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Paging Marcelo Kim

This is probably why you're not on the board of Detour (, Marcelo.

Either that or because everyone thinks you're an arrogant dickhead.


A 118 year old man

If I'm not mistaken, this would make Marcelino Abad Tolentino of Huánuco in Peru the world's oldest officially recognized human. Up to this week, he only had a birth certificate but now that he has been given an official Peruvian identity card (in order to receive pension and free healthcare), his age becomes A Thing. Read about it here.

The IKN Weekly, out now

Even though it's a stock photo it's irresistible, have to use it. 
Duke cigarettes are indeed the best

IKN508 has just been sent to subscribers. Total dross, don't even bother.


The top three most visited IKN posts this week are... reverse order, but before that let's note this is the first edition of our regular weekend round-up post for a few weeks. That's because posting on the blog has been light recently and that in turn is because I've been in lazy mode, not been posting as much, had other matters on my mind, doing other things with my time, less urge to fill this humble corner of cyberspace. Pick your fave, I don't care. Anyway, as the urge to rant came back last week you get a Top Three today, reverse order...
Third Place: "Cardinal Resources ( and the cost of getting U$25m out of Sprott USA". FWIW I think this one, plus its follow-up post of the day after, are the best things on the blog this week. On the other hand, if I'd spent a bit of time doing the math behind them they could have been better, but that's why I care more about the Weekly than the blog. And that's just me.

Second Place: "Kinross (KGC) ( Let us not forget that Canada's sell side whore brokerages are complicit in this mess". So I had a rant. Not the first time, won't be the last.
First Place: "Here's one for all those currently crowing about their trade in New Gold (NGD)" and what's really funny about this post is that it came just hours before the company's plug ugly Q4 financials and 2019 guidance, plus the 25%+ dump that followed. It wouldn't have made #1 without NGD helping showing its true colours. 


To understand just how stupid Byron King is...

...about Ecuador and his take on the political risk aspect of INV Metals (, even though he claims to be an expert on the place having studied it for years. This is the bit of his reco note yesterday that mentions the issues faced by INV in Ecuador:

There’s one potential issue that I want to address. Last week, a third-party group in Ecuador filed a legal motion to place an anti-mining proposition into the upcoming March elections. In essence, the idea is to allow localities to pass ordinances that restrict mining, as opposed to mining being controlled by the national mining laws.

As I understand it, the government of Ecuador is opposed to “local” meddling into national mining policy. The matter just went before an Ecuadorean court, which kicked the issue upward to the “constitutional” court.

The government of Ecuador and Ministry of Mines are strongly on the side of resource exploitation. In a recent press release, INV detailed the estimated “take” to various levels of government in Ecuador, based on the recently released FS:

  • Corporate income tax (25%) — $177 million
  • State profit sharing tax (12%) — $107 million
  • Employment taxes (35%) — $52 million
  • VAT (12%) and import duties (0–5%) — $110 million
  • Royalties (5%) — $108 million.

See here for more details.

According to management, there’s a high-level government delegation visiting the INV project this week. Apparently, the government wants to show support for mining, investment, jobs, development and taxes.

It’s difficult to predict how “legal” cases will play out in Ecuador… or anywhere, actually. Overall, a favorable outcome here — one that upholds national control over mining — would be good for Ecuador in general and INV in particular. An adverse decision that permits local meddling would be problematic but not a showstopper at this stage.

My fave phrase in all that is "As I understand it". After all, I can decide the earth is flat or the moon is made of cheese and then pontificate behind any paragraph starting that way.

Meanwhile, we human being who live in the real world know that just about everything that dumbass has written on the subject is total hogwash. It's honestly difficult to know where to start, there are so many things Byron simply does not understand. Let's start with the political system in Ecuador and no matter what the national executive might say do or want, they cannot simply walk in and overrule the local. Byron King's ignorance is writ large above, he simply does not understand what he is talking about. Or how the "third party group" petition isn't something cooked up just last week, but is the culmination of a process that's been going on for four years. Or how the vote is not under appeal or doubt, but has been officially sanctioned and happens on March 24th. And how the anti-mine contingent is going to win it. And how that vote will stop Loma Larga from ever happening.

If this blithering idiot wants to waste his own money, well fine. But his ridiculously poor DD is going to flush the money of hundreds of naive followers down the toilet, too.

The Friday OT: Kollectiv turmstrasse; Ordinary

So cool:

Got into these a couple of months ago, on a reco (thanks). Your turn now, youtube here.

Canadian Malartic impairments

One of my fine twitterpals, waytoointense, makes a good point on the Twittermachine:

When it comes to The Honesty & Integrity Challenge, Marrone never makes the podium. I mean, how does the 2019 AUY capex estimate of $442m stack up against the consensus forecast of $290m? What's that $30m tax payment?

So tell me again how the Macri government will be great for mining in Argentina

An interesting detail in the Yamana ( (AUY) guidance NR. A part of the guidance on its new Cerro Moro in South Argentina, your humble scribe adds the bold type:

Furthermore, for Cerro Moro, unit costs for 2018 and 2019 have been adjusted to reflect the effects of the export tax in Argentina and the historical Bocamina tax. The inclusion of the export tax, which is in effect through 2020, and the Bocamina tax add approximately $130 per GEO and $40 per GEO, respectively, to the guided costs for 2019.

Sooo, the business-friendly" government lauded as the best thing since sliced bread that did away with the export tax on mining products to great fanfare...then re-introduced them when the self-made financial crisis hit last year and now, as a result, miners pay even more than they did before! Seriously, $170/oz just to get your doré out of the mine and to the ship waiting at the dock must hurt.

On the other hand, Sandstorm (SAND) will be happy with the AUY guidance numbers on this mine, the 6m oz forecast in 2019 is right on the button of its maximum stream delivery. But t that's another story.


INV Metals ( news

Oh my stars! That dumbass Byron King (with Jim Rickards) has just reco'd INV Metals ( to his flock of sheep.

Holy Sweet Baby Jesus and the Three Wise Men, these amateurs are going to get their asses handed to them on silver platters come March 24th. This, ladies and gentlemen, is the single most stupid, ignorant and lazy mining company stock call of 2019. Retire, you faker.

Kinross (KGC) ( Let us not forget that Canada's sell side whore brokerages are complicit in this mess

And don't even get me started on Special K and its plug awful 4q18 numbers, announced last night. Q4 all-in costs of 1287/oz means in simple terms that they're running to stand still and then guidance for 2019 added in $210m in extra capex....cute surprise, no?

But this post isn't about the mediocrity at Kindross, rather another part of this whore-show, the sell side anal ysts covering these companies. To be perfectly honest, I didn't pay attention to the notes published on K this morning by Canada's finest, however A. Reader (smart chap and pal who will remain nameless) certainly did. Here's the mail he kindly sent in to IKN Nerve Centre (slightly edited to protect both innocent and guilty):


Reality distortion field this morning. The Scotia, BMO, TD, 8 Capital, GMP's notes on the Kinross  quarter all look like this:

Q4: Blah blah Q4 was more or less in-line, Tasiast, Mauritania blah blah
Guidance: production forecast slightly higher than expected, op costs expected slightly higher
Capex: up to $1.05 B, higher than modeled $795mm, with the difference due to higher growth capital.

Impact: Neutral
WHAT?! $200mm!!! Explain this?! That means zero FCF @ $1300. I should note that Scotia and BMO DID NOT EVEN ADDRESS THE CAPEX. Using Ottotrans or The Law of Mining Translation theory, IMPACT NEUTRAL from the sheep  = YUCK and FARK. Of course they will clarify this honestly and transparently after the call, right.

On receiving the mail, I checked and yes indeed, all of Canada's suited monkey notes mentioned were of this ilk. So yes, my friend's point is an excellent one, how in the name of all that's sane and healthy can a whole industry take figures published by Kindross, see that the sudden and unexpected 2019 capex lift of over $200m wipes all all free cash flow expectations for the year, consider that KGC will now make the sum total of precisely fuck all in profits in 2019...and either consider the event either neutral to its share price targets or, in the case of two of them, not even bother to mention it? It's crazy.

We the long-suffering people on the sharp end of the shitshow, i.e. retail shareholders, are fed up with the fed up to the back teeth with the way these companies are run as insider-friendly jokes by management teams who think they are God's second gift to the planet but in reality wouldn't last in the C-suite of a normal, well-run capitalist sector sector for more than two minutes. However, the morons running companies like Kindross are being enabled by a kiss-ass complicit world of pathetic and conspiratorial brokerages who either don't have the guts to tell the truth to their clients or they are so deeply in bed with the companies they're supposed to cover that KY Jelly is the only way left to separate them. The above on K this morning (which checks out fully, I hasten to repeat) is a prime example. And these brokerages wonder why they're going out of business.

More Cardinal Resources ( The BS they feed you masquerading as project economics

Further to yesterday's post on Cardinal Resources ( that pointed out how the company was paying A$935k per quarter in interest expenses on a U$25m loan priced at LIBOR +7.75% (plus the $2m or so in 'transaction fees' at the front end), your humble scribe's eyes were pointed by a couple of readers toward the latest CDV corporate presentation and, in particular, the slides noting the economic modelling they use to try and sell your their company. Example this one, slide 9:

At what point does it stop being simple corporate BS of the highest order to pretend a cost of capital of 5%, when the real cost for this company to raise money on a gold mine project in West Africa is multiples higher? At what point can you accuse these people of full-blooded fraudulent activity? I'd say we're pretty close here, as the real cost of capital at CDV is obviously North of 15%. I mean, even the company's own literature and economic modelling states at a 10% discount rate the NPV at U$1,250/oz gold (their benchmark number) drops by U$210m (to U$376m). What would a 17% rate do for those numbers above?  But no, even after a 2018 PFS on the project using a range of economic criteria and after all the evidence you could ever need that assuming 5% is codswallop, CDV just ploughs ahead in its 2019 corporate presentation and makes believe to a naive world that its project is worth far more than the truth.

By simple logic and by following the trail of clearly marked numbers at CDV, we can state that CDV pays and will pay way more than that imaginary 5% discount rate for its capital. Best guess me at 15% and frankly, that's being generous. However, the CDV management and board have decided not to advertise the numbers that the real rate they pay would do to their project and, by consequence, share price. They are hiding the truth from you, which is just another way of writing the bottom line to this post; They are liars. Burn them with fire. Rant over.

The New Gold (NGD) balance sheet... at December 31st, 2018. Unpretty.

Blackwater is now carried by NGD at $340.3m (it was $552.1m). Even that seems expensive to me and I doubt they'd find a buyer willing to pay that amount of cash for the dog, but selling Blackwater and paying down a lump of that would be corporate alternative now (and stranger things have happened). Either that or kill the goose that lays golden eggs and sell New Afton (a deposit so good that even the numbskulls that ran this company couldn't fark it up). If not, that debt is going to continue to eat NGD the way it's been eaten over the last couple of years, bright and shining new CEO or not.