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3/23/13

The South America World Cup Qualifiers: Round 12 coming at you



Mere hours ago was round 11 and we managed to bag a decent profit thanks to Peru's late winning goal versus Chile. But less of the past and more of the future, here we are with round 12 to be played on Tuesday, March 26th and all to play for (well, all my $151.80 bankroll anyway). It's Peru's turn to take a break this round, so here we go with the match-ups, prices from Ladbrokes dot com as per normal:

Bolivia 9/2    Draw 13/5   Argentina   8/15
Ecuador  8/15   Draw  5/2    Paraguay   9/2
Chile 6/5   Draw  11/5  Uruguay   9/5
Venezuela 2/1   Draw 11/5   Colombia   11/10

This round has tough to call matches, be in no doubt.

  • Starting with Bolivia vs Argentina and there's no doubt at all as to where the footy class lies in this game, but teams are often found out by the altitude of La Paz (if you're a sea-leveller, try playing footy at 12,500 feet above sea level and find out why all by yourself) and Argentina has an (in)famously bad time up there on occasion (anyone remember the 6-1 loss last time, Messi and all playing?). It's pure lottery ticket stuff that tie, not going to try and call it. 
  • Ecuador is favourite to beat Paraguay, also at altitude (~9,500 feet this time, not quite as severe but still a significant factor), but the price is rather prohibitive and Paraguay managed to grab a draw vs Uruguay last time by playing ugly, disruptive footy in Montevideo, so in other words this one is a lottery as well. 
  • Chile at home to Uruguay is the most interesting of the draw football-wise, as Chile can be pretty or can be rough (especially at home) and Uruguay isn't a namby-pamby team either...this one could see sparks flying. Playing against Chile is the loss of suspended star Alexei Sanchez for the game, who was by far the most dangerous vs Peru last time and will be missed by the home team. Uruguay can play anything between mediocrity and worldbeating, has the raw materials (Suarez, Cavani, Forlan and others) but still, coming away from Santiago with points isn't easy for the best of them. 
  • Then we have the northern derby and Venezuela will fancy their chances at home, but Colombia is arguably playing some of the nicest stuff at national level right now and may just about sneak this one. They took the poor Bolivia apart last Friday (5-0) and deserved that scoreline, too. Right now Colombia is the form team on the continent, looking solid for qualification for Brazil 2014 and has the look of a dark horse candidate for the big party next year.
So to the betting and I'm going for two wagers this round. 

$20 Colombia to win at 11/10 and we fish for the away win here. Colombia plays attractive, attacking, skillful stuff and has a world class front line these days, so every chance of a couple of goals here, away or not. Total potential return $42.

$5 on a Chile/Uruguay draw at 11/5. Both of these teams have the goods to win by two or three clear goals, but I'm going to have a small punt at the value result, nothing big being risked, just a value guess on two teams that may finish cancelling each other out. Total potential return $16.

If all else fails, it will still leave our treasury with $126.80 for the rounds to come (i.e. we're still up on our original $100 investment, whatever happens this round). And let's see how we get on.

UPDATE: Two failed bets. Chile won 2-0 in a scrappy match, Venezuela did well to beat a Colombia that didn't take its chances, a deserved 1-0. Therefore $126.80 to take to June.




OT: Photo of the day

And they ask me why I like Twitter...


This from this link.

3/22/13

Tahoe Resources (THO.to) (TAHO) has nothing to do with the regular, mining relating assassinations around the Tahoe Resources Escobal silver project, says CEO

Which is good to know: Here's the English language report, here's an extract

In response to a query from La politica, Ira M. Gostin, Vice President Investor Relations for the Canadian silver mining company Tahoe Resources Inc., as well as CEO Kevin McArthur, have rejected any suggestion that the company or its subsidiary, Minera San Rafael (MSR), were involved in the murder earlier this week of the indigenous activist Exaltación Marcos Ucelo. 
“Tahoe Resources along with its Guatemala operating company Minera San Rafael (MSR) emphatically reject and condemn criminal activities in our surrounding communities and in Guatemala at-large,” Mr. Gostin told La politica in an email. 
“Tahoe and MSR are responsibly developing the Escobal project, and recent false accusations that the companies may have been involved in threats or violent actions are unfortunate. A recent kidnapping event occurred in a locale 15 km by road from our project site, in Jalapa state, with one fatality reported in the press.”
In his response Mr. Gostin emphasized the 15 km distance. At the time of his murder, Marcos Ucelo was continues here



The Friday OT: Chocquibtown: Uh la la

Cool track from Colombia's finest and the group's new single out soon, we hear.



No video, just the music so hit play and go do wome other work while it's running through your speakers. Got real groove.

Further to silver P/E ratios

After yesterday's quick thought on Fortuna (FVI.to) (FSM) and Silver Wheaton (SLW) earnings and P/E ratios thereof, your humble scribe notes that despite silver spot being slightly down (though to be fair, nothing really negative), both SLW and FVI are rallying this morning.

That's interesting, as the market seems to be cool about paying 16X for these names. Now yeah, before you start mailing and splainin me, yup I know these are "growth stories" and the future looks much brighter and capex and pipeline flow and downstreams and all the others. But in this market free cash flow counts and Rule One™ (make a profit) counts even more, if your don't believe me, ask ORA.to, GPR.to, JAG or a host of other pathetically managed dogs you can choose from in small producer world. So yes, growth stories get premiums, but show me the money too.

What I see here are two companies that are getting significant premiums to market averages, not because they're simply producers (FVI in senso stricto, while SLW's production is a somewhat looser definition) but because they're well run companies. Or in bottom line terms, investors are happy to pay to have top class management teams in their portfolios. From that thought comes two general themes:

1) How much extra is the market willing to pay? Have we crossed the line already?
2) What other companies are a) well run  b) profitable c) growing fast but d) aren't getting this same 16X rating enjoyed by our above examples? 

For what it's worth, on that second question I'm quite sure that i've identified at least two already, and have suspicions on at least four others.

Chart of the day is...

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


Enjoy your Friday.

3/21/13

Silver P/E ratios

Silver Wheaton (SLW) reported tonight and the quarterly EPS gives us a forward P/E ratio of 15.5X
Fortuna Silver (FVI.to) (FSM) reported pre-bell today and the quarterly EPS gives us a forward P/E ratio of 15.75X
Oh look, a pattern! I like patterns.

UPDATE: FWIW, an update post with a few more thoughts here

The South America World Cup Qualifiers: We're Back!


It's that time again, the big break in the World Cup qualifiers is done and the next round is upon us. After the last round in September we have precisely $103.05 in our virtual betting fund (we were doing well until miserably losing $48 on the last two matches) so although only $3 and a bit up on the starting kitty, we still have plenty of ammunition for the games to come. First up let's check out what's on the menu over the next 48 hours, with prices taken (as always) from bookmakers ladbrokes dot com:

Colombia 1/4     Draw 9/2     Bolivia 9/1
Uruguay 8/13     Draw 5/2     Paraguay 9/2
Argentina 1/8     Draw 15/2     Venezuela 16/1
Peru 13/8     Draw 9/4     Chile 6/4

Now for this round's bets and for me, the stand-out value here is Peru for a home win. Yes Chile are probably a better team all told, but they're much more effective at home. Meanwhile Peru has enough star power in its line-up to cause problems and will really benefit from both the home crowd and the traditional emnity the two countries have for each other. Plus we're now at the stage when Peru knows that to have any chance of qualifying for the Brazil bunfest next year, there's very little margin for error in the matches remaining and absolutely none for home games: In short, Peru is win or bust for this match. Therefore the bet is:
  • $30 on Peru to win at 13/8, which gives a theoretical total return (including stake) of $78.75. It also leaves $73.05 in the pot for the next round, just in case things go wrong here.


And let's see how we get on.

UPDATE: And that's a winning bet. A good thing, which puts our treasury back at $151.80 and a far healthier state of affairs. We'll place our wagers for the next round on Monday.


Alderon (ADV.to) (AXX)

That special feeling you get when you trust Stan Bharti as much as the theoretical economics of a project still on the drawing board:


I'd love to know how the guy who paid $1.80 first thing Monday morning feels today (just 72 hours later). more to the point, I'd love to know how his boss feels.

Oh c'mon longs, where's your sense of humour gone? Hey, look on the bright side: Brent Cook likes this stock :-)


disclosure: No position Alderon.

Tahoe Resources (TAHO) (THO.to): more community opposition, more death

This link is required reading for anyone interested in the ongoing tale of Tahor Resources (TAHO) (THO.to) and its Escobal silver mine project in Guatemala. Here's an extract from the English language report:

Four indigenous Xinca leaders, including the President of the Xinca Indigenous Parliament, were abducted by a group of heavily armed men at 8 pm on the night of Sunday, March 17. Two of the kidnapped men escaped, and Roberto González Ucelo, President of the Xinca Parliament, was freed a day later. 

However, the lifeless body of the fourth man, Exaltación Marcos Ucelo, who acted as Secretary of the Xinca Parliament, was then discovered in a ravine in Mataquescuintla. According to Guatemala’s deputy minister of state, Edy Juárez, the community activist had been severely beaten before being killed. 

The abductions and murder came directly after a referendum in which 99.2% of the population of the community of El Volcancito, near the proposed mine site and the larger town of San Rafael Las Flores, rejected plans by Canada’s Tahoe Resources to develop its Escobal silver mining project, according to a communique from Congcoop, an umbrella organization for NGOs and cooperatives. 

Go read the whole thing here, there's plenty more to chew over in this post. Meanwhile, srtill no comment at all from THO about the latest round of community unrest, which gives us a very good idea of the regard in which it holds all of its stakeholders.

H/T Mike at the evergood blog Central American Politics for the headsup.

Argentina: the black market dollar explosion

They say a picture paints a thousand whatnots, so rather than bore you with too much blahblah here's the picture: 10 months of the black market dollar exchange rate in Argentina (known as "the blue dollar"):


This is why ex-pats have stopped their moaning about prices in the country. Watch out gringos, it's not going to last and an announcement on that should come very soon. Chart from here

Smart analyst decisions of the day, B2Gold (BTO.to) edition

George Albino (and Oliver Turner) of GMP have initiated coverage on B2Gold (BTO.to) today March 21st,  with a buy rating and a $4.75 price target. Albino has always been one of the sharper knives in the pack.

Chart of the day is...

...copper, hourlies:

At the beginning of the year your humble scribe tentatively pencilled in $3.50/lb as the average price for copper in 2013. So far it's trended higher then most recently dived a little lower than that number, so it'll be worth watching the very short term (for a change) and note whether we get back to the level thanks to last night's decent Chinese manufacturing PMI (51.7, when the market had anticipated 50.8). After all, something has to counter the clear signals of market oversupply in order that decent prices hold and China, that's always exhibit A.


3/20/13

Update for RSS Reader users re. Feedly

A couple of additional notes and hints for RSS readers:

After the post earlier this week, several mailers (ty all) noted to your humble scribe that it isn't just Google Reader RSS users that are affected by Google's daft decision to discontinue Google Reader. So if you are using a RSS reader such as iOS you may well be affected too because a lot of these systems piggyback off Google's, apparently.

It's good to note that my Google Reader subs are down to 595 (from 657 Monday), so some of you guys are already making the switch. As for the others, don't leave it too late.

I'm really warming to the alternative RSS site Feedly and can say, after a couple of days test-driving, that it's a wholly good alternative for RSS feeds. I like the way in which Feedly will automatically synch your current RSS feeds straight into your new account when you join. But I'm particularly impressed about the way in which Edwin, CEO at Feedly sent me a mail on opening my new (and 100% gratis) account with this link (from his own mail account too...nice touch), a post of hints and tips for new arrivals from Google Reader which shows how they can adapt Feedly to closely match Google Reader's service. The mail was a smart PR move, the info easy to follow as well. Kudos to Feedly and as such I'm happy to evangelize the service here on IKN. Go to Feedly via this link and set up your own account.

1) quietly buy 2) make noise 3) get suckers to buy their sales 4) lather 5) rinse 6) repeat



Oh how they mocked your humble scribe for poo-poohing the 2013 move out of gold and into platinum. How they chortled when Pt went through parity with Au late January. Bizarrely enough, the mocking has stopped.

Colombia Celebrity Natalia Paris Joins the Evo Morales Gay Chicken Bandwagon

(and if that isn't your favourite IKN headline so far this year, I'd like to know which one was)

Gay Star News brings us a decent English language report of a story doing the rounds in Colombia. Natalia Paris is your actual TV star there and has national celebrity clout, so this is kicking up quite a fuss. Here's an extract, go read the whole thing right here:

Speaking on La Red TV program she said: ‘children which are eating these chickens, as they are injected with feminine hormones, become homosexuals.’
Because children are eating female hormones begin to change their metabolism, and that's what's happening. We must be aware of everything we eat’, warned Paris.
The blonde model further ‘clarified’ that these chickens are responsible for girls under 10 years of age are developing faster these days.
Natalia ‘reasoned that: ‘Little girls of 7, 8, 9 and 10 years of age already are developing, because as they are eating these chickens, the female hormones spread through your body and accelerate its growth’.

We have a word for people like Natalia down this way. The word is HUEVONAAAAAAAA

Chart of the day is...

...gold tonnage holdings in the gold ETF (GLD), 2013 to date. Your humble scribe awoke this morning to...

UPDATE 1-SPDR gold fund reports first net inflow in 6 weeks

...in his mailbox, with plenty of mailbox evidence to indicate that goldbugs everywhere are fapping like crazy to the news. After the inevitable feeling of a sinking heart and "oh no not again" had abated and being the kind of person that prefers data, facts and context over the unending hype and bullshit from the worst sort of reactionary herdthink blinkered sector followers known to investment society, it was to the SPDR GLD website and datadump time. Here's the chart:


We see gold holdings are down around 130 tonnes this year and the jump to 1,222mt headlined this morning came straight after a dive from 1,233mt to 1,219mt the previous two days...but that kind of context doesn't get any headlines or passed on to your author by the asshole goldbug rah rah brigade, strangely enough. There's a shocker, eh?

One final thing: Note the Y-axis scale on the chart above. Now look at the same dataset when Y is set at a more normal 0 lower:


Now tell me a 30mt move, let alone a 3mt move, matters in a market that sees 2,600mt of gold produced per year. Goldbugs, you want gold to be a currency but you're obsessed by its supply/demand as if it were a commodity and you don't see that logical disconnect. You rail against GLD as evil but you pore over every imaginable dataset it throws your way and cherrypick anything remotely bullish to scream at the world. You are very very boring motherfuckers, will you please just for once


3/19/13

Dominican Republic 23 million, Barrick Pueblo Viejo 0

News today is that after customs finally let that shipment of Barrick Pueblo Viejo (60% ABX, 40% GG) silver/gold doré out of Dominican Republic, due to irregularities with the shipment and its paperwork the country is slapping the company with the maximum permissible fine for customs offences, double the shipment value.

That means the $11.6m worth of metal ABX/GG moved out of Dom Rep has just cost them $23.2m.

The next episode of the soap opera should be soon enough, as Dom Rep is now examining no fewer than 19 other cases of exports by the mining company. You kinda get the feeling the two sides will sit down at the negotiation table on the wider issues soon, no?


Gold and Cyprus part deux

It's still registering in this way:


Look guys, the supposed fear haven, the one we're all supposed to run to if the going gets rocky, is up 1.1% since this whole Cyprus snafu started.

One point one percent.

And silver? Up 0.3%.

And platinum? Down 2.2%

And copper? Adios amigos.

In other words, the safe haven metal has caught a modest bid, the rest of the complex is nervous about the deflationary downside. They're not grasping for assets, so stop grasping at straws.




Not a word from Tahoe Resources (THO.to) (TAHO)...

...about the headline-making news of civil disturbances around its Escobal mine in Guatemala today. Do these people think what's going on with the communities and their opposition to the mining activity there isn't material? Or is it plain arrogance?

Louis Lobito James of Casey Research plays "You Scratch My Back" with Gold Port Resources (GPO.v)

Back in January Casey Research's junior mining person, Louis Lobito Little Wolf James, got all hot and sticky about Gold Port Resources (GPO.v) and pumped it to the unfortunate saps on the Casey Investment Alert "premium" (word used loosely, of course) list. As a result we had a run up of this tiny no-hope penny play as the greener of his greenhorns took the reco at face value.

Vancouver, British Columbia – Gold Port Resources Ltd. (TSX-V: GPO) (The “Company”) is pleased to announce a non-brokered private placement raising gross proceeds of up to $900,000 through the issuance of up to 15 million units at a price of $0.06 per unit. Each $0.06 unit is comprised of one common share of the Company and one non-transferable common share purchase warrant. Each non-transferable common share purchase warrant allows the holder to acquire an additional common share of the Company at a price of $0.10 per share for a period of two years from the continues here

And amazingly enough, GPO.v also announced that finder's fees were available to those who helped fill the placement. So let's recap and do a visual check on all things GPO, shall we?


And how did Lobito react to the news that GPO was raising cash by selling paper? Why he pumped the freakin' thing to his flock once again, of course. Here's how he signed off on his anal ysis of end January (when the stock stood at 6c and the placement had just been announced):
"Consequently, I think buying on the open market now should work out well. I also think the PP offers excellent leverage to the upside, which I would take if I were qualified. Management has thanked us for not selling the stock as so many others did, so I'm sure they'll welcome Casey subscribers at the PP table."
And here we are seven weeks later, placement only half filled (having trouble pushing paper, guys?) and price back at 4c. So yeah, buying at 6c might have worked out well but waiting for the Casey BS to stop would have been a whole lot better, dontchathink? And do you note in that above text the obviously cozy relationship between Louis James of Casey Research and the GPO.v management, too? If I were a Casey Research subscriber, I'd ask Little Wolf Lobito directly whether or not he's benefitting from finder's fees from this and other placements he seems so coincidentally to be involved in as a third party, supposedly independent anal yst.

By the way, we also hear that another scumbag promo bullshitter (and Scientologist freak), Michael Baybak, has been trying to foist this GPO placement on his mailing lists. But we'll round this one off with one last observation on Lobito and it's especially for those who think he's the "naive but honest" guy (one I've heard from several voices inside the biz). That word comes from Douglas Adams:
"If it looks like a duck, and quacks like a duck, we have at least to consider the possibility that we have a small aquatic bird of the family anatidae on our hands."

Colombia's coffee, made in Peru

We at IKN were on this story nearly four years ago about how, due to the much reduced harvests of coffee in Colombia, the country was importing ever greater amounts from its neighbours (chiefly Peru and Ecuador, then third place Brazil). Since that time Colombia's coffee harvest yields haven't increased much and as a result, the trade continues unabated.

What it boils down to, at least assuming Colombia isn't doing shady mixing of beans, is that the country's marketing (Valdez et al) has become so valuable that it pays them to export everything they grow and import cheaper beans (but of equal quality) from countries that haven't built their brand as well. Here's Colombia's Dinero Magazine with the story:

Good Coffee but with a Foreign Aroma

80% of coffee drunk in Colombia in 2012 was imported, despite the fact that the country is the fourth biggest producer in the world and the leader in exports in the smooth washed arabica coffee category.

The  National Administrative Department of Statistics (DANE) confirmed that last year 1.03m sacks of coffee were imported, principally from Ecuador and Peru, which amounts to 80% of all the coffee consumed in Colombia, the largest import volume ever. For example in the year 2000 21,400 60kg sacks were imported and the purchase of beans from other countries had by 2009 shot up to 757,667 sacks.

According to "Coffee: World Market and Commerce" from the US Department of Agriculture, Colombia began buying coffee at the start of the crisis brought on by diseases and floods that cut production from 13 million sacks in 2008 to 8m in 2012.

Chart of the day is...

...copper, dailies:

We're at a new 2013 low for copper and the worst price since pre-Bernanke QE3 announcement. Remember how China was going to boost copper with all that post-New Year buying? Yeah, me neither.

3/18/13

Gold Resource Corp (GORO) annual report published

Get your copy here. 

Expect that write up before the open tomorrow, subbers

update: sent

The credit card market in Peru

This report in Peru's decent bizrag Gestion got some of your humble scribe's attention this morning, a note on how the expansion in credit card ownership in Peru is a horrid murder threat to the middle class..or something like that. So off we went to the Peru banking overseer's website (Asbanc), nailed down a few details, came up with this chart (and please note the cut down Y-axis, done to note more easily any changes):


I see little to worry about here, frankly. Yes credit is expanding and the current 7.5m or so cards now in circulation in the country is around one per four citizens (man woman child) but the rise is steady, no exponential leaps and after all, we are talking about a country that's been growing an average of 6% per year in GDP terms for the past decade...I think you're allowed to offer and demand more credit to consumrs under those circumstances, no?

The Gestion article does make one decent points though; the spread of 18.6% average (2012) between bank interest rates and card rates in Peru is the 3rd largest in Latin America, behind only Brazil and Paraguay. This is good biz for banks, but it also means that there's a big gap waiting to be filled by some keener competition in the future.

Guatemala: Join the dots

1) "Recently President Otto Perez Molina has more or less come out in support of lynching and the extralegal killings of suspected criminals."

2) Tahoe Resources (THO.to) (TAHO) NR, March 8th: "We have met with Guatemalan President Otto Perez Molina and he continues to assure us that the final Escobal permit will be issued soon," said Tahoe President and CEO Kevin McArthur. He added that no delays to the project schedule are expected.

3) Feb 6th: Xincas demand end to mining. Directors of the community said in a press conference that several conflict areas exist in the western part of the country,due to mining of natural resources, and that in Santa Rosa, Jalapa and Jutiapa there were current 29 companies with production or exploration licences

4) March 15th: Yet again, we awake to the sad news of kidnappings of directors of the Xinca parliament, with the death of parliament secretary of Santa María Zalapán, Expectación Marcos, and the kidnapped and still unlocated Roberto González, President of the Xinca parliament, along with two other people kidnapped by dozens of heavily armed men on Sunday evening.


IKN is confident that Tahoe Resources (THO.to) (TAHO) will make a public statement as soon as possible to condemn the killing and disappearance of local community leaders opposed to its mine.

PS: oh yeah, forgot this one: "Pérez Molina calls attack on mine "terrorism""

UPDATE: Roads are now blocked in the city of Jalapa due to protests against the deaths of two of the kidnapped community leaders and the continued disappearance of two others. 

Gold's verdict on Cyprus


Nuff said.

(fwiw, the copper pit is far more interesting today)

For the 657 people who get IKN via Google Reader

It seems as though Google is serious about this sunsetting of Google Reader, so here are a couple of ideas for those of you getting IKN via RSS to Reader.

1) Sign up for the daily digest e-mail instead. Just go here, put in your preferred mail address and the ID code, then click on the link Feedburner sends you in the mail. From then on you'll get all IKN posts of the previous day in on handy missive, early morning Americas-time.

2) Feedly, which I've already signed up for myself. Its format isn't the same as Reader but the good thing here is that Feedly will automatically synch in your current RSS feeds, so no need to go through a whole bunch of manual linking. Find the Feedly homepage here

Chart of the day is...

...today's action in gold, price in Euros and in Dollars, from the Kitco realtime page:


I'm surprised to see gold doing better in dollar terms than in Euro terms this morning, but WTFDIK anyway?

3/17/13

The IKN Weekly, out now


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