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6/22/19

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

...in reverse order:
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Third Place: "Ari Sussman's crocodile tears". Not often a late-ish Friday post gets to make the weekly Top Three next morning, but here we are. Got some really interesting feedback on this too, including confirmation that the reporter did bugger all background checking and DD into the real story before filing. Ari will be pleased, his desperate scramble to clear himself of any guilt. Your arrogance and weak management killed them, Ari.

Second Place: "Welcome to the gold bull market". I don't deliberately try to write clickbait headlines, but let's face facts; Though not done on purpose, that was a clickbait headline.
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First Place: "And on the subject of Eric Sprott and insider holdings...". Talking of clickbait, put his name in the title and you get visitors. I knew that.

6/21/19

Victoria Gold (VIT.v) is now officially over-budget at Eagle

When they published their feasibility study (September 2016) Victoria Gold VIT.v) told us the capex for the project would be C$370m. So let's see how things are doing as at end February 2019 via the annual financials, published today:


Yup, we're already overbudget and with seven months to go from that date to first production (which in turn will not be when VIT goes cash flow positive), this capex blowout will only get worse. In fact VIT.v has already secured a total of around C$550m for its mine construction, which is a fair indicator of where we're really going. With over 860m shares out, a heap of debt to pay back and working cap negative, too. But who cares about boring old math when gold is pretty and shiny, right?

The Friday OT: Eddie Izzard; Death star canteen

Totally OT and unrelated to anything today. Just damned funny.



Youtube here.

Fortuna Silver (FVI.to) (FSM): Simon Ridgway survives again

One of these years he's not going to scramble over the 50% line:



Just goes to show that not all the insto holders of FVI are twats.

Ari Sussman's crocodile tears

It gives zero pleasure to drag up this sordid tale again, but something needs to be said about the way in which Continental Gold (CNL.to) is re-writing the history of the murders of the CNL geologists at its Berlín project last year due to this Reuters piece, published yesterday. Here's how Ari Sussman puts it:
Now, nine months later, and with upgraded security, the Buritica project is still on track to kick off production next May, with managers acknowledging last year’s setback but also confident the venture will prosper.
“Even if it’s terrorism you have to accept that you failed. You lost a life you failed, period,” Chief Executive Ari Sussman told Reuters last week on the sidelines of a tour of the mine for journalists and investors. “We couldn’t have seen this coming but it happened so we’ve rebuilt our system and brought in new people.”

Which is, of course, total bullshit. Probably why they invited the generalist biz media and nobody who actually knows about mining or what really happened. It now seems to have slipped CEO Sussman's mind that the team of geologists attacked by the ELN terrorists had been in contact with their bosses in Medellín and their own families and telling them all for the two weeks leading up to the attack that they had been receiving threats and were very nervous about being up there. Sussman also fails to disclose how CNL has been desperate to re-visit its Berlín project for years and hadn't done so because they and everyone else knew for a fact it was a hot zone for "Bacrim" activities (Colombian term for criminal bands of both far right and far left leanings). Of course they could have and should have seen it coming! Plain fact is that CNL decided to gamble and move back to the Berlín project before it was safe, those are decisions taken at C-suite level. 

But what really sticks in the craw about the above quote is the way Sussman tells us he has failed. Damn straight you have, so why are you still there as CEO of the company? This is just an episode of crocodile tears from somebody with blood on their hands who is too much of a coward to do the right thing. An utter toerag.

6/20/19

Welcome to the gold bull market

It's been a while coming, but...


...everything changes now.

Poverty in Argentina

The percentage of Argentina's population under the official poverty line, early 2016 to date (i.e. the Macri presidential period. From here:


Just in case you don't get why Alberto Fernández is favourite to beat Macri in October. He has failed to bring inflation under control (a basic promise of his previous election campaign) and in fact it has spiralled further out of control. That has eaten away at spending power under Macri's austerity plan and the result is the above chart. Also, consider in that linked opinion poll how one of the graphics notes that 63.7% of Argentinians will not vote for Macri under any circumstances in round one.

We again check in on Newmont (NEM)...

...to work out where it would be trading today if it hadn't bought Goldcorpse:


So that'd be between +14% and +19% of today's U$37.65 price. That makes it between U$42.92 and U$44.80. Or if you like, by taking the old 533m shares out count as our level, up to three point eight billion dollars washed down the toilet. Because mining.

Ecuador's Environment Ministry ordered to apologize to the nation for allowing mining exploration in a protected area

Yesterday, the three court judges covering the "Los Cedros" case in Ecuador finally handed down their verdict and it's one that spells real trouble for the Ecuador government's plans for mining development. "Los Cedros" is a protected forest area in the Intag region of Imbabura province. Intag is high on the list of mining development targets due to the presence of many exploration stage companies there, not least the Codelco-Enami JV at Llurimagua. The thing about Los Cedros is that despite being a nationally recognized protected area since 1994, the government thought it wise to permit mining exploration there and allowed Cornerstone Capital (CGP.v) to do just that, then later the State mining entity Enami. Locals have been fighting hard to stop them ever since and this case has come through the ranks and is considered to be one that would set legal precedent in the country. So anyway, here's what the judges decided (translated):
"It is decided to annul the contested administrative act, namely Resolution 225741 dated December 12 2017, in which the Ministry of the Environment and Water permitted the environmental registry in favour of Empresa Nacional Minera (Enami EP) to allow the initial exploration phase of the project Minero Río Magdalena, comprised of the concessions Río Magdalena 01 (code 40000339) and Río Magdalena 02 (code 40000340) located inside the Los Cedros Protected Forest, Llurimagua sector, parish of García Moreno, Cotacachi cantón, province of Imbabura."
But that's not all, because the juduciary are so annoyed at the way the government tried to ride roughshod over its own constitution, the wishes of the people in the Intag region and its own laws that they require the Ministries in question to deliver a public apology to the nation. We quote the ruling once again:
"The public apology must be published at least once in a national circulation newspaper, as well as in a visible and easily accessible part of the front page of its institutional website for the period of three months."
However, don't let freshly written legal precedent get in the way of your own biases, feel free to kid yourself that this will only apply to one small zone of Ecuador and that the other mining companies are not crapping themselves about this development. After all, it's your money.

Chart of the day is...

...copper, hourlies:




Even the useful metals are going up this morning.

6/19/19

Gold and copper are both moving up this evening

Which is most interesting.


And as someone with more net exposure to copper than gold at the moment, all I can say is "about freakin time."

Mexican Gold (MEX.v) will get the full Palisade / Vancouver P+D treatment

We already know Mexican Gold (MEX.v) is one of the scummy Palisade pump jobs. We also know that as usual with this den of thieves, the P has been faithfully followed by the D:



So the news today that "industry veteran" (translation: happy to spread KY Jelly over own buttocks in return for cash) Phil O'Neill has taken over from Carl Hering as CEO, who moves to COO (why does a Mexican exploreco need a COO now?) is a sure fire tell on the plans Palisade has for this vehicle. When the BS pump comes, and it will as day follows night, be crystal clear about who will be selling to the suckers who fall for this perennial crap.

Do not feed the animals.




6/18/19

And on the subject of Eric Sprott and insider holdings...

...when you go over to SEDI, the page they give you before your target name comes up provided this spectacle for me today. Eric Sprott's declared insider holdings (almost always when he goes over 10% holdings) over the last ten years:





For sure there are some great winners on that list, Kirkland Lake an obvious example. But my stars and holy moley there are some utter moneypit dogstocks that have shrunk to nothing on that list, too.

Jaguar Mining (JAG.v) and Eric Sprott

So we get the news this morning that Eric Sprott (and Toqueville) has moved to bail out once again inject vital and company-enhancing working capital in Jaguar Mining (JAG.v). With the company insisting that the U$25m they'll collect from the placement (priced at 8.5c) will be enough to inject life and cover capital needs (now where the F have I heard that one before? This company is doing a Groundhog Day on my head), everybody's congratulating Eric Sprott from getting in this cheaply and now owning over 40% of the company. 

Which made me go, "Yeaah, but how much did he pay for his other positions?", so off to SEDI we go, and...



...the answer is $13.79m. That means with the U$15m coming to C$20m approx today, he's paid a rounded-up CAD$33.8m for 42.6% of Jaguar Mining, the process having started a little under three years ago. By the end of this very dilutive placement, JAG will have 722.623m shares out and as they are being priced at 17c today on this news (though as this 5 day chart shows, we're pretty rampy and volatile today and that price could change), a pro-rata market cap of CAD$122.85m.


In other words, Eric Sprott is now on a paper profit of C$18.53m. Good for him. Even better for JAG, who now get to pay those key management salaries for a couple more years. Not so good for those retail shareholders squeezed between the mediocrity of JAG and its serially under-performing mines, and the big swinging benefactor coming in at a deep discount, a year ago this was a 36c stock (it would take a double from here....after a 119% dilution....ahhh, good luck).

This how the industry works if you are the guy tapped for cash by the distressed end of the gold mining world when times are tough. The billionaire goldbug prime target gets to buy his "bargain" and the godawful assets that should have been shuttered years ago keep on churning out gold at cost breakeven levels because their benefactor thinks gold is going to U$1,800/oz and needs to make this type of bet to make any difference to his pile of coins already. This bet is his equivalent of me going to a casino with U$200 and trying my luck for a couple of hours while sipping my freebie margarita.

Gary T does the copper price charts

Check it out, right here. An extract:

"The bounce is on and while RSI is getting a bit peppy, MACD is good and constructive."

If I knew what the hell he was talking about, I'd agree. Go see for yourself, though.

6/17/19

Integra Resources (ITR.v) with a strong resource update

Here's a freebie for you. Be clear that I'm long Integra Resources (ITR.v), have been for a while, I'm modestly up on the position and I'm not selling any at anywhere near these prices so with a nice shouty clear disclosure, the NR out this evening for ITR.v will price the stock up tomorrow (unless gold dumps $30). Here's the title, click on it to read the whole thing:

This is a strong step along the way of getting the very large DeLamar deposit into gear and this stock price with some momentum. As soon as I saw the NR hit, I shot a mail over to ITR CEO Salamis and asked him for the flavorful comments and here's what he had to say (very slightly edited):
"Very happy with this...Usually with resource conversion to M&I, ounces fall off the table, drop out of the model, etc. Not here. We went up significantly, which is great news. 3.6 M ozs AuEq to 4.4 M is a big jump, and 90% of that is M&I which makes us all happy. All that M&I makes the PEA less risky, as well.

"Other things that make us happy: No major drop in grade, maintained a low strip below 2:1. And...tada!!... 1.5 Mozs AuEq in Ox/trans which we view as fair game for heap leaching. And it’s still wide open for expansion. A win. We are happy."
 
This one's a buy at these levels, period.

The IKN Weekly, out now




IKN525 has just been sent to subscribers. A choppy weekend.