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7/14/18

Great Panther Silver (GPR.to) ($GPL) at Coricancha

It's going to be interesting to see what Great Panther Silver (GPR.to) (GPL) comes out with as a news release Monday morning on its Coricancha PEA, filed on SEDAR last night. Will they assume nobody has read it and just pump the sexy looking IRR number? After all, it doesn't take much looking to find script that indicates...
CMC is highly sensitive to process plant head grades, gold and silver prices, and operating costs. Variances associated with these factors pose a high risk to the project economics.
And
Based on this TR, the Qualified Person recommends additional drilling and exploration activities designed to upgrade the existing Resource classifications and expand the current Mineral Resource inventory. Details on the extent of exploration programs are to be determined however are estimated to cost up to US$1M to US$2M per annum over the next two to three years. In addition, associated mine rehabilitation and development costs could be up to US$3M.
And
The Qualified Person also recommends additional technical studies aimed to reduce risks and increase the level of confidence regarding CMC advancement. Depending on the level of detail for technical work, these are estimated at US$600,000 to US$1,000,000 over the next one to two years.

...how much of a White Elephant this project is. Though one thing's for sure; if they decide to ignore the PFS or FS stages and move straight to development and construction on the back of this PEA, we'll know far more about GPR's management than we ever will about Coricancha.

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

...in reverse order:
.
Third Place: "Kirkland Lake and Kinross: A birth story ( $KL $KGC $K.to )". That's good, I liked this one too. Also, I learned many years ago that the IKN readers say are more interesting than IKN.

Second Place: "Excellon Resources (EXN.to): I want to believe". Surprisingly popular post. As they say round these parts, la esperanza es lo último que se pierde.

 
First Place: "Fantastic resource for fundamental research on mining companies". Most pleasing to see this post get #1. Short script, but with a link like few others in the mining world. An impressive resource, use it yourself.

7/13/18

The Friday OT: Genesis; Supper's Ready

It was a few weeks ago, I was reading some-or-other music review and the author made a passing reference to Genesis and "the stunning Supper's Ready". On reading I was, "Oh wow, I had that album (Foxtrot) and used to love that track, haven't heard it in years. I wonder how time has treated it?" etc etc. So thanks to the wonder that is Spotify (seriously, kvetch if you like, I love it) I was listening to it within about a minute.



So yeah, it's prog rock, some lyrics are suitably weird (Peter Gabriel reads The Book of Revelations on LSD) and some segments that stand up better than others, but hot damn it's still great stuff and these guys really knew how to play. Above all, aside from the archetype early 70s fade-out at the very end the last two segments, Apocalypse in 9:8 and As Sure As Eggs Is Eggs (Aching Men's Feet), are just wonderful. Give Phil Collins credit, top drumwork.

If you've never heard 'Supper's Ready' before, this is a million miles from the Post-Gabriel era of Genesis and its formula tosh, so give it a go. If you know it, hope you enjoy the re-visit as much as I did.

Youtube here. Alternatively, check out the live performance vid here. There's also a decent wikipedia page on the song, here.

Excellent reporting on a stock scam

It's authored by Chris Carey, it's on Sharesluice and it starts like this:

Three companies whose stock made big moves last year are linked by undisclosed relationships that raise numerous red flags about the deals that helped attract investors, boost share prices and enrich certain players.
A Sharesleuth investigation found that financier Barry C. Honig and a handful of associates sold at least $70 million of stock in those companies — PolarityTE Inc. (Nasdaq: COOL), Marathon Patent Group Inc. (Nasdaq: MARA), and Riot Blockchain Inc. (Nasdaq: RIOT) –- as their share prices rose by triple digits, then tumbled from those highs.

This is a must-read for anyone who invests, not least those junior mining where the people behind this shell game scam learned their trade and how to rip you all off. Fantastic part one, cannot wait for part two. Make it your weekend longread, click here and go see.

BMI Research on Argentina and mining

My thanks to reader P for the heads-up. I'm just going to leave this here...


...because anyone who reads BMI Research's opinion on Argentina and then is stupid enough to act on that ridiculous assessment of the country by investing in its mining sector when they could have gone to a serious country is in for a religious experience. Article.

7/12/18

Excellon Resources (EXN.to): I want to believe

Excellon Resources (EXN.to) is a stock I held from late 2016 to early 2018, finally giving up the position (for a minor profit, but considering the plan it was basically a wash) after one disappointing quarter too many. But it's one I've kept watching, not least because if it does get its act together and start producing the way it could now the La Platosa mine is dry it could be a sudden big winner. So it was good to see its 2q18 production numbers today because...


...that's a distinct improvement. However, but but buttybut but, I'm not in a hurry to race back into the stock because it has a few things to prove yet, starting with the financials from that production number. When they get filed in mid-August I'll be looking for lots of things, including...



...this. Previously, EXN would get around 90% of its production in the payables column and that's what my estimate bar on the right represents (approx 573k oz AgEq). However, in 1q18 the breach between the two was 15.6% and that's too much, it smacks of by-product metals stuffing the AgEq number without having enough hard cash to support it. So let's see how close EXN gets to 573k payable, yeah? That and things like being operations cash flow positive, EBIT positive etc. Then there's the question of how much the strong Zn prices helped and whether we'll see that lift in Q3 and beyond. So treading carefully here, but I want to believe and though neutral the stock today, would be happy to see them report a couple of blowout financial quarters to reward its loyal holders.

Costs will rise substantially at Torex Gold (TXG)

Reading this news report about the support given by mining union members to Napoleón Gómez Urrutia, normally known as 'Napo', and the election that he helped secure for AMLO, plus the way he expects to win back control of plenty of mining union representation in the country (the specific report was about a coal mine in Coahuila, but read this on Napo's thoughts of the future of mining in Mexico and you'll see it will apply everywhere), and it suddenly occurred to me that salaries and conditions of work at Torex's (TXG) Media Luna mine in Guerrero are about to improve considerably.

HIVE Blockchain Technologies (HIVE.v) has a price chart that's almost exactly right

If it hadn't given up on the rally of that started end June...


 ....it would have been picture perfect.


But no. Sad!

That South Park banker dude looks a bit like Frank Holmes, too. Anyway, those annuals are filed on July 18th. Be there or be square.

Wesdome Gold 2q18 production

NR here, numbers below:


That's 14,767oz from Eagle UG and 1,860oz from Mishi. Solid without sparkling. Revenues 2nd best ever at a preliminary C$31.4m, as sales sequencing saw 18,573oz sold. So far WDO is running better than the top end of guidance and I'd expect them to raise it slightly when the financials come out in August. End.

Fantastic resource for fundamental research on mining companies

Right here. Check it out, zoom in, play around, choose a few to click on to get the hand of it. Really one of the most impressive resources for 43-101 reports and suchlike I've ever come across. All free too, including the weekly mailer. Thank you A. Reader for the heads-up yesterday.

7/11/18

The rights of a community to stop a mining project

So I ran one of those 24 hour polls on Twitter yesterday (and by the way, I'm enjoying Twitter this time around much more than I expected). Here's how it turned out, notes below:



With 129 respondents it's not a bad sample size, It's around 100 that we begin to get inside reasonable margin of error deviations, (at 130 it's around +/-8%) so that's quite nice.

We should note that the people who answer this have access to things like computers, smartphones, Twitter. They're likely to be market participants too, we're not talking about a broad cross section of humanity.

I phrased the question deliberately as a yes/no to the most simple question possible. By distilling it down, the people who see both sides of the argument and understand the nuance (which I suspect is most of the people who clicked that button) need to make a hard choice.

The 60/40 split is interesting. Feel free to have a think about it, too.

Wheaton Stuff & Things (WPM) and the price of cobalt

This humble corner of cyberspace wonders out loud whether the great and the good sitting in the C-Suite at Silver Wheaton (SLW) Wheaton Precious Metals (WPM) Wheaton Stuff & Things (WST) have seen the price of cobalt recently:

Look, I may think that new fangled Cobalt27 thing that took the U$300m chunk of the stream is a waste of time and money, but at least you're going in with eyes open on that if you decide to buy into it. Want to speculate on the price of cobalt? Step right this way, madame/kind sir. But WTF is Wheaton Precious Metals doing here? Did you bother considering the three words in your corporate title? I mean, you guys were claiming a skinny 8% IRR at the spot price at the time, how's that looking now, Randy? 

References include the June 11th NR here, and the necessary LME page here.

7/10/18

Van Eck has been buying Atacama Pacific (ATM.v)

According to the RegF today, Van Eck (the ETF people) have added 4m shares of Atacama Pacific (ATM.v) to their holdings. Which is interesting, considering that next week the shareholder approval meetings happen for the merger between ATM and Rio2 Ltd (RIO.v). This from the SEDAR filing today:
As of June 30, 2018, the holdings of the ETF Business Unit over which VEAC has investment authority is 15,230,200 common shares of the Issuer, representing a security holding percentage of approximately 17.83%, assuming approximately 85,404,244 total issued and outstanding common shares.
Also interesting is how Beacon Securities has beaten all other sell side brokerages to the punch on Rio2 and opened coverage on Rio2 today, with a buy call and a target price of $1.75.

WTF Copper

I'm sure you don't mind me asking, but WTF just happened to the price of copper?



A couple of days ago, reports were going round of a large player in Shanghai's SHFE bailing on a $900m long futures position in copper. That's what last week's weakness was blamed on and I for one breathed a small sigh of relief.

Which was clearly premature.

UPDATE: Ah right, another U$200Bn of tariffs for China. That might explain the knee-jerk.

Zinc: Big stink

Think sink in the drink, zinc:



This is why Zn projects plug U$1.15/lb into their economic calculations, rather than the $1.40 or $1.50 of a few short weeks ago.

7/9/18

Angry Geologist does Pretium ( $PVG)

Right here. And as TAG says...

"Now the hard part - they have to maintain it, as they can't use the 'ramping-up' excuse anymore if they don't meet their projected production figures."

 Go and enjoy.

Argentina's economic miracle under Mauricio Macri

Happy Birthday, Argentina! It's 9 de Julio, it's Independence Day and one of the traditions there is surveys and polls to show the state of play in the country, according to its population. Here's the link to the Gustavo Córdoba & Asociados survey, here's one of the slides (your humble scribe adds translation):


So you think things look bad now, with rampant inflation and a cratering currency? You ain't seen nothing yet, dear and kind outside observer. No cherrypicking outliers here either, this result is right on the median with other pollsters.

Kirkland Lake and Kinross: A birth story ( $KL $KGC $K.to )

Yesterday in the Weekly IKN476 I mentioned in passing (literally just a line or two) that the market cap of 2018 sector hotpot Kirkland Lake (KL), now at U$4.6Bn or so, is closing in fast on that of Kinross (KGC) (K.to) at U$4.8Bn. At the start of the year U$2Bn separated them, it's down to less than U$200m.

A couple of hours later, I got this in the mail from A. Reader:
“Lac Minerals was acquired by Barrick Gold Corporation in August 1994.  After a short period of operation by Barrick, the property was sold to Kinross in May 1995.  In Sept. 2001, Foxpoint purchased the properties from Kinross Gold Corporation.  Included in the purchase were the Macassa Mine, mill, paste plant etc., Lakeshore, Kirkland Minerals, Teck-Hughes and Wright-Hargreaves properties.  Foxpoint changed its name to Kirkland Lake Gold Inc. (KLGold) in October 2002.”

In other words, Kirkland Lake started as an asset that Kinross sold to the founders. And how much did they pay, you ask? The answer is $5m

So, Hey KL, you've come a long way, baby. Wish we could say the same for Special K...

Pretium (PVG) is one leaky boat

In last week's post, "Pretium (PVG) ramping into Q2 production NR" dated July 5th, this humble corner of cyberspace noted unusual buying activity in PVG. The script went like this:
"An interesting move on an otherwise quiet day. PVG is about a week away from giving us its 2q18 preliminary production figures, too. No position in this one."
And here we are today, PVG announces a blowout quarter, the stock spikes 14% on the day (was higher at the bell) and it's now 21% higher than when that suspiciously well-timed buying kicked in:


And that chart is just the Canadian ticker, it's just as obvious on the NYSE PVG. As noted on Twitter this morning, somebody at the Brucejack mill has a nicely stuffed brown envelope waiting for them when they get off their tour. PVG is a leaky boat, in the future trade it accordingly.

PS: That's still true btw, no position PVG and not planning to change that. Playing liar's poker with the dirty end of the street isn't my idea of a good risk/reward balance.

7/8/18

The IKN Weekly, out now


That'll learn you


IKN476 has just been sent to subscribers. A wordy issue, nearly 18,000 of them.