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A room with a view (part 12) summer vacs edition

Today reader SS shows us the view from lodgings at Barichara, Colombia

Here we are in July, with all you Northern Hemisphere types now doing summery things and visiting places and taking photos from balconies with piña coladas in the other hand. So as this series has stretched out far longer than I imagined it would, if you feel like sending in a snap of a nice place visited this year we can run these over the northern summer period (and make your author shiver with jealousy).


The Friday OT: Gil Scott-Heron;The Revolution Will Not Be Televised

If you know your history, then you will know where you're coming from.

This track is required knowledge for anyone even vaguely interested in music.

Peru mining and social responsibility: an excellent report and video from Reuters

This is great journalism and should be required viewing/reading for anyone interested in the South American mining scene. Check out this video....

....and read the news report that accompanies the vid, as even those immersed in the sector will learn a lot. This isn't a report promoting one agenda or another, it's a fine job of work that goes beyond the obvious and looks for equitable solutions to today's problems. As the question posed at the end of the story poses:
How is it that a country that is increasingly well positioned in the global economy and has attracted loads of investment finds itself with so little public support for the projects on which it depends?
Quite right.

Wellington West elects to take a long-term position in South American Silver (

Oh dear. The problem with setting your company up as lead underwriter for a bought deal equity placement is that if the deal falls flat, you end up drowning your company (and career) in unwanted paper. Take the case of Wellington West, heading up the dudes that are trying to sell the South American Silver ( bought deal at the moment.

Here's a couple of key excerpts from when the bought deal was originally announced:

South American Silver Corp............. announces that it has entered into an agreement with Wellington West Capital Markets Inc. (the “Lead Underwriter”), on behalf of a syndicate of underwriters (together with Lead Underwriter, the “Underwriters”), to sell 6,350,000 Units ("Units") at a price of $0.63 per Unit for gross proceeds of approximately $4.0 million, on a “bought deal”, private placement basis (the "Offering").


The Underwriters shall also have the option, exercisable up to 48 hours prior to closing of the Offering, to increase the size of the Offering by up to an additional 3,175,000 Units at the same price per Unit as is applicable to the Offering (the "Underwriters’ Option")........


Completion of the Offering is scheduled for July 12, 2010 and is subject to......

And here's the NR out yesterday, updating on the deal:
South American Silver Corp. (“South American Silver” or the “Company”) is pleased to announce that it has closed 5,310,000 units, for gross proceeds of $3,345,300, of its previously announced bought deal private placement of an aggregate of 6,350,000 Units ("Units"), priced at $0.63 per Unit, for gross proceeds of $4,000,500 (the "Offering"). A second closing is anticipated to occur on or about July 19, 2010 for the remainder of the Offering. The Corporation has extended the period pursuant to which the Underwriters may exercise their option (the “Underwriters’ Option”) to increase the size of the Offering to July 23, 2010.....

So let's see: The "first closing" comes three days late and over a million papers short of the target. The very ambitious 3.175m overallotment has also been extended from 48 to 96 hours after the new "second closing", but what with the actual bot deal hardly flying off the shelves you have to wonder just how much of that overallot will make it out the door.

Thusly, Wellington gets to sweat on whether it'll be holding a bag full of paper this time next week. You gotta wonder whether the unpopularity of this bought deal has anything to do with this, inquiring minds and all that jazz...........

Mining PRs and the Ottotrans™, Part 20

Today, we have Ecometals (EC.v). Good ol' Ecometals, always up for bringing a laugh to the world and ready to entertain us. Coming right up is the front portion of yesterday's EC.v news:

This is what they wrote:

TORONTO, ONTARIO--(Marketwire - July 15, 2010) - Ecometals Limited (TSX VENTURE:ECNews; BERLIN:GDQ - News; FRANKFURT:GDQ - News) - -

Ecometals Limited announces receipt of analytical results from drill hole RZDDH10-03A and preliminary results from RZDDH10-06 on the Rio Zarza gold project in Ecuador. Geological evidence thus far indicates drilling is within the alteration envelope of a mineralized system, but has not yet intersected the high grade core. The Company plans to continue drilling based on the developing geological structural model of the pull-apart basin, using geochemical indicators and alteration as vectors to the centre of the system.

While the analytical results to date have only resulted in sub economic grade gold mineralization, the Company considers that the drilling results thus far are very encouraging, and the main geological results in support of continuation of the programme are (continues here)

And this is what it means:

TORONTO, ONTARIO--(Marketwire - July 15, 2010) - Ecometals Limited (TSX VENTURE:EC - News; BERLIN:GDQ - News; FRANKFURT:GDQ - News) -

Ecometals Limited announces receipt of analytical results from drill hole RZDDH10-03A and preliminary results from RZDDH10-06 on the Rio Zarza gold project in Ecuador. Geological evidence thus far indicates drilling is within the alteration envelope of a mineralized system that has no mineralization, but has not yet intersected the high grade core which doesn't exist. The Company plans to continue drilling based on the proven company policy of throwing sand in the eyes of the long-suffering saps known as their shareholders developing geological structural model of the pull-apart basin, using geochemical indicators and alteration as vectors to the centre of the system which sounds really important, doesn't it?

While the analytical results to date have only resulted in what we knew would be the results, the Company considers that the drilling results thus far are very encouraging because these Prozac pills are really cool and you ought to try them yourself one day too and the main geological results in support of continuation of the BS to string you all along (continues here)

Annals of toldya so, Nautilus Mining ( edition

The people behind this criminal activity should be thrown in jail. That includes all members of management as well as Porter Stansberry and his slimeball cohorts.

This is not "stock promotion", this is fraud. The only way to stop this bullshit from happening is to have regulatory bodies that aren't afraid to take a proactive stance.....but we have the OSC, the same bunch of whusses that managed to convict just one scamster in the last ten years, which is pretty amazing considering that the Canadian market is one of the world's most corrupt.

The above is the chart of people screwing innocents and taking their money. Vomitworthy, Porter you piece of shit.

Chart of the day is...

....the USD index, ten years or so.

So we're being told that the dollar is much stronger these days.............

Anyway, it's nice to be back in the bosom of the family. We'll actually get some posts up on the blerg today, which will make a pleasant change. Lawd knows what about though, feeling out the loop right now.


Chart of the day is....

....five day gold futs:

I do like it when nothing much happens in the mkt while roadtrippin'. Normal service returns mañana. Hope you're well.
PS: subscribers: Yesterday's Flash update was deliberately brief.


On The Road

Posting will be light for the next three days. Have fun.


Cash costs or direct costs per tonne processed?

There's a question for you, metalheads. What's the best way of definining the costs of production for a mining company? Do you go for the much vaunted cash costs number normally pushed in front of your face by the company, or do you look at the amount of money it costs the miner to process a tonne of mineral and get all that yummy scrumptious metal out?

Here's an example, from Endeavour Silver ( This little chart compares the vaunted and reported cash cost per ounce of silver, net of credits, to the cost of processing 100kg of ore at the company ( reports that number per metric tonne, we do a simple 10X division to make the scale fit neatly on the chart).

Seems to me that when a company like trumpets its fabulous cuts in cash costs, all it's really saying is, "We were dumblucky and got more moolah for our byproducts". DYODD, dude.

104 deaths from pneumonia in the high plains region of Peru

Well, 104 deaths registered in the Puno and Arequipa provinces during the cold winter period, to be exact; I'm sure the Twobreakfasts government has managed to leave a whole bunch of other provinces unprotected, too.

But hey....screw it...they're only poor people right? Viva investment grade and keep yer eyes firmly fixed on that GDP number, gringo.

Octopus antidote


If you adhere to the view that it's only correct for intelligent people to take money away from stupid people....

...then today's the day to short Nautilus Minerals ( It's also the day that Porter Scamsberry unleashed his proletariat on this woefully bad pump job (it's up 10% at the bell...make that 15).

Chart of the day is....

....the gold/silver ratio:

File this under 'things that work until they don't'.


The best team won

The IKN Weekly, out now

IKN62 has just been sent to subscribers. There's a fundy look at US Gold (UXG), there's thoughts on this and that and there's a purchase planned for next week, too.

Now excuse me, gotta fly cos I think there's a match on the telly.

Armen does Cuba

Armen Kouyoumdjian has been featured on this humble corner of cyberspace several times, as his weekly e-mailed newsletter is one of the best open secrets of the LatAm analysis scene. He visited Cuba recently and his missive on the subject sent today is really worth reading. He's kindly given permission to reprint here, so without further ado.....


A Few Days in Cuba

By Armen Kouyoumdjian kouyvina at

July 10, 2010

From June 18 to 22nd, I spent 4 days in Cuba as a guest of UNIFRANCE, the French organisation in charge of promoting cinema from France round the world. It was for the inauguration of the XIII French Film Festival in Havana, an event which attracts some 150,000 spectators every year. I am obviously better considered as a film critic than a country or defence analyst, because such invitations are not exactly showered on my person (man, I cannot even make National Day receptions at many embassies, even though they have no scruples in receiving my material for free).

It was my first visit to Cuba, very unexpected, and at short notice. I had always wanted to go there to see things first hand in a way other than an all-inclusive resort hotel in Varadero. After my return, wiser and with a clearer mind, I did write up about the cinematographic aspects of my trip, but I hesitated for over a fortnight as to whether I should write about my impressions of the country in general.

The reason for my hesitation is that almost everyone has a preconceived idea of the place, and as almost none of them have been there, they are just happy to mouth the received ideas put across by those with a real agenda. I can already imagine some of the reactions I am going to get (please abstain and do me a favour). Anyway, I have decided to go ahead and there it goes.

METHODOLOGY Three weeks short of commemorating the 40th anniversary of starting a career as a Country Analyst, which is equivalent to a diagnosis doctor, one cannot but have “déformation professionnelle” on arriving into a new place. As some know, I have written and lectured at length about the methodology of country analysis over the years, and there are some basic principles of modus operandi that you have to adopt. Among those is never start your analysis with the trip. Going there has to be the end of the process, with the twin aim of checking your prior conclusions with reality, and filling in the holes that could not be tackled at a distance.

I would be the first to admit that four days is very insufficient to carry out such a task, even more so when a good deal of the time is taken on by other commitments. However, like an experienced doctor, if you know where to look, you can advance more quickly. In this case, though it was an invitation, we were not guests of the Cuban authorities, nor the French government. There was a full programme, but no obligation to attend all the events (I did because I thought it was the minimum of courtesy that UNIFRANCE deserved). We had no chaperones and could roam freely anywhere we wanted, apart from the fact that many of the activities included mingling informally with the population. To the extent that we had to attend happenings in many parts of town, we also drove extensively through Havana (also take the window seat and look at what is going on in the streets you pass through). We spent a day on a beach 30 minutes from town, where we appeared to be the only foreigners with the added bonus of being able to see the outskirts. I also managed to have some additional input from personal sources. All this to say that my observations are not based on looking at a country from a window in a Sheraton hotel.

THE REGIME PEOPLE LOVE TO HATE Together with Chavez’s Venezuela, a relatively latecomer to the hate list, Cuba has been on top of the critics’ targets for decades. Nobody seems to worry much about unsavoury governments in other places as far away as Central Asia, the Middle East, much of Black Africa, etc..They all have it in for Castro’s Cuba. I suppose, quoting Truman (was it him?) it is because they are “our sons of a bitch”).

In the case of criticism from Chile, this used to be the prerogative of the Right, a description in which I include the Christian Democrat party, but the Left has recently joined in, because it seems to be cool to criticise Cuba. Never mind that many of the critics were taken in, saved from death or torture, fed, clothed and given a job by that same regime they now vilipend. They are as ungrateful as in the Turkish proverb (“You take them on your lap, and they pull your beard”). The “source material” for Chilean critics is two autobiographical books: “Persona non Grata”, by writer and diplomat Jorge Edwards, who at least makes some attempts at objectivity along the line, and “Nuestros Años Verde Olive”, by Roberto Ampuero, which is a pure hatchet job about the time he spent there as an exile. More recently, a Havana-based female Cuban blogger , Yoani Sanches, is widely reproduced in the Chilean media, as the source of all wisdom on Cuba. I can just imagine, in a country where officials suggested that the national soccer team’s Argentine manager should be expelled from the country because he saluted president Piñera rather unenthusiastically, how the locals would take to someone blogging regularly about all the ills of Chile.

Of course, nobody has read History either, so they do not know what sort of rulers the country had in the pre-Castro years. The Chilean Right also has a cheek to point the finger at anyone as far as Human Rights violations are concerned. It is the classic case of the pot calling the kettle black.

Finally, and as an illustration of the one-sidedness of comment about Cuba is the matter of hunger strikers. In 1981, 10 IRA political prisoners in British jails starved themselves to death. Why wasn’t the same protest directed at Britain? Hunger strikes are a personal decision of the striker, and the resulting death is their own responsibility only.

THE BAD NEWS FIRST Let us mention the negative aspects one could see and hear during this short trip. No, Cuba is not a Western-style democracy. It is an avowed Marxist state. There is only limited access to private property (though running private businesses is increasingly accessible), and everything is tightly controlled. The choice of consumer goods is limited (and so it was in Armenia during the first post-USSR days), and the price/wage ratio is discouraging, as salaries are very low (even though many basic needs are taken care of and should be considered as an additional wage).

There is no open freedom of expression, and in fact there seems to be a shortage of even the official press, as I could not see a single kiosk selling newspapers or magazines. Access to internet is limited by price rather than censorship, as the few net cafés in Havana always have queues similar to those at Banco del Estado at a quarter to two on a Friday. In the hotel, internet access cost U$ 7 per hour.

Running a business for a foreign entrepreneur means walking a very tight rope, but the better part of town is filled with offices of many multinationals, so it can be done (and by the way have you tried doing business in Uzbekistan, Burkina Faso or even China?).

Though levels of service are more than adequate (and anything that goes wrong is swiftly put right), there is obviously a relaxed Caribbean attitude about opening hours. The food, which is available plentiful and varied, is rather bland in taste. A gastronomical paradise it is not.

I have heard complaints about the fact that Cuba is drab “and there is nothing to do”, particularly outside Havana. Sure, if you are going there expecting football louts’ beach parties Costa Brava-style, it is not a destination of choice (though some of our party went to a mega disco in Havana at 1 AM and reported the next morning that it was full of local youth salsa-ing away). As for the provinces, have you checked the village night life in Bangladesh?

FALSE LEGENDS ABOUT HAVANA The positive experience started even before I left. I needed to get a visa (well, actually a tourist card). In rang the consulate in Santiago, and checked their website. U$ 15 if you collect it the next day. Double for immediate delivery. My schedule did not allow me two visits, so I went there with my U$ 30 and all the supporting documentation, expecting to be grilled as to the motive of my visit. I was not even asked where I lived in Chile, or where I was to stay in Cuba. I gave across the U$ 30, but the girl returned back half the money. ”It is not fair for you to pay for fast service, as we are not busy and we can do it immediately anyway”. Just imagine that happening in a Chilean office..

On arrival at Havana, nobody asked me anything except if I was staying in a hotel or private accommodation. The name of the hotel was on my entry card, which was not even collected! Nobody bothered about any subversive literature I might have in my luggage. It was untouched.

“Expect a country in ruins, where nothing works”, I was told. “Take ball point pens, stationery, etc..You will be pestered for them wherever you go”. I took 15 ball point pens, and brought them straight back. Nobody ever asked for one. We passed several schools on our travels on foot and motorised. I could see neatly dressed schoolchildren in uniform going about their business. I did not enter any hospital or clinic but there were plenty about and from the outside they looked spick and span,

Over the 4 days, I was approached by three beggars in the street (less than in most Western European towns), and the only “dissident” voice was an oldish lady who shouted at us “they give us no clothes- no shoes-they give us nothing”. I thought it might be cruel to tell her that in Chile, Felipe Larrain and Rodrigo Hinzpeter do not stand at street corners handing out free shoes and clothes to the population either.

The streets and roads we took in and out of town were in perfect condition. Not only clean but devoid of potholes. All traffic lights had a big screen advising the length of wait the change in colour. Not a single stray dog around. The other legend about the shortage of public transport and the few antediluvian buses with long queues, turned out to be as untrue as other stories. The buses were modern articulated ones as for Transantiago, and the queues at the stops much shorter.

Yes, there are a number of vintage American cars from the 1950’s, but they are the exception and most are used to take around nostalgic tourist. The rest of the vehicle population appeared to be mainly from the 1980’s, with a few 1960’s models around.
In fact, its composition looked very much like the one in Chile when we arrived in 1991. Most people wore seatbelts, and taxi drivers insisted that their front-seat passengers do the same. You can rent a car and roam freely through the island, hardly the stuff with which “dictatorships” are made.

We took a three hour walk in the old town with two other journalists, one Colombian and the other Mexican. Public buildings were both impressive and in a generally good state of repair. We went first through the main shopping street. I had been asked by my son for a Cuban national team soccer shirt (fat chance in a baseball-crazy country- he had to settle for a Che Guevara one). I entered three well stocked sports shops (so much for the shortages). They were cafés, restaurants and food stalls, mainly frequented by locals. We had lunch in a small place. They had air conditioning but no paper napkins.

We wandered away from the more historic district into genuine backstreets. I wanted to carry on, but my companions, probably traumatised by the situation in their own countries felt (for no obvious reason) that it might be risky. I regretfully abandoned my quest, but not before noticing that yes, there were dilapidated buildings, but they were the minority. Have you ever walked the non-touristic back streets of Valparaiso? Nearly all tourist service providers had a professional badge clearly visible, and there was a discreet but real presence of police.

We went to two movie houses (it was, after all, a film festival that took us there). The air-conditioning was bad or non-existent (as it was in most of Chile even a decade ago), but the old-fashioned large houses (of over 1,000 seats) were in pristine condition, and the sound system excellent. Again, full of Cubans. If all these Cubans who seem to be able to go about, study, eat and entertain themselves are just the Nomenklatura, well it must be a very big universe.

As mentioned before, we went to the beach. Playa del Este, a beach area half an hour out of Havana. Spotlessly clean sand, crystal-clear water, and again, mostly surrounded by Cubans. Small beach restaurants, parasols and chaise-longues for rental (U$ 2 per day), plenty of staff both to attend to your needs and provide security.

The Havana hotel where we stayed, a large 4-star establishment, worked pretty well by any standards, and what went wrong was soon put right. The staff were plentiful and courteous, with a feeling as if they meant it rather than the American plastic smile variety. Many spoke English, which is more than could be said about the waiter in the swanky W hotel of Santiago de Chile, who was unable to communicate with non-Spanish speaking guests and when asked for an English menu written in such small print that it looked more like a microfiche stolen from the KGB. There did not seem to be any restrictions on Cubans entering the establishment. Anyone who is about to comment that it is all very well but most Cubans cannot afford it, ask yourself how many Chileans can afford an 18,000 peso breakfast buffet at the Ritz-Carlton in Santiago.

On leaving the country, formalities and controls were again minimal (even allowing for the fact that staff may have been distracted by the World Cup match being played).

The above observations not only show how one can get taken by totally biased misinformation, but going further than that, if you cannot describe faithfully the sort of things obviously plain to the eye, then even if you have real points to criticise, you totally lose your credibility.

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