuff coming out in Portuguese recently has been more than interesting, but mushroom politics rules the day up North. 

*You don't mind if I call you Stan, do you Stan?

Thought for the day

You are reading these lines.

You are therefore connected to the internet.

You are therefore more privileged than the grand majority of human beings, most definitely in terms of access to modern technology and most probably in terms of wealth, too.

So shut the fuck up about how tough your life is.

And have a nice weekend.

A week ago (aka “Argentina About To Default! We Recommend You Buy The Argentine Peso Immediately!”)

One week ago, early last Friday morning, we saw a very strange move in the gold market, one so odd that even your non-goldbug non-goldmarket-caring humble scribe decided it needed comment in The IKN Weekly last weekend. Here's how that editiion kicked off (just two words redacted).




Still Bullish
Here follows the disjointed rant of the week. The most interesting price move of the week, as far as I’m concerned at least, came  early on Friday morning when somebody pushed some button somewhere and dumped 2m oz of gold (well, not literally, it was an electronic trade) onto the market and this 5min chart (right) shows what that did to the price of the metal. The move got the goldbug faithful spitting their usual bunch of feathers and looking around for somebody to blame, for anybody to blame, which is par for the course but it got me thinking in slightly different terms to the fist-shakers.
Firstly yes it was a big trade for the size of the market in question (let’s round it to U$2.5Bn in the space of a minute or so) but despite its relative market glamour and headline-making appeal, the gold desk isn’t that big compared to the REALLY big markets, such as US bonds or EUR/USD forex. It’s all comparative of course, because the money that runs through gold dwarfs the market which this publication dabbles in, that of junior mining companies, but if we’re considering gold as a monetary asset or currency and dollar trades through the metal as a type of forex pair, it doesn’t really belong in the bigger leagues.
Secondly, the look of that chart isn’t that bad, post-dumpage at least. Gold sold off at the open but it kept its shape the rest of the day and even made ground back while those around it faded and wilted (I know that because I have the stocks to prove it). It’s the moves of a metal that isn’t expecting another big dump to happen in the days to come, it’s the moves of an issue that has its buyers ready to step up and buy.
Later came a third thought on reading of the technical damage on gold reported by chartists. I’ve read from several sources in the last three days that the current price level is critical and if it doesn’t hold, we’re going to new lows for the year. Well, isn’t that just what we’re required to worry about right now? And while on the subject by way of a slight aside, let’s also note that if gold recovers from its current “critical level” price, the TA enthusiasts will tell us that they were right about calling the current price as key, whereas if gold sinks further they’ll tell us they were...errr...right about...errrr...calling the current price as...errrrrr...key. Class that under “nice work if you can get it”.
OK, enough flippancy, let’s get to the point. Last week I said that I saw October and November as bullish for gold, set myself a reasonably reachable price target for the period and announced adjustments to the Stocks to Follow portfolio that would move it net longer. Last week started ok but faded badly and the result of seeing gold under $1,300/oz this weekend does not jive with my call at all, but that doesn’t mean I’m changing a thing just a week later. Mine is still a near-term call and it’s still about being reasonably optimistic in the weeks to come, faced with a strange backdrop of political and economic happenings (the US political scene first in line there). Gold is just as smart a thing to hold as it was last week and if the fear trade begins to take off, as I believe it will still (no matter if the US lawmakers conveniently find a solution just before a week’s break from duties shows up on the calendar or not), it’s going to take a lot more than a single 2m oz sell order to keep gold from moving up.
It is indeed a strange market atmosphere for gold out there at the moment, one where Alice’s Through The Looking Glass (and therefore Biiwii) come to mind. Market influences are reversed, fear causes gold to be sold, dollar weakness gets no upside reaction from the metal, what’s normally good for bullion’s day-to-day market price is bad. My best guess is that normal logic has been suspended due to sentiment drivers trumping the normal rules, which suggests traders pushing buttons on GLD have the whip hand compared to those who are buying, shipping and holding bullion. Meanwhile, we see people who are scared of a US default buying the dollar as safe haven and driving down prices of other issues (gold included) as a counterparty result. It’s the concept of ever decreasing circles writ large and I can only imagine the reaction if a big bank in Argentina issued an alert along the lines of “Argentina About To Default! We Recommend You Buy The Argentine Peso Immediately!” and how long the author of such an analysis would be able to keep their job, or keep out of a mental health ward.
So yes, there is a great deal of difference between near-term sentiment drivers and longer term value drivers and although I’m no conspiracy theory spouting goldbug, there comes a point when the stupid has to be called out. Last week was weird and I think it was full of signals that are getting far more attention than they deserve. Therefore I’ll stick to the plan of looking for higher gold prices and a trading set-up that reflects that call.


10/17/13

Alberto Fujimori: Bohemian like you

Alberto Fujimori appeared in court today for another round of trials (this time for press corruption), but turned up like this:


Gotta say it goes with his new move into oil painting. (sidebar, special likes for this one, apparently his own work). It also gives me a good excuse to stick this classic on the blerg.

Chart of the day is...

...gold, 60 mins:


Because gold is up. And that's a good thing as far as your humble scribe's portfolio is concerned. Though to be honest a better choice for CotD today would have been the dollar index, because it's far more important

Lend a microcap fcf negative junior miner $600k at 20% per annum interest: What could possibly go wrong?

This is fun. Inca One Resources (IO.v) has this plan to expand its toll milling ops and they want you to fund them. What's more, they're willing to pay you 20% per annum interest on 600 grand over two years if you'd be so kind.


Three observations:

1) It's the kind of interest rate that makes you wonder, tied to fixed assets or not.
2) On the subject of wondering, I wonder what current IO.v equity holders will think of the plan when they find out? After all, IO.v seem to want to keep this one quiet, and also even in the best of cases that's $240k which isn't going to make its way to the bottom line.
3) IO.v works in Peru. Toll milling operations are common in Peru. Peru is a mining country. So why isn't IO.v looking to raise seeding cash inside the country at a more reasonable rate? Or even get the first batch of toll feed from the local sellers on tick and pay them back out of cash flow? Could it be because...nah, fergeddit.

Maybe these dudes should consider Kickstarter...

10/16/13

No, Howard Lindzon, the size of Blackrock has absolutely nothing to do with the fucking size of country GDPs

I'm sorry, but this one just drives me up the wall. It's bad enough when the Apple fanboy mouthbreathers start with their "Apple's cash pile now bigger than Vietnam's GDP" or "Apple is now worth more than Denmark" but to see someone like Howard Lindzon, founder of Stocktwits and supposedly smart about numbers, promote this utter fucking stupidity leaves me with no alternative than to rant and swear a few times on this humble corner of cyberspace. This from today:


No, Howard. No, no and a thousand times no. And I'm now going to explain why in two short ways so that even you can get it. You'll probably get the first one straight off the bat, but it would be nice if you concentrated for the second one as well

1) Go up to Putin and offer him $3.9 Trillion for his country. Hell, stick a 28.2% offer bonus on top and offer him five tril if you like, round numbers and generous offers and all that. Then listen carefully to what he says to you in return.

2) There's a difference between the balance sheet and the statement of cash flows. The balance sheet counts up the assets of an entity (as well as its liabilities, then it plays with the numbers and works out the equity), and that's what the Blackrock number is up there. But a country GDP is not that, it's not assets, it's what comes off of the assets, it's very similar to what's recorded on one of the other bits of paper that accoutants and financial officers file in their quarterlies, the statement of cash flows. The GDP of a country is the gross domestic PRODUCT (did you get that upper-case bold-typed underlined word Howard, you ignorant twat?), it's what a country produces. It's not what it has. Now, if you tell me that Blackrock runs a three point nine trillion dollar annual positive free cash flow* I will take back all the swearing and insults, but if not

CAN WE FUCKING CUT IT ONCE AND FOR ALL WITH THESE STUPID FUCKING DUMBASS FUCKING COMPARATIVES, FOR FUCKING FUCK'S SAKE?

Thanks in advance.

*Y'know what? I'd even take just a third of that come to think of it

Zinc news: It must be October

I think it's a combination of things.
  • LME week gets the base metals people in one place at one time
  • Summer's over, the post-Labor Day return to business is washed through
  • The year and its metals prices are basically set in stone
  • People are natural optimists and want something to look forward to
  • The metals sector is full of bullshitters who'll say exactly what people with money want to hear
  • etc

But the upshot is that every year, at this time of year, you are bound to get the "zinc looking good in the months to come" news report on analysis done by people who'll do just fine if zinc does. And guess what folks, 2013 is no exception. Cue Bloomie.
Zinc may outperform other industrial metals in the coming years as planned mine closures reduce supply, according to Wood Mackenzie Ltd.
“Zinc could be the rising star of the base metals market going forward,” Richard Wilson, chairman of metals at Wood Mackenzie, told reporters in London today. “Zinc could be quite exciting in a couple of years.” etc etc here
I read that this morning with "If I had a dollar for every time..." as the inner commentator. As for the reality of zinc, the only time the Zn's future bright bullshit came true was that 2005/2006 rocket move. Then you can add the bounce back from the 2008 crisis lows if you want. The rest is noise.

The end




Excellence in music: Bomba Estereo, 'Pure Love'

Thanks due to Colombia Reports for the headsup. The new track from Colombia's Bomba Estereo was released yesterday, it's called Pure Love and it's right here.



The vid's ok, the sounds are wonderful. Hit the play button, discover how good all by yourself.

PS: find out more about the group on that ColRep link above

Tip top news stories and interesting articles that you should definitely read today

King1eye does tell us about 10 truths of gold, with charts and stuff. Perfect if you like gold and charts. And stuff

Greg Weeks does good things when talking about the plug dumb way in which LatAm is covered in the US of A. Today's post is no exception.

A very good longread from Cassandra Does Tokyo about the myths surrounding privatizations.

But the bestest of the tippy-top cat's whiskers best today comes via Salmon: This story entitled "Staten Island congressman denies 17-minute sex romp in Brooklyn wine bar " is journalistic brilliance on many levels. 

Mailbag

This mail received today from "reader T, friend of the blog" was so good I asked T if I could stick it up here verbatim. T agreed, so without further ado...


I'm late to this story (Its from mid-September), but the fact that this is even on the table seems completely crazy to me… and actually makes me angry this Wednesdaymorning.
(Reuters) - Canada's main stock exchanges are pushing for regulatory changes that could make it easier for retail investors to participate in small financings long deemed too risky for the general public, a move that could help shore up the country's hard-hit junior mining sector. continues here

As I think of this idea, I picture a conversation at a table:
On one side – is a guy representing the Venture Exchange.
On the other – is a guy representing the droves of garbage jr. companies who can no longer raise money from accredited investors.

Exchange guy says, “Well boys, we would like to see you remain members of our dog-fvck exchange so you can continue to pay listing fees.”

JrCompany guy says, “Hey… funny thing… WE’RE PERFECTLY ALIGNED…because we would LOVE to remain members of the exchange and have a few hundred grand in the kitty so we can pay ourselves salaries and options for another year while golfing 5 days a week and doing no actual work of any kind.

Exchange guy: “Well looky-here JrCompany guy, what we if relaxed the rules so you can steal the very last drops of cash from the pockets of clueless non-credited investors?  We can call it… ‘CrowdFunded Private Placements’!”

JrCompany guy:  “THAT WOULD BE SWELL Exchange guy!  Yay!
“Garcon!  Another bottle of BC’s finest fermented grape-based beverage!  We’re still in business!”


Tahoe Resources (TAHO) (THO.to) makes first concentrate shipment

Here's the news release linked. And here's the price chart:



Oh wait, sorry, that's Osisko's five year chart. Hey, did you know that Osisko made first production in April 2011?

Argonaut Gold 3q13 gold production

Sucked. Here you have sales, which were 4k oz higher than the 26,690oz produced:


Grade down, strip up, production down, company keen on telling us it will make its 2013 guidance (which means just 23k oz to sell in 4q13 in order to make the low end of the 120k-140k frame) but betcha loads they miss on costs this quarter. And not a single word on San Antonio, now there's a surprise. Not.

10/15/13

I agree...

...with all the points VancVenture makes in this post here.

Which is rare.

Guatemala: The myth of the squeaky-clean US

Today's best LatAm political analysis note has that above title, is written by Guatemala/Central America expert Mike Allison and is for your consideration on this link. Here's a line from the report to get things going and get you clicking through to learn more.
By its omissions and lack of context, the US media is failing to tell the story of the Guatemalan civil war in a responsible, just way. That's not just unfair to the victims and survivors of the war: it's also dangerous.
A very good read. The full article here

A Monday melody...

...dedicated to the US Congress:




The Sulliden (SUE.to) bought deal

Reliable word reaches your author that Scotia has a shitload of unsold inventory from the recent $40m bought deal that flopped and left the house holding the bag. No word on how NBF got on, though.

UPDATE post bell: All hands to the pumps, me hearties! Aaaarrrrghh!

The 3q13 junior mining company production report season: A flowchart

This should explain how things are going for the juniors at the moment:


Any further questions?

The McEwen Mining (MUX) (MUX.to) mystery

Can somebody please explain to me in simple terms, using words of maximum two syllables so as not to confuse me, how the fuck McEwen Mining (MUX) (MUX.to) still has a market cap of over $600m? Is he some expert at mass hypnosis or something? Today's 3q13 production report here.


Chart of the day is...

...Kitco's spot gold tracker:


Certainly hope you're not stupid enough to follow those "gold breaks $1,265 and it's going to a new low" chartists. Or in other words, the market just shouted "PSYCHE!" in the TA world's ear.

10/14/13

Take a bow Codelco; Today's best LatAm bizstory



Mining operations are always highly polluting and the people who run them don't give a rat's hind quarters about the environment, you say?

Today President Sebastián Piñera inaugurated the world's largest thermosolar plant at the State-owned Codelco's Gabriela Mistral (aka Gaby) copper mine in Chile. The spec on the project is cool stuff, because not only will it provide 85% of the power needed for Gaby's state of the art SX-EW copper plant (that produces around 150,000 tonnes of copper a year) but it will also mean 15,000 tonnes of CO2 doesn't get put into our atmosphere each year. And perhaps the best bit is that it makes a lot of economic sense as well, because at a ticket price of $26m and scheduled to shave $7m per year off the company's bills over its 10 year contract with Codelco, the hard-nosed capitalist beancounters are smiling too.

As someone who uses a (far more modest) solar panel system to heat his own hot water supply at home (nice hot showers and all for free, thanks for asking) your author stands up and applauds Codelco for its smarts. Fellow large copper mining companies, look to your own future and get wise about this technology.

What Peru's electricity demand numbers for 2013 are telling us

They're telling us that economic activity is picking up again and the Peru Central Bank's latest forecast of a better second half of 2013 than first half is looking spot on.


That thin black line is a 6 month moving average, by the way. Data from here

Chart of the day is...

...copper, dailies:



$3.30/lb matters. $3.20/lb really matters.

10/13/13

The IKN Weekly, out now




IKN232 has just been sent to subscribers. Another brick in the wall