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2/3/18

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

...in reverse order:

Third Place: "Bluestone Resources (BSR.v): Do not feed the animals (from IKN454)". The longer notes tend to be popular, as do the Weekly excerpts.

Second Place: "Chinese gold mining companies' never-ending search for unprotected, unlubricated anal intercourse". On occasion, my inner clickbait headline whore cannot be resisted. As I answered a reporter pal, when you have no editor you get to publish the header that sub-eds can only dream about.
 
First Place: "Why own Dalradian (DNA.to)? Easy!". If I do this blogging thing for a hundred years I'll never understand why some posts get popular and others don't.

Randall Margraves, who tried to attack Larry Nassar yesterday

For the record, I would too. But I'd also time my run better and got at least a single punch in. Maybe fake a few steps to either side, get to the front edge of the table before the frontal move, the sheriff wouldn't have had that extra half second. A few weeks in a jail? Good value deal.

2/2/18

Most hilarious trade of the week award goes to...

...the complete dumbasses who bought the Quarterbrain/Rule line and decided that Pretium (PVG) was a buy after the drop of the week before, first thing Monday morning:



For example, the dumbass CEO.ca gumflapper Alan Barry Laboucan, who's been calling PVG cheap all week. He did the same with Rubicon yaknowz, at least this time there are less blithering idiots taking him at his word over there.

So, PVG down 14% this week and 40% over the last two. But of course, feel confident longs...trust the management at their word.

UPDATE: And it just so happens that Angry Geologist has updated on Pretium today, too. Go here, check it out.

The Friday OT: Nils Frahm; All Melody/#2

Extraordinary, amazing, heavenly, deity-sent music. All I've listened to this week is his new album and BT, I have nothing else in my brain and I don't mind admitting it. That guy you saw walking round town with earplugs in and a gaping smile on his face? Yup, that was me.



I will evangelize Nils Frahm until you too hit that button and improve your life, it's for your own good. Youtube here.

A Flash update...

...has just been sent to subscribers, Friday morning an hour or so after the opening bell. A trade.

I've been asked for a word on Bitcoin...

...by several people over the last 24 hours, what with its nasty dive and the ensuing blood in the crypto streets. Misery loves company? That IKN pillock loves talking about crappy things that fail? Shadenwhatnot? Therefore, three things:

1) First up never mind Bitcoin, if your idea of sound advice on anything is from a pissant blogger and this humble corner of cyberspace, then take a good, hard look in the mirror. Are you really that short of ideas to come here for solid financial guidance? My stars...

2) Anyway, apart from the one substantive post on the subject that merely pointed out that Bitcoin was not an asset class (and anyone telling you otherwise is a fool), it's not been a subject of much interest round here. I did write an intro op-ed in one of the weeklies that crunched some numbers to show that (despite the hues and cries from other corners) it was pretty obvious that the Bitcoin surge wasn't eating the gold or mining sector lunch, but that's about it. At IKN we do mining (as in real mining, not bleep bleep strings of numbers mining), we do LatAm, we occasionally do music and footy too. That's your lot.

3) That said, I did watch with mild curiosity as Bitcoin went up, the same mild curiosity as it falls back down now. However, I do the same with high-flying biotech stocks, or iron ore, or oil so I don't see why Bitcoin and the other cryptos should be of great interest just because of the latest price cave-in. I didn't care much in the mania phase and Bitcoin/crypto didn't affect my life on investments back then. Also true now, so if you want a word on Bitcoin from me, how about "lobster"?

2/1/18

IKN Recommends: Oreninc

Oreninc is a website that's been around for a while and I've used it from time to time for specific information, but now that it's been through a refurbishment and has a new look with stronger content it's looking much better and worthy of a reco as a fine place for good source material. Pros and cons:

Cons: 
  • Weird name that I don't like and never will
  • Some of the website sponsor companies are sketchy at best (but hey, business is business)
  • The main man at Oreninc, Kai Hoffman, now has a full beard and is way uglier than in his profile photo.

Pros:
  • A stack of free content for all levels of sector expertise. It used to be good, it's now much better
  • An extremely useful (and I'm not overstating that) junior mining financings and placements tracking service, which shows what companies are offering what deals (as well as recently closed placements)
  • Good videos, interviews with leading sector figures, etc
  • A free subscription service that I like a lot, sending me things directly into my mailbox (and very little in the way of marketing stuff for their paid services. Just stick in your mail address, job done).

The Oreninc website is a shop window for their paid subs services, which include preferred access to placements for group members, placement vetting services and other stuff that I personally don't care about because 1) I'm cheap and 2) I don't do PPs. That's fair enough and if their other branches interest you then go ahead, but what the new Oreninc page offers is still excellent for the freebies (and I do reco that free mailer they offer, to underscore the point). So go over and check it out yourself, right here. And forgive the weird name (I've tried, it's never grown on me).

How to make six million dollars in two days in the juniors market

First, buy a big lump of stock in a fundamentally sound but undervalued, thinly traded, out of fashion junior:


Then run the price up by snapping at the asks. It's magic!

Chinese gold mining companies' never-ending search for unprotected, unlubricated anal intercourse

Follow the bouncing ball:
First we had Zijin buying into Pretium (PVG) in 2014 (after a long DD period too), the Chinese choosing PVG as their preferred way into the big N.Am gold sector. Three years later they sell out, writing on the wall*, mine plan up the spout and a DFS that needed far more input from Strathcona, far less from Snowden.

Next it's 2016 when Shandong buys into Barrick's (ABX) Argentina/Chile ops, paying half a billion for 50% of Veladero plus rights to JV in Pascua Lama (and other early stage high Andean projects). The ink was hardly dry on the deal before Argentina suspended Veladero's permits and the Chinese had to stump up half of the near half billion needed to re-tool the mine and get it open again. Cut to a couple of weeks ago, Chile passes a definitive closure order on its side of Pascua Lama (about 2/3rds of the whole caboodle). Welcome to South America, gents.

And now it's Zijin's turn again as it files its new, 8% position in Asanko, a company that's been BSsing the market for the short years of its existence and is now and coughing up blood so badly the head office has ambulance services on speed dial (don't believe me? Just wait for the Q1 car crash, skip the news release, go straight to the balance sheet).
What is it with these Chinese dudes? Seriously, I think the world is being sold a pup about the collective ancient culture wisdom and sagacity because the way they wade in and buy any old crap at any old price makes them look like a bunch of dumbass pikers to me, getting ripped to shreds by Canadian sharks with nice smiles and deep expense accounts.

*Though to their credit they sold at least half at a profit before the rest of us knew how bad things were at Brucejack. They may not be able to pick an investment, but at least they can trade).

Charts of the day are...

..the US Dollar index (USD) once again (daily and monthly), because...



...if you're not watching that 88 line like a hawk too, you have better things to do with your life than waste it on capital markets.

And quite right, too.

1/31/18

Nice view...

...from a drill pad. There are worse places to work a rig.


From your humble scribe's camera lens, yesterday afternoon, during a most interesting site visit.

Chakana Copper (PERU.v) is having a good first day

The new IPO Chakana (PERU.v), reversed into Remo (ex-RER) and open for business today, has done brisk business at the opening bell, with about 800k shares traded and an 84c market price. That compares to the 50c qualifying placement price, so the market obviously likes what it's seeing. 

FWIW your humble scribe sits down with the CEO tomorrow (fresh off the project) to talk copper, breccia pipes, drill programs and all sorts to find out what's what. IKN455 for the details on that, this weekend.

1/30/18

There will be no posts on this blog today

For secret reasons.

1/29/18

Angry Geologist does Garibaldi (GGI.v)

Stick a fork in this one, done to a turn. TAG does the cooking here.

Bluestone Resources (BSR.v): Do not feed the animals (from IKN454)

This is the short article on Bluestone Resources (BSR.v) that first appeared in The IKN Weekly issue 454, out yesterday Sunday. A request from a pal is why it's now on the open blog.

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Bluestone Resources (BSR.v): Do not feed the animals

Via mailbag from more than one person, it has come to my attention that Bluestone Resources (BSR.v) is currently being pumped by at least two widely distributed mining newsletters, with one of them issuing the reco in the last couple of days. Without naming the publication and without going into too many details on what they say, I’m going to repeat the title blurb of the piece here because the exact wording is worth close examination:



“Bluestone Resources (TSXV: BSR) is a low risk mine development story. It has very strong management, an incredible roster of shareholders, a tight share structure for its stage, $38 million in the bank, and a project that is fully permitted and partly built.”



Aside from the over-use of breathless adjectives, there are substantive issues in those three lines that I cannot overlook. For the rose-tinted version, please subscribe to other publications or at least check out the latest company corporate presentation (23) but for the rest of us, if this is a “low risk” development story, I’m Chinese*. To expand on that, let’s take the above statement above piece by piece, starting with the only one with which I can agree:



  • Good shareholders: Presumably we’re talking about the Lundin Group, which bought in to the tune of $30m in the original placement. Note they didn’t buy the company, just 36% or so of a junior (correction), so Lukas et al must like the risk/reward on this enough to stake a small slice of the family fortune on it. Fair enough, we know the Lundins like going where others fear to tread and turnaround stories are their speciality, though they know better than anyone that the entry is a high risk one. By the way I only agree with “good” for the backers. “incredible” isn’t my idea of an epithet for anybody outside the range of Martin Luther King, Nelson Mandela or Albert Einstein.



  • Strong management: Presumably referring to Darren Klinck, one of the people who got OceanaGold to buy Pacific Rim while he was there. Remember how badly that turned out for OGC? I do and it tells me a lot about the presumptuousness of this company.



  • Tight structure: Yeah, so what? The key here is “for its stage, because BSR is a very recent listing and will be able to run off its reported current $38m treasury for quite a while, but if it ever gets a build decision Cerro Blanco will cost hundreds of millions to put into production, the few Kms of tunnels already in are a drop in the bucket.



  • Low risk: My stars, where do we start? Why not at the very beginning of BSR, because Goldcorp walked away and sold this project to Bluestone (accepting U$18m cash and 9.9% of shares in BSR for a project where it spent over U$230m) exactly and precisely because it was not low risk! To suggest otherwise is naïve at best, total BS more like.



  • Next there’s permitting risk. BSR correctly states that it is “fully permitted” because Cerro Blanco does indeed have its permits from the government of Guatemala. They were awarded to Goldcorp in 2007 in fact, which immediately begs the question as to why GG didn’t act upon those permits. The answer is simple; Guatemala is an extremely corrupt country, you can get any piece of paper you want at the right price and in this case, as GG found out to its cost those permits aren’t worth the paper they’re printed upon without the support of the local community. Cerro Blanco isn’t just un-loved by locals, it’s actively hated and the campaign against its development stopped the project dead in its tracks. Not only that, but the anti-mine protest here is international as El Salvador hates it too. That country has a nearby border to the mine, is on its run-off and at the height of the last move to get it moving almost caused an international incident with Guatemala due to its opposition. The anti-mine movement hasn’t gone away, anyone thinking otherwise needs to learn Spanish and get reading.



  • If that weren’t enough for you, Cerro Blanco itself is a technically challenging deposit. It’s in a volcanic thermal zone which makes the underground areas literally hot, there’s a lot of water to contend with (and I just used “a lot of” in order to avoid the hyperbolic adjectives used by the newsletter pumper above, it really is an understatement) and the mineralization itself is thin veined with multiple orientations, which makes both mine planning and eventual operations tricky and expensive.



With 63.82m shares out and this weekend’s price of C$1.45 showing on my screen, BSR.v has a current market cap of around C$92.5m. Subtract the reported C$38m in cash it has at the moment and we’re left with C$54.5m in asset value, for a project that GG ran away from for U$18m in cash. It’s magic!



To wrap up, I want to be as clear as possible on this: I am not saying the BSR share price cannot go higher on a classic Canadian promo pump from newsletters, sellsiders and who have you. What I am saying is that risk on this project isn’t low, in fact it’s quite the opposite at off-scale high and anyone who tells you otherwise is either naïve enough to buy into the company spiel or corrupt enough to ignore the mountain of glaring evidence to the contrary in order to push a nefarious agenda. Either way, not a person I’d want advice from on juniors in LatAm. That’s not me doing some type of catty patch protection either, I welcome strong analysis from other sector pros on regional plays and will often learn from their insights. But this is just bullshit and needs to be called out loudly. You telling me that BSR is low risk is like me telling you that Donald Trump is a meek, humble, self-effacing wallflower. Rant over.


*I’m not Chinese


Why own Dalradian (DNA.to)? Easy!

The best possible company to own is one that is in desperate need of local community on its side for its permits and goes about winning that approval by...



...pissing them off left right and centre. Photos from this Facebook page and the comments are enlightening, too (you get to read some of the swear words preferred in that corner of the Emerald Isle). In the words of the person who sent me this, "I wouldn't trust DNA to run a bath".

Chart of the day is...

...gold, weeklies:




Gold has failed at 1360 again.

1/28/18

The IKN Weekly, out now


TY RB


IKN454 has just been sent to subscribers. At 14,709 words on 30 pages it's average sized this time. A bit rantier than normal too, I normally leave the gumflap stuff for the blog. Anyway, it's out there now.

Brent Cook on Garibaldi (GGI.v): "As close to a scam as I've seen in my sector"

As captured here on the 'Penny Mining Stocks' blog.

Graham Farquharson on Pretium (PVG) and Brucejack, November 2013

Here's what he said to Northern Miner on the subject:
"We’re not saying there's no gold there – this is not Bre-X or anything like that. There is gold there but the project needs a much different geological model now, based on the work that's been done and the bulk sample program being different than what they anticipated before they went underground.
 
And they've been very slow to accept that, because it does make a big change from what they've been telling the markets. But we're absolutely convinced that if this is what the results indicate, then you should tell the world."

Farquharson told some plain truths about VOK, ones that didn't fit with the grand plans of Pretium (PVG). As a result, he was fired and "The Snowden Model" adopted which...brought us to the snafu of last week. It's about time you mainstream media people and you sell side anal yst people found GF on your Rolodex and gave him a few minutes of redemption time.

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

...in reverse order:

Third Place: "IKN admires Torex Gold's (TXG) Fred Stanford for his well-developed sense of humour". We note the mine has this weekend been taken over by hoardes of police and military, too. Torex teaching us about CSR is like Pol Pot leading a course on population control.

Second Place: "Garibaldi (GGI.v) finally releases the missing holes". I have to admit, there's something I admire about the well conceived and planned Canadian scam. The crass and obvious ones just make me howl (often mirth, sometimes in disgust, the occasional glee) and are easily thrown aside, but the ones run by people who have worked out a playbook and have several chapters of story ready, all in order to keep the story running as long as possible and fleece the gullible, well they're certainly something to behold and often involve more brainwork than the decent people in the business doing upstanding and honest work. I'm now pretty sure GGI has enough to keep its dance going for at least 2018, a fine effort guys.
 
First Place: "Pretium (PVG) 4q17: Hello Strathcona". It was a closely run race this week, but PVG just beat out the GGI post. I've seen the PVG news dismissed as "just a miss" in some quarters, the type of commentator who knows enough to be dangerous. Zijin bailed for a very good reason and it's long past time that the media returned to the subject of Graham Farquharson and ask him more about the recent developments at VOK. He was pilloried due to his correct interpretation of the deposit and deserves apologies from several people, starting with Quarterbrain.