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7/9/16

He got game

If you click on this and watch the basketball boy GIF contained, you'll laugh. Internet is good for such matters.

Harley Davidson opening a store in Lima, Peru

Here's the photo of workmen putting the finishing touches to the facade of the new Harley Davidson showroom in Lima, Peru, due to open very soon. Its first in the region. Photo yesterday Friday.


We may see the death rates of Peru's 1% go a notch higher next year.

7/8/16

Dynasty (DMM.to) has late Friday evening news

And it's almost certainly positive, right?

Right?

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jul 8, 2016) - Dynasty Metals & Mining Inc. ("Dynasty" or the "Company") (DMM.TO)(DMMIF) announces that Ruben Gellibert has stepped down as the Company's Chief Financial Officer.

The management and board of Dynasty wish to communicate that there is an ongoing process in place to look for a replacement for Mr. Gellibert.

The management and board of Dynasty offer their sincere thanks to Mr. Gellibert for his contribution to the Company and his offer to assist with the relevant transition process. The Company also wishes him well in his future endeavors.


Errr...wrong.

The Friday OT: Nils Frahm; Says

The studio version:




Youtube link here. His best track is 'Said and Done', but I don't want to scare you off immediately and this is still magnificent music.


Calafia Beach Pundit has also noticed the connection between gold and TIPS

Right here. in a note called "Gold and TIPS joined at the hip that starts with these words:
"It's rare that the prices of two different asset classes should track each other over the years as well as TIPS and gold have."

It's a good observation but the first time I saw it mentioned was by Mike Churchill of Churchill Research, who nailed this one down months ago. Here's how we reported on Churchill's insightful call way back in the subscription IKN Weekly IKN355, dated February 28th (screenshot excerpt):


Churchill had that as a note to clients on February 26th, a day when gold closed at U$1,226/oz. Find out more about Mike Churchill and his firm at his website, right here.

Daryl Hodges and Chuck Higgins are now investing in Pasinex Resources (PSE)

The thieves and liars who together tried and failed to asset-rape Minera IRL, Chuck Higgins of lawyers Fasken and Daryl Hodges, fired as head of Jennings Captial and now reduced to marijuana sales, are still in jolly cahoots as they invest together in a dog of a junior known as Pasinex Resources (PSE) and found on the Canadian CSE market. Here's your evidence:


Honestly Daryl, you'd be better off investing in a new pair of shoes.

PS: Hope you fixed up that pink speedboat, Chuck.

7/7/16

A reminder for the 'all metals are bullish' brigade

Even to get back to a pretty mediocre U$40/lb, the spot price of the buggy whip metal (you probably know it by its formal name of uranium) needs to rise by 50% from here.



"Yeah but U doesn't count, Otto."
"O RLY! Why not?"
" Because whurglegurgle japanfukushima chinabildeburg longtrrrmcontract athabasca, stupid Otto".
"Yup, you're right again."

HudBay (HBM) (HBM.to) Constancia copper production in May 2016

We know March saw HBM shut down part of its production facility at Constancia for machinery upgrades.

We know April saw a jerk-back in production and a strong figure, because that's what Peru's Mining Ministry (MEM) figures had for us at the beginning of June.

Now we know, thanks to the latest MEM numbers, that copper production at Constancia for May 2016 was 9,852 metric tonnes. That adds to the chart like this:



That's the second worst month for a year (behind the scheduled low March figure) and can probably go down as a miss, but we await the June numbers to know the full 2q16 production total. IKN's best guess is now around 75m Lbs Cu at Constancia, less than the assumption used in the fundies report on the stock in IKN370.

Your author receives a mail from Daryl Hodges...

...asking him to remove the photo of the house which is the registered business address of his Marijuana company "Four Twenty Investments". Apparently he thinks the photo is non-public information and also tells me that the house has nothing to do with Four Twenty Investments. 

I'm therefore torn: Shall I believe a proven liar such as Daryl Hodges, fired from Jennings and voted off the board of directors of Minera IRL due to shareholders' disgust in the way he managed the company? Or shall I believe the official information offered by the government of Canada which states that yes, that is the business address of Four Twenty Investments (Four Twenty Investments Ltd. 17 Ladykirk Avenue, Toronto, ON M4L 3K8)...


...and goes on to provide the shot of the house to make sure?



Interestingly, Daryl Hodges in his mail states that he doesn't own the property in question and never has. By sheer coincidence, the private advisory firm run by Daryl Hodges is called "Ladykirk Capital Advisors". But like I say, that's probably just a concidence. Innit guv.

UPDATE: Reader 'S' mails in to add...
 In terms of your link to the corporate info on Four Twenty Investments…I’ve got one better for you:

Link

Corporations Canada publishes all mandatory corporate info online for CBCA companies (the provinces have their own thing and you have to pay to search).

Maybe Mr. Dodges can read the big heading “CAUTION - THIS INFORMATION IS AVAILABLE TO THE PUBLIC IN ACCORDANCE WITH LEGISLATION” warning on the top……
UPDATE 2: Aha, this is interesting. The registered business address on that link sent in by reader 'S' has changed today! This morning it was as seen, all of a sudden it's Queen St. The first link in the post still hasn't changed though. And for what it's worth, Four Twenty Investments new business address, impressively changed just today after two years at 17 Ladykirk Ave (just coincidence again innit guv) is the offices of lawyers Blaney McMurtry LLC. We presume Hodges can't afford Fasken any longer.

That's the thing about shining light on roaches...

But what is interesting is this, a little further down the same page:



Seems that Daryl is still connected to 17 Ladykirk, however he might protest or try to con us otherwise.

UPDATE 3 Friday morning. And by some miracle...


...the lying toerag Hodges decides to change his home address too. You think you have all your tracks covered now?

Sandstorm 2q16

If you take the 12,500 oz AuEq number posted by SAND today and plug in the average gold price for 2q16 (according to the London PM Fix at least), this...



...is what pops out the other end. Just so you know. Lots more on Sunday, subbers.

7/6/16

Just to be clear...

...a market that allows a 97c bot deal with a dog like BSX.to is either very close to a near-term maximum or there already. The world of stupid only expands so far.

The IKN Weekly on April 10th 2016: "It’s time to be long gold stocks...to buy and hold... to position for the big wins, not the small fliptrades"

Through February and March, over at The IKN Weekly we enjoyed the pop in gold and traded some nice wins on it, too. But come the first week of April, it began to dawn on me that my game plan at the time, for gold to run to "somewhere above U$1,200" and then correct back under U$1,200/oz (my brain had fixed on U$1,180/oz, seemed like a pretty number), was looking incorrect. The market and its atmosphere was changing, so the main intro piece for IKN361 dated April 10th was this one, "Robert's mouse and Mark's gold unicorn". 

It's working out well so far. 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Robert’s mouse and Mark’s gold unicorn
But Mousie, thou art no thy-lane,
In proving foresight may be vain:
The best laid schemes o’ Mice an’ Men
Gang aft agley,
An’ lea’e us nought but grief an’ pain,
For promis’d joy!

To A Mouse, Robert Burns, 1785

Find below the last paragraph of last week’s intro piece, “Gold bulls living in the past”, which gets a re-print this weekend as it’s a good entry point to discuss the most likely weak point to my argument:

Fear has dissipated, the markets have rallied and for my money, quite literally, the next piece in the puzzle is a gold price that disappoints its hardcore supporters and dips under the U$1,200/oz level for a while (they do enjoy a chance of shaking their fists at the world, though). That will be our cue to fill up on quality precious metals equities because as day follows night, we’re staring at a whole sector that will be worth a lot more this time next year.

I still agree with the theory behind most of last week’s piece and the strategy that’s been in place but there ain’t no way to hide them lyin’ eyes, every time gold pretends to do its weakness act it pings back in style.

The great thing about having a plan is seeing it unfold and work well. The normal thing about having a plan to predict the near-term movements in gold is that it works right up to the moment it doesn’t. Case in point, the strategy I’ve been running since February which did pretty well for a while by doing this:

1)      Predicted the gold price surge over U$1,200/oz
2)      Predicted it had a limit
3)      Predicted a re-trace from the top
4)      Predicted a new bottom price of around U$1,180/oz in late March (or early April).

It’s been fun, but nobody gets to score a run if you only get to third base. I’ve been through a process of reflection in the last few days, considering my position and re-reading my own words while watching gold and the miners do things that don’t match my ideas. The weakness to my theory is that it got entrenched, I’m guilty of using U$1,180/oz as a totem and gold doesn’t need to drop that far in order to have complied with the ballpark. To cut a long story short, theories are great until they don’t match reality, I got too cute with both the market and myself, I’m bored with being wrong for the right reasons because two years of that is enough for any stomach. The main conclusion I’ve drawn is that gold may drop that extra bit and hit my unicorn number of $1,180/oz, but it doesn’t matter much any more. It’s a pencil-note in the margin, the correct position now is looking further out and positioning for where gold and this sector will be a year from now, not a week or even a month.

The precious metals stocks game is changing in front of our eyes. The sector of stocks we follow may or may not be overbought in the very-short-term, but when gold breaches U$1,500/oz down the line (and it will) current prices for quality stocks will be remembered as the bargains they were. It’s time to be long gold stocks, ladies and gentlemen. It’s time to buy and hold. It’s time to position for the big wins, not the small fliptrades.

The final verse of To A Mouse by Rabbie Burns is the one where he tells the mouse that it’s better off than he the human being, because a mouse lives in the present moment and doesn’t suffer from regret about past actions, or trepidation of what might come next:

Still, thou art blest, compar’d wi’ me!
The present only toucheth thee:
But Och! I backward cast my e’e,
On prospects drear!
An’ forward tho’ I canna see,
I guess an’ fear!

And two hundred and thirty years (and five months...I checked) after those words were written it would be all too easy to lose myself in past regrets and future fears.

  • Woe is me, my prediction on gold’s downside in early April hasn’t materialized, I’ve missed out on stock winners.
  • Woe is me, the fear and pressure, make the right prediction about the future of gold else suffer humiliation and pain.

Write them down and the neurosis becomes both clear and ridiculous. The person who tries to call the detailed price moves in something as fickle as gold is on a fool’s errand. Foolish I may be, especially about the short-term, but the real money is made by getting the big calls right, not the details. Gold’s going higher, name your own price and timescale, be long the sector.



7/5/16

Regulus Resources Raises

More interesting than Centerra and Thompson Creek (two wrongs do not make a right) is this end-day NR, with Regulus Resources (REG.v) set to pull in a touch over CAD$11.5m in gross proceeds (maybe $10.8 net) via this placement at $1.20:

Regulus Resources Inc. ("Regulus" or the "Company") (TSX VENTURE:REG) is pleased to announce that it has entered into an agreement with Haywood Securities Inc. and PI Financial Corp. (together the "Agents") to raise aggregate gross proceeds of up to $10.02 million through the issuance of up to 8,350,000 units of the Company ("Units") at a price of $1.20 per Unit (the "Offering Price") on a commercially reasonable efforts private placement basis (the "Offering"). Each Unit shall consist of one common share and one-half of one transferable common share purchase warrant (each whole common share purchase warrant, a "Warrant"). Each Warrant will entitle the holder to acquire one common share (a "Warrant Share") at a price per Warrant Share of $1.60 for a period of 42 months from the date of issuance. The Company will also grant the Agents an option (the "Agents' Option"), exercisable in whole or in part by giving notice to the Company at any time up to 48 hours prior to the closing date, to sell up to an additional 1,252,500 Units (the "Additional Units") at the Offering Price. Continues here.

That's a nicely timed raising at a non-dilutive price and more than enough cash to keep this company in drilling funds for this year and next. Worth considering today, as we start the third quarter of 2016, that at the start of the second quarter this stock was down at 32c and couldn't catch a bid in a bucket.

Daryl Hodges' marijuana empire

Ladies and gentlemen readership of IKN, welcome to the world headquarters of Daryl Hodges' marijuana empire:


His company is called "Four Twenty Investments" (ha ha....get it? Get it? Such a coded and far out hip cool name) and it's run from his own house. He runs Four Twenty Investment backed by Jim Beatty, a now semi-retired self-styled mover and shaker in the Canadian business world who's been involved with a whole string of failed companies. You know the type. The only other partner in Four Twenty Investments is Shameze Rampertab, who recently joined Zomedica (ZOM.v) as its CFO. ZOM is a suspiciously thinly traded Canadian healthcare stock, losing money and in bad financial shape, which describes itself as "...a veterinary pharmaceutical company targeting health and wellness solutions for companion animals (canine, feline and equine) through a ground-breaking approach that focuses on the unmet needs of clinical veterinarians". Bless 'em. It just so happens that Rampertab was for many years a sell-side health equity research analyst at Jennings, while the disgraced Hodges ran the Toronto shop. Hodges was eventually fired, but not before ruining the brokerage.

Just so you know what Daryl Hodges,  ex-CEO of Jennings and the man who tried to rip off Minera IRL for hundreds of millions of dollars, is doing these days. Keep your hands off the merchandise Daryl, yeah?

My thanks to reader L.

Chart of the day is...

...the gold/silver ratio:


Another win on the "Ten Random Predictions" list for 2016:
2) Silver to rally against gold and the gold/silver ratio will finally break under 70/1. It's been that high since October 2014 but I think it could be better for the poor relation metal in the year ahead. However and the same as last year, I still much prefer gold mining stocks to silver mining stocks as the goldies have much more chance of making real profits.

Notably, my financial calls have been way better than my sporting calls this year.

Whatever happened to Daryl Hodges?

IKN picks up unconfirmed reports that Daryl Hodges, ex-CEO of Jennings and ringleader of last year's attempted asset strip scam at Minera IRL that was eventually repelled by the good guys, has been reduced to the level of marijuana salesperson in Toronto. Can we get any confirmation on this as-yet unconfirmed intel, ladies and gentlemen readers of this humble corner of cyberspace?

Mo' Asanko (from IKN373)

Last week we did Asanko here and we did Asanko here, too. In the weekly on Sunday we got a little more detailed. Here is that Sunday piece:


Asanko Gold (AKG): Its short attack and the company response
On the blog last week we documented the unfolding short attack story around Asanko Gold (AKG), first by offering up the link to the K2 Associates report critical of the company and saying there’s a potential 90% downside on the stock price (21), then by noting that AKG had apparently held a non-public conference call with anal ysts sympathetic to its cause, which is naughty according to the rules (22). I invite you to catch up on the doings and dealings via those two posts, what I want to elaborate on follows on from the AKG conference call.

Well in fact that should be callS, because I’ve now learned that Asanko last week held not one but two private, off-record Conference Calls with analysts and funds that cover or own AKG. And what’s interesting is that IKN has learned that even people who are “pro-Asanko” and were invited to participate came away with the feeling that they hadn’t been told the whole truth. Under the circumstances, that of a private (and probably rule-breaking) CC convened to debunk the shorters and refute arguments, the lack of clarity on certain issues didn’t go down as well as AKG might have wanted. The specifics tend to get down into the nitty-gritty of the K2 Associates arguments against AKG so to get the full picture you’d need to read their hit piece first, but I’m going to take those as read and provide a simple list. According to IKN sources:

  • AKG said that K2 Associates did not include drill data beyond 2010. That’s false, as anyone reading their literature and support documents can easily see.

  • K2 raised issues about the projected strip rates in the Asanko mine plan, which AKG refuted by stating that it’s not true the mine plan final strip ratio is below that of the previous mine owner Resolute’s average. However that comes across as a Straw Man argument because that’s not what K2 claimed in its document. The K2 argument is that in the years to come (up to shell 21, to be exact) the AKG strip ratio looks very low compared to evidence and history. Not the same by any means.

  • AKG claims that K2 is using the average strip ratio of previous owner Resolute as its benchmark, in fact that doesn’t take into account the real key data of marginal strip rate. Again, hints at a Straw Man.

  • AKG was apparently asked by one person on the call whether its reserve estimate includes assumption that the ore zones expand beneath Resolute’s old pit. This is a key point because previous owner Resolute states ore zones were thinning at the end of its tenure and it was one of the main reasons they gave up the concession. According to the source AKG got weaselly on this point, talking about the way their data implies this and that without bringing out solid evidence. Even to the taste of an “AKG Friend”, the company avoided answering this question directly and seeded doubt in their mind.

So four matters which may look like nitpicking, but devils are in the details on these matters and as stated, you would have thought that a private, off-record CC with people sympathetic to your cause would be the place to lay out your argument in a transparent manner. My source came away from the CC that was supposed to bolster the AKG cause with more doubts, rather than less, and this effect may be behind the lack of response from the stock price after the CCs were done. This five day chart of AKG versus the XAU index shows how the stock didn’t get any of the big boost enjoyed by the sector on Thursday and especially Friday (the XAU popped 5% Friday, a big move for the index and the first time it’s been above 100 for a long, long time).

Ultimately this AKG battle will be resolved by hard numbers and the next batch, the 2q16 production results, are going to be an important set to consider. AKG is likely to guide strongly for the quarters to come but the timing of the short report attack, just before quarter’s end, means that the 2q16 numbers are going to be relatively free from bias and should provide strong clues as to who is right and who is wrong. I’m staying neutral on this story though, for one thing we’re in a bull market (Mr. Partridge) and those can cover multitudes of sins. For another, AKG has a distinct data advantage and all the numbers about all its mining all of the time, we on the outside are always reduced to best-guessery and that could mean K2 is plain wrong in its assumptions. We shall see, but the AKG 2q16 production report will be one pored over closely by the mining world, K2 has seen to that and AKG didn’t do itself any favours by leaving gaps in its responses and doubts in the minds of sympathizers during those grey-areas private ConfCalls last week.



7/4/16

How IKN affects lives

A deep bow to longtime reader Joe, who saw this in Toronto today and sent in his photo (to be clear, he's not the owner)




Errr...probably, right?

Posting will be light...

...on this blog, IKN, during the daylight hours of today Monday. For secret reasons.

7/3/16

The IKN Weekly, out now




IKN373 has just been sent to subscribers. Long one, plenty of stuff in it and to top it off, a new stock reco. Mostly written while enjoying the music of JS Bach. Happy daze.

Minera IRL news: In Ollachea tonight...

...Minera IRL's Diego Benavides is welcomed with open arms by locals as the company makes good on its previous commitment to supply a scoop digger to the community (to be used for road works improvements).


This was just one of the initiatives blocked by the Team Hodges scumbags last year as they tried to strip the company of its assets. Thankfully the company stood up to the bullies and is now getting back on track.

Iceland's football fans salute their team today

No matter who lifts the cup next weekend IKN gives you the hands-down winners of Euro16:



The Iceland team and their amazing fans. Deepest respect.

The "Resource Curse" does not exist

Or so says this new paper on the subject called “The resource curse mirage: The blessing of resources and curse of empire?” and published by Ricardo Restrepo Echavarría, Carlos Vazquez and Karen Garzón Sherdekan. They go about de-bunking the idea that a country endowed with natural resource wealth is condemned to negative net effects on its economy (which is quite a hot topic for debate in economics' circles, I'll have you know).

You can click here to get your copy and to whet your appetite, here's the abstract of the paper:
Auty (1993) and Sachs and Warner (1997) reignited the line of argument of the resource curse: the idea that natural resource wealth has negative net effects on the development of nations. However, the result has been found to be highly dependent on the types of variables used to represent natural resource wealth (Brunnschweiler, 2007) and similar questions can raised about variables used to represent being “cursed”. In this paper we pursue the hunt for better variables by looking at the relationship between average income from natural resources per person and a wide array of key development indicators: Adjusted National Net Income, GDP per capita, an aggregate of services and industrialized goods, inequality measured by the Gini index, Poverty, the Human Development Index, the Prosperity Index, the Social Progress Index and the Fragile State Index. We do this on a global scale between 1970 and 2010. On the contrary, we find that natural resource wealth is positively linked to development. We suggest, alternatively, that much of the actual cases where abundant natural resources hurt nations have been cases of common theft by tyrants, often backed by imperial powers.

Read the whole paper here.