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4/23/14

Proceeds

A little more detail in private placement news releases would be appreciated. Some honesty, too:
...the proceeds of the Offering will be used for exploration and general working capital purposes. By "exploration", we refer to your money being used in order that humanity might add to its knowledge of geological anomalies. By "general working capital purposes", we refer to how our CEO is fed up with traveling coach class. And the hookers and blow, obviously. This is Vancouver, after all.

Gold/Silver ratio, miner prices, GS, things of the ilk

On this...


..., the gold/silver ratio, the song remains the same. After flicking through a few other trackers, the overall sentiment is one of a sector in wait'n'see mode, looking for a catalyst to take it lower or higher. So for the meanwhile we drift, we follow a weak trend, we wait (and if only for that your humble scribe's general call in this period to pick at and buy decent beaten down mining names is reiterated; all good things to those who wait, Clarice).

Switching gears slightly, as it happens and after making a large cup of sweet tea, sitting down, pulling up that GS note yesterday evening (ty reader N) and reading it carefully, I happen to agree on their value-oriented call that producers concentrating on cash flows and bottom lines (rather than the growth model miners, or those running to stand still at current bullion prices) look cheap and are buys on their fundies. You should know by now that I'm no fan of the house and think them complete fuckers for a whole multitude of reasons, but credit where due, that note was a good argument and well put.

GS is still talking complete stupidities about gold price, however. The juxtaposition is best explained (in my own biased brain) by one set of GS analysts doing decent, oldschool, straight, numerical, value analysis work on stocks and seeing them cheap, while the bullion lower call from the very same company is sheer political bullshittery from a different place, department and mindset. Así termina mis dos centavitos.

On RIOM and rumours

After several e-mails arriving on the same subject, a quick note (if only to staunch the flow). Yes I've heard the same rumour as you, the one that apparently made the stock pop yesterday afternoon. No I'm not going to repeat it here because it's straight hearsay and I'm long the stock, so not going to join in the games. I'll say here that it looks like a classic rumour structure, with a grain of truth in the centre but then a whole heap of guesswork and conjecture is added on top, and as such I do not believe it. That's all and apologies if this sounds cryptic to others.

4/22/14

Football: It's nothing personal, it's just business

Manchester United (MANU) $MANU share price this morning hit its highest level since Fergie resigned.



So now you know.

Quel surprise! After trying and failing to jawbone gold down, Goldman Sachs (GS) now likes the sector

This morning the Vampire Squid made a new call on gold and the sector. Here's the front page blurb of the PDF:
Americas: Metals & Mining: Precious
Coverage view up to Neutral; initiate on five names and adding leverage; Buy ABX.TO
Becoming more constructive on gold and silver equities; raising coverage view to Neutral. After underperforming the SPX by 21% since September 2013, gold and silver equities now appear more fairly valued, offering an average 7% total upside. We raise our coverage view to Neutral as we believe (1) more responsible capital allocation, (2) successful cost cutting initiatives, (3) a refocus on maximizing free cash flow, and (4) sound strategic portfolio optimization should improve the positioning of our companies offsetting our below-consensus outlook for commodity prices (we forecast $1,200/oz for gold from 2015 onwards).  
Carving out 3 sub-sectors; prefer exposure to Seniors; expanding our coverage by 5. We are creating three sub-sectors across our Americas – Precious Metals coverage; Seniors, Juniors, and Royalty/Streaming. We see the largest upside risk in the Senior sub-sector as we become more constructive on the sector. We are also initiating coverage on five companies (BTO.TO, AGI.TO, FNV.TO, DGC.TO and BVN) and their ADRs, where relevant. 
Still prefer the harvesters over the investors We continue to focus on low-cost, FCF-generating names with strong balance sheets and fully funded volume growth. We maintain our Buy ratings on G.TO, YRI.TO and SLW.TO. Avoid our Sell-rated names IMG.TO, PAA.TO and ELD.TO.  
Adding leverage to the portfolio; we upgrade 
ABX.TO to Buy ABX.TO has actively shrunk to profitability over the past twelve months, focusing on its key FCF generating operations and divesting non-core strategic assets. Following the equity raise in 2013, we believe the company’s financial flexibility has significantly improved.  
Initiate BTO.TO at Buy; imminent volume growth drives FCF generation. We initiate coverage of BTO.TO with a Buy. BTO.TO has imminent production growth from Otjikoto project which enhances the company’s FCF generation and should fund future development.

Though it beats me how anyone can take this house of forked tongues seriously on any of its gold-related utterings.

Chart of the day is...

...ten days of Argonaut Gold (AR.to):


Maybe Mr Mkt isn't so stupid after all. Certainly hope this previous blahblah isn't to blame for the dumping.

This Thing Isn't Like That Thing, Dynasty Metals & Mining (DMM.to) edition

This thing: There was "an incident" at DMM.to's operation in Ecuador yesterday Sunday 20th April and we got to hear about it from the company this evening. In the NR, DMM wrote:
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Apr 21, 2014) - Dynasty Metals & Mining Inc. ("Dynasty" or the "Company") (DMM.TO)(DMMIF) reports that on April 20, 2014 it safely evacuated all employees from the main decline, Cabo de Hornos (the "Mine"), at its Zaruma Gold Project, as a precautionary measure due to a significant amount of smoke that was being emitted by a generator which was located inside the Mine, near the portal entrance. 
The smoke was produced as a result of a poor fuel mix in the generator, and although a significant amount of smoke was emitted there was no fire in the Mine or generator. The evacuation of the Mine meant that the Company missed the day shift of mining operations, however mine operations were quickly recommenced and is now operating as usual. 
The company thanks the government for their cooperation on this matter. 
About Dynasty Metals & Mining

That thing: Here's an excerpt from the local press about the same incident:
"The 66 workers managed to stay in a ventilated zone for five hours while rescue operations took place; 25 of them were hospitalized and 12 were admitted due to asfixia."
So much for the sanguine NR out of the company all cool and calm and nothing to see here move along. With 66 workers trapped and 12 of those suffering from enough breathing problems to be checked into hospital beds, you kind of get the feeling DMM missed a very big bullet this Easter weekend.

4/21/14

Turns out ARENA's Norman Quijano nearly won the El Salvador election by cutting deals with the worst street gangs in The Americas

On March 9th, LatAm political watchers of all stripes were surprised to see just how close Norman Quijano of the ARENA got to beating Salvador Sánchez Cerén of FMLN in El Salvador's second round run-off vote for President. Over 10 points down on Sánchez Cerén in round one, Quijano got to within a waferthin 0.22% of winning the whole caboodle in what would have been an almighty shock result. It was so close that Quijano refused to acknowledge defeat, accused FMLN of fraud at the polls and wouldn't climb down until the Supreme Court in the country had handed down a judgement.

Well, thanks to this excellent report from El Salvador's El Faro, we learn that Norman Quijano got that close because he decided to enter into secret deals with the notorious (and that's putting it mildly) street gangs of El Salvador, such as the Mara Salvatrucha and Barrio 18 (learn just how nasty those groups are on those EngLang wiki links, but rest assured these are very nasty people indeed). 

It's a long and fascinating piece of investigative work published by El Faro so a few words here does it little justice, but to try to get it all into a nutshell after the round one defeat the ARENA candidate agreed to soften its hardline policy with the gangs and offer them an active role in decision-making in the country in return for the gangs' pledges to stop forcing people to vote against ARENA and for FMLN in the run-off. 

You really need to read the whole thing, but the bottom line is that we came THAT close to getting a hard right wing President in El Salvador who would have given a whole heap of leeway to gangs heavily involved with drug running, murder, human trafficking, extorsion, prostitution, child prostitution and several other branches of organized crime to boot. And yes, of course Quijano was the USA right wing's preferred candidate while accusing the leftist FMLN of exactly the type of things that are now being uncovered about their champion. What else would you expect?