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12/20/14

Terry Lynn Karl: "Falling Oil Prices Could Rock Canada's Politics"

I was mailed and reco'd the link to this report earlier today by A. Person (far too well known in certain circles to be named here) who happens to be a friend of Terry Karl's. I'm glad I got the link too because it's a very perceptive piece from a peer-respected expert on the subject. Recommended reading for The Great White North, for LatAm watchers and OPEC-watchers too, as the effects of low oil prices on Venezuela, Russia, Saudi Arabia and OPEC in general are also in focus during this Q&A. Here's how it starts:

What do the plummeting oil prices tell us not only about our near term economic future in Canada, but the political fragility of the world's petro states?If Canada fully joins the petro state club, as our prime minister and his party desire, is oil's volatility just the cost of doing business, or a threat to our nation's well-being?The ideal person to ask is Terry Lynn Karl, one of North America's foremost experts on the politics of oil. The Tyee recently caught up with Karl, who teaches at Stanford University and lives in San Francisco.

whole thing here. Very good stuff.

12/19/14

The Friday OT: Robert Earl Keen; Merry Christmas from the family

The seventh year running, I believe:



It's still the best Christmas song ever, no matter how many times I try to stuff it down your throat. Merry Christmas one and all, hope you have a pleasant one with your families, too.

McEwen Mining (MUX): Mr. Market changed his mind

In "Remind me again why you think McEwen Mining $MUX is worth U$950m, mister market" dated August 6th, the evening of MUX's 2q14 filing, we wondered once again just why the market valued this company so richly compared to peers. It's always been a mystery here at IKN Nerve Centre as to how Robbie Mac could keep this highwire act going. Four months later, things have changed.



The cult of personality is notorious for its limited shelf-life. Ian Ball got out at the right time.

Chuqui: Going underground

Chile's State mining company Codelco, still the biggest copper producer in the world, yesterday approved and signed into effect its biggest ever investment. The Chuquicamata mine is going to become an underground operation and it's going to cost U$3.3Bn to do the job. Some of the stats are pretty darned impressive about the job in hand such as the 180km of underground tunnels it'll start with and how they'll end up at over a thousand about 40 years down the line when the resource is depleted. But the one that really boggles the mind is the ventilation shaft they're going to build, which is 11m wide and a 918m deep, i.e. seven times the height of the Eiffel Tower (modern society's standard unit of measurement). Not a hole you'd want to fall into. More here for those with the necessary Castilian knowledge. 

It's notable the way the big players are still spending big on long-term copper infrastructure in Chile. Add in the $7Bn+ that BHP is ploughing into La Escondida (world single bigger copper mine), via site investment plus $3.5Bn or so on a desal plant that means it gets to run on seawater in the future. All at the same time as BHP warning that 2016 (a year out) will be one of the low production years for the mine...these dudes are looking to the serious future and don't share the marketwatcher's neuroses of every up or downtick.

Anyway, the Codelco news this week gives me the excuse to stick this one up here. Great tune. 

Chart of the day is...

...copper:


It's the chart I've been watching most closely all week and as a metals long yeah, it's been with a concerned eye. Copper futures have traded under $3/lb all week and threatened to break under the (what seems like) key $2.80 level, though admittedly trading and volumes ahve reportedly been thin in this pre-Christmas period (normal). This morning's brought a little relief, but it's only a little and there's still plenty to watch here. A far more important chart than anything around gold.

12/18/14

Two questions about Anglo American at Michiquillay

Question One: Who's told you that Anglo (AAL.L) (AAUKY) is abandoning Michiquillay?

Answer: Just about everyone in the trade press these last few days.

Question Two: Who told you that Anglo (AAL.L) (AAUKY) would abandon Michiquillay six and a half years ago?


Yup that's right. And considering the cavernous block of time between today and this May 2008 post on Michiquillay and its serious community and political issues, although the details may have changed (and Quellaveco has managed to survive the cut) the general thrust of the post has held together very well. 

just sayin'


Music for a Thursday afternoon

Impossible not to love...



...Rocks, by Primal Scream.

This makes up for tomorrow's Friday OT.

Breaking News: Sellside mining analysts shock the world by daring to state...

...that mining stocks will have a good year in 2015. Kitco with all the details in its current site-leading top story exclusive, right here. And in other news:
  • The US Automotive Retail Chamber of Commerce today said that it's a smart idea to buy a new car in 2015.
  • The potato marketing board of Idaho today stated that potatoes are delicious, nutritious and you should eat more potatoes.
  • Scientifically based findings in a groundbreaking medical report sponsored by the World Chocolate Council show overwhelming evidence that eating chocolate is good for you, helps weight control and stimulates a higher sex drive as well as imparting more pheromonal scent into the air arround you that will immediately attract the more beautiful and otherwise unattainable members of the opposite sex.
  • The Tree Frog Society of Madagascar predicts a threefold growth in the popularity of tree frogs in 2015.
  • The Campaign To Prove That The Pope Is Catholic today released susbstantial evidence to support the case that the Pope is indeed Catholic.
  • The Fur Coat Club of Canada today released experimental results using cutting-edge brainwave reading technology that proves beyond reasonable doubt that small furry animals enjoy being trapped and killed in large metal trapping devices and that people should take this evidence into account when shopping for their next warm and luxurious winter coat.


We could continue. Go fuck yourselves, mining anal ysts.





By nastily and unfairly and horribly picking on one just one bullshit airbag zero-chance junior exploreco IKN offers insight into many others

The object of our affection and love is Rokmaster (RKR.v) though to be (un)fair, the company brings it on itself by publishing a NR of this type today:

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Dec 18, 2014) - Rokmaster Resources Corp. (TSX VENTURE:RKR)(RKR.V) ("Rokmaster" or the "Company") is pleased to announce its exploration team has made significant progress in narrowing its search for a silver-gold property having near term production potential. Our recent exploration initiative has culminated with the detailed evaluation and identification of three contending high quality properties. Two have near term silver-gold production potential with exploration upside and the third property is currently in small scale production. All three properties are available for acquisition and well located with existing infrastructure in stable jurisdictions in the Americas.

What The Fuck Was That? I mean, even if this identifier of top class rockery has managed to see something that nobody else has ever seen, it has 46.75m shares out that are worth 1.5c each (mkt cap 700k), as at 3q14 it had $25k (not M, that's a K) in the bank and a working cap deficit of over $1.1m so how is it going to get a hold of one of these "high quality properties" without diluting out shareholders to the end of the planet Zog? Are you seriously expecting us to want in on a failed company because it's teasing us about the potential of the next thing it's seen?  As noted just the other day...

Do
Not
Feed
The
Animals

These companies may or may not deserve to die and frankly I don't care. I don't care whether AM Gold or Rokmaster's in the right over Pinaya . I don't care whether RKR has identified the next Yanacocha. I don't care whether its board of directors happen to be jolly fine folk and never miss the opportunity to help old ladies across the street. Indeed RKR and its ilk (and there are hundreds) may not deserve to die, but they need to die. And the sooner the better. Pack your bags, it's going away time. Rokmaster, fuck off.

The fundamental interconnectedness of all things

"I believe that all things are fundamentally interconnected, as anyone who 
follows the principles of quantum mechanics to their logical extremes 
cannot, if they are honest, help but accept. But I also believe that 
some things are a great deal more interconnected than others."
Dirk Gently's Holistic Detective Agency, Douglas Adams, 1987



So the Russian Rouble Rallies* and the Dow futures pop and all is right with the world. Which begs the question for those of you who've been gloating at the Russia market collapse...

Do you seriously want Russia to have internal problems? Seriously?

...because if you do you know fuck all about history. It stands to reason that the world need a stable (or relatively so) Russia for its own greater and wider general stability. So suddenly Putin's currency stops freefalling and finds a bid, from somewhere, despite oil's continued weakness. Just because. 

This cheap oil thing we're going through isn't going to last long. Take that to the bank.




*Rabinovich: "Todo con Rrruh"

Chart of the day is...

...Atacama Pacific (ATM.v) since August 26th 2014, the last time it was mentioned on this humble corner of cyberspace.



The funny thing: Thanks to the oil price drop thingy, these days the currency assumption ATM.v used in its PFS matches reality. The diesel price is close, too. 

The days when juniors could optimize their story (yeah the euphemism, I don't feel like using bad language today) are long gone. Sure, you put the best foot forward but if your spiel smacks of BS, in 2014 you get this big red cross drawn through your name and that's it, end of story. 

Another bottom signal

Another blogger gives up.

They come, they go.

On this, Ritholtz and I thoroughly agree

From here, this bright and sunny early Thursday morning:

"Those of you who continue to insist you can even remotely forecast what might happen next continue to reveal incredibly foolish, thoroughly disproved beliefs, despite an overwhelming avalanche of evidence that you haven’t the slightest idea what the fuck is going on now, much less what is going to happen next."

Timmins Gold (TMM.to) (TGD) throws $10m cash and 16m of its shares down the toilet

And it does it this morning, right here. What part of "Caballo Blanco will never be a mine" do dumbass gringo miners with more money than sense not understand?

PS: Anyone stupid enough to think CEO dot CA is the place to hang out in order to get good investment advice deserves what's coming to them, good and hard. Frequenting a website that exists for the sole purpose of licking the collective assholes of mining company management proves how fucking stupid you are.


12/17/14

"Considerable time"

Apparently, the fate of the 21st century rests on whether two words appear in a short communique that's due out later on today. And apparently equally as important is what replaces them if they aren't there. For your own good, you need someone to tell you how incredibly fucking stupid you all are and I hope it's not just me that's up to the job. I'm off to buy Christmas gifts for a couple of wonderful girls. 

That Commie subversive anti-American Ronald Reagan

Nicely done by Eric Garland over at his joint. Picture stolen here:

More junior drilling bullshit

Hot on the heels of yesterday's example of male bovine excrement dressed as news comes this morning's NR from Avrupa (AVU.v). This one's just silly, not wasting too many keystrokes on it, what part of the phrase "scam for greenhorns" do you not understand?

1) We're given this headline: "Avrupa Drills 126.5 Meters of 6.2 g/t Au at Slivovo JV, Kosovo"
2) We're not given any intersect info (let alone the other necessary info according to the rules these days, such as azimuth, angle etc)

3) But we do get this map at least:




C'mon, tell me how you get that headline from that map, considering that the discovery (term used loosely) is from hole 004? C'mon, dare you.


How rumour info on IKN works, Paramount (PZG) edition

On December 1st 2014, this humble corner of cyberspace wrote that Coeur (CDE) (CDM.to) was in talks to buy Paramount (PZG) (PZG.to). I didn't buy it, didn't pump it, didn't reco it, and I wasn't being "taken for a ride" by somebody or other using "the oldest trick in the book". I merely passed on a decently sourced rumour for all the reasons noted in yesterday's post that talked about a different rumour. The info was passed on, you could do what you wanted with it.

Today Coeur and Paramount announced their deal.  
WINNEMUCCA, NEVADA--(Marketwired - Dec 17, 2014) - Paramount Gold and Silver Corp. ("Paramount" or the "Company") (NYSE MKT:PZG)(PZG.TO) and Coeur Mining, Inc. ("Coeur") (CDE) have entered into an agreement and plan of merger, dated as of December 16, 2014 (the "Merger Agreement") pursuant to which Coeur will acquire all of the issued and outstanding shares of common stock of Paramount and the San Miguel Project (the "Merger"). As a condition to closing the Merger, the shares of Paramount's subsidiary holding its Nevada mining assets will be spun-off to holders of the Company's common stock.

Apologies from those who decided to hate on my ass on Monday will be gracefully accepted. And you know the mail address, because you were quick to use it before. Don't be shy now, haters. Don't be shy.





12/16/14

Aberdeen (AAB.to) vs Meson: A proxy slate

How much do we care that Meson Capital's Ivy League Blazerjocks want to play at boardroom battle with the rat Bharti? Not much, but as we've covered the show in a couple of recent posts IKN can at least do Ivy League the courtesy of linking up the NR. Go have a peep if you care.

Break out the popcorn.

Tax loss selling

Anybody who thought there wouldn't be much tax-loss selling in Canadian stocks this season, that the worst would be over early and that December wouldn't see much dumpage should take a good look at the market action today.

Aurcana (AUN.v): Lenic has left the building

In order to spend more time with his yacht in the Med. Link here



Some of the most informative NRs are the short ones that say very little.

Even at the bottom of a market the junior mining bullshit never stops

This morning an outfit called WCB Resources (WCB.v) gave us a screaming headline about its PNG exploration project that went "WCB Resources Intersects 48m @ 4.09 g/t Au, 15.82 g/t Ag and 0.22% Cu from Drill Hole GDD002 at the Misima Porphyry Copper Prospect, PNG" and then went on to tell us...
GDD002 intersects 48m @ 4.09 g/t Au, 15.82 g/t Ag and 0.22% Cu from 38 m, including: 4m @ 47.6 g/t Au, 90.55 g/t Ag and 0.57% Cu from 60 m. -- This mineralisation is predominantly hosted in skarn and can be correlated on section to previously reported high-value surface channel samples approx. 250m to the south-west. -- Three broad zones of highly elevated copper with associated gold and silver geochemistry returned in assays for the top 228m of this hole, which was completed to 768m. Assays are awaited for the rest of the hole. -- The significant intersection in GDD002, in combination with GDD001, provides further evidence of a large, strongly mineralised porphyry system at Misima. -- The new results have helped define a structural corridor within which upper level propylitic or halo alteration and associated porphyry mineralisation occurs, suggesting that this is the priority target area for further deep diamond drilling. -- Scout diamond hole GDD003, located 500m to the south-east from GDD0002, is currently at a depth of 631m.
Impressed? You should be, that's an awful lot of very important geology words all squeezed into one passage. However, let's bypass all the worderation and get back to the numbers being reported because what this NR is announcing is nothing more nor less than a drill cut of 48m of four gram gold. So let's just run that thru the good old handy dandy Corebox/Brent Cook Interval Calculator and...


...oh, looks like a 4m hit with a pathetic halo around it that's being smeared out to make it sound far more interesting than it is. Now, why didn't the junior exploration stage mining company with very little cash in the till and a continually dropping share price that nobody's interested in buying tell us that little part? Wow, beats me...

UPDATE: Best feedback received so far is from reader M: "Why didn't they go for 160m at 1g/t, amateurs!"

The Deutsche Bank 2015 Commodities Outlook report

It's 5.3Mb, it's 142 pages, it's dated today December 16th 2014, it covers all the angles, it's on this link right here. As for the front cover summary:

#1 Benchmark indices & a third year of under-performance: Following powerful price corrections, investors may be tempted to re-establish long exposures. However, US dollar strength should sustain the under-performance of commodity benchmark returns relative to equities. 
#2 Living with lower oil prices: We believe Brent oil prices below USD60/barrel would, over time, inflict damage on US oil supply prospects. A more powerful and sustained slump in oil prices towards USD40/bbl would, in our view, be only likely to occur in a much weaker global growth environment. 
#3 Natural gas supply growth: With 2015 supply growth likely to exceed the level needed to balance the market, we expect this year’s storage deficit to be eliminated by the end of Q1-15. Building surpluses over the balance of the year are likely to weigh on prices particularly in the summer. 
#4 The Fed & gold: Lower oil prices will inflict more damage on the S&P500 than the US real economy and encourage an expansion in central bank balance sheets outside of the US. These may provide pockets of support for gold, but, US financial forces will eventually overwhelm and drive gold prices lower. 
#5 The curse of over-valuation: Palladium has taken on the mantle of the world’s most richly priced commodity. While lower oil prices and a falling US unemployment rate should propel US auto sales higher, palladium fundamentals have to remain robust to justify our bullish price forecasts. 
#6 Copper’s exposure to the property slowdown in China: Unlike energy, agricultural and bulk commodities, where prices are back to levels last seen in 2009, industrial metal have been more resilient. However, the copper market is moving into surplus and the lagged effects of the weaker Chinese property market will hit copper demand, as a result copper is our preferred short. 
#7 Bulk commodities & the US dollar: Depreciating currencies have given bulk producers some breathing space to tolerate further price declines. This may delay the necessary production cuts, which will mean prices drift lower.

Whole thing here. Up to you whather you agree with DB or not.

On a happier note...

...I'm glad to say that while checking back office stats this morning, the best post of the last week on IKN is also the most read post on IKN in the last week (and believe me that's rarely the case, folks). That post is "CIM 43-101: The natural evolution of graft and corruption (from IKN291)" and it's the best because of the mail from my friend it contains. If you haven't read it yet, here's the link go and see. If you have...hell, read it again, it's a highly informative read.

The sooner 43-101 is killed, the better for the mining industry.

Vile esteemed really sucks, y'know

'Tis better to be vile than vile esteemed,
When not to be receives reproach of being,
And the just pleasure lost, which is so deemed
Not by our feeling, but by others' seeing.
Sonnet 121, LL 1-4, Bill the Quill


The problem with the snake-pit that is Canadian mining capital markets...sorry, let's start again.

One of the problems with the snake-pit that is Canadian mining capital markets is that due to it being populated by a never-ending procession of (middle-aged, balding, overweight, self-important, self-righteous, boring, lazy) white men speaking with forked tongue, it's difficult to be transparent and honest without people wondering "what the angle" is. Take for example the very short snippet passed on yesterday about First Majestic talking with Pan American about a merger. What happens is something along the lines of...
1) FR.to stock pops hard and against the grain of market peers at the open.
2) People start going "Huh WTF?" and the way things are these days I'm roped in (wholly voluntarily, but I'm pulled into the loop all the same) by those looking for an answer. We look together, pool resources, ask around, usual style.
3) Reasonable intel comes back over the jungledrum (and in all these cases "reasonable" involves a vetting process else you'd get to hear about all sorts of sillystuff rumours on these pages).
4) Instead of keeping the reasonable junglydrum snippet inside the usual walls, I pass it on here at the blog to (as noted yesterday) 'level the playing field', as it kinda irritates me that there's this two tier rumour system in Canada that rarely lets retail in on the juice.
So I post what I post, with some very clear disclosure, pure face value. And for my pleasure, the rewards reaped are either 1) "Otto's trying to manip the market with BS rumours" (via mail, which is flat untrue) or 2) "Otto's been suckered in by the oldest trick in the book" (via people with blogs who get some slack cut because they're normally pretty good, but this time score a fat fail by jumping to conclusions and not even bothering to ask before posting complete bullshit). Just one thing; FR.to had made its move and had peaked before I posted yesterday morning.

Anyway, don't think it's easy trying to be honest and equitable in this pisspoor section of human dregs known as junior mining market, because you take more shit by trying to rise above the scum than you do by joining in their nefarious games. That's my moan for the day done, except to say that Bill Quill above shows this is hardly a new facet of the human condition. Harrumph.

Chart of the day is...

...gold for the last couple of days:


Just sayin'

12/15/14

It's now eight weeks since the Doug Casey "Market To Crash NOW" call

On October 21st Casey Research charged its bleating flock $20 for its "Prepare For the 2014 Crash" report. And after urging you on by saying (and we quote)...

"Now is the time to take action. Not in the next few months or even in the next few weeks—Right now."
...in the panic-laden Crash report, let's see how the Doug Casey prediction is panning out. Unlike the memory-lapsing Olivier Garret who tried to lull us into some revisionist bullshit on November 26th, we at IKN are clear about the main calls and trade recos offered by Casey Research in its paid-for panic call in October. The integral parts of the plan were the following:

1) Expect the broad markets to crash
2) Own gold as insurance
3) Go short the regional banks ETF (KRE)
4) Go short on the Dow Trannies ETF (IYT)

And here's the chart of the last month in those four vehicles, including the the S&P500 to cover that all-important broad market crash headliner:


In short:

  • The S&P500 hasn't crashed, it's 2 1/2 % over the last eight weeks
  • Also true for KRE, which is up 3%
  • IYT has been higher of course, but it's still 5% up in the period
  • Meanwhile, the safe haven call of gold, the one that should have gone up, is down by nearly 5% in the period.
In other words, Casey's still running a score of zero out of four. At what point will Casey Research refund the $20 it charged for its "Market To Crash Now!" call?




The cheque's in the post, Pacific Potash (PP.v) edition

This late evening NR made me grin:
VANCOUVERDec. 15, 2014 /CNW/ - Pacific Potash Corporation (TSX-V: PP) ("Pacific Potash" or the "Company") announces that its personnel in Brazil have advised that the funds wired to Brazil in order to make the tax payment due to the DNPM at the beginning of December were not received for unknown reasons and therefore the tax payment was not made by the required deadline.  As a result, management has been advised that the Company's tenemants in Brazil may be revoked by the DNPM.  The new management team for the Company is working to resolve this matter as soon as possible. 

Now, maybe just maybe juuuust maaaaaaaybe the lack of funds delivery has something to do with the fact that PP.v has been fined for non-payment and late payment of due taxes several times in the past, as at September 30th PP.v owed the Brazilian taxman $2.7m, of which $590k was due paid in the near term and as at the end 3q14 (i.e. the same september 30th) PP.v had the overwhelming total of six thousand eight hundred and eighty-nine Canadian dollars in treasury (as well as a working cap deficit of nearly $1.5m...but detail, yeah?).

Or hey, it could just be that the Vancouver Head Office did indeed wire that money to Brazil but for some strange reason it wasn't received in good order. Hell I dunno, all one big innocent misunderstanding probably. Innit guv. Honest like. 

Peru and Chile GDP growth: Lockstep

With the news today that Peru GDP growth came in at 2.37% for the month of October (and the Chile number already known) here's how the two countries' GDP development chart since 2010 looks, all updated and pretty:


In short, still pretty much in lockstep.

Today's First Majestic (AG) (FR.to) rumour

Pan American Silver (PAAS) (PAA.to) is in merger talks with them. So now you know what I've heard.

For the record, I don't have a clue whether there's substance behind the chatter.

full disclosure: i own some first majestic stock but will not be buying, selling, adding, subtracting or trading around the position today or in the days to come. i don't give a flying fart about the rumourmill on this one today, i'm just passing on the chat and levelling up the playing field.

UPDATE: An extra thought here

Your financial overlords do the thinking so that you don't have to


Oil prices have dropped $50 a barrel. That may not sound like much. But when you take $107 and you take $57, that’s almost a 47 percent decline…!”–James Puplava, The Financial Sense News Network

Ah, now that's almost as good as "Waste Not Throw..." below. From here

Sarcasm is the lowest form of wit. I vary my wit to suit my company.


Waste Not Throw Civilized Behavior Significantly

The World Complex snapped bunch of fine photos of Engrish in China and put them into a post, here. They're all good, but this one...


...transcends the genre and reaches a pinnacle of language beauty.

12/14/14

IKN Recommends: "Bitcoin: The Future Of Money?" by Dominic Frisby

I've just finished reading Dominic Frisby's latest book "Bitcoin: The Future Of Money?" and much to my own surprise, found it an excellent read. 

But that's not all, because I'd only just started reading it too. A little explanation is in order, because on September 25th Frisby (who's a nice man) sent me a free e-book copy of his book for me to read, enjoy, review etc. I downloaded it onto the Kindle and promptly ignored it until early last week. Then, while wanting a bit of a rest after getting through the first part of War and Peace, I was flicking through the e-book menu and came across the title looking back at me; feeling slightly guilty for not having opened it to that moment it was, "Ok, let's give it a bash and see how long I can handle all the cyberlove jabber and electrocoin worship" and started reading.

After a few pages I suspected my prejudices were misplaced, after a couple of chapters I knew they were. Not only is it an excellent read for its information content but it's done in a straightforward, entertaining and humourous style, with easily digestible prose that makes great narrative. And as for the content, the whole Bitcoin "thing" suddenly makes a lot more sense to this cyberknownothing. Then you get this whole sleuthing chapter on the person who invented Bitcoin (good armchair detective stuff from Frisby). As for the final bonus, not only is Frisby less evangelical than I thought he'd be, he's also very real world about the investment and speculative potential (or lack of) that the vast majority of this sector has to offer. His advice on what to do about Bitcoin now really hit the spot as far as I'm concerned.

Anyway, this is an unsolicited testimonial going out the the readers of IKN (and one that'll surprise Frisby, because I'm sure he gave up hope of ever getting a review out of me weeks and months ago): If you're looking for a great gift idea this Christmas for the biz-type person who thinks they have everything but knows nothing about Bitcoin (or it seems equally as important "cryptocoins" or plain "crypto") this is the book for you. And check it out on Amazon here (no, I'm not on commish) because the e-book version is going cheap at $4.

"Bitcoin: The Future Of Money?" by Dominic Frisby. A good read.


The IKN Weekly, out now



IKN292 has just been sent to subscribers. A real trade idea this week. Makes a pleasant change.

Your IKN ebola news update

No white people dead.
No news.
Merry Christmas.