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5/12/17

In The IKN Weekly this Sunday...

...a new Top Pick stock, to join the two other stocks already designated as Top Picks. Those two Top Picks and up by 59% and 200% since inception and I expect this third one to return the same kind of percentage gain in the next 12 months, the right stock in the right metal in the right place at the right time. It also means I'll be a buyer of the third stock on Monday, we eat our own cooking round these parts (but we don't front-run). See you Sunday, subbers.

Peru political risk may be about to go through the roof

To paraphrase The Parrot Sketch, the Odebrecht corruption and bribery scandal isn't dead, it's just restin'. From what your humble scribe has heard this week, the month of June is due to start with real fireworks in Peru. The game's afoot and those of you who have been lulled into believing Peru is some sort of stable, biz-friendly panacea may well be in for a big shock.

An intraday chart of Northern Dynasty (NAK) (NDM.to)

The NYSE flavour:


What a freakin' scamshow this stock is. PT Barnum lives.

The Friday OT: Manu Ginobili, Spurs vs Rockets, game five

Three and a half minutes of sporting wonder. The Spurs were short-handed with injuries coming into the game and went to Ginobili, who played 39 minutes and rolled back the years in amazing style.



Wait for the 20 second advert to run at the start (it won't hurt), then watch Manu play one of the most emotive games of basketball ever. And that block, my stars. Youtube here.




Three ways to spot a bad statistic (a TED talk)

I'm no big fan of TED Talks but when this plopped on my desk last night I watched and was very impressed. Presented by "data Journalist" Mona Chalabi (I've seen her on Neil deGrasse Tyson's cable show Star Talk) it's worthy material for IKN even though not about mining, as this type of questioning of numbers and the people who try to spin them at you is part and parcel of what goes on at this humble corner of cyberspace.




As well as being a fun 11 minute presentation, it's an excellent and accessible introduction into the world of stats crunching which, along the way, points out why government stats are usually better quality databases (at this point, conspiracy theorists among you will start laughing and that's good, assholes aren't very welcome at IKN anyway). What I particularly like are the three questions she offers to frame your thoughts on stats and what they're trying to tell you:

Can you see uncertainty?
Can I see myself in the data?
How was the data collected?

Watch the whole thing to see why those are smart trigger questions for further use. The link to the TED talk page is here. You can also read the full transcript over there, or access versions with different language subtitles.

Chart of the day is...

...gold dailies, updating that 'simple gold' thought from earlier in the week:


That looks very promising for gold longs.

Mining PRs and the Ottotrans™, Part 100

 

Oh my Gawd! Our occasional series that turns mining gobbledygook into normal English has made it to edition ONE HUNDRED and it's an apt and fitting NR to boot. Today we consider the three squillion word nonsense vomited out by Northern Dynasty (NDM.to) (NAK) and boil the real contents down to just nine words.
VANCOUVER -- May 12, 2017 - Northern Dynasty Minerals Ltd. (TSX: NDM; NYSE MKT: NAK) ("Northern Dynasty" or the "Company") announces that its wholly-owned subsidiary, Alaska-based Pebble Limited Partnership ("Pebble Partnership" or "PLP"), and the US Environmental Protection Agency ("EPA") have reached a settlement agreement with respect to the parties' longstanding legal dispute over the federal agency's pre-emptive regulatory action under Section 404(c) of the Clean Water Act.
Under the terms of the settlement agreement, EPA has agreed the Pebble Project can proceed into normal course permitting under the Clean Water Act and National Environmental Policy Act. In particular, EPA has agreed it will not file a Recommended Determination under CWA 404(c) until a final Environmental Impact Statement ("EIS") for the Pebble Project has been completed by the US Army Corps of Engineers (the "Corps") -- so long as that occurs within a period of four years following the settlement agreement and PLP files permit applications within 30 months of the date of the settlement agreement. EPA has further agreed to initiate a process to propose to withdraw the Proposed Determination it issued under CWA 404(c) in July 2014. In return, the Pebble Partnership has agreed to terminate permanently and with prejudice two lawsuits it brought against EPA: an action under the Federal Advisory Committee Act and an action under the Freedom of Information Act.

"From the outset of this unfortunate saga, we've asked for nothing more than fairness and due process under the law -- the right to propose a development plan for Pebble and have it assessed against the robust environmental regulations and rigorous permitting requirements enforced in Alaska and the United States," said Ron Thiessen, President & CEO. "Today's settlement gives us precisely that, the same treatment every developer and investor in a stable, first world country should expect."

Northern Dynasty and the Pebble Partnership expressed their gratitude to EPA Administrator Scott Pruitt and President Trump for their commitment to the rule of law, and the fair and equal treatment of those who would invest in job-creating industries in America. The Company also thanked members of US Congress and the Alaska State Legislature who helped in achieving the goal of due process for Pebble -- in particular, members of the House Committee on Science, Space & Technology, House Committee on Oversight & Government Reform and Senate Committee on Environment & Public Works.

"The Pebble Partnership will advance a progressive mine plan, including mitigation, to be assessed by objective, expert regulators at the US Army Corps of Engineers and a raft of other federal and state agencies -- including EPA", Thiessen said.

"Not only are we no longer facing extraordinary development restrictions at Pebble, we will also be assured a fair and predictable permitting review of our proposed development plan. The Corps-led EIS will be prepared by independent, third party experts to ensure that decisions are based on objective science, and that public and stakeholder participation is comprehensive and meaningful."

Thiessen said the Pebble Partnership has been advancing planning for a smaller project design at Pebble than previously considered, and one that incorporates significant environmental safeguards.

"It will be a busy and exciting year for Pebble and Alaska," confirmed Pebble Partnership CEO Tom Collier. "Not only will we be rolling out a project that is smaller, with demonstrable environmental protections, we will also be announcing a number of new initiatives to ensure our project is more responsive to the priorities and concerns of Alaskans.

"We know the Pebble Project must not only protect the world-class fisheries of Bristol Bay, it must also benefit the people of the region and the state in a meaningful way. It is our intent to demonstrate how we will meet those goals in the period ahead."

Collier said a return to an objective, science-based and predictable permitting process at Pebble will bode well for future resource investment in Alaska and the US.

"Resource investors do not have an expectation that we will always receive development permits or always receive them on the terms we would prefer, but we do have an expectation of fair treatment under the law, and that science, not politics, should guide permitting decisions," Collier said.

Investor Conference Call Details
Northern Dynasty will host a conference call today, May 12, 2017, at 11:00 AM Eastern Time to discuss the EPA settlement and the Pebble Project.

Investors can participate in the conference call by:

Webcast: http://event.on24.com/wcc/r/1427716-1/555FD3FD583595BBA5220FB0C9D12EF6

Telephone: (877) 245-7303 in Canada and the USA or (478) 219-0731 international.

Passcode for the call is 22904301.

A presentation will also be available by going to the Northern Dynasty's corporate website at www.northerndynastyminerals.com.

Please go to the website at least 15 minutes prior to the call to register, download and install any necessary audio software.

A replay of the webcast will be available on the Investors page of Northern Dynasty's website beginning at 2:00 PM Eastern Time on May 12, 2017, through 11:59 PM Eastern Time on June 12, 2017.

About Northern Dynasty Minerals Ltd.

And this is what it means:

It's still years before anything happens.  Or never.

5/11/17

Fave quote repeat



"You can achieve anything you want in this world as long 
as you are willing to let somebody else take the credit."


Your humble scribe at IKN Nerve Centre sincerely hopes that the person to which this post is addressed (i.e. a specific participant of today's mailbox) basks luxuriously in their fame and enjoys its sensations and sophisticated emotions to the full, whilst never realizing how much of an asshole they truly are. Cryptic post ends, nice day happy day pretty flower bouquet.

Gary does the Gold/Silver ratio

Or as he puts it (quite correctly), the silver/gold ratio. Read meistercharter Gary Tanashian on the relationship between the price of gold and silver right here, it'll give you a taste of why the best TS practitioners don't consider their charting as a end of the argument, but merely a beginning. Respect due.

AngloGold Ashanti Colombia changes corporate strategy

Due to having nothing else to do and with an obvious desire for at least some cash flow...




...AngloGold Colombia is going into the ice-cream business.

Two days ago...

...on May 9th, your humble scribe wrote short'n'sweet positives on the price of gold...

 "...if the drop stops around here, it could be a whole 
lot of upside fun and frolics in the near future."

...and on Sandstorm...

"It's amazingly cheap right now."

...Gold (SSL.to) (SAND).

Two days later, gold did indeed bounce on that red line, is $10/oz higher and suddenly moving like a champ. Meanwhile SAND is up nearly 10% and making Doody look like the tool that he is. And let's be clear, SAND has only just started on its rebound move, there's a ton of upside left to come on this move. It may take a few weeks, the info lockdown at the company while its purchase of the AIM-listed MARL goes through will make sure of that so you're not going to get much market pumperation in the meantime. But the savvier among you should love that, not hate it. Further questions?

A great deal for Continental Gold (CNL.to)

Today's news out of Continental Gold (CNL.to) that Newmont is taking a 19.9% equity position in the company is a strongly positive event. Reasons:

  • Obviously, the premium of the ticket price to recent market price is eye-catching.
  • Securing the capex needed to get to production day one. Positive.
  • The fact that the technical team is now a JV with NEM people, plus NEM gets a seat on the board, will alleviate the corporate risk seen by many in the sector towards CNL to date (with one major exception, Don Gray was a great appointment). Positive.
  • For a company of its size, it's a cheap way for NEM to get a foothold and become the obvious eventual owner if and when Buriticá works as a mine, once it's all up and running in 2020 or whenever. Nice risk/reward equation for the big boy.
  • And we should also commend CNL for being able to keep this gig quiet, there was no reflection of the advanced nature of this deal in recent share price action. For a company with a previous reputation of being a leaky boat (your author eye-witness), Ari Sussman and his team should be commended.

CNL won't trade up at C$4.00 immediately, but we should get a big pop when it opens (my guess is +30%). Also, I could get catty and mention that I managed to sell my position in CNL earlier in the year for a higher price than NEM's $4 purchase. Meow meow and unfair on all sides. The real message is that CNL should be congratulated by one and all for today's deal. It's now time to build the mine and make it work. IKN applauds you, Ari Sussman.

PS: Red Kite further on board is good too, of course.

UPDATE 11am: CNL just dinged +30% on the day. Good shot.

Yamana's (AUY) (YRI.to) desperation to get out of BRIO: The fun never stops

It was hardly the first time, for those of you who remember the Titanic-meets-iceberg attempt a couple of years ago, but all we need to remember is back in November and December of 2016 when Yamana (AUY) told us it was selling Brio Gold (BRIO.to) in a secondary? These were the terms in November...

The final prospectus qualifies the distribution of an aggregate of up to 59,225,957 Brio Shares at a price of C$3.25 per Brio Share (the "Exercise Price") upon the exercise of up to an aggregate of 59,225,957 Purchase Rights, for aggregate gross proceeds to Yamana of up to C$192,484,360....

...Brio Gold will become a standalone public company effective as of the closing date of the Offering, with Yamana holding 46.3% (on a non-diluted basis) of the issued and outstanding shares of Brio Gold. The closing date of the Offering is expected to occur on or about December 23, 2016. 
But when the dust had settled, this is what they managed to achieve:
"A total of 17,324,507 Brio Shares owned by Yamana were transferred pursuant to the transactions ...Yamana continues to be a significant shareholder of Brio Gold, holding approximately 85% of the issued and outstanding Brio Shares."

So, 17.325m shares of BRIO at C$3.25. Then in March, Marrone managed to hoodwink some fund manager into buying a 6m block at C$3.35.

And now? This:
YAMANA GOLD INC. (TSX:YRI) (NYSE:AUY) ("Yamana" or the "Company") is pleased to announce that it has, along with Brio Gold Inc. ("Brio Gold"), entered into an agreement with a syndicate of underwriters (the "Underwriters") co-led by Canaccord Genuity Corp., CIBC Capital Markets and National Bank Financial Ltd. pursuant to which the Underwriters have agreed to purchase 26,667,000 common shares of Brio Gold currently held by Yamana on a bought deal basis at an offering price of C$3.00 per Brio Gold common share ("the Offering").

On the back of the BRIO 1q17 financials that came in better than expected, AUY goes back to the well once again but this time they've handed over the execution risk in exchange for a haircut. The new C$3 number still makes BRIO crazily expensive, but those sell side desks will now pump it for all they're worth in exchange for the commish. You'll also notice that they still can't get rid of the full amount planned back in November, it's going to be 53% AUY after the dust has settled so you can bet your sweet bippy there's more fun to come later on.

To all this, IKN has simple questions: Do these people think we haven't noticed? Does Marrone believe that his obvious and absolute desperation to dump the doggist end of his asset book hasn't been clocked and registered by the market? Do the brokerages on the other end of this bought deal think there are enough idiots and suckers to soak up these shares?

Of course, the answer to that last one is a resounding YES. Retail, the crop that never fails.

5/10/17

Argentine inflation is not coming down under Macri

Today Argentina's INDEC reported inflation for the month of April at 2.6%, plenty above expectations (once again). Yeah, that's just for the month, it means the annualized inflation rate is at 27.5% and in just the first four months of 2017 it's totalled 9.1%. To put that into context, the Central Bank's forecast for 2017 inflation was at between 12% and 17%, which means that they only have another 7.9% to play with for the eight months left of the year. 

Don't expect this to be reported much by the Northern press, who have fallen meekly into line and are giving "pro-business" Macri a permanent free pass, a big change from the constant kicking they handed out to CFK for similar macro figures. But when Macri "unexpectedly" flops in the 2017 mid-term election and his presidency turns into an immediate dead duck, it's going to be a whole lot harder to ignore the plain facts of Argentina's failure to turn around under Macri. For more on how CFK is leading in the polls for the key mid-terms, read here.

Interesting Gold Reserve (GRZ.v) filings on SEDAR today

Looks like Belanger's suspicious cahooting with the Venezuelan government and his cozy lifestyle free ride is coming to an end. Here's just one segment:

"Consistent with the foregoing, Greywolf recently has discussed in general terms the topic of Board composition and related matters with certain of the Company’s directors and members of senior management. Greywolf may engage in future communications on such matters with members of the Board, members of the Company’s senior management, other Company security holders, or other persons."

Joe Mazumdar reviews the major gold producers

Here's 24 minutes of the lovely, hunky, handsome, near-edible-he-so-good Joe Mazumdar and his talk at the recent Metals Investor Forum, entitled "Too Big to Fail? A Review of Major Gold Producers".



Exploration Insights is several cuts above all mining newsletters. Equally, Mazumdar's presentations are several cuts above the normal guff and nonsense on the PM speaker circuit. A lot of crunching on reserves held by the big(ger) caps, whihc you'd expect from a guy who's always trying to work out which junior is going to get bought by which major. Also, a nice walk through on Free Cash Flow Yield in the middle of the talk, which shows how you need to know where the numbers come from , not just take the number at face value. Well worth your time.

Tahoe Resources (TAHO) (THO.to) and gaps

Chances that TAHO breaks down through U$8 in the near future?



If the last six months of gap-filling is anything to go by: High.

And yeah, TA really isn't usually my thing (many many fools get fooled by its randomness) and the barrier to entry for being a "TA expert" is low (even lower than being a blogger, that's saying something). But when you combine the pattern showed by TAHO with the undeniable fact that this is a seriously pumped company and a lot of sell side anal yst whoredom jobs depend on getting people into the stock, the squiggly line above is witness to how any piece of good news gets rammed down the market's collective throat,with those up-gaps particularly notable. Somebody out there is providing the shares to sell.

5/9/17

Sandstorm (SAND) (SSL.to)

It's amazingly cheap right now. I actually read some dumbass sell side anal yst report this morning saying Osisko was comparatively better value than SAND. That author is either on drugs, dropping his underpants to Sean, or plain stupid.

A simple gold chart

From a humble scribe.

 
Mind you, I can't believe you're buying Northern Dynasty again. For details, please see the definition of insanity that's usually attributed to Einstein.

Coming up for air...

....glub glub, hi out there. Having a nice day?

Here at IKN Nerve Centre we're unlocking the shutters and firing up the generator. Good to be back.