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8/1/15

"Now is the time to take action. Not in the next few months or even in the next few weeks—Right now."

That title line was Doug Casey's call on the stock markets on October 21st 2014 in the "Casey Crash Report" special publication (yours for just U$20). In it the Casey Research team strongly urged and exhorted and breathlessly recommended that you should expect the broad markets to crash, you should short KRE and IYT and you should buy gold as insurance.

Here's how those four squiggly lines have got on:


  • No market crash, in fact the SP500 is up by 9%.
  • KRE short big fail, you're down 15%
  • IYT short has recently gone positive, it's now up by a full 1% (with luck that covers your commish costs for the trade)
  • Gold insurance big fail, you're down 13%.

"It's the same failed theory as always. It's peddling fear. It's not going to happen. 
"And as explained here on September 3rd, Casey's been peddling this very same stupidity since at least 2008, probably much longer and has been proven wrong, time and time again. Now he wants to you buy his proven incorrect economic theory for $19.95. Fool me once, shame on you, fool me twice, shame on me, fool me four hundred and sixty four times, die poor."

All hail the guru Doug Casey. 

Biiwii: "Copper very bearish and in line with our thesis"

You probably know I'm bearish on copper (there are plenty of recent IKN posts on the subject, e.g. this one) but I'm not this bearish. 

If it were just about any other TA guy I'd be able to ignore it easily but when Gary T over at Biiwii calls a $1.50/lb target on copper, it requires attention. And for further bonafides, Gary's been in the bearish camp for much longer than I.

The top three most visited IKN posts this week are...

...in, reverse order:

Third Place: "Quebec geologists prohibit innovation" which gained viewer numbers that could win in another week. Apparently this post caused a minor ruckus up where they eat poutine pizzas and things. Tabarnac!

Second Place: "Your Sprott/Stansberry Natural Resources Symposium Bingo Card", which was one of those silly posts with an idea prompted by A.N. Other and then an angle which came to mind. I like the occasional sillyposts as they tend to take very little time to put together and some of them take off and get popular. Like this one.

First Place: "Latest from Argentina elections voter intention polls". And this is interesting. Firstly because Andy Tow's work in Argentina deserves as many eyeballs as it can gather. Secondly because I'd already run several voter intention polls on the October Argentina election but none of them got much traction. So here we are with just a couple of weeks to go before the big-indicator PASO vote and suddenly the rest of the world is starting to care. And it should, because this election isn't just important for Argentina, it's the key political directional vote for the whole South American region. 

7/31/15

If you own Nevsun (NSU) (NSU.to), read this

The report on this link will give you an idea of what you're sponsoring as a shareholder of Nevsun (NSU). Here's an excerpt:

Eritrea is not at war, but its first and only president, Isaias Afwerki, plays up the possibility of a return to conflict with neighbouring Ethiopia – the border town of Badme was the focus of a bloody territorial dispute. This threat is used to justify the absence of a constitution, the destruction of the judicial system, and the implementation of indefinite national service that allows the government to treat each civilian as a modern-day serf for their whole life.
The most obvious reason for the exodus is the country’s indefinite national service, the defining feature of contemporary Eritrea. Through this system, the government controls almost every aspect of a civilian’s life – male or female – from the age of 16 or 17. Where you live, your daily routine, and how often you see your family – all this is decided by the government, thanks to the national service system.
“We are just like slaves for them,” said Kibrom, 24, who spent the entirety of his adult life as a conscript until his escape a few months ago. “That’s why we’re leaving. It’s become one big prison for us.” 
Conscripts are technically paid. Different exiles report different monthly wages, but each fell between 500 and 750 nakfas (the local currency) – a negligible pay that equates to between £20 and £30. The amount is so low that it is virtually meaningless, former conscripts say. 
“It is only enough for three days – so for the other 27 days I would go hungry,” said Kibrom. “To buy a chicken, it’s 600 nakfa. And that tells you everything. If I want to have a family, to marry, to have children – that 600 isn’t going to be enough.”

Whole thing here


The Friday OT: The Who; Won't get fooled again

Footage from the we-record-live gig The Who put on at Shepperton Studios in London, May 2th 1978.



This gig was also the last time Keith Moon played with The Who (he died September 7th that same year). As you're about to see, he, Daltrey, Townshend and Entwistle were on their very top form that day. Some bands are better in the studio than on stage, but not The Who. They were (are) the exact opposite, laying their standard tracks down on an album then bringing them to their maximum expression in front of an audience. The above is a prime example, awe-inspiring rock performance.


OT: A courtroom exchange

As it's Friday. And as found here, though often tough to tell who was 1st at Twitter.



Mount Otto, Colorado, USA

Your author is sent this photo of Mount Otto, Colorado, by a kind reader.



Thank you kind reader.

7/30/15

A comment on Banks Island Gold (BOZ.v)

I've never looked at this Louis Lobito Little Wolf Casey Research pump job more than fleetingly, but after all the mine closure/suspension hoo-hah in the last seven days, and then including the way Lobito reassured his followers last Friday that it was a hold and the suspension was much ado about nothing but then this Thursday morning did a 180° turn and called sell on the stock (when halted, then claimed he was out at 9.5c when the stock dumped to 5c), all this BOZ silliness had caught my attention. And then of course the CFO resigned suddenly on Monday. Nice touch.

So anyway to get to the point of this post, while checking SEDAR tonight I noticed that BOZ.v had filed its quarter this evening so with interest piqued, I checked its financials for the first time ever. 

Seriously. I mean, seriously, how can anyone in their right mind like a company with a balance sheet like this? Let alone somebody as dangerous to other people as Lobito who recommends it to other people. Especially when those people are a bunch of naive sheeplike followers who require a little expertise in the sector, not tripledumb investment advice? And on checking back this evening we note that Louis Lobito Little Wolf James has been reco'ing this stock constantly since 2012 since prices of 76c (and his "stink bid" price on it was 45c...did he tell you to back up the truck when it went through that price?) and all the way down. 


This is madness, it's the type of thing that people who do not understand financials buy. Look, that's $11.2m in near-term financial liabilities, less than $170k cash, all on top of a mine that even if it was working right gives tiny gold production per quarter that makes an operating loss at $1,200/oz. There's no way, repeat no way, as in NO FREAKING WAY that debt gets paid without cash crunched to zero and beyond and that means even if BOZ can find somebody stupid enough to lend it some more cash the shares are going to be decimated even further, one way or the other. But you didn't need to know the May financials to come to that conclusion, it was already baked in. Obviously.

I knew Louis James was stupid about geology. I didn't realize how stupid he was about financials. The above is just plain embarrassing, it's amateur hour level.

UPDATE: More on the subject here.

And good morning to you, Porter...

...so glad you could make it.

The best quarter I've seen from a junior producer so far in 2q15 is...

..Teranga Gold (TGZ.to) (TGZ.ax). And that's good because I own some.

The thing to like isn't the production, which was slightly low due to lower than expected mined grades and head grades. What's to like is that even after producing a couple of thousand less ounces than I'd have liked in a perfect world its costs items were low, both on an absolute scale and on per-ounce metrics. With AISC at U$948/oz in what's going to be the softest production quarter of 2015 (and 2016 and beyond, most likely, as there's better grading material coming online soon) TGZ is still solidly profitable at even our new lower summer sale gold prices.
  • It's still a 200k+ oz per annum producer.
  • It has U$38m cash in the bank.
  • It's done all the heavy lifting on investment and corporate finance
  • It's profitable at current gold prices
  • It has an optimum community and social risk profile.

And you get all this for under CAD$200m market cap. Today's NR here.

I'll bet you cashmoney that when you see its 4q15 production results and guidance for 2016 you'll be saying "Damn, how the devil was that at just CAD$0.56 back in July?".

We'll do the charts on Sunday, here's just one:





Gold: Something's gotta give (x3)

We note the price of gold returned to U$1,080/oz this morning and promptly bounced off the level again. A chart:


A piece of music.



Lake Shore Gold (LSG.to) 2q15 numbers

A lot of reports to do today, which is nice I suppose as it keeps me out of trouble. Lake Shore Gold (LSG.to) (LSG) reported this morning, here's the NR and just two charts for this post:

This one, the ops overview, holds no surprises because revenues were pre-announced as well as cash costs, which means we had a very close idea already. It's in-line.


But one good for comparative purposes is working cap, note the different direction to that of the Timmins Gold (TMM.to) chart posted here last night. 


That's because LSG's net profit may have been modest but it was a genuine one, not a tax claim fakey prop. Again let's underscore a simple fact: It's far more difficult to make the balance sheet look good than it is the P+L. The balance sheet requires real positives, not accountancy massages.

That second chart is one of the reasons why LSG's price has done this compared to TMM's during 2015.



There are other reasons too. We discuss those on Sundays.

7/29/15

Timmins Gold (TGD) (TMM.to) 2q15 results

Timmins Gold (TMM.to) (TGD) filed its 2q15 late this evening (never a good sign) and as we did with New Gold (NGD) last night, here are just three charts picked from dozens in the database to give a flavour:

The operations overview. See the problem?


Costs are fixed, revenues are dropping. With gold where it is compared to the quarter just gone, it's going to take some serious changes to stay with even gross profits at TMM, let alone pay the niceties of life like G&A and things. 

Next working cap as TMM managed to return a small net profit thanks to claiming some tax relief, but operationally they lost out and you see that here. 


Cash treasury dropped by $3.4m, working cap by $7.9m. 

Finally, the equity per share dip shows just how silly and dilutive the Newstrike purchase was. 


So after this, please don't tell me how Lukas Lundin is some kind of infallible moneymaking machine, between him and Bragagnolo this is one big dumbass error staring at you.

Quebec geologists prohibit innovation

On June 23rd Integra Gold (ICG.v) announced its "Gold Rush Challenge", idea to crowdsource "the next big Val D'Or discovery" (or something) that would put up a prize of up to CAD$1m for the person or people who helped ICG make a big hit win. Here's an excerpt of the NR:
The Gold Rush Challenge
Online prospectors will analyze and interpret the data to come up with a plan on where they think Integra has the best chance of making a major gold discovery. Further details on what specific types of submissions the Company is looking for will be announced in the coming months, prior to the database being made public in September. 
The prize of CAD $1,000,000, which will be broken out into a number of categories, will be awarded to whomever comes up with what the Company and the competitions board of advisors believe is the highest probability location for a major gold discovery. Integra has already made significant headway in raising the award money through sponsorships and plans to announce the winners next March in Toronto at the PDAC mining conference. continues here

At the time your humble scribe registered the idea and thought it interesting in that out-the-box way, without going overboard on the idea. At least somebody's trying something different was my main mental comment. Didn't think much else of it, though (not really my neck of the woods).

Anyway, Quebec's geologists don't want mining companies doing anything stupid such as making money or being innovative or making themselves popular with the general public. IKN today intercepts this mail sent to ICG a few days ago by a lawyer representing L'Ordre des Géologues du Québec (aka Official Canucky Rockbanger Club):


Shorter: We're going to protect our jerbs from your smartass ideas. 

Gold Resource Corp (GORO) finally tells us about some of its insider selling

Today this was filed to The SEC. It tells us that when David Reid resigned as head honcho of Gold Resource Corp (GORO) in late 2013 he held 3.19m shares of the company. Then between January and June 2014 he sold 544,700 of those shares (at what looks like an average of U$4.90 a pop), at which time his holding went under 5% of total shares out.

And we get to hear about this selling over a year later when the shares are less than half his selling price. Cool disclosure, guys.

And of course, once he went under 5% holding he didn't have to disclose any more sales, so there's no guessing on whether he still owns his 2.5m or so. If you want my guess, he sold them to you suckers between July 2014 and now.

And yes, David Reid is father of current head honcho Jason. Cute, yeah?


The FOMC statement: Shorter and longer versions


Shorter version: "Look we're not kidding, we are going to raise rates in a couple of months' time y'know. Seriously."

A quick question

Why is Harper Grey, the Vancouver law firm, suddenly so interested in the previous posts on Great Panther Silver (GPL) (GPR.to) here at IKN?



Today's not the first time the shysters have been poking around the coverage, either.


Latest from Argentina elections voter intention polls

Andy Tow is the Nate Silver of the Argentina scene, compiling and collating and putting numbers together in easyread charts. Here's his latest news on the October election polls...


...and the average poll for frontrunner and CFK government candidate Daniel Scioli, via a basket of survey companies and methods (plus their own political biases) give him an impressive lead and a 38% average. The question is now whether he can get enough to win in round one. 

Do check the Andy Tow link, the chart is interactive and gives plenty more details on the polls.

Marin Katusa's "next Bakken" play PRD Energy (PRD.v) ceases operations in The Next Bakken

I received a a mail from reader "M" this morning, here's the screenshot (with his name and mail address blotted out):





Thanks M, kind of you and here's how that NR from PRD Energy began:
CALGARY, ALBERTA--(Marketwired - Jul 28, 2015) - PRD Energy Inc. ("PRD" or the "Company") (TSX VENTURE:PRD) announces that the Company has decided to cease operations in Germany.
It then goes on for a few hundred words to explain just why they're a bunch of losers, but all you really need to know is in that short top paragraph. And yes, this is indeed the very same PRd Eenrgy that Marin Katusa and Casey Research, as well as that other prize idiot with an oversized audience John Mauldin, pumped to their respective flocks.


As for IKN, here's how we tried to warn you about this obvious newsletter pump and dump scam, a whole series of posts to tell you just why you needed to stay away (click on each link to check em out)



UPDATE: Reader RW adds another mail screenshot to this post:





7/28/15

And as for Capstone (CS.to)...

...you know guys, it's really way past time you took some impairments. There's no need to wait for year end.


Start with Santo Domingo at $534.8m. This is 2015, FFS.

Anyway, CS.to 2q15 NR here. The costless collar saved the bottom line.


New Gold (NGD) 2q15 results

New Gold (NGD) reported its second quarter numbers this evening, here's the NR and by the magic of Bill Gates and Excel once you plug in all the numbers and hit a button a whole bunch of charts get generated and updated. Here are just three of them to get a flavour of NGD version 2q15:

1) Production sucked on a consolidated basis. Here's gold only (copper's another 33% of revenues mix, then there's a bit of silver too). It's the worst quarter of production since 2012, due to the Peak Mines operation missing badly.



2) So if gold and copper production was weak and prices have been crappy like we know they've been crappy, how did NGD manage to improve operating profits?


The answer is for two main reasons: New Afton rocks as a mine, then consolidated depreciation and depletion was lower, mainly due to less mining at Peak in Oz. There are a few minor matters to add on but those two are the rump of it.

3) But the thing is, you can...errr....adjust the P+L on a quarterly basis (and your author is already seeing facile anal yst BS such as "beats on revs" floating through the system) but it's much harder to get the balance sheet to play along with temporary ebbs and flows.


Magically, NGD makes an operating profit, EBITDA profit and net profit but somehow cash treasury drops by $39m (and working cap by $31.7m, before you ask). If you don't think that's important, I strongly suggest you get back to the main hall at the Sprott/Stansberry Conference because it's your turn to speak next.

Bottom line: New Afton made the company net earnings of $15.2m. Total corporate net earnings were $9.4m. Balance sheet deteriorated further. That's NGD.

Franz Kafka writes his first ever junior mining news release for Century Iron Mines (FER.to)

This from Century Iron Mines (FER.to) today takes us to new and unknown levels of NR bizarre..

Iron ore and eggs. Seriously.

TORONTO, CANADA--(Marketwired - Jul 28, 2015) - Century Food Company Ltd ("Century Food"), a Hong Kong registered wholly-owned subsidiary of Century Iron Mines Corporation (together called "Century" or the "Company") (FER.TO), is pleased to announce the entering into an exclusive distributorship agreement with Sunny Queen Pty Ltd ("Sunny Queen"), one of the largest Australian egg producers, for Sunny Queen's products in Hong Kong and Macau, China, with Century Food's first right to negotiate for the mainland China market as the next stage of development. This agreement marks a historic debut of Sunny Queen's products in Hong Kong and Century's debut in the food sector. Sunny Queen has established a leading market position in Australia for a wide range of fresh eggs and egg products. The signing of this agreement with Century marks the expansion of Sunny Queen's products to a major overseas market. Under the agreement, Century will first develop Sunny Queen's shell eggs and egg products business through the supermarket and food service channel in Hong Kong and Macau. 
Over the years, Century has established a strong foothold in iron with the discovery and development of multibillion tonnes of iron deposits. The Company has been ranked amongst the largest iron resource companies in the world. Century has recently completed the feasibility study for its flagship high-grade Joyce Lake DSO Project, which is well-positioned for execution when the iron ore market recovers. At the same time, with its strong balance sheet and strategic partnerships with two Global Fortune 500 state-owned enterprises from China, WISCO and Minmetals, Century is rigorously pursuing the acquisition of non-ferrous assets by capitalizing its strategic advantages and core competence to create shareholder value where the current low commodity cycle offers excellent opportunities. Century believes that the success of the business model adopted by the majority of the mining and resource sector fundamentally depends on the continuous momentum of industrialization and urbanization in very large emerging countries, led by China. As this current macroeconomic trend has created unprecedented business opportunities for the mining sector, it is also offering huge business opportunities in non-mining sectors, particularly the food industries in China, where strong long-term and post-urbanization prospects are compelling. This is especially true for those, such as Century, with knowledge, expertise and a track record of successful execution in this dynamic and growing mega-size market.

Hope you had a pleasant day...

...watching the market and those big two dollar moves in the gold price. I'm sure it was fascinating.

We did this:



That's the wife, admiring the view.

Chart of the day is...

...another repeat of this:


Because of something reader "E" sent over early this morning (E works different timezones)

You should know one more thing about International Speculator...
We’re doubling the subscription price soon from $995 to $1,999 per year.
We’re doing this for two reasons. One, a higher price means that we’ll attract only sophisticated investors who can afford the speculations in International Speculator.
Two, a higher price limits our following. This will help our subscribers get the best prices for the speculations we recommend.

7/27/15

More on what Louis Lobito Little Wolf James of Casey Research can do for your portfolio

The May 2015 edition of the Casey Research Louis Lobito Little Wolf James 'International Speculator' was entitled "Two Must Own Silver Stocks" and once you open and check em out, it turns out Lobito was urging you to buy and own Fortuna Silver (FSM) (FVI.to) and Silver Wheaton (SLW). Here's the top of the piece that explains why:


Got that? 
Considerable research. 
Spectacular returns. 
Low downside risk. 
Must-own.

Here's the share price action of those two since the date of the call:


And Porter Stansberry employs him.

Minions and Keith Neumeyer


Nuff said.

Regarding pet rocks

Via Biiwii this morning, I get to click through to this post at The Macro Tourist which shines a light on the track record of one Jason Zweig, the guy who called gold a "pet rock" last week. Turns out the same "expert" top-ticked GDX, calling the miners a buy right at the very top of the top. In TMT's words...
"Man, I have had some bad calls in my day, but this one by Jason Zweig makes them look like slight hiccups.  You decide if the pet rock article is bullish or bearish for our poor little yellow friend…"
It takes skill to bottom tick the market. But that moves to utter mastery when you already top-ticked it a couple of years ago. I laughed hard at this, top stuff.


Nevada Copper (NCU.to) six weeks on

On June 16th we noted this on the blog as Nevada Copper (NCU.to) started its downhill run (which oh-so-coincidentally began on the day it released its feas study results):
"...perhaps one day it'll dawn on people just why no major has bought it in the years it's been shopped around. Or perhaps that fact is finally dawning on people this month. It's about time it did.
And today?


Yup, it's dawned on them.

And yes, I know you hate it when I'm right so feel free to forget this update.

The Canadian Dollar versus Latin America currencies

Setty's stuck a neat little post up on his display cabinet this morning, examining the relationship between the Loonie and a whole bunch of Latam currencies. Which has popped the biggest move? The title line includes "Colombia Goes Bananas", which is definitely a clue, but it's not just that country. 

Worth a visit, go see here. Charts and 'splainins and everything.

Chart of the day is...

...the long-term price chart of Silvercrest (SVL.to) (SVLC) with a line drawn in at CAD$1.30:



Right on the button.

For those of you who care about the silver producer space these days. All nine of you.

7/26/15

Your Sprott/Stansberry Natural Resources Symposium Bingo Card

There you go:

The IKN Weekly, out now




IKN324 has just been sent to subscribers. No planets.

Pity the poor, downtrodden Argentine farmer and his brand new Toyota Hilux

The 2015 election season is now well underway and the last few days have seen the country's agricultural leaders grab the mike and have their say, what with the main annual show and get-together happening in the city of Buenos Aires. And waddyaknow, they think that the current CFK government has been the worst for the agro sector in the last 200 years and that it would be very bad news if Daniel Scioli continued with the policies of the previous and current Kirchnerist governments.

Which is the normal bullshit from the bunch of pathological liars who own all the land in Argentina. This chart from this database link:


That shows you the number of new "Light Commercial Vehicles" sold in Argentina, the category which is mostly covered in Argentina by the Toyota Hilux (top seller by quite a distance), the VW Amarok and the Ford Ranger. In other words, the vehicles of choice in the agricultural plains regions of the country. It's long understood that sales of those vehicles are directly correlated to the wellbeing of agro's collective back pockets. In short, a decent proxy.

The result? When they turn up to strike and block roads, they don't even see their own hypocrisy:


The stylish, air-conditioned, comfortable way to be poor...or something. That photo from this report of the roadblock by farmers at the flatland town of Villa Maria on July 16th.