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4/7/18

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

...in reverse order:

Third Place: "Brent Cook meets Kevin Heather of Regulus Resources (REG.v) and...". A great little video and one of the first times REG has hinted in public about things it's been working on for a long time.

Second Place: "Glencore (GLEN.L) (GLNCY), beating up old ladies in Cusco Peru". This week's most important story on the blog, mining companies simply cannot do this stuff any longer. Enough already, it's 2018.
 
First Place: "Codelco's "CopperCoin" to Revolutionize Metals Trading (UPDATED)". The April Fool joke post. Always a fave.

4/6/18

Further to the Torex Gold (TXG.to) news today...

...that announced the end of the blockade of the mine by locals, IKN would like to congratulate Fred Stanford for his wonderful leadership and join the applause for the way he has brought such impressive shareholder returns to the company. It is his example that we shou...


...oh.

By the way, just loved that bit in the NR that went "...peacefully resolve this dispute over union representation". Just the three deaths so far, isn't it?

The Friday OT: Ólafur Arnalds, Alice Sara Ott; Verses

The opening track from their album The Chopin Project, which has been on repeat-loop at IKN Nerve Centre this week.





A new gold miner pick in The IKN Weekly this Sunday

This weekend The IKN weekly's main feature is a full NOBS report in which we do some deep number crunching on a gold mining company that's improving rapidly, is delivering to the letter on its development plan and timeline but is still significantly undervalued, both to peers and on a standalone basis. This one has been fun to model because it's all about the numbers and it's the main reason I haven't been out the house for the last two days. I'll be buying a few of these shares next week (as subscribers know, I buy after not before). See you Sunday.

4/5/18

I am having a serious issue with Sandstorm Gold (SAND) (SSL.to) this week

How can a 43-101 compliant resource like this one for Hod Maden...


...as revealed on Friday evening by 30% owner Sandstorm Gold (SAND) (SSL.to), be all-but forgotten by the market in just three days? Seriously, what's a miner gotta do these days, announce they've found a lost cache of a hundred thousand Bitcoin on one of its old hard-drives?


And not just forgotten and back to neutral, SAND is actually negative for the week. This is gnat's memory-span stuff, I mean look at that table it's 12g AuEq at a two gram cut-off! Or in the words used to describe the numbers in The IKN Weekly on Sunday...

Using metals prices of U$1,250/oz gold and U$3.00/lb copper, the 43-101 ignores other credit metals (assumes them non-payable) and gets us to a global M+I resource of 11.545m tonnes at 12.1 g/t AuEq and if you do the math, that’s just shy of 4.5m oz AuEq.



This is certain to form the basis of the upcoming Pre-Feasibility Study (no inferred allowed in a PFS) and with a 12.1g average using a 2g/t gold cut-off, even though we don’t know what the economic study is going to give us we do know that SAND (30%) and its partner, the Turkish mining company Lidya Madencilik (70%) is going to have one humdinger of an underground mine project on their hands. I’m going to wait with the rest of you for the PFS to come out before committing but for sure I’ve been playing with numbers so here are a couple of simple lines to get us in the mood:



  • On just this M+I resource (not forgetting there is masses of exploration upside potential at Hot Maden, a 2,500 tonne per day underground mine operation would have enough rock for 13 years of operation.


  • At 12.1g/t AuEq and 85% recoveries, that would represent production of nearly 300,000 oz AuEq per year.


  • As the 43-101 technical report gives us a 2g/t AuEq cut off and U$1,300/oz gold price, we can assume they’re working on a per-tonne cut-off of U$83.60. As I like rounding up and being conservative, let’s call that a $90/tonne cost cut-off.


  • 300,000 oz gold at U$1,300/oz is U$390m.


  • $90/tonne X 360 days X 2,500 tonnes per day is a cost of U$81m


  • Now that’s what I call margin.


Of course there are a whole bunch of other things to take into account and gross margin is not bottom line profits. But needless to say, I’m looking forward to the PFS now.



Daniel "Davidoff Cigar" Ameduri has one month left to save Future Money Trends

We remind readers what Daniel "Davidoff Cigar" Ameduri told readers of his promo shop, , "Future Money Trends", in May 2017, about his reco on the zinc junior exploreco Zinc One (Z.v). We quote his exact, published words:

 Dear Reader,

We are so certain that this extremely undervalued company is a strong buy here, we are staking our entire careers on this single stock pick.
 
I, Daniel Ameduri, fully expect this company to lead the rally for zinc stocks, to the point that if my recommendation to you here today at CAD$0.65 doesn’t at least double over the next year, I will officially close down my letter.
 
In fact, I see this stock as a coiled spring, and I believe that I may be proven right over the next 30 days, with 11 months to spare!

Here we are in April 2018 with just one month to go before time's up on that C$1.30 target for this Keith Neumeyer pumpjob for which Ameduri was paid $250,000 to run (and has a total advertising budget of around $700k, we hear). Let's see how Zinc One (Z.v) has got on since those words of CigarMan:


Hmmm...looking a bit bleak for your company's future money trends, Dannyboy. The pipes the pipes are calling.

But hey Danny, you could always lie and cheat and BS and pretend you never published or said that...but I'm sure an upstanding guy like you wouldn't even have thought of that. Right?

Glencore (GLEN.L) (GLNCY), beating up old ladies in Cusco Peru

A pleasant story out of South Peru this week. On Tuesday April 3rd a contingent of Peruvian police officers under the direct pay of Glencore (GLEN.L) (GLNCY) and employees from its Antapaccay mine showed up at the homes of the small community of Alto Huarca with heavy machinery (bulldozers etc) in an attempt to force the local residents off their land. 


  • The GLEN Antapaccay mine is currently in an expansion phase on the North side of its pit wall.
  • The mine has decided it needs new access road that cross the land owned by families in the Alto Huarca community.
  • Recently, representatives of the company been "bothering (them) day and night" to get the community to sell them their land. They tell them that they can either accept the U$200 (two hundred dollars) that they are offering, if not the case will be taken up by the government, they will get their land confiscated and receive nothing.
  • Locals have refused point blank and have not heeded the threats used, either.
  • So on Tuesday a gang of eight GLEN employees showed up with heavy machinery, with police officers paid by the company, in order to force them out and bulldoze their properties etc. When the locals resisted, they were pushed, kicked and verbally abused.

And you may think the victims of this violence were a bunch of swarthy farmers, too. Not so:



GLEN.L is into beating up little old ladies. Those photos from the report. Nice.

Fortunately the locals knew how to get a lawyer on the scene quickly, phoned him and once he showed up the Glencore thugs and police backed off and left the scene. Alto Huarca's community is the rightful owner of the land in question to this day, it remains to be seen what dirty trick GLEN.L next uses to change that.

4/4/18

You are cordially invited to come play with me


It's been ten days or so since re-joining Twitter and it's becoming a lot of fun as my thought of getting a few dozen people to follow and chat with has already turned into over 400. Particularly liking the chance to back and forth with IKN readers, both via tweets and DMs. So come along and join the throng*, here's the link and once I follow you back (which I will, unless you're a locked account) feel free to say hi.

Sandstorm Gold (SAND) (SSL.to) 1q18 sales

NR here, chart here:



You be the judge.

PS: FWIW the JV involved has changed the name of Hot Maden to "Hod Maden", which explains why it appeared the way it did in the last SAND NR. Apparently to better reflect local customs or language or somesuch. Anyway, now you know.

Bad news for Goldmining Inc (GOLD.v): Jaime Pinto and Carlos Yrigoyen got to Crucero before they did

Do you remember those two names, Jaime Pinto and Carlos Yrigoyen, part of the Daryl Hodges band of thieves who tried to strip the Ollachea gold project out of Minera IRL? Well here's a great example of how these scumbags operated in the Peru mining sector (past tense, they're both untouchable these days) and also shows how poorly run Amir Adnani's Goldmining Inc (aka Twatmining, as it doesn't try to mine gold, merely looks to mine the pockets of naive retail twats with tales of shiny beads).


This report out of the town of Crucero may, just may suggest that Goldmining Inc (GOLD.v) didn't do much DD before buying the Crucero property from Lupaka Gold (LPK.v) last year for the sum of CAD$6.35m (3.5m shares of GOLD.v at the price that time, plus $750k in cash). To get the basic structure, we need to consider the following:
  • Back in 2009 Lupaka Gold (LPK.v) picked up the Crucero property in the Puno region of South Peru. At first they made progress, got agreements with locals, did drilling, put together a resource etc etc.
  • As it turns out, for mainly technical reasons Crucero didn't turn out to be a great thing (poor met, location tough, big NSR on top) and the project has never prospered much but hey, that's exploration stage mining for you.
  • However, things took a decided turn for the worse in 2013 when the despicable duo of Jaime Pinto and Carlos Yrigoyen, who were officers and directors of LPK at the time (both out since then), decided to take community relations into their own hands and do it their way. After seriously annoying the locals, who then ran the company off the property, Pinto and Yrigoyen brought criminal charges against four members of the Murga family, the people who own the land at the Crucero site. The charges included aggravated robbery and usurpation, serious accusations which carry bigtime jail sentences in Peru.
  • The charges were complete BS, yet another example of Jaime Pinto's corrupt strategy making false accusations against anyone who tries to get in his nefarious way. But due to the nature of the Peru legal system, the charges have remained over the heads of the Murga family for the last five years with the threat of serious jailtime if they were ever found guilty. And as we know, Pinto has a habit of getting corrupt judges into his pocket as the Minera IRL saga shows (see IKN posts here, here and here from late last year), so the Murga family had reason to be worried, but to their great credit they never backed down and have fought to get the case in front of a real judge and courtroom.
  • We cut to this year and, while all that PPK resignation thing was filling the country's headlines, this report appeared announcing that the courts in Peru have thrown out the case brought by Jaime Pinto and Carlos Yrigoyen in the name of Lupaka Gold against the Murga family. In fact, the case was laughed out of court by the judge.
  • The Murga family have now started legals actions against Lupaka Gold for damages which can and may include a multi-million dollar judgment against the company. The case is obviously strong, too.

As always, when a mining company buys a project like Crucero, it buys the wholly-owned subsidiary of the mothership. In this case Goldmining Inc (GOLD.v) bought Pacacorral SAC and that's the entity with all the assets. And all the liabilities of course, and one of those is the legal action that they probably didn't read about while doing their DD, if they did they were stupid enough to ignore it and its consequences, now it's in the process of blowing up in their faces. It may turn out that liquidating Pacacorral and just dropping Crucero is the most cost-effective decision for GOLD.v. And that would be both funny and apt because in the end in this life, what goes around comes around.







By the way, this blog is now ten years old

I care so much that I didn't notice then remembered a few days later, now a third person has nudged me and said I need to celebrate the fact or something so here goes, better late than never. 

On March 11th 2018 this here IKN blog turned ten years old and I can even prove that. Here's a screenshot:


If that was a mission statement of sorts, then it's been more or less adhered to. Of course things have morphed because that's what happens over a long period of time; We don't do much economics stuff any more, regional politics is a minor input but still gets some play, the LatAm macro market stuff has all-but disappeared and for sure the blog has a different central focus, these days we're about mining stocks and specifically the fun and frolics going on in the junior market. But there's nothing above that's outright discarded, which isn't bad.

Another thing that's changed is the viewer count. Most memories on this are vague and I'd need to check the stats back office to get it right (uninteresting in the extreme), but I do remember a couple of weeks after writing that post how impressed I was how 30 people had turned up and read the blog even before the market had opened. A quick glance at the main Google Blogger stats backpage shows over 18,000 hits so far today (it's 10am) and we're closing in on 30m all-time views. Not exactly The Drudge Report, but not bad for what is and will always be a niche publication.

So anyway, happy belated birthday IKN, this humble little corner of cyberspace and above all thanks go to you people, the eyeballs that show up on a regular basis. I don't thank you people enough for coming over and that's remiss, if it weren't for the reception you give the blog it wouldn't be anywhere near the amount of fun it is for me to write it. So sincere thanks, IKN readership, you are greatly appreciated.

Okay, now for the next decade. Onward.

4/3/18

More on the METALOR illegal gold story

Further to the news broken by Ojo Publico yesterday about the way Swiss precious metals refining giant METALOR has been accepting illegally produced gold from the Madre de Dios region of Amazon basin Peru, we have interesting information to pass on.

Canada's Scotia Mocatta does plenty of business with Peru produced gold and several businesses sell gold to the company, including METALOR. We hear from reliable sources that since last week  Scotia Mocatta has been withholding payments to all Peru domiciled suppliers of gold until further notice. Scotia Mocatta is demanding extra compliance work be done to guarantee the legal status of the gold it buys and is conducting its own DD on bonafides of the supply companies. In other words:
1) Word has been out in the bullion world on this Ojo Publico story for a few days, probably coming from the Peru customs and tax people.
2) Scotia Mocatta is now being very careful that it doesn't leave itself open to problems and quite right too. Canada has strict laws about knowingly trading in illegally mined products.
3) Most importantly, if you're METALOR this story is not going to go away. They are deep in the doo-doo and if Scotia Mocatta is doing this, you can bet that a lot of other financial houses are doing the same.

Again, congrats due to Ojo Publico for its great reporting and bringing METALOR to account.

Good news for Atico Mining (ATY.v) holders

Louis Lobito Little Wolf James called sell on the stock this morning. This is good news because:

1) It explains the drop and means it's temporary.
2) The fewer complete assholes covering ATY, the better.


Ecuador: President Lenín Moreno just announced wholesale tax breaks for FDI and exporters

You're welcome. Here.

Chart of the day is...

...copper, weeklies:


Torex Gold (TXG.to): Read the small print

Torex (TXG) published its 2017 Annual Information Form on SEDAR last night...late last night at 10:39pm. And buried on pages 13 and 14 is this (IKN highlights):

"On February 21, 2018, the Miners Union initiated an illegal blockade of the El Limón pit portion of the operations. This pit constitutes 80% of the scheduled ore  production for 2018. While the Company was not scheduled to be working in the area of the El Limón pit at that time, the Company had planned to resume working in the El Limón pit in mid-March 2018 because as per the mine plan, the Guajes East pit has been mined out and the Guajes West pit is in a waste stripping phase in 2018. If the blockade of the El Limón pit is not lifted or removed, the processing plant is expected  to consume all the available ore from stockpiles and other mining operations by the first week of April 2018."

So now you know.

UPDATE: And this section, from the AIF's 'Risk Factors' section, is just about the most wonderful I've ever read:
The ELG Mine Complex has brought new wealth to the area, and for some, the land leases, jobs, and business opportunities have created a distinctly improved set of economic outcomes. However, not everyone has been able to take advantage of these opportunities and for those who have not seen a dramatic change in their lifestyle, they now see others in their community with wealth that they do not have. This has been perceived as unfair by some members of the community, and most of the blockades to date have been an expression of that perceived unfairness. The Company has been working with the government to mitigate this risk of blockades, and it is expected that the economic benefits of the ELG Mine Complex will reach more local citizens once the government’s mining fund, which is supported by royalties from the ELG Mine Complex, starts to invest in the region. There is no assurance that the Company’s efforts will be able to effectively mitigate such risks.

Ottotrans: "It's not our fault that we're so wonderful and nobody told us that Guerrero is a difficult place, those small brown people should be happy and it's just not jolly well fair."

4/2/18

And while we're at it, one month of Victoria Gold (VIT.v)

Follow the bouncing ball:

  • March 8th: Victoria Gold (VIT.v) announces the C$505m financing package for its Eagle project and IKN has a good old laughing chortle about it.
  • March 12th: Peter Snowflake Arendas runs his pumpjob on the stock, full of numerical dumbassery, put a 75c target on his stock. If he's not getting paid off by this company for writing such drivel he's even dumber than he reads in print.
  • March 13th: IKN has another chortle about that bit, the latest episode of "Retail Gets Reamed By Vancouver"*
  • March 15th: Our math genius Snowflake tries to backpedal on his buffoonery. Nope, we're having none of that.
  • April 2nd: Oh dear:



And it's not even half way to where VIT.v going yet, that's 22c because that's all this blown-out shareholder rip-off of a project is worth nowadays (see that last link for more...there's math and everything). Arendas won't tell you though, for that you need an independent anal yst with a fat mouth and a better understanding of project economics. 

PS: Aye you're right, this is the same stock Byron King over at Agora got his flock to buy at 60c and 80c a couple of years ago. So why not get in on this act and join the throng, dear reader? You too can become a financial writer and newsletter publisher, the barrier to entry is low.


*a long-running series

Why I was stupid about Erdene Resource (ERD.to)

Back in this post from December 2016, this humble corner of cyberspace had a good laugh and chortle about a BS pump drill hole announced by Erdene Resource Development Corp (ERD.to) at its project in Mongolia. A flashy-as-hell headline assay but drilled straight down strike, no way would anyone fall for this poppycock and piffle, right?

Wrong. 

Another example of my classic mistake on the junior exploreco sector, the bit where I forget it's full of people dumber than a sack of nails. The stock price held up, the newsletter writers piled on, the nodding donkeys insisted that the company took their money and off we jolly well went:


Pretty stupid of me I openly admit, once again I didn't expect you guys out there fall for this crapola. I should have known better and those behind the plan obviously did. Mind you, it took a full five quarters but the inevitable happened and we're back where we started, transference of currency from one pocket to another is complete, who needs to mine rocks to make money anyway?

Money moving into silver stocks this morning

It's not something you can point it easily or show a chart or two to illustrate either, it's an observation after doing some close ticker-watching this morning. The right sort of lumpy, regular purchases in a range of silver stocks tell me there's at least one serious sized fund positioning in silver. The patterns are different from the gold stock moves today and the targets are specific, this isn't buying via an ETF entry.

But hey, don't take my word for it...

METALOR of Switzerland, caught trading in illegally produced gold

This is a great report out of Peru's investigative reporting team "Ojo Publico" (public eye) that follows the paper trail and shows how Switzerland's METALOR, one of the biggest precious metals refineries in the world, is willingly dealing in illegally produced gold from the Peru's infamous Amazon basin region Madre de Dios.

It's in Spanish but this is 2018 and that shouldn't put you off, Google Translate exists. Go read it right here.

Brent Cook meets Kevin Heather of Regulus Resources (REG.v) and...

...Brent finally gets it. Oreninc has the write-up on this page, you get to watch the show right here:



What happens when two of the sexiest men in the whole wide world talk about sexy rocks, watch this to get just why this humble corner of cyberspace has been panting and sweating about Regulus Resources for the last couple of years.  The youtube link.

4/1/18

The IKN Weekly, out now




IKN463 has just been sent to subscribers. Reviewing lots of things.

PS: Just so we're all good, I spotted the error as soon as it was pointed out to me. Middle of page nine has the word "indicated". Should be "inferred". Brain fart.

Why Torex Gold (TXG.to) doesn't want to deal with Napo

First Majestic Silver (FR.to) (AG) has just agreed on a 14.5% pay rise for its workers (7.5% direct on salary, 7% on sliding scale bonuses), the deal brokered by the union run by Napoleón Gómez Urrutia, aka "Napo". The same union force that Torex has refused to allow into its operations in Guerrero. And by way of cherry on the cake, Napo happens to be a staunch support of Mexico Presidential election frontrunner AMLO.

Does it comes as a shocking surprise to find out that FR understands how to do business in Mexico better than TXG?

Codelco's "CopperCoin" to Revolutionize Metals Trading (UPDATED)

Mining takes another step into the world of crypto. Here's Reuters on the news out of Chile this morning.

Santiago - In what experts and industry leaders are already calling "an existential threat to the London Metal Exchange" Chile's State-owned mining company Codelco today launched 'CopperCoin', a blockchain-backed token system designed to facilitate metals purchasing and transactions with the companies main Asian markets.

During the launch press conference in the capital Santiago, Codelco's president Nelson Pizarro said, "The substantial cost advantages of CopperCoin to both our company and our major clients in South Korea, Japan and China make it an obvious choice for all future transactions. This market-changing initiative again demonstrates Codelco's commitment to progress and efficiency in the 21st Century."

The move was welcomed by copper industry executives such as Park In Meeta, Head of the copper smelting division South Korea's KORES, the massive metals manufacturer chaebol. "We are happy that the often prohibitive costs of futures contracts run by third parties can now be by-passed in a reliable manner, the savings on transactions will be shared between buyer and seller. No more middle-men is an outstanding example of the positive effects of market disruption," Mr. Park told Reuters in a phone interview.

However, some industry watchers were less impressed with the announcement. According to Micheal Hopwell-Frost, head of futures trading at BNP Paribas London, "Codelco will live to regret the decision to by-pass the LME (London Metal Exchange) for futures settlements and go it alone. What they call "revolutionary" is nothing short of an existential threat to the city's markets and sets Chile on crash course for an international incident with The UK. With Brexit causing nerves, the prospect of the copper industry by-passing us will be too much to bear and wholesale redundancies are almost inevitable. I personally will be consulting with my lawyers to decide the best course of action, including the potential for a legal suit, suicide or upping sticks and moving to New York, which is tantamount to the same thing."

UPDATE 12:01pm: An important update.



PPS: The typo was accidental. I'll leave it there, for comedy reasons.