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8/24/19

Checking in on the John Doody/Porter Scamsberry Belo Sun (BSX.to) pump job

Prompted by ignorance and a naive assumption that the people at the centre of this scam have their best interests at heart, it's worth reflecting that every single new owner of Belo Sun (BSX.to) conned into buying this trash is now underwater on their trade.


Meanwhile, anyone smart enough to sell into this pump has made out like a bandit. Surely that wasn't the plan, Porter?

El Salvador's "Plan Control Territorial": The early results

We are now over two months into the initiative of the new (and very popular) President of El Salvador, Nayib Bukele, called "Plan Control Territorial" (no need to translate that one, I think), created to try to reduce the amount of gang violence and murders in the country, with El Salvador suffering up to recently one of the world's highest murder rates per capita. The plan has seen more officers (police and army) on the streets and a thorough overhaul of the prisons system to wrest power away from gang members who are serving time but were still the kingpins of their organizations. Let's see how initial results are doing, via the average numbers of homicides per day in the country:


In red to the left the annual averages (2019 to date, obviously). To the right in that orangey coppery russet, the last six months of readings from 2019. The death rate has dropped sharply in the last two months, with August set to be the lowest bloodshed in forever. So far so good.

8/23/19

Mozart, Wolfgang Amadeus; Don Giovanni final "Commendatore" scene

Get your rocks off to Mozart, people who say he lacked emotional depth forget about the darkness in the climactic scene of the opera. Conceit and bravado condemn Don Giovanni, but the music annihilates his soul as much as any of the devils who drag him to his eternal fate.




Samuel Ramey does Don Giovanni, Kurt Moll is his nemesis. Youtube here.

Angry Geologist does Garibaldi (GGI.v)

Of course she does. Always does Garibaldi when they have results out. Right here, geols will enjoy this one.

8/22/19

Regulus (REG.v) does videos, part two

Following on from its first video explainer on AntaKori (see here, it already has over a thousand views), today Regulus Resources (REG.v) has published part two of its series entitled "The Upside Potential at AntaKori Pt.2". Click that link or just watch it here below in this embed:



Well worth the time for any junior mining investor.

What John Doody is not telling you about Belo Sun (BSX.to)

A hilarious pump out today on Belo Sun (BSX.to), the protagonists being the promo pumper Porter Scamsberry and his new MiniMe John Doody (who recently removed all semblance of self-respect by selling his ass to Scamsberry). Doody and his new owner Porter have decided to pump the holy fark out of the Stan Bharti waste of space Belo Sun (BSX.to) to their audience of idiots who won't even realize they've been ripped off until the Xanax runs out. It will all end in tears.

With that in mind, allow your author to add some details about the regulatory disaster that is BSX and why it doesn't stand a chance of moving its project forward anytime soon. What follows is also one of the main reasons Agnico (AEM) bailed on the stock and its story (another entity guilty of doing their DD after purchasing rather than before, better late than never I suppose). For those not wanting the details, the TL:DR is:
  • Brazil is a bureaucratic nightmare
  • Belo Sun is run by idiots
  • Even in a best case, the mess they have made for themselves will take years to resolve. In a worst case they will lose most of their concession area that covers the main mining concession
  • BSX now realizes this, which is why they changed wording in their latest MD&A. They did so in lawyer-script that keeps them about a millimetre inside strict legality, but it completely fails to explain the material risk to the project to its shareholders.

Aside BSX, the protagonist of our story today is Brazil's Instituto Nacional de Colonização e Reforma Agrária, or INCRA, the body in charge of land reform. INCRA owns plenty of tracts of land in the country and if you, me or anyone else ever wants to purchase or acquire INCRA land, the process involved is extremely complicated and your actual, full-on Brazilian bureaucratic nightmare. Large mining companies know this and I have heard tell of examples when a operating and producing miner has gone through the process of buying small areas land from INCRA (typically for tailings facilities as they grow) and the red tape has taken ten years. We could spend a lot more time on the horrors of INCRA, but the bottom line to this part is that if you're a mining company, you do not want to rely on buying INCRA-designated land as part of your corporate growth strategy.

Let's move to BSX, who has said on no-end of occasions that it owns the surface rights for its Volta Grande project. They tell you that because they bought the surface rights from locals. They did that because the locals told BSX that they owned the land packages in question. Sadly, in most cases it has turned out that the locals were not the true owners of the land on which Volta Grande is located, and most of the mining concession area is in fact on INCRA-owned land (as opposed to the greater concession area, important distinction that we come back to later). Which is nice, because it also gives a window in how naive and stupid these BSX people are about working in Brazil. Now I don't know whether the locals were simply mistaken about their lack of ownership rights (perfectly possible in the Amazon basin, laws get created and annulled over the years and decades) or whether the locals made a proactive decision to rip BSX off, but the upshot is the same: BSX does NOT own the surface rights to all of its mining concession. Not even most of it, in fact. 

After they discovered their stupid and expensive error and up to this year, BSX tried to fob this non-ownership SNAFU by claiming it had a Memorandum of Understanding (MOU) with INCRA. Even under normal circumstances a MOU isn't a legally binding document (i.e. they do not own the surface rights, no matter how hard they might wail), but an MOU with INCRA is worse, it's nothing even close to a formal agreement and is more akin to an amuse bouche that the restaurant offers you before you start the 20 plate tasting menu extravaganza. That INCRA MOU isn't even worth the paper it's printed on (see above), especially as the guy who did you the favour of signing that MOU isn't even with INCRA any longer. 

So let's see how BSX is disclosing the fact that most of the land that hosts the Volta Grande gold mine project isn't owned by BSX, but by the worst behemoth red-tape monster in Brazil. This is the relevant passage from the 2q19 MD&A, your humble scribe provides a little bold type and underlining:

After receiving the LI, the Company received an order from the judge of the Agrarian Court of Altamira issuing a temporary 180-day injunction halting certain work related to the LI. The purpose of the injunction is to provide time for the relocation of certain families living near the project site and the finalization of the agreement with Instituto Nacional de Colonização e Reforma Agrária (“INCRA”) involving the overlap of a small portion of INCRA urban development project area with the Company’s mining concessions. The INCRA overlap on the Volta Grande Project footprint covers some of the planned infrastructure.

Belo Sun entered into an MOU agreement with INCRA in 2016 and re-signed again in August 2017 which would see Belo Sun purchasing suitable substitutional land chosen by INCRA in exchange for INCRA releasing the overlap land. With the Government change that occurred in January 2018, Belo Sun is now in discussions with the new INCRA administration. While a final satisfactory negotiated solution is not guaranteed, both parties have continued to discuss the mechanics for a solution. The New Administration has indicated that they prefer not to do a land substitution but establish a lease agreement that would see the land returned to INCRA following the closure of the mine. Discussions are ongoing in a favorable and co-operative atmosphere. The discussions between INCRA and Belo Sun are recorded and registered with the court in Altamira on a regular basis. The relocation plan approved in the LI authorizes families to relocate at a time of the families’ choosing, with relocation expenses covered by the Company, stay where they currently live, or receive financial compensation for their property. The Agrarian Court of Altamira lifted this injunction in June 2017."
You catch that? Instead of the company being honest about the amount of land at Volta Grande with surface rights owned by INCRA, it tried to hide behind phrases such as "...a small portion of INCRA urban development project area..." or "...covers some of the planned infrastructure." It may be that INCRA has urban development plans for a small corner of its land up there, but what about the land it owns that doesn't have an urban plan? And once again let us be crystal clear on this, the INCRA overlap on the Volta Grande Project footprint does not cover "some of the planned infrastructure", it covers MOST of the infrastructure including pit, tailings facility and mill so fair warning required here, if you are a BSX shareholder and read this, then you do not get in contact with the company and have them explain exactly how much of the important areas of their mining concession and sat on INCRA land, you only have yourself to blame afterwards. Let us also note that the new INCRA admin doesn't even want to sell the land to BSX now, preferring a leaseback (usufruct) structure as they discuss the relative merits of the first course of this 20 course menu. There is a massive material risk to the Volta Grande project that BSX is trying seven ways not to admit to or make public. Pretty obvious as to why that is, as not only would the truth ruin their pumpjob plans but it would also show their management and executives to be a bunch of pikers on Brazil with no clue on how to operate in the country.

Don't take my word for it, contact BSX and find out for yourself. Ask them about surface rights, land ownership and just how much of their project sits on INCRA land. Ask them why they paid locals al that money for surface rights that the locals did not own. Ask them about the legally binding nature of an MOU with INCRA. Ask them why they have been so keen on burying the truth. Now you know why AEM bailed.

8/20/19

A comment on Victoria Gold (VIT.v)

This humble corner of cyberspace notes with interest that your humble scribe's well-documented bearish position on Victoria Gold (VIT.v) (latest edition last month) is currently being served back to him on a gilt platter by a perfectly attired maitre dee in a swanky hotel.



I was wrong. Again. Won't be the last time either. Expand a little on the potential why, it's around this time of the first production and output that you'd expect to see a surge of interest and that's fair enough, wish them well. Really do in fact, sincerely hope the mine starts well, performs to expectations and becomes a hub of growth in the Yukon economy. My issue is more on the economics and financials of VIT.v, its capex blowout, its financial debt, obligations and that high share count. Just don't see much meat on this bone for the retail holder, then again if you'd asked me 10 days ago I'd have said the same. And I'm wrong so far.

Lupaka Gold (LPK.v) in trouble with the Peru environmental authorities

Probably nothing...


Rise Gold (RISE.v): Ben Mossman up to his tricks again

Those of you who recall the almighty FUBAR that was Banks Island Gold (ex BOZ.v), the junior that BSsed the market about its ability to produce from the Yellow Giant project (on the island in Northern BC). Ben Mossman was the president/CEO of the company that failed to produce any meaningful amount of gold. Instead it managed to bankrupt the company and cause massive losses for the people who bought into the Louis James/Casey Research/CEO.ca pumpo on the stock (yes indeed, it was Louis Little Wolf Lobito's James "largest personal position". You may also remember how much IKN laughed about the Lobito pump at the time. This one, too).

Well folks, Mossman is at it again at his new scam Rise Gold (RISE.v), a company with a project that looks good on paper, but as soon as you scratch the surface and do the DD it becomes clear how much chance the mine project has of ever being permitted (between slim and none). So let's check in at the RISE.v website, starting with the CEO biog:

Ben Mossman | President, Director, and CEO


Mr. Mossman is a mining engineer with over 15 years of experience in the mining industry including experience in capital markets, project evaluation, acquisitions, mine operations, and development. Mr. Mossman has worked at eight producing underground mines with production rates ranging from 250tpd to 3,000tpd. Previously, as CEO, he lead the exploration, permitting, financing, construction, and operation of a profitable gold mine in British Columbia which was one of the only hard rock metal mines in the world to use pre-concentration (DMS) to eliminate all surface disposal of tailings. Mr. Mossman has been involved in several other mine start-ups, including as mine engineer at the Snap Lake Mine for DeBeers Canada and the Bellekeno Mine as Chief Engineer for Alexco Resource Corp.

That's the whole thing, strange how it totally fails to mention Banks Island Gold, isn't it? Fails to mention the bankruptcy. Fails to mention the total losses taken by equity holders. Fails to mention the way he was constantly accused of environmental damages at the mine site by authorities, including obstructing enviro officials from doing their jobs and eventually found guilty of violations of the BC Fisheries Act and Environmental Management Act. Anyway, over at Rise Gold (RISE.v) we have this news out today.
In it, we read that RISE.v has (and we quote) "...increased the size of the non-brokered private placement previously announced in its July 3, 2019 news release from C$1,750,000 to C$4,500,000 through the issuance of up to 64,285,714 units (each a “Unit”) at a price of C$0.07 per Unit, with each Unit comprising one share of common stock (a “Share”) and one-half of one share purchase warrant (the “Private Placement”). Each whole warrant (a “Warrant”) entitles the holder to acquire one Share at an exercise price of C$0.10 for a period of three years from the date of issuance."

Okay fair enough, it's a private placement that coincided with a surge in the gold price and the junior has taken advantage of the interest by expanding its placement. Potentially shady, but nothing particularly unusual and if it were just that, it'd be worth a shrug. But then comes this:

The Company announces that it has entered into a non-binding letter of intent with Eridanus Capital LLC (the “Lender”) for a US$1,000,000 loan (the “Loan”). The Loan has a term of 4 years and an annual interest rate of 10% for the first two years increasing to 20% in year 3 and to 25% in year 4. Interest will accrue and be paid along with the principal upon the maturity date. The Lender will be issued 11,500,000 bonus share purchase warrants as additional consideration for advancing the Loan. Each warrant entitles the holder to acquire one Share of the Company at an exercise price of C$0.10 for a period of three years from the date of issuance. The Loan may be repaid prior to the maturity date, in whole or in part, provided that all accrued interest is paid. In addition, if total interest payments are less than $200,000 (two years’ interest), the difference will be paid to the Lender as prepayment compensation. The Loan will be secured against the assets of the Company and its subsidiary and will be used for permitting, engineering and working capital at the Company’s Idaho Maryland Gold Project.
Turns out that this entity, Eridanus Capital LLC, was only registered as a company a couple of weeks ago and its business address is a Biz PO Box drop service out of Sheridan Wyoming (an old clapboard railway station building, in fact). Which makes one wonder why RISE.v is so keen on getting its hands on this U$1m for "working capital purposes" from a brand new start-up registered in middle-of-nowhere USA when it's just raised C$4.5m for exactly the same purpose, working cap. Also, why is RISE.v willing to pay a minimum of $200,000 in interest (if they pay back in two years or less) or up to $650,000 (if they pay back in four years) for this loan that they really do not need? All on the back of a CEO with an extremely dubious past history (that he's obviously keen on burying). Perhaps if Mossman helped us with the identities of the people behind Eridanus Capital LLC, it would surely help the transparency on this junior's activities. Or maybe he prefers keeping us all in the dark again...


8/19/19

Solidly good news for Alexco Resource Corp (AXU)...

...even if I do say so myself, the long-term shareholder. This just released:

YELLOWKNIFE, Aug. 19, 2019 /CNW/ - Canada is moving forward with a long-term plan to clean up contaminated sites in the North.
Today, the Honourable Carolyn Bennett, Minister of Crown-Indigenous Relations, announced that the Government's new Northern Abandoned Mine Reclamation Program will invest $2.2 billion over 15 years to address remediation of the eight largest abandoned mine projects in the Yukon and the Northwest Territories.
These projects are the Faro, United Keno Hill, Mount Nansen, Ketza River, and Clinton Creek mines in the Yukon; and the Giant, Cantung, and Great Bear Lake mines in the Northwest Territories. The Great Bear Lake project consists of multiple smaller sites in close proximity to each other.
The new program will leverage expertise gained over 15 years of...

Falco Resources (FPC.v) and IKN's First Law of Mining NRs

Here's a mail I just wrote back to a pal, twenty minutes ago:

"I laughed out loud. Not just "LOL", seriously. That's a classic and in truth, you don't even need to underline "geotechnical" in para1, anytime "challenges" comes up early in an NR it's runawaytime.

"Can I use your mail in a post? Refusal does not offend..."
...etc and my kind mailpal readily agreed, so here below is the mail that elicited the above reply. It concerns this evening's fried offering from Falco Resources (FPC.v), with my fine correspondent's intro line and red ink to help one's eye pertain the important information. By way of introduction a reminder of the all-important IKN First Law of Mining NRs:
"The IKN First Law of Mining News Releases: Considering that anything contained in a mining news release is presented in the best possible way for the company in question, any piece of information contained in a NR that comes across in any way negative means the real news and/or events behind it must be very, very bad indeed."

And now, my kind friend's missive:

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Just read this announcement by Falco Resources... I was already frightened by the first sentence:




8/18/19

The Harte Gold (HRT.to) hedge position cannot be unseen

They plan on producing around 40k oz this year and a little over 60k oz in 2020. And have this to cover:


Those of you who remember the last days of Phelps Dodge under Whisler will recall just how much damage a so-called "costless collar" can do to your business if the metal prices find a way out of the edges of the contract. In this case, HRT has already taken a $10.57m hit on the book as at June 30th and that because gold was at U$1,409/oz! Imagine what the hole will look like at the end of 3q19 and gold at $1,500/oz (or above).

There should be a law against allowing geologists to take deposits into production.