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1/14/14

Blogger break

Your humble scribe is off doing things with the family for a while. There may be a little light posting next week, but normal service will not resume until Tuesday January 28th. Until then, stay well and kiss the people you love regularly.

1/13/14

Breaking: Venezuela army and police can no longer be prosecuted for killing protesters

The executive order, signed by the President, was published today. Here's the image:



What that says, in a nutshell, is that the law has been altered and that from now on, any member of the armed forces or a member of the police force who kills or injures somebody "in compliance with their duties and using a weapon or other method of defence" cannot be prosecuted afterwards.

Which is a pretty amazing piece of police state legislation and it's all true. Except for one thing. It has in fact been passed as law today in Peru and not in Venezuela, so you'll hear precisely fuck all about it up North. More on the story in Peru's El Comercio, here

The Osisko (OSK.to) Goldcorp (GG) deal: Please allow IKN to translate the latest tweet from Andrew McCreath of BNN because...

...IKN Nerve Centre™ agrees with his take (and as a couple of mailpals know, said as much pre-bell today). Here's his tweet:

That says, "Apart from an attempt to find a white knight (i.e. friendly third party who will pay more), the gold company Osisko Mining Corp (OSK.to) will be bought out by Goldcorp (GG) once a second sweetened bid is offered by Goldcorp. It's too difficult for another senior, Tier 1 mining company to spend one billion dollars in cash at the moment".
What that means in something approaching normal English is that Goldcorp (GG) has pitched its bid nicely for Osisko (OSK.to), but ostensibly at least it's a non-solicited bid (though the chances that GG didn't talk with OSK and try to get a friendly deal done before today aren't very high at all) so the OSK board will almost certainly say "not offering enough".

So, what happens from there? Basically one of four things:

1) GG doesn't offer any more, nobody else turns up to make a counter, OSK holders don't bite, deal fails. This is rated as an unlikely though possible scenario.

2) GG sweetens the deal at least once, maybe twice, finally getting OSK people on board. Deal goes through. This is the most likely scenario and it's the one the market has baked into the pie today by bidding OSK.to up to $6.20 or so.

3) GG sweetens the deal once or twice, but OSK doesn't bite and still refuses the offer. Nobody else shows up then after a battle the shareholders either side with the GG offer and the deal is done, or they go with their board and it all falls through. 

4) OSK gets a second offer from somewhere else and a bidding war starts for control of OSK. That counter may be unsolicited or a White Knight found by OSK. This is rated by your humble scribe (and by McCreath, it seems) as a possible, though substantially less likely than scenario 2 above. Here's something I wrote here on the subject earlier and covers the bases well enough:
It's a bold move by GG, though. On balance i think they've pitched the offer well, it makes enough (not total) sense and i agree they're the best fit for this one, too. ABX has enough on its plate disposing of assets without ponying up for a new mine, working or not. NEM is the only real alternative I see. Others are maybes but only as white knights if the affair gets messy.

All in all, it's the type of M&A action that the mining industry needed at this point and if only for that, GG should be applauded. A nice chunky fight with billions of dollars in play, rather than a few million as seen in other recent deals. I like it, game on.

UPDATE: More reco'd reading is the VancVenture take on OSK/GG, but you must be fluent in ironese to see his greater point. Nice post, PSDave.


Fortuna Silver (FVI.to) (FSM) put in a very good quarter of silver production at San José

Chart here:


Company NR here. Gold was slightly off for 2013 and Caylloma's silver production a little on the soft side for 4q13, but those are gripes next to the main positive. FVI is up in early trading on this and deserves to be.

Disclosure: No current position in FVI


UPDATE: By the way, just noticed that this is the 10,000th post here at IKN. Some sort of landmark, I suppose.

A job for Canadian government mining person in Peru

This is interesting. Looks like the Canadian government wants somebody to go down to Peru and improve their pisspoor environmental image when it comes to mining activities in the country.

The document has been sent to me by a very nice man from the Canadian government website intranet site, so therefore no links available (and a bit of cropping to maintain anonymity was needed too), but the offer is real and kosher.






Anyone up for this cushy government post? $15m to throw at you, little in the way of accountibility, get to play in a foreign country for a year and skip all that subzero thing you guys have. It's the public servant's dream

UPDATE: Thank you reader MM, we now have a weblink for the above. Right here



Chart of the day is...

...Osisko, five years, with a line drawn in at $5.95:



Goldcorp (GG) just put the cat among the pigeons. This should be fun.

UPDATE post-open: OSK pops to $6.15/$6.20 at the open, the market assuming that a sweetener or a counter will happen to this one. Pretty likely I 'd say, just by looking at that chart. If I were a seed holder of OSK I'd be ...(etc etc, you know the drill).

1/12/14

The IKN Weekly, out now



IKN245 has just been sent to subscribers. Just the usual load of twaddle, if I were you I'd move on right now and go back to that star-studded Golden Globe awards ceremony. 

Latin America's fashionable scepticism: Setting the record straight

This is a good note on the state of macro-economic development in the LatAm region. Here's the intro blurb to get you going, click through for the whole thing.

Latin America's fashionable scepticism: Setting the record straight
Augusto de la Torre, Eduardo Levy Yeyati, Samuel Pienknagura, 12 January 2014 
There is a wave of fashionable pessimism over the future growth of Latin America. This column distinguishes between two main types of concerns – related to the trend of the long-term growth, and to the cyclical vulnerabilities of the region. While the first type is partially justified, the second type is not because such concerns overlook two fundamental changes in Latin American economies. First, the de-dollarisation of financial contracts reduces the adverse effects of currency depreciations. Second, a more credible monetary policy was implemented with a substantial decline in the exchange rate pass-through to inflation.
Full article here