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5/20/17

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

...in reverse order:

Third Place: "Eldorado and Integra". Beats me how a five word post devoid of information can rack up thousands of views. You internet people are nuts.

Second Place: "The Alset (ION.v) scam and its classic red flag price action (updated)". The type of capitalism that makes me vomit. Shame on you, Canada.
 
First Place: "Cannabis Wheaton (CBW.v): A total scam". By a mile. Just goes to show this blog is wasted on covering junior mining, if I cared about an interesting sector I could retire next year.

Pussy on the GDXJ

Colombia Gold Letter's Paul Harris and his now weekly blog missive, here. This one's called "Pussy on the GDXJ", for reasons explained.

5/19/17

The Friday OT: Greg Haines; Azure

Oh my stars. This song...



...and the stupendous Bose earphones I was lucky enough to receive as a birthday gift recently are...well, it's a total addiction. It's 14 minutes long and the first time you listen you may start thinking that it's not going anyway fast but don't fret, relax, take the journey, start from the beginning and let it grow because if you do (and make sure it's coming out of good speakers) you're in for a musical trip like no other. Amazing, amazing, amazing. 

Updating the Alset (ION.v) scam

Popped on volume and dropped away again, you say? Ah wuz shocked!



Full explanation in Tuesday's post but it's worth asking yourself, who was selling into that greenhorn buying?

UPDATE: TY reader JB for the heads-up. For more on the Alset scam, read the latest installment from the real geologist unafraid of calling out a few homes truths about the company. DanO published this today, it's funny, too.

The decline and fall of the Goldcorp (GG) empire

This time last year, Goldcorp had a market cap of U$14.4Bn, U$2.9Bn more than Franco Nevada (FNV). Today Goldcorp has a market cap of U$11.5Bn, U$1.5bn less than Franco Nevada.

The Sibanye (SBGL) rights offering and sell side reality

As your humble scribe writes these words, Sibanye Gold (SBGL) is 33% down on heavy volume at the open in NY, all due to the announcement earlier today (South Africa morning time) that the company was running a discounted rights offering in order to raise the cash to buy Stillwater (SWC). 

That's the background, here's the reason for this post; Of all the things around this large-scale snafu (which investors approved on April 25th you'll recall...wonder how they're feeling now?) this section of the Mining Dot Com report on the fallout is easily my fave:
A report by Citi last week – which re-initiated coverage of Sibanye – said the weakening in the share price had now fully priced in the risks of the Stillwater deal.
It added that the Stillwater takeover was value destructive on both earnings per share and net present value per share wich would result in a 19% to 48% decrease in headline share earnings from Sibanye’s 2017 to 2022 financial years.
Following publication of the terms of the rights offer, however, the bank’s analyst, Johann Steyn, amended his position saying the dilution was far heavier than the 643 million shares issue he was expecting at only a 20% to 25% discount.
“The final terms of the rights issue is thus much more dilutive than we expected and as a result places a further downside risk to our estimates,” said Steyn. “The larger than expected discount of this rights issue could also imply that our 7% per year cost of debt assumption on the remaining $1bn to $1.65bn might be too favourable,” he added.

It just goes to underscore that the only way sell side anal ysts offer real value to clients is via procuring illegal inside information (then making it sound like assumptions or estimates). If not, they're just out there guessing like the rest of us.

UPDATE: Somebody who has previously traded in and out of SBGL and really knows their way around capital markets, "A. Reader" writes in:

 "...the purchase by SBGL was one of those hideous management decisions.  Any investor could just buy SWC cheaper if they wanted to diversify, there was no real synergy or special advantage to SBGL buying SWC.  SBGL deserved to get knocked down significantly.  And you are very right, the analysts are just guessing mostly.  They get the same SEDAR and SEC filings we do.  And then they have even more cognitive biases than the average person."


Antioquia Gold (AGD.v): And so it begins

At the Request of IIROC Antioquia Gold Inc. Advises it is Unaware of Any Material Changes

CALGARY, ALBERTA--(Marketwired - May 19, 2017) - Antioquia Gold Inc. ("Antioquia" or the "Company") (TSX VENTURE:AGD)(OTCQX:AGDXF) At the request of IIROC, Antioquia wishes to confirm that Antioquia's management is unaware of any material change in the Company's operations that would account for the recent increase in market activity.
Antioquia in accordance with TSXV policies also announces that it has terminated its contract with its Vice President, Investor Relations, Mr. Jim Decker, effective June 18, 2017. Antioquia's management does not view this as a material change in the Company's operations.

Because when a brand new CEO fires one of the founding shareholders of the company for no good reason whatsoever "it's not material". Oh of course not guys!

UPDATE: It also turns out that Jim Decker, as VP IR of AGD, was being deliberately kept in the dark about progess at the company''s Cisneros project. According to reliable information received by IKN, he has been asking for progress reports from the Colombia end of the company for the past six weeks, but to not avail. He seems to have been completely ignored by the people setting up the firesale merger. Too dangerous to their sneaky plans, probably.

Just so we're clear on Cannabis Wheaton (CBW.v)

May 26th or not, it's still a classic Canadian scam. Are you seriously suggesting they've magically converted a couple of million dollars into over $150m under that share structure for the good of their beloved shareholders?

The thing about IKN is that it doesn't have to cower under the pressure of a corner office boss, we're free to tell the messy truth about matters.

5/18/17

The rulers of junior mining newsletters: A straw poll

It's been nearly two weeks since the Metals Investor Forum (MIF) in Vancouver (May 5 and 6) and just over a week since the presentations of all newsletter writers who presented there were stuck on Youtube (all right here). By luck or judgement, this evening your humble scribe was over at the page where all the presentations are stored for a completely different reason but, while there, couldn't help but notice the viewer figures for the MIF newsletter writer slots. They're a straw poll of overall popularity for me, take a look for yourself:




It doesn't surprise this humble corner of cyberspace to see Joe Mazumdar (1,714 views) of Exploration Insights at the top of the poll. Then come Kaiser (1,375) and Coffin (1,019) but even those don't really pack in the viewers. Meanwhile, nobody else can even muster 1,000 views. 

In comparison, if I stick a video of the neighbour's cat playing with a ball of wool or my dog going wappy running round the house and banging into furniture, we're both guaranteed 10,000 views minimum. That's junior mining for you.






IKN explains what's going on at Antioquia Gold (AGD.v)

Did you see Antioquia Gold (AGD.v) drop 30% on big volume today? Are you wondering why this company that's recently been pumped for cash payments by Northern Miner's despicable racist John Cumming has suddenly given back all the price gains won since Cummins's puff piece late last year? Pretty simple really, as the dynamic duo of Cori Puno (a piece of crap private mining company in Peru which treats its employees and locals around the mine like shit), Alvaro Espinoza and the recently appointed CEO Gonzalo de Losada, are engineering a price crisis in order to snatch the company at a bargain price and fold it into Batero Gold (BAT.v) at pennies on the dollar.

You read it here first, sportsfans.

Brazil: The Temer scandal

LADB has your back. Here's how Jordana Timerman's post starts, but you need to go over and read it all:
Two businessmen secretly recorded Brazilian President Michel Temer telling them to continue paying a jailed politician hush money, according to a report yesterday by O Globo that has scandalized a country already accustomed to House of Cards plot twists. 
The tape from March forms part of the plea bargain testimony submitted by brothers Joesley and Wesley Batista, who run the country’s biggest meat-packing firm JBS. Their tapes reportedly implicate other high level politicians such as former presidential candidate Aecio Neves and the former finance minister Guido Mantega.

In covert recordings made during two conversations in March, Joesley tells Temer he is paying former House speaker Eduardo Cunha to keep him quiet, to which the president allegedly replies: "You have to keep it going, OK?" The executives carried a recorder in their pocket in conversations with politicians, according to O Globo. It's not clear what Cunha was allegedly being paid to keep silent about.

Full report here, today's must-read on LatAm.

Fell on black days

Chris Cornell




Youtube here

A Flash update...

...has just been sent to subscribers, about 45 minutes before the opening bell on this bright and sunny Thursday morning. A comment on one specific stock.

5/17/17

Regarding the MiningWatch legal action brought against Peru

Today, MiningWatch Canada announced that it had started legal action against Peru (more precisely, several specific State entities of the country) due to the events of the third weekend in April when MiningWatch's Jen Moore, along with a US journalist colleague, were arrested, detained and a day later deported from the country after holding a presentation and showing a documentary against HudBay in the city of Cuzco (the nearest large city to HudBay's Constancia mine). Here's how the MiningWatch NR begins:
(Ottawa) On Tuesday, MiningWatch Canada filed a motion for habeas corpus in a Peruvian court in response to the illegal and arbitrary detention of the organisation’s Latin America Program Coordinator Jen Moore and American journalist John Dougherty on April 21 in Cusco, Peru, following a screening of a film about Hudbay Minerals’ operations in the Americas. The legal action against the Peruvian Interior Ministry, the Security Department in Cusco, and migration authorities in Cusco, seeks to stop the criminalization of the MiningWatch worker and to prevent future police surveillance, harassment, arbitrary detention, and criminalization against her and any other foreign researchers, journalists, public speakers, and human rights defenders. Continues here.

It's complete bullshit and nobody should fall for the hand-wringing nonsense about Human Rights or Free Speech being peddled to justify this smokescreen legal action. What's more, it's easy to explain:
1) Jen Moore and John Dougherty entered Peru on tourist visas. This means they cannot perform gainful employment legally.
2) Not only that, but according to Peruvian law (not opinion, not justice, not custom but the country's well-established law) no foreign citizen* is permitted to involve itself in political activity in the country.
3) Jen Moore and John Dougherty not only broke the terms of the tourist visa, but they also broke the law of the land where they were located.
4) Therefore, the State of Peru and its police and immigration forces were absolutely within their rights to detain the two people and immediately deport them once they had proof they were both working (i.e. presenting the documentary made by Dougherty under the auspices of MiningWatch) and making political opinion without previous permission.

And that's it, the whole story. The fit of pique demonstrated by MiningWatch today has a lot more to do with two details: 1) Jen Moore won't be allowed into Peru again without the type of pending habeas corpus action and 2) it's really easy to start a legal action in Peru and it can be spun out indefinitely, thereby gaming the system. Free speech and human rights my ample buttocks, these people broke the law! Period.

For the record, I'm not against MiningWatch and on many occasions I think they've done good work on meaningful and important cases, Canada needs organizations such as these in order to keep its sometimes sketchy and rule-bending mining industry in check. But Jen Moore has lost plenty of kudos in the eyes of IKN today, this is just sneaky backdoor political maneuvering, exactly of the type she accuses mining companies and their toadies. You broke the law, Jen. They kicked you out and had every right to do so. Suck it up and STFU.

*Without residency. If you have your permanent residency papers in order you can shout your mouth off 24/7.

Trevali (TV.to):Toldyaso

Back on March 14th, when Trevali (TV.to) announced its deal to buy Glencore's zinc producer assets, the sell side world was falling over itself to applaud, cheer, and generally FEL8 the big swinging dicks who'd put the deal together. Why so? Because there was CAD$230m bought deal attached and it was time to drink deep from the trough of legalized corruption. 

Unsurprisingly, your author didn't share their view. Here's the post from March 14th:

So if I have this right, Glencore is exchanging fixed assets for cash by selling two of its zinc mines to a company that is, for all intents and purposes, its unofficial subsidiary while zinc prices spike higher and the market lemmings are all gooey about the metal.

I mean, what does Glencore know about the price of zinc anyway?*

And as the big fish hands off risk to the small one, the people running the small fish does the same by diluting the merry hell out of its long-suffering shareholder base once again. Meanwhile, don't expect any sort of criticism for this outrageous deal from the sell side whores in suits and cubicles, there's commish to be made from selling paper. 

*If you're a mining investor and can't recognize the irony, may the higher deities help you


Aaaaaand here we are, two and a bit months later and not only is TV.to down 17% from the deal date, it's now one of the very VERY few zinc stocks that's down 2017 year-to-date.



Which brings up an interesting chain of logic:
  • There was a C$230m bought deal, sold by the sell side whores for juicy commish.
  • According to Canadian rules, they can only sell to "accredited investors".
  • One of the rules to become an "accredited investor" is that you must demonstrate a sophisticated level of market intelligence and experience.
  • If you couldn't see what's in front of your face on this deal, that Glencore made out like bandits and not only does it transfer all risk to TV (including closure costs) but also keeps control of all production from the mines via offtake agreements, you have to be a dumb and naive market dumbass.
  • Dumb and naive market dumbasses are not allowed to be accredited investors.

So who bought the shares?

The 60 minute gold chart right now...

...is interesting.


5/16/17

The Angry Geologist does Tinka Resources (TK.v)

Don't miss this one, it's on the link right here.

A good question

TY reader J:



Original tweet here.

Latin America Daily Briefing on Mexico and Venezuela

It's always a daily read here at IKN Nerve Centre, but the last couple of editions of Jordana Timerman's most excellent "Latin America Daily Briefing" have been outstanding.
Yesterday we had this edition, with a report on the return of high crime rates in Mexico plus an excellent overview of the state of Venezuelan affairs. 

Today's edition concentrates on the hot-topic issue of violence against journalists in Mexico, what with the shooting death of a prominent anti-corruption reporter in Sinaloa State yesterday.
LADB is without peer on rounding up regional news and the fact that it's done in English is a bonus, it makes it even easier to recommend on these pages.


The Alset (ION.v) scam and its classic red flag price action (updated)

Since the scamster Stares brothers bought in their useful idiot Allan Barry (zero qualifications for being a CEO but people who sell their soul don't fret over details) to head up Alset Minerals (ION.v), now re-named to fool another batch of sheep with their plans to sell ferts in Mexico (my stars!), the stock price has exhibited a classic Vancouver pump and dump pattern:
  • BS news release
  • Immediate pop on volume
  • Immediate drop back
  • Lather rinse repeat (though the repeats tend to suffer from the law of diminishing returns)
This three month price chart of ION.v has the lowdown:



Back in early March (oh! PDAC time! Hoodathunkit!?!) they found encouraging rocks. Nice. Early April the stock price moved hard because of the earth-shattering news that they'd been awarded permits (gotta laugh, considering the only other alternative). On April 4th the move was due to the company changing its name. Etc etc and now yesterday, when ION.v informed us they'd drilled (barely, holes lost early) into the brine salar and found brine! Something we already knew was there (the idiot Barry falsely claimed in his NR that the prospect had never been drilled before; it has and brine was found back then too) but notably they want to move the stock before even bothering to assay samples and find out how much/little interesting stuff is contained in the solution.

But there's one other thing that sticks out about this scam stock, that's denoted by those two thin red lines. On March 27th ION.v announced a $520,000 (i.e. small) placement round with the share units priced at 13c (they came with 20c warrants too). Then just a few days ago ION.v closed the placement at $369,000 gross proceeds raised. So these jokers are telling me that ION.v trades notably above 13c for weeks on end since March 27 and does many millions of shares in volume, but they can't fill a measley $520k placement due to lack of outside interest? That's one big red flag right there, the clear signal of an insider manipulated stock price.

UPDATE: The über-thinskinned front behind this rip-off, Allan Barry, sure has a lot of free time on his hands. We note today as is nearly always the case, he's flapping his gums and wasting bandwidth over at CEO.ca. Here's what he has to say about your humble scribe this morning:




Silly boy, Allan. For one thing you can't be taken seriously when using phrases like "pro tip" because you are not a pro. You're not a geologist, not an engineer, not a lawyer, not anyone with a reasonable professional background or qualification to run a serious mining company. Being a professional lip-flapper only qualifies you for running scam juniors. For another, you don't even understand what the word "troll" means. For another, "Oh noooo! I'm a CEO and somebody said nasty things about me!" Comes with the territory, little boy. Grow up.

But the real one is at the end, that utter stupidity about drilling, because if you did have half a brain about explorecos you'd know that drilling selectively and then cherrypicking unrealistic results in order to pump a stock is exactly what scams like yours do. All the time.  Run along now, get back to your everso everso busy CEO's desk.

Chart of the day is...

...the gold/platinum ratio:




Very interesting.

Cannabis Wheaton (CBW.v): A total scam

I hear this impressive pumpjob scam is being rammed down the throats of complete idiots in both Canada and Germany. Well folks, I do not claim credit for the words and research that follows but 1) I know where it came from and 2) I've checked it out and it's all true. The Deslauriers brothers are Canadian scum of the highest order and their running their BS on you, right now.

Be in no doubt, CBW.v is a classic Vancouver scam. Be short, avoid entirely, but whatever you do make sure you're not long this worthless sack of excrement on May 26th. Read on, kind reader

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Cannabis Wheaton.  CBW.V.  A new “streaming” company with a market cap at $1.50/ share of $225M!  A brand new company that vetted PanCann into the publically traded merchant bank Knightswood Financial (KWF-V) on May 3, 2017 and concurrently, bought 13 streaming deals from PanCann for total proceeds of $1,000,000. 

What do they have? 

·         Cash, maybe $1.8M on balance sheet and no debt that I can find.
·         Agreements with 14 cannabis companies to stream production or obtain royalties… however,, only 2 of which actually have their sales license currently.  The other 12 are in “various stages of approval from Health Canada”.  See below.
·         Over the past five months have issued a monstrous amount of shares all at a cost of $0.05 – 0.055 with an equal amount of warrants at $0.07.  And because those cheap shares weren’t cheap enough, they did a 3 for 1 stock split for every share in the company, tripping their share count, and decreasing the cost of those shares by 2/3.. to approx $0.015 per share.
·         These non-brokered PP’s were four month hold, and as such, will come free trading four months from closing.  20M coming out May 26, 2017 at 0.05 with 20M warrants at 0.07.  And in August 2017, 25.5M shares at $0.055 come free and again 25.5M warrants at cost $0.07.  The stock is at $1.50 today…

Capital structure and raises.

1.       Dec 31,2016 Knightswood Financial (KWF) had 3,011,667 basis shares outstanding.  (Turned to 9,035,001 in the 3 for 1split noted below)
2.       Jan 2017, approved by shareholders, the share capital of company could be increased from 100M shares to unlimited number shares.  Also, approved to allow for issuance of stock options for up to 20% of number shares issued and outstanding.
3.       Jan 26, 2017 –Closed - $1.1 M Non-brokered PP  20,309,182 special warrants at C$0.055.  1 share and 1 warrant at 7 cents.
4.       March, 2017 company closed two Non-brokered PP’s and distributed total 25,510,656 units priced C$0.055 for C$1.4M proceeds.  One share + one warrant at C$0.07.
5.       March 15, 2017 company granted 4,238,695 stock options to consultants of company at price $0.075 per share.  Total options now 12,716,085 with exercise price of $0.025 per share. 
6.       April 7,2017 company completed a forward split of common shares 3 for 1.   Following completion and approval by TSXV, number of outstanding shares will be 150,864,996 plus 133,089,033 warrants outstanding at avg. price $0.0233 per share.

Total basic shares
3,011,667
20,309,182
25,510,656
Total 48,831,505  x 3 = 146,494,515 basic shares outstanding, plus 133,089,033 warrants at avg. price $0.0233!!!   

*These private placement shares will come free trading in four months from closing date.   On May 26, 2017 (4 months from first PP) should see 20,309,182 shares come free trading at cost of $0.05.   In August, we should see 25,510,656 shares free trade at cost to holder of $0.055.  Plus, both parties have mirrored number of warrants to shares they received, both at a cost of $0.07.  20,309,182 at .07 May 26 and 25,510,656 in August 2017.

Balance sheet.
Knightswood Financial (The shell that vetted PanCan into their structure) had $300,000.00 on balance sheet as of Dec 31, 2016.   With the three private placements mentioned above, the company has an additional $2.5M on the books.  Less the $1M they paid for the 14 “streaming” agreements.  So maybe left with $1.8M.

Streaming deals.  This is where the company is garnering all of their value. And the market seems to be paying a massive premium for deals that have not yet closed, companies without cultivation licenses in hand, and Cannabis Wheaton does not yet have the capital to fund any of these agreements or perceived deals.

Conclusion:
1)      the company is ridiculously overvalued at current levels and will correct in the next couple weeks, or certainly once the initial wave of $0.05 (or 0.015 in real terms) 20M shares and 20M warrants come free trading on May 26.
2)      Someone is propping the company up so that they can get the financing they desperately need. After all, the company is predicated on obtaining financing so they can in turn finance the companies mentioned below (and they don’t have any real money on the balance sheet currently).  I did notice they filed an AIF on Sedar… which means they would be short form eligible.

5/15/17

Nevada Copper (NCU.to) reports its quarter (from IKN417)

A little snippet from yesterday's weekly.


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Nevada Copper (NCU.to): And on the subject of pig-awful balance sheets, NCU filed its 1q17 financials after the bell on Friday evening. Here’s the balance sheet, with scribbles:


You don’t need very many this time either, just a circle around that long-term debt pile is enough. If it had a viable project it might be a different story, then again if it were viable it wouldn’t be at project stage today. Instead, NCU is merely a vehicle used to drain cash slowly from Pala to Red Kite.

As for that “Fantasy Island” comment, it’s useful to remember that despite using a copper price of U$3.00/lb for U/G and U$3.15/lb for open pit in its feasibility study (and those only get you yo a mediocre 15.6% IRR) and despite copper not being at those price for many years, NCU hasn’t bothered to write down or impair its fixed asset value by a single red cent. That U$235m asset price may as well be U$235 Billion as neither number bears any relation to reality. At least CMMC has some cash flow. “Optionality on copper” stops being “Optionality on copper” when the project never has a chance of being built.

Eldorado and Integra

And why the hell not?

5/14/17

The IKN Weekly, out now


Pluck it!


IKN417 has just been sent to subscribers. Brought to you by the music of Johann Sebastian Bach, BT, Deadmau5, Beethoven and Paco de Lucia. And two days sat at a keyboard, of course.

El mas grande. Lejos.

3-1 en la Bostanera. Gracias por otra alegria, Muñeco.


Talk to me, silverbugs! Talk to me!

Where are you all? Why so serious? Where have all the flowers gone? Why aren't we at 15:1 yet?



Silverbugs: People so stupid they make goldbugs look like Nobel prize candidates. People so stupid they take Keith Neumeyer at his word.