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4/2/16

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

...in reverse order:

Third Place: "The amazing thing about Dynasty Metals & Mining (DMM.to)". This one is also at the centre of a rant in this week's edition of The IKN Weekly, IKN360. Salutary tales, and all that.

Second Place: "More Lithium X (LIX.v) paid pumping: $40k from company to securities fraudster Jonathan Lebed". The golden rule about any worthless scam: Only the people at the very centre of it all know the timing involved and when they're going to pull the plug. On you. Everything that disgusts about the junior sector rolled into one stock story, a shame on all your houses.

First Place: "Goldcorp (GG) in late-stage talks to merge with Barrick (ABX)". The now-traditional IKN April Fool's Day post, guaranteed to break the ice at parties. Every year I spent about three minutes thinking of something or other, every year I think that surely they won't fall for it this time, every year I guffaw and chortle at the "Are you sure???" e-mails received from the great and the good in the mining industry until the reality is revealed. PT Barnum is alive and well and living in Vancouver.

Kaizen Discovery (KZD.v) and the power of magical accountancy

On October 26th 2015, Kaizen Discovery (KZD.v) closed its deal with AM Gold and Rokmaster Resources on the Pinaya property in Peru. Here's the relevant blurb from the latest company MD&A, the hack comes underneath
On October 26, 2015, the Company closed its definitive acquisition agreement with AM Gold Inc. (“AM Gold”) that gives the Company 100% ownership of the Pinaya Copper-Gold Project (the “Pinaya Project”) in Peru’s provinces of Caylloma and Lampa. Under the acquisition agreement, the Company has acquired Canper Exploraciones S.A.C. (“Canper”), a Peruvian subsidiary of AM Gold. The Pinaya Project is Canper’s principal asset. AM Gold received 15,384,615 common shares of the Company, a cash payment of $500,000 and a US$198,617 reimbursement for certain property-maintenance payments made by AM Gold (note 4). 

The Company also closed a concurrent agreement with Rokmaster Resources Corp. (“Rokmaster”), which previously had entered into an option and joint-venture agreement with AM Gold to earn up to a 75% interest in the Pinaya Project by spending approximately $26 million. Rokmaster and AM Gold have been engaged in arbitration proceedings, which were suspended pending closing of the transaction with the Company. Under the terms of the agreement with Rokmaster, (i) Rokmaster transferred to the Company certain of Rokmaster’s drill equipment located in Peru and (ii) Rokmaster agreed to, among other things, terminate the arbitration proceedings with AM Gold and Canper. As consideration, the Company issued 2,000,000 common shares of the Company and paid $300,000 to Rokmaster.
Summing the deal up, KZD got Pinaya for $1m in cash and 17.4m shares issued. At that time, KZD shares were trading at 17c each, which makes them worth $3m (rounded) and let's go with that number, rather than the 10c and $1.75m value on them this weekend.

Bottom line: KZD paid a book value of $4m for Pinaya.

Last night in a late night Friday NR (and how we love those) KZD announced it had vended out an eventual maximum of 20% of Pinaya to its Japanese business partner for $2.5m, which would value the property at $12.5m. The deal includes an initial no strings payment of $0.625m for 5% of the property. Also KZD lost the services of both its CEO and VP Corp Dev last night which is probably a coincidence innit guv.

Can't accuse the Canadian mining industry of not being able to create wealth, right? Right?

By the way, we could also add that the Pinaya property is a dog of monumental proportions, has been picked over by mining companies large and small from time immemorial and has one of the worst community relations profiles in all Peru (including an ongoing war between the two main villages on the property), but why complicate a good book-keeping story with facts? And don't tell the Japanese either, please?

4/1/16

How to Hack an Election (must-read)

Bloomberg has the stone-cold obligatory story of the week, it's right here on this link, it's a blockbuster. Here's how it's framed at the top and when you get to the contents it turns out to be every bit as good as the promise.

How to Hack an Election 
Andrés Sepúlveda rigged elections throughout Latin America for almost a decade. He tells his story for the first time.

Whole thing here. Go now, it's wonderful.

More on the Torex Gold (TXG.to) mine blockade

Yesterday morning IKN was the first to tell you about the latest round of community relations problems at the Torex Gold (TXG.to) Media Luna mine in Guerrero, Mexico. 

It wasn't an April Fool.

Last night Mexico's Milenio newspaper ran this report on the problems, i.e. hundreds of locals from three small towns around the mine who are blocking the mine entrances (and letting workers out, but not in) because TXG hasn't kept its word on the social programs it promised, plus the local fishing community is still annoyed about the way the mine is polluting local rivers and killing the fish.

To date no resolution between the two sides.
To date TXG hasn't bothered to tell the market about this obviously material piece of news.

The Friday OT: BT and Tori Amos; Blue Skies (Delphinium Days Mix)

This track is now 21 years old, many moons since it was laid down and I only found out about it last week, which amply demonstrates my ignorance of music. But I don't care. I've found it now. It's amazing. I'm obsessed. My life has changed again.

Change yours for the better too by following these simple instructions:
1) Rig this to a quality speaker
2) Turn up the volume
3) Hit play
BT and Tori Amos will do the rest.



Thank you AK.


PS: once you're done and you want more, start here.



Chart of the day is...

...gold, dailies, post jerbs reports:


Not something anyone should be worried about. Gold remains in "slight deterioration but range-bound" mode, good gold miners are making profits at the current price, mediocre companies aren't. End of comment.

UPDATED: Goldcorp (GG) in late-stage talks to merge with Barrick (ABX)

Back in February and five days before the deal hit, we revealed the biggest mining M&A deal of the year so far when Tahoe Resources (TAHO) (THO.to) acquired Lake Shore Gold (LSG) (LSG.to) in an all-share friendly deal.

This morning we knock that one out the park, because the late stage talks between Goldcorp (GG) and Barrick (ABX) aren't just enough for "biggest miner" deal, this is fusion that will make world-scale headlines. And you read it here first, ladies and gentlemen.

Garofalo is about to make his name forever. Expect a "we have no comment to make" NR from GG and/or ABX later on today.
 
UPDATE 09:30am local time Friday: Reader S mails in and adds extra information to this breaking story:
"...FCX is also in on the deal, all three are rolling up into a conglomerate, and they even have a name picked out, Freeport Occident & Orient Lingotes."

This could become a world record mining deal.

UPDATE 2: The market is beginning to react to the news on this potential massive deal. More information here and here.

UPDATE 3 midday Friday April 1st: We at IKN Nerve Centre send you warm and fraternal greetings on this April Fool's Day and hope you have a pleasant weekend.

3/31/16

The massive, headline-grabbing March 2016 gold rally

That massive upmove in gold you've heard about all month, here it is in visual form thanks to Kitco:


In US dollars, gold went down 0.6% in March 2016
In Canadian Dollars, gold went down 4.04% in March 2016.

Just sayin'.

OT: British colonial delicacies

Reader "PK" writes in, mails this photo and asks your humble scribe, "Have you ever tried this?"


Yummy, no?

My stars I have some sick readers...

Note to Reuters re. Kinross (K.to) (KGC): When covering a mining company please use a reporter who understands mining

Kinross yesterday lived up to its well-earned reputation of valuing style over substance with the publication of its much-anticipated re-work of the Tasiast expansion project. True to form the company didn't even wait til the end of the first paragraph before turning on the BS spigot...
"Phase One is expected to reach full production by the end of Q1 2018 with estimated capital expenditures of approximately $300 million."

...but we note with dry amusement that it had the desired effect with bizwires:
Kinross to spend $300 mln on N. Africa mine expansion
March 30 (Reuters) - Kinross Gold Corp said it would spend $300 million on the first phase of expansion at its Tasiast mine in Mauritania in North Africa. (continues here)

Because the only problem with that little nugget of information is that it's not true, apart from that we're good. As Special K pointed out just a few lines later:
"Preparations for Phase One construction will begin immediately, with expected forecast capital expenditures of $300 million, plus estimated capital stripping of $428 million (2016-2019)."
This creates existential questions in my head.  Things such as:

  • When is capex not capex?
  • Wouldn't it be fun to watch K spend $300m in capex, then decide not to spend that extra 428 large on capitalized stripping work, then try to claim all the capital expenditures on phase one are complete and they don't need to spend any more in order to mine phase one?
  • Why do birds fly South for the winter?*
  • Why do mining companies insist on bullshitting us to within an inch of our lives?
  • Why do fools fall in love? 
*it's too far to walk

The amazing thing about Dynasty Metals & Mining (DMM.to)

After reading its NR on its financial year report today (and you don't even need to open the financials on this one), I'm amazed there are still people willing to buy this stock and give it an $8m market cap. Things like this line at the end...
These conditions and events cast significant doubt on the assumption that the company may continue as a going concern.
...should be considered a significant understatement, be in no doubt that this company is going bankrupt and its shares will be worth precisely zero dollars and zero cents.

Lawrie Williams features Minera IRL

No dissent from your humble scribe on what he's written, here's how it starts:

"The latest move is the resignation of Eric Olson as Chief Operating Officer and the appointment of Francis O’Kelly to the Board as a non-executive director.  To an outsider this may not mean very much, but Olson was very much a member of the group, led by Daryl Hodges, which dissident shareholders felt had usurped control of the company following the untimely death of former CEO Courtney Chamberlain, while O’Kelly was a long-time consultant to the company and was close to Chamberlain for many years, and has an understanding of the company’s assets and potential which few others will have possessed."

Go see it all here.

Torex Gold (TXG.TO) with community problems again

A protest by locals, who have blockaded the mine gates.

Has TXG mentioned this to the market yet?

3/30/16

Minera IRL (IRL.to) report in today's Peru bizpress (good news for shareholders)

Today, Peru's main bizmedia paper 'Gestión' ran a report on the ongoing Minera IRL saga, a photo of the dead wood version right here:



This is how the main part of that above translates:

Minera IRL will look for more gold in Ollachea and its return to the stock market

Favourable winds and blowing for Minera IRL. Sector sources told Gestión that the relationship between the financial entity Cofide and the community of Ollachea (Puno) are still in good conditions after the situation generated in 2015 by the directorate of Minera IRL and the ex-presidents Daryl Hodges and Jaime Pinto, both of whom having been voted out (of the company) with more than 93% of shareholder votes against them. It is also understood that, in compliance with the mandate subscribed with Cofide, Minera IRL S.A. expects to begin an additional drilling program in Ollachea in May in order to increase its gold resources.

Return to the stock exchange
Recently, the Minera IRL Ltd parent company stopped trading on the London AIM exchange, which will allow the company a significant cost saving as the exchange is an expensive one in which to list. Regarding this, the company last week sent a notification to the Lima Market Superintendency in which it reiterated its solicitation for an extra 30 days in order to evaluate its return to the Lima Stock Exchange (BVL).

According to information supplied to Gestión, Minera IRL expects to maintain its BVL listing and to re-list in Toronto in April, the reason behind the aforementioned solicitation. 

The note
Activities
Diego Benavides continues as President of Minera IRL S.A. and Kuri Kullu Mining Company S.A. 
Also, Cofide is still interested in completing the mandate for the U$240m debt financing package. We were told, "The company is looking to create value for its shareholders".

Advice on contrary indicators

My idea of a great contrary indicator voice is:
  • Preferably, somebody who talks constantly about your preferred sector of the market
  • Normally, somebody who's been around the market for long enough to sound expert.
  • Importantly, somebody who thinks highly of their own opinion.
  • Usefully, somebody who is easily swayed by other people's points of view.
  • Unfortunately, somebody with views and a voice that annoys you deeply on a natural, instinctive level and you need to concentrate just to listen to them and resist the urge to tell them to STFU on umpteen occasions.
  • But most vital of all, somebody who, when it comes right down to it, truly does not have a single clue about the markets.

The people who tick off that type of list are few and far between so if you find someone who matches consider yourself lucky, you've hit on something very precious. However, be clear that one thing you must never do is tell your contrary indicator. Or in fact it's best not to tell anyone else, because eventually the message might get back to your jewel of a voice and then the game's up. The golden rule is: Never let your contrary indicator know how stupid they are. Ever. The one thing you don't want is for them to get smarter.

IKN dedicates this post to A. Person, who has been of great help in timing the markets recently. Thanks, A. Person, you're a star. Never change.

UPDATE: Reader 'SP' reads this post and kindly sends in this link to an XKCD:


Good shot, SP. 

The beatings will continue until morale improves

Following on from the last post yesterday in which we noted the very limited effect that the words and deeds of Yellen/Fed/etc have on the price of gold and silver..


...the goldbug theory of how gold was immediately going to fly to the moon on the back of yesterday's policy hints has yet again been blown out the water. They're undoubtedly blaming "them" (aka "THEM!") this morning for the orchestrated take-down of the world's only true and pure etc etc.

It couldn't be that an parabolic-level of overly-simplistic worldview isn't enough to explain a complex thing such as capital markets, could it?

3/29/16

The Fed's effect on gold (and silver) redux

Adding on from yesterday:



Three big Fed-driven market moments over the last two trading weeks and....0.9% added. If you want to get into a lather about that type of market move go ahead. Onanism isn't illegal, after all.

UPDATED: First Mining Finance (FF.v): Keith Neumeyer props up its share price by quietly using First Majestic (FR.to) (AG) cash

RE the UPDATE: Please read the update below. And as noted on previous occasions, I much prefer to be called out wrong on a subject and leave the evidence on the blog for all to see rather than delete the post, so it all remains as-is.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Here's an interesting part of the First Majestic Silver (FR.to) (AG) year-end financials:


Suddenly, and for the first time ever, FR.to has declared an equity position in First Mining Finance (FF.v) to the tune of U$3.5m (which is probably something close to 11m shares of FF.v). This is a brand new line-item, it didn't exist in the 3q15 financials or any other before it and that basically means Keith Neumeyer, head honcho of FR.to, has been using the big corporations cash treasury to keep his other smaller company's shares from collapsing under heavy selling pressure.

Also notable is how there are no registered filings on these purchases, how FF.v didn't run any equity financings in the period (i.e. these were open market purchases) and how FR.to (i.e. Neumeyer) stopped the buying before FR.to got its position to 10% of FF.v shares out, which would have triggered all the normal declarations processes.

Maybe he wanted to keep this quiet...hey I wonder why?

UPDATE: FR.to rebuts this post:

Otto - you are incorrect.  First Majestic received equity in FF as a result of property transfer in April 2015.  See link…
Non-cash transaction.
Todd Anthony, MBA
VP Investor Relations
Tel: 604-688-3033
Toll Free: 1-866-529-2807

IKN back. I never mind being proven wrong. However I do have a "why wasn't this declared on the financials previously?" question in with Mister Todd.


UPDATE 2: We get to the bottom of this and the result is I was wrong, but.....

Here's the exchange:

Otto: "so why wasn't it declared previously?"

Todd: "It was....From our Q2'15 financial statements" (at which point Todd shows Otto a screenshot of the 2q15 note 16, "other investments", where it was declared in this way:
Due to certain common directors and a common officer, the Company’s investment in First Mining is accounted for as an investment in associate. During the three and six months ended June 30, 2015, the Company’s share of First Mining’s net loss was $0.3 million (2014 ‐ $nil) and $0.4 million (2014 ‐ $nil), respectively.
As at June 30, 2015, the Company’s investment in First Mining has a carrying value of $3.0 million and a market value of $7.1 million based on Level 1 fair value measurement.

Otto: "But it wasn't classed as a financial asset (note 13, or note 14 in the YE). Why the change?" (because after all, it still has common directors and a common officer).

And then the e-mails went cold. So I asked the same question again and the answer came back.

Todd: "In short, due to the dilution of the Company through acquisitions, the ownership fell below of “significant influence” of FR over FF, and as a result it was downgraded from “Investment in Associates” and moved in Q4 into the category of “Other Financial Assets” where it must henceforth be marked to market every quarter."

And that's fair enough. Case closed.

More Lithium X (LIX.v) paid pumping: $40k from company to securities fraudster Jonathan Lebed

Yesterday we noted how the Frank Giustra Lithium-X scam has paid $50k to pumping scumbag Daniel Ameduri in order to push this worthless piece of crap to the stupid and naive, but it turns out that LIX has been busier than that. 

With thanks due to reader 'DS' for the heads-up, we read this morning that yesterday Jonathan Lebed's (who was prosecuted for securities trading front-running offences) new pumphouse "NIA" (wonderfully, "Preparing Americans For Hyperinflation") is also in on the scam. LIX paid U$40,000 to get Lebed's medium to pump the company in a mailer that starts like this:


It then goes on and on as per normal, but get to the small print and...
"NIA has been compensated by LIX $40,000 cash to produce a video about the company's Clayton Valley Lithium project, which NIA has agreed to feature on its web site."
...right on schedule. You can also access the video on Youtube and the NIA website (which I'm not linking to, not sullying my virgin-like lil' corner of cyberspace in that way). Again, this pump happening on the very day that the "friends'n'family' original placement at 15c came out of escrow and into free trading (with at least one block of 841,000 shares already reported sold by a significant insider yesterday). This reeks to high heaven.

By the way, it's been hilarious how the morons at CEO.ca, the same ones who were up in arms about the Zombie Juniors and moose pasture sellers, are now toadying round the scammer in chief Tommy Humphreys because of his part in this disgusting and obvious scam pump job LIX. How times change when there's money to be made, dumbasses, all hail the absolute power of denial.

Chart of the day is...

...copper, which is rolling over:


The bull narrative has a chance if it holds the U$2.20/lb line, but for what it's worth I don't think that's likely. And if it doesn't the clicking sound you hear will be ten thousand office desks hitting the fat red sell button on exposure to copper.

Don't say you weren't warned.

3/28/16

OT: My next phone will be an Apple

I'm guessing it works like this:
  • Bad people do a bad thing in San Bernardino.
  • FBI retrieves an iPhone from the scene of bad things.
  • They know exactly how to get the information from that phone from day one (see Edward Snowden for more on that)
  • The government decides to use this emotive case to try and break Apple's privacy policy and set a legal precedent. Files against Apple, makes a lot of public noise about what would normally be a non-public lawsuit.
  • Apple pushes back against the government strong-arm tactics, stands up for privacy laws and civil liberties, takes plenty of flak in the process (esp from the Make Murica Great Again mouthbreather end of the political spectrum, all in an election year).
  • Suddenly and mysteriously the FBI manages to "find a way" of getting the access it needs to this one physical phone in its possession. From a "third party". Legal case against Apple goes away.

I won't be buying an iPhone next time because I feel paranoid about my own data security. Or because Foxconn treats its workers like queens and kings. I will be buying one to say thank you to Tim Cook and his team for standing up to the US government's bullyboy tactics and keeping us a step further away from creeping police state. For a while longer, at least. I've heard they make good phones, too.

"We have been compensated by Lithium X fifty thousand dollars for our promotional pieces, online ads, and other digital marketing."

No not IKN, we're talking about the scam pusher Daniel Ameduri over at Future Money Trends, who did his job of helping Frank Giustra rip off the naive today by publishing his pump piece on the worthless stone-soup BS scam Lithium X (LIX.v). You can read the whole pump over on this link if (you have the stomach), get to the end of it and in the footing's fine print you get to read how Daniel Ameduri is getting $50k for his troubles. Beats working. Or having any vestige of morality.


Unsurprisingly this "liquidity event" also coincided with the day the original "Friends And Family" 15c placement on LIX.v came out of escrow and into free trading. But even more wonderful is the way Giustra decides today's the day to quote Gandhi at you! My stars, talk about living in denial..

My thanks to Tommy and Marvin for the heads up on this.

The Fed's effect on gold and mining stocks summed up in two words

Not much


Here's a ten day chart of GLD, SLV, GDX and GDXJ to make the point clear:


The games people play...

The two best bits from today's Minera IRL news release

There are two best bits, the best bits are two:

1) Those who followed this story last year are bound to remember how the usurpers in Team Hodges claimed that the delay to the filing of the financial reports was due to Diego Benavides hiding things, and corruption and refusing to co-operate and all types of vitriolic attacks against the person who was stopping them from asset-stripping the company and selling the Ollachea project to a ready-and-waiting third party (juicy commissions guaranteed). Here we are in March 2016 and the reason for the non-filing is now, "... uncertainty about the costs of eventual closure of the Corihuarmi mine in Peru, and related matters".

Ain't that cute? If you can't read between the lines on this one there's little hope for you, but just in case you need a second hint as to who has won out in the internal fight...

2) Check out this photo of the famous press conference held by Jaime NOT HODGES! Pinto and his cohorts, a presser we featured in this post on the day of the gig, November 18th.


With the exit of Eric Olson announced today, all five of the Minera IRL Ltd people who were at that presser on November 18th no longer work for Minera IRL, all have "been resigned" from the company. Now do you get the picture?

Here's today's press release, read and enjoy, we're darned close to getting all this mess sorted out now. Bye Bye Team Hodges, thanks for all the IKN posting opportunities.

LIMA, PERU--(Marketwired - March 28, 2016) - Minera IRL Limited ("Minera IRL" or the "Company") (BVLAC:MIRL) is pleased to announce the release of its delayed June 2015 interim financial statements, and the appointment of Mr. Francis O'Kelly as a non-executive director of the Company with immediate effect. The company also announces the resignation of its Chief Operating Officer, Mr. Eric Olson.
Financial Statements
As reported previously, completion of the June 2015 interim financial statements was delayed because of uncertainty about the costs of eventual closure of the Corihuarmi mine in Peru, and related matters. An international consulting engineering firm retained by the board to review these matters has completed its work and issued its report, and the findings have been reflected in the June 2015 interim financial statements. These statements will be released today and posted to the company's website at www.minera-irl.com and within the Company's SEDAR profile at www.sedar.com.
Directors and Officers
Mr. O'Kelly has an extensive background in Mining and Mining Finance. In his early career he worked in mines in Central and South America initially as a shift boss and ultimately as manager of a large gold mine. He then transferred to the banking sector and was appointed VP Mining at J P Morgan. He subsequently co-managed a mining investment house and ultimately worked on M&A mining projects for Standard Bank. He currently runs his own company dedicated to consulting to the mining sector. Mr. O'Kelly holds an honors degree in Mining Engineering awarded by the Royal School of Mines, Imperial College. He is a fellow of the Institute of Mining & Metallurgy, Chartered Engineer and Associate of the RSM.
In addition, the company reports that the Chief Operating Officer, Mr. Eric Olson, has tendered his resignation with effect from 31 March 2016. The board wishes to thank Mr. Olson for his valuable contribution during his time with the company. The board is in the process of considering candidates to fill this role and other senior roles in the company.


Eastmain (ER.to) and Columbus Gold (CGT.to)

Here's a 2016 year to date chart of the two, with GDXJ as a benchmark:



It takes an underachiever to spot an underachiever, I suppose.

Eastmain's initial response to the proxy slate here. This is going to be fun.

UPDATE: Reader "R" writes in to comment on the CGT news release:
This is the best sentence ever…

“The Concerned Shareholders are dissatisfied that, after more than 21 years under the leadership of the same President and Chief Executive Officer, Eastmain has not made sufficient progress in advancing its projects.”

 Total agreement in Ottolandia.

3/27/16

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

...in reverse order:

Third Place: "Lithium X (LIX.v): I knew I'd get one of these". You guys just like it when I get ranty.

Second Place: "Global Mining Observer does Evy Hambro of BlackRock". And quite right too, Alex W's profile of Evy Hambro was miles better than anything I wrote this week. Go see this one if you haven't, great piece of mining journalism.

First Place: "The Kinross (K.to) (KGC) Maricunga mine closed due to "Irreparable damage" to the environment" and the more you find out about this story, the more you realize how shitty K has been in Chile. Only now, after years of warnings and hand-slap fines, do they kick up a corporate fuss about the mess they've made (and for all the wrong reasons). 

The IKN Weekly, out now

 


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