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Gender Equality in Latin America

The World Economic Forum released its 2010 report on gender equality around the world last week. This chart details how LatAm countries fare in the world rankings, with the lower your score the better (eg: number 1 ranked for gender equality around the world was Iceland, bottom at number 134 was Yemen).

click to enlarge

Best for equality in LatAm was Cuba, ranked 24. Then come Costa Rica in second  (28th in world) and Argentina third (29th in world). Peru slips 16 places to 60th in the world. Surprisingly, Brazil languishes well down the list in 85th much for all that equality imagery, eh? Guatemala sucks.

This table shows the evolution of regional countries over the years. Nicaragua is making a decent fist of improving things it seems, as is Chile

2010 rank 2009 rank 2008 rank 2007 rank 2006 rank

Cuba 24 29 25 22 n/a
C. Rica 28 27 32 28 30
Argentina 29 24 24 33 41
Nicaragua 30 49 71 90 62
Guyana 38 35 n/a n/a n/a
Panama 39 43 34 38 31
Ecuador 40 23 35 44 82
Chile 48 64 65 86 78
Honduras 54 62 47 68 74
Colombia 55 56 50 24 22
Uruguay 59 57 54 78 66
Peru 60 44 48 75 60
Venezuela 64 69 59 55 57
Paraguay 69 66 100 69 64
Dom Rep 73 67 72 65 59
Bolivia 76 82 80 80 87
Brazil 85 81 73 74 67
El Sal 90 55 58 48 39
Mexico 91 98 97 93 75
Suriname 102 78 79 56 n/a
Guatemala 109 111 112 106 95

OT: On horse's asses (please see update)

  I was sent the following yesterday. Worthy of sharing.


Railroad tracks: The US standard railroad gauge (distance between the rails) is 4 feet, 8.5 inches. Now, that's an exceedingly odd number.
Why was that gauge used? Because that's the way they built them in England, and English engineers designed the US railroads. 
Why did the English build them like that? Because the first railways were also built by those who built the pre-railroad tramways, and that's the gauge they used.
Why did 'they' use that gauge then? Because the people who built the tramways used the same jigs and tools used for building wagons, which had that wheel spacing.


Why did the wagons have that particular odd wheel spacing? Well, if they would use any other spacing the wagon wheels would break on the old, long distance roads in England that had that same wheel rut spacing.
So who built those old rutted roads? Imperial Rome built the first long distance roads in Europe (including  England ) to interconnect its extensive Empire, and those roads (with new paving) are still in use today!

And the ruts in the roads? Roman war chariots formed the first ruts, which everyone had to match for fear of destroying their wagon wheels. And since the chariots were made for Imperial Rome they were all alike in their wheel spacing.

Therefore, the US standard railroad gauge of 4’-8.5” is derived from the original specifications for an Imperial Roman war chariot, which proves that bureaucracies will live forever.
So the next time you are handed a specification/procedure/process and wonder ‘what horse's ass came up with this?', you may be exactly right: The chariots of the Imperial Roman army were made just wide enough to accommodate the rear ends of two horses, or two horses' asses.

Now, the twist to the story: When you see a Space Shuttle sitting on its launch pad, there are two big booster rockets attached to the sides of the main fuel tank. Those are solid fuel rocket boosters (or SRBs), built by Thiokol in a factory in Utah. And the engineers who designed them wanted them a bit fatter, but they had to be hauled by train from the factory to the launch pad in Florida, and the railroad from Utah to Florida goes through a tunnel carved in the mountains, so the SRBs had to fit through that tunnel.


The tunnel is slightly wider than the railroad track, and the railroad track…., you guessed it, is as wide as two horses' buts.

So, a major design item from the Space Shuttle, arguably the world's most advanced transportation system, was conditioned two thousand years ago by the width of a horse's ass. And you thought being a horse's ass was not important!
As you can see, horse's asses controlled almost everything in the old days... and currently, horses asses in Washington control just about everything else!

UPDATE: Oh dear, it seems the whole story is a horse's ass itself. Tenpercenter RickB sends in this link to Snopes that debunks all the above. Oh was good while it lasted


The Friday OT: Nirvana; Heart Shaped Box

For some reason or another, Nirvana has been following me around all week. Heard them here, heard them there, switched on the radio Weds morning and 'All Apologies' greeted me instead of the usual bubblegum cumbia...that sort of thing.

So this week's OT is from In Utero, an outstanding album that's still uncomfortable to listen to even after all these years. 'Heart Shaped Box' is a difficult song but ultimately hugely rewarding.

Trading Post (mere nerves edition)

Profit taking in the smallcap juniors seems to be the order of the day, with gold trading as "low" as $1361/oz at one point before bouncing. Copper at a mere $3.80/lb, too...wowsers, I bet those mine managers are worried about profit margins.....

Rio Alto (RIO.v) down 4.4% at $1.31 with $1.27 the low this morning. The trouble with quoting in Lima is that you have to suffer the neuroses of Peruvian investors that can't seem to understand that stocks don't always go up the moment you buy them.

Fortuna Silver ( down 0.6% at $3.31 on the back of yesterday's production results (analysis of those coming up Sunday). Well blow me down, IKN subscribers are only up 294% on the original bang-on-the-table May 2009 reco at 84c now. Bet they're worried about where the next meal is coming from, too.

ECU Silver ( down 2.8% at $0.70 and sadly for Mexico Mike his sponsors stock is still underwater for the year...silver at $23/oz, too. Hey Mikey, why not pump your site sponsors stock to your naive flock again? You never know, it might just work this time :-)

U.S Silver (USA.v) down 3.9% at $0.49. This stock has been on the most tremenous run recently and was trading as high as 59c just yesterday. Looks like some chunky profit-taking going on here and is steep for sure, but those long shouldn't be sweating on this too much. It was getting way overbought on the charts, thta's for sure.

Alkane Energy (ALK.L) down 2.0% at 17.88. This is one of the stocks pushed at readers sans-cesse over at Tracy 'Goldilocks' Weslosky's corporate-sponosred pump site, Rare Metals Blog. Some commenter named 'casual observer' who gets a free ride to say whatever s/he wants will always manage to find a way of extolling the company's virtues to the blog's readership, but whenever a dissenting voice is added to the comments section it's immediately censored out. So let's check on how this dog has traded over the last five years:

Yep, basically nothing doing at the same time as the biggest rare earth rally in history. So what gives, Goldilocks? Who's the pumper and what sort of affiliation do they have to the company they constantly push at your sheep? Inquiring minds..... Oh yeah, Alkane just happens, coincidentally, to be a site sponsor over at Rare Metals Blog. Strange, innit?

Meanwhile, we're now on day three of  "Goldilocks Legal Action Watch" and still nothing heard from the wannabe bully and paid pumper Tracy Weslosky.

UPDATE: Ah whoops, crow to be eaten here. Commenter anon (original) leaves this below:
The company that sponsors RareMetalBlog and which has been mentioned by "Casual Observer" over there, is Alkane Resources (ASX.ALK), not Alkane Energy.
Which just goes to prove how little your author knows about REEs. So let's check on the correct company's 5 yr chart:

A nice recent move (though 6.6% off today). We can therefore use the flipside of the coin and congratulate 'casual observer' on his successful pumping :-). I'd still like to know their affiliation to the company, mind you. Goldilocks, any idea on that?

This week's edition of The IKN Weekly

IKN76 is out on Sunday October 17th and will include:

  • An in-depth report on our brand new buy recommendation that went out this week (as promised)
  • A fundamentals update on results from the stock we re-entered this week (we got results to catch up on)
  • A look at Fortuna Silver's ( results (note to haters: do yourself a favour and don't attack me for recommending a stock that's up 300% in less than a year and a start to look very silly by doing so).
  • Thoughts on a couple of real tiny minnow stocks that the higher-risk profiles might find interesting (though they're not going to get a formal reco nor my money, whuss that I am)

Those as well as the usual range of news and views on the LatAm region, checking the pulse of the other stocks we follow and like, comments pending from company CEOs, etc etc. The blog is Yin, the The IKN Weekly is the Yang where all the positive stuff goes on and people get moneymaking ideas.

The Financial Times' readership is smarter on Venezuela than its reporters

It comes to something when readers of one of the most outright capitalist mediums in the world give lessons on reality to its reporters on Venezuela. Today we've been treated to yet another "Oh Noes! We're all gonna die....soon.....probably" note on Venezuelan economics, penned by Benedict Mander of the FT. It's the samo samo as we've seen since lawd know when and filled with the clichés we're all used to:
  • Negative headline with use of question mark? Check
  • Hugo Chávez named in the first line to help with those search engine optimizations? Check
  • PDVSA's massive debt? Check
  • The "dollar crunch" that tends to affect the rich middle class more than the majority of Venezuelans? Check
  • Use of the phrase "dubious statistics"? Check.

So run along and read it, too, as a better template for YouTooCanBeAnExpertOnVenezuelanEconomy! will be hard to find. However, after reading through the thing your author was pleased to see that the only two commenters on Mander's note (so far Friday morning EST) have taken him to task on this trite piece of hackery. Here they are for your reading pleasure.
RossWild | October 14 11:29pm | If you don´t know 'how bad' why you titled the opinion "Just how bad is Venezuela’s dollar crunch"?? Are you expecting others respond to you?. I believe you write this article only for dark-politics purpose. Is your style anyway, i.e. is the way you obtain money

rodrigo.blanco6 | October 15 6:47am | You guys must be running out of things to write about. I've seen this same editorial written with different incidentals over the past 12 years of Venezuelan history.

Indeed. We're tired of the samo samo BS about Venezuela's economy, reporting herd. Really, the good story to write here is just how Venezuela has kept it's heterodox economic model intact for over a dozen years, with the post-PDVSA strike period particularly interesting. The story I'd like to read would be penned by some normally boring hack who's covered Venezuela for multiple years and begins, "For all this time my predictions on Venezuela's collapse have been wrong. Let's examine why that has been the case.." but there's about as much chance of that as there is of reading something resembling the truth about LatAm in The Economist.

Nadagold (NG) news


Your author has recently received two mails from his far northern correspondent, "Nome Eye in the Sky". Despite having every intention of sharing the first mail for some reason I forgot about it at the time, but what with developments yesterday and receiving a new mail from NEitS this morning, it's time to make amends. This first one was received on September 30th, now two weeks ago, and paves the way for part two:

The latest edition of The Nome Nugget ( headlines state "Rock Creek up for sale" - "Novagold  says need to focus on larger projects spurs decision".

This is no shock to the community, there has been speculation for months that this or the dismantling of the facilities was the most likely scenario.  So much for caring about their native partners!  The local joke about Novagold and Rock Creek is it's hard to make money at $1,200 an ounce. But if they can't make it in Nome at $1,300 an ounce, how in the hell are they going to make it at Galore Creek? I know, no drunk Nome miners!

But I see one Board Member and a Sr Exec did do some cashing  of stock before this is announce - as if it would affect their stock price.

There is an old saying in Nome that dates back to the original gold rush: money is made mining the miners or mining the people - or is it shareholders?

The Nome Eye in the Sky

So with that now set in place, here's the mail received from 'Nome Eye in the Sky' this morning (and thanks go to NEitS from IKN) that comments on NG's 3q10 earnings release yesterday:

Well, they made it public, Rock Creek is for sale.  According to their website the project was not the "Right fit for their business model", which means after dumping how many millions of other peoples dollars in the project, we can't figure it out, we can't make money at $1,350 /oz..  A since deceased Nome local business icon would say a business models (or plan)  success is  based on three things - management, management, management.  Obviously something Rock Creek never had top down.  Be real interesting to see how their Nome native parters react, since they have always boasted their relationship with the native organizations as a key to their management success.

The Nome Eye in the Sky

It's a good point being made here. We're supposed to believe that a company like Nadagold, Rick! at the helm, is capable of moving forward a couple of the biggest gold projects in the world after noting their track record of disaster at Rock Creek. We're also supposed to believe Nadagold will be able to keep solid relationships going with Galore and Donlin neighbourhoods when their social record is little short of abysmal. The Brooklyn Bridge is still for sale, I hear. Why Brooklyn? That's because in the end NG is being mainly pitched at New York investors these days, not at anyone that actually understands something about mining. 

Final semi-OT: Rick Van Alphabet's total compensation package came to $5.45m in 2009, including over $1m in cold, hard cash. Nice work if you can get it and probably a tad above average for a junior exploration stage miner :-)


Chart of the day is.....

...Taseko Mines (TGB) five day chart.

"Always run stop losses", eh? Not when the sector is mining and thieves run the show.


Why you should read Toby Shute, too

Motley Fool's Toby Shute is a guy to have in your corner when it comes to Oil & Gas plays, as he's out there, being independent, taking crap from nobody and passing on the information gleaned to his audience, no extra charge.

Here's an example of how his eagle eyes can save you potential pain. A junior O&G trying to make itself out as something it's not? Cue owly and applause for the catch, Toby.

Hey, Goldilocks! We're still waiting for that legal action from your Rare Metals Blog to begin

On Tuesday afternoon, Tracy "Goldilocks" Weslosky of Rare Metals Blog threatened IKN with legal action (she also wrote that she'd "report me", though to whom is unclear....Eric Schmidt perhaps?) unless your humble scribe removed this post that contained the full article written by Mickey Fulp she'd censored from her site that morning.

Well Goldilocks, it's still there and you haven't started that legal action yet as far as I'm aware. So is it going to happen, cos I'm so worried about it all that I can hardly sleep at night? Or are you just another loudmouthed blowhard bully enslaved to the corporate site sponsors who pay for your blog? Inquiring minds.......

Unscrupulous liars who say they don't censor others while at the same time doing the exact opposite need fingers pointed at them. Tracy, you're a liar and this is a finger pointing at you. So come on Goldilocks, get on with that legal action.

Gold Fields (GFI) and Pan American Silver (PAAS) ( One thing in common, one thing different

One Thing In Common
Both Gold Fields (GFI) and Pan American Silver ( (PAAS) have plenty of mine worker deaths on their track records. Here's the latest from GFI, meanwhile the 14 deaths suffered by the PAAS workforce in Peru since 2006 (in many and varied accidents) are noted here.

One Thing Different
Gold Fields shuts down its operations to investigate the deaths on its shifts. Meanwhile PAAS  clearly doesn't give a rat's ass about the people it employs and just keeps the machine rolling, never closing down to investigate its long track record of negligence. 

The mining company I'd prefer in my portfolio is the one that at least tries to make an effort on its accident rate. The company I reject out of hand is the twisting bullshitters who hide the multiple deaths behind award gongs received in other countries from other mines. Ross Beaty, do you really give a damn? Is it all just for show and the money? C'mon dude, explain why so many people have died at your mines one time, willyaz?

Today's new listing, Riva Gold Corp (RIV.v)

It's called Riva, its ticker is RIV.v, once the recent placement is done it'll have 46.1m shares out (the placement was at 50c, with a half warrant at 75c to give you an raised something over $3m to get the company rolling).

The company gameplan? Explore Guyana. RIV.v has a bunch of land put together and it's going to do its exploration thing. As for the people behind it, RIV.v is being run by the dudes that made Ventana Gold ( into 2009's wild success, so expect thankful VEN shareholders to trust in this team enough to throw money at RIV.v. Also, the Can of Corn is running this show, so expect the promo to be slicker than slick (be that a good or bad be the judge).

So anyway, RIV.v starts trading in exactly thirty minutes from the time of writing this post so don't say you weren't given a headsup. Disclosure: no position.

Power growth in Peru

These charts document the growth (or otherwise) in electricity demand in Peru over the last three or four years, depending on the chart. First up the total demand per month, which is clearly on an uptrend.

click to enlarge

This next chart takes it a little deeper and shows the Year-over-Year (YOY) change in demand. It's pretty clear the recession hit the country hard, but this year the bounceback has been rapid and the previous growth trend is back on track.
click to enlarge

Things like electricity demands are far harder to fake than GDP numbers, but they follow the country's economy well enough. What the charts here say is that Peru bullshitted the world back in 2009 when it pretended not to be in recession and played fast'n'loose with the official stats to help the subterfuge. However, the country is doing well now. It also suggests that the current headline-making growth figures (GDP etc) are a one-time-only experience and as of next year, when Peru has to measure itself against the 2010 rebound, the GDP numbers won't be up there with China any longer but back to a more reasonable level. If the country can add at 5% per annum going forward, it would be a solid and likely sustainable rhythm.

Charts of the day are....

...about zinc, the one year price chart and the six month LMA warehouse chart.

Price is important of course, and the $1.08 and $1.09 per pound prices being fetched this morning are quite a move away from that recent sticky $1 barrier.

But this warehouse inventories chart has its own interest. Stocks have stayed high all through the metals run so far, but there's now more than a hint of things lower to come. DYODD and think zinc, dude.

Charts from kitco base metals, bless em.


Fortuna Silver ( The Can of Corn upgrades target

if you look very very closely you may be able to spot a trend

This morning, Nicholas CampbellSoup over at the Can of Corn raised his target on Fortuna Silver ( to $5.00 (was $3.90) on the back of surging silver prices....and the fact that FVI is a kickin' silver mining company as well, of course. You too can read his report, kind and gentle IKN lector, by clicking here and downloading the PDF. Please be having nice day.

A Flash update...

...was sent out to clients today, too. About five minutes ago, in fact.

South American Silver (

Wow, just look at that baby go!

Not often do you get so many people led up the garden path by a single pumper. Lawrence Roulston may know something about pumping juniors in frothy markets, but he's lacking when it comes to Bolivian political risk and the people who follow him really don't know what they're letting themselves in for....yet. IKN subbers know more, though, and know the potential timelines, too. We suggest those lucky enough to be on this elevator take their profits, as dumb luck beats market knowledge every time.

Disclosure: No position yet. Maybe soon.

UC for Dummies: A free offer

Unified Communications, or UC, is one of the latest business buzzphrases out there and according to wikipedia is "the integration of real-time communication services such as instant messaging (chat), presence information, telephony (including IP telephony), video conferencing, call control and speech recognition with non-real-time communication services such as unified messaging (integrated voicemail, e-mail, SMS and fax)."

Which is all very well, but how can you take advantage of this and make yourself more moolah? Well that's where this free offer comes in. From the quality "For Dummies" stable, it'll teach you how to get moving with UC and give your business the advantage over others. So just click through, sign up (it's 100% free and they won't get boring and ask for credit card's free free free) and get smart. Here's the blurb:
Small Business Unified Communications For Dummies, Avaya Custom Edition

Receive Your Complimentary eBook NOW!

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Understand the benefits of Unified Communications and how it can positively impact your small or medium business.
Small Business Unified Communications For Dummies, Avaya Custom Edition, provides non-technical readers such as small business owners and key managers an in-depth overview of UC: what it is, what capabilities it can provide, what a small business needs to do to implement it, and how it will impact your business. Read this eBook to learn:
  • What Is Unified Communications and Why Do I Need It?
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Offered Free by: Avaya
Other Resources from: Avaya

Joyous News! Brazil fixes its illegal logging problem once and for all!

Good news for the price of timber, good news for those fighting illegal logging, good news for everyone except for those human beings who prefer to breath oxygen in their air, in fact. Brazil's brilliant plan to stop the wholesale rape of its rainforest allow it to continue, just make it legal! Here's Mongabay with the story.

Brazil will auction large blocks of the Amazon rainforest to private timber companies as part of an effort to reduce demand for illegal logging, reports Reuters.

The government will grant 1 million hectares (2.5 million acres) of logging concessions by the end of the year, according to Antonio Carlos Hummel, head of Brazil's National Forestry Service. Within four to five years, 11 million hectares will be auctioned.

Existing concessions cover only 150,000 hectares, yet Brazil is the world's largest producer of tropical timber, mostly due to illegal logging on the poorly governed forest frontier.

Continues here.

Mining PRs and the Ottotrans™, Part 29

Today, we look at the NR released just a few minutes ago by Pan American Silver ( (PAAS).

This is what they wrote:
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 13, 2010) - Pan American Silver Corp. ("Pan American" or the "Company"), (TSX:PAA)(NASDAQ:PAAS) is pleased to report that its two Mexican mines, La Colorada and Alamo Dorado, have received the prestigious 2009 Casco de Plata (the "Silver Hardhat") safety awards. The awards are granted annually by the Mexican Chamber of Mines (CAMIMEX), to the safest open pit mine and underground mine in Mexico.

The La Colorada mine won the 2009 Casco de Plata in the category of underground operation with more than 501 workers. La Colorada currently has approximately 669 employees and contractors. The Alamo Dorado mine won the 2009 Casco de Plata in the category of open pit operation with fewer than 500 workers. Alamo Dorado currently has approximately 280 employees and contractors.

Commenting on the awards, Steve Busby, COO said, "We take great pride in the safety record at our Mexican operations. Both our Mexican mines are consistently ranked among the safest operations in the country. CONTINUES

And this is what it means:
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 13, 2010) - Pan American Silver Corp. ("Pan American" or the "Company"), (TSX:PAA)(NASDAQ:PAAS) is pleased to report that its two Mexican mines, La Colorada and Alamo Dorado, have received the prestigious 2009 Casco de Plata (the "Silver Hardhat") safety awards. The awards are granted annually by the Mexican Chamber of Mines (CAMIMEX), to the safest open pit mine and underground mine in Mexico.
The La Colorada mine won the 2009 Casco de Plata in the category of underground operation with more than 501 workers. La Colorada currently has approximately 669 employees and contractors. The Alamo Dorado mine won the 2009 Casco de Plata in the category of open pit operation with fewer than 500 workers. Alamo Dorado currently has approximately 280 employees and contractors.
Commenting on the awards, Steve Busby, COO said, "We take great pride in the safety record at our Mexican operations. Both our Mexican mines are consistently ranked among the safest operations in the country. On the other hand, we don't give a rat's ass about the workforce in Peru, as is clear from the current government statistics. Since 2006 we've seen 14 deaths from accidents at our mines in Peru. But hey, who gives a damn, right? Only miners."

Chart of the day is.....

...the reason why Eric Sprott is buying up all the silver juniors he can lay his hands on. The gold/silver ratio.

 Looks like it's travelling back to 50X now, doesn't it? Or no? You be the judge!

And I admit it; last night Chez Otto watched live as the first two miners came out that hole and it was pretty cool. We even sat thru some of that Piñera blahblah before the cynicism kicked in again. Very happy for them and the rescue teams deserve medals.


Press freedom, Peru style

Peru today has seen some pretty blatant press gagging, all due to the strange episode we at IKN covered on Sunday. In that post we explained how President Alan Garcia had slapped a young man in the face after the 25 year old had called him "corrupt" (truth hurts, it seems).

Over the last couple of days, Twobreakfasts has tried to deny it all and has even said that he did confront and shout down the young man, but didn't hit him. However, tonight it seems like his enthusiasm for keeping his lie at the forefront of the issue has led to some dramatic program changing on Peru's TV.

First up, the journalistic team of the weeknightly show "Enemigos Publicos" (Public Enemies) has reportedly resigned, because after getting an exclusive interview with the man slapped their report has been yanked off the air due to a decision by "a high-ranked director" of the TV station that runs the show.

Now, just a few minutes ago we hear that top-rated nightly show "El Francotirador" (The Sharpshooter) starring author and potential Presidential candidate Jaime Bayly has been pulled off the air as of tonight and in a definitive way (it was contracted to run until December) after the Francotirador team met with station chiefs this afternoon. The reason for the sudden decision to stop the show is not yet clear and in the past few days there have been some pointed remarks made by Bayly towards the channel's owner, but if you believe that today's decision has nothing to do with García's slapfest and the resignation of the rival show's reporting team, then I have a bridge you may be interested in purchasing.

In a corrupt Banana Republic, the country needs no laws to gag the press. All that needs to be done is a phone call from politico to millionaire media owner. The truth is out there, but the public don't get to hear about it until it's too late. Two national TV shows disrupted tonight because Alan García is a liar. 

Pisco sours served. The end.

A Flash update...

...has just been sent to subscribers.

Re-post: Peru's dirty little mining secret is getting bigger and dirtier

This article, first published here on September 30th, is getting a re-airing due to popular demand. It seems that there are a few mining sector investors who care about these things after all, not just psycho-obsessives such as your humble scribe. 


Peru's dirty little mining secret is getting bigger and dirtier

This, quite honestly, beggars belief. Yesterday's Peru metals production figures bear witness to the ongoing environmental disaster that is the Madre De Dios Amazon Basin region, the wholesale rape of one of the world's most ecologically sensitive regions and the utter tripe and two-faced lies spewed by President Alan Garcia, his lying toady of an Environment Minister Antonio Brack and the total disregard Peru has for anything except genuflexion at the altar of growth and short-term profit.

Here's the updated table, which shows....
...that the Madre De Dios (MDD) region produced 1,618,380 grams (52,038 ounces) of gold in August 2010, a new monthly production all-time record for the region. Production is up 12.7% YoY and at current spot prices that gold is worth some $68m or so....for one month.

Even more telling is this next chart, that shows the percentage of MDD gold to the total produced in Peru every month. Because of the drop in gold production in the big mines in the North of the country (as noted yesterday) Peru's mining industry and exports statistics are evermore dependent on the gold coming out of MDD. Last month the percentage of gold from MDD to the total shot up to a new all-time record of 13.02%, over a full percentage point higher than the previous record and a mile above the typical 10% range.

IKN now directs your attention once again to that April 2010 drop in production at MDD. This is because for just a couple of weeks, world attention (via a couple of reporters and articles) was focussed on this disaster area and the government pretended to clamp down on the illegal and immoral industry. It was the month Minister Brack pretended to wring his hands and do something about the problem, saying things like....
"This is not small or artisanal mining. This is large-scale mining camouflaged as small mining and these dredgers generate destruction in the ecosystems of rivers, impede the reproduction of fish and dump mercury and waste into the rivers." he promised to clean up the MDD region and punish the wrongdoers. So as you see, Brack is fully aware of the problems and the deep damage that's being done to the ecosystems of MDD. But as the current production figures clearly state, he's done absolutely nothing to stop the disaster. On the contrary, it's now even worse...I mean, what do all-time record production figures say to you? Brack is a liar and a scoundrel of the highest order and should hang his head in shame.

As for South America's most unpopular president, the unspeakably bad Twobreakfasts said this to soothe the world and provide "oh yes we care" soundbites at the time:

"We want to stop informal mining from poisoning the rivers of our country, from destroying the environment, from enslaving young people and child labour. (This makes us) look like a backwards nation in the eyes of the world."
"What's happening in Madre De Dios is atrocious, the rivers are the colour of mercury, of arsenic. This is dramatic and this is not only registered in our country but it also reaches Brazil. We may at any moment be judged internationally because of allowing a chaotic activity."

"One day Brazil may organize a protest against us because everything that leaves Madre De Dios ends up in Brazil and finishes in the Amazon River in some way or another. How will be able to defend ourselves for having allowed such savage mining?"

"What we will do with Minister Brack is show that the State wears the pants and can decommission these dredgers to stop them working in the worst of these manners".

As is 100% clear, it was all talk and no action. The hypocrite has turned his back on the problem and just wants to keep counting the filthy lucre that it generates. And yes, I hope Brazil and the world sues you fat lard ass one of these days, you doublespeaking rat.

This is Peru 2010, ladies and gentlemen. Ruining the world for the sake of its desperation for growth. When the subject is "growth at all costs" there really is no better example than this scandalous industry in MDD and the equally scandalous government that allows it to continue.IKN leaves you with a few photos of what used to be Amazon basin jungle:

Has Rare Metals Blog censored Mickey Fulp?

Yesterday in this post, we left the link to a great article written and published by Mickey Fulp over at Rare Metals Blog. However, this morning the post seems to have disappeared. Why that should be is currently unclear, but as the post did take a couple of REE companies to task and point out their weaknesses the suspicion here at IKN Nerve Centre is that it's been censored by the blog owners. 

We'll get news on that if we can, but in the meantime, here's the whole of the post as written by Fulp. Google cache rocks.

I read with interest the recent blog from respected engineers in rare earth element space, Jack Lifton and Gareth Hatch. These two men are experts and likely have forgotten more about the process metallurgy, separation, refining, sales, and marketing of this fascinating specialty metals group than I will ever know.
I can agree with many of the points that each makes in his analysis. I will not quibble with the idea that “small” is okay in REE space but will disagree with Jack that small is somehow better.
That said, as a field geologist by education and experience and an analyst and investor by profession, I think both gentlemen are missing key criteria for success by not carefully considering the share structure, people and projects of their top stocks before picking them as favorites. There is much more to the REE game than deposit size, metal distribution, process metallurgy and concentrate tonnages.
I would suggest that most readers of this are speculators in the junior resource sector attempting to learn about the best companies so they can invest and make money in the stock market. Thorough due diligence is always required to assess a company’s chances of success.
Let’s look briefly at some of the companies favored by Jack and/or Gareth:
I visited Ucore Rare Metals’ (UCU.V) Bokan Mountain project in mid-August along with fellow Rare Metal blog editors Jack Lifton and Tracy Weslosky.
The Dotson Ridge deposit is small with low TREO (total rare earth oxide) grade but heavily skewed toward the HREOs (heavy rare earth oxides). The individual mineralized zones are very narrow (generally less than a mineable width of 1.5 meters) and are discontinuous along strike. The deposit will require selective mining and/or physical or mechanical separation of pay zones from wall rock using very high cost mining methods.
The company apparently is reluctant to commence the next logical step: Permitting, test mining, and bulk sampling during the 2011 field season. I must conclude the sole corporate exit strategy is to sell the project but have doubts that any larger player in the REE sector is seriously interested at this juncture. With current knowledge, the Bokan Mountain project is not viable. I agree with Jack that it will require private or government subsidies if a significant deposit can be delineated and if it is ever mined.
As of June 30, Ucore Rare Metals had 105.4 million shares outstanding, 134.0 million shares fully diluted, 24.5 million warrants at an average price of 26 cents, market cap of about $65 million, and $4.4 million in cash and securities. The company must go to the market for financing later this year or in early 2011. Ucore Rare Metals’ share structure is highly diluted given the stage of its flagship project and the potential for a significant increase in its share price is therefore limited.
The second company Jack discussed is Great Western Minerals Group Ltd (GWG.V). Great Western is the only current North American junior with a partially integrated REE business via its Less Common Metals alloy facility in England and what appears to be an R&D lab in Michigan.
I do not think any of the company’s exploration projects currently are candidates for development and mining. Hoidas Lake is too small, low grade, remote, and infrastructure-challenged to be of interest to outside parties. Others are very early stage, remote and/or too low grade.
Steenkampskrall in South Africa is a small, narrow, high grade vein deposit that was mined from 1952-1963. If it eventually proves to be of sufficient size and grade, the mine likely will be operated at a loss to secure supply. Its high thorium content could be an environmental issue. GWG has signed an off-take agreement to purchase the REE mineral concentrates from owner Rare Earth Extraction Co. of South Africa and currently holds a 20% equity interest in that company.
GWG recently announced a $35,000,000 equity financing at 33 cents with a two year half warrant at 45 cents. With another 106 million shares out and 159 million fully diluted, I address the crux of my issues with Great Western Minerals Group: It has a severe case of “Aus disease”, i.e., an excessive number of shares outstanding. I first evaluated GWG at a Toronto show in October 2007 and it had too many shares for my liking at that time.
Post-financing I estimate the company soon will have about 350 million shares outstanding, 451 million fully diluted, a market cap of $125 million, and $38 million in working capital post-financing.
Compare GWG with the share structure of Quest Rare Minerals Ltd (QRM.V): After completion of its new bought deal financing, QRM will have about 53 million shares outstanding, 64 million fully diluted, a market cap of about $250 million, and about $55 million in the bank; or Rare Element Resources Ltd (RES.V; REE.AMEX) with 32 million out, 39 million fully diluted, a market cap of $270 million, and about $8 million in working capital.
I opine that Great Western Minerals Group has diluted beyond being a vehicle for speculative investment. A big share rollback (5 or 10:1?) appears inevitable for Great Western Minerals Group. Note I have never experienced a rollback that was beneficial to current shareholders.
I know some about Gareth’s suggestion, Alkane Resources Ltd (ALK.ASX). The Dubbo project may become a mineable deposit for zirconium and rare earth elements but development has been pending for two decades. As of June 30 Alkane had A$8.5 million in the bank and requires a large capital infusion to complete its goal of a definitive feasibility study, environmental assessment, and mine financing within one year. Capital expenditures to build the mine and processing complex are estimated by the company at A$150 million. The deposit has significant uranium content and that could be problematic since uranium production is prohibited in New South Wales. With ALK’s significant gold projects, Dubbo could be acquired by a specialty metals miner, Zr or REE consumer, or perhaps spun-out as a stand-alone entity.
Alkane is not a company that is likely to attract significant North American speculative interest due to the difficulty of trading Australian-listed stocks in this hemisphere. As per usual, it has a mild case of “Aus disease” with 249 million shares outstanding but with a healthy current market cap of about A$210 million.
I think most savvy North American investors will play on our own terra firma and leave this speculation for those that speak English with an oversized twang, drink beer from oil cans, and waltz with sheilas.
Gareth also mentions Stans Energy Corp (RUU.V). My problem with this company is reflected in its name: Stans’ flagship project is in a country that ends in “stan.”  It’s Kyrgyzstan, a country that had a violent coup, street riots, and ethnic fighting this spring and summer. I will steer clear of companies operating in any of the “stans” for obvious geopolitical reasons.  
The Luxemburg-based company, Frontier Rare Earths that Jack writes about is new with little public information available. It holds the Zandkopsdrift deposit in South Africa and recently applied for a Toronto Stock Exchange listing. I have not found sufficient information to comment.
In my opinion most of the companies discussed above have projects of merit in rare earth element space. That does not imply I will consider them for speculative investment using my key criteria for investing of Share Structure, People, and Projects and employing my Power of Two philosophy.
I will let you decide which are worthy of your speculation. As Otto sez: DYODD dudes and dudettes!
P.S. I own shares of Quest Rare Minerals and Rare Element Resources. Quest is a sponsor of my website.
Ciao for now, 
Mickey Fulp

IKN UPDATE: Confirmed, Rare Metals Blog has pulled the article. More on this later.

UPDATE 2: OH GOODY!! Your humble scribe has just been threatened with legal action by Rare Metals Blog! We'll have a full rundown of the fun and frolics going on behind the scene in a post tomorrow. Until then, when the appearance of our coffee-sipping soldier is a near-certainty. Might be able to get owly in there, too...

As of this post, IKN is officially a Chile Rescue Porn Free Zone

The 33 miners will get to come out as of this evening. I recommend Setty as a place to follow news, not least because he's actually there on site and blogging it (five good posts already up there and waiting for you) but also because he's way smarter than the average hack. Either that or all the mainstream outlets that will be covering this Rescue Pornfest, but it's not getting any more coverage at IKN as of this post. I'm utterly happy that the 33 miners are getting out alive but the overhyped circus is now boring.

Goldcorp (GG), Guatemala, Marlin, Criminal Charges and general country risk

The following is excerpted from IKN75. We tend to excerpt from the 'Regional Politics' section of The IKN Weekly more than the other parts (Fundamental Analysis of Mining Stocks, Stocks to Follow, Copper Basket, Market Watching) because info contained in the other bits usually pertains to companies we cover or recommend, so it's only fair paying subbers to keep that from the blog. But 'Regional Politics' serves its purpose in the Weekly as well, trying to spot trends and anticipate actions taken by governments that affect the playing fields further down the line. So here are your author's thoughts about mining and Guatemala from last weekend's edition, starting with the current issues faced by Goldcorp and then expanding. DYODD.

Guatemala: Environment Ministry Files Criminal Charges Against Goldcorp
Strangely enough (!) it’s been hard to find a decent English language news report about the action taken against Goldcorp (GG) by Guatemala’s MARN Environmental Ministry last week, but here’s a link to a translation done of one of many Spanish language reports (6) and here’s an excerpt:
Luis Ferraté, Minister of the Environment, has presented a criminal accusation to the Public Ministry against Montana Exploradora [Goldcorp Inc], insisting on an investigation into the discharge of residual waters from the tailings pond at the Marlin mine in San Marcos, because it may contaminate the Quivichil river.
The accusation, received by the Ministry on September 28, states that on September 23, the Marlin mine, owned by Montana, a subsidiary of the Canadian company Goldcorp, discharged water from its tailings pond and that this water may cause heavy metal pollution.
 The commentary after the report above then descends into “You Lie!” “No, You Lie!” etc, with GG denying and MARN assuring that GG had no right to discharge waters from its near overflowing tailings pond (due to recent rains) in the dead of night. There are better reports available in Spanish language (7).
However, be clear that this is a significant move on the part of Guatemala. The Marlin mine has long made the more polemic headlines of course, but this bringing of formal charges against the company by a government ministry is a different level from NGO accusations and GG platitudes. Frankly, our concern is less with Goldcorp at Marlin and more the general political risk atmosphere in Guatemala. The country is attracting attention from both sides of the mining sector, with the companies now looking at the country and its prospective regions with fresh eyes (note Tahoe, note Radius (RDU.v) and also the anti-mining activists looking upon it as a battleground laid out. With the government suspension of all new concessions and permits still in place (it’s been there a long time and the debate is now on to allow mining or not), the move made by MARN last week will strengthen the hand of those who would make the permitting ban more permanent. Personally speaking, I wouldn’t touch a Guatemala exposed project with a barge pole, no matter how good the rocks might be.

Why did Endeavour Silver ( drop last Thursday?

Easy: Cos the market can't be bullshitted as easily as company management would like to believe. Here's the updated production evolution at for silver and for good measure, the silver equivalent table that adds in the gold produced (at a generous 65:1 ratio).

click to enlarge either chart

Note the 3q10 columns there, with the numbers coming from this NR published by on Thursday morning. That announced 3q10 production of 797,054oz Ag and 1,096,509oz AgEq compares with the 2q10 numbers of 825,439oz Ag and 1,115,404oz AgEq for 2q10, but for some strange reason EDR forgot to mention the 2q10 numbers in its news release. Instead, the NR had a nice spin-fest of a headline (this was up, that was up, ain't life beautiful) but nobody was fooled, really. Especially the people that bothered to check back to the 2q10 MD&A and read that....
Silver production remains slightly ahead of schedule for the year. Similar to 2009, the first two quarters of silver production in 2010 were scheduled to be relatively flat, as we focused on mine development and plant expansion capital programs. Silver production should start rising again in the Third and Fourth Quarters, 2010, as the new ore-bodies under development during the first half of the year at Guanacevi and Guanajuato to enter into production.

IKN highlights in red and then cues owly:
DYODD, dude.