Happy New Year

Have a good 2019, esteemed readers of this humble corner of cyberspace.

Prize Mining (PRZ.v) and the Great Vancouver Hypocrisy Show

IKN Nerve Centre is enjoying the spectacle immensely. The same newsletter writers, bloggers, self-styled mining gurus and assorted hangers-on who launched into your humble scribe over this post on Prize Mining (PRZ.v) back on October 22nd are trying to re-make themselves as saviours and guardians of the truth, fighting to get to the head of the queue to slam PRZ and wisely stating that this sort of paid pump cheque swap thing should be stamped out. Even funnier is noting how the people who happily took payments from PRZ to pump the stock, e.g. "equity guru" Chris Parry and his mini-me Greg Nolan (aka "dirk diggler" on CEOca and other bullboards of ill repute) have suddenly seen the light, too. 

These people do not provide the solution. They are the problem, the hypocritical assfaces.

The IKN Weekly, out now

You can wear all the suits and 

ties you like, I wear Levi's.

IKN501 has just been sent to subscribers. Happy New Year to all of you.

The Friday OT: Soda Stereo; No existes

Last one of the year:

Youtube here. My current earworm band and on this one, Cerati really gets his pipes working. Thus ends 2018, a year to put well behind me. Hasta nunca y vete a la mierda.

Prize Mining (PRZ.v) falls apart

Check out tonight's NR from Prize Mining (PRZ.v), the scam pump stock called as such by this humble corner of cyberspace on several occasions, the very same that spent multi-millions on a newsletter promo pump campaign and spread its cash among the self-appointed great and good of Vancouver mining commentary.

VANCOUVER, Dec. 27, 2018 /CNW/ - PRIZE MINING CORPORATION ("Prize" or the "Company") (TSXV:PRZ) (OTCQB:PRZFF) (MQSP:GR:FRANKFURT) announces that the Company has appointed Mr. Dallas Pretty, B.Comm., CA to the Company's Board of Directors.  The Company is also announcing the resignations of David Schmidt and Robert Archer from the Company's Board of Directors and the resignation of Feisal Somji as Executive Chairman and Director of the Company's Board of Directors.

So, just the three directors resigned, is it?

UPDATE: Interestingly, that link is now broken. Last minute changes on the way? Schmidt suddenly entrenching? We shall see.

Vaughan, the worst two-faced sneak thief on CEOca

Pretty hilarious your rush to judgment on the CEOca "private hotpick channel", Vaughan. All completely untrue, unfounded and invented, but that's never stopped you from spouting lies and BSsing the world before, has it? Sociopaths like you, capable of doing and saying anything for money, are a disgrace to the mining industry but unfortunately as you know well, you are not alone. It's why you're at CEOca in the first place, birds of a feather and all that.

There is VERY good reason why IKN hasn't made any comment so far. Worms like you will be the last to know.

Linking you to two interesting posts at better blogs than IKN

Just in case you haven't seen these already. I'm late to them myself, what with all the eggnog and figgy pudding. But well worth a (second) look.

Here's Angry Geologist, who sharpens her pencil on the latest numbers out of SolGold (SOLG.L) and Cascabel.

Here's Mining Ramblings, who does his ciggypack thing on the latest numbers out of Novo Resources (NVO.v)

The IKN Weekly, out now

IKN500 has just been sent to subscribers. A short, holiday week edition that won't take up much of your

Merry Christmas to one and all

Because even the people featured on these pages in 2018 who should by all rights be behind bars deserve a happy and peaceful Christmas time.

The Friday OT; MUTEMATH; Voice in the silence

This is Paul Meany and people, you have to see this one. Seriously, take four minutes out and improve your Friday measurably.

Thanks you reader JB for the heads-up. Amazingly good and brand new, out just last week. Youtube here.

A quick Ottotrans on Prize Mining (PRZ.v) today

Here's the segment of today's NR:

As part of the Company's ongoing evaluation of priorities and direction and our internal processes where we follow up with all of our contracts and consultants on a regular basis to evaluate their work and deliverables, the Company has decided to shift its focus on the remaining work programs associated with certain additional Agreements.  These Agreements had an initial value of $3,710,000 at inception.  The Company has determined to cancel the remaining work associated with these Agreements and is in discussions with the service providers involved to facilitate that decision

Here's the translation:

Our scam pump bullshit failed.

Bolivia political risk thoughts (from IKN499)

Here's one that nobody up there is talking about. Yet. From IKN499, last Sunday.

Keeping an eye on Bolivia redux

As widely expected, last week President Evo Morales of Bolivia got judicial approval for the change of his country’s constitution that will allow him to run once again for re-election in the 2019 Presidentials, scheduled for the back end of 2019. As noted a few weeks ago, this election might not turn out in quite the same way as any other in the last decade, because Evo’s presidency is showing signs of supporter fatigue, there’s dissent among what are understood to be his base supporters and now we have far right wing Jair Bolsonaro about to become President of its neighbour, the vastly larger and richer Brazil, who has previously pledged allegiance to the far right wing politicos in the Bolivia’s largest city in the East, Santa Cruz.

It is therefore interesting (as in the Chinese curse) to see Andres Oppenheimer, the hard right wing political commentator in both Spanish and English language Americas, running an op-ed piece last week entitled, “Bolivian President Evo Morales is carrying out a slow-motion coup. Why isn’t the region talking about it?”  (11) and comparing Bolivia’s economy to that of Venezuela and warning of dire consequences etc etcif Evo is left unchecked (yes you can compare the hard left political stances of Bolivia and Venezuela, but Bolivia’s economic stability has been remarkably good for the last ten years and shows no sign of weakening).

I continue with my sneaking feeling that Bolivia may be the surprise political flashpoint of the region next year. If so, the “buy when blood in streets” maxim goes into effect, which also means of course that you shouldn’t get too interested too early. Watching brief.

Brent Cook does Daniela Cambone in just six minutes

I think that's how one phrases it correctly. Here's the link, here's the blurb:

A mix of geopolitical and economic uncertainties will likely create the perfect storm for precious metals and miners next year, said Brent Cook of Exploration Insights.
“Volatility and chaos will be the theme [next year]. We’ve got BREXIT, Italy, German politics, Saudi Arabia, U.S.-China tariffs, they’re arresting people in Canada, we’ve got an unstable narcissist in the White House that’s being backed into a corner capable of doing anything, bear market beginning, and I think the interest rates are going to be slowing,” Cook told Kitco News.
Cook said that all these risks should bode well for gold and gold miners next year, with miners outperforming the bullion.

Go see the video:

Angry Geologist does more GT Gold (GTT.v)

Right here. Agreed on 109.

Trey Reik of Sprott predicts on the FOMC today

With an eye on what Jerome Powell and his friends might do and how it could affect the precious metals market. A strong argument for gold ownership, no tinfoil hats necessary. Go here.

Newmont (NEM) and Continental Gold (CNL.to): Intel (from IKN499)

This was read by subscribers to The IKN Weekly on Sunday. Now it's your turn.

Newmont (NEM) and Continental Gold (CNL.to): Intel

I semi-promised I wouldn’t come back to this whole CNL Buriticá thing for a while just a couple of editions ago, but I’m going to have to break that semi-promise. This weekend, a reputable source passed on intel that by its nature must remain unconfirmed (so please keep that in mind, I have no second lead on this) but due to the respect I have for the seriousness of my source it’s going to get an airing.

This: According to my source, the board of Newmont (NEM) is meeting this week coming to decide, in an up/down yes/no manner, whether to buy out the remaining 80% of Continental Gold (CNL.to) that they do not already own. Also, my source stated that NEM is not at all happy with the current situation there and says that if NEM stays, they want full control and ownership of the project. End.

Okay, the beans spilled let me first reiterate that though my source is a good one, a serious mining professional and has proven to me over the years to be a trustworthy individual, the rumour is unconfirmed and I have no second line on the information. With that said and after consideration, as long as we assume the intel is solid here’s a thought or two (after conferring with a few trusted peers, who helped crystallize ideas and added a couple of angles), done in bullet point form.

• Critically, NEM is in a standstill agreement with CNL. Therefore there can only be a friendly takeover. This means NEM would have to table enough money to interest CNL, its board and its shareholders.

• Considering the current price range (let’s say “between $2.00 and $2.30” for argument’s sake) and from where CNL has dropped recently (I’m going to rough-say $4.00, before its recent security issues came up, feel free to argue that number), it would need a very big premium to current market to interest CNL.

• The NEM board will know this as they make their decision. And in the event they decide to make an offer, it would almost certainly be of the one-time, “take it or leave it” type.

• This would mean that, in effect, NEM would have to ignore the current market price for CNL and make an offer that’s more akin to what CNL think their company is worth. However and also critically, the current stock price isn't just a number picked out the air or floating in its own dimension, this current range is a reflection of CNL's well-documented troubles and issues. NEM is fully aware of all of them and there are a whole list that start with the deaths of its two employees at Buriticá town and then the three geologists at its Berlín project. Other matters are certainly of concern to them as well, such as exposing more of its own company employees more directly (instead of being there on an occasional and consulting/advisory role), the judicial uncertainty in the country (see Regional Politics today for the latest example), the continued presence of illegal/informal miners and far-right wing paramilitary groups. Also, I am quite sure NEM is considering the potential liability of legal actions brought against the company by the families of the dead employees, especially the geologists. The recent resignation of CNL country president Restrepo was a necessary move, but it’s also a recognition of responsibility for the internal mistakes that led to the fatal incident.

• At this point, we should also note that NEM has not ignored the current situation, to the point where the NEM CEO made prepared comments on the problems during the company’s 3q18 Conference Call.

• Another subject is the NEM corporate culture, which has always been notably (even notoriously) conservative. This is not a company of risk-takers and that’s particularly true on the issue of political risk and social security. It’s worth recalling the way NEM entered into Buriticá, via a minority purchase which brought them de facto control of the project. For around U$105m they got 19.9% of the company, but they also got directors on the board and their technical team leading the build-out. It was in effect a call option on 10m oz of high grade gold and for the price, it was a smart bet on a potential risk/reward basis, they would be inside the company and the project and would know whether to pull the trigger. I know that U$105m is real money, but it’s the type of sum NEM can risk without it affecting the company (too much). Also, we should note that if NEM decides to exit, they’re going to get a decent wedge of that outlay back.

Therefore, the application Occam's Razor gets me to the call that NEM will likely bail. I have no idea how they’d do that and there are a whole range of options, from keeping the current share position for a while, not taking up their pro-rata rights on any new financing, selling in a block or piecemeal way, entertaining offers for their minority share position etc. Also, it may not effect the project in the longer-term because I’ve also picked up talk that streaming companies are interested in financing the missing capex. If true, CNL may end up getting there on its own and becoming a success, but if NEM does back out CNL is going to take a near-term share price hit, that’s a certainty.

The bottom line is this:

1)     I have unconfirmed intel from a reliable source. The rest of today’s piece is built on the assumption that the intel is correct.

2)     I think the most likely NEM decision at this point will be to back out of CNL and Buriticá. They may do this by tabling a “take or leave it” offer to CNL that is too low. They may simply decide not to go any further. If NEM leaves then the CNL share price will take a hit, at least in the near-term and perhaps for the longer-term as well.

3)     However, be clear that I may be wrong. NEM and CNL could reach an agreement, NEM buys CNL at a very high premium to this weekend’s share price, those betting on the junior today would make a handsome return in a short period of time. There’s a binary trade on offer here.

And finally, for what it’s worth I will not be trading this development personally and will remain neutral CNL. I could make up a rationale for this decision that would sound perfectly reasonable, but the real reason is that I have a moral repugnance to the way CNL goes about its business and even shorting it to make money would be too vindictive on my part to be healthy. I pass this intel and analysis on an as-is basis, do with it what you will.

UPDATE: Rather than re-edit I’m going to add this new information on here, as the above shows the thought process and now this helps solidify things a little more. After casting the net in a couple of specific places and reaching out to people that may know, I received a reply from a 100% solid, zero BS, ultra reliable source. This person told me that they’d been asked by a powerful private equity group in the mining sector about Buriticá this week. The PE group wanted to know their thoughts on the project and asset, their thoughts on the management (specifically CEO Sussman) and said there was an opportunity for them to get control. This goes some way to corroborating my original intel (it’s not an exact match, but if you believe this to be a coincidence then I have a bridge to sell you). It also suggests that Newmont is already shopping its 19.9% portion around.

This blog will be quiet for a day

For secret Grinch reasons.

Mining Ramblings does cost curves

A solid overview of how cost curves work and why they're important, posted up by Doug Beattie at his bog 'Mining Ramblings' this weekend. Go check it out here and learn something useful about the industry. Nice job of work, sir.

The IKN Weekly, out now

IKN499 has just been sent to subscribers. Ooooh it's disgusting, that Otto is such a tease.

A tailing spill reported at the Gold Fields (GFI) Cerro Corona mine in Peru

Right here, on the official Peru government environmental people (OEFA) website.

No word on the size or scale of the spill as yet.

IKN recommends: 'High Grade', a new blog on mining

Follow the link here to a very welcome addition to the internet mining world, the brand new blog "High Grade" run by the Luis, better known as @EconomicAlpha on Twitter. Ever since I started back on Twitter early this year I've been hugely impressed and often educated by Luis and his extremely sharp eye for mining financials, it can only be a good thing that he's decided to take the plunge and go longer form on us as well.

We also have a first real post from him today, a look at the news out of Wesdome Gold (WDO.to) last week. For the record, he's called WDO early and well for a long time and those people who have taken his advice on the stock have been handsomely rewarded. That goes for his calls on Kirkland Lake (KL) in the past couple of years as well, they've been outstanding. His WDO post is on this link right here, go take a look. Welcome to blogging, Luis.

Separated at birth

A simple question: Has anyone ever seen Tom Morello of Rage Against The Machine and Joe Mazumdar of Exploration Insights in the same place together?

Nope, me neither. Suspicious...

The top three most visited IKN posts this week are...

...in reverse order:
.

Third Place: "Wesdome (WDO.to): A prediction". It got popular because of the follow-up post.

Second Place: "ATAC Resources (ATC.v), Bristow's first victim (there will be more)". It would seem Bristow wasn't joking about that 15% IRR thing.
.

First Place: "Coming soon to a pumphouse near you: African Wheaton Cannabis" and the best mail received on this one was from reader LB, who said, "...when I saw your mention of African Wheaton Cannabis on the blog yesterday, I thought it was a joke...". Couldn't put it better myself, LB.

Evrim Resources (EVM.v): In praise and defence of Joe Mazumdar and Brent Cook of Exploration Insights (from IKN498, last weekend)

Here's a note that turned into a rant, part of last weekend's edition of The IKN Weekly, IKN498.

Evrim Resources (EVM.v): In praise and defence of Joe Mazumdar and Brent Cook of Exploration Insights

I’m going to get something off my chest and have a good old rant.

Last week, we saw another junior story hit hard times as Evrim Resources (EVM.v) released first drilling results at its (to that point very promising and exciting) Cuale project in Mexico. Even though it’s an exploreco in LatAm, it’s not one that’s been featured on these pages as once the initial market-moving event happened to the stock, its potential risk/reward didn’t look attractive to me. My neutral position started to look a bit shaky when no lesser name than Newmont (NEM) decided to take a minority stake in the company by buying into a $7.3m place at $1.50/share, but as things turned out the drilling announced at Cuale last week didn’t get close to matching the initial trench results from the project (I’m not going to go into post-mortem details of a stock we have not previously covered here, if you want to know more check out the NR or mail me and I’ll be happy to give the quick’n’dirty) and the stock did this (below).   

That is one helluva nasty sell-off. It depends where you draw the line exactly, but in approximate terms it’s a 75% haircut and this weekend’s $0.325 price is a mile away from where it was. 

And now to the point: It so happens that this week saw me watching the market pretty closely and on the back of the collapse, bullboards and social media of all shapes and sizes decided to lay into Exploration Insights, the mining newsletter run by Joe Mazumdar and Brent Cook, as they’ve had EVM as one of their positions. So yes, they got hit by the big sell-off and yes it’s a hole blown in their portfolios (they like me use the “eat your own dinner” system and only reco the stocks they buy). So out came the trolls and the “Ha Ha Exploration Insights Sucks!” or “Joe and Brent have cost their subscribers a lot of money” type comments, Monday morning QBs all around.

Which goes to show that a little knowledge is a dangerous thing. That and the majority of people who spout on bullboards are pig ignorant and will often prefer not only to be that way but stay that way. Yes, they held into the bad news, but what the easy critics and trolls fail to mention was that Exploration Insights bought into EVM at 10c back in late 2015. And then in April 2018 when the first flush of good news about Cuale came in, they made a partial sale of stock at $1.38. Here’s that mapped out on a price chart:

If that’s your idea of a failure, I can only assume that Brent and Joe would like to fail in your eyes all the time. On show there isn’t just good investment advice in a junior exploreco, it’s exceptional. They identify an opportunity early, have the chops to call a partial sale when things suddenly get peppy, and even after the massive selling they are a mile up on their original purchase. Not only that, but this week Joe/Brent have two other trade plans open on EVM but in order to know about them, you’ll need to subscribe to their service.

Which I strongly advise you to do. I know it’s not the cheapest out there, but Exploration Insights (EI) is the best newsletter written on the mining industry, hands down period no question and yes, I very much include The IKN Weekly in that calculation. The exact focus of EI is somewhat different to The IKN Weekly and all about using the duo’s geological knowledge to identify early/very early-stage exploration opportunities in which to invest, but that’s a minor point. They are the best and you should subscribe to their service, but even if you don’t you can do yourself a favour this week and go around your usual internet haunts and jot down the names of people who have spent the week criticizing Joe/Brent for their position in EVM; those people, quite literally, do not know what they are talking about and their advice on other matters is very likely to be of the same low quality.

I’m an irregular reader of other opinions on mining and markets, but there are only two newsletters that I read every edition, come what may. One is Gary Tanashian’s ‘Notes From The Rabbit Hole' (12), which gets frequent mention on these pages due to his unbeatable macro-coverage services and impressively ego-free, insightful eye. The other is Exploration Insights (13). I often find myself agreeing with their viewpoints but definitely not all the time (and when it comes to difference of opinions, both they and I have had the last laugh on different subjects over the years), but my stars when they say something you’d be daft not to listen (and you’d better have a good reason to oppose them). Joe/Brent and Gary are both best of breed newsletter writers, I cannot recommend them too highly. And with “failures” like Evrim, who needs successes anyway? Christmas is coming…buy yourself a something nice.

Detour Gold (DGC.to): Much ado about nothing

A price chart:

Way back when John Paulson sent and published his first activist letter to Detour Gold asking the company to put itself up for sale, the stock price rallied in expectation. But look where we are today, a Paulson-nominated board is not in control, supposedly that would mean DGC willbe up for sale to the highest bidder and....nobody cares.

The problem with shit assets is that they stay shit assets, no matter who you have mining them. Anyway, let's hope they find a few ways to cut down of G&A (though something tells me that we should have our hopes up too high, even on that).

The Friday OT: Joe Jackson; Steppin Out

Great track.

Another blast from the past like last week, but this one far smoother and with more musical talent. Youtube here. And while searching for the video I came across and loved reading this "Anatomy Of" piece about the song in the WSJ, from many moons ago.

A potentially important development in the "BridgeMark Group" scam

Here at IKN, we've been following the so-called "BridgeMark Group" scam ever since it was announced by the BCSC. This first post, then subsequent follow-ups (e.g. here, here and here) covering a few of the angles are testimony to our obvious interest, because this is just about the first time that the BCSC has lifted more than a single finger to do something about the cesspool it governs over in Vancouver's capital markets.

As it happens, that first post in the series was entitled, "Here's hoping the BCSC goes after TSX companies as well, not just CSE", which brings us to the point of today's post. This humble corner of cyberspace has received word (which checks out somewhere else) that the BCSC was not the instigator of the investigation that has brought us to the BridgeMark group. It all started a few weeks ago when the US OTC market authorities, via US FINRA, brought the whole Canadian cheque swap/consulting contract scam to the attention of the US SEC. It appears that the OTC is trying hard to clean up its act (probably forced to by ever-stricter vigilance from The SEC) and has serious doubts about many of the Canadian juniors listed therein. At that point the SEC called the BCSC, along with the OSC and ASC and "asked" (i.e. ordered) them to do something about it. What results so far is the announcement of November 27th pointing the finger at the 11 companies in cahoots with the 26 or so persons or entities covered by the moniker 'BridgeMark', but last month's announcement really is just the tip of the iceberg and that the BCSC Enforcement Action is still months away.

What this means is that the investigation is ongoing. It also means that, as the SEC is the driver of this and not the BCSC, the BCSC society of chums is not going to be able to protect its crooked pals who have run the TSXV into the ground through their criminally greedy activities. This investigation will not stop at the CSE, I am reliably informed, and 2019 may well be the year when the whole rotten edifice of the Canadian capital markets comes crashing down.

One of the BridgeMark scam companies loses its CFO

BLOK Technologies Inc (BLK.cse) just announced this:

VANCOUVER, British Columbia, Dec. 13, 2018 -- BLOK Technologies Inc. ("BLOK Tech" or the "Company") (CSE: BLK) (OTC: BLPFF) (FRANKFURT: 2AD) today announces that David Alexander is resigning from his position as Chief Financial Officer. Mr. Yari Nieken, Director, will be serving as Interim Chief Financial Officer. The Company will promptly begin a search for a permanent Chief Financial Officer.

Probably just coincidence.

Have yourself a Merry Little Ebitbrah Mug Christmas

Okay folks, last call for your opportunity to order a fabbo cool and wonderful Ebitbrah financial coffee mug as a Christmas present. The guys behind the company told me this week that they've stepped up the shipping program and now get your order to you in 5 to 7 days, so now is the time to go over and get yours. Plus there are some new designs, such as "The Hindenburg" (for all you APHA fans) and a wider range of "The Miner" mugs.

Plus, for the holiday season they've dropped all prices by 15% (they're calling it the "Tax Loss Selling Special"). Cannot get better than that, so go over to Ebitbrah today and spend some money on something nice, for you or your loved ones. Or to suck up to the boss you secretly hate. 

And a final word: I have no affiliation with Ebitbrah at all, I don't collect commissions and even though they've offered me a freebie mug twice in return for the exposure on the blog, I'm not going to collect on it. I'm happy to provide free advertising for them because 1) I like the product 2) IKN has the right eyeballs for them 3) the person behind it is a bright, go-getting young dude who deserves a bit of sponsorship. IKN will lay into the sector's bad actors, but it also loves to promote the good guys as well. That is what's happening here, no more no less.

Wesdome (WDO.to): Further to yesterday's prediction...

...about what we could expect from the share price action today, which went like this: 

"Its share price will drop at the open tomorrow morning and then get seriously bought."

A price chart:

Further questions?

Eco (Atlantic) Oil & Gas (EOG.v): greedy assholes

Check out the MIC with the proposals for its AGM, just out. It includes this pearl

Pursuant to the Stock Option Plan, the maximum number of Common Shares reserved for issuance in any 12-month period to any one optionee other than a consultant may not exceed 5% of the issued and outstanding Common Shares at the date of the grant. The maximum number of Common Shares reserved for issuance in any 12-month period to any consultant may not exceed 2% of the issued and outstanding Common Shares at the date of the grant and the maximum number of Common Shares reserved for issuance in any 12-month period to all persons engaged in investor relations activities may not exceed 2% of the issued and outstanding number of Common Shares at the date of the grant

As it happens, EOG has eight (!!) directors nominated, so that means just those self-serving shitbags get rights on 40% of the float next year. Add in the consultants and various parasite hangers-on, we're talking 50% minimum.

Do Not Feed The Animals.

Wesdome (WDO.to): A prediction

Its share price will drop at the open tomorrow morning and then get seriously bought.

That's all. The rest for subscribers on Sunday.

Bagholder Quotes, New Gold (NGD) edition

As it has now been sent to this humble corner of cyberspace twice in the last few hours (TY readers L and G), your humble scribe thinks a little more light is due. This is the mailer that the retail flock unfortunate enough to be on Eric Muschinski's mailing list got yesterday:

And here's another piece of mining literature that may be of interest. Same author Eric Muschinski, same company New Gold (NGD), the only difference is the date of publication, February 13th 2017:

And let's check the scoreboard on that:

Oh dear. Lord only knows how many times he reco'd this thing before 2017. But one thing is sure, Eric Muschinski knows nothing about balance sheets. Why the financially illiterate self-appoint themselves as gurus is a minor mystery, why people actually listen to these dumbasses is the real conundrum. Mind you, I'd safely bet that those people paying this guy money are happy about their sponsorship of his Yucatan Peninsula vacation this festive season. Ho Ho Ho.

Plateau Energy (PLU.v) and its 95c placement in October

The IKN post "Some friendly advice about Plateau Energy Metals (PLU.v)" dated October 10th was short and sweet. Here's the whole thing:

Those of you thinking about participating in the placement announced this morning should Google the name "Walter Aduviri". And if you're thinking of going heavily in, make sure you do so in Spanish language (and if not versed, pay someone who is).

Thank you for your attention. And don't say you weren't warned.

And here's the PLU.v price chart, then til now:

This is just the start of Aduviri's house of pain. And just wait til the hold comes off those placement shares.

ATAC Resources (ATC.v), Bristow's first victim (there will be more)

Today from ATAC:

"VANCOUVER, Dec. 12, 2018 /CNW/ - ATAC Resources Ltd. (TSX-V:ATC) ("ATAC") announces that Barrick Gold Corporation ("Barrick") has terminated its option to acquire an interest in the Orion Project, located within ATAC's 100% owned Rackla Gold Property, Yukon."

And why so? Simple, Orion was not big enough and not good enough. It doesn't matter whether you've believed the ATC spiel on its beloved project over the years, a new broom is in town and bringing some cold, hard reality with it. We've know the hammer was going to start coming down with Bristow at the helm, ABX made this crystal clear a month ago:

"To approve so-called Tier 1 projects, with potential for more than 5 million ounces of gold, Barrick will require a 15 percent rate of return, based on a $1,000 gold price.... Tier 2 projects, with more than 3 million ounces of gold, will need a 20 percent return."

So today the first victim and don't expect ATC stock to have a great day. How long before NovaGold (NG) farce finally ends?

UPDATE at the open: ATAC? ATTACK!

Now 37% down.

Frank Callaghan; The defense lawyer does the work of the prosecution

If there's one thing I've cherished over the years of following the Canadian mining scene, it's the sharp and dry wit of Mike Caswell over at Stockwatch.

"Lawyers for Frank Callaghan, the former chief executive officer of Barkerville Gold Mines Ltd., appeared before the B.C. Securities Commission on Monday to protest the TSX Venture Exchange's refusal to approve Mr. Callaghan as an officer or director. They said that the exchange has treated Mr. Callaghan unfairly in withholding its approval. They described Mr. Callaghan as the "kind of person who should be active in the mining industry," being one of the few to have taken a junior company to the production stage."

Full thing here.

Another reason to avoid the upcoming African Wheaton Cannabis pump like the plague

Word received at IKN Nerve Centre since this post today; No lesser scamster than Sean Zubick of Palisade has been going round telling prospective marks that he is involved in a "new potstock deal with growing operations in Africa" and trying to get people signed up to the placement (being run by Canaccord Vancouver, it could only be that way).

The chances that a share structure and insider roster as scummy as the one being promo'd by African Wheaton and the bullshit pumphouse Palisade, headed by chief scumbag like Sean Ryan Zubick, are working together? Extremely high.

Coming soon to a pumphouse near you: African Wheaton Cannabis

Here's a slide from the (what they thought was the) confidential pitch out of (what they hope to be) The Next Big Thing to hit the potstock world, African Wheaton:

And over there in the top right is the reason why they want this to be big, an obscene level of greed on show in the private rounds. According to the seed run, currently being pitched all over Canada, the 213.8m shares once done will give the company a market cap of $106.9m. And over half of those shares were distributed at under 2c! Disgusting greed, yet another no-lose proposition from people who take no risk and get all the reward. This is not capitalism, it's a crony scam and needs to be stamped out.

And when you consider the background of the people running this IPO, such as an CEO previously arrested on insider trading charges (that they couldn't make stick), the son of ex UN bigwig Koffi Annan who has been into iffy dealings all his adult life, the shell company (Trius) one of the Stan Bharti vehicles and run by one of his legal beagles and a chair of the Zimbabwe end of the company who is a well-known thug politico who was up to his neck in multi-million dollar corruption cases under Mugabe. Well, it's quite the salad this one. Oh, nearly forgot, and Harry Lundin, son of Lukas.

Canaccord (who else?) want you to buy these pre-IPO shares for 50c each, which will make all in the backrooms very rich indeed. When trading starts in African Wheaton in 2019 and you wonder where all the liquidity is coming from, look no further.

Today's junior mining quiz question for a maximum of 17 points

What three things do these three junior exploreco companies have in common?

• Evrim Resources (EVM.v)

• Silver Bull Resources (SVBL)

• Azucar Minerals (AMZ.v)

If you answered "All in Mexico", score two points.

If you also answered "All did deals this year to let major mining companies into their flagship assets", score 5 points.

If you added to your answer, "All did those deals with majors at way higher prices than today's market because the major just waded in and then a whole bunch of retail fools who were cocksure the major "knew something special" also bought at the same time only to have their asses handed back to them on a silver platter as well", score ten points.

This thing about major mining companies knowing more than the rest of us, can we bin it now, please? Geologists are crappy at corp dev decisions.

The IKN Weekly, out now

Aux armes, citoyens! Formez vos bataillons!

IKN498 has just been sent to subscribers. Not a very good edition, last week's was a lot better.

El más grande, lejos

Gracias por otra alegría.

The scene at this week's American Exploration & Mining Association convention in Spokane

IKN Nerve Centre receives this photo of the scene at this year's American Exploration & Mining Association convention, Spokane WA (Weds thru Fri):

According to the source, there were 1,200 people registered for the gig, of whom 1,100 were automatic booth registrations. Therefore real attendees were around 100 or so, or in the words of IKN's source, "It was crickets". And golf too it seems, the guy getting some putting practice in had few concerns about delegates in his sight lines.

Eric Coffin, your petticoat is showing

Mirth and merriment on show over at CEOca at the moment, where on the Prize Mining (PRZ) board you have such leading lights as Eric Coffin and Tommy Humphreys back-pedalling hard in order to try and distance themselves from the unfolding scandals. Got to adore Lord Haw-Haw and his "oh it was just one erroneous phone call" excuse to explain why he bought into the Kootenay Zinc ZNK.cse P+D, but even better is watching Eric Coffin squirm and carefully choose his own anti-strawman subjects before answering them himself. Yup, he's careful to broach only the issues he can deny easily.

So why not tell them about your cozy relationship with Scott Gibson and Gibson Capital, Eric? Or why you always seem to get interviewed by Gwen Preston on the Gibson-owned media channels? Or how certain companies always seem to get mentioned during those pally pal Q&As. C'mon Eric, stop being so coy, give your flock full transparency about your backroom double dealing for the first time in your life, not just the clean corners of your biz.

PS: And by the way, Coffin really likes to make out he's an expert judge of my character and will state with certainty this-or-that thing about my viewpoints, life choices, opinion of other human beings etc etc. So when he starts on the ad-hom attacks again, just remember one fact; he's never met me. Not once. Never even spoken on the phone with me, in fact. His expertise as character judge is just another layer of fakery based on his own error-strewn imaginations and third-hand snippets.

The top three most visited IKN posts this week are...

...in reverse order:
.

Third Place: "Aphria Inc (APHA): I sincerely hope clients of Scotiabank sue their brokerage". We're all the potstocks all the time this week, the most viewed posts all connected with the short report whacking of Aphria (APHA). This one was my rant.

Second Place: "The Aphria $APHA Scotia post this morning results in an interesting conversation...". And this one was the conversation that arose due to that rant, but went off at quite a different angle.
.

First Place: "Classic moments in sell side due diligence, Scotiabank edition". And this is the post that started it all. Scotia, thy name is ouch.

The HIVE Blockchain Technologies (HIVE.v) five day price chart

Ethereum closed the week at $93. There is no zero missing.

The Friday OT: Bow Wow Wow; C30 C60 C90 Go

A blast from the past:




Seminal punk track. Youtube here. For best results, play it really loud thru a mediocre sound system.

A gold chart

The next three or four trading days will be important for gold.

More excellent mailbag on the perils of passive ETFs

Here's something received at IKN Nerve Centre midday today, which continues the subject brought up yesterday by VEP. This time, Another Reader has more light to shed. The entrance and exit blurbs are removed, what's left is what matters and darn, I'm lucky to have smart readers. Read on...

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As a mining banker I observe, on a daily basis, the corner of the market where these effects are most acute. Mining has absolutely no cyclical capital coming into it at the moment to paper over the cracks, so I’m left staring at the bare wreckage created by an absence of capital that is primarily due to the structural inefficiencies in the markets. And make no mistake about it, these structural inefficiencies are being caused by passive funds and ETF’s.

The succinct explanation as to why we should all be concerned, mining investment bankers or not, is as follows; If the dominance of passive funds and ETFs is followed to its logical conclusion, there is no need for a stock market.

Why? Because the biggest impact that ETFs and passive funds are having, invisible to most market observers (and especially those who don’t care about mining), is that the primary market for mining companies has been obliterated. While the secondary market seems superficially healthy, the new issue market is dead. A company with a good project, sensible capital structure and a a competent management team used to walk up and down Bay St before collecting a modest capital infusion for a drill program of merit, but there is now barely anyone left to write a cheque for them. And that is only partially due to the decline in the number of people willing to invest in mining, but everything to do with the fact that when ETFs take your capital, they don’t invest it in the primary market. If all of the capital willing to invest in mining is domiciled in ETFs, not a dime of new issue paper would ever get issued again.

“So what?”, I hear you say. Well, there are two reasons we should all care about this. Firstly, put yourself in the shoes of a mining junior. If you know you can’t raise capital on the public markets, why list? Sure, there’s a point being a public company if you’re big enough to get into an ETF or a passive fund, but the primary reason that juniors list is to raise capital. Which is a good thing because people like me and you get to participate in the upside of some great projects. But if you want all of the junior mining projects to be controlled by private capital, feel free to cheer on the rise of the ETFs.

Secondly, in my humble opinion, ETFs are indeed starting to look scarily like the sub-prime market before the collapse. In short, the liquidity of many ETF instruments is probably not matched by the liquidity of the underlying stocks, so in the event of a mass liquidation of ETF positions not all of your capital is coming back to you. I suspect that a significant market correction could create a scenario where ETFs have the potential to implode in a liquidity crisis reminiscent of that which eventually blighted the mortgage backed securities market. If you own ETF’s and there is a mass stampede for the exits, do you think that your only risk is the price of the underlying securities? The reality is that ETFs and passive funds are mispricing the risk that the holders bear. What every ETF holder is unlikely to be accounting for is the counterparty risk with the ETF provider who will need to liquidate ETF positions much faster than they can sell the underlying instruments in the event of a mass liquidation event.

On top of all this, don't even get me started on tracking error. I'd make a heavy bet that if you could ever precisely replicate the contents of an ETF over any given period in a portfolio of stocks you bought and sold yourself, that your performance would be significantly superior to that of the ETF itself. Call it a hunch, based on how much money the ETF providers are making.

Mailbag on Kootenay Zinc (ZNK.cse)

Here's an interesting mail, received from A. Reader yesterday. It's about one of the companies caught up in the BridgeMark scam and, lo and behold!, it was pumped by Gwen Resource Maven Preston to her subscribers at the time the P+D was in full swing. My, what a coincidence! It was also pumped by the so-called "Equity Guru" Chris Parry, who also makes full use of the Vancouver scamster central website CEO.ca to push his nefarious agenda. Yep, that is indeed the Tommy Humphreys site and....oh wow! Tommy was in on the Kootenay placement as well! My, another sheer coincidence.

People, the M.O. of the Vancouver newsletter scam cabal is on full show, right here. And if you think this is some sort of isolated incident, I pity your poor hide.

Sir,

I applaud your efforts in shedding light on the junior mining newsletter writer (NLW) business, really more a promotional business than anything approaching an analytical one, with rare exception (you, Kaiser, Exploration Insights, that's nearly it). 

As you rightly point out the Resource Maven is a particularly sneaky scamster, and the recent BCSC "Bridgemark" kerfuffle has swept her into the mix, albeit tangentially, regarding one of her picks, Kootenay Zinc (ZNK) (no company website, always a good sign).

One of the beauties of the CSE is its "open kimono" Form 9 distribution report which specifically names all PP subscribers (unlike the TSX equivalent, in which subscribers' name are kept confidential). See here for the Jan 2017 Kootenay Zinc Form 9, which lists Gwen Preston (plus Tommy Humphries, Chris Parry, among many other characters) as subscribers to a $0.20/unit PP (shares plus half-warrant @ $0.30/share strike price). Interesting to note that by the time the PP closed the shares were trading at about $0.55/share, so the placees seem to have gotten one hell of a deal. What a shrewd and lucky lot!

Henceforth did the pump well and truly begin, including this podcast appearance by the Maven within mere days of the PP closing. The placement holders didn't even have to wait the normal four months either, as ZNK changed the tersm to allow them to liquidate 25% of their holdings at the end of February, while it was still a forty cent stock. Thay got another 25% out in May, but by that time the collapse was in full gear. The stock has since done a 10:1 rollback and now trades for $0.06/share (or $0.006/share on a pre-rollback basis, i.e. less than a penny). If you'd bought shares at $0.50 (pre-rollback basis), you would have made a whopping return of negative 98.8%. What fun for Maven subscribers!

The simple fact is that 90% or more of junior mining NLWs are pumpers looking to dump their cheap shares on their flock, the latter of whom actually pay for that masochistic privilege! NLWs, by and large, are promoters full stop. Far from adding luster to a story, their involvement in a stock should be viewed by anyone outside that company's inner circle as a kiss of death.

My coffee mug explains capital markets action for the rest of 2018

Bought from Ebitbrah:

Get yours in for Christmas, before stocks run out. Link here.

A nice explainer on The BridgeMark Group scam

Right here. An extract:

As an example of what occurred, BCSC outlined how four of the 11 issuing companies (Green 2 Blue Energy Corp., Cryptobloc Technologies Corp., BLOK Technologies Inc. and New Point Exploration Corp.) raised nearly $18 million by privately placing (selling) shares directly to the various BridgeMark members.

The companies then returned $15.3 million to the BridgeMark members in so-called consulting fees, leaving them with $2.7 million. The members, now down $2.7 million, then sold their shares (which were originally issued on a free-trading basis) for $8.8 million, thus raising about $6.2 million in allegedly illicit profit.

“In addition to being quite bold, it’s quite clever. You get the money and back it goes. It’s simple enough, not overly complicated; but I guess that’s the charm,” said Woods of the allegations.

Full story here and notice a little further down the report the reference to Kootenay Zinc (ZNK.cse), as IKN will have a post on that stock coming out later today.

McEwen Mining (MUX): Puppet Show and Spinal Tap

"If I told them once I've told them a hundred times, to put Spinal Tap first and puppet show last,"
  Jeanine Pettibone, This Is Spinal Tap

Today brings another example of a junior trying to bury the real news below the flying sequins, McEwen Mining (MUX) telling us all about its fabulous plans for the proven money pit it bought from Primero. Here's the title:

MCEWEN MINING ANNOUNCES 2019 TIMMINS 

EXPLORATION STRATEGY AND FUNDING

Get those last two words? And here was me, thinking that the idea of buying Black Fox was to...

1) Make a profit on your operation

2) Re-invest that money into projects

3) Grow organically and accrete shareholder value

...but no, actually making money by producing gold and silver....that's so oldskool. So instead of making $15m, the guy with the teeth who promised you he'd look after you retail guys is going to take that upside away from you all.

The Aphria $APHA Scotia post this morning results in an interesting conversation...

...via DM with a person who will remain nameless, but it's fair to say that this person is not my peer when it comes to Canadian capital markets; This person is waaaay ahead of me and has forgotten more than I know about the subject (yes, I know I'm lucky to get to have conversations with these people, no need to point it out). I'm going to call my friend "VEP" (very experienced person).

Anyway, it turned into an interesting exchange and as I've been given permission to share right here, that's what you get. It was a DM conversation so I've brushed up the grammar and tightened the words very slightly, but changes are few and there's no meaningful difference to conversation we had (apart from at the very end where I have left off the bye-bye bits). I'll indent my bits and put them in italics, to keep your eyes on the important person's words in the exchange (hint: not mine). Read on:

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Very Experienced Person

Saw your note tearing the Scotia guys a new one. To be fair, the problem is systemic and relates as much to the buy side as to the sell side analysts. The fundamental problem is that sell side firms no longer get paid to do research.  It wasn't always the case. In the days of fixed commissions there was money enough for guys to do the work, kick the tires, do site visits and sincerely appreciate opinions as to their "top pick". Then fixed commissions went the way of the dodo and there was less money.  Then tech came along and lowered transactions costs. Then discount brokers came along and broadened access. Then DMA came along and cut out brokers altogether. Then ETFs and algos came along and made stock picking irrelevant altogether.

At each turn money for research went down a notch and at each turn, research looked to banking to make up the difference. Nowadays, banking funds research. This is technically illegal but utterly ubiquitous. Those guys picked Aphria because that's where they thought they'd get the most banking fees. Everyone knows this, yet no one talks about it.

I'm not sure what the solution is, but sunlight, as they say, is the best disinfectant. Research should be labelled advertising, because that's what it is. Don't bury it in the disclaimers in fine print, put it right up front in 48pt font. Anyway, that's my two cents.

IKN 

Thanks. Much to agree with there. I see this shit going on all the time, but I think the point here is that this one is an egregious example. You pull your own research note after just 6 weeks? And key word there is "example"; An example has to be set, so this blatant nasty is a good place to start. To be honest, I think the whole brokerage system is going the way of the dodo, but that's a larger story.

Another thing; nobody talks about it in public, you say? Well why not start! I'd love this DM conversation to be out there and in the public realm, just your screed above would make for a great post on the blog. I could do it with your name, or go anonymous route. Waddya say?

VEP

Feel free to pull the pin on the exchange but please keep my name out, thanks.

IKN

Okey dokey.

VEP

One more thing: Regarding the dodo, I think we are all worse off with the current state of affairs. Superior investment returns come with the efficient allocation of capital, yet the efficient allocation of capital is predicated, or at least strengthened, by a free and honest exchange of ideas. Now that equity research is largely banking-driven, investment decisions are made on the basis of a conversation that resembles a collection of used car salesmen pounding hoods and wearing funny hats. Who wins? Certainly not the investor, yet these inferior returns are masked insofar as the impact is market-wide, a market that is largely gone passive anyway.

IKN

The root of the evil is brokerages skipping over their fiduciary duty to clients and cozying up to the sources of 8% placement commissions.

VEP

I don't disagree. But these clients are getting exactly what they pay for, namely, not that much.

IKN

There is that. Brokerages are businesses and will follow the money.

VEP

Which is only to say that there is much blame to go around. It is everyone's fault and no one's fault, all at the same time.

IKN

We're back to your 48pt banner comment.

VEP

Actually, the root of all evil here is Bogle (IKN note: This refers to Jack Bogle, founder of Vanguard and normally understood to be the father of the passive investment model). It was his great insight to say, "Why try to pick an active manager when you can buy all of them and not pay for any of them!" Hence the start of passive investing, freeloading at its finest.

IKN

And here we are in 2018, it's turtles all the way down these days.

VEP

It worked well when passive was a small component (even if immoral), but now that just about everything is passive (or passive-esque, as index hugging is); the whole thing is on autopilot. No one is driving the bus and no one even knows the difference. We are all frogs boiled slowly.

IKN

It's sub-primey.

VEP

Can't stop dancing while the music plays on, eh?

IKN

You see other sectors, I just look at miners. And I look at GDX(J) for examples, propped up by holding 10%+ in All-Them-Miners.

VEP

Yes indeed (and then the conversation ends).