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4/23/16

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

...in reverse order:

Third Place: "Courtney Chamberlain's memorial service". I can't even begin to tell you how happy I was to see this one make the podium. IKN doesn't normally get a lot of hits from Australia, it did last week.
Second Place: "Victoria Wood". The unexpected passing of a comedy genius, IKN salutes and others agree.

First Place: "Gwen Preston and Scott Gibson". It would seem that at least some of the people who trade the TSXV are getting wise to the way in which "independent analysis" on junior mining is served up to their eyeballs. The promotion of mining companies in Canada is a tired, shady and parasitical model, it's time to change things for the better and people such as these are part of the problem, not part of the solution.

4/22/16

The Friday OT: Prince and 3rdeyegirl: She's always in my hair

Had to be him. Impossible to choose just one. Had to choose just one:



So it's a recent performance, it's Prince playing live (on Arsenio Hall), it's an example of his supreme guitar artistry which for some reason tends to get overlooked, the guy was truly world class and up with the best of the best.

In Arsenio Hall's words: "That's Prince ladies and gentlemen, it doesn't get any better".




Why IKN is hated by the people running the Canadian junior market community

Canada's stock market is populated by scam companies (see "the 900 zombies" post below) holding worthless properties that to a very high percentage (one in 5,000 is a typical figures bandied about) will never become an operating mine (let alone a profitable one). You don't need to be a rocket scientist to look at the history of the junior market, see all the failed companies, the rollbacks, the restructuring deals, the endless rounds of dilution, the broken promises and the lack of will by authorities to clean up the mining sector to know this. 

These moose pasture peddlers can only get their shares to rise by BS pump methods and the officers of these sham fake companies want the cash for one thing only; their back pockets. So they run to the parasitical promoters, by which I mean brokerage firms, financial institutions, commentary media, newsletters, marketers etc, who make their money by charging what are basically legalized bribes of highly dubious morality to companies in return for coverage.

The same people front-run their own recommendations, buying shares in companies then selling when they release their reports, leaving retailers holding the bag when the pump stops. They may claim not to do so, but their excuses and sophisms that leave out key facts and allow themselves loopholes (in case one of these fine days somebody finally sues the merry hell out of their two-faced asses) make it plain they're up to no good and making quiet, under-the-table cash.

The recent rise in gold has seen these excuses for human beings come crawling back out of the woodwork and, their desperation to fill their bank accounts with your money after two long and barren years, has resulted in some of the shrillest and blatant examples of pumping I've witnessed. And when one simple, free-to-own and free access blogspot blog points out these plain facts, notes that for every success there are dozens of failures, explains how retail investors face an uphill struggle, a playing field tilted to their great disadvantage, layers of people who want to put themselves between them and a potential winning trade (each one getting their slice of the money first) and starts shining light on the whole sordid, back-scratching industry, they don't like that. Not one little bit.

UPDATE: Reader 'RR' mails in (main excerpt):
"...the more IKN haters the better. Winston Churchill said "You have enemies? Good. That means you've stood up for something, sometime in your life.""
 

Goldman Sachs retains its Short Gold recommendation

Here below is the latest from Jeffrey Currie of Goldman Sachs. Do not kill the messenger. My thanks to reader 'N' this morning for sending it in.

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Maintaining our short gold recommendation

Our short gold recommendation (which we opened with 17% upside, in line with our $1000/toz 12-m forecast) is currently at a 3.3% loss, with a stop loss at 7%. The initial gold rally was driven by concerns regarding global growth and asset price volatility, and corresponding dovishness by the Fed, which saw gold outperform. More recently risky assets have rallied sharply, and gold has underperformed, as sentiment surrounding Chinese and global growth has improved, and as the market continues to price a dovish Fed.

Going forward we expect that recent and upcoming US data, supported by easing financial conditions, will likely result in a more hawkish Fed, higher yields, a stronger US dollar, and the return of divergence. This in turn will likely put downward pressure on gold prices towards our near-term target of $1100/toz (current price is $1248/toz). Indeed, gold has very limited near-term upside in our view, reflecting a limited ability of the Fed to surprise on the dovish side - the market is now only pricing 22 bp of rate increases during 2016, and given very high levels of gold net speculative positioning and ETF holdings.

Do Not Feed The Animals, zombie research edition

As IKN has noted previously, this a subject on which John Kaiser (of Bottom Fish) has been vocal and persistent over the years. But today a different voice chimes in, that of Tony Simon, co-founder of the Venture Capital Markets Association who gets a Peter Koven piece in today's FP. It starts like this:

TORONTO — The TSX Venture Exchange is overrun with more than 900 “zombie” companies with negative working capital, according to a new study.
The research comes from Tony Simon, co-founder of the Venture Capital Markets Association and a frequent thorn in the side of TMX Group Inc.’s management team. By Simon’s calculations, there are 910 companies on the Venture that are not meeting capital requirements for listings. He said the combined working capital of these companies, which are nicknamed “zombies,” is negative $4.2 billion.
“It’s a real mess,” he said in an interview. continues here

It continues in the same vein with more details and input from the TSXV as well and on reading, one cannot help but agree with Mr. Simon. 910 companies that don't meet the requirements and are allowed to play on by the market authorities? Complete madness.

However, perhaps more depressing is how the very same retail protesters who were calling for a cull and bloodletting at those Town Hall Meetings early year are the ones now buying up the moose pasture peddlers and allowing them to re-fund their hooker/blow lifestyles in private placements on magic dream stories about their asset potential. Seems to me that the main problem with the TSXV is the greed of Canadians, not the companies feeding off them.

You kinda wonder if Tony Makuch knows something...

...that we don't about Tahoe Resources (THO.to) (TAHO):



What that from the official SEDI site shows is basically the same as what's on Canadian Insider this morning, that Anthony Paul Makuch has dumped 718,960 of his own shares onto the market just weeks after becoming its Canadian country manager from the Lake Shore Gold merger. Even exercising some of his options to have more to dump just a couple of days ago.

Why so keen to sell, Tony? Know something we don't about the near-future of TAHO, Tony? Pethaps not expecting the quarter to come in magically, Tony? Perhaps expecting MacArthur to dilute shareholders even further, Tony?

Feeling a little defensive this week, Gwen?

Here's a section of the intro to this week's "Maven Letter", dated April 20th and sent over to your humble scribe by reader "L":
"The stocks I recommend are what I am buying. The Maven portfolio is my portfolio. I do not buy a stock before I recommend it and I do not sell before I say. I only participate in private placements of stocks that are already in the portfolio.

     I rely on a few other people to help me with this endeavor. First, like any good professional I have a network of friends and peers off of whom I bounce ideas and questions when I come across something I don’t understand (which happens with good regularity!). Second, researching and writing this letter, operating the business end of things, and corresponding with subscribers takes up all of my time. As such I have someone who helps me with marketing my letter and I work with a group of people to put on the Metals Investor Forum.

     None of these people know in advance when I will recommend a stock. Certainly none of them have a say in which stocks I will buy. If some of them are invested in the same equities, great; that means we see similar opportunities. But their investment accounts are separate from mine."


The art of wordsmith includes being able to give the correct impression without mentioning the facts that aren't so convenient. No mention of Scott Gibson and how he boasts he's going to make Gwen Preston a millionaire, no mention of the utter coincidence that the person Gwen Preston works for (rather than with) just happens to have bought a major portion of a private placement in a thinly traded peddler of cast-off Timmins moose pasture and that Ms. Preston coincidentally started promoting the stock just days afterwards. Yup, those seven years at Northern Miner weren't completely wasted, Gwen.

4/21/16

I was dreaming when I wrote this, forgive me if it goes astray

But when I woke up this morning could have sworn it was judgement day.


4/20/16

The Torex Gold (TXG.to) blockade is now over

As of late last night. To cut a long story short, TXG gave them money, they promised to be good.

Hasta la proxima...

Victoria Wood

A sad day.

UPDATE: An infinite number of things I could show you, Victoria Wood's genius shone so brightly. But instead of showing you acting or singing or in a monologue I've gone for this, in which she doesn't even appear.




One of the most famous sketches of the "Wood and Walters" TV show, Victoria Wood wrote the script, Julie Walters played the waitress. The mark of comedy greatness is being able to take a simple idea and do things like this. 

Sixty-two is way too early.

PS: A very good obituary in the Graun, here.

It's so bullish out there...

...that Dynasty Metals & Mining (DMM.to) is catching a bid:


For those of you who requested the "Tell me when this massively overbought market is topping near-term, Otto" signal.

Chart of the day is...

...silver (SLV) versus gold (GLD), 12 months:


Pretty interesting, or at least I think so. Note how silver has covered the approx 10% gap between it and gold in just a few weeks. Also note that spike back in May 2015, because history may not repeat itself but does have a tendency to rhyme.

Anyway, food for thought. And due to the uptick in shouting idiots in the sector remind yourself to do yourself a big favour, don't swallow anyone else's extremist entrenched bullshit, be they bear or bull.

4/19/16

Courtney Chamberlain's memorial service

Today marks the anniversary of Courtney Chamberlain's untimely passing and, in traditional Peruvian style, his friends and Minera IRL colleagues held a memorial service in the local church. Here's the scene (not my best photo, the light was strange)...

...here are a few of the people present (it was a decent turn-out)...

...and here's another traditional touch, the memento (it was April 20th 2015 in Australia, but the 19th in Peru due to time zones). 


Courtney Charles Chamberlain, R.I.P.

Torex (TXG.to) news

Hey, you remember that NR from Torex Gold (TXG.to) last week which tried to make it sound as though the protests by locals against the mine were all over? Not true, they're still going on, the mine is still blockaded. And if you look back at the Torex NR, you can see how it was carefully worded. Naughty naughty, Torex. 

By the way, the problem is how TXG has been polluting the local water supply and killing the fish, which means the local catches have dropped by 80% (if you believe the people who used to make a living by supply the local markets with fresh fish). They want compensation from the company, the company says no, the bad blood with the community goes on.

Peru: Early polls for the run-off vote

On Sunday, pollster IPSOS called it 44% PPK, 40% Keiko.

This morning, pollster CPI called it 43.6% Keiko, 41.5% PPK.

Take your pick. For what it's worth, subscribers of The IKN Weekly know my opinion clearly and I'm pretty sure one of those polls is way too truthy for its own good.

A Flash update...

...has just been sent to subscribers, just before the opening bell on this grey and overcast Tuesday morning*. A new purchase in a junior exploreco.

UPDATE: Some music to accompany...



I see you baby...

*it is here, anyway.

Chart of the day is...

...silver:


The constructive scenario we noted reported last Tuesday is confirmed.

There's good news for silver investors here (i.e. real people, rather than the propeller-headed silverbugs): At U$17/oz silver there's a decent chance that the mining company you decide to invest in can make money.

4/18/16

Tracking the political risk at Continental Gold (CNL.to) (from IKN362)

A small segment of this week's edition of The IKN Weekly:



Colombia: Government versus Paramilitary at Buriticá
Last week we reported how the far-right wing “Urabeño” paramilitary group (also known as the “Úsuga Clan”) had issued a formal death threat communique against personnel of Continental Gold (CNL.to). This week we note that the Colombian government has not been slow to respond: Firstly, in several actions against the paramilitary group the government claims to have arrested (9) 135 Úsuga members including the people responsible for the murder of three police officers at the end of last month (at the same time, a separate grande attack in Buriticá left four police officers seriously injured (10) (11). Secondly, President Santos has named the head of the Úsuga/Urabeños clan, one Dairo Antonio Úsuga David, as the country’s most wanted man and doubled the reward for information leading to his capture to 3 billion pesos (U$1m and loose change).

The Santos government is playing hardball with the threat posed by this paramilitary group and as part of the back-story, we’re now getting another raft of “illegal gold trade now worth more to criminal groups than drugs trade” articles, a theme that comes round on occasion and is complete BS of course, but there’s no doubt the criminal bands are behind at least some of the illegal gold mining activity and they’re using it to help launder their ill-gotten gains. In sum it’s a situation that may or may not turn out well for CNL.to and we certainly applaud the Santos government for not backing down. They’re doing the right thing by confronting the Úsuga/Urabeños but the reality of today’s situation must also be recognized; the political and social risk of working Buriticá continues to be off-scale high until the problems are resolved.

Don’t expect to read or hear about this in any of the CNL corporate presentations.



Gwen Preston and Scott Gibson

In last week's post "Understanding conflicts of interest, Gwen Preston and West Red Lake Gold Mines (RLG) edition" we uncovered the suspicious looking connection between the company in question, the self-titled "independent" mining analyst Gwen Preston and her apparent boss at "Kitco Gibson Capital" and "Beneath The Surface Capital", Scott Gibson. Since that post IKN has found out a lot more about this pairing of Gwen "Resource Maven" Preston and Scott Gibson. But we're going to keep it strictly business here.

Gibson has all the "Company XYZ Capital Inc" thing going on with his companies, but in fact he's nothing more or less than a penny stock promoter, true and classic Vancouver style. The way he bought 2m units of the recent ten cent RLG placement (and got another 261,000 papers in finder's fees) is typical for the way he operates.

Scott Gibson has now styled himself as the mentor of Gwen Preston. At PDAC 2016 he was very forward about the business relationship, telling trusted IKN sources that he was "going to make her (Gwen Preston) a millionaire". That's a direct quote.

On March 9th, the last day of PDAC 2016 the pair spent a long time in deep conversation, one-on-one, in the Intercontinental Hotel Toronto. Here's how another IKN source (who will also remain nameless) put it:
"I saw Gwen Preston and Scott Gibson staying there for hours as we were tired and chilling out for at least 2 hrs. They were not with anybody else. Only two of them apparently in serious discussion and planning. This I can say for sure as we were seated very close to them."

The timing of that is most interesting, of course. It came just days before Gwen Preston reco'd RLG to her subscribers and then started talking up the stock in all sorts of social media channels. It also came just before the aforementioned $575,000 placement closed, the biggest taker being Scott Gibson. Which is probably just coincidence, innit guv.

By the way, Gwen Preston likes to promote the fact that she learned her trade while a reporter at The Northern Miner, but the place she really found out about how to scam the retail world and get rich off their backs was the two years she spent working under Marin Katusa at Casey Research. Looking back it all fits the pattern, as nowadays her job consists of pumping penny stocks at the behest of a person who proudly proclaims will make her a millionaire.

There's your "independent analyst", Canada. Enjoy.

UPDATE: Reader "C" chimes in after visiting the Gwen Preston website:
"What really makes me wonder: In Canada you really can say things like, "I do not accept money or shares from companies in exchange for coverage." (source) and then pumping a stock hard while a company you are working for does?"


Primero Mining (P.to) (PPP) 1q16 production numbers

We now know that under Conway's tenure as CEO, to end 2015, Primero didn't pay its tax in Mexico and used sub-standard health and safety practices at San Dimas, preferring production over the well being of its workforce. He's also the one who insisted on buying that awful dog of a mine Black Fox.

The lessons taught by history. NR here.


PS: Anyone else notice the lack of skin in the game at PPP? The directors of this company own very few shares.

4/17/16

The IKN Weekly, out now




IKN362 has just been sent to subscribers. Main event today a new long position. Bongo bongo.

When miners die in Guatemala, Goldcorp (GG) (G.to) versus Tahoe Resources (TAHO) (THO.to)

Mining is a dangerous way to make a living, always has been and always will be. However, you learn a lot about a company in the way it deals with a fatality at one of its mines.

If you're Goldcorp (GG) (G.to) and if an accident occurs at your Guatemala mine, you first issue a press release on the day of the accident and then issue a second one when the fatality is confirmed, including words such as, "I wish to extend my prayers and condolences to the worker's family, friends and to his co-workers at Marlin" from the company CEO.

If you're Tahoe Resources (TAHO) (THO.to) and if an accident occurs at your Guatemala mine, you pretend it didn't happen. You ignore calls to make the accident public, you sweep it under the table, you don't even mention it to the local press, you don't even have the basic common decency to offer condolences to the dead man's family.

It's now nearly six months since the accident at Tahoe's Escobal mine that claimed the life of one of its employees, but TAHO still refuses to tell anyone.

Kevin MacArthur, CEO of TAHO, you should be ashamed of yourself. 



First Mining Finance (FF.v) and Moneta Porcupine (ME.to)

GMO reports that Keith is after ME.to, right here. Nice "creating unemployment" quote, too.