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8/15/15

Weekend melodies: Jon Hopkins live at Glastonbury 2015

Off-scale greatness.



The full set, which starts strongly and builds into something that cannot be done justice by my utterly inadequate descriptive power with words. You have to listen and experience it for yourself. This is unadulterated musical genius, the way we listen to the classical composers today is the way people in a couple of centuries' time will listen to Hopkins.


The top three most visited IKN posts this week are...

...in reverse order and duting the traditionally quietest week of the year for site hits (northern vacay etc):

Third Place: "The latest Mexico gold mine heist: Newmont (NEM) and Fresnillo (FRES.L) robbed of 300kg of gold" in which I made a mistake. As several of you pointed out afterwards, Newmont sold its position in Penmont (and therefore La Herradura) in 2014. I decided to leave the error up there anyway, shows you can't take IKN too seriously as a source. Also, FRS later came out to say the theft was much smaller than 300kg. That one's up for debate and even today Saturday I have no problem in going with the newspaper version of 300kg.

Second Place: "Tianjin China kaboom video", because it's scientifically and agriculturally proven that the world likes to watch things blow up read good.

First Place: "Casey Research, now with Stansberry/Agora, will market you to death". Which is a good thing. If the series of three posts last week on Stansberry/Agora/Casey and the crummy way in which it does its hard sell business of dross manages to stop just one person from handing over their cash to those excuses for people, it's worth it.

8/14/15

Thomas Drake, The man who knew too much

Via Jesse, I spent a couple of hours today Friday fascinated by this interview with Thomas Drake.

Here's the first episode:


Find the other segments here (and after you watch part one above, expect to be hooked). 

IKN absolutely urges you to make this your weekend viewing, it's excellent. Thomas Drake is an intelligent, brave, perceptive person and his message needs to be heard by as many people as possible. Plus, Paul Jay does a great job of interviewing him.

TY Jesse for the headsup.

The Friday OT: The Undertones; Teenage kicks

John Peel's favourite song. John Peel had great taste.



Because thinking, acting and writing like a fully grown and mature adult is a overrated activity promoted by ego-filled dumbasses who lost the essence of life and integrity a long time ago.

"The Buying Frenzy": How Casey Research markets you to death, part three

On Wednesday August 12th in we showed you the first segment of the secret backroom document Agora/Stansberry/Casey Research uses to peddle its newsletters to you and transfer as much money as possible from your back pocket to theirs.

Yesterday Thursday 13th came part two, which had details of the technique they use called "The Gauntlet", which is designed to pepper you with scores of different mails and marketing material until you give in.

Today we highlight what they call "The Buying Frenzy" and this is my favourite bit of all: If you harboured doubts about the cynical way in which these balls of scum go about their sordid business, read on and clear it up once and for all:


Gotta love how they avoid spending cash on female investors because (to quote), "They don’t have the emotional need that is required to set off a buying frenzy". And how they're zeroing in on baby-boomers worrying about retirement because they're the ones who'll waste their cash on not just one of their rip-off publications but several in that all-important buying frenzy.


And for the record, people unfortunately enough to be on Casey's e-mail list have confirmed to me in the last couple of days that the quantity of unsolicited mails they've been getting from Casey Research has recently shot up to astronomical levels. Here's an example of a mail from 5am this morning (!!!) a reader forwarded to me today that traight out of the "Gauntlet" playbook:


And for the record, the person who received this isn't a paying customer of Casey Research and he's not even registered with Stansberry.



Argonaut (AR.to)

Apart from this...


...great quarter guys!

And nice to see that you understand what the words "write down" mean. Time to apply it to the big ticket assets the way you should have last year. 

Chart of the day is...

...gold, the recent moves, because for my taste the price has held up better than expected at over U$1,100:

In fact, in my tiny little delusion of a world I've been drawing a line in the sand at the four ones, U$1,111/oz, all week. Even that's held. Yeah I know the cheerleaders want it at $1,200/oz by next week with that just a stepping stone to its true destiny of Savour Of The Financial World and all that, but at this humble corner of cyberspace we're shackled by realeconomik. The reality is, if you're looking for a gold recovery this above is a decent start. 

And if you've been loudly predicting the demise of the pet rock metal, unless you're particularly stupid chances are you're beginning to feel more than a little uncomfortable with your arrogance.

Enjoy Friday.

8/13/15

And while we're at it, here's my fave bit from the Jaguar Mining (JAG.v) 2q15 numbers

Considering how awful the company and its assets are, it may surprise a few of you to learn that Jaguar Mining (JAG.v) is still alive and kicking (though it took the holy saintmother of all dilutive rollbacks to keep it going). But alive it is, which brings us to the point of tonight's post and...oh goody goody let's check the 2q15 news release from JAG.v and especially this bit...

...which is wonderful. 

  • Because it made a gross profit of $6m if you don't include depreciation.
  • Because no miner ever has a mine that depreciates.
  • Because you just mine its rock and when you come back to the same spot the next day the rock has magically re-grown.
  • That's a plain fact.

Okay that last one is slightly more ironic more than truthful but you'd probably guessed that already. Therefore to adjust for bleedin' reality and go for the factual Q2 figures at JAG.v that are indeed GAAP compliant:
  • Sales $22.82m
  • Gross profit $2.779m
  • Operating LOSS $2.531m
  • Net LOSS $4.383m

BE CLEAR ON THIS, KIND READER---> Excluding depreciation cost is like running your trucks without fuel and the reality-challenged IR dude that thought it a smart idea to present JAG.v's numbers in this way needs to be taken out to the woodshed and given a long, hard beating. With a knobbly oak branch. For his or her own good. And for the good of the world.

By the way, JAG.v has a negative working capital of $38m. But hey...details...right?

UPDATE: An anal yst friend writes in:

Zimbabwean GAAP, beautiful!





Gran Colombia Gold (GCM.to) 2q15 financials


They'll tell you they've brought the all-in cost down
They'll tell you about the $3m profit
But they won't tell you that...


...and that includes $117m in financial debt...pure cash money. And talking of cash...


...it's still a little thin on the ground, dontchaknow.

The day after is more interesting than the day

Just for a change I've been doing real work this morning, because time has taught me to pay close attention to mining stocks the day after any (gold-driven) big upmove. The consolidation day is far more instructive than the day in which they all go pop, you get to see the relative strength more clearly. 

What I want to see in a stock price on a day like today is simple enough: A small drop compared to peers on good volumes. A consolidation drop is normal and we like that, but if volumes are strong it points to a company that's still being considered as cheap on its fundies by the players that matter.
  • I don't want a big drop, that's a sign of weak hands bailing on a flip. 
  • I don't want a small drop on low volumes, it's inconclusive.
  • I don't even want to see a stock rise, because it means it's out of synch with the market and probably a backwater stock or maybe a pump job (unless there's some specific company news that's out).

Trade flipping in hours or days usually isn't my thing, taking longer-term fundies positions is. That normally means not paying much attention to the intraday ticker but on some occasions it makes sense to stop the snarky blog blathering and pay closer heed. Today's one of those days.

Bottom line: The conclusion drawn by 95% of readers to this post is...



...and rightly so. Enjoy your Thursday.

"The Gauntlet": How Casey Research markets you to death, part deux

Extract one from the Agora/Stansberry/Casey Research guide to how to squeeze every last drop out of you came yesterday. Today's is the second excerpt from their back-office guide which explains their technique they call "The Gauntlet" and again, it's perversely fascinating to read:



When you sign up to that Casey Research "free letter" or "special introductory offer", be under no illusion as to what happens next dear reader.

I wonder what Ayn Rand would make of it all?

8/12/15

A flash update...

...has just been sent to subscribers, 10pm local time on Wednesday evening.

Tekoa da Silva round-tables four geologists

You got Simon Ingram of Reservoir (RMC.v), you got Brent Legend Cook of Exploration Insights, you got Stephen Nano of Mirasol Reosurce (MRZ.v) and you got Alain Charest of Evrim Resources (EVM.v). And you get their views on mainly the prospect generator model.


And you have the always good Tekoa da Silva running the round-table-Q-and-A thing over the 14 minutes. Worth your time, metalhead.


Tianjin China kaboom video

You'll hear all about it in the next 24 hours, so get a video in first:

Casey Research, now with Stansberry/Agora, will market you to death

Here's a leaf from the Agora Publishing "how to screw your clients for as much money as possible" handbook. These are the people behind the whole newsletter business, pulling the strings of Porter Stansberry's cruddy organization and now in full control of Casey Research.

It'll give you an idea of how cynical they are and it'll give Casey Research subscribers an inkling as to why they're being hammered with even more marketing BS via their mailboxes these days:



There's a whole lot more of that attitude in the full document. One hundred and six pages of it, in fact. It's fascinating too, in a perverse way.

UPDATE: This post is part one of a three part series.
Find part two here which explains "The Gauntlet"
Find part three here which explains "The Buying Frenzy"
I particularly like the way part three sheds light on the grubby moneygrabbing mentality at their shop.


Mexico gold robberies: Mining companies only have themselves to blame

After the news this morning of yet another multi-million dollar gold robbery in Mexico, in which the La Herradura mine (NEM and FRES.L) was done for over U$10m of gold, it's more than interesting to find out that rather than bolster measures against the Mexico thieves, often organized criminal gangs connected to narcotrafficking, the mining companies have been cutting down on security in 2015.

According to this article in Mexico's newspaper of record Reforma from just four days ago, mining companies have cut the amount they spend on private security in Mexico by 17% this year. Citing figures given to it by Mexico's Chamber of Mining Camimex, Reforma states that mining companies have invested U$47.2m in security in 2015, which compares to U$57.5m for the same period in 2014.

The report goes on to quote one Manuel Reyes, who is president of the important AIMMGM body (the national association of mining engineers, metallurgists and geologists) who said that the spending cuts weren't because there were less criminal incidents but simply because the metals prices had got mining companies cutting what they think are non-essential expenses to the core. 

I wonder how "non-essential" Newmont thinks those cut salaries are today?


Saturday Morning Breakfast Cereal: A New Kind of Robin Hood

Brilliant, brilliant and three times brilliant. Stop reading this pitiful IKN thing, hit this link and improve your day endlessly.
"And how do you give to the poor?" 
"It trickles down."

The latest Mexico gold mine heist: Newmont (NEM) and Fresnillo (FRES.L) robbed of 300kg of gold

Mexico's dailies are running plenty of reports of the theft from the Penmont (the JV between Newmont (NEM) and Fresnillo (FRES.L)) La Herradura mine  of 300kg of gold (9,645 oz) yesterday. Apparently a gang of about 20 thieves rolled up to the mine in Hermosillo, intercepted a vehicle transporting the gold, then overpowered all employees and guards before making clean away with all the booty.

If those quantities quoted in reports are right, that's about U$10.6m worth of gold.

Ty GS for the headsup


On Vasily Grossman

I received a great mail today which included probably the most famous lines written by Vasily Grossman. Those lines are bold-typed in the excerpt below (they're from his work 'Life and Fate', which by the way is required reading for all human beings) but on reading them, I remembered that the context of the famous quote is more optimistic than the way's it's normally used. So I went to dig it out and here it is:
“I have seen that it is not man who is impotent in the struggle against evil, but the power of evil that is impotent in the struggle against man. The powerlessness of kindness, of senseless kindness, is the secret of its immortality. It can never by conquered. The more stupid, the more senseless, the more helpless it may seem, the vaster it is. Evil is impotent before it. The prophets, religious teachers, reformers, social and political leaders are impotent before it. This dumb, blind love is man’s meaning. Human history is not the battle of good struggling to overcome evil. It is a battle fought by a great evil, struggling to crush a small kernel of human kindness. But if what is human in human beings has not been destroyed even now, then evil will never conquer.

That's some prose, but I hope you'll see that by taking those famed bold-typed lines and quoting them without the rest, the real message Grossman wanted to get across is lost. And that message is all the more remarkable if you check out the history of the man who wrote them. Thank you for writing DE, you made my day.

Lefsetz on Trump

Right on the button:

"...he’s the perfect American, where no one makes a mistake and bluster is everything, and you wonder why our nation is in trouble…no one can learn anything, no one can adjust their opinion, no one can say they’re wrong."

Chart of the day is...

...the gold/copper ratio:



Because according to the mailbag, certain people don't go with the more subtle message and need it nailed into their foreheads. The market jabberers who think gold's just like any other metal or just another commodity will not have understood why gold and copper reacted in exact opposite directions when China devalued its currency (twice). Ingrained in their thinking, they are today confuised and laughing off reality and sticking to their guns. The famous Galbraith quote...
"Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof."
...comes to mind while writing this post.

The reason gold went up: The people who run Shanghai* aren't half as stupid about money as the people who run Wall St. Gold isn't copper, it's not silver, not nickel, moly, platinum, alu, scandium, indium or tin either. It's gold and it has different rules to all other metals. So learn them.

*as opposed to the people who bet on Shanghai


8/11/15

Dynacor Gold (DNG.to) 2q15

So much for that "guaranteed margin" spiel we used to get about this thing from Louis Lobito Little Wolf James of Casey Research:


The 2q15 EPS was way down, only comparable to the 1q14 quarter when DNG had to shut down for a month due to a regional strike by artisan-type miners.

Nevada Copper (NCU.to) reports its quarter

What, something might be the matter here you say?



Surely not!

Sorry, how long before Pumpkin Hollow's free cash flow positive at sub-$2.50/lb copper, you say? Oh...errr...well...detail...

Jesse on form (and on Chinese currency)

I really liked the post on Jesse's Café Américain this evening that took the China deval news and condensed it to the core message (which once stripped of the chattersphere's gobbledegook really is quite straightforward):
A devaluation of this sort is designed to improve the domestic economy by stimulating exports, lowering domestic costs of production relative to other sources, and to inhibit imports by raising their relative prices. 
In other words, China clearly signaled that the US dollar, to which they were matching their own currency, is overvalued relative to the state of the global economy, and especially their own. 
China is 'the canary in the coal mine' for the global economy, a major source of labor and supply. Their own economy is sick because demand from overseas is down. 
And why is demand lower? Because multinational corporations and the banking system have been financializing nearly everything to increase corporate profits and the wealth of a very few, pretty much at the expense of everyone else. 
So if the people do not have the money to buy, and cannot keep increasing their private debt to service consumption because of the predatory lending and fees in the system, guess what happens to aggregate demand?

Jesse L then goes on to compare circumstances with a couple of historical times, via US President speeches. Another snippet here (the past tenses in this quote can be changed to present tenses contextually):
The problem was not paper money per se, but the concentration of power and wealth which the abusive use of the monetary power had granted to a few powerful individuals and institutions.
That's exactly right. And there's plenty more quality food for thought in the post, so go read yourself.

Mexico monthly silver production, 1980 to 2015

As I happened to be on Mexico's INEGI page for a different reason today, and I happened to get sidetracked by the dataset (wasn't looking for silver, fwiw), here's a chart for the humble corner of cyberspace. Because it's quite interesting all by itself:


The world's biggest silver producing country. Not surprising considering that growth pattern. Data from here


IKN Recommends: Mining's Black Box

Mining's Black Box is a new blog that's been started by Tim Oliver, one of the smartest mining engineers and sector specialists I've had the fortune to come across. He's widely read and esteemed in the mining world, for example he's appeared regularly in Brent Cook's 'Exploration Insights' letter as a guest commentator on matters connected to 43-101 compliant reporting and the consequences of the system used (both good and bad).

To give you an idea of what Tim Oliver offers on his free access/free read blog, here's the blurb he's written by way of introduction:

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Why the Black Box
“I’m just comparing numbers and have quite a bit of experience, reading FS/PFS etc. since a few years, but sure I have to trust the official numbers and I know how many will fail / are already failing; it’s for sure a black box in a few parts until they really reach production, hopefully on time and on budget.”
The preceding quote from a recent conversation with an experienced industry investor stuck in my mind. He asked my opinion of a single-project company with an underground gold mine project in South America. 
I took a quick look at the project’s feasibility study (FS) and found major problems. I suggested he should dig a bit deeper here and there; do some benchmarking, and consider the unrealistic construction schedule. He made the statement quoted above and went forward happy with his investment. 
What our friend described as a “Black Box” is a series of engineering studies that span the gulf between discovery of a mineral deposit and a profitable mine. 
Done correctly, the studies present an accurate picture of the economic potential for a mineral deposit. Done incorrectly, the studies might portray a hopeless deposit as a great bonanza, or disguise a great mine as a lost cause. 
This blog is your key to the Black Box. I’ll post tools, information and opinions to help investors look past the lipstick on the pig, or to find the diamond in the rough. Pardon my clichés, I can’t help it.


IKN strongly recommends to anybody interested in the mining scene to go visit Tim Oliver's new gig, sign up to his e-mail list, stick his blog on RSS and generally read the guy. You'll get smarter about the sector pitfalls quickly if you do. Here's the link, now use it.


Welcome to the new Peru (just the same as the old Peru)


  • Miners protesting? Check
  • Main road blocked because only way of attracting attention to cause? Check
  • Police called in? Check
  • Police use heavy-handed and violent tactics to confront strikers? Check
  • Dozens of injuries? Check
  • One death already confirmed? Check
  • Protests continue? Check

That's today at the Doe Run complex in La Oroya, on the country's main Central highway. One report here, hundreds more if you check GooglyAlphabet.

Good news: The Muck Pile is back...

...after its blogmeister's sojourn in the mosquito fields of WayUpThereLandia. Two weeks was way too long without your most excellent of blogs, Mike.

Anyway, a nice edition. I particularly liked the Giustra bit. Read it here.

Please tell me again how all metals are the same, mainstream market community of clever and wise financial people

How copper reacted to the China deval news:



How gold reacted to the China deval news:

First Majestic Silver (FR.to) (AG) 2q15 results

First Majestic (FR.to) (AG) reported this morning, the NR is on this link.

Once you've read it, you may be wondering why FR.to managed to return yet another loss. Once you've checked out the financials, you may wonder why working cap is still negative, despite FR having raised net U$23m in a placement during the quarter. So to give a best quick-answer, I've got it down to one chart instead of the usual dozen or so. 

This shows the average price of silver in the given quarters, as per the London Fix. It also shows the total expenses incurred by FR.to in each quarter for its silver equivalent ounces (i.e. silver plus the other metals at the correct proportions, as filed by FR.to). What we see is that despite growth in production and despite all the promises that Keith Neumeyer has thrown at us over 2013 and 2014 and now 2015, FR.to is incapable of cutting its costs profile. The result is a meeting of lines and the company is now a loss-maker.


And really, that's all you need to know about FR.to the company. Can't cut costs to save its life, and that can be taken quite literally if silver continues its downward trend. But of course, nobody will care today because the metal has popped 50c/oz thanks to the China deval news and style beats substance every time.

So it goes.




8/10/15

Frank Holmes continues to sell his Gran Colombia Gold (GCM.to) trainwreck holding. Quietly

Back in May we noted how US Global, the Frank Holmes investment (term used loosely) fund, had dropped its holding of Serafino's expensive hobby Gran Colombia Gold from 12% of total shares out to 10%. All quiet like, because we wouldn't want anyone to know*. According to today's news that's now down to 9.25%. This from SEDAR tonight:



That means he's dumped another 145,000 shares approx. Those were worth around three quarters of a million dollars when he bought them. If he got more than $40,000 in the disposal he was lucky.

*Which is why IKN exists, of course. Hi Fino!

The IKN Weekly, out now



Comme on dit "Oooh Arrrr!" en Français?

IKN326 has just been sent to subscribers. A day late, they know why.

Muck it out.

Argentina PASO elections: With 94.28% of votes counted...

...we have the following numbers:

 FpV 38.39%
Cambiemos 30.10%
UNA 20.61%

As for direct votes for next President (ignoring the internal votes inside alliances)

Scioli 38.4%
Macri 24.3%
Massa 14.1%

Details here from the official electoral body web page. Go for the final 100% counted scores later.

The bottom line: Daniel Scioli has at least eight points on his main rival Mauricio Macri. One way of winning the whole shebang in the first round when the real vote happens in October is a) get more than 40% and b) the second place is more than 10% behind you. That means that Scioli has a reasonable shot at getting the extra votes he needs at this point. Personally, I make him a 50/50 chance to get the big job without the need for a second round run-off.

Copper Mountain (CUM.to): Forex saves the day

They said the results are positive in the title line of the NR so it must be true, right? I mean, would a junior mining company make things up?


Thanks to $5.2m in forex adjustments (the result of having a big fat financial debt in US Dollars but reporting in Loonies) CUM.to got to report a minor net profit this quarter. But the cruel reality is that real costs are still way too close to real revenues so when we consider what's happened to copper since the end of the 2q15 period, it's not getting any better in the near future.

Bottom line: When you claim to have returned a net profit but your working cap has dropped by nearly $2m (to $15.9m), things are what they might seem. Let's not even go into the $439m in total liabilities on its books, the vast majority of which is financial debt. 

Sticky.


8/9/15

An IKN Weekly extra report has just been sent to subscribers

This week the normal IKN Weekly goes out tomorrow Monday evening.

End of notice.

Argentina PASO election exit polls: Scioli showing strong

We have four to six hours before official quick-count results come through, but as polling is now closed the Argentina TV stations are free to publish their exit poll results from today's key PASO elections, a precursor for the main Presidential vote event in October. 

For example here's a screenshot from Argentina's national TV station Telefe:


And that one's fairly typical of other exit poll showings so far. They also fit in fairly closely with voter intention polls from the past couple of weeks.

Bottom line: Daniel Scioli ahead by a fair margin.

The top three most visited IKN posts this week are...

...in reverse order and in a travel-shortened week:

Third Place: "Atna Resources (ATN.to): A rantwhich noted how ATN.to was down 20% on the month (it's now down 37%) and how its pumpy promo about improving gold production at one of its two mines three weeks ago wasn't even half of the cruel reality at the company. And how people who invest in juniors need to check the financials, not believe IR spiel. 

Second Place: "Richard Fifer of Petaquilla: Beware of strangers holding envelopes", which noted how the lawyers with papers to serve seek him here and seek him there and seek him over hill and dell.

First Place: "Balance sheets". Which pointed out some very obvious things about Banks Island Gold which its head pumper Louis James of Casey Research didn't want you to know. And I ranted about it again, too.