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2/1/14

Tungurahua lighting up



One of the region's most active volcanoes (last seen smoking and belching in 2013, the geological equivalent of 5 minutes ago), Tungurahua in Ecuador has registered pyroclastic flows and some pretty deep explosions in the last few hours (Google News Spanish page on the thing here). In the last few minutes the government has emitted an orange alert and said there has been an "important increase" in eruptions and activity.

It's painless and it brings on many changes

A little list of suicides in the last week:

  • William Broeksmit, ex- MD, Deutsche Bank asset managment, aged 58.
  • Karl Slym, MD, Tata Motors, aged 51
  • Gabriel Magee, leader of Fixed Income/Rates tech team JP Morgan London, aged 39 (who in time-honoured style jumped 500 feet from his own 33rd floor office building window to his death).
  • Tim Dickenson, director of communications and human resources, Swiss Re London.
  • Mike Dueker, chief economist at Russell Investments Seattle, aged 50.

FP has most of the names here and also comments on this uptick in high-flying (no pun intented) financial whizzos all topping themselves. Meanwhile, one "Toronto advisor who wished to remain anonymous" said, "It can be very stressful. You are judged on how you perform and you are responsible,” he adds. “The big key is to really understand what your client’s needs and goals are and get them to look longer term … if you can do that, you can alleviate the stress." He's anonymous because of the shame surrounding suicide, as even having your name remotely attached to the subject gets people all icky. But that's another story. 

The London Underground Jubilee Line Ticket Barrier sings Song 2 by Blur

When they ask you why the internets exist, show them this:



Alexis Sanchez

A peach of a goal for Barcelona today:



One of those where you go "Did he mean that?" and then you watch and watch the replays carefully. And yep, he meant it. 

1/31/14

The Friday OT: Manfred Mann's Earth Band; California

Because it's been in my head for about three months, for some reason. It's a personal Proustian memory of darker days, but a great track nevertheless. Perhaps there's some subconcious cleansing going on.



Includes some great vocal work and a couple of right-out-the-70s guitar breaks. From the 1978 album Watch, a cover of the original by folk/country singer Sue Vickers (here)

El Salvador and Costa Rica hold elections

This weekend sees Presidential elections in both countries. Mike At CenAmPol has a good preview up of the El Salvador deal, probably the more interesting of the two. Meanwhile (and as forecast in The IKN Weekly a couple of editions back) all signs are that both votes will go to a second round run-off.

Chart of the day is...

...the US Dollar index:


Your humble scribe notes that much is being made of USD strength this morning, so stare at that chart once again (just two or three seconds of your valuable time necessary). Yup, if we get past 81.5 I'll be more impressed as well. Until then....

1/30/14

Breaking news: The Economist predicts the end of the party in Venezuela and Argentina

Here's the note, which says that LatAm's two weakest economies are now at breaking point (their words, not mine). This of course differs from the way in which The Economist predicted the doom of Venezuela and Argentina's current political model in 2013.

And 2012

And 2011

And 2010

And 2009

And 2008

And 2007

And 2006

(etc)

Tocqueville dumping Gold Resource Corp (GORO)

As at September 30th, Tocqueville Asset Management was the second largest insto holder of Gold Resource Corp (GORO), with 3,423,172 shares in its possession (the largest was and still is Hochschild (HOC.L), though they're big dumpers too now)

Tonight, Tocqueville has filed its 31st December positions and that's changed by a factor of very-lot-yes-indeedy. The insto now holds 1,246,750 shares, which means it dumped 2,176,422 papers onto the market during 4q13.

So now you know.

Veris Gold (VG.to)

Seriously, this must be the worst run junior gold producer of them all. How the blinking flip can this thing default on a single month's gold delivery after boasting about its November gold production numbers and also raising millions in a recent equity deal (note: VG could have paid DB in cash rather than bullion if the gold wasn't there for delivery)? The absolute best case scenario i can come up with is that the mgmt decided to play chicken with DB, thinking that they wouldn't file for default on just one month's non-delivery and they could sort it out amicably later. But even that scenario screams 'utter fuckwits' at the world. As for the worst case...well, the simple question to ask is "Where's the money gone?", the difficult questions run on after that.

Any way you cut it, it beggars belief that this piece of dogshyte equity is rallying today, rebote de gato muerto or not. Or to quote Mugatu:


PS: Oh yeah, here's the NR for context, just in case the above is slightly cryptic to you.

Gold news: Taking a guess on the headline...

...the Bloomie will use to explain today's move in gold, using (of course) the world-famous IKN Bloomberg Gold Headline Generator:


Because I forgot to include the "on market wankery" option, basically.

To be honest, nothing's really changed in gold on this move. Until $1180/oz to the downside or $1280/oz to the upside is broken, this is trading range malarkey and nothing else. The good news is that some panicker might now allow me to get those two long positions i've been fishing for all week at a decent price.

Chart of the day is...

...the five major regional trading currencies versus the US Dollar, three month timespan:


In order of weakness versus the Greenback, your offerings are:

  • The Brazilian Real (BRL)
  • The Chilean Peso (CLP)
  • The Colombian Peso (COP)
  • The Peruvian Nuevo Sol (PEN)
  • The Mexican Peso (MXN)

Of the five, the Colombian Peso's recent drop has been grabbing headlines but the real fun one for me in the Chilean Peso, because its weakness is studiously ignored by all those who hold up that country's economy as their grand model. The same people who rail against the nasty uppity lefty countries for being primary export addicts, but ignore the fact that copper accounts for over half of everything Chile exports. Ah, bless 'em.

1/29/14

Checking in on that Sulliden (SUE.to) Rorschach test

Back on September 11th last year, IKN went with this post on Sulliden (SUE.to) (text only, you miss out on the chortleworthy image if you don't click through):

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A Rorschach test for your broker on LatAm political risk for mining

It's an easy one, too: If your broker advises you to buy Sulliden (SUE.to) today on the back of this news...
TORONTO, Sept. 11, 2013 /PRNewswire/ - Sulliden Gold Corporation Ltd. ("Sulliden", or the "Company") (SUE.TO) (SUE.TO) (SDDDF) announces that Peru's Ministry of Energy and Mines ("MINEM") has approved the Environmental Impact Assessment ("EIA") for the Shahuindo gold and silver project in northern Peru. The approval of the EIA is the key milestone in the advancement of the project towards the construction phase. Continues here
... because the Shahuindo project is now de-risked, fire your broker. Or put another way, try not to be as stupid with your money as Agnico Eagle.

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Sooooooo...how have things been since then?




Oh goody, time for the return of Owly! What say you, Owly?


Yeah, thought you'd say that. Still, as soon as SUE.to wraps up its financing package things will be different and we can be almost quite definitely nearly absolutely certain(ish) that they're not having any issues with raising the cash for Shahuindo. Right, Justin?

Harvard University does mining in LatAm (and does it well)

A veritable feast of prose on mining in LatAm is served up in this quarter's Harvard University magazine, ReVista, with links to all the articles off the main page here (and all available for free).

Subjects include China's increasing mining presence in Peru (a particularly interesting note), a Mining Boom in LatAm general macro overview article, the mining boom in Colombia and a host of other industry-focussed notes. But also there are half a dozen articles on the other side of the story, that of country and community protests and resistance to the advance of mining projects in the area, including overview notes on indigenous pushback against mining and case studies from Guatemala and El Salvador, among others.

And more and more and more. I've spent the last hour reading through the contents and attest that it's an excellent resource for anyone interested in Mining in Latin America, with much food for thought. Here's the main page again with all the links, go use it.


The gold/silver ratio and Jackie Wilson

As asking Mister Soul about the continued underperformance of silver is surely as much use as asking Eric Sprott


Music, maestro

And the junior NR of the day is...

... one noticed by twitterpal @goldfinder12 (h/t) from US OTC company Strategic Rare Earth Metals. It goes like this:

HENDERSON, Nev., Jan. 29, 2014 (GLOBE NEWSWIRE) -- Strategic Rare Earth Metals, Inc. (OTC Markets:SREH) announced today that the Company is actively pursuing a J/V with a Medical Marijuana Company. 
Bill Schaefer, President of Strategic Rare Earth Metals, Inc., stated, I am very pleased and excited about the opportunities that lay ahead for the Company.
continues here

And no, we are not making this up. On this groundbreaking news the company is up 75%....to just over 0.2c per share.

Mere coincidence, of course

On December 28th 2013, IKN wrote this:

Bad news for Dynacor Gold (DNG.to) 
As from January 1st 2014, the Peruvian authorities are cracking down on the illegally mined ores coming into Nazca and Chala. IKN predicts a margin squeeze at DNG as from 1q14.

Today, we have this from the company:
Dynacor Temporarily Suspends Ore Purchases for its Huanca Gold and Silver Ore Processing Plant
And the reason? Well, go take a look at the NR for yourself.

Just sayin'.

UPDATE post-open: Oh.


Casey Research subscribers should expect their soothing "nothing to worry about here" emergency update mail very shortly. So don't ask me, I didn't pump it to you. I'm just this pissy little blogger, y'see.


1/28/14

A travel photo

Spotted in a major shopping mall in Lima last week:



This worries me. And for those who don't know about Cinnabons, Louis CK has it wrapped (NSFW):



So any guesses on the next big bought deal to be announced?

Further to that last post, time for guesses on the next price-tanking bought deal to be announced by a cash-strapped exploreco with a market-darling project that'll need a new slug of moolah to move its 2014 plans forward. Anyone got any ideas? Anyone?



Anyone?

Dalradian (DNA.to), Lydian (LYD.to), True Gold (TGM.v), bought deals

If you think the recent share price action in these three stocks is coincidental and totally unrelated...


...the best suggestion that can be offered is that you stay away from the juniors forever.


Castrovirreyna shuts down its mine

Castrovirreyna Compañia Minera S.A. is a small silver producer in Peru, one of the family-run type of companies that's been going for generations (in this case, 72 years). It's quoted on the Peru stock exchange (ticker CASTROC1), has 40.567m shares out and at its current price of S/1.34 has a market cap of just over S/54m (call it U$19m, give or take), though it's not a stock that gets much volume and can go many days without a trade on the exchange.

Its main asset is its only producing mine, San Genaro in Huancavelica, one of the high country Andean regions. A quick thumbnail on the operation is 600tpd max throughput and rock from six on-site veins that averages 120 g/t silver and some minor gold and lead credits (90% of revenues come from silver, this is very much a one-metal miner by Peru standards) and a typical annual output of a tad under 1m oz silver.

Last week the company closed the mine due to the ongoing low price of silver, or officially because the operations "do not create positive cash flow". It lost 5.1m Soles in 2012 and was already down by 4.2m Soles (~U$1.5m) in the first three quarters of 2013 (we don't have the 4q13 numbers yet) so it's hardly a surprise, but the decision also comes on the back of the company hiring an investment bank late last year (which means it was up for sale). 

Something to think about before you decide to buy shares in any mining company currently making a loss due to metals prices, methinks. And there's a whole bunch of those out there, let there be no doubt about it.

Can't get a fill

A minor personal grumble, made public. As noted on Sunday in IKN246, I'm looking to take a couple of small positions in a couple of juniors this week. The problem is that today, on trying to fish for a reasonable entry point, there's just no market for these stocks. One has a market maker who's basically trying to mindfuck me into bidding higher (not gonna happen) and the other is showing tiny quantities on both bid and ask but nothing doing for the amount I want to buy (which is larger in numerical terms, but is still really quite small in absolute dollar terms...it's modest stuff I'm looking for here, neither of these trades are likely to change the world).

It gets me musing once again on the multiple hurdles and handicaps that small retail investors have as challenges if they want to invest in the smallcap/tinycap Canadian exploreco market. Is it too much to ask of a stock exchange that's wailing and howling over its losses and the dearth of investor interest in its offerings to make itself a little more user friendly to those, like myself, who'd like to plough a little of their cash into the market? I'm sure it wouldn't be that difficult to set up a system where all stocks show a bid/ask with a small number of shares on offer that isn't just for show (the number of times I decide to pay the ask and it suddenly vanishes into thin air as my bid arrives, far too many to count) and would promote a little activity in the smaller stocks (no, I don't want to buy only the stocks you insist on shepherding me into, you regulatory fuckwits). I know that it's not too much to ask to remove the assholes rigging this market with phantom asks that drive us little guys crazy and make the mere thought of the next foray into the buying ring way more stressful and less pleasureable than it should be. Oh I could continue to rant here, but the point's made so no need to say the same thing in several different ways. Now going back to my fishing expedition.

A good Kid Dynamite post on trading and confirmation bias

It's right here and this is the central message...

"..if "I could give new traders a single piece of advice, it would be: “try to figure out what the guy on the other side of the trade is thinking.”   If you’re bullish and you know the bear thesis, it should either help you change your mind because you realize that you’re wrong, or give you confidence that the other side is wrong.  Either way, hearing someone voice sentiments on the other side of a trade shouldn’t make you mad.   If you are the guy on the message boards typing “GO AWAY SHORTY” every time someone mentions that your thesis may not be based in reality, you need help, fast.
...but you'd be very well served to click through and read the whole thing, as context and explanations help ram the point home. It also reminded me of the reasons there is no longer a comments section at this humble corner of cyberspace, which can be boiled down to 1) I'm not as nice as KD and 2) market dumbasses drive me mental.

Those pleasant Tahoe Resources guys (TAHO) (THO.to)

Rabble has an interesting note on a piece of news your humble scribe missed last week (with thanks to reader JS for the headsup). It deserves more eyeballs because unusually for an article written in English on Guatemala it's factual and accurate, so here's the link for your use. Meanwhile, here's how it starts:
How is it that when community leaders are wrongfully targeted in the aftermath of violence connected with Tahoe Resources’ Escobal mine they spend months in jail, while the company’s former head of security who faces criminal charges for his alleged role in the violence last April is first given house arrest and then allowed to avoid prison by arguing that he is sick? 
That’s what happened last week. 
Former head of security Alberto Rotondo has been under house arrest since May 2013, when he was linked to an April shooting that left six injured outside Tahoe Resources’ mine in southeastern Guatemala. On January 22, he was declared in contempt of court for failure to attend a hearing. As a result, the substitute measures that allowed him to be under house arrest were lifted and an arrest warrant issued. But instead of going to jail, on January 23, he called in sick and went to the hospital instead where he remains under arrest. 
In sharp contrast to the leniency shown Rotondo, when the Guatemalan government  responded to last April's violence by declaring a state of siege in the municipality of San Rafael Las Flores in May, five community members were immediately jailed. Two were released on bail after a couple of months and three others spent six miserable months in prison. Finally, they were released without charge given lack of evidence that they had done anything wrong.

1/27/14

The Bloomberg News Gold Market Headline Generator

Think it's tough to work for a world famous news organization? Think again, as IKN supplies all you need for that coveted sub-ed position you've been dreaming about at Bloomie.

What's that you say? You suspect that I may be a little tired of the infantile level of business journalism seen in recent times? My stars, whatever makes you think such a thing?

Mason Hill Advisors bought some silver stocks in 4q13

Today's filings show that Mason Hill Advisors has been adding to its positions in MAG Silver (MAG.to) (MVG) and Fortuna Silver (FVI.to) (FSM) in late 2013.
  • We knew that Mason Hill had been adding to MAG because of the 10% rule in Canada and the ensuing disclosure there, but it's still good to note that Mason Hill moved its holdings up by about 1.4m shares, to 7,651,671, in the second half of 2013. That's 12.73% of shares out, by the way.
  • Meanwhile, Mason Hill first took a big slug of Fortuna Silver (FVI.to) (FSM) back in 2012 and ended that year holding 7,932,400 shares. That saw a little adding in 4q13 (averaging down a bit, I'd boldly assume) and now they have 8,203,612 shares, or 6.51% of the company.

So now you know.


Ahhhh, home

Sing it, Frank:




Chart of the day is...

...gold, hourlies:

Kinda thought 1280 was going to be a key level. Said it on January 6th, in fact. Hey, this TA thing....Wheeeee!

1/26/14

The IKN Weekly, out now



 We don't need no aggravation

IKN246 has just been sent to subscribers. A sun-bleached episode, with added sea bream and mayonnaise. Bully for you.