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2/17/18

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

...in reverse order:

Third Place: "Presumably Tahoe Resources (TAHO) (THO.to) will now drop its appeal against the licence denial at Escobal". How a company with assets this good can screw its own roost the way it has is testament indeed to the worst management team in mining.

Second Place: "Time to be a goldbug (from IKN456)". The longer op-eds (from the Weekly) tend to be popular-
 
First Place: "Spotted in Peru". Yeah, it made me laugh, too. And it's good to see the blog being taken in its true spirit, a throwaway stupid post of sheer frippery being the most popular of the week.

2/16/18

Angry Geologist does GT Gold (GTT.v)

Saddle up, pardners. Right here.

The Friday OT: BT and Jes; The light in things

A track that should come with a warning: "Under no circumstances listen to this song on headphones while riding a motorbike". Great for the gym, though.



Stupendous BT tracks are common, but this one comes with a true quality voice to match the beats and the result is a total trip. And nobody does a break like BT, a different class. And we get two in this one. Youtube here.

The current US Dollar / US broad market correlation

Gary Tanashian makes the point succinctly and perfectly in this post, right here. Just eleven words and two visuals, that's my kind of analysis.

Tahoe Resources (TAHO) (THO.to): Another example of the wonderful community relations atmosphere in Guatemala

Yesterday Thursday morning, the VP Ops at Escobal, David Howe, and the community relations chief at the mine, Camila Medina, went on a visit to local coffee farmers as part of the company's community outreach program. On the way back from the coffee growers at around 3pm their convoy was blocked by locals, who then punctured the tires of the car in which they were travelling. Now stuck and surrounded by an angry mob, the mob then told them they would set fire to the car if they didn't promise to close down the mine permanently and leave the area for good.

Luckily, after a couple of emergency calls and three hours, local authorities intervened, calming the crowd who then dispersed and there were no injuries reported. Spanish language report on the incident here.


Lithium X (LIX.v) insider sales

Strange to see company insiders exercising options and selling them straight into the market at $2.42 and $2.48 when in just a few days' time a group of very trustworthy Chinese businessmen have promised to pay more than that.


Why, it's almost as if.....nah, surely not!

IKN thanks reader "E" for the heads up.

2/15/18

Yamana Gold's (AUY) (YRI.to) successful year

In 2017, Yamana Gold (YRI.to) (AUY) lost $204.1m in operations, its assets dropped by $38.4m and liabilities rose by $94.3m.


Your quiz question for today is: Form a complete sentence which uses the words "Brewery", "Organize" "Couldn't" and "Piss-up" (feel free to add prepositions, pronouns and indefinite articles to taste).

I'm really looking forward to finding out how much Marrone paid himself in performance bonuses for this "success". Heaven help this company if it ever has a bad year.

Sandstorm files its 2017 year end financials

And here's one of the charts derived:


Working cap jumps U$12.8m in Q4. This is now a cash cow.

It's now official: Allan Barry Laboucan is a fucking moron

Either that or he's been overdoing it on the lunchtime margaritas again. No wait, those aren't mutually exclusive, a fucking moron can be drunk or sober and it doesn't change the underlying state of moronity. Anyway I digress, here's the latest from the blowhard gumflapper:


I don't know which is more moronic in fact; That he thinks I own shares in his scam stock Alset (ION.v) or he thinks I have friends. Either way, you have to wonder just why a board of directors would be happy to have a moron as CEO.

News on the Rye Patch Gold (RPM.v) "strategic review" featuring an old LatAm joke

Three separate sources now tell this desk that Rye Patch Gold (RPM.v) is trying to sell its Florida Canyon mine and its current strategic review is given the order to shop the asset (term used loosely) around. For what it's worth, this humble corner of cyberspace doubts there will be a sale, the reason being the same as the basis for this classic South American joke*:

Q: What's the best business deal in South America?
A: Buy an Argentine for what he's worth, then sell him for what he thinks he's worth.

In a nutshell, RPM's issue. They think Florida Canyon is worth decent money.


*Normally told by Argentines, before you get all politically correct on me. Also true for Chileans, but they don't have a sense of humour.

Lithium X (LIX.v): The cheque's in the post

Hey, what could possibly go wrong? We all know that Chinese businesspeople are totally trustworthy, never mess others around, never try to squirm out of deals or get discounts at the last minute, right? This from LIX today:

"...NextView has advised the Company that it is seeking alternative funding from a commercial lender in order to obtain the required funds on the most competitive terms available and that the proposed facility with the commercial lender is currently anticipated to be established and funded shortly but has been delayed by, and until after, the Chinese New Year holiday."

It's totally understandable. After all, nobody in China knew there was a New Year's holiday coming up.

Gold Resource Corp (GORO) on its U$0.5m fine

I love this, a mail sent by Greg Patterson of Gold Resource Corp (GORO) to a shareholder of the company (who will remain nameless, as will the go-between who forwarded the mail) asking for an opinion on the IKN post of a couple of days ago that pointed out GORO has been fined half a million dollars by the government of Mexico for operating without licences.

The argument of GORO seems to be:
  • IKN is an anonymous blogger, therefore we can ignore any proven fact that is stated against the company. Because.... internet!
  • IKN mixes fact and fiction, without of course mentioning any of the imaginary fictions (hint: there are none)
  • GORO prefers to ignore the legally required permitting requirements of any mining company but "voluntarily pursue" other programs at its ops, which doesn't just make it good, but actually better than any company that's operating legally.
  • GORO is a good corporate citizen which refuses to pay its fines.
  • Oh, IKN is written anonymously and mixes fact and fiction...did we mention that before?

Sadly, the facts are 100% different to the BS GORO is trying to foist on the unwary. This is a company IKN called out for years for being extremely overvalued (as it dropped from over U$20/share to its current $4 and $5 range), for over-promising on production and expansion and never fulfilling its promises (e.g. in early 2012 it was still promising 200k+ oz AuEq production...all quietly dropped), for maintaining a crazy and unsustainable dividend policy (which eventually cracked and disappeared), the large scale insider selling as GORO shares dropped that wasn't disclosed until much later, plus of course the deaths at the mine that happened while the company had no operating or enviro permit. No fiction in that list, you two-facedpieces of corporate crud, all those are facts.

Anyway, read Greg Patterson's reply to the IKN post.

From: Greg Patterson
Sent: Tuesday, February 13, 2018, 10:37:43 AM PST
Subject: RE: Arista Fine

XXXX,

IKN (he does not write under his real name) has been a critic of the Company for years.  We believe his statements mix fact and fiction for a salacious story.

What I can tell you is the Company continues to voluntarily pursue the Mexico Clean Industry Program at its operations, and therefore puts itself under additional environmental scrutiny in that regard.  The Company has in its possession the LAU permit.  The Company disagrees with the fine (and is being advised by counsel to fight it).  Regardless, we will still be working towards our Clean Industry Program status, again on a voluntary and very transparent basis with the authorities.

The unfortunate fatalities and this fine have nothing to do with each other.

IKN is known for producing salacious stories that twist facts with fiction.  Perhaps that is why he chooses to write under an anonymous blog?  As I mentioned he has criticized the Company for years and we continually prove him false as we reached production, have had 6 consecutive years of profitability and organic growth, have returned $110M in shareholder dividends and have been awarded Mexico’s ESR seal for three consecutive years which demonstrates the Company is a socially, cultural, environmental and economic positive impact company.  None of these things will ever make it into an IKN criticism.

2/14/18

Time to be a goldbug (from IKN456)

This was the intro op-ed from IKN456, last Sunday evening. It took two days for gold to move up over 5% and to be even more annoying, it's for the reasons laid out below. 




Time to be a goldbug
All our times have come
Here but now they're gone
Seasons don't fear the reaper
Nor do the wind, the sun or the rain
(Don't Fear) The Reaper, 1976, Blue Öyster Cult

Because the world needs more op-eds that quote 1970’s prog rock lyrics.

This is a weird old sector of the market, because at the very centre of the whole mining industry (base and precious) is gold, a metal that’s not just worth money when collected into lumps but also elicits strong emotions from both opponents and proponents on social, political, macroeconomic and even cultural levels. Beauty will always be in the eye of the beholder and others can look upon my own market and financial position and sneer (if they so choose), but I have always considered myself to be a long-term bull on the price of gold without being anyone’s idea of a hardcore goldbug. I can point to several examples of that mindset, but perhaps the most obvious is the way in which I’ve rattled on about the gold/TIPS ratio for the last 12 months (which worked to an extremely tight correlation until just a few weeks ago and is still out there on the longer-term chart, but not going to force-feed you with that one every weekend). No goldbug would care about the real economy and the way in which the US Dollar affects gold…it’s gold that affects the dollar, right?!?

Therefore I’m not a goldbug, but before this goes any further please do not take me the wrong way and think that I’m disparaging them either. I’m not against those ladies and gentlemen who are goldbugs, because even if we focus in on so-called “hardcore goldbugs” there are still a wide range of lifestyles and philosophies that go under that heading. I’ve met many such people who will then go on to make well thought-out, cogent, intellectually sound integral arguments as to why they are hardcore. And that’s fine, but it has to be stated that they aren’t the only ones. It isn’t just a bunch of intelligent, out-performing high IQ people in the room when hardcore goldbugs get together because for every presentable one there’s a complete fruitloop waiting to tell you about his (rarely her) collection of coins that are next to the gas masks and the shelves of dried tofu in the home-made nuclear bunker dug at the bottom of the garden. The cogent bugs out there suffer (normally in silence) as the mainstream financial community riffs on the stereotype and a bad name in the wider financial community. But hey, I’m a mouthy blogger with his own issues, we all have our cross to bear.

But like that old saw about stopped clocks, even goldbugs get the market right on occasion. It doesn’t happen often because normally goldbugs are right about gold’s move (up) for the wrong reasons (anything but currency debasement/moneyprint/world conspiracy theory/etc) but gold becomes truly face-rip bullish when the driver is its Fear Trade capacity. As noted on the blog last week, I’m in strong agreement with that guy Will Rhind (1) who, before going on to pitch his PGM ETF to the world, nailed the current market scene succinctly by stating that it’s similar to that we saw around the market crash of 2008/9. Perhaps not in severity (in fact certainly not) but the way in which the normal release devices have operated, first the bond weakness, then the dollar weakness, the knock-on to broad market equities and then the wholesale flight to quality (stage 1) is a near-carbon copy. We live in a financial world that has become addicted, junkie-like, to the heroin of cheap money. The Fed has been trying to wean us off with the methadone of carefully jawboned and flagged rate hikes but when the crunch came, it was telling that the correction was set off by 1) The Munchkin stating* he didn’t care about the price of the US Dollar and 2) The Fed reacting to the first bearish wave by doing its classic least-worst move of flagging an acceleration of rate hikes (anyone else remember the late spring 2008 Paulson/Rubin show before the hammer came down on Lehman’s? I do). Monday came and it was déjà vu all over again, just that it all happened under the control of algos and machines…so a bit quicker and more surgical in nature.

We saw the flight to quality and that, ladies and gentlemen, is not to gold. Not yet anyway, au contraire at the early stage of the fear trade the move is always the same, liquidate to USD. That forces the price of gold lower in these first stages, not helped of course by the trade desks that suddenly find themselves with the need to sell all sorts of vehicles for cash because they were asses-out-the-Ferrari-window on margin and are covering at any cost. If it were a normal negative day at the office that’d be more than enough, the checks and balances calm thing and we’re back to laying big bets he next day. But last week? No folks, that was very different. Not only did we witness the two biggest Dow point drops ever, but they only became those in the last hour of the nasty days. Throw in a rebound day in between that was feted as “We Fight Back” and lasted precisely 24 hours and we have a situation where fear is the only thing.

Which means stage two of the Fear Trade kicks in, the one where gold benefits because the “normal” flight to quality of the US Dollar goes out of favour. It’s worth remembering that in the height of the 2008 financial crisis, when IndyMac first went down and started the final domino effect that saw Lehman go under and the near-collapse of the whole caboodle, gold dropped by 27% between July 2008 and late October. You could have bought an ounce for U$712 and just two years later you were paying double that. I’m not saying this is as serious as 2008, I am saying that the move into the dollar won’t be the last one because suddenly (and for the first time since) the fear doesn’t stop just by hiding inside USDs, the fear IS the USD.

And the goldbugs will be proven right. Money that’s now hiding out in dollars will want another place to hide and gold is one of the quickest and most secure options and though small compared to the amount of fearful cash out there now, it can mop up quite a bit of liquidity without getting badly bent out of shape, based on previous “stage two fear” moments I estimate that a large scale influx of frightened dollars into the bullion market can be handled with something like a 10% gold price rise in USD terms. That would be a fair deal for the big money, preserving capital and holding tangible , fungible assets at a reasonable premium (and there’s always a chance to sell to the greater fool later), not bad at all for the big money. However, 1,300 x 1.1 = a U$1,430/oz gold price and I’m sure there’s not a single one of you in this audience today who doesn’t understand what that kind of spot price would do for a portfolio laden with junior mining stocks.

I’m often nervy when I get too bullish, nervous above all about sounding like just another “To the moon, Alice!” clarion call from the nutbar end of the bullion world. Not this time folks, this is the time to join the goldbugs, declare your own goldbuggery proudly and tell them that this time, they’re going to be right. For a while at least. It’s why I’m deploying capital in extra trades and it’s why I’ll be longer the juniors this time next week. Gold’s going higher in 2018 and the early downtick in the metal we saw last week is right in its playbook, so for all intents and purposes as from today consider me all-in mining stocks for 2018.

*As freakin’ Treasury Sec! The single most stupid statement out of this administration since it began and yes that includes every single utterance from the mouth or Twitter account of Donald J Trump.




A strong day for mining stocks and investors in juniors...

...except for Alset Minerals (ION.v), which closed at a new 52 week low today. All due to its CEO, who refuses to do what's best for the company and prefers to sink it while drawing fat monthly salary cheques.



Gotta wonder how the CEO.ca sheep who bought into the Allan Barry BS pumpjobs in March and April are feeling.

Largecap precious metals miners...

...are on the list of buys for larger money today. Significant inflows right across the board, GDX seems to be the gateway drug.

The rumour on Sandstorm (SAND) (SSL.to)

The company begins a dividend policy this week.

We'll see.

Chart of the day is...

...the platinum/palladium ratio, 12 months:



Sanity is being restored.

2/13/18

Presumably Tahoe Resources (TAHO) (THO.to) will now drop its appeal against the licence denial at Escobal

In one of the most impressive volte face recorded by a mining company, this afternoon Tahoe Resources (TAHO) (THO.to) decided that the people they insist do not exist...do exist. NR here, pay dirt line here:
"Tahoe wishes to clarify and specifically acknowledge the presence and importance of the indigenous peoples located in the communities near Escobal, particularly the Xinka."

Of course, IKN immediately consulted Owly on this, who commented..

...because that's how Owly rolls.

Yes indeed ladies and gentlemen, this is the very same Tahoe Resources that appealed against its Escobal mine licence suspension on the ground that they didn't have to run a prior consultancy hearing in the zone, and for the specific reason that there were no Xinca indigenous in the area of influence. Therefore, with today's official admission that the Xinca do indeed live and have rights in the Escobal mine zone, the only coherent position TAHO can now take is to drop its appeal against the rescinding of its operating licence and accept the Guatemalan legal decision.

Copper's doing well today

Reports of its death etc etc:


Allan Barry Laboucan entrenches

I've been asked about the recent goings on at Alset Minerals (IOV.) and specifically about the volume and price spike. Well, that's easy to explain, that was the people who proposed the $1.2m placement picking up more shares on the open market as a show of good will on the agreement with the board.

The problem hit when the useless gum-flapping idiot CEO Allan Barry Laboucan refused to step aside, his resignation a key stipulation for the deal because the group buying in aren't stupid and know how pathetic and useless he is. They would have also immediately reversed Allan Barry's ridiculous oversized land grab that has seen ION take on way too many concession hectares and has opened the company up to massive land upkeep payments this year, something it cannot afford.

What happens now is simple and it's all due to Allan Barry. The company will raise no more money, because nobody with a modicum of business sense will walk willingly into a company run by its desperate, greedy, self-serving CEO who is now using the classic Vancouver playbook to rape Alset from within. ION then run out of money and Barry starts accruing his crazily outsized salary on the liabilities sheet. This continues until the share price caves to near zero, the board do a shares-for-debt to clean the salary liability away, current shareholders are first crushed and then the inevitable rollback dilutes them to kingdom come.

All of which is totally unnecessary, all shareholders need to do is kick out the fool in charge and the new broom that wants to move in will capitalize and support the company, re-boot its operations and maybe (if they're lucky) make a winner out of this utter loser run by an utter loser parasite.

2/12/18

Spotted in Peru

Not sure exactly what they do, but it's likely to be a new investor relations firm covering the region's junior mining companies.

Gold Resources Corp (GORO): Two workers died at the mine while GORO had no operating or environmental licences

From IKN456, last night:



Gold Resources Corp (GORO): Fined for permit abuses
A year ago in January 2017, the blog reported on the death of two workers at the Gold Resources Corp (GORO) Arista mine in South Mexico in two separate incidents in the space of just nine days (22).

It now transpires that GORO was operating its mine without a valid environmental or operating permit and they didn’t mention this to authorities for many years. As a result, the company has just been handed a MXN $9.8m (approx U$0.52m) fine by Mexico’s Federal Environment Protection agency PROFEPA). Aside from the deaths, it was found to be operating without pollution emission control equipment, dust protection (around crusher) and had poor maintenance records for key machinery such as electric generators (23) (24).

If the company does not make prompt payment of the fine, PROFEPA says it will move to get a court injunction and close down the operation. Personally, I think half a million is a let-off for this company and in any serious country it would have been closed down permanently.

I really get the feeling that GORO is lucky to be operating in a non-serious country and that if they'd tried this kind of trick in any country that takes its own laws seriously, it would have been permanently closed down years ago and its bosses arrested on the spot. Either way, look no further for the despicable level of this company, half a million USD is a very small price to pay for such scumbaggery.

Alpha Mining likes the look of this market

Check out his thoughts on the bullish reversal pattern seen Friday right here.

2/11/18

The IKN Weekly, out now




IKN456 has just been sent to subscribers.A good excuse for this:




Youtube here.