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7/27/19

Plateau Energy Metals (PLU.v) and IKN: A three-step recap

By way of a reminder:

1) On March 14th IKN published a post entitled "Plateau Energy Metals (PLU.v) mega fail". It wasn't very long, here's the whole thing:

On February 20th 2019, Peru's geological regulatory body INGEMMET, via its Presidential Resolution 0464, decreed that due to non-payment of concession fees in both 2017 and 2018 the wholly owned subsidiary of Plateau Energy Metals (PLU.v) would be stripped of 32 concessions from its flagship project in the Macusani region of Puno, Peru. What's more, one of the 32 concessions now stripped from the company is Ocacasa 4 which is 1000 hectares of the total 1,700 hectare zone of the property that contains its lithium resource. 



This snafu rates highly in IKN's "Annals of Material Event Disclosure Failure." Frankly amazing that the company has tried to keep this under wraps.

2) The very next day, PLU.v published a NR which made reference to the post of the day before. It stated among other things that, "The Company wishes to confirm all of its mineral concessions are in good standing and are 100% controlled." It accused this blog of spreading misinformation (exact words "It's disappointing to see this irresponsible spread of misinformation"), it claimed to "operate in an open and transparent manner" (that's another direct quote) and also said it was considering taking legal action against the source, i.e. me.

3) Yesterday, it emerged that Plateau Energy was lying through its teeth and that IKN (i.e. me) had provided the true story.
  • Its concessions were not in good standing.
  • There was no misinformation.
  • PLU has just lost its appeal and lost its concessions.
  • And now its my turn to consider legal action for defamation, you lying fucker Alex Holmes. 
IKN Kung Fu is strong. I wonder how those dumbass shareholders who bombarded me with messages back in March calling me all sorts of wonderful things are feeling this weekend...a little sheepish, guys?

7/26/19

Plateau Energy Metals (PLU.v) has some splainin to do

Remember when IKN revealed that Plateau Energy (PLU.v) had lost part of its key concession ground in Puno, then we watched as PLU went legalese in order to cover up the cruel reality and even talked about legal action into "misinformation" about the lack of good standing of its concessions (legal action that was all talk no trousers and nothing ever came from it, surprise surprise)?

Well, from what this desk heard this evening, PLU has some serious explaining to do about the rejection of their appeal, which means that Peru has indeed confirmed that it has stripped PLU of the concessions in question and that PLU is even barred from participating in the upcoming auction to decide on the new owner.Oops.

The Friday OT: Rage Against The Machine; Guerrilla Radio

Because out of the blue, a pal sent me this link this week just as another band, that of the Eton Oxbridge overlords, got their hands back on real power in The UK. Fit the moment perfectly. Also the vid is fun, from the days when bands did that type of video, with the multi-edit band shots and the minor narrative that plays out.



Youtube here. Fist-shakers of the world, unite. (And Joe Mazumdar on lead guitar, of course).

Keeping tabs on the Victoria Gold (VIT.v) capex blowout

We're up to C$486m as at end May 2019:


Commissioning of the mine is due September, so add four months of straight capital spend, then don't forget the working cap VIT will need on order to get free cash flow positive (will that happen over the Yukon winter? Longs praying for a smooth ramp-up). Up to its gills in debt, 858.3m shares out, a 5% NSR that will weigh it down for years and a mine that was supposed to cost C$369m, according to the feasibility study that's now worth fark all as a valuation document, it was only ever an exercise in sequin throwing to separate the bankers from their cash. No wonder the others have left Orion holding the bag, VIT's track record as a miner is abysmal even before it starts mining.

Marin Katusa has his head so far up Rick Rule's ass he should offer him a free colonoscopy

And a prostate gland check while there:



There's sycophancy, there's ass licking, then there's the total cringefest embarrassment level, the one POTUS demands of his underlings. Maybe all this is due to Katusa costing Rule so much money with his pisspoor political risk calls on uranium.

Bonterra Resources (BTR.v) runs a placement

When writing up on the site visit to Bonterra (BTR.v) in IKN525 dated June 16th, part of the conclusion passage to the note went like this:
"Overall, even if I’m being too cautious with these numbers, I cannot see any way BTR with its background burn rate avoiding a low cash position soon, it will surely go back to market during the classic September/October financing window."

Which shows what happens when gold finally catches a bid. We didn't have to wait until the other side of Labor Day for the news out of BTR:
Vancouver, BC – July 26, 2019 – Bonterra Resources Inc. (TSX-V: BTR, US: BONXF, FSE: 9BR2) (the “Company” or “Bonterra”) is pleased to announce that it has entered into an agreement with Sprott Capital Partners LP to act as lead agent (the “Lead Agent”), on its own behalf and, if applicable, on behalf of a syndicate of agents (collectively with the Lead Agent, the “Agents”), in connection with a “best efforts” private placement to raise gross proceeds of up to $27,001,400 (the “Offering”).

Most of it is priced at C$2.50, with some flow-through action at higher ticket prices. So anyway, my timing was wrong but at least I got the size right (IKN house guess was U$20m, so half a million USD out). But wouldn't it be a terrible thing to find out news of this placement led by Sprott Capital Paertners had leaked to the market early:


But that would never happen. Not in Canada. Oh no.

7/25/19

Argentina Number One!

Well done, guys, first in the world again. The newly updated Bloomberg Emerging Market Economy Scorecard:



World's most vulnerable emerging market, according to the Bloomberg/IMF methodology. It doesn't get a single pass mark, with the worst metrics being its short-term external debt requirement and its inflation, which has missed target by so much and so many years running that it's not worth taking its economy team seriously any longer.

7/24/19

The ten day chart of Sandstorm Gold (SAND) (SSL.to)

A textbook breakout from highs. If you ever need a study case, charting people, look no further:



Just so we're clear, yes SAND is going higher. And yes, I own some. But no, not selling anytime yet.

Choosing the right mining newsletter for you: A flowchart

Hope this helps.

Prize Mining (PRZ.v) to change name to "BridgeMark Gold and Copper Mining Ltd"

Along with the 5-for-1 rollback announced in today's NR, there's this:

"Furthermore, at the Meeting, the shareholders will be asked to consider a special resolution to approve an amendment to the Articles of Incorporation of the Company to change the name of the Company to "BridgeMark Gold and Copper Mining Ltd." or such other name as the board of directors of the Company may approve (the "Name Change").  If the Name Change is approved..."

Now you know.

7/23/19

Excellon Resources (EXN.to) 2q19 production

Nice base metals mine you got there, guys:




NR here.

The Class action securities fraud case against Tahoe Resources

Just to let you know that the US class action securities fraud case brought against Tahoe Resources, for its actions and directives at its Escobal mine in Guatemala, has just passed an important stage. The judge has dismissed the Tahoe Resources (now Pan American Silver PAAS) motion to dismiss, now the case will move to discovery.

This is about to get really interesting. A high chance of finding out the reality of how these companies work in LatAm is in the offing. Lookin' right atcha, Ferrari Kev.

Alexco (AXU) (AXR.to): Kudos to Cantor

The way I understand it, from persons close to the deal (as they say), the Cantor Fitzgerald people approached Alexco the weekend of the June 3rd announcement of the U$6.5m deal price at U$1.00, told AXU they had backing for that size at that price and knew that even though the company stock had just run hard on good news, it was managed in a conservative, risk-conscious style which meant Alexco might agree to the U$1.00 price. And they did. Two months later:


The guy at Cantor who put that deal together should take a bow, that's how capitalism is supposed to work. Well done, sir or madam, make sure you show your boss this post.

7/22/19

Regarding Tia Maria

From IKN530, out last night:



Peru: Tia Maria hype
On a PR level, President Vizcarra’s handling of the Tia Maria construction licence affair has been mediocre at best, which is surprising considering he was the one (With Governor of Moquegua) who managed a successful negotiation between the people of the region and the Quellaveco mine owned by Anglo American. His main error was to have talked up a visit to the zone of influence around the Southern Peru (SCCO Tia Maria project by either himself of his Prime Minister, only to abandon that plan and issue the construction licence anyway. The main message to the Islay locals that “we little choice but to approve the permit, but there will be no construction until a consensus is achieved locally” has been scuppered by his non-appearance locally, summed up by Arequipa governor Elmer Cáceres who, when asked whether either he or locals were willing to sit down and talk, replied (translated) (18), “If they’ve granted the construction licence, what are we going to have a dialogue about? We demand, as the region of Arequipa, that the construction licence be annulled. If it is, then we can sit down and talk. As long as it is not revoked, what are we going to talk about?” He has a point, as SCCO could if they wish ignore both national government and local resident, just plough ahead and (try to) build their mine. Really wouldn’t be advisable, though. Unsurprisingly the government replied that the permit was irrevocable (technically true, but this is South America and anything can happen) so we have immediately fallen into a deep impasse, both sides entrenched and unlikely to speak to each other directly in the weeks to come. Cáceres is my idea of a bad governor (see IKN Weeklies passim), so it’s downright foolish of Vizcarra to have offered up such an easy political advantage to him.

However, as noted last weekend context is required. The enemies of the current government (and there are many) are trying hard to make Tia Maria into some sort of inflection point in the Peru mining sector and hyping it as the last chance for the country. They say if it fails, the mining sector will fall into complete inertia and that’s utter balderdash and nonsense. Tia Maria has been a no-go for the last eight years and that’s not going to change, neither will it stop other projects from becoming operating mines in the years to come including Mina Justa and Quellaveco  (currently being built), then add the development we’ll see in the Cajamarca region over the next five to ten years, that’s without even checking the Peru Mining Ministry website.

Tia Maria is a major issue, yes, but it’s first and foremost an issue for SCCO which has backed itself into a corner with unspeakably bad CSR policies over the years. Above and beyond the eight locals who have died in separate clashes during protests over the years there (and locals are very quick to remind you of that fact), let us consider the way in which the SCCO management said in 2015 that those opposed to the project were “anti-mining terrorists” and the same person in 2018 noted that the zone was the birthplace of Abimael Guzmán, leader of the Sendero Luminoso extreme left wing terrorist group that murdered countless thousands in the 1980’s and 1990’s, and that “there must be something in the genes there”. Accusing any group of terrorism is serious stuff, doing it in a place like Peru is triple trouble. It is of course also political issue, a hot potato for the government, a football to be kicked back and forth between the sitting administration and its opposition. However it is not some sort of nemesis for the Peru mining sector, never has been and never will be. Context, please.

PS: This Sunday morning, the latest Ipsos survey shows the approval rating for President Martín Vizcarra down from 50% to 44% (19). The main reason for the change is a precipitous 20 point drop in his approval in the South of the country, from 56% in June to 36% today, with the principle reason cited being his (mis)handling of the Tia Maria permitting issue. His approval rating rose slightly in Lima/Conurbation (from 49% to 52%) but fell in all provincial macro-regions, which in itself is an indication of the political split of the country. He also polls most strongly with the higher level socio-economic groups (A+B), lowest with the levels (D+E). Sadly, we’ve seen this movie before. The 2021 presidential election campaign will bring interesting times to Peru (in the Chinese proverb way).


7/21/19

The IKN Weekly out now

A truly beautiful motor vehicle, had this photo 
on store weeks, waiting for 530 to come up.

IKN530 has just been sent to subscribers. It's amazing what you can cram into 34 pages and 16,500 words if you put your mind to it.

Turquoise Hill (TRQ) and The Gotcha

One day, the golf club pro was approached by one of the older club members, who said, "Hey there! I will bet you a thousand dollars I can beat you in a round of golf today. No handicapping either, a straight shot-to-shot competition, all you need to do is give me two "Gotchas"." The club pro readily agreed, no matter that he didn't really understand what a gotcha was. So on the first tee, just as the pro was addressing the ball and about to hit his drive, the old guy came up behind him and whacked him hard between the legs with a 5 iron, shouting GOTCHA! as he did so.

Come the end of the round and the old guy won. The pro had played terribly and his pals wanted to know what had gone wrong and how he'd lost $1,000. After all, they said, he only had two Gotchas and he'd already used one on the very first tee. To which the pro explained, "Yeah, but you try playing a round of golf waiting for the second gotcha." End of cheesy golf yarn. 

I was asked about Turquoise Hill (TRQ) (TRQ.to) on Twitter this morning and the first thing that came to mind was that golf joke. The problem with Mongolia is that they agree on a contract, promise with all hands on all sacred books that the deal is set in stone, pretend that they are willing to enter into long-term, mutually beneficial deals and then, when circumstances suit the country, its congress will turn around and insist that the mining company re-negotiate the deal (else be thrown out). I don't see why I should expose my cash to the whims and fancies of non-serious Asian country that farks miners around, changes rules and moves goalposts on a regular basis and without a care in the world. I have enough on my plate trying to keep up with the shenanigans played by LatAm politicos, why complicate life further?