A flash update...

...was sent out to subscribers just after the opening bell this fine and crsip Tuesday morning. Belt'n'braces post done.

Chart of the day is...

...the gold/copper ratio, 12 months:

Just about the most interesting metals chart out there right now.

Dear Dorothy Kosich

Thanks for quoting me and all that, but you have a factual error in your note. I'm not a geologist, never have been, never will be and unlike other bullshit commentary merchants of this crazy segment of world industry who try to make out otherwise, have never tried to pretend to be one. In fact, I have been told by true members of the band of rockbanging reprobates that the only resemblance I have to a geol is the manner in which I take my alcoholic beverages. 

And by the way, if you're going to quote someone you should also provide a link. 

The Colombia peace process

Want to know how talks have been going between the government of Colombia and the FARC? Adam Isacson of WOLA has just published the latest in his series of peace process updates and it's jam packed with all the fine-grained detail you'll ever need. English language and a better digest than anything written in Spanish, for that matter. High recommendation.

Well well well; manacle my hands and feet, tickle me with a feather and call me Dolores

PMs are rallying.

They were just waiting for me to get back to the office, obviously. Pretty promise, won't leave again.

Spain-Chile immigration chart del día

An interesting little datapoint in Chile's La Tercera newspaper today:

And the obvious reaction from politicians? Yup, they're worried about a big influx of foreigners stealing local people's jobs and are now pushing for tighter immigration controls. My how times change.

UPDATE: Iwnattos kindly sends in this



Thank you, sir.

Returns on investment

Reader 'TWs' mail this morning was all about capex blowouts in South American gold mining and how Barrick's (ABX) now infamous capex blowout at Pascua Lama (Chile/Argentina) stood head and shoulders above the capex hike seen at Goldcorp's (GG) Cerro Negro project (Argentina...Santa Cruz, to be exact). So of course your humble scribe checked out the latest and yes, Cerro Negro's construction ticket has indeed climbed from $750m to $1.35Bn recently, but that's still not bad at face value when considering it's a gold deposit that has more than doubled in size already (we're up to 5.74m oz Au, with very decent silver kicker). But then we scratched at the numbers a little more, and...

• For one thing, GG started out at Cerro Negro by paying U$3.4Bn for then owner, Andean Resources. 
• And back then, post-credit cash costs were going to be $60/oz Au, nowadays they're slated at $350/oz.
• Then there's the timeline overrun, with GG now indicating that Cerro Negro won't start producing until 2014. As there's no capex budgeted in 2014 for Cerro Negro (yet), that smacks of more moolah to spend before the thing goes FCF+ too.

So we throw all that together with the 5.74m oz Au and what do we get?

1. Acquisition cost of $592/oz
2. Capex cost of $235/oz (and likely to climb a bit more)
3. Production cash cost of $350/oz (post credits, GG dixit)
4. Total: U$1,177/oz  (even before we start fiddling around with time value of money and reasonable discounts therein)

Well, with that kind of price tag per ounce we're just glad Cerro Negro is in a nice, safe mining jurisdiction that's approved by the world community for its economic and political stability as well as its low inflation rates. Oh...wait...

Mining PRs and the Ottotrans™, part 71

Top of the morning to you, as we start the week with the seventy-first episode of our occasional series that tries its jolly hardest to take the guff and nonsense written in mining news releases and translate it into something from which normal human beings can derive some understanding. Today's example comes from Stillwater Mining (SWC):

This is what they wrote:

BILLINGS, MT--(Marketwired - May 20, 2013) -STILLWATER MINING COMPANY (NYSE: SWC) (TSX:SWC.U) today announced the election of Brian Schweitzer, the former governor of Montana, as Chairman of the Board. Governor Schweitzer, elected to the Board at the Company's Annual General Meeting of shareholders on May 2, 2013, replaces Frank McAllister as Chairman. Mr. McAllister, who has served as Chairman and Chief Executive Officer (CEO) of the Company since 2001, will continue in the role of CEO and President of the Company during an interim period while the Board seeks a suitable candidate to succeed him. A committee of the Board has been established to carry out the CEO search, which will begin immediately. 

Stillwater's new Chairman, Governor Schweitzer, observed, "Stillwater Mining Company is favored with unique, high quality mineral assets in Montana which hold tremendous promise for the Company's future. I am honored to have the privilege of working with this new Board of Directors, which includes individuals with long experience and diverse perspectives on the mining industry. Together with the Company's dedicated and outstanding Montana-based workforce, I believe the Company's prospects for the future are exceptionally bright." 

Reflecting on his experiences as Chairman of the Company, Mr. McAllister noted, "I have taken immense pleasure from the many warm associations I have enjoyed during my service as Chairman of Stillwater Mining Company. Stillwater has a wonderful workforce and world-class operations. I welcome Governor Schweitzer as the Company's new Chairman, and I firmly believe that under his leadership, Stillwater will achieve new heights in its performance. I look forward to working with the Governor and the new Board as we complete this leadership transition." 

About Stillwater Mining Company

And this is what it means:

BILLINGS, MT--(Marketwired - May 20, 2013) -STILLWATER MINING COMPANY (NYSE: SWC) (TSX:SWC.U) today announced the election of Brian Schweitzer, the former governor of Montana, as Chairman of the Board. Governor Schweitzer, elected to the Board at the Company's Annual General Meeting of shareholders on May 2, 2013, replaces Frank McAllister as Chairman. Mr. McAllister, who has served as Chairman and Chief Executive Officer (CEO) of the Company since 2001, will continue in the role of CEO and President of the Company during an interim period while the Board seeks a suitable candidate to succeed him. A committee of the Board has been established to carry out the CEO search, which will begin immediately. 

Stillwater's new Chairman, Governor Schweitzer, observed, "Stillwater Mining Company is favored with unique, high quality mineral assets in Montana which hold tremendous promise for the Company's future. I am honored to have the privilege of working with this new Board of Directors, which includes individuals with long experience and diverse perspectives on the mining industry. Together with the Company's dedicated and outstanding Montana-based workforce, I believe the Company's prospects for the future are exceptionally bright." 

Reflecting on his experiences as Chairman of the Company, Mr. McAllister noted, "I have taken immense pleasure from hanging on to my job against all odds these last couple of years, but my decision to waste hundreds of millions of company dollars on a piece of worthless llama pasture in Argentina has nailed me in the end. Stillwater has a wonderful workforce, world-class operations but a really fucking stupid bunch of idiots that doesn't have the first clue about international political risk at board level. I welcome Governor Schweitzer as the Company's new Chairman and I firmly believe that under his leadership, Stillwater will sell Altar or at least write it down to the price it's really worth, which is zero. I look forward to gardening." 

About Stillwater Mining Company