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9/18/19

Ecuador: Constitutional Court denies mining referendum question to Azuay province

Last night, Ecuador's Constitutional Court (CCE) ruled that the question put before them regarding a referendum on metals mining in Azuay province was denied passage, as they decided it "did not guarantee the freedom of choice of the reader" (i.e. it was biased in its wording, one way or the other) and threw out the petition. Leader of Azuay's anti-mining movement, its Prefect Yaku Pérez, says they will now take their fight to international courts. Good news for INV Metals (INV.to), which may get some temporary relief from the beating it's taken (but the antis aren't going away anytime soon and the lack of social licence here is just as important as any piece of paper). Here's how the CCE ruling read (screenshot):


Newmont (NEM), Barrick (GOLD) and even some Pan American Silver (PAAS) (from IKN538)

This humble corner of cyberspace notes with interest this Bloomie report on Newmont Goldcorpse (NEM) entitled "Newmont’s Incoming CEO Says No ‘Fire Sale’ Coming for Assets", a piece that starts like this:
"Newmont Goldcorp Corp. is ready to sit tight on asset sales, even if that means not reaching a previously announced goal of as much as $1.5 billion in divestments.
That’s according to Tom Palmer, the company’s incoming chief executive officer. The world’s largest gold producer will be focusing on optimizing its current assets and is happy overall with its portfolio, other than a previously announced sale of Red Lake in Canada, he said."
And continues so go have a look. But the reason your humble scribe's interested was piqued was mainly due to a piece included in this week's edition of The IKN Weekly, IKN538 out last Sunday 15th. Here's that note, which includes the theme of the Bloomie piece but goes a step further.



Newmont (NEM), Barrick (GOLD) and even some Pan American Silver: When this merger was announced back in Q1, one of the assumptions that went along with the fusion was that new Newmont Goldcorpse would have to dispose of several assets in order to balance the books. However, it’s taken until now in September for NEM to say anything about the likely main gig as on Friday it stated this in its “this is what we’re up to at Denver Gold Show” NR (11):

“Process underway for the potential sale of Red Lake in Canada”

“Process underway”. “Potential”. That’s the sort of corporate-speak that also says to me “don’t hold your breath and got me reflecting on the lack of corp M&A that’s come from the big mergers so far. As well as NEM and Goldcorp, we have Barrick (GOLD) which has largely held onto its full suite of assets on the Randgold merger. Then add in Pan American Silver (PAAS), not one of our Producer Basket stocks but also a company that was supposed to have disposed of assets (starting with its Lake Shore arm and following with La Arena in Peru) after its purchase of Tahoe Resources. There’s something going on here, after all part of the rationale for Bristow cleaning up Barrick was how he promised to dump any project that couldn’t deliver enough IRR at $1,000/oz and U$1,200/oz gold. Why is GOLD still propping up NovaGold at Donlin? Why is NEM only just “starting the potential process” for Red Lake? And nothing from PAAS so far.

Up until recently I’ve been inclined to believe the majors and/or tier 2 precious metals companies would beat the street in the current Q3, as on a straight line basis I don’t think many analyst models have adjusted fully for what U$1,500/oz gold does to their multiples. In fact I was forwarded a large BMO report which did just that, but it’s kind of late on the scene and many other houses are still lagging (in my view). However, that got tempered last week while reflecting on the fact that the big boys have dragged their feet on these supposed necessary asset disposals. I wrote on Twitter (12) that, “...the rising gold price has stopped the disposal sales from Barrick and Newmont. Pan American too. They are clinging on for better future asset prices by sacrificing near-term bottom lines.” In other words, yes I’d expect the top half of the Tier 1 and Tier 2 profit and loss sheets for 3q19 to look good, but having a load of fixed and underperforming assets on your books also means that “other financial” is likely to be harder hit than normal, which means in simple terms that these PM miners may do well in operations, but I suspect trouble in getting those operating profits down to the bottom line. The other place to watch is liquidity, as for example PAAS has a big “assets for sale” line item that’s currently propping up its current assets (and therefore working cap). It’s one thing to have that, but it’s not going to help the true liquidity position of the company and if the sales take much longer, PAAS in particular may have issues.


9/17/19

Minera IRL (MIRL.cse): The BS fud never stops with this story


No sooner than the news hits about Minera IRL's resounding victory in its arbitration with Cofide that the people paid by the liars and thieves at the centre of this story start BSsing the market about how the verdict will be overturned and annulled, or something. They're basing their claims on a NR emitted by Cofide today that, among other things, says they disagree with the ruling and are "evaluating legal action" against it. For your information, I've pasted a copy of the PR below.

Thing is, there really isn't any legal action that Cofide can take and what we saw today was a classic "cover your ass" statement to help quell the questions being thrown at ministers by journalists at Perumin. They were ambushed by reporters at the gate Monday, claimed to know nothing and requested a note from Cofide, which spun the result to within an inch of its life as it tries to get ministers off the hook. Thing is...

1) As Minera IRL correctly stated in its September 16th NR, the final award (over U$34m) is non-appealable. That's it folks, they signed on to this courtroom and now they own it.
2) The "annulment" mentioned in the NR and now being jumped upon by the idiot liars and losers is purely regarding judicial procedure, it has no relevance to the case or its evidence. It's to weed out judicial wrongdoings and every case of this type has such a period in Peru. But it's a wild improbability this one gets thrown out, as the people sitting on this arbitration panel were not a bunch of bumfluff lawyers from some sleepy provincial town. They were Horacio Grigera, Oswaldo Hundskopf and Alfredo Bullard, these people are in the hierarchy of legal power in Lima Peru and have the highest reputations, it would be a near-scandal to see Cofide move to get this thrown out on procedural grounds, they'd be burned at the stake just for trying. 

So please, give it up listening to the people who have been wrong and wrong again about this stock over the years, its gets boring having to fight their lies and BS, just mark them down as the liars and idiots that they are and move on from taking their advice. Cofide will quietly pay, IRL will get the debt financing it requires and IRL is now going to build Ollachea, there's really nothing to stop it from happening any longer. Disclosure: Long and holding every single one of my shares.


Randy Smallwood at Denver Gold Show

So far at least there's been a lot of samo-samo interviews coming out of the Colorado shows and far more heat than light (we do not need permabulls giving perma-opinions on usual suspects), but a rare exception is this one from Randy Smallwood, head honcho of Wheaton Stuff and Things (WPM). Sharp opinions on the mid-term future for the industry, social sustainability and silver. Here's the youtube link.


9/16/19

A short note to fellow Minera IRL shareholders

There's plenty I could say at this point, but instead of specifics I'd like to expand to what really matters and what makes us not only better traders, but better people.


There are so many Canadian mining movers and shakers who would rip off their own grandmothers for a quick win and I'm sick of the sight of those vapid bags of nothing, but there are another type who will hang on through thick and thin because they believe not only in capitalism, but also for the common good. Anyone who has held their shares in Minera IRL through these years can award themselves not only that badge of honour, but also the crapload of profit they are about to see in their portfolio ledger.

And to Daryl Hodges, Jaime Pinto and Pedro Grados: Fuck you.

Message ends.

9/15/19

The IKN Weekly, out now




IKN538 has just been sent to subscribers and here it is, the best weekly photo ever.