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8/9/14

Agreed with 95% of this

It's called, "I’ve been blogging for 8 freaking years. Here’s what I learned as I went along." and though your humble scribe has only been at this crazy way of filling a day for six and a half years, there was a lot of agreement on reading it. It's also an easyread, quick and bullet-pointy.

I'm not telling you which 5% I disagreed with, though.

August 1914, by Isaac Rosenberg

The early weeks came with a sheen of romaticism about war and for your classic example, take Rupert Brooke's 'The Soldier' and its "If I should die, think only this of me: That there's some corner of a foreign field, that is forever England", arguably the deadliest lines of poetry ever written. But when reality showed its ugly face the events of one hundred years ago this month were seen in a different light. Isaac Rosenberg wrote the following two years later.

August 1914
What in our lives is burnt
In the fire of this?
The heart's dear granary?
The much we shall miss?

Three lives hath one life-
Iron, honey, gold.
The gold, the honey gone-
Left is the hard and cold.

Iron are our lives
Molten right through our youth.
A burnt space through ripe fields,
A fair mouth's broken tooth.

Rosenberg didn't survive the war, killed in battle in April 1918. He was 28 years old at the time.

8/8/14

Mining PRs and the Ottotrans™, Part 85


I like the ones that are easily translated. This one from Carpathian Gold (CPN.to) today condenses words many many, into words few few:

This is what they wrote:
TORONTO, ONTARIO--(Marketwired - Aug 8, 2014) - Carpathian Gold Inc. (TSX:CPN) (the "Corporation" or "Carpathian") advises that it has concluded a further extended forbearance and amendment agreement (the "Agreement") with Macquarie Bank Limited ("Macquarie") in respect of the project finance facility (the "Facility") entered into between Macquarie and the Corporation's wholly-owned subsidiary, Mineração Riacho dos Machados Ltda. ("MRDM"). The Agreement extends the previously announced forbearance period which expired on July 31, 2014 to August 29, 2014. As of today, Macquarie has advanced an aggregate of approximately US$169.0 million to MRDM under the Facility. There is no assurance that Macquarie will agree to any further extensions of the forbearance.

The Corporation also advises that it has now received notice from Macquarie of its election to require payment by MRDM and the Corporation of the completion guarantee refund amount and the production shortfall payment under the gold stream transactions with Macquarie. As previously disclosed, the gold stream transactions provide that, if during the period from July 1, 2013 to June 30, 2014, MRDM has not produced a minimum of 80,000 ounces of refined gold (of which 10,000 ounces would be deliverable to Macquarie), then Macquarie shall have the right to require MRDM and the Corporation, jointly and severally, to refund to Macquarie an amount equal to that percentage of the upfront payments which is equal to the percentage of underproduction of refined gold over such 12-month period compared with that which was projected for such 12-month period as set out in the life of mine plan agreed at the time of closing of these transactions. During said 12-month period, MRDM produced a total of 8,168 ounces of refined gold, compared to the 100,000 ounces of refined gold that was projected to be produced under the life of mine plan that was agreed to at the time of closing of the gold stream transactions. Given the forgoing, the underproduction of refined gold during the 12-month period ending June 30, 2014 is equal to 91.8% and, therefore, a refund amount of US$27,549,600 is owed to Macquarie under the gold stream transactions.
Pursuant to the terms of the gold stream arrangements, MRDM and the Corporation have elected to defer payment of the refund amount until the later of (i) the date upon which the violations and defaults under the Facility have been remedied and (ii) the date upon which the refund amount may be paid without constituting a default under the Facility. The refund amount bears interest at the rate of US prime plus 4%. In respect of MRDM, Macquarie has agreed to forebear its rights to charge or accrue interest on the refund amount or exercise any such rights with respect to interest until August 29, 2014. There is no assurance that Macquarie will agree to any extensions of the forbearance.
About Carpathian

And this is what it means (especially paragraph two):

we're fucked

The Friday OT: Dave Gilmour; Coming back to life

Live at the Royal Albert Hall.



For Guido and Estela, the centre of the best news this year.

PS: And for Buenos Aires, a city with a heart of gold.


Chart of the day is...

...one that compares Argentina's State run oil company YPF $YPF to the NYSE Oil & Gas index (XOI) since May 4th 2012, the date it was re-nationalized and returned to the country after being run by Spain's Repsol $REP for years:



Yup you're right, these nationalizations never work and State-run companies are a waste of time and money.

YPF Second-Quarter Profit Climbs on Higher Sales
By Pablo Gonzalez  Aug 7, 2014
 
YPF SA, (YPF) Argentina’s largest oil company, posted second-quarter sales that beat analysts’ estimates as production increased. 
Crude output gained 5.6 percent in the quarter to 240,900 barrels of oil equivalent a day from a year ago while natural gas production rose 32 percent, Buenos Aires-based YPF said in a regulatory filing yesterday. Sales climbed 61 percent to 35.3 billion pesos ($4.3 billion), beating the 31.5-billion peso average estimate of three analysts compiled by Bloomberg.

Banco Santander in Brazil: Deep foda

A few weeks ago Banco Santander royally pissed off the Dilma Rousseff government by sending a note out to high-level clients that stated the dollar could rise and macroeconomic indicators drop if it looked like Dilma was winning this year's election contest (in her case re-election). At the time the time called for heads to roll at the bank and all sorts of lovely. This morning Folha de S. Paulo reveals a bizarre twist to the tale; the Santander analyst who published the note lifted the whole thing from an analysis previously published by Banco Fador in Brazil. So it turns out the note was an obvious case of plagiarism and yes, dismissals have been made and red-faced apologies emitted by Santander.

By the way, in the most recent poll out today (the reliabvle Ibope) Dilma's on 38%, nearest rival 23%. No sign of economic collapse, though.


A Flash update...

...was sent to subscribers just before 8am this Friday morning, pre-opening bell. Two non-trades.

8/7/14

RIO.to and $2.70/$2.80

Your humble scribe receives a mail on technical anlaysis of Rio Alto Mining (RIOM) (RIO.to).

Well yeah, not the toughest chart read is it?

Primero (P.to) (PPP) is so proud of its net earnings figure for 2q14 that...

...it gets announced after 12 paragraphs and a whole bullet point section of the NR this morning. In fact, you have to wade through 1,320 words before you find out what they managed to make in the quarter, though IKN is kind and generous and does the hard work for you, so here's...

"The Company generated net income of $0.6 million ($0.00 per share)"

...the information as reported (in fact it's $572k, but apparently twenty-eight thousand dollars isn't worth much these days so they just round up a couple of sig figs). And why are they so proud of that net earnings number that they bury it so far down? Because we have to pay attention to what a company wants us to read, not silly fripperies such as whether a company is profitable or not. By the way, if you think that net earnings number is a bit light for a $1.25Bn precious metals mining company you're not alone, kind reader.

On that subject, cue the lapdog anal ysts who'll now tell you how wonderful the stock is again.

UPDATE: Case in point, from the Scotia Daily Mining Scoop mailer:
"Ovais Habib (Precious Metals Analyst – Scotiabank) saying that Primero should react well today from the expansion news and overall strong Q2/14 results. "
Hmmm, maybe Scotia's Ovais is confused about the 5% drop in Primero shares this morning.

Hey, totally unrelated of course, I wonder if Scotia's ever done any investment banking business with Primero? 


Chart of the day is...

...the gold/silver ratio:


And up we go again. As gold wheels around $1.3k and remains reasonably steady, silver fails to impress.

But it's nothing to do with supply and how silver's a byproduct of base metals production these days. It's the cartel and the illuminati and it's going to be legal tender in Mexico soon. Or Idaho.

8/6/14

Remind me again why you think McEwen Mining $MUX is worth U$950m, mister market

Another crappy quarter for McEwen Mining (MUX) (MUX.to), even backing out the pre-announced write down.
  • Revenues U$11.637m
  • Total costs (ex-write down): U$20.613m
  • The rest of the math, all yours kind reader.
Anyway, go see the whole MUX 2q14 filings here.

It's also true that the same guffaws can be guffawed about Great Panther Silver (GPR.to) (GPL) and its 2q14 numbers, but that assemblage of mediocrity is only given a market cap of $200m or so.



Estela de Carlotto

I was hoping Lillie over at Memory would post on the subject. She's done it so well too, starting like this:
"I am genuinely so pleased that I get to write this post; I think there can hardly have been a happier one since I started blogging."

Same here, I've had a stupid grin on since yesterday afternoon. Click here to read about the most wonderful news out of South America this year. And then this second post that shows some of the regional reaction. It's the stuff from which Oscar winning movies are made. Seriously people, whatever it is that you want, never give up. Never.


Imperial Metals (III.to) Mount Polley tailing failure: Jack Caldwell speaks

He's one of my fave mining writers anyway. He makes his living from being a world-level expert on tailings engineering. And he speaks his mind. Three reasons that make this post essential reading today. Here's a small extract, go read the whole thing:
Nobody but me is prepared to say why it failed.  I suspect it failed because there was too much water in the dam, the corner gave way, an upstream slide occurred, and the disaster ensued.   They are saying nobody could have anticipated this.  Rubbish.  It was entirely predictable given the facts.  It is just nobody had the courage to speak.
continues here

UPDATE: Today sees a second post from Caldwell on Mt Polley here.

Nolan Watson, the new Tye Burt ( $SAND )

Every NR out of Sandstorm (SAND) these days, plus the market's reaction to them all, can't help but remind your author about the way Kinross and Tye Burt held the mantle of 'market darling' for so long until its wasteful ways with asset cash were finally brought to book. All through the Burt era, K was praised as 'daring' and 'aggressive' and all those other sexy parts of the business leaders' dictionary, but then a bridge too far and...well, Burt's doing great things at Dacha I hear.


Anyway, back to SAND and head honcho Nolan Watson certainly seems to have a soft spot for Brazilian charities, no? First wasting untold millions on the Colossus moneypit, now his beneficiary is Luna Gold (LGC.to) and its "regularly capitalized" operations. Here's a jolly song to enjoy while you think about whether SAND is the screaming short in any streaming long/short pair you're currently considering.



UPDATE post-open: Oh, interesting. That bridge too far has arrived, perchance?


Y'know, half the problem of this blogging lark is getting the timing right.

UPDATE 2: Why we struggle:


And they wonder why your humble scribe doesn't form part of the junior mining speaker's circuit...

8/5/14

The Imperial Metals (III.to) tailings breach (UPDATED)

This photo has shown up in several places this morning of the tailings dam breach at the Imperial Metals (III.to) Mount Polley mine in British Columbia, Canada, first reported yesterday. While you read the latest NR from the company this morning, give it your eyetime:



That looks like a serious incident.

UPDATE: Here's a video taken by the RCMP. Holy crap.


And here's one from a copter overflight. Holy crap II.

Psst...wanna buy an uranium junior in Argentina, guv?

The news is from U308 Corp (UWE.to) and it's entitled, "PEA Shows U3O8 Corp's Laguna Salada Deposit in Uranium Industry's Lower Quartile of Anything You'd Ever Invest Cash In Assuming Normal Levels Of Sanity" and along with other pieces of wonde....Oh wait...sorry...start again, there's a mistake there.

The news is from U308 Corp (UWE.to) and it's entitled, "PEA Shows U3O8 Corp's Laguna Salada Deposit in Uranium Industry's Lower Quartile of Cash Costs" and along with other pieces of wonderful, such as the whole concept of building your uranium mine in Chubut Argentina...hell, any mine in Chubut (ask Pan American Silver about that angle of the fun), the way in which these jokers present the PEA findings beggars belief, right from the getgo title in the NR which is:

"PEA Highlights (Pre-Tax Base Case at $60/lb U3O8):"

Well, the first part in parentheses means that either there's no need to pay taxes in Argentina or they're not telling us everything about the numbers. While the second part...well...this is the two year chart for the Globex Uranium futures contract, from here:


Yes, they're assuming U$60/lb as their selling price. Of course they're right. I'm sure they won't mind the rest of us assuming they're a bunch of scamming scumballs, what with so many rough assumptions in play.

8/4/14

The latest CEPAL projections for GDP growth in LatAm & Carib, 2014

The report was out today, here's the paydirt chart (but CEPAL publishes a metric tonne of info on these occasions, one chart is merely scratching the surface):



  • The regional average drops from the 2.7% forecast made earlier this year to 2.2%.
  • Panama still heads the list
  • Bolivia's still kicking butt (which is why you hear nothing about the country from the Evo-Haters
  • Of the biggest four regional economies, only Colombia's doing ok. Mexico's improving a little from a poor showing in 2013, but Brazil and Argentina are way down the list.
  • Venezuela sucks. Well yeah, we knew that.

Lots more from the executive summary here. Go to CEPAL for the full whack reports, including very details individual reports on each country.

Mineros S.A. give up on Colombia, go gold mining in Peru & Nicaragua

Read this interview with Beatriz Uribe, president of Colombia's big gold miner Mineros S.A. Most interesting because she makes it clear that the company has had enough of trying to move forward on projects in her own country and is now concentrating on 1) Nicaragua (where it recently took over producer Hemco) and 2) Peru, where it's looking to invest in advanced stage projects with feas studies already in place (rather than its previous strategy of early stage exploration).

Got the hint yet?


Peru government approves the Southern Copper $SCCO Tia Maria project

The news is just out (Monday lunchtime), link right here.

The need-to-know: The Ministry of Energy and Mines has approved the environmental impact permit (EIA) for Tia Maria, which effectively means governmental approval for the project that entails a U$1.3Bn investment into a mine that will run for at least 18 years in the southern coastal region of Peru. What the locals think of this decision is potentially another story, as it's always been a controversial project and the opposition stopped it in its tracks (and caused the first EIA permit to be revoked) during the Alan García administration period.

"What do you do in The IKN Weekly?"

I get that question or variations thereof on a fairly regular basis in mails etc.

The answer: I do zero bullshit. Here's how IKN273 started yesterday:

Near term noise
One of the few parts about this job that irks is writing script on a weekly basis that tries to keep the narrative vaguely interesting, because sometimes it just plain isn’t. Or as one junior miner CEO who’ll remain nameless told me, “You’re good at saying the same thing in different ways”. Though probably true it’s not something about which I’m at all proud, and it most grates on me those weeks where I sit down, write for a few hours and then on reviewing the work either edit it into small pieces or simply delete it all (for the record I’ve just done exactly that again this weekend, consigning about 1,000 words of what turned out to be little more than me spouting to the great library in the sky).

Part of it is a reflection on how I keep myself interested in a too-flat sector and that’s by proposing and running near-term trades. They provide material for commentary and while things are slow I tend to grab them with both hands and make them out to be more important and pressing than they really are. And that’s the point of this short intro today, a reminder that they’re not. Bucks can be made by flipping in and out and there’s nothing wrong with that, but the big bucks come from buying good stocks at discounted prices, then waiting. And waiting. And then waiting some more as yes, it can be boring as hell and it’s not fodder for a publication with a due date once every seven days.  It comes to a head on days such as this, the first of five Sundays this August that get me wondering what I can keep you people entertained with during The Doldrums. So yes, a cute turn of phrase here, a sharp comment about company X there, a trade idea floated past your eyes. Can do, Let Me Entertain You, blah blah blah.

All this near-term noise matters somewhere between little and nothing. What matters is:

Buy Rio Alto, go fishing, come back when it’s higher.
Or if you prefer:
Put your cash into decent assets now, because decent assets are heavily discounted.

Or a third option:
Invest in a range of solid companies which will appreciate over time, while enjoying a little side action through trading.

Or variations on the theme. While you’re at it, ask yourself why you’re paying good money on a monthly or yearly  basis to read somebody saying the same thing over and over again. Twenty five dollars is ten shares of RIOM, after all.


The discovery process: A very good panel discussion from the Vancouver show last week

Click through on this link to get and watch all three parts of the panel, chaired by Brent Cook and featuring Eira Thomas, Miles Thompson and Tim Coughlin. Anyone interested in the junior mining and exploratino sector get a kick out of this panel and its discussion, it's several levels above the norm for these group round-table discussion panel events.

Another crazy USA/Cuba subversion story uncovered by AP

Last time it was the Cuban Twitter, this time we have the US, via its USAID vehicle, trying to recruit political activists from inside Cuba's youth. Story here (and it's wildly good), excerpt here:

USAID hired Creative Associates International, a Washington-based company, as part of a civil society program against Cuba's communist government. The same company was central to the creation of a "Cuban Twitter" — a messaging network revealed in April by The Associated Press, designed to reach hundreds of thousands of Cubans. 
According to internal documents obtained by the AP and interviews in six countries, USAID's young operatives posed as tourists, visited college campuses and used a ruse that could undermine USAID's credibility in critical health work around the world: An HIV-prevention workshop one called the "perfect excuse" to recruit political activists, according to a report by Murillo's group. 
Beats me why Evo Morales chucked USAID out of Bolivia.

8/3/14

The IKN Weekly, out now




IKN273 has just been sent to subscribers. With 27 pages, 12k words, pretty charts and tables, and jovial banter, b'gosh.

Janet looks at 89 dicks

Seriously.


Via Kids Prefer Cheese (aka the acceptable face of academia) comes this video of a girl called Janet Silverman who wants to be famous and does youtubes and will now look at 89 dickpics in a row to comment on them for your entertainment and amusement.

Which is good, though the Beethoven's 6th symphony youtube on Friday is better.

UPDATE: Apparanetly it's not funny