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4/22/17

The 2017 Colombia Gold Symposium is taking shape

Over at his blog, Paul Harris of The Colombia Gold Letter and organizer of the Colombia Gold Symposium updates us today on how this year's event, scheduled for November, is shaping up. We already know that Rick Rule is keynote speaker at the event (a decent catch) and now we have news that Atico Mining (ATY.v) and Red Eagle Mining (R.to) are sponsors and will offer site visits to participants this year.

If you're interested in attending, you can find out everything you need to know on those links. And as IKN is also a sponsor of this year's event, your humble scribe is bound to be there for the week as well (though that may well put you off the idea).

4/21/17

Angry Geologist does Arizona Mining (AZ.to)

And does it well. Go here.

The Friday OT: Prince at the 2004 Rock and Roll Hall of Fame

This brought a lump to my throat, it's one year ago that the world saw the headline "Prince dead" and the measure of his greatness is that nobody asked "who?" or "which Prince?", the one word was enough for global mourning to set in.

However we must celebrate his talent. He was a peerless live act and went way too soon but here's a reminder of how good he was on stage, the full ten minute opening act from the awards ceremony which includes a top Kiss and the best and I mean the very damned best version of Let's Go Crazy ever.



And once again, marvel at his world class guitar work, he was up there with any of them just on that instrument. Youtube here.

Mongolian Airlines, the exciting way to fly

From a pal, who sent this picture over with the note, "From the Mongolian Airlines website translated by Google":



Bless them forever. In the mood for an exciting flight?

Crapstone Mining's (CS.to) debt: Parsing The Pylot

Here are the comments of CEO Darren "Drop The" Pylot in today's NR just out that announces amendments to its credit facility. IKN explains what he's saying in the blue type.

"This extension of our current low-cost, flexible credit facility, gives Capstone significant financial flexibility (we were in the shit) and right sizes the facility to meet our current and anticipated operating requirements," said Darren Pylot, President and CEO of Capstone. "Our current drawn debt of approximately $300 million is comfortably within this amended availability (uncomfortably high) and we have a cash balance of over $100 million (which should frighten the crap out of you, because it was over $130m at the end of 2016)."
"We plan to apply free cash from operations to reduce debt to a sustainable level (our debt is currently unsustainable) at commodity prices that reflect bottom of the cycle prices (if today's price are at the bottom why did we hedge our production?), which will provide an additional cushion of undrawn credit," continued Mr. Pylot. "This effectively addresses financing risk over the term of the facility (we are financially risky), which we believe will correspond to a stabilization and gradual improvement in copper prices."

Further questions?

Asanko Gold (AKG) is now hiding data

If you remember back to April 13th, this humble corner of cyberspace noted the rumour about an upcoming faked geotechnical safety issue at Asanko (AKG) and its Nkran mine, something the company was planning to use in order to hide the fact that it was running out of mineral ore way before they'd previously promised (but on track with the K2 short thesis, strangely enough). We ended that post with these words:
"For an early signal that this is the plan, watch the Q1 and Q2 strip rates as well as any minority use of the stockpile."
Cut to April 18th and the AKG 1q17 production report (out while your humble scribe was on the road and visiting a different company's project) which you can find here. In it we see that yes indeed, the headline strip rate moved up sharply, from 4.6X to 5.5X. But Wait! There's More! Because their overall grade dropped as well (ugh) so if you adjust for that, their apples-to-apples strip rate was more like 6.25X in Q1, bigtime higher.

However the really funny thing in the 1q17 NR was that they didn't include any stockpile commentary or the stockpile data table. Yes AKG, of course it's mere coincidence that just days after the IKN post you decided that stockpile information was no longer worthy of market scrutiny and so you left it out for the first time ever in all your production NRs ever since declaring commercial production. Got something to hide, guys?

PS: AKG is down 10.1% since April 13th. Just sayin'.

4/20/17

Shrek Mining (TREK.v): Looking ugly there, Marin

Looks like a stillborn.


If you knew what I knew about Red Eagle Mining (R.to)...

...you'd be buying the stock today, too.

PS: To answer a couple of mails and add to the cryptic feel, it's something good that's going to happen at the mine next week.

How to add breadth to the GDXJ: A proposal

Your humble scribe has been spending the morning catching up with market things after a couple of days on the road and reading up on the whole GDXJ snafu. The basic problem is that the ETF is getting to the stage where it threatens to collapse in on itself due to its own excess gravity, black hole style. When money flows into the ETF, is has to distribute that around its component part shareholdings and as a lot of these juniors don't have much market cap heft compared to the massive ETF NAV, we're now at the stage where GDXJ holds more than 10% of stock in many of its components and gets close to the all-important 20% in some of them.

So trouble's been brewing for a while and the VanEck solution, just announced, is to widen the number of companies included in the GDXJ universe. It's the obvious move but due to the fact that the big player needs liquidity in holdings as well as size, we're now into the weird-assed situation in which companies like Kinross, Pan American, Gold Fields, Buenaventura and a whole lot more like them are being added to the "juniors" precious metals ETF. Now you can call those companies a lot of names (and I often do), but "juniors" they are not.

Real juniors, ones outside the GDXJ universe, find themselves excluded due to size, float, price, market cap restrictions. That's something I also understand, you can't have GDXJ piling into a stock that trades 50k avg per day as its metrics will immediately go wappy. So here's a potential solution for some or other intrepid brokerage or insto (and I'd wager it would be extremely profitable for the first footer too). The framework can be summed up in three simple stages:

1) Create a whole bunch of "mini junior ETF" vehicles. You could do it by geography, e.g.:
  • Canadian exploreco ETF
  • Canadian junior producer ETF
  • Asia exploreco ETF
  • Asia junior producer ETF
  • Latin America exploreco ETF
  • etc
Or you could do it by metal:
  • Copper exploreco ETF
  • Copper smallcap producer ETF
  • Uranium exploreco ETF
  • etc
2) Then choose a bunch of smallcaps from each junior sub-sector and weight your ETF. These in effect become bundles of stocks that together, under a larger (but still small) ETF umbrella get the necessary size to become attractive to GDXJ as a part of its holdings.  

3) The result is that after time GDXJ gets to broaden its share base and the money filters down into the junior section, instead of money theoretically destined for the junior mining world filtering up into midcaps. The type of cash flow that would benefit the mining industry at a grassroots level.

FWIW, I could see Sprott doing this.

In Vancouver, style beats substance every time

I am so impressed with the way that Arizona Mining (AZ.to) is trading today that this isn't really about AZ.to any longer, it's about the way in which the Vancouver industry goes about its business. We saw the substantive reaction to the PEA put from the company in the first two weeks of April, when first the NR on its contents failed to lift the stock then the filing of the full 43-101 PEA document to SEDAR caused serious people who read the real documents to turn their backs wholesale on this over-bloated and obviously flawed story, because even the Everything Is Awesome scoping study stage report couldn't hide the nasty facts that undermine the (ironically named) Hermosa zinc/lead/zsilver project*. And there are several.


But that doesn't mean a thing, because in the wonderful world of make-believe where junior mining resides, all you need is that powerful combo of 1) re-hashed news 2) breathless prose 3) sellside brokerages with sycophantic anal ysts and a whole row of people unafraid to make a lot of telephone calls and retail (the crop that never fails) will get led by the nose of "thought leaders", quickly come to your rescue and save your stock from moving further towards its true dollar value.

IKN salutes you, Vancouver financial professionals. Your mothers must be proud of you. 

*Sorry to confuse your pathetically small brains, Warke fanboys and IKN haters, but all three metals must be named as zinc provides less than half of potential revenues.

4/18/17

Posting will be light on this blog for a couple of days

For secret reasons.

UK snap election

Political and personal preferences aside, that was one smart move by Theresa May.

4/17/17

Arizona Mining (AZ.to): How's the conference call going, guys?

That well?



I wonder who they're going to blame? Who are they going to spy on because their stock price is going down this time?

4/16/17

The IKN Weekly, out now




IKN413 has just been sent to subscribers. Mainly numbers and words.