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10/25/19

The Friday OT: Mollono.Bass: Sun Dance

The latest track from one of the newest names on my playlist rotation, great sound and this is typical of his work



Youtube here. All his stuff with Ava Asante is top class.

Excellon (EXN.to): Short, not sweet

As short news releases go...

TORONTO, Oct. 25, 2019 /CNW/ - Excellon Resources Inc. (TSX:EXN, EXN.WT, OTC:EXLLF and FRA:E4X1) ("Excellon" or the "Company") announces the resignation of Denis Flood from his position of Vice President Technical Services.

About Excellon


...this one is painfully short. Well, I suppose that if the CEO isn't up for doing it, somebody's got to take the fall for the pisspoor results from this company over the last two years.

Sandstorm Gold (SAND) (SSL.to): Size matters

On the radar, Sandstorm (SAND) (SSL.to) has been in quiet achiever mode, up nicely over the last 48 hours on accumulation trading patterns.


In the opinion of your humble scribe (and one of the several reasons I own some), SAND is overdue a re-rating. And part of that is simply because the wider market hasn't appreciated the growth in market cap we've seen as this company is now worth over U$1Bn, one of the important threshold numbers that allows more US instos to participate if desired. Also SAND trails the price/sales price/earnings multiples of the big streamer/royalty plays (FNV, WPM, RGLD) by too much these days and when the market begins to gives it due credit for growth, pipeline and its much improved financial standing (SAND has come a long way from the failed Brazilian bets of a few years ago), we should see a virtuous circle appear which sends SAND share prices and therefore market cap higher, simply because its market cap is higher. I see no reason at all why SAND can only command a price/sales of 11X while Franco, Wheaton etc get at least 15X and at some moments, up to 25X. 

SAND as stands today can go a lot higher, all it requires is a little more market traction. For sure when Hod Maden starts to kick in the company will change forever, but there's no need to wait that long for a successful trade.

10/24/19

New Pacific Metals (NUAG.v): Put-up or shut-up time for this Doody pump

It's been this long...



...since the Doody/Scamsberry dynamic duo pimped and pumped New Pacific Metals (NUAG.v) as the absolute sure fire next best thing ever (Feng in Bolivia...save me...) and as I'm sure you can appreciate, he volumes have dropped, the prices have held and just about everyone who decided to be on this company due to the Doody/Scamsberry pumpo is on. Time for the company to show its worth, else face the inevitable consequences.

This humble corner of cyberspace is clearly not the only one that has spotted the trade potential of precious metals producers in the Q3 reporting period

We do like a long title. Anyway, this:


Keep an eye on trading in Newmont, Barrick, Newcrest, Franco-Nevada and then all their Tier 2 pals on the day before each company reports its quarter.

Victory Metals (VMX.v) spins its failures into a ....victory?

When your corporate title includes a word like Victory, you're feeling the pressure to win at all times. 

Three things of interest in this morning's "Victory Metals Announces Closing of Private Placement at a 70% Premium to Market" NR, which breathlessly told of how they raised $500k by selling 746,268 "...at $0.67 per Share representing a premium of 70% to the previous day's closing price." The first interesting thing is that when the placement was announced, VMX.v was at 45c and the premium was 49%.

 The second thing is that the closure of this deal means we're about to get the drill rsults from Iron Point and you can bet your last shekel they are going to cherrypick the headline data on that one, too.

As for the third point of interest, that's more about what's not mentioned than what is. Here's the blurb from the end of the NR, the one our eyes tend to skip over these days because they are all the same:

About Victory Metals
Victory owns a 100% interest in the Iron Point Vanadium Project, located 22 miles east of Winnemucca, Nevada. The project is located within a few miles of Interstate 80, has high voltage electric power lines running through the project area and a railroad line passing across the northern property boundary. The Company is well financed to advance the project through resource estimation and initial feasibility study work. Additionally, Victory has a joint venture with Ethos Gold Corp. (TSX-V:ECC), whereby Ethos Gold Corp. can earn a 50% interest in the deep gold rights at Iron Point by spending $5M over a three year period. Victory has a proven capital markets and mining team led by Executive Chairman Paul Matysek. Major shareholders include Casino Gold (46%), and management, directors and founders (27%). Approximately 35% of the Company's issued and outstanding shares are subject to an escrow release over the next two and a half years. 
Please see the Company's website at www.victorymetals.ca.
On Behalf of the Board of Directors of
VICTORY METALS INC.
Paul Matysek
Executive Chairman and Director

I don't know about you, but when a company has a Chief Executive Officers, aka CEO, then it's normally that person who runs the company, does the work, appears on the corporate literature, givs quotes and generally acts like the boos. However in this case the name of the CEO of Victory Metals, Collin Kettell, is completely missing from the NR. Why would that be...?
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10/23/19

Agnico Eagle's (AEM) strong 3q19 financials adds weight to house theory about the importance of the 3q19 reporting period for miners

We do love a long title. Anyway, Agnico Eagle (AEM) just announced ts 3q19 financials, here's the link and here are a couple of charts. This stacks top line revenues against operating earnings:


This is net earnings per share, which excludes the $1.68 loss taken by AEM in 4q18 due to impairments (skews this basic chart out by too much).


Anyway, great quarter from all angles and one that adds weight to this house theory about the increased significance of the 3q19 reporting period for mining companies. Here's the reminder:


With the uptick in gold ownership and the way in which we’ve witnessed traded volumes in precious metals stocks drop sharply in the last couple of weeks, it occurs to me that the whole market is sitting around waiting to find out if the bets they placed on juniors were right or wrong and what’s more they are only watching gold price as their marker and judge. If gold goes to 1600 they will be right, if it goes back under 1450 they’re going to sell the juniors.



But at some point a new driver will appear and I think we might have one in our very near future. One thing that doesn’t seem to be in calculations and with the potential to snap the market out of this precious metals inertia are strong quarterly operating results from the tier 1 and tier 2 mining companies and on consideration, I think that is what Barrick, Newmont, Agnico, Newcrest and all their bigass friends (into which we must also include the new star-turn Kirkland Lake) are about to deliver to the market. If the third quarter earnings period turns out to be as positive for the mining sector as I suspect, the rally is on its way even if gold stays at 1500 for the rest of 2019 and to gauge that call, I’m marking the GDX clock at $26.96 this weekend; let’s see where we are at the end of the main earnings period.

Excellon Resources (EXN.to) 3q19 production

Here's the link, here's a production tracker chart...



...here's a price chart...


...and here's the No Shit Sherlock quote from the CEO:
"...we continue to have further work to do at both Platosa and Miguel Auza ," stated Brendan Cahill , President and Chief Executive Officer. "Production did not meet our expectations in Q3 2019 due to lower than planned metal recoveries at our Miguel Auza processing facility and delayed processing of ore stockpiles and delivery of concentrate inventory at quarter-end relative to Q2 2019. The delay in ore processing and concentrate delivery will result in higher all-in sustaining costs during the quarter relatively to recent quarters."

Who hasn't thought about resigning yet. We are now two years and counting into the commissioning phase of the water pump investment, nothing to show for it.

10/22/19

Your next violent South America protest is planned for South Peru next week

First, we must consider that despite not getting much attention recently*, the latest protest by locals in the South coastal Islay area of Arequipa region, Peru, against the Tia Maria project (SCCO) have continued unabated and today reached 100 days. However, for the last month locals have allowed schools to return to normal and only formed their protest blockades until midday, an agreement that has allowed agriculture to continue unaffected (they are not into stopping themselves from planting their own rice) and perhaps due to this, the world no longer cares

Second, we note that Peru's Mining Council has until October 29th to rule on the viability (or not) of the Tia Maria project. The council has heard evidence from all interested parties and will rule on five issues arising and in theory at least, has the power to rescind the current environmental and construction permits.

Third, the protesting locals this week announced a three day total stoppage of all activities in the zone, to run from this Saturday until Tuesday 29th October.

We combine those facts, mix thoroughly and place into a medium oven for 45 minutes. As the chances of the Mining Council taking away any permit of any multinational mining company employing tens of thousands of people in Peru are precisely zero, expect the Tia Maria protest planned until October 29th to extend and accelerate through the Arequipa region (including its 1m population regional capital city) as next week unfolds. And remember that a very very lot of copper concentrate leaves Peru via the port of Matarani.


*Combine the news cycle, the diminished attention span of the average human being and you're left with a desperate situation in which...oh look! a butterfly! So pretty, look how fast it can fly

"BCSC to get strongest collection and enforcement powers in Canada"

In this NR yesterday, the BCSC announced that it was being armed with new teeth to fight the scumbags and rip-off merchants who have been benefiting from ill-gotten gains for far too long and dragging the Canadian junior mining sector in particular towards its won demise. However, as we know that the BCSC has been woefully inept in going after white collar criminals neither should we hold our collective breath; it's one thing to have new powers, quite another when the ringleaders of the Vancouver rip-off show hang out at the same, clubs, bars and restaurants as the people who are suppsoedly overseeing their activities. Anyway, here's the NR:

VANCOUVER, Oct. 21, 2019 /CNW/ - The provincial government has announced sweeping changes to the Securities Act, giving the British Columbia Securities Commission (BCSC) some of the strongest powers in the country to protect investors and tougher consequences for wrongdoers.
"We'd like to thank the B.C. government for taking action to crack down on white collar crime with these ground-breaking amendments," said Brenda Leong, chair and CEO of the BCSC. "We now have new and better tools to go after the bad actors who break the law and cause significant harm to investors and the capital markets."
The proposed amendments, many of which are unprecedented in Canada, include:
  • broader powers to collect financial sanctions when there are assets to collect
  • mandatory minimum jail sentences for certain types of fraud
  • increased penalties for certain types of misconduct
  • new prohibitions on false or misleading statements
  • tighter rules around promotional activities
"Our government is taking action to make sure we have the strongest protections in Canada for people who are investing and tough penalties for those who are abusing the system," said Carole James, Minister of Finance. "These changes send a clear signal to fraudsters that the rules do apply in B.C. and if you break them, there will be consequences. People can feel confident knowing that the investment markets will be protected today and into the future."
In addition to enhancing the BCSC's collection and enforcement powers, the amendments modernize the Act to ensure it is keeping pace with evolving markets and systemic risks. This includes a regime for derivatives and benchmarks that is harmonized with other jurisdictions across Canada such as Alberta and Ontario.
The legislation introduced today includes more than 100 changes to the Act, the most extensive amendments since it was enacted in 1996.
Read more about the proposed amendments in the Ministry of Finance's press release and backgrounder



10/21/19

The IKN Weekly, out now




IKN543 has just been sent to subscribers. The IKN Weekly: Papering over the cracks of dubious portfolios since 2009.