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5/9/15

OT: An oil painting and some music

This is on my wall. It's 1.85m by 1m so it fills a lot of one wall in the office, it's done by a local artist and one of those you buy because it just hits you in the eye from the getgo. That's not always a good thing with art but this one has turned out fine, it's really grown on me and is a pleasure to own.


And this is on my speakers:



It's done by two internationally ultra-famous artists. It's very good background for writing the weekly and I love it as much as the painting. If Bach were alive today he'd fully approve of Daft Punk. He'd probably be doing something similar, in fact.

Roxana Baldetti, Vice-President of Guatemala, resigns

Mike Allison over at Central American Politics has the story and he covers both the main event and the background very nicely in this post. Excerpt:
"The big event of the day, however, was the resignation of Vice President Baldetti. She has yet to be formally accused of any involvement in the corruption scandal but I assume that's only a matter of time. At best, her private secretary oversaw the looting of $100 million from the people of Guatemala right under her nose. I'm not sure anyone can seriously believe that to be the case. She has been connected to unexplained wealth for the entire term."

The most visited IKN post this week is...

...this one, "Pacific Rubiales (PRE.to): Who the hell is Volbor Trading?".

This is an example of one of the most simple ways a single post gets a quantity of hits. You write on a company that's in the wider news, you provide a different angle and you stick a near-unique keyword in there (in this case Volbor). It then gets hits from people looking for PRE.to news, it also gets hits from others who have noticed the Volbor connection. It then goes a little (or sometimes a lot) viral when people start linking your little snippet to others who may care.

It's at times like these I remind myself how much more "popular" and "influential" IKN could be. After this many years doing this thing, you'd need to be pretty brain dead not to notice the patterns that repeat. There's this above and a whole bunch of other ways, but I really don't give a fig about all that brand expansion malarkey. I write what I feel like writing and in that way IKN mostly stays as a backwater blog which appeals to a pretty specific niche. What's cool about that is the number of regular readers.

5/8/15

McEwen Mining (MUX) (MUX.to) 1q15

MUX reported a few minutes ago on Friday evening and Robbie Mac's thing has stuck in a good one for a change, with a net profit of $6.021m (2c EPS). San José turned out to be a light load this quarter (the mysteries of Hochschild work in favour of MUX for once) and let the decent operational performance put in by El Gallo I flow down to the bottom line. 

A detailed look on Sunday, subbers.

The Friday OT: Pet Shop Boys; Rent

A few songs are ageless, most age badly, but there are those like Rent which have aged, but gracefully. Not all Pet Shop Boys songs stand up to time (for example, do what I did yesterday, listen to Suburbia or Heart) and Neil's voice was never up to much, but they are forgiven everything thanks to songs like Love Comes Quickly and above all this one, which among other things gives us the line of the Thatcherite 80s: "I love you, you pay my rent".



Well-made pop music dedicated to the David Cameron win yesterday. History doesn't repeat, it rhymes.

Some non-sarcastic, serious, sincere advice for Frank Giustra

"Le secret des grandes fortunes sans cause apparente 
est un crime oublié, parce qu' il a été proprement fait."
Honoré de Balzac

Frank dude, whoever's running your personal PR, sack them now. Whoever told you it was a bright idea to put out a press release is an idiot, whoever got you to agree to a Q&A with the NatPost guy is a moron. Stop talking to the press about being annoyed over your links to the Clintons. It doesn't matter if they're totally true, totally false or somewhere in between. It doesn't matter how innocent you think you are, or how wonderful, or how successful, just STFU and stay that way. 

Three basic things to get in your head now:

1) They will not stop. Look at how the right wing nutbars whack on about Benghazi for your model. If you feed them in any way, shape or form they will just come back for more. Your only recourse is to 1) answer that phone 2) hear who it is 3) if it's one of the nuisance guys state you have no comment to make (or in your case, hire somebody to answer your freakin' phone for you and they'll do it) 4) hang up 5) repeat as necessary. It won't stop them, but give it a few weeks and you'll be off the top of their menu.

2) Nobody likes a rich whinger. Nobody. If you've made it, stop complaining. If you have a complaint, keep it to yourself because however innocent you might be, you'll get zero zip squat nada sympathy at the court of public opinion. Repeat: Just STFU and stay that way. You have a crapload of money, go enjoy it and keep your head down. If you have the unfulfilled need to be loved, buy a dog.

3) That de Balzac quote has an exact translation, but it's usually paraphrased into "Behind every great fortune is a great crime". So if you really, really REALLY want people to look into how you made yours, just keep attracting attention to yourself.





Scotia on Lundin Gold (LUG.to) today is a microcosm of the sellside scene in mining

Yesterday Scotia initiated coverage on Lundin Gold (LUG.to), with the fanfare rollout this Friday morning. Hey wow, outperform rating, now there's a surprise. Hey wow, 76% upside to target, sure to get them clientele greed glands flowing:



The result: The Lundins' snazzy new gold thing, the big fat gold project they bought from Kinross that's getting all the "oh yes we love mining" talk from the Correa government and as an equity issue is guaranteed heavy sellside brown-nosing due to its owners gets...2,500 shares traded yesterday and 23,900 today (to midday). Yay, go sellside.

Not that your jobs are in jeopardy or anything, guys...


Focus Ventures (FCV.) news

Oversubbed from $3m to $4m on a boring, non-metallic project that's going through the boring infill stage on its boring grey geology thing? What can be going on? Is it possible that the quiet, under-radar market pros are seeing some serious value being created here and want in? We should be told.
May 8, 2015; Vancouver, Canada: Focus Ventures Ltd. (FCV.V) announces that in response to demand, and to provide additional working capital to fund planned development activities at its Bayovar 12 phosphate project in Peru, the Company has increased the size of its proposed non-brokered private placement financing, previously announced on April 9, 2015, to a maximum of 20.0 million units at CAD$0.20 per unit, for proceeds of up to CAD$4.0 million. The financing remains subject to TSX Venture Exchange approval.

The Belo Sun (BSX.to) 43-101 Feasibility Study has been filed on SEDAR

Just so you know. 484 pages, 21Mb, bets if you load it from there. Headsup done.

UPDATE: This part is interesting, on pages 317 and 318. I mean, doesn't it strike you as odd that this is a Feasibility Study and the Feas compilers are allowed to look at the company's environmental application documents? Or how there's a November 2016 clock ticking on the EIA and "some work has been initiated" on it?


Under the Broad Application System, mineral exploitation is licenced in three consecutive phases (Preliminary Licence (LP); Installation Licence (LI); Operating Licence (LO)) under the requirements stipulated in CONAMA Resolution No. 237/1997 and Federal Law LC n. 140/2011, as described below. These requirements are governed by the Brazilian Institute of Environment and Renewable Natural Resources - IBAMA, the State Environmental Agencies or the Municipality Authorities, according to the distribution of competences established by Law. To date, the licencing process for the Project has been under the jurisdiction of the Pará State Environmental Agency, SEMA.

Preliminary Licence (LP)
The first stage of licencing, wherein the licensing agency evaluates the location and design of the Project, confirms its environmental viability, and establishes the basic requirements for the next phases. An Environmental Impact Assessment (EIA/RIMA) was prepared (Brandt, 2012) and served as the basis of an LP issued for the Project by SEMA in February 2014. The Project has been the subject of some controversy and the LP has been the subject of several legal challenges by the MPF (Federal Public Prosecution Service of Brazil) since its issuance, however, remains in force. Conditions listed in the LP discuss a range of both required and recommended actions to be taken by Belo Sun. Within 1,095 days (until the end of November 2016), these must be completed or be under progress consistent with the development stages and timing of the Project. Overarching themes include:

▪ Further investigation of potential impacts to nearby Indigenous communities and landscape ecology;
▪ The development and implementation of programs aimed at supporting local people and communities;
▪ The development of environmental management plans, including those for water control, waste management and erosion and sediment control;
▪ Monitoring programs for socioeconomics, health, and flora and fauna; and
▪ Management programs for road safety, among others.

Belo Sun has established plans to fulfil the obligations of the LP and some work has been initiated. ERM has not evaluated the adequacy of these plans. 

Installation Licence
An Installation Licence (LI) is required in order to commence with the construction of the Project. At the time of writing the LI application is under development by Belo Sun and its consultants. The LI application must present details on the design of the proposed project and the environmental and social protection measures that will be implemented. Further, the LI application provides an update on the ongoing environmental and social studies required as part of the LP conditions. The Project has undergone changes since the completion of the EIA and the issuance of the LP.

The LI application updates the evaluation of potential environmental and social impacts based on the updated Project footprint. The LI application was not available for ERM review at the time of writing.

5/7/15

UK elections, exit polls, the British Pound

Here's what the markets think of the BBC election exit poll that has the Tories doing much better than expected and forecast to win 316 seats:



To be honest, I'm not convinced by this exit poll. They're not nearly as accurate in the UK as they are in other countries and as the 1992 BBC poll that called Major the loser when he went on to win it (quite comfortably) shows, they can call them very wrong. True that the 2010 exit poll was accurate and this one may turn out to be right too, but still...be leery now, save heartache later. Nobody should rush to judgment on this one (though the market seems to have done just that).

UPDATE: And what this means is...


...that exit poll is being confirmed as each hour passes. The Tories have this one, with the backup story of the day how the SNP is in Full Braveheart mode and winning virtually everything North of the border. 

Stansberry Research buys Casey Research

This is good. Lump all the scum into one box. Easier to avoid them all.

UPDATE: To stop the mails:

1) Yes it's true. I'm not making this up.
2) Sadly, some scumbags are not going in with the package. Marin Katusa has started his own thing, called "Count Dracula Research" or something (check the photos, you'll see what I mean, example below).
3) Also Porter Stansberry may be a scam-runner but at least he has some taste as he's canned David Galland. Oh wait, sorry, that's "Galland has decided in a purely voluntarily manner to retire after a long and successful blah blah blah" etc etc.
4) As for the price of the deal, I have no idea. Best guess a box of Cuban cheroots, compulsory purchase of three of those perma-vacant lots at the Estancia in Argentina and assume the Casey Research bank debt. But that's just a guess.





A thought on Barrick (ABX)

Right here:


Latest from the Guatemala corruption scandal

Yesterday's ruling flew under the radar of just about all the English speaking media. Maybe they think Guat is small and unimportant in that special gringo-splainin' way they have. If so, wrong. Wrong, wrong and thrice wrong, this big story's getting bigger and bigger. Here's Latin America Daily Briefing with the need to know, it starts this way:
"Guatemala's Supreme Court unanimously ruled that Congress can strip Vice President Roxana Baldetti of immunity, forcing her to face an investigation regarding a customs corruption racket allegedly led by her personal secretary. Intercepted phone calls link the VP to alleged bribery to avoid customs taxes..."

How Lionel Messi did Jérôme Boateng last night

Let's be clear, Jérôme Boateng is no slouch as a defender, he's starting pick for the magnificent Bayern Munich team because he's good at football, period. But I couldn't get the thought of what Lionel Messi did to him out of my mind last night. Did he just trip over? Was it something Messi did? So this morning I found this Youtube that has a decent quality replay from a couple of angles and took these screenshots.

1) Messi gets ball, engages defender.

 2) Cuts inside
3) Takes second touch to the inside...
4) ...and then suddenly...
5)...he takes a half step with the right foot, pulls all his body weight over (check the hips) and turns Boateng inside out.
6) Boateng is off-balance but needs to get a foot to the ball, his only choice is the left foot, but as one thousandth of a second ago Messi was going across him and the penalty box, he was anticipating with the right.
 7) So he tries to lift the left leg, the ball's already gone, and...
 8)...goodbye.

From there, Messi then makes a chipped finish over the best goalkeeper in the world look like a training exercise. Off-chart skills. Screenshots from this decent two minute highlight Youtube :



Chart of the day is...

...the US Dollar index (USD):




BEWARE THE CAMEL! IT WILL BOW ITS HEAD AND DRINK DEEPLY!

UPDATE: Reader MP chips in: "I like your chart, but the camel should be facing the other way"

A quick one on the 1q15 of three silver producers

Endeavour Silver (EDR.to) (EXK): Sucked less than most. It was a better quarter from a company that usually disappoints, the question on ops is how much the mill feed changes in the next couple of quarters will affect costs. But this one, which I've never loved, is in a decent financial position. Bad Crooke must be pissed how it got sold off in the last couple of days on the back of these numbers, for once it was selling it didn't deserve.

Great Panther Silver (GPR.to) (GPL): Didn't look like it sucked, but it did. The bottom line profit of $3.6m in Loonies was because of a positive CAD$6m adjustment on its forex. At least it managed to scrape gross profit this time, but once office charges are thrown in, it's still running at a loss. The silver lining (geddit?) is that cash costs dropped, but not by enough. This is the one you buy if you like style more than substance, horrid.

First Majestic Silver (AG) (FR.to): Sucked a bit. When you check the balance sheet and see the negative U$12.6m working cap you 1) realize why FR.ro raised CAD$30m in that equity placement after quarter end and 2) wonder whether they're going to need another one soon. As for ops, you can point to this-positive and that-negative, but the bottom line is that it's just another silver miner waiting for metals prices to rebound so that it can start making a profit. Running to stand still.

So of the three, Endeavour Silver is best. Or least worst.

5/6/15

Good news from Toromocho

Peru's Ministry of Energy and Mining today released the nation's mining production figures for March (better late than never, guys) and here's a stand-out stat from the datadump:



Chinalco's Toromocho, which has been ramping in fits and starts, put in a kick-ass month of March with 15,568 metric tonnes. Basically the first month it's shown what it can do. 

Frank Giustra's Patsy Cline karma

It must be karma. You should have kept your word, Frank. You should honour your bets, Frank. Now look what the universe is doing to you, Frank. 

Then again, it's more likely be the really, but really stupid way he pinned "Hello North American journalists here I am eat me for freekin' breakfast why don't you" on his shirt front by writing what's on that link a few days ago.

Who's the patsy now, Frank? From National Post/Vancouver Sun today:
VANCOUVER — This seems out of character: Frank Giustra, one of Canada’s wealthiest and most guarded businessmen, is openly seething. Smacking the boardroom table and swearing.
“I can’t deal with this anymore,” snaps the mining and entertainment magnate. To his horror, he’s become hot political fodder south of the border. All because of his close relationship with former U.S. president Bill Clinton, suggestions of influence-peddling through related charities the two men established and a growing scandal ensnaring Hillary Rodham Clinton.
“I’ve spent the last 10 days doing nothing but dealing with media calls. I can’t get anything done,” Giustra says, his voice starting to crack the longer our interview inside his downtown Vancouver office this week continues. “It’s out of control. It’s a f—ing circus.”

continues here

A Leo Zen question

If a Boateng falls in a forest and just 92,000 people are around to see it, does it make a sound?




Coastal Gold (COD.v): The FF.v bid is gaining traction

The news this morning that the Bharti cronies at Coastal Gold (COD.v) have put a meaningful delay on the EGM (instead of the fakey one from yesterday) shows that the First Mining Finance (FF.v) competing bid for the company has Bhartistan rattled. It also shows on the price chart:




Here's IKN's guess: Sulliden (SMC.to) ups its bid in the next 24 hours, COD.v tries to pretend it's the best deal, it then goes to the wire. 

Primero Mining 1q15 earnings

IKN can confirm...


...that buying Brigus was a fucking stupid mistake. And I know that I said I wouldn't use strong swear words any longer, but sometimes there's no choice. Anyway, get the spun-to-death numbers from the P release here. 

Pacific Rubiales (PRE.to): Who the hell is Volbor Trading?

With the now-confirmed news that Pacific Rubiales (PRE.to) is getting bought out by the Alfa/Harbour Energy double-act (Setty on the ball as always), thoughts turn to those using insider information to get rich quick:




Never heard of before, some outfit called Volbor Trading Ltd comes out of nowhere and buys up 2.66m shares of PRE.to just days before it gets bought out at a much higher price, netting the Volbor people close to $6m for a week's work. Nice work if you can get it of course but the thing is, very but VERY little comes up on the Googlymachine about Volbor, which is more than weird for a financial entity. 

Therefore, Canadian regs bodies, you have a job to do. If you're not as totally corrupt as I think you are.

UPDATE: Ah, it's Derwick Associates:


UPDATE 2: And good morning to George Pyper of Endeavour Financial. Beats me why he might find any thoughts of illegal insider trading in PRE.to interes....ah yeah, that'd be why.

Chart of the day is...

...zinc:


In mid-April we noted it scraping at a Buck, here we are three weeks later and the rally's got it close to $1.10/lb. But as we've seen this price level fail far too many times in our rollicking post-Lehman world, the number that will really impress me is $1.20/lb. Until then, colour me skeptic-

5/5/15

Reuters: Pacific Rubiales (PRE.to) bought out at CAD$6/share

Spanish language version of the story here.

Basially, according to an insider who didn't want to be named because the news isn't official yet, Harbour Energy and Alfa have gone 50/50 and bought out PRE.to, price tag CAD$6/share.

If true that would also explain the rocketing price action of the last couple of days.

UPDATE: OK, here's the EngLang version:
Reuters) - Mexican conglomerate Alfa Sab de CV (ALFAA.MX) and Harbour Energy Ltd have agreed to acquire Canadian oil and gas company Pacific Rubiales Energy Corp (PRE.TO) for C$6 billion, including debt, a person familiar with the matter said on Tuesday.Pacific Rubiales is the largest independent oil and gas producer in Latin America. Its shares have plummeted more than 80 percent since oil prices began to slide last summer. Alfa, which already owns a 20 percent stake in the company, decided now was the time to pounce.
Alfa and Harbour have agreed to pay around C$6 ($5) per share for Pacific Rubiales and will each own half of the company, the person said, asking not to be identified because the deal is not yet public. Continues here

Catching up on the very recently featured juniors Argonaut, Coeur and TIMMEH! Gold

Between last night and this morning pre-bell, IKN featured three PM producers that had reported their respective quarters between the bells:

And on the back of those results here's how those three got on today, compared to the junior miner ETF (GDXJ) as a benchmark (FWIW the seniors ETF GDX put in almost the same performance):



So it was a down day, as witnessed by a 2% drop in GDXJ. But AR.to sucked, down 4%. And CDE really sucked, down a splatworthy 7% in one day. Neither a surprise and in fact there were very few mining stocks that managed to tread water today, but among that small handful was...TIMMEH! 


Video dedicated to Iwnattos.

Tia Maria (SCCO): Because there obviously haven't been enough protesters killed there yet...

...another one dies today. Shot by police. Bless 'em.

So next week the Arequipa region of Peru gets a 72 hour regionwide strike in support of the protest, instead of the mere 24 hour of a couple of weeks ago.

UPDATE: Here's a link to an English language report on the death, from Global Post/AFP. Here's how it starts:

One person was killed and two others injured Tuesday in clashes between police and demonstrators during a seventh week of protests against a mining project in southern Peru, the Interior Ministry said.
The fatality was the second in recent weeks as protesters rally against the $1.4 billion Tia Maria mine in the country's Arequipa region.
"We confirm a death and two injuries following violent clashes in the city of Mollendo," Interior Minister Jose Luis Perez Guadalupe told reporters.

Full report here.

UPDATE 2: The autopsy report stated that the victim, Henry Checlla, was hit by two bullets shotgun pellets (lead, gauge 12 or 14) in the back, one of which left an exit wound in his chest, perforated one lung and his heart and was the cause of death. Then in a wonderful extra touch that's a microcosm of the whole issue, his funeral courtege was attacked with tear gas by police. Classy.



CUM shot...

...a lot higher last week and what's more, Copper Mountain (CUM.to) has managed to consolidate those gains this week too:


In round numbers, a 30% pop and that's not shabby at all. All on the back of the move in the copper price, of course, aided and abetted by the improving Loonie.

Which shouldn't have been any surprise to those of you watching carefully. CUM.to has been the butt of jokes here at IKN for a while (Puerile? Moi?) but in the last installment "Serious CUM talk" we made an effort to go behind the crappy results it keeps spurting out at us and talk about what's really wrong and right with the company. Here's an excerpt from that post:

"...this perenially underperforming company isn't showing better operating margins. Costs keep eating into too much of that revenues number and we should be seeing better margins from a company that pays in Loonies but sells its wares in USD.  
The debt on the CUM books is heavy, but most of it doesn't come due until the next decade and the next two years are very light in repayments. The company has financial time and isn't going to feel a cash crunch, but it's been a poor operator for way too long and its management team has to come under deserved scrutiny one of these days, you can't get a pass like this forever.  
If I were Mitsu, I'd look for the moment to buy these jokers out and then put in a team that can actually run this company. One thing's for sure, if copper rebounds the Loonie will go with it and you'll suddenly see eyepopping net profits coming from this one."


In short the opportunity here is the better copper prices that should widen operating margins, plus the way in which the loonie's rebound will take pressure off that Dollar denominated debt and allow CUM.to to post strong bottom line profits in Loonie terms. The risk is that the jokers running the show fail to put in the type of production the mine is capable of AGAIN and snatch defeat from the jaws of victory.

Bottom line, for those with a penchant for risk and a liking for copper from here, it may be time to swallow CUM (into your portfolio, of course). Of maybe you're like me, don't trust this management team to put together more than one quarter of decent operating performance, and keeping spitting it out. Fnarr fnarr.

Mo' Coeur (CDE)

Your humble scribe guffawed, yokked and chortled when he saw Coeur (CDE) getting bought at the open this morning after its plain awful set of numbers last night:




Seriously, those brain dead desk jocks will buy anything on a splashy headline. Total madness.

Argonaut Gold (AR.to) damned (itself) by faint praise

The Argonaut Gold (AR.to) 1q15 results NR this morning starts by screaming the following headline:

Argonaut Gold Announces First Quarter 2015 
Revenue of $51.0 M; Cash Balance Builds to $64.0 M

Tooty toot toot toot, so let's remember the first rule of the parallel universe that is mining company news releases, that they always contain the absolute best spin possible on the event or issue in question. In this case, if AR.to only has a revs number and a cash balance to boast about things can't be very good. In fact, it all gets a bit too much when CEO Pete Dougherty* wobbles on with the same schtik later...

"Argonaut achieved tremendous operating results during the first quarter of 2015. In addition to a strong quarter of production, we added $13 million to our cash balance..."
...so let's lay this cash thing to bed right now. Here's the current assets section of the AR.to 1q15 balance sheet:


Seriously, what's the big freakin' fuss? I'm quite sure they're not going to blast "HEY LOOK EVERYBODY! WE MOVED OUR CURRENT ASSETS POSITION UP THREE HUNDRED AND FIFTY-THREE THOUSAND DOLLARS!" to the world in the same manner, but when push comes to shove that's what they're doing here.

This type of style over substance bullshit from AR.to is precisely how this sector got into the trouble it's in today. Mediocre management whistling past graveyards and fakey faking that everythings's gonna be all right.



*Say hi to Kate Moss for me next time, Pete

Your easy guide to the UK General Election, in one simple chart

The British Pound in 2015:

5/4/15

And another air accident at the Nazca Lines in Peru

The Wild West show Peru fobs off as tourism which has killed many people over the years strikes again. This photo from today Monday afternoon, just after the 5:30pm crash landing:



This time the light aircraft (which like all the Nazca fleet is overflown and undermaintained) lost power on take-off and crashed about a kilometre from the airstrip, taking down roadside electricity poles along the way. Luckily no deaths this time (to the time of publishing at least), though the four tourists and the pilot were all injured and taken to the local hospital.

My amazement about how Peru can be so proud of its Nazca Lines and not give a single shit about the planes that fly over it continues.

Timmins Gold (TMM.to) (TGD) 1q15 earnings

Timmins Gold (TMM.to) (TGD) filed its 1q15 numbers about an hour ago this fine Monday evening (no NR from them yet though, that'll probably come pre-open tomorrow Tuesday) EDIT: Here you go, late night extra. Here's how the general overview operations chart stacks up:


Here's a sample from the balance sheet:


With a pre-tax loss of $0.107m and a net loss of $0.71, it's hardly the disaster quarter the market baked in on the release of the soft production numbers.

And on the subject of working capital, Coeur Mining (CDE) has just reported its 1q15

A few weeks ago, I had an interesting exchange with reader M who made his case for Coeur (CDE) being the absolute Number One worst run mining company in The Americas. To be honest CDE isn't a company I've ever followed very closely, mainly because it's always been unattractive as a potential investment and keeps coming out with some very weird deals (these are the people who bought Orko, after all). However M made the case that there was more than simple mediocrity running this show and it was in fact a staggeringly bad company. He made the case well, too.

So when CDE reported its 1q15 this evening I was more interested than before. First stop's always at the balance sheet round these parts and...


...WTF is that? Dear Coeur people, where has all your money gone?

Nevada Copper's (NCU.to) working capital

Hey, remember when Nevada Copper (NCU.to) booted its liquidity problem into the future by raising cash late last year and sticking it on the long-term liabilities? Yeah, me too. Well the debt's still there on the books...


...but the cash is now getting worn down again...


...and we're in back negative working capital territory as a result.



Do you also remember all that fancy dancey stuff about getting the U/G mine done and cash flowing as from 2015? Well...
Development Schedule
The Corporation is completing an updated Integrated Feasibility Study targeted for release in May 2015. After the results of this feasibility study are in hand, the Corporation will be in a position to reassess the development options available for Pumpkin Hollow, and the available sources of financing, in the context of the market at that time. The options include a staged development (Stage 1 underground and Stage 2 open pit), and the “integrated” development option with a single large process facility and dual sources of mill feed from the open pit deposit and underground deposit. Under either scenario production could commence as early as 2018 subject to receipt of funding.
What's good for Red Kite isn't necessarily good for you, dear retail shareholder.

Chart of the day is...

...the gold/copper ratio:



How low can it go?

A reminder as to why Stan Bharti is poison to retail shareholders

Here's a repeat of the post "Sulliden (SUE.to): In which IKN explains why you should never invest in a company run by Stan Bharti" dated March 2012 which along with some timely exposure by BNN TV in Canada managed to help stop Bharti and his scamming cronies from getting away with legalized robbery at the time.

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Sulliden (SUE.to): In which IKN explains why you should never invest in a company run by Stan Bharti

The short explanation is that Stan Bharti and his Forbes Manhattan cronies only care about inserting the maximum amount of banknotes into their own pockets at the expense of others. Here comes the longer answer.

True with the very recent example of Aberdeen International (AAB.to), which is well documented in this script (and here's how the piece starts):
How to Pocket $5MM For Losing Over a Quarter of Company’s Assets in Only Six Months

It was a tough year to be a shareholder of Aberdeen International ( AAB.TO). In the first six months of 2012 the net loss amounted to over $26MM or over 25% of the assets, the net asset value (NAV) at the end of the period was less than $72MM (from $136MM in the early 2011), the share price declined 40%, and the market cap dropped under $35MM. But while shareholders felt the pain, the management was doing great: “salaries, consulting, benefits, and bonus” increased sharply compared to prior years: for the past six months it was $5,459K compared to $600K in 2011 and $798K in 2010. Most of the difference was due to increase in the “key management remuneration” which added up to $4,870K in benefits and shares – 7% of the NAV and almost 15% of the market cap - in just six months. By any reasonable measure, the “key management” awarded itself compensation that is way out of proportion to company’s overall performance or assets.

Aberdeen is lead by Mr. Stan Bharti who is not a stranger to excessive compensation questions. Only this year a similar situation took place at Longford Energy, where Bharti-led management gave themselves seven figures bonuses before being finally unseated by dissident shareholders. And at Bharti-led Forbes and Manhattan Coal ( FMC.TO), where Institutional Shareholder Services (ISS) just this month highlighted excessive executive compensation issues and shareholders are fighting to replace the board (1).continues here

And now Bharti's hit mob are about to have their jolly way with the treasury at Sulliden (SUE.to), another F&M company. On October 5th (that's this Friday) the AGM gets to vote on this brand new bonus payments scheme cooked up in cahoots and as the Bharti companies have their votes locked down, you can bet the house it's approved.


So let's see...

As SUE.to now has the M+I resource at 2.438m oz gold, that's 1.548m oz difference and good for a $2.3m bonus to the pool of directors.

As for the inferred resource, that's 3.256m oz and apparently good for $2.9m in bonus payments. To add insult to injury on this one, nearly half that inferred total comes from the sulphide resource and nobody has a clue as to whether that will be economic or ever mined.

Next, the IRR bonus, which is a crock of shit because we don't know whether it's based on pretax or post-tax for one thing. Not only that, but any fool can offer up a high % IRR just by changing the gold price assumptions. In the recent feas study results, SUE.to offered us a 52.2% IRR which suggests that directors get to pay themselves $2.1m in bonuses.

Next, these jokers get $2m just for handing in an EIA to the Peru government! It can be a total crock and get rejected, but that doesn't matter, ka-ching $2m, but if it gets approved, it's another $2m in bonuses.

The next line items are no less audacious but speak for themselves and mean SUE.to directors get $12m more to carve up amongst themselves if the mine gets to commercial production.

And then note down the bottom, that they're not that worried if the share price goes up. Cash is king in Bharti's world, but if by some miracle they haven't smashed the retail holders into tiny bits by this point, they can award themselves a bonus on share price performance, too. 
And as for that share price performance...


Down 35% in the space of a year...yup, that's what earns you $7m in bonuses in World of Bharti.



In short, on Friday October 5th, SUE.to will vote and pass the resolution that immediately puts $7.3m of company cash into their back pockets, another $2m by the end of the year when the EIA is handed in and a potential to add $14m more if (big if, considering its location in Cajamarca) it ever gets off the ground. The moral of this story: Don't let Stan Bharti and his band of self-serving lackeys rip you off and take your money. Let somebody else be their patsy.

UPDATE: Best mail feedback so far comes from reader 'P' who IDs himself as a shareholder in SUE.to and then goes on to say:

 "...I knew nothing about this! Why didn't my broker tell me about this?!"

That, reader 'P', is a very, very good question. However, if I were you I'd ask your broker about it rather than this humble scribe. And by the way, just to be 100% crystal on this I have no position in SUE.to, not long not short not anything. My only opinion on this stock "avoid like the plague" and I take my own advice.

First Mining Finance (FF.v) ups its bid for Coastal Gold (COD.v)

Interestinger and interestinger, Keith Neumeyer going WANT WANT WANT. Presumably, the next bit is where Stan's cronies tell us that 3c is better than 6c. Here's the link, here's the NR:

PS: Full disclosure: I do not own any COD.v, FF,v or (heaven forbid) SMC.to.

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VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 3, 2015) - First Mining Finance Corp. (TSX VENTURE:FF) "First Mining") announces that it has delivered a renewed definitive, written proposal to acquire all of the outstanding common shares of Coastal Gold Corp. (TSX VENTURE:COD) ("COD") on the basis of 0.15 common shares in the capital of First Mining for each COD common share by way of a plan of arrangement under the Business Corporations Act (Ontario) (the "IncreasedProposal"). The Increased Proposal represents an increase of 0.028 First Mining shares from First Mining's proposal delivered to the COD board of directors on April 26, 2015, and represents an increase in the implied value of First Mining's proposal by $0.01 per COD share.
Based on the closing prices of each of First Mining, COD and Sulliden as of May 1, 2015, the Increased Proposal implies a value of $0.06 per COD common share, which represents a premium of:
  • 167% to the implied value of $0.0225 per COD common share under the Sulliden Agreement (the total value of Sulliden's offer being $3,807,618 as opposed to the total implied value of First Mining's offer which is $10,153,649);
  • 261% to the unaffected COD common share price on February 27, 2015, the last trading day prior to the public announcement of the Sulliden Agreement; and
  • 100% to the current market price of the COD common shares.
The Proposal was delivered to the Special Committee of the Board of Directors of COD earlier today and is not subject to any financing or due diligence condition. In order to accept the Proposal, COD is required to terminate the Sulliden Agreement by no later than 5:00 pm (Toronto time) on May 9, 2015. COD is entitled to terminate the Sulliden Agreement in certain circumstances, including if it is unable to obtain the approval of its shareholders to the revised proposal by Sulliden announced by COD on April 28, 2015.
"We continue to be very interested in a business combination with COD which we think would be in the best interests of our shareholders and the independent shareholders of COD," said Keith Neumeyer, Chairman of First Mining. "Even though Sulliden has increased its offer that offer is still worth far less than the current market price of COD shares. We find it difficult to understand how the COD board could reject our offer in favour of a weaker offer from Sulliden. We are now increasing our offer so that all shareholders of COD can be aware that there is a clearly superior alternative to the Sulliden offer available to COD shareholders. Our renewed offer can only be accepted by COD if the independent COD shareholders vote down the undervalued Sulliden offer and we again urge all independent shareholders of COD to vote against the Sulliden offer. We are also calling on the board of COD to postpone the COD shareholder meeting to allow the independent shareholders of COD to make an informed decision on which offer they believe is better."
First Mining cautions that there is no assurance that the shareholders of COD will not approve the Sulliden offer; that COD will terminate the Sulliden Agreement in accordance with its terms; or that the Proposal will be completed on the above terms or at all.
About First Mining Finance Corp.

The IKN Weekly, out now


beer mmmm beer mmmm beer mmmm beer mmmm beer mmmm beer

IKN312 has just been sent to subscribers. It's one of the better recent efforts, I think. 

May The Fourth be with you.

5/3/15

Anonymous Activist Gets Potholes Fixed By Drawing Giant Penises Around Them

Via Ritholtz, an initiative that deserves to be repeated all over the world. A way in which you too can show your local government how much respect it truly deserves, with a positive result for one and all to boot. 

Link to the story right here.