start here

start here

The Daily IKN email digest, get all daily posts sent to you next day (& no ads)


The #stablegenius hashtag on Twitter is too much fun

Right here. Thank you reader TR for the heads up.

PS: Dear subbers, if the weekly arrives late tomorrow I'll...err...make up some sort of excuse.


The Friday OT: Chocquibtown; Hasta el techo

Get your tropical heatwave on with the Colombian mega-trio.

It's high summer this end of the world and we down here watch in amusement as you up there wrap youself in layers of things. Al we listen to Chocquibtown all day. Youtube here.

Tough to find value in the market today

Instead of posting blather and nonsense on the blog, I've spent a decent slug of this week away from the screen and purposely doing other things. However, when at the desk I've also been doing a bit of a New Year's inventory on my own brain, checking out many mining stocks I don't own, trying to find a bargain and shake up my own entrenched thoughts about them. The results aren't wonderful:
  • There are mining stories that are priced to perfection. Sorry not interested in stock picking to to rise and fall with the tide, if I want that I'll buy GDX and go fishing.
  • There are a whole bunch of hyped-up dogs. This is of course that special time of year when your friendly neighbourhood agenda-laden market shark will give you that special piece of free advice on stock XYZ (and jeesh Casey Research laid it on strong yesterday, sucking deeply at the throbbing member of the Vancouver show by getting its flock into overpriced names run by their special friends).
  • There are another bunch of Value Traps, which look decent enough for their price on paper, but trade like molasses and offer no exit strategy (or width if you want in/out at the day's price). And hell's teeth, I own too many of them already.

But by dredging and trawling the sea floor of the Canadian markets this week I have come across one stock that interests me enough to make a decent feature of it this weekend in the weekly. Run well, tight share structure and most importantly, doing the right things in the right places at the right time. And though even now, midday-ish Friday, I'm still not sure whetherI'm a buyer next week, i have owned some shares in it before so have some idea what I'm letting myself in for if the trigger gets pulled. The numbers are done, what's left is to write up the note and that will keep me out of mischief and sunlight this weekend.


There will be no posts on this blog today

For secret reasons.


What I most liked about Rye Patch Gold's (RPM.v) NR this morning...

...wasn't the the phrase, "...our priority is the reduction of this debt", which makes it sound like they have a choice in the matter:

VANCOUVER , Jan. 3, 2018 /CNW/ - Rye Patch Gold Corp. (TSX.V: RPM; OTCQX: RPMGF; FWB: 5TN) (the "Company" or "Rye Patch") reports that in December, 2017, the Company completed its US$4.0 million principal repayment and paid US$609,000 in interest pursuant to its credit agreement with Macquarie Bank Limited. An aggregate of US$5.1 million in principal repayments was made in 2017, reducing the outstanding principal balance to US$21.8 million. The credit facility was used in the construction and re-start of the Company's flagship Florida Canyon mine in Pershing County, Nevada.
"Now that the Florida Canyon Mine is up and running, our priority is the reduction of this debt.  With approximately 20% of the outstanding balance already repaid in 2017, and with repayments scheduled for 2018, the majority of the credit facility is forecast to be repaid by year's end," commented William C. Howald, the Company's President and CEO.

Nah, the best bit was the way in which they forgot to mention just how they're going to pay down the debt. That'll be with the dilutive placement coming soon. More likely placements with an S.

SolGold (SOLG.L) ( Here's how I put it... a mailpal who asked for a thought or two on the Maiden Resource Estimate out of the company today (NR here). The only thing I forgot to add was my throughput assumption of 80,000tpd, but he knew that one already. Mail reproduced verbatim.

The 120mt high grade gives 4 years of feed.

Assuming reasonable things ($3/lb copper price, 85% overall recoveries incl gold portion which will be lower than copper recovery), the 1.8% CuEq core gives "rock worth" of U$101.2/tonne....let's call it a hundred.

Therefore, that high grade core is worth U$12Bn.

Capex estimate $5Bn. Overall margin estimate 50%.

The capex is paid by the hi grade with a billion to spare in less than four years. Then the rest is gravy, and we're talking literally decades of gravy, even without the next porphyry drilled at Cascabel.

This is a solid maiden resource.


Gold at U$1,321/oz is about as high as it goes, unless...

...TIPS drops soon.

It's not about the dollar, it's about what the dollar can do for you. The less its yield, the more attractive the monetary metal. QED.

Sandstorm 4q17 sales coming...

...very soon. And should be a beat, too.

Chart of the day is...

...fifteen years of zinc:

FWIW, this humble corner of cyberspace was the one that pooh-poohed the incessant calls for rising zinc prices all the way through that flat period, 2009 to 2015. However, we also changed position and went bullish on the metal in May 2016, just before the time it finally got its act together and crossed through the $1/lb for the last time. And if you'd followed me into Zn play Tinka Resources (TK.v) at the time (then priced around 20c) your portfolio would be doing pretty well, too. Just saying.

My secret weapon

When you're a value investor and a company analyst in the mining sector, you need to remain focused on the subject at hand but at the same time, there's no way you can ignore the big macro picture and trends in the things that move all mining stocks back and forth (e.g. you can be exactly right on your interpretation of any gold miner, but if the metal drops $100/oz out of the blue you are going to be plain dead wrong with your target price call). The problem is that there macro is a big subject, spend too much time on it and you're left with none to do your own thing.

The solution is to have a secret weapon, someone who is smart, trustworthy, approaches the market with your level of skepticism, has been around the block a few times BUT instead of doing what you're doing, covers the macro in a weekly missive that you can digest at your leisure then feel up to date about what's going on in the wider world of money. That's what I've enjoyed by being a reader of Notes From The Rabbit Hole every week for the past nine years. The best value letter out there, get your back covered too.

For the record, this post is unsolicited. I receive nothing from anyone for reco'ing Gary Tanashian's most excellent service. Gary and I have swapped our weekly letters on a quid-pro-quo basis for many years, he pays me nothing and I pay him nothing. The benefit I get from this post is the reflected kudos of (hopefully) getting more people to subscribe to his letter and remembering me for the reco.


The IKN Weekly, out now

IKN450 has just been sent to subscribers. Woof.


The top three most visited IKN posts this week are... reverse order (it's back):

Third Place: "New Nadina Explorations (NNA.v): It took 40 days". It's going to be fun on Tuesday. The only question remaining is how long the fellow FindTheLady stock Garibaldi can keep its subterfuge going in 2018. What with it being a far more sophisticated scam, I'm guessing around six months.

Second Place: "Can you see the moment...". The legendary legend, Brent Legend Cook, speaks. We the adoring flock hang upon his every word. Amen.
First Place: "Ten random predictions for 2018". Always a popular one, but do like I do and don't take it too seriously.