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11/17/18

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

...in reverse order. It was another quiet-ish week on the blog as your humble scribe mentally re-groups, but three of the posts got a large enough audience to merit the weekend re-cap. Anyway...ahem..."in reverse order":
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Third Place: "Pan American (PAAS) buys Tahoe Resources (TAHO): Explaining who wins and who loses". The more I think about this deal, the more I keep circling back to one idea. I know he comes across as all cool and relaxed and successful biker dude laid back etc etc, but Ross Beaty must be one hard-ass MF when it comes to nailing down the terms of a deal. This was nobody's idea of a win-win, this was Beaty being pitiless to a weakened and vulnerable McArthur.

Second Place: "McEwen Mining (MUX): Why so quiet about your news, Rob?". Like the guy who plied his living playing three-card Find The Lady on Saturday mornings, just next to the fruit and veg market of my teenage years.
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First Place: "Ari Sussman's backdoor insider selling technique". The feedback received from the week's most popular post reminded me (and it's good to get that nudge) that I don't write this blog for the ego-stoked, neverwrong jackoffs that pervade and muddy the sector. 

11/16/18

The Friday OT: Ben Lukas Boysen; Golden Times 1

Ben Lukas Boysen's 2016 album 'Spells' has so many good tracks that it's difficult to pick a fave, but what I know is that every time Golden Times 1 starts my attention is dragged away from whatever else I am doing. Therefore, it gets the nod.



A simple melody and chord progression, while beautifully delivered from the start, gradually evolves into something deeper and more complex, then disintegrates, all in a way that you hardly notice happening the first time around. This is a fascinating piece of music. Youtube here.

Shhh! Be vewwy vewwy qwiet!

Gold is wallying:


We are shocked! Junior mining C-suite executives turn out to be bullshit liars! Shocked!

Here's what a company called IBC Advanced Technologies told us this morning (your author highlights):
AMERICAN FORK, Utah, Nov. 16, 2018 /CNW/ -- IBC Advanced Technologies, Inc. ("IBC") provides the following clarification concerning its role in the Strategic Metals Complex ("SMC") which was referred to in a press release dated May 7, 2018 (the "Press Release") from Ucore Rare Metals, Inc. ("Ucore.")  In that Press Release, Ucore announced that it had "engaged …IBC to commence advanced engineering and design procedures for the U.S. Specialty Metals Complex (SMC) to be constructed in Ketchikan, Alaska."
To correct the record, IBC has not been engaged by Ucore to commence, and in fact has not commenced or performed, any such advanced engineering and design procedures for the SMC.


Thing is, if you go to that May 7th NR out of Ucore (UCU.v) not only do you get all that "has engaged IBC" phrase, but further down some pretty extensive quotes by both COO and CEO of the company. Here you go, once again bold type added to help direct thine eye:

"Having IBC commence E&D activities is a significant milestone for the Alaska SMC” said Mike Schrider, COO of Ucore. “Completion of IBC’s initial test work and engineering tasks will allow us to engage other engineering specialists regarding the non-MRT [Molecular Recognition Technology] portions of the Plant such as the product dissolution and acid/wastewater recycling sections. Once those systems are designed, we will then be in a position to commence discussions with local Alaskan engineers regarding our facility requirements to house the REE separation plant based on the specific site we select in Ketchikan.”

The Ucore-IBC alliance in the REE sector builds on IBC’s proven capabilities to develop, scale-up and commercialize selective separation systems for a number of diverse and complex applications” stated Jim McKenzie, President and CEO of Ucore. “By extrapolating the knowledge gained from the SuperLig® One rare earth pilot plant, we have a clear plan of execution for the Alaska SMC. When completed, we will have established a significant domestic source of saleable rare earth oxides, which will go a long way towards establishing technology metals independence for the US in an environmentally sustainable and safety conscious manner.”

Therefore we can state with accuracy that not only are Mike Schrider and Jim Mackenzie bullshit liars, they are proven bullshit liars. I do enjoy it when these scumbags tip their own hands.

Steve Todoruk: "Get In Early with Discovery Plays"

Eight minutes of decent advice from Todoruk of Sprott Global. Mostly general thoughts and most useful for relative newcomers to the sector, however those seasoned in the ups and downs (and downs...and downs) of the juniors sector will also get value. 





Youtube here.

Plateau Energy Metals (PLU.v) and a partial Ottotrans

An excerpt from its NR this morning:

Government & Community Relations
The Company continues to work with the government at all levels, from municipal to regional and central as part of its ongoing efforts to advance both projects. Recent elections in country have presented the opportunity for the Company to meet with newly elected and re-elected officials to discuss its development plans in the project area with continued support.

The government of Peru continues to work on a legal framework for the transport and export of uranium to support the future potential production from the Macusani U project. In August 2018, President Vizcarra publicly announced that the government is working towards a legal framework within 6 months. It is clear both Plateau’s Macusani Uranium and Falchani Lithium projects play an important role in the country’s participation in the shifting environment of low carbon emission energy sources and mass market vehicle electrification.
 
Host communities in the project area continue to benefit from the Company’s involvement in the project area in the form of employment, program support and sponsorship. Having worked continuously in the region for over 10 years, a strong foundation has been built enabling the Company to work with its hosts in advancing through development stages.


Ottotrans:
We are crapping ourselves about Walter Aduviri.

11/15/18

My Ebitbrah mugs arrive

Very impressed that cool financial mugs people Ebitbrah managed to ship my order (bought and paid for, no freebies) to my door all the way down here on the other side of the equator:



For the record I'm keeping one, the other two are earmarked as Christmas presents. So why not do the same, dear IKN reader? For holiday cheer and ease, visit the Ebitbrah website and cover those gift obligations quickly and easily. There are literally dozens of styles to choose from, too.

An Ari Sussman insider sales update

October 23rd: IKN publishes a preview post on Ari Sussman's insider sales schemes. Ari Sussman ('s imaginary friend) reads the post and due to poor reading comprehension jumps to the erroneous conclusion it's about insider selling of Continental Gold (CNL.to). Within a couple of hours of publication, Ari Sussman himself mails to IKN, states categorically that he has not done any sort of dirty backhand insider sales in CNL and demands a retraction. Which he never got, obviously.

November 14th: IKN publishes its exposé on Ari Sussman's insider sales scheme at Colossus Minerals, explaining in detail how he made nearly $4m in net profits from quiet, sneaky, backdoor insider sales of stock while CEO and chairman of the company, all just months before Colossus collapsed and its stock became worthless.

November 15th: Still no mail from Ari Sussman. Waiting. Patiently. Ari, you out there?


Full disclosure: No position, long or short, in CNL.to.

The palladium/gold ratio

Almost there...


HIVE.v Blockchain (HIVE.v) due to report this evening

Certainly looking forward to that one.


Ready, Frank?

UPDATE: A smarter person than I has got in touch to suggest that we may need to wait a couple more weeks for the HIVE numbers and we'll get them end month. Fair enough. Still looking forward to them though, Frank. Bottoms up!

11/14/18

Ari Sussman's backdoor insider selling technique

Gather round, ladies and gentlemen, learn how one of the seedy operators in the junior sector got rich while (he thought) nobody was looking. Ten years ago, Ari Sussman had his current game plan at Continental Gold (CNL.to) on the back-burner. The manifold fun of Buriticá, from discovery to exploration to problems with the illegals, working through permits, getting Newmont in as JV and then trying to wash hands of all responsibility for the deaths of three of its geologists all lay in the future, because at that time Ari's main thrust (along with the now deceased Vic Wall (RIP) and many of the same people now at CNL) was Colossus Minerals (ex-CSI.to).

By way of the briefest reminder, Colossus (CSI) was an almighty pump and massive crash and burn when it finally fell apart. It was based on the remnant mineralization at the near-legendary Serra Pelada deposit in Brazil and the whole thing took off like a scalded cat when CSI started returning some of the most eye-popping drill assays ever seen in the world of juniors, with intercepts that were admittedly small but off the charts for gold, platinum, palladium and other such metals of valuable goodness. CSI had a good three years of market stardom and saw its share price rocket from pennies to the $8 and $10 range, thanks to the hype, the grand plans and the sponsorship of deep pockets such as Sandstorm Gold (SAND) and ARC Fund. But to cut a VERY long story short, the grand plan was not to be and when it became clear CSI was abjectly failing to provide a resource or manage the engineering to reach the ultra-high grade rocks buried in difficult terrain (not to mention some extremely difficult community and political risk issues), the company fell apart.

No end of people lost many, many hundreds millions of dollars. But ex-CEO and ex-Chairman of the company Ari Sussman did well out of the collapsed disaster of his company. Very well indeed. That's because aside from collecting a juicy salary and bonuses, he was fond of selling his stock at high prices but doing so in a way that wouldn't attract any sort of attention. I'd like to make it clear that what he did was indeed legal, but it was most unusual for a company chair/CEO, off the charts immoral and even went directly against what he told other insiders at the company, because when things fell apart he went round telling CSI personnel that they couldn't sell their shares and had to "go down with the ship"...while all the time using a backdoor method to dump millions of dollars of his own stock onto the market.

To get a handle on what he did, you need to go to Canada's SEDI website, go to Sussman's filings spend a while seeing how he went about his shady business and get it straight in your head. But fear not, your humble scribe has done the legwork for you and what follows is just about the easiest way I could think of to present the data. It's quite long, but after the first couple of examples you'll see how the pattern repeats as Sussman goes to the well, time after time, to sneakily turn his shares into dollars.

Each of the following blocks of trades have six columns, which are:

  • Code: This is the code given by the Canadian regulatory authorities/SEDI for the trade. And this is in fact an important item, because it shows the chronological order of the trades and also why the way in which Sussman liquidated his shares was so unusual.

  • Trade date: When the trade happened. Self-explanatory.

  • Filing date: When the trade was registered, usually a couple of days after the trade happened. Standard stuff for the most part.
  • Trade: What was bought or sold. I've colour-coded this to make it easier to see, basically when shares leave Sussman's account it's in red, when they enter his account it's green.
  • Price of trade: What they shares were sold (or bought in) for, also self-explanatory.
  • Net Position: How many shares Sussman owned after the deal was done.

To start, we go back to February 2009 and this set of trades. Sussman had previously traded his stock in modest purchases and sales, but this block marks the beginning of the bigtime moves as well as the pattern Sussman would used to liquidate and cover his tracks.


You see the first lines are a whole bunch of sales, all around the C$6 price level. If you add them up there are 168,800 shares sold for total gross proceeds of C$1,021,240. But then come three green lines, with shares entering his account at a much cheaper price. These are options that Sussman held and he had a whole gazillion of these (awarded to himself in previous years when CSI was a penny stock and just getting started). So what he did, just a few days after the sales, was exercise enough options to cover the sales so they wouldn't show up when it was time to ask about holdings. He'd say "Yeah, I have 1.71m shares of CSI, I'm a big holder of this company" and that was true, but what he failed to mention was that by selling fully paid up shares and then quickly replacing them with the exercising of very cheap warrants, he was cashing out big-time while retaining the pretense. It cost him some money to exercise those derivatives of course, but as he'd just hit a large payola that was not an issue. Once the job was done he'd netted himself a cool $937,276.


The strategy clearly worked too and nobody saw what was going on, so at the end of the year he did it again, twice. This time a couple of small 10,000 share sales at C$5.69 and at $5.90 that were immediately topped up by 40c options (note the trade dates different, but the filing dates the same to make it seamless). Net profit on these round trips, $107,900


We move to May 2010 and exactly the same pattern. First the sales of expensive shares, then afterwards (NB. this is NOT before, the trade codes make that clear) come the cheap options to top the holding back to exactly where it was before, 1,711,401 shares. He did well here and made $417,642 net.


It's now late May, the CSI promo is in full swing, the hype is at full volume and suckers all over the world are buying this stock...just as company head Ari Sussman is selling. Once again sales that are covered immediately by cheap options exercises. Once again his total holding returns to exactly 1,711,401 shares. But then in late June we have a outlier to all his trades during this period as according to the records he sold himself 81.1k shares with no options exercised into the account and no profit or loss recorded.

My best guess is that he was transferring shares from one brokerage account to another, but even that's a guess and would be for unknown reasons. However, these three self-swap trades were a one-off and we soon got back to the real business of turning Ari shares into Ari cash without anybody noticing.

Here we are in August 2010, he does the same switcheroo on 50,000 shares, comes away with $362,596 profit



January 2011,  20,000 shares done at a net profit of $5.35 each, ring the bell, $107k profit


Then in February 2011 Ari got busy with a whole bunch of smaller trades spread between Feb 4th and Feb 7th. But of course, none of them filed until the 25c options had covered his tracked to the share. Hey look we're back at exactly 1,711,401 shares again. It's magic!


Then another 20k a couple of days  later, same story.


And 10,000 more shares blown out into a unwitting market just two days after that.


And then a big one. Just one week later in the same February 2011, Ari Sussman sells 100,000 shares at $8.35 and then $8.48, immediately topping them back with 25c options. However and for the first time in a long time he actually adds to his holding by exercising another 50,000 shares, bringing us to 1,761,401.


By the time his Febraury 2011 was through, company head Ari Sussman had quietly liquidated 200,000 shares of CSI and made a net profit of over $1.57m. Not bad for a month's work

All that must have got him enough money to live on for a while, because we had no more inside dumping from Sussman until February 2012 and his final act while and officer of CSI.


This 50,000 share switcheroo, in exactly the same style as before, netted Sussman $353,451. But it was just after that when things started to go horribly wrong at Colossus, the story unwound and the share price fell apart. First Sussman resigned as CEO and then on October 15th 2012 he also resigned as chairman, leaving the company entirely (which also means he was free to sell all his remaining shares and options without having to declare a single trade publicly.

Once the dust had settled on Colossus, as noted above many people had lost fortunes due to the ineptitude, mismanagement and promotional hype that went badly wrong at the company. For example, ask Sandstorm's Nolan Watson if he has plans to invest in Continental Gold. Or Beto Arias of ARC. However, Ari Sussman came out of the disaster smelling of roses and vastly more wealthy than when he began. Aside from his salary and bonuses, and even if he didn't end up liquidating his shares the moment he left the company, the insider trades as noted above made him around $3.86m net profit. And all the time while he played it sneaky and pretended to the market he was a tight hand holder. 

Leopards do not change their spots, ladies and gentlemen. Don't think for a minute this person wouldn't throw you all under a bus once again and run off with your money via trades in Continental Gold, he's done it once and he's more than capable of doing it again.

Who gives a shit? It's capitalism, baby

After all, it's only the blood of three dead geologists on the hands of this company.

Today in Medellín:

Pan American (PAAS) buys Tahoe Resources (TAHO): Explaining who wins and who loses

Wins: Beaty
Loses: Everybody else




The destruction of wealth that occurred in the hands of Kevin McArthur is destined to become a case study in the sector. Which is a good thing, because if the mining industry can learn from the mistakes made by this bozo and the largesse afforded to him by a lax and sycophantic community of peers, it will become a better place in which to do business.

IKN Recommends: Doug Beattie's Mining Ramblings

Anyone who reads words on the mining industry should read Doug Beattie's new blog, Mining Ramblings, because you'll get to read one of the best brains in the business and not only that, but one who is unafraid to give you the straight dope (whether the companies in question like it or not). It's right here.

Kevin McArthur's legacy: U$3.40

The man who ruined a company to such and extent that at the end, he sold it for U$3.40 a share to real miners.

For context, back in 2015 TAHO paid $1.12Bn for Rio Alto. Three and a half years later PAAS Pays the same for Rio Alto, Lake Shore Gold and Escobal.

No posts today

For secret reasons.

11/12/18

McEwen Mining (MUX): Why so quiet about your news, Rob?

I mean, normally Rob McEwen is bouncing off the rooftops and shouting to the world about McEwen Mining (MUX) any time it has news to offer the market, but for some strange reason he seems to want to keep this one quiet.
  • MUX filed the news late on Friday evening to SEDAR
  • There was no news release to accompany the Reg Fs
  • And today, still nothing from the company

Why would that be? Hmmm...perhaps if we look at the news it might help:




Ah, that's be it! The company that's always banging on about how awfully other mining companies treat their shareholders by diluting them away from the bottom line benefits is....diluting their shareholders to the tune of 47.87m shares. That's a 14.2% dilution to current shareholders, assuming full take-up at these prices.

Funny how Rob suddenly goes quiet like this, innit?

Birds of a feather

How deliciously ironic it is that alias Goldfinger on the scam pump site CEO.ca is now recommending Continental Gold (CNL.to) to his followers. It's as if all the zero morality players in the mining space are drawn together by a magnet. After all, this is the company which decided to put its staff in harm's way by sending them to a social and political hot zone of Colombia, insist they were closely monitoring them to make sure they were safe, then witness three of them get murdered by the terrorists operating in the area after literally weeks of warning they were under threat. In their response, not a single member of the CNL high management has done the right thing and resigned, they are now all busy trying to pretend that there is no blood on their hands and it wasn't anything to do with them.

A perfect company for Goldfinger, the very same stock promoter with "a background in mining/geology/engineering/finances/" (pick your preferred word but they all mean the same thing, "no qualification in mining/geology/engineering/finances") who has no problem about drunk driving. Or when he runs over people while drunk at the wheel and leaves them critically injured in hospital, has no problem about immediately leaving the scene of the accident. And ever since doing so, has tried every trick in the book to cover up his nefarious past and make himself out to be some sort of model citizen. Sadly, sociopaths are hardwired. You have been warned, CEO sheep.

A perfect moral duo.

11/11/18

The IKN Weekly, out now

Damas y caballeros, la mesa está servida



IKN494 has just been sent to subscribers. One WDO puzzle solved.

One hundred years




In Flanders fields the poppies blow
Between the crosses, row on row,
    That mark our place; and in the sky
    The larks, still bravely singing, fly
Scarce heard amid the guns below.

We are the Dead. Short days ago
We lived, felt dawn, saw sunset glow,
    Loved and were loved, and now we lie,
        In Flanders fields.

Take up our quarrel with the foe:
To you from failing hands we throw
    The torch; be yours to hold it high.
    If ye break faith with us who die
We shall not sleep, though poppies grow
        In Flanders fields.