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11/9/19

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

....(and yes it's been a while since this weekend feature it's just that it's the first week in six or so that I've posted enough to have a reasonable choice) in reverse order:

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Third Place: "Garibaldi (GGI.v): "Pssst! We think we've found the feeder system!"". The best executed Canadian scam of the last five years.

Second Place: "Mailbag on First Majestic (AG) (FR.to)". Math is fun!
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First Place: "McEwen Mining (MUX): Puppet Show and Spinal Tap part deux". MUX has always been more sizzle than steak. More people are working that out now.

11/8/19

Philip Pascall of First Quantum (FM.to) featured in the ex-President Carlos Varela "Varelaleaks" scandal

Ah, the Friday evening long title. Anyway, see below screenshots of the whatsapp convo between then Panamanian President Carlos Varela of Panama and chair, joint founder and CEO of First Quantum (FM.to) Philip Pascall, published as part of the Varelaleaks whistleblowing currently rocking Panama's political boat (which you can find under the appropriate number on the scroll list on the left of this page, about a third of the way down).
 
 




The date-stamps on those messages are more than amusing, it's as if he knew in adva....nah! Many thanks to my friend for the heads-up.

The Friday OT: deadmau5; luxuria (ov) [Tinlicker Remix]

This is just so beautiful. That's all I've got, words are superfluous, this man makes such majestic, souch-touhing music that you just need to discover it for yourself.





Youtube here

Mailbag on First Majestic (AG) (FR.to)

Mailbag of the day is from Reader E, who likes playing with numbers as much as I do. He's quick to point out that this is the most basic of calculations and does not include items such as tax, investments, exploration etc. Also, he's being very generous to FR by leaving the production un-discounted, at NPV-5% it wouldn't even make U$600m. But as a ballpark, it does indeed shine a light on the prices people are willing to pay to have something with the word 'silver' in its corporate title.

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In regards to first majestic (AG), I actually made a funny calculation that exposes the craziness:

1) Let's take all of the measured and indicated silver resources of the company (reserves included of course), from their own website (gold is included in AISC already so we ignore).
2) Now, let's assume that their AISC numbers (which include the gold) really reflect the cost of taking those ounces of the ground, 
3) and let's just assume that they somehow succeed in producing all of their silver and gold in just one day and sell it immediately. 

the value we get:
M&I silver ounces: 150M 
AISC: $10/oz

So at a silver price of $17/oz, and AISC of $10/oz.... we get a value of 150,000,000 ounces X $7 = $1.05B  (remember, I'm not using NPV5 here, this is just cash flow, for a company that's traded for $2B).

The Bluestone (BSR.to) CAD$475,000 pump

On September 17th, an outfit called Gold Investor published a 16 page promotional report on Bluestone Resources (BSR.to), both on PDF and in glossy physical copies with a professionally shot front cover of the CEO dramatically entitled "The Gold Getter". Bluestone paid CAD$475,000 for the promo. Here's a price chart:



Another idiot CEO with more ego than brains.

UPDATE: A kind reader offers a link to the C$475k pumpo

11/7/19

Born under a bad sign, Las Bambas has another truck accident and concentrate spill

As announced by Peru's enviro office OEFA just a few minutes ago, a truck carrying concentrate has overturned as it drove the so-called "Mining Corridor", which in turn is still under emergency laws due to the recent protests and road blocks against the company by locals. Due to the Las Bambas trucks and the pollution they cause in their locality, wouldn't you know?

Anyway, great timing there MMG guys! You sure know how to win friends and influenza people.

RIP Ginger Baker.




Dan Earle lands at Solaris Copper

Once of TD Sec, now CEO of Solaris. Read all about it here.

Let us remember exactly what Marin Katusa said about Lucara Diamond Corp (LUC.to) in February 2018

In his extremely loud and promotional February 26th 2018 Special Alert to subscribers (who pay him something like $3k a year) entitled "Total Disruption: This is THE Most Important Alert I Have Ever Sent", Marin Katusa gave the full-court pump on Lucara Diamond Corp (LUC.to) and stated that he was putting his own money where his mouth was in the following way:
"I will be making this one of my largest bets ever and plan on making it one of my core holdings for many years to come."
Largest bets ever...many years to come...mmm lots of crunchy goodness there. He also said he was willing to pay up to $2.60 to build his position.



Got the butthurt yet, you freakin snake oil salesman?

Bear Creek (BCM.v) and the art of de-risking

The art is to ignore anything that is really risky and work hardest on the sequin throwing. I will now leave you in the capable hands of A. Reader, a person who has forgotten more than I know about mining for precious metals.

I love this news release They took a 2015 report that showed that the project was marginal at best and then updated it in 2017. The 2017 updated showed that, surprise, surprise, the project is marginal at best. No more met testing had been done on a very complex ore body and so the result didn't change. 
 
And now their review, using Ausenco's magic, has managed to turn the project into something completely "de-risked". And without even doing any more of the met testing required to decipher the complexities of the orebody. This mine has two distinct ore types that require different processing, and the bulk of the ore is "transition" anyway and no-one knows what portion of the transition ore (which is around 80% of the orebody) will be handled by which part of the plant, nor the real recoveries. The miners had trouble getting to grips with the mining plan, the processors had trouble with the processing, yet now they managed to de-risk the plant without any more actual effort in met testing. I love the magic. So far it appears that no-one has been fooled and that investors know how to read the fine print. But I wonder when someone is going to fall for the trap ...


First Majestic (AG) (FR.to) 3q19 financials

Thanks to its net EPS of 4c, First Majestic Silver (AG) (FR.to) is running a forward price/earnings of 63X (and this is the best quarter for a long time, so don't accuse me of cherry-picking data). Maybe Keith Neumeyer wanted a number that more closely matched the gold/silver ratio. As for a bit of insight on the mines at the company...


...they are hiding plenty behind the gold of San Dimas and Santa Elena these days. On that subject, can we shoot dead the legend about First Majestic being a "pure silver play" once and for all? Yes way back when it got 90%+ of its gross revenues from silver and Keif does everything he can to perpetuate the myth, but these days it's just 58% of revenues from silver. 

Said it once, said it a dozen times, the best way to play First Majestic is to be Sandstorm Gold.


11/6/19

Three charts to get a handle on the New Gold (NGD) 3q19 financials

Rubbernecking car crashes again but hey, we all have our dirty little habits. Anyway, first see this, the shares out chart that shows the count up by 95m after its equity placement that raised a gross of C$150m (U$120m at a forex of 0.8/1).



Then consider that despite raising that capital and making big fuss about paying down $100m of its long-term debt with the money, liabilities did this:
  • Current liabilities up U$46.1m quarter-over-quarter (trade payables shot up bigtime)
  • Long term debt down U$54.4m QoQ (so much for the U$100m spin)
  • Other long term liabilities up U$25m QoQ (so much for the U$100m spin)
  • Total liabilities up U$16.7m QoQ, to U$1.292Bn (with a B)


As for its working cap position after that C$150m injection of love...


Where did all the money go? NR here.

SEMAFO and terrorism

The NR today:

SEMAFO: Attack on the Road Between Fada and Boungou in Est Region

November 06, 2019
MONTREAL, Nov. 6, 2019 /CNW Telbec/ - SEMAFO Inc. (TSX: SMF) (OMX: SMF) ("SEMAFO") regrets to report there was an attack on the road between Fada and the Boungou Mine site in the Est region of Burkina Faso. The incident happened approximately 40 kilometers from the Boungou Mine. The convoy, escorted by military personnel,  comprised five buses transporting  SEMAFO national employees, contractors and suppliers. Information currently has several fatalities and injuries. We will issue a more fulsome statement when complete details are known.
Boungou mine site remains secured and our operations are not affected. We are actively working with all levels of authorities to ensure the on-going safety and security of our employees, contractors and suppliers.
The Company would like to express its sincere sympathy to families of the victims in addition to its firm support of Burkina Faso's security forces.
About SEMAFO


Terrorist attacks have been on the rise in Burkina Faso and just this weekend on Twitter, it was noticeable that the newsletter whores who are pumping Burkina juniors in exchange for payments were all "oh don't worry, that's only in the North". You know who you are, you shameful toerags.

11/5/19

Lucara Diamond Corp (LUC.to): Truth overcomes pumpjob

And the truth hurts:


The Karowe PFS is out and the numbers sting. However, those of you who paid attention to this IKN post from June last year were forewarned, unlike those naive fools who were led to the slaughter in this by Marin Katusa. A reminder of the IKN info that day:

Those of you who have visited Karowe will know that the open pit mine life has always been relatively short, even though the original pit was cut into basalt and had pitwall angles of around 60°. You'd normally think that under the circumstances of such competent host rock, they'd be able to avoid the mega-expense of a shaft and simply push back on the pit in order to extend open pit mine life. Sadly, that's not the case because as the open pit model matures the country rock has become sandstone, cannot support such a sharp angle and was flared out to around 40°. But then it gets even worse, because in the last couple of years of the open pit mine plan the pitwall moves into mudstone and the stability angle drops to a prohibitive 20°. That means it gets way too expense to cut back and the only way forward is to go underground, sink that shaft and go block caving. But even then, there's a serious geological issue at Karowe because normal block caving requires a competent host rock around your kimberlite pipe. LUC doesn't have that, it has sloppy mudstone all the way down so even after they raise a SLOM* from you retail monkeys currently buying into this pumpo, success is far from guaranteed.


With SLOM meaning "Shit Load Of Money." Further questions?

Garibaldi feeder update

Well, the market doesn't seem to be as keen on the results as the company and its breathless prose was. There's a shocker.


11/4/19

Garibaldi (GGI.v): "Pssst! We think we've found the feeder system!"

Heaven help us. NR here.

The Friday OT on a Monday: Coolio; Sumpin' New

I've done them on Thursdays and Saturdays before, let it slide...

Your body will start moving even if you don't want it to. My stars this track is the best, infectious isn't even close.



And the trike, love the trike. Youtube here.

Evo's copter crash

It turns out that the "emergency landing" made by the helicopter carrying President Evo Morales of Bolivia wasn't really that, it was more of a accident on take-off and pilot error. The copter took off and when the pilot swung the tail around to be facing the wind correctly, he didn't notice a large, but old and disused metal advertising frame. The rear rotors clipped the metal frame and the aircraft was thrown about 15m into a ditch. Fortunately, nothing leaked or caught fire and all occupants were safely strapped in and unharmed. 

So now you know. This photo from this Spanish language report.



McEwen Mining (MUX): Puppet Show and Spinal Tap part deux

"If I told them once I've told them a hundred times, to put Spinal Tap first and puppet show last,"
  Jeanine Pettibone, This Is Spinal Tap


The most interesting thing about today's NR out of McEwen Mining (MUX) isn't how they try to bury the bad news at the bottom of the script, even though it's quite fun to get from a headline of "Grey Fox Drilling Hits 10.9 g/t Au over 18.8 m and 14.1 g/t Au over 8.4m" to this:

Updated Cost Estimates for Black Fox and Gold Bar

For Black Fox, cash costs(1) for the full year 2019 are expected to be in line with our guidance(2) of $905 per GEO, and AISC(1) are expected to be higher than our guidance(2) of $1,080 per GEO(3). Actual cash costs and AISC for Q3 YTD 2019 are $859 and $1,326 per GEO, respectively. Management’s AISC estimates for Q4 2019 and the full year 2019 are $1,100-1,200 and $1,250-1,300, respectively.

Cash costs have been well controlled at Black Fox in 2019, and higher AISC are a result of higher than expected sustaining capital expenses related to underground development, improvement projects, and additional capital spending associated with our transition to owner-operated crushing at the Stock Mill. We plan to scale back production in 2020 to enable greater freedom to explore in the mine, and free resources to advance development of the Froome underground deposit adjacent to Black Fox.

For Gold Bar, cash costs and AISC for the full year 2019(4) are expected to be higher than our guidance(2) of $930 and $975 per GEO, respectively. Actual cash costs and AISC for Q3 YTD 2019 are $1,014 and $1,200 per GEO, respectively. Management’s cash costs estimates for Q4 2019 and the full year 2019 are $1,000-1,050 and $1,000-1,050 per GEO, respectively; and AISC for Q4 2019 and the full year 2019 are $1,250-1,350 and $1,200-1,300 per GEO, respectively.

 
Nope, the most interesting thing is that MUX has form on this type of sleight of hand, as seen in the first installment of McEwen Mining (MUX): Puppet Show and Spinal Tap dated December last year. That was about Black Fox (aka White Elephant), too.

Lydian (LYD.to) and Cronimet: Even the Deputy Prime Minister of Armenia knows

Further to the IKN coverage of how Germany's Cronimet has been bribing politicians in Armenia and funding the anti-mine campaign against the Amulsar project owned by Lydian (LYD.v), here's the link to the latest evidence and here's a Google Translate from Armenian (not my strongest suit) into English. Armenia's deputy PM, Tigran Avinyan, tells it as it is:

The Deputy Prime Minister said this on October 22, during a meeting with representatives of the Armenian community in Tbilisi talking about the issue of Amulsar.
"We do not think that mining is a sector that should be stimulated and intensively developed in Armenia. However, Armenia has commitments, which can be seen as a non-partnership step backwards.
Environmental issues are a priority, but it is not our government's policy to make political decisions illegally, this is certain.
The campaign against Amulsar is definitely not. There are sincere and honest people who truly believe that this plan is a disaster. But there are also people who are directly linked to the mining business in the Republic of Armenia, who have invested considerable funds to organize this campaign. Otherwise, I assure you, you would not hear about Amulsar, because serious financial means are needed to make such a loud noise," the Deputy Prime Minister said.
Tigran Avinyan also noted that "the situation in other mines in Armenia is much worse than in the still open Amulsar mine."


As Harte Gold (HRT.to) decided to bury its disaster NR late on Friday evening...

....it's only correct that IKN puts it right in front of your face on Monday morning, all special and ready for the opening bell.

Harte Gold Provides Third Quarter Update and Guidance for 2019

TORONTO, Nov. 01, 2019 (GLOBE NEWSWIRE) -- HARTE GOLD CORP. (“Harte Gold” or the “Company”) (TSX: HRT / OTC: HRTFF / Frankfurt: H4O) provided the following operating results for the third quarter (“Q3 2019”) ended September 30, 2019.
Highlights
  • Mined tonnage increased 9% quarter over quarter.  The mill is now being fed 100% run of mine (“ROM”) ore
  • Stope production and sequencing was lower than expected due to continued start-up delays of the paste fill plant and lower than planned development rates
  • Underground infrastructure and contractor performance issues driving the quarter are being addressed
  • A temporary solution for the paste fill plant has been implemented and will continue in the short term
  • Gold production was 6,069 ounces for the quarter.  For the last nine months, Harte Gold produced 19,138 ounces
  • Quarterly results when compared to the Feasibility Study were below target.  Based on results to-date, full year 2019 guidance has been adjusted to 24,000 to 26,000 ounces at an AISC of US$2,000 to US$2,200 per ounce.  Previous guidance was 39,200 ounces at an AISC of US$1,300 to US$1,350 per ounce.
  • A life of mine plan for 2020 is being prepared and further guidance and will be provided when available
Operating Metrics, Q3 2019
   Q3 Comparison to Q2Q3 Comparison to
Feasibility Plan
 
 Q3
September
30, 2019
 Q2
June 30,
2019
Q3 vs. Q2 Feasibility
Plan
Q3 vs.
Feasibility
Plan
 
Ore mined (tonnes)46,235 42,6019 % 58,100(20%) 
Ore processed (tonnes)56,558 53,2166 % 58,100(3%) 
Average daily throughput (tpd)628 5916 % 646(3%) 
Processed grade (g/t)3.64 4.89(25%) 5.96(39%) 
Recovery (%)92% 93%(0%) 96%(3%) 
Gold ounces produced6,069 7,754(22%) 10,600(43%) 
Mine Production Ramp Up Overview
  • The Company is mining from areas developed at the Sugar Zone North and South ramps
  • Mill feed grade decreased due to a shortage of development of higher-grade stoping areas, which resulted in a larger contribution of lower grade development ore as the primary mill feed
  • Development delays and paste plant start-up issues also affected overall stope sequencing, which resulted in the Company mining off plan
  • To address challenges in Q3, the following steps have been taken:

    • Mine performance was addressed with the mining contractor and necessary actions are being taken to ensure adequate staffing and broader recruitment efforts
    • The paste plant is expected to be operational by year-end.  Critical components are being installed.  The Company will provide further updates on start-up of the paste plant as they become available
    • Mine infrastructure to support rock fill has been developed and will mitigate delays in operation of the paste fill plant
    • Improvements are underway to expand compressed air capacity, expected to increase the rate at which stopes can be developed
Adjusted 2019 Production and Guidance
Gold production in the first nine months of 2019 was 19,138 ounces.  Due to issues around mine development and stope availability in Q3, the Company expects fourth quarter production to be in the range of 5,000 to 7,000 ounces.  Accordingly, full year 2019 production guidance has been adjusted from 39,200 ounces per original guidance, to 24,000 to 26,000 ounces.
While operating costs were stabilized in Q3, as a result of lower production for the year and higher costs in the first half, annual AISC guidance has been modified and is expected to be in the range of US$2,000 to US$2,200 per ounce, from original guidance of US$1,300 to US$1,350 per ounce.  Further information on operating costs will be provided when the Company files its Q3 financials.
2020 Life of Mine Plan and Financial Budget
The Company is currently updating its life of mine plan and preparing a 2020 budget.  The Company will provide further guidance for 2020 at that time.
For further information, please contact:
Stephen G. Roman                                                                                         
Chairman and Interim CEO                                                                         
Tel: 416-368-0999                                                                                           
Email: sgr@hartegold.com                                                                           
Shawn Howarth
Vice President, Corporate Development
Tel: 416-368-0999
E-mail: sh@hartegold.com


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11/3/19

The IKN Weekly, out now


In my salad days, 
When I was green in judgment, cold in blood,
To say as I said then!

IKN545 has just been sent to subscribers. We take a good, hard look at Sandstorm Gold (SAND) and Guyana Goldfields (GUY.to) on the back of their rather disparate 3q19 financial results. Then plenty on the political situations in Peru, Bolivia, Mexico, Argentina and Chile (among other places) and how they might affect the mining sectors of those jurisdictions. And lots of other stuff, of course.