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10/18/14

Hey Otto, what's the beef you have with brokerages and analysts anyway?

Oh ye of short memory. Ok, remember this one:


Dorato Resources yeah, the P+D scam run by the Cardero Group, Henk van Alphen, Jeff Pontius, Carlos Ballon and the merry band of pranksters. OK, so remember how the insto staff at Canaccord, PI Fincorp, Haywood, GMP etc all bought into the seed funding round? You don't? Well here's the reminder. In short, the beef with Canadian brokerages and the people who work there is that they're two-faced pieces of shit who don't give a damn about their clients. We good now?




Just add it on the hot rod death toll




Data versus anecdotals

Gary BiiWii makes a point today about negative feedback, which included this passage:
"...my point with this post is not to cry over some negative feedback.  It is to sort of shake my head publicly about how some people refuse to open their eyes while digging in to a failed view point no matter how long its failure persists."
That's fair enough, I agree, what's more it's a riff I've seen in other places recently, too (eg Krugman's been shaking his head publicly the last couple of days over his "inflation derp" enemies). I'd encourage you to read the whole article (even over a weekend when people shouldn't care so much about worky cashy profity things) to get the context, though after reading it I have two things to add:

1) Look at the words used by the negative commenter: "completely wrong", "absolutely no credibility", "definitely don't" are all used in that very short extract and if there's one thing I've learned about macro debate, the person who uses absolutes is the person who's talking out of his large intenstine, rectum and sphincter.

2) Too many people who think they have a valid opinion (and don't) fail to understand what data collection and statistics are trying to achieve, either through ignorance or simple refusal to accept things that challenge their own personal realities. Dullards all, their worldview boils down to "This is like this for me therefore it must be exactly the same for the whole of humanity" and is boring, boring and three times boring. Data and stats don't have the last word on anything and are in the end subjective in their own manner, but they're far less subjective than dumbass who writes in absolutes and when done correctly (or even reasonably well is enough) they convey more experiences of more people than one person's subjective experiences. Data compiled by people such as the Fed don't exactly match anyone's life, they try to get a handle on the median life. 

Anyway, go read Gary's post today. Good stuff as always.

Ex-soldiers living with PTSD

A magnificent piece of journalism. The Guardian reports on Post Traumatic Stress Disorder and its effects on ex-soldiers. It's not a new subject but this long-read report is of the highest quality and is essential, fascinating reading. If just one reader clicks through and reads the report, today's IKN has done a good thing.

10/17/14

Bobby Genovese scams also have downcycle moments

It's not all the scam pump all the time with scumbags like the disgusting parasite Bobby G, as their vehicles need to go through a period of re-charging before they can re-run their pump and dump moves on unsuspecting greenhorns. Part of the process was seen today in this Reg F, of Liberty Silver (LSL) which starts like this (your author's bold type highlights)...
October 17, 2014 - Toronto, Ontario. Liberty Silver Corp. (“Liberty” or the “Company”) today announced that it has amended and restated its agreement in relation to an existing US$1,210,000 principal amount secured loan facility (the “Original Loan”) made available by BG Capital Group Ltd. (“BGCG”). Under the terms of the revised agreement, BGCG has made available to the Company a committed non-revolving term credit facility in the principal amount of US$1,250,000 (the “New Loan”), which shall initially bear interest at a rate of 11% per annum and which shall be secured by a charge on all of the assets of the Company. The Company has also repaid the indebtedness to BGCG under the Original Loan by converting the outstanding, aggregate total sum of the principal amount of the Original Loan, together with all accrued and unpaid interest thereon, being US$1,248,653.70 (the “Debt”), into 99,892,296 common shares of the Company (“Common Shares”) at a deemed issue price of US$0.0125 per Common Share, in full satisfaction of the Debt under the Original Loan.

...then goes on to explain this:
The lender pursuant to the New Loan is BGCG. BGCG and certain of its related parties own, directly and indirectly, 129,861,249 Common Shares, representing approximately 70.1% of the Company’s 185,139,574 issued and outstanding Common Shares. Other than pursuant to the New Loan, the Company does not have any contractual or other relationship with BGCG.
In other words, for a fraction of the cash he made during the last Liberty Silver pump, Bobby G now has control of 70% of the company again. Only he and his slimy cohorts know when they'll go active on this vehicle from hell again, it could be months or couold be years, but it's now set up so that only he can benefit when the start buitton is pushed once more.

The Friday OT: Eminem; Lose yourself

The best thing Eminem ever did was brilliant:



And it's stayed fresh after 12 years (yes my friend, that number is a twelve). Really worth revisiting, helps you forget duets with pop singers and the other meta-shit he's come out with in the coasting stage of his career.

Renaud Adams, Primero, Richmont

Following on from the post yesterday evening, I was soon informed by mailers (interestingly, both pre and post announcement this morning) that Renaud Adams was joining Richmont Mines (RIC.to) as President & CEO. For some of the mailers, that seems to be the end of the matter. That's wrong.

People, let's make this crystal clear: Leaving a $750m company like Primero (P.to) (PPP) where you were Pres/COO (and earning $818k/annum) and joining a $125m company where you'll be Pres/CEO is not a move up the ladder. You don't leave a company like PPP "effective immediately" and go to one  a 1/5th of the size just because you're looking for a new challenge. Primero is doing this in early trading today...


...and rightly so. Mr Conway, care to elaborate?

UPDATE: Interesting feedback coming from this post. Subbers, IKN284 will have a little section.

Kinross

Seriously folks, holy shit.


Working cap of $1.9bn and book value of $6bn, now priced at a market cap of $3.3Bn.


Chart of the day is...

...the dollar, dailies:

Nothing else matters.

10/16/14

Primero (PPP) (P.to): Effective immediately, you say?


October 16, 2014
Primero Announces Management Changes
TORONTO, ONTARIO--(Marketwired - Oct. 16, 2014) - Primero Mining Corp. ("Primero" or the "Company") (TSX:P)(NYSE:PPP) announced today that Mr. Renaud Adams, President and Chief Operating Officer, has resigned effectively immediately to pursue other opportunities. Mr. Adams' duties will be assumed by senior management on an interim basis while a search for his replacement is completed.

"We would like to thank Renaud for his nearly 3 years of service and we wish him well with his future endeavors," stated Joseph F. Conway, President and Chief Executive Officer.

Ore Deposits 101: An eleven part course

Hey this is good. Sprott Global has put together a primer on ore deposits, with eleven videos, some short and others no-so short, that go through the need-to-know stuff about exploration and finding/developing resources in different metals and types of deposit. Here's a list of the eleven titles on offer
  • Ore Deposits 101 - Part 1 - Introduction 
  • Ore Deposits 101 - Part 2 - Layered Complexes and Kimberlites
  • Ore Deposits 101 - Part 3 - Porphyries, Skarns and IOCG Deposits
  • Ore Deposits 101 - Part 4 - Mesothermal and Greenstone Lode Gold Deposits
  • Ore Deposits 101 - Part 5 - Epithermal Gold Deposits
  • Ore Deposits 101 - Part 6 - Carlin Gold Deposits
  • Ore Deposits 101 - Part 7 - Volcanogenic Massive Sulfides and Sedex
  • Ore Deposits 101 - Part 8 - Witwatersrand Gold Desposits
  • Ore Deposits 101 - Part 9 - Uranium Deposits
  • Ore Deposits 101 - Part 10 - Exploration Process
  • Ore Deposits 101 - 11 Mineral Reserves, Resources and Estimation

Click through and get learning right here.

Capitulation: A simple thought

There are too many people calling capitulation for a capitulation to happen. It's too obvious. The markets don't work like that. Therefore they'll bounce from here. End of thought.

To pad out this post a little, here's a photo of three heavily armed people wearing rabbit costumes.

Yes, IKN has left Twitter (an in-house post)

To attempt to stem the mails that have started coming in, as noted on Monday (a Canada holiday, may be why it wasn't picked up by a few of you) I have deleted the IKN Twitter account and left the service. Couple of points to make:
  • No, it's not for nefarious reasons, or some nasty troll, or anything else of that sort (thick skin has been in place for years).
  • In a nutshell, the reason is that I see it's taking up a lot of my time. 
  • However, I also recognize it's a useful news service and helps to a certain extent in my work.
  • Therefore I want to sit back and get a decent handle on the cost/benefit balance of being or not being on Twitter.
  • I've tried to do that in a passive manner on a couple of occasions, but it hasn't worked. So the only effective way is to turn it off and see how things change without it in my working life.
  • This means that it's perfectly possible IKN rejoins Twitter at some point (few weeks?) if I decide benefits outweigh the costs. If so, I'll start a new account and make mention of it here.

Meanwhile, for those of you who were using Twitter to get delivery of IKN posts as they happened, I can suggest getting the RSS feed for the blog by clicking here or perhaps you'd consider joining the thousands of people who get the free daily IKN e-mail digest by using this service right here (if you do, you get all the day's posts, neatly packaged into one mail and delivered early morning the next day).

Chart of the day is...

...copper, hourlies:


Sheesh, and I thought yesterday was bad. That's under $3 and meaningfully, whihc blows a large hole in my bullish stance towards the metal.

Torex Gold (TXG.to) inside selling

Hey, don't let it worry you...


...what do directors know that's so special anyway? From here.

10/15/14

Ari Sussman and Vic Wall playing it fast and loose again

So I was flicking through the recent Continental Gold (CNL.to) literature and the plans for the Buritica mine when the following caveat on its plans found here caught my beady little eye:
* Proposed mine plan is dependent on, among other things, continued exploration success, environmental and board approvals, completing positive economic studies and the determination that the deposit is economically viable. 
Got that? It says that its plans are dependent on "completing positive economic studies" and of course determine "that the deposit is economically viable" before doing anything expensive and that's fair enough, right? Which brings thy humbleth scribeth to the following, Exhibit B if you like, the development timeline plan from the company's latest corporate presentation (slide 33, to be exact):



It looks for all the world as if CNL.to is going to forget about the fripperies of a Pre-Feas Study (PFS), worry not over the trifles and details of a Feasibility Study (FS) and jump straight from the earliest stage of economic study (PEA/Scoping Study) to a construction decision and then raise its capital and build its mine.

What. Could. Possibly. Go. Wrong?

Just out of interest, the last time Ari Sussman and Vic Wall got together to play at mining, they picked the following as their promo vehicle:
  • A high grade gold deposit
  • In South America
  • Highly promoted to retail with brokerage coverage all around
  • Scant mention of the poor community relations through the development and exploration phase
  • Construction decision made without producing a PFS or an FS

The name of that company was Colossus Minerals. Ring any bells? Remember how that one turned out? Some remarkable coincidences developing to connect the two companies, are there not?

Bottom Line: Avoid CNL.to like the veritable plague.

A pleasant Wednesday melody: Soundgarden; Ty Cobb

Dedicated with heartfelt desire from IKN. Best played very, but very loud and don't forget to join in with the decent singalong opportunity during the chorus.



Just add it on the hot rod death toll

Peru GDP August 2014 +1.24%

Remember that bit when they told you Peru's GDP dip in 2q14 was just a roadbump and 3q14 would be a big improvement?


Why oh why is Marin Katusa of Casey Research ignoring his own clients?

They keep sending him mails asking about what's going on at his sure-fire "next Bakken" top pick PRD Energy (PRD.v), but unlike in late 2013 and early 2014 when he couldn't stop talking about the company and commenting on its every small development or price move, apparently nowadays he has nothing to say and just keeps ignoring anyone who wants to discuss the company.



Why would that be, Marin?

And John Mauldin, why have you been so quiet on this stock, after pumping it to your own flock? Probably just a coincidence.

Geoff Ramsey and Pan-American Post on changes in the USA's drugs policy

This post by Geoff Ramsey in Pan American Post today underscores just why this site should be a compulsory part of any LatAm watcher's reading material. It starts like this...
While a recent statement by top U.S. State Department drug official William Brownfield has been largely overlooked, it could have huge implications for the future of drug policy in the hemisphere.
...takes in this line after quoting Brownfield extensively...
It may not seem like much, but this is a massive change.  Just two years ago, the United States bitterly fought against Bolivia’s attempts to abandon the 1961Single Convention on Narcotic Drugs and rejoin it with a reservation allowing coca cultivation for traditional uses. Now, Brownfield seems to be advocating the exact same approach to the Single Convention, allowing countries greater autonomy and flexibility in their interpretation of it.
...and you're strongly recommended to click through and read the rest. Excellent analysis, today's must-read.

No news on whether Andrew Swarthout of Bear Creek (BCM.v) is taking a pay cut

After reading carefully today's NR from Bear Creek (BCM.v) which sets out the cost reduction initiatives being undertaken by the company that include elimination of the VP Exploration post, general staff reductions etc, I can't seem to identify the part that points to the salary reduction being taken by Pres/CEO Andrew Swarthout on his $310,000 per year salary.

Which is strange, what with Swarthout himself stating that the.. "Company's mandate is to create shareholder value, and we are committed to conserve cash". Maybe he just forgot.

And yes Mister Kaip, production does matter

On Thursday October 9th, it just so happened that two similar sized silver mining companies both reported their 3q14 production number, within minutes of each other pre-open. 

As noted on IKN at the time, Endeavour Silver (EDR.to) (EXK) put in a crappy quarter. Script at the time:
And this is a crappy quarter from EDR. Go on, remind me again how much Brad Cooke and EDR paid for El Cubo? And what about that cool plan they had to re-work the asset and make it fabbo and productive and things? Seems so long ago, because since then it's been excuses and "any time now" BS that's failed to translate into anything of worth. Production is now dropping sharply at all three mines and EDR looks set to dump even further.
As noted on IKN at the time, Fortuna Silver (FVI.to) (FSM) put in a strong quarter. Script at the time:
And this is a very good quarter's worth of production from FVI, no matter which angle you look. Top job.
Here's the price chart that shows how things have been since then:


Which just goes to show that Andrew Kaip of BMO is a dumbass as on October 10th, Kaip called them both market perform but gave FVI (at $4.67) a $5.75 target (+23.1%) while after delving into his magic box of tricks for a while deemed it correct to give EDR (at $4.92) a $6.75 target (+37.2%). How much they paying you, Andrew? Or more to the point, exactly who is paying you?


Your latest precious metals producer misses: First Majestic $AG (FR.to) and Argonaut (AR.to)

First Majestic (from yesterday):

Excuses included re-synching material at La Encantada (which looks for all the world like reprocessing more tailings again, what with the recovery drop) and...errr...other stuff. Crappy quarter.

Argonaut (from this morning):

At first eyeglance it doesn't seem too bad, but this was supposed to be the quarter when AR.to had worked through its glitches and returned a strong production number. didn't happen folks, and as a result they've dropped 2014 guidance from 135k-150k to 130k-135k. Let's all have a good laugh when they claim to have "met guidance" in 2 1/2 months' time.



10/14/14

IKN explodes another stereotype myth about LatAm

With the help of the OECD.

In its 2014 'Employment Outlook' the OECD lists its 34 members by the number of hours worked on average per employee in the countries in question. Here's the chart from the results and...


...you can forget about that stereotype Mexican siesta dude with the big hat and the sarapi, as Mexico averages 2,237 hours of work from its employees per year and is the number one hardest working country.

France, Denmark, Norway, Germany and Holland? Easy life.


Krugman bottom ticks Bitcoin

Never take trade tips from economists. I mean, Krugman's smart about theoretical economics, but he's the the classic example of mission creep and one annoying motherfucker when he lays on the overriding and all-encompassing knowledge about everything that is connected with money and how it works. Take for example the way he stays totally schtum about Bitcoin for nearly a year and then decides to run his "ha ha ha, you all stoopid" note on the thing on October 4th 2014, full of all the usual arrogance and 

"So how’s it going? Bitcoin prices are down by two-thirds from their peak, and..." 

dumbassery.

But wait, what's this?


Oh look, Bitcoins just stuck in a 35% rally with the bottom on...October 5th!

This post is less about Bitcoin (you can have your opinion pro or contra the cryptothingy, I don't care much) and more about the dangers of listening to people who are smart about one thing and because of that, get these delusions that they're smart about everything. A better definition of plug dumb stupid about life is harder to find.


Chart of the day is...

...ten days of copper:



You go girl.

The IKN Weekly, out now



IKN283 has just been sent to subscribers. Nothing about Nevada Copper included. Nothing at all.

10/13/14

Lithium



Who remembers lithium?
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct 13, 2014) - RB Energy Inc. (the "Company" or "RBI") (RBI.TO) (RBEIF) announces that, in light of the Company's current financial situation, to facilitate an orderly restructuring of its business and operations, the Board of Directors of the Company has approved a filing on Tuesday, October 14, 2014, for an Initial Order to commence proceedings under the Companies' Creditors Arrangement Act (the "CCAA") from the Quebec Superior Court. The terms and conditions of the restructuring have not yet been determined.
What I remember of the lithium pump was not buying into it for a single second and watching with mirth as the for-hire promo pump bullshit artists lined up to sell you all a whole bunch of freshly squeezed Li equities. Why don't you do some Googlin' and find out their names, it'll do you a lot of favours when it comes to the next cycle of bullshit.

I've deleted myself from Twitter

News for a few of you.

It may be a permanent move, it may turn out to be a temporary thing, but I want to sit back for at least a few weeks in order to gauge the cost/benefit of being inside its somewhat time-sapping non-stop feed of news from a quieter place. If I return, it'll be under a new handle.

What happens in the Brazil second round run-off election in the next two weeks

First, be clear about the bottom line: Dilma will win.

With that in place, here's how the the next two weeks running up to the October 26th vote will unfold:
1) Aecio Neves will be promoted as the "business friendly" alternative.
2) Journalists and op-ed writers smell a story and the obvious advantages of playing up a "dramatic" and "tight" and "anything could happen" election. The media feeds on itself, doubt and excitement grows among the chattering classes.
3) Polls show Dilma and Neves as either neck and neck, or Neves in a slight lead, depending on the company and/or day.
4) The Bovespa moves up on speculation, volumes high, action volatile and choppy.
5) Houses like Goldman Sachs will call Neves as slight favourite in public declarations.
6) At some point next week, maybe Tuesday 21st or Weds 22nd, the Bovespa will drop heavily as the plug is pulled on the speculative pump and profits taken by the people who read Brazil correctly, instead of relying on wishful thinking.
7) Come Friday 24th, whispers and off record reports of "momentum shifting" will do the rounds.
8) Sunday 26th, Dilma wins 52% to 48% of valid votes.
9) Big fat Bovespa sell off Monday 27th
10) Life returns to normal.

Bookmark this post.


10/12/14

The resource curse, Evo Morales edition

After a Twitter exchange earlier today, I've been thinking about this whole concept of 'resource curse', what with it being one of the criticisms still levelled at Bolivia for its dependency on gas revenues. The basic argument goes something like, "Evo wouldn't have been a success if he didn't have the gas revenues", then morphs to, "and Bolivia's still very dependent on the gas revenues, where's the diversification?", which implies in the words of detractors that Evo's just been lucky (and of course with the assumption that one of these days his luck will run out).

Let's start with the easy one: If Evo hadn't nationalized YPFB (and many will recall as I do the "it'll never work" criticisms at the time, all from the usual suspects) the gas revenues would still be leaving the country and placed in the treasuries of large, private oil and gas companies. Instead, the dollar revenues go to the Bolivia Central Bank, which has seen its international currency reserves balloon in the eight years of Evo. He was elected because he said, out loud, that if made President he'd stop the money being made by YPFB from leaving the country by nationalizing the company and then use that money for the greater good of the nation. Eight years later, here we are.

As for that diversification, what makes you assume that you need to diversify into secondary or complementary industries in order to satisfy the appetites of the Economic Gods? Why does "diversification" only conjure up the image of physical structures, such as factories or new plants or new industrial sectors? It strikes me that investing in a country's population is at least as good a diversification as setting up a phosphates plant next to a natgas supply, or insisting that somebody who wants to buy Bolivia's lithium builds the battery factory in the country, too. It's probably better in the long run in fact. After all, you invest in children by giving them free school meals, which means they're encouraged to go to school and stay there, which means they get to read and write and add and subtract and all kinds of other things. Or pregnant mothers get a cash payment for turning up at a hospital clinic for their regular pre-natals, which get them into the formal heathcare service for the first time, which means more living and healthy babies. That also strikes me as an excellent way of diversifying a country's wealth, the only difference being the capital isn't controlled by private concerns that are focussed on making profits for their shareholders.

After it went round my head for a while, the conclusion drawn isn't whether a country has or has not a source of wealth to tap, it's much more about what the country's leaders do with the revenue coming from the resource be it renewable or not, primary or tertiary, any other combo you'd care to imagine. Greedy and self-centred leaders are the curse, not the resource nor any cash delivered by it.


The only vaguely dramatic thing about Bolivia's election today

Yes we know Evo's going to win and we know Bolivia's a big success story under his government and we know he's changed the rules to run again and isn't that naughty and we know that the North much prefers to quietly ignore Bolivia's strong growth and improved living standards on a multitude of criteria because it's all a bit embarrassing to be shown up as wrong now isn't it mister capitalism?

La la la. No, the nice bit today is when people started to notice that some of the ballot papers for the election have got the name of the country wrong:


Yes, that's one of the millions of official vote papers printed by the government office in question and already in at least three locations they're reported as having Bolivia's official country name as "Estado Plurinominal de Bolivia", when it is in fact officially and correctly "Estado Plurinacional de Bolivia*". So, apart from the country getting the name of the country wrong, all's in order. And here's me complaining about people up there writing Columbia instead of Colombia.

*The same way as France's official name is République française, for example.


Another Happy October 12th, Americas

And the same cartoon to commemorate the day as this time last year, because I like it.



So whatever you label the day, traditional old-time or politically correct new-time, have a good one.