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2/3/17

The best thing about Belo Sun (BSX.to) at $1.04 today is...

...there's plenty more near-term upside to come. Just so you know.

The Friday OT: Elvis Costello and the Attractions: Oliver's Army

An earworm I've had all week.




Youtube here.

For those who care about Minera IRL trading today, follow it here

On this link. It opened at CAD$0.18.

A message for Daryl Hodges and Jaime Pinto

On the day that Minera IRL re-starts trading in Canada, a message for the two white collar criminals who tried to steal Ollachea from the IRL shareholders. For Daryl Hodges, who told Diego Benavides he would never be a director of the company, sacked him as CEO in order to clear a path for the fraud and instigated a criminal investigation on him based on falsehoods and lies that Hodges and his cohorts made up. And for Jaime Pinto, the corrupt lawyer now facing criminal charges in Peru for ripping off the government who swore to all who would listen in 2015 and 2016 that Minera IRL would never trade in a public stock market again.

Fuck you.

"The cheque's in the post"

It would seem that even people as dumb as Gold Reserve (GRZ.v) shareholders eventually being to work out their obsession company is not going to get any compensation money and that Doug Belanger is being played for a total patsy by the government of Venezuela.

 
Consider it a life lesson, guys.

Chart of the day is...

...the gold/copper ratio, five year chart:



Back to (new) normal.

2/2/17

(UPDATED) Minera IRL re-opens for trading in Canada tomorrow Friday

That's official. Here's the CSE announcement, expect a NR from the company soon.

UPDATE: For those of you in Canada watching and wondering how IRL might trade tomorrow, perhaps a look at how it's been trading in the three weeks of Peru Stock Exchange (BVL) trading might help. And note that the stock is traded in US Dollars in Peru:


Today's BVL close of U$0.115 is the equivalent of CAD$0.15 in Loonies at tonight's forex. So now you know.

Belo Sun (BSX.to): Who knew? Subscribers of The IKN Weekly knew

Here's the NR out just a while ago from Below Sun (BSX.to), announcing its permit award. It starts this way:

TORONTO, ONTARIO--(Marketwired - Feb 2, 2017) - Belo Sun Mining Corp. ("Belo Sun") (BSX.TO) has received the "Licenca de Instalacao" ("LI" or "Construction Licence") for its Volta Grande Gold Project from the Brazilian State Government of Pará under the environmental authority, SEMAS ("Secretaria de Estado de Meio Ambiente e Sustentabilidade do Pará" or "Para State Secretary of Environment and Sustainability").
The Construction Licence is the final governmental approval authorizing Belo Sun to proceed with the construction and development of its Volta Grande Gold Project. The project consists of continues

For the record, here's how the main analysis section of The IKN Weekly IKN402, out last Sunday evening, began:

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Belo Sun (BSX.to) offers a trade on permit award re-rating

Introduction
I believe there’s an opportunity for a near-term trade in Belo Sun (BSX.to), due to renewed talk that its Volta Grande gold project in Pará State Brazil is about to be awarded the necessary permits for construction and eventual operation by local authorities. I intend to act on this opportunity and buy shares in BSX next week, with a view to a near-term trade (count it in weeks, rather than month) that has a specific price target. Today’s report on BSX will therefore do four main things:

  • Set out the current corporate structure at BSX
  • Give a little background on the Volta Grande project itself
  • Go over the latest developments and the reasons I’m finally interested in this stock (after a long long time just watching it
  • Figure out a reasonable, near-term target price for the stock.

So without further ado...
 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx


Then followed 5 pages or so on the company. Just saying. And yes, I bought some on Monday at 90c. Have a pleasant day.

Dilbert explains Canadian brokerage valuation methods for junior mining companies

This is exactly correct.


Belo Sun (BSX.to)

Bingo.

Even more New Gold (NGD): S&P downgrades its debt rating

My thanks to A. Reader for this one:

New Gold Downgraded to B from B+ on Weaker Liquidity; Outlook Negative: S&P Global Ratings lowered its long-term corporate credit and senior unsecured debt ratings on New Gold to B from B+. The downgrade primarily reflects the expected deterioration in New Gold's liquidity position related to delays at the company's Rainy River development project in Ontario. The company announced it has budgeted an additional $195 million of capital expenditures to achieve commercial production by Nov. 1, 2017--about three months behind schedule. S&P now expects New Gold will face a liquidity shortfall in 2017 if it doesn't raise new funds required to complete the project. Although S&P’s ratings on New Gold have incorporated the risks associated with the new mine development, S&P now believes the company's financial flexibility has materially weakened. (S&P Global Ratings)


And even though this is cold sweat material for the company, I promise you, hand on heart, you'll still get idiots in the market today who see "value in the equity at this price". There are some people who need to learn the hard way what "equity" really means, y'see.

Stop visiting this blog...

...every hour and a half, there's really no need to do all that Internet 1.0 stuff, people. To make you life so much easier, try this instead:

1) Click this link to the Google Feedburner 100% free e-mail subscription service to this blog.
2) Stick in your email address and the anti-spam code, hit the "complete subscription" button.
3) When the confirmation mail arrives in your inbox a few seconds later, click the link inside it.
4) Voila! You will now receive all the IKN posts in any given day, the next morning (Americas time) in a nicely packaged daily e-mail with no annoying adverts and no extra spam, either (Google runs the service, they're nice like that).

So add a little efficiency to your day and stop hanging round this blog all the time, I'm getting way too many hits at the moment and it has to stop. Click here, join the free daily IKN blog subscription service and get some work done during your day, slackers.

Chart of the day is...

...gold, dailies:




No further comment necessary.

Some insider trades are more interesting than others and...

...this Gran Colombia Gold (GCM.to) sale is one of the interesting ones:


Arata starts to follow Giustra out the door of GCM. The funny thing is that Arata still has 6.4m shares of this utter dog to dump onto the market. Make sure you're not the one stupid enough to buy into this mess.




Deloitte: 10 mining trends for 2017

The 2017 edition of Deloitte's "Tracking the Trends" is out now. Here's part of the blurb:

The 2017 edition of Tracking the trends explores the top 10 issues mining companies may face. Once again, Deloitte’s global mining professionals share their experiences to help pinpoint strategies companies can take to succeed in today’s ever-changing market environment. This year, we also included a range of case studies to showcase how some companies are bringing new solutions to life.

Go read it all here and get your free PDF download of either the executive summary report or the full report from the page, too. Or both, of course.


Zinc One

This short post is to stop my mailbox from getting full.


The Forrester Bongara deposit is a piece of crap. End.

(UPDATED) The Philippines mining suspensions are announced and OceanaGold (OGC.ax) (OGC.to) is down 18% in Australia trading

Here's the news report, here below is the paste out and OceanaGold (OGC.to) (OGC.ax) and its Didipio mine is on the list of suspended companies.

B2Gold (BTO.to) (BTG) and its Masbate mine is in the clear.

My thanks to reader AM.

UPDATE: OGC just published this NR.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

MANILA, Philippines (UPDATED) – The Department of Environment and Natural Resources (DENR) announced the closure of 15 mining operations on Thursday, February 2.
"We have decided to close any kind of mining operation in functional watersheds," Environment Secretary Gina Lopez said at a press conference on Thursday.
Lopez said the mining operations to be closed are of the following firms:
  • BenguetCorp Nickel Mines Incorporated
  • Eramen Minerals Incorporated
  • LNL Archipelago Minerals Incorporated
  • Zambales Diversified Metals Corporation
  • Mt Sinai Mining Exploration and Development Corporation
  • Emir Minerals Corporation
  • Techiron Mineral Resources Incorporated
  • AAMPHIL Natural Resources Exploration
  • Krominco, Incorporated
  • Oriental Vision Mining Philippines Corporation
  • Libjo Mining Corporation
  • Adnama Mining Resources, Incorporated
  • Platinum Group Metals Corporation
  • Claver Mineral Development Corporation
Meanwhile, Lopez also announced the suspension of the following mining firms:
  • OceanaGold Phils Incorporated
  • Lepanto Consolidated Mining Company
  • Citinickel Mines And Development Corporation
  • Berong Nickel Corporation
  • Ore Asia Mining and Development Corporation

UPDATE 2: Here's a segment from this report:


Lopez also announced that the operations of four companies were suspended due to violations. They would be allowed to operate once these issues were addressed.
Suspended are Oceana Gold Mining Operation in Nueva Vizcaya for causing reduced agriculture production of farmers in the area, Citnickel Mines and Development Corporation in Narra, Palawan for siltation of river and farm lands, Lepanto Mines and Development Corporation for leakage of mine tailings into the river and Ore Asia Mining and Development Corp for siltation of rivers.
Lopez said the DENR is “fully aware” that many workers in the mines would be affected, but the welfare of the people in these areas was more important.

2/1/17

Peru gets a new mining minister

The way it works in Peru is you have a cabinet level Minister of Energy and Mining, then under that post a Vice Minister of Energy and a Vice Minister of Mining. As the current Minister, Gonzalo Tamayo, is very much from the Energy side of the sector the Vice Minister of Mining is the de facto number one government guy for the mining industry.

Through the Ollanta Humala administration and into the first six months of the current PPK government the Vice Minister of Mining has been Guillermo Shinno, but as from this afternoon that's all changed. Shinno has been replaced by Ricardo Labó, who has a long history in the Peru mining world and comes from Rio Tinto where he was high up in the La Granja project. And if you want to know how Labó sees the world of mining, you can check out his 2016 columns published in Peru bizmedia site Semana Economica.

Human limbic reactions do not make good investment strategies, New Gold (NGD) edition

Seen it once, seen it a thousand times. The latest is NGD and it's straight from the classic mould:


And by the way, the answer to 4) is "Yes, oh yes, yes madam and yes sir, it really can be that bad". So take some advice from King Arthur:


Catching up with the Encanto Potash (EPO.v) rip-off

In the IKN post "The Encanto Potash (EPO.v) rip-off" dated January 20th, we pointed out the dirty self-serving double deal behind that company's news pump the day before, the one that EPO.v wanted to keep quiet and somehow forgot to mention in its rah-rah NR. So let's see how the stock's been doing since the cruel reality was revealed by this humble corner of cyberspace:



Just 26.7% down? Volume dried up to a trickle? Dumbass greenhorns who take junior  mining NRs at face value and rushed in now sweating on their bags?

Thank me later.

There seems to be some confusion regarding environmental permitting of gold projects in Alaska (UPDATED)

First we have long-time market scamster Marin Katusa pumping Northern Dynasty's Pebble project, preying on the ignorance of naive mining greenhorns with more money than sense, with the whole thrust of this crazy pump being "Trump will award the permits". Now we have another scumball on the bandwagon, Michael Ballanger over at The Gold Report trying to make the case for NadaGold's Donlin gold project, also in Alaska...
"NOVAGOLD's announcement that it is nearing the end of the Environmental Impact Statement process at its 50%-owned Donlin Gold project in Alaska was welcomed by a pair of observers."
... by swatting out a paid-for pump piece on NG and rebounding comments of people already long and with vested interests in the stock. Which is all very nice I'm sure, but this whole new pumperooney on these dogs misses a vital point: They're both dogshyte projects, marginal at best, most likely uneconomic in real terms even under much higher gold prices and with crazily high capex costs. Pebble has low grade gold that doesn't report to the copper cycle (which is why Cominco sold the thing to HD in the first place) and Donlin is notoriously refractory. So forget the permit papers and even ignore the significant local opposition, it doesn't matter how many papers with signatures they get because they're not going to be mines. Permitted or not. Ever.

UPDATE: Thanks for the mail Michael, and so quick to write in too! It's certainly nice to know you care. Will you be seeking damages?

Cordoba Minerals (CDB.v) and those warrants

We know Cordoba Minerals (CDB.v) needs to raise a bit of working capital. We know it has a real tiger by the tail now at San Matias. We also know this (from the company Financials):


15m warrants lapse in less than a week's time at $1.50. At the bell today CDB opened at $1.49. Interesting dynamics, no?

And Red Eagle (R.to) expands its bot deal to $15m

Shocked! Shocked ah wuz!

And Alamos (AGI) re-prices to $7.25

Isn't that cute!

1/31/17

The Alamos Gold (AGI) bought deal is falling badly flat

Word reaches this humble corner of cyberspace that the Alamos Gold (AGI) bought deal announced January 26th 2017, in which 31,45m shares are being sold by a suite of underwriters at U$7.95 a pop in order to raise a cool U$250m, is failing badly. According to reliable sources close to the book, just 20% of the shares have been placed so far and what with this being a bought deal, that means there are a whole bunch of bankers who aren't sleeping so very well right now.

How many? Well the bot deal is being led up by TD Sec, BMO Capital Markets and Macquarie Capital Markets Canada but below them, houses on the hook of this John McCluskey snafu also include CIBC, National Bank, Scotia, Desjardins, Haywood, Paradigm, RBC, Barclays Canada, GMP, HSBC Canada, Merrill Lynch Canada, RayJames, Citigroups Canada and Morgan Stanley Canada. Phew, quite a list.

And due to the failure to place these shares, all of those houses are going to be left holding their portion of this very large bag. And that means they'll all be squabbling and fighting to sell their bags into the market once this screw-up placement closes, trying to break even. In other words, McCluskey in his desperation to own the biggest penis compensation treasury in town has created The Mother Of All Overhangs on his own stock.



Whoops indeed.



The Red Eagle (R.to) bought deal term sheet

One thing's for sure; this overallotment will be fully filled. The only question I have is whether (and by how much) this bot deal gets expanded.


UPDATE: Six hours in and strong intel reaches IKN Nerve Centre that this is a very popular issue, they're beating money off with sticks and the chances of the bot deal being expanded are now very high. Look for this one to go to $15m (that's 17 and bits with the overallotment)

Minera IRL confirmed on CSE

This just received from Rob Theriault, director of Listings and Regulations of the CSE exchange in Canada:
Minera IRL has been granted final approval for listing on the CSE. We’re waiting for the Company to confirm their preferred listing date.

Regards,
Rob Theriault

As for when (to answer a couple of mails), I don't know for sure but I'd have a small bet on this Thursday or Friday. You're best asking IRL about that.

A couple of New Gold (NGD) balance sheet charts and the boring reasons behind this disaster stock

I was playing around with the model last night. Here's the one at the business end of the current SNAFU, working capital:


It beggars belief that an operating gold mining company could dive into negative working cap (i.e. cash crunch coming) after all this time and gold at U$1,200/oz, but here we are. There's no a lot of talking about NGD raising cash via an equity placement (I've head U$200m and U$300m numbers bandied about this morning) but even so, that kind of dilution will only be a BandAid compared to the true long-term problem at this screw-up, its liabilities position.

That near U$800 in financial debt isn't going anywhere. It all reminds me of the stupidities that now ex-Head Honcho Randall Oliphant spouted on BNN last year, all that about how the IRR wasn't so important because a lot of the capex was now embedded at Rainy River. That's just dumbtalk for the peanut gallery (aka the shareholders tending to their wounds this morning), the ones that believe any old soft soap silliness from mining executives. Because cash spent or not, balance sheets matter people. Boring but true.

Torex Gold (TXG) entrances again blocked by locals

On Sunday, the entrance to the Torex Gold Media Luna gold mine in Guerrero State Mexico was once again blockaded by locals protesting against the environmental damage being caused by the company. The main bone of contention, once again, is how the fish population has died off in the local river since the start-up of operations which has deprived local fishermen of their trade. The affected families have for months demanded compensation from the mine, which has refused to talk to them. The protest continues, so does TXG's indifference towards locals.

1/30/17

Mo' New Gold (NGD): Praise for Josh Wolfson of Dundee Capital

IKN Nerve Centre has been giggling and guffawing all morning about the New Gold (NGD) news; yet another cost overrun and now Randall Oliphant's head has finally rolled. Quite right too after this serial disaster and don't say IKN didn't try to tell you so either, this humble corner of cyberspace has been telling you the bleedin' obvious about this stock for literally years. And on the subject of mirth and crow pie, we've also seen a raft of downgrades from the sellside brokewhoreages, all trying to paper over the way they've been pumping this dog of dogs to their hapless clientele for years. I've seen downgrades from Canaccord, Credit Suisse and Desjardins already, you probably know of more.

However, as IKN spends too much of its time spanking the collective bottoms of the stuffed suit anal ysts in sellside, it's only fair that we lavish praise when one of their ilk has the balls to do the right thing at the right time. WAY WAAAAAAY before the herd cottoned on, Josh Wolfson of Dundee Capital had the smart eye, the common sense and the guts not just to "downgrade to hold" on NGD but to call outright sell on the stock. Here's the screenshot from his May 25th 2016 report as proof:



So well done Wolfson, kudos deserved for making the right call at a tough time and also sticking with it. A lot of your peers are looking decidedly dumbass this morning, you should bask in glory.

New Gold (NGD): The White Oliphant is now officially a laughing stock

Today's NR from Randall Oliphant's graveyard makes the updated capex chart for Rainy River look like this:


Seriously, what a total clusterfark. Any thoughts on why the COO was resigned in December? Anyone?

PS: Oh yeah, nearly forgot: "...Randall Oliphant to step down as Executive Chairman..."


Chart of the day is...

...gold bullion inventory at GLD, the main gold ETF, U.S Presidential election to date:

Please note cut down Y-axis


We're now at 799.07 metric tonnes, 155.96 metric tonnes less than when The Donald got a new job.

Mailbag on Yamana (AUY) (YRI.to) and Brio Gold (BRIO.to)

Last week your humble scribe noticed that the hilarious whores at Canaccord had opened up coverage on Brio Gold (BRIO.to), calling it the next wonder thing and with seasoned management and optionality on gold and every other cliché they could roll out about this Marrone/Clausen anal violation of shareholders. So it was a relief to get some smarter words on AUY and Brio from A. Reader this weekend, who has a fine memory for the way Marrone has ripped off the market on previous occasions and was kind enough to write in with this:


Dearest Otto,

What does the Aura Gold Transaction by Yamana in 2010, have in common with the Brio Gold conundrum today? The Aura one was an asset sale which cost shareholders of YRI-AUY hundreds of millions, while the Brio one is..., well. The Brio one is...good?
"Aura has agreed to purchase 3 open-pit heap leach gold mines in Brazil and Honduras from Yamana Gold (AUY-NYSE, $9.50).  The acquisition cost has an assumed total value of $257.1 million.  This purchase price comprises $90 million in cash (two instalments), 100 million in common shares (pre-rollback), a $70 million promissory note and up to $40 million of contingent royalties, based on production. The net present value of this transaction is slightly less than $250 million.

If the change in Yamana's market cap is to be considered a proxy for the transaction, Aura appears to have picked up assets on the cheap.  One view regarding the low sale price may have to do with the fact that several key Yamana Gold executives work for Aura Mining.

The deal was considered to be at arm's length and passes a cursory test. In the real world, however, some arms are much shorter than others."

In addition, it gets even funnier when you take in the multiple conflicts of interest by Mr. Marrone and his jolly crew.


Gold Resource Corp (GORO) has blood on its hands

Finally, the despicable scumbags at GORO have been forced to fess up for the death IKN reported nine days ago, the one they tried to keep away from the market and shareholders. And why? Because there was another death at their mine two days ago!
COLORADO SPRINGS, CO--(Marketwired - Jan 30, 2017) - Gold Resource Corporation ( NYSE MKT : GORO ) (the "Company") is saddened to report that an employee was fatally injured at its Arista Mine in Oaxaca, Mexico on January 29, 2017. The accident involved the operation of heavy equipment inside the mine.
The Company has voluntarily suspended mining and milling operations and expects to allow up to 48 hours before resuming operations to provide time to review and strengthen safety policies, procedures and protocols at all operations. Investigations by both the Company and the government into the circumstances surrounding the accident are currently underway.
This accident follows a recent unrelated fatality of a worker employed by a narrow-vein mine contractor at the Arista Mine as a result of a ground fall event.

You can't help but wonder if the second fatality would have been avoided if the company hadn't tried to cover up the first one. And you need to read about what happened in the first event, it makes a mockery of the company's claim that they "immediately contacted" authorities.

1/29/17

The IKN Weekly, out now




IKN402 has just been sent to subscribers. Pen pineapple apple pen.

The new Global Mining Observer is out...

...and the main piece is the eagerly-awaited second part to its series on Michael O'Keeffe (Champion Iron etc). Go read it all right here.

David Foster Wallace on Roger Federer

We've just witnessed greatness.

The IKN tribute: Many people consider this 2006 article by DFW as the greatest piece of sports writing ever. And as I've read it at least 20 times in my life and did so again this morning, yup you can count me as one of them. Here's how it starts:

Almost anyone who loves tennis and follows the men’s tour on television has, over the last few years, had what might be termed Federer Moments. These are times, as you watch the young Swiss play, when the jaw drops and eyes protrude and sounds are made that bring spouses in from other rooms to see if you’re O.K.
The Moments are more intense if you’ve played enough tennis to understand the impossibility of what you just saw him do. We’ve all got our examples. Here is one. It’s the finals of the 2005 U.S. Open, Federer serving to Andre Agassi early in the fourth set. There’s a medium-long exchange of groundstrokes, one with the distinctive butterfly shape of today’s power-baseline game, Federer and Agassi yanking each other from side to side, each trying to set up the baseline winner...until suddenly Agassi hits a hard heavy cross-court backhand that pulls Federer way out wide to his ad (=left) side, and Federer gets to it but slices the stretch backhand short, a couple feet past the service line, which of course is the sort of thing Agassi dines out on, and as Federer’s scrambling to reverse and get back to center, Agassi’s moving in to take the short ball on the rise, and he smacks it hard right back into the same ad corner, trying to wrong-foot Federer, which in fact he does — Federer’s still near the corner but running toward the centerline, and the ball’s heading to a point behind him now, where he just was, and there’s no time to turn his body around, and Agassi’s following the shot in to the net at an angle from the backhand side...and what Federer now does is somehow instantly reverse thrust and sort of skip backward three or four steps, impossibly fast, to hit a forehand out of his backhand corner, all his weight moving backward, and the forehand is a topspin screamer down the line past Agassi at net, who lunges for it but the ball’s past him, and it flies straight down the sideline and lands exactly in the deuce corner of Agassi’s side, a winner — Federer’s still dancing backward as it lands. And there’s that familiar little second of shocked silence from the New York crowd before it erupts, and John McEnroe with his color man’s headset on TV says (mostly to himself, it sounds like), “How do you hit a winner from that position?” And he’s right: given Agassi’s position and world-class quickness, Federer had to send that ball down a two-inch pipe of space in order to pass him, which he did, moving backwards, with no setup time and none of his weight behind the shot. It was impossible. It was like something out of “The Matrix.” I don’t know what-all sounds were involved, but my spouse says she hurried in and there was popcorn all over the couch and I was down on one knee and my eyeballs looked like novelty-shop eyeballs.
Anyway, that’s one example of a Federer Moment, and that was merely on TV — and the truth is that TV tennis is to live tennis pretty much as video porn is to the felt reality of human love.


Dedicated to Roger of course, and reader 'C'.