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Sunday October 5th 2014, 5:15pm local time, Nuñez, Buenos Aires, Argentina

Jean-Claude 'Baby Doc' Duvalier

I'm sticking with my immediate reaction on Twitter ...

...though wanted to add a few words so the blog is the medium. I was brought up by people and in a culture that states you shouldn't speak ill of the dead, which has become ingrained. It's not a bad thing, it's not a good thing, it's just a thing. This is about as far as my cultural constipation will allow me to go:

Ex-President of Haiti Jean-Claude Duvalier, known as Baby Doc, has died of a heart attack aged 63. He was country President while still a teenager (taking over from his father) and de-facto head of the Tontons Macoutes death squads that stood out as barbaric even by late 20th century Latin America standards. France gave him asylum for a long time, for which it should be totally ashamed as a supposedly civilized nation. He was never brought to justice for crimes he committed. He won't be missed.

UPDATE: Thanks due to reader FR for mailing in, a correction ensues: Baby Doc applied for asylum in France but never formally received it from the country. He did however live in the country and under its protection for nearly 25 years.


The Friday OT: Radiohead; Electioneering

It's Dilma Time:

Margin calls on mining stocks

Hearing plenty of reports of mining company investors, large and small, getting margin calls from account managers this morning.

Just thought I'd write a quick line to pass the info on.

Paul Singer and Elliott Associates are so dumb on Argentina that...

...they use IKN as source material. From this post today comes this visitor:

Oh Paul, this pissant blog is your idea of DD in a multi-billion dollar fight? I've lost all respect for you now...

Quid pro quo, Scotia

Because Scotia's lying toerag of an analyst Ovais Habib has no problem about ripping off IKN for his information and pretending he got the information all by himself instead, here come the script, numbers and charts from Scotia on its 3q14 mid-tier gold/silver miner production previews.

And I haven't even started yet, Ovais. Anytime you want to send that message of apology don't let anyone else stop you. Fuckwit.


Here's the intro...
Scotia Precious Metals Research has incorporated Q3/14 realized precious and base metal prices into our financial forecasts and fine-tuned our production estimates to account for factors such as weather for the mid-tier gold/silver producers. We expect a strong production rebound from Teranga after a weak Q2/14 and a >20% bump for B2Gold following the SAG mill replacement at Masbate. Silver Standard, Argonaut, Golden Star and Allied Nevada should also improve materially. SEMAFO may not be able to continue its Q2/14 level of production as the rainy season in Burkina Faso is expected to hamper Q3/14. Lower grades and recoveries are likely to push Timmins production lower as well. Free cash flow (FCF) is still hard to come by with none of our silver names expected to achieve it. For the golds, SEMAFO and Timmins are forecast to make FCF again in Q3/14 to be joined by Argonaut, Rio Alto and Osisko. Page 7 of this report provides a ready reference as companies begin reporting their Q3/14 operating results next week. We have also provided at-a-glance graphs and trend-lines to better illustrate how production and costs are expected to play out for the balance of 2014. We see the best value from companies exemplifying rising production profiles and improving all-in sustaining costs. Our top picks are Detour Gold, B2Gold and Rio Alto.

...and here are those page 7 charts:

Today's best fake newspaper front page comes from Argentina

This parody of main opposition media paper Clarín is doing the rounds on the streets of La Plata, Buenos Aires, this morning.

Aside from the translations I've stuck there on the right, plenty more in the other stories. Source.

UPDATE: There's also another version going around with "Massa" instead of "Macri" in the headline.

Chart of the day is...

...the US dollar (USD) print, just after that 5.9% jerbs headline number:

Lake Shore Gold ( 3q14 numbers

And so it begins, quarterly production numbers from operating mines begin to flow and one of the first is Lake Shore Gold ( today. Most will care more about the headline ounce number, but my eye was first drawn to the 4.6g/t Au head grade:

That's because it's been too high for comfort in the previous three quarters. I'll be watching the trading action in this one for the next few days.

Disclosure: no position in LSG


Presidential Approval in The Americas

Greg Weeks has the post, the comments and the link to the Mitofsky report, right here. This time around there's not a single one that surprises me. Maybe I'm getting too cynical after all.

The latest ridiculous metals expert* handwringing is on platinum

Oh noes! Kitco's latest bunch of wank (linked for reference purposes only, i wouldn't bother clicking through though, you'll learn nothing of any use) is some stuffed suit telling us that it's not gold that's being manipulated this time, it's not silver either. It's platinum. Seriously, where do they get these useful(less?) idiots from, is there a supply of unemployed rep theatre actors out there or something?

Bob Moriarty knows the real story and though I don't see eye to eye with him on many subjects, he gets full IKN credit for being a known voice in the metals sector who's talked sense on this subject for years. He calls it with his, "Gold and silver and whateverelse metal are manipulated. Of course they are, just like everything else that gets a price set upon it by capital markets. Now get over it and use that plain fact to your advantage instead of bleating about how unfair life is to you". Because that's exactly right.

For the rest of you, including the latest stuffed suit knownothing on kitco, this:

And this:

*utter dumbass

To 31 Floors

I was just sent a link. I don't know who you are, but thank you.


Great Panther Silver $GPL ( is re-writing the way junior mining companies do business

The traditional way junior mining companies do business:

  • Raise some capital
  • Explore property
  • Discover, develop
  • Raise larger amount for capex to build mine
  • Go into production
  • Make profit from mining
And now, the wonderful, new, innovative business model that Great Panther Silver (GPL) ( has created in order to go about its business:
  • Raise some capital
  • Explore property
  • Discover, develop
  • Raise larger amount for capex to build mine
  • Go into production
  • Raise more money to keep operations running
  • Produce more metal
  • Raise more money to keep operations running
  • Produce more metal
  • etc
The news today that GPR has filed a short-form prospectus to raise up to CAD$80m in the next two years fits right in with this model. As you can see here...'s only when silver prices go sky high that this company makes any sort of net profit. In fact, add all those bars up and the total comes to +$3.3m and I'll take bets on that number turning negative once the 3q14 results are published. In other words, over the last six years this company has made zero profit from its operations, while all the time pretending to be a successful miner. Robert Archer is a standing joke.

Peru's export drop: It's mining, stupid

Yesterday, reports based on the new figured released by Peru's exports oversight body Adex told us of the August numbers and the heaviest year-over-year (YoY) drop in exports from the country. Here's how the YoY chart looks for the last five years:

Figures from Adex and the Peru Central Bank.

The main reason is mining. The combo of lower prices for copper and gold plus the lower production of gold has, and using the correct technical vocabulary, knocked shit-tonnes off the dollar value of country exports.

And beware blowhards who immediately blame the drop on the reduction in gold produced in Madre de Dios, due to the government crackdown on illegal and informal mining there. As explained in IKN last month that's a minor factor at most.

Chart of the day is...

...the gold/silver ratio, which today comes with a firm prediction.

Satisfaction guaranteed.


Radius Gold (RDU.v) NAV vs market cap

What do you get for each 8.5c share of Radius Gold (RDU.v)?

  • 7.6c worth of shares* at current prices 
  • 0.3c worth of FCV.v shares at current prices
  • 0.2c worth of MED.v shares at current prices
  • 2.7c worth of cash estimated to end 4q14 (including G&A burn and current small drill program expense)
  • No debt.

In other words, 10.9c of current assets for each and every 8.5c worth of share, not including fixed assets, concessions and even assuming the current drill program at Blue Hill Idaho returns 100% dusters. Nothing from Tambor either, just the straight liquid assets give you a 28% premium to NAV. And yes, you're right, that's the kind of thing that happens at market bottoms.

Now all we need to do is convince Ridgway to liquidate and distribute. Piece of cake.

Disclosure: No position in RDU.v, but thinking about it.

*i checked, RDU still hasn't sold a one since its 2q14 filing

Franco Nevada $FNV and RBC bought deal fall-out news

Word arrives from secret sources that RBC Capital Markets, lead runner for Franco Nevada's (FNV) August 2014 bought deal, still has 1.3m shares in inventory after failing to shift all its allotment. As RBC took them on at U$59.75 and right-here-right-now FNV is trading at U$48.98, that puts RBC in the hole to the tune of U$14m.

No news from the other book participants, CIBC and BMO.

Much upside overhang in your medium-term future, Pierre?

Goldbugs on Greenspan

2002: Greenspan's an idiot
2003: Greenspan's an idiot
2004: Greenspan's an idiot
2005: Greenspan's an idiot
2006: Greenspan's an idiot
2007: Greenspan's an idiot
2008: Greenspan's an idiot
2009: Greenspan's an idiot
2010: Greenspan's an idiot
2011: Greenspan's an idiot
2012: Greenspan's an idiot
2013: Greenspan's an idiot

And then , in late September 2014, Alan Greenspan makes some vaguely complimentary comments on gold in Foreign Affairs at a time when the gold price is under pressure and gold commentary experts* will take any lifeline they can get in order to keep their little sheepdip scam going.

2014: Oh, isn't that Greenspan guy just wonderful?!

Goldbugs are wankers.

*oxymoron alert

A well-reasoned article on the bull case for the US Dollar

Last night Iwnattos linked it and told us to go read it because it's good. As I always obey my superiors I did just that and heartily concur.

This note by Louis Gave of Gavekal does a great job in setting out why the bull run in the US Dollar has only just begun, with plenty more to come. Bound to upset the hard money types, they (and you) still need to read it in order to consider the case. It takes in fundamental background, considers the effects of the shift in energy use in the USA (good points), considers historical patterns of previous cycles and also appeals diretcly to what I've noticed about the USD these last few days and weeks; nothing stops it. That and more.

Click right here and see for yourself, it's not a difficult read but it covers all the bases. The essence of strong blogging and today's main reco for bizheads. Go now.

Charts of the day are...

...five year price and five year LME stocks for zinc:

These things are rarely exact correlations, but those two aren't a bad match.

Posted while your humble scribe does his think zinc thing. Window open, no decision yet.


President Cristina Fernández de Kirchner: Judge Griesa "senile"

During her address to the nation this evening, CFK said this about this week's decision by judge Thomas Griesa to hold Argentina in contempt of court:

"It's naive to think that this [decision] is merely the work of a senile judge".

Which may or may not be true, but it's one helluva quote.

UPDATE: That's one of many "pearls" (as they call quotable lines in Argentina) from the speech, here's a list of the best (in Spanish). 

Brazil elections: What you're seeing unfold today, IKN Weekly subscribers read in August

OK, admittedly August 31st, but IKN277 ran an analysis of the Brazil presidentials on that date, right at the moment when Marina Silva was getting all the fuss and attention for her poll surge which put her in the lead in any second round run-off with Dilma Rousseff. Here's the main chunk of the script from that piece:


If, as is now extremely likely, no candidate gets 50% +1 vote in round one, we go to a second round run-off between the top two on October 26th. The headline from Datafolha on that eventuality is that if it were Rousseff versus Silva tomorrow, voter intention is 50% Silva, 40% Rousseff. In other words, Marina Silva has some serious momentum all of a sudden, it’s coming at the right time and the current administration is now worried.

For the record, I fully expect that:

1)     Dilma and Marina go to a run-off
2)     Dilma wins the October 26th decider

It’s one thing to have a lead in a projected vote, quite another have the massive, efficient and media-savvy PT party bearing down on a single candidate from a party that doesn’t have the national reach or resources of the PT. In Silva the PSB has its real chance, but she’s also well-known to the PT (she was a minister in Lula da Silva’s government before splitting away) and they’ll know exactly how to attack her credibility. Indeed that’s already started (6) with Rousseff going after Silva this weekend on her plans to scrap certain government subsidies, calling her plans “adventurist, shady and backward” as well as hinting of corrupt goings on in the background (never a difficult image to call upon in Brazilian politics). The Brazilian economy currently slipping into ‘technical recession’ (one monthly reading under 0% just out) adds an extra element to the fight as Silva will be able to blame PT, while the experienced and economy-savvy government will be able to strike fear into the populace by showing Silva’s party as woefully lacking in ability to run a country at such a critical time. The final factor is the Brazilian tendency for a tactical protest vote when stakes aren’t high, but when it comes to the crunch the country gets serious: It’s not that surprising to see Silva running neck and neck with Rousseff at this point, nor is it so strange to see her getting the best of any round two intention vote at the moment. Most of Brazil already understands that they’re going to see Silva vs Rousseff on October 26th and that’s when things are serious, until then it’s not such a bad idea to send a stark warning to Dilma and the PT party. Come the moment when people have to put crosses next to names, things change.

Cartoon of the day

Week. Year. It's from The Poke and entitled "This Comic Perfectly Encapsulates Twitter", but it's also the precise and exact reason:

1) Comments are no longer available at IKN
2) I reply to hatemailers in the way I do*

That's just wonderful.

*lots of swear words, then encourage you to reply and make the mail really long before telling you i'll never open any mail you send and then permanently block your mail address, you fuckwit

A message for Ovais Habib

Dear Ovais,

Really looking forward to meeting you on the upcoming Rio Alto Mining site visit next month and being able to discuss, frankly, face to face, in front of everyone else present, the way in which you rip off the IKN blog for information and don't have the guts or common decency to give attribution to your information sources. 

Love and kisses, Otto

And Robex (RBX.v) provides the NR of the day

First the background, provided by this quote from the NR dated September 10th (less than three weeks, my how time flies in the wonderful world of capitalism):
The Company's management confirms that the problems relating to the proper functioning of the elution system have been resolved and that the last elution proved positively conclusive.
Hey wow, not just "conclusive" folks, but "positively conclusive".

Now for the moneyshot from today's award-winning NR:
Robex's management wishes to inform the market that the research of solution with the current elution problems did not give the expected results. Continuing with these current installations will strongly affect the profitability of the Nampala site.
And oh look! RBX.v share price just happened to drop 19% on heavy volume yesterday. Sheer coincidence, of course.

This thing isn't like that thing, Fortuna Silver $FSM edition

This Thing is the headline to today's NR:

Fortuna Silver Increases Silver in Reserves by 26% and Silver in Inferred Resources by 67% at San Jose Mine, Mexico
That Thing comes as one of the fottnotes to the table in the very same NR (IKN highlights)
Mineral Reserves for San Jose are estimated using a break-even cut-off grade of 128 g/t Ag Eq based on assumed metal prices of US$21/oz Ag and US$1,260/oz Au; estimated metallurgical recovery rates of 89% for Ag and 89% for Au; and projected operating costs for year-end 2014. Mineral Resources are estimated at a Ag Eq cut-off grade of 100 g/t, with Ag Eq in g/t = Ag (g/t) + Au (g/t) * ((US$1,260/US$21) * (89/89))

Now for a confident prediction: Phone FVI, ask about this and they'll reply that $21/oz Ag was where the price was at the time of the report cut-off date of June 30th (which is nearly true too, London Fix stood at $20.87). How fortunate that FVI was constrained by such a luckily timed date and price, how unfortunate that its collected data couldn't be adjusted in the three months since then in order to better reflect the reality of a silver price 18% lower (!!) than its company assumptions. The saddest bit of all: This is one of the more transparent junior miners out there, which tells you all you need to know about the morality of the sector.


Monday music: Laurent Voulzy; Le reve du pecheur

How it works: A song you listened to regularly for five years, then forgot about for 17 years. Then somebody says something and Blam! it's there in your head and you need to listen to it so you do and damn, it's held up to the passage of time so very well. A piece of beautiful music, hope you enjoy.

And yes, that's Souchon in the vid.



"Listening to "analysts" at a goldbug conference is just like wandering into a fundamentalist prayer meeting. The informational value is zero, you'll never learn anything; it's nothing more than a fantastical prayer-ritual full of magical thinking, mythologizing about imaginary demons, and fantasies about a future heaven where God gifts his Chosen people with a gold-backed dollar and Ron Paul in the White House."
...comes from this. Recommended reading.

Buenaventura $BVN news

For the record, 30% +1 vote gets you automatically elected as a regional governor, no second round run-off required.

Ask Roque, he's bound to say something like, "Oh, we'll work with whoever is elected". Poll from here

This week's big fun conference in South America

That would be the GOCA get-together at the Hilton Hotel Cartagena, Colombia that officially runs September 28th (yesterday) to October 1st but really only gets going today Monday 29th. It's the first time GOCA has met in South America and that's a....wait, who's GOCA you ask?

Well that's easy, here's the explanation from its website:
The purpose of the Global Offset and Countertrade Association (G.O.C.A.) is to promote trade and commerce between companies around the world and their foreign customers through a greater understanding of countertrade and offset.
Got it? If not you can read the web page and see more bland pronouncements of the same shape and form. Still not sure who GOCA is? OK, try this explainer:
The organization, originally known as the American Countertrade Association (ACA) has a membership of over 100 international firms (including most of the the largest aerospace companies), who get together once or twice a year to discuss offset policy and counter-trade initiatives.According to the GOCA website, the definition of “countertrade” is defined as the “use of reciprocal trade tools, such as barter or other export activities to meet hard currency needs, primarily in commercial transactions.”
We're getting closer now, I think. In fact GOCA is a Defence Trade Association, which is the nice way of saying arms dealers. In other words, all the aerospace and defence companies and military beaks you could shake a stick at (though it's probably wise not to point anything at these shade-wearing dudes, not even a wooden stick, considering the bodyguard back-up they'll have in tow) are gathered together with "customers" in Colombia this week. To quote the blurbs out from the Colombian Defence Ministry, "Private and State delegates from the UK, USA, Indonesia, India, Kuwait and Israel will participate in meetings and will share with colleagues aspects on the evolution of licencing systems, industrial co-operation and offset policies, among other things."

So now you know. Mojitos served, the end.


The IKN Weekly, out now

IKN281 has just been sent to subscribers. Here's a nice topical tune for you.

A reminder that earthquakes don't kill people

Poor quality buildings kill people.

Last night in the Cusco region of Peru there was a 4.8mag tremor that hit just 8km underneath the small village of Paruro. Though a 4.8mag is relatively small, the combination of its shallow depth and the local houses being mostly made of poor quality adobe mud bricks with little in the way of foundations left a reported eight people dead, seven injured and around 45% of the village destroyed.

This is a topical example of a story that gets repeated without end.

  • At 7.0mag, a normal city would be shaken and see damage, but wouldn't see the tens of thousands of deaths that Port-Au-Prince Haiti saw in 2010 when its multi-storey buildings pancaked.
  • The 2007 quake on the coast of Peru at Pisco was 8.0 and a very big one, but occurred in a place where most buildings are ready to take a big hit. So it's worth noting that of the 430 people who were killed in the region  that evening (not the town, but the whole region), 148 were in the old and un-proofed Pisco cathedral when its roof collapsed.
  • On the other hand the 8.8mag Bio Bio Chile in 2010 was simply massive, the 6th largest recorded in modern times and affected some densely populated zones. Chile reported 370,000 damaged buildings and although 550 dead is 550 too many for comfort, it's also tribute to building standards there that the total wasn't counted in the tens of thousands; and that 550 total included tsunami victims unfortunately located at sea's edge at the wrong time.

Examples ad infinitum, those three were off the top of my head as recent examples (plus a quick check on wiki to get the accepted numbers), historians can tell you about the Huaraz or Mexico City or Colombia quake disasters from which you're bound to hear much the same refrain. That Cusco region quake last night was little more than a tremor by normal standards, this very office from where these words are being written has felt several of that sized movements in the last couple of years and they're not a concern, they're part of the way things are. Once you realize the movement is small and not building into something greater, nary a second thought is given bar the "oh, did you feel that one?" conversations you might have with acquaintances the next day. But if you live in Paruro Cusco a 4.8mag is no laughing matter, especially this morning, and that's because adobes are fragile, heavy, kill people and leave them without roofs.

The moral of the story is simple: If you live in a quake zone, sleep in a well-built house. Overly wordy quake rant finished, have a pleasant and undisturbed Sunday.