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The Berk Hath 2011 annual report

You've read the previews, now read the real thing. Buffett's annual lump of homespun came out just a few minutes ago and is available to read right here. 

Cherry cokes served, the end

Five days of metals and miners: Feb 25th

It's Saturday again, so here we are with the last five days' worth of action in the gold bullion ETF (GLD), the silver bullion ETF (SLV), the miner ETF (GDX), the junior miner ETF (GDXJ) and the copper ETF (COPX)

1) Silver wins
2) The others did pretty well, too.
3) The end


The Friday OT: Zepparella: When the levee breaks

As a rule I'm no big fan of tribute bands, in the same way that a print of a work of art isn't art, it's a print. But this is one magnificent exception to the rule.

Just an absolutely cracklingly, wonderful top job of just about my fave LedZep track (at worst in the top five, mail for further details if you care enough) that nails the song stone cold. I hope you enjoy it as much as I've done in the last 48 hours.

The Buenos Aires train crash

We followed the events at Once station in downtown Buenos Aires, Argentina on Twitter when news started to break about the train crash that has left 50 dead and upwards of 700 people injured (some still in critical condition), but as soon as the news grew to international headline size this mouse-voiced blog let the issue drop. However, two days later there is something I feel like pointing out. Of the 50 dead, six of the people were Paraguayan, three were Peruvian, two were Bolivian and one was Chilean. Or in other words, nigh on a quarter of the deaths were suffered by foreign nationals living and working in Buenos Aires who made the commute to the centre from the generally respectable but less well-off areas of Southern Western* Gran Buenos Aires.

I still don't know what to make of that statistic and I'm certainly not trying to lay blame (the current situation in Argentina, as no South American country I know of does anguish better than the Argentines) or saying that any one death is less or more lamentable than any other. It just strikes me that Buenos Aires, a cosmopolitan city to which people migrate in order to try and get ahead in life, is more of a part of South America than its native born residents would normally admit. 

Random musing over. Sincere condolences to any and all affected directly by this accident.

*ty to Ariel in the comments section for the prompt correction

Then there was the one about how the Euro was about to crash and burn...

It was all that "Euro breaks 1.30 and it's going straight to parity with the dollar. Bet that made you laugh...

Best to remind TA Voodoo People just how much they blow, as they're not going to tell you otherwise. The fact that their soothsaying is right on occasion is not the point. In fact these idiots are right almost exactly 50% of the time because all they offer is a plain, classic random walk. Mind you, I kind of admire them for actually being able to get paid for what they do. Hey guys, this one's for you (and it kicks ass, too)

Guyana Goldfields (

Your humble scribe has received more than one (five six to be exact) mails asking for an opinion on Guyana Goldfields ( this morning, due to the combo of

1) ....the publication of its feasibility study before the bell on the Aurora project and...
2)...the wholesale dumpage of the stock as a result (see this chart):

 13% down at the bell today and dropping fast

As it happens is a stock I've watched from the sidelines for a couple of years (traded it once successfully, but sold way too early and haven't returned since then) and nowadays I need to get up to speed on the story, though I did note that the 8k tpd throughput plan in the full feas today is lower than previously expected, so that might be the issue here. Therefore it's time to have a better read of the plan and the backstory....hold that thought, yeah?

Meanwhile, we're all waiting with bated breath for the opinion of Louis Lobito James over at Casey Research, as he's had as a recommended buy since June 2011 at a price of $8.69. Surely his informed opinion on today's news is more relevant, as he's the dude with clients underwater on the stock.

UPDATE: Brad Humphrey of Raymond James puts on a brave face, but is right to highlight the thin-looking base case IRR as a problem, methinks. Here's the cover letter to the PDF RayJames just sent out (and I have no idea where you could possibly get a copy of the full PDF, oh no no no no...)

RATING Outperform 2
Closing Price C$8.40

Event: Guyana Goldfields released the results of its feasibility study for the Aurora project in Guyana.
Analysis: While overall the results were not as robust as we were anticipating (see table below), there remain areas for some optimization. Ultimately, with the known scarcity of projects producing at a rate of 250koz per year at cash costs of <$600/oz (Aurora study suggests ~$520/oz), in a geopolitically stable environment, Aurora remains an attractive takeout (our primary thesis).
Points to Note:
* While the initial capex is modestly higher at $525 mln, this is sized for a 9,500tpd throughput instead of the planned 8,000tpd. Post-feasibility we anticipate the capex could decline ~10%. The 9,500tpd CAPEX is roughly 16% higher than we were forecasting, resizing to 8,000tpd the CAPEX comes in around 6% higher than our forecasts.
* The after tax IRR (at $1,300/oz gold and $100/bbl oil) comes in at 12.7% - it appears this IRR includes the 9,500tpd capex. We expect the revised capex could add ~1-2% to the IRR. We were hoping for something approaching 20%. After tax IRR at $1,775/oz and $110/bbl oil stands at 23.6%.
* The sustaining capex increase is significant - ~$300 mln vs our $181 mln.
* The decrease in underground grade is also a concern from the resource grade of 4g/t to the feasibility grade of 3.3g/t.
* We assume an additional ~1.5Moz LOM given, we believe, the potential to increase the resource is good.

Chart of the day is...

...the latest from Mitofsky on the Mexico Presidential elections:

And when it comes right down to it, the story here is:
  • Enrique Peña Nieto (PRI) at 40%, basically unchanged from earlier this month
  • Josefina Vázquez Mota  (PAN) at 25%, a point better than earlier this month.
  • AMLO (PRD) at 17%, a point worse than earlier this month

There's plenty more on the election on that above link, including a fat PDF file report to download. There's also all sorts of drama going around about the private address current Prez Calderon gave to a bunch of bankers a couple of days ago when he said JVM was just four points behind EPN according to a government commissioned poll. But anyway, still early days here and official campaigning doesn't even start until March 30th.


Why Goldgroup Mining ( hasn't mentioned this very important public hearing on Caballo Blanco to its shareholders is a complete and utter mystery

You would have thought that a company such as Goldgroup Mining (, that has a lot riding on the local acceptance (or otherwise) of its Caballo Blanco project in Veracruz, would consider it material information that its main public consultancy meeting happened this week in the local area, but weirdly, bizarrely, inexplicably we haven't heard a peep out of the company. Why Keith Piggott and friends should be so reticent in informing its shareholders on how the proceedings is a mystery, especially as the gig made headline news locally. However, IKN comes to the rescue (hoorah!!) of monolinguals who may be long right now with the translation of paragraph one of this report on how the hearing went. The report is a long one and well worth reading in full because the reporter does a good job in covering all the issues as debated in the hearing and also makes sure both sides of the debate get their say in print. Anyway, here's para 1 translated:

Tension Rising in Veracruz for Caballo Blanco
Denials as well as justifications of economic well-being were polarized between governmental and private sector opinions regarding the Caballo Blanco mine. Ecology groups talked of a serious environmental deterioration in the zone due to the extraction techniques and protested against the polemic project. The key moment in the meeting held in Actopan on Wednesday was when the Consultative Council for Sustainable Development, Vercruz Area (Consejo Consultivo para el Desarrollo Sustentable Núcleo Veracruz, CCDN núcleo Veracruz), a citizen's body integrated to the Semarnat (the national government office The Secretary of the Environment and Natural Resources) demanded that the Federal authorities decide on a resolution of "Not Authorized" to the Environmental Impact Study (EIS, known as 'Manifestation on Environmental Impact' (MIA) in Mexico) that had been presented by the company, Cndyming SA de CV.
The CCDS núcleo Veracruz stated that the NIA presented by Goldgroup Mining and its subsidiaries is inconsistent and with erroneous data regarding the importance of vegetation in the Cerro de La Paita.

IKN back and make sure you read the whole report here for more. What, you don't understand Mexican? And you're long And Piggott&Co won't tell you any more about what went on and you want me to translate more? Oh dear.....

Hey, ever get the feeling that investing in what's essentially a permitting play and not knowing what the hell is going on in the permitting process might just be a slight disadvantage?

disclosure: No position in, not long, not short and no plans to change that situation. What, you think I'm nutso?

Mining PRs and the Ottotrans™, Part 55

In the last installment of this occasional series we managed to cut a looooong NR down to just three words, so this time around we're going to keep with the minimalism and reduce the NR from Augusta Resources (AZC) ( out this morning down to the same count of three words. 

This is what they wrote:

Augusta Provides Permitting Update on its Rosemont Copper Project

DENVER, CO, Feb. 23, 2012 /CNW/ - Augusta Resource Corporation (TSX/NYSE Amex: AZC) ("Augusta") provides an update on the U.S. Forest Service (USFS) draft Environmental Impact Statement (EIS) regarding review from the regional Environmental Protection Agency (EPA) for its Rosemont Copper project.
The San Francisco Environmental Protection Agency office is the final agency to submit comments to the USFS on the draft EIS, joining the 25,000 comments of which approximately 10,000 have been characterized as form letters or duplicates by the USFS. The EPA review was provided approximately 30 days past the official close of the public comment period, due to a request from the EPA to the USFS for additional time.  The receipt of these comments now allows the USFS to complete its response to comments, and a final EIS for the Rosemont Copper project along with the Record of Decision.
"This is a standard part of what a regional EPA office does," said Rod Pace, Rosemont Copper's president and CEO. "It's part of the rigorous review process that leads to a robust final EIS required by the National Environmental Policy Act."
The next steps for Rosemont Copper will be to finalize the air and aquifer protection permits by the State of Arizona, complete the Fish and Wildlife Service consultation process and develop the draft mitigation plans for species protection, mine reclamation and site closure. Much of the technical and analytical work to complete these next steps has already been completed and peer-reviewed, including hydrology studies and air modeling for the project site.  The peer-review process has been on-going for more than two years.
"Our leadership has always understood that our project would receive the highest scrutiny from all local state and federal agencies," Mr. Pace added. "We want to build a mine, using the latest technologies and highest standards for conservation and protection of air and water resources. The extensive review of the draft EIS by the EPA, as well as all of the other commenting agencies, produces the input needed by the USFS to produce the most defendable final decision documentation possible."
In addition to the final comments on the draft EIS, the EPA is continuing its role to provide comment on the ACOE's 404 permit application for Rosemont Copper. The EPA has submitted a 3b letter, which was issued last week, allowing the EPA to preserve their position for future discussions and negotiations as the final Section 404 permit documentation is drafted. An outline of the review/elevation process is included at the end of this press release.
The Rosemont team is committed to work with the USFS, ACOE and EPA to ensure that all questions are answered fully and successfully and that the project meets all standards addressed by the more than 300 studies and technical reports conducted over the past six years.

And this is what it means:

More EIS delays

The Fraser Institute Mining Survey, 2011/2012

It's just out and you can get your copy of the 131 page wodge of mining fun by clicking this link right here. For your interest, this is what it says about Latin America in the executive summary:
Latin America’s average score continues to decrease, this year dropping from 34.3 to 29.6. This is a far cry from the 2005/06 survey, where the average score for that continent was 51.2. Venezuela, Guatemala, Honduras, and Bolivia pull the average down. There were also disappointments in Latin America for its top scorer, Chile, now at 18th, down from 8th last year, and its most improved jurisdiction, Colombia. In 2006/2007, Colombia scored 24.6 but climbed to 51.2 in last year’s survey. This year it scored 38.0, suggesting continued uncertainty in the mining community about policy and policy stability in Colombia.

Anyway, you should read the whole thing. Thanks given to reader MM for the headsup

Chart of the day is... that compares gold (via GLD), silver (via SLV), Fortuna Silver ( and Rio Alto Mining (RIO.v) from mid-September to now:

Choose your own start date if you like, but the stocks look even better on a six month or 12 month chart..

Meanwhile, as a special bonus prize, Setty sends in this and it's only right to share a bit of puerile humour on occasion.

Please remember that the British prime minister is a posh English queen and he has his own dick up his arse. It helps the comprehension of news out of Europe immensely.


Rumour (update: rumour denied): Alberto Fujimori dead

We know he was taken to hospital from his jail cell this morning, but the rumour now flying around is that Ex-President Alberto Fujimori of Peru has died. AT THE MOMENT THIS IS UNCONFIRMED and we'll be watching for news and bring you an update as soon as the rumour is denied or confirmed.

UPDATE: the move from jail cell to hospital this morning was for an emergency, that we now know. Still no news on the rumour that's growing by the minute in Peru.

UPDATE 2: Rumours still rife about the state of Fujimori right now, but no official confirmation either way at present. Meanwhile this translated from this report in Peru's El Comercio published a few minutes ago:

"...the last two days he has had (cardio)vascular problems, according to his personal medic, member of congress Alejandro Aguinaga.

"His state of health has been complicated for the last two days, he's in evaluations....he has vascular problems which are not connected to his cancer. I'm currently with him" he said to El Comercio.

Aguinaga added that for the moment he could not give any more information.

UPDATE 3: The rumour has just been denied by a hospital spokesperson. However the hospital confirms Fujimori was transferred this morning under emergency status. No other details were offered up and there's still a shroud of mystery about the whole affair.

UPDATE 4: It's 3:35pm, four hours after this episode began and we can now file the story under the "And Fidel isn't dead either" file. Turns out Fujimori had a swelling and loss of feeling in his left arm and he's now back at his normal place of abode (you can hardly call it a cell more like a nice room that just happens to lock from the outside, not the inside). Not very pleasant I'd imagine, but better than death as that could really ruin your plans for the weekend. So ends another interwebnetpipes round of rumours.

Hugo Chávez's cancer

It's taken a couple of days for the noise to abate, the bullshit on both sides of this issue to die down and a bit  of measured, informed opinion to appear. For example, this post from Dr. Elmer Huerta dated Feb 21st, that we translate below. Huerta runs a blog that's good at converting medical-speak into real world language that allows us mere mortals to get to the bottom of a health situation or issue. Here's his post:

The recurring cancer of President Chávez

21st Feb 2012

One of the most valuable tools that we who try to bring health education to the public have is to take advantage of the illnesses of famous people. In these occasional posts at the blog, we have touched on diverse health problems of famous people (see archive). President Hugo Chávez has just announced his current state of health and this gives us an opportunity to look at what "recurrence of cancer" means".

What is a recurrence?
When a patient has cancer and is treated with one of the three modes of treatments that exist; surgery, chemotherapy or radiotherapy, either on their own or in combination, the objective is to destroy the cancerous cells that may be in the body so that they never return. If a previously treated patient shows new growth of a tumour, that is called a recurrence.
Recurrences can be in one of two forms; local (in the same location where the first tumour appeared) or at distance (in organs in other parts of the body). In the case of the second type, the recurrence is called a metastasis. Obviously, both types of recurrence are not good news for the patient. In general, the metastasis are more of a problem and more dangerous and the local recurrences are more problematic for the specific area. Even though recurrences are in no way an automatic death sentence, it is known that they greatly reduce the probability of a definitive cure. It's very true that nowadays many types of cancer have become chronic illnesses that can be controlled by diverse treatments over long periods of time.

The case of President Chávez
In a previous post we described what we knew about the operation and diagnostic facts about President Hugo Chávez of Venezuela in June 2011. It's important to note that due to the extremely hermetic circle around President Chávez we have never known exactly what type of cancer he is suffering.

Very recently, the President himself said, "...that he has a 2cm diameter lesion in the same place from where the tumour was extracted nearly one year ago." He said that he travelled last Saturday 18th February to Cuba for rigorous examinations where he was given this result. "I do not have metastasis anywhere", he said.

Firstly, let's do the count. From June 11th 2011, the date on which he had his operation, to this week, is only eight months and the objective of the operation was to totally eliminate the cancer. What's more, the objective to have given him chemotherapy which he received in Cuba and Venezuela was to eliminate any remnant of cancer, both in the location where the tumour started (in medicine it's called the primary location) and also in any other place in the body.
Therefore, technically speaking (and as explained previously) the problem that Mr. Hugo Chávez has is not a metastasis, as he himself has affirmed, but a local recurrence. What needs to be done now is to confirm whether that the 2cm tumour that has been found in the check-up is a malignant tumour similar to the one extracted in the first operation.

There are cases in which the extracted tumour looks just like a recurrent cancerous tumour but is in fact a non-cancerous benign tumour (this is very frequent in certain testicular and ovarian cancers).

Progression of the cancer
Another important concept in these cases in which there is an apparent recurrence is to define what's calles the progression of the illness. Here we enter into the concept of time. 
Imagine that a patient is operated upon for cancer and that in less then three months (a time frame on which experts agree) a local or metastasis recurrence appears. This very early an precocious reappearance of the cancer would indicate that the illness is progressing, that's to say there is a progression of the cancer. Obviously, this is a very delicate situation because it indicates that the cancer was never eradicated and it will advance without control.

To sum up, President Chávez is showing a local recurrence of his cancer at only eight months from his original surgery. He has correctly said that he does not have a metastasis, but has a local recurrence. What's left to know is whether this 2cm tumour is cancerous, which will be known after the operation that he will undertake in Cuba that he announced. We'll keep you informed on this.

Netco Silver (NEI.v)

One of the things we do over at the weekly is to highlight and feature stocks or companies that might be of interest without making any formal recommendation on them (because we have this old-fashioned theory about how people can in fact think for themselves and don't need to be spoon fed opinions and told how to think, but that's another story). Here, for example, is the piece that appeared last weekend in IKN146 (Feb 19th) on Netco Silver (NEI.v), a tiny little silver explorer doing things in Argentina right now. Now be clear that stocks get featured like this because they do have something going for them, but on the other hand your humble scribe does NOT own this stock (not then, not now) and is making no formal recommendation here. It's more of a headsup type of situation, a "hey guys, this one exists, waddya think?" kick-off that gives a start-off point for further DD by the reader, if s/he so chooses.

Anyway, here's the note from last Sunday:

That Neymar can't sing is an understatement

Couldn't hold a note in a bucket is closer to the truth. The situation:
  • Last night was the wrap up to Brazil's carnaval
  • The hottest song in South America right now is "Ai se eu te pego" (translation "I'm going to catch you), which you hear everywhere, not just in Brazil.
  • Neymar, new wunderkind of Brazil footy (eg scorer of world's best goal last year) is one of the guests of honour at the carnaval bash. That's him in the green up there.
  • He's invited by the band to sing the song.
  • Ouch

Well, I'm glad he has an alternate career lined up, cos pro-Karaoke just isn't in the cards here.

Chart of the day is...

...the gold/copper ratio, three years:

I do actually get this technical analysis game, or at least the idea of it. Boiled down, what you have to do is look at charts and from the patterns you see predict which way the squiggly line is going to move next. And here what I supposed to see is a ratio that's about to spring to the upside, right? MACD primed, RSI moving positive, moving averages pinching etc etc, all moving in roughly the same way as August of last year.

Yeah well, stuff it. It's bullshit. There's nothing there. Trading charts like this one above is like flipping coins, except that the people dumb enough to base their investments on chart mumbojumbo will conveniently forget about the times their soothsaying didn't pan out and only point to the times when the sawbones calls came up heads later on, accompanied, of course, by the arrogant hi-falutin' "told ya so" that only gets presented in different ways according to the general education level of the writer (which can get to university level on occasion, but let's face it, the whole concept of believing this smoke'n'mirrors crap means there's never going to be a Nobel prize winner doing the anal ysis).


News roundup (we celebrate a sunny morning)

Yay! My roof is drying out! So to business:

This is a really great article on the pros and cons of the blossoming Argentina fracking sector. If you're into O&G, it's a must-read (dated Feb 8th so I'm a bit late to it, but hey...)

Further to the Wong Fook Hing Book Shop post of a couple of days ago, reader RC sends in the world best Chinese/English translations. I can't choose between "the shrimp fucks the cabbage" and "fuck the certain price of goods" so maybe you can call a winner for me. It's all of a story too, straight out of the Monty Python's Hungarian phrasebook sketch.

Bolivia Weekly runs a report and a recipe link for False Rabbit (falso conejo), one of the better dishes in the Bolivian cookbook.

Heavy rains on the Peru/Chile border uncover land mines, that then get swept along to the sides of the main highways and blown up by the Chilean authorities. A reminder not to aim for the lumps and bumps while driving.

Chart of the day is...

...crude oil, NYMEX April contract, weekly, as many people telling me all about oil these last few days and how inflation and Weimar and QE and and and....

When it gets and stays past $115, it'll be time to talk.


OT: George Carlin on The Death Penalty

For some reason or another I've received quite a few comedy links in mails these last few days (perhaps my friends think I need cheering up) so I watched them all, liked most and....ended up searching for and watching George Carlin every time. So as it's a quiet day at the office, here's a slice of classic Carlin from 1996 to help share the love. There's nobody else like him and the middle chunk of this excerpt has the master in full flow.

And for true Carlin nuts (count me in, but you've guessed that already, right?), this link will take you to the whole 1996 HBO special show on one upload, all 62 minutes of it. Gotta love the interwebs.

In Peru, it's not the one percent...

It's the two percent. Positively Commie, no?

That top level A socio-economic group works out at around 580,000 people. Meanwhile if you lump(en) the Ds and the Es together it's over 20 million. Data from Peru's benchmark pollster, Ipsos/Apoyo and the report includes other funstuff, like how the As spend around 20% of their income on food while the Es spend 69% of theirs on the same, or how only 4% of Peruvians consider their income as sufficient.

Chinese proverb

Deep thanks to reader J who sent this in.

"If you are in a book store and you cannot find the right book, you are obviously in the...


The IKN Weekly, out now

There ya go, Ward :-)

IKN146 has just been sent to subscribers. It has over 14,300 words and it has photos of things, too.

Recommended post on current market action

I really liked the post entitled "So is this the end of the bull move or not?" over at Market Narrative today because basically I like reading smart people when they're being intelligent and offering different perspectives to an issue. Recommended reading, just click here.

Nose bandages

Calling a spade a spade