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Great feedback on the Detour Gold ( post

After this humble corner of cyberspace ran a short'n'sweet post on Detour Gold ( and its 3q15 financials earlier this week, specifically on the subject of All In Sustaining Costs (AISC) and what that new-fangled phrase does and seemingly does not mean, I got a great feedback mail from regular reader BW (the very same who sent in this). He's just given me permission to publish it as long as I point out that his summary was simplified in order to get to the grain of the matter in a mail exchange, rather than run a full conference-level presentation and dissection.

Thanks BW, there's sharp insight here and it's good that more people can benefit. So without further ado...


It has been a while since I proffered a rant, but you hit a nerve with your piercing jab at Detour Gold.  Nicely done.

For some reason, the gold industry has been congratulating itself for finally providing a metric that properly reflects the “cost of business” – AISC. The base-metals industry ran with their C1, C2 & C3 costs which cover the cost of doing business beyond the cash costs routinely reported by precious-metals producers prior to 2013.

Based on the glories of the KISS principle, the only important aspect of any business is how much cash there is at the end of the day; the big thinkers then figure how to employ that cash for growth.  Because you are well versed on the topic, I only offer rhetorical questions regarding AISC:

1.       Why isn’t the initial CAPEX a part of the cost equation?  Is that a sunk cost?  DD&A reflects that.
2.       Why isn’t payment of debt principal and debt interest a part of the equation?  Debt principal and DD&A are, in a way, related, but not the interest.
3.       If a convertible bond is floated to provide working capital, when it is paid off, cash or shares, why isn’t that part of the cost?  Or amortized over its life to production?
4.       Aren’t taxes a part of the cost?

Note that any CFM for a proposed project is on a 100% equity basis; moreover, exploration & development costs are indeed considered sunk costs and are not part of the NPV and IRR calculations (given the timeline, only few projects would meet minimum hurdles if it were otherwise). So be it. However, it is absolutely amazing to see the effect of debt service on the NPV & IRR in a CFM, especially when payments are deferred during construction.  That is missing from nearly all analyses.

So, on a FCF-basis Detour Gold lost about $3M (includes tax payment); when the DD&A is included, they lost over $44M. The obvious conclusion is that the cost to make this mine was not worth it, at least based on this Q’s results.  Personally the -$3M is important to me, especially since this company is a 1-trick pony with a large debt payment coming due.

The Friday OT: Novalima: Macaco

This is Peru's Novalima, taking a song from type of Cuban rumba beat known as 'Rumba de Palenque' and re-working it into something infectiously fabbo.

Kicking baseline, best played at Woofer Eleven.

Thank you reader BW...

...for sending in this today:

You're my kinda guy, BW.

Minera IRL ( (MIRL.L): The latest stupidity from Team Hodges

They're now telling the world that the Ollachea community is split 50/50 on the whole deal. Seriously, they're that desperate.

Marin Katusa forgets about Uranium Energy Corp (UEC)

Funny how these things go, is it not? Here's a screenshot from my mailbox this morning...

...which contains not one but two prompts to go see the Gold Report interview done by Marin Katusa (the guy that even a rogue like Porter Stansberry wouldn't hire because he's too scammy), via Marketwired (Katusa paying cash for that one) and then via the new Katusa lackey channel, Mineweb.

And then right underneath those two prompts was news on Uranium Energy Corp (UEC), the thing Katusa pumped earlier this year. Today's news sees Casey Research fave promotions guy Amir Adnani tell the world that he's lost yet another CFO (but of course if you read the NR you'd come away thinking that's a good thnig, this Adnani dude is as much of a spinmeister as the Casey Research/Katusa scumbags).

And how's UEC been getting on recently?

Ah, that well? So that will be why Marin Katusa forgot to mention it in his Gold Report piece today. Strange how back in April he was saying things like "High Frequency Trading & Lying Bloggers Attack UEC", defending his pick to the hilt, telling everyone how it was a no-brainer winner etc etc promoBS ad infinitum.

And now, nothing.



Daryl Hodges' consultancy agreement with Minera IRL (MIRL.L) (

There have been questions asked about this, so let IKN explain the main points of the deal between Daryl Hodges and Minera IRL.
  • Daryl Hodges gets paid $15,000 per month for his "consultancy agreement", the money paid to his own company "Ladykirk Capital".
  • The contract has no end date. That means if it's not cancelled, Hodges gets $15,000 a month indefinitely.
  • If the contract is cancelled, Hodges gets a windfall payment of $500,000 plus one year's worth of monthly fees, i.e. $680,000. If he's fired, if he resigns, if there's a change of control at the company, he gets this payment whichever way. The terms of the agreement are such that he can claim his cash no matter the way he is separated from IRL.
  • He got $100,000 when the COFIDE bridge loan deal was closed. He'll get another $150,000 when the COFIDE project financing is eventually closed, all that despite not doing a thing for the deal, before or now.
  • It's not tied to performance at all. It's just paid, open-ended, forever.

And here's the best bit: Although the contract between Ladykirk and Minera IRL began in March 2014, a great many terms of the agreement you see that include the "can't lose" windfall payment were altered in March 2015 after Daryl Hodges became executive chair of Minera IRL. In other words, he wrote his own contract and the lackeys he put on the board of directors rubber-stamped it. 

Then he has the brass neck of falsely accusing other people of being corrupt.

Checking in on Bobby Genovese's pump and dump scam stock Jemi Fibre (JFI.v)

While the big people chew over the results at Detour, Newmont, Agnico and Barrick, the little people at IKN prefer the Road Not Taken and so it's time to check in on Jemi Fibre (JFI.v), the crockacrap thing set up by Bobby Genovese last year designed to transfer wealth (i.e. yours is removed from you and is added to his).

Our coverage of JFI.v started last year on August 19th 2014 with this post (don't say you weren't warned), exactly where this chart starts...

...and as you can see, IKN's prediction that it would all end in tears has been fairly accurate so far (there's worse to come, it's going much lower).

It's not brain surgery spotting these Bobby G BS scams either, all you have to do is pay attention to what goes on at the financials level. Here in October 2014 we laughed at the way they create financial values out of thin air, including
"...just four and a half months later, in a re-filing of its company quarterly financials, the three properties bought with $2.25m worth of shares have boosted JFI's asset value by over $14m."

which is also something noted in the the latest iteration of our JFI coverage on August 30th 2015 entitled "The Jemi Fibre (JFI.v) year end financials are so bad it's laughable" that included
"...the first thing is to note the way JFI luckily managed to re-value its biological assets to the tune of $18m in the space of just three months, without adding a single pine cone to their asset, and in that way managed to add a $21m non-cash revenue item to their P+L which allowed them to declare an annual profit of $5.8m."
and ended with, " Destined for much lower, don't be Bobby G's sucker".

Jemi Fibre is a great example of how parasites get rich and retail gets poor on the TSXV. There's such a gap between the reasonable going concern status of any given company and the chances it might have of being a potential stock to buy that it's sheer madness. And then the Canadian regulatory bodies wonder why normal rank and file investor people are deserting their stock markets and putting their cash to play in other places...


Understanding "All In Sustaining Costs", Detour Gold ( edition

Detour Gold ( just reported its 3q15 and here's my favourite bit:

Gold sold: 126,241 oz
Average realized price per Oz Au: U$1,164
All In Sustaining Cost per Oz Au: U$1,071
Difference between two: U$93/oz
Total revenue difference: + U$11.74m

Net loss: US$44.3m
Adjusted net loss:U$13.3m

Hey, d'ya think that All In Sustaining Cost might not mean what you thought it meant? Perhaps?

But Canada won't care, because DGC is the default bull story and nothing negative can ever be said about it. These sycophants need their winner and DGC is the designated blue-eyed boy...ever since blew up in their faces, anyway. Expect warm'n'fuzziness in their brokerage notes mañana.

Daniel Ameduri's latest pump and dump scam stock

NGE.v has done this due to the latest Daniel Ameduri paid-for BS pump job:

Now comes the dump. You have been warned.

OT: Daft joke of the day

Dedicated to reader M, currently in transit:

A: Hey, nice watch!
B: Thanks!
A: What brand is it?
B: Guess.
A: Rolex.
B: Guess.
A: Breitling.
B: Guess.
A: Swatch.
B: Guess.
A: Patek Philippe.
B: Guess.
A: Timex.
B: Guess.
A: Citizen.
B: Guess.
A: Hublot.
B: Guess.
A: Tag Heuer.
B: Guess.
A: Bulgari.
B: Guess.

We could continue.

More on the Hycroft Mining (ex-Allied Nevada) "restructuring"

Last week we brought you news of Hycroft Mining (ex-Allied Nevada) and how it had emerged from Chapter 11 with $221m in cash and shares of the old company beaten into nanoparticals. Since then IKN has heard from several sources that all plant and machinery at the mine is up for sale, with all reasonable offers considered.

And that "ore on leachpads" that's never ever ever EVER going to be turned into finished product is still classed as an asset on its books.

So, that restructuring's going well. Innit guv.

Lawrence Williams does Minera IRL

Right here. A good piece.

He's been reading this humble corner of cyberspace, too. Apparently he thinks my opinions are "very forthright". I have no idea where he got that idea from...

Latest from SP Angel on Minera IRL ( (MIRL.L)

With the news that the Hodges asset-strippers running Minera IRL are applying to de-list from the TSX, effective November 10th, here's what SP Angel thinks of the move in its follow-up note this morning. Link here.

Minera IRL (MIRL LN) SUSPENDED – Please vote to sack the board of Minera IRL Limited.  We believe they are not working in the best interest of shareholders
  • We view today’s statement as potentially disingenuous and potentially misleading for investors who might not know more about the current situation at Minera IRL.
  • The board of Minera IRL Limited report that the company has applied to delist from the TSX in Canada.  TSX are to initiate an expedited delisting review for failure to comply with the TXS’s continued listing criteria.
  • It is our view that news of this review plays very neatly into the hands and strategy of the Minera IRL Limited board who appear unusually keen to allow the company to delist in each market on any regulatory pretext.
  • The statement also points out that the company’s admission to AIM will also be automatically cancelled should the shares be suspended for a period of six months.  While this is strictly true, we believe the board should be focussed on making more effort to reinstate the shares and to prevent delisting on AIM and the TSX. 
  • Today’s statement claims that “due to the actions undertaken by the manager of its Peruvian operating subsidiaries, there was a temporary compromise of control of those entities”.
  • It is our view that Diego Benavidez, who runs Minera IRL SA, is acting in the best interests of Minera IRL’s shareholders and the Peruvian community, whose support is essential.  Mr Benavidez has sold gold held by Minera IRL SA with funds being used to ensure that Minera IRL SA and Limited meet its obligations in Peru in order to  prevent a potential default situation.  There is no sense of any shortage of cash within the business.
  • We also view the statement of cancelling the admission to AIM as scaremongering and potentially misleading as we, again, view the situation as eminently resolvable.
  • We believe that the Board of Minera IRL Limited are not working in the best interest of shareholders to resolve the issues which might lead to the cancellation of its listings. 
Conclusion:  We conclude that shareholders should post their votes at the forthcoming EGM in favour of changing the board as petitioned.
* SP Angel analysts are expressing their own views and opinions in this analysis.  SP Angel has no corporate connection with Minera IRL or its subsidiaries.  SP Angel holds no shares in Minera IRL and does not have any current financial arrangements with the company. 

UPDATED If Keith Barron is right, Lake Shore Gold ( (LSG) moves up today

Yesterday in his Halloween-themed post Keith Barron touched many bases including this one:
In the last Straight Talk I stuck my neck out suggesting that we had reached market bottom. Rick Rule says that he’s too clever to call a bottom….and that’s probably wise. It’s certainly not as egregious as Greenspan saying you don’t know you’re in a Bubble while you’re in it….but to my mind the signs of a tentative, cautious pickup are there. In the last day or two Reservoir Minerals and Goldquest both released great drill holes and picked up some traction. This wasn’t possible a month ago.
So if that's right the news out of Lake Shore Gold ( this morning, which includes this little beauty of an out-step...

...should move this stock up. As we wait for Goldcorp (GG) to bite.

Disclosure: Yup, I'm long.

UPDATE an hour after the opening bell: Yup.


The real problem with Capstone's ( 3q15 numbers

Capstone Mining ( announced its 3q15 financials this evening and while the world goes "oooh" and "aaah" at the fully expected write down (they've plumped for nearly $200m), your humble scribe is drawn to this metric:

They can't even make a profit on the revs minus costs level. Ugh.

UPDATE: And this is the highlight from the MD&A, the "we're not going Ch11 at the moment, promise" bit.

Hamlet, Act 3, Scene 2, line 240

Spanish lesson of the day

Right here on this 38 second Youtube (or on this link)

IKN, once again providing useful and practical education.

B2Gold (BTG) ( Can you guess when the company released its production data last week?

If you guessed "after the close on Wednesday", score full points.

What London analyst firm SP Angel thinks of Minera IRL ( (MIRL.L)

This out this morning. My thanks to reader AW for the headsup. Original link here

Minera IRL (MIRL LN) SUSPENDED – VOTE FOR EGM resolution to replace directors of Minera IRL
  • It is rare that as analyst we offer advice on the voting of EGM resolutions.  It is even rarer that we should offer this advice so publicly.
  • We have considered statements made by the company Minera IRL (London) and Minera IRL SA (Peru) a subsidiary of Minera IRL in London. 
  • Minera IRL SA (Peru) are proposing to replace the board of Minera IRL (London) with a set of new directors – we agree with their strategy and with believe this is in shareholders’ best interests.
  • A former ceo, Daryl Hodges, was recently ousted in a shareholder vote – we believe shareholders cast their votes correctly in this move.
  • Minera IRL (London) are trying to sack Diego Benavides, a founder of the company alongside the late Courtney Chamberlain.
  • The board are going through a legal process in Peru to sack Mr Benavides on undisclosed evidence from a ‘whistle-blowers’ hotline in Peru – we believe this is the wrong thing to do as we see Diego Benavides as a dedicated, loyal and critically important character in the running of the mining operation in Peru and important in terms of community relations.
  • We see the Corihuarmi gold mine and Ollachea gold project as valuable assets which the company should maintain and progress. 
  • We do not see the actions of the Minera IRL (London) board as indicating the best strategy for building shareholder value.
  • We suspect the board may be happy to allow the default and closure of the Corihuarmi gold mine and the potential sale of the Ollachea gold project which we do not see as being in shareholders’ best interests. 
  • We view the posting of the ‘Notice of EGM and Posting of Circular’ in an RNS on Friday afternoon in the UK at 2.30pm as designed for investors to miss this announcement.
  • We see the holding of the EGM in Toronto as being contrary to the interests of many UK based shareholders who might wish the EGM to take place in London.
  • Votes must be cast and received by Computershare in Jersey by 24 November for UK shareholders.
  • Minera IRL (London) has published information in Friday’s circular in an attempt to discredit Mr Lema and Mr Jorge Ramos who are proposed as directors of Minera IRL (London) board.
Conclusion:  We believe Minera IRL shareholders should support Diego Benavides and the new proposed directors in the EGM vote to reconstitute the board.
* SP Angel analysts are expressing their own views and opinions in this analysis.  SP Angel has no corporate connection with Minera IRL or its subsidiaries.  SP Angel holds no shares in Minera IRL and does not have any current financial arrangements with the company.



Some observations on Friday's NR out of Minera IRL ( (MIRL.L), from IKN337

Here's a part of yesterday's subscription weekly that had a look at the EGM NR out of Minera IRL on Friday. Reproduced here for the fun of it.

And by the way, one interesting factoid about the November 26th EGM: It's being held at the offices of Fasken Martineau so if any of you shareholders want to stroll over and say hello to Chuck Higgins at his place of work, there's no better chance. Hi Chuck!


Minera IRL (MIRL.L) ( is run by lawyers
Friday morning Toronto time brought the awaited NR from Minera IRL (11), setting the date for the EGM for November 26th, venue Toronto Canada (Thanksgiving Day USA, as noted above). The EGM NR made the announcement of the meeting venue and then, in time-honoured fashion, set out the current board’s reasonings as to why the proxy slate and its ten points should be voted down. Of course, it was my preferred reading material last Friday morning. The first pass you see them making their case, the second pass you start to note their stronger and weaker arguments. It was around half way through the third pass that the penny dropped; that this document hasn’t been written by miner, it’s been written by a bunch of lawyers.

One thing we know about the current band of usurpers at Minera IRL, collectively known as Team Hodges, is that they might not know much about the act of mining and have precious little idea about how to conduct community relations, but we know people such as chair Jaime Pinto and Daryl’s friend, business partner Chuck Higgins and chief motor behind this are lawyers. And what we know about lawyers is that they’re great at bending and twisting language to suit their ends and means. So what we get, all the way through this so-called “robust” defence of the board of directors, doesn’t stand up to much scrutiny once the critical eye is applied.

So today I’m going to point out a few of the things that this band of sophists wrote to pull the wool over your eyes, kind reader and/or shareholder of Minera IRL. We’re not going into the full list (which is in fact long) because, quite frankly, I’m not going to hand over defence ideas to this band of scumballs so early in the process. But a sample or three of how lawyer-speak is being used to fool you is due because these master baiters of the truth have obviously burned plenty of midnight oil getting the phraseology juuuust right.

Example one: Team Hodges makes it sound like Courtney Chamberlain approved of Daryl Hodges’ move to executive chairman by writing this in the NR:

On March 6, 2015, the Company's Executive Chairman, Mr. Courtney Chamberlain, took a medical leave of absence and asked a non-executive Director, Mr. Daryl Hodges, to assume the role of Executive Chairman with immediate effect, a recommendation which the Board approved. Mr. Chamberlain sadly passed away the following month. In May 2015 Mr. Hodges recommended, and the Board approved, the appointment of Mr. Diego Benavides, the president of the operating subsidiaries in Peru, as Interim CEO.

In fact Courtney Chamberlain (RIP) did not approve of that at all.  The minutes of that meeting make no mention at all of Chamberlain’s approval. And in fact Chamberlain was strongly opposed to the appointment of Hodges in an executive role, but his views made to the meeting via telephone from his hospital in Australia while already very infirm, were roundly ignored as Hodges (who was chairing the meeting) pushed through his idea.

What did happen is that a meeting at which Chamberlain was present (by phone) eventually approved Hodges as Executive Chair and the double-speaking lawyers trying to steal this company have twisted that into “Courtney approved of Hodges”. It’s total BS.

Example two: Team Hodges is against the appointment to the board of Armando Lema, which is unsurprising because he’s one of the people on the proxy slate. But the reason they manage to squeeze from his past is a classic of lawyer doubletalk:

Mr. Lema was formerly a Partner at Lema, Solari & Santivañez Law Firm (LSS S.A.C.). LSS S.A.C currently has an outstanding tax debt for approximately US$1 million (including principal, interest and penalties), a debt that is owed to the Peruvian Tax Authority, SUNAT, and is under enforced collection, as shown in SUNAT's public registry.

In other words, a place at which Mr. Lema used to work has a tax debt with the Peru taxman of around $1m. He doesn’t work there any longer (he was there 2008 to 2010) but apparently he’s responsible for the debt that buffet of lawyers owes. That’s a bit like blaming a footballer for the relegation of a team he played for three seasons ago. But even if Lema could be linked, however tenuously to the tax debt owed by a place at which he worked, what Team Hodges fails to mention is that another lawyer we’ve heard of also worked at LSS S.A.C. at the same time as Lema. His name is Jaime Pinto and he’s the current chair of Minera IRL! Yes indeed, every word of that argument Team Hodges spun against Lema also applies directly and fully to Jaime Pinto.

Remember: This news release was written by lawyers, not human beings.

And that’s not even mentioning the wonderful argument they cooked up against the appointment of Jorge Ramos of COFIDE, which we ran on the blog on Friday. Here’s a paste-out of that post:

Let's start with just one snippet from today's NR...

The Board is of the opinion that, as a Peruvian and an official of COFIDE, Mr. Ramos would be unsuitable as a member of the Board because of provisions of Peruvian law.

...and then compare it to what the same board, but at the time headed up by the ringleader Daryl Hodges as executive chair (voted off by over 90% at the AGM), said earlier this year when welcoming the COFIDE deal:

The Company has agreed to COFIDE's participation on the Minera IRL board of directors, subject to the required approvals.

That’s just wonderful. I couldn’t stop laughing.

Example three: Here’s the part when they accuse Diego Benavides of trying to fire people who he considers enemies, or on the Team Hodges side of Minera IRL:
Commencing proceedings to terminate without cause the employment of several key senior employees of the subsidiaries regarded as being sympathetic to the current Board, including the Vice-President Exploration and Environmental Manager.

Which sounds pretty nasty and vindictive on the part of Benavides. But what isn’t explained brings a different light on proceedings:

1)      The process to dismiss a contracted full-time employee person in Peru is often long-winded. In fact, the people mentioned in the NR on Friday still work at Minera IRL, still draw their pay, still turn up at the office where Deigo Benavides works (unlike Jaime Pinto, who hasn’t even set foot in the IRL offices yet, let alone one of their mining properties).

2)      While the process drags on, one side can claim it’s “without cause” while the other can equally claim it’s “with cause” and the dispute is only resolved when a definitive judgement gets handed down from a third party (typically a courtroom in hotly contested cases). Therefore the “terminate without cause” you see in that NR segment is mere opinion.

3)      It’s very biased and incorrect opinion, too. That’s something I’m not going into here, but very shortly more light will get shed on the case and it’s going to be great fun to see how far Team Hodges will be willing to defend at least one of those people when the facts emerge.

Example four: Here’s a bit where it sounds as though Benavides, as President of Peru subsidiary Minera IRL S.A., was obstructing Team Hodges (unfortunately still referred to as The Company in this news release, fortunately that won’t be for much longer):

Failing to call a shareholder meeting of Minera IRL S.A. when asked to do so by the Company as the controlling shareholder of Minera IRL S.A.

What they don’t mention is that the shareholder meeting was called in a way that was against the company by-laws and that Diego Benavides HAD to deny the call for a meeting, else be in contravention of his company’s own rules! What Team Hodges tried to do is akin to a shareholder of who turns up at the company’s head office and starts telling the board of directors to Do This Do That Do This. For sure if you’re a majority shareholder you have more rights, but there’s a clear protocol and procedure that shareholders have to go through in order to call a meeting and Team Hodges (above ‘The Company’) refused to go through the correct channels for their own reasons.

That’s how lawyers speak to you, people. They think you’re stupid.

Example five: This is a classic, where Team Hodges try to get people to think that if they lose the company’s going to be de-listed from AIM:

Canaccord Genuity has informed the Company that in the event that it is unable to fulfil these obligations in its absolute discretion, it would have no choice but to resign as the Company's Nominated Adviser with immediate effect. In this instance, under the AIM Rules for Companies, the Company's shares will remain suspended from trading on AIM and if a new Nominated Adviser is not appointed within one month of the previous Nominated Adviser ceasing to act, then the admission to trading on AIM will be cancelled.

It’s difficult to know where to start with this one, so convoluted is their argument, but rather than go into detail we’ll just keep it practical. If Canaccord Genuity decides to resign as IRL’s Nomad, there would quickly form a queue of other brokers wanting the job. The chances of IRL not having a Nomad after one month are precisely zero.

Example six: I’m going to make this the last one today but I assure you that there are many more “facts” and “statements” that don’t stand up to the most cursory of critical examination. I’m not even going to mention the arch-stupidities they’ve written trying to justify Team Hodges’s trainwreck attempts at community relations, which undid eight years of hard work in a matter of weeks (frankly that part’s too easy to dismantle). But I want to add one more, because it’s one I’ve already received feedback on from a couple of readers out there. It’s this part, when Team Hodges begins to question the deal Minera IRL did with COFIDE via the third party company, Sherpa:

The Board is also reviewing the bridge financing obtained by Minera IRL S.A. in June 2015 in the amount of US$ 70 million, and the way the transaction was structured, which included the participation of Inversiones y Asesorias Sherpa S.C.R.L ("Sherpa") as advisor to the company in return for fees, options, and royalties. The board had been advised by Mr. Benavides that Sherpa was an exclusive agent of COFIDE, and their role was demanded by COFIDE. It was subsequently determined by Mr. Hodges, as Executive Chairman, that Mr. Benavides' assertion was not true.

The inferences here are clear. There is multi-million dollar deal in the offing, there is an apparently mysterious third party, Sherpa, between the two dealing parties, there’s an inference of a cosy relationship between the parties and there’s an executive chair in Daryl Hodges who thinks he smells corruption and then says that Benavides lied when he confronted him. Sadly for Team Hodges the reality is different from the spin, this is a classic of lawyers wordsmithing along with an executive chair who at that point was looking for any excuse to fire the only person stopping him from getting his asset-stripping way with the company.

This is a point that’s going to play out in the public sphere between the two sides so I’m not going to spoil it for anyone (or give ammo to Team Hodges), so let’s just stay in the world of hypotheticals for today.

  • Let’s imagine you’re Sherpa and you sign a contract to be the intermediary in this COFIDE/IRL deal (a position that’s completely normal in the world of Peruvian finances in fact, plus Sherpa isn’t some fly-by-night company but is well-established and run by a respected local businessman).

  • In such a situation, you sign a contract with both parties and one of the things you want is to have an exclusive right on the deal, so that’s in the contract too.

  • Now let’s imagine you’re Hodges and you ask Benavides “Does Sherpa have an exclusivity contract with COFIDE”? The answer is, of course, yes.

  • Then you as Hodges go to COFIDE and ask whether Sherpa was an exclusive agent of COFIDE. You know the answer already of course. COFIDE tells you that “No, we don’t have exclusive agents”. What you don’t ask is whether in this specific contract and deal there’s an exclusive agent, because you don’t want the answer to that question.

  • You then get to write that paragraph in an EGM proxy NR, a few months later, after being very careful with wording and agreeing on what you want to suggest to the world in late-night meetings with your lawyer friends.

But like I say, my little scenario is purely hypothetical, just offering a potential alternate scenario in which the events took place. And this one could become very interesting next week, so watch out.

To sum up today: The EGM is now called and we have a date on which IRL’s fate will be settled. I trust that once the Hodges company-wreckers are gone IRL can put its annus horribilis behind it and get on with the job in hand, building a mine at Ollachea. As for the week ahead, we’re going to get news from either side of the now unleashed proxy battle. The advice is to watch and read but jump to no conclusions about what’s said because this battle is best approached as a debate, let both sides have their say about the issues.

Chart of the day is...

...the US Dollar index (USD):

Yes, it's popped a move recently, but context is required. That's still trading range stuff we're seeing today. If you're going to make a fuss, it's best to make one when there's something worth a'fussin' about. That's what I say.


Massive upset result in Argentina elections

Here's the screenshot of the front page of La Nacion, right now:

With 68% of votes counted Mauricio Macri has 36% of the vote, Daniel Scioli 34% and those two will go into a second round run-off to decide who becomes President of Argentina. It'll probably be tight between the top two once 100% of votes are counted.

But that simple statement does no justice to the massive upset behind thoe numbers: Scioli was expected to win round one and plenty of people (your author included) were tipping him to win by enough votes (40%+, with the second place at least ten points behind) to win in round one. Even this afternoon when exit polls came out, people were assuming a comfortable vitory for Scioli and the first round win was a possible.

NOT ONLY IS THERE A SECOND ROUND, BUT MACRI LEADS RIGHT NOW! This is an enormous upset, people. Macri must be favourite for the run-off now and the reason seems to be the population of Buenos Aires Province deserting the government candidates.

PS: If you're holding Argentina bonds this weekend, prepare to have a very good day tomorrow.

UPDATE: With 84% of votes counted Scioli now has a slight lead, with 35.7% to Macri's 35.3%. But that doesn't change the fact that this is an enormous upset result that very few people saw coming (again, your author included, I thought Scioli had a real chance of winning the whole thing today). And Macri will be favourite going into round two, while Scioli will bank on not having the Anibal Fernandez yoke around his neck in BsAs Prov. Hell's bells it's going to be one doozy of a run-off campaign.

The IKN Weekly, out now

IKN337 has just been sent to subscribers. B2Gold and Minera IRL this week, basically.


ps: Oops, half a dozen spelling mistakes in the IRL piece: Somehow the non-proofed version went out. I'll fix it tomorrow

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An offer you cannot refuse. Click here, go to the post he just put up, get your no-strings-attached copy of NFTRH 366, today's newsletter from Gary T at Biiwii.

The top three most visited IKN posts this week are... reverse order:

Second Place: "UPDATED: Minera IRL ( (MIRL.L): Oh my stars I just wet myself laughing" which was on the day Team Hodges was beaten to the gun by Tema Benavides on the gold sales issue

First Place: "Minera IRL(MIRL.L) ( Insight on the perversity" which makes it a full house of IRL posts as the most popular this week.