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9/15/18

Two dead in accident at the Coeur $CDE (CDM.to) Palmarejo mine in Mexico

On Thursday afternoon September 13th, an accident at the Coeur (CDE) (CDM.to) Palmarejo mine in Chihuahua State, Mexico, claimed the lives of two of its employees. The two were killed by a rockfall in the underground operation while drilling.

Coeur Mining, company slogan "We Pursue A Higher Standard", hasn't bothered to inform the market of this unfortunate incident. Talk is cheap.

Give him his due, Porter Stansberry sure knows how to rip off dumbasses

This from a weekend mailer from the house of iniquity. Talk about 'know your audience', Porter Stansberry has done his market research all right. Just count 'em up:
  • Coup
  • Trump
  • Incredible
  • Powerful leaders
  • Secretive
  • Radical
  • Broken silence
  • Stunning details
Also the combo of the word 'radical' in there next to a photo with some Arab guy (you can tell, he has that cloth over his head). Wondering how many times that little dog whistle shows up in Stansberry/Casey mailers? I should pay more attention...

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

...in reverse order:
.
Third Place: "What Renaud Adams will do* at New Gold $NGD". That's what I think anyway. I got a couple of mails wondering whether Blackwater is worth that much and I agree, I think it's pretty much worthless too. But that won't stop the majors with more cash than common sense from overpaying, I mean just look at the low grade marginal crap NEM and GG has paid up for recently.

Second Place: "Detour Gold (DGC.to): The Problem with John Paulson and Marcelo Kim". The post which elicited the most amount of mail feedback last week, so thank you to those people (you know who you are), some good ideas bounced around.

 
First Place: "These are the questions about Eric Sprott" This weekend another example shows up, as the previous Palisade pump job Wallbridge gets Eric Sprott cash. He's being taken for a sucker, it's funny.

9/14/18

New Nadina (NNA.v): This company needs to work out how to redact correctly

This is funny. New Nadina Resources (NNA.v) today announced its Free Mining Certificate has been suspended for four months, but in the PDF version filed on SEDAR, you can clearly see through the "redacted" blacking outs:


That's Mr. Frame (a lawyer) and Mr. Christmann (his client). Who is of course Charles Donald Christmann, who has been having legal fun and frolics with NNA for years.

The Friday OT: Neil Young; Cortez The Killer

Neil Young rocks out, goes powerballad and you may know better, but this is the best version of the song I've heard. I've never seen him live (sigh) but people I've spoken to who went to this tour's gigs say it was the loudest concert they've ever been to.


From his live album Weld, which should be heard from start to finish. Youtube here.

Orla Mining (OLA.to): Trouble at Cerro Quema

According to Panama's daily of record La Prensa this morning, the anti-mining pressure group Santeño Front Against Mining has called for the definitive closure of the mine project. The first reason is fairly straightforward and normal, they say they speak for the local community around the mine when stating that it's bad for them. The second one is more interesting, as they state that Cerro Quema and Orla Mining (OLA.to) have no valid licence there, as the papers lapsed in February 2017 and have not been renewed.

#DisruptMining 2019 is now open (plus details on the IKN entry)

Right now and until early November, the 3rd Annual Disrupt Mining Challenge is open to entries from all-comers and all sorts, with qualification starting on closing, the grand final at PDAC 2019 (as always) and serious prizes on offer, up to and including $1m in capital to turn your idea into reality. Go to that link for more, but in the meantime let's take a moment to consider the IKN entry.

As #DisruptMining is looking for novel ideas and initiatives in order to (and I quote), "...generate new opportunities to tackle the mining industry’s most vexing challenges", here's the plan:
  • Start a company that looks after its shareholders
  • It finds a project to advance that has a real chance of becoming a mine
  • The company then engages with the locals and builds good community relations
  • The project then moves to production and becomes a profitable mine

That sequence would be a welcome breakthrough in the business.

9/13/18

What Renaud Adams will do* at New Gold $NGD

This is very straightforward (and in USD):

1) The new CEO comes with the opportunity to "new broom" a dysfunctional company. And my stars, this one is dysfunctional.
2) There are no secrets about the issues at NGD, it has a) $959.1m of financial debt and b) a main mine that isn't working the way it should.
3) Rainy River (RR) isn't going to be easy to fix, but first things first. NGD needs to lighten the balance sheet burden quicktime, else the equity is going to get crushed before Adams can find a way of improving the ops (if you doubt that, look at the YTD price action for more detail).
4) So it needs to raise cash. But how?
5) It can't sell New Afton (it's only truly profitable operation) and its other ops aside RR are long in the tooth. 
6) But there is Blackwater, the dog of a project they stupidly paid $513m for back in 2011. What with exploration costs and the way that successive CEOs have refused to bow to reality and impair this waste of money, it's still carried on the NGD books at $560m.
7) It's not even worth half that. But what with Renaud being new, he can do something about it at last. Therefore he sells it to some-or-other company for a more reasonable price, let's say $250m, which goes to pay down debt immediately.
8) From there they run a necessary but dilutive financing. Could even be a rights issue, but the frame would be to raise let's say $200m at $1.00.
9) That would move the share count from the current 578m to 778m. 
10) The book value per share after this would be around $2.34. That doesn't mean NGD would be out the woods, but with less pressure on the balance sheet it has bought itself time to get RR going properly and it would be able to justify a 0.4X P/Bv in the meantime.

The final score: Steadying the ship at NGD means Renaud Adams needs to get real about Blackwater and then raise some more money via a placement. From there, if he can get RR running it could be a decent trade. However, without immediate financial surgery this one will die even if it does happen to have a top class mining guy finally at the helm.

*according to me

Re-post from June 2018: "Argentina's Peso, inflation, growth and the people who now own the country. Again."

Back on June 11th 2018 this humble corner of cyberspace posted the following. So, considering what's happened in the three months since then, tell us, how we doing? better than the people "surprised" by the "sudden negative turn of events"?

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 Argentina's Peso, inflation, growth and the people who now own the country. Again.


And Macri is STILL the saviour and future of this country. Anyone who believes this shtick is either unversed in the language of Cervantes or utterly out of their minds.


The only way this ends ---> Badly for Argentines. Their owners, on the other hand, are making out like bandits. The perma-FUBAR country strikes again and it's like watching Groundhog Day, except that the star doesn't get to learn any deep wisdom or fall in love with Andie McDowell.


Argentina inflation in August 2018: 3.9%

That's not 3.9% annual, mind you. That's just for August. That's the worst month for the last two years (i.e. the Mcri government) and will hold that record until...next month, because September's is bound to be worse.

Inflation in the first eight months of the year is now 24.3%. Compare that to the Macri government forecast in late 2017 that this year would come in at between 8% and 12% for the whole12 months accumulative, which was then adjusted up to 15% at the beginning of 2018. The cruel reality is that it's now running at over 40%, because the latest reading doesn't even take into account the effects of the most recent leg-down in the Argentine Peso. And speaking of which, on publication of the inflation numbers it dropped to 40 to the Dollar again. More to come there, too.

In The IKN Weekly this weekend...

...we get granular on a cheap, overlooked gold company that's one of the most obvious takeover candidates in the sector this cycle. It has done a lot of work to improve itself that has gone largely un-noticed due to the crappy state of the market recently. Suits me down to the ground, it's now in raging bargain territory and won't stay there for long. All on Sunday, subbers.

Nike $NKE is at an all-time high today

Question: "What was Nike thinking?"
Answer: This.


UPDATE: Ahh, that'd be it:




This is why I love goldbugs



9/12/18

"The Livengood Rebuttal", coming to you soon from Detour Gold (DGC.to)

After this earlier today, this:


I sometimes wonder how much money there is to be made off the numbskulls in the mining industry by offering the most basic corp dev services and making it sound like cutting edge industry vanguard techniques that nobody else knows. More than from this humble corner of cyberspace, I'd safely vouch.




Detour Gold (DGC.to): The Problem with John Paulson and Marcelo Kim


A modern mining family


We note that Paulson & Co has set up a new website to support its dissident shareholder campaign against Detour Gold (DGC.to) and forward the case for its proxy slate of directors. That's fair enough of course, the guy has decided to make his move on the under-performing DGC and now that the whole "Barrick gonna buy cos Paulson and Thornton are tight" thing has been blown out the water, he's going to need to do something.

Which got me thinking about the whole charade again. I mean, Paulson does have a point about the inept, self-serving management at DGC which has done nothing for its shareholders while lining their own pockets with hard cash (that they rarely use to buy their own shares, precious little skin in their own game). However, just because one side is bad it doesn't automatically make the other side good and cheering on John Paulson/Marcelo Kim against Michael Kenyon/Alex Morrison (or vice versa)  in this one is like choosing sides in the 1990s Bosnian War.

And when it comes to John Paulson and Marcelo Kim, the problem isn't that DGC's management are typical mining mediocrity. The problem is that John Paulson and Marcelo Kim are abysmal mining stock investors. They plough their money into DGC? Fine, live with it, bad call. But even worse, these are the people who decided to own 32% of International Tower Hill (ITH.to) (THM), which is an absolute dog. Even worse, not only do they still own all that but they go around holding it up as an example of their investment model and prowess!  People, ITH at Livengood isn't just a dog, it's a howling Saint Bernard Great Dane mongrel. This is the project that claims to have "9m ounces of reserves at U$1,250/oz gold" but its own PFS tells you that it would take 22.1 years of its 23 year mine life for capital payback! This is the project that will give an IRR of 8.6%...if gold moves up to U$1,625/oz! And this is the company which has...Marcelo Kim as chair.

This isn't the first time I've run on this, but the advent of the new dissident website got me on it again and the bottom line is that you cannot get past the fact that you simply do not want to put the keys of Detour Lake into the hands of a pair who think Livengood is viable project. It's one thing to screw up on a $100m dog (that's worth precisely C$100m less than that number, its fake market cap held up by the dumbo block holders), quite another to barge in on a C$2Bn operating mine and further destroy its value with the same mindset. By all means find a better alternative for DGC than the auto-pilot stuffed suits now running the thing, but not one led by a pisspoor gold stock picker and his mini-me along for the ride. Two wrongs do not make a right.

Belo Sun (BSX.to) spins it

Had a couple of mails in the inbox last night and this morning over this NR out of Belo Sun (BSX.to) that hit after hours. It's not a long one, so here's the whole thing:
Belo Sun Receives Ruling From Federal Regional Justice in Altamira

TORONTO, Sept. 11, 2018 (GLOBE NEWSWIRE) -- Belo Sun Mining Corp. (“Belo Sun” or the “Company”) (TSX: BSX) reports that the Federal Regional Justice in Altamira has ruled that the Construction License (“LI”) and Environmental License (“LP”) related to the Volta Grande project granted by SEMAS (State Environmental agency for the government of Para) remains valid, subject to completion of the Indigenous study, primary data collection and consultations with Indigenous communities (see press release dated December 6, 2017).  The Federal Regional Justice in Altamira clarified that the permitting authority going forward will be IBAMA (Federal Environmental Agency) rather than SEMAS.  Belo Sun at this stage is seeking clarification and a response from the Federal Justice and both SEMAS and IBAMA.

Peter Tagliamonte, President and CEO of Belo Sun, stated that, “Belo Sun is happy to work with both IBAMA and/or SEMAS in its permitting process as well as with the local municipality, communities and Indigenous groups, with a goal of building the Volta Grande project for the benefit of all stakeholders.”

About the Company

That's a decent amount of spin for so few lines of script and anyone who confuses this with good news doesn't have a good command of Portuguese. If you do, you go to the good dozen news reports (here's one of the more complete ones) to find out that:
  • BSX "forgot" to use The S Word. They told us the their licence "...remains valid, subject to..." etc etc. In other words, it's still suspended.
  • The ruling basically transfers the environmental decision on Volta Grande from the regional office (SEMAS) to the national office, called Ibama. 
  • The ruling came from a case brought to the judges by the Para Federal Ministry (Ministério Público Federal no Pará), who wanted the decision process moved because SEMAS only had the authority to suspend the licence, not rescind or annul it.
  • Up to now the licences are in suspension. Now they get to be thrown out once and for all and this farce put to sleep forever. And even if by some miracle BSX is favoured in the final Ibama decision (miracles do happen, but don't make them an investment thesis) the local opposition to a nationally awarded permit would make it impossible to execute there. 
So now you know. 

New Gold (NGD) gets Renaud Adams

NR here. This is a good appointment for NGD and I'd expect the share price to improve on the news. The NR lists Renaud Adams' successes, but it doesn't remind us that he also has an eye for the dog deposit too, having decided to leave Primero when they bought the Black Fox mine. That's when he went to Richmont and was the driver of the tremendous success of Island and the company (and the stock price, right up to take-out day). NGD and main headache Rainy River is a different fish to a high grade UG of course, there's a lot to fix here and the acid test on whether Adams can turn this mess around is in the future. But I doubt he's gone in just for shits'n'giggles.

IKN wishes him fortune. No position in NGD.


UPDATE: Yup:



9/11/18

September 11th, 2001

Never forget.

In one simple chart: The Northern press corps on Argentina's economy

All you need to know, via the Argentina Peso and its forex with the US Dollar:


9/10/18

The only things you need to know about the Nevada Copper (NCU.to) PEA...

...for the Pumpkin Hollow open pit project, released this evening.

1) The NR is here.

2) They use U$3.20/lb copper price.

3) This:



What utter balderdash.

Fido has been selling Franco

Filed today and including this:

Since Fidelity’s last report filed on July 10, 2018, Fidelity’s holdings have decreased by 1,034,132 Common Shares of Franco-Nevada Corporation. This represents a net decrease of 0.56% of the outstanding Common Shares.

Fidelity holds 17,940,829 Common Shares representing approximately 9.64% of the outstanding shares of that class.

These are the questions about Eric Sprott

Does he realize he's been used as a sucker by Palisade Global?
Does he understand that Palisade sells into the volume created by his well-advertised purchases?
Does he know that people are laughing at him behind his back?

Ace trader? Maybe once upon a time, these days he's just another CEOca patsy.

A fun Tahoe Resources $TAHO (THO.to) legal factoid

Here's one I bet you didn't know about TAHO, because even I didn't know until a couple of days ago (unless of course you're up in the C-Suite with Ferrari Kev); Apparently the Reno Nevada law firm Maupin Cox & LeGoy has been briefed to monitor this humble corner of cyberspace by TAHO and bills the company between $5,000 and $20,000 per month for the time it takes to follow the IKN blog, read its contents and report to TAHO every time the company is mentioned. 

These people are out of their minds.

The IKN Weekly, out now



IKN485 has just been sent to subscribers. We do Southern Cone.

9/9/18

RNC Minerals (RNX.to): In one word, "Wow"

Check out the photo in this one, people.

LatAm GDP in 2018: Forecasts versus reality (from IKN484)

This piece was part of IKN484, out last weekend. 

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How LatAm and Carib economies are doing compared to expectations
Generally recognized as the best regional macro-economic study group, CEPAL held its mid-year update in Mexico last weekend and during the week I had chance to catch up on its mid-term report on Latin America and the Caribbean. As usual there’s a lot of information, both on the overview and granular ends, as you’d expect from a 242 page document (get yours on this link here (4) if economics in Spanish language is your thing too…yummy), but after perusing through I think this chart (with personal notes added) is a useful guide to the region and its economies, worth a segment on the Weekly.

What we see is the GDP performance in 2018 of the regional countries, done in order of GDP growth (e.g. Dominican Republic is doing best at +5.4% growth this year, Venezuela worst at -12%). Expectations for growth weren’t on the spectacular end of the spectrum at this point in the cycle, so numbers like +4% or +5% may be good and solid but they’re not going to make world headlines against the +7% of China or +8% of India. Which brings me to the reason I chose this particular graphic, as it charts the current estimates for 2018 compared to CEPAL’s own forecast made for 2018 at the end of last year.

In essence, we get a “How are we doing?” table that allows us to gauge relative performance. Notes below.




  • Dom Rep tops the table, but as we note further down in today’s Regional Politics section it’s no thanks to any new mining projects coming through (or its inept Ministry of Energy and Mining, which is in the process of sweeping its failures under the carpet).

  • From here I’ve picked out worthy data points in countries that interest us, both size-wise and in their mining sectors. In the top half of the list, Chile, Peru and Colombia are all out-performing their expectations (with Chile particularly strong, Piñera in full honeymoon mode).

  • The LatAm average (which excludes Venezuela) was set at +1.3% and is now re-set at +1.5%, so that’s good. It’s been boosted by the less-worse performance of the region’s biggest economy by far, Brazil (+1.6%) (For context, the gross GDP league table for LatAm is 1) Brazil 2) Mexico 3) Argentina. And just the Sao Paulo region of Brazil has a bigger GDP than Argentina).

  • Ecuador is under-performing and in fact, just this week has gone to the IMF for a mini-bailout.

  • Nicaragua was forecast to be a high-performing country this year, but its economic woes brought on by the anti-government protests have scuppered that.

  • Argentina is the poster child of how the Industrialized Nation countries will talk up the return of neoliberal policies and insist that things are better than they are. More on that below.