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11/29/14

No Breaking No News on No Ebola News

No white people dead from ebola.

No news.

The end.

Postcards from Pripyat: A drone over Chernobyl

This three minute video, with much of it shot from a drone flying over the Chernobyl area, is stark and thoughtful and beautifully done and highly recommended as your weekend viewing of requirement.


Learn more here, including script from its creator Danny Cooke.

11/28/14

The Friday OT: Red Hot Chili Peppers; Desecration Smile

The single best late-era Chili Peppers track.



Anthony channels Neil Young and sings well for a change.
Flea and Chad drive it well.
John is simply inspired. My stars this man can play the guitar. I forget the name of the guy who replaced him.

The vid is ok, no great shakes, the music is the group at peak.

Gringos and potatoes

I was sent this link this morning, a WaPo WSJ story about how food smugglers who try to bring in special stuff via JFK Airport are caught by the beagles (literally), with Peruvians trying to get in specific varieties of potato being the central feature of the note. All well and good, Peruvians in the USA want papa amarilla to make causa (can't blame them for that), Black Friday whimsy report in the bizrag, lah lah lah, until we get to this quote at the end:
Blair Richardson, chief executive of the U.S. Potato Board, an industry group, says it “doesn’t make a lot of sense” to import potatoes from Peru because U.S. growers now produce varieties that share roots with ones in the Andean country
Dear gringos: All potato varieties share roots with ones in Peru. All of them. The fact that you've taken the original product, morphed it into something that tastes like cardboard and now in the 21st century only get to know what a potato can taste like when you get to eat one from its place of origin is beside the point. They all come from Peruvian roots, every last one of them.  

Chart of the day is...

...silver spot price, three years:



We closed yesterday at $16.47. This morning and two hours before the open, I see $16.07/oz as a marker a couple of minutes ago. To the people who still think there are silver miners making money at these prices, the message is to enjoy those 4q14 financials when they turn up next year.

11/27/14

Si señor

Soy de River


The PRD Energy (PRD.v) further house of pain, right on cue

Pre-open yesterday morning this humble corner of cyberspace explained just why PRD Energy (PRD.v), a stock already pummelled to pieces in 2014*, was headed even lower. Here's what's been happening in the meantime:


And that's a mean old time.

Any word from Marin Katusa about these results, Casey flock? And let us recall, this wasn't some ordinary reco, this was the Casey Research screaming shouting top of roof "next Bakken" promotion that had them all drooling and signing on to his newsletter this time last year. Strange how he's not as enthusiastic about telling you every move in PRD.v these days, innit guv...


*now 74% down year to date

To collider!

The first time I read it, it was funny. I'm now on the 8th or 10th and it just gets better and better. Improve your day with this work of cartoon genius.

Insider selling by the CEO of Fortuna Silver (FVI.to) (FSM)

A list of facts:

  • On November 18th, Fortuna Silver (FSM) (FVI.to) CEO Jorge Ganoza exercised 36,600 of his options priced at $4.03 and sold them all at prices between $5.20 and $5.30.
  • On November 20th, Ganoza exercised 39,200 of his options priced at $4.03 and sold them all at prices between $5.20 and $5.22.
  • On November 21st, Ganoza exercised 110,400 of his options priced at $4.03 and sold them all at prices between $5.21 and $5.33.
  • On November 24th,  Ganoza exercised 190,000 of his options priced at $4.03 and sold them all at prices between $5.22 and $5.53.
  • On November 25th,  Ganoza exercised 136,000 of his options priced at $4.03 and sold them all at prices between $5.20 and $5.51.

In total, in the space of one week FVI president and CEO Jorge Ganoza has exercised 512,200 options of his company, priced at $4.03 apiece, and sold them all into the market at an (IKN estimated) average price of $5.30. In other words, around $650,000 in pre-tax profit. What does Fortuna Silver's CEO know about Fortuna Silver that we don't? 

Data from here.

PS: Another 20,500 sold November 26th and filed 27th, same story. Throw another $25k on the pile.

Panoro Minerals (PML.v): The Mystery of the Missing PEA

Yesterday Panoro Minerals (PML.v) filed its 3q14 financials, which told us of the $9m held in treasury (after raising a net of just under $6m in July), working cap of $7.6m and the usual bits and bobs found in an exploreco. It also told us that the PEAs (aka scoping studies) for its main Cotabambas project as well as its second string Antilla project were advancing and they were looking to complete them in 2014.

When it comes to the main Cotabambas project in particular, IKN sincerely hopes you're not holding your breath on this one. Back in April 2013, the Cotabambas PEA was going to be delivered in December 2013. But December 2013 came and went without a whisper. Which was odd.

January was mouse-like in its tranquility at PML headquarters too, but then on February 26th we got statements made by PML.v CEO Luckedout Shaheen to Northern Miner, just before PDAC:
So far, metallurgical work on the sulphide component of the deposit shows it produces a “clean and high concentrate” grading 27% copper, 11.9 grams gold and 152 grams silver, without any arsenic or mercury and with low levels of lead and zinc, Shaheen adds. The preliminary economic assessment (PEA) is due out in July.
And as a slight sidebar we also got in the same interview that day...
With $10 million in its treasury, Panoro has more than enough cash to finish the two PEAs and take it well into next year, Shaheen says
...and because they didn't need any more money this year they ran a $6.5m placement in July 2014. Because of a juggalo clown riding a unicorn. Next came the 2013 year end filings, dated April 25th 2014, which told us...
Panoro is continuing its exploration at the Cotabambas project with geological mapping and geochemical sampling, while a Preliminary Economic Assessment (PEA) is underway by AMEC Americas Ltd. Metallurgical test work is in progress under Amec´s supervision. The PEA is expected to be completed by mid 2014.
...that that elusive PEA would be with us "by mid 2014". But again time slipped away from us. Luckily we didn't have to wait long until new information was available as reported by Laurentian Bank securities in its update on PML.v in July 2014 (author Christopher Chang). They wrote after consulting with the company:
 "Preliminary Economic Assessment Anticipated in Q3/14: Panoro plans to announce the results of its Preliminary Economic Assessment (PEA) for its wholly-owned Cotabambas copper-gold-silver-molybdenum project in Q3/14"
Ah, but you'd have already noticed that today is November 27th, nearly two months have gone since the end of 3q14 and we still have no PEA for the Cotabambas project. So to re-cap on this:
  • In April 2013 PML.v said the Cotabambas PEA would be with us in December 2013
  • In February 2014 PML.v said the Cotabambas PEA would be with us in July 2014
  • In April 2014 PML.v said the Cotabambas PEA would be with us in mid-2014
  • In July 2014 PML.v said the Cotabambas PEA would be with us by the end of September 2014
  • In November 2014 PML.v said the Cotabambas PEA would be with us by the end of 2014

This is definitely nothing to do with this company's management team being liars, con artists and 100% full of shit, so what else could it be? Darn, I'm confused.

A Christmas gift idea

Check out this 30 second blurb for 'Gods, Gachupines and Gringos' by Richard Grabman, the excellent and most readable history of Mexico written by Mexico resident, history expert and owner of the blog The Mex Files.



To learn more and order, check out his website, or Amazon, or fine booksellers anywhere. A great book.



Phillip Hughes

A terrible thing today. Part of the meaning of sport is that you don't die doing it, it's supposed to be a harmless proxy. Therein lies immense sadness. 

11/26/14

Naughty naughty, Yamana Gold (AUY) (YRI.to)

By trying to illegally influence legislators during a key debate on mining laws in Chubut province, Argentina last night, Yamana Gold (AUY) (YRI.to) has done itself way more harm than good in its everfail efforts to get Suyai moving forward. This is just plain funny.



Hilarity ensued.

Parsing Olivier Garret of Casey Research

Olivier Garret has just sent a mailer out to his merry flock, that tries to explain just why the Casey Research $20 per person "Market Gonna Crash Act NOW!" call of October 21st isn't going quite the way they imagined.

IKN parses his mail for you below. Olivier's in black, IKN's in red.

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Dear Reader,
Most of you will recall our recent warning to prepare for the Crash of 2014. In that communication, I alerted you to the extreme danger facing global markets and the technical indicators pointing toward an imminent and significant market correction.

We all do. In fact we’re still laughing about it.

Our recommendations were to:

  • trim your portfolio to only its strongest stocks, the issues with the most emphatic fundamental reasons for owning them;
  • hold the resulting cash in US dollars;
  • keep your gold;
  • but buy "gold insurance," in the form of puts on GLD, to counter potential weakness in precious metals and related stocks; and
  • buy long-term Treasuries as a speculation that interest rates would move still lower.

Yup, that was the bit we laughed about the most, but a nasty bout of selective memory going on here, Olivier: What about the puts you told people to buy that have gone in exactly the wrong direction? Those slip your mind?

As of today, the Crash of 2014 I warned of hasn't happened. Yet.

Early = wrong, period.

Everyone at Casey Research knows that we don't have a crystal ball. We do have solid analytical skills and a realistic view of the world on our side,

No you don’t

 but we can't predict the exact timing of a market crash.

So why did you sell a $20 special alert that told people to act “NOW”. That’s what’s called trying to predict exact timing.

We can only assess the risk of one occurring.

And fail miserably at it through poor analysis and drawing the wrong conclusions

 We continue to rate the risk as high, given the now worldwide folly of limitless QE, currency debasement, spiraling government debt and investor leverage, and the metastasizing tangle of financial derivatives.

Fuck off

It is not going to end well for conventionally thinking buy-and-hold stock market investors.

Ditto

Adding a sense of urgency to long-held concerns about such fundamentals was the number of critical technical indicators that turned bearish this fall.

That were in your imagination.

All of a sudden last month, market players seemed to wake up to the geopolitical and economic worries they'd been ignoring. They got spooked. Sentiment turned extremely bearish, but it wasn't just a matter of volatile investor emotions, and it wasn't just the long-scheduled wind-up of the Fed's Quantitative Easing. The market seemed to be waking up to the plain facts and recognizing them as frightening.

Ah, let me guess. Casey Research tipped off the Fed, the European Bank, Abe in Japan and fortunately they saw it your way, acted quickly and headed off a world financial collapse. All thanks to your early warning. That right?

Then the Federal Reserved started backpedaling on its plan to end QE immediately. That was no great surprise, but the announcement from the Bank of Japan that quickly followed was a surprise to almost everyone: a commitment to purchase all the bonds that Japan's high-deficit government wanted to issue, i.e., QE from here to over the rainbow. The largest Japanese pension fund promptly announced that it would diversify into equities - and not just Japanese stocks, but US stocks as well. That was all it took for Wall Street bulls to come raging back. Mario Draghi topped it all by signaling that the European Central Bank would jump on the QE infinity bandwagon. Now, a few weeks later, markets are making new highs.

Yup, that’s right. So who do you have slated to play Doug Casey in the Miniseries? Please don’t say Brad. Please let it be Pee Wee Herman.

So while 2014 isn't over yet, it appears I was early with the warning of a crash.

Appears? Early? Try “I was wrong”, because we’d really enjoy one single sentence of honesty and sincerity from you cowards before the end of the decade.

Of course I was. 

C'mon Olly...say the word...c'mon...not difficult..."wrong"...starts with a Ru sound...you can do it...

An early warning is the only kind likely to do any good.

We repeat the law of markets: Early = wrong, period.

It's not fun - and for some subscribers it's been painful - to watch the stocks they sold keep rising.

The idiots that acted on your pathetic panic call deserve everything they get.

But the alternative to getting out early is to stay fully invested and hope you'll get out at the last moment, just as the crash is starting.

The binary world of morons. You’re either with us or you’re against us. Christians versus infidels. You cannot make any choices other than the ones we offer you. Fuck off.

 Many investors are telling themselves they're going to do just that - so many, in fact, that the eventual result will resemble one of those horrible stories of soccer fans getting crushed as thousands stampede and jam the stadium exits. If you judge that trouble is coming, leave the stadium early, even though that means missing part of the match.

What. The. Fuck? The Casey full time and highly paid copywriters take the day off, did they?

Leaving early entails a cost in foregone profits, but all in all, for most readers the cost has been modest. Our call for asset deflation, including commodities and energy, has been correct; we've avoided losses in that area. Staying in US dollars rather than any of the competing paper currencies has also saved us some losses. By holding on to our strongest stocks, we've profited from the market's overall rise. And we still expect long-term Treasuries to do well next year.

Woah, stop. You make a 100% incorrect call on a market crash and you’re now trying to windle out of it by talking about other trades that failed to make a loss?


I want you to know that all of us at Casey Research drink our own Kool-Aid

OK, that bit made me laugh out loud. You really, but really need to look up the origins of that phrase and what it really means. Really.

and invest according to the recommendations we publish.

No you don’t. You front-run them.

 We believe that the last round of unprecedented central bank actions has - at most - only postponed the inevitable for a little while longer and has done so at the cost of making the inevitable even messier.

The same spiel from Doug Casey since 2008. Much longer to wait, is there?

We are confident that we and our subscribers are positioning themselves well by owning the best companies in recession-proof sectors, and lots of cash and gold.

Fuck off.

 That way, we won't risk getting crushed in the exits, and while we wait for the crash, we'll have a free hand to exploit the speculative opportunities that Casey Research works diligently to identify.

The free hand is for masturbation.

The best of those opportunities may soon come to us from the resource sector. We likely are close to a final market capitulation for junior resource stocks, which could coincide with tax-loss season in the Canadian markets and the need for junior stock funds to raise cash to pay for year-end redemptions by their investors.

 Got your prayer beads at the ready?

 But don't let those opportunities draw you back toward a portfolio that is fully invested, with little or no cash. The unprecedented market backdrop of QE everywhere and QE all the time is pushing the world economy toward more and more leverage and hence exposing the markets to more and more danger.
Fear's brief October appearance on Wall Street wasn't a false alarm.

It was merely false. The same word as your panic crash NOW call, in fact.

All the most serious market crashes have been preceded by such early tremors.
Remember that the October 2008 crash triggered by the Lehman bankruptcy was preceded by: (i) Bear Stearns' $2 billion loss reported in June 2007; (ii) the Northern Rock collapse three months later; (iii) the distress sale of Bear Stearns to JP Morgan in March 2008; and (iv) the bankruptcy of IndyMac in July 2008. The markets, encouraged by Federal Reserve assurances, shrugged off every one of those warning signs. Then the market cracked.
So while today the urgency of the matter seems to have subsided, it would be a grave mistake not to prepare for a crisis that will make 2008 look like a walk in the park. We'll be ready.

It would be a grave mistake to take anything you say seriously, Garret

On behalf of Casey Research, I wish all our American subscribers a happy Thanksgiving, and to all of our subscribers, I extend my best wishes for the coming holiday season.

And after acting on our call in October, we hope you have enough money left for a turkey.

Sincerely,
[signature]
Olivier Garret


UPDATE: Reader MP sends in this:

PRD Energy (PRD.v) update, 3q14 financial results edition

Hands up all those who remember the way in which Marin Katusa of Casey Research pumped PRD Energy (PRD.v) to his bleating flock as "The next Bakken" and the way that other blowhard John Mauldin told people to get on, it was $1.10 or $1.20 at the time.

You got your hand up? Oh good me too, so let's check in on PRD.v's financial results for 3q14, posted last night. Let's begin with production and the way PRD.v's only well produced oil at the rip-roaring rate of 33.6 barrels per day in 3q14 (no, that's not "thousand" or hundred", that's thirty-three point six barrels per day). 


Tell me Marin, is that good or bad?

And let's not forget, that oil is in a JV with Suez so PRD.v only gets its share of that production. I get the feeling this one isn't performing the way Casey Research confidently predicted. As for the balance sheet, thanks to the cash raised in early 2014 PRD.v has just over $20m in the treasury and a working cap of $18.592m as at September 30th.


That cash raised added to the share count of course, PRD.v now has 143.908m shares out.


According to the 3q14 MD&A, the next thing PRD wants to do is...
"The Company plans to drill two to three deviated wells from the Boerger 7A well site in the second quarter of 2015, as the next stage of development for the Boerger pool..."
...which says there's going to be nothing doing for the next two quarters minimum. Then afterwards PRD wants to try again on a failed well...hey, what could possibly go wrong?

In other words, its assets aren't worth squat and the cash it has left values the company at around 12c or 13c per share. That residual value is a mile below its current 32c share price, so those of you who have hung on Katusa's words until now in the hope that it'll turn around have more pain coming your way.



Think of it this way; Darwin was right, you believed a Casey Research bullshit hype and evolution is what happens to the non-fittest, physically or mentally.

Chart of the day is...

...the copper/oil ratio (using WTI):



Back in 2012 this spiked to 0.04X because copper was spiking to $3.90/lb and trading happily at $3.40 to $3.70. This time it's because of the way copper's holding tough at three while oil...well, you know what that's been doing since September.

So copper's relatively expensive compared to oil again. But it's not weirdly expensive and as seen in 2012, it can hold this ratio quite happily for weeks on end.

11/25/14

Vancouver Venture's Exchange Prediction

Five more miserable years, right here. Good anecdotals, backed up by numbers. There's a lot of pain to crawl through in the mining scene says PS Dave and his lunchtime drinking pals.

IMPACT Silver (IPT.v) 3q14 numbers

Time playing with numbers on a slow news days, IMPACT Silver (IPT.v) reported its quarter this morning edition.

Frankly they could have been a lot worse. Which surprised me. They're going to have a tough time in 4q14 with the lower silver price, plus it looks as though they're hi-grading (though the company says that grade fluctuates under normal circumstances and two mines have worked into higher grading material, so maybe doubt can be offered). But they're keeping head above water and ops got back to FCF+



Mi más sentido pésame para Marcelo Gallardo y toda su familia

Aguanta Muñeco. Tu otra familia está para vos.

Bear Creek (BCM.v), Peru, law suits, Puno elections (from IKN289)

Here's what subscribers read on Sunday about Bear Creek Mining (BCM.v) and its lawsuit with the government of Peru over the Santa Ana project, plus an update on how the run-off election for governor of Puno region, set for a December 7th vote, is going.

You get to read it Tuesday morning.

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Peru: More on the Bear Creek Santa Ana developments
On the blog Friday I reported the development in the Bear Creek (BCM.v) Santa Ana vs Peru government case, in which the company had reportedly dropped its court action against the State (33). It turns out to be true, but the reason behind the BCM.v is more straightforward than first met the eye. Even though local anti-Santa Ana leaders in the Puno region were quick to claim a victory on the back of the move (34) it turns out that the dropping of the case in the national courtrooms was a requirement for the case to continue and be heard in the International CIADI/ICSID tribunal (the body attached to the World Bank that hears international arbitration cases and gives unappealable verdicts). In the words of this report in local Puno media Pachamama (35) on Friday evening (translated) “...a spokesperson for the Canadian mining company told Pachamama Radio that under the Free Trade Agreement (FTA) between Peru and Canada, the company had taken its case to the CIADI tribunal in order to resolve the controversy”. However, the spokesperson said that in order to hear that case at this international court, all judicial processes in Peru had to be stopped, which is why the company asked for the case it had brought in 2012 against the Mining and Energy Ministry, The Defence Ministry and the National Executive of Peru to be stood down.

To my surprise BCM didn’t make any sort of announcement about this material event last week. It should do soon (unless the Canadian authorities are even more lax than I suspect) and when it does, we should expect them to state that they are now concentrating 100% on the international arbitration body (as well as their absolute confidence in winning etc etc). Although the shelving of the Peru court case doesn’t preclude an out of court settlement between the two parties, we should now expect the dispute to go the full distance at CIADI/ICSID and that’s a question of perhaps a couple of years in realistic terms before a verdict is reached (though a judgment in 2015 isn’t out of the question). Bottom line: Santa Ana BCM vs Peru continues, but don’t hold your breath.

In other news, polling in Puno region has Luque on 54% and Aduviri on 46% for the December 7th run-off vote. That’s closer than I expected (though the polls are not particularly reliable in Puno region), but fits with word received that Luque has been keeping a low public declarations profile and allowing Walter Aduviri to make more of local media channels to promote his cause and detract from that of his rival, as he’s been using plenty of negative attacks. The two candidates will meet next Sunday evening November 30th in live debate, at which point we’ll have a clearer picture. 


11/24/14

Kevin McArthur, Pres/CEO of Tahoe Resources (TAHO) (THO.to), turns a chunk of his shares into $10m cash

Via the magic of capital markets and insider sales. Ka-Ching, baby.



He'll tell you he deserves it. What colour Ferrari, Kev*?


*True fact: people named Kev love Ferraris

Gran Colombia Gold (GCM.to) and Colossus Minerals (ex-CSI.to)

Back in August this year, this humble corner of cyberspace mused on the then-market cap of Gran Colombia Gold (GCM.to) by stating...
"The fun starts in November, when the gold notes start coming due. We can only hope the creditors behave themselves, form an orderly queue and don't start squabbling over who gets paid first. Impressively, this thing still has a market cap of around $35m. That won't last, though."
...and that little prediction has (horror of horrors, Fino) turned out to be true. As I checked out a couple of screen filters this morning I noticed that GCM.to was now down to a $15m market cap and there was something about that number which...what was it...reminding me...of....Aaaah yeah that's it, this post dated December 31st 2013 about Colossus Minerals:


CSI then proceeded to disappear up its own hind quarters, victim of poor operations and heavy debt. Remind you of any current cases out there? Yeah, me too. 




Chart of the day is...

...this.



There is no spoon.

11/23/14

The IKN Weekly, out now



IKN289 has just been sent to subscribers. Plenty about Peru political events as pertains to the mining industry this week. Plus analysis of a couple of small juniors and coverage of our preferred stocks, of course. 17,200 words, 35 pages, guaranteed to break the ice at parties or the Leafs rink.

Que duro es ser hincha de River.

The rise of bad debt in the Peruvian banking system

This morning your humble scribe read that the incidence of bad debt in the Peru banking system reached 2.47% in October 2014, according to the figures from the nation's overseeing watchdog body, ASBANC. That sounded like a record figure to me, so it was off to the ASBANC page to check*, and...


...yup, that's a new record level of bad debt in the national system. See a trend there, perchance?

As for a nailed-on prediction: It's going to get worse. And it'll get a lot worse when the lower scocioeconomic strata work out that it's in their best interests to declare themselves bankrupt and start over again, instead of paying the legalized shark rates for their domestic white goods that the rip-off banksters have been charging them. 

*if you care enough, choose the "colocaciones" option, then "morosidad" option. Then download the XLS.

Survey results

It's Sunday morning November 23rd, 302 people have played, rather than needing six weeks to get a decent sample for the survey we needed six days, time to draw a line under this one. Here's how it finished:


Bitcoin got 13%, Apple shares got 39% but gold did indeed finish top, with 47% of you believing that an ounce of the stuff will be worth more than 10 shares of AAPL or three bitcoins at the end of 2015. We'll see. Silly survey over.