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6/6/15

What really matters


and then this

JGMS does Brent Cook

The blog Junior Gold Miner Seeker links to a couple of things done by Brent Cook recently, namely an interview and his presentation at Canvest15, and provides a couple of notes too. Right here.

PwC: The Gloves Are Off

On this link is the PwC 2014 mining review, which was published yesterday Friday. It's a chunky, meaty, fundies-filled PDF with lots of food for thought. A good weekend read for anyone in the sector, it's entitled the year "The Gloves Are Off". You'll see why in the intro.

The most visited IKN post this week is...

...this one, "The scene this morning at the 2015 Canadian Investor Conference in Vancouver".

It was a close-run thing, that one only snagged first place by a single hit. As for a little extra on the content, Canvest 2015 was said to be near-deserted by several people who reported back snippets to your author. For example, supposed "main" speakers got 50 or 60 people to watch their presentation in a hall that seats 300. This is the junior world in which we live right now, with explorecos who have no money to set up displays at trade fair that are on their doorsteps and people who simply don't care about the sector after years of wasted money. And Cambridge House trying to pretend that everything's all right. 

6/5/15

Morgan Stanley comes for TIMMAY! (TGD) (TMM.to)

At the close this afternoon, Morgan Stanley suddenly decided that it wanted to own as much TIMMAY! Gold (TMM.to) (TGD) as it could and bought on both tickers. Here's the TSX chart as example.



We shall likely find out Monday, but this smacks less of a fat finger than the Dalradian close we noted last Friday. Until then, IKN leaves you in the capable hands of...

Colombia: Daughter of National Civilian Protection Agency kidnapped

Colombia Reports has the story

The 11-year-old daughter of the director of the NPU, Colombia’s government agency in charge of protecting threatened civilians, has been kidnapped, authorities said Thursday. 
Police and prosecutors intensified their search for Daniela Mora, the daughter of National Protection Unit Director Diego Fernando Mora, who was kidnapped Thursday afternoon by what appears to be street criminals in the eastern Colombian city of Cucuta.

Continues here

The Friday OT: Bach; Brandenburg Concerto No. 3: Allegro/Adagio


  • You can't handle long pieces of classical?
  • You like tuning into something you know already?
  • You want to be reminded old music has its total kick-ass moments too?

Bach has your back. Seriously, it matters not whether you're into the oldschool scrape'n'blow type stuff, if you can't hear the utter kickassery of this piece there's something wrong with your ears.



And these dudes (for the record, Karl Richter and the Münchener Bach Orchester) obviously get a buzz from playing it. The guilty secret of the classical musician, the "Oh I love this! But they don't let me play often it cos it's too popular" thing. After all, the famous pieces are nearly always famous because they're so damned good.

The Muck Pile today

Here's a screenshot from today's post over at The Muck Pile:



Ok, that's it, I'm now in love. Go read the whole thing yourself.

A Flash update...

...has just been sent to subscribers on this sunny and pleasant Friday morning, pre-opening bell. A little deployment in the cards.

Peru's mining sector and its impeccable attitude to the environment

We've been hearing a lot about the illogical and unreasonable opposition to Southern Copper's (SCCO) Tia Maria project from local farmers in the Tambo Valley who fear that they're about to be polluted to kingdom come by the project. We also get to hear about the whiter-than-white mining companies and the responsible attitude who guarantee that nothing untoward will happen and because the EIa has been approved there's nothing to worry about and the local unwashed uneducated morons are just being stupid. To to that end it's worth pointing out the following:
  • If we keep it to recent data only and note the period between July 2010 and December 2014, Peru's environmental watchdog body OEFA (Organismo de Fiscalización y Evaluación Ambiental) opened 729 files on companies and imposed 600 fines on mining companies operating in Peru that add up to the grand total of U$70m.
  • Nearly all the fines imposed were immediately appealed in the courts.
  • Hardly any of the fines have been paid to date.
  • To that end, a few weeks ago the Peru government gave the OEFA special powers to make good on the fines imposed and get the mining companies to pay up instead of making the penalties disappear in the unending labyrinth of the Peruvian judicial system.


Just to give you an idea of how much Peru's mining companies care about the environment.


GLD: Less is more

While doing the morning newsround this came up on the list. It kept gnawing at me to the point where I came back and read it two or three times, because I can't for the life of me decide whether it's good or bad news for the gold sector. On balance I'd say good. This from Reuters yesterday:
LONDON (Reuters) - The world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, is no longer one of the top 10 U.S.-listed ETFs by value, according to data from FactSet.
The value of the GLD fund, which issues securities backed by physical bullion, dwindled to $27.148 billion this week, data on its website showed, as its gold holdings fell to their lowest since mid-January at 709.9 tonnes.
That makes it the 12th largest fund by value listed by ETF.com, which uses FactSet data. At its peak in August 2011, a month before gold prices hit a record high of $1,920.30 an ounce, its value reached $77.5 billion. Continues here
Why good on balance? Because it's now been two years since the big waterfall drop in gold and even though GLD holdings have sunk in tonnage terms (as expected) as the cash tied up there goes to find equity alpha in our low rate world, gold hasn't dropped off the expected cliff, it hasn't gone under $1k/oz as predicted by the big houses, it's been pretty darned steady at-or-around $1.2k in fact. Now I'm clear that this isn't bonanza price time and miners are no longer licences to print money, but with the drop in costs the better ones are now decent companies that make profits. Or they should be.

And the likely reason for gold's stubborn price resistance? Look no further than China, the people who have bought it all up while "Wall St Whitey" (to use Iwnattos's phrase) has turned collective backs. Which begs the question of who's right about gold, China or USA?

UPDATE: Iwnattos gives us a new Wall St Whitey post on gold, right on cue.


6/4/15

Thom Calandra's unending stream of stupidity, Brazil Minerals (BMIX) check-up edition

Remember back on April 20th when the SEC-proven fraudster Thom Calandra recommended Brazil Minerals (BMIX) to his band of sheep? At the time it traded at the princely sum of 0.0026 per share and the proven liar Calandra said it was good for a near 8X upside to 2c. Here's a chart that compares BMIX to something a little more reasonable:


You liked it at zero point two six cents, so you gonna love it at 0.11c, right? Right? Amirite?

True Gold (TGM.v): Kind of impressed that nothing's made it to the Canada mining press...



...about the violent demonstrations last Friday May 29th against the True Gold (TGM.v) Karma mine project in Burkina Faso by locals that left four demonstrators injured, three police officers injured, 15 people arrested and the location that was reported to look like a battleground. Maybe O'Dea didn't think it counted as a material event.

Funny how these things are kept away from your eyes by the lapdog press and brokerages, innit.

If you think it's different this time, today's not the day to buy gold stocks

But if 2015 is our guide, then a day when gold hits the low end of its trend and people are either actively ignoring the sector or exiting from positions due to fear, isn't that the exact sort of day on which you should be buying?



But hey, you're right, forget it, this time could be different.

When Sergio Massa drops out of the Argentina presidential race, nothing will change

That's because:

1) He's been a zero-chance candidate for weeks
2) The contest is obviously between Macri and Scioli
3) Massa moving to become a candidate for governor inside the Macri campaign simply formalizes the split that his Frente Renovador has been going through recently, with some of his members bound to follow him, others that will move to Scioli.


It's been a de-facto two horse race since around April. All that changes is the removal of "de-facto" from that sentence.

UPDATE: The three charts in this post from José Rubén Santís today, all about a brand new poll this morning (that came after this IKN post's publication, fwiw) show just why the above is true. The post is in Spanish but it's easy enough to understand the chart information. And again, for those who want deeper insight into the delcine and fall of Sergio Massa and what it's all leading towards, this post over at Los Huevos y Las Ideas dated June 2nd to which IKN previously linked does a fine job. Suitable for those adept to the tongue of Cervantes.

Chart of the day is...

...copper, dailies:


The market is run by China
Since the State stockist buyers stopped hitting the green button, copper's fallen.
We're now back at what looks like a technical floor level.
Therefore, we'd require new buying demand from China to kick in right here in order to shore up the price.
Bottom line: If those big State strategic buyers don't come back to the market soon, copper will fall further. But the funniest thing is, they know that. Therefore, the copper price is now as political as it is financial.

6/3/15

McEwen Mining (MUX) (MUX.to) files a shelf prospectus to raise $200m

This doesn't mean MUX is running a U$200m equity raise, it means that it's done the paperwork so that it can run a financing in the future for up to $200m. Anyway, the filing is here.

PS, fwiw, this opening section from the MUX lawyers' cover letter makes it clear what they're filing to offer:

"We are acting as counsel to McEwen Mining Inc., a Colorado corporation (the “Company”), in connection with its registration statement on Form S-3, as amended (the “Registration Statement”), filed with the Securities and Exchange Commission relating to the proposed public offering of up to $200,000,000 in aggregate amount of one or more series of the following securities of the Company: (i) debt securities (the “Debt Securities”); (ii) shares of common stock, no par value per share (the “Common Shares”); (iii) warrants to purchase Debt Securities (“Debt Warrants”); (iv) warrants to purchase Common Shares (“Common Stock Warrants”); (v) units consisting of any of the Company’s other Securities (as defined herein) which units may also include securities of third parties (the “Units”), (vi) subscription rights to purchase Common Shares, Debt Warrants or Common Stock Warrants (“Subscription Rights”); and (vii) subscription receipts that may be exchanged for Debt Securities, Common Shares, Debt Warrants or Common Stock Warrants (“Subscription Receipts” and, together with the Debt Securities, Common Shares, Debt Warrants, Common Stock Warrants and Subscription Rights, the “Securities”), all of which may be sold from time to time and on a delayed or continuous basis, as set forth in the prospectus which forms a part of the Registration Statement, and as to be set forth in one or more supplements to the prospectus."

Belo Sun (BSX.to)

From Agnico Eagle buy-in to "back in the range" took three weeks, minus a day.




I thought it might have taken a month, personally.

The Muck Pile, a useful blog for junior mining investors to follow

Just to show that I read my mail occasionally, this morning the owner of this blog, The Muck Pile (the Yukon Prospector's Association blog), sends me over the link and invites me to check it out.

It's pretty good. What you get is a curation point of news and views about the junior mining scene, not just Yukon, lots of links, with an emphasis on the trading and stock side of the business. It's the type of blog that's good for a quick one-stop to see what's being said and what's going on in the sector. I've just stuck it on my RSS (oh feedly how i've grown to love you) and it's now being recommended to you out there, dear and kind IKN readership, as a decent place for information.

Go check out The Muck Pile on this link. Worth your time if you're into the sector.

Phoscan (FOS.to) moves

Oh good, I just so happen to have bought some of this recently:



Basically for the reason laid out in its NR today, too. A ray of light in a sea of UNCH boredom.

If junior mining companies can't take themselves seriously, why should we?

In the last five days we've seen two junior mining Feasibility Studies hit the wires, one from Nevada Copper (NCU.to) and one from Bear Creek Mining (BCM.v). They of course have their differences (after all one is copper and the other is silver, we can start there and build a big long list) but they have one basic thing in common: They both choose unrealistic "base case" prices in order to make the projects look more attractive than they are:

NCU.to used a U$3.15/lb copper price for its "base case". Copper is at U$2.72/lb (or $2.76 last week when the feas came out). We haven't seen U$3.15/lb copper since October.

BCM.v used a U$20/oz silver price for its "base case". Silver is at U$16.71/oz. The last time silver Ag traded at $20/oz was August.

Perhaps this alone explains why the two share prices have dropped since the arrival of the 43-101 feasibility studies (NCU $1.93 to $1.79 down 7.3% / BCM $1.06 to $0.96 down 9.4% only yesterday),

Feas studies (not PEAs, not "pre-feas") are supposed to be serious documents, so why are they presented in such a deluded, silly, downright stupid way by these style-over-substance merchants of BS? Now I know that I'm tempting a few people to send me that usual mail with "ah yeah, but a FS isn't for the retail brigade, it's a highly detailed technical document that's for professional industry inside expert consumption" but that's obviously craptalk. If it were that and only that, why try to BS people in the first place with flashy splashy unrealistic spinned out numbers?

I'll tell you what happens when I, the non-expert, opens one of the NRs:

1) I look at the headlines
2) I immediately go to the tables with NPV, IRR, Capex
3) I search for any set of figures that demonstrate the company isn't taking itself or its readership seriously (eg stupid high base case metals prices that bear no resemblance to current reality).
4) If I find them, I close the NR and go do something more important.


LIFE IS TOO SHORT TO READ THROUGH ANOTHER BULLSHIT MESSAGE FROM ANOTHER BULLSHIT JUNIOR! Got that, Swarthout? Got that Bonifacio currently in New York this fine Wednesday morning failing to market your marginal project to a bunch of brokerages? Maybe your project isn't bullshit. Maybe it has legs and is robust and has a future. But if so, why wrap it in BS to begin with? Oh, nearly forgot, the CEO who replies with "Yabbut the 43-101 is a third party document and as such we have no control in..." can go sexually intercourse him or her self. You may think we're that stupid, that's your prerogative.

Be clear, get this into your heads mining CEOs. We out here may have been stupid enough to believe your stories in 2010 or 2012, but "once bitten twice shy" is a lasting idiom and a part of the language because it really means something. If you're not 100% clean, straight and honest with us you don't get our money, not any more. The game has changed and if you don't see that, you're going the way of the dinosaurs.

Rant over.







Chart of the day is...

...gold, monthlies:

So, two years.


Here's another thought arising: Why is it that proponents of gold ownership tell you it's a good thing because of its rock solid and steady value, but when it acts all rock solid and steady in US Dollar terms they complain?

6/2/15

We know Grupo Mexico is having community trouble in Peru, but what about Mexico?

Grupo Mexico via its subsidiary Southern Copper (SCCO) has all that Tia Maria thing going, which is sticky and worrying and that. But how are things in its home country?



Oh...that good?

This morning the "United Front Against Grupo Mexico", comprised of union workers seeking better conditions and locals still up in arms about the recent big pollution spills into the Rio Sonora and surrounding agricultural lands, blocked all accesses to the company's Buenavista de Cobre mine in the North of the country. According to latest reports they total blockade is still in place. That above is the sight of a police vehicle burning. We also have this about clashes this afternoon between police and protesters.

And here's a nice photo of one of the security outposts at the mine today. They seem to be having fun.

The Cheetah robot

This is now five days old on Youtube, so you may be one of the five million people who have watched it already. If you're not, you need to see it.


Link here. No op-ed, you can think about the ramifications of this all by yourself.

Frank Holmes: "Blatter's resignation is bullish for gold price"

Developing story.

UPDATE seven minutes later: Ten of you already? I'm disappointed in you people...really...


Unlike IKN, Frank Holmes is serious and loyal and will never give you up. He'll never let you down. He'll never run around. He won't desert you.

Truth be told, it's unfair to point the finger at Kevin McArthur of Tahoe Resources (TAHO) (THO.to) as the only seller of his company's shares...

... in the way we've done in a couple of recent posts, because the fact is that it's not just him. I mean, just in the last month there's been a whole bunch of them.



We haven't included the 30,000 shares McArthur sold in this list in May, by the way. They came from the 60,000 options he exercised at $6.40, so it's almost a zero-summer that one.

Almost.

Data here.

Argentina: The decline and fall of Sergio Massa

Strictly for those with fluent Spanish and an interest in Argentina politics, this post today over at Ricardo Tasquer's excellent blog 'Los Huevos y Las Ideas' looks at the fade and death of the Sergio Massa presidential election campaign. According to Tasquer (and we agree) Massa's fall from grace was predictable from a long distance out. 

As stated, a recommended read for deep Argentine politics lovers only but if you happen to be one of them, it's also a must-read.

The Bear Creek Mining (BCM.v) Corani Feasibility

We got the NR of the document this morning. Here's the table that matters:




Why can't mining companies face reality? Because it doesn't fit with their fantasy.

Barrick's (ABX) environmental fine for Pascua Lama: U$499m

Yep, that says' four hundred and ninety-nine million United State dollars. That's was Chile's environment agency, the SMA, want to slap on ABX's tush by way of a fine for all the naughty things done there.

Read all about it and more in Chile's Pulso this morning.

6/1/15

Thompson Creek (TCM.to) (TC) then and now

Who remembers this from nearly three years ago? Very few of you I'd imagine, but I sure as hell do. Check out the bit highlighted:
"...according to information reliably received, a lot of what TCM thought was ore is silicate encapsulated fine moly and is (I quote) "totally unrecoverable". The decision to run Endako on stockpile only was blamed in part on the low moly prices and the need to cut operating costs, but that's only half the story folks. Unless TCM's scientist boffins come up with a new way of recovering moly, when the three year stockpile runs out that's all she wrote for the mine."

And tonight, nearly three years later (oh what a coincidence) we get this from Thompson Creek  Metals (TCM.to) (TC):
DENVER, June 1, 2015 /PRNewswire/ - Thompson Creek Metals Company Inc. (TC) (TCM.TO) ("Thompson Creek" or the "Company") announced today that it and its joint venture partner, Sojitz Moly Resources, Inc. ("Sojitz"), have agreed to place the Endako molybdenum mine on care and maintenance effective July 1, 2015, due to continued weakness in the molybdenum market. Thompson Creek holds a 75% interest in the Endako Mine, and Sojitz holds the remaining 25% interest. In connection with the placement of the Mine on care and maintenance, approximately 270 employees will be terminated. 

Apparently it's all "due to continued weakness in the molybdenum market".



IKN got you covered, people. My thanks to A. Reader.



I was only joking about the Ferrari, Kev

But the rest of it is true. Innit guv.


The scene this morning at the 2015 Canadian Investor Conference in Vancouver (UPDATED)



Warned you.

UPDATE: seriously, you think I'm joking?


Dunning–Kruger and Metanor (MTO.v)

Please, no more mails about Metanor (MTO.v). If you don't know what the hell you're talking about, you're much better off keeping it to yourself.

That's true for you too, Nolan.

Bitgold (XAU.v): A final word (from IKN316)

This was a small section of yesterday's weekly. It wasn't going to make it to the open blog, but one specific reader told me to put it here. As he's somebody I rarely refuse (let's leave it at that) here you go. The only thing that's missing is the price chart, it wasn't particularly important to the piece, you can find that yourself if you care enough.

This really is the end of any sort of coverage of Bitgold (XAU.v) on these pages, hard, soft, praising, scorning, anything else. I reckon XAU.v has a good couple of years' worth of headline-making in it (good bad or indifferent) and isn't going away anytime soon, but I really have better things to do with my limited time on this planet. Amarillo Slim, step forward.

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Bitgold (XAU.v): A final word
Here comes an expansion on the post I stuck on the blog Friday (16) with the observation that this company cannot be taken seriously any longer. And then after today that's it, end of the line, I have better things to worry about.

In a previous post on XAU.v dated May 19th (17) entitled 'The funniest thing about Bitgold (XAU.v)' I wrote this little section (highlights today):

"...the fun has been watching the rise in seething hatred for the stock in people who play the Canadian junior mining companies, partly because they now feel stupid for caring about digging holes in the ground and thinking that precious metals are the true source of all wealth, partly due to the nostalgia and the "hey, remember when we could hoodwink em all like that too?" feelings it brings on by watching from the sidelines. Or maybe it's the thought of what XAU.v directors would do if they were offered a 100m share bought deal at $3 by some brokerage tomorrow morning. Or even $2. Fark, they could raise a quarter billion, buy out ten shitty explorecos and reinvent themselves as Sandstorm's next acquisition target. And face it, Nolan's bought into worse stories."

Strange. Although the details and how the chips have fallen (so far) aren't exact, the general thrust of the idea has been close to how XAU.v has unfolded.

Three days after that post, Bitgold announced (18) it was using 11.17m of those obviously overpriced shares to buy GoldMoney (we showed the troubled financial snapshot of that one last weekend). Then last Friday morning Bitgold announced (19) it was running a 5m share bought deal at $3.65 per share to raise gross proceeds of $18.25m and perhaps up to 21m if the overallotment is filled. 

Two comments to make.

1) First the confession of sorts; I wrote what I wrote on May 19th because I'd decided to let my mind wander free and suppose on what I'd do if I were heading up Bitgold and just in it for the quick hit profit. Yes you'd probably gathered that, but it wasn't meant to be a serious commentary, it was just a blog thing. As things turn out XAU.v hasn't emitted 100m shares, but 16.17m (plus another possible 0.75m) in the space of less than two weeks in exchange for hard assets is well on the way. Cut to the chase, it's what a company does when it knows that its shares are being wildly overpriced by the market and wants the easy cash-in quick hit.  

2) The day after that May 19th post I had an exchange with the main central figure in XAU.v, Roy Sebag, who mailed unsolicited and we had a cordial exchange of four mails, two apiece. In the course of that exchange it was made perfectly clear that according to the company CEO XAU.v didn't need capital. Therefore what I've witnessed from the sidelines is an attitude adjustment of Road to Damascus level in such a short time.

Somewhere in the background I hear that classic old adage of the Canadian junior market, "If they offer you money, take it", one that's far more common in better times for juniors than it is now. XAU.v isn't a junior mining company but it is connected with gold and it's hit the marketing sweet spot with enough people to get acclaim (and even weekend business feature slots in The Guardian (20), for which they'll thank the Soros backers for sure). But I'm just going to laugh at you if you tell me that "stock goes to $4 and we buy out GoldMoney and then we raise $18m in a $3.65 placement" was part of an integrated plan. This company came up with an idea that's captured the imagination of a bunch of rich hardmoney people and since then has improvised its way to treasury. Bitgold ATMs? Give me a break, I've watched as a hundred cryptocoins have floated that one at the market, let alone the big guy Bitcoin which still can't make a go of it.

That Guardian piece linked above ends with Bitgold's Josh Crumb saying this:

“If we’re right, we’ve built the next PayPal,” he says. “If we’re wrong, we’ve just built another one of those bullion trading businesses.”

Well maybe. And maybe if they're right it is the next PayPal. But if they're wrong it won't just be "a bullion company" as a consequence, because by the time the world has worked out they're wrong they'd have also transferred large wealth from the pockets of third party investors into their own via the sales of overpriced bubble shares. One thing I never swallow from a businessman is when they paint a no-lose scenario, because it's only ever no-lose for a very small group in the centre.


And that wraps up Bitgold on these pages, it won't be mentioned again.

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UPDATE: Al Korelin is not part of the solution, he's part of the problem. Until the two-faced stock touts of this world are ignored, there will be no improvement in the Canadian market.


Chart of the day is...

...the US Dollar index (USD). In fact it's the chart of the week.



It's back as the centre of all things once again, the only issue that matters. Call the dollar right = call the market right.

5/31/15

A Sunday serenade: Chopin, complete Nocturnes played by Brigitte Engerer

I've discovered this today, the best version of the Nocturnes I've ever heard. Poor scholar that I am I'd never even heard of Brigitte Engerer, either.



UPDATE Monday: Regular reader Khalid weighs in:

thanks for posting that Sunday...
from Telegraph obit:
So rare were her British appearances that London-based critics would travel to Europe to hear her, with one noting of her performance of Chopin Nocturnes in Spain two years ago that “each drama was on a grand scale, with each note weighted and balanced with fastidious authority”.
Khalid
Thanks man, and here's the linko to the obit.

The IKN Weekly, out now



IKN316 has just been sent to subscribers. Lots of stuff and things this week, perfect for those long nights of insomnia. And remember...


Yamila Osorio on Tia Maria

Yamila Osorio is the governor of the Arequipa region of Peru and in this interview with Peru's national newspaper La Republica she talks Tia Maria. It's long and in Spanish and I'm too busy with the Weekly to translate today, but anyone with an interest in the saga should read it (there's always Google Translate at a pinch) because it's the single smartest attitude I've seen from any player in this crazy situation. And even though she's just 29 years old (the youngest regional governor in Peru) she's a world wiser than the pro and anti mining dumbos trying to ram ideas down people's throats.