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2/6/16

The Revenant (no spoilers)

Yesterday evening I went to the cinema and watched The Revenant.
  • Leonardo Di Caprio will win the Best Actor Oscar. Period. No argument. No question. Go and see the movie just to see what Di Caprio does.
  • Even though I enjoyed (definition: cinematic pleasure) Quentin's The Hateful Eight more, it's abundantly clear that The Revenant will win the Best Picture Oscar.
  • Unless The Academy gets snooty about awarding the prize to the same dude twice in a row, Alejandro González Iñárritu will win Best Director.

The Revenant is not an easy film to watch. The violent sequences, and there are several, are visceral and unflinching (e.g. the bear scene, holy crap they made that realistic), the pacing drops to a plod at times, the storyline is a tad too predictable. But it's a necessary film for anyone into movies. The depiction of the Ree as mother nature's lethal weapon is wonderfully managed. And my stars, it's visually stunning stuff. A must-watch film, it's going to clean up at The Oscars. End.


About The IKN Weekly

Dear Frank,

Thanks for your mail this morning and for asking what you asked. In truth this blog is my idea of a bit of fun (we're all weird in our own ways) but it's also a shop window for the way I make my living, which is The IKN Weekly. It's a report that comes out every Sunday evening (Americas time) on (mainly junior) mining sector in (mainly) Latin America. It has my portfolio of stocks in the sector, tells you when I buy, sell and keeps a record of all trades, provides ongoing commentary of the stocks covered and in-play, plus those I'm thinking about buying. In short, it's what I'm doing with my money. I do detailed analysis of individual stocks, with charts and comments and target prices and all that jazz. The IKN Weekly also covers my thoughts on macro sector issues (gold, copper etc), keeps a handle on regional political issues (with emphasis on those that affect the mining sector) and provides snippety market comments on this-and-that company. It's typically between 25 and 30 pages long and contains between 13,000 and 15,000 words, but can vary on either end of that size. I've been writing it since 2009 and this weekend will be issue 352. It's read by a range of people, from high end pros in the mining biz who think they're important, to retails jocks just like me. It costs U$40/month (i.e. a tenspot per week) or U$400/per year, which isn't cheap for a newsletter but I think it's priced just right for what it is (it used to be U$25/month and got too popular with people just looking for a pump/dump tipster and then got annoyed when I didn't live down to what they were looking for). The PayPal button is on the blog main page (upper right) and looks just like this...


...but don't click on that, it's just a screenshot. I get told by people close to me that I should promote the thing more often on the blog to its readers (the blog gets read by thousands of people a day, the Weekly gets to hundreds of people per week) and get the word out, get more subscribers, become rich like a richy-rich person and big and influential and important and all that crap, but I tend not to care too much about marketing the Weekly because I like it as a small-end publication with a group of readers who have tended to stick around and know that it's not a pump sheet or something that tries to move markets. Plus I don't feel the overriding need to make the collection of currency a central thing in my life, my income is sufficient to cover my low-profile middle class existence (and I've never coveted things like Ferraris or Rolex watches). But today, instead of answering your mail directly as I usually do I've decided to stick the answer on the blog. I'm not really sure why, but a bit of soft advertising every so often doesn't do any harm I suppose. Any further questions, feel free to fire away.

2/5/16

The Friday OT: Jon Hopkins; Collider

Not the first time this has been featured on this humble corner of cyberspace, but it's just the most amazing thing and needs more eartime from as many people as possible. 



I've never heard anything like the music of Jon Hopkins. It was unsurprising to find out he was classically trained because even though it's completely original (and utterly addictive) it's clearly put together by someone who knows the bones of music: Dripping with quality, if you haven't heard his stuff before, today's the day (and make it on speakers with a decent bass range).

UPDATED Three more things about IKN's Tahoe Resources (THO.to) (TAHO) / Lake Shore Gold (LSG.to) (LSG) deal talks exclusive

We broke the news post-close yesterday evening. In early trading today Friday (time of this post) LSG is up 6.2% (on a modest down day for gold stocks) and TAHO is down 6.3% (much heavier than the average in the sector), both on heavy early volumes.


Probably just coincidence, innit Kev?

I've been asked by several people as to the veracity of the information. It's 100% solid, take it to the bank.

Most interesting to note how Scotia was so keen to talk up TAHO on Wednesday Feb 3rd in its daily 'Mining Scoop' mailer and highlighting its M&A ambitions (though stressing they didn't want to pay too much), the day after the big pow-wow meeting between TAHO and LSG at the LSG head offices, but nothing at all about the news of the late-stage talks between TAHO and LSG in today's mailer. As a matter of fact, Tanya Jakusconek is the senior precious metals analyst at Scotia. She's also on the board of directors at Tahoe Resources. Funny dat, innit Kev?

UPDATE 11:30am: LSG now 10% up on 7.2m shares traded in Canada alone. The record one day volume there is 10m. EDIT: In fact with four hours left in the trading day LSG has just beaten its best volume day ever, above 10m shares traded and no signs of stopping. And 11% up. Meanwhile Kevin "loose lips" MacArthur's TAHO is still 5% down. He Kevin, you know that 20% premium to market you wanted to offer? There's only four of it left due to your pisspoor corporate governance, man. You know where the buck stops, don't you? I'm telling you Kev, you should have done the right thing and told the world about that worker death in Guatemala instead of trying to hide it away from people. Karma's a bitch, eh Kev?

UPDATE 2, just after 3pm local time: As expected LSG issues one of those denials-that-isn't-a-denial. The eagle-eyed among you will notice the use of the word "material" in para 2...
"The Company is not aware of any material, undisclosed corporate developments that would account for recent trading in its stock."
...which is the legal cop-out, because negotiations of this sort are never material until the deal is agreed.


All good fun.

IKN leads, the daily newspapers of Panama follow

Remember this IKN post on February 3rd about how Richard Fifer and Ken Morgan of (ex)Petaquilla Gold have had arrest warrants issued and Interpol on the case of getting them served? Well here's today's front page top story in Panama's national daily newspaper 'La Estrella', February 5th, two days on:


And here's the link to the report, which starts this way (translated):

The 16th Court Prosecutors of Panama have requested Interpol to arrest Richard Fifer, president of Petaquilla Minerals, and Kenneth William Morgan, co-signee or member of the company board of directors, for the alleged crime of fraud against the company Gold Dragon Capital.

A source related to Fifer told this newspaper that Fifer was not in Panama and is assumed to be in either Spain or Brazil. Regarding Morgan, the source indicated that he is in Canada, his country of residence. Continues here.

Hey, you get the feeling their "source" is this blog? Yeah, crossed my mind too, but real journalists could never admit to getting scooped by a blogger...oh no...

More Minera IRL news this morning

Here's the link, here are the contents:



February 5, 2016

Minera IRL Limited: Agreement Reached Regarding Control of Subsidiary Company

LIMA, PERU--(Marketwired - Feb. 5, 2016) - Minera IRL Limited ("Minera IRL" or the "Company")
AIM:MIRL)(BVLAC:MIRL) announces that it has reached an agreement in principle with Diego Benavides, General Manager of the Company's 99.99% owned operating subsidiary, Minera IRL S.A., to transfer the one share in the subsidiary not already owned by the Company to an independent Peruvian lawyer designated by the Board. In addition, this lawyer will hold a general power of attorney on behalf of the Board. These steps will result in the Company regaining control over Minera IRL S.A.

The agreement requires that all criminal complaints and lawsuits are withdrawn and that an independent investigator immediately conducts an investigation into the whistleblower reports which the Company reported last year.

The Company will retain a consulting engineer to assess the operations at the Corihuarmi mine, which will provide the information needed to complete the outstanding matters which have delayed completion of the June 2015 interim financial statements.

The Board will review both the composition of the Board and the management structure and make new appointments as appropriate, including a CEO and CFO.

In addition, the Company reports that it was unable to pay a promissory note of $2.2 million to Rio Tinto which was due for payment on 31st January 2016, after Rio Tinto had granted a 31-day extension. The Company is in discussion with Rio Tinto regarding terms for a further extension.

The Company's suspension to trading on AIM will remain in place until both the Company's June 2015 interim financial statements have been published and the Company's nominated adviser is satisfied that the Company can continuously comply with the AIM Rules for Companies.



What this is in one word: Reconciliation. It seems the two warring factions inside IRL are speaking to each other at last and coming to decisions that are for the good of the company (at last). However, I'd warn you all that you can't trust the Team Hodges end of this deal as far as you can throw them and that I'd expect Team Benavides to be wary of any traps they're trying to set.

Today's fun game

How many media outlets or brokerage notes to clients this morning will mention that Tahoe Resources (TAHO) (THO.to) is in late-stage talks to buy Lake Shore Gold (LSG) (LSG.to) without mentioning that they got the information from the exclusive in yesterday's IKN, dated 5pm local time Thursday 4th Feb?

They don't like being scooped by a pissant blogger, y'see.

2/4/16

Tahoe Resources (TAHO) (THO.to) in late stage talks to buy Lake Shore Gold (LSG.to) (LSG)

All you really need to know is in that title, the rest of this scoop post is just a few details and then a special message for Kevin MacArthur. 

But indeed IKN can confirm that Tuesday this week saw a visit by a whole busload of Tahoe Resources (TAHO) (THO.to) people to the head offices of Lake Shore Gold (LSG.to) (LSG) which just oh so coincidentally happened to be a day on which the whole of the LSG board of directors were there. The happy people from both companies then set up camp in the LSG boardroom for a few hours and even had lunch together, which I'm sure was nice and tasty. What we now understand is that the talks are at the stage where the only question left on the table is the final price for a friendly deal (by the way, THO wants it to be all-paper).

I'll leave it to LSG and THO to issue one of those "we don't talk about that kind of thing" denials-that-are-not-denials. But LSG, THO and IKN all know that the above is 100% true.


And to round off, here comes that special message for Kevin MacArthur: My stars man, you're lost back in the 1980's aren't you? Your company is the single worst miner I've ever encountered on the question of corporate governance. First you refuse to admit the workplace death of one of your Guatemala employees (which you still haven't admitted three months after the fact but you have to put it in the 4q15 and YE M&A by law, don't you Kev?), then you deny Shahuindo had poured first gold on December 22nd and then when you're rumbled say it was a "minuscule" amount when it was over 1,000 oz, and now you think you can have a whole bunch of your top management team stroll into a fellow mining company and not be recognized by anyone hanging round the lobby? Your "secrets" are blown in Guatemala, in Peru and now in Canada and you think the problem lies anywhere else than at your own doorstep? Have you ever heard of the internet, Kevin? Have you ever considered that your company mail system might have been hacked, Kev? You think you don't have enemies at Goldcorp, Kev? Do you think that your arrogant pig-headed attitude towards people comes at zero cost and the people around you right now in your office in Reno aren't fed up with the way some of them have been treated and take pleasure in sticking it to you by ratting on you to a pissant blog?

One final thing Kevin: As a shareholder of Lake Shore Gold (which I am, full disclosure) it would be in my own interest to see you come to a deal and buy out LSG at a higher price, in the near-term at least. But I'll tell you now, I fervently hope that this post that blows the whistle on your zero-secret M&A ego-trip ambitions helps the deal fall through (seriously, getting Tanya to puff-piece THO in the Scotia mailer on Wednesday and send Makuch the not-so-subtle message was a mega-hoot). And why so? Because LSG is a far better run company than yours and needs no intervention from an inferior level management team to keep growing and adding true value to my investment. I'll be happy to hold LSG for the long-term and watch it create real value, instead of seeing it being bought out by you and watching all value disappear when the Guatemala end of your creaking empire implodes through political scandal and legal actions.

UPDATE: IKN is now getting a whole bunch of hits from Reno Nevada, including the THO offices and Maupin Cox Legoy legal beagles. Hey, wonder why that is?

The Economist does Peru mining community risk

It uses Tia Maria as the headline case, it expands to cover the general scene, it's a reasonable overview piece, though a bit White Man's Burden-y (which you can filter out easily enough). Link here, go have a read.

HudBay (HBM) and its jaguar

It's not only the SEC's ongoing insider trading investigation* regarding HudBay's (HBM) purchase of Rosemont that Alan Haircut has to worry about, it's Arizona's jaguar too. Excerpts:

TUCSON, Ariz.— Conservation CATalyst and the Center for Biological Diversity released new video today of the only known wild jaguar currently in the United States. Captured on remote sensor cameras in the Santa Rita Mountains just outside Tucson, the dramatic footage provides a glimpse of the secretive life of one of nature’s most majestic and charismatic creatures. This is the first ever publicly released video of the jaguar, and it comes at a critical point in this cat’s conservation.  

...

But a huge conflict is brewing that threatens to destroy El Jefe’s home. A Canadian mining company is pushing to develop a massive open-pit copper mine right in the middle of the big cat’s territory. The mile-wide open pit and 800-foot-high piles of toxic mine waste would permanently destroy thousands of acres of occupied, federally protected jaguar habitat where this jaguar lives.
“Clearly, the Santa Rita Mountains are a vital part of this cat’s home range,” said Bugbee. “This jaguar has been photographed in every month of the year in these mountains — there are more than 100 detections of him in the Santa Ritas since 2013 — how could anyone argue the importance of these mountains?”
“The Rosemont Mine would destroy El Jefe’s home and severely hamstring recovery of jaguars in the United States,” said Serraglio. “At ground zero for the mine is the intersection of three major wildlife corridors that are essential for jaguars moving back into the U.S. to reclaim lost territory. The Santa Rita Mountains are critically important to jaguar recovery in this country, and they must be protected.”

Full story here, with the cool video footage of "El Jefe" the jaguar.

*You seriously thought IKN didn't know about this, Messrs Haircut and Garofalo? Oh that's cute. Lucky Chuck Jeannes didn't find out last year, wasn't it?

It's suddenly so bullish out there that...

..people are bidding up silver miners, thinking they're profitable at U$15/oz silver. Which is as good a signal of near-term overbought as you could ever hope for.

Tax, streaming deals and the law of diminishing returns

On the back of the Silver Wheaton (SLW) tax spat with the Canadian tax people, we now have Primero (PPP) (P.to) in dispute with the Mexico tax people (and the stock plummeting as a result). So it goes.

But the most interesting thing about these developments, one at one end of the stream pipe (SLW the supplier) and one at the other (PPP to demander) is what it might mean for the streaming model itself. I'm certain that one of the things that sells a company into any streaming deal is arguments from CFOs about tax loopholes so if they're now closing, or already closed, or even worse retroactively closed, it means the deals aren't so great for potential customers of streaming companies in the future (and be clear, gubmint tax offices all over the world will be watching these cases). And that means the streaming companies will have to offer that much more in their deal packages. And that means streamers aren't going to get a fat deal any longer. 

By the way, Adam Smith had this nailed down 240 years ago.

New Gold (NGD) (NGD.to) breakout

According to this...



...that's a breakout and NGD now goes above U$3 on this move. Feeling lucky, chartist?

UPDATED: The Legendary Brent Cook isn't just a Legendary Legend in The Americas...

...he's a Legendary Legend in Australia as well. Check out the bit on Excelsior Gold at the bottom of that linko.
UPDATE: IKN Nerve Centre is informed that the above link is now behind a paywall (it wasn't earlier when I clicked through), so just to get IKN into legal problems and also provide its loyal and extremely physically attractive readership with the goods, here's a paste-out of the bit I was referring to earlier:
 
Excelsior Gold (EXG) 11.5c
The Kalgoorlie gold hopeful tracks its shares against the Brent Cook Life Cycle, which graphs the typical share movement of a resource junior from exploration to development.
Brent Cook, seeing you asked, is a well-known northern hemisphere rock kicker and investment guru.
According to the Utah University alumnus, valuations surge in the pre discovery phase, only to sag and enter an orphan period as the speculators quit. The shares then revive in the development/start up phase as institutions pile into the play.
Excelsior’s share movements neatly fit the template, having gained favour on first output from its open pit Kalgoorlie North Gold Project
Size wise, KNGP is no Super Pit. But with the Aussie dollar and production costs (including diesel) moving favourably, lustrous gold plays can come in small packages.
Excelsior chief David Hamlyn says KNGP’s attraction lies in its proximity to Norton Gold’s underused Paddington mill down the road.
Exelsior has struck a short term deal to supply the mill (now owned by China’s Zijin Mining) with 650,000 tonnes of ore.
“Our dirt makes the same margin for them as their low grade stuff,’’ Hamlyn says.
“It makes economic sense for them to treat it and it makes economic sense for us to supply it.’’
With a skinny complement of 15 staff, Excelsior started mining in November, with a “base case” calendar year target of 29,000 ounces.
A planned underground expansion could expand this to 50,000oz.
Current reserves of 296,000oz won’t exactly have Newcrest or the nearby Northern Star quaking in their Blundstones, but Hamlyn is confident that a modest $1m exploration effort will unearth further riches across 22 target areas on the tenement (only seven have been tapped so far).
On numbers spied on the back of a Palace Hotel coaster, 40,000oz would generate annual free cash flow of $12m, based on $A400/oz of all-in costs.
We hazard a spec buy.
Gold remains the one bright spot of resources and since when has Brent Cook ever been wrong?
x

Allow me to explain why gold is going up

1) There is buying interesting for gold in Wall St.
2) You can see that via the rise in GLD bullion inventories.
3) Wall St still rules the financial world.

Anyone who denies any of those three facts, or fails to see that GLD inventories are a direct tell on the popularity of holding (or otherwise) gold among the real big money players, is either a snooty goldbug purist who still refuses to face reality about the importance of "paper gold" GLD and warns of apocalyptic things if the world collapses and you try to claim your bullion from the nice people at GLD, or a fucking idiot. Or both. And yeah, I used a swear word today. I've been keeping them away from the blog for a while but sometimes there's no choice.

Bottom line: Gold's going up not because of more buyers then sellers in the one ounce coin end of the market, or China, or India. it's going up because of more buyers than sellers in the multiple bullion bars end of the market, the people who predict the US Dollar. That's most likely because they don't believe Janet and her 2016 rate rise thing. And that's the real change here, that big money has decided to fight the Fed.

okay, so we're all geniuses again

A chart:



And there was me thinking we were all dumbasses. So don't forget the only chart you REALLY need to consider when the question is newsletter mining anal ysts and their abilities:


A short lesson lesson on news release timing in the mining sector

There's a big difference between releasing news of exploration programs in early February rather than early March of any given year.

1) One of them is a strategy intended to wow the retail audience at PDAC at the start of March. The timing is splashy in in-yer-face-that-day to get people talking about you.

2) The other one is to make sure big hitters who get the VIP rooms and fly private jets into the BMO Global Metals & Mining Conference in Florida at the end of February have plenty of opportunity to think you over before the real money gets together.

Both are valid strategies. Guess which one Lake Shore Gold (LSG) (LSG.to) is using?

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Lake Shore Gold Confirms and Expands Shallow, High-Grade Gold Mineralization at Whitney Project

TORONTO, ONTARIO--(Marketwired - Feb 4, 2016) -
  • Drilling of 110 Zone to south of Hallnor shaft:
    • Confirms and expands mineralization to west (Intercepts: 29.42gpt/12.0m, 8.45gpt/9.5m and 6.45gpt/9.2m)
    • Extends Zone to depth (Intercepts: 4.62gpt/3.1m and 3.02gpt/10.7m)
  • Drilling in north volcanics indicates potential to extend near-surface resources to north and to depth (Intercepts: 3.20gpt/7.2m, 1.21gpt/15.0m and 2.24gpt/8.5m)
  • 30,000 metre exploration program continuing with two surface drills.
Lake Shore Gold Corp. (LSG)(NYSE MKT:LSG) ("Lake Shore Gold" or the "Company") today announced results from the first 13 holes (1,600 metres) of a new surface drilling program at the Whitney Project ("Whitney"), located to the south of the Company's Bell Creek Complex. The program includes 30,000 metres ("m") of surface drilling and is designed to test a number of high-potential areas between the past-producing Hallnor and Broulan Reef mines. continues here.

2/3/16

B2Gold (BTO.to) (BTG) and the interesting insider trade of the day

Today Jerry Korpan, director of B2Gold (BTG) (BTO.to), spent a touch over CAD$400,000 on BTO shares, average buy price CAD$1.12.

Reasonably chunky, plus the type of thing board members tend not to do if there's an equity placement in the near future.

Gotta wonder how stupid the dude who sold BTG at U$0.60 a couple of weeks ago feels.

How long before Frank Giustra hires Daniel Ameduri...

...of Future Money Trends to pump his awful LithiumX (LIX.v) scam? Looks like he needs to do something quick, the cash he bribed Keith Schaefer with to write his puff piece has fallen pancake flat already. Hey Frank, time you got the pro pumpers in and not the amateur hour acts.

Hey Dan, just trying to drum up some biz for you, stick me on commish.

Panama issues an arrest warrant for Richard Fifer and Ken Morgan of ex-Petaquilla Gold (ex-PTQ)

Ahh, y'see, told you it would end badly.

All this ex- Prez Martinelli corruption scandal thing has finally caught up to the deals he did with Richard Fifer of Petaquilla, now hiding in Brazil or Spain (we've had versions on both countries recently) after absconding from Panama before the law caught up with him. We're now at the point where their dirty deals are being uncovered, such as the one that's making First Quantum sweat hard now. What seems to have transpired is that Petaquilla first sold a couple of concessions to one company (Golden Dragon) and then sold them to First Quantum without telling them the Golden Dragon deal, which for one thing is fraud and for another can ruin your weekend if you need that terrain to build your massive copper mine and then Golden Dragon come along and say "Errrr....no...that's mine actually" at the end.

So the brains behind the double deal, Richard Fifer (of course) and Ken Morgan, a Vancouver CA who was the CFO of PTQ at the time, had criminal charges filed against them by Golden Dragon quite a while ago. That's normal under the circumstances, but what's new news is that the State of Panama apparently agrees with the Golden Dragon side of things and has issued arrest warrants for both Morgan and Fifer. And what with Fifer doing his impersonation of The Scarlet Pimpernel these days, I betcha that they'll find the must-easier-to-tace Morgan first. That shouldn't take long either, as Panama has just requested that Interpol Intervene (as it were), arrest Morgan and ship him back to Panama (which could happen at any moment but is most likely to happen when Morgan tries to cross an international border).

Bottom line: We always knew Fifer was a crook, the fun thing now is to see how First Quantum manages when they tell the world that a key location of Panama Cobre isn't theirs and the real owners, Golden Dragon, don't want to sell.

Minera IRL (MIRL.L) (IRL.to): The NOMAD resigns

Here's the NR, here's the text:


February 3, 2016

Minera IRL Limited: Resignation of Nominated Adviser and Update on Suspension

LIMA, PERU--(Marketwired - Feb. 3, 2016) - Minera IRL Limited ("Minera IRL" or the "Company") (AIM:MIRL)(BVLAC:MIRL) announces that Canaccord Genuity Limited ("Canaccord"), the Company's existing Nominated Adviser, has pursuant to its Nominated Adviser and Broker Agreement (the "Agreement") given the Company 30 days' notice of the termination of the Agreement. Canaccord will therefore cease to act as the Company's Nominated Adviser and Broker from 3 March 2016. The Company has commenced the search for a replacement Nominated Adviser.

The Company has been suspended from trading on AIM since 21 September 2015. Under the AIM Rules for Companies, the admission to trading on AIM of the Company's shares will be cancelled should it remain suspended for six months.

The Company must therefore appoint a replacement Nominated Adviser and re-commence trading on AIM on or before 21 March 2016 in order to maintain its admission to AIM.

The board is addressing the matters that led to the suspension and expects to make a further announcement regarding progress within the next week.

PS: In the upside-down world of IRL this is probably a good thing. But with Team Hodges lurking in the background, you never know.

2/2/16

quiztime

Name this scenic spot:



Big prizes for those of you who work out the right answer.

Peru presidential election: Time to take Julio Guzman seriously

Subbers of The IKN Weekly will know the name because we mentioned it a couple of weekends ago, but it's time to note here on the blog that Julio Guzman, virtually unknown before Christmas, is rising rapidly in the voter intention polls for April's presidential election and now represents a serious threat to the establishment figures (Alan Garcia, PPK, Cesar Acuña) who are vying for that all-important second spot behind Keiko Fujimori that gets them into the inevitable second round run-off for the big prize.

Guzman (apologies for lack of accent over the A, doing this post in the airport on a phone) is now polling 10.4% and just in second in front of PPK and Acuña, according to pollsters GfK on Sunday (Keiko on 31% remains a lock for the round one win). Four weeks ago Guzman was on 2%, two weeks ago in a different company's poll he was on 5%. Those are big strides in a short time and it's being fuelled by a groundswell of opinion that wants to see fresh blood in its political scene. Smart, eloquent, presentable and with a strong online presence (his shoestring campaign to date has been based squarely on social media), Guzman fits the bill. Another thing is the lack of difference between all main challengers for the job, as they're all centre-right orthodox neoliberals in real terms, none of the above are going to change the economic path of Peru. That suits the real power in the country just fine (i.e. the dozen or so families that run the place), which means Guzman can slot right in if the great unwashed masses decide they want "change".

Anyway, bottom line is that Julio Guzman is brand new on the scene and as of this moment is to be taken seriously as a candidate. He is at least rattling the old guard, never a bad thing in my experience.

On the road


Your humble scribe will not be in the office this Tuesday. Things to do. Have nice day yes thank you nice yes.

2/1/16

"There's no such thing as a bloody cat licence"

Quebec News!

Man jailed for not having cat licence
Dan Smith was jailed Thursday for not having a Gatineau licence for a cat he says isn’t even his.
The 65-year-old retired refrigeration technician arrived at the Gatineau police station around 10 a.m.
“I want to get this over with,” Smith said.
“I’m turning myself in,” Smith told a woman at the front desk of the station. “I’m surrendering.”
Smith has been chased for months by animal control officers and police in Gatineau over a $276 charge — fine and court costs — after being found guilty last summer of not having a licence for a cat, as required under municipal bylaw. Continues here

A good excuse to stick some Python on the blerg:


Chart of the day is...

...gold, weeklies:



Nuff said. No trades planned today, so the rest of this fine and warm summer's Monday will be solemnly dedicated to Plan H, as they say in the local vernacular. Catch you later.

Do not feed the animals (from IKN351)

The opening rant from IKN351, out yesterday.


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Do not feed the animals (part 24)

Rock the hard jams, treat it like a seminar
Teach the bourgeois, and rock the boulevard
Some say I'm negative but they're not positive
But what I got to give? The media says this.


Don’t believe the hype, Public Enemy, 1988



Last week, on the insistence of a few people, I read the note “It’s time to buy uneconomic gold companies”, by Cejay Kim and published by Palisade Research on January 27th (1) then picked up by a whole bunch of rebound sites (e.g. Mining dot com here (2)). Its argument is a simple one, that you (and I) should get out there and buy shares in (junior mining exploration) companies that have uneconomic gold assets as flagship projects, with names mentioned including Chesapeake (CKG.v) with its Metates project in Mexico, International Tower Hill (ITH.to) and its Livengood project in Great White North, Exeter Resources (XRC.to) and its Caspiche project in Chile. We’re also offered a list of thirty big gold mine projects and their resource count that comes to over a billion ounces of gold. We’re told it’s a good idea because of their “optionality” on the metal and that if gold goes higher, these beaten down stocks will go a LOT higher, with the classic “ten bagger” phrase used by its keen and thrusting author for your delectation and reading pleasure. Yes indeed, the article annoyed me immensely on several levels:

It’s pure BS: There’s a reason why these so-called “gold assets” are priced at pennies to the dollar, they’re not economic now and the vast majority will never be economic ever, not ever, never, nunca, jamais, keine freakin’ chance. We’re offered a list with “one billion ounces of gold” and invited to ask how much a billion ounces of gold is worth. We’re given CKG.v at Metates as an example and told it’s not a project that can be financed“...despite having an in-situ value of C$31 billion” (they underlined the big dollar number, not me). Allow me to answer the question: A billion ounces of uneconomic gold is worth zero dollars and zero cents because if it costs more to get out the ground than you can sell it for, it’s worthless. But hey let’s up the ante because according to USA’s oceanic people NOAA, there are around 20 million tonnes of gold in the world’s seawater (3). In old money, that’s 643 billion ounces (yeah, with a B). Not only that, but about twenty seconds on Google will show you that people have spent time working out successful methods for extracting that gold (4).* But despite there being oodles and oodles of ounces of gold, out there, identified and available, they’re all worth nothing.


And be clear, just because they’re uneconomic now it doesn’t mean a sudden rise in gold makes them economic. If there’s one lesson you should take from the boom/bust era for the exploration mining sector, it’s that one. What the PM sector is crying out for isn’t big projects or high grade projects or low grade projects or cheap projects or expensive projects, it’s economic projects. A sudden spike in gold can outrun underlying costs on a temporary basis (we saw that in 2010) but by the time things such as build decisions are made the cost creep will be there in a whole bunch of things, from rebar to geologists to drilling contracts to the price of NaCN, not forgetting of course forex of other currencies against the dollar (gold is money, but you think gold goes up in US Dollar terms and other monies don’t, Mr. Goldbug?). And also remember that just because Metates (for one example of these never-gonna-happen projects) suddenly gets into a zone where it’s theoretically economic, there’s still a whole bunch of better projects waiting to be bought, developed and built. The way it works isn’t on an individual project level, it’s more like a sports league table and the best teams, the best projects, are the ones with the most points. Those are the projects and companies that are going to get bought first, long before the mid-table mediocrities or the moose-pasture relegation candidates find people sniffing around. Put another way, marginal projects stay marginal, even when the nominal economics make them theoretically possible during the possibility of a short window when gold price outruns underlying price inflation. That’s what the last few years should have taught us all. Or put yet another way, do you seriously believe Caspiche (XRC) gets built before Curraghinalt (DNA)? If not, why are you buying Caspiche with money you could dedicate to Curraghinalt?

It’s written by BS merchants. The whole mining commentary world is something forced upon me, not something I enjoy and as time has gone on I find myself reading less and less of the guff and nonsense that pretends to be sound advice, because it’s often anything but that. It normally takes prompts from third parties to get me to read “expert anal ysis” these days, such as the way this Cejay Kim article got to my eyes. But even among the mediocrity of the mining parasite world a special place in hell awaits the two-faced toerags at Palisade.


Cejay Kim is a product of the Casey Research school of copywriter bullshit, he knows exactly how to market to the mouth-breather end of the investor world, hit the greed button, sequins and dollar signs suddenly appearing before their eyes.


Palisade has two main arms and a couple of offshoots, such as the weird “Palisade Radio” thing, basically a podcast by any other name that also appears on Youtube. But the main parts are Palisade Global, which is an investment firm that provides solutions to companies in return for fees and Palisade Research, which is purportedly sellside-only. Ask Palisade about their set-up and they’ll tell you sophistic nonsense such as how Palisade Research offers investment ideas without paid motivation, while Palisade Global offers paid-for services.


Which means that our friend Cejay Kim can decide to put on his “Palisade Research” cap and pretend to offer conflict-free opinions while all the time he’s really employed by a company that takes cash from mining companies in order to promote them to you. If the combo of a person who learned his trade at Casey Research, is paid by mining companies who give his promotion company money for services, then pretends to write independently and without conflicts isn’t a very large red flag to you I still have that bridge for sale, just outside Brooklyn NY, viewings on request.


It spread to the point where I started to field questions. With the coverage it got, I found that not only was I told to go and read it by people, like me, were scoffing at the idea but also by people who were at least beginning to buy into the investment theory. Out of the blue late last week came a smattering of mails from certain people who, without citing the piece, floated the idea of buying these “out the money gold options” as a plausible investment theory. This annoys me because that means there’s not just a smattering but a whole bunch of people who have failed to learn the lessons, the hard jams, that Mr. Market has offered us these last few years. Hope is not a viable investment thesis. If you want to invest in the gold mining sector because you think gold’s going to appreciate I respect your opinion, but if you want to buy into the awful Livengood project (to name just one of many) because you know gold’s going to U$5,000/oz because Doug Casey’s “When Money Dies” theory isn’t dead like a Norwegian Blue parrot but just restin’...well it’s time to take a good hard look at yourself in the mirror and ask yourself why you’re not as rich as Croesus yet after all that effort you put in over the last ten years.


But here’s the thing that bugs me the most. My real gripe about all this “optionality” thing is the question of wealth creation. I got into financial analysis a long time before I stumbled backwards into the mining sector, but since that accidental turn in my life (lucky or otherwise, the jury is out) the mining world has been a never-ending source of fascination for me. That’s for many reasons, but one of them is how you can have decent, upstanding people who work for the good of all in the same sector, the same boat, hell even in the same room as utter parasitical scumbags, complete sociopaths and dregs of society whose only ambition is to take money away from you.


Mining is a fascinating sector of industry because it has done and will continue to do a great deal of good for mankind. It contains the essence of entrepreneurship by which the brain of man can apply itself to something as common as hard rock and, if done right, create real tangible wealth from the process for that brain and for those around it. There may be equals to it (e.g. agriculture) but there is nothing more positively capitalist than the process of mining. I get accused of being a pinko lefty from time to time and I know my politics are social (lower case S) in flavour, but scratch the vote preferences away and I’m as strong a supporter of capitalism as you’ll ever find. When done right, its capacity to create wealth has been the single strongest driving force behind human development since at least The Renaissance (arguments to further back in history accepted), we should be proud of our small parts in this process.


But capitalism isn’t good or evil, merely a conduit for our own psyches. Pecunia no olet (money has no smell) said the Romans. Buying into this uneconomic gold projects argument doesn’t create any wealth at all. If you buy CKG at 50 and it goes to 80 you win 30, good for you, but that 30 hasn’t suddenly appeared from nowhere, stocks unlike economies are a zero sum game. On discussing this “It’s time to buy uneconomic gold companies” article with a couple of industry professionals, one of them hit the nail on the head by saying, “These guys pushing this strategy... are the same pundits that turn right around and bash the industry for not making any money, no retained earnings and buying shit assets”, and that’s exactly right.


Hey, all you disgruntled investors who are now waving your pitchforks at the TSX Venture exchange people, giving it the rowdy shout at the VRIC “Townhall Meeting”, let’s have the person there without sin casting the first stone. I’m not talking to the Venture Exchange, I’m talking to you, Venture Exchange investor. You want a “clean” exchange, you want to “get rid of the scams”, you want “the zombie companies” to die? Well stop feeding them! Enough is enough, turn your back on these crud projects inside crud companies run by crud managers for the benefit of their cruddy lifestyles. 

Do Not Feed The Animals.


If you want to get rid of the moose pasture peddlers, stop buying their stocks and stop giving the slightest credence to people like the ones working out of Palisade who’ll give you what they frame as independent advice while accepting their thinly disguised bribes from people inside worthless companies looking to sell you more paper. Fool me once, shame on you. Fool me twice, shame on me. Fool me 25 times, get a “valued client” special V.I.P. invitation to the PDAC lunch and a Christmas card from your broker every year, without fail.


Yes for sure a stock market that works and creates true wealth is a stock market that sponsors companies with real projects and lets the others die, so the TSXV has to get its house in order as well. But moaning at a townhall meeting isn’t going to do a jot of good if your eyes are still lighting up after reading two-faced BS merchants and their carefully crafted and lawyer-approved greed-gland material.

*According to this (5), which I haven’t checked and I’m not going to either, gold is the least of your economic concerns when it comes to seawater: 

If you could extract gold to get just 2.5 ounces you would also get...7.3 ounces of lead, 7.3 ounces gallium, 36.5 ounces of mercury, 48 ounces of chromium, 68 ounces of silver, 13.6 pounds of copper, 13.6 pounds of tin, 15 .2 pounds of aluminum, 15.2 pounds of titanium, 28.8 pounds of Vanadium, 50.1 pounds of uranium, 51.6 pounds of iron, 100 pounds of Nickel, 152 pounds Molybdenum, 1.29 Tons of lithium, 22 Tons of silicon, 34 tons of boron, 121 tons of nitrogen, 212 Tons of Carbon, 2977 Tons of Potassium, 3121 Tons of calcium, 6865 tons of sulfur, 9796 Tons of magnesium.”



1/31/16

The IKN Weekly, out now




IKN351 has just been sent to subscribers. It has words and numbers.

CR7 scores a goal

Cristiano Ronaldo scored a hat-trick for Real Madrid today in his team's 6-0 romp over Espanyol and this, his second of the three...



...is a nugget of footballing beauty. What a fabulous player he is, goal of the weekend let there be no doubt.

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

...in reverse order:

Third Place: "The Muck Pile is back". Hey I'm glad about this, for some reason this one got popular and a good thing too, the more people visit the best intel source on junior mining the better. Muckpile Mike has all the right things, deep knowledge of his subject (unlike IKN), sardonic wit and excellent curation skills. Everyone involved in the junior mining scene should read everything this guy writes, it's as simple as that.

Second Place: "12% up in 24 hours on the new position". Oh I bugged you three times last week about this, which was rather puerile of me but I'm happy to have finally picked a winner and timed the entry well. It's been a tough old time in the sector. Anyway, it ended up 20% and bits on the week, all after I'd made it the main feature in IKN350 last Sunday and bought some early Monday as a result. And if you're not a subber and want to know the name of the company just write a mail, I'll tell you by return post.

First Place: "The Vancouver promotion community LIX Frank's ass". And this post won the week's hit count by a country mile. It never ceases to amaze me how the feedback comes from a post on an obvious scam promo pump too, e.g. I get "Oh I'm glad somebody's said something at last!" from people who work in sellside brokerages, which begs the question as to why THEY don't say something (yeah, I'm talking about you G). Anyway, the LIX pump, destined to transfer cash from the green to the mean, is going to be fun to watch. Plus the bonus prize, we now know the true morality of "energy expert" Keith Schaefer. Anyone with any sense will ignore that pump artist forever.