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I say things on Twitter

10/27/18

Rick Rule's wise words about the large precious metals producer companies...

...back on January 23rd, 2018:

The gold mining stocks that are set for a “spectacular year,” include senior producers and large intermediates, Rule noted.
“They’ll move because expectations for them are so low. They are becoming rational capital allocators and all of a sudden they are generating free cash,” he said.

So, let's see how those senior producers and large intermediates are doing in 2018:
  • Newmont (NEM): Down 20%
  • Goldcorp (GG): Down 30.8%
  • Barrick (ABX): Down 11.2% (that even after the Randick deal, ABX was down 30% a few weeks ago)
  • Agnico (AEM): Down 23.9%
  • Kinross (KGC): Down 38.9%

We could continue. I suppose spectacular losses or spectacular destruction of shareholder equity is one way we could applaud Rule for his prediction.

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

...in reverse order:
.
Third Place: "The GDX, the gold miners and the price of gold". A Garofalo-inspired rant. Or more accurately, a rant about the way a mediocre stuffed suit can torpedo your own mining company positions even when your not long his company (a very deliberate decision) thanks to the inconnectedness of the GDX and a person who has been promoted way beyond his abilities.

Second Place: "The reason why M&A in the gold mining sector has only just begun (from IKN491)". An op-ed that got decent mailbag reaction (thanks for that).
.
First Place: "Ari Sussman's disguised insider sales UPDATED". IKN would like to thank Ari Sussman for providing the update on this post, one that wouldn't even have made the top ten without his help, let alone be #1. And please pay attention to the words Ari wrote, including, "...I have never been involved in any sort of underhanded scheme (nor do I have any idea how to do such a thing)...", because come November will have plenty of evidence of his underhand ways.

10/26/18

This is now official: Geologists are dangerous wankers

An Interior Department watchdog recommended the U.S. Geological Survey ratchet up internet security protocols after discovering its networks had been infected with malware from pornography sites.
The agency’s inspector general traced the malicious software to a single unnamed USGS employee, who reportedly used a government-issued computer to visit some 9,000 adult video sites, according to a report published Oct. 17.
Many of the prohibited pages were linked to Russian websites containing malware, which was ultimately downloaded to the employee’s computer and used to infiltrate USGS networks, auditors found. The investigation found the employee saved much of the pornographic material on an unauthorized USB drive and personal Android cellphone, both of which were connected to their computer against agency protocols.






The Friday OT: Kiasmos; Blurred (Bonobo remix)

Deeply wonderful track:




Youtube here.

Catching up with Novo Resources (NVO.v)

At the beginning of this month of October, your humble scribe wrote:

Bottom line: Yes I'm more interesting in NVO now, but no need to own yet and there's not going to be any Kirkland takeover until the large scale bulk sampling gives up results. I think I can come back here in two years' time and buy it for $3.

That may turn out to be $2.00. The inconclusive results from the small-scale bulk sampling today is a prime example of why the rest of the above is still spot on.

Still very little interest in gold ownership

Among large investors and traders, that is.


10/25/18

Catching up with TD Sec on Continental Gold (CNL.to)

On Thursday October 18th, you too could have bought into Continental Gold (CNL.to) on the back of this reco from Keith Gilday of TD Sec in the morning mailer. You too could have paid $2.70 on the back of his memorable note that included wonderfulness such as the "FARQ" and "Columbia"...such expertise, begad! Anyway, let's see how the six trading days since TD Sec's breathless reco have gone for CNL:


O RLY?

And just wait til Newmont gets to hear about Ari Sussman's history of shady insider trades. That comes in November. Feel like mailing me again, Ari? You know the address, don't be shy now...

The GDX, the gold miners and the price of gold

The industry really needs to be more accountable to these pathetic returns. Not just a new and overdue round of M&A to consolidate these companies, but some wholesale firing of the excuses for businesspeople who run them (and I use "people" there but it may as well be "men", rare indeed is the presence of a woman in the C-suites and just that fact is likely part of the problem). As as publicly as possible, please. No back doors and consider tar and feathers to give it an old-time touch.


I got some push-back from saying this on Twitter yesterday and of course they are not all bad and yes, even the good companies are allowed a soft quarter. But not two and definitely not six in a row like we've seen from Goldcorpse (GG), now down 15% 17% 18% on the day (see earlier post when it was down "just" 9%).Who the hell are these so-called expert mining people when they cannot even do the most basic thing that a miner is supposed to do, namely pull dirt out the ground, put it through a machine, extract the metal and then sell it for a profit? They demand our respect due to the cut of their suit? Their snazzy wrist timepiece (they don't wear watches, they are timepieces)? Their ability to stand up in front of 300 people and talk complete bollocks for 15 minutes as long as it sounds fluent? It's time to stop pandering to these idiots who consider themselves demigods.

UPDATE: IKN regular and serious Calvin & Hobbes freak, reader CM sends in a mail entitled "Mining CEOs Math". I have nothing further to add:


New Gold (NGD) is rallying today, because...

...the market has decided to price it back where it was a week ago, not for what it most feared (instant death):


That's probably because of this...


...a modest improvement at the key Rainy River mine. Though just how they plan to pay back the U$940m in financial debt they took out to fund this mine via those returns is not yet clear.

Goldcorpse (GG) getting murdered at the open

And quite right too, after the 3q18 financials it posted last night:







A serious question: How long will shareholders let this person and his 20/20/20 psychobabble continue to ruin GG? It's one thing to come in and make wise noises about concentrating on margin instead of absolute number of ounces, quite another when you're seven quarters down the line and you cannot even deliver a mines operating profit. It's embarrassing not only for GG but for the whole industry, which will continue to fete and laud these masters of mediocrity in charge of Tier 1 companies because as the results that wheeled in last night showed, he's hardly the only one. GG was the worst of the bunch, but the C-suites at LUN, NGD, DGC and ABX have precious little to be proud about, either. Garofalo and many others like like are Emperors with no clothes, they don't just invite ridicule but deserve it.

10/24/18

DNI Metals (DNI.cse) wins News Release of the Day award. Hands down.

My thanks to A. Reader on this one, because I would never have spotted the fun without their help. In the DNI Metals (DNI.cse) NR this morning entitled "DNI Metals Update - New Madagascar Team" we first get to hear that the company has fired its country manager in Madagascar and the CEO would be taking over his responsibilities. We are then transfixed 13 paragraphs of spiel and nothingness about semi-related subjects of very little immediate concern until right at the end, we get to the juice:

Environmental Licenses
DNI had been promised the environmental licenses would be completed early in 2018. DNI had been given receipts and documents to show that the licenses were progressing and that the fees had been paid. Through an ongoing investigation, the Office National pour l'Environnement Madagascar, ONE, has determined and informed DNI that the many of the receipts and documents were falsified, and that the fee payments had not been paid. In fact the Cahier d'Charge and the environmental impact study for Marofody had not been filed with the ONE.
DNI is now aware of what needs to be completed in order to obtain the licenses and is rectifying the situation.


Yeah, you read that right. Possibly connected with the firing of the country manager, yathink? By the way, here's the share price chart:




Thrilling, no?

10/23/18

The Angry Geologist does Excellon

Right here. Bless her cotton socks.

Serengeti (SIR.v)

You know those annoying, hateful assholes who come up to you afterwards with a gloating look on their faces and in that whiny voice say, "Toldyaso"?




Ari Sussman's disguised insider sales UPDATED

Here's a question for you about Ari Sussman. Yes, he of Continental Gold (CNL.to), the company whose "close monitoring" of social situations saw three of its geologists get killed last month.

Would you like me to tell you the one about how Ari Sussman made nearly $4m in profits from insider sales of his company, but structured his trades in such a way that it looked like he wasn't selling at all? And all this just before his company share price collapsed?

You would? Oh good! Well perhaps I'll wait until just before the upcoming Colombia Gold Symposium in November, which is being proudly sponsored by Sussman. After all, at that time I have more chance of getting the attention of the Newmont (NEM) beaks attending the show, give them a better idea of exactly who they are dealing with. So, watch his space.

UPDATE: Ari Sussman writes in:



He received this reply:



Catch you in November, Ari. 


 

Trey Reik of Sprott USA, looking like a star this morning

Considering...
  • The state of the board markets this morning
  • The monetary drivers of the weakness
  • The way in which not one but FIVE Fed talking heads are set to speak today in order to try and calm the market
  • And above all, what gold is doing right now
...the note published by Trey Reik last week that we featured here on the blog last Friday, entitled "Brinkmanship", is looking mightily prophetic and getting check marks next to just about every point it made. You too need to read it, find the piece right here.

Red Eagle (R.to): Optics

This is not a good look.


The private placement (“Private Placement”) for gross proceeds of approximately C $50 million has not yet been funded by Annibale.  Red Eagle Mining continues to expect the Private Placement to close.  If the Private Placement is not funded by Annibale or 100% owner of Annibale, Fernando Palazuelo, who has given a personal guarantee, Red Eagle Mining will vigorously pursue all legal remedies

If required, a link to the IKN First Law of Mining NRs is right here.

10/22/18

The reason why M&A in the gold mining sector has only just begun (from IKN491)

The following is an op-ed piece from IKN491, out this weekend. The Randick merger (Barrick and Randgold) didn't just create further M&A interest in the sector the week of the announcement, what's happened since then (and especially the last two weeks) has rammed home to the whole sector just how smart ABX chair Thornton's move has been, sat next to the inertia of peers. Those companies, led by Newmont (NEM) but surely followed by any number of Tier 1 and 2 precious metals names, will quickly be left behind (and then left to die) if they don't act quickly, so be crystal clear about this, the M&A action in the precious metals sector has only just started. Read on:

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx



Newmont, Barrick and Randgold (and Goldcorpse)
It’s not the just week of Monday September 24th that matters in the biggest sector merger of the last decade, the effects of the Randick (ABX, GOLD) deal are still working their way through the market and the last two weeks have been particularly interesting. There’s a distinct and clear multiplier effect that’s taken over on the deal and turned it from merely groundbreaking into an unmitigated success, ABX chair Thornton must be feeling pretty pleased with himself this weekend s he plays with his pocket calculator and works out his year-end bonus.

The crux of the matter is in this chart, the comparative market capitalizations of “Randick” (ABX and GOLD combined, with the assumption running back before September 24th) and the two other biggest publicly traded gold miners, Newmont (NEM) and Goldcorpse (GG). In fact these days GG is way behind in the market cap league table and the only real comparative is NEM, but it doesn’t hurt to fill a little extra space on this chart:



Back before the deal was announced, NEM was the biggest single company out there (and by quite a distance), but if we add ABX and GOLD together (in hindsight) they had about a billion and bits on NEM. GG was a long way back in third as it revolved around the U$9Bn mark. Then came the deal and in that first week, the market applause for the deal saw Randick add around $2Bn more to its market cap than the ticket deal (I’m sure you remember the way it was framed as an U$18Bn merger, with 12 from ABX and 6 from GOLD, by the end of week one that was U$20Bn).

However, since then things haven’t stopped and as you can probably make out from the above chart, Randick has seen its market cap accelerate away from the others even further. I say “probably” because it’s not so easy seeing just how dramatic that change has been on the comparative chart. But in this one below the focus is sharp:



Here we eschew GG, take on the top two and perform a simple subtraction to show the difference in market caps between Randick and Newmont. Up until the week of the Denver Gold show NEM was closing in on the combo, but then the gap grew. Then grew even further and today Randick is nearly U$6Bn bigger than NEM. Of if you prefer, in just four weeks the gap has grown by U$4.5Bn and to put that into as clear a context as possible: That’s the market cap of sector darling Kirkland Lake.

The point: What has happened to Randick is a classic case of the whole being greater than the sum of parts. The market LOVES this deal, it’s created a mega-precious-metals-miner at just the right time that of enough size to attract new and bigger insto money to the stock. And let us be absolutely clear; if a pissant blogger can spot that Randick has added an average of an extra billion dollars a week to its market cap compared to its biggest rival, you can bet that biggest rival and all the other smaller ones, right down the line, have noticed it too. Newmont, Agnico, Goldcorpse, Kirkland, Royal Gold, Franco-Nevada…you show me you preferred PM name and I’ll show you a board of directors suddenly under pressure to Do Something from a whole bunch of major holders who are turning green with envy about Randick.

It’s not just the initial reception of Randick that makes it a near-certainty we’ll see more consolidation and M&A deals in the higher echelons of the mining space, it’s what has happened in the last couple of weeks as well. Randick has streaked into a size lead compared to NEM and all others, the only way they get their mojo, their #1 position and their kudos back is by emulating Thornton and Bristow. On that score, I will again put in a word for two M&A scenarios I like; Firstly and probably more difficult, Agnico (AEM) and Goldcorpse (GG) have enough in common and enough that separates them, plus CEOs who are personal friends. The second is the one that still sits up and begs at me, because Newmont would get tremendous upside benefit from buying B2Gold (BTG) at its current price and BTO (holders myself included) would go for 1) the premium price put on an all-paper deal and then 2) the type of out-sized ramp in the weeks that followed. If B2Gold emulated the rise enjoyed by Randgold these last four weeks on a NEM deal, it would be a C$4.40 implied stock price. I’ll take that.



Prize Mining (PRZ.v), its CEO Michael McPhie, news releases, Twitter and general hilarity. And ducks.


"If it looks like a duck, and quacks like a duck, we 
have at least to consider the possibility that we have a 
small aquatic bird of the family anatidae on our hands."
Douglas Adams


It started on Friday, when Prize Mining (PRZ.v), a company that's been been paying all and sundry in the paid-pumper whoredom world of "sponsored coverage" since inception, once again came out with a laughable NR. This time, the grant of 3.2m incentive options came with an extra special CEO's kicker at the end:
"In addition, the Corporation has granted Mike McPhie, President and Chief Executive Office of the Corporation, an award consisting of 2,400,000 Restricted Share Units ("RSUs"), such grant of RSUs being approved by the shareholders of the Corporation at the shareholders meeting held on May 20, 2018. An initial grant of 400,000 RSUs vest immediately upon issuance and the remaining 2,000,000 RSUs vest upon the achievement of certain performance criteria."

On seeing the NR, I had a little chuckle on Twitter and called it freakin' brazen, but as the day wore on the whole brass neck thing, added to the way it pumps itself to the dumbass end of the sector, got the better of me. I wrote this:




And wrote it because that's exactly what it is. The scam is writ large in this one, the old and worn path of the spivs and BSsers clear for all to see. So imagine my surprise and glee when none other than the President and CEO of PRZ.v turned up in my little Twitterworld and left his thoughts on my opinion of his company:

I mean, when he defended the RSUs he'd just been slushed as "all performance based" and "just paper", did he seriously think we only read three-quarters of a news release and then just stop reading at the end? And just for good measure, I published another tweet especially for him as well (but amazingly, he didn't bother answering this time



And that was that, right? WRONG! Because your humble scribe laughed like the proverbial drain this morning when the very same Prize Mining and Michael McPhie announced the following (IKN adds bold type) before the bell today:

CALGARY, Oct. 22, 2018 /CNW/ - PRIZE MINING CORPORATION ("Prize" or the "Company") (TSXV:PRZ) (OTCQB:PRZFF) (MQSP:GR:FRANKFURT) is pleased to announce that it has retained Link Media, LLC ("Link Media") to further build awareness and provide communications and market awareness services aimed at maintaining and building the profile of Prize among existing and potential shareholders.
Link Media will arrange and disseminate independent third-party research articles. Each article will be reviewed and approved by the Company and will be subject to editorial control to maintain consistency amongst the published material to ensure that information is consistent with the Company's public disclosure filings on SEDAR.
Link Media is an arm's-length service provider to the Company for an indefinite term and will be paid $100,000 USD in cash under the engagement for its services to the Company funded from the Company's general working capital. To the knowledge of the Company, Link Media does not own any of the Company's securities.

Yes folks, straight after awarding himself 400,000 vested RSUs, McPhie pays a New York pumphouse another $100,000 for "sponsored research and coverage", i.e. a glowing report with a crazyhigh target price that will be shoved in front of the naive and pop the stock, just at the right time for a whole bunch of insider sales to benefit. You cannot make this shit up, all with the seal of approval of a CEO who cried foul if you dare to speak even 140 characters' worth of truth about the scam he heads up.


10/21/18

The IKN Weekly, out now




IKN491 has just been sent to subscribers. Another weekend, another 15,000 words, I'm going to take the dog out for a long walk now and stretch these under-used legs. Goodnight.

Gary Tanashian on the uranium sector

One of those moments when you're reading your favourite weekly newsletter, you get to a short intro to the charts he offers up of the U stocks, you read the four lines and think, "Exactly. Wish I'd written that." So I ask for permission to use it, he kindly agrees, here you are:
"The U sector makes me glad I just ignored it. They are all pulling back as they always seem to do after some hype (and hedge funds) hit the sector and then leave. Again, let me hear about fundamentals other than supply cutbacks by key producers and we’ll take interest. Until then, it’s a sector subject to much gamesmanship. No thanks."

Gary Tanashian's 522nd edition of Notes From The Rabbit Hole was published this morning. You should read it too.