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12/31/12

Ten IKN random predictions for 2013

Following on from our scraped-a-win-but-not-great bunch of predictions for 2012, it's time to gaze into the crystal ball for 2013 and forecast ten occurances for the year to come in LatAm and/or mining related issues. By the way, we eschew the easy ones (e.g. Correa to win the Ecuador election) because we have to give ourselves at least a chance of getting them wrong. We also avoid any BS attempts to predict natural occurances (earthquakes etc) because that's just hocus-pocus. Here we go:

1) Michelle Bachelet to win the November 2013 Chile election (with run-off vote if necessary Dec'13). Right now we don't even know whether she's running and she'll be up against opposition both from in the Concertacion, from the semi-rebel centre and from the right, (eg let's start with Golborne, Ominami, Allamand, Velasco). But even at this early stage we're going for 'Chelle, one of the most successful and popular Presidents in Chile's history.

2) Nicolás Maduro to be President of Venezuela on December 31st 2013, and by the way, this post was drafted on Saturday morning (Dec 29th) before all the Chávez relapse stuff hit the wires last night. The most likely scenario is an election during 2013 and Maduro is given a mandate, but we'll see how it unfolds as there are a mountain of potential variables.

3) Gold will break U$1,800/oz which is the same as last year's call, so we'll add that gold will trade between U$1,600 and U$1,900 per ounce during the year and an average of U$1,730/oz for the year, just to add a bit of spice.

4) Junior mining companies will outperform silver bullion, as measured by the junior ETF ticker GDXJ versus the silver bullion ETF ticker SLV. That's a pretty specific and quantifiable forecast and as SLV has beaten out GDXJ by about 27% so far this year (with one trading day left to run) it's also one that bucks the trend set in the last 12 months.

5) Copper spot price to average U$3.50/lb, with the potential to spike over $4 and under $3 always there but overall, a flattish sort of 2013 and prices remaining calm.

6) The Colombian government's peace talks with the FARC will collapse, with the key event the FARC withdrawing its unilateral cease fire pledge and attacking the country infrastructure and military once again.

7) Mexico's new government will introduce a mining royalty, with a best guess of it being 3% to 5% levy on mine gate produce. I'd expect the royalty to be passed in Congress and on the books by December 31st 2013.

8) Local community opposition to mining projects in Latin America will increase and roll on from the upsurge seen in the last year or two. One country that will feel the anti-mining spotlight more than most is Guatemala. Admittedly it's difficult to quantify this prediction and it'll have to be more about general atmosphere towards mining companies and projects as 2013 runs forward than anything number based.

9) Gregorio Santos, regional governor of Cajamarca region Peru, will face arrest under corruption charges and with his removal, the Conga project will be seen as more likely to move forward (though official re-activation of the project won't happen until 2014).

10) Argentina, Ecuador, Colombia and Uruguay will qualify for the Brazil 2014 World Cup finals, with Chile getting through via the 5th place play-off.

So that's our ten for the laurels this year and as is our wont, expect a review of the calls very late December  2013 as we point a smelly finger and say har-de-har what a dumbass I was over them all.

12/30/12

The IKN Weekly, out now


IKN191 went out to subscribers a while ago. An abridged version this week, with just one main feature.


Hugo Chávez is unwell

Veep Maduro addressed Venezuela a few moments ago and told the country that Chávez is now in a "delicate" state and has suffered "new complications".

All you can eat on this story at this Google news link, which will get about three zillion new reports as the evening wears on to be sure.

UPDATE: Here's a youtube of VP Maduro's address to the nation:


So you know

12/29/12

The IKN 2012 predictions: So how did we do?

Waaaaay back on January 1st 2012 your humble scribe posted this missive which had ten predictions based around mining issues and politics in The Americas. Here we are at the end of 2012 and it's time to laugh heartily at the pathetic forecasts and see how things panned out in reality. I'm going to give myself two points for a definite win, one point for a Curate's Egg (good in parts) and zero for any abject failure. Here we go, with the original prediction on the bullet point and the result under each one. At the end we tot up our score.


  • Gold will make it back up to U$1,800/oz during the year. I continue to prefer gold to silver, by the way. No real call to make on Ag.
PARTIALLY CORRECT, ONE POINT. In fact both calls were close, but in the end gold just failed to make $1,800/oz on a couple of occasions (Feb and Oct) so that's a fail. However, gold (+3% ytd) just beat silver (+1% ytd) so that's in the win column. 


  • Copper has a weak-ish first quarter and picks up as the year goes on, with $4/lb seen again.
INCORRECT, ZERO POINTS. In fact copper saw its best prices in the first quarter and weakened through the year, while it never re-took $4/lb. 

  • Junior mining companies have a much better year than 2011
INCORRECT, ZERO POINTS. Guilty of wishful thinking I suspect, as 2012 will go down as one of the poorest for the juniors sector on record.

  • The USA recovers economic momentum as the Presidential vote nears and Obama gets the re-election.
CORRECT, TWO POINTS. We know Barack won, we also know that economic indicators are now looking up for The USA.


  • Peru's government uses police/army force to quash anti-mining protests and push through projects. The Yanacocha Minas Conga project is approved. Humala ends the year with no more than a 30% approval rating. Peru's mining industry carries on regardless.
INCORRECT, ZERO POINTS. If I were feeling generous to myself I'd give a point for the police/army quashing part, but I'm not. The main parts of this are wrong, with Conga still suspended and Humala posting 48% to 50% approval right now. The mistake made with Conga was originally to have underestimated the local support for Gregorio Santos's position. Come February/March I'd seen the error of my ways and was calling the situation more accurately, but that was too late for this erroneous call.


  • Chávez wins the Venezuela election and loses weight, too. His win is due to 1) promises to his faithful and 2) the mediocrity of opposition.
CORRECT, TWO POINTS. Despite the sidebar thing of weight loss (up for debate) the rest of this was accurate so I'll take the points.


  • AMLO wins the Mexico election and upsets PRI ambitions.
INCORRECT, ZERO POINTS. This was always going to be an outsider call, something I knew at the time, too. In end end AMLO didn't get near EPN, who used the PRI apparatus to take the presidency handily.


  • Brazil's economy has a fairly weak though overall positive GDP growth year, with public sector stimulus and its decent internal economy making the difference.
CORRECT, TWO POINTS. This one has turned out to be remarkably accurate in fact (even if I do say so for myself). Brazil's GDP number is now weaker than most people expected and Dilma has turned to public stimulus measures right on cue to bolster late 2012 and 2013 expectations.


  • Colombia's mining industry has a good year, with % growth and more investment dollars received. Santos remains popular.
PARTIALLY CORRECT, ONE POINT. Santos still polls over 50% popularity though has faded somewhat. Colombia's mining industry is still stuck in a regulatory funk and awaits its mining law reform, but the sector has received record FDI this year. Overall, worth half marks.


  • Evo Morales has a better year and his approval rating gets back over 50%.
CORRECT, TWO POINTS. The latest polls have Evo at 55% approval, so despite having significant social protests during the year he's come out the other end with better numbers than late 2011. 



GRAND TOTAL, 10/20. It's a scrape-through pass mark but nothing to shout and cheer about, that's for sure. Basically it's monkey with a dartboard stuff. In a couple of days time I'll come up with ten random calls for the year to come, so hopefully my soothsaying powers improve on this year's mediocrity.

Bananama Republic is back

Indeed we are glad to inform readers that Bananama Republic, Panama's finest news service by a considerable distance, has returned from a two month pause. Go visit the front page here but make a particular effort to read today's dispatch which gives more details on the President Martinelli insider trading scandal that we mentioned at this humble corner of cyberspace yesterday.

Great to see Okke back, visit him early and often.

12/28/12

The Friday OT: Molotov; Hit Me

Leading out the year:



Viva Mexico Cabrones

Venezuela GDP grows by 5.5% in 2012

The Venezuela Central Bank (aka BCV) announced the 2012 GDP estimated growth figures today, Venezuela Analysis (aka V-Anal) picked up on the story for EngLang readers and here's how the 5.5% growth stacks up against the previous four years (pre/post LehmanSubprime), according to World Bank figures:


One of those things that tends to get missed in the rush when considering Venezuela 2012 is that the country's doing much better, that "it's the economy stupid" works for all types of countries and that Chávez's re-election wouldn't have been anywhere near as easy, or even in doubt, had the back pockets of rank and file Venezuelans not been improving. 

FP's Peter Koven on the Liberty Silver (LSL.to) Bobby G insider trades story

The Financial Post story is right here, Peter Koven goes into some of the more interesting aspects of the long list of trades and he's been kind enough to link this humble corner of cyberspace's previous post too, which is good of him (though I'd mention that the first to notice the trades was not I but was a commenter who left a message on the Southridge Enterprises post yesterday evening).

Liberty Silver (LSL.to): Bobby Genovese's inside trades

Link here. Screenshot here:


click to enlarge.

They were all dumped on SEDI last night. This bit is fun, what happened in September only:




UPDATE; ok, so I'm already getting complaints that the big screenshot isn't very visible. Therefore here's a link to view a PDF downloaded directly from SEDI which has all Genovese's trades in Liberty Silver (LSL.to) during 2011 and 2012. What a scumbag he is and let's not forget how much of a scumbag is paid pumper James West is too because the moment West pumped, Bobby G dumped bigtime. 

12/27/12

This Thing Isn't Like That Thing, Southridge Enterprises (SRGE) (SRGE.pk) edition

You get used to BS and scam-type NRs from US OTC companies, but lesser spotted NRs contain outright, direct and easily discovered fraudulent lies. Big fat whoppers, in fact. Here's an NR from Southridge Enterprises (SRGE) (SRGE.pk), dated December 13th and here's an extract:
DALLAS, Dec. 13, 2012 /PRNewswire/ -- Southridge Enterprises Inc. (SRGE) ("Southridge" or the "Company") is please to announce that it has signed a Confidentiality Agreement (CA) with a major NYSE listed gold mining company regarding both the Cinco Minas and Gran Cabrera properties. Due to terms contained within the CA, the Company is unable to announce either details of the CA or the parties involved.
Now here's another from SRGE dated December 26th and here's an extract or two:
DALLAS, Dec. 26, 2012 /PRNewswire/ -- Southridge Enterprises Inc. (SRGE) ("Southridge" or the "Company") is excited to announce a new Joint Partner, Kinross (KGC), a Major listed Mining Company for its Cinco Minas and Gran Cabrera properties. Southridge's joint partnership with Kinross, a major NYSE listed gold mining company, is valued at roughly $550,000,000 to $600,000,000. Due to numerous shareholder inquiries Southridge and its Board of Directors felt the need to update the market on its recent announcement named, "Southridge Announces Signed Agreement with Major NYSE Listed Mining Company on Cinco Minas and Gran Cabrera Gold & Silver Mines in Mexico." 
Mr. Martin Moscosa, Exploration Manager at Kinross Gold Corporation stated, "We have made great and good progress regarding Cinco Minas property. Southridge controls the best area at the Gran Cabrera and there will no problem regarding the influence area, also, because in case everything will be growing, possible adjacent claims could be incorporated or added to the project."

Now here's one from Kinross (K.to) (KGC) tonight:
TORONTO, ONTARIO--(Marketwire - Dec 27, 2012) - Kinross Gold Corporation (TSX:K)(KGC) would like to clarify a news release issued by Southridge Enterprises Inc. ("Southridge") on December 26th, 2012 announcing a joint partnership between itself and Kinross relating to the Cinco Minas and Gran Cabrera properties in Mexico. The news release contained a number of statements regarding the value and status of the joint venture, and a quote from a Kinross employee. 
Kinross wishes to make clear that there is no such joint partnership, joint venture or other similar such arrangement or agreement in place, and nor do we expect there to be such a joint partnership, agreement, acquisition, investment or other equivalent transaction involving Kinross and Southridge in the foreseeable future. The statements regarding the value and status of the joint partnership are, to the best of Kinross'' knowledge, without any basis in fact. The statement attributed to the Kinross employee in the Southridge news release was incorrectly attributed to him. 

Spot the slight difference? And just for a moment back there, SRGE was a 1.5c stock

But it's back to half a cent already, after burning through 419m volume yesterday and another 130m volume today. 

First Quantum (FM.to), Inmet (IMN.to), Petaquilla (PTQ.to), Panama, President Ricardo Martinelli and Mayte Pellegrini

The stakes are high in the First Quantum (FM.to) hostile bid for Inmet (IMN.to), owners of the Cobre Panama project in the eponymous country. There are a lot of sellside bullshitters screaming about the massive arb gains to be made when FM.to sweetens the bid to $79 or $80 or whatever other number the anal ysts are extracting from their collective hind quarter orifices too, so it's probably wise for those who care to hightail it over to Panama's "La Prensa" newspaper and read the half dozen or so (to date, more almost certain to come) reports on the scandal story that medium is currently breaking. According to the sworn statements of Mayte Pellegrini, an ex-employee of a Panama brokerage named Financial Pacific (FP) that's under investigation for shady practices by Panama's equivalent of the SEC, FP had a secret account fund named "High Spirit" which was used for the purposes of insider trading and stock price manipulation in several public traded companies. The only company specifically named as a target for treatment by High Spirit is Petaquilla Minerals (PTQ.to), the gold mining company headed up by Richard Fifer*. 

But the most interesting bit is that High Spirit, according to Pellegrini's sworn testimony, is owned and run by one Ricardo Martinelli, who just happens to be the President of Panama.

That kind of puts a different light on the failed bid by Inmet to buy out PTQ.to earlier this year, doesn't it? You have to kind of wonder whether FM.to has any idea of what type of political and financial snafu it's attempting to buy into here in Panama. Anyway, if you're thinking that the FM.to sweetener is some kind of slam-dunk, IKN strongly suggests that you get over to that Prensa link above and get wise on what's going down in Panama. What, you got trouble with Spanish? Oh deary me, you're at a bit of disadvantage then. 

 My thanks to reader JG for the headsup.



*see IKN posts passim for news and views on that company and its boss, including his history and convictions for cocaine and marijuana dealing

Junior mining company red flag alert

It goes like this:

1) Read the 2012 end year president's/CEO's letter to shareholders
2) If the missive contains the phrase "2012 has been a challenging year", sell all your shares
3) The end.

Tahoe Resources (THO.to) (TAHO): San Rafael, The loss of a harvest

A most interesting 10 minute video that goes a long way in explaining just why residents and the community around the Tahoe Resources (THO.to) (TAHO) Escobal silver mine in San Rafael, Guatemala, are so vehemently opposed to the arrival of the company.


On hearing the complaints of local agricultors and the negative effects that the new arrival has had on the town, you have to wonder what kind of environmental impact study THO did and whether the effects of the arrival of the mine were ever explained to the population, or even the national government of Guatemala, before permits were approved and the development began. 

Along with the loss of harvests, the way in which markets for the San Rafael agro produce is rejected by its traditional customers because "it comes from where the mine is and we don't want to buy that" and obviously awful community relations standards of the company that doesn't even want to sit down and hear what the farmers have to say, let alone provide reasonable financial recompense, one of the most interesting parts was the mention of how the vast majority of locals resent THO's presence but are scared of speaking out, because if Person X does, the son or daughter or cousin or nephew now employed at the mine will suddenly and coincidentally get laid off.

By watching this Spanish language video, you ge to understand that those opposing THO at Escobal aren't just a bunch of anti-progress anti-everythings, but real people who have seen their lives changed beyond recognition by the arrival of a mining project sitting "a block and a half" from the town (you'll see how close it is on the video, even if you don't get the language used). You'll also get an idea of just why Canadian mining companies are gaining their rotten reputation in Latin America.

12/26/12

Peru: GDP vs Electricity demand

Now isn't that pretty?


Data from MEM and BCRP.

12/24/12

Copper Fox (CUU.v) is the most fun possible with your clothes still on

The hastily convened ConfCall was a total hoot built for suckers and the trading...



...is going very much along the lines predicted in IKN190, out last night. Here's an excerpt from that script:

"...it’s fairly likely that CUU will not dump to its real intrinsic value, because we need to recall that over 50% of shares are in the hands of one person, Ernesto Echavarría, who will be keen on protecting his asset value. Also, as reader, market professional and mailpal ‘AM’ rightly pointed out (excerpted)...
 
“If only there was an easy way to short stocks like this without having to cover your position if it trades under $1. It is a failure of our capital markets that this could trade at a $425M market cap with so many people aware of its absurd valuation.”
 
This is true. Once CUU goes under $1 selling pressure will automatically drop and although I want to be crystal clear about the lack of real value behind these overinflated shares and wouldn’t recommend that anyone held or even tried to trade this stock, not next week and not ever, if I had to guess I’d say that CUU will drop hard when trading resumes next week, but it will find support and won’t be a direct road to hell."


So I'd just like to thank Elmer for making Christmas 2012 an entertaining affair.

Dundee

O RLY?

So, fall or pushed?

12/23/12

The IKN Weekly, out now


IKN190 has just been sent to subscribers. Now bring us some figgy pudding.

12/22/12

Five days of metals and miners; December 22nd

Our regular Saturday slot of the last five days' worth of action in the gold bullion ETF (GLD), the silver bullion  ETF (SLV), the miner ETF (GDX), the junior miner ETF (GDXJ) and the copper ETF (COPX).


Splat. Hope there weren't too many of Eric Sprott's loyal silverbug flock on margin.

12/21/12

Copper Fox (CUU.v)

NR here. Sooo, waddya get for $3.25Bn in initial capex plus $1.24 in sustaining capex these days?


Oh, not so much.

UPDATE: I've been asked for clarification on what "oh, not so much" means. It means "short CUU.v if you can". It means "a market cap that's 80% of an pre-tax NPV in this market that uses $3.25/lb Cu as a base case, you gotta be joking". It means "Mr Echavarría is going to find out what reverting to the median really means." That clear enough for you? Sheesh...

The Friday OT: Robert Earl Keen; Merry Christmas from the family

Here we are again and as per annual tradition IKN offers up the world's best ever Christmas song.



Merry Christmas to you all.

Breaking: Antofagasta (ANTO.L) suspends development of its Antucoya project

Antofagasta (ANTO.L) has decided to suspend development of its 70% owned Antucoya project, according to reports out just minutes ago in Chile.

UPDATE: Here's a quote (translated) from company head cheese, Diego Hernandez:

"We continue to be worried about rising capital costs and operting costs in the industry. We believe that the  decision to temporarily suspend Antucoya and revise the project reflects the necessary and realistic focus to face this situation.
"Notwithstanding this decision, we remain committed to our strategy of organic growth  in our current operations and we continue our search to identify and invest in new opportunities, both in Chile and abroad."

PS: For those versed in the tongue of Cervantes, plenty of reports now showing up here 

Brazil adds to its gold reserves again

An interesting report over at Mining dot com today which you can read by clicking this link, but here's a chart derived from the report data.


In simple terms Brazil's gold reserves don't budge for years and now suddenly, in the space of the last three or four months, they double. Read more on that link above.

PS: One metric tonne has 32,150.75 troy ounces, so at today's more-or-less U$1,650/ozt for gold, one tonne is worth U$53.05m. Which means Brazil's total gold reserve is worth U$3.565Bn. Which means it's a touch under 5% 1% (ty for the correction anon commenter: Brazil total reserves stand at 378.55Bn) of total country reserves so minor stuff in absolute terms, but the trend is the interesting thing here. Trends are friends, y'see.

Pan American Silver (PAA.to) (PAAS) bails on the Navidad project, Chubut Argentina

This translated from this report, but there are other doing the rounds too:
Mining company Argenta, that is looking to operate the silver/lead deposit 'Navidad', will close its offices in Puerto Madryn and Trelew after the suspension of the law bill that would allow large-scale mining [in Chubut] sponsored by Governor Martín Buzzi, after facing overwhelming and massive rejection from residents in all parts of Chubut province.

....

A source close to the company said on Thursday stated unofficially that in the next few days Argenta, subsidiary of the multinational Pan American Silver, will close its administrative office in Puerto Madryn and in a few weeks do the same with its offices in the city of Trelew. Continues here

PAAS made it clear a couple of months ago that it was suspending activities, this will make the pull-out official. Watch for the announcement from the company soon enough. 


Another vote on Argentine mining, duly cast.

UPDATE: Yes indeed my mailing-in friends, the question is all about writedowns and impairments now, isn't it? As PAAS paid a Reuters reported $626m for Aquiline (oh well played mister henderson) back in 2009 and has a carrying value of $560m on the property according to its latest filing (3q12 financials) that's quite a fair chunk of the company's $3.4Bn in total assets, is it not?. Is this going to be a balance sheet special Christmas present for the YE numbers? Time will tell.

Meanwhile, rather than rely on sourced hearsay from Chubut and pathetic gossip-mongering blogs like this humble corner of cyberspace, somebody really ought to get in touch with the company and get some official comment on this. At least I think so.

Juniors that deliver

An interesting report from BMO today, which covers quite a few names in the junior PM producer space (ty reader L for the fwd). Instead of noting specific recos of the companies however, this simple table caught my eye.

Here's how author Brian Quast did the calculations:


And yeah, it may be rough but I think Quast is 1) spot on with his assessments and 2) right to start a type of league table of management credibility. Somebody has to make these jokers realize that they're accountable for the bullshit spin that's unceasingly foisted upon this end of the deal. Also, good to see that the benchmark is initial guidance for production, not the adjusted guidances that turn up in the 3q12 MD&A which then  allow the BSsers to say "oh look, we met guidance" at the end of 4q12, one of the most tiresome pieces of twofaced lying that we get to witness from the serial sophists. Good call, Quast.

Stillwater (SWC) and Lumina (LCC.v)

This is my favourite grumpy shareholder letter of the season so far (and there have been quite a few), sent by some dudes known as The Clinton Group (no relation to slick Willie, as far as I know) to Stillwater Mining (SWC), the company that ticked off the top of the copper market by buying Peregrine and its Altar property in Argentina, the point at which SWC caved and just kept on caving. The letter is long and deserves all your attention so go have a read, but here's just one extract:
"We are hard pressed to imagine that Stillwater shareholders were desirous of exposure to undeveloped Andean land, Argentinian monetary and natural resource policy or, for that matter, to copper prices. And, any such shareholder could have simply bought Peregrine stock in the public market, and done so for one-third the price that Stillwater paid. "

All those sellside anal ysts insisting that Taca Taca (LCC.v) will sell for upwards of half a billion dollars should read that more than once. And then go read the whole letter. That goes for McEwen Mining (MUX) at Los Azules too, though they just want to punt that out and get on with PM mining. 

12/20/12

Bolivia's cocaine

If you read just one report on Bolivia and cocaine, make it this one. Masses of data, careful analysis, consideration of what Bolivia is doing to combat illegal coca production, comparatives to what's happening in the other cocaine producing nations, more data, smart synthesis. Top top work from Kathryn Ledebur of the Andean Information Network and a must-read for anyone interested in the subject matter, as simple as that.

Gotta love Scotia

Here's how Scotia kicks off its piece about Rio Alto (RIO.to) in their Scotia Daily Mining Scoop morning mailer today:
"No farting around .. one of our favourite junior gold company's still remains Rio Alto"

A good sense of humour never fails to win hearts and minds, Scotia's rivals should think on that. Well played JA and all at The Scoop.

Mining PRs and the Ottotrans™, part 67




Life is beautiful, roses are red, violets are blue, our example is Prophecy Platinum (NKL.v), our NR dates from mere minutes ago.

This is what they wrote:


VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 20, 2012) - Prophecy Platinum Corp. (TSX VENTURE:NKL)(PNIKF) ("Prophecy" or the "Company") announces that it has received inquiries from the British Columbia Securities Commission (the"BCSC") with respect to the events leading up to the Company's news release of July 14, 2011 (the "News Release"), which disclosed the findings of an independent mineral resource estimate (the "Resource Estimate") for its Wellgreen PGM-Ni-Cu property in the Yukon Territory. Specifically, the BCSC has made inquiries relating to: (i) the chronology of events which preceded the News Release; (ii) the Company's insider trading policies and procedures in place during the relevant period; (iii) the individuals who had knowledge or awareness of the Resource Estimate prior to the issuance of the News Release; and (iv) communications relating to the Resource Estimate made or received by individuals who were directors, officers or employees of the Company between June 1, 2011 and July 15, 2011.In keeping with Canadian principles of good corporate governance, the Company's Board of Directors (the "Board") has formed a special committee of independent directors, comprised of Wesley Hall (as Chair) and Mike Sylvestre, to assess and make recommendations to the Board regarding the BCSC's inquiries. The Company is cooperating with the BCSC and a response has been provided to its specific requests for information. As of today's date, no further request for information has been received by the Company.The Company notes that its current management team, including its President and Chief Executive Officer, Greg Johnson, Chief Financial Officer, Jeffrey Mason, Senior Vice-President and Chief Operating Officer, John Sagman, Vice-President, Corporate Development, Robert Bruggeman and Corporate Secretary and Counsel, Samir Patel, were each appointed after August 2012, and, therefore, well after the relevant period for the purposes of the BCSC's inquiries. Similarly, five out of seven of the directors of the Company - namely, Harald Batista, Wesley Hall, Greg Johnson, Myron Manternach and Mike Sylvestre - were first appointed to the Board in 2012, and, therefore, well after the relevant period for the purposes of the BCSC's inquiries.Over the last few months, the Company has taken, and will continue to take, measures to reinforce its procedures and strengthen internal controls and processes in order to achieve its goal of implementing industry best practices for corporate governance. The Company does not expect that the BCSC's inquiries will interfere with its day-to-day exploration and development operations to advance its PGM-Ni-Cu properties in North America.Forward-Looking Statements: All statements in this news release, other than statements of historical fact, including, without limitation, statements relating to the Company's day-to-day exploration and development operations, are forward-looking statements that involve various risks and uncertainties. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements.


And this is what it means:

John Lee is a twat. The end.



Seriously. Trading in and out of your own freakin' stock when this kind of move is on is done by twats and twats alone. Company chairs that publically boast of their love for the game of blackjack is done by twats and twats alone. What about trading around your August 20th NR? Twat. And those with a memory will recall that the whole thing ended with a BCSC forced retraction of data on September 20th. Twat squared.

Sidebar: Why is Greg Johnson always involved with companies that are doing weird things? You'd think that....nah, fuggedit

12/19/12

Shock! Even-handed reporting of Venezuelan politics spotted at English language news service!

Jim Wyss of McClatchy/Miami Herald gets it, while few others do. Here's the note, here's an extract:
Two months after losing the presidency to Hugo Chávez, Venezuela’s newly united opposition was hoping that regional elections would prove that it could still put up a fight.
Instead, the red tide of Chavismo swept away all but three opposition governors Sunday and showed that it could pack a punch even when its ailing leader was not actively campaigning.
Read more here: http://blogs.mcclatchydc.com/southamerica/2012/12/venezuela-vote-shows-the-power-of-chavismo-without-chavez.html#storylink=cpy

To add my own dos centavitos, imho Sunday's election has significantly raised the chances of there being an announcement that Chávez is not in conditions to assume his re-election on January 10th, a snap Presidential election being called and a solid mandate offered to Nicolás Maduro.

So I'm looking at this table...

...published by Scotia today as part of its justification for a new reco and $9 price target on Primero Mining (P.to) (PPP) and thinking...

The pretty violet shading is Scotia's. The red bits are your humble scribe's

...that on these numbers, Scotia shouldn't be farting around with Primero and should be banging on the table with something really large and metallic that makes a lot of sound about Rio Alto (RIO.to). Not my numbers, their numbers. Just goes to show what brokerages will do when equity placement commissions are in the offing. And what they won't do when they aren't.

Ecuador Presidential Election voter intention update

Pollster 'Perfiles de Opinión' is out with its voter intention poll for the 2013 Presidential election in Ecuador this week (one of five officially sanctioned polling companies in Ecuador) and here's how things look according to that house, with the poll taken up to and including December 14th:


What part of "Rafa wins" do you not understand? Data from here

Charts of the day are...

...gold, dialies and monthlies.

Because lower lows aren't so good. Mind you...

c...if you look very very closely, you may be able to see a trend.

Gotta love TA, something for everyone. Why argue with an empirical science that is never wrong, eh?

12/18/12

Understanding Spain's job growth prospects

This was found on Twitter right here. Your author adds the translations and notes on the right, now it's all yours:


Shock horror development, sitting government found to be potentially lying to its citizens.

How the Earth Was Made, Americas Gold

Reader M alerted your humble scribe to the existence of this video yesterday morning, I got round to watching it last night and now it's here, fully recommended stuff.


A 44 minute documentary that's worth the time of anyone who's interested in knowing how economic metals deposits are formed, not just the ones from California and Nevada featured. 

12/17/12

Peru: A paper on Shougang Iron provides country FDI insight (from IKN189

This paper, featured in IKN189 yesterday in the way seen below, deserves more eyeballs so it's here's on the open blog today, too. My thanks to reader CS for the headsup and here's the link you need to get your copy of the paper (or alternatively, this link).



Peru: A paper on Shougang Iron provides country FDI insight
Your author offers this link (16) (or this one to reach abstract-plus-link page (17)) to a 27 page paper entitled “Chinese Investment in Peru: A Comparative Analysis” dated December 2012 and written by Amos Irwin and Kevin P. Gallagher and published by The Working Group on Development and Environment in the Americas (thanks to reader ‘CS’ for the forward).



The main part of the investigation centres on examining whether Shougang deserves its poor reputation with its workers, local community and general public opinion in Peru and the empiricals are tested by comparing Shougang to three other large mining concerns in the country, namely Antamina, Yanacocha and Doe Run. With the investigation work done conclusions are reached and then the argument is expanded to consider other aspects of the mining industry in Peru. Below is one segment that probably most directly relates to The IKN Weekly audience, but you are strongly recommended to download and read the whole paper if the subject of political risk, community or worker relations in Peru mining is of interest to you as it’s a very good and informative report. Here’s the chosen extract.

Shougang’s Lessons for Peruvian Mining FDI
There may not be any clear lessons from Shougang that apply only to Chinese companies, but there are certainly lessons that apply to Peru’s mining FDI in general. First, the improving regulatory framework has helped to keep companies honest. Kotschwar et al. conclude that the progress of the national regulatory framework has forced companies to improve their social and environmental impact. (Kotschwar, Moran et al. 2011) Many commented on the regulatory system’s positive impact on Shougang. An NGO leader maintained that today, “new legislation and better regulation have forced the company to make adjustments to survive.” (NGO Official 2011)

Second, while the Peruvian regulatory framework has improved greatly since the 1990s, two salient labor issues are subcontractors and government resolution of union negotiations. Since MINEM and MTPE have not agreed on the appropriate use of subcontractors, their conflict leaves unions, mining communities and NGOs outraged at the widespread outsourcing of what used to be decently-paid company jobs. Second, MTPE, which is supposed to be the ultimate mediator in union-company disputes, is not an effective mediator because locals see it as being in league with the companies. In Shougang’s case, the unions point out that regional office of MTPE ignores the union’s list of demands and simply forces the company to give a slightly higher raise and onetime bonus. (Shougang Union Delegation 2011)

Finally, the underlying problem facing all mining companies in Peru is the population’s lack of confidence in the government ministries that regulate these companies. Unlike workers, nearby communities often have no stake in the mining operations. When they feel that a company is damaging the environment, they attempt to shut down its operations. These communities do not trust the environmental impact evaluations, third party audits, or other inspections that private consulting firms prepare for MINEM. At the same time, local government and community officials have no means of challenging problematic mining operations. The government must give these communities a potent legal channel through which they can air their grievances. While community accountability will result in the end of some mining concessions, it is necessary to provide this avenue inside the system rather than forcing citizens to take matters into their  own hands



High Desert Gold (HDG.v) drills

Though unmentioned for a while, we still strongly recommend that metalheads make use of the Brent Cook/Corebox Drill Interval Calculator, as it's a useful tool to really get a handle on what your preferred mining company has drilled from its project. Let's take for example High Desert Gold (HDG.v) and its NR from this morning that is entitled "High Desert Gold Continues to Achieve Strong Drilling Results from the Gold Springs Project, Including 7.6 Metres @ 6.7 gpt Gold Equivalent Within 59.4 Metres @ 1.3 gpt Gold Eq".

Once you plug those headline numbers in (and btw, it's 1.29 g/t not 1.3) this is what you get from the handy dandy calc machine:

In other words, HDG.v has 7.6m of 6.7 g/t AuEq which is reasonably interesting, then around that rock it has 51.8m of 0.496 g/t AuEq which is...

Tell it like it is.

Chart of the day is...

...one that tracks the results of the Venezuela regional elections of yesterday:


Main opposition rallying point Henrique Capriles is catching plenty of media time as he managed to win the Miranda state election and is now governor. However, the fact remains that yesterday was a good day for Chávez and his PSUV party, as pro-Chávez players now control 20 of Venezuela's 23 regional governments, four more than this time last week. 

12/16/12

The IKN Weekly, out now


IKN189 has just been sent to subscribers, another steaming pile of fetid animal excrement worthy of nothing more than a firebomb stuffed firmly down its baggy jeans and set on a short fuse. Nice charts, though. Hope you enjoy it

Well blow me down, Orko Silver (OK.v) has found a buyer

Here's the NR that announces the friendly all-paper deal with First Majestic (FR.to) (AG), here's the first bit:

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec 16, 2012) - First Majestic Silver Corp. ("First Majestic") (FR.TO)(AG)(FMV.F) and Orko Silver Corp. ("Orko") (TSX VENTURE:OK)(OKOFF)(OG3.F) are pleased to announce that the companies have entered into a definitive agreement (the "Arrangement Agreement") pursuant to which First Majestic has agreed to acquire all of the issued and outstanding common shares of Orko for consideration of 0.1202 of a common share of First Majestic (the "Exchange Ratio") plus $0.0001 in cash per Orko common share. The offer implies a value of C$2.72 per Orko share based on the closing prices of both First Majestic and Orko''s common shares on the Toronto Stock Exchange ("TSX") and TSX Venture Exchange, respectively, on December 14, 2012. The offer represents a premium of approximately 69% to Orko''s 30-day volume-weighted average price ("VWAP") for the period ending December 14, 2012. The transaction will be implemented by way of a plan of arrangement (the "Arrangement") under the Business Corporations Act (British Columbia) continues here

OK.v is not one I've ever loved, which proves how wrong I often am. Though I can't blame First Majestic for wanting to exercise the strength of its paper right now

First Quantum (FM.to) moves for Inmet (IMN.to)

Did you see the PPS action in IMN.to on Friday? Yeah me too, so what shall we call this one, a "soft hostile bid"? Whatever the label, it's not one that's come out of the blue. Here's the link to the whole thing to peruse at thy leisure, here are the highlights (according to FM.to at least) and the CEO blahblah top paragraph:


Highlights
Financial
  • Inmet Shareholders to receive consideration of C$72.00(1) per Inmet share, with the opportunity to elect First Quantum shares, cash, or a combination thereof, subject to an overall consideration mix of approximately 50% in First Quantum shares and 50% in cash; allowing the opportunity to realize immediate value and/or participate in substantial future growth of the combined company
  • Offer values Inmet at approximately C$5.1 billion(1) and represents a premium of 65% to Inmet''s underlying net cash adjusted equity value(2) as of 23 November 2012
Strategic
  • Potential to create the world''s premier, widely-held base metals company, and one of the world''s five largest copper producers with a leading growth profile
  • First Quantum''s demonstrated project execution, reflecting its in-house engineering, project management and construction expertise, gives it the confidence that it can bring significant benefits to Inmet''s major project, Cobre Panama, for the benefit of all shareholders in the enlarged group
Commenting on the Offer, Philip Pascall, CEO and Chairman of First Quantum, said:
"We believe strongly in the prospects of a combination for our two companies, which are uniquely complementary. The enlarged group will draw on the best physical and human resources of both First Quantum and Inmet, to create a premier, widely-held base metals company with leading growth in copper production and cash flow generation. We know that this vision is shared by key shareholders of Inmet.
We invite the Board and management of Inmet to work with us in developing our plans for the future and in assisting in an assessment of whether additional benefits can be identified to the advantage of all shareholders."


Peru Presidential Approval: Ollanta getting his mojo back

Peru's benchmark pollster Ipsos/Apoyo has its monthly approval rating snapshot out today and here's how things look:


Ollanta Humala is back up to 48% approval after dipping below 40 a few months ago (his wife Nadine scored 54% this time). The interesting bit is this:

Ollanta is seeing a return of approval from the Cs, Ds and Es. 

12/15/12

Five days of metals and miners; December 15th

Our regular Saturday slot of the last five days' worth of action in the gold bullion ETF (GLD), the silver bullion  ETF (SLV), the miner ETF (GDX), the junior miner ETF (GDXJ) and the copper ETF (COPX).


The miners beat the metals, with wooden spoon for silverand big gold star for COPX. Gold dropped a point, juniors edged their larger cousins, Wednesday was better than Thursday. That's the Fed for you.

12/14/12

dead people

At one o'clock this afternoon I was picking up two young daughters, aged six and eight, from their final day at school for the year and celebrating their success in year-end exams, as well as the start of the long Southern hemisphere summer vacation period that runs from now until March. Their school is a happy place, well-run and with a strong academic reputation (no need to tell me that I'm fortunate, that's something I already know) and while waiting at the gate while the final teachers' speeches went on ten minutes longer than were planned, the way they always tend to do, the weirdest thought flashed through my head. Just for a second I thought about those mass murder gun attacks that have happened sporadically in the USA and wondered if one could ever happen in my country of adoption, my city of dwelling or even in the school I was looking at right then and there.

Of course it couldn't, was the immediate and conclusive answer. But that thought occurred to me while an atrocity was taking place in a town thousands of miles away, unbeknown to me and my blissful ignorance. I have no doubt that my fleeting thought was sheer coincidence and there's not some sort of telepathic/holistic world conscience event behind it all, because sheer coincidences work like that and otherwise you'd have to deny the existence of coincidences, something that to my knowledge only happens in Argentina. 

The United States of America doesn't have the patent and exclusive rights to weirdos, idiots and dangerous minds. There are unstable people in the place where I live, but as in most any place their numbers are a tiny fraction of society as a whole. I'm quite sure that's true for just about every corner of The USA as well, with 99.999% (add some more nines if you wish, not the point) of people being honest, law-abiding and caring people. But what The USA does offer is the opportunity for that tiny minority of unstable and potentially dangerous to get its hands on extremely effective machines of death. I'm not talking about handguns that can murder a single person as quickly as anything else ever invented by man, those machines and devices are available here and in most every country in the world if you're determined enough to own one. This is about the type of weapon that today killed twenty children between the ages of six and ten years old, the same age range as the two people I picked up from school today, in their own school in a matter of seconds and without forgetting the seven (I believe, from latest news report) adults who also died at the hands of a single deranged and insane person.

I do not have a dog in the fight when it comes to the rights of US citizens to carry arms, that one is up to you people to decide and I'm absolutely neutral on the issue. If you want a handgun on your hip, a rifle in your hands, a shotgun to protect your house and your loved ones that's your call and I honestly don't care, not in the practical or in the abstract. But please, for the sake of basic common sense and the need to keep your social fabric from being ripped even further asunder, you have stop the general sale and availability of semiautomatic and automatic weapons to the general public. This isn't party politics, it's not going to make for wholesale redundancies at Glock or Smith & Wesson, nobody will be denied their chance to shoot off rounds at the range or at some ducks this weekend. The bigger, existential questions about "why this happens in modern society" won't get answered either and again, it's not my problem and you guys can (or might) work those big issues out in your own time. The banning of semiautomatic and automatic weapons won't stop murders either and won't stop people like the insane person today from walking into a school and shooting children dead. But there wouldn't be 27 bodies now. No way, not even close.

As a child it was a normal thing to look up to The United States of America. It would be nice if you could regain that mantle so that, in the near future, my daughters of eight and six could feel the same way as I used to feel. Allowing what happened today to happen again because of the easy availability of weapons of mass murder, not just murder, will further tarnish the reputation of the country and be in no doubt whatsoever, until The USA makes a tough choice or two the killings will repeat and just one more episode like today's will mean that the twenty children aged between six and ten years old who were slaughtered today all died in vain.

PS: No comments will be accepted below this post, neither agrees nor disagrees, as I have no interest whatsoever in watching the same ridiculous back-and-forth develop on this blog that is seen in thousands of other places. 

The Friday OT: Paul Simon; Me and Julio down by the schoolyard

I've always been a total sucker for this guitar riff.



Impossible to unlike Paul Simon's 'inscrutable doggerel' and for the record, that special instrument sound is the cuica.

Rio Alto (RIO.to): An Alex Black interview

Nine minutes of Alex Black, head honcho of Rio Alto Mining (RIO.to) talking to a man with a microphone. It's pretty good stuff too, plenty of numberycrumchy info and updates on what the company is doing as well as Black's view on the political risk climate in Peru today, all worth your ear and eyetime. Click here, watch it yourself.

Another junior leaves Ecuador

This one is hardly a surprise, but has just been made formally known. Intrepid Mines (IAU.to) (IAU.ax) has informed the optionee Cornerstone (CGP.v) that it doesn't want the Shyri project any more.
MOUNT PEARL, NEWFOUNDLAND--(Marketwire - Dec 14, 2012) - Cornerstone Capital Resources Inc. ("Cornerstone") (TSX VENTURE:CGP) (GWN.F) (GWN.BE) (CTNXF) today announced that it has received formal notification from Intrepid Mines Limited that it is terminating with immediate effect the Call Option Agreement between Cornerstone and Intrepid dated January 4, 2011 for the Shyri gold/copper property in Ecuador. Cornerstone will review its options concerning Shyri and make a further announcement after that review has concluded. Continues here

So how's that "we want miners in Ecuador" message working out for you, Mister Correa?

Perfect strike timing du jour, Southern Copper (SCCO) edition

News from the copper space last night is that workers at Southern Copper (SCCO), the big Cu player in Peru and Mexico, have decided to strike in demand for better pay. Apparently workers want a 15% pay rise from the company and management have only offered a 5.5% increase.

The strike is planned for December 24th and December 25th. Or in other words they're battling over pay, but can directly influence better conditions all by themselves.

Chart of the day is...

...one that compares the 2012 price action of gold, bia the proxy GLD, to that of four companies that fairly represent high tonnage, low grade, large deposit bulk gold mining projects over the length and breadth of The Americas.


Of the four I prefer Sunward (SWD.to), held the stock for plenty of time as well and even at this juncture think that it has a decent chance of making it as a real mine, thanks to its much lower capex footprint and large deposit size. However I was forced to face portfolio reality by the continued grinding down of this market and sold a number of weeks ago, which has sadly turned out to be the right decision as my sell point is around 20% higher than today's prices. So up to today I've been proven wrong on SWD but it's one that I haven't given up hope on (even though I hold no position today) as although the headline grade is low, the economics it offers make sense...on the back of a ciggypack at least. However, the other three are marginal at best, way overhyped in their time by the BS-merchants at the big brokerages and easy avoids. 

12/13/12

Pacific Rubiales (PRE.to) in the news

Via Setty, an excerpt of this report (translated) regarding labour relations around Pacific Rubiales (PRE.to):
Milton Rivas was a worker and electrician for the company Termotécnica. He was known for his leadership and support for workers' rights in the region. He was part of the group of worker who had gone on strike with the objective of obtaining better working conditions for thousands of workers employed by the multinational Pacific Rubiales. 
Yesterday (Monday) Milton Rivas was stopped by two armed men close to the Termotécnica installations, who told him that if he didn't halt his union activities they were going to murder him. Unfortunately, today they made good on their threats

Another day in capital markets, folks, and just another sheer coincidence that Serafino Iacono is sitting on the board of another company in Colombia that's connected with extrajudicial killings. Yes that right, it's just a coincidence. Nothing else but sheer coincidence.. We want to make it crystal clear to Serafino's lawyers and lackeys that we're not making any connection at all between his person and assassinations in Colombia, because that just wouldn't be right, would it? Move along now, nothing to see here.



There are a thousand better things to do with your time than follow the intraday action in junior exploration stage mining companies

Exhibit A:


And a thousand is a severe understatement, come to think of it.

Primero (P.to) (PPP) shares will drop on today's news

Just last week (December 5th to be exact), your humble scribe was chewing the cud regarding the prospects of Primero Mining (P.to) (PPP) with longtime reader and mailpal 'GC'. Here's a slightly edited version of one of the mails sent from this desk to GC's:

It's an interesting one. P failed to buy Young Davidson, openly states it wants to grow via M&A, but with a mkt cap of ~$600m and working cap of ~$100m options look limited. So they try for a like-sized goldie and try to pay with 100% paper? Immediate share price drop. However, if I were the P CEO I'd be dying to do an all-paper deal as the stock is still currently valued up to the hilt and there are plenty of beaten down prices out there. But what to buy? Explorecos are the cheapest, but they weigh heavily on balance sheet until up and running. And i don't see many pure Au plays out there with the price tag P can afford. 

So today we get this news, as P has decided to go the all-paper exploreco-with-prospect route. The only question is whether P shares will manage to stay above $6. I reckon it's a 50/50 chance.

UPDATE: It wasn't a difficult call, P.to now down 6.3% in early trading. But even with today's drop, having stared at the price action in P for a few weeks and for a small part of that time having shorted the stock for a small trading win (now closed, currently no position) I'd still venture to say that it's one of the most artificially inflated stock prices in the junior world right now, the epitome of style over substance.

Update 2: Pretty close original guess, in fact. It got to $6.03 before the BS spinners kicked in and pushed it back up.


OT: An interview with Alex Zanardi

Sport is everything: sport is nothing. Sport is important: sport is trivial. Sport is packed with meaning: 
sport means nothing. Sport is an escape from real life: sport makes life uncompromisingly vivid. 
Sport is packed with contradictions: Sport is the most straightforward thing on the planet.
Simon Barnes, The Meaning of Sport, 2006

Your humble scribe highly recommends this new interview with Alex Zanardi, ex-motor racer, accident victim, Paralympic gold medallist and extraordinary human being. Here's an extract

"One day during my rehabilitation I met a guy. I didn't even know what he was doing at the rehab centre, but we had a coffee and talked about motorsport.
"Two hours later I saw him with a little child in his arms and he was crying while looking out of the window. I went to see him and asked if everything was OK.
"He just turned around with tears in his eyes and said: 'Everything's not just fine, it's great. My baby was born with no legs, and she has reached the age when they can fit her with prosthetic legs. Today the doctors picked her up to stand for the very first time and they asked me where her shoes were. And I realised that up until today I had never bought my daughter a pair of shoes, and I had to rush out to get some. When I saw her standing with her new shoes I was the happiest man in the world.'
"It was hard for me not to start crying immediately but a few minutes later I found myself alone in the bathroom and I looked at myself in the mirror. I said: 'You should never shed a tear about what happened to you, because you're a lucky bastard compared with this great guy you just met.'

continues here