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6/29/13

Saturday music: Glastonbury 2013, Primal Scream, Rocks

This happened just a few hours ago at Glastonbury 2013 and offers you heaps and oodles of evidence that nineteen years after the song was first released, Primal Scream have still got it. In spades.



I'll leave the Rolling Stones uploads to others. This one rules.

UPDATE: Aha, wellwellwell and riddle me ree, The Graun gave the set five stars and even picked out the above vid to feature in the review. Great minds thnk alike/fools seldom differ.

6/28/13

Parte Tres of the "Friday-Night-Bury-That-News-While-Market-Players-Are-At-Happy-Hour" NR stakes

For a while, and as mentioned over at VancVenture, this one from Lounor (LO.v) declaring Chap11 was in the running. But then, suddenly, all bets were off. STEP FORWARD BARRICK GOLD (ABX):

TORONTO, ONTARIO--(Marketwired - Jun 28, 2013) -All amounts expressed in US dollars unless otherwise indicated
Barrick Gold Corporation (ABX)(ABX.TO) (Barrick or the "company") is providing the following updates on the Pascua-Lama project in Chile and Argentina with respect to construction re-sequencing, capital expenditures and impairment testing. 

Schedule Re-sequencing and Reduction of 2013-2014 Capital Spending
The company has submitted a plan, subject to review by Chilean regulatory authorities, to construct the project's water management system in compliance with permit conditions for completion by the end of 2014, after which Barrick expects to complete remaining construction works in Chile, including pre-stripping. Under this scenario, ore from Chile is expected to be available for processing by mid-2016.  
In line with this timeframe, and in light of challenging market conditions and materially lower metal prices, the company intends to re-sequence construction of the process plant and other facilities in Argentina in order to target first production by mid-2016 (compared to the previous schedule of the second half of 2014).

And what was that later on in the NR? An impairment? of approx FIVE BILLION FREAKIN' DOLLARS? Oh my, why on earth did ABX wait for Friday evening before a long weekend to announce this one? I'm absolutely stumped...

The Friday OT: George Harrison; All things must pass

For reader LS, a fine person indeed.



It's not always going to be this grey.

So what makes you think there might be institutionalized racism in Peru, Otto?

Oooh, just a hunch.

And then this, a book approved for the 2013 national curriculum by the Ministry of Education entitled "Aromas" for second grade students (i.e. 7 years old and abouts) which has a pleasant little legend about "The Origin of Races". We first get to read that long ago all humans lived in cave, but couldn't get out because the entrance was guarded by a tiger. But one day one brave human killed the tiger and the people could finally leave. So they then went to a lake to wash, and...


... which says, "The first race to appear were white, then came some indians because the water was already dirty, and finally some stayed black."

Cute, huh? Just the type of thing you'd want your seven year old child to read too, no?

Colombia: President Santos remains steady at 50% approval



Pollster Gallup Colombia doesn't take a regular as clockwork snapshot of Presidential approval, but it does enough surveys to give us a trend. When it comes to President Juanma, he suffered loss of approval through 2011 and 2012 (which isn't a shock for a midterm presidency) but 2013 has seen he approval rating maintain a steady 50% which was confirmed by the latest poll for June 2013, out last night. It's not the type of number that Uribe used to poll all the time but it is enough for a strong re-election platform. The ongoing peace talks with the FARC, which are making slow but significant progress, remain the top agenda item.

After watching the early morning action in juniors...

...it's shaping up to be a wild and unpredictable last day of 2q, big moves and swings all over the place, both up and down, for no apparent fundy reasons bar the shifting of equities from one account to another. Probably best to turn off the interwebnetpipes machine until it's all over.

Goodbye Google Reader

Hello Feedly (your author's preferred new RSS vehicle)

Or The Old Reader (others say it's good)

Or you might have a better alternative. But what I do know, without a shadow of an ounce of a doubt, is that Google has just made an extremely stupid mistake. 


Chart of the day is...

...the gold/copper ratio.


So, the industrial demand slump forecast due to the Euro crisis has faded and the fear factor that had hedgies stuffing their matresses with GLD has abated...is that how the narrative goes? If so, this ratio has more left to drop, but that doesn't really explain why copper has seen the bottom fall out of its market price, either.


6/27/13

Quote of the day

"And what could possibly go wrong with 5000 armed survivalist libertopian goldbugs living in RVs underground?"

Yep, it's him

A seriously big archeological discovery in Peru, announced today

Nat Geo has the story, right here. Big kudos to the digging team who a) managed to find a main Wari burial site and just as important b) managed to keep the discovery secret so that grave looters didn't get wind of it and whisk the treasures away. The result is an important discovery that will benefit all.

Canadian mining companies saying goodbye to the Russell 3000 list tomorrow

The Russell 3000 does its annual rebalance tomorrow and here are some of the names that are getting dropped. We also provide the approximate number of shares for sale from the index drop, as estimated by those finely fettered fellows over at Haywood

  • McEwen Mining (MUX) (MUX.to): Robbie Mac's dream of making the S&P500 by 2015 takes a bit of a setback, verdad? An expected 19.9m shares for sale due to the Russell 3000 dropping MUX, which is roughly 7X average daily volume.
  • Vista Gold (VGZ): This one has 5.6m shares on the block, which is around 13X daily vols.
  • Midway Gold (MDW). The market will see the sudden arrival of 1.5m shares, about 3X daily vols.
  • Goldenstar Reosurces (GSS). This one is estimated to be putting 23.8m shares on the market, about 8X daily volumes.




The United Nations 2013 World Drug Report...

...was released last night. You can get your copy on this link (or the executive summary on this one).

Ecuador, USA and ATPDEA: "You can't fire me cos I quit"

The mouse roars again. Ecuador has rescinded its ATPDEA trade deal with the USA. Here's a translation of that link

Ecuador today announced that it has irrevocably renounced its trade barrier incentives (ATPDEA, its acronym in English) that the USA awarded the country as compensation for its fight against drugs, and that its would not accept pressure or threats from anybody. 
This according to Communication Secretary Fernando Alvarado, who said in a press conference that, "Ecuador does not accept pressure or threats from anybody and does not do deals with its principles, neither does it submit to market interests no matter how important they might be.

In other words, Ecuador has agreed to house Snowden (and Assange), USA has said (off record) "Do that and we'll take ATPDEA away", Correa flicks an almighty bird.

UPDATE: Reuters EngLang is on it now.


6/26/13

Ecuador provides letter of Safe Conduct to Edward Snowden

Univision reports that Ecuador has given a Safe Conduct letter to Edward Snowden, that in theory at least would allow him to travel from Russia to Quito Ecuador without the need of a passport. Here's a somewhat fuzzy shot of the letter dated June 22nd...


...and here's a link to a much better and easily read PDF version from the Univision website.

PS: All rather strange, with the NYT reporting that Ecuador denies giving Snowden a travel document.

And the junior mining company Freudian slip of the day comes from...

...Stealth Minerals (SML.v), which has a price chart as wonderful as this...



...but even more wonderfully wonderful is this page of its website, linked right here. Posterity screenshot for you:


Your author deeply thanks reader R for the headsup.

It's evolution, baby

Huldra Silver (HDA.v) offers up the three magic words "care and maintenance"

UPDATE: And another, Atna (ATN.to) at Pinson's "care and maintenance" NR post-close.

A Flash update...

...has been sent to subscribers on this fine and crisp Wednesday morning, pre-opening bell.

Chart of the day is...

...gold at one thousand, two hundred and thirty-one United States dollars per troy ounce.


6/25/13

Carolina Balbuena

Not the normal fare round here, nothing at all to do with mining or business or politics and no explanations of the Spanish language report contents, either. Those of you versed in Spanish would do well to read this well-balanced and well-written report in Argentina's La Nacion today about Carolina Balbuena and Pope Francisco that doesn't lapse into the type of hype these things can generate. I get the feeling we'll hear this woman's name more often.

Your humble scribe laughed so hard he nearly choked on his poutine

Not often do junior mining company NRs come with the President and CEO saying (and we quote), "This is utterly incredible!".

It's not good news, either. Merci bien M. Hébert, I was in need of a chuckle.

So tell me Otto, what's the Vampire Squid saying about copper nowadays?

Well, as you asked...

Here's the front page of the latest strategy sheet PDF from GS on copper, dated June 25th. Cut to the last paragraph for the bearish call on copper prices. Meanwhile, you know the mail address if you want the whole thing.

Chinese tightening brings forward our projected surplus
Copper prices have sold off heavily over the past three weeks, predominantly reflecting concerns about Chinese and EM economic growth. In the very near term we believe that the market is susceptible to short covering rallies given the extreme positioning, evidenced by Comex net and outright short positions reaching record highs last week. Catalysts for covering rallies include potential policy easing by the PBOC, more details of China’s plan for an urbanization renaissance, purchases of physical copper by China’s State Reserve’s Bureau, non-conventional easing by the ECB, and other global easing by policy makers in the face of deteriorating global growth prospects. 
Having said this, we believe the copper market is in a broader transition to a surplus market, and slower near-term demand growth in the world’s biggest copper consumer is likely to close the current 'window' of physical copper tightness sooner than we previously expected. In particular, the recent tightening of Chinese financial conditions resulted in our economists downgrading their China GDP forecasts to 7.4% (from 7.8%) for 2013 and 7.7% (from 8.4%) for 2014. This development, together with a sooner-than-anticipated weakening in copper-intensive late-cycle Chinese construction completions - China's biggest end-use copper market, and increased downside risks to ex-Chinese copper consumption, have led us to downgrade our global copper consumption growth forecast for 2013- from 3.8% to 2.9%. In turn, we now forecast a small copper market surplus of c.250kt (2H13 based, with 1H13 in balance to small deficit), heading into a 2014 surplus of c.400kt. Given our broader outlook of a market heading into surplus with risks to global demand growth increasingly skewed to the downside, we recommend producers take the opportunity to hedge into any near-term short covering rallies. 
While we have been forecasting a significant copper market surplus in 2014 for some time, our new 2H13 surplus forecast suggests that the 12-month price outlook is incrementally bearish (owing to a higher cumulative surplus). Specifically, our new 3-mo, 6-mo, and 12-mo forecasts are $7,000/t (from $7,500/t), $6,600/t (from $8,000/t), and $6,600/t (from $7,000/t) respectively, with our new 2013 and 2014 annual average forecasts at $7,216/t (from $7,600/t, -5.0%), and $6,600/t (from $6,925/t, - 4.7%). In our base case we expect substantial fundamental support to 'kick in' in the low-mid $6,000/t range - our 2014 forecast price low is $6,200/t.

Agnico Eagle (AEM) (AEM.to) junior bargain hunt update

Hey, remember how Agnico Eagle (AEM.to) (AEM) was lauded and feted by the market for its policy of buying near-10% stakes in a whole bunch of exploration stage juniors so far this year (not to mention the completion of the Urastar buyout)? Do you recall in the same way as your humble scribe the plaudits and bouquets of flowers thrown the way of AEM head honcho Sean Boyd for his undoubted sector acumen and unbeatable nose for an obvious bargain? So, let's see how things are going:


Oh really, that well? My, it's strange how the media have decided that this isn't such a hot story after all....

Rye Patch (RPM.v) and Coeur (CDE) (CDE.to) reach an agreement

There's going to be plenty of fallout from this NR just hit, but let's just cut to the chase. Here's the paydirt:


Bottom line: All the speculators who thought buying Rye Patch (RPM.v) on the news was a great idea and akin to picking up money off the pavement have lost.

RPM.v has done well however, with $10m cash from the deal and 3.4% of the gross proceeds of 40m oz Ag (over the years to come), which I'm going to estimate at $3m a year over five years 2014 to 2019*. RPM also raised decent working cap money on the back of the hoohah in early 2012 and has one claim given over by CDE. Sadly, when you divide that estimated $25m into the 138.3m shares out, there's really not that much to make the PPS pop. Eighteen cents, to be  clear. But as usual the real winners are the lawyers on both sides. So to make it clear:

Lawyers > Company > You

In other words, just like virtually any other junior mining story.

As for RPM, if you own it and are lucky enough you see 45c today on some kind of hooplah hype, sell it.

UPDATE: Holy crap, it dumped like there was no tomorrow. Open down 28% (which goes to show just how closely I (haven't) followed this story.

UPDATE 2: Iwnattos names and shames some of the impeccable market voices who led their respective flocks up the garden path, the ones that can't even claim to be wrong for the right reasons, that's cos these are the ones that said RPM would clean up on the Coeur deal, the "pocking money up off the sidewalk" crew. There are more.

*before you start mailing in, i'm the first to admit this is really ballpark and the timescale may be way off


The next President of Chile will raise corporate taxes

Once Michelle Bachelet wins the Chilean presidential election in November* corporate income tax will go up. To explain why, rather than make up my own deep analysis here's a direct translaton of this short, succinct and accurate report from the decent website Mineria Pan Americana:

Bachelet Will Raise Taxes on Companies in Chile
25 June 2013 
The ex-President and Chilean presidential candidate for the Socialist Party, Michelle Bachelet, announced that she would raise corporate tax from its current 20% to 25% if she is elected President of the country in the election to be held on November 17th. 
The candidate's plans include a scaled rise in taxes during the four years of her mandate. The money raised would be used to finance free education in the country. The tax reform proposed by the ex-President would generate, according to her, extra income of U$8.2Bn, largely from the mining sector. 
The right wing government of Sebastián Piñera raised corporate tax from 17% to 20% in 2012, with the objective being to finance public educaton. Bachelet hopes to be elected as the left wing coalition candidate in the primary elections to be held next Sunday.


*care to bet against that call?

Checking in on LatAm currencies vs US Dollar

We noted a few weeks ago that LatAm's currencies had started to weaken en masse against the dollar. Here's how things have developed since then, using the five major free trading regional currencies (namely the Peru Sol (PEN), the Chile Peso (CLP), the Colombia Peso (COP) the Brazil Real (BRL) and the Mexico Peso (MXN)) along with a three month timescale:


Not much room for debate on this one, the only issue is one of I say jump you say how high. The Brazilian Real (BRL), now at 2.22 to the dollar after spending years at sub-2 levels (even sub 1.50 in mid -2011) has been hit hardest of them all.

Chart of the day is...

...copper, which is putting up a fight and refusing to wear a two-handle in public:


6/24/13

Yet another narco corruption scandal in Peru that will die a quiet death

The last seven days have seen a more-than interesting story appear in Peru, when ex-con and self-admitted narcotrafficker Carlos Butrón blew the whistle on a bunch of top politicos in the previous APRA government of Alan Garcia. In a nutshell, the head of the parliamentary committee that oversees the process of official pardons for convicted criminals, one Facundo Chinguel, has been arrested on charges that he accepted U$30,000 in exchange for obtaining the Presidential Pardon for a Colombia narcotrafficker. Along with the centrepiece revelation come more accusations that many members of the pardoning committee accepted bribes from the cocaine clans in exchange for many more official pardons.

There are dozens of reports now circulating in the national press about this scandal (here's a digest page  in Spanish for those want to follow it in rough chronological order) and your author thought of running a longer piece giving a blow by blow account of all the events so far and the way that many roads lead to Ex-President Alan García himself. But on reflection the real story here is what's almost certainly about to happen. Nothing. Time and again your author has seen stories regarding narcotrafficking money come up in Peru and then suddenly, for no apparent reason, the whole thing shuts down and not a word is mentioned in any of the local news media ever again. Which always brings me back to the recollection of just how much money is moved by cocaine in Peru. 


Six billion dollars is a very very big pie. Plenty of slices to go around and coincidentally there are a whole heap of corrupt motherfuckers running the political scene in the country. Those two seemingly unrelated facts may, of course, be connected.



"Do you want a fatherland or toilet paper?"

That was the question Elías Jaua, Chancellor of Venezuela, asked his crowd during a speech this weekend. Clearly he has never heard of the old legal saying never ask a question to which to you don't know the answer because it seems obvious from here.


I mean...easy one. But to be fair, he did go on to say this (translated):
"It's rather foolish, colleagues, because a temporary suppy problem can't stand up to the supreme value that is having a Fatherland. The Fatherland isn't measured in a supermarket, but in the conscience of the men and women who live in a nation."
So let's think some more on this......


Nope, still an easy one, Elías


Tip sheet for journalists on Ecuador

It's one of those rare occasions when the Very Important Countries turn their steely gaze to this backwater corner of the world and we're about to get a whole bunch of ridiculous drivel balanced and fair reports about one of them there countries down there in that there South America. So as a public service and to help cut a few corners for those journalists who have just been handed an assignment, IKN offers a few tips and ideas about Ecuador.

1) It is not spelled with a Q
2) When it comes to the capital city, don't say 'Kweetowh', say "Keeto". A bit like Keno but with a different consonant in the middle, ok guys?
3) Check out the China investment angle (copper mine, hydroelectric dams, oil industry), cherrypick a few stats and you'll soon have your Commie angle worked out.
4) No, Correa is not gay, he's married with kids. He's just way better looking than you are, you fat slob hack.
5) Remember to insert the phrase "freedom of the press" in every single report you file, else it will be spiked by your editor.
6) And don't forget to mention the crime rate, but don't for the life of you point out that it's no worse than anywhere else in South America (and the only real problem areas are in the Capital). No need for balance, none of your readers are ever going to actually visit the place after all.
7) Ecuador's inflation at 3% is under control, unemployment at 4.6% is the best in The Americas. GDP growth is strong. Suggest luck.
8) If you're one of the lucky ones who gets to fly down before filing a report, tell your bosses that basing yourself in Guayaquil would be much smarter than being in Quito, what with that being the business zone, home to middle class etc. (pssst...hint...nice beaches, fruity rum punches).

Chart of the day is...

...three years of the gold/silver ratio:



After staring at this chart a while this morning while enjoying the morning cup of coffee, your humble scribe can only reach one tentative conclusion: That one of the very few charts in which he takes a real and active interest doesn't work any longer.

The IKN Weekly, out now



IKN216 has just been sent to subscribers. Changes being made.

6/23/13

FIFA Website hacked by Brazil protester

Here's a screenshot of the hack for posterity:


Sambahack's "We want a fair World Cup", a dancing Blatter and then this message, "Forced evictions and human rights violations overshadow the preparations for the World Cup. Share the hack and find out more on our Website." are all part of the fun. Go see for yourself right here (while it still lasts)

We like this.

The Barkerville Gold (BGM.v) 43-101 update paydirt

Especially for Iwnattos.


Yup, that's 1m oz Au M+I, 4m oz inferred. Kinda shy of that there super duper 100m oz potential, no?

Snowden and Ecuador

With Edward Snowden now apparently en route to the sunny palm-shaded beaches of Guaya, some thoughts. Yes, we're about to get a ton of snark about press freedom in Ecuador. But more importantly...

1) We're about to find out just how sensitive the information Snowden is carrying might be. Because you can be darned sure that by now the U.S Government has a very good idea of exactly what Snowden knows, what he's downloaded etc and if it's really enough to bring down the whole edifice, he's not going to reach Ecuador. However, if the documents held by Edwards are less than State-threatening, he'll make it ok.

2) Therefore, if you happen to be reading this and have a plane ticket booked for the Moscow/Habana run in the next 24 hours, you may want to consider deferring that flight for a couple of days. Either that or checking that all your insurance papers are in good order. Don't forget to kiss the kids before you leave, either.

3) Assuming Wikileaks is behind the liaison, Assange isn't going to make it out of that Ecuador embassy, either. Whatever Snowden might say about non-dissemination of information to third parties (which may be true or may be false), be sure that the USA will assume that both Assange and the Rafael Correa government will be given copies of the contents of Snowden's hard drives.

4) Meanwhile, Rafael Correa has proven balls in the face of direct threats (recall the events of September 2011) so he's not going to be easily cowed. Again, the way in which the US engages with Ecuador once asylum is granted to Snowden (and it will be) will be a tell on the sensitivity of the documents, but in this case the more aggressive the US stance, the less they truly care about the docs that Snowden carries. Conversely,  the quiet diplo route will indicate real nerves.

5) Suggested viewing is The Mouse That Roared, an entertaining movie made in 1959 (adapted from a novel, which I haven't read) and starring Peter Sellers.